Money Flow Trading Method along with Risk Management

February 25, 2019
The Fed's #2 Just Made a Truly Startling Confession
The Fed is truly terrified of what’s coming.

Last Friday, a number of Fed officials gave speeches at prominent Central Banking conferences.

The contents of these speeches reveal a degree of terror that runs completely counter to what is happening in the markets today. To look at the surface of things, the stock market has surged over 18% in the last eight weeks and is now less than 5% of its all-time highs.
https://ecp.yusercontent.com/mail?url=https%3A%2F%2Fd1yoaun8syyxxt.cloudfront.net%2Fphoenixcapital-3ef08717-c919-4171-9722-6176cc945594-v2&t=1551101888&ymreqid=373f7ea2-357a-6177-1ce6-950006016900&sig=xfD1tDua1XyOlUxLC6ZlIQ--~C



Meanwhile, the Volatility Index, or VIX has broken below 15 and is close to erasing ALL of the spike that was induced by the October- December sell-off.
https://ecp.yusercontent.com/mail?ur...xqwE_3hyyQ--~C


Against this backdrop of market calm, the Vice Chair of the Fed, Richard Clarida (he’s also the Fed’s highest ranking economist and the primary advisor to the Fed Chair, Jerome Powell) stated that the Fed might consider introducing new easing tools in the future, including policies that the Fed had previously rejected as being too extreme.


We are talking about:
1) Targeting bond yields, much as the Bank of Japan has done.
2) Potentially buying stock directly via futures, index funds, and ETFs.
3) Negative Interest Rate Policy
And more.
Let me ask you… if everything is going well, and the financial system is stable, why is the Fed’s #2 guy talking about potentially introducing policies that are so extreme, the Fed previously rejected them when dealing with the 2008 crisis?


The answer is simple… the Fed knows that another crisis is at our doorstep and that when it hits, the Fed will be forced to engage in even more extreme policies than it did in 2008 to hold the system together.

In chart form, the Fed knows that in December we came DARN close to breaking the bull market from the 2009 low. And it knows that once that line goes it’s nothing but a massive air pocket to below.
https://ecp.yusercontent.com/mail?ur...O7hKKbw25A--~C


Put simply, a Crash is coming... and the Fed is preparing for it now.

You should too...
With that in mind, I’m actively preparing clients of my weekly trading service Private Wealth Advisory with our proprietary CRASH trades to profit from the coming market collapse.

As I write this they are all EXPLODING HIGHER.

To find out what they are, all you need to do is take out a 30-day $9.99 trial to Private Wealth Advisory.
During those 30 days you’ll receive:
1) A copy of my bestselling book, The Everything Bubble: The Endgame For Central Bank Policy.
2) Four issues of Private Wealth Advisory featuring my big picture analysis of the global economy and markets as well as…
3) At least THREE trade ideas (by the way, we’re running an72% WIN rate on closed positions since 2015, meaning we’ve made money on more than SEVEN out of every 10 positions we’ve closed).
4) A copy of our Special Report The Great Global Wealth Graboutlining how to protect your wealth from the coming wealth taxes/wealth grabs.
All of this for just $9.99.


However, I have to warn you that space on this newsletter is EXTREMELY limited. A big reason we’ve maintained the track record we have is because we don’t have thousands of investors following our trades…

Which is why this offer will expire tonight at midnight. And as I write this, we’ve only got a handful of spaces available.
To lock in one of the remaining spaces…

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Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research

https://larouchepac.com/20190225/bri...0North%20Korea


World Land-Bridge
New International Economic Order
London-Saudi Global Terror
Stop WWIII
The British Empire Is Deployed To Stop Potential Major Advances by Trump with China and North Korea
https://larouchepac.com/sites/defaul...?itok=oDsEO1jU
Presidents Trump and Kim shaking hands in the summit room during the 2018 Singapore Summit. June, 2018


It's a predictably familiar pattern: On the eve of major potential progress by President Donald Trump in his policies of building good relations with China and Russia, and ending the Bush-Obama era of perpetual wars, the British Empire and its assets inside the United States orchestrate some sort of a provocation to slam Trump, to change the strategic agenda, and/or to hornswoggle him into backing their suicidal policies.


On April 6, 2017, the very day Trump was holding his historic summit with Chinese President Xi Jinping in Mar-a-Lago, Florida, Trump was fed lies to convince him to support an American military strike inside Syria—albeit one that was far less serious than what the British would have liked. It was designed to torpedo U.S.-Chinese relations altogether, but it did not achieve that result.


On July 16, 2018, just as Trump was set to meet with Russian President Vladimir Putin in Helsinki, Special Counsel Robert Mueller tried to scuttle the summit by indicting a dozen Russian individuals and companies as part of his so-called "Russia collusion probe." Again the gambit failed to stop the summit, although serious damage was done to U.S.-Russian relations.


And now, with the U.S.-China trade talks making progress and being extended beyond the March 1 deadline by President Trump, with the prospect of a broad deal to be agreed to by Trump and Xi personally in the near future; and on the eve of Trump's second summit with North Korea's leader Kim Jong-un scheduled for Feb. 27-28 in Hanoi, the British are at it with impeccable timing. Mueller is grandstanding yet again with a sentencing report in the Manafort case, and former Trump lawyer Michael Cohen is scheduled to testify before open committee hearings in Congress on Feb. 27, at exactly the moment Trump will be meeting with Kim. And most seriously, the orchestrated Venezuela crisis is heading towards serious violence and a possible foreign invasion and coup d'état as early as this week—with the unfortunate repeated public backing of this policy by Trump himself—just as Secretary of State Mike Pompeo heads to Colombia to meet with "Interim President" Juan Guaidó on Feb. 25.


And hanging over all of these strategic developments like the darkest of dark clouds, is the danger of a global showdown of the West with Russia, accelerated by the U.S. withdrawal from the INF Treaty, and reflected in the sobering remarks by President Putin in his Feb. 20 address to the Russian Federal Assembly.

None of these British provocations and policies can be defeated piecemeal. To have productive U.S.-China relations, the U.S. has to join China's Belt and Road Initiative to forge a New Bretton Woods system. To stop the perennial regime-change wars, British geopolitics as practice and philosophy must be replaced by Cusa's invention of the sovereign nation-state and the Westphalian system. To be rid of the danger of thermonuclear annihilation, a Four Power cooperative agreement of Mutually Assured Survival, not Mutually Assured Destruction, needs to be promptly put in place.

In fact, all of these issues and crises, and the international chaos and cultural despair they have unleashed, can only be turned around with a global Renaissance based on a concept of Man as a uniquely creative species—which is the heart and soul of the New Paradigm which Lyndon LaRouche spent his entire life bringing into existence.

It is to that end that we rededicate ourselves to achieving the exoneration of Lyndon LaRouche, and to honoring the memory of his continuing achievements, as was done in an hour-long tribute to LaRouche broadcast on Dominican Republic cable TV on Feb. 23.

Justice for the man means justice for his ideas.

Monday, February 25, 2019
Lead
US Presidency

https://seekingalpha.com/article/424...-daily-excuses

so today was RISK ON!!!!!! correct??

Benjamin, during RISK ON, do not you trade forex currencies?? Just for my curiosity

We have established that the trend is down for Dow 30 and SP500 so we do not trade when the markets are moving up on RISK ON.

Sometimes when we see it reversing as it did today then we can still trade by shorting it as it heads down.

Is that clear ?

The only currency we trade now is USD/JPY so since it is a safe haven trade we do not trade it as we have RISK ON and the markets have money flowing into equities.


Benjamin

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Update: As Theresa May scrambles to avoid driving the UK off the 'no deal' Brexit cliff, rumblings that surfaced over the weekend about her possibly endorsing a "Brexit Day" delay have reportedly morphed into actions. According to Bloomberg, May will call a cabinet meeting for 9:30 am on Tuesday to discuss endorsing a plan to delay Brexit.


After the meeting, May would update Parliament around 12:30 pm GMT about the results of the discussion. If there's sufficient support for a delay, the government would call a vote on Wednesday night.

May's reversal on an idea that she has long resisted is likely a ploy to stop some 20 pro-remain Tories from rebelling and joining with Labour MPs to back an amendment to demand a delay. However, by endorsing a delay, May also risks provoking a destabilizing backlash from members of the eurosceptic ERG.
To be sure, regardless of the vote, the EU27 would still need to sign off on a delay.

The pound rallied on the news as the concessions from May and Corbyn revived hopes that Brexit might be put off indefinitely.

Regardless of the result, if May goes ahead with the meeting, it would represent a major capitulation from May, who has steadfastly insisted for two years now that the UK would leave the EU on time.

* * *

Still reeling form the defections of nine of his MPs, embattled Labour Leader Jeremy Corbyn said Monday that he would support a second referendum on whether the UK should abandon the European Union, offering a concession to Europhile MPs in his own party has a seeks to quell an outright rebellion.

Corbyn said Labour would table an amendment this week calling for another referendum (though the likelihood of it being brought to a vote remains unclear, being up to the discretion of House Speaker John Bercow).
https://zh-prod-1cc738ca-7d3b-4a72-b...13.53%20PM.png
While the prospect of Parliament authorizing another vote remains unlikely, Corbyn's support could embolden pro-European MPs in both parties to push harder for a delay of "Brexit Day", something that Prime Minister Theresa May is desperately trying to avoid.

And though Corbyn said that he would support the referendum vote to avoid a "damaging Tory Brexit" and accused May of "recklessly running down the clock" to force the adoption of a "botched deal", Corbyn's decision to embrace another referendum vote - something he has long opposed - was widely interpreted as self-serving, as the New York Times reported, because Corbyn had been warned that he might face another round of resignations if he didn't support the referendum.

After the resignations of nine Labour Party members last week, and amid the prospect of more, the party’s leader, Jeremy Corbyn, dropped his longstanding resistance to a second vote on leaving the bloc.

Getting an amendment for a new vote through Parliament any time soon is unlikely, but Mr. Corbyn’s support for one will cheer pro-European Britons, who have been fighting to reverse the outcome of the 2016 referendum decision. Without the support of Labour, there is no chance of a second referendum ever being authorized by lawmakers.

Supporters of a second vote argue that, given the current Brexit deadlock, it would be fair and totally respectful of those who voted "leave" in the 2016 referendum to put the choice to the people again now that they have seen what a fumbling mess the negotiations over a managed withdrawal have become, as RT pointed out. If another referendum should be called, Labour would campaign for "remain."

Meanwhile, Theresa May, who on Sunday promised to call a vote on her "Plan B" Brexit deal by March 12, is reportedly weighing some concessions of her own.

If anything, this concession by the notoriously eurosceptic Corbyn proves one thing: That May isn't the only leader struggling to get her arms around a burgeoning mutiny as talks with the EU yield little progress and the days left until Brexit Day dwindle.

5 Minute Chart GBP/USD

https://finviz.com/forex_charts.ashx?t=GBPUSD&tf=m5

World News

https://finviz.com/news.ashx?v=2

World Futures

https://finviz.com/futures.ashx

Forex Prices

https://finviz.com/forex.ashx

Cryptocurrency Prices

https://finviz.com/crypto.ashx

Bond & Notes Charts

https://finviz.com/futures_charts.ashx?t=BONDS&p=d1

Charts 10 Year Notes

https://finviz.com/futures_charts.ashx?t=ZN&p=d1

Charts 5 Year Notes

https://finviz.com/futures_charts.ashx?t=ZF&p=d1

Charts GOLD

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

Charts DJIA DOW 30

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

Charts 2 Year Notes

https://finviz.com/futures_charts.ashx?t=ZT&p=d1

Charts USD

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

Charts Euro EUR/USD

https://finviz.com/forex_charts.ashx?t=EURUSD&tf=m5

Charts British Pound GBP/USD

https://finviz.com/forex_charts.ashx?t=GBPUSD&tf=m5

Charts YEN USD/JPY

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


Benjamin

https://www.zerohedge.com/news/2019-...ops+to+zero%29

Satirically authored by CJ Hopkins via The Unz Review,
So here it is, the announcement we’ve been waiting for.. all aboard for another cruise on the new and improved U.S.S. Magic Socialist with your captain Bernie Sanders at the helm! If you’re not familiar with this extraordinary vessel, it’s like the luxury liner in The Magic Christian, except catering to credulous American socialists instead of the British filthy rich. Tickets start at just $27 dollars … so hurry, because they’re going fast!
https://zh-prod-1cc738ca-7d3b-4a72-b...0%281%29_0.jpg


That’s right, folks, Bernie is back, and this time it’s not just a sadistic prank where he gets you all fired up about his fake “revolution” for fifteen months, gets cheated out of the nomination, then backs whichever corporate-bought candidate the Democratic Party orders you to vote for.

No, this time the Bernster really means it! This time, when the DNC rigs the primaries to hand the nomination to Harris, or Biden, or some billionaire android like Michael Bloomberg, Bernie is not going to break your heart by refusing to run as an independent candidate, unbeholden to the corporations and oligarchs that own both political parties, or otherwise make you feel like a sucker for buying his “revolution” schtick. He’s not going to fold like a fifty dollar suit and start parroting whatever propaganda the corporate media will be prodigiously spewing to convince you the Russians and Nazis are coming unless you vote for the empire’s pre-annointed puppet!

Bernie would never dream of doing that … or at least he’d never dream of doing that twice.

There are limits, after all, to people’s gullibility. It’s not like you can just run the same con, with the same fake message and the same fake messiah, over and over, and expect folks to fall for it. If you could, well, that would be extremely depressing. That would mean you could get folks to believe almost anything, or that we were stuck in some eternally recurring multi-dimensional reality loop. The next year and a half in American politics would play out like one of those Groundhog Day knock offs meets The Magic Christian meets The Usual Suspects, directed by David Lynch, on acid. We’d be barraged by recycled Feel-the-Bern memes. Hacky sack shares would go through the roof. That creepy little bird would come fluttering back, land on Bernie’s podium again, and chirp out “L’Internationale.” People would start booking Tim Robbins for interviews. Ben & Jerry’s would roll out another revolutionary flavor of Bernie ice cream … and in the end it would all amount to nothing.


But that’s not going to happen this time. No, this time, the U.S.S. Magic Socialist is setting sail straight for Socialismland! This time, it’s really the Revolution! The end of global capitalism! And the best part of the whole deal is, you don’t even have to take up arms, stage a series of wildcat strikes, blockade major highways, occupy airports, or otherwise cripple the U.S. economy … all you have to do is vote for Bernie!

See, that’s the magic of electoral politics! The global capitalist ruling establishment, despite the fact that they own the banks and the corporations that own the government that owns the military and intelligence services, and despite the fact that they own the media, and all essential industries, and channels of trade, and are relentlessly restructuring the entire planet (which they rule with almost total impunity) to conform to their soulless neoliberal ideology, and are more than happy to unleash their militarized goons on anyone who gets in their way … despite all that, if we elect Bernie president, they will have no choice but to peacefully surrender, and transform America into a socialist wonderland!

Sure, they won’t be happy about it, but they will have no choice but to go along with whatever Bernie and his followers want, because that’s how American democracy works! We’ve seen it in action these last two years, since Donald Trump got elected president. The establishment wasn’t too thrilled about that, but they had to put aside their own selfish interests and respect the will of the American people … because imagine what might have happened if they hadn’t!

For example, they might have concocted a story about Trump being a Russian intelligence asset who was personally conspiring with Vladimir Putin to destroy the fabric of Western democracy so that Russia could take over the entire planet. They could have had respected newspapers like The New York Times and The Washington Post and television networks like CNN and MSNBC disseminate this story, and subtly reinforce it in endless variations, on a daily basis for over two years.

They could have appointed a special prosecutor to investigate the facts of their made-up story, and indict a bunch of unextraditable Russians and a handful of inveterate D.C. slimebags to make the whole thing look legitimate. At the same time, they could have had the media warn everybody, over and over, that Trump, in addition to being a traitor, was also the second coming of Hitler, and was on the verge of torching the Capitol, declaring himself Führer, and rounding up the Jews.

They could have generated so much mass hysteria and Putin-Nazi paranoia that liberals would literally be seeing Russians and Nazis coming out of the woodwork!
Fortunately, the global capitalist establishment, out of respect for democracy and the American people, decided not to go that route. If Americans chose to elect a jabbering imbecile president, that was their right, and far be it from the empire to interfere. Tempting as it must have been to use all their power to demonize Trump in order to teach the world what happens when you get elected president without their permission, they restrained themselves … and thank God for that! I don’t even want to contemplate the extent of the rage and cynicism they would have fomented among the public by doing those things I just outlined above. That might have left people with the false impression that their votes mean absolutely nothing, and that the entire American electoral system is just a simulation of democracy, and in reality they are living in a neo-feudalist, de facto global capitalist empire administrated by omnicidal money-worshipping human parasites that won’t be satisfied until they’ve remade the whole of creation in their nihilistic image.

Thankfully, the ruling classes spared us all that, so now we can hop aboard the Magic Socialist and take another cruise with Cap’n Bernie! Considering how magnanimous they’ve been with Trump, once Bernie wins the election fair and square, the empire clearly won’t have any problems with him nationalizing the American healthcare system, tripling taxes on the super-rich, subsidizing university education, and all that other cool socialism stuff (i.e., the stuff we mostly still have here in Europe, along with some semblance of cultural solidarity, although the global capitalists are working to fix that).

Oh, yeah, and in case you’re worried about Bernie backing the empire’s ongoing regime change op in Venezuela, don’t be. He’s just playing 4D chess, like Obama did throughout his presidency, by pretending to do the empire’s bidding while he actually went about the business of resurrecting hope and eradicating racism. Bernie’s just being sly like that! It might seem like he’s aligning himself with mass murdering thugs like Elliot Abrams and sadistic ass freaks like Marco Rubio, but he isn’t. Not really. It’s just an act. I mean, he has to get elected, doesn’t he?

How else are we going to get to Socialismland?

http://traderfeed.blogspot.com/2019/...oblems-in.html

SUNDAY, FEBRUARY 24, 2019
Primary and Secondary Problems in Trading
https://2.bp.blogspot.com/-I6SrHwFQN...0/Thinking.jpg
In this post, we'll explore a very important concept: the difference between primary and secondary psychological challenges and why that difference makes an important difference in our trading.

A good place to start would be anxiety. Suppose we experience panic symptoms where, out of the clear blue, we suddenly feel very high levels of anxiety. Panic can be very scary for people because the anxiety seemingly makes no sense. We can be resting in bed or walking on a street and suddenly experience overwhelming feelings of dread and fear.

Panic disorder would be considered a primary problem in our example. It's treatable with cognitive-behavioral therapy and medication in a relatively short period of time.

Let's say, however, that we become so afraid of our panic symptoms that we stop doing normal activities. The last time we had a meltdown was in a shopping mall, so now we'll avoid groups of people or public places. Maybe the panic attacks have been when I've been alone, so now I try to avoid situations where I'm by myself. Or maybe I feel as though I'm going crazy--there's something wrong with me--so I lose confidence in developing relationships and begin to feel lonely and depressed.

All of these are examples of secondary problems. The fear of open places (agoraphobia) or the depressed feelings are the result of how I respond to the primary problem. How I think and react to my problem can create entirely new problems. That can make our situations seem quite complicated.

As Shakespeare's quote suggests, how we think about things creates our reality. If we respond negatively to a primary problem, the odds are good we'll create a new, secondary problem.

Let's take an example from the trading world:

A young man I worked with was losing money in trading, largely by trading too often, sizing individual trades too large, and taking trades when not much was going on in the market. As his losses mounted, he became frustrated and discouraged and stopped putting as much time and effort into his preparation. His frustration spilled over to his relationship with his girlfriend and they were now talking about splitting up. Nothing seemed to be going right in his life. He was feeling pretty down when I met with him. In fact, he had met with a trading mentor/coach, who encouraged him to calm himself, trade more patiently, and stick to his trading plans, but none of that seemed to help.

It turns out that the young trader's primary problem was attention deficit disorder (ADD). The very thing that attracted him to markets--the stimulation and risk-taking--was the thing that got in the way of his staying focused in his trading. The lack of focus led to impulsive trades and eventual losses, which then created secondary problems in his relationship and in his mood.

The trader addressed the primary problem through medication and with biofeedback exercises that train the mind for focus and this enabled him to trade in a disciplined manner. He began to make money, felt better about his situation, and addressed the problems with his girlfriend by helping her understand what had been going on for him. We worked on alternate ways of dealing with frustration, including ways of constructively engaging the relationship during times when trading didn't go well. Had we not addressed the primary problem, however, no amount of "trading psychology" advice or techniques would have helped him.

Very often, what look like primary problems in trading--such as loss of discipline--are in fact secondary consequences of other, less recognized difficulties. How we think about the actual primary problems creates the negativity and frustration that leads to the secondary overtrading, FOMO, etc. The challenge facing us is to identify the problem underneath our poor trading.

I recently suggested that a major primary problem affecting traders is using trading to meet psychological needs for which trading was never designed. If we come to markets with self-esteem concerns; unmet needs for recognition; an inner sense of failure from previous efforts at achievement; or a lack of excitement and purpose in life, those primary problems will burden our attempts at trading with an open mind. "It is amazing how much easier it is to tackle trading challenges, " I wrote, "when trading is not burdened with needs it was never meant to fill."

Take it to the bank: people who trade out of unmet needs need to trade.

That is a common primary problem, and one that deserves priority.
Further Reading:

The Role of Spirituality in Trading


WEDNESDAY, OCTOBER 24, 2018
The Role of Spirituality in Trading
https://3.bp.blogspot.com/-Gq8ZpEPeR...irituality.jpg
I have been pleasantly surprised by the initial interest traders have expressed in the book I am writing on spirituality and trading.

The key idea is that many trading problems spring from our failure to transcend the ego. We identify with winning/losing, with overall P/L numbers, with being right or wrong in our ideas, and all of these identifications lead us to overreact to markets.

The world's great spiritual disciplines are tool kits for moving beyond our egos by connecting with larger realities. The purpose of the book I'm writing is to acquaint traders with these tool kits and their potential for improving not only trading, but all of life.

One spiritual perspective is that all of our problems recur until we learn from them. Life is a classroom and the problems we face repeatedly are the lessons we're meant to learn.

What are your trading problems, and what are they trying to teach you?

Your problems are your curriculum. Only when we embrace our problems do we learn from them and become more than we are.
Further Reading:

The Spirituality of Trading

There are three pillars to trading psychology, the field which examines the ways in which psychology can enhance our performance as investors and traders:

1. Our emotional development - This is the traditional domain of trading psychology, consisting of perspectives and methods to ensure that we make the most of our felt understandings (intuition) and do not let emotional arousal interfere with sound decision-making.
2. Our cognitive development - This is the area of development most often encountered with experienced professionals, who are trying to make the most of their fast pattern recognition and deep analysis, and who work on cultivating their information processing and creativity to generate more and better ideas.
3. Our spiritual development - This third pillar is rarely addressed in writings and practice on trading psychology, reflecting in part the sensitivities of professionals around religious matters. Whereas emotional and cognitive development maximize our self-actualization, spirituality seeks self-transcendence.

In this article, I will introduce the concept of trading spirituality and explain, with examples drawn from research and real-world practice, how transcending the ego can help us become both improved traders and better human beings.
Understanding Spirituality
Following Dr. Kenneth Pargament, who has extensively studied the integration of spirituality and psychology, we can define spirituality as the domain of the sacred. What makes something sacred is that it is a source of meaning and purpose above and beyond our personal needs and interests. The sacred domain may or may not be theistic; as Pargament notes, it can refer to beliefs in a transcendent reality (as in Taoism and Buddhism) and/or in a Supreme Being (as in many religions). How we conceive of the spiritual domain helps shape how we conceptualize and experience family, nature, time, and much more. Spirituality, in that sense, reflects our core ways of making meaning of the world.


Common among the world's spiritual traditions is the idea that there is a part of each of us that is sacred. That part of us we refer to as the soul. In Zen, we talk about the big self--the part of us connected to the broader reality--and the little self, the part of us wrapped up in worldly affairs of the ego. In different ways, the Christian, Islamic, and Jewish religions teach that we have a worldly animal soul and a divine soul. We develop spiritually by finding the divine within us, allowing the divine soul to guide our actions in the material world. That aspect of ego transcendence is essential to understanding spirituality.
Another central aspect to spirituality is the idea of achieving unique states of consciousness as a function of contact with the divine. This was a key insight of William James' work at the turn of the twentieth century. It also played an important role in the psychology of Abraham Maslow, who noted that peak experiences--experiences in which we experience a oneness with the world and an enhanced sense of meaning and purpose--are typically religious experiences. A wide range of research finds that spiritual and religious practice are associated with favorable mental health outcomes, including lower rates of depression, anxiety, and substance use. Spirituality has also been found to enhance such positive mental health as self-control, happiness, and fulfillment. (See The American Psychological Association's APA Handbook of Psychology, Religion, and Spirituality for a detailed examination of the interface between spirituality and psychology). In short, spirituality addresses not just favorable outcomes, but transformational ones. The concepts of repentance and renewal--reaching higher levels of experience and development through an expanded connection with the divine--is central to many of the world's religions.


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https://tsi-blog.com/2019/02/what-th...ersus-reality/

February 26, 2019
[This blog post is an excerpt from a TSI commentary published on 24th February]
Based on the par value of maturing securities on its balance sheet there was scope for the Fed to withdraw as much as $43B from the financial markets on 15th February. A week ago we noted that this ‘liquidity drain’ had no effect on the stock market, possibly because the effect would occur on the next trading day (Tuesday 19th February) or because the Fed chose to withdraw a lot less money than it could have. Now that the Fed has issued its latest weekly balance sheet update we can see why there was no effect from this potential bout of “quantitative tightening” (QT). We can also see that the general perception of what the Fed is doing has deviated in a big way from what the Fed actually is doing.
During the 7-day period from 13th to 20th February the Fed’s securities portfolio fell by $31B. In other words, the Fed implemented $31B of a potential maximum $43B of QT. Over the same period, however, the amount of money in the US federal government’s account at the Fed fell by $44B. This means that there was a $31B withdrawal of liquidity by the Fed in parallel with a $44B injection of liquidity by the government, resulting in a net liquidity ADDITION of $13B. No wonder there wasn’t a noticeable negative effect on the stock market from the Fed’s actions.

The difference between a Fed liquidity injection and a government liquidity injection is that whereas the Fed can inject new money, the government can only recycle existing money (the government returns to the economy the money it previously removed via borrowing or taxation). Government liquidity injections therefore are not inflationary, but their short-term effects can be similar to Fed liquidity injections.
Note that at 20th February the government had about $330B in its account at the Fed. This means that the government currently has the ability to inject up to $330B into the economy, but depending on the size of its desired cash float it may or may not make additional injections in the short-term.
Also note that notwithstanding all of the ‘dovish’ talk that has emanated from the Fed over the past two months, the QT program has continued. From 2nd January to 20th February the Fed removed $63B from the economy as part of its “balance sheet normalisation”. The pace of the liquidity removal is slower than the Fed’s self-imposed $50B/month limit, but it is not correct to say — as some pundits have said — that the Fed has stopped tightening. The Fed is still pulling on the monetary reins.
That the Fed is still tightening means that there is a substantial mismatch at the moment between perception and reality. The general perception is that the Fed is now either on hold or preparing to loosen, but, as mentioned above, this most definitely is not the case. Consequently, bullish speculators in the stock, commodity and gold markets are getting ahead of themselves.
It’s possible that the Fed will end its monetary tightening within the next few months, but that’s only going to happen if there’s another pronounced shift away from risk. To put it another way, the more the markets discount an easing of monetary policy the less chance the easing will occur. In fact, if the stock market extends its upward trend into May-June then the Fed probably will resume its rate-hiking in June.

https://www.zerohedge.com/news/2019-...ops+to+zero%29


On Friday The Debt Ceiling Returns, And The Treasury Runs Out Of Cash 6 Months Later


https://zh-prod-1cc738ca-7d3b-4a72-b...?itok=LY4e264-

by Tyler Durden

Mon, 02/25/2019 - 22:10



While president Trump may have postponed one of the two major events scheduled to hit this Friday, March 1, the second one is still set to proceed as scheduled: that's when the US debt limit suspension expires and the US debt ceiling will again return (incidentally the current debt ceiling was suspended when total debt was $1.5 trillion lower!), prompting Treasury Secretary Steven Mnuchin to draw upon extraordinary measures to keep the government within its statutory borrowing capacity for some time beyond March 1.
https://zh-prod-1cc738ca-7d3b-4a72-b...ng%20total.jpg


Which means that rates traders are wearily looking at the T-Bill curve to determine when analysts expect the Treasury to exhaust its extraordinary measures, at which point another debt ceiling crisis will become a very hot topic. And as the following chart of the infamous "kink" in bill yields shows, where the curve dislocation approximate the timing of the D-Date, the market believes that the US will run out of extenuating measures some time in the last week of August.




https://zh-prod-1cc738ca-7d3b-4a72-b...ld%20curve.jpg




Making an accurate D-Date forecast problematic, this year the changes to the Treasury's tax code has created additional uncertainty around IRS tax receipts.

That said, with at least six months to go until politicians once again repeat the debt ceiling charade, there has already been soft demand for six-month bill auctions in recent weeks.

There are other ways this Friday's debt ceiling return will impact markets, most notably with a sharp decline in the Treasury's cash balance which currently stands at $331 billion, and is set to plunge as low as $200 billion over the next few days, as by Friday the cash balance should be at or below the level it was at when the current suspension went into effect in February 2018. And since the commercial banking system will be on the receiving end of that liquidity, this development should lead to sharp drop in Libor/OIS...

https://zh-prod-1cc738ca-7d3b-4a72-b...ibor%20OIS.jpg


... while also work potentially serving to depress the USD over the next 60-90 trading days (due to the excess USD liquidity which will be released by the Treasury.)

But a bigger question is how will negotiations between Trump and the democrats play out heading into the August D-Date. Should trump fold in the current negotiations with China just to see his precious stock market gain another several hundred points, his core constituency - some of whom are already fuming over his border wall concession, when Trump decided to fund government and keep it open - will demand that Trump hold tough on this last point of leverage with the Democrat-controlled House. Should Trump fold here too, he will burn through much of his remaining political capital. On the other hand, the alternative is a US technical default. Which is why we urge traders not to rush to schedule their summer vacation plans: if the past is any indication, late August will be anything but a peaceful time.

https://moneymaven.io/mishtalk/econo...Uioa_hxXV3BeQ/

US Mainstream media is gaga this evening over a desperate Brexit bluff by UK Labor Leader Jeremy Corbyn.


The Wall Street Journal reports U.K. Labour Party Would Back Second Brexit Referendum.

The U.K.’s main opposition Labour Party said it would support holding a second Brexit referendum, a policy shift that breathes some life into the prospect of Britons voting again on whether the U.K. should leave the European Union.

Actually it doesn't breathe life into anything as I will explain in a moment, but here is another article along the same lines.

The New York Times reports Labour Party Leader, Under Pressure, Backs a New Brexit Referendum

After the resignations of nine Labour Party members last week, and amid the prospect of more, the party’s leader, Jeremy Corbyn, dropped his longstanding resistance to a second vote on leaving the bloc.

Mr. Corbyn’s support for a new vote is certainly no guarantee a new vote will happen. Still, it will cheer pro-European Britons, who have been fighting to reverse the outcome of the 2016 referendum decision.

The Labour statement on Monday was lacking in detail, and it was not immediately clear when the amendment for a second vote would be put forward in Parliament and what question, exactly, it proposed to put to the people.

Bluff Under Pressure
The New York Times got the gist of the story in the headline. The key words were "under pressure".

Corbyn does not want a second referendum. He wants new elections. There are many in the Labour party that actually support Brexit.

He had to pick which group to alienate.

The primary risk at the moment is more MPs abandoning the Labour party. With polls turning back towards the Tories, that is hemorrhaging that Cprbyn had to stop.

He supports a second referendum for the simple reason he knows the votes are not there. But he gets to stand back and say, he gave it a shot.

The second referendum idea is going nowhere.

Mike "Mish" Shedlock

https://www.oftwominds.com/blog.html

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Now that Housing Bubble #2 Is Bursting...How Low Will It Go?
February 26, 2019
Unless the Fed is going to start buying millions of homes outright, prices are going to fall to what buyers can afford.

There are two generalities that can be applied to all asset bubbles:
1. Bubbles inflate for longer and reach higher levels than most pre-bubble analysts expected
2. All bubbles burst, despite mantra-like claims that "this time it's different"
The bubble burst tends to follow a symmetrical reversal of very similar time durations and magnitudes as the initial rise. If the bubble took four years to inflate and rose by X, the retrace tends to take about the same length of time and tends to retrace much or all of X.
If we look at the chart of the Case-Shiller Housing Index below, this symmetry is visible in Housing Bubble #1 which skyrocketed from 2003-2007 and burst from 2008-2012.
Housing Bubble #1 wasn't allowed to fully retrace the bubble, as the Federal Reserve lowered interest rates to near-zero in 2009 and bought $1+ trillion in sketchy mortgage-backed securities (MBS), essentially turning America's mortgage market into a branch of the central bank and federal agency guarantors of mortgages (Fannie and Freddie, VA, FHA).
These unprecedented measures stopped the bubble decline by instantly making millions of people who previously could not qualify for a privately originated mortgage qualified buyers. This vast expansion of the pool of buyers (expanded by a flood of buyers from China and other hot-money locales) drove sales and prices higher for six years (2012-2018).
As noted on the chart below, this suggests the bubble burst will likely run from 2019-2025, give or take a few quarters.
The question is: what's the likely magnitude of the decline? Scenario 1 (blue line) is a symmetrical repeat of Housing Bubble #2: a retrace of the majority of the bubble's rise but not 100%, which reverses off this somewhat higher base to start Housing Bubble #3.
Since the mainstream consensus denies the possibility that Housing Bubble #2 even exists (perish the thought that real estate prices could ever--gasp--drop), they most certainly deny the possibility that prices could retrace much of the gains since 2012.
More realistic analysts would probably agree that if the current slowdown (never say recession, it might cost you your job) gathers momentum, some decline in housing prices is possible. They would likely agree with Scenario 1 that any such decline would be modest and would simply set the stage for an even grander housing bubble #3.
But there is a good case for Scenario 2, in which price plummets below the 2012 lows and keeps on going, ultimately retracing the entire housing bubble gains from 2003.
Why is Scenario 2 not just possible but likely? There are no more "saves" in the Fed's locker. Dropping interest rates to zero and buying another trillion in MBS won't have the same positive effects they had in 2009-2018. Those policies have run their course.
https://www.oftwominds.com/photos201...iller2-19a.png
Among independent analysts, Chris Hamilton is a must-read for his integration of demographics and economics. Please read (via Zero Hedge)Demographics, Debt, & Debasement: A Picture Of American Insolvency if you want to understand why near-zero interest rates and buying mortgage-backed securities isn't going to spark Housing Bubble #3.
Millennials are burdened with $1 trillion in student loans and most don't earn enough to afford a home at today's nosebleed prices. When the Fed drops the Fed Funds Rate to zero, it doesn't follow that mortgage rates drop to zero. They drop a bit, but not enough to transform an unaffordable house into an affordable one.
Buying up $1 trillion in sketchy mortgages worked in 2009 because it bailed out everyone who was at risk of absorbing huge losses as a percentage of those mortgages defaulted. The problem now isn't one of liquidity or iffy mortgages: it's the generation that would like to buy homes finds they don't earn enough, and their incomes are not secure enough, to gamble everything on an overpriced house that chains them to a local economy they might want to leave if opportunities arise elsewhere.
In other words, the economy has changed, and the sacrifices required to buy a house in hot markets at today's prices make no sense. The picture changes, of course, in areas where 2X or 3X a typical income will buy a house, and 1X a pretty good income will buy a house.
Unless the Fed is going to start buying millions of homes outright, prices are going to fall to what buyers can afford. As China's debt bubble implodes, the Chinese buyers with cash (probably not even cash, just money borrowed in China's vast unregulated Shadow Banking System) who have propped up dozens of markets from France to Vancouver will vanish, leaving only the unwealthy as buyers.
The only question of any real interest is how low prices will drop by 2025.We're so accustomed to being surprised on the upside that we've forgotten we can surprised on the downside as well.


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My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free (PDF)
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America teeters on the precipice: our government is now captive to special interests and big money, twin cancers that threaten our democracy. This accelerating crisis is exacerbated by a toxic social media-fueled tribalism that has replaced “what do you think?” with “which side are you on?”
Our crisis isn’t just political—it’s structural: as the pace of change explodes from gradual to non-linear, the organizations that dominate our economy—centralized corporations and government—become destined to fail. We see this failure in both the soaring inequality that has hollowed out the American Dream as well as in the rising tide of social and political disunity.
To prevent the fall of our democratic republic, we must transform our economy and society from the ground up. As we enter a new era of rapid, unprecedented tumult, it is we citizens who will need to save our democracy. For our political and financial elites will cling to their centralized power, doing more of what’s failed, even as civil society unravels.
All is not lost--yet. Our way forward starts with understanding the fatal flaws of our brittle, self-serving status quo and embracing this basic truth: better options are available if we’re willing to explore.
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