Some Temple University Administrators Want Marc Lamont Hill Fired For ‘Hate Speech’

MLHLast week, CNN cut ties with Marc Lamont Hill, a professor at Temple University and leftist pundit for the network, after he made comments about Israel that some consider anti-Semitic. Now some officials at Temple University want to do the same thing.

Hill’s comment came at a November 28 United Nations meeting, where he called for a “free Palestine from the river to the sea”—a phrase sometimes used by groups, such as Hamas, that support the destruction of Israel. Hill later apologized, insisting that he did not favor violence or an end to Israel’s existence, but the CNN honchos were unmoved.

CNN is under no obligation to employ Hill; his bosses can fire him because they don’t like his opinions. The same is not true for Temple, a state-related research university in Philadelphia, where Hill has tenure. Nevertheless, Patrick O’Connor, the chairman of Temple’s board, tells Philly.com that “no one is happy with [Hill’s] comments.” More concerning, O’Connor—described as a prominent lawyer in the article—also said, “Free speech is one thing. Hate speech is entirely different.”

This distinction between “hate speech” and “free speech” is nonsense. No Supreme Court decision has ever recognized hate speech as a separate, unprotected category of speech, and any attempt to regulate hate speech at a public university would assuredly be struck down as unconstitutional.

But O’Connor sounds like he wants Hill gone. “We’re going to look at what remedies we have,” he tells Philly.com. Temple President Richard Englert said in a statement that some people view Hill’s remark as a “perceived threat.” And a trustee, Leonard Barrack, has accused Hill of using coded language to call for the destruction of Israel.

Temple administrators should stand down immediately. They can criticize Hill all they want, but anti-Israel statements are protected speech, hateful or not.

This incident is a useful reminder that attempts to limit the scope of permissible speech on campus due to nebulous safety concerns—”hate speech,” “perceived threats,” etc.—will always backfire on the left. The administrative doublespeak deployed by universities in service of keeping Ben Shapiro off campus can and will be weaponized against people like Hill.

At the same time, I would like to see more conservatives stand up for fairness here. If you were outraged about Twitter (briefly) banning Jesse Kelly, or The Atlantic terminating Kevin Williamson, or ABC cancelling Roseanne, you ought to have something to say about CNN firing Hill, too.

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Socialism Always Ends In Destruction

Authored by Virginia Fidler via GoldTelegraph.com,

Every attempt at socialism has failed miserably. Venezuela is only the latest country that has tried to implement a socialist paradise, only to inevitably crumble and crash before our eyes. Socialism, and its natural progression, communism, has caused the deaths of 100 million people since its inception 100 years ago.

Just a few decades ago, Venezuela had massive oil reserves and an abundance of other resources. It enjoyed wealth and an excellent standard of living. Today, Venezuelans have no food, no medicine, and the country is driven by corruption and fear. While a starving population is in despair, many are desperately trying to flee paradise. The army, supported by President Madero, is in the street, ready to brutalize any dissenters. Madero and the military are not starving.

Socialism can only survive through corruption and intimidation. It’s a system tailor-made for corruption. And corruption may be Venezuela’s largest industry.

Despite that fact that every socialist paradise on earth has turned into hell, many American politicians, and their supporters are calling for socialism for America. Senators Bernie Sanders, Elizabeth Warren, and Kamala Harris are self-declared proud socialist, loudly singing its praises. Younger newcomers such as Alexandria Ocasio-Cortez and Andrew Gillum are joining the chorus.

With all the evidence to the contrary, why are so many Americans supporting the socialism their grandparents valiant fought against?

The very theory of socialism being a classless society is a sham. By necessity, socialism puts enormous despotic powers in the hands of only a few select people. It is clear why some politicians yearn to be among the chosen. However, it fails to explain why they are receiving a tremendous amount of support.

The U.S. Constitution is an irksome impediment to these politicians, with its checks and balances and annoying right to freedom. With freedom comes responsibility, and this is where socialist wannabes push the hardest. They, the politicians, will handle the responsibilities of daily life. They will feed you, clothed you, take care of your health, and help you think. Nothing is needed from you but absolute compliance. It’s all free, and to some, the promise can hold a great deal of appeal. By the time the promises remain unrealized, it’s too late. Power has been firmly grasped by the select few, and people’s lives are absolutely tied to the powers that be. It’s slavery by any other word. It was something the signers of the Constitution understood all too well.

Socialism rules every facet of a citizen’s life – as does slavery. It’s a relationship based on dependence and lies. Instead of equality, socialism shifts the wealth to a few loyal adherents at the top, while the masses at the bottom are left with increasingly less. It’s always been a house of cards, ready to tumble. Venezuela is simply the latest crash.

American schools are preparing the young for socialism. Political correctness reigns in classrooms, while free speech is gradually eroding. Millennials, wearing designer jeans, happily use their expensive, capitalist iPads to squash opposing opinions. All levels of American education have been deprived of any understanding of the Constitution and freedom. Students are encouraged not to think but to follow prevalent opinion. Unless real lessons return to the classroom, free speech will only be a memory. The designers of the Constitution knew that this document is the only thing standing between freedom and slavery. Get rid of the Constitution, and you eliminate the former with ease.

It is American parents that have delivered their children to this type of education. These parents, who should have known better but failed to speak out, opened the door to institutionalized group thinking. When parents fail to protect their young, the all-powerful state happily takes on the burden. Among today’s millennials, denouncing capitalism has become as chic as wearing flowers in their hair was to their parents. Schools are no longer teaching them about the 100 million who died under socialism.

The starving masses in Venezuela understand. Their prosperous oil industry is in ruins. Inflation is set to hit 1 million percent. President Maduro’s attempt at looping off zeros from the bolivar is considered a joke, except that no one is amused. Steve Hanke of the Cato Institute calls it “cosmetic surgery.” Maduro has implemented a new currency, the “petro,” which is linked to the country’s oil industry. The only problem is, Venezuela’s once-successful oil industry is rapidly failing. It has taken Maduro a mere five years to destroy Venezuela’s once-prosperous society.

Without a change in policy, Maduro’s efforts have been a band-aid on cancer. In Venezuela, life has been a matter of daily survival; starvation has become the norm. The government keeps printing worthless currency, but no one can afford to buy anything. Shops are closing every day. With their expensive iPhones in hand, this is what American millennials see a dream paradise. No one is asking what will happen once his or her dream turns into a nightmare.

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EU Proposes Widespread ‘De-Dollarization’ Initiatives

In the most blatant and transparent reaction to Washington’s continued vassal-ization, the European Commission has reportedly formulated a plan to reduce the role of the dollar in international trade.

Amid increasing tensions between Trump and various European leaders (cough Macron cough) and the ongoing threats of sanctions and tariffs, the European Commission plans to outline initiatives to develop the international role of the euro, according to a draft document obtained by Bloomberg.

As Viktoria Dendrinou reports, the plan has three dimensions including the European financial sector, the international financial sector and key strategic sectors such as energy…

Member states should promote wider use of the euro in relations with third countries in field of energy, including in contracts within the framework of bilateral and multilateral international agreements,”

“The Commission calls on member states to include in their intergovernmental agreements with third countries a model clause, developed by the Commission, related to the use of the euro as default currency

“Participants in European energy markets should use more energy-related contracts denominated in euro

“Price reporting agencies should facilitate the launching of euro-denominated price benchmarks for crude oil

“Commodity exchanges should facilitate the further development of euro-denominated derivative contracts on crude oil and refined products

With Russia actively de-dollarizing, along with Iran, and China slowing its Treasury purchases (while publicly proclaiming support) but promoting its petroyuan contracts, Europe’s shift away from the petrodollar could be more posturing or could be the end of the beginning of the end as the dollar’s reign as reserve currency ends slowly at first then all at once.

With allies like these, who needs enemies?

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Small Cap Stocks Give Up Trade-Truce Gains, Yield Curve Tumbles

“we’re gonna need a bigger trade truce…”

As we warned this morning the “he said, Xi said” uncertainty (h/t Cameron Crise) of a potential pause in trade tensions is simply not enough to overcome a tightening Fed and fading economic hope. 

The S&P stalled around the 2800 support level we suggested…

 

And Small Caps have given up their gains, leading the reversal…

 

And finally, the short-end of the yield curve has collapsed further with 2s5s back below 2bps…

And 10Y Yields have tumbled back to below 3.00%…

Crude is still higher but rolling over as gold extends its gains…

 

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Market Surges At Worst Possible Time For Hedge Funds

Two weeks ago, when looking at the latest hedge fund 13-F reports (for Q3) Goldman found two remarkable, if perhaps expected, things: following the summer rout in some beloved tech names such as Facebook, the 2 and 20  (more like 0.5% and 5% these days) industry had retrenched and hunkered down, and as a result, hedge fund net exposures had steadily declined throughout 2018, including during 2Q and 3Q while the broad equity market rallied. Net long exposure calculated based on 13-F filings and publicly-available short interest data registered 49% at the start of 4Q, a decline from 56% at the start of 2018. Data calculated by Goldman Sachs Prime Services showed a similar picture, with net leverage peaking in January 2018 and declining steadily since.

We also showed that while net exposures declined all year as a result of adding more shorts – most of which ended up blowing up at every bottom resulting in furious short squeezes that only detracted from overall performance – gross exposures remained elevated until the recent equity drawdown. In fact, according to Goldman data, gross exposures only declined sharply since the S&P 500 turned lower in early October.

Which of course was bad news for hedge funds last Wednesday, when the S&P exploded higher after Fed Chair Powell appeared to throw in the towel on the Fed’s hawkish stance, stating that the Fed Funds rate is “just below” the (range) of the neutral rate of interest. Powell’s soundbite sent markets soaring, however with shorts once again outperforming net longs, hedge funds were hammered as not only did they not capture any of the (shrunk) beta, but they were once again skewered by their hedges as everyone rushed to cover en masse.

The same collapse in net hedge fund exposure was even worse news for the smart money today.

As Nomura’s Charlie McElligott writes “ad nauseum”, the equities “gap higher” is the trade which hurts the buyside the most — and now after this latest can-kicking tri-party (Powell, Trump, Xi) “blink,” insult is further added to injury.

The reason is a familiar one: as the cross-asset strategist explains, “there simply is not enough “net (long) exposure” on for HFs to realize any of this Equities rally”, while mutual funds instead used last week’s rally to further “de-beta” portfolios (which is “the right thing to do” at this point in the cycle!), as Nomura’s measure of US Mutual Fund “Beta to SPX” shows an absolute nuking down to 17th %ile last week (from 57th %ile the week prior).

Meanwhile, Macro Funds took the other side of the trade, perhaps “sensing this risk last week” and increased their “Beta to SPX” to 31st %ile (from 8th %ile—was 61st %ile 1m ago) as well as their “Beta to Nikkei” to 58th %ile (from 32nd %ile, was 75th %ile 1m ago). And as McElligott previously discussed, systematic CTA funds “will be FORCED / PRICE-INSENSITIVE BUYERS due to this “gap” in SPX, RTY, NDX, SX5E, NKY, DAX, FTSE and nearing “buy levels” in CAC, HSI, HSCEI and AS51 (“long” buying in US Eq and NKY, “covers” in the others)—SPX today likely sees a notional buy of +$18.6B.Unless of course stocks were to close in the red…

Adding even more insult to injury – or rather today’s sharp market spike higher – Nomura observes that there was a “brutal” sector / factor de-disking rotation occurring as well, with ALL funds purging their “Beta” (Beta M/N -18.1% between the start Oct into the start of the last week Nov).

Stated simply, funds were getting “Defensive” and selling High Beta against buying Low Vol—thus we see Utes, Staples and REITS as the only positive S&P sectors QTD, against Materials -6.1% / Comm Services -6.7% / Industrials -7.8% / Cons Disc -9.0% / Tech -10.0% / Energy -13.3%.

So as a result of the ongoing performance struggles over the past two months, “and the psyche damage” many funds had “battened down the hatches” into year-end, with very few willing to “pay away” already negative performance despite the risks of an upside move into YE as vol in general was so expensive.

Thus completely failing to “capture” both Wednesday’s and today’s gap.

What is odd is that last week’s futures positioning update (through last Tuesday) showed the beginnings of a “dynamic hedging” spasm: Leveraged Funds added +$3.4B in SPX, NDX +$1.3B, +$700mm in RTY, while Asset Managers bot +$1.5B in SPX, +$600mm in EM Equities…and it goes without saying that those number REALLY jumped later in the week.

Indeed, in the hedge funds’ attempt to capture beta, equity ETFs saw +$11bn inflows on Wednesday, the largest 1-day inflow since June 12th outside of expiry/rebal week. Inflows to equity ETFs exceeded $20bn from Tuesday through Thursday across pseudo-futures, asset allocation, and sector products.

And yet despite all these positioning scrambles and attempts to capture beta upside, it is the shorts which continue to outperform the market…

not only resulting in another day of negative P&L, but further demoralizing a sector which no matter what, can’t seem to generate any alpha in 2018.

Ironically, the only thing that could save hedge fund performance today is if the market closed… in the red.

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Trump Demands Cohen Serve “Full Prison Sentence” For “Lying And Making Up Stories”

Clearly excited after his trade deal detente triumph, President Trump has been spraying out tweets at a breakneck pace Monday morning, veering from hints about the forthcoming US-China trade accord (China will reverse some of its auto tariffs, Trump says) to his hopes for ending the US-China-Russia arms race.

Cohen

But by mid-morning, Trump had circled back to domestic issues – specifically his ongoing feud with Special Counsel Robert Mueller and his former personal attorney Michael Cohen, who pleaded guilty last week to one count of lying to Congress. Reports last week suggested that Cohen is asking to be spared jail time in exchange for his testimony against the president, which supports Trump’s claim that Cohen is lying about the president to save himself, Trump tweeted to demand that his former attorney be made to serve “the full sentence.” Trump seethed that Cohen could avoid punishment for his many crimes unrelated to the Trump campaign by “making up stories to get a GREAT & ALREADY reduced deal for himself and his wife and father-in-law (who has the money?) off Scott Free.”

“He lied for this outcome and should, in my opinion, serve a full and complete sentence.”

In his sentencing memo, Cohen’s lawyers claim that Cohen and his family have already suffered enough due to Cohen’s decision to cooperate. The memo also revealed new details about what Cohen told Mueller, including that Cohen personally kept “Client 1” (believed to be Trump) apprised of his discussions with the Russians through at least June 2016 (Cohen had previously told Congress that discussions about a possible Trump Tower Moscow had unraveled in January.

Cohen is expected to be sentenced Dec. 12.

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Ukraine Urges NATO To Send Warships To Confront Russia

Authored by Jason Ditz via AntiWar.com,

Still bound and determined that the maritime incident last weekend in the Sea of Azov portends a full-scale war with Russia, Ukrainian President Petro Poroshenko called on all NATO nations and other allied states to start relocating warships en masse to the sea to “assist Ukraine” in a conflict.

“We cannot accept this aggressive policy of Russia. First it was Crimea, then eastern Ukraine, now he wants the Sea of Azov. Germany, too, has to ask itself: What will Putin do next if we do not stop him?”

Poroshenko singled out Germany as a nation that should rush warships to the area, saying that Germany needs to consider where Putin will strike next after taking over Ukraine. He added that he is positive Putin wants the whole country.

“Germany is one of our closest allies and we hope that states within Nato are now ready to relocate naval ships to the Sea of Azov in order to assist Ukraine and provide security,” he said.

As a practical matter, NATO nations are severely limited in the warships they could send to the area by the 1936 Montreux Convention, which severely limits the number of warships allowed to pass through the Bosporus Straits.

This means that even if Germany had a vast navy, which it doesn’t, they would not legally be able to deploy large numbers in the Black Sea or Sea of Azov, and certainly would need more than a couple of frigates to square off with the entire Russian Black Sea Fleet.

Western governments have backed the Ukrainian government.

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If You Like Reason’s Videos, Support Us with a Tax-Deductible Donation Today

In October 2007, we launched Reason TV, which publishes interviews, documentaries, parodies, and other online videos. Reason TV was the brainchild of TV legend and The Price Is Right host Drew Carey, who sits on the board of trustees of Reason Foundation, the nonprofit that publishes this website. Drew had taken an interest in documentary filmmaking and, in a world of ever-cheaper cameras and editing software and burgeoning online distribution, urged us to get into video years before most other publications considered “pivoting” in that direction. In all, we released over a dozen documentaries with Drew, including the award-winning, hour-long Reason Saves Cleveland: How to Fix the Mistake on the Lake and Other Once-Great American Cities.

Reason‘s videos are now watched over 2 million times a month at YouTube and even more often at Facebook. Part of Drew’s original vision was that documentaries in particular would allow us to dramatize our points more effectively and more immediately. To that end, I’d like to point your attention to a doc we released in October. Produced by Jim Epstein and boasting nearly 500,000 views, it looks at the negative impact that a $15 minimum wage is causing for workers in New York City’s car wash industry. This is exactly the sort of work that wins hearts and minds to a libertarian point of view. And this is exactly the kind of work that your tax-deductible donations fund.

We’ve only got a couple of more days left in our annual webathon, and we’re closing in our goal of raising $200,000 from visitors to Reason.com. Here’s what different gift levels get you:

$50 A Reason bumper sticker.

$100 That PLUS a Reason magazine subscription (includes print or digital; digital includes access to archives of 50 years of Reason magazine) and invitations to Reason events in your area.

$250 All of the above PLUS a newly designed Reason T-shirt.

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Please give today.

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Soaring Stocks Break Bears’ Hearts But Bonds Ain’t Buying It

It has certainly been a good day for index funds. Probably not so much for everyone else…is the message from former fund manager and FX trader Richard Breslow, as investors’ anxiety ahead of the weekend (in some assets) is breaking bears’ hearts (for now).

Via Bloomberg,

Underweight investors watched one equity market after another open higher, and with sizable gaps that permitted no opportunity to trade. That can cause as much pain and anxiety as a market under pressure. At least when markets were getting hit, misery had its company. Take a look at the screens and all you see is good tidings. Portfolio managers trying to keep pace with their benchmarks are once again left contemplating whether to chase things higher or pray for the dip they didn’t buy last week.

Of course it wasn’t just stock traders whose prudence ahead of the G-20 didn’t pay off. CFTC data from last week showed that traders were busy adding to dollar longs and cutting Treasury shorts. In fact in the five-year sector, speculators slashed positions to be the least short in a year.

A lot of commentaries this morning say that risk appetite has returned to the markets. So you have to wonder why so many people aren’t feeling exactly chuffed.

Moreover, as Bloomberg’s Cameron Crise quipped, the “he said, Xi said” comparison of statements offers little suggestion that there was much concrete agreement.

At this point, it’s hard to tell whether traders just want this year to be over or are hoping for more time. My guess is it is the former. Which is going to make this a very long few weeks, to be sure. Anyone who does decide they must chase the market, however, should be very selective in choosing what instruments to do it in.

Equities look pretty good. They are, however, getting into the vicinity of fairly meaningful resistance.

But still have room to run, if they want to. Not a simple choice from here, and they are unlikely to make things easy. I’d go back to watching the Russell 2000 for the simplest picture. Their futures, on the day, show the most potential compared to the other U.S. indexes for two-way risk from here. How they end the cash session will matter.

Bond yields are higher, but trade like they are damaged goods. I wouldn’t make too much out of the break of 3% on the 10-year Treasury. The lack of follow-through is telling.

Especially with thirty-year yields having stayed above their break-down yield. On the other hand they need to get up and out of here. They may need to wait until non-farm payrolls. Or, perhaps, they looked at the slate of Fed speakers and are being cautious.

The most interesting trades overnight were in Europe. Italian 10-year BTPs are at a pivot chart point at 3.15%. Given the positive news overnight, I would have expected them to have blown through this level. Of, perhaps greater significance was the liquidation of Euribor option positions which were designed to take advantage of ECB tightening in 2019. Something to consider if you plan on loving the euro.

The dollar is meant to be lower, but, actually, looks pretty good. Or at least, certainly doesn’t look bad. The index’s lows from the last four trading sessions look like a meaningful floor to watch. I wonder if analysts have been too quick in declaring its demise. I’m impressed that it is trying to get back above 97.

There is one unambiguous move taking place and that is in Asia.

Those markets look very strong. It may be the most popular theme you will see for the rest of the year. It certainly seems to have a lot of backers rooting it on

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US Manufacturing Economy Rebounds As Prices Paid Plummet

Once again – Manufacturing survey data is completely contradictory…

Following China’s ugly PMI data, US Manufacturing PMI modestly missed expectations in November, sliding to 3-month lows as output growth slowed notably.

Markit also notes that Business confidence dipped to the weakest since September 2017. Although optimism stemmed from stronger demand, some raised concerns surrounding the sustainability of the current sequence of new order growth.

BUT…

ISM Manufacturing beat expectations rising to 59.3, well above expectations of 57.5, rebounding off last month’s 5-month lows.

So take your pick…

Under the hood in the ISM data, prices paid plunged to its lowest since June 2017

Which suggests The Fed’s inflation fears are set to disappear…

But, while PMI dipped, Chris Williamson, Chief Business Economist at IHS Markit was upbeat:

“Despite the headline PMI slipping to a three-month low, November saw manufacturers enjoy another encouragingly solid month of improving business conditions.

“Dig deeper behind the headline number and the picture brightens further. New orders rose at the fastest rate for six months, prompting manufacturers to continue to expand capacity to meet demand. The pace of job creation remained among the highest seen over the past decade.

“The survey acts as a reliable guide to the official manufacturing data, and suggests that factory output is growing at an annualised rate of around 1.5% so far in the fourth quarter, providing a material but by no means impressive contribution to GDP. As such, the data corroborate the flash PMI’s signal that the economy will likely see growth slow to a 2.5% rate in the fourth quarter.

“In a further sign that growth has peaked, business optimism about the year ahead waned to the lowest for over a year, albeit with the proportion of companies expecting output to be higher in a year’s time outnumbering those expecting a decline by 36% to 3%.”

However, what Williamson seems to prefer not to mention is the slowdown in output growth to its joint-weakest since 2017…

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