- Order Out Of Chaos: The Defeat Of The Left Comes With A Cost
Submitted by Brandon Smith via Alt-Market.com,
As I noted in my last article World Suffers From Trump Shellshock – Here’s What Happens Next, there are two primary consequences of a Trump presidency that actually serve globalists and elites in the long run.
The first is the consequence of a perfect scapegoat for the economic crisis which the elites have been gestating since 2008. Trump enters the White House with a clear political mandate, a mandate that supposedly gives conservatives more power than at any other time in U.S. history. This mandate might seem like a miracle, a free hand of power to sovereignty and liberty champions to defeat the collectivist tyranny of cultural Marxists on the Left once and for all. However, it could also backfire, because under this mandate EVERYTHING bad that happens under Trump’s watch can be blamed on Trump and his followers. Conservatives have been given almost absolute influence over government (or apparent influence); by extension, they also inherit absolute responsibility, whether they like it or not.
I examined this first consequence in detail in numerous articles leading up to the 2016 election. In fact, it is the primary reason why I was so certain Trump would be president. He is the perfect scapegoat, or the perfect conduit. Under Trump, the last stage of economic collapse can finally be initiated by the financial elites and most of the world including half the population of the U.S. will immediately and without question blame conservatism, nationalism, sovereignty advocates and Trump for the disaster. They won’t think twice about looking in the direction of global bankers.
For those that immediately scoff at such a notion, I highly recommend they research the concept of 4th Generation Warfare. I also highly recommend study into a Department of Defense paper called 'From Psyop To Mindwar: The Psychology Of Victory', written by Major Michael Aquino (a self proclaimed “satanist”) and Colonel Paul Vallely (today a self proclaimed liberty champion). I would also compel people to read 'The Art Of War' by Sun Tzu, the same manuscript that all recruits of the CIA are required to read.
The essence of the most advanced form of warfare is the ability to defeat an opponent, or a population, without having to fight at all. Instead, the master tactician seeks to influence his opponent to surrender without fighting, or, to influence his opponent to destroy himself. This is accomplished primarily through propaganda, subversion, asymmetric warfare (terrorism and insurgency) and most importantly, co-option.
As I noted in my last article, if you want to be able to accurately predict future events, you must understand the minds of the people with the most influence over those events. The financial elites, highly motivated and highly organized, are the single most important gatekeepers to geopolitical change today. Know their mind, and you will know the general path tomorrow will take.
This is not to say that the elites are “omnipotent.” Frankly, they don’t need to be. With the utter lack of vigilance and awareness within our society, the elites only need to be relatively intelligent and exceedingly morally bankrupt to manipulate the masses. When skeptics argue with me that the elites would “have to be omnipotent to influence the social narrative in the manner I describe,” I have to laugh. Any person of above-average intelligence and unlimited capital (as the financial elites have) can do considerable damage to a society, bring empires to their knees and condition the populace to think and react in a specific fashion.
If I had the same resources at my disposal as the elites have (and the same lack of conscience), I could probably do a far better job than they when manipulating geopolitical outcomes. They make numerous mistakes if you pay close attention to their actions. I hardly consider myself the smartest person around, let alone “omnipotent.” This is a silly notion. The reality is, the more ignorant the population, the easier it is to control and misdirect them. To the ignorant, the elites might seem “omnipotent.” They aren’t; they merely have more-intelligent-than-average people at their disposal and printing presses to pay for everything they want.
The smarter and more vigilant any given population, the more difficult it is to influence them through deception. This is very simple. To put it even more bluntly, the elites get away with subversive tyranny because there are too many willfully stupid people.
Following this line of thinking, there is a second consequence of Election 2016 that greatly concerns me — the potential for co-option of the Liberty Movement, the only existing opposing force to globalism. Co-option requires the centralization of a group in thought and deed under the influence of a small number of hands, or a single white knight figure. As I noted in my article Will A Trump Presidency Really Change Anything For The Better?, published in March of this year:
"The other ingenious aspect of the Trump campaign is really who he is running against — Hillary Clinton, a rabidly liberal candidate even more hated than Barack Obama. A candidate with a potentially serious criminal record and a penchant for an outright communistic world view far beyond that of Bernie Sanders. Those of us who have been in the writing field for a long time and have dabbled in fiction know that in order to create a fantastic hero, you must first put even more work into creating a fantastic villain. The hero is nothing without the villain."
The unmitigated horror inherent in the prospect of a Hillary Clinton presidency is like adding jet fuel to the Trump campaign. (And yes, I am assuming according to the results of the primaries so far that the final election will be between Trump and Clinton).
And, as I explained in my article Clinton Versus Trump And The Co-Option Of The Liberty Movement published in September:
"Whenever you have a rebellion focused on the inherent ideals of freedom, totalitarian institutions struggle to intervene. The issue is, freedom is not only moral, but practical. Wherever true freedom exists, people are not only happier, but more productive and prosperous. It’s hard for a tyrant to fight a rebellion based on freedom because the idea is more powerful than any weapon or any form of treachery. No matter how advanced the tyranny is, and no matter how many rebels they imprison or kill, the idea of freedom endures.
The only way to destroy a rebellion like this, a rebellion like the liberty movement, is to make it about something other than freedom. The powers that be have to convince that movement to support policies that are destructive to their own ideals. If this can be done, then that rebellion has lost the advantage of principle — the only advantage that really matters."
The co-option of the liberty movement is not necessarily direct. It can be achieved through what I call “absorption.” Take note that the mainstream media and elitists avoid using the label “liberty movement” at all costs because this is something we labeled ourselves many years ago. Instead, they seek to control what we are called; labeling us “populists” of the “Alt-Right.” The liberty movement has been fighting the globalists in the information war for a long time. The average conservative Republican is new to this party, and yet the liberty movement is being called the “Alt-Right?”
Even Bloomberg pointed out with relative glee that the Tea Party (liberty movement), a movement which leftists despise with every fiber of their being, could be devoured by Trump’s campaign and reconstituted into something else. Read their editorial The Tea Party Meets Its Maker, but only if you have a strong stomach.
In the battle against the Marxist left, it is important that we do not lose track of our original identity, or the elites at the top of the pyramid. Also important is that we do not forsake our original principles in order to achieve “victory” over our adversaries. This is a very difficult problem to discuss when you consider who we are fighting against.
I have always said that it was the social justice cult and their zealotry that drove the rise of Trump. It was they that created the public firestorm with their open contempt for our right to free thought and free expression. But keep in mind, this has all happened before, and with terrible results.
In Europe during the 1920s and early 1930s, the overall rise of Fascism was in direct response to economic crisis and the insurgency of communism. Communism is essentially collectivism on the far left side of the political spectrum. Fascism is a collectivist trap the "Right" sometimes falls into. Both lead to centralization and tyranny.
Communism is tyranny in the name of undermining the strong and independent in order to make room for the weak. Fascism is tyranny in the name of routing out the weak to make room for the strong.
It is these two political extremes that the elites have used over the past century to dominate geopolitical outcomes. Again, for those who are skeptical I highly recommend the extensive research and evidence presented by Antony Sutton, who outlined succinctly the FACT that both the Bolshevik Revolution and the rise of the Third Reich were funded and managed by Wall Street moguls and international banking interests.
The elites are notorious for playing the extreme left against the right in order to drive conservatives to the opposite extreme. My concern is not only that through Trump the elites can easily scapegoat conservative movements for a global economic crisis, but also that through the intense vitriol of the social justice left, infuriated by their loss to Trump in the election, conservatives may be driven to abandon their constitutional ideals and become the monster they hoped to destroy.
Carroll Quigley, CFR elitist and mentor to Bill Clinton, was highly open about the plans of globalists to establish one world governance in his book “Tragedy And Hope.” The following quote from Carroll Quigley’s Dissent: Do We Need It? could be taken as anti-right propaganda, but I take it as a warning that the elites see potential exploitation of the political right in America:
“For example, I’ve talked about the lower middle class as the backbone of fascism in the future. I think this may happen. The party members of the Nazi Party in Germany were consistently lower middle class. I think that the right-wing movements in this country are pretty generally in this group.”
Again, the liberty movement cannot be defeated by the globalists directly. If the fight comes down to an open confrontation between freedom versus globalism, the globalists will inevitably lose. Instead, it appears to me that the globalists are more than happy to either allow Trump into the White House, or to install him in the White House as a means to rewrite the liberty movement into a villainous character, rather than the rebellious hero of our story.
So far it would seem that the temptations to revert to fascism are many. Set aside the threat of ISIS terrorism and think about the insanity showcased by the Left.
When I mentioned in my last article the crippling of social justice, I did not mention that this could have some negative reverberations. With Trump and conservatives taking near-total power after the Left had assumed they would never lose again, their reaction has been to transform. They are stepping away from the normal activities and mindset of cultural Marxism and evolving into full blown communists. Instead of admitting that their ideology is a failure in every respect, they are doubling down.
When this evolution is complete, the Left WILL resort to direct violent action on a larger scale, and they will do so with a clear conscience because, in their minds, they are fighting fascism. Ironically, it will be this behavior by leftists that may actually push conservatives towards a fascist model. Conservatives might decide to fight crazy with more crazy.
The mainstream media and popular media largely controlled by leftist elements are only pouring gasoline on the fire, with major pundits and media personalities steadily hinting at “revolution” in the face of a “Trumpist” America. But here is the thing, these people are kidding themselves.
The alternative media is eclipsing corporate media today. Their time is coming to an end.
Leftists including groups like Black Lives Matter are also ill equipped to violently combat a conservative movement with a lifetime of experience in arms and the will to use them. If the Left leaps into the realm of violent Marxist revolution, they will lose in America. That said, there is a cost.
The cost could very well be the heritage of freedom that conservatives desire to protect. The alternative media may overrun the corporate media, but will we become the corporate media in the process?
If under Trump conservatives fall to temptation and exploit the “ring of power” that is government to exert dominance in the name of stopping the Left, then they will ultimately be destroyed as well.
In this case history will not remember conservatives as freedom fighters rebelling against globalist machinations, but as evil “populists” that caused global economic collapse and the re-establishment of the institution of fascism. The globalists can swoop in after the dust has settled and use the American collapse fable as a story to tell children for the next century. A reminder that nationalism and sovereignty are harbingers of war and death. Conservatism will be abhorred as “deplorable,” an ugly ideal akin to Nazism.
At this point, the globalists will have won, for no other philosophy contrary to globalism will ever exist again. No one would want to associate themselves with historical “villains” and bogeymen.
As I have mentioned consistently, I have no idea whether or not Donald Trump is aware of this potential trap. I also have no idea if he was sincere in his campaign or simply telling people what they wanted to hear. At this time, his consideration of neo-con political elites and Goldman Sachs bankers for cabinet positions does not leave a positive impression. And, his seeming refusal to commit to prosecution of Hillary Clinton (which I also predicted) for her obvious crimes is a warning bell of liberty advocates.
My position is that the Liberty Movement must always remain the Liberty Movement if conservatives and sovereignty proponents want a chance to survive. We have to be willing remain just as watchful and critical of Trump as we would have been with Hillary Clinton. And, if he breaks his promises or goes against his oath to the constitution, we must be willing to go to war with him, just as we would have with Clinton.
This puts us in a tenuous position — fighting the Left is bad enough. Going against Trump if he steps out of line is worse, because then we can be labeled leftists as well. This is the essence of 4th Generation warfare — cornering an opponent so that each move he makes is a sacrifice. If the opponent is not careful, he might just destroy himself.
There is a way to undermine this strategy by the elites; as conservatives we must treat Trump like a new employee. We have to put him on probation and watch him, not give him the keys to the store on the first day. We must also continue to educate fellow conservatives (and any on the Left that have the sense to listen) that this fight is FAR from over. In fact, it has just begun. In the end, our strategy must be for the Liberty Movement to absorb the "Alt-Right", instead of being absorbed. And, we must focus our efforts and actions against top globalists and their organizations rather than only focusing on the regressive left.
People must understand that the real threat in all of this has been and always will be the globalists. Instead of fighting each other in a futile theater of the absurd, we must fight and remove them from the chess board, wherever and whenever they show their faces in the daylight.
- Mexican Cement Company Offers To Help Trump Build His "Big, Beautiful, Powerful" Border Wall
As Trump gears up to take the oval office, vendors are already lining up to get a piece of his massive infrastructure projects, including his “Big, Beautiful, Powerful Border Wall.” Ironically, one of the first vendors to publicly announce their interest in bidding on the border wall is none other than Mexican cement producer, Grupo Cementos de Chihuahua. While Trump’s border wall has been fiercely protested by numerous senior elected officials in Mexico, including former President Vicente Fox, Grupo Cementos’ CEO admits “we can’t be choosy.”
A Mexican cement maker is ready to lend its services to U.S. President-elect Donald Trump to build the wall he wants to erect on the southern border of the United States to curb immigration.
“We can’t be choosy,” Enrique Escalante, Chief Executive Officer of Grupo Cementos de Chihuahua (GCC) said in an interview. “We’re an important producer in that area and we have to respect our clients on both sides of the border.”
Based in Chihuahua, a large northern state bordering Texas and New Mexico, GCC is one of the biggest construction materials companies in Mexico. It generates around 70 percent of its sales in the United States, where it also has three plants.
Escalante said Trump’s plans to invest in energy and infrastructure in the United States augured well for the firm.
“For the business we’re in, Trump is a candidate that does favor the industry quite a bit,” Escalante said.
Luckily for Trump, and Grupo Cementos, the National Enquirer has already drawn up “construction plans & blueprints.”
Pro-Trump tabloid celebrating his victory/sending him a message? pic.twitter.com/5vhBkyINSg
— Brian Stelter (@brianstelter) November 23, 2016
Meanwhile, as TMZ points out, “Bikers 4 Trump” have already started building a commemorative border wall of their own just outside of Atlanta. For the bargain price of $60 per brick, or $100 for two, you too can purchase a custom-etched brick for the wall.
Bikers 4 Trump tells TMZ they’ve been plugging away for a couple months on a brick border wall of their own, which they plan to move to the Mexican border should Trump ever get the real deal constructed.
We’re told they already have 200 bricks stacked in Atlanta next to State Hwy 49, and they feature names like Antonio Sabato Jr. and Joe Bonsall ?of The Oak Ridge Boys. Bricks have also been purchased in Scott Baio, Ted Cruz and Ted Nugent’s names — although none made their own donation.
And, lest you thought this was a joke, here is some video of the newly etched bricks hot off the press and bound for the Atlanta wall.
Welcome @DGallup to the wall! She is a 100% Disabled Vet & she ordered 2 Bricks @ https://t.co/cGkVjf2Psh#RETWEET pic.twitter.com/wli5ZcY9QP
— Bikers 4 Trump (@Bikers4Trump) August 15, 2016
What more is there to say? The next 4 years are going to be surreal.
- Startling Look At How Much Money Food Stamp Recipients Spend On Junk Food
A new study just released by the USDA, offers a very detailed look at exactly how participants in the “Supplemental Nutrition Assistance Program” (SNAP, aka Food Stamps) spend their taxpayer-funded subsidies. Unfortunately for taxpayers, the amount of money spent on soft drinks and other unnecessary junk foods/drinks is fairly staggering. But, we suppose it’s a nice taxpayer funded subsidy for the soda industry…so score one for Warren Buffett and the Coca Cola lobbyists.
Per the study, nearly $360mm, or 5.4% of the $6.6BN of food expenditures made by SNAP recipients, is spent on soft drinks alone. In fact, soft drinks represent the single largest “commodity” purchased by SNAP participants with $100mm more spent on sodas than milk and $150mm more than beef.
Soft drinks were the top commodity bought by food stamp recipients shopping at outlets run by a single U.S. grocery retailer.
That is according to a new study released by the Food and Nutrition Service, the federal agency responsible for running the Supplemental Nutrition Assistance Program (SNAP), commonly known as the food stamp program.
By contrast, milk was the top commodity bought from the same retailer by customers not on food stamps.
In calendar year 2011, according to the study, food stamp recipients spent approximately $357,700,000 buying soft drinks from an enterprise the study reveals only as “a leading U.S. grocery retailer.”
That was more than they spent on any other “food” commodity—including milk ($253,700,000), ground beef ($201,000,000), “bag snacks” ($199,300,000) or “candy-packaged” ($96,200,000), which also ranked among the top purchases.
Even worse, when we added up all of the commodities that would typically be considered “junk food” (i.e. soft drinks, candy, cakes, energy drinks, etc.), we found that roughly $950mm, or just over 14% of the aggregate $6.6BN of food expenditures made by SNAP recipients, is spent on unnecessary, unhealthy products.
As CNS News points out, the study was conducted by IMPAQ international and analyzed the sales of a single national retail chain back in 2011.
The dollar amount that food stamp recipients spent on soft drinks and other commodities comes from data a retailer provided to a data analysis company the federal government hired to find out what kind of foods people on foods stamps—and Americans not on foods stamps—were buying.
“The Food and Nutrition Service (FNS) awarded a contract to IMPAQ International, LLC, to determine what foods are typically purchased by households receiving Supplemental Nutrition Assistant Program (SNAP) benefits,” the study explained. “This study examined point-of-sale (POS) food purchase data to determine for what foods SNAP households have the largest expenditures, including both SNAP benefits and other resources, and how their expenditures compare to those made by non-SNAP households.”
“POS transaction data from January 1, 2011 through December 31, 2011 from a leading grocery retailer were examined for this study,” the report said.
It’s a good thing democrats re-branded Food Stamps as the “Supplemental Nutrition Assistance Program”….otherwise we would have confused it for a blatant waste of taxpayer money on sodas and energy drinks.
- Obama Admin Fines, "Forces Sheriff's Dept. To Hire" Illegal Immigrants
Submitted by Mac Slavo via SHTFPlan.com,
The lawlessness of the Obama Administration knows no bounds.
Not only has President Obama made every move he can through executive order to create and foster amnesty for illegal immigrants, but his Justice Department is now attempting to force people to hire undocumented workers.
Ironically, the agency on the other end of intimidation is the Denver County Sheriff’s Office.
Incredibly backwards…
via the Daily Caller:
Denver County’s sheriff office has been slapped with a fine by the Department of Justice (DOJ) because it refused to hire non-citizens as deputies.
From the beginning of 2015 through last March, the Denver Sheriff Department went on a major hiring binge, adding more than 200 new deputies. But those jobs ended up only going to citizens, because the department made citizenship a stated requirement on the job application. The department admitted as much in a new settlement with the U.S. government, which requires it to pay a $10,000 fine.
The department will also have to comb through all of its job applications from the past two years, identifying immigrants who were excluded from the hiring process and giving them due consideration.
How can someone be hired to enforce the law, if they are living in violation and ignorance of it?
How can counties, state agencies, small businesses or individuals be forced to hire in violation of the law, in order to comply with non-discrimination?
Obviously the system has a logical loop failure, either that, or someone wants this country to eat itself.
- Truth in Numbers- Bad math as a propaganda and sales tool
It’s no surprise that the largest employer of mathematicians in the United States is the National Security Agency. These jobs are not all ‘codebreakers’ – why does the NSA employ so many mathematicians, second only to Wall St.?
The biggest secret propaganda and sales tool used by experts in the modern world is the deliberate twisting and false presentation of data, specifically – numbers and ‘statistics.’ They do so in such a subtle way, that the argument leads into a heated debate about the inference of the obvious conclusions – NOT the calculation of the numbers themselves! Very rarely are the methods of statistical calculations, data collection, formulations, and other operations ever questioned.
This is used by governments, to paint a picture they want, in the case of the military, to ‘sell war’ – as outlined eloquently by mathematician Nassim Taleb:
When Pasquale Cirillo and I examined the historical accounts of wars for our statistical analysis of violence, we discovered huge holes –people take numbers for gospel, yet many accounts were fabrications. Many historians, political “scientists”, and others for fall for them, then get to write books. For instance we saw that the scientific entertainer Steven Pinker based his analysis of the severity of the An Lushan rebellion on a shoddy overestimation –the real numbers of casualties could to be lower by an order of magnitude. Much of Pinker’s thesis of drop in violence depends on the past being more violent; it thus gets further discredited (the thesis is shaky anyway as Pinker’s general assertions conflict with the statistical data he provides). Peter Frankopan, in his magesterial The Silk Roads, seem to get the point: estimations of casualties from the Mongol invasions were inflated as their accounts exaggerated the devastation they caused in order to intimidate opponents (war is not so much about killing as it is about bringing submission). Our main (technical) paper is here. But it is not just the bullshitting of Steven Pinker: numbers for many wars seem to have been pulled out of a hat. Some journalist cites some person at a conference; it finds it way to Le Monde or the New York Times, and that number becomes fixed for future generations. For our attempt to build a rigorous method of quantitative historiography, we devised statistical robustness techniques: they consist in bootstraping “histories” from the past, considering the past a realization between the lowest and the highest estimate available, producing tens of thousands of such “historical paths” and evaluate how “robust” an estimator to changes in the aggregate. More depressingly, we found that no historian had bothered to do similar cleaning up work or robustness check –yet the statistical apparatus is there to help.
(In case you haven’t heard of Nassim Taleb this book is a MUST READ as a primer for any trader or investor to understand MATH as it pertains to the MARKETS: Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets. Taleb is no academic he runs a multi-billion dollar hedge fund).
Inflated numbers of enemy casualties, or deflated numbers of aggressor casualties, pose an obvious example of why such agencies would use bad math to display data in such a way as to further their argument, for one side or another. But what other examples? Why would Wall St. use such a strategy, considering their entire business is numbers?
Consider the example of the Fed and interest rate policy. If the current interest rates are 1%, and the Fed hikes to 2%, that’s a 1% increase but in percentage terms, it’s a 100% increase! If you had interest rate derivatives, you could with no leverage potentially earn a 100% return on your money, in a day (supposing it was a surprise and the market wasn’t already pricing in the hike).
Another popular statistical misconception, is that of loss recovery. Recovering from a loss is not linear. For example, if your fund has a 10% loss, you need 11.11% just to break even. This becomes more extreme, the deeper the loss hole. If you start with 100 units, lose 10% of them – you have 90. But to increase from 90 back to your original starting 100, you need 11.11 units, which is 11% just to get back your lost 10 units. Yes!
And speaking about performance, let’s knock the industry standard performance capsule and its big gaping hole. According to most reporting standards, such as prescribed by NFA, FINRA, and many others – funds report monthly performance based on a ‘snapshot’ of performance during that month. This sounds reasonable until you actually calculate monthly performance numbers and see that it’s really only performance based on a 1 or 2 day period intra-month. If there was a big profit or a big loss on the days taken as ‘snapshots’ that’s what will show in the capsule.
What’s misleading about this, it doesn’t represent to investors what happened DURING the month. For many strategies, this is not relevant – but for some strategies, it is very relevant. For example, imagine a scenario where there was a huge 30% loss and then recovery, and the month ended up being 2% positive. It would seem to be a low-volatility fund, and likely attract conservative investors, like Pension funds. They wouldn’t know about the intra-month risk, unless the manager told them (but why would they, it’s not in the required documents, and maybe THEY don’t even know about it).
However you add it up, the difference between balance and equity can be misleading. Skipping the monthly performance capsules that 99% of Wall St. uses, if one has access to it, one can compare the balance and equity curves over time. For those who don’t know, balance is closed positions, equity includes live trades. So if a position is still open, the floating profit or loss will show up in the equity. Take a look at this discrepancy:
The red line is the balance, yellow/orange line is the equity. These lines must separate when trades are placed, otherwise an account would never lose or gain. But how wide are these gaps, how frequent are they? Absent of rigorous statistical analysis as done by Taleb in his war casualties paper, comparing these 2 lines is the most basic form of drawdown analysis. What caused the lines to diverge? What dates did they diverge on, and what forces caused them to converge? These are questions astute investors should be asking.
For a full education on statistical analysis, checkout Fortress Capital’s Introduction to Foreign Exchange. For a pocket guide designed to make you a due diligence expert, checkout Splitting Pennies – Understanding Forex for only $6.11 on kindle, or get some awesome financial books here.
- Risky Parity Panic Strikes As Correlations Crash To Record Low
Having exploded higher in the run-up to the election, market expectations of the correlation between stocks within the S&P 500 have completely collapsed since to new record lows.
Simply put, massive systemic overlays were placed ahead of the election event, and were forced to be unwound increasingly aggressively as the post-Trump rally caught everyone offside (the unwind would mean relatively heavy selling of Index protection relative to single-name protection).
As a reminder, implied correlation measures the relative demand for macro overlays (index hedges) vs micro risk (individual stock hedges/concerns). The higher it is, the more systemically worried investors are and the more traders believe a high correlation 'event' is due (typically the high correlation event is a big downturn in stocks).
While the S&P 500 climbed to a record for a second day on Tuesday, “there are elements of a bull market and a bear market at the same time,” said Andrew Wilkinson, chief market analyst at Interactive Brokers.
“You’re seeing pressure on different sectors. In a typical bull market, you’re going to get all stocks going higher.”
“It makes it very interesting for the stock picker and the active manager who’s on his game,” Mr. Wilkinson said.
The relationship between growth and value stocks in the benchmark equity measure has also decoupled, with the rolling correlation between the two groups sliding since voting day, FactSet data show. A Republican sweep of the U.S. presidency and Congress has boosted the inflation outlook, pushing investors into value names. Before the election, investors crowded into growth companies in 2015 amid a sluggish economy and then poured money into low-volatility equities in the first half of this year.
But it is not just correlations between individual stocks that is crashing. The correlation between bonds and stocks has collapsed back to its norms…
Which, as we noted previously, is raising notable concerns over a risk-parity fund blow up. As BofA warns: "Latent risk remains worth monitoring, as (i) leverage is still near max levels across a variety of risk parity parametrizations, (ii) bond allocations are historically elevated, and (iii) markets continue to be sceptical of a 2016 Fed hike."
If BofA is correct, it would mean that a day which sees a -4% SPX drop and +1% bond rally (good diversification) would generate no selling pressure, "underscoring the critical role played by bond-equity correlation in governing the severity of risk parity unwinds."
However, a troubling scenario is one where even a relatively benign 2% selloff of the S&P coupled with just a 1% selloff of the 10Y could result in up to 50% deleveraging, which in turn would accelerate further liquidations by other comparable funds, and lead to a self-fulfilling crash across asset classes.
Which incidentally sounds like precisely the scenario that could happen when the Fed tries to raise rates, and is also why asset classes continue to move without fear of any rate hike, as they now realize – very well – just how trapped the Fed truly is. That said, in short order, we will see if the Fed, for once, has the intestinal fortitude to actually raise rates in the face of the extreme volatility awaiting equities in the event they do… we doubt it.
As RBC's Charlie McElligott notes, the classic risk-parity pain-trade ensues— developed mkt sovereign bonds, stocks, EM, credit and commodities (ex-crude) all under the cosh right now at the same time (shocker–a strategy built on a core concept of ‘negative correlation btwn bonds and risk stocks’ is going to be exposed in a regime change of this magnitude).
And as the chart below shows, Risk Parity funds are plunging…
As is clear, he massive decoupling between stocks and risk-parity funds is not unpredented… but has not ended well in the past (for stocks).
- Half Of The Population Of The World Is Dirt Poor – And The Global Elite Want To Keep It That Way
Submitted by Michale Snyder via The Economic Collapse blog,
Could you survive on just $2.50 a day? According to Compassion International, approximately half of the population of the entire planet currently lives on $2.50 a day or less. Meanwhile, those hoarding wealth at the very top of the global pyramid are rapidly becoming a lot wealthier. Don’t get me wrong – I am a very big believer in working hard and contributing something of value to society, and those that work the hardest and contribute the most should be able to reap the rewards. In this article I am in no way, shape or form criticizing true capitalism, because if true capitalism were actually being practiced all over the planet we would have far, far less poverty today. Instead, our planet is dominated by a heavily socialized debt-based central banking system that systematically transfers wealth from hard working ordinary citizens to the global elite. Those at the very top of the pyramid know that they are impoverishing everyone else, and they very much intend to keep it that way.
Let’s start with some of the hard numbers. According to Zero Hedge, Credit Suisse had just released their yearly report on global wealth, and it shows that 45.6 percent of all the wealth in the world is controlled by just 0.7 percent of the people…
As Credit Suisse tantalizingly shows year after year, the number of people who control just shy of a majority of global net worth, or 45.6% of the roughly $255 trillion in household wealth, is declining progressively relative to the total population of the world, and in 2016 the number of people who are worth more than $1 million was just 33 million, roughly 0.7% of the world’s population of adults. On the other end of the pyramid, some 3.5 billion adults had a net worth of less than $10,000, accounting for just about $6 trillion in household wealth.
And since this is a yearly report, we can go back and see how things have changed over time. When Zero Hedge did this, it was discovered that the wealth of those at the very top “has nearly doubled” over the past six years, and meanwhile the poor have gotten even poorer…
Incidentally, we tracked down the first Credit Suisse report we found in this series from 2010, where the total wealth of the top “layer” in the pyramid was a modest $69.2 trillion for the world’s millionaires. It has nearly doubled in the 6 years since then. Meanwhile, the world’s poorest have gotten, you got it, poorer, as those adults who were worth less than $10,000 in 2010 had a combined net worth of $8.2 trillion, a number which has since declined to $6.1 trillion in 2016 despite a half a billion increase in the sample size.
If these trends continue at this pace, it won’t be too long before the global elite have virtually all of the wealth and the rest of us have virtually nothing.
Perhaps you are fortunate enough to still have a good job, and you live in a large home and you will sleep in a warm bed tonight.
Well, you should consider yourself to be very blessed, because that is definitely not the case for most of the rest of the world. The following 11 facts about global poverty come from dosomething.com, and I want you to really let these numbers sink in for a moment…
- Nearly 1/2 of the world’s population — more than 3 billion people — live on less than $2.50 a day. More than 1.3 billion live in extreme poverty — less than $1.25 a day.
- 1 billion children worldwide are living in poverty. According to UNICEF, 22,000 children die each day due to poverty.
- 805 million people worldwide do not have enough food to eat. Food banks are especially important in providing food for people that can’t afford it themselves. Run a food drive outside your local grocery store so people in your community have enough to eat. Sign up for Supermarket Stakeout.
- More than 750 million people lack adequate access to clean drinking water. Diarrhea caused by inadequate drinking water, sanitation, and hand hygiene kills an estimated 842,000 people every year globally, or approximately 2,300 people per day.
- In 2011, 165 million children under the age 5 were stunted (reduced rate of growth and development) due to chronic malnutrition.
- Preventable diseases like diarrhea and pneumonia take the lives of 2 million children a year who are too poor to afford proper treatment.
- As of 2013, 21.8 million children under 1 year of age worldwide had not received the three recommended doses of vaccine against diphtheria, tetanus and pertussis.
- 1/4 of all humans live without electricity — approximately 1.6 billion people.
- 80% of the world population lives on less than $10 a day.
- Oxfam estimates that it would take $60 billion annually to end extreme global poverty–that’s less than 1/4 the income of the top 100 richest billionaires.
- The World Food Programme says, “The poor are hungry and their hunger traps them in poverty.” Hunger is the number one cause of death in the world, killing more than HIV/AIDS, malaria, and tuberculosis combined.
So how did we get here?
Debt is the primary mechanism that takes wealth from ordinary people like you and me and puts it into the hands of the global elite.
In my recent article entitled “Why Donald Trump Must Shut Down The Federal Reserve And Start Issuing Debt-Free Money“, I discussed how the Federal Reserve was designed to entrap the U.S. government in an endless debt spiral from which it could never possibly escape. And that is precisely what has happened, as the U.S. national debt has gotten more than 5000 times larger since the Federal Reserve was created in 1913.
In that very same year, the federal income tax was instituted, and that is a key part of the program for the global elite. You see, the income tax is how wealth is transferred from us to the government. And then a continuously growing national debt is how that wealth is transferred from the government to the elite.
It is a very complicated system, but at the end of the day it is all about taking money from us and getting it into their pockets.
And at this point more than 99.9 percent of the population of the world lives in a country with a central bank, and almost every nation on the planet has some form of income tax.
It is a global system that is designed to create as much debt as possible, and I recently shared with my readers that the total amount of debt in the world has hit a staggering all-time record high of 152 trillion dollars.
The borrower is the servant of the lender, and the global elite have used various forms of debt to turn the rest of the planet into their debt slaves.
As debt levels race higher and higher all over the planet, the elite are using the magic of compound interest to grab a bigger and bigger share of the pie.
Given enough time, those at the very top would have virtually everything and the rest of us would have virtually nothing. The middle class is shrinking all over the globe, and the gap between the wealthy and the poor continues to grow at an astounding pace.
But the vast majority of people out there have no idea how money, debt, taxes and central banks really work, and so they have no idea that this is purposely being done to them.
The truth is that we don’t have to have this much global poverty, and if we correctly identify the root causes of this poverty we can start working on some real solutions.
- Russia Is Reviving Soviet Era ICBM-Carrying "Nuclear Trains"
Russia has conducted successful intercontinental ballistic missile tests intended for its Barguzin “nuclear-train” program.
The tests for Russia’s “railway-based combat rocket system” took place on Plesetsk cosmodrone two weeks ago, Interfax reports and were “fully successful” according to a military source, which would “pave the way for further flight tests.” The tests were held to test the missiles’ launch readiness, Russian press added.
A BZhRK with a Molodets missile erected to launch positionThe mobile weapons platform, made up of several train carriages designed to conceal the launchers of six Yars or Yars-M thermonuclear ICBMs and their command units, are expected to enter service between 2018 and 2020.
After first announcing the return of the nuclear trains, which had previously been banned, in 2014 Russia’s military then confirmed the trains are expected to be put into service in 2019. The nuclear trains, dubbed Berguzin after the strong eastern wind that blows over the Lake Baikal, aim to counter US’s Conventional Prompt Global Strike project, which would give the Pentagon the capability of launching attacks and precision strikes at any target in the world in one hour.
The Berguzins, which act as mobile platforms to transport and launch nuclear missiles, will be able carry up to 6 RS-24 Yars missiles, the International Business Times reported. According to RT, Yars missiles can reportedly carry four warheads for a total yield of between 0.4 and 1.2 megatons. While the missiles are less destructive than their predecessors, the Molodets missiles, they are more accurate, have a greater range and weigh roughly half as much. The lighter weight means that trains on which they are loaded do not require reinforced wheel-sets to carry the load.
This makes it harder for enemy spy satellites to identify the trains, as the carriages can be easily disguised as refrigerator cars. Once the trains are deployed, Russia will be in possession of 36 megatons of mobile and ready-to-fire nuclear missiles.
The commander of the Strategic Missile Forces, Colonel-General Sergei Karakayev, said the state-of-the-art Barguzin complex would outstrip its Soviet predecessor in all respects, including accuracy and range. Once launched, the complex will be in service until 2040.
During Soviet times, the Strategic Missile Forces had three divisions of rail-mobile missile systems “Molodets” (NATO reporting name SS-24 “Scalpel”). They were stationed in the Kostroma, Perm and Krasnoyarsk regions.
There were 12 “nuclear trains” in total, each carrying three missiles. The complexes entered service in 1987, just a few years prior the collapse of the USSR. The West dubbed the Soviet weapon “ghost trains.” The rail mobile missile complexes were disposed of from 2003 to 2005 without extending their life. The “Molodets” nuclear trains were part of the START-2 Treaty for arms reductions.
The new Barguzin project does not have a goal to revive the erstwhile Soviet military project. This is an entirely new development. One of the obvious advantages of Barguzin trains is their mobility, although Soviet rail-mobile missile complexes were too heavy. It is worthy of note that the development of such systems does not come contrary to the START-3 agreement.
Russia’s latest advancement in its nuclear weapons technology comes shortly after the Kremlin announced the deployment of nuclear-capable missiles to the Kaliningrad exclave, as was reported previously. President Vladimir Putin’s spokesman, Dmitry Peskov, told reporters that the Russian military needs to respond to what he described as Nato’s aggressive moves.
“Russia is doing what is necessary to protect itself amid Nato’s expansion toward its borders,” Mr Peskov said adding that “the alliance is a truly aggressive bloc, so Russia does what it has to do. It has every sovereign right to take necessary measures throughout the territory of the Russian Federation.”
According to overnight press reports, Moscow also deployed new anti-ship missiles on Pacific islands controlled by Russia but also claimed by Japan. Bal and Bastion missile systems have been stationed on the islands, called the southern Kurils by Russia and the Northern Territories by Japan, the Boyevaya Vakhta (Combat Duty) newspaper of Russia’s Pacific Fleet reports.
The disagreement over the islands, seized by the Soviet Union at the end of World War II, has kept the two countries from signing a peace treaty formally ending their wartime hostilities.
- Another Day, Another Record High… "This Is A No Brainer"
Some thoughts for tomorrow…
First things first… Small Caps were up again today – of course – the 14th straight day of gains and the longest streak since Feb 1996. Russell 2000 is the most overbought since 2003…7th Intraday recod high in a row… 8th record close in a row, most since 1996
The nasdaq closed red today as S&P scrambled into the green at the close…
With that silliness out of the way… As Americans give thanks for Donald Trump's wealth creation miracle, we thought some context for the last few weeks might be useful…
The US Dollar spiked today near 102.00 – and is at almost 14 year highs…
China's Yuan has crashed as the dollar soars – breaking above 6.95/$ today – 8 year lows…
Emerging Market Currencies plunged to new lows…
Gold has been monkeyhammered (jammed below $1200 today), back to 10 month lows…
And as Gold collapses, so Small Caps have soared… (do those moves look human at all? perfectly linear ramp squeeze)
As The record squeeze continues…
But while stocks have continued to soar, long-bonds have trodden water for 8 days (though 30Y did breakout to the upside briefly today)…
Even though the short-end has seen yields spike to the hghest since April 2010…
And everywhere we look relationships have broken…
Stocks and volume…
US equity factors have decoupled…
Small Caps and credit sensitivity has broken…
And Small Cap and Mega Cap Tech have decoupled…
Banks and the yield curve have snapped…
Bank stocks and bonds have no idea…
EM Bonds and Stocks…
Bond yields are above stocks…
As Yuan crashed today, Treasury yields decoupled…
Oil price and protection costs have decoupled…
US Treasury yields are notably underperforming global developed market bonds…
Gold broke below $1200 today…
As Gold/Silver rolls over from Brexit highs…
Gold and The Dow are equal YTD…
And finally, while Americans luxuriate in their feats tomorrow, consider that post-Trump the aggregate of Global stock markets and developed market bonds have lost $1.4 trillion since the US election…
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