Paul Craig Roberts Roars "Rigged Elections Are An American Tradition"

Authored by Paul Craig Roberts,
Do Americans have a memory? I sometimes wonder.
It is an obvious fact that the oligarchic One Percent have anointed Hillary, despite her myriad problems to be President of the US. There are reports that her staff are already moving into their White House offices. This much confidence before the vote does suggest that the skids have been greased.
The current cause celebre against Trump is his conditional statement that he might not accept the election results if they appear to have been rigged. The presstitutes immediately jumped on him for “discrediting American democracy” and for “breaking American tradition of accepting the people’s will.”
What nonsense! Stolen elections are the American tradition. Elections are stolen at every level—state, local, and federal. Chicago Mayor Richard J. Daley’s theft of the Chicago and, thereby, Illinois vote for John F. Kennedy is legendary. The Republican US Supreme Court’s theft of the 2000 presidential election from Al Gore by preventing the Florida vote recount is another legendary example. The discrepancies between exit polls and the vote count of the secretly programmed electronic voting machines that have no paper trails are also legendary.
So what’s the big deal about Trump’s suspicion of election rigging?
The black civil rights movement has fought vote rigging for decades. The rigging takes place in a number of ways. Blacks simply can’t get registered to vote. If they do get registered, there are few polling places in their districts. And so on. After decades of struggle it is impossible that there are any blacks who are not aware of how hard it can be for them to vote. Yet, I heard on the presstitute radio network, NPR, Hillary’s Uncle Toms saying how awful it was that Trump had cast aspersion on the credibility of American election results.
I also heard a NPR announcer suggest that Russia had not only hacked Hillary’s emails, but also had altered them in order to make incriminating documents out of harmless emails.
The presstitutes have gone all out to demonize both Trump and any mention of election rigging, because they know for a fact that the election will be stolen and that they will have the job of covering up the theft.
Don’t believe the polls that say Hillary won the Q&A sessions or the polls that say Hillary is ahead in the election. Pollsters work for political organizations. If pollsters produce unwelcome results, they don’t have any customers. The desired results are that Hillary wins.
The purpose of the rigged polls showing her to be ahead is to discourage Trump supporters from voting.
Don’t vote early. The purpose of early voting is to show the One Percent how the vote is shaping up. From this information, the oligarchs learn how to program the electronic machines in order to elect the candidate that they want.

Source: Zerohedge – Paul Craig Roberts Roars "Rigged Elections Are An American Tradition"

GOP Sues Pennsylvania Over "Poll Watcher" Restrictions

Pennsylvania has become ground zero for “election rigging” concerns over the past two election cycles.  In 2012, Romney’s performance in Philadelphia drew a huge amount of suspicion when he received exactly 0 votes in 59 voting divisions within the city.  In fact, the vote count within those 59 divisions was an astonishing 19,605 to 0.  While no one would argue that many Philadelphia neighborhoods tend to skew democratic, it certainly seems incredibly unlikely that, out of nearly 20,000 voters, not a single person preferred Mitt Romney. 
Of course, the city also drew heavy criticism after the Black Panthers sent “security” to stand outside numerous polling stations with clubs.  Sure, no voter intimidation there.

 
So it should come as little surprise that the GOP recently filed a lawsuit seeking additional oversight of polling stations in Pennsylvania.  According to the Washington Examiner, the GOP is specifically looking to lift restrictions that prevent poll watchers from serving in any county outside of their specific county of residence.     

Pennsylvania’s Republican Party wants to overturn a court order that restricts who can volunteer as poll watchers.
 
The GOP wants to overturn a declaratory judgment that would restrict poll watchers from serving only in their county of residence, according to the lawsuit. The lawsuit comes as GOP nominee Donald Trump has pushed for poll watchers in Pennsylvania, saying that his supporters need to go to “certain areas and watch.”
 
The suit also takes aim at the Democratic stronghold of Philadelphia County, where Republicans are “not a majority of registered voters.”
 
The lawsuit charges the order made by a lower court judge violates the U.S. Constitution, specifically the rights to due process and equal protection as voting is a fundamental right.
 
“The Pennsylvania poll watcher statute arbitrarily and unreasonably distinguishes between voters within the same electoral district by allowing some, but not others, to serve as poll watchers,” the lawsuit said.
 
The lawsuit also questions the integrity of the vote, and says Philadelphia County routinely handicaps the party from “fully and fairly staff polling places with poll watchers.”

Of course, many districts in Philadelphia enjoyed unprecedented voter turnout in 2008 and 2012 in support of President Obama.  That said, the real question is whether the Hillary political machine will be able to drive the same level of enthusiasm in the 2016 election. 

Source: Zerohedge – GOP Sues Pennsylvania Over "Poll Watcher" Restrictions

The Crook Versus The Monster

Thanks to timely assists from Wikileaks, Trump has successfully framed Hillary Clinton as a crooked politician. Meanwhile, Clinton has successfully framed Trump as a dangerous monster. If the mainstream polls are accurate, voters prefer the crook to the monster. That makes sense because a crook might steal your wallet but the monster could kill you.
As of today, Dilbert Creator Scott Adams writes, Clinton has the superior persuasion strategy. Crook beats monster.
Reality isn’t a factor in this election, as per usual. If the truth mattered, voters might care that the Democratic primaries were rigged against Sanders. They might care that the Clinton Foundation looks like a pay-to-play scheme. They might care that the FBI gave Clinton a free pass. They might care that we know Clinton cheated in at least one debate by getting a question in advance. They might care that Clinton’s dirty-tricks people incited the violence at Trump rallies. They might care that Clinton’s “speaking fees” were curiously high. They might care about all of that. But they don’t, because a crook is still a safer choice than a monster.
The biggest illusion this election is that we think the people on the other side can’t see the warts on their own candidate. But I think they do.
Clinton supporters know she is crooked, but I think they assume it is a normal degree of crookedness for an American politician. Americans assume that even the “good” politicians are trading favors and breaking every rule that is inconvenient to them. I’ve never heard a Clinton supporter defend Clinton as being pure and honest. Her supporters like her despite her crookedness.
 
Likewise, Trump supporters know what they are getting. They know he’s offensive. They know he’s under-informed on policies. They know he pays as little in taxes as possible. They know he uses bankruptcy laws when needed. They know he ignores facts that are inconvenient to his message. They just don’t care. They want to push the monster into Washington D.C., close the door, and let him break everything that needs to be broken. Demolition is usually the first step of building something new. And Trump also knows how to build things when he isn’t in monster mode.

Clinton’s team of persuaders have successfully crafted Trump’s offensive language and hyperbole into an illusion that he’s a sexist/racist in some special way that is different from the average citizen. The reality is that everyone is a little bit sexist and a little bit racist. We’re all wired that way. There’s no escape if you are human. Our brains are pattern-recognition machines, but not good ones. That’s what gets us in trouble. We see patterns where none exist. None of us are exempt from that. But we can use our limited sense of reason to see past it. 
Clinton’s persuaders have taken advantage of the public’s faulty pattern recognition to build an illusion about Trump that he is a horrible monster who hates people because of their genitalia, their skin pigmentation, and their sexual preferences. I don’t believe Trump holds any of those views in 2016. But there is plenty of confirmation bias to make us think he does, thanks to Team Clinton’s persuasion efforts. For example…
There was the time Trump said we need good border control with Mexico, and Clinton turned that into something racist because of the way he worded it.
 
There was the time Trump said we need to try harder to keep out terrorists who want to kill us, and Clinton turned that into something racist because of the way he worded it.
 
There was the time that Trump said a judge with Mexican heritage might be biased against him because 90% of American citizens with Mexican heritage are biased against him. Clinton turned that into something racist because of the way Trump worded it.
 
There was the time that Trump didn’t need much sleep one night and decided to fire off a few thoughts on Twitter about one of his accusers. But because it was late at night, Clinton framed that as some sort of “meltdown” to prove Trump is unstable. 

I realize I can’t change anyone’s mind if they see Trump as a monster who hates people with different genitalia and with skin pigmentation that is far superior to his own pasty-orange covering. To me, those illusions about Trump are ridiculous on face value. I can’t change anyone’s mind if they see Trump as a monster. So instead I will make you a promise.
My promise: If Trump gets elected, and he does anything that looks even slightly Hitler-ish in office, I will join the resistance movement and help kill him. That’s an easy promise to make, and I hope my fellow citizens would use their Second Amendment rights to rise up and help me kill any Hitler-type person who rose to the top job in this country, no matter who it is.
 
As I often say, Democrats generally use guns to commit crimes. Republican use guns for sport and for self-defense. If you are a Republican gun-owner, and you value the principles of the Constitution, I’m confident you would join me in the resistance movement and help kill any leader that exhibited genuine animosity toward people because of their genitalia, sexual preference, or skin pigmentation.

In other words, I’m willing to bet my life that the “monster” view of Trump is an illusion.
That said, I also don’t know which candidate has the best policies. I wouldn’t risk my life for any of their tax plans or ISIS-fighting strategies. I’m only interested in helping the public see past their hallucinations about the monster under the bed. You’re on your own to decide who has the best policies.
Read more here…
*  *  *
If you like books, Adams points out you might like his book because it is a book. Bigly.

Source: Zerohedge – The Crook Versus The Monster

Venezuela Braces For Revolution After Maduro Blocks Recall Referendum

Once a “flagship socialist nation,” Venezuela has suffered over the past couple of years from a dramatic economic crisis that has resulted in severe shortages of food, clean water, electricity, medicines and hospital supplies all of which have resulted in a desperate population which has resorted to the black market and violence for survival.  That said, Venezuela likely inched one step closer to revolution on Friday when Maduro’s leftist government took steps to block a recall referendum that could have resulted in his ouster.  According to the US News and World Report, Venezuelan opposition leaders are calling the efforts of Maduro “a coup” in light of the broad based public support of the recall effort.

Venezuela is bracing for turbulence after the socialist government blocked a presidential recall referendum in a move opposition leaders are calling a coup.
 
The opposition is urging supporters to take to the streets, beginning with a march on a major highway Saturday led by the wives of jailed activists, while a leading government figure is calling for the arrest of high-profile government critics.
 
Polls suggest socialist President Nicolas Maduro would lose a recall vote. But that became a moot issue on Thursday when elections officials issued an order suspending a recall signature drive a week before it was to start.
 
“What we saw yesterday was a coup,” said former presidential candidate Henrique Capriles, who had been the leading champion of the recall effort. “We’ll remain peaceful, but we will not be taken for fools. We must defend our country.”
 
International condemnation was swift. Twelve western hemisphere nations, including the U.S. and even leftist-run governments such as Chile and Uruguay, said in a statement Friday that the suspension of the referendum and travel restrictions on the opposition leadership affects the prospect for dialogue and finding a peaceful solution to the nation’s crisis.

 
The Maduro government has claimed that the recall was halted due to “irregularities in a first-round of signature gathering” though the public, 80% of whom polls suggest supported the recall efforts, aren’t buying it.  Meanwhile, Maduro loyalists are calling for opposition leaders to be imprisoned for attempts to commit election fraud.

Critical television stations have been closed and several leading opposition activists have been imprisoned. The country’s supreme court, packed with government supporters, has endorsed decree powers for Maduro and said he can ignore Congress following a landslide victory for the opposition in legislative elections.
 
The election commission, which has issued a string of pro-government rulings, halted the recall process on grounds of alleged irregularities in a first-round of signature gathering.
 
Polls suggest 80 percent of voters wanted Maduro gone this year, and the electoral council on Tuesday also ordered a delay of about six months in gubernatorial elections that were slated for year-end which the opposition was heavily favored to win. It gave no reason for the delay.
 
Meanwhile, one of his most powerful allies, Diosdado Cabello, said top opposition leaders should be jailed for attempting election fraud. And opposition leaders said a local court blocked eight of their leaders from leaving the country.

Of course, the integrity of “elections” in Venezuela have long been questioned particularly after WikiLeaks posted the following cable linking Hugo Chavez to a mysterious company that came out of nowhere in 2000 and suddenly snatched up major contracts to supply voting machines around the world.  The company, Smartmatic, included a Hugo Chavez campaign adviser on it’s board.  Curiously, according to Gateway Pundit, the company’s board also included Lord Mark Malloch-Brown, a man who served on the board of George Soros’s Open Society Foundations and who was formerly the vice-chairman of Soros’s Investment Funds. 
“Ironically,” shortly after winning a “multi-million” dollar contract to supply these voting machines in Venezuela, Chavez won a landslide victory in the 2004 elections that all but destroyed his political opposition.

 
But, what is perhaps even more disturbing is that Smartmatic has also secured major contracts to supply voting machines for 16 states in the U.S., including key battleground states like Arizona, Colorado, Florida, Michigan, Nevada, Pennsylvania and Virginia. 
Which leaves us with only one thing left to say:

“Those who cast the votes decide nothing.
Those who count the votes decide everything.”
 
-Joseph Stalin

Source: Zerohedge – Venezuela Braces For Revolution After Maduro Blocks Recall Referendum

Universities Ban Politically-Incorrect Halloween Costumes

In a latest measure to create a “safe space” for students, a number of universities have issued “costume protocol,” banning such un-PC Halloween costumes as Arab turbans, feathered Indian headdresses, Japanese Geisha outfits, and Caitlyn Jenner costumes.

As Breitbart's Thomas Williams reports, Brock University in Ontario, Canada, for instance, has set up a website laying out its “Halloween Costume Vetting Protocol,” complete with a list of offending costumes and pictures of inappropriate wear.

In a twisted bit of illogic, the university stated, “In order to create an inclusive and diverse environment, some costumes may be denied.” Apparently, inclusive and diverse here means “if your costume is too diverse, you will not be included.”
 
“If a member of your party is denied entry because of their costume, they will be escorted to a space where they can change or remove the offending item,” according to the protocol. “They will not lose their place in line during this process, and can enter Isaac’s once the costume has been deemed appropriate by team of Isaac’s Bar and Grill Management and Student Justice Centre Staff.”

As one disturbed commenter wrote, “Obey the Thought Police. Welcome to 1984.”
Further south, at the University of Florida, officials have similarly warned students about sporting offensive costumes, once again appealing to “diversity.”
“Some Halloween costumes reinforce stereotypes of particular races, genders, cultures, or religions,” the university noted. “Regardless of intent, these costumes can perpetuate negative stereotypes, causing harm and offense to groups of people.”

In a scathing article in Forbes last spring, the noted historian Paul Johnson called political correctness “one of the most dangerous intellectual afflictions ever to attack mankind.”
PC has “enormous appeal to the semieducated,” Johnson observed, and it “appeals to pseudo-intellectuals everywhere, since it evokes the strong streak of cowardice notable among those wielding academic authority nowadays.”
“Any empty-headed student with a powerful voice can claim someone (never specified) will be ‘hurt’ by a hitherto harmless term, object or activity and be reasonably assured that the dons and professors in charge will show a white feather and do as the student demands,” he said.
“Thus, there isn’t a university campus on either side of the Atlantic that’s not in danger of censorship,” he concluded.
If in spite of all warnings any precious flower happens to be traumatized by a particular costume at the University of Florida, officials have set up an emergency hotline to help soothe anxious spirits.
If you are “troubled by an incident,” the website counseled, “please take advantage of the 7 day a week presence of the U Matter, We Care program,” which includes an email address as well as “a 24/7 counselor in the Counseling and Wellness Center available to speak by phone.”
Not content with coddling the victims of costume abuse, the university is also prepared to punish and reeducate offenders.
The eerily named “Bias Education and Response Team” at the University of Florida is ready to “respond to any reported incidents of bias, to educate those that were involved, and to provide support by connecting those that were impacted to the appropriate services and resources.”
The good news is that there are still plenty of unprotected groups.
At Brock University, the list of “Prohibited Halloween Costumes & Accessories” covers Caitlyn Jenner, Muslims, Geishas, and Native Americans.
Priests, nuns, rabbis, and police officers are still fair game and can be ridiculed at will. Some deep-seated prejudices are just too fun to give up.

Source: Zerohedge – Universities Ban Politically-Incorrect Halloween Costumes

Goldman CEO Blankfein "Supportive" Of Hillary But "Doesn't Want To Hurt Her" By Endorsing

As has been widely reported, in 2013 Hillary Clinton was paid $675,000 for three speeches to Goldman Sachs.  One was delivered on June 4, 2013 at the 2013 IBD CEO Annual Conference at The Inn at Palmetto Bluff in South Carolina, a second one took place on October 24, 2013 at the Goldman Sachs Asset Management AIMS Alternative Investment Symposium, and the last one was delivered on October 29, 2013 at the Goldman Sachs builders and innovators summit.

As we detailed here, the speech transcripts, in their entirety, were revealed for the first time in an email from Tony Carrk, research director at Hillary for America, in an email dated January 23, 2016, and disclosed to the public for the first time ever via some of the latest Wikileak of Podesta emails… including this classic…
Hillary Clinton Said Her Dream Is A Hemispheric Common Market, With Open Trade And Open Markets. 
 
“My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.” [05162013 Remarks to Banco Itau.doc, p. 28]
 
Hillary Clinton Joked That If Lloyd Blankfein Wanted To Run For Office, He Should “Would Leave Goldman Sachs And Start Running A Soup Kitchen Somewhere. “
 
“MR. BLANKFEIN:  I’m saying for myself.             MS. CLINTON:  If you were going to run here is what I would tell you to do —             MR. BLANKFEIN:  Very hypothetical. MS. CLINTON:  I think you would leave Goldman Sachs and start running a soup kitchen somewhere.             MR. BLANKFEIN:  For one thing the stock would go up. MS. CLINTON:  Then you could be a legend in your own time both when you were there and when you left.” [ Speech to Goldman Sachs, 2013 IBD Ceo Annual Conference, 6/4/13]
 
Clinton Joked It’s “Risky” For Her To Speak To A Group Committed To Futures Markets  Given Her Past Whitewater Scandal.
 
"Now, it's always a little bit risky for me to come speak to a group that is committed to the futures markets because — there's a few knowing laughs — many years ago, I actually traded in the futures markets. I mean, this was so long ago, it was before computers were invented, I think. And I worked with a group of like-minded friends and associates who traded in pork bellies and cotton and other such things, and I did pretty well. I invested about a thousand dollars and traded up to about a hundred thousand. And then my daughter was born, and I just didn't think I had enough time or mental space to figure out anything having to do with trading other than trading time with my daughter for time with the rest of my life. So I got out, and I thought that would be the end of it.” [Remarks to CME Group, 11/18/13]

However, in an interview that will air Sunday on CNN's "Fareed Zakaria GPS", Lloyd Blankfein, chief executive officer of Goldman Sachs, confidently declared that Hillary Clinton didn't say “anything untoward” in her appearances.
Until now, Blankfein had shied away from publicly backing a presidential candidate this year, saying his support could harm that person's chances, but, as Bloomberg reports, when asked if he personally supports and admires Democrat Hillary Clinton, said that he did…
“I’m supportive of Hillary Clinton,” Blankfein said, according to a transcript provided by the network. “Yes, so flat out, yes, I do. That doesn’t say that I agree with all of her policies. I don’t. And that doesn’t say that I adopt everything that she’s done in her political career or has suggested that she might do going forward.”
 
During her 2008 campaign, before investigations into Goldman’s sales of toxic mortgage securities turned Blankfein into one of the faces of the U.S. financial crisis, the executive held a fundraiser for Clinton. In the latest interview he admired her willingness to work with Republicans when she represented New York as a senator.
 
“She could cross the aisle and engage other people to get things done,” Blankfein, 62, said on CNN. “That willingness to engage is a scarcer commodity these days.”
 
Bank executives have been hesitant to wade into politics this election season. JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon on Oct. 17 offered a read-between-the-lines prediction that Clinton would win, drawing applause by referring to the next president as “she” at a conference. Blankfein was asked about the election in an interview in February and declined to take sides at that time. “I don’t want to help or hurt anybody by giving them an endorsement,” he told CNBC.

In the wide-ranging CNN interview, Blankfein also said the U.S. economy, despite a “tepid” rate of growth and DNC Chair Brazile's private comments that the real economy is a disaster, has a “lot of advantages,” including the extent to which consumers have de-leveraged since the 2008-09 financial crisis, and a sound banking system.
“The sentiment is a lot worse than the economy,” he said, speaking about “a more generalized anxiety” evident in the 2016 political season.
 
"I’m not minimizing the consequence to people who should have — who feel their jobs should be higher paid, and legitimately so, and the legitimate issues about minimum wages,” Blankfein said. “But at the end of the day, these problems always existed to some extent.”
 
Speaking about financial regulation, Blankfein said that the rules in place now are strict, and that his biggest fear is that the potential misconduct of a rogue employee will be attributed to him and the bank as a whole.

Finally Blankfein seemed to defend his apparent 'stay out of jail free card' by explaining that some financial misconduct isn’t intentional enough to be a crime.
“To be punished the way people are saying they should be punished, you still have to find some kind of a criminal intent,” Blankfein said. “If you’re merely wrong and you didn’t get it right, it’s hard to ascribe criminality.”

Faux ignorance, once again, it seems is a good enough defense for Secretaries of State, Presidents, and bank CEOs.
But to be frank, we are mainly wondering why all of a sudden  – 3 weeks before the election – Blankfein would go public with – implicitly – Wall Street's endorsement? Is the real deep state concerned about her?

Source: Zerohedge – Goldman CEO Blankfein "Supportive" Of Hillary But "Doesn't Want To Hurt Her" By Endorsing

Want To Boost Market Liquidity? Just Let It Rain… No Really

Last December, when we alerted readers to the shift in the “laser” tower at the “New York” Stock Exchange located in Mahwah, NJ…
 

… we wondered, rhetorically, “what would happen if one flies, say, a drone in front of one or all of those lasers during, say, peak market hours or, heaven forbid, just a few milliseconds before the Fed announces its next “most important ever” policy decision.”
We now have an answer, and it confirms what we have said all along since 2009 when we warned that the confluence of HFT and central bankers nationalizing markets, would destroy not only capital markets, but price discovery (and lead to such amusing Bloomberg articles as “Hedge Fund Managers Struggle to Master Their Miserable New World”).
In a fascinating study carried out by Andriy Shkilko and Konstantin Sokolov of Wilfrid Laurier University, the duo tried to answer one question:

“In modern markets, trading firms spend generously to gain a speed advantage over their rivals. The marketplace that results from this rivalry is characterized by speed differentials, whereby some traders are faster than others. Is such a marketplace optimal?”

Said otherwise, is an HFT-dominated market the best possible outcome, or – as the WSJ put it – “can a rainstorm in Cleveland make markets more liquid?” and if not, what are the alternatives?
The thesis is simple: since high frequency traders use ultrafast links to relay prices and other information between Chicago and New York, using either microwave or laser signals, one theory that can be empirically tested is what happens when the ultrafast signal is impaired due to weather.
To be sure, we live in an age when market tiering has never been as vast as it is now, with some HFT traders enjoying access to the fastest, laser-based, trading technologies; others – less fortunate ones – still use microwaves; and virtually everyone else (including the poorest HFTs) resorting to fiber optics, which while slowest, is also the most dependable and is not impacted by such “outlier” events as heavy rain, thunderstorms or snow.

So, since microwave transmissions are disrupted by water droplets and snowflakes, during heavy storms traders using the networks switch to fiber. This is what Shkilko and Sokolov used to test their hypothesis: using weather-station data from along the microwaves’ paths, they determined when storms occurred and then looked at what happened to bid-ask spreads in a variety of securities during those periods.

In other words, the two academics set out to find: whether, or rather weather HFTs loss of trading superiority has an impact on the overall market, and if so, what is it. As they write “to answer this question, we study a series of exogenous weather-related episodes that temporarily remove speed advantages of the fastest traders by disrupting their microwave networks.”

Their finding is stunning:

“During episodes [of heavy rain and snow], adverse selection declines accompanied by improved liquidity and reduced volatility. Liquidity improvement is larger than the decline in adverse selection consistent with the emergence of latent liquidity and enhanced competition among liquidity suppliers. The results are confirmed in an event-study setting, whereby a new business model adopted by one of the technology providers reduces speed differentials among traders, resulting in liquidity improvements.”

As for the conclusion, it is a blow to HFT advocates everywhere: the slowing down of the fastest high-frequency traders improved market liquidity.
This is how they put it:

This study examines the effects of speed differentials on liquidity. During our sample period, microwave networks stretched from Chicago to New York allow for the fastest information transmission and are only available to select trading firms. When it rains or snows in the area between the two cities, the networks are disrupted because rain droplets and snowflakes block the microwave paths. With the networks temporarily down, information transmission falls back onto the fiber-optic cable – a more reliable, yet slower transmission medium – effectively eliminating the speed advantages of the fastest traders. We show that when this happens, adverse selection and trading costs decline. This result is consistent with predictions of theory models that show that speed differentials among traders may be associated with lower liquidity.

That, in itself, is an amazing observation: that the more tiered and fragmented the market, the less liquidity, as not only do HFTs not provide liquidity, but soak it up, but also that those who traditionally provide liquidity, such as a conventional market makers, refuse to do so in a time when microwave (and laser)-based HFT scalpers and parasites are present, resulting in a market with no depth. 
The conclusion continues:

The results shed light on latent liquidity. We show that when speed differentials among traders decline due to precipitation, the emergence of latent liquidity narrows spreads more than one would expect based only on the decline in adverse selection. We also find that in assets where spread reductions are not possible due to the binding tick size, latent liquidity improves quoted depths.
 
Our results are confirmed in an event-study setting. In winter of 2012-2013, one of the technology providers democratized microwave transmissions by introducing a new business model. Instead of selling bandwidth on its network, the firm began selling information on both sides of the Chicago-New York corridor. This one-time event had positive consequences for market quality similar to precipitation-related network disruptions. This result further supports the claim that the technological race that leads to a market with speed differentials may be suboptimal for market quality.
 
The technological race continues to drive spending in the trading industry. A recent example is a new data transmission tower proposed by the telecommunications company Vigilant Global to connect the U.K. and European markets. The tower will be among the tallest structures in the U.K. and will rival the height of the Eiffel Tower. It will provide trading firms with a completely unobstructed optical and radio line of sight, never previously offered in Europe, increasing signal transmission speed. In the meantime, traders in the U.S. have been switching from microwave transmissions to more reliable, yet costly, laser links. Our findings shed light on the possible consequences of these developments.

Another way of putting it: heavy rainfall literally adds to market liquidity, for one simple reason: it reduces the overall adverse influence of HFTs, predating market orders, and soaking up what little liquidity is left.
The implications are fascinating: if one were so inclined, the market could once again return to its more stable, “liquid” state if HFTs – which it has now been showned definitively do not provide or in any way add to market liquidity – were eliminated. Alternatively, if one were so inclined, tearing down the microwave towers linking Chicago to NJ and NYC, would achieve the same effect. Which, of course, should not be interpreted as call to arms against microwave – or laser – towers in order to restore normalcy to the market. After all, even if one eliminates HFTs, there are still central bankers whose impact on markets is just as dire and profound.
* * *
The source “Every cloud has a silver lining: Fast trading, microwave connectivity and trading costs” can be found here.

Source: Zerohedge – Want To Boost Market Liquidity? Just Let It Rain… No Really

China Moves Forward With Its De-Dollarization Strategy

Submitted by Stefan Gleason via The Mises Institute,
The world monetary order is changing. Slowly but steadily, global trade and currency markets are becoming less dollar-centric. Formerly marginal currencies such as the Chinese yuan now stand to become serious competitors to U.S. dollar dominance.
Could gold also begin to emerge as a leading currency in world trade? Over time, it certainly could. But the more immediate implications for gold’s monetary role center on its increasing accumulation by central banks such as China’s.
As of October 1st, the Chinese yuan has entered the International Monetary Fund’s Special Drawing Right (SDR) basket of top-tier currencies. It now shares SDR status with the U.S. dollar, euro, British pound, and Japanese yen.
Before the yuan officially becomes an SDR currency, the World Bank intends to sell $2.8 billion in SDR bonds in Chinese markets. The rollout of SDR bonds in China began August 31st. According to Reuters, China’s promotion of SDR bonds “is part of a wider push in China to… boost demand for Chinese yuan and diminish reliance on the U.S. dollar in global reserves.”
King Dollar won’t be dethroned overnight. But the place of prominence the U.S. dollar enjoys as the world's reserve currency will indeed diminish over time.

Source: The Burning Platform
 
Yuan’s Inclusion in the SDR Currency Basket: Merely a Part of China’s De-Dollarization Strategy
China and Russia have mutual geostrategic interests in helping to promote de-dollarization. Toward that end, the two powers are engaging in bilateral trade deals that bypass the dollar. Annual bilateral trade between China and Russia has surged from $16 billion in 2003 to nearly $100 billion today. When China hosted the G20 summit in September, it will make Russian President Vladimir Putin its premier guest of honor.
U.S. officials are none too pleased. They fear Putin aims to expand his global reach by forging stronger ties with China.
According to the South China Post, “Some Western analysts have viewed the recent, rapid enhancement of such collaboration as the beginning of a partnership set on destabilizing the U.S.-led world order and diminishing Washington’s capacity to influence strategic outcomes.”
Some in the Hillary Clinton campaign even fear that Russia will interfere in the upcoming U.S. election to try to block Hillary’s path to the White House. Russian hackers have been implicated in a number of recent “leaks” that damaged the reputations of U.S. banks and the Obama administration. Wikileaks founder Julian Assange has hinted at further releases. Hillary’s allies openly speculate that these Wikileaks hacks are being sourced from Russia.
But the Russians and the Chinese aren’t counting on cyber warfare to dethrone King Dollar. In addition to bilateral trade deals and strategic plays for regional economic dominance, the two powers are bulking up on gold. Over the past several years, Russia and China have each been adding massively to their gold holdings.
World’s Central Banks Becoming Net Gold Buyers
Since 2009, China’s officially reported gold holdings have jumped by 60%. The enlarged gold stockpiles held by the People’s Bank of China helped China win ascension into the IMF’s elite SDR currency basket.
It’s part of a larger trend of world central banks becoming net gold buyers. They were net sellers throughout much of the 1990s and early 2000s. That helped keep gold prices suppressed. But since 2010, central banks have been net buyers of gold — to the tune of 500 tons per year.
Russia alone added 172 tons of gold in 2014 and 208 tons in 2015. By swapping some of its U.S. Treasury securities for bullion bars, the Russian central bank has become the world’s seventh largest gold holder. Yet gold makes up just 16.2% of Russia’s monetary reserves, which is a lower proportion held by its Eurozone neighbors.
Russia likely isn’t done accumulating. As the world’s third largest gold producer, Russia can readily supply itself with more.
A similar scenario figures to play out in China, perhaps even more dramatically so. China’s “official” gold hoard of 1,823 tons as of August 2016 gives it the world’s sixth biggest gold reserve. Yet relative to the size of China’s economy and currency supply, its gold stash doesn’t amount to much — just 2.3% of total monetary reserves.
Unofficially, China likely has additional gold reserves that it doesn’t report. But even if China’s real gold stash is double or triple what it actually reports, as some analysts suggest, that still leaves the country of 1.3 billion people with far less gold backing than Russia, the United States, Europe, and some of its Asian rivals. China has a lot more gold accumulating to do in the years ahead.
Chinese leaders aim to be regionally dominant. In order to secure that position they are moving to own and control greater shares of the gold market. The recently opened Shanghai Gold Exchange gives China a direct mechanism for controlling the physical gold market in Asia.
It’s a way for China to take at least some control away from Western governments and banks that have traditionally dominated the gold trade out of London and New York.

Source: Zerohedge – China Moves Forward With Its De-Dollarization Strategy

BullionStar attends LBMA Conference in Singapore, October 2016

Introduction
This year, the well-known annual conference of the London Bullion Market Association (LBMA) was held in Singapore between Sunday 16 October and Tuesday 18 October at the impressive Shangri-La Hotel. The conference attracts delegates and speakers from across the world of bullion, with representatives from precious metals refiners, mints, bullion banks, brokers, trading and technology providers, bullion dealers and bullion wholesalers. This year over 700 delegates attended.
The main speaker sessions, presentation and panel sessions of industry representatives ran over two days, between Monday 17 October and Tuesday 18 October. Topics covered in the speaker sessions were numerous and varied and included the bullion market in China, developments in the Indian gold market, responsible gold guidance, LBMA updates and developments, a dedicated session on platinum group metals, and a session on the financing of refineries.
As interesting as the speaker sessions and presentations are, many of the conference attendees use at least some of their time at the LBMA conference to engage in meetings with each other on the sidelines. This explains the constant stream of small breakout meetings that took place in the hotel lobby's seating areas, as well as in dedicated meeting rooms around the hotel. BullionStar also used the occasion to meet with existing suppliers from the refining, minting and wholesaling world, as well as to discuss potential business opportunities with new suppliers.
There were also approximately 20 exhibitor stands at the conference, including stands hosted by CME Group, Brinks, the World Gold Council, IE Singapore (Singapore's trade development authority), Istanbul Gold Refinery (IGR), Metals Focus consultancy, Cinnober, and Nadir Refinery.

Singapore – Central Business District, Skyline
Hong Kong – Shenzhen Gold Connect
On the Sunday prior to the conference, the Chinese Gold and Silver Exchange (CGSE) and the Singapore Bullion Market Association (SBMA) co-hosted a pre-conference presentation titled “Building a physical gold corridor in Asia: Shanghai – Hong Kong / Qianhai – Singapore”, at the hotel, which featured a series of discussions about the CGSE’s new gold trading and vaulting project located in the Shenzhen free trade zone at Qianhai, just across the border from Hong Kong.
Haywood Cheung, Permanent President of CGSE, gave an introductory overview of the Qianhai project, showcasing it as part of China’s “One Belt, One Road” plan, after which Dong Feng, Ping An Commodities Trading in Shenzhen presented a detailed explanation of how the linkages between the CGSE’s trading platform in Hong Kong and Qianhai’s clearing and settlement will for the first time enable the trading of both onshore and offshore Renminbi and the trading of onshore and offshore gold. The Qianhai project integrates trading, clearing, settlement and vaulting, with a 1500 tonne capacity vault, and a trading hall. ICBC will provide settlement of both onshore (Shenzhen) and offshore (Macau) Renminbi as well as providing use of its Shenzhen gold vault (onshore gold settlement) until the CGSE Qianhai vault is completed.
This onshore and offshore trading and settlement of Yuan and physical gold will facilitate arbitrage trading, and is another step in China’s liberalisation of its currency and its gold market as it links the Chinese currency to physical settlement of gold inside and outside of China. This initiative is one to watch and will demonstrate the Chinese government’s gradual easing of cross-border restrictions on currency and gold flow. Next phase gold trading in Qianhai by CGSE member companies will commence on 7 December.
With the CGSE having already established a gold trading link with the Shanghai Gold Exchange (SGE) though its Shanghai-Hong Kong Connect, and with the Shenzhen (Qianhai) – Hong Kong Connect now coming on stream, the CGSE is also planning a Singapore – Hong Kong Connect, and a Dubai – Hong Kong Connect, which, if they materialise, will extend physical gold corridor (trading and vaulting connections) across the Asian region and beyond.
Albert Cheng, CEO of the SBMA, wrapped up the afternoon with an overview presentation of SBMA’s aspirations to evolve Singapore into a bullion market hub for the entire ASEAN region, including countries such as Indonesia, Vietnam and Myanmar. However, details of how this plan will be implemented were not addressed. Cheng also showcased the SGX gold contract which is backed by the SBMA, but which has yet to take off despite being launched over 2 years ago.
LMEprecious gold Futures
The first event we attended on Monday was an early morning presentation by the London Metal Exchange (LME) about LMEprecious, its new suite of spot, daily, and monthly gold and silver futures contracts to be launched in the first half of 2017, that will trade on LME’s trading platform, with market-making offered by 5 investment banks such as Goldman Sachs and ICBC Standard Bank. These futures are for delivery of unallocated metal in the London market and the contracts will still clear through the London bullion market's LPMCL unallocated bullion clearing system. In time, the LME plans to launch platinum and palladium futures contracts on LMEprecious, as well as options contracts on all 4 metals. The LMEprecious platform will also link into LBMA’s planned trade reporting system.
ICE gold Futures
On Monday morning, ICE Benchmark Administration (IBA), a direct competitor to LME in the precious metals trading and clearing space, used the LBMA conference to make a very well-timed announcement that it too will be launching a new gold futures contract for delivery of unallocated gold in London (loco London). The ICE contract will trade on the ICE US futures platform and will begin trading in February 2017, in advance of the LME contracts. This contract is being designed to be compatible for settlement within the LBMA Gold Price auction which IBA administers in London, and it will, according to IBA, allow the introduction of central clearing into the auctions, and thus facilitate wider auction participation. Currently,the direct auction is exclusively open  to a handful of large banks that have large bi-lateral credit lines with each other. At this stage it’s unclear how the connections between the futures contract and the LBMA Gold Price auction will work, but BullionStar plans to examine this development in future coverage.

Shangri-La Hotel, Singapore
Unallocated Gold, Gold Lending and Central Banks
Given that the LBMA Conference is attended by dozens and dozens of precious metals refineries and mints, it was notable that the subject of "unallocated gold" cropped up in the discussion of LMEprecious and ICE futures contracts, but that there was no discussion in the actual LBMA conference programme schedule of 'unallocated gold' as the term is used by the LBMA. An unallocated gold position in an account in the London gold market is merely a contractual claim for gold against the bank that the account is held with. As such, it is a synthetic gold position.
It was also odd in our view that there was no seminar or discussion about the London gold lending market within the conference programme. As gold lending is an important and influential area of the London gold market, it affects marginal gold supply, and it has an impact on gold price formation.  Notably, the topic of central bank activities in the gold market was completely ommitted from the conference schedule this year, which was odd given that in previous years there was usually such a session. Have the central bankers involved in the gold market become shy all of a sudden?
Gold price benchmark for Singapore revisited
In another announcement on Monday morning at the conference, the Singapore minister for trade and industry announced that the SBMA in conjunction with the LBMA and ICE Benchmark Administration (IBA), there begin a feasibility study on launching a “pre-AM gold price” auction, which would serve as a benchmark for the Asian region and which would be held at 2pm Singapore time, in advance of the European trading day. This Singapore benchmark was already discussed and announced over 3 years ago, but has put on hold in 2014 due to European regulatory investigations at that time into manipulation of the London Gold Fix.
LBMA Trade Reporting
The conference speaker programme opened on Monday morning with introductory remarks from Lim Hng Kiang, Singapore Minister for Trade and Industry, outgoing LBMA chairman Grant Angwin, incoming newly appointed ChairmanPaul Fisher who recently arrived from the Bank of England, Tim Pearce, the chairman of the London Platinum and Palladium Market (LPPM), and LBMA CEO Ruth Crowell.
The LBMA CEO’s introductory speech touch on the planned launch of trade reporting services for the London Gold Market. This trade reporting contract has been awarded to financial technology providers Cinnober – BOAT Services – Autilla, after those partners won the LBMA’s recent RfP tender which had been launched in October 2015. Ruth Crowell referred to trade reporting as ‘Phase 1’ of a new suite of technology services. Trade reporting  will be launched in Q1 2017, and will, according to the LBMA “demonstrate of the size and liquidity of the market for clients, investors and regulators”. Phase 2 of this project refers to services such as central clearing in the London bullion market.
Further background to the chosen trade reporting solution was provided by Jamie Khurshid, the CEO of BOAT Services. Surprisingly, even though this RfP took the LBMA over 1 year to complete, it will still now require a 'design phase' where BOAT/Cinnober needs to meet with LBMA member firms to discuss the scope of reporting, followed by a period of customisation and configuration of the implementation. Details on what exactly will be reported (the scope) remain sketchy, and since full London gold and silver trade reporting by all participants (including central banks) is not mandatory in a regulatory sense, it remains to be seen to what extent transparency will be improved.  Because if you don't have full mandatory reporting, you don't have transparency. In another related presentation, Sakhila Mirza, LBMA General Counsel stated that trade reporting will apply to loco London spot trades, forwards and options, but that "LBMA and its members retain control over the scope of reporting", which highlights the self-regulatory nature of the reporting, and again may suggest that the trade reporting may not be as granular or have as much informational value as some may think, especially given that central banks will be exempt from trade reporting.
The Shanghai Gold Exchange and Chinese Gold Market
Monday's schedule also included an  informative series of presentations titled "The Bullion Market in China" from an impressive list of experts. Jiao Jinpu, chairman of the Shanghai Gold Exchange (SGE), provided an overview of the latest developments from the SGE, which has a network of 61 vaults across 35 cities in China, and where physical trading volume reached 34,100 tonnes of gold in 2015. Jinpu revealed that the International Board of the SGE (known as SGEI) has, since launch in September 2014, traded 7,838 tonnes of gold, while the daily Shanghai Gold Price auction, only launched in April 2016, has already traded 384 tonnes, worth RMB 105.5 billion, giving it an average daily trading volume of 3.4 tonnes. Jinpu also vindicated BullionStar's estimates of 2015 SGE gold withdrawals, because, in the words of Jinpu, he sits on the SGE tap, and knows exactly how much gold has been withdrawn from the Exchange vaults.
In his speech, Jinpu announced that in the near future, the SGE and other exchanges will begin using the SGE Gold Price benchmark to develop gold price derivative products.

Shanghai Gold Exchange (SGE) Chairman JiaoJinpu
In another notable confirmation, Yang Qing, from the Bank of China, one of China's largest commercial banks involved in the global gold market, responding to a question posed by BullionStar, said that he thinks that in future, the Chinese currency, the Renminbi, should have an element of gold backing.
In what was probably one of the most interesting and revealing presentations from BullionStar's perspective, and which vindicates the extensive research and analysis that BullionStar's precious metals analyst Koos Jansen has done on the Chinese gold market, Matthew Turner from Macquarie Commodities Research in London gave a presentation about how to accurately capture and estimate the total trade flows of gold into China given that China does not publish this data itself.
One of Turner's approaches is to use the trade data of all other countries which do report gold exports to China. This approach reveals that China imported 1626 tonnes of gold in 2015 from a number of countries, primarily Hong Kong, Switzerland, the UK and Australia. Another more elegant Turner approach is to take China's total import figure which it does publish, as well as the summated figures of  all of China's other import categories of data, which China also does publish, and then derive the gold import quantities as the delta.
This approach yields a net gold import figure of 1693 tonnes in 2015. Both of these figures are very close to BullionStar's previously published Chinese gold import data estimates, as calculated by Koos Jansen. Adding 2015 Chinese gold mining production to imports gives total new supply coming into the Chinese market in 2015 in excess of 2000 tonnes, which is over 1000 tonnes higher than consumer gold demand as estimated by consultancies such as GFMS and the World Gold Council.
LBMA and SGE familiar with BullionStar's research
On the Monday evening we attended a dinner hosted by Australia and New Zealand Bank (ANZ) at Singapore’s famous Raffles Hotel. Just after arriving we had the privilege of chatting for a few minutes to Jiao Jinpu, chairman of the Shanghai Gold Exchange (SGE) via his colleague and interpreter Jess Yang, and we highlighted to him BullionStar’s extensive research from Koos Jansen on the China gold market and the SGE, which we were impressed that he was already familiar with. Dinner conservation was interesting and varied as we were seated at a table with representatives of the London Metal Exchange, ICE Benchmark Administration (IBA), the CME Group, GFMS, Metalor Singapore, and the Royal Canadian Mint.
During the conference, we also learned that the LBMA is familiar with BullionStar's research into the London gold market, another confirmation that the analysis that we publish is read widely within the bullion industry.
As the conference wrapped up on the Tuesday afternoon, delegates were asked to forecast what the US Dollar gold price will be this time next year. Audience members submitted their forecasts via a special handheld device in the auditorium, which resulted in an average forecast of US$ 1347.
BullionStar Seminar during LBMA Week
To coincide with the fact that the LBMA conference was located in Singapore this year, BullionStar hosted a number of events at its shop and showroom premises on New Bridge Road, Singapore. On the Saturday prior to the conference,  15 October, BullionStar held a 'meet and greet' morning, where customers and anyone in town for the conference could pop in and chat with BullionStar staff. On Wednesday 19 October, BullionStar held a precious metals seminar in its showroom premises at which BullionStar CEO Torgny Persson and Precious Metals Analyst Ronan Manly presented to an audience on the topics of Bullion Banking, and Transparency vs Secrecy in the gold market, respectively. The presentations and transcripts of the speeches will be published on the BullionStar website in the near future.

Source: Zerohedge – BullionStar attends LBMA Conference in Singapore, October 2016

Police Drones Zapping Suspects with Stun Guns: ‘The Public Is Going to Initially be Alarmed by This’

In a conference room away from the busy San Diego Convention Center floor where law-enforcement officials from around the world perused the latest police technology, a Taser employee showed some police leaders a drone, and discussed how different things could be attached to it, including a camera, a light and a stun gun—a less-lethal weapon that discharges an electric shock.

Source: Blacklistednews – Police Drones Zapping Suspects with Stun Guns: ‘The Public Is Going to Initially be Alarmed by This’