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While the headline print for payrolls beat economists' expectations, it failed to beat the whisper number (and earnings were weak) and it appears traders are fading the media's exuberance…
Payrolls printed 235k vs 200k expectations (but was only in line with the whisper number of 235-240k) and earnings disappointed… the result appears to be "sell the news" in the dollar…
And gold is back above $1200..
As Bond yields leak lower…
via http://ift.tt/2mPbYzZ Tyler Durden
The US economy added 235,000 jobs in February, beating upward revised expectations of 200K, in-line with whisper expctations of 233K. Last month’s report was upward revised from 227K to 238K with the net addition for the past two months coming to +9K.
Nonfarm private payrolls rose 227k up from 221k prior and above the estimate of 215k. Manufacturing payrolls rose 28k after rising 11k in the prior month; this also beat the +10k consensus estimate.
The unemployment rate stayed at 4.7%, while the labor participation increased fractionally from 62.9% to 63.0%. In February, the number of people not in the labor force declined by 176K to 94,190K, the lowest since April 2016 as more Americans are returning to the labor force. Additionally, the number of people who “currently want a job” declined to only 5,597K.
The Underemployment rate came in at 9.2%, down from 9.4% in January.
And while the headline data was stronger than expected, the growth in average hourly earnings disappointed again, rising 0.2% M/M, below the 0.3% increase expected, following last month’s disappointing 0.1% increase. Still, on a year over year basis, average hourly earnings rose 2.8%, in line with expectations. Similarly, average weekly earnings also rose by 2.8%, slightly better than expectations.
The bottom line: the number is good enough for the Fed to hike next Wednesday, although for those looking at earnings to provide color on the pace of future rate hikes, they may have to wait until the next jobs report.
More details from the report:
Total nonfarm payroll employment increased by 235,000 in February. Job gains occurred in construction, private educational services, manufacturing, health care, and mining.
In February, construction employment increased by 58,000, with gains in specialty trade contractors (+36,000) and in heavy and civil engineering construction (+15,000). Construction has added 177,000 jobs over the past 6 months.
Employment in private educational services rose by 29,000 in February, following little change in the prior month (-5,000). Over the year, employment in the industry has grown by 105,000.
Manufacturing added 28,000 jobs in February. Employment rose in food manufacturing (+9,000) and machinery (+7,000) but fell in transportation equipment (-6,000). Over the past 3 months, manufacturing has added 57,000 jobs.
Health care employment rose by 27,000 in February, with a job gain in ambulatory health care services (+18,000). Over the year, health care has added an average of 30,000 jobs per month.
Employment in mining increased by 8,000 in February, with most of the gain occurring in support activities for mining (+6,000). Mining employment has risen by 20,000 since reaching a recent low in October 2016.
Employment in professional and business services continued to trend up in February (+37,000). The industry has added 597,000 jobs over the year.
Retail trade employment edged down in February (-26,000), following a gain of 40,000 in the prior month. Over the month, job losses occurred in general merchandise stores (-19,000); sporting goods, hobby, book, and music stores (-9,000); and electronics and appliance stores (-8,000).
Employment in other major industries, including wholesale trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, showed little or no change over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in February. In manufacturing, the workweek was unchanged at 40.8 hours, and overtime remained at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls has been 33.6 hours since August 2016.
In February, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $26.09, following a 5-cent increase in January. Over the year, average hourly earnings have risen by 71 cents, or 2.8 percent. In February, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.86 in February.
The change in total nonfarm payroll employment for December was revised down from +157,000 to +155,000, and the change for January was revised up from +227,000 to +238,000. With these revisions, employment gains in December and January combined were 9,000 more than previously reported. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 209,000 per month.
via http://ift.tt/2m7J4a3 Tyler Durden
On Friday 3 March 2017, in a surprise announcement with implications for the global silver price, the London Bullion Market Association (LBMA) informed its members that the current administrator and calculation agent of its recently launched LBMA Silver Price auction, Thomson Reuters and the CME Group respectively, will be pulling out of providing their services to the problematic London-based silver price benchmark within the near future. Thomson Reuters and the CME Group also issued statements on 3 March identical to that of the LBMA.
The exit is surprising because Thomson Reuters and the CME Group only began administering / calculating the LBMA Silver Price auction two and a half years ago in August 2014, when, amid much hubris, the duo were awarded the silver price contract after a long-drawn-out and high-profile tender process. Notably, the Thomson Reuters / CME contract with the LBMA was for a 5-year term running up to and into 2019. So the duo are now pulling out mid-way through a contract cycle.
More surprisingly, in their statements on 3 March, the LBMA / Thomson Reuters and CME allude to a new European Benchmark Regulation being in some way responsible for the hasty departures. However, given that the units of CME and Thomson Reuters that are parties to the LBMA contract are the benchmark subsidiaries “CME Benchmark Europe Limited” and “Thomson Reuters Benchmark Services Limited”, which specialise in administering and calculating benchmarks, this excuse about a European Benchmark Regulation makes no sense.
In essence, the exit of CME and Thomson Reuters is a major embarrassment for all concerned, and could lead to further reputational damage for the parties involved. It also now re-focuses market scrutiny on an area which the LBMA and its associates could well wish to forget, i.e. the former London Silver Fixing run by the infamous London Silver Market Fixing Limited, a company which itself is still one of the defendants, along with HSBC, Bank of Nova Scotia and Deutsche Bank, in a live New York class action suit that is scrutinizing what plaintiffs describe as manipulation in in the London silver market.
Note that the LBMA Silver Price benchmark is now a “Regulated Benchmark” under United Kingdom HM Treasury Legislation, and is one of 8 financial market benchmarks regulated by the UK’s Financial Conduct Authority (FCA). So this is not some backwater obscure benchmark that we are talking about. This is a benchmark with far-reaching effects on the global precious metals markets and is a sister reference price to the LBMA Gold Price benchmark. The reference prices from these benchmarks are used from everything from valuing Exchange Traded Funds (ETFs) to being the price reference points in ISDA swaps, and bullion bank structured products such as barrier options.
According to the LBMA’s usual public relations mouthpiece Reuters, which relayed the CME – Thonson Reuters news to the broader market on 3 March, the LBMA will be:
“looking to identify a new provider in the summer, and have the new platform up and running in the autumn”
This dramatic “exit stage right” by Thomson Reuters and the CME Group is a far cry from their initial and persistent corporate spin of being "committed" to the silver price auction, which they claimed both at auction launch in August 2014, and also as recently as 2016 when they grovelled with promises of process improvement and wider participation in the auction in the wake of the silver price manipulation fiasco in the LBMA Silver Price auction on 28 January 2016.
It was on 28 January 2016 that the midday silver auction took a whopping 29 rounds to complete and the price derived in the auction was manipulated down by a massive 6% under where silver spot and silver futures prices were trading at that time. See the beginning of BullionStar blog “The LBMA Silver Price – Broken Promises on Wider Participation and Central Clearing” for further details about the 28 January auction fiasco.
On 15 August 2014, the day the LBMA Silver Price auction was launched, the CME professed its long-term commitment to the silver markets, with William Knottenbelt, MD at CME Group stating:
“Through our existing relationships with market participants and the broader silver marketplace we are uniquely positioned to provide a seamless transition for the spot silver benchmark in London.”
“CME Group has a long and successful history of offering benchmark risk management and price discovery solutions for the global precious metals markets.”
More recently, on 22 March 2016, when CME and Thomson Reuters introduced changes to the silver auction in the wake of the 28 January 2016 auction price manipulation, both parties released more spin about their continued commitment to the auction. Thomson Reuters’ Head of Benchmark Services, Tobias Sproehnle, in a statement that now looks to be hollow, said:
“these changes together with a comprehensive consultation with the broader silver community – producers, intermediaries and consumers – are a further demonstration of Thomson Reuters and CME Group’s commitment to providing innovative, market leading benchmarks for the Silver market.“
While Gavin Lee, the head of CME Benchmark Services, led with an equally hubristic statement that:
“in consultation with Silver market participants, we are always looking for new ways to develop this benchmark further“
These statements from CME and Thomson Reuters, less than a year ago, run totally contrary to the fact that they are now going to abandon the LBMA Silver Price auction ship, which will necessitate the appointment of a replacement administrator and calculation agent. Where is the continued “commitment” to the silver benchmark that they were we eager to espouse last March?
Even last October 2016, less than 5 months ago, when Morgan Stanley joined as a handful of other bullion banks as the only direct participants in the auction, CME and Thomson Reuters were out in force with a press release espousing their continued commitment to the LBMA Silver Price benchmark,with Head of Benchmarks for Thomson Reuters, Tobias Sproehnle, professing that:
“we continue to welcome new participants to this essential mechanism for the markets"
The Reuters News report last Friday 3 March was short on information about the rationale for the departure :
“A spokesman for Thomson Reuters confirmed the company was stepping down from the process. CME could not immediately be reached for comment.”
Not very informative or cooperative from either party,when one of the providers was not even available to explain its exit rationale, and the other merely confirms a known fact to its in-house news arm.
However, if you look at the CME Group website, a short announcement was added to its website on 3 March 2017, which stated that:
“The forthcoming European Benchmark Regulation, due to be implemented in January 2018, prompted a review of the existing LBMA Silver Price administration arrangements and, in consultation with the LBMA, CME Group and Thomson Reuters have decided to step down from their respective roles in relation to the LBMA Silver Price auction.“
This statement was also added to the Thomson Reuters website on 3 March.
Before briefly looking at the relevance of this “European Benchmark Regulation”, which the Reuters news article even failed to mention, its notable that the CME / Thomson Reuters early withdrawal was also covered on 3 March by the MetalBulletin website.
According to MetalBulletin (subscription site):
“CME is looking to streamline its precious metals division, with contracts in this area being its fastest growing asset. The exchange wants to focus on its core products, Metal Bulletin understands.”
What MetalBulletin means by this I don’t know. The logic doesn’t make any sense, and the sentence doesn’t even make sense. Benchmarks are a core product of CME group. CME even states that it offers:
“the widest range of global benchmark products across all major asset classes”
CME Benchmark Europe Limited was specifically set up in 2014 to provide the calculation platform for the LBMA Silver Price. Furthermore, CME has just launched a suite of silver and gold futures contracts for the London market (launched in late January 2017), the silver contract being the “London Spot Silver Futures (code SSP)“. Even though these CME contracts have had no trading interest so far, the CME claims that it is currently “working with major banks to synchronize their systems to start trading” these contracts (London Spot Silver Futures and London Spot Gold Futures).
So why would CME want to voluntarily ditch the provision of a high-profile London silver benchmark, when it could attain trading synergies between the LBMA Silver Price and its new London silver futures contracts, or at the very least improve brand recognition in the market? And not to forget that CME and Thomson Reuters claim a”commitment to providing innovative, market leading benchmarks for the Silver market“.
News agency Platts, in a story dated 8 March 2017, touches on what are likely the real reasons for the CME / Thomson Reuters departures:
“CME and [Thomson] Reuters opted to give up their respective duties of the price management due to internal differences"
"many have called for the LBMA Silver Price to be centrally cleared to boost participation"
"A producer source recently said steps were being taken by CME to clear the price discovery mechanism centrally before the announcement to step down"
"Sources agreed the main issue was the lack of participation in the number [auction]"
"A senior source agreed 'I don't think anyone would want it [silver price] in its current form. It needs a minimum to be cleared to attract further participation"
The topic of central clearing and wider participation is briefly explained below.
Turning to the new “European Benchmark Regulation”, what exactly is it, and why would it be relevant for the LBMA and CME and Thomson Reuters to mention the European benchmark Regulation in the context of them pulling out of the LBMA Silver Price auction?
At its outset, the European Benchmark Regulation was proposed by the European Commission. The Commission’s proposal was also issued in coordination with a range of entities and initiatives such as MiFID, the Market Abuse Directive, the benchmark setting processes of the European Securities and Markets Authority (ESMA) and European Banking Authority (EBA), and also the IOSCO financial benchmark principles.
According to law firm Clifford Chance:
” The new [EU] Regulation is a key part of the EU’s response to the LIBOR scandal and
the allegations of manipulation of foreign exchange and commodity benchmarks“
“The Regulation imposes new requirements on firms that provide, contribute to or use a wide range of interest rate, currency, securities, commodity and other indices and reference prices.”
“Most of the new rules will not apply until 1 January 2018″
“The new Regulation imposes broad ranging and exacting requirements
on a wide range of market participants. It may reinforce the trend to discontinue benchmarks and reference prices“
According to law firm Simmons & Simmons:
The Regulation seeks to:
The Regulation aims to address potential issues at each stage of the benchmark process and will apply in respect of:
All of these goals aspired to by the legislation of the European Benchmark Regulation seem reasonable and would benefit users of the LBMA Silver Price auction, so given the above, it seems very bizarre that CME and Thomson Reuters and the LBMA stated last Friday 3 March that:
“The forthcoming European Benchmark Regulation, due to be implemented in January 2018, prompted a review of the existing LBMA Silver Price administration arrangements…“
Remember that the CME and Thomson Reuters service providers to the LBMA Silver Price are their specialist benchmark units “CME Benchmark Europe Limited” and “Thomson Reuters Benchmark Services Limited”. That is what these units do, administer and calculate benchmarks. That is all that they do. The European Benchmark Regulation has been on the radar of the markets for a few years now, especially on the radars of the benchmark units of CME and Thomson Reuters. The Regulation didn’t suddenly appear out of nowhere last week, as the above statement is appearing to hint at.
The statement from CME, Thomson Reuters and the LBMA was also bereft of any explanation as to what their "review of the existing LBMA Silver Price administration arrangement" found. Why so? Why not share this review with the global silver market instead of keeping it secret. Assuming that is, that there actually was such a review undertaken.
Is this European Benchmark Regulation just an excuse being thrown out to distract from other issues that might really be behind CME and Thomson Reuters stepping down.
Or perhaps CME and Thomson Reuters are aware of issues within the current administration of the LBMA Silver Price that would make it difficult to comply with the new legislation or that would make it too onerous to comply? But such rationale doesn’t make sense either because why are CME and Thomson Reuters not bailing out of the all the benchmarks that they are involved in? Furthermore, if the European Benchmark Regulation is a factor, why would any other benchmark service provider such as ICE Benchmark Administration (IBA) or the London Metal Exchange (LME) bother to take part in the LBMA’s forthcoming tender process to find a replacement for Thomson Reuters and CME?
Perhaps CME and Thomson Reuters are worried about future reputation damage of being associated with the LBMA Silver Price due to some brewing scandal? Or perhaps the powerful bullion banks within the LBMA wanted to scupper any change that there will ever be wider participation or central clearing in any future version of the auction?
I will leave it to readers to do their own research on this and draw their own conclusions.
A major issue that has dogged the LBMA Silver Price auction since launch is that it never gained any level of “wider participation” or market representative participation. There are only 7 bullion banks authorised by the LBMA to be direct participants in the silver auction, and there are zero direct participants from the silver mining, silver refineries, and silver users sectors.
This is despite the LBMA, CME and Thomson Reuters all misleading the global silver market on this issue on many occasions, and claiming that there would be very wide participation in the auction after it was launched. See BullionStar blog “The LBMA Silver Price – Broken Promises on Wider Participation and Central Clearing” for a huge amount of factual evidence to back up this statement, including webcasts by CME, Thomson Reuters and the LBMA, and an interview by Reuters with LBMA consultant Jonathan Spall, formerly of Barclays. Here are a few examples:
The LBMA’s Ruth Crowell was claiming back in July and August 2014 that they were interested in having at least 111 direct participants:
“clear demand for increased direct participation, and we had 25% of those 444 coming back saying they would be interested, and we’re still interested in having all of those participants on board”
“The advantage with centralised clearing, particularly for the pricing mechanism, is that we can really exponentially grow the amount of direct participants“
Jonathan Spall, LBMA Consultant stated that:
“The hope of course is that we get many more participants in the new benchmark process….while it is likely that we will start by having banks involved it is ultimately hoped that the wider market will participate, be they refiners, miners etc.“
“Ultimately – and as I said before – the intention is that there is much wider participation. So yes, refiners, miners etc.“
Harriett Hunnable, then of the CME Group, stated:
“So this is really the new world, this is not the old fixing…..this is wider participation…and the London bullion market is really encouraging that…this is the new world, or the LBMA Silver Price!”.
According to the CME / LBMA / Thomson Reuters presentations, there was supposed to be a “phase 3 introduction of centralised clearing”
“Central counterparty clearing will enable greater direct participation in the London Silver Price“
In summary, central clearing would allow direct participants to participate directly in the auction without the need for bi-lateral credit lines. Currently, only large banks that can set up bi-lateral credit lines with each other can even begin to think of being direct participants. However, after the initial spin in July and August 2014 prior to the benchmark being launched, the plan for central clearing was quietly dropped by the LBMA / CM and Thomson Reuters.
The CME and Thomson Reuters have now had 32 months in which to introduce central clearing into the silver auction and it hasn’t happened. Nor will it now. The fact of the matter is that the LBMA banks do not want wider participation and they don’t want central clearing of auction trades either. These banks, which at the end of the day are just costly intermediaries, essentially want to monopolise the silver auction and prevent wider participation, and prevent true silver price discovery. Could it be the banks through their LBMA front that have sabotaged the contract with CME and Thomson Reuters so as to reset the contract and re-start another tender process (choosing ICE or LME) that will ensure that no wider participation can ever see the light of day?
It’s also important to note that there is no way for miners and refiners to be direct participants in the silver auction. This is because the LBMA has designed the auction participant rules to keep out refiners and miners (and anyone else that is not a bullion bank). The rules are specifically designed so that only bullion banks can satisfy the LBMA’s Benchmark Participant criteria. See section 3.13 of the LBMA Silver Price auction methodology document accessible here.
Currently only 7 bullion banks are direct participants in the auction, namely HSBC, JPMorgan Chase, Bank of Nova Scotia (ScotiaMocatta), Toronto Dominion, UBS, Morgan Stanley, and China Construction Bank. Most of these banks are very influential on the LBMA Management Committee. HSBC, Scotia and Mitsui were in the auction from Day 1 on 15 August 2014. UBS joined the auction on 26 September 2014, JP Morgan Chase Bank joined on 14 October 2014, Toronto Dominion Bank joined on 6 November 2014. Mitsui left in either late 2015 or January 2016 (the exact date is unclear). China Construction Bank only joined the auction on 6 May 2016.
As mentioned above, Morgan Stanley only joined the LBMA Silver Price auction on 25 October 2016 (which is just 4 months ago), at which point the LBMA / CME and Thomson Reuters had the audacity to spin that 7 LBMA bullion banks trading in a shadowy auction of unallocated silver accounts in London somehow represents the global silver market:
CME: “The addition of another member brings greater depth and diversity to the market and underlines the ongoing globalisation of the Silver Price as a leading, liquid precious metals benchmark.”
Thomson Reuters: “With the addition of Morgan Stanley to the panel, the LBMA Silver Price provides even deeper insight into the global silver market. We continue to welcome new participants to this essential mechanism for the markets.”
LBMA: “They [Morgan Stanley] add depth and liquidity to the auction and I look forward to other market participants joining in the future.”
But, to reiterate (and as was stated previously in this blog), the LBMA Silver Price auction is not representative of the global Silver Market whatsoever, and it does not meet some of the simplest IOSCO benchmark requirements:
“IOSCO benchmark principles state that a benchmark should be a reliable representation of interest, i.e. that it should be representative of the market it is trying to measure. Interest is measured on metrics such as market concentration. In the Thomson Reuters methodology document (linked above), on page 11 under benchmark design principles, the authors estimate that there are 500-1000 active trading entities in the global silver market.”
The Thomson Reuters methodology document from August 2014 also admitted that “volumes in the LBMA Silver Price are a fraction of the daily volume traded in the silver futures and OTC markets”.
Why then are 7 LBMA bullion banks allowed to monopolize the representation of 500 – 1000 active trading entities from the global silver market within the auction, an auction that its worth remembering generates a silver reference price which is used as a global silver price reference and pricing source?
Based on the current LBMA Silver Price auction rules, the vast majority of the world’s silver refiners cannot directly take part in the silver auction since only Full Members of the LBMA can even think of becoking a direct participant.
However, only 8 precious metals refiners are even Full Members of the LBMA, while there are another 25 refiners that are Associates of the LBMA. Of the 8 full members, 5 of these refiners are on the LBMA refiner Referee panel, namely, Argor-heraeus, Metalor and PAMP from Switzerland, Rand Refinery from South Africa, and Tanaka Kikinzoki Kogyo from Japan. These refiners were added to the panel as LBMA Associates in 2003, and were only made Full Members in 2012. The only reason they happened to be fast-tracked as Full Members of the LBMA was due to their status as Referees for the LBMA good delivery list. Even the other major Swiss based refinery Valcambi is still not a Full Member of the LBMA.
Based on the current participant criteria of the Silver auction, where only full LBMA members could conceivably become direct participants, 25 of the refiners that are LBMA Associates cannot directly take part in the auction even if they wanted to. Candidates for Full LBMA Membership also have to jump through a number of hoops based on sponsorship by existing members, business relationships, due diligence, and involvement in the precious metals markets.
For a refiner to even become a LBMA 'Associate', the refinery must have already attained Good Delivery Status for its silver or gold bars. There are about 80 refineries on the LBMA’s current Good Delivery List for silver, most of which are not even Associates of the LBMA The chance of the vast majority of these refiners taking part in the LBMA silver auction is nil since not only are they not LBMA Full Members, they are not even LBMA Associates.
Based on the current auction criteria, it’s without doubt literally impossible for nearly all silver producers / silver miners on the planet to directly participate in the LBMA Silver Price auction. Precious metal mining companies are not normally officially connected to the LBMA, and would more naturally be members of the Silver Institute or World Gold Council or another mining sector organization. Mining companies cannot be silver auction participants since there are no mining companies that are Full Members of the LBMA. The only mining companies that are even “Associates” of the LBMA are Anglogold Ashanti and Coeur Mining.
In 2014, Coeur Mining’s treasurer, referring to the LBMA Silver auction said:
“We hope to have the opportunity to become a direct participant down the road and look forward to working with the LBMA, CME and other silver producers to drive the evolution of this market.”
The unfortunate Coeur Mining now looks like it has been strung along by the LBMA with empty promises that it can somehow someday participate in the silver auction, but this is literally a fiction given the way the auction rules are currently set up.
In its announcement on 3 March, the LBMA said that it will shortly launch a tender process to appoint a replacement provider. The LBMA told Reuters News:
“We would be looking to identify a new provider in the summer, and have the new platform up and running in the autumn”
However, given the abysmal track record of the LBMA Silver Price, the question that should really be asked at this time is why the bullion bank controlled LBMA is even allowed to be in charge of such an important “Regulated Benchmark” as a global silver price benchmark, a benchmark that has far-reaching effects on global buyers and sellers of the physical metal silver.
Take a brief look back at how the last tender process run by the LBMA for the London silver price was handled.
A Silver Price Seminar held by the LBMA on 19 June 2014 was not even open to the wider bullion market. As Ruth Crowell, CEO of the LBMA, told the publication MetalBulletin in an October 2014 interview:
“Not just our members, but ISDA members, and any legitimate members of the market were invited to the seminar. We also had observers from the FCA and the Bank of England. We wanted to keep [attendance] as wide-ranging as possible but to avoid anyone who perhaps would be disruptive“
What is this supposed to mean? To prevent anyone attending the seminar who might have a different view on how the global silver price benchmark should be operated that doesn’t align with the view of the LBMA?
The actual process of selecting the winning bid from the shortlist of tender applicants was only open to LBMA Full members and Seminar attendees via a 2nd round voting process. The independent consultant review that was part of the selection process, was conducted by someone, Jonathan Spall, who was not independent of the former fixings and so should not have been involved in the process.
Promises of wider participation involving refiners and miners were abandoned by the CME, Thomson Reuters and the LBMA. Promises of central clearing of auction traded were thrown out the window by these same people. Prior to launch, the auction platform was hastily built by Thomson Reuters and CME without an adequate market-wide solution for clearing silver trades. Another of the bidders, Autilla/LME, had a working auction solution which would have allowed wider market participation at August 15 2014 go-live, but this solution was rejected by the LBMA Management Committee, LBMA Market Makers and the LBMA Data Working Group at a closed meeting in July 2014 These groups had the ultimate say in which applicant won the tender.
There were only 3 participants in the LBMA Silver Price auction (all of them banks) when it was launched in August 2014, and two of which, HSBC and Scotia, were parties to the former London Silver Fixing. The LBMA Silver Price auction was therefore an example of same old wine in a new bottle. The same 2 banks, HSBC and Scotia are now defendants in a silver price manipulation class action suit in New York. There are now only 7 direct participants in the LBMA Silver Price. These are all bullion banks. Ludicrously, this is 32 months after the auction has been launched. The LBMA accreditation process specifically prevents refiners and miners from joining the auction. Since there are 500 – 1000 trading entities of silver globally, even a village idiot could see that the LBMA Silver Price mechanism is totally unrepresentative of the global silver market and that it cannot faciliate proper silver price discovery.
The defection of CME and Thomson Reuters now provides a one-off opportunity for the global silver market to insist that the current scandal ridden current auction be scrapped and taken out of the hands of the bullion bank controlled London Bullion Market Association (LBMA). It is also an opportunity to introduce a proper silver price auction in its place that is structured to allow direct participation by hundreds of silver trading entities such as the world’s silver refiners and miners, an auction that employs central clearing to allow this wider participation, and an auction that is based on trading real physical silver and not the paper credits representing unallocated claims that the participating London bullion banks shunt around between themselves each day. This could help lead to real silver price discovery in the global silver market. However, the chances of this happening with the LBMA still involved in the new tender process are nil, and either the London Metals Exchange (LME) or ICE Benchmark Administation (IBA) will probably ride to the rescue of the LBMA bulion banks in the not too distant future and pick up the pieces from CME / Thomson Reuters.
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As House Republicans have rolled out their Obamacare repeal bill to widespread criticism, they have begun downplaying the importance of the legislation, saying that it is merely the first part of a multi-stage plan, potentially involving multiple bills and regulations, all of which will play a part in repealing and replace the law. “This is a three stage plan,” Health and Human Services Secretary Tom Price said Tuesday, the same day that President Trump tweeted about “getting rid of state lines” in “phase 2 & 3 of the health care rollout.
Under this plan, rolling back the health law isn’t so much a matter of a single bill as it is a sort of Obamacare Repeal Expanded Universe—a policy franchise that Republicans plan to execute over months or even years, the legislative equivalent of the comic book expanded universes that have taken over Hollywood.
There are reasons for this strategy, but also serious risks, and the GOP’s adoption of this plan shows just how precarious the repeal effort is.
The main reason for the strategy is procedural. Republicans plan to skirt the 60 vote threshold in the Senate by passing their Obamacare repeal bill through the reconciliation process. That will allow them to pass a bill on a simple majority vote, but it also means that they can only address parts of the law with a direct budgetary impact—basically the tax and spending portions of the law.
But Obamacare is much more than taxes and subsidies. The bill also includes numerous regulations, including things like the law’s essential health benefits, which require insurers to include certain coverage provisions. That’s where step two comes in.
The second stage is to use executive branch authority to modify Obamacare’s regulations—presumably in conjunction with new statutory language on the books following the Obamacare repeal bill. Under President Obama, HHS wrote thousands of pages of regulations governing the minute details of the Affordable Care Act’s implementation; many of those regulations could be tweaked or unwound as part of this process.
Again, this is a team effort in which everyone plays a role: If the House and the Senate passing the repeal legislation are the Obamacare Repeal Expanded Universe versions of Iron Man and Captain America, the regulatory effort from the administration, which would likely be a joint project between White House senior staff and Tom Price’s HHS, are something like Thor and the Hulk.
The final step, as always, is to keep expanding the universe as wide you can. That means going back to Congress where the plan would be to pass some unknown number of bills that would require 60 votes in the Senate. That, of course, means bringing Democrats on board. Right now, of course, Democrats in Congress are unified in opposition to any GOP health care plan. (They’re basically running the same oppose-everything strategy that Republicans ran against Obamacare starting in 2009.) But once the repeal bill has passed, and the Trump administration has reworked the regulatory landscape, Republicans think they might have a chance to peel off Democratic votes because defending the Obamacare status quo won’t be an option any longer.
That’s the theory, anyway. But it’s a risky one at best.
That’s because it requires Republicans in Congress to trust that the Trump administration will swiftly and effectively execute regulatory reforms, which is dicey at best given a) how tricky and exhausting the regulatory process is under normal circumstances and b) the fact that neither Trump nor any of the senior staff seem to have any meaningful health policy priors—or even a basic understanding of how health policy works.
It also amounts to a bet that a handful of Senate Democrats will eventually play along. There is no reason to believe that they will do so. In fact, there is every reason to believe that they won’t—just as Republicans did not make any real effort to engage productively with health policy until they were forced to, on the bet that politically it was better to stick to opposition only.
This “three prongs” thing is so pathetic. The proposition is: bet on the efficacy of the Trump admin and a bipartisan deal with Democrats.
— Josh Barro (@jbarro) March 9, 2017
More broadly, the multi-stage complexity of the plan is itself a weakness, because it requires every single step to go right. If any one of them doesn’t work as intended, the whole thing starts to get wobbly. That’s particularly true of the first step, which provides the foundation for everything that comes afterwards.
Just look at what’s happening to the expanded movie universe being built out of DC Comics characters: The plan was to create a Marvel movie universe style franchise, with at least half a dozen films scheduled over a multi-year timeline.
But the kickoff entry in the series, last year’s Batman v. Superman (Man of Steel was really more of a prologue), made enough money to be profitable, but was widely panned by critics, and fell short of expectations at the box office. The follow-up, Suicide Squad, was another box office hit, but the critical reception was even worse. Since then, the franchise has lost directors for several key films, and undergone a senior leadership shakeup.
Now look at what’s happened to the GOP’s Obamacare repeal bill: Reaction from the right and the left was broadly negative in the days after it was released, and there’s enough opposition within the House, mostly from the right, that it is currently unclear if it can pass at all. Even if it does pass in the House, it still faces opposition in the Senate, largely from moderates would prefer a more generous bill. So modifying the bill to make it more amenable to House conservatives is likely to make it even less likely to pass in the Senate.
And this is only the very beginning of GOP’s stage one. There’s still a Congressional Budget Office score to come, and a potentially difficult negotiation with the Senate parliamentarian, among other challenges.
It’s still too early to predict the eventual outcome with great confidence, but the rollout so far has been rocky to say the least. And the chaos so far doesn’t exactly bode well for the rest of this policy franchise.
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Via Kevin Muir of The Macro Tourist blog,
Remember a week ago when all the crude oil bulls told us how the massive net speculative position was nothing to worry about? And to be fair, for the longest time they seemed to be right. Crude oil prices were extremely sticky, refusing to budge from their elevated level.
Yet, seemingly out the blue, prices suddenly tumbled $4. The media will try to assign a reason for the decline, but there was no piece of news that was any more bearish than anything from the past couple of weeks.
Now to be fair, the gigantic net long position in crude oil was slightly more complicated than the headlines indicated. I wrote about the fact that although specs were record net long in terms of contracts, when measured in dollars, or percentage of open interest, the picture wasn’t quite so extreme. Yet I cautioned that all of the speculative optimism was a huge red flag (Re-evaluating Crude Oil Spec Positioning).
I am reposting a graph from that piece that shows the extended nature of speculative positioning.
Now fading a one way market based on over eager speculators is not for everyone. You’re almost guaranteed to look like an idiot for a while, and once it turns, everyone will claim it was obvious and they weren’t part of the herd leaning the wrong way. But the truth is that few catch the move because it is mentally so difficult to stand on the other side of the masses.
With that in mind, I present the next accident waiting to happen (and I realize you will most likely think me a knob for suggesting taking the other side of this trade).
Speculators are betting heavily that the Federal Reserve will continue raising rates. In fact, they have taken a net short position of over $2.5 trillion dollars of 3 month Eurodollar futures contracts.
And although the five year t-note future net spec position has been reduced in the past week, it is still sitting near record short levels.
I know fading the idea the Fed will not raise rates as quickly as the market anticipates seems like a fool’s errand. The US economy is the brightest star in a dimly lit sky. Trump will cut taxes, spend money on infrastructure and make America great again. Of course rates will need to be considerably higher under this scenario. Yeah, I get it…
I don’t know what the catalyst will be. Maybe it will be a terrible unemployment number. Maybe it will be a sell the news reaction to next week’s Fed meeting. I don’t have a clue.
But I know that shorting the front end of the US yield curve is a crowded trade. And if there is one thing that I have learned, it’s that crowded trades never end well…
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With practically all but the IPO-allocated insiders still under-water, Snap shareholders will be anxiously awaiting today’s unleashing of options of the money-burning, user-shrinking ‘camera’ company.
Not been a fun ride so far…
But it’s about to get even more exciting, as Reuters reports, weekly and monthly options contracts on Snap’s shares are expected to start trading on Friday, CBOE said last week, once certain regulatory requirements for their listing are met. Snap’s options market debut will allow traders to place bets on where they expect the shares to trade in the future.
“I think there will be high demand for Snap options,” said Ophir Gottlieb, chief executive of Los Angeles-based Capital Market Laboratories.
“Technology stocks, especially social media stocks, are the kind of companies that really draw a lot of activity from options traders,” said David Russell, senior manager at online broker E*Trade Financial Corp (ETFC.O) in Chicago.
The timing of the Snap options listing, coming as it does in the midst of a market-wide slump in volatility, also bodes well. Higher volatility in Snap shares relative to the broader market could offer enticing potential payouts for traders who place bets on sharp price moves.
“The options market in general has been hungry for anything that has volatility,” Gottlieb said.
The options will also give short sellers an additional venue for betting on a drop in the stock, market experts said.
“People who want to bet to the downside will be looking to buy puts on a name like this,” Russell said.
Notably, while it is difficult to pin down exactly how many shares are available to lend to short sellers, early data suggests short interest around $300 million, S3 Partners Managing Director of Research Ihor Dusaniwsky said.
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Good grief, Kong again? Let’s recap. 1933: The big ape makes his stop-motion debut. 1962: Side trip to Tokyo for some Mixed Monster Arts with Godzilla. 1976: Some Christmas Kong with newcomer Jessica Lange. 2005: Peter Jackson takes a fanboy whack at the never-ending franchise. There was also a Kong stage musical a few years back, but that was in Australia and let’s stay focused.
Anyone who’s seen all or even a few of the previous Kong movies is unlikely to be enthused anew by the latest one, Kong: Skull Island, a second feature by indie director Jordan Vogt-Roberts, who’s been given an estimated $190-million to go through all the old motions once again. The movie has the usual deep monster bench—along with Kong himself, we make the acquaintance of assorted stegosaurs, brontosaurs, dive-bombing pteranodons, serpenty elasmosaurs and big frickin’ tree spiders. Giant ants are also promised at one point, but never arrive. Which is too bad—there can never be too many monsters.
Humans are another matter, writes Kurt Loder.
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Via Hans Mathias Moeller of Global Risk Insights,
Sweden’s immigration policy may be honourable but has not come without social problems – which in turn herald a political shakeup.
Sweden has accepted more refugees per capita than any other European country. At the height of the European refugee crisis in 2015, Sweden accepted 10,000 refugees per week. Sweden’s liberal immigration policy is honourable, but it does not come without problems. As social problems increase, Sweden’s far right party, the Sweden Democrats (SD) are gaining territory and will likely be the major winner in the next election.
Sweden has 53 areas defined as particularly vulnerable areas, vulnerable areas, and risk areas. 15 of these areas are particularly vulnerable and are primarily located in the suburbs of Stockholm, Gothenburg, and Malmo. The National Operations Department (NOA), part of the Swedish police, defines particularly vulnerable areas as areas where the safety and security situation is difficult or impossible to control. Attacks against police officers are common, particularly during arrests. The most notable outbreak of violence occurred in 2013 when hundreds of cars and schools were set on fire and police were attacked in Stockholm’s poorer suburbs. Intimidation of witnesses to crimes that could testify in court is common, which undermines the legal system.
NOA also mentions that particularly vulnerable areas in Sweden have parallel society structures, or their own norms, economies, and legal systems. Violence is a regular occurrence and can happen during the day and put innocent bystanders at risk. The level of violence is increasingly deadly, particularly between different criminal constellations. Religious extremism is present in a third of these areas with intolerance against moderate Muslims and individuals travelling to join foreign terrorist groups.
Particularly vulnerable areas are in red. Source: Nationella Operativa Avdelningen (NOA)
The number of particularly vulnerable areas will most likely increase. A major reason is that Sweden, for all its good intentions, has failed to integrate newcomers into the labor market. A segregated housing market and school system are some of the root causes for why many newcomers fail to receive adequate education and become competitive enough to successfully enter the labor market.
Sweden’s liberal immigration policy, with the Swedish Migration Agency projecting at least 250,00 new immigrants arriving over the next five years, undermines integration efforts and adds to the exclusion felt by many of the immigrants already living in Sweden. As prospects fade, hopelessness and resentment grows. Feelings of social marginalization and frustration create an environment where immigrants become more susceptible to recruitment into criminal groups, and in worse case scenario, terrorist groups.
Sweden is vulnerable to terrorist recruitment by Salafi-Jihadist groups, primarily the Islamic State. The International Centre for the Study of Radicalization and Political Violence at King’s College in London estimates that Belgium, Denmark, and Sweden have more citizens fighting in Iraq and Syria per capita than any other European country. The Soufan Group assesses that 300 individuals have left Sweden to join the Islamic State in Syria and Iraq. Analysis by the Swedish Security Service indicates that more than 15% of people leaving Sweden to join foreign terrorist groups were born in the Horn of Africa and 40% were born in Sweden to at least one foreign-born parent. Individuals leaving Sweden to join foreign terrorist groups represent 30 different nationalities and most recruits were born between 1985-1994.
The Swedish Security Service has also observed a new trend. Fewer people are traveling to conflict zones, but the numbers of individuals who are sympathising with Islamic terrorism are increasing. For example, Goteborg Posten – a Swedish newspaper – featured an October 2016 survey that found among 1,200 students aged 12-18 years old in Gothenburg’s particularly vulnerable areas, more than 11% expressed sympathies with the Islamic State and at least 13% knew someone that sympathised with the Islamic State.
The European Parliament observed in the report “2016 Labor Market Integration of Refugees” that labor market participation is the single most important step toward successful integration into host societies. Sweden has failed in this regard. Data released by Statistics Sweden (SCB) in January 2017 shows that it takes an average of nine years for half of all refugees that arrive in Sweden to enter and establish themselves on the Swedish labor market. It is harder in some cities. For example, only 36% of all refugees who arrived in the third largest city, Malmo, in 2004 had a job ten years later. Adequate education is often seen as a pre-requirement for a successful entry into the labor market.
The school system and housing market demonstrate profound segregation. An October 2015 survey of 38 urban districts shows a 78-88% composition of immigrants born outside Europe. Herrgarden in Malmo has a 96% share of immigrants born outside Europe. Housing segregation is also a partial explanation for the school segregation and the challenges that students in these areas face. It is estimated that the number of students with immigrant backgrounds from outside Europe who fail to qualify for Swedish high school education has increased from 25% to 40%.
This is a view supported by the Organization for Economic Co-Operation and Development (OECD), which criticises Sweden for continued gaps between immigrants and native-born students. OECD estimated in 2015 that almost one in two immigrant students (48%) perform below the baseline in mathematics compared with 22% for native-born students. School segregation cannot only be explained by housing segregation, but also an acute shortage of teachers and charter schools that allow students from better socio-economic backgrounds to pay for better schools and education.
As social problems take root in Sweden, the anti-immigration party – the Sweden Democrats (SD) – is gaining political ground. SD will most likely be declared the major winner in the 2018 Parliamentary Elections. This assertion is based on several factors. Foremost, the general reluctance among the traditional political parties to discuss social problems and economic costs associated with Sweden’s liberal immigration policy. Discussions over immigration and integration are highly sensitive issues in Swedish politics.
This unwillingness in turn has created a vacuum and niche area that SD has exploited and filled. This is evident in SD’s increased popularity at every national election since the party entered the Riksdagen (Swedish Parliament) in 2010 with 5.7% of the national votes. In the 2014 election, SD gained 12.9% of the votes. In a sense, SD’s success can be viewed as the voter’s verdict on how well the country is handling immigration and integration.
Signs put up by the Sweden Democrats at Ostermalmstorg subway station in Stockholm. Source: The Telegraph
Recent national opinion polls indicate that SD enjoys between 17% to 26% support among voters. National polls leading up to the 2014 Parliamentary Election was not close to these numbers. In the months leading up to the 2014 election, SD enjoyed between 8-10%. Previous elections have also proved that SD received somewhat higher support than the national polls indicate. Based on national polls, it is plausible that SD could become the second largest political party next year.
A national survey by Dagens Nyheter/Ipsos conducted in January 2017 indicates that half of all voters believe Sweden is heading in the wrong direction. Voters are primarily concerned with immigration, integration, crime, and the healthcare system. The social democratic government’s failure to handle the refugee crisis in the summer and fall of 2015 has likely served as a turning point.
Expect immigration, integration, and law and order to be the major topics in the Swedish election year. These topics also happen to be the core questions of SD, which is an indication that SD is in sync with sentiments across the country. On a final note, anticipate the pre- and post-election periods to expose a strongly divided nation over immigration, integration and crime.
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Overnight Media Digest
WSJ
– Royal Dutch Shell Plc is selling nearly all of its Canadian oil-sands developments in deals worth $7.25 billion, deserting a region that has come to symbolize the risks for energy companies in high-cost, carbon-intensive sources of oil. http://on.wsj.com/2n5YcK3
– Dutch paints and chemicals maker Akzo Nobel NV said it had rejected a 20.9 billion euros ($22.15 billion) offer from U.S. peer PPG Industries Inc, setting up a trans-Atlantic standoff between two long-lived industrial giants amid a wave of consolidation in the sector. http://on.wsj.com/2n5Lyub
– Americans now officially drink more bottled water than soda. It’s a shift that decades ago might have seemed unthinkable—that consumers would buy a packaged version of something they could get free from a tap. But bottled-water sales have been growing in the U.S. ever since the arrival of Perrier in the 1970s. The gains accelerated in recent years amid concerns about the health effects of sugary drinks and the safety of public-water supplies. http://on.wsj.com/2n5Ht9m
– After almost a decade of double-digit sales growth, Lego A/S said revenue rose just 6 percent world-wide in 2016, after a big marketing push in the U.S. failed to lift stalled sales there. The world’s second-largest toy maker said U.S. sales were flat for the year. http://on.wsj.com/2n5Nrae
– In its quest to prove Airbnb Inc is more than a casual home-sharing service, the hotel industry issued a stinging analysis of the website that casts the company more like a professional short-term rental operation. http://on.wsj.com/2n5JT8i
– Grocery heavyweights including Wal-Mart Stores, Inc , Kroger Co and Meijer Inc are broadening delivery areas across the country and the ways in which customers get their groceries. http://on.wsj.com/2n5Nz9I
– A group that includes Jahm Najafi, chief executive of private investment firm Najafi Cos, and private-equity firm Pamplona Capital Management has emerged as a bidder for Time Inc , according to people familiar with the matter. http://on.wsj.com/2n5JkuX
– The Samsung conglomerate’s de facto leader, Lee Jae-yong, and four top lieutenants formally denied all charges against them as a South Korean court opened a trial into a corruption scandal that has led to the impeachment of President Park Geun-hye. http://on.wsj.com/2n5Dxpf
– American International Group Inc Chief Executive Peter Hancock, apparently having lost the faith of the insurer’s directors, quit at a board meeting Wednesday where his future was being discussed, according to people familiar with the matter. http://on.wsj.com/2n5JW3V
NYT
– Stephen A. Ross, a seminal theorist whose work over three decades reshaped the field of financial economics, died on March 3 at his home in Old Lyme, Connecticut. He was 73. http://nyti.ms/2m8rZO4
– Airbnb has raised an additional $1 billion, expanding its war chest at a time of increased investor interest in fast-growing businesses. The company, which disclosed the funding in a securities filing on Thursday, raised the money in a financing round that began last summer and that valued the business at $30 billion. http://nyti.ms/2lJAse6
– Scott Pruitt, the head of the Environmental Protection Agency, said on Thursday that carbon dioxide was not a primary contributor to global warming, a statement at odds with the established scientific consensus on climate change. http://nyti.ms/2m6fSjH
– Peter Hancock, the current chief executive of American International Group, said on Thursday that he would resign after shareholders had lost faith in his two-and-half-year effort to turn the company around. A.I.G. said Hancock, 58, would stay until a successor had been chosen in a “comprehensive” search by its board. http://nyti.ms/2mrOGiw
Canada
THE GLOBE AND MAIL
** Finance Minister Charles Sousa said on Thursday he was looking at the tax as one of a number of options to control aggressive growth in home prices, after rejecting such a measure last year. https://tgam.ca/2nbSHWD
** The Canadian Securities Administrators issued new guidelines on Thursday for social media usage, telling companies they must continue to report material information with traditional press releases but can use social media to further disseminate the news. https://tgam.ca/2m70ZhA
** As the U.S. border tightens for both political and bureaucratic reasons, the federal government is launching a new stream of its temporary foreign worker program to entice highly skilled workers to come to Canada. https://tgam.ca/2mnSQGy
NATIONAL POST
** Google Inc is building its first cloud region in Canada, which it says will allow businesses to keep sensitive data within the country while also speeding up services like machine learning that helps better analyze information. http://bit.ly/2lKnmxa
** Canada’s biggest banks and insurance companies have launched a private-sector fund of up to $1 billion to provide long-term financing to burgeoning high-growth businesses, the firms announced on Thursday. http://bit.ly/2m3YGeD
Britain
The Times
Annual bonuses at the John Lewis Partnership have been cut for the fourth consecutive year to their lowest level since 1954 as the retailer warned of an increasingly uncertain market. http://bit.ly/2nc5B75
Martin Sorrell could find himself at the centre of a fresh row over boardroom pay after the chief executive of WPP Plc collected a 42 million pound ($51.08 million) share award under the final tranche of one of the City’s most contentious executive reward schemes. http://bit.ly/2nbNeiF
The Guardian
Theresa May and Philip Hammond are facing a growing rebellion among Tory MPs over the decision to increase national insurance contributions for the self-employed in Wednesday’s budget. http://bit.ly/2nc5WGT
Property tycoon Christian Candy’s key adviser was a director of a detective agency which made payments to the Russian dissident Alexander Litvinenko and to the former KGB officer accused of murdering him. http://bit.ly/2nbTWFA
The Telegraph
UK government measures to ease the burden of business rates are “small beer” and will do nothing to prevent future bill shocks, according to the Institute for Fiscal Studies. http://bit.ly/2nbIbPc
Stricken Co-operative Bank Plc has warned that it may have to raise as much as 750 million pounds ($912.08 million) from investors if it fails in its attempt to find a buyer for the business. http://bit.ly/2nbQivg
Sky News
Britain’s biggest employers’ group is to seek Privy Council approval to extend the term of its president as it grapples with the challenges of UK’s impending exit from the European Union. http://bit.ly/2nb3Oz7
Tesco Plc says 140,000 workers are to be compensated after a payroll blunder meant they were paid below the National Living Wage.
The Independent
Theresa May should refuse to pay the money the European Union says Britain owes it in legally binding liabilities, Boris Johnson has said. http://ind.pn/2nbMgCX
UK workers took fewer sick days in 2016 than at any time since comparable records began almost 25 years ago. Days lost through illness fell to just 4.3 per worker last year, compared to 7.2 days in 1993, the Office of National Statistics revealed. http://ind.pn/2nbSUJA
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2016 was the year of good people stepping up, emboldened by Donald Trump’s run for the White House and the message he delivered. At first people scoffed – saying he entered the Presidential race to promote his brand, or to stroke his ego. That he was a sideshow with no chance – maybe even a charlatan. Most people never stopped to notice that Trump has been consistent in his message for nearly 30 years.
Flashback: Donald Trump’s thoughts on politics and the direction of the country – 1988 http://pic.twitter.com/RiK7DvEb9o
— ZeroPointNow (@ZeroPointNow) March 10, 2017
Then there was that time before the debate last February when Dr. Ben Carson had that awkward moment on stage. As the rest of the candidates shuffled past smirking – especially low energy Jeb, Donald Trump casually walked over and stood next to Carson like it was no big deal:
Donald Trump stands strong next to Ben Carson before February 2016 debate as other candidates smirk their way past. http://pic.twitter.com/iaD0on7uHR
— ZeroPointNow (@ZeroPointNow) March 10, 2017
This unscripted moment of humanity was when I started paying attention to Donald Trump. The more I listened, the more I realized he was absolutely for real. He was our guy – though I was positive he didn’t have a chance in hell of winning. Surely he’d be diced up and marginalized by the media like all the other outsiders who have run for President – and boy did they try. The rest is history…
Well, not quite…
If we are to believe things went down the way Dr. Steve Pieczenik described last November; while Donald Trump flew around the country delivering his vision to America, good people within the US intelligence community saw an opportunity to take America back from a cabal of open-border neocons backed by socialist oligarchs like George Soros. According to Pieczenik, a “counter-coup” was hatched – assisted by Julian Assange of WikiLeaks. Throughout the 2016 election, a series of emails – possibly originating from DNC insiders and white hat hackers, possibly involving the Russians (depending on whose story you buy) were passed to Assange. These emails were made available to the public through WikiLeaks, and the sheer volume of information released was overwhelming.
There was no table of contents or any other guide to the content. Instead, these were raw – DKIM verified emails, which would take nothing short of a massive crowd-sourced effort to process and decipher. Within days however, dots were rapidly being connected by a quantum-computer of human processing power across various message boards – mostly 4chan and Reddit’s “The_Donald”. This internet army, if you will, refer to themselves as “Weaponized Autists” – a self-deprecating term to describe their Rain Man abilities to quickly connect dots, form theories, discard dead ends, and spread their findings like wildfire through social media giants Reddit, Twitter, and Facebook. Oh, and there’s a frog-God named Kek you may have heard of.
The results of the online efforts were staggering, as the world witnessed revelations of “Pay for Play” by Clinton Foundation donors who funded ISIS, the DNC cheating against Bernie Sanders, MSM collusion with the Clinton campaign, Hillary’s dreams of open borders, “unaware and compliant” citizens, #SpiritCooking, Wet Works, strange food-related code words we’re all waiting for resolution on, and evidence of Aliens and Zero Point Energy – or a completely insane Edgar Mitchell (15052).
You can read more here.
Now the rest is history…
After the election, however, the weaponized autists quickly grew bored, so when washed up attention whore Shia LaBeouf live-streamed his “He Will Not Divide Us” anti-Trump “art” installation at a museum in New York – in which disaffected snowflakes endlessly chanted “He Will Not Divide Us” like Kool-Aid sipping morons, 4chan wasted no opportunity infiltrating and disrupting the high-tech temper tantrum:
HE. WILL NOT. DIVIDE US. (REEEEE!) – 4chan invades HWNDU ???? http://pic.twitter.com/dK2fSGN4Lp
— ZeroPointNow (@ZeroPointNow) March 10, 2017
After the stream was effectively taken over by patriots, LaBeouf tried to wall off the anti-Trump exhibit (irony), granting entrance only to those who had been vetted, so as not to “terrorize” the snowflakes. This didn’t work, and the exhibit was eventually shut down by the museum on January 10th. LaBeouf then moved the live stream to Albuquerque in February, which was a dismal failure.
Not to be outdone, Shia finally relocated the livestream to a remote unknown location. The stream featured a white “He Will Not Divide Us” flag on a flagpole – blowing in the wind, with the sound of frogs in the background.
CHALLENGE ACCEPTED:
4chan would not be bested by LaBeouf, and a call was issued within hours of the stupid flag’s hoisting. Let’s take a look at what happened next:
Anon gets technical:
A great start, but there was an early break in the case which narrowed things down considerably: Shia was seen at a Greenville, TN diner – and TMZ reported him fly fishing in the area.
A call is issued to local residents who might be viewing the thread. Note the course language – (not safe for safe spaces):
Building evidence:
One anon hunting around Greenville finds a flagpole on top of an art gallery – a good guess considering HWNDU’s previous locations:
And is reminded of the frogs…
4chan demands proof when people make claims:
A plane is spotted! Another anon jumps in with a link to flight radar information over Greenville, TN:
Two more planes:
And they’re spotted!!!
Meanwhile, working the fly fishing angle:
Now combining Greenville fly fishing spots with flights over the area:
Excitement builds…
Frogs mentioned:
Rundown through space and time:
(not quite… but close)
Looking for a place with fly fishing, and Flag Pond pops up:
Nolichucky River is also suspect:
Another flight check:
TARGET ACQUIRED – a residence 10 Miles NW of Flag Pond and 1000 ft. from Nolichucky River:
Under the cover of darkness… MISSION ACCOMPLISHED
A MAGA HAT!
Aaaaand the stream is down
This is how elections are won. Until the next battle…
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