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Several weeks ago a bombshell report by John Solomon and Alison Spann of The Hill revealed that an undercover FBI informant embedded deep within the Russian nuclear industry had uncovered evidence as early as the fall of 2009 of a massive plot by Russia to corner the American Uranium market. Evidence of the scheme was in the hands of the FBI an entire year before the Obama administration approved the sale of Uranium One to Russia’s state-owned Energy giant, Rosatom – which has since been exporting ‘yellowcake’ uranium to Canada, Europe and elsewhere via a Kentuky trucking firm.

Based on what the FBI knew – including evidence which purportedly includes a video of Russians preparing briefcases of bribe money – the deal never should have gone through. Moreover, both Robert Mueller and current deputy Attorney General Rod Rosenstein were directly involved – and current Attorney General Jeff Sessions and other Justice Department officials appear to be covering for them.

Mueller’s FBI knew

Key among the troubling revelations from The Hill is the undercover informant’s claim that Obama’s FBI, headed at the time by director Robert Mueller, knew that “Russian nuclear officials had routed millions of dollars to the U.S. designed to benefit former President Bill Clinton’s charitable foundation during the time Secretary of State Hillary Clinton served on a government body that provided a favorable decision to Moscow” – a deal which would eventually grant the Kremlin control over 20 percent of America’s uranium supply, as detailed by author Peter Schweitzer’s book Clinton Cash and the New York Times in 2015.

The FBI mole also gathered extensive evidence that Moscow had compromised an American uranium trucking firm, Transport Logistics International (TLI) in violation of the Foreign Corrupt Practices Act – engaging in a scheme of bribes and kickbacks involving the company which would have transported the U.S. uranium sold to Russia in the ’20 percent’ deal.

The Russians were compromising American contractors in the nuclear industry with kickbacks and extortion threats, all of which raised legitimate national security concerns. And none of that evidence got aired before the Obama administration made those decisions,” a person who worked on the case told The Hill, speaking on condition of anonymity for fear of retribution by U.S. or Russian officials." –The Hill

In short, the FBI had ample evidence of the Russian plot before the Obama administration approved the Uranium One deal.

Iron-Clad Gag Order Lifted

The FBI informant – outed five days ago as energy consultant William Campbell -was “threatened” by Obama admin AG Loretta Lynch to keep quiet, according to his attorney – former Reagan Justice Dept. official and former Chief Counsel to the Senate Intelligence Committee Victoria Toensing. After Senate Judiciary Committee Chairman Chuck Grassley (R-VA) demanded Campbell be allowed to testify in front of Congress, the gag order was lifted.

Sessions And The DOJ are running Interference

In a move which can only be interpreted as an effort to protect the FBI, the Obama administration and the Clintons, AG Jeff Sessions and several Justice Dept. officials have been casting doubt on the value of Campbell’s evidence, along with the need for a Special Counsel to investigate.

Via John Solomon of The Hill

“both Attorney General Jeff Sessions in testimony last week and Deputy Attorney General Rod Rosenstein in a letter to the Senate last month tried to suggest there was no connection between Uranium One and the nuclear bribery case.Their argument was that the criminal charges weren’t filed until 2014, while the Committee of Foreign Investment in the United States (CFIUS) approval of the Uranium One sale occurred in October 2010.”

THIS IS A LIE – which has rubbed several Congressional republicans the wrong way:

“Attorney General Sessions seemed to say that the bribery, racketeering and money laundering offenses involving Tenex’s Vadim Mikerin occurred after the approval of the Uranium One deal by the Obama administration. But we know that the FBI’s confidential informant was actively compiling incriminating evidence as far back as 2009,” Rep. Ron DeSantis, (R-Fla.) told The Hill.

“It is hard to fathom how such a transaction could have been approved without the existence of the underlying corruption being disclosed. I hope AG Sessions gets briefed about the CI and gives the Uranium One case the scrutiny it deserves,” added DeSantis, whose House Oversight and Government Reform subcommittees is one of the investigating panels.

Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) sent a similar rebuke last week to Rosenstein, saying the deputy attorney general’s first response to the committee “largely missed the point” of the congressional investigations.

“The essential question is whether the Obama Justice Department provided notice of the criminal activity of certain officials before the CFIUS approval of the Uranium One deal and other government decisions that enabled the Russians to trade nuclear materials in the U.S,” Grassley scolded."

Meanwhile  John Solomon and journalist Sara Carter have copies of the FBI informant’s evidence, and Carter just annihilated the DOJ in an explosive report laying out the players, the timeline, and the evidence at hand.

By the time the sale of Uranium One was approved by the Obama Administration, the FBI’s investigators had already gathered substantial evidence and the bureau was also aware of Russia’s intentions to enter the U.S. energy market and its desire to purchase a stake in American uranium,” Carter writes.

Highlights: 

  • FBI mole William Campbell was a highly valued FBI asset - paid $51,000 by FBI officials at a celebration dinner in Chrystal City, VA, where Campbell's attorney says they thanked him for his service.
  • Campbell was required by the Russians, under threat, to launder large sums of money - which allowed the FBI to uncover a massive Russian "nuclear money laundering apparatus"
  • Campbell collected over 5,000 documents and briefs over a six year period
  • Campbell uncovered a Russian plot to penetrate the Obama administration and gain approval for the Uranium One sale, including a 2010 email which describes "Russia's intent on expanding its Uranium expansion in the United States." 

“The attached article is of interest as I believe it highlights the ongoing resolve in Russia to gradually and systematically acquire and control global energy resources,” said Fisk, who titled the subject line of the email ‘Russian uranium.’  The article attached to Fisk’s email, was a Reuters report in June, 2010, titled ‘Despite price falls, ARMZ confident of Uranium One shareholder approval. -Sara Carter

This is not just about bribery and kickbacks but about a U.S. company that was transporting yellow-cake for the Russians with our approval,” an unnamed U.S. Intelligence official told Carter, adding “This should raise serious questions. At the time everyone was concerned about Russia’s ties to Iran, we still are. And of course, Russia’s intentions and reach into the U.S. energy market.”

And after all of that, Attorney General Jeff Sessions doesn’t think there is “enough basis” to appoint a second Special Counsel to investigate the Uranium One deal.

Moreover, Carter reports that “several Justice Department officials, who formerly commended Campbell, have spoken on background to other news agencies disparaging Campbell and his work at that time” – despite the FBI’s glowing review and $51,000 check.

Carter writes:

"In a story by Michael Isikoff, published on Yahoo, a DOJ official involved in the case stated that Campbell was a “disaster” as a potential witness and that “there was no question that Campbell’s credibility was such that the prosecutors had to restructure the case,” the source said.“He got cut out of the case entirely.” It is important to note that Campbell was going through 35 intense radiation treatments after being diagnosed with cancer during his time with the FBI, according to hospital records.

After years of effective reporting and working in harms way, the cancer diagnosis and treatment had a profound effect on Campbell’s ability to interact with in the final stages prior to the indictments,  said Toensing.

She said her client is ready to present Congress with all he knows and called the stories a “smear job.”

This is what the left do-provide false talking points to compromised reporters who are willing to regurgitate whatever they are fed,” said Toensing."

Keep in mind – all it took for Rod Rosenstein to establish Mueller’s Special Counsel on Russian influence was a dubious Russian hacking report by a discredited DNC-linked security firm and a hearsay memo from former FBI director James Comey, stating that President Trump asked him to go easy on former National Security Advisor Mike Flynn.

If the DOJ continues to stonewall the Uranium One investigation and Campbell’s testimony is given the runaround, one has to wonder if any of the 5,000 documents – or even the Russian bribe video – will mysteriously appear in the public domain for the world to see.

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Author: ZeroPointNow
Posted: November 21, 2017, 8:29 am

Authored by Finian Cunningham via The Strategic Culture Foundation,

France’s invitation to beleaguered Lebanese premier Saad Hariri for him and his family to spend “a few days in Paris” has been viewed as French President Emmanuel Macron stepping in with deft soft power to resolve tensions between Saudi Arabia and Lebanon.

Less charitably, what Macron is really doing is giving cynical cover to the Saudi rulers for their extraordinary acts of aggression towards Lebanon and their violation of that country’s sovereignty.

Two of Hariri’s children were left in Saudi capital Riyadh while he visited France over the weekend. Were they being used as hostages by the Saudis to ensure that Hariri maintains the Saudi spin on events? Certainly, the arrangement raises suspicions, but the French president sought instead to affect a “normal” nothing-is-unusual appearance.

Lebanese President Michel Aoun last week publicly accused Saudi Arabia of holding Hariri in Riyadh against his will. Aoun said the Saudi rulers were violating international law by detaining Hariri and forcing his resignation as prime minister of Lebanon. Such acts were tantamount to aggression, said President Aoun.

Yet Macron has said nothing about Saudi interference. He has instead turned reality on its head by censuring Iran for regional “aggression” and thereby backing Saudi claims that Iran is supplying ballistic missiles to Yemen. Iran swiftly condemned Macron for “stoking regional tensions”.

Credit goes to President Aoun for speaking out plainly, telling it like it is and expressing what many Lebanese citizens and many other observers around the world have concluded. The whole debacle is an outrageous affront to Lebanon and international law by the Saudi rulers, when it is taken into consideration Hariri’s hasty summoning to Saudi capital Riyadh earlier this month, his subsequent televised resignation speech on Saudi TV, and his long-delayed sojourn in that country. What is even more despicable is that the Saudi interference in the sovereign affairs of Lebanon is threatening to re-ignite a civil war within the small Mediterranean country, and, possibly worse, a war across the region with Iran.

Hariri has claimed in a later media interview, held in Saudi Arabia, and in reported communications with family and friends who are back in Lebanon, that he was not under duress while staying in Saudi Arabia. That claim beggars belief given the bizarre circumstances of Hariri’s sudden departure and his protracted nearly two-week stay in Saudi Arabia.

In any case, the president of Lebanon, Michel Aoun, has concluded that something is badly amiss in the saga, and he has explicitly accused Saudi rulers of violating his country’s sovereignty.

Therefore, if there were any principle or adherence to international law, the actions of Saudi Arabia should be condemned categorically by the international community, the UN, the European Union and France in particular owing to its historic relations with Lebanon as the former colonial power before independence in 1943.

But no. What we have instead are either shameful silence from Washington, or mealy-mouthed statements from the EU. The EU’s foreign policy chief Federica Mogherini issued a vague statement warning against “foreign interference” in the affairs of Lebanon. What kind of cowardly circumlocution is that?

Lebanon’s prime minister Saad Hariri was, in effect, detained by Saudi Arabia and forced to tender his resignation from public office as a matter of ultimatum. It has been reliably reported that the Wahhabi Saudi rulers were exasperated with the Shia group Hezbollah being part of the coalition government in Beirut. Hariri is a Saudi-sponsored Sunni politician who is antagonistic to Hezbollah and by extension, Iran. But apparently, he was not sufficiently hostile, in the view of his Saudi backers. Hence, Hariri was summoned to Riyadh and ordered to resign on November 4. (The defeat of the Saudi-sponsored covert terror war in Syria no doubt was a factor too in the timing.)

France’s President Macron is playing a particularly slippery game of pandering and expedience towards the Saudi despots.

As the Washington Post’s WorldView briefing reported last week: “French President Emmanuel Macron told reporters that it was important to dispel the implication that Hariri was a Saudi prisoner.”

The newspaper goes on to quote Macron saying rather vacuously: “We need to have leaders who are free to express themselves. It’s important that [Hariri] is able to advance the political process in his country in the coming days and weeks.”

The question should be asked: why is it important for Macron to “dispel the implication that Hariri was a Saudi prisoner”?

From virtually all accounts, including that of Lebanese President Michel Aoun whose view should surely be paramount here, that is exactly what Hariri was made by the Saudis – a prisoner.

Three days before his summoning to Riyadh and his scripted resignation speech on November 4 – in which Hariri claimed with incredible drama that he was in danger of an assassination plot by Hezbollah and its ally Iran – it was reported that Hariri was having dinner with the French culture minister in Beirut. During their meal, he received a phone call. His demeanor darkened, and immediately departed from the table for a flight to Riyadh. Without the company of aides, Hariri was met on his arrival by Saudi officials who took his mobile phone from him. He was not greeted by senior Saudi rulers like Crown Prince Mohammed bin Salman, which would have been customary diplomatic protocol.

Everything about the next two weeks of Hariri’s stay in Saudi Arabia signals a de facto detention against his will. Admittedly, he made a brief flight to the United Arab Emirates during the time period, which was claimed by the Saudis to be proof of his free movement. The UAE rulers are closely aligned with the House of Saud, and besides Hariri was soon back in his Riyadh residence, from where he continued to tweet to friends that he was “fine”.

This is nothing but a sham. The stark facts are that Saudi Arabia has brazenly interfered in the internal affairs of Lebanon, trying to force its prime minister to step down. Furthermore, the Saudi rulers have accused Lebanon of “acts of war” by allegedly supporting Houthi rebels in Yemen; the Saudis have also ordered their nationals to leave Lebanon; and there are reports emerging of the Saudis now pushing to suspend Beirut from the Arab League. This is reckless incendiary behavior by the Saudi rulers.

Should we be surprised though? Saudi Arabia has shown absolute criminal disregard for international law over its bombing and genocidal blockade of Yemen, where humanitarian aid groups have warned that 50,000 children may die this year due to enforced deprivation from the nearly three-year American and British-backed Saudi war on Yemen.

The absolute Saudi monarchy has also gone on an internal rampage of arresting its own government ministers and other businessmen in an audacious power-grab under the guise of “an anti-corruption drive”. Moreover, Saudi rulers have been instrumental in organizing a legally dubious trade and diplomatic blockade of Qatar over trumped claims that the latter is a stooge for Iran and singularly supporting terrorists (this from the Saudis who have bankrolled terrorist proxies to overthrow the government in Syria.)

The criminality and rogue conduct of Saudi Arabia is legion and brazenly in your face.

That is why the so-called “international community”, the UN, Washington, the European Union, and France in particular are deserving of withering censure. Their mealy-mouthed muted statements on Saudi misconduct towards Lebanon are a disgrace. They are complicit in wanton lawlessness by their pandering to Saudi despots.

But France’s Emmanuel Macron has emerged as the prime disgrace. His invitation to Saad Hariri and his family to come to France is a cynical move to give cover to the Saudi despots. Tellingly, on the announcement of the invitation, Macron said that “it was not an offer of exile”. That’s Macron making it all sugary nice as pie.

On Friday, the day before Hariri arrived in Paris, Macron actually accused Iran of “aggression” and has called for sanctions on Iran’s ballistic missile defense program. So, Macron, sneakily, is giving the Saudi narrative succor, and blaming Iran, instead of condemning Riyadh for its flagrant interference and aggression.

Again, by inviting Hariri to Paris, Macron is indulging the Saudi-Hariri charade that all is “normal” – when in reality the sordid shenanigans over the past two weeks amount to an outrageous and very grave violation of international law and of a neighboring country’s sovereignty by the Saudis.

With this kind of cynical “diplomacy”, Macron is showing that France is far from capable of having any leadership role or moral authority in the Middle East or the world.

Of course, France’s vested economic interests with the Saudi despots, from arms sales to energy and infrastructure projects, are central to Macron’s expedient calculations.

Macron’s ambitions of engendering some kind of renaissance of France as a global power are futile and nothing but sheer vanity. The cowardice of the French president in the face of Saudi aggression towards Lebanon shows that Macron and his pretensions of “global power” are a puff of cheap cosmetic powder.

Author: Tyler Durden
Posted: November 21, 2017, 8:10 am

In recent years, there has been a major debate about the respective merits of gold versus Bitcoin, even though many, not all, gold bulls are also supporters of the latter. Gold advocates generally view favourably Bitcoin’s inherent characteristics of decentralisation, finite supply and ability to operate (so far) outside of the usual interference by western central banks. Having said that, the launch of Bitcoin futures on the CME in the coming weeks could lead to naked shorting of “paper Bitcoin” by any parties, including central banks and large commercial banks, who deem capping of the Bitcoin price necessary. As we discussed last week in "Financial Times: Sell Bitcoin Because The Market Is About To Become "Civilized", this could align Bitcoin with one of the major issues which has held the gold market hostage for years, time will tell.

While many gold investors remain entrenched in the view that gold will (eventually) prove to be the better store of value, one thing many would acknowledge is that Bitcoin is likely to evolve into a superior means of payment. However, that could be in the process of changing.

A fintech start up is partnering with some financial heavyweights to create a payments system backed by physical – not paper – gold. According to the Financial Times.

The world’s oldest currency is being brought into the digital age with the launch of a debit card and app that will allow people to pay for goods in gold.

 

Fintech group Glint has teamed up with Lloyds Banking Group in the UK and MasterCard to create an app that enables people to load credit in various currencies, which can then be used to buy a portion of a physical gold bar. Customers use the app at the checkout to select whether to pay in a currency or gold, before transacting with their MasterCard.

The development marks the first time people in the UK and overseas can own just a portion of a gold bar through an app, which can then be used in mobile and debit card-based payments. The app also allows people to send gold to peers in the form of a digital payment. Jason Cozens, Glint’s chief executive and co-founder, said: “Everyone is familiar with gold as one of society’s oldest means of exchange, its universal acceptance, its reliability, its history as a store of wealth and as a means of underpinning the value of ‘paper’ currencies. “Unlike paper currencies, gold can’t be wiped out, devalued or corrupted.”

If you’ve been watching carefully Glint (website is glintpay.com) has been working towards this moment for some time. The Crunch reported a capital raising in August this year, noting the impressive list of backers.

Glint, a stealthy London fintech startup that promises a new “global currency,” has raised £3.1 million from a plethora of individual backers in the financial services and asset management space, alongside early-stage investor Bray Capital.

They comprise Haruko Fukuda, former CEO of the World Gold Council and NED of Investec Bank; Oliver Bolitho, formerly Chairman of Goldman Sachs Asset Management Asia; Hugh Sloane, co-founder of asset manager Sloane Robinson; and Lord Flight Of Worcester, formerly of Guinness Flight Global Asset Management.

Other supporters of the new app include the Tokyo Commodity Exchange, and NEC Capital Solutions, a technology integration company. The co-founder and COO of Glint, Ben Davies (right in the photo below), is well known to us for his media appearances - often lambasting manipulation of the gold price – and for running the precious metals investment fund, Hinde Capital. The CEO and co-founder, Jason Cozens, also has gold market experience, having set up “GoldMadeSimple.com, a website that allows investors to buy and store physical gold. Additionally, he set up two ecommerce and online marketing businesses.

In terms of how the service works, the FT reports.

Glint is working with Lloyds in the UK as the deposit holder for customers storing money on their app. When a customer decides to buy gold through the app, this is used to purchase part of a gold bar that is physically allocated in vaults in Switzerland. The app will initially be available in the UK and Europe from Monday before being rolled out in Asia and the US next year.

Mr Davies said the app helps to “democratise” gold by opening access to people who might not be able to afford to buy a whole bar, rather than the commodity being the “preserve of the wealthy”. He added: “The advent of electronic wallets and faster payments through technology means we’re able to use gold in the electronic payment system.

 

“We believe over next few decades people will need the ability to protect their money by owning gold and have the ability to spend it.

We doubt that we’ll have to wait two decades before the vast majority of people will need to protect the value of their money. It could be a matter of months, so Glint’s new service might prove timely. Here are some further thoughts from Davies in the FT article.

Glint’s new service is riding the wave of alternative payments, such as bitcoin, as more people seek payment methods that can store value in a way that differs from traditional currencies. Ben Davies, a co-founder of Glint, said: “We want to create a fairer form of money whereby we give you choice and control over how you protect your money in an era where central banks issue more currency, and so the value of your currency is falling.”

So, is the question gold, Bitcoin or both?
 

Author: Tyler Durden
Posted: November 21, 2017, 7:35 am

Authored by Paul Wallace, op-ed via Reuters.com,

Few British budgets have mattered as much as the one that Philip Hammond will deliver to the House of Commons on Nov. 22.

The chancellor of the exchequer must shore up Theresa May’s perilously shaky government ahead of a vital Brexit summit of European leaders in mid-December. At the same time Hammond has to keep a grip on the public finances.

But the gravest challenge he faces is economic: Britain’s persistent productivity blight.

Productivity – output per hour worked – is the mainspring of economic growth.

In the decade before the financial crisis of 2007-08 productivity was increasing in Britain by just over 2 percent a year, outpacing the average for the other economies of the G7. But since the crisis British performance has been dismal. Although productivity jumped in the third quarter of 2017, prolonged weakness means that it is barely higher than its pre-crisis peak a decade ago. The recovery in GDP has been driven overwhelmingly by more labor input, a source of growth that is running dry – not least since the vote to leave the European Union delivered a message to curb immigration.

Other advanced economies have also experienced setbacks to productivity growth following the financial crisis. Where Britain stands out is in the severity of its reverse. The shortfall in productivity is the main reason real wages are now 4 percent lower than 10 years ago, a potent reason why the leave campaign prevailed in the Brexit referendum.

Productivity is so central to prosperity and to macroeconomic management – by determining how fast the economy can sustainably grow – that a gaggle of economic researchers have been busy in their labs trying to diagnose the now decade-long disease. Early detective work highlighted the impact of the financial crisis itself, which was especially severe in Britain. This held back productivity by throttling bank credit to new potentially fast-growing ventures and by jamming up the usual way in which capital moves from declining to advancing sectors. 

But as the crisis has receded and British banks have become better capitalized this explanation is less convincing. Longer-term forces appear to be in play in Britain and elsewhere. Firms at the technological frontier continue to forge ahead in raising productivity. However, the diffusion of their best practices within economies has slowed. An aging workforce is now acting as a drag. And the contribution to productivity from improved educational attainment is falling.

One reason the productivity setback has been particularly severe in Britain is that its apparently robust performance before the crisis was overstated and unsustainable. Banking activities ballooned on the basis of what turned out to be economically and socially harmful practices such as risky securitizations. Despite making up less than a tenth of the economy, the financial sector has been responsible for nearly a third of the productivity slowdown. Longstanding weaknesses in qualifications and skills have also become more damaging as business becomes more knowledge-based. Over a quarter of British working-age adults perform poorly in numeracy or literacy or both.

Investment is inadequate, too. Although firms have stepped up their capital spending after it collapsed during the recession, they have done much less so than in previous recoveries. Business investment is only 5 percent above its pre-crisis high a decade ago. At a similar stage in the recoveries following recessions at the start of 1980s and of the 1990s it was 63 percent and 30 percent higher than the respective previous peaks.

The reluctance to invest in turn is rooted in a financial and business culture that is especially and perniciously short-termist in Britain. Firms under pressure from the markets are reluctant to make the strategic investments needed to keep productivity moving ahead. And too many British managers are simply not good enough.

Although a definitive diagnosis of the British productivity disease remains elusive there is a surprising degree of consensus about the treatment needed to resuscitate the patient. The chancellor’s to-do list should include steps to tackle congested roads and overcrowded trains, to support the sciences, to foster R&D in the private sector, and to upgrade Britain’s poor skills. Since competition spurs higher productivity as new and smarter firms drive out older and less productive businesses, Hammond needs Britain to be as open an economy as possible.

The remedies make good sense but they will not rescue the chancellor, who has in any case already announced more spending on infrastructure. First, they will take time to be effective. Second, finding more money for austerity-hit public services such as policing and health will add to the pressures on the public finances. And third, Brexit is now contributing to the productivity malaise as businesses respond to corrosive uncertainties by curbing their investment plans and as Britain becomes less open to trade by leaving the EU. Raising taxes is always an option for a cash-strapped chancellor, but it would be highly unpopular − not least in the bitterly divided Conservative party.

When he presents his budget, Hammond can be expected to put a brave face on things. He will point to the fall in the budget deficit from a peak of almost 10 percent of GDP after the financial crisis to 2.3 percent of GDP in the financial year ending in March 2017. But what matters now is the future path of the public finances. Britain’s poor productivity prospects will box the chancellor in because GDP is the tax base and future revenues will be smaller to the extent that output per hour worked continues to stall.   

The harsh reality is that Brexit will blight the public finances by hurting productivity. While Prime Minister May might see Britain’s overriding priority as ensuring that next month’s summit enables the Brexit talks to move on to trade, she’ll have to broaden her focus if she hopes to stay in office long enough to secure a deal that minimizes the damage Brexit is inflicting on the economy.

Author: Tyler Durden
Posted: November 21, 2017, 7:00 am

Five days ago, Det. Sean Suiter, a married father of five and an 18-year veteran with the Baltimore Police, was patrolling the streets of West Baltimore around 5pm last Wednesday when he saw suspicious activity. Suiter approached a man and was shot point blank in the head, in a summary execution. He was rushed to the hospital in critical condition where he later died of his injuries.

Rest In Peace Detective Sean Suiter https://t.co/NiKIdmzbAD pic.twitter.com/l7vkrOKjMv

— Baltimore Police (@BaltimorePolice) November 16, 2017

In response, Baltimore Police reacted with ‘fire and fury’ turning the neighborhood where Suiter was shot into an “open-air prison”, shutting down city streets and enabling checkpoints for citizens while officers in tactical gear went door to door, according to Baltimore Brew. Residents were prohibited from entering their own neighborhood unless they showed proper identification, these extreme measures have been in place for 4-5 days.

“They’ve been to my house three times asking, ‘Did you hear anything? Do you know anything,’” said Edward Stanley, a local resident, who had to show a yellow slip before entering the neighborhood.

Baltimore Brew said, the neighborhood was tuned into “open-air prison”, as the complete lockdown was in attempt to collect evidence and search for the shooter.

Police initially said they needed to cordon off the area to try to capture the shooter. Police have said Suiter was in the 900 block of Bennett Place, investigating a previous homicide, when he was shot on Wednesday. So far, no arrests have been announced in the case. This morning, homicide detective Mike Newton told The Brew that the lockdown was necessary to collect evidence.

One community group took pictures of a checkpoint in West Baltimore.

#FreeWestBaltimore pic.twitter.com/P61qoDLHnq

— Baltimore BLOC (@BmoreBloc) November 19, 2017

15 @BaltimorePolice vehicles on Schroeder alone and dozens more on surrounding blocks. All the officers are just sitting in their cars. pic.twitter.com/M9zCCltdzK

— Baltimore BLOC (@BmoreBloc) November 19, 2017

Another twitter account describes how ‘the police declared marital law’, as one police officer with an assault rifle guards a corner.

And apparently police been standing on corners like this the last two days pic.twitter.com/y9Qrd2TSRe

— Pulla (@KINGDACEO) November 17, 2017

Citizens describe how their day lives have been disrupted as West Baltimore remains under police control, as per Baltimore Brew:

Two women walking down Franklin Street to get to their cars, parked blocks away because of the lockdown, complained that they had been harassed by officers.

 

“They know I live here. They’ve seen me come and go. But this one had to pat me down. He [the officer] went like this to my jacket, grabbing it,” said Shelly, 25, who asked that her last name not be used.

 

“They wanted to know where I had been. Why do I have to tell him that? It’s just me in my flip-flops trying to go to my own home.”

 

“We haven’t been able to get our mail for four days,” said the woman with her, Samantha, 50, who also asked not be identified. “Is the city going to pay the late fees on my bills?”

 

“It’s so sad what happened to the officer and I hope they catch whoever did it,” another woman said. “But this is really overboard. I’ve never seen anything like it.”

The ACLU of Maryland released a statement yesterday, who are “troubled by reports that some persons entering or leaving the area have been subject to pat down searches, and that non-residents have been barred from entering the area”.

“While the search for a killer is, of course, a high priority for the police, the limits on lawful police behavior do not disappear even when engaged in that pursuit.  And at least one federal appellate court has said that a similar police cordon and checkpoint system was unconstitutional.

 

“The residents of Baltimore, and, in particular, the residents of the affected community, deserve a clear explanation from the City as to why this unprecedented action has been taken, what rules are being enforced, and why it is lawful.  The need to secure a crime scene from contamination to preserve evidence does not, on its face, explain the wide area to which access has been restricted for days after the incident.”

 

On-the-ground information is scarce to those outside the cordon because access to residents, including by the media, has also been restricted. For that reason, we encourage anyone who has this kind of information to contact us at curtis@aclu-md.org.

WBALTV11 visited one checkpoint in West Baltimore:

West Franklin Street is back open to traffic.

Police plan to release the West Baltimore crime scene Monday morning #WBAL pic.twitter.com/AgyDlqjWQH

— Vanessa Herring (@VanessaWBAL) November 20, 2017

According to one citizen, ‘this is the 3rd time in less than 3 years that West Baltimore has been occupied by police’…

This is the 3rd time in less than 3 years that West Baltimore has been occupied by police:

1) April 27 - May 1 in 2015 after the funeral of Freddie Gray
2) June 27, 2016 at a street celebration of the life of rapper Lor Scoota
3) Nov. 16-???? in 2017 after Det. Suiter was killed pic.twitter.com/C85qSSl6Br

— T'Challa ??Ra ???? (@BmoreDoc) November 18, 2017

Baltimore Brew concludes by saying the Baltimore Police will “clear the crime scene” on Monday, so in a few hours.

Perhaps in a preview of things to come, the 4-5 day siege of West Baltimore by Police has been described by one resident as ‘Martial Law’. Readers concerned about social tensions in the US are urged to monitor events in Baltimore, which better than Chicago or Detroit now demonstrates just how the United States is marching straight into a new, Orwellian era.

Author: Tyler Durden
Posted: November 21, 2017, 6:27 am

Zimbabwe President Robert Mugabe baffled his country and the world last night when, instead of publicly announcing his resignation, he reaffirmed his intention to stay on as the head of state in Zimbabwe, and admonished members of his ruling ZANU PF party for their “arbitrary decision making” and “victimization.”

Mugabe’s defiance immediately spurred conspiracy theories, including one where military commanders who flanked Mugabe during his speech smuggled him an alternate version following the review of his initial draft.

 

Y’all need to watch closely. They legit switched #RobertMugabe ‘s speech or did something hella fishy. Smh. #mugabe #Zimbabawe #kmt pic.twitter.com/twdrfMUZtt

— Loye Olatunbosun (@loyeloves) November 19, 2017

 

Rumors circulated that some ZANU PF lawmakers had fled the country to avoid participating in an impeachment vote, though they were later debunked, according to local media reports. Still, the military’s deadline for Mugabe’s resignation – initially set at noon local time on Monday – has come and gone, and Mugabe remains the nominal leader of Zimbabwe, even if he’s still under house arrest, according to BBC.

However, ZANU PF appears to be reaching the end of its patience with its long-time leader. In a media briefing, party member Paul Mangawana said Zimbabwe’s lawmakers will move to formally impeach Mugabe tomorrow, and that he could be formally removed from office as soon as Wednesday.

Discussions about the impeachment proceedings began Monday, Reuters added.

Reuters added that impeachment would represent an ignominious end to the career of the “Grand Old Man” of African politics, who was once lauded across the continent as an anti-colonial hero. Chief whip Lovemore Matuke told Reuters ZANU-PF members of parliament would meet at 1230 GMT to start mapping out Mugabe’s impeachment.

In the draft motion, the party accused Mugabe of being a “source of instability”, flouting the rule of law and presiding over an “unprecedented economic tailspin” in the last 15 years.

It also said he had abrogated his constitutional mandate by trying to position his unpopular wife, Grace, as his successor.

While the process of impeaching Mugabe looks complex on paper and involves a joint sitting of the Senate and National Assembly, then a nine-member committee of senators, then another joint sitting to confirm his dismissal with a two-thirds majority. However, constitutional experts said ZANU-PF had the numbers and could push it through in as little as 24 hours.

“They can fast-track it. It can be done in a matter of a day,” said John Makamure, executive director of the Southern African Parliamentary Support Trust, an NGO that works with the parliament in Harare.

A statement released Monday evening (local time) by Gen Chiwanga reaffirmed the military’s commitment to ensuring a peaceful transition of power.

 

A statement just released tonight by Gen. Chiwenga pic.twitter.com/UeVM9kh5U4

— Zim Media Review (@ZimMediaReview) November 20, 2017

 

One Zimbabwe lawmaker said there will be another caucus meeting for ZANU PF members beginning at 10 am local time Tuesday. It also noted that the President has called for a cabinet meeting. The MDCT, another party, will also be in caucus, while the president meets with his cabinet.

 

Tomorrow there will be another caucus meeting for ZANU PF at 10am, while at the same time the President has called for a cabinet meeting. The MDCT will be in caucus and I assure Zimbabwe that all MPs will put Zimbabwe First

— Hon. Temba P. Mliswa (@TembaMliswa) November 20, 2017

 

However, ZANU PF's chief whip said that if Mugabe calls a cabinet meeting, no ministers will attend.

 

President Robert Gabriel Mugabe & Vice President Grace Mugabe arrived at Robert Gabriel Mugabe International Airport, awaiting flight on Robert Gabriel Mugabe Airways after an afternoon capping graduands at Robert Gabriel Mugabe University situated along Robert Gabriel Mugabe Way

— Lance Guma (@LanceGuma) November 9, 2017

 

Despite the political upheaval – and the marches that occurred over the weekend – local media reported that people were going on with their lives, on their way to work, children were in class, vendors were on the streets and taxis were meandering through the streets of Harare.

However, while the demonstrations were peaceful, tanks were strategically positioned at Mugabe's office and other key government institutions, a clear indication that the standoff is far from over.
 

Author: Tyler Durden
Posted: November 21, 2017, 6:00 am

Having predicted back in July that the "most dangerous moment for markets will come in 3 or 4 months", i.e., now, BofA's Michael Hartnett was - in retrospect - wrong (unless of course the S&P plunges in the next few days). However, having stuck to his underlying logic - which was as sound then as it is now - Hartnett has not given up on his "bad cop" forecast (not to be mistaken with the S&P target to be unveiled shortly by BofA's equity team and which will probably be around 2,800), and in a note released overnight, the Chief Investment Strategist not only once again dares to time his market peak forecast, which he now thinks will take place in the first half of 2018, but goes so far as to predict that there will be a flash crash "a la 1987/1994/1998" in just a few months.

Contrasting his preview of 2018 with the almost concluded 2017, Hartnett sets the sour mood with his very first words, stating that he believes "2018 risk asset catalysts are much less bullish than in 2017" for the simple reason that the bearish positioning going into 2017 has been completely flipped: "positioning now long, not short; profit expectations high, not low; policy close to max stimulus; peak positioning, peak profits, peak policy stimulus means peak asset returns in 2018."  He also goes on to point out that the historical omens are poor:

  • Bull market in S&P500 would become the longest ever on August 22, 2018 (and the second biggest ever at 2863 on S&P500).
  • Equities have only outperformed bonds for seven consecutive years on three occasions in the past 220 years (the last time was 1928 - Chart 1).

Having read Hartnett for many years, we can sense an almost tangible undertone of anger and frustration at central banks for making his bearish forecasts for 2 years in a row go up in a puff of smoke. Which probably explains why one of BofA's best strategists has decided to double down, and raise the stakes beyond a simple market crash, and to a flash crash, if only for dramatic impact.

But before we get there, here is Hartnett's explanation why the market will peak in the first half of 2018:

The Big H1 Top

We forecast a H1 top in risk assets as the last vestiges of QE, the passage of US tax reform and robust early year EPS revisions incite full investor capitulation into risk assets. Potential targets are SPX 2863, CCMP 8000, with US government bond yields moving >2.75%.

 

We start 2018 with a pro-risk asset allocation of equities>bonds, EAFE>US, gold>oil, bullish US dollar.

 

We believe the air in risk assets is getting thinner and thinner, but the Big Top in price is still ahead of us. We will downgrade risk aggressively once we see excess positioning, profits and policy.

 

Peak positioning would be signaled by…

  • BofAML Bull & Bear Indicator exceeds “sell signal” of 8 (Chart 2);
  • Active mutual equity funds start to see inflows;
  • BofAML GWIM equity allocation exceeds 63%, an all-time high (currently 61%).

How to know if/when peak profits arrived?

US ISM dips below 55: needs to end 2018 >55 to beat consensus global EPS estimate of 10.5% (Chart 3); Inverted yield curve, which in seven out of seven occasions in the last 50 years has been the prelude to recession.

 

 

More to the point, how to know that peak central bank policy has arrived?

  • Q2 peak in G4 central bank liquidity of $15.3tn: net central bank buying of financial assets drops from $1.5tn in 2016 and $2.0tn in 2017 to nearly zero in 2018;
  • US tax reform passed, after which investors must discount tighter, not earlier economic policies.

Which brings us to Bank of America's "big long" trade: volatility, and the stark prediction that in just a few months, a 1987-type flash crash which will wipe out trillions in market cap, is imminent.

The Big Long: volatility

 

Second, we believe that peak positioning, profits, and policy in 2018 will engender peak asset price returns and trough volatility. In 2017, stock market volatility fell to 50-year lows, bond volatility fell to 30-year lows, ETFs accounted for 70% of daily average global equity volume, the AUM of quant hedge funds is now $432bn (up $271bn since 2009).

 

A flash crash (à la ’87/’94/’98) in H1 2018 seems quite likely, in our view, as the major sedative of volatility, the central banks, start to withdraw liquidity.

According to Hartnett, the right way to to trade the upcoming flash cash and the "Big Long is throguh a combination of  long 2yr/short 10yr Treasuries, long TIPS steepener vs flattener in OATei, long SPX put ratio calendar, long Russian equities.

As an added "bonus", in addition to a "big long", the BofA strategist also has a "big short" trade, which perhaps not surprisingly, is in credit.

The Big Short: credit

 

Third, we believe that higher inflation, higher corporate debt levels, higher bond volatility and the end of the QE era will be most damaging for corporate bonds.

 

The big 3 consensus assumptions are: Goldilocks, no Fear of Fed/ECB, and no Mean Reversion. The game-changer is wage inflation, which on our forecasts is likely to become more visible. Wage inflation would shatter consensus via higher credit spreads. 3½% US wage growth, 2½% US CPI, and 2% Eurozone CPI are all inflation levels likely to increase volatility and credit spreads.

For those looking to trade in advance of the bursting of the credit bubble, BofA's advice: go long CDX HY & iTraxx XOVER.

* * *

Finally, if that wasn't bad enough, in addition to the combined bursting of the short-vol and long credit bubbles, BofA has one final prophecy: "the biggest risk of all is that the structural “Deflationary D’s” (excess Debt, aging Demographics, tech Disruption) cause wage inflation to again surprise to the downside." Here's why:

The Big Risk: tech bubble

 

Finally, we believe the biggest risk of all is that the structural “Deflationary D’s” (excess Debt, aging Demographics, tech Disruption) cause wage inflation to again surprise to the downside. The era of excess liquidity, bond yields fall, and the Nasdaq goes exponential. 2018 calls for the big top, big volatility long, big credit short, all once again prove to be way too early. An “Icarus unleashed” bubble nonetheless could end in 2019 with a bear market on hostile Fed hiking, Occupy Silicon Valley and War on Inequality politics.

Translation: the Fed - having created the record wealth, income and class divide that resulted in Brexit, Trump and a wave of nationalism across Europe - is unable to stop, and unleashes civil, and perhaps world war as its final act.

How to hedge against "the biggest risk of all"? Hartnett has two words of advice: buy gold.

Author: Tyler Durden
Posted: November 21, 2017, 5:15 am

Authored by Federico Pieraccini via The Strategic Culture Foundation,

Through its top official, Prince Mohammad bin Salman (MBS), Saudi Arabia continues a wave of internal arrests, having seized nearly $800 billion in assets and bank accounts. A few days later, MBS attempted to demonstrate his authority by summoning Lebanese Prime Minister Saad Hariri to Saudi Arabia, where he was forced to resign on Saudi state TV. Trump tweeted support for Bin Salman's accusations against Iran and Hezbollah, and the future Saudi king even obtained Israel's secret support. Iran, meanwhile, denies any involvement in Lebanon's domestic affairs or involvement with the ballistic missile launched by Houthi rebels towards Riyadh’s King Khalid International Airport a few days ago. Meanwhile, Trump, Putin and Xi met recently and seem to have decided the fate of the region in an exercise of realism and pragmatism.

News that upends the course of events has now become commonplace over the last few months. However, even by Middle East standards, this story is something new. The affair surrounding Lebanon’s Prime Minister Hariri generated quite a bit of commotion. Hariri had apparently been obliged to announce his resignation on Saudi Arabia's Al Arabiya news channel while being detained in Riyadh. His most recent interview seemed to betray some nervousness and fatigue, as one would expect from a person under enormous stress from forced imprisonment. In his televised resignation statement, Hariri specified that he was unable to return to Lebanon due to some sort of a threat to his person and his family by operatives in Lebanon of Iran and Hezbollah. The Lebanese security authorities, however, have stated that they are not aware of any danger faced by Hariri.

In an endless attempt to regain influence in the Middle East, Saudi Arabia has once again brought about results directly opposite to those intended. Immediately after receiving confirmation that the resignation had taken place in Saudi Arabia, the entire Lebanese political class demanded that Hariri return home to clarify his position, meet with the president and submit his resignation in person. Saudi actions have served to consolidate a united front of opposition factions and paved the way for the collapse of Saudi influence in the country, leaving a vacuum to be conveniently filled by Iran. Once again, as with Yemen and in Syria, the intentions of the Saudis have dramatically backfired.

This Saudi interference in the domestic affairs of a sovereign country has stirred up unpredictable scenarios in the Middle East, just at the time that tensions were cooling in Syria.

Hariri's detention comes from far away and is inextricably linked to what has been happening over the past few months in Saudi Arabia. Mohammed bin Salman, son of King Salman, began his internal purge of the Kingdom’s elite by removing from the line of succession Bin Nayef, a great friend of the US intelligence establishment (Brennan and Clapper). Bin Nayef was a firm partner of the US deep state. Saudi Arabia has for years worked for the CIA, advancing US strategic goals in the region and beyond. Thanks to the cooperation between Bandar bin Sultan Al Saud, Bin Nayef, and US intelligence agencies, Washington has for years given the impression of fighting against Islamist terrorist while actually weaponizing jihadism since the 1980s by deploying it against rival countries like the Soviet Union in Afghanistan, the Iraqi government in 2014, the Syrian state in 2012, and Libya’s Gaddafi in 2011.

MBS has even detained numerous family-related princes, continuing to consolidate power around himself. Even Alwaleed bin Talal, one of the richest men in the world, ended up caught in MBS’s net, rightly accused of being one of the most corrupt people in the Kingdom. It is speculated that family members and billionaires are detained at the Ritz Carlton in Riyadh, with guests and tourists promptly ejected days before the arrests began. Mohammed bin Salman’s actions are not slowing down, even after seizing $800 billion in accounts, properties and assets.

MBS is intensifying his efforts to end the conflict in Yemen, which is a drain on Saudi finances, lifting the naval blockade of the Port of Aden. Not only that, the two main Syrian opposition leaders, Ahmad Jarba and Riyadh Hijab, have been arrested by Riyadh in an effort to demonstrate to Putin the good will of MBS in seeking to resolve the Syrian conflict. Not surprisingly, King Salman, in a frantic search for a solution to the two conflicts that have lashed his reputation as well as the wealth and alliances of the Saudi kingdom, flew to Moscow to seek mediation with Putin, the new master of the Middle East.

MBS has undertaken an anti-corruption campaign for international as well as domestic purposes. At the national level, the collapse of oil prices, coupled with huge military spending, forced the royal family to seek alternatives for the future of the Kingdom in terms of sustainability, earnings and profits. MBS’s Vision 2030 aims to diversify revenue in order to free Saudi Arabia from its dependence on oil. This is a huge ask for a nation that has been thriving for seventy years from an abundance of resources simply found under its ground. This delicate balance of power between the royal family and its subjects is maintained by the subsidies granted to the local population that has allowed the Kingdom to flourish in relative peace, even during the most delicate periods of the Arab Spring in 2011. There is an underlying understanding in Saudi Arabia that so long as the welfare of the population is guaranteed, there should be no threat to the stability of the royal family. It is no wonder that after losing two wars, and with oil prices at their lowest, MBS has started to worry about his future, seeking to purge the elites opposed to him.

The Kingdom’s reality is quickly changing under MBS, the next Saudi king, who is trying to anticipate harder times by consolidating power around himself and correcting his errors brought on by incompetence and his excessive confidence in the Saudi military as well as in American backing. The ballistic missile that hit Riyadh was launched by the Houthis in Yemen after 30 months of indiscriminate bombing by the Saudi air force. This act has shown how vulnerable the Kingdom is to external attack, even at the hand of the poorest Arab country in the world.

In this context, Donald Trump seems to be capitalizing on Saudi weakness, fear, and the need to tighten the anti-Iranian alliance. What the American president wants in return for support of MBS is as simple as it comes: huge investments in the US economy together with the purchase of US arms. MBS obliged a few months ago, investing into the US economy to the tune of more than $380 billion over ten years. Trump's goal is to create new jobs at home, increase GDP, and boost the economy, crucial elements for his re-election in 2020. Rich allies like Saudi Arabia, finding themselves in a tight fix, are a perfect means of achieving this end.

Another important aspect of MBS’s strategy involves the listing of Aramco on the NYSE together with the switch to selling oil for yuan payments. Both decisions are fundamental to the United States and China, and both bring with them a lot of friction. MBS is at this moment weak and needs all the allies and support he can get. For this reason, a decision on Aramco or the petroyuan would probably create big problems with Beijing and Washington respectively. The reason why MBS is willing to sell a small stock of Aramco relates to his efforts to gin up some money. For this reason, thanks to the raids on the accounts and assets of the people arrested by MBS, Saudi Arabia has raised over $800 billion, certainly a higher figure than any sale of Aramco shares would have brought.

This move allows MBS to postpone a decision on listing Aramco on the NYSE as well as on whether to start accepting yuan for payment of oil. Holding back on the petroyuan and Aramco’s initial public offering is a way of holding off both Beijing and Washington but without at the same time favouring one over the other. Economically, Riyadh cannot choose between selling oil for dollars on the one hand and accepting payment in another currency on the other. It is a nightmare scenario; but some day down the road, the Saudi royals will have to make a choice.

The third party to this situation is Israel in the figure of Netanyahu, Donald Trump's great friend and supporter right from the beginning of his electoral campaign. Trump's victory brought positive returns to the investment the Israeli leader had made in him. Ever since Trump won the election, the US has employed harsh words against Iran, turning away from the positive approach adopted by Obama that managed to achieve the Iran nuclear deal framework. Nevertheless, the Israeli prime minister has had to deal with numerous problems at home, with a narrow parliamentary majority and several members of his government under investigation for corruption.

Donald Trump pursued a very aggressive policy against Tehran during the election campaign, then went on to annul the Iran nuclear deal a few weeks ago. The decision is now for Congress to certify, with a difficult mediation between European allies (other than China and Russia), who are opposed to ending the deal, and the Israelis, who can count on the support of many senators thanks to their lobbying efforts. Israel, for its part, sees in Saudi Arabia and MBS the missing link between Saudi Wahhabism and Israeli Zionism. Various private cablegrams leaked to the press have shown how Israeli diplomats around the world were instructed to support Saudi  accusations of Iran interfering in Lebanon's internal affairs.

The interests of MBS and Netanyahu seem to dovetail quite nicely in Syria and Yemen as well as with regard to Iran and Hezbollah. The two countries have a common destiny by virtue of the fact that neither alone can deal decisively with Hezbollah in Syria or Lebanon, let alone Iran. Rouhani himself has said that Iran fears American strength and power alone, knowing that Saudi Arabia and Israel are incapable of defeating Tehran.

Trump's approval of the arrests carried out by MBS is based on a number of factors. The first involves the investments in the economy that will be coming America’s way. The other, certainly less known, concerns the subterranean battle that has been occurring between the Western elites for months. Many of Clinton’s top money sources are billionaires arrested by MBS, with stock options in various major banks, insurance companies, publishing groups, and American television groups, all openly anti-Trump. In this sense, the continuation of Trump's fight with a portion of the elite can be seen with the halting of the merger of AT&T and Time Warner involving CNN.

Trump seems to be accompanying Saudi and Israeli urgings for war with multiple intentions, potentially having a plan for a broader, regional and global agreement between the parties.

At a regional level, Trump first supported the Saudi crusade against Qatar, resolved with Riyadh not getting Qatar to accede to any of its advanced demands. During the crisis, Doha approached Tehran and Moscow, who immediately took advantage of the situation to establish trade relations and commence negotiations with Qatar to tame its terrorist influence in the region, especially in the Syrian conflict. Turkey and Qatar have practically announced a military alliance, cementing a new front that includes China, Russia, Iran, Turkey, Syria, Lebanon, Iraq, and Qatar, now potentially all on the same side of the barricades, opposed to Saudi dictates and Israel’s efforts to foment war with Iran.

With the US withdrawal from the region, as is increasingly evident from Trump's reluctance to embark on a Middle East conflict, Israel and Saudi Arabia are increasing their desperate cries against Iran, observing how the gains of the resistance axis have led Tehran to dominate the region with its allies. The visit of King Salman to Russia, and the four meetings between Putin and Netanyahu, give the idea of which capital is in charge in the region. This all represents an epochal change that further isolates Riyadh and Tel Aviv, two countries that represent the heart of chaos and terror.

The Saudi attempt to isolate Qatar has failed miserably, and the continuous effort to paint Iran as the main cause of tension in the region seems to have reached a point of no return, with the latest stunt involving Hariri. Sunnis, Christians and Shiites agree on one point only: that the premier must return home. Riyadh hopes to light the fuse of a new civil war in the region, with Israel hoping to take advantage of the chaos brought about by an attack on Hezbollah. This is not going to happen, and the disappointment of the House of Saud and the Israeli prime minister will not change anything. Without a green light from Washington and a promise from Uncle Sam to intervene alongside his Middle East allies, the Israelis and Saudis are aware that they have neither the means nor strength to attack Iran or Hezbollah.

Trump is playing a dangerous game; but there seems to be some degree of coordination with the other giants on the international scene. The main point is it is impossible for Washington to be an active part in any conflict in the region, or to change the course of events in a meaningful way. The "End of history" ended years ago. US influence is on the decline, and Xi Jinping and Putin have shown great interest in the future of the region. In recent months, the Russian and Iranian militaries, together with the Chinese economic grip on the region, have shown a collective intention to replace years of war, death and chaos with peace, prosperity and wealth.

MBS and Netanyahu are having a hard time dealing with this new environment that will inevitably proclaim Iran the hegemon in the region. Time is running out for Israel and Saudi Arabia, and both countries are faced with enormous internal problems while being unable to change the course of events in the region without the full intervention of their American ally, something practically impossible nowadays.

The new course of the multipolar world, together with Trump’s America First policy, seems to have hit hardest those countries that placed all their bets on the continuing economic and military dominance of the United States in the region. Other countries like Qatar, Lebanon and Turkey have started to understand the historical change that is going on, and have slowly been making the switch, realizing in the process the benefits of a multipolar world order, which is more conducive to mutually beneficial cooperation between countries. The more Saudi Arabia and Israel push for war against Iran, the more they will isolate themselves. This will serve to push their own existence to the brink of extinction.

Author: Tyler Durden
Posted: November 21, 2017, 4:50 am

The gold versus Bitcoin debate is complex, nuanced and still in its embryonic stages when put into the perspective of gold’s known 2,700-year use as money versus Bitcoin’s very modest eight-year track record.

From a pure investment perspective, as the following Bloomberg chart shows, Bitcoin has obviously “wiped the floor” with its esteemed rival and, no doubt, has absorbed a considerable volume of funds that otherwise might have found their way into gold investments.

One subset of gold investors, which is both over-stated and over-ridiculed in the mainstream media, is the “preppers”, or those preparing for a catastrophic disaster to occur in the future by stockpiling food, ammunition and “durable” methods of storing their wealth, etc. We clarify the term "preppers" because it is not common parlance in many European countries. While some allocation in gold was basically “de rigeur” some years ago, the prepping community is increasingly turning to Bitcoin, as Bloomberg reports.

Wendy McElroy is ready for most doomsday scenarios: a one-year supply of nonperishable food is stacked in a cellar at her farm in rural Ontario. Her blueprint for survival also depends upon working internet: part of her money, assuming she needs some after civilization collapses, is in bitcoin. Across the North American countryside, preppers like McElroy are storing more and more of their wealth in invisible wallets in cyberspace instead of stockpiling gold bars and coins in their bunkers and basement safes. They won’t be able to access their virtual cash the moment a catastrophe knocks out the power grid or the web, but that hasn’t dissuaded them. Even staunch survivalists are convinced bitcoin will endure economic collapse, global pandemic, climate change catastrophes and nuclear war.

 

“I consider bitcoin to be a currency on the same level as gold,” McElroy, who lives on the farm with her husband, said by email. “It allows individuals to become self-bankers. When I fully understood the concepts and their significance, bitcoin became a fascination.”

Wendy McElroy's profile, for what it’s worth, is not exactly that of a “whacko” prepper. A former journalist with FOX News, McElroy might be described as an “anarcho-capitalist”. She has authored a dozen books and numerous articles on subjects such as voluntarism (all forms of human association should be voluntary), feminism, how pornography can benefit women, capitalism and defending Wikileaks. In an article “Would Bitcoin ‘Function’ in a Societal Collapse?” on bitcoin.com, McElroy cited the growth in Bitcoin adoption in the midst of the collapse of Venezuela’s economy and its currency.

Bloomberg continues by noting the seeming contradiction for preppers, like McElroy, since a collapse in the grid would take the internet down. However, it’s the ability of Bitcoin to operate beyond the control of central bankers (so far) which is a key attraction.

At first glance, it seems counter-intuitive that some of bitcoin’s most ardent proponents are people motivated by the belief that public infrastructure will collapse in times of social and political distress. Bitcoin isn’t yet widely accepted as a method of payment and steep transaction costs make it inconvenient to use at vendors that do take it. Preppers, as it happens, have a different perspective on what they see as the money of the future, which has surged 10-fold in the past 12 months as supporters lauded it as a digital alternative to rival the dollar, euro or yen. Used to send and receive payments online, bitcoin is similar to payment networks like PayPal or Mastercard, the difference being that it runs on a decentralized network—blockchain—that’s beyond the control of central banks and regulators. It was born out of an anti-establishment vision of a government-free society, a key attraction for those seeking unhindered access to their capital in case a massive shock shuts down the banking system.

Even if the grid went down temporarily, preppers are attracted by the blockchain’s record of Bitcoin holdings and transaction.

"Not too long ago, people in the prepper community were actively warning against crypto, and now they’re all investing in it,” said Tom Martin, a truck driver from Washington who runs a social-media website for people interested in learning skills to survive disaster.

 

“As long as the grid stays up, people will keep using bitcoin.”

 

In addition to gold, silver and stocks, Martin invests in bitcoin and peers litecoin and steem because they’re easier to travel with, harder to steal and offer better protection in the event of the kind of societal breakdown that would unfold if a fiat currency like the dollar collapsed. He’s among those confident that bitcoin can withstand even a complete blackout through the strength of the underlying blockchain, the anonymous public bookkeeping technology that records every single bitcoin transaction.

In the bitcoin.com article, Wendy McElroy noted the increasing dependence on blockchain and the internet, the revival of which would be a priority after a disaster.

Yes. Electricity and the internet may be less reliable or more expensive but they would be available. An increasing dependence on the blockchain would make it a top economic priority. It would also be a top military priority. In October 2016, the Pentagon revealed it was actively exploring blockchain technology “to create tamper-proof military computer systems, including those used to control America’s nuclear weapons.” Other nations are undoubtedly doing the same.

Bloomberg acknowledges this view.

Preppers, though, stock enough food and supplies to sustain them for months, if not years, and they expect whatever governing structure emerges post-calamity will prioritize getting the web back up and running.

 

“It may be difficult, if not impossible to access for a while, but once things start returning to some level of normality, then the blockchain will return as it was before the disaster,” said Rob Harvey, a bitcoin investor who prepares for natural and nuclear catastrophes by learning and teaching survival skills, like making a fire. “The blockchain does not need a specific place or a specific person to survive—that’s a strong survival tactic”.

Bloomberg notes how Bitcoin has increasingly become a topic of debate on prepper forums, where participants were previously gold devotees.

Discussions on the pros and cons of investing in crypto have popped up on survivalist forums like mysurvivalforum.com and survivalistboards.com this year as bitcoin rallied above $7,000. “Buy bitcoin” is now a more popular search phrase than “buy gold” on Google.

 

The buzz is starting to impinge on gold’s role as a store of value especially since, like the precious metal, there’s a finite supply of bitcoin, which proponents say gives it anti-inflationary qualities. Sales of gold coins from the U.S. Mint slid to a decade low in the first three quarters months of 2017.

 

“It’s definitely had some impact on the market,” Philip Newman, who does research on precious-metal coin sales and is one of the founders of research firm Metals Focus, said by phone from Washington. “People see bitcoin prices going to the moon. No one thinks gold is going to the moon.”

While gold’s lack of “portability” is considered a negative.

Along the fringe, the 20,000 libertarians expected to converge on New Hampshire as part of the Free State Project are also switching from precious metals. They like bitcoin because it isn’t created by a government, unlike conventional currency.

 

“You can use bitcoin for economic transactions in a way that gold was never designed to do because it’s a physical thing—it’s heavy,” Matt Philips, the project’s president, said by phone. “A lot of people don’t know what the heck to do with gold if you give it to them in exchange for a cup of coffee.”

Wendy McElroy’s support for Bitcoin is drawn straight from the philosophy of Ayn Rand in Atlas Shrugged.

Whatever doom-and-gloom scenario unfolds, McElroy, from Canada, has faith in bitcoin. She’s writing a book called Satoshi Revolution, inspired by the pseudonym of the person or people who created bitcoin in 2009 as an answer to the financial turmoil wrought by the global financial crisis. She says the digital currency breaks society’s dependence on a state that uses its monopoly over the issuance of money to dominate the economy, making it a natural hedge against disaster. “It is a people’s currency,” she writes in the book’s introduction. “Bitcoins move seamlessly through a world without states or borders, obeying only the command of individuals who choose to deal with each other. Immune to currency manipulation and inflation, they do not serve the powerful elites at the expense of average people.”

When it boils down to it, the rationale and investment cases for gold and Bitcoin are similar enough that common sense suggests that the prepper community would, to some extent, adopt both.

With Bitcoin’s performance smashing gold to bits (intended), it’s hardly surprising that preppers are shifting their allegiance towards the digital currency. They are just “following the money”. As with all these things, however, we suspect that a point will come when too many people will be standing on the same side of the boat and there will be a sharp reversal in relative performance. The all-important question is whether that’s when Bitcoin is 10,000, 13,000 or 50,000?

Author: Tyler Durden
Posted: November 21, 2017, 4:30 am

A trio of labor economists suggest that effort at work is correlated with race...

As The Economist writes, given the long history of making racial slurs about the efforts of some workers, any study casting black and Hispanic men as lazier than whites and Asians is sure to court controversy.

But, a provocative working paper by economists Daniel Hamermesh, Katie Genadek and Michael Burda sticks a tentative toe into these murky waters.

They suggest that America’s well-documented racial wage gap is overstated by 10% because minorities, especially men, spend larger portions of their workdays not actually working.

Uncomfortable though the topic may be, the authors have attempted a rigorous analysis.

The study’s method is straightforward. The data come from nearly 36,000 “daily diaries”, self-reporting on how Americans spent their working hours, collected from 2003 to 2012.

 

Relying on the assumption that workers are equally honest in admitting sloth, the authors calculate the fraction of time spent not working while on the job - spent relaxing or eating, say - and find that it varies by race to a small but statistically significant degree.

 

The gap remains, albeit in weaker form, even with the addition of extensive controls for geography, industry and union status, among others. Non-white male workers spend an additional 1.1% of the day not working while on the job, or an extra five minutes per day.

 

Assuming their controls are adequate, that would still leave 90% of the wage difference between white workers and ethnic minorities, which was recently estimated to be 14%, unexplained.

After rejecting a number of plausible explanations for why this might be, the authors finally attribute the discrepancy to unexplained “cultural differences”.

Acutely aware of the sensitivity of these findings, the professors delayed publication until after the presidential election, releasing their report in January.

“I knew full well that Trump and his minions would use it as a propaganda piece,” says Mr Hamermesh, a colourful and respected labour economist. The paper may yet be seized on by those who are keen to root out “political correctness” and are perennially unhappy with current anti-discrimination laws.

When asked what motivated the study of such a sensitive topic, QZ's Allison Schrager notes that Hamermesh, typical of economists driven by pure intellectual curiosity, said it hadn’t occurred to him that it might be so controversial.

But, denunciations came quickly, however. Within hours of publication, Mr Hamermesh received vitriolic messages and was labelled a racist in an online forum popular among economists. Mr Hamermesh, an avowed progressive, who refers to Donald Trump only by amusing nicknames and resigned from a post at the University of Texas over a state law permitting the open carrying of firearms, finds this unfair.

He notes that Americans work too much. His preferred solution would not be for some groups to work more, but for others to work less.

Author: Tyler Durden
Posted: November 21, 2017, 4:10 am

NFA News Releases

September 14, Chicago—NFA has ordered Chicago, Ill., introducing broker Kingsview Futures LLC to pay a $50,000 fine.
Posted: September 15, 2017, 4:59 am

Elite Forex Blog - Market Research & Analysis

(GLOBALINTELHUB.COM) — 11/10/2017 We’d just like to note here that amidst Bitcoin’s historic rise there’s been a flurry of announcements with few ‘releases’ of finished products.  In fact only one company in the US, TZero, has a real regulated product that’s ready to go (which we noted as early as March 2016, but who was listening back then?).  Only one major Forex Broker, IC Markets, is offering 5 Crypto pairs in the MT4/5 platform.
Let’s take a look at what Bitcoin in Meta Trader 5 looks like:
forex
Amazing, when you put it like that, it looks like FX!  That’s because Bitcoin and Ethereum are Currencies, no different from the Euro and Yen from a trading / investment perspective.  Obviously, there are the fundamental differences that Crypto is not backed by a Government, but that can change soon.  Traders can sign up free to see this screen above by clicking here: Open an account with IC Markets
So we all know someone who bought Bitcoin in 2011 or several years ago – so what?  Today BTCUSD is down.  So what?  Like is the fashion with many bubbles, it seems that traders have become irrational.  The big question that we have at Elite E Services is that – why jump into something completely risky and unknown when there are proven systems with a long track record that are independent of market movement, like Magic FX.  The point is that it will take time for such algos to be developed for Bitcoin, the market is just starting to mature and evolve.
We did something, we didn’t just announce that we have plans to get into Bitcoin – we wrote a book.  A sequel to our Splitting Pennies it’s logically called Splitting Bits – your user guide for the regulated side of Bitcoin and Blockchain which are posed to cannibalize half of the world’s banking industry.
Calling all traders – this is a traders market!  Now is the time to start building your bots!  The real wave of the Crypto market is going to be the investment grade products, such as the Bitgos (Bit-Algos).  We’re launching a marketplace for them, stay tuned..
Posted: November 13, 2017, 4:49 pm
Elite E Services has teamed up with IC Markets to provide non-US and US-QEP Forex clients with the ability to trade BTC/USD in MT4.  For those of you who are not familiar with Bitcoin or MT4 you can read our books Splitting Pennies and the sequel Splitting Bits.

Open an account with IC Markets
Posted: November 6, 2017, 7:25 pm
Last week, WSJ stoked fears that the Feds might be ramping up another probe into abuse and manipulation in the foreign exchange market when it reported that Wells Fargo had abruptly terminated four bankers from its FX business and transferred another. Now, Wall Street’s paper of record is reporting that Federal prosecutors are investigating Wells for abuses in its FX shop - but the scope of the investigated is limited to one disputed trade.
According to WSJ, prosecutors have subpoenaed information from Wells and from the recently fired bankers as they investigate a trade and ensuing dispute between Wells and one of its clients, Restaurant Brands International Inc.
RBI owns several fast-food franchises, including Burger King, Tim Hortons and Popeyes Louisiana Kitchen. In an amusing twist, both companies count Warren Buffett’s Berkshire Hathaway as one of their largest shareholders.
In a statement, Wells Fargo said it “learned of an issue associated with a foreign exchange transaction for a single client. The matter was reviewed, the client was promptly notified regarding the issue, and Wells Fargo leadership took steps to hold accountable the individuals who were involved. Wells Fargo remains committed to our foreign exchange business, meeting our clients’ financial needs in an ethical way, and ensuring ongoing review of this and all business operations.”
The foreign-exchange issue revolves around a trade made within the past three years that included positions running into the billions of dollars, the people said. The trade resulted in a loss to Restaurant Brands, the people added, which led to a dispute between it and the bank. WSJ pointed out that the investigation into Wells Fargo’s foreign-exchange business, which is housed within its investment bank, are separate from sales-practices issues that rocked the bank more than a year ago. Wells Fargo is planning to refund Restaurant Brands hundreds of thousands of dollars related to the trading loss, WSJ's sources said.  The Federal Reserve is also looking into the issue. Specifically, Federal prosecutors are looking into the sequencing of the trade in question and whether it could have involved so-called front-running, some of the people familiar with the matter said. That should send a chill down the spine of the fired bankers, as earlier this week a US jury found a former HSBC currency trader guilty of fraud related to front-running a large trade that netted the bank some $8 million in profits. The US is also in the process of extraditing another UK-based FX trader to face front-running related charges in the US.
Last year, a wide-ranging investigation into abuse and front-running in the global foreign-exchange market led to a rash of settlements worth billions of dollars involving Barclays and a handful of other global banks. 
While probes like this are never convenient, the investigation comes at a particularly trying time for the bank and its management. Earlier this month, WFC CEO Tim Sloan received a widely publicized tounge lashing from Massachusetts Senator Elizabeth Warren during Congressional testimony (Sloan became the second straight Wells CEO whom Warren said should resign during a public hearing). He has also participated in a handful of media interviews lately as he tries to burnish the bank's once-wholesome reputation and bolster its lagging share price, which has never quite recovered from last year's cross-selling scandal.
However, as WSJ explains, front-running is often difficult to gauge given the ambiguity around pre-hedging strategies in currency trading. Typically a bank must purchase currency as part of a trade and price it differently than it would price a stock. Wells Fargo’s investment-banking, securities and markets division, known as Wells Fargo Securities, is a fraction of the size of its U.S. big-bank peers, as is its foreign-exchange business. The bank doesn’t break out financial results or metrics for that group or its foreign-exchange business.
And while the investigation is the latest embarassment for the bank, which over the summer disclosed that it had overcharged mortgage and auto-loan borrowers, there is, at least, one mitigating factor: Unlike the retail banking scandal, which stoked widespread public outrage, few Americans understand how the foreign-exchange market works - indeed, many don't even realize that such a market exists. This means that even in the worst-case scenario, Wells's brand should remain untarnished from this latest scandal.
The US Attorney’s Office for the Northern District of California is leading the investigation.
Posted: October 27, 2017, 8:15 pm
It's not shaping up to be a great week for a group of former HSBC FX traders who decided to front-run a massive $3.5 billion currency trade placed by one of their clients and net their bank some $8 million in illicit profits in the process.  Earlier this week, Ex-HSBC currency trader Mark Johnson, who was unwittingly captured on an audio recording saying "I think we got away with it," was convicted by a jury in New York of fraud. 
Now we learn that Johnson's partner in crime (allegedly, of course), Stuart Scott, has lost his court battle in the U.K. and will be extradited to the U.S. to face charges.
Not surprisingly, Scott expressed some "disappointment" with the ruling shortly after being dismissed from court.
*SCOTT SAYS HE IS DISAPPOINTED BY EXTRADITION RULING
*SCOTT SAYS U.S. CASE IS FLAWED, INACCURATE
Scott
As we've noted previously, Mark Johnson was arrested at New York’s Kennedy Airport in 2016 before he could return to the U.K. but Stuart Scott has remained free at his home in the London suburbs...until now.  Per Bloomberg:
Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was taken into custody at John F. Kennedy International Airport Tuesday and is scheduled to appear before a judge in federal court in Brooklyn Wednesday morning, said the people, who asked not to be named because the case hasn’t been made public. He’s charged with conspiracy to commit wire fraud, the people said.

According to Bloomberg, Johnson’s arrest comes more than a year after five global banks pleaded guilty to charges related to the rigging of currency benchmarks. HSBC, which wasn’t part of those criminal cases, in November 2014 agreed to pay $618 million in penalties to U.S. and British regulators to resolve currency manipulation allegations. HSBC, which still faces investigations by the Justice Department and other authorities for the conduct, has set aside $1.3 billion for possible settlements, according to an August filing.

Rob Sherman, an HSBC spokesman, and Peter Carr, a Justice Department spokesman, declined to comment.
A few weeks ago, details of court filings began to leak from Scott's British extradition case which allowed us to learn exactly how much each HSBC trader made for his trading book in the illicit scheme that netted a total of $8 million in profits...Scott took second place with a total profit of $585,105.  Per Bloomberg:
"The defendant personally obtained over $500,000 profit," the U.S. Justice Department, represented by British lawyer Mark Summers, said in written arguments prepared for the hearing. "The offenses of which he is accused are highly serious. They involve a systematic and organized conspiracy to defraud, committed in breach of trust."

Scott was charged, along with his ex-boss Mark Johnson, by the Justice Department in July 2016 with using insider knowledge to front-run a $3.5 billion currency deal by Cairn Energy Plc that made the bank $8 million. Johnson is on trial in New York and a jury there could begin deliberations this week.
Here's how everyone else made out per the DOJ:
Trading Gains
For those who haven't followed the story closely, according to the original DOJ complaint, HSBC was selected by Cairn Energy Plc to execute a foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011.  But, before executing that trade, he tipped off a bunch of HSBC traders who loaded up their proprietary accounts with Pounds just before the massive trade sent the currency higher.
“As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars,” stated United States Attorney Capers.  “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades.  The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”

“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell.  “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”
Of course, we're sure this is all just an effort to "criminalize behavior that is normal"...at least on Wall Street. 
Posted: October 26, 2017, 6:26 pm
Ex-HSBC currency trader Mark Johnson, who was unwittingly captured on an audio recording saying "I think we got away with it," has just been convicted by a jury in New York of fraud for front-running a $3.5 billion transaction that netted his firm some $8 million in illicit profits.  Per Bloomberg:
Former HSBC Holdings Plc currency trader Mark Johnson was found guilty of fraud for front-running a $3.5 billion client order, a victory for U.S. prosecutors as they seek to root out misconduct in global financial markets.

He was convicted on Monday after a month-long trial in Brooklyn, New York.

Johnson was the first person to be tried since the global currency-rigging scandal that resulted in global banks paying more the $10 billion in penalties. The charges stemmed from HSBC’s execution of a trading order from Cairn Energy Plc in 2011 to convert the proceeds of a unit sale from dollars into pounds.

"This sends a signal to traders and banks that this type of behavior is absolutely inappropriate and will be pursued by the government," Michael Weinstein, a former Justice Department trial attorney, said. "That’s a big hammer over the banks -- it may force them to monitor and self-regulate their people."
Johnson
For those who haven't followed this particular story, Mark Johnson was arrested at New York’s Kennedy Airport in 2016 before he could return to the U.K. following a nearly 3-year investigation into efforts on the part of several large investment banks to rig FX markets but Stuart Scott has remained free at his home in the London suburbs pending the outcome of the extradition proceedings.  Per Bloomberg:
Mark Johnson, HSBC’s global head of foreign exchange cash trading in London, was taken into custody at John F. Kennedy International Airport Tuesday and is scheduled to appear before a judge in federal court in Brooklyn Wednesday morning, said the people, who asked not to be named because the case hasn’t been made public. He’s charged with conspiracy to commit wire fraud, the people said.

According to Bloomberg, Johnson’s arrest comes more than a year after five global banks pleaded guilty to charges related to the rigging of currency benchmarks. HSBC, which wasn’t part of those criminal cases, in November 2014 agreed to pay $618 million in penalties to U.S. and British regulators to resolve currency manipulation allegations. HSBC, which still faces investigations by the Justice Department and other authorities for the conduct, has set aside $1.3 billion for possible settlements, according to an August filing.

Rob Sherman, an HSBC spokesman, and Peter Carr, a Justice Department spokesman, declined to comment.
According to the original DOJ complaint, HSBC was selected by Cairn Energy Plc to execute a foreign exchange transaction – which was going to require converting approximately $3.5 billion in sales proceeds into British Pound Sterling – in October 2011.  But, before executing that trade, he tipped off a bunch of HSBC traders who loaded up their proprietary accounts with Pounds just before the massive trade sent the currency higher.
“As alleged, the defendants placed personal and company profits ahead of their duties of trust and confidentiality owed to their client, and in doing so, defrauded their client of millions of dollars,” stated United States Attorney Capers.  “When questioned by their client about the higher price paid for their significant transaction, the defendants wove a web of lies designed to conceal the truth and divert attention away from their fraudulent trades.  The charges and arrest announced today reflect our steadfast commitment to hold accountable corporate executives and licensed professionals who use their positions to fraudulently enrich themselves.”

“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said Assistant Attorney General Caldwell.  “This case demonstrates the Criminal Division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”
As we've noted over the past couple of weeks, tidbits of the prosecution's case has made it's way into the media recently, including reports last week that Johnson used the code phrase "my watch is off" to trigger trading by HSBC traders all around the globe.  Meanwhile, as Law360 recently pointed out, jurors also had the opportunity to hear some rather damning recordings of Johnson's phone conversations with traders, including the one below in which he says "I think we got away with it."
Prosecutors played a recording of a call between Johnson and Stuart after the 3 p.m. fix as they debrief, with Johnson telling Stuart, “I think we got away with it,” but Stuart replies that HSBC executive Dipak Khot — who acted as the go between with Cairn and HSBC — thinks otherwise and suspects that Cairn will protest.

Johnson in turn argued that Cairn is still in a better position than it would have been if it had taken any other offers to execute the deal in alternate methods as opposed to the fix. “They don’t really have a lot of room to complain,” he said on the call.

But as Cahill was trading ahead of the 3 p.m. fix on the day of the transaction, Johnson sounded more concerned about “ramping it up” too much. Jurors heard another recording of a call between Johnson and Scott, with Scott talking to Cahill in the background as he trades, in which Johnson cautions against spiking the price of sterling too high out of concern that Cairn will "squeal."

“Frank, Frank if it rates above 30 at the fix, I think they’ll start to ah ... if you need to buy them, obviously, but ideally don’t ramp it above 30,” Scott tells Cahill. “Do what you need to do, but ... sorry I know I’m probably not helping much...I’ll leave you alone.”

“Is he getting a bit tetchy?” Johnson asks.

“No, he’s not,” Scott replies.

“He can’t, fucking moaning bastard,” Johnson said. “I do all the work and he gets all the glory.”

Jurors heard that days later in a call with HSBC forex trader Ed Carmichael in Hong Kong, Johnson told him that HSBC’s London forex trading desk, “just had a bonanza” on the Cairn deal, and described his response when Cairn sought an explanation on the less than stellar result for the oil and gas developer.
Of course, when HSBC's client complained about their less than stellar execution price, Johnson admits that he blamed all the usual suspects: "Russians, other central banks, all that sort of stuff."
“And they said, well you know it jumped up a bit, who else was buying? And we said the usual Russian names, other central banks, all that sort of stuff,” Johnson said on the call.
As we noted last week, nearly a dozen HSBC traders around the globe netted over $8 million in profits by allegedly front-running their own client.
Trading Gains
Of course, while the DOJ will undoubtedly celebrate their conviction in the media, there is little doubt that Mark Johnson's "pre-hedging" scandal is hardly unique for an industry that has been built on front-running clients.

Posted: October 23, 2017, 5:10 pm
(Elite E Services) 10/17/2017 — Dover, DE — It’s no secret that the US economy has diverged into a massive 2 world system where there is also a massive gap in between; the employed and the wealthy have increasingly good lives while the poor and unemployed have a deteriorating quality of life.  As we have explained in Splitting Pennies, it is monetary policy that ‘Trumps’ all else.  Using The Gini Coefficient we can visualize what this means:
In economics, the Gini coefficient (sometimes expressed as a Gini ratio or a normalized Gini index) (/d?ini/ jee-nee) is a measure of statistical dispersion intended to represent the income or wealth distribution of a nation’s residents, and is the most commonly used measure of inequality. It was developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper Variability and Mutability (ItalianVariabilità e mutabilità).
Taking a look at basic 2013 data (it’s worse since then) we get a picture of reality vs. what is said in the media.  Using Russia as a good example to stay with the Trump theme, USA (41) has roughly the same Gini as Russia (40.9):
forex
Remember that Russia is the unfair system that is a top-down Byzantine oligarchy, right?  Then why Russia and USA share almost identical Gini, being surpassed only by the Banana Republics in South America?
Everyone in finance knows there are several things that Trump can do to fix the economic problems of USA in about 5 minutes:
  • Surprise increase interest rates to 5% or 10%
  • Import tariffs on Chinese crap
  • Unwind USA’s Petro Dollar system (drink it!)
  • Repeal the Dodd-Frank Consumer Rip-Off Fraud Act that has caused billions to flow out of USA.  Make America the world’s banker once again.  (This is our industry – FX – we know that this alone would create thousands and thousands of jobs and be a huge boost for the economy – billions would flow into USA and we’d again be the world’s banker.  But this same approach likely applies to many industries.  Dodd-Frank regulations killed FX and have cost millions of jobs.)  We’ve outlined this in previous articles.
It’s not really practical to bring factories back to USA, however we have robot technology and the financial sector is a great example of how we can create high skilled high paid white collar jobs.  But Trump seems to be more obsessed with form not essence (and his form is not good).
Oh – you’re thinking that a President can’t do that, right?  President is a figurehead, only Congress can pass laws.  That’s true.  But Nixon did it.  Somehow, Nixon was able to accomplish all these things in 1 day and created the floating FX market as it exists today.  It was not Nixon’s only genius move, there were many.  Was Nixon’s real genius just listening to his advisors like Henry?  Either way, in practice, it fixed the problem – only to be unwound by future administrations.  Was it a temporary fix?  Of course – but that’s what we need.  We need to unwind QE which is practically impossible, so jacking up rates is a first good start.  Wall St. and the stock market will suffer.  But they’ve had a long bull run.
Winter is coming – it’s bear time.
    Posted: October 17, 2017, 3:42 pm
    Brian Stauffer
    Black Monday. Although the event to which those two words refer occurred 30 years ago, they still carry the weight of that day—Oct. 19, 1987—when the Dow Jones Industrial Average shed nearly a quarter of its value in wave after wave of selling.
    No one in living memory had seen anything like it, at least not in the U.S., and in the postmortems conducted to understand just how the Dow managed to drop 508 points in one day, experts found a culprit: so-called portfolio insurance, a quantitative tool designed to use futures contracts to protect against market losses. Instead, it created a poisonous feedback loop, as automated selling begat more of the same.
    Since that day, markets have rallied and markets have tumbled, and still we marvel at the unintended consequences of what, in hindsight, was an obviously misguided strategy. Yet in the ensuing years, market participants have come to rely increasingly on computers to run quantitative, rules-based systems known as algorithms to pick stocks, mitigate risk, place trades, bet on volatility, and much more—and they bear a resemblance to those blamed for Black Monday.
    The proliferation of computer-driven investing has created an illusion that risk can be measured and managed. But several anomalous episodes in recent years involving sudden, severe, and seemingly inexplicable price swings suggest that the next market selloff could be exacerbated by the fact that machines are at the controls. “The system is more fragile than people suspect,” says Michael Shaoul, CEO of Marketfield Asset Management.
    THE RISE OF COMPUTER-DRIVEN, rules-based trading mirrors what has happened across nearly every facet of society. As computers have grown more powerful, they have been able to do what humans were already doing, only better and faster. That’s why Google has replaced encyclopedias in the search for information, why mobile banking is slowly replacing bank branches, and why—someday—our cars will be able to drive us to work. And it is also why Wall Street has embraced computers to help with everything from structuring portfolios and trading securities to making long-term investment decisions.
    In the years since 1987, huge strides have been made in understanding what drives stock performance and how to apply it to portfolio construction. At first, researchers focused on “factors,” such as a stock’s volatility relative to the market—known as beta; whether a stock is large-cap or small—the size factor; and whether it is cheap or expensive—the value factor. More recently, the use of factors has proliferated to include many others, such as quality and momentum. (The latter involves buying the best-performing stocks and shunning the worst performers.)
    Quantitative investors understood early on that betting on stocks based on their characteristics—and not the underlying business fundamentals of a particular company—was a good way to outperform the market. So good, in fact, that many fundamental, or “active,” money managers now use quantitative tools to help construct their portfolios and ensure that they don’t place unintended bets. Nomura Instinet quantitative strategist Joseph Mezrich says that 70% of an active manager’s performance can be explained by quantitative factors. “Factors drive a lot of the returns,” Mezrich says. “Over time, this has dawned on people.”
    Has it ever. One result has been the rise of indexing and exchange-traded funds. The ability to buy an index fund based on the Standard & Poor’s 500—effectively a bet that large companies will outperform small ones—made the need for traditional fundamental research and stock-picking unnecessary. Since then, indexes and ETFs have been created to reflect just about any factor imaginable—low volatility and momentum among them. Some funds even combine multiple factors in a quest for better performance.
    As a result, an increasing amount of money is being devoted to rules-based investing. Quantitative strategies now account for $933 billion in hedge funds, according to HFR, up from $499 billion in 2007. And there’s some $3 trillion in index ETFs, which are, by definition, rules-based. The upshot: Trillions of dollars are now being invested by computers. “We’ve never seen so many investment decisions driven by quantitative systems,” says Morningstar analyst Tayfun Icten.
    That’s quite a change from the 1980s. If you wanted to place a trade 30 years ago, you picked up the phone and called your broker; your broker called the firm’s trader; the trader would ring up a specialist, the person in charge of running trading in a given stock; and the trade would be executed. The process was slow, cumbersome, and inefficient. As computer technology advanced, machines gradually took most of these steps out of the hands of humans. Today, nearly every trade is handled by an algorithm of some sort; it is placed by a computer and executed by computers interacting with one another.
    The entity handling trades isn’t the only thing that has changed in the past 30 years. Trading now occurs in penny intervals, not fractions such as eighths and 16ths. While that has made it cheaper for investors to buy and sell a stock, pennies made trading far less lucrative for market makers, who historically profited by playing the “spread” between the highest bid to buy and the lowest offer to sell. Consequently, market makers have been replaced by algorithms programmed to instantaneously recognize changes in liquidity, news flow, and other developments, and respond accordingly. At the same time, the proliferation of exchanges helped to lower trading costs but also created a fragmented market that can make shares hard to find during dislocations.
    Most of the time, none of this matters. If you want to buy a stock, you boot up your computer, log in to your brokerage account, and place an order that gets filled almost immediately. The fee you pay is so low that it would have been unimaginable 30 years ago. The system has worked well for individual investors, and will continue to do so—as long as nothing goes wrong.
    BUT MISTAKES HAPPEN. In 1998, the “quants” at Long-Term Capital Management, led by Nobel Prize winners Myron Scholes and Robert Merton, nearly caused a massive market selloff when the hedge fund’s highly leveraged trades, based on quantitative models of expected market behavior, suddenly lost money after Russia unexpectedly defaulted on its debt. The damage was magnified by the borrowing that LTCM had used to supersize its bets. Only a bailout organized by the Federal Reserve prevented the broad market from plummeting.
    In August 2007, a selloff occurred in quantitative funds that would become known as the “quant quake.” To this day, no one knows what sparked the selling, but once it began, computer models kicked in, causing further selling. Humans added to the mess as risk managers looking at losses dumped shares. Funds specializing in quantitative investment strategies reportedly suffered massive losses: The Renaissance Institutional Equities fund was thought to have lost nearly 9% early in that month, while Goldman Sachs ’ Global Alpha suffered a double-digit decline.
    The impact on the market wasn’t huge—the S&P 500 dropped just 3.3% during the first two weeks of August—but the event demonstrated what happens when a trade sours and too many funds are forced by their models to sell at the same time. It was a wake-up call for quants, who have since created more-sophisticated systems to reduce the kind of crowding that led to the selloff.
    More recently, problems have been caused by algorithms that are supposed to provide stock for investors to buy, or buy when investors sell, creating liquidity. On May 6, 2010, the S&P 500 dropped 7% in just 30 minutes, as bids and offers for stocks moved far away from where stocks had been trading, in some cases leaving bids down as low as a penny and offers as high as $100,000.
    Again, no one knows what caused the sudden decline. Investors had been on edge because of an unfolding European debt crisis, but that alone seemed unlikely to have triggered the flight of automated market makers. The U.S. Commodity Futures Trading Commission blamed the swoon on fake orders placed by a futures trader, while the Securities and Exchange Commission fingered a massive sell order in the futures market allegedly placed by a mutual fund company seeking to protect itself from a potential downturn. That order, it argued, had been handled by a poorly designed algorithm—yet another reminder that an algorithm is only as good as the inputs used by the people designing it.
    While the rout was over quickly, and the S&P 500 finished the session down a more modest 3.2%, the episode raised concerns about the potential for computerized trading to exacerbate selloffs.
    REGULATORS AND EXCHANGES have made changes since then, but so-called flash crashes continue to happen, even if they are no longer quite as disruptive as the 1987 selloff. On Aug. 24, 2015, for instance, the Dow dropped almost 1,100 points during the first five minutes of trading. The selloff was spurred by a plunge in China’s stock market, which led to a drop in Europe. All of this happened when U.S. markets were closed, which meant that investors turned to the futures and options markets to place their trades.
    Chaos prevailed when the stock market opened: Only about half of the stocks in the S&P 500 had started trading by 9:35 a.m.; a quarter of the Russell 3000 index was down 10% or more intraday, and many large ETFs traded far below the value of their underlying assets. Algorithms, sensing something amiss, simply stepped back from the market. Once again, the S&P 500 recovered much of its sudden loss, but savvy market observers detected eerie echoes of an earlier era. In a much-read note at the time,JPMorgan strategist Marko Kolanovic cited the feedback loop of selling and compared it to the Black Monday selloff of 1987.
    Flash crashes have not been limited to stocks—or even crashes. On Oct. 15, 2014, the price of the 10-year Treasury note soared, causing yields to tumble 0.35 of a percentage point in mere minutes before quickly reversing. The SEC blamed the increasing role of automated high-frequency algorithms for the sudden move.
    The most recent scare occurred on May 18, when the iShares MSCI Brazil Capped ETF(ticker: EWZ) dropped as much as 19% in a single trading session before closing the day down 16%. To put that move in perspective, the Brazil ETF’s worst single-day decline at the height of the financial crisis in 2008 had been 19%. While there was bad news in May—reports that Brazilian President Michel Temer had been ensnared in a corruption scandal—that seemed insufficient cause for such a precipitous decline.
    Shaoul, of Marketfield, attributes the Brazil ETF’s plunge to a combination of factors, including the growth of passive investing, which has made it easy to buy and sell an entire country’s market with the press of a button, combined with computer-driven trading. “There was no way of knowing what was a human being pressing a button, or a computer pressing a button,” he says. “But it generates the potential for sudden spikes in volatility that come out of nowhere.”
    The Brazil ETF recovered its losses fairly quickly. By the end of August, it was trading above its May 17 close.
    U.S. markets haven’t suffered declines like that, but have experienced numerous “fragility events”—sudden one-day declines—during the current rally, says Chintan Kotecha, an equity derivatives strategist at Bank of America Merrill Lynch. But because stocks have been in a bull market, there has been little follow-through after the initial selloff. As a result, some quantitative strategies reposition for more volatility, but none arrives. Kotecha attributes the lack of follow-through, in part, to central bankers’ continued bond-buying, which has provided much-needed support for the markets.
    Follow-through was all the market had in 1987, as selling automatically triggered more selling. To some observers, the risks of a similar scenario are growing. One particular area of concern: volatility-targeting strategies, which try to hold a portfolio’s volatility constant, and risk-parity strategies, which attempt to equalize the risk in a portfolio among bonds, stocks, and other assets—and sometimes use leverage to do it. When volatility is low, these portfolios can hold more-risky assets than when volatility is high. But as soon as volatility rises—and stays high—these types of funds will need to start selling stocks and other assets to keep the risk of their portfolios at the same level. If they sell enough, volatility could spike higher, leading to even more selling.
    The PROLIFERATION of COMPUTER-DRIVEN INVESTING has created an illusion that RISK can be measured and managed. But several anomalous episodes in recent years involving sudden, severe, and seemingly INEXPLICABLE PRICE SWINGS suggest the next MARKET SELLOFF could be exacerbated by the fact that the MACHINES are at the controls.
    In a market selloff, commodity-trading advisors similarly could exit their long positions quickly and look to short stocks, creating further selling pressure as they head for the exits. “Action leads to more action,” says Richard Bookstaber, chief risk officer at the University of California and author of The End of Theory, a book about financial crises caused by positive feedback loops.
    PERHAPS THE BIG QUESTION is who might be left to buy. Warren Buffett once quipped that investors should be fearful when others are greedy and greedy when others are fearful, but the current market structure has turned that maxim on its head. Algorithms provide less liquidity in a downturn than a human market maker, who might be thinking about how to profit from a dislocation.
    The rise of momentum and passive strategies has caused some $2 trillion to shift away from active money managers, who could be counted on to look for bargains as stocks sold off, says Kolanovic, the JPMorgan strategist. “We think the main attribute of the next crisis will be severe liquidity disruptions resulting from market developments since the last crisis,” he says.
    But most strategists acknowledge that such an occurrence isn’t a high-probability event. Much will depend on the cause of any disruption, as well as seasonal factors—stocks are more thinly traded in summer, for example. Also, computers aren’t the only cause of selling cycles; bear markets, after all, long predate machine-driven trading.
    Quantitative investors argue that they have learned from past mistakes and are less likely to be leveraged or crowded into the same trades. Moreover, regulators and exchanges have instituted rules that could help arrest a bout of unchecked selling, with trading halts imposed when the S&P 500 falls 7%, 13%, and 20%.
    Maybe these precautions will work to stem a tidal wave of selling. One of these days—possibly soon, given stocks’ lofty valuation and the Fed’s plan to shrink its balance sheet—we’ll find out. 
    http://www.barrons.com/articles/black-monday-2-the-next-machine-driven-meltdown-1507956435?shareToken=sta34fcb09ee6a423fa9e0acc127844d01&utm_source=newsletter&utm_medium=email&utm_campaign=sendto_newslettertest&stream=top-stories
    Posted: October 16, 2017, 11:55 pm
    (GLOBALINTELHUB.COM) — 10/15/2017 Dover, DE — The Bit Paradigm has arrived; with billions being thrown into projects that no one knows who are the founders, or if the profiles they use for their ‘team’ pages are guys working from home or have day-jobs at the local grocery store.  It is transforming the landscape so rapidly, we compiled a sequel to Splitting Pennies entitled Splitting Bits – Understanding Bitcoin and the Blockchain – available on Amazon Kindle for $2.99 and Paperback $9.99.
    As Currency experts, we found nothing unusual in the Bit World, it’s just FX 2.0 and hopefully a catalyst for real global financial reform beyond the scope of the myopic Dodd-Frank Consumer Rip Off and Exploitation Regulation that have plagued the US consumer going on 5 years now.  As we’ve explained in our previous work, Splitting Pennies – FX is the basis for the global financial system.  Don’t forget that Bitcoin is denominated in US Dollars.  While FX is the least understood market in the world it is also the most important.
    Just remember one thing – customers (business) need currency, they don’t need stocks or Crypto.  Take any business as an example, McDonalds (MCD) is always a great FX example – they need foreign currency as they accept it in more than 110 countries worldwide.
    forex
    And being based in Chicago, they need to repatriate those currencies into US Dollars, making them one of the biggest FX traders in the world.  So where does Bitcoin fit into all this?  At the moment, it doesn’t.  Of course that’s all changing – and changing quickly.  The news changes by the day – as the Bit Paradigm goes mainstream.  The current market cap of the entire CryptoCurrency Market is $170 Billion according to Coinmarketcap.com.
    While that is still far away from traditional markets, the growth rate is beyond parabolic.  Skeptical traders should remember the late 90’s when fears about the Euro kept investors away.  Just take a look at this Monthly EUR/USD chart showing the Euro’s rise against the dollar from lows of .83 to highs of 1.58 before settling into the range that it’s been in recently:
    Euro Historical
    The Red line from .83 to 1.58 is about 190% or double – and traders should also bear in mind in FX there is a lot of leverage, so the 100% return in 6 years could have been 1000% or greater (many funds did profit from this simple trade).
    Of course, the real money in FX is in algorithmic trading, what the banks learned the hard way.. But the Euro is a great example of a synthetic currency that was created artificially, and finally succeeded to be an alternative to the US Dollar as a world reserve.  Although the technicalities of Bitcoin are far different, the gestalt is the same – Bitcoin is a currency created artificially, backed by nothing, and is increasing in value because people believe that it will be used in the future and that the price will go up.  Just like there’s nothing behind Bitcoin, there’s really nothing behind the Euro – with one key difference.  It’s possible for the ECB to print (mint) as many Euros as they want, but it’s not possible to do this with Bitcoin because of the design (there is a limited number of Bitcoin) and because there’s no central bank behind it.
    The big story of currency trading Crypto is of course, new alt-coins other than Bitcoin, which are being issued so rapidly it’s impossible to even keep track of them.  Coinmarketcap.com lists 1170 different Cryptocurrencies, you can see the full list here.
    For a detailed breakdown of how you can profit from trading Bitcoin, checkout our new book Splitting Bits.
    Posted: October 15, 2017, 6:51 pm
    (Eliteeservices.net) - 10/10/2017 Dover, DE -- Elite E Services, a FinTech virtual corporation in the Currency business for 15 years, has today published a digital book about Bitcoin and the Blockchain entitled "Splitting Bits : Understanding Bitcoin and the Blockchain" available on Kindle exclusively, for $2.99 digitally.  Get it now from www.pleaseorderit.com

    With the world of Bitcoin and Blockchain moving faster than ever, EES felt an urgent need to research this Currency niche and publish our findings in a book.  Bitcoin is a Currency, and EES has been in the Currency management business for 15 years.  What we learned is fascinating, that Bitcoin isn't just a 'fad' but quite the opposite - Blockchain technology seems that soon it will be used everywhere.  Get it now from www.pleaseorderit.com

    Book Description:

    Splitting Bits takes the Bit World of Bitcoin and the Blockchain and splits it into bite sized pieces for your digestion pleasure. We explain Bitcoin for what it is - a digital currency, not so different from fiat currencies such as the Euro or Yen. Splitting Bits is the natural sequel to Splitting Pennies - Understanding Forex. A new Bit Paradigm has begun and the computer arms race to mine and hash and mint your own coin is important for everyone to understand. Blockchain is the most explosive, potent technology ever which is about to change the world, starting with Wall St. Bitcoin may be a 'fad' but the underlying Distributed Ledger Technology (DLT) is the new standard in Currency Trading, Banking, Securities, and new markets yet to be created. Old systems will be renovated and re-invented. Blockchain is spreading faster than a virus around the world where soon a "Kodak Moment" will make businesses obsolete (such as when Smartphones make Kodak irrelevant). If you're feeling as you missed the opportunity to make 500,000% return by not buying some Bitcoin in 2011, now is an even greater opportunity - as we explain in this book. Bitcoin isn't actually going up in price, it's the US Dollar going down - there is a limited supply of Bitcoin, but the supply of US Dollar is unlimited. If you want to integrate Bitcoin for your business, Splitting Bits is your practical guide to simple steps of how you can accept Bitcoin payments and manage the risk of a volatile currency. For traders and investors, we explore the markets as they exist now and what the short term future holds. Splitting Bits has something for everyone, including our own proprietary Better Coin - learn how to make your own Coin logically, algorithmically. Learn how to avoid the fraud, which exists everywhere. Splitting Bits also includes how to guide for Bitcoin mining, and practical information for anyone who is confused, curious, or otherwise wants to improve their Bitcoin knowledge. Of course, we describe many Cryptocurrencies but use Bitcoin as the prime example. Join the Bit Paradigm and buyer beware - you won't think the same about investing after reading. WARNING: Crypto trading is contagious!

    Get it now from www.pleaseorderit.com


    Posted: October 10, 2017, 1:53 pm
    Authored by Kip Herriage of VRAletter.com | October 7, 2017
    Note: This is an update to my article of 10/7/17. Nothing has been removed or edited from the original article. This updated article includes additional financial/trading anomalies I have uncovered since posting the original piece.
    Included in this updated article:
    1) Additional trading research on OSIS (OSI Systems), the global leader in baggage, shipping and people detection systems (airports and now MUCH more, like hotels/casinos). Like the other 4 co’s that I have found, OSIS also began to rise on 9/11/17 (remember this date as you will see it in each company) and it rose on large share/option volume increases. The shares of OSIS would rise as much as 16% from its 9/11/17 lows to just after the attack.
    2) OLN (Olin Corp) makes Winchester ammunition. Beginning on 9/11/17 their shares began to rise on a large increase in volume and a HUGE increase in call option purchases (so far I’ve found more than 6000 calls were purchased in OIH the week prior to the attack with someone making a ton of money in these calls). The shares of OLN would soar as much as 23% from their 9/11/17 lows to just after the attack.
    Insider Trading and Financial Anomalies Surrounding the Las Vegas Attack
    Note: With this report, I make no claim to specific knowledge of any wrongdoing or improprieties. Instead, this report includes trading patterns, news releases and/or public record SEC filings.
    We will examine the share price movements of two gun manufacturers (American Outdoor Brands and Sturm Ruger) and the share price movement of MGM (which owns Mandalay Bay). We will also examine additional financial events surrounding MGM, including what can only be referred to as massive levels of insider selling in the shares of MGM, by the CEO/Chairman and MGM officers/directors. As you’ll see, more than $200 million in MGM shares were sold in the weeks leading up to the attack.
    Background. Interesting Trading Patterns in AOBC, RGR and MGM.
    Over the course of my 32 years in the investment industry I have constructed a proprietary investing model that I refer to as the “VRA Trading & Investing System”. In short, its design is to track money flows in the stock market and detect sector and stock analysis/movements that then alert me as to when/where money is flowing in the markets.
    For example, prior to the 2016 Presidential Elections, the VRA System noticed that the share price of gun manufacturers had begun to decline rapidly. This was one of our first financial clues that Trump might beat Clinton (Trump’s strong support of 2A). As you can see below, American Outdoor Brands (AOBC, formerly Smith & Wesson), hit a high of $31/share in August of 2016. As the bottom began to fall out, it would ultimately drop 55% in price, before hitting its low price of just over $13 on 9/11/17.
    The market is referred to as a “discounting mechanism” and as such, it often predicts future events. It certainly did so in the case of the election and the share price of AOBC.
    We see the same trading pattern in gun manufacturer Sturm Ruger (RGR). RGR traded as high as $73 in March of 2016 before ultimately dropping 37%, when it too bottomed within one trading day of AOBC hitting it’s lows (9/8/17). Again, my system noted the rapid decline in gun stocks, which led me to believe that Trump may in fact win the election. Remember this point; both AOBC and RGR hit their lows at the same time, just over two weeks prior to the Las Vegas shooting.
    Something Changed in September
    Let’s now examine the trading patterns of AOBC and RGR in detail, just over two weeks “prior” to the attack. As you can see, AOBC bottomed on 9/11/17 at $13.30 before the spike higher began. From 9/11 to just after the attack, AOBC rose 23% in price. It did so on a noticeable increase in buy-side trading volumes.
    Below, we see the same chart and reaction in the shares of Sturm Ruger (RGR). From its 9/8/17 lows, RGR bottomed at $46.24 and then spiked to $55.90 just after the attack, for a move higher of 21%.
    After falling in price from early-mid 2016 to their early September 2017 lows, the two largest publicly traded gun manufacturers bottomed, then spiked higher, at almost exactly the same time. In addition, buy-side volume increases rose sharply as well.And, while not covered in this report (more work is needed), we also saw a spike in call option purchases in both AOBC and RGR, in the days/weeks leading up to the attack.
    This final chart shows the share price of MGM (owner of Mandalay Bay) in the days leading up to the attack to present. MGM shares declined more than 10%, from 9/7/17 to recent lows. This decline occurred as some $200 million in insider selling was taking place.
    Bottom line: Beginning in early-mid September to this report, gun manufactures AOBC and RGR rose in price 23% and 21% (on higher trading volumes), while the shares of MGM fell in price by 11% (as $200 million in insider selling occurred).
    MGM: Heavy Levels of Insider Selling
    As the SEC insider transaction reports below detail, from 9/5/17 to 9/12/17, approximately 6 million shares of MGM were sold by officers and/or directors of the company, totaling approximately $200 million in proceeds to sellers. Included in this group is the selling of approximately 450,000 shares by MGM CEO and Chairman James Murren (a seller of size since late July) and who appears to have sold more than 85% of all holdings. We also see that MGM Board member Grounds William Warwick sold 176 million shares of his MGM stock on 9/6/17.
    We have no indication that MGM insiders sold these 6 million shares due to any advance knowledge of the 10/1 attack. I am not making that claim. I am simply pointing out facts that cannot be in question.
    But I will make a few observations:
    1) If MGM/Mandalay Bay were to lose law suits associated with this attack, the downside risks to MGM share price may be extensive.
    2) We also know that MGM CEO James Murren was appointed to the Homeland Security National Infrastructure Advisory Council by President Obama in December 2013. This fact could make for some interesting depositions, as it relates to exactly what type of advanced security systems Mandalay Bay had in place, leading up to and on the night of 10/1/17.
    “The National Infrastructure Advisory Council is tasked with providing the president with advice on the “security of the critical infrastructure sectors and their information systems.” The council is composed of a maximum of 30 members, appointed by the president, from private industry, academia and state and local government.”
    3) I am also aware of the fact that MGM put options activity spiked as well (needs more work), beginning at the same time gun stocks were rising and MGM was falling in price.
    4) For those curious about the trading in other major Las Vegas Hotel casino stocks, during this same time frame, this also needs more work. However, I can report that at the same time MGM’s share price was falling, the share prices of Las Vegas Sands (LVS) and Wynn Resorts (WYNN) were actually rising.
    There’s more…like the recent trading pattern in OSIS, which makes “detection systems” of all kinds (similar to their subsidiary “Rapiscan”, which makes the TSA body scanners that were put in place following 9/11). Many are wondering how long it might be before we are forced to walk through similar devices, as we enter hotels/casinos.
    In my original piece I only mentioned OSI Systems (OSIS) and their trading pattern around the Las Vegas attack. I’m updating this to include the chart from the same time frame and additional comments.
    Below is the chart of OSIS. From the lows of 9/11/17 to after the attack, the shares of OSIS have jumped 16%. In addition (more work is being done here), call option volume also spiked higher, 2 weeks before the attack.
    I have also confirmed that OSIS is working on plans to place their baggage/people detection systems in hotels/casinos around the world. Deepak Chopra is the CEO and Founder of OSIS.
    Here’s another interesting piece to the puzzle. Olin Corp (OIH) makes Winchester ammunition (among other things). Beginning on 9/11/17 their shares began to rise on a large increase in volume and a HUGE increase in call option purchases (so far I’ve found more than 6000 calls were purchased in OIH the week prior to the attack. Someone is making a ton of money in these calls). The shares of OLN would soar as much as 23% from their 9/11/17 lows to just after the attack.
    I am also including the anonymous 4 chan post (below) that everyone is talking about. As I see it, these are (among) the 5 publicly traded companies that the planner of the Las Vegas attack would want to target. It is most interesting that each of these stocks began their moves on 9/11/17, just one day after the 4chan post. This is what we know after less than 1 week after the attack. What might we know in another week?
    Closing:
    In closing, let me repeat; I make no claims or assertions that anyone mentioned in this piece has done anything nefarious. They likely did not.
    The question I might ask is, “Did someone else profit from the heinous acts of 10/1/17? Possibly the planners?”
    Like many of you, I am interested and I am asking questions. I also remember that during 9/11/01, reports surfaced widely in the financial media that “many, many millions” in profits were made off of the purchase of put options in the shares of United Airlines and American Airlines, the two airliners that operated the four aircraft that were hijacked on 9/11 (among other well-documented reports of large put option purchases in numerous companies that had the most exposure to a shocked US economy).
    There’s more…like the recent trading pattern in OSIS, which makes “detection systems” of all kinds (similar to their subsidiary “Rapiscan”, which makes the TSA body scanners that were put in place following 9/11). Many are wondering how long it might be before we are forced to walk through similar devices, as we enter hotels/casinos.
    I will continue to follow this story. Should you have information that might assist in my research, you can reach me at kip@vraletter.com.
    I am a proud American. I want the best for our country. Wherever the truth leads us, that is where we must go. Follow the money.
    Kip Herriage
    VRALetter.com
    Posted: October 9, 2017, 12:36 am
    That didn't take long.
    After issuing a ruling in July that officially declared that the tokens sold during initial coin offerings must be registered as securities - a ruling that many hoped would lend a badly needed veneer of legitimacy to the shady ICO market - the SEC is following through with what we imagine will be the first of many civil actions against ICOs and the individuals who launch them.
    The agency on Friday announced civil actions against two companies and their founder, businessman Maksim Zaslavskiy, for violating anti-fraud and registration provisions of federal securities laws after misleading investors in a pair of so-called initial coin offerings (ICOs) purportedly backed by investments in real estate and diamonds.
    It's important to remember that this is civil complaint - the SEC doesn't have the power to make arrests; to do that, it must work in tandem with the FBI. Zaslavskiy is a free man. However, his assets - and those belonging to his companies - have been frozen. Instead, the agency is seeking to permanently ban Zaslavskiy from participating in any future digital-currency offerings, along with what we imagine will be hefty fines.
    In its press release, the SEC accused Maksim Zaslavskiy and his companies of selling unregistered securities, while also alleging that the digital tokens or coins he was peddling didn't really exist. According to the SEC's complaint, investors in REcoin Group Foundation and DRC World (also known as Diamond Reserve Club) were told (presumably by Zaslavskiy) that they could expect sizeable returns from the companies' operations, when neither had any real operations to speak of.
    As we've previously reported, the ICO market has exploded since late last year. The total sum raised has already reached $1.3 billion, with more expected by year's end. However, the ease with which unscrupulous people could fraudulently market their tokens (and earn big money) has attracted attention from regulators all over the world. China cited fears about abuses related to ICOs as the reason for shuttering all local digital-currency exchanges. Russia briefly flirted with the idea as well.
    Earlier today, FINMA, the Swiss government body responsible for regulating markets, said it was investigating several ICOs for possible fraud. In its press release announcing the investigations, the regulator explained that because ICOs are structured in a similar way to traditional stock offerings, they fall under the agency's purview. So every time it has received a complaint related to ICOS, its representatives have pursued that complaint.
    To the best of our knowledge, these are the first indications that any official regulatory action is being taken against ICO purveyors in either the US or Switzerland.
    In its civil complaint, the SEC alleges that "from July 2017 to the present, Zaslavskiy, the President and sole owner of the Companies, fraudulently raised at least $300,000 from hundreds of investors, through various material misrepresentations and deceptive acts relating to supposed investments in digital “tokens” or “coins” offered, first by REcoin, then by Diamond, during the ICOs."
    Zaslavskiy allegedly touted REcoin as "The First Ever Cryptocurrency Backed by Real Estate."  Alleged misstatements to REcoin investors included that the company had a "team of lawyers, professionals, brokers, and accountants" that would invest REcoin's ICO proceeds into real estate when in fact none had been hired or even consulted. Zaslavskiy and REcoin allegedly misrepresented they had raised between $2 million and $4 million from investors when the actual amount is approximately $300,000.
    Zaslavskiy then carried his scheme over to Diamond Reserve Club. He marketed the organization as one that invests in diamonds and obtains discounts with product retailers for individuals who purchase "memberships" in the company. Despite their representations to investors, the SEC alleges that Zaslavskiy and Diamond have not purchased any diamonds nor engaged in any business operations. Yet they allegedly continue to solicit investors and raise funds as though they have.
    Read the rest of the complaint below:


     
     http://www.zerohedge.com/news/2017-09-29/sec-files-first-ever-civil-fraud-charges-against-ico-companies 
    Posted: September 30, 2017, 4:27 pm
    Former Fortress Principal Michael Novogratz left the firm's colossal macro hedge fund almost two years ago, but has been discussing investments in virtual currencies since 2013 when he told a UBS conference...
    "Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."
    He was of course correct, Bitcoin was trading around $200 at the time and as recently as three weeks ago was worth $5000...
    The last time we heard from Novogratz was in June 2017, at the CB Insights Future of Fintech conference in New York, where he told attendees that he has cut holdings (in Bitcoin and Ethereum) after the cryptocurrencies' latest "spectacular run," warning that "Euthereum had likely hit its highs for the year," and "cryptocurrencies were likely the biggest bubble of his lifetime."
    However, while this all sounded desperately downbeat, Novogratz was still very "positively constructive" on the space overall. He should be - he has 20% of his net worth invested in the sector... and now, as Bloomberg reports, Mike Novogratz is reinventing himself as the king of bitcoin.
    Novogratz has had a very good run. Aside from his epic call in Bitcoin, he has done extremely well in Ethereum, as Bloomberg details...It started with a late-2015 visit to a friend’s startup in Brooklyn.
    “I expected to see Joe, a dog and one assistant. Instead I saw 30 dynamic young people crammed in a Bushwick warehouse, coding, talking on the phone, making plans for this revolution,” Novogratz said.

    “Macro guys are instinctive. My instinct was, ‘I want to buy a chunk of this company.”

    He decided instead to invest in ether, the cryptocurrency token used on the Ethereum network.

    Novogratz bought about $500,000 at less than a dollar per ether and left on a vacation to India. By the time he returned a few weeks later, the price had risen more than fivefold. He bought more.

    Over the course of 2016 and into 2017, as ether surged to almost $400 and bitcoin topped $2,500, Novogratz sold enough to make about $250 million, the biggest haul of any single trade in his career.


    He said he paid tax on the profits, bought a Gulfstream G550 jet and donated an equal amount to a philanthropic project for criminal justice reform.
    Novogratz was hooked, and according to a person familiar with his plans, Bloomberg reports that the outspoken macro manager is starting a $500 million hedge fund to invest in cryptocurrencies, initial coin offerings and related companies. Novogratz will put up $150 million of his own money and plans to raise $350 million more by January, mainly from family offices, wealthy individuals and fellow hedge fund managers.
    “This is going to be the largest bubble of our lifetimes,” Novogratz said.

    “Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”
    At that size, the Galaxy Digital Assets Fund would be the biggest of its kind and signal a growing acceptance of cryptocurrencies such as bitcoin and ether as legitimate investments.
    Where others see volatility and liability, Novogratz, a former Goldman Sachs partner, smells opportunity.
    “In a lot of ways, this is a market like any other market,” Novogratz said.

    “You see the psychology of fear and greed in the charts the same way you’d see it in charts of the Indonesian rupiah or dollar-yen or Treasuries. They’re exaggerated because of less liquidity and because you can’t get short.
    “I sold at $5,000 or $4,980,” he said.

    “Then three weeks later I’m trying to buy it in the low $3,000s. If you’re good at that and you’re a trading junkie, it’s a lot of fun.”
    And bubble or not, "Novo" as his friends call him, concluded eloquently on the extreme nature of cryptocurrencies' potential...
    “Remember, bubbles happen around things that fundamentally change the way we live,” he said.

    “The railroad bubble. Railroads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going.”

    http://www.zerohedge.com/news/2017-09-26/how-one-trader-made-billions-ethereum-and-what-hes-doing-next 
    Posted: September 27, 2017, 5:05 pm
    New cryptocurrencies are emerging almost daily, and many interested parties are wondering whether central banks should issue their own versions. But what might central bank cryptocurrencies (CBCCs) look like and would they be useful? This feature provides a taxonomy of money that identifies two types of CBCC - retail and wholesale - and differentiates them from other forms of central bank money such as cash and reserves. It discusses the different characteristics of CBCCs and compares them with existing payment options.1
    JEL classification: E41, E42, E51, E58.
    In less than a decade, bitcoin has gone from being an obscure curiosity to a household name. Its value has risen - with ups and downs - from a few cents per coin to over $4,000. In the meantime, hundreds of other cryptocurrencies - equalling bitcoin in market value - have emerged (Graph 1, left-hand panel). While it seems unlikely that bitcoin or its sisters will displace sovereign currencies, they have demonstrated the viability of the underlying blockchain or distributed ledger technology (DLT). Venture capitalists and financial institutions are investing heavily in DLT projects that seek to provide new financial services as well as deliver old ones more efficiently. Bloggers, central bankers and academics are predicting transformative or disruptive implications for payments, banks and the financial system at large.2
    Lately, central banks have entered the fray, with several announcing that they are exploring or experimenting with DLT, and the prospect of central bank crypto- or digital currencies is attracting considerable attention. But making sense of all this is difficult. There is confusion over what these new currencies are, and discussions often occur without a common understanding of what is actually being proposed. This feature seeks to provide some clarity by answering a deceptively simple question: what are central bank cryptocurrencies (CBCCs)?
    To that end, we present a taxonomy of money that is based on four key properties: issuer (central bank or other); form (electronic or physical); accessibility (universal or limited); and transfer mechanism (centralised or decentralised). The taxonomy defines a CBCC as an electronic form of central bank money that can be exchanged in a decentralised manner known as peer-to-peer, meaning that transactions occur directly between the payer and the payee without the need for a central intermediary.3 This distinguishes CBCCs from other existing forms of electronic central bank money, such as reserves, which are exchanged in a centralised fashion across accounts at the central bank. Moreover, the taxonomy distinguishes between two possible forms of CBCC: a widely available, consumer-facing payment instrument targeted at retail transactions; and a restricted-access, digital settlement token for wholesale payment applications.4
    Bitcoin
    But what might the two types of CBCC offer that alternative forms of central bank money cannot? For the consumer-facing kind, we argue that the peer-to-peer element of the new technology has the potential to provide anonymity features that are similar to those of cash but in digital form. If anonymity is not seen as important, then most of the alleged benefits of retail CBCCs can be achieved by giving the public access to accounts at the central bank, something that has been technically feasible for a long time but which central banks have mostly stayed away from.
    On the wholesale side, the assessment of CBCCs is quite different. Wholesale payments today do not offer cash-like anonymity. In particular, transactions that occur in wholesale systems are visible to the central operator. Hence, the case for wholesale CBCCs depends on their ability to improve efficiency and reduce settlement costs. Here, the answer depends on a number of technical issues that still need to be resolved. Some central banks have experimented with wholesale CBCCs, but none has announced yet that it is ready to adopt this technology.
    The first section presents the taxonomy underlying our definition. The following two sections discuss the features of the two basic CBCC types, retail and wholesale, drawing on historical examples and projects that are currently under way. A concluding section reflects on some of the issues that central banks need to consider in this area going forward.

    A new form of central bank money

    Our starting point for defining CBCCs is a report on cryptocurrencies published in 2015 by the Committee on Payments and Market Infrastructures (CPMI (2015)).5 This report sought to provide a definition of the new class of currencies represented by bitcoin and altcoins (alternatives to bitcoin) that had emerged using the same technology. The report identifies three key characteristics of cryptocurrencies: they are electronic; are not the liability of anyone; and feature peer-to-peer exchange.6
    Cryptocurrencies utilise DLT (Box A) to allow remote peer-to-peer transfer of electronic value in the absence of trust between contracting parties. Usually, electronic representations of money, such as bank deposits, are exchanged via centralised infrastructures, where a trusted intermediary clears and settles transactions. Previously, peer-to-peer exchange was restricted to physical forms of money.
    Some - but not all - of these features are also common to other forms of money (Graph 2, left-hand panel). Cash is peer-to-peer, but it is not electronic, and it is a central bank liability. Commercial bank deposits are a liability of the bank that issues them. Nowadays, they are in electronic form and are exchanged in a centralised manner either across the books of a given bank or between different banks via the central bank. Most commodity monies, such as gold coins, may also be transferred in a peer-to-peer fashion but are neither the liability of anyone nor electronic.7
    It may seem natural to define CBCCs by adapting the CPMI's definition to say that they are electronic central bank liabilities that can be used in peer-to-peer exchanges. But this ignores an important feature of other forms of central bank money, namely accessibility. Currently, one form of central bank money - cash - is of course accessible to everyone, while central bank settlement accounts are typically available only to a limited set of entities, mainly banks (CPSS (2003, p 3)). In this spirit, Bjerg (2017) includes universally accessible (ie easy to obtain and use) in addition to electronic and central bank-issued in defining the new concept of central bank digital currency (Graph 2, right-hand panel).
    Box A

    What is distributed ledger technology?icon

    Distributed ledger technology (DLT) refers to the protocols and supporting infrastructure that allow computers in different locations to propose and validate transactions and update records in a synchronised way across a network. The idea of a distributed ledger - a common record of activity that is shared across computers in different locations - is not new. Such ledgers are used by organisations (eg supermarket chains) that have branches or offices across a given country or across countries. However, in a traditional distributed database, a system administrator typically performs the key functions that are necessary to maintain consistency across the multiple copies of the ledger. The simplest way to do this is for the system administrator to maintain a master copy of the ledger which is periodically updated and shared with all network participants.
    By contrast, the new systems based on DLT, most notably Bitcoin and Ethereum, are designed to function without a trusted authority. Bitcoin maintains a distributed database in a decentralised way by using a consensus-based validation procedure and cryptographic signatures. In such systems, transactions are conducted in a peer-to-peer fashion and broadcast to the entire set of participants who work to validate them in batches known as "blocks". Since the ledger of activity is organised into separate but connected blocks, this type of DLT is often referred to as "blockchain technology".
    The blockchain version of DLT has successfully powered Bitcoin for several years However, the system is not without drawbacks: it is costly to operate (preventing double-spending without the use of a trusted authority requires transaction validators (miners) to employ large amounts of computing power to complete "proof-of-work" computations);icon there is only probabilistic finality of settlement; and all transactions are public. These features are not suitable for many financial market applications. Current wholesale DLT payment applications have therefore abandoned the standard blockchain technology in favour of protocols that modify the consensus process in order to allow enhanced confidentiality and scalability. Examples of protocols currently being tested by central banks include Corda and Hyperledger Fabric. Corda replaces blockchain with a "notary" architecture. The notary design utilises a trusted authority and allows consensus to be reached on an individual transaction basis, rather than in blocks, with limited information-sharing.
    Distributed ledger system
    icon See also Chapman et al (2017), CPMI (2015) and Benos et al (2017).icon The amount of energy currently being used by Bitcoin miners is equal to the energy consumption of Lebanon and Cuba (see http://digiconomist.net/bitcoin-energy-consumption). For a detailed description of proof-of-work, see https://en.bitcoin.it/wiki/Proof_of_work.
    We combine the properties discussed in CPMI (2015) and Bjerg (2017) to establish a new taxonomy of money. Our properties are: issuer (central bank or other); form(electronic or physical); accessibility (universal or limited); and transfer mechanism (centralised or decentralised, ie peer-to-peer). This taxonomy reflects what appears to be emerging in practice and distinguishes between two potential types of CBCC, both of which are electronic: central bank-issued and peer-to-peer. One is accessible to the general public (retail CBCC) and the other is available only to financial institutions (wholesale CBCC). Again, a Venn diagram is useful for illustration.8 The four-ellipse version in Graph 3, which we call the money flower, shows how the two potential types of CBCC fit into the overall monetary landscape.
    Two taxonomies of new forms of currency
    In principle, there are four different kinds of electronic central bank money: two kinds of CBCCs (the shaded area) and two kinds of central bank deposits. The most familiar forms of central bank deposits are those held by commercial banks - often referred to as settlement accounts or reserves. The other form is, at least in theory, deposits held by the general public. Tobin (1987) refers to this form as deposited currency accounts (DCAs).9 So far, central banks have generally chosen not to provide DCAs.
    Universally accessible forms of money that are not issued by the central bank include (privately created) cryptocurrency, commodity money, commercial bank deposits and mobile money.10 Cryptocurrency borders CBCC given that only one of its properties differs. The other three currency forms are more removed because they are, in addition, either physical or "not peer-to-peer". A number of other forms of money are not universally accessible. Local (physical) currencies, ie currencies that can be spent in a particular geographical location at participating organisations, populate the right-hand petal of the flower. The upper left-hand petal contains virtual currencies, which are "electronic money issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community" (ECB (2012)). There is also the possibility of a private sector wholesale version of cryptocurrency. It would be transferred in a peer-to-peer fashion by means of a distributed ledger, but only between certain financial institutions.
    The money flower: a taxonomy of money
    Box B uses this taxonomy to classify different examples of money from the past, present and future according to where they would fit in the money flower. The remainder of this feature discusses the two types of CBCC in further detail and highlights some of the many issues central banks will need to consider if they ever chose to adopt them. We start with the retail variant and then turn to the wholesale one.
    Box B

    The money flower with selected examples

    Graph B fills out the money flower with examples of money from the past, present and possibly the future. Starting at the centre, we have Fedcoin, as an example of a retail CBCC. The concept, which was proposed by Koning (2014) and has not been endorsed by the Federal Reserve, is for the central bank to create its own cryptocurrency. The currency could be converted both ways at par with the US dollar and conversion would be managed by the Federal Reserve Banks.icon Instead of having a predetermined supply rule, as is the case with Bitcoin, the supply of Fedcoin would, much like cash, increase or decrease depending on the desire of consumers to hold it. Fedcoin would become a third component of the monetary base, alongside cash and reserves. Unlike Bitcoin, Fedcoin would not represent a competing, private "outside money" but would instead be an alternative form of sovereign currency (Garratt and Wallace (2016)).
    CADcoin is an example of a wholesale CBCC. It is the original name for digital assets representing central bank money used in the Bank of Canada's proof of concept for a DLT-based wholesale payment system. CADcoin has been used in simulations performed by the Bank of Canada in cooperation with Payments Canada, R3 (a fintech firm), and several Canadian banks but has not been put into practice.
    The money flower: example
    In Sweden, the demand for cash has dropped considerably over the past decade (Skingsley (2016)). Already, many stores do not accept cash and some bank branches no longer disburse or collect cash. In response, the Riksbank has embarked on a project to determine the viability of an eKrona for retail payments. No decision has yet been taken in terms of technology (Sveriges Riksbank (2017)). Hence, the eKrona is located on the border between deposited currency accounts and retail CBCCs.
    Dinero electrónico is a mobile payment service in Ecuador where the central bank provides the underlying accounts to the public. Citizens can open an account by downloading an app, registering their national identity number and answering security questions. People deposit or withdraw money by going to designated transaction centres. As such, it is a (rare) example of a deposited currency account scheme. As Ecuador uses the US dollar as its official currency, accounts are denominated in that currency.
    Bitcoin is an example of a non-central bank digital currency. It was invented by an unknown programmer who used the pseudonym Satoshi Nakamoto and was released as open-source software in 2009 along with a white paper describing the technical aspects of its design (see Box A for further details).
    PokéCoin is a currency used for in-game purchases in the Pokémon Go game and an example of a virtual currency.
    Utility Settlement Coin (USC) is an attempt by the private sector to provide a wholesale cryptocurrency. It is a concept proposed by a collection of large private banks and a fintech firm for a series of digital tokens representing money from multiple countries that can be exchanged on a distributed ledger platform (UBS (2016)). The value of each country's USC on the distributed ledger would be backed by an equivalent value of domestic currency held in a segregated (reserve) account at the central bank.
    The Bank of Amsterdam (the Amsterdamse Wisselbank) was established in 1609 by the City of Amsterdam to facilitate trade. It is often seen as a precursor to central banks. A problem at the time was that currency, ie coins, was being eroded, clipped or otherwise degraded. The bank took deposits of both foreign and local coinage at their real intrinsic value after charging a small coinage and management fee. These deposits were known as bank money. The Wisselbank introduced a book-entry system that enabled customers to settle payments with other account holders. The Dutch central bank was established in 1814 and the Bank of Amsterdam was closed in 1820 (Smith (1776), Quinn and Roberds (2014)).
    The 1934 series gold certificate was a $100,000 paper note issued by the US Treasury and used only for official transactions between Federal Reserve Banks. This was the highest US dollar-denominated note ever issued and did not circulate among the general public. It is an example of non-electronic, restricted-use, government-backed, peer-to-peer money.
    Examples of privately issued local currencies include the Bristol Pound and BerkShares, located in the right-hand petal. Stores in Bristol, United Kingdom, give a discount to people using Bristol Pounds, whereas BerkShares are purchased at 95 cents on the dollar and are accepted at retail stores in the Berkshires region of Massachusetts at face value.
    Precious metal coins are examples of commodity money. They can be used as an input in production or for consumption and also as a medium of exchange. This is in contrast to fiat money, which has no intrinsic use. Although commodity money is largely a thing of the past, it was the predominant medium of exchange for more than two millennia.
    E-gold account holders used commercial bank money to purchase a share of the holding company's stock of gold and used mobile phone text messages to transfer quantities of gold to other customers. Payments between e-gold customers were "on-us" transactions that simply involved updating customer accounts. E-gold ultimately failed. But before it shut down in 2009, it had accumulated over 5 million account holders.icon Many current private mobile payment platforms, such as Venmo(a digital wallet with social media features popular with US college students) and M-pesa™ (a popular mobile money platform in Kenya and other East African countries), employ a similar "on-us" model. Users transfer either bank deposits or cash to the operator, who gives them mobile credits. These credits can be transferred between platform participants using their mobile devices or redeemed from the operator for cash or deposits. The daily number of M-pesa transactions dwarfs those conducted using Bitcoin. However, in terms of value, worldwide Bitcoin transfers have recently overtaken those conducted on the M-pesa platform (Graph 1, right-hand panel).
    icon Straightforward arguments derived from Friedman (1959) and Klein (1974) suggest that if the Federal Reserve were to maintain one-to-one convertibility with Fedcoin, it would also need to control the supply of Fedcoins.icon The company ran into trouble with the authorities over anti-money laundering violations and for operating a money transmitter business without the necessary state licence; see http://legalupdate.e-gold.com/2008/07/plea-agreement-as-to-douglas-l-jackson-20080721.html. E-gold account statistics can be found at http://scbbs.net/craigs/stats.html.

    Retail central bank cryptocurrencies

    Retail CBCCs do not exist anywhere. However, the concept of a retail CBCC has been widely discussed by bloggers, central bankers and academics. Perhaps the most frequently discussed proposal is Fedcoin (Koning (2014, 2016), Motamedi (2014)).11 As discussed in Box B, the idea is for the Federal Reserve to create a cryptocurrency that is similar to bitcoin. However, unlike with bitcoin, only the Federal Reserve would be able to create Fedcoins and there would be one-for-one convertibility with cash and reserves. Fedcoins would only be created (destroyed) if an equivalent amount of cash or reserves were destroyed (created) at the same time. Like cash, Fedcoin would be decentralised in transaction and centralised in supply. Sveriges Riksbank, with its eKrona project, appears to have gone furthest in thinking about the potential issuance of a retail CBCC (Box C).
    A retail CBCC along the lines of Fedcoin would eliminate the high price volatility that is common to cryptocurrencies (Graph 1, centre panel).12 Moreover, as Koning (2014) notes, Fedcoin has the potential to relieve the zero lower bound constraint on monetary policy. As with other electronic forms of central bank money, it is technically possible to pay interest on a DLT-based CBCC. If a retail CBCC were to completely replace cash, it would no longer be possible for depositors to avoid negative interest rates and still hold central bank money.
    Any decision to implement a retail CBCC would have to balance potential benefits against potential risks. Bank runs might occur more quickly if the public were able to easily convert commercial bank money into risk-free central bank liabilities (Tolle (2016)). There could also be risks to the business models of commercial banks. Banks might be disintermediated, and hence less able to perform essential economic functions, such as monitoring borrowers, if consumers decided to forgo commercial bank deposits in favour of retail CBCCs. These benefits and costs are, however, not unique to retail CBCCs. They are the same for DCAs. What, then, is the key difference between retail CBCCs and DCAs? The answer lies with the peer-to-peer aspect of CBCCs and, more specifically, with anonymity.

    Anonymity

    Bitcoin was designed to be a "peer-to-peer version of electronic cash" (Nakamoto (2009, p 1), and this allows transactions to be anonymous. All bitcoin transactions are publicly recorded using the payer's and the payee's public addresses.13 However, very much like e-mail addresses, bitcoin public addresses do not need to reveal the true identity of users.14 This means that a person sending bitcoin to a public address need not reveal his/her true identity to the recipient (counterparty anonymity) or to other members of the Bitcoin community (one form of third-party anonymity).15
    Box C

    The case of Sweden

    Sweden has one of the highest adoption rates of modern information and communication technologies in the world. It also has a highly efficient retail payment system. At the end of 2016, more than 5 million Swedes (over 50% of the population) had installed the Swish mobile phone app, which allows people to transfer commercial bank money with immediate effect (day or night) using their handheld device (Graph C, left-hand panel; see also Bech et al (2017)).
    The demand for cash is dropping rapidly in Sweden (Graph C, right-hand panel). Already, many stores no longer accept cash and some bank branches no longer disburse or collect cash. These developments are a cause for concern for the Riksbank (Skingsley (2016)). Will the payment system continue to be safe and efficient without cash? Even if cash is not used every day, it is a backup option in crisis situations. Will those without access to bank services still be able to manage their payments?
    The Riksbank currently has a so-called eKrona project under way to determine whether it should supply digital central bank money to the general public. The project is considering different technical solutions, but no decision has been taken as to whether to focus on a DCA or a retail CBCC structure. The project is expected to be finalised in late 2019 (Sveriges Riksbank (2017)).
    Sweden
    Kahn et al (2005) and McAndrews (2017) emphasise legitimate reasons for counterparty anonymity in transactions. Payees and payers may want to reduce the risk of identity theft, the possibility that the counterparty might follow them home and rob them, or more innocuous annoyances like directed advertising and solicitations (spamming). Similarly, a lack of third-party anonymity may be regarded as revealing too much information about a person's private activities. In his proposal for Digicash, David Chaum (1983) makes this argument by pointing out that "knowledge by a third party of the payee, amount, and time of payment for every transaction made by an individual can reveal a great deal about the individual's whereabouts, associations and lifestyle".16
    Counterparty anonymity seems less controversial than third-party anonymity. Many observers have argued that third-party anonymity in payments should not be allowed because it facilitates criminal activity, such as tax evasion, terrorist financing or money laundering. Rogoff (2016) argues that $100 bills should be removed from circulation for the same reasons.
    It is unclear how much consumers actually value anonymity of either sort in order to protect their privacy. Athey et al (2017) look at how much effort people make to protect their privacy in relation to digital currencies. In an experimental setting, they find that subjects, in general, do not devote the small amount of time needed to read through the e-wallet description that is necessary to meet their own stated preferences for privacy. Similar findings emerged from a survey of economics students at the University of California, Santa Barbara, on usage of Venmo (a digital wallet with social media features). Of the 669 respondents, 80% were users. Of these users, 44% allowed their Venmo transactions to be public (visible to everyone on the internet) and another 21% allowed all of their Facebook friends to see their transactions. Finally, while Digicash is regarded as a precursor to bitcoin, there may not have been sufficiently high demand for the third-party anonymity it provided as it was never widely adopted. It filed for bankruptcy in 1998.17
    The technology behind CBCCs could allow central banks to provide a digital cash substitute with anonymity properties similar to those of cash. In its role as issuer, the central bank would need to decide whether or not to require customer information (the true identity behind the public address). This would determine the extent to which the retail CBCC would provide third-party anonymity.
    While it may look odd for a central bank to issue a cryptocurrency that provides anonymity, this is precisely what it does with physical currency, ie cash. Perhaps a key difference is that, with a retail CBCC, the provision of anonymity becomes a conscious decision. It is worth recalling that the anonymity properties of cash are likely to have emerged out of convenience or historical happenstance rather than intent.

    Wholesale central bank cryptocurrencies

    While CBCCs for retail payments remain at the conceptual stage, some central banks have completed proofs of concept for DLT-based applications.18 One of the reasons for the interest in DLT is that many central bank-operated wholesale payment systems are at the end of their technological life cycles. The systems are programmed in obsolete languages or use database designs that are no longer fit for purpose and are costly to maintain.

    Projects Jasper and Ubin

    Project Jasper at the Bank of Canada (Chapman et al (2017)) and Project Ubin at the Monetary Authority of Singapore (MAS (2017)) simulate real-time gross settlement (RTGS) systems on a DLT platform. In an RTGS system, payments are processed individually, immediately and with finality throughout the day (CPSS (1997)).
    Unlike the retail payment applications discussed above, wholesale systems have restricted access, ie they are permissioned rather than permission-less. Usually, access is restricted to financial institutions. Moreover, the costly proof-of-work validation (Box A) needed to prevent double-spending in retail schemes is replaced by less energy-consuming alternatives, such as a trusted notary (eg the central bank).
    A key challenge in any CBCC application is how to transfer central bank money to the distributed ledger.19 Both Jasper and Ubin chose a digital depository receipt (DDR) approach. A DDR is a claim on central bank reserves held in a segregated account against which the central bank issues digital tokens on the distributed ledger. In Jasper, the digital tokens - initially known as CADcoins20 - are created at the beginning of the day and redeemed at the end. In Ubin, banks acquire or redeem digital tokens at any point during the day and can keep them on the distributed ledger overnight. Hence, transfers on the DLT platform of the Singaporean proof of concept are not restricted to the opening hours of MAS.
    Project Jasper also implements a liquidity-saving mechanism (LSM) on the DLT platform. While RTGS systems minimise settlement risk, they can be demanding in terms of liquidity. Consequently, many RTGS systems around the world are augmented by mechanisms that periodically seek to offset payments against each other in a queue and settle only the net amounts (Bech and Soramäki (2001)). Distributed ledgers are decentralised, so implementation of a centralised queue requires a clever work-around (Project Jasper (2017)).
    The two projects show that central bank money can be transferred on a distributed ledger in real time, in realistic volumes and with an LSM. Nevertheless, none of the current initiatives to update or replace existing wholesale payment systems are considering the adoption of DLT. Both the Bank of England (2017) and Bank of Canada (Ho (2017)) conclude that DLT is not yet mature enough for current adoption. Yet most central banks that are considering modernising their core payment infrastructure stress the need to make new systems inter-operable with future DLT platforms.

    Securities settlement

    Looking beyond the immediate horizon, many industry participants see significant potential for DLT to increase efficiency and reduce reconciliation costs in securities clearing and settlement.21 One potential benefit of DLT-based structures is immediate clearing and settlement of securities, in contrast to the multiple-day lags that currently exist when exchanging cash for securities (and vice versa).22 Progress in this direction was recently achieved by a joint venture between the Deutsche Bundesbank and Deutsche Börse, which developed a functional prototype of a DLT-based securities settlement platform that achieves delivery-versus-payment settlement of digital coins and securities (Deutsche Bundesbank (2016)).

    Conclusion

    As it stands, cash is the only means by which the public can hold central bank money. If someone wishes to digitise that holding, he/she has to convert the central bank liability into a commercial bank liability by depositing the cash in a bank. A CBCC would allow consumers to hold central bank liabilities in digital form.23 But this would also be possible if the public were allowed to have central bank accounts, an idea that has been around for a long time.24 We argue that the main benefit that a consumer-facing retail CBCC would offer, over the provision of public access to (centralised) central bank accounts, is that the former would have the potential to provide the anonymity of cash. In particular, peer-to-peer transfers allow anonymity vis-à-vis any third party. If third-party anonymity is not of sufficient importance to the public, then many of the alleged benefits of retail CBCCs can be achieved by giving broad access to accounts at the central bank.
    Whether or not a central bank should provide a digital alternative to cash is most pressing in countries, such as Sweden, where cash usage is rapidly declining. But all central banks may eventually have to decide whether issuing retail or wholesale CBCCs makes sense in their own context. In making this decision, central banks will have to consider not only consumer preferences for privacy and possible efficiency gains - in terms of payments, clearing and settlement - but also the risks it may entail for the financial system and the wider economy, as well as any implications for monetary policy (Bordo and Levin (2017)). Some of the risks are currently hard to assess. For instance, at present very little can be said about the cyber-resilience of CBCCs, something not touched upon in this short feature.

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    1 The views expressed in this article are those of the authors and do not necessarily reflect those of the BIS. We thank Claudio Borio, Stijn Claessens, Benjamin Cohen, Dietrich Domanski, Hana Halaburda, Krista Hughes, Jochen Schanz and Hyun Song Shin for comments as well as Aleksander Berentsen, James Chapman and Paul Wong for insightful discussions. We are grateful to Codruta Boar for excellent research assistance.
    2 See Andolfatto (2015, 2016), Broadbent (2016), Raskin and Yermack (2016) and Skingsley (2016).
    3 The purest form of peer-to-peer transaction is a cash exchange. On a computer network, the peer-to-peer concept means that transactions can be processed without the need for a central server.
    4 It is common to divide payments into retail and wholesale segments. Retail payments are relatively low-value transactions, in the form of eg cheques, credit transfers, direct debits and card payments. By contrast, wholesale payments are large-value and high-priority transactions, such as interbank transfers. The distinction might become less relevant in a world with CBCCs. In that case, our usage would reflect the types of payment primarily targeted by CBCCs.
    5 The report's title is Digital currencies, but it notes that such schemes are frequently also referred to as "cryptocurrencies", reflecting the use of cryptography in their issuance and their validation of transactions.
    6 Cryptocurrencies have no intrinsic value and are only held in the belief that they might be exchanged for goods or services at a later point in time.
    7 In the Middle Ages, payments at times required the services of a money changer to assay and value the coins being used.
    8 A four-circle Venn diagram covers only 14 of the 24 = 16 possible combinations. Hence, in the case of four sets, Venn (1881) suggested using ellipses in order to show all cases.
    9 In a 1987 speech, Nobel laureate James Tobin argued that, in order to avoid relying too heavily on deposit insurance to protect the payment system, central banks should "make available to the public a medium with the convenience of deposits and the safety of currency, essentially currency on deposit, transferable in any amount by check or other order" (Tobin (1987, p 6); see also Tobin (1985)). That is, people should be able to store value without being subject to the risk of bank failure.
    10 Mobile money is an electronic wallet service that allows users to store, send and receive money using their mobile phones. The value stored in the wallets may be liabilities of the service provider or claims on money held in trust at a commercial bank.
    11 The Federal Reserve has not endorsed or officially commented on the proposal.
    12 See Yermack (2015), Bolt and van Oordt (2016) and Garratt and Wallace (2016) for discussions relating to digital currencies and price volatility.
    13 Luther and Olson (2015) argue that bitcoin is a practical application of what is termed "memory" in the monetary economics literature. Kocherlakota (1998) shows that both money and memory are devices capable of facilitating exchange. Memory can, however, implement more allocations than money, so that money can be viewed as a form of memory but not the other way around.
    14 See Nakamoto (2009, Section 10).
    15 Third-party anonymity means that a person's true identity is not revealed to anyone not directly involved in a transaction. In more general applications, this would include a system operator.
    16 Digicash was launched in the 1990s as a means of transferring bank deposits from one customer to another without revealing the payer's identity to his/her bank (ie it provided third-party anonymity). It did this by using cryptographic techniques to create a pool of untraceable Digicash from customer deposits. Digicash is interesting in that it provided third-party anonymity without requiring autonomy from commercial banks. Commercial banks still held and transferred the deposits held by customers using the Digicash scheme.
    17 One potential reason for its lack of success is that it did not provide autonomy from a central authority. Nick Szabo's proposal for "bit gold" offers an autonomous version of e-gold that uses proof-of-work chains. Bit gold represents a big step in the evolution of digital cash towards bitcoin (https://unenumerated.blogspot.ch/2005/12/bit-gold.html).
    18 Central banks have not limited themselves to wholesale payment applications of DLT. The Hong Kong Monetary Authority (HKMA) has developed proofs of concept for trade finance and mortgage loan applications in collaboration with industry participants (HKMA (2016)). The Bank of France has developed a DLT version of its Single European Payments Area (SEPA) Creditor Identifier database (Bank of France (2016)).
    19 The CPMI-IOSCO Principles for Financial Markets Infrastructures hold that settlement should occur in central bank money whenever practical and available.
    20 See Garratt (2016).
    21 Mainelle and Milne (2016) estimate that synchronised share databases can reduce back office costs by up to 50%. A study led by Santander InnoVentures (2015) estimates that $15-20 billion could be saved annually in the broader banking industry.
    22 Through the use of smart contracts, the technology also allows for the settlement time/date of a transaction to be specified by the relevant parties.
    23 One simple reason why a consumer might want to do this is to avoid the credit risk associated with commercial bank liabilities.
    24 Who should and should not have access to central bank money is a recurring policy issue. See CPSS (2003), CGFS (2015) and Bank of England (2017) for more detailed discussions.
    Posted: September 24, 2017, 7:04 pm
    What’s next? A unicorn captured in Tennessee? The world I grew up in has changed. American Universities are handing out Play-Doh to comfort distraught liberals and “Never Trump” students. Protestors defaced a Thomas Jefferson statueat the University of Virginia due to his slave ownership. Race baiters attacked Hobby Lobby for displaying raw cotton in vases. The P.C. Police have continually demonstrated their desire to attack the America many of us love.
    Now, the snowflake class is writing articles stating Ron Paul – the former Texas congressman that made a career out of criticizing bloated defense budgets and hawkish foreign policy decisions – is shilling for the defense industry. Their “evidence” is that he received five-year-old campaign contributions from some employees of Boeing and Lockheed Martin, which they falsely credited with coming directly from the companies themselves.
    Dr. Paul’s alleged wrongdoing was writing an op-ed mildly critical of Elon Musk, a government subsidy-eating machine and poster boy for left-wing environmental causes.
    In the article, Paul, an Air Force veteran, expressed his opposition to Section 1615 of the National Defense Authorization Agreement (NDAA), which many speculate was written with the congressional intent of quietly extinguishing all serious competition to Musk’s SpaceX.
    Section 1615 would bar the Air Force from funding any new launch vehicles. Coincidentally, in just a few short years, there will only be one established launch vehicle left in the marketplace -- Musk’s SpaceX.
    If the NDAA is passed as is, it will stay that way for a long while.
    Talk about a get-rich quick scheme.
    This provision has the potential of putting a lot of taxpayer money in Elon Musk’s already fat pockets. As Dr. Paul already noted, “government contracts account for about 70 percent of SpaceX’s contracts. U.S. taxpayers have provided SpaceX more than $5.5 billion in the form of Air Force and NASA contracts.” Should Section 1615 be passed by the Senate today, that percentage will likely increase exponentially.
    The P.C. Police are easy prey for the cult of personality that is Elon Musk. They reject even the possibility of Musk, one of their heroes having ulterior motives – whether it’s support of the carbon tax, support for the Paris Accords which he indirectly profits from, or now – you guessed it – possibly pushing 1615 through to passage.
    Since 2003, Musk has given over $500,000 to Washington politicians, almost evenly split between Republicans and Democrats. SpaceX has even handed money to lobbying firms to work on pushing through past NDAAs, which contained language that would have seemingly benefitted his company – including expediting the already-planned-on government Russian engine ban, which SpaceX’s only serious competitor relies on.
    All this Washington meddling is really sad when considering that the whole beauty of SpaceX’s founding was how it cut into what was once the unchecked market share of an industry giant and proceeded to cut costs by sizeable margins. Now, the founder of that same company may be working to bring the industry back to its glum past -- muscling out not just established veterans. Musk has shown himself to be a merciless competitor, claiming scalps throughout the industry and even not ruling out martians’ interference for his failures.
    Musk’s blogging army points to how Section 1615 still allows for the funding of new rocket engines as push back that it will create a de facto SpaceX monopoly, claiming that it will keep his Russian engine-dependent revival afloat. And it might – on paper. But, as Pentagon officials have said time and time again, replacing the engine will lead to significant cost increases, making Musk’s company the only affordable option left for use in the United States.
    Even if 1615 didn’t jeopardize the security of established market participants, would that make it an admirable provision? Is that what the followers of Musk, the so-called free market visionary, have resorted to -- keeping the status quo intact, but shutting the door on anyone else that may come next? 
    The Musk followers see no wrong in their leader. He is the man that has promised to take them to the stars. He can do no wrong.
    The Trump administration agrees with Dr. Paul, saying 1615 would “restrict development of new space launch systems, including those whose development is significantly funded by industry … [limiting] domestic competition, which will increase taxpayer costs by several billions of dollars through FY 2027 and stifle innovation.”
    Dr. Paul is the antithesis of a crony. It’s as absurd as believing a craft store is racist for publicly displaying cotton arrangements. It’s time for the Musk sycophants, and the rest of the P.C. police, to take a step off Fantasy Island.  If anyone is a risk to America’s national security, it’s Elon Musk, not Dr. Paul.

    http://www.zerohedge.com/news/2017-09-18/elon-musk-sycophants-attack-ron-paul-shill-defense-industry 
    Posted: September 18, 2017, 8:16 pm
    (GLOBALINTELHUB.COM) — 9/14/2017 — Trading is difficult, if it were easy there would be no losers – in order for there to be winners in markets, there have to be losers.  But trading is not impossible, and Wall St. has developed an industry out of it called “money management” which is effectively conservative trading.
    But sometimes there are companies who simply mislead investors in to thinking that trading is easy, and these guys ‘putting golf clubs in their Porsche trunks’ simply discovered the ‘secret’ of life that it’s possible to click click click and get millions.  As hundreds of customers discovered, trading is not that easy.
    forex
    NFA orders Chicago, Ill., introducing broker Kingsview Futures LLC to pay a $50,000 fine
    September 14, Chicago—NFA has ordered Chicago, Ill., introducing broker Kingsview Futures LLC to pay a $50,000 fine.
    The Decision, issued by an NFA Hearing Panel, is based on a Complaint authorized by NFA’s Business Conduct Committee (BCC) and a settlement offer submitted by Kingsview Futures.
    The Hearing Panel found that Kingsview Futures failed to diligently supervise its operations and activities.
    The complete text of the Complaint and Decision can be viewed on NFA’s website.
    Reading NFA complaints is always interesting.  Here’s the highlights:
     217 Kingsview Futures customers with self-directed accounts traded in 2015.
    203 of these customers (or 9 %) incurred total losses that exceeded $1.9 million.
    More than 70% of the customers experienced losses exceeding $1,000, and
    approximately 10% of them experienced losses exceeding $20,000. One
    customer’s losses exceeded $225,000. In contrast, thirteen customers reported
    gains in 2015, and only three of them had net profits exceeding $1,000. During
    the same period, Kingsview Futures made commissions totaling more than
    $208,000 from these customers.
    235 Kingsview Futures customers with self-directed accounts traded in 2014.
    226 of these customers (or 96%) incurred total losses of more than $1.5 million.
    They claim that FX is the ‘risky market’ where 95% of traders lose.  At Oanda, 51% of customer accounts are profitable.
    In any event, it’s always sad to see customers pay for something like ‘training and education’ lured by videos with private planes and fancy cars, and then to lose money.  Trading futures is really difficult.  Training and education isn’t always sufficient to make you a trader.  In fact, traders who go through ‘real’ training often don’t succeed.
    As we’ve said often, FX provides a lot of opportunity for algorithmic systems – trading FX yourself, futures included – is nearly impossible.
    Stick to a system or manager with a track record.  That doesn’t guarantee success of course, but it at least puts you in the spectrum of statistically possible success.
    Posted: September 14, 2017, 8:08 pm
    (GLOBALINTELHUB.COM) — 9/9/2017 As Hurricane Irma approaches US borders, investors should note the forces of the ‘invisible hand’ in nature and not only in markets.  As we explain in our groundbreaking work Splitting Pennies, the financial markets are not ‘as seen on TV’ and in fact, are the subject of constant manipulation, and this storm is no exception.
    Weather Modification technology is simple and has been around for a long time, starting with the use of dry ice, evolving to use of ‘supersonic booms’ and finally aerosols.  The Pentagon has technologies that are far, far, far more advanced than weather modification.   See an extensive list of weather modification patents here.
    The amount of evidence is overwhelming (of course they do not broadcast this on TV, but they have a profit motive, we’ll get to that) and some groups such as geoengineeringwatch.org have toiled to create a resource, summarized by this video here:
    forex
    Hurricane Harvey brought an abrupt and catastrophic end to the 12 year long major hurricane landfall drought in the US. Were climate engineering programs a factor in the Harvey disaster scenario? Available data has already made clear the answer is yes. How much decimation will the manipulation of Hurricane Irma inflict? The US government has been actively engaged in hurricane modification programs for a minimum of 70 years, historical documents prove this fact conclusively. Yet, the power structure controlled circles of academia (and corporate media) continue to fuel total denial of the climate engineering hurricane modification reality, this should not be a surprise. How much decimation have global geoengineering / weather warfare programs already caused? What are the primary objectives and agendas? How much worse will it get? The short video below provides verifiable data to confirm that climate engineering is a reality, and exposes some of the primary objectives.

    Exposing and halting the ongoing climate engineering / weather warfare / biological warfare assault is the great imperative of our time. The best chance we have of accomplishing this monumental task is by raising an army of the awakened, by reaching a critical mass. 
    Is it really so hard to believe, that the military has the power to control hurricanes?  Anyone who is either in the military or who ‘does business’ with the military knows this and that compared to some of the other fun toys the military has controlling the weather is easy.  Much of the known info about weather modification comes from HAARP but HAARP has closed what they have now is far more powerful:
    Environmental modification techniques have been applied by the US military for more than half a century. US mathematician John von Neumann, in liaison with the US Department of Defense, started his research on weather modification in the late 1940s at the height of the Cold War and foresaw ‘forms of climatic warfare as yet unimagined’. During the Vietnam war, cloud-seeding techniques were used, starting in 1967 under Project Popeye, the objective of which was to prolong the monsoon season and block enemy supply routes along the Ho Chi Minh Trail.
    The US military has developed advanced capabilities that enable it selectively to alter weather patterns. The technology, which is being perfected under the High-frequency Active Auroral Research Program (HAARP), is an appendage of the Strategic Defense Initiative – ‘Star Wars’. From a military standpoint, HAARP is a weapon of mass destruction, operating from the outer atmosphere and capable of destabilising agricultural and ecological systems around the world.
    The technology clearly exists, but as it is ‘classified’ having any smoking gun evidence without a Snowden whistleblower is impossible; it’s a paradox, as evidence by CIA’s FOIA request if they are investigating us:
    This really is an intelligence agency, their logic is impeccable.  They cannot confirm or deny if information does or does not exist.  So let’s go with what we know.
    NOAA is the official US Government agency that monitors the weather, and provides official information at nhc.noaa.gov – anyone from Florida knows this URL and has gone through the agonizing wait for the next update which can mean a big change of plans.
    Like most of the US Government, it’s actually not ‘NOAA’ that provides us this valuable data it’s Raytheon, black ops corporate master – the largest defense contractor in the world, with 60,000 + employees and a market cap of 50 Billion.  See their product info here, and their interesting note in bold: 
    Owned and operated by NOAA, JPSS is an “end-to-end” system that includes sensors; spacecraft; command, control and communications; data routing; ground based processing and dissemination of weather data to users around the globe, such as NOAA’s National Weather Service and the National Hurricane Center. The data provided by Suomi NPP and the JPSS satellites contribute to NASA’s study of earth climate trends.
    JPSS polar orbiters carry a complement of advanced imaging and sounding sensors, which increase NOAA and DoD capabilities to monitor the entire planet and produce weather and climate predictions at a much higher fidelity and frequency. These advanced capabilities enable NOAA to better fulfill its mission to protect lives and property by increasing the timeliness and accuracy of public warnings and forecasts of weather and climate events.

    JPSS CGS DELIVERS CRUCIAL DATA FOR NATIONAL WEATHER FORECASTS

    Raytheon brings more than four decades of high-availability, reliable, precision-based, command-and-control systems experience to Suomi NPP and future JPSS missions. Suomi NPP is the bridge between existing polar-orbiting satellites and the launch of JPSS-1, scheduled for 2017. Providing critical data for Earth observation, Suomi NPP data is used to generate environmental data products, such as measurements of clouds, vegetation, ocean color and land and sea surface temperatures — all significant inputs to improve weather forecasting capabilities.

    VALUE TO THE PUBLIC

    While Suomi NPP and JPSS will not prevent severe weather events such as hurricanes, tornadoes or blizzards from occurring, Raytheon’s advanced technologies enable meteorologists and forecasters to make more timely and accurate weather predictions that support NOAA’s “Weather Ready Nation” campaign and help save lives, protect property and decrease the devastating economic impacts caused by severe weather.
    Raytheon’s proven radars and sensors work together to help experts see further, track longer and prepare smarter.
    Our Air and Missile Defense Radar stacks together like building blocks to increase detection ranges and accuracy on naval destroyers. Our VIIRS sensor — famously known for its ”Blue Marble” photo of Earth — orbits the planet to provide meteorologists with unparalleled environmental data. And our Multi-Spectral Targeting System combines lasers with infrared sensors to enable pinpoint military operations.
    Raytheon Company is a technology company, which specializes in defense and other government markets. The Company develops integrated products, services and solutions in various markets, including sensing; effects; command, control, communications, computers, cyber and intelligence; mission support, and cybersecurity. The Company operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS), and Forcepoint. The IDS segment develops and produces sensors and mission systems. The IIS segment provides a range of technical and professional services to intelligence, defense, federal and commercial customers. The MS segment is a developer, integrator and producer of missile and combat systems. The SAS segment is engaged in the design, development and manufacture of integrated sensor and communication systems for missions. The Forcepoint segment develops cybersecurity products.
    Interestingly, a small uptick on Irma.  For the uninformed, a hurricane is a military operation however you look at it, in the aftermath when there’s no power, only the military (and in partnership with FEMA) has the logistic resources to swoop in and restore order.  During Hurricane Andrew strange rumors persisted about the quarantine and control of information that the Army imposed around the devastated areas.  This is a great resource with photographic evidence, and they suggested that even it may have contributed to George Bush losing the election later that year.  The government seemed helpless to do anything to battered Miami.  And it was after Andrew that Hurricane manipulation efforts went into overdrive.
    So why now, after so long with no major hit to Florida?  Are they gunning for Trump?  Or Trump ordered it, to distract the population from what’s really going on and as a means of control?  (Remember that the one strong power Trump has is leader of the Military, the US President has almost no political power).  We’ll never know.. but let’s look at the big picture.
    After World War 2 the US “Military Industrial Complex” or “Iron Triangle” (Government, Defense Contractors, Wall St.) hasn’t really had an enemy.  Hitler and Japan were real enemies, although funded and allowed to grow by US companies, the fact remains that if Hitler wasn’t stopped we’d all be speaking German and eating poor tasting frankfurters and drinking beer.  WW2 was the peak of show of industrial power and how factories could make bombs that would destroy infrastructure.  The “Marshall Plan” and other post WW2 economic plans led the intellectual Elite (who were hired by the now rich military contractors) to create several doctrines that would keep them in business with or without an enemy (with all the happiness of the 50’s they probably thought – what if there is no more Hitler?  How will we make money?  War is good for business… ) hence we have the Report from Iron Mountain MUST READ BOOK  – to explain plainly, companies like RAND corporation have created enemies most notably “Russia” and most recently “Terrorists” but their plan is so deep, they are not to rely on a single artificial enemy, so they resort to the most basic Earth element, the weather.  What does this mean?  A group of scientists hired by these corporations post WW2 (you can call them pseudo economists) created studies and reports showing that investing $1 in the Military equalled $2 in economic output.  This is the most ridiculous and twisted thinking, based on this logic if we firebomb Los Angeles we’ll be the richest economy in the world.  But remember, twisted or not – this is their doctrine.  A great example of this in practice was during the Ford days when the CIA was tasked with the job of collecting intelligence on Russia – did they pose a security threat to the United States?  The CIA found no evidence of any capability sufficient of posing even a limited threat, nor any motive or evidence of irrational intent to attack the US or any other country (and Russia has a history of never invading any country- only defending themselves).  This report was released and Donald Rumsfeld famously retorted that “Just because the CIA didn’t find any weapons doesn’t mean that they don’t exist” – Rumsfeld went on to make a fortune consulting for defense contractors.  During this period one General really believed the Russians were hiding a missile base on the dark side of the moon.  The US Military is big business, and business is good.  But threats change and the battlefield changes.  Contractors, planners, developers, and many others will make a fortune rebuilding South Florida.  And it’s a lot closer than Iraq.  And heck, is it really so bad?  Raytheon (RTN) employs 60,000 people and the US Government itself is the largest employer in the world.  People need to put food on their families (-George W Bush).

    There’s a number of reasons humans would want to control the weather:
    • To make it rain
    • For military purposes
    • Pollution control
    • Terraforming (For example what they are doing in UAE)
    So what are the ‘known’ applications of weather modification?  Cloud Seeding, and Terraforming in UAE:
    Cloud seeding is the opposite of cloud busting. For one thing, it’s a real thing. The process has been replicated numerous times both in the lab and in the field and is backed up by years of peer-reviewed scientific research. For another, it impregnates clouds to instigate the precipitation process rather than magically gathering them using dark energies.  Cloud seeding is currently used all over the world—including throughout the United States, China (where it is used to clear smog in Beijing), India, and Russia—to enhance precipitation, both rain and snow, while inhibiting hail and fog. And it actually works.

    The UAE’s Ionizers: Tearing the Sky a New One

    The United Arab Emirates is a land rich in wealth but poor in precipitation. That’s why president Sheikh Khalifa bin Zayed Al Nahyan has had the nation’s top scientific minds secretly toiling for years to create a new means of weather manipulation that would work more effectively in the region’s extreme temperatures. The result: The biggest Ionic Breeze on Earth.
    Ionic Breeze devices are giant ionizers mounted atop tall steel poles and were built by the Swiss company, Metro Systems International. The devices generate massive ionic fields, positively charged ions ground back to the Earth while the negatively charged ions rise into the atmosphere. As they rise, the negative ions (electrons) collect particles of dust on the way up. These flecks act as seeds for ice crystal formation, much as silver iodide does except without the need for clouds. As long as the atmospheric humidity is at least 30 percent, the system supposedly works even in clear skies.
    In the summer of 2010, 100 such emitters were spread over five sites in the Al Ain region. During July and August alone, when the area typically receives zero rainfall, it reportedly rained on 52 separate occasions, often with gusting winds and sometimes hail. The Max Planck Institute for Meteorology monitored the project and backed the study’s findings. This could be huge for the Middle East, where water is often in short supply and desalinization plants are nine-figure investments (and another eight-figures a year to run). The ionizers reportedly only cost $10.5 million to build and $8.9 million a year to operate.
    $10 Million to make it rain, literally.  So what does a multi-billion dollar black budget get us in USA?  Think about the positive economic impact of Hurricanes for a moment, such as the obvious Billions in rebuilding and reconstruction projects.  But there’s also a political benefit and military benefit, the military can test their logistics and new non-lethal crowd control weapons, as well as the general population control (those evacuating south Florida are not likely to participate in right wing anti-government protests, for example).  Confuse, obfuscate, and conquer has been the mantra of the world’s leading Elite for centuries “Divide and Conquer” – and there’s no better Fog of War than a Hurricane most intelligently because 90% of the population will not believe that it’s controlled.  It’s pure genius.
    There’s not any proof that this is manufactured or controlled, but like many things with the government – if they have spent millions developing weather modification technology including Hurricane manipulation technology (both to create Hurricanes and divert Hurricanes or weaken them) – what are they doing with it if not using it?  Clearly, there have been strange phenomenon at play in the region over the past 20 years that are not explainable as ‘Global Warming’ – which would mean more frequent stronger storms, not a 20 year + lull.
    Traders from FL enjoyed the free money Lowes and Nov FCOJ pop that always comes with a slight delay after the announcement that a storm is headed for central FL where the majority of Orange Juice is grown.  But this is really a perception trade, as OJ is grown in many places around the world and the increase in Lowes purchases are not really relevant.  Also note that unlike other disasters, there are usually few human casualties in Hurricanes.  Remember even during Katrina, it was only the people who refused to evacuate that were trapped on rooftops, and even they were mostly saved.  It’s not as if the Military is ‘killing’ people – although that IS what they do during WAR (including US Citizens, not only the enemy).
    What is the conclusion of this information, simply that:
    • The weather is controlled, USG owns the tech for years, this is likely organized by Raytheon (RTN) although there’s no public information to prove this (it’s classified)
    • There can be political motivations for storms, for hitting or not hitting populated rich areas like Miami or Tampa.  There is a clear economic and military benefit to such operations as PsyOps and as logistic tests of population control, i.e. FEMA camps and other new systems to be tested
    Finally, there’s an elephant in the room – the bubble of bubbles.. South FL real estate.  There’s literally groups of investors waiting for the big crash to come, but no one is buying – there isn’t panic selling yet, but there is a glut of Miami real estate.  Investors are so called ‘hot money’ from foreigners who have never been to Miami but think it’s a good solid investment because real estate ‘always goes up’ – but the city of Miami is spending $500 Million to build levees and dams Dutch style around low lying areas.
    After this event no matter how small the damage, it will do much bigger damage to the perception of FL real estate.  Many investors will now think twice about FL as the golden ticket to USA investing success.  FL residents damaged by the storm, many of them will take their checks and move to higher, more defensible ground.  Suddenly, with one storm, the argument of Preppers in the Cumberland Plateau all makes sense.  Real Estate in the mountains just doubled in value.
    All the development in South FL is based on one axiom – no Hurricanes.  The same could be said about Los Angeles and Earthquakes.  But there are thousands of places in USA with reasonable property values that have no natural disasters, but they aren’t good ‘locations’ in ‘trendy’ places.  Of course if you work online or from home then it doesn’t matter where you live, so it would be logical to choose such a place vs. the over inflated FL which is a disaster zone.  Although New York City is also on the ocean, NYC is mostly built on bedrock and has elevations as high as 33 feet, comparing with Miami’s 6 feet, that’s a big difference.  FL is a big swamp mostly that was turned upside down by developers.  Unlike cities that formed by natural geo-politics and economics, Miami and most of FL is an artificial construct like Las Vegas.  The point is that it was poor investment decisions leading to a mass of capital flooding the development of FL but this will stop likely or slow down to a trickle after this storm.  A giant wall could be erected around the state but at what cost?  All of these hidden costs and risks are now exposed as realities, and we will see how the re-insurers handle failing insurers already suffering from Harvey.
    The positive effect on the markets is that these storms will likely pop the first and possibly the biggest real estate bubble which is the most frothy, south FL.  That’s because unlike other markets, FL doesn’t have such a robust ‘natural’ industry, as for example seen in Chicago or San Francisco.  In fact real estate is an industry in itself in FL and something like 60% of home ownership is by vacationers.  Money will flow elsewhere, into other projects, and investors will think different.
    The reason is simple – it’s one thing to ‘tell’ someone that the market is going to crash, or Miami is sinking into the sea, but having a devastating event happen, going through the process whatever your involvement in FL (As Jimmy Buffett says, everyone has a cousin in Miami).. this event will change your thinking about FL investing and doing business.  Miami was a happy sleepy beach town before this boom, alligators and old folks and flamingoes.
    Markets are manipulated, storms are too.  So what?  We live in a fake world with fake people who stare into a Fake book.  If you’ve read through this article you should congratulate yourself and take pride in knowing you are part of the real one percent, the one percent that understands how the world really works; the real global elite – the emergent intelligentcia.
    If you want a deeper understanding how this can impact your investing, checkout Splitting Pennies and learn how basically everything is manipulated for profit, as a business.  If in Shakespeare’s time ‘the world is a stage’ – now the world is a ‘platform’ to launch new products.  Welcome to the real New World Order.

    REFERENCE ARTICLES

    Posted: September 10, 2017, 3:15 am
    (Elite E Services) — 9/1/2017 — As we have explained in our book Splitting Pennies – trading FX is nearly impossible; or at least, it may be possible for some time, but in the long run, it’s a near certainty that without the use of professional algorithmic trading systems you will blow up your account.  That’s because of the dynamics of how FX works vs. other markets.  In traditional markets, there is a bias towards positive movement; all CEOs of public companies want their stock to go higher.  Bull traders, 401k investors, pension funds – basically everyone wants the stock market to go up.  The short sellers aren’t ‘pessimists’ so much as ‘realists’ that over-inflated P/E ratios are a sign for a crash from unrealistic levels.  This is NOT the case in FX.  Currency markets have opposing forces like ‘gravity’ and ‘anti-gravity’ – every country wants both a strong currency and a weak currency.  This may seem illogical, welcome to the world of Currency!  The reason is simple – exporters want a cheap currency and importers want a strong currency.  Politicians usually favor a weak currency because it’s good domestically and big business favors a strong currency (at least in the USA) because USA is a net importer.  Let’s have a look at today’s USD action most noticed in EUR/USD:
    EURUSD
    On the surface this looks like a great trading opportunity – but is it?  EUR went up on poor US Payroll data; and then fell on dovish jawboning from the ECB.  Planned conspiracy to manipulate FX or just random brownian movement?  Believe what fits into your mind that helps you sleep at night, either way – would you have been able to buy EUR at 1.1924, sell near the high at 1.1980 and then reverse, covering near 1.19 handle?  All within 10 minutes?  Maybe someone did it, even if by accident, but the point is that any trading plan or investment strategy shouldn’t rely on the ability of such skills because even if as a trader you were able to achieve this great feat – would it be able to repeat it, day in and day out – for years?  Probably not.
    Enter more paradox such as “Triffin Dilemma”:
    The Triffin dilemma or Triffin paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was first identified in a 1929 book, Gold and Central Banks, by Polish economist Feliks Młynarski,[1] who identified a fundamental instability in a gold-based international monetary system, that the reserve currency countries would tend to accumulate foreign reserves, but as the volume of these grew relative to the country’s gold reserves, international investors would begin to fear suspension of convertibility; later in the 1960s, it was rediscovered in the context of the Bretton Woods system by BelgianAmerican economist Robert Triffin, who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit. Due to Młynarski’s precedence in articulating the problem, Barry Eichengreen has suggested renaming the problem to “the Młynarski dilemma“.[1]
    This is not only true for a reserve currency – any currency has a conflict between short term and long term interests.  For example, if a currency is weaker it can help exporters in the short term to boost sales, but hurt the same exporters in the medium term when they need to go out into the world and buy raw materials for higher prices.  This push and pull is what defines modern Forex on a systemic level.  While average investors certainly don’t need to know this unless you’re planning on getting a job with a central bank, it can help any investor understand how and why Currency markets fluctuate the way they do.  It should also be noted that these forces maintain ‘bounds’ naturally, establishing a sort of ‘high’ and ‘low’ limit for any FX pair.  For example the EUR/USD now trading around 1.19, it can go in next days to 1.20 or 1.21 but not 1.90, for example.  Even in rare cases such as the “Brexit” the GBP/USD went down by less than 10% – which is a lot, for a major Currency.  So let it be known to all that these risks in FX are investable (with the help of algorithms) and hedgeable.  Looking from a risk management perspective, it is a lot more manageable than securities, commodities, or bonds – which have the finality of the ‘ulimate’ risk (default) – as Currency is ‘money’ the Euro can’t ‘default’.
    A final note to all you Bitcoiners – Bitcoin is a Currency it’s only a matter of time before it’s integrated into the Forex system, because BTC/USD is an FX pair.  Good time to brush up on your FX and understand the broader market (not just the microcosm of Cryptocurrencies).
    Today’s move is a blip on the radar, a non-event for hedgers – and a potential huge trading opportunity for algos.  Game on!
    Posted: September 1, 2017, 6:59 pm
    Are you confused or curious about the markets, money, or finance?  Splitting Pennies is a great start, because it's not a technical 'how to trade' or 'how to invest' book.  Yes, it gets a little technical - but it's done so in a way that is fun and entertaining.  See what these happy readers have to say, from Amazon:

    I recommend this book to anyone interested in how the world of money really works
    This should be the first book anybody reads before beginning forex trading. Joe is not selling a "get rich quick" trading strategy or some such nonsense, but provides a thorough, non-biased explanation of how both forex and the financial system in general operate. Anybody thinking about beginning forex trading should read this book first before ever opening a MT4 terminal, a few bucks spent up front will save you a lot of money in the long run. 
    See more reviews and buy the book directly from Amazon (Paperback, Hardcover, or Kindle) by clicking here.


    For more info, visit www.splittingpennies.com 

    Posted: August 21, 2017, 3:53 pm
    We all know that the majority of people don’t know FX (Foreign Exchange) so this topic should come as no surprise.  However, it’s important for traders and investors to understand how the US banks are ripping off their clients, and the only reason they do it is because clients allow them, because they don’t understand how they’re being scammed.  What we are talking about is the retail deliverable foreign exchange market.  Deliverable currencies is FX that is ‘deliverable’ to a foreign recipient, for example if you want to pay up front for a hotel in France you’ve booked in advance for your summer vacation.  It’s not only retail but for the example here it is – someone walking into a branch and asking to make a foreign payment.  We’ll use Bank of America as the example, let’s look at their FX rates from their website, available here:  https://www.bankofamerica.com/foreign-exchange/exchange-rates.go
    So here’s the first line of defense to this scam, which it can be fairly called (we will explain).  Only one side of the spread is displayed – this will depend when you are ‘buying’ or ‘selling’ but they will NEVER be displayed on the same time or on the same screen (then, normally intelligent people may be able to deduce they were being fleeced like a sheep).  Let’s calculate the total spread based on the above rates using simple FX math for the 2 currencies chosen for this example, Euro and Yen.
    FX is quoted EUR/USD that means 1 EUR = 1.1820 USD – the spot FX spread is about 1.1820 / 1.1822 according to LCG Brokers from Fortress Capital; but the market is closed now (it’s Saturday, day of rest in FX).  Now if we want to calculate the inverse price, for EUR/USD using Bank of America’s tool, we need to use the 1/x (reciprocal) function seen on most common calculators.  So if EUR/USD is 1.12 the inverse (reciprocal) is .89.  If we use the same ‘spread’ to convert 1 USD = x Euro then we subtract 1.1820 – 1.12 = .062 or 620 pips.  .062 doesn’t sound like much of a spread, but if you look in % terms it’s 5.54% of the price.  If we add the same amount of pips (or percent, however you calculate) to the other side of the spread, it would be 1.244 – for a total spread of 1240 pips.  Common spot trading spreads can run as high as 2 or 3 pips for the real shady FX brokers from Asia or aggressive IBs.  1240 pip spread is laughable.  Now of course these customers are PAYING in foreign currency not TRADING foreign currency it would be impossible to trade over 1240 pip spreads – but this is the reality for these poor retail victims.  1240 pips is substantial if you’re sending more than $50 – so now let’s look at the shocking examples.  At these prices, if you sent 100,000 to Europe, that would be about $5,540 in spread.  Where does this $5k magically disappear to?  The markets?  No – it is booked as a profit on the bank’s balance sheet.  Recently we (Elite E Services, Inc.) sent a wire payment like this for $5,000 and the banker had the audacity to say that if Bank A (not Bank of America, we won’t reveal the name) did the FX conversion we’d save $10 on the wire payment fee!  We calculated that would have been $350 in payment to Bank A to save $10.
    Now the critical thing for US readers to understand, this is a uniquely American practice which happens only inside the borders of USA.  If you are in virtually any other country, whether it be UK, New Zealand, Japan, Australia, Switzerland – you’re going to get rates on such transfers which are HIGH but probably something like 50 pips maybe 100 pips in extreme cases.  If you do transfers more than 100,000 that can go down to as low as 25 pips.  So how can the banks get away with it in USA?  They are simply taxing people’s stupidity, because there are alternatives.  Companies like Fortress Capital offer deliverable payment services by using payment processors like Commonwealth Foreign Exchange to get the same foreign rates and save customers up to 90% on transfers.  But they require an application and would not open an account for a single individual customer (it’s mostly for corporates who do regular transfers).  Then of course there’s Currencies Direct who has offices in USA, and a number of other companies.
    But the fact is that the banks have people by the short and curlies, there are not really many or any choices when you need to do a single transfer – and banks are making a small fortune from this.  Could this be considered a Monopoly?  Anti-trust issues?
    They settled huge claims and have since reduced the spread (whereas now it’s 5.5% it used to be 7% – 8% !!) and companies like American Express (AMEX) no longer charge a ‘foreign exchange fee’ – that’s right, on top of this horrendous spread many providers used to charge a 1% or 2% ‘fee’ on top of this!  Outrageous!
    The sad thing is that most in the retail market, even small retail customers with little or no investment accounts understand stock trading.  Forex is not so complex as it is sometimes presented by the banks – I’m sure they do this intentionally, they aren’t stupid.. This profit center is good for them and costs them nothing, it’s a risk-less profit that no one can complain about because ‘hey, it’s Forex.’
    This is not the ONLY way the big banks are banking off people’s FX stupidity, but it’s the most petty way, and the most widespread.  Millions and millions of dollars of such transactions take place on a daily basis and the banks are happy to keep things like this.
    Posted: August 12, 2017, 5:31 pm
    (GLOBALINTELHUB.COM) -- Dover, DE 8/8/2017 -- Global Intel Hub exclusive interview -- Elite E Services sat down with Mike Connor, Principal and Senior AP of Alpha Z Advisors, LLC – a trading advisor offering alternative investments based on strategies incorporating research on price anomalies, behavioral biases and institutional practices. In November of last year, Alpha Z Advisors LLC was ranked #1 Options Strategies Category by Barclay Hedge, a service that tracks funds’ strategies. So we wanted to learn more about on the Alpha Z Advisors strategy, as we have always supported options as a great way to not only hedge investments but also provide additional alpha to any portfolio. Also, futures options are generally traded on regulated exchanges – unlike FX which are mostly traded over the counter (OTC).
    Who is Mike Connor?
    Professional risk manager and former member of the Chicago Mercantile Exchange, who has more than 40 years’ experience in the futures and options industry.
    What is the story behind Alpha Z Advisors?
    Professor William Ziemba started Alpha Z Advisors, LLC with trading capital from friends and family. The initial investors were individuals he knew from the academic world in addition to a few referrals from the initial investors. The fund has grown in size from trading profits from the initial capital without attracting new investors.
    How has the performance been?
    2015 had great performance, more than 100% return, but it probably will never happen again due to a management decision to reduce initial margin to equity risk.
    Why has it been so consistent?
    The fund primarily trades options based on CME’s S&P 500 E-mini contract. Trading centers around the extreme prices of puts on the E-mini contract. The big money in trading options is made from being long, but returns are inconsistent (but the risk is usually very well controlled). The consistent money is made by being short options, but it comes with risk, and to stay in the game the risk has to be controlled.
    How do you control the risk?
    By properly hedging the positions either with other options or a futures position, and by margin to equity control. Short (selling) options positions are no different than an insurance company policies – you are selling price insurance. Like any insurance company, we’re going to have occasional disasters, like Katrina – but they should be manageable. Over a long time horizon, well managed market disasters should not prevent us from continuing to perform. We have had our share of ups and downs, and fortunately we have been able to survive all drawdowns. Good risk control and position sizing are the most important factors in any trading campaign.
    What factors may impact the strategies’ performance?
    Implied Volatility. Volatility is opportunity, but left unchecked it can be a horrible threat.
    Considering the results, why do you think there’s not larger AUM?
    Until recently we have not solicited publicly. This is our first concentrated effort at soliciting investors. In addition, we put together a minimum account size so high ($250K for the managed account, $100K for the fund). Our account size should eliminate many potential investors. We are looking for sophisticated investors that can take a part of their portfolio and take greater risk for a higher return.
    How can investors ‘prove’ that the performance is ‘real’ – is there an institutional My FX Book ? There’s been a lot of CTA frauds that were real CTAs but used fake performance to lure investors – what assurances can we offer them about Alpha Z?
    All the accounts – all the funds’ assets – all the performance results are compiled every month by an independent CPA firm. The statements themselves can be verified by the FCM.
    Positions are manually stress-tested intra-day.
    What makes Alpha Z Advisors LLC different than other CTAs?
    I’m not sure if that’s the case, we have a very professional trading plan. You can go to Amazon and buy books published by our founder Dr. William Ziemba, actually he’s published more than 50 books on statistical abnormalities and opportunities in the stock market. It certainly does not mean we cannot lose, or have losing open positions – we are going to have losing positions there is no way around it. But overall, if we can control the risk and keep margin to equity at a reasonable level we should be able to survive during the bad times. We have, I think, enough excess margin to sit through a significant rise in implied volatility and still survive, if the positions and margin to equity can be properly controlled. Like any market position whether it is options or futures an unexpected giant gap opening is always a threat to open market position’s stability.
    What makes the strategy different?
    Trades are well positioned and I believe are market entry timing is very good. Our exposure is laid out over a broad time horizon (we don’t trade in nearby month, for example). If futures were a bullseye, you’d have to hit the target almost dead center to make a profit, with options, you can just hit the wall and still make a profit – of course, only with properly controlled risk and other parameters. I do not know how other CTA’s manage their positions and stress test their market risk, but I am confident our process is robust. What we do is not magic, it’s simply neutralizing the risk as much as possible, and there is a number of ways we accomplish that. It is all about understanding what the options can do if they move against you, and how you can respond adverse market activity.
    The execution is done by a professional service. One way we keep our costs down other than accounting, is to try and soft dollar expenses through a soft dollar basis.
    Customers are free to choose any brokerage house they want that clears at the CME. If customers do not have any preference, we are happy to set them up with our preferred FCM.
    For more information contact:
    Mike Connor
    312-470-6260
    Or visit www.alphazadvisors.com
    This article/interview is for information/educational purposes only and is privileged, confidential and proprietary. This article/interview is NOT an offer to sell or a solicitation of any investment products or other financial product or services, is NOT an official confirmation of any transaction, or an official statement. Past performance is not indicative of future results. There is a substantial high and unlimited level of risk of loss in trading commodity futures, options, options writing, equities and off-exchange foreign currency products; such trading is not suitable for all investors.  Investors should only invest money they can afford to lose.

    http://globalintelhub.com/alpha-advisors-offers-alternative-options-investing/
    Posted: August 8, 2017, 7:32 pm
    It was over three years ago, back in May 2014, when we wrote "How Bots Manipulated The Price Of Bitcoin Through "Massive Fraudulent Trading Activity" At MtGox" in which we first demonstrated one of the more striking observed "bot-driven" bitcoin manipulation schemes, in this case related to the infamous collapse of the now defunct Mt.Gox bitcoin exchnage.
    As we wrote at the time, a number of traders began noticing suspicious behavior on Mt. Gox. Basically, a random number between 10 and 20 bitcoin would be bought every 5-10 minutes, non-stop, for at least a month on end until the end of January, by what appeared to be two algos, named later as "Willy" and "Markis." Each time, (1) an account was created, (2) the account spent some very exact amount of USD to market-buy coins ($2.5mm was most common), (3) a new account was created very shortly after. Repeat. In total, a staggering ~$112 million was spent to buy close to 270,000 BTC – the bulk of which was bought in November.
    "So if you were wondering how Bitcoin suddenly appreciated in value by a factor of 10 within the span of one month, well, this is why. Not Chinese investors, not the Silkroad bust – these events may have contributed, but they certainly were not the main reason. But who did it? and why?"
    Of course, in the end this alleged manipulation did not help Mt.Gox which eventually collapsed in what has been the biggest case of cryptocoin fraud in history.
    We bring up this particular blast from the past, because in the latest case of bitcoin market abuse - with Bitcoin trading at all time highs above $3,000 - Cointelegraph reports of rumors swirling about a trader "with nearly unlimited funds who is manipulating the Bitcoin markets." This trader, nicknamed "Spoofy," received his "nom de guerre" because of his efforts to “spoof” the market, primarily on Bitfinex.
    Of course, spoofing is what Navinder Sarao pled guilty of last year, when regulators inexplicably changed their story, and instead of blaming a Waddell and Reed sell order for the May 2010 flash crash, decided to scapegoat the young trader who allegedly crashed the market due to his relentless spoofing of E-mini futures (and also making $40 million in the process of spoofing stock futures for over five years).
    It now appears that a spoofer has once again emerged, only this time in Bitcoin.
    For those unfamiliar, spoofing is simple: it is the illegal practice of placing a large buy order just below other buy orders, or a large sell order just above other sell orders, then cancelling if it appears that the order is about to be hit or lifted. The idea is to make traders think that somebody with deep pockets is getting ready to buy or sell, in hopes of moving the market. If traders see a sell order of 2000 Bitcoin they may rush to panic sell before the whale crashes the price. And vice versa on the bid-side.
    As an example of Spoofy's trading pattern, here is a breakdown of a typical "trade" by the mysterious entity as noted by BitCrypto'ed who first spotted the irregular activity: Spoofy is a regular trader (or a group of traders) who engages in the following practices:
    • Places large bids ($2 million and up) for Bitcoin, usually just under a smaller bid order, only to remove them once someone starts to sell. These orders usually have a lifetime of minutes, or sometimes as short as 5–10 seconds to manipulate the price up (more common)
    • Places large asks ($2 million and up), for Bitcoin when he wants the price to go down, or stop going up (less common)
    • Occasionally ‘Spoofy’ will allow orders deep in the orderbooks to remain for a few hours, usually $50–$100 below the current price. For example, during the recovery above $2,000, he had roughly 4,000 BTC of false orders in the $1,900 range that were unlikely to execute, and ultimately were never executed.
    As noted above, spoofing is actually illegal - as ultimately the trader has no intention of ever executing the publicized trade - but as Bitcoin markets are largely unregulated, it’s a very common practice.
    What is unusual in this case is the nearly unlimited bankroll that Spoofy has at his disposal: He regularly places orders approaching $60 million.
    Even more unusual is that, as cointelegraph reports, most of Spoofy’s activity occurs on a single exchange: Bitfinex. This exchange came under fire earlier this spring when Wells Fargo cut off their banking ties. As a result, it’s virtually impossible to deposit fiat on Bitfinex without going through intermediaries.
    Yet unlike most Bitfinex traders, Spoofy appears to have special privileges, and has massive sums of both fiat and Bitcoin at his disposal on that exchange, likely one of the only traders who does.
    * * *
    In addition to spoofing, "Spoofy" also engages in wash trading, or effectively trading with himself. As BitCrypto’ed points out in a recent blog post:
    “Spoofy makes the price go up when he wants it to go up, and Spoofy makes the price go down when he wants it to go down, and he’s got the coin… both USD, and Bitcoin, of course, to pull it off, and with impunity on Bitfinex.”
    The BitCrypto’ed blog also describes Spoofy’s wash trades, when he trades with himself by either selling into his own buy orders or vice versa. Wash trading at high volumes can induce a frenzy of buying or selling, as other traders respond to the high trading volume. Spoofy can execute wash trades at very low cost, about $1,000 per million dollars of volume.
    A single entity (entity could be a trader, or a group of traders), single handedly wash traded 24,000 Bitcoins in shorts. In order to do this, you would need to have at least 24,000 BTC on Bitfinex and the USD to buy them with.
    When Bitfinex announced its plan to distribute Bitcoin Cash, it initially planned to distribute Bitcoin Cash to holders of short positions. Immediately following that announcement, a single trader short sold tens of thousands of Bitcoin all at once. It’s likely this trader was Spoofy himself, hoping to acquire as much Bitcoin Cash as possible.
    The large number of shorts on Bitfinex also led many to believe that an epic short squeeze was coming, and many Bitcoin traders purchase coins in expectation of this. Suddenly, he “claimed” all of his own shorts, closing them using his own Bitcoin. The number of shorts dropped drastically, yet without affecting the price at all.
    Bifinex itself admitted the manipulation on August 2, one day after the fork:
    “After the methodology announcement on July 27th, several accounts began large-scale manipulation tactics in an attempt to obtain BCH tokens at the expense of exchange longs and lenders on the platform, causing the distribution coefficient to artificially plummet.

    We have determined that this kind of manipulation?—?including wash trading and self-funding shorts?—?is in violation of Bitfinex’s terms of service. Those who intended to take unfair advantage of the circumstances surrounding the BCH distribution at the expense of other users have been sanctioned accordingly.”
    Interestingly, BitCrypto'ed claims that Spoofy isn’t limited to just Bitcoin, and that shortly after this ‘trader’ was ‘sanctioned’ by Bitfinex, another interesting thing happened: ETCBTC shorts immediately disappeared on August 1.

    Here we can see how the ETCBTC shorts simply vanished, from 60,000 ETC short, to a low of 93 ETC. But let’s not just look at ETCBTC, what about ETCUSD?

     

    A giant middle finger. Notice the dramatic increase and decrease in longs with no effect on price.

    I'm not sure what to make of these, but it calls into question the legitimacy of this data. The point I’m trying to make by showing the ETCBTC/ETCUSD margin pairs also engaging in very funny business at the same exact time, how are we supposed to know that the BTCUSD longs on Bitfinex are not also subject to this manipulation?

    ETCBTC Shorts = Clear evidence of manipulation
    ETCUSD Longs =Clear evidence of manipulation
    BTCUSD Shorts = Clear evidence of manipulation (and admitted by Bitfinex)
    BTCUSD Longs = BTCUSD Longs in terms of USD, has never been higher in Bitfinex’s history. See the green line.

    It's not just Bitfinex: Spoofy’s activity also drives crypto prices on other exchanges, as arbitrage takes place. Because BItcoin is so thinly traded, a single large “whale” can potentially move the entire market.
    Just like in US stock markets where HFTs find instant price arbitrage opportunities, with the help of extensive spoofing, the same takes place in bitcoin exchange.
    People underestimate how much exchanges follow each other. Manipulation on one exchange will affect prices on other exchanges. You have traders that watch all of the exchanges and if one exchange starts to pull ahead, they too buy on cheaper exchanges.

    You don’t just have people, but you also have bots that will do the same thing, so price reactions can be immediate.
    Just like equities. And while Spoofy is certainly exercising outsized control over the Bitcoin price, it is uncertain how much of an affect this is having across all the markets. The price is currently rising, having finally surmounted the $3,000 barrier. The only problem? Nobody knows how much of this increase is organic and sustainable, and how much is due to the market manipulation of Spoofy and others.
    Finally, nobody knows who he is:  The identity of Spoofy remains a mystery. He may be i) a single trader, ii) a large OTC trading firm or group of colluding traders, iii) or even the Bitfinex management themselves. He sometimes seeks to drop Bitcoin price, and sometimes acts to increase it. One thing is certain: one single trader seems to have a "central bank"-like impact on the entire crypto market.
    Posted: August 7, 2017, 1:36 am
    (GLOBALINTELHUB.COM) Dover, DE — 7/18/2017 — Hidden in plain site, as the Trump administration finally released something of substance regarding the so called promised “Trade Negotiation” we see FX take center stage in the global drama unfolding.  As noted on a Zero Hedge article:
    The much anticipated document (press release and link to full document) released by U.S. Trade Representative Robert Lighthizer said the Trump administration aimed to reduce the U.S. trade deficit by improving access for U.S. goods exported to Canada and Mexico and contained the list of negotiating objectives for talks that are expected to begin in one month. Topping Trump’s list is a “simple” objective: “improve the U.S. trade balance and reduce the trade deficit with Nafta countries.” Among other things the document makes the unexpected assertion that no country should manipulate currency exchange to gain an unfair competitive advantage,which according to Citi’s economists was the only notable surprise in the entire document: That line of focus centers on FX: “Through an appropriate mechanism, ensure that the Nafta countries avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.”  ..While Canada and Mexico are not formally considered currency manipulators by the US Treasury, the reference in the list of objectives will likely set a template for future trade deals such as the pending negotiation to modify a 5 year old free trade deal with South Korea, a country in far greater risk of being branded a currency manipulator as it sits on the Treasury’s monitoring list for possible signs of currency manipulation.
    As we have explained in previous articles and in our book Splitting Pennies – Trade is FX.  Tariffs can discourage trade, but so can a high price – effectively they are the same thing.  Conversely, a cheap price encourages trade.  This is why Japan has logically and rationally destroyed the value of its own currency in order to boost trade, in their case – exports – because Japan is not only a net exporter, they are a near 100% OEM manufacturer.
    But it’s not clear that whoever wrote this document understands FX – every currency is currently a ‘manipulator’ – including Japan, and the US Federal Reserve Bank.  In fact, the global FX market has become a race to the bottom, with each currency competing with each other who can go down more, faster.  It’s a race into oblivion.  Contrary to what you may read in the current doom journalism popular online, the global financial collapse is happening right before our eyes – over a long time horizon.  The big mistake that many economists, analysts, and investors have made in the ‘doom and gloom’ crowd is that they all expected a ‘date’ or a ‘time’ when everything would ‘collapse’ – they didn’t think that it can happen over a period of 50 years.  We are in the demise, it’s happening right before our eyes.
    Today someone asked me if Bitcoin can really be 500,000 – and why not?  My answer was that, it isn’t that Bitcoin is going UP it’s that the value of the US Dollar is going DOWN.  So if Bitcoin is 500,000 – that property in the hamptons that’s listed for $150 Million, it will be listed for $15 Billion, or why not $1 Trillion.  There is no limit to the amount of money the Federal Reserve can create – but there is a limited amount of Bitcoin.  Those who have lived in exSSR countries or Russia for example, understand how quickly money can be worthless.  Quantitative Easing is itself a global ‘reset’ if you understand how it works, and it happens over a long timeframe.
    So where is one to invest, to protect from the deteriorating value of FX?  Bitcoin is by itself not a solution and by no means even something that should be part of any portfolio, it’s a test of the new world order’s global currency payments and monetary control system, whatever you want to call it – and it’s very volatile – just as it goes up 100% it can go down 90%.  The answer is that even with Bitcoin – the point is to TRADE it not INVEST in it.  Let’s dissect FX to understand this.  Take a look at this Daily EUR/USD chart going back 3 years:
    eur usd
    The EUR/USD goes up, it goes down.  There’s an election in France, an election in the US.  It’s practically one currency.  But the ECB has a similar QE program that’s destroying the value of the Euro as well.  So the way to protect yourself here is to ‘trade’ this.  For example, take a look at a snapshot from 2016 of Magic FX Strategy, that has returned on average 1.5% per month for the last 4 years:
    magic
    This is not a solicitation of this particular strategy, simply it provides a good example of how to ‘trade’ FX for a consistent profit, to combat inflation.  Investing in CDs and other interest rate products are not going to give you the 15%+ per year needed to stay ahead of the Fed.  This is the game of hot potato that Elite bankers have designed that’s built into the modern electronic financial system.  The stock market is great unless there’s a down year, but still just barely keeps you ahead of the game (if you stick to the traditional blue chips, industrials, utilities, etc) and certainly is not going to give you the 15% – 30% per year returns needed to really grow your portfolio.  30% + is the magic number Elite portfolios target (ironically, it’s about a 2x allocation to Magic FX strategy, in line with the natural fluctuations of the FX market, using reasonable, modest leverage).
    If you’re not making 15% + per year inflation is eating you away.  So where can you invest and get 15% with reasonable risk?  The answer is practically no where in the markets, maybe in the private equity world, complex real estate, and other special situations but clearly there is no vanilla answer like “Buy Gold” or “Buy Bitcoin” as there may have been post 9/11.  This will be more and more true as QE matures, because QE is distorting asset prices in complex ways.  This is the ‘trap’ which has been set.  Not only does it cull the herd, as the Elite like to do every 20 years or so, it forces investors into a situation where they have to take more risk – if they don’t, their assets will ultimately be eaten away by inflation.  They have to play the game because if they sit on the sidelines they will lose out.  Of course it’s not fair – but that is the nature of the global capitalist financial system, at the moment, and it’s not going to change in our lifetime, so one can understand it and master it, or be the victim of it, SIMPLE!
    And in the case of FX it’s not so complex to understand.  Let’s look quickly at the last currency of investment, the Swiss Franc.
    Here’s a historical chart of CHF/USD (usually it’s quoted USD/CHF which is the inverse – opposite)
    Investors in Swiss Francs over this period – which includes Americans just sending their money to Switzerland, enjoyed a 400%+ return over the 40 year period, non-compounded, without considering interest (just FX).  The small blip in the 80s when this investment declined was due to the US Dollars aggressive double digit interest rates, but that ended in 1986 when Swissie just took off and never looked back.  That was until the post 2008 world, where Switzerland became the target of a number of investigations by hungry US agencies looking for someone to blame and money to pay for damage done by the credit crisis, including the IRS, FBI, and DOJ in general, but there were a number of other US interests interested in financially ‘toppling’ the Gnomes of Zurich – namely, by closing the only way out of QE.  The Swiss Franc (CHF) was really the only currency that had any value, it was 40% backed by Gold, and upheld by a 1,000 + year banking tradition, a stable economy, and banking privacy laws.
    In order to solidify the US Dollar as the primary world’s reserve currency, that had to be smashed.  So they did it in a number of ways, including but not limited to activating assets there such as corrupt central bankers (which really was a non-issue) and squeezing the Gnomes back into submission.  So the conclusion to this drama is now the CHF previously being the only real currency to invest in for the long term and forget about it, is now a central bank manipulated currency that is subject to SNB interventions, caps, trading ranges, and other direct central bank manipulation (like all other currencies).
    So the reason for that story is simply that there is no where to just ‘invest’ your money and forget about it anymore (there was, such as the example of the Swiss Franc).  The good news though, FX is a traders market.  If investors are not too greedy, there’s a number of strategies in FX that can return the 15% + needed to beat inflation and possibly even grow.  Magic FX is certainly not the only strategy in the world with such low-volatility and consistent returns.  But due to the recent Dodd-Frank regulations such strategies are only available to ECP investors, which is a step above being accredited – basically you need to be liquid for $10 Million.  Oh, and to make fighting inflation really fun for the retail US investor, you aren’t allowed to hedge (no buying and selling of the same currency) and you must exit your positions in the same order in which you entered them (FIFO) and you have reduced leverage.  Basically, the Fed is creating pressure forcing the hand of investors to trade to stay ahead of the game, and the regulators are making it difficult (and in fact, more risky) to trade.  With US rules it’s a miracle any US retail investor can be profitable.  The rules have really turned FX into the casino that people are afraid of, because they are literally telling you when to exit your trades (FIFO).
    In conclusion – FX is a real traders market.  It’s better than stocks, bonds, options, futures, etc.  Now with the influx of Cryptocurrencies FX is about to get even more interesting.  By trading FX successfully, or finding a manager who can do it for you – it’s the only way to fight inflation, to at least maintain the value of your hard earned dollars.  As we mentioned earlier in the article, there are of course other methods such as private equity and niche businesses (such as lawyers selling rights to settlements) that can generate the 30% + needed to grow a portfolio – but it’s not available publicly, in the markets.  But FX is there – it’s there for the taking – and it’s not going away anytime soon.
    Posted: July 19, 2017, 2:31 am
    David Siegel had a problem. For years, the American entrepreneur had been working on an idea: an open-source platform, called Pillar, which would allow people to remain in control of their personal information by piggybacking on the blockchain — a digital decentralised ledger underpinning cryptocurrencies such as Bitcoin.
    But when Siegel pitched his company Twenty Thirty to venture capital firms, he was met with blank looks. Investors weren’t interested in Pillar, and Siegel couldn’t get funding to build it.
    After months of rejections, Siegel decided do something different: instead of phoning just another investor, he resolved to get help from future users.

    On 15 July, he is going to sell 560 million “tokens” — digital units of payment that will be necessary to use Pillar, once it’s ready — in exchange for ether, an up-and-coming cryptocurrency exchanged on public blockchain Ethereum. His target is the equivalent of $50 million; if that sounds like a lot, be aware that Pillar’s “token pre-sale”, some days ago, raised $4 million worth of Ethereum’s currency, ether — in 34 minutes.

    “I couldn’t raise any money for Twenty Thirty from investors, because they didn't get what we were doing; now we have ordinary people hammering our email about Pillar,” Siegel says. “These people really want to fund this open source project.”

    Siegel’s fund-raising model is called Initial Coin Offering, or ICO — and you might have heard of it, as it is the latest big thing in the frenzied world of cryptocurrencies.
    An ICO’s functioning is simple: a team with an idea, but short of funds, use blockchain technology to issue a certain amount of digital tokens (aka “coins”) sold in an auction to people paying in ether, Bitcoin or, seldom, regular money like dollars or pounds.
    Apart from rare cases, tokens’ only ostensible function is allowing their holders to use the platform that issued them: they could be used, for instance, to buy storage space on a Dropbox-style service, or converted into special objects on a gaming platform. They are the equivalent of coupons for a supermarket under construction.
    But tokens often grow into mini-currencies in their own right: they are traded for cryptocurrency or fiat on blockchain marketplaces, and the more successful their related project grows, the more valuable its tokens become. This dynamic is inevitably attracting a great deal of speculation.

    The mechanism has been around for a while — the first instance was MasterCoin in 2013, followed in 2014 by Ethereum’s first ether sale, and more recently by the ill-fated autonomous VC firm The DAO — but it really surged over the first half of 2017. Tens of projects have amassed millions of dollar within days, hours, or seconds, with superstars such as blockchain architecture firms EOS and Tezos soaring over $150 million and $200 million. In June, bitcoin news website Coindesk announced that funds raised through ICOs had overcome VC money as the first source of investment in the blockchain sector in 2017. “Tokens” might sound like Monopoly money, but their impact on the real world is growing by the day.

    The question is: why? Ask people in the field and they tend to reflect two main narratives, one optimistic, the other decidedly sceptical.

    The positive one is that ICOs are a new, smart way to finance projects that struggle to get VC’s backing.

    Etienne Brunet, an investment executive at FinTech VC firm Illuminate Financial, points to investors’ recent interest in private blockchains (members-only ledgers banks and financial institutions are experimenting with) as the root cause for ICOs. “In 2016 it was very hard to raise funding unless you were doing private blockchains,” he says. “So, all the people trying to build open source projects for the public blockchain had to find a new way to get funds.”
    The way Burke sees it, ICOs are finally lowering the barriers to entry for technology investment, as whoever has some cryptocurrency can join the party; more than that, coins’ speculative potential is allowing open-source projects to raise more funds than ever before.
    “The point is that now, for the first time ever, open-source initiatives can be profitable for investors,” he says. “Previously, they were relying upon donations and they were inherently unprofitable — people would just do them for an ethical goal. Now there is a financial incentive for people to participate.”
    There is a stick-it-to-the-man undertone behind this take on ICO: the idea that smart, independent teams are raking in millions from the anarchic crypto-crowd to take on blindsided VCs and bank-loving private blockchainers. And increasingly, ICOs are being used by companies outside of the blockchain field, such as messaging service Kik, which portrayed its upcoming ICO as a last-ditch attempt to compete with juggernauts such as Facebook.
    Still, Burke admits that, while this is the direction he sees ICOs evolving over the next few months and years, the current state of affairs is far from optimal.
    “Most of the projects which have launched ICOs are poorly designed and won't scale,” he says. “But I look past that: I still think we have the ability to kick-start this new economy.”
    That brings us to the second narrative, which portrays the ICO frenzy as a massive speculation game, or worse.
    ICOs might have lowered barriers to entry, but most token sales are dominated by a handful of large investors —“whales” in crypto parlance — snarfing up almost all the cake. In the $35 million ICO for Brave, a browser created by Mozilla co-founder Brendan Eich, only 130 people bought coins — and half of them were purchased by just five buyers.
    Although most projects specify — risibly— that tokens are “not for speculation”, token speculation is at the core of ICO’s success at raising so much money so quickly. Big crypto owners are throwing money at token sales hoping that coin value will increase in the short run, diversifying their crypto portfolio in the process.
    “The point is: if you have $200 million worth of bitcoin or ether, what should you do?” Illuminate’s Brunet says.
    The side effect is that millions are going to entities which, apart from tokens and a project outline — crypto parlance: “white paper” — have very little to offer. Take for example “Useless Ethereum Token”, a parody initiative which still managed to raise $40,000 in funding. Or, for a grimmer story, look at OneCoin: a Ponzi scheme which had amassed over $350 million before being busted by the Indian police.

    Some of the more obvious security problems are being addressed by the crypto community at large: it has been recommended that funds from ICO be locked in an escrow mechanism — giving access only to limited sums after milestones have been reached — in order to prevent crypto heists. And Ethereum’s wunderkind guru Vitalik Buterin has turned to game theory to suggest some tips for designing fairer ICO auctions, such as as splitting them up in smaller, spaced out sales over time.

    The elephant in the room, has to do with financial regulation: with tokens being auctioned, traded, and speculated on as if they were securities, should we regard them and regulate them as securities? (The fact that ICO is even phonetically reminiscent of IPO, or initial public offering, is hardly a coincidence.)In most countries, the answer would be no: if something is not formally a security, it won’t be treated as such. But that is different in the US, whose security regulation extends to “investment contracts” — defined in a landmark case (centered on an orange orchard in Florida) as investments made with an “expectation of profits.”

    Whether that applies to tokens— bizarre entities that have a sort of intrinsic value (as theoretical payment units) but are also being flipped around like stocks, is anybody’s guess. Right now, the US Securities and Exchange Commission has been silent on the matter, explains Peter Van Valkenburgh, a researcher at blockchain-focussed think tank Coin Center.

    “SEC’s default position is ‘we're proceeding cautiously because, while we are worried about investor protection, we're not certain this is within our purview, and we don't want to stifle innovation’,” he says. “There's no indication that anything is gonna happen in the very short term.”
    For the time being, ICO’s real challenge is whether it can thrive without being a pain in the side for the blockchain ecosystem itself. ICOs are likely behind the recent spike in the value of ether — with investors buying the cryptocurrency in order to take part in token sales; ICOs might also be behind ether’s sudden 30 percent drop in value, as many ether-loaded projects are converting their ICO-generated ether into fiat currency to pay their staff.
    And the Ethereum network itself — which less than one year ago went through a traumatic restructuring following the collapse of The DAO — is being put under strain by the ICO onslaught, as relentless, massive volume of transactions generated by token sales commandeer the ledger’s computing power.
    But that is not necessarily a bad thing, Van Valkenburgh says. “It could be a way to battle-harden the network: there have been issues with transaction delays and scaling because of the popularity of ICOs put strain on the network,” he says. “But if the blockchain has to grow, ICOs are a good way to test the infrastructure.”

    http://www.wired.co.uk/article/what-is-initial-coin-offering-ico-token-sale

    Posted: July 17, 2017, 12:16 am
    (GLOBALINTELHUB.COM) 6/12/17 — Bitcoin has surged to all time highs, urging us to compose this article on a hot trending topic that we’ve wanted to compose for a long time.  Our parent company, Elite E Services, is primarily a FX algorithm development company – so we get asked about Bitcoin quite a bit.  Life is a deteriorating asset so let’s get right down to it.  Who created Bitcoin, and why?  Before we get started just a quick note to all those that haven’t read Splitting Pennies – which is a great primer for those interested in Bitcoin and where it will go next.
    The creator of Bitcoin is officially a name, “Satoshi Nakamoto” – very few people believe that it was a single male from Japan.  For more detailed analysis about who is Satoshi Nakamoto see this article and the official Wikipedia entry.  In the early days of Bitcoin development this name is associated with original key-creation and communications on message boards, and then the project was officially handed over to others at which point this Satoshi character never appeared again (Although from time to time someone will come forward saying they are the real Satoshi Nakamoto, and then have their posts deleted).
    Bitcoin could very well be the ‘one world currency’ that conspiracy theorists have been talking about for some time.  It’s a kill five birds with one stone solution – not only is Bitcoin an ideal one world currency, it allows law enforcement a perfect record of all transactions on the network.  It states very clearly on bitcoin.org (the official site) in big letters “Bitcoin is not anonymous” :
    Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsibility to adopt good practices in order to protect your privacy. Read more about protecting your privacy.
    Another advantage of Bitcoin is the problem of Quantitative Easing – the Fed (and thus, nearly all central banks in the world) have painted themselves in a corner, metaphorically speaking.  QE ‘solved’ the credit crisis, but QE itself does not have a solution.  Currently all currencies are in a race to zero – competing with who can print more money faster.  Central Bankers who are in systemic analysis, their economic advisors, know this.  They know that the Fiat money system is doomed, all what you can read online is true (just sensationalized) – it’s a debt based system based on nothing.  That system was created, originally in the early 1900’s and refined during Breton Woods followed by the Nixon shock (This is all explained well in Splitting Pennies).  In the early 1900’s – there was no internet!  It is a very archaic system that needs to be replaced, by something modern, electronic, based on encryption.  Bitcoin!  It’s a currency based on ‘bits’ – but most importantly, Bitcoin is not the ‘one world currency’ per se, but laying the framework for larger cryptocurrency projects.  In the case of central banks, who control the global monetary system, that would manifest in ‘Settlement Coin’ :
    Two resources available almost exclusively to central banks could soon be opened up to additional users as a result of a new digital currency project designed by a little-known startup and Swiss bank UBS.  One of those resources is the real-time gross settlement (RTGS) system used by central banks (it’s typically reserved for high-value transactions that need to be settled instantly), and the other is central bank-issued cash.  Using the Utility Settlement Coin (USC) unveiled today, the five-member consortium that has sprung up around the project aims to help central banks open-up access to these tools to more customers. If successful, USC has the potential to create entirely new business models built on instant settling and easy cash transfers.  In interview, Robert Sams, founder of London-based Clearmatics, said his firm initially worked with UBS to build the network, and that BNY Mellon, Deutsche Bank, ICAP and Santander are only just the first of many future members.
    In case you didn’t read Splitting Pennies or don’t already know, the NSA/CIA often works for big corporate clients, just as it has become a cliche that the Iraq war was about big oil, the lesser known hand in global politics is the banking sector.  In other words, Bitcoin may have very well been ‘suggested’ or ‘sponsored’ by a banker, group of banks, or financial services firm.  But the NSA (as we surmise) was the company that got the job done.  And probably, if it was in fact ‘suggested’ or ‘sponsored’ by a private bank, they would have been waiting in the wings to develop their own Bitcoin related systems or as in the above “Settlement Coin.”  So the NSA made Bitcoin – so what?
    It isn’t really important who or why created Bitcoin as the how – and the how is open source, so experts have dug through the code bit by bit (pun intended).  If the who or why isn’t important – why did we write an article about it?
    The FX markets currently represent the exchange between ‘major’ and ‘minor’ currencies.  In the future, why not too they will include ‘cryptocurrencies’ – we’re already seeing the BTC/EUR pair popup on obscure brokers.  When BTC/USD and BTC/EUR are available at major FX banks and brokers, we can say – from a global FX perspective, that Bitcoin has ‘arrived.’  Many of us remember the days when the synthetic “Euro” currency was a new artificial creation that was being adopted, although the Euro project is thousands of degrees larger than the Bitcoin project.  But unlike the Euro, Bitcoin is being adopted at a near exponential rate by demand (Many merchants resisted the switch to Euros claiming it was eating into their profit margins and they were right!).
    And to answer the question as to why Elite E Services is not actively involved in Bitcoin  the answer is that previously, you can’t trade Bitcoin.  Now we’re starting to see obscure brokers offering BTC/EUR but the liquidity is sparse and spreads are wacky – that will all change.  When we can trade BTC/USD just like EUR/USD you can bet that EES and a host of other algorithmic FX traders will be all over it!  It will be an interesting trade for sure, especially with all the volatility, the cross ‘pairs’ – and new cryptocurrencies.  For the record, for brokers- there’s not much difference adding a new symbol (currency pair) in MT4 they just need liquidity, which has been difficult to find.
    So there’s really nothing revolutionary about Bitcoin, it’s just a logical use of technology in finance considering a plethora of problems faced by any central bank who creates currency.  And there are some interesting caveats to Bitcoin as compared to major currencies; Bitcoin is a closed system (there are finite Bitcoin) – this alone could make such currencies ‘anti-inflationary’ and at the least, hold their value (the value of the USD continues to deteriorate slowly over time as new M3 introduced into the system.)  But we need to pay
    Another thing that Bitcoin has done is set the stage for a cryptocurrency race; even Google is investing in Bitcoin alternatives:
    Google Ventures and China-based IDG Capital Partners are the second group of tech investors in two months to place a bet on OpenCoin, the company behind the currently-in-beta Ripple open-source payments protocol.  OpenCoin announced today that it had closed an additional round of funding — the amount wasn’t specified — with Google Ventures and IDG Capital Partners. (Hat tip to GigaOM for the news.)  Last month, OpenCoin wrapped up an earlier angel round of funding from another high-profile group of technology VCs: Andreessen Horowitz, FF Angel IV, Lightspeed Venture Partners, Vast Ventures and the Bitcoin Opportunity Fund.
    Here’s some interesting theories about who or whom is Satoshi:
    A corporate conglomerate   
    Some researchers proposed that the name ‘Satoshi Nakamoto’ was derived from a combination of tech companies consisting of Samsung, Toshiba, Nakayama, and Motorola. The notion that the name was a pseudonym is clearly true and it is doubtful they reside in Japan given the numerous forum posts with a distinctly English dialect.
    Craig Steven Wright
    This Australian entrepreneur claims to be the Bitcoin creator and provided proof.  But soon after, his offices were raided by the tax authorities on ‘an unrelated matter’
    Soon after these stories were published, authorities in Australia raided the home of Mr Wright. The Australian Taxation Office said the raid was linked to a long-running investigation into tax payments rather than Bitcoin.
    Questioned about this raid, Mr Wright said he was cooperating fully with the ATO.
    “We have lawyers negotiating with them over how much I have to pay,” he said.
    Other potential creators
    Nick Szabo, and many others, have been suggested as potential Satoshi – but all have denied it:
    The New Yorker published a piece pointing at two possible Satoshis, one of whom seemed particularly plausible: a cryptography graduate student from Trinity College, Dublin, who had gone on to work in currency-trading software for a bank and published a paper on peer-to-peer technology. The other was a Research Fellow at the Oxford Internet Institute, Vili Lehdonvirta. Both made denials.
    Fast Company highlighted an encryption patent application filed by three researchers – Charles Bry, Neal King and Vladimir Oks­man – and a circumstantial link involving textual analysis of it and the Satoshi paper which found the phrase “…computationally impractical to reverse” in both. Again, it was flatly denied.
    THE WINNER: It was the NSA
    The NSA has the capability, the motive, and the operational capacity – they have teams of cryptographers, the biggest fastest supercomputers in the world, and they see the need.  Whether instructed by their friends at the Fed, in cooperation with their owners (i.e. Illuminati banking families), or as part of a DARPA project – is not clear and will never be known (unless a whistleblower comes forward).  In fact, the NSA employs some of the best mathematicians and cryptographers in the world.  Few know about their work because it’s a secret, and this isn’t the kind of job you leave to start your own cryptography company.
    But the real smoking Gun, aside from the huge amount of circumstantial evidence and lack of a credible alternative, is the 1996 paper authored by NSA “HOW TO MAKE A MINT: THE CRYPTOGRAPHY OF ANONYMOUS ELECTRONIC CASH” available here.
    The NSA was one of the first organizations to describe a Bitcoin-like system. About twelve years before Satoshi Nakamoto published his legendary white paper to the Metzdowd.com cryptography mailing list, a group of NSA information security researchers published a paper entitled How to Make a Mint: the Cryptography of Anonymous Electronic Cash in two prominent places, the first being an MIT mailing list and the second being much more prominent, The American Law Review (Vol. 46, Issue 4 ).
    The paper outlines a system very much like Bitcoin in which secure financial transactions are possible through the use of a decentralized network the researchers refer informally to as a Bank. They list four things as indispensable in their proposed network: privacy, user identification (protection against impersonation), message integrity (protection against tampering/substitution of transaction information – that is, protection against double-spending), and nonrepudiation (protection against later denial of a transaction – a blockchain!).
    “We will assume throughout the remainder of this paper that some authentication infrastructure is in place, providing the four security features.” (Section 1.2)
    It is evident that SHA-256, the algorithm Satoshi used to secure Bitcoin, was not available because it came about in 2001. However, SHA-1 would have been available to them, having been published in 1993.
    Why would the NSA want to do this?  One simple reason: Control.  
    As we explain in Splitting Pennies – the primary means the US dominates the world is through economic policy, although backed by bombs.  And the critical support of the US Dollar is primarily, the military.  The connection between the military and the US Dollar system is intertwined inextricably.  There are thousands of great examples only one of them being how Iraq switched to the Euro right before the Army’s invasion. 
    In October 2000 Iraq insisted on dumping the US dollar – ‘the currency of the enemy’ – for the more multilateral euro.  The changeover was announced on almost exactly the same day that the euro reached its lowest ebb, buying just $0.82, and the G7 Finance Ministers were forced to bail out the currency. On Friday the euro had reached $1.08, up 30 per cent from that time.
    Almost all of Iraq’s oil exports under the United Nations oil-for-food programme have been paid in euros since 2001. Around 26 billion euros (£17.4bn) has been paid for 3.3 billion barrels of oil into an escrow account in New York.  The Iraqi account, held at BNP Paribas, has also been earning a higher rate of interest in euros than it would have in dollars.
    The point here is there are a lot of different types of control.  The NSA monitors and collects literally all electronic communications; internet, phone calls, everything.  They listen in even to encrypted voice calls with high powered microphones, devices like cellphones equipped with recording devices (See original “Clipper” chip).  It’s very difficult to communicate on planet Earth in private, without the NSA listening.  So it is only logical that they would also want complete control of the financial system, including records of all electronic transactions, which Bitcoin provides.
    Could there be an ‘additional’ security layer baked into the Blockchain that is undetectable, that allows the NSA to see more information about transactions, such as network location data?  It wouldn’t be so far fetched, considering their past work, such as Xerox copy machines that kept a record of all copies made (this is going back to the 70’s, now it’s common).  Of course security experts will point to the fact that this layer remains invisible, but if this does exist – of course it would be hidden.
    More to the point about the success of Bitcoin – its design is very solid, robust, manageable – this is not the work of a student.  Of course logically, the NSA employs individuals, and ultimately it is the work of mathematicians, programmers, and cryptographers – but if we deduce the most likely group capable, willing, and motivated to embark on such a project, the NSA is the most likely suspect.  Universities, on the other hand, didn’t product white papers like this from 1996.
    Another question is that if it was the NSA, why didn’t they go through more trouble concealing their identity?  I mean, the internet is rife with theories that it was in fact the NSA/CIA and “Satoshi Nakamoto” means in Japanese “Central Intelligence” – well there are a few answers for this, but to be congruent with our argument, it fits their profile.
    Claims that the NSA created Bitcoin have actually been flung around for years. People have questioned why it uses the SHA-256 hash function, which was designed by the NSA and published by the National Institute for Standards and Technology (NIST). The fact that the NSA is tied to SHA-256 leads some to assume it’s created a backdoor to the hash function that no one has ever identified, which allows it to spy on Bitcoin users.
    “If you assume that the NSA did something to SHA-256, which no outside researcher has detected, what you get is the ability, with credible and detectable action, they would be able to forge transactions. The really scary thing is somebody finds a way to find collisions in SHA-256 really fast without brute-forcing it or using lots of hardware and then they take control of the network,” cryptography researcher Matthew D. Green of Johns Hopkins University said in a previous interview.
    Then there’s the question of “Satoshi Nakamoto” – if it was in fact the NSA, why not just claim ownership of it?  Why all the cloak and dagger?  And most importantly, if Satoshi Nakamoto is a real person, and not a group that wants to remain secret – WHY NOT come forward and claim your nearly $3 Billion worth of Bitcoin (based on current prices).
    The CIA Project, a group dedicated to unearthing all of the government’s secret projects and making them public, hasreleased a video claiming Bitcoin is actually the brainchild of the US National Security Agency.
    The video entitled CIA Project Bitcoin: Is Bitcoin a CIA or NSA project? claims that there is a lot of compelling evidences that proves that the NSA is behind Bitcoin. One of the main pieces of evidence has to do with the name of the mysterious man, woman or group behind the creation of Bitcoin, “Satoshi Nakamoto”.
    According to the CIA Project, Satoshi Nakamoto means “Central Intelligence” in Japanese. Doing a quick web search, you’ll find out that Satoshi is usually a name given for baby boys which means “clear thinking, quick witted, wise,” while Nakamoto is a Japanese surname which means ‘central origin’ or ‘(one who lives) in the middle’ as people with this surname are found mostly in the Ryukyu islands which is strongly associated with the Ryūkyū Kingdom, a highly centralized kingdom that originated from the Okinawa Islands. So combining Nakamoto and Satoshi can be loosely interpreted as “Central Intelligence”.
    Is it so really hard to believe?  This is from an organization that until the Snowden leaks, secretly recorded nearly all internet traffic on the network level by splicing fiber optic cables.  They even have a deep-sea splicing mission that will cut undersea cables and install intercept devices.  Making Bitcoin wouldn’t even be a big priority at NSA.
    Certainly, anonymity is one of the biggest myths about Bitcoin. In fact, there has never been a more easily traceable method of payment. Every single transaction is recorded and retained permanently in the public “blockchain”.  The idea that the NSA would create an anarchic, peer-to-peer crypto-currency in the hope that it would be adopted for nefarious industries and become easy to track would have been a lot more difficult to believe before the recent leaks by Edward Snowden and the revelation that billions of phone calls had been intercepted by the US security services. We are now in a world where we now know that the NSA was tracking the pornography habits of Islamic “radicalisers” in order to discredit them and making deals with some of the world’s largest internet firms to insert backdoors into their systems.
    And we’re not the only ones who believe this, in Russia they ‘know’ this to be true without sifting through all the evidence.
    Nonetheless, Svintsov’s remarks count as some of the more extreme to emanate from the discussion. Svintsov told Russian broadcast news agency REGNUM:All these cryptocurrencies [were] created by US intelligence agencies just to finance terrorism and revolutions.Svintsov reportedly went on to explain how cryptocurrencies have started to become a payment method for consumer spending, and cited reports that terrorist organisations are seeking to use the technology for illicit means.
    Let’s elaborate on what is ‘control’ as far as the NSA is concerned.  Bitcoin is like the prime mover.  All future cryptocurrencies, no matter how snazzy or functional – will never have the same original keys as Bitcoin.  It created a self-sustained, self-feeding bubble – and all that followed.  It enabled law enforcement to collect a host of criminals on a network called “Silk Road” and who knows what other operations that happened behind the scenes.  Because of pesky ‘domestic’ laws, the NSA doesn’t control the internet in foreign countries.  But by providing a ‘cool’ currency as a tool, they can collect information from around the globe and like Facebook, users provide this information voluntarily.  It’s the same strategy they use like putting the listening device in the chips at the manufacturing level, which saves them the trouble of wiretapping, electronic eavesdropping, and other risky methods that can fail or be blocked.  It’s impossible to stop a cellphone from listening to you, for example (well not 100%, but you have to physically rewire the device).  Bitcoin is the same strategy on a financial level – by using Bitcoin you’re giving up your private transactional information.  By itself, it would not identify you per se (as the blockchain is ‘anonymous’ but the transactions are there in the public register, so combined with other information, which the NSA has a LOT OF – they can triangulate their information more precisely.
    That’s one problem solved with Bitcoin – another being the economic problem of QE (although with a Bitcoin market cap of $44 Billion, that’s just another day at the Fed buying MBS) – and finally, it squashes the idea of sovereignty although in a very, very, very subtle way.  You see, a country IS a currency.  Until now, currency has always been tied to national sovereignty (although the Fed is private, USA only has one currency, the US Dollar, which is exclusively American).  Bitcoin is a super-national currency, or really – the world’s first one world currency.
    Of course, this is all great praise for the DOD which seems to have a 50 year plan – but after tens of trillions spent we’d hope that they’d be able to do something better than catching terrorists (which mostly are artificial terrorists).
    Posted: June 13, 2017, 4:50 pm
    (GLOBALINTELHUB.COM) – 6/9/2017 For those who are not drooling on their lazy-boy high on Prozac and Lays (both strong brands) know that the world is not as seen on TV.  But even in TV, on shows such as "White Collar" - the strange relationship between the 'police' and the 'bandits' can be seen and understood.  The differences in many cases between a career Special Agent and cat burglar can be thin circumstantial nuances; and they often 'flip' sides, most notably in the case we all know about Frank Abagnale, now a successful security and fraud consultant, working with the FBI to detect serious financial fraud.  Let's take a step back for a moment; the "FBI" hires mostly accountants, and they pursue a number of crimes but most notably financial fraud.  They serve as the police for the CFTC, the SEC, for extreme enforcement actions, as well as investigating a number of issues - from their website:
    Our Priorities
    Protect the United States from terrorist attack
    Protect the United States against foreign intelligence operations and espionage
    Protect the United States against cyber-based attacks and high-technology crimes
    Combat public corruption at all levels
    Protect civil rights
    Combat transnational/national criminal organizations and enterprises
    Combat major white-collar crime
    Combat significant violent crime
    Our People & Leadership
    The FBI employs 35,000 people, including special agents and support professionals such as intelligence analysts, language specialists, scientists, and information technology specialists. Learn how you can join us at FBIJobs.gov. For details on our executives and organizational structure, see our Leadership & Structure webpage.
    What should stick out to readers in an environment where a potentially politicized and corrupt FBI (at least, the leadership) is the "Combat public corruption at all levels" - and going back to the age old regulatory paradox, 'who watches the watchers' let's take a look at the old dog who made the FBI what it is today; J. Edgar Hoover.
    In case you have not, and are interested in this topic, take a weekend and read this must read book about the FBI: J. Edgar Hoover: The Man and the Secrets - why bother reading about a figure who is long gone and has no surviving heirs?  Because in order to understand where we are today, with the situation with the FBI and Trump, we need to understand where we came from.  Certainly the FBI has transformed since 1972; however the power, scope, size, methods, political leanings, and other elements of the FBI still remain as established by Hoover.
    Let's dismantle some of the false images many have about the FBI.  The FBI doesn't 'solve crimes' as on popular TV shows like "CSI" - although they do have excellent forensics labs, this rarely (but sometimes) leads to a conviction.  Primarily, the FBI relies on informants, "Confidential Informants" (CIs), tips, and 'turning' - a technique popularized by Hoover and used to this day.  Global Intel Hub interviewed several anonymous sources to confirm this information.  Here's how it works.  The FBI will arrest a petty low level criminal and get him to 'turn' on his boss; they will threaten him with life in prison, maybe poke his eyes a little or something, and get him to become a witness in court.  Also they will want a full blueprint of the organization - and in exchange they will get into the Witness Protection Program - yes this program really exists and there are literally thousands of people in this program:
    As of 2013, 8,500 witnesses and 9,900 family members have been protected by the U.S. Marshals Service since 1971.
    But before entering WITSEC, which is an endgame, the FBI can use informants for years.  CIs can be bank employees (i.e. Wall St.), mafia agents, corporate executives .. basically anyone.  Take a look at the case of CI gone bad:
    For 30 years, DeVecchio was one of the FBI 's most important mob busters.
    DeVecchio was Scarpa's handler, and Scarpa was more than an ordinary stool pigeon -- he had also allegedly served as muscle for the FBI when the bureau needed some extra legal assistance in making difficult cases. As a result, he was allegedly accorded special, sometimes questionable, favors, including tips on coming indictments that allowed Scarpa's associates to skip town in advance. But, in aiding his informant to commit murder, prosecutors now allege that DeVecchio went too far in protecting his valuable mob asset. Law enforcement sources say DeVecchio may have also enriched himself in the process.
    Yes, you read correctly - for 30 years, "DeVecchio" was a CI that gave the FBI information about mob activities.  A useful asset, but the underlying conclusion is simple - the FBI doesn't 'solve' crimes.   With the recent testimony of James Comey, a lawyer by trade, all of this needs to be taken into consideration.  How has the FBI and its internal politics & policies affected significant events in American history; JFK, 911, the credit crisis, and others?
    Another strategy which now is no secret used by Hoover, was obtaining secret information by trickery or surveillance, and then using it to blackmail the target to get them to do what they want.  Hoover supposedly kept dossiers on over 10,000 americans; however long the list is - the method was simple.  Get the dirt on the target then use it to manipulate them.  If you think this is fanciful; again - read this book  J. Edgar Hoover: The Man and the Secrets.
    The point is that, there's no way to know for sure what's going on inside the FBI today.  The reason we need to look at Hoover's FBI is because now that he's long gone, and there's even been a DiCaprio film about him, we can see a bigger picture of what was really going on in the FBI at that time.
    So it should be no surprise, that an FBI director, would be meddling in domestic politics - whether it be in elections or by dealing with sitting Presidents.  Everyone was scared of Hoover, even US Presidents both before and after they were elected.  Now, clearly this was a unique individual who built the FBI in his own image during a unique period in history - there will never be another Hoover.  But all this history about the FBI should be noted, following to today's FBI that literally is 'creating' terrorists right here in the USA:
    WASHINGTON — The F.B.I. has significantly increased its use of stings in terrorism cases, employing agents and informants to pose as jihadists, bomb makers, gun dealers or online “friends” in hundreds of investigations into Americans suspected of supporting the Islamic State, records and interviews show.
    Undercover operations, once seen as a last resort, are now used in about two of every three prosecutions involving people suspected of supporting the Islamic State, a sharp rise in the span of just two years, according to a New York Times analysis. Charges have been brought against nearly 90 Americans believed to be linked to the group.
    The increase in the number of these secret operations, which put operatives in the middle of purported plots, has come with little public or congressional scrutiny, and the stings rely on F.B.I. guidelines that predate the rise of the Islamic State.
    While F.B.I. officials say they are careful to avoid illegally entrapping suspects, their undercover operatives are far from bystanders. In recent investigations from Florida to California, agents have helped people suspected of being extremists acquire weapons, scope out bombing targets and find the best routes to Syria to join the Islamic State, records show.
    Here's how it works.  The FBI 'suspects' someone may be an extremist (they are Muslim, or at least look like).  They pose as another Muslim and start to engage in a conversation about making a 'plot' such as a 'bomb' - but at the last moment, arrest the entrapped individual.  This accomplishes a few things, one - they can make a long list of cases 'solved' that would have otherwise become terrorist attacks (they are working hard for their 8 Billion budget).  Two, it scares the population that the threat of terrorism is 'real' (when in reality, you are more likely to be struck by lightning than to be attacked by a terrorist).  This is reinforced by the media 'terrorism terrorism terrorism'.
    The paradoxical question here is - left to their own would these potential 'terrorists' have committed any acts of terror, or not?  Of course, foiling a crime before it happens is always ideal.  But at what point does entrapment become 'encouragement' - we're not talking about drug dealing here, terrorism is a serious thing (people can be killed).
    But defense lawyers, Muslim leaders and civil liberties advocates say that F.B.I. operatives coax suspects into saying and doing things that they might not otherwise do — the essence of entrapment.“They’re manufacturing terrorism cases,” said Michael German, a former undercover agent with the F.B.I. who researches national security law at New York University’s Brennan Center for Justice. In many of the recent prosecutions, he said, “these people are five steps away from being a danger to the United States.”
    The American Mafia, once seen as one of the most popularized 'threats' has been on the wane, as most of them have moved from petty crimes to legitimate businesses (or semi-legit) .. An organization like the FBI needs terrorists and other artificial 'threats' to justify 35,000 + employees, just as the military and other parts of the DOD need "Russia" to act as a looming potential threat to justify trillions in military spending.  (Anyone with mild room temperature IQ knows Russia, China, Iran, North Korea all working together pose no real threat to USA militarily, economically, or culturally).
    Bear this in mind next time the news media tries to distract viewers from real news - Comey is not news.  It's irrelevant.  Trump's reaction, irrelevant.  Remember, the entire "Russia Investigation" never existed, it was all a liberal conspiracy created or to use their term 'fake news' in order to destroy Trump and use it in Illuminati style 'killing two birds with one stone' as a prelude to war and specifically to build a pipeline through Syria as the next "Iraq" to plunder, with project Ukraine a failure the virus needs to expand into untapped resources to colonize, and Trump simply stood in the way of that policy.  The FBI being a critical component of the giant global octopus with hands everywhere, needed to jump in with their own tune to play in the melody.
    For a detailed breakdown of how the global system works in reality (not 'as seen on TV') checkout Splitting Pennies - Understanding Forex
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    Posted: June 10, 2017, 6:26 pm