Tag: finance

Authored by Chris Hamilton via Econimica blog,

I hope this article brings forward important questions about the Federal Reserves role in the US and I openly admit this is by no means a comprehensive article…it simply attempts to begin a broader dialogue about the financial and economic impacts of allowing the Federal Reserve to direct America's economy.

Against the adamant wishes of the constitutions framers, in 1913 the Federal Reserve System was Congressionally created.  According to the Fed's website, "it was created to provide the nation with a safer, more flexible, and more stable monetary and financial system."  Although parts of the Federal Reserve System share some characteristics with private-sector entities, the Federal Reserve was supposedly established to serve the public interest.

A quick overview; monetary policy is the Federal Reserves actions, as a central bank, to achieve three goals specified by Congress: maximum employment, stable prices, and moderate long-term interest rates in the United States.  The Federal Reserve conducts the nation's monetary policy by managing the level of short-term interest rates and influencing the availability and cost of credit in the economy.  Monetary policy directly affects interest rates; it indirectly affects stock prices, wealth, and currency exchange rates.  Through these channels, monetary policy influences spending, investment, production, employment, and inflation in the United States.

I suggest what truly happened in 1913 was that Congress willingly abdicated a portion of its responsibilities, and through the Federal Reserve, began a process that would undermine the functioning American democracy.  How, you ask?  The Fed, believing the free-market to be "imperfect" (aka; wrong) believed it should control and set interest rates, determine full employment, determine asset prices; not the "free market".  And here's what happened:

 

via http://ift.tt/2yZl3gk Tyler Durden

Is the largest public pension fund in the United States getting ready to dump about $50 billion worth of stocks?  According to a new note from Bloomberg, CalPERS’ board is meeting for a workshop today in Sacramento to discuss asset allocations for the upcoming year which could include a doubling of the fund’s bond allocation from 19% to 44% which would be funded with a massive $50 billion sell down of equities.

Calpers is looking at a menu of options for its fixed-income target ranging from the current 19 percent to as much as 44 percent, according to a presentation for a board workshop in Sacramento coming up Monday. Equities could be cut to as little as 34 percent from 50 percent. Stocks were the best-performing asset class in fiscal 2017, returning almost 20 percent.

 

“The markets have had a pretty good run and it’s possible Calpers staff is thinking this might be a good time to lock in some of the gains,” Keith Brainard, research director for the National Association of State Retirement Administrators, said in a phone interview.

Unfortunately, as we’ve noted before (see: CalPERS Board Votes To Maintain Ponzi Scheme With Only 50bps Reduction Of Discount Rate), a shift toward higher fixed income allocations may require a simultaneous decrease in the fund’s discount rate assumptions which could drastically increase contribution requirements from various public employers all around the Golden State.

“We’ve cut the return expectation to the point that employers are screaming, ‘We can’t afford it. We can’t afford it,’ ” Jelincic said. “I personally would be willing to take on a little more risk.”

 

The average allocation for public pensions is about 23 percent to fixed income and 49 percent to stocks, according to Nasra data.

 

The Calpers board is scheduled to vote on the allocation in December. Almost all of the fixed-income and stock holdings are managed in-house while more complex assets, such as private equity and real estate, are overseen by outside consultants. Allocations to private equity and real assets would stay at 8 percent and 13 percent, respectively, under all scenarios under consideration.

 

The allocation revisions occur every four years. Calpers is working to provide for a growing wave of longer-living retirees.

Of course, while a more conservative asset allocation may be warranted in the current bubbly equity environment, often logic is quickly dismissed by politicians when it’s implementation could expose a massive ponzi scheme that has been hiding in plain sight for decades and risks the financial solvency of local and/or statewide government entities. 

This battle between math/logic and politicians has played out numerous times in states all across the country and somehow we suspect that “math/logic” will continue to lose…better to bury your head in the sand for a couple of more years and pretend there is no problem.

via http://ift.tt/2yAH0OV Tyler Durden

Authored by Mike Krieger via Liberty Blitzkrieg blog,

Two years ago, German intelligence warned the world of the unique risks Saudi Arabia posed to the region.

I covered it at the time in the post, German Intelligence Warns – Saudi Arabia to Play “Destabilizing Role” in the Middle East. Here’s an excerpt:

Saudi Arabia is at risk of becoming a major destabilizing influence in the Arab world, German intelligence has warned.

 

Internal power struggles and the desire to emerge as the leading Arab power threaten to make the key Western ally a source of instability, according to the BND intelligence service.

 

“The current cautious diplomatic stance of senior members of the Saudi royal family will be replaced by an impulsive intervention policy,” a BND memo widely distributed to the German press reads.

 

Saudi Arabia has previously been accused of supplying arms and funding to jihadist groups fighting in Syria, including Islamic State in Iraq and the Levant (Isil).

At the core of this intelligence warning was none other than crown prince Mohamed bin Salman, or MBS.

I’ve been warning about the specific dangers presented by his brazen and sociopathic personality for years, and the recent purge finally threw it all into the spotlight for everyone to see.

MBS has already wreaked havoc on portions of the region with his reckless and failed polices with respect to both Yemen and Qatar. Today’s post will focus on the humanitarian catastrophe unfolding in Yemen, courtesy of the Saudi crown prince.

The New York Times reported last week:

Saudi Arabia’s three-day-old blockade of entry points to Yemen threatens to plunge that war-ravaged country into a famine that could starve millions of people, the top relief official of the United Nations said Wednesday.

 

The Yemen crisis has worsened since the Saudis imposed the blockade on Monday after a missile was fired deep into their territory by the Iran-backed Houthi rebel group, which has been warring with a Saudi-led military coalition for nearly three years.

 

Despite Saudi Arabia’s assurances that the measure was temporary while it reviews inspection procedures, virtually all humanitarian deliveries to Yemen have been halted, including at least three United Nations airplanes full of emergency supplies.

 

Mr. Lowcock said the Saudis must immediately allow the entry of food and medicine at all seaports, permit the immediate resumption of air services to the cities of Sana and Aden, and provide an “assurance of no further disruption to these services.”

 

Without such steps, he said, Yemen will suffer “the largest famine the world has seen for many decades, with millions of victims.”

 

The World Food Program, the anti-hunger agency of the United Nations, which has been feeding seven million people a month in Yemen, is now unable to do so, Mr. Lowcock said. “What we need is a winding down of the blockade to save the lives of those people.”

 

The country is struggling with an acute hunger crisis that has affected at least 17 million people, more than a third of them considered close to famine. Yemen also suffering a cholera scourge that has sickened nearly one million.

 

“Humanitarian supply lines to Yemen must remain open,” said Robert Mardini, the Red Cross’s regional director for the Near and Middle East. “Food, medicine and other essential supplies are critical for the survival of 27 million Yemenis already weakened by a conflict now in its third year.”

Since then, the Saudis have opened the port of Aden and a crossing at Wadea, but this is woefully inadequate.

As Al Jazeera notes:

On Friday, the UN office for the coordination of humanitarian aid, OCHA, said the coalition was still blocking desperately needed UN aid deliveries to Yemen, despite the reopening of Aden and Wadea.

 

“Humanitarian movements into Yemen remain blocked,” said OCHA spokesman Russell Geekie.

 

“The reopening of the port in Aden is not enough. We need to see the blockade of all the ports lifted, especially Hodeida, for both humanitarian and for commercial imports.”

 

UN aid chief Mark Lowcock told the Security Council this week that unless the blockade is lifted, Yemen will face “the largest famine the world has seen for many decades, with millions of victims”.

 

Stylianides echoed Lowcock’s concerns.

 

Yemen “is suffering the world’s worst humanitarian crisis, with more than two-thirds of its population in need of humanitarian assistance”, he said in a statement.

 

“The EU shares the concerns expressed by… Lowcock and calls for full and unrestrained access to be restored immediately, to avoid Yemen suffering the largest famine in decades,” Stylianides said.

What we’re looking at here is potentially the worst famine in decades, and it’s important for decent U.S. citizens from across the political spectrum to admit our government’s hands are soaked in blood.

As The Intercept reported:

Saudi Arabia relies heavily on the U.S. military for intelligence sharing, refueling flights for coalition warplanes, and the transfer of American-made cluster bombs, rockets, and other munitions used against targets in Yemen.

 

Congress, however, has never authorized U.S. support for the war, which has caused 10,000 civilian deaths and has spiraled in recent months into one of the worst humanitarian crises of the century. For two years, Saudi Arabia and its allies have imposed a sea and air blockade around Yemen. Now, more than 7 million Yemenis face starvation and thousands, mostly children, are dying from cholera. Coalition warplanes have repeatedly struck crowded markets, hospitals, power plants, and other civilian targets.

 

Several members of Congress indicated an interest in the issue, noting that the Obama and Trump administrations’ reliance on the 2001 Authorization for Use of Military Force to justify U.S. involvement in the conflict is absurd. That authorization, after all, was designed to fight the terrorist groups responsible for the September 11 attacks, not to intervene in Yemen’s civil war.

 

For 16 years, the executive branch has pointed to the AUMF as legal justification for its involvement in conflicts across the Middle East and Africa, a strategy that is legally questionable. But the use of the AUMF in the Yemeni context is especially bizarre given that the AUMF’s target is Al Qaeda, and the group AQAP — Al Qaeda in the Arabian Peninsula –is fighting alongside the U.S.-Saudi coalition against the Houthi rebels.

 

One bipartisan legislative attempt to force a vote on authorization for the war, H.Con.Res.81, faced a major setback last week after appearing to gain political momentum. On November 1, lawmakers stripped the bill of its privileged status, meaning the bill no longer maintains a fast-track to a floor vote. The legislation was designed to invoke the War Powers Act of 1973 to terminate U.S. involvement in the Yemen War.

 

Because the bill is no longer privileged, it will head back to the the House Foreign Affairs Committee, which is led by Rep. Ed Royce, R-Calif., a lawmaker who has expressed deep support for the Saudi-led military campaign. Few expect the legislation to move forward now that it is back in Royce’s domain. In April, the representative read a statement of support for the Saudi-led campaign in Yemen and entered into the congressional record an opinion column written by a Saudi general.

 

The move to crush H.Con.Res.81 was apparently negotiated by Democratic and Republican leadership. As part of a compromise, there will be some congressional debate over the war, though no on-the-record vote for authorization. As The Intercept previously reported, Rep. Steny Hoyer, D-Md., the Democratic whip, was among the Democratic leaders opposed to invoking the War Powers Act to bring U.S. involvement in the war to an end.

 

Still, sponsors of the legislation are hoping to force a debate and an on-the-record vote over the war.

 

“Our national security interests in Yemen are unclear, yet we are giving money and military assistance to Saudi Arabia so they can continue to wage war in Yemen,” said Rep. Thomas Massie, R-Ky., one of 43 co-sponsors. “This military action was never authorized by Congress and the American people deserve an open debate by their elected officials.”

 

Rep. Walter Jones, R-N.C., also a co-sponsor of the resolution, expressed frustration that House Speaker Paul Ryan has refused to allow a vote on the war and disappointment that the compromise solution negotiated by congressional leadership will not include a binding vote.

 

“This is part of my frustration about the fact Congress does not meet its constitutional responsibility when sending young men and women to die for this country, and we have a constitutional duty that we must debate war,” Jones said. “The vote to go to war in Yemen, we can’t even get a vote on this resolution. To me this is the way Congress does not work. We don’t work because we do not uphold the constitution.”

Meanwhile, many of the cretins in Congress can’t be bothered to answer questions about Yemen.

Unconstitutional war that could create the worst famine in decades? Meh, I’m too busy trying to figure out how to provide tax breaks to oligarchs.

After all, who cares, there’s just too much money to be made from war.

From The Washington Post:

BERLIN — As U.N. and international humanitarian agencies raise the alarm over the Saudi blockade of aid deliveries to Yemen, European and American officials have remained mostly silent. The few remarks coming out of Western capitals in recent weeks have hardly been messages of support for the Yemenis in the midst of a catastrophic humanitarian crisis — in fact, quite the opposite.

 

Two weeks ago, Britain’s then-Defense Minister Michael Fallon offered a blunt assessment of the government’s view on the controversy. “I have to repeat, sadly, to this committee that obviously other criticism of Saudi Arabia in this Parliament is not helpful,” Fallon told the parliamentary defense committee, to which he defended the planned sale of several fighter jets to Saudi Arabia. (Fallon has since resigned over sexual harassment allegations.)

 

In response to a missile attack from Yemeni territory targeting Saudi Arabia — which triggered the most recent escalation of the crisis — President Trump similarly ignored the plight of civilians in the war-torn country and instead went on to praise U.S. weapons sold to Saudi Arabia.

 

Both the United States and Britain have been making more money with arms sales to Saudi Arabia in recent years than ever before. Human rights critics fear that Saudi Arabia has not only bought their weapons but their acceptance for its policies.

 

 

Of course Saudi Arabia’s attractiveness to Western countries is not just about arms sales. On Thursday, Downing Street said it would provide Saudi energy giant Aramco with credit guarantees of $2 billion to facilitate trade between the two countries. Britain and the United States are both trying to persuade Aramco to hold its much anticipated IPO (valued at hundreds of billions of dollars) on the London and New York stock exchanges, with President Trump tweeting that such move would be “Important to the United States!”

 

In the United States, the Obama administration similarly suspended the sale of precision guided munitions to Riyadh last year. However, the Trump administration is believed to be working on the resumption of such sales. A separate major U.S. arms export deal to the kingdom was struck in May, and Trump has voiced increasingly strong support for the Saudi leadership ever since. Similarly, Germany is still exporting military equipment to the kingdom, although it now appears to be refraining from direct arms deliveries.

If that’s not MAGA, then I don’t know what is.

If E.U. politicians were determined to implement an arms embargo on Saudi Arabia, parliamentarians would have to persuade the governments of all member states to agree to such a ban. With more than a dozen nations profiting from arms and military equipment exports to the kingdom, the chances of such an embargo being implemented anytime soon are virtually nonexistent.

 

Attempts by nongovernmental organizations to force governments into committing to an embargo enforced by courts have so far also been blocked. Campaigners suffered a major defeat this summer, when London’s high court ruled that Britain was not complicit in alleged war crimes in Yemen by allowing the Saudi military to use its arms.

 

The court refused to say how it came to its conclusion, however, and barred the public from accessing the key evidence.

It always makes sense when you follow the money.

*  *  *

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via http://ift.tt/2ACjCkE Tyler Durden

Over the weekend, CNBC reported on five companies that halted all advertisements of their products on Fox News’ Sean Hannity show. These companies included:

• 23 and Me
• Eloquii
• Keurig
• Nature’s Bounty
• Realtor.com

The story began last Thursday, with the sexual allegations against Roy Moore, the Alabama senate candidate who, The WaPo reported that day, made sexual advances towards four teenagers when he was in his early 30s. As of today, there is even a fifth women accusing Moore of sexual misconduct.

After the story broke on Thursday, Fox host Sean Hannity came out and asked his audience to give Moore the benefit of the doubt. According to NYTimes,

Mr. Hannity, describing those actions on his radio show while speaking with a co-host, Lynda McLaughlin, seemed to justify Mr. Moore’s reported conduct by calling one of the encounters “consensual.”

Hours later “On his television show, Mr. Hannity said that the statement “was absolutely wrong” and that he “misspoke.” He then brought up the possibility of accusers lying for money, or for political purposes.”

The following day, Angelo Carusone, President of Media Matters, a ‘politically progressive media watchdog’ that monitors “conservative misinformation in the U.S. media” said this to Keurig:

Good afternoon @Keurig. You are currently sponsoring Sean Hannity’s show. He defends child molester Roy Moore and attacks women who speak out against sexual harassment. Please reconsider.

— Angelo Carusone (@GoAngelo) November 10, 2017

On Saturday, Keurig responded by saying “we worked with our media partner and FOX news to stop our ad from airing during the Sean Hannity Show”.

Angelo, thank you for your concern and for bringing this to our attention. We worked with our media partner and FOX news to stop our ad from airing during the Sean Hannity Show.

— Keurig (@Keurig) November 11, 2017

What happened next was a firestorm on social media that swept across the United States late Saturday into Sunday. The bulk of the trend #BoycottKeurig exploded on Sunday, as many conservatives who have boycotted the NFL because of kneeling problems, decided they had to urgently get involved in the latest bitter debate splitting America. We start with ‘Snoop Baily’ who smashed the living hell out of Keurig with a driver.

Join me & @AngeloJohnGage in the #KeurigSmashChallenge & learn how to crush your drives as a bonus.#BoycottKeurig#IStandWithHannity#BuyBlackRifleCoffee#MAGA http://pic.twitter.com/WH3unkpADI

— Snoop Bailey (@vol80) November 12, 2017

Deplorables back @seanhannity ???? @Keurig is junk anyway http://pic.twitter.com/aHOT06pcm8

— Proud American (@montgomerychamp) November 12, 2017

I pulled an “Office Space” with my Keurig… Would be a shame if everyone else joined me in the Keurig Smash Challenge #BoycottKeurig #IStandWithHannity #SundayMorning http://pic.twitter.com/yEADeRC006

— Angelo John Gage (@AngeloJohnGage) November 12, 2017

To keep it short, this is what it looks like when a sizable chunk of the US decides to go “Office Space”:

Made a compilation for the #Keurig smash challenge .@seanhannity #IStandWithHannity#BoycottKeurig#KeurigSmashChallenge #KeurigBoycott http://pic.twitter.com/L8cXAZMgoZ

— ????????Jojoh888???????????? (@jojoh888) November 13, 2017

For a while, Hannity played along with the trend empowering it to grow through his enormous social media network as conservatives were called to action to smash Keurig machines. As the day closed, he then told his audience that he was buying 500 coffee makers to give away on Monday.

Deplorable friends, I am buying 500 coffee makers tomorrow to give away!! Details on radio and TV. Hint; best videos!!

— Sean Hannity (@seanhannity) November 13, 2017

On Monday, however, the Krush The Keurig fun ended when Hannity told his audience to stop smashing the Coffee machines, after Keurig CEO apologizes for ‘taking sides’…

Hannity asks supporters to stop smashing their Keurig machines, says he’ll replace the ones already smashed http://pic.twitter.com/YVVpbXw6RU

— David Rutz (@DavidRutz) November 13, 2017

Moore’s sexual allegations aside, which have yet to be rejected or confirmed, what is more concerning is the blind willingness of substantial portions of the population to succumb to instant mobilization through social media and or a media figure(s), to collectively work as a unit in completing tasks, in this case the destruction of one’s own property. Ironically, something tells us that for Keurig the news that its machines were being “Office Spaced” across the nation, was music to the CEO’s ears (think replacement value), not to mention the unprecedented media exposure as virtually everyone spent the day talking about the incident (think unlimited advertising).

Keurig is getting more airtime than any other advertiser on Hannity’s show

— Pardes Seleh (@PardesSeleh) November 13, 2017

There’s more: as The Atlantic writes, “in destroying Keurig machines also clearly aligns these people with a global environmentalist movement. In 2015, the “Kill the K-Cup” campaign took hold among those concerned about the net waste of so many pods. A Canadian advocate encouraged people to publicly abandon the machines.”

Now America finds itself in the midst of hordes of angry people with clubs who will soon be going through caffeine withdrawal. They could go to Starbucks, though the chain has also been condemned and boycotted by some isolationist conservatives, since earlier this year it promised to hire 10,000 refugees in response to President Trump’s executive order barring them from the country.

Meanwhile, always eager to ride on the latest social media trend, corporate America has promptly noticed the events over the past 72 hours, and it is guaranteed that many more companies will follow in Keurig’s activist footsteps. Who knows: the resultant breaking and smashing of various “resistance” products may just end up being the CapEx spark that the US economy so desperately needs…

via http://ift.tt/2ADogPf Tyler Durden

Poor Elon Musk just can’t catch a break.  After admitting that Tesla hasn’t yet figured out how to weld (a fairly critical task for auto OEMs), blowing through Model 3 production deadlines (which probably had something to do with rumors that ‘the most advanced auto OEM in the world” was making components by hand), and firing 100’s of employees, the embattled company now finds itself locked in yet another employee lawsuit…this time filed by over 100 black employees alleging racial discrimination.

Filed in the Superior Court in Alameda County, Musk’s latest legal nightmare alleges, among other things, that his Fremont manufacturing facility is a “hotbed for racist behavior” in which employees and supervisors “regularly use the ‘N word.'”  Per Bloomberg:

Tesla Inc.’s production floor is a “hotbed for racist behavior,” more than 100 African-American employees claimed in a lawsuit in which they alleged black workers at the electric carmaker suffer severe and pervasive harassment.

 

The employees are seeking permission from a judge to sue as a group and are seeking unspecified general and punitive monetary damages as well as an order for Tesla to implement policies to prevent and correct harassment.

 

“Although Tesla stands out as a groundbreaking company at the forefront of the electric car revolution, its standard operating procedure at the Tesla factory is pre-Civil Rights era race discrimination,” the employees said in the complaint, filed Monday in California’s Alameda County Superior Court.

 

The lawsuit was filed on behalf of Marcus Vaughn, who worked in the Fremont factory from April 23 to Oct. 31. Vaughn alleged that employees and supervisors regularly used the “N word” around him and other black colleagues. Vaughn said he complained in writing to human resources and Musk and was terminated in late October for “not having a positive attitude.”

Of course, this seems to be the continuation of a lawsuit filed by 3 workers in Alameda County last month (we noted it here: Tesla Sued For “Hostile Work Environment” After “Racist Drawings, Epithets” Appear In Factory) which also alleged that Tesla effectively contributed to the creation of a “hostile work environment” after “racist drawings and epithets” were found sprinkled around the Fremont plant.

Three former Tesla factory workers charge in a new suit the company’s factory is a hostile environment for black workers, adding to earlier accusations of racial harassment.

 

The men, who are African-American, claim in a new complaint filed Monday in state court that Tesla supervisors and workers used racial epithets and drew racist graffiti on cardboard boxes.

 

The suit, filed in Alameda County Superior Court, claims Owen Diaz and his son, Demetric, were called the N-word while they worked at the Fremont factory, and supervisors did little to stop it. A third man, Lamar Patterson, also claims he was subjected to insensitive racist remarks.

 

Demetric Diaz complained about the regular use of epithets to the staffing agency and another supervisor, the suit said. The supervisor told him he was just a replaceable temporary worker. Diaz was dismissed less than a week later in October 2015.

Making matters even worse, this latest lawsuit also disclosed an email from Musk in which he tells minority workers that they need to “be thick-skinned.”

According to the complaint, Musk sent an email to Tesla factory employees on May 31.

 

“Part of not being a huge jerk is considering how someone might feel who is part of [a] historically less represented group,” Musk wrote in the email. “Sometimes these things happen unintentionally, in which case you should apologize. In fairness, if someone is a jerk to you, but sincerely apologizes, it is important to be thick-skinned and accept that apology.”

Not surprisingly, Mr. Vaugn’s lawyer was quick to point out that there is no legal precedent requiring employee’s to “have a thick skin.”

“The law doesn’t require you to have a thick skin,” Organ said in an interview Monday. “Tesla is not doing enough. It’s somewhat akin to saying ‘stop being politically correct.’ When you have a diverse workforce, you need to take steps to make sure everyone feels welcome in that workforce.”

Perhaps someone with some level of people skills should handle all firm-wide email blasts going forward…just a thought, Elon.

via http://ift.tt/2mniRJZ Tyler Durden

One wouldn’t know it by looking at the moves in equity indexes, but this earnings season has been unusually volatile for stocks, which however has yet to translate into bigger moves at the macro level. That is the bizarre observation made by Goldman’s derivatives strategist John Marshall (whose team grew by one when ex-Deutsche Banker Rocky Fishman joined recently).

As Goldman shows in the chart below, while earnings day moves have increased in the US and globally, and stock dispersion generally has jumped to the highest since the Trump election, index moves have been the smallest in years. Goldman believes this is further evidence “of increased uncertainty in the equity market.”

Quantifying the delta between the two vol indicators, Goldman writes that over the past two weeks, the SPX has moved an average of 0.17% per day (1-standard deviation BELOW its 3-year average), while looking under the hood at the stocks in the S&P 500 the standard deviation of returns has been 1.8% on average (1-standard deviations ABOVE its 3-year average). As an indication of just how much turblience there is below the surface, earnings day moves are 4.2x average daily moves for US stocks (3.6x for European and 2.3x for Asian) in this earnings season so far.

Using the charts below, Goldman shows the earnings day absolute move in stocks relative to the non-earnings days 1 month before and after. This includes data through November 9, 2017 for the current quarter. Earnings day moves are above average levels relative to the past decade, while non-earnings days have had lower volatility.

What does this bifurcated volatility pattern mean? According to Goldman, “this as evidence that fundamental uncertainty is rising (stock moves on earnings days) while general macro fears have fallen (stock moves on non-earnings days).” In practical terms, and based on the relationship of index volatility and the standard deviation of S&P 500 stock returns over the past 15 years, Marshall writes that he would expect “the SPX to be moving 90bps per day rather than the current 17bps. This implies realized volatility above 15%.” Of course, that may not be possible (or allowed by central banks) because as we wrote two weeks ago, the beta of VIX spot has exploded to -19, which means that even a mere 90bps down day in the S&P could launch a self-reinforcing vol cascade which crushes the millions of vol sellers, unleashing a another sharp correction, or worse.

Goldman’s conclusion:

A rise in single stock volatility is generally associated with a decline in equity returns. Based on the relationship between the standard deviation of S&P 500 stock returns and forward returns in the SPX over the past 15 years  (controlling for index returns and index volatility), this elevated level of stock volatility would suggest a decline in the SPX of 0.8% over the next two weeks +/- 1.5%.

Alas, that observations is completely meaningless as due to the margin of error, the market can rise by 0.7% and Goldman can still claim it was right.

In any case, Goldman ends on a cautious note and warns that “while we do not believe this alone is a compelling reason to sell the market today (or buy VIX), we believe it is a trend worth monitoring closely.“

via http://ift.tt/2yZD5PD Tyler Durden

Authored by Scott Greer via The Daily Caller,

“Can my children be friends with white people?”

This bizarre question is the basis of a New York Times op-ed published Sunday, and the author answers it with a “no,” albeit with some exceptions.

“History has provided little reason for people of color to trust white people in this way [of genuine friendship], and these recent months have put in the starkest relief the contempt with which the country measures the value of racial minorities,” writes Ekow N. Yankah, a law professor at Yeshiva University.

WATCH CNN COMMENTATOR CALL TRUMP A WHITE SUPREMACIST:

According to Yankah, examples of white “contempt” for racial minorities in recent months include concerns over the opioid epidemic, worries over rising unemployment among working-class whites, and criticism of NFL players kneeling for the anthem. Apparently those issues receive far more attention than the woes of African-Americans, thus revealing the secret disdain whites have for non-whites.

With that conclusion assumed, Yankah declares the lesson he will teach his kids.

“As against our gauzy national hopes, I will teach my boys to have profound doubts that friendship with white people is possible,” the law professor argues.

 

“When they ask, I will teach my sons that their beautiful hue is a fault line. Spare me platitudes of how we are all the same on the inside. I first have to keep my boys safe, and so I will teach them before the world shows them this particular brand of rending, violent, often fatal betrayal.”

Throughout the article, Yankah bases this pessimistic attitude not on personal experience — he says his childhood hometown was remarkably free of racial tension — but on Donald Trump being president and the violence in Charlottesville.

A large number of white people voting for Trump is the final push in giving up on Caucasians.

“Of course, the rise of this president has broken bonds on all sides. But for people of color the stakes are different. Imagining we can now be friends across this political line is asking us to ignore our safety and that of our children, to abandon personal regard and self-worth,” the professor asserts.

 

“Only white people can cordon off Mr. Trump’s political meaning, ignore the “unpleasantness” from a position of safety. His election and the year that has followed have fixed the awful thought in my mind too familiar to black Americans: ‘You can’t trust these people.”

He also attacks liberals who don’t protest enough or dare to criticize the excesses of racial activism as marked off from friendship.

While Yankah sounds exceptionally grim in his article on interracial friendship, he admits near the end that he has still lots of white friends and his biracial wife passes as Caucasian. Those facts undermine the seriousness of Yankah’s argument, but his intention is clearly not advocating for the total forsaking of interracial friendship.

It’s just another article attempting to shame whites for being, well, white. Yankah counts on The New York Times’ liberal audience to sympathize with his argument and ask themselves what more can they do for radicals like this law professor.

Voting for Democrats isn’t enough. Being a good neighbor to non-whites isn’t enough. Showing no sign of racism isn’t enough.

You must use all your time and energy protesting Trump and advocating for the Black Lives Matter agenda in order to earn trust from non-whites. Otherwise, you’re in the same league as those irredeemable Trump voters.

The deeper meaning of Yankah’s article is that whiteness is itself the 21st century’s Mark of Cain. Bearing that skin color means one is born with the taint of sin from historical injustices and present election outcomes.

One can only atone for this inherent evil by trying to be the wokest white dude possible, and never criticize the actions of those who don’t bear this awful color.

It’s a crazy concept that undermines the last 60 some years of teaching on race. Race is taught to be a social construct that we’re supposed to be getting over with time. You’re not supposed to judge someone by the color of their skin but by their individual character, according to the old consensus.

Columns like Yankah’s shows the reverse of that, pedestaling race as the chief factor in judging another person. And whites come out the worst in this process.

It’s worth remembering that Yankah is professor, and students are indoctrinated with similar messages on a regular basis as my book, “No Campus for White Men,” documents.

When views similar to the Yeshiva law professor’s are the norm, it’s no surprise that such a simple statement as “it’s okay to be white” causes such an uproar on campus.

Spurred on by 4chan, anonymous students have been posting signs declaring it’s okay to be white on campuses across the country. Not that’s it’s better to be white or that it’s great to be white. Simply that it’s okay to be Caucasian.

Those messages, instead of being ignored, have triggered university administrators and campus leftists into seeing the postings as outbursts of dangerous racism.

Marcia L. Sells, Harvard Law School dean, warned in a typical reaction to the messages that they were attempting to divide the university.

“HLS [Harvard Law School] will not let that happen here. We live, work, teach, and learn together in a community that is stronger, better, and deeper because of our diversity and because we encourage open, respectful, and constructive discourse,” Sells wrote in an email to students.

The overreaction to these rather benign posters sends the message that it is not okay to be white. Ignoring them as pranks would mean that schools accept “it’s okay to be white” as so basic that it would be like proudly boasting it’s okay to be left-handed.

But the meltdowns from campus activists and all-too serious concern from school deans means that there is something inherently wrong in stating it’s alright to be white.

With opinions like Yankah’s receiving a platform from America’s paper of record, more people should wake up to how a large percentage of higher education is teaching there’s something inherently wrong with one particular skin color.

Does that sound like an idea that will lead to more harmony in the country?

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The pressure is mounting on Roy Moore as another woman has come forward with sexual misconduct allegations against the GOP Senate candidate for Alabama, accusing him of grabbing her when she was a minor.

During a press conference on Monday with attorney Gloria Allred, Beverly Young Nelson said she was sexually assaulted by Moore when she was around 15 and 16 years old.

The Hill reports that Nelson said Moore sexually assaulted her one night after work. Moore had offered to give her a ride home after her shift at a local diner had ended, upon noticing that her boyfriend was running late to pick her up, according to Nelson's account.

But instead of driving her home, Nelson said he parked the car at the back of the restaurant where “there were no lights,” and began “groping her.”

 

“I was alarmed and I immediately asked him what he was doing. Instead of answering my questions, Mr. Moore reached over and began groping me," she said, adding that Moore reached over and locked the car door while she yelled at him to stop and continued to try to fight him off.

 

Moore then grabbed her neck and pushed her head toward his “crotch,” Nelson recalled.

 

“I was terrified. He was also trying to pull my shirt off. I also thought he was trying to rape me. I had tears running down my face,” she said.

 

Nelson said Moore eventually gave up and threatened her that no one would believe her story.

 

“You’re just a child and I am the district attorney at Etowah County. And if you ever told anyone about this, they will never believe you,” Nelson says Moore said before she escaped from the car.

 

Nelson said she feared Moore would retaliate if she spoke out about the attack, so she kept quiet for years before confiding in her sister, mother and future husband.

 

“I thought he would do something to me or my family so I decided to keep what happened to myself,” she said.

And following Senate Majoriy leader McConnell's calls for him to step aside, The Hill reports that Sen. Cory Gardner (R-Colo.), who leads the Senate GOP campaign arm, is calling on the Senate to expel embattled Alabama GOP nominee Roy Moore if Moore wins December's special election, the first GOP senator to publicly raise the specter of expulsion.

"I believe the individuals speaking out against Roy Moore spoke with courage and truth, proving he is unfit to serve in the United States Senate and he should not run for office," Gardner said

 

"If he refuses to withdraw and wins, the Senate should vote to expel him, because he does not meet the ethical and moral requirements of the United States Senate."

Under the Senate rules, a vote of two-thirds of the body can expel a Senator.

That would be historic – the Senate hasn't expelled a member since 1862.

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Authored by Alberto Gallo via WEForum.org,

 

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Baahhhhh…

 

The day started off with the 4th down day in a row for Japanese stocks…the biggest drop since April.

 

It was quite a day for a few key assets…

GE collapsed…

Chipotle crashed then ripped back…

 

EM Debt has been pummeled…

 

Biotechs puked…

 

Bitcoin was battered then bounced…

 

And then there's Roku… $18.42 to $47.49 in 3 days…

 

But none of that matters silly – the Dow was green

 

VIX ended higher on the day but was clubbed likje a baby seal at the US open…

 

Small Caps lagged but are glued to their 50DMA…

 

Futures show the ramp at the US equity open…

 

Thanks to an epic rip at the open in USDJPY…

 

JNK (HY Bond ETF) has seen outflows for 5 days straight with Friday among the biggest outflows on record… (HYG has seen outflows on 10 of the last 12 days)

 

And HY remains entirely decoupled from stocks…

HYG held at its lows…

 

Treasury yields were mixed with the long-end outperforming (30Y -1.5bps) and the short-end weak (2Y +3bps)…

 

10Y ramped back to the 2.40% Maginot Line…

 

With a reversion to the flattening trend…

 

The Dollar Index rebounded modestly today but was trendless…

 

Crude flatlined on the day but copper and silver saw a panic-buying algo strike around 0830ET

 

Gold never jumped on Silver's surge…

 

And Copper's outperformance continues to signal 3.00% 10Y yield…

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