Money Flow Trading Method along with Risk Management

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

If We Don't Change The Way Money Is Created, Social Disorder Is Inevitable
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jun 27, 2017 2:48 PM


Authored by Charles Hugh Smith via OfTwoMinds blog,
Centrally issued money optimizes inequality, monopoly, cronyism, stagnation and systemic instability.



Everyone who wants to reduce wealth and income inequality with more regulations and taxes is missing the key dynamic: central banks' monopoly on creating and issuing money widens wealth inequality, as those with access to newly issued money can always outbid the rest of us to buy the engines of wealth creation.

History informs us that rising wealth and income inequality generate social disorder.

Access to low-cost credit issued by central banks creates financial and political power. Those with access to low-cost credit have a monopoly as valuable as the one to create money.
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Compare the limited power of an individual with cash and the enormous power of unlimited cheap credit.
Let’s say an individual has saved $100,000 in cash. He keeps the money in the bank, which pays him less than 1% interest. Rather than earn this low rate, he decides to loan the cash to an individual who wants to buy a rental home at 4% interest.


There’s a tradeoff to earn this higher rate of interest: the saver has to accept the risk that the borrower might default on the loan, and that the home will not be worth the $100,000 the borrower owes.

The bank, on the other hand, can perform magic with the $100,000 they obtain from the central bank. The bank can issue 19 times this amount in new loans—in effect, creating $1,900,000 in new money out of thin air.


This is the magic of fractional reserve lending. The bank is only required to hold a small percentage of outstanding loans as reserves against losses. If the reserve requirement is 5%, the bank can issue $1,900,000 in new loans based on the $100,000 in cash: the bank holds assets of $2,000,000, of which 5% ($100,000) is held in cash reserves.


This is a simplified version of how money is created and issued, but it helps us understand why centrally issued and distributed money concentrates wealth in the hands of those with access to the centrally issued credit and those who have the privilege of leveraging every $1 of cash into $19 newly created dollars that earn interest.


Imagine if we each had a relatively modest $1 million line of credit at 0.25% interest from a central bank that we could use to issue loans of $19 million. Let’s say we issued $19 million in home loans at an annual interest rate of 4%. The gross revenue (before expenses) of our leveraged $1 million would be $760,000 annually --let’s assume we net $600,000 per year after annual expenses of $160,000. (Recall that the interest due on the $1 million line of credit is a paltry $2,500 annually).


Median income for workers in the U.S. is around $30,000 annually. Thus a modest $1 million line of credit at 0.25% interest from the central bank would enable us to net 20 years of a typical worker’s earnings every single year. This is just a modest example of pyramiding wealth.

http://www.oftwominds.com/photos2015...hPyramid1a.png
Next let’s say we each get a $1 billion line of credit which we leverage into $19 billion in loans earning 4%. Now our net annual income is $600 million, the equivalent income of 20,000 workers. We did nothing to improve productivity, nor did we produce any goods or services. We simply used the power of central banking and fractional reserve lending to skim $600 million in financial rents from those actually producing goods and services.

Note that we are not uniquely evil or avaricious in maximizing our private gain from the central bank system; we're simply responding rationally to the system’s incentives.


The system concentrates wealth and subverts democracy not because participants are different from the rest of us but because they are acting rationally within a perverse, exploitive system. Would you turn down $600,000 a year? How about $600 million a year?
It makes no sense for banks and financiers not to maximize their gains in this system. Those who fail to maximize their gains will be fired.
http://www.oftwominds.com/photos2015...tion10-15a.jpg
I hope you understand by now that the current system of issuing money and credit benefits the few at the expense of the many. The vast privilege and the equally vast inequality it generates is the only possible output of the system.

This inequality cannot be reformed away; it is intrinsic to centrally issued money and private banking with access to central bank credit.

The problem isn’t fiat money; it’s centrally issued money/credit that is distributed to the few at the expense of the many. If we want to limit the subversion of democracy and reduce wealth inequality, we must decentralize and democratize the issuance and distribution of money.

In the current system, money isn’t created to reward increasing productivity. It is created to increase the wealth and power of the privileged.

If we want to connect the creation and distribution of money/credit with productivity, we must issue new money directly to those creating value and boosting productivity, bypassing the privileged few in central and private banks.

By concentrating wealth and power, centrally issued and distributed money doesn’t just subvert democracy. It also optimizes inequality, monopoly, cronyism, stagnation, social immobility and systemic instability.


The status quo "solution" is Universal Basic Income (UBI), a form of subsistence designed to quell the righteous urge to throw off the monetary yoke of the privileged financial Elites. If scraping by as a debt-serf on UBI is the New American Dream, we need a new economic/social system.

http://thenewsdoctors.com/gold-slamm...r/#more-710368

GOLD SLAMMED! Central Banker Intervention For All To See – Dave Kranzler
Posted on June 26, 2017 by Guest Post



Share this post:
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This isn’t some trader’s “fat finger” accidentally overloading the sell button and pressing “sell.” This is unadulterated BIS/ECB/BoE/Fed sponsored market intervention:

TND Guest Contributor: Dave Kranzler
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CLICK TO ENLARGE

At 4:01 EST, a paper gold nuclear bomb was detonated in the Comex Globex computer system. The graph above is just the August “front month” paper gold contract on the Comex. In that contract 1.49 million ozs of paper gold were dumped into the Comex electronic trading system. Zerohedge is attributing 1.88 million ozs. That would include the selling in all of the paper gold contract months.


But that’s not the entire amount of the paper hit. There would have been a large amount of LBMA gold forward paper gold contracts dumped in correlation with the Comex paper avalanche. ZH attributes $2.2 billion in paper gold dumped. But the real number including LBMA forwards dumped was much larger.


“The mysterious plunge has the market spooked,” says some idiot named Bob Habercorn from RJO. This was not “mysterious.” It was intentional – a shock and awe market intervention that was intended to “spook” the market. That quote is from a Bloomberg report full of fake news (caution, this article contains fake news: LINK).


The article claims that China bought less from Hong Kong in May. In fact, the amount of gold exported from Switzerland to India and Hong Kong was up 39% from April, according to Platts. Furthermore, we have no clue how much gold moves into China through Beijing and Shanghai, numbers which are intentionally hidden from the world.


Here’s the reason that today was selected by the BIS et al to attack gold in the paper market in an effort to scare the crap out of the market:
the day was well chosen as the Muslim world including Turkey was closed for the end of Ramadan as was India which has the amiable habit of observing the holidays of religious minorities. – from John Brimelow’s Gold Jottings



The largest buyers of physical gold in the world right now, India + Turkey, were closed for the observance of a religious holiday. And Shanghai closed for the day 31 minutes earlier.


4:00 a.m. EST is one of the slowest, lowest volume trading periods during any 24 hour period. Why would a seller of a large number of contracts sell at that time of day, when the largest buyers of what is being sold are not in the market at the time of the sale?


If it were merely a “fat finger” – the fake news narrative – then the mistake would have been immediately corrected and the price would have quickly recovered. Anyone who buys the “fat finger” story is either tragically ignorant or hopelessly naive.


When India returns tonight to the market, I would expect gold to get a strong bid. Indians have a habit of buying a lot more physically deliverable gold than they might have otherwise when the western Central Banks put gold “on sale” by lowering the price in the paper market. I suspect Turkey and China will increase their appetite as well.

The mining stocks per the HUI barely acknowledge the artificial price take-down. The HUI is down less that 1%. In the past, on a day when gold was taken down to this degree, the HUI would have dropped at least 4-5%. It’s almost as if mining stock traders are laughing at the latest Central Bank antics. I know I am…


# # # #


About Dave Kranzler:
http://thenewsdoctors.com/wp-content...4686303837.jpg I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for Bankers Trust. I have an MBA from the University of Chicago, with a concentration in accounting and finance. My goal is to help people understand and analyze what is really going on in our financial system and economy. You can follow my work and contact me via my website Investment Research Dynamics. Occasionally, I publish on Seeking Alpha too. As a co-founder and principal of Golden Returns Capital, LLC Mr. Kranzler co-manages the Precious Metals Opportunity Fund, a metals and mining stock investment fund.
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This entry was posted in Market Pulse, Precious Metals News, The News Doctors Spotlight and tagged Dave Kranzler. Bookmark the permalink.

https://mises.org/library/super-bubble-trouble

FEDWATCH

The Super Bubble Is in Trouble

1. https://mises.org/sites/default/file...?itok=sv71O1h0

TAGS Money and BanksMoney and Banking


18 HOURS AGO

Thorsten Polleit
You do not need to be a financial market wizard to see that especially bond markets have reached bubble territory: bond prices have become artificially inflated by central banks' unprecedented monetary policies. For instance, the price-earnings-ratio for the US 10-year Treasury yield stands around 44, while the equivalent for the euro zone trades at 85. In other words, the investor has to wait 44 years (and 85 years, respectively) to recover the bonds' purchasing price through coupon payments.


Meanwhile, however, the US Federal Reserve (Fed) keeps bringing up its borrowing rate; and even the European Central Bank (ECB) is now toying with the idea of putting an end to its expansionary policy sooner rather or later. Most notably, however, US long-term rates have come down since the end of 2016, despite the Fed raising its short-term interest rate. How come?
https://mises.org/sites/default/file...?itok=JqiYpOzZ

Presumably, investors seem to expect that the Fed might not hike interest rates much further, and/or that higher short-term interest rates will prove to be short-lived, to be reversed quite quickly. In any case, bond markets do not seem to expect interest rates to go back to normal levels — that is toward pre-crisis levels — anytime soon. Several reasons could be responsible for such an expectation.
https://mises.org/sites/default/file...?itok=HkgZTXb5

First and foremost, the US economy appears to be addicted to cheap money. The latest economic recovery has been orchestrated, in particular, through a hefty dose of easy monetary policy. It is therefore fair to assume that market agents will have a hard time coping with higher interest rates. For instance, corporations, consumers, and mortgage borrowers, in general, will face higher credit costs and a less favorable access to funding if and when interest rates edge higher.


In particular, higher interest rates could send the inflated prices of stocks, bonds, and housing southward. For instance, expected future cash flows would be discounted at a higher interest rate, deflating their present values and thus market prices. The deflation of asset markets would hit borrowers hard: Their asset values would nosedive, while nominal debt would remain unchanged so that equity capital is wiped out — a scenario most investors might assume to be undesirable from the viewpoint of central banks.


Moreover, the yield curve has become flatter and flatter in recent years. This, in turn, suggests that banks' profit opportunities from lending have been shrinking, potentially dampening the inflow of new credit into the economic system. A further decline of the yield spread could bring real trouble: In the past, a flat or even inverted yield curve has been accompanied by a significant economic downturn or even a stock market crash.


That said, investors might expect that central banks find it hard to bring interest rates back up, especially back to a level where real interest rates are positive. This holds true for the Fed as well as for all other central banks, including the ECB. This is because the monetary policy of increasing borrowing rates by a significant margin would most likely prick the “Super-Bubble” which has been inflated and nurtured by central banks’ monetary policies over the last decades.


However, it wouldn’t be surprising if, again, central banks, the monopolist producers of fiat money, turn out to be the major course of trouble. After many years of exceptionally low interest rates, central banks may well underestimate the disruptive consequences an increase in borrowing rates has on growth, employment, and the entire fiat money system. In any case, the artificial boom created by central banks must at some point turn into bust, as the Austrian business cycle theory informs us.



The boom turns into bust either by central banks taking away the punchbowl of low interest rates and generous liquidity generation; or the commercial banks, in view of financially overstretched borrowers, stop extending credit; or ever greater quantities of fiat money need be issued by central banks to keep the boom going, inflating prices so that ultimately people start fleeing out of cash. In such an extreme case, the demand for money collapses, and then a Super-Super-Bubble pops.
https://mises.org/sites/default/file...?itok=wku-8lyC

In this context, it is interesting to see that the price ofBitcoin has been skyrocketing in recent years. There are certainly several reasons for this. One reason is undoubtedly the fact that the cyber unit offers a potential “escape route” from fiat money. Bitcoin (and other cyber units as well) might well be seen, and increasingly so, as a “safe haven” in future times of trouble. And there will be for sure new waves of trouble going forward — whether central banks will tighten interest rates or not.


As alternatives to fiat money become increasingly accepted, positive spill-over effects can be expected for gold. Gold has always been the monetary prototype of a “safe haven.” It may be increasingly in demand for its store of value function going forward and, by making use of the blockchain, even as a digitalized means of payment representing a claim on physical gold. Once the Super-Bubble pops, we will see for sure what people demand as the ultimate means of payment: gold or cyber units, or both.

https://consortiumnews.com/2017/06/2...r-iran-contra/

Russia-gate Is No Watergate or Iran-Contra
June 28, 2017

Special Report: Many comparisons have been made between Russia-gate and the earlier scandals of Watergate and Iran-Contra, but the similarities are at best superficial, explains Robert Parry.

By Robert Parry
Russia-gate, the sprawling investigation into whether Russia meddled in last year’s U.S. election, is often compared to the two big political scandals of the latter half of the Twentieth Century, Watergate and Iran-Contra. Sometimes you even hear that Russia-gate is “bigger than Watergate.”
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The bugged phone from the Watergate office of Democratic Party official Spencer Oliver. Placed on the phone during a May 1972 break-in, the bug was the only device that worked. A second break-in on June 17. 1972, led to the capture of Richard Nixon’s Watergate burglars.


Yet what is perhaps most remarkable about those two Twentieth Century scandals is how little Official Washington really understands them – and how these earlier scandals significantly contrast, rather than compare, with what is unfolding now.

Although the historical record is still incomplete on Watergate and Iran-Contra, the available evidence indicates that both scandals originated in schemes by Republicans to draw foreign leaders into plots to undermine sitting Democratic presidents and thus pave the way for the elections of Richard Nixon in 1968 and Ronald Reagan in 1980.

As for Russia-gate, even if you accept that the Russian government hacked into Democratic emails and publicized them via WikiLeaks, there is still no evidence that Donald Trump or his campaign colluded with the Kremlin to do so. By contrast, in the origins of Watergate and Iran-Contra, it appears the Nixon and Reagan campaigns, respectively, were the instigators of schemes to enlist foreign governments in blocking a Vietnam peace deal in 1968 and negotiations to free 52 American hostages in Iran in 1980.

Though Watergate is associated directly with the 1972 campaign – when Nixon’s team of burglars was caught inside the Democratic National Committee offices in the Watergate building – Nixon’s formation of that team, known as the Plumbers, was driven by his fear that he could be exposed for sabotaging President Lyndon Johnson’s Vietnam peace talks in 1968 in order to secure the White House that year.

After Nixon’s narrow victory over Vice President Hubert Humphrey in the 1968 election, FBI Director J. Edgar Hoover informed Nixon that Johnson had a secret file, complete with wiretapped phone calls, detailing the Nixon campaign’s backchannel messages to South Vietnamese officials convincing them to boycott Johnson’s Paris peace talks. Later, Nixon learned that this incriminating file had disappeared from the White House.


So, in 1971, after the leaking of the Pentagon Papers, which recounted the lies that had been used to justify the Vietnam War through 1967, Nixon fretted that the missing file about his peace-talk gambit in 1968 might surface, too, and would destroy him politically. Thus, he organized the Plumbers to find the file, even contemplating fire-bombing the Brookings Institution to enable a search of its safe where some aides thought the missing file might be found.


In other words, Watergate wasn’t simply a break-in at the Democratic National Committee on June 17, 1972, in pursuit of useful political intelligence and Nixon’s ensuing cover-up; the scandal had its origins in a far worse scandal, the derailing of peace talks that could have ended the Vietnam War years earlier and saved the lives of tens of thousands of U.S. soldiers and possibly more than 1 million Vietnamese.


Iran-Contra Parallels
Similarly, the Iran-Contra scandal exploded in 1986 with revelations that President Reagan had authorized secret arms sales to Iran with some of the profits going to fund the Nicaraguan Contra rebels, but the evidence now indicates that the connections between Reagan’s team and Iran’s revolutionary regime traced back to 1980 when emissaries from Reagan’s campaign worked to stymie President Jimmy Carter’s negotiations to free 52 American hostages then held in Iran.

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PBS Frontline’s 1991 documentary, entitled “The Election Held Hostage,” co-written by Robert Parry

According to multiple witnesses, including former Assistant Secretary of State for Middle Eastern Affairs Nicholas Veliotes, the pre-election contacts led to the opening of a weapons pipeline to Iran (via Israel), after Reagan was sworn in on Jan. 20, 1981, which was the precise moment when Iran finally released the American hostages after 444 days.

Some key players in the 1980 Reagan-Iran contacts reappeared four years later at the start of direct (again secret) U.S. arms shipments to Iran in 1985, which also involved Israeli middlemen. These key players included Iranian CIA operative Cyrus Hashemi, former CIA clandestine services chief Theodore Shackley, Reagan’s campaign chief and then-CIA Director William Casey, and former CIA Director and then-Vice President George H.W. Bush.

In other words, the Iran-Contra weapons shipments of 1985-86 appear to have been an outgrowth of the earlier shipments dating back to 1980 and continuing under Israeli auspices until the supply line was taken over more directly by the Reagan administration in 1985-86.

Thus, both the Watergate scandal in 1972 and the Iran-Contra Affair in 1986 could be viewed as “sequels” to the earlier machinations driven by Republican hunger to seize the enormous powers of the U.S. presidency. However, for decades, Official Washington has been hostile to these underlying explanations of how Watergate and Iran-Contra began.

For instance, The New York Times, the so-called “newspaper of record,” treated the accumulation of evidence regarding Nixon’s 1968 peace-talk gambit as nothing more than a “rumor” until earlier this year when a scholar, John A. Farrell, uncovered cryptic notes taken by Nixon’s aide H.R. Haldeman, which added another piece to the mosaic and left the Times little choice but to pronounce the historical reality finally real.

Grasping the Watergate Narrative
Still, the Times and other major news outlets have failed to factor this belated admission into the larger Watergate narrative. If you understand that Nixon did sabotage President Johnson’s Vietnam War peace talks and that Nixon was aware that Johnson’s file on what LBJ called Nixon’s “treason” had disappeared from the White House, the early “Watergate tapes” from 1971 suddenly make sense.
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President Richard Nixon with his then-National Security Advisor Henry Kissinger in 1972.


Nixon ordered White House chief of staff H.R. “Bob” Haldeman and National Security Adviser Henry Kissinger to locate the missing file but their search came up empty. Yet, some Nixon aides thought the file might be hidden at the Brookings Institution, a liberal think tank in Washington. So, in his desperate pursuit of the file, Nixon called for a break-in at Brookings, possibly even fire-bombing the building as a cover for his team of burglars to slip in amid the confusion and rifle the safe.


The old explanation that Nixon simply wanted to find some file related to Johnson’s 1968 pre-election Vietnam bombing halt never made sense given the extreme steps that Nixon was prepared to take.

The relevant portions of Nixon’s White House tapes include an entry on June 17, 1971, coincidentally one year to the day before the Watergate burglars were caught. Nixon summoned Haldeman and Kissinger to the Oval Office and pleaded with them again to locate the file.

“Do we have it?” Nixon asked Haldeman. “I’ve asked for it. You said you didn’t have it.”

Haldeman: “We can’t find it.”

Kissinger: “We have nothing here, Mr. President.”

Nixon: “Well, damn-it, I asked for that because I need it.”

Kissinger: “But Bob and I have been trying to put the damn thing together.”

Haldeman: “We have a basic history in constructing our own, but there is a file on it.”

Nixon: “Where?”

Haldeman: “[Presidential aide Tom Charles] Huston swears to God that there’s a file on it and it’s at Brookings.
”
Nixon: “Bob? Bob? Now do you remember Huston’s plan [for White House-sponsored break-ins as part of domestic counter-intelligence operations]? Implement it.”

Kissinger: “Now Brookings has no right to have classified documents.”

Nixon: “I want it implemented. Goddamn-it, get in and get those files. Blow the safe and get it.”

Haldeman: “They may very well have cleaned them by now, but this thing, you need to “

Kissinger: “I wouldn’t be surprised if Brookings had the files.”

Haldeman: “My point is Johnson knows that those files are around. He doesn’t know for sure that we don’t have them around.”

But Johnson did know that the file was no longer at the White House because he had ordered his national security adviser, Walt Rostow, to remove it in the final days of Johnson’s presidency.

Forming the Burglars
On June 30, 1971, Nixon again berated Haldeman about the need to break into Brookings and “take it [the file] out.” Nixon suggested using former CIA officer E. Howard Hunt to conduct the Brookings break-in.


“You talk to Hunt,” Nixon told Haldeman. “I want the break-in. Hell, they do that. You’re to break into the place, rifle the files, and bring them in. Just go in and take it. Go in around 8:00 or 9:00 o’clock.”


Haldeman: “Make an inspection of the safe.”

Nixon: “That’s right. You go in to inspect the safe. I mean, clean it up.”
For reasons that remain unclear, it appears that the Brookings break-in never took place (nor did the fire-bombing), but Nixon’s desperation to locate Johnson’s peace-talk file was an important link in the chain of events that led to the creation of Nixon’s burglary unit under Hunt’s supervision. Hunt later oversaw the two Watergate break-ins in May and June of 1972.


While it’s possible that Nixon was still searching for the file about his Vietnam-peace sabotage when the ill-fated Watergate break-ins occurred a year later, it’s generally believed that the burglary was more broadly focused, seeking any information that might have an impact on Nixon’s re-election, either defensively or offensively.


However, if you think back on 1971 when the Vietnam War was tearing the country apart and massive antiwar demonstrations were descending on Washington, Nixon’s desperation to locate the missing file suddenly doesn’t seem quite so crazy. There would have been hell to pay if the public learned that Nixon had kept the war going to gain a political advantage in 1968.
https://consortiumnews.com/wp-conten...51-300x156.jpg
Walt Rostow’s “‘X’ Envelope”

Through 1972 – and the early days of the Watergate scandal – former President Johnson had stayed silent about Nixon’s sabotage of the Paris peace talks. But the ex-President became livid when – after Nixon’s reelection in 1972 – Nixon’s men sought to pressure Johnson into helping them shut down the Watergate investigation, in part, by noting that Johnson, too, had deployed wiretaps against Nixon’s 1968 campaign to obtain evidence about the peace-talk sabotage.


While it’s not clear whether Johnson would have finally spoken out, that threat to Nixon ended two days after Nixon’s second inaugural when on Jan. 22, 1973, Johnson died of a heart attack. However, unbeknownst to Nixon, Johnson had left the missing file, called “The X-Envelope,” in the care of Rostow, who – after Johnson’s death – gave the file to the LBJ presidential library in Austin, Texas, with instructions that it be kept under wraps for at least 50 years. (Rostow’s instructions were overturned in the 1990s, and I found the now largely declassified file at the library in 2012.)


So, with the “The X-Envelope” squirreled away for more than two decades at the LBJ library and with the big newspapers treating the early sketchy reports of Nixon’s peace-talk sabotage as only “rumors,” Watergate remained a scandal limited to the 1972 campaign.
Still, Nixon’s cover-up of his campaign’s role in the Watergate break-in produced enough clear-cut evidence of obstruction of justice and other offenses that Nixon was forced to resign on Aug. 9, 1974.


A Failed Investigation
The 1979-81 hostage confrontation with Iran was not nearly as devastating a crisis as the Vietnam War but America’s humiliation during the 444-day-long ordeal became a focus of the 1980 election, too, with the first anniversary of Iran’s seizure of the U.S. Embassy in Tehran coincidentally falling on Election Day 1980.
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President Jimmy Carter signing the Camp David peace agreement with Egypt’s Anwar Sadat and Israel’s Menachem Begin.


President Carter’s failure to gain freedom for the 52 embassy personnel turned what had been a close race into a landslide for Ronald Reagan, with Republicans also gaining control of the U.S. Senate and ousting some of the most influential Democratic senators.

In 1984, Reagan won reelection in another landslide, but two years later ran afoul of the Iran-Contra scandal. Reagan’s secret arms sales to Iran and diversion of profits to the Contras “broke” in November 1986 but focused only on Reagan’s 1985-1986 arms sales and the diversion. Still, the scandal’s crimes included violations of the Arms Export Control Act and the so-called Boland Act’s prohibitions on arming the Contras as well as perjury and obstruction of justice. So there was the prospect of Reagan’s impeachment.


But – from the start of Iran-Contra – there was a strong pushback from Republicans who didn’t want to see another GOP president driven from office. There was also resistance to the scandal from many mainstream media executives who personally liked Reagan and feared a public backlash if the press played an aggressive role similar to Watergate.


And, moderate Democrats, such as Rep. Lee Hamilton of Indiana who co-chaired the congressional investigation, sought to tamp down the Iran-Contra fires and set up firebreaks to prevent the investigation from spreading to related crimes such as the Reagan administration’s protection of Contra cocaine traffickers.


“Ask about the cocaine,” pleaded one protester who was dragged from the Iran-Contra hearing room, as the congressional investigators averted their eyes from such unseemly matters, focusing instead on stilted lectures about the Congress’s constitutional prerogatives.
It was not until 1990-91 that it became clear that secret U.S.-approved arms shipments to Iran did not start in 1985 as the Iran-Contra narrative claimed but traced back to 1981 with Reagan’s approval of arms sales to Iran through Israel.


Reagan’s politically risky move of secretly arming Iran immediately after his inauguration and the hostage release was nearly exposed when one of the Israeli flights strayed into Soviet airspace on July 18, 1981, and crashed or was shot down.


In a PBS interview nearly a decade later, Nicholas Veliotes, Reagan’s assistant secretary of state for the Middle East, said he looked into the incident by talking to top administration officials.

“It was clear to me after my conversations with people on high that indeed we had agreed that the Israelis could transship to Iran some American-origin military equipment,” Veliotes said.

In checking out the Israeli flight, Veliotes came to believe that the Reagan camp’s dealings with Iran dated back to before the 1980 election. “It seems to have started in earnest in the period probably prior to the election of 1980, as the Israelis had identified who would become the new players in the national security area in the Reagan administration,” Veliotes said. “And I understand some contacts were made at that time.”


However, in 1981, Veliotes said, the State Department issued misleading press guidance to cover the administration’s tracks and the Washington media failed to follow up. Thus, the U.S.-Israeli arms pipeline to Iran stayed secret from the American people until November 1986 when — despite Reagan’s long-running insistence that he would never trade arms with a terrorist state like Iran — the operation was exposed.

When I re-interviewed Veliotes in 2012, he said he couldn’t recall who the “people on high” were who had described the informal clearance of the Israeli shipments of U.S.-manufactured weapons, but he indicated that “the new players” were the young neoconservatives who were working on the Reagan campaign, many of whom later joined the administration as senior political appointees.

Documents that I discovered at the Reagan presidential library revealed that Reagan’s neocons at the State Department, particularly Robert McFarlane and Paul Wolfowitz, initiated a policy review in 1981 to allow Israel to undertake secret military shipments to Iran.
McFarlane and Wolfowitz also maneuvered to put McFarlane in charge of U.S. relations toward Iran and to establish a clandestine U.S. back-channel to the Israeli government outside the knowledge of even senior U.S. government officials.


Another Failed Investigation
In 1991, faced with the accumulating evidence of a prequel to the Iran-Contra scandal, Congress grudgingly agreed to take a look at these so-called “October Surprise” allegations. But Republicans, then led by President George H.W. Bush and his White House team, mounted an aggressive cover-up to “spike” the story.
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Former Rep. Lee Hamilton, D-Indiana.


And, with the congressional inquiry largely in the hands again of Rep. Hamilton, the Democrats timidly folded their tent despite a growing body of evidence that the Reagan team was indeed guilty.

Much of that evidence flowed into the House Task Force in December 1992 when President George H.W. Bush had already been defeated for reelection and the Democrats were looking forward to their renewed control of Washington. So, instead of giving a careful review to the new evidence, the House Task Force ignored, disparaged or buried it.

The late-arriving material included sworn testimony on Dec. 18, 1992, from David Andelman, the biographer of French intelligence chief Alexandre deMarenches, describing how deMarenches had confided that he had helped arrange the Republican-Iranian contacts.

Andelman, an ex-New York Times and CBS News correspondent, said that while he was working on deMarenches’s autobiography, the arch-conservative spymaster admitted arranging meetings between Republicans and Iranians about the hostage issue in the summer and fall of 1980, with one meeting held in Paris in October.


Andelman said deMarenches ordered that the secret meetings be kept out of his memoirs because the story could otherwise damage the reputations of his friends, William Casey and George H.W. Bush. Andelman’s testimony corroborated longstanding claims from a variety of international intelligence operatives about a Paris meeting involving Casey and Bush. But the Task Force report brushed this testimony aside, paradoxically terming it “credible” but then claiming it was “insufficiently probative.”


The Task Force’s report argued that Andelman could not “rule out the possibility that deMarenches had told him he was aware of and involved in the Casey meetings because he, deMarenches, could not risk telling his biographer he had no knowledge of these allegations.”


In the last weeks of the investigation, the House investigators also received a letter from former Iranian President Bani-Sadr detailing his behind-the-scenes struggle with Ayatollah Ruhollah Khomeini and his son Ahmad over their secret dealings with the Reagan campaign. But the House investigators dismissed Bani-Sadr’s first-hand account as hearsay and thus also lacking “probative value.”

I later unearthed some of the evidence in unpublished Task Force files. However, in the meantime, Official Washington had dismissed the “October Surprise” and other Iran-Contra-connected scandals, like Contra drug trafficking, as conspiracy theories.

The Russian Report
Ironically, another piece of late-arriving evidence was a January 1993 report from a national security committee of the Russian parliament about the Kremlin’s intelligence data confirming that key Republicans, including George H.W. Bush and William Casey, had met with Iranian officials in Europe regarding the hostages during the 1980 campaign.
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Then-Vice President George H.W. Bush with CIA Director William Casey at the White House on Feb. 11, 1981. (Photo credit: Reagan Library)


Hamilton had requested the Russian assistance before the U.S. election in 1992, but the report was not sent until there were only two weeks left in George H.W. Bush’s presidency.


Lawrence Barcella, who served as the Task Force chief counsel, later told me that so much incriminating evidence arrived late that he asked Hamilton to extend the inquiry for three months but that Hamilton said no (although Hamilton told me that he had no recollection of denying Barcella’s request).

The other fatal flaw of the House investigation was that it left much of the actual investigating up to President George H.W. Bush’s White House counsel’s office and the State Department, although Bush was one of the chief suspects and, in 1991-92, was running for re-election, a campaign that would have been derailed if the 1980 October Surprise allegations were confirmed.
The naivete of this decision was underscored years later when I located a memo at Bush’s presidential library stating that the State Department had informed the White House counsel’s office that Casey had traveled to Madrid in 1980, corroborating a key October Surprise allegation.

The confirmation of Casey’s trip was passed along by State Department legal adviser Edwin D. Williamson to Associate White House Counsel Chester Paul Beach Jr. in early November 1991, just as the October Surprise inquiry was taking shape, according to Beach’s “memorandum for record” dated Nov. 4, 1991.


Williamson said that among the State Department “material potentially relevant to the October Surprise allegations [was] a cable from the Madrid embassy indicating that Bill Casey was in town, for purposes unknown,” Beach noted.

Two days later, on Nov. 6, 1991, Beach’s boss, White House counsel C. Boyden Gray, arranged an inter-agency strategy session and explained the need to contain the congressional investigation into the October Surprise case. The explicit goal was to ensure the scandal would not hurt President Bush’s reelection hopes in 1992.


In 2013, when I interviewed Hamilton about the Beach memo, he lamented that the Madrid information had not been shared with his investigation, saying “you have to rely on people” in authority to comply with information requests.


“We found no evidence to confirm Casey’s trip to Madrid,” Hamilton told me. “We couldn’t show that. The [George H.W. Bush] White House did not notify us that he did make the trip. Should they have passed that on to us? They should have because they knew we were interested in that.”


Asked if knowledge that Casey had traveled to Madrid might have changed the Task Force’s dismissive October Surprise conclusion, Hamilton said yes, because the question of the Madrid trip was key to the task force’s investigation.

Not Moving the Needle
However, the Madrid trip revelation and other post-investigation disclosures failed to move the needle on Official Washington’s disdain for the October Surprise story.
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Israeli Prime Minister Yitzhak Shamir shaking hands with President Ronald Reagan’s Defense Secretary Caspar Weinberger in 1982. (U.S. government photo)


The later disclosures included a 1993 interview in Tel Aviv in which former Israeli Prime Minister Yitzhak Shamir said he had read the 1991 book, October Surprise, by Carter’s former National Security Council aide Gary Sick, which made the case for believing that the Republicans had intervened in the 1980 hostage negotiations to disrupt Carter’s reelection.


With the topic raised, one interviewer asked, “What do you think? Was there an October Surprise?”

“Of course, it was,” Shamir responded without hesitation. “It was.”

And, there were other corroborating statements as well. In 1996, for instance, while former President Carter was meeting with Palestine Liberation Organization leader Arafat in Gaza City, Arafat tried to confess his role in the Republican maneuvering to block Carter’s Iran-hostage negotiations.

“There is something I want to tell you,” Arafat said, addressing Carter in the presence of historian Douglas Brinkley. “You should know that in 1980 the Republicans approached me with an arms deal [for the PLO] if I could arrange to keep the hostages in Iran until after the [U.S. presidential] election,” Arafat said, according to Brinkley’s article in the fall 1996 issue of Diplomatic Quarterly.



In 2013, after the movie “Argo” appeared regarding an early facet of the Iran-hostage crisis, former Iranian President Bani-Sadr elaborated on his account of Republican overtures to Iran in 1980 and how that secret initiative prevented release of the hostages.

In a Christian Science Monitor commentary, Bani-Sadr wrote, “Ayatollah Khomeini and Ronald Reagan had organized a clandestine negotiation which prevented the attempts by myself and then-U.S. President Jimmy Carter to free the hostages before the 1980 U.S. presidential election took place. The fact that they were not released tipped the results of the election in favor of Reagan.”

Then, Bani-Sadr added a new detail, that “two of my advisors, Hussein Navab Safavi and Sadr-al-Hefazi, were executed by Khomeini’s regime because they had become aware of this secret relationship between Khomeini, his son Ahmad, … and the Reagan administration.” [For more details on the October Surprise case, see Robert Parry’s Trick or Treasonand America’s Stolen Narrative.]


Compare and Contrast
So how do Watergate and Iran-Contra compare and contrast with Russia-gate? One key difference is that in Watergate in 1972-73 and Iran-Contra in 1985-86, you had clear-cut crimes (even if you don’t want to believe the two “prequels” from 1968 and 1980, respectively).
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President Donald Trump being sworn in on Jan. 20, 2017. (Screen shot from Whitehouse.gov)


In Watergate, five burglars were caught inside the DNC offices on June 17, 1972, as they sought to plant more bugs on Democratic phones. (An earlier break-in in May had installed two bugs, but one didn’t work.) Nixon then proceeded to mount a cover-up of his 1972 campaign’s role in funding the break-in and other abuses of power.

In Iran-Contra, Reagan secretly authorized weapons sales to Iran, which was then designated a terrorist state, without informing Congress, a violation of the Arms Export Control Act. He also kept Congress in the dark about his belated signing of a related intelligence “finding.” And the creation of slush funds to finance the Nicaraguan Contras represented an evasion of the U.S. Constitution.


There was also the attendant Iran-Contra cover-up mounted both by the Reagan White House and later the George H.W. Bush White House, which culminated in Bush’s Christmas Eve 1992 pardons of six Iran-Contra defendants as special prosecutor Lawrence Walsh was zeroing in on possible indictment of Bush for withholding evidence.

By contrast, Russia-gate has been a “scandal” in search of a specific crime. President Barack Obama’s intelligence chieftains have alleged – without presenting any clear evidence – that the Russian government hacked into the emails of the Democratic National Committee and of Hillary Clinton’s campaign chairman John Podesta and released those emails via WikiLeaks and other Internet sites. (The Russians and WikiLeaks have both denied the accusations.)

The DNC emails revealed that senior Democrats did not maintain their required independence regarding the primaries by seeking to hurt Sen. Bernie Sanders and help Clinton. The Podesta emails pulled back the curtain on Clinton’s paid speeches to Wall Street banks and on pay-to-play features of the Clinton Foundation.


Hacking into personal computers is a crime, but the U.S. government has yet to bring any formal charges against specific individuals supposedly responsible for the hacking of the Democratic emails. There also has been no evidence that Donald Trump’s campaign colluded with Russians in the hacking.


Lacking any precise evidence of this cyber-crime or of a conspiracy between Russia and the Trump campaign, Obama’s Justice Department holdovers and now special prosecutor Robert Mueller have sought to build “process crimes,” around false statements to investigators and possible obstruction of justice.


Railroading Flynn
In the case of retired Lt. Gen. Michael Flynn, Trump’s first national security adviser, acting Attorney General Sally Yates used the archaic Logan Act of 1799 to create a predicate for the FBI to interrogate Flynn about a Dec. 29, 2016 conversation with Russian Ambassador Sergey Kislyak, i.e., after Trump’s election but before the Inauguration.
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Green Party leader Jill Stein and retired Lt. General Michael Flynn attending a dinner marking the RT network’s 10-year anniversary in Moscow, December 2015, sitting at the same table as Russian President Vladimir Putin.


The Logan Act, which has never resulted in a prosecution in 218 years, was enacted during the period of the Alien and Sedition Acts to bar private citizens from negotiating on their own with foreign governments. It was never intended to apply to a national security adviser of an elected President, albeit before he was sworn in.

But it became the predicate for the FBI interrogation — and the FBI agents were armed with a transcript of the intercepted Kislyak-Flynn phone call so they could catch Flynn on any gaps in his recollection, which might have been made even hazier because he was on vacation in the Dominican Republic when Kislyak called.

Yates also concocted a bizarre argument that the discrepancies between Flynn’s account of the call and the transcript left him open to Russian blackmail although how that would work – since the Russians surely assumed that Kislyak’s calls would be monitored by U.S. intelligence and thus offered them no leverage with Flynn – was never explained.

Still, Flynn’s failure to recount the phone call precisely and the controversy stirred up around it became the basis for an obstruction of justice investigation of Flynn and led to President Trump’s firing Flynn on Feb. 13.

Trump may have thought that tossing Flynn overboard to the circling sharks would calm down the sharks but the blood in the water only excited them more. According to then-FBI Director James Comey, Trump talked to him one-on-one the next day, Feb. 14, and said, “‘I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go.”

Trump’s “hope” and the fact that he later fired Comey have reportedly led special prosecutor Mueller to look at a possible obstruction of justice case against Trump. In other words, Trump could be accused of obstructing what appears to have been a trumped-up case against Flynn.

Of course, there remains the possibility that evidence might surface of Trump or his campaign colluding with the Russians, but such evidence has so far not been presented. Or Mueller’s investigation might turn over some rock and reveal some unrelated crime, possibly financial wrongdoing by Trump or an associate.


(Something similar happened in the Republican investigation of the Sept. 11, 2012 Benghazi attack, a largely fruitless inquiry except that it revealed that Secretary of State Hillary Clinton sent and received official emails over a private server, which Comey decried during last year’s campaign as “extremely careless” but not criminal.)


Curb the Enthusiasm
Another contrast between the earlier scandals (Watergate and Iran-Contra) and Russia-gate is the degree of enthusiasm and excitement that the U.S. mainstream media and congressional Democrats have shown today as opposed to 1972 and 1986.
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The Washington Post’s Watergate team, including from left to right, publisher Katharine Graham, Carl Bernstein, Bob Woodward, Howard Simons, and executive editor Ben Bradlee.


Though The Washington Post’s Bob Woodward and Carl Bernstein aggressively pursued the Watergate scandal, there was much less interest elsewhere in major news outlets until Nixon’s criminality became obvious in 1973. Many national Democrats, including DNC Chairman Bob Strauss, were extremely hesitant to pursue the scandal if not outright against it.

Similarly, although Brian Barger and I at The Associated Press were pursuing aspects of Iran-Contra since early 1985, the big newspapers and networks consistently gave the Reagan administration the benefit of the doubt – at least before the scandal finally burst into view in fall 1986 (when a Contra-supply plane crashed inside Nicaragua and a Lebanese newspaper revealed U.S. arms shipments to Iran).

For several months, there was a flurry of attention to the complex Iran-Contra scandal, but the big media still ignored evidence of a White House cover-up and soon lost interest in the difficult work of unraveling the convoluted networks for arms smuggling, money laundering and cocaine trafficking.


Congressional Democrats also shied away from a constitutional confrontation with the popular Reagan and his well-connected Vice President George H.W. Bush.

After moving from AP to Newsweek in early 1987, I learned that the senior executives at Newsweek, then part of The Washington Post Company, didn’t want “another Watergate”; they felt another such scandal was not “good for the country” and wanted Iran-Contra to go away as soon as possible. I was even told not to read the congressional Iran-Contra report when it was published in October 1987 (although I ignored that order and kept trying to keep my own investigation going in defiance of the wishes of the Newsweek brass until those repeated clashes led to my departure in June 1990).


So, perhaps the biggest similarity between Russia-gate and Watergate is that Richard Nixon and Donald Trump were both highly unpopular with the Washington establishment and thus had few influential defenders, while an important contrast with Iran-Contra was that Reagan and Bush were very well liked, especially among news executives such as Washington Post publisher Katharine Graham who, by all accounts, did not care for the uncouth Nixon. Today, the senior executives of The New York Times, The Washington Post and other major news outlets have made no secret of their disdain for the buffoonish Trump and their hostility toward Russian President Vladimir Putin.


In other words, what is driving Russia-gate – for both the mainstream news media and the Democrats – appears to be a political agenda, i.e., the desire to remove Trump from office while also ratcheting up a New Cold War with Russia, a priority for Washington’s neoconservatives and their liberal-interventionist sidekicks.


If this political drama were playing out in some other country, we would be talking about a “soft coup” in which the “oligarchy” or some other “deep state” force was using semi-constitutional means to engineer a disfavored leader’s removal.

Of course, since the ongoing campaign to remove Trump is happening in the United States, it must be presented as a principled pursuit of truth and a righteous application of the rule of law. But the comparisons to Watergate and Iran-Contra are a stretch.


Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).
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Tags: George H.W. Bush Iran-Contra Affair October Surprise Richard Nixon Robert Parry Ronald Reagan Vietnam War Watergate William Casey
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CNN Is Dead: Network Loses All Credibility As Producer Admits That The Entire Russia Narrative Is Fake News
http://theeconomiccollapseblog.com/w...icons/user.gif By Michael Snyder, on June 27th, 2017


http://theeconomiccollapseblog.com/w...er-460x460.jpgNobody else needs to dig a grave for CNN because they are doing it themselves. There has been scandal after scandal at the network, and now one of their producers has been caught on undercover video admitting that CNN has been pushing fake news stories about a connection between Donald Trump and Russia in a desperate attempt to get ratings. In other words, CNNs entire Russia narrative has been a complete lie all along. Unfortunately for CNN, they are going to discover that once your credibility is gone it is incredibly difficult to ever get it back.


On Tuesday, Project Veritas made headlines all over the world when it released undercover video of CNN Producer John Bonifield admitting that CNNs Russia narrative is fake news. If you havent seen it yet, you can view the entire video right here. Now that this video has been made public, I dont see how CNN is ever going to recover from this. When one of your top producers admits that the story you have been pushing for months is basically a load of cow manure, it is impossible to maintain the pretense that you are a legitimate news organization any longer


Project Veritas has released a video of CNN Producer John Bonifield who was caught on hidden-camera admitting that there is no proof to CNNs Russia narrative.

I mean, its mostly bullshit right now, Bonifield says. Like, we dont have any giant proof.

He confirms that the driving factor at CNN is ratings:
Its a business, people are like the media has an ethical phssssss All the nice cutesy little ethics that used to get talked about in journalism school youre just like, thats adorable. Thats adorable. This is a business.


And of course this comes on the heels of three reporters being forced out of CNN for publishing a false story that attempted to link a Russian investment fund with Trump

Three CNN employees have handed in their resignations over a retracted story linking President Trump to Russia, the network announced Monday.


The article was removed from CNN.com on Friday after the network decided it could no longer stand by its reporting.

In the aftermath of the retraction of a story published on CNN.com, CNN has accepted the resignation of the employees involved in the storys publication, a network spokesperson told TheWrap in a statement.

President Trump has taken a lot of heat for referring to CNN as fake news, but after the events of the past several days he has been completely vindicated.

And once news broke of three reporters being forced out of the network for a false story about Russia, he took a bit of a victory lap with this tweet


Wow, CNN had to retract big story on Russia, with 3 employees forced to resign. What about all the other phony stories they do? FAKE NEWS!


This is such a shame, because I always liked CNNs election coverage compared to the other networks. John King always did such a great job breaking things down county by county, and Wolf Blitzer always made things seem so dramatic.


But now it is exceedingly difficult to see any sort of a future for the network after all of this.

And of course other major news outlets have been guilty of pushing fake news about Russia too. The following comes from the Intercept


Over and over, major U.S. media outlets have published claims about the Russia Threat that turned out to be completely false always in the direction of exaggerating the threat and/or inventing incriminating links between Moscow and the Trump circle. In virtually all cases, those stories involved evidence-free assertions from anonymous sources that these media outlets uncritically treated as fact, only for it to be revealed that they were entirely false.


But with CNN it has always been on another level, and we now have a top insider on tape admitting that a connection between Trump and Russia is being pushed even though there isnt any evidence. In fact, Bonifield says that CNN CEO Jeff Zucker has been personally pushing this angle himself


Just to give you some context, President Trump pulled out of the climate accords and for a day and a half we covered the climate accords. And the CEO of CNN (Jeff Zucker) said in our internal meeting, he said good job everybody covering the climate accords, but were done with that, lets get back to Russia.


I cant imagine that Zucker gets to keep his job now that this has been revealed.

It may not happen immediately, but look for him to be shown the door in the not too distant future.

All along, Trump has insisted that this whole thing with Russia has been a witch hunt, and that is what I have been saying too. And it turns out that Bonifield feels the exact same way


I just feel like they dont really have it but they want to keep digging. And so I think the President is probably right to say, like, look you are witch hunting me. You have no smoking gun, you have no real proof.


If this doesnt kill the Russia story, I dont know what will.

This whole thing has been a massive charade from the very beginning, and the big news networks have been endlessly pushing it for ratings.


In their zeal to destroy Trump, they have jumped the shark and have destroyed their own credibility instead.

Once upon a time, most mainstream journalists at least attempted to pretend that they were being objective, but those days are long gone.

Today, it is absolutely imperative for all of us to understand that everyone has an agenda. In other words, every single person that you see on television is trying to get a message across. So instead of taking in news and entertainment passively, we need to have our filters up and we need to be thinking for ourselves.


Fortunately, episodes such as this one tend to awaken a lot of people, and more Americans than ever are sick and tired of the lies and misinformation that they are constantly being fed.

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June 27th, 2017 | Tags: CNN,

https://yragharris.com/2017/06/28/disabuse/

Notes From Underground
Where 2+2=5 is also a beautiful thing


« Notes From Underground: Ben Bernanke Channels Karl Marx

Notes From Underground: Disabusing You of an ECB Tapering

On Tuesday, Mario Draghi, the Magician of Frankfurt, created a temporary maelstrom in global bond markets by hinting at a possible end to the ECB’s current QE program. While Draghi suggested that low rates were still a necessity to ensure that the European recovery remains on pace, the ECB president raised the issue that deflation was no longer a threat for the EU. Sovereign debt YIELDS rose dramatically as volatile hedge fund positions were liquidated and speculators sold bund, oat and BTP futures. On Wednesday, the ECB “explained” that Draghi’s statements were misconstrued and did not deviate from current ECB policy. ECB Vice President Vitor Constancio claimed Draghi was “totally” in line with existing ECB policy.

Months ago I wrote that the ECB would try to strengthen the EURO after the French elections in an effort to “smooth the runway” for German Chancellor Merkel’s September election. A strengthened EURO would weaken the arguments of the AfD ‘s criticism of the ECB, that it’s wreaking havoc on the European financial system. Draghi’s comments resulted in a 1 percent appreciation of the EURO against the U.S. DOLLAR, British pound and Japanese yen. Constancio’s comments initially weakened the EURO but by day’s end the currency strengthened against the DOLLAR.

In my opinion, the large move in European bond yields on was more of a result of the ECB‘s non-action rather than Draghi’s comments. Why? The ECB publishes its QE purchases for the previous week and monthly totals on Monday morning. The 60 billion euro allotment under the current QE policy showed that with five trading days left in June, EUR56.7 billion had been purchased, leaving a remaining 3.3 billion euros to be added to the balance sheet. We don’t know how much was transacted on Monday so the ECB may have been lacking the firepower to stem the rapid rise in yields. The ECB will reset its program July 3 and have a fresh 60 billion euros. If I am correct, any short positions will be subject to the enhanced firepower of Draghi’s printing press.


The ECB is very far from tapering because Draghi has to continue building the balance sheet, especially as there are Italian assets to be purchased. Draghi and company have to move non-performing loans onto the books of the Bank of Italy and the ECB. Lost in all the noise from Draghi, Yellen, Carney and Bernanke was the news of Rome’s 17 billion euro wind-up of Veneto Banca and Banca Popolare di Vicenza. Several German politicians voiced outrage that Rome’s bail-out plan violated the rules that Brussels put in place so taxpayers wouldn’t absorb the costs of any bank restructuring. The Italian bank rescue leaves the taxpayers on the hook for roughly 17 billion euros. The Italian Government argued that violating the Brussels rules was in the “national interest.” The senior bondholders in these two banks were small retail investors, which would be a political disaster for the present government.


The Italian economy has a high percentage of non-performing loans. With a debt-t0-GDP ratio of 132% the Italian state has little flexibility to absorb the vast amount of bad loans. National interest is a phrase of convenience to abrogate the rule of law. In a Financial Times article titled, “Germany Calls For Tighter Rules After Rome’s 17 bn Banks Wind-Up,” the reporter quotes Carsten Schneider, a Social Democrat Bundestag whip and budget policy expert. He said, “This decision will discredit continuing the completion of the banking union and moves the common deposit-guarantee scheme into the distant future.It cannot be that bank wind-downs under national rules offer better conditions for creditors tan under the European regime.” The ECB is far from tapering as the demands of several European countries for ECB efforts to do “whatever it takes” remain paramount.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Euro Surges, Yields And Stocks Rise As Central Banks Deliver Coordinated Message
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by Tyler Durden
Jun 29, 2017 6:37 AM


The euro soared to the highest level in over a year while bond yields and global shares also climbed, as an ongoing barrage of coordinated hawkish comments from central banks signaled the era of easy money might be coming to an end for more than just the United States. S&P futures were fractionally in the green following the best day for US equities in two months, as banks climbed after passing the Fed's stress tests and announcing bigger than expected shareholder payouts.

Asian stocks posted broad gains and European shares were little changed while oil climbed for the sixth consecutive day, with WTI trading above $45. The euro rose for a third day against the dollar as hawkish comments from Mario Draghi this week boosted bets the ECB is preparing to unwind stimulus, while the ECB's attempt to walk back Draghi's hawkishness was roundly ignored. EUR/USD rose as much as 0.4% to 1.1425, highest since June 2016.

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“It will take more than anonymous ECB sources to cool the desire to bet on the euro and dump the dollar,” says Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “Many investors are tantalized by the prospect of key quarterly meetings in September producing no move from the Fed but a plan to wind down quantitative easing at the ECB.” The residual sentiment from Draghi's statement meant yields across developed markets continued their upward move, with Bunds back to 0.40%, nearly doubling in the past three days.
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In keeping with the overall hawkish sentiment, BOE's chief economist Andrew Haldane echoed Mark Carney's comments from yesterday, when he said that the BOE should seriously look at rising rates, although he added that he is happy with where rates are now. His comment sent the pound briefly above 1.30, back to levels last seen last September, before paring some gains.

The Bank of Canada went further, with two top policymakers suggesting they might tighten as early as July.

"This is simply the central banks getting together and trying to arrest deflation," said Nomura's head of G10 currency trading Peter Gorra. "They are trying to be as smart as they can and agreeing that they have to act in unison. I don't think this is necessarily a dollar move and I don't think the dollar's rally is over. They are just trying to add some two-way risk to the market."

As the Euro surged, the dollar tumbled, touching its lowest since October - before Trump was elected U.S. president - against its broad index, as investors shifted to the view that the U.S. Federal Reserve might not be the only game in town when it comes to higher interest rates.

For those who may have missed the fireworks over the past few days, here is a concise and accurate summary from SocGen's Kit Juckes:
Apparently, ECB President Mario Draghi's comments about reflationary forces replacing deflationary ones were mis-interpreted by markets and were intended to be more balanced. A case of ham-fisted communication that argues for less forward guidance by policy-makers? Maybe, though I think the strategy on both sides of the Atlantic, which is to only change policy settings after ensuring markets won't be surprised, has merit. And more importantly, will continue. What I don't think, is that you can 'unsay' things by expressing surprise at the market reactions, any more than the king's soldiers could put Humpty-Dumpty back together again.

The ECB isn't going to hike rates soon. And how fast they move to reduce the pace of bond purchases probably does depend on how much the euro rallies. But the turn in the economy is pretty plain for us all to see. This week it has been the IFO survey and money supply data that show a continued acceleration in underlying loan growth. So of course the lifespan of extraordinarily easy policy settings (particularly asset purchases) is shortening. The lack of inflation, which is going to be highlighted today by Germany CPI figures that are likely to be as low as the Italian ones yesterday, ought to anchor bond yields and affect expectations about what removing extraordinary accommodation means, but they don't change the fact that policy, like the economy, has reached a turn in the road. And that turn is positive for the euro, if only because it has been kept at a very low valuation by the combination of negative rates and bondbuying, despite a large current account surplus.

The ECB can't normalise monetary policy without sacrificing the extreme cheapness of the currency, but maybe the ECB President thinks he can avoid a disorderly currency correction if he managers to guide market expectations. From here, we still think we're a heading, erratically, towards EUR/USD 1.20 and above EUR/JPY 130.
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Helping market sentiment this morning was the result from the latest Stress Test, which saw all banks pass, and which would see banks return the most capital on record. JPMorgan, Citigroup and Bank of America Corp. led U.S. firms in unveiling plans to boost dividends and stock buybacks more than analysts had projected, after every lender passed annual stress tests for the first time since the Fed began the reviews in the wake of the 2008 financial crisis. Bank shares rallied in late trading.
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Boosted by the US stress test, banks led gains in Europe and Asia, after the S&P 500 Index rebounded from the biggest selloff in six weeks. European equity markets opened higher with initial strength in the banking sector after U.S. lenders’ share buyback announcement, only to give way to declines led by utilities after UBS cuts the sector.

The S&P rose 0.9 percent on Wednesday, bouncing back from a loss of 0.8 percent. It’s on pace for a seventh straight quarterly advance. The Nasdaq Composite Index jumped 1.4 percent on Wednesday. Technology shares climbed while miners jumped with commodity prices. The biggest banks climbed after clearing stress tests and then announcing shareholder payouts. JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. added 2 percent or more in premarket trading.

In Asia, the Aussie pushed to three-month highs amid rising yields and commodities rebound. Australian 3-year yield rises to highest since early May as red and green bank bills extend sell off. Asian stock indexes closed firmly green with Korea's Kospi rising to a new record high, Nikkei gains 0.5% while ASX 200 is one percent higher. Yuan rallies to seven-month high against dollar as PBOC strengthens daily fixing to two-week high and official journal flags a stronger bias for rest of the year. The composite was up 0.5%.


As Bloomberg notes, Global stocks are poised for the best first half of a year since 1998, gaining 11% to a record on the back of constant central bank liquidity injections. Investors are putting their faith in the robustness of earnings as the economy continues its recovery, shrugging off a host of worries from oil’s slump into a bear market to political wrangling in Washington. But risks remain: markets swung this week as the debate on normalizing central bank policy intensified after nine years of stimulus.

The euro surged 1.4 percent on Tuesday in the wake of comments from European Central Bank President Mario Draghi that investors took to be hawkish. A tumultuous Wednesday session followed as officials said the market had misjudged his message.

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The latest moment of euphoria may not last long, however.

"Central banks will be very cautious in their approach," said Martin Whetton, a senior rates strategist at ANZ. "But once they start tightening in concert, and their bloated balance sheets start unwinding, it is fair to say that bonds, equities, house prices and other asset markets will face stiffer headwinds than they have for a long time."

In commodities, the big mover was oil which rose for a sixth session, with Brent near $47.50/bbl, WTI ~$45. Benchmarks both rise for 6th consecutive session, longest run of gains since early April. Continued short-covering and a weaker dollar seen as helping push prices higher. “There’s probably still short-covering going on,” says Giovanni Staunovo, commodity analyst at UBS. “A weaker dollar and risk-on environment is helping too”

Also on the topic of oil, there was a quick statement by the UAE energy minister Suhail Mazrouei, who said that there are no talks about deeper OPEC cuts, and added that "we are not worried about the market recovery” and there is “no plan or talks” for further production cuts, Mazrouei tells reporters in Paris. “Of course, additional production coming from several producers is prolonging the recovery, but I think it’s a rather short term, and we hope to see more recovery in the third and fourth quarter. There is a drawdown from the inventories, there has been a correction. Yes, the correction is a bit slower than expected. The second quarter is always a low demand quarter. Third quarter and fourth quarter, we will have a pickup on the demand, and hopefully we will reach a more balanced market.”

Gold fell 0.3 percent to $1,245.82 an ounce despite the weaker dollar. Copper futures jumped 0.8 percent, advancing for a seventh day.
In currencies, the Bloomberg Dollar Spot Index slipped 0.1 percent as of 9:29 a.m. in London, dropping for a third day to the lowest since October. The euro increased 0.4 percent to $1.1424, the highest level since last year’s Brexit vote. The pound climbed 0.5 percent to $1.2984, heading for a seventh straight day of gains, the longest winning streak since April 2015. The Canadian dollar rose 0.1 percent after jumping 1.2 percent on Wednesday as Bank of Canada Governor Stephen Poloz reiterated he’s considering tighter policy.
In rates, the yield on 10-year Treasuries rose two basis points to 2.25 percent, after gaining two basis points on Wednesday and jumping seven basis points in the previous session. The yield on U.K. gilts advanced four basis points to 1.20 percent. French 10-year yields also added four basis points, as did those on 10-year German bunds.

Economic data includes initial jobless claims and 1Q GDP. Constellation Brands, Walgreens, Micron and Nike are among companies
reporting earnings. Bloomberg Dollar Spot Index -0.1%, industrial metals
rise.

Bulletin Headline Summary From RanSquawk

1. GBP/USD extended on gains and EUR/USD rose above 1.1400, as the USD-index languished below 96.00
2. Asian equity markets sustained the momentum from US, where the S&P 500 posted its best day in 2 months
3. Looking ahead, highlights National German CPI, US GDP, BoE's Carney and Fed's Bullard

Market Snapshot

1. S&P 500 futures up 0.1% to 2,441.5
2. STOXX Europe 600 down 0.05% to 385.62
3. MXAP up 0.6% to 155.77
4. MXAPJ up 0.9% to 509.52
5. Nikkei up 0.5% to 20,220.30
6. Topix up 0.6% to 1,624.07
7. Hang Seng Index up 1.1% to 25,965.42
8. Shanghai Composite up 0.5% to 3,188.06
9. Sensex up 0.3% to 30,938.89
10. Australia S&P/ASX 200 up 1.1% to 5,818.10
11. Kospi up 0.6% to 2,395.66
12. Gold spot down 0.3% to $1,245.72
13. U.S. Dollar Index down 0.3% to 95.77
14. German 10Y yield rose 4.7 bps to 0.415%
15. Euro up 0.4% to 1.1425 per US$
16. Italian 10Y yield fell 2.8 bps to 1.74%
17. Spanish 10Y yield rose 3.2 bps to 1.461%

Top Overnight News

1. Banks Unleash Surprisingly Big Payouts After Fed’s Stress Tests
2. Merkel Slaps at Trump and Brexit in Combative Speech Before G-20
3. Trump Travel Ban Said to Start Thursday Evening U.S. Time
4. Staples to Be Acquired by Sycamore Partners for $6.9 Billion
5. Siemens, Bombardier Said to Explore Two Rail Joint Ventures
6. Pound on Hot Streak as Carney Hints at Higher Interest Rates
7. Euro-Area Economic Confidence Hits Decade High as ECB Mulls Exit
8. Money Markets Dragged From Slumber as Central Banks Turn Hawkish
9. Activist Crystal Amber Pushes Northgate Executives to Sell
10. Shenhua Said to Mull GD Power Takeover Amid Guodian Merger
11. French Privacy Watchdog Closes Probe Into Microsoft Windows 10
12. Morgan Stanley Hires Barclays’s Mak to Head Malaysia Dealmaking
13. Santander Hires Morgan Stanley for Popular Asset Plan: Vozpopuli
14. Wood Group 1H Weaker Than Anticipated, Cautious on 2017 Outlook
15. BHP’s Nasser Says Activism Rising as Counter to Passive Funds

Asian equity markets sustained the momentum from US, where the S&P 500 posted its best day in 2 months as financials rallied ahead of Fed stress tests results and buyback announcements. This also inspired optimism for financials in ASX 200 (+1.1%) and Nikkei 225 (+0.4%), with the former further bolstered by commodity names after advances in crude and with iron ore prices higher by around 10% this week. Shanghai Comp. (+0.3%) and Hang Seng (+0.7%) adhered to the rising tide, although the mainland somewhat lagged after the PBoC refrained from liquidity operations for a 5th consecutive day citing relatively high liquidity amid month-end fiscal spending. Finally, demand for 10yr JGBs was dampened amid the widespread increased risk-appetite and as the BoJ refrained from a Rinban announcement, while the curve slightly flattened on underperformance in the short-end. PBoC refrained from open market operations for a 5th consecutive day, due to high liquidity levels from month-end fiscal spending.
Top Asian News

1. Inside the Red-Hot HSBC Fund That’s Turning Away New Money
2. Japan Stocks to Watch: Hitachi, Honda, Kusuri no Aoki, Nikon
3. India’s Modi Says Killing in Name of Cow Protection Unacceptable
4. Japan Currency Chief Asakawa Is Said to Stay On for a Third Year
5. ‘You Wouldn’t Do It’: BHP Chair Regrets $20 Billion Shale Spree
6. Macau Hotel With 30 Rolls-Royces And No Guests Seeks Funds
7. Activist Murakami Claims Rare Victory in Japan Shareholder Vote
8. Japan Shares Rally, Led by Banks on Optimism for Global Growth

In Europe, since the open, the initial gains in stocks have somewhat petered out, with Euro Stoxx 50 -0.07%, with the exception of the FTSE 100 amid a 4% rise in index heavyweight HSBC after MS upgrade. Financials have been outperforming after the Federal Reserve cleared buyback and dividend plans from the United States largest banks, including local units of Germany's Deutsche Bank and Spain's Santander. Additionally, support has been provided by hawkish signals from central bankers, most notably Carney and Draghi. Bunds have fallen off some 60+ ticks as yields steepening across the curve, post firmer regional CPI data, with the German 10yr benchmark now at a 5-week high (2Y +2.6bps, 5Y +4.5bps, 10Y 6.1bps, 30Y 6.9bps).

Ahead of today's German all too important, inflation print German Reginal CPIs for June all came in better than expected, suggesting Draghi amy have been right that the drop in inflation may have been transitoory.

1. German Baden Wurttemburg CPI (Jun) M/M 0.10% (Prey. -0.10%)
2. German Baden Wurttemburg CPI (Jun) Y/Y 1.60% (Prey. 1.50%)
3. German Hesse CPI (Jun) Y/Y 1.90% (Prey. 1.70%)
4. German Hesse CPI (Jun) M/M 0.10% (Prey. 0.00%)
5. German Bavaria CPI (Jun) M/M 0.10% (Prey. -0.10%)
6. German Bavaria CPI (Jun) Y/Y 1.40% (Prey. 1.40%)
7. German Brandenburg CPI (Jun) M/M 0.20% (Prey. -0.10%)
8. German Brandenburg CPI (Jun) Y/Y 1.50% (Prey. 1.40%)

Top European News

1. U.K. May Consumer Credit Surges, Showing Why BOE Took Action
2. Raiffeisen Says ‘Unjustified’ Losses Could Halt Polish IPO
3. Bond Investors’ Love for Russia Dispels Gloom of Crude Rout
4. U.K. Regulator Opens Probe Into PwC Audits of BT’s Books
5. Pound on Best Winning Run Since 2015 as Carney Changes Tune
6. European Miners Jump as Iron Ore Gains for a Fifth Day
7. JD Sports Falls After Bloated Expectations, Margin Pressure Seen

In currencies, the USD index is has more selling pressure through the European morning, but with the caveat that USD/JPY continues higher amid rising US Treasury yields. As such, narrowing differentials with Europe and the UK drive trade at the present time, with the backdrop of this week's comments from the ECB's Draghi on reflationary pressures and the BoE Camey's reported considerations over rate hikes driving trade — a little too aggressively perhaps. A broader continuation of the themes seen over the last few days, as stronger central bank speak from the ECB and BoE continue to push the EUR and GBP higher against the USD, JPY and CHF. Focusing on the spot rates, EUR/USD resistance ahead of 1.1450 has contained the resurgence from midweek, and we should see some consolidation closer to 1.1400 ahead of the US data this afternoon.

Core PCE and the last reading of the Q1 GDP stats are due out later today. Cable has continued higher to test the upper level of the 1.2900-1.3000 resistance zone we have been highlighting, pushing just past the figure level by some 6-7 ticks as traders hunt for stops. The highs seen ahead of 1.3050 have been held intact as yet. EUR/GBP is looking resilient to the downside also, and we have some of the familiar month end demand out of Europe filtering through here also.

In commodities, commodity currencies (USDCAD -0.06%, AUDUSD +0.37%, NZDUSD +0.10%) supported by positive crude prices, while a 3% rise in iron ore has also buoyed AUD strength. The fall in the USD index has led to broad based gains seen across the commodity spectrum, but noticeable is the lack of traction in Gold as the risk parameters have counteracted this. The yellow metal is back under USD1250.00, while Silver continues to trade a modest range up and down the USD 16's, but we have seen a stronger impact on base metals and Oil. Copper is now testing USD 2.70, showing a near 1% gain on the day, only outpaced by Tin which is 1.75% up today. Nickel is also around 1.0% higher today. For WTI, USD 45.00 continues to hinder progress, but with production levels having decreased in the US in the DoE report, upside relief has naturally followed. The spread with Brent has widened out a little, but enough to see USD 48.00 tested here.

Looking at the day ahead, we’ll get the third and final revisions to Q1 GDP (no change from +1.2% qoq expected) and Core PCE. The latest weekly initial jobless claims data rounds out the releases. Away from the data, the BoJ’s Hararda is scheduled to speak shortly after this hits your emails while the Fed’s Bullard is scheduled to speak on monetary policy this evening in London at 6pm BST. The recently elected South Korea President Moon Jae-in is also due to meet with President Trump in Washington today. The other big event for markets today is the House of Commons vote on PM May’s government program. The vote is due this afternoon.

US Event Calendar

1. 8:30am: GDP Annualized QoQ, est. 1.2%, prior 1.2%
   1. Personal Consumption, est. 0.6%, prior 0.6%
   2. GDP Price Index, est. 2.2%, prior 2.2%
   3. Core PCE QoQ, est. 2.1%, prior 2.1%

2. 8:30am: Initial Jobless Claims, est. 240,000, prior 241,000; Continuing Claims, est. 1.94m, prior 1.94m
3. 9:45am: Bloomberg Consumer Comfort, prior 49.4

DB's Jim Reid concludes the overnight wrap:
This week has been a busy one for central bank speak too with the steady chorus of voices certainly keeping markets on their toes. After rates had been hit for the biggest sell-off in many months on Tuesday following Draghi’s speech, yesterday appeared to be all about damage control at the ECB. The backtrack started as Europe walked into the office yesterday with ECB Vice-President Constancio telling CNBC that persistence in stimulus is fully justified given the slack that is still in the economy. While markets appeared to largely shrug off the comments it did seem to set the table for headlines to then hit the screens a few hours later. Specifically it was the Bloomberg story saying that the market had “misjudged” Draghi’s speech and that it was instead intended to strike a more balanced tone that put the wheels in motion. A separate Reuters article also quoted ECB “sources” as saying that Draghi had intended to signal tolerance for a period of soft inflation rather than imminent policy tightening. In fairness Draghi’s tone changes on Tuesday were fairly subtle and didn’t suggest that a rate hike was around the corner anyway, rather a steadily improving economy will see policy normalise.

While not to the same extent as Tuesday, markets were quick to re-price however. After 10y Bund yields had edged up another 4bps early the morning, the direction quickly changed after the headlines hit with Bunds rallying as much as 7bps off the highs. That said they did however still finish the day unchanged at 0.366% which means that they are still some 12.5bps higher in yield over the past two days. The periphery did a better job of stemming some of the previous day losses however with 10y yields in Italy, Spain and Portugal finishing 3.0bps, 6.9bps and 8.8bps lower respectively yesterday. Across the pond 10y Treasury yields touched a one-month high of 2.256% intraday below settling to close at 2.228%, albeit sill over 2bps higher on the day.

The headlines left its mark on the Euro too. The single currency built on Tuesday’s rally early on, only to then crash -0.77% as the headlines hit. That proved short lived however with the currency swiftly recovering all of that move and more, breaking through $1.140 this morning for a new 1y high. On this subject it’s worth highlighting that yesterday DB’s George Saravelos made a big change to his EUR/USD call for the rest of the year. While Draghi’s speech was not the fundamental driver behind the change of view, in George’s mind it aptly marks the culmination of a number of developments that have caused him to alter his forecasts. He now expects the pair to rise to 1.160 or above by the end of the year (previous year end forecast was 1.030). He also highlights that – unless an existential Eurozone crisis returns – conditions have fallen into place for this year’s 1.030 low to mark the bottom in the medium term EUR/USD bear market.

Staying with central banks, it wasn’t just the ECB which stole the limelight yesterday. In contrast to his cautious Mansion House speech, BoE Governor Mark Carney said yesterday in Sintra that “some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly become more conventional”. He added that this will be contingent on the extent to which weaker consumption growth is offset by other demand components and also how the UK economy reacts to tighter financial conditions and Brexit negotiations. Those comments sent Sterling surging up +0.87% to $1.2926 and testing the upper bound of the YTD range again. 10y Gilts also finished 6.4bps higher at 1.152% and are now 14.3bps higher in the past two days.

Not to be outdone, the BoC’s Poloz also said that recent rate cuts “have done their job” and that the Bank is considering options “now that the excess capacity is being used up steadily”. The BoJ’s Kuroda was the probably the only central banker not to hint at a more hawkish tone citing caution still about domestic spending and investment. All of those central bank comments almost overshadowed what was a fairly positive day for risk. While the Stoxx 600 closed a smidgen lower (-0.06%) it had traded as low as -1.04% at one stage prior to all the comments hitting. Boosted by a big rally for Banks (+1.93%) the S&P 500 returned +0.88% and in doing so completely reversed Wednesday’s sell off. The Nasdaq finished up +1.43% while credit indices saw similar strong performance.
Another decent day for the commodity complex – which is flying under the radar a bit – certainly helped too. WTI Oil (+1.13%) has quietly gone about rising for the last four days and is approaching $45/bbl again. Gold (+0.17%) also edged higher for the fifth time in the last six sessions while Iron Ore (+4.41%) is now up nearly +17% from the June lows.

That rally for Banks yesterday also came prior to what was a fairly upbeat result from the second round of the Fed’s stress tests. The Fed gave the green light to approve capital plans for all 34 firms with Capital One Financial the lone institution to be singled out for conditional approval based on “material weakness” in planning. After the close JP Morgan, Bank of America, American Express, Citi and Morgan Stanley were among those to announce either buybacks or dividend boosts which saw shares prices for those names rise between 1% and 2%. Those moves have helped US equity index futures creep up +0.22% in the early going while the rest of Asia is also off to a decent start. The Nikkei (+0.54%), Hang Seng (+0.88%), Shanghai Comp (+0.32%), Kospi (+0.66%) and ASX (+1.11%) are all higher as we go to print led by Banks.

Moving on. With central banks being the obvious focus the macro data that was released yesterday was again largely reserved as an afterthought. In fairness there wasn’t any huge surprises to come out of the US data. The advance goods trade balance for May revealed a deficit of $65.9bn which more or less matched expectations. Wholesale inventories rose +0.3% mom in May which was a tenth more than expected while pending home sales for May declined -0.8% mom which was the third consecutive monthly decline.
Closer to home the ECB’s money and credit aggregates data revealed that M3 growth pushed up one-tenth to +5.0% in May. The data also revealed that loans to households rose one-tenth to +2.7% yoy and a new cyclical high. Growth in credit to non-financial corporates held steady at +2.2% yoy. Perhaps the most standout data however was out of France where consumer confidence rose 5pts to 108 (vs. 103 expected), matching the highest level since 2007 with the surge this month coming in the first month of Macron taking office. The other data out yesterday included a bigger than expected jump in the UK Nationwide house price index for June (+1.1% mom vs +0.1% expected) and a softer than expected CPI print from Italy for this month (-0.1% mom vs. +0.1% expected).

Looking at the day ahead, this morning in Europe we’re kicking off in Germany where we’ll receive the July consumer confidence print before attention turns over to the UK with the May money and credit aggregates data. Shortly after that we’ll receive June confidence indicators for the Euro area before we then get the flash CPI report out of Germany(0.0% mom headline print expected). In the US this afternoon we’ll get the third and final revisions to Q1 GDP (no change from +1.2% qoq expected) and Core PCE. The latest weekly initial jobless claims data rounds out the releases. Away from the data, the BoJ’s Hararda is scheduled to speak shortly after this hits your emails while the Fed’s Bullard is scheduled to speak on monetary policy this evening in London at 6pm BST. The recently elected South Korea President Moon Jae-in is also due to meet with President Trump in Washington today. The other big event for markets today is the House of Commons vote on PM May’s government program. The vote is due this afternoon.

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

http://hussmanfunds.com/wmc/wmc170703.htm

July 3, 2017
Mesas, Valleys, Plateaus, and Cliffs

John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Reprint Policy


In the Navajo Oljato-Monument Valley, along the Utah-Arizona border, a set of mesa formations rises up from the desert. These mesas are defined by high plateaus that tower above the ground, with vertical cliffs defining each side.
http://hussmanfunds.com/wmc/wmc170703a.jpg


In recent decades, weve seen the same kind of mesa formations in the equity market; points where historically extreme valuation bubbles temporarily draw S&P 500 10-year returns well above levels that would have been projected on the basis of valuations a decade earlier, with vertical plunges taking returns back to earth as valuations are restored. Modest patterns like that are normal, but at the 2000 valuation extreme, and again today, they have been taken to levels that history will remember as monuments to speculative recklessness.

From the standpoint of market valuations, we know that the autocorrelation profile (the correlation between current valuations and valuations at future dates) tends to hit zero at about 12 years. As a result, reliable valuation measures are typically strongly correlated with actual subsequent market returns over a 12-year horizon, even if they have less impact on market returns during occasional speculative episodes. The chart below illustrates this using the ratio of nonfinancial market capitalization to corporate gross value-added (including estimated foreign revenues), which we find better correlated with actual subsequent S&P 500 total returns than any other indicator. MarketCap/GVA is shown in blue on an inverted log scale. The red line shows actual S&P 500 12-year average annual nominal total returns. Presently, we associate current valuations with prospective S&P 500 12-year returns of roughly zero, coupled with the likelihood of a 50-60% interim market loss.
http://hussmanfunds.com/wmc/wmc170703b.png

Recall that interest rates do not affect the arithmetic here. Now, that doesn't mean that interest rates can't affect valuations. Rather, it means that once a given level of valuations is established, interest rates don't change the arithmetic that maps those valuations to expected future market returns. Given any level of valuations, one can estimate prospective market returns from valuations directly, and then those prospective returns can be compared with interest rates if one wishes to do so. See The Most Broadly Overvalued Moment in Market History for more detail on asset pricing; particularly the form, reliability, and magnitude of the relationship between valuations and interest rates.

One of the reasons investors abandon their attention to valuations at bubble extremes, unfortunately, is that valuations often dont seem to work over shorter horizons. I discussed this issue in the context of our use of market internals in When Valuations Dont Seem To Work. Still, the mapping between valuations and actual subsequent market returns is very tight on a 10-12 year horizon. The exception is when market valuations at the end of a given horizon are at a bubble extreme or a panic trough.

Let's shorten our horizon to 10 years to see the effect of these temporary valuation extremes. Suppose, for example, that valuations begin a 10-year period at a level that has generally been associated with actual subsequent market returns of about 10% annually. But over the following decade, valuations move to the most extreme point in history. Clearly, the actual market returns looking back over that decade are likely to be much greater than 10%. But rather than extrapolating their good luck at that point, investors should actually be braced for trouble, in two forms. One is the potential for a vertical collapse in valuations over the completion of the market cycle at hand, and the other is the likelihood of poor future long-term returns, as measured from the point of overvaluation.

Conversely, suppose that valuations at the end of a given 10-year horizon happen to represent a panic low in the market. In that case, market returns looking back across the recent 10-year period will be much lower than investors would have projected a decade earlier. But rather than extrapolating their bad luck at that point, investors should be prepared for two benefits; one is a rebound in valuations over the completion of the market cycle at hand, and the other is the likelihood of strong future long-term returns, as measured from the point of undervaluation.

The result of all of this is a pattern of mesas in the chart of actual market returns, which are associated with points where valuations were offensively elevated at the end of a 10-year horizon; and valleys in the chart of actual market returns, which are associated with points where valuations reached panic lows at the end of a 10-year horizon. These deviations are brought back into line by dramatic market collapses or advances. The chart below illustrates this regularity. We are at the far edge of a monumental mesa here, but speculators are ignoring the cliff, assuming that they are on a permanently high plateau. The unfortunate aspect of these mesas and valleys is that they encourage backward-looking investors to believe that projected returns based on old valuation measures are no longer relevant, precisely when valuations are most informative about future returns.
http://hussmanfunds.com/wmc/wmc170703c.png

By the way, one should not imagine that the red line will simply run into the blue line in a couple of years without the need for a market loss. Rather, both lines will retain the same profile, and can only be expected to meet (as they regularly have in market cycles across history) following a market collapse on the order of 50-60%. As the chart implies, we do expect S&P 500 total returns to average a loss of just over -2% annually over the coming decade, or about -4% excluding dividends, which would place the S&P 500 about 35% below current levels in 10 years (the decade following 1999 was worse). Assuming roughly 5% nominal economic growth over the coming decade, thats also where historical valuation norms are likely to stand at that point.

Remember that while valuations are the main determinant of market returns over a 10-12 year horizon, and of prospective downside risk over the completion of any market cycle, valuations often have very little to do with market returns over shorter segments of the market cycle. Over shorter horizons, the inclination of investors toward speculation or risk-aversion is more important, which we gauge by the uniformity or divergence of market internals across thousands of individual securities and security-types, and based on measures of market overextension (e.g. overvalued, overbought, overbullish syndromes).

Ive openly addressed my own stumble in the advancing half-cycle since 2009, following my insistence on stress-testing our methods against Depression-era data after a market collapse that we fully anticipated. See Being Wrong in an Interesting Way for that narrative, which describes how that stress-testing effort bared an Achilles Heel to a deranged Federal Reserve, and how we later addressed that issue. It may take a more meaningful portion of a market cycle than an extended, hypervalued top-formation to demonstrate the impact of the adaptations we introduced in 2014 (which strengthen our emphasis on measures of market internals in certain environments), but our challenges in this half-cycle were not due to any shortcoming in our measures of valuation. Indeed, I observed in late-2008 that the market had become undervalued on our measures. The problem during the Depression was that valuations similar to those observed at the 2009 low were followed by a further loss of two-thirds of the market's value. Measures of market internals and other factors were critical in order to prevent deep losses and breakneck whipsaws (hence my stress-testing decision once economic losses moved outside of post-war experience and policy makers abandoned Bagehot's Rule in favor of buying toxic assets outright). Those who believe that our challenges in the recent half-cycle are a license to ignore obscene valuations here are likely to regret their failure to study that narrative more closely.


Investors should understand that unlike much of the advancing period since 2009, our measures of market internals have deteriorated considerably, which now creates vulnerability that extreme valuations will collapse. The immediacy of our concerns would be deferred if these measures were to improve, but well take that evidence as it arrives. In any event, there is ultimately little way to mitigate the obscene valuations we observe at present without a 50-60% collapse in the S&P 500 Index over the completion of the current cycle. Every deferral of this consequence enables further issuance of low-grade securities to yield-starved investors, at risk-premiums that are unlikely to compensate for likely cumulative default risk. Indeed, companies are issuing junk-rated debt more aggressively than at any point in history, including the years just before the global financial crisis.
http://hussmanfunds.com/wmc/wmc170703d.png

With every attempted stick-save to avoid near-term market risk, long-term systemic risk will only become more damaging.
The active rush to be passive

A few final notes on what I continue to view as a generational speculative peak. Ive often described what I call the Iron Law of Valuation: the higher the price investors pay for a given set of expected future cash flows, the lower the long-term investment returns they should expect. As a result, its precisely when past investment returns look most glorious that future investment returns are likely to be most dismal, and vice-versa.

A week ago, our estimate of prospective 12-year nominal total returns on a conventional portfolio mix of 60% S&P 500, 30% Treasury bonds, and 10% Treasury bills fell to just 1.2% annually, the lowest level in history (blue line). The red line in the chart below shows the actual 12-year annual total return realized on that portfolio mix.
http://hussmanfunds.com/wmc/wmc170703e.png

Compressing prospective returns to these depths, and driving prices and market valuations to these extremes, has created a glorious picture in the rear-view mirror. As a result, the level of performance-chasing into passive all-in investment strategies has reached a fever pitch. In the first quarter of this year, Schwab reported a 44% spike in the number of new investment accounts; the highest pace since the 2000 market peak. Given that Schwab serves a large base of financial planners and investment advisors, who in turn manage assets for individual clients, my impression is that this spike is directly related to surging demand for passively managed index funds and low brokerage fees.

As Ive often emphasized, I have no objection to passive investment strategies, provided that those strategies are appropriate to the actual risk-tolerance, temperament, and investment horizon of each investor. Every share of stock that has been issued must be held by someone at every point in time until it is retired, and the most appropriate holders in the next few years will be those who have the risk-tolerance, temperament, and investment horizon to do so. What concerns me is that many investors who are now discovering the merits of passive investment, as they did in 2000 and 2007, appear to dramatically overestimate prospective long-term returns that are likely to follow current valuations, and also appear to wholly rule out the downside risks that have historically come hand-in-hand with extreme valuations over the completion of the market cycle.

If one limits exposure to market risk here, when does one expand that exposure? From our perspective, the strongest market return/risk profiles we identify emerge at the point where a material retreat in valuations is joined by an early improvement in our measures of market action. My label as a permabear is the inadvertent result of my 2009 insistence on stress-testing our methods against Depression-era data, which truncated our late-October 2008 shift to a constructive outlook (after the market had collapsed by more than 40%), and introduced a particular vulnerability in the face of the Federal Reserve's deranged zero-interest rate policies.

Having addressed that vulnerability in 2014, it may be useful to recall that I've encouraged a constructive or aggressive market outlook after every bear market decline in over three decades as a professional investor.

For example, in October 1990, I wrote "With the market nearly 20% off its highs, it is rather easy to say that stocks are in a 'bear market.' However, this type of label is simply a snapshot, and says nothing about future prospects for the market... Investors wishing to wait until the Gulf crisis and budget problems are resolved will have to buy at significantly higher prices. Reestablish a 100%, fully invested position." Several months later, I encouraged a leveraged investment outlook. Similar, though less aggressive shifts followed the 2000-2002 collapse and the market plunge in 2008. As value-conscious investors, bubble valuations have often been challenging for us, and there's no question that the difficult narrative following my 2009 insistence on stress-testing derailed the reputation I had established in previous complete market cycles up to that point. But speculators who insist on dismissing concerns about valuations and market risk because of my own challenges in this half-cycle are likely to learn some very hard lessons of their own in the coming years.
Those lessons are freely available here and now. In my view, investors are kidding themselves if they dismiss the prospect of near-zero 12-year total returns on a diversified mix of stocks, bonds, and cash, or the prospect of a 50-60% interim loss in the S&P 500 over the completion of the current market cycle. A century of evidence suggests that these outcomes do not represent worst-case scenarios, but are instead fairly run-of-the-mill expectations from current valuation extremes. As Ive detailed before, even an extended period of suppressed interest rates is unlikely to change this arithmetic, not least because sustained low interest rates are only likely to endure if nominal economic growth persists well below historical norms.


Last week, Bob Rodriguez, formerly of FPA Capital, observed When the markets finally do break, as they always have historically, ETFs and index funds will be destabilizing influences, because fear will enter the marketplace. A higher percentage of assets will be in indexed funds and ETFs. Investors will hit the sell button. All you have to ask is two words, To whom? To whom do I sell? Index funds and ETFs dont carry any cash reserves. The active managers have been diminished in size, and most of them arent carrying high levels of liquidity for fear of business risk. We are witnessing the development of a perfect storm.


Meanwhile, the increasing popularity of naked put-writing strategies among retail investors is quietly increasing the implicit volume of selling that could accelerate a downturn. These investors typically have no intent to actually purchase the underlying indices in an amount anything close to the notional value of those short put options. So a growing amount of notional value will tend to add to selling pressure during market declines that send those short put options in-the-money. The current popularity of naked put writing strategies relies on the faith that every dip will be bought. Things can get ugly very fast when that faith proves to be unfounded.

In his 1955 book, The Great Crash, economist John Kenneth Galbraith wrote: Of all the mysteries of the stock exchange there is none so impenetrable as why there should be a buyer for everyone who seeks to sell. October 24, 1929 showed that what is mysterious is not inevitable. Often there were no buyers, and only after wide vertical declines could anyone be induced to bid... Repeatedly and in many issues there was a plethora of selling and no buyers at all.

While we find the ratio of MarketCap/GVA, without any modification, to be powerfully correlated with subsequent long-term S&P 500 total returns, its interesting that current valuation extremes are joined by extraordinary complacency among investors, as measured by the CBOE volatility index (VIX, which gauges expected market volatility based on index option prices). Indeed, the willingness of investors to write naked put options is one of the factors that has crushed the VIX below 10% in recent months. One indicator weve seen to capture this dangerous setup is based on the ratio of the S&P 500 P/E to the VIX. The problem is that this indicator is plagued by the same problems as the P/E itself, namely that it is heavily affected by swings in profit margins over time. The chart below shows the ratio of MarketCap/GVA to the VIX. Again, this modification doesnt improve the correlation with long-term returns, but it does illustrate the breathtaking extent to which current valuation extremes have been joined by investor complacency.
http://hussmanfunds.com/wmc/wmc170703f.png

As for profit margins, Ill reiterate that the record high margins weve observed in the recent market cycle have been directly related to the combination of a recovering economy along with wage inflation that fell short of output price inflation due to labor market slack. Put simply, when companies can sell each unit of output at a higher price, relative to the cost of labor embedded in that output, profit margins expand. The chart below illustrates one of our findings in this regard, which is that actual growth in U.S. corporate profits is largely driven by the difference between the growth in economy-wide output prices (measured by the GDP deflator) and unit labor costs (which rise when wage inflation exceeds productivity growth).
http://hussmanfunds.com/wmc/wmc170703g.png

The chart below shows de-trended real unit labor costs versus the level of economy-wide profit margins (for more discussion, see This Time is Not Different, Because This Time is Always Different). The trend has already reversed, yet that reality seems to be entirely overlooked.
http://hussmanfunds.com/wmc/wmc170703h.png

Our concern is not that stocks will decline because of a near-term decline in profit margins (on the whole, the two have very little relationship on a year-over-year basis). The real issue is that earnings-based valuation measures dramatically understate the actual extent of overvaluation here. Thats likely to be a problem not just for investment returns over a 2-3 year horizon, but for investment returns (at least measured from current valuations) on horizons that extend well beyond the coming decade.

The foregoing comments represent the general investment analysis and economic views of the Advisor, and are provided solely for the purpose of information, instruction and discourse. Please see periodic remarks on the Fund Notes and Commentary page for discussion relating specifically to the Hussman Funds and the investment positions of the Funds.
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Prospectuses for the Hussman Strategic Growth Fund, the Hussman Strategic Total Return Fund, the Hussman Strategic International Fund, and the Hussman Strategic Dividend Value Fund, as well as Fund reports and other information, are available by clicking "The Funds" menu button from any page of this website.

Estimates of prospective return and risk for equities, bonds, and other financial markets are forward-looking statements based the analysis and reasonable beliefs of Hussman Strategic Advisors. They are not a guarantee of future performance, and are not indicative of the prospective returns of any of the Hussman Funds. Actual returns may differ substantially from the estimates provided. Estimates of prospective long-term returns for the S&P 500 reflect our standard valuation methodology, focusing on the relationship between current market prices and earnings, dividends and other fundamentals, adjusted for variability over the economic cycle (see for example Investment, Speculation, Valuation, and Tinker Bell, The Likely Range of Market Returns in the Coming Decade and Valuing the S&P 500 Using Forward Operating Earnings ).


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http://traderfeed.blogspot.ca/2017/0...mastering.html

SATURDAY, JULY 01, 2017
Behavioral Techniques for Mastering Your Trading Psychology: Relaxation
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A recent blog post outlined the process of diagnosing the problems that may be leading to drawdowns and poor performance. This post will be part of a series for the forthcoming trading psychology online encyclopedia on the specific approaches and techniques for addressing those problems when psychology is at their root.

Behavioral approaches to the change process involve skills building and especially the formation of new, constructive habit patterns. When we engage in behavioral methods, we are literally teaching ourselves new action patterns: replacing problem patterns with new, effective ones.

The first behavioral method that I have found to be helpful for trading problems is relaxation training. In relaxation training, you teach yourself skills to calm both mind and body. My favorite relaxation exercise is to listen to absorbing music--I find instrumental music preferable to music with lyrics--while controlling the rate and depth of your breathing. You perform this exercise seated in a comfortable position and in a quiet environment, free of distraction. While focusing on the music, you breathe deeply and slowly from the diaphragm, but not in a strained or exaggerated way. If you notice your mind wander, you simply refocus on the music, perhaps following a melody line or beat from a specific instrument. During this time, you stay very still and make your breathing increasingly deep and slow.

It usually takes 15+ minutes for beginners to get themselves "in the zone" with the deep breathing and focus. As you practice (mornings and evenings are great times for practice), you will find yourself quicker and quicker at entering the calm, focused mode. It's not unusual for a trader experienced in relaxation methods to completely center themselves with just a few deep breaths. My experience is that the longer the relaxation session, the deeper the state you can enter. Sticking with the exercise for 30+ minutes can induce a very focused and clear state of awareness.

A variant of this relaxation method is known as "progressive muscle relaxation." In this method, you start at one end of your body (your toes, for example) and--while listening to music and slowing and deepening your breathing--you slowly tense and relax those muscles. So you might curl your toes gradually and tightly and slowly release them. Once you've done that, you work your way up the body, lifting and releasing your feet, then tightening and releasing your calf muscles, etc. Eventually you work your way to your head and tensing and relaxing your brow and forehead. All of this typically takes 15+ minutes.

The progressive muscle relaxation works for two reasons. It calms and focuses you, but it also turns your conscious awareness to your body and away from day-to-day and trading stresses. This "gearshift"--the alteration of your state of consciousness--is common to all the major approaches to counseling and psychotherapy. It's a very important principle: to change a behavior, you first have to shift your state. Learning a new skill in a new state accelerates the process of internalizing that skill.

The key to success with relaxation methods is practice, practice, practice. It's like any skill: mastery comes from repetition.

Relaxation methods are valuable as preventive tools. You can practice getting "in the zone" before you start trading and during breaks in the trading day to ensure that you avoid overconfidence, frustration, and discouragement. It is difficult to get worked up if mind and body are greatly slowed down. Doing the muscle relaxation midday is a great way to get into your body and return to markets in a fresh state.

Relaxation methods are also valuable tools when you catch yourself overtrading or anxious and avoiding opportunities. By temporarily pulling back from the screens, you can center yourself relatively quickly and return to markets far more calm and focused. I often find myself regulating my breathing during trading, thereby sustaining the state practiced in the relaxation exercises.

Relaxation techniques are a first building block for other, more detailed behavioral skills and so they're a great place to start your skills building. For more detail on relaxation and other behavioral methods, you can check out the behavioral chapter in The Daily Trading Coach. In the next post in this series, I will illustrate how relaxation methods can be combined with self-hypnotic suggestion for targeted behavioral change.
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http://www.zerohedge.com/news/2017-0...ops+to+zero%29

THE STRAW THAT WILL BREAK THE CAMELS BACK

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

Only 4 House Republicans Say They Would Support "Clean" Debt-Ceiling Hike
http://www.zerohedge.com/sites/defau.../picture-5.jpg


by Tyler Durden
Jul 3, 2017 7:15 PM



With the CBO warning that the Treasury is on track to run out of cash in less than four months, Republicans are facing a difficult internecine struggle to raise the debt limits as both conservatives and moderates demand riders that stipulate how the money can be spent. And while the Trump administration has sought to play down this conflict, as the Hill reports, support for a clean debt-ceiling hike that is, raising the debt ceiling with no strings attached is dwindling as only a handful of the 16 remaining House Republicans who backed the last clean hike say they would back another. Yet, though Democratic support for a clean bill is far from assured, the Republicans much narrower majority in the Senate increases the likelihood of a clean hike.


Only 16 House Republicans who are currently in office backed the last clean debt hike, and few of them will say they are certain to support it this year. If the debt ceiling is raised with a clean hike a distinct possibility given Democratic demands and the narrow, 52-seat majority for the GOP in the Senate, Republicans will need at least 24 members of their own conference to back a clean debt bill in the House.




That could be a tall order. Only four of the 16 Republicans who voted for the clean debt hike in 2014 suggest they will or are open to doing so this fall.
http://www.zerohedge.com/sites/defau...gGraphic_0.JPG


Even Paul Ryan voted against the last debt-ceiling bill in 2014 when he was Chairman of the House Ways and Means Committee. And in the Senate, every Republican opposed the bill the last time around. Given these odds, the chances of another round of downgrade-inducing gridlock are high and the possibility of raising the US borrowing limit before Congresss August recess, as Treasury Secretary Steven Mnuchin has repeatedly urged, are looking increasingly remote. The problem is compounded by the fact that this is the first time in 11 years that the GOP will be in charge of raising the debt ceiling while controlling both chambers of Congress AND the White House, meaning that the optics surrounding who owns the bill will complicate the voting process.


Furthermore, the Democratic leadership appears to be standing by its policy of obstructionism, unwilling to do President Donald Trump any political favors, according to the Hill.


That political dynamic puts all of the responsibility for raising the debt ceiling on the GOP, and little if any on Democrats. House Minority Leader Nancy Pelosi (D-Calif.) will not want to give slack to vulnerable Republicans who dont want to back the debt ceiling hike for their own partys president.

I dont see Democrats bailing out Republicans, just like Republicans didnt bail out Democrats,said Steve Bell, senior advisor for the Bipartisan Policy Center and a former staff director of the Senate Budget Committee. Theyll say were going to give you the same amount of help you gave us.

In the spring, Pelosi and Senate Minority Leader Chuck Schumer (D-N.Y.) suggested that Democrats could withhold support from a clean debt hike if Republicans separately press for legislation cutting taxes on the wealthy.

They later said that Democrats would back a clean debt hike, but Pelosi will want as many Republicans as possible to support it since their party controls the White House. And the tax talk has given an argument to any liberal who chooses to oppose a debt ceiling hike.
So far, only four of the 16 House Republicans who backed the clean debt ceiling in 2014 suggested they would consider voting for a clean hike far below the 24 votes needed to pass such a bill. They are: Charlie Dent (Pa.), Darrel Issa (Calif.), Peter King (N.Y.) and David Valadao (Calif.).
http://www.zerohedge.com/sites/defau...PaulRyan_0.JPG


Members of the Trump administration have expressed conflicting views on the debt ceiling. Mnuchin supports a clean bill, while Mick Mulvaney, a former House Republican who voted against the last clean debt-ceiling bill, has said there should not be a clean debt hike vote.


Conservative Republicans are already pressing Ryan to tie spending cuts or budgetary reforms to a debt-limit bill, signaling they do not plan on changing their strategy with fellow Republican Donald Trump in the White House. Meanwhile, the official Democratic position is to support a clean bill. If the House could pass a debt ceiling bill that includes provisions backed by conservatives, the Senate would need at least eight Democrats to back it in the Senate to overcome an expected filibuster.


The last time the US infamously shut down due to passing its debt ceiling was in August 2011, when S&P downgraded the US, formerly at a AAA rating, for the first time ever prompting a furious response from then-Treasury secretary Tim Geithner.
http://www.zerohedge.com/sites/defau.../10/debt_0.JPG


Of course, raising the debt ceiling is hardly the only issue where Republicans remain deeply divided. With Congress observing the July 4 holiday, theyre likely to get an earful from governors in the 31 states that expanded Medicaid, who say the Republican plan to repeal and replace Obamacare goes too far, according to the Wall Street Journal. Nine Republicans oppose the legislation in its current form seven more than Senate Majority Leader Mitch McConnell can afford to lose.

Here's WSJ:
Most vocal are governors of states that expanded their Medicaid eligibility under the Affordable Care Act. The bill would phase out that expansion and transform the state-federal safety-net program into one in which the federal governments share would be capped. In all, the bill would cut $772 billion in funding for the program over a decade.

Its a pretty big deal, because in most cases these states have had bitter battles inside the state legislature and [with the] governor about [Medicaid], and its been settled in favor of expansion, said Stewart Verdery, a former GOP Senate aide and founder of Monument Policy Group, a lobbying and public-affairs firm.

For any Republican senator to blow that up from afar is really dicey, Mr. Verdery said.

In Nevada, Republican Sen. Dean Heller, who faces a tough re-election fight next year, appeared with GOP Gov. Brian Sandoval at a news conference recently and said he opposes the health bill. Republican Gov. John Kasich of Ohio has said the bills opioid-addiction measures dont go far enough, and he said he has conveyed his worries to the states GOP senator, Rob Portman. Arkansas Republican Gov. Asa Hutchinson said he has spoken to his states GOP senators, Tom Cotton and John Boozman, almost daily about his concerns with the bill.


And as we noted earlier, Bannon and the populist wing of the Trump administration is considering pushing for higher taxes on the wealthy an issue thats anathema to Republicans. With gridlock remaining the status quo in Washington, the Treasury has already begun holding larger cash balances in anticipation of deadlock, hoping to forestall the inevitable market shock should Congress blow past the CBOs mid-October deadline.
http://www.zerohedge.com/sites/defau...treasury_0.JPG


The Treasury breached its debt limit on March 16, when the debt ceiling was reset to $19.8 trillion, however, so far there has been no new borrowing authority to surpass it. Since then the Treasury has been using so-called extraordinary measures, to pay bills without technically adding to the debt amount However, as Mnuchin has warned, many worry that waiting until the last minute to act on the debt ceiling could provoke a dramatic selloff in US stocks.


Who knows? Maybe the debt-ceiling fight will be the straw that finally breaks the back of our ridiculously overvalued equity market.

http://www.zerohedge.com/news/2017-0...massive-volume
I just bought 200 oz physical silver. What is your opinion about that?

WTF! I just bought today and today was the day for flash crash F****

I don't know I'm gonna give up investing and live like average joe

http://www.zerohedge.com/news/2017-0...ops+to+zero%29

The Silver Flash-Crash - "There's No Such Thing As A Bad Tick"
http://www.zerohedge.com/sites/defau.../picture-5.jpg
by Tyler Durden
Jul 7, 2017 6:05 PM



Authored by Kevin Muir via The Macro Tourist blog,
It’s one of those periods when everything is conspiring against precious metals. For those of the bullish persuasion, this can be a difficult time. I have resorted to wearing my own self-imposed “cone of precious metal trading” in an attempt to stop me from buying too much, too early.



http://www.zerohedge.com/sites/defau...7_macro1_0.png
Let’s review why this environment is so problematic for gold and silver. The main reason is that the global backup in interest rates is about the worst thing you could ask for. Think about it for a second. Central Banks are signaling they want tighter monetary policy because they are worried about future inflation running too hot. They are in essence behaving marginally more prudently. For all those hard money advocates that have been railing against irresponsible Central Banks, they now have less to complain about. Gold has often been called the anti-Central Bank asset, and although many would argue Central Bank policies are still a long way from appropriate, trading is all about the direction of change, and there can be no denying that Central Banks are becoming more hawkish, not the other way round.


Central Banks are sending real rates higher. In the process, they are sucking money out of precious metals, and into short dated fixed income securities. Look at US 5 year TIPs yields - they are pushing to new highs.
http://www.zerohedge.com/sites/defau...7_macro2_0.png
In fact, given the relationship between US 5 year TIPs yields and gold, it looks like our little yellow friend could still be vulnerable to further declines.

Although this global backup in yields is the main factor weighing on precious metal prices, there is another more complicated dynamic at play.

And I think this relationship had something to do with last night’s silver flash crash.
Last night at 6 o’clock, someone wandered into the silver futures pit and sent silver down almost 11% almost instantaneously.
http://www.zerohedge.com/sites/defau...7_macro3_0.png
At first, I thought someone fat fingered it. But when the bounce was weak, it quickly became obvious that no one needed to buy back their error.

We had a saying on our old trading desk - “there is no such thing as a bad tick.” What we meant with that expression was that if the market allowed a seemingly violent tick to occur, it often indicated this was the path of least resistance. Many times that supposedly bad tick would be traded legitimately in the coming sessions.


It is my understanding the CME ruled yesterday’s silver flash crash excessive, and repriced all trades below $15.45 to this more fair price. Well ironically enough, although last night silver bounced back to $16, this morning in the aftermath of the flash crash, silver traded down below last night’s adjusted low, proving once again, there is no such thing as a bad tick.


But this doesn’t explain why someone would choose to sell a whack of silver futures at 6pm.It wasn’t like it was a badly traded 100 lot. More than 6,000 futures traded. Why on earth would anyone need to sell almost half a billion dollars of silver at the most illiquid time of the day?It almost makes me sympathetic to the tinfoil hat wearing precious metal bulls who are convinced governments are nefariously conspiring to keep gold and silver down.

http://www.zerohedge.com/sites/defau...7_macro4_0.png
However, I am an ardent subscriber to the Hanlon’s Razor theory of trading - never attribute to malice that which is adequately explained by stupidity. I don’t think governments are trying to keep precious metals low for some nefarious reason, but I do believe that they are involved.


And the following explanation might move me into the tinfoil hat crowd, but I have watched the strong relationship between the Yen and precious metals for too long to believe it is a coincidence. Somehow, and I am not sure of the exact details, the Japanese government is using precious metals as part of their monetary policy. Now they might be doing it through the Postal Service Pension plan (GPIF) - after all, they have openly admitted to the BoJ buying JGBs from the plan, and the postal service pension investing in foreign stocks with the proceeds. There might be some sort of similar arrangement with precious metals. Who knows? I certainly don’t, but I just don’t believe this tight relationship can be explained by chance:
http://www.zerohedge.com/sites/defau...7_macro5_0.png
I also think that government officials are the only ones price insensitive enough that they are willing to transact monstrous size at 6pm.


But here is the kicker as to why I believe this order somehow emanates out of Tokyo. The 6pm silver flash crash coincided with the opening of the Japanese bond market.


That in of itself is not that insightful. But yesterday with the global rout in bonds pressuring JGBs, the 10 year bond bumped up against the BoJ’s 0.10% ceiling. Don’t forget, whereas most Central Banks engage in quantitative easing where they commit to buying a certain amount of bonds at any price, the BoJ has moved to pegging the long end of the yield curve.


This means they have to theoretically buy an unlimited amount of bonds at that rate to ensure that part of the curve does not go any higher.
http://www.zerohedge.com/sites/defau...7_macro6_0.png
And sure enough, last night the BoJ wandered into the bond market and said, “11 basis points bid for whatever you want to do.”


This obviously sent the Yen lower, after all, this transaction increases the supply of Yen, so it is extremely Yen bearish. But more importantly, it was at this point that silver shit the bed.



Now maybe this is just one of the consequences of this elaborate financially intertwined science experiment of a new global economy. Maybe there was no silver order from Tokyo. Maybe it was just a domino effect.

But I somehow doubt it. Someone still needed to sell 6 thousand contracts. And not only that, they needed to sell them in the stupidest way. And when I am looking for culprits for stupid, Japanese government officials seem like the most likely candidates.
However, putting away my cockamamie theories, I want to point out one important indisputable fact. The BoJ has committed to pegging their 10 year rate to 0%. If the global bond bear market gathers speed to the downside (higher yields), then the Japanese will increasingly find themselves having to defend this peg. As they defend it, this will increase the money supply, which will ultimately be inflationary.

That might force more JGB holders to sell, creating a self reinforcing vicious circle. The Japanese have relinquished control of their money supply. If credit is demanded, they are forced to provide it in unlimited quantities.

Over the short run, this might cause precious metals to go even lower, and stocks might gain as the BoJ’s printed money finds its way into risky assets. Yet eventually this will become a dangerous game to play and I suspect it will prove an unstable equilibrium.

Last night, talking it over with my trader pal Ari Pine, he told me that he thinks a likely candidate for the next flash crash might be the Japanese Yen. I can’t say I disagree. All the ingredients are in place.


Think about buying some volatility in non-equity instruments. Stocks are a sideshow for the real disturbances in the financial system. Central Banks have been suppressing bond volatility for so long, and as the financial system weans itself off the constant quantitative easing of the past decade, there are going to be some large moves. Silver volatility was relatively inexpensive yesterday. Today, after the flash crash, it’s not as cheap. Some day soon, we might be looking back at Yen vol, or US long bond vol, or gold vol after the next flash crash, and be kicking ourselves that we didn’t buy it when we could.

Hello Rocky007

I would hold on to your silver however we do not trade in FREE MARKETS at this moment.

I have stopped posting here mainly because I see no benefits for others. For myself it has been a great experience and once KeepCalmfx gave up for whatever reason then whenever I posted here was to build material for my new corporate website.

Please read the following article since he explains it better than I can...

http://traderfeed.blogspot.ca/2017/0...f-trading.html

SUNDAY, JULY 09, 2017
Reaching the Next Level of Trading Performance
https://3.bp.blogspot.com/-JvAWgvDNG.../NextLevel.jpg
Einstein observed that we cannot solve our problems with the same level of thinking that created them. In other words, problems exist in our deficiencies of perspective. Once we reach a next level of perception, thought, and analysis, problems can give way to solutions. An important contribution of mentors and coaches is to introduce us to next levels of thinking. If we are locked into our old modes of perception and thought, we will be locked into our level of performance.

On Wednesday, July 19th, I'll be speaking at Stock Twits' second ever Futures Forum in New York City. We'll be meeting at Slattery's Midtown Pub and enjoying food and drink--and I'll be presenting key ideas regarding getting to the next levels of trading performance. (Registration information for that free event can be found here).

One very important idea is that almost always we are already performing at that next level of performance on some occasions. It is when we are at our best that we can clearly perceive our next level of development. That is what we are ready for. That is what we are already capable of. At times, we are closer to our goals; at times we are more distant. When we clearly identify what we're doing when we are nearer to our ideas, we start to piece together a roadmap for getting to our next level.

What are you doing well now and how are you doing those things?

Those are some of the most important questions in trading psychology. Our next level of thinking is the thinking we're doing when we're performing at our best.

Further Reading: Building Self-Efficacy
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5 Minute Chart From Finviz - US 30

http://finviz.com/futures_charts.ashx?t=YM&p=m5

5 Minute Chart From Finviz - USD/JPY

http://finviz.com/forex_charts.ashx?t=USDJPY&tf=m5

5 Minute Chart From Finviz - US Dollar Index

http://finviz.com/futures_charts.ashx?t=DX&p=m5

5 Minute Chart From Finviz - EUR/USD

http://finviz.com/futures_charts.ashx?t=6E&p=m5

5 Minute Chart From Finviz - Gold

http://finviz.com/futures_charts.ashx?t=GC&p=m5

5 Minute Chart From Finviz - Silver

http://finviz.com/futures_charts.ashx?t=SI&p=m5

5 Minute Chart From Finviz - 10 Year US Bonds

http://finviz.com/futures_charts.ashx?t=ZN&p=m5

Comments from Benjaminis: Now you can see it is all about RISK ON or RISK OFF and that determines the MONEY FLOW.

1. Post 3,724
2. Cleanup
3. Quote
4. Jun 7, 2017 4:45am | Edited at 5:00am

1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,014 Posts | Online Now

http://traderfeed.blogspot.ca/2017/0...t-markets.html

TUESDAY, JUNE 06, 2017
What Do We Truly Know About Markets?
https://3.bp.blogspot.com/-aGWiAUAeC...edgeWisdom.jpg
Let's do a little exercise.

Here's a question. Please write down your answer to the question before reading on:
WHAT DO YOU KNOW WITH A HIGH DEGREE OF CONFIDENCE ABOUT TRADING/INVESTING THAT DOESN'T REQUIRE ANY STATISTICAL SUPPORT?

Knowledge is what has statistical support; wisdom is what we know to be true from hard-earned life experience. What do you truly know about markets and trading? What wisdom do you draw upon in your best trading and investing?

Once you've written out your answer, please compare your wisdom with the answers offered by a number of thoughtful market participants. This blog post from Abnormal Returns has plenty of insight to inform our trading.

Good trading is grounded in knowledge; great trading reflects wisdom. The best market lessons are also phenomenal life lessons. Your best trading will result from acting on your greatest wisdom.
Further Reading: Life Lessons From The Trading Trenches
Posted by Brett Steenbarger, Ph.D.at 3:13 PM




“The fool doth think he is wise, but the wise man knows himself to be a fool.” ― William Shakespeare, As You Like It


This week is Blogger Wisdom week on Abnormal Returns. As we have done in previous years we asked an esteemed group of independent finance bloggers a series of (hopefully) provocative questions. Answers are not edited and the author’s name, blog name and Twitter handles follow. We hope you enjoy these posts as much as we do putting them together.


Question: What do you know with a high degree of confidence about investing that does not require any statistical support?(Answers in no particular order.)


Wayne Lloyd, Dynamic Hedge, @dynamichedge:
Leverage can be deadly. It doesn’t take a statistician to know that if you bet more than you have, you are dramatically increasing your risk. It’s great on the way up, though!


Barry Ritholtz, Big Picture, @ritholtz, Masters in Business podcast:
I know how little I know: I am aware of the limitations of what I truly know for sure; that I have no idea what the market will do next year or the year after; what sectors are going to outperform, what stocks will still be here in a decade or two; what the Fed will do, where the Dow will be, what GDP looks like. Once we acknowledge what we do and don’t know, it makes the task before us easier, as we are not relying on a false set of premises to build our investments and portfolios upon.


Tom Brakke, the research puzzle, @researchpuzzler:
Performance distorts decision making. Almost always and almost everywhere. Very few investors, including professionals, can avoid the tug of historical numbers when making decisions. (Some are more swayed by long-term numbers and others by what’s happened recently.) The evidence backs up that belief, but you don’t need it to know it’s the way of the world; you can easily observe it.


David Merkel, The Aleph Blog, @alephblog:
We know that stocks represent shares in the ownership of businesses and bonds and loans are promises to pay. If we buy sound investments and hold them, we will make money in the long run at minimum (absent war on your home soil, famine, plague, socialism, etc.)


David Shvartsman, Finance Trends, @financetrends, newsletter:
Top traders and investors work to find strategies that suit their personalities (so they can stick with it) and produce net profits over time. Then there is risk management, which keeps you in the game. Whether you are a chart-based swing trader or a long-term value investor, you must find some way to limit your losses or define your “margin of safety” in order to preserve your capital and secure your ability to take advantage of future opportunities. As the popular Market Wizards book series suggests, there are many paths to trading and investing success. While investing styles can vary wildly, a common thread among the top investors interviewed is a respect for the markets and a defined process for controlling risk.



Ben Carlson, A Wealth of Common Sense, @awealthofcs, author of Organizational Alpha: How to Add Value in Institutional Asset Management:
No matter what anyone tells you, successful investing is hard. No stance in the financial markets is ever easy and no strategy will ever give you 100% confidence in your ability to achieve your financial goals. You can make things simpler or more complex but no matter what you do it’s going to be hard. There are far too many psychological landmines to allow this game to ever be easy.


[Membership] An annual membership helps support Abnormal Returns and gives you access to exclusive e-mails and perks.


Tobias Carlisle, The Acquirer’s Multiple, @greenbackd, co-author of Concentrated Investing: Strategies of the World’s Greatest Concentrated Investors:
Value investing works. Buying something for less than it’s worth increases the value of the buyer’s holdings. I don’t need a backtest to know it makes sense.


Andrew Miller, Miller Financial, @millerak42 , guest blog at blog.alphaarchitect.com:
Investors should minimize or optimize taxes and fees.


Roger Nusbaum, Random Roger, @randomroger:
The stock market goes up most of the time and every so often it goes down a lot and scares the hell out of a lot of people because it is somehow “different” than other past declines. The circumstances for the declines are different but not the market process for handling declines. It goes down a lot, people panic then it stops going down, often for no apparent reason and then it starts to go back up to a new high. The only variable is how long it will take to make that new high. An advisor or investor may or may not be able to add alpha along the way but the simple act of remembering there is nothing new about the market going down a lot along with maintaining a suitable asset allocation and adequate savings rate should be sufficient provided that panic is not succumbed to.


Jonathan Clements, Humble Dollar, @clementsmoney, author of How to Think About Money:
Thanks to investment costs, investors must collectively lag behind the market–and, thanks to skewness, the number who outperform will be far fewer than a normal distribution curve would suggest.


Phil Huber, bps and pieces, @bpsandpieces:
Hindsight is a hell of a drug.


Jesse Felder, The Felder Report, @jessefelder:
Markets and economies move in cycles characterized by mean reversion.


[E-mail] Subscribe to our daily e-mail newsletter to stay up-to-date with all of our posts.


James Osborne, Bason Asset Management, @basonasset:
That most decisions get made with a high degree of confidence without having any statistical support.


Andrew Thrasher, Andrew Thrasher, @andrewthrasher, 2017 Charles H. Dow Award Winner:
The price of a stock is a result of its supply and demand.



Charles Sizemore, Charles Sizemore, @charlessizemore:
Overweighting a position, no matter how good it looks, is almost always a bad idea. For every Warren Buffett that massively overweights a position like Coca-Cola that ends up doing well, there are many more Bill Ackmans that massively overweight a Valeant Pharmaceuticals and have it blow up in their face.


Morgan Housel, Collaborative Fund, @morganhousel:
That relative values are confusing. That compounding is not intuitive. That many people are here for the game more than the outcome. That simple things are too easy for smart people to take seriously. That Michael Batnick is a good writer.


Cullen Roche, Pragmatic Capitalism, @cullenroche:
I know, with increasing certainty, that I know less than I think I do.



Michael Kitces, Nerd’s Eye View, @michaelkitces:
The ongoing march of market efficiency will always be limited by the ability of human beings to behave rationally. Which means that even as most forms of available alpha seem to be shrinking, some level of sustainable alpha – “behavioral” alpha – will remain.

In essence, we can think of market inefficiencies as providing two different types of alpha: informational alpha, available to use who can rationally access and use available information better than peers, but prone to being arbitraged away; and behavioral alpha, available to those who can behave better than peers, and capture the return opportunities created by the behavioral mistakes of others, and more likely to sustain (as long as our brains are wired the way they are). Of course, the caveat is that the behavioral biases that create behavioral alpha opportunities are the same biases that make it hard for any particular investor to capture behavioral alpha in the first place!


Wesley R. Gray, Ph.D., Alpha Architect, @alphaarchitect, co-author of Quantitative Momentum: A Practitioner’s Guide to Building a Momentum-Based Stock Selection System:
Better to be lucky than good.


Ivaylo Ivanov, Market Wisdom and Ivanhoff, @ivanhoff:
Big corrections lead to great buying opportunities. Trends last a lot longer than most expect because different people buy for different reasons and at different stages of a trend. All trends need sceptics; otherwise, there won’t be anyone left to buy. Corrections are relatively rare, but they are fast and furious and most people don’t act the way they think they will act during them.


Robert Seawright, Above the Market, @rpseawright:
I know a lot less than I assume I do.


Jake, EconomPic Data, @econompic:
That investors love stories aligned with their prior views and will look for flaws with any new information that runs counter to these views.


Michael Martin, MartinKronicle, The Michael Martin Show, @martinkronicle:
As an investor and trader it’s clear that market participants will continue to act emotionally around money.Ego can be a much more powerful emotional force than fear or greed. People who are very well educated don’t like being wrong. They are not used to it. Designations and degrees are “perceived as success” around attaining knowledge, but that is not the same as being able to have tactical mastery. Having a big ego around intelligence can keep individuals tied to the whipping post for a lot longer than they have to be. Rule: Your first loss is your best loss. Get out. Learn from your mistakes. You can always get back in at a better time.




Peter Lazaroff, Peter Lazaroff, @peterlazaroff:
You have no control over the market. The implication is that you should spend way less time thinking about the market and worrying about short-term moves.



Robin Powell, The Evidence-Based Investor, @robinjpowell:
Everyone who expresses an opinion about it is in some way conflicted. It’s usually to do with our business model or some other financial incentive; it’s sometimes about personal or professional pride, or trying to justify silly things we’ve said or done in the past. Always ask, Who’s saying this and Why?



Jeffrey Miller, A Dash of Insight, @dashofinsight:
Whatever proposition you make or conclusion you reach can be supported by a carefully-selected chart, some ancient investing wisdom, or advice from a “billionaire fund manager or investor”.


Jeff Carter, Points and Figures, @pointsnfigures:
Markets will take you to the point of emotional breakage. You will get out. Then it will go the way you wanted it to go.



Brett Steenbarger, TraderFeed, @steenbab, author of Trading Psychology 2.0: From Best Practices to Best Processes:
Diversification works. If you can harvest returns from relatively uncorrelated strategies with positive expected value, your return stream will be smoother and more reliable than if you go big on any particular strategy. The way to get big is to get broad. Investors have finite Sharpe ratios and those Sharpes have some degree of variability. Many of the psychological problems that occur among investors and traders are the result of amping up strategies and being unable to tolerate the drawdowns when those strategies hit expectable drawdowns.



Thanks to everyone for their time and effort. Don’t forget to check out Tuesday’s Blogger Wisdom question on what we would learn if we had 1000 years of good financial data.

COMMENTS FROM BENJAMINIS: Of all the GREAT QUOTES THE ONE THAT BEST APPLIES TO MY FOREX TRADING STYLE IS THIS ONE.

"Michael Martin, MartinKronicle, The Michael Martin Show, @martinkronicle:
As an investor and trader it’s clear that market participants will continue to act emotionally around money.Ego can be a much more powerful emotional force than fear or greed. People who are very well educated don’t like being wrong. They are not used to it. Designations and degrees are “perceived as success” around attaining knowledge, but that is not the same as being able to have tactical mastery. Having a big ego around intelligence can keep individuals tied to the whipping post for a lot longer than they have to be. Rule: Your first loss is your best loss. Get out. Learn from your mistakes. You can always get back in at a better time."

Michael Martin, MartinKronicle, The Michael Martin Show, @martinkronicle:

As an investor and trader it’s clear that market participants will continue to act emotionally around money.

Ego can be a much more powerful emotional force than fear or greed.

People who are very well educated don’t like being wrong. They are not used to it.

Designations and degrees are “perceived as success” around attaining knowledge, but that is not the same as being able to have tactical mastery.

Having a big ego around intelligence can keep individuals tied to the whipping post for a lot longer than they have to be.

Rule: Your first loss is your best loss. Get out. Learn from your mistakes. You can always get back in at a better time.

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1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,015 Posts | Online Now

http://theeconomiccollapseblog.com/a...y-selling-them

Central Banks Now Own Stocks And Bonds Worth Trillions – And They Could Crash The Markets By Selling Them
http://theeconomiccollapseblog.com/w...icons/user.gif By Michael Snyder, on June 7th, 2017


http://theeconomiccollapseblog.com/w...in-460x258.jpgHave you ever wondered why stocks just seem to keep going up no matter what happens? For years, financial markets have been behaving in ways that seem to defy any rational explanation, but once you understand the role that central banks have been playing everything begins to make sense. In the aftermath of the great financial crisis of 2008, global central banks began to buy stocks, bonds and other financial assets in very large quantities and they haven’t stopped since. In fact, as you will see below, global central banks are on pace to buy 3.6 trillion dollars worth of stocks and bonds this year alone. At this point, the Swiss National Bank owns more publicly-traded shares of Facebook than Mark Zuckerberg does, and the Bank of Japan is now a top-five owner in 81 different large Japanese firms. These global central banks are shamelessly pumping up global stock markets, but because they now have such vast holdings they could also cause a devastating global stock market crash simply by starting to sell off their portfolios.



Over the years I have often been asked about the “plunge protection team”, but the truth is that global central banks are the real “plunge protection team”. If stocks start surging higher on any particular day for seemingly no reason, it is probably the work of a central bank. Because they can inject billions of dollars into the markets whenever they want, that essentially allows them to “play god” and move the markets in any direction that they please.


But of course what they have done is essentially destroy the marketplace. A “free market” for stocks basically no longer exists because of all this central bank manipulation. I really like how Bruce Wilds made this point…
One indication of just how messed up and flawed the global markets have become is reflected in the way central banks across the world are now buying stocks. This has become a part of their response to correcting the forces of past excesses. Their incursion into this bastion of the free markets signals we have entered the era where true price discovery no longer exists. The central banks are often viewed as price-insensitive buyers, so this incestuous influx of money is in some ways the ultimate distortion.

According to Business Insider, global central banks are on pace to purchase an astounding 3.6 trillion dollars in stocks and bonds in 2017.

Overall, the five largest global central banks now collectively have 14.6 trillion dollars in assets on their balance sheets.



You can call this a lot of things, but it certainly isn’t free market capitalism.


The Swiss National Bank is one of the biggest offenders. During just the first three months of this year, it bought 17 billion dollars worth of U.S. stocks, and that brought the overall total that the Swiss National Bank is currently holding to more than $80 billion.


Have you ever wondered why shares of Apple just seem to keep going up and up and up?

Well, the Swiss National Bank bought almost 4 million shares of Apple during the months of January, February and March.

And as I mentioned above, the Swiss National Bank “now owns more publicly-traded shares in Facebook than Mark Zuckerberg”…

Switzerland’s central bank now owns more publicly-traded shares in Facebook than Mark Zuckerberg, part of a mushrooming stock portfolio that is likely to grow yet further.

The tech giant’s founder and CEO has other ways to control his company: Zuckerberg holds most of his stake in a different class of stock. Nevertheless this example illustrates how the Swiss National Bank has become a multi-billion-dollar equity investor due to its campaign to hold down the Swiss franc.

It is now the world’s eighth-biggest public investor, data from the Official Monetary and Financial Institutions Forum show.

But as shameless as the Swiss National Bank has been, the Bank of Japan is even worse.

Today, the Nikkei is essentially a giant sham. The Bank of Japan regularly goes in and just starts buying up everything in sight, and according to Bloomberg they are on pace to become the largest shareholder in dozens of the most prominent Japanese corporations by the end of 2017…

Already a top-five owner of 81 companies in Japan’s Nikkei 225 Stock Average, the BOJ is on course to become the No. 1 shareholder in 55 of those firms by the end of next year, according to estimates compiled by Bloomberg from the central bank’s exchange-traded fund holdings.

If global central banks have the power to pump up these markets, they also have the power to crash them.
Why would they want to do such a thing?

I can answer that question with just two words…
Donald Trump.


If the Comey angle doesn’t work, the elite could try to destroy Trump by engineering an absolutely devastating stock market crash. Close to half the U.S. population dislikes Trump anyway, and so it would be fairly easy to get them to believe that Trump’s policies have caused a new financial crisis. Of course that would be complete nonsense, but in our society today the truth often doesn’t really matter.


And without a doubt, evidence continues to mount that the real economy is starting to slow down substantially. For example, we just learned that bankruptcies surged once again in May. The following comes from Wolf Richter…
So here we go again. Total US business bankruptcies in May rose 4.7% year-over-year to 3,572 filings, according to the American Bankruptcy Institute. That’s up 40% from May 2015 and up 10% from May 2014.

And there’s another concern: Bankruptcy filings are highly seasonal. They peak in tax season – March or April – and then fall off. The decline in April after the peak in March was within that seasonal pattern. Over the past years, filings dropped in May. But not this year.


Without unprecedented intervention by global central banks, financial markets would have crashed long ago.

And if they keep increasing their purchases of stocks and bonds, the central banks may be able to prop things up for a while longer.

Who knows? Perhaps with enough financial engineering they would be able to keep this bubble going for years.

Of course things would start to get really awkward once they eventually owned virtually everything, but I have a feeling that things will never get that far.

I have a feeling that global central banks will eventually find an excuse to start “unwinding their balance sheets”, and I have a feeling that it will be at a time that is highly inconvenient for President Trump.

https://www.forexfactory.com//dsms0m...ing-caring.png


COMMENTS FROM BENJAMINIS:

For myself when I first wake up and come to my computer and start to read my emails from overnight, when I come across information that best represents the reality of the day I read the article and since December 3, 2016 when I started this thread in advance of putting my material on my corporate website I post it here on my thread.

The article that you have just read perhaps is one of the most enlightening ones that I have read not that I was unaware of the information contained in the article however in light of the importance of today for many reasons the article is very much on topic.

This is what the topics are for today.

(1) The decision by the ECB led by Draghi.

(2) The hearings in the USA concerning James Comey and President Donald John Trump.

(3) The election in Great Britain today.

The results will surely whatever they are have major effects on the valuing of all the Asset Classes in the World.

Since all of us that have any interest in what is happening in our world have heard the term "FAKE NEWS"

Yes we surely live in a FAKE WORLD...

Here is the REALITY OF THE WORLD WE ALL LIVE IN TOGETHER.

When in human history have we had Central Banks of the World buy the Stock Market as this article by Michael Snyder explains FACTUALLY. This is NOT FAKE NEWS.

This clearly explains why MARKETS KEEP DEFYING GRAVITY and continue to go up. Is it any wonder that we have for the moment Winners and Losers ?

The answer is no however it actually is not only about Winners and Losers... It is about the FUTURE of your life.

It is about FOCUS. It is about PRIORITY. It is about HONESTY and INTEGRITY. It is about Human Nature.

So.... We who have any interest in what happens today are first waiting for FAKE NEWS from Draghi although what he has been doing in the name of Europe is REALITY and there is nothing FAKE about his actions. However his actions change REALITY for the time being and cause FALSE PERCEPTIONS to form because of the IGNORANCE out there for whatever reason. The 1% are surely NOT IGNORANT as they are the ones that BENEFIT FINANCIALLY.

Now I turn to the Congressional Hearing starting in the USA at 10:00 AM (Montreal Time) that again will have the Eyes of the World on them. Michael Snyder refers to this as the TRUMP FACTOR....

I will share my realistic opinion on the 45TH President of the USA , Donald John Trump.

I had correctly predicted that he would be elected because I could see what was involving since he first entered the election race as one of 17 Republicans candidates. His main ROLE has been as a DISRUPT-ER.

We can all see 100% however there is nothing that he has not changed. When I say CHANGED, I refer to the STATUS QUO...

Now I move ahead to 5:00 PM Eastern Standard Time or 10:00 PM in London England when we will have the first indications of who will win the Election in Great Britain today.

My closing COMMENTS will hopefully tie everything together for anyone that takes the time to read my Morning Thoughts and UNDERSTAND THEM.

The world started to change first with BREXIT..... That was the beginning of the 1% starting to lose CONTROL of their agenda and we saw the results which complete the circle with a NEW ELECTION on Thursday, June 8, 2017.
There is the hearings concerning the DISRUPT-ER and he has done that with all of the decisions made with his taking input from his family, friends and enemies of which he has many.

The WORLD IS TODAY UPSIDE DOWN and ALL US HUMANS will be shaken out of our cozy little world whether it is running a family business as one of my friends is doing in South Africa or living their lives perhaps AWARE yet just assuming that it will not affect them.

I will be watching and reacting and trading today until the North American Equity Markets close today at 4:00 PM.


Sincerely submitted Benjaminis has learned so much about himself and others and the world by faithfully posting on my thread since December 3, 2016 HOPEFULLY helping TEACH some of you how to improve your Forex Trading and much more importantly your lives.

PLEASE GO WITH THE MONEY FLOW

COMMENTS FROM BENJAMINIS: Let us review what we teach and why it works if YOU WORK.

Without your WORK then you are just wasting your time and probably your money.

There is no such thing as Political Correctness here because we are here to teach and share our knowledge ALL FOR FREE until May 31, 2017 and then if you have subscribed to this thread before May 31, 2017, then you will get a FREE LIFETIME PASS to our company website.

SO.... going back to our winning FORMULA for FOREX SUCCESS.

20% of the SUCCESS is yourself the Forex Trader.

20% of the SUCCESS is your EDGE which we teach you and that is Money Flow Trading.

20% of the SUCCESS is control of your RISK (Your hard earned money) Our UNIQUE RISK MANAGEMENT allows you to trade without worry, fear and greed. Of course we want to make sure that you have the right qualities to be a winning Forex Trader so our course is for a period of three months, so we can teach you the right trading methods and we can see your results and make adjustments without your FEAR OF LOSS of Real Money.


20% of the SUCCESS is using and understanding the USE of Technical Indicators which include not only the common ones. It includes the understanding of Supply and Demand. Support and Resistance and the use of Pivot Points which you can see each day on our daily charts that cover ALL our Trade Plans which we also help you develop and explain WHY. These are our Winning Trade Plans that we review every three months or earlier if circumstances in the markets require that.

20% of the SUCCESS is the FUNDAMENTALS, which are much more than Data Releases each day around the world. It includes reports and articles extremely well researched as you can clearly see from this article that explains why the TREND in the Equity Markets especially in North America is DOWN. By understanding the difference between PERCEPTIONS (MARKETS) and REALITY, you then have a good handle on REALITY before the MASSES do and you are not surprised when events eventually unfold.

In order to be able to help you better it is VERY IMPORTANT that you share your thoughts and your QUESTIONS here on our thread.


Benjaminis

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1. BenjaminIs
2. | Commercial Member | Joined Dec 2014 | 3,017 Posts | Online Now

http://www.learntotradethemarket.com...hs-off-trading

What I Learned After Taking Three Months Off From Trading
By Nial Fuller in Forex Trading Articles |
http://bfbddad795fe6760de935eb7.lttt...dom.jpg?x13614This is an article inspired by a member and close friend of mine. He is someone who has been trading for over a decade and who has struggled with the ups and downs of trading, like so many other traders. Here’s a little background on him: He is a family man, recently unemployed and looking to be his own boss so he can spend more time with his family and have the lifestyle he’s always wanted. After recently losing his job, he was forced to stop trading live and so he went back to demo trading only. He called me up after about three months of demo trading to tell me what he had learned.


When I spoke with him, he recounted a truly inspiring revelation that he had after taking a few months off from live trading and switching back to demo. He told me that after nearly 16 years in the market and trying to ‘figure it out’, he finally had his “Ah Ha” moment where everything he had learned from me and from his own personal experience, finally came together.


I asked him if I could use his experiences to write an article for you guys, because I know many of you are still struggling and are waiting for everything to “click” with your trading. Hopefully, the insight you are about to learn from will help you have your own “Ah Ha” moment so you can finally get on the track to profitable trading…
(The story below is his, I have paraphrased him and edited it a bit, but this is his 1st person account…)
You don’t need to trade a lot to make a lot of money.


I had always been trying to make a lot of money on small accounts. I’d chuck 1k or 2k into a trading account and think I was going to make 100k a year from that by the end of the year. LOL. Looking back, that kind of thinking really does make me laugh.


Perhaps the most impactful lesson that I learned during my three-month absence from live trading, was that I didn’t need to trade a lot to make a lot of money. I was trading a 50K demo account during my absence, and I only took two trades during that time. One trade was buying the GBPUSD which netted me about 6k and the other was buying Gold, which netted me about 25k. So, I made $31,000 in about three months (10k a month) trading only 2 times. I had no losers, just two big winners. I don’t know about you, but I am pretty happy with making $31,000 in 3 months time, for doing virtually no actual ‘work’ other than using my brain.


Now, I don’t have $50,000 real money to trade with, unfortunately. But, that is OK, because I finally realized and experienced the FACT that you don’t have to trade a lot to make a lot of money! Where have you heard this before?! Probably from the same person I did … Nial Fuller.


How many articles have you read of Nial’s where he talks about low-frequency trading or that over-trading is the death of most traders’ accounts? There’s a reason for this, it’s very, very true! You don’t realize it when you’re caught up trying to make ‘a lot of money’ on a tiny account. You get caught up over-trading and forcing trades, rather than letting trades come to you.


Trading strategy and mastering it, matters, a lot.


During my three-month demo trading odyssey, I was primarily looking to trade pull backs, something Nial teaches and strongly emphasizes in his trading course, something I’ve learned from him primarily, yet I never really put into practice quite right.


The thing about pull backs, I finally realized, is that you basically have to buy a market when it’s down and sell a market when it’s up…both are very hard to do and counter-intuitive to do in the moment. It’s easy to understand but hard to put into motion.


When a market is moving higher, you feel like you want to buy it, and vice versa when it’s moving lower. The KEY is to look at the context of the chart; is the market simply retracing higher within a downtrend? If that is the case, then you should be looking to sell on that up-swing, even though you may not feel like you want to! Sell when a market is up and buy when it’s down.


Most of the time, you should be doing nothing in the market

It’s hard to not care or think about your trades on a real account, but on a demo account, you truly just don’t think about the trades as much, and most of the time, this works to your advantage in dramatic fashion.


I literally didn’t even look at my Gold trade until I was already up $19,000 dollars on it. Had that trade been real, I probably would have already sabotaged it and been out with a tiny profit or a loss by that point.


The point is, we need to detach from the markets more, especially after we enter trades.

Set the trade up, do your due diligence, make sure it meets your criteria and trading plan or strategy, set the stop loss (at least) and possibly target, and just forget about the damn thing for a few days at least! It took me YEARS, actually DECADES to be able to do this! Don’t let this be you!



Bottom-line is; Not looking at your trades once you enter them is probably the single greatest thing you can do to make money as a trader. We are swing trading, not day-trading. Remember that!


Bankroll matters.


In a recent article of Nial Fuller’s, he discussed some things he would say to his former trading self from his current trading self, having gained over a decade and a half of experience. One of the things that hit me the most was how he learned he needed his bankroll to survive in the markets. It seems obvious on the surface, but so many of us trade as if our bankroll doesn’t matter. Then, when a good trade finally comes along, we have little or no money left to take advantage of it.


This point was driven home for me during my three months of demo trading. First off, having a 50k account to start with certainly made things easier, as far as keeping my bankroll intact. That said, I also realized that even though I had 50k to trade with, I could simply crank up the risk if I wanted to, and potentially lose a lot of money very fast.

So, yes, account size has advantages, but if you don’t know how to preserve your trading capital, the size of your account is irrelevant. Therefore, Nial is always saying that if you can trade successfully on a small account you can do it on a big account too. So, don’t worry if you have a small account and can’t trade the size you want; work on the mechanics, on the process and then you will be able to use that same approach as your account grows or if you find an investor.


Don’t be in a trade just to be in a trade.

This was a lesson that really hit me after switching back to demo trading for a few months. It was apparent that much of my struggles with live trading were because I simply felt an urge to be in the market nearly all the time.

It was almost like a guilty pleasure; something I knew was wrong but it felt good so I did it anyways. Of course, it felt good until I lost money, which is the inevitable outcome of most trades taken for this reason.


After my demo trading success, I realized that I only had taken a handful of trades over three months, and those trades led to large gains. So, not only was I trading far less, I also made far more money, there is indeed a connection and I believe in this case correlation does indicate causation!


Patience is what makes you money, but patience is not easy.


Being patient while trading a demo account seems to be far easier than being patient on a live account. This is typically because when you’re trading demo you simply ‘don’t care’ as much as when you’re trading live, since there’s no real money on the line. When people go from a big 50k demo account to a small real account, they feel an urge to build up that real account fast, so they can trade the big size they were on the 50k demo. But, this simply leads them to over-trade and over-leverage and blow out their accounts. For this reason, it’s probably a good idea to open your demo account with the same amount of money or close to the same as what you will trade with live.


Failure eventually became success
Finally, after many years of failing as a trader, I realized that the reasons I was failing were things I had the ability to fix. Here is how I fixed it:

 

1. I wrote down in detail, everything I was doing differently as I traded my demo account. This included how I was feeling as I analyzed the market each day, how I felt as I set up a trade, how I felt as I did nothing and let the trade play out, the actual setups I took and how I managed them, etc. This was basically a trading journal, and I suggest every trader creates one. It doesn’t have to be anything fancy, so don’t over-think it. You can just record your thoughts in a Word document or even write them in a notebook. Just make a record or journal of your trades and your thoughts and feelings each day as you interact with the market in any way, shape or form.
2. I stopped being in a rush to make money. My demo trading success made me realize that the underlying issue behind why I was losing on my real account and why most traders lose, is simply due to being in a rush to make money. Trading is so difficult because psychologically, the more you want and try to make money from the market, the less likely you are to do so. People do well on demo accounts because their brain and the hormones it produces lead to the type of interaction and behavior in the market that results in profits. On live accounts, it’s typically the opposite. The reason why is because on a live account, people are in rush to make money, whilst on a demo account, they are just thinking of it as a ‘game’, since there’s no money involved.
3. So, really, if I could sum up what I learned from my success on a demo account for 3 months, it’s to simply treat your live trading account as if it’s game, and you are playing to win the game, not to make money! Making money is simply a byproduct of playing the game well enough to win.

I could not have done any of this nor would I have had these dramatic realizations had I not started studying the trading ideas and philosophies taught by Nial Fuller on his blog and in his courses. I know that probably sounds cliché to some of you, but it’s true.

The main ideas Nial teaches sound simple and effective, and they truly are, but it is our own flaws and emotional miscues that make them so hard to follow. If you are having trouble with your live account, I would suggest going back to a practice account and start studying Nial’s teachings, until you finally have your own “Ah Ha” moment.


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COMMENTS FROM BENJAMINIS: This is not my course however Nial is one of the best Forex traders and teacher's and since this promotion that I link here does have similarity's with what I teach over 3 months using a $50,000 US Funds Demo Trading Account...