Ingenious Day Trader Scam

This is a crime where you have to think for a bit to figure out who the “victim” is…

A day trading firm who also ran a “virtual trading” platform where folks could practice trade on a market that mirrored the real thing, must have gone through the following thought process:

“Hmmm, we know that greater than 90% of all day traders fail and lose their money. Therefore if we trick them into trading in our virtual account and make them think it’s the real one- we will also have a greater than 90% chance to make money- as in 100% of the losses the traders make will be ours”.

Of course this breaks all kinds of security and ethics laws, but on the surface, it sounds like it could work as long as they didn’t get good traders on board who actually made money. However, they had a plan for this possibility too- any trader that turned out to be good, they then moved them over to the real account to continue.

So their goal was to recruit inexperienced traders with the lure of “getting rich quick”, and have them lose their money, never realizing that they were in a simulated account.

They wound up making over a million dollars in gains before the SEC caught up with them and put an end to their virtual gravy train.

Here’s the story link:  http://dealbreaker.com/2016/12/day-trading-ponzi-adventure/

 

So who is the true victim here?

The easy guess is the trader who is on the virtual account, but the virtual account mirrors the real market so their losses would have been real regardless. A true victim would have been a trader who made a profit and then tried to withdraw their money from a fake account- but so far there’s no report of any such victims, as the firm moved the few “winners” to real accounts and payed them with the money from those losing.

The actual victims turn out to be the exchanges and market makers that buy and sell the actual stocks and investment products. They make money on the difference between the bid and asking price.

A trading firm typically makes money on order flow and trading commissions per transaction. Since the firm wasn’t actually buying the stock, they were at risk and having to pay out any profits out of pocket- but they were counting on the high probability of traders losing to minimize that risk.

If not for the SEC, this could have gone on indefinitely as long as they didn’t wind up with a bunch of good traders to break the bank.

 

Life Imitating Art – Simpsons Prophecy about 3 AM Twittering Trump Tirade Comes True

On July 30th, The Simpsons Cartoon show released a video on YouTube depicting a commercial showing Trump going on a Twitter rant at 3 AM:

 

On Sept 30, exactly 2 months to the day later, Trump fulfills the comedic prediction by actually going on a Twitter rant escapade around 3 AM!!!

 

 

We are in the MATRIX……

 

Critical Analysis of the Presidential Candidates: Clinton, Trump

Politics are a “fun” part of American tradition where each side tires to paint their opponent in a negative light and the back and forth attacks can cloud out the main issues worth considering in making a choice.

It also reveals that no matter what is said, some people will stick with a person/party regardless of the attacks brought against them, which is also a bad thing. It’s important to make a decision based on critical thought rather than emotion if you want both the most effective leadership in power while having them know they will be judged on their actions and past history rather than just charisma or slick advertising. Emotional voting is one main reason why we never seem to nominate the most qualified deserving candidates.

This election cycle is one that will go down in history books as having two of the most polarizing people in recent history. It has been joked that each candidate has enough flaws that they should be thankful they have each other to run against. There is a huge segment of the population that will be voting against one of the candidates more so than voting for one.

While both Clinton and Trump elicit high emotion from people, it’s still rather straight forward to break down the true pros/cons of each to make a true logical and non emotional choice.

 

Clinton:

Pros:

  1. 1st female candidate to be nominated for Prez in a major party.
  2. Extensive political background experience covering domestic and foreign relations.
  3. In favor of overturning “Citizens United” and getting big money out of politics

It’s a historical moment for a woman to be nominated in a major party, but of course one’s gender shouldn’t be ranked over one’s abilities. The capacity to handle the job should be the top concern.

One big plus is she is in favor of getting big money out of politics that is destroying our political system. Most of our politicians are bought out by corporate interests, which is why things seem to be getting worse over time no matter which party wins.

Cons:

  1. Political choices made in conflict with Progressive movement.
  2. Unforced error in email controversy- heavily criticized by FBI in handling classified emails.
  3. Seen as the typical “quid pro quo”,  pro corporate politician.

Years in the political arena has given Clinton that feel of squirmy politician who adjusts according to current public sentiment. Of course, this is no different than over 90% of out current elected candidates, and is the reason why the American public is growing so exasperated.

While she has extensive experience, her choices have not always aligned with Progressives. For example, she voted in favor of the disastrous/needless Iraq War  as well as US involvement in Libya and Syria, all of which has caused compounded problems and more instability in the Middle East. The irony is her choices here have been more in line with Conservative strategy, so these are issues that Conservatives have no moral high ground to attack her on, but Progressives do.

The email server controversy was a ridiculous unforced error on her part because she decided on a private server rather than use the government server. The FBI clearly called her out as being very careless. To make matters worse, she attempted to try to explain that the scathing FBI report was a good thing and showed she was honest when in fact it contradicted several statements she made in the past about sending/receiving marked and unmarked classified documents. Doing things like this only justifies the “Crooked Hillary”  nickname given by Trump.

She was paid for speeches to Goldman Sachs that she is unwilling to release, indicating they must be pro corporation and embarrassing.

I left out the Benghazi controversy because I don’t hold this to be a true issue. Embassies have been attacked and/or lives lost on the watch of both Reps and Dems (Johnson, Nixon, Carter, Reagan, Clinton, Obama), only now we live in such a polarized environment that every tragedy is held under a microscope to find fault.  Past administrations would fare no better if held under the same level of scrutiny.

 

Trump:

Pros:

  1. Lots of business experience
  2. Not afraid to speak his mind
  3. Against Citizens United

Trump steps up to the plate with extensive experience in real estate and name brand recognition. As a businessman, he has direct practical experience on the state of the economy. He also ran a near flawless campaign against his Republican opponents during the primaries.

The fact that he was able to beat seasoned politicians should also be a warning to our elected officials that the American public is growing weary of the same old tired politics where much is promised and little is delivered.

One of the things that stood out about Trump is the fact that he didn’t sound “scripted” like the other seasoned politicians he faced. His answers sounded off the cuff and wasn’t afraid to call out the faults of his fellow Republicans. Now compare that to the standard political talk we hear, and it sounded refreshing.

He has stated real problems that other Republicans seem to ignore like the loss of manufacturing jobs to outsourcing- a populist stance more associated with Progressives.

He has also taken a stand against big money in politics, but not to the same level as Progressives. Big money corruption is mutually hated by base Dems and Reps.

 

Cons:

  1. Has seriously insulted or threatened numerous demographics of ethnicities/religions.
  2. Won’t release his Tax returns – breaking ranks with all other Pres nominees in modern history.
  3. Trump has his own set of legal problems with lying/fraud with Trump University.
  4. There is no “Trump 2.0” for the general election.
  5. Wants to repeal “Obamacare” without showing/offering a superior replacement.

 

I could clearly see Trump winning the primary race because he was willing to be more extreme than all his rivals. He moved to the far right- more so than his opponents were willing to go because they had enough experience to know that to win a general election, you have to appeal to more than just your base. His opponents failed to call out his extremist viewpoints in the beginning and it then became silent approval from which they couldn’t recover from.

The key moment in the primary was when Trump labeled the majority of illegal Mexican immigrants as drug users/pushers,  criminals, and rapists. That should have been immediately called out and condemned by all candidates, but they stayed silent for the most part.

The anti illegal Mexican statement was bad enough, but he proceeded to make even more extremist statements such as:

  1. Banning all Muslims from entering the US
  2. Did not disavow FDR’s use of Japanese-American internment camps.
  3. Bringing back globally defined torture such as water boarding.
  4. Killing the families of known terrorists.
  5. Claiming a Mexican-American judge can’t do his job because of his ethnic background.

Making statements like these may be well received as red meat to a Conservative base, but it makes it very hard to pivot towards the center in a general election to win over moderates and Independents. This is where we get to another critical problem of his campaign- he has continued making extremist statements since being nominated and hasn’t pivoted at all. There doesn’t appear to be a polished, more refined and “presidential” Trump able to appeal to a wider audience than his initial primary base. This is bad news for Republicans in general because without building a consensus vote, the odds of winning an election drop like a rock.

Some current examples of Trumps continued offensive/outrageous statements:

  1. Attacking Muslim gold star family whose son died defending our country.
  2. Calling Obama/Clinton the founders of ISIS.
  3. Making statements that can be construed as threatening the life of his opponent Clinton.

You simply can’t act in this manner if the main goal is be the adult in the room and build a working consensus among all groups. Worse yet, he’s now making statements of the “system being rigged” so that if he loses, the election must be illegitimate. This is a direct danger to our Republic since he is priming his group of followers to consider the election to be a fraud if he doesn’t win. This will only further fracture our political system and make the polarization that much worse. Trump is attacking the very legitimacy of our democratic process on baseless claims.

As a result of his continued bombastic statements, more and more prominent Republicans have started coming out denouncing him. These are interesting times people when members of a party are now publicly campaigning against their Prez nominee. Interesting times indeed! What they fear is the outrage against Trump will result in down ballot losses for all Republicans in general.

Lastly, he can’t claim to be “transparent” or more honest than Clinton if he refuses to disclose his tax returns. Trump claims he can’t because he is currently being audited. However Warren Buffet has given him a challenge that he is also being audited but wants Trump to join him in showing their returns.

 

Trump All but Completes His Hostile Takeover of the GOP Pres Nomination: RIP Conventional Wisdom

Danger Shock Hazard

Trump’s win in Indiana coupled with Ted Cruz dropping out of the race all but ensures Trump’s eventual clinching of the GOP’s Republican Presidential nomination, leaving all the pundits who never fathomed such a scenario in their wildest dreams stunned, and scratching their heads.

This election cycle has been a perfect case study of why you shouldn’t trust the “experts” when it comes to making assessments/predictions. We’ve seen in the 2008/2009 market crash that the vast majority of political and economic “insiders” had no idea of that approaching crisis and certainly gave no warning to investors.

This time just about all the so called political guru’s completely missed the rise of Trump and his ability to stay afloat regardless of what he says no matter how inflammatory. They are flummoxed about his ability to withstand increased scrutiny and a biased assault of press related articles against him, attempting to write him off in hopes that the polling numbers would follow, which they didn’t.

Even worse, having missed the boat on predicting the ascendancy of Trump’s campaign, they have the audacity of now writing articles on explaining how this came to pass- like anyone should pay attention to the same folks that were completely oblivious  to his sustainability in the first place.

Simply psychology can explain the Trump phenomenon.  People are angry at Washington and the constant failure of their elected officials to live up to their promises. In their frustration they seek someone not yet “tainted” by the system that constantly overpromises and underdelivers. They are now ready to pick an outsider over the political insiders.

Trump remains on top due to his public persona of brashness/arrogance towards the establishment. The more he is attacked, the more he fits the role as the “rebel” of politics to all his supporters, which increases his appeal. It’s very similar to the daughter who is dating a “bad boy” and the more the parents admonish and scold her to let him go, the more attractive he becomes to her.

The “experts” ask, how can Trump supporters be so oblivious to all the negative things he has said as well as his past flip flops on opinions? Why doesn’t this exposure change their mind? The answer is they have made an emotional choice based on their resentment of their elected politicians as well as his positive message on better times ahead with bringing back outsourced jobs and good times in general, and are ignoring/rejecting anything else said, period. Back to the daughter/bad boy example- how many times will she be “persuaded” with a list of rational cogent reasons why the guy she is dating is a bad match? How many times have your parents persuaded you to change your mind after you became passionate/excited about something or someone?

The “experts” asked, why did Marco Rubio fail to beat Trump at his own game of childish attacks/insults? The answer is you can’t imitate someone’s “brand” and expect to beat them with it. It’s the equivalent to the school valedictorian/nerd taking off his suit/tie, and putting on a leather jacket to try to woo the daughter away from the bad boy. All that does is make you look like a “wannabe” as well as corrupts the “brand” you stood for.  Notice how Cruz and Kasich didn’t take the bait to go into the mud, and how they continued to poll higher than Rubio before he dropped out.

Now these “experts” are saying in 20-20 hindsight Rubio made a mistake in fighting Trump in the mud when they were the ones who suggested he should do it! The lesson here is to be true to yourself, or at least “appear” that way. =)

Tonight we know that not even the behind the scenes 3D Chess Level strategy of Ted Cruz or his team up with Kasich was enough to stop Trump’s growing momentum.

This election season is one for the history books – that a non political outsider could take out a field of seasoned elected professionals that were way more funded and entrenched in the system than he ever was, and ride a populist wave to the Republican nomination turns all conventional wisdom and expert analysis on its ear. We live in interesting times!

 

 

NY Times Caught Red Handed Editing Released Article on Bernie Sanders to Convert it from Laudatory to “Hit Piece”

This election cycle has never been clearer in showing just how much the mainstream media works in projecting their own bias against threats to the status quo. Trump from the beginning was continually put in a negative light and written off as non serious no matter what the polls showed about his sustained popularity, and they finally had to change course once he started winning elections.

For, Bernie Sanders, the treatment has been one of largely being ignored compared to the attention given to the other major candidates running such as Clinton, Bush, Cruz, Trump, Rubio, etc..

Like Trump, many of the articles that did feature Sanders were cast in a negative light favoring Clinton over him. The Washington Post was caught running a marathon string of negative articles against Sanders – 16 of them in 16 hours.

The most recent egregious example of another so-called established and principled source, the NY Times, got caught making changes to an article they had already released that was so significant to change the tone of the article from a positive to negative/dismissive. What’s worse, they left no “editorial updates” or revisions to let people know a change had been made- just significantly changing an article that had already been released on the fly, as if they were “motivated” to make these “corrections” after the fact.

Did they not think they wouldn’t be called out on this, which certainly appears to be driven by partisan politics? The NY Times is claiming no wrongdoing, but even their public editor, Margaret Sullivan, disagrees.

 

And yet another stake is driven through the heart of the belief of an unbiased “Fourth Estate” that is supposed to serve the public interest.

 

Links to all the info:

http://publiceditor.blogs.nytimes.com/2016/03/17/new-york-times-bernie-sanders-coverage-public-editor/?ref=topics&_r=1

http://www.mediaite.com/print/ny-times-public-editor-chastises-paper-for-stealth-editing-bernie-sanders-piece/

https://www.rollingstone.com/politics/news/how-the-new-york-times-sandbagged-bernie-sanders-20160315

 

 

 

 

Speaker of the House John Boehner Forced to Resign by Tea Party Wing- Why it’s a Big Deal

The GOP establishment has continually written off the power/influence of the Tea Party faction, but much like Trump’s “imminent demise”, it turns out to be more wishful thinking than reality.

When Eric Cantor, former Republican House Majority leader and once a Tea Party favorite, got challenged in his own primary and lost, that was a clear wake up call that Tea Party fervor was still in high gear. Now Speaker of the House John Boehner, publicly embarrassed time and time again for failing to establish a majority GOP House consensus on critical votes such as continued government funding, has elected to basically throw in the towel and step down rather than face ongoing resistance, rebellion, and rejection from the more conservative Tea Party House members.

This is how the news was received by conservative voters when Marco Rubio alerted the audience at the Value Voters Summit:

What’s amazing is that on an absolute scale, both Boehner and Cantor would be considered highly conservative – but they have been branded as weak RINOs by the far right Tea Party wing.

Boehner in particular has been excoriated by the Tea Party for failing to stop Obama’s and the Democrats initiatives such as the ACA (“Obamacare”).

When Boehner and Cantor basked in the 2010 victory that awarded House majority back to the Republicans, it’s likely they never dreamed that they would both be kicked out by their own party within five years.

The true irony is the establishment GOP sowed the seeds to their own demise right after the 2008 elections when the public was angry over the prospect of  a wrecked economy, continued government overspending and the prospect of bailing out Wall Street as well as Chrysler and GM. The GOP used the anger that put them into a minority and redirected it towards the government in general, and the Democrats in particular.

Their efforts to brand the entirety of big government as “evil” was a big success and many Dems got the boot in 2010. The problem is the new crop of politicians that were elected was based on this government hatred and were not willing to just fall in line to the status quo as Boehner and the GOP establishment had hoped. The GOP establishment didn’t think this through to realize that bringing in folks that hate the government will also target them as well as being part of the problem.

A good number of newly elected Republicans came in with a no compromise attitude and were put off by Boehner’s negotiating with the Dems instead of demanding their unconditional surrender. They were elected with the promise of taking immediate direct action against the Dems agenda such as Boehner’s and McConnell’s continuous chanting of the repeal and replacement of the ACA as a call to arms to energize and get out the Rep voters. Those newly elected were now primed for direct combat based on the promises made by their leaders.

This conflict has resulted in the US Debt Ceiling Crisis of 2011, where it appeared the GOP was willing to let the US Goverment go into default on its debt unless the Dems conceded to their budget cut demands. That brinkmanship led to S&P downgrading the country’s credit rating. Then there was the Government shutdown of 2013,  when the GOP tried to force the Dems to defund Obamacare as a condition for keeping the government running.

To sum up, much to the chagrin of Boehner and the rest of the GOP establishment, they are reaping what they sowed. The obvious lesson here is don’t make promises to your constituents for immediate action that you know you can’t deliver on. With Obama’s relection in 2012, the ACA is essentially protected by his veto power until he leaves office in 2017.

And here lies the problem that is the big deal. Boehner’s “sin” was attempting to operate within the rules of law and votes as mandated by the Constitution. The founding fathers created the structure of our government with the assumption that all parties would make an attempt to work together and establish points of compromise for the greater good of the country. However, compromise is seen as a dirty word in the Tea Party lexicon.

With Boehner’s departure, you can be sure the Tea Party’s next target will be Senate Majority Leader McConnell. They are trying to put pressure on him to get rid of the 60 vote threshold to move bills forward to a vote, which is ironic since the Reps enjoyed blocking Dems using the 60 vote rule when they were in the minority. Neither Rep or Dem Senate leaders want to remove the 60 vote rule for fear of what would happen if they fall into the minority.

The Tea Party has shown they are willing to take the country hostage and threaten US debt defaults and government shutdowns to get their way rather than win by conventional means like obtaining the required voting majorities in Congress to pass a bill and override a presidential veto.

The fact is no party can or should ever submit to folding under such ransom tactics as it would set the precedent for it to be repeated and majority elections would mean nothing when minority factions can bully their way into power.

Boehner leaving means the GOP is now that much closer to having an apocalyptic showdown with the Dems that will result in a prolonged government shutdown or even a US debt default, either of which would be very bad news for the economy and those that directly depend on the government, such as SS recipients and veterans.

It seems inevitable that the Tea Party will strive to see how much power they truly have and wind up overplaying their hand at the expense of both their party and country.

We now enter the next phase of the Tea Party Revolution going into political and economic uncharted waters…

 

 

 

 

Financial Fine Cuisine – True “Smart Money” Talk and Wisdom

Economics and the state of the economy can be boring topics to many, but I found this discussion to be exceptionally interesting and educational.

Dylan Ratigan is the former host of CNBC’s “Fast Money”, and later moved to MSNBC to discuss news and politics of the financial world. He is one of the few financially super literate folks who dares to speak truth to power when it comes to the realities of our current economic policies and system/status quo.

Tom Sosnoff is the owner of the Tasty Trade network for traders and the two engage in some straight talk about the economy and investing – and why the masses are not more engaged in getting financially literate. Tom is hosting the show “Truth or Skepticism” where the discussion takes place.