http://www.zerohedge.com/fullrss2.xml/etf_headlines/etf_headlines/etf-in-focus-gxc-march-11-2013.html en Iran’s President Tacitly Admits Iran is Cheating on Nuclear Agreement http://www.zerohedge.com/news/2017-08-16/iran%E2%80%99s-president-tacitly-admits-iran-cheating-nuclear-agreement <h1 class="post_title" style="font-family: Arial, 'Helvetica Neue', Helvetica, sans-serif, sans-serif; font-size: 25px; line-height: 1.4em; margin-top: 0px; margin-bottom: 0px; letter-spacing: -0.9px; color: #40271c !important;"><span style="font-size: 16px; font-weight: normal; letter-spacing: normal; background-color: #f8f8f8;">The following article by <strong>David Haggith</strong> is from <strong><em><a href="http://thegreatrecession.info/blog/irans-president-tacitly-admits-iran-cheating-nuclear-agreement/">The Great Recession Blog</a></em></strong>:</span></h1> <div class="singlepost entry" style="border-bottom-left-radius: 5px; background-color: #f8f8f8; border-top-width: 1px; border-top-style: solid; border-top-color: #610906; font-family: Arial, 'Helvetica Neue', Helvetica, sans-serif, sans-serif; line-height: 1.5em; margin-top: 4px; padding: 2px 4px 1px; width: 647.953125px; font-size: 16px; color: #40271c;"><img src="https://i0.wp.com/thegreatrecession.info/blog/wp-content/uploads/BlackHole-e1455587754258.jpg?fit=500%2C400" alt="(Black hole as symbol of negative interest rates policy.) By XMM-Newton, ESA, NASA [Public domain], via Wikimedia Commons" width="500" height="400" style="float: left; margin-right: 6px; margin-left: 6px; border-top-left-radius: 3px; border-top-right-radius: 3px; border-bottom-right-radius: 3px; border-bottom-left-radius: 3px; padding: 4px; box-shadow: none !important; border-style: none !important; opacity: 1 !important;" class="attachment-single-post-thumbnail size-single-post-thumbnail wp-post-image" /><br /> <p style="margin: 5px 5px 10px;">Countering recent US sanctions and President Trump’s talk of ending the “bad” nuclear agreement with Iran, Iran’s president threatened to restart its nuclear program. If his threat is true as stated, he unwittingly admitted something highly supportive of Trump’s position:</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <blockquote style="margin: 15px 0px; padding-left: 40px;"><p style="margin: 5px 5px 10px; display: inline;">Mr. Rouhani said that a reconstituted nuclear program would be&nbsp;<em>“far more advanced,</em>” a veiled threat that the country could start enriching uranium up to the level of 20 percent….&nbsp;“<em><strong>Iran will definitely revert to a far more advanced situation than it had before the negotiations, not in a matter of weeks or months but<span style="text-decoration: underline;">&nbsp;in a matter of days or hours</span>.</strong></em>” (<a href="https://www.nytimes.com/2017/08/15/world/middleeast/iran-nuclear-hassan-rouhani-us.html" style="text-decoration: underline; color: #c43a18;"><em>New York Times</em></a>)</p> </blockquote> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">If Iran is capable of ratcheting up its program in a matter of weeks to enrich uranium to 20%, that means it has been purchasing and stockpiling all the equipment it needs to do that because such equipment cannot be built and installed that fast. So, the equipment is “stored” in a manner that is ready to go. That, in itself, probably violates the terms of the agreement (known as the “Joint Comprehensive Plan of Action”).</p> <p style="margin: 5px 5px 10px;">HOWEVER, there is only one way Iran can have the capability to ratchet up production to “more advanced” levels than it had&nbsp;<em>before the negotiations</em>&nbsp;“in a matter of days or hours.” While I have no expertise in such equipment, it does not strike me as the kind of production process where you push a button, and you’re up and running with 20% enriched uranium coming out the other end in a matter of hours.</p> <p style="margin: 5px 5px 10px;"><em>The New York Times</em>&nbsp;seems to have missed that little tidbit. In fact, all the mainstream media stories today are missing this. Reuters, the BBC, CBS, the&nbsp;<em>Wall Street Journal</em>&nbsp;and CNN are all reported yesterday that Iran’s president said Iran could&nbsp;<em>abandon the nuclear deal</em>&nbsp;within hours. He did NOT say that. He stated quite plainly that Iran could be in “a more advanced&nbsp;<em>situation</em>” than it had before negotiations within hours — not that it could be out of the deal in that much time, but that it could show itself to be<em>&nbsp;in a more advanced situation than existed before the deal.</em></p> <p style="margin: 5px 5px 10px;"><a href="http://www.cbsnews.com/news/iran-president-hassan-rouhani-threatens-to-restart-nuclear-program/" style="text-decoration: underline; color: #c43a18;">CBS News</a>&nbsp;almost got it right. They reported the words of the Iranian president as follows:</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <blockquote style="margin: 15px 0px; padding-left: 40px;"><p style="margin: 5px 5px 10px; display: inline;">“<em><strong>I</strong><strong>n an hour and a day, Iran could return&nbsp;<span style="text-decoration: underline;">to a more advanced (nuclear) level</span>than at the beginning of the negotiations”</strong></em>&nbsp;that preceded the 2015 deal, Rouhani said.&nbsp;He did not elaborate.</p> </blockquote> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">But then they minimized those words in their own reportage to match the rest of the MSM by claiming Rouhani said he could exit the deal in that much time, missing completely the import of their record of his words, which said he could get to&nbsp;<em>a more advanced nuclear level</em>&nbsp;in just that much time. Unlike the rest of the MSM, they did, however, admit,</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <blockquote style="margin: 15px 0px; padding-left: 40px;"><p style="margin: 5px 5px 10px; display: inline;">It was not immediately clear what Rouhani was referring to – and whether he meant Iran could restart centrifuges enriching uranium to higher and more dangerous levels.</p> </blockquote> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">There is a huge difference between what Iran’s president actually said and the way the mainstream media is trying to minimize his words. No doubt the MSM doesn’t want to admit Trump was right when he said during the campaign, “Never ever EVER in my life have I seen any transaction so incompetently negotiated as our deal with Iran.”</p> <p style="margin: 5px 5px 10px;">The words of Rouhani’s nuclear chief below certainly clarify what Rouhani was threatening if some people are finding it difficult to understand (because they don’t want his statement to mean what he appears to have said).</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <h3 style="font-size: 1.4em; line-height: 1.6em; margin-top: 5px; margin-bottom: 3px;">What did Iran’s president actually threaten?</h3> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">The head of Iran’s nuclear program made clear that Rouhani did mean 20% enrichment&nbsp;<em>and</em>&nbsp;that Iran would be able to demonstrate that ability in a surprising way:</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <blockquote style="margin: 15px 0px; padding-left: 40px;"><p style="margin: 5px 5px 10px; display: inline;">Ali Akbar Salehi, president of the Atomic Energy Organization of Iran, said&nbsp;<em><strong>the country could go up to 20 percent enrichment to “</strong><strong>surprise the Americans.</strong></em>” (from&nbsp;<em>The New York Times</em>&nbsp;article above)</p> </blockquote> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">The clarification, if it is really needed, is right there in the original story. The MSM just doesn’t want to see it.</p> <p style="margin: 5px 5px 10px;">It would be no surprise whatsoever to find out that Iran could exit the deal in a day and an hour. It would also be no surprise at all to find out that Iran could build up the resources needed to&nbsp;<em>start</em>&nbsp;enriching uranium to 20%. They’ve already done that in the past. It would, however, certainly be a surprise to many to see 20% uranium being produced in a matter of hours, as that would indicate they were already carrying out such enrichment or that they never got rid of their 20% uranium as the JCPA required, either of which would verify that Trump was right about the agreement being a bad deal.</p> <p style="margin: 5px 5px 10px;">The only way Iran could now demonstrate production increases to 20% enrichment<em>&nbsp;within hours</em>&nbsp;(or “a day and an hour,” depending on which version of the story you read) is if its equipment is already producing highly enriched uranium so that all Iran would have to do to beat the high levels of enrichment that were known before the negotiations would be to start revealing what they are already producing!</p> <p style="margin: 5px 5px 10px;">Iran’s existing 20% enrichment fueled the JCPA in the first place. It is why the JCPA required Iran reduce its stock of 3.5% to a level that would not allow it to make enough 20% to become rapidly dangerous. So, how is it that Iran is now able to surprise the Americans with 20% enrichment in “days or hours?”</p> <p style="margin: 5px 5px 10px;">You can say this is just typical Iranian saber rattling, but since Iran’s president made this statement to the world as an argument against congress’s new sanctions and Trump’s statements that they are violating Obama’s nuclear agreement, I say we take him at his word. It is, after all,&nbsp;<em>his</em>&nbsp;argument as&nbsp;<em>he</em>&nbsp;chooses to make it. His word is that Iran can demonstrate 20% enrichment to the US&nbsp;<em>within hours.</em>&nbsp;(And it’s possible he even meant something more than 20% enrichment. I’m just limiting my understanding of his words to what his top energy dog claimed.)</p> <p style="margin: 5px 5px 10px;">Prior to the JCPA, Iran was known to already have enough 3.5% in the right gaseous form for further enrichment to make&nbsp;<em>seven</em>&nbsp;bombs if enrichment continued, using the centrifuges Iran already had. So, showing the world some uranium enriched to 3.5% wouldn’t cause anyone to raise an eyebrow because 1) the JCPA already allows that, and 2) it would not be “a far more advanced situation than … before the negotiations.”</p> <p style="margin: 5px 5px 10px;">In fact, even having some 20% is not a situation that is advanced beyond what existed before the negotiations.&nbsp;Iran already had hundreds of kilograms of 20% enriched uranium prior to the agreement in both solid (fuel) form and gaseous form (ready to be enriched to bomb-grade). That fact alone causes one to lean beyond the nuclear boss’s statement of a surprise at 20%. At 20%, the only surprise could be in how quickly Iran is able to produce that level of enrichment, meaning that the agreement hasn’t curtailed Iran’s breakout time to a nuclear bomb.</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <h3 style="font-size: 1.4em; line-height: 1.6em; margin-top: 5px; margin-bottom: 3px;">How long does uranium enrichment take?</h3> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">The&nbsp;<a href="http://www.washingtoninstitute.org/uploads/Documents/infographics/HeinonenInfographic.pdf" style="text-decoration: underline; color: #c43a18;">Washington Institute</a>&nbsp;stated just before the nuclear accord was signed that it would take 18,000 centrifuges (the maximum number Iran was known to own before the agreement) only five weeks to turn the 3.5% level of enrichment that Iran is openly allowed under the accord into enough highly enriched uranium (90%) to make a single bomb (27kg enriched to 90%). That is why Iran was also required under the JCPA to reduce its number of available centrifuges to 6,500.</p> <p style="margin: 5px 5px 10px;">While that is a rapid leap to a bomb, it certainly doesn’t sound like the kind of fast process that would yield a surprise for Americans in a matter of&nbsp;<em>hours</em>.&nbsp;It takes much longer to enrich uranium up to Iran’s allowed 3.5% than it takes to go from 3.5% up to the agreement-violating step of 20%, which is used in research reactors, and then takes very little time and effort to go from 20% to the 90% used for bombs. So, what level is Iran now at that would allow a “surprise” in mere hours?</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;"><a href="http://thegreatrecession.info/blog/irans-president-tacitly-admits-iran-cheating-nuclear-agreement/graph_of_time_to_enrich_urnanium/" style="text-decoration: underline; color: #c43a18;" rel="attachment wp-att-77362"><img src="https://i1.wp.com/thegreatrecession.info/blog/wp-content/uploads/Graph_of_time_to_enrich_urnanium.jpg?resize=500%2C298" alt="graph of time to enrich uranium to weapons grade" width="500" height="298" style="max-width: 97%; padding: 4px; height: auto; display: block; margin-left: auto; margin-right: auto; text-align: center; border-top-left-radius: 3px; border-top-right-radius: 3px; border-bottom-right-radius: 3px; border-bottom-left-radius: 3px; border-style: none !important; box-shadow: none !important; opacity: 1 !important;" class="aligncenter size-full wp-image-77362" /></a></p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">The World Nuclear Association states that&nbsp;<em>restarting</em>&nbsp;centrifuges (just restarting, not installing and building) is a costly process. So, even if Iran’s centrifuges were not taken down as required, simply getting them back online sounds like it takes significant time as “costly processes” on the level of production that the World Nuclear Association cares about do not &nbsp;happen in a few hours. (Only closely mistakes happen that fast.)</p> <p style="margin: 5px 5px 10px;">An alternative explanation of the Iranian president’s warning would be that Iran, under the cloak of the JCPA, has managed to acquire and stockpile much better equipment than the already advanced equipment it was required to dismantle by the agreement. The JCPA would, indeed, be “a very bad deal” if it allowed Iran to purchase and store more advanced technology than what it had before negotiations and, thereby, reduce its breakout time to a bomb.</p> </div> http://www.zerohedge.com/news/2017-08-16/iran%E2%80%99s-president-tacitly-admits-iran-cheating-nuclear-agreement#comments Atomic Energy Organization of Iran Enriched uranium Foreign relations of Iran Iran Iran–United States relations Joint Comprehensive Plan of Action National Security and Nuclear Diplomacy Negotiations leading to the Joint Comprehensive Plan of Action New York Times Nuclear energy in Iran Nuclear physics Nuclear program of Iran Nuclear technology Politics Politics of Iran Recession Reuters Uranium Uranium Wall Street Journal Washington Institute World Nuclear Association Wed, 16 Aug 2017 23:40:38 +0000 Knave Dave 601818 at http://www.zerohedge.com How To Hedge A Near-Term Market Shock: Here Are The Best Trades http://www.zerohedge.com/news/2017-08-16/how-hedge-near-term-market-shock-here-are-best-trades <p>As we showed earlier today, <a href="http://www.zerohedge.com/news/2017-08-16/two-stunning-facts-about-last-weeks-vix-explosion">last Thursday's unexpected, historic VIX explosion, </a>driven by a surge of geopolitical worries about North Korea,<a href="http://www.zerohedge.com/news/2017-08-16/two-stunning-facts-about-last-weeks-vix-explosion"> </a>and subsequent collapse was remarkable in both how fast and furious it was both on the way up and then, on the way down.As Bank of America said "<em>both the spike in vol and the speed of its retracement were almost unmatched</em>."<strong></strong> </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/VIX%20move%20speed.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/VIX%20move%20speed_0.jpg" width="500" height="196" /></a></p> <p>The move was also unprecedented in the sheer volume of VIX-related products - futures, options and ETFs - that participated in the surge higher as thousands of vol sellers suddenly scrambled to cover their positions (even if they were ultimately replaced with a new set of vol sellers). As BofA calculated, "volume in VIX-linked products reached an all-time high" with volume in VIX call and put options reaching a $250M<br />vega. VIX futures also had a record volume day with $850M while VIX ETP volumes hit $830M. </p> <p><strong>&nbsp;</strong> </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%20vega.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%20vega_0.jpg" width="500" height="453" /></a></p> <p>In retrospect, the biggest surprise about last week's move - especially considering the loud warnings by famous Wall Street names such as Jeff Gundlach and Howard Marks predicted such a move - is how many people were taken by surprise by it. Or maybe they were not surprised, but just did not want or know how to hedge.</p> <p>As Bank of America's Benjamin Bowler writes, "<strong>most people ignore extreme risk as it’s simply too hard to price." </strong>One possible reason is because deciding whether to hedge tail risks is difficult not only because of the challenge of estimating the probability of a “rare event”, but it’s also compounded by the difficulty of gauging the size of the shock, <strong>if the event occurs. </strong>This is likely why a majority of cross-asset volatilities remain near historical lows despite the threat of a nuclear conflict becoming most acute perhaps since the Cuban missile crisis in 1962, according to Bank of America.</p> <p>And yet, if the events from last week demonstrated something, it is that just when there appears to be virtually no risk, is when the likelihood of a historic surge in volatility is greatest, as many experienced first hand last Thursday. Hence the need to hedge.</p> <p><strong>But what?&nbsp; And using which product? </strong></p> <p>Because, as Bowler also shows when it comes to discounting the probability of the next severe market shock, virtually every derviative product has a different perspective. As the strategist notes, "the decision about whether it’s rationale to hedge is really a matter of looking at the price of tail insurance embedded into option markets and asking if the probabilities they assign are “fair” or not." As he further writes, when it comes to predicting what the next "severe tail event" could look like, <strong>"we find that not only are some markets like Gold pricing in a very low probability of Korean risk escalation, there are significant differences across assets in terms of what they imply about potential risks.</strong>"</p> <p>The chart below shows how historical worst 3M drawdowns since 2006 are priced by 3M 25- delta options across asset classes; hedges that are most underpricing their historical drawdowns are at the top and those most overpricing their tails are at the bottom. What the chart shows is that <strong>gold call options still imply less than a 1 in 100 chance of a severe tail event over the next month, </strong>despite being among the most reactive assets to rising Korean tensions last week. With record low Gold vol slaved to record low real rates vol, this represents a loose anchor which likely won’t hold in any significant geopolitical risk escalation. In contrast to gold, <strong>Nikkei is at the other end of the spectrum with options assigning over a 5% chance of a near term tail-event.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/vol%20bofa%202.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/vol%20bofa%202_0.jpg" width="500" height="326" /></a></p> <p>Looking at 3M 25-delta options, however, may not be the best measure of the price of “rare event” risk priced into options. </p> <p>As BofA suggests, "<em>to get a better understanding of this implied risk for six assets – Gold, S&amp;P 500, NKY (Japan equity), KOSPI2 (Korean equity), UKX (UK equity) and SX5E (European equity) – we estimate what options are pricing into their extreme tails using the following methodology:</em>"</p> <ul> <li>For each asset across its entire sample history, we identify the ten largest “vol-adjusted” drawdowns within 1-month periods. The reason for normalizing by volatility is that we have shown that while nominal asset drawdowns can significantly vary historically, vol-adjusted drawdowns are more evenly distributed. In other words, the probability of a 1-day drop in the S&amp;P 500 equivalent in magnitude to the 1987 US stock market crash (-21%) is virtually zero at today’s low vol levels. So for each historical drawdown, we adjust for the prevailing vol level and assume we were to see a similar “sigma-drawdown” today.</li> <li>We then compute the probability that options are assigning to markets falling to (i) their 10th worst historical drawdown and (ii) the average of their 10 worst drawdowns in each asset (as shown in Chart 10).</li> </ul> <p>BofA's analysis confirms that Gold is indeed pricing in the smallest probability of a “tail event”. The implication also is that should a "tail event" occur, the return from a gold-based hedge would be the one with the highest return.&nbsp; Here are the details: </p> <ul> <li>As implied from Gold (GLD ETF) options, the probability that Gold rallies over the next month by 10.3% (equivalent to the 10th largest vol-adjusted rally in Gold’s history) is 1.7%. The probability that Gold rallies by 14.6% (equivalent to the average of the 10 largest vol-adjusted rallies) is a mere 0.7%. <strong>This suggests GLD calls are implying less than a 1 in 100 chance (1 out of 143) of its average historical tail event occurring in the next month</strong>.</li> <li>At the other end of the spectrum is NKY, <strong>where options imply the probability that Japanese equities fall by 8.2% (10th largest drawdown) over the next month is 6.1% and the probability they fall by 10.4% (average of 10 largest </strong><strong>drawdowns) is 5.1% (1 in 20 chance).</strong></li> </ul> <p>In other words, just between gold and Nikkei options, the "priced in" probability of a crash is either ~1% in the case of gold, or 5% in the case of the Japanese Nikkei. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%203%20reaction.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%203%20reaction_0.jpg" width="500" height="347" /></a></p> <p>What about S&amp;P 500 puts? As the chart above shows, they are currently pricing in the second-highest level of&nbsp; tail risk after NKY, following the strong rise in S&amp;P skew last week. <strong>The probability that US equities fall by 7% (10th largest drawdown) over the next month is 4.5% and the probability they fall by 8.65% (average of 10 largest drawdowns) is 3.1%</strong>.</p> <p>* * * </p> <p>Why is gold such a great hedge to future volatility? One possible explanation for the relative attractiveness of gold-based hedges hinges on gold’s optionality being historically depressed. This has primarily been driven by realized volatility which has been steadily declining since the gold rally in Q1-16 and is now at multi-year lows (Chart 11). An important force behind gold’s declining volatility is real rates volatility.&nbsp; Indeed, real rates have a traditional relationship with gold through the channel of rational investment decisions, whereby investors measure the relative attractiveness of gold by how much they can earn elsewhere. As interest rates rise, so does the opportunity cost of holding a non-interest bearing asset such as gold.</p> <p>While the relationship is not linear as not all real rate environments are created equal, and other important factors – such as the USD – impact underlying price dynamics, never before has this relationship has been so strong (see Chart 12). Importantly, real rates volatility itself has fallen to levels unseen since the start of the 2000s. This in turn has caused gold volatility to fall to ultra-low levels as correlation between gold/rates volatilities recently climbed to multi-year highs (see Chart 13).</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%205%20gold.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%205%20gold_0.jpg" width="500" height="210" /></a></p> <p>* * * </p> <p>What are the conclusion? BofA's analysis reveals that for <strong>those "hedging" an imminent market crash (over the next month) should be aware that the payout ratios of “tail options” is highest for Gold, and lowest for NKY and SPX. </strong></p> <p><em>So, for those who believe the above implied probabilities are too low relative to the potential geopolitical risks at hand, buying far out of the money “tail options” may be the best trade. </em>While there is more art than science to deciding on precise strikes and maturities, however, Table 2 below illustrates payout ratios for these six markets assuming 1M options are struck at the 10th worst vol-adjusted drawdown, but that markets fall to the average of their 10 worst drawdowns. In other words, if we get a shock that is worse than the 10th worst historical event but equal to the average of the 10 worst, what is the payout relative to cost of the tail insurance purchased today?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%204%20trade.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%204%20trade_0.jpg" width="500" height="192" /></a></p> <p>As shown in the table above, <strong>deep out of the money GLD calls would offer 56 to 1 payout ratios with this methodology, far more than any other asset, followed by UKX (35 to 1), SX5E (25 to 1), KOSPI2 (9 to 1), SPX (6 to 1), and NKY (5 to 1).</strong></p> <p>Finally, some parting words from BofA:<strong></strong> </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>We see the escalation of ongoing geopolitical tensions as a very plausible candidate for <strong>propelling both rates and gold volatility </strong>higher as investors flee to Treasuries and gold (both perceived as ‘safe haven’ assets). Indeed our rates strategists <strong>recently recommended accumulating US rate volatility in anticipation of a potential political risk-induced risk-off in September.<br /></strong></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="789" height="474" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bofa%20vol%20post%20teaser.jpg?1502924165" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/how-hedge-near-term-market-shock-here-are-best-trades#comments Bank of America Bank of America Drawdown Economy Finance Futures contract Gundlach Howard Marks Japan Jeff Gundlach Market Crash Mathematical finance Money Nikkei Nikkei 225 North Korea Option S&P 500 S&P/ASX 200 VIX Skew Technical analysis VIX Volatility Volatility Wed, 16 Aug 2017 23:28:21 +0000 Tyler Durden 601815 at http://www.zerohedge.com House To Hold Hearing On White Supremacist Threat Amid Financial, Social Media Crackdown http://www.zerohedge.com/news/2017-08-16/house-hold-hearing-white-supremacist-threat-amid-financial-social-media-crackdown <p>Now that Trump's "Russian collusion" ties, and various assorted Congressional hearings on the topic have quietly moved away from the front pages, there is a new hot topic in the Hill, and as <a href="http://www.reuters.com/article/us-virginia-protests-statues-idUSKCN1AV0XE?il=0">Reuters reports</a>, the Homeland Security Committee of the House of Representatives will hold a hearing next month "<strong>about threats from extremist groups, including domestic terrorism</strong>", following a violent white supremacist rally in Charlottesville, Virginia, last weekend.</p> <p>In a letter to the panel's top Democrat, Representative Bennie Thompson, panel's chairman, Republican Representative Michael McCaul, announced that he will hold a hearing on Sept. 12.&nbsp; "We must stand together and reject racism, bigotry, and prejudice, including the hateful ideologies promoted by neo-Nazis, the KKK, and all other white supremacy groups," McCaul said.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>McCaul's letter was in response to a request from Thompson and the other Democrats on the committee to hold a hearing on the subject. "It is past time for this Committee on Homeland Security to act," the Democrats wrote to McCaul. </p> <p>&nbsp;</p> <p><strong>The committee will invite leaders of the Homeland Security Department, the FBI and the National Counterterrorism Center to discuss the most serious threats the United States faces, </strong>McCaul said.</p> </blockquote> <p>Meanwhile, the financial crackdown against extremist organizations is picking up speed. According to <a href="https://www.bloomberg.com/news/articles/2017-08-16/discover-ends-dealings-with-hate-groups-after-charlottesville">Bloomberg</a>, Discover Financial announced it was ending merchant agreements with extremist organizations that incite violence.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“In light of recent events, we are terminating merchant agreements with hate groups, given the violence incited by their extremist views,” the Riverwoods, Illinois-based credit-card company said Wednesday in an emailed statement. “The intolerant and racist views of hate groups are inconsistent with our beliefs and practices. While we do not share their opinions, we recognize their right to voice them, no matter how reprehensible we find them.”</p> </blockquote> <p>Advocacy groups have been calling on major credit-card companies to stop providing financial services for groups such as white supremacists. Color of Change, a racial-justice advocacy group, said Monday that financial services provided by major credit-card companies have been enabling hate groups. <strong>Discover declined to say how many groups it’s ending agreements with, or name them</strong>.</p> <p>Separately, Mastercard said it will continue to actively monitor the use of its network by websites that “unlawfully promote or incite violence,” according to a statement from spokesman Seth Eisen. If the network is made aware of activity that is illegal or violates its rules, then it will work with the merchant’s bank to ensure the activity stops, Eisen said. Still, Eisen said the company has consistently stated its belief that offensive speech “has and will be seen for what it is.” “For that reason, we generally do not prohibit the acceptance of Mastercard-branded payment cards by merchants based on our disagreement with specific views espoused or promoted,” Eisen said in the emailed statement.</p> <p>Visa has also reviewed the list of hate sites, religious organizations, and political groups provided to it by “concerned organizations,” Amanda Pires, a spokeswoman, told Bloomberg. The company determined that a number of the sites weren’t adhering to the merchant acquirer’s acceptable-use policies or were engaging in illegal activities.</p> <p>“For this reason, these sites are no longer able to accept Visa payments,” Pires said. “Visa does not, however, restrict transactions that are legal and involve free speech or lawful expression of views, even if we may find the organization or its positions to be offensive.”</p> <p>* * * </p> <p>Finally, the crackdown is also taking place on social media, where <a href="http://www.reuters.com/article/us-virginia-protests-tech-idUSKCN1AW2L5">Reuters reported that Twitter </a>on Wednesday suspended accounts linked to the neo-Nazi website Daily Stormer, keeping up pressure from Silicon Valley. Twitter said it would not discuss individual accounts, but at least three accounts affiliated with the Daily Stormer led to pages saying "account suspended."</p> <p>The San Francisco-based social network prohibits violent threats, harassment and hateful conduct and "will take action on accounts violating those policies," the company said in a statement. Facebook, which unlike Twitter explicitly prohibits hate speech, has taken down several pages from Facebook and Instagram in recent days that it said were associated with hate speech or hate organizations.&nbsp; </p> <p>The Daily Stormer has been accessible only intermittently the past few days after domain providers GoDaddy Inc and Alphabet Inc's Google Domains said they would not serve the website.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>By Wednesday, Daily Stormer had moved to a Russia-based internet domain, with an address ending in .ru. Later in the day, though, the site was no longer accessible at that address. </p> <p>&nbsp;</p> <p>Facebook confirmed on Monday that it took down the event page that was used to promote and organize the "Unite the Right" rally, saying it was "actively removing any posts that glorify the horrendous act committed in Charlottesville." </p> </blockquote> <p>On Wednesday, Facebook said it had removed accounts belonging to Chris Cantwell, a web commentator who has described himself as a white nationalist and said on his site that he had attended the Charlottesville rally. Cantwell's YouTube account also appeared to have been terminated.</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="890" height="501" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/white%20supreme.jpg?1502925920" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/house-hold-hearing-white-supremacist-threat-amid-financial-social-media-crackdown#comments Alt-right Cashless society Committee on Homeland Security Credit cards Criticism of feminism FBI Federal Bureau of Investigation Finance Google Hate group Hate speech Homeland Security Committee Homeland Security Department House of Representatives Internet trolling Ku Klux Klan MasterCard Money National Counterterrorism Center Reuters The Daily Stormer Twitter Twitter Worthington, Ohio Wed, 16 Aug 2017 23:25:54 +0000 Tyler Durden 601817 at http://www.zerohedge.com Why Elites Are Winning The War On Cash http://www.zerohedge.com/news/2017-08-16/why-elites-are-winning-war-cash <p><a href="https://dailyreckoning.com/elites-winning-war-cash/"><em>Authored by James Rickards via The Daily Reckoning,</em></a></p> <p><strong>Visa recently unveiled its own offensive in the war on cash. </strong>Visa is offering certain merchants a $10,000 reward if they refuse to accept cash in the future.</p> <p>Not surprisingly, Visa&rsquo;s competitor is also part of the war on cash. Mastercard is increasing its efforts to encourage merchants to refuse cash. Here&rsquo;s Bloomberg, quoting the CEO of Mastercard:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;Mastercard Chief Executive Officer Ajay Banga has been one of the most ardent supporters of ditching paper currency in the U.S. The 57-year-old first declared his war on cash in 2010.&rdquo;</em></strong></p> </blockquote> <p>These private efforts by Visa and MasterCard exist side by side with official efforts to eliminate or discourage the use of cash coming from governments in India, Australia, Sweden as well as the United States.</p> <p><strong>These efforts are always portrayed in the most favorable light.</strong> Private parties talk about convenience and lower costs. Governments talk about putting pressure on tax cheats, terrorists and criminals.</p> <p>Governments always use money laundering, drug dealing and terrorism as an<strong> excuse to keep tabs on honest citizens and deprive them of the ability to use money alternatives such as physical cash and gold.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_cash.png"><img height="298" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_cash_0.png" width="600" /></a></p> <p><strong>But the so-called &ldquo;cashless society&rdquo; is just a Trojan horse for a system in which all financial wealth is electronic and represented digitally in the records of a small number of megabanks and asset managers.</strong></p> <p>Once that is achieved, it will be easy for state power to seize and freeze the wealth, or subject it to constant surveillance, taxation and other forms of digital confiscation.</p> <p><u><strong>The war on cash has two main thrusts. </strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The first is to <strong>make it difficult to obtain cash in the first place. </strong>U.S. banks will report anyone taking more than $3,000 in cash as engaging in a &ldquo;suspicious activity&rdquo; using Treasury Form SAR (Suspicious Activity Report).</p> <p>&nbsp;</p> <p>The second thrust is to <strong>eliminate large-denomination banknotes. </strong>The U.S. got rid of its $500 note in 1969, and the $100 note has lost 85% of its purchasing power since then. With a little more inflation, the $100 bill will be reduced to chump change.</p> </blockquote> <p>Last year the European Central Bank announced that they were discontinuing the production of new 500 euro notes. Existing 500 euro notes will still be legal tender, but new ones will not be produced.</p> <p>This means that over time, the notes will be in short supply and individuals in need of large denominations may actually bid up the price above face value paying, say, 502 euros in smaller bills for a 500 euro note. The 2 euro premium in this example is like a negative interest rate on cash.</p> <p>The real burden of the war on cash falls on honest citizens who are made vulnerable to wealth confiscation through negative interest rates, loss of privacy, account freezes and limits on cash withdrawals or transfers.</p> <p><strong>The whole idea of the war on cash is to force savers into digital bank accounts so their money can be taken from them in the form of negative interest rates. An easy solution to this is to go to physical cash.</strong></p> <p><u>The war on cash is a global effort being waged on many fronts. </u>My view is that the war on cash is dangerous in terms of lost privacy and the risk of government confiscation of wealth.<strong> India provides the most dramatic example.</strong></p> <p>How would you like to go to bed one night and then wake up the next morning to discover that all bills larger than $5.00 were no longer legal tender? That&rsquo;s essentially what happened in India not long ago.</p> <p><strong>The good news is that cash is still a dominant form of payment in many countries including the U.S. </strong>The problem is that as digital payments grow and the use of cash diminishes, a &ldquo;tipping point&rdquo; is reached where suddenly it makes no sense to continue using cash because of the expense and logistics involved.</p> <p>Once cash usage shrinks to a certain point, economies of scale are lost and usage can go to zero almost overnight. Remember how music CDs disappeared suddenly once MP3 and streaming formats became popular?</p> <p><strong>That&rsquo;s how fast cash can disappear.</strong></p> <p>Once the war on cash gains that kind of momentum, it will be practically impossible to stop. That&rsquo;s why I&rsquo;m always saying that savers and those with a long-term view should get physical gold now while prices are still attractive and while they still can.</p> <p><strong>Given these potential outcomes, one might expect that citizens would push back against the war on cash.</strong></p> <p>But in some places, the opposite seems to be happening.</p> <p><strong>A recent survey revealed that more than a third of Americans and Europeans would have no problem at all giving up cash and going completely digital.</strong></p> <p>Specifically, the study showed 34% of Europeans and 38% of Americans surveyed would prefer going cashless.</p> <p>Notably, <u><strong>Germans are the most resistant to going cashless.</strong></u> Almost 80% of transactions in Germany are done in cash, and many Germans never use credit cards.</p> <p><strong>The German experience with hyperinflation after WWI and additional monetary chaos after WWII certainly plays a part in this resistance to the cashless society.</strong></p> <p>Incidentally, the German word for debt, <em>schuld</em>, also means guilt.</p> <p>Other countries, such as Romania and Bulgaria, which have recent experiences with currency and financial crises, also tend to use cash extensively.</p> <p>Of course, there&rsquo;s no denying that digital payments are certainly convenient. I use them myself in the form of credit and debit cards, wire transfers, automatic deposits and bill payments.</p> <p><strong>The surest way to lull someone into complacency is to offer a &ldquo;convenience&rdquo; that quickly becomes habit and impossible to do without.</strong></p> <p>The convenience factor is becoming more prevalent, and consumers are moving from cash to digital payments just as they moved from gold and silver coins to paper money a hundred years ago.</p> <p><strong>But when the next financial panic comes, those without tangible wealth will be totally at the mercy of banks and governments who will decide exactly how much of your own money you&rsquo;re allowed to have each day.</strong></p> <p>Just ask the citizens of Cyprus, Greece and India who have gone through this experience in recent years.</p> <p><u><strong>It will come to the U.S. soon enough.</strong></u></p> <p>Other dangers arise from the fact that digital money, transferred by credit or debit cards or other electronic payments systems, are completely dependent on the power grid. If the power grid goes out due to storms, accidents, sabotage or cyberattacks, our digital economy will grind to a complete halt.</p> <p>That&rsquo;s why it&rsquo;s a good idea to keep some of your liquidity in paper cash (while you can) and gold or silver coins. The gold and silver coins in particular will be money good in every state of the world.</p> <p><em><strong>I hold significant portion of my wealth in nondigital form, including real estate, fine art and precious metals in safe, nonbank storage.</strong></em></p> <p><strong>I strongly suggest you do the same.</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="780" height="388" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_cash.png?1502917828" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/why-elites-are-winning-war-cash#comments Australia Bulgaria Business Cash Cashless society CDS Credit cards Debit cards Digital currency E-commerce Economy Embedded systems European Central Bank European Central Bank Finance Germany Greece Hyperinflation India Legal tender Money MP3 Payment systems Precious Metals Purchasing Power Real estate Romania Wed, 16 Aug 2017 23:00:00 +0000 Tyler Durden 601809 at http://www.zerohedge.com "The Best Of Times" - Stocks Surge To 2nd Longest Dip-less Streak In History http://www.zerohedge.com/news/2017-08-16/best-times-stocks-surge-2nd-longest-dip-less-streak-history <p>The S&amp;P 500 has not seen a drawdown of more than 3% since the election last November. <a href="https://pensionpartners.com/the-best-of-times/">As PensionPartners&#39; Charlie Bilello notes</a>, <strong><em>this is the second longest run in history...</em></strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best1.jpg"><img height="481" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best1.jpg" width="500" /></a></p> <p>The Dow has hit 31 all-time highs in 2017 and has done so with no more than a 3% pullback.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best4.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best4_0.png" style="width: 499px; height: 263px;" /></a></p> <p>&nbsp;</p> <p>Additionally, Bilello notes this is the<strong> fourth longest streak in US history without a 5% drop...</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best_0.png" style="width: 500px; height: 237px;" /></a></p> <p>&nbsp;</p> <p><strong>It&rsquo;s been more than a year since the S&amp;P 500 has suffered a 5% pullback...</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best2.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best2.png" style="width: 500px; height: 481px;" /></a></p> <p>&nbsp;</p> <p><em><strong>&quot;The best of times&quot;</strong></em> indeed...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best3.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_best3_0.png" style="width: 500px; height: 165px;" /></a></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="1175" height="619" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_best4.png?1502910914" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/best-times-stocks-surge-2nd-longest-dip-less-streak-history#comments Analysis Business Dow 30 Drawdown Economy Human Interest Pullback S&P 500 S&P 500 Index Standard & Poor's Structure Tensors Wed, 16 Aug 2017 22:35:00 +0000 Tyler Durden 601802 at http://www.zerohedge.com Trump Disbands Advisory Councils As CEOs Flee; Pence Ends Foreign Trip Early http://www.zerohedge.com/news/2017-08-16/trump-reportedly-verge-disbanding-strategic-policy-council <p><strong>Update 3</strong>: <a href="https://www.wsj.com/articles/trump-business-advisory-council-to-disband-1502904005">According to the WSJ</a>, Blackstone's Steve Schwarzman called Trump to tell him council was disbanding. Then Trump tweeted he was disbanding it. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>One of the councils had planned to disband after a conference call of its executives on Wednesday morning, a person familiar with the matter said. Mr. Trump’s tweet came after reports that council was disbanding. Blackstone Group LP Chief Executive Stephen A. Schwarzman, who led the Strategic and Policy Forum, phoned the president on Wednesday to inform him the group was being disbanded, according to people familiar with the call. </p> <p>&nbsp;</p> <p>After the call, which was described as cordial, the president tweeted that it was his decision to disband that council. In that tweet, he also announced he was disbanding the manufacturing-advisory council. A White House spokesman declined to comment.</p> </blockquote> <p>* * * </p> <p><strong>Update 2</strong>: Following its decision to disband, which took place even as two more CEOs from the mfg council - the chiefs of J&amp;J and United Tech - were announcing their resignations. Trump's now defunct Strategy Council has just issued the following statement:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"As our members have expressed individually over the past several days, <strong>intolerance, racism and violence have absolutely no place in this country</strong> and are an affront to core American values. The President's Strategic and Policy Forum was conceived as a bi-partisan group of business leaders called to serve our country by providing independent feedback and perspectives directly to the President on accelerating economic growth and job creation in the United States.<strong> We believe the debate over Forum participation has become a distraction from our well-intentioned and sincere desire to aid vital policy discussions on how to improve the lives of everyday Americans.</strong> As such, the <strong>President and we are disbanding the Forum. </strong>Job creation and supporting an inclusive pro-growth agenda remain vitally important to the progress of our country. As Americans, we are all united in our desire to see our country succeed."</p> </blockquote> <p>Meanwhile, as noted earlier, VP Pence will end his visit to South America early and fly home on Thursday, after the latest Trump scandal which led to the dissolution of two of his key economic advisory councils following the riots in Charlottesville, Va. </p> <p>As AP reported previously, Pence will cut short his trip to South America, where he joined Chile President Michelle Bachelet for a joint press conference Wednesday on the political unrest in Venezuela.&nbsp; The vice president defended Trump just days ago as Trump drew bipartisan criticism for his remarks following the violent events in Charlottesville, <strong>and may return in order to directly address critics and steady the administration after the dissolution of the American Manufacturing Council and Strategy and Policy Forum. </strong></p> <p>* * * </p> <p><strong>Update 1: </strong>With the CEOs within the various administration councils deciding to leave en masse, President Trump has tweeted over the top to give the appearance that he decided to shut them down:</p> <p>"Rather than putting pressure on the businesspeople of the Manufacturing Council &amp; Strategy &amp; Policy Forum, I am ending both. Thank you all!" Trump wrote in a tweet.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Rather than putting pressure on the businesspeople of the Manufacturing Council &amp; Strategy &amp; Policy Forum, I am ending both. Thank you all!</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/897869174323728385">August 16, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>*&nbsp; *&nbsp; *</p> <p>As we detailed earlier, with CEOs dropping like flies from Trump's manufacturing councel, with 3M and Campbell Soup CEOs announcing they are out, CNBC reports that President Trump's Strategic and Policy Forum has agreed to disband.&nbsp; The business advisory council is, or rather was, made up of top business leaders is separate from Trump's manufacturing council, which several business leaders left this week.</p> <p>The Strategic and Policy Forum, led by Blackstone CEO Steve Schwarzman, featured, among others:</p> <ul> <li>JPMorgan Chase's Jamie Dimon</li> <li>BlackRock's Larry Fink</li> <li>Wal-Mart's Doug McMillon</li> <li>IBM's Ginni Rometty</li> </ul> <p>"The thinking was it was important to do as a group," a member told CNBC. "As a panel, not as individuals because it would have more significant impact. It makes a central point that it's not going to go forward. It's done."</p> <p>Bloomberg confirms that Trump’s council of senior business leaders who advise on strategy and policy is disbanding, according to a person familiar with the matter.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The executive council, which is led by Blackstone Group LP’s&nbsp;Stephen Schwarzman, planned to inform the White House Wednesday before making the announcement public,</strong> according to the person, who wasn’t authorized to discuss the matter publicly.</p> <p>&nbsp;</p> <p><strong>The strategy group is one of several the White House convened earlier this year to advise the president. </strong></p> <p>&nbsp;</p> <p>Several CEOs from a manufacturing council have&nbsp;quit this week, following blowback over Trump’s remarks about racially charged violence in Virginia on Saturday.</p> </blockquote> <p>This follows the mass exodus of CEOs, most recently 3M and Campbell CEOs. Inge Thulin, the chairman and CEO of 3M , on Wednesday announced his resignation from President Donald Trump's manufacturing council.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"Sustainability, diversity and inclusion are my personal values and also fundamental to the 3M Vision. The past few months have provided me with an opportunity to reflect upon my commitment to these values," he said in a statement. "I joined the Manufacturing Jobs Initiative in January to advocate for policies that align with our values and encourage even stronger investment and job growth - in order to make the United States stronger, healthier and more prosperous for all people. After careful consideration, I believe the initiative is no longer an effective vehicle for 3M to advance these goals. As a result, today I am resigning from the Manufacturing Advisory Council. At 3M, we will continue to champion an environment that supports sustainability, diversity and inclusion. I am committed to building a company that improves lives in every corner of the world."</p> </blockquote> <p>And Campbell Soup Company CEO left shortly after:</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">NEW: Inge Thulin, Pres. and CEO of 3M, resigns from Trump’s manufacturing council: “We will continue to champion...diversity and inclusion.” <a href="https://t.co/914A2G2Z9z">pic.twitter.com/914A2G2Z9z</a></p> <p>— ABC News (@ABC) <a href="https://twitter.com/ABC/status/897857821173264384">August 16, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>They join Merck CEO Kenneth Frazier, Under Armour's Kevin Plank, Intel's Brian Krzanich, Alliance for American Manufacturing president Scott Paul and AFL-CIO president Richard Trumpka in exiting the council, which is headed by Dow Chemical CEO Andrew Liveris. Thea Lee, former deputy chief of staff of the AFL-CIO, said on Twitter she is quitting the council as well.</p> <p>Tesla's Elon Musk and Disney's Bob Iger in June dropped out of a strategic and policy forum to the president following his decision to withdraw the United States from the Paris climate accord. Since-ousted Uber CEO Travis Kalanick quit the council in February over employee backlash.</p> <p>As a reminder, President Trump tweeted yesterday:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"For every CEO that drops out of the Manufacturing Council, I have many to take their place. Grandstanders should not have gone on. JOBS!"</p> </blockquote> <p>That remains to be seen, meanwhile VP Pence just made statement confirming he will be <strong>returning early </strong>from his LatAm trip:</p> <ul> <li>PENCE: WILL END TRIP A BIT EARLY AFTER PANAMA VISIT</li> <li>PENCE SAYS HE'S RETURNING TO U.S. TOMORROW FROM LATIN AMERICA</li> </ul> <p>...</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="237" height="145" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_trump1.png?1502902502" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/trump-reportedly-verge-disbanding-strategic-policy-council#comments AFL-CIO American Federation of Labor - Congress of Industrial Organizations American Manufacturing Council American people of German descent Andrew N. Liveris Brian Krzanich Business Business Climate change skepticism and denial CNBC Councils Donald Trump Donald Trump presidential campaign Economy Economy of the United States Elon Musk Finance LatAm Latin America Manufacturing Advisory Council Mike Pence Money Politics Politics of the United States Presidency of Donald Trump Stephen A. Schwarzman Strategic and Policy Forum Strategy Council The Apprentice Travis Kalanick Trump's Strategy Council Trump’s council Twitter Twitter United States White House White House WWE Hall of Fame Wed, 16 Aug 2017 22:25:20 +0000 Tyler Durden 601789 at http://www.zerohedge.com Jim Quinn Rages At "Functional Illiterates Trying To Erase History" http://www.zerohedge.com/news/2017-08-16/jim-quinn-rages-functional-illiterates-trying-erase-history <p><a href="https://www.theburningplatform.com/2017/08/15/functional-illiterates-trying-to-erase-history/"><em>Authored by Jim Quinn via The Burning Platform blog,</em></a></p> <p style="padding-left: 30px;"><em>&ldquo;True patriotism sometimes requires of men to act exactly contrary, at one period, to that which it does at another, and the motive which impels them the desire to do right is precisely the same.&rdquo;</em> ?<a href="https://www.amazon.com/Lee-Douglas-Southall-Freeman/dp/0684829533/ref=as_sl_pc_tf_til?tag=thebur01-20&amp;linkCode=w00&amp;linkId=f3404eef5c35137865e0e8fa8af9cdcc&amp;creativeASIN=0684829533"><strong> Robert E. Lee</strong></a></p> <p><img alt="Image result for toppled statue durham nc" class="irc_mi aligncenter" src="https://media2.s-nbcnews.com/j/msnbc/components/video/201708/f_la_statue_topple_170814.nbcnews-ux-1080-600.jpg" style="width: 500px; height: 281px;" /></p> <p><strong>I consider myself a student of history.</strong> I&rsquo;ve always been fascinated by the personalities who drove events throughout history. I probably would have been a history major in college if I didn&rsquo;t feel the need to make enough money to support myself and my family. I chose a business major and decided studying history would be my hobby. Over the years I&rsquo;ve taken a particular interest in the Civil War.<strong> You could even call me a Civil War buff.</strong></p> <p>I&rsquo;ve probably read 60 books on the Civil War, from <strong><a href="https://www.amazon.com/Civil-War-American-Heritage-Books/dp/0618001875/ref=as_sl_pc_tf_til?tag=thebur01-20&amp;linkCode=w00&amp;linkId=15db44dd00e946b2b11794d852b70b62&amp;creativeASIN=0618001875">Bruce Catton</a></strong>, <a href="https://www.amazon.com/Civil-War-Volumes-1-3-Box/dp/0394749138/ref=as_sl_pc_tf_til?tag=thebur01-20&amp;linkCode=w00&amp;linkId=aec70dcd483353c7aea011ddc2b3c3e5&amp;creativeASIN=0394749138"><strong>Shelby Foote</strong></a> and numerous other historians. I&rsquo;ve visited the Gettysburg battlefield a half dozen times, as it is only 150 miles from my home. My basement office is decorated with six prints depicting various scenes from the Civil War. One depicts Robert E. Lee and Stonewall Jackson at Fredericksburg, another depicts Jackson leading his troops through Richmond, another depicts Grant taking command of Union forces, another shows Chamberlain leading the charge down Little Round Top, another portrays Lee and Longstreet making the fateful decision to send Pickett&rsquo;s men on their futile charge into history, and the last showing the slaughter during Pickett&rsquo;s charge.</p> <p>I&rsquo;ve even taken an executive education course in leadership where the final day is a trip to Gettysburg where a park ranger guides you through the three day battle and the professor asks you to assess the leadership shown by officers on both sides during that tide turning battle.<strong> My fascination with the Civil War isn&rsquo;t based on rooting for one side or the other. I wanted to understand the motivations of the main characters and understand why and how they fought that bloody war. </strong>There were so many fateful decisions, errors of judgement, acts of courage, acts of cowardice, brilliantly bold maneuvers, and just plain good and bad luck.</p> <p>Robert E. Lee, before the outbreak of the war, was overwhelmingly regarded as the finest military mind in the U.S. army. Winfield Scott offered him command of all Union forces at the outbreak of hostilities. But he chose allegiance to his state of Virginia, rather than the Federal government. He didn&rsquo;t fight for slavery. He freed his slaves. He was fighting for states&rsquo; rights. He was an honorable God fearing noble man. Stonewall Jackson was an extremely religious man who waged war with a passion, but also taught Sunday School to slaves. Lee and Jackson must be viewed in the context of the 19th century rather than being judged by the standards of the 21st century.</p> <p><strong>The vast majority of Confederate soldiers who did the fighting and dying during that war didn&rsquo;t own slaves. They weren&rsquo;t fighting to maintain slavery. They were fighting because a foreign army had invaded their land.</strong> In 1860 this nation was more an amalgamation of states than a centralized government. States still had a tremendous amount of power and leeway to run their states the way they chose. The ever increasing power of a central authority occurred during and after the Civil War. The South were not the bad guys. Their leaders, generals and soldiers were not evil. They were Americans.</p> <p><strong>The revisionist history now being peddled by the left wing media and their non-thinking acolytes lacks a factual basis, historical context and a true understanding of history. </strong>The Civil War was the climax of decades of tension between the North and the South over states&rsquo; rights, economic policies, slavery, and a myriad of other complex issues. Examined within the context of generational theory, it was a Fourth Turning that was unavoidable. It was a crucial important event in U.S. history. It wasn&rsquo;t the shameful episode portrayed by the brain dead faux journalists babbling on CNN and MSNBC.</p> <p><strong>Illegally pulling down statues of Confederate soldiers and taking videos of &ldquo;brave&rdquo; unemployed liberal arts major social justice warriors kicking the Confederate soldier is what passes for activism in today&rsquo;s warped society. </strong>Liberal mayors and city councils across the south are falling all over themselves wasting time and taxpayer money to remove statues of Confederate generals to appease the left and make a display of how anti-racist they can be. Meanwhile, their cities are bankrupt, their infrastructure is decaying, black crime is rampant and their education systems matriculate functionally illiterate deranged snowflakes into society.</p> <p><img alt="Image result for toppled statue durham nc" class="irc_mi alignleft" src="http://assets.nydailynews.com/polopoly_fs/1.3412887.1502792648%21/img/httpImage/image.jpg_gen/derivatives/article_750/aptopix-confederate-monument-protest.jpg" style="width: 249px; height: 187px;" /> <span class="Image_caption_KoNH1"><img alt="Image result for toppled statue durham nc" class="irc_mi" src="https://static6.businessinsider.com/image/59923d06f1a850a81a8b4bfe-1335/screen%20shot%202017-08-14%20at%2081409%20pm.png" style="width: 249px; height: 187px;" /></span></p> <p>These courageous left wing politicians, like the mayor of New Orleans, have statues removed in the middle of the night to avoid protests by those who understand you cannot erase history by removing statues and names. In a hysterical development, Baltimore Mayor Catherine Pugh on Monday said in a statement she intended to move forward in removing several city statutes, including those of Lee and Stonewall Jackson. I suppose the soaring murder rate, blacks rioting and burning down neighborhoods, crumbling infrastructure, failing schools, and white flight is due to a few Confederate statues. It&rsquo;s good to see this diverse mayor has her priorities in order.</p> <p><strong>The ignorance and disregard for history knows no bounds for generations taught to feel rather think in our government run indoctrination centers known as public schools. The left wing media reinforces their ignorance with misinformation, fake news and government sanctioned propaganda. Snowflakes across the land melt at anything they are instructed to find offensive. Everything and everyone who doesn&rsquo;t agree with their half baked views are declared racists.</strong></p> <p>Pointing out that leftist antifa thugs, without permits to protest, initiated the violence in Charlottesville is racist. The uproar against Trump&rsquo;s truthful assessment of the situation by CNN, MSNBC and Fox proves there isn&rsquo;t a wit of difference among these corporate media outlets. True colors are revealed. The ongoing coup attempt against Trump continues unabated.</p> <p>Trump&rsquo;s impromptu press conference and his push back of this false narrative was a thing of beauty. The hypocrisy of the left and their utter contempt for facts must be thrown back in their faces at every opportunity. Across the country, 718 Confederate monuments and statues remain, with nearly 300 of them in Georgia, Virginia or North Carolina. There are also 109 public schools named for Robert E. Lee, Confederate President Jefferson Davis or other icons of the Civil War-era South. Will the left be satisfied when all 718 monuments are destroyed and all 109 schools are renamed Oprah Winfrey Middle School? No. They will find something else to be offended about, and violently attack again.</p> <p><em><strong>The funniest part about watching these social justice warriors wail and gnash their teeth about the racism of these monuments is knowing these unemployed functional illiterates couldn&rsquo;t tell you when the Civil War occurred, name two major battles, name five generals, provide a death count within 250,000, or fill in the blank in the phrase Surrender at __________. They don&rsquo;t know jack shit about history, the Civil War, Lincoln&rsquo;s true feelings about blacks, or the fact the Democratic Party is the party which suppressed blacks for one hundred years following the Civil War. Only truly ignorant snowflakes think they can erase history by protesting it and trying to destroy monuments to those who fought and died for a cause they believed in.</strong></em></p> <p>Do these left wing zealots have any sense of awareness? Maybe they were too busy studying for their gender studies finals to see the reports of the Taliban destroying ancient Buddhist monuments in territory they had captured. Zealots, terrorists, and extremists attempt to destroy symbols that offend them as a way to prove their strength and power. In reality, they destroy what others have built in a feckless effort to boost their self-esteem. Intellectual lightweights attempt to bring others down because they realize their lack of intelligence and inability to get ahead in life has to be blamed on someone else.</p> <p><img alt="Image result for taliban blowing up buddhist statues" class="irc_mi aligncenter" src="http://15858-presscdn-0-65.pagely.netdna-cdn.com/wp-content/uploads/2017/03/Bamiyan-Buddhas-before-and-after.jpeg" style="width: 500px; height: 281px;" /></p> <div>If these social justice warrior weaklings were transported back in time 154 years to the Gettysburg battlefield where real men displayed real courage and bravery, they would be covered in their own urine cowering behind a tree as Pickett&rsquo;s charge commenced. Could you imagine any of the Soros paid professional antifa protestors charging across an open field towards certain death? Those pussies would be high tailing it south as fast as their fashion designer sneakers would take them.</div> <p><img class="aligncenter" src="http://thelibertarianrepublic.com/wp-content/uploads/2016/03/20151114_crybully-1024x746.jpg" style="width: 500px; height: 364px;" /></p> <p><strong>Trump was absolutely correct in asking, &ldquo;Where does it end?&rdquo; Washington owned slaves. Do we get rid of all dollar bills and quarters? Do we change the name of our capital? Do we change the name of Washington &amp; Lee University to Obama &amp; Spike Lee University? Do we blow up the Washington Memorial? Jefferson owned slaves. Do we get rid of nickles? How about the Jefferson Memorial?</strong></p> <p>Why stop only in our country? <strong>The Egyptian pyramids were built by slaves. Should we tear those down?</strong> If these are symbols of hatred and racism that must be destroyed, why do we never hear calls from the left for the destruction of the Nazi death camps. Talk about symbols of hate. Why would we want to remember the holocaust? It couldn&rsquo;t be that it doesn&rsquo;t fit the left&rsquo;s narrative.</p> <p>This Confederate monument narrative is <strong>designed by the left to provoke a backlash from whites</strong> who are tired of being scorned, ridiculed, belittled and called racists, rednecks and deplorables by so called open minded progressives. It&rsquo;s working. <strong>The cold race war is beginning to turn hot.</strong> The president has no intention of trying to bring the two sides together because it&rsquo;s impossible at this point. <strong>That&rsquo;s how Fourth Turnings roll. </strong>The mood of the country will continue to darken. Reactions to these types of events will intensify. More blood will be shed. It&rsquo;s too bad these functional illiterates didn&rsquo;t pay attention in history class or ever read a book. They are going to learn some harsh lessons over the next decade.</p> <p><img class="aligncenter" src="http://lancemannion.typepad.com/.a/6a00d83451be5969e20120a6b8db00970b-pi" style="width: 501px; height: 267px;" /></p> <p style="padding-left: 30px;"><em>&ldquo;We&rsquo;re doomed to repeat the past no matter what. That&rsquo;s what it is to be alive. It&rsquo;s pretty dense kids who haven&rsquo;t figured that out by the time they&rsquo;re ten.&rdquo;</em> ? <a href="https://www.amazon.com/Bluebeard-Novel-Fiction-Kurt-Vonnegut/dp/038533351X/ref=as_sl_pc_tf_til?tag=thebur01-20&amp;linkCode=w00&amp;linkId=ec8be9fff158d515b9b36df6b715df4d&amp;creativeASIN=038533351X"><strong>Kurt Vonnegut Jr.</strong></a></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="506" height="273" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_quinn.png?1502916382" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/jim-quinn-rages-functional-illiterates-trying-erase-history#comments American Civil War Battle of Gettysburg Carter family of Virginia Confederate States Army Councils Democratic Party federal government Fitzhugh family of Virginia Military Military personnel MSNBC New Orleans Obama & Spike Lee University Oprah Winfrey Middle School Politics Randolph family of Virginia Reality Robert E. Lee Stateless people Stonewall Jackson Taliban United States Army War Washington & Lee University Wed, 16 Aug 2017 22:10:00 +0000 Tyler Durden 601806 at http://www.zerohedge.com FBI Investigator Who Led Hillary Email Case Suddenly Resigns From Mueller's Team http://www.zerohedge.com/news/2017-08-16/high-ranking-fbi-official-who-led-hillary-email-case-suddenly-quits-special-counsel- <p>After being appointed to Special Counsel Mueller's team just over a month ago, <a href="http://abcnews.go.com/Politics/special-counsels-russia-probe-loses-top-fbi-investigator/story?id=49249486">ABC</a> is now reporting that <strong>Peter Strzok, the FBI agent who oversaw the botched investigation of Hillary Clinton's email case, has now decided to step down.</strong>&nbsp; ABC reports that their anonymous sources have yet to discover the reasons for Strzok's sudden departure.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>One of the FBI's top investigators,</strong> tapped by special counsel Robert Mueller just weeks ago to help lead the probe of Russian meddling in last year's presidential election, <strong>has left Mueller’s team</strong>, sources tell ABC News.</p> <p>&nbsp;</p> <p>The recent departure of FBI veteran Peter Strzok is the first known hitch in a secretive probe that by all public accounts is charging full-steam ahead.</p> <p>&nbsp;</p> <p><strong>It's unclear why Strzok stepped away from Mueller's team of nearly two dozen lawyers, investigators and administrative staff. </strong>Strzok, who has spent much of his law enforcement career working counterintelligence cases and has been unanimously praised by government officials who spoke with ABC News, is now working for the FBI's human resources division.</p> </blockquote> <p><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/08/16/Mueller_0.JPG" alt="Mueller" width="600" height="346" /></p> <p>&nbsp;</p> <p>As <a href="http://dailycaller.com/2017/07/13/report-mueller-taps-fbi-official-who-led-clinton-email-probe-to-manage-trump-russia-team/">The Daily Caller</a> noted when Strzok was hired by Mueller last month, <strong>he is the same FBI agent who had the distinguished honor of interviewing Hillary Clinton just 3 days before she was cleared of all charges by former FBI Director James Comey.</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Special counsel Robert Mueller has picked the FBI official who oversaw the Hillary Clinton email investigation to manage the investigation into any illegal connections between the Trump campaign and Russian government.</p> <p>&nbsp;</p> <p><strong>Strzok was one of two U.S. officials who interviewed Clinton on July 2 as part of the federal investigation into classified information found on her private email server.</strong></p> <p>&nbsp;</p> <p>Strzok interviewed Clinton along with Justice Department official David Laufman.</p> <p>&nbsp;</p> <p><strong>Three days later, then-FBI Director James Comey announced that charges would not be filed against Clinton</strong> for mishandling classified information found on her server.</p> </blockquote> <p>Perhaps Mueller decided that one massively botched investigation was enough for Strzok?</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="699" height="403" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/Mueller_1.JPG?1502909913" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/high-ranking-fbi-official-who-led-hillary-email-case-suddenly-quits-special-counsel-#comments ABC News Department of Justice Director of the Federal Bureau of Investigation Dismissal of James Comey Donald Trump FBI Federal Bureau of Investigation Federal Bureau of Investigation Hillary Clinton Hillary Clinton email controversy James Comey Politics Robert Mueller Russian government Russian interference in the 2016 United States elections Special Counsel investigation Special prosecutor United States Wed, 16 Aug 2017 21:45:00 +0000 Tyler Durden 601801 at http://www.zerohedge.com Two Stunning Facts About Last Week's VIX Explosion http://www.zerohedge.com/news/2017-08-16/two-stunning-facts-about-last-weeks-vix-explosion <p>Last Thursday morning, just as the VIX was soaring on North Korea nuclear war fears in a historic move from single digits to ultimately peak just above 17 before retracing virtually all of the move in the coming days, we reminded readers that "<a href="http://www.zerohedge.com/news/2017-08-10/vix-explodes-painful-warning-vega-vix-etfs-has-never-been-higher">As VIX Explodes, A Painful Warning: The Vega Of VIX ETFs Has Never Been Higher</a>", referring to a recent observation by JPMorgan that the outstanding vega of VIX related ETF was a record high.</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/07/20/vega%20etf_0.jpg" width="500" height="381" /></p> <p>This is how JPM described this observation previously: "in Figure 4 which is provided by our Equity Derivatives Strategy team and which uses a more sophisticated calculation to estimate the net vega, <strong>i.e. sensitivity to each percentage point change in vol, for the total universe of VIX related ETFs adjusted by their short interest. This vega stands at historical high levels currently.</strong>" In plain English, what this means is that if VIX spiked, the volume of VIX-related shorts that would have to cover would be practically unmatched, resulting in a feedback loop where the higher VIX spiked, the more shorts would have to cover, and so on. </p> <p>Now, thanks to Bank of America we have confirmation that this is precisely what happened. </p> <p>This is what the bank's derivatives expert, Benjamin Bowler, writes in an overnight report: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>... <span style="text-decoration: underline;">the volume in VIX-linked products reached an all-time high on 10-Aug and only modestly declined on the following day</span>. Volume in VIX call and put options (not delta-adjusted) reached a $250M vega. VIX futures also had a record volume day with $850M vega traded in the market with the vast majority of this volume in the front and second month futures. Similarly, volume in long unlevered, long levered, and inverse VIX ETPs reached an alltime high of $830M vega traded, roughly triple the prior month average</strong>.</p> </blockquote> <p>The chart below shows just how insane the record volume of VIX-related volume, through options, futures and ETFs, was in context - <strong>no other day has even come close.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%20vega.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/bofa%20vol%20vega_0.jpg" width="500" height="453" /></a></p> <p>Yet while the explosion higher was more or less expected, if perhaps not by millions of vol-sellers many of whom were stopped and/or margined out with major losses, and the associated volume burst was previewed <a href="http://www.zerohedge.com/news/2017-08-10/vix-explodes-painful-warning-vega-vix-etfs-has-never-been-higher">both here </a>and on other financial outlets, perhaps just as remarkable is what happened next.</p> <p>As Bowler writes, <strong>"both the spike in vol and the speed of its retracement were almost unmatched.</strong>"&nbsp; First, here is the blow by blow of what happened on the way down:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p> The VIX spiked 44% on Thursday, August 10th amid escalating tension between the US and North Korea. While on an absolute-basis this was the 8th largest 1-day spike, on a VIX-level adjusted basis (as measured by the 30-day trailing average of the VIX level), <strong>the move was the second largest of all time as the extreme calm of late abruptly came to an end (Chart 20). Thursday’s surge was surpassed only by the move on 27-Feb-2007, when market calm suddenly evaporated amid investor concern that a slowdown in China was signaling a larger downturn in global growth. </strong>Stocks tumbled, and the S&amp;P lost 3.5% that day. Notably, there has been a higher frequency of such spikes during the last 3-year period. This underscores a reason why vol-of-vol (VVIX) continues to reach historic new highs versus vol. </p> </blockquote> <p>Some more details on the actual underlying mechanics of the intraday move: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>VIX inverse ETP positions decrease; technical flow into the close pushes vol up</strong>: Positioning in long VIX ETPs remained largely unchanged last week at $200M long vega, <strong>while positioning in inverse VIX products decreased by over 30% down to $80M. </strong>The mechanical buying of VIX futures extended between the cash close at 16:00 EST and the futures close at 16:15 EST. To illustrate this technical flow one can look at the long VIX ETN, VXX. <strong>The index underlying VXX closed 15 minutes later than the ETN and recorded a 19.1% daily return</strong>, significantly more than VXX itself. As can be seen on Chart 19, large and positive return differentials tend to auto-correct in most cases during the following trading session. </p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/VIX%20intra%20bofa.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/VIX%20intra%20bofa_0.jpg" width="500" height="221" /></a></p> </blockquote> <p>What was just as remarkable, of course, is that as the VIX spiked by a gargantuan amount, the S&amp;P appeared almost not to notice, dropping just modestly over 1% from levels near all time highs: almost as if nobody even bothered to actually sell the underlying securities that set volatility, or in other words, "almost as if" this is a market in which the only securities traded are derivatives, with little regard for the actual stocks.</p> <p>Finally, what happened on Monday as visions of mushroom clouds rapidly receded after various US officials said "nuclear war was not imminent" was just as remarkable: "The spike in vol was <strong>followed by a near-record fast retracement as the VIX moved lower on Monday, and closed at 12.33 </strong>(Chart 21). The move in VIX was paralleled by the entire VIX term structure, which inverted on 10-Aug and switched&nbsp; back to being upward sloping by 14-Aug." In other words, <strong>just as the spike in vol was unprecedented, so the retracement was almost unmatched.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/VIX%20move%20speed.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/08/12/VIX%20move%20speed_0.jpg" width="500" height="196" /></a></p> <p>In other words, just hours after countless vol shorters were stopped out and left to nurse major losses as a culmination to one of the best runs in inverse VIX and short vol derivatives, a whole new army of robo-traders, algos and the occasional human, took their place and sent the VIX crashing back to near record low in one of the shortest timeframes on record. </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="608" height="396" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/vix%20volume%20teaser.jpg?1502918376" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/two-stunning-facts-about-last-weeks-vix-explosion#comments Bank of America Bank of America China Economy Finance Futures contract Mathematical finance Money North Korea S&P S&P/ASX 200 VIX Short Interest Technical analysis VIX Volatility Volatility Wed, 16 Aug 2017 21:19:39 +0000 Tyler Durden 601810 at http://www.zerohedge.com Watch Live: White House Holds On-Camera Briefing http://www.zerohedge.com/news/2017-08-16/watch-live-white-house-holds-camera-briefing <p>In what looks like a <strong>routine briefing, </strong>Secretary of Veterans Affairs David Shulkin is due to discuss the Veterans Educational Assistance Act in a press conference beginning at 5 p.m. ET.</p> <p>However, in light of the fact that it&#39;s been a rough day for the Trump administration, <strong>reporters are probably brimming with questions about the ongoing controversy</strong> about Trump&#39;s response to the violence in Charlottesville Va. this weekend.</p> <p>After a series of defections that began Monday with Merck CEO Kenneth Frazier, Trump announced Wednesday that he&#39;s disbanding the President&#39;s Manufacturing Council and Strategy &amp; Policy Forum as virtue-signaling revolt from the nations&#39; CEOs continues to escalate.</p> <p>The briefing is due to begin at 5pmET...</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/ICm_1pizHLs" width="560"></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="1049" height="495" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_wh.png?1502915736" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/watch-live-white-house-holds-camera-briefing#comments Business David Shulkin Donald Trump Health Manufacturing Council Politics Presidency of Donald Trump Trump Administration United States White House Wed, 16 Aug 2017 20:55:00 +0000 Tyler Durden 601805 at http://www.zerohedge.com