Money Flow Trading Method along with Risk Management

Good morning - Shabbat Shalom Ron and Mark

This morning while in Mont Laurier on business I made my call for the NFP number. Last month it was 350,000 well above consensus. The prediction by all the experts was a consensus of 200,000 new jobs created. My GUESS with education behind my guess was 275,000.

It was EXACTLY 275,000 new jobs created !!!

So now we have RISK ON and later today I will probably SHORT SP500 and Dow 30.

Just for Mark and Ron, I will soon do SCREEN SHOTS of my 4 at present $50,000 US dollars demo account through FXCM UK and Friedberg Direct in Toronto where my own Forex Trading opened real Funds CASH account is located.

WWW.AVIELFOREXLEARNINGEDGE.COM

Bruce Warren Margolese
438 995 2549 or by email to [email protected]

Victor Davis Hanson: One Angry Biden Lie After Another | ZeroHedge

Victor Davis Hanson: One Angry Biden Lie After Another
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BY TYLER DURDEN

FRIDAY, MAR 08, 2024 - 07:40 PM

Victor Davis Hanson's calm and reasoned response with Tucker Carlson to President Biden's SOTU address is worth every second:
Victor Davis Hanson discusses with Tucker Carlson, Joe Biden’s SOTU address.
Never has he seen a more angry speech to our country.

Credit: these two awesome Americans. @TuckerCarlson @VDHanson pic.twitter.com/9xUKeuJ2cn
— Big Fish (@BigFish3000) March 8, 2024
But the professor put digital pen to paper in a post on X this afternoon, laying out all the details.

A demagogic fuming Biden gave another Phantom of the Opera speech blasting conservatives for all the destruction that he has caused and has resulted in his own historic unpopularity.
https://assets.zerohedge.com/s3fs-pu...?itok=TqcKcXWh

All too aware that he was confused and incoherent, his handlers felt that the antidote was to come out barking and bellowing at his imaginary enemies.

Any Never Trumper who would vote for such a screeching maniac is suicidal. The night’s nadir? Joe, of the Hunter-Biden family consortium, damned the money-grubbing “rich” who “don’t pay their fair share of taxes”—all of this when his own son is now facing multiple felony counts for not paying any income tax at all! And Joe himself has received lots of family money without paying tax on such “loan repayments”.

In truth, Biden gave the most livid state-of-the-union address in modern memory, a surreal tele prompted rant from a “get off my grass” old man. At points, he started howling at the seated opposition and even called out Supreme Court Justices. Determined not to reveal cognitive decline, Biden instead came late to the podium shouting nonstop, grimacing in reptilian style for over an hour.

If the planned Adderall-fueled screaming was to prove he was still alive, most would have preferred his drowsy incoherence.

But mostly the speech was one of abject lies as he either blamed all his disasters on others or claimed they were his greatest achievements.

Deficits? Why does he think we have high inflation and high interest rates after he took office? The debt was $28 trillion when he came in and now after just 3 years it is nearly $35—and is now growing by $1 trillion every 100 days. At the current rate a two-term Biden presidency would have in aggregate added $22 trillion more to national debt.

Ukraine? Biden started out with Ukraine, not inflation, not the border, not crime. Does he remember he suspended military aid to Ukraine upon taking office? Does he know that Putin did not invade a neighboring country in just one administration of the last four? Does he know why? Does he recall his humiliation in Afghanistan that green lighted

Putin? There are now 700,000 combined casualties in Ukraine and so what is the plan to end our Verdun? Another 6-month-long “spring offensive” against fortified lines?

Abortion? Biden screamed that the Dobbs decision outlaws abortion and threatens women’s lives when it allows any state to let its own people determine their own laws. Is Trump’s plan to let the states decide and to favor a 16-week ban more sensible than Biden’s abortion on demand that would allow some 5,000-10,000 partial birth or post-21 weeks abortions?

The Border? Do we remember Mayorkas bragging in detail how Biden rescinded all of Trump executive orders (he listed them by name) to destroy the border and let in 8-10 million illegal aliens? Biden campaigned on just that, calling on illegal aliens to “surge” the border.

Inflation? It is up 17% since he took office! Prices of the stuff of life have risen 30%—staple foods, fuel, appliances and care, shelter, mortgages. etc. January 6? In Bidenland a buffoonish afternoon riot now trumps Pearl Harbor—or the 120 days of looting, rioting, violence, death, and injury of summer 2020?

Gaza? Basically Hamas murders, rapes, tortures, and mutilates1,200 Jews, takes 250 hostages, rapes and murders untold numbers of them, is shielded by civilians beneath mosques, schools, and hospitals, and then the US blames Israel for retaliating. Biden cites bogus Hamas fatality figures, and promises to build a US port on the Gaza coast to pour in massive aid to Hamas-controlled Gaza.

This furious speech was a preview of the 2024 campaign. The Democratic nominee will run on abortion, January 6, and the ‘booming’ economy, hope leftwing prosecutors can bankrupt or incarcerate Trump, and ensure that in all the swing states 70 percent of the electorate do not vote in person on Election Day.

charles hugh smith-Weblog and Essays (oftwominds.com)

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A Low-Trust Society Is an Impoverished Society
March 8, 2024
The sole remaining reservoirs of trust in American life are personal networks, local enterprises and local institutions.

It's not exactly news that social trust has declined significantly in the United States. Surveys find that public trust in institutions and the professional classes that dominate those institutions has cratered. (see chart below) Social trust--our confidence that other people are trustworthy--has also fallen to multi-decade lows.

This was not the case in decades past. Americans maintained high levels of trust in their institutions, government and fellow citizens. The decline in social trust is across the entire spectrum: our trust in institutions, professional elites and our fellow Americans has declined precipitously.

The causes of this decay of social trust can be debated endlessly, but several factors are obvious:

1. Institutions forfeited the trust of the citizenry by withholding / editing realities to serve the interests of hidden agendas and insiders' careers. The Vietnam War was pursued on fabrications, as was the second Gulf War to topple Saddam. Watergate eroded trust on multiple levels, as did the Church Committee's investigation of America's security agencies' domestic spying / over-reach.

2. The managerial / professional elites at the top of the nation's institutions no longer put the citizenry's interests above their own. The public's trust has eroded as institutions are primarily viewed as vehicles for self-enrichment and career advancement: healthcare CEOs pay themselves millions, higher education is bloated with layers of non-teaching administration, defense contractors and the Pentagon have greased the revolving door to the benefit of incumbents and insiders, and so on, in an endless parade of self-serving cloaked with smirking PR claims of "serving the public."

The shift from a high-trust society to a low-trust society is consequential economically, politically and socially. Low-trust societies have stagnant economies, as nobody trusts anyone they don't know personally or through personally trusted networks, and nobody trust institutions to function effectively or fulfill their stated mission to serve the public good.

Faced with incompetent, unaccountable, corrupt bureaucracies and a culture overflowing with scams, frauds, imposters and get-rich-quick schemes, people give up and drop out. Rather than start a business and accept all the risks just to get dumped on or ripped off, they don't even try to start a business. Given the financial insecurity that is now the norm, they decide not to get married or have children.

The vast trading networks of the Roman Empire were based on personal trusted networks and trust in Rome's functionaries / institutions. The owners of trading ships dealt with trusted captains and merchants, who then paid duties to Roman functionaries in Alexandria and other major trading ports.

In other words, tightly bound personal trusted networks work well as long as the state institutions that bind the entire economy are trusted as fair and reliable--not perfect, of course, but efficient and "good enough."

But when public institutions are viewed as unfair, unreliable, corrupt or incompetent, the entire economy decays. Even personal trusted networks cannot survive in an economy of unfair, unreliable, corrupt or incompetent state bureaucracies and private institutions.

The American economy is now dominated by enormous privately owned and managed monopolies and cartels that are the private-sector equivalent of self-serving state bureaucracies. Big Tech, Big Pharma, Big Healthcare, Big Ag, Big Finance, etc., are even worse than state bureaucracies because there are no legal requirements for transparency or recourse. Try getting a response from a Big Tech corporation when you've been shadow-banned or sent to Digital Siberia.

The sole remaining reservoirs of trust in American life are personal networks, local enterprises and local institutions. These are not guaranteed, of course; in many locales, even these reservoirs have been drained. But in other locales, enterprises and institutions such as the county water utility, the local newspaper, the local community college, etc. continue to earn the trust of the public by performing the services they exist to provide effectively and at a reasonable cost.

The larger the institution and the greater its wealth and power, the lower the social trust--for good reasons. The greater the influence of the managerial elites, the greater the disconnect from the everyday experiences of the citizenry and customers, and the more extreme the self-serving PR.

Sure, I trust Big Tech, Big Pharma, Big Healthcare, Big Finance--to rip me off, profiteer, send me obfuscating bills, jack up junk fees, make it impossible to contact them, and send me to Digital Siberia if I complain.

The divide between the elites and the commoners should prompt us to examine the low-trust path we're sliding down:

https://www.oftwominds.com/photos2024/trust3-24a.png

In a society in which everything is phony, low quality or fraudulent, you're taking a chance trusting anyone you don't know personally--and even that can be risky now that self-aggrandizing flim-flam is the last remaining path to financial security for non-elites.

https://www.oftwominds.com/photos2023/social-trust2.png

A low-trust society is an impoverished society, economically stagnant and socially threadbare. That's where we are now, and the more fragmented, greedy, self-serving, desperate and deranged we become, the lower the odds that we'll find the means to rebuild trust.

Sadly, we already know that anyone claiming to "rebuild trust" is spouting PR designed to mask self-enrichment. We also know that the vast army of well-paid flacks, factotums, enforcers, happy-story apologists, lackeys, toadies and sell-out minions are declaring "everything's great!"

Just mumble, "Uh, sure" and continue to Tune in (to degrowth), drop out (of hyper-consumerism and debt-serfdom) and turn on (to self-reliance and relocalizing capital and agency).

Canadians paying billions of dollars in 'excess' bank fees: report - BNN Bloomberg

 

1. CANADA

Mar 7, 2024

Canadians paying billions of dollars in 'excess' bank fees: report
Ian Bickis, The Canadian Press

The Street
Navigating regulatory risks for Canadian banks

 

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   Canada's banking and financial services sector is dominated by an...

As the federal government pushes to reduce bank fees, a report from consultancy North Economics figures Canadians are overpaying by billions of dollars a year.
The report by the Alberta-based firm compared fees at the Canadian Big Five banks — RBC, TD, BMO, CIBC and Scotiabank — with what consumers face in the U.K. and Australia.

It shows that Canadians pay much more per month for bank accounts, as well as for fees for non-sufficient funds, overdraft charges, and accessing ATMs at competitor banks.

To get a sense of just how much more Canadians pay, North Economics managing director Alain de Bossart looked at how Canadian and British non-interest retail bank profits compare with their deposits. The measure excludes interest-based profits from mortgages and other loans.
Using the retail banking profits to deposits ratio for 2022, he found that Canada's five biggest banks had $7.73 billion in "excess" income. The number works out to about $250 per Canadian.

"Canadian banks have done a very good job of extracting as many fees out of people as possible," said de Bossart.
He said he's been wanting to delve into the issue since moving to Canada from the U.K. about seven years ago.

"The first thing that struck me was that you pretty much have to pay a monthly fee, for just allowing a bank to hold your day-to-day deposits," said de Bossart.
"In the U.K., you can hold multiple bank accounts with multiple banks, and expect to pay no monthly charges at all for a bank account that allows you to do everything you would reasonably expect to do in a month."

The Canadian Bankers Association said in a statement that Canada's banks provide the tools Canadians and small businesses need to manage their finances.
"Our country’s competitive banking system provides good value, ready access and wide choice for consumers and businesses," said spokeswoman Maggie Cheung. “The banking sector understands the importance of financial well-being to all Canadians, and that many Canadians are feeling additional pressure on their budgets.”

The report highlights that along with major banks in the U.K. and Australia offering free accounts to all consumers, they also charge either nothing or only a few dollars when a customer is hit with non-sufficient funds. Canadian banks charge between $45 and $50 each time.

Finance Minister Chrystia Freeland has been pushing to improve low-cost banking options and lowering non-sufficient fund fees but has yet to do so, which de Bossart said prompted him to look into the issue.

The report also notes that Canadian banks generally charge $5 for overdraft protection, either on a monthly or per instance basis, whereas U.K. banks charge nothing (though banks in the U.K. do charge higher interest on the over drafted amount).

Canadian also often face multiple fees when using the ATM of a bank where they don't have an account, which can run anywhere from $1 to $9, while consumers in the both Australia and the U.K. aren't charged anything, he said.

Cheung said the banking sector "understands the importance of financial well-being to all Canadians, and that many Canadians are feeling additional pressure on their budgets.”

She noted that according to recent data from the Bank of Canada, roughly 57 per cent of Canadians either do not pay for a bank account or had their monthly fee waived or refunded.

No-cost accounts are available to groups like young people, students and seniors, but the North Economics report notes there is no free option offered to all Canadians.

It also points out that while customers can avoid paying fees if they keep a high enough balance in their account, that amount can run anywhere from $3,000 to $6,000. That means the lump sump can't be generating more via a different account with better interest rates.
De Bossart said the lower fees in the U.K. and Australia are in part a result of regulators having a stronger mandate to encourage competition, including through things like making it easier to switch accounts.

“The regulation mandate has really included a competition mandate, so the idea of promoting and enhancing competitive behavior's in the market, whereas in Canada, that's really not something that is being considered."

This report by The Canadian Press was first published March 7, 2024.
Related

1. Canada's IPO drought reaches a full year with no end in sight
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2. National Bank's shares close at record high as it reports $922M Q1 profit
   https://www.bnnbloomberg.ca/polopoly...-of-canada.jpg
3. RBC sets aside more money for bad loans but positioning for rate cuts
   https://www.bnnbloomberg.ca/polopoly...adquarters.jpg
4. BMO bankers sent each other crude memes before they were fired
   https://www.bnnbloomberg.ca/polopoly...n-montreal.jpg

Same here in Sweden as in Canada. U.K offering alot of beneficial options, if one listened to the spring budget announcement.

Hello

Nice to have you post here. Check in each day as I share information here that few discuss or share. Discussion always leads to more positive results.

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Stephen Gardner Interviews Gerald on Upcoming Trends in the Looming Banking Meltdown (youtube.com)

Martin Armstrong: The Forecaster (youtube.com)

The End of Ideology? - The Daily Reckoning

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BY JEFFREY TUCKER

POSTED
MARCH 8, 2024

The End of Ideology?
In 1960, Harvard sociologist Daniel Bell published a book called The End of Ideology. It argued that it was time to put aside all our ridiculous arguments of the past — socialism, fascism, liberalism, anarchism, technocracy, etc. — and just recognize that elites like him have it all under control.

They’d already established the building blocks of the administrative state so that real experts could be in charge and rule society with a steady hand.
The rest of us need just to work hard, pay our taxes, and comply. We should be free to study, read, and dream.

But, he wrote, the political system is off-limits to revolutionaries, simply because the postwar social managers have proven themselves so competent and ultimately moderate in their judgments.

The wise and well-trained get the great lesson of modern history: prudence is more valued than vision. The best utopia for which we can hope is a continuation of what we have now with careful tweaks along the way.

In the six decades that passed, we largely went along with the idea. Sure, we argued about this philosophical point or that in what seemed like intellectual parlor games. The Cold War itself devolved into a neat debate in which the US represented the idea of freedom and the Soviet Union represented tyranny.

Bureaucracy’s Day in the Sun
Of course none of this debate really hit home; it was an abstraction about which we read and heard on the nightly news.
When that ended — oh how sad for the elites! — matters became confusing but we trudged onward in any case, increasingly satisfied in our sectarian camps of conservative, liberal, and libertarian.

There were institutions, events, and publications that indulged our appetite for belonging and donating. No big emergency called forth permanently deep passions, much less panic about the future.

This parlor game came into grave question on 9/11 when the great struggle hit home but even that receded in our memory over time, as the machinery of centralized bureaucratic control grew and grew, just waiting for its day in the sun.

That came four years ago.

Apparently out of nowhere, and only with the seemingly reluctant support of the US president, governments at all levels locked us in our homes, shut the parks and gyms, restricted travel, blocked access to public worship, and urged us all to order our food in and otherwise binge streaming services. And why?

Beyond Audacious
They said it was to control a virus that had already been described as a serious flu that only mortally threatened the aged and infirm.
They were trying out an experiment on us as we waited for pharmaceutical companies to create and distribute a magic potion that would protect and heal the population. Audacious doesn’t quite sum up the scheme.

Needless to say, it didn’t work except to engorge the rules of the system. Along the way, the scheme created vast carnage in lost liberty, health, and trust in institutions. It turns out that Daniel Bell’s beloved intellectual class and wise bureaucracies didn’t have it all together after all.

They made an unprecedented mess of things.

That posed a number of problems from an ideological point of view. The first issue to solve concerns who precisely had put these people in charge of the rest of us.

How did they gain the power so flagrantly to shred the Bill of Rights and trample on every freedom we had taken for granted?

They claimed it was their right to do so, and continue to claim that in every court filing. They have not and will not apologize for what they did. Worse, they have spelled out plans to do more of the same.

That poses a serious problem. All ideology aside, if the people themselves cannot have some influence over the system of government that rules them — if our job is merely to listen for and follow instructions over which we have no input — we are truly back to a pre-Enlightenment age.

In that case, no one’s ideology really matters. We don’t have that fundamental thing that birthed modern civilization in the first place, namely the basic dignity that comes from a regime that recognizes human rights and responds to democratic control.

They All Went Along With It
Worse, the more we closely examine what happened to us, the more it defies conventional ideological categorization. The government on which the “liberals” relied to empower people actually took away their rights and injected them with pharma products on which the largest corporations made vast money.
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The churches, nonprofits, politicians, and the president once celebrated by “conservatives” went along while “conservative” publications said nothing. The big corporations which had long been defended by “libertarians” closely cooperated with government in the enslavement of the population and the disabling of small business.

This is the fundamental reason why ideology seems so scrambled in our times. In the end, everyone was betrayed by the institutions Professor Bell promised would guide us into the light. Even the schools closed, the very jewel of the progressive crown.

As it turns out, the professional managerial class in both public and private sectors — ultimately a minority of the population — cooperated in a vast scheme to transfer wealth and power to themselves at everyone else’s expense.

They were not the “best and brightest” after all but rather the most brutal and sadistic, not to mention pompous and condescending.

As everyone attempts to regroup and reconsider, we have new clarity on why left and right are so incredibly scrambled these days. It’s because all of our expectations were defied and we have been presented with new realities that cry out for explanation and solution.

Five Points
1. Food and medical freedom both involve what goes into our bodies and both came under massive assault. These causes have traditionally been associated with the left. And yet the leaders of what is now called the left completely ignored these concerns while celebrating the forced masking and inoculation of the population.

2. The right has traditionally been defensive of corporate enterprise but these days most large media, tech, medicine, and food distribution is captured by the state, which rather messes up the clean binary between public and private. Enterprise is no longer free and yet conservatives didn’t speak out in any great degree in defense of the crushed small businesses and even turned a blind eye to canceled religious holidays.

3. Both sides of the good guys here — the people who took seriously the best values of the old left and right — agree on the rights of individuals and businesses to go their own way against the corporatist hegemon. These groups are finally finding each other in defiance of the censorship regime and discovering more in common than they knew.

4. Meanwhile, the leadership of old left, right, and libertarian orgs are solidly on the side of the hegemon and pretending as if there is nothing really going on of any import, which is why the establishment in all camps cares nothing about vaccine mandates, the attacks on the Amish, censorship, medical capture, or the Great Reset generally.

5. This further feeds into what is called “populism” but is better described as an authentic freedom movement against the ruling class agenda on all sides. Covid controls peeled back the curtain and now many see what had previously been mostly invisible.

The Freedom Movement
This is not only in the US but all over the world. It is showing up in farmers’ protests, new political parties in parliamentary systems, and new media that is threatening the old for influence over a new generation.

What is striking today is how the freedom movement has been enlivened by oppression of various sectors that the central managers had long promised to guard and protect. In particular, this movement concerns education, food, and medicine, again that which is most impactful on our thinking, our sustenance, and our health.

The rise of public schooling beginning in the late 19th century was codified as the norm in the early 20th century, the same time the medical schools came under centralized control and food regulation became a cause célèbre of the progressive elite.

Money and finance became centrally controlled at the same time, again with a public-private partnership that promised better results thanks to scientific management.

Think of that: government and corporate control of education, medicine, food, and money/finance are all discredited in light of the last four years, revealed as little more than schemes to crush alternative pathways that might otherwise be chosen by people themselves.

The stakes here are very high. We are talking about a century of precedent now called into question among a huge swath of people from a variety of different ideological perspectives.

What’s Really Behind the Curtain
Looking back, Daniel Bell’s “end of ideology” seems more like an attempt to draw closed a green velvet curtain that was hiding something terrible, namely that we were gradually giving up citizen control of our societies to an elite that pretended to possess wisdom, judgment, and prudence to the point that the rest of us could do no better than to outsource our penchant for exercising freedom and democracy to them.

Pull back that curtain and we find ignorance, institutional interest, fraud, graft, and a shocking lack of empathy.

That gang is now discredited. And yet they remain in control. That’s the essential problem we face today. It is a problem that vexes all the lower orders of society all across the world as they work to find ways peacefully to unseat the elites from their ill-used power.

It’s unjust and unworkable that a small elite should rule the world without the consent of the governed.

YOU MAY ALSO BE INTERESTED IN:
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Chris GalizioChris Galizio• Following• FollowingExecutive Producer of “Money Game”- Grew Fidelity Focused Growth to over $7 Billion in assets. Solving the $340 Trillion problem.Executive Producer of “Money Game”- Grew Fidelity Focused Growth to over $7 Billion in assets. Solving the $340 Trillion problem.
8h • Edited • 8h • Edited •



El Salvador president speech at CPAC. This post NEEDS to go viral!!!! Please Repost!!!

The whole system is a Ponzi scheme!!!

“The government is financed by printing money out of thin air.” —- President of El Salvador

"If the government can print money out of thin air, then why do we pay taxes. The government is funded by money printing, paper backed by paper. If most Americans and the rest of the world were to become aware of this farce, confidence in your currency would be lost, the dollar will fall and the western civilization with it. " ---Nayib Bukele

And now it’s becoming SO obvious that EVERYONE is talking about it.

"Fight for your freedoms." - Nayib Bukele

End the FED. End globalism!!!!

"The Global elites hate our success and they fear yours!!! The global elites finance campaigns, control the mainstream media, persecute political opponents. This is the free press that they talk about?? Please!!! I find that hypocritical. Institutions were created to serve the people and not the other way around." ----Nayib Bukele

Money Game Premiere below:
https://lnkd.in/eSf9U2YM

Someone should make a movie to timestamp the biggest currency shift in history. Premiering on April 13th, 2024 in Boston.
JUST IN: El Salvador President Nayib Bukele Warns Of 'Dark Forces' In Anti-Crime Speech At CPAC
JUST IN: El Salvador President Nayib Bukele Warns Of 'Dark Forces' In…
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JUST IN: El Salvador President Nayib Bukele Warns Of 'Dark Forces' In Anti-Crime Speech At CPAC (youtube.com)

YOU MUST WATCH IF YOU REALLY WANT TO KNOW - PLEASE LISTEN AND COMMENT OR CALL ME AND I WILL GIVE YOU THE SUMMARY WITHIN 30 MINUTES !!!

ESPECIALLY WATCH FROM 42 Minutes to 52 Minutes INCREDIBLE EXPLANATION - RUSSIA CRIMEA UKRAINE PUTIN AND EVERYTHING !!!

Bruce Warren Margolese
438 995 2549

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John Mearsheimer: Israel-Palestine, Russia-Ukraine, China, NATO, and WW3 | Lex Fridman Podcast #401 (youtube.com)

Piers Morgan vs John Mearsheimer | On Putin, Israel-Hamas And More (youtube.com)

Piers Morgan vs John Mearsheimer | On Putin, Israel-Hamas And More (youtube.com)

Opinion: If China and Russia combine forces, they’d be a major threat to American hegemony - The Globe and Mail

OPINION

If China and Russia combine forces, they’d be a major threat to American hegemony

MICHAEL IGNATIEFF

VIENNA

CONTRIBUTED TO THE GLOBE AND MAIL

PUBLISHED YESTERDAY

FOR SUBSCRIBERS

LISTEN TO THIS ARTICLE CALL Bruce Warren Margolese at 438 995 2549 to listen if you are not a Subscriber.

Michael Ignatieff is an author, former Liberal Party leader, and professor of history and rector emeritus of Vienna’s Central European University.

Ukraine has about a month before it runs out of artillery shells, and the U.S. Congress cannot agree to ship more. Russian opposition leader Alexey Navalny is dead. The slaughter in Gaza continues with no end in sight. The Yemeni Houthis are attacking ships in the Red Sea. The North Koreans are testing intercontinental ballistic missiles. In normal times, pessimism can look like an intellectual fad. In times like these, it becomes a starker form of realism.

The post-1945 world order – written into international law, ratified by the United Nations, and kept in place by the balance of nuclear terror among major powers – is hanging by a thread. The United States is divided against itself and stretched to the limits of its capabilities. Europe is waking up to the possibility that, come November, America may no longer fulfill its collective-defense obligations under Article 5 of the NATO treaty.

The Western alliance doesn’t just face the challenge of doubling down on defense while maintaining unity across the Atlantic. It also now faces an “axis of resistance” that might be tempted to threaten Western hegemony with a simultaneous, coordinated challenge. The linchpin of this axis is the Russia-China “no-limits” partnership. While the Chinese supply the Russians with advanced circuitry for their weapons systems, Russian President Vladimir Putin ships them cheap oil. Together they have imposed autocratic rule over most of Eurasia.

If Ukraine’s exhausted defenders are forced to concede Russian sovereignty over Crimea and the Donbas region, the Eurasian axis of dictators will have succeeded in changing a European land frontier by force. Achieving this will threaten every state on the edge of Eurasia: Taiwan, the Baltic countries, and even Poland. Both dictatorial regimes will use their vetoes on the UN Security Council to ratify conquest, effectively consigning the UN Charter to history’s dustbin.

This partnership of dictators works in tandem with a cluster of rights-abusing renegades, led by Iran and North Korea. The North Koreans provide Mr. Putin with artillery shells while plotting to invade the rest of their peninsula. The Iranians manufacture the drones that terrorize Ukrainians in their trenches. Meanwhile, Iran’s proxies – Hamas, Hezbollah, and the Houthis – are helping Russia and China by tying down America and Israel.

The idea that democracies around the world will join up with America and Europe against the authoritarian threat seems like an illusion. Instead of joining with the embattled democracies of the Global North, the rising democracies of the Global South – Brazil, India, and South Africa – seem unembarrassed to be aligning with regimes that rely on mass repression, the cantonment of entire populations (the Uyghurs in China), and shameless murder (Mr. Navalny being only the most recent example).

What comes after the post-Wall world?
To be sure, the authoritarian axis currently is united only by what it opposes: American power. It is otherwise divided by its ultimate interests. The Chinese, for example, cannot be overjoyed that the Houthis are blocking freight traffic through the Red Sea. The world’s second most powerful economy doesn’t have all that much in common with an impoverished Muslim resistance army or with theocratic Iran.

Moreover, both Russia and China remain parasitic beneficiaries of a global economy that is sustained by U.S. alliances and deterrence. That is why they still hesitate to challenge the hegemon too directly. However, like sharks, they smell blood in the water. They have not only survived U.S. sanctions but continued to prosper, replacing their dependence on embargoed markets with new markets in Latin America, Asia, and India. Both Russia and China have discovered that American control of the global economy is not what it once was.

This discovery of American weakness might tempt them to risk a joint military challenge. It doesn’t take strategic genius to see the opportunity China and Russia might be contemplating. If they decided to mount an overt challenge to the American order – for example, with a co-ordinated, simultaneous offensive against Ukraine and Taiwan – the U.S. would struggle to rush weapons and technology into the breach.

Nuclear weapons would not necessarily deter China and Russia from risking a coordinated attempt to take Taiwan and the rest of Ukraine. All parties would pay a horrendous price, but Russia has shown what it is willing to expend in Ukraine, and both China and Russia may believe that there will never be a more opportune moment to overthrow American hegemony. If they were to combine forces, we would face the most serious challenge to the global economic and strategic order since 1945.

Nobody has any idea what the world would be like on the other side of such a confrontation. We cannot even assume, as we have always done, that America would prevail if faced with a simultaneous challenge from two formidable powers. If a pessimist is someone who imagines the worst in order to forestall it, we should all be pessimists. Keeping the authoritarian axis from becoming a full-fledged alliance should be America’s first-order priority.

Copyright: Project Syndicate, 2024.

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Harald Berlinicke, CFA

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Why is the VIX so low? (It's been a graveyard hedging trade for defensive managers.)

The Financial Times with an interesting explanation attempt as to why the VIX index has been so low for so long:

"People have argued that the VIX index is too low. Some attribute this to the surge in zero-day options trading. The Bank for International Settlements has another theory.

The BIS doesn’t disagree that the so-called 0DTEs have become wildly popular, noting that they accounted for >𝟓𝟎% of all SPX options trading volume in 08/2023, up from only 𝟓% last in 2016. The attractions are the immense leverage & massive payoffs that are possible from these quickfire lottery-ticket options, which as the name implies expire at the end of the day they’re bought. While the annualized returns of 0DTE options is -𝟑𝟐,𝟎𝟎𝟎% they can 'on rare occasions' generate returns of up to 𝟕𝟗,𝟎𝟎𝟎%. Meanwhile, boring old monthly options only have an average annual return of -550% and a maximum payout of 2,500%, according to BIS.

However, the BIS is skeptical that the migration of investor interest away from 1-month options to daily ones explains the decline in the VIX, which uses 1-month options to calculate its spot level. To blame instead is the rising demand for structured products (SPs) built by investment banks and sold to 𝐲𝐢𝐞𝐥𝐝-𝐡𝐮𝐧𝐠𝐫𝐲 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬.

This is because of dealer hedging to limit exposure to sudden market moves.
A classic example of a yield-enhancing SP is a so-called '𝐜𝐨𝐯𝐞𝐫𝐞𝐝 𝐜𝐚𝐥𝐥': a purchase of the S&P 500 index and a simultaneous sale of a 1-month call option on the index. The SP gives an exposure to the index and generates a yield enhancement with the sale of the call option (the premium income), but it gives up part of the upside if the index rises above a threshold, say 5% over the next month. In other words, an investor in this covered call effectively takes the view that the market will not rise more than 5% over the next month and monetizes this view by selling the call option.

The rise of yield-enhancing SPs may dampen volatility due to the mechanics of how dealers hedge option exposures. When dealers sell such SPs, they effectively buy an option from their clients. To hedge the option exposure, dealers trade in the underlying asset (the equity index) as a function of its price. Specifically, they need to buy when the index goes down and sell when it goes up – a practice known as '𝐝𝐲𝐧𝐚𝐦𝐢𝐜 𝐡𝐞𝐝𝐠𝐢𝐧𝐠'. By doing so, dealers act in a contrarian way, effectively dampening the price movements of the underlying asset. Such market dynamics could explain why the VIX can be depressed even in an environment of heightened uncertainty. The meteoric rise of yield-enhancing SPs linked to the S&P 500 over the last two years has gone hand in hand with the drop of VIX over the same period."

(+++Opinions are my own. Not investment advice. Do your own research.+++)

#markets #investing #money #wealthmanagement
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1. Takeaways
2. Why is the VIX index so low?
3. How do dealers hedge option exposures?
4. What is the impact of yield-enhancing SPs on volatility?

Sarnia Asset Management | Low portfolio turnover is key when it comes to investment performance (sarnia-am.com)

The best performing stock market mutual funds generally trade less frequently than their peers who trade more regularly, even when looking at those funds with high active share.

“Our favorite holding period is forever.”
– Warren Buffett

“Buy good companies, don’t overpay and do nothing.”
– Terry Smith

It’s easy to conjure up the stereotypical image of the stock-market operator, sat looking at his six screens all day and placing trades as the news flows in. But in reality, those investors who trade frequently seldom make the best returns – and in actual fact, at the extreme end of the spectrum, the vast majority of trading accounts lose money, with only a fraction going on to be successful over the long term.

The trouble is that as active investors many of us tend to automatically assume that we must take constant action in response to all the myriad events taking place in the world in order to adjust our portfolios. Yet time and again, the evidence shows that those who trade the least often tend to perform the best over the long term.
We must be careful not to conflate active management and high portfolio turnover (frequent trading). An active manager can be active in the sense that they have a high active share (the portion of a portfolio that differs from the constitution of the benchmark index) but at the same time relatively inactive in the sense that they don’t trade very regularly.

In fact, many of the most successful active investors place a lot of emphasis on inaction: the quotes featured at the beginning of this article are testament to that.

Investors like Warren Buffett and celebrated British fund manager Terry Smith pride themselves on ‘owning businesses’ rather than ‘renting stocks’, which means they have lower portfolio turnover and hold onto their positions for many years – and sometimes many decades – at a time.

Funds With A Low Portfolio Turnover And High Active Share Outperform
The evidence shows that funds with a low portfolio turnover and a high active share tend to outperform their high-turnover counterparts on average.

In a paper published in the Journal of Financial Economics in 2016, Cremers and Pareek found that among high active share funds, only patient funds with long holding durations (top quintile of active share and bottom quintile of portfolio turnover) were able to outperform as a group in the period following portfolio construction. These funds outperformed their benchmark by more than 2% per year on average, whereas frequently trading mutual funds systematically underperform their benchmarks, with the top quintile of short duration funds showing 1.4% underperformance per annum on average.

Cremers and Pareek conclude that their results “underscore the importance of distinguishing between truly active and closet index funds, and, among truly active funds, between managers pursuing short-term mispricing (generally unsuccessfully in our sample) and managers who patiently (and in our sample on average successfully) follow a buy-and-hold strategy with a distinct portfolio.”

Why Do Active Managers With Low Portfolio Turnover Tend To Outperform?
What could be the reasons behind the tendency of active managers with a low portfolio turnover to outperform?

1. Less distracted by noise: Managers that trade less frequently are less likely to chase stock performance and follow the investing ‘herd’ just because something is popular at the time. By the same token, they are less likely to become fearful and sell due to some negative news flow that impacts performance in the short term.
2. More time for thesis to bear fruit: Fund managers who hold onto a stock for longer have more time for their original investment thesis to play out. Whilst it is practically impossible to gain an informational edge in the very short term, it is possible to do so over the long term if you do your research properly and pick the right stocks. Holding onto positions for longer means there is more time for an informational edge to compound and for compound interest to work its magic.
3. Higher levels of conviction: Managers who hold on to stocks for longer are more likely to have high conviction in those positions, which suggests a greater level of understanding and research.

Why Do Active Managers Tend To Have A High Portfolio Turnover?
If the evidence points to a low portfolio turnover being a major factor in driving investment performance, then why do so many active fund managers trade so frequently in practice?

1. Performance chasing: Reporting and remuneration for most funds is carried out on a monthly, quarterly and annual basis, which means that it is often in the manager’s interest to utilize “window dressing”. This is where a manager sells stocks with large losses and buys stocks that are flying high, in the hope of boosting the fund’s short-term performance.
2. To justify ‘active’ fees: Active managers often feel the need to justify their fees by being… well… active. This can lead them to trade and make adjustments to their portfolio in reaction to a particular circumstance or event. However, being reactive rather than proactive is seldom a desirable trait in a fund manager.
3. Regulations and mandates: Many mainstream funds are governed by rules set down by their regulators which set certain criteria for portfolio composition, including a limit on the level of portfolio concentration and a minimum number of portfolio holdings etc. This can prompt a fund manager to make portfolio adjustments when they otherwise might not have in the absence of such constraints.

Much of the bad press that active managers have attracted of late stems from the fact that many so-called active managers have a low active share and a high portfolio turnover, which naturally leads to a regression towards the mean. This has led to the criticism that few active managers can justify their fees – with which we wholeheartedly agree. The managers that do justify their fees tend to have a high active share and a low portfolio turnover – which is what investors who believe in active investing should look out for.

Disclaimer: This blog is intended for informational purposes only. This blog is not intended to invite, induce or encourage any persons to engage in any investment activities and is not a solicitation or an offer to buy or sell any stock, investment product or other financial instruments. If in doubt, please seek financial advice from an independent financial adviser. Sarnia Asset Management is licensed by the Guernsey Financial Services Commission (GFSC). Past performance is not an indication of future returns. Investments carry risk, including the risk that you will not recover the sum that you invested.
By James Faulkner

Canada: The Bloody Wedge Between America and Russia PART 1 and 2 (substack.com)

In this first of two episodes of Tim Kirby Russia, the theme of Canada's Untold History is tackled with a recasting of history as you've never imagined. Not only is the myth of Canadian nationalism largely a British-shaped chimera, but the historic role of Canada as a British imperial wedge blocking US-Russian cooperation (and anti-American operations from Montreal and Toronto) has also been an integral part of the northern monarchy's dark legacy. In this first of two parts, we explore the origins of British Canada from 1763 to 1863.

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In this second episode we continue where we left off in part 1 by reviewing the British instigation of the Civil War and the true causes for Czar Alexander II's deployment of the Russian Navy to the USA in defense of the republic and also the sale of Alaska in 1867. From this vantage point, a better appreciation for the dynamics in British Canada can be understood shaped by the opposing worldviews of republican nationalists friendly to Lincoln vs those pro-imperial traitors like Sir John A MacDonald who wished to keep Canada under British control and as a wedge between US-Russian cooperation. We review several major battles that occured over the ensuing century between these two opposing paradigms in the Americas leading up to the FDR networks in Canada during and after WWII.

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If you want to read the Untold History of Canada series or the Clash of the Two Americas, click here:

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