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There was much vitriol surrounding the inauguration of Donald Trump as the 45th President of the United States. One thing that struck me was the frequency with which commentators threw around the words fascism and fascist. For example, The Huffington Post warned that Trump’s Emerging Fascism Threatens The Nation; Salon chastised the country with the headline Congratulations, America– you did it! An actual fascist is now your official president; The Nation predicted that Anti-Fascists Will Fight Trump’s Fascism in the Streets. There is even a website called refusefascism.org that urges Americans to “stay in the streets to stop the fascist Trump/Pence regime.”

With all the voices warning of the rise of fascism in America, it would serve us well to define fascism to ensure we understand each other and can discuss the matter with intelligence and civility. Our friend Sheldon Richman is helpful on this point with his thorough entry in The Concise Encyclopedia of Economics. Here is an excerpt:

As an economic system, fascism is socialism with a capitalist veneer. . . . Fascism substituted the particularity of nationalism and racialism –”blood and soil”–for the internationalism of both classical liberalism and Marxism. . . .Where socialism sought totalitarian control of a society’s economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. . . . Under fascism, the state, through official cartels, controlled all aspects of manufacturing, commerce, finance, and agriculture. Planning boards set product lines, production levels, prices, wages, working conditions, and the size of firms. Licensing was ubiquitous; no economic activity could be undertaken without government permission. Levels of consumption were dictated by the state, and “excess” incomes had to be surrendered as taxes or “loans.”

Trump is undoubtedly a nationalist and proudly declared during his inauguration address that he would put “America First.” Inasmuch as nationalism is a critical ingredient of fascism, it is indeed present. But notably absent from the Trump agenda is cartelization of American business, planning boards, or control of economic activity or consumption. Instead, Trump seeks to reduce government regulation, has imposed a hiring freeze on federal agencies, and advocates cutting taxes–the lifeblood of the state.

While there are many criticisms one can raise about Trump and certain of his policies, fascism is not one of the them. Unfortunately, fascism has become a label attached to anything a speaker does not like. Modern use of “fascism” is empty and imprecise. If you want to criticize Trump feel free to do so–but please offer reasoned arguments rather than lazily labeling the man as something that he clearly is not.

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By now, everybody has heard the rumours coming out of Denver that Matt Duchene and Gabriel Landeskog could be had via trade for the right package. It’s also been heavily speculated that Colorado Avalanche general manager Joe Sakic is looking for a promising young blueliner as part of any return for one of his two star forwards.

One team that has the pieces needed to make such a blockbuster deal is Chuck Fletcher’s Minnesota Wild.

Proposed Trade

Colorado Avalanche general manager Joe Sakic (left). (Ed Mulholland-USA TODAY Sports)

Would Sakic and Fletcher agree to a deal that would send the underachieving but electrifying Duchene to the Gopher State along with 6’5″ defenseman Nikita Zadorov in exchange for 23-year-old rearguard Jonas Brodin, former fifth overall draft pick Nino Niederreiter and Minnesota’s first-round pick in 2017?

A trade involving these players would be a major shakeup for both franchises so the proper time for it to take place would be following the conclusion of the 2016-17 season but prior to June’s expansion draft.

Why Does Colorado Do It?

It’s no secret that Colorado management have been listening on Duchene and Landeskog for a little while now and it’s been widely speculated that they don’t want to go into the 2017-18 campaign with both players still on the roster. It’s also been reported, however, that Sakic and company don’t intend to give either one of their stars away for a less than stellar return and that they’ll be more than willing to hold onto the duo until they are offered a package that meets their demands.

It’s improbable that both franchise forwards find new addresses in coming months and, when push comes to shove, the Avs would likely prefer to hold onto Landeskog over Duchene as he’s a year younger and the team’s captain.

Jonas Brodin (Tom Szczerbowski-USA TODAY Sports)

As far as the above-mentioned trade proposal goes, the Avalanche have a glaring need for a solid young blueliner and Brodin fits that bill perfectly. The fifth-year veteran has over 300 games of NHL experience to his name, is still only 23 years of age, and has another four seasons remaining on an affordable contract.

Making the deal even more enticing to Sakic is the fact that Brodin is a left-shot defender who plays a controlled and calming game, has experience logging big minutes alongside established veterans and has had success matching up against the opposition’s top players.

The right-side depth chart for the Avalanche already boasts the names of Erik Johnson and Tyson Barrie but their left side is slim pickings beyond an aging Francois Beauchemin. A defenseman like Brodin could step right into the vacant spot alongside Johnson on the Avalanche’s top pairing beginning in 2017-18.

Niederreiter, meanwhile, is a big-bodied winger who drives possession. If acquired, the Switzerland native would be poised to play a more prominent role in Colorado than he currently does in Minnesota where he’s consistently battling for top-six minutes with fellow wingers Charlie Coyle, Mikael Granlund, Jason Zucker and Zach Parise. The 6’2″ forward is versatile in that he can play either wing and has recently shown more frequent indications that he could be on the cusp of breaking out and becoming an offensive threat in his own right.

Nino Niederreiter (Amy Irvin / The Hockey Writers)

A 23-year-old forward with over 350 games of NHL experience already under his belt, Niederreiter could find himself as high up on the Avalanche depth chart as their first-line right winger. Having Niederreiter in the fold would give head coach Jared Bednar the option of forming a potential lethal top line by placing him alongside Landeskog and centre Nathan MacKinnon.

The 2017 first-round draft pick is projected to be a late one given Minnesota’s current record but is often a requirement when a player of Duchene’s caliber is traded. The pick would help further the Avalanche’s rebuilding plans and provide them with another key piece to their long-term puzzle.

Expansion Draft Implications for Colorado

The Avalanche don’t have a lot of concern over the looming expansion draft given the way their roster is assembled right now. The team has room for flexibility to go along with plenty of protection slots available for players coming in via trades.

If the proposed trade were to take place then it would be assumed that Colorado management would choose to protect eight skaters and one goalie from expansion. The logical eight protected skaters would be Brodin, Johnson, Barrie, Beauchemin (no movement clause), Niederreiter, MacKinnon, Landeskog and another forward like Mikhail Grigorenko. The biggest decision for Colorado would be choosing between Varlamov and Pickard as the goalie receiving protection.

The proposed trade with Minnesota would still allow the Avalanche to protect the assets coming in without worrying about the need to expose any existing roster players deemed irreplaceable.

Why Does Minnesota Do It?

The Wild are enjoying a fantastic season but, if you had to pick one weakness, the biggest need in Minnesota would have to be down the middle of the ice.

Photo: Chris Humphreys-USA TODAY Sports

The team is employing veteran Eric Staal as their first-line centre with captain Mikko Koivu occupying the number two hole. Admittedly, this deployment is working out wonderfully for the Wild in 2016-17 but it could be argued that both men would ideally be bumped down one rung on the depth chart to make way for a younger franchise-level pivot in future seasons.

There’s also the critical factor that Koivu is only signed for one more year beyond this season and there’s no guarantee that he’ll remain in Minnesota once his contract runs out.

The rest of the team’s centre depth includes speedster Erik Haula filling in on the third line and hulking rookie Tyler Graovac manning the fourth-line spot. Haula is capable of holding his own on the third line but is at risk of being selected in the expansion draft while Graovac has yet to solidify himself as an every day player.

Another key to the equation for Minnesota is 19-year-old Joel Eriksson Ek. The Swede should be able to step in and grab one of the Wild’s centre vacancies as early as next season but, while he’s had  impressive showings at several different levels of hockey, he’s not projected to become a franchise centre.

All things considered, Eriksson Ek’s ceiling and eventual role in Minnesota might be as Koivu’s successor — a strong two-way pivot with respectable offensive ability and strong leadership qualities.

Enter Duchene — a highly-coveted forward with game-breaking skills that the Wild haven’t had on their roster since the early days of Marian Gaborik.

Acquiring Duchene would provide head coach Bruce Boudreau with a dynamic offensive player similar to those he’s had during his stints in Washington and Anaheim. The coach could deploy a lineup featuring Duchene, Staal, Koivu and Haula or Eriksson Ek down the middle with four skilled wingers — Coyle, Granlund, Zucker, Parise — lining up in top-six positions.

Additionally, veterans Jason Pominville and Chris Stewart would remain as bottom-six options while impressive prospects like Jordan Greenway, Alex Tuch, Kirill Kaprizov and Luke Kunin wait for their chance.

Nikita Zadorov (Gary A. Vasquez-USA TODAY Sports)

Zadorov would help limit the impact of losing a significant piece in Brodin, either by suiting up for the Wild himself or by helping the team retain the services of Marco Scandella in the expansion draft. The big Russian defender hasn’t exactly been the perfect fit in Colorado but could find himself in a better developmental environment as a member of the Wild.

The trade also works from a cap perspective with $6 million tied to Duchene coming in alongside the soon-to-be restricted free agent Zadorov who shouldn’t command too much on a new deal. Coming off the books would be Brodin’s cap hit of just under $4.2 million and Niederreiter’s projected cap hit which should be a nice raise from the shade under $2.7 million he’s banking this season.

Expansion Draft Implications for Minnesota

Minnesota would make this deal primarily because of their dilemma with the expansion draft and the possibility of losing a really good player to the Vegas Golden Knights with no assets coming back in return.

As it stands today, the Wild will probably go the route of protecting seven forwards, three defensemen and a goalie which would result in management having to choose between keeping only one of Brodin or Matt Dumba safe from being chosen in the expansion draft.

With the reality that either of these players would be snapped up immediately if left exposed, combined with their perceived value across the league, Wild management would be doing the franchise wrong if they didn’t do everything in their power to avoid simply losing a legitimate high-end defenseman for nothing.

Acquiring a player like Duchene would enable the Wild to protect him from expansion along with other forwards Staal, Koivu, Parise, Coyle, Granlund and Zucker. They could then keep Ryan Suter, Jared Spurgeon and Dumba safe on the backend in addition to Devan Dubnyk in goal.

This would give the Golden Knights a choice between players like Haula, Scandella and Zadorov which would be a much easier pill for Minnesota fans to swallow than losing Brodin or Dumba and, at the same time, would ensure that the Wild have a well-balanced and competitive roster heading into 2017-18 and beyond.

It should be noted that this projected protection list was made with the assumption that Pominville will either be asked to waive his no movement clause or be bought out.

The foundation for a significant trade between Minnesota and Colorado definitely exists and both franchises will be ones to watch prior to June’s highly anticipated expansion process.

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Everyone has a camera these day, and social media has taken over with these devices, YouTube is one of the fastest growing media sites and hockey is on its radar. The cellular revolution has pretty much made certain that every mobile phone now has a camera attached. Gone are the days of the bulky video cameras, and now are the ways of the slim, fits in your pocket, ready at any moment video taking device. While these cameras are awesome for catching your baby’s first step at a moment’s notice, they are also adept at catching others at their first or second misstep. With the advent of YouTube, everyone with a smart phone is now a potential film maker. I perused through the recent archives of YouTube to see exactly how YouTube views hockey. It is fairly easy to access the archives of history both good and bad on YouTube.
When it comes to the sport of hockey, is YouTube helping to preserve our best and most powerful images in hockey, or our worst? What exactly does YouTube have to show about hockey?

The Good

Every once in a while, we get a commercial that makes us stop and stare. Seeing something so ncredible as Bobby Orr flying through the air, is one of those times. Some commercials encourage us to buy this or that, The History Will Be Made commercial, made us want to fly too, and it certainly made us want to stick with watching the playoffs in 2001. The commercial series also has one of the best musical scores made, making every commercial historical in its own right. YouTube did good in preserving this awesome piece of hockey advertising.
History Will Be Made Commercials

After the tumultuous fall, we all need a reason to get excited about hockey. This YouTube clip illustrates the desire to turn up the love and turn back on our sets, after all Hockey is Back! Something even YouTube can’t deny.
Hockey is Back

The Great

There’s something that the coolest goals, the best saves, and the most awesome fights can’t hold a candle to. You know it’s ‘Hockey Night In Canada!’ when you hear, ‘The Good Old Hockey Game.’ By Stompin Tom Connors. We lost this icon of hockey history last week on March 6, 2013 at the age of 77. He had a lot of songs, but can’t imagine Saturday nights without him. YouTube definitely placed him in perpetuity, a pioneer and a poster boy for our love of hockey.
The Good Old Hockey Game

The Sad

One of the most difficult things in a sport or organization is lose someone, albeit in the most horrific of all instances a whole branch or team. Team Locomotiv Yaroslavl of Russia failed to gain altitude, catching fire therefore losing all 45 people on board except for the avionics flight engineer on September 7, 2011. The wonderful thing about YouTube is that things we ordinarily wouldn’t have an opportunity to see due to events in other cities and other times, we can now see. This tribute is one I can’t imagine seeing in person without a handkerchief or tissues, it’s that we’ll done, and that worth preserving.
Ruslan Salei Sand Art Memorial

One of the most touching things about video memorials, and especially this one dedicated to the whole of the Yaroslavl Locomotiv team, is that they preserve people at their prime. YouTube captures them at their best, their youngest, their strongest. Those guys who p,sued their hearts out, will never grow old, never lose their youth, never retire. They will be alive and well, young and vibrant for all of eternity. This is how we are supposed to be remembered.
KHL Memorial

The Bad

Can something as ground breaking as YouTube, ever make a misstep? Well, since its videographers are human, yes it can. And never more than when you give a kid a camera. While YouTube can preserve great moments, it can also preserve great embarrassments. Take the team from Nyack. Some kid got the great idea to do a hockey room rendition of the Harlem Shake, and post it on YouTube. Now their playoffs are history. While my back round is in education, (I may get pummeled for my opinion) I think pulling the kids out of the play offs is a bit harsh. Serving detention for a month, assisting the custodians, etc. is more appropriate than taking away something they earned due to a video that thousands have replicated. This is definitely one team that will learn more than improved power skating over the summer. They will have learned to leave the power of leaving their phone at home.
The Harlem Shake

Life in other countries always intrigues us. Do they eat they way we do? Do they raise their kids like us? Do their kids p,ay hockey like us? Well, in the Russian town, they play hockey, for sure. And it’s a bloodsport, but it’s a ten year old bloodsport. I was surprised to see that so many kids drew penalties and were so aggressive. The video is kind of funny, but yet really sad in that these are the future players of some pro teams. Hockey parents and coaches must be win at all costs, But it isn’t always the best way to win at that age. Do all hockey enforcers come from the same place? If not, they might all in the not so near future!
10 year old Teams In The SIn Bin

The Joy of Victory

If you’re an Amercian, and you aren’t a fan of hockey, there’s no doubt that you were a huge fan on this particular day. Back in the Cold War beginning Reganomics era, anything to do with Russia was frowned upon. Except for beating them. Take a group of college kids, let them practice, throw Ina crusty coach, and pray for a miracle. When you find out one of the powerhouses of hockey-Russia to say the least was going to play you for the Olympic gold, you do a lot more than sweat. I bet those guys were having panic attacks. How else could we explain that to the Russians they just lost a game they thought they could easily win; while our confidence didn’t allow for that fact, we couldn’t believe we won, and still can’t theirty years later. A miracle on ice it was and always will be.

1980 Do You Believe in Miracles

Last year was a great draft year. I admit being partial to the Avalanche, and boy did we get the good end of the deal when the Oilers went with Ryan Nugent-Hopkins. Being second doesn’t always mean being picked last. Colorado has a history of playing their drafts, and boy did second pick Gabriel Landeskog of the Kitchener Rangers get some play time. He even inadvertently created a new word and physical position for winning a goal-Landeskogging. He takes every bit out of the joy he deserves in making some of the greatest most needed goals. He is one fun guy to watch. I can only hope we see a lot more Landeskogging in the future.

Landeskogging

The Agony of Defeat

You might remember years ago if you’re an American, Saturday afternoon on the television were reserved for sports. They even had a great commercial that showed the examples of the thrill of victory and the agony of defeat. The thrill of victory in this article, I had to cover with the 1980′s Do You Believe In Miracles. The agony of defeat clearly goes Ryan Miller in the gold winning game of USA Hockey versus Canada.
I wonder how many nights he’s gone over that last goal in his head. We’ve forgiven him, but has he forgotten? Can you forget something like that? Maybe 2014 in Souchi will let someone else be the poor guy failing head or heels down a snow bank instead of Miller.

Miller in Olympics

The Funny

Now what would article on hockey through Youtube’s eyes, be without bloopers. Sadly for the athletes, some of the funniest moments in history for the fans, are the moments the athletes would rather we forget. Here’s a sampling of some of the classic bloopers that we can’t seem to let go, no matter how much we love the game.
Bloopers

The Just Plain Angry
If YouTube has done any real damage to hockey, it’s been in letting amateur’s catch us at our worst. Jim Mayfair is the perfect example. After being given a bad call, he flat out LOSES it! The two guys on either side of him are I’m sure were,praying he wouldn’t destroy their sticks. The poor guy looked like he was going to choke himself pulling off his coat and hang himself with his tie on accident.

The Coach Losing It

The Truly Scary

The scariest things YouTube documentsmaremthe injuries. Throat slitting is a big one. It doesn’t happen,frequently, but when it does, you can bet someone’s videoing it. These accidents are as frightening as concussions. The next time you see a guy play NBA or NHL, remember those big boys may fall hard, but they don’t get potentially exsanguinated by the other players’s shoes. These video clips are painful to watch, yet propel us to think of better safety rules.
Throat slit by skate

And the Just Shaking My Head Query

One of the most impressive feats in hockey is Zdeno Chara’s slap shot. The math and physics of his shooting skill is mind boggling. I’m always impressed with the goalies who have to defend their goals against one of his shots.

This leads me into the perfect example of why you should stay way from this guy: if he can shoot that hard and fast, what kind of damage can he do in a fight? What’s more, there are people who actually willing and do fight with him. To me they look little more like rag dolls being tossed around in the hands of the Zman.

I like YouTube. I like a lot of things about it. It’s accessible, you get to relive those great moments, see a moving tribute to someone who deserves our respect and admiration and to live into eternity. I think the following statement applies to hockey fans, ‘If you want to know what someone fears losing, look at what they photograph.’
Just don’t leave the videography in the hands of your child!

Author information

Cherie Tinker

Hockey History Writer at The Hockey Writers

Interests: Reading, writing, art, music, movies, history, and HOCKEY! BS.Ed., MS.Ed.

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This article was originally published at: The Hockey Writers.

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Jason Zucker understands his role as the Minnesota Wild’s resident guru of go. Since his arrival in the NHL, the tempo with which he plays has gone relatively unnoticed because of the team’s lack of success on a large stage, namely in the playoffs.

That’s beginning to change this year. With the best record and offensive output in the Western Conference, the Wild have achieved leaguewide notoriety. As a result, Zucker has established himself as a threat by improving all aspects of his game.

Before and After

In terms of straight-line speed, there are few players in the game that can keep up with Zucker. It’s clear that his fast pace is what makes him effective and he’s utilized it since entering the league.

The issue in past seasons was that he was an enigma, playing his own run and gun style without understanding the pressure it put on his linemates. Despite not being an all-around player, the upside to his chaos was visible as Zucker found the net 21 times in 51 games during the 2014-15 season. Unfortunately, a stellar 16.9% shooting percentage took a sharp decline to 8.2% the next year while scoring just 13 goals in 71 games. Whether teams were prepared to stifle him or it was a stretch of bad luck, Zucker’s game was ripe with inconsistency.

Enter 2016-17. The former second-round pick has earned a permanent home alongside Mikko Koivu and Mikael Granlund as a cog in the Wild’s suddenly high-powered top-six forwards. With 32 points, he’s already surpassed his career high and has been a lightning rod by generating nightly opportunities in a multitude of ways.

Help Along the Way

In terms of overall success this season, two people not named Jason Zucker have assisted in creating the conditions necessary for his breakout season:

Mikael Granlund

It took longer than the Wild hoped, but the two 2010 draft picks are in the midst of breakout seasons. Granlund and Zucker have developed chemistry and compliment each other well. Granlund is the nifty playmaker that can pass while Zucker creates separation and is relentless on the forecheck. Of Zucker’s 14 goals this season, Granlund has had the first assist seven times.

Bruce Boudreau

It’s unfamiliar for the Wild to be scoring at the rate they are. From 2000 to 2015, Minnesota’s best goals for per game in a single season was 2.77 due to the defense-first game plan. This season, it has climbed to an uncharacteristic 3.28. Fans can thank Bruce Boudreau for implementing a style that promotes offensive onslaughts. Zucker is tailor-made for this strategy and it’s paying dividends.

Expansion Repercussions

It’s not fun, but I’d be doing a disservice to avoid talking about the Vegas Golden Knights swiping a critical member of the Wild because it’s inevitable.

Early in the season, the consensus was that a defenseman was overwhelming choice to be nabbed in the expansion draft. That’s beginning to look less certain as Zucker is making himself an attractive asset considering the energy he brings and his marketability. At this point, he could be left exposed as a victim of numbers if the Wild can’t get creative with other players, namely Jason Pominville.

Jason Pominville and his remaining contract will need to be addressed this offseason. He could be the key to Jason Zucker’s future in Minnesota. (Amy Irvin / The Hockey Writers)

The Wild are in a tight position with Pominville and the remaining $11.2 million cap hit he carries over the next two years. If bought out this offseason, his cap hit next year would be $4.35 million, a number I don’t think Minnesota is willing to pay just to get him off the books. Asking him to waive his no-movement clause makes more sense and is likely being explored. Whether either player realizes it, Pominville likely controls Zucker’s future with the Wild.

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Via Dana Lyons' Tumblr,

An approaching level in a lesser-known stock index is, in our view, much more consequential than the widely anticipated Dow 20,000 mark.

With the Dow Jones Industrial Average (DJIA) nearing the 20,000 level, anticipation on the street has become palpable. At our firm, we’ve been putting in late nights all week,   fielding calls from anxious clients. If you’re picking up on sarcasm, it’s because I’m laying it on pretty thick. The big, round 20K number means very little to us from an investment-decision standpoint. There is another, lesser-known index, however, that is approaching a level of major significance, in our view.

The Value Line Geometric Composite (VLG), as we have explained many times in these pages, is an unweighted average that tracks the median stock performance among a universe of approximately 1800 stocks. Thus, in our view, it serves as perhaps the best representation of the true state of the U.S. equity market. Additionally, it has historically been very true to technical analysis and charting techniques, which is quite remarkable considering there are no tradeable vehicles based on it. And, as noted, the VLG is testing a monumental level at the moment, going back several decades.

In 1998, the VLG topped out just north of 500 before getting cut in half over the next 4 years. In 2007, the index once again climbed back over the 500 level. It subsequently again over the next two years – this time by 70%. After a five year rally, the VLG finally made it back to the 500 level again, as we noted back in July 2014. For a third time, the index was rejected at that level dropping hard into the fall of 2014. Finally, in the spring of 2015 the VLG was able to surpass the peaks just above 500, rallying as high as 523 In April 2015. The rally proved short-lived however, as the index proceeded to lose nearly 30% over the next 10 months.

Candidly, it was our view that that false breakout marked the final blow to the post 2009 cyclical bull market.  As such, we expected any subsequent bounce to be a mere bear market rally, falling far short of the previous 3-decade peaks. Up until the election, that notion still appeared on track, as the post-February rally in the VLG fell some 6% shy of its previous highs, even as the large-cap indices went to new highs. The “Trump Rally” has forced us to re-think that view, however.

That’s because the VLG has shot up some 14% since election day and has now arrived in the vicinity of its former highs once again.

The Value Line Geometric Composite may well struggle initially at these levels, as it always has. And, as always, we advise against “anticipating the breakout”. However, this may be the VLG’s best chance yet to break this massive 3-decade resistance. The fact that it avoided a catastrophic selloff (e.g., 1998-2002, 2007-2009) this time before managing to return to its peaks suggests a higher level of demand (cup-&-handle?).

Should the VLG succeed in breaking decisively above its former peaks, its significance probably cannot be overstated. This would be an extremely broad market gauge braking out above 18-year, triple top peaks to new all-time highs. The short-term, and quite possibly long-term, ramifications could be exceedingly bullish.

That is why this 520-ish level in the Value Line Geometric Composite is the key level for investors to watch, in our view – even if no one has made up hats to commemorate it.

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More from Dana Lyons, JLFMI and My401kPro.

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Warning: This story is entirely fictional except for all the parts which are not. It is the story of a 5-step process of the "evolution" of a family office.

I felt compelled to pen this missive since it’s representative of so many family offices out there and maybe in doing so one or two save themselves some potentially painful headaches.

Step 1: The Patriarch Builds His Wealth

This is the story of Hans Krapenschitter and his progeny. It was in the late 80’s that Hans, then in his 30's, made his fortune. Germany was gripped by recession, factories had closed, people had lost their jobs, real estate prices had plummeted, and so too had hemlines. Horrid stuff.

Gurus emerged, telling everyone that the world would never again see greed, avarice, easy credit, or mini skirts.

Instead, the future lay in gathering kale and cabbages from local community gardens, and being subjected to films where “maidens" in long flowing dresses and bonnets roamed meadows, gathering daisies, while falling in love with schoolteachers. There'd be no films where people got punched and shot and even at the raunchiest of clubs, girls skirts would be well below the knee-line.

To Hans, this all sounded like a worst nightmare come true, and knowing a little bit about human nature Hans saw his opportunity. Bucking the trend, he started a company producing T-shirts with skulls on and slogans such as “Ich werde deinen Arsch treten” (I’ll kick your ass).

In addition, he began making the most outrageous revealing woman clothing he could think of. If the world was to devolve into a global version of the Sound of Music, it wasn't going to do so without a fight from Hans.

Fortunately for Hans the recession ended and greed, avarice, and easy credit return with a vengeance. The easy credit helped fuel Hans' business growth, and he captured the vast market share for a new zeitgeist, as footballers' wives became celebrities and women clothing prices became inversely correlated with the amount of material used. The good times were back. 

Ummmm, ok.

Step 2: The Bankers Take Notice

After depositing some sizeable checks with his local bank Hans receives a letter from the bank.

"Dear Mr Krapenschitter,

Let me introduce myself. My name is Mr. Frederick Arsenlichker, and I am delighted to have been appointed as your private banker. We at Ditschke Bank pride ourselves in providing outstanding personal service to our most valuable clients, and I will be at your service to provide you with our most exclusive range of services which are now available to you.

Please let me know a suitable time for us to meet in person to discuss your business and needs.

 

Sincerely,

Frederick Arsenlichker (Private Wealth Management, Ditschke Bank)"

Hans is flattered. He feels valued, not really understanding what just happened (what it really means is that he’s now in line to get spammed all the products the bank has on offer - whether he wants them or not and whether they're any good or not).

Now to Frederick...

To understand Frederick, he’s a guy who spends over an hour in the bathroom every morning, double checks his fringe when passing anything with a reflective surface, and now in his mid-30's has learned all the ins and outs of sales. To be sure, he’s great fun to have a drink with and knows enough about his products to sound awfully smart to the layman. He's damn good at selling the bank's products, but he's never had to manage risk - and this is where the real problems surface (as you’ll see).

This isn't his fault. He’s spent his life on the sell side. Fortunately Frederick is smart and he knows what he doesn’t know. Many like him are like 10-year olds after watching Rockie and, despite not having the muscles and never having learnt how to fight, think they’ve got what it takes to take down 10 men. Just because they’ve watched buy side guys, they think they know what it takes. Most don’t.

Step 3: Hans Needs Help

Hans' business spreads like an Australian bushfire as he breaks into the UK market where "lad culture" is pioneering an entirely new obnoxious breed of buyers, and where there are no ladies, only girls. His clothing brand is THE brand. After securing a distribution agreement with the country's second largest retailer his wealth accelerates.

Aside from the ridiculous house his wife encouraged him to buy on the French Riviera, he now has more and more money which he realises he should probably do something with.

He's made a few investments based on "suggestions" made to him by multiple private bankers.

You see, Frederick isn't the only contact Hans has in banking. Due to his business needs Hans has opened no less than 8 banking relationships and they've all taken notice, appointing private bankers to "assist" Hans.

These private bankers regularly invite Hans to private gatherings and to his delight he's found that tickets to the Grand Prix in Monaco, the finals of the European football championships, and the like are easy to come by. Not that he couldn't pay for them if he wanted to, but it's nice to get free stuff. The problem is that Hans is feeling a little overwhelmed. All this wealth comes with the responsibility to manage it.

He’s known Frederick for several years now and likes him. Many of these other private bankers are a bit too aggressive. There was that one Spanish banker, Eduardo, who tried to get him a prostitute the last time they were at a special cocktail function put on by the bank. He didn't think his wife would appreciate that.

Frederick, on the other hand, has about 100 clients like Hans who he “manages”. He’s getting sick of a base salary with commissions bonus, having to clock in and out of his cubicle like a well trained gopher, and the intellectually vaporise environment of a big bank is suffocating.

On the sly, he’s been looking to leverage his network of investors and putting out feelers.

Step 4: Hans Hires Help

Hans: "Frederick, I'm swamped here. I've known you for a long time now and I trust you. Do you by any chance know of someone in your field who you'd recommend to help manage my money full time?"

Frederick: "Funny you ask. I've been thinking of doing just that myself for a number of clients and would be very interested in doing this for you."

Over some schnapps and sausages, Frederick becomes CIO of the Krapenschitter Family Office, and at long last he can take off the bloody suit and tie and dress in jeans and T-shirts because Hans, after all, has made a living out of clothing that bankers would never wear.

Step 5: The Muddle

And now Frederick must learn really quickly the difference between selling product and investing in product. He quickly reaches out to all his private banker buddies and sources a number of products which Hans can allocate capital into. Since the banks are large fee generating businesses they have two mandates:

1. Generate as much fees as possible and
2. Try keep your clients

Managing the two is tricky business. It requires gently raping the client, but not too roughly that they feel the pain.

One lesson that Frederick has learnt from his years at the bank is that clients hate losing money. As such, fixed income is an easy sell. The fees are still pretty reasonable, and importantly you typically get to keep your customers as you can't lose money on fixed income, right? Ah well, sort of.

What the Sales Guys Don't Fully Understand

Frederick's buddies are all selling either fixed income products or the latest best thing: Low volatility funds. It's the place to be.

You see, they've done nothing but go up for their entire careers (which is to say a decade, two at most). Experience has taught them that this is what works. Their only sense of history is that the iPhone never used to take pictures, like waaay back, and how mad was that?

Frederick's buddies know only that the firms they work for are pushing them to sell these products.

What they don't know is that the low volatility funds they're selling are being repackaged into synthetic bond like products and sold to institutional dumb money.

The way it works is that the proprietary desks write options against these funds and thereby deliver a steady stream of income. This gets packaged and sold as "yield bearing" instruments to pension funds and other dumb money. "They're very low risk," the salesmen say because these are solid equities with extremely low volatility. They're almost like bonds. No, really.

Some of the proprietary traders (the older ones) know the risks and many don't really get it. But so long as Frederick and the long list of clients in the banks' affiliate network keep buying the products, these babies are guaranteed cash cows.

Frederick, after having been in the business for enough years, realises that equities should make up a decent portion of Hans' assets. Because he doesn't follow the markets (I mean, he watches Bloomberg and CNBC but couldn't tell you what drives liquidity, cross border capital flows, money velocity, or why anyone should track the gold price) he's got no sense of market cycles, and simply becomes an asset allocator reliant on his buddies (who are all sell side, remember?) for advice.

And so Hans' portfolio, on paper, looks pretty reasonable, while sporting the kind of risk that Evel Knievel would have shied away from.

Hans is presented with some investment opportunities and, knowing nothing about them, passes them to Frederick to review. Frederick takes a look.

A gold fund? Why on earth would anyone invest in a gold fund, he asks himself?

He googles the gold price and finds that it's been in a bear market for 20 years. What lunatic would invest in this? Crazy!

He emails his buddies asking them if they've got a gold fund in their product lineup and what they think of it. One had a gold fund but it was closed down after lack of performance and lack of interest. Clearly this is a waste of time.

And so Hans, the family patriarch and generator of immense wealth, who never understood the difference between sell side and buy side hired Frederick the now CIO of the Krapenschitter Family Office, in charge of over $450 million.

Unwittingly - and neither realise - it both are drawn into a long daisy chain beginning with product sales which nobody in charge of managing the money actually understands. A chain designed to allow the major banks to make money on both the product fees as well as quietly trading proprietary positions against the products sold which generate amazing returns.

Frederick, for his part, wants to ensure he keeps his job and so he essentially benchmarks and follows his sell side buddies, who, in turn, push products the banks need sold.

While all this is taking place, the market builds the momentum for the inevitable – because every market has a cycle and this one is about to turn.

But Hans is on the Riviera enjoying the sunshine and Frederick is looking forward to a holiday with his new girlfriend. He’s going to take her to Ibiza wearing some of Hans latest product line. It’s truly ridiculous and he can’t wait.

- Chris

"A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain." — Mark Twain

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