VAR Shocks!

By Chris at

How much money can you lose on any given day according to an entire squadron of dynamic variable factors?

It’s called value at risk (VAR), and because every hedge fund, investment bank, prop house, and algo firm wants to assess their own risk — while at the same time sneakily wanting to know how the rest of the market is assessing and quantifying their own risk — the models are all built on much the same inputs and, as such, are basically mirrors of each other.

So, you see VAR models eventually conform to the very thing they’re designed to protect us against. You see they are mostly like milk bottles — exactly the same, and they’re used widely, because they’re widely used.

Understand? Good!

Back when I had more hair… actually any hair, and I didn’t have to do 200 bloody sit-ups everyday just to keep flab from attaching itself to my stomach like some unwanted starved leech, I worked for a firm who, in order to protect their anonymity, I’ll just call PMJordan.

Anyway, while working at Lucifer, I worked on a project with the quants who built these VAR models.

These were very, very smart people. They were so smart that normal people had difficulty communicating with them.

One guy, who I’ll call “Frenchie” (to protect the anonymity of his origins), could explain parabolic curve theory to you with exquisite detail while simultaneously solving math problems in his head in mere seconds. Problems, I might add, which I would need a spreadsheet, half an hour, and intense frowning to complete.

What solidified my faith in his planet-sized brain was the fact that he was so awkward and almost completely incapable of social engagements. After the head of Lucifer in the London office addressed him, he promptly gazed up, flinched awkwardly, and stared out the window. Clearly a genius.

And “Frenchie” wasn’t the only one, because quants just like him can be found across the investment landscape developing VAR models and staring into space while their brains whirr and click away. But still, with all this brain power VAR models continue to be proven crap.

VAR models never managed to help those caught off balance when the CHF broke, and they never helped those caught off balance with Brexit.

Part of the problem, I suspect, is that in order to develop them you need a whopping great data set. Clearly the statistics based on data over, say, 10 years is better than that of 5, 100 better than 50, and so on.

One of my team here at Capitalist Exploits HQ referred me to the work of one Paul Schmelzing. Schmelzing is a visiting scholar at the Bank of England from Harvard University where he concentrates on 20th century financial history and he wrote an excellent piece on the history of bond bubbles going all the way back to the 1285. THAT’s a decent data set!

Probably the most important takeaway from Paul’s work — for me at least — is that at no period in history has there ever been the sort of bat sh*t crazy central bank intervention in the bond markets we’ve enjoyed in the last decade or so. VAR models don’t account for this.

That quite literally means that this time it is different.

I nicked this chart from Paul’s work. It provides us a clear picture over hundreds of years and thus puts things into perspective very nicely.

So here we sit in 2017 with some interesting data points, namely that back in July of last year the peak in the bond cycle was reached. Remember when I ranted about how bonds were trading as commodities?

Well, that was just one month after the peak in bonds. When we had over $13 trillion in bonds trading at negative yields.

This was the lowest level the risk free rate has ever reached in sovereign bond market history in 800 years.

This is one of the most remarkable bond bull market in all of recorded history. Lucky us!

Does this sound crazy? I think so.

How we got here? Fiscal expansion – the flip side of the bond bull market. Here we have the FED (US), the BOE (UK), ECB (EU), and BOJ (Japan).

There are a few things that turn any market. In the bond market, there are 3 that come to mind:

  1. Inflation is one of those things
  2. Geopolitical events are another
  3. Volatility is the third

Let’s look at all three.

Let’s take a look at unemployment rates — historically very closely tied with inflation. The second lowest rate since the late 60’s. Mmmm…

In the UK, we have to go back to the 70’s to find lower unemployment figures:

The EU is not faring as well but the trajectory and trend are clear:

And Japan? Same trend:

Where are you going with all this, Chris?

China just printed a 5.5% PPI number.

And over in the US….This just out from Bloomberg.

U.S. second-quarter growth was revised upward to the fastest pace in two years on stronger household spending and a bigger gain in business investment, putting the economy on a stronger track, Commerce Department data showed Wednesday.

  • Gross domestic product rose at a 3% annualized rate from prior quarter (est. 2.7%); revised from initial estimate of 2.6%
  • Consumer spending, biggest part of the economy, grew 3.3% (est. 3%), most since second quarter of 2016 and revised from 2.8%
  • Nonresidential fixed investment rose 6.9%, revised from initial increase of 5.2%
  • Corporate pretax earnings rose 7% y/y; up 1.3% q/q

And… our sauerkraut-eating, beer-swilling friends are experiencing the highest rate of accelerating inflationary growth in the last 23 years:

Our pasty friends in the UK? Bam!

Ok, so now we have all of this taking place.

Inflation being not so benign… central bankers actually getting what they want… while geopolitical risks, which I don’t have time to discuss here today but have written about extensively, are far higher than the market is pricing. And almost nobody seems to be paying much attention to them!

The connection between the structural political breaks and how these affect and feed both central bank policies and market participants behaviour is, I think, one of the most critical elements that bond investors are not considering.

Remember, both inflation or geopolitical shocks can impact the bond markets negatively. And what about the third one?

Volatility. Well, take a look for yourself.

Given that the treasury market volatility index just plunged again, the answer is that there are still trillions of dollars out there that believe in reward free risk. Are those planet sized brains building VAR models going to get it wrong again?


VAR Poll

Cast your vote here and also see what others think

– Chris

“Take calculated risks. That is quite different from being rash.” — George S. Patton



Liked this article? Then you’ll probably like my other missives on

this topic as well. Go here to access them (free, of course).


via Capitalist Exploits

The Alarming Militarization Of American Police


President Donald Trump has signed an executive order clearing the way for local police in America to receive military gear such as grenade launchers, high-calibre weapons, and armored vehicles. Trump and the DOJ have just reversed former President Barack Obama’s restrictions that allows local police departments to receive surplus military equipment.

Per ABCNews,

Restoring the program will “ensure that you can get the lifesaving gear that you need to do your job,” Attorney General Jeff Sessions told a cheering crowd at a national convention of the Fraternal Order of Police in Nashville, Tennessee. The group, America’s largest organization of rank-and-file officers, endorsed Trump for president after he promised to revamp the program.

The big move by Trump comes at a time where American inner cities such as Baltimore and Chicago are in absolute turmoil. The President has been very vocal about the prior administration’s unfair criticism of police forces and it was an easy win to appease his core supporters.

On the other hand, civil liberties groups and various lawmakers are not enthused about the militarization of local police and argue this will only lead to a further escalation of violence.

Kanya Bennett, legislative counsel for the ACLU,

  “Tensions between law enforcement and communities remain high, yet the president and the attorney general are giving the police military-grade weaponry instead of practical, effective ways to protect and serve everyone”

Let’s not kid ourselves, America by the day is turning into a police state where power through police force is the objective. The citizens of the police state may experience restrictions on social or financial mobility, or even on their freedom to express or communicate alternative political views.

There is another startling development in the Police States of America (PSA), in the next 8-years military drones will be replacing police helicopters. The report from Defense One states “enormous military-style drones” could be policing the skies from 2,000 ft..

Back in 2014-2015, Baltimore was a testing ground for the deep state’s military spy blimps….

Back to the Police States of America (PSA), earlier this year, I was able to see first hand the militarization in Baltimore County’s police force…


Like it or not, the Police States of America (PSA) is here. This time around the war comes home and the government is preparing through the militarization of local police forces. America is in a transitional period healing itself from decades of democratically controlled leadership in the inner cities, along with massive amounts of deindustrialization that has left our country rotting from the inside.

*  *  *

Ron Paul asks "Is a Militarized Police The Answer To Inner City Turmoil?"

Is President Trump's decision being "tough on crime," as he likes to claim, or is it all about controlling the population and undermining civil liberties?

via Tyler Durden

Did China’s Bronze Swan Just Arrive? Copper Inventories Crash Most In History

Buyers withdrew more copper from the London Metal Exchange’s global warehouse network on Wednesday than at any time since daily records began in 1996, extending a 19-day drop.

As Bloomberg notes, while the net decline in percentage terms was also the biggest since the height of China’s raw-materials boom in 2006, some have warned against reading such moves as an end to a years-long supply glut. A tug of war between financial traders with opposing views of the market has led to sharp swings in metal moving in and out of storage in the past year.

However, stockpiles also slumped 8.2% on the Shanghai Futures Exchange, which is notable because last year we saw the London and Shanghai inventories see-sawing (up in London, down in Shanghai, and vice versa)…

A question that emerged is what China is spending all this newly created money on. One answer emerged overnight when Bloomberg reported that after tumbling in the first half of 2015, copper inventories at the Shanghai Futures Exchange had been steadily rising, and in the most recent week soared by 11% to an all time high of 305,106 tons.


At the same time reserves at the London Metals Exchange declined for 11 days to the lowest level in more than a year, in other words China is shifting idle inventory from Point A to Point B.

But, this most recent withdrawal surge (the largest in history) suggests a sudden failure of the long-running commodity "collateralization" transaction – or CCFD – regime implemented in China years ago, as described in this post and summarized in the chart below…

Copper, as China pundits may know, is the key shadow interest rate arbitrage tool, through the use of financing deals that use commodities with high value-to-density ratios such as gold, copper, nickel, which in turn are used as collateral against which USD-denominated China-domestic Letters of Credit are pleged, in what can often result in a seemingly infinite rehypothecation loop (see explanation below) between related onshore and offshore entities, allowing loop participants to pick up virtually risk-free arbitrage (i.e., profits), which however boosts China's FX lending and leads to upward pressure on the CNY.


And sure enough, we have seen USDCNY surging in recent months… (even if the RMB basket against global currencies has stabilized)



An example of a typical, simplified, CCFD


In this section we present an example of how a typical Chinese Copper Financing Deal (CCFD) works, and then discuss how the various parties involved are affected if the deals are forced to unwind. Exhibit 3 is a ‘simplified’ example of a CCFD, including specific reference to how the process places upward pressure on the RMB/USD. We believe this is the predominant structure of CCFDs, with other forms of Chinese copper financing deals much less profitable and likely only a small proportion of total deal volumes.


To summarize, Goldman notes that these shadow banking vehicles – CCFDs – involve a long copper physical positions and a short futures position on the LME.

And so, the current crackdown on leverage in the system by Chinese authorities may be forcing unwinds of the CCFDs – thus putting upward pressure on Copper futures (unwinding short positions) and selling physical copper (which would mean procuring the physical metal before passing it on). These are exactly what we are seeing in the market currently.

So is this the bronze swan?

*  *  *

Barclays has also called the copper rally overhyped, while Bank of America Merrill Lynch said it’s the metal most at risk of a reversal, with the optimism of investors in financial futures disconnected from slow conditions in the physical market.

“When you look at the state of the refined copper market, you certainly question why prices have risen so significantly,” Snowdon said by phone from London.

And finally, bear in mind that the lagged response to China's credit impulse is about to hit base metals…The rise and fall in China's credit impulse that has been so highly correlated (on a lagged basis) with copper for the last eight years…

However, as one analyst noted,

“Getting short in any base metal is risky right now when you have this broad positive macro theme and increasing investor participation, particularly in China’s onshore market."


“This is probably one to stand back from and wait for Chinese macro sentiment to turn.”

And finally, bringing the narrative back to American shores, DoubleLine's Jeff Gundlach tweeted recently about the "Copper/Gold ratio soaring to the high of the year!"…


"Not good news for the "1.50% 10 year" crowd. Neither is 10 year Bund holding above 50 bp."

If China's legged credit impulse is about to have its peak effect on Copper (as we showed above) then perhaps, just perhaps, the real pain trade (given the surging shorts in T-Bonds), is a 1.50% 10Y yield after all… driven by a plunge in copper prices.

via Tyler Durden

Milo Returns To Berkeley, Will Spend “Whatever It Takes” On Security

Conservative provocateur Milo Yiannopoulos says he will spend “hundreds of thousands of dollars” on security during an upcoming event at the University of California-Berkeley.

Yiannopoulos being led away from a 2016 event that was cancelled by violent protesters.

In an interview with Campus Reform, Yiannopoulos said that he is “prepared to spend whatever it takes” to provide security for the “Free Speech Week” that is scheduled for the end of September, underscoring his sincerity with the six-figure commitment.

According to The Chronicle of Higher Education, the September 24 event at UC-Berkeley’s Sproul Plaza is slated to feature a lineup of popular conservative firebrands, including Yiannopoulos, Ann Coulter, and former White House strategist Stephen Bannon.

Despite the university’s recent pledge to hold a “free speech year” and crack down on those who use violence to shut down speakers, however, the administration has come under increasing pressure to derail the upcoming event.

Earlier this week, for instance, Berkeley Mayor Jesse Arreguin asked Chancellor Carol Christ to reevaluate her commitment to allowing the conservative speakers on campus.

“I’m very concerned about Milo Yiannopoulos and Ann Coulter and some of these other right-wing speakers coming to the Berkeley campus,” Arreguin told The San Francisco Chronicle.


“It’s just a target for black bloc to come out and commit mayhem on the Berkeley campus and have it potentially spill out on the street.”

Other local lawmakers also echoed the remarks of the Berkeley mayor, citing security concerns as the primary danger of allowing Yiannopoulos and others to hold the event on a university campus.

"We don’t want the moral, psychological and fiscal expense of having these agents of hate coming to our town,” Berkeley City Councilman Ben Bartlett told The Los Angeles Times.


"We know the contest of ideas is at the very heart of freedom, but at the same time when the ideas are certain to cause bloodshed I’m inclined to err on the side of protecting the population, and I say that with a heavy heart.”

Councilwoman Cheryl Davila likewise told the publication that she does not “appreciate that there are racists coming to UC Berkeley to spew hate.”

A UC-Berkeley spokesperson told Campus Reform in an email that the speakers for the upcoming event are being hosted by independent student organizations, and that the school therefore does not have “the legal right or desire to interfere with or cancel their invitations based on the perspectives and beliefs of the speakers.”

“Where we do have discretion is around everything that has to do with the safety of our communities,” the spokesperson said.


“That priority, along with our commitment to Free Speech, remains at the center of our planning and preparations for future events.”

Yiannopoulos, for his part, is well aware of the severity of the threat posed by Antifa and other leftist groups, having been driven from Berkeley’s campus by violent rioters last time he was scheduled to speak at the school earlier this year.

via Tyler Durden

How BofA Learned To “Stop Fighting Central Banks” And Love Shorting The Euro

In a new report that may come as music to the ears of Mario Draghi, who has been valiantly hoping to show the European economy recovering while keeping the EURUSD below the “red line” of 1.20, BofA FX strategist Athanasios Vamvakidis is out with a new note today urging currency traders to “stop fighting the central banks”, in other words stop selling the USD and buying the EUR, and recommends shorting the EURUSD to 1.15 with a 1.21 stop loss. 

His thesis is simple: markets have been fighting the major central banks, and BofA argues that they will be proven wrong, “leading to lower EUR/USD in the months ahead following the recent rally.” Such a contrary posture by markets is unusual as markets usually follow the simple rule not to fight the G10 central banks, particularly the major ones. However, as Vamvakidis writes, “the market expects very little from the Fed in the rest of this year and next year, despite the unexpected two Fed hikes so far this year and the dot plot having four more hikes by end-2018. The market also seems to expects too much from the ECB-fast QE tapering-despite inflation being well below the target and room for slow QE tapering. The consensus is also that the two central banks will respond differently to low inflation this year, with the Fed staying on hold and the ECB giving up. We disagree and see EUR/USD weakening by the end of this year, following the strong rally so far.

He lays out the market’s explicit “expectations” as follows:

Markets expect too little from the Fed: The consensus is that the Fed will focus more on low inflation and stay on hold. “We argue that the Fed will focus more on loose financial and monetary conditions, as well as risks to financial stability from asset price bubbles, and will continue normalizing policies gradually. We also argue that US inflation could start surprising to the upside.”

The current dilemma for the Fed in our view is whether to focus on inflation or financial conditions. The two have diverged this year (Chart 1). Despite Fed tightening, financial conditions have been loosening (Chart 2). However, both price inflation and labor costs have dropped (Chart 3) and credit growth has slowed (Chart 4). Overall, US data has been mixed and data surprises have been negative, although less so recently (Chart 5)


The FX strategist then contends that the market seems to be focusing on the low inflation dynamics in the US. Indeed, the market is pricing only a 30% probability for a December hike this year and less than one hike next year. If inflation is so low and has actually fallen this year, what’s the rush? As a result, risk assets have performed strongly, with equities at historic highs and volatility at historic lows.

Here BofA disagrees with this consensus for the following reasons:

  • US inflation is surprisingly low given the position of the economy in the business cycle, but this may not last. The Phillips curve is not dead yet.
  • The Fed is already behind the curve. Based on historical correlations, the Fed policy rate is too low to begin with compared with core inflation (Chart 11) and the output gap.
  • The market is priced for perfection. Our Global Fund Manager Survey shows a record consensus for strong growth and low inflation. The risks are asymmetric if there is an inflation surprise.
  • Even if inflation remains low, the Fed may focus more on financial conditions. Indeed, this is what the Fed has been doing so far this year, and for a good reason. We do not expect gradual Fed tightening to lead to even lower inflation, given that overall financial conditions are loosening and the Fed is already behind the curve. However, keeping policies too loose for too long could lead to asset price bubbles, which will eventually burst, leading to deflation risks. A forward looking Fed should take this into account, in our view. Why not take advantage of the good times to normalize policies, from a historically loose stance, to avoid risks from bubbles bursting down the road? Wasn’t one of the key lessons from the Greenspan years that monetary policies should not focus only on inflation, but also on financial stability? Don’t we know now that the Greenspan put was a policy mistake that led to moral hazard? Why repeat the same mistake twice, after having payed such a high price the first time?
  • We note that the last time when inflation and financial conditions diverted was in 2013-14 (Chart 1). At that point, despite low inflation, the Fed announced and then started QE tapering, taking advantage of the market euphoria to normalize policies-and triggering the so called tapering tantrum. We expect their policy reaction function to be similar this time.

And at the same time as expecting too little from the Fed, “markets expect too much from the ECB

ECB QE has an expiration date. For a number of reasons, the ECB does not seem willing or capable to increase the issue limit or relax the capital key in its QE purchases. QE will have to end next year. However, investors expect a relatively fast pace for QE tapering. Indeed, our Rates and FX Sentiment survey shows that most investors expect ECB QE to be over by mid-2018. Moreover, the market is pricing faster hikes by the ECB than by the Fed for the next three years (Chart 13).

Here the biggest bet by Bank of America is a simple one, and one which Yellen and most of her peers at the Fed recently warned against: the threat, and realization, that the Fed is stoking a bubble:

  • We strongly disagree with the argument that central banks should ignore asset price bubbles. Eventual correction of bubbles could lead to a crisis and deflation, as we very painfully experienced in the last ten years. The Fed’s credibility will suffer if a new bubble is formed, leading to another crisis down the road. Uncertainty on what is a bubble is not an excuse to do nothing.
  • Micro-prudential measures can also help to address such concerns. However, the right and the left hands of a central bank should be coordinated, to avoid offsetting each other.
  • We also disagree with the argument that the policy rate is too broad a measure to target asset price bubbles. After all, the policy rate is also too broad to micromanage labor market outcomes, but major central banks have been doing it anyway, particularly after the global crisis.
  • At a minimum, a central bank needs to avoid forming a bubble in the first place. Unconventional monetary policies were a way to support risk assets after the global crisis and through this channel support the economy. There was strong justification back then. However, more recently markets have been over-relying on central bank policy support, to the extent that bad news (weak data) is good news (strong equities) because they keep monetary policy loose. This is an indication of market addiction to central bank support, which the central banks have been trying to slowly address and they will continue doing so, in our view.
  • Asymmetric central bank policy response to asset price bubbles-doing nothing as they are formed and easing policies aggressively when the burst-will inevitably lead to moral hazard and more bubbles.

The key conclusion for BofA is that the market may be underappreciating the concerns of major central banks, and particularly the Fed, for being responsible for the next asset price bubble and a possible crisis after it bursts. Gradual policy normalization can take place despite low inflation under the current conditions.

In FX terms, assuming BofA is right, the FX implications is simple: weaker EURUSD.

The bottom line of the above discussion is a weaker EUR/USD. We believe that given what the market is pricing today for the Fed and the ECB and by how much the Euro has appreciated this year, the risks are asymmetric for a hawkish Fed surprise and a dovish ECB surprise this fall, leading to weaker EUR/USD by the end of the year. We understand that this is a contrarian call, given the EUR/USD performance this year and particularly in recent weeks.

And the recommendation:

We introduce a new trade recommendation to short EUR/USD spot based on our above analysis. Our target for EUR/USD is 1.15, which is also our year-end projection, with stop loss at 1.21, which is above the latest peak. Spot reference is 1.1891. Risks to this trade are the Fed not hiking again this year, the ECB announcing fast QE tapering and the Eurozone economy continuing to decouple from the US.

What are the trade downsides? First, here are the good, bad and ugly scenarios:

Considering alternative scenarios and the implications for the USD:

  • In a good scenario, US and global data improves and market euphoria continues. In this case, we would expect the Fed to continue normalizing policies, supporting the USD. Monetary policy divergence and risk-on should support USD/JPY in particular, but EUR/USD could also weaken. The USD could also do well against GBP if Brexit negotiations are slow-as we expect, despite a more pragmatic UK government after the elections this year.
  • In a bad scenario, something triggers a sharp sell-off in risk assets. In this case, we would expect the Fed to slow policy normalization, but the ECB would still have to announce QE tapering. EUR/USD would likely appreciate, although not by much, as markets are already pricing a very slow Fed. USD/JPY would suffer the most, but we would expect the USD to still do well against high beta G10 currencies, such as AUD, CAD and NZD, and against EM.
  • In an ugly scenario, the sell-off in risk assets is much stronger, risking a global recession/crisis. We would expect in this scenario JPY and CHF, followed by USD and EUR to do well, against everything else. The EUR/USD implications would depend on the specific trigger and the details, and are hard to determine in advance.

Therefore, we believe the USD would do well in most scenarios, although one would have to be selective depending on the scenario. The USD could do particularly well against high beta currencies and EM FX.


All these scenarios also point to higher FX vol. This is easy to argue for the bad and ugly scenarios, starting from a point of low volatility. In the good case scenario, our expectation for higher vol is based on our thesis for Fed monetary policy normalization.

Finally, what is BofA is wrong about central banks?

  • The biggest risk we see to our view is if Yellen is replaced by the end of this year-her term as a Fed Chair ends in February-and who would replace her. It is too early to have a view on who the next Fed Chair will be and whether and how the Fed’s policy reaction function could change. We are assuming policy continuity, but we may be proven wrong.
  • The second concern we have is that the Fed’s message on how its policy reaction function takes financial conditions into account, particularly when inflation is low, has been mixed. The Fed’s priorities were very clear to us under Bernanke, but Yellen has been flip-flopping, particularly this year. At times, she comes across as not having decided to respond to low inflation or to loosening financial conditions. Although we believe that the Fed will eventually do the right thing and try to prevent another bubble in assert prices, mixed messages this fall could keep markets guessing.
  • We are more confident about the ECB. Their credibility is directly in question, as they are missing their inflation target and are forced to end QE next year because of technical constraints. Giving up is not an option. We expect them to use everything within their mandate to persuade markets that they will do whatever it takes to reach their inflation target. The inevitable QE tapering next year makes their work very challenging, but they could try using other tools. Otherwise, an even stronger Euro will bring them even further away from their target.
  • Draghi will be faced with a very difficult communication challenge this fall. He has to announce a plan for QE tapering, despite the deteriorating inflation outlook, while persuading markets that the ECB remains committed to its inflation target. This will be tough. However, given market expectations, we see asymmetric risks from a dovish surprise.

via Tyler Durden

Thursday Humor? How The Media Controls Your Mind

Authored by Carey Wedler via,

Even as trust in the mainstream media wanes, Americans continue to fall victim to established narratives, waxing hysterical over everything from nuclear war and natural disasters to race wars and disease. But there is at least one voice of reason.

Enter JP Sears, the viral internet sensation who blends sarcasm with spirituality and humor with heavy topics. In his latest video — which is, unsurprisingly, going viral — he breaks down “How to be Mind Controlled.”

He opens the video:

Would you like the escape the horrible reality of thinking your own thoughts? Me too. Learning to have your mind controlled is your key to escaping the hell of thinking for yourself.”

He delves right into calling out the media for terrifying the population into obedience and submission.

Good evening,” he says. “Life is a dangerous tragedy. When you accidentally start feeling peaceful or start thinking about what’s really important to you, that’s your cue to turn on the news. We’ll make you scared instead. Then you’ll instinctively want someone to protect you, which will make you completely submissive and controllable to those who you think will protect you.”

Impersonating the average fear-mongered news consumer, JP Sears continues:

I live in a constant state of fear because scary things would happen if I wasn’t scared all the time.


Thinking for yourself is like going to the grocery store and bagging your own groceries,” he muses.It’s just a lower-class way of thinking. It’s significantly more luxurious to have someone else bag your groceries for you.”

He also waxes existential, tackling the fundamental problem of consciousness in our modern society:

You’ll sleep better at night when you’re convinced to believe the thoughts in your head are your own. Because they’re in your mind, it’ll be easy for you to believe they came from your mind.”


You’re free to do anything we want you to do,” he says. “You need to be under the spell of fear to make you hypnotically suggestible.”


Poverty, disease, terrorism, war, nuclear war, cyber warfare, germ warfare, biochemical warfare, and death are all wonderful things to be afraid of. Then it’s much easier for you to be controlled because you’ll be convinced to do whatever they want you to do because you’ll think doing so will help you avoid one of the things you’re afraid of.

Sounds about right. This sentiment also aligns with what JP Sears, who started his career as an emotional healing coach, told Anti-Media in an interview earlier this summer. “We as a society, and I mean this in the most loving way … I think we as a society have positioned ourselves as helpless victims bleeding out of power,” he said, referring in particular to the chaos that has enveloped the age of Trump.

He also believes much of the strife we see in society is a result of people’s inner struggles, which are often projected back out into the real world and political world.

We’ll help you obsessively monitor large-scale politics because it’ll help you ignore your own life,” he says sarcastically in his recent video.


“If you feel worse after watching [the news], then you’re doing better.

As he said of political language during our interview:

I think it is an incredibly low vibrational, low consciousness trap of a languageI think political language is not engineered to understand, accept or connect. I think it’s a language based out of the building blocks of separation.

This is, again, reflected in “How to be Mind Controlled.”

The scary thing is that if you went a day without watching the news, you’d start to notice that there are a lot more things to appreciate than there are to be afraid of,” he says. “That’s why it’s important to watch the news every day. Preferably three times a day.”


Imagine the disaster that would happen if you got in touch with your passions. It might lead you to want to do things that are outside of your thrilling coffin of conformity. Then you’d probably end up getting shot at point-blank range by a nuclear missile and eaten by wolves. It’s a scary world out there.”

As JP Sears told us:

To me, humor can be an awakening language where we listen and consider something that we otherwise wouldn’t even listen to in the first place,” he said. So, how that works, in my delusional opinion, is that humor is a language of connection, full stop.”

He has made similar videos on topics ranging from the American Heart Association’s condemnation of coconut oil to the 2016 election, as well as the yoga and spiritual communities, vegans, and Millennials.

via Tyler Durden

Democrats Furious After Trump Announces 90% Cut To Obamacare Marketing Funds

It appears as though President Trump has just given the Democrats yet another reason to shift the blame for Obamacare’s epic failure to his administration, as ridiculous as that may be.  According to The Hill, the Department of Health and Human Services has just announced that they’ll be slashing the Obamacare advertising budget by 90% for the 2018 plan year, from $100 million down to $10mm. 

Department of Health and Human Services officials said on a call with reporters that funding for advertising and other outreach for ObamaCare enrollment will be cut from $100 million last year to $10 million this year.


An HHS official argued the administration is seeing “diminishing returns” from ObamaCare spending.


The administration will still be spending some money on signing people up for the law, despite its opposition to ObamaCare.


Officials also announced they are cutting funding for “navigators,” which are outside organizations that help sign people up. Funding will be proportional to how navigators have fared in hitting their enrollment target the previous year. If a group signed up 70 percent of their target, they will get 70 percent of the funding.


Of course, what this really means is that when enrollments start to decline, Nancy Pelosi and Chuck Schumer will have the perfect excuse lined up for immediate distribution via their own personal propaganda machines, CNN, MSNBC, etc., as to why this is all Trump’s fault.

And, right on cue, Schumer has just released the following statement:

You know, because prices surging by 30% every single year couldn’t possibly have any impact on demand, right?

But, lest you forget, Nancy and Chuck have that angle covered too.  You see, as the Wall Street Journal pointed out recently, 2018 Obamacare price increases are also Trump’s fault because his threats to remove the individual mandate and/or cut federal subsidies have thoroughly confused the insurance companies and forced them to raise rates.

Major health insurers in some states are seeking increases as high as 30% or more for premiums on 2018 Affordable Care Act plans, according to new federal data that provide the broadest view so far of the turmoil across exchanges as companies try to anticipate Trump administration policies.


Insurers are also concerned about whether the Trump administration will enforce the requirement for most people to have insurance coverage, which industry officials say helps hold down rates by prodding young, healthy people to sign up for plans.


In Montana, Health Care Service linked 17 percentage points of its 23% rate increase request to concerns about the cost-sharing payments and enforcement of the mandate that requires everyone to purchase insurance. Kurt Kossen, a senior vice president at Health Care Service, said the company’s rate requests are driven by causes including growing health costs and “uncertainty and the associated risks that exist within this marketplace, including uncertainty around issues like the continued funding of [cost-sharing payments] and mechanisms that encourage broad and continuous coverage.”


The impact of potentially losing the cost-sharing payments was also clear in the rates requested by Blue Cross of Idaho, which average 28%. That would probably be in the lower teens if the payments were guaranteed, said Dave Jeppesen, a senior vice president. “It’s a big swing,” he said. “There’s a lot of risk associated with the uncertainty in Congress right now, and we are pricing appropriately for that risk.”

Of course, as we’ve noted multiple times over the past couple of years, Obamacare premium increases are hardly a new phenomenon.  In fact, data from the Department of Health and Human Services recently revealed that premiums across the country soared an average of 113% over the past 4 years, or nearly 30% per year.  Ironically, that 30% is the same hike that many insurers are seeking for 2018…some folks would call that a trend.


But, other folks don’t believe in things like math and adverse selection bias that results in deteriorating risk pools and higher costs for insurers…no, they prefer simple, provocative narratives that can be exploited for political gain while masking the real underlying problems of a failed policy that is ruining healthcare for millions of hard working Americans.

via Tyler Durden

Trump Ending Obama-Era “Dreamer” Program: Report

President Trump is expected on Friday to announce plans to end the Obama-era Deferred Action for Childhood Arrivals (DACA) program which gave a deportation reprieve to hundreds of thousands of young illegal immigrants also known as “dreamers”, Fox News reports. Under DACA, nearly 800,000 people brought to the country illegally as children received work permits and deferral from deportation.

Trump had originally promised to terminate DACA during his presidential campaign, but since taking office had left the door open to preserving parts of it. According to Fox, which cites a senior administration official, Trump will announce the program’s end but will allow so-called “dreamers” currently in the program to stay in the U.S. until their work permits expire – which, for some, could be as long as two years.

The program, which was instituted through an executive order signed by President Obama in 2012, has been facing a legal challenge from Texas and nine other states, which threatened court action to attempt to block it unless Trump rescinds DACA by Sept. 5.

However, on Thursday afternoon, White House officials on Thursday pushed back on the Fox News report, claiming no decision has been made. “A final decision on that front has not been made,” White House press secretary Sarah Huckabee Sanders said during today’s press briefing. “When we have a final decision, this is under review, there are a lot of components that need to be looked at.” She then told a reporter “No offense to your colleagues from Fox News, but I’m better informed than they are … it has not been finalized.”

“A final decision on that front has not been made, and when it is, we will certainly inform everybody in this room,” she said.

White House homeland security adviser Tom Bossert added that “the administration is still reviewing the policy,” and said the lawsuits “won’t affect the policy decision, but it will affect the timing of it. We certainly have to watch the lawsuits and how they matriculate through the courts and when the deadlines will be.”

According to The HIll, Trump and senior administration officials, including White House chief of staff John Kelly, have said they don’t believe DACA would hold up in court, while the DOJ has declined to say whether it would defend the program from the potential lawsuit.

Rumors have been circulating for weeks about how Trump plans to respond to the threat of court action, prompting Democrats, some Republicans and activists to mount a public defense of the program.


Rep. Carlos Curbelo (R-Fla.) introduced amendments Tuesday that would prevent public funds from being used to alter the memo that instituted DACA in 2012.


And California Attorney General Xavier Becerra (D) said Monday his office was considering mounting a defense of the program if the Justice Department refuses to act.

A plan to allow DACA to simply lapse already has buy-in from conservative groups that want the president to end the program. “Our position has been that President Trump should allow DACA to lapse,” Ira Mehlman from the Federation for American Immigration Reform told Fox News. “As people’s two-year deferments and work authorization expire they should not be renewed.”

Ironically, in an interview with ABC News earlier this year, Trump suggested he might not entirely do away with DACA. “They shouldn’t be very worried,” Trump said of the young people in the program. “I do have a big heart.”

Meanwhile, Democrats on Thursday expressed opposition to the move, referencing the president’s past comments. “If he ends DACA, Trump would betray #DREAMers he said he’d treat w/ ‘great heart.’ These incredible young people make our country stronger,” tweeted Virginia Sen. Tim Kaine, the 2016 Democratic vice presidential nominee.

via Tyler Durden

Milwaukee Sheriff David Clarke Resigns to Spend More Time With His Fake Medals

Milwaukee County Sheriff David Clarke resigned Thursday, effective at midnight, ending the controversial 15-year tenure of one of the nation’s most prominent and conservative lawmen.

Clarke was first appointed and later elected sheriff in 2002. He began raising his national profile with frequent appearances on FoX News in 2014, following the unrest in Ferguson, Missouri, where he made strong denunciations of Black Lives Matter and other groups critical of police. However, he was dogged throughout his career by lawsuits and reports of deplorable—sometimes deadly—conditions inside his jail.

In the most infamous case, an inmate, Terrill Thomas, died in 2016 of “profound dehydration” inside Clarke’s jail.

It was far from the only such case. Last year, a woman sued the Milwaukee County Jail for being subjected to repeated sexual assaults by a guard. She also said she was shackled while giving birth. The lawsuit alleged that at least 40 other women since 2011 had been forced to give birth while shackled to hospital beds. A jury awarded her $6.7 million in June.

Another woman is also suing the Milwaukee County Jail, alleging that poor medical care led to a miscarriage during her third trimester:

A lawyer for Shadé Swayzer has filed a notice of claim against the Milwaukee County Sheriff’s Office, alleging that jail staff are responsible for the death of Swayzer’s child. The 30-year-old woman, who was almost nine months pregnant, is seeking $8.5 million in damages.

Swayzer’s lawyer, Jason Jankowski, wrote in the notice of claim that Swayzer told a corrections officer her water broke and she was going into labor, but the officer laughed and ignored her. Swayzer said she told the officer that she was going into labor around midnight, gave birth at about 4 a.m., and finally received attention from officers at 6 a.m. Her child was pronounced dead later that day, although it’s unclear at what time.

Clarke was a staunch supporter of Donald Trump and spoke at the 2016 Republican National Convention.

This June, the Trump administration offered Clarke a position at the Department of Homeland Security, but he withdrew his name from consideration a couple of weeks later.

In addition to his outspoken conservatism and disregard for human life, Clarke was known for wearing large cowboy hats and fake medals.

from Hit & Run

St. Petersburg Wants to Force You To Put Solar Panels On Your House

Solar Panels on a HomeThe City Council of St. Petersburg, Florida has an idea as bright as the sun for harnessing its energy: force residents to install solar panels.

Council members are positively radiating with the notion of requiring all new homes and all major roof renovations on existing homes to include solar arrays. “It creates jobs, it lowers pollution,” councilman Kevin Nurse says. “There is no downside.”

Unless you consider being forced to spend an extra $10,500 to $14,700 on your home a downside, according to an estimate for a typical home solar installation in the 5,000 to 7,000 kilowatt range by St. Petersburg-based Solar Energy Management. Homes smaller than 1,100 square feet are exempted from the law.

As written, the ordinance would put entire cost of that on the homeowner.

“There is no way they should be telling me I have to do that if I live in St. Pete,” said one St. Petersburg man to local CBS affiliate 10 News.

Jennifer Motsinger of the Tampa Bay Builders Association saying that “the mandate on putting in solar panels is only going to cost homeowners of St. Pete a lot more money.” Instead of more solar panels on local roofs of, she says, “you’re more likely to see homeowners not purchasing new roofs, and not keeping up with the maintenance of their homes.”

In a phone interview with Reason, Nurse says he would like to see existing homes exempted from the solar panel mandate, but he still thinks the requirement makes sense for new homes.

“You can create a system that provides local jobs, reduces fossil fuel use and pollution, and reduces the cost of owning a home,” Nurse tells Reason. Energy savings from solar generation would be more than enough to cover the increased cost of a mortgage for a newly built home.

Motsinger, however, is skeptical that a top-down solar panel mandate is a win for energy efficiency. Builders, she says, already provide a range of energy-saving options—from better insulation to low energy windows—and what method works best will depend on the individual building.

“Because each individual structure can be built differently,” she says, “you can’t apply solar panels universally or any other methods of energy efficiency for that matter.”

That was pretty much the reaction when South Miami became the first (and so far only) Florida city to require solar panel installation. As far as I can tell, only South Miami and, predictably, San Francisco require that the panels be installed. A number of other cities around the country require new homes to be “solar ready”, meaning they include equipment capable of having panels installed.

Eric Montes of the Latin Builders Association wrote in a Miami Herald op-ed critical of the South Miami law, “if anyone who does not want to have solar panels, then they are not welcome to live in South Miami. This, I would argue, runs counter to our individual freedoms.”

Homeowners and developers who want solar panels can install them. Those who a cheaper home and a roof uncluttered with the latest crony capitalist contraptions should have that choice.

from Hit & Run