President Trump’s language and demeanor at Monday’s summit in Helsinki with Vladimir Putin sent his detractors on both sides of the aisle into fits, just 72 hours after the Department of Justice indicted 12 Russian officials for hacking the DNC.
Trump’s position has more or less been that peace with Russia is more important than election meddling, which didn’t influence the election – and that the United States has been meddling in elections for a long time, so perhaps let’s mend fences and move forward as two nuclear superpowers. Also Hillary sold Russia 20% of American uranium after a bunch of people connected to the transaction heavily contributed to her foundation, which was approved by a rubber-stamp committee, four months after Bill Clinton collected $500k in a speech to a Russian investment bank during a trip where he hung out with Putin at his house. All pre-Crimea of course, so no biggie.
The Rigged Witch Hunt, originally headed by FBI lover boy Peter S (for one year) & now, 13 Angry Democrats, should look into the missing DNC Server, Crooked Hillary’s illegally deleted Emails, the Pakistani Fraudster, Uranium One, Podesta & so much more. It’s a Democrat Con Job!
After former CIA Director John Brennan called Trump’s performance “nothing short of treasonous” earlier in the day, former FBI Director James Comey issued what may be construed as a call to action against a sitting US President.
“This was the day an American president stood on foreign soil next to a murderous lying thug and refused to back his own country,” adding “Patriots need to stand up and reject the behavior of this president.”
This was the day an American president stood on foreign soil next to a murderous lying thug and refused to back his own country. Patriots need to stand up and reject the behavior of this president.
While this appears to be the first time Comey has suggested citizens rise up against a duly elected sitting President – the extreme end of which becomes a coup, Brennan suggested last July that White House officials refuse to follow direct orders in the event that President Trump fires Special Counsel Robert Mueller.
“I think it’s the obligation of some executive branch officials to refuse to carry that out. I would just hope that this is not going to be a partisan issue. That Republicans, Democrats are going to see that the future of this government is at stake and something needs to be done for the good of the future,” Brennan told CNN’s Wolf Blitzer at the Aspen Security Forum, effectively calling for a coup against the president should Trump give the order to fire Mueller.
Meanwhile, Congressman Steve Cohen, who said he would award the Purple Heart to disgraced FBI agent Peter Strzok – only to later regret his words, called for the military to step in and stage a coup:
Where are our military folks ? The Commander in Chief is in the hands of our enemy! https://t.co/3eF7OLKEdN
So the DOJ indicts 12 Russians one business day before Trump meets with Putin, and MSM outlets far and wide crank out pieces like veteran NYT employee Charles Blow’s Sunday op-ed “Trump, Treasonous Traiter” hours before the event.
Combined with Trump’s dismissive attitude towards Russian hacking and a nation whipped up by surely coincidental Russian indictments and MSM hit pieces, things could not have gone better for team Hillary and crew.
That said, some have come to Trump’s defense…
US has intervened in foreign elections for decades, including leaking stolen documents. . . nations regularly try to influence elections and this is nothing new for the United States, either as the culprit or as the target of such efforts.”Jonathan Turley https://t.co/AoFFyZVIdo
So Obama & Hillary give Russia Uranium One after accepting kickbacks & foundation donations, Bill Clinton received 500k from a Russian bank, Mark Warner conspires with a Russian oligarch’s lobbyist to manufacture fraudulent evidence, but SOMEHOW Trump commited #Treason? pic.twitter.com/FwLzjKYXXY
False flag John Brennan really has some nerve calling President Trump’s meeting with another nuclear superpower as #Treason considering he sold out the American people time and time again and ran the intelligence community like a de-facto government mafia. https://t.co/Al4ar23EgT
You know @POTUS had a great meeting w/Putin because the media and the global elite are hysterical. Note: These are the same people who have enabled terrorism to flourish, unlimited wars, condemned generations to poverty, stolen prosperity&misinform the public to control outcomes.
John Brennan literally voted for the Communist Party to take power in the United States of America. If you look at his ludicrous tweet through that lens it makes more sense. https://t.co/2xUmlihwXT
When this bubble finally bursts, will we witness the biggest stock market crash in U.S. history? “The bigger they come, the harder they fall” is a well used phrase, but I think that it is very appropriate in this case. From a low of 6,443.27 on March 6th, 2009, we have seen the Dow nearly quadruple in value since the last financial crisis. It has been a remarkable run, and it has lasted far longer than virtually any of the experts anticipated. But what goes up must come down eventually.
This stock market bubble was almost entirely fueled by easy money from the Federal Reserve, and now that easy money has been cut off. The insiders can see the handwriting on the wall and they are getting out of the market at a pace that we haven’t seen since 2008. Could it be possible that the day of reckoning is finally at our door?
Of course we have been hearing warnings like this for a very long time. In fact, I have been warning about a market crash for a very long time. Just the other day, one of my readers insisted that if something was going to take place that “it would have happened by now”. In the Internet age, we have been trained to have very short attention spans, but financial bubbles don’t care about the length of our attention spans. They all inevitably come to a bitter end, but they don’t reach that end until they are good and ready.
And without a doubt we are on borrowed time, but meanwhile so many of us that are continually warning about what we are facing are getting a lot of heat for it.
For instance, when Ron Paul told CNBC that the stock market is “the biggest bubble in the history of mankind”, he was strongly criticized for it, but he was 100 percent correct…
This market is in the “biggest bubble in the history of mankind,” and when it bursts, it could cut the stock market in half, he told CNBC’s “Futures Now” Thursday.
If the Dow only plummets to about 12,000 or so during the coming downturn we will be exceedingly fortunate, because the truth is that stock prices need to fall by at least that much just to get us into the neighborhood where stock prices will start to make sense once again.
Today, sales to stock price ratios are hovering near all-time highs.
The same thing is true for earnings to stock price ratios and GDP to stock price ratios.
The only other times these ratios have been so elevated were just before major stock market crashes.
In the end, these ratios always, always, always return to their long-term averages eventually.
It may take many years, but it always happens.
So what factors led Ron Paul to make such an ominous prognostication? The following comes from CNBC…
“The Congress spending and the Federal Reserve manipulation of monetary policy and interest rates — debt is too big, the current account is in bad shape, foreign debt is bad and it’s not going to change,” he said.
Paul isn’t alone in his critique. A number of politicians have voiced concern over ballooning deficits, including current House Speaker Paul Ryan, who raised a warning on the nation’s debt in 2012.
Of course it isn’t just the U.S. that is drowning in debt.
According to the Institute of International Finance, total global debt just hit a brand new record high of 247 trillion dollars…
Every quarter the Institute of International Finance publishes a new number of the total amount of global debt outstanding, and every quarter the result is the same: a new record high
Today was no exception: according to the IIF’s latest Global Debt Monitor, the amount of debt held in the world rose by the biggest amount in two years during the first quarter of 2018, when it grew by $8 trillion to hit a new all time high of $247 trillion, up from $238 trillion as of Dec. 31, 2017 and up by $30 trillion from the end of 2016.
There is no possible way that all of that debt can ever be paid off. The only way that the party can continue is for debt to continue growing faster than global GDP, and everyone knows that is simply not sustainable in the long-term.
So an absolutely monumental “adjustment” is coming. You can call it a “crash”, a “collapse” or anything else that you would like, but just as certainly as you are reading this article it is coming.
It is just a matter of time.
But for now, the talking heads on television continue to insist that everything is just fine and that the stock market still has more room to go up…
There’s still room for stock markets to rise and worries of an impending recession are premature, according to Berenberg Capital Markets’ chief economist.
“Even if profits peaked in (the first quarter of) 2018, which remains uncertain, history suggests the stock market has room to appreciate,” Mickey Levy, Berenberg’s chief Americas and Asia economist, said in a client note this week. He pointed to data demonstrating how in every economic expansion since the mid-1970s, the S&P 500 index went on to appreciate for a “significant period” after corporate profits peaked.
I wish that CNBC would have me on just one time so that I could refute some of these guys.
Since 1913, the Federal Reserve has gone through 18 rate hiking cycles. In 18 out of 18 cases, those rate hiking cycles have ended in either a recession or a market crash.
Do you really think that the 19th time will be different?
10 years ago, virtually everyone thought that the “boom times” would last forever too. But they didn’t. Instead, we plunged into the greatest economic and financial crisis since the Great Depression, but at this point 2008 seems like ancient history to most people.
Yet again we have fooled ourselves into thinking that the good times will just continue to keep on rolling, and once again our society will be in for a very rude awakening when the inevitable crash finally arrives.
2 of 33,817 FW: New article – Bourdain on Clinton Inbox x Tyler Durden Attachments 2:19 PM (5 minutes ago) to me From: ZeroPoint Now Sent: Monday, July 16, 2018 1:44 PM To: Tyler Durden Subject: Re: New article – Bourdain on Clinton On Mon, Jul 16, 2018 at 10:41 AM, ZeroPoint Now wrote: Title: Bourdain: “Piece Of Sh*t” Bill Clinton Is “Entitled, Rapey, Gropey, Grabby, Disgusting” Teaser: And wait till you hear what he said about Hillary… 4 Attachments @gmail.com>@gmail.com>@gmail.com>
Four months before Anthony Bourdain’s June 8 suicide, he sat down with Popula‘s Maria Bustillos for a wide-ranging interview which was finally published on Sunday. In it, Bourdain excoriates the Clintons, has harsh words for Obama and even calls Richard Branson “kind of a douche.”
Asked about whether Bill Clinton should have been removed from office after the Monica Lewinsky scandal, Bourdain said that despite Clinton being “A piece of shit,” who was “Entitled, rapey, gropey, grabby, disgusting” should have still kept his job despite “the way that he – and she [referring to Hillary Clinton] destroyed these women and the way that everyone went along” was “screaming in apparent hypocrisy and venality.”
How you can on the one hand howl at the moon about all these other predators. And not at least look back. OK, let’s say, well, it was all consensual: powerful men, starstruck women, okay fine, let’s accept it at its most charitable interpretation. Fine. He is a very charming man, I met him, he’s fucking magnetic. -Anthony Bourdain via Popula
Bourdain expounded on Hillary, noting “When you’re in the room, you think wow, she’s really warm and nice and funny. But the way they efficiently dismantled, destroyed, and shamelessly discredited these women for speaking their truth…“
But Mrs. Clinton took a very different approach herself 25 years ago as the wife of then-Gov. Bill Clinton, leading the effort to discredit women who came forward with their own stories of harassment or assault by her husband.
Campaign narratives written by reporters detailed how she honchoed the campaign team that handled “bimbo eruptions,” digging up personal papers and official records that could be used to undercut the stories told by a series of women. One top aide later recounted Mrs. Clinton’s intent to “destroy” the story of one accuser, while former adviser Dick Morris said Mrs. Clinton engaged in “blackmail” to try to force women to recant their stories. –Washington Examiner
Bourdain said Clinton’s behavior during those years “is unforgivable,” though reiterated that he didn’t think Bill Clinton should have been thrown out of office for his behavior.
Bourdain: I don’t think he should’ve been thrown out of office for this.
Bustillos: Why not? We want people who are of excellent character to be in that office.
Bourdain: I think you recognize people for what they are, and you determine for yourself, I’m not voting for that motherfucker ever again! Or anybody who enabled him, you know? This product, okay, I voted for it, it’s in. Is this grounds for pulling someone out of office? I don’t think so.
Bustillos: What if we did have those kind of standards? We want a person who is like, honorable.
Bourdain: I would look at this way. I would never under any circumstances vote for Bill Clinton today. But I think impeaching the guy over Lewinsky was ridiculous. Particularly given today.
It was the shaming, discrediting, undermining the women that made both of them unsuitable for any future endeavors. I don’t think they should’ve pulled him from office. –Popula
On the topic of former President Obama, Bourdain said he found him to be “very unconvincing in public, much of the time. I was always wanting a little more passion, stop halting—the halting, careful speech. In person, absolutely the most gracious, graceful, real, funny, uh, no sense of calculation, honest, I mean, you know. Him I’d vote for fuckin’ again, any time.”
Bustillos: Yeah and he like droned people, and bailed out the bankers.
Bourdain: I believe he may not have been the greatest president in history, but he’s one of the fucking nicest, good, one of the best people we ever had.
Bustillos pushed back – having strong opinions after feeling deceived by Obama:
Bustillos: No!! No. He lied. I worked hard for that campaign. I saw and I just believed him and I was like Hope, Change, Yes. I’m like, I’m so happy, we won, you know!
Minute one he started fucking with us. He promised transparency, he like—more whistleblowers were prosecuted than at any time. There’s not one fucking banker in jail. Not one! Jail me one fuckin’ banker! These people stole nine million houses!
Bourdain: There’s that scene in The Wire… see, this is the default position for white guys always, quote The Wire—with, where Mayor Carcetti comes to office, the idealistic young man, and the guy comes in and he says, Mr. Mayor, he’s the shit sandwich. And you’re gonna eat it. The guy before you ate it, the guy before him ate it. This is the reality. This is the real situation. Everybody’s been lying to you up till this minute. I’m about to explain to you the truth of the situation you are now facing and the forces opposing you to get anything done. Now eat the shit sandwich. I don’t wanna eat the shit sandwich! You are going to eat the shit sandwich.
Bustillos: This is the thing! We’re all accepting this. It’s like, as long as we keep—
Bourdain: I’m a firm believer in cynical accommodation of uh, the lessening of—compromising one’s principles for the greater good, to a point. Um, but don’t make a living out of it.
Bustillos: There’s a moment where it’s not okay!
Bourdain: Well, for the Clintons it’s a brand. For Obama I genuinely believe he made regretful but calculated decisions, I’m gonna save my ammunition for this, this fucking—
As for President Obama’s photo-op with billionaire Richard Branson right after leaving the White House, Bourdain agreed that it wasn’t a good look.
Bustillos: And I loved him, I had loved him, but like… he fucked us. And he got on the fucking jet ski with Richard Branson right after he got out of the White House and I’m like, dude.
Bourdain: So?
Bustillos: Is that really the first look that you want? You are a guy with a brand. You know that you would not do that if it were you.
Bourdain: No, I wouldn’t.
Bustillos: You would not. Why not.
Um. Cause I’m vain.
Bustillos: [shrieks]
Bourdain: … and I think Richard Branson is kind of a douche. That’s not who I wanna hang out with. You know… time is short.
I… look. I know Obama wants to move to New York. And I know he likes New York restaurants, and he wants to eat in New York restaurants. And if he’s gonna make a few speeches for big money to do that, I’m ok with that. What’s the problem with that? They’re not buying influence at this point.
On the topic of Harvey Weinstein, Bourdain said “as much as I’d like to see him, you know beaten to death in his cell,” that the thought of the disgraced media mogul “in fucking Arizona… eating in restaurants in Arizona” was punishment enough.
And at off the grid restaurants in Arizona, so he can’t even eat at the best sushi restaurant in Scottsdale. He’s gotta go to some shit fucking place. So Arizona, I mean, as much as I’d like to see him, you know beaten to death in his cell—
Bourdain then describes his perfect death scene for Weinstein:
Bustillos: It’s much better to watch horrible people live and suffer the consequences.
Bourdain: My theory of how he goes is uh, he’s brushing his teeth in a bathroom, he’s naked in his famous bathrobe, which is flapping open, he’s holding his cell phone in one hand because you never know who on the Weinstein board has betrayed him recently, and he’s brushing his teeth—he suddenly gets a massive fucking stroke—he stumbles backwards into the bathtub, where he finds himself um, with his robe open feet sticking out of the tub, and in his last moments of consciousness as he scrolls through his contacts list trying to figure out who he can call, who will actually answer the phone.
And he dies that way, knowing that no one will help him and that he is not looking his finest at time of death.
Four months after this interview, Bourdain would take his own life.
In a move to tighten city law, a town in Arkansas has dumped an ordinance often referred to as the “Footloose” law, which sought to prevent illicit dancing on Sundays.
Up until it’s recent revocation, Sec. 14-91 in Fort Smith’s municipal codebook made the operation of public dance halls on a Sunday illegal. The legislation also included non-dance hall establishments that allowed dancing on Sundays. Initially signed into law by Mayor H.R. Hestand in 1953, an emergency clause in the ordinance suggested that Sunday dancing “greatly endangers the public health, safety and welfare.” The law followed the trend of other blue laws, or laws that were put into place to restrict activity on Sundays such as hunting and watching horse racing.
The ordinance drew parallels to Footloose, a musical whose plot is derived from similar dancing prohibitions. While the dancing ban in the musical is rather strict, Fort Smith officials maintained that there is no record of the ordinance being used as the basis for an arrest or fine.
“If you don’t care to dance on Sunday, that’s fine,” reportedly said City Director Andre Good, who headed efforts to repeal the ordinance. “We should all respect that. But let’s not impose some outdated, outmoded morality code on all our fine fellow citizens.”
Good believed that the fight against the dancing ordinance would allow for other unenforced laws to be examination and eventually repeal.
With this in mind, city leaders not only backed Good, but they reconvened a few days later and unanimously agreed to dissolve seven of the 34 commissions, boards, and committees that were believed to be outdated, including the Massard Prairie Civil War Battlefield Park Advisory Commission, the Oak Cemetery Commission, the Outside Agency Review Panel, the Parking Authority, the Residential Housing Facilities Board, the Riverfront Task Force, and the Streets Bridges and Associated Drainage Capital Improvements Plan Advisory Committee.
During this series so far we have primarily discussed the more mechanical issues surrounding “investing myths” over the duration of an individuals investing “life-span.”
Individuals are often told:
“There has never been a 10 or 20-year period in the market with negative returns.”
As we showed previously, such is not exactly correct once you account for inflation.
While “buying and holding” an index will indeed create a positive return over a long enough holding period, such does not equate to achieving financial success. But even if “investing your way to wealth” worked as advertised, then why are the vast majority of Americans so poorly equipped for retirement?
Every three years, the Federal Reserve conducts a study of American finances which exposes the lack of financial wealth for the bottom 90% of households. (Read: The Bottom 90% & The Failure Of Prosperity)
Other survey’s also confirm much of the same. Via Motley Fool:
“Imagine how the 50th percentile of those ages 35 – 44 has a household net worth of just $35,000 – and that figure includes everything they own, any equity in their homes, and their retirement savings to boot.
That’s sad considering those ages 35 and older have had probably been out in the workforce for at least ten years at this point.
And even the 50th percentile of those ages 65+ aren’t doing much better; they’ve got a median net worth of around $171,135, and quite possibly decades of retirement ahead of them.
How do you think that is going to work out?”
Another common misconception is that everyone MUST be saving in their 401k plans through automated contributions. According to Vanguard’s recent survey, not so much.
The average account balance is $103,866 which is skewed by a small number of large accounts.
The median account balance is $26,331
From 2008 through 2017 the average inflation-adjusted gain was just 28%.
So, what happened?
Why aren’t those 401k balances brimming over with wealth?
Why aren’t those personal E*Trade and Schwab accounts bursting at the seams?
Why are so many people over the age of 60 still working?
While we previously covered the impact of market cycles, the importance of limiting losses, the role of starting valuations, and the proper way to think about benchmarking your portfolio, the two biggest factors which lead to chronic investor underperformance over time are:
Lack of capital to invest, and;
Psychological behaviors
Psychological factors account for fully 50% of investor shortfalls in the investing process. It is also difficult to “invest” when the majority of Americans have an inability to “save.”
These factors, as shown by data from Dalbar, lead to the lag in performance between investors and the markets over all time periods.
While “buy and hold” and “dollar cost averaging” sound great in theory, the actual application is an entirely different matter. The lack of capital is an issue which can only be resolved through financial planning and budgeting, however, the simple answer is:
Live on less than you make and invest the rest.
Behavioral biases, however, are an issue which is little understood and accounted for when managing money. Dalbar defined (9) nine of the irrational investment behavioral biases specifically:
Loss Aversion – The fear of loss leads to a withdrawal of capital at the worst possible time. Also known as “panic selling.”
Narrow Framing – Making decisions about on part of the portfolio without considering the effects on the total.
Anchoring – The process of remaining focused on what happened previously and not adapting to a changing market.
Mental Accounting – Separating performance of investments mentally to justify success and failure.
Lack of Diversification – Believing a portfolio is diversified when in fact it is a highly correlated pool of assets.
Herding– Following what everyone else is doing. Leads to “buy high/sell low.”
Regret – Not performing a necessary action due to the regret of a previous failure.
Media Response – The media has a bias to optimism to sell products from advertisers and attract view/readership.
Optimism – Overly optimistic assumptions tend to lead to rather dramatic reversions when met with reality.
George Dvorsky once wrote that:
“The human brain is capable of 1016 processes per second, which makes it far more powerful than any computer currently in existence. But that doesn’t mean our brains don’t have major limitations. The lowly calculator can do math thousands of times better than we can, and our memories are often less than useless — plus, we’re subject to cognitive biases, those annoying glitches in our thinking that cause us to make questionable decisions and reach erroneous conclusions.“
Cognitive biases are an anathema to portfolio management as it impairs our ability to remain emotionally disconnected from our money. As history all too clearly shows, investors always do the “opposite” of what they should when it comes to investing their own money. They “buy high” as the emotion of “greed” overtakes logic and “sell low” as “fear” impairs the decision-making process.
Let’s dig into the top-5 of the most insidious biases which keep us from achieving our long-term investment goals.
1) Confirmation Bias
As individuals, we tend to seek out information that conforms to our current beliefs. For instance if one believes that the stock market is going to rise, they tend to heavily rely on news and information from sources that support that position. Confirmation bias is a primary driver of the psychological investing cycle.
To confront this bias, investors must seek data and research that they may not agree with. Confirming your bias may be comforting, but challenging your bias with different points of view will potentially have two valuable outcomes.
First, it may get you to rethink some key aspects of your bias, which in turn may result in modification, or even a complete change, of your view. Or, it may actually increase the confidence level in your view.
The issue of “confirmation bias” is well known by the media. Since the media profits from “paid advertisers,” viewer or readership is paramount to obtaining those clients. The largest advertisers on many financial sites are primarily Wall Street related firms promoting products or services. These entities profit from selling product they create to individuals, therefore it should be no surprise they advertise on websites that tend to reflect supportive opinions. Given the massive advertising dollars that firms such as Fidelity, J.P. Morgan (JPM), and Goldman Sachs (GS) spend, it leaves little doubt why the more successful websites refrain from presenting views which deter investors from buying related products or services.
As individuals, we want “affirmation” our current thought processes are correct. As human beings, we hate being told we are wrong, so we tend to seek out sources that tell us we are “right.”
This is why it is always important to consider both sides of every debate equally, analyze the data accordingly, and form a balanced conclusion. Being right and making money are not mutually exclusive.
2) Gambler’s Fallacy
The “Gambler’s Fallacy” is one of the biggest issues faced by individuals when investing. As emotionally driven human beings, we tend to put a tremendous amount of weight on previous events believing that future outcomes will somehow be the same.
The bias is clearly addressed at the bottom of every piece of financial literature.
“Past performance is no guarantee of future results.”
However, despite that statement being plastered everywhere in the financial universe, individuals consistently dismiss the warning and focus on past returns expecting similar results in the future.
Performance chasing has a high propensity to fail continually causing investors to jump from one late cycle strategy to the next. This is shown in the periodic table of returns below. “Hot hands” only tend to last on average 2-3 years before going “cold.”
We traced out the returns of the S&P 500 and the Barclay’s Aggregate Bond Index for illustrative purposes. Importantly, you should notice that whatever is at the top of the list in some years tends to fall to the bottom of the list in subsequent years.“Performance chasing” is a major detraction from an investor’s long-term investment returns.
Of course, it also suggests that analyzing last year’s losers, which would make you a contrarian, has often yielded higher returns in the near future.
3) Probability Neglect
When it comes to “risk taking” there are two ways to assess the potential outcome. There are “possibilities” and “probabilities.”As individuals, we tend to lean toward what is possible such as playing the “lottery.” The statistical probabilities of winning the lottery are astronomical, in fact, you are more likely to die on the way to purchase the ticket than actually winning it. However, it is this infinitesimal “possibility” of being fabulously wealthy that makes the lottery so successful. Las Vegas exists for one reason; amateur gamblers favor possibility over probability.
As investors, we tend to neglect the “probabilities,” or specifically the statistical measure of “risk” undertaken, with any given investment. Our bias is to “chase” stocks that have already shown the biggest increase in price as it is “possible” they could move even higher. However, the “probability” is by the time the masses have come to discover the opportunity, most of the gains have likely already been garnered.
“Probability Neglect” is the very essence of the “buy high, sell low”syndrome.
Robert Rubin, former Secretary of the Treasury, once stated;
“As I think back over the years, I have been guided by four principles for decision making. First, the only certainty is that there is no certainty. Second, every decision, as a consequence, is a matter of weighing probabilities. Third, despite uncertainty, we must decide and we must act. And lastly, we need to judge decisions not only on the results, but on how they were made.
Most people are in denial about uncertainty. They assume they’re lucky, and that the unpredictable can be reliably forecasted. This keeps business brisk for palm readers, psychics, and stockbrokers, but it’s a terrible way to deal with uncertainty. If there are no absolutes, then all decisions become matters of judging the probability of different outcomes, and the costs and benefits of each. Then, on that basis, you can make a good decision.”
4) Herd Bias
Maybe the best way to show how susceptible we are to follow the crowd is by watching this video from Candid Camera.
Though we are often unconscious of the action, humans tend to “go with the crowd.” Much of this behavior relates back to “confirmation” of our decisions but also the need for acceptance. The thought process is rooted in the belief that if “everyone else” is doing something, and if I want to be accepted, then I need to do it also.
In life, “conforming” to the norm is socially accepted and in many ways expected. However, in the financial markets, the “herding” behavior is what drives markets to extremes.
As Howard Marks once stated:
“Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine to make it difficult; including natural herd tendencies and the pain imposed by being out of step, since momentum invariably makes pro-cyclical actions look correct for a while. (That’s why it’s essential to remember that ‘being too far ahead of your time is indistinguishable from being wrong.’
Given the uncertain nature of the future, and thus the difficulty of being confident your position is the right one – especially as price moves against you – it’s challenging to be a lonely contrarian.”
Moving against the “herd” is where the most profits are generated by investors in the long term. The difficulty for most individuals, unfortunately, is not necessarily knowing when to “bet” against the stampede but the psychologically debilitating action of being different. As they say, “it is lonely at the top.”
5) Anchoring Effect
This is also known as a “relativity trap” which is the tendency to compare our current situation within the scope of our own limited experiences. For example, I would be willing to bet that you could tell me exactly what you paid for your first home and what you eventually sold it for. However, can you tell me what exactly what you paid for your first bar of soap, your first hamburger, or your first pair of shoes? Probably not.
The reason is that the purchase of the home was a major “life” event. Therefore, we attach particular significance to that event and remember it vividly. If there was a gain between the purchase and sale price of the home, it was a positive event and, therefore, we are likely to assume that the next home purchase will have a similar result. When we becomementally “anchored” to an event we tend to base our future decisions around it.
When it comes to investing we do very much the same thing. If we buy a stock and it goes up, we remember that stock and that outcome. Therefore, we become anchored to that stock. Individuals tend to “shun” stocks which lost value even though the individual simply bought and sold at the wrong times. After all, it is not “our” fault an investment lost money; it was just a bad company. Right?
This “anchoring” effect also contributes to performance chasing over time. If you made money with ABC stock but lost money on DEF, then you “anchor” on ABC and keep buying it as it rises. When the stock begins its inevitable “reversion,” investors remain “anchored” on past performance until the “pain of ownership” exceeds their emotional threshold. It is then they tend to panic “sell” and now become “anchored” to a negative experience and never buy shares of ABC again. Worse, DEF, despite your past experience owning it, may present great value at reduced prices, but your previous negative experience reduces your inclination to purchase it.
Conclusion
In the end, we are just human. Despite the best of our intentions, it is nearly impossible for an individual to be devoid of the emotional biases that inevitably lead to poor investment decision making over time. This is why all great investors have strict investment disciplines that they follow to reduce the impact of human emotions.
Take a step back from the media, and Wall Street commentary, for a moment and make an honest assessment of the financial markets today. Are valuations at levels that have previously lead to higher rates of future returns? Are interest rates rising or falling? Are individuals currently assessing the “possibilities” or the “probabilities” in the markets?
As individuals, we invest our hard earned “savings” into a “speculative”environment where we are “betting” on a future outcome. The reality is the majority of individuals are ill-prepared for an impact event to occur. This is particularly the case in late-stage bull market cycles where complacency runs high.
The discussion of why “this time is not like the last time” is largely irrelevant. Whatever gains investors garner in the first-half of an investment cycle by chasing the “bullish thesis” will be almost entirely wiped out during the second-half. Of course, this is the sad history of individual investors in the financial markets as they a
Vladimir Putin made a bombshell claim during Monday’s joint press conference with President Trump in Helsinki, Finland, when the Russian President said some $400 million in illegally earned profits was funneled to the Clinton campaign by associates of American-born British financier Bill Browder – at one time the largest foreign portfolio investors in Russia. The scheme involved members of the U.S. intelligence community, said Putin, who he said “accompanied and guided these transactions.”
Browder made billions in Russia during the 90’s. In December, a Moscow court sentenced Browder in absentia to nine years in prison for tax fraud, while he was also found guilty of tax evasion in a separate 2013 case. Putin accused Browder’s associates of illegally earning over than $1.5 billion without paying Russian taxes, before sending $400 million to Clinton.
After offering to allow special counsel Robert Mueller’s team to come to Russia for their investigation – as long as there was a reciprocal arrangement for Russian intelligence to investigate in the U.S., Putin said this:
For instance, we can bring up Mr. Browder, in this particular case. Business associates of Mr. Browder have earned over $1.5 billion in Russia and never paid any taxes neither in Russia or the United States and yet the money escaped the country. They were transferred to the United States. They sent [a] huge amount of money, $400,000,000, as a contribution to the campaign of Hillary Clinton. Well that’s their personal case.
It might have been legal, the contribution itself but the way the money was earned was illegal. So we have solid reason to believe that some [US] intelligence officers accompanied and guided these transactions. So we have an interest in questioning them.
— The Columbia Bugle 🇺🇸 (@ColumbiaBugle) July 16, 2018
We would expect Putin to show some receipts for such bombshell allegations, while President Trump did not challenge the claims.
Who is Bill Browder?
Clueless American media in Helsinki might want to watch Andrey Nekrasov’s “Magnitsky Act: Behind The Scenes” on how fraudster and US defector Bill Browder played Congress with his personal fortune and helped ignite a new Cold War. Browder got screening cancelled in EU parliament. https://t.co/tmTyB2N8Kk
Israel Shamir, a keen observer of the American-Russian relationship, and celebrated American journalist Robert Parryboth think that one man deserves much of the credit for the new Cold War and that man is William Browder, a hedge fund operator who made his fortune in the corrupt 1990s world of Russian commodities trading.
Browder is also symptomatic of why the United States government is so poorly informed about international developments as he is the source of much of the Congressional “expert testimony” contributing to the current impasse. He has somehow emerged as a trusted source in spite of the fact that he has self-interest in cultivating a certain outcome. Also ignored is his renunciation of American citizenship in 1998, reportedly to avoid taxes. He is now a British citizen.
Browder is notoriously the man behind the 2012 Magnitsky Act, which exploited Congressional willingness to demonize Russia and has done so much to poison relations between Washington and Moscow. The Act sanctioned individual Russian officials, which Moscow has rightly seen as unwarranted interference in the operation of its judicial system.
Browder, a media favorite who self-promotes as “Putin’s enemy #1,” portrays himself as a selfless human rights advocate, but is he? He has used his fortune to threaten lawsuits for anyone who challenges his version of events, effectively silencing many critics. He claims that his accountant Sergei Magnitsky was a crusading “lawyer” who discovered a $230 million tax-fraud scheme that involved the Browder business interest Hermitage Capital but was, in fact, engineered by corrupt Russian police officers who arrested Magnitsky and enabled his death in a Russian jail.
Many have been skeptical of the Browder narrative, suspecting that the fraud was in fact concocted by Browder and his accountant Magnitsky. A Russian court recently supported that alternative narrative, ruling in late December that Browder had deliberately bankrupted his company and engaged in tax evasion. He was sentenced to nine years prison in absentia.
William Browder is again in the news recently in connection with testimony related to Russiagate. On December 16th Senator Diane Feinstein of the Senate Judiciary Committee released the transcript of the testimony provided by Glenn Simpson, founder of Fusion GPS. According to James Carden,Browder was mentioned 50 times, but the repeated citations apparently did not merit inclusion in media coverage of the story by the New York Times, Washington Post and Politico.
Fusion GPS, which was involved in the research producing the Steele Dossier used to discredit Donald Trump, was also retained to provide investigative services relating to a lawsuit in New York City involving a Russian company called Prevezon. As information provided by Browder was the basis of the lawsuit, his company and business practices while in Russia became part of the investigation. Simmons maintained that Browder proved to be somewhat evasive and his accounts of his activities were inconsistent. He claimed never to visit the United States and not own property or do business there, all of which were untrue, to include his ownership through a shell company of a $10 million house in Aspen Colorado. He repeatedly ran away, literally, from attempts to subpoena him so he would have to testify under oath.
Per Simmons, in Russia, Browder used shell companies locally and also worldwide to avoid taxes and conceal ownership, suggesting that he was likely one of many corrupt businessmen operating in what was a wild west business environment.
My question is, “Why was such a man granted credibility and allowed a free run to poison the vitally important US-Russia relationship?” The answer might be follow the money. Israel Shamir reports that Browder was a major contributor to Senator Ben Cardin of Maryland, who was the major force behind the Magnitsky Act.
So, former FBI lawyer Lisa Page declined to testify before a congressional committee because she didn’t feel like it. Apparently we’re now a rule-of-law-optional nation. Until recently, we were merely reality-optional. That was fun, but when officers of the country’s leading law enforcement agency go optional on standard legal procedure, like answering subpoenas, then we’re truly in the land where anything goes (and nothing matters).
After two years of Trump-inspired hysteria, it’s pretty obvious what went on in the bungled Obama-Hillary power handoff of 2016 and afterward: the indictable shenanigans of candidate Hillary and her captive DNC prompted a campaign of agit-prop by the US Intel “community” to gaslight the public with a Russian meddling story that morphed uncontrollably into a crusade to make it impossible for Mr. Trump to govern.
And what’s followed for many months is an equally bungled effort to conceal, deceive, and confuse the issues in the case by Democratic Party partisans still in high places. It was very likely begun with the tacit knowledge of President Obama, though he remained protected by a shield of plausible deniability. And it was carried out by high-ranking officials who turned out to be shockingly unprofessional, and whose activities have been disclosed through an electronic data evidence trail.
Mr. Trump’s visit to confer with Russian President Putin in Helsinki seems to have provoked a kind of last-gasp effort to keep the increasingly idiotic Russian election meddling story alive – with Robert Mueller’s ballyhooed indictment of twelve “Russian intel agents” alleged to have “hacked” emails and computer files of the DNC and Hillary’s campaign chairman John Podesta. The gaping holes in that part of the tale have long been unearthed so I’ll summarize as briefly as possible:
1) the bandwidth required to transfer the files has been proven to be greater than an internet hack might have conceivably managed in the time allowed and points rather to a direct download into a flash drive device.
2) the DNC computer hard drives, said to be the source of the alleged hacking, disappeared while in the custody of the US Intel Community (including the FBI).
3) the authenticity of the purloined emails by Mr. Podesta and others has never been disputed, and they revealed a lot of potentially criminal behavior by them.
4) Mr. Mueller must know he will never get twelve Russian intel agents into a US courtroom, so the entire exercise is a joke and a fraud. In effect, he’s indicted twelve ham sandwiches with Russian dressing.
Tragically, the American public is led to take this ploy seriously by a morally compromised news media, especially CNN and the The New York Times. The latter outfit is so afflicted with a case of the Russian meddling vapors that it ran this laughable headline at the top of its front page yesterday: “Just Sitting Down With Trump, Putin Comes Out Ahead.” Gosh, what’s the message there? Don’t even bother talking to foreign heads of state, especially in the interest of improving relations?
The salient question that persons in authority might ask out-loud is how come so many officers of the Intel Community have not been hauled in front of grand juries to answer for their obviously incriminating behavior. Mr Mueller is perhaps too busy chasing Russian phantoms to draw up a bill of particulars against characters such as former CIA chief (now CNN shill) John Brennan, who apparently orchestrated the early chapters of the Russian meddling ruse, Bruce and Nellie Ohr, who ushered the DNC’s Steele Dossier into the FBI’s warrant machinery, fired FBI Deputy Director Andrew McCabe, who managed the Steele Dossier and its spinoff mischief as an “insurance policy” against Mr. Trump, Peter Strzok, who executed the “insurance policy,” and, of course, Ms. Page, his paramour, who decided that testifying before Congress was beneath her dignity. These and probably many others.
Tragically, also, these matters can only be fully corrected by the very Department of Justice that includes under its management the rogue FBI. Who else can formally and legally bring these cases before grand juries? The DOJ appears intent on preventing that from ever happening. Congress has so far omitted enforcing its subpoenas or using its impeachment power to dislodge obdurate DOJ officials. Mr. Trump, for now apparently, has declined to use his inherent executive powers to clean out this rats nest, say by removing secrecy shields from many of the documents at issue in the DOJ’s possession – most likely because he can’t afford to be seen “meddling” in the tangled proceedings.
The net result of all this subterfuge, inaction, and gaslighting, is the defeat of the rule-of-law generally in American life. This ought to be taken seriously. If it’s asking too much of the system, then the system itself will eventually not be taken seriously, and that will be the end of the republic as we knew it.
Amazon’s website was hit with massive technical glitches as its annual shopping holiday kicked off on Monday – jeopardizing an expected $3.4 billion sales haul over the 36-hour “Prime Day” sale.
Trouble began at around 3 p.m. Eastern time according to Downdetector.com.
Shares of Amazon began accelerating downward after the glitch, only to recover off the lows of $1,814 to close positive.
Several users were taken to the “dogs of Amazon” error page and were unable to enter the site, while others were caught in browser loops that urged them to “Shop all deals,” according to CNBC.
Prime Day was projected to break records again this year, surpassing even the “tens of millions” of Prime members who shopped the discounts last year. Wall Street expected higher sales and a higher share price for Amazon as a result.
Amazon’s e-commerce sales in the U.S. are meanwhile expected to reach a staggering $258.2 billion this year, up nearly 30 percent from a year ago, according to a new survey from eMarketer that looks at the company’s sales by product category.
That means Amazon is expected to capture nearly half of the U.S. e-commerce market by the end of 2018, eMarketer said. The company ended 2017 with about 44 percent of the market. -CNBC
Industry analysts were projecting a haul of at least $3.4 billion for the 36-hour sale – over 40% higher than last year according to Coresight Research, however Monday’s outage may put a damper on the final figure.
Shoppers were miffed, though at least one person appreciated the dogs:
The @amazon glitch for #PrimeDay has me as nervous as a long tailed cat in a room full of rocking chairs. I wanna buy some crap!
Also whoever came up with this brilliant idea at @amazon deserves a huge bonus…who can be upset with a website glitch during a sale when you get to see dogs 😍
Sinclair Broadcast Group’s proposed acquisition of Tribune Media might not happen after Federal Communications Committee (FCC) Chairman Ajit Pai said today he has “serious concerns” about the $3.9 billion deal.
Sinclair, which owns or operates more than 190 local TV stations across the U.S., is looking to control Tribune’s 42 stations, including those in big cities like New York and Chicago. In order to comply with government regulations preventing one company from owning more than one station in the same market, Sinclair has said it would sell at least 20 of its existing stations.
But Pai said in a statement he’s not convinced Sinclair would be giving up control of those stations. “Based on a thorough review of the record, I have serious concerns about the Sinclair/Tribune transaction,” he said. “The evidence we’ve received suggests that certain station divestitures that have been proposed to the FCC would allow Sinclair to control those stations in practice, even if not in name, in violation of the law.” As a result, Pai said he has shared a draft order with his fellow FCC commissioners designating those issues “for a hearing in front of an administrative law judge.”
Pai did not make the draft order public, but Politicoreports the FCC is worried about the close ties some of the proposed buyers have to Sinclair.
FCC officials said one problematic deal was the plan to sell Chicago station WGN to Steven Fader, a Maryland business associate of Sinclair Executive Chairman David Smith who oversees car dealerships. Others that raised alarm were the deals to sell stations in Dallas and Houston to Cunningham Broadcasting, a company with close ties to the Smith family.
Though Pai’s statement doesn’t officially kill the Sinclair-Tribune merger, the future of the proposal is in serious jeopardy, says Marci Ryvicker, a senior analyst with Wells Fargo Securities. “It sounds like the [administrative law judge] is being asked to review just the divestiture stations, but our legal contacts suggest there could be full review of the entire transaction,” Ryvicker wrote in a research note on Monday, according toThe Baltimore Sun. He added that though there’s chance Sinclair could work to get the merger approved, “our legal contacts believe Pai went far enough to suggest the deal is at more serious risk.” And as noted by The Hill, a similar move in 2011 by then-FCC Chairman Julius Genachowski effectively killed a proposed merger between AT&T and T-Mobile.
Pai’s announcement was particularly surprising given the fact that last August, the FCC seemingly made it easier for Sinclair to complete the merger. The agency reinstated an old provision that would have allowed Sinclair to buy Tribune without surpassing the “congressionally imposed nationwide audience cap of 39 percent,” according toPolitico.
While the media focused on bashing President Trump for purportedly supporting Russian President Vladimir Putin when he said Russia never interfered in the US election over the findings of his own intelligence agencies, prosecutors in Washington were busy charging yet another Russian national with attempting to tamper in the 2016 race.
Maria Butina, 29, was arrested Sunday in DC and charged in federal court with conspiring to act as an agent of the Russian Federation. She was ordered held without bond, according to the Washington Post.
Butina had testified before the Senate Intelligence Committee during a closed-door session months ago, the New York Times reported.
Her attorney, Robert Neil Driscoll, told the judge that Butina’s residence had been searched by the FBI in April, and that “we have been offering to cooperate with the government the entire time.”
Specifically, Burina was accused of trying to set up back channels between Russia and US politicians, including then-candidate Trump.
The Justice Department said in court documents that the woman, Mariia Butina, worked to establish “back channel” lines of communication with American politicians. “These lines could be used by the Russian Federation to penetrate the U.S. national decision-making apparatus to advance the agenda of the Russian Federation.”
Ms. Butina, whose first name is more commonly spelled Maria, twice tried to set up a meetings between Mr. Trump and Mr. Putin in 2016. The charges announced Monday do not name Mr. Trump but they make clear that Ms. Butina’s overtures were part of a Russian intelligence operation.
Interestingly, the charges against Butina were filed by national security prosecutors, not Special Counsel Robert Mueller, whose “Witch Hunt” investigation was roundly criticized by Putin and Trump on Monday. We imagine it won’t take long for the mainstream press to tie Butina to Trump,regardless of how tenuous the links between them actually are.
In a move to tighten city law, a town in Arkansas has dumped an ordinance often referred to as the “Footloose” law, which sought to prevent illicit dancing on Sundays.
Sinclair Broadcast Group’s proposed acquisition of Tribune Media might not happen after Federal Communications Committee (FCC) Chairman Ajit Pai said today he has “serious concerns” about the $3.9 billion deal.