Money Flow Trading Method along with Risk Management

Welcome - Thanks !!!

Now we wait until tomorrow to see if we have RISK ON OR RISK OFF.

That is determined between 8:30 AM and 9:30 AM just before the North American equity markets open and the money starts flowing between asset classes.

Post your questions here and share any thoughts that you have on this thread.


Bruce

https://www.zerohedge.com/geopolitic...ops+to+zero%29

Authored by Ryan McMaken via The Mises Institute,
During March and April of this year - during the early days of the covid-19 panic - each day came to be accompanied by a general feeling of dread. As new emergency orders and decrees rained down from governors, mayors, and faceless health bureaucrats, I wondered, What new awful thing will governments think up today? As business and churches were closed by government edict, politicians increasingly were threatening to arrest and jail ordinary citizens for doing things that were perfectly legal mere days before.

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Even worse was the new orthodoxy that seemed to immediately spring up. All dissent from the new regime of lockdowns and business seizures was denounced and mocked. We were now all expected to chant new slogans.

“We’re all in this together. Flatten the curve.”
There was no sign of any sizable opposition. The courts were silent. So-called due process was abandoned.

But for those of us who are old enough to remember the dark times that followed the 9/11 attacks, the feelings of dread had a familiarity to them.
The blind sloganeering, the anger toward dissent, and the obeisance toward politicians who were credited with “keeping us safe” brought back bad old memories.

They were memories of the days and months and years that followed the 9/11 attacks. These were the days of so many new assaults on basic human freedoms and human rights. They were days when the public was bullied into accepting whatever new scheme politicians were dreaming up in the name of keeping us “safe.”
In many ways, the current hysteria is even worse than that of the early years of the twenty-first century. It affects the everyday lives of countless Americans in ways the 9/11 panic did not. But the current crisis is nonetheless very much a continuation of the attitudes and paranoia that surged nineteen years ago.


Trust the Experts!
Then, as now, the public was repeatedly instructed to trust the experts and not question government officials in any way. This manifested itself in a couple of ways. First of all, there was new legislation like the so-called Patriot Act, a smorgasbord of new freedom-destroying federal initiatives that would authorize all sorts of new spying and search powers by the federal government. Soon after, of course, came new additional powers, such as the president’s power to declare anyone an “enemy combatant” and subject to torture, imprisonment, and forfeiture of all legal rights.

Those who objected were denounced as reckless and naïve, and unconcerned for human life. Torture, we were told, was absolutely necessary for public safety. The opposition was said to be unfit to comment on the matter or question federal powers because the "experts"—i.e., CIA personnel, etc.—understood the real dangers.
The trust-the-experts claim was trotted out again when the Bush administration and the CIA began to collaborate to "prove" that Saddam Hussein was somehow responsible for the 9/11 attacks and was harboring "weapons of mass destruction" (WMDs) to use on Americans. Politicians and bureaucrats went into high gear, creating countless reports, studies, and claims from alleged witnesses showing that the Iraqi regime was just itching to launch its WMDs at innocents around the world.

The experts, of course, were wrong. Moreover, many were simply lying. There were no WMDs, and Saddam had nothing to do with 9/11. But millions of Americans believed the experts, and thus believed the lies.

And now we see the same thing today. We're repeatedly ordered to trust the official arbiters of scientific truth. Never mind the fact, however, than many other experts have dissented on a wide variety of topics, from the lethality of covid-19 to the wisdom of lockdowns. But they’re not the real experts, we’re told. Then as now, it's only acceptable to believe the experts who support untrammeled growth in state power.


Support the Troops!
Any outbreak of panic, fear, and uncritical support for despotism requires its own vocabulary. Nowadays we have all sorts of new slogans. These include "we’re all in this together," "flatten the curve," "this is the new normal," "#stayhome," and "sixfeetapart."

Many of the slogans are delivered in a cheerful tone, but they're really joyless commands, issued to communicate to the hearer that obedience to these declarations is not really optional. Either you obey, or you are essentially a murderer.

The world of post-9/11 hysteria was similar. We had slogans like "support the troops," "thank you for your service," and "if you see something, say something."
Other catchphrases weren't quite at the level of slogans, but they were invoked repeatedly to encourage uncritical acceptance of the official government line. Examples include "they hate us because we’re free," "you’re with us or your with the terrorists," and "we’re fighting them over there so we don’t have to fight them here."

Due to the lack of social media back then, we didn't have quite the proliferation of slogans we have now. Had we had hashtags in 2003, it's likely we would have regularly encountered ones like #globalwaronterror, #wmds, and #supportthetroops.

The use of these phrases also functioned as a means to "virtue signal." In 2002, putting a yellow ribbon magnet on one's car or sporting an American flag lapel pin were ways to publicly show one's loyalty to the cause and show opposition to one's less enthusiastic neighbors and relatives who "hate America."

The real message behind these phrases and signals, of course, was that we are required to support the regime and its "new normal" whatever it may be. In 2001, that meant supporting new wars while ignoring the Bill of Rights, and turning a blind eye to abuses like CIA torture programs. Today it means calling the cops on your neighbor for not social distancing. It means screaming at people for not wearing a mask. It means blindly trusting the "experts" so long as those experts support unlimited government power.


Be Always Afraid!
The "if you see something, say something" slogan was part of a larger effort to remind the public that it should live in a state of constant fear. Maybe your neighbor is plotting to blow you up. It's better to be safe than sorry: spy on your neighbors for the FBI.

Many people now forget that in the days immediately following 9/11, Americans were buying gas masks and planning backyard bunkers. The then new Department of Homeland Security in February 2003 advised Americans to prepare for a chemical attack from terrorists:
Stash away duct tape and pre-measured plastic sheeting for future use. Experts tell us that a safe room inside your house or apartment can help protect you from airborne contaminants for approximately five hours - that could be just enough time for a chemical agent to blow away.

For those who wanted all the "best" new information on how to prepare, the federal government created the website ready.gov, complete with a section for children called Ready Kids, where kids could learn—in the spirit of the old Duck and Cover videos from the Cold War—how to prepare for an attack from terrorists.

And then there was the color-coded Homeland Security Advisory System. This was a visual aid which allowed the federal government to let us know just how much we should fear terrorism on any given day. Of course, the government always kept the warning level at "elevated" or "high." It never dropped down to "low," of course, lest some form of terrorism take place on that day and the "experts" look like they were asleep at the switch.


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Today, of course, we have countless websites, models, and news stories devoted to reminding the public that it must constantly fear covid-19 infection. Were there a color-coded alert system for the current crisis, we can be quite confident it would be set each day to "high" or "severe." As with the 9/11 panic, this all serves to encourage unquestioning obedience to government authorities and to send the message there is no time for political debate, dissent, or even due process. Our "leaders" keep us safe and we must defer to their judgment completely.

The media itself remains an accomplice in this. Then, as now, media pundits and "journalists" side reflexively with officials promoting fear and obedience to the state.


Living with the Aftermath
It takes many years for a society to recover from fits of panic and paranoia such as these. Nineteen years after 9/11, the federal government still has the power to spy on law-abiding Americans with impunity. It still has the power to simply assassinate American citizens—including children—without any due process. American police have been militarized with "surplus" military hardware from various failed and failing wars. The taxpayers will still be paying interest on the trillions of dollars spent on disastrous wars in Iraq and Afghanistan decades from now. Thousands of American troops died for nothing in conflicts that have done nothing to make any American safer. (Hundreds of thousands of innocent foreigners have died in those same conflicts.)

Thanks to the reaction to 9/11, governments in the US are now far larger, far more expensive, and far less limited by laws and constitutions than in the past. This is what happens when a country believes itself to be in a constant state of emergency. Due process is out the window. Governments get away with far more than would have been the case otherwise.

This process, which was so greatly accelerated after 9/11, has now been supercharged by the current panic of covid-19. Government officials issue "laws" and decrees without any debate and without any due process. Americans are ruined, arrested, destroyed, and humiliated in the name of "safety." Those who dissent and seek to limit the regime's powers are silenced, threatened, arrested, shouted down, and ignored.

This is America in a state of permanent emergency. The justification for the regime's ever growing power changes over time. But the results are the same.

 

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Thank you.
What is our daily check list between 8:30am to 9:30am... Please correct/Add what is missed

1- Check DOW, SP500, GOLD and USDJPY...(If risk ON these instruments should be UP). My question.. Is there any threshold like DOW should be up 0.5% or something?
2- Enter in the direction of Quarterly Cycle. If we are expecting risk off then ONLY take trades when Risk if off. How we enter on daily basis? Just at OPEN?
3- Never ever risk more than 3% on open positions per instrument. The MAX exposure for all open trades is 20%
4- Book profits regularly.

I will wait for your response and clarifications

The only thing that I look at is the Dow Futures and the SP500 Futures. Gold and Silver are only part of the money flow. Our two main trades are short US30 and short SP500

You short 50 units of SP500 and 100 units of US30

Set a limit out for profits of $1000 and Stop Loss at $1000 for each open position that you put on.

We usually wait until after 10 AM to put on a position or positions (3) as daily currency option expiry moves markets.

If we see trend changing from positive Dow and SP500 going up then down we can start by shorting one position of each.

https://www.zerohedge.com/geopolitic...ops+to+zero%29

Authored by Sam Jacobs via Ammo.com,
With American military personnel now entering service who were not even alive on 9/11, this seems an appropriate time to reexamine the events of September 11, 2001 – the opaque motives for the attacks, the equally opaque motives for the counter-offensive by the United States and its allies known as the Global War on Terror, and the domestic fall-out for Americans concerned about the erosion of their civil liberties on the homefront.

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Before venturing further, it’s worth noting that our appraisal is not among the most common explanations. Osama bin Laden, his lieutenants at Al-Qaeda, and the men who carried out the attack against the World Trade Centers and the Pentagon are not “crazy,” unhinged psychopaths launching an attack against the United States without what they consider to be good reason.

Nor do we consider then-President George W. Bush to be either a simpleton, a willing conspirator, an oil profiteer, or a Machiavellian puppet whose cabinet were all too happy to take advantage of a crisis.

The American press tends to portray its leaders as fools and knaves, and America’s enemies as psychopathic. Because the propaganda machine hammered away so heavily on the simple “cowardly men who hate our freedom” line, there was not much in the way of careful consideration of the actual political motives of the hijackers, the Petro-Islam that funded them, the ancient, antagonistic split between Sunni and Shi’a, the fall-out from the 1979 Iranian revolution or the 1970s energy crisis, the historical context of covert American involvement in the Soviet-Afghan War and the Iran-Iraq War of the 1980s, nor the perceived “imperialist humanitarianism” of American military adventures of the 1990s in Muslim nations like Bosnia, Iraq, Somalia and Kosovo. Alone, none of these factors were deadly. Combined, they provided a lethal combination.

It is our considered opinion that the events of 9/11 and those that followed in direct response to the attacks – including the invasion of Iraq – were carried out by good faith rational actors who believed they were acting in the best interests of their religion or their nation. There are no conspiracy theories here; sometimes truth is stranger than fiction.

This opinion does not in any way absolve the principals from moral responsibility for the consequences of their actions. It does, however, provide what we believe to be a more accurate and nuanced depiction of events than is generally forthcoming from any sector of the media – because we see these principals as excellent chess players who, in the broad sweep of events, engaged in actions which are explicable.

How the Hijackers Pulled Off the Intelligence Coup of the Century
Very few people dispute one simple fact: On 9/11, 19 men hijacked four planes, three of which hit their targets: the World Trade Center Building 1, the World Trade Center Building 2, and the Pentagon. The fourth crashed in a field in Pennsylvania.


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What is less often talked about is perhaps an even more stunning feat the hijackers pulled off: Being able to evade the attention of the United States intelligence community while planning their attacks. Indeed, their acumen with regard to covert operations was so great that they were effectively able to steal an air force for the attacks. It’s not that they were absent from the radar of U.S. intel services – it’s that no one was ever able to connect the dots.
Indeed, they understood the game so well that Osama bin Laden was able to call his mother two days before the attack to tell her: “In two days you’re going to hear big news, and you’re not going to hear from me for awhile.” He knew he was under surveillance by the NSA, but he also knew the turnaround time on intel was three days.

Another oft overlooked quality that the hijackers had was discipline and intestinal fortitude. It is important to remember that courage is a virtue, but it does not carry a moral weight of its own. The men who perpetrated the attacks on 9/11 went to their deaths in a disciplined fashion, carrying out their orders to the letter. This is not something a coward, a simpleton, or a psychopath does.

While the evidence for the attack was able to be collated in hindsight, it is not an exaggeration to say that the United States was more surprised by the attack of 9/11 than it was by the attack on Pearl Harbor.

The U.S. Domestic Situation in the 1970s
It’s helpful to start with the domestic situation in the United States in the 1970s. Still in the throes of the Vietnam defeat, Congress had little appetite for defense expenditures or additional covert wars. However, President Jimmy Carter’s National Security Advisor, Zbigniew Brzezinski, saw an opportunity to use the Soviets’ favorite tool against them when they invaded Afghanistan in 1979: The sponsored war of national liberation.

This was also post-Watergate era, and there was a focus on transparency in the government. This included sweeping changes to how intelligence operations were conducted in the United States. The battle against the spooks was fought by Idaho Senator Frank Church, who held hearings demonstrating that the American intelligence community was simultaneously untrustworthy as well as bad at its job. The end result was a hamstrung CIA and NSA, because they were found to be illegally spying on Americans.

Thus you had an intelligence community both out of favor in Washington and discreetly called upon to oppose the Soviets in Afghanistan as part of the larger Cold War chess board.

American Intelligence Finds a New Ally: The Saudis
Still, covert ops were needed. And while the CIA could covertly foot part of the bill, it could not afford the whole thing. But the CIA learned quickly that it had a natural ally both against the Soviets and against the new radical Shi’ite regime in Iran – the Sunni monarchy of Saudi Arabia, who at the time had what was effectively an endless supply of petrodollars without the constraints of public oversight and democracy to get in the way.

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The need was mutual. Having seen how badly the oil embargo hurt the United States in the 1970s, the Saudis were not eager to see enemies of the United States (namely Iran and the Soviets) emboldened. Instead the Saudis were eager to see the U.S. put its muscle into a covert war against the Soviets in Afghanistan. They had both the insight into the situation on the ground and the money to throw behind it. America had the muscle and the materiel.

Common enemies make for uncommon allies, and the covert alliance between Washington and Riyadlah in the 1980s was no exception.
The Saudis would provide funding and personnel to support a covert effort by the CIA to build an anti-Soviet guerrilla movement in Afghanistan. The goal was to build a quagmire for the Soviets while the U.S. urgently rearmed. The means was an alliance between the United States and Muslim fundamentalists.

Such an alliance was not new. In fact, it was effectively American policy since the rise of Arab socialism (both Nasserism and the two flavors of Ba’athism housed in Syria and Iraq). The Arab Socialists cozied up to the Soviets without fully entering their sphere. In response, the United States sought refuge in the conservative monarchies of the region: The Hashemites of Jordan and Iraq (until 1968), the Shah in Iran (until 1979), and now the Saudis.
The funds largely came not from official government coffers, but from the Saudi royal family and the aristocracy of the nation. This was to have some degree of plausible deniability.

There was one additional factor: Pakistan. Pakistan was a long-term American ally, torn between the secularism of its founders and the Islamism of a large segment of its population. It was also terrified of being trapped between a Soviet-occupied Afghanistan and a pro-Soviet India.

Pakistan did have a long experience in Afghanistan, as well as territory contiguous to Afghanistan – where training camps, logistics systems, and bases of operations could be constructed. The North Vietnamese had Cambodia and Laos; the United States had Pakistan. A three-way alliance was created. The United States would provide training, coordination, and strategic intelligence. The Saudis would provide money and recruitment of mujahideen. The Pakistanis would provide their territory plus their intelligence service, the ISI, to liaise with Afghan forces resisting the Soviet invasion.

Jimmy Carter presided over the creation of this fateful alliance. Earlier in his administration, he had spoken of America's “inordinate fear of communism.” He was not as interested in destroying the Soviet Union as much as he wanted to find a basis for accommodation with the Soviets and end what had been a decade of decline in American power.

Carter certainly did not consider – nor would any reasonable person – that the result of aiding Afghan guerrillas against Soviet occupation would help stimulate the collapse of the Soviet Union and, a generation later, lead to the rise of Al-Qaeda.

The Reagan Administration and Bill Casey
Enter the Reagan Administration and their point man William Casey. Bill Casey was a legend among the intelligence community, seen as something of a mad genius. Few people ever understood what he was talking about, but his results spoke for themselves. He was Reagan’s go-to guy for encircling and suffocating the Soviet Union. There were many aspects to Casey’s strategy, including baiting the Soviets into an arms race that would bankrupt them, underwriting Lech Walesa’s Solidarity movement in Poland, and supporting resistance by Russian Jews. Afghanistan was simply part of this increasingly aggressive pattern of pressure on the Soviets.
A key part of this strategy that would come back to haunt the United States later: Casey thought it was a great idea to encourage young Muslim men to travel to Afghanistan to wage jihad against the Soviet invaders. These men were, at the end of the war in 1989, equipped with captured Soviet equipment, generous gifts of cash and materiel from the United States military, and trained by United States Special Forces.

Al-Qaeda Forged in the Crucible of Afghanistan
It is impossible to understand Al-Qaeda without first understanding what the Afghanistan resistance movement did to the men who formed it. It was a nine-year war against one of the biggest powers in the world, spanning the inhospitable Hindu Kush fought in an asymmetrical fashion. By the end, the men who fought it were hard as nails.

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The mujahideen descended upon Afghanistan for a variety of reasons. They were trained in Pakistan, before setting off to work with Afghan rebels. No matter the nation they hailed from, their Islamic faith and hatred of the Soviet Union were the fuel that powered them. The American government encouraged this and it even received public attention in Rambo III, released three months after the end of the war in 1988 (at the time, this was the most expensive film ever made).
What’s more, the Islamic world was buoyed by the victory – it was the first time in centuries that an Islamic army had won a decisive battle against foreign invaders. That this foreign invader was also an atheistic superpower was not a fact that was lost on the mujahideen. Nor was the fact that the force who defeated this army was a multinational Islamic force, not an “Afghan” one.

While there was the disastrous British retreat from Kabul in 1842, it was followed by the British laying siege to Kabul in direct response. The British didn’t seek to occupy Afghanistan in response: they simply laid waste to it and left.

American and Muslim views of the war were starkly different. The Americans viewed it simply as one piece of the larger Cold War puzzle, one that they had been the primary force behind. The mujahideen, and to a lesser extent, many within the Muslim world, saw themselves as having single-handedly brought the atheistic empire of communism to its knees. In contrast, the Americans felt that they were owed gratitude from the mujahideen and the Islamic world as a whole.
Once the war was over, the United States did what it usually does with its allies: Maintained a casual relationship and expected to be reached out to by the Afghan fighters. This did not happen and is the genesis of the cleavage between the two.


The Iran/Iraq War, the Fall of Communism, and Operation Desert Storm
In Afghanistan, the U.S. was covertly working with the mujahadeen to defeat the Soviets, thanks to a covert alliance with Saudi Arabia and Pakistan. Elsewhere in the Middle East was another covert balance-of-power strategy: The U.S. was also working with Iraq and Saudi Arabia to contain Iran whilst also occasionally arming Iran against Iraq to prolong the Iran/Iraq War of the 1980s.

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Neither America nor Saudi Arabia wanted to see the Ayatollah Khomeini brand of Islamist radicalism spread around the Islamic world. America was in the throes of defeating one revolutionary ideology with the Soviets. It did not want to begin dealing with another, especially one controlling so much of the world’s energy supplies.
The Saudis were obviously more well acquainted with the nuances of Islam than the Americans. They were also less concerned about the revolutionary aspect of the movement than the Shi’ism. This is the dominant strain of Islam in Iran, but also throughout a region of the Arab world known as the Shi’a Crescent.
(The split between Shi’a and Sunni Islam is analagous to the split between Catholics and Protestants in Northern Ireland – just taking place atop a much more strategically important portion of the world, the oil-rich Persian Gulf.)

The Saudis were profoundly antagonistic toward Shi’a, belonging to an ultra-fundamentalist version of Sunni Islam known as Wahhabism. From a more practical perspective, the Saudis saw Iranian power as a threat to their oil revenues.

America and Saudi Arabia had similar interests that didn’t quite overlap in the 1980s, but were enough for an alliance of convenience – the goal was to keep Iran penned in and to stop the spread of revolutionary Shi’a Islam. What the Americans didn’t know at the time was that they were building up Wahhabism while combating Shi’a.


To contain Iran in the 1980s, the United States encouraged Iraq, its ally at the time, to invade Iran. This encouragement was of the low-key variety, assuring Iraq that it would not stand in the way of an invasion of Iran and offering the U.S. plausible deniability through diplomatic channels.
Iraq was looking to settle a score from a previous war against the Shah’s Iran in the 70s, one where the United States had backed Iran. What America really wanted was a protracted and exhausting conflict that would sap the energy of both countries. The Saudis and other Gulf oil nations were ready with cash. Iraq invaded in September 1980.


Such a policy was not novel in American history. America allied with Stalin to defeat Hitler, and with Communist China to contain the Soviet Union. But as with both of these cases, America was creating a new problem while solving the old (known colloquially in intelligence circles as “blowback”).


Iraq’s goal was to be the dominant power in the region, first through defeating Iran, then through conquering Kuwait. The United States simply wanted the balance of power maintained and used the Iran-Contra affair to arm Iran toward that end. The famous Iran-Contra affair, engineered by Bill Casey, was part of this strategy – with Americans delivering Hawk surface-to-air missiles and TOW anti-tank missiles to Iran in order to help stave off an Iranian defeat, while also arranging for supplies to Iraq. Under the circumstances, it was a clever move until better options emerged.


The war between Iran and Iraq lasted over nine years and caused millions of deaths. Iraq won a Pyrrhic victory.

After that war ended, Iraq turned its attention toward Kuwait – to the victor goes the spoils of war. The U.S. Ambassador to Iraq from 1980 to 1989, April Glaspie, quietly assured Saddam Hussein that it had no interest in internal Arab affairs. This was a good wink-and-nod during the Iran-Iraq War of the 1980s, but state department policy had changed with the Fall of Communism, which Glaspie was somehow ignorant of.

The subsequent response to Iraq’s 1990 invasion of Kuwait, Desert Storm, enraged the Muslim world because Christian troops were stationed in Islam’s holiest nation, Saudi Arabia. But the difference now was the mujahideen veterans. They didn’t share the more conservative view that the United States was a necessary ally. What’s more, they viewed those who had not fought in Afghanistan with a degree of contempt.

There were three lessons the mujahideen had absorbed through their experience in Afghanistan: First, that Islamic nations are not as weak as they had previously believed. Second, that the current leadership, even the conservative, religious monarchies, were corrupt and unnecessarily reliant upon the United States. Third, the United States, a Christian nation, was the last super power and needed to be fought against and ultimately humbled to break the traditional reliance upon the country, as well as to inspire the Islamic masses with a greater degree of confidence.

They also knew a great deal about how the Americans thought, collected intelligence, and how they would fight based on the Afghan experience.
Their focus turned in two directions: First, to attack the United States in a manner that would provoke a massive response, the ultimate goal of which was to bait the United States into a war against the entire Muslim world. Second, to leverage the defeat of America and its allies in the Muslim world into a recreated caliphate. This was the kernel of the plan to attack the United States on September 11, 2001.

Former Mujahideen Turn on the United States
The placement of American troops on the Arabian Peninsula during Desert Storm was seen as an invasion of Christian crusaders invited by the ostensible defenders of Muslim holy sites at Mecca and Medina, the Saudi royal family. This is when forces like those who formed Al-Qaeda began to see conservative Muslim monarchies as corrupt and weak.

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The Americans believed they were, for the most part, dumb farmers who couldn’t learn anything useful, but they were wrong. The mujahideen included many like Osama bin Laden who were wealthy, well educated and intelligent. They quickly learned from the American intelligence community about covert operations. They also had a ready-made financial network from the Afghanistan adventure that had never really shut down. Finally, while the Islamists hated the secular regimes of the region, they were happy to adopt their primary strategy – terrorism, the purpose of which is psychological rather than financial or military.

The new grouping spent years working behind the scenes, testing holes in American intel and security, while at the same time figuring out what the intelligence community was paying attention to and what it wasn’t. It largely did this through orchestrating fake attacks, then monitoring the response. They also learned how to exhaust the resources of the system by sacrificing low-level operatives in an attempt to distract and hamstring the intelligence community.

Throughout the 90s, radicalization of the Islamic world against the United States grew, thanks to extensive American involvement in Muslim nations like Bosnia, Iraq, Somalia and Kosovo. Al-Qaeda saw these recurring U.S. military interventions in the Islamic world as both a direct challenge and, more important, an opportunity to mobilize support by labeling the United States an enemy of Islam – which could be used to forment a pan-Islamic uprising and recreate the caliphate.


Petro-Islam and the 9/11 Hijackers
In a cruel twist of fate, the radicalization of the Islamic world against the U.S. was further exacerbated in large part with American dollars in a process known as Petro-Islam.

Consider the following cycle: The U.S. – along with just about every other industrialized country – buys oil from Saudi Arabia. The Saudi royal family uses a portion of their oil revenue to fund the spread of Wahhabism abroad, encouraging the creation of mosques and madras.

From 1982 to 2005, during the reign of King Fahd of Saudi Arabia, over $75 billion is estimated to have been spent in efforts to spread Wahhabi Islam to various, much poorer Muslim nations worldwide. By comparison, the Soviets spent about $7 billion spreading communism worldwide in the 70 years from 1921 and 1991.
The money was used to establish 200 Islamic colleges, 210 Islamic centers, 1,500 mosques, and 2,000 schools for Muslim children in both Muslim and non-Muslim majority countries. The schools were "fundamentalist" in outlook and formed a network "from Sudan to northern Pakistan." By 2000, Saudi Arabia had also distributed 138 million copies of the Quran worldwide.


These Saudi-backed Wahhabi institutions radicalize Muslims. The majority of the 9/11 hijackers were Saudi nationals, and all of the hijackers are believed to have been practitioners of Wahhabism.

To make this nefarious cycle worse, the U.S then sells weapons to the Saudi royal family so that they can maintain their grip on power via military force – all whilst vacationing abroad in opulence in places like the south of France, while their citizens suffer under totalitarian rule back home. It’s a sick, vicious cycle driven by petrodollars funneled from the U.S. to Saudi Arabia and then back to the American military-industrial complex.


American Intelligence Underestimates Al-Qaeda
The American military and intelligence communities were largely caught with their pants down after the 9/11 attacks. This is precisely why so many conspiracy theories popped up in response. The American intelligence community had a plan in place for a war against Britain and Canada after World War I. It plans for even the most far-fetched contingencies. But it had not planned for anything remotely similar to what happened on 9/11.

The intel community largely saw groups like Al-Qaeda as nuisances who were more likely to blow themselves up or kill themselves than anything. They were ready for an attack on the power grid. They weren’t worried about poisoning the water supply, because such an attack was simply logistically unfeasible. They weren’t worried about nukes, because they were hard to get and even if someone did, one intel agency or another would know within hours. Islamists had attacked the United States before, including at the World Trade Center, the USS Cole and attacks on embassies in Nairobi and Dar es Salaam, but none of these were terribly impressive.

Hijackings were expected and well-worn territory. Indeed, they were largely political theater and authorities knew how to respond: You got the plane on the ground and started negotiating. If that didn’t work, the hijackers either killed everyone on the plane or you sent special forces in to get them out. But hijackings with a suicide attack were unprecedented. There was no game plan for this. And unlike the response to the attack on Pearl Harbor when President Roosevelt cleaned house, President Bush left the same men in charge. It was business as usual.

One question is always raised when discussing the twin post-9/11 invasions of Afghanistan and Iraq: Why did the United States invade Afghanistan and Iraq when most of the hijackers and the bulk of their funding and logistics hailed from Saudi Arabia, and to a lesser extent, Egypt? The answer to this question might surprise you.


Why the United States Government Invaded Afghanistan and Iraq
Afghanistan was chosen as the place for counter-attack for a simple reason: The Taliban was there and had never fully consolidated power. The Northern Alliance opposed it and was available for hire at the right price.

https://zh-prod-1cc738ca-7d3b-4a72-b...-invaded_0.jpg

Strategically, it also brought in the Russians, who were facing both a homegrown Islamic threat in Chechnya as well as Afghan encroachment on Central Asian republics ethnically close to the tribes of the Northern Alliance. Finally, it was important to the United States to send a swift, sharp action against the Islamic world in response to the 9/11 attack. For a variety of reasons, Afghanistan was seen both as the easiest and the one with the least PR damage – the Taliban was widely perceived as an outlaw regime and wasn’t even recognized by the United Nations.

Iraq was chosen for a distinct purpose: To shake the Saudis out of their slumber and bring them into the fight against Al-Qaeda – or at least pressure them into stopping their funding of Al-Qaeda, as the U.S. State Department noted in a cable leaked by WikiLeaks:
While the Kingdom of Saudi Arabia (KSA) takes seriously the threat of terrorism within Saudi Arabia, it has been an ongoing challenge to persuade Saudi officials to treat terrorist financing emanating from Saudi Arabia as a strategic priority. Due in part to intense focus by the USG over the last several years, Saudi Arabia has begun to make important progress on this front and has responded to terrorist financing concerns raised by the United States through proactively investigating and detaining financial facilitators of concern. Still, donors in Saudi Arabia constitute the most significant source of funding to Sunni terrorist groups worldwide. Continued senior-level USG engagement is needed to build on initial efforts and encourage the Saudi government to take more steps to stem the flow of funds from Saudi Arabia-based sources to terrorists and extremists worldwide.

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This had to be done without once again committing the error of putting American boots on the ground in Saudi Arabia, a la Desert Storm, and thus inciting a pan-Islamic counter-offensive as Osama bin Laden hoped.



What’s more, if the occupation of Iraq had gone smoothly, the United States would have become the preeminent power in the region, encircling Iran with U.S. forces in Afghanistan on Iran’s eastern flank – with a base of operations that bordered most of the major powers in the region: Turkey, Iran, Saudi Arabia, Syria, Jordan, and Kuwait.

In both cases, the United States underestimated both the continued resistance it would face from Islamic fighters in each nation and the depth of the old vendettas amongst the liberated. (Calling Iraq or Afghanistan a “nation” is akin to calling Frankenstein a man; both are heterogenous and held together by totalitarian regimes.) Sectarian violence erupted in the power vacuum in both Iraq amongst the Kurds, Shi’a and Sunni factions, and in Afghanistan amongst the 14 recognized ethnic groups and various tribes.

To fundamentally understand the attack of 9/11 and the United States response is not to ascribe any moral weight to either side in either direction. But what is clear is that the fighters of Al-Qaeda and its affiliates are sincere in their desire to reestablish the caliphate of Islamic theocracy as it existed at the time of Muhammed – and that the United States intelligence community continually and woefully underestimated their seriousness.
We would be remiss without discussing the financial issues. America has spent trillions on the Global War on Terror – $5.9 trillion to be exact, as of 2019. The conventional wisdom is that the United States invaded Afghanistan, and especially Iraq, for their natural resources, but this is patently false. After all, where are the vast oil and mineral riches?

America has, however, managed to import the major cash crop of Afghanistan: opioids.


The Western Way of War
While the United States undertook a prompt response – the invasion of Afghanistan – it did not undertake the same measures as it did for the purpose of winning World War II (namely overwhelming and overly destructive force). There were, of course, the two atomic bombs dropped on Hiroshima and Nagasaki, but also overwhelming destructive force throughout the war in the form of carpet bombings, flame throwing tanks, and picket destroyers. The carnage of Okinawa fundamentally changed how the West viewed war, particularly against the fanatical Japanese.

Gen. Curtis Lemay was an architect of this strategy and advocated it not only in Korea (where it was not used), but also Vietnam, where his advocacy of keeping the nuclear option open is often cited as one of the things that destroyed the 1968 presidential campaign of George Wallace – for whom Lemay was the vice presidential candidate. The idea was that overwhelming destructive force led to fewer casualties for the Allies. Here, Gen. Lemay discusses the concept with regard to the Korean War:
“What I’m trying to say is, once you make a decision to use military force to solve your problem – then you ought to use it. And use an overwhelming military force. Use too much. And deliberately use too much. So that you don’t make an error on the other side, and not quite have enough. And you roll over everything to start with. And you close it down just like that. You save resources. You save lives. Not only your own but the enemies too. And the recovery is quicker. And everybody is back to peaceful existence – hopefully in a shorter period of time.”


America spends billions of dollars developing highly destructive military technology. But since World War II, it has failed to deploy this in the defense of its citizenry.
The Domestic Response to 9/11

It’s almost a cliche, but in some manner of thinking, the terrorists have been wildly successful. American civil liberties have been severely curtailed since 9/11 and a culture of unquestioning obedience to authority under the guise of “security” has been ushered in. The TSA has effectively groomed the American populace to accept totalitarianism at its airports, despite the fact that the TSA is ineffective at preventing terrorism in airplanes (some airports have a zero-percent compliance rate during audits and security checks, and all attempts at airplane bombings since 9/11 have been thwarted by passengers, not the TSA).

https://zh-prod-1cc738ca-7d3b-4a72-b...war-bush_0.jpg

It’s worth noting that 9/11 was a massive intelligence failure on the part of the NSA and the CIA. Rather than being held to account, they had their powers massively expanded in the wake of the attacks. Maureen Baginkski very candidly said just weeks after the attacks, “You have to understand, 9/11 is a gift to the NSA...We are going to get all the money we want.”

The PATRIOT Act was passed with virtually no oversight after 9/11. It has not been dialed back one iota since, despite the revelations of Edward Snowden. Snooping agencies like the NSA and CIA, who had their power severely curtained in the 1970s, now effectively have a blank check, both literal and figurative. This doesn’t even include the number of private security firms receiving big money from the federal government.

We are now all living in what is effectively a soft totalitarian state, where our every communication is tracked unless we are willing to take extreme measures to protect ourselves. By all outward appearances, there is no going back.

What’s more, there is still a fundamental inability to acknowledge who the United States is actually at war with. The Global War on Terror is sometimes spoken of in terms of criminal justice and sometimes in terms of a war on a concept. It is telling that the enemy is now frequently referred to not even as “terrorism,” but “terror.”
Such confusion did not exist after the Japanese attack on Pearl Harbor. FDR did not speak of bringing the perpetrators to justice – he spoke of an act of war. What’s more, FDR was squarely focused on the state actor who committed the attack, namely Japan. He did not speak about Japan’s allies or even unrelated countries like George W. Bush did when he spoke of an “Axis of Evil,” none of whom had anything to do with the attack on 9/11, some of whom (North Korea) were tangentially related at best to a militant global revolutionary Islam.


President Bush did not want to declare war on the Islamic world, so he chose Al-Qaeda. But then he confused the issue by invading first Afghanistan, then Iraq. President Obama created further obfuscation when he took pains to divorce the religion of the perpetrators from their ideology whilst massively expanding covert drone strikes all over the world, thus blurring the line between warfare and assassination.

18 years later, we are no closer to a clear definition of an enemy and a statement of goals than we were on September 12, 2001. What would constitute victory in the Global War on Terror? No one knows.

The Geneva Conventions have provisions for guerrilla fighters. Two rules must be met for protection under the Conventions: First, fighters must carry their weapons openly. Second, they must wear uniforms. The Islamist terrorists do neither and are thus not protected. During the Second World War, such fighters would have been treated to a perfunctory military trial and summary execution, whether caught by the Axis or the Allies.

Indeed, both the Hague Accords and the Geneva Conventions are very clear about the role of irregulars in a war: They have 72 hours to don either uniforms or identifying pieces of clothing (for example, armbands). If they fail or refuse to do this, they are no longer covered by the Geneva Conventions or Hague Accords, and they are not to be treated by the regular rules of war. There is no obligation to capture them, accept their surrender or do anything else but shoot.

This means that America accepts the surrender of enemy combatants who do not enjoy the legal protection of either surrender or trial.
Unless the United States is clear about who its enemy is and the price it is willing to pay to defeat it, we are destined for an endless war with ever-growing encroachments on American liberties. If this is the path America chooses, then there can be no doubt that we have already lost the war.

https://finviz.com/futures.ashx

FUTURES UP 290 NOW !!!

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

SP500 UP 40 NOW !!!

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FOREX

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CRYPTO

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GOLD

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

It amazes me when I hear folks with decades experience in #FinancialMarkets or #Economic #Analysts as well as heads of global multi-billion funds/banks, etc say #CentralBanks must do more to support #EconomicGrowth - are they living in cuckoo land?

Take a look at this chart... the #Big4 central banks have expanded their balance sheets at a staggering pace - quintupled in the space of just 13 years with no sign of slowing...

What has it achieved?
A) propped up global #Equities and other #Assets predominantly owned by the wealthy
B) the longest but weakest/slowest economic expansion in history - and before you say “it’s #Covid19 - 2009-2019 was the weakest decade for economic growth on record.

So what’s the solution?
Do more of the stuff that hasn’t worked apparently... you’d probably be labelled a “conspiracist” for thinking #CBs are not dumb, they know precisely what they’re doing and the goal isn’t stimulating #economic #growth & prosperity via #StablePrices and #MaximumEmployment rather #AssetPriceInflation and #MaximumWealthGap!
Call it a conspiracy, perhaps it is, but, you cannot deny, injecting $20 trillion has achieved precisely that.

Irony
The #PBOC is the only CB that has shrunk its BS this year and #China was the only nation to record growth in Q2... go figure.
https://media-exp1.licdn.com/dms/ima...FvUAIwC2QGCw4c
Activate link to view larger image.

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Posted Sep 14, 2020 by Martin Armstrong


https://www.armstrongeconomics.com/w...tes-Fauci8.jpg
COMMENT: Marty,
Good morning. Well here we go, not that we didn’t already know, but here we have Fauci making an official proclamation of what’s to come over the next few months.
In another article from CNN about Fauci’s proclamation, continued widespread use of face masks is promoted as are keeping college students away from home under the pretense of not spreading the virus. A nice little trick to divide and conquer the family, so they can continue to indoctrinate the youth. As for the children in grade to high school, they ask the parents to sign a waiver and agreement that the parents won’t be in the same room as the children if they’re receiving the virtual lessons. I wonder why that is? Maybe they don’t want to see what really is being taught in school? Can’t imagine leaving my children online by themselves with some adults.
Keep up the good work. Hope all is well!
Best,
E
ANSWER: This is all political. The health director of Los Angeles openly admitted they will keep schools closed until after the election. I suppose if Biden wins, they think COVID will be cured before he even takes office. I saw a family of four driving and they all were wearing masks inside their own car. I suppose they all most sleep in separate rooms and eat in rotation. They really7 should have STUPID awards available where you could hand them out. It is people like this who are surrendering all our rights to this orchestrated political play.
Fauci belongs in prison. Fauci’s conflicts of interest and experiments with coronaviruses, which he sent to Wuhan when ordered to stop in the United States, is unbelievable. CNN will never report anything along those lines because they are out to hang Trump no matter what Fauci and Gates do to the nation. As I reported, in Thailand where they did not pay hospitals if the person had COVID, there were only 58 deaths out of 69 million people. There were 2551 deaths by suicide because they have destroyed people’s livelihoods. In Singapore, they have started a movement begging teens not to commit suicide, asking them to please stay. This is completely exaggerated and it is being done deliberately to overthrow Trump and usher in dramatically higher taxes with this New Green World Order with the United Nations, the major puppet of Bill Gates, along with a co-conspirator Klaus Schwab and his World Economic Forum.
Categories: Conspiracy, Disease
Tags: Bill Gates, coronavirus, Fauci, Klaus Schwab, New Green World Order
« The Plot to Create a Terror-State following Hitler’s Playbook
The 9/11 Conspiracy Theory »

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iculture
Posted Sep 14, 2020 by Martin Armstrong
https://www.armstrongeconomics.com/w...a-Flooding.jpg
Chinese Chairman Xi Jinping has come out officially acknowledging the food crisis in China by asking people not to waste food. China’s rice farmers are fighting insects and weeds the traditional way by bringing in hungry ducks. Meanwhile, China is facing serious shortages of both grains and pork. Months of flooding have wiped out the crops while insect infestations attack the rice fields. Then there is simultaneously the rapidly spreading African swine fever (ASF) which is now even starting to make its way into Europe. On top of all of this has been the orchestrated Wuhan coronavirus (COVID-19) which may have been deliberately leaked from the lab there by people who planned this take over of the world with a New Green World Order.


As I have mentioned before, these people have succeeded in subjugating Europe. They need to overthrow Trump to subjugate the USA. They are seeking to force Western investors from hedge funds to pension funds to sell all Chinese investments to force them to comply with their demands. Trump could not date talk about this prior to the election, for the media is in the pocket of these people and would call him a conspiracy nut not worthy of the office. Investigating all the people behind this convenient plan must be done carefully. I believe that the media MUST be ordered to be unbiased and present both sides or they lose their license as propaganda.

Categories: Agriculture, China
Tags: China, famine, New Green World Order
« Food Shortages Hitting China

http://www.the92ers.com/blog/ben-str...rse-has-bolted

Ben Strong and Alan Greenspan - Closing the Barn Door After the Horse Has Bolted
Category:
When reviewing all the things the Federal Reserve has gotten wrong over the years it is easy to focus on interest rates alone. After all, it is by manipulating interest rates that the Fed attempts to direct the US economy to some desired outcome. However, in many cases the Fed raising rates is little match for the animal spirits the Fed has already let loose. This mechanism of rising rates failing to quell a Fed fueled mania can best be demonstrated by reviewing two examples from history;

1. The 1920s Stock Bubble (Ben Strong)
2. The 1990s Tech Stock Bubble (Alan Greenspan)

The 1920s Stock Bubble and Ben Strong's 'coup de whiskey' for Stocks (Figure 1)
https://www.forexfactory.com/sites/d...a_Strong_0.png
World War I was a colossal disaster, and set the world back in every way imaginable. The biggest strategic blunder the US ever made was to violate her longstanding neutrality and intervene on behalf of the Allies. On an economic front, this intervention was characterized by US banks loaning huge amounts money to Allied governments so these governments could purchase huge volumes of weapons from American companies. There is no quicker way to bankrupt a country than to borrow in a foreign currency to purchase weapons. The experience of the UK, France and Russia in 1918 was little different than that of Iraq in 1988. (1)
By the 1920s, the UK economy was in shambles. The UK had greatly increased its currency in circulation to pay for the war, but all this spending didn't increase the UK's productive capacity. Indeed, in February 1920, well after Armistice Day, the pound still traded at $3.18 versus its pre-war parity of $4.88, a fall of 35%. There were two legitimate courses of action for the UK at this point - accept the pound's loss of value or raise interest rates to soak up all the extra pounds that had been created during the war. Both involved hard choices and honesty - two things central bankers and politicians are basically incapable of.
Instead of these two legitimate courses of action, Montagu Norman, the head of the Bank of England, came up with a third idea. Norman's idea was to have the US cut rates, and this would then eliminate the need for the UK to raise rates. Norman's counterpart at the Federal Reserve Bank of New York, Benjamin Strong, agreed to work with Norman on this plan, and began goosing credit markets in the US to advance British interests. This was always going to be a difficult operation but two events occurred to take this already difficult plan deep into the realms of impossibility, See Figure 1;

1. The UK re-established the pre-war parity of the pound with the dollar on a fully fraudulent basis (APR 1925)
2. The UK suffered its General Strike (MAY 1926)

It was at this point that Benjamin Strong then took the extraordinary action of calling a meeting of the world's central bankers. The meeting was held in July 1927 on Long Island. The meeting had a single purpose - to coordinate a world-wide policy of "loose money" to advance the interests of England. The leaders of the central banks in France and Germany balked at the proposal. Strong dismissed the concerns expressed by France and Germany as well as the concerns expressed by many in the US banking establishment with the retort, that the interest rate cuts he had in mind would amount to little more than "a little coup de whiskey for the stock exchange." (2)
Of course, the animal spirits Strong thought would only run a little faster, ran completely wild. Strong became seriously ill and died in October 1928 at just 55-years old. In his absence, the Fed first tried a policy of 'moral suasion' to have banks stop loaning money for stock speculation . When that failed, they raised interest rates to reign in the stock market that was obviously spiraling completely out of control. It was to little avail and stock prices loosened themselves from any sort of rational basis. At the valuations prevailing in October 1929, once selling began in earnest, the selling would soon feed on itself and prices would tumble - the market merely floated on a cushion of air. The same animal spirits that saw stocks only going up would soon become consumed with man's most basic emotion - fear; and that fear would send prices tumbling.
The Tech Stock Bubble - Greenspan Impersonates Charlie Sheen Chaperoning the Junior Prom (Figure 2)
https://www.forexfactory.com/sites/d...reenspan_0.png
For obvious reasons, Ben Strong went to great lengths to keep his market manipulations to benefit the UK a secret. Of course, market manipulations of that type can never be kept secret, at least not traders. Astute observers knew the UK reestablishing the pre-war parity of the pound in April 1925 had no basis in economic reality and required active participation by the central banks of England and the US to sustain the chimera. In sharp contrast, Alan Greenspan regularly breathlessly championed all the (supposedly) unprecedented changes that computer technologies were producing and how these changes justified rising stock prices.
Two examples of this market cheerleading are provided by Items #1 and #4 in Figure 2;

1. In a speech Greenspan stated, "We are witnessing the substitution of ideas for physical matter in the creation of economic value - a shift from hardware to software as it were." (3) (October 05, 1997, #3)
2. Exactly four days before the NASDAQ peaked, Greenspan said, "The fact that capital spending boom is still going strong indicates that business continue to find a wide array of potential high-rate-of return productivity-enhancing investments. And I see nothing to to suggest that these opportunities will peter out anytime soon." (4) (March 06, 2000, #4)

In addition to his outright market cheerleading, Greenspan performed two other actions that greatly emboldened the market's animal spirits. These are items #2 and #3 in Figure 2.

1. In what Bill Fleckenstein and Frederick Sheehan called "one of the most irresponsible acts in the history of the Federal Reserve," (5), on October 15, 1998 Greenspan cut rates between regularly scheduled FOMC meetings. The hedge fund LTCM had collapsed in September and Greenspan had already cut rates once at Fed's meeting in September. He then called an emergency meeting in October and cut rates again. (October 15, 1998, #2)
2. Changes to the Depression-era Glass-Steagall Act championed by Greenspan were enacted into law. These changes - which many on Wall Street dubbed the 'Citigroup Relief Act' - served as further evidence that Greenspan would go far beyond his mandate as Fed chair to goose markets higher. The issue at stake was a purely legislative one and Greenspan had no basis for actively lobbying for a such a long-standing law to be changed. (November 12, 1999)

At the time of the surprise rate cut the NASDAQ was at 1611. In a little over a year, November 1999, the NASDAQ soared to 2967, a gain of 84%. In a final speculative blow-off the NASDAQ - doubtless fueled by the passage of the Citigroup Relief Act - reached 5000 in March of 2000, a 70% rise in just the four months since November, or over 210% since the surprise rate cut sixteen-months earlier in October 1998. The enormous move came with a considerable headwind provided by raising rates. Exactly as in the 1920s bubble, the rising rates of the 1990s proved no match for the animal spirits that Greenspan greatly encouraged.
Concluding Remarks:
As seen in the chart below, Figure 3, the stock market climax following the October 1998 surprise rate cut was a case of history repeating itself, and eerily similar to the stock market blow-off that followed the July 1927 Long Island conference of central bankers. The chart plots the 1920’s stock bubble for the period January 1920 – September 1933 and the tech bubble for the time period from January 1993 – March 2003. The data in the chart is “normalized.” Normalization is a technique commonly used in statistics when evaluating data measured over different durations of time that is also measured using different scales of magnitude.
As discussed here, both the 1920s and Tech Stock bubbles saw their largest gains when interest rates were rising. Fed apologists routinely cite the 1920s and 1990s stock bubbles as proof the Fed can't be behind asset bubbles. As demonstrated here, what really set markets soaring were the animal spirits that the Fed - in the persons of Ben Strong and Alan Greenspan - encouraged and emboldened. Once these animal spirits had been released by the Fed, rising rates weren't going to slow them down. The only thing that would stop these markets from marching higher would be these animal spirits simply exhausting themselves. Once the market had exhausted itself, there was no remaining force large enough to keep the market from falling once the selling began in earnest.
Many argue that today's markets - courtesy of three rounds of QE and the taper tantrum, see Figure 2, are eerily similar to the 1920s and 1990s stock bubbles.
FIGURE 3 - Ben Strong and Alan Greenspan Sink the World
https://www.forexfactory.com/sites/d...k%20Bubble.png


Peter Schmidt
September 13, 2020
Sugar Land, Texas
PS - As always if you like what you read, please consider registering with the site. It just takes an e-mail address, and I don't share this e-mail address with anyone. The more people who register with the site, the better case I can make to a publisher to press on with publishing my book! Registering with the site will give you access to the entire Confederacy of Dunces list as well as the Financial Crisis timeline. Both of these are a treasure trove of information on the crisis and the long-running problems that led to it.
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ENDNOTES:
1. http://www.the92ers.com/blog/cia-fed...aos-it-creates
The prime motivation for Saddam Hussein's invasion of Kuwait was economic. After nearly eight-years of war with Iran, his country was completely impoverished. (4) Iraq had borrowed heavily to finance its war with Iran, and among the countries it had borrowed from was Kuwait. Saddam argued he was doing the Arab gulf states a great favor by fighting Iran, and these gulf states should then forgive Iraq's debts. When Kuwait insisted that Iraq make good on its war debts, Iraq invaded Kuwait. With this being the case, there is a direct causal chain between the 1953 coup, the 9/11 attacks, and the subsequent invasions of Iraq and Afghanistan.
2. James Grant, Money of the Mind, Farrar Straus Giroux, New York, 1992, p. 192
3. Remarks by Alan Greenspan, "Technological Change and the Economy," The Annual Convention of the American Bankers Association, Boston, MA October 05, 1997
https://www.federalreserve.gov/board...7/19971005.htm
4. Remarks by Chairman Alan Greenspan, "The Revolution in Information Technology," Boston College Conference on the New Economy, Boston, MA, March 06, 2000
https://www.federalreserve.gov/board...0/20000306.htm
5. William A. Fleckenstein with Frederick Sheehan, Greenspan's Bubbles - The Age of Ignorance at the Federal Reserve, McGraw-Hill, New York, 2008, p. 51

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https://wolfstreet.com/2020/09/13/su...us-phenomenon/

Subprime Auto-Loan Delinquencies, Loan Deferrals & Stimulus Curdle into Curious Phenomenon

by Wolf Richter • Sep 13, 2020 •

In the bizarre machinery of an economy that depends on consumer spending funded by stimulus and “extend and pretend.”

By Wolf Richter for WOLF STREET.

OK, get this: At a time when there are 29.6 million people claiming state or federal unemployment insurance because they lost their work in the worst economy of a lifetime, subprime auto-loan delinquencies, which in the past had spiked during much smaller labour market downturns, are doing the opposite: they’re dropping.

Meaning, since April, people with subprime credit ratings are defaulting a lot less on their auto loans than they did during the Good Times.

In August, delinquencies of 60 days and over of subprime auto loans that have been securitized into auto-loan Asset-Backed Securities dropped to 3.49% of total auto loans (prime and subprime), the lowest delinquency rate for any August in seven years, according to the Auto Loan Delinquency Index by Fitch Ratings. That was down 2.44 percentage points from August 2019, when the delinquency rate was 5.93%:
https://wolfstreet.com/wp-content/up...020-09-13-.png


The 60-day-plus delinquencies started dropping in May. And given that May’s 60-day delinquencies were 30-day delinquencies in April, when tens of millions of people lost their jobs, it makes for a curious phenomenon.

This is particularly curious because from 2014 on, private-equity firms piled into the subprime auto-loan space, the lending became very aggressive, underwriting standards went to heck, and delinquencies surged as a result. But interest rates charged on those loans were so high – well into the double digits – that the game could go on, with defaults ballooning to levels far higher than during the peak of the Great Recession, and those were the Good Times.

Then we get the biggest unemployment crisis in a lifetime, and the delinquency rates should have spiked from these highs into the sky. But the opposite happened – as shown by the three red columns in the chart below, marking the change in percentage points of the delinquency rate compared to the same month in a year earlier:
https://wolfstreet.com/wp-content/up...-09-13-yoy.png


So what’s going on here.
Stimulus payments and the extra $600 a week in unemployment insurance. With these funds, many strapped households had more money than they did while working. A study by the Becker Friedman Institute for Economics at the University of Chicago found that two-thirds of the people who received unemployment insurance, including the extra $600 a week, made more from UI than from working, with about 20% of them doubling their pay. And they could make their car payments, even if they had trouble making them before.

The extra $600 a week expired in July, but these are 60-day delinquencies as of the end of August – so they were 30-day delinquencies in July and transitioned into delinquency in June. And during those months, the $600 was still available. And the stimulus payments of $1,200 per adult, or $2,400 per household of two adults – and more when there are kids in the household – started going out in April and went a long way in helping make car payments over the next few months.

The $600-a-week program has now been replaced by $300 a week, and the first lump-sum catch-up checks, covering several weeks, already went out. This program is going to run out of funds in September. But for now, it’s doing its magic.

Loan deferrals – no payment, no problem. When a borrower cannot make the car payment and becomes delinquent, a lender has a choice: Either work with the customer, or repossess the car, sell it at auction, use the proceeds to cover part of the outstanding loan, and write off the rest of the loan. That can get costly.

The cheaper-for-now route is to work with the customer by putting the loan – whether it’s already delinquent or getting ready to be delinquent – into a deferral program. This kicks the can down the road.

Deferral means that borrowers are allowed to not make payments for now, but will have to make payments later, including those payments that had been missed.

It’s not a free ride.

But for now, it doesn’t matter how impossible it will be for the borrower to catch up later. Because the loan is in a deferral program, the lender can mark it as “performing,” and accrue the interest income though the borrower is not making payments, and the lender can thereby “cure” a delinquency already on its books, or avoid one. The customer doesn’t have to make payments while the loan is in deferral. And everyone is happy.

Bank regulators normally frown on deferral programs, but this is a pandemic, and now regulators encourage deferral programs.

The finance divisions of the automakers, such as Ford Motor Credit or Chrysler Capital, most banks and credit unions, and specialized auto lenders with a big percentage of subprime customers, such as Ally and Santander Consumer USA, have been offering large-scale deferral programs to existing borrowers.

If a borrower falls behind on a payment, there is now a lender on the other side, eager to kick that can down the road and move this loan from the delinquency basket into the deferral basket – and thereby “curing” the delinquency and turning it into a performing loan.

And then what?
Well, OK, that’s a little bit of a problem. When these policies were implemented in March and April, the expectation was that by summer most of those people would be back at work, that this was a temporary blip. Many people were in fact able to go back to work, but other people have since lost their jobs, and the number of people claiming state and federal unemployment insurance has hovered near 30 million for months:
https://wolfstreet.com/wp-content/up...A-stacked-.png

In other words, this unemployment crisis has settled in. Most of those initial deferral programs were for three months. But they can be extended to six months or whatever – the classic “extend and pretend,” but on a massive national scale.

The only thing that’s hard about “extend and pretend?” Getting out of it. But this is now an essential cog in the bizarre machinery of an economy that depends on consumer spending funded by stimulus money and by consumer debt that is not being paid.

Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
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Good morning

Very interesting and profitable Forex trade usually daily on FUTURES DOW 30.

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

Tell me if you see the pattern starting at 4:00 AM

RISK OFF so far this morning. No trades before 10:00 AM

Have a positive day.


Bruce

https://www.businessinsider.com/us-c...0tQcOiOoUeWiD4

8:30am EST

DOW up about 0.92% and SPS00 1.2%

Why we are saying Risk off? Thanks

Hello Bruce,

At London and Frankfurt OPEN markets (2am-4m) will retrace or try to reverse. This is because of money flow in/out from different assets classes. Please ADD if there is more to it

correct - it is risk on !!! Good work !!!