Trumpflation Hope “On The Brink” As Treasury Yields Hover At Key Support Levels

With the yield curve having already collapsed below pre-Trump-election levels, all eyes are on the 10Y Treasury yield and a crucial support level that was hit today that may divide hope from reality.

It appears The Fed Hike "policy error" spoiled The Trumpflation hopes…

 

And, as Bloomberg reports, the benchmark 10-year Treasury yield fell Tuesday to as low as 2.31 percent, within a basis point of its 2017 low. In the process, it broke below its 100-day moving average by the most since September and breached a key Fibonacci retracement level for the past year. It’s looking like the peak yield levels from December and March may be a “textbook double top,” according to Ian Lyngen at BMO Capital Markets.

Goldman Sachs suggests the level to watch now is the Feb. 24th low at 2.308%. Anything below this pivot, even on an intraday basis, signals that a meaningful top was put in at the March high. It basically means that this cannot be waves i and ii of an incomplete v/5 but actually the initial stages of a corrective process. Assuming this is the case, that the market has in fact completed 5-waves, the correction should last around one third of the time it took to form 5-waves; in other words until around mid-June. As is always the case, corrections are messy and often difficult/overlapping. Ultimately looking for a three wave ABC process before continuing the underlying (up)trend. In terms of levels, the next big pivot below 2.32-2.305% is 38.2% retrace down at 2.127%.


 
Downside risks heighten below 2.308%. A break would open a period of corrective price action, which could last until mid-June. Next support 2.127%.

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Jeff Sessions Orders Review of All Consent Decrees, Plus a Host of Other DOJ Activities

In a memo issued Friday and released yesterday, Attorney General Jeff Sessions ordered an immediate review of a wide range of Department of Justice (DOJ) activities that involve the department cooperating or otherwise partnering with local law enforcement, including “collaborative investigations and prosecutions, grant making, technical assistance and training, compliance reviews, existing or contemplated consent decrees, and task force participation.”

Sessions writes that the purpose of the review is to “ensure that they fully and effectively promote the principles” Sessions says should be at the core of the Department of Justice. He lists eight principles in the memo—just one of them, the third, is relevant to constitutional concerns. “Local law enforcement must protect and repsect the civil rights of all members of the public,” Sessions writes. The two principles preceding that point were that public safety was the “paramount concern and duty of law enforcement officials” and that the DOJ should “help promote officer safety, officer morale, and public respect for their work.”

Other principles Sessions mentions, and which he expects the Department-wide review to check for, are “local control and local accountability,” that the “misdeeds of individual bad actors should not impugn or undermine the legitimate and honorable work that law enforcement officers and agencies perform,” that crime data collection and analysis were “essential for effective law enforcement strategies,” that recruitment and training should “focus on making law enforcement a rewarding career,” and that local-federal collaboration was “important” and that jurisdictions that accepted DOJ money were “expected to adhere to the department’s grant conditions as well as to all federal laws.”

Very little in these principles, which Sessions said in his memo advanced the goals he says they’re supposed to, which are “to effectively promote a peaceful and lawful society, where the civil rights of all persons are valued and protected.” Only one of the principles has anything to do with civil rights, suggesting Sessions is taking the approach common on the right, and left, that protecting civil rights actually means fighting crimes (or seizing guns) because civil rights actually mean public safety. It’s a silly argument that nevertheless is attractive to the wide swath of the American population that does not have a clear understanding of constitutional rights or what it means to live in a free society. It’s a condition that leads to arguments like “my right not to be shot trumps the right to bear arms” or “criminals don’t have rights.”

While Sessions insists his memo shouldn’t be “be construed to delay or impede any pending criminal or national security investigation or program,” the department has already asked for a 90-day postponement of a hearing on a proposed consent decree between the DOJ and the Baltimore police department so that it could “review and assess” the proposal. Baltimore’s mayor says the city will officially oppose the DOJ’s request for a postponement. Chicago leaders say, somewhat incredulously, that they’ll continue to work on police reform no matter what the DOJ says. “Chicago has been, is, and always will be committed to reform,” Mayor Rahm Emanuel and the police chief, Eddie Johnson, wrote in a statement released yesterday—the lofty rhetoric is not matched by actual actions. There’s no evidence Chicago has been or is continued to reform, only that it’s political leaders understand how to use reform rhetoric for their own interests. Sessions has also previously criticized the DOJ reports on Ferguson and Baltimore as being “anecdotal” despite admitting he hadn’t actually read the reports (which should not take more than a couple of hours to get through).

Sessions’ memo and its focus on officer safety fits in with the campaign promises Donald Trump made while running for president. At his inauguration, Trump vowed to end the “dangerous anti-police atmosphere” in the country. The idea that increased and sustained interest in police reform and reducing police violence creates an “anti-police” atmosphere is deeply misleading. In 2016, 64 police officers were shot and killed around the country, an increase over the 51 killed in 2015, but less than the 68 killed in 2011 and the 67 killed in 2007, according to the National Law Enforcement Memorial Fund. The deaths in 2007 and 2011 were not similarly politicized because the cause of police reform was not particularly a national issue, so there was no incentive to do so. Now there is, but the numbers are miniscule given the more than 750,000 law enforcement officers working around the country, and the year-to-year differences are mostly statistical noise. 2013 saw just 31 law enforcement officers shot and killed in the line of duty, the fewest killed by gunfire since 1880, and half the number of those killed in 2011 despite no discernable policy changes in those two years that the drop could’ve been attributed to.

While the DOJ under the Obama administration had a somewhat faster pace of opening investigations into police departments, such investigations have taken place since the 1990s, when they became the law. The Civil Rights Division of the DOJ has 14 consent decrees it is currently enforcing, and 5 other agreements with local law enforcement. Between 1994, the year such investigations started, and 2008, the DOJ concluded 20 reform agreements—the Clinton DOJ had previously opened 5 investigations that led to such agreements and the Bush DOJ 10. The Trump administration inherited 19 agreements, and 3 open investigations—Baltimore, Chicago, and the Orange County, California, Sheriff’s Department and District Attorney’s office.

Between 1994 and 2008 the DOJ entered into 20 reform agreements as a result of a pattern-or-practice investigation. The Clinton administration DOJ opened 5 investigations that resulted in reform agreements, and the Bush administration 10. The Obama DOJ is handing over at least three open investigations (including that of the Orange County Sheriff’s Department and District Attorney’s Office) to the incoming Trump administration, plus the 19 agreements currently in enforcement. Sessions’ hesitance to commit to continuing a 20-year-long federal practice that has helped induce reforms at local police departments highlights the importance of police reform as an issue in local politics, where in recent years it has been used to some effect by politicians as a rhetorical tool but has not been a sustained policy concern.

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If What Susan Rice Did Wasn’t Illegal, It Should Be

We should never forget that everything Adolf Hitler did in Germany was “legal” and everything the Hungarian freedom fighters did in Hungary was “illegal.” It was “illegal” to aid and comfort a Jew in Hitler’s Germany. Even so, I am sure that, had I lived in Germany at the time, I would have aided and comforted my Jewish brothers.

From the 2013 post, Martin Luther King: “Everything Adolf Hitler did in Germany was Legal”

The fact that most of the debate surrounding the unmasking of Trump personnel revolves around whether it was legal or not highlights just how superficial and ethically deranged our culture has become. If what she did was indeed legal, this is an enormous problem in the first place, one that privacy advocates and opponents of Big Brother surveillance have been warning about constantly since the gulag spying panopticon was put in place following 9/11. For the purposes of this post, let’s assume that what Susan Rice did was legal.

If her actions were indeed totally by the books, we need to use this incident as a rallying call to reform the laws immediately. Likewise, Donald Trump should be pushing such reform tirelessly from his bully pulpit, but given his authoritarian nature I doubt he will. Fortunately, Rand Paul is heeding the call.

As reported by The Hill:

continue reading

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Richmond Fed President Lacker Resigns After Admitting He Leaked Confidential Fed Information

We can now close the case on who leaked that confidential, market-moving data to Medley global back in 2012: it was Richmond Fed’s Jeffrey Lacker, who previously was expected to retire in October, and  is resigning immediately.

In a statement, Lacker confirms he revealed confidential FOMC information to Medley Global. His full statement is below:

Statement Of Dr. Jeffrey Lacker

 

During the past 13 years it has been my privilege to serve as President of the Federal Reserve Bank of Richmond. It has also been an honor to contribute to the development of our nation’s monetary policy as a member of the Federal Reserve’s Federal Open Market Committee (“FOMC”).

 

While transparency of the monetary policy process is important, equally important are the confidentiality policies that protect the internal deliberations of the FOMC and ensure the integrity of our financial markets. The Federal Reserve’s confidentiality policies seek to guide participants in maintaining the balance between transparency and confidentiality. The FOMC has had in place for many years two specific policies relating to confidentiality. the FOMC Policy on External Communications of Committee Participants (the “External Communications Policy-) and the Program for Security of FOMC Information (the “Information Security Policy”).

 

In 2012, my conduct was inconsistent with those important confidentiality policies. Specifically, on October 2, 2012, I spoke by phone with an analyst (“the Analyst”) concerning the September 2012 meeting of the FOMC. The Analyst authors reports on Federal Reserve matters on behalf of Medley Global Advisors (“Medley’). Medley publishes macro-economic policy intelligence for institutions such as hedge funds and asset managers and is owned by the Financial Times Limited.

 

During that October 2, 2012 discussion, the Analyst introduced into the conversation an important non-public detail about one of the policy options considered by participants prior to the meeting. Due to the highly confidential and sensitive nature of this information, I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse or express my inability to comment and the interview continued. Additionally, after that phone call I did not, as required by the Information Security Policy, report to any FOMC personnel that the Analyst was in possession of confidential FOMC information. When Medley published a report by the Analyst the following day, October 3, 2012, it contained this important detail about one of the policy options and I realized that my failure to decline comment on the information could have been taken by the Analyst, in the context of the conversation, as an acknowledgment or confirmation of the information.

 

I deeply regret the role I may have played in confirming this confidential information and in its dissemination to Medley’s subscribers. In this episode, as in all of my communications with analysts, journalists and the public, it was never my intention to reveal confidential information. I further acknowledge that through this and other conversations with the Analyst, I may have contravened the External Communications Policy, which prohibits providing any profit-making person or organization with a prestige advantage over its competitors.

 

Following these events, I was interviewed on December 10, 2012, as part of an internal review conducted by the General Counsel of the FOMC. In advance of that interview, on December 6, 2012, I provided written responses to a questionnaire issued by the General Counsel seeking, among other things, all relevant information regarding my communications with the Analyst. Althoug it was my intention to cooperate fully with the internal review, I regret that I did not disclose to the General Counsel, either in my December 6, 2012 questionnaire or the December 10, 2012 interview, that the Analyst was in possession of confidential information during my conversation with her on October 2,2012.

 

In 2015, I was interviewed again as part of a separate investigation conducted by the United States Attorney’s Office for the Southern District of New York, the Office of the Inspector General of the Federal Reserve Board, the Federal Bureau of Investigation, and the U.S. Commodity Futures Trading Commission. In this subsequent 2015 interview with law enforcement officials, I did disclose that the Analyst was in possession of confidential information during my October 2. 2012 conversation with her.

 

I apologize to my colleagues and to the public I have been privileged to serve. I have always strived to maintain the appropriate balance between transparency and confidentiality, but I regret that in this instance I crossed the line to confirming information that should have remained confidential. I previously announced my intention to retire as President of the Federal Reserve Bank of Richmond in October 2017, and in light of these matters I have decided to make my departure from the Federal Reserve effective today.

The Richmond Fed made the following announcement moments ago, which suggests that Lacker did not leave voluntarily:

The Federal Reserve places a high priority on safeguarding information. We expect every employee to comply with all relevant policies and procedures, as well as our standards of conduct. Employees must review and acknowledge our policies annually. Once our Bank’s Board of Directors learned of the outcome of the government investigations, they took appropriate actions.

 

We are focused on moving forward within our organization—and were already underway with our presidential search, following Jeffrey Lacker’s announcement in January to retire in 2017. This search process will continue as scheduled. In the interim, First Vice President Mark Mullinix is serving as the Bank’s acting president.

This shocking event comes just hours after Chairman of the House Financial Services Committee Jeb Hensarling demanded that “American Households Should Demand a More Reliable Governance Structure for the Fed.”

While it is unclear if Lacker will now face criminal prosecution for leaking material information – recall the FBI has been probing the Fed’s 2012 leak to Medley since 2015, this is great news for Janet Yellen, who was personally close with Medley’s Regina Schleiger, ther person at the center of the Fed leak scandal, as the Fed Chair is now off the hook.

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Brazil Reports 14.6% Jump In February Oil Output, Exports Almost Double

Authored by Zainab Calcuttawala via OilPrice.com,

Brazilian oil output in February was 14.6 percent higher year-over-year, according to the latest data released by ANP, the South American country’s petroleum regulator.

February production touched 2.676 million barrels per day, an ANP statement said, adding that natural gas output also rose 9.2 percent compared to the same month last year.

Figures released earlier in March from the nation’s Trade Ministry said that oil exports had jumped 94 percent year-over-year in February at 45.7 million barrels – a figure that topped the January 2017 record by 12 percent.

The surge in oil exports was a function of higher production from the offshore areas in Brazilian waters, where huge oil finds were made in the pre-salt and sub-salt layers in the past few years.

Brazil – which is not part of the non-OPEC group that signed up to OPEC’s concerted efforts to cut global supply – had said that it planned to increase its oil production in the coming years, even before the cartel decided to commit to cuts.

Brazil announced last week that it expected to see its first profits from projects finalized under new profit-sharing agreements (PSAs) in September.

The PSAs were introduced by the government of Ignacio Lula da Silva to replace previous royalty payments and to ensure the state gets a bigger portion of the revenues derived from the deposits in Brazil’s presalt layer.

The announcement of profits from the new framework comes just as oil prices recover from 2.5 years of volatility.

New foreign investment is also a national priority for Brazil’s authority figures. After removing the requirement calling for Petrobras to be operator of all new projects in the presalt layer, last month the government also relaxed local content requirements for foreign energy companies, which they saw as a stumbling block for foreign investors. The move comes in preparation for new oil and gas block tenders scheduled for this year and next.

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North Dakota Senate Says It’s Fine for Police to Seize Property Without a Conviction

Two states in the upper Midwest this week considered making changes to state laws allowing police to seize property from innocent people suspected of committing a crime. Only one succeeded in protecting property rights.

State lawmakers in North Dakota killed a proposal that would have required law enforcement to get a criminal conviction before seizing property though civil asset forfeiture proceedings. Meanwhile, in neighboring Minnesota, a state that already requires a criminal conviction before asset forfeiture can occur, state lawmakers passed and Gov. Mark Dayton signed a bill to strengthen that 2014 law by making it harder for cops to seize jointly owned property after a DUI conviction.

Both bills demonstrate the ongoing fight between law enforcement special interests, which argue civil forfeiture is necessary to stop criminal behavior (and often benefit from the process by using seized assets to pad their department budgets), and reformers who see forfeiture as a fundamentally un-just process that victimizes innocent property owners.

In North Dakota, it seems the police have the upper hand. According to the Institute for Justice, a libertarian law firm, North Dakota has some of the worst asset forfeiture laws in the country, and that won’t be changing after the state Senate unanimously voted down a bill to require a criminal conviction before prosecutors could seize property or money involved in the crime. The bill had passed the state House in February with a 50-42 vote despite opposition from law enforcement groups.

In addition to requiring a conviction before state and local police could engage in forfeiture, the bill would have prohibited police departments from passing forfeiture cases off to federal law enforcement authorities, a practice known as “equitable sharing” that is sometimes used to get around state-level restrictions on forfeiture.

Unlike North Dakota, Minnesota has some of the nation’s best asset forfeiture laws. A 2014 law made Minnesota the second state in the nation to require a criminal conviction before forfeiture could occur, and Gov. Mark Dayton added to those protections for property owners this week by signing a bill to prohibit the forfeiture of jointly owned property, like cars, in the aftermath of a DUI arrest, Minnesota Public Radio reports.

The bill was prompted, in part, by a lawsuit challenging the seizure of a car by police in Isanti County, Minnesota. The car was jointly owned by a husband and wife, but was seized by police following the wife’s 2006 arrest for DUI. The husband, David Laase, argued that he was innocent and that he should not lose possession of the car because of his wife’s crime. The state Supreme Court ultimately upheld the forfeiture.

“This reform will open the courthouse doors to wives, parents and other innocent owner claimants and overturn a troubling ruling by the Minnesota Supreme Court,” said Lee McGrath, managing attorney of the Institute for Justice’s Minnesota office, in a statement.

With the new reforms signed into law this week, Minnesota continues to be a national leader in restricting the abusive practice of asset forfeiture. On the western banks of the Red River, though, property rights remain significantly less secure.

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Susan Rice Responds To Trump Unmasking Allegations: “I Leaked Nothing To Nobody”

If anyone expected former National Security Advisor Susan Rice, the same Susan Rice who “stretched the truth” about Benghazi, to admit in her first public appearance after news that she unmasked members of the Trump team to admit she did something wrong, will be disappointed. Instead, moments ago she told MSNBC’s Andrea Mitchell that she categorically denied that the Obama administration inappropriately spied on members of the Trump transition team.

“The allegation is that somehow, Obama administration officials utilized intelligence for political purposes,” Rice told Mitchell. “That’s absolutely false…. My job is to protect the American people and the security of our country. ”

“There was no such collection or surveillance on Trump Tower or Trump individuals, it is important to understand, directed by the White House or targeted at Trump individuals,” Rice said.

“I don’t solicit reports,” Rice said Tuesday. “They’re giving it to me, if I read it, and I think that in order for me to understand, is it significant or not so significant, I need to know who the ‘U.S. Person’ is, I can make that request.” She did concede that it is “possible” the Trump team was picked up in “incidental surveillance.”

“The notion, which some people are trying to suggest, that by asking for the identity of the American person is the same is leaking it — that’s completely false,” Rice said. “There is no equivalence between so-called unmasking and leaking.”

That said, Rice did not discuss what motive she may have had behind what Bloomberg, Fox and others have confirmed, was her unmasking of members of the Trump team.

Rice also flatly denied exposing President Trump’s former national security advisor Michael Flynn, who was forced to resign in February after media reports revealed that he misled Vice President Pence about the contents of a phone call with the Russian ambassador. Asked by Mitchell if she seeked to unmask the names of people involved in the Trump campaign in order to spy on them, Rice says: “absolutely not, for any political purpose, to spy, expose, anything.” And yet, that is what happened. She was then asked if she leaked if she leaked the name of Mike Flynn: “I leaked nothing to nobody.”

In a follow up question, Rice said that when it comes to Mike Flynn with whom she had “civil and cordial relations”, that she learned “in the press” that he was an unregistered agent for the Turkish government.

We doubt that anyone’s opinion will change after hearing the above especially considering that, in addition to Benghazi,  Rice is the official who praised Bowe Bergdahl for his “honorable service” and claimed he was captured “on the battlefield”, and then just two weeks ago, she told PBS that she didn’t know anything about the unmasking.

It is thus hardly surprising that now that her memory has been “refreshed” about her role in the unmasking, that Rice clearly remembers doing nothing at all wrong.

On Monday night, Rand Paul and other Republicans called for Rice to testify under oath, a request she sidestepped on Tuesday. “Let’s see what comes,” she told Mitchell, when asked if she would testify on the matter. “I’m not going to sit here and prejudge.”

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Sen. Rand Paul Wants to Use Fight over Trump Snooping to Pass Surveillance Reforms

Rand PaulWouldn’t it be wonderful if Reason, not beholden to either the Donald Trump administration or the previous Barack Obama administration, could tell you exactly what to take away from Eli Lake’s Bloomberg report that former National Security Adviser Susan Rice requested the names of American citizens who showed up in foreign intelligence reports connected to the Trump transition team?

The reality is, beyond the blustering politically motivated outrage from one side and the politically motivated cool dismissal from the other (you can guess which side is which), it’s tough to interpret even basic facts here, and that’s part of the problem. Lake has been careful with his reporting on the various controversies and agendas coming into play in this heavily politicized fight. Yet even he got tripped up when Rep. Devin Nunes misled him and said the White House was not the source of the classified info that the private communications between Trump’s team and foreign officials had been incidentally collected. Subsequent reporting from The New York Times determined that the sources were indeed in the White House.

What we can say is that, assuming that Rice did indeed request the names be unmasked, there are a number of potentially legitimate reasons for her to have done so (particularly if there’s an investigation into potential criminal behavior by the foreign targets of surveillance) and it was likely legal. It also doesn’t mean that she must have been responsible for leaking anything that she saw. This afternoon she denied leaking any information in an interview with MSNBC.

But if there’s distrust of Rice’s motives here from Republicans, conservatives, libertarians or really anybody concerned about the nature of the surveillance state, Rice has certainly earned it. Rice most infamously, following the deadly attack on America’s consulate in Benghazi, Libya, took to Sunday morning talk shows to lay the blame on an anti-Muslim YouTube video as an inciting factor to downplay the possibility that the U.S. had been caught unprepared for an attack. Her deliberately misleading comments should be seen as self-serving party hackery. To assume Rice’s objectivity here is to ignore the full context of her record.

Let’s be clear though: It’s entirely likely for Rice’s unmasking request to be legal and commonplace and also partly politically motivated. A lot of this battle over intelligence community surveillance revolves around false choices driven before the public by people with agendas. It is possible to believe that it is absolutely legitimate for the intelligence community to be investigating whether there are ties between Trump’s team and the Russian government in the breach of private Democratic Party communications last year and yet still be deeply concerned about politically driven leaks intended to influence domestic politics. Likewise it is possible to believe that what Rice did was legal—even commonplace—and question why that is or whether such practices should continue.

If we are concerned at the ability of America’s intelligence apparatus being misused for political purposes (and we should, because, you know, history), now is a good time to act. It just so happens that some of the foreign surveillance authorities that may have been misused here are scheduled to sunset this year unless Congress acts. And privacy advocates are hungering for reform to better protect Americans from having their information inappropriately collected and their identities “unmasked” for reasons that have nothing to do with national security or fighting terrorism.

Among those advocates is Sen. Rand Paul (R-Kentucky) who has fought to try to keep the feds from engaging in unwarranted surveillance of Americans. Paul got media attention for golfing with President Trump over the weekend and yesterday had a short press conference to talk mostly about health care reform but also potential surveillance reform in the wake of Lake’s news story yesterday.

“It is an enormous deal,” Paul said about the prospect of Rice unmasking the names of members of Trump’s team. He pointed out that the records of millions of Americans get “incidentally” collected as part of federal surveillance and objected to the idea that this should be considered commonplace.

“They’re not so ‘incidental’ when they’re you,” he pointed out. Paul wants Rice to testify whether what Lake reported was true and to ask her under oath whether she’s at all responsible for any leaks of names to the press (like Michael Flynn, who resigned as national security adviser after his conversations with a Russian diplomat—which he misled Vice President Mike Pence about—were exposed).

Shifting away from this “deep state” fight between the Trump administration and the intelligence community, Paul said he wanted to reform the surveillance authorities themselves, and wants more restrictions on unmasking names and information. He says that if it involves somebody in a political position or a candidate for office, they should have to go to a judge to sign off. He said that he would be as concerned about the possibility of politically motivated surveillance even if the two parties were reversed.

“Do we really want the outgoing administration to be able to eavesdrop on the [incoming] administration?” he asked.

A spokesperson for Paul’s office told Reason that Paul is involved in drafting legislation that would reform some of these surveillance authorities and that it would be publicly released in the coming weeks. That Paul has Trump’s ear may end up being very important in pushing through any sort of reforms that restrict the federal government’s ability to collect and keep Americans’ private communications and data. Right before this political surveillance fight broke out big, the Trump administration said they actually don’t want any federal surveillance authorities changed. Trump himself campaigned on a pro-surveillance mindset and has historically shown very little interest in citizen privacy.

Trump has been of the attitude that whatever surveillance happened during the transition was “illegal,” and that partly explains the whole debate about whether Rice’s actions were permitted. But for privacy purposes, we’d all be better off if Paul is able to push Trump toward an understanding that the law itself needs reform. Here’s a short piece from the American Civil Liberties Union that explains some of the flaws with these surveillance authorities—despite claims that it’s used to fight terrorism and keep tabs on foreign interests, it is able to target perfectly innocent people, and this private data is also used to investigate domestic crimes while bypassing the legal requirement for a warrant.

A representative from the ACLU also participated in a recent Reason-moderated panel on federal surveillance overreach at the South by Southwest conference in Austin, Texas. You can listen to that discussion here.

And an oldie but a goodie: You don’t have to be a controversial president with ties to controversial foreign leaders to be worried about federal surveillance. Here are three reasons every American should be concerned about federal surveillance.

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How a Trade Barrier Aimed at Vietnam Will Batter Businesses in Virginia and Maryland

All seafood sold commercially in the United States is subject to inspection by the Food and Drug Administration. As of September, catfish will be inspected instead by the U.S. Department of Agriculture, a more laborious and costly process. That’s because catfish, unlike other fish, is now classified as “meat” for regulatory purposes. And it is classified as meat because the Mississippi catfish industry doesn’t like to compete with Vietnamese imports. The revised rule is a thinly disguised trade barrier brought to you by Sen. Thad Cochran (R-Miss.).

We’ve noted this pending change a couple of times at Reason already; I’m bringing it up again because the Chesapeake Bay Journal‘s Rona Kobell (*) has just published a piece on what the switch will mean for the Chesapeake’s catfish catchers. Catfish weren’t introduced to the bay until the 1970s, and like many invasive species they’ve made a nuisance of themselves, gobbling up valuable crabs and menhaden. So when a local catfish industry emerged, it was a triple benefit: It meant work for fishermen and processors, it meant food for people who prefer wild catfish to the farm-raised Mississippi product, and it meant less of an invasive species. With the new regulatory burden, it’s unclear how much of that will continue:

Tim Shugrue, vice president of Congressional Seafood, said his company processes fish 16 hours every day, twice the workday length of USDA inspectors. To get an inspector on Saturdays, he said, will cost him $70 an hour, and fresh fish can’t wait to be cut until Monday.

“Many businesses will opt out of selling this invasive species rather than deal with the bureaucratic red tape,” Shugrue said, adding, “the premise of this regulation is a joke—this is being done under the guise of food safety—that somehow wild blue cat represent some grave danger to the public over and above all other seafood.”

To read the rest, go here.

(* Full disclosure: We’re married. Try not to hold her questionable taste in men against her.)

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Tesla Overtakes GM As America’s Most Valuable Car Company

It's official – for the first time ever, Elon Musk's government-subsidized car-maker is America's most valuable auto manufacturer.

Tesla shares surged another 1% today, amid a continued "trouble in shortville" ramp, topping $300 for the first time…

That gives the company a total value of $52.7 billion.

That's more than GM's $49.6 billion valuation. Tesla chief executive Elon Musk says he expects the company to sell 500,000 cars next year. GM, meanwhile, sold more than 20 times that many last year.

"If you look at the different auto companies on paper, it does seem a bit proposterous, where Tesla is at this moment, versus some of the more established auto companies," Jessica Caldwell, director of industry analysis with automotive research firm Edmunds, said in an interview with CBC's On The Money on Monday.

Tesla sold 76,285 cars last year. That compares to over 10 million for GM worldwide and 6.65 million for Ford.

"I think Tesla has had a very high market cap for a long time, so I don't think this comes necessarily as a surprise, but when you compare it to someone like Ford [or GM] who has a wealth of resources, it does seem a little out of whack," Caldwell said.

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