en "Carnival Barker" Krugman & The Inevitable Weimar Endgame <p><a href=""><em>Authored by Jeffrey Snider via Alhambra Investment Partners,</em></a></p> <p><span style="color: #000000;"><strong>Who President Trump ultimately picks as the next Federal Reserve Chairman doesn&rsquo;t really matter. </strong>Unless he goes really far afield to someone totally unexpected, whoever that person will be will be largely more of the same. It won&rsquo;t be a categorical change, a different philosophical direction that is badly needed.</span></p> <p><span style="color: #000000;"><strong>Still, politically, it does matter to some significant degree.</strong> It&rsquo;s just that the political division isn&rsquo;t the usual R vs. D, left vs. right. That&rsquo;s how many are making it out to be, and in doing so exposing what&rsquo;s really going on.</span></p> <p><u><em><strong><span style="color: #000000;">As usual, the perfect example for these divisions is provided by Paul Krugman. The Nobel Prize Winner ceased being an economist a long time ago, and has become largely a partisan carnival barker. He opines about economic issues, but framed always from that perspective.</span></strong></em></u></p> <p><span style="color: #000000;">To the very idea of a next Fed Chair beyond Yellen, he wrote <a href="">a few weeks ago</a>,<em><strong> &ldquo;we&rsquo;re living in the age of Trump, which means that we should actually expect the worst.&rdquo; </strong></em>Dr. Krugman wants more of the same, and Candidate Trump campaigned directly against that. As such, there is the non-trivial chance that President Trump lives up to that promise.</span></p> <p><span style="color: #000000;">Again, it sounds like a left vs. right issue, but it isn&rsquo;t. The political winds are changing, and the parties themselves are being realigned in different directions (which is not something new; there have been several re-alignments throughout American history even though the two major parties have been entrenched since the 1850&rsquo;s when Republicans first appeared). Who the next Fed Chair is could tell us something about how far along we are in this evolution.</span></p> <p><span style="color: #000000;">What Krugman wants, meaning, it is safe to assume, what all those like him want, is simple: success. <strong>He believes that the central bank has given us exactly that, therefore it is stupid to upset what works.</strong></span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">In particular, both Bernanke and Yellen responded effectively to a once-in-three-generations economic crisis despite constant heckling from back-seat drivers in Congress and on the political right in general. And their intellectual and moral courage has been completely vindicated by events.</span></p> </blockquote> <p><span style="color: #000000;"><strong>This is right here is the very central point of political difference that is pulling the world slowly apart.</strong> Krugman offers no evidence for his assertion, that the Fed has performed admirably and successfully, he just states it as if it was so (a common tactic in the mainstream, the fallacy of authority). <strong>Whenever challenged on this contention, the argument will always go back to &ldquo;jobs saved.&rdquo;</strong></span></p> <p><img class="aligncenter size-full wp-image-47900" src="" style="width: 600px; height: 348px;" /></p> <p><span style="color: #000000;"><strong>A worse counterfactual downside is not a rational standard for evaluation in any discipline or context. </strong>The only benchmark that should matter is recovery, as any economy facing recession, even an unusually severe one, <em>has</em> to make it back to the prior condition. On that score the Fed has utterly and unambiguously failed.</span></p> <p><span style="color: #000000;">One reason for it is the one thing Economists like Krugman never bring up; the 2008 panic. How can anyone claim the Fed under Yellen or Bernanke performed even minimally well?<strong> The very fact that the panic <em>happened at all</em> is a direct indictment on monetary policy and the people who were there during it (you had<em> one</em> job to do!).</strong></span></p> <p><img class="aligncenter size-full wp-image-47901" src="" style="width: 600px; height: 341px;" /></p> <p><img class="aligncenter size-full wp-image-47902" src="" style="width: 600px; height: 351px;" /></p> <p><img class="aligncenter size-full wp-image-47903" src="" style="width: 599px; height: 446px;" /></p> <p><span style="color: #000000;">That&rsquo;s not really what is at issue here, only it has become one battle in what is a larger war.<strong> That struggle is betrayed in Krugman&rsquo;s own words by which he means to raise up both Bernanke and Yellen as examples of what needs to continue.</strong></span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">For more than a decade the Fed chair has been a distinguished academic economist &mdash; first Ben Bernanke, then Janet Yellen. You might wonder how such people, who have never been in the business world, who have never met a payroll, would deal with real-world economic problems; the answer, in both cases: superbly&hellip;</span></p> <p> </p><p><span style="color: #000000;">Given this track record, you might expect to see either Yellen reappointed or an equally qualified technocrat take her place.</span></p> </blockquote> <p><span style="color: #000000;"><strong>This is all really about Economics. <em>It</em> has failed and most publicly so in the form of its principle public adherents in the Federal Reserve piloted by Bernanke and Yellen. The technocratic stars of the faith have been dramatically dimmed by events. </strong>Economists are not scientists, clearly, and so they are desperately seeking to circle the wagons by rewriting history; the last ten years weren&rsquo;t all that bad, and they really could have been worse if it wasn&rsquo;t for Economics.</span></p> <p><span style="color: #000000;"><strong>The irrational, emotional defense for the ideology is what is driving political upheaval, including Donald Trump&rsquo;s occupying the White House.</strong> </span></p> <p><span style="color: #000000;"><u><em><strong>To most people, Krugman&rsquo;s ideas and assertions are nonsense. </strong></em></u>They don&rsquo;t have to know anything about QE&rsquo;s effect on the TBA market and dollar rolls, how exactly McDonald&rsquo;s was borrowing from FRBNY, or what it was that AIG did that ultimately made the Federal Reserve profits. <strong><em><u>People know the Fed did a bunch of stuff that didn&rsquo;t work because they can tell there is something very wrong with the economy.</u></em></strong></span></p> <p><img class="aligncenter size-full wp-image-47758" src="" style="width: 600px; height: 351px;" /></p> <p><span style="color: #000000;"><strong>And after ten years of being told not to worry about it, or that it was being expertly handled, the people are Fed up with the defense of ideology first at the expense of actual answers.</strong> That&rsquo;s really where we are; Economics has no more solutions (more QE!), therefore Economists have been forced to re-evaluate everything but only along those lines. <em><strong>If Economics can&rsquo;t solve the problem, then they believe this has to be as good as it gets. And everyone should just stop complaining and appreciate the heroic and inspired effort that &ldquo;saved&rdquo; so many &ldquo;jobs.&rdquo;</strong></em></span></p> <p><span style="color: #000000;"><u><strong>Trump&rsquo;s candidacy, as Bernie Sanders&rsquo;, as an ideal was a grave threat to the status quo because it started with the premise that, no, this isn&rsquo;t as good as it can be and that we need to look for real solutions. </strong></u>Whether he forwards that ideal as President is and has been another matter, and who he picks as Fed Chair might be some small indication of where he currently stands consistent with that idea, or perhaps having second thoughts about it.</span></p> <p><strong><span style="color: #000000;">The technocracy doesn&rsquo;t work because it isn&rsquo;t technically competent (thus 2008).</span></strong></p> <p><span style="color: #000000;">That&rsquo;s the real political debate in 2017 and going forward; <em><strong>technical incompetence where the defense of the technocracy refuses to even allow the suggestion that this might be true.</strong></em> I go back to Weimar Germany not because I expect a global hyperinflationary breakdown, but in how that one particular form of systemic breakdown exposed timeless flaws inherent in all economic and financial systems. They all run to some extent <a href="">on trust and (good) faith</a>:</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">In other words, German monetary officials, particularly Reichsbank head Rudolf von Havenstein and Minister of Finance Karl Helfferich, denied that Germany had an inflation problem at all &ndash; right up until the end. Minister Helfferich declared that Germany had better gold coverage after the war than before it, despite that more than quadrupling of currency volume. One economics professor, Julius Wolf, wrote in 1922 that, &ldquo;in proportion to the need, less money circulates in Germany now than before the war.&rdquo; </span></p> <p>&nbsp;</p> <p><span style="color: #000000;">As much as the easy-to-see Versailles excuse played a part, there can be no doubt that <em><strong>beyond 1921 the German people themselves began to recognize that authorities had no idea what they were doing</strong></em>; worse, they came to see that <em><strong>even though policymakers were inept and incompetent, officials themselves would never admit as much and thus nothing would prevent Germany from its fate</strong></em>. That awakening meant an increase in danger that French occupation could never have unleashed on its own.</span></p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="741" height="387" alt="" src="" /> </div> </div> </div> AIG Ben Bernanke Ben Bernanke Ben Bernanke Bernie Sanders Congress Donald Trump Economic policy of Donald Trump Economics Economist Economy Federal Reserve Fellows of the Econometric Society Germany Guggenheim Fellows Janet Yellen Janet Yellen Krugman Monetary Policy Paul Krugman Paul Krugman Recession recovery US Federal Reserve White House White House Sat, 21 Oct 2017 23:15:00 +0000 Tyler Durden 605752 at Blockchain Explained (In 120 Seconds) <p>Last week we offered the <em><strong><a href="">ultimate beginner&#39;s guide to WTF Blockchain is</a></strong></em>. However, for those with even shorter attention spans - squirrel - <a href="">WIRED magazine</a> has managed to explain why there is such fervor surrounding the blockchains in under two minutes.</p> <p><strong><a href="">Saving the planet</a>,&nbsp;<a href="">fixing healthcare</a>,&nbsp;<a href="">replacing conventional currency</a> - there is apparently nothing that the shared-database technology known as blockchains can&rsquo;t fix.</strong> At least, that&rsquo;s the impression given by the horde of&nbsp;<a href="">governments</a>,&nbsp;<a href="">banks</a>, entrepreneurs, and&nbsp;<a href="">tech companies </a>working on the technology.</p> <p><em><strong>But what&nbsp;is&nbsp;a blockchain and why the excitement?</strong></em> If you&rsquo;ve got 2 minutes, <a href="">WIRED </a>can explain...</p> <script async src="//"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="362" height="192" alt="" src="" /> </div> </div> </div> Bitcoin Blockchains Computing Cryptocurrencies Health Information Information science shared-database technology Technology Sat, 21 Oct 2017 22:50:00 +0000 Tyler Durden 605751 at First A.I. ETF Claims It Can Replace An Army Of Research Analysts <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;Look Dave, I can see you&rsquo;re really upset about this. I honestly think you ought to sit down calmly, take a stress pill and think things over.&rdquo;</em></p> <p>&nbsp;</p> <p>From Stanley Kubrick&rsquo;s 2001: A Space Odyssey.</p> </blockquote> <p>As if MiFID II wasn&rsquo;t bad enough, now this <strong>&ldquo;EquBot AI Technology with Watson has the ability to mimic an army of equity research analysts working around the clock, 365 days a year, while removing human error and bias from the process.&rdquo; </strong>That is the claim of Chida Khatua, the ETF&rsquo;s<strong> </strong>CEO.<strong> </strong>Unlike the existing algos used by quant funds, A.I. &nbsp;&nbsp;the ability to learn from its mistakes without further requiring programming.</p> <p>This week, EquBot LLC, in partnership with ETF Managers Group (ETFMG) launched the world&rsquo;s first ETF powered by artificial intelligence, the AI Powered Equity ETF (NYSE Arca: <a href=";;esheet=51701190&amp;newsitemid=20171018005986&amp;lan=en-US&amp;anchor=AIEQ&amp;index=1&amp;md5=c203f9cf54d6c5af21094dfdb9144b48" target="_blank">AIEQ</a>). According to Business Wire, <em><strong>the new ETF uses &ldquo;cognitive and big data processing abilities of IBM Watson&trade; to analyze U.S.-listed investment opportunities&rdquo;.</strong></em></p> <p>For those in the dark as far as &ldquo;Watson&rdquo; is concerned, it&rsquo;s Wiki entry notes &ldquo;Watson is a <a href="" title="Question answering">question answering</a> (QA) computing system that IBM built to apply advanced <a href="" title="Natural language processing">natural language processing</a>, <a href="" title="Information retrieval">information retrieval</a>, <a href="" title="Knowledge representation">knowledge representation</a>, <a href="" title="Automated reasoning">automated reasoning</a>, and <a href="" title="Machine learning">machine learning</a> technologies to the field of <a href="" title="Open domain question answering">open domain question answering</a>. Watson was named after IBM&#39;s first CEO, industrialist <a href="" title="Thomas J. Watson">Thomas J. Watson</a>. The computer system was specifically developed to answer questions on the <a href="" title="Quiz show">quiz show</a> <a href="!" title="Jeopardy!"><em>Jeopardy!</em></a> and, in 2011, the Watson computer system competed on <em>Jeopardy!</em> against former winners <a href="" title="Brad Rutter">Brad Rutter</a> and <a href="" title="Ken Jennings">Ken Jennings</a> winning the first place prize of $1 million. Watson had access to 200 million pages of structured and unstructured content consuming four <a href="" title="Terabyte">terabytes</a> of <a href="" title="Disk storage">disk storage</a>&hellip;but was not connected to the <a href="" title="Internet">Internet</a> during the game. For each clue, Watson&#39;s three most probable responses were displayed on the television screen. Watson consistently outperformed its human opponents on the game&#39;s signaling device, but had trouble in a few categories, notably those having short clues containing only a few words.&rdquo;</p> <p>Business Wire explained how EquBot makes investment decisions &ldquo;EquBot&rsquo;s approach ranks investment opportunities based on their probability of benefiting from current economic conditions, trends, and world- and company-specific events, and identifies those equities with the greatest potential for appreciation. EquBot and ETFMG expect the fund&rsquo;s portfolio to typically consist of 30 to 70 of U.S. equities only and volatility comparable to the broader U.S. equity market&hellip;the fund&rsquo;s underlying technology is constantly analyzing information for approximately 6,000 U.S.-listed equities, including company management and market sentiment, and processes more than one million regulatory filings, quarterly results releases, news articles, and social media posts every day.&rdquo;</p> <p>According to Chida Khatua, CEO and co-founder of EquBot LLC<strong><em> &ldquo;Machine learning is one of the most powerful applications of artificial intelligence. As powerful as many algorithms underlying expensive quantitative hedge funds and other vehicles might be, unless they&rsquo;re also built with AI and machine learning baked right in, mistakes can be propagated and opportunities for outperformance can be missed.&rdquo;</em></strong></p> <p><u><strong>Neither of the founders is lacking in confidence when discussing the potential for the new ETF. </strong></u>From Business Wire &ldquo;With the launch of AIEQ, we&rsquo;re not only bringing our new fund to market,&rsquo; said Art Amador, co-founder and COO of EquBot. &lsquo;We believe we&rsquo;re pioneering a whole new investment category; one that will soon have investors and advisors diversifying their portfolios among passive, active and AI approaches&rdquo;</p> <p>He added <strong><em>&ldquo;Everyday, there is more information, not less. That information explosion has made the jobs of portfolio managers, equity analysts, quantitative investors and even index builders more challenging.&rdquo;</em></strong></p> <p>He&#39;s not wrong there.</p> <p>A.I. might be the future of investing, although <strong>there have been funds that were so good (LTCM), they didn&rsquo;t need to post collateral.</strong> This is different, obviously as we&rsquo;re not just talking about a bunch of really &#39;brainy&#39; humans.</p> <p>But how sad will it be if we go from this...</p> <p><img alt="" src="" style="width: 500px; height: 389px;" /></p> <p>To this...</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 352px;" /></a></p> <p>To this...</p> <p><img alt="" src="" style="width: 500px; height: 326px;" /></p> <p>An end up with this...</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 287px;" /></a></p> <p><strong>The regulators are already doing their best to make the investment world less fun.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;Open the pod bays doors, HAL&rdquo;</em></p> </blockquote> <p><strong>Writing about this, we were reminded of another life or death confrontation between humans and technology in Stanley&rsquo;s Kubrick&rsquo;s &ldquo;2001: A Space Odyssey&rdquo;, which also had an oblique reference to an IBM computer.</strong> In the movie, there is an argument as to whether the failure of an antenna is due to human error, as the HAL 9000 insists, or HAL, as Mission Control advises. In the ensuing conflict, HAL initially gains the upper hand, kills Poole and almost kills Bowman. Bowman manages to re-enter the ship and get to HAL&rsquo;s processor core, regressing HAL to his first programmed memory.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;I know everything hasn&rsquo;t been quite right with me, but I can assure you now, very confidently, that it&rsquo;s going to be alright again. I feel much better now.&rdquo;</em></strong></p> </blockquote> <p><img alt="" src="" style="width: 500px; height: 257px;" /></p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="321" height="165" alt="" src="" /> </div> </div> </div> artificial intelligence Artificial intelligence Business Business Computing Economy HAL Hedge fund IBM machine learning machine learning technologies Market Sentiment natural language processing Power Architecture Technology underlying technology Volatility Watson Sat, 21 Oct 2017 22:25:00 +0000 Tyler Durden 605741 at Liberals Love Trump's Tax Plan (When Told It's Bernie's) <p>President Donald Trump&#39;s proposal for comprehensive tax reform was almost immediately dismissed as heartless and impractical by his political opponents.</p> <p><a href=""><img alt="" src="" style="width: 560px; height: 357px;" /></a></p> <p>But <a href="">Campus Reform</a> wondered<strong> what would some of those opponents think if they were told the same plan was being proposed by someone they adore - Senator Bernie Sanders?</strong></p> <p>To find out, we headed to George Washington University to ask students their opinions on Trump&rsquo;s new tax plan. WIthout much explanation, the students immediately made clear their distaste for the plan.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;It&rsquo;s not the most efficient, nor beneficial to the general populus,&rdquo; said one student when asked her opinion of Trump&rsquo;s plan.</p> <p>&nbsp;</p> <p>&ldquo;It&rsquo;s better for the upper class than anyone else,&rdquo; added another.</p> </blockquote> <p><strong>After watching student after student express their disapproval of the plan, we then asked those same students what they thought of Senator Bernie Sanders&rsquo; new tax plan.</strong></p> <p>Immediately, they expressed excitement and support after hearing the details of the plan.</p> <p><u><strong>The only problem for them?</strong></u> <strong><em>There was no tax plan for Senator Sanders. The plan they loved was actually President Trump&rsquo;s.</em></strong></p> <p>How did they react?</p> <p>Enjoy...</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p><a href="">Additionally as MishTalk&#39;s Mike Shedlock writes,</a> unsurprisingly, <strong>Students Despise Obama Policies...When Credited to Trump.</strong></p> <p>In anticipation of the 100-day mark of Donald Trump&#39;s presidency, Campus Reform asked students at George Mason University to evaluate some of the president&#39;s accomplishments.</p> <p><em><strong>The students predictably blasted things like the &quot;Apology Tour&quot; and stimulus package, even comparing them to Nazi policies, at least until learning that they were actually accomplished during President Obama&#39;s first 100 days.</strong></em></p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <h3><a href=""><u><strong>What&#39;s Going On</strong></u></a></h3> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>1. These students are <strong>so brainwashed by mainstream media they respond to the person, not the idea. </strong></p> <p>&nbsp;</p> <p>2. More fundamentally, the <strong>students know nothing of current events or they would not fall for these types of gotchas. </strong></p> </blockquote> <p>To be fair, we do not know the percentage of students who did not fall for the traps. However, I <strong>strongly suspect the vast majority of the students (and most likely the average person on the street, not just students) would tend react to the person, not the issue.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="505" height="322" alt="" src="" /> </div> </div> </div> Bernie Sanders Bernie Sanders Bernie Sanders presidential campaign Donald Trump Education George Mason University George Washington University Jews Politics of the United States Presidency of Donald Trump President Obama Vermont Sat, 21 Oct 2017 22:00:00 +0000 Tyler Durden 605750 at "We Can't Welcome All The World's Poor" - Macron Unveils Crackdown On Criminal Illegal Aliens <p>Two years after the European Commission carried out the bidding of German Chancellor Angela Merkel by approving a plan to distribute migrants entering the Schengen area through Greece and Italy evenly across the European Union, the people of Europe have made their displeasure with Merkel&rsquo;s &ldquo;open door&rdquo; policy abundantly clear.</p> <p>Last month, Merkel&rsquo;s Christian Democratic Union suffered its most embarrassing showing in a federal election in decades, allowing a far-right, anti-immigrant party into parliament for the first time since World War II. <strong>The Alternative for Germany party&rsquo;s unexpectedly strong showing fractured the ruling coalition spearheaded by Merkel&rsquo;s conservatives as her partners, the Social Democrats opted to rebuild in opposition, complicating Merkel&rsquo;s attempts to form a ruling coalition. </strong></p> <p>In what was widely celebrated by the right as an important public capitulation, Merkel announced that her government would consider implementing a refugee cap of 200,000 (far larger than the cap adopted by the Trump administration). While it&rsquo;s unclear whether the cap will ultimately become law, the fact that Merkel has publicly acknowledged the failure of open doors was interpreted as a sea change in Europe&rsquo;s response to the worsening migrant crisis.</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 276px;" /></a></p> <p>And now, French President Emmanuel Macron - Merkel&rsquo;s de facto partner in leading the European project - has himself made a small but important concession to the growing anti-immigrant sentiment in France, which, like many of its neighbors in western Europe, has suffered a horrific string of terror attacks inspired or actively organized by the Islamic State, the <a href=";utm_medium=social&amp;;utm_campaign=buffer">South China Morning Post </a>reported.</p> <p>In a wide ranging interview this week, Macron revealed a new policy whereby illegal immigrants who commit crimes in France will face deportation. Presently, being an illegal immigrant in France isn&rsquo;t a criminal offense.</p> <p><strong>Even without new legislation &ldquo;we can take tougher measures&rdquo; and expel illegal immigrants if they commit a crime, &ldquo;whatever it may be,&rdquo; </strong>Macron said.</p> <p>Shortly before the policy change, a Tunisian man stabbed two women to death in the southern city of Marseille. The man had been arrested two days earlier for shoplifting in eastern Lyon, stoking speculation that it could&rsquo;ve been prevented.</p> <p>Ahmed Hanachi, a 29-year-old whose papers were not in order, had been allowed to walk free the day before he attacked the women. Hanachi was known to the police for drug as well as alcohol problems and had a history of petty crime, using seven aliases.</p> <p><strong>&ldquo;We are not taking all the steps that should be taken. Well, that&rsquo;s going to change,&rdquo;</strong> Macron told three journalists who interviewed him for more than an hour at the Elysee Palace.</p> <p>Macron, who at 39 became the youngest person ever to win the French presidency following after defeating far-right National Front candidate Marine Le Pen in a runoff vote. While Macron ultimately came away with a win, the National Front&rsquo;s surprisingly strong showing has forced Macron&rsquo;s centrist government to rethink its stance on immigration and the refugee crisis.</p> <p>The French president repeated his call for a crackdown on criminal illegal immigrants during a speech to federal police later in the week <strong>where he also announced a federal increase in domestic security funding to help combat terrorism, </strong>according to <a href="">France 24.</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;We don&rsquo;t welcome people well, our procedures are too long, we don&rsquo;t integrate people properly and neither do we send enough people back,&quot; </strong>he said, while repeating former prime minister Michel Rocard&rsquo;s axiom that: <strong>&quot;We should take our fair share, but we can&rsquo;t just welcome in all the world&rsquo;s poor people.&rdquo;</strong></p> </blockquote> <p>Notably, Macron&rsquo;s crackdown on crime comes as his approval rating has slid from 60%&nbsp; in June to 44% this month, according to polling by Ifop/Fiducial.</p> <p>Terror attacks have plagued western Europe in recent years as millions of migrants from Africa, Syria, Afghanistan and elsewhere poured across the borders of southern European states like Italy and Greece. The crisis has led to a political divide between western and eastern Europe, as EU members like Poland, Hungary and the Czech Republic <strong>have refused Europe&rsquo;s demands to take in migrants. While we wouldn&rsquo;t want to confuse correlation with causation, there are several notable gaps in this map of terror attacks since the beginning of the refugee crisis&hellip;</strong></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 311px;" /></a></p> <p><em>...see if you can spot them.</em><br />&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="558" height="308" alt="" src="" /> </div> </div> </div> Afghanistan Angela Merkel China Christian Democratic Union Conservatives Czech Demography Eastern Europe Eastern Europe Emmanuel Macron Europe European Commission European migrant crisis European Union European Union France Germany Germany party Government of Andorra Greece Human migration Hungary Illegal immigration Italy Marine Le Pen National Front Opposition to immigration Poland Politics Social Issues South China Trump Administration western Europe Sat, 21 Oct 2017 21:30:00 +0000 Tyler Durden 605739 at In The Shadows Of Black Monday - "Volatility Isn't Broken... The Market Is" <p><a href=""><em>Authored by Christopher Cole via Artemis Capital Management,</em></a></p> <p><strong>A full version of the article is <a href="">available on the Artemis website</a>. </strong></p> <h2><u>Volatility and the Alchemy of Risk</u></h2> <p>The Ouroboros, a Greek word meaning &lsquo;tail devourer&rsquo;, is the ancient symbol of a snake consuming its own body in perfect symmetry. The imagery of the Ouroboros evokes the infinite nature of creation from destruction. The sign appears across cultures and is an important icon in the esoteric tradition of Alchemy. Egyptian mystics first derived the symbol from a realphenomenon in nature. In extreme heat a snake,unable to self-regulateitsbody temperature,will experience an out-of-control spike in its metabolism. In a state of mania, the snake is unable to differentiate its own tail from its prey,and will attack itself, self-cannibalizing until it perishes. <strong>In nature and markets, when randomness self-organizes into too perfect symmetry, order becomes the source of chaos.</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 397px;" /></a></p> <p><strong>The Ouroboros is a metaphor for the financial alchemy driving the modern Bear Market in Fear.</strong> Volatility across asset classes is at multi-generational lows. A dangerous feedback loop now exists between ultra-low interest rates, debt expansion, asset volatility, and financial engineering that allocates risk based on that volatility. In this self-reflexive loop volatility can reinforce itself both lower and higher. In a market where stocks and bonds are both overvalued, financial alchemy is the only way to feed our global hunger for yield, until it kills the very system it is nourishing.</p> <p><strong>The Global Short Volatility trade now represents an estimated $2+ trillion in financial engineering strategies that simultaneously exert influence over, and are influenced by, stock market volatility.</strong> We broadly define the short volatility trade as any financial strategy that relies on the assumption of market stability to generate returns, while using volatility itself as an input for risk taking. Many popular institutional investment strategies, even if they are not explicitly shorting derivatives, generate excess returns from the same implicit risk factors as a portfolio of short optionality, and contain hidden fragility.&nbsp;&nbsp;</p> <p><strong>Volatility is now an input for risk taking and the source of excess returns in the absence of value.</strong> Lower volatility is feeding into even lower volatility, in a self-perpetuating cycle, pushing variance to the zero bound. To the uninitiated this appears to be a magical formula to transmute ether into gold&hellip; volatility into riches&hellip; however financial alchemy is deceptive. Like a snake blind to the fact it is devouring its own body, the same factors that appear stabilizing can reverse into chaos. The danger is that the multi-trillion-dollar short volatility trade, in all its forms, will contribute to a violent feedback loop of higher volatility resulting in a hyper-crash. At that point the snake will die and there is no theoretical limit to how high volatility could go.</p> <p><a href=""><strong><em><img alt="" src="" style="width: 600px; height: 247px;" /></em></strong></a></p> <p>Thirty years ago to the day we experienced that moment. On October 19th, 1987 markets around the world crashed at record speed, including a -20% loss in the S&amp;P 500 Index, and a spike to over 150% in volatility. Many forget that Black Monday occurred during a booming stock market, economic expansion, and rising interest rates. In retrospect, we blame portfolio insurance for creating a feedback loop that amplified losses. In this paper we will argue that <u><strong>rising inflation</strong></u> was the spark that ignited 1987 fire, while computer trading served as explosive nitroglycerin that amplified a normal fire into a cataclysmic conflagration.<strong><em> The multi-trillion-dollar short volatility trade, broadly defined in all its forms, can play a similar role today if inflation forces central banks to raise rates into any financial stress.</em></strong> Black Monday was the first modern crash driven by machine feedback loops, and it will not be the last.</p> <p><strong>A reflexivity demon is now stalking modern markets in the shadows of a false peace&hellip; </strong>and could emerge violently given a rise in interest rates. Non-linearity and feedback loops are difficult for the human mind to conceptualize and price. The markets are not correctly assessing the probability that volatility reaches new all-time lows in the short term (VIX&lt;9), and new all-time highs in the long-term (VIX&gt;80). Risk alone does not define consequences. A person can engage in highly risky behavior and survive, and alternatively a low risk activity can result in horrible outcomes. Those who defend and profit from the short volatility trade in its various forms ignore this fact.&nbsp; Do not mistake outcomes for control&hellip; remember, <em><u><strong>There is no such thing as control&hellip; there are only probabilities.</strong></u></em></p> <h2><u>The Great Snake of Risk</u></h2> <p><strong>A short volatility risk derives small incremental gains on the assumption of stability in exchange for a substantial loss in the event of change. </strong>When volatility itself serves as a proxy to size this risk, stability reinforces itself until it becomes a source of instability. The investment ecosystem has effectively self-organized into one giant short volatility trade, a snake eating its own tail, nourishing itself from its own destruction. It may only take a rapid and unexpected increase in rates, or geopolitical shock, for the cycle to unwind violently. It is not wise to expect that central banks will save financial markets if inflation begins to rise.</p> <p><a href=""><img alt="" src="" /></a></p> <p><strong>At the head of the Great Snake of Risk is unprecedented monetary policy.</strong> Since 2009 Global Central Banks have pumped in $15 trillion in stimulus creating an imbalance in the investment demand for and supply of quality assets. Long term government bond yields are now the lowest levels in the history of human civilization dating back to 1285. As of this summer there was $9.5 trillion worth of negative yielding debt globally. Last month Austria issued a 100-year bond with a coupon of only 2.1%(6) that will lose close to half its value if interest rates rise 1% or more. The global demand for yield is now unmatched in human history. None of this makes sense outside a framework of financial repression.&nbsp;</p> <p><strong>Amid this mania for investment, the stock market has begun self-cannibalizing&hellip; literally. </strong>Since 2009, US companies have spent a record $3.8 trillion on share buy-backs(7) financed by historic levels of debt issuance. Share buybacks are a form of financial alchemy that uses balance sheet leverage to reduce liquidity generating the illusion of growth. A shocking +40% of the earning-per-share growth and +30% of the stock market gains since 2009 are from share buy-backs. Absent this financial engineering we would already be in an earnings recession. Any strategy that systematically buys declines in markets is mathematically shorting volatility. To this effect, the trillions of dollars spent on share buybacks are equivalent to a giant short volatility position that enhances mean reversion. Every decline in markets is aggressively bought by the market itself, further lowing volatility. Stock price valuations are now at levels which in the past have preceded depressions including 1928, 1999, and 2007. The role of active investors is to find value, but when all asset classes are overvalued, the only way to survive is by using financial engineering to short volatility in some form.</p> <p>Volatility as an asset class, both explicitly and implicitly, has been commoditized via financial engineering as an <strong>alternative form of yield.</strong> Most people think volatility is just about options, however many investment strategies create the profile of a short option via financial engineering. A long dated short option position receives an upfront yield for exposure to being short volatility, gamma, interest rates, and correlations. Many popular institutional investment strategies bear many, if not all, of these risks even if they are not explicitly shorting options. The short volatility trade, broadly defined in all its forms, includes up to $60 billion in strategies that are <strong>Explicitly short volatility</strong> by directly selling optionality, and a much larger $1.42 trillion of strategies that are<strong> Implicitly short volatility</strong> by replicating the exposures of a portfolio that is short optionality. Lower volatility begets lower volatility, rewarding strategies that systematically bet on market stability so they can make even bigger bets on that stability. Investors assume increasingly higher levels of risk betting on the status quo for yields that look attractive only in comparison to bad alternatives. The active investor that does his or her job by hedging risks underperforms the market. Responsible investors are driven out of business by reckless actors. In effect, the entire market converges to what professional option traders call a &lsquo;naked short straddle&rsquo;&hellip; a structure dangerously exposed to fragility.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 544px;" /></a></p> <h3><em>Volatility is now at multi-generational lows...</em></h3> <p><strong>Volatility is now the only undervalued asset class in the world.</strong> Equity and fixed income volatility are now at the lowest levels in financial history. The realized volatility of the S&amp;P 500 Index collapsed to all-time lows in October 2017. The VIX index also touched new lows around the same time. Fixed income implied volatility fell to the lowest level in its 30year history this past summer. The forward variance swap on the S&amp;P 500 index is now priced lower than the long-term average volatility of the market. In theory, volatility has nowhere to go but up, but lacks a catalyst given the easy credit conditions, low rates, and excess supply of investment capital.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 295px;" /></a></p> <p>Whenever volatility reaches a new low the financial media runs the same cliched story over and over with the following narrative 1) Volatility is low; 2) Investors are complacent; 3) Insert manager quote saying &ldquo;this is the calm before the storm&rdquo;. Low volatility does not predict higher volatility over shorter periods, in fact empirically the opposite has been true. Volatility tends to cluster in high and low regimes.&nbsp;</p> <h3><strong><em>Volatility isn&rsquo;t broken, the market is... </em></strong></h3> <p><strong>...the real story of this market is not the level of volatility, but rather its highly unusual behavior. </strong>Volatility, both implied and realized, is mean reverting at the greatest level in the history of equity markets. Any short term jump in volatility mean reverts lower at unusual speed, as evidenced by volatility collapses after the June 2016 Brexit vote and November 2016 Trump US election victory. Volatility clustering month-to-month reached 90-year lows in the three years ending in 2015.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 316px;" /></a></p> <p>Implied volatility has also been usually reactive to the upside and downside. <strong>In 2017, the VIX index has been 3-4x more sensitive to movements in the market compared to the similar low-volatility regime of the mid-2000s and the mid-1990s</strong> (see red line in right chart).</p> <p><a href=""><img alt="" src="" style="width: 601px; height: 281px;" /></a></p> <p>What is causing this bizarre behavior? To find the truth we must challenge our perception of the problem...<u><em><strong> What we think we know about volatility is all wrong</strong></em></u>. Modern portfolio theory conceives volatility as an external measurement of the intrinsic risk of an asset. This highly flawed concept, widely taught in MBA and financial engineering programs, perceives volatility as an exogenous measurement of risk, ignoring its role as both a source of excess returns, and a direct influencer on risk itself. To this extent, portfolio theory evaluates volatility the same way a sports commentator sees hits, strikeouts, or shots on goal. Namely, a statistic measuring the past outcomes of a game to keep score, but existing externally from the game. <strong>The problem is volatility isn&rsquo;t just keeping score, but is massively affecting the outcome of the game itself in real time. Volatility is now a player on the field. </strong>This critical mis-understanding of the role of volatility modern markets is a source of great self-reflexive risk.&nbsp;</p> <p>Today trillions of dollars in central bank stimulus, share buybacks, and systematic strategies are based on market volatility as a key decision metric for leverage. <strong>Central banks are now actively using volatility as an input for their decisions, and market algorithms are then self-organizing around the expectation of that input. </strong>The majority of active management strategies rely on some form of volatility for excess returns and to make leverage decisions. When volatility is no longer a measurement of risk, but rather the key input for risk taking, we enter a self-reflexive feedback loop. Low volatility reinforces lower volatility&hellip;&nbsp; but any shock to the system will cause high volatility to reinforce higher volatility.</p> <h3><u>Self-Cannibalization of the Market via Share buybacks </u></h3> <p><strong>The stock market is consuming itself&hellip;literally</strong>. Since 2009, US companies have spent over $3.8 trillion on what is effectively one giant leveraged short volatility position. Share buybacks in the current market have already surpassed previous highs reached before the 2008.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 495px;" /></a></p> <p>Rather than investing to increase earnings, managers simply issue debt at low rates to reduce the shares outstanding, artificially boosting earnings-per-share by increasing balance sheet risk, thereby increasing stock prices.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 441px;" /></a></p> <p>In 2015 and 2016 companies spent more than their entire annual operating earnings on share buybacks and dividends. Artemis isolated<strong> the impact of the share buyback phenomenon on earnings, asset prices, and valuations since 2009 and the numbers are staggering.</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 152px;" /></a></p> <p><u><strong>The later stages of the 2009-2017 bull market are a valuation illusion built on share buyback alchemy. </strong></u>Absent this accounting trick the S&amp;P 500 index would already be in an earnings recession. Share buybacks have accounted for +40% of the total earning-per-share growth since 2009, and an astounding +72% of the earnings growth since 2012. Without share buybacks earnings-per-share would have grown just +7% since 2012, compared to +24%. Since 2009, an estimated +30% of the stock market gains are attributable to share buybacks.<strong> Without share buybacks the S&amp;P 500 index would currently trade at an expensive 27x earnings.</strong> Not surprisingly, a recent study found a positive relationship between insider equity sales and share repurchases, supporting the idea that buybacks are more about managerial self-interest than shareholder value.</p> <p><strong>Share buybacks financed by debt issuance are a valuation magic trick. </strong>The technique optically reduces the price-to-earnings multiple (Market Value per Share/Earnings per Share) because the denominator doesn&rsquo;t adjust for the reduced share count. The buyback phenomenon explains why the stock market can look fairly valued by the popular price-to-earnings ratio, while appearing dramatically overvalued by other metrics.&nbsp; Valuation metrics less manipulated by share buybacks (EV/EBITDA, P/S, P/B, Cyclically Adjusted P/E) are at highs achieved before market crashes in 1928, 2000, and 2007. Buybacks also remove liquidity. Free float shares and trading volume in the S&amp;P 500 index have collapsed to levels last seen in the late-1990s, despite stock prices more than doubling.</p> <p><strong>Share buybacks are a major contributor to the low volatility regime because a large price insensitive buyer is always ready to purchase the market on weakness. </strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 589px;" /></a></p> <p><strong>The key periods are the two to three weeks during and after earnings announcements, when the SEC mandated share buyback blackout period officially ends. The largest equity drawdowns of the past few years (August 2015 and January-Feb 2016) both occurred during the share buyback blackout period. Both times the market rallied to make back all losses when the buyback restriction period expired.</strong> The S&amp;P 500 index demonstrates an unusual multi-modal probability distribution during years with high buyback activity. The market flips between a positively or negatively skewed return distribution based on whether the regulatory share repurchase blackout period is in effect. In addition, 6 of the top 10 multi-day VIX declines in history, all 4+ sigma events, have occurred during heavy share buyback periods between 2015 and 2016. Share buybacks result in lower volatility, lower liquidity, which in turn incentivizes more share buybacks, further incentivizing passive and systematic strategies that are short volatility in all their forms. Like a snake eating its own tail, the market cannot rely on share buybacks indefinitely to nourish the illusion of growth. <strong>Rising corporate debt levels (see below) and higher interest rates are a catalyst for slowing down the $500-800 billion in annual share buybacks artificially supporting markets and suppressing volatility</strong>.</p> <h2><u>Global Short Volatility Trade</u></h2> <p>The short volatility trade is any strategy that derives small incremental gains on the assumption of stability in exchange for substantial loss in the event of change, whereby volatility is a critical input to the allocation of risk. Short volatility can be executed explicitly with options, or implicitly via financial engineering. To understand this concept, it is helpful to decompose the key risks. The investor holding a portfolio of hedged short options receives an upfront premium, or yield, in exchange for a non-linear risk profile to four key exposures 1) Rising Volatility; 2) Gamma or Jump Risk; 3) Rising Interest Rates; 4) Unstable Cross-Asset Correlations. Many institutional strategies derive excess returns by implicitly shorting those exact same risk factors despite never trading an option or VIX future.&nbsp; <strong>As of 2017, there is an estimated $1.12 to 1.5 trillion USD(2) of active short volatility exposure in domestic equity markets.</strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 635px;" /></a></p> <p>In this paper we will focus on short volatility in US equity markets, however<strong> the short volatility trade, in all its forms, is widely practiced across all major asset classes.</strong> In world of ultra-low interest rates shorting volatility has become an alternative to fixed income. For the first time in history the yield earned on an explicit short volatility position is competitive with a wide array of sovereign and corporate debt (see below).</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 171px;" /></a></p> <p><u><strong>Explicit Short Volatility </strong></u>are strategies that literally sell options to generate yield from asset price stability or falling stock market variance. The category includes everything from popular short volatility exchange-traded-products to call and put writing programs employed by pension funds. Despite the headlines, this is the smallest portion of the short volatility trade. Explicit short volatility contains upward of only $60 billion in assets, including $45 billion in short volatility pension put and call writing strategies, $8 billion in short volatility overwriting funds, $2 billion in short volatility exchange traded products, and another $3 billion in speculative VIX shorts.&nbsp; Explicit short volatility strategies are active in the short term, fading short and intermediate volatility spikes. Volatility spikes that mean revert quickly help the performance of these strategies (August 2015). Explicit short volatility is most harmed by an extended period of high volatility that fails to mean revert, such as in 1928 or 2008, or a super-normal volatility spikes such as the Black Monday 1987 crash.</p> <p><u><strong>Implicit Short Volatility</strong></u> are strategies that, although not directly selling options, use financial engineering to generate excess returns by exposure to the same risk factors as a short option portfolio. Many investors, and even practitioners, are ignorant or in denial that they are holding a synthetic short option in their portfolio. In current markets, there is an estimated $1.12 to $1.42 trillion in implicit short volatility exposure, including between $400 billion in volatility control funds, $400 to $600 billion in risk parity, $70-175 billion from long equity trend following strategies, and $250 billion in risk premia strategies. These strategies are similar to a short option position because they produce efficient gains most of the time, but are subject to non-linear losses based on variance, gamma, rates, or correlation change. The strategies tend to have longer time horizons for rebalancing than explicit short volatility. In practice, exposure to equities is reduced based on the accumulation of variance over one to three months.&nbsp;</p> <p>The next few pages will focus on some of the hidden risks in the short volatility trade, both explicitly and implicitly.</p> <h3>Gamma Risk</h3> <p>Imagine you are balancing a tall ruler vertically on your palm. As the ruler tilts in any one direction, you must to overcompensate in the same direction to keep to the ruler balanced. This is conceptually very similar to a trader hedging an option with high gamma risk. The trader must incrementally sell (or buy) more of the underlying at a non-linear pace to rehedge price fluctuations.</p> <p>A short gamma risk profile is not unique to option selling, and is a hidden component of many institutional asset management products. The portfolio insurance strategy credited with causing the 1987 Black Monday Crash is a classic example of a short gamma profile gone awry. When large numbers of market participants are short gamma, implicitly or explicitly, the effect can reinforce price direction into periods of high turbulence.<strong> Risk parity, volatility targeting funds, and long equity trend following funds are all forced to de-leverage non-linearly into periods of rising volatility, hence they have synthetic gamma risk.</strong> At current risk levels, we estimate as much as $600 billion in selling pressure would emerge from implicit short gamma exposure if the market declined just -10% with higher vol. Many of these strategies rely on accumulation of one to three month realized variance to trigger that de-leveraging process. Hence the short gamma buying and selling pressure operates on a time lag to the market. During the drawdowns in the fall of 2015 and early-2016, share buybacks helped the market rebound quickly minimizing the effect of &lsquo;short-gamma&rsquo;&rsquo; de-leveraging. This further emboldened explicit short volatility traders to continue to fade any volatility spikes.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 610px;" /></a></p> <p><strong>If the first leg of a crisis is strong enough to sustain a market loss beyond -10%, short-gamma de-leveraging will likely kick-start a second leg down, causing cascading losses for anyone that buys the dip.&nbsp; </strong></p> <h3>Correlation and Interest Rate Risk</h3> <p>The concept of diversification is the foundation of modern portfolio theory.&nbsp; Like a wizard, the financial engineer is somehow able to magically reduce the risk of a portfolio by combining anti-correlated assets. The theory failed spectacularly in the 2008 crash when correlations converged. You can never destroy risk, only transmute it. All modern portfolio theory does is transfer price risk into hidden short correlation risk. There is nothing wrong with that, except for the fact it is not what many investors were told, or signed up for.</p> <p>Correlation risk can be isolated and actively traded via options as source of excess returns. Volatility traders on a dispersion desk will explicitly short correlations by selling the variance of an index and going long the weighted variance of its constituents. When correlations are stable or decreasing, the strategy is very effective, but when correlations behave erratically large losses will occur. The graph to the right shows the collapse of correlations between normal and stressed markets.&nbsp;</p> <p><em><strong>Many popular institutional investment strategies derive excess returns via implicit leveraged short correlation trades with hidden fragility</strong></em></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 337px;" /></a></p> <p><strong>Risk parity is a popular institutional investment strategy with close to half a trillion dollars in exposure.</strong> The strategy allocates risk and leverage based on variance assuming stable correlations. To a volatility trader, risk parity looks like one big dispersion trading desk. The risk parity strategy, decomposed, is actually a portfolio of leveraged short correlation trades (alpha) layered on top of linear price exposure to the underlying assets (beta). The most important correlation relationship is between stocks and bonds. A levered short correlation trade between stocks and bonds has performed exceptionally well over the last two decades including in the last financial crisis. From 2008 to 2009 gains on bonds offset losses in the stock market as yields fell. To achieve a similar benefit in a crisis today, the 10-year Treasury Note would need to collapse to from 2.32% to -0.91%. This is not impossible, but historically there is a much higher probability that bonds and stocks rise or fall together when rates are this low.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 439px;" /></a></p> <p>The truth about the historical relationship between stocks and bonds over 100+ years is illuminating (please see our 2015 paper &ldquo;Volatility and the Allegory of the Prisoner&rsquo;s Dilemma&rdquo; for more detail). <strong>Between 1883 and 2015 stocks and bonds spent more time moving in tandem (30% of the time) than they spent moving opposite one another (11% of the time). </strong>Stocks and bonds experienced extended periods of dual losses every 50 years.&nbsp;<strong> It is only during the last two decades of falling rates, accommodative monetary policy, and globalization that we have seen an extraordinary period of anti-correlation emerge. </strong>At best the anticorrelation between stocks and bonds may cease to be a source of alpha, and at worst it may the driver of significant reflexive losses.&nbsp;</p> <h3>Volatility Risk</h3> <p>With interest rates at all-time lows<strong> shorting volatility has become an alternative to fixed income for yield starved investors. </strong>The phenomenon is not new to Japan. For nearly two decades banks packaged and sold hidden short volatility exposure to Japanese retirees via wealth products called Uridashi. Uridashi notes pay a coupon well above the yield earned on Japanese debt based on knock-out and knock-in levels to the Nikkei index. In 2016 there was an estimated $13.2 billion USD in Uridashi issuance. Now that low rates are global the short volatility trade is expanding to retail investors beyond Japan.&nbsp; In the US short volatility has emerged as a get-rich-quick scheme for many of these smaller investors. The short VIX exchange traded complex, at approximately $2 billion in listed assets, is the smallest but most wild segment of the global short volatility trade.&nbsp; In the past you had to be a big Wall Street trading desk (&lsquo;Bear Stearns&rsquo;) or hedge fund (&ldquo;LTCM&rdquo;) to blow yourself up shorting volatility. Not anymore. The emergence of listed VIX products democratized the trade. A story in the New York Times details the exploits of an ex-Target manager who made millions shorting a 2x leveraged VIX ETP. Such stories harken back to the dotcom bubble of the late 1990s when day-traders quit their jobs to flip internet stocks before the crash.&nbsp;</p> <p><em><strong>When everyone is on one side of the volatility boat, it is much more likely to tip over. </strong></em>Short and leveraged volatility ETNs contain implied short gamma requiring them to buy (sell) a non-linear amount of VIX futures the more volatility rises (falls). <strong>The risk of a complete wipe out in the inverse-VIX complex in a single day is a very real possibility given the wrong shock (as Artemis first warned in 2015).</strong> The largest one day move in the VIX index was the +64% jump on February 27, 2007. If a similar move occurred today a liquidity gap would likely emerge.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 582px;" /></a></p> <p>The chart above estimates the volatility notional required for a +60% shock in the VIX given supply-demand dynamic over the past five years. For a +60% move in VIX we estimate ETPs would be required to buy $138 million in vega notional in the front two contracts alone, equivalent to 142k VIX contracts(12). This is over 100% of the average daily trading volume.&nbsp; In this event, inverse-VIX products will experience an &ldquo;unwind event&rdquo; resulting in major losses for scores of retail investor. Those shorting leveraged VIX products will have unmeasurable losses. <strong>The products are a class-action lawsuit waiting to happen.</strong></p> <h3>Shadow Risk in Passive Investing&nbsp;</h3> <p>Peter Diamandis, the entrepreneur and founder of the X prize, said it best, &ldquo;If you want to become a billionaire, find a way to help a billion people&rdquo;. The purpose of efficient markets is to allocate capital to institutions that add the most value. In a market without value, the only thing left to do is to allocate based on liquidity. The massive stimulus provided by central banks resulted in the best risk-adjusted returns for passive investing in over 200 years between 2012 and 2015. Today investors are chasing that historical performance. By the start of 2018, 50% of the assets under management in the US will be passively managed according to Bernstein Research. Since the recession $2 trillion is assets have migrated from active to passive and momentum strategies according to JP Morgan.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 703px;" /></a></p> <p><strong>Passive investing is now just a momentum play on liquidity.&nbsp;</strong> Large capital flows into stocks occur for no reason other than the fact that they are highly liquid members of an index. All stocks in the index go up and down together, regardless of fundamentals. In effect, the volatility of the entire stock market can become dominated by a small number of companies and correlation relationships. For example, the top 10 stocks in the S&amp;P 500 index, comprising only 2% of index membership, now control upward of 17% of the variance of the entire market. The largest 20 companies, or 4% of companies, are responsible for 24% of the variance.</p> <p><strong>The shift from active to passive investing is a significant amplifier of future volatility.</strong> Active managers serve as a volatility buffer, willing to step in and buy undervalued stocks when the market is falling, and sell overvalued stocks when the market is rising too much. Remove that buffer, and there is no incremental seller to control overvaluation on the way up, and no incremental buyer to stop a crash on the way down.</p> <h3>Shadow Risk in Machine Learning</h3> <p>Let&rsquo;s pretend you are programmer using artificial intelligence (&ldquo;AI&rdquo;) to develop a self-driving car. You &ldquo;train&rdquo; the AI algorithm by driving the car thousands of miles through the desert. AI learns much faster than any human, so after a short period, the car able to drive at 120 miles per hour with perfect precision and safety. Now the car is ready for a cross-country trip. The self-driving car works flawlessly, driving with record speed through the city, desert, and flatlands. However, when it reaches the steep and twisting roads of the mountain the car drives right off a cliff and explodes. The fatal flaw is that your driving algorithm has never seen a mountain road. AI is always driving by looking in the rear-view mirror.</p> <p><strong>Markets are not a closed system. </strong>The rules change. As machines trade against machines, self-reflexivity risk is amplified. 90% of the world&rsquo;s data across history has been generated over the last two years. It is very hard to find quality financial data at actionable time increments going back past 20 or even 10 years. Now what if we give all the available data, most of it extremely recent, to a machine to manage money? The AI machine will optimize to what has worked over that short data set, namely a <em><u><strong>massively leveraged short volatility trade</strong></u></em>. For this reason alone, expect at-least one major massive machine learning fund with excellent historical returns to fail spectacularly when the volatility regime shifts&hellip; <strong>This will be a canary in the coal mine</strong>.</p> <h2><u>Conceptual Mistakes in Shorting Volatility</u></h2> <p><em><strong>&ldquo;I can&rsquo;t wait for the next crisis because I can sell volatility at even higher levels!&rdquo;</strong></em> said one institutional asset manager at a conference. This is a commonly held but very dangerous assumption. Many investors compare shorting volatility to selling insurance. The option seller collects an upfront premium with frequent gains but large negative exposure to uncommon events. It is typical to erroneously conclude that selling volatility can never lose money if you keep systematically rolling the trade forward. The flaw in this logic is the assumption risk events are independent and probabilities consistent. In markets this is never the case.</p> <p><strong>Let&rsquo;s play a game. You get to bet on a rigged coin with a 99% probability of landing on heads in your favor. If the coin lands on heads, you win +1% of your bankroll, but if it lands on tails, you lose -50%. Do you play? </strong>Yes, the game has a positive expected return, and given the law of large numbers you will always succeed if you keep playing. Consider that if the probabilities decrease to a 98% success rate, the game becomes a net loser. Remarkably, a 1% change in probability is the only thing that separates a highly profitable strategy from cataclysmic loss (see the statistics below). Small changes in probabilities have an outsized effect on the profitability of any strategy with small frequent gains and large infrequent losses.</p> <p>The coin game is similar to a systematic short volatility strategy, except in life you never know which coin, positive or negative, you are betting on at any given time. Worse yet, in self-reflexive markets the probabilities between coin flips become correlated based on outcomes. For each loosing coin flip, the likelihood for another loss increases and vice versa! You start with 99% odds and a positive expected strategy, but after the first loss, the odds reduce to 90%. After two losses in ten, the odds fall to 50%.&nbsp; It is not the first loss, or leg down in markets that hurts you, but rather the second and third. Systematic short volatility without accounting for shifting probabilities is akin to doubling down at a casino into bad odds. <em><strong>Don&rsquo;t fool yourself&hellip; this is exactly how financial crises develop.</strong></em></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 731px;" /></a></p> <p><strong>Shorting volatility, in of itself, is not necessarily a bad thing if executed thoughtfully at the right margin of safety.</strong> In our 2012 paper &ldquo;Volatility at World&rsquo;s End&rdquo; we correctly argued, against our self-interest, for the overvaluation of portfolio insurance in what we coined a &ldquo;Bull Market in Fear&rsquo; between 2009 and 2012. At the time tail risk hedging was very popular and investors shorting volatility had a high margin of safety.&nbsp; For the reasons detailed in this paper, we believe the exact opposite today.</p> <h3>Intrinsic Value and Volatility</h3> <p>This past summer the ever-wise Jim Grant of Grant&rsquo;s Interest Rate Observer asked for my thoughts on the low volatility regime. In the middle of my explanation on the short volatility trade, out of nowhere, Jim says, &ldquo;What does any of this have to do with intrinsic value?&rdquo; I was floored&hellip; I honestly didn&rsquo;t know how to answer his question. <strong>The truth&hellip; the short volatility trade is about the absence of value.</strong> In a bull market, when investors can&rsquo;t find value in traditional assets, they must manufacture yield through financial engineering. In a mania the system begins to devour its own tail.</p> <p>The difference between risk and outcomes...</p> <p>Imagine your friend invites you over for dinner. In his dining room is a <strong>barrel of highly explosive nitroglycerin. </strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>You: &ldquo;What is that barrel of explosive nitroglycerin doing in your living room!&rdquo;</p> <p>&nbsp;</p> <p>Friend: &ldquo;Oh that, no big deal.&rdquo;&nbsp;</p> <p>&nbsp;</p> <p>You: &ldquo;It&rsquo;s DANGEROUS! That could blow up the entire block!!! Where did you even get that?&rdquo;</p> <p>&nbsp;</p> <p>Friend: &ldquo;Calm down,&nbsp; the bank pays me good money to store it here, it&rsquo;s the only way I can afford the mortgage.&quot;</p> <p>&nbsp;</p> <p>You: &ldquo;WHAT! ARE YOU CRAZY? All it takes is a small fire to set that thing off!&rdquo;</p> <p>&nbsp;</p> <p>Friend: &ldquo;What fire? There is no fire. Look, it&rsquo;s been here for five years without a problem.&rdquo;</p> </blockquote> <p><strong>Risk alone does not guarantee any outcome, it only effects probabilities. </strong>The global short volatility trade, in all of its forms, is like a barrel of nitroglycerin sitting in the market portfolio. It may or may not explode. What we do know is that it can potentially amplify a routine fire into an explosion. The real question is what causes the fire?</p> <h2><u>The death of the snake...</u></h2> <p>Volatility fires almost always begin in the debt markets. Let&rsquo;s start with what volatility really is. <strong>Volatility is the brother of credit...&nbsp; and volatility regime shifts are driven by the credit cycle. </strong>Volatility is derived from an option on shareholder equity, but equity itself can be thought of as a perpetual option on the future success of a company. When times are good and credit is easy, a company can rely on the extension of cheap debt to support its operations. <strong>Cheap credit makes the value of equity less volatile, hence a tightening of credit conditions will lead to higher equity volatility</strong>. When credit is easily available and rates are low, volatility remains suppressed, but as credit contracts, volatility rises.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 390px;" /></a></p> <p><strong>In the short term we do not see the credit stress required for a sustained expansion of volatility, but this can change very quickly.</strong> Storm clouds are gathering around 2018-2020, as rising interest rates, rich valuations, and corporate debt roll-overs all converge as potential triggers for higher stress and volatility. The IMF warned that 22% of U.S. corporations are at risk of default if interest rates rise. Median net debt across S&amp;P 500 firms is close to a historic high at over 1.5x earnings, and interest coverage ratios have fallen sharply.&nbsp; Between 2018-2019 an estimated $134 billion of high yield debt(16) must to be rolled-over, presenting a catalyst for higher volatility in the form of credit stress.</p> <h2><u>Reflexivity in the Shadow of Black Monday 1987</u></h2> <p>Thirty years ago, to the day, financial markets around the world crashed with volatility never seen before or equaled again in history. On October 19th, 1987 the Dow Jones Industrial Average fell more than -22%, doubling the worst day from the 1929 crash. $500 billion in market share vaporized overnight. Entire brokerage firms went bankrupt on margin calls as liquidity vanished. It was not a matter of prices falling, there were no prices. You couldn&rsquo;t exit a position. Trading desks refused to pick up the phone. <strong>Black Monday appeared to come out of nowhere as it occurred in the middle of a multi-year bull market. There was no rational reason for the crash.&nbsp;</strong> In retrospect, financial historians blame portfolio insurance, ignoring the role of interest rates, inflation, and the Federal Reserve. The demon of that day still haunts markets, and 30 years later the crash is still not well understood. Black Monday 1987 was the first post-modern hyper-crash driven by machine feedback loops, but it all started in a very traditional way.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 262px;" /></a></p> <p><strong>Be careful what you wish for... </strong>Today every central bank in the world is trying to engineer inflation, but inflation was the hidden source of the 1987 financial crash. <strong>At the start of 1987 inflation was at 1.5%, which is lower than it is today! </strong>From 1985 and 1986 the Federal Reserve cut interest rates over 300 basis points to off-set a slowdown in growth. That didn&rsquo;t last for long. Between January and October 1987 inflation violently rose 300 basis points. Nominal rates jumped even higher, as the 10-year US treasury rose 325 basis points from 6.98% in January 1987 to 10.23% by October 2014. The Fed tried to keep pace by raising rates throughout the year but it was not fast enough. The quick increase in inflation was blamed on the weak dollar, falling current account balance, and rising US debt-to-GDP levels. None of this hurt equity markets, as the stock market rose +37% through August 25th, 1987. <strong>Then the wheels fell off</strong>.</p> <h3><em><strong>First the fire, then the blast...</strong></em></h3> <p>In 1987 portfolio insurance was a popular strategy ($60 billion in assets) that involved selling incrementally greater amounts of index futures based on how far the markets fell (see short gamma risk above). <strong>The WSJ ran an article on October 12th that warned portfolio insurance &ldquo;could snowball into a stunning rout for stocks&rdquo;. Nobody paid attention.</strong></p> <p>Although equity markets continued to rise into the summer, <strong>the credit markets began to suffer from a liquidity squeeze.</strong></p> <p><a href=""><img alt="" src="" style="width: 601px; height: 362px;" /></a></p> <p>The spread between interbank loans and Treasury Bills spiked 100 basis points in the month of September alone, and then rose another 50 basis points in October leading up to the crash. Corporate yields exploded 100 basis points the month leading up to the Black Monday crash, increasing of over 200 basis points since earlier in the year.&nbsp; By the late summer the equity markets got the memo. Between August 25th and October 16th, the S&amp;P 500 index fell 16.05%. S&amp;P 100 volatility moved from 15 in August to 36.37 on October 16th.&nbsp; That was just the beginning.&nbsp;</p> <p><strong>On Black Monday the market lost one fifth of its value and volatility jumped to all-time highs of 150</strong> (based on VXO index, predecessor to the VIX index). In total, from August to October 1987 the market lost -33% and volatility exploded an incredible +585%.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 825px;" /></a></p> <p><strong>Black Monday is best understood as a massive explosion that occurred within a traditional fire.</strong> Rising inflation started a liquidity fire in credit, that spread to equities, and reached the nitroglycerin of computerized trading before exploding massively. Central bankers were not able to cut rates at the onset of the crisis to stop the fire due to rising inflation. The same set of drivers exist today, but on steroids. Higher rates combined with $1.5 trillion in selfreflexive investment strategies are a combustable mix. It is important to realize that the 1987 Black Monday crash was comparable to any other market sell-off until it wasn&rsquo;t. <strong>The only difference&hellip; in 1987 volatility just kept going higher and markets lower.</strong> The chart above shows the movement in volatility leading up to crises in 1987, 1998, 2008, 2011, 2015. The point is that if you are a volatility short seller, how do you know whether you will get a 2015 outcome, when markets rallied, or a 1987 outcome? You don&rsquo;t! In 1987 inflation started the volatility fire, but program trading amplified that fire into a cataclysmic conflagration. The $1.5 trillion short volatility trade, in all its forms, can play a very similar role now if rising inflation causes tighter credit conditions, but also limits central banks from reacting.</p> <h3>Melt-up Risk</h3> <p>Never underestimate the will of global central banks to risk overvaluation in asset prices to achieve inflation.&nbsp; <strong>For this reason, a speculative melt-up in prices on par with the late 1990s dot-com bubble is possible if policy makers support markets perpetually amid low inflation and growth.</strong> In fact, one legitimate argument for raising rates is simply so they can lower them before the business cycle turns. High volatility and high equity returns often coincide in the final phases of a speculative market.<strong> Very few investors realize that between 1997 and 1999 the stock market experienced both rising volatility and returns at the same time.</strong></p> <p><a href=""><img alt="" src="" style="width: 601px; height: 411px;" /></a></p> <p>For example, during this period the S&amp;P 500 index was up close to +100% but with over five times the volatility we are experiencing today. The recent stock market bubble in China also was an example of high volatility and high returns. Yes, stocks are overvalued, but if rates stay low coupled with dovish monetary policy and supply-side tax reform it could touch a frenzy in speculation. For this reason alone, sitting on the sidelines presents business risk for professional managers.</p> <h2><u>How does an investor survive the Ouroboros?</u></h2> <p><u><em><strong>The markets are not correctly assessing the probability that volatility reaches new all-time lows in short term (VIX &lt;9 in 2017), and new all-time highs in the long term (VIX &gt; 80 in 2018-2020)&nbsp; </strong></em></u></p> <p>Reflexivity in both directions is very hard to conceive. Volatility is low and can go lower this year absent any catalyst. Rising interest rates, wage inflation, and credit issuance are very real catalysts in the long-term. Between 2018 and 2020 high yield issuers will re-test markets by rolling over $300 billion in expiring debt.</p> <p><a href=""><img alt="" src="" style="width: 599px; height: 472px;" /></a></p> <p>U.S. average hourly earnings are rising at fastest pace since pre-recession putting pressure on inflation. If these debt-roll overs occur into rising inflation and higher rates this could easily be the fire that sets off the global short volatility explosion.&nbsp;</p> <p>If you are going to short volatility, do it with a long-volatility mindset, namely a limited loss profile. Short-dated VIX put options that payoff with the VIX below 10 are currently 5-10 cents. Forward variance out one year is cheap and should be bought into any period of rising interest rates, inflation, or credit stress.</p> <p><strong>Fixed income volatility is at all-time lows at a time when the Federal Reserve is raising rates </strong></p> <p>Something must give, inflation or deflation, but you don&rsquo;t have to be smart enough to know what if you bet on the volatility of fixed income.</p> <p><strong>Active Long Volatility and Stocks will outperform over the next five years </strong></p> <p>Long volatility is a bet on change, as opposed to direction. <strong>At a time when central banks are removing stimulus, the world has never been more leveraged to the status quo.</strong> For this reason, long volatility combined with traditional equity exposure is an effective portfolio for the new regime.&nbsp; Historically a 50/50 combination of the CBOE Long Volatility Hedge Fund Index and the S&amp;P 500 Index outperformed the average hedge fund by +97% since 2005. The inclusion of long volatility reduced equity drawdowns from -52% to -15% in 2008 while improving risk-adjusted returns.&nbsp;</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 605px;" /></a></p> <p>The value-add of active long volatility management is to minimize losses in stable markets while making portfolio changing returns in the event of a market crash. The smart long volatility fund can offer protection at a limited or even positive cost of carry.&nbsp; The combination of active long volatility and equity has historically protected a portfolio from a deflationary crash like 2008, but can also profit if high volatility and high equity returns co-exist in melt-up like 1997-1999.&nbsp; Long volatility may be your only line of defense if stock and bonds decline together. <strong>At this stage in the cycle, you want to position yourself on the other side of the global short volatility trade</strong>.&nbsp;</p> <p>*&nbsp; *&nbsp; *</p> <p style="text-align: center;"><u><strong>Risk cannot be destroyed, it can only be shifted through time and redistributed in form. If you seek total control over risk, you will become its servant.</strong></u></p> <p style="text-align: center;"><u><strong>There is no such thing as control...</strong></u></p> <p style="text-align: center;"><u><strong>there are only probabilities.</strong></u></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="673" height="445" alt="" src="" /> </div> </div> </div> AI algorithm Alpha artificial intelligence B+ Bear Market Bear Stearns Beta Bond Bond market Business CBOE CBOE Long Volatility Hedge Fund Central Banks China Credit Conditions default Dow 30 Dow Jones Industrial Average driving algorithm Economy Equity Markets Fail Federal Reserve Finance Financial risk fixed headlines High Yield High-yield debt Implied volatility International Monetary Fund Japan Jim Grant machine learning market algorithms Market Crash Market Share Mathematical finance Mean Reversion Monetary Policy Money New York Times Nikkei Nikkei 225 None program trading Program Trading Recession Reflexivity Risk parity S&P 100 S&P 500 U.S. Securities and Exchange Commission US Federal Reserve VIX VIX Volatility Volatility VXO Sat, 21 Oct 2017 21:00:00 +0000 Tyler Durden 605748 at "It's Very Common": Baltimore Teacher Admits To Passing Students That Never Showed For A Single Day Of Class <p>Teaching can be a thankless job.&nbsp; Talk to almost any educator in the public school system and you're bound to get a earful about grueling hours, disrespectful kids, infuriating bureaucracy and minimal pay.&nbsp; As such, it looks increasingly like the teachers in Baltimore's public schools have decided to just stop teaching altogether and pass every student that walks through their doors. </p> <p>In the latest installment of a growing scandal revealed by "Project Baltimore", an investigative reporting initiative launched by Sinclair Broadcast group in March 2017 to examine Baltimore's public school system, a teacher at Calverton Elementary/Middle in west Baltimore has come forward with proof that grade changing is not only common in his school district but explicitly encouraged by senior administrators.</p> <p>According to <a href="">Fox45</a>, below is the end of year text message that Calverton teachers received their principal, Martia Cooper, instructing them to <strong>"please double check end of the year averages and make sure they are 60 and above."</strong>&nbsp; The message went on to say that any "averages below 60" should be "corrected" so that failing students could be pushed through the system.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“Good Morning people! (Secretary) is printing report cards so finally you can get cumes finished. <strong>Please double check end of year averages and make sure they are 60 and above</strong>, except our four retention candidates (2 elem and 2 grade 7).<strong> If you find any grade averages below 60, pkesss (sic) have (secretary) correct and give me a copy of those student names.</strong> Thanks!”</p> </blockquote> <p><a href=""><img src="" alt="Baltimore" width="600" height="340" /></a></p> <p>The unidentified teacher who came forward to expose the text said it's very clear what the intent of the message was.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>A Calverton educator, who reached out to Fox45, claims to have received that text<strong>. “[It instructed me to] go into my grade book, make sure no students are failing, and essentially change the grade if they are failing so they will pass with a 60 percent,”</strong> said the teacher, whose identity we are concealing upon request.</p> <p>&nbsp;</p> <p>“I was frustrated as a teacher. We’re public servants. And when we see things like grade changing, <strong>that’s self-serving. That’s not helping the kids.”</strong></p> <p>&nbsp;</p> <p>After watching Fox45’s recent investigations into allegations of grade changing at Calverton, the City Schools employee contacted Project Baltimore to say a couple things. First, according to the teacher, <strong>grade changing at Calverton is “very common.”</strong></p> <p>&nbsp;</p> <p>Second, the educator told Fox45, changing grades is the easiest and fastest way to pass more students, which makes the school and its administrators look better. But, it does a huge disservice to not just the kids, but our entire community.</p> <p>&nbsp;</p> <p><strong>"Teaching a whole generation of kids that they don’t have to be accountable for their actions, or that hard work isn’t valued or valuable when they are in school, is so discouraging and damaging.”</strong></p> </blockquote> <p>Adding insult to injury, the same teacher said that he even passed kids who had been on his roster all year but didn't bother to show up for a single day of class.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>But this teacher says grade changing at Calverton goes much further than just taking a failing grade and making it a 60. Some students who pass, according to this educator, don’t even have grades because they’ve never showed up to class.</p> <p>&nbsp;</p> <p><strong>“There were students on my roster all year that I had never met, had never seen. On paper they passed my class and passed onto the next year.”</strong></p> <p>&nbsp;</p> <p>“I love my job and I love my students,” concluded the teacher. <strong>“I want to see the students at Calverton and other schools across the city, get a fresh start. And it’s going to be hard because the students are used to this now. But the students deserve better and our city deserve better.”</strong></p> </blockquote> <p>Makes you wonder what those "four retention candidates (2 elem and 2 grade 7)" from the principals text above had to do to actually fail a grade.</p> <p><iframe src="" width="600" height="337" frameborder="0"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1122" height="635" alt="" src="" /> </div> </div> </div> Baltimore Calverton Calverton, Maryland Education Education Fail Foreign relations Foreign relations of Australia Fresh Start Government of Australia Grading systems by country James Cumes Sat, 21 Oct 2017 20:30:00 +0000 Tyler Durden 605654 at "It's A Coup": Catalan President Slams "Worst Attack" By Spain "Since Franco Dictatorship" <p><span style="text-decoration: underline;"><strong>Update (1510ET):</strong></span> Catalan leader Carles Puigdemont addressed Catalans, Spaniards, and the rest of Europe on TV saying that the Spanish states&#39; imposition of Article 155 means &quot;liquidation of our self-government and cancellation of the democratic will of Catalans&quot;. Puigdemont said Rajoy had set out to &quot;humiliate&quot; Catalonia in an &quot;attack on democracy&quot; and said removing powers from Catalonia was the &quot;worst attack against the institutions and the people of Catalonia since the military dictatorship of Francisco Franco&quot;.</p> <p>Puigdemont also said Spain <strong>&quot;closed the doors ot a request for talks, and should set a date to discuss the attack&quot; and &quot;Catalan institutions cannot accept attack by Spain.&quot;</strong></p> <p>In a striking accusation, the Catalan president said that <strong>&quot;Catalan institutions dealt a coup by Spanish state.&quot; </strong>Puigdemont then <strong>switched to English to appeal to Europeans, says democracy also at risk in Europe: &quot;Catalonia is an ancient European nation&quot;. </strong>He also announced a <strong>session in Catalan parliament to debate &quot;the attempt to liquidate our self-government&quot;.</strong></p> <p>Puigdemont concluded by saying <em><strong>&quot;Long live Catalonia&quot;</strong></em> to which a silently listening crowd suddenly burst back into cheers and chanting.</p> <p>However, Puigdemont <em><strong>did not specifically declare independence, </strong></em>but said Catalonia will not accept Madrid&#39;s plan to curb region&#39;s powers, leaving one tiny, final loophole...</p> <p>*&nbsp; *&nbsp; *</p> <p>As we detailed earlier, with Spain officially <a href="">pulling the trigger on Article 155</a>, and activating the Spanish Constitutional &quot;nuclear option&quot; this morning, when PM Rajoy said he would seize control of the Catalan government, fire everyone and force new elections in six months, attention has shifted to the Catalan response. And as we waited for the official statement by Catalan separatist president Carles Puigdemont, expected at 9pm local time, we found him taking to the streets, where he led hundreds of thousands of independence supporters in protest around Barcelona on Saturday, shouting &quot;freedom&quot; and &quot;independence&quot; following the stunning news from Madrid earlier on Saturday.</p> <p><img height="420" src="" width="500" /></p> <p>The protest in the center of the Catalan capital had initially been called to push for the release of the leaders of two hugely influential grassroots independence organisations, accused of sedition and jailed pending further investigation. <strong>But it took on an even angrier tone after Prime Minister Mariano Rajoy announced his government would move to dismiss the region&#39;s separatist government, take control of its ministries and call fresh elections in Catalonia.</strong></p> <p>According to municipal police, over 450,000 people rallied on Barcelona&#39;s expansive Paseo de Gracia boulevard, spilling over on to nearby streets, many holding Catalonia&#39;s yellow, red and blue Estelada separatist flag.</p> <p><img height="333" src="" width="500" /></p> <p><em>Catalan regional vice-president Oriol Junqueras and Catalan regional president </em><br /><em>Carles Puigdemont attend a demonstration on October 21, 2017 in Barcelona </em></p> <p>Protesters greeted Puigdemont&#39;s arrival at the rally with shouts of &quot;President, President.&quot; The rest of his executive was also there.</p> <p>For at least some locals, the time to split from Spain has come: <strong>&quot;It&#39;s time to declare independence,&quot; </strong>said Jordi Balta, a 28-year-old stationery shop <a href="">employee quoted by AFP</a>, adding there was no longer any room for dialogue.</p> <p>Others disgree: &quot;The Catalans are completely disconnected from Spanish institutions, and particularly anything to do with the Spanish state,&quot; said Ramon Millol, a 45-year-old mechanic.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Meritxell Agut, a 22-year-old bank worker, said she was &quot;completely outraged and really sad.&quot; &quot;They can destroy the government, they can destroy everything they want but we&#39;ll keep on fighting.&quot;</p> </blockquote> <p>Catalonia is roughly split down the middle on independence, but residents cherish the autonomy of the wealthy, northeastern region, which saw its powers taken away under the dictatorship of General Francisco Franco. Which is why, as many have warned, <strong>Madrid&#39;s move could anger even those against independence.</strong></p> <p>Barcelona&#39;s Mayor Ada Colau, who <strong>opposes </strong>the independence drive, tweeted: &quot;<strong>Rajoy has suspended the self-government of Catalonia for which so many people fought. A serious attack on the rights and freedoms of everyone.&quot;</strong></p> <p><strong><a href=""><img height="333" src="" width="500" /></a></strong></p> <p>Meanwhile, the anger keeps rising: as a police helicopter hovered above, protesters booed and gave it the finger. &quot;I wish they would just go,&quot; said Balta, looking up at the sky.</p> <p>The Spanish government&#39;s proposed measures still have to be approved by the Senate. But the upper house is majority-controlled by Rajoy&#39;s ruling Popular Party and he has secured the support of other major parties, meaning they will almost certainly go through.</p> <p><strong>Puigdemont is expected to make a statement at 9 p.m. </strong>For Catalonia, and Spain, it will - literally - mean the difference between independence and remaining part of Spain. It could also mean the difference between peace and a violent crackdown by Madrid on what it has seen since day one as an illegal independence process. For the Catalan leader, the stakes are huge:&nbsp; <strong>El Pais reported Puigdemont faces a charge of sedition, punishable by up to 30 years in prison, if he formally declares independence or tries to change the Spanish constitution.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="800" height="431" alt="" src="" /> </div> </div> </div> Autonomous communities of Spain Carles Puigdemont Catalan government Catalan independence movement Catalan language Catalan parliament Catalans Catalonia Estelada Europe Generalitat de Catalunya Mariano Rajoy Operation Anubis Oriol Junqueras Politics Politics of Catalonia Popular Party Senate Spanish constitutional crisis Spanish government Sat, 21 Oct 2017 20:28:43 +0000 Tyler Durden 605744 at Crypto-Currency Calm Before The Storm <p><a href=""><em>Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via,</em></a></p> <p><strong>The United States (and the world) has been using the worthless fiat federal reserve note that is not backed by any true tangible asset.&nbsp;</strong> The only backing is not even the &ldquo;full faith and credit of the United States government,&rdquo; because the government is too far in debt to have any credit.&nbsp; Faith disappeared a long time ago: our faith in elected officials as public servants.&nbsp; Instead, they serve themselves upon the labors of the public, and the public <em>services</em> them, in every sense of the word.</p> <p><a href=""><img alt="" src="" style="width: 560px; height: 299px;" /></a></p> <p><strong>Cryptocurrency is an illusion.&nbsp; The new &ldquo;shell game&rdquo; is to replace one illusion&hellip;the fiat currency&hellip;with another illusion, the &ldquo;bitcoin.&rdquo;&nbsp; </strong></p> <p>Russia announced last week several measures to &ldquo;deal&rdquo; with the Cryptocurrency&hellip;first, by issuing a <strong>Crypto-ruble.</strong>&nbsp; If you read the fine print, the Russian government is moving in to tax and regulate it, at a rate of 13% on trades for profit, as well as &ldquo;Crypto-Rubles&rdquo; that suddenly appear out of nowhere.</p> <p>It won&rsquo;t affect the Black Market as much, because 13% is going to be paid to turn a blind eye to the billions of rubles being stolen by the Russian Mafia and oligarchy alike.&nbsp; The gimmick here is for the government to take a chunk out of it: for now.&nbsp; The reason &ldquo;now&rdquo; is being used, is that eventually they&rsquo;ll shift gears, pass legislation, and eventually outlaw private trading in it that is not government-sanctioned or government-approved.</p> <p>A government is only concerned with perpetuating itself and maintaining power.&nbsp; The most basic way it does this is by controlling the currency of the nation, regulating it, and taxing the citizens.&nbsp; In the United States, it has been reported by several sources that JP Morgan Chase is going to embrace Cryptocurrency.&nbsp; Europe is well on its way to establishing a &ldquo;Euro-BitCoin,&rdquo; and China has recently relaxed some measures regarding it.</p> <p><strong>This is the calm before the storm: the governments are studying it, and studying the masses to find the means to take control of it.</strong></p> <p>The gullible masses are playing right into their hands.&nbsp; The problem with Cryptocurrency is not just in the fact that it is backed by nothing (a fool&rsquo;s errand before it has been started), but there is no privacy.&nbsp; None.&nbsp; If the governments control and monitor all electronic and computer media, then there is no such thing as privacy regarding electronic currency.&nbsp; This will be the death of cash, and thus the death of any privacy for citizens.</p> <p>There will be no hiding from the taxing authorities.&nbsp; All the accounts will be monitored: taxed on any growth, and every single penny accounted for.&nbsp; The government will know what work you do, for how much, and how much &ldquo;Crypto-currency&rdquo; you have in your accounts.&nbsp; All electronic, nebulous, unbacked garbage.&nbsp; How about a nice &ldquo;glitch&rdquo; where suddenly, your entire account falls to a zero balance?&nbsp; That &ldquo;glitch&rdquo; can happen anytime.</p> <p>No, the politicians and the oligarchs will have gold, silver, real estate, mining rights and contracts, and ownership of every utility and municipal function upon which the public is dependent.&nbsp; Eventually the Crypto-Dollars will be handed out sparingly to &ldquo;exchange for food, clothing, and to pay their bills,&rdquo; and the whole thing is designed for one thing:</p> <p><strong>To keep the population at a starveling, subsistence level while those in power own everything, and them as well: Ruled by the politicians and oligarchs, fooled by the press and the religious pulpits, and killed by the enforcement arms of police and military.</strong></p> <p>In 1910, the meeting on Jekyll Island, Georgia took place leading up to 1913.&nbsp; It was then that the framework for the transfer of the power of the U.S. government over the nation&rsquo;s currency to the federal reserve was established.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson.&rdquo;</em></strong></p> <p>&nbsp;</p> <p><strong><em>President Franklin D. Roosevelt&rsquo;s letter to Colonel Edward Mandell House, </em></strong></p> <p><strong><em>Fmr. Advisor to President Woodrow Wilson&nbsp;&nbsp;&nbsp; November 21, 1933</em></strong></p> </blockquote> <p><u><em><strong>The aim is global governance.&nbsp; The Cryptocurrencies arose out of a desire to use something other than the dollar and other failing fiat notes not backed by anything.&nbsp; The irony is that the Cryptocurrencies are the vehicle for the globalists.</strong></em></u></p> <p>Once each nation has its Cryptocurrencies in place, they can &ldquo;align&rdquo; them, and virtually abolish all economic buffers and barriers&hellip;which will come crashing down just as the illegal aliens in Europe and the United States are destroying the borders, language, culture, and societies.&nbsp; The whole thing is trumpeted as a recourse, but it is nothing more than an extension of an Alinsky principle &ldquo;organizing the organized.&rdquo;&nbsp; At the right moment, the governments will swoop in, regulate, and tax these Cryptocurrencies.</p> <p><em><strong>Once cash is eliminated, hard assets such as gold, silver, and other resources will be simple to control.&nbsp; Where did you obtain that gold?&nbsp; How did you obtain it, and is it in our records?</strong></em></p> <p>The power lies in the receipt, the payment receipt showing where you obtained that product and how you obtained it&hellip;all based on POS (point of sale), the electronic monitoring of every expenditure at the register.&nbsp; The &ldquo;successful&rdquo; employment of Cryptocurrency will mean that the people have been completely duped and have handed all privacy into the control of the government.&nbsp; Once they control everyone economically, they will use that control to seize other aspects of daily life that are not regulated.&nbsp; <strong>They&rsquo;ll know how much you make, where you work, and how much you have available.</strong></p> <p>Or what you <em>think</em> you have available, because in the blink of an eye, they&rsquo;ll make your Crypto dollars disappear, and you&rsquo;ll have no recourse, just as they have no accountability.&nbsp; If politicians steal money now, while cash still exists, think of how much they&rsquo;ll be able to steal when everything is done electronically&hellip;when all the bankers and oligarchs are under their control/in a symbiotic-parasitic relationship and they can pass any law they wish.&nbsp; <strong>Cryptocurrency is a scam that will eventually lead to the final enslavement of the U.S.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="230" height="116" alt="" src="" /> </div> </div> </div> Alternative currencies Bitcoin Bitcoin China Crypto Cryptocurrencies Cryptography Digital currency E-commerce Federal Reserve Finance Financial cryptography Money None Politics Real estate Russian government United States Army Special Forces United States government US Federal Reserve US government Sat, 21 Oct 2017 20:00:00 +0000 Tyler Durden 605747 at Are You Infuriated Yet? <p><a href=""><em>Authored by Chris Martenson via,</em></a></p> <div class="content clearfix"> <p><strong>More and more, I&#39;m encountering people who are simply infuriated with how our &quot;leaders&quot; are running (or to put it more accurately, ruining) things right now. And I share that fury.</strong></p> <p>It&rsquo;s perfectly normal human response to be infuriated when an outside agent hurts you, especially if the pain seems unnecessary, illogical or random.</p> <p>Imagine if your neighbor enjoyed setting off loud explosives at all hours of the day and night. Or if he had a habit of tailgating and brake-checking you every time he saw your car on the road. You&rsquo;d been well within your rights to be infuriated.</p> <p>Or to use a much more common example from the real world : <strong><em>When your politicians repeatedly pass laws that hurt you in favor of large corporations -- that, too, is infuriating. Especially if those actions run directly counter to their campaign promises.</em></strong></p> <p>There&rsquo;s a lot of be infuriated about in the world today, so go ahead and embrace your rage. By doing so, you&rsquo;ll be in a better mindset to understand things like Brexit, Catalonia, and Trump, each of which is a reflection of the fury of your fellow citizens, who are finally waking up to the fact that they&#39;ve been victims for too long.</p> <p><strong>An easy prediction to make is that this simmering anger of the populace is going to start boiling over more violently in the coming years. Welcome to the Age of Fury.</strong></p> <h2><strong><u>&#39;Over The Top&#39; Dumb</u></strong></h2> <p><em><strong>Do you ever get the sense that, as a society, we&#39;re being dangerously reckless? Perhaps so dumb that we might not recover from the repercussions of our stupidity for many generations, if ever?</strong></em></p> <p>There are economic and financial idiocies in motion that are, by themselves, unsolvable predicaments without a peaceful solution. But when combined with resource depletion and declining net energy, they&#39;re positively intractable.</p> <p>Take for example the hundreds of trillions of dollars-worth of underfunded entitlement and pension promises. Those promises cannot be kept and they cannot be paid. Everybody with a basic comprehension of math can conclude as such.</p> <p>Yet we continue to operate as if the opposite were true. We comfort ourselves that, somehow, all the promised future payouts will be made in full -- even though the funds are insolvent, their returns are much lower than the actuarial projections require, and payout demand mercilessly rises each year.</p> <p><strong>Spoiler alert: This isn&rsquo;t some future disaster lying in wait. It&rsquo;s unfolding right now.</strong></p> <p>Take these headlines spanning the past several years:</p> <ul> <li style="line-height: 19.5px;"><a href="">Congress approves plan to allow pension cuts</a>&nbsp;(Dec 2014)</li> <li><a href="">273,000 union workers and retirees brace for pension cuts</a> (May 2, 2016)</li> <li><a href="">In unprecedented move, pension plan cuts benefits promised to retirees</a>&nbsp;(Jan 27, 2017)&nbsp; -- note the laughable use of &quot;unprecedented&quot; here</li> <li><a href="">Teamsters face 31 percent pension cut</a> (Mar 7, 2017)</li> <li><a href="">New York State Teamsters pension fund cuts approved </a>(Sept 13, 2017)</li> </ul> <p>When it comes to broken retirement promises, the future is now. It will be with us for a very long time.</p> <p><strong>Why? Because the math simply doesn&rsquo;t work. It&rsquo;s broken, it&rsquo;s been broken for a long time. You can&#39;t put too little in the piggy bank at the start, then raid it over time, and still expect to have enough at the end.</strong></p> <p>And yet we, as a society, have preferred to pretend as if that weren&rsquo;t the case. Which, it turns out, was a terrible &ldquo;strategy.&rdquo;</p> <p>But if you think that&#39;s bad, you&rsquo;re going to positively hate this chart:</p> <p class="rtecenter"><img alt="S&amp;P 500 chart" src="" style="height: 432px; width: 600px;" /></p> <p>The pension liabilities now blowing up are contained within the thin green smear in the middle of this chart. Think on the nation&#39;s inability to handle that single crisis, and now reflect on how overwhelmed it&#39;s going to be by the far larger predicaments that lie elsewhere on the chart.</p> <h2><u>The Infuriating Plunder-fest That Is Health Care</u></h2> <p>The Medicare liabilities (the orange and largest band on the above chart) are immense, and will only become more so as our largest demographic, the baby boomers, further ages. But they become especially infuriating when seen in the larger context of the racketeering that drives the health care system in the United States.</p> <p>Instead of doing anything constructive about the high number of IOUs building up within Medicare, Washington DC politicians are sidestepping the most obvious elements that contribute the most to the problem. Enormously wasteful, the &ldquo;healthcare&rdquo; system is entirely out of control and spiraling deeper into an abyss that threatens to literally destroy the most productive segment of the US social structure: the middle and upper middle classes.</p> <p><strong>That should be a topic of serious discussion in the halls of power. But none is being had.</strong></p> <p>Literally each day brings worse news on the skyrocketing costs of healthcare. But, as with most topics,&nbsp; the media mostly focuses on the symptoms (prices) rather than the causes of the issue.</p> <p>The real culprits here are the insurance cartel and a hospital system that has the most unfair, incomprehensible, and inhumane billing process ever devised. One easy to grasp feature of both the insurance companies and conspire to pay the executives far more than they actually deserve or are truly worth.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Health care premiums for 2018 set to go up by as much as 50 percent</strong></p> <p>Oct 5, 2017</p> <p>&nbsp;</p> <p>Several states have announced rates for health insurance premiums on the Obamacare exchanges for 2018. Topping the list is <strong>Georgia, with rates that are 57 percent higher than last year, while Florida said some premiums will be 45 percent higher.</strong></p> <p>&nbsp;</p> <p><strong>Among the reasons for these increases is the uncertainty about the future of the Affordable Care Act. </strong>President Donald Trump has vowed to repeal and replace the health care law, which was passed under his predecessor President Barack Obama.</p> <p>&nbsp;</p> <p><strong>Insurers are raising premiums in the face of repeated threats from President Trump to stop funding so-called cost-sharing reductions, payments to insurers that cover out-of-pocket costs for some low-income consumers.&nbsp;</strong>Trump previously referred to these payments as &ldquo;bailouts&rdquo; for insurance companies and threatened to stop making the payments so as to &ldquo;let Obamacare implode&rdquo;.</p> <p>(<a href="">Source</a>)</p> </blockquote> <p>That&rsquo;s the story the health insurers are going with: they have to raise rates because they&#39;re uncertain whether they will get AS MUCH LOOT under the new rules being considered as they did under the utterly disastrous Obamacare provisions.</p> <p><strong>How much loot are we talking about?</strong> Look at this chart of the stock price of United Healthcare (UNH) since the passage of the Affordable Care Act (aka Obamacare):</p> <p class="rtecenter"><img alt="S&amp;P 500 chart" src="" style="height: 372px; width: 600px;" /></p> <p>If this chart showing massive near-4x gains in just 5 years, coupled with your steep annual premium increases, doesn&rsquo;t infuriate you, you are just not getting it.</p> <p><strong>Even if your employer pays for your health care (somewhat obscuring the true impact of premium increases), the cost to you is fewer and lower pay increases, as well as steady yearly reductions in covered services along with higher co-pays and deductible amounts.</strong></p> <p><u><strong>Still not infuriated?</strong></u> Ok, maybe this will do the trick. Here how much executive compensation at the major insurers was last year:</p> <p class="rtecenter"><img alt="S&amp;P 500 chart" src="" style="height: 457px; width: 600px;" /></p> <p class="rtecenter">(<a href="" target="_blank">Source</a>)</p> <p>The average family health care insurance premium in 2016 was $18,764, meaning that Mark Bertolini from Aetna alone required 100% of the premiums from more than 2,200 families just to pay him in 2016. Of course, the &ldquo;C-suite&rdquo; of these health care insurers are loaded with other high-paid parasites who are just as busy gouging the young and old alike.</p> <p>This is a complete travesty and joke. Congress and the Senate, sitting on their deservedly low approval ratings, pretend they cannot do anything about it. Too complicated they say. Bullshit I say. Go after the obscene pay packages and profits of the insurance industry as a first matter of business. Then make it a crime for hospitals to bill people differently for the exact same services.</p> <p><em><strong>That&rsquo;s a no-brainer. Can you imagine if your mechanic had a secret pricing formula for every customer that was, literally, based on their maximum ability to pay? Nobody would stand for it, it&rsquo;s disgusting that we tolerate this when it comes to something as vital and necessary as our health and even lives.</strong></em></p> <p>Fury, not tolerance, is what&#39;s needed now.</p> <h2><u><em>Conclusion (to Part 1)</em></u></h2> <p><strong>The future has arrived. The pension losses are here and just getting started and the future will have a lot more of those sorts of broken promises.</strong></p> <p>The health care insurance crisis has been with us for 20 years or so now and Obamacare just put some extra accelerant on that fire, which is now consuming middle class households by the tens of thousands.</p> <p>Both the pension and health care crises are infuriating and self-inflicted wounds. We could have avoided them by making wiser choices in the past. We didn&#39;t. We could limit their damage by making better choices today. We almost assuredly won&#39;t.</p> <p>Current conversations and proposals are thinly disguised sleight-of-hand movements whose purpose is to deflect attention from the thefts underway. Anybody who studies the system and its math comes to the same conclusion: the corporations have all the power and they are misusing it for private gain.</p> <p><strong>Why there aren&rsquo;t more politicians willing to call a spade a spade and actually protect their constituents is a real mystery. But the next wave of populist candidates certainly won&rsquo;t be. People are sick and tired of being asked to give more and more while corporations and wealthy elites keep taking more and more.</strong></p> <p>It&rsquo;s simply infuriating.</p> <p><strong>But that&rsquo;s not the worst of it. The mistakes we are making right now in terms of energy policy and ecological destruction are far more dangerous to your personal health, liberty and future prospects than a simple market crash.</strong></p> <p><em>In <a href="" target="_blank">Part 2: It&#39;s Time For Action</a>, we uncover the hidden downside risks in today&#39;s financial markets and explain how, as destructive as a coming market crash will be, the longer-term damage to society and risks to your well-being are rooted in the potential breakdown of the systems we depend on to live. As with pensions and health care, we are pursuing similar dangerously misguided policies in our farming &amp; food systems, extraction of industrial resources, and ecological management -- to name just a few.&nbsp; There&#39;s an appropriate time for fury. And that time is now -- provided we use the anger to spur us into constructive action. Get your fury on. <a href="" target="_blank">Click here to read Part 2&nbsp;</a>of this report&nbsp;(free executive summary,<a href="" target="_blank">&nbsp;enrollment&nbsp;</a>required for full access)</em></p> </div> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="287" height="178" alt="" src="" /> </div> </div> </div> 111th United States Congress Barack Obama Chris Martenson Congress Donald Trump Excises Finance Florida headlines Health Health insurance Healthcare reform in the United States Insurance Insurance Companies Internal Revenue Code Internal Revenue Service Labor Market Crash Medicare Medicare Medicare Money New York State None Obamacare Patient Protection and Affordable Care Act Presidency of Barack Obama Racketeering ratings Senate Social Issues Sat, 21 Oct 2017 19:35:00 +0000 Tyler Durden 605738 at