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Tragedy In Florida: A Letter From A Student
Feb 21, 2018
Read More Articles by Bradlee Dean“…after the Massacre in Littleton, CO, I realized that as a member of this generation that kills without remorse, I had a duty to challenge all of my elders to explain why they have allowed things to become so bad.” — Marcy Musgrave
Just last week, I was taking the time to speak about school shootings and the pharmaceutical companies, as well as the indoctrination taking place in public schools on my national radio broadcast.
I also took the time to bring forth warnings to parents as to what their kids were and are facing and what it is that their kids are being subjected to on a 5-day a week basis in public schools. I shared a letter to the editor from a student warning what would happen if her generation, and those upcoming, were ignored by their parents and elders.
The following letter from college student Marcy Musgrave in the editorial section of the Dallas Morning News on Sunday, May 2, 1999.
Generation NEXT has some Questions I am a member of the upcoming generation–the one after Generation X that has yet to be given a name. So far, it appears that most people are rallying behind the idea of calling us Generation Next. I believe I know why. The older generations are hoping we will mindlessly assume our place as the “next” in line. That way, they won’t have to explain why my generation has had to experience so much pain and heartache. “What heartache?” you say. “Don’t you know you have grown up in a time of great prosperity?” Yeah, we know that. Believe me, it has been drilled into our heads since birth. Unfortunately, the pain and hurt I speak of can’t be reconciled with money. You have tried for years to buy us happiness, but it is only temporary. Money isn’t the answer, and it is time for people to begin admitting their guilt for failing my generation. I will admit that I wasn’t planning to write this. I was going to tuck it away in some corner of my mind and fall victim to your whole “next” mentality.
But after the Massacre in Littleton, CO, I realize that as a member of this generation that kills without remorse, I had a duty to challenge all of my elders to explain why they have allowed things to become so bad. Let me tell you this: These questions don’t represent only me but a Whole generation that is struggling to grow up and make sense of this world. We all have questions; we all want explanations. People may label us Generation Next, but we are more appropriately Generation “Why?”
“Why did most of you lie when you made the vow of ’til death do us part’?” “Why do you fool yourselves into believing that divorce really is better for the kids in the long run?” “Why do so many of you divorced parents spend more time with your new boyfriend or girlfriend than with your own children?”
“Why did you ever fall victim to the notion that kids are just as well off being raised by a complete stranger at a day care center than by their own mother or father?” “Why do you look down on parents who decide to quit work and stay home to raise their children?” “Why does the television do the most talking at family meals?” “Why is work more important than your own family?” “Why is money regarded as more important than relationships?”
“Why is ‘quality time’ generally no longer than a five-to-10-minute conversation each day?” “Why do you try to make up for the lack of time you spend with us by giving us more and more material objects that we really don’t need?” “Why does your work (in the form of a cell Phone, laptop computer, etc.), always come with us on vacations?”
“Why have you neglected to teach us values and morals?” “Why haven’t you lived moral lives that we could model our own after?” “Why isn’t religion one of the most important words in our household?” “Why do you play God when it comes to abortion?” “Why don’t you have enough faith in us to teach us abstinence rather than safe sex?” “Why do you allow us to watch violent movies but expect us to maintain some type of childlike innocence?” “Why do you allow us to spend unlimited amounts of time on the Internet, but still are shocked about our knowledge of how to build bombs?” “Why are you so afraid to tell us ‘no’ sometimes?” “Why is it so hard for you to realize that school shootings, and other violent juvenile behavior, result from a lack of your attention more than anything else?” Call us Generation Next if you want to, but I think you will be surprised at how we will fail to fit into your neat little category. These questions should, and will, be asked of the generations that have failed us. Written by Marcy Musgrave, a junior at Texas A&M University.
It is amazing to me that another tragedy like that of the school shooting in Florida on Wednesday has to take place before people awaken to what is happening in our country today. This will, of course, last for 3 to 4 days and Americans will be diverted once again.
The sad fact is that I was refused, for a very short time by a school district in Boca Raton, Florida, not for tearing down their values and what we see in our Constitution, but for reinforcing them.
Young people are illegally indoctrinated by the federal government and then these same politicians, who push for the federal government’s illegal indoctrination in public schools, are the first ones to call for gun control after a tragedy occurs. Hopefully, people in this country do realize that a majority of school shootings are in “gun free” zones, which in itself it illegal. Funny how this does not happen in schools with armed guards.
Going back, Obama had illegally implemented an extensive overhaul of public education from kindergarten through high school, bypassing Congress (again), the voice of the American people, and inducing states to agree to major changes that none of his predecessors attempted.
Apparently, Barack Hussein Obama, the self-proclaimed “Constitutional Scholar,” hasn’t taken the time to read Article 10 of the Bill of Rights. The federal government has no business whatsoever in the education of American schoolchildren.
This was all done by implementing Common Core Standards in 46 states and D.C., drowning students with mostly “informational text” and historical documents.
Some of the non-fiction texts that will be implemented into school curriculum are “FedViews,” by the Federal Reserve Bank of San Francisco (2009) and “Executive Order 13423: Strengthening Federal Environmental, Energy, and Transportation Management,” published by the General Services Administration.
Jamie Highfill, the Arkansas 2011 middle school teacher of the year, said, “I’m struggling with this, and my students are struggling. With informational text, there isn’t that human connection that you get with literature. And the kids are shutting down. They are getting bored. I’m seeing more behavior problems in my classroom than I’ve ever seen.”
The curriculum change in public schools has been a downward spiral for many years. America has been so dumbed down that 700,000 students per year graduate without the ability to read their own diplomas.
Add to students’ confusion the innumerable amount of errors in school textbooks ranging from misinformation to omission of facts or outright lies. These “errors” can be found in virtually every subject, especially in math, science and history.
In Texas, the State Board of Education found a total of 109,263 errors in math textbooks reviewed for use in 2008 alone. Yes, I said 109,263 errors. The board had to go so far as to place a possible fine of $5,000 per error found if they were not fixed by spring of the same year.
In textbooks all across America, science (the study of creation) is well-known for being laced with the dangerous theory of evolution, which wars against Christianity, the Bible, God and His Law, which is the foundation of our republic.
In Virginia, a state review committee found a slew of errors in many history textbooks. A committee of five historians caught errors ranging from the incorrect year John Rolfe married Pocahontas to quotes that do not even appear in historical records. One book illustrated Virginia soldiers in the Revolutionary War wearing red coats, when in fact they wore blue. Another textbook erroneously stated many colonial Americans were illiterate. In fact, literacy rates were extremely high.
Retired Library of Virginia historian Brent Tarter wrote in his review of one textbook, “Our Virginia,” “I also found some very significant omissions, some internal inconsistencies, and some erroneous or questionable descriptions and analyses of historical events. Some are so ludicrous and difficult to explain that I cannot understand where the misinformation came from.”
In recent years, American public schools have also been indoctrinated with the Muslim religion. Studies have shown over 500 historical errors in public school textbooks, giving an Islamic slant to our youth.
As a result, our youth are subject to the following teachings:
As I said, the federal government of the United States of America has no lawful authority over the education of the young.
The Tenth Amendment to the Constitution states, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
Second, the reason this is happening is that 86 percent of the American people who call themselves Christian conservatives are the ones sending their kids into public schools to be indoctrinated in a worldview they claim they despise.
Proverbs 22:6 says, “Train up a child in the way he should go, and when he is old he will not depart from it.”
The Lord commanded parents to train their children in the way they should go, not the federal government.
The good news is we still have the freedom to do the right thing. These are our kids, not the federal government’s.
As a forewarning, you might want to bless this generation while you have time to do so. If you don’t, they will be there to curse you.
“The philosophy taught in the class room in one generation will be the taught in government in the next.”
This explains what we are dealing with today. I tried to tell you.
Article posted with permission from Sons Of Liberty Media
© 2018 Bradlee Dean – All Rights Reserved
E-Mail Bradlee Dean: Bradlee@SonsOfLibertyRadio.com
Jan 19th - 22nd SCTP CONVENTION-Presentations & Interviews with....
Dr. Keith Ablow: US has no mental health 'safety net'Fox News
Published on Feb 16, 2018
Parkland, Florida school shooting raises debate about addressing mental health issues; Dr. Keith Ablow provides insight on 'The Story' as the president visits hospital were victims were treated.
VILLAGES FOR VETERANS IS HELPING SGT. PAM KELLY
WHAT'S GOING ON | FEBRUARY 21, 2018
BY LEIGH NEELY
Tuesday night at Lake Miona Recreation Center in The Villages, the whole gang gathered to lend a hand to Villagers for Veterans. The group had a fundraiser to help Sgt. Pam Kelly, who was injured while training for deployment to Iraq. As result, she lost the use of both legs and her right arm. Previously, the group raised money to help Pam get a service dog.
Now, Villagers for Veterans wants to build a house or modify an existing house in The Villages so Pam can be more independent and do activities on her own. For the fundraiser, Marie decided to get a photo of Pam in front of a typical house in The Villages. The photo was then made into a large jigsaw puzzle. Each person was asked to buy a puzzle piece for $50. Though the puzzle is large, the individual pieces, which are magnetic, are small. Marie hopes this will increase the amount of money the group can raise.
Marie is not shy about helping veterans. She began the organization because she wanted to provide whatever these men and women who served so bravely need to help in healing.
Pam says she had a lot of trouble adjusting to life after her accident. “I had planned to be in the army for life,” she says. “I didn’t know what to do to be a civilian. I felt like I had lost my soul.”
According to her story posted on the Villagers for Veterans website, she became active in adaptive sports and found renewed joy. She excelled in bicycling, swimming, and archery. Unfortunately, this ended when she had to have surgery on her good arm, which left her with painful nerve damage and means more surgeries in the future.
Her small home in Tampa is not equipped for Pam’s wheelchair and the room she needs to move about independently. Villagers for Veterans wants to help her find a home in The Villages, possibly on the historic side, so she can be more independent and get out to enjoy activities in the town square.
A good time was had by all!
If you’d like to donate, go to their website www.villagersforveterans.org and follow the instructions. The fourth annual Orchid Gala, the group’s biggest fundraising event, is April 28, 6-9pm, at Savannah Center in The Villages. Tickets are also available on the website.
The Winds of War (Part Three)
by KEVIN D. FREEMAN on FEBRUARY 16, 2018
In the past week, so much information has emerged that corroborates our basic thesis. The winds of war are blowing and the intensity is increasing. To catch up, please review our last two posts:
The Winds of War (Part One) – Global Economic Warfareglobaleconomicwarfare.com/2018/01/the-winds-of-war-part-one/Jan 29, 2018 – That’s despite the U.S. having higher interest rates than most other economies and a stock market whose performance the president cites as a barometer of the success of his policies. In fact, capital is flowing away from the U.S. despite these positives, according to Northern Trust senior economist Ryan …
The Winds of War (Part Two) – Global Economic Warfare
globaleconomicwarfare.com/2018/02/the-winds-of-war-part-two/Feb 4, 2018 – In last week’s post, we warned that the scent of the next World War was already in the air. Readers know that we believe the next war will be cybereconomic in nature, at least in the early stages. We have […]
There are three recent revelations that directly tie to what we have been saying.
Revelation One: Russian Efforts to Undermine AmericaToday, the Justice Department announced that 13 Russian nationals were indicted for interfering in the 2016 election in acts of “information warfare.” There are some really serious implications here and no doubt partisans will be attempting to spin this as either pro- or anti-Trump for political reasons. The indictment makes clear, however, that the effort did not change the outcome of the election. Further, it is clear that activity was both pro-Trump and anti-Trump, suggesting the goal was discord rather than a specific outcome. In fact, the activity began prior to Donald Trump entering the race. Finally, there is nothing in the indictment that suggests any willful collusion by any American. In fact, the indictment makes clear that the Russian instigators went to great lengths to hide the fact that they were Russian. They attempted to portray themselves as American activists under the banner of the Internet Research Agency.
Why is this so significant? This finding continues to demonstrate what we have shared over the past decade, mainly that Russia has been engaged in a type of warfare against the United States. That is fact. This effort is based on destabilizing our economy and unity following the playbook of Unrestricted Warfare.
Here are examples from just two of the many articles we have written on the topic:Putin Prepares for a Currency War that He Thinks (Hopes?) Will …globaleconomicwarfare.com/…/putin-prepares-for-a-currency-war-that-he-thinks-hop…
Feb 11, 2013 – MOSCOW — For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument — that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. — very seriously. Now he’s found an …
This first example shows a long-term Russian effort to undermine American solidarity. When you read the post, you will note that Putin dreams of a divided United States and has undertaken an economic war to achieve it.
The second example clearly shows that Russia sent spies to the United States in an effort to learn how to undermine our market using Exchange Traded Products (ETFs and ETNs).1,000 Flash Crashes at Once; What Role Did ETFs Play in Today’s …globaleconomicwarfare.com/…/1000-flash-crashes-at-once-what-role-did-etfs-play-in-…
Aug 24, 2015 – And, don’t forget that a Russian spy was caught trying to learn how to “destabilize ” American stock markets using ETFs. Here is an excerpt from Justice Department charges regarding the case against three Russian spies: part_2. The Russians were seeking ways to destabilize stock markets with ETFs?
This post is very significant in light of the recent market turmoil and another revelation of the past week we will discuss. The bottom line here is that Russian subversion efforts are much wider than simply attempting to influence the electorate. In fact, the clear proof of Russian efforts to fund both sides of protests and rallies validates our concerns in many respects.
Revelation Two: The Entire U.S. Intelligence Community Now Confirms Our Decade-Long Warnings On February 13th, the U.S. Senate Intelligence Committee held important hearings featuring the top intelligence officers in our government. The hearings are worth watching. Here is a link to see them.
Perhaps the most dramatic testimony came from DNI Dan Coats. This is a refreshing contrast to the often political and certainly weak testimony of his predecessor. This DNI, however, not only knows the true threat but also is willing to admit it. You can read his report produced in conjunction with the Senate hearings here: 2018 DNI Worldwide Threat Assessment. Here are some of the important findings that were shared (as reported by Austin Bay in TownHall):On February 13, U.S. Director of National Intelligence Dan Coats appeared before the Senate Intelligence Committee and discussed his just-released “Worldwide Threat Assessment of the U.S. Intelligence Community” report.
That document synthesizes what U.S. military and civilian intelligence analysts, cyber warriors and counter-intelligence experts regard as the “sobering” (a word Coats used) threats to the American people and their interests.
During his testimony, DNI Coats was flanked by the directors of the FBI, CIA, the Defense Intelligence Agency, NSA and the National Geospatial-Intelligence Agency (NGA). Their agencies contributed to the assessment.
Coats’ initial threat statement is sharp, clear and dire, so I’ll quote it at length.
“…We face a complex, volatile and challenging threat environment,” he began. “The risk of interstate conflict is higher than any time since the end of the Cold War, all the more alarming because of the growing development in use of weapons of mass destruction by state and non-state actors.’
Sobering? Yes. Interstate wars can escalate into regional wars. When belligerents possess WMD, escalation can have global consequences.
However, on the cusp of the 21st century’s third decade, other wicked variables complicate diplomacy, spying, commerce, warfare and minute-to-minute human survival.
“Our adversaries as well as the other malign actors,” Coats continued, “are using cyber and other instruments of power to shape societies and markets, international rules and institutions, and international hotspots to their advantage.”
That summarizes many wicked activities. Examples include cyber disruption of communications, cyber crime, propaganda and false flag operations, economic warfare, political and economic penetration of international institutions and support for proxy warfighters in crises in order to destabilize a region.
But the DNI’s introduction was far from over. “We have entered a period,” Coats said, “that can best be described as a race for technological superiority against our adversaries who seek to sow division in the U.S. and weaken U.S. leadership.” Moreover, non-state actors “to include terrorists and criminal groups are exploiting “weak state” capacity in Africa the Middle East Asia and Latin America, causing instability and violence both within states and among states.”
Coats identified five “functional” types of threats to the U.S.: Cyber spying, propaganda and attacks directed by nation states, non-state actors and criminal groups; WMD and WMD delivery systems; Terrorism; Technological threats from space and in space; Transnational crime.
The cyber war has begun. “Frankly the U.S. is under attack,” Coats said, by “entities” using cyber pathways to penetrate security and economic activities. Russia, China, Iran, North Korea and crime organizations conduct disruptive cyber operations against the US. China is particularly adept at using cyber weapons.
All of this confirms both what we have shared with you over the past decade as well as the original research we conducted for the Pentagon and then relayed to multiple federal agencies starting in 2008. We are already in a global cyber-economic war. Our adversaries are the same ones we have described to you (including radical Islam). the weapons are as we have explained, cyber, market manipulations, economic warfare, propaganda, Intellectual Property theft, and so forth. Beyond that, we have explained in detail how China, coordinating with and perhaps led by Russia, has purposely sought to displace U.S. hegemony in the dollar and global financial system. Some see this as normal economic development. The reality, however, is far more sinister.
FBI Director Chris Wray was very direct during his testimony. If you’ve been reading this blog, it will seem quite familiar (quoting from Michal Kranz in Business Insider):
FBI director Christopher Wray reiterated a commonly held view on Tuesday that China is seeking to become a global superpower through unconventional means — but framed the threat China poses to the US as not just a governmental one, but as a societal one, too.
Speaking before the Senate Intelligence Committee alongside the heads of other US intelligence agencies, Wray told Senators that China is using a host of methods to undermine American military, economic, cultural, and informational power across the globe that rely on more than just China’s state institutions.
“One of the things we’re trying to do is view the China threat as not just a whole of government threat, but a whole of society threat on their end,” Wray said, “and I think it’s going to take a whole-of-society response by us.” …
Wray pointed to China’s use of unconventional intelligence sources at US universities as a salient example of China’s reach.
In intelligence jargon, “collectors” are individuals who collect intelligence on behalf of agencies or governments. And he said they’ve infiltrated American universities.
“I think in this setting, I would just say that the use of non-traditional collectors — especially in the academic setting, whether it’s professors, scientists, students — we see in almost every field office that the FBI has around the country,” Wray said.
“They’re exploiting the very open research and development environment that we have which we all revere, but they’re taking advantage of it,” Wray added, noting that there is a “naiveté” amid academics about the risks posed by foreign nationals at universities. …
While there is no evidence that a majority of Chinese students or academics pose any threat to US interests, there are a number of education efforts that the Chinese government uses as vehicles for soft power.
The first of these are the Confucius Institutes, which Rubio alluded to during his questioning of Wray and Coats at the Senate hearing.
These institutes mirror many other foreign-language education entities that countries fund around the world, but with a couple caveats. Rather than existing as stand-alone bodies, they are inserted into US universities, and in addition to teaching Mandarin Chinese, they also reportedly engage in disseminating Chinese propaganda and restricting what professors and students should say.
The bottom line is that there is a war underway and it is growing, not receding. Nothing demonstrates this more than the fact that our systems are probed daily and nothing is left off the table according to the DNI:
“Frankly, the United States is under attack by entities that are using cyber to penetrate virtually every major action that takes place.”
Even Defense Contractor Raytheon now demonstrates the understanding of just how big a problem this has become. Beyond cyber, there is the massive infiltration at all levels, including our own CIA. The Chinese have even made serious efforts to turn our own companies against our interests.
Read the DNI report. Watch the testimony. Now imagine my personal frustration based on the fact that I warned about all of this to major intelligence agencies for years only to have my work ridiculed, suppressed, and threatened. Now, finally we are seeing some reasonable recognition of the threat we face. In fact, we saw a piece of good news this week. The SEC rejected a Chinese attempt to buy the Chicago Stock Exchange (as noted by Reuters):
U.S. regulators on Thursday killed the politically sensitive sale of the Chicago Stock Exchange (CHX) to a group led by China-based investors, saying a lack of information on the would-be buyers threatened the ability to properly monitor the exchange after the deal. The move by the Securities and Exchange Commission (SEC) ends a two-year battle to gain approval for the sale and underscores the more hostile environment facing Chinese buyers under the administration of U.S. President Donald Trump.
Trump brought the CHX deal up twice during the election campaign as an example of how jobs and wealth were leaving the United States. SEC staff initially approved the sale of the privately owned exchange in August, but within minutes of the announcement SEC commissioners, led by Chairman Jay Clayton, a Trump appointee, put the decision on hold for further review.
U.S. lawmakers from both parties had harshly criticized the deal in joint letters to the SEC, arguing that it would give the Chinese government access to American financial markets and questioning the SEC’s ability to regulate and monitor foreign owners.
“This has been a long fight, and I am grateful we now have a President who recognizes the national security threats of allowing a Chinese government-affiliated company to own the Chicago Stock Exchange,” Republican Congressman Robert Pittenger said in a statement on Thursday.
This is extraordinarily significant in light of what we will share in Revelation Three. It also is reflective of an incredible shift in the national security approach from the last Administration. Our friend Joe Schmitz, a Trump Advisor and former Inspector General at the Department of Defense, wrote about this at the start of the year in a NewsMax article:
Recent presidents generally ignored American first things, e.g., core American principles such as Compact Theory, Popular Sovereignty, and Subsidiarity, which underlie our Declaration of Independence, Constitution, and Bill of Rights. Instead, they focused mostly on second things, e.g., money and survival — priorities for even atheist criminal thugs and Islamist jihadists.
In his forward to our new “National Security Strategy,” President Trump announced: “We have recommitted ourselves to our founding principles and to the values that have made our families, communities, and society so successful.” The first paragraph of the first page of the new “National Security Strategy” begins with this unapologetic recitation of American first things: “An ‘America First National Security Strategy’ is based on American principles, a clear-eyed assessment of U.S. interests, and a determination to tackle the challenges that we face. . . . And it is grounded in the realization that American principles are a lasting force for good in the world.”
The new “National Security Policy” then proclaims, “‘We the People’ is America’s source of strength,” followed by this veritable parade of American first things: “The United States was born of a desire for life, liberty, and the pursuit of happiness — and a conviction that unaccountable political power is tyranny. For these reasons, our Founders crafted and ratified the Constitution, establishing the republican form of government we enjoy today.
“The Constitution grants our national government not only specified powers necessary to protect our God-given rights and liberties but also safeguards them by limiting the government’s size and scope, separating Federal powers, and protecting the rights of individuals through the rule of law. All political power is ultimately delegated from, and accountable to, the people.”
Not since Ronald Reagan has an American president so courageously and publicly reaffirmed American first things.
This courage sets the stage for what the ancient Chinese philosopher Sun Tzu described as supreme excellence in warfare: “To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.”
And to help us achieve such a supremely excellent result, our new commander in chief, in stark contrast to the willful blindness of prior presidents, identifies our various jihadist enemies as “linked by a common radical Islamist ideology.” The new “National Security Strategy” describes this ideology as “wicked,” “barbaric,” and “evil.”
The new strategy also indicates that, “To prevail, we must integrate all elements of America’s national power — political, economic, and military.”
So now the implementation phase begins, but the foundation for success is well laid.Read Full Article Here Trump’s ‘National Security Strategy’ Consistently Puts America First | Newsmax.com
In other words, this Administration recognizes the total war we are in. The key to victory is drawing upon our national strength which is found in our spiritual, and economic fiber.
Revelation Three: Our Financial Markets Are at RiskThe stock market just enjoyed one of its strongest weeks in years after last week’s serious decline. People have been wondering what caused the sharp loss, which seemingly arrived out of the blue. Many experts point to the purchase and sale of “volatility” derivatives used by professional managers to hedge risks.
Without getting into the weeds on how this all happened (you can read an explanation here), a whistleblower came forward to warn that manipulation was at work (as noted in The Wall Street Journal this week):
A U.S. regulator is looking into whether prices linked to the stock market’s widely watched “fear index” have been manipulated, according to people with knowledge of the matter. The Cboe Volatility Index, known as the VIX, is derived from S&P 500 options prices. The Financial Industry Regulatory Authority is scrutinizing whether traders placed bets on S&P 500 options to influence prices for VIX futures, the people said.
Separately, a letter from a law firm Monday representing an unidentified client urged U.S. regulators to investigate VIX manipulation, claiming it has cost investors hundreds of millions of dollars in losses each month. If evidence of manipulation is found, it would be a black mark for the VIX, which has soared in popularity over the last decade as a hedging tool for investors. The VIX is designed to track investor anxiety and tends to move in the opposite direction of the benchmark S&P 500 index. Investors purchase VIX futures and options to protect against declines in stocks….
Some market participants and observers of derivatives markets say VIX manipulation is feasible. More than a dozen traders and brokers told the The Wall Street Journal that they avoid the expiration days for VIX futures or advise their clients to do so, with some citing manipulation fears.
“There’s smoke there,” said Prof. Pirrong. “It’s definitely worth further inquiry.”
The amazing thing is that an estimated $8 billion in trades of volatility products (much of that in Exchange Traded Notes) could be responsible for $3 trillion in stock market losses. Considering that an enemy would only need to start the trade, the potential for manipulation is clear. In fact, a clever saboteur would find a way to profit from the turmoil.
Now, couple the reality of manipulation with the fact that our markets are all controlled by machines. A clever hacker could cause a complete collapse as we have warned. So, we know that Russia and China and others are hacking things daily. And, we know that Russia and China and others have purposed to so mayhem. Can we doubt that they are working on crashing our markets?
One MarketWatch contributor summed up the risk in a Valentine’s Day article. Here are excerpts:This is what happens when Skynet from ‘Terminator’ takes over the stock marketA massive amount of automated trading helped cause last week’s turmoil in the U.S. stock market.
It reminded me of Skynet. Remember Skynet?
“Skynet is a fictional … artificial general intelligence system that features centrally in the ‘Terminator’ [movie] franchise.Skynet gained self-awareness after it had spread into millions of computer servers all across the world; realizing the extent of its abilities, its creators tried to deactivate it. — Wikipedia ….
Those worried that Skynet has conquered financial markets are urged to read “Flash Boys” by Michael Lewis, who describes the proliferation of high-frequency trading. I believe the speed of the decline over the past week was driven by computers trading with other computers on high amounts of leverage. High frequency trading (HFT) routinely surpasses 50% of volume on most stock exchanges, and it may have made up more than 50% of volume last week. Early warnings of problems HFT proliferation have been consistently given by ZeroHedge.
The 1987 crash in the stock market was blamed on “portfolio insurance,” a form of computerized trading in which the lower the stock market went, the more the computer programs sold into the move lower, which created a quick avalanche effect. Some of last week’s moves felt like small avalanches….
The ETP (Exchange Traded Product) space is over $3 trillion. As that space has grown, so has the use of computerized trading that helps manage ETP securities. Much of the blame over the past week has been put on short volatility ETFs, which among other things take short positions in front-month Cboe Volatility Index futures.
The explosion of stock market volatility causes those ETPs to reverse their short VIX futures positions, causing a record surge in VIX futures buy orders after-hours, when such ETPs typically square their positions. On the day the Dow Jones Industrial Average declined 1,175 points, a surge in VIX futures buy orders created a surge in S&P futures sell orders as they are inversely correlated. Because of the record buying of VIX futures, their prices rose quickly after-hours, which caused many ETPs whose portfolios are short VIX futures to suffer record 80% declines after-hours, in effect blowing up their portfolios.
While most of the assets in short-volatility ETFs have already been liquidated over the past week, there are still over $3 trillion in assets in all ETPs, so I am sorry to say that Skynet is still lurking in the stock market. It looks to me like the regulators allowed a monster to grow in the face of the ETP industry and they will have a very difficult time reining it in.
So, we have a cyber risk (and we know of Russian, Chinese, North Korean, Iranian, and radical Islamist efforts here) and a risk of manipulation of Exchange Traded products (which we know that Russia specifically has targeted). These can no longer be denied.
RecapSo here’s the bottom line. We are at risk and under attack. But we finally have a recognition of this threat by our government with concrete action being taken (as evidenced by the denial of Chinese takeover of the Chicago Stock Exchange). We will have to be diligent. The good news, though, is that we are in a solid position to win this economic war. the National Security Strategy is very encouraging. Our nation is resilient and in a better position than any nation in the world. If we take the right steps, we will alert our adversaries and enemies to not mess with us. If they want a fight, we can and will be prepared to win.
I can tell you that we are doing our part to awaken America. We’ve written two best-selling books on the subject (Secret Weapon and Game Plan). We’ve briefed our government and thought leaders. We’ve written this Blog and spoken to groups across the country. Now, we are launching Economic War Roomwith Kevin Freeman, a new online television program that will clearly address the economic threats we face. We will offer understanding of the threat, solutions for the problems, and a clear message of hope. Register at EconomicWarRoom.com to be notified of our launch.
Photo(s) of the Week
A Significant Crisis
FBI & DOJ?
Quote of the Week
"Once again, it is incredible how Obama and the progressive liberals, with the help of mainstream media can so easily convince the American people that a lie is the truth and the truth is a lie. In fact, it would be dazzling if it weren't so disturbing." Plundered by Michael S. Coffman, Ph.D.
“No war is over until the enemy says it’s over. We may think it over, we may declare it over, but in fact, the enemy gets a vote.” --General James Mattis