iftttwall

Authored by Bryce Coward via Knowledge Leaders Capital blog,

The financial sector has been getting a lot of attention recently with earnings announcements so we thought we’d weigh in on one aspect of financial stock relative performance that is making it difficult for financials to truly lead this market higher: the flattening yield curve.

As most of our readers are aware, one way financials in general and banks in particular make money is by capturing the spread between short-term funding costs and long-term lending returns.

A nice proxy for the margin that is earned is the 10-year minus 3-month US Treasury yield spread. When the spread is expanding (curve steepening) it implies bumper times for financials and vice versa when it is contracting (curve flattening). Well, after the brief steepening episode that occurred between the middle and end of 2016, the yield curve is back to the flattest it’s been all cycle, and flattening still further.  That has, so far in 2017, been an impediment to financial stock relative performance and has kept the group from breaking out of its range-bound trend (chart 1).

So the obvious question for financial stock bulls is what would it take to get a steeper yield curve?

At this stage in the cycle a steeper yield curve could be generate by the economy producing higher inflation or higher real growth. As charts 2 and 3 demonstrate, there is a tight relationship between both inflation and real GDP growth and the yield curve.

Inflation has been trending lower since 2011 and real GDP growth has been trending lower since 1Q15. Unfortunately, we don’t think that is about to change.

Indeed, employment (one important component of output) has been trending lower on a year over year basis since the end of 2014…

 

And corporate profit growth (one component of employment) remains weak and looks to be headed lower.

These things should keep a lid on the yield curve, and may thus impeded financials from sustainably leading this bull market.

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Having warned "Republicans have a last chance to do the right thing on Repeal & Replace after years of talking & campaigning on it," in a tweet this morning, building pressure on the GOP after threatening overnight that "if Republicans don't Repeal and Replace the disastrous ObamaCare, the repercussions will be far greater than any of them understand!" President Trump will deliver a statement about healthcare, shortly after meeting with what he calls “victims of Obamacare."

The Senate will move forward with a vote this week on a Republican health-care bill, but, as MarketWatch.com reports, it’s not yet known whether the legislation will seek to replace Obamacare or simply repeal it, according to the Senate’s third-ranking Republican. The Associated Press reports Sen. John Thune of South Dakota said Senate Majority Leader Mitch McConnell of Kentucky will make a decision soon on which bill to bring up for a vote.

At this stage, it’s unlikely that the senate will vote to begin debate, as the Trump administration has struggled to bridge the divide between moderates and conservatives, who have dramatically different expectations regarding the bill and its contents. In its latest draft, the Trump team included a revision that would allow insurance companies to sell cheap plans that provide little in the way of coverage as a sop to conservatives like Texas Sen. Ted Cruz. But it wasn’t enough to secure the support of conservatives, and moderates still balk at the proposed cuts to medicare.

* * *

The Trump repeal-and-replace effort is in a difficult spot. With a slim two-vote majority, Senate Majority Leader Mitch McConnell’s proposal to simply repeal Obamacare died last week after moderate Republican Senators Susan Collins, Shelley Moore Capito and Lisa Murkowski said they’d oppose a straight repeal. Following the collapse of their effort to repeal and replace the landmark health-care law, the president said last week that Republicans should “let Obamacare fail,” adding that it “will be a lot easier” to let the bill falter on its own.

As Bloomberg Analyst Spencer Perlman reminds us, “even if debate begins, defeat is likely,” while, “repeal in any form does not have adequate support in the current Senate.” With this in mind, we’re curious to hear whether Trump will use this opportunity to try and whip up votes for the bill, or if he’ll signal that the administration is moving on. It’s also notable that this last-minute address comes after Trump hired Anthony Scaramucci to be his communications director late last week, pushing out former Press Secretary Sean Spicer, and stoking rumors that Chief of Staff Reince Priebus could be next to depart.

As USA Today writes, Trump’s statement comes nearly a week after he pressed Republican senators to agree to an alternative to Obamacare, before taking an August recess.

Live Feed (Statement due to begin at 1515ET)

"The Republican plan doesn’t fix the death spiral of Obamacare, it simply subsidizes it.” – Rand Paul

 

Senator Paul knows government loves taxes and bureaucracy and it will always be reluctant to vote away such power and control. So instead of repealing the disaster that is Obamacare altogether, Republicans are tinkering with a replacement. This is the wrong approach.

 

The Obamacare monster doesn’t need to be replaced. It needs to be repealed. Eliminate it altogether. Get government out of the health care business. Stop subsidizing insurance companies with taxpayer money. Instead, make insurance companies compete on an open, free market. That’s what capitalism is all about. If we removed big government and insurance company interference from health care, real capitalism could drive medical costs down considerably.

 

—Ben Garrison

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Authored by James Valentine via Inegrity-Research.com,

From my vantage point, the career prospects for Equity Research analysts look dismal.  The decade-long shift from active to passive management isn’t new, but it appears to be reaching a tipping point as seen in the rash of announcements from high-profile buy-side and sell-side firms closing their doors, merging or outsourcing to bots.

I’m not sure if we should be more troubled by the fact that so little is being done within our industry to fix the problem or by the lack of acknowledgement there even is a problem.  I don’t claim to have all the answers, but I can see one major dilemma leading to our demise.  Clients are asked to pay 1%-2% active management fees because “Research is in our DNA” and “Research defines us and distinguishes our firm” (direct quotes from sell-side and buy-side marketing content) and yet I find over 80% of analysts are relying almost entirely on company management for their financial forecasts (or relying on the sell-side, who too often rely primarily on company guidance).

How can we tell our clients we can consistently beat passive indexes if everyone is using company guidance to drive our collective thought process? There are thousands of buy-side firms that pay $1,000 to $10,000 to take a single meeting with company management during non-deal roadshows and yet most of these firms don’t have a budget or a process to rigorously develop an independent view for the stocks being researched.  Moreover, I find too many analysts “covering” well over 50 stocks, stretched too thin to consistently derive out-of-consensus insights.

The simple truth is if we’re going to ask clients to pay us 1%-2% of AUM for “excess” or “abnormal” returns, we need to spend an excessive amount of time seeking insights from abnormal sources (not just company management and the sell-side).

Identify Unique Sources of Insights for 1-4 Critical Factors

Finding good, unique and informed information sources is very, very difficult to do, which is why I suspect so few analysts have them.  So before setting out on this journey, it’s critically important to identify the 1-4 critical factors likely to cause a stock to out- or under-perform (the #1 goal of an analyst) and then stick to finding experts who can help in these areas.  For example, the release of Apple’s next iPhone is undoubtedly one of the stock’s few true critical factors, with the key assumptions to be answered “will the features be enough to entice current users to upgrade?” and “will it be priced above or below current levels?”  I find the best analysts stay laser focused on seeking only those sources that can answer these two questions because everything else is wasted time chasing noise (e.g. understanding the company’s tax problems with the EU or the next iteration of the Apple Watch are not going to result in a major move in the stock).

After the 1-4 critical factors are identified (and only after they’re identified), it’s critical to get informed insights from sources such as these below:

• Consultant, expert, or company retiree
• Management from customer of, or supplier to, or competitor of the stock being researched (can be publicly-traded or privately-held company)
• Government official, staffer, lobbyist or association executive
• Journalist, blogger or noted book author
• Industry award-winners (e.g. best salesperson)

Eliminate Distractions

While the unique sources discussed above are critical to success, analysts won’t have time to find these sources without first-rate time management skills.  Equity research analysts have one of the most unstructured jobs in the world.  Ask your doctor how many patients can be seen in a day and then ask an equity research analyst “how many stocks can be researched in a day?”  Given the nature of research, our job is never done which is why it’s so important to have superb time-management skills.

Time management partly involves focusing on activities that will yield the greatest results:

• Maximize “offensively-focused” activities where proprietary insights are most likely to be found. Examples include:
  • Making outgoing phone calls to information sources who offer insights that improve the forecasting of critical factors
  • Participating in private or small group meetings with industry expert(s) or management of competitors of the company being researched
  • Attending an industry conference where few financial analysts are in attendance
  • Review only what’s changed (e.g. Bloomberg’s Redline and FactSet’s Blackline for quarterly reports)
• Minimize “defensively-focused” activities such as those that may provide background but not alpha-generating insights. Examples include:
  • Quarterly earnings conference calls (reading the transcript can be done in half the time as listening to the call)
  • Reading entire regulatory filings
  • Sell-side-sponsored investor conferences (only attend if one-on-ones are available)
  • Site tour, especially when no senior management are present (if the tour doesn’t cover a potential critical factor, spend time elsewhere)
• Participate in calls/meetings only when they directly pertain to the critical factors for stocks of interest.

Conclusion

I wish I could say the future looks bright for equity research, but few professionals appear to be addressing the miserable under-performance plaguing our industry and so there’s no reason to expect the drain of actively-managed assets to stop.  If the industry’s key players wake up to this problem, we have plenty of intelligent, hard-working professionals to get us back on track, which I suspect will include identifying better sources of insight and using time more wisely.

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Content originally published at iBankCoin.com

They’re adorably dubbing this one a ‘REXIT’, an obvious play on words to commingle one of their bitter defeats (BREXIT) with a potential massive windfall for team CNN: A Rex Tillerson resignation inside the first year working for President Trump.

CNN Fake News Reports.

Tillerson has a growing list of differences with the White House, including a new debate over Iran policy and personnel. His frustration is hardly a secret and it has spilled out publicly at times. But friends sense a change of late.
 
For weeks, conversations with Tillerson friends outside of Washington have left the impression that he, despite his frustrations, was determined to stay on the job at least through the end of the year. That would allow time to continue efforts to reorganize the State Department and would mean he could claim to have put in a year as America’s top diplomat.
 
But two sources who spoke to CNN on condition of anonymity over the weekend said they would not be surprised if there was a “Rexit” from Foggy Bottom sooner that that.
 
Both of these sources are familiar with Tillerson conversations with friends outside Washington. Both said there was a noticeable increase in the secretary’s frustration and his doubts that the tug-of-war with the White House would subside anytime soon. They also acknowledged it could have been venting after a tough week, a suggestion several DC-based sources made when asked if they saw evidence Tillerson was looking for an exit strategy.

 

 
Amusingly, Trump supporters seem to be elated with the specter of this news. It seems that most supporters of the President are disenfranchised with the President’s cabinet picks, save Bannon — which begs the question: if Trump is such a good delegator, why the hell did he make so many poor choices for his cabinet?
 
Anti-Trumpsters and deep state shills are actively circle jerking over each and every negative White House rumor, with their eyes fixed on the grande prize: a Trump impeachment.

Some argue that the President is barreling towards a Nixonian “Saturday Night Massacre“, whereby his AG and Deputy AG resign after failing to fire the special counsel. Judging by the President’s tweets this morning, the Nixon timeline might just replay itself here.

via http://ift.tt/2uqG3bY The_Real_Fly

Authored by William Vantuono via RailwayAge.com,

 

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Bullish traders who insist that US economic fundamentals remain rock-solid despite tepid growth, inflation and other signs the postelection “Trump bump” in consumer confidence is already beginning to fade should take a look at the International Monetary Fund’s latest batch of quarterly forecasts for global growth.

The fund left its all-world forecasts for 2017 and 2018 unchanged from its previous quarterly update, which was released in April: It anticipates 3.5% and 3.6% growth, respectively.

However, those numbers mask a sharp decline in the fund's forecasts for US growth, which have been lowered sharply to reflect expectations that President Donald Trump's promised fiscal expansion package likely won't arrive until next year, according to a report published by the IMF. In an update that shouldn't surprise anyone who’s been following US macro data since the start of the year, the fund revised its forecasts for 2017 and 2018 down 0.2% to 2.1% and 0.4% to 2.1%. It continues to expect the US economy to expand by 1.6% in 2016.

The fund said its decision to lower US growth forecasts reflects in part the weak growth experienced during the first quarter. But what it calls the “major factor” behind the revision, especially for 2018, is the assumption that “fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of U.S. fiscal policy changes. Market expectations of fiscal stimulus have also receded.”

In other words, with President Donald Trump’s health-care and tax reform efforts stalled in Congress, the timeline for implementation of the expansionary fiscal policies that Trump had campaigned on – infrastructure spending and deregulation among them – has been pushed back a year or two.

The IMF’s reading on the US contrasts sharply with the Trump administration’s own projections. According to Trump budget director Mick Mulvaney, the administration is hoping for a 3% growth rate in the coming years – a rate necessary to balance the Trump budget’s deficit projections.

The fund also reduced its growth forecasts for the UK, though the near-term nature of the reduction suggests the NGO believes Brexit-related disruptions will be a near-term phenomenon. The fund lowered its forecast for 2017 to 1.7% from 2.0%, while maintaining its 2018 forecast at 1.5%.

Meanwhile, growth expectations for China, Japan and the eurozone have been revised higher, after strong Q1 performance and (in Europe) a reduction in political risks following Emmanuel Macron’s electoral triumph over Marine Le Pen.

The emerging world is where the IMF expects to see the bulk of global growth occur from here on out. Emerging economies are projected to see “a sustained pickup in activity,” with growth rising from 4.3 percent in 2016 to 4.6 percent in 2017 and 4.8 percent in 2018.

It’s expected that much of this pickup will come from China and India.

“China’s growth is expected to remain at 6.7 percent in 2017, the same level as in 2016, and to decline only modestly in 2018 to 6.4 percent. The forecast for 2017 was revised up by 0.1 percentage point, reflecting the stronger than expected outturn in the first quarter of the year underpinned by previous policy easing and supply-side reforms (including efforts to reduce excess capacity in the industrial sector). For 2018, the upward revision of 0.2 percentage point mainly reflects an expectation that the authorities will delay the needed fiscal adjustment (especially by maintaining high public investment) to meet their target of doubling 2010 real GDP by 2020. Delay comes at the cost of further large increases in debt, however, so downside risks around this baseline have also increased.

 

Growth in India is forecast to pick up further in 2017 and 2018, in line with the April 2017 forecast. While activity slowed following the currency exchange initiative, growth for 2016––at 7.1 percent––was higher than anticipated due to strong government spending and data revisions that show stronger momentum in the first part of the year. With a pickup in global trade and strengthening domestic demand, growth in the ASEAN-5 economies is projected to remain robust at around 5 percent, with generally strong first quarter outturns leading to a slight upward revision for 2017 relative to the April WEO.”

Both Russia and Turkey are expected to see growth rebound after a series of political and, in Russia’s case, commodity related shocks, are beginning to fade.

“In Emerging and Developing Europe, growth is projected to pick up in 2017, primarily driven by a higher growth forecast for Turkey, where exports recovered strongly in the last quarter of 2016 and the first quarter of 2017 following four quarters of moderate contraction, and external demand is projected to be stronger with improved prospects for euro area trading partners. The Russian economy is projected to recover gradually in 2017 and 2018, in line with the April forecast.”

Growth in the Middle East is expected to slow, reflecting a slowdown in oil production. Meanwhile, the outlook in Sub-Saharan Africa “remains challenging.”

“Growth in the Middle East, North Africa, Afghanistan, and Pakistan region is projected to slow considerably in 2017, reflecting primarily a slowdown in activity in oil exporters, before recovering in 2018. The 2017–18 forecast is broadly unchanged relative to the April 2017 WEO, but the growth outcome in 2016 is estimated to have been considerably stronger in light of higher growth in Iran. The recent decline in oil prices, if sustained, could weigh further on the outlook for the region’s oil exporters.

 

In Sub-Saharan Africa, the outlook remains challenging. Growth is projected to rise in 2017 and 2018, but will barely return to positive territory in per capita terms this year for the region as a whole—and would remain negative for about a third of the countries in the region. The slight upward revision to 2017 growth relative to the April 2017 WEO forecast reflects a modest upgrading of growth prospects for South Africa, which is experiencing a bumper crop due to better rainfall and an increase in mining output prompted by a moderate rebound in commodity prices. However, the outlook for South Africa remains difficult, with elevated political uncertainty and weak consumer and business confidence, and the country’s growth forecast was consequently marked down for 2018.”

In a section of its report dealing with risks to the global economic outlook, the IMF said it believes risks to the global economy are roughly balanced: On the upside, the cyclical rebound in Europe could be stronger and better sustained, as political risks have diminished for now. On the downside, rich market valuations and very low volatility in an environment of high policy uncertainty have increased the likelihood of a market correction, which could dampen growth and confidence.

However, the IMF urged developed countries struggling with weak demand and low inflation to continue supporting growth through monetary and fiscal policy, while cautioning central banks against raising borrowing costs too quickly.

Finally, as part of the fund’s “policy recommendations,” the fund writes that efforts “to accelerate private sector balance sheet repair and ensure sustainability of public debt are critical foundations for a resilient recovery,” while a “well-functioning multilateral framework for international economic relations is another key ingredient of strong, sustainable, balanced, and inclusive growth.”

And in what looks like a swipe at President Donald Trump and his protetionist rhetoric, the fund warned against pursuing “zero-sum” policies that could weaken growth around the world.

“Pursuit of zero-sum policies can only end by hurting all countries, as history shows. Because national policies inevitably interact and create spillovers across countries, the world economy works far better for all when policymakers engage in regular dialogue and work within agreed mechanisms to resolve disagreements.”

The fund also claims that the developing world’s failure to ameliorate rapidly worsening wealth inequality could “hinder market-friendly reforms” and lead to more protectionism. Over the longer term, failure to lift potential growth and make growth more inclusive could fuel protectionism and hinder market-friendly reforms. The results could include disrupted global supply chains, lower global productivity, and less affordable tradable consumer goods, which harm low-income households disproportionately.

As the IMF sees it, the biggest risks, at least among developed economies, are stemming from the Federal Reserve’s monetary tightening, and the shift toward more hawkish stance by the ECB, BOE and BOC. In fact, the fund warns that “a faster-than-expected monetary policy normalization in the United States could tighten global financial conditions and trigger reversals in capital flows to emerging economies,” while the attendant dollar appreciation would only add to their woes. In the emerging world, the fund sees China as the primary risk, believing that a failure by the Chinese to continue “addressing financial sector risks” and curbing excessive credit could precipitate “an abrupt growth slowdown” that could spill over into the global economy.

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Via King World News,

Today the man who has become legendary for his predictions on QE, historic moves in currencies, warned King World News that we are now in the frightening endgame.

Fear And Propaganda

Egon von Greyerz: 

“Stock investors are rejoicing about stock markets making new highs in many countries, totally oblivious of the risks or the reasons.  It seems that this is an unstoppable rally in a “new normal” market paradigm. No major increase is expected in the inflation rate or the historically low interest rates. The present rally has lasted 8 years since the 2009 low. There is virtually no fear in the stock market so investors see no reason why this favorable climate would not continue for another 8 years at least.

Yes, of course it could. All that is needed is that governments worldwide print another $20-50 trillion at least and that global debt goes up by another $200-500 trillion…Egon von Greyerz continues: 

“The gullibility of people today is exacerbated by the power of the internet and social media. Anything we read is accepted as fact or the truth, while a major part of it is just fake news. This is of course nothing new as it has been used by governments for centuries. Goebbels, the Nazi Propaganda Minister, who was an expert at manipulating the German people, said: “If you tell a big lie often enough and keep repeating it, people will eventually believe it.”

The power of the internet and other media has facilitated spreading news and propaganda to billions of people and very few can distinguish if they hear or read “real” news or “fake” news.

Anyone in government is incapable of telling the truth. Automatically when someone assumes an elected position their Pinocchio nose grows extremely long since their entire purpose is then to be all things to all people in order to be re-elected. This is why virtually no elected official has a backbone nor any morals or principles. Because if they had, telling the truth would make them unelectable.

My Life As A London Banker (1960s-1970s)

During my early professional years as a banker at the end of the 1960s and early 1970s, I spent some time with a prominent UK Merchant Bank. This is what the old-style Investment Banks used to be called before the Americans came to dominate the sector. The senior bankers used to arrive at work around 10am and then go to lunch at 1pm. The lunch would consist of at least one gin and tonic to start with and then a good three course meal with a bottle of wine or two. Afterwards some Port with cheese and maybe a beer or two at the pub to finish off. Then back to the office at around 3pm for 4-5 hours of work. And this is how the City of London would operate when it was the financial centre of the world. 

Any transaction was based on a handshake and a brief contract. Lawyers played a very small role in this process. Deals were based on trust and personal relationships. Banks displayed total loyalty to their staff and employees did not fear for their jobs. Major deals were concluded with a minimum of legal interference and compliance hardly existed. And still there was very little deception or fraud.

Contrast That To Today…

Today the financial world in London and major parts of the world is dominated by the US investment banks, the US legal system and the US government. Trust and loyalty is gone. Handshakes are worth nothing. Lawyers dominate everything and contracts are now running to hundreds of pages. Staff fear for their jobs since the banks have no loyalty to them. The only thing that counts is short term performance. This makes staff totally disloyal as they know they can be fired on a whim. 

Investment bankers are now Masters of the Universe and as the former Goldman Sachs CEO said, “Doing God’s work.. Well, one thing is certain, there is certainly no humility in the financial world today or as Michael Lewis said in his book “Liar’s Poker,” major parts of US investment banks are dominated by “Big swinging di–s”. (ALTERNATIVE: traders with very big egos.)

The system we now have is based on Fake News, Fake Money with no morals, no principles and no moral or ethical values. In spite of, or more correctly because of, all the lawyers, government legislation, compliance and regulations, the financial system is today functioning much worse than ever with more fraud, more government intervention and more manipulation of markets. Also, clients today are secondary. Instead, it is all about lining the pockets of the bankers with their multi-billion dollar deals and multi-million dollar bonuses and options. As we experienced in 2006-9, profits are for the bankers and losses for governments and customers. During that time of the Great Financial Crisis, many Investment Bankers received the same bonuses during the crisis years as before, in spite of the fact that most of them would have gone under without the government support they benefitted from to the extent of $25 trillion.  

We Are Now In The Frightening Endgame

All of this is proof of the fact that we are at the end of a major financial era that started either with the Renaissance, which came after the Dark Ages, or since the end of the South Sea Bubble in the mid 1700s. I doubt that the cycle is of a smaller degree, like 100 years since the creation of the Federal Reserve in 1913. Only future historians will tell us the magnitude of the current cycle. 

What is certain is that we are now in the final stages of a major era. It has been clear to me for quite some time that this will end badly. The inevitable implosion of the asset and debt bubbles that the world is now experiencing is guaranteed. But governments and central banks have for some time been able to fool most of the people by telling them that the emperor is wearing a suit of gold when he is actually naked. 

We have bubbles in every aspect of society. Stocks are at ridiculous valuations. The Schiller PE is at 30, which is where it was in 1929. Still, it is below the 2000 level which tells us that it could extend for a bit longer.

On many other measures like valuation to GDP or sales revenue, markets are past or near the all-time highs. The graph below shows the margin debt on the New York Stock Exchange which is substantially above the 2000 and 2007 levels.

Not just stocks but virtually all assets are at record levels, whether we talk about the biggest bubble in the world, which is bonds, or property values, which are inflated by interest rates manipulated down to the lowest levels in history.

I have in many previous interviews and articles stressed the problem of both US and global debts which have grown exponentially in the last half a century. These high debts have inflated asset prices, benefitting a small minority and at the same time impoverishing ordinary people. 

Just look at the real earnings of a US worker. As the chart below shows, they peaked in 1973 and since then, the perceived improvement of Americans has been achieved with the aid of debt.

The chart below shows that the gap been wages and the standard of living has been filled by an increase in consumer credit. The sad thing is that most Americans or ordinary people in the industrial world do not realize that they are now enslaved by debt which they can never repay.

Sadly, a big number of people in the world will be unemployed within the next few years. At that point, governments will be insolvent and print money which will be worthless. There will be no social security and no pension system. The health care system will also fail in many countries with disastrous consequences. 

With most individuals totally unaware of what will hit them in the next few years, they continue to accumulate debt while a small minority continue to speculate to accumulate wealth.

The Biggest Wealth Destruction In History

These speculators don’t realize that most of the wealth they have today is due credit expansion combined with governments printing money. Any future increase in asset prices will merely be due to the music playing faster and louder and will have nothing to do with real economic growth. Very few people realize that soon the music will stop, and at that point, all the assets inflated by debt will implode. This will lead to the biggest wealth destruction in history. But as always happens at the end of a major cycle, it only turns when the maximum number of investors has been sucked in. This is why we could easily see even higher stock prices before it all collapses. 

Just look at the Nasdaq in 1999-2000. From January 1999 to March 2000 the Nasdaq went up 2 ½ times. In the final stages of that euphoria, more and more investors were sucked in. The same could very well happen again.

The nearer a peak the market is, the bigger the number of participants. Markets have a horrible tendency to punish as many as possible. 

Instead of riding the final rally and then lose 80%, as Nasdaq investors did after the March 2000 peak, now is the time to exit the market and protect your profits. Just look at what happened to the Nasdaq in relation to gold since the Nasdaq 2000 peak. As the chart below shows, the Nasdaq has lost 71% against gold since the 2000 peak.

Don’t Try To Time The Markets

No one can pick the top, and when a market is heavily overbought, this is not necessary either. I am taking the Nasdaq as the extreme example here, but all stock markets are overbought globally. It makes no sense to pick the final rise, if it happens. Now is the time to take protective measures and be concerned about the “Return OF your money rather than the return ON your money.” The perfect wealth preservation asset is of course real assets and especially physical gold and silver, stored safely outside the financial system.  For anyone who still wants to speculate in the final stages of a secular bull market, options are the only sensible method – with options losses are limited to the premium paid, which is the only acceptable risk in a bubble market. 

In the next 3-5 years most asset classes, be it stocks, bonds, property, or just currencies, are likely to lose 75% to 99% against gold and silver. Certainly not a risk worth taking.”

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From the Slope of Hope: A couple of days ago, I stopped at the supercharger on the Google campus, and I walked over to Zareen’s, a popular place for Indian/Pakistani food to get a couple of mango lassis and samosas.

While waiting there, I noticed an unusually fat Indian kid. I would guess him to be about 15-16 years old, and well north of 200 pounds. I noticed him not just because of his size, but also because he was in a dress shirt, slacks, tie, and had a name tag dangling from a lanyard. Nearby was his also-very-fat father, who was dressed more casually. I noticed on the name tag was printed Camp BizSmart.

I had never heard of it in my life, but I instantly surmised it was some kind of summer camp for striving, aspirant parents to send their offspring in the hopes that they would be the next Sundar Pichai (if they were Indian), Jack Ma (if they were Chinese), or Mark Zuckerberg (if they were white). It just broke my heart to see this. I really did.

I’ve got a couple of extreme biases which inform my opinion on this matter. First of all, I think it’s important for a person to recognize how much of their life is at the mercy of chance. Where on the planet you are born. What gender you are. The time period you were born into. The nature of your parents. The nature of the education available to you. Your family’s financial condition. Everything.

Change Bill Gates’ birth year by one, and you get a very different result. Have someone else adopt Steve Jobs when he was a baby, and there would never be an Apple. Have Mark Zuckerberg’s parents insist that he stay at Harvard to complete his education, and you don’t get a Facebook.

And this isn’t just about the Silicon Valley. Go back to the John Adams series I was talking about earlier this month – – there’s a scene (based on actual events) in which John Adams and his son were crossing the Atlantic, and their ship was attacked by the British. They could have just as easily been killed or captured (instead of surviving, as they did). Just think if their boat was sunk – – there were TWO future U.S. Presidents on board. Don’t you think that might have altered U.S. history a little, based on one meaningless skirmish?

So a lot of life……90%…….95%……….maybe 99%…..is just pure chance and luck. We like to deceive ourselves into thinking we are the masters of our destiny, but that’s deluded madness. We have some measure of control (10%………5%…………1%?) but it’s definitely in the minority.

What troubled me about this “BizSmart” camp is, frankly, how exploitative it must be to the ambitions of parents with respect to their children. I would say the most ‘smart” thing about BizSmart is the tuition bucks the firm is able to suck out of these poor parents:

But you went to a real summer camp before, right? I sure did. Do you remember it? Think back – – – canoes. Campfires. S’mores. Leather crafts that are fun to make, even though they’ll never get used. Woodworking. Hiking. Swimming. Free time. Exploring the woods. Camping under the stars. Being a kid and having fun with other kids.

Check out BizSmart:

These poor kids. Poor. Fucking. Kids. Their parents have gussied them up in these miniature adult get-ups and foisted stuff like this on them:

“Curious how your son or daughter can prepare to compete and succeed in the global economy?” Err, no, not really, asswipe.

Listen, if the majority of true entrepreneurs had emerged, decade after decade, from one of these goddamned camps, I could understand the appeal. But the Silicon Valley is just like Hollywood, New York, or any other place that’s crammed with millions of ambitious people that are dying for a chance at the fifty golden opportunities that are actually there: 99.99% of people are going to be disappointed, and it ain’t gonna be because they didn’t go to a certain camp.

So as far as the morbidly obese kid who prompted this post, I only say this: his summer would be infinitely better spent swimming, riding a bicycle, or hanging out with friends. He’d get some exercise, some time in the outdoors, and who knows – – maybe acquire few good memories of a summer spent as a child before he spends the next forty dressed up like one of the poor youngsters picture above. Thinking back to a moonless night gently gliding along a lake in a canoe beats the holy hell out of learning how to write a business plan. Jesus.

via http://ift.tt/2tv0YHZ Tim Knight from Slope of Hope

Via The Daily Bell

Adults should be able to identify as any gender they want. Modern science means they can even change their physical characteristics and take hormones, which will mimic the opposite sex.

I may not understand it, but it doesn’t affect me, so I should have no say in how another adult lives his, her, or its life.

Bathroom policies should be decided by business owners. If a public school has a bathroom policy you don’t like, pull your kids out. Public school is a terrible thing for children anyway.

But there is a dangerous cultural meme that kids can choose to change their sex. Children should not be indoctrinated into believing they should get a sex change before they hit puberty.

If your little boy acts like a little girl, please continue to love and support him. Let him identify as whatever gender he wants, but do not plant the idea in his mind that he can become the opposite sex.

Once you are an adult who can understand consequences, go right ahead and play Mr. Potato Head with your body parts.

But children are being brainwashed into thinking it is normal to get a sex change. Children have rights and deserve some degree of autonomy. The parents’ job is to protect their children and do what is in the child’s best interest.

A four-year-old doesn’t know what transgender is. A four-year-old can cross-dress, act feminine or masculine, and even express the desire to be the opposite sex. But parents should not take this as a sign that their child is transgender.

I remember dressing up as a girl when I was about four years old, (probably with the help of my sisters who applied the eye shadow and nail polish). Did that mean I was transgender? No, it meant I was a little kid playing.

(I also identified as a cat for some time, and believe it or not my parents did not get me species reassignment surgery.)

But what if my parents had been brainwashed by the media? Would they have discussed in depth transgender issues with four-year-old me? Would they have told me it was okay to choose my sex?

As a four-year-old, maybe I would have flipped a coin and decided, “Hey, yeah, now that you mention it, I do like wearing dresses! Sign me up for hormone therapy, and make an appointment for a sex change.”

As crazy as this sounds, some parents are reacting in this way.

Because of the increase in media exposure, and indoctrination at schools, kids are becoming confused. In Great Britain, there has been a marked increase in kids seeking help with their gender identity.

A total of 165 children aged ten and under were referred to the clinic last year, compared with 36 in the year of 2012 to 2013.

And last year 2,016 young people aged between three and 18 attended gender identity clinics, while just 314 did from 2012 to 2013.

Statistics suggest “as many as 98% of gender confused boys and 88% of gender confused girls eventually accept their biological sex after naturally passing through puberty.”

So when kids are referred to clinics, if they were simply counseled through a tough time, that would be a good thing. But the clinics take it much further.

Those referred under a psycho-social assessment for six months by a clinician, which is followed by an action plan involving counselling and, sometimes, a physical intervention.

Children who have began puberty can be prescribed a course of hormone blockers to suppress the changes associated with adult development.

And those aged 16 and over can be given cross-sex hormones, giving them the physical characteristics of the opposite sex.

Is it Child Abuse?

Let’s quickly run through the difference between gender and sex.

Sex is a biological trait. There is male and female, and some rare medically identifiable physical disorders.

Gender is a social construction which generally corresponds to a particular sex.

There are some kids who really do identify as the opposite gender, and will act accordingly. They should be loved and accepted, but they should not be given hormones and surgery. Since gender is basically made up anyway, they can act like the opposite gender without having to pretend they are the opposite sex.

Before some reasonable age at which a human is capable of making permanently life changing decisions, it is child abuse to give them sex change drugs and surgery.

It is not child abuse, in my opinion, to allow a child to act like whatever gender they want. Allowing a boy to wear a dress if he chooses is not child abuse. Allowing a boy to get sex reassignment surgery is child abuse.

You cannot even legally get a tattoo in the U.S.A. before age 18. The government says you are not responsible enough to drink alcohol until you are 21. But the media tells us that 10-year-olds can make a permanent, life changing decision. A four-year-old in Australia was given sex reassignment surgery!

The American College of Pediatricians urges healthcare professionals, educators and legislators to reject all policies that condition children to accept as normal a life of chemical and surgical impersonation of the opposite sex. Facts – not ideology – determine reality.

1. Human sexuality is an objective biological binary trait: “XY” and “XX” are genetic markers of male and female, respectively – not genetic markers of a disorder.

Maybe someday science will actually be able to transform a man into a woman, but right now it cannot. You can use hormones so that the body mimics the opposite sex. You can get surgery so that your body looks like that of the opposite sex.

But if you are born a male, you cannot get pregnant no matter how much treatment you receive. If you were born with two X chromosomes, you are and will remain biologically a woman.

Parents who play into the media’s lies about gender and sex identity are setting their children up for a life of depression and anxiety.

Rates of suicide are nearly twenty times greater among adults who use cross-sex hormones and undergo sex reassignment surgery…

Endorsing gender discordance as normal via public education and legal policies will confuse children and parents, leading more children to present to “gender clinics” where they will be given puberty-blocking drugs. This, in turn, virtually ensures they will “choose” a lifetime of carcinogenic and otherwise toxic cross-sex hormones, and likely consider unnecessary surgical mutilation of their healthy body parts as young adults.

The Tangled Web of Leftism

What happened to the mantra that you are perfect just the way you are?

We live in a society that tells unhealthy obese people that they shouldn’t be “body shamed” into losing weight.

But if you don’t feel comfortable with your natural biological sex, that is something worth changing?

Teach kids to act how they honestly want to act. If that means a boy wears a dress and a girl cuts her hair short, so be it! You can choose a “gender” without trying to change your sex.

No one is born with a gender. Everyone is born with a biological sex. Gender (an awareness and sense of oneself as male or female) is a sociological and psychological concept; not an objective biological one. No one is born with an awareness of themselves as male or female; this awareness develops over time and, like all developmental processes, may be derailed by a child’s subjective perceptions, relationships, and adverse experiences from infancy forward.

What does it even mean for a boy to “feel like a girl” anyway? This is a huge contradiction of the left. Gender is a social construct, but somehow you can feel like the “opposite”? Since gender is a social construct, who is to say what qualities correspond to which sex?

The extreme leftists have gotten their message mixed up. They say correctly that you can choose a gender, but then advocate “choosing” a biological sex to correspond. This, of course, is impossible. You can only mimic the opposite sex, not actually become it.

Kids need love, support, and a guiding positive influence who is open-minded enough to discuss complex issues. They do not need drugs, hormones, and surgery based on their gender identity.

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