What’s next? A unicorn captured in Tennessee? The world I grew up in has changed. American Universities are handing out Play-Doh to comfort distraught liberals and “Never Trump” students. Protestors defaced a Thomas Jefferson statueat the University of Virginia due to his slave ownership. Race baiters attacked Hobby Lobby for displaying raw cotton in vases. The P.C. Police have continually demonstrated their desire to attack the America many of us love.
Now, the snowflake class is writing articles stating Ron Paul – the former Texas congressman that made a career out of criticizing bloated defense budgets and hawkish foreign policy decisions – is shilling for the defense industry. Their “evidence” is that he received five-year-old campaign contributions from some employees of Boeing and Lockheed Martin, which they falsely credited with coming directly from the companies themselves.
Dr. Paul’s alleged wrongdoing was writing an op-ed mildly critical of Elon Musk, a government subsidy-eating machine and poster boy for left-wing environmental causes.
In the article, Paul, an Air Force veteran, expressed his opposition to Section 1615 of the National Defense Authorization Agreement (NDAA), which many speculate was written with the congressional intent of quietly extinguishing all serious competition to Musk’s SpaceX.
Section 1615 would bar the Air Force from funding any new launch vehicles. Coincidentally, in just a few short years, there will only be one established launch vehicle left in the marketplace -- Musk’s SpaceX.
If the NDAA is passed as is, it will stay that way for a long while.
Talk about a get-rich quick scheme.
This provision has the potential of putting a lot of taxpayer money in Elon Musk’s already fat pockets. As Dr. Paul already noted, “government contracts account for about 70 percent of SpaceX’s contracts. U.S. taxpayers have provided SpaceX more than $5.5 billion in the form of Air Force and NASA contracts.” Should Section 1615 be passed by the Senate today, that percentage will likely increase exponentially.
The P.C. Police are easy prey for the cult of personality that is Elon Musk. They reject even the possibility of Musk, one of their heroes having ulterior motives – whether it’s support of the carbon tax, support for the Paris Accords which he indirectly profits from, or now – you guessed it – possibly pushing 1615 through to passage.
Since 2003, Musk has given over $500,000 to Washington politicians, almost evenly split between Republicans and Democrats. SpaceX has even handed money to lobbying firms to work on pushing through past NDAAs, which contained language that would have seemingly benefitted his company – including expediting the already-planned-on government Russian engine ban, which SpaceX’s only serious competitor relies on.
All this Washington meddling is really sad when considering that the whole beauty of SpaceX’s founding was how it cut into what was once the unchecked market share of an industry giant and proceeded to cut costs by sizeable margins. Now, the founder of that same company may be working to bring the industry back to its glum past -- muscling out not just established veterans. Musk has shown himself to be a merciless competitor, claiming scalps throughout the industry and even not ruling out martians’ interference for his failures.
Musk’s blogging army points to how Section 1615 still allows for the funding of new rocket engines as push back that it will create a de facto SpaceX monopoly, claiming that it will keep his Russian engine-dependent revival afloat. And it might – on paper. But, as Pentagon officials have said time and time again, replacing the engine will lead to significant cost increases, making Musk’s company the only affordable option left for use in the United States.
Even if 1615 didn’t jeopardize the security of established market participants, would that make it an admirable provision? Is that what the followers of Musk, the so-called free market visionary, have resorted to -- keeping the status quo intact, but shutting the door on anyone else that may come next?
The Musk followers see no wrong in their leader. He is the man that has promised to take them to the stars. He can do no wrong.
The Trump administration agrees with Dr. Paul, saying1615 would “restrict development of new space launch systems, including those whose development is significantly funded by industry … [limiting] domestic competition, which will increase taxpayer costs by several billions of dollars through FY 2027 and stifle innovation.”
Dr. Paul is the antithesis of a crony. It’s as absurd as believing a craft store is racist for publicly displaying cotton arrangements. It’s time for the Musk sycophants, and the rest of the P.C. police, to take a step off Fantasy Island. If anyone is a risk to America’s national security, it’s Elon Musk, not Dr. Paul.
(GLOBALINTELHUB.COM) — 9/14/2017 — Trading is difficult, if it were easy there would be no losers – in order for there to be winners in markets, there have to be losers. But trading is not impossible, and Wall St. has developed an industry out of it called “money management” which is effectively conservative trading.
But sometimes there are companies who simply mislead investors in to thinking that trading is easy, and these guys ‘putting golf clubs in their Porsche trunks’ simply discovered the ‘secret’ of life that it’s possible to click click click and get millions. As hundreds of customers discovered, trading is not that easy.
NFA orders Chicago, Ill., introducing broker Kingsview Futures LLC to pay a $50,000 fine
September 14, Chicago—NFA has ordered Chicago, Ill., introducing broker Kingsview Futures LLC to pay a $50,000 fine.
The Decision, issued by an NFA Hearing Panel, is based on a Complaint authorized by NFA’s Business Conduct Committee (BCC) and a settlement offer submitted by Kingsview Futures.
The Hearing Panel found that Kingsview Futures failed to diligently supervise its operations and activities.
Reading NFA complaints is always interesting. Here’s the highlights:
217 Kingsview Futures customers with self-directed accounts traded in 2015. 203 of these customers (or 9 %) incurred total losses that exceeded $1.9 million. More than 70% of the customers experienced losses exceeding $1,000, and approximately 10% of them experienced losses exceeding $20,000. One customer’s losses exceeded $225,000. In contrast, thirteen customers reported gains in 2015, and only three of them had net profits exceeding $1,000. During the same period, Kingsview Futures made commissions totaling more than $208,000 from these customers.
235 Kingsview Futures customers with self-directed accounts traded in 2014. 226 of these customers (or 96%) incurred total losses of more than $1.5 million.
In any event, it’s always sad to see customers pay for something like ‘training and education’ lured by videos with private planes and fancy cars, and then to lose money. Trading futures is really difficult. Training and education isn’t always sufficient to make you a trader. In fact, traders who go through ‘real’ training often don’t succeed.
As we’ve said often, FX provides a lot of opportunity for algorithmic systems – trading FX yourself, futures included – is nearly impossible.
(GLOBALINTELHUB.COM) — 9/9/2017 As Hurricane Irma approaches US borders, investors should note the forces of the ‘invisible hand’ in nature and not only in markets. As we explain in our groundbreaking work Splitting Pennies, the financial markets are not ‘as seen on TV’ and in fact, are the subject of constant manipulation, and this storm is no exception.
Weather Modification technology is simple and has been around for a long time, starting with the use of dry ice, evolving to use of ‘supersonic booms’ and finally aerosols. The Pentagon has technologies that are far, far, far more advanced than weather modification. See an extensive list of weather modification patents here.
Hurricane Harvey brought an abrupt and catastrophic end to the 12 year long major hurricane landfall drought in the US. Were climate engineering programs a factor in the Harvey disaster scenario? Available data has already made clear the answer is yes. How much decimation will the manipulation of Hurricane Irma inflict? The US government has been actively engaged in hurricane modification programs for a minimum of 70 years, historical documents prove this fact conclusively. Yet, the power structure controlled circles of academia (and corporate media) continue to fuel total denial of the climate engineering hurricane modification reality, this should not be a surprise. How much decimation have global geoengineering / weather warfare programs already caused? What are the primary objectives and agendas? How much worse will it get? The short video below provides verifiable data to confirm that climate engineering is a reality, and exposes some of the primary objectives.
Exposing and halting the ongoing climate engineering / weather warfare / biological warfare assault is the great imperative of our time. The best chance we have of accomplishing this monumental task is by raising an army of the awakened, by reaching a critical mass.
Environmental modification techniques have been applied by the US military for more than half a century. US mathematician John von Neumann, in liaison with the US Department of Defense, started his research on weather modification in the late 1940s at the height of the Cold War and foresaw ‘forms of climatic warfare as yet unimagined’. During the Vietnam war, cloud-seeding techniques were used, starting in 1967 under Project Popeye, the objective of which was to prolong the monsoon season and block enemy supply routes along the Ho Chi Minh Trail.
The US military has developed advanced capabilities that enable it selectively to alter weather patterns. The technology, which is being perfected under the High-frequency Active Auroral Research Program (HAARP), is an appendage of the Strategic Defense Initiative – ‘Star Wars’. From a military standpoint, HAARP is a weapon of mass destruction, operating from the outer atmosphere and capable of destabilising agricultural and ecological systems around the world.
The technology clearly exists, but as it is ‘classified’ having any smoking gun evidence without a Snowden whistleblower is impossible; it’s a paradox, as evidence by CIA’s FOIA request if they are investigating us:
This really is an intelligence agency, their logic is impeccable. They cannot confirm or deny if information does or does not exist. So let’s go with what we know.
NOAA is the official US Government agency that monitors the weather, and provides official information at nhc.noaa.gov – anyone from Florida knows this URL and has gone through the agonizing wait for the next update which can mean a big change of plans.
Like most of the US Government, it’s actually not ‘NOAA’ that provides us this valuable data it’s Raytheon, black ops corporate master – the largest defense contractor in the world, with 60,000 + employees and a market cap of 50 Billion. See their product info here, and their interesting note in bold:
Owned and operated by NOAA, JPSS is an “end-to-end” system that includes sensors; spacecraft; command, control and communications; data routing; ground based processing and dissemination of weather data to users around the globe, such as NOAA’s National Weather Service and the National Hurricane Center. The data provided by Suomi NPP and the JPSS satellites contribute to NASA’s study of earth climate trends.
JPSS polar orbiters carry a complement of advanced imaging and sounding sensors, which increase NOAA and DoD capabilities to monitor the entire planet and produce weather and climate predictions at a much higher fidelity and frequency. These advanced capabilities enable NOAA to better fulfill its mission to protect lives and property by increasing the timeliness and accuracy of public warnings and forecasts of weather and climate events.
JPSS CGS DELIVERS CRUCIAL DATA FOR NATIONAL WEATHER FORECASTS
Raytheon brings more than four decades of high-availability, reliable, precision-based, command-and-control systems experience to Suomi NPP and future JPSS missions. Suomi NPP is the bridge between existing polar-orbiting satellites and the launch of JPSS-1, scheduled for 2017. Providing critical data for Earth observation, Suomi NPP data is used to generate environmental data products, such as measurements of clouds, vegetation, ocean color and land and sea surface temperatures — all significant inputs to improve weather forecasting capabilities.
VALUE TO THE PUBLIC
While Suomi NPP and JPSS will not prevent severe weather events such as hurricanes, tornadoes or blizzards from occurring, Raytheon’s advanced technologies enable meteorologists and forecasters to make more timely and accurate weather predictions that support NOAA’s “Weather Ready Nation” campaign and help save lives, protect property and decrease the devastating economic impacts caused by severe weather.
Raytheon’s proven radars and sensors work together to help experts see further, track longer and prepare smarter.
Our Air and Missile Defense Radar stacks together like building blocks to increase detection ranges and accuracy on naval destroyers. Our VIIRS sensor — famously known for its ”Blue Marble” photo of Earth — orbits the planet to provide meteorologists with unparalleled environmental data. And our Multi-Spectral Targeting System combines lasers with infrared sensors to enable pinpoint military operations.
Raytheon Company is a technology company, which specializes in defense and other government markets. The Company develops integrated products, services and solutions in various markets, including sensing; effects; command, control, communications, computers, cyber and intelligence; mission support, and cybersecurity. The Company operates through five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS), and Forcepoint. The IDS segment develops and produces sensors and mission systems. The IIS segment provides a range of technical and professional services to intelligence, defense, federal and commercial customers. The MS segment is a developer, integrator and producer of missile and combat systems. The SAS segment is engaged in the design, development and manufacture of integrated sensor and communication systems for missions. The Forcepoint segment develops cybersecurity products.
Interestingly, a small uptick on Irma. For the uninformed, a hurricane is a military operation however you look at it, in the aftermath when there’s no power, only the military (and in partnership with FEMA) has the logistic resources to swoop in and restore order. During Hurricane Andrew strange rumors persisted about the quarantine and control of information that the Army imposed around the devastated areas. This is a great resource with photographic evidence, and they suggested that even it may have contributed to George Bush losing the election later that year. The government seemed helpless to do anything to battered Miami. And it was after Andrew that Hurricane manipulation efforts went into overdrive.
So why now, after so long with no major hit to Florida? Are they gunning for Trump? Or Trump ordered it, to distract the population from what’s really going on and as a means of control? (Remember that the one strong power Trump has is leader of the Military, the US President has almost no political power). We’ll never know.. but let’s look at the big picture.
After World War 2 the US “Military Industrial Complex” or “Iron Triangle” (Government, Defense Contractors, Wall St.) hasn’t really had an enemy. Hitler and Japan were real enemies, although funded and allowed to grow by US companies, the fact remains that if Hitler wasn’t stopped we’d all be speaking German and eating poor tasting frankfurters and drinking beer. WW2 was the peak of show of industrial power and how factories could make bombs that would destroy infrastructure. The “Marshall Plan” and other post WW2 economic plans led the intellectual Elite (who were hired by the now rich military contractors) to create several doctrines that would keep them in business with or without an enemy (with all the happiness of the 50’s they probably thought – what if there is no more Hitler? How will we make money? War is good for business… ) hence we have the Report from Iron Mountain MUST READ BOOK – to explain plainly, companies like RAND corporation have created enemies most notably “Russia” and most recently “Terrorists” but their plan is so deep, they are not to rely on a single artificial enemy, so they resort to the most basic Earth element, the weather. What does this mean? A group of scientists hired by these corporations post WW2 (you can call them pseudo economists) created studies and reports showing that investing $1 in the Military equalled $2 in economic output. This is the most ridiculous and twisted thinking, based on this logic if we firebomb Los Angeles we’ll be the richest economy in the world. But remember, twisted or not – this is their doctrine. A great example of this in practice was during the Ford days when the CIA was tasked with the job of collecting intelligence on Russia – did they pose a security threat to the United States? The CIA found no evidence of any capability sufficient of posing even a limited threat, nor any motive or evidence of irrational intent to attack the US or any other country (and Russia has a history of never invading any country- only defending themselves). This report was released and Donald Rumsfeld famously retorted that “Just because the CIA didn’t find any weapons doesn’t mean that they don’t exist” – Rumsfeld went on to make a fortune consulting for defense contractors. During this period one General really believed the Russians were hiding a missile base on the dark side of the moon. The US Military is big business, and business is good. But threats change and the battlefield changes. Contractors, planners, developers, and many others will make a fortune rebuilding South Florida. And it’s a lot closer than Iraq. And heck, is it really so bad? Raytheon (RTN) employs 60,000 people and the US Government itself is the largest employer in the world. People need to put food on their families (-George W Bush).
There’s a number of reasons humans would want to control the weather:
To make it rain
For military purposes
Pollution control
Terraforming (For example what they are doing in UAE)
Cloud seeding is the opposite of cloud busting. For one thing, it’s a real thing. The process has been replicated numerous times both in the lab and in the field and is backed up by years of peer-reviewed scientific research. For another, it impregnates clouds to instigate the precipitation process rather than magically gathering them using dark energies. Cloud seeding is currently used all over the world—including throughout the United States, China (where it is used to clear smog in Beijing), India, and Russia—to enhance precipitation, both rain and snow, while inhibiting hail and fog. And it actually works.
The UAE’s Ionizers: Tearing the Sky a New One
The United Arab Emirates is a land rich in wealth but poor in precipitation. That’s why president Sheikh Khalifa bin Zayed Al Nahyan has had the nation’s top scientific minds secretly toiling for years to create a new means of weather manipulation that would work more effectively in the region’s extreme temperatures. The result: The biggest Ionic Breeze on Earth.
Ionic Breeze devices are giant ionizers mounted atop tall steel poles and were built by the Swiss company, Metro Systems International. The devices generate massive ionic fields, positively charged ions ground back to the Earth while the negatively charged ions rise into the atmosphere. As they rise, the negative ions (electrons) collect particles of dust on the way up. These flecks act as seeds for ice crystal formation, much as silver iodide does except without the need for clouds. As long as the atmospheric humidity is at least 30 percent, the system supposedly works even in clear skies.
In the summer of 2010, 100 such emitters were spread over five sites in the Al Ain region. During July and August alone, when the area typically receives zero rainfall, it reportedly rained on 52 separate occasions, often with gusting winds and sometimes hail. The Max Planck Institute for Meteorology monitored the project and backed the study’s findings. This could be huge for the Middle East, where water is often in short supply and desalinization plants are nine-figure investments (and another eight-figures a year to run). The ionizers reportedly only cost $10.5 million to build and $8.9 million a year to operate.
$10 Million to make it rain, literally. So what does a multi-billion dollar black budget get us in USA? Think about the positive economic impact of Hurricanes for a moment, such as the obvious Billions in rebuilding and reconstruction projects. But there’s also a political benefit and military benefit, the military can test their logistics and new non-lethal crowd control weapons, as well as the general population control (those evacuating south Florida are not likely to participate in right wing anti-government protests, for example). Confuse, obfuscate, and conquer has been the mantra of the world’s leading Elite for centuries “Divide and Conquer” – and there’s no better Fog of War than a Hurricane most intelligently because 90% of the population will not believe that it’s controlled. It’s pure genius.
There’s not any proof that this is manufactured or controlled, but like many things with the government – if they have spent millions developing weather modification technology including Hurricane manipulation technology (both to create Hurricanes and divert Hurricanes or weaken them) – what are they doing with it if not using it? Clearly, there have been strange phenomenon at play in the region over the past 20 years that are not explainable as ‘Global Warming’ – which would mean more frequent stronger storms, not a 20 year + lull.
Traders from FL enjoyed the free money Lowes and Nov FCOJ pop that always comes with a slight delay after the announcement that a storm is headed for central FL where the majority of Orange Juice is grown. But this is really a perception trade, as OJ is grown in many places around the world and the increase in Lowes purchases are not really relevant. Also note that unlike other disasters, there are usually few human casualties in Hurricanes. Remember even during Katrina, it was only the people who refused to evacuate that were trapped on rooftops, and even they were mostly saved. It’s not as if the Military is ‘killing’ people – although that IS what they do during WAR (including US Citizens, not only the enemy).
What is the conclusion of this information, simply that:
The weather is controlled, USG owns the tech for years, this is likely organized by Raytheon (RTN) although there’s no public information to prove this (it’s classified)
There can be political motivations for storms, for hitting or not hitting populated rich areas like Miami or Tampa. There is a clear economic and military benefit to such operations as PsyOps and as logistic tests of population control, i.e. FEMA camps and other new systems to be tested
Finally, there’s an elephant in the room – the bubble of bubbles.. South FL real estate. There’s literally groups of investors waiting for the big crash to come, but no one is buying – there isn’t panic selling yet, but there is a glut of Miami real estate. Investors are so called ‘hot money’ from foreigners who have never been to Miami but think it’s a good solid investment because real estate ‘always goes up’ – but the city of Miami is spending $500 Million to build levees and dams Dutch style around low lying areas.
After this event no matter how small the damage, it will do much bigger damage to the perception of FL real estate. Many investors will now think twice about FL as the golden ticket to USA investing success. FL residents damaged by the storm, many of them will take their checks and move to higher, more defensible ground. Suddenly, with one storm, the argument of Preppers in the Cumberland Plateau all makes sense. Real Estate in the mountains just doubled in value.
All the development in South FL is based on one axiom – no Hurricanes. The same could be said about Los Angeles and Earthquakes. But there are thousands of places in USA with reasonable property values that have no natural disasters, but they aren’t good ‘locations’ in ‘trendy’ places. Of course if you work online or from home then it doesn’t matter where you live, so it would be logical to choose such a place vs. the over inflated FL which is a disaster zone. Although New York City is also on the ocean, NYC is mostly built on bedrock and has elevations as high as 33 feet, comparing with Miami’s 6 feet, that’s a big difference. FL is a big swamp mostly that was turned upside down by developers. Unlike cities that formed by natural geo-politics and economics, Miami and most of FL is an artificial construct like Las Vegas. The point is that it was poor investment decisions leading to a mass of capital flooding the development of FL but this will stop likely or slow down to a trickle after this storm. A giant wall could be erected around the state but at what cost? All of these hidden costs and risks are now exposed as realities, and we will see how the re-insurers handle failing insurers already suffering from Harvey.
The positive effect on the markets is that these storms will likely pop the first and possibly the biggest real estate bubble which is the most frothy, south FL. That’s because unlike other markets, FL doesn’t have such a robust ‘natural’ industry, as for example seen in Chicago or San Francisco. In fact real estate is an industry in itself in FL and something like 60% of home ownership is by vacationers. Money will flow elsewhere, into other projects, and investors will think different.
The reason is simple – it’s one thing to ‘tell’ someone that the market is going to crash, or Miami is sinking into the sea, but having a devastating event happen, going through the process whatever your involvement in FL (As Jimmy Buffett says, everyone has a cousin in Miami).. this event will change your thinking about FL investing and doing business. Miami was a happy sleepy beach town before this boom, alligators and old folks and flamingoes.
Markets are manipulated, storms are too. So what? We live in a fake world with fake people who stare into a Fake book. If you’ve read through this article you should congratulate yourself and take pride in knowing you are part of the real one percent, the one percent that understands how the world really works; the real global elite – the emergent intelligentcia.
(Elite E Services) — 9/1/2017 — As we have explained in our book Splitting Pennies – trading FX is nearly impossible; or at least, it may be possible for some time, but in the long run, it’s a near certainty that without the use of professional algorithmic trading systems you will blow up your account. That’s because of the dynamics of how FX works vs. other markets. In traditional markets, there is a bias towards positive movement; all CEOs of public companies want their stock to go higher. Bull traders, 401k investors, pension funds – basically everyone wants the stock market to go up. The short sellers aren’t ‘pessimists’ so much as ‘realists’ that over-inflated P/E ratios are a sign for a crash from unrealistic levels. This is NOT the case in FX. Currency markets have opposing forces like ‘gravity’ and ‘anti-gravity’ – every country wants both a strong currency and a weak currency. This may seem illogical, welcome to the world of Currency! The reason is simple – exporters want a cheap currency and importers want a strong currency. Politicians usually favor a weak currency because it’s good domestically and big business favors a strong currency (at least in the USA) because USA is a net importer. Let’s have a look at today’s USD action most noticed in EUR/USD:
On the surface this looks like a great trading opportunity – but is it? EUR went up on poor US Payroll data; and then fell on dovish jawboning from the ECB. Planned conspiracy to manipulate FX or just random brownian movement? Believe what fits into your mind that helps you sleep at night, either way – would you have been able to buy EUR at 1.1924, sell near the high at 1.1980 and then reverse, covering near 1.19 handle? All within 10 minutes? Maybe someone did it, even if by accident, but the point is that any trading plan or investment strategy shouldn’t rely on the ability of such skills because even if as a trader you were able to achieve this great feat – would it be able to repeat it, day in and day out – for years? Probably not.
The Triffin dilemma or Triffin paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was first identified in a 1929 book, Gold and Central Banks, by Polish economist Feliks Młynarski,[1] who identified a fundamental instability in a gold-based international monetary system, that the reserve currency countries would tend to accumulate foreign reserves, but as the volume of these grew relative to the country’s gold reserves, international investors would begin to fear suspension of convertibility; later in the 1960s, it was rediscovered in the context of the Bretton Woods system by Belgian–American economist Robert Triffin, who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit. Due to Młynarski’s precedence in articulating the problem, Barry Eichengreen has suggested renaming the problem to “the Młynarski dilemma“.[1]
This is not only true for a reserve currency – any currency has a conflict between short term and long term interests. For example, if a currency is weaker it can help exporters in the short term to boost sales, but hurt the same exporters in the medium term when they need to go out into the world and buy raw materials for higher prices. This push and pull is what defines modern Forex on a systemic level. While average investors certainly don’t need to know this unless you’re planning on getting a job with a central bank, it can help any investor understand how and why Currency markets fluctuate the way they do. It should also be noted that these forces maintain ‘bounds’ naturally, establishing a sort of ‘high’ and ‘low’ limit for any FX pair. For example the EUR/USD now trading around 1.19, it can go in next days to 1.20 or 1.21 but not 1.90, for example. Even in rare cases such as the “Brexit” the GBP/USD went down by less than 10% – which is a lot, for a major Currency. So let it be known to all that these risks in FX are investable (with the help of algorithms) and hedgeable. Looking from a risk management perspective, it is a lot more manageable than securities, commodities, or bonds – which have the finality of the ‘ulimate’ risk (default) – as Currency is ‘money’ the Euro can’t ‘default’.
A final note to all you Bitcoiners – Bitcoin is a Currency it’s only a matter of time before it’s integrated into the Forex system, because BTC/USD is an FX pair. Good time to brush up on your FX and understand the broader market (not just the microcosm of Cryptocurrencies).
Are you confused or curious about the markets, money, or finance? Splitting Pennies is a great start, because it's not a technical 'how to trade' or 'how to invest' book. Yes, it gets a little technical - but it's done so in a way that is fun and entertaining. See what these happy readers have to say, from Amazon:
I recommend this book to anyone interested in how the world of money really works
This should be the first book anybody reads before beginning forex trading. Joe is not selling a "get rich quick" trading strategy or some such nonsense, but provides a thorough, non-biased explanation of how both forex and the financial system in general operate. Anybody thinking about beginning forex trading should read this book first before ever opening a MT4 terminal, a few bucks spent up front will save you a lot of money in the long run.
We all know that the majority of people don’t know FX (Foreign Exchange) so this topic should come as no surprise. However, it’s important for traders and investors to understand how the US banks are ripping off their clients, and the only reason they do it is because clients allow them, because they don’t understand how they’re being scammed. What we are talking about is the retail deliverable foreign exchange market. Deliverable currencies is FX that is ‘deliverable’ to a foreign recipient, for example if you want to pay up front for a hotel in France you’ve booked in advance for your summer vacation. It’s not only retail but for the example here it is – someone walking into a branch and asking to make a foreign payment. We’ll use Bank of America as the example, let’s look at their FX rates from their website, available here: https://www.bankofamerica.com/foreign-exchange/exchange-rates.go
So here’s the first line of defense to this scam, which it can be fairly called (we will explain). Only one side of the spread is displayed – this will depend when you are ‘buying’ or ‘selling’ but they will NEVER be displayed on the same time or on the same screen (then, normally intelligent people may be able to deduce they were being fleeced like a sheep). Let’s calculate the total spread based on the above rates using simple FX math for the 2 currencies chosen for this example, Euro and Yen.
FX is quoted EUR/USD that means 1 EUR = 1.1820 USD – the spot FX spread is about 1.1820 / 1.1822 according to LCG Brokers from Fortress Capital; but the market is closed now (it’s Saturday, day of rest in FX). Now if we want to calculate the inverse price, for EUR/USD using Bank of America’s tool, we need to use the 1/x (reciprocal) function seen on most common calculators. So if EUR/USD is 1.12 the inverse (reciprocal) is .89. If we use the same ‘spread’ to convert 1 USD = x Euro then we subtract 1.1820 – 1.12 = .062 or 620 pips. .062 doesn’t sound like much of a spread, but if you look in % terms it’s 5.54% of the price. If we add the same amount of pips (or percent, however you calculate) to the other side of the spread, it would be 1.244 – for a total spread of 1240 pips. Common spot trading spreads can run as high as 2 or 3 pips for the real shady FX brokers from Asia or aggressive IBs. 1240 pip spread is laughable. Now of course these customers are PAYING in foreign currency not TRADING foreign currency it would be impossible to trade over 1240 pip spreads – but this is the reality for these poor retail victims. 1240 pips is substantial if you’re sending more than $50 – so now let’s look at the shocking examples. At these prices, if you sent 100,000 to Europe, that would be about $5,540 in spread. Where does this $5k magically disappear to? The markets? No – it is booked as a profit on the bank’s balance sheet. Recently we (Elite E Services, Inc.) sent a wire payment like this for $5,000 and the banker had the audacity to say that if Bank A (not Bank of America, we won’t reveal the name) did the FX conversion we’d save $10 on the wire payment fee! We calculated that would have been $350 in payment to Bank A to save $10.
Now the critical thing for US readers to understand, this is a uniquely American practice which happens only inside the borders of USA. If you are in virtually any other country, whether it be UK, New Zealand, Japan, Australia, Switzerland – you’re going to get rates on such transfers which are HIGH but probably something like 50 pips maybe 100 pips in extreme cases. If you do transfers more than 100,000 that can go down to as low as 25 pips. So how can the banks get away with it in USA? They are simply taxing people’s stupidity, because there are alternatives. Companies like Fortress Capital offer deliverable payment services by using payment processors like Commonwealth Foreign Exchange to get the same foreign rates and save customers up to 90% on transfers. But they require an application and would not open an account for a single individual customer (it’s mostly for corporates who do regular transfers). Then of course there’s Currencies Direct who has offices in USA, and a number of other companies.
But the fact is that the banks have people by the short and curlies, there are not really many or any choices when you need to do a single transfer – and banks are making a small fortune from this. Could this be considered a Monopoly? Anti-trust issues?
They settled huge claims and have since reduced the spread (whereas now it’s 5.5% it used to be 7% – 8% !!) and companies like American Express (AMEX) no longer charge a ‘foreign exchange fee’ – that’s right, on top of this horrendous spread many providers used to charge a 1% or 2% ‘fee’ on top of this! Outrageous!
The sad thing is that most in the retail market, even small retail customers with little or no investment accounts understand stock trading. Forex is not so complex as it is sometimes presented by the banks – I’m sure they do this intentionally, they aren’t stupid.. This profit center is good for them and costs them nothing, it’s a risk-less profit that no one can complain about because ‘hey, it’s Forex.’
This is not the ONLY way the big banks are banking off people’s FX stupidity, but it’s the most petty way, and the most widespread. Millions and millions of dollars of such transactions take place on a daily basis and the banks are happy to keep things like this.
(GLOBALINTELHUB.COM) -- Dover, DE 8/8/2017 -- Global Intel Hub exclusive interview -- Elite E Services sat down with Mike Connor, Principal and Senior AP of Alpha Z Advisors, LLC – a trading advisor offering alternative investments based on strategies incorporating research on price anomalies, behavioral biases and institutional practices. In November of last year, Alpha Z Advisors LLC was ranked #1 Options Strategies Category by Barclay Hedge, a service that tracks funds’ strategies. So we wanted to learn more about on the Alpha Z Advisors strategy, as we have always supported options as a great way to not only hedge investments but also provide additional alpha to any portfolio. Also, futures options are generally traded on regulated exchanges – unlike FX which are mostly traded over the counter (OTC). Who is Mike Connor?
Professional risk manager and former member of the Chicago Mercantile Exchange, who has more than 40 years’ experience in the futures and options industry. What is the story behind Alpha Z Advisors?
Professor William Ziemba started Alpha Z Advisors, LLC with trading capital from friends and family. The initial investors were individuals he knew from the academic world in addition to a few referrals from the initial investors. The fund has grown in size from trading profits from the initial capital without attracting new investors. How has the performance been?
2015 had great performance, more than 100% return, but it probably will never happen again due to a management decision to reduce initial margin to equity risk. Why has it been so consistent?
The fund primarily trades options based on CME’s S&P 500 E-mini contract. Trading centers around the extreme prices of puts on the E-mini contract. The big money in trading options is made from being long, but returns are inconsistent (but the risk is usually very well controlled). The consistent money is made by being short options, but it comes with risk, and to stay in the game the risk has to be controlled. How do you control the risk?
By properly hedging the positions either with other options or a futures position, and by margin to equity control. Short (selling) options positions are no different than an insurance company policies – you are selling price insurance. Like any insurance company, we’re going to have occasional disasters, like Katrina – but they should be manageable. Over a long time horizon, well managed market disasters should not prevent us from continuing to perform. We have had our share of ups and downs, and fortunately we have been able to survive all drawdowns. Good risk control and position sizing are the most important factors in any trading campaign. What factors may impact the strategies’ performance?
Implied Volatility. Volatility is opportunity, but left unchecked it can be a horrible threat. Considering the results, why do you think there’s not larger AUM?
Until recently we have not solicited publicly. This is our first concentrated effort at soliciting investors. In addition, we put together a minimum account size so high ($250K for the managed account, $100K for the fund). Our account size should eliminate many potential investors. We are looking for sophisticated investors that can take a part of their portfolio and take greater risk for a higher return. How can investors ‘prove’ that the performance is ‘real’ – is there an institutional My FX Book ? There’s been a lot of CTA frauds that were real CTAs but used fake performance to lure investors – what assurances can we offer them about Alpha Z?
All the accounts – all the funds’ assets – all the performance results are compiled every month by an independent CPA firm. The statements themselves can be verified by the FCM.
Positions are manually stress-tested intra-day. What makes Alpha Z Advisors LLC different than other CTAs?
I’m not sure if that’s the case, we have a very professional trading plan. You can go to Amazon and buy books published by our founder Dr. William Ziemba, actually he’s published more than 50 books on statistical abnormalities and opportunities in the stock market. It certainly does not mean we cannot lose, or have losing open positions – we are going to have losing positions there is no way around it. But overall, if we can control the risk and keep margin to equity at a reasonable level we should be able to survive during the bad times. We have, I think, enough excess margin to sit through a significant rise in implied volatility and still survive, if the positions and margin to equity can be properly controlled. Like any market position whether it is options or futures an unexpected giant gap opening is always a threat to open market position’s stability. What makes the strategy different?
Trades are well positioned and I believe are market entry timing is very good. Our exposure is laid out over a broad time horizon (we don’t trade in nearby month, for example). If futures were a bullseye, you’d have to hit the target almost dead center to make a profit, with options, you can just hit the wall and still make a profit – of course, only with properly controlled risk and other parameters. I do not know how other CTA’s manage their positions and stress test their market risk, but I am confident our process is robust. What we do is not magic, it’s simply neutralizing the risk as much as possible, and there is a number of ways we accomplish that. It is all about understanding what the options can do if they move against you, and how you can respond adverse market activity.
The execution is done by a professional service. One way we keep our costs down other than accounting, is to try and soft dollar expenses through a soft dollar basis.
Customers are free to choose any brokerage house they want that clears at the CME. If customers do not have any preference, we are happy to set them up with our preferred FCM. For more information contact:
Mike Connor
312-470-6260
Or visit www.alphazadvisors.com This article/interview is for information/educational purposes only and is privileged, confidential and proprietary. This article/interview is NOT an offer to sell or a solicitation of any investment products or other financial product or services, is NOT an official confirmation of any transaction, or an official statement. Past performance is not indicative of future results. There is a substantial high and unlimited level of risk of loss in trading commodity futures, options, options writing, equities and off-exchange foreign currency products; such trading is not suitable for all investors. Investors should only invest money they can afford to lose.
