Jim Quinn: The Only Thing ‘Systematic’ Is The Destruction Of America

Jim Quinn: The Only Thing ‘Systematic’ Is The Destruction Of America

Tyler Durden

Tue, 09/29/2020 – 16:20

Authored by Jim Quinn via The Burning Platform blog,

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”

– Upton Sinclair

Upton Sinclair was describing willful ignorance based upon who butters your bread. The rampant corruption of our society, as power has been consolidated into fewer and fewer hands, has resulted in our political, financial, cultural and economic systems being captured by a billionaire class who use their wealth to dictate the path we are forced to follow – or lose everything.

The sociopath class include the Silicon Valley social media titans, the billionaires running the six mainstream media companies, the rogue billionaires like Soros and Bloomberg who fund chaos and foment insurrection, the Deep State surveillance agency operatives like Clapper, Brennan, Comey and Mueller doing the bidding of the oligarchy, Wall Street criminals like Dimon, Paulson, and Blankfein doing god’s work, and last but certainly not least – Powell, Yellen, Bernanke and slimy Kashkari priming the pump for the never ending systematic pillaging of the nation’s wealth.

When you witness what passes for legislators at the Federal, State and Local levels, you must weep for our future. These pathetic excuses for leaders display none of the qualities a citizenry would want in those they have elected to manage our governmental affairs. They are bought off hacks, lacking any intellectual honesty, and selling their votes to the highest bidder. They lie, misinform, steal, and do the bidding of the monied interests who selected them because they are pliable dupes without an ounce of courage or forethought about the long-term best interests of the people they are supposed to be representing.

We are far from the republic Franklin and his fellow patriots gave us, and as Franklin foreshadowed, we were unable to keep it. As the fledgling republic devolved into a mob democracy, with the Federal government grabbing more power during the Civil War, the banking cabal seizing control of the nation’s finances in 1913 with the creation from Jekyll Island, the growth of the welfare state with FDR and LBJ doing the most damage, the metastasis of the military industrial complex, the elimination of privacy after the Patriot Act surveillance state execution, and now the final countdown to Armageddon as the state, media conglomerates, Wall Street criminals, mega-corporations, and billionaire oligarchs use this purposefully over-hyped flu pandemic to consolidate their power, wealth and control over a dumbed down, iGadget addicted, fearful, easily manipulated, compliant populace.

Most people go through life not questioning the motivations of their political, financial, economic and religious leaders. They naively believe they have achieved their positions of power because they have earned it through hard work, intellectual superiority, and moral authority. Most people are not sociopaths. They are just trying to steer around the potholes of life, raising families, earning a living, finding some enjoyment, leaving a positive legacy and trusting those in positions of power are looking out for their best interests.

They are wrapped up in their day to day existence, so are not vigilant in monitoring what political, financial and corporate power players are plotting to further reduce their liberties, freedom, and bank accounts. After decades of government school social indoctrination dumbing down of the masses, relentless propaganda propagated by the corporate media mouthpieces of the Deep State, endless technological and sports distractions, and being lured into crushing levels of debt by Wall Street and Madison Avenue, the masses are incapable of critically assessing how they have been systematically screwed by the ruling class.

Even with the self-imposed economic depression initiated by politicians, at the behest of captured self-proclaimed medical “experts” and college drop-out techno-geek billionaires (Bill Gates), resulting in tens of millions (mostly blue collar and service industry workers) being put out of work, there are still 147 million employed Americans. That’s up 14 million from the April pandemic low, but to provide some perspective, it’s at virtually the same level as late 2007 just before the Wall Street/Fed created financial collapse.

Considering there are 260 million working age Americans in the country, with 26 million employed part time, 9 million self-employed and 21 million government workers paid for by the 91 million full-time wage earners, you understand why wage earners can be intimidated into “not understanding something” because their livelihood depends upon them pretending to not understand the truth.

The propaganda phrase “we’re in this together” is another Orwellian doublespeak example, as there are 10.7 million less private industry workers than a year ago, but the number of government workers is amazingly up by almost 200,000. So much for sharing the pain. The other dichotomy is between college graduate white collar workers who can work from home and the mostly low paid service industry workers who “serve” the white-collar workers. The number of college graduate workers is up by 1 million in the last year versus down 9.3 million for all other workers. These pandemic lockdowns have devastated the job prospects of blacks, teenagers, and anyone working in the hospitality industry. We are not in this together.

The Federal Reserve actions have only benefited their Wall Street constituents and the .1% who own most of the financial assets in this country. The poor, blue collar workers, waitresses, bartenders, savers, and senior citizens (who avoided being sentenced to death in nursing homes by Cuomo and his fellow Democrat governors) have been thrown under the bus once again. The rich get richer and the poor are thrown a $600 bone and told to obey and stay like a good dog.

The Sinclair quote is even more apt in relation to the latest narrative being used by the powers that be to divide us and create chaos. The false story line of “systematic racism” is being used as a cudgel to beat us into submission and compliance. The only thing systematic is the organized and well-funded traitorous endeavor by Soros and his ilk to undermine the basic moral tenets of our society in order to institute a Marxist new world order in the U.S., Europe, Australia, New Zealand, and eventually the entire world.

They want to destroy our past by tearing down statues and promoting fake history like the NYT promoted 1619 Project. They publicize and promote division and racial strife by publicizing the few murders of blacks by whites, while ignoring the daily slaughter of blacks by other blacks in Chicago, Baltimore, Philadelphia and the other Democrat run urban ghetto kill zones. The lawlessness and savagery in black inner cities with black on black crime is ignored by the left-wing politicians who run these cities and their media mouthpieces. There is clearly something systemic about what has happened, but it’s not due to systemic racism.

The term ‘systemic’ has been in vogue lately because the propagandized narrative since a black felon dying of a fentanyl overdose was videotaped being kneeled upon by a white cop with a history of abusing citizens has been “systemic racism” is the single most important problem in America, keeping black people from getting ahead and resulting in them fearing for their lives, as cops and white people target them because they’re black. Once the narrative was unleashed, the leftist mainstream media carried the ball with a misinformation campaign, and the domestic terrorist organizations BLM and ANTIFA were funded with millions of dollars from Soros and other leftist billionaires to riot, loot, burn and destroy cities across America in the name of racial justice.

Corporate America latched onto the narrative, along with sports leagues, Hollywood elites, and every virtue signaling toady in America. Anyone questioning the narrative with facts is cancelled, attacked and destroyed by the mob of willfully ignorant lemmings. A white person’s salary now depends upon them apologizing for being white and kneeling before BLM and begging for mercy because they are systematically racist.

The dictionary definition of systematic is:

done or acting according to a fixed plan or system; methodical in procedure or plan; presented or formulated as a coherent body of ideas or principles.

The “systematic racism” narrative has absolutely no factual basis. Are there racists in our society? Sure. There are white racists, black racists, Latino racists, and Asian racists. Harvard, Yale and other elite Ivy League institutions have been cited by Federal authorities for racist policies against Asians and whites.

If systematic racism is keeping blacks from succeeding why are there numerous examples of whites pretending to be minorities (Pocahontas Warren, Jessica Krug, Rachel Dolezal, Shaun King) in order to get an advantage in their career advancement?

Since the implementation of LBJ’s Great Society, trillions of taxpayer funds have been spent to boost the lives of black America, with a phenomenally detrimental impact on their lives. The creation of the welfare state has enslaved the black community in dependence and squalor. Incentivizing out of wedlock children has resulted in over 70% of all black children being raised in fatherless households.

Even though urban school districts spend $12,000 to $16,000 per student, the majority of blacks are matriculated into society unable to add, subtract, spell or speak the English language. Their urban enclaves are drug infested homicide zones, with young fatherless black men killing each other at an astounding rate. Chicago has at least 50 shootings every weekend, with nary a white shooter. It seems black lives don’t matter to other blacks. But, when a black rapist is shot by police while reaching for a knife, the BLM and ANTIFA terrorists use it as an excuse to loot, riot, kill white Trump supporters, kill cops, and generally act like savages.

This entire contrived fairy tale shows all the signs of being systematic, but the methodical plan being implemented has nothing to do with racism or justice. The Davos elitist lords have been emboldened by their success since 9/11, as they have utilized every crisis as an opportunity to further their agenda of consolidating power, wealth, and control over the plebs.

This pandemic “crisis” is being used as an opportunity to reset the world in a manner most beneficial for the Davos billionaires, by exploiting pandemic fear, engineered social chaos, a fake climate crisis and economic anxiety to implement a corporate fascist world order, disguised as a green new deal, MMT, socialist paradise. The apparently incomprehensible actions of left wing politicians, DA’s, the corporate media, surveillance state bad actors, compliant central bankers, and emboldened billionaires over the last few months begin to make sense when you realize it is part of the plan.

As we have learned over the last decade, conspiracy theorists have been proven right, time after time, as a coup against a duly elected president has been revealed through texts and incriminating documents; Snowden and Assange revealed the illegal surveillance program conducted by unaccountable spy agencies; JP Morgan and other criminal banks have admitted to rigging precious metals, bond and stock markets; Soros has funneled tens of millions to elect far left District Attorneys who refuse to enforce the law and prosecute violent criminals; a captured left wing judge attempts to prosecute an innocent man who was setup by Obama’s FBI hacks; and Bloomberg is using his billions to buy the votes of tens of thousands of black and Hispanic ex-convicts in Florida to steal the presidential election.

The selection of a senile handsy blunder zombie as a presidential candidate is clearly a Trojan horse to install Kamala Harris (who had 2% popularity among Democrats) as the evil conduit to inflict the Davos master plan upon our country.

“Reason is poor propaganda when opposed by the yammering, unceasing lies of shrewd and evil and self-serving men.”

– Robert A. Heinlein

I consider myself a rational fact-based person who tries to seek the truth and live my life in a manner that would make my deceased dad and my children proud. My negligible efforts, over the last twelve years, to try and expose the lies and corruption of those wielding power over our lives seems like a drop in this ocean of deceit. My message is only able to reach the few who want to know the truth, while the unceasing propaganda and lies of powerful evil men is broadcast to the masses through mainstream and social media conglomerates to manipulate their emotions and lead them on a path to destruction.

This bad flu outbreak has been seized upon by the shrewd, evil, self-serving men who rule the world to test their universal basic income scheme, pushing green new deal idiocy, consolidating commerce and profits into fewer mega-corporations, waging a war on the white middle class, tyrannically imposing job crushing government lockdown mandates, and dehumanizing the populace by forcing mask compliance in order to gain admittance to places of business.

In Part 2 of this article I will demolish the mask narrative, describe the systematic destruction of small businesses, enlighten you about the true purpose of the Federal Reserve, and try to make sense of what might happen as the climax of this Fourth Turning rapidly descends upon an unprepared nation.

*  *  *

The corrupt establishment will do anything to suppress sites like the Burning Platform from revealing the truth. The corporate media does this by demonetizing sites like mine by blackballing the site from advertising revenue. If you get value from this site, please keep it running with a donation.

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Bonds & Bullion Bid As Stocks & Dollar Skid

Bonds & Bullion Bid As Stocks & Dollar Skid

Tyler Durden

Tue, 09/29/2020 – 16:00

COVID concerns (NFL cases and NYC positivity rates), a lack of stimulus progression, and the uncertainty ahead of tonight’s presidential debate weighed on stocks and the dollar, but sparked a safe-haven bid under bonds and precious metals…

The machines tried as usual to get back to even but with no lasting luck (weakness into Asia close and European close and US close…

And the 50DMAs were tested and rejected…

“Where’s my money!”

Gold futures topped $1900…

Gold bounced off its 100DMA…

Source: Bloomberg

As Real yields tumbled, precious metals were bid…

Source: Bloomberg

Election uncertainty continued to surge…

Source: Bloomberg

With the VIX curve notably perturbed…

Source: Bloomberg

The dollar leaked lower again today…

Source: Bloomberg

Bonds were bid very modestly on the day with 10Y Yields back to A 63bps handle…

Source: Bloomberg

Cryptos were lower on the day…

Source: Bloomberg

Silver futures back above $24…

Which pushed the Gold/Silver ratio back below 80x…

Source: Bloomberg

Finally, as Bloomberg notes, oil trading is grinding to a halt with the market concerned about the coronavirus pandemic’s impact on demand and supply cuts from OPEC+ producers.

Source: Bloomberg

And as the month comes to an end, we note that the USDollar is outperforming gold in September by the most since Trump was elected…

Source: Bloomberg

Still, it’s probably best not to get too excited. Year to date, “in terms of gold, the dollar is declining over 20%,” said Bloomberg Intelligence’s Mike McGlone. “I see the metal building a base around $1,800 and resuming the rally above $2,000.”

Source: Bloomberg

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Gov Cuomo Threatens To Send In National Guard To Pick Up Trash As NYC Garbage Crisis Worsens

Gov Cuomo Threatens To Send In National Guard To Pick Up Trash As NYC Garbage Crisis Worsens

Tyler Durden

Tue, 09/29/2020 – 15:45

Offering perhaps the clearest indication yet of his priorities as a Democratic governor of one of the most liberal states in the country, NY Gov. Andrew Cuomo just suggested Tuesday that he might send in the national guard to help pick up trash around the city, infuriating critics who questioned his eagerness to send in the National Guard to act as glorified garbagemen, despite his unwillingness to deploy them during the unrest that followed the killing of George Floyd.

During the lockdown and the months that followed, trash has piled up on some NYC sidewalks. While kvetching about the growing trash pileup, the governor complained that he didn’t know “what was going on” in NYC – which is run by his political rival, Mayor Bill de Blasio –  and claimed that he had offered to send in the National Guard to come pick up the garbage if the city couldn’t handle the job.

Complaints about negligent trash pickup have piled up alongside the mountains of garbage, largely thanks to a $106 million cut to the budget of the city’s Department of Sanitation. Complaints about trash piling up in city parks have doubled since last summer, according to Patch.com.

City politicians have demanded the mayor address the problem, which primarily impacts low-income neighborhoods, officials have argued.

If the “New York City Department of Sanitation and their resources can’t do it for one reason or another,” the national guard will be sent in, Cuomo claimed. Cuomo made the remarks during a presentation devoted to his “New York City Stabilization and Recovery Strategy,” where the governor outlined ideas on how to improve everything from schools to the city’s homelessness crisis.

“This is a public health pandemic — cleanliness matters,” Cuomo insisted. the trash comment wasn’t the only dig at de Blasio.

Many NYers would probably agree.

However, some on Twitter took issue with the governor’s remarks, claiming the National Guard shouldn’t be co-opted for something like picking up the trash left behind by the Department of Sanitation.

Cuomo’s presentation comes as NYC’s new COVID-19 hotspots have pushed its positive test rate to its highest level in months.

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Which Drugs Should Biden Take Pre-Debate?

Which Drugs Should Biden Take Pre-Debate?

Tyler Durden

Tue, 09/29/2020 – 15:25

Authored by ‘Cockburn’ via The Spectator,

With the first presidential debate now just hours away, President Trump continues to insist that Joe Biden take a drug test. Trump’s none-too-subtle insinuation is that the former vice president is so mentally frail that he cannot hope to match the vaulting intellect of the 45th president of the United States on the debate stage.

It’s a peculiar form of Trumpian baiting – something the President has probably learned from the world of Mixed Martial Arts – or perhaps the product of a guilty conscience. Trump himself famously sniffed his way through his first debate with Hillary Clinton four years ago, and there’s been plenty of speculation over the years that the President consumes medicinal substances to combat some form of attention-deficit disorder.

Cockburn won’t weigh in on the specifics. But if Biden were to use drugs for tonight’s performance, which ones should he take? Because make no mistake, Biden should absolutely be taking drugs prior to Tuesday’s debate.

Pro athletes all take performance enhancing drugs, after all, and winning a presidential election is at least as important as hitting 40 home runs or making the Pro Bowl, or something.

Fortunately, Cockburn is a writer, which means he has countless friends who are perpetually in one sort of drug-induced haze or another. They quickly supplied suggestions.

1. Aricept

Aricept is used to enhance mental acuity in patients suffering from Alzheimer’s or vascular dementia. That will certainly be handy for keeping Biden from drooling on the podium. However, Aricept also has the side effect of increasing libido, and has been found to correlate with inappropriate sexual behaviors in those who take it.

did putin tell biden to sniff every woman he comes across pic.twitter.com/lfk0UqznTm

— Elon Mollusk (@minvskv) May 5, 2020

…actually, Biden may have been taking this drug for a long time.

2. Fentanyl

This may seem like an odd choice. Fentanyl causes mood swings, irritation and heart failure — and the last thing Joe Biden needs is to fall asleep on stage. It would be an interesting statement in favor of globalization, however, since most Fentanyl is synthesized by our friends in China. And what better way for Biden to exhibit his legendary ‘empathy’ than by showing America’s opioid addicts that he knows what it’s like?

3. Ecstasy

Arriving Tuesday night amped on MDMA would offer a host of benefits to Biden. Besides keeping him cheerful and upbeat for the cameras, if Biden is caught, he can easily pivot in a positive direction: by taking a party drug, he will disavow one of his tough-on-crime achievements, the 2003 RAVE Act. Cockburn doesn’t understand how contributing to the dramatic collapse of crime rates nationwide is a bad thing, but in 2020 everybody is convinced that it is. Biden debating while hopped upon Molly would go a long way toward showing his remorse. ‘Loved-up’, Biden would also show a winning spirit of magnanimity towards Donald Trump, which might help sway independents.

Finally, for years Biden was known as the ‘senator from MBNA’ due to his pro-credit card activism in Congress. If he rebrands as the senator on MDMA, at the least everyone will be really confused.

4. Steroids

It’s not well-known, but then-Sen. Biden also played a key role in banning the recreational use of anabolic steroids. It’s time for Biden’s position to evolve. Putting on 10-20 pounds of lean muscle mass will alleviate concerns about Biden looking old and frail, while also providing a leg up if he and Trump decide to settle their differences through personal combat instead of rhetoric.

5. Adrenochrome

Hunter S. Thompson’s favorite would provide a mountain of psychological benefits to Biden. By inducing thought disorder and derealization, Biden will cease to believe physical reality. That in turn will produce exciting policy insights and a blunted affect that voters will mistake for sangfroid. Even better, though, adrenochrome will be easy to get. While previously obtainable only at the finest pizza arcades, today almost unlimited amounts of the drug are harvested in human sacrifice rituals held by Satan-worshipping pedophiles like Hillary Clinton — or so Cockburn is told. Biden will be able to get more than enough of the drug to power him through all three of the debates, and thanks to the drug’s youth-preservation qualities, he’ll be able to serve a full eight (or 12 — or 200) years as president.

6. Bath salts

Bath salts wouldn’t do much for Biden’s debate coherence. They may, however, trigger a psychotic break that would cause him to assault Trump on stage and try to eat him. This would demonstrate Biden’s vigor and determination to lead the country, and if he does in fact consume Trump, Mike Pence would likely prove a far less formidable adversary.

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US Intelligence Investigated Hillary Clinton Over Alleged Plan To Smear Trump With Russia Accusations

US Intelligence Investigated Hillary Clinton Over Alleged Plan To Smear Trump With Russia Accusations

Tyler Durden

Tue, 09/29/2020 – 15:12

On September 7, 2016, US intelligence officials forwarded an investigative referral to former FBI officials James Comey and Peter Strzok concerning allegations that Hillary Clinton approved a plan to smear then-candidate Donald Trump by tying him to Russian President Vladimir Putin and Russian hackers, according to information given to Sen. Lindsey Graham by the Director of National Intelligence.

According to Fox News’ Chad Pergram, “In late July 2016, U.S. intelligence agencies obtained insight into Russian intelligence analysis alleging that U.S. Presidential candidate Hillary Clinton had approved a campaign plan to stir up a scandal against U.S. Presidential candidate Donald Trump,” after one of Clinton’s foreign policy advisers proposed vilifying Trump “by stirring up a scandal claiming interference by Russian security services.”

Read the letter from DNI Director John Ratcliffe to Lindsey Graham below:

In 2017, it was claimed that the “blame Russia” plan was hatched “within twenty-four hours” of Clinton losing the election – while the US intelligence investigation predates that by several months.

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It’s Time To Buy Value: Here Are Bank of America’s 29 Favorite Value Stocks

It’s Time To Buy Value: Here Are Bank of America’s 29 Favorite Value Stocks

Tyler Durden

Tue, 09/29/2020 – 15:10

Two weeks after Goldman presented what it views as the “Future Five” mega growth stocks, i.e., the next FAAMG basket which consists of VRTX, ADSK, PYPL, ISRG, NOW or VAPIN, this morning Bank of America published a report which aims a little bit lower, and instead of growth, presents its 29 favorite Value stocks, as well as 8 value traps.

Noting that in September value finally started to show signs of life, reversing the trend by 4ppt MTD, Bank of America’s chief equity strategist Savita Subramanian writes that value “still see more room to run for several reasons” the main of which is that BofA still views the economy as continuing its recovery, a cycle phase which traditionally supports cyclicals over defensive sectors.

A second reason for the value bet is that value has outperformed coming out of 14 of the last 14 recessions for at least three months.

Reason three is that BofA’s proprietary Regime Indicator has officially entered into a recovery phase…

… where Value outperformed 100% of the time by over 20ppt on average during this phase, with Growth lagging in previous Recovery phases, with average relative returns of -8.5%. In the first “official” month of a Recovery (i.e. after two consecutive months of improvement from the Downturn phase), Value has historically outperformed Growth and Quality by over 3ppt on average.

Despite its recovery optimism, BofA admits that it is too early to write out Growth stocks just yet: as Savita writes, “despite our Value preference, there is still a number of compelling arguments supporting Growth’s continued leadership. The Fed put (FANG stocks have been the ultimate beneficiaries of monetary stimulus), Tech disruption and the rise of ESG investing favor Growth over Value. A potential second wave also does not bode well for Value.”

Additionally, the bank notes that when growth is scarce, investors will pay up for growth. As growth broadens out, investors become more price sensitive and seek out the cheapest growth they can find.

And contrary to popular belief, Subramanian writes, “rates have very little impact on style rotations.”

Another historical observation: during the recovery phase, value has outperformed growth in all but two instances during the trough to peak profit periods.

Meanwhile, BofA warns that given the lack of fiscal stimulus (for now), Growth stocks will not be immune to a second wave and could potentially see more downside, especially given rich valuations and positioning.

Positioning also suggests that value has more upside thatn growth, as active managers maintain a near-record overweight in Growth sectors like TMT and a near record underweight in Value sectors like Financials. FANG carries an overweight of 1.7x by hedge funds, and 1.8x by long only mutual funds. At the same time, banks are at a post–GFC record underweight: “On almost any measure, and among almost every investor group, Growth is over-owned and Value is neglected.”

Predictably, when look at from a valuation standpoint, the aptly named Value stock are far cheaper (i.e., undervalued) than growth. In fact, as shown in the chart below, value sits close to the deepest discount to Momentum. The only other instances  during which Value traded at such a steep discount were 2003 and 2008, after which Value outperformed Momentum by 22ppt and 69ppt, respectively, over the subsequent 12 months.

Another compelling reason to go long value: as Growth has grown pricier and Value has grown cheaper, valuation dispersion has risen to the highest levels since the GFC. According to BofA, “when valuation dispersion has been this high or higher, Value stocks have outperformed Growth 95% of the time over the subsequent 12 months, by 24ppt on average.”

One final reason to be long value: Japanification. While not its base case, BofA writes that similarities to Japan (low rates, aging demographics, a closing economy, deflationary threats and a range-bound market) are hard to ignore. In such a case, Japan factor performance during the 1990s’ “Lost Decade” indicates that Value was the best performing factor among the standard quantitative strategies.

* * *

At the same time, BofA also advises its clients to stay away from value traps: to do that, it presents its Value Trap model which attempts to steer investors out of stocks that are inexpensive for the wrong reasons: prices are falling faster than analysts are cutting earnings expectations. These are the industries which tend to remain trapped until a catalyst propels them upward. Also, since 1996, these industries have underperformed the benchmark by 4% annually and have failed to outperform the market more than half of the time. According to Subramanian, more than half of the time, industries that are identified as Value traps have failed to outperform the market in the subsequent month, and performance of Value Traps relative to the benchmark have underperformed by 4ppt p.a.

* * *

With all that in mind, here are Bank of America’s 29 top Quality Value stocks to buy and eight Value Traps to avoid. As BofA notes, “these Quality Value stocks offer attractive yields (3.4% on avg.), which analysts believe dividends are mostly secure, as well as compelling fundamental drivers.”

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Trump’s Anti-Trust “Cop” Targets Wall Street’s Data Pricing In Blow To Exchanges

Trump’s Anti-Trust “Cop” Targets Wall Street’s Data Pricing In Blow To Exchanges

Tyler Durden

Tue, 09/29/2020 – 14:55

Until now, practically all of the leaks about the anti-trust group gestating inside the DoJ and FTC have focused on big tech. But in an unexpected pivot, Bloomberg just reported that regulators are investigating the different data pricing packages sold by the exchanges to wire services like Bloomberg – along with High Frequency Traders who use the data to employ HFT strategies that rack up steady profits by inserting the “market makers” in between more trades.

Makan Delrahim, who heads the Justice Department’s antitrust division, said in an interview that he’s paying close attention to the data that securities exchanges sell to banks and investment companies. Market participants have long complained that the prices they pay to acquire the data they depend on to trade are too steep.

Delrahim said that one area of potential concern is whether the exchanges are using market power to hurt competition, for example by forcing investors to buy other products or services in addition to the data feeds, a practice known as tying. He declined to comment on whether the division has opened a formal investigation related to the data feeds.

Bloomberg reported that Bloomberg News (one of the subsidiaries of Bloomberg LP) is among the companies that have contested increases in pricing for the different packages offered by the exchanges.

In recent years, the business models of the world’s financial exchanges, which facilitate trading in financial markets from stocks to commodity futures, has pivoted to rely more on these lucrative data subscriptions, and less on the actual trading fees, which have been squeezed by years of consolidation and intensifying competition. And in a world where every nanosecond of frontrunning the orderflow data latency matters, exchanges can charge an arm and a leg, and there will always be a highest HFT bidder willing to pay the price if it means guaranteed and legal “information arbitrage.”

The financial market data peddled by these exchanges provides the world with the view of the financial markets reflected everywhere from CNBC to Google Finance to the Bloomberg terminals and Reuters Eikon platforms used by financial professionals. Of course, different pricing arrangements provide different data with varying levels of delay.

Shares of exchange operators ICE, CME and Nasdaq all tumbled on the news (note: ICE owns the NYSE):

According to Bloomberg, it’s not the only party that has “long griped” about these high prices for financial data. So have Wall Street banks (though mostly because Bloomberg passes on these charges to customers).

As it turns out, an updated draft of the Bloomberg story revealed that their source was none other than Makan Delrahim, the new head of the DoJ’s antitrust division, which is working with the FTC to investigate anti-trust abuses by Big Tech. However, in the interview, Delrahim confirmed that “I want to make sure that, if there’s anticompetitive conduct on Wall Street, that we pursue it.”

In an aside that could create headaches for the banks someday, Delrahim said he is also interested in revamping the code surrounding bank mergers.

But when it comes to the exchanges, Delrahim said an area of potential concern is whether they illegally force customers to buy additional, unnecessary products or services, a strategy known as “tying”. Last year, SEC Chairman Jay Clayton, the same man who let Elon Musk mock the federal government then walk away with a slap on the wrist, told the agency to start looking into potential abuses, as the agency clashed with the major exchange operators, including ICE. Clayton was apparently concerned that the rules had created a “two-tiered system”, where firms must pay exchanges for the private information just to be competitive. In May, the agency ordered the exchanges to improve the quality of public data feeds to try and reduce the market’s dependence on the private feeds. Ultimately, the standard that Clayton and Delrahim seem to be hinting at is whether firms are forced to pay exhorbitant sums just to get the data they need to be competitive. However, Delrahim declined to say whether an official investigation had actually been launched.

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Does Tonight’s Debate Even Matter?

Does Tonight’s Debate Even Matter?

Tyler Durden

Tue, 09/29/2020 – 14:41

Opinions are split about tonight’s debate: On one hand, DB’s Jim Reid says that it “will be critical, since it represents one of the last set-piece opportunities for either candidate to change the contours of the race.” On the other, as Rabobank’s Michael Every is dismissive, writing that “neither man has a reputation for eloquence, remaining calm at all times, clearly getting their point across to neutrals, or remaining gaffe free.”

In short, while the debate will likely draw huge television numbers, it is unlikely to sway many voters.

Underscoring that point, Poynter writes that the first Trump-Clinton debate in 2016 drew a whopping TV audience of 84 million, making it the most-watched presidential debate ever. That many people could watch tonight’s debate, although not all on TV. Streaming services and views on websites could make up a sizable portion of the audience.

But will it make a difference among voters? The New York Times’ Michael M. Grynbaum points to a recent Wall Street Journal/NBC News poll that shows that 70% of voters say the debates likely would not influence their vote. In that case, many may choose not watch “simply because they are stressed out or just plain tired of divisive politics.”

One place where the debate could have an impact is in narrowing Biden’s lead. According to Citi, four of the past five “first debates” have seen the trailing candidate close the gap in the polls – at least temporarily.

Meanwhile, Citi claims that market focus will be on the potential for a poor showing from Biden as a turning point in the election; however, according to media reports, the Biden campaign has been preparing for the debate and will likely focus on key issues (economy, pandemic) rather than direct confrontation with Trump.

What about the outcome of the debate and the pronounced winner? Here, as Jim Reid also points out, the reality is that the candidates’ perceived debate success has in the past had a fairly random correlation as to whether they will be elected on not. Mitt Romney “won” the first debate against Obama in 2012 by a huge 52% majority according to Gallup but lost the election. More spectacularly, Trump comfortably “lost” all three 2016 debates to Hillary Clinton (according to the same media that said Hillary had 95% odds of success). A similar fate was bestowed on John Kerry in 2004 when he won all three debates against G.W. Bush but lost the election.

Extending the list, in the last 10 elections with debate reaction data stretching back to 1976, only 2 candidates who were perceived to have won the first debate went on to win the election. Which is why Reid’s advice to clients is “enjoy the spectacle but there may not be too much to read into it ahead of November 3rd.”

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We’ve Reached “The Endpoint” – Monetary And Fiscal Policy Won’t Help

We’ve Reached “The Endpoint” – Monetary And Fiscal Policy Won’t Help

Tyler Durden

Tue, 09/29/2020 – 14:25

Authored by James Rickards via The Daily Reckoning,

Remember all those “green shoots?”

That was the ubiquitous phrase used by White House officials and TV talking heads in 2009 to describe how the U.S. economy was coming back to life after the 2008 global financial crisis.

The problem was we did not get green shoots; what we got was more like brown weeds.

The economy did recover, yes, but it was the slowest recovery in U.S. history.

After the green shoots theory had been discredited, Treasury Secretary Tim Geithner promised a “recovery summer” in 2010.

That didn’t happen either.

The recovery did continue, but it took years for the stock market to return to its previous highs and even longer for unemployment to come down to levels that could be regarded as close to full employment.

And after the worst of the 2020 pandemic (so we hope), we’ve gotten the same happy talk. But those hopes have been dashed, which the latest jobs numbers bear out.

Can monetary and/or fiscal policy lift us out of the new depression?  Let’s first take a look at monetary policy.

Fed money printing is an exhibition of monetarism, an economic theory most closely associated with Milton Friedman, winner of the Nobel Memorial Prize in economics in 1976. Its basic idea is that changes in money supply are the most important cause of changes in GDP.

A monetarist attempting to fine-tune monetary policy says that if real growth is capped at 4%, the ideal policy is one in which money supply grows at 4%, velocity is constant, and the price level is constant. This produces maximum real growth and zero inflation. It’s all fairly simple as long as the velocity of money is constant.

But money velocity is not constant, contrary to Friedman’s thesis. Velocity is like a joker in the deck. It’s the factor the Fed cannot control.

Velocity is psychological: It depends on how an individual feels about her economic prospects. It cannot be controlled by the Fed’s printing press. It measures how much money gets spent from people to businesses.

Think of when you tip a waiter. That waiter might use that tip to pay for an Uber. And that Uber driver might pay for fuel with that money. This velocity of money stimulates the economy.

Well, velocity has been crashing for the past 20 years. From its peak of 2.2 in 1997 (each dollar supported $2.20 of nominal GDP), it fell to 2.0 in 2006 just before the global financial crisis and then crashed to 1.7 in mid-2009 as the crisis hit bottom.

The velocity crash did not stop with the market crash. It continued to fall to 1.43 by late 2017, despite the Fed’s money printing and zero rate policy (2008–15). Even before the pandemic, it fell to 1.37 in early 2020.

It can be expected to fall even further as the new depression drags on. As velocity falls, the economy falls. Money printing is impotent. $7 trillion times zero = zero. There is no economy without velocity.

The factors the Fed can control, such as base money, are not growing fast enough to revive the economy and decrease unemployment.

Spending is driven by the psychology of lenders and consumers, essentially a behavioral phenomenon. The Fed has forgotten (if it ever knew) the art of changing expectations about inflation, which is the key to changing consumer behavior and driving growth. It has nothing to do with money supply.

The bottom line is, monetary policy can do very little to stimulate the economy unless the velocity of money increases. And the prospects of that happening aren’t great right now.

But what about fiscal policy? Can that help get the economy out of depression? Let’s take a look…

We’re seeing more deficit spending in 2020 than the past several years combined. The government will add more to the national debt this year than all presidents combined from George Washington to Bill Clinton.

This spending explosion comes on top of a baseline budget deficit of $1 trillion. Combining the baseline deficit, the approved spending and the expected additional spending brings the total deficit for 2020 to over $3 trillion at the minimum.

That added debt will increase the U.S. debt-to-GDP ratio to over 120%. That’s the highest in U.S. history and puts the U.S. in the same super-debtor’s league as Japan, Greece, Italy and Lebanon.

The idea that deficit spending can stimulate an otherwise stalled economy dates to John Maynard Keynes and his classic work The General Theory of Employment, Interest and Money (1936).

Keynes’ idea was straightforward.

He said that each dollar of government spending could produce more than $1 of growth. When the government spent money (or gave it away), the recipient would spend it on goods or services. Those providers of goods and services would, in turn, pay their wholesalers and suppliers.

This would increase the velocity of money.

Depending on the exact economic conditions, it might be possible to generate $1.30 of nominal GDP for each $1.00 of deficit spending. This was the famous Keynesian multiplier. To some extent, the deficit would pay for itself in increased output and increased tax revenues.

Here’s the problem:

There is strong evidence that the Keynesian multiplier does not exist when debt levels are already too high. In fact, America and the world are inching closer to what economists Carmen Reinhart and Ken Rogoff describe as an indeterminate yet real point where an ever-increasing debt burden triggers creditor revulsion, forcing a debtor nation into austerity, outright default or sky-high interest rates.

Reinhart and Rogoff’s research reveals that a 90% debt-to-GDP ratio or higher is not just more of the same debt stimulus. Rather it’s what physicists call a critical threshold.

The first effect is the Keynesian multiplier falls below 1. A dollar of debt and spending produces less than a dollar of growth. Creditors grow anxious while continuing to buy more debt in a vain hope that policymakers reverse course or growth spontaneously emerges to lower the ratio.

This doesn’t happen. Society is addicted to debt, and the addiction consumes the addict.

The endpoint is a rapid collapse of confidence in U.S. debt and the U.S. dollar. This means higher interest rates to attract investor dollars to continue financing the deficits. Of course, higher interest rates mean larger deficits, which makes the debt situation worse. Or the Fed could monetize the debt, yet that’s just another path to lost confidence.

The result is another 20 years of slow growth, austerity, financial repression (where interest rates are held below the rate of inflation to gradually extinguish the real value of debt) and an expanding wealth gap.

The next two decades of U.S. growth would look like the last two decades in Japan. Not a collapse, just a slow, prolonged stagnation. This is the economic reality we are facing.

And neither monetary policy nor fiscal policy will change that.

via ZeroHedge News https://ift.tt/3ic0VcD Tyler Durden

JPM Pays Record $1 Billion Fine; Admits Spoofing Of Gold And Treasuries

JPM Pays Record $1 Billion Fine; Admits Spoofing Of Gold And Treasuries

Tyler Durden

Tue, 09/29/2020 – 14:15

As expected, JP Morgan has just agreed to pay $920 million in fines – a record penality for allegations of systematic market manipulation  – as part of a deferred prosecution agreement with federal prosecutors in Connecticut, bringing to a close a yearslong investigation into “spoofing” and other market manipulation tactics in the precious metals and Treasury markets.

Over the past decade, holding megabank trading desks accountable for routine manipulation of FX, Libor and other markets has been a priority for prosecutors, ever since – it seems – the springtime “flash crash” of 2010 shone an uncomfortable spotlight on ‘spoofing’ a technique whereby traders submit orders they never intended to fill solely for the purpose of trying to move the price of a given currency, futures contract etc. in a direction that favors one of their positions. For example, a trader who’s looking to sell a big slug of front-month gold futures might layer in dozens of “buy” orders to try and push the price up to hit his sell ‘offer’. The trick is, traders need to make sure none of these fraudulent offers ever get filled. 

At trial, JPM’s former top precious metals trader argued that “spoofing” was an inevitable adaptation by sell-side dealers to fend off high-frequency market makers. One Deutsche Bank trader argued that the behavior was so commonplace, he didn’t realize it was wrong, or illegal.

Tuesday’s settlement addresses “two distinct schemes to defraud”, according to a press release from the DoJ. Under the terms of the DPA, JPMorgan will pay over $920 million in a criminal monetary penalty, criminal disgorgement,= and victim compensation. The criminal  penalty paid by the bank will be credited against payments made to the CFTC under a separate agreement with the CFTC being announced today and with part of the criminal disgorgement credited against payments made to the SEC under a separate agreement with the SEC being announced today.

“For over eight years, traders on JP Morgan’s precious metals and US Treasuries desks engaged in separate schemes to defraud other market participants that involved thousands of instances of unlawful trading meant to enhance profits and avoid losses,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Today’s resolution – which includes a significant criminal monetary penalty, compensation for victims, and requires JP Morgan to disgorge its unlawful gains – reflects the nature and seriousness of the bank’s offenses and represents a milestone in the department’s ongoing efforts to ensure the integrity of public markets critical to our financial system.”

“JPMorgan engaged in two separate years-long market manipulation schemes,” said US Attorney John Durham. “Not only will the company pay a substantial financial penalty and return money to victims, but this agreement requires JPMorgan to self-report violations of the federal anti-fraud laws and cooperate in any future criminal investigations. I thank the FBI for its dedication in investigating these deceptive trading practices and other sophisticated financial crimes.”

According to admissions and court documents, between approximately March 2008 and August 2016, numerous traders and sales personnel on JPMorgan’s precious metals desk located in New York, London, and Singapore engaged in a scheme to defraud in connection with the purchase and sale of gold, silver, platinum, and palladium futures contracts (collectively, precious metals futures contracts) that traded on the New York Mercantile Exchange Inc. and Commodity Exchange Inc., which are commodities exchanges operated by the CME Group Inc. Prosecutors identified “tens of thousands of instances” where JPM traders placed fraudulent orders in attempts to manipulate market prices.

Aside from the bank, three JPMorgan traders, Gregg Smith, Michael Nowak, and Christopher Jordan, and one former salesperson, Jeffrey Ruffo have been charged with running a corrupt criminal enterprise within America’s largest bank. A

Moreover, between April 2008 and January 2016, traders on JPM’s Treasuries desks in New York and London used similar “spoofing” techniques to place fraudulent orders in Treasury futures with the Chicago Board of Trade (another commodity trading venue operated by the CME), as well as for notes and bonds in trading in the spot secondary market for Treasury securities. These traders also routinely misled markets about the price and supply of Treasury securities.

Over the span of eight years, 15 traders at the biggest US bank caused losses of more than $300 million to other participants in precious metals and Treasury markets, according to the court filings. JP Morgan has admitted responsibility for the traders’ actions. The three-year DPA will allow the bank to walk away from the scandal – and two counts of wire fraud – so long as it self-reports any future violations.

Meanwhile,  the woman who was overseeing JPM’s global commodity business when some of this wrongdoing was ongoing all this went down wasn’t hardy mentioned even once during the proceedings.

Read the DPA below:

JPMDPA by Zerohedge on Scribd

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