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Having exploded higher in the run-up to the election, market expectations of the correlation between stocks within the S&P 500 have completely collapsed since to new record lows.

Simply put, massive systemic overlays were placed ahead of the election event, and were forced to be unwound increasingly aggressively as the post-Trump rally caught everyone offside (the unwind would mean relatively heavy selling of Index protection relative to single-name protection).

As a reminder, implied correlation measures the relative demand for macro overlays (index hedges) vs micro risk (individual stock hedges/concerns). The higher it is, the more systemically worried investors are and the more traders believe a high correlation 'event' is due (typically the high correlation event is a big downturn in stocks).

As The Wall Street Journal reports, sectors and styles in the S&P 500 index have started to move independently after seven years of depressed volatility and tighter correlations.

While the S&P 500 climbed to a record for a second day on Tuesday, “there are elements of a bull market and a bear market at the same time,” said Andrew Wilkinson, chief market analyst at Interactive Brokers.

“You’re seeing pressure on different sectors. In a typical bull market, you’re going to get all stocks going higher.”

 

“It makes it very interesting for the stock picker and the active manager who’s on his game,” Mr. Wilkinson said.

 

The relationship between growth and value stocks in the benchmark equity measure has also decoupled, with the rolling correlation between the two groups sliding since voting day, FactSet data show. A Republican sweep of the U.S. presidency and Congress has boosted the inflation outlook, pushing investors into value names. Before the election, investors crowded into growth companies in 2015 amid a sluggish economy and then poured money into low-volatility equities in the first half of this year.

But it is not just correlations between individual stocks that is crashing. The correlation between bonds and stocks has collapsed back to its norms…

Which, as we noted previously, is raising notable concerns over a risk-parity fund blow up. As BofA warns: "Latent risk remains worth monitoring, as (i) leverage is still near max levels across a variety of risk parity  parametrizations, (ii) bond allocations are historically elevated, and (iii) markets continue to be sceptical of a 2016 Fed hike."

If BofA is correct, it would mean that a day which sees a -4% SPX drop and +1% bond rally (good diversification) would generate no selling pressure, "underscoring the critical role played by bond-equity correlation in governing the severity of risk parity unwinds."

 

However, a troubling scenario is one where even a relatively benign 2% selloff of the S&P coupled with just a 1% selloff of the 10Y could result in up to 50% deleveraging, which in turn would accelerate further liquidations by other comparable funds, and lead to a self-fulfilling crash across asset classes.

 

Which incidentally sounds like precisely the scenario that could happen when the Fed tries to raise rates, and is also why asset classes continue to move without fear of any rate hike, as they now realize – very well – just how trapped the Fed truly is. That said, in short order, we will see if the Fed, for once, has the intestinal fortitude to actually raise rates in the face of the extreme volatility awaiting equities in the event they do… we doubt it.

As RBC's Charlie McElligott notes, the classic risk-parity pain-trade ensues— developed mkt sovereign bonds, stocks, EM, credit and commodities (ex-crude) all under the cosh right now at the same time (shocker–a strategy built on a core concept of ‘negative correlation btwn bonds and risk stocks’ is going to be exposed in a regime change of this magnitude).

And as the chart below shows, Risk Parity funds are plunging…

As is clear, he massive decoupling between stocks and risk-parity funds is not unpredented… but has not ended well in the past (for stocks).

via http://ift.tt/2giM3xe Tyler Durden

Submitted by Michale Snyder via The Economic Collapse blog,

Could you survive on just $2.50 a day?  According to Compassion International, approximately half of the population of the entire planet currently lives on $2.50 a day or less.  Meanwhile, those hoarding wealth at the very top of the global pyramid are rapidly becoming a lot wealthier.  Don’t get me wrong – I am a very big believer in working hard and contributing something of value to society, and those that work the hardest and contribute the most should be able to reap the rewards.  In this article I am in no way, shape or form criticizing true capitalism, because if true capitalism were actually being practiced all over the planet we would have far, far less poverty today.  Instead, our planet is dominated by a heavily socialized debt-based central banking system that systematically transfers wealth from hard working ordinary citizens to the global elite.  Those at the very top of the pyramid know that they are impoverishing everyone else, and they very much intend to keep it that way.

Let’s start with some of the hard numbers.  According to Zero Hedge, Credit Suisse had just released their yearly report on global wealth, and it shows that 45.6 percent of all the wealth in the world is controlled by just 0.7 percent of the people…

As Credit Suisse tantalizingly shows year after year, the number of people who control just shy of a majority of global net worth, or 45.6% of the roughly $255 trillion in household wealth, is declining progressively relative to the total population of the world, and in 2016 the number of people who are worth more than $1 million was just 33 million, roughly 0.7% of the world’s population of adults. On the other end of the pyramid, some 3.5 billion adults had a net worth of less than $10,000, accounting for just about $6 trillion in household wealth.

And since this is a yearly report, we can go back and see how things have changed over time.  When Zero Hedge did this, it was discovered that the wealth of those at the very top “has nearly doubled” over the past six years, and meanwhile the poor have gotten even poorer…

Incidentally, we tracked down the first Credit Suisse report we found in this series from 2010, where the total wealth of the top “layer” in the pyramid was a modest $69.2 trillion for the world’s millionaires. It has nearly doubled in the 6 years since then. Meanwhile, the world’s poorest have gotten, you got it, poorer, as those adults who were worth less than $10,000 in 2010 had a combined net worth of $8.2 trillion, a number which has since declined to $6.1 trillion in 2016 despite a half a billion increase in the sample size.

If these trends continue at this pace, it won’t be too long before the global elite have virtually all of the wealth and the rest of us have virtually nothing.

Perhaps you are fortunate enough to still have a good job, and you live in a large home and you will sleep in a warm bed tonight.

Well, you should consider yourself to be very blessed, because that is definitely not the case for most of the rest of the world.  The following 11 facts about global poverty come from dosomething.com, and I want you to really let these numbers sink in for a moment…

So how did we get here?

Debt is the primary mechanism that takes wealth from ordinary people like you and me and puts it into the hands of the global elite.

In my recent article entitled “Why Donald Trump Must Shut Down The Federal Reserve And Start Issuing Debt-Free Money“, I discussed how the Federal Reserve was designed to entrap the U.S. government in an endless debt spiral from which it could never possibly escape.  And that is precisely what has happened, as the U.S. national debt has gotten more than 5000 times larger since the Federal Reserve was created in 1913.

In that very same year, the federal income tax was instituted, and that is a key part of the program for the global elite.  You see, the income tax is how wealth is transferred from us to the government.  And then a continuously growing national debt is how that wealth is transferred from the government to the elite.

It is a very complicated system, but at the end of the day it is all about taking money from us and getting it into their pockets.

And at this point more than 99.9 percent of the population of the world lives in a country with a central bank, and almost every nation on the planet has some form of income tax.

It is a global system that is designed to create as much debt as possible, and I recently shared with my readers that the total amount of debt in the world has hit a staggering all-time record high of 152 trillion dollars.

The borrower is the servant of the lender, and the global elite have used various forms of debt to turn the rest of the planet into their debt slaves.

As debt levels race higher and higher all over the planet, the elite are using the magic of compound interest to grab a bigger and bigger share of the pie.

Given enough time, those at the very top would have virtually everything and the rest of us would have virtually nothing.  The middle class is shrinking all over the globe, and the gap between the wealthy and the poor continues to grow at an astounding pace.

But the vast majority of people out there have no idea how money, debt, taxes and central banks really work, and so they have no idea that this is purposely being done to them.

The truth is that we don’t have to have this much global poverty, and if we correctly identify the root causes of this poverty we can start working on some real solutions.

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Russia has conducted successful intercontinental ballistic missile tests intended for its Barguzin “nuclear-train” program. 

The tests for Russia’s “railway-based combat rocket system” took place on Plesetsk cosmodrone two weeks ago, Interfax reports and were “fully successful” according to a military source, which would “pave the way for further flight tests.” The tests were held to test the missiles’ launch readiness, Russian press added. 

A BZhRK with a Molodets missile erected to launch position

The mobile weapons platform, made up of several train carriages designed to conceal the launchers of six Yars or Yars-M thermonuclear ICBMs and their command units, are expected to enter service between 2018 and 2020.

After first announcing the return of the nuclear trains, which had previously been banned, in 2014 Russia’s military then confirmed the trains are expected to be put into service in 2019. The nuclear trains, dubbed Berguzin after the strong eastern wind that blows over the Lake Baikal, aim to counter US’s Conventional Prompt Global Strike project, which would give the Pentagon the capability of launching attacks and precision strikes at any target in the world in one hour.

The Berguzins, which act as mobile platforms to transport and launch nuclear missiles, will be able carry up to 6 RS-24 Yars missiles, the International Business Times reported.  According to RT, Yars missiles can reportedly carry four warheads for a total yield of between 0.4 and 1.2 megatons.  While the missiles are less destructive than their predecessors, the Molodets missiles, they are more accurate, have a greater range and weigh roughly half as much. The lighter weight means that trains on which they are loaded do not require reinforced wheel-sets to carry the load.

This makes it harder for enemy spy satellites to identify the trains, as the carriages can be easily disguised as refrigerator cars. Once the trains are deployed, Russia will be in possession of 36 megatons of mobile and ready-to-fire nuclear missiles.

The commander of the Strategic Missile Forces, Colonel-General Sergei Karakayev, said the state-of-the-art Barguzin complex would outstrip its Soviet predecessor in all respects, including accuracy and range. Once launched, the complex will be in service until 2040.

During Soviet times, the Strategic Missile Forces had three divisions of rail-mobile missile systems “Molodets” (NATO reporting name SS-24 “Scalpel”). They were stationed in the Kostroma, Perm and Krasnoyarsk regions.

There were 12 “nuclear trains” in total, each carrying three missiles. The complexes entered service in 1987, just a few years prior the collapse of the USSR. The West dubbed the Soviet weapon “ghost trains.” The rail mobile missile complexes were disposed of from 2003 to 2005 without extending their life.   The “Molodets” nuclear trains were part of the START-2 Treaty for arms reductions.

The new Barguzin project does not have a goal to revive the erstwhile Soviet military project. This is an entirely new development. One of the obvious advantages of Barguzin trains is their mobility, although Soviet rail-mobile missile complexes were too heavy. It is worthy of note that the development of such systems does not come contrary to the START-3 agreement.

Russia’s latest advancement in its nuclear weapons technology comes shortly after the Kremlin announced the deployment of nuclear-capable missiles to the Kaliningrad exclave, as was reported previously. President Vladimir Putin’s spokesman, Dmitry Peskov, told reporters that the Russian military needs to respond to what he described as Nato’s aggressive moves.

“Russia is doing what is necessary to protect itself amid Nato’s expansion toward its borders,” Mr Peskov said adding that “the alliance is a truly aggressive bloc, so Russia does what it has to do. It has every sovereign right to take necessary measures throughout the territory of the Russian Federation.”

According to overnight press reports, Moscow also deployed new anti-ship missiles on Pacific islands controlled by Russia but also claimed by Japan. Bal and Bastion missile systems have been stationed on the islands, called the southern Kurils by Russia and the Northern Territories by Japan, the Boyevaya Vakhta (Combat Duty) newspaper of Russia’s Pacific Fleet reports.

The disagreement over the islands, seized by the Soviet Union at the end of World War II, has kept the two countries from signing a peace treaty formally ending their wartime hostilities.

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Submitted by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Maryland Governor Larry Hogan recently signed an executive order forbidding Maryland public schools from beginning classes before Labor Day. Governor Hogan’s executive order benefits businesses in Maryland’s coastal areas that lose school-aged summer employees and business from Maryland families when schools start in August. However, as Governor Hogan’s critics have pointed out, some Maryland school districts, as well as Maryland schoolchildren, benefit from an earlier start to the school year.

Governor Hogan’s executive order is the latest example of how centralized government control of education leaves many students behind. A centrally planned education system can no more meet the unique needs of every child than a centrally planned economic system can meet the unique needs of every worker and consumer.

Centralizing education at the state or, worse, federal level inevitably leads to political conflicts over issues ranging from whether students should be allowed to pray on school grounds, to what should be the curriculum, to what food should be served in the cafeteria, to who should be allowed to use which bathroom.

The centralization and politicization of education is rooted in the idea that education is a right that must be provided by the government, instead of a good that individuals should obtain in the market. Separating school from state would empower parents to find an education system that meets the needs of their children instead of using the political process to force their idea of a good education on all children.

While many politicians praise local and parental control of education, the fact is both major parties embrace federal control of education. The two sides only differ on the details. Liberals who oppose the testing mandates of No Child Left Behind enthusiastically backed President Clinton’s national testing proposals. They also back the Obama administration’s expansion of federal interference in the classroom via Common Core.

Similarly, conservatives who (correctly) not just opposed Clinton’s initiatives but called for the abolition of the Department of Education enthusiastically supported No Child Left Behind. Even most conservatives who oppose Common Core, federal bathroom and cafeteria mandates, and other federal education policies, support reforming, instead of eliminating, the Department of Education.

Politicians will not voluntarily relinquish control over education to parents. Therefore, parents and other concerned citizens should take a page from the UK and work to “Ed-Exit” government-controlled education. Parents and other concerned citizens should pressure Congress to finally shut down the Department of Education and return the money to American families. They also must pressure state governments and local school boards to reject federal mandates, even if it means forgoing federal funding.

Parents should also explore education alternatives, such as private, charter, and religious schools, as well as homeschooling. Homeschooling is the ultimate form of Ed-Exit. Homeschooling parents have the freedom to shape every aspect of education — from the curriculum to the length of the school day to what their children have for lunch to who can and cannot use the bathroom — to fit their child's unique needs.

Parents interested in providing their children with a quality education emphasizing the ideas of liberty should try out my homeschooling curriculum. The curriculum provides students with a well-rounded education that includes courses in personal finance and public speaking. The government and history sections of the curriculum emphasize Austrian economics, libertarian political theory, and the history of liberty. However, unlike government schools, my curriculum never puts ideological indoctrination ahead of education.

Parents interested in Ed-Exiting from government-run schools can learn more about my curriculum at ronpaulcurriculum.com.

via http://ift.tt/2fsRN6t Tyler Durden

In a late evening press release on Thanksgiving Eve, The US Navy admits that 134,386 sailors’ private inrfomation has been hacked from a HP Enterprise laptop…

On Oct. 27, 2016, the Navy was notified by Hewlett Packard Enterprise Services (HPES) that one of the company’s laptops operated by their employee supporting a Navy contract was reported as compromised.

 

After analysis by HPES and a continuing Naval Criminal Investigative Service (NCIS) investigation, it was determined Nov. 22, 2016, that sensitive information, including the names and Social Security Numbers (SSNs) of 134,386 current and former Sailors were accessed by unknown individuals.

 

“The Navy takes this incident extremely seriously- this is a matter of trust for our Sailors,” said Chief of Naval Personnel Vice Adm. Robert Burke. “We are in the early stages of investigating and are working quickly to identify and take care of those affected by this breach.”

 

The Navy will notify those affected Sailors in the coming weeks by multiple means including phone, letter and email.

 

For those affected by this incident, the Navy is working to provide further details on what happened, and is reviewing credit monitoring service options for affected Sailors.

 

At this stage of the investigation, there is no evidence to suggest misuse of the information that was compromised.

Probably the Russians?

via http://ift.tt/2fq8SLe Tyler Durden

As of earlier today, the subreddit, r/Pizzagate, was officially banned by Reddit which posted the following notice to their site:

For those not familiar with the movement, the “Pizzagate” subreddit was started by a group of Trump-supporting internet sleuths who were attempting to use WikiLeaks’ leaked Podesta emails to connect the Clintons and John Podesta to the convicted sex offender, Jeffrey Epstein.  That said, when the Podesta emails failed to reveal a “smoking gun” linkage, the sleuths instead turned their focus to mulitple “pizza” references in Podesta’s emails which then led to the speculation that those “pizza” references must be code for something far more sinister.

According to the Washington Post, the “Pizzagate” sleuths are convinced that the “secret headquarters of a child sex-trafficking ring run by Hillary Clinton and members of her inner circle” is located in the basement of a Washington D.C. pizza shop called the Comet Ping Pong Pizzeria.  The owner of the pizzeria, James Alefantis, says he has received numerous death threats over the past couple of weeks and has been forced to go to the FBI for protection.

It has also led to some very real harassment of the people caught up in the theory, including the owner of the Comet Ping Pong pizzeria in the District, James Alefantis. Alefantis has received hundreds of death threats over the past couple of weeks, he told the New York Times this week, after Pizzagate enthusiasts decided that his restaurant was the secret headquarters of a child sex-trafficking ring run by Hillary Clinton and members of her inner circle.

 

None of the wildly accusatory claims are true. Alefantis told the Times that he asked Twitter, Reddit, Facebook, YouTube and the FBI to help him stop the spread of the conspiracy theory, which uses photos of his own kids as “evidence.”

According to the New York Times, Alefantis first heard of Pizzagate after he started receiving threatening messages on Instagram and Facebook.  Aside from some friendships with prominent democratic insiders like David Brock and Tony Podesta, Alefantis told the Times he’s not sure how this conspiracy theory got linked to his business.

None of it was true. While Mr. Alefantis has some prominent Democratic friends in Washington and was a supporter of Mrs. Clinton, he has never met her, does not sell or abuse children, and is not being investigated by law enforcement for any of these claims. He and his 40 employees had unwittingly become real people caught in the middle of a storm of fake news.

 

“From this insane, fabricated conspiracy theory, we’ve come under constant assault,” said Mr. Alefantis, 42, who was once in a relationship with David Brock, a provocative former right-wing journalist who became an outspoken advocate for Mrs. Clinton.

 

Mr. Alefantis suspects those relationships may have helped to make him a target. “I’ve done nothing for days but try to clean this up and protect my staff and friends from being terrorized,” he said.

 

Mr. Alefantis mingles with other Washington chefs and his establishment helped him to be named No. 49 in GQ magazine’s 50 most powerful people in Washington in 2012. His customers include some high-powered locals, such as Tony Podesta, the brother of John Podesta, whom Mr. Alefantis knows casually. Mr. Alefantis and Mr. Brock, who is the founder of Media Matters for America, a website that tracks press coverage critical of the Clintons and works to debunk misinformation in the conservative press, broke up five years ago.

While WaPo says the Pizzagate sleuths have failed to uncover any actual evidence of their accusations, the dismissal of their efforts by the media only seems to be strengthening their resolve.

“Pizzagate” has yet to produce any actual evidence for its extremely weighty and life-ruining accusations, but every debunking of its claims — including the one in the Times — has only convinced its believers that they must be right, and that the circle of pedophiles and sympathizers trying to cover up their findings must be even bigger and more powerful than they imagined.

#reddit has banned the #pizzagate subreddit.

PLEASE take a long, hard look at the narrative you’re being spoon-fed, folks #censorship

— Fran Seen ???? (@FranSeenWrites) November 23, 2016

The only reason Kanye was hospitalized is because he spoke up about #pizzagate

— Patrick (@_PaNew_) November 22, 2016

In fact, after the Reddit ban, one former moderator of the Pizzagate subreddit posted the following message on r/The_Donald:

Finally, we are not finished. Obviously the entire mod team and everyone else is tightening up our opsec and putting on our battle-armor. To those who pressured Reddit into this censorship: none of us are turning back. We have all made life insurance videos. We have all vowed to continue this fight. You have only increased our number. This morning we were numerous, tonight we are legion.

Reading between the lines, we’d say they’re not quite ready to give up on Pizzagate.

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Submitted by Joseph Jankowski via PlantetFreeWill.com

San Diego State University on Tuesday hosted a “Healing Circle” for students to grieve over the election victory of Donald Trump and develop ways to stand against “injustice.”

According to College Fix, the circle drew roughly 20 participants who sought to process their confusion, anger and fear over the presidential election results. Students sat at tables facing each other as facilitators talked them through the fact that they needed to come to grips with the election results.

“I think at least for me that initial shock has worn off a tiny bit,” a facilitator leading the circle told students. “You know when you grieve you have that denial, ‘How could this happen, I can’t believe this,’ you know, some of us said in that anger, or sadness, mourning, whatever, that overwhelming feeling that we’re having. Many of us want to do is, okay, now what? We couldn’t believe it happened, but it happened. I think it’s safe to say he’s not going anywhere.”

After explaining that the healing circle was a “safe space” for those who may not feel comfortable expressing their grief over the upcoming Trump administration elsewhere, the facilitator went on to quote what Obama told his daughters upon hearing the results of the election:

“Your job as a citizen and as a decent human being is to constantly affirm and lift up and fight for treating people with kindness and respect and understanding. You should anticipate that in any given moment there will be flare ups of bigotry that you may have to confront, or maybe inside of you. It doesn’t stop, you don’t get into a fetal position about it and you don’t start worrying about the apocalypse.”

A student who attended the one-hour event told College Fix that facilitators urged students to understand that not all Trump supporters are racist, but that Trump has enabled racism and sexism.

“Then everyone took turns explaining how hard it was for them because of Trump,” said the student. “They said white people cannot understand, and they’re scared … and need more support.”

The grieving gathering was marketed as an event for “moving forward together,” where students would learn about the “mental health and community-based resources” available to them following the election.

“In light of the recent election, many people of color, people in the LGBTQAI community, immigrants, women, people of different faiths, and many more are confused, angry and scared,” said a poster advertising the event. “One of the great threats of this election is isolation. Please come out and be in community to process what happened, and develop next steps for how we can stand together against injustice.”

San Diego State University is just one of many colleges who have had these types of gatherings to comfort students who can not cope with reality post-election and who seem to have fallen into the twisted world-view pushed by the mainstream media that KKK connected “white nationalist” and misogynists are set to take the White House in January.

Just after the election, dozens of students at Cornell University gathered on campus for a “cry-in” to mourn over the results, with school staff providing tissues and hot chocolate.

Students at Tufts University organized a “self-care” meeting over the election results, while students at Edgewood College gathered to write notes in order to express their feelings about the outcome.

The hysteria over Trump’s win on Nov. 8 even drew some colleges to reminded students that therapy dogs were available for comfort.

It is probably safe to say that most of these coddled young adults have not done much objective, independent research into the proposed policies of the President-elect, but rather let themselves slide into a frenzy of misinformation and scare tactics used by the establishment and it’s lapdog press to discredit the Trump administration.

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“noise” and “imprudence” indeed…

Source: MichaelPRamirez.com

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