Moving Markets - Mnuchin Style

Fund Portfolio Management - FPM have speculated on Treasury Secretary nominee, as at time of writing, Steven Mnuchin's motives circumstances and ethics, among other considerations, for assigning an insider-trading reputation, under the “NoSmokeWithoutFire:Of Reputation” investigative enterprise.

Backgound To FPM's NSWF:Reputation

FPM's new millennium financial technology "fintech" enterprise seeks to arbitrate governance in the space of illegal insider trading, initially in the financial investment management sector. In the 21^st Century, an age old white-collar corruption of capital markets for the benefit of the few and to the detriment of the many, CAN AND SHOULD BE ERADICATED. Insider trading with "non-public material information", creates an un-level playing field for the majority of stockholders in listed companies or corporations. Through exclusivity of procuring share-price moving information, a bias and distortion affects stock market buyers and sellers. Such "exclusivity" and extended to broader circumstances has contributed to  social wealth inequalities in the history of money-lending.

FPM's bold and honed challenge is to intervene in application of Rule 10b-5 of the US Securities Exchange Act of 1934 about illegal insider trading. The equivalent laws inherent in other global financial capital markets is also of great concern. The service FPM provide is especially for those institutional shareholders and indirect vested parties, that are perhaps unwittingly disadvantaged materially through insider trading. The privileged few insiders exchanging non-public material information about a stock-holding in their trading portfolio will by magnitudes make profit at the expense of majority of investors. Otherwise if everyone had had access to the same information at the same time everyone affected similarly. Most economic student are falsely taught from the beginning that this is the prevalent state through "Efficient Market Hypothesis" (EMH). While economic finance and investment students, and professionals alike are inducted to believe in efficient capital markets with "perfect" knowledge i.e. level playing field, for all participants; on closer inspection a merely illusory proposition termed "hypothesis" . That is it is merely theoretical of the expected and legal reality; whereas the "sharp practices" exist in reality.

The illicit insider trading parties benefit from the market participants as a whole reacting to an eventual public announcement, which moves the asset-price in question in a certain big-swing direction. The illicit traders were already positioned with their stock-holding to realise profit from the eventual and actual market announcement.


Exclusive Insider Trading: An Example

Say one is a pension investor holding Google stock (GOOG) in a portfolio, and was not privileged to have prior information, i.e. ahead of a share-price moving announcement by the company representatives.  While another hedge fund investor who was privy to the leaked-information of this announcement, through law-breaking means, can anticipate the degree of significant share-price swing and accordingly adjust his holding of Google to make a confident no-risk trading profit, for his portfolio investors. Whereas the former fair-trading pension investor may not have foresight or opportunity to reduce or increase his Google stock-holding, or otherwise sufficiently adjusted his portfolio, to benefit from the subsequent announcement and share price swing. FPM strongly believe that without a level playing field in the investment management industry for long-term savers, there exists a two-tier system of returns; the superior savers' return system is the one through which  stealing of inside information information is the edge.


Mnuchin Case Minutiae

Specifically pertaining to an investigation action, Mr Mnuchin moved the markets as recently as 29th November 2016, when share prices of “Fannie Mae” and “Freddie Mac” spiked up some 30%. The speculative question is whether his material public announcement or speech was also made earlier and privately to a few investors? If Mr Mnuchin gave his former investment trading colleagues, at ESL for example, an information edge prior to public speaking, then this can potentially compromise his integrity. FPM say “potentially” because of the technical burden of legally proving malfeasance is onerous presently. “Fannie” and “Freddie” are investor's cant for stock market listed Government Sponsored Enterprises (GSEs), a quasi Government and private-sector entity backing American house mortgage loans.

The share-price spike as depicted in above diagram was based on traders and analysts speculation. Betting that Mr Mnuchin, supporting his nomination for Treasury, had suggested that the housing focused and taxpayer-backed GSEs, struggling since the financial crisis of 2007-08, might be restructured and “privatized”.  What he had said, which created the sharp uplift in “Fannie" and “Freddie” share prices in November, is shown below:

"We got to get Fannie and Freddie out of Government ownerships, it makes no sense that [the two federal mortgage agencies] are owned by the government and have been controlled by the government for as long as they have." Speaking to Fox Business Network’s Maria Bartiromo on 29-Nov-2016.

This surge in related shares price settled down, and on 19^th January 2017, at the Financial Committee confirmation hearing for Mr Mnuchin's candiditure for Treasury chief, he clarified his comments about the two quasi public-private mortgage agencies:

"My comments were never that there should be recap and release."


Shares of Fannie and Freddie sold-off around 11% in the minutes after Mnuchin made his comments - both recovered a bit by close. FPM wonders if that was interpreted by investors as political double-speak denial for exactly the opposite which the Treasury under Mnuchin is expected to do under its top 10 priority? Since that Finance Committe confirmation hearing rebuttal of “recap and release”, the two GSEs have surprisingly resumed an uptrend in share-price. 

Under the heading of “Where The Wind Blows”, FPM's adduced assessment of which organisations and individuals are involved in insider trading, is speculatively framed. In Mnuchin's case, using internet and its subscription resources such as Muckety interactive relationship mapping, we know straightaway that Goldman Sachs, Edward Lampert's ESL Investments, and alumni of his failed hedge fund, Dune Capital could potentially be tipped-off, ahead of share-price moving public statements. Further opportunity for insider-trading would be afforded by the public-relations lobby group connected to very inflential people, corporations and sovereign-state clients, Patton Boggs, LLP.

Our presumptive spotlight for financial market malfeasance falls on William Ackman of hedge fund Pershing Square Capital Management. Fannie and Freddie are large positions of Mr Ackman’s Pershing Square, who suspiciously converted to a Trump fan right after the election! On the 10-Nov-16, 2 days after the election of Donald Trump as President of the USA, Mr Ackman made this statement at a press conference organised by New York Time: 

"I think Fannie and Freddie are going to get resolved in the first 12 months of this new administration, and I'm looking forward to having my second meeting with Donald Trump and negotiating a deal...” William Ackman of Pershing Square Capital on days after Trump election.

Another set of illuminaries and cabal hunting as pack-of-wolves are highlighted in “Moving Markets Mnuchin Style”. They are hedge funds who have openly welcomed privatising the now profitable public entity which as public-private concerns the two GSEs cost the taxpayer $188 bn to rescue at the height of the financial crisis, despite reports that taxpayer bailout have being repaid in 2013/14. These billionaire financiers attacking in pack like wolves, tended to have power under politics-for-sale and policies-for-donations operandi  of recent successive USA adminstrations. We will keep tabs on "Tumpet-Trump" to see if he will take on wolves that include Bruce Berkowitz (Fairholme Capital), Richard Perry and Mnuchin’s pal and ex-partner, John Paulson. Add to this list Carl Icahn, "a longtime business Trump Friend and business partner, has invested $50 mn in Fannie and Freddie"

Further stage of FPM insider-trading ratings research, would come under template heading “Spreading Like Wildfire”. This would be related to Mnuchin's reputation from previous mentioned "where the smoke blows" identification of his past and present working and personal relationships. Spotting Mnuchin's relationships with motive and opportunity in their profile (indicated e.g. by past loose practice codes in relation to ethics, greed, morality and humanity), starkly points to another close associate of Mnuchin, Edward Scott Lampert, of the mentioned eponymous hedge fund ESL Investments. 

In short ESL is the largest shareholder of the famous Sears Department retails stores which had merged with equally historical “K-Mart” stores under difficult times. However, the storied Sears now synonymous in reputation as Edward “Sears” Lampert, since he is its decade-long chief executive and chairman. At least one commentator  has questioned Mr Lampert's role as Sear's hedge-fund stockholder and the store's chief executive Chairman (“His dual roles give him inside information that motivates his actions.”). See the 2-years stock price chart below, compared with benchmarks “retail – consumer discretionary” and “retail – consumer staples” to see the declining and unarrested fall of this retail giant of America:

The Long Slow Ruination of Sears Holding Under ESL Investments

FPM's greater critical rating, as opposed to corporate “mainstream media muppets” dubbing as the next “the next Warren Buffett” is not based on agenda; which we at FPM know in hedge-fund terms of shorting, leverage, CDS and other means of disaster-capitalism that our review degree reputation for Mr Lampert is Eddie “Sears-Stealing” Lampoon”. This NSWF:Reputation degree has double-edged meaning too; especially when we balance a Zerohedge narrative “Sears Kept Alive by itsCEO, Eddie Lampert, Again” on 29-Dec-16. 

In relation to Mnuchin's interview and market moving comment about housing-backers Fredie and Fannie, we know Mr Lampert is reputedly asset-stripping Sears department and former Kmart stores for its real-estate value. So this bad-boys link, as well as Mnuchin's connection as Director of Sears Holding Corporation, places them at the scene of the crime shown in the ruination price chart of Sears above.

Inexorably, for exploring the investigative focus, we also note than another of President Trump's nomination, for health secretary Tom Price, had a confirmation hearing discussing links to insider-trading. FPM won't elaborate on this “wildfire” of insider-trading but point to research by staff at “Crooks and Liars” - a website service. To access that by them story click on the link provided.

Further Reading:

Hedge Fund Managers Expect a Return on Their Investment in DonaldTrump -22-Nov-2016

The American Dream is in Steven Mnuchin’s hands - 19-Jan-2017

Sears Suffers -- Eddie Lampert Wins

  
How Bill Ackman Scrambled To Acquire Over $3 Billion In 

AllerganCalls Knowing Valeant Would Submit A Bid

Winds Of Change: American Geopolitics 2017

A Seduction and Flirtation With America.

FundPortfolioManagement-FPM have analysed Donald J. Trump's Inauguration speech as the 45th President of the United States on Jan. 20, 2017. Speech was short and sweet,  to the point (one of the shortest speeches), which we have filtered into three themes below. We feel President Trump's brand has been consistently conveyed at least in rhetoric, and even apparently in policy. Soon after the Presidential swearing-in speech, the President's team put out a press release that they are withdrawing from the controversial Trans Pacific Partnership (TPP - trade deal with Asia), and keenness to re-negotiate the existing "NAFTA" trade agreement.

If we believe that the 45^th President of United States wrote his own speech, and optimistically consider the pledges given with his high conviction attitude, then indeed our organisation's effort will be to hold him to the moral rectitude / uprightness he presented as a business man, and now as the most powerful man in the World. 

Our mechanism to enforce the President's veracity between rhetoric and reality is under our thesis of conveying his reputation. His past reputation is dubious not to say the least, but the stalwartness of his impressions and deeds in the Oval office is our time-line of watchfulness, under "NosmokeWithOutFire:OfReputation".

After internal dialogue, FPM have filtered the speech into three policy agenda, from the sworn-in administration:  

1) Against the Status Quo Political-Corporate Agenda:

“We are transferring power from Washington, D.C., and giving it back to you, the people.”

“Washington flourished – but the people did not share in its wealth. Politicians prospered – but the jobs left, and the factories closed. The establishment protected itself, but not the citizens of our country.”

“January 20th 2017, will be remembered as the day the people became the rulers of this nation again.”

“This American carnage stops right here and stops right now.

“So to all Americans, in every city near and far, small and large, from mountain to mountain, and from ocean to ocean, hear these words: You will never be ignored again.”

2) Anti-Globalization of Trade, Migration, Etc:

“For many decades we’ve enriched foreign industry at the expense of American industry... We’ve defended other nations’ borders while refusing to defend our own.”

“We’ve made other countries rich while the wealth, strength, and confidence of our country has disappeared over the horizon.”

“We must protect our borders from the ravages of other countries making our product, stealing our companies and destroying our jobs. Protection will lead to great prosperity and strength.”

“Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families.””

“We will follow two simple rules: Buy American and Hire American.”

3) Less Foreign Policy Intervention:

“We do not seek to impose our way of life on anyone, but rather to let it shine as an example for everyone to follow.”

“At the bedrock of our politics will be a total allegiance to the United States of America, and through our loyalty to our country, we will rediscover our loyalty to each other.”

“We will not fail. Our country will thrive and prosper again. We stand at the birth of a new millennium, ready to unlock the mysteries of space, to free the Earth from the miseries of disease, and to harness the energies, industries and technologies of tomorrow.”

In Brashness - So What?

FPM will be interpreting and tracking these broad scope Presidential pledges as they become specific policy commitment over the coming months. For example, TPP, which was already struggling to get passed in Washington under outgoing President Obama, is already shelved by incoming Trump administration under anti-globalisation theme. We believe we have identified an overriding principle that underpins some of the key themes.

For example, under the "Less Foreign Policy Intervention" mission, we expect the new administration to get congress and Senate to begin reducing its commitment to finance and support wars and regime-change in the Middle East. The war  is not merely for oil! This would be due to  America's reserves of oil being the largest already; but yet possibility of those energy reserves  being a "redundant asset" under fossil fuel bans due to climate change concerns.

Like most of the Americans who voted for President Trump, FPM believe he represents maverick hope for a foundering economy and country, weighed down by US$ 20 trillion of National Debt and 40 years of neoliberal Friedman monetary policy economics.

Yet the newly inaugurated President of the United States said in his realty salesman pitch style:

"From this day forward, a new vision will govern our land."

And the  morning after?

The Economics Of Triumphantlism - Trump

Revised  / updated: 6th Jan 2017

For a country, or for that matter an individual at a time upheaval in mans' migration, to triumph as a Western Democracy is great indeed; yet originally the triumphant players were forces at war against other equally rapacious entities. Today and certainly since World War II attempts to conquer EVERYTHING under various "globalism" umbrella is tantamount to supremacy borne out of insatiable greed for power and possession. A psychology of a creed of men which is not best described as merely megalomaniac, as is often distorted in the tawdry popular media, but "monomaniac". See classic dictionary definition below:

Dictionary Definition of "Monomania", Collins Westminster

Only a few nations or countries have achieved significant global ambitions over the milennia. Nowadays we can call some of these nations as members of the Group of Seven or "G7" countries, or "G5" countries. Of individuals, which can extend this topic to, since individuals possess wealth (and therefore power) greater than that of countries, who have achieved global reach in business and other field of aspirations e.g. Hollywood actors, maybe  be termed the "1%" for vogue sake. More later.

We have witnessed such phenomena of conquest and rule in many guises throughout the millenniums. Not just initially colonizing neighbouring villages as marauders, but eventually taking over whole regions of a country. This all-consuming purposeful "greed" is the super-powers' sickness and its eventual tumultous downfall. The fact of eventual decline and downfall facing these supremacist nations and their leading conspirators is evident in history (in black-and-white text and nowadays in bright multi-colored spectrum vision - er internet!) has changed little, to date. These superstate nations' overwhelming dominance has now not only translated into historic domestic mastery of its population; that is, society organised as slaves and fiefdoms, but also into a template model for international scope assimilation and exploitation. 

Just as megalithic Dinosaurs, Indus Valley, Mesopotamian, Greek, Roman etc etc civilizations and creed came conquered and they themselves vanquished into oblivion - one can adumberate / adduce outcome for the in mode hegemony or superpower. This free form narrative propounds capitalism facing the decimation fate, or at least decline, perhaps in our life-times.

What is often called by capitalists as "greed" and described euphemistically as "economic bubbles" is the phenomena of deliberate overreach and what is term "crash recession depression bust" is the inevitable extinction or deflation of most hubristic events, acts and entities. As discovered from historical decline and fall of empires; and more broadly of any anthropological entities' life-cycle. In classical Greek mythological terms "hubris" and the story of Icarus. 

Dumbed-down indoctrinated economists and other purveyors know this creative-destruction  as "boom and bust cycles". But these economic theories and education-establishment preached vocabulary wittingly or otherwise dissemble more sinister dark and ashamed features of the human intellect and social existence;, as little known esoteric understanding.

Indian spiritualist called this life-force cycle Brahama, Vishnu and Siva - the original name for the Holy Trinity of Creation, Preservation and Destruction. It got distorted to Biblical proportions in the Middle East. A universal triumvirate of life-cycle disseminated in many forms of religion and in many other templates. Joseph Schumpter, an economist of genuine integrity, at least in this authour's perception, we believe coined the phrase "creative-destruction".

Applying the spiritual Siva or "The Way of The Left Hand" - in Sanskrit scriptures "Vamachara" - we analyse today's last speech of the year by Mario Draghi, the head of the European Central bank. The "Satan-eyes Impresario Mario" charged with maintaining the facade of a crumbling new citadel, i.e. the European Union, via vital financial management. Some say an expanded European Union is the first pillar of Zionists agenda to "inherit the earth" (also known as One World Government / New Word Order) or some such garbage from the Semite story telling hypocrisies.

As stories and narratives have been imposed on a wider more unsuspecting innocent populous for milennia's, we at Fund Portfolio Management decided to interpret one. Our analysis has been "geopolitics" in context of global macro fundamental economic flux (Triumphant Trump Card and Great British Brexit). So FPM pseudonym 'Fred'  read between the lines of the captive of the international capitalist creed doing his life-threatened life works  speech on 28th November 2016 to Committee on Economic and Monetary Affairs of The European Parliament:

For Fred's agenda perspective on Brexit bomb implications going forward - as greatly relevant as any polished and 'puppet' hack / journalist out there, contact Fund Portfolio Management - FPM.

FPM has long believed the EU project doomed to failure, for many many reasons, not least as the epicentre of hypocrisy responsible for genocide and other human evils. What has transpired since the industrial revolution, and that which must face an age of decimation destruction or reformation is perhaps here with last financial bubble bursting in 2007-2008... 

SAC Capital (Point 72) and Blackstone Group Reputation Degrees

These 7-panel posters, as below, form the introduction and inaugural case study of a vigilance exercise in financial investments, initially.

The exercise name is "NoSmokeWithOutFire:Of Reputation" also abbreviated  as "NSWF:Reputation".

5th Oct 16 at time of "31-Years Low for GBP/USD at US$1.27 to GBP"

The Olympian Debt Write-Off - #Rio2016

(This Draft Of K.Siva's "Geopolitic Strategy" Report Is Dedicated to Prescient Work of David Scott, Indousez WI Carr Economic Strategist in 1997 - Year of  Hong Kong Handover to China. Mr Scott elucidated the phenomenon of China exporting global deflation.) 

Economies of the world in slow transition is the likely cause of the stagnation in economic activity, as reflected by traditional measures since the financial crash of 2007-08. 

The effectiveness of the continuance of current #politiciansRcriminals monetary-stimulus policies have been considerably questioned for the sustained great inequality of wealth between people, the state and its "hidden hand". Is current monetary economics merely blowing small capital-markets related trading bubbles and consequent corrections - at the phenomenal cost to taxpayers via a monumental public debt-bomb? 

Perhaps just round the corner with Italy or 'PIIGs' debt default being catalyst for contagion of national debt defaults. Remember, sub-prime mortgage default was trigger for wave of write-downs of housing market securities valuations. FPM's more modest view is the prospect of debt devaluation via concerted and manipulated inflation index increases.

Some have argued that Government debt-financed stimulus spending since last orchestrated financial crash from 2007-08  caused a bubble in commodities and propped-up the unrealistic real estate / property asset  valuations, more than actually protect jobs and  other reputed public-interest effects conveyed by by complicit peculators in corporate-media. Free-market companies and economies are no longer able to grow evolve and founder on their own idiosyncatic risk i.e. as Schumpter's "Creative-Destruction" model of capitalism; instead they take propping-up with public money. These systemic risk companies have come about through globalisation and related deregulation of anti-trust and anti-monopoly policies. These safeguard policies diluted means globalisation and deregulation are dirty words. Despite moron economists and media lies.

The  big pharmaceuticals conglomerates corporations DO exactly the same with human lives - that is, help people live longer by being dependent on their medicines. Laissez-faire capitalism or branded widely as "Neoliberalism" policies since 1980's in all reality died a death in 2007-08. Yet the sovereign public debt in the major economies that have ballooned since that US-led housing and financial crisis is the result of policy failure to allow capital asset destruction. Financial and housing assets should have legitimately crashed, not just temporarily out of panic and ensuing fundamental bubble re-valuation, but without the State intervention with taxpayer money to uphold excessive notional valuation. The 1% of society's asset or wealth owners and the larger middle-class beneath them should have had their bubble-inflated assets wiped out - but for the benevolence of the "ragged-trousered philanthropists", the public!

For example, shareholders in Citigroup Inc  suffered at the height of the financial crisis when the global retail and corporate banking 'big bank' reflected distressed and insolvent fundamentals with share price trading as low as between USD 1 and USD 5 (before stock split). However, the American taxpayer has been burdened, not just the present generation but  future generations too, with Government policy supporting the 1% asset owners with multi-billion Dollar public money infusions and backing. US Treasury department's stated reason for the support was that Citigroup was a "systemically significant" bank and industry. The scale of the taxpayer support for a publicly held / listed company is shown from this excerpt: 

...Treasury in November 2008 gave Citigroup a $20 billion emergency infusion, on top of $25 billion received the prior month, from the $700 billion TARP fund. The government also backed about $300 billion of Citigroup assets, helping to prop up the New York-based bank as its share price plunged below $5 and some depositors withdrew funds. (Source Bloomberg, January 13, 2011 "Citigroup Bailout Based on ‘Fear of the Unknown’")

This one example highlighting Citigroup of why the creative-destruction cycle was not permitted in a supposed free-market deregulated economy is the rub, that should cause repugnant revolt from the public about the 21st century con-trick of "neoliberalism": "Private Profits Public Losses" or "socialising losses". The systemic thieving from the public purse is not a new one; Governments of the day or #politiciansRcriminals have enforced prudent austere policies, such as public services cuts, on the greater mass of the public in the name of reigning-in national debt levels; while at the same time systemically allowing the capitalist-wealth class to accumulate private profits in staggering amounts. Evident by the wealth inequality in societies.

To complete FPM's geopolitic vision using the Citigroup example, is the price chart. This shows a story of euphoric excess and deflating stagnation. 

The Iceberg That Titanic Citigroup Inc Hit: Yet Not Sunk! (Source: FPM, Yahoo)

In a progressive outlook Citigroup is not a zombie economy constituent but a tell-tale of not allowing creative-destruction to run its course. As demonstrated the "big bank" model in all likelihood has lost its faithful followers and investor adherents; and subsequently exposed  the folly and sheer criminality of Government policy failures of flooding these financial bastions with public capital / debt. The new alternative media exposed multi-trillion financial criminality - fraud is too lesser word - has been described as the corrupt crony capitalism of neoliberalism, which engulfs the major profession of politics, judiciary, mains stream media, public relations and of course the banking cartel, all and more pulling the "hidden-hand" strings.    

Others suggest public funds used after reckless and scandalous corporate recessions, in the name of economic stability policies have artificially kept interest rates low, and prevented mass scale corporate insolvencies and debt default. Of the numerous "jackanory" stories, really truly it theft by robber barons. As one property builder once pronounced memorably for this author  at a builders' merchant store counter, while paying for his purchase: "You Ought To Wear Balaclava, That's Daylight Robbery!"

The systemic stealth transfer of wealth from public sector to private sector has been happening since Second World War on a "Lion-Zion" scale. Currently Dissembling As "Middle-East Regime Change" and "Privatization Of Government and Functions". (Source: FPM and Naomi Klein)

  

In Great Britain yet another round of so-called “Quantitative Easing” was instigated by its Canadian-origin central bank governor Mark Carney. This monetary re-assurance was allegedly to support the expected slump following Britain's public national election to exit from the European Union globalisation project on June 23rd, 2016. In FPM geopolitical vision, this is simply the greatest transfer of public wealth to private concerns. 

No Smoke Without Fire: Of Reputation (#NSWF:Reputation) know who these private concerns are by historical reputation. To name two direct at hand, @richardbranson of Virgin Group (and FPM's financial honing of reputation @stevencohen of #SAC Capital et al.)

Stop Press! Opposition Leader Of UK Labour Party #Corbyn Encapsulates Re-Nationalisation, And Heads Into a #Train Crash With Billionaire Corporate Conglomerate Owner #Branson... (Source Twitter Date 25th Aug 2016)

FPM believes the economic-policy course needs to be re-directed towards real fiscal or Keynesian-driven expansion, and beyond only capital market support. The real economy or at least the public sector spending has been squeezed ie in recession and austerity; while financial markets and real estate and other selected sectors of the economy (military spending) have been taxpayer supported and still surviving. Once the directed will is there the way to a “sustainable new paradigm of economics” is possible.

The drivers for the new paradigm of sustainable economics; certainly a shift away from the current #neoliberal agenda are numerous:

a) stagnation state of trade and commerce in traditional sectors (eg fossil fuel energy exploration and production. Traditional industries hit i.e. Nasdaq outpacing Dow and Standard and Poor benchmarks of future corporate  valuations)

  

b) much needed overhaul in E.S.G principles (eg combatting systemic corporate corruption; Steven Cohen of leading hedge fund famously paid US$2 bn to settle with the US Governments and agents etc)

 

c) excessive public private and corporate debt and eventual need for debt destruction eg USA National Debtis US$ 19.5 Trillion now (Source: http://www.usdebtclock.org/)

The illustrious manager of Pimco’s bonds funds, Mr William Gross, stated that on a long-term basis, governments are likely to use financial repression, where the rate of inflation is higher than bond yields, to erode the value of sovereign debt over time. The late Barton Biggs, Morgan stanley strategist also stated in Mid-2011 that debt devaluation is less painful than debt destruction as a long-term course. (Source FPM; Bloomberg - 2011)

d) public-policy led geopolitical agendas (eg competitive foreign exchange devaluations; nationalism spurning #globalisation – eg “Brexit”; et al)

e) climate change concerns changes everything ("redundant assets" i.e. oil reserves reported in oil company stock valuations)

f) loss of trust in politics spawning alternative leadership and policy direction (e.g. Trump in US, Corbyn in UK; etc)

g) An Olympian ideal of greatness which can only be locally inspired while thinking global. Brazil Rio 2016 Olympics about national pride for us in London #claphamCommonm #ProudBrit via #Brexit. 'Brits' were and are worldly without subscribing to clubs of nonsense to with pretext to unite nations (Once upon a time British Knights supported Teutonic German comrades to "crusade" Christianity! How did that turn out?). A little Britain just finished 2nd in the Olympic medal table. 

Post Brexit Britain - All Change

New models of capitalism or just simply the reversing of corrupt crony capitalism is the prospect from the British people voting to leave the European Union, known as "Brexit".



In Europe there will be a major national bankruptcy. Fund Portfolio Management principal Kristian Siva is joining #IMF and #BIS (Bank of International Settlements) in predicting a crash this year, perhaps October (Italian geopolitics catalyst via elections). The magnitude or severity of downward asset plunge is dependent on the geopolitics step-changes that occurs this year. To be sure #Brexit artifice or consent-manufacturing democratics was a significant sea-change; reverberations of which are taking place in the geopolitical spheres (election of Trump; proxy alliances in the war in Syria etc) , and mutedly so in Pavalovian-dogs' (psychology of classical conditioning) operated capital markets.

Financial market chiefs dislike financial history, but as a reminder: not unlike "PIIGs"-insolvency consequences of the 2007-08 financial crisis, which morphed into Greece and #Grexit demands in 2011, Brexit has ACTUALLY come about on June 23rd, 2016. Ultimately we believe this augurs the demise of the Euro currency via the European Union existentialism question, which has been enduring in economic consciousness pervasively. Yet other geopolitical machinations exist to disrupt and reprice capital assets; assets which are relevantly NOT owned by the 99%. Though in an indirect way long-term savers e.g. pension-savers, and capital investors in stocks and bonds, will see some modest loss of wealth. We believe stock or equity market assets to be impacted by multitudinous debt writedown... 

To Be Continued.

Reading List:

A third of global government debt now has negative interest rates

Globalists Are Now Openly New World Order Centralization

Are Investors Really Out There: #Brexit & Siva

The title of this post is a reference to our exposition “The Search forAlpha: Soros of the Euro?”, way back in October 2011. Below is the extract from the opening paragraph:

“We know hedge fund managers are out there but are they "really out there", say with a macro play to break-up the Eurozone's common currency the Euro? Like the one George Soros spearheaded causing the exit of the British Sterling from the European Exchange Rate Mechanism in 1992?”

The title of this post is also a play on the theme with “Siva” being the “Soros” of Euro breakup vanguard. FPM bases it fundamental view, held since the EU inception, on the fact that the capital markets, particularly “forex trading” lost a swathe of business from foreign-exchange trading. This happened with the elimination of Francs, Deutschmarks, Lira, Pesetas, Guilder etc when a new Union currency was hypothesised and eventually introduced in 1999. This represented a radical shift in the geopolitics tectonic-plates of European national sovereignty; an identity which has been at the heart of an  advanced economic society of the last 200 years, since and before the industrial revolution. 

To put the European Union project in a relative context for comparison, the tectonic-plate shift would be akin to, for example, the South East Asian region being regulated towards consolidation  or unification of their numerous car manufacturers. Loss of car firms instead of  the EU currencies is the comparative. The disappearance of car manufacturers in just two of the major economies of the region would represent a seismic  loss of business. Considering just Japan and South Korea,  the following list is  only some of the car companies, that would disappear: Toyota, Honda, Hyundai, Kia, Daewoo, Daihatsu, Nissan, Mazda etc. Perhaps these companies are replaced by one or two regional mega car manufacturers. 

That comparative example would see national car companies  disappear to leave one large regional conglomerate and loss of car manufacturing business in some countries. While those countries retaining the less-is-more car-production facilities in the region may benefit from the mergers and acquisition in the automotive sector.  Arguably, whether theories of monopoly businesses eliminating wasteful competition, or a degree of  competing oligopoly business model etc, prevails is left to impotent academic economists. FPM principals in their practical and studied considerations suggest these corporate M+A, and similar social unification have its profound rationale in geopolitic and realpolitik - not mere commercial sense. This is really the issue for in this changing  mileu, which FPM is developing to a crest through its triumvirate enterprises (convergence, no smoke without fire: of reputation and M+A in alternatives).

Back to the case in point: winding-time forward from inception of the Eurozone of countries adopting the common currency, and we have K Kristian Siva, principal of FPM, uncompromisingly and absolutely speculatively promoting  the raison d'etre of the thin-end-of-wedge European Union project, as it is now and what it implies. This one-size-fits-all regional entity therefore occasionally casts doubts about the existentialism of the representative Euro currency. FPM  does not believe it is wholly an existentialism crisis for the Union project at this stage; more that the mainstream media narrative is used as rhetorical tool to instigate capital market devaluation of the Euro currency. This is indeed in keeping with global sovereign currency devaluations taking place. Devaluation maintains national competitiveness in global trade i.e. imports become expensive and exports cheap, and viceaversa . The exchange rate of a national currency determines health of an economy relative to others. Depreciation of national exchange rate have been   taken in turns by China, Switzerland, EU and Japan over recent years. Among these sovereign currency super-powers, there is indeed “Currency Wars” which are preceded by the “Trade Wars”. STOP THE PRESS!

US slaps China steel imports with fivefold tax increase - BBC.CO.UK 18 May 2016

Whatever scenario unfolds, just as in 1992 when the British pound exited the Exchange Rate Mechanism - ERM, a forerunner to the Euro currency (and hence why FPM and other foresighted experts describe the EU project as being implemented through  thin-end-of-wedge policies towards ultimate Federalism of Europe), the British are again central to the plans for homogenization of distinct European countries. The EU project has been in the making since 1953 when 6  European countries were inaugral members, through the Treaty of Rome, or some other grandiose "conflab" event. This time round the British citizenry are not represented by the Government making decisions about being part of the EU block, but relevantly by a democratic voting referendum of the people. It was then the Conservative alias Tory government under the lead of UK Prime Minister John Major after Margaret Thatcher's epochal innovations that forced exit from Euro project.

This time round it is the British people who decide whether it has been good FOR THEM over the last nearly-40 years since 1977, when EU and Milton Friedman school of capitalism / economics came to the fore. also to the fore came  “realpolitic” by Morgenthau, espoused by uber internationalist Henry Kissinger.

"Some good, some bad!” is what most people will say with personal relevance about the EU. But economically and in investment terms that era has left exponentially big national sovereign debts. A debt which the citizenry ultimately pays for through loss of municipal amenities and through greater taxation. To a point of catastrophic credit crisis, viz Greece played out as a microcosm of many many other countries' impending crisis. Some perspicaciously blame a model of the world, which is based on debt servitude and lacking idealism, on the moneylenders' creed. 

Robert Schuman (one of the founders of the EU) warned in 1963 that political counterfeiters were already undermining European democracy.

   
A people vote for Britain to exit (#Brexit) the European Union in the EU referendum (#EUref) on June 23^rd, 2016 by indigenous Britons, as opposed to unnaturalised UK citizens from Europe and other places over the decades, begins to unwind the first pillar of globalisation, which is rapidly heading  towards an "Orwellian 1984" New World Order. A one world government  ambition  which we as a global citizenry are most definitely currently  disastrously heading towards. The unwinding of the EU project, first and foremost, would damage the international capitalists from their hegemonic megalomaniac machination for the global population. An elitist ambition which has produced decade-long future austerity, sell-off of national assets and global wars, as well as greatest wealth inequality in populations. And Climate Change!

FPM's recommended  short play on the Euro versus the Dollar via an Exchange Traded Fund - ETF is ETFS 3x Short EUR Long USD (SEU3).

And as pictures speak a thousand words, below the ETF's is the performance over 5-years  and the past 1-Year is juxtaposed:

To Be Continued (only if you don't geddit yet idiot Brit!)