US foreign policy has always been directed at wrecking anything that wasn’t deemed sufficiently American and replacing it with something more acceptable – especially if that something allowed wealth to flow into the US from the outside. Compromises were reserved for the USSR, but even there the Americans constantly tried to cheat. For everyone else there was just submission, which was usually tactfully disguised as a positive – a seat at the big table which offered better chances for peace, prosperity and economic and social development.
Of course, it was a simple enough matter to pierce this veil of hypocritical politeness and to point out that the US, living far beyond its means, has only managed to survive by looting the rest of the world, but anyone who dared to do so would be ostracized, sanctioned, regime-changed, invaded and destroyed—whatever it took.
The US establishment has lavished its wrath on anyone who dared to oppose it ideologically, but it reserved its most extreme forms of malice for those who dared commit the cardinal sin of attempting to sell oil for anything other than US dollars. Iraq was destroyed for this very reason, then Libya. With Syria the juggernaut bogged down and stalled out; with Iran it is unlikely to ever get started.
Even the spineless European politicians are now forced to admit that US policies are designed to enrich certain American interests at the expense of their constituents; they understand by now that further denial would cause them further harm at the polls. Most insultingly to the American ego, US attempts at making Russia and China submit are being greeted with shrugs, titters and eye rolls. And now anybody who wants to can openly criticize the US and scheme behind its back.
How times have changed! US politicians and officials have abandoned all attempts at maintaining decorum and no longer disguise their rapacious, grasping ways. Instead of veiled threats, they now deploy big lies and fake threats. Focusing on the manufacture and dissemination of fakes, they have been attempting to use them to coerce obedience. There are the fake threats—Russian, Chinese, Iranian, North Korean, Cuban—that are used to call for discipline within NATO and for compliance with US unilateral sanctions.
There are also the fake (or false flag) events—a Boeing shot down over the Ukraine by “pro-Russian rebels”; the Skripal poisoning; fake chemical attacks in Syria preposterously blamed on the government; damaged oil tankers in UAE blamed on Iran. These fakes are being used as an an excuse to wreck everything—international security and trade agreements, the systems for insuring that these agreements are adhered to, and world trade.
Before the Americans would do their best to wreck anything that wasn’t theirs, then work to replace it with something that was theirs; but now they have nothing to offer as a replacement for what they are destroying. The only thing the US can offer China is Chinese victory in the trade war. China does not need the US, and this point is being rather loudly pounded home, not just by the Chinese government but by private companies and individuals as well.
First, there is a flood of countersanctions. In particular, a halt to the export of rare earth minerals will shut down electronics manufacturing and with it the entire US high tech sector. Then there are the bonuses to those who buy Huawei products and punishments for buying anything American, up to and including eating at McDonald’s. iPhones have been all but banned—not by the government but by peer pressure. Taking a trip to the US is now a firing offense. There is now a good chance that, caught up in this patriotic uplift, the Chinese are being prepared to make any sacrifice for the sake of outright victory in their trade war with the US.
But do the Americans still have the power to destroy? When Saddam Hussein decided to start selling oil for euros, the CIA organized a provocation that caused him to invade Kuweit as punishment for stealing Iraqi oil. This allowed the US to organize a gigantic expeditionary force with divisions from a large number of countries, including Syria and Egypt and pretty much all of NATO. After a decade of Hussein festering in place, a somewhat smaller coalition dealt him the coup de grâce, destroying Iraq in the process. The victims of the American invasion and occupation outnumber Saddam Hussein’s victims by orders of magnitude. Later, the same thing was done to Muammar Qaddafi, for similar reasons, and Libya is likely to remain as a ruin. There, some sort of minor coalition was cobbled together.
But now the US finds that it urgently needs to knock out Iran because otherwise it will be too late. It is time to form a new coalition and Mike Pompeo has started racing around Eurasia. First off, he offended the Germans by canceling his state visit with Angela Merkel on a moment’s notice and without offering a reason. Instead, he flew to Baghdad—a perfect location for launching an attack on Iran, except that the Iraqi response was a message of solidarity with Iran, willingness to mediate the US-Iranian dispute, and consideration of a ban on US troops on Iraqi soil.
And so Mike flew to Sochi, where he met with Russian foreign minister Sergei Lavrov and, briefly, with Putin. Most likely, Putin told him where he can stuff his war plans, and so Mike canceled his planned trip to Moscow, to avoid having Sergei Lavrov wipe his feet on him again. And so Mike flew on to Europe, where he got a quick “no” on Iran from EU foreign policy head Federica Mogherini and an outright refusal to meet from the foreign ministers of France, Germany and Great Britain. And so Mike flew back to Washington. You can’t tell anything by looking at his smirking fat mug, but I am sure that he was crying on the inside.
US actions around the world can now be compiled into two lists.
The first list is of what the US has succeeded or may yet succeed in wrecking.
The second list is of what the US wants to or has been trying to wreck but won’t be able to.
There is no third list of what the US has managed to wreck and then make whole again. The challenge for the whole world is to move as many items as possible from the first list to the second list. There are many ways of going about doing this that do have a chance of working and one that doesn’t: negotiating with Americans. Because they lie and cheat and aren’t worth talking to.
via ZeroHedge News http://bit.ly/30Wn2fU Tyler Durden
Did Philippines President and alleged homophobe Rodrigo Duterte just pull an ‘American Beauty’?
The Philippines strongman, who is notorious for his unfiltered public comments (late last year, he accused “most” Catholic Priests of being closet homosexuals), made an unexpected “admission” during a visit to Japan.
During a speech on Thursday, Duterte outed one of his political opponents as a homosexual, and then he outed himself…
According to local media reports cited by RT, while bashing Senator Antonio Trillanes, an ardent critic of his rule, Duterte implored his audience to “ask any gay person who sees Trillanes move, they’ll say he’s gay.”
He went on to say that, in this respect, he and Trillanes are “similar.”
But…
Duterte said he “became a man again” after meeting his now ex-wife, and that he “cured himself” of homosexuality. He finished with a rather cryptic proclamation where he referred to himself in both the third and first person: “Duterte is gay. So I am gay, I don’t care if I’m gay or not.”
It’s not entirely clear what he meant by that (though if you have any theories, feel free to leave them in the comments), but it’s worth noting that this isn’t the first time Duterte has discussed his sexuality in this half-joking, half-serious way. In 2017, he joked that he had considered becoming bisexual so he could “have fun both ways.”
This contrasts with Duterte’s reputation as an alleged homophobe, having once described US ambassador Philip Goldberg as a “gay ambassador” and a “son of a whore.”
Though Duterte claimed to be in favor of legalizing gay marriage in the conservative Catholic country early in his presidency, he has since changed his position, saying it would clash with the country’s civic and religious principles.
via ZeroHedge News http://bit.ly/2wxnLpU Tyler Durden
John Bolton claims that “socialist” states in Latin America are a threat. He’s lying to you.
American foreign policy can be so retro, not to mention absurd. Despite being bogged down in more military interventions than it can reasonably handle, the Trump team recently picked a new fight—in Latin America. That’s right! Uncle Sam kicked off a sequel to the Cold War with some of our southern neighbors, while resuscitating the boogeyman of socialism. In the process, National Security Adviser John Bolton treated us all to a new phrase, no less laughable than Bush the younger’s 2002 “axis of evil” (Iran, Iraq, and North Korea). He labeled Venezuela, Cuba, and Nicaragua a “troika of tyranny.”
Alliteration, no less! The only problem is that the phrase ridiculously overestimates both the degree of collaboration among those three states and the dangers they pose to their hegemonic neighbor to the north. Bottom line: In no imaginable fashion do those little tin-pot tyrannies offer either an existential or even a serious threat to the United States. Evidently, however, the phrase was meant to conjure up enough ill will and fear to justify the Trump team’s desire for sweeping regime change in Latin America. Think of it as a micro-version of Cold War 2.0.
Odds are that Bolton and Secretary of State Mike Pompeo, both unrepentant neocons, are the ones driving this Latin American Cold War reboot, even as, halfway across the planet, they’ve been pushing for warwith Iran. Meanwhile, it’s increasingly clear that Donald Trump gets his own kick out of being a “war president” and the unique form of threat production that goes with it.
Since it’s a recipe for disaster, strap yourself in for a bumpy ride. After all, the demonization of Latin American “socialists” and an ill-advised war in the Persian Gulf have already been part of our lived experience. Under the circumstances, remember your Karl Marx: History repeats itself, first as tragedy, then as farce.
And add this irony to the grim farce to come: You need only look to the Middle East to see a genuine all-American troika of tyranny. I’m thinking about the kingdom of Saudi Arabia, the military junta in Egypt, and the colonizing state of Israel—all countries that eschew real democracy and are working together to rain chaos on an already unstable region.
If you weren’t an American, this might already be clear to you. With that in mind, let’s try on a pair of non-American shoes and take a brief tour of a real troika of tyranny on this planet, a threesome that just happen to be President Trump’s best buddies in the Middle East.
AMERICA’S FAVORITE KINGDOM
The Saudi royals are among the worst despots around. Yet Washington has long given them a pass. Sure, they possess oodles of oil, black gold upon which the United States was once but no longer is heavily dependent. American support for those royals reaches back to World War II, when President Franklin Roosevelt took a detour after the Yalta Conference to meet King Ibn Saud and first struck the devilish deal that, in the decades to come, would keep the oil flowing. In return, Washington would provide ample backing to the kingdom and turn a blind eye to its extensive human rights abuses.
Ultimately, this bargain proved as counterproductive as it was immoral. Sometimes the Saudis didn’t even live up to their end of the bargain. For example, they shut the oil spigot during the 1973 Yom Kippur War to express collective Arab frustration with Washington’s favoritism toward Israel. Worse still, the royals used their continual oil windfall to buildreligious schools and mosques throughout the Muslim world in order to spread the regime’s intolerant Wahhabi faith. From there, it was a relatively short road to the 9/11 attacks in which 15 of the 19 hijackers were Saudi nationals (and not one was an Iranian).
More recently, in the Syrian civil war, Saudi Arabia even backed the al-Nusra Front, an Al Qaeda franchise. That’s right, an American partner funded an offshoot of the very organization that took down the twin towers and damaged the Pentagon. For this there have been no consequences.
In other words, Washington stands shoulder to shoulder with a truly abhorrent regime, while simultaneously complaining bitterly about the despotism and tyranny of nations of which it’s less fond. The hypocrisy should be (but generally isn’t) considered staggering here. We’re talking about a Saudi government that only recently allowed women to drive automobiles and still beheads them for “witchcraft and sorcery.” Indeed, mass execution is a staple of the regime. Recently, the kingdom executed 37 men in a single day. (One of them was even reportedly crucified.) Most were not the “terrorists” they were made out to be, but dissidents from Saudi Arabia’s Shia minority convicted, as Amnesty International put it, “after sham trials that…relied on confessions extracted through torture.”
During the Arab Spring of 2011, the Saudi royals certainly proved anything but friends to the budding democratic movements brewing across the region. Indeed, its military even invaded a tiny neighbor to the east, Bahrain, to suppress civil-rights protests by that country’s embattled Shia majority. (A Sunni royal family runs the show there.) In Yemen, the Saudis continue to terror bomb civilians in its war against Houthi militias. Tens of thousands have died—the exact number isn’t known—under a brutal bombing campaign and at least 85,000 Yemeni children have already starved to death thanks to the war and a Saudi blockade of what was already the Arab world’s poorest country. The hell unleashed on Yemen has been dubbed the world’s worst humanitarian crisis. It has already producedmillions of refugees and, at present, the world’s worst cholera epidemic.
Through it all, Washington stood by its royals time and again, with The Donald far more gleefully pro-Saudi than his predecessors. His first foreign excursion, after all, was to that kingdom’s capital, Riyadh, where the president seemed to relish joining the martial pageantry of a Saudi “sword dance.” He also let it be known that the cash would keep flowing from the kingdom into military-industrial coffers in this country, announcing a supposedly record $110 billion set of arms deals (including a number closed by the Obama administration and ones that may never come to fruition). Son-in-law Jared Kushner even continues to maintain a bromance with the ambitious and brutal ruling Saudi crown prince, Mohammed bin Salman.
In other words, with fulsome support from Washington, sophisticated American weapons, and a boatload of American cash, Saudi Arabia continues to unleash terror at home and abroad. This much is certain: If you’re looking for a troika of tyrants, that country should top your list.
AMERICA’S FAVORITE MILITARY AUTOCRACY
The United States also backs—and Trump seems to love—Egypt’s military ruler Abdel Fattah al-Sisi. At a press conference at the White House in September 2017, the president leaned toward the general and announced that he was “doing a great job.” Hardly anyone inside the Beltway, in the media, or even on Main Street batted an eye. Washington has, of course, long supported Egypt’s various tyrants, including the brutal Hosni Mubarak who was overthrown early in the Arab Spring. Cairo remains the second-largestannual recipient of American military aid at $1.3 billion annually. In fact, 75 percent of such aid goes to just two countries, the other being Israel. In a sense, Washington simply bribes both states not to fight each other. Now, that’s diplomacy for you!
So, how’s Egypt’s military using all the guns and butter the United States sends its way? Brutally, of course. After Mubarak was overthrown in 2011, Mohammed Morsi won a free and fair election. Less than two years later, the military, which abhors his Muslim Brotherhood organization, seized power in a coup. Enter General al-Sisi. And when Morsi supporters rallied to protest the putsch, the general, who had appointed himself president, promptly ordered his troops to open fire. At least 900 protesters were killed in what came to be known as the 2013 Rabaa Massacre. Since then, Sisi has ruled with an iron fist, extending his personal power, winning a sham reelection with 97.8 percent of the vote, and pushing through major constitutional changes that will allow the generalissimo to stay in power until at least 2030. Washington, of course, remained silent.
Sisi has run a veritable police state, replete with human-rights abuses and mass incarceration. Last year, he even had a show trial of 739 Muslim Brotherhood-associated defendants, 75 of whom were sentenced to death in a single day. He also uses “emergency” counterterrorism laws to jail peaceful dissidents. Thousands of them have gone before military courts. In addition, in US-backed Egypt most forms of independent organization and peaceful assembly remain banned. Cairo even collaborates with its old enemy Israel to maintain a stranglehold of a blockade on the Palestinians in the Gaza Strip, which the United Nations has termed “inhumane.”
Yet Egypt gets a hall pass from the Trump administration. It matters not at all that few places on the planet suppress free speech as effectively as Egypt now does—not since it buys American weaponry and generally does as Washington wants in the region. In other words, a diplomatic state of marital (and martial) bliss protects the second member of the real troika of tyranny.
AMERICA’S FAVORITE APARTHEID STATE
Some will be surprised, even offended, that I include Israel in this imaginary troika. Certainly, on the surface, Israel’s democracy bears no relation to the political worlds of Saudi Arabia and Egypt. Still, scratch below the gilded surface of Israeli life and you’ll soon unearth staggering civil-liberties abuses and a penchant for institutional oppression. After all, so extreme have been the abuses of ever more right-wing Israeli governments against the stateless Palestinians that even some mainstream foreign leaders and scholars now compare that country to apartheid South Africa.
And the label is justified. Palestinians are essentially isolated in the equivalent of open-air prisons in the West Bank and the Gaza Strip—not unlike the bantustans of South Africa in the years when that country was white-ruled. In the impoverished, refugee-camp atmosphere of these state-lets, Palestinians lack anything resembling civil rights. They can’t even vote for the Israeli prime ministers who lord it over them. What’s more, the Palestinian citizens of Israel (some 20 percent of the population), despite technically possessing the franchise, are systematically repressed in a variety of ways.
Evidence of an apartheid-style state is everywhere apparent in the Palestinian territories. In violation of countless international norms and UN resolutions, Israel imposes its own version of a police state—functionally, a military occupation of land legally possessed by Arabs. It has begun a de facto annexation of Palestinian land by building a “security wall” through Palestinian villages. Its military constructs special “Jewish only” roads in the West Bank linking illegal Israeli settlements, while further fracturing the fiction of Palestinian contiguity. Prime Minister Benjamin Netanyahu has not only refused to withdraw those settlements or halt the colonization of Palestinian territory by Jewish Israelis, but during the recent Israeli election promised to begin the actual annexation of the West Bank in his new term.
Israeli military actions are regularly direct violations of the principles of proportionality in warfare, which means that the ratio of Israeli to Palestinian casualties is invariably absurdly disproportionate. Since last spring, at least 175 Palestinians (almost all unarmed) have been shot to death by Israeli soldiers along the Gaza Strip fence line, while 5,884 others were wounded by live ammunition. Ninety-four of those had to have a limb amputated. A staggering 948 of the wounded were minors. In that period, just one Israeli died and 11 were wounded in those same clashes.
Life in blockaded Gaza is almost unimaginably awful. So stringent are the sanctions imposed that one prominent official in a leaked diplomatic cable admitted that Israeli policy was to “keep Gaza’s economy on the brink of collapse.” In fact, back in 2012, one of that country’s military spokesmen even indicated that food was being allowed into the blockaded strip on a 2,300-calories-a-day count per Gazan—just enough, that is, to avoid starvation.
Through it all, with President Trump at the wheel, Netanyahu can feel utterly assured of the near limitless backing of the United States. The Trump team has essentially sanctioned all Israeli behavior, thereby legitimizing the present state of Palestinian life. Trump has moved the US embassy to contested Jerusalem—admitting once and for all that Washington sees the holy city as the sole property of the Jewish state—recognized the illegal Israeli annexation of the conquered Syrian Golan Heights, and increased the flow of military aid and arms to Israel, already the number-one recipient of such American largesse.
Sometimes, in the age of Trump, it almost seems as if “Bibi” Netanyahu were the one guiding American policy throughout the Middle East. No wonder Israel rounds out that troika of tyranny.
WAG THE DOG?
Beyond their wretched human-rights records and undemocratic tendencies, that troika has another particularly relevant commonality as the United States reportedly prepares for a possible war with Iran. Two of those countries—Israel and Saudi Arabia—desperately desire that the American military take on their Iranian nemesis. The third, Egypt, will go along with just about anything as long as Uncle Sam keeps the military aid flowing to Cairo. Think of it as potentially the ultimate “wag the dog” scenario, with Washington taking on the role of the dog.
This alone should make Washington officials cautious. After all, war with Iran would surely prove disastrous (whatever damage was done to that country). If you don’t think so, you haven’t been living through the last 17-plus years of this country’s forever wars. Unfortunately, no one should count on such caution from John Bolton, Mike Pompeo, or even Donald Trump.
So settle into your seats folks and prepare to watch the empire swallow the republic whole.
via ZeroHedge News http://bit.ly/2I9hNRq Tyler Durden
It’s a question that the financial press – not to mention millions of struggling Americans – have returned to time and time again (recently, it even received its own Vox explainer): If we are truly in the middle of an economic boom, then how come so many Americans, even members of the vaunted middle class, feel like they’re barely treading water?
According to the Fed, roughly 40% of Americans couldn’t cover an emergency $400 expense. Wage growth has been stagnant for decades. Meanwhile, our monetary policy makers point to a lack of inflation in the economy as an excuse for keeping interest rates on hold, even as the man on the street, and even a growing number of economists, contend that prices have been climbing much more quickly than the official data let on.
And we’re not just talking about the obvious factors like rising tuition, rent and health-care costs. It increasingly appears that the central bank is underestimating food inflation, even as the prices of many agricultural commodities remain in a slump (of course, Trump’s trade war isn’t helping).
To the growing list of distressing data points, we can now add one more: Gallup has published a poll showing that roughly 45% of Americans would rate their financial situation as “fair” or “poor” – and that a staggering 70% expected they would be financially better off. And while two-thirds of Americans say they have enough money to live comfortably, another one-third do not. But even more concerning is the 25% of respondents who say they’re constantly worried about not having enough money to cover their household expenses. Roughly the same number said they’re only just making ends meet.
In a ranking of Americans’ financial anxieties, the overwhelming majority of respondents said they’re at least a little worried about being able to afford health care costs and having enough money for retirement.
Gallup synthesizes the polling data into what it calls a “Personal Financial Worry” index. This year, 22% of respondents said they were worried about six or seven of the seven items, qualifying them for the “highly worried” category. Another 24% worry about three to five items and are classified as “moderately worried.”The remaining 55% said they have few financial worries, while 30% – the group most likely to have a college degree, gainful employment and the ownership of stocks – are worried about none of the seven.
Americans’ love affair with auto- and student-loans has helped push outstanding consumer credit above $4 trillion. Even though the pace of credit growth slowed last month, once the next recession comes, the number of Americans who are struggling to make ends meet will likely explode higher, while those who are already struggling might quickly find their backs against a wall.
via ZeroHedge News http://bit.ly/2W6zczh Tyler Durden
It’s ironic, to say the least, that the Chinese government chose to deny a national broadcast of “Game of Thrones”’ last installment recently, signaling to both its own people and to the United States that the ongoing trade war is far from over.
After all, Mr. Trump’s much cherished trade wars are a game where one powerful leader confronts another – a game of thrones, so to speak, where skirmishes and battles occur and the innocent become victims in an inescapable field of combat.
Unlike marvelously created made-for-television episodes where someone usually emerges victorious, in trade wars, everyone loses.
Those Chinese who looked forward to seeing the final episode may have instead seen some of the last few weeks’ televised propaganda and concluded that the United States is not to be trusted. At the same time, Americans – Kansas grain farmers who previously shipped crops to China; South Carolina auto workers who built China-bound BMWs, Volvos, and Hondas; or ordinary U.S. Walmart shoppers paying slightly higher prices – are not doing quite as well as they were before Mr. Trump’s game of thrones started.
Of course, we’ve all heard the justifications: China has not played by the rules, its enforcement of intellectual property rights leaves much to be desired, and its government-owned enterprises are subsidized unfairly. But we must also recognize that the “victimized” American businesses who still chose to do business in China did so voluntarily. In spite of its well-known imperfections, they saw China’s marketplace as attractive and profitable.
Of course, it would be great if we could compel China to improve its practices without subjecting American workers and consumers to friendly fire. And we might all wish to call Camelot home. The situation is much like when a landowner buys a fine home at a discount next to an industrial plant and then brings suit to force a clean-up. One cannot voluntarily come to the nuisance and then expect a court of law to provide a windfall. But it doesn’t hurt to try.
Those who think that the ongoing trade wars with China and other countries are making America great should look closely at what is happening to U.S. industrial production, which has fallen for three of the last four months. They might consider falling retail sales. Or they might look at real-time GDP growth estimates from the Federal Reserve Banks of New York and Atlanta, which are now registering less that 2.0 percent in real terms.
For a wider-ranging perspective, they might consider the Federal Reserve Bank of Philadelphia’s monthly estimates of future growth for each of the 50 states. These show strong state economic growth generally disappearing, and forecast state recessions in a few places.
If we are engaged in a game of thrones, the data suggest we are losing.
Politicians are savvy. They have all of this information. So why would they deliberately choose policies that could cause damage to Americans’ economic prospects in an election year? Why would those responsible for securing the wellbeing of all Americans choose to favor specific special interest groups such as organized labor in the industrial north instead of working to secure prosperity for all Americans?
There are at least two answers to these questions:
First, perhaps the savvy people making these political choices are far better informed about the outcome of their game of thrones than the rest of us mortals. Based on the cards they are holding, they fully expect to win and make Americans stronger in the long-run, even though we are weaker in the immediate future.
Alternately, perhaps politicians who would risk a recession over a trade war, all while preparing to run for office, are fundamentally risk takers. After all, these are competitive people drawn to a high-stakes profession. They might prefer playing a game of thrones, seeking a resounding victory when it is not at all clear that they will win. If they succeed, the victory may taste sweeter, but in the meantime, the common folk are made poorer.
via ZeroHedge News http://bit.ly/2EXVOfJ Tyler Durden
It’s not just humans who have no idea how to trade this market: math PhD’s are just as clueless, and as a result quants are having a deja vu of December when they suffered jarring losses in a short period of time, just like their human peers.
For evidence, look no further than HBK Capital Management, which is closing its quant unit, adding to the recent pile up of hedge funds that wagered on algorithmic trading… poorly.
According to Bloomberg, the Dallas-based firm which manages a total of $8 billion, is liquidating a more than $400 million quant fund and returning capital to investors, based on a statement Friday. HBK is also cutting its allocation to a statistical arb fund. The quant strategy was one of seven that HBK employed, alongside corporate credit, emerging markets, event-driven equities, structured credit, developed markets fixed income and volatility.
“HBK’s decision was prompted by a reevaluation of its equity statistical arbitrage effort, which performed exceptionally well through 2014 but less well in recent periods,” according to the statement from the $10 billion firm. “Although recent performance compared favorably with many similar funds, it did not meet HBK’s return objectives.”
HBK is the latest fund to fall amid hard times, struggling to make money amid bouts of market volatility. Investors yanked $8 billion from quant funds in the first four months of this year, according to data from eVestment. That’s on top of the $19 billion they pulled in 2018.
Even iconic investors such as billionaire Cliff Asness who manages one of the world’s largest funds, has faced losses and redemptions, admitting earlier this month that quant stock selection has been “terrible.” Amplitude Capital, which lost money for two straight years and saw investor withdrawals, is returning outside money. And BlueMountain Capital Management is liquidating its $1 billion computer-driven portfolio and refocusing on human-run investing.
One of the main reasons for the quant underperformance: the nature of stock gyrations. As Bloomberg explained, risk appetite and economic growth expectations haven’t been strong enough to help revive a factor like value, which tends to be made up of cheaper and thus riskier equities. Others, like quality and low-volatility, have looked out of tune with the new year rally, even after they became expensive thanks to their haven appeal in late 2018.
Even the momentum factor, which had made money in eight of the last 10 years, plunged in 2019. The strategy of buying winners of the past year and selling its losers became loaded with more defensive bets in the fourth quarter, and they turned into laggards as the S&P 500 surged in the new year.
Despite the challenging conditions and his colorful remarks, Asness told the Morningstar conference in Chicago he intends “to stick like grim death” to his beliefs and work on improving his explanations to help investors.
Proponents argue that recent factor underperformance is statistically nothing out of the ordinary and needs to be considered in the long term. If and when portfolios rebound, these declines might seem like a blip in retrospect. Asness reckons stock valuations are currently stretched to levels not seen since the 1990s tech bubble — a signal that his strategies may be ready to pay off.
However as of mid May, and especially later into the month, the headache is that factor declines have been occurring in concert. Sanford C. Bernstein noted earlier this year that rising correlations in the field, which reached the highest in at least two decades, have made it harder for quants to generate idiosyncratic returns and stave off unwanted risks.
For instance, both value and momentum — two factors that in the past have moved in opposite directions — have dropped together in the last two quarters.
Yet one man’s meat is another man’s poison, because as many in the business are throwing in the towel on quant strategies, Steve Cohen’s Point72 Asset Management is expanding its quant business with two money manager hires. Specifically, according to Bloomberg, Sergey Fein joined this week from ExodusPoint Capital Management, while Yang Lu, who previously worked at BlueMountain Capital Management. Both will be portfolio managers in the firm’s Cubist Systematic Strategies unit.
Fein joins after a little more than a year at ExodusPoint, which was co-founded in 2018 by Michael Gelband and was the biggest ever hedge fund launch. Fein previously co-founded quant fund R&F Capital Advisors, which shuttered in 2017 amid a slump for systematic strategies.
Lu was most recently at BlueMountain, where he co-ran the firm’s systematic hedge fund with Perry Vais. BlueMountain is liquidating its roughly $1 billion systematic portfolio to focus on human-run credit investing.
Point72, which now manages $13.5 billion and which has served as the basis for the show Billions on various occasions, “has seen its share of managers come and go as multistrategy hedge funds compete for talent.” The firm is seeking to raise an additional $1 billion this year after garnering $5 billion in outside capital when it launched in 2018. The fund has returned 7.4% in the first four months of 2019.
via ZeroHedge News http://bit.ly/2IfXX6X Tyler Durden
On May 28 I wrote that “the Western world is collapsing so rapidly that I am afraid that I am going to outlive it”. My article was about the rising demonization of white people that is producing a collapse in their confidence. Inculcated guilt is making whites willing to accept discrimination against them in order to elevate Arab, African, and Hispanic migrants that greedy corporations and witless political leaders have brought into the country. The Identity Politics of the Democratic Party works to the advantage of darker skinned migrants who present themselves as the victims of the white-faced victimizer.
Psychological and emotional collapse is not the only form of collapse underway in the US and Western world generally. There is also economic and social collapse, especially in the United States. Today America’s once great manufacturing and industrial cities, such as Detroit, St. Louis, Cleveland, Flint Michigan, Gary Indiana, have lost 20% of their populations, largely due to the offshoring of US manufacturing.
Social collapse is evident in rising homelessness. Los Angeles, San Francisco, and Seattle have large homeless populations that encamp on city streets, parks, and upscale neighborhoods such as Venice Beach.
In Los Angeles feces and garbage in public streets have caused a plague of rats and fleas. Dangerous sanitation conditions have caused medical authorities to predict “a major infectious disease epidemic this summer in Los Angeles”. The flea-infested carpets in City Hall are being ripped out because of fear of a typhus outbreak brought on by rat infestation.
Costs are mounting on already struggling taxpayers. For example, in Los Angeles in 2016 voters approved a $1.2 billion measure to finance 10,000 units of housing for the homeless. The initial cost three years ago was $140,000 per housing unit. Now it is $500,000 per unit. As one news report put it, “Spending a half-million dollars to build one basic rental unit to get one homeless family out of the rain” doesn’t come across as a viable idea.
Among the solutions being investigated are refugee camps and a rethinking of the policy of taking in millions of peoples from impoverished and unstable countries. We are impoverishing ourselves without making a dent in world poverty. For every person the US takes in, tens of thousands remain. Already areas of the US look and function like India of 100 years ago.
Homeless alleviation is at least benefiting liberal and progressive organizations who are amassing money and power to fight homelessness at the expense of taxpayers.
Another sign of social collapse is growing water problems. The Flint Michigan problem is well known, but there are many others with less publicity. Henry Ford Hospital and the Detroit Health Department report a drastic increase in levels of waterborne diseases.
This is just a taste of the accelerating social collapse. Readers will write to inquire why I didn’t include x,y, and z and the health care crisis. The answer is that this is an article, not a book.
What we are experiencing is the failure of government at all levels. Huge sums are being spent on wars and the fomenting of wars while Los Angeles faces the prediction of a typhus epidemic. For two decades the US has spent trillions of dollars on wars in the Middle East in behalf of Israel. Washington calls it “the war on terror,” which is a cover story that hides the real agenda and motivation of violence that has killed, maimed, orphaned and displaced millions of Muslims. One consequence of these senseless wars has been to radicalize Muslims against Americans and Europeans even as the US and Europe import millions of displaced Muslims into their countries.
Countries without a homogeneous population are already disadvantaged by disunity, but to bring in massive numbers of peoples who have every reason to hate you is insanity. Once here, the hatred is weaponized against white people by Identity Politics.
If a country decided to self-destruct, it would do precisely what the US and Europe have done. This is the serious problem, not Iran, North Korea, Venezuela, Syria, Russia, China. It is likely the case that Identity Politics is now so entrenched in American institutions, such as the New York school system, that disunity is now a permanent feature of the United States.
The largely unacknowledged problems that the US faces would overwhelm even a unified country. For a country as disunited as America, it is difficult to see any favorable odds.
via ZeroHedge News http://bit.ly/2MivItD Tyler Durden
Perhaps sensing that the US “maximum pressure” campaign against Iran is fast deflating, with even ultra-Hawk John Bolton late this week saying American military build-up had successfully “deterred” imminent Iran threats – suggesting the crisis has been averted – the Saudis are now going on the offensive.
Image source: AP via Al Jazeera
Saudi Arabia’s aging King Salman went on an anti-Iran tirade during an emergency meeting of Arab leaders hosted in Mecca on Thursday, saying the Shia country is the greatest threat to global security for the past four decades. He also echoed past US and Israeli charges that Tehran is currently developing nuclear and ballistic missiles in order to threaten its neighbors and extend its influence over the region.
He said Iran’s leaders were “harboring global and regional terrorist entities and threatening international waterways.” He called for “using all means to stop the Iranian regime” from its regional “interference”. Iran for its part rejected these as “baseless accusations” and has denied it had any role in a spate of recent “sabotage” attacks in the Gulf region.
The king further condemned Iran’s tactics to disrupt maritime trade and global oil supplies in “glaring violation of UN treaties” following Riyadh’s blaming Iranian operatives for using underwater mines to attack and “sabotage” four tankers near the Strait of Hormuz weeks ago, two of which were Saudi flagged.
“The Iranian regime has been interfering in other countries’ affairs, developing their nuclear programs and threatening international navigation,” King Salman said during his speech, according to a translation by Saudi-owned Al-Arabiya.
Iran has been “supporting terrorism, undermining stability, and looking to expand its influence over the past four decades,” Saudi Arabia’s King Salman said at the GCC Summit in #Mecca. https://t.co/8TMXsarPPKpic.twitter.com/GdQ20I64r2
— Al Arabiya English (@AlArabiya_Eng) May 30, 2019
The Saudis are attempting to build a strong consensus of Arab states which will stand aggressively against Iran and its allies in the region; however, these efforts could be crippled by the ongoing inter-GCC economic and diplomatic war involving Qatar.
The US welcomed the move toward “Arab unity” to confront Iran, with a State Department spokesperson saying Thursday, “Gulf unity is essential in confronting Iran, to confronting their influence, to countering terrorism writ large, and, of course, to ensuring a prosperous future for the Gulf,” according to the AP.
Saudi officials also blamed Iran for fueling the war in Yemen by backing Houthi rebels, which the Saudi coalition has been fighting mostly via airstrikes since 2015, resulting in what the UN has called the “world’s worst humanitarian crisis”. Visiting delegations were even shown destroyed Houthi drones and missile fragments upon their arrival in Jeddah.
Notably, the Iraqi delegation scoffed at the summit’s anti-Iran emphasis. Iraqi President Barham Salih told the summit that stability in Iraq is paramount and that any threats to Iran’s security could spark war in the region, sending fragile post-war Iraq back into sectarian bloodshed and chaos.
This week the Pentagon revealed that nearly 1,000 troops newly deployed to Middle East to counter the Iran threat would be stationed in Saudi Arabia and Qatar.
Over the past week, following Trump’s extended hand for Iran’s leaders to “call me,” we’ve seen a consistent deescalation following weeks of dangerous escalation, including threats and counter-threats of military action by both sides.
Iranian President Hassan Rouhani reportedly said this week that the “road is not closed” on talks with the US if Washington drops the sanctions and returns to upholding the 2015 nuclear deal (JCPOA) – something not at all likely to happen.
via ZeroHedge News http://bit.ly/2Z03VQc Tyler Durden
Moore’s Law might be dead, but Swanson’s Law remains alive and well.
Swanson’s Law is the observation that solar PV panels tend to become 20 percent cheaper for every doubling of cumulative shipped volume. It’s the solar industry’s equivalent of Moore’s Law, which predicts the growing computing power of processors. But as the semiconductor industry has discovered, the observation that processing power increases exponentially at a two-year or so cadence has hit a physical limit.
Fortunately, Swanson’s Law is yet to come up against such a brick wall, and solar energy costs have continued to come down precipitously for decades–without exception. And now the renewable energy industry is about to cross a major milestone that will truly set it on the path towards becoming the world’s predominant energy source.
According to a report by the International Renewable Energy Agency (IRENA) cited by Reuters, beginning in 2020, electricity generated by solar PV and onshore wind is set to become consistently cheaper than the most cost-effective fossil fuel alternative, without subsidies.
In essence, more than 80 percent of solar PV and 75 percent of onshore wind power deployments to be commissioned next year will be cheaper than the cheapest new oil, natural gas, or coal-fired sources as per the report
This report has a pretty wide scope, having been compiled from IRENA’s own members, governments, consultancies, industry groups, business journals, auctions, and tenders. IRENA’s membership includes research institutes, project developers, utilities, and power companies across 160 countries, all of which contribute data for its Renewable Cost Database.
Swanson’s Law in Action
According to the IRENA report, the global weighted average cost of power generated using solar energy fell another 26 percent last year compared to the previous year. Bioenergy costs declined 14 percent, solar PV and onshore fell 13 percent, hydropower was 12 percent lower, while offshore wind was 1 percent cheaper last year. Costs of as low as $0.03-$0.04 per kilowatt hour (kWh) for solar PV and onshore wind have already become a reality in some parts of the globe.
IRENA estimates that the global average cost of electricity for solar PV will clock in at $0.055/kWh in 2020, then fall another 13 percent to $0.048/kWh in 2021. As for onshore wind, corresponding estimates are $0.049/kWh and $0.045/kWh in 2020 and 2021, respectively.
Road to 100% renewable energy
At the turn of the century, the idea that renewable energy could become a major source of energy during our lifetimes would have sounded incredible, even preposterous. After all, fossil fuels were just too dominant and much cheaper, while renewable energy faced seemingly insurmountable technical, cost, and integration challenges.
Yet the impossible could be about to happen.
Over the past decade, renewable energy has experienced transformative changes, enabling it to play a very significant role in our energy industry. The solar industry has in particular been a standout performer thanks to remarkable price declines by solar PVs and increasing grid flexibility.
According to data by the Solar Energy Industries Association (SEIA), U.S.’ cumulative operating solar PV capacity stood at 62.4 GW by the end of 2018–about 75 times the installed capacity just a decade ago– supplying 1 percent of the country’s electricity needs.
The future of renewable energy is looking brighter than ever. Energy company BP has projected that solar and other renewables will supply 30 percent of the world’s electricity needsby 2040 and up to 50 percent in regions such as Europe. That’s an upgrade from the firm’s last year forecast of 25 percent by 2040.
BP estimates that renewables will only take 25 years to go from 1 percent to 10 percent of global energy compared to 45 years for oil and more than 50 years for gas. The funny thing is, growth of solar has been consistently underestimated over the past decade, with actual installations outstripping projections. This means there’s a fair chance that even the most optimistic current projections might still fall short of reality a decade or two from now.
The repercussions for the global economy are bound to be enormous. Other than the potential to stop climate change in its tracks, renewable energy will likely negate at least some of the nearly $300 billion in annual energy subsidies provided by the world’s governments.
via ZeroHedge News http://bit.ly/2WaB0r6 Tyler Durden
Thanks to a ‘crumbling justice system’ which has forced courts prioritize crimes by seriousness, Canadian prosecutors are now letting petty criminals walk free for crimes such as shoplifting, minor assault and fraud, according to the CBC.
The president of Canadian Association of Crown Counsel says cases involving less serious crimes are either being dropped outright or shunted into restorative justice programs. He called it a regular occurrence, though specific numbers weren’t available.
“At some point, we have to make a decision: what crimes do you want us not to prosecute?” said Rick Woodburn, whose organization represents 7,500 Crowns across the country. –CBC
“And as you can see, it starts falling off the bottom. And sooner or later, we’re going to decriminalize, because we’re not prosecuting certain types of offences,” said Woodburn.
Due to a 2016 Canadian Supreme Court ruling known as the Jordan decision which protects offenders from unreasonable delays through the legal system, prosecutors are now focusing on major crimes such as homicides and sexual assaults.
In July 2016, the CSC overturned the drug convictions of Barrat Richard Jordan due to an unreasonable delay. Now – if a case is delayed by 18 months in provincial court, or 30 months in superior court, it’s considered unreasonable.
“Lower-end charges [are] being triaged and falling off our radar, because we have to keep an eye on the bigger cases of the homicides, sexual assaults, robberies,” said Woodburn, adding that the courts have now adopted a “triage system” to manage cases by seriousness of the alleged offense.
“When we look at our schedules, we have to make sure they’re falling within the Jordan timelines and that court time is not getting eaten up by a fraud under $200.”
Retailers are obviously very concerned
The Retail Council of Canada which represents over 45,000 retail merchants across the country has expressed grave concerns over recent developments.
“It’s really concerning for retailers, retailers of all sizes,” said the council’s Atlantic director, Jim Cormier. “The deterrent for theft and shoplifting in stores is, of course, often that there can be legal consequences.”
Last year, the retail council estimated that shoplifting accounts for up to $5 billion a year in losses for Canadian retailers. Cormier said shoplifting has an awful impact on retailers, and if it happens enough, it will cut into a company’s profits.
“Less profits means less ability to hire and pay staff. You know it means less tax revenue for the cities and towns in which these retailers are doing their business,” said Cormier.
Stephen O’Keefe, a consultant who helps companies with loss prevention, said it pains him when courts throw out shoplifting cases.
“When you have a company that experiences shrinkage in excess of their net profit, they have to shut their doors. We’ve experienced that in Canada over past years where we’ve had major brands, major retailers, who have closed their doors because they can’t absorb those shrinkage charges.” –CBC
In order to recoup their losses, some retailers are skipping criminal court completely – instead opting to take offenders to civil court, according to O’Keefe.
Woodburn insists that provincial governments as well as the federal government needs to set aside more money and resources for the criminal justice system – including more Crowns, judges, court staff and defense attorneys. Unless this happens, more delays and dropped cases are inevitable.
“Judges and justices are working themselves into the ground, Crowns are drowning in workload, defence lawyers are the same,” said Woodburn. “ou see them overworked. Staff and others are working overtime just to make sure people’s rights are not being infringed, and that as it is now is unsustainable.“
via ZeroHedge News http://bit.ly/2JPrSpT Tyler Durden
