The United States Geological Survey has increased the Yellowstone supervolcano threat to “high.” This is the first time that the USGS has updated its volcano threat assessments list since 2006.
The USGS said that 11 of the 18 volcanoes they have classified as a “high threat” or a “very high threat” are located in Washington, Oregon, or California, “where explosive and often snow- and ice-covered edifices can project hazards long distances to densely populated and highly developed areas.”
According to the Epoch Times,the danger list is topped by Kilauea in Hawaii, which has been erupting continuously in 2018. Mount St. Helens as well as Mount Rainier in Washington, Alaska’s Redoubt Volcano, and California’s Mount Shasta are also in the top five, according to what the USGS has said.
Although the Yellowstone supervolcano is a “high” threat, it’s only the 21st most dangerous volcano in the United States.
According to Forbes, the assessment that Yellowstone supervolcano was only high was not assigned on a whim. While theYellowstone supervolcano does have the potential for a large eruption, other factors are at play. Such as the fact that it erupts so infrequently, shows no signs of increasing eruption risk today, and is located in a relatively sparsely populated area of the United States which decreases the threat. To be clear, the USGS still ranked the supervolcano as a “high” threat, but it is clearly not the most dangerous volcano in the United States.
Despite the recent gradual uptick in thermal activity in the caldera directly below the supervolcano, the new USGS threat assessment is showing Yellowstone as stable, but dangerous when it does happen to erupt in the future, according to a report by the Missoulan.
The Yellowstone supervolcano is one of the most feared volcanoes on the globe, however, scientists are constantly reminding everyone that the chance of it erupting in a violent and globally devastating fashion is rather small, even though it is said to be “past due” for such an explosion.
While some famous activist investors have experienced hedge fund horror over the last year, and most hedge funds have sharply underperformed their investors’ expectations, forcing fee cuts to try and stave off redemptions, two of the handful of names who have been outperforming in the industry are now increasing their fees and extending the amount of time it takes for investors to redeem.
Millennium and Citadel are two funds that have managed to stand apart from the deplorable 2 and 20 herd, and performed solidly over the last couple of years. And now they are – one way or another – raising their prices for investors. Millennium, after recently telling investors they would get their profits early next year, also told investors that to reinvest these profits, they need to sign up for a new share class that would extend their redemption period from one to five years, ostensibly to avoid forced sales during the next recession and effectively giving the hedge fund a private equity-like lock up.
The new share class at Millennium also no longer lists its founder Israel Englander as a “key man”, meaning that investors can’t take their money out if he leaves.
Citadel is also working on changes to how it charges investors for several of its hedge funds.
Unlike most of their peers, Citadel and Millennium can make these aggressive demand because they both have a backlog of investors who want to invest with them. Since inception, Citadel and Millennium have averaged 19.1% and 14% annually, respectively. For the previous decade, Citadel averaged 8.9% annually and Millennium averaged 10% annually. Before October, Citadel’s flagship fund was up 13.5% for the year and Millennium was up 8.3% for the year, according to the Wall Street Journal.
Both funds have far exceed the 1.4% average gain by the broader hedge fund space during the same period, while the S&P was up 10.6% over the same period of time.
Meanwhile, the premise of hedge funds that actually hedge is gradually becoming appealing again as the market stagnates amid spasms of rising volatility, and becomes more conducive to stock picking as opposed to “asset managers” who have invested by throwing an ETF or mutual fund dart and hoping all stocks rise alongside the market. Incidentally, in recent years the dart has outperformed even the smartest money in the room.
Kieran Cavanna of Old Farm Partners told the Wall Street Journal that “It’s very hard to find someone who can consistently do well. There just is not enough capacity for the amount of money that wants to go into those firms.”
During the financial crisis Millennium only lost about 3% while the market cratered. Even so, its AUM dropped from $14 billion to $7 billion at the time, mostly because it was the most liquid of all the hedge funds and people were trying to get their money out of any place they could and had not imposed “gates” on investors. After the crisis, in 2009, Millennium founder Englander famously stated at a Morgan Stanley hedge fund conference that those who wanted to get their money back “should’ve invested in a mutual fund” instead.
Izzy Englander
Similarly, Citadel plans on returning profits at the end of the year this year. Clients that want to reinvest these profits have to pay a new 1% annual management fee that starts in 2019, on top of the expenses that they already pay. However, the new fee will count toward the performance fee, which means that if the fund makes money over the year, the overall amount customers will pay will remain relatively unchanged.
In other Citadel funds, the company is employing a model of charging clients for variable expenses that it passes onto them, rather than just a flat 2.5% management fee that it had previously charged. But those funds are also dropping performance fees from 25% to 20%. When returns are lower, investors should pay less under the new fee arrangement, but at the same time if Citadel can continue outperforming, clients will wind up paying more while being locked up for a long, long time during the next market crash.
Then again, in the increasingly disappointing hedge fund world, that’s just the cost of handing over your money to one of the few who can still generate alpha successfully.
Princeton University’s Undergraduate Student Government (USG) issued a checklist to students on Thursday to ensure that their Halloween costumes fostered an “inclusive experience for all students.”
USG distributed its checklist to Princeton’s undergraduate students in an email obtained by Campus Reform. The email contained several questions that students were to “take some time out and ask [themselves]” before attending the Ivy League school’s annual Halloween function, dubbed “Princetoween.”
Students were to ask themselves whether “my costume [is] making fun of a group of people,” or whether it “reduce[s] cultural differences to jokes and stereotypes.”
“Are you altering your skin color, facial/body features to make it darker or indicative of a particular race, ethnicity, or cultural group?” another question reads.
“Is your costume ‘funny’,” another asked, “because you’re dressing up as someone from a particular race, gender, ethnicity, or culture?” Another question warned students to consider whether their costumes “have the potential to create an unsafe or hostile environment.”
“As always, we want to make sure that you all respect and take care of each other,” the list concluded.
Princeton’s USG President Rachel Yee, who sent the email, did not return a Campus Reform request for comment.
Akhil Rajasekar, a Princeton sophomore and founder of the school’s chapter of the conservative Federalist Society, discussed USG’s costume guidelines with Campus Reform via email, emphasizing that his views are his alone and that he does not speak for the Federalist Society at large or in part.
“To take a night’s costumes seriously and police meaningless costume-wear serves in itself to escalate the seriousness of an inherently light-hearted matter and contributes to a culture of the offense-police, into whose jurisdictions gravitate all social questions, however high or inordinately petty,” Rajasekar said.
“People really should stop looking for things by which to be offended. Not everything is offensive and, even if it is, one must learn to shrug it off,” Rajasekar concluded.
“The ability to remain unaffected by external circumstances only serves to make one stronger. Yet, our culture today is perpetually one verbal or social misstep away from being tragically offended or ‘invalidated,’ whatever that means.”
Princeton USG distributed the same checklist last year before Princetoween. At the time, when asked whether there would be any disciplinary action taken against students who declined to heed the guidelines, a university spokesman told Campus Reform that “the guidelines you cite are just that, guidelines, and reminders that this is a very diverse community that values respect for others and inclusion.”
“They encourage thoughtfulness, but the guidelines themselves would not be a basis for disciplinary action,” the spokesman continued in the 2017 statement. “Absent other factors, Halloween costumes are not a ground for discipline under our procedures.”
Demand concerns and contagion from equity carnage continue to weigh on WTI (overwhelming fears about supply disruptions in Iran and Venezuela) as it tested a $65 handle again today.
API reported a bigger than expected 5.69mm crude build, the sixth weekly rise in inventories in a row. But Cushing saw a massive 14.4mm barrel rise in stocks (as Gasoline and Distillates drewdown).
API
Crude +5.69mm (+3.2mm exp)
Cushing +14.4mm (+2.1mm exp) – biggest ever build
Gasoline -3.5mm
Distillates -3.1mm
6 weeks of Crude builds in a row (and 6 weeks of Cushing builds and Distillate draws)…but the massive rise in Cushing stocks stands out and we suspect may be related to the hurricane…
WTI tested back into the $65 handle once again today, but some are suggesting that is weakness to buy…
“You’re approaching a level where a lot of traders are looking at value,” said Josh Graves, senior market strategist at RJO Futures in Chicago.
“The market is looking at growth potential in the future and trading off of earnings announcements and anything that can give an outlook on what oil prices might be down the road.”
But WTI was hovering just above $66.00 ahead of the API data… dipped and then popped…
“The beginning of the end of the Trump presidency…”
“The tipping point…”
“The walls are closing in…”
“Trump’s going down…”
“He will not serve out his term…”
After two years of the mainstream media breathlessly floating ‘Russiagate’ conspiracies on a daily basis to see just what will stick, Trump remains comfortably in the White House, and as journalist Aaron Maté notes for The Nation, with just days to the midterms, Russiagate is MIA.
And how goes the endless echo chamber of predictions foretelling Trump’s imminent demise? Nassim Taleb recounts the barrage of “intellectuals” and pundits who told him Trump “will last 3 months at best”.
An illustration of how little journalists & “intellectuals” understand the world: their predictions of events related to Trump’s presidency. How many people I didn’t know were idiots have emphatically told me “he will last 3 months at best”…
To illustrate, Taleb links to the below epic “news” compilation…
Intellectual Yet Idiot: semi-erudite bureaucrat who thinks he is an erudite; pathologizes others for doing things he doesn’t understand not realizing it is his understanding that may be limited; imparts normative ideas to others: thinks people should act according to their best interests *and* he knows their interests, particularly if they are uneducated “red necks” or English non-crisp-vowel class.
More socially, the IYI subscribes to The New Yorker. He never curses on twitter. He speaks of “equality of races” and “economic equality” but never went out drinking with a minority cab driver. Those in the U.K. have been taken for a ride by Tony Blair. The modern IYI has attended more than one TEDx talks in person or watched more than two TED talks on Youtube.
Not only will he vote for Hillary Monsanto-Malmaison because she seems electable and some other such circular reasoning, but holds that anyone who doesn’t do so is mentally ill.
The IYI has a copy of the first hardback edition of The Black Swan on his shelves, but mistakes absence of evidence for evidence of absence. He believes that GMOs are “science”, that the “technology” is not different from conventional breeding as a result of his readiness to confuse science with scientism.
Typically, the IYI get the first order logic right, but not second-order (or higher) effects making him totally incompetent in complex domains. In the comfort of his suburban home with 2-car garage, he advocated the “removal” of Gadhafi because he was “a dictator”, not realizing that removals have consequences (recall that he has no skin in the game and doesn’t pay for results).
The IYI is member of a club to get traveling privileges; if social scientist he uses statistics without knowing how they are derived (like Steven Pinker and psycholophasters in general); when in the UK, he goes to literary festivals; he drinks red wine with steak (never white); he used to believe that fat was harmful and has now completely reversed; he takes statins because his doctor told him so; he fails to understand ergodicity and when explained to him, he forgets about it soon later; he doesn’t use Yiddish words even when talking business; he studies grammar before speaking a language; he has a cousin who worked with someone who knows the Queen; he has never read Frederic Dard, Libanius Antiochus, Michael Oakeshot, John Gray, Amianus Marcellinus, Ibn Battuta, Saadiah Gaon, or Joseph De Maistre; he has never gotten drunk with Russians; he never drank to the point when one starts breaking glasses (or, preferably, chairs); he doesn’t know the difference between Hecate and Hecuba; he doesn’t know that there is no difference between “pseudointellectual” and “intellectual” in the absence of skin in the game; has mentioned quantum mechanics at least twice in the past 5 years in conversations that had nothing to do with physics; he knows at any point in time what his words or actions are doing to his reputation.
Exactly three months ago, with its stock trading at $218, or 50% higher than where it is now, Facebook shocked Wall Street with a second-quarter revenue miss and a warning that growth would slow while profits shrank as spending rose which sent its stock crashing more than 20%, wiping out $132 billion in market cap – the biggest single-day shareholder value loss in history. Fast forward to today, when with the company’s Q3 earnings due, investors will be watching user growth and engagement numbers, expenses and of course, profits closely. The top wish: no more surprises.
They did not quite get that when moments ago Facebook reports a revenue miss, an earnings beat, while both daily and monthly avereage users missed, and rather badly at that. Here are the Q3 details:
Revenues of $13.73BN, below the estimate of $13.80BN
EPS $1.76, Above the estimate of $1.47
Daily Active Users 1.49B, up 9% Y/Y but below the estimate of 1.557B
Monthly Active Users 2.27B, up 10% but also below the estimate 2.352B
Some more details from the latest report:
Q3 advertising rev. $13.54 billion
Q3 mobile ad revenue as percentage of ad revenue 92%, up from 89% Y/Y
But the biggest problem may be that Facebook’s costs, as feared, indeed soared, jumping from $5.2BN a year ago to $7.9BN, up 52%.
Commenting on the results, FB CEo Jeff Zuckerberg said that “Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day,” He added that “we’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
* * *
In kneejerk reaction, the stock is down, but only modestly, some 2% a far cry from the 20% plunge a quarter ago.
— FreeFall Capital, No exit door when the time comes (@FreefallCapital) October 30, 2018
China started off weak but quickly ramped, pushing CHINEXT green for the week – briefly…
European stocks failed to be inspired by China and limped weaker with Italy worst today…
A chaotic open saw stocks bounced
…Nasdaq was levitated to unchanged on the week…
Futures show the indices chaotic swings and push for Friday’s highs again…
All the major US equity indices remain well below their 200DMAs. Dow futs ramped to theoir 10/11 plunge l;ows – looks like we are going back down…
GE was a bloodbath back below $10…
MSFT tumbled back below its 200DMA and bounced…
FANGs were mixed all day (AMZN and NFLX red, FB and GOOGL green)
But we note that AMZN may have lost its battle with retailers
But we have seen these size drawdowns before – will it be different this time?
Despite stocks bounce, credit markets continued to crack wider as cash markets catch up to derivatives…
Treasury yields limped higher today as stocks bounced with 30Y underperforming…
10Y yields bounced off unch for the month…
For now bond yields are up and stocks are down for the month…
The Dollar Index is up for the 4th time in 5 days making new 2018 highs (highest since May 2017)
NOTE – the USD is up over 2% in the last 10 days – the biggest surge since May.
Offshore Yuan drifted near its cycle lows…
Cable tumbled to near August cycle lows after S&P said it now sees a no-deal Brexit as a rating consideration…
Cryptocurrencies trod water after yesterday’s tumble…
Despite the surge in the dollar,. silver was flat today (after yesterday’s tumble) but copper and crude slid notably…
WTI Crude fell to a $65 handle intraday as oil suffers its worst month since July 2016…
Gold slipped back to support…
Finally, we note the pros’ risk indicator in the market – that of implied correlation (or true systemic risk) – has spiked to its highest since February…
And judging by Goldman’s Financial Conditions Index (modeled by Bloomberg’s Sebastian Boyd), the S&P has plenty of room to fall further…
Traveling at a sluggish pace of 10 miles per day, the migrant caravan probably wouldn’t arrive at the nearest US border crossing at McAllen, Texas until February, according to one observer, who debunked claims widely circulated by the media that the caravan would arrive before the Nov. 6 midterm election.
But as it turns out, the organizations that have been aiding the caravan since it first formed in Honduras nearly three weeks ago have already accounted for this. And to help ensure that images of border patrol agents arresting families and separating small children from their parents are flashing across cable news in the days and hours before the polls open, these groups are employing a new tactic: Busing.
That’s right. As Fox News report on Tuesday showed, migrants traveling with the caravan are being loaded on to chartered buses and transported to the next stop on the trail to the US, having refused Mexico’s offer of asylum, shelter and jobs should they opt to stay in the country. Fox News reporter Griff Jenkins revealed that multiple professional buses have lined up to board the migrants, as footage from the report showed.
As more than 5,000 troops mass on the border and a second caravan crosses into Mexico from Guatemala, Jenkins exposed more than 11 buses carrying some of the migrants organized in the state of Oaxaca. While the buses can’t carry every member of the caravan – that would require more than 80 buses, by Fox’s count, they can speed members closer to their next stop. Meanwhile, two more caravans in Guatemala and El Salvador.
“Something new that’s developing here,” Jenkins said as he wandered the bus loading zone. “We’ve seen the 5,000 strong caravan walking to the border but now they’re waiting for a ride to the border. This is the first time I have seen an organized bus operation from the state of Oaxaca actually getting volunteer buses to put people … on them and take them to their next location.”
The buses are just the latest example of the support the migrants have received from local townspeople and organizations from within Mexico, as the country’s police and military have largely stood aside despite President Trump’s demands that the Mexican government do something to slow or stop the caravan.
That’s very significant now because these towns continue to help them. When we began this way back a week or so – Mexican police were trying to dissuade them from going across the Guatemala-Mexico border. At least some of the towns are assisting them to make their way.
It’s unclear who’s paying for the buses or when more would be coming (but Jenkins believes more are on their way). However, the motivation behind the campaign should be obvious to anyone who has been paying attention since the first caravan formed. Getting the migrants to the border, where Trump’s beefed-up border presence is waiting, is clearly a key component of the Democrats’ election strategy (and has taken on increased importance since the Democrats attempts to make the vote about health care have largely foundered). Their logic probably looks something like this. Step 1. Get the migrants to the border in the days before the vote. Step 2. Replay the outrage blitz that followed Trump’s order to separate migrant children from their families earlier this year. Step 3. Convince moderates that they would be committing an inhumane act by supporting Republicans. Step 4. (hopefully) victory.
Peter Schiff is sounding more economic alarms. This time, without mincing words, he says that the Federal Reserve’s raising of the interest rates will cause a stock market collapse.
Euro Pacific Capital CEO Peter Schiff and Steven Quirk, the executive vice president of TD Ameritrade’s trader group discussed the Federal Reserve’s impact on the stock market and whether corporate earnings can help the market make a comeback.According to Fox News, Schiff’s assessment was none too calming.
Schiff also said that investors should expect a long drawn-out bear market with the cost of living rising to dramatic levels. “This bear market is not going to end quickly,” he said.
Quirk says that there’s no end to October’s fear in sight, but they aren’t signaling armageddon either.
“[Investors] are not optimistically saying this is going to bounce right back, but they are also not saying this is the end of the world,” he said on Countdown to the Closing Bell.
Schiff is taking on a less optimistic view, however. He said that the debt racked up by companies during the stock market boom and a hike in interest rates will cause corporate earnings to potentially collapse at a rapid pace.
“There is a lot of optimism about earnings and unfortunately that’s already priced into these stocks,” he said.
With one week left before the Nov. 6 midterm vote, President Trump and his allies in Congress have managed to establish immigration policy as the de facto dominant issue with the revelation that Trump is planning an executive order to eliminate birthright citizenship in the US. But in the event that Trump’s order is challenged and overturned by the federal courts (which is extremely possible despite the confirmations of Neil Gorsuch and Brett Kavanaugh), South Carolina Sen. Lindsey Graham, a former adversary turned staunch Congressional ally, said Tuesday that he would introduce legislation to eliminate what he described as an “absurd” policy.
First, Graham – who is rumored to be on Trump’s shortlist of candidates for a cabinet role after a post-election cleanout – applauded Trump for his decision (which he made public in an Axios interview published Tuesday morning)…
Finally, a president willing to take on this absurd policy of birthright citizenship. https://t.co/kCa0ko7P76
…then followed this up by declaring that he has always supported eliminating birthright citizenship, noting that the US is “one of only two countries in the world” that establishes citizenship by birth (though the accurate number is closer to 30). He argued that the policy is a magnet for illegal immigration and is “out of the mainstream” for the developed world and “needs to come to an end.”
I’ve always supported comprehensive immigration reform – and at the same time – the elimination of birthright citizenship.
While some have speculated that eliminating birthright would require amending the constitution, Trump has insisted that this isn’t the case, and given the conservative majority on the Supreme Court, many legal experts believe an act of Congress would more than suffice (though the court could also choose to uphold an executive order and toss out any lower court ruling as well).
As Trump deploys thousands of additional troops to the border to brace for the arrival of two caravans of migrants (who almost certainly won’t arrive before the vote, but instead will most likely reach the US months later) it’s becoming increasingly clear that immigration has become the dominant issue of this election cycle – which bodes well for Republicans, since Trump’s hardline immigration policies have been credited for helping distinguish his campaign from the other Republicans seeking the nomination. Meanwhile, Democrats have sought to make health care the defining issue of the election cycle, to mixed results (of course, their efforts were complicated by preliminary data showing that ObamaCare premiums are set to fall next year for the first time since the law came into effect in 2014).
