Similar Threads
Whats your best money management method? 52 replies
How to flow with the order flow? 26 replies
Money Management / Risk Management 24 replies
Money management model for multiple strategy trading method 16 replies
Most popular money management method. 7 replies
- Post #6,521
- Quote
- May 5, 2019 6:50pm May 5, 2019 6:50pm
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post #6,522
- Quote
- May 5, 2019 7:54pm May 5, 2019 7:54pm
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
Update: Futures markets have just opened and Dow Futures are down 500 points...
https://zh-prod-1cc738ca-7d3b-4a72-b...5_15-06-46.jpg
All of Friday's melt-up to record high gains, gone...
https://zh-prod-1cc738ca-7d3b-4a72-b...5_15-15-39.jpg
VIX Futures spiked to 16.8...
https://zh-prod-1cc738ca-7d3b-4a72-b...5_15-24-43.jpg
WTI Crude futures are down over 2% at the open...
https://zh-prod-1cc738ca-7d3b-4a72-b...5_15-12-49.jpg
Treasury futures are soaring (equivalent to around a 6bps plunge in 10Y Yield to 2.46% - pre-Fed levels)
https://zh-prod-1cc738ca-7d3b-4a72-b...5_15-29-59.jpg
What is more problematic, as Nomura's Charlie McElligott warns in an emergency note this evening:
Either this is an epic act “rope-a-dope” posturing and poker-playing from POTUS to collect a (self-perceived) “better” deal “win” thereafter... as the 500-handle rally in Spooz has given Trump enough confidence to absorb a market drawdown and again “lean-into” what some in the administration believe is Chinese “slow-playing” - all in an attempt from to extract additional last-minute deal concessions, after last week’s reported negotiation setbacks -
OR a raging ‘miscalculation’ with “vigilante” markets.
SPX / SPY consolidated options “Gamma” is set to flip ‘negative’ around 2890 as an “acceleration point” where moves could get sloppy with dealer hedging.
https://zh-prod-1cc738ca-7d3b-4a72-b...%20%281%29.jpg
Asset managers could turn “sellers” of their very profitable futures length acquired YTD:
https://zh-prod-1cc738ca-7d3b-4a72-b...image001_3.png
There is a very large Asset Mgr ‘net long’ in US Eq Futs, as they currently hold a total $123B net long notional position across US Equities Futures (SPX, NDX, Russell)—with $62.4B / half of the overall position bought YTD alone.
As half of this position then is deeply ‘in the money,’ it would make sense that an extreme ‘risk-negative’ reaction to this news by the market tonight / tomorrow could elicit AM profit-taking to monetize some of this performance YTD
Final point - it was leveraged funds who were finally “forced in” last week (through start of week), covering $9B of SPX futures short positioning...
https://zh-prod-1cc738ca-7d3b-4a72-b...s/image012.png
while we also saw Macro Funds take up their “Beta to SPX” WoW, going from 11th %ile to now 51st %ile into the start of the week.
https://zh-prod-1cc738ca-7d3b-4a72-b...image011_0.png
Tough timing.
Black Monday?
How long before Trump walks back his threats?
* * *
As we detailed earlier, indications across the (admittedly thin) FX markets is that 'pain' is on its way for risk assets after Trump's China Trade deal threats.
Yuan has plunged over 500 pips to 3-month lows...
https://zh-prod-1cc738ca-7d3b-4a72-b...es/bfmC538.jpg
For context...this is the biggest yuan crash since August...
https://zh-prod-1cc738ca-7d3b-4a72-b...es/bfm5EB4.jpg
And USDJPY is down notably (typically signaling derisking of carry-trade funded risk assets)...
https://zh-prod-1cc738ca-7d3b-4a72-b...es/bfm2780.jpg
We'll see if the algos buy the dip when US futures market open. Also note that China is still on holiday today.
- Post #6,523
- Quote
- May 5, 2019 8:00pm May 5, 2019 8:00pm
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=LY4e264-
by Tyler Durden
Sun, 05/05/2019 - 18:55
Authored by Andrew McCarthy via NationalReview.com,
The attorney general’s testimony was clearly accurate...
https://zh-prod-1cc738ca-7d3b-4a72-b...ges/barr_3.jpg
I originally thought this was too stupid to write about. But stupid is like the plague inside the Beltway — one person catches it and next thing you know there’s an outbreak at MSNBC and the speaker of the House is showing symptoms while her delirious minions tote ceramic chickens around Capitol Hill.
So I give you: the Bill Barr perjury allegation.
We are all entitled to our own opinions. But are we entitled to our own facts? Daniel Patrick Moynihan’s bon mot says no, but Washington makes you wonder. Like when spleen-venting about the supposedly outrageous, unbelievable, disgraceful invocation of the word “spy” to describe episodes of government spying is instantly followed by a New York Times story about how the spying — er, I mean, court-authorized electronic surveillance — coupled with the tasking of spies — er, undercover agents — green-lighted by a foreign spy — er, intelligence service — was more widespread than previously known.
If I were a cynic, I’d think people were trying to get out in front of some embarrassing revelations on the horizon. I might even be tempted to speculate that progressives were trotting out their “Destroy Ken Starr” template for Barr deployment (which, I suppose, means that 20 years from now we’ll be reading about what a straight-arrow Barr was compared to whomever Democrats are savaging at that point).
The claim that Barr gave false testimony is frivolous. That is why, at least initially, Democrats and their media echo chamber soft-pedaled it — with such dishonorable exceptions as Mazie Horono, the Hawaii Democrat who, somehow, is a United States senator. It’s tough to make the perjury argument without any false or even inaccurate statements — though my Fox News colleague Andrew Napolitano did give it the old college try. As recounted by The Hill, he twisted himself into a pretzel, observing — try to follow this — that the attorney general “probably misled” Congress and thus “he’s got a problem” . . . although this purported dissembling didn’t really seem to be, you know, an actual “lie” so . . . maybe it’s not a problem after all. Or something.
I assume that in his black-robe days, Judge Nap would have known better. When meritless perjury cases are thrown out of court, judges are often at pains to explain that the questioner who elicited the purportedly false testimony bears the burden of clarity; the terms of the question dictate the evaluation of the answer. In this instance, Barr’s April 9 testimony before the House Appropriations Committee was true and accurate; if a misimpression set in after, it is because the relevant questioning by Representative Charlie Crist (D., Fla.) has been ignored or distorted.
Moreover, because perjury is a serious felony allegation, judges and legal analysts never rely on a general, selectively couched description of the testimony — much less on the likes of Speaker Nancy Pelosi’s because-I-said-so refrain that Barr “lied to Congress” and “that’s a crime.” The testimony must be examined, with emphasis on the words that were used (the questions as well as the responses), and anything we can glean about the witness’s demeanor (stingy? dodgy? forthcoming?).
The mindless, no-need-to-check-the-record allegation against Barr goes like this: The AG testified on April 9 that he had no idea why Special Counsel Mueller was upset over the way Barr’s March 24 letter described Mueller’s report; but, in fact, Barr knew exactly why Mueller was upset because he had received the latter’s March 27 letter complaining about Barr’s missive.
Now, here is the exchange on which the perjury allegation is based, with my italics highlighting key portions:
CRIST: Reports have emerged recently, General, that members of the special counsel’s team are frustrated at some level with the limited information included in your March 24th letter . . . that it does not adequately or accurately necessarily portray the report’s findings. Do you know what they’re referencing with that?
BARR: No, I don’t. I think — I think . . . I suspect that they probably wanted more put out, but, in my view, I was not interested in putting out summaries or trying to summarize because I think any summary, regardless of who prepares it, not only runs the risk of, you know, being under-inclusive or over-inclusive, but also, you know, would trigger a lot of discussion and analysis that really should await everything coming out at once. So I was not interested in a summary of the report. . . . I felt that I should state the bottom line conclusions and I tried to use Special Counsel Mueller’s own language in doing that.
When we look at the actual words of this exchange, Barr’s testimony is clearly accurate. And I don’t mean accurate in the hyper-technical, Clintonesque “depends on what the definition of is is” sense. I mean straightforward, unguarded, and evincing a willingness to volunteer information beyond what the question sought.
Crist did not ask a general question about Mueller’s reaction to Barr’s letter; he asked a specific question about the reaction of Mueller’s “team” to the Barr letter’s description of “the report’s findings.” Regarding the March 24 letter’s rendering of this bottom line — namely, Russia meddled, Trump did not collude, and Mueller failed to resolve the obstruction question — Barr said he did not know what Mueller’s staff was complaining about.
Barr has known Mueller for nearly 30 years; when Mueller was the Criminal Division chief in the Bush 41 Justice Department, he reported to Barr, who was attorney general. It should come as no surprise, then, that Barr was not getting his information from Mueller’s staff; he was getting it from Mueller directly. Nor should it come as any surprise that, before releasing his March 24 letter to the public, Barr gave Mueller an opportunity to review it; nor that Mueller declined that opportunity — given that he knows Barr well, and knew Barr would not misrepresent the report (especially given that the report would soon be public).
Three days after Barr announced the report’s conclusions, Mueller sent his letter, undoubtedly written by his staff. Mueller could simply have called Barr on the phone, as he has done a million times; but the staff’s partisan Democrats wanted a letter, which makes for much better leak material.
(The letter was, in fact, strategically leaked to the Washington Post Tuesday night, right before Barr’s Wednesday morning Senate testimony.) The day after receiving Mueller’s March 27 letter, Barr called Mueller and pointedly asked whether he was claiming that Barr’s March 24 letter articulating Mueller’s findings was inaccurate.
Mueller responded that he was making no such claim — he was, instead, irritated by the press coverage of Barr’s letter. Mueller suggested the publication of additional information from the report, including the report’s own executive summaries, to explain more about why he decided not to resolve the obstruction issue.
But he did not claim Barr had misrepresented his findings. (See Barr’s Senate testimony, starting at 39-minute mark.)
Again, Barr’s contact was with Mueller, not Mueller’s team. His exchanges with Mueller gave Barr no basis to know about any objection to his description of the report’s findings — from Mueller or anyone else. The fact that Mueller’s staff was leaking like a sieve to the Times, the Washington Post, and NBC News does not mean they were sharing with the attorney general what the Times described as “their simmering frustrations.”
That is what Barr said in answer to Crist’s question about the report’s findings. But to avoid the misimpression that he was parsing words deceptively, Barr volunteered his perception that Mueller’s staff wanted more information from the report to be publicized. That was consistent with what can be inferred from Barr’s phone call with Mueller on March 28. And it was not news: Crist’s questions were based on the aforementioned press accounts of leaks from Mueller’s staffers. They were irked at the bad press they were receiving over Mueller’s abdication on the question whether there was a prosecutable obstruction case, and they had groused that there was much more to their report than Barr’s letter conveyed. Of course, Barr never disputed this; as he repeatedly explained, he undertook to render the conclusions, not summarize the entire 448-page report.
Barr decided that his way of making disclosure — the findings followed three weeks later by the full report — was superior to the proposal of Mueller’s staff that their own summaries be released. You can disagree with Barr on that, but that’s not grounds for a perjury claim. And it raises a point Barr made in his Senate testimony: The regulations do not require any disclosure of the special counsel’s report (which is supposed to be a confidential Justice Department document, as is typical of Justice Department deliberations over whether to charge or decline to charge). The decision of what, if anything, to disclose, and how that should be done, is exclusively the attorney general’s, not the special counsel’s. Mueller’s job was to make a prosecutorial judgment — to charge or decline to charge obstruction. Mueller failed to do that. Since Mueller didn’t do his own job, isn’t it a bit presumptuous of his staff (through press leaks) to tell Barr how to do his?
Could what happened here be more obvious?
Mueller received fawning press for two years on the expectation that he would slay Trump. Then, on March 24, Democrats and the media learned not only that there was no collusion case (which was no surprise) but that Mueller had been derelict, failing to render a judgment on the only question he was arguably needed to resolve: Was there enough evidence to charge obstruction? Journalists proceeded to turn on their erstwhile hero. This sent him reeling, and it brought to full boil the anger of Mueller staffers, who wanted to charge Trump with obstruction based on the creative (i.e., wayward) theory they had been pursuing — namely, that a president can be indicted for obstruction based on the exercise of his constitutional prerogatives if prosecutors (including prosecutors who are active supporters of the president’s political opposition) decide he had corrupt intent. The staffers put their pique in a letter that could be leaked, and Mueller was sufficiently irked by the bad press that he signed it. And now Democrats are using the letter as the launch-pad for The Big Lie that Barr lied, calculating that if they say it enough times, and their media collaborators uncritically broadcast these declarations, no one will notice that they never actually refer to the transcript of what they claim is the false testimony.
https://zh-prod-1cc738ca-7d3b-4a72-b...-mb_1_orig.jpg
Democrats are unnerved. Attorney General Barr is pursuing an inquiry into the Obama administration’s decision to conduct a foreign counterintelligence investigation of the Trump campaign. The time is now, they figure, to reprise the Ken Starr treatment: the ad hominem withering of an accomplished, highly capable official — in this instance, one who is daring to press questions that would have been answered two years ago if an incumbent Republican administration had spied on — er, monitored — a Democratic presidential campaign.
Benjamin
- Post #6,524
- Quote
- May 5, 2019 8:12pm May 5, 2019 8:12pm
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
Yesterday was Star Wars Day. May the 4th and all that. Maybe I’m a little old to be celebrating a movie, but whatever.
As I reviewed the events of the past week it reminded me that Star Wars, at its core, is about the pivotal moments in history and the changing from one political order to another.
Be it the fall of the Old Republic in the prequel films to the end of the Empire and Palpatine’s rule in the Original Trilogy. We even open The Force Awakens with Kylo Ren wiping out the last group of people who still revere the Jedi to begin his quest to consolidate power amidst the chaos.
Star Wars has always functioned as a mirror to our current political drama. Films emerge every generation to reflect where we’re headed as a society. Maybe that’s why the new films aren’t as well loved by a part of the fan base, they are telling us things we don’t want to hear.
So maybe it is fitting that this week’s events were all so indicative of what is happening in our world today.
The post WWII institutional order and political elite are old.
And the old institutional order is failing.
The outdated and old enmities between the U.S. and Russia led to a series of disastrous decisions by men and women who are obsessed with overcoming their thwarted expectations of enhanced power and prestige.
There was Operation Bay of Fat Pigs, coup-attempt which unfolded in real time in Caracas on Tuesday. John Bolton was “snookered” (H/T to Moon of Alabama for excellent reporting on this) by Venezuelan officials into thinking they had the military and supreme court on their side.
When Juan “Random Fall Guy” Guaido made his move and no one else did, the U.S. was caught televising live their own ineptitude. And then laughably tried to blame the Russians for it.
While it is clear that Venezuelan President Nicolas Maduro had outwitted him, Bolton apparently continues to rail on U.S. Southern Command leadership and President Trump to invade.
Why? Because John Bolton is old, inflexible and well past his use-by date for coherent foreign policy decisions.
Lindsay Graham wandered in out of the bathhouse to wonder where our aircraft carriers were and why weren’t they sending a clear message to those pesky Russians?
And everyone else around the world is wondering what the hell are people in D.C. smoking?
If that wasn’t enough for you, how about the ridiculous spectacle of Democratic senators venting their desperation and vitriol at Attorney General William Barr for raining on their impeachment parade.
From Cory “Spartacus” Booker to Maisie “Respect Me, Dammit!” Hirono all we saw from them was desperation and histrionics at also being outwitted by both Donald Trump and his legal team.
Mueller, his staff of hatchetmen, the Obama administration and the rest of the corrupt old-guard in D.C. fully expected to be allowed free rein to convict Trump politically of Obstruction of Justice based on an interpretation of Federal Statutes that could only be justified in the world of Philip K. Dick’s Minority Report.
When that didn’t happen they are now looking at potential blowback from a vain and vindictive man occupying the supposedly most powerful office in the world.
But is that really the case anymore? It seems John Bolton has been more president than Trump recently.
The Federal Reserve revealed they have no answers to the rapidly brewing dollar liquidity problem they created and can’t extricate themselves from. Dropping Interest on Excess Reserves was pure window dressing on a problem far deeper than they can publicly admit to.
Crossing the pond we have the insistence of Theresa “Baghdad Bob” May that she’s still working towards a real Brexit after the complete wipeout of her Tory party in local council elections across the whole of England.
Then there’s the latest scandal with May firing adolescent Defense Minister Gavin Williamson for leaking her cabinet’s corrupt relationship with Chinese mobile technology leader Huawei.
If May’s goal is to destroy the British government in preparation for selling the country lock, stock and two smoking barrels to the European Union, then she may be the only truly competent politician left in the West.
They all just look so old and like a bunch of sorry has-beens getting together for a Love Boat 30th anniversary special instead of serious people with serious policy solutions.
The DNC is in the midst of a coup attempt of its own by Cenk Uygur and the Justice Democrats. Their only choice is to rally around Pedo Joe Biden who is fully implicated in the RussiaGate mess with his deep ties to Ukraine where so many of the lies about Trump originated.
Biden is 78. Bernie Sanders is is about to be.
The European Union is staring at the worst kind of blowback to its brutal strategy to deny Brexit. The latest polling has Nigel Farage’s Brexit party pulling from all parts of the British electorate to become the dominant party heading into the polls in three weeks.
If this keeps up he’ll completely change the face of British politics and all of this EU inevitability will dissipate like a fart in a hurricane of populist anger.
Lastly, don’t think that Trump will not put as much pressure as he can on these people. Barr has already begun the process going after Nellie Ohr. There is a possibility we’ll see Trump actually get a few scalps here.
And that may include telling Sheldon Adelson to get stuffed and begin reversing course on the insane levels of aggression emanating from the White House.
There comes a point when you look around and realize something isn’t working. None of the people I’ve talked about here can or will admit that they’ve failed. They are politicians, they can’t show weakness.
Trump has the opportunity here to use all of this to his egregious advantage. While the Democrats lose their collective minds Trump took a long phone call with Russian President Vladimir Putin and immediately made it public.
Embarrassing him and the U.S. the way John Bolton and Mike Pompeo did this week with Operation Bay of Fat Pigs will not sit well with Trump. He’s been asked to sell a policy it doesn’t look like he believes in.
Trump is in re-election mode now. And Venezuelan regime change is not a winning strategy, neither is letting RussiaGate go. The key for him now is to undo a lot of the damage that’s been done by his staff, disloyal cabinet members and recalcitrant bureaucracy who are all wedded deeply to the old way things are done.
Those old ways aren’t working anymore. And if any of these people want to remain in power and pass it along to the next generation they better start acting like the humanitarians they purport to be. That means giving the people what they want — Hillary Clinton’s head on a pike, Brexit, and an end to the creeping technocratic totalitarianism outsourced to Google, Facebook, Twitter and Apple to get around the Constitution.
Houses divided into as many factions as we see all across the west will not stand. They not only invite the crises on our horizon they accelerate them.
* * *
Support for Gold Goats ‘n Guns can happen in a variety of ways if you are so inclined. From Patreon to Paypal or by your browsing habits through the Brave browser where you can tip your favorite websites (like this one)for the work they provide.
- Post #6,525
- Quote
- May 5, 2019 8:26pm May 5, 2019 8:26pm
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
In light of today's shocking update from Trump's twitter account on the true state of trade war, one which confirmed what we said all along, namely that there is no deal coming any time soon, some are wondering if that record short in VIX futures that has quickly since the start of the year and now amounts to 180K net spec shorts, is about to lead to a VIX explosion a la Feb. 2018 amid a Volkswagen-like short squeeze.
https://zh-prod-1cc738ca-7d3b-4a72-b...pecs%205.3.jpg
Maybe, but also maybe not.
As a reminder, we were the first to point out in "A War Has Broken Out In The VIX Complex" that even as massive VIX futs piled up on the short side, the vega of vol ETPs was approaching an all time high, and in fact, according to the latest update, was indeed at a record level.
https://zh-prod-1cc738ca-7d3b-4a72-b...P%20record.jpg
Now, superficially, there is a kind of a symmetry around this divergence, one which has managed to confuse not only the more chronically clueless members of the fintwit echo chamber, but apparently the likes of Goldman Sachs' derivatives expert, Rocky Fishman.
And speaking of Fishman, on Friday, the Goldman strategist published a "Q&A on the VIX ETPs' record long positioning", in which he laid out some of the core basics, including his calculation of the ETP sector's sensitivity to VIX moves, or vega. In a nutshell, Fishman echoes what we said three weeks ago, and notes that "the net position of the ETPs is more long than ever before, with almost $300mm of exposure per VIX futures point. The TVIX (2x levered VIX ETN) is currently the largest ETP by AUM and largest by far by total VIX futures exposure. The TVIX and the newly-renamed VXX (formerly VXXB) have each received around $1bln of inflows year-to-date (though each has a market cap below $1bln due to negative performance). The growth in long VIX products and the lack of interest in short VIX products both reflect defensiveness by their investors. With the beta of VIX futures to the SPX at about 3 times and the weighted VIX future close to 16, this position is similar in magnitude to a $15bln short position in SPX futures.
https://zh-prod-1cc738ca-7d3b-4a72-b...oldman%201.jpg
Incidentally, and Fishman is correct about this, the current layout in vol ETP land is a mirror image of the record short position ahead of the Feb 2018 volatility explosion, while hedge funds were modestly short VIX.
https://zh-prod-1cc738ca-7d3b-4a72-b...0vs%202019.jpg
Where we disagree with Fishman, is his dismissal of the record short VIX position which, as shown in the top chart, is certainly a concern to anyone who is short the VIX index, and may be caught in a massive short squeeze (assuming there is one).
The crux of Fishman's argument is his outright dismissal behind the record VIX short, which he claims is simply "because VIX ETPs have a record long position." Actually, that's not true, but let's hear Rocky out: according to the Goldman strategist...
... futures contracts are a zero-sum market – for every future one investor is long, another investor needs to be short a future. The CFTC provides two different reports on VIX futures that both show positioning that adds up to zero, as the sum of the positions of long investors is the mirror image of the position of short investors. We find the Traders in Financial Futures report to be the more informative of their reports, and its Leveraged Funds category (which generally consists of hedge funds) has had a growing short VIX position to offset ETP issuers’ long positions (predominantly reporting in the Dealer category). The Legacy report’s Commercial category for VIX likely consists mostly of ETP issuers, so its Non-Commercial category likely represents everyone else. With VIX futures at a record long, the rest of the investor universe is at a record short. We believe that much of that short VIX futures position is in hedged and relative value structures, rather than in outright short volatility.
https://zh-prod-1cc738ca-7d3b-4a72-b...ions%20VIX.jpg
In theory, Fishman is of course, correct that non-commercials always, by definition, offset commercials. Where he is wrong, is assuming that commercial specs are by definition rolled into the ETP umbrella. This, as so many examples in the past have demonstrated, is patently not true, and instead the variance of futures vs ETF/ETP products has everything to do with investor types, the first being the preference of institutional investors due to their liquidity, the former being the pick of retail investors due to its low cost.
Refuting Goldman, and confirming precisely this point is Deutsche Bank's own derivative strategist Parag Thatte, who in his latest weekly flows report also observes the record divergence between VIX futs and VIX ETPs. This is how he lays it out:
Recent inflows of $2.7bn YTD to long vol products have driven vega outstanding across the VIX ETP complex to a record high of $255mn. At the same time, net short positioning in VIX futures contracts is also at a record high.
Thatte also lays out the best visual relationship between the two series, by charting the Vega of the ETP complex vs the non-commercial VIX net specs. Clearly, there is a correlation.
https://zh-prod-1cc738ca-7d3b-4a72-b...ETP%20Vega.jpg
And this is where Goldman and DB's takes on the chart above differ, because while Goldman finds the relationship to be a one to one net off, DB actually reads between the lines, so to speak, and points out that "the inverse relationship between positioning in the VIX futures market and Vol ETPs suggests that demand for long vol exposure from primarily retail investors is being recycled to institutional players, likely Hedge Funds, in the VIX futures market."
In other words, and this is what Goldman fails to observe, is that it has all to do with the investor class behind a given vol position, as on one hand we have retail investors who have never been more long vol (ironically, they may end up being proven right very soon), while institutions, and hedge funds, are the shortest VIX they have ever been, perhaps simply because they missed the rally in stocks YTD, and have been scrambling to at least pick up some carry, and the easiest place to do that is by shorting spot VIX.
Of course, with enough shorts on board, the risk rises of a massive squeeze, only instead of one driven by retail investors as was the case back in 2018, this time it will be hedge funds that light the match.
Or maybe not just yet, because one place where both Goldman and DB agree on is that we are not at such extremes as we saw back in late January 2018. First, here is Thatte:
While vega outstanding in the Vol ETP complex is at record highs, vega-to-buy on a vol spike driven by leveraged Vol ETPs is low relative to Jan 2018. So while VIX positioning is stretched, the risk of a reinforcing feedback loop on a vol spike driven by leveraged products is relatively low.
https://zh-prod-1cc738ca-7d3b-4a72-b...ack%20loop.jpg
And here is Fishman, generally agreeing with Thatte:
When vol rises, both levered long and inverse VIX ETP issuers buy VIX futures, contributing to vol-of-vol. However, currently the size of that impact is benign.A quantitative analysis of ETP issuers’ need to rebalance should VIX futures spike sharply shows that the amount of VIX futures issuers would be economically driven to buy on a given volatility spike is around 1/4 of the amount they would have been driven to buy prior to the Feb-2018 VIX spike. Levered long ETPs do have the potential to be especially impactful on an escalating, multi-day VIX spike, because their exposure to VIX futures would be growing each day of the spike(unlike short ETPs which would be getting smaller each day). VIX options’ implied volatility has risen recently, but is still not very high compared with its 2017-18 ranges, indicating that investors are not unusually worried about current positioning.
Could both strategists be wrong in their optimistic take on the broader implications of a potential VIX squeeze? Absolutely, and in fact, judging by the sudden waterfall in futures late on Sunday and surge in the VIX, now that the trade deal between the US and China appears to be dead, we may find out very soon just how wrong both Goldman and Deutsche may end up being.
- Post #6,526
- Quote
- May 5, 2019 8:31pm May 5, 2019 8:31pm
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
https://news.goldcore.com/ie/wp-cont...g-1024x663.jpg
Gold bars sit across a one kilo gold bar at bullion dealers GoldCore, in London, U.K. in March 2010. Photographer: Chris Ratcliffe/Bloomberg
(Reuters) - A slowing global economy, stock market turmoil, delays to interest rate rises and potential U.S. dollar weakness are expected to boost average annual gold prices to their highest since 2013, a Reuters poll found.
Gold will average $1,322 an ounce this year and $1,369 in 2020, the median forecasts returned by the poll of 34 analysts and traders showed.
The forecasts were higher than those from a similar poll three months ago which saw averages of $1,305 this year and $1,350 in 2020.
Gold prices have slipped in recent weeks to around $1,280, under pressure from a stronger dollar, which makes bullion more expensive for buyers with other currencies, and rising stock markets which offered investors better returns.
Helping push gold lower, some investors have taken money out of gold-backed exchange-traded funds and speculators ramped up bets on lower prices on the Comex exchange, which now outnumber wagers on higher prices.
But analysts said slowing global economic growth, the increasing likelihood of stock market corrections, a pause in interest rate rises and a likely weakening of the dollar would bring money back to the metal.
Gold is traditionally seen as a safe place to invest during times of uncertainty, as it tends to retain its value while other assets slide.
“We expect falling risk appetite and a surge in safe-haven demand to be the key factor driving both gold and silver prices,” said Capital Economics analyst Ross Strachan.
Higher interest rates are bad for gold because they raise bond yields, making non-yielding bullion less attractive to investors.
A Reuters poll of 70 currency strategists showed they expected the U.S. dollar, which in April reached its strongest in almost two years, to slip over the coming year.
The gold forecast for this year is 4 percent higher than last year’s average price of $1,268 and would be the highest average since 2013.
But it suggests gold will struggle to break convincingly above recent peaks of $1,374.91 hit in 2016 and $1,366.07 last year – which together form strong technical resistance.
“We need a strong impetus to break that resistance,” said LBBW analyst Frank Schallenberger.
“(But) with central banks buying more and more gold ... interest rates staying low and economic perspectives looking dull, gold will eventually go up,” he said.
For silver, poll respondents forecast an average price of $16.05 an ounce this year, up from $16 in the poll three months ago, and $17 in 2020, down from $17.20 in the previous poll.
Editors Note: We would prefer not to get into the forecasting and predictions business as "crystal ball gazing" is fraught with uncertainty at the best of times.
This is particularly the case in 2019 given the massive macroeconomic, geopolitical, monetary and systemic uncertainty and risk of today.
It is worth remembering that many, if not most, of the precious metal poll respondents (both Bloomberg and Reuters) were bearish in gold's last bull market despite gold rising every year from 2003 to 2012.
https://goldprice.org/charts/history...png?1450070826
We were one of the few respondents who were positive on gold in those years. Analysts who were bullish were only mildly so. Yet gold saw massive gains and was the best performing asset in those years, particularly during the global financial crisis from 2007 to 2011.
We expect gold and silver to again outperform stock and bond markets. U.S. equity markets, including the S&P 500, Nasdaq etc are back at all time record highs, while precious metal prices remain very undervalued. The record highs are largely due to the massive out-performance of the FAANG stocks, some of which saw serious selling pressure this week.
It is a great time to re-balance portfolios. It makes sense and is prudent to take profits from stocks and bonds at these levels and acquire safe haven gold.
What is far more important than the price of gold is the value of gold as a hedge and safe haven asset. This has been seen throughout history including during the global financial crisis and indeed in the academic and independent research on gold in recent years.
https://news.goldcore.com/us/wp-cont...isksBanner.jpg
Must Read Guide: 7 Real Risks to Your Gold Ownership
News & Commentary
Central Banks Are Ditching the Dollar for Gold (Bloomberg)
Central bank binge buying fuels red-hot gold demand - WGC (Reuters)
Gold poised for gains as global markets brace for turmoil: Reuters poll (Reuters)
Societe Generale resigns as London gold and silver market maker - (Reuters)
Turkish central bank to set up lira-for-gold swap market (Reuters)
Markets Have Misread the Fed (Bloomberg)
When central banks don’t understand the markets, watch out (Marketwatch.com)
Australia Is On The Brink Of A Housing Collapse That Resembles 2008 (Forbes.com)
In Memory of Bart Chilton (ArcadiaEconomics.com)
Bart Chilton: A voice from the grave? (Silverseek.com)
OECD is a clear and present danger to Irish prospects (IrishTimes.com)
Recent Market Updates
- Global Gold Demand Gains In Q1, 2019: Central Banks Buy Gold Bullion and ETFs See Inflows
- Australia and Many Property Markets To Crash Like Ireland?
- Death of Inflation and the Death of Equities?
- SWOT Analysis: Venezuela Sells $400 Million Worth Of Gold Bullion
- World’s Central Banks Want More Gold – India May Buy 1.5M Ounces In 2019
- Russia’s 2019 Gold Rush Continues: Buys 600,000 Ounces of Gold In March
- When Should You Sell Your Gold and Silver? (GoldCore Video)
- Understanding Gold: A Step By Step Guide To Gold As An Asset Class
- Post #6,527
- Quote
- May 5, 2019 8:36pm May 5, 2019 8:36pm
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post #6,528
- Quote
- Edited 10:33am May 6, 2019 9:05am | Edited 10:33am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
Hello Everyone
Hello loveandpeace
So you started off so well. Your first FX trade was on March 3, 2019. You started with 3 wins then a loss followed by 8 wins in a row and another 10 wins in a row.
I was very excited for you and myself as your teacher and Mentor.
Then on March 11, 2019 you had a loss of $958.00 which is the MAXIMUM LOSS my trading method allows. Then you had another 13 FX trades in a row that were all winning Forex trades. For awhile I was wondering if perhaps you might become a better Forex trader than myself with 16 years of hands on experience and results.
THEN you STOPPED LISTENING to me and stopped communicating with me. I did not say anything because I wanted to observe exactly how you would deal with your changing results.
You had your first break even FX trade, then a loss of $530.50 and three wins the last being $152.75 US dollars. Then IT ALL FELL APART.
On March 19, 2019 you had the following losses.
(1) $501.75
(2) $524.00
(3) $1017.00
(4) $1012.00
Then three small wins of $132 , $127 and $131 followed by these losses.
(1) $1516.00
(2) $1542.00
(3) $1006.04
So now you are even allowing your MAXIMUM losses to go over $1000.00
Then you lost another $12,000 or so US dollars in 14 more trades until today May 6, 2019 where your last two open positions of USD/JPY were closed for profits of $455.31 and $502.25.
Your closed balance now all in cash is as shown in the SCREENSHOT above.
I still have good confidence in your ability to become very wealthy however if you do not follow my instructions and trade just to trade and do not use Risk On and Risk Off as your guidlenes along with the proper Risk Management then you will go into the group of the 95% of all Forex traders both retail and professional that lose ALL their money.
At least the money that you lost are Demo Funds. If you start following my instructions again within 60 days you can get your balance over $60,000 US dollars or over 20% ROI (Return On Investment)
Please share your thoughts with me on this thread. My comments are meant to be positive and instructive so please take them as I mean them to be taken.
Sincerely yours
Benjamin
- Post #6,529
- Quote
- Edited 10:38pm May 7, 2019 10:24pm | Edited 10:38pm
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
May 7, 2019
Top Trump Official Flees Back To America After Russia Warns “We’re Prepared For Armageddon, Are You?”
By: Sorcha Faal, and as reported to her Western Subscribers
A grimly worded new Ministry of Foreign Affairs (MoFA) report circulating in the Kremlin today states that immediately after Foreign Minister Sergei Lavrov warned US Secretary of State Mike Pompeo against America starting any more wars—with Lavrov directly warning Pompeo “We’re prepared for Armageddon, are you?” in his knowing that a US attack on Venezuela could lead to nuclear war—this top President Trump official fled back to Washington—and in whose fleeing wake caused State Duma Deputy Leonid Slutsky to further warn that US National Security John Bolton’s “battle cry shows the US is also preparing for a military scenario in Iran”—thus leaving only one week’s time, until 14 May, for Pompeo to personally tell President Putin, in person during their Sochi meet, if the United States wants peace or war—a choice China is already expecting the worst for as evidenced by their just having placed their entire army on “heightened alert”. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]
http://www.whatdoesitmean.com/army1.jpg
According to this report, with the longest war in US history that has cost over 2,400 American lives, along with trillions-of-dollars of lost national wealth, America has been defeated in Afghanistan, and is exactly like what happened with the former British Empire and Soviet Union—a grave fact that would logically make one think that the United States would now be weary of its endless global conflicts—a thinking, however, dashed into oblivion yesterday when the war mongering American mainstream propaganda media hyperbolically blared out to their citizens that a US Navy nuclear armed aircraft carrier group and US Air Force nuclear strike bombers had been suddenly dispatched to counter an as yet unnamed “Iranian threat”.
Not being truthfully told to the American people by their war mongering press establishment, though, this report notes, is the fact that no military forces of this kind are ever “rushed” to do anything, nor are they ever “suddenly” deployed—and in this exact case shows the Abraham Lincoln Carrier Strike Group having departed Naval Station Norfolk-Virginia on 1 April for its Middle East deployment—who were followed a fortnight later, on 15 April, by the US Air Force stationing for the first time in history its F-35 strike fighter-bombers into the Middle East, too.
http://www.whatdoesitmean.com/army2.jpg
The true fact of what the United States is doing with these military deployments, this report explains, began last month when Russia and Iran announced that they were going to hold joint naval drills in the Persian Gulf—that coincided with Russia and China announcing that they were holding joint naval exercises, too—both of which were in preparation for China’s announcing yesterday that it is set to defy US sanctions on its purchase of Iranian oil—and whose sea shipments of from Iran to China are now protected by both Russian and Chinese naval and air forces.
In response to China announcing it is going to defy US sanctions on Iranian oil purchases and shipments, this report continues, the United States began ratcheting up their war propaganda—but with their failing to tell their citizens that the real cause of this conflict is due to the simple fact that North American produced oil cannot compete on the global market with lower priced oil from nations outside of US military control—that is fast leading to “the likely collapse” of OPEC as it’s unable to balance global oil markets—and whose first North American casualty is Canada whose oil companies going bankrupt are increasing by the day, with one of its experts now even warning “it's going to get a lot worse”.
http://www.whatdoesitmean.com/army3.png
American oil companies stare into the abyss as world can’t afford price of their oil
With American oil producer Jones Energy, Inc. having just filed bankruptcy on its over $1 billion in debt as the world can no longer afford North American oil, who joins numerous other large US oil companies going bankrupt last year, this report details, it is no surprise that the United States now finds itself on the cusp of war with large oil producing nations outside of its military control—such as Iran, Russia, Syria and Venezuela—that now sees China preparing for war to protect its Iranian oil purchases—who will quickly be joined by India after the US yesterday broke its agreement to keep oil flowing to it when they ended their Iranian oil purchases.
And in a feinting move to sideline Russia from being able to protect Iran oil shipments, this report gravely states, the US allowed its Syrian terrorist forces to unleash a rocket attack against a Russian air base in Syria—that Russian air forces responded to with massive air strikes on these US-backed terrorists—which elite Syrian military forces then followed with a mass invasion of these US-backedterrorists’ holdout cities—and has led the Americans to voice their fears that a “final showdown” has now begun.
http://www.whatdoesitmean.com/army5.jpg
Most gravely being kept from the American people by their mainstream media war mongering propaganda masters, this report concludes, is that the first main casualty should war erupt will be one of their nation’s US Navy aircraft carriers—which are weapons of war and are just as vulnerable to attack as any other weapon—that the US can ill afford to lose even one of as the retired-USS Enterprise is already being scrapped for parts to keep other aircraft carriers operational, and President Trump has just ordered the US Navy to now keep the supercarrier USS Harry Truman his own budget declared needed to be retired—but whose sinking of one, at the cost of nearly 6,000 American lives, even US War College expert Dr. Robert Farley is now saying would not necessarily inflame US public opinion, and might even create a sense of vulnerability among the American people—none of whom, though, will ever be able to know the truth about these things as long as they continue listening to the lies told to them by CNN—who, this past Sunday, published a news article with the words “following elections in January in which voters chose opposition leader Juan Guaido over him for president”—but whose truthful reality of shows “First, there were no Venezuela elections in January…Second, in the last election, Guaido didn't run…Third, the opposition boycotted the last election”—thus making it understandable why Foreign Minister Lavrov, yesterday, when asked a question by a CNN reporter during his press conference with Secretary of State Pompeo, shot back saying “Some call your company CNN ‘fake news,’ and now you are asking a fake question”.
http://www.whatdoesitmean.com/army4.jpg
Typical example (above) of imbecile American person who watches and believes CNN
May 7, 2019 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.
- Post #6,530
- Quote
- May 8, 2019 6:36am May 8, 2019 6:36am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post #6,531
- Quote
- May 8, 2019 6:46am May 8, 2019 6:46am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
Thanks loveandpeace
Please call me as we need to speak. Thanks.
Benjamin
- Post #6,532
- Quote
- May 8, 2019 6:47am May 8, 2019 6:47am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post #6,533
- Quote
- May 8, 2019 6:48am May 8, 2019 6:48am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post 6,528
- Cleanup
- Quote
- May 6, 9:05am (45 hr ago) | Edited May 6, 10:33am
- https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
- | Commercial Member | Joined Dec 2014 | 5,462 Posts | Online Now
Attached Image (click to enlarge)
https://www.forexfactory.com/attachm...1&d=1557147919
Hello Everyone
Hello loveandpeace
So you started off so well. Your first FX trade was on March 3, 2019. You started with 3 wins then a loss followed by 8 wins in a row and another 10 wins in a row.
I was very excited for you and myself as your teacher and Mentor.
Then on March 11, 2019 you had a loss of $958.00 which is the MAXIMUM LOSS my trading method allows. Then you had another 13 FX trades in a row that were all winning Forex trades. For awhile I was wondering if perhaps you might become a better Forex trader than myself with 16 years of hands on experience and results.
THEN you STOPPED LISTENING to me and stopped communicating with me. I did not say anything because I wanted to observe exactly how you would deal with your changing results.
You had your first break even FX trade, then a loss of $530.50 and three wins the last being $152.75 US dollars. Then IT ALL FELL APART.
On March 19, 2019 you had the following losses.
(1) $501.75
(2) $524.00
(3) $1017.00
(4) $1012.00
Then three small wins of $132 , $127 and $131 followed by these losses.
(1) $1516.00
(2) $1542.00
(3) $1006.04
So now you are even allowing your MAXIMUM losses to go over $1000.00
Then you lost another $12,000 or so US dollars in 14 more trades until today May 6, 2019 where your last two open positions of USD/JPY were closed for profits of $455.31 and $502.25.
Your closed balance now all in cash is as shown in the SCREENSHOT above.
I still have good confidence in your ability to become very wealthy however if you do not follow my instructions and trade just to trade and do not use Risk On and Risk Off as your guidlenes along with the proper Risk Management then you will go into the group of the 95% of all Forex traders both retail and professional that lose ALL their money.
At least the money that you lost are Demo Funds. If you start following my instructions again within 60 days you can get your balance over $60,000 US dollars or over 20% ROI (Return On Investment)
Please share your thoughts with me on this thread. My comments are meant to be positive and instructive so please take them as I mean them to be taken.
Sincerely yours
Benjamin
- Post #6,534
- Quote
- Edited 10:43am May 8, 2019 6:50am | Edited 10:43am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post #6,535
- Quote
- Edited 11:38am May 8, 2019 10:45am | Edited 11:38am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
If Feb 5, 2018 was the infamous inverse VIX ETF "volmageddon", then May 7, 2019 was the "VVIXtermination" event.
Following an overnight Reuters report , according to which late last Friday China reneged on nearly all aspects of the trade deal that had already been agreed upon previously, "with systematic edits to a nearly 150-page draft trade agreement that would blow up months of negotiations between the world's two largest economies" as "China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: theft of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation", the Friday midnight imposition of tariffs looked like a near-certainty, sending futures sharply lower... at least until Trump threw algos for a loop once again on Wednesday morning when he tweeted that "China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal."
Still, confusion is rampant, and after one of the worst selloffs of 2019, Nomura's Charlie McElligott writes this morning that "as funds have become more dynamic/sophisticated with their unwinds (to reduce their often-times ‘heavy handed’ / price-insensitive de-risking)", there will likely be additional days-worth of deleveraging flow both from:
- The massive Asset Manager ongoing de-risking / profit-taking in their previously highlighted US Equities Futures “Longs” as well as
- Trend “Longs” in SPX also reducing (which triggered yday and sold down from +100% to +60%, as the signal flipped in 2w and 1m models)—plus
- The FUTURE risk of new tariff-related headlines which in-turn could dictate mechanical de-risking driven by Vol Targeting strategies in the coming days, majority of whom have yet to mechanically- or dynamically- de-leverage without another few days of ‘sticky vol,’ which then can “pull” trailing realized higher (e.g. SPX 20d realized still below 10 tgt, which is generally ‘benchmark’).
Yet while the December selloff was far longer and more intense, by at least one measure yesterday's furious dump on the unexpected collapse of the trade deal, matched - if not was stronger than - the December mini bear market, and nowhere was this more obvious than in the previously discussed explosion of the VVIX, or vol of vol, index.
https://zh-prod-1cc738ca-7d3b-4a72-b...VVIX%205.7.jpg
In fact, as McElligott writes today, this has been the "second largest three-day move inb VVIX/VIX ratio since the Feb 5, 2018 leveraged short VIX extinction event (only behind the "Mnuchin Christmas Massacre" of Dec 24th 2018): There will never be another Feb 5th (bc that ‘short vol’ rebalancing supply from the leveraged VIX universe will never recover to prior levels)…but this was a good one.
https://zh-prod-1cc738ca-7d3b-4a72-b...may%202019.jpg
There is another aspect to this week's violent move higher in the VIX: the extreme skew in the VIX confirms the outperformance of VIX vs S&P; i.e. per the previous two year lookback as “standard,” yesterday’s SPX performance “should have” seen VIX close at 15.95—but instead, it closed at 19.32 (and +47.3% WoW), which to McElligott, "captures the relative extremes of the “short vol” unwind which behind the VIX futures curve inversion."
https://zh-prod-1cc738ca-7d3b-4a72-b...20vs%20SPX.jpg
Incidentally, this is precisely what we warned about this Sunday, in "Is The VIX About To Explode Higher Thanks To A Record Short Squeeze."
This violent repricing of volatility has gotten McElligott thinking several steps ahead, and he is already discussing how to trade what's coming next. As he notes, while "it is still too early (because the tariffs being slapped-on Friday at midnight will Equities off further / risk further Vol squeeze as market is still in “crash DOWN” not “crash UP” mode—SEE VVIX and upside skew at 3% / downside skew at 81st %ile / ratio of 25d put and 25d call skew 91st %ile)—we are inching-ever-nearer to the time to start thinking about tactical expressions to capture Equities upside via options (although at this moment, ‘selling puts’ likely far more attractive than ‘calls,’ which look outright awful) in order to take advantage of this amazing ‘rich vol’ market backdrop." but again, "just not quite yet." We are confident the Nomura strategist will say "when."
One more observation from the Nomura strategist, and this has to go with how to best hedge yesterday's historic volatility explosion. According to McElligott the right trade here is Eurodollar futures, whose "upside look like smart protection, as Rates/USTs are working as a hedge during the Equities vol spike (Risk-Parity doing its job), with the additional ‘kicker’ that the more the US/China tariff- and trade- dynamic devolves, the more likely the market is to price-in the likelihood of “dovish Fed” and/or rate cuts (Fed is cornered into “asymmetric” policy—much lower bar to “ease” than to “hike”)."
In parting, here are a few more observations on yesterday's market action, straight from McElligott:
- As per earlier mention and despite silly headlines later from financial media, yesterday’s bounce into the close (and the initial overnight follow-through) was NOT about some sort of tariff / trade “calm” or “optimism”—it was instead the result of 1) long vol / short delta monetization (both from hedgers and front-runners of the anticipated systematic deleveraging trade) and in the larger sense, 2) an environment where funds / traders are forever incentivized to sell into spikes in volatility
- Tactically-speaking, it was ‘vol longs’ (whether ‘Long’ VIX ETN owners or dealers who were sold volatility from buyside) and / or ‘short delta’ (e.g. dynamic hedgers OR even traders who were looking to front-run the Systematic Trend flows) looked to lock-in positive pnl yesterday afternoon as the tape cratered late, they turned the tape in the final 30 minutes via their profitable unwinds (sell some of their ‘long vol’ / cover their ‘short delta’)
This, in turn brings us to what McElligott calls the "larger/existential question": why does this now almost quarterly “short vol/easy-carry/easy-carry/easy-carry BLOW-UP then v-shaped snapback” seemingly occur now more-than-ever before? Our answer: central banks, and McElligott agrees:
"IT’S PURE MINSKY of “stability breeding instability”--I will happily pin-this on the post GFC Central Bank policy response of large-scale-asset-purchases (LSAP) and forward-guidance on “lower interest rates and flatter curves forever” which has then perpetually suppressed cross-asset volatility AS WELL AS squelched yields—all in order to create notional “financial repression” which drives “portfolio rebalancing"
As such, Real Money institutions have moved from being BUYERS of volatility and tail-risk hedges to instead turn VOL SELLERS in the post-crisis period (systematic call overwriting / put underwriting, condor- and strangle- selling, roll-down etc)—all in order to generate total return / “yield enhancement” in a world deprived of return.
McElligott's conclusion: "As a friend wrote yesterday: “If you’re short vol, you make money…but eventually die. But if you’re long vol, you die before you make money."
There is third alternative: you're short vol and you do make money. The problem is that since central banks have now staked the very concept of fiat money behind their vol suppression strategy, the money you make will soon be worthless.
- Post #6,536
- Quote
- Edited 11:46am May 8, 2019 11:32am | Edited 11:46am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
May 8, 2019
German-American Friendship “In Shreds” As Trump Prepares For European Socialist Destruction
By: Sorcha Faal, and as reported to her Western Subscribers
A fascinating new Ministry of Foreign Affairs (MoFA) report circulating in the Kremlin today noting the German media establishment announcing earlier this morning that their nation’s friendship with America is now “in shreds”, states that this friendly relationship demise of the West’s two most economically powerful countries is due to “Monday being the most important day of Trump's Presidency”—a truthful declaration made by one of his top advisors Steve Bannon who warned Trump “we’re in an economic war with China…it’s futile to compromise”—a warning Trump acted upon Monday after finally losing his patience with China when they returned a draft trade deal with strikeouts eliminating virtually all of the major concessions made during the past few weeks—but whose greatest significance of is Trump’s punishing new tariffs on China that “are a harbinger of what is coming for Europe”—and whose soon to be destroyed socialist leaders preparing for new EU-US trade talks now know that they “are doomed before they even start”. [Note: Some words and/or phrases appearing in quotes in this report are English language approximations of Russian words/phrases having no exact counterpart.]
http://www.whatdoesitmean.com/tore1.png
President Donald Trump puts world on notice that America will no longer be taken advantage of in bad trade deals
According to this report, at the same time the American mainstream propaganda media establishment continues pummeling its nation’s citizens with a never ending stream of fake news made up fantasies about President Trump, the entire European continent is about to roiled by the greatest political upheaval in its history all because of what he has done to destroy socialism and its internationalist ideology—with the greatest battle of this existential war set to waged between 23-26 May in the 2019 European Parliament Election—and whose main socialist commanders of in fearing their obliteration are now decrying:
Europeans have a growing litany of worries.
With US President Donald Trump dismantling the fundamentals of the multilateral system and his Russian counterpart, Vladimir Putin, conducting a large-scale misinformation campaign designed to undermine European political systems, the European Parliament (EP) election scheduled for May 2019 might seem like a relatively minor concern.
Unfortunately for beleaguered internationalist Europeans, the election really does matter.
The vote could see a group of nationalist anti-European political parties that advocate a return to a “Europe of the nations” win a controlling share of seats in the EP.
Among them number many figures who are strongly sceptical of free trade, in favour of pulling the drawbridge up against migration…
http://www.whatdoesitmean.com/tore2.png
While these “beleaguered internationalist Europeans” continue making both President Trump and President Putin their “boogeymen” (the mythical creature used by adults to frighten children into good behaviour) to cover up the abject failure of their tyrannical socialist policies, this report continues, the ordinary European peoples suddenly awoke to the socialist engineered destruction of their nations upon Trump’s election and began taking back their countries—and as, perhaps, best exampled by the Consortium News Service, who this week wrote:
As the EU approaches what are considered to be the most important elections in the history of its parliament — the EU has never had so many enemies.
The list starts with U.S. President Donald Trump and extends to the Brexiters in the UK.
It goes from Andrze Duda, the Polish premier, to Hungarian Prime Minister Viktor Orban; from the Czech Republic’s Prime Minster Andrej Babis to the Romanian government.
Italy also makes the list. Its unofficial prime minister, Matteo Salvini, has been advocating, until he took office, the exit from the euro and possibly from the EU altogether.
Other anti-EU leaders include Austrian Prime Minister Norbert Hofer, who assumed office on an anti-European platform, and France’s Marine Le Pen.
There is also the AFD Party in Germany and a score of sizable anti-EU minorities in almost all European countries.
The most aggressive of all has been Donald Trump, who went well beyond his “America First” slogan in calling EU countries the trade “enemy” of the U.S. Under his watch, EU-U.S. relations have never been so bad.
http://www.whatdoesitmean.com/tore3.jpg
Most particularly hated by these “beleaguered internationalist Europeans”, this report notes, is Italian Deputy Prime Minister Matteo Salvini—who is now even being attacked by American socialists screaming such things as “Italy’s Trump-loving hardline far-right leader, Matteo Salvini, wants to use European Parliament elections in May to tear Europe apart from the inside”—but whose only crime was his duplicating Trump’s economic policies to stunningly lift Italy out of a recession all the “experts” said couldn’t be done.
In point of fact, this report details, President Trump’s throwing off decades of despotic socialist economic policies to give the American people an “economic miracle” so profound that even his nation’s foremost investor, and third richest person in the world, Warren Buffet, said in a state of shock about last week that “no textbook could have predicted the strange economy we have today”, this report further notes, his approval ratings among the European peoples now towers above those of their own embattled socialist leaders.
http://www.whatdoesitmean.com/tore4.jpg
European peoples begin creating giant statues to honor their new liberator President Donald Trump
Driving these “beleaguered internationalist Europeans” into further terror and despair ahead of the historic 23-26 May election, this report explains, was President Trump’s populist economic policies this past week being revealed to have propelled his already surging economy to a further 3.2% growth in the first quarter of this year—and that laughably compares to the European Union posting a paltry 0.4%growth in their first quarter—but was up from the miniscule 0.2% they posted in the fourth quarter of 2018—and the near nonexistent 0.1% figure they posted for the third quarter of 2018.
The three main socialist European leaders whose deranged polices have given their citizens an economic growth that doesn’t even keep up with inflation, this report continues, are German Chancellor Angela Merkel, whose below 30% approval rating now sees her preparing to be ousted from power in June—French President Emanuel Macron, whose barely 26% approval rating continues to fall as Paris becomes a war zone and full revolt nears—and British Prime Minister Theresa May whose approval rating has plummeted to 28% as her political death nears.
Rushing to aid these “beleaguered internationalist Europeans” before President Trump can fully destroy them and their failed socialist ideology, though, this report notes, are America’s leftist tech giants—with Facebook having set up an actual “war room” to keep the European people from knowing anything about Trump’s economic miracles—and Twitter outright banning anyone trying to tell the European people the truth—such as their just banning conservative legend David Horowitz and his Freedom Center who are dedicated to the defense of free societies—that continues Twitter’s rampage banning of everyone supporting Trump—and that in the past few hours, included their banning a site that did nothing more than document leftist-socialist violence against Trump supporters.
http://www.whatdoesitmean.com/tore5.jpg
Twitter demonically bans @Magaphobia account that documented (above) leftist-socialist attacks against President Donald Trump supporters
Failing to be noticed by these “beleaguered internationalist Europeans”, their leftist tech giant lapdogs, and even the mainstream propaganda media, however, this report concludes, is that all of their evil machinations against President Trump have been met with failure—best evidenced by his poll numbers now being higher than Obama’s were at the same point in their presidencies—a fact the rabidly anti-Trump news network CNN exploded against yesterday with their satanically declaring that “when a woman gets pregnant, that is not a human being” because he supports life—that God (one would think) responded to nearly immediately as evidenced by CNN then having to announce they were cutting as many as 300 of its staffers—and that, without doubt, is “real news” met with cheers from tens-of-thousands of Trump’s supporters who, for days, have been gathering in Panama City Beach-Florida to hear him speak tonight.
http://www.whatdoesitmean.com/tore6.jpg
Tens-of-thousands of President Donald Trump supporters (one exampled above) gather in Panama City Beach-Florida on 8 May 2019 to hear him speak
May 8, 2019 EU and US all rights reserved. Permission to use this report in its entirety is granted under the condition it is linked back to its original source at WhatDoesItMean.Com. Freebase content licensed under CC-BY and GFDL.
- Post #6,537
- Quote
- May 9, 2019 5:30am May 9, 2019 5:30am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post 5,032
- Cleanup
- Quote
- Dec 15, 2018 8:03pm
- https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
- | Commercial Member | Joined Dec 2014 | 5,466 Posts | Online Now
Antal E. Fekete
January 9, 2003
That central bankers are the quartermasters of inflation is no longer a controversial assertion. That much was admitted by central banker Alan Greenspan in his speech before the Economic Club of New York on December 19, 2002 (see: www.federalreserve.gov/BoardDocs). He observed that as long as the gold standard was in charge of money-creation the price level was relatively stable. For example, in 1929 it was hardly different from that in 1800. But, after gold was banned and central bankers were put in charge in 1933, the consumer price index nearly doubled in two decades. And in the four decades after that prices quintupled. In other words, under the watch of the gold standard the dollar preserved its purchasing power for a period of one and one third of a century, but under the watch of the central bankers it managed to lose 90 percent of it in half of that time-period.
Snippet (2)
The Specter of Deflation
Presently the specter of deflation is haunting the world, so much so that central banker Ben Bernanke felt obliged to address the problem in a speech before the National Economists Club in Washington, D.C., on November 21, 2002 (see: www.federalreserve.gov/BoardDocs). He presented a simplistic view of deflation defining it as a general decline in prices. Actually, it would be more accurate to say that deflation manifests itself through a general decline in prices andinterest rates. Mr. Bernanke identified the source of deflation as a collapse in aggregate demand -- a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers. Of course, this is the view of an unreconstructed Keynesian. But Keynesianism has been brain-dead for some three decades, so we ought to feel emancipated from its tyranny. We identify the source of deflation as reluctance of producers to take the loans that bankers try to push on them through ongoing interest-rate cuts. Uncharacteristically, producers are pessimistic about future profit opportunities. Instead of contracting new debt, they scramble to get out of the old, and try to retrench by reducing inventory.
Snippet (3)
Guided Tour of the Star Chamber
Messrs. Greenspan and Bernanke claim that the Federal Reserve has the situation firmly in hand. If deflation were to develop, options for aggressive monetary policy response such as lowering interest rates are available. They admit that the zero lower bound on nominal interest rates presents a problem. Even if debtors were able to refinance loans at zero nominal interest, they may still feel excruciating economic pain caused by high and rising real rates due to the falling price level, as shown by their deteriorating balance sheet. However, Messrs. Greenspan and Bernanke reassure us that monetary policy will never lose its ability to stimulate aggregate demand and the economy, zero interest notwithstanding.
Mr. Bernanke gives us a guided tour of the Star Chamber, showing all the instruments of torture and explaining how they are to be used. The first of these is the printing press. Under a fiat money system the central bank generates inflation by this technology allowing it to create as many dollars as it wishes at essentially no cost. But it is not enough to create fiat money; you must also be able to put it into circulation or, at least, to make credible threats (sic!) to do so. Normally the Fed puts newly created fiat money into circulation through asset purchases. This particular torture instrument is used by the Fed to reduce the value of the dollar in terms of goods and services. Under a paper-money system a determined government and its central bank can always generate higher spending and induce positive inflation, we are told.
Snippet (4)
Pushing on a String
If this has the result of pushing short-term interest rates to zero, the Fed will still not be at the end of its rope. It can further stimulate aggregate spending by expanding the menu of assets that it buys. If we do fall into deflation, we can take comfort in the thought that "the logic of the printing press" will ultimately assert itself. Sufficient injections of new money must eventually reverse a deflation.
So what may the Fed do if its target rate, the overnight federal funds rate, has fallen to zero? Why, it will change the target, that's what. It will stimulate spending by lowering interest rates further along the maturity spectrum. It will target the two-year rate by committing to make unlimited purchases of securities maturing in two years or less. But suppose that deflation is so stubborn that spending is not stimulated even as the two- year rate is pushed down to zero. Well, then change the target again, this time, say, to the ten-year rate, committing to make unlimited purchases of securities maturing in ten years or less. And so on, ad libitum. Mr. Bernanke says that lower rates over the entire maturity spectrum of public and private securities should strengthen aggregate demand "in the usual ways", and thus help end deflation.
This betrays our central bankers' ignorance of the nature of the beast. The Fed may be pushing on a string. People may refuse to spend the money in the "usual ways". It is one thing to print fiat dollars, and another to make people spend them. No problem, Mr. Bernanke says. If lowering yields on longer-term securities proved insufficient to re- start spending, the Fed might next consider offering fixed-term loans to banks at zero interest, with a wide-range of private assets (including, among others, corporate bonds, commercial paper, bank loans, and mortgages) deemed eligible as collateral.
Snippet (5)
Operation Helicopter-Drop
But the banks may not use the loans at zero interest in the way intended by the Fed. They may not want to make further loans to their clients whose prospects to turn a profit are dim at best. The banks may find it far more attractive to invest in bonds for the capital gains guaranteed by the central bank's zero-interest policy. Business lethargy may not react to loans offered at ever lower rates. In this case Mr. Bernanke recommends the helicopter-drop of money, an idea first suggested by Milton Friedman. There must be a way to put fiat money into circulation, if not by hook then by crook! A broad-based tax- cut financed by open market purchases of securities by the Fed should do the trick. This "manna from heaven" should re-start spending. The Federal Reserve and other policymakers are far from helpless in the face of deflation, even if the rate of interest is already pushed all the way to zero.
Taking Risks out of Bond Speculation
All this talk is old hat, except for the fact that heretofore it hasn't been considered polite behavior for central bankers to flaunt their authority to create fiat money in unlimited quantities, and to boast their power to drive down the value of the dollar in terms of goods and services. More interesting than what these gentlemen say is what they don't say. They studiously avoid reference to the 100 trillion dollar behemoth: the interest-rate derivatives market, and to bond speculation. Derivatives are a tell-tale, revealing the big picture. Far from trying to prevent or to combat it, the Fed is promoting deflation. It does, in fact, act as the quartermaster of deflation. Every one of the torture instruments in the Star Chamber enumerated above is making deflation worse, not better.
What the $100 trillion derivatives market shows is that the main feature of deflation is the invisible but nonetheless real bull market in bonds. Nobody is talking about it, although the bull market in bonds that started in 1980 has been the largest of all bull markets of all kinds in all history. Fabulous fortunes have been made and will be made before it is over, thanks to the Fed that has taken the risk out of bond speculation.
The speeches of Messrs. Greenspan and Bernanke are the best example to demonstrate the charge. Speculators are told that the Fed is prepared to buy unlimited quantities of securities across the entire maturity spectrum. What is this if not an invitation to get aboard the bandwagon and share the ride to infinite riches? Come and get the bonds before we snap them up. Fear not, your investment is absolutely safe. Your friendly central banker has made bond speculation risk-free. He underwrites the unlimited capital gains you are going to make on your speculative bondholdings (or on your long positions on bond futures, or on your call options on bond futures). The figure $100 trillion shows the extent to which speculators have rallied to the call of the Pied Piper. It measures bets in the aggregate that speculators have made on ever-increasing bond prices or, what is the same to say, on ever falling interest rates.
Of course, interest rates will never go to zero. They just keep getting halved. The yield on long-term Treasury bonds was 16% in 1980. It has been halved to 8% and will be halved again to 4%, according to the script of Messrs. Greenspan and Bernanke. After that the target at successive halvings will be: 2%, 1%, 0.5%, 0.25%, 0.125%, 0.0625%, etc. As you see, it never gets to 0%.
Snippet (6)
Falling Interest Rates Squeeze Profits
Paradoxically, falling interest rates squeeze profits. Conventional wisdom suggests otherwise: lower interest rates are considered salubrious to business. However, we ought to distinguish between a low interest rate structure and a falling one. Only the former is salubrious; the latter is lethal. Falling interest rates reveal that past investments in physical capital have been made at too high a rate of interest in view of lower rates presently available. Furthermore, even the low rates of today will appear too high tomorrow. This explains business lethargy. Expanding production would appear foolhardy as long as the decline in the rate of interest continued. Falling interest rates make the cost of servicing past investments soar. As bond prices rise, the present value of debt will rise as well. So does the cost of liquidating a liability. These increases hit the profit margin, regardless whether the fact is realized by the producers or not. If not realized, the outcome will be that much worse. As the firm is paying out phantom profits in dividends, it is undermining its own financial strength already weakened by the falling price level. At one point the firm will be unable to pay its bills and will be forced to seek bankruptcy protection. Then there is the matter of the domino-effect. Even perfectly healthy firms are hit by deflation: they may find it impossible to collect their receivables and go under after their debtors have -- all because of the falling interest rate structure.
Financial Vampirism
In the view presented here deflation is a huge wealth-transfer scheme from the producing sector to the financial sector, denuding the former of its capital, and enriching the latter with risk-free capital gains. Indeed, the beneficiaries of the falling interest-rate structure, making risk-free profits thanks to the zero-interest policy of the central bank, are the principals of the financial sector, chief among them those of the big money-center banks. Their obscene profits do not come out of thin air. Their wealth is not newly created wealth. It is existing wealth siphoned off the balance sheet of producing enterprise, forced into bankruptcy by the falling interest-rate structure. This is modern vampirism practiced by the financial sector, aided and abetted by the central bank, and its victim is the producing sector.
The bear market in stocks is not the cause but the effect of deflation. The cause is the artificial bull market in bonds financed by the central bank. If you ask the bond speculator about his obscene profits while the rest of the economy crumbles around him, he will shrug: "I play by the rules. And I did not make those rules either."
Bond Speculation Is No Zero-Sum Game
The proof of complicity of the banks in the bond-speculation-scheme is the $100 trillion derivative monster. No small-time speculators could create such a Moloch. It was created by the big money-center banks, for their own benefit, with complete disregard for the disastrous effect it has on the producers of goods and services. The total face value of outstanding bonds falls far short of the colossal figure of $100 trillion. It is against common sense, and an invitation to disaster, to allow speculative long positions to exceed total supply. Messrs. Greenspan and Bernanke have no comment on all this, except to confirm policies that are conducive to further increasing the debt behemoth and further whetting the appetite of the $100 trillion derivatives Moloch.
We are told that the sum of $100 trillion is "only a notional amount". However, the profits of the bond speculators are not notional. They are payable in cold cash. If indeed interest rates did go down, and the price of bonds did go up, say, one percent, then the speculators' profit would be $1 trillion in cash. Who is going to pay that?
Economists will tell you that the profit of one bond speculator is the loss of another. Don't buy that. It would be true only if speculation was a zero-sum game, and it was a case of stabilizing speculation. It is true that some speculative markets answer that description. An example is the commodity market trading agricultural goods. It fits the model of a zero-sum game. This is so because the risks involved in commodity trading are nature-given, having to do with the fickleness of the weather and the unpredictability of natural catastrophes such as a flood or a tornado. Human mortals are not privileged to see the future. Speculators in agricultural commodities make money by resisting the formation of price trends. But in markets where the risks are made (unmade!) by man such as the market for bonds and their derivatives, speculation is not a zero-sum game. There, speculators make money not by resisting price trends but by riding them. This is the case of destabilizing speculation.
Snippet (7)
Power to Create Is Power to Destroy
The producers are sitting ducks in this speculative shoot-out. They have no choice. They must carry the risk of owning productive capital, without which there will be no consumer goods for Mr. Greenspan and Mr. Bernanke, or for you and me. This is an accurate description of the mechanism whereby the capital of the producing sector is surreptitiously siphoned off for the benefit of the financial sector as the rate of interest is driven down to zero. The producing sector is condemned to bankruptcy. It is a victim of plunder sanctioned by the Criminal Code. This is the essence of deflation: speculators aided and abetted by the central bank are allowed to bid bond prices sky-high, in complete disregard for the havoc that falling interest rates will wreak with the capital accounts of the producing sector, not to mention losses inflicted on stockholders. The $100 trillion derivatives market is a monument to the folly of man in delegating unlimited power to the central banker to create as much fiat money as he wishes. Former central banker Paul Volcker knows. He has been there. He is quoted as saying that "the truly unique power of a central bank is to create money and, ultimately, the power to create is the power to destroy." If the central banker has unlimited power to create, then he has unlimited power to destroy. And destroy he does, especially the savings of ordinary people.
Why Are Economists Silent?
I am aware that my warnings will be received with a great deal of skepticism. The central banker as the quartermaster-general of deflation? Arrant nonsense! Not only does the central bank has its own army of research economists, it also has the benefit of the knowledge and research of the entire profession. There can be no question that the central bank wields its awesome power while enjoying the best economic advice money can buy! Siphoning off wealth from the balance sheet of others is straight out of science fiction, my critics charge. The allegedly injured party, the producing sector, hasn't complained that its capital is open to pilferage. The media in reporting the crash of Swissair and United did not suggest foul play in plundering the airlines' balance sheets.
Yet you may dismiss my charges only at your own peril. The awareness is growing that not just the media, but the entire profession of monetary economists has been bought off by the central banking establishment in order to put the best possible spin on our fiat money system. In an interview on December 17, 2002, entitled "Our Dishonest and Corrupt Monetary System" (www.kitco.com), Dr. Larry Parks recalled that John Kenneth Galbraith, the Paul M. Warburg Professor Emeritus of Harvard University, had published a book in 1975 entitled Money, Whence It Came, Where It Went. In this book the professor wrote: "The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it." In other words, Galbraith is saying that when it comes to money, economists lie! Dr. Parks asks: why do they lie? They have tenure. Why don't they tell the truth? He concludes that the monetary economists, for the last fifty years or more, have been bought off. With Nobel-prizes, endowed chairs, research grants, board memberships, and other perks. Monetary economists have betrayed their Muse, to serve Mammon.
Off-Balance-Sheet Wizardry
That the profession of the accountants has been bought off by the financial sector came to light recently in the wake of the Wall Street accounting scandals. But in spite of the great publicity given to these scandals by the media, the problem has not been fixed. A few small-time crooks may have been apprehended, but none of the authors of the scheme whereby banks are allowed to cook their books has been charged. The truth is that banks can carry assets, such as bets in the derivatives markets, "off balance sheet". They do this in order to find shelter from the scrutiny of depositors, creditors, shareholders; more generally, from the scrutiny of taxpayers at large. Accountants, regulators, and bank inspectors know this, but that's a different matter. Apparently, they have been bribed, too. They are part of the conspiracy. This is how Dr. Parks describes the fraud:
"Fractional reserve lending is jargon for creating money out of nothing. That's what that means. In the case of derivatives, these are bets that the banks make. The banks today in the aggregate worldwide have made roughly $110 trillion worth of bets. That's all they are. Banks are making bets and creating money. One of the things that obscures this for everybody is that banks alone do not have to reveal their entire balance sheets, as all other public companies must do under Securities and Exchange Commission regulations. Banks have the option, with some of their assets, to put them in a basket that they call "held for investment". When they put assets in that basket (they could be stocks, bonds, or whatever), then those assets are held at historical costs, rather than at market value... Nobody else gets away with this except for them. The reason they get away with it is because they say, in effect: 'If we had to mark everything to market, there would be too much volatility in our earnings. We don't want you to find out.' All this is secret. It's called bank secrecy... There are winners and there are losers. The losers are the ordinary people who lose their pensions, their savings, their jobs. The winners are the financial guys... These guys have no downside... Do you know what the banks took out of the economy last year? Nearly $400 billion. The Wall Street firms who get transaction fees for moving the newly created money around took another roughly $250 billion. Between them they took out nearly three times the amount of money that the auto industry took out. But from the auto industry we got 20 million cars. What did we get from these guys? We got cancelled checks and bank statements. This is monstrous, don't you think?"
Playing with Fire
I am not predicting that interest rates will keep falling to zero and that the world economy will succumb to deflation. I just want to sound the alarm that it might, in view of the counter-productive monetary policy of central bankers. Other scenarios, no less frightening, are also possible. Paradoxically, the threat of zero-interest (deflation) and that of infinite-interest (hyperinflation) are separated only by the knee-jerk reaction of the marginal bond speculator. He may get scared by the threats of Mr. Bernanke to undermine the purchasing power of the dollar further. As he becomes persuaded by the "logic of the printing press", the marginal bond speculator may cut and run. Then other bond speculators, especially those abroad, could dump their U.S. Treasury bonds, too, and run for the exit. Quite possibly Mr. Bernanke thought that he was just "fine-tuning" the purchasing power of the dollar. Under this scenario he would destroy it. When the central banker threatens to reduce the value of the dollar in terms of goods and services, as Mr. Bernanke does, he is playing with fire. After dumping the bonds, people may dump the dollars, too. First the foreign and then the domestic holders. They need not be reminded that the central banker has the card to trump deflation -- by triggering hyperinflation. How desperate must the specter of deflation appear to Mr. Bernanke that he has seen it fit to flaunt his possession of that card!
Snippet (8)
Congress, Not the Fed, Has the Solution
It is not too late for the U.S. Congress to act to fend off disaster. It should immediately take away the unlimited power from Messrs. Greenspan and Bernanke to create as much fiat money as they wish, and to drive down the value of the dollar in terms of goods and services. Not only are the present monetary arrangements blatantly unconstitutional, they are responsible for the destabilization of the rate of interest allowing it to swing from one extreme to the other, causing grievous economic damage along its path. The House of Representatives, to which the Constitution delegated the monetary powers, can rectify this by going back to constitutional money. It should stabilize interest rates without any further delay, and remove the threat of both zero and infinite interest, by opening the Mint to gold and silver. This is a Republic based on checks and balances. It has a government of limited and enumerated powers. Neither arm: not the legislative, not the executive, nor the judiciary may claim to have unlimited powers under the Constitution. Why should officers of the Federal Reserve be allowed to make such claims?
Free coinage, a right of the people enshrined in the U.S. Constitution, would remove the greatest threat this Republic has faced in its entire history up to now, greater even than that of foreign terrorists. This is the threat to destroy the capital of the producing sector, through the machinations of the financial sector, aided and abetted by the Federal Reserve.
Copyright 2003 by Antal E. Fekete
January 18, 2003
Snippet (9)
CORRECTION
I am very grateful to James E. Schoenbeck for calling my attention to a mathematical error in the example I used in my latest article The Central Banker As the Quartermaster-General of Deflation. I also used the same example in earlier articles such as Wrecker's Ball of Swinging Interest Rates. Mr. Schoenbeck wrote me on January 8, 2003, as follows:
"Professor:
While I enjoyed reading your article, I take dramatic exception to your pricing of the hypothetical bond as interest rates decline. If the interest rate dropped from 16% to 0% overnight, the price on the 30-year bond with 16% coupon, $1,000 par, would go to $5,800. A nice increase, to be sure, but nowhere near the 1,000-fold capital gains of which you talk
While it is true that the value of a 30-year bond will almost double when the rate is halved from 16 to 8%, it is no longer true as it is halved further from 8 to 4%, from 4 to 2%, from 2 to 1%, etc. Below is a table showing how the value of a $1,000 investment in a 30-year bond goes up with each halving (after which the investor takes profits and rolls out to a new 30-year maturity)
16 to 8%$1,000 to $1,900- - - - - - - - - - - - - - -
8 to 4%$1,000 to $1,700or $1,900 to $3,200
4 to 2%$1,000 to $1,450or $3,200 to $4,684
2 to 1%$1,000 to $1,260or $4,684 to $5,855
1 to 0.5%$1,000 to $1,140or $5,855 to $6,675
0.5 to 0.25%$1,000 to $1,070or $6,675 to $7,142
0.25 to 0.125%$1,000 to $1,037or $7,142 to $7,406
0.125 to 0.0625%$1,000 to $1,019or $7,406 to $7,546
Wouldn't you agree that we are fast approaching a limit here? The value of the $1,000 investment will stay below $10,000 no matter how many times the rate of interest is cut into half, and will never be worth anything like $1,024,000 under any circumstances. Sorry... but making money is not that easy..."
James E. Schoenbeck
[email protected]
I concede that under the simple strategy of buying and holding the 30-year bond, or continually rolling it over to new 30-year bonds, the $1,000 investment cannot be doubled in value with each successive halvings of the rate of interest. But there are other more sophisticated strategies available involving strip bonds, and derivatives such as: bond futures, call and put options on bond futures, knock-out calls and knock-out puts, interest-rate swaps, and various combinations of these which bond speculators can use, and do use, in order to double their investment (or do even better) every time the rate of interest is halved. I quote from J. Taylor's Gold & Technology Stocks newsletter, January 7, 2003, issue (www.miningstocks.com):
"Michael B. O'Higgins was able to turn $1,000 into $415,302 by being in bonds, not stocks... If you invested $1,000 in the Dow in 1972, that investment would have been worth only $27,347 as of December 27, 2002. But had you invested $1,000 mostly in bonds during that time, your initial investment would have turned into $422,819." (Visit www.miningstocks.com for more information on this amazing but true story which can be fully documented. The point is that lenders make a killing during periods of falling interest rates at the expense of debtors.)
But even these fabulous profits could not explain the creation of the $100 trillion derivatives market coming, as it did, out of nowhere. Individual bond speculators could not possibly accomplish this feat. It was accomplished by the big money-center banks. They are responsible for the prolonged agonizing fall of the interest-rate structure, the flipside of which is the snowballing of the derivatives monster. They make up the bond market. They run it. They buy the bonds and interest-rate derivatives before the Fed can buy, since the Fed buys through services they can provide. If there has ever been socially devastating insider trading, then this is it.
My point is that Keynesian monetary policy takes the risk out of bond speculation. It makes it extremely profitable and a sure bet. This explains the persistent fall in interest rates, and the snowballing of the derivatives market, all of which spell deflation. Deflation is not merely falling prices; it is falling prices plus falling interest rates, squeezing the debtors. This deadly combination is not an Act of God. It is caused by unlimited speculation in bonds, with profits underwritten by the central bank.
Keynesian contra-cyclical monetary policy and "deflation control" is a disaster. Nostrums advocated by Milton Friedman and other monetarists are equally disastrous. Far from containing deflation, the central bank is causing it, through its counter-productive measures such as bond-buying programs widely advertised through speaking engagements such as those of Messrs. Greenspan and Bernanke, prompting more and more bond speculators to climb on the bandwagon to have a free ride to riches. Rather than relieving debt-implosion, this mindless monetary policy is, in fact, the one identifiable cause of it through the bankrupting of the producing sector.
Mr. Bernanke made a solemn vow to Milton Friedman at his 90th birthday party at the University of Chicago. He vowed that the Fed would not repeat the mistakes it had made in the 1930's in not whipping and chastizing deflation vigorously enough. This brings to mind the Biblical story of King Rehoboam, the son of King Solomon, who answered the people when they petitioned him to lighten their burden: "My father hath made your yoke heavy; I will add to your yoke. My father chastized you with whips; I will chastize you with scorpions." (First Book of Kings, 12:11.) May God save the producers of this country from the yoke and the scorpions of the Fed.
January18, 2003
Antal E. Fekete
- Post #6,538
- Quote
- May 9, 2019 5:36am May 9, 2019 5:36am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post 5,023
- Cleanup
- Quote
- Dec 15, 2018 5:12pm
- https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
- | Commercial Member | Joined Dec 2014 | 5,467 Posts | Online Now
- BenjaminIs
- | Commercial Member | Joined Dec 2014 | 4,159 Posts | Online Now
Quoting dttsomh
{quote} Can you elaborate on which ones are actually relevant and which ones will just confuse us beginners more than needed? Is Price Action enough if we don't rely on indicators for entries? I'm taking my time to re-read everything at least 2-3 times because FUNDAMENTALS are very new for me, all I did before was looking at technicals and didn't even focused much on price action (as I should)
I am taking a few minutes to answer your questions. It is very very important for anyone interested in learning how to make money trading Forex to ask questions. I again encourage all traders viewing this thread called Money Flow Method and Risk Management that I started on December 3, 2016 which was 17 days ago to ask questions in order to learn. There is no such thing as a stupid or dumb question. Asking questions is the only way that we can learn.
Now to dttsomh and his question.
Can you elaborate on which ones are actually relevant and which ones will just confuse us beginners more than needed?
Benjaminis: First we establish which currency pairs are in our Trade Plan. In previous posts I have stated the only 3 currency pairs are in my Trade Plans. They are as follows;
(1) Short US30
(2) Short USD/JPY
(3) Long Gold and Long Silver
We short $100,000 US of US30 or 100 units. We short $100,000 US of USD/JPY or 100 units. We go long 100 OZ of Gold and we go long 5000 OZ of Silver.
That is it !!! For the next three months we trade NO OTHER CURRENCY PAIRS.
Is Price Action enough if we don't rely on indicators for entries?
Benjaminis: The reason that most Forex traders lose is because they only rely on Price Action and Technical Indicators the odds are that you will not get to the level of the 5% winners. I do not say that Price Action and Technical Indicators are not needed.
On a scale of 100 here is what you need to have in order to become part of the exclusive 5% Forex Trading Club.
25 - Human Psychology (If You do not have the discipline to control your FEAR and your Greed and your EGO just forget about trading anything because those three emotions will always win)
25 - Fundamental Knowledge (This is my Money Flow Method and it is different from just normal fundamental knowledge)
25 - Fundamental Knowledge (As an example of this what happens in the next 11 days with the oldest bank in Italy (MSP) which is now on life support is a very important fundamental as it has the possibility to cause MAJOR DAMAGE to EUR/USD and the Eurozone)
25 Skills in using Price Action and Technical Indicators
I'm taking my time to re-read everything at least 2-3 times because FUNDAMENTALS are very new for me, all I did before was looking at technicals and didn't even focused much on price action (as I should)
Benjaminis: I hope that I answered all your questions and as long as you put in the time and effort as you have done the odds are good that you will have the opportunity to join the Forex 5% Club.
I might not post again until later this afternoon after the North American Markets close. Thank you for your interest and cooperation.
Benjaminis
Good Morning Everyone reading this post from December 15, 2017. I am updating my thread with posts that have been made here before to update where we have arrived. You can learn very much about Forex trading as it relates to one of the secrets of success which has nothing to do with Technical Indicators which at least 75% of all Forex traders use to determine Forex trades.
Benjamin
- Post #6,539
- Quote
- May 9, 2019 5:41am May 9, 2019 5:41am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post 5,026
- Cleanup
- Quote
- Dec 15, 2018 5:22pm
- https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
- | Commercial Member | Joined Dec 2014 | 5,468 Posts | Online Now
- BenjaminIs
- | Commercial Member | Joined Dec 2014 | 4,162 Posts | Online Now
Now for my Technical Forex Trader Friends let us study and understand the following;
http://www.investopedia.com/articles.../02/042202.asp
Snippet:
http://i.investopedia.com/inv/articl...e/AXP2_SAR.gif
SAR: United It Stands
Given the mechanical properties of the parabolic SAR, it is no surprise that it is a favorite among traders who develop their own strategies. In trading, it is better to have several indicators confirm a certain signal than to solely rely on one specific indicator, so most traders will choose to compliment the SAR trading signals by using other indicators such as stochastics, moving averages, candlestick patterns etc.
For example, a reversal of the dots from below the price to above is much more convincing when the price is trading below a long-term moving average than when it occurs when the price is above the moving average. Having the price remain below a long-term moving average suggests that the sellers are in control of the direction and that the recent reversal could be the beginning of another wave lower. Furthermore, a signal is considered stronger each time that an additional indicator confirms the same trend. For example, diving into the American Express example again in Figure 3, you'll notice that the parabolic SAR indicator triggered a sell signal (black arrows) each time it neared the resistance of its 50-day moving average (green line). Traders would also take note that the stochastic oscillator crossed below its signal line around the same time as the SAR signals (shown by the red circles). The simultaneous sell signals are then used as confirmation of a move lower. (For related reading on combining strategies, see MACD And Stochastic: A Double-Cross Strategy.)
Read more: Introduction To The Parabolic SAR | Investopedia http://www.investopedia.com/articles...#ixzz4UdIIyZPm
Follow us: Investopedia on Facebook
Bottom Line
The parabolic SAR is a fairly good tool for traders looking for a strategic method of gauging a stock's direction or for portioning a stop-loss order. As illustrated above, this indicator proves to be extremely valuable in trending environments, but it can often lead to many false signals during periods of consolidation. This indicator is simple to implement into any strategy, but like all indicators, it is usually best if it is used in conjunction with other indicators to ensure that all information is being considered. (For further reading, see our Technical Analysis Tutorial.)
Read more: Introduction To The Parabolic SAR | Investopedia http://www.investopedia.com/articles...#ixzz4UdIiMFYJ
Follow us: Investopedia on Facebook
Comments from Benjaminis: I expect some comments and inputs from our Technical Forex Traders here. Maybe even We can convince Rockey007 to return as he was a big help and Asset for us when he posted here.
- Post #6,540
- Quote
- May 9, 2019 5:43am May 9, 2019 5:43am
- | Commercial Member | Joined Dec 2014 | 11,424 Posts
- Post 5,029
- Cleanup
- Quote
- Dec 15, 2018 7:55pm
- https://cdn-assets.faireconomy.media...ar392875_2.gif BenjaminIs
- | Commercial Member | Joined Dec 2014 | 5,469 Posts | Online Now
- Post 4,481
- Cleanup
- Quote
- Mar 9, 2018 7:59am
- BenjaminIs
- | Commercial Member | Joined Dec 2014 | 4,165 Posts | Online Now
http://traderfeed.blogspot.ca/2018/0...actice-of.html
FRIDAY, MARCH 09, 2018
A Surprising Best Practice of Successful Traders
https://3.bp.blogspot.com/--43QjrGvb...20/Mastery.jpg
Here's an interesting observation I've made about traders who are doing well recently versus those not doing so well:
It's not just the quality of the trades that distinguishes the successful trader, but the quality of the time during market hours when they are not trading.
The least successful traders are glued to screens throughout the day and have very little structured, quality time away from the screens.
The more successful traders take breaks during the day and keep themselves fresh and focused.
The most successful traders have a structured non-trading process during market hours. They are just as plan-oriented in their non-trading time as in their trading time. When markets are open and they are not trading, they have processes they follow to identify new opportunities and to maintain their performance zone.
Productively planning and structuring your non-trading time: that is an unappreciated best practice. The great traders are highly productive when they are *not* trading. A big step that can move your trading forward is to start keeping a report card where you grade the quality of your time during the trading day when you are nottrading.
On Monday at noon EST, I'll be joining Jigsaw Trading for a free webinar on three psychological techniques to improve trading psychology. In that session, I will go into detail about specific practices I see best traders engaging in during non-trading hours. Registration for the session can be foundhere; I hope to see you there!
Brett