1. Now Inside Hackers Are the Threat

    We’ve all read about cybercrime consisting of expert hacking attacks on consumer information databases. The targets have included major banks and retailers such as Target. The information stolen includes names, addresses, credit card numbers, Social Security numbers, passwords and much more.

    One of the most damaging hacks was a Chinese attack on the U.S. Office of Personnel Management, in which hackers stole personal files on millions of federal employees and government contractors that could allow Chinese intelligence to identify U.S. intelligence operatives, many of whom operate as contractors with nonofficial cover. Now comes an even more dangerous threat.

    As described in this article, data theft is now being conducted not just by outside hackers but by insiders including employees of the victim company. In this example, the incident “involved theft of more than 100 million customer records, 140,000 Social Security numbers and 80,000 linked bank details of Capital One customers.”

    The individual accused of stealing the records was an employee who exploited a flaw in the firewall to steal the information. The usual process is that the party stealing the information tries to sell it to criminal gangs through the dark web and those gangs sell it to other criminals, who can make false purchases or hold the information for ransom from the customer victims.

    No amount of firewalls or scrutiny can prevent this kind of theft. Customers have some statutory protection that comes from the data custodians. Still, it’s just a matter of time before some custodian goes bankrupt, leaving defrauded customers high and dry.

    The only partial recourse for customers is to hold some assets in nondigital forms such as gold, silver, land or natural resources. Those hard assets are unhackable.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

     

  2. Not Only Does the Chinese Government Lie, the Auditors Lie Too

    There’s nothing new about official Chinese lies. China made commitments to be admitted to the World Trade Organization in 2001 and then proceeded to break every one with illegal subsidies, disregard of WTO rulings and theft of intellectual property.

    China’s GDP is routinely overstated by about 25% because they included wasted “investment” in ghost cities and other dead-on-arrival projects. Some analysts conclude that China’s GDP is even more deceptive and is perhaps only at 3% instead of the over 6% they report.

    None of this comes as any surprise because China is led by an atheistic Communist Party with an “ends justify the means” mentality. In a culture of that type, it’s no surprise that lying and cheating filter down to civil society and professional organizations.

    The latest example is shown in this article. One of the largest auditors in China has been accused of faking client data. The implications of this go beyond the auditor itself and extend to their many clients who have been issuing fake financial statements.

    This scandal has also led to a halt on client IPOs that were using the fake financials to issue stock to unwitting investors. There will be more revelations like this. The entire Chinese financial system is filled with unpayable loans, Ponzi finance and insolvent banks.

    There are plenty of investment opportunities in the world. China should not be on anyone’s list.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

     

  3. California’s Illegal Tricks Are Another Sign Trump Is Heading to Victory

    I do forecasting as a full-time job and use my proprietary Bayesian models (and other applied science techniques) to do it. This is how I was able to predict the U.K. would vote for Brexit in June 2016 and the U.S. would elect Trump in 2016. Polls and pundits said that the U.K. would remain in the EU (70% probability) and Hillary would win (90% probability). My methods produced correct forecasts against all odds in both cases.

    Bayesian models basically start with an assumption that may be not much more than an educated guess. But the assumption is continually updated by testing the conditional probability that new data would or would not arise if the initial assumption were true or false. That can gradually move the original assumption from 50/50 to 90/10, in which case your forecast is on safe ground.

    I’m using that technique again to forecast the 2020 election result. Right now, I have Trump as a winner with a 68% probability. Of course, that could change in either direction.

    One of the data points I search for to update my forecast is evidence that progressive anti-Trump forces have learned anything in 2016. Will they offer policies Americans want (Trump’s odds might go down) or will they do nothing but bash Trump (Trump’s odds go up)? As shown in this article, the evidence is that progressives have learned nothing and will continue on the “bash Trump” path, which helps to ensure Trump’s victory.

    California has passed a law that keeps a candidate off the primary election ballot unless they release their tax returns. This will have no impact on Trump because he’s certain to be nominated and equally certain not to win California in the general election. It’s just a form of blatant political harassment that has never been aimed at another party or candidate.

    The law is probably unconstitutional and will be thrown out by the courts. In the meantime, I’ve updated by Bayesian equation to add weight to the thesis that progressive have learned nothing.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

     

  4. A Climate Change Pot Is Calling the Kettle Black

    A reliable feature of progressive ideological movements is that practitioners eventually turn on each other. That seems to be happening now among climate change alarmists.

    Climate change is a reality. I used to live on Long Island Sound, which was a glacier 10,000 years ago. Today, it’s a nice body of water (with a rocky shore typical of former glaciers) good for sailing, fishing and other water sports. But climate change is relatively slow and is driven by large forces such as solar cycles, volcanoes and other natural phenomena.

    There’s no evidence that C02 has anything to do with climate change. C02 is a trace gas that affects almost nothing, except it’s an essential source of plant food. (Plants “inhale” C02 and “exhale” oxygen.) The best evidence is that we’re in a C02 drought (about 400 parts per million compared with 1,000 parts per million in past periods).

    Alarmist models of correlation between warming and higher amounts of C02 have the causality backward. C02 does not cause warming. Warming causes C02 release through tundra thaws and other channels.

    Warming trends ceased in the late 1990s and sea level increases today are about seven inches per 100 years, hardly noticeable and likely to be reversed. Still, the alarmist climate agenda lives on.

    In this article, the climate alarmist Adair Turner criticizes the climate change moderate William Nordhaus for not being alarmist enough. Turner fails to mention that his models (and Nordhaus’ models, for that matter) are riddled with false assumptions, bad data, inverted causation and erroneous extrapolations.

    Their real agenda is to define a “global problem” so they can advance “global solutions” such as world governance, world taxation and world rule by elites. Beware of wolves in sheep’s clothing and beware of false science dressed up as climate change.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

     

  5. A Central Banker Says Don’t Blame the Central Banks

    Raghuram Rajan is one of the top global monetary elites. He’s a professor at the University of Chicago and at various times has served as governor of the Reserve Bank of India and in senior capacities at the IMF and Bank for International Settlements. He’s what the top elites call “a safe pair of hands,” which means he can be appointed to any one of a number of top positions with no fear of him rocking the boat with heterodox views.

    He just wrote a new article on the role of central banks in the economic recovery since 2009. Guess what? According to Rajan, the central banks have done everything right and fiscal authorities are to blame for weak growth, below-target inflation and other maladies from the weakest economic expansion in over 60 years.

    Rajan is correct when he says that central banks cannot create inflation or stimulate growth. But he runs off the rails when he says that populist politicians (such as Trump, Boris Johnson, Giuseppe Conte and Jair Bolsonaro, whom Rajan disparages) are now threatening central bank independence.

    The causality is the other way around. It is central bank incompetence that has given rise to populism. Central banks should have their powers curtailed and their independence limited. Incompetence has a cost, and in the case of central banks that cost involves exposure of their smokescreen around failure in economic management.

    Central banks are really good for one thing only: being lenders of last resort. All other goals should be repealed. Better yet, maybe we should get rid of central banks entirely.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  6. China: Paper Tiger

    China’s shock currency devaluation last week begs the following questions: Is China a rising giant of the twenty-first century poised to overtake the United States in wealth and military prowess? Or is it a house of cards preparing to implode?

    Conventional wisdom espouses the former. Yet, hard evidence suggests the latter.

    For the rest of this article, click here.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  7. Why China’s a Paper Tiger

    Markets are still digesting last week’s Chinese devaluation that sent the Dow crashing over 700 points last Monday.

    And as everyone knows by now, the Trump administration labeled China a currency manipulator.

    The ironic part of it is that China has been manipulating its currency to strengthen it against the dollar.

    Here’s the dynamic you need to understand…

    Click here to read the rest of this article.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  8. The Swiss Battle to Cheapen the Franc

     

    One of the crucial insights in currency trading that many investors fail to grasp is that currencies don’t go to zero, and they don’t go through the roof. That’s a generalization, but an important one. Here are the qualifications:

    This observation applies to major currencies only — not to currencies of corrupt or incompetent countries like Venezuela or Zimbabwe. Those currencies do go to zero through hyperinflation.

    The observation also applies only in the short-to-intermediate run. In the long run, all fiat currencies also go to zero.

    Yet over a multiyear horizon, major currencies such as the dollar (USD), euro (EUR), yen (JPY), sterling (GBP) and the Swiss franc (CHF) retain value and do not go to extremes. Instead, they trade in ranges against each other. That’s the key to successful foreign exchange trading. Trading profits are the result of catching the turning points.

    Read the rest of this article here.

     

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  9. Globalists Caused the Problem and Now Blame Democracy Itself

    When the U.K. voted for Brexit in June 2016, the globalists were stunned. They couldn’t believe it. They’ve been delaying and fighting Brexit ever since, but it now looks set to occur on Oct. 31.

    Then when Donald Trump won the election as president in November 2016, the globalists were even more stunned. They went into complete denial and have had their heads in the sand ever since.

    Yet it kept getting worse for globalists. Austria elected a conservative nationalist, Sebastian Kurz, as chancellor in 2017. Italy elected enough nationalist Five-Star movement members of Parliament in 2018 to allow them to choose the new prime minister. Conservatives won a recent election in Australia. Both China and Russia have become more nationalistic and completely turned their backs on globalism. What’s going on here?

    Globalists have slowly realized that the nationalist trend is not an anomaly but a powerful force that is reversing globalist polices that have been ascendant since 1989. Free trade is on the ropes, currency wars are rampant and geopolitical hot spots like Iran are becoming more dangerous. What happened to globalism?

    The globalist-in-chief is Columbia University academic Jeffrey D. Sachs. He led the charge for “market” solutions in Russia in the 1990s, which backfired into a takeover by oligarchs and the rise of Putin. He led the charge for “opening” China in the early 2000s, which led to the rise of Xi and the strongest form of Communism since the death of Mao Zedong.

    Is Sachs willing to admit any mistakes? No. As shown in this article, he engages in a delusional rant against Donald Trump (Sachs has no psychological training or credentials) and says the problem is democracy itself.

    Sachs wants to abandon traditional voting in the U.S. and U.K. to create a system more favorable to globalists. Sachs is a typical globalist in denial about his failures. When you don’t like the outcome, just change the rules.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.

  10. Have Stock Prices Ever Been This Inflated? Yes, in 1929 and 2000

    Stocks have enjoyed a great run since the 2018 Christmas Eve Massacre. That one-day meltdown capped a three-month crash of stocks of over 11% from Oct. 1–Dec. 24, 2018. The market turned around on the next trading day, Dec. 26, in the Boxing Day rally and has been going strong ever since.

    The turnaround came because of a pivot by the Federal Reserve. First, the Fed indicated that it would not raise rates for an indefinite period and would give the market advance notice of any future rate increases. This was done by using the world “patient” in a speech by Fed Chair Jay Powell. The market understood that when the word “patient” is removed, rate hikes are back on the table.

    Then by early spring, the Fed went further and indicated it would actually cut rates (which it did on July 31). The Fed also put an early end to quantitative tightening, QT. This amounts to another form of Fed ease.

    But markets are looking for further rate cuts in September like a kid demanding more candy. The market-Fed dynamic is clear as far as it goes. But what about market fundamentals and economic history?

    Here the picture is much less rosy. According to this article, stocks have only been as overpriced as they are today on two prior occasions — 1929 and 2000. The result in 1929 was an 80% crash in major stock markets and the Great Depression. The result in 2000 was an 80% crash in the Nasdaq due to its dot-com listings.

    Stock gains have been driven by earnings, but earnings were boosted by stock buybacks and accounting gimmicks that are running out of steam. The overvaluation metric is computed using the Shiller/CAPE P/E ratio looks at 10-year time series in order to smooth out short-term gimmicks. The CAPE or P/E ratio is 31 today compared with a still-high P/E of 22.5 using more conventional methods.

    The stock market may not crash tomorrow, but it is clearly headed for a slowdown (at best) or a crash (at worst). This is a great time to increase cash and partly diversify out of stocks to bonds and hard assets.

    Institutional investors can schedule a proof of concept with the world’s first predictive data analytics firm combining human and artificial intelligence with complexity science. Check out Jim Rickard’s company at Meraglim Holdings to learn more.