Month: October 2016

Submitted by Stefanie MacWilliams via PlanetFreeWill.com,

Could these connections be enough to implicate the Clinton Foundation in the alleged early vote rigging in Texas?

As usual, the internet has come through as the ultimate watchdog while the supposed safeguards of our democracy have failed.

A Gab user by the name “Special Prosecutor Will Logan” has found some stunning information. 

Note: as Gab is a members only site, you’ll have to join to see his actual posts, but we included all pertinent information in the article.

Click to enlarge

According to OpenSecrets, the company who provided the alleged glitching voting machines is a subsidiary of The McCarthy Group.

The McCarthy group is a major donor to the Clinton Foundation – apparently donating 200,000 dollars in 2007 – when it was the largest owner of United States voting machines. Or perhaps the 200,000 dollars went to paying Bill Clinton for speeches?

Either way, it doesn’t look good.

But there’s more.

As the same user notes in this post, Dominion Voting Systems and The Clinton Foundation did a 2.25 million dollar charity initiative in developing nations together called the DELIAN Project.

According to the project’s own website:

In 2014, Dominion Voting committed to providing emerging and post-conflict democracies with access to voting technology through its philanthropic support to the DELIAN Project, as many emerging democracies suffer from post-electoral violence due to the delay in the publishing of election results. Over the next three years, Dominion Voting will support election technology pilots with donated Automated Voting Machines (AVM), providing an improved electoral process, and therefore safer elections. As a large number of election staff are women, there will be an emphasis on training women, who will be the first to benefit from the skills transfer training and use of AVMs. It is estimated that 100 women will directly benefit from election technology skills training per pilot election.

Of course, this is all speculation, and we are not making any claims of illegal activity by the Clinton Foundation.

However, it presents a very troubling conflict of interest. Most Americans would certainly agree that voting machines should have zero connection to presidential candidates and their foundations.

Consider the implications further abroad, as well. Could this DELIAN Project be designed to influence elections in developing nations?

It can certainly be argued that electronic voting machines do not in fact provide an “improved electoral process” or provide “safer elections”

Again, this is speculation.

But we will be keeping an eye on this story if and when more information becomes available.

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“It’s Halloween and that can only mean one thing… people who wear offensive costumes are literally Hitler.”

This Halloween, don’t be Hitler and have a trigger-free trick-or-treat by following the advice of Lauren and Faith from Rebel Media…

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Submitted by Jeffrey Snider via Alhambra Investment Partners,

There is a growing body of public work that suggests Federal Reserve officials are prepared now for a very different sort of normalization than what had been envisioned up until this year. That comes, as noted earlier, with the realization that the economy is not just in rough shape but likely to remain that way for the foreseeable future.

The important caveat left off that bleak pronouncement is actually ceteris paribus. So long as the current policy and monetary system remains firmly in place, there is little hope the global economy will just spontaneously ignite. Since economists and central bankers have made it clear they aren’t going anywhere despite being wrong about everything up to now, here we are.

Even Janet Yellen has been forced to concede that even if the Fed does manage to get on with further rate hikes, the ultimate destination for them in nominal terms is much less than prior “cycles.” Current thinking seems to be aiming for around 3% for the federal funds rate rather than 5% as had long been accepted. The way things are going, and as the Japanese showed, they will be lucky to get even half that far.

But in what can be only another sign of just how twisted, upside down, and easily receptive to pretzel logic the mainstream is now, that is supposed to be a good thing especially for stocks. Writing today for BloombergView, Mohamed El-Erian, chief economic advisor for Allianz, makes this exact argument.

Equity investors have also been reassured by the growing — and correct — recognition that this Fed hiking cycle will depart drastically from historical norms. Instead of following a relatively linear path of increases at regular intervals, it will have pronounced “stop-go” characteristics. Also, and perhaps more importantly, the endpoint — or what economists call the “neutral rate” — will be considerably lower than recent historical averages.

How in the world is that a good thing that would “reassure” equity investors? Truly rational investors make decisions based on discounted information about the future, and what El-Erian suggests here (and he hasn’t been alone) is that stock investors show more preference for “accommodative” monetary policy than actual growth. A lower rate ceiling implies without much ambiguity continued awful economic conditions here and elsewhere around the world. But to the screwed up nature of mainstream thought, so long as monetary policy is lower overall continued stagnation is forgiven, perhaps even to be mildly celebrated?

What does it mean by claiming “accommodation” that gives “investors” so much apparent comfort? It can’t mean that in economic terms for obvious reasons; instead we are led to believe that low (meaning desperately insufficient) growth isn’t all that bad so long as interest rates don’t rise too far. Investors are supposed to be paying for growth, not the failure of interest rate “stimulus” to seed it. If the Fed feels it can’t raise rates all that much, with a true “ceiling” yet to be determined, it is a much riskier, not less risky, environment.

The idea of a lower R* or r-star is truly a defining defeat, though it is, like El-Erian’s attempt here, being spun into what is nothing more than rationalization. As I wrote in September, the falling R-star can mean nothing else:

There is more complexity when we talk about inflation, of course, but by and large it is commodity prices that have thwarted John William’s (or Janet Yellen’s) “normalizing” narrative. Commodities have been falling more intensely since the middle of 2014 but really dating back to the middle of 2011. Both of those inflections recall and are related to obvious eurodollar or global wholesale money events. Thus, even subscribing to Wicksell’s theory, the current rate must now be, as it has been, above the natural rate, unambiguously indicating “tight” money. Whether it is via Friedman’s interest rate fallacy or Wicksell’s natural rate hypothesis, both arrive at the same conclusion due to seemingly intractable market prices.

 

Central banks assume that means they have to “stimulate” more when in fact it is just their math telling them they haven’t stimulated at all – at least not where it counts and has been needed. Translating depression into econometrics is a long and costly affair, but it is at least starting to be done, slowly and in discrete pieces. R* may yet be of some great value, insofar as further calculating just how little monetary authorities know about money.

Reception of and belief about QE have been very much cult-like and it was thus too thinly constructed to withstand being so thoroughly debunked. This is not even close to making the best of a bad situation; it is instead claiming positive attributes that just don’t exist, being downright offensive to common sense. How anyone, let alone El-Erian, wrote that paragraph (contained within an article further rationalizing the latest of the “rising dollar”) without awareness of its very basic flaw can at best be described as intentionally obtuse while still bordering upon nakedly deceiving. The world of the near future is going to be bad, worse than everything “we” have been expecting, but take heart, the Fed’s monetary policy will reflect just that. Translating it from the original mainstream thought-bubble language truly reveals its truly absurd premise… The Fed failed, and that changes everything; including and especially what is to be made of “accommodation” and what it is that might have “reassured” equity investors in the past and might do so (or not) going forward.

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Republican vice presidential nominee Mike Pence’s campaign plane just slid off the runway at LaGuardia Airport in New York City during heavy rain. Emergency crews responded to the incident, but journalists on the plane quickly tweeted that there were no injuries.

 

BREAKING: Campaign plane carrying Gov Mike Pence skids off runway while landing at LaGuardia Airport, no injuries reported http://pic.twitter.com/L0DwgT1b28

— News Republic (@NewsRepublic) October 28, 2016

**Everyone is okay, including the candidate — but the Pence campaign plane slid off runway upon landing at LaGuardia http://pic.twitter.com/EDG1GEjVnQ

— Vaughn Hillyard (@VaughnHillyard) October 27, 2016

Emergency crew on site. The governor stood up and made sure everyone was okay. https://t.co/rFHIVM0K9Q

— Vaughn Hillyard (@VaughnHillyard) October 27, 2016

#Breaking:Mike Pence campaign plane slid off the runway upon landing at New York’s LaGuardia Airport http://pic.twitter.com/5B7kqPQ4VI

— Michael Delauzon (@MichaelDelauzon) October 28, 2016

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After coming under intense criticism for alleged pay-to-play activities, Bill and Chelsea Clinton recently sat down with Billboard to defend the Clinton Foundation and all of the great work it does…apparently like hosting concerts with Elton John, Usher, Bon Jovi and Sting.  Of course, the attempts to repair the Foundation’s tarnished image come as it has suffered in recent weeks from the relentless daily flow of damaging emails leaked by WikiLeaks showing numerous internal conflicts of interest, donations from questionable foreign leaders and seemingly blatant “pay-to-play” activities involving the Clintons’ work in Haiti and elsewhere.

Bill Clinton, vibrant and trim at 70, in a tailored navy suit and a bright red tie, strolls into Billboard’s makeshift photo studio at the New York Hilton Midtown in late September, during the 12th and final meeting of his charitable foundation, the Clinton Global Initiative (CGI), which has long tapped musicians to give voice to causes. “It’s astonishing the impact they’re ­having,” says the president about the artists he has worked with through the years, from Elton John to Usher. Right now, rock legends Jon Bon Jovi and Sting trail him quietly like starstruck roadies.

 

Their family name is getting dragged through the mud along with the reputation of the foundation to which Clinton has ­dedicated his post-White House life. While Hillary remains the clear frontrunner in the election, with just days to go, a steady drip of embarrassing-at-best hacked emails, released by WikiLeaks, has dampened spirits during her ­campaign’s stretch run. In the latest example, on Wednesday (Oct. 26), media outlets reported on a leaked memo from 2011 that raises further concerns about the intersection of the former president’s charitable work with his and his colleagues’ personal enrichment, in which a veteran aide to the president said that Clinton “gets many expensive gifts” from donors, while Chelsea warned of various aides profiting from the Foundation’s endeavors.

Of course, Bill and Chelsea would suggest that we all simply ignore their internal emails and understand that “First and foremost the Clinton Foundation is a charity, and somehow that has gotten lost.”  As Chelsea points out, everyone would surely be proud of the Clinton Foundation if they could just look beyond the “clickbait headlines” that keep trying to spread the malicious truth.

“It’s hard to hear because I know good and well that a lot of the people that are ­saying it know it’s not true. It’s an insult to all the people who have worked there. But the people who have ­contributed know, and the people who have done the work know, and sometimes that’s got to be enough.” His daughter, Chelsea, who is vice ­chairman of the foundation, is troubled by the ­accusations too. “First and foremost the Clinton Foundation is a charity, and somehow that has gotten lost,” she says.

 

The ­Clinton Foundation uses 10 percent of its endowment in the way any ­foundation would: to fund charitable work. But most of the ­remaining 90 percent goes toward charitable work the ­organization carries out itself, along with its various partners. “We have been very transparent about the work that we do and how it’s funded, and that 87 percent of our funds go directly to our work,” says Chelsea. “I would hope that if people spend a little bit of time looking beyond the clickbait headlines, they’ll realize why I am so proud.”

 

Ironically, it was Chelsea and and long-time Clinton aide Doug Band who supplied most of the “clickbait”…we couldn’t possibly make up material this good:

Oddly, wjc does not have to sign such a document even though he is personally paid by 3 cgi sponsors, gets many expensive gifts from them, some that are at home etc

 

I could add 500 different examples of things like this and while I removed lasry bc they are all on the offense, I get the sense that they are trying to put some sort of wrong doing on me after the audit as a crutch to change things and if I don’t mention things like lasry where they all have issues, I may regret it

 

But, as Bill points out, even if Hillary wins the White House he’s not done with his personal enrichment schemes charitable work.  While he admits that continuing to accept money from foreign leaders might be complicated, he’s quite confident that he can still raise money from “Friends of Bill” here in the U.S.

But Clinton will need something to do during the next four to eight years, and he has a vision for what a resurrected CGI would look like — “if,” he says, “Hillary becomes president.” He says accepting donations from foreign countries would not be possible, but they could work through that. “What we’re going to do,” he says, “is take everything that’s funded by ­foreign funds and either spin it all to independent ­foundations that I’m not involved in, or we’re going to make those things ­independent and let them be taken over by someone else. But in America we should still be able to run a lot of these health programs with just individual contributions, not corporate.”

Yes, we’re also sure there is a substantial amount of money that can be raised from personal donors looking for a little leverage.

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Submitted by Mike Krieger via Liberty Blitzkrieg blog,

WAR is a racket. It always has been.

 

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

 

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

 

– From Major General Smedley Butler’s War is a Racket

Former Congressman Dennis Kucinich has just penned an extremely powerful warning about the warmongers in Washington D.C. Who funds them, what their motives are, and why it is imperative for the American people to stop them.

The piece was published at The Nation and is titled:   Why Is the Foreign Policy Establishment Spoiling for More War? Look at Their Donors.

Read it and share it with everyone you know.

Washington, DC, may be the only place in the world where people openly flaunt their pseudo-intellectuality by banding together, declaring themselves “think tanks,” and raising money from external interests, including foreign governments, to compile reports that advance policies inimical to the real-life concerns of the American people.

 

As a former member of the House of Representatives, I remember 16 years of congressional hearings where pedigreed experts came to advocate wars in testimony based on circular, rococo thinking devoid of depth, reality, and truth. I remember other hearings where the Pentagon was unable to reconcile over $1 trillion in accounts, lost track of $12 billion in cash sent to Iraq, and rigged a missile-defense test so that an interceptor could easily home in on a target. War is first and foremost a profitable racket.

 

How else to explain that in the past 15 years this city’s so called bipartisan foreign policy elite has promoted wars in Iraq and Libya, and interventions in Syria and Yemen, which have opened Pandora’s box to a trusting world, to the tune of trillions of dollars, a windfall for military contractors. DC’s think “tanks” should rightly be included in the taxonomy of armored war vehicles and not as gathering places for refugees from academia.

 

According to the front page of this past Friday’s Washington Post, the bipartisan foreign-policy elite recommends the next president show less restraint than President Obama. Acting at the urging of “liberal” hawks brandishing humanitarian intervention, read war, the Obama administration attacked Libya along with allied powers working through NATO.

Indeed, I warned about this in last week’s piece: U.S. Foreign Policy ‘Elite’ Eagerly Await an Expansion of Overseas Wars Under Hillary Clinton.

The think tankers fell in line with the Iraq invasion. Not being in the tank, I did my own analysis of the call for war in October of 2002, based on readily accessible information, and easily concluded that there was no justification for war. I distributed it widely in Congress and led 125 Democrats in voting against the Iraq war resolution. There was no money to be made from a conclusion that war was uncalled for, so, against millions protesting in the United States and worldwide, our government launched into an abyss, with a lot of armchair generals waving combat pennants. The marching band and chowder society of DC think tanks learned nothing from the Iraq and Libya experience.

 

The only winners were arms dealers, oil companies, and jihadists. Immediately after the fall of Libya, the black flag of Al Qaeda was raised over a municipal building in Benghazi, Gadhafi’s murder was soon to follow, with Secretary Clinton quipping with a laugh, “We came, we saw, he died.” President Obama apparently learned from this misadventure, but not the Washington policy establishment, which is spoiling for more war.

 

The self-identified liberal Center for American Progress (CAP) is now calling for Syria to be bombed, and estimates America’s current military adventures will be tidied up by 2025, a tardy twist on “mission accomplished.” CAP, according to a report in The Nation, has received funding from war contractors Lockheed Martin and Boeing, who make the bombers that CAP wants to rain hellfire on Syria.

 

The Brookings Institute has taken tens of millions from foreign governments, notably Qatar, a key player in the military campaign to oust Assad. Retired four-star Marine general John Allen is now a Brookings senior fellow. Charles Lister is a senior fellow at the Middle East Institute, which has received funding from Saudi Arabia, the major financial force providing billions in arms to upend Assad and install a Sunni caliphate stretching across Iraq and Syria. Foreign-government money is driving our foreign policy.

 

As the drumbeat for an expanded war gets louder, Allen and Lister jointly signed an op-ed in the Sunday Washington Post, calling for an attack on Syria. The Brookings Institute, in a report to Congress, admitted it received $250,000 from the US Central Command, Centcom, where General Allen shared leadership duties with General David Petraeus. Pentagon money to think tanks that endorse war? This is academic integrity, DC-style.

 

And why is Central Command, as well as the Food and Drug Administration, the US Department of transportation, and the US Department of Health and Human Services giving money to Brookings?

 

Former secretary of state Madeleine Albright, who famously told Colin Powell, “What’s the point of having this superb military you’re always talking about if we can’t use it,” predictably says of this current moment, “We do think there needs to be more American action.” A former Bush administration top adviser is also calling forthe United States to launch a cruise missile attack on Syria.

 

The American people are fed up with war, but a concerted effort is being made through fearmongering, propaganda, and lies to prepare our country for a dangerous confrontation, with Russia in Syria.

 

The demonization of Russia is a calculated plan to resurrect a raison d’être for stone-cold warriors trying to escape from the dustbin of history by evoking the specter of Russian world domination.

 

It’s infectious. Earlier this year the BBC broadcast a fictional show that contemplated WWIII, beginning with a Russian invasion of Latvia (where 26 percent of the population is ethnic Russian and 34 percent of Latvians speak Russian at home).

 

The imaginary WWIII scenario conjures Russia’s targeting London for a nuclear strike. No wonder that by the summer of 2016 a poll showed two-thirds of UK citizens approved the new British PM’s launching a nuclear strike in retaliation. So much for learning the lessons detailed in the Chilcot report.

 

As this year’s presidential election comes to a conclusion, the Washington ideologues are regurgitating the same bipartisan consensus that has kept America at war since 9/11 and made the world a decidedly more dangerous place.

 

The DC think tanks provide cover for the political establishment, a political safety net, with a fictive analytical framework providing a moral rationale for intervention, capitol casuistry. I’m fed up with the DC policy elite who cash in on war while presenting themselves as experts, at the cost of other people’s lives, our national fortune, and the sacred honor of our country.

 

Any report advocating war that comes from any alleged think tank ought to be accompanied by a list of the think tank’s sponsors and donors and a statement of the lobbying connections of the report’s authors.

 

It is our patriotic duty to expose why the DC foreign-policy establishment and its sponsors have not learned from their failures and instead are repeating them, with the acquiescence of the political class and sleepwalkers with press passes.

 

It is also time for a new peace movement in America, one that includes progressives and libertarians alike, both in and out of Congress, to organize on campuses, in cities, and towns across America, to serve as an effective counterbalance to the Demuplican war party, its think tanks, and its media cheerleaders. The work begins now, not after the Inauguration. We must not accept war as inevitable, and those leaders who would lead us in that direction, whether in Congress or the White House, must face visible opposition.

Thank you Mr. Kucinich, I couldn’t agree more.

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Less than 9 months after emerging from Chapter 11 proceedings, American Apparel is allegedly preparing for another bankruptcy filing after turnaround efforts by the previous plan of reorganization sponsors, including Standard General, Monarch Alternative Capital, Goldman Sachs Asset Management and Pentwater Capital, have apparently failed.  While details are sparse given that the company is now privately held, a note from Bloomberg suggests that the company may be preparing a sale that would have to be implemented through a bankruptcy proceeding to allow new owners to shed leases and other liabilities associated with unprofitable stores.

American Apparel Inc. is preparing for its second bankruptcy filing in as many years, according to people familiar with the situation, capping a tumultuous stretch that included tumbling sales, red ink and a split with controversial founder Dov Charney.

 

The filing may come as soon as the next few weeks, according to the people, who asked not to be identified because the discussions aren’t public. The move could help set the stage for a sale of the Los Angeles-based company by letting it exit leases and shutter part of the retail operation, according to the people. Still, the plan isn’t yet final and could change as the holiday season approaches.

 

The clothing maker only emerged from bankruptcy in February, when former bondholders — led by Monarch Alternative Capital — took over the company. A turnaround plan to return to American Apparel’s roots and focus on basic items like T-shirts and skirts didn’t improve results enough, according to the people. The company also has hired restructuring firm Berkeley Research Group for guidance, the people said.

 

American Apparel hired investment bank Houlihan Lokey earlier this year to consider a sale after receiving interest, according to the people. The potential buyers are mainly interested in the company’s wholesale unit and the brand, they said. That leaves its roughly 200 retail stores in limbo.

Of course, American Apparel just emerged from a pre-arranged bankruptcy filing back in February with CEO Paula Schneider promising renewed financial strength via new products and revamped stores. 

“By improving our financial footing, we will be able to refocus our business efforts on the execution of our turnaround strategy,” Chief Executive Officer Paula Schneider said in the statement. The company plans to create new products, introduce new design initiatives, invest in new stores and expand its e-commerce business, she said.

That said, given rumors of a new bankruptcy filing, we’re guessing that Moelis was “slightly” off in their financial projections filed in a Disclosure Statement with the court back in November 2015.  Frankly, we’re shocked as it seems like a pretty “reasonable” forecast…no hockey stick there…though we’re not sure we would have been very excited about attesting to the “feasibility” of a plan tied to this particular projection.

 

And, like with many failed retail businesses, we suspect that the following liquidation analysis presented in the last disclosure statement now becomes the “upside” scenario for Monarch and Goldman.

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“vast right wing conspiracy…”

 

Source: Ben Garrison at GrrrGraphics.com

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Authored by Jared Dillian, via MauldinEconomics.com,

I have been saying this for quite a while, but nobody is listening to me.

This is not a good Fed. They aren’t making decisions on a predictive, forward-looking basis. They are very concerned about optics, appearances—how things look. And to them, right now the optics of having Fed funds at 0.375% with unemployment at 5% are very bad.

But that isn’t how it’s supposed to work. The Fed has a few hundred PhD economists who are supposed to be doing the heavy mental lifting, trying to predict what is going to happen in the future. And the future doesn’t look so good. The data is weakening, not strengthening. And yet here we are, talking about rate hikes.

There are other considerations.

The first is politics. Everyone at the Fed down to the janitor has spent the last few months denying any political influence in monetary policy decisions, which means that, of course, there is political influence in monetary policy decisions. If the rate hike comes in the first FOMC meeting after the election, in December—it won’t be a coincidence.

But there’s more to it than that. We are beginning to learn that the Fed (much like the Bank of Canada) takes fiscal policy into account when making monetary policy decisions. And fiscal policy, up until this point, has not been all that stimulative. But it will be, soon.

The bad news is that either Trump or Clinton will become president. Bad if you’re a deficit scold, like me. Clinton wants to raise taxes and spend the money on free stuff (like college tuition and infrastructure). Trump wants to cut taxes and spend even more (on a wall, and infrastructure, and the military).

Either way, we are staring down the barrel of quite a bit of fiscal “stimulus.”

A few Fed speakers have hinted that they are taking this into account in their forecasts (you can read more details here). To the extent that you think government spending causes economic growth (a tenuous relationship, for sure), the central bank should respond by keeping monetary policy tighter than it ordinarily would. Which means that the Fed is more likely to hike rates right after the election. Maybe because of politics, but also because of projected fiscal policy.

When I mention rate hikes to people, they are very dismissive. The Federal Reserve has disappointed many investors who were betting on rate hikes for many years. It is a classic boy-who-cried-wolf scenario. Of course, I have been saying since the SIC conference that a rate hike was imminent, so we shall see.

The 10^th Man, Doing His Thing

So if you ask people about the election, they generally give you two possible outcomes.

Outcome 1 (most likely):

Clinton becomes president
Republicans may or may not keep the Senate
Republicans do keep the House

Or…

Outcome 2 (also likely):

Trump becomes president
Republicans may or may not keep the Senate
Republicans do keep the House

At The 10^th Man, it is my duty to disagree. Just for the sake of disagreeing.

What if this happens…

Outcome 3:

Clinton becomes president
Democrats take the Senate
Democrats take the House

Nobody is thinking of that possibility.

Lots of people think that if Trump wins, the market tanks. Probably not. People have been thinking about that possibility for over a year; it isn’t news.

Outcome 3 is where the market’s weak spot is. If it’s a Democratic sweep, the market will be down 10-15% in a matter of days, and the VIX will find the 30 handle in no time.

I’m not saying Outcome 3 is going to happen. It’s definitely the least likely scenario. But it’s the scenario that people (and the markets) are least prepared for. Which means, as an investor, that is where the asymmetric payoff lies.

If you are good at math, you can estimate the probability of a Democratic sweep, then go in the option markets and compare it to what is being priced in. This is the sort of thing I do all the time (it’s not priced in).

Magic Beans

I’ve been around long enough to see investing fads come and go. I’m going to be that guy—that solitary codger who yells at those daggone kids to get off his lawn and wonders where he left his soup.

In this writer’s opinion, smart beta strategies are a fad. Smart beta is the idea that you can construct an index based on some arbitrary criteria that will outperform a traditional market cap-weighted index. In this sense, people think they are capturing alpha, but I don’t think that word means what they think it means. Probably what it means is that you can back-test something but not forward-test it.

Funnily enough, all the big ETF launches this year have been for miscellaneous smart beta strategies.

There is this temptation in the finance business that you can create some kind of magic pill or potion, or magic beans that you can plant in the ground and grow the money tree. If only I had a formula, or an algorithm, or a system, or a silver bullet that would make money all the time in every market environment.

Doesn’t work that way. The market exhibits what is known as “nonstationarity”—it is a game whose rules constantly change.

People seem to be pretty happy with these smart beta ETFs right now, and I’m glad they’re happy, but very likely these indices were built to outperform in one set of market conditions, and one set only. We are already seeing cracks in the low-vol ETFs.

Go take the magic beans someplace else—we’re all stocked up here.

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