Tag: news

Submitted by Salil Mehta of Statistical Ideas

High-Risk Regime’s 6-Month Anniversary

We are more than 1/2 a year since the August stock market crash, sometimes known as China’s Black Monday.  And in our “flipping volatility regimes” article last month, we argued that the risk regime was statistically higher and endured that way, after the August tumult then snapback.  During this past 6 months, the volatility index has averaged ~20%.  Nearly four percentage points greater than its average during the 6 months before that!  Today the market’s volatility has dropped to a close below 15%, something seen only 10 times in the past 125 trading days (6 months). 

As shown in grey on the chart below, these 10 trading days were mostly at the end of October, but a couple were in early December.  So about 4-5 month ago, and we show the astonishing and marvelous performance in a prior article we stated that one would get if they had endured one of the volatility ETF/ETN products for this entire period, since the volatility was last at this sub-15% level.

We notice that despite volatility happening to be exactly where it was during these 10 low days from October 19, through December 4, the XIV (inverse risk and shown in blue) ETN has fallen 24% on average (and with a 4% standard deviation about that estimate depending on when in that period it was bought) if it were bought at any point during that 34-day period.  This isn’t simply a matter of the product aggressively decaying, but rather real heightened changes in risk that we’ve noticed in stocks and bonds (but still bushwhacked Wall Street strategists). 

If the VXX ETN (shown in red) was instead purchased at any point over this period, it would have instead averaged a rise of 5% (with a 5% standard deviation).  From October 19, through December 14, the VIX averaged 16% (or 1 percentage point more than today).  And despite this drop in VIX if one blindly bought VXX and shorted XIV (shown in yellow), at any point during this 34-day period , then today they would have enjoyed a typical profit of 40% (with a standard deviation of 13%).  One would have a similar superb profit, as well, even if they rewound to the start of this high-risk regime precisely 6 months ago!

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Despite its 98% crash from 2008 highs, and its plunge to record (35 year-plus) lows, the recent rally (off sub-300 lows) sparked a wave of exuberance with such luminaries as Jim Cramer proclaiming this a sign that everything is fixed again in China. Having risen non-stop since Feb 10th, coincidentally the same time that the entire world suddenly and unexplainedly went full risk-on short-squeeze buy-buy-buy, The Baltic Dry Index dropped today – which should not surprise many as China's Containerized Freight Index crashes to record lows…

 

The Baltic Dry drops for the first time since Feb 10th…

 

It appears BDIY gets over-excited relative to CCFI's lead…

 

And tthis won't help…

With Iron Ore prices down 6 days in a row, the entire hope-strewn short-squeeze has been erased.

via Zero Hedge http://ift.tt/1S6Hlgd Tyler Durden

On Monday, in “JPM Looks At Draghi’s ‘Package,’ Finds It ‘Solid’ But Underwhelming,” we noted that according to Mislav Matejka, investors would do well to fade the ECB’s latest attempt to jumpstart inflation, growth, and of course asset prices with Draghi’s version of a Keynesian kitchen sink.

“Overall, we believe the latest package is far from a game changer,” Matejka opined.

What was especially interesting about that particular note was the following graph and set of tables which show just how “effective” NIRP has been for the five central banks that have tried it so far.

As you can see, once you go NIRP, it’s pretty much all downhill from there whether you’re talking inflation, the economy, or even equities.

Given that, and given that the entire idea is absurd on its face for a whole laundry list of reasons, one wonders why any central banker would chase down this rabbit hole only to find themselves the protagonist in the latest retelling of “Krugman in Wonderland”.

In any event, for those wondering whether the Fed will join the ECB, the BoJ, the Riksbank, the SNB, and the NationalBank in this increasingly insane monetary experiment, below, courtesy of Bloomberg, find a chronological history of Fed and analyst commentary on NIRP in America.

FED COMMENTARY

• March 16: Yellen said during post-FOMC press conference Fed isn’t actively considering negative rates, studying effects in other nations
• March 2: San Francisco President Williams said “we’re not doing negative interest rates”; Williams Feb. 25 said negative rates are “potentially in the toolbox” but may have “unintended consequences”
• March 1: Former Fed Chairman Alan Greenspan said on Bloomberg Radio and TV negative interest rates, if pursued for an extended period of time, will eventually distort saving and investment
• Feb. 26: Fed Governor Brainard said negative rates not relevant to current U.S. policy
• Feb. 24: Dallas Fed President Kaplan said he sees negative repercussions to negative rates in U.S.; said central bankers never want to rule out any policy tool
• Feb. 24: Fed Vice Chairman Fischer said after speech Fed has no plans at present to use negative rates
• Feb. 23: Kansas City Fed President George said in Bloomberg Radio interview she doesn’t think negative rates is a question for the U.S.
• Feb. 19: Cleveland Fed President Mester said after speech she wants to stay away from negative interest rates; said central banks have other tools besides negative rates
• Feb. 18: Former Treasury Secretary Larry Summers said during Bloomberg TV interview loose policy and negative rates are stimulative
• Feb. 17: St. Louis Fed President Bullard said during Q&A U.S. isn’t remotely close to need for negative rates
• Feb. 16: Philadelphia Fed President Harker said during Q&A Fed needs to study legality of negative rates
• Feb. 12: Dudley said during press briefing they’re not spending much time on negative rate discussion
• Feb. 10-11: Chair Yellen said during testimony Fed should look at negative rates for prudent planning
  • Said not aware of legal ban on negative rates
• Feb. 9: Former St. Louis Fed President William Poole said in WSJ op-ed negative central bank rates won’t create growth any more than Fed’s near-zero rates
• Feb. 9: Former Minneapolis Fed President Kocherlakota said on his website “going negative is daring, but appropriate monetary policy”
• Feb. 1: Fed Vice Chair Stanley Fischer said negative rates are working “more than I expected”
• Jan. 29: Former Fed Chairman Ben Bernanke said in interview with MarketWatch the central bank “will and probably should consider if the situation arises”; also said there’s limits to how negative rates could go
• Jan. 15: NY Fed President Dudley said would consider negative rates if economy weakened
• Jan. 12: Fischer said negative rates would be difficult to do quickly in U.S., citing risk money funds break the buck or shut down
• Nov. 4: Yellen said during Q&A before House Committee on Financial Services no need now for negative rates, yet won’t rule it out
• Oct. 8, 2015: Former Minneapolis Fed President Kocherlakota said Fed should consider ways to make monetary policy more accommodative, including negative interest rates
• Sept. 16-17, 2015: FOMC’s policy assessment included one forecast of negative fed funds rate in 2015 and 2016 (Dec. 16, 2015 policy assessment included only positive forecasts)
• Dec. 14, 2010: FOMC transcript (p. 97) shows Kocherlakota said eventual expansion of UST holdings to $2t would push fed funds down 250bps and combined with 25bp IOER, getting a “policy stance right now of negative 225 basis points”
• Aug. 10, 2010: FOMC transcript (p. 106) shows Chicago Fed President Evans discussed conducting a “thought experiment” that allowed negative interest rates
  • NOTE: Fed announced QE2 at Nov. 2-3 meeting
• Aug. 5, 2010: Fed discussed negative IOER cuts in memo, said there were “several potentially substantial legal and practical constraints” to implementing a negative IOER rate regime; also said it wasn’t clear that Federal Reserve Act permitted negative IOER

STRATEGIST COMMENTARY

• March 16: Negative Rates an ‘Alice in Wonderland’ Policy, Zandi Says
• March 11: NIRP May Increase Risk of ‘Breaking the Buck’ in U.S. Funds: SG
• Feb. 16: Markets Perceive Negative Rates as ‘Shockingly Flawed,’ WFS Says
• Feb. 8: U.S. Neg Rates Would Have Money Funds Emulating Europe, JPM Says
• Feb. 8: U.S. Needs ‘Recession-Like’ Conditions Before Negative Rates: JPM
• Feb. 4: Fed May Consider Negative Rates After Exhausting Options: BofAML
• Feb. 3: Negative Rates Path a ‘Prisoners’ Dilemma’ for Fed, Scotia Says
• Jan. 28: Negative Rates May Displace QE as First Policy of Choice: Oxford Economics
• Oct. 19, 2015: U.S. Money Mkts Would Complicate a Fed Negative Rates Plan: Citi
• Feb. 13, 2015: Money Funds More Important Issue for Fed, Not Negative Rates: GS
• Dec. 13, 2013: IOER Cut, Reverse Repo, Tapering Too Much ‘Fine Tuning’: Barclays
• Dec. 11, 2013: Blinder Negative IOER May ‘Wreak Havoc,’ Barclays Says
• Nov. 20, 2013: Fed May Not Cut IOER Without Full Operation of RRP, RBS Says
• Sept. 4, 2012: IOER Cut ‘Non-Starter’ For Policy Makers: BofAML
• July 23, 2012: Risk of Fed IOER Cut ‘Will Always Remain’: CS * July 10, 2012: Fed IOER Cut May Destroy U.S. Money Market Industry: DB
• Sept. 14, 2011: 50% Chance Fed May Cut IOER Rate at Sept. FOMC Meeting: GS

Bonus: Complete NIRP table from Goldman

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On the heels of Trannies and The Dow, The S&P 500 just crossed into green for the first time in 2016. This technical melt-up occurs as the "average" stock reaches a key intersection of recent trendlines…

S&P 2016 Green for St.Paddy's Day… 2043.94 taken out

 

Note the VIX tails as the market lurched higher… VIX slammed to a 13 handle…

 

But as Dana Lyons' notes, the "average" stock is hitting key resistance…

Many of the major averages are facing areas of key resistance in their post-February rallies – including the Value Line Arithmetic Index.

 

About a week ago, the theme of much of our market dialogue and posts began to focus on the approaching ubiquitous chart resistance facing most of the major stock averages. In other words, after quickly bouncing some 10% or so (or 30%) off of the February lows, the global stock rally was likely about to get more difficult. This scenario has played out, not surprisingly given the significant levels of resistance near present levels on most charts. That includes, among many others, the Global Dow which we mentioned yesterday, and the Value Line Arithmetic Index (VLA).

 

Once again, the VLA is a useful barometer of the health of the overall market as it is an unweighted average of about 1700 stocks. We do slightly prefer its sister “Geometric” index, which measures the median performance of the universe, versus the Arithmetic index which measures the average performance. But they are both useful in their own right.

 

Case in point, on December 18, we pointed out that, ominously, the VLA was breaking below its post-2009 Up trendline. This suggested a loss of some key support and a vulnerability to more downside, and in short order. Indeed, after briefly attempting to stabilize back above the trendline, the VLA succumbed to the weakness we feared, dropping an additional roughly 12% over the next month.

 

Since then (and a February re-test), however, the VLA has rallied back impressively, as have many indices. In fact, the VLA has recovered all of the losses incurred following its post-2009 trendline break. Reclaiming that trendline now becomes the challenge.

 

 

 

 

Converging in the same area as that post-2009 Up trendline now is the Down trendline connecting the peaks from last summer’s top. That makes the nearby level a double challenge for the VLA (although, we have seen many times where a trendline convergence acts almost like a portal and price jumps through it).

 

The larger, recent theme remains, though. That is, multiple potential resistance levels are converging near present prices on the charts of most major indices. Thus, the sledding should get tougher from here for the stock market rally as it works out whether it’s going to make another run at new highs – or whether it’s just an average bear market rally.

But, there is only thing that matters…

It's Not Earnings, Stupid – It's The Central Banks

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As if the historic collapse of Valeant and his hedge fund crashing by 26% YTD was not enough, moments ago S&P added insult to injury when it warned it may downgrade Pershing Square, because “Pershing Square Holdings’ net asset value has dropped substantially, largely because of a precipitous decline in the market value of Valeant  Pharmaceuticals”  and “as a result, Pershing Square’s debt-to-total assets ratio increased to  above 20% as of March 15, 2016, from 15% at the end of October 2015. We are placing our ‘BBB’ issuer credit and senior unsecured debt ratings  on the company on CreditWatch with negative implications.”

It concludes that “the CreditWatch negative reflects the fund’s weak investment performance,  which has resulted in higher leverage.”

Full note below:

Standard & Poor’s Ratings Services  today said it placed its ‘BBB’ issuer credit and senior unsecured issue  ratings on Pershing Square Holdings Ltd. (PSH) on CreditWatch with negative implications.

“We placed the ratings on CreditWatch negative to reflect the substantial drop in PSH’s NAV over the past five months as a result of very weak investment performance,” said Standard & Poor’s credit analyst Trevor Martin. NAV was $5.3 billion at the end of October 2015 and $3.8 billion on March 15, 2016, primarily because of the steep drop in Valeant Pharmaceuticals’ stock price. The Valeant stock price fell about 50% on March 15. As a result of the weakness in the portfolio since October, PSH’s debt to total assets has increased from about 15% to above 20%.

While debt as a percentage of total assets has increased materially beyond our original expectations, liquidity (as measured by free cash) has strengthened, and we believe management has taken proactive steps to respond to the turmoil. PSH’s investors were informed that the fund completed a block sale of Mondelez International shares on March 16, raising substantial free cash. Subsequent to the sale, the level of cash held in the fund exceeded total debt.

Valeant’s stock price fell dramatically as the company again revised its earnings guidance for the next 12 months on March 15. Furthermore, the company has not reported its 10-K in time and is now seeking a waiver from banks on its credit agreements, introducing incremental risk of a bankruptcy to Valeant (although it has until the end of April to resolve the covenants in the credit agreement to avoid acceleration). In the event of bankruptcy, we would likely lower the rating.

“We aim to resolve the CreditWatch once we have more clarity on the situation regarding Valeant and we have reassessed the fund’s investment performance and leverage,” said Mr. Martin. “We expect to have the information to resolve the CreditWatch in the next 90 days, but we could extend the CreditWatch period if that is not the case.”

We could lower the rating if Valeant files for bankruptcy or if PSH materially reduces free cash before Valeant’s stock price has substantially recovered. Even if the position were to stabilize, we could still downgrade PSH if the investment performance of the portfolio as a whole deteriorates further.

via Zero Hedge http://ift.tt/1UDrjwC Tyler Durden

When last we checked in on our favorite socialist paradise, Venezuela, President Nicolas Maduro’s opponents “had gone crazy.”

Or at least that’s how Maduro described the situation in a “thundering” speech to supporters at what he called an “anti-imperialist” rally in Caracas last Sunday.

Meanwhile, thousands of demonstrators held counter-rallies calling for the President’s ouster. Maduro angered the opposition – which dealt Hugo Chavez’s leftist movement its worst defeat at the ballot box in history in December – last month when he used a stacked Supreme Court to give himself emergency powers he says will help him deal with the country’s worsening economic crisis.

“Now that the economic emergency decree has validity, in the next few days I will activate a series of measures I had been working on,” he said, following Congress’s declaration of a “food emergency.”

Needless to say, Maduro’s “measures” didn’t do much to help the situation on the ground, where Venezuelans must queue in front of grocery stores and where 90% of medicine is scarce.

Venezuela is the world’s worst performing economy and barring a sudden (not to mention large) spike in crude prices, the country will in all likelihood default this year as 90% of oil revenue at current prices must go towards debt service payments.

But that hasn’t deterred Maduro, who has vowed to remain defiant in the face of (loud) calls for his exit. “Let them come for me,” he bellowed on Sunday. “I will hang on to power until the final day.”

Maybe so, but one place that’s not “hanging onto power” is the Guri Dam, which supplies more than two-thirds of the country’s electricity. As The Latin American Herald Tribune writes, the dam “is less than four meters from reaching the level where power generation will be impossible.”

“Water levels at the hydroelectric dam are 3.56 meters from the start of a ‘collapse’ of the national electric system,’” The Tribune continues, adding that “Guri water levels are at their lowest levels since 2003, when the a nationwide strike against Hugo Chavez reduced the need for power, masking the problem.”

(arrow shows where the water shoud be if the dam were operating at capacity)

“It is not Guri that is in disarray, it is the whole system. Rates frozen, companies nationalized, capacity that was supposed to be installed was never installed and maintenance not carried out”, Miguel Lara, an engineer who worked in the industry for three decades said.

Not so says Maduro. The problem isn’t mismanagement, it’s El Nino. 

“The emergency decision we took is due to El Nino,” he said. “We will save more than 40% from these measures.” 

The “emergency measures” the Tribune references amount to a shutdown of the country. “Venezuela is shutting down for a week as the government struggles with a deepening electricity crisis,” Bloomberg writes. “President Nicolas Maduro gave everyone an extra three days off work next week, extending the two-day Easter holiday, according to a statement in the Official Gazette published late Tuesday.”

“We’re hoping, God willing, rains will come,” Maduro told the country on Saturday.

Yesterday, Venezuela’s energy minister took back his warning that water levels at Guri were set to plunge the country into an electricity crisis, but did ask the public to do as Maduro asks. “It’s a matter of cooperating,” he said.

Right. But as The Tribune points out, “Venezuela is now seeing three street protests a day, according to NGO Observatorio de Conflictividad Social [and] on any given day, one of those protests has to do with blackouts — even though rates have been frozen since 1982.” 

It would certainly appear that Venezuelans are sick of “cooperating.” 

And that’s bad news for Latin America’s “best” leader…

via Zero Hedge http://ift.tt/1pOo5eq Tyler Durden

Yesterday morning, after reading the latest Gartman letter, we reported that in what may have been the worst possible news for vol longs, Gartman said he had become a “buyer of the VIX.” As a reminder this is what he said:

NEW RECOMMENDATION: we are taking a “punt” on the short side of the equity market, but this time we shall do so by buying volatility; that is, we shall buy the VXX volatility index ETF listed on the NYSE and we shall do so upon receipt of this commentary and the market’s opening. We’ll have a stop in tomorrow’s TGL, but for now we do not wish to risk more than 5% on this trade… a rather large stop to be certain for our purposes in the past but we’ll tighten that up measurably over the course of the next day or two. This is unusual action on our part ahead of an FOMC meeting given the historical tendency of equities to rise after these meetings; but call it trader’s intuition or call it what you will we think a “one unit” punt is warranted and reasonable.

To which we responded:

We must admit that we pray that for once Gartman’s “trader intuition” is correct because we tend to agree: we have gotten to a point where complacency is fully back courtesy of the central bankers, where the market is substantially overvalued as even Goldman admits, where the earnings picture continues to deteriorate (Q1 EPS is expected to plunge by over 8%) and where none of the world’s problems have been “fixed” in the past few months yet where central banks have once again merely “kicked the can” with even more stimulus and more negative rates, while China’s debt bubble and proposed “debt for equity” swaps are now beyond rational comprehension.

That said, we were resigned: “Then again, it is Gartman…”

That proved to be indeed sufficient, because not only was the equity “tendency to rise” after the FOMC confirmed as the S&P bounced yesterday and again today, but since Gartman’s recommendation, the VIX has undergone a quick 15% freefall lower, and recently was trading below 14.

 

That said, we were eagerly looking for today’s Gartman Letter to find out what the “stops” on his VIX long position are, just so we can know when it is safe to, well, go long VIX again and short the market. Here is the answer:

Short One Unit of the US stock market via the VIX: Yesterday… Wednesday, March 17th… we “punted” on the short side of the equity market, but this time doing so by buying volatility; that is, we bought the VXX volatility index ETF listed on the NYSE upon the market’s opening. We’re giving this a rather wide birth and are willing to allow the equity market to move 5% against us before exiting the trade and that means a move by the S&P to and through 2118, but we intend to move that stop down sharply in the next day or two.

In other words, Gartman has basically doomed the market to soar back to its all time highs. Sorry bears.

via Zero Hedge http://ift.tt/1RRaGZC Tyler Durden

 

As someone that has herded a fair bit of livestock, I can honestly say:  Be very wary of the, “choices,” that you are, “given.”
-hedgeless_horseman

Down here in East Texas, there is an old rivalry between the Dallas Cowboys and New Orleans Saints.  I have been in the home of Saints fans that have furnishings with the Saints NFL logo and gold and black carpeting.  The lady of the house screams and yells at the television on game day.  They actually pray for God to intervene in the game on their team’s behalf.  They absolutely hate the Dallas Cowboys.

I know more than a few Cowboys fans that never even played football, yet have painted their vehicle blue and silver, decorated it with the Dallas Cowboy’s NFL logo, Cowboys license plate bracket, and vanity plates.  Riding in their vehicles, I have witnessed them as they listen to sports talk radio, screaming profanities, absolutely elated when their team wins, and emotionally depressed when they lose.

I have had the opportunity on more than dozen occasions to spend significant time with both Jerry Jones, the owner of the Cowboys, and Tom Benson, the owner of the Saints.  Both men obviously have a high degree of business acumen and each have had incredible success.  I find both men hard working, intelligent, and likable. On two occasions, I have personally witnessed these two men together, and they seem to be on very good terms, if not even very good friends. 

As NFL League owners, they understand that with each game there must be a winner and a loser on the field.  In fact, they openly promote the concept of parity, the state where all teams are equal in terms of talent.  The best teams get the lower draft picks for new talent, etc.  The NFL League owners also understand that regardless of who wins the game on the field, what really matters is that they are all financial winners every year, and that they protect The League monopoly at all costs.

The owners don’t really care if we cheer for the black and gold team, or the blue and silver team, as long as you do cheer, do watch the games on TV, and do purchase their League’s tickets and paraphernalia. 

I have also had the opportunity to personally spend more than a week with Donald Trump at his home and have twice had brief conversations with Bill and Hillary Clinton in person.  I have spent even more time talking with past leadership of both the DNC and RNC.  It would seem obvious, but these are all very intelligent, hard working, and charismatic people. Yes. Even Hillary. 

At this point, it is important to remind readers that we have not had television in our home for more than a decade.  This means that I have never seen Trump’s Apprentice program.  Neither have I watched any of the debates, or television “news” programs.

What may not be obvious to readers that do watch television, as both the DNC and RNC attack Trump, and Trump attacks Hillary, is that they all seem to me, in person, to be on very good terms, if not even very good friends. 

Now, I shall plagiarize from wikipedia.  Please read carefully the following:

In politics and sociology, divide and rule (or divide and conquer) is gaining and maintaining power by breaking up larger concentrations of power into pieces that individually have less power than the one implementing the strategy. The concept refers to a strategy that breaks up existing power structures and prevents smaller power groups from linking up.

Traiano Boccalini cites “divide et impera” in La bilancia politica, 1,136 and 2,225 as a common principle in politics. The use of this technique is meant to empower the sovereign to control subjects, populations, or factions of different interests, who collectively might be able to oppose his rule. Machiavelli identifies a similar application to military strategy, advising in Book VI of The Art of War[1] (Dell’arte della guerra),[2] that a Captain should endeavor with every art to divide the forces of the enemy, either by making him suspicious of his men in whom he trusted, or by giving him cause that he has to separate his forces, and, because of this, become weaker.

The maxim divide et impera has been attributed to Philip II of Macedon, and together with the maxim divide ut regnes was utilised by the Roman ruler Caesar and the French emperor Napoleon.

The strategy, but not the phrase, applies in many ancient cases: the example of Gabinius exists, parting the Jewish nation into five conventions, reported by Flavius Josephus in Book I, 169-170 of The Wars of the Jews (De bello Judaico).[3] Strabo also reports in Geography, 8.7.3[4] that the Achaean League was gradually dissolved under the Roman possession of the whole of Macedonia, owing to them not dealing with the several states in the same way, but wishing to preserve some and to destroy others.

The strategy of division and rule has been attributed to sovereigns ranging from Louis XI to the Habsburgs. Edward Coke denounces it in Chapter I of the Fourth Part of the Institutes, reporting that when it was demanded by the Lords and Commons what might be a principal motive for them to have good success in Parliament, it was answered: “Eritis insuperabiles, si fueritis inseparabiles. Explosum est illud diverbium: Divide, & impera, cum radix & vertex imperii in obedientium consensus rata sunt.” [You would be insuperable if you were inseparable. This proverb, Divide and rule, has been rejected, since the root and the summit of authority are confirmed by the consent of the subjects.] On the other hand, in a minor variation, Sir Francis Bacon wrote the phrase “separa et impera” in a letter to James I of 15 February 1615. James Madison made this recommendation in a letter to Thomas Jefferson of 24 October 1787,[5] which summarized the thesis of The Federalist #10:[6] “Divide et impera, the reprobated axiom of tyranny, is under certain (some) qualifications, the only policy, by which a republic can be administered on just principles.” In Perpetual Peace: A Philosophical Sketch by Immanuel Kant (1795), Appendix one, Divide et impera is the third of three political maxims, the others being Fac et excusa (Act now, and make excuses later) and Si fecisti, nega (when you commit a crime, deny it).[7]

Elements of this technique involve:

• creating or encouraging divisions among the subjects to prevent alliances that could challenge the sovereign
• aiding and promoting those who are willing to cooperate with the sovereign
• fostering distrust and enmity between local rulers
• encouraging meaningless expenditures that reduce the capability for political and military spending

Historically, this strategy was used in many different ways by empires seeking to expand their territories.

The concept is also mentioned as a strategy for market action in economics to get the most out of the players in a competitive market.

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Finally, I will once again post my favorite quote of Boss Tweed, the politician who, “bribed the state legislature, fixed elections, skimmed money from city contractors, and diverted public funds on a massive scale. During his reign at Tammany Hall and then in a variety of elected posts, including as U.S. senator, Tweed wielded almost total control over New York State and City politics.”

 

“I don’t care who does the electing, so long as I get to do the nominating.”

 

 

– Boss Tweed

 

Sometimes we do not have any good choices, only responses.

Peace!

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