- Walls, Going Viral
By Chris at www.CapitalistExploits.at
Market dislocations occur when financial markets, operating under stressful conditions, experience large widespread asset mispricing.
Welcome to this week’s edition of “World Out Of Whack” where every Wednesday we take time out of our day to laugh, poke fun at and present to you absurdity in global financial markets in all it’s glorious insanity.
While we enjoy a good laugh, the truth is that the first step to protecting ourselves from losses is to protect ourselves from ignorance. Think of the “World Out Of Whack” as your double thick armour plated side impact protection system in a financial world littered with drunk drivers.
Selfishly we also know that the biggest (and often the fastest) returns come from asymmetric market moves. But, in order to identify these moves we must first identify where they live.
Occasionally we find opportunities where we can buy (or sell) assets for mere cents on the dollar – because, after all, we are capitalists.
In this week’s edition of the WOW we’re covering walls
Right now fully one third of the world’s countries have built (or are building) walls.
Two months ago in an article entitled “7 Steps To The Easiest Short In Recent History” we looked at a combination of factors supporting the inevitable disintegration of the Euro currency experiment:
- Importing Hatred – mass immigration from countries the west is bombing.
- The Rise of The Right – Political correctness out the window.
- Borders Close – Threats become evident.
- The Victims Retaliate – Vigilante violence escalates. An increase in racism.
- Isolation – internal borders drawn within countries. Laws passed isolating classes of society.
- European Integration Disintegrates – Inward looking, rising popularism. Divisions along ethnic/tribal lines.
- Banking pressures add pressure to the Euro – The financial pressures accelerating all of the above.
If you look carefully at each of these steps you’ll notice they all entail in some way either physical or psychological barriers being built. Often both.
Today we’re taking a look at the incredible global shift taking place towards more physical barriers and then we ask some questions about what this means for us all and how we may protect ourselves and profit from what appears to be an unstoppable trend.
According to a recent article in the Washington post:
“In 2015, work started on more new barriers around the world than at any other point in modern history. There are now 63 borders where walls or fences separate neighboring countries.”
Most of these walls are being erected within the European Union which is not surprising. As mentioned before, Brexit is as much about the refugee crisis, stopping mass immigration, and what is seen by many as the islamization of Britain as it is about the myriad insane regulations the Eurocrats in Brussels foisted on our scone eating and tea drinking friends.
But Europe is not alone. Walls are being constructed across the Middle east, Asia and Africa, making this a global trend.
The quite brilliant Dr. Pippa Malmgren the former US presidential advisor and author of Signals: The Breakdown of the Social Contract and the Rise of Geopolitics wrote an excellent articleon the topic of walls being built around the globe arguing that countries can put up walls but that capital will pull them down again.
“Walls don’t usually work or last. Hadrian’s Wall didn’t stop the Scots. The Great Wall of China didn’t stop the Mongols or the British. The Berlin Wall too was overwhelmed by the tide of history. In the end, capital finds a way to flow to wherever the profits are, on either side of walls. But, for now, it looks like money will flow, as it usually does, to the side of walls that permits the greatest freedom of movement, whether that be a movement of people or capital or goods.”
While I don’t disagree with Pippa, timeframes matter. Walls can remain, and hamper capital flows for long timeframes. The Berlin wall hampered trade and capital flows for 28 years. As an investor this matters to me – a lot.
Why These Walls?
These walls are quite simply a manifestation of the economic consequences of policy decisions taken over the course of multiple decades.
As mentioned the vast majority of the walls being built are in Europe. European politicians are erecting these walls while failing to understand that it is socialism and the welfare state in particular that attracts migrants. Walls do a poor job of keeping out uneducated angry people of a different language, different race, different religion, and different culture. Far better, change the system.
Imagine for a minute that there was zero welfare in Europe, which is going to happen for simple reasons of mathematics anyway. Imagine further that in order to gain entry to live in any European country immigrants needed to prove their worth, by way of education, capital, skills or even cultural beliefs, and be able to pay their own way, by way of savings, working, and contributing to the society which they wish to enter. With no handouts and serious repercussions for not pulling their weight (starving) the entire migrant crisis that engulfs Europe today would be a complete non-event.
Instead the misguided globalist elites continue with unsustainable welfare policies whereby free food, free housing, free medical care, and free schooling are provided to both citizens and immigrants alike.
When cultural differences rise up, instead of holding steady to their existing chosen culture, they resort to a political correctness justifying, explaining away and by default condoning behaviours which are anathema to the citizens. They then scratch their heads at the problem of millions of Africans and Arabs swarming in to get a slice of the good life. A 10 year old can piece this together.
Every one of us would do the same thing. The problem isn’t that Europe is being flooded by immigrant’s. The problem is that Europe isn’t attracting the “best and brightest”, but instead importing millions of people who’ve spent their lives picking up bad habits from political, economic, and social conditions which hark back to the dark ages.
The Power of Numbers
When a single person or family with bad habits migrates to a new society, the social and economic forces prevalent in that society tend to force them to assimilate or be rejected. Bad behaviour gets them into trouble pretty quickly and they are generally ostracised. Many leave and return to their homelands as a result. The culture shock is too much for them.
On the other hand, when hundreds arrive they quite simply bring with them their own culture and begin enforcing it in their new homeland. There are now areas across Europe where it is no longer safe to go… even for the police.
This massive culture clash is what is fuelling the frantic wall building we now see.
The good news is that this will accelerate the end of the Euro and the end of the socialist welfare state which is now well and truly in motion.
Of course walls don’t build themselves and so it’s the rise of “strong men” that provides the narrative and populism for these barriers.
One reason Putin is one of, if not THE most popular head of state in the world, is due to his stance of looking after Russia and Russians and not bending to the nauseating political correctness that has pervaded the developed world.
A political correctness I may add that is on a very short fuse as discussed in “Why A Politically Correct West Ensures A Trump Victory”:
It’s not just physical walls but trade barriers, such as tariffs, quotas and subsidies which are all rising at the same time too.
The movement of capital has become so onerous that opening a simple bank account in a foreign country has become more painful than a root canal treatment. Yet one more reason I think Bitcoin has asymmetric potential. The free market always finds a way.
A Compound Fracture
The socialist experiment of the nanny state is in it’s death throes and unfortunately it is capitalism which is being blamed, rather than crony capitalism and the great Ponzi scheme that is the welfare state.
The building of walls will not solve these issues. What they will do is simply bring the very last tool out of the central bankers toolkit. That of fiscal stimulus.
This too will not work. Why?
Collateral has been falling in the global system, accelerating the collapse in the velocity of money, and the collapse in liquidity, even while central bankers have flooded the world with credit.
Couple this with the demographic headwinds to growth and debt and it’s pretty clear to me that the socialist experiment that the developed world has enjoyed since WWII has peaked and instead of receding back into the shadows like a shy fox, is more likely to spontaneously combust in the public square.
This sad trend of wall building is likely to be part of our existence for some time yet and will do nothing to solve many of the political or financial problems but rather accelerate them.
Some Facts to Consider
When barriers to trade are reduced GDP rises and when barriers are increased GDP falls. I’ll let you figure out which way GDP growth is going over the next few years.
Borders themselves are a relic of the nation state, which itself is a constipated ideological structure which grew out of the industrial revolution. It is absolutely coming to an end and is accelerating in its decline. These last ditch efforts to save it will simply accelerate that decline.
Think about it like this. If the math doesn’t work with rising GDP then pray tell how it’s going to work with falling GDP. No. What we’ll get is simply another injection to the patient, this time from fiscal rather than monetary stimulus, which itself will simply increase the already unmanageable debt burden. What we don’t know is when the market repudiates this insanity.
Looking at the bond market right now it’s entirely possible (though we won’t know for sure until after the fact) that the highs for the bond market were back in March of this year. Either way the end result will be chaotic and painful for those caught on the wrong side of it.
Areas to Watch
- Defence spending: Every country will likely be spending more money on defence.
- Contracting GDP will prove to increase security concerns as the bedfellows of poverty and violence manifest themselves in society. Europe in particular will likely enjoy rising security concerns. I discussed the topic in more detail here.
- Consumer trends which favour staying at home will proliferate. Netflix over the cinema, home deliveries over mall shopping, and private dinner parties over restaurants.
- The above wall building will hasten the bankruptcy of the welfare state. Watch the bond and currency markets. Huge opportunity there.
Looking around the world there are still places which are NOT erecting walls.
While we can all go long cement and barbed wire, really what I’m curious to know about your geographical preferences. And please comment below if you have somewhere specific as I’d love to know your reasoning.
Cast your vote here and also see what others thinkKnow anyone that might enjoy this? Please share this with them.
Investing and protecting our capital in a world which is enjoying the most severe distortions of any period in mans recorded history means that a different approach is required. And traditional portfolio management fails miserably to accomplish this.
And so our goal here is simple: protecting the majority of our wealth from the inevitable consequences of absurdity, while finding the most asymmetric investment opportunities for our capital. Ironically, such opportunities are a result of the actions which have landed the world in such trouble to begin with.
– Chris
“National borders aren’t even speed bumps on the information superhighway.” — Tim May
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- Paul Craig Roberts Roars "Rigged Elections Are An American Tradition"
Authored by Paul Craig Roberts,
Do Americans have a memory? I sometimes wonder.
It is an obvious fact that the oligarchic One Percent have anointed Hillary, despite her myriad problems to be President of the US. There are reports that her staff are already moving into their White House offices. This much confidence before the vote does suggest that the skids have been greased.
The current cause celebre against Trump is his conditional statement that he might not accept the election results if they appear to have been rigged. The presstitutes immediately jumped on him for “discrediting American democracy” and for “breaking American tradition of accepting the people’s will.”
What nonsense! Stolen elections are the American tradition. Elections are stolen at every level—state, local, and federal. Chicago Mayor Richard J. Daley’s theft of the Chicago and, thereby, Illinois vote for John F. Kennedy is legendary. The Republican US Supreme Court’s theft of the 2000 presidential election from Al Gore by preventing the Florida vote recount is another legendary example. The discrepancies between exit polls and the vote count of the secretly programmed electronic voting machines that have no paper trails are also legendary.
So what’s the big deal about Trump’s suspicion of election rigging?
The black civil rights movement has fought vote rigging for decades. The rigging takes place in a number of ways. Blacks simply can’t get registered to vote. If they do get registered, there are few polling places in their districts. And so on. After decades of struggle it is impossible that there are any blacks who are not aware of how hard it can be for them to vote. Yet, I heard on the presstitute radio network, NPR, Hillary’s Uncle Toms saying how awful it was that Trump had cast aspersion on the credibility of American election results.
I also heard a NPR announcer suggest that Russia had not only hacked Hillary’s emails, but also had altered them in order to make incriminating documents out of harmless emails.
The presstitutes have gone all out to demonize both Trump and any mention of election rigging, because they know for a fact that the election will be stolen and that they will have the job of covering up the theft.
Don’t believe the polls that say Hillary won the Q&A sessions or the polls that say Hillary is ahead in the election. Pollsters work for political organizations. If pollsters produce unwelcome results, they don’t have any customers. The desired results are that Hillary wins.
The purpose of the rigged polls showing her to be ahead is to discourage Trump supporters from voting.
Don’t vote early. The purpose of early voting is to show the One Percent how the vote is shaping up. From this information, the oligarchs learn how to program the electronic machines in order to elect the candidate that they want.
- Statistician Warns Americans To "Ignore The Capricious Polls"
Submitted by Salil Mehta via Statistical Ideas blog,
Sea of faulty polls
In this article we cover the theoretical bases for two interconnected ideas that we've discussed recently:
(a) that the empirical polling results are not as dire as current landslide mainstream media projections make it out to be, and
(b) many polls are oscillating about impossibly low probabilities right now for Donald Trump.
This year is genuinely unique in merging several fundamental aspects, with a largely disenfranchised voting base across the country (i.e., record undecideds), and pollsters unable or unwilling to properly assess the true probability for Mr. Trump (and their incoherent polls evidence this). This is not a matter of apologizing for the ground-level odds currently shown by mainstream media, or that the average Hillary Clinton lead is merely unsustainably high. This loses the forest through the trees, as we theoretically prove here.
Start by studying a sample of the general election polls below, taken in just the past couple days.
Do you see anything wrong there? If you don't, then you have no business being around polling data.
The average margin of error on these 7 spreads shown is only 3%. Most polls should therefore be within a few percent of the 6% average spread that is advertised by media. But instead most are not!
For example, the difference between the highest Ms. Clinton spread and the lowest Ms. Clinton spread is >14 percentage points! And the standard deviation among these mainstream polls is 5%. So both have to be added together, and each is already higher than 3%! That's an unusual, impossible outcome through luck alone. Therefore something is misrepresented in the polls.
Also right now 2 of the 7 polls favor Donald (you just' don't hear about them), so double the 10-15% odds he is being given. In the final analysis of this trinomial data, on November 9 we'll look back and see only one poll being correct and most were flat out wrong. This evidence below is a breach of the probability theory behind proper polling, where most polls should see the correct spread within the margin of error interval (that's what the interval's definition must be!) If the margins are therefore completely busted, then so too are the egregious spreads that are seen to be all over the place (and mostly untrustworthy). Likely the correct expected spread right now is 4-5%, and the larger spreads are coming from pollsters that ironically also have the highest margin of errors (casting further suspicion on how close the election really is for Americans). We stand by our long-running estimate that the current probability for a Donald Trump victory is about in the 20% range, or twice what mainstream media is projecting. Of course that is low, but to some it's still a compelling 1 in 4 chance (and much different than some might expect given all the twists and turns this campaign season has brought us). It's also a better reflection of the true odds, versus those dished out by the same inane talking heads who recently gave you the Brexit "remain" prediction, or the NeverTrump prediction!
So there you have it as clearly shown as possible. If these margins of error are correct, then most polls would have the spreads located within a few percent of 6% (so 3%, to 9%). Yet the majority of the polls are outside of this 3%, to 9%, interval. Probabilistically impossible. The idea that whatever the correct spread is determined to be on November 9, we will ultimately prove -shockingly we might add- that one poll was correct but also that most of these other polls were wrong. Those polls (unsure right now which) are because there the correct spread will have been outside of their margin of error intervals.
The only correction anyone can make now to the failed margin of error is to enlarge it, in order to encapsulate most of the other intervals about the correct spread. Without these overlaps, we can't discuss spreads in the media, since the data is from an entirely corrupt polling system! The direction of unbiasing the data is also obvious.
To start with, the only correct expected value for the spread has to be reduced since that is the direction of asymmetric bias. The largest polling spreads have become too extreme and must be brought in already. Combined with larger margins of error. The result of this combination is a correct spread that is lower at about 4-5%, and a margin of error that is roughly double what's been advertised (5-6%). Implying Donald Trump's chances of winning is nearly twice what the mainstream media's been floating around.
How do we get a double of the margin of error, and the implications of it for where the expected spread should be? The likelihood that we would get a result of one where 2/3 of the polling spreads are inside the margin of error interval and yet most don't fall outside of the interval, is only about 1/4 or so of the time (other possible outcomes are that all, or most spreads within all margin of error intervals, or that no spreads overlap at all). In order to get that likelihood rebalanced back at majority, we need to have wider margins so the maximum likelihood outcome we expect to see at that time works out.
Note that these topics were discussed in a recently viral article that last weekend was on the top of ZeroHedge and reddit, and amassing 1/2 million reads and thousands of shares. And we should note that a day after this article of ours noting the probability pricing arbitrage on gabling bets that Mr. Trump's spread would tighten, the largest bet ever was wagered for him.
Also the effect of wider margins is that the probability of Donald leading in the actual election doubles from the 10-15% or so that the current pollsters show (and he has not recently deteriorated from). Hence arriving at an actual probability for him that must be greater than 20% or so. Larger uncertainty therefore, given the undecideds for this candidate, and a more narrow spread. This is what we have been saying all along.
The last topic here is that we can see that the higher Hillary spreads are coming from pollsters that have the higher margins of error, though we also showed above they those error intervals are still not wide enough. It should be plain that between the highest spreads and the lowest spreads, the highest ones (those over 9% or so) should be the ones treated with the greatest reservation. Completed by the same shamelessly ignorant and flawed pollsters who gave you #NeverTrump and the Brexit stay prediction, both not so long ago.
At this point it makes sense for Americans to ignore the capricious polls, and simply vote their conscious on Election Day. The numbers in the polls don't add up to the significance the polling conclusions convey. Both candidates have their strengths, and Americans are torn. The video leak for Donald Trump was regrettable for all Americans, especially in these final weeks. But it will not drive his support to zero. Hillary Clinton for her part has not shown herself to be that much more of a transparent and flawless candidate (a true Scorpion).
- GOP Sues Pennsylvania Over "Poll Watcher" Restrictions
Pennsylvania has become ground zero for “election rigging” concerns over the past two election cycles. In 2012, Romney’s performance in Philadelphia drew a huge amount of suspicion when he received exactly 0 votes in 59 voting divisions within the city. In fact, the vote count within those 59 divisions was an astonishing 19,605 to 0. While no one would argue that many Philadelphia neighborhoods tend to skew democratic, it certainly seems incredibly unlikely that, out of nearly 20,000 voters, not a single person preferred Mitt Romney.
Of course, the city also drew heavy criticism after the Black Panthers sent “security” to stand outside numerous polling stations with clubs. Sure, no voter intimidation there.
So it should come as little surprise that the GOP recently filed a lawsuit seeking additional oversight of polling stations in Pennsylvania. According to the Washington Examiner, the GOP is specifically looking to lift restrictions that prevent poll watchers from serving in any county outside of their specific county of residence.
Pennsylvania’s Republican Party wants to overturn a court order that restricts who can volunteer as poll watchers.
The GOP wants to overturn a declaratory judgment that would restrict poll watchers from serving only in their county of residence, according to the lawsuit. The lawsuit comes as GOP nominee Donald Trump has pushed for poll watchers in Pennsylvania, saying that his supporters need to go to “certain areas and watch.”
The suit also takes aim at the Democratic stronghold of Philadelphia County, where Republicans are “not a majority of registered voters.”
The lawsuit charges the order made by a lower court judge violates the U.S. Constitution, specifically the rights to due process and equal protection as voting is a fundamental right.
“The Pennsylvania poll watcher statute arbitrarily and unreasonably distinguishes between voters within the same electoral district by allowing some, but not others, to serve as poll watchers,” the lawsuit said.
The lawsuit also questions the integrity of the vote, and says Philadelphia County routinely handicaps the party from “fully and fairly staff polling places with poll watchers.”
Of course, many districts in Philadelphia enjoyed unprecedented voter turnout in 2008 and 2012 in support of President Obama. That said, the real question is whether the Hillary political machine will be able to drive the same level of enthusiasm in the 2016 election.
- The Crook Versus The Monster
Thanks to timely assists from Wikileaks, Trump has successfully framed Hillary Clinton as a crooked politician. Meanwhile, Clinton has successfully framed Trump as a dangerous monster. If the mainstream polls are accurate, voters prefer the crook to the monster. That makes sense because a crook might steal your wallet but the monster could kill you.
As of today, Dilbert Creator Scott Adams writes, Clinton has the superior persuasion strategy. Crook beats monster.
Reality isn’t a factor in this election, as per usual. If the truth mattered, voters might care that the Democratic primaries were rigged against Sanders. They might care that the Clinton Foundation looks like a pay-to-play scheme. They might care that the FBI gave Clinton a free pass. They might care that we know Clinton cheated in at least one debate by getting a question in advance. They might care that Clinton’s dirty-tricks people incited the violence at Trump rallies. They might care that Clinton’s “speaking fees” were curiously high. They might care about all of that. But they don’t, because a crook is still a safer choice than a monster.
The biggest illusion this election is that we think the people on the other side can’t see the warts on their own candidate. But I think they do.
Clinton supporters know she is crooked, but I think they assume it is a normal degree of crookedness for an American politician. Americans assume that even the “good” politicians are trading favors and breaking every rule that is inconvenient to them. I’ve never heard a Clinton supporter defend Clinton as being pure and honest. Her supporters like her despite her crookedness.
Likewise, Trump supporters know what they are getting. They know he’s offensive. They know he’s under-informed on policies. They know he pays as little in taxes as possible. They know he uses bankruptcy laws when needed. They know he ignores facts that are inconvenient to his message. They just don’t care. They want to push the monster into Washington D.C., close the door, and let him break everything that needs to be broken. Demolition is usually the first step of building something new. And Trump also knows how to build things when he isn’t in monster mode.
Clinton’s team of persuaders have successfully crafted Trump’s offensive language and hyperbole into an illusion that he’s a sexist/racist in some special way that is different from the average citizen. The reality is that everyone is a little bit sexist and a little bit racist. We’re all wired that way. There’s no escape if you are human. Our brains are pattern-recognition machines, but not good ones. That’s what gets us in trouble. We see patterns where none exist. None of us are exempt from that. But we can use our limited sense of reason to see past it.
Clinton’s persuaders have taken advantage of the public’s faulty pattern recognition to build an illusion about Trump that he is a horrible monster who hates people because of their genitalia, their skin pigmentation, and their sexual preferences. I don’t believe Trump holds any of those views in 2016. But there is plenty of confirmation bias to make us think he does, thanks to Team Clinton’s persuasion efforts. For example…
There was the time Trump said we need good border control with Mexico, and Clinton turned that into something racist because of the way he worded it.
There was the time Trump said we need to try harder to keep out terrorists who want to kill us, and Clinton turned that into something racist because of the way he worded it.
There was the time that Trump said a judge with Mexican heritage might be biased against him because 90% of American citizens with Mexican heritage are biased against him. Clinton turned that into something racist because of the way Trump worded it.
There was the time that Trump didn’t need much sleep one night and decided to fire off a few thoughts on Twitter about one of his accusers. But because it was late at night, Clinton framed that as some sort of “meltdown” to prove Trump is unstable.
I realize I can’t change anyone’s mind if they see Trump as a monster who hates people with different genitalia and with skin pigmentation that is far superior to his own pasty-orange covering. To me, those illusions about Trump are ridiculous on face value. I can’t change anyone’s mind if they see Trump as a monster. So instead I will make you a promise.
My promise: If Trump gets elected, and he does anything that looks even slightly Hitler-ish in office, I will join the resistance movement and help kill him. That’s an easy promise to make, and I hope my fellow citizens would use their Second Amendment rights to rise up and help me kill any Hitler-type person who rose to the top job in this country, no matter who it is.
As I often say, Democrats generally use guns to commit crimes. Republican use guns for sport and for self-defense. If you are a Republican gun-owner, and you value the principles of the Constitution, I’m confident you would join me in the resistance movement and help kill any leader that exhibited genuine animosity toward people because of their genitalia, sexual preference, or skin pigmentation.
In other words, I’m willing to bet my life that the “monster” view of Trump is an illusion.
That said, I also don’t know which candidate has the best policies. I wouldn’t risk my life for any of their tax plans or ISIS-fighting strategies. I’m only interested in helping the public see past their hallucinations about the monster under the bed. You’re on your own to decide who has the best policies.
* * *
If you like books, Adams points out you might like his book because it is a book. Bigly.
- Venezuela Braces For Revolution After Maduro Blocks Recall Referendum
Once a “flagship socialist nation,” Venezuela has suffered over the past couple of years from a dramatic economic crisis that has resulted in severe shortages of food, clean water, electricity, medicines and hospital supplies all of which have resulted in a desperate population which has resorted to the black market and violence for survival. That said, Venezuela likely inched one step closer to revolution on Friday when Maduro’s leftist government took steps to block a recall referendum that could have resulted in his ouster. According to the US News and World Report, Venezuelan opposition leaders are calling the efforts of Maduro “a coup” in light of the broad based public support of the recall effort.
Venezuela is bracing for turbulence after the socialist government blocked a presidential recall referendum in a move opposition leaders are calling a coup.
The opposition is urging supporters to take to the streets, beginning with a march on a major highway Saturday led by the wives of jailed activists, while a leading government figure is calling for the arrest of high-profile government critics.
Polls suggest socialist President Nicolas Maduro would lose a recall vote. But that became a moot issue on Thursday when elections officials issued an order suspending a recall signature drive a week before it was to start.
“What we saw yesterday was a coup,” said former presidential candidate Henrique Capriles, who had been the leading champion of the recall effort. “We’ll remain peaceful, but we will not be taken for fools. We must defend our country.”
International condemnation was swift. Twelve western hemisphere nations, including the U.S. and even leftist-run governments such as Chile and Uruguay, said in a statement Friday that the suspension of the referendum and travel restrictions on the opposition leadership affects the prospect for dialogue and finding a peaceful solution to the nation’s crisis.
The Maduro government has claimed that the recall was halted due to “irregularities in a first-round of signature gathering” though the public, 80% of whom polls suggest supported the recall efforts, aren’t buying it. Meanwhile, Maduro loyalists are calling for opposition leaders to be imprisoned for attempts to commit election fraud.
Critical television stations have been closed and several leading opposition activists have been imprisoned. The country’s supreme court, packed with government supporters, has endorsed decree powers for Maduro and said he can ignore Congress following a landslide victory for the opposition in legislative elections.
The election commission, which has issued a string of pro-government rulings, halted the recall process on grounds of alleged irregularities in a first-round of signature gathering.
Polls suggest 80 percent of voters wanted Maduro gone this year, and the electoral council on Tuesday also ordered a delay of about six months in gubernatorial elections that were slated for year-end which the opposition was heavily favored to win. It gave no reason for the delay.
Meanwhile, one of his most powerful allies, Diosdado Cabello, said top opposition leaders should be jailed for attempting election fraud. And opposition leaders said a local court blocked eight of their leaders from leaving the country.
Of course, the integrity of “elections” in Venezuela have long been questioned particularly after WikiLeaks posted the following cable linking Hugo Chavez to a mysterious company that came out of nowhere in 2000 and suddenly snatched up major contracts to supply voting machines around the world. The company, Smartmatic, included a Hugo Chavez campaign adviser on it’s board. Curiously, according to Gateway Pundit, the company’s board also included Lord Mark Malloch-Brown, a man who served on the board of George Soros’s Open Society Foundations and who was formerly the vice-chairman of Soros’s Investment Funds.
“Ironically,” shortly after winning a “multi-million” dollar contract to supply these voting machines in Venezuela, Chavez won a landslide victory in the 2004 elections that all but destroyed his political opposition.
But, what is perhaps even more disturbing is that Smartmatic has also secured major contracts to supply voting machines for 16 states in the U.S., including key battleground states like Arizona, Colorado, Florida, Michigan, Nevada, Pennsylvania and Virginia.
Which leaves us with only one thing left to say:
“Those who cast the votes decide nothing.
Those who count the votes decide everything.”
-Joseph Stalin
- Universities Ban Politically-Incorrect Halloween Costumes
In a latest measure to create a “safe space” for students, a number of universities have issued “costume protocol,” banning such un-PC Halloween costumes as Arab turbans, feathered Indian headdresses, Japanese Geisha outfits, and Caitlyn Jenner costumes.
As Breitbart's Thomas Williams reports, Brock University in Ontario, Canada, for instance, has set up a website laying out its “Halloween Costume Vetting Protocol,” complete with a list of offending costumes and pictures of inappropriate wear.
In a twisted bit of illogic, the university stated, “In order to create an inclusive and diverse environment, some costumes may be denied.” Apparently, inclusive and diverse here means “if your costume is too diverse, you will not be included.”
“If a member of your party is denied entry because of their costume, they will be escorted to a space where they can change or remove the offending item,” according to the protocol. “They will not lose their place in line during this process, and can enter Isaac’s once the costume has been deemed appropriate by team of Isaac’s Bar and Grill Management and Student Justice Centre Staff.”
As one disturbed commenter wrote, “Obey the Thought Police. Welcome to 1984.”
Further south, at the University of Florida, officials have similarly warned students about sporting offensive costumes, once again appealing to “diversity.”
“Some Halloween costumes reinforce stereotypes of particular races, genders, cultures, or religions,” the university noted. “Regardless of intent, these costumes can perpetuate negative stereotypes, causing harm and offense to groups of people.”
In a scathing article in Forbes last spring, the noted historian Paul Johnson called political correctness “one of the most dangerous intellectual afflictions ever to attack mankind.”
PC has “enormous appeal to the semieducated,” Johnson observed, and it “appeals to pseudo-intellectuals everywhere, since it evokes the strong streak of cowardice notable among those wielding academic authority nowadays.”
“Any empty-headed student with a powerful voice can claim someone (never specified) will be ‘hurt’ by a hitherto harmless term, object or activity and be reasonably assured that the dons and professors in charge will show a white feather and do as the student demands,” he said.
“Thus, there isn’t a university campus on either side of the Atlantic that’s not in danger of censorship,” he concluded.
If in spite of all warnings any precious flower happens to be traumatized by a particular costume at the University of Florida, officials have set up an emergency hotline to help soothe anxious spirits.
If you are “troubled by an incident,” the website counseled, “please take advantage of the 7 day a week presence of the U Matter, We Care program,” which includes an email address as well as “a 24/7 counselor in the Counseling and Wellness Center available to speak by phone.”
Not content with coddling the victims of costume abuse, the university is also prepared to punish and reeducate offenders.
The eerily named “Bias Education and Response Team” at the University of Florida is ready to “respond to any reported incidents of bias, to educate those that were involved, and to provide support by connecting those that were impacted to the appropriate services and resources.”
The good news is that there are still plenty of unprotected groups.
At Brock University, the list of “Prohibited Halloween Costumes & Accessories” covers Caitlyn Jenner, Muslims, Geishas, and Native Americans.
Priests, nuns, rabbis, and police officers are still fair game and can be ridiculed at will. Some deep-seated prejudices are just too fun to give up.
- Goldman CEO Blankfein "Supportive" Of Hillary But "Doesn't Want To Hurt Her" By Endorsing
As has been widely reported, in 2013 Hillary Clinton was paid $675,000 for three speeches to Goldman Sachs. One was delivered on June 4, 2013 at the 2013 IBD CEO Annual Conference at The Inn at Palmetto Bluff in South Carolina, a second one took place on October 24, 2013 at the Goldman Sachs Asset Management AIMS Alternative Investment Symposium, and the last one was delivered on October 29, 2013 at the Goldman Sachs builders and innovators summit.
As we detailed here, the speech transcripts, in their entirety, were revealed for the first time in an email from Tony Carrk, research director at Hillary for America, in an email dated January 23, 2016, and disclosed to the public for the first time ever via some of the latest Wikileak of Podesta emails… including this classic…
Hillary Clinton Said Her Dream Is A Hemispheric Common Market, With Open Trade And Open Markets.
“My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.” [05162013 Remarks to Banco Itau.doc, p. 28]
Hillary Clinton Joked That If Lloyd Blankfein Wanted To Run For Office, He Should “Would Leave Goldman Sachs And Start Running A Soup Kitchen Somewhere. “
“MR. BLANKFEIN: I’m saying for myself. MS. CLINTON: If you were going to run here is what I would tell you to do — MR. BLANKFEIN: Very hypothetical. MS. CLINTON: I think you would leave Goldman Sachs and start running a soup kitchen somewhere. MR. BLANKFEIN: For one thing the stock would go up. MS. CLINTON: Then you could be a legend in your own time both when you were there and when you left.” [ Speech to Goldman Sachs, 2013 IBD Ceo Annual Conference, 6/4/13]
Clinton Joked It’s “Risky” For Her To Speak To A Group Committed To Futures Markets Given Her Past Whitewater Scandal.
"Now, it's always a little bit risky for me to come speak to a group that is committed to the futures markets because — there's a few knowing laughs — many years ago, I actually traded in the futures markets. I mean, this was so long ago, it was before computers were invented, I think. And I worked with a group of like-minded friends and associates who traded in pork bellies and cotton and other such things, and I did pretty well. I invested about a thousand dollars and traded up to about a hundred thousand. And then my daughter was born, and I just didn't think I had enough time or mental space to figure out anything having to do with trading other than trading time with my daughter for time with the rest of my life. So I got out, and I thought that would be the end of it.” [Remarks to CME Group, 11/18/13]
However, in an interview that will air Sunday on CNN's "Fareed Zakaria GPS", Lloyd Blankfein, chief executive officer of Goldman Sachs, confidently declared that Hillary Clinton didn't say “anything untoward” in her appearances.
Until now, Blankfein had shied away from publicly backing a presidential candidate this year, saying his support could harm that person's chances, but, as Bloomberg reports, when asked if he personally supports and admires Democrat Hillary Clinton, said that he did…
“I’m supportive of Hillary Clinton,” Blankfein said, according to a transcript provided by the network. “Yes, so flat out, yes, I do. That doesn’t say that I agree with all of her policies. I don’t. And that doesn’t say that I adopt everything that she’s done in her political career or has suggested that she might do going forward.”
During her 2008 campaign, before investigations into Goldman’s sales of toxic mortgage securities turned Blankfein into one of the faces of the U.S. financial crisis, the executive held a fundraiser for Clinton. In the latest interview he admired her willingness to work with Republicans when she represented New York as a senator.
“She could cross the aisle and engage other people to get things done,” Blankfein, 62, said on CNN. “That willingness to engage is a scarcer commodity these days.”
Bank executives have been hesitant to wade into politics this election season. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon on Oct. 17 offered a read-between-the-lines prediction that Clinton would win, drawing applause by referring to the next president as “she” at a conference. Blankfein was asked about the election in an interview in February and declined to take sides at that time. “I don’t want to help or hurt anybody by giving them an endorsement,” he told CNBC.
In the wide-ranging CNN interview, Blankfein also said the U.S. economy, despite a “tepid” rate of growth and DNC Chair Brazile's private comments that the real economy is a disaster, has a “lot of advantages,” including the extent to which consumers have de-leveraged since the 2008-09 financial crisis, and a sound banking system.
“The sentiment is a lot worse than the economy,” he said, speaking about “a more generalized anxiety” evident in the 2016 political season.
"I’m not minimizing the consequence to people who should have — who feel their jobs should be higher paid, and legitimately so, and the legitimate issues about minimum wages,” Blankfein said. “But at the end of the day, these problems always existed to some extent.”
Speaking about financial regulation, Blankfein said that the rules in place now are strict, and that his biggest fear is that the potential misconduct of a rogue employee will be attributed to him and the bank as a whole.
Finally Blankfein seemed to defend his apparent 'stay out of jail free card' by explaining that some financial misconduct isn’t intentional enough to be a crime.
“To be punished the way people are saying they should be punished, you still have to find some kind of a criminal intent,” Blankfein said. “If you’re merely wrong and you didn’t get it right, it’s hard to ascribe criminality.”
Faux ignorance, once again, it seems is a good enough defense for Secretaries of State, Presidents, and bank CEOs.
But to be frank, we are mainly wondering why all of a sudden – 3 weeks before the election – Blankfein would go public with – implicitly – Wall Street's endorsement? Is the real deep state concerned about her?
- Want To Boost Market Liquidity? Just Let It Rain… No Really
Last December, when we alerted readers to the shift in the “laser” tower at the “New York” Stock Exchange located in Mahwah, NJ…
… we wondered, rhetorically, “what would happen if one flies, say, a drone in front of one or all of those lasers during, say, peak market hours or, heaven forbid, just a few milliseconds before the Fed announces its next “most important ever” policy decision.”
We now have an answer, and it confirms what we have said all along since 2009 when we warned that the confluence of HFT and central bankers nationalizing markets, would destroy not only capital markets, but price discovery (and lead to such amusing Bloomberg articles as “Hedge Fund Managers Struggle to Master Their Miserable New World“).
In a fascinating study carried out by Andriy Shkilko and Konstantin Sokolov of Wilfrid Laurier University, the duo tried to answer one question:
“In modern markets, trading firms spend generously to gain a speed advantage over their rivals. The marketplace that results from this rivalry is characterized by speed differentials, whereby some traders are faster than others. Is such a marketplace optimal?”
Said otherwise, is an HFT-dominated market the best possible outcome, or – as the WSJ put it – “can a rainstorm in Cleveland make markets more liquid?” and if not, what are the alternatives?
The thesis is simple: since high frequency traders use ultrafast links to relay prices and other information between Chicago and New York, using either microwave or laser signals, one theory that can be empirically tested is what happens when the ultrafast signal is impaired due to weather.
To be sure, we live in an age when market tiering has never been as vast as it is now, with some HFT traders enjoying access to the fastest, laser-based, trading technologies; others – less fortunate ones – still use microwaves; and virtually everyone else (including the poorest HFTs) resorting to fiber optics, which while slowest, is also the most dependable and is not impacted by such “outlier” events as heavy rain, thunderstorms or snow.
So, since microwave transmissions are disrupted by water droplets and snowflakes, during heavy storms traders using the networks switch to fiber. This is what Shkilko and Sokolov used to test their hypothesis: using weather-station data from along the microwaves’ paths, they determined when storms occurred and then looked at what happened to bid-ask spreads in a variety of securities during those periods.
In other words, the two academics set out to find: whether, or rather weather HFTs loss of trading superiority has an impact on the overall market, and if so, what is it. As they write “to answer this question, we study a series of exogenous weather-related episodes that temporarily remove speed advantages of the fastest traders by disrupting their microwave networks.”
Their finding is stunning:
“During episodes [of heavy rain and snow], adverse selection declines accompanied by improved liquidity and reduced volatility. Liquidity improvement is larger than the decline in adverse selection consistent with the emergence of latent liquidity and enhanced competition among liquidity suppliers. The results are confirmed in an event-study setting, whereby a new business model adopted by one of the technology providers reduces speed differentials among traders, resulting in liquidity improvements.”
As for the conclusion, it is a blow to HFT advocates everywhere: the slowing down of the fastest high-frequency traders improved market liquidity.
This is how they put it:
This study examines the effects of speed differentials on liquidity. During our sample period, microwave networks stretched from Chicago to New York allow for the fastest information transmission and are only available to select trading firms. When it rains or snows in the area between the two cities, the networks are disrupted because rain droplets and snowflakes block the microwave paths. With the networks temporarily down, information transmission falls back onto the fiber-optic cable – a more reliable, yet slower transmission medium – effectively eliminating the speed advantages of the fastest traders. We show that when this happens, adverse selection and trading costs decline. This result is consistent with predictions of theory models that show that speed differentials among traders may be associated with lower liquidity.
That, in itself, is an amazing observation: that the more tiered and fragmented the market, the less liquidity, as not only do HFTs not provide liquidity, but soak it up, but also that those who traditionally provide liquidity, such as a conventional market makers, refuse to do so in a time when microwave (and laser)-based HFT scalpers and parasites are present, resulting in a market with no depth.
The conclusion continues:
The results shed light on latent liquidity. We show that when speed differentials among traders decline due to precipitation, the emergence of latent liquidity narrows spreads more than one would expect based only on the decline in adverse selection. We also find that in assets where spread reductions are not possible due to the binding tick size, latent liquidity improves quoted depths.
Our results are confirmed in an event-study setting. In winter of 2012-2013, one of the technology providers democratized microwave transmissions by introducing a new business model. Instead of selling bandwidth on its network, the firm began selling information on both sides of the Chicago-New York corridor. This one-time event had positive consequences for market quality similar to precipitation-related network disruptions. This result further supports the claim that the technological race that leads to a market with speed differentials may be suboptimal for market quality.
The technological race continues to drive spending in the trading industry. A recent example is a new data transmission tower proposed by the telecommunications company Vigilant Global to connect the U.K. and European markets. The tower will be among the tallest structures in the U.K. and will rival the height of the Eiffel Tower. It will provide trading firms with a completely unobstructed optical and radio line of sight, never previously offered in Europe, increasing signal transmission speed. In the meantime, traders in the U.S. have been switching from microwave transmissions to more reliable, yet costly, laser links. Our findings shed light on the possible consequences of these developments.
Another way of putting it: heavy rainfall literally adds to market liquidity, for one simple reason: it reduces the overall adverse influence of HFTs, predating market orders, and soaking up what little liquidity is left.
The implications are fascinating: if one were so inclined, the market could once again return to its more stable, “liquid” state if HFTs – which it has now been showned definitively do not provide or in any way add to market liquidity – were eliminated. Alternatively, if one were so inclined, tearing down the microwave towers linking Chicago to NJ and NYC, would achieve the same effect. Which, of course, should not be interpreted as call to arms against microwave – or laser – towers in order to restore normalcy to the market. After all, even if one eliminates HFTs, there are still central bankers whose impact on markets is just as dire and profound.
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The source “Every cloud has a silver lining: Fast trading, microwave connectivity and trading costs” can be found here.
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