Pence Blasts NYTimes For “Absurd Fake News” Suggesting He’ll Run In 2020

Last night, the New York Times ran an article (see: Republican Shadow Campaign for 2020 Takes Shape as Trump Doubts Grow) suggesting, among other things, that Mike Pence was quietly preparing for a Presidential run in 2020 on the chance that Mueller, the mainstream media and the intelligence community is ultimately successful in taking down Trump.  They even suggested that members of Pence’s team have openly admitted as much to potential donors at fundraising events.  Here are a couple of the key excerpts:

Senators Tom Cotton and Ben Sasse have already been to Iowa this year, Gov. John Kasich is eyeing a return visit to New Hampshire, and Mike Pence’s schedule is so full of political events that Republicans joke that he is acting more like a second-term vice president hoping to clear the field than a No. 2 sworn in a little over six months ago.

 

Mr. Pence has been the pacesetter. Though it is customary for vice presidents to keep a full political calendar, he has gone a step further, creating an independent power base, cementing his status as Mr. Trump’s heir apparent and promoting himself as the main conduit between the Republican donor class and the administration.

 

The vice president created his own political fund-raising committee, Great America Committee, shrugging off warnings from some high-profile Republicans that it would create speculation about his intentions. The group, set up with help from Jack Oliver, a former fund-raiser for George W. Bush, has overshadowed Mr. Trump’s own primary outside political group, America First Action, even raising more in disclosed donations.

 

Mr. Pence’s aides, however, have been less restrained in private, according to two people briefed on the conversations. In a June meeting with Al Hubbard, an Indiana Republican who was a top economic official in Mr. Bush’s White House, an aide to the vice president, Marty Obst, said that they wanted to be prepared to run in case there was an opening in 2020 and that Mr. Pence would need Mr. Hubbard’s help, according to a Republican briefed on the meeting. Reached on the phone, Mr. Hubbard declined to comment.

 

Mr. Ayers has signaled to multiple major Republican donors that Mr. Pence wants to be ready.

This morning, Mike Pence has issued the following official statement blasting the New York Times article as just more “fake news” while saying that any suggestion he may be looking to undermine Trump’s presidency was simply “laughable and absurd.”

“Today’s article in the New York Times is disgraceful and offensive to me, my family and our entire team.  The allegations in this article are catergorically false and represent just the latest attempt by the media to divide this Administration.”

 

“Thanks to the President’s leadership, we are rebuilding the military, ISIS is on the run, and we’ve seen more than 1 million jobs created while the stock market hits all time highs.”

 

“The American people know that I could not be more honored to be working side by side with a president who is making America great again.”

 

“Whatever fake news may come our way, my entire team will continue to focus all our efforts to advance the President’s agenda and see him re-elected in 2020.  Any suggestion otherwise is both laughable and absurd.”

My statement regarding the absurd @NYtimes article. pic.twitter.com/htvYSbS2dy

— Vice President Pence (@VP) August 6, 2017

 

Not surprisingly, reporters have already taken Pence’s statement as a sign of further discord in the White House and evidence of a growing divide between Trump and Pence…

By transmitting this thru official White House channels, Team Pence sends the message Trump wasn’t thrilled reading the Times today > pic.twitter.com/ksRVSzTbI4

— Gabriel Debenedetti (@gdebenedetti) August 6, 2017

 

…of course, if we were the cynical types, we might suggest that was the goal of the article all along.

The post Pence Blasts NYTimes For “Absurd Fake News” Suggesting He’ll Run In 2020 appeared first on crude-oil.news.

We Are All Going To Die!

We Are All Going To Die!

By

Cognitive Dissonance

 

 

This one is short and sweet folks. The subject alone could fill several books, so I decided to keep it contained to just a few……OK, five pages. With that in mind, I present the basic outline and ask you to let your imagination be your guide. One word of advice; if you find yourself triggered and defending not discussing or thinking about this subject (or screaming at me that you do) you just might be suffering from Stockholm Syndrome.

 

I have a motto, a proverb if you will, that neatly encapsulates the root and process of our insanity. It goes something like this…

“We are only as sick as our deepest darkest secrets.”

Those things we do not talk about, especially to ourselves (or if we do, in only the most superficial manner) point directly and inevitably to the root of our insanity.

And I use the word “talk” in its broadest possible sense and meaning because “We the Americans” can incessantly ‘talk’ about something and still never say a word about the actual subject matter.

A perfect example would be our utter obsession with all things ‘sex’, a subject we rarely speak about directly. Our movies and various other media, our clothing, mannerisms, consumer products, nearly everything screams ‘sex’ in one form or another. Yet we use veiled terms such as ‘sleeping with him/her’ to convey the desire for, or the completed act of, copulation. I may be wrong, but sleeping is usually the last thing that’s actually going on.

There must be at least a hundred words we use to not directly discuss sex and our obsessed desire to engage in the act itself. It has been conservatively estimated that up to 40% of all internet activity is directly related to the trafficking of pornography. Yet we rarely talk about it in public or private.

The marketing of Viagra, Cialis and Levitra for “erectile dysfunction” is a case study in not talking directly about something, yet still speaking volumes on the subject. While most certainly the drugs have a medical use, the purpose of the advertising is to encourage the ‘patient’ to seek treatment to obtain the drug for ‘recreational’ use. 

I would call us humans silly if our behavior wasn’t so dangerously neurotic.

The same can be said about death and dying. If there is one thing we know with absolute certainty, it is that at some point we are all going to die. While the where and when may always be in question, there is no ‘if’ about actually dying.

And yet we are obsessed with death and dying, even though we cannot individually and collectively discuss the subject in depth and detail. I worked at Prudential for over eight years in the 90’s and the principal product I sold was life insurance. It would have been easier to sell refrigerators to an Eskimo than to sell the one product everyone is absolutely positively guaranteed to use.

Or at least our beneficiary will use it.

I was actually pretty good at my job, but only because I brushed past most of the discomfort exhibited by the client and talked about death in the same way I would talk about night and day, as a commonly understood fact and not a whispered-among-conspirators possibility.

This is not to say I was rude or blunt. Rather I was sensitive to their discomfort while displaying no awkwardness of my own. The psychology behind this technique is called ‘mirroring’, where the person you are talking to will eventually reflect back or mirror your own mannerisms and attitude.

Don’t believe me? While directly facing someone during a one on one conversation, cross your arms across your chest and keep them there. Then watch what happens.

Never once in those eight years did I come across a single person who didn’t demonstrate some degree of neurotic behavior about death and dying. Often it was hidden beneath anger, indifference, suspicion, embarrassment, discomfort, subject change, outright avoidance, the use of ‘code’ word non-descriptive terminology and so on.

We are so frightened of death we insist on spending ‘whatever it takes’ to get healthy once sick, while spending little to nothing to avoid becoming sick in the first place. The ‘medical’ procedures and pharmaceutical poisons we inflict upon ourselves, particularly when older, would be considered (elder) abuse, even torture, if it wasn’t culturally accepted, thus considered normal and natural.

All this self inflicted pain and suffering just to possibly squeeze out a few additional moments of ‘life’, always assuming quality of life means very little and duration is the only thing that counts. What do you mean you don’t wish to participate in the cut, burn and poison procedures I’ve recommended? Don’t you want to live? Are you nuts?

 

RIP

For a death culture that doesn’t want to discuss our own inevitable death, we seem to be obsessed with creating a lot of it in others.

 

We are deeply immersed in what can only be accurately described as a ‘death’ culture. Our children are purportedly witness to 10,000 ‘simulated’ murders or deaths via various media before the age of 18. The military, a sophisticated killing machine, is culturally glorified as ‘moral and just’ (as long as they kill by the rules) or just doing their job (civilian leadership calls the shots) while the wounded soldiers who did the actual dirty work (that means killing and maiming) are eventually discarded like moldy mystery meat found in the back of the fridge.

Ever listen to a ‘professional’ military strategist speak about killing…oops, I mean ‘tactics’? Considering the words ‘kill’ and ‘death’, among many others, are never used, you’d think they were discussing their next blue chip corporate marketing campaign. In fact, in many ways they are. But what they aren’t discussing, while thoroughly and completely discussing it, is the actual ‘killing’.

Collateral damage’ is the perfect example, a phrase that reduces the ‘accidental’ spilling of blood and guts down to something not much worse than a severely stubbed toe.

“I was chasing my wife around the kitchen table not trying to have sex with her when I suffered collateral damage and stubbed my big toe. It ruined the moment we weren’t having.”

I suppose this is because life is sacred and must not be taken carelessly or cavalierly. Notice that doesn’t preclude taking someone’s life, the primary function of the military, but about giving great thought and deliberation about taking someone’s life; then doing so efficiently and without the loss of your own life in the process. Because your own life is sacred and shall be preserved at all cost. Everyone else?

Umm…not so much.

Our entire system of governance ‘operates’ via carefully veiled physical and psychological coercion. The government representative asks nicely, several times in fact, before calling in the men and women with guns to convince us it’s in our own best interest to do as we are ‘requested’. The state has a monopoly on institutional violence and we are conditioned from birth to applaud and obey.

And make no mistake about it; we are trained from birth to accept the present state of violence as natural and normal, human nature in fact. Nothing we can do to change what we are, so just sit back and enjoy the show. If we won’t personally become sociopaths, at least accept (and obey) the sociopaths in power as just the way things are supposed to be.

Silly rabbit, peace and mutual cooperation are for sissies and gadflies. Real men and women take what they want because they can. Of course, this is human nature because we are all descended from apes and apes are naturally violent.

At least that’s what we are told.

Besides, when “We the Advanced Humans” finally turned to hunting and gathering rather than beating each other over the head like apes, we still had to beat each other over the head like apes in order to protect what we had hunted and gathered. Do you see the madness inducing closed loop feedback system working to perfection here?

A supposedly violent past is used to justify and rationalize a violent present and future. It is inferred we simply cannot, therefore will not, mature because violence is in our genes. The best we can do, we are helpfully informed, is to grin and bear it. And kill…but only if we must.

And we must because ‘they’ made us do it.

The killings will continue until the killings stop. Thank God we have the sovereign state to bring law and order to the art of violence and murder. Let the professionals handle it. They know what they’re doing.

Please note I used the word ‘supposedly’ in a previous paragraph. By now we should all understand ‘history’, particularly ancient history, doesn’t always reflect actual truth, but rather the prevailing and ever changing historical narrative that sets the stage for the present day controlling memes.

Because it’s all part of our overall belief system, we never ever consider how much our belief in a specifically defined, as well as hidden, past affects our view of today and tomorrow. It is nearly impossible to know where you are going without an understanding of where you have been and where you are now. That is how important it is for the controlling meme to manipulate our historical perspective.

Let me state unequivocally that a culture of death will always attempt to convince us via various methods of ‘persuasion’ that a culture of death is perfectly rational and justified in being what it is, a culture of death. How could it be any other way and still exist?

Considering we are in a controlling and abusive relationship with our serial abusers, is it any wonder we are all suffering from Stockholm Syndrome and are therefore unable to sanely confront and contend with our eventual demise? That which we refuse to confront controls us to some extent or another, and usually much more than we care to believe. Those who wish to exploit us only need to manipulate our fear of what controls us.

It’s as easy as taking candy from a baby.

We are all going to die. Get over it. Embrace it as part of the journey. Examine it for all it is and isn’t. And accept it, thereby removing the fear and rendering it impotent. This way we can move on towards a more glorious endeavor, that of fully living life rather than simply waiting ‘round to die.

 

08/06/2017

Cognitive Dissonance

 

For a culture that loves death and destruction, we sure seem to like pretty things a lot.

Does it matter?

The post We Are All Going To Die! appeared first on crude-oil.news.

Rosenstein: “We’re After The Leakers, Not Journalists”

Two days after AG Jeff Sessions and Director of National Intelligence Dan Coats announced a crackdown on Trump administration leakers that could involve subpoenas to journalists, Deputy AG Rod Rosenstein took to the Sunday talk shows to emphasize that the DOJ isn’t targeting journalists after all. Despite Sessions’ emphasis that the DOJ respects the privileges of the press – but that those privileges don’t extend to publishing classified information that puts lives at risk – members of the media understandably expressed outrage at the notion that they be compelled to reveal their sources: after all that’s precisely what the previous administration demanded in its repeated crackdown on the “free press”… at least when it reported on things that Obama did not enjoy seeing in the media.

In an interview on Fox News, Rosenstein said there’s been no change in policy with regard to journalists and their reporting on the Trump administration.

“I think that’s an overreaction the attorney general has been very clear,” Rosenstein said. “We’re after the leakers. We’re not after journalists we’re after people who are committing crimes.”

Taking a page out of Barack Obama’s playbook, Trump recently suggested that reporters who publish classified information should be prosecuted, the interviewer noted. But Rosenstein insisted that the DOJ has no plans to follow through with any prosecutions involving reporters. DOJ is applying the same scrutiny of reporters that former AGs Eric Holder and Loretta Lynch did while they were in office.

However, Rosenstein didn’t entirely rule out a prosecution if one were warranted. Most journalists don’t commit criminal acts during their reporting, Rosenstein said.

Deputy Att’y Gen. Rod Rosenstein on revising Justice Dept. policy on subpoenas.

Doesn’t rule out jail time for reporters.#PressFreedom pic.twitter.com/iYPbwJrFmM

— Ryan Goodman (@rgoodlaw) August 6, 2017

But, “depending on the facts and circumstances,” the possibility that a reporter could cross the line shouldn’t be ruled out.

“We have the same position as Attorney General Holder. We don’t prosecute journalists for doing their jobs we consider the facts and circumstances on each case.”

 

“Generally speaking, reporters who are publishing information are not committing a crime.  But there might be a circumstance where they do. I haven’t seen any of those to date, but I wouldn’t rule it out in the event there were a case. If a reporter is violating the law then they might be a suspect as well.”

In summary, Rosenstein said that journalists will be treated with the same scrutiny as every other American under the law. But leakers, who in some cases are committing felony offenses, will be prosecuted. Ironically, none of this is new, as the soon to be former NYT journalist, James Risen, wrote in December, when he explained that “If Donald Trump targets journalists, thank Obama”:

If Donald J. Trump decides as president to throw a whistle-blower in jail for trying to talk to a reporter, or gets the F.B.I. to spy on a journalist, he will have one man to thank for bequeathing him such expansive power: Barack Obama.

 

Mr. Trump made his animus toward the news media clear during the presidential campaign, often expressing his disgust with coverage through Twitter or in diatribes at rallies. So if his campaign is any guide, Mr. Trump seems likely to enthusiastically embrace the aggressive crackdown on journalists and whistle-blowers that is an important yet little understood component of Mr. Obama’s presidential legacy.

 

Criticism of Mr. Obama’s stance on press freedom, government transparency and secrecy is hotly disputed by the White House, but many journalism groups say the record is clear. Over the past eight years, the administration has prosecuted nine cases involving whistle-blowers and leakers, compared with only three by all previous administrations combined. It has repeatedly used the Espionage Act, a relic of World War I-era red-baiting, not to prosecute spies but to go after government officials who talked to journalists.

 

Under Mr. Obama, the Justice Department and the F.B.I. have spied on reporters by monitoring their phone records, labeled one journalist an unindicted co-conspirator in a criminal case for simply doing reporting and issued subpoenas to other reporters to try to force them to reveal their sources and testify in criminal cases.

 

I experienced this pressure firsthand when the administration tried to compel me to testify to reveal my confidential sources in a criminal leak investigation. The Justice Department finally relented — even though it had already won a seven-year court battle that went all the way to the Supreme Court to force me to testify — most likely because they feared the negative publicity that would come from sending a New York Times reporter to jail.

 

In an interview last May, President Obama pushed back on the criticism that his administration had been engaged in a war on the press. He argued that the number of leak prosecutions his administration had brought had been small and that some of those cases were inherited from the George W. Bush administration.

 

“I am a strong believer in the First Amendment and the need for journalists to pursue every lead and every angle,” Mr. Obama said in an interview with the Rutgers University student newspaper. “I think that when you hear stories about us cracking down on whistle-blowers or whatnot, we’re talking about a really small sample.

 

But critics say the crackdown has had a much greater chilling effect on press freedom than Mr. Obama acknowledges. In a scathing 2013 report for the Committee to Protect Journalists, Leonard Downie, a former executive editor of The Washington Post who now teaches at Arizona State University, said the war on leaks and other efforts to control information was “the most aggressive I’ve seen since the Nixon administration, when I was one of the editors involved in The Washington Post’s investigation of Watergate.”

And so on.

The post Rosenstein: “We’re After The Leakers, Not Journalists” appeared first on crude-oil.news.

Labor Market ‘Breadth’ Nears Record Low

Authored by Teddy Vallee via Pervalle.com,

Tom Keene was out with a chart today referencing Zerohedge’s point that a large percentage of the non-farm payroll growth has been a result of lower paying industries, such as food and drinking places – or as they would put it, more bartenders.

the acclaimed @zerohedge chart on bartenders: pop adjust food&drinking…the NFP growth from the 2007 peak i’ll take the delta on the rocks pic.twitter.com/yL2DAiqfjy

— tom keene (@tomkeene) August 4, 2017

While a job is a job, the composition and strength of gains is quite important, as it gives us an understanding of aggregate health.

If total growth is strong, but is the result of only a few sectors, the breadth of the overall market is weak. This typically provides us with a signal on where the overall market is heading – and this goes both ways.

This brings me to an indicator that I built out over the past year – labor market breadth – which seeks to measure the aggregate health of the labor market by looking at its sub-components. While I don’t break out how it’s calculated, I will say it is comparable to the breadth of the stock market.

Following Friday’s employment report of 209k new jobs, beating estimates of 183k, labor market breadth fell to an un-smoothed cycle low, as shown below. So while the headline number was strong, it’s aggregate sub-components continue to slow, which is not indicative of strength.

We can see this by sharp decreases in total job growth of retail trade, which many will attribute to the rise of Amazon.

And information, which is not affected by the retail giant.

As well as arts, entertainment, and recreation.

And health care, which has slowed materially over the past four months.

There is some strength however in wholesale trade.

And durable goods

But this today was offset by weakness in a previously strong industry – real estate.

And a slowing financial sector.

In total, the current breadth of the labor market is indicating that wages and salaries will move lower over the next 6 months, as shown below.

We’ll see if this manifests or not.

 

The post Labor Market ‘Breadth’ Nears Record Low appeared first on crude-oil.news.

Why Eric Peters Is Starting A Long-Vol Fund: “Imaginations Will Soon Run Rampant With Visions Of Cataclysms”

Is the recent streak of record low volatility about to end?

While countless analysts, pundits and traders have previously talked their book (if not staked their reputation) on claims VIX is set for an imminent mean-reverting spike, so far that has not happened and in fact net spec positioning in the VIX just hit a record short print as of the latest CFTC week.

And yet, on Friday night, in a notable change to the low-vol regime, Interactive Brokers announced it would hike volatility product margins ahead of what it warned could be a 100% surge in the VIX, a move which will be promptly copied by most if not all trading platforms. Will this then become a self-fulfilling prophecy – should maringed out traders decide it makes more sense to close out vol shorts than to add more cash – it is too early to know, however, in a separate confirmation that the current low-vol regime may be ending, last week JPM’s quant strategy team reported that “following robust performance in 1H ‘17, PnL of short vol premia stagnated over the past month… We see further risk for short vol from both rate increase as well as CB balance sheet renormalization.

YTD, short vol PnL (+5.1%) exceeds that of traditional beta (+4.2%) and value (+4.1%). Momentum YTD PnL of -5.2% arose from a broad-based decline across global equity indices (-5.1%), sovereign bonds (-2.1%), currencies (-1.4%) and commodities (-12.0%). Carry was flat (+0.9% YTD) as it was buffeted by positive bond carry (+3.9%) and negative equity index carry (-1.6%). Over the past month, short vol has stagnated at 0.26% and momentum has continued its decline by – 0.71%.

And with no further P&L to be made from selling vole, the question again emerges: is the vol-selling party coming to an end?

To answer that question today in abstract terms, we give the podium to our favorite Sunday morning commentator, One River Asset Management’s CIO Eric Peters, who today in lieu of his traditional weekend notes, has penned a piece titled: “The Case for Long Volatilityin which he explains that a surge in volatility is inevitable for one simple reason: human imaginations will eventually run rampant… which ironically is precisely what Aleksandar Kocic said two months ago, when he predicted that the “Market’s Current “Metastability” Will Lead To “Cataclysmic Events.”

Some of the key excerpts from his note:

To sell implied volatility at current levels, investors must imagine tomorrow will be virtually identical to today. They must imagine that bond yields won’t rise despite every major central bank looking to hike interest rates and exit QE. They must imagine that economies at or near full employment will not create inflation; that GDP will neither accelerate nor decelerate; that governments will tolerate historic levels of income inequality despite citizens voting for the opposite; that strongly rising global debts will be supported by decelerating global growth. And volatility sellers must imagine that nine years into a bull market, amplified by a proliferation of complex volatility-selling strategies and passive ETFs with liquidity mismatches, that we will dodge a destabilizing shock to market infrastructure. I can imagine a few of those things happening, but neither sustainably nor simultaneously. It is much easier to imagine a tomorrow that looks different from today.

 

Zero interest rates and quantitative easing left yield-starved investors with few ways to achieve their target returns. Wall Street’s engineers developed many wonderful solutions to this problem. Their magnificence is matched only by the amount of negative convexity now lurking in investment portfolios.

 

As volatility declined, investors have had to sell even more of it to sustain sufficient profits. This selling reinforces the trend lower, which produces an illusion that legacy volatility shorts are less risky today than yesterday. Lower volatility thus begets lower volatility. And this also ensures that quantitative models reduce overall portfolio risk estimates, which allows (and in many cases forces) investors to buy more assets at prevailing prices. This in turn reduces volatility, reflexively. Naturally, the reverse is also true. Rising volatility begets rising volatility. And given the unprecedented volatility-selling in this cycle, I can imagine a historic reversal.

 

And at that point, investor imaginations will run rampant with visions of cataclysms. It is always thus, it is who we are. Confidence in a tomorrow that is indistinguishable from today will vanish, replaced by some new hysteria. It could be real or imagined. It could even be a bullish blow-off mania like 1999. Or maybe an endogenous crash, like 1987, when market moves were disconnected from the real economy. But the catalyst doesn’t really matter. What matters is recognizing that at this late stage, with implied volatility where it is, and asset valuations where they are, if you can imagine a tomorrow even modestly different from today, you must begin finding thoughtful ways to get long volatility.

Peters has imagined precisely that, and as a result, the CIO writes that he sees a “compelling opportunity developing in the months ahead” to go long volatility, and is launching a fund to capture it.

* * *

His full note below (link):

The Case For Long Volatility

 

I have an active imagination. A blessing and curse. I’m not alone. Of our many defining features, imagination is the greatest single thing separating us from other creatures. There is no higher power. Our ability to conceive of a tomorrow that is better than today is a precondition to discovery, invention. And these two things quite naturally stack, compound. Their summation has lifted us from the Stone Age to the space station. The journey has only just begun. This should be obvious to everyone but the most hopeless pessimist.

 

Along our upward trajectory are periodic interruptions. Some are natural, such as plagues. Others are economic, particularly depressions. But most are political, and the greatest arise when nations imagine future states of the world that are different and incompatible. These ideological conflicts can be devastating, lasting for years as hot or cold wars, but even so, they have barely restrained our rise. The motive force of humanity’s imagination, ambition, and drive to build better lives for our children is such that nothing has suppressed progress for long.

 

Economically speaking, our ascent is defined by rising productivity, the spoils of which determine prosperity. In modern times, we have imagined various ways to distribute this wealth; socialism, communism, free-market capitalism. I can imagine other approaches; the Chinese are exploring one. But even within existing constructs, there are nuances. Today in the West, capital owners collect a disproportionate share of profits relative to laborers. There is no intrinsic reason that this degree of inequality cannot persist. But in modern history it never has.

 

The private sector overwhelmingly sees itself as a more capable steward of research and development capital than governments. However, an examination of innovations traceable to state-funded initiatives during the past century suggests otherwise. I suspect the failure of Soviet communism led western free-market capitalists to imagine every element of our system to be superior. I imagine someday we will regard that black and white conclusion as foolish. China’s unprecedented economic rise and breathtaking technological advances should prompt Western self-reflection. So far it has not. I can imagine this being forced upon us.

 

In fact, I can imagine many things. I can imagine almost everything, except of course, things that never cross my mind. Those are unknown unknowns, Black Swans. In my lifetime, not a single such creature has reversed human progress, let alone markets. Not for long anyway. Lehman was not a Black Swan. I worked there for seven years and we spent most of them imagining the firm abruptly failing. Black Swans are generally magnificent, indistinguishable from magic – the internet, smartphones, cloud computing, quantum entanglement. The big risks are skewed to the upside, and manifest frequently. That is why we no longer live in caves. Yet periodically, our imaginations run wild with visions of cataclysms. I imagine that will never change.

 

In theory, investors compound savings at a rate commensurate with the upward slope of human progress. But people can pay anything they choose for assets and their derivatives. They periodically earn higher returns than that slope would indicate by bidding up prices far in advance of actual growth. However, they cannot do so forever without the gap between today’s reality and tomorrow’s promise becoming a chasm, prone to collapse. That said, almost any price can be justified if the slope of progress steepens, and every so often, something new appears that allows investors to imagine it will. But in modern history it never really has.

 

This leads me to investing. Which is principally about medium to long-term trend following. To obsess over much shorter time horizons is to imagine you can consistently outsmart people who imagine themselves smarter than you. A quick check on the number of billionaires who made their fortunes imagining such nonsense will tell you all you need to know on that topic. Anyhow, trend following is theoretically easy; over the long-term conditions improve. But because we base asset prices partly on their future value, and as every solvent investor imagines that trajectory to be upward, prices are almost always elevated relative to today’s reality – and thus prone to corrections. So trend following is easier said than done, and can be improved upon by periodic tactical adjustments, hedges.

 

With that in mind, it is hard to overstate the extraordinary nature of today’s landscape. All previous periods of extreme asset valuation required investors to imagine a vastly different tomorrow, a wildly optimistic future, a steeper slope. But today they expect the opposite. Due to unfavorable demographics and over-indebtedness, investors expect the slope to flatten, perhaps forever. Yet because of this flattening, they also imagine perpetually low interest rates, which they then use to justify extreme valuations across other asset classes in an endogenous loop that is increasingly disconnected from the real economy. This is the dominant pricing model for global assets today. I can imagine it continuing for a while still, but not in perpetuity.

 

Implied volatility is the price that connects two sets of people; those seeking to offload risks and those prepared to shoulder them. When imaginations are running wild, implied volatility is high, reflecting disagreement and uncertainty about what those risks are, and/or how they will resolve themselves. Low implied volatility reflects just the opposite. We are now at historic lows.

 

To sell implied volatility at current levels, investors must imagine tomorrow will be virtually identical to today. They must imagine that bond yields won’t rise despite every major central bank looking to hike interest rates and exit QE. They must imagine that economies at or near full employment will not create inflation; that GDP will neither accelerate nor decelerate; that governments will tolerate historic levels of income inequality despite citizens voting for the opposite; that strongly rising global debts will be supported by decelerating global growth. And volatility sellers must imagine that nine years into a bull market, amplified by a proliferation of complex volatility-selling strategies and passive ETFs with liquidity mismatches, that we will dodge a destabilizing shock to market infrastructure. I can imagine a few of those things happening, but neither sustainably nor simultaneously. It is much easier to imagine a tomorrow that looks different from today.

 

Investment banks and asset managers devise creative strategies to make money once valuations exceed reasonable levels. These perpetual prosperity machines typically combine leverage and alchemy, transforming real risk into perceived safety. Examples abound. But in this cycle, a proliferation of cleverly disguised volatility-selling strategies has dominated. Zero interest rates and quantitative easing left yield-starved investors with few ways to achieve their target returns. Wall Street’s engineers developed many wonderful solutions to this problem. Their magnificence is matched only by the amount of negative convexity now lurking in investment portfolios.

 

As volatility declined, investors have had to sell even more of it to sustain sufficient profits. This selling reinforces the trend lower, which produces an illusion that legacy volatility shorts are less risky today than yesterday. Lower volatility thus begets lower volatility. And this also ensures that quantitative models reduce overall portfolio risk estimates, which allows (and in many cases forces) investors to buy more assets at prevailing prices. This in turn reduces volatility, reflexively. Naturally, the reverse is also true. Rising volatility begets rising volatility. And given the unprecedented volatility-selling in this cycle, I can imagine a historic reversal.

 

And at that point, investor imaginations will run rampant with visions of cataclysms. It is always thus, it is who we are. Confidence in a tomorrow that is indistinguishable from today will vanish, replaced by some new hysteria. It could be real or imagined. It could even be a bullish blow-off mania like 1999. Or maybe an endogenous crash, like 1987, when market moves were disconnected from the real economy. But the catalyst doesn’t really matter. What matters is recognizing that at this late stage, with implied volatility where it is, and asset valuations where they are, if you can imagine a tomorrow even modestly different from today, you must begin finding thoughtful ways to get long volatility.

And just like that, the “fat tails” funds are back.

The post Why Eric Peters Is Starting A Long-Vol Fund: “Imaginations Will Soon Run Rampant With Visions Of Cataclysms” appeared first on crude-oil.news.

Savage: “There Will Be Civil War In This Country” If Trump Taken Down

Back in June, less that 24 hours before James Hodgkinson decided to open fire on the GOP baseball practice in Alexandria, VA, radio host Michael Savage was commenting on developments that had escalated the anti-Trump “resistance,” such as comedian Kathy Griffin’s ISIS-style photo shoot of the decapitated likeness of Trump and the “Julius Caesar” play in Central Park featuring the assassination of a Trump-like figure, and predicted “there are people out there who are marginal, who are going to go off like a rocket and kill somebody.”  Here’s what he said:

“I don’t know how much more of this the country can take,” Savage said.

 

“We are at a boiling point.” he told his listeners Tuesday.

 

“If they keep this up, I’m telling you there’s going to be an explosion in this country.”

 

“Do you understand that there are people out there who are marginal, who are going to go off like a rocket and kill somebody?” Savage asked.

 

“Do you understand what this left-wing is becoming in this country

Little did he know at the time, within 24 hours his prediction came true as Hodgkinson opened fire on a GOP baseball practice in a mass assassination attempt that nearly claimed the life of Majority Whip Steven Scalise.

Savage

 

But now, as the media continues in its crusade to oust Trump from the White House at all costs, a task in which they’ve seemingly garnered the support of an army of leakers and perhaps even a portion of the U.S. intelligence community, Savage is back with another prediction, namely that the left’s continued struggle with “Trump Derangement Syndrome” is going to result in “mob violence” and ultimately a “civil war” if their calls for Trump’s impeachment are successful. Per WND:

If the left succeeds in its effort to remove President Trump from office or renders him virtually powerless, America’s working class – the “Eddies and Ediths” – will revolt, warned author and nationally syndicated talk-radio host Michael Savage.

 

Referring to a 1939 novel, Savage told his listeners Friday that “The Day of the Locust”  will come and people will “resort to mob violence” when they “are finally aware of the fact that they’ve been tricked by their society, and that no matter how hard they work as middle class people” they are denied.

 

“That is what’s going to happen in this country,” Savage said. “You have not yet seen mob violence in this country. You’ve seen some mob violence instigated by George Soros’ mobs. … But you haven’t seen the thing I’m telling you is coming in this country. You haven’t seen the ‘Day of the Locust’ yet.”

 

“The Day of the Locust” is a 1939 novel by Nathanael West that features an artist from Yale who comes to Hollywood and creates a painting called “The Burning of Los Angeles.” The painting captures the despair of Americans who worked and saved their entire lives but failed to realize the American dream, prompting anger that boils over into destruction and mob rule.

 

Savage said that “when Eddie finally gets up and says that’s the end of the road, and Eddie’s eyes turn red, and blood is in his eyes, Eddie will turn this society upside down.”

 

“And if [the left] take(s) Trump down, through (Special Counsel Robert) Mueller or through any other source and deny Eddie his vote, there will be a civil war in this country,” Savage said.

 

The civil war, he said will “start slowly, but it will be like Fort Sumter, which started with one cannon shot.”

 

“I’m warning you. All of you leftists who think you’re going to steal our vote, you’re wrong,” Savage said.

 

“We’ve had it up to here. We’ve put up with your garbage in the universities. We’ve put up with your filth coming out of your filth factories in Hollywood. We’ve put up with your hatred that comes out of your newspapers. We’ve put up with your filth and your hatred coming out of CNN,” he said.

 

“But if you do the next step and steal our president, I warn you. You’ve seen nothing yet. You will see the ‘Day of the Locust’ in this country.”

Of course, this is a fairly common theme for Savage who, in 2014, penned a book entitled “Stop the Coming Civil War” in which he described the severity of America’s divide…

“Not since the run-up to the Civil War has the nation been more divided,” he says. “The battle lines have been drawn: The haves against the have-nots. The illegal aliens against hard working middle-class families. Liberals who hate the second amendment versus lawful gun owners. Climate activists whose policies cause forest fires and exacerbate drought against those who understand that the effect on human activity is negligible. Anti-Christian Communist educators against God fearing families. Republicrats against Patriots.”

…but, while his worst predictions have yet to come true, with the political divide growing wider in this country with each passing day, we suspect it may only be a matter of time.

The post Savage: “There Will Be Civil War In This Country” If Trump Taken Down appeared first on crude-oil.news.

Amazon isn’t the No. 1 villain in retail sector’s demise

Retail stocks have been annihilated recently, despite the economy eking out growth. The fundamentals of the retail business look horrible: Sales are stagnating and profitability is getting worse with every passing quarter.

Jeff Bezos and Amazon get most of the credit, but this credit is misplaced. Today, online sales represent only 8.5 percent of total retail sales. Amazon, at $80 billion in sales, accounts only for 1.5 percent of total U.S. retail sales, which at the end of 2016 were around $5.5 trillion. Though it is human nature to look for the simplest explanation, in truth, the confluence of a half-dozen unrelated developments is responsible for weak retail sales.

Our consumption needs and preferences have changed significantly. Ten years ago we spent a pittance on cellphones. Today Apple sells roughly $100 billion worth of i-goods in the U.S., and about two-thirds of those sales are iPhones. Apple’s U.S. market share is about 44 percent, thus the total smart mobile phone market in the U.S. is $150 billion a year. Add spending on smartphone accessories (cases, cables, glass protectors, etc.) and we are probably looking at $200 billion total spending a year on smartphones and accessories.

Ten years ago (before the introduction of the iPhone) smartphone sales were close to zero. Nokia was the king of dumb phones, with sales in the U.S. in 2006 of $4 billion. The total dumb cellphone handset market in the U.S. in 2006 was probably closer to $10 billion.

Consumer income has not changed much since 2006, thus over the last 10 years $190 billion in consumer spending was diverted toward mobile phones.

It gets more interesting. In 2006 a cellphone was a luxury only affordable by adults, but today 7-year-olds have iPhones. Our phone bill per household more than doubled over the last decade. Not to bore you with too many data points, but Verizon’s wireless’s revenue in 2006 was $38 billion. Fast-forward 10 years and it is $89 billion — a $51 billion increase. Verizon’s market share is about 30 percent, thus the total spending increase on wireless services is close to $150 billion.

Between phones and their services, this is $340 billion that will not be spent on T-shirts and shoes.

But we are not done. The combination of mid-single-digit health-care inflation and the proliferation of high-deductible plans has increased consumer direct health-care costs and further chipped away at our discretionary dollars. Health-care spending in the U.S. is $3.3 trillion, and just 3 percent of that figure is almost $100 billion.

Then there are soft, hard-to-quantify factors. Millennials and millennial-want-to-be generations (speaking for myself here) don’t really care about clothes as much as we may have 10 years ago. After all, our high-tech billionaires wear hoodies and flip-flops to work. Lack of fashion sense did not hinder their success, so why should the rest of us care about the dress code?

In the ’90s casual Fridays were a big deal – yippee, we could wear jeans to work! Fast-forward 20 years, and every day is casual. Suits? They are worn to job interviews or to impress old-fashioned clients. Consumer habits have slowly changed, and we now put less value on clothes (and thus spend less money on them) and more value on having the latest iThing.

All this brings us to a hard and sad reality: The U.S. is over-retailed. We simply have too many stores. Americans have four or five times more square footage per capita than other developed countries. This bloated square footage was created for a different consumer, the one who in in the ’90s and ’00s was borrowing money against her house and spending it at her local shopping mall.

Today’s post-Great Recession consumer is deleveraging, paying off her debt, spending money on new necessities such as mobile phones, and paying more for the old ones such as health care.

Yes, Amazon and online sales do matter. Ten years ago only 2.5 percent of retail sales took place online, and today that number is 8.5 percent – about a $300 billion change. Some of these online sales were captured by brick-and-mortar online sales, some by e-commerce giants like Amazon, and some by brands selling directly to consumers.

But as you can see, online sales are just one piece of a very complex retail puzzle. All the aforementioned factors combined explain why, when gasoline prices declined by almost 50 percent (gifting consumers hundreds of dollars of discretionary spending a month), retailers’ profitability and consumer spending did not flinch – those savings were more than absorbed by other expenses.

Understanding that online sales (when we say this we really mean Amazon) are not the only culprit responsible for horrible retail numbers is crucial in the analysis of retail stocks. If you are only solving “who can fight back the best against Amazon?” you are only solving for one variable in a multivariable problem: – Consumers’ habits have changed; the U.S. is over-retailed; and consumer spending is being diverted to different parts of the economy.

As value investors we are naturally attracted to hated sectors. However, we demand a much greater margin of safety from retail stocks, because estimating their future cash flows (and thus fair value) is becoming increasingly difficult. Warren Buffett has said that you want to own a business that can be run by an idiot, because one day it will be. A successful retail business in today’s world cannot be run by by an idiot. It requires Bezos-like qualities: being totally consumer-focused, taking risks, thinking long term.

Vitaliy N. Katsenelson, CFA

I am the CIO at Investment Management Associates, which is anything but your average investment firm. (Seriously, take a look.)

I wrote two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (Polish is one of them – go figure.)

In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.” (They must have been impressed by the eloquence of the Polish translation.)

Smitten by this article? Don’t let your love remain unrequited.   Sign up here to get my latest articles in your inbox.

The post Amazon isn’t the No. 1 villain in retail sector’s demise appeared first on crude-oil.news.

Loretta Lynch Communicated With DOJ Officials Using Grandmother’s Name As Alias

Content originally published at iBankCoin.com

Loretta Lynch has been busted using an alias to communicate with DOJ officials, per a breaking tweet by Kim Dotcom last night. The revelation comes after internet sleuths sifted through a new release of emails obtained via FOIA request by the American Center for Law and Justice (ACLJ) last week (link here to PDF) and found an email from “Elizabeth Carlisle” to colleagues, thanking “to all who worked on this.”

BREAKING: Did Loretta Lynch use an alias to communicate with DOJ officials and why? Who is Elizabeth Carlisle? Dear Internet, investigate! pic.twitter.com/oqngTKDhLY

— Kim Dotcom (@KimDotcom) August 5, 2017


And as Jim Hoft of The Gateway Pundit reported last night, users in Reddit’s  “The_Donald” forum discovered that “Lizzie Carlisle” was Lynch’s grandmother’s name – Lizzie Carlisle Harris!

The hunt begins for all communications with Loretta “Elizabeth Carlisle” Lynch…

Sneaky

Meanwhile, this isn’t the first case of a high level Democrat using an alias. Contained within leaked emails released by Wikileaks during the 2016 election is an email from then Secretary of State Hillary Clinton to “Dianne Reynolds” – later identified as daughter Chelsea Clinton, from the night of the Benghazi attack. Of note, Hillary tells Chelsea that the attack was conducted by an ‘Al Queda-Like’ group, and not an ‘angry mob’ protesting over an anti-Islam YouTube video, as the Obama administration told the American Public.

Not only was this top-secret information that Chelsea wasn’t cleared to know, it suggests that high level Democrats and/or their families employed aliases in order to covertly communicate.

 

What was Chelsea’s security clearance when Hillary told her Chris Stevens was killed by an “Al Queda-like” group? Surely this was top secret pic.twitter.com/7u81hMgQpt

— ZeroPointNow (@ZeroPointNow) July 10, 2017

Which begs a few questions

Why are top Democrats using aliases to communicate with each other? How many other former government officials or their family members have done so? And what does this mean for any current investigations into the previous administration?

Tarmac Meeting

Another bombshell revealed in ACLJ’s release concerns several of the emails obtained address the secretive “tarmac” meeting between Bill Clinton and Loretta Lynch, which happened right around the time the Obama administration began issuing FOIA requests to unmask the Trump team.

Per ACLJ:

One with the subject line “FLAG”was correspondence between FBI officials (Richard Quinn, FBI Media/Investigative Publicity, and Michael Kortan) and DOJ officials concerning “flag[ing] a story . . . about a casual, unscheduled meeting between former president Bill Clinton and the AG.” The DOJ official instructs the FBI to “let me know if you get any questions about this” and provides “[o]ur talkers [DOJ talking points] on this”. The talking points, however are redacted.

Another email to the FBI contains the subject line “security details coordinate between Loretta Lynch/Bill Clinton?”

On July 1, 2016 – just days before our FOIA request – a DOJ email chain under the subject line, “FBI just called,” indicates that the “FBI . . . is looking for guidance” in responding to media inquiries about news reports that the FBI had prevented the press from taking pictures of the Clinton Lynch meeting. The discussion then went off email to several phone calls (of which we are not able to obtain records). An hour later, Carolyn Pokomy of the Office of the Attorney General stated, “I will let Rybicki know.” Jim Rybicki was the Chief of Staff and Senior Counselor to FBI Director Jim Comey. The information that was to be provided to Rybicki is redacted.

Lynch had previously said that the tarmac meeting was ‘unscheduled’ described as ann ‘ambush’ by former President Bill Clinton, and that she ‘wouldn’t do it again.’ The ACLJ’s document dump suggests otherwise, as the FBI and DOJ scrambled to do damage control.

Between the tarmac meeting and new evidence that Lynch’s meeting with Clinton was scheduled and coordinated, it appears a cadre of former high ranking Democrats have some explaining to do, again.

h/t Cuchulian

Follow on Twitter @ZeroPointNow § Subscribe to our YouTube channel

The post Loretta Lynch Communicated With DOJ Officials Using Grandmother’s Name As Alias appeared first on crude-oil.news.