The IKEA Child Sex Trafficking Story Is Fake News

IKEAA Southern California mom, Diandra Toyos, believes that when she, her mom, and her three young kids were shopping at Ikea, they were stalked by two men aiming to “traffic” the children. She wrote a Facebook post about it that went viral.

Of course it did. It had everything that’s irresistibly sharable: A feisty mom, an evil dude or two, “Swedish” (that is, Chinese) furniture, and the sex trafficking of pre-pubescent children.

What’s not to like?

So, after the zillionth person sent me the link, I wrote about it in The New York Post. As I pointed out, the mom’s proof of her children’s near doom was this: “Something was off. We knew it in our gut. I am almost sure that we were the targets of human trafficking.”

And I am almost sure they were not. Of course, if she felt uncomfortable, there was no reason not to skedaddle. But on Facebook she was telling other moms to be ultra-careful because, “this is happening all over,” with no basis in fact:

Or, as I put it on my Free-Range Kids blog: “Pointlessly terrified mom warns other moms to be pointlessly terrified.”

How dare I make light of such a serious situation? After all, mothers are gushing thanks for the post: “a great reminder that this kind of stuff can happen,” wrote someone on Westchester Moms.

The praise is piling on — “Outstanding advice,” “Good information!” — just as it did last week, when a very similar post went viral by a mom who thought kidnappers were about to snatch her baby out of her arms as she waited in line at the grocery store. (But she stared them down. Who knew kidnappers are such cream puffs?)

My point is not to make fun of the folks freaking out. My point is to try to give us all a reality check: Come on — two men are going to grab three kids, all under age 7, IN PUBLIC, in a camera-filled store, with the MOM and the GRANDMA right there, not to mention a zillion other fans of moderately priced furnishings?

Can we please take a deep breath and realize how insanely unlikely that is? How we don’t need to be “warned” about this because NOTHING HAPPENED!

Of course, Reason readers know that you can tell nothing happened because the whole thing was described as an “incident.” My #1 Rule of Reporting is: When something is called an “incident,” it’s because nothing happened.

How unlikely was this crime? I asked David Finkelhor, director of the Crimes Against Children Research Center at the University of New Hampshire. He told me (via email):

“Child abduction rarely occurs in a crowded public venue like that, where help would be easy to muster. [Moreover] most sex-trafficking lures and abductions are of teenagers. Parents should spend their worry time on other perils.”

So why don’t they? The answer is in Diandra’s own warning. She wrote that she’d recently read the story of yet another mom who said she and her kids had been targeted at (ironically!) Target. “I’m reading more and more about these experiences, and it’s terrifying.”

People are posting scary stories on Facebook that make parents paranoid, to the point where THEY post scary posts, which inspires MORE paranoia and scary posts.

That’s exactly it: People are posting scary stories on Facebook that make parents paranoid, to the point where THEY post scary posts, which inspires MORE paranoia and scary posts, etc. etc.

What’s worse, the effect is resonating far beyond the Facebook comment section. It is changing parenting — and childhood.

When we are warned over and over that our kids are in constant danger, even in the safest situations, we start to believe it.

From there it’s just a baby step to childhood on lockdown, never letting our kids walk to school, arresting the parents who let their kids play in the park, smashing the window of the car in front of the dry cleaners, because the mom left the child napping there for three minutes. We will not tolerate parents who trust their kids and trust the odds.

Instead, gripped by hysteria, we are giving our children a childhood unlike our own — a childhood with no freedom at all — simply because someone pressed “share.”

For more on misplaced paranoia about child kidnappings at IKEA, read Reason’s Elizabeth Nolan Brown.

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Rejuvenation By Killing Off Senescent Cells and by Boosting DNA Repair: New at Reason

ReverseAgingEvgenyatamanenkoDreamstime“In this world nothing can be said to be certain, except death and taxes,” quipped Benjamin Franklin. For now both remain inevitable, but two exciting new studies suggest that the grim reaper might be put off by novel treatments that can slow and even reverse aging.

Senescent cells accumulate as we grow older, secreting inflammatory substances that harm neighboring cells and contribute to many age-related diseases, including atherosclerorsis and diabetes. Researchers associated with Erasmus University report that they have developed a compound that selectively kills off senescent cells while leaving healthy ones alone. Eliminating senescent cells restored stamina, fur density, and kidney function in aged mice. The researchers report that they are continuing to study the rodents to see if the treatment extends their lifespans. “Maybe when you get to 65 you’ll go every five years for your anti-senescence shot in the clinic. You’ll go for your rejuvenation shot,” speculated one researcher.

As we age, our cells lose their ability to repair the damage to the DNA that makes up our genes. Another team of researchers associated with Harvard University are reporting experiments that increase levels of a compound that restores DNA repair activity back to youthful levels.

View this article.

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Why China Is About To Bring The Global Reflation Rally To A Halt

Previously we reported that iron ore prices – having almost doubled in the past year and launching a global reflationary wave – are on the verge of tumbling as the world becomes increasingly aware that China has a “13,000 Eiffel Tower” record inventory problem.

 

And while we previously discussed the immediate adverse implications for iron ore bulls, the conseqences for the global economy could be far more material.

Conveniently, in a note this morning, BMO’s Mark Steel looked at the same issue, focusing on the big picture implications.

His note titled “China’s greatest gift to the US” – a “gift” which will become clear in moments – takes aim at the latest overnight selloff in iron ore, when prices fell 1.7% on Friday.

“Iron has already broken below its 50d MA, the BMO analyst writes, and has already broken below trade support, and it is now poised at the bottom of the channel, so, yes, here is another potential “pre-breakdown” view – Exhibit 1.”

He then notes that “that kinda looks a lot like inflation expectations, which if anything are just a tad ahead, as they have already broken to the downside in the US, and also in Canada, and also in Germany, and also in France, and also in Japan, and also in Mexico. You get the picture, the inflation trade like a fifty-year-old doing the breakdance for the first time. For the reflationists, it’s not a pretty picture – Exhibit 2.

The conclusion is troubling for the global reflation rally:

We don’t want to make up any new theory, about what drives asset prices. Oh wait, yes we do, and indeed did, with the record-setting Trump disapproval rating looking a lot like the contracting yield curve, but we digress. We are saying that the decent, albeit worsening fit of movements of inflation expectations and commodity house driven oil, is currently improved upon by looking at long term poor, yet currently superior fit of inflation expectations and iron ore – Exhibits 3, 4.

 

 

Amusingly, Trump just gifted Mexico $17bn (two minutes in). We are not sure what the POTUS will inadvertently offer China this weekend, but according to the CBO, China’s greatest gift to the US would probably be lower inflation. Just sayin…

Recall: it was China, whose gargantuan credit expansion, monetary easing and “Shanghai Accord” in early 2016 unleashed the global reflationary wave which central banks are currently mistaking for “growth.” It is only appropriate that China will be the catalyst that ends it.

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Rig Count Continues To Threaten Oil Price Recovery, Saudis Cut Prices To Asia (Again)

For the 11th week in a row, the number of US oil rigs rose (up 10 to 662 – the highest since September 2015). US Crude production continues to track the lagged rig count, pouring more cold water on OPEC's production cut party.

The rig count grows, tracking the lagged oil price in a self-defeating cycle…

And crude production appears to have plenty more room to run…

And don't forget, as Nick Cunningham detailed, there are thousands of drilled shale wells are sitting idle, unfracked and uncompleted.

(Click to enlarge)

Once the DUCs are completed, new production will come online. And just as before, that backlog still weighs on the market. Wood Mackenzie estimates that if the Permian Basin’s DUC list was completed, it would add 300,000 bpd in new supply.That supply sitting on the sidelines will put downward pressure on any new oil price rally.

And worse still, as OilPrice.com's Tsvetana Paraskova, it seems the Saudis are starting to panic at the loss of market share… Abundant supply of light oil in Asia and weaker demand amid some seasonal refinery maintenance will likely prompt Saudi Arabia to cut the official selling price for most of its crude varieties bound for Asia in May.

At the beginning of March, Saudi Arabia unexpectedly lowered the April price for the light crude it sells to Asia. According to trade sources who spoke to Reuters, Saudi Arabia’s official selling price (OSP) for Arab Light was set for April at the low end of the range expected by a Reuters survey. At that time, the price for Arab Extra Light was cut by $0.75, which was more than expected.

For the May OSP, according to a Reuters survey of four Asian refiners, Saudi Arabia would likely cut the price of its Arab Light crude by $0.10-$0.40 per barrel from the April OSP.

“I’m seeing price reductions across the board,” one of the refiners surveyed told Reuters.

The Arab Light and Arab Extra Light grades prices are expected to drop more than the medium and heavy grades, since the Asian market is oversupplied mostly with light oil varieties, according to the sources Reuters has polled.

OPEC’s output cuts have made it profitable for oil traders to send crude from as far as the U.S., the North Sea and West Africa to Asia, and this has weakened demand for spot market purchases from Middle Eastern grades.

Another respondent in the Reuters survey for May prices said:

“The spot market is weak. Almost every type of crude is sold at discount against its OSP.”

Saudi Arabia releases OSPs for its grades around the fifth of each month, and as a policy Saudi Aramco does not comment on the monthly prices that Saudi Arabia is setting. The Saudi OSPs generally establish the trend for the prices that Iran, Kuwait, and Iraq charge for Asia-bound crude.

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The Neighborhood of Make-Believe Prepares for War

For a week in 1983, life took a dark turn in the Neighborhood of Make-Believe. Over the course of five episodes of Mister Rogers, a mixture of miscommunication and anxiety convinced King Friday that another neighborhood nearby was stockpiling weapons. The king then ordered a major arms buildup himself, diverting money from the education budget and issuing an order to “conscript everyone in the neighborhood to help put the bombs together.” Some of the other characters were willing to go along with this. (“King Friday wouldn’t have us doing anything that was going to hurt anybody. He’s always trying to keep people safe!” said X the Owl. “We shouldn’t call them ‘bombs,’ though. We should call them ‘surprise treats’ or something like that.”). But the orders did prompt some dissent from Lady Elaine Fairchilde, here as always the puppet most likely to call bullshit on King Friday. The tensions kept ramping up, with gas masks and air raid drills, until Lady Elaine and Lady Aberlin discerned that the other neighborhood had actually been building a bridge, not bombs.

This comment on the arms race aired the same month as The Day After, a TV movie about a nuclear war. There was a big wave of worry about whether that film was too scary for children to see, and there were rumors that the Mister Rogers storyline was conceived as an alternative to The Day After for young audiences. In fact it had been conceived separately and the timing was a coincidence.

Eventually the episodes were withdrawn from rotation. But this month the first two installments of the sequence turned up on YouTube, leading to what may be my all-time favorite Daily Beast headline:

The article below that headline concedes that it is unlikely these were posted to protest the president’s proposed arms buildup. Though I must admit I kind of like the idea that someone is trying to communicate with the White House by quietly adding old episodes of children’s television to YouTube.

Anyway. After word spread that these were online, the copyright cadres swung into action and YouTube took them down. (Which is odd, since plenty of other old Mister Rogers episodes are on the site.) Someone else has reposted them, and I’m embedding that video below; the two Neighborhood of Make-Believe sequences start at the 16:19 and 42:09 marks. Watch ’em while you can:

I can’t show you parts three through five, but you can read summaries of them here, here, and here. Incidentally, the episodes embedded above also include some lessons about banks and mints. These spill in to the Neighborhood of Make-Believe story when King Friday gets his treasurer Mr. Newmoney on the phone and inquires about how much cash is available for war production.

(For past editions of the Friday A/V Club, go here.)

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China’s Record Iron Ore Glut: Enough To Build 13,000 Eiffel Towers

Earlier this week we discussed the reason for the recent drop in iron ore prices, which had been attributed to the discovery of massive data fabrication and misrepresentation of commodity production cuts in China (think OPEC), whose biggest steel-producing province was found lying about mandatory output reductions, and instead of curbing was in fact accelerating production.

A steel factory in Wu’an, Hebei province

As Reuters reported at the time, Hebei, China’s biggest steel-producing province, launched a probe into steel overproduction in the city of Tangshan “amid concerns that firms have continued to raise output despite mandatory capacity cuts.”

Tangshan is the heartland of Chinese steel production. The city is home to the headquarters of the state-owned Tangsteel Group, which in 2006 merged with other companies to form Hebei Steel Group, the second-largest steel producer in the world. Located around 100 miles east of the capital Beijing, Tangshan is on the frontline of the country’s “war on pollution”, and was seventh on the list of China’s ten smoggiest cities in the first two months of this year.

 

Hebei was ordered by China’s central government to investigate firms in Tangshan that have “restricted but not cut production, restricted production but not actually cut emissions, and cut capacity but actually increased output,” the provincial dated March 25 said, and circulated by traders on Monday.

 

The notice, sent on Saturday, cites orders from President Xi Jinping and Zhang Gaoli, the vice-premier, for Tangshan to investigate the problem of falsely reported plant closures and rising steel output.

Fast forward to Friday, when the environmental protection ministry quickly found pervasive problems “including data fabrication and output curb failure” in air pollution checks in 1Q at some 3,119 companies or nearly 40% of the 8,500 companies inspected, according to a statement from the ministry. Among the companies names, Chalco’s Henan unit didn’t fully implement output curbs in heavy pollution days, according to findings of the inspection while an affiliate to BAIC Group found to have “not strictly implemented VOC emission standards.” Amusingly, companies including a Foxconn affiliate in Langfang city tried to reject inspections The inspection covered more than 8,500 companies in regions including Beijing and Tianjin.

Ok, so China lied again; that in itself is hardly newsworthy. After all China lies about everything, from its GDP, to its gold holdings, to its reserve outflows, to the total debt in its economy.

However, for iron ore traders, the implications could be dire, as China’s activity means that instead of reducing production to reach a demand equilibrium, it had merely been stockpiling iron ore inventory at various ports around the country, while giving the world the false impression that output, and thus the market, was tighter than it was in reality, sending iron ore prices nearly doubling over the past year – one of the primary culprits for the global reflation wave that has been misconstrued as a global economic recovery – even though in recent weeks iron ore prices have stumbled as China’s ruse has finally been exposed.

The question then becomes what happens with China’s unprecedented iron-ore stockpiles, especially at a time when Beijing is actively seeking to impose curbs on the housing bubble. For those unfamiliar, this is what China’s total iron ore inventories look like as of this moment: they are now at all time highs.

That chart above, however does not do justice to China’s inventory glut, so here is another attempt at putting it in context from Reuters, which writes that with enough iron ore to construct Paris’s Eiffel Tower nearly 13,000 times over, China’s ports are bursting with stockpiles of the raw material and some of them are demolishing old buildings to create more storage space, trading sources said.

Inventory of imported iron ore at 46 Chinese ports reached 132.45 million tonnes on March 24, SteelHome consultancy said, the highest since it began tracking the data in 2004. A third of the stocks belongs to traders and the rest is owned by China’s steel mills, SteelHome said. That volume would make about 95 million tonnes of steel, enough to build 12,960 replicas of the 324-metre (1,063-foot) high Eiffel Tower in Paris.

Some ports, trying to manage their storage space, have in recent weeks rejected vessels carrying lower grade iron ore that is less preferred than higher quality material and could take months to clear, said a source at a foreign trading firm that has millions of tonnes of the steelmaking ingredient at Chinese ports.

“We have sent our people around the major ports in China and some are trying to find extra space. They’re demolishing some abandoned buildings to create more space,” said the source, who declined to be named because he is not permitted to discuss the matter publicly.

It’s only getting worse: if iron ore stocks continue rising “we’re going to reach maximum physical capacity at all ports in China by early June, said the source. “We saw some ports rejecting low-grade shipments which are very difficult to liquidate.”

* * *

Meanwhile, having believed China’s lies about production cuts and sending prices to a two and a half year high, global commodity traders are suffering from a case of accumulated buyer’s remorse with global iron ore prices now just above $80 a tonne from a 30-month peak of $94.86 reached in February, largely due to the growing port inventory.

Prices surged 81% last year, bringing relief to miners after a three-year rout. The rally stretched into 2017, inspiring marginal producers to resume business and lifting supply as China’s steel demand waned. Further falls in the price of iron ore risk shuttering Chinese capacity again. That could boost China’s reliance on top-grade exporters Vale, Rio Tinto and BHP Billiton.

The recent price surge only made matters worse, with China’s domestic iron ore production jumping 15.3% in January-February as a price rally last year extended into 2017, causing imported ore to pile up at the ports of the world’s top buyer.

Needless to say, local merchants and producers are already starting to panic at visions of iron ore prices in freefall. Including another 40 million tonnes of iron ore at China’s steel mills “that’s too much of stock,” said Li Xinchuang, vice chairman at China Iron and Steel Association. “It will be very dangerous for the price. That’s what’s very worrying about it,” Li told Reuters at an industry conference on Thursday. Worse, Li said most of the stocks in ports were high quality iron ore despite perceptions in the market that the bulk of it was low-grade eliminating the ability to deny low quality ore.

An official at Jingtang port in Tangshan told Reuters there are 15 million tonnes of iron ore stocked there currently, not far from its capacity of 20 million tonnes.

Paradoxically, even as China’s iron ore glut hits extreme proportions, China continues to import the commodity with Australian miner Fortescue Metals Group, the world’s No. 4 iron ore supplier which ships lower grade material mainly to China, saying its deliveries to the country are “continuing as normal.”

“While port stocks overall are at relatively high levels, Fortescue’s share of those stocks aligns with our market share of imported ore into China,” Fortescue CEO Nev Power said by email in response to a Reuters query.

A truck drives past piles of iron ore at the dump site of a port in Rizhao.

Chinese ports can refuse discharge of some shipments and it’s up to the importer to find another port but costs due to delays would be borne by the importer, said a shipping manager for a Chinese trading firm. Still, slow demand could swell port stocks further as more shipments tied to Chinese mills’ long-term contracts with miners arrive and traders scour the market for clients.

“We have a fleet of vessels on their way to China with no buyers. We’re trying to find buyers,” said the foreign trading source.

If no buyers are found, iron ore prices will plunge, resulting in another shock to China’s manufacturing sector, leading to another collapse in cash flows, a surge in bailouts and defaults, and a fresh deflationary wave being unleashed on the rest of the world as China’s wholesale inflation once again tumbles into negative territory.

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Congressional Republicans Introduce a Trump-Pleasing Tax Hike

Pro-tax Republican Mike Rogers. ||| House of RepresentativesQ: What kind of tax hike can 21st century Republicans get behind?

A: One that pays for a border wall, and can be sold, inaccurately, as an “Illegal Immigrant Tax.”

Rep. Mike Rogers (R-Ala.) yesterday introduced the Border Wall Funding Act, imposing what he describes as a “2% fee on remittances sent south of the border.” The bill has yet to be posted online as far as I can tell, but according to The Plainsman of Auburn the tax would apply to monies sent to “more than 40 Latin American countries.” Rogers’s sales pitch: “This bill is simple – anyone who sends their money to countries that benefit from our porous borders and illegal immigration should be responsible for providing some of the funds needed to complete the wall. This bill keeps money in the American economy, and most importantly, it creates a funding stream to build the wall.”

Traditionally, nationalistic controls on capital flows have not been associated with liberal democracy and the rule of law. According to a skeptical analysis published last week by the World Bank, other countries currently considering such a levy include “Bahrain, Kuwait, Oman, Saudi Arabia…and the United Arab Emirates.” Previous efforts in Gabon (2008) and Palau (2013), “have not worked,” World Bank author Dilip Ratha asserted, because the “tax collections were found to be insignificant.”

As Nick Gillespie pointed out a year ago, after then-candidate Donald Trump proposed cracking down on remittances to pay for his wall, the idea is fundamentally corrupted by “the assumption that the government has the right to unilaterally stop people from spending the money they earn and possess; that the feds have a right to tell you where you can and cannot go or even send checks.” That has not stopped the likes of National Review from editorially endorsing such a nationwide tax.

||| World BankThe United States is by far the leading source of remittances in the world, with its residents sending to other countries $135 billion in 2015, some 23 percent of the global total, according to research published this month by the international banking conglomerate BBVA. Monies sent to Latin America and the Caribbean accounted for 38.5% of the U.S. total, BBVA estimated, led by Mexico ($27 billion, or more than the country’s annual oil revenue), then Guatemala ($7 million) and the Dominican Republic ($5 million). As a percentage of the host-countries’ GDP, however, Mexico’s 2.6 percent lags far behind Haiti (24.7 percent), Honduras (18.2 percent), and Jamaica (16.9 percent).

There is no reason to assume that the bulk of these funds derive from illegal immigrants. Of the 41 million or so foreign-born residents of the United States, an estimated 11 million are not authorized to be here, and are probably less likely than their legal brethren to use money conduits that are traceable by the feds. (And as any Cuban can tell you, there are plenty of U.S.-born hyphenated-Americans who wire money back to the island, further broadening the pool of donors, and again underscoring the truism that measures taken against illegal immigrants also pinch the freedom of natural-born citizens.) The money they send back is critical in ameliorating poverty and jump-starting economic activity. In other words, it helps create the kinds of conditions that may keep an increasing number of would-be migrants at home.

According to the World Bank analysis, “In 2016, migrant remittance flows to developing countries amounted to $440 billion, more than three times the size of official development aid flows. In many countries, remittances are the largest source of foreign exchange. In India and Mexico, they are larger than foreign direct investment; in Egypt, they are larger than the revenue from Suez Canal; and in Pakistan, they are larger than the country’s international reserves.”

Not wasting their money on design talent, anyway. ||| G20For this reason, the G20, the global club of rich nations led by the United States, agreed in September 2014 on a “Plan to Facilitate Remittance Flows,” with the intention to reduce the worldwide average tax on remittances from 8 percent down to 5 percent. From that (jargon-flecked) document:

The Group of Twenty (G20) recognises the value of remittance flows in helping to drive strong, sustainable and balanced growth. Remittances represent a major source of income for millions of families and businesses globally, and are an important avenue to greater financial inclusion. For the poorest and most vulnerable, access to remittance flows provides a sustainable path out of poverty, as more than half the world’s adult population have limited access to finance. In 2014, remittances to developing countries are expected to reach $436 billion, far exceeding Official Development Assistance. Remittances to and from G20 countries account for almost 80 per cent of global remittance flows.

OK, so maybe a remittance tax is a philosophically suspect idea that hampers global anti-poverty efforts. Still, would it work? Preliminary studies and anecdotal behavior patterns point to no.

Candidate Trump’s somewhat convoluted plan from a year ago tying remittances to the wall involved basically threatening Mexico with such a tax in order to extract a lump-sum payment, and when that fails amend the Patriot Act to make wire transferrers prove their citizenship or else face taxes on their shipments. Though the idea faded, it was treated seriously enough that the Government Accountability Office (GAO) released an exhaustive analysis that guesstimated the wide band of potential effects like this:

one scenario with no change in the amount of remittances and low administrative and enforcement costs could provide $0.41 billion in potential net revenue for border protection. In contrast, another scenario with a 75 percent reduction in remittances after the fine and high administrative and enforcement costs would generate potential net revenue of only $0.01 billion. In some cases, the cost incurred by CFPB could be more than the revenue from the fine.

So best-case scenario, $410 million in pocket change. That’s not much of a wall.

Granted, the 2 percent south-of-the-border remittance tax is a much broader and cleaner proposal, but it faces many of the same potential pitfalls, namely that only around half of money transfers as it is go through regulated channels, which means making that more expensive will drive more people to black market solutions like Bitcoin, as in Venezuela.

Republicans once believed as a matter of bedrock faith that the free flow of capital, goods, and humans across the southern border was the best way to produce the kind of economic development that depresses illegal border crossings. The loss of that faith, which predates the rise of Donald Trump, has been one of the most disturbing spectacles in American politics.

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No, LGBT Rights Are Not and Should Not Be Dependent on Census Questions

Census 2010This week in ginned-up Donald Trump administration outrage that distracts from actual issues: The census will continue to not ask questions that they haven’t been asking about LGBT people. This in some quarters has been presented as some sort of LGBT “erasure.” It’s not.

At least when activists within the LGBT and progressive community freaked out about the possibility of an anti-gay executive order coming from President Donald Trump’s administration, there was actual documentation. It turned out that Trump was not interested in signing such an executive order and it never came to be. But at least there was smoke to be concerned about if not an actual fire.

Such is not the case with this week’s LGBT anti-Trump outrage, which turns out to fundamentally be less about gay and transgender rights and more about organizations who want a slice of the great federal spending pie.

To explain: The U.S. Census put out a proposal earlier in the week for questions it may ask during the 2020 census. Sexual orientation and gender identity were among the potential discussion topics. This was not something the Census had asked previously, which you know if you’ve participated in a census, ever.

Then, the Census quickly explained that it had not intended to include the questions about sexual orientation and gender identity this time and withdrew the topics. So the Census, which had never asked people if they were LGBT before, is not planning to ask in the 2020 Census either.

Cue the outrage. The first headline I saw came from Out Magazine, a top gay-targeted publication. The headline read “Trump Administration Omits LGBTQ People from the 2020 Census.” My initial reaction was “Woo hoo! I don’t have to participate in the census!” But even before reading I suspected that wasn’t what the story actually meant.

The Trump administration is not omitting LGBT people from the Census, and a writer actually analyzing how the announcement played out notes that the Trump administration might not have even played any role in the consideration of the questions at all. Even Snopes has gotten into the act with an explainer.

What actually happened is that the National LGBTQ Task Force, an activist group with an open, stated agenda of having these questions added to the Census, put out a press release declaring their unhappiness in seeing the questions get deleted. I don’t use “agenda” as a negative here, and I don’t necessarily see an issue with the Census asking people their orientations for demographic purposes, as long as it’s made very, very clear that answers are completely voluntary.

But there is a deliberately misplaced outrage here that wants to trick LGBT people into thinking that their rights and equal protection under the law is dependent on whether the federal government knows that they’re gay or transgender. This is a seriously unsettling proposition. Here’s a quote from Meghan Maury, criminal and economic justice project director of the National LGBTQ Task Force:

“Today, the Trump Administration has taken yet another step to deny LGBTQ people freedom, justice, and equity, by choosing to exclude us from the 2020 Census and American Community Survey. LGBTQ people are not counted on the Census—no data is collected on sexual orientation or gender identity. Information from these surveys helps the government to enforce federal laws like the Violence Against Women Act and the Fair Housing Act and to determine how to allocate resources like housing supports and food stamps. If the government doesn’t know how many LGBTQ people live in a community, how can it do its job to ensure we’re getting fair and adequate access to the rights, protections and services we need?”

What does demographic inclusion in a study have to do with whether LGBT people are treated equally under the law? Nothing. The Supreme Court decision on same-sex marriage, for example, is a ruling precedent that makes it clear that rights and privileges extended by the government are to apply equally. It doesn’t actually matter how many gay marriages there are (which, interestingly enough, is the one area that will be counted in the Census). Rights and freedoms are not based on head counts or a demographic analysis of where people live.

This isn’t about rights. It’s about money. This is about organizations and activists who are hoping to use this demographic data to get a bigger slice of federal funding. And that’s infuriating. Even were I to accept that the federal government is a good mechanism for filtering money down to local charitable non-profits (and it’s typically not—check out the problems with Community Development Block Grants here), this is a clear attempt to try to use demographic-based funding as a replacement for funding mechanisms based on actual customer bases.

Using myself as an example: I’m a gay man living in Los Angeles. I am fortunate enough (thanks to Reason’s many supporters) to live comfortably enough to not need these government welfare or health services. But if these services could include me demographically as a potential customer then they could lobby for more money. That I might never set foot in these places is not relevant. These are organizations that serve gay people, and I’m a gay person, so give them money.

Imagine if public schools could get funding based on how many school-age children live in their district instead of actual attendance? The corrupt consequences would make the school system an even bigger disaster than it is now. They would care less about outcomes. They would care less if students even went to school.

This incident of phony outrage is particularly offensive because it takes the goals of certain social and political organizations with agendas that not all LGBT people share and attempts to argue that this is a mechanism to protect our rights and freedoms. And furthermore, they’re arguing that we should be giving up our privacy as gay people in order to do so! Maybe ask some Japanese-Americans how that worked out for them during World War II? (Spoiler: It didn’t end so well.)

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Missing Children Rarely Abducted by Strangers

Missing and abducted children have been a big news topic lately, spurred by a host of high-profile conspiracy-theories and falsehoods that began slithering their way through social media. A casual observer could be forgiven for thinking we’re in the midst of a child-abduction epidemic. But the truth is that American children today are no more likely to be kidnapped than they were decades ago, and much more likely to be returned safely when they are.

According to an estimate from the federal Office of Juvenile Justice and Delinquency Prevention (OJJDP), there were just 105 “stereotypical kidnappings” in America between late 2010 and late 2011, the last period for which we have data. (For reference, there were about 73.9 million children in America that year.) Just 65 of these kidnappings were committed by strangers. Less than half involved the abduction of a child under age 12. Only 14 percent of cases were still open after one week, and 92 percent of victims were recovered or returned alive.

In the previous OJJDP survey, from the late 1900s, there had been an estimated 115 stereotypical kidnappings and just 60 percent of victims made it home.

The Department of Justice (DOJ) defines stereotypical kidnappings as those in which 1) the victim is under 18-years-old, 2) the kidnapper is either a stranger or a “slight acquaintance,” 3) the abduction involves moving the victim at least 20 feet or detaining them for at least one hour, and 4) the victim is either held for ransom, transported at least 50 miles, detained overnight, held with an intent to keep permanently, or killed. In other words, these are “the most serious” sorts of child abductions, as DOJ puts it.

However, not all of the 105 cases in this category are quite as stereotypical or serious as the others. DOJ defines slight acquaintance as someone the child or their family have known for less than six months, someone they’ve known for longer than six months but see less than once per month, or someone who might be recognizable to a child or their parents but not known by name. In one “stereotypical kidnapping” case DOJ highlights, a 16-year-old girl ran away to live with an adult boyfriend, who is defined as a “slight acquaintance” because she had only been seeing him a few months. So the number of stereotypical kidnappings that the general public would consider stereotypical is actually lower than the feds’ estimate.

Both the 2011 and the 1997 data come from the National Incidence Studies of Missing, Abducted, Runaway, and Thrownaway Children (NISMART). By surveying law-enforcement agencies in a representative sample of U.S. counties, OJJDP came up with estimates for the prevalence and characteristics of stereotypical kidnapping overall during the study periods. The latest NISMART survey covers incidents that occurred between October 1, 2010, and September 20, 2011. The previous survey covers incidents that occured in 1997. Here’s an overview of what the federal surveys found.

Number of “stereotypical kidnappings” in America, October 2010 – September 2011: 105

  • perpetrated by strangers: 65
  • perpetrated by slight acquaintances: 40

Are stereotypical kidnappings up or down? Down, maybe—there were 115 incidents defined as stereotypical kidnappings in the ’90s NISMART survey, compared to 105 in more recent research. But because these estimates are based in part on weighted data, the DOJ considers the two numbers “statistically equivalent.” However, 2010-2011 victims were much more likely to make it home safely than their 1990s counterparts. In the 90s survey, only 60 percent of stereotypical kidnapping cases ended with the child being recovered alive. In the 2010-2011 survey, it was 92 percent.

Ages of victims: More than half of stereotypical kidnapping victims in 2010-2011 were ages 12 or above. In total, an estimated 61 victims were between 12- and 17-years-old. An estimated 19 victims were between 6- and 11-years-old, with 11 victims between ages three and five and around 14 that were two-years-old or younger.

Race, ethnicity, and gender of victims: Most of the stereotypical kidnapping victims from the more recent survey—approximately 81 percent—were female. Girls ages 12-17 accounted for about half of all victims, with girls age 11 or younger accounting for another 30 percent. About 12 percent of victims were boys age 11 or younger. Nearly two-thirds (61 percent) of victims from 2010-11 were white, 31 percent were black, and about 24 percent were (white or black) Hispanic. In the 1997 survey, 74 percent of stereotypical-kidnapping victims were white and 19 percent were black, with eight percent identified as Hispanic.

Race, ethnicity, and gender of perpetrators: Three quarters of perpetrators were male, and nearly three quarters were between 18- and 35-years-old. The remaining perpetrators were mostly between the ages of 36 and 45. Around 44 percent were white, 45 percent black, and 18 percent were Hispanic. Relatively few cases (17 percent) involved more than one kidnapper.

Where and how do stereotypical kidnappings occur? About 32 percent of those abducted were taken from a place where they were living or staying (their home, a relative’s home, a homeless shelter, etc.). Another 32 percent were abducted at the kidnapper’s home. The final 36 percent of victims were taken from a public place of some sort. Most cases featured only one victim (81 percent) and only 18 percent of cases involved a child taken from a group of two or more children. In nearly two-thirds of the abductions, the victims voluntarily went with kidnappers at first.

What happens to victims after they’re abducted? In 66 percent of stereotypical kidnapping cases, a perpetrator used force or threats to detain their victim(s). About 37 cases involved physical abuse, 66 cases involved sexual abuse, and 25 cases involved neglect. Some 17 cases were suspected to be related to sex trafficking, but did not necessarily involve sex trafficking.

In more than one third of the stereotypical kidnapping cases, victims were found or returned within 24 hours. In another 31 percent of incidents, the victim was found or returned within one to three days. Only 15 total cases dragged on for more than one week.

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Here’s Why Used Car Prices May Crash 50%

For months we’ve been talking about the massive lending bubble propping up the U.S. auto market.  Now, noting many of the same concerns that we’ve highlighted repeatedly, Morgan Stanley’s auto team, led by Adam Jonas, has just issued a report detailing why they think used car prices could crash by up to 50% over the next 4-5 years. 

Here’s the summary (flood of supply, poor lending standards and desperate OEMs who need to keep new car sales elevated at all costs):

  • Off-lease supply: This has already more than doubled since 2012 and is set to rise another 25% over the next 2 years.
  • Extended credit terms: Auto loans are at record lengths and lease assumptions (residuals, money factor) are at record levels of accommodation.
  • Rising rates: Starting from record low levels in auto loans.
  • Overdependency on auto ABS: The outstanding balance of auto securitizations has surpassed last cycle’s peak.
  • Record high deep subprime participation: 32% of subprime auto ABS deals were deep subprime (weighted average FICO < 550) in 2016 vs. 5% in 2010.
  • Record high units of new car inventory: 2016YE unit inventory levels were near 10% higher than 2015YE, and are continuing to trend higher in 2017.
  • OEM price competition: Car manufacturers have capacitized to a 19mm or 20mm SAAR. At this point in the cycle we start seeing more money ‘on the hood’ to move the metal. As new car prices fall, used prices look relatively more expensive, which necessitates a decline in used prices to equilibrate the supply/demand imbalance.
  • Increased ADAS penetration: We expect auto firms to achieve nearly 100% active safety penetration by 2020, creating an unprecedented safety gap between new and used vehicles, accelerating obsolescence of the used stock. Rising insurance premiums on older cars could accelerate this shift.
  • Trouble in the car rental market: Due to a number of secular shifts, including how consumers access transportation options (e.g. ride sharing), car rental firms are facing stagnant growth, weak pricing and over-fleeted conditions. As these cars hit the auction, the impact on prices could be significant.

All of which Morgan Stanley thinks could spark a 50% decline in used car prices over the next couple of years.  So, for all of you pension funds out there scooping up all of the AAA-rated slugs of the latest auto ABS deals for the ‘juicy yield’, now might be a good time to review what happened to the investment grade tranches of MBS structures back in 2009 when home prices crashed by similar amounts.

Used Car Prices

And here are the stats…

Off-lease volumes have already doubled since 2012 and are only expected to get worse…meanwhile, lending standards have gradually gotten worse and worse…

 

…as further revealed by the growing share of ‘deep subprime’ loans in auto ABS deals.

 

Of course, so far negative equity hasn’t been a problem for car buyers because lenders have been all too willing to roll those debt balances into new loans.  And, courtesy of low rates and stretched out terms, consumers haven’t really cared that their debt balances are ballooning so long as their monthly payments remain low. 

 

Meanwhile, none of the warnings about a flood of used car volumes about to hit the market has impacted new car volumes being pushed on to dealer lots.

 

All of which results in this fairly brutal outlook for used car prices:

 

Dear OEMs, the first step is admitting you have a problem.

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