Albuquerque, DOJ Agree to Police Reform Deal: Independent Monitor, More Training, New Procedures for Investigating Police Shootings

Albquerque cops caught on cameraIn
April the Department of Justice (DOJ)
it had found “reasonable cause to believe” members of
the Albuquerque Police Department (APD) engaged in a pattern and
practice of excessive force and other civil rights violations.

Among the reasons for the DOJ to initiate the review was the
staggering number of police shootings in the city; 41 in the last
five years, 27 fatal. It comes out to an annual rate of 1.5 per
100,000. Compare that to the 2012 murder rate: 7.3 per 100,000. The
population from which perpetrators of police shootings come from is
a lot smaller than the population from which murderers in
Albuquerque come from.

The DOJ and the city of Albuquerque entered negotiations earlier
this year over reforms to address the review of the police
department, and have reportedly come to an agreement that will
involve an independent monitor and new training and procedures for
investigating police shootings. The AP

Attorney General Eric Holder said the agreement will transform
the culture and practices of the Albuquerque Police Department,
“And I am confident that, with the cooperation of city leaders and
brave law enforcement officials, we will take significant steps to
restore trust with local citizens and build for Albuquerque’s
residents the stronger, safer, and more secure communities that all
Americans deserve.”

The agreement with Albuquerque is the DOJ’s 16th since 2010. The
Albuquerque city council is expected to vote on the agreement next
week. The Albuquerque police union hasn’t
interested in reform. The city has had a
long history
of trouble with cops.

from Hit & Run

Targeted Surveillance? NSA Says It Can’t Distinguish American Emails From Foreign Missives.

How carefully targeted is National Security Agency (NSA)
surveillance of email and other electronic communications?
According to an internal NSA memo, “it is not possible to determine
what communications are to or from U.S. persons nearly as readily
as is the case with telephony, and often is not possible at

The revelation comes in documents
pried from the governments’ sticky fingers by the American Civil
Liberties Union
in the course of its efforts to plumb the
parameters of Executive Order 12333, a secretive directive that
lies behind much of the federal government’s electronic
surveillance. The executive order is intended to authorize efforts
against foreign actors but, as the memo reveals, the snoopers are
pretty much reduced to gathering everthing up and then separating
out the material on which they’re not supposed to be spying after
the fact.

But there may be some problems with asking snoops to respect
your privacy after they’ve gathered your communications.
For one thing, they have a record of not doing that. An internal
NSA legal memo also collected by the ACLU frets that signals
intelligence personnel are engaged in the unauthorized “sharing of
voice cuts and/or similar material compiled in the course of SIGINT
collection with other SIGINT personnel.” The memo goes on to
suggest that the Inspector General “assess whether the SIGINT
personnel involved were spending their work time engaged in
non-productive activity.”

The ACLU’s Ashley Gorski points out that this almost certainly
refers to the sharing of sexy best-of out-takes, as alleged in 2008
by a former NSA military intercept operator.

So when Director of National Intelligence James Clapper
initially denied that government snoops were scooping up Americans’
, then described that answer as “the least untruthful”
response he could give to questioning before finally conceding that
his words were “clearly erroneous,” he wasn’t just blowing hot air.
In the age of nude selfies, smartphone sex videos, and erotic
texts, he was probably loath to lose out on some fine

from Hit & Run

Gold Falls, Stocks Record Highs as Japan Goes ‘Weimar’, “Here Be Dragons”

Stocks globally surged, while gold fell sharply today despite renewed irrational exuberance on hopes that the Bank of Japan’s vastly increasing money printing will fill some of the gaps left by the apparent end of Federal Reserve bond buying. 

The BOJ decided to increase the pace at which it expands base money to a whopping 80 trillion yen ($726 billion) per year. Previously, the BOJ targeted an annual increase of 60 to 70 trillion yen.

The BOJ sailed into deeper uncharted monetary territory with the announcement that they would triple annual purchases of exchange-traded funds (ETFs) and Japanese real-estate investment trusts (REITS) to 3 trillion yen and 90 billion yen respectively. 

The Nikkei surged 5% in minutes to a seven year high after the Bank of Japan decision, while gold fell.

These unprecedented monetary events remind us of the old English mapmakers who used to write on uncharted territories on their maps – “Here be Dragons”.

The BOJ claimed the surprise action was due to concerns that a decline in oil prices would weigh on consumer prices and delay a shift in sentiment away from deflation.

BOJ Governor Haruhiko Kuroda portrayed the decision as a preemptive strike to the ‘lost decade’ economy, rather than an admission that his plan to reflate the long moribund economy has so far failed.

The prime reason for the extraordinary monetary policies is likely that the Japanese economy remains very weak and risks tipping over into a depression. Bankruptcies more than doubled to 214 in the first nine months of 2014 compared with the same period a year ago.
Japan has introduced quantitative easing to stimulate the economy and to spur inflation. But it may backfire and lead to stagflation and in a worst case scenario a German ‘Weimar’ style hyperinflation. 

The yen’s real effective exchange rate has dropped to its lowest level since 1982. With Japan easing likely to deepen, the yen may fall to an unprecedented level. Though the fall of the yen may promote exports – energy, food and raw material costs will rise, especially imports.

Given the current weakness what should gold owners do?
Gold, in the short term, looks prone to further weakness. We could see gold test lows of $1,156  which is a 61.8% retracement of the move from the October 2008 low to the all-time high at $1,921.  If clients are worried about their gold position and have short term commitments there are a number of ways to manage downside risk, which may be of interest, please call our office to discuss further.

See Essential Guide to  Storing Gold and Silver In Switzerland here

Today’s AM fix was USD 1,173.25, EUR 933.45 and GBP 733.47 per ounce.
Yesterday’s AM fix was USD 1,205.75, EUR 958.09 and GBP 753.59 per ounce.
Gold fell $12.50 or 1.03% to $1,198.90 per ounce yesterday and silver slid $0.58 or 3.4% to $16.49 per ounce. 

Bullion for immediate delivery lost as much as 2.6% to $1,167.49, the lowest since July 2010 and looked vulnerable to further falls to $1,100/oz. 

Gold in U.S. Dollars – 5 Days (Thomson Reuters)

Silver slid as much as 3% to $16.00 an ounce, the lowest since February 2010. Platinum fell 0.9% to $1,239.75 an ounce. Interestingly, palladium bucked the trend and rose 0.5% to $790 an ounce, after a six days of gains.

Gold fell below $1,200 an ounce as equities and bonds surged – even bonds from Italy to Portugal climbed.

Gold in U.S. Dollars – 10 Years (Thomson Reuters)

Gold is heading for a decline of 4.4% this week, the most since September 2013. The metal is also set for the first consecutive monthly loss in 2014.
Silver is set for a fourth monthly decline that’s the worst run since June 2013. An ounce of gold bought as much as 73.3154 ounces of silver today, the most since April 2009.

If the mooted end of QE in the U.S. is bearish for gold and silver, then it is also equally bearish if not more so for overvalued stock and bond markets. Yet, those markets saw far less volatile trading and many stock markets are back at multi month highs or indeed all time record highs.

The sharp move lower today took place in illiquid Asian markets, soon after the BOJ announcement of the extraordinary new money printing experiment in Japan. This news in itself should have seen gold bounce higher as it is very gold bullish. Instead, gold plummeted lower.

The move lower this week also took place against a backdrop of very high global coin and bar demand in recent weeks which would ordinarily have led to higher prices. It also comes at a time of heightened geopolitical and economic concerns and the emergence of the Ebola virus. Not to mention, the bullish “Save Our Swiss Gold” initiative which will continue for the next four weeks.

As we wrote yesterday, the sudden sharp selling of precious metals this week despite robust demand could be another example of manipulation. Central banks want equities and bonds higher and precious metals lower. The counter intuitive trading action has hallmarks of continuing manipulation of the gold and silver futures market.

Prudent money will continue to dollar cost average into coins and bars on price weakness.

Get Breaking News and Updates on the Gold Market Here

via Zero Hedge GoldCore

5 Things To Ponder: “Spooky” Things

Submitted by Lance Roberts of STA Wealth Management,

I love this time of year, in particular it is the festivities surrounding one of the biggest commercial shopping days of the year – Halloween. According to Wikipedia:

"Halloween, or Hallowe'en, is a contraction of "All Hallows' Evening",also known as Allhalloween, All Hallows' Eve, or All Saints' Eve, and is a yearly celebration observed in a number of countries on 31 October, the eve of the Western Christian feast of All Hallows' Day.


Halloween initiates the triduum of Allhallowtide, the time in the liturgical year dedicated to remembering the dead, including saints (hallows), martyrs, and all the faithful departed believers. Within Allhallowtide, the traditional focus of All Hallows' Eve revolves around the theme of using "humor and ridicule to confront the power of death."


According to many scholars, All Hallows' Eve is a Christianized feast initially influenced by Celtic harvest festivals, with possible pagan roots, particularly the Gaelic Samhain. Other scholars maintain that it originated independently of Samhain and has solely Christian roots."

However, most importantly, it is a great time to spend with family and friends, dress up in costumes and over indulge in the many "treats" that come along with the celebration.

I thoughts this weekend's reading list should maintain the focus of "scary" ponderances now that the Federal Reserve has ended their latest monetary iterations.  So with that said, grab a Reese's or two from your kids treat bucket and enjoy this weekends "5 Things To Ponder."

1) Zombie Land, USA by Elizabeth MacDonald via Fox Business

"Historic bailouts have increased the number of corporate zombies living off of easy money, hindering restructurings and holding back the expansion of healthier companies, restructuring experts here and in the U.K. warn.


"Capital is not being recycled and reinvested, impeding the “creative destruction” process Austrian economist Joseph Schumpeter says is vital for any healthy economy.  Executives at big accounting firms like Ernst & Young have also warned zombie companies are grabbing market share from healthy companies."


2) The Fed's Lack Of Conviction Is Warranted by Mohamed El-Erian via Bloomberg

"Fed officials welcomed the continued improvement in the economy, particularly signs that the underutilization of labor resources is gradually 'diminishing,' though only 'gradually' despite 'solid gains and a lower unemployment rate.' On the second element of its dual mandate — stable inflation — the central bankers acknowledged the fall in market measures of forward inflation but played down the risk of damaging deflation by also pointing to other metrics of inflationary expectations.


This apparent lack of conviction, while frustrating to many, is understandable and warranted.


Because it faces a historically unusual mix of cyclical, structural and longer-term issues, the behavior of the U.S. economy isn't easy to capture well with existing models, including those used by the central bank. The nation’s policy response has fallen well short of the “first best” given the constraints imposed by the political polarization in Congress on virtually every policy-making entity other that the Federal Reserve; and the central bank doesn't have sufficient instruments to compensate for this."


3) The $75 Trillion Spectre by Szu Ping Chag via The Telegraph   

"Global shadow banking assets rose to a record $75 trillion (£46.5 trillion) last year, new analysis shows.


The value of risky investment products, mortgage-backed securities and other non-bank entities increased by $5 trillion to $75 trillion in 2013, according to the Financial Stability Board (FSB).


Shadow banking, which is not constrained by bank regulation, now represents about 25pc of total financial assets – or roughly half of the global banking system. It is also equivalent to 120pc of global gross domestic product (GDP)."

 What could possibly go wrong?


4) The Truly Scary Picture Of American Wellbeing Since 1979 by J. Bradford Delong via Project Syndicate

"The story goes like this: Since 1979 – the peak of the last business cycle before the inauguration of Ronald Reagan as President – economic growth in the United States has been overwhelmingly a rich-only phenomenon. Real (inflation-adjusted) wages, incomes, and living standards for America’s poor and middle-class households are at best only trivially higher. While annual real GDP per capita has grown 72%, from $29,000 to $50,000 (in 2009 prices), almost all of this growth has gone to those who now occupy the highest tier of the US income distribution."

Also Read: For 90% Of American's There Has Been No Recovery and The Statistical Recovery Continues


5) Trick Or Treat – $65 Oil Is Coming by Derek Thompson via The Atlantic

"Gas prices are falling below $3 a gallon across the United States for two big reasons: (1) the world economy is growing slower than we hoped, and (2) global oil production is improving faster than we expected."

Also Read: How Long Can The Shale Boom Last by Nick Cunningham via ZeroHedge

Also Read: Houston We Have A Fracking Problem



We're Way Overdue For A Real Correction by Joe Calhoun via Alhambra Partners

"Investors seem to think that markets are binary, either rising or falling, bull or bear, but the market actually spends a lot of time doing neither. An old Wall Street adage says that tops are a process while bottoms are an event. When we think back about previous markets we often forget how long things take to happen. Looking back on a long term chart tends to compress the time frame and we remember things happening a lot faster than they actually did. Turning points in markets, despite the old saying, take time to happen. Bottoms are remembered to the month."

When You See It…Run by John Hussman via Hussman Funds

"The next several sessions could contain a significant further short-squeeze or a vertical collapse, and we have very little predictive basis for that distinction. Longer term, we continue to view present market conditions as among the most hostile in history, coupling rich valuations with market internals that remain unfavorable on historically reliable measures. So allow for any sort of action in the near term, but recognize that from a full-cycle perspective, we continue to view a 40-50% market loss as having very reasonable plausibility over the completion of this market cycle.


To reiterate what I wrote in June 2008, just before the market collapsed, “Again, falling interest rates, moderate valuations, and very strong market action early into the rebound are useful in separating sustainable advances (even sustainable bear-market rallies) from the fast, furious, prone-to-failure variety.” Those would still be among the primary considerations that would lead us to an optimistic or aggressive market outlook. As always, the strongest market return/risk profiles we identify are associated with a material retreat in valuations coupled with an early improvement in market action. We’ll take our evidence as it arrives."


via Zero Hedge Tyler Durden

Criminal Case Reopens the Issue of Marijuana’s Legal Status

week a federal judge in California
held a hearing
on marijuana’s legal status under the Controlled
Substances Act (CSA). The context was not, as you might expect, one
of those rescheduling petitions that the Drug Enforcement
routinely rejects
. Instead it was a criminal case. U.S. v.
, in which a man charged with marijuana cultivation
is seeking dismissal of the indictment by
that the plant’s Schedule I status violates the Fifth
Amendment’s guarantee of equal protection. The defendant, Brian
Pickard, maintains that putting marijuana in the CSA’s most
restrictive category is so arbitrary and unscientific that it fails
even the highly deferential “rational basis” test, which is the
standard courts generally use for equal protection cases that do
not involve a “suspect class” such as race. 

While marijuana’s legal status is certainly irrational as that
term is usually understood, that does not mean courts will
recognize it as such for constitutional purposes. To pass the
rational basis test, a law must be rationally related to a
legitimate government interest. But in practice, courts will accept
pretty much any justification that a government lawyer can offer
with a straight face. Furthermore, the courts so far have upheld
the DEA’s refusal to reclassify marijuana. Given the DEA’s legal
track record in this area, it is all the more remarkable that U.S.
District Judge Kimberly Mueller, against the prosecution’s
objections, agreed to a hearing on whether
marijuana belongs in Schedule I
, which is supposedly reserved
for drugs with “a high potential for abuse” that have “no currently
accepted medical use” and are so dangerous that they cannot be used
safely even under a doctor’s supervision.

Although marijuana is supposed to meet all three of those
criteria, it is doubtful whether it meets any of them. Like any
psychoactive substance, marijuana has some potential for abuse, but
it seems absurd to assert, as its placement in Schedule I
signifies, that it has a higher potential for abuse than
methamphetamine, morphine, and cocaine, all of which are Schedule
II drugs, the barbiturates in Schedule III, or the benodiazepines
in Schedule IV. In his
to dismiss the charges against him, Pickard notes that
marijuana has a stronger safety profile than many prescription
drugs in lower schedules as well as several over-the-counter
medications. To rebut the DEA’s claim that marijuana has no
accepted medical use, he cites the substantial body of research on
marijuana’s medical applications, its acceptance as a medicine by
nearly half of the states, the willingness of doctors in those
states to recommend it for patients, and survey data indicating
that most doctors think medical use of marijuana is appropriate in
some cases.

Defense witnesses elaborated on these points in their
this week, highlighting marijuana’s long history of
use, its remarkable safety, and the evidence of its medical
utility. Philip Denney, a California physician specializing in
cannabis recommendations, noted that the federal government
implicitly recognizes marijuana as a medicine by shipping it to
patients under the so-called
Investigational New Drug program
, which has been closed to new
applicants since 1992 but still supplies several patients. The
Leaf Online 
that Assistant U.S. Attorney Richard Bender objected to that
testimony, but Judge Mueller allowed it because Bender was not
quick enough with his objection. Bender also helped the defense by
noting, while questioning Denney about a study of marijuana as a
treatment for chronic pain, that “both smoked marijuana and oral
THC were effective.” 

According to The Leaf, another assistant U.S. attorney,
Gregory Broderick, “stumbled badly” while cross-examining Columbia
neuropsychopharmacologist Carl Hart. Trying to highlight
marijuana’s potential for abuse, Broderick cited an estimate, based
on data from the National Comorbidity Survey, that 9 percent of
cannabis consumers qualify for a diagnosis of “substance
dependence” at some point in their lives, based on the criteria
laid out in the American Psychiatric Association’s Diagnostic
and Statistical Manual of Mental
 (DSM). Hart noted that the latest
edition of the DSM says tolerance and withdrawal—two
indicators of what the DSM now calls “substance use
disorders”—are “normal symptoms to be expected of legitimate
medical cannabis use.” That point “appeared to stun Broderick,”
The Leaf

Hart also might have noted that the
from which Broderick drew the estimated addiction rate
for marijuana found that the rates for cocaine and heroin were
substantially higher. Yet cocaine and morphine (which is what
heroin becomes after injection) are both in Schedule II, which
means they supposedly have a lower potential for abuse than

The problem is that key terms in the CSA are undefined, leaving
the DEA with a
great deal of discretion
in applying them. If you define
“potential for abuse” based on a drug’s appeal to recreational
consumers (all of whom are, from the DEA’s perspective, drug
abusers), putting marijuana higher on the list than oxycodone makes
sense, because it’s a lot more popular. If you define “accepted
medical use” as approval by the Food and Drug Administration (or
completion of all the research that would be necessary for FDA
approval), it follows that marijuana (as opposed to synthetic THC)
is not an accepted medicine, which may also imply that it lacks
“accepted safety for use…under medical supervision,” especially
if you consider the risk of recreational use (a.k.a. “abuse”) an
intolerable danger. The DEA does not have to define these terms in
a way tailored to keeping marijuana in Schedule I, but so far the
courts have said it can.

from Hit & Run

David Harsanyi on Deteriorating Relations Between Israel and the Obama Administration

The Atlantic’s Jeffrey Goldberg has written a
piece detailing the deteriorating
relationship between Israel and the Obama administration
. None
of it is especially shocking, considering the antagonism the
administration has shown toward the Jewish state from the start,
argues David Harsanyi. 

Most people have focused on the name-calling, and Goldberg keeps
a list of pejoratives used by U.S. officials to describe Netanyahu,
including “aspergery.” Is being anti-Netanyahu tantamount to being
anti-Israel? Well, no, writes Harsanyi—although, it’s certainly
fair to point out that the administration’s public demeaning of an
ally’s elected leader is nearly unheard of. But you know what is
unmistakably anti-Israel? Gloating over how the United States has
strong-armed Israel into living with a nuclear Iran. 

View this article.

from Hit & Run

Judge Blocks Maine Ebola Quarantine, Feds Announce Lots of Climate Change Plans, Google Fined Over Boobs: P.M. Links

  • I don't think we're going to have a hard time keeping track of where that nurse is.A judge has ruled that Maine
    health officials
    cannot quarantine nurse Kaci Hickox
    over fears she may have
    Ebola because she has no symptoms. He ruled that the state can
    continue to monitor her, and she must coordinate any travel with
    state officials.
  • Eric Frein, the man accused of ambushing Pennsylvania state
    troopers (killing one) and fleeing into the wilderness for 48 days
    before getting caught last night, has formally been
    charged with murder
  • Friday’s news dump from the Obama administration includes
    thousands of pages describing what various federal agencies will be
    doing to
    combat climate change
    . No doubt these potentially costly
    proposals will get lots of attention and analysis the weekend
    before midterm elections and amid all this Ebola-mania. (Yes, that
    was sarcasm.)
  • A judge in Virginia ruled that criminal defendants can be
    forced to cooperate with police if they use
    fingerprint locking
    for their smart phones and open them up,
    because fingerprints are more like keys than like passcodes.
  • The family of a man who
    died in Rikers Island prison
    , nearly cooked to death after
    being left in an extremely overheated prison cell, have been
    awarded $2.25 million from New York City in a settlement.
  • Google has been fined $2,250 for a street view image in Canada
    showed a woman’s cleavage

Follow us on Facebook
and Twitter,
and don’t forget to
 for Reason’s daily updates for more

from Hit & Run

The Halloween Yen Massacre Sends Market To All-Time Highs


  • USDJPY rose 2.7% today – biggest day in 18 months back to Oct 2007; +3.7% on the week – bighest week since Dec 2009
  • Nikkei +7.7% today – biggest day since March 2009; +10% on the week – biggest week since Dec 2009
  • Russell 2000's up over 6% – best month in 15 months
  • Russell +1.2% year-to-date
  • Nasdaq at March 2000 highs
  • 5Y yields up 12bps on the week – biggest increase in 6 months
  • 2Y yields up 11bps on the week – biggest increase in over 3 years
  • 5s30s flattened 10bps on the week – biggest flattening in 7 months
  • Silver -6.1% on the week – worst week in 16 months
  • Gold -4.7% on the week – worst week in 16 months

Perhaps the look on Jeff Cox's face sums up the day as talking head after talking head stepped up to reassure investors that the market is not beholden to central banks… despite the most in-your-face example of it since the PPT in 2008…

Shorts were squeezed the most on the week since Dec 2011


Oddly, despite all the mainstream media hype, being "short" the weakest balance sheet companies (based on Goldman's "most shorted" index) has actually outperformed all major stock indices year-to-date


But year-to-date bonds remain the biggest winners, silver the big laggard and the S&P up exactly the same amount as the USD….


October ended up being quite a month for stocks… best month for Small Caps in 15 months


And off the Bullard QE4 lows…


as the week's strength was all about fundamentals…


The day was odd to say the least – all the action occurred overnight and stocks actually faded off opening highs all day… until the close when we melted up…


As any question of sustainability was thrown out the window as VIX was heavily bid... until the late day when it melted up


HY Credit was not buying the exuberance either…


as stocks and bonds swung around each other…


Of course it was really all about USDJPY and Nikkei – that is a 1230 point rally in the Nikkei! and a 3 handle rip in USDJPY


Kuroda is happy


Nikkei's move since the FOMC in context


On the week, Treasuries closed higher in yield with a notable bear flattener... (30Y +2bps, 5Y +12bps)


The USDollar was strong all week, especially post FOMC as EUR and JPY weakness dominated


Commodities were weak as the US rallied but PMs were crushed…


Charts: Bloomberg

via Zero Hedge Tyler Durden

Peter Suderman Reviews Nightcrawler

the opening bit of my review of Nightcrawler from today’s
Washington Times

In “Nightcrawler,” Jake Gyllenhaal plays Louis Bloom,
an aimless Los Angeles misanthrope who finds the perfect gig:
freelance TV news photographer on the vampire shift, capturing the
nocturnal horrors that lead the morning.

Mr. Gyllenhaal looks more than a little like a vampire
himself, with his bugged-out eyes, his slicked-back midnight hair,
and his sharply angled facial features, as if too-little skin has
been stretched around too much skull.

He rarely blinks, and when he smiles, or scowls, or expresses
anything with his face at all, it has the feel of a too-well
practiced maneuver, a simulacra of emotion rather than the real

Mr. Gyllenhaal’s Bloom is the heart and soul of “Nightcrawler,”
which is to say that it hasn’t got one. Instead, it is
fascinatingly empty — a dark, shocking, bitingly funny profile of a
person who is not really a person.

Bloom is an anti-hero in the tradition of both Patrick Bateman
in “American Pyscho” and Travis Bickle in “Taxi Driver,” a movie
that “Nightcrawler” coyly references in its opening moments.

But writer-director Dan Gilroy gives Bloom’s
alienation a distinctly modern twist: Instead of learning by
watching and imitating, he studies by using the Internet.

Read the complete review

Check out Kurt Loder’s review for Reason here

from Hit & Run