As the ‘Justice for Victims of Trafficking Act’ Turns One, Lawmakers Demand DOJ Get Tougher on Ad Platforms and Sex Buyers

It can be difficult to effectively criticize bad responses to good causes. But good intentions plus power, money, and bureaucracy don’t always lead to the best incentives or outcomes. And this dynamic was on full display last Wednesday on Capitol Hill, where a bipartisan roster of U.S. representatives had come together to talk about the Justice for Victims of Trafficking Act (JVTA). 

The JVTA was passed by Congress in May 2015 with near unanimous support. One of just three dissenters in the House was Rep. Bobby Scott (D-Va.), a staunch advocate for criminal sentencing reform. Scott objected to the JVTA’s creation of a 10-year mandatory minimum sentencing requirement for advertising platforms that facilitate sex trafficking. In theory, that requirement might sound noble, but in practice it targets websites such as Craigslist, Backpage, and other user-generated content platforms where anonymous individuals post millions of ads each week. Under the JVTA, the presence of a single sexually-oriented ad posted by someone under 18 could trigger sex-trafficking charges for anyone involved with running the platform. 

Rep. Ann Wagner (R-Mo.) said at the press conference that she hopes the Department of Justice (DOJ) will make more use of the advertising clause in the upcoming year. “ has sued the federal government,” said Wagner (more about that lawsuit here), “and I’m proudly named in that suit. I consider it a badge of honor. If these horrific internet websites want to sell our children online it is not… a freedom of speech issue, it is a crime. And the SAVE Act, and JVTA, say ‘this is a crime.'”

Free speech, civil liberties, and sex-worker rights advocates say diffently, of course, pointing out that Backpage cooperates extensively with law enforcement when ads are suspected to feature underage individuals, and the overwhelming majority of ads posted on the classified-ad site have nothing to do with sex or human trafficking. 

But Wagner is just one of 37 legislators calling on the feds to be more proactive about using the 2015 federal sex-trafficking law. In a letter to Attorney General Loretta Lynch on May 24, they criticized the DOJ because “some provisions of the JVTA have yet to be implemented” and stated that they will “employ concerted due diligence until every child, woman, and man is safe from modern day slavery.” 

Their requests aren’t 100 percent unreasonable. One thing they ask for is better Bureau of Justice statistics on rates of arrest, prosecution, and conviction for human trafficking offenses.

Then again, the Justice Department did commission a pretty significant report—released in January 2016—on human-trafficking arrests, prosecutions, and convictions in America, with a team of independent academic researchers looking at data from 2003 through 2012. State measures involving tougher punishments or more police busts for prostitution-related crimes were “the dominant legislative response,” the researchers found out—although these tough-on-crime responses had “no impact on the number of arrests and prosecutions for human trafficking.”

Such responses, however, are exactly what lawmakers were pushing last week. One of the main points they stressed in the letter to Lynch was the need for an assistant U.S. attorney general in each U.S. district to focus on overseeing and prosecuting trafficking cases. Another was for even greater focus on catching and prosecuting people who pay for sex. 

“JVTA goes after the demand side of this, and that is what’s important,” said Rep. Wagner. 

The theory behind “end demand” efforts—law-enforcement initiatives targeting sex buyers—is that the demand for prostitution generally creates the conditions for victims of sex-trafficking to be exploited. The answer, say end-demand advocates, is to punish prostitution clients as felony sex offenders (under state laws) and sometimes as harshly as those doing the human trafficking. As a result, we’ve seen an increasing number of “john stings,” where undercover cops pose as sex workers and arrest those who take the bait.

Efforts to fund the arrest and prosecution of “persons who engage in the purchase of commercial sex acts” have been a part of federal anti-trafficking agenda since 2005, with the second re-authorization of the Trafficking Victims Protection Act. Commercial sex (i.e. prostitution) stings are routinely paid for with federal grant money and aided by agents from the Department of Homeland Security (DHS) and the FBI

Lawmakers speak of this move as a way to bring justice to bear on “child sex traffickers.” In reality, it allows for the escalation from misdemeanor solicitation charges to federal or felony human trafficking charges for anyone who offers—knowingly or unknowingly—to pay someone even one day under 18 for sex.

Under the JVTA, only those who solicit sex from trafficking victims “can and should be prosecuted” as human traffickers. But there is no requirement for the sex soliciter to know the individual is being trafficked. What’s more, federal law defines anyone under age 18 who engages in prostitution as a sex-trafficking victim, even if no one is forcing, coercing, or even working with them. And the government need not prove that a sex solicitor “knew the person [selling sex] had not attained the age of 18 years.”

Treating such individuals as legally equivalent to kidnappers, violent pimps, and human smugglers was one of the central tenets of the JVTA. 

One advantage to this approach, for the government, is greater civil asset forfeiture possibilities and the ability to extract more fine money from defendants. For instance, under the JVTA, anyone convicted must pay $5,000 into a Domestic Trafficking Victims’ Fund, in addition to any fees assessed as part of regular sentencing. There also need not be an actual victim under this approach—an undercover officer posing online as a teenager will do just fine. 

“Make ’em pay the rent on the courthouse,” said Rep. Ted Poe (R-Texas) at the Wednesday press conference, summing up the JVTA approach.

Poe also praised the U.S. State Department’s annual “Trafficking in Persons” (TIP) report, in which the department grades other countries’ anti-human trafficking efforts. He then wondered out loud where the U.S. would rank if we ranked ourselves?

We do. The U.S. earned the best possible ranking (Tier One). The report stated that federal anti-trafficking laws are “sufficiently stringent and commensurate with penalties prescribed for other serious offenses: penalties ranged up to life imprisonment.” According to the TIP,  Immigration and Customs Enforcement (ICE) opened 987 investigations possibly involving human trafficking in fiscal-year 2014, the FBI opened 835 investigations, DOJ-funded task forces opened 1,083 investigations, DOS opened 154 cases, the Department of Defense opened 14. 

Taken together, DOJ initiated a total of 208 federal human trafficking prosecutions in FY 2014, charging 335 defendants. Of these prosecutions, 190 involved predominantly sex trafficking and 18 involved predominantly labor trafficking, although some involved both. These figures represent an increase from FY 2013, during which DOJ brought 161 prosecutions charging 253 defendants. During FY 2014, DOJ secured convictions against 184 traffickers, compared with 174 convictions obtained in FY 2013. Of these, 157 involved predominantly sex trafficking and 27 involved predominantly labor trafficking, although several involved both. These totals do not include child sex trafficking cases brought under non-trafficking statutes. Penalties imposed on convicted traffickers ranged from five years to life imprisonment. For the first time, the government used an extraterritorial jurisdiction provision of the law to convict a trafficker for sex trafficking that took place in another country.

Poe stated last week that the purpose of the JVTA is to “[change] the focus, and society’s concept, of who the victims are” in human trafficking. But the real focus, as evidenced by lawmakers’ statements and letter to the DOJ, seems to be on shifting the conception of perpetrators. He called prostitution clients “a group that has gotten away with this for far too long.” Sex buyers “are not johns—John was in the Bible, he’s a good guy,” said Poe. “Johns are bad guys, today.”

“The days of ‘boys being boys’ in America is going to end,” Poe continued. “And this legislation will help end that.” 

At the same time, adult sex workers and minors caught up in prostitution now fall prey to the overly broad legal conception of sex trafficker enshrined in federal code, along with general vice charges. As Kate D’Adamo, a trafficking-victims advocate with the Sex Workers Project, told The Kernel recently, “just being declared a victim of trafficking only means that [someone under 18] might be able to access certain benefits legally,” but “doesn’t make her immune to prosecution in the state or federal level, even if it’s the exact same behavior that she is legally declared a victim under.” 

“While we recognize that criminalization isn’t what those trading sex underage need,” said D’Adamo, “it’s the laws that we choose to police which impact people.”

Last week, the global human-rights group Amnesty International released data critical of the so-called Nordic Model of prostitution laws. Under these laws, criminal enforcement is theoretically shifted from those selling sexual services to those buying them. But the state’s newfound passion for punishing sex buyers, along with the narrow range of circumstances under which selling sex is legal, still leads to ample surveillance, harassment, and arrest of sex workers.

Human rights abuses against people engaged in prostitution—whether consensually or by force—”are compounded by and, in some cases, directly caused by the legal framework” there, stated Amnesty International. “Oslo police have over the last decade adopted a ‘preventative policing’ approach to sex work which involves the enforcement of lower level offences as ‘stress methods’ to disrupt, destabilize and increase the pressure on those operating in the sex sector. One academic researcher describes how police sources ‘in Oslo often use terms like they are going to ‘crush’ or ‘choke’ the [prostitution] market, and unsettle, pressure and stress the people in the market.'” 

from Hit & Run

Bill Kristol’s Independent Pick To Take On “Roaring Jackass” Donald Trump Revealed

As reported earlier, over the weekend Weekly Standard editor and prominent neocon, Bill Kristol, one of Trump’s most vocal detractors, announced that he would challenge Trump’s presidential candidacy by unveiling  an independent candidate, “asn impressive one, with a strong team and a real chance.” This led to another heated exchange between Trump and Kristol, with Trump calling the conservative voice a “loser” and a “dummy”

This is turn led to another response by Kristol who said on Twitter that “I gather Donald Trump said I’m a loser”, adding that “I’ve won some and I’ve lost some, but one thing I’ve always tried not to be is a roaring jackass.”

The feud between the Trump and Kristol aside, the political world has been engaged in a fevered guessing game over whom that person might be. 

Shortly after Kristol’s Sunday tweet, he left for Israel and has been avoiding the press, speaking only through a series of tweets taunting Trump for responding to Kristol’s Sunday tweet. Speculation had centered on 2012 Republican nominee Romney, freshman Nebraska senator Ben Sasse, and other current and former state and federal office-holders.

The answer was revealed by Bloomberg late this afternoon, which reported that according to two Republicans intimately familiar with Bill Kristol’s efforts to recruit an independent presidential candidate to challenge Donald Trump that the person Kristol has in mind is David French – whose name the editor of the Weekly Standard floated in the current issue of the magazine.

Who is David French? Bloomberg has the details?

French is a veteran of Operation Iraqi Freedom. According to the website of National Review, where French is a staff writer, he is a constitutional lawyer, a recipient of the Bronze Star, and an author of several books who lives in Columbia, Tenn., with his wife Nancy and three children.


Reached in Israel late Tuesday afternoon, Kristol declined to comment on his efforts to induce French to run. The two Republicans confirmed that French is open to launching a bid, but that he has not made a final decision. One of the Republicans added that French has not lined up a vice-presidential running mate or significant financial support. However, according to this person, some conservative donors look favorably on the prospect of French entering the fray.

In Kristol’s piece in the Standard’s June 6 issue, he argued that “the fact of Trump’s and Clinton’s unfitness for the Oval Office has become so self-evident that it’s no longer clear one needs a famous figure to provide an alternative.” Bloomberg adds that after mentioning Mitt Romney and other possibilities such as Judd Gregg and Mel Martinez, Kristol invoked French’s name and résumé, writing, “To say that he would be a better and a more responsible president than Hillary Clinton or Donald Trump is to state a truth that would become self-evident as more Americans got to know him.”

Bloomberg concludes that according to one person deeply involved in the efforts to recruit an independent challenger, the search has focused on individuals who have one or more of the following three traits seen as vital for credibly launching such a bid: fame, vast wealth, and elective experience.

We fail to see precisely which of the three traits French possesses. And now we await the imminent response from Trump.

via Tyler Durden

The Stunning Idiocy Of Steel Tariffs

Submitted by Pater Tenebrarum via,

Victims of the Boom-Bust Cycle

The world is drowning in steel – there is huge overcapacity in steel production worldwide. This is a direct result of the massive global credit expansion that has taken place over the past 15 years. Much of this capacity is located in China, but while the times were good, iron ore and steel production (and associated lines of production) was expanded everywhere else in the world as well.



Steel factory

Heavy industries like steel, which represent quite a high stage of the production structure, i.e. are temporally far removed from the consumption stage, are especially prone to falling prey to boom-bust cycles. In a fiat money system run by central planning agencies and supplemented by a fractionally reserved banking system, the amplitude of business cycles will be especially pronounced (readers may have noticed that systemic crises have become increasingly severe with every new iteration).

Experience shows that there exists a trade-off between frequency and amplitude: constant central bank intervention has lowered the frequency of economic downturns, but has it has made the crises much worse when they do strike, as imbalances have more time to accumulate.

Moreover, the economy’s long term wealth creation capacity is slowly but surely fatally undermined, as more and more capital is consumed. This is evidenced by the fact that economic growth is increasingly giving way to stagnation nearly everywhere in the world.


1-Steel rebar monthly

Steel rebar futures prices in Shanghai, monthly – click to enlarge.


It is easy to see that the steel industry has been one of the focal points of the last cycle – all we need to do is look at the price history of steel. The longest continuous chart of steel rebar futures we could find is the one shown above, so we are supplementing it with a longer term line chart that shows steel prices  from 2003 to 2014.  As can be seen, current prices are well below the level they inhabited in 2003. In short, the entire price rise of the “bubble period” has been erased.


2-Steel prices long term

Steel prices from 2003 to 2014 – the red line on the right hand side indicates current price levels – click to enlarge.


The Return of “Just Prices”

As a result of all this, the steel industry (along with many other commodity industries) is facing a painful time of liquidation and reorganization. On the other hand, lower steel prices are obviously benefiting all steel users, such as the car industry and the construction industry, to name two important ones. Consumers obviously stand to benefit greatly from this as well, as the latter industries will have more scope to lower the prices of their products.

It seems glaringly obvious that in Western countries, the industries benefiting from low steel prices are far larger and far more important than the steel industry. And it should go without saying that anything that benefits consumers should be enthusiastically welcomed. In fact, the benefit to consumers should be the only standard by which such situations should be judged.

Moreover, lower steel prices are an important signal to the marketplace – they tell entrepreneurs that investments need to be shifted. There is no point in tying up factors of production in steel factories – it will be far better if they are deployed elsewhere.

All of this makes it utterly absurd that the EU, the US and China have begun slapping each other with massive tariffs on steel imports over the past several months (here are links to articles giving some color on the moves made by the EU and the retaliatory moves made by China). The latest event in this comedy of economic error is a massive increase of tariffs introduced by the US commerce department that involves not only China, but several more countries:

“The U.S. Department of Commerce (“DOC”) has made its final decision on anti-dumping investigations on imports of corrosion-resistant steel and concluded that China, India, Italy, South Korea and Taiwan are selling these products in the U.S. market below their fair values and therefore, are subject to anti-dumping duties. The ruling marks yet another major step in stemming the torrent of unfairly-traded foreign imports.




The biggest U.S. steel producers [five of them all in all, ed note], in June 2015, filed anti-dumping and countervailing duty petitions with the U.S. International Trade Commission (USITC) and the DOC against five countries accused for illegally dumping cheap corrosion-resistant steel.




Imports of corrosion-resistant steel from China, India, Italy, South Korea, and Taiwan were valued at an estimated $500.3 million, $219.6 million, $110 million, $509.1 million, and $534.4 million, respectively, in 2015 (combined value of nearly $1.9 billion). These products are being illegally dumped by foreign steel producers in the American market at unfairly low prices that significantly undercut the prices of U.S. steel makers.


The DOC, on Wednesday, imposed a whopping final anti-dumping duty rate of 209.97% on imports of these products from China. This will hurt Chinese exporters including Yieh Phui (China) Technomaterial Co. Ltd and Jiangyin Zongcheng Steel Co. Ltd. India, Taiwan, South Korea, and Italy received anti-dumping duties in the range of 3.05% to 92.12%.”

(emphasis added)

This article almost sounds like a satire of sorts. First of all, there is apparently a VAST CONSPIRACY between the steel makers in all these countries, hitherto well hidden from the public eye. Thank the Lord that US steelmakers have spotted it in good time! Who knows what evils may have befallen us otherwise!

Alas, the assertion that steel is “dumped below its fair value” requires us to accept the ludicrous idea that a bunch of bureaucrats actually knows what the “fair value” of steel is supposed to be. In Europe, medieval scholars once extensively discussed the notion of a “just price” in the context of religious doctrine – a debate that went on for centuries. They eventually concluded that there is no just price apart from the market price.

It took these several centuries of learned debate to finally get rid of most of Charlemagne’s extensive and absurd price controls. So essentially, today’s bureaucrats are assuming the role  once played by kings, popes and their representatives in determining “just” prices. It sounds almost as though more than a thousand years of progress have just gone “poof”.



Karolus Magnus, a.k.a. Charlemagne, who introduced countless price controls and economic regulations at the Council of Nijmegen in AD 806. It took centuries to get rid of the economic decrees he and his successors imposed in the name of church doctrine (the  fashionable pretext at the time. Today the pretext is provided by socialist doctrine).


No Fair! The Economics of “Dumping”

Let us briefly consider the economics of so-called “dumping”. From the perspective of consumers, the case seems crystal clear. Imagine for example that you long wanted to buy a new car, but were put off by its high cost. Suddenly, a car dealer near you lowers the price of the car you want by 30%. Are you going to a) buy it or b) complain about his “car dumping” and alarm the local Spanish Inquisition rep… , sorry, commerce department representative?

We can tell you what 99.99% of consumers would do. We can probably agree that if the remaining 0.01% had a second brain, it would feel lonely. We would come to similar conclusions about a car manufacturer complaining about low steel prices. We’d rightly consider him to be a few French fries short of a happy meal.


No-one expects the Spanish Inquisition!

However, those complaining are of course the steelmakers (all five of them!). What are they really complaining about though? As the charts above show, steel prices are currently very low, and steelmakers obviously don’t like that. So they demand that the State artificially raise them, under the pretext that low import prices constitute evidence of “dumping”.

In case you were wondering how the International Trade Commission of the department of commerce determines whether dumping takes place, here is the official definition of “unfair” prices (get out those prayer beads, ye unbelievers, as we familiarize you with official doctrine!):

“Dumping occurs when imported merchandise is sold in, or for export to, the United States at less than the normal value of the merchandise.”

See how easy it is? According to our sources, it was not quite clear whether the “normal value” of steel was last week’s or last year’s price, or the price in Shanghai or in Rome, so darts were thrown at the steel rebar futures chart we showed above (we cannot guarantee that his is how it really happened).

So the governments of the US, the EU and China are acting as enforcement arms of domestic steelmakers to the detriment of everybody else. Does that make any sense whatsoever? What if Chinese steelmakers offered to give us steel for free? Should we refuse to take it? Shouldn’t we rather be happy to get such a generous gift?

Even if allegations that China’s government is subsidizing its steelmakers are true (i.e., to be precise, if it is true that it is subsidizing them more than other governments are subsidizing theirs), it seems to us that the party that would be hurt the most by said dumping activity would be the dumpers themselves. We should happily let them proceed, in fact, they should be encouraged! The dumpers are evidently subsidizing US consumers and helping to raise their living standards. What’s not to like?

Here is something protectionists never talk about: if one makes it more difficult for others to sell their wares, how are they supposed to pay for what one wants to sell to them? If one thinks their arguments through, protectionists seem to believe that it would be best to have no trade at all.  When they first came up with their ideas, they must have been thinking of all those immensely rich villages in the world’s most inaccessible mountain regions.



High up in the Nuba Mountains, where the rich guys live!

Coalition of Obsolete Industries

Obviously though, the governments involved in this trade spat are only acting in the best interests of steel workers. Just as they are only acting in the best interests of taxi drivers when regulating Uber out of existence in a city. Why, we should actually consider bringing back VHS video while we’re at it. Someone must have made those tape machines and tapes, and obviously they’re all out of a job as well.

We have remarked on previous occasions that stopping and reversing economic progress seems to be a major function of governments – and as the makers of the video below rightly ask: How are we ever going to have jobs if we don’t stop progress? Naturally, the same applies to free trade.


It’s time to side with the coalition of obsolete industries! Patriotic duty, etc.!



If Western steelmakers are not able to compete with Asian ones at current steel prices, then jacking import prices up by 200% may temporarily help to keep them in business, but they will no longer have an incentive to become more efficient. In the long run, they will simply be set up for an even bigger fall. The may enjoy an advantage for a brief time, but it isn’t going to last.

Since the amount of capital is finite, tying up capital and labor in an inefficient sector of the economy perforce deprives other sectors of these resources. Here one can interweave our example of the consumer who considers whether or not to buy a car, and finds to his delight that it is offered at a 30% discount one day. The money he saves will now be available for other uses.

In other words, not only is our hypothetical consumer’s living standard raised immediately, but the funds he saves will also benefit others. Whether he saves the money or spends it on other consumer goods, more economic opportunity will ensue. The important thing is that it is the consumer making the allocation decision. Ultimately the economy’s production structure is supposed to serve consumers after all – not government bureaucrats and cronies.


via Tyler Durden

Alibaba’s Largest Investor Is Selling A $7.9 Billion Stake

Did SoftBank just ring the bell at the top for internet retail giants?

Shortly after the close, Japan’s SoftBank Group Corp., the largest and one of the oldest investors in Chinese e-commerce giant Alibaba, said it would sell at least $7.9 billion of its stake (with an option to sell another $1 billion) in the company to boost its cash position and pay down debt.

According to the filed press release, SoftBank has established a new vehicle called the Mandatory Exchangeable Trust, with the intention of divesting $5 billion in Alibaba’s American depositary receipts in a private placement “to qualified institutional buyers.” SoftBank will also sell 2 billion in shares back to Alibaba, $400 million to members of the Alibaba Partnership and $500 million “to a major sovereign wealth fund.”

As a result of the partial liquidation, Softbank’s holdings will decline from 32% to 28%. As Bloomberg adds, the sales are part of a broader effort by the Japanese technology giant to reduce its leverage.

In the press release, SoftBank Chairman and CEO Masayoshi Son said that “this investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects,” SoftBank Chairman and Chief Executive Officer Masayoshi Son said in the statement. “In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership.”

In a separate statement, Jack Ma, Alibaba’s chairman, said that “as SoftBank looks to strengthen its own balance sheet, Alibaba determined that it was the best use of our capital to re-invest in our own business through an efficient buyback of a large number of shares in our own company that is accretive to our stockholders.”

U.S. web portal Yahoo! Inc. has about a 15 percent stake in Alibaba – part of the remaining holdings it first acquired in 2005 for about $1 billion. Yahoo has been seeking a tax-efficient way to separate from the stock. Most recently it has sought to sell its core web assets in a strategic review.

BABA stock declined 2.8% in after hours trading Tuesday after the announcement; it is still up roughly 20% in 2016.

* * *

The press release is below:

SoftBank Announces a Minimum $7.9 Billion Monetization of its Alibaba Stake in Coordination with Alibaba Group

  • Proceeds from Capital Raise to Reduce SoftBank’s Leverage
  • Consistent with the Company’s SoftBank 2.0 Disciplined Capital Structure Management Strategy
  • SoftBank to Remain Alibaba’s Largest Stockholder and Close Strategic Partner

SoftBank Group Corp. (“SBG”) today announced that it has approved a series of capital raising transactions (the “Transactions”) which involve monetizing a portion of the shares of Alibaba Group Holding Limited (“Alibaba”) held by SBG’s wholly owned subsidiary SB China Holdings Pte Ltd (“SB China”).

Specifically, the Transactions are comprised of (i) the intended sale of $2.0 billion of Alibaba ordinary shares to Alibaba, (ii) the intended sale of $400 million of Alibaba ordinary shares to members of the Alibaba Partnership acting collectively, and the sale of $500 million of Alibaba ordinary shares to a major sovereign wealth fund pursuant to an exemption from registration under the U.S. Securities Act and (iii) an intention of the Mandatory Exchangeable Trust (“Trust”), a newly formed trust, to offer, subject to market conditions and other factors, $5.0 billion aggregate purchase price of its mandatory exchangeable trust securities (“Trust Securities”) exchangeable into American depositary shares (“ADSs”) of Alibaba in a private placement to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act. The Trust expects to grant the initial purchasers of the Trust Securities an option to purchase up to an additional $1.0 billion aggregate purchase price of Trust Securities.

1. Purpose of the Transactions

Following SBG’s first investment in Alibaba in 2000, the two companies have built a close relationship through business partnerships, joint ventures, joint investments and other collaborations. SBG Group held 32.2%1 of Alibaba’s issued and outstanding shares as of March 31, 2016, and Alibaba is an equity method affiliate of SBG. SBG continues to be committed to its partnership with Alibaba, and the Transactions are driven purely by SBG’s capital structure and de-leveraging objectives.

A disciplined approach to capital structure and leverage is fundamental to our SoftBank 2.0 transformation strategy. The Transactions are expected to allow SBG to monetize a portion of its Alibaba shares in order to increase its liquidity cushion, improve SBG’s consolidated net interest-bearing debt / EBITDA ratio (excluding Sprint Corporation) from 3.8x as of March 31, 2016 to approximately 3.3×2, and enable flexible and prudent financial management. The sale of Trust Securities is expected to allow SBG to monetize its shares at a potential premium to the current share price, while eliminating downside risks as a result of owning these shares. The Trust Securities are expected to be settled upon exchange by delivery of Alibaba ADSs representing the pledged shares, which is expected to occur on the scheduled exchange date (in 3 years), and both the sale of Alibaba ordinary shares and the issuance of the Trust Securities will enhance SBG’s financial profile. SBG plans to use the proceeds of the Transactions for the repayment of interest-bearing debt as well as other general corporate purposes.

SBG would continue to hold approximately 28%3 of Alibaba’s total outstanding shares following the Transactions (excluding the ordinary shares that are expected to collateralize the Trust Securities). Alibaba will remain an equity method associate of SBG. SBG expects that its Alibaba shares will continue to be a core shareholding of SBG and it intends to maintain its strong relationship with Alibaba. SBG’s Chairman & CEO, Masayoshi Son, will remain a board director of Alibaba, and Alibaba’s Executive Chairman, Jack Ma, will remain a board director of SBG.

In connection with the Transactions, SBG will also enter into a lockup agreement with Alibaba under which it has agreed not to transfer any Alibaba shares held by it for a period of six months, subject to certain exceptions.

“When I first met Jack Ma, I knew immediately he had the vision and passion to build the world’s leading e-commerce company, and I was very happy to invest alongside him to help him realize his ambition,” said SBG Chairman and CEO Masayoshi Son. “This investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects. In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership.”

2. Overview of the Transactions

The Trust will enter into a variable forward purchase agreement to acquire Alibaba shares from West Raptor Holdings, LLC (“WRH LLC”), a wholly owned subsidiary of SoftBank Group International GK (“SBIGK”), which in turn is wholly owned by SBG. At the closing of the offering of the Trust Securities, the Trust will pay to WRH LLC the proceeds received from the issuance of the Trust Securities, excluding amounts in respect of the Trust’s expenses and amounts used to purchase U.S. Treasury securities, which will fund quarterly distributions on the Trust Securities. At the exchange date, which is expected to be the first scheduled trading day after June 1, 2019, the Trust will exchange each Trust Security for a certain number of ADSs (determined with reference to the trading price of the ADSs at that time) or, subject to WRH LLC’s election, cash or a combination of cash and ADSs. Under certain circumstances, including at WRH LLC’s election, the Trust Securities may be exchanged prior to the scheduled exchange date.

In addition, SB China will enter into separate share purchase transactions with each of Alibaba, members of the Alibaba Partnership, acting collectively, and a major sovereign wealth fund for the purchase of approximately $2.9 billion of Alibaba shares held by SB China, of which approximately $2.0 billion of the total is being purchased by Alibaba. The sales to members of the Alibaba Partnership acting collectively, and a major sovereign wealth fund would be exempt from registration pursuant to an exemption from registration under the U.S. Securities Act, and the shares would be eligible for resale under Rule 144 following a 6-month holding period (subject to additional restrictions applicable with respect to shares acquired by affiliates under Rule 144).

3. Impact on Consolidated Financial Results

The impact on consolidated financial results from the Transactions will be disclosed as necessary once it is determined.

via Tyler Durden

The Federal Reserve Has Created an Unprecedented Disaster for Pension Funds

Screen Shot 2016-05-31 at 4.17.50 PM

When it comes to the Fed, Congress is mired in hypocrisy. The anti-regulation, de-regulation crowd on Capitol Hill shuts its mouth when it comes to the most powerful regulators of all – you and the Federal Reserve. Meanwhile, Congress goes along with the out-of-control, private government of the Fed—unaccountable to the national legislature. Moreover, your massive monetary injections scarcely led to any jobs on the ground, other than stock and bond processors.

– From the post: Ralph Nader Destroys the Federal Reserve in Open Letter – Calls it “Out of Control, Private Government”

If I had to choose one single institution and one single individual most responsible for the weak, putrid and unbelievably corrupt oligarch-controlled U.S. economy, I would choose the Federal Reserve and Ben Bernanke.

The central planners at the Fed have systematically funneled trillions of dollars into the pockets of those who least needed and deserved it least, and in the process served to further enrich and entrench a criminal oligarchy while pounding the middle class into oblivion. What’s worse, the financial armageddon faced thus far by the 99.99% is just getting started.

Thanks to the 0% rate targeted by the Federal Reserve, pensions simply can’t get a decent return without moving further and further out on the asset management risk spectrum, and even then, it’s still not sufficient.

Today’s Wall Street Journal article on the topic shines a much needed light on just how dangerous this whole charade has become. Here are a few excerpts:

continue reading

from Liberty Blitzkrieg

18 German Women Sexually Assaulted By Pakistani Refugees At Music Festival

Less than a month after a damning report emerged that a high-ranking police officer has alleged that his seniors tried to strike the word rape from an internal police report after the mass sexual assaults in Cologne over New Year, Germany is gripped in a new sexual assault scandal involving refugees. Eighteen German women have filed police complaints saying they were sexually assaulted at a musical festival in Darmstadt. Police arrested three refugees from Pakistan at the scene after three of the women immediately reported their attacks.

According to Die Welt, the sexual assaults are reported to have taken place at the Schlossgrabenfest music festival in the city of Darmstadt, near Frankfurt, on Saturday night. The festival in Darmstadt took place over four days and attracted some 400,000 revelers. 

Three of the women immediately alerted police at the festival that they had been assaulted. They said they had been surrounded and then sexually harassed by a group of men who were of South Asian appearance.

“Unfortunately several women were sexually harassed on Saturday, when the dance floor area was completely packed,” the police said in a statement, quoted by RT.

And once again, refugees are implicated: as RT adds, due to the quick intervention by the law enforcement officers, three suspects, who are asylum seekers from Pakistan and aged between 28 and 31, were promptly apprehended. Police added that there could be more who took part in the attacks that are still at large.

Since the arrests were made, a further 15 women have come forward since Tuesday, to say they were sexually assaulted at the festival. The women added that the pattern of the attacks was similar, as they were surrounded by a group of men, who proceeded to assault them sexually. 

These attacks take place just over two weeks after two female teenagers, 17- and 18-years-old, were sexually harassed by a group of 10 men during a street festival in Berlin.  The men allegedly pressed against the teens and groped them, blocking their attempts to escape.

Following that attack, police arrested three teenagers aged between 14 and 17 at the scene, while they tweeted that the three suspects were known to the police from prior incidents, adding that “two are of Turkish descent and the third is [of] unknown [origin].”

The attacks in May were reminiscent of numerous allegations of sexual assaults being reported in Cologne on New Year’s Eve. Some 1,049 people said they were victims of attacks allegedly committed by men of North African and the Middle Eastern descent, while about 821 complaints were filed with the police. 

German police were heavily criticized for their perceived lack of activity during the New Year’s Eve celebrations in the city as well as for their poor investigations into the crimes. Cologne Police Chief Wolfgang Albers resigned a week after the incident.

A welcoming Germany has taken steps to try and assimilate asylum seekers into German culture, with one education center even holding classes to explain to refugees how they should interact with women in Germany, as well as flyers how to interact with women at local public pools.


Additionally, as reported recently, the country went so far as to create a website explaining the “nuances” of sex in Germany, what is allowed, what is prohibited, as well as providing a remedial high school lesson in male and female biology.

“The majority don’t have a clue how to approach the opposite sex in this country,” said sex therapist Christian Zech, who works with the Pro-Familia center, specializing in sexuality, partnership and family planning.

We doubt that excuse justifies the recurring stories of sexual assaults involving refugees and local women.

Meanwhile, the German government has said will allocate nearly €94 billion (US$105 billion) for incoming refugees over the next five years. The money will be used for housing, “integration”, German language courses and social welfare benefits, as well as dealing with the underlying causes of the refugee influx.

The Federal Finance Ministry expects around 600,000 refugees to enter Germany in 2016, some 400,000 in 2017 and about 300,000 each consecutive year. In 2015, an estimated 1.1 million arrived in Germany seeking asylum.

Some in Germany have not taken kindly to the mass arrivals of asylum seekers, mainly from the Middle East and North Africa, with German police recording 45 cases of arson at refugee centers since the start of the year, while there have been calls for Chancellor Angela Merkel to cap the number of refugees entering Germany.

Curiously, none other than Buddhist spiritual leader, the Dalai Lama opined on the current migrant crisis in Europe. Cited by Austria’s Krone, the monk said that he is skeptical about the refugee trend in Germany: “Germany cannot become an Arabic country, Germany is Germany!”, he told reporters of the “Frankfurter Allgemeine Zeitung”.

He added that from an ethical point of view, it is justifiable to only accept refugees on a temporary basis. “The number of migrants in Germany is too high. The aim should be, that these people return to their home countries and help rebuilding infrastructure.”

Ultimately, the future of such dramatic scenes may be in the hands of none other than Turkey’s president Erdogan, who has repeatedly warned that if Europe does not follow through with its promises of visa-free travel for Turkish citizens, he may unleash another wave of refugees using the “land corridor” which ultimately ends in Germany.

via Tyler Durden

National Committee Chair Nicholas Sarwark on the Libertarian Party’s Plan for 2016: New At Reason

“The ideal is that we use [the 2016 election] as a springboard to mass defections and the destruction of at least one of the old parties,” explained Libertarian National Committee Chair Nicholas Sarwark. “It’s time for the Republican Party to fall apart and go away,” he added. “Or the Democratic party. I don’t really care which.” 

Sarwark sat down with Reason‘s Matt Welch at the Libertarian National Convention in Orlando, Florida to talk about the recent increased attention the Libertarian party has received over the past few weeks. 

“Our vote totals and our vote floors keep rising across the country,” says Sarwark. “We are in it for the long term, we are in it to win. It may take two years, four years, 20 years, but we are not going away. And the old parties are, frankly, dying.”

Approximately 8:30 minutes. Produced by Joshua Swain and Zach Weissmueller. 

Click the link below for downloadable versions of this video, and watch all of Reason TV’s coverage of the Libertarian National Convention here.

View this article.

from Hit & Run

“Jesus, Marx, & Darwin Would Be Banned From Today’s Universities” – Oxford Professor Slams ‘Safe-Space’ Politics

The impact of US-style "safe space" politics, in which causing offense is held to be a grave sin, is also limiting freedom of speech abroad. As Oxford Professor of European Studies Timothy Garton Ash exclaimed, figures like Jesus, Charles Darwin and Karl Marx would all be banned from British universities today due to the rise of social justice warrior pressure groups and correspondingly populist counter-extremism legislation.

This is "a double-pronged attack on free speech," Ash told an audience at the Hay literary festival on Monday.

As RT reports, as well as Marx, Darwin and Jesus, he warned that philosophers like Rousseau and Hegel would today be banned from campuses.


Referring to the UK government-led Prevent scheme, intended to keep extremism out of educational institutions, Garton Ash warned that:

“securocrats in the Home Office” are imposing bans which would “prevent even non-violent extremists speaking on campus.”


“Now non-violent extremists? That’s Karl Marx, Rousseau, Charles Darwin, Hegel, and most clearly Jesus Christ, who was definitely a non-violent extremist,” the academic said. The Home Office “wouldn’t want him preaching on campus,” he added.

But state intervention is only one side of the coin, Garton Ash said, arguing that the impact of US-style “safe space” politics, in which causing offense is held to be a grave sin, were also limiting freedom of speech.

He said there is a “certain push from below from our own students demanding so-called safe spaces” which involved “no platforming” people simply on the basis that particular students disagreed with them.

“It’s one group of students censoring another,” he said, warning this resulted in free speech being “salami sliced” away.

Garton Ash said the UK, “which in a way invented the modern version of free speech in the 17th century, is in my view much too feeble when it comes to standing up for free speech.”

As we explained previously,

The Only Safe Space Is Your Home


No matter where you go in life, someone will be there to offend you. Maybe it’s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your “safe space” away from the harmful words of others, then you’re best to just stay put at home. Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It’s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.

via Tyler Durden

Neocon Kristol Announces That “There Will Be An Independent Candidate” To Sabotage Donald Trump

Submitted by Michael Snyder via The Economic Collapse blog,

It has long been my contention that the elite are more than willing to do whatever they have to do to keep Donald Trump out of the White House.  There are many forms that this could take, and one potential option just became a little bit clearer.  On Sunday, the founder and editor of the Weekly Standard, Bill Kristol, announced on Twitter that there “will be an independent candidate–an impressive one, with a strong team and a real chance.”  Kristol has very, very deep ties to the Republican elite, and so this is certainly not an idle threat.  At this point we do not know who the candidate will be, but some of the names that have been mentioned include Mitt Romney, John Kasich, Nebraska Senator Ben Sasse and billionaire Mark Cuban.  Of course dividing the conservative vote would be suicidal and would virtually ensure a victory for Hillary Clinton in November.  So why would Kristol and other Republican elitists want to do this?

That is a very good question, and it goes to the very core of how the game of politics is played in America today.

The truth is that the elite are accustomed to being in control of both parties, and that is why things never seem to change very much no matter who is elected.

But this time someone that the elite do not control has miraculously captured the Republican nomination, and this scares them to death.

So now the mission is to destroy the Trump candidacy at all costs, even if that means having the Republican elite sabotage the Republican nominee.

I wasn’t sure if they were actually going to pull the trigger on a major third party candidate, but Bill Kristol now says that this is absolutely going to happen


Of course Donald Trump was horrified when he learned of what Kristol had said.  He responded with a series of very angry tweets…


I would be upset too.  For the Republican elite to purposely sabotage Trump and throw the election to Hillary Clinton is seemingly insane.  This is something that Ben Carson commented on during a recent interview with Fox News

Former 2016 candidate and Trump backer Ben Carson, speaking Monday on Fox News, echoed Trump’s warnings and invoked the 1992 presidential race as an example.


“A quarter of a century ago, another Clinton was running for the White House, and it was the entrance of a third-party candidate, Ross Perot, that made it possible for him to win,” Carson said. “Wouldn’t it be ironic if the same thing happened this time?”

Of course Kristol and the others that he is working with know precisely what they are doing.

There is no way in the world that Romney, Sasse, Kasich or Cuban could win.  But that wouldn’t be the goal anyway.  The goal would simply be to deny five or ten percent of the vote to Trump so that Hillary would win in a landslide.

At one time it seemed like such sabotage would not be necessary, but now polls have begun to shift and the elite are beginning to panic.  Here is one example of how the numbers have shifted…

That data and recent events suggest that Wall Street, which currently prefers former Secretary of State Hillary Clinton to real estate mogul Donald Trump, may not get the president it wants. According to the Iowa Electronic Markets, a prediction online betting platform, the probability that we’ll see a Democrat take the White House in 2016 is shrinking fast.


“The Democratic candidate was all but a certainty to win the presidency less than a month ago—it was at 74 percent and it’s down to 58 percent today,” said Hickey.

In a head to head matchup, there is a very real possibility that Trump could defeat Clinton.  So that is why the elite feel that they have to make a move.

But we probably will not find out the identity of the third party candidate until some time in June at the earliest.  In fact, a source that is involved in this third party effort told CBS News “not to expect an announcement for a couple of weeks.”

So for the moment, we will wait.

But without a doubt, there appears to be a unique opportunity for a third party candidate in this election cycle.  A whole host of recent polls and surveys have shown that the American people are not pleased with either party at this point and that most Americans would like to see an alternative choice to either Clinton or Trump.  The following comes from the New York Times

The survey also found evidence of overwhelming interest in the presidential contest, although less than a quarter of Americans say they’re excited about it.


Worse, 55 percent of Americans, including 60 percent of Republicans and 53 percent of Democrats, say they feel helpless about the 2016 election. And two-thirds of Americans under 30 report feeling helpless.


“I am despondent,” said Cserbak. “I wouldn’t say I feel totally helpless. I do have a vote.”

Of course no matter who runs as a third party candidate, there is no way in the world that individual will win.  Any third party candidate will simply play the role of spoiler, and will throw the election one way or the other.

I understand that a lot of people out there are very excited about Trump.  And it would be very nice to think that the American people could actually elect a president that is not controlled by the elite.

But that is not how the real world works, and over the next several months we are going to get a very clear lesson in power politics.

If necessary, the elite will move heaven and earth if that is what it takes to keep Donald Trump out of the White House.  Anyone that would suggest otherwise simply doesn’t understand how the game is played.

via Tyler Durden

Wall Street Journal Editorial Page: Johnson/Weld Is an ‘Honorable Alternative’ to Trump/Clinton

Reporting for duty. ||| Matt WelchThe lead editorial in today’s Wall Street Journal is headlined “The Libertarian Alternative: An option for the many Never Trump, Never Clinton voters.” After throwing cold water on “the mooted third-party campaign from within the GOP,” the Journal makes its case:

The Libertarians will offer a policy alternative to both candidates on free trade, and perhaps on taxes if Mr. Trump doesn’t clarify his position on taxing the rich. They’ll also contrast with the Republican on immigration. Mr. Johnson could help himself by reassuring voters that he isn’t one of those libertarians who thinks the only defenses we need are anti-missile batteries and the Atlantic and Pacific Oceans.

Mr. Johnson isn’t likely to win a state, but he can still play a useful role by reminding the major party candidates that they aren’t the only choices. Mr. Trump seems to think he can say whatever he wants because millions of voters are repelled by Mrs. Clinton. The Libertarians give these voters an honorable alternative if Mr. Trump makes himself unacceptable.

Your next president, with the First Fiancee. ||| Matt WelchAlso editorializing positively was The Springfield Republican of Massachusetts, under the headline “Can’t stand Trump, Clinton? Libertarian Party offers choice.” Sample: “if the Libertarian Party is ever going to get a real look from voters, this has been lining up to be the year…. Johnson and Weld will have been successful if they manage to get some libertarian notions into the conversation over the next five months.”

On Friday, Scott Shackford reported that Google Trends had recorded more than 650 news articles the previous seven days referencing the Libertarian Party. That number as of today, according to Shackford? More than 2,000. And quite a bit of it positive, too, as in this Washington Post headline: “This year’s Libertarian ticket has remarkable political experience. Now will it matter?” Yahoo! Finance offers up: “The Libertarian Johnson-Weld Ticket Is Bad News for Donald Trump.” More respectful treatment can be found at the Boston Globe, Bloomberg View, and on and on.

At Forbes, John Zogby makes the intriguing case that Snake People Millennials could be ripe for the Libertarian pickin’:

They will decide the outcome in 2016. Donald Trump’s support is miniscule among this group and Clinton does not generate any enthusiasm among younger voters because she appears to many to be a combination of too establishment and too disingenuous. Even though Bernie Sanders most likely will endorse and campaign for Clinton, as will President Barack Obama, who received a large percentage of support among young voters in 2008 and 2012, they still may not vote in significant enough numbers. To be sure, many will hold their nose and vote for Clinton because of their fear of a Trump victory. But the real question is will there be enough excitement to get Millennials out to vote. While early reports on the Libertarian ticket of former New Mexico governor Gary Johnson and former Massachusetts governor Bill Weld suggest that they may draw votes away from Trump, I think they may actually hurt Clinton even more. […]

Johnson and Weld just may have the most compelling message for Millennials. They are running as fiscal conservative purists and can draw from a group that is deeply concerned about both college debt and unparalleled public debt. And they are social libertarians: pro-choice, anti-government meddling in matters of personal privacy, decriminalization of most drugs, and they oppose United States meddling in foreign adventures and war. These young people are America’s First Global generation and they are diverse and less inclined to see other peoples and cultures as the “other.”

One source of perhaps-unlikely support is coming from hawkish Washington Post conservative Jennifer Rubin, who is arguing not for voting for the L.P. nominees, but for the media to give them an appropriately robust level of coverage:

1. Johnson-Weld should be included in all major polling, especially since 15 percent in national polls is required to get into the presidential debates.

2. In figuring out how to balance air time, the media rightly complains Hillary Clinton is not available nearly as much as Trump. That excuse, however, does not wash with Johnson-Weld who should be interviewed on a regular basis.

3. In treating Johnson-Weld as normal candidates the media should press for positions on key issues. What do they plan to do about the Islamic State? If they cannot get a flat tax, what sort of tax reform do they favor? If they disband the Education Department, should federal funding for schools disappear? What drugs would they legalize? In other words, treating them as serious candidates requires serious questions.

More in that vein here, including this kicker: “The least the media can do is not prejudge the result nor prevent two perfectly qualified, accomplished governors from making their case to the voters.”

Has there been some negative press? Oh, you betcha, as Nick Gillespie has previewed, and which I’ll get to more in a later post. But as Gary Johnson pointed out during the Libertarian National Convention, the amount of press attention the party has received these past two weeks has been unprecedented. And not just in terms of quantity.

from Hit & Run