Public Research Note
VIX up ~28% so far today! Clearly some sophisticated people are getting damn nervous and pre-buying some very bad news. IMO, the VIX is only a low risk buy at this level if you believe we’re about to get bad news on the order of Oct 2008 or Sep 2011. Unless we get that news, I believe the VIX will drift back down into the mid-teens when the dust settles over the next few days. I don’t suggest buying into a one day explosive movement like this…without the corresponding explosive news. The only thing that will generate a reasonable risk-adjusted gain on the VIX from this level is exceptionally bad, almost black swan news…rarely a good strategy to forecast and bet on near term black swan events.
RE: China market: Let’s not forget that despite the major losses of the past few months, the Chinese markets were up ~135% TTM just a few months ago, and these losses have cut the massive gain to ~60%…the retail Chinese punters who drive their market have still had a great year, and would have to still feel some degree of a wealth effect (albeit shaken and cautious) that would find its way into their economy to some extent in the near future. I don’t believe the central planners in Beijing will allow the small Chinese punters and their wealth effect on the economy to get wiped out this year. In the centrally-planned Chinese economy, the gov’t can and will intervene aggressively in the markets to make sure of it. No need to freak out on slowing Chinese growth today…as it seems the markets are doing.
If you want to reduce exposure to equities, fine, but I wouldn’t play this by an extremely speculative roll of the dice on further near term VIX upside. My suggestion is to short the VIX today, take profits next week, then perhaps…perhaps go long VIX when it’s back in the teens and you believe moderately bad news is imminent…that hasn’t already been priced into the market.
NY, NY 21 Aug 2015
My somewhat rambling story below does have purpose relevant to today’s immigration debate, so please bear with me, suffer my meandering recollections charitably, and hopefully this bit of Texas history provides some background that is helpful today.
I was born in Eagle Pass, Texas on 22 November 1961, about 3 solid golf strokes from the Mexican border, literally…apparently in the old stone clinic at Fort Duncan, one of the Texas forts of the Old West…about mid-way between Laredo and Del Rio. Texas Legends: Fort Duncan http://www.legendsofamerica.com/tx-fortduncan.html . A rich participant in Texas, American, and Confederate history as a first line of border defense against Apache and Comanche Indians, and a trading post about 30 miles north of the legendary Camino Real / Old San Antonio Road passage from San Antonio to Mexico City…linking the Texas frontier to Colonial Mexico (New Spain)…used since the 1600’s by Spain, and built on Indian trails from time immemorial. A book was written about the old place…which I confess to have not read, “Fort Duncan: Rock of the Rio Grande Line of Defense”…but I don’t really need to…literally born on the premises and spent so much time as a young person in Eagle Pass, and at the Fort Duncan Club specifically. For me and my family, life in Eagle Pass revolved around the place. Most of my early childhood birthday parties organized by my grandmother Bibb were celebrated with hosts of kids at the Fort Duncan Club. Our family dined at the Fort Duncan Club. My dad and grandpa Bibb golfed at the Fort Duncan Club…then had post-round drinks at the Fort Duncan Club bar, served by a friendly character named “Polo” in old-style bartender fashion. To this day, one of my favourite summer drinks, and what I make for my kids, is a “Fort Duncan Club pink lemonade”, which Polo made for me while my dad and grandpa Bibb imbibed the adult stuff.
The place and local topography I remember looked like something right out of a John Wayne movie, most characterized by the brasada of dense thornbrush and mesquite where apparently in the old days massive herds of wild horses and cattle used to graze in the searing heat near the Chihuahuan desert. It was a tough place to visit the grandparents in the summer! Everything was parched, brown, and well-baked…outside of crows, horned toads seemed the dominant not-so-wildlife. I remember spending ALOT of time swimming at the Fort Duncan Club pool and drinking pink lemonades! I still remember the distinctive, thirst-quenching taste of that highly mineralized Texas brush country water. I remember my grandpa Bibb always watching televised bullfights from Mexico…seemed to be stuck on that channel…with the crows cackling / whistling their approval / taunting us in the background…with his prized set of bullhorns and hooves (a loser) mounted behind the couch in his version of today’s “man cave”. I remember eating scrambled egg and deer sausage tortillas cooked over a mesquite campfire at the crack of dawn in deer camp. My first deer rifle was “the gun that won the West”, a lever action Winchester model 94 .30-.30 given to me by my grandpa Bibb. I learned to drive and got my first driver’s license in Eagle Pass. I learned to shoot rifles, wingshoot with shotguns, and ride horses in Eagle Pass…where I also rode my only “bull” when my “cousin” whipped a cow while I was on its back. I remember the 780,000 acre ranch in Coahuila from my great grandmother Bibb’s side of the family…a real blowback to another era…strong political and economic ties on both sides of the border. My grandpa Bibb took me to my first bar and I had my first beer in Eagle Pass…usually Falstaff, and Bohemia or Negra Modelo in Mexico. I remember ritual Sunday formal dining and ballroom dancing to an orchestra at the Restaurante Moderno across the border in Piedras Negras…and incidentally, where our regular waiter Nacho Anaya invented nachos. I can remember Nacho’s friendly face, slicked-back / jet-black hair and formal attire. It was a very different era…I remember everyone there elegantly dressed to the nines and my dad or grandpa twisting my arm to ballroom dance with my mother…I preferred hanging out in the front of the restaurant, outside the dining area, in the hallway to the right of the bandstand, where they had a bear cage and some loud parrots…and where the local boys would hang out waiting to be sent on an errand to buy liquor and cacahuates (peanuts) for one of the diners and always for my grandpa. It was a venerable old bar and bastion of civility in a harsh place…google it…where John Wayne and other stars would hang out when filming in the area. One of my favourite entrée’s is still duck a l’orange…a specialty of the Moderno. We spent so much time at the Moderno that I could draw a physical layout of it today. There weren’t that many places to go in Eagle Pass / Piedras Negras! When we went out as a family, which we did a lot, it was to the Fort Duncan Club or Moderno.
…Lest I forget the Kickapoo Indian tribe that lived by the Rio Grande river in their traditional wickiups under the international bridge…citizens of no country…living quirkily removed from, if not stubbornly resisting, the steady encroachment of the modern world…perhaps those people were one of the last “wild” / untamed / truly free native Indian tribes in America (or groups of people in the OECD world for that matter)??…citizens only of planet Earth…still maintaining the unbroken chain lifestyle of their ancestors for millennia…resisting us…resisting us…resisting us. We’ve all heard of Custer’s Last Stand…I think this might have been one of native humanity’s last stands, certainly in the OECD world. This was the real deal…no tourist mock-up village…these people were destitute and barely hanging on. I just feel privileged to have seen it while it still existed, and know my kids never will.
My mother’s family, the Bibb’s, were the long-time political bosses / patrons, of Eagle Pass, Maverick County, and lifelong friends and political allies of LBJ. Politically, they represented the “Yellow Dog Democrat” old-line Anglo settlers on the Texas-Mexico border. Practically, the Bibb’s controlled most every aspect of community life, politically, economically, and socially, in the county. I remember unpublishable “boys will be boys” stories, told to me by my dad, other relatives, and a media group about my grandpa William, his brother Robert, their father Tom Bibb, and various high profile political figures in Washington and Mexico City. Crazy stuff…heady days. For various reasons, their influence extended far beyond the county. There were several old patron families like the Bibbs along the Texas-Mexico border that somehow, for a time, were able to create order out of chaos in the old Judge Roy Bean iron-fisted mold. The University of Texas – Arlington library recorded and preserves a history of the old border patron / political boss system created and run by the Bibb’s in Maverick County. To me, it’s a fascinating history of an American / Mexican power struggle that seems to be exploding today.
According to that man’s recollection of history, as border demographics began to change with an influx of Mexican immigrants, County Judge Robert Bibb embraced certain talented Mexican Americans into the Bibb inner circle, setting off a firestorm among the Anglo population, quickly moving to minority status, who feared the inevitable loss of political and economic power…leading to long-term decline. Anyone who currently lives there or knows anything about the US-Mexico border is aware of the dramatic, negative changes that have taken place on the US side over the past 30-40 years. It is both sad and troubling for anyone who has seen for themselves what it used to be. Albeit highly imperfect with deeply imbedded cultural racism (not much different from most of America at that time), it was a civilized and economically prosperous typical small town American community with a low crime rate. There has been a dramatic 180 degree reversal. Today, it remains deeply imbedded with reverse cultural racism, is a hotbed of narcotic trafficking and crime, and is economically destitute like few other places in America. Sadly, I could never risk taking my family back to visit any of these places today.
It is a literal disaster, from almost any viewpoint. It is inconceivable that any American would want or accept this outcome willingly. This is not the American Dream that the Mexican immigrants who came to these border communities were looking for. There are very good, tangible, and replicable reasons why the American experiment and the American Dream were so successful for so many immigrants from so many different countries since the early 1600’s. For some reason, despite their political power, the border immigrants have not been able to replicate most of the key success factors that provide the American Dream. They obviously want more for themselves and their children. Political power does not directly equate with economic prosperity or the American Dream. You must know what to do when you get the power…and they’ve either got earplugs in, or nobody has tried to transfer that knowledge…which I highly doubt. I believe that if they knew what was possible, what America could provide, along with the formula for getting there, Mexican immigrants would never prefer to languish in a Mexican version of America-lite and long term decline. Historically, no willing immigrants have ever come here for this outcome…they could not have wanted this, and the socialist politics they seem to prefer are a relic from Colonial Mexico designed to, or having the practical effect of, keeping the masses in need and the rich in power.
You’re in America now. You don’t have to accept this outcome or colonial politics anymore. There is more to be had…much, much more.
Donald Trump, lead these people. Show them how to become economically prosperous Americans, and how to build safe, attractive communities where people rise from humble beginnings to lives of middle-class comfort and security through hard work, determination, and courage. Tell them your personal story Donald. Tell them the classic American Horatio Alger rags-to-riches stories. Tell them how this country was built, and who did it. Many immigrants are obviously missing a key piece of the American experience / formula for success, and having done it yourself, you sir are one of our most credible public figures to tell those stories and get people on the path to economic liberation and the pursuit of happiness in the fullest American sense.
By allowing illegal immigration, we deeply harm the economic prosperity of legal immigrants. Close the border to all illegal immigration and make it an extraordinary privilege, with tangible economic benefits, to be American again.
NY, NY 18 Aug 2015
An Implausible Obama Scenario
The US is spending trillions on national security, most of it deployed in a “zero-failure” reliability strategy to prevent even the most ridiculous, absurd, implausible risks to US national security. In this effort, we’ve spent ourselves into national bankruptcy and shredded the Constitution…and as a side note, must ask ourselves “what have we preserved?”, because it isn’t the United States of America. But I digress.
Folks, we’re strip searching grannies from Des Moines at the airport, and via NSA spying, alienating the citizens of our most important world allies, and taking ourselves to the brink of WWIII with our state cyberhack program, so in that vein no cow can possibly be argued sacred in the interest of national security.
Is anyone, the Dept of Defense perhaps, gaming the implausible scenario that Barack Obama is playing for the other team?
I don’t need to present evidence that Obama has been highly influenced by Shiite Islam through his youth, is close to the world Islamic community today, and is possibly a closet, practicing Shiite Muslim himself. You can google that, examine the evidence yourself, and draw your own conclusions.
In the interest of analysing all potential, even implausible threats to national security, let’s assume that Obama is a practicing Shiite Muslim, as his father was…as is Valerie Jarrett, his senior, and some say only close advisor in the White House…Obama’s version of Dick Cheney.
Quoting Valerie Jarrett: “I am Iranian by birth and of my Islamic faith. I am also an American Citizen and I seek to help change America to be a more Islamic country. My faith guides me and I feel like it is going well in the transition of using freedom of religion in America against itself.”
Denials of this statement can be found online, but in the interest of national security let’s assume this implausible information is true.
Quoting Anita Dunn, Obama’s former communications director: “Her [Valerie Jarrett] role since she has been at the White House is one of the broadest and most expansive roles that I think has ever existed in the West Wing”.
In Shiite Islam, what do they say about a follower’s purpose in this life, and personal obligation to Allah? Google it. When you stand before Allah at the end, you will be held accountable for your life, including action / inaction on the opportunities for spreading the faith that Allah placed before you. Your place in the afterlife depends on it.
Perhaps in the mind of Obama, he will stand before Allah one day and Allah might say “I made you leader of the great satanic countries, and what did you do on my behalf”? Is Obama making decisions / taking actions that suggest he’s playing out his faith in the White House, as leader of the Western world / leader of the “great satanic” countries, in ways that are against the national interests of its citizens, but in the interests of Allah? In the interest of national security, let’s game this situation and assume he is…that he’s playing for the other team…Shiite Islam specifically.
Many, if not most, unbiased clear-thinking Americans believe Obama has a strong, unnerving tendency to be Islam’s apologist vs. it’s opponents whomever and wherever they are…regardless of the scenario. Google it.
Fact: A recently declassified document suggests, and the former head of US Defense Dept Intelligence (DIA) just confirmed, that Obama willfully created ISIS and supports radical Islamic terrorists militarily.
Fact: Through his negotiated Iranian (Shiite Islam) nuke deal, Obama proposes to overturn the chessboard of the Middle East power structure, and place Shiite Islam in a dominant regional role. The Sunni’s in Saudi Arabia, Israeli’s, et al… are livid, and promise war. Why would we willfully organize the conditions for WWIII, the ultimate threat to US national security, if we’ve previously been willing to bankrupt the nation and shred the Constitution to increase national security?
Fact: The religious leaders of Iran have publicly stated that their primary purpose in life, and for the Iranian nation, is to lay the groundwork for the final battle of Armageddon and the return of the Twelfth Imam…the Mahdi…the ultimate saviour of humankind who will bring Islam throughout the world. Google it.
Fact: Despite warnings of catastrophic consequences, Obama removed troops from Iraq and Shiite Islam has now filled the power vacuum once occupied by Saddam Hussein’s secular government. Iran (Shiite Islam) is now in control. Google it.
Fact: The old, cynical, realpolitik power structure in the Middle East / North Africa, supported by the West, used secular dictators like Hussein, Gaddafi, Mubarak, and Assad to keep a lid on radical Islam, which they perceived to be an infinitely greater risk to Western national security than the dictators themselves. Hussein was killed under GW Bush, then Obama proceeded to remove Mubarak, kill Gaddafi, and Assad is the current target. IMO, GW Bush’s greatest failure as president was allowing a personal vendetta? against Hussein and bad advice to cloud his judgment and topple the first domino on behalf of radical Islam. We cannot remove Assad…the void will be filled with Obama’s ISIS. This is realpolitik, where imperfect, even cynical solutions reign supreme.
Lastly, given that we’ve bankrupted the nation, shredded the Constitution, and brought the world to the brink of WWIII under the main supporting premise of defending national security, what traditional American leader in their right mind would open the US border, allow uncontrolled entry, and actively immigrate millions of weakly-vetted / un-vetted Muslims from hotspots of radical Islam into this country? The answer: Only a non-traditional leader like Obama, out to fundamentally transform the US into a more Islamic country. The biggest losers in this strategy are the same liberal / leftist base that supports Obama through hell and back. Ironically, Obama’s Islamicized America would eliminate those segments of society quickly, if not immediately.
An Implausible Obama Scenario:
Per Germany’s Der Spiegel, “The NSA spying scandal shows that America’s pursuit of terrorists has turned into a mania. Spying on citizens is as monstrous and unlawful as Guantanamo Bay and drone warfare…America is sick.” http://www.spiegel.de/international/world/spiegel-commentary-on-us-internet-surveillance-a-911256.html
Since we’ve taken national security to the point of a sick national mania that threatens world peace, no cows should be sacred. At this point, who, what media organization, could possibly push back against ANY effort to enhance national security? Has anyone gamed, and planned for, the equally implausible scenario that Obama is playing for the other team?
It goes without saying that Obama has not proven himself to be the type of open, transparent leader we can trust to run the country in isolation, by executive fiat, un-monitored by Congress. Given the latest shock disclosure, that he did indeed create ISIS willfully and likely has no plans to defeat his creation, it’s what we don’t know about Obama that we should be worried about.
It’s time to control the border and reign in illegal immigration asap…as a matter of national security. This has nothing to do with racism, and anyone pushing that narrative on the gov’t side is highly suspect.
NY, NY 12 Aug 2015
The MSM is actively trying to bury this story…one of the most consequential in our generation??
Quote from The Levant Report: “knowledge of the declassified document must make it into every American household”.
In summary, a recently declassified document suggests, and the former head of US Defense Dept Intelligence (DIA) just confirmed, that Obama willfully created ISIS and supports radical Islamic terrorists militarily.
The implications are extraordinary, hard to fully analyse, and frightening, but one thing is clear: It’s not only what we do know, but what we don’t know that should worry us when monitoring Barack Obama’s presidency.
This is hard evidence for what many have instinctively believed, yet at the same time, denied as unthinkable from our own President. Did we really get it that bad on Obama? Yes Virginia, this evidence proves that we did. Was George Washington really on the side of the British? Unthinkable.
It’s time to encourage independent, non-US journalists to investigate and report on this story asap.
It’s time for all Americans to watch / re-watch Dinesh D’Souza’s “2016: Obama’s America”, which gives one plausible explanation for the root of our Obama problem.
It’s time to control illegal immigration and secure the border asap. Again, it’s what we don’t know that should worry us.
Who still trusts Obama to negotiate a nuclear deal with Iran, the world’s most active and unrepentant state sponsor of Islamic terrorism?
It’s time for all American’s, left, right, and center to vote Trump. He’s the only one with the courage to control our borders. Does this really require courage?!
NY, NY 11 Aug 2015
Thoughts on the 6 Aug US GOP Debates
In business or government, Trump / Fiorina would be a powerful leadership team for a failed / distressed organizational turnaround. Broadly speaking, the American public knows business better than anyone on the planet. Out of the declared candidates so far, who would you choose to lead the turnaround of a failing organization? I can only seriously imagine one of these two. The others don’t have the skillset, experience, or the unique demeanor of a turnaround pro, so critical to the challenge of this job today. Only two of them would be seriously considered for this type of challenge in the business world, when direct personal money is on the line, much less the nation’s future. The Donald in particular has the archetype demeanor of a successful turnaround leader. These guys are brought in when blood is in the streets, a company is going down, and nobody knows what to do. Tough as nails, and mostly unpopular…people who have the courage to grab the helm and do what has to be done to right a sinking ship…rarely are they fully appreciated, except in their paycheck, and perhaps by posterity.
When Americans are existentially challenged, we naturally gravitate towards bold, highly talented, personally-imperfect leaders in the mold of Patton, MacArthur, Washington, et al. This is no time for a milquetoast, scrubbed career pol hack who could only preside over a gracious decline in the most optimistic scenario.
Somehow, we need to start attracting America’s best and brightest…the world’s best…into this corrupted political arena, for even a slim chance of averting national calamity…in the near term.
My hat is off to Carly Fiorina, Dr. Ben Carson, and Donald Trump for bringing their formidable private sector talents to the table at this critical juncture in American history. We need more people like them in this game. We may not agree with everything they say, but their voice in the process is critically important.
Starbucks CEO / Dem candidate Howard Schultz to challenge Hillary?? Let’s encourage this talented man even if we don’t support his views. It’s time for all hands on deck, and a serious national turnaround program to commence…asap.
NY, NY 7 Aug 2015
Time for Germany to Pay the Piper
As I’ve been unsuccessfully arguing since 1992, as a grad student at Columbia University when professor Robert Mundell, the “father of the Euro”, was conducting his work on “optimal currency areas”…the Eurozone is NOT an optimal currency area and never has been! I remember being blasted for my position on an Econ final by an Irish professor blinded by Europhoria.
Finally, after 23 years of ignoring reality, the Greek crisis has brought the issue front and center, like a festering, now life-threatening wound.
This is not about Greece…it’s about the fundamentally flawed Eurozone experiment. Greece is not the only “lesser-developed” Eurozone country hamstrung by the currency union.
I won’t go through the economics again…if you want to see that, refer to earlier commentaries.
The Eurozone was created primarily to benefit German exporters, and Germany has benefitted greatly from the system. It’s now time for Germany to pay the piper. Either bailout Greece and keep your captive PIIGS export market intact, or allow a North/South Euro split…the more natural state of affairs.
SUSTAINABLE GREECE / EUROZONE SOLUTION:
PIIGS, not just Greece, should exit the Euro asap and create a Southern Euro currency union, w/ France as anchor member of the Southern Eurozone and Germany anchoring the Northern Euro.
Expect a quick economic explosion in Southern Europe, as a devalued currency attracts global investment and tourism. France especially, would reap an economic windfall previously dominated by the Germans.
PIIGS sovereignty, self-determination, and higher economic growth potential. Back to the drachma, peseta, lira, franc, etc…
Let’s see if the French wake up…
9 Jul 2015
Iran Deal Warning
An Iranian Shiite theocracy is, and will always be, a significant national security threat to the US, the West, and every non-Shiite society in the Middle East / North Africa. One of their key, long term stated objectives is to wipe the US (the debauched, sinful, “Great Satan”) from the face of the earth by any and all means possible. Obama’s naïve deal attempts to insert Iran into the role of a rational, regional peacekeeper counterweight vs. ISIS and militant Sunni’s in the Middle East. Theocracies, and nations driven by Islam, unhinged from the rational thought process / M.A.D. which underpinned peaceful coexistence in the Cold War, will start a nuclear arms race and nuclear war will soon follow. This deal is naïve ivory tower arrogance at its finest, completely disconnected from the reality of “Twelfth Imam / apocalyptic thinking” that drives these Iranian leaders at their core. Iran’s leaders have publicly stated their intention to facilitate the final battle of Armageddon. Quoting Iran’s supreme leader Ayatollah Ali Khamenei in 2012: “We must study and remind ourselves of the end of times and Imam Mahdi’s era…We must prepare the environment for the coming so that the great leader will come.”. Bueller?? Bueller?? Hello?? Obama, following the Neocons, has dismantled the ugly but somewhat effective realpolitik solution that has kept militant Islam at bay for centuries. A dangerous genie is about to be let out of the bottle, and the world is about to pay an extraordinary price for this ivory tower insanity.
As I’ve said it would over the years on this blog, the Middle East / North Africa is exploding into chaos as a direct result of naïve US decisions to pursue dismantling of the old system, albeit ugly, broken, and hypocritical as it was. George W. Bush tipped the first domino, and Barack H. Obama wiped the table clean. I predict every generation of Americans in the future will deeply regret that we did this…that our arrogance brought us to this depth of foolish thinking. We cannot forcefully shape the world into our own image, and it is foolish to bankrupt the country, destabilize the world, and alienate ourselves from most countries of the earth in pursuit of this psychopathic folly. Would God want the US to shape the world into its image? If we’re on the wrong side of that answer, watch out.
Winston Churchill to Neville Chamberlain: “You were given the choice between war and dishonor. You chose dishonor and you will have war.” Substitute “we” for “you”.
7 Apr 2015