Did the Couple Killed by Houston Narcs Know Who the Armed Intruders Were?

The trail leading to the bungled drug raid that killed a middle-aged couple at their home in Houston on Monday began with a January 8 phone call from an anonymous woman who claimed to be standing outside the house and looking through a window. The woman told police “her daughter was in the house, and there were guns and heroin,” Houston Police Chief Art Acevedo said at a press conference yesterday.

Two patrol officers dispatched to the house could not find the caller, but they reported that they heard another woman who was walking down the street say “the police are at the dope house” while talking on a cellphone. The officers called the woman who made the complaint. “She stated she did not want to give any information because they were drug dealers and they would kill her,” Acevedo said. “She wanted the officers to go into the house and get her daughter.”

The officers explained that they had no authority to do that, but they shared the information with the Houston Police Department’s Narcotics Division, which began an investigation on January 11. The investgation included a “controlled buy” by a confidential informant who reported seeing a 9mm semi-automatic pistol and “a large quantity of plastic baggies” containing black-tar heroin at the house on Sunday.

Police found neither of those things when they searched the house the next day after breaking down the door and setting off a shootout in which Dennis Tuttle and Rhogena Nicholas were killed and five officers were injured. Acevedo said there was no heroin, just “small amounts” of cocaine and marijuana. And contrary to the anonymous complainant’s description of Tuttle and Nicholas as scary, bloodthirsty drug dealers, neither had any criminal record to speak of, and both were described by neighbors as “wonderful people” who “never bothered anybody.” Police did not know any of that before the raid, despite an investigation that supposedly spanned two weeks. They did not even know the suspects’ names before they charged into the house, where Tuttle and Nicholas had lived for more than two decades.

Acevedo had no explanation for why police did not find the drug that was the justification for the search, even though the house supposedly was under surveillance by narcotics officers between the controlled buy and the raid. As for the disappearing pistol, Acevedo implausibly speculated that the C.I. might not have been familiar enough with firearms to know the difference between a 9mm semi-automatic and a .357 Magnum revolver, the only handgun police found.

Despite his repeated promises of “transparency” and “accountability,” Acevedo was also hazy on the crucial point of whether Tuttle knew that the armed men breaking into his house, whose first action after entering was to kill his dog with a shotgun, were police officers. Narcotics officers executing search warrants “don’t show up in uniform,” Acevedo said, “but they do show up with plenty of gear that identifies them as police officers, including patrol officers that are out in front of the house.”

Patrol officers outside the house do not give people inside the house notice that the men breaching their door and killing their dog are cops, and it’s not clear what other “gear” Acevedo had in mind. But since the plainclothes officers who burst into the house did so without warning, “announcing” themselves at the same moment they were breaking down the door, it would not be surprising if Tuttle missed that announcement and any other clues to their identity.

Body camera video of the raid might have helped clarify this issue, but there is none. “Body-worn cameras are still a pretty new technology,” Acevedo said. “Over the last two or three years, we’ve been deploying them. Our priority was to get body-worn cameras into the hands of the people that are most prone and most likely to be involved in a use-of-force or a response-to-resistance incident or a complaint….The majority of the incidents involve patrol, so that’s been our priority.”

Acevedo suggested that if the department does eventually find the money to equip narcotics officers with body cameras, “the likelihood that we won’t land on ‘we’re going to have body-worn cameras’ is pretty slim for search warrants…because most of the times we’re going to be doing the right things and we want to capture that.” That sentence is a bit hard to parse, but the gist is that Acevedo thinks recording police when they serve drug warrants in people’s homes makes sense as a way of showing they did everything properly—or not, as the case may be. It’s just that the Houston Police Department has not gotten around to it yet.

Without a video record, we can only go by the official police account of what happened inside the house. But even based on that account, it is plausible that Tuttle reasonably thought he was acting in self-defense when he shot the man who had just broken into his house and killed his dog. Likewise when police fatally shot his wife as she was trying to disarm the wounded gunman, at which point Tuttle returned fire with his revolver. Whatever announcement the officers made as they were entering could easily have been lost amid the noise, confusion, and shotgun blasts.

“Officers, when they execute search warrants,…are making split-second decisions in many cases,” Acevedo said, “and then we spend weeks, if not months, if not years, scrutinizing every piece of that.” What about the split-second decisions that a homeowner has to make when people break into his house, kill his dog, and shoot his wife? Tuttle, unlike the officers who killed him, was not a trained police professional. Perhaps he deserves the benefit of the doubt, especially since he is not around to defend himself.

On Monday night, when a reporter asked if any of the officers had been hit by “friendly fire,” Acevedo was indignant. “We don’t suspect anybody of being struck by friendly fire,” he said. “I don’t expect [it], because our people are really well-trained, even though in these very dynamic situations that certainly can happen. But if an officer was shot by friendly fire, the only people responsible under the law and morally are the people inside that residence who decided to take shots at police officers executing a lawful search warrant.” That analysis, of course, assumes that Tuttle knew the men confronting him were “police officers executing a lawful search warrant,” and it’s not at all clear he did.

To his credit, Acevedo rebuked Joe Gamaldi, president of the Houston Police Officers Union, for his “over-the-top” remarks on Monday night, when he nonsensically blamed “the ones that are out there spreading the rhetoric that police officers are the enemy” for the injuries suffered by his fellow officers. “Joe Gamaldi’s emotions got the best of him,” Acevedo said. “I came this close to yanking him off there because it took us all by surprise. It was over the top….This [incident] had nothing to do with any of the stuff that he was talking about.”

The Houston Police Department and the Harris County District Attorney’s Office are continuing to investigate the drug raid, and they will ultimately decide whether the officers acted legally and properly. Acevedo said he had promised Tuttle’s brother “to seek the truth…regardless of what that truth is.” One truth already seems clear: This violence was pointless and readily avoidable.

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Powell-Pivot Sends Gold To 8-Month Highs, Dow Up Sixth Straight Week

What made The Fed stomp on the brakes and slam the monetary trajectory into reverse so fast? Probably nothing!!

 

China’s stock markets were levitated late Thursday, early Friday (after The Fed) back into the green for Shanghai Composite (tech heavy indices underperformed)…

 

A Mixed week too in Europe with UK’s FTSE outperforming and Spain and Italy underperforming…

 

No “mix” for US stocks – they are all green. Trannies were best on the week with the rest of the majors holding around the same gains (Dow up 6 straight weeks)

 

S&P, Dow, and Small Caps all lifted into the close to end green but Nasdaq ended red (Thanks to AMZN)

 

Futures show today a little better – the surge on payrolls and again on ISM then fade from the European close…

 

The major US equity indices all stalled at the 100DMA…

 

Energy, Financials, and Tech continue to lead the market this year, though financials underperformed on the week…

 

AMZN spoiled the party this week (down for 2 straight weeks, back into bear market)…and is unchanged since Jan 7th…

 

VIX tumbled to a 16 handle and credit spreads crashed in the week…

 

As the Fed’s implied easing plunged…

 

Treasury yields tumbled on the week after The Fed but rose today after good payrolls/ISM data…

 

This was the biggest yield drop for 2Y since 2018… sending the curve notably steeper… (though hitting resistance once again)

 

And the market shifted more hawkish on the day after the “good” data…

 

The Dollar plummeted after The Fed flip-flop and only rebounded around half of the loss after good data today…

 

Yuan was practically unchanged on the week after a big roller-coaster run higher then lower…

 

Litecoin managed to rally on the week but the rest of the major cryptos continued their slide…

 

Commodities are higher across the board this week, led by WTI…

 

Gold had a second good week in a row – closing at the highest since May 2018…

 

And against the Yuan, surged back to early Jan highs…

 

WTI rose to its highest since November, back above $55…

 

And the coldest week on record prompted a big sell-off in NatGas…

 

As The Nattie/WTI ratio continues to re-normalize…

 

Finally, we note that while macro surprises have exploded today (thanks to payrolls), earnings expectations continue to tumble (to six month lows)…

Let’s just hope its not 2018 deja vu all over again…

And remember what is driving all this exuberance in stocks…

via ZeroHedge News http://bit.ly/2Gnh4gr Tyler Durden

Remember ‘T-Bone,’ Cory Booker’s Imaginary Drug Dealer Friend?

Sen. Cory Booker’s (D–N.J.) announcement today that he’ll seek the 2020 Democratic nomination for president prompted various political analysts to publish pieces pondering what his chances are. As Reason‘s Elizabeth Nolan Brown noted this morning, Booker’s strengths include his strong support for criminal justice reform. Plus, he’s already called for weed legalization nationwide.

But Booker’s chances will no doubt be hurt by his penchant for grandstanding and embellishing the truth for rhetorical purposes. Take, for instance, his many references to “T-Bone,” a drug dealer who Booker claimed to have been friends with. Various critics have questioned whether T-Bone is actually a real person, and Booker has never really provided a definitive response.

Booker was talking about T-Bone at least as far back as 2000, when he gave an interview to Stanford Magazine. (Booker is a Stanford graduate.) “I still remember my first month on the street,” Booker said, referring to the time in 1995 when he moved to a dangerous neighborhood in Newark. “I walked up to this charismatic black guy my age called T-Bone, who was one of the drug lords. I just said, ‘Yo, man, wha’s up?’ And he leaped in front of me, looked me right in the eye and said, ‘Who the blank do you think you are? If you ever so much as look at me again, I’m going to put a cap in your ass.'”

T-Bone then became a regular in Booker’s anecdotes. “I said hello to this guy and I’ll never forget he leaped off the steps where he was standing and looked at me and threatened my life,” Booker said during a speech at The New School in New York in 2007, not long after he was elected mayor of Newark, according to the New Jersey Star-Ledger. “I later got to know this guy and his name was T-Bone and I’m a vegetarian so that was a particularly vicious threat.”

You get the point. In fact, Booker has admitted to talking about T-Bone a “million” times, the Star-Ledger reported in 2013. Booker told The New School in 2007 that his friendship with T-Bone eventually ended after the drug dealer said there were warrants out for his arrest. “That rift between me and T-Bone was inches, we sat there, but I felt so alienated that there was a gulf as wide as the Grand Canyon between us, and I could not reach out to save this young man, and we drove back to Brick Towers, and I’ve never seen him again since that day,” Booker said, according to National Review.

The validity of Booker’s T-Bone story was questioned in 2013, when he ran for Senate. That’s because no one had ever heard of a drug dealer in Newark who went by that name. In August of that year, National Review spoke to Clement Price, a history professor and friend of Booker who claimed the then-Senate candidate admitted to him in 2008 that T-Bone was not real. Rather, he was a “composite” of various people Booker knew in Newark. “Cory realized that he had erred,” Price added to the Star-Ledger. “He told me that my criticism of his invention of T-Bone made perfect sense to him and he had made a mistake.”

In public, Booker has admitted T-Bone was not completely real. Sort of. Per a 2008 interview with Esquire:

T-Bone’s actual earthly existence has been fodder for public debate, leading Booker to admit that although T-Bone’s corporeal being is “1,000 percent real,” he’s an “archetype” of an aspect of Newark’s woe whose actual nom de crack may not actually be T-Bone.

That’s not a clear answer, of course. Reason reached out to Booker’s Senate office for clarification on the matter, but did not receive a response in time for publication. (We will update this post if we do.)

So why does T-Bone matter all these years later? Because embellishing stories and creating composites is penalized in politics. Pres. Obama used a composite in Dreams of My Father, and the media obsessed over it. Even if it’s a more effective way to humanize a problem (as in Booker’s case) or to protect the identity of someone (in Obama’s case), it rings of untruthfulness. In many of Booker’s stories, T-Bone is a foil. He’s more useful to Booker’s self-mythologizing than Booker ever was to him (or them, as it may be).

The story is also a reminder that Booker loves to be the center of attention. Why else tell people that a person he ostensibly felt sorry for had threatened to kill him?

As previously noted, Booker has been an excellent advocate for criminal justice reform. He pushed for passage of the FIRST STEP Act, wants to legalize pot, and has spoken out against the war on drugs and mass incarceration. He’s also shown a willingness to cross partisan lines, partnering with Sen. Rand Paul (R–Ky.) in 2014 to reform the way the justice system deals with juveniles and low-level offenders.

But his desperate need to be the center of every event and the hero of every story might cause him problems. See, for example, his dramatic performance at last year’s Supreme Court confirmation hearing for Brett Kavanaugh. Likening himself to “Spartacus,” Booker said he was risking Senate expulsion by releasing confidential emails sent by Kavanaugh during his time as a lawyer in the George W. Bush administration. It turned out the emails were not confidential. In fact, they’d been already been released. Booker, though, still made headlines.

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World’s Largest Asset Manager Compares Market To A Horror Movie, Warns Complacency Is Back

When the portfolio manager for the world’s largest asset manager warns that, following a torrid market surge which saw virtually every major asset in January post positive returns, something which Deutsche Bank said had never before been seen, the market resembles a horror movie, it’s probably a good idea to listen. Because that’s just what BlackRock’s Russ Koesterich has done in his latest blog post, asking “Have investors shifted market sentiment too quickly”, and giving three specific reasons why that is indeed the case.

Here is Koesterich’s take on why markets have gone from despair to euphoria in the blink of an eye, and why this signals that complacency is once again back.

* * *

Have investors shifted market sentiment too quickly?

As every fan of horror movies knows, the best way to elicit screams is to lull the audience into a false sense of security. It’s when everyone has relaxed, thinking the worst has past that the real fright occurs.

Since bottoming in late December, global equity markets have rallied more than 10% in dollar terms and market volatility has been cut in half. This raises the question: Have investors gone from panic to complacency too quickly? A few observations:

1. The economic data has not stabilized.

If part of what induced the unprecedented December selloff was the fear of an economic slowdown, it’s not clear why everyone has become more optimistic. While the global economy is not falling off a cliff, forward looking measures of growth continue to soften. China has been aggressively stimulating its economy, but the expected benefits have yet to materialize. At the same time, European data continues to disappoint, and even the U.S. is showing signs of weakness, particularly in housing. BlackRock’s proprietary measure of global growth still suggests further deceleration over the next six months (see Chart 1).

2. Volatility no longer looks too high relative to financial conditions.

As always happens in the midst of panic, implied volatility (measured by the VIX Index) spiked in December. At the peak, the VIX rose above 35, the highest level since February. Although volatility looked artificially high in December, it looks a bit too low today. Looking at the VIX relative to two measures of financial market conditions–high yield credit spreads and the St. Louis Fed Financial Stress Index–as well as forward looking economic indicators–the Chicago Fed National Activity Index–suggests that at 17 volatility appears about 10% too cheap. For volatility to remain low, financial conditions would arguably need to ease or forward looking measures of the economy improve.

3. It’s not obvious that political risk has dissipated.

Beyond vexing over a slowdown and a less dovish Federal Reserve, investors spent the holidays fretting over a host of geopolitical issues. No more. BlackRock’s geopolitical dashboard suggests that geopolitical worries have become less pronounced in recent weeks. In particular, investors appear much more sanguine on China and trade, despite the lack of a clear resolution.

To be sure, there is a counter argument to all the above: Risky assets have already discounted slower growth and less accommodative financial conditions. That was true in December, but it is less obvious today.

Markets have already retraced the December swoon. For example, high yield spreads–the difference in yield between high yield bonds and similar maturity Treasuries–increased by over 100 basis points (bps, or 1 percentage point) in December, indicating extreme risk aversion. However, since the start of the year spreads have subsequently reversed most of that move and are now back to levels last seen in early December.

It appears that investors are now convinced the fright has passed. That is normally the time to grip the arm rest a bit tighter.

via ZeroHedge News http://bit.ly/2BfI1zb Tyler Durden

Crypto Exchange Seeks Bankruptcy Protection After Founder’s Mysterious Death

More than ten years after the birth of bitcoin, the crypto industry remains riddle will con artists, scammers and fraud. And sometimes, businesses that for years appeared to be legitimate enterprises will suddenly be outed as long-running frauds – a la Bernie Madoff – when they hit a speed bump.

Quad

For Canadian crypto exchange QuadrigaCX, that moment of truth apparently arrived earlier this month when its CEO Gerry Cotten died suddenly from complications related to Crohn’s disease . According to a statement from the company, he died while traveling in India where “he was opening an orphanage to provide a home and safe refuge for children in need.”

Since his death, 115,000 customers of the exchange have been struggling with Mt. Gox-style “liquidity issues” as those trying to withdraw their funds have suddenly found it extremely difficult – if not impossible – to do so successfully. Finally, on Thursday, Quadriga’s board released a statement announcing that it would be filing for bankruptcy protection. In the statement, the company said the filing was prompted by an inability “to locate and secure our very significant cryptocurrency reserves held in cold wallets.”

An application for creditor protection in accordance with the Companies’ Creditors Arrangement Act (CCAA) was filed today in the Nova Scotia Supreme Court to allow us the opportunity to address the significant financial issues that have affected our ability to serve our customers. The Court is being asked at a preliminary hearing on Tuesday February 5 to appoint a monitor, Ernst & Young Inc., as an independent third party to oversee these proceedings.

For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us. Unfortunately, these efforts have not been successful. Further updates will be issued after the hearing.

The implication is, of course, that Cotten, a sickly young man with a chronic illness, was the only person who had the key to the exchange’s cold storage, and that he took this information to his grave.

This would be easy to overlook if the sum was relatively insignificant. But according to an article in CoinDesk, QuadrigaCX owes its clients a total of $190 million.

The exchange holds roughly 26,500 bitcoin ($92.3 million USD), 11,000 bitcoin cash ($1.3 million), 11,000 bitcoin cash SV ($707,000), 35,000 bitcoin gold ($352,000), nearly 200,000 litecoin ($6.5 million) and about 430,000 ether ($46 million), totaling $147 million, according to the affidavit.

It’s unclear what percentage of these holdings was kept in ‘hot’ wallets as opposed to the cold storage wallets. But adding another layer of intrigue, Cotten’s widow reportedly told a Canadian judge that her deceased husband held “sole responsibility for handling the funds and coins,:” and that the remaining team members have had “no luck” accessing the exchange’s coins.

And as users on Reddit swiftly pointed out, something about QuadrigaCX’s story doesn’t add up, leading some to ponder whether the whole business was one big scam.

On Quad’s website they write they can’t locate or access their cold wallets. The unstated suggestion is that the private keys were lost when the CEO died.

But that CEO wasn’t hit by a car. Allegedly he died from “complications related to Chrons Disease”. So while he was on his deathbed for all that time, he didn’t once think to tell someone the private keys? Highly unlikely.’

I’d also love to know the name of the “orphanage” he was supposedly building in India, and/or the name of even one independent witness who saw him building it.

QuadrigaCX made headlines last year when it challenged CIBC for refusing to process transactions involving Quadriga. However, during that time, stories like this one suggested that the fault lay with Quadriga, which appeared to be deliberately delaying – or outright refusing to process – customers’ transactions, leading money to seemingly “vanish into thin air.”

Given this checkered history, we certainly could empathize with those harboring a more conspiratorial viewpoint might seriously consider whether Cotten may have absconded with his clients’ money before faking his own death in a foreign land.

via ZeroHedge News http://bit.ly/2WCwKlh Tyler Durden

Trump’s First National Drug Control Strategy Reads Like a High School Book Report Written 30 Minutes Before Class

Since the Anti-Drug Abuse Act was passed in 1988, every presidential administration has been required by law to publish a document each year outlining its plans for addressing illicit drug use.

After spending the first two years of Donald Trump’s presidency in limbo, the Office of National Drug Control Policy (ONDCP) has released its first congressionally mandated report since the Obama era.

Not counting the cover page, the table of contents, or the opening letter from Drug Czar James W. Carroll, the 2019 National Drug Control Strategy is 20 pages long. For comparison’s sake, the 1992 National Drug Control Strategy ran 182 pages, not counting the introduction or index. (And no, the 2019 report does not contain an index.) The 2016 National Drug Control Strategy was 87 pages.

The 2019 National Drug Control Strategy is like a book report from a student who may or may not have read the book, and who may or may not have wrote his report on the bus ride to school.

That said, it does contain some food for thought.

What’s new for 2019? Broadly speaking, not much.

As was the case under Barack Obama, Trump’s 2019 report focuses on reducing demand by informing the public about the dangers of illicit drug use, micromanaging prescribers in order to reduce opioid availability, increasing the availability of drug treatment options, and cracking down on the illicit drug trade. And by “focuses,” I mean the report mentions these things.

What’s specifically different from years prior? Marijuana and kingpins.

Previous National Drug Control Strategies generally contained lengthy sections on marijuana. But in keeping with the recent trend toward state-level legalization, Trump’s 2019 report focuses only on reducing underage cannabis consumption (via grants to state and local organizations), interdiction of marijuana trafficked from overseas and Latin America, and cracking down on marijuana cultivation on public lands.

In total, the word “marijuana” appears only four times in the 2019 strategy, while the word “opioid” appears 53 times. There is no suggestion in this report that the Trump administration plans to undermine state-level legalization efforts. This is a good thing!

Watchers of the drug war in Latin America may also be surprised to learn that the report contains some subtle criticism of what’s called the “kingpin strategy,” which, for two decades now, has seen U.S. and Latin American law enforcement agencies focused on identifying and arresting the leaders of drug trafficking organizations (DTOs). Critics of this approach have shown for years that taking out cartel leaders causes DTOs to fracture, factionalize, and fight for territory and control, which leads to more violence and political destabilization and corruption. The 2019 Drug Control Strategy is the first report I’ve seen that sorta-kinda acknowledges this consequence:

Our conventional focus on targeting high-level individuals within the hierarchy of well-organized and sophisticated DTOs must evolve toward identifying and targeting vulnerable critical components of more fluid and dynamic organizations such as financial facilitators, corrupt officials, and key transporters, to affect a significant disruption of DTO activities, targeting key nodes to attack the entire network through its enablers.

Degrading and defeating criminal networks that have become more resilient because they are decentralized, redundant in capabilities and capacities, and compartmentalized, requires identifying the key nodes enabling DTO operations and simultaneously targeting them for maximum effectiveness over time. Agile interagency and international coordination will allow for better detection of changes in the trafficking supply chain, which will support intelligence-driven operations against identified vulnerabilities, from drug production to delivery to the end user.

Unfortunately, the 2019 report does not tell us what the administration thinks the U.S. should be doing instead. We know the Drug Enforcement Administration continues to operate in Latin America, but it is not clear from this report that the ONDCP or the White House is overseeing or coordinating those activities.

What are the goals of the 2019 Drug Control Strategy?

In short: “Do everything we’ve always done, only better!”

Here are the actual “measures of effectiveness”:

  • The number of Americans dying from a drug overdose is significantly reduced within five years
  • Nationwide opioid prescription fills are reduced by one-third within three years, and within five years all healthcare providers have adopted best practices for opioid prescribing
  • Evidence-based addiction treatment, particularly Medication-Assisted Treatment for opioid addiction, is more accessible Nationwide for those who need it
  • The production of plant-based and synthetic drugs outside the United States has been significantly reduced, illicit drugs are less available in the United States as reflected in increased price and decreased purity, and drug seizures at all U.S. ports of entry increase each year over five years

The phrases “significantly reduced” and “more accessible” are pretty sly! We should expect the administration to take credit for any decrease in overdose deaths, even if there’s no way to prove a causal effect. This is the prerogative of every president, of course.

The continued emphasis on controlling prescriber behavior remains troubling. (See Jacob Sullum on the disastrous consequences of punishing doctors for helping people.)

I should add that striving for “increased price and decreased purity” is essentially how we arrived at the fentanyl crisis. Federal regulations made prescription pills harder to come by, so consumers turned to street drugs, which are notoriously impure. Countries that have seen street drug shortages, meanwhile, saw consumers turn to other street drugs or to even more impure formulations of the newly scarce drug. The report is at least right that reducing supply drives up costs and decreases purity, but this is not a good thing.

With the exception of a relaxed attitude toward domestic marijuana production, the federal drug war appears to be the same as it ever was.

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Fewer U.S. Cold Waves

PolarVortexNOAAPeople who remain skeptical about global warming have been citing as contrary evidence the brutally cold polar vortex now assaulting the midwestern and northeastern U.S. So here’s a baseline for discussion: The planet is getting warmer, and the United States is experiencing fewer, not more, cold waves.

First, the cold waves. The 2017 Fourth National Climate Assessment notes that the annual average temperature in the contiguous United States increased by 1.8°F (1.0°C) from 1901 to 2016. Therefore it not surprising that heat waves have become more frequent in this country since the 1960s, while extreme cold temperatures and cold waves are less frequent. The assessment notes that “the number of record daily high temperatures has been about double the number of record daily low temperatures in the 2000s, and much of the United States has experienced decreases of 5%–20% per decade in cold wave frequency.”

Now let’s briefly consider the trend in global average temperature. Satellite measurements of the lower troposphere (that is, the atmosphere from the surface to about 5 miles up) According to researchers at both the University of Alabama in Huntsville (UAH) and Remote Sensing Systems (RSS), 2018 was the sixth warmest year since 1979. Surface temperature analysts at Berkeley Earth and the European Union’s Copernicus Climate Change Service say that 2018 is the fourth warmest year since 1850. The Copernicus researchers report that “the average temperature of the last 5 years was 1.1°C higher than the pre-industrial average.” U.S. climate researchers have not yet reported their calculations for 2018, due to delays occasioned by the federal government shutdown.

The UAH researchers calculate that the planet has been warming at an average rate of +0.13 °C (0.23 °F) per decade. RSS reports a faster increase—an average rate of about +0.18 degrees C (0.32 degrees F) per decade. Berkeley Earth reports that since 1980, average surface temperatures have been increasing at a rate of +0.19 °C (+0.34 °F) per decade. NASA’s Earth Observatory reports that since 1975, the surface has been warming at a rate of roughly +0.15-0.20 °C (0.27-0.36 °F) per decade. Cold though it may be in Chicago, it has been getting warmer overall.

Given that we’re talking about a polar vortex, the trends in the Arctic seem relevant. Researchers find that temperatures in that region are rising considerably faster than the global average. Berkeley Earth reports that 2017 was the second warmest year in the Arctic since 1900 and that the region’s average temperatures had increased in the past 40 years by about +3.0 °C (5.4 °F). It also calculates that the average increase for the planet over the same period was just shy of +1.0 °C (1.8 °F). Basically, the Arctic is warming three times faster than the whole planet.

So does Arctic warming have anything to do with cold weather in mid-latitude areas like the Midwest? Many climate researchers are intrigued by this question. The Rutgers climatologist Jennifer Francis and her colleagues published a study in Geophysical Research Letters last September that hypothesized that rapid Arctic warming favors an “increased persistence of regional weather patterns in the Northern Hemisphere. Persistent conditions can lead to drought, heat waves, prolonged cold spells, and storminess.”

The rough idea is the jet stream—a westerly blowing river of air, high in the atmosphere, that generally confines Arctic air masses to the far north—becomes wavier and more unstable as the polar region warms and the extent of sea ice declines. The deeper jet stream waves periodically stall, allowing the frigid air to flow southward and freeze folks in the Midwest. The same process is also thought to be responsible for long-duration cooling events during winters in Siberia.

In a statement reporting the study results, Francis observed, “While we cannot say for sure that Arctic warming is the cause, we found that large-scale patterns with Arctic warming are becoming more frequent, and the frequency of long-duration weather conditions increases most for those patterns.” Long-duration weather events like the current polar vortex.

On the other hand, there’s an analysis of especially cold U.S. winter months during the past half-century, published last June by researchers associated with the Pacific Marine Environmental Laboratory. It also finds links between reduced sea ice the warming Arctic and recent cold snaps in the U.S., but it also points out that similar events have frequently occurred without that association. The researchers conclude that it will be difficult to untangle the effects of natural variations from those associated with increased warming.

In a nice summary of current research on how a warming Arctic may affect our weather, Francis observes, “Exactly how the northern meltdown will ‘play ball’ with other changes and natural fluctuations in the system presents many questions that will keep scientists busy for years to come, but it’s becoming ice-crystal-clear that change in the far north will increasingly affect us all.”

The bottom line: The U.S. is experiencing fewer cold waves, even as recent research suggests that a warming Arctic may bolster the cold waves that do occur by making it easier for frigid air to spill southward and hang around longer.

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Russian Doll Takes Groundhog Day to the Next Level: New at Reason

'Russian Doll'Hip, wisecracking and restlessly bored, Nadia slips out of the bathroom at her 36th birthday party for a booty call. Wham! She’s hit by a taxi and the vision in her lifeless eyes fades to black—and then pops back into focus at that same bathroom mirror. Wow. What was in that joint? Better head home for bed, this time alone. Wham! She gets knocked into a river and drowns, only to show up at the mirror again. What the hell? An even swifter exit that ends in a neck-breaking fall down the stairs. Wham! And… .

Well, you get it. We’re in a Groundhog Day-style time loop. Nadia is going to keep falling down sewers, getting smashed to pieces in car crashes, and freezing to death in homeless campsites until … well, until what? That’s not at all clear. “The universe is trying to fuck with me,” deduces Nadia. “And I refuse to engage.” Television critic Glenn Garvin takes a closer look.

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The Original Crypto Bull Thesis, Revisited & Reinvigorated

Authored by Omid Malekan via Medium.com,

A lot of people are questioning the reasons to own crypto assets these days, a natural thing to do given the ongoing bear market. But let us not forget the original Bitcoin investment thesis, which thanks to two simultaneous developments this week, is alive and well.

*  *  *

First, the Federal Reserve flinched on further rate cuts, and signaled a desire to slow down the unwind of its balance sheet. For those who think the Fed bases monetary policy on the actual economy, this came as a surprise, as the only major economic report since the last Fed meeting was the hottest jobs report in a decade. But for those who think the Fed mostly cares about financial markets, as was blatantly stated by one of the worlds biggest hedge fund managers, the change was expected. Stocks just recorded their first down year in a decade.

For years, those of us who have been publicly critical of the orthodoxy in central banking have asked a simple question: How much of a decline in the S&P 500 does it take for central bankers to admit that, for all their talk about unemployment and helping the middle class, they only care about juicing investments? The answer, we now know, is a little over four percent.

Across the pond, the European Central Bank gave us even more of a reason to be long crypto, by taking the implicit lie at the heart of the greatest monetary experiment in history and making it explicit. Which lie? The one that claims their alphabet soup of programs are designed to help the middle class.

Ever since the crisis, economists have told us that the best way to help ordinary people is not by giving them free money. It’s to give free money to the financial system, then hoping all those printed dollars, euros and yen somehow magically end up in the hands of people who need them — even though by virtue of being poor such people have the loosest ties to that system. My arch nemesis Ben Bernanke even wrote an essay spelling out how this is so. In short, if you are poor, unemployed and don’t even have a bank account, your government is helping you by subsidizing Wall Street.

But this week, the ECB took this deceit even further, by tweeting a video that explicitly claims giving free money to rich people helps reduce income inequality.

It’s a statement so ridiculous only an economist would be foolish enough to believe it. Their video cites a bulletin, which cites a paper, which is written in that unnecessarily obtuse language economists prefer because it prevents ordinary people from realizing how ridiculous they are. So allow me to translate:

Let’s say that we had 10 millionaires who have jobs, and 2 poor people who don’t. Let’s also say that the ECB prints a trillion euros, and gives each millionaire a hundred billion. To celebrate their government-given riches, the newly-minted billionaires decide to throw a party and hire the poor (at minimum wage) to serve champagne. According to the ECB, they have reduced inequality. How? By reducing the poor-people unemployment rate more than the rich-people unemployment rate. (The rich already had jobs, so their unemployment rate was zero and couldn’t decline.)

Scroll back up and look at the image that accompanies their tweet, and you’ll see that this is in fact what they mean. If you watch the video, they actually mention that their policies make markets rise, then ignore it. That this kafkaesque torturing of the data ignores the fact that those policies made the rich far richer, the ECB, Ben Bernanke and now perhaps even Jerome Powell would like you to believe, doesn’t matter.

Except that it does matter to the yellow vests marching in Paris, the Brits who voted for Brexit and the Americans who voted for Bernie or Trump and now support candidates like Elizabeth Warren. Different as they seem, all of these movements share the core belief that the system is rigged. Our governments just confirmed that it is.

So why crypto?

Because no matter how big a lie, how often it’s tweeted or how many Econ PhDs are naive enough to believe it, you can only push it for so long until something breaks.

The biggest benefits of radical monetary policy are now behind us, while the biggest costs lay ahead. In other words, there is no such thing as a free lunch, but there is a cheap Bitcoin.

via ZeroHedge News http://bit.ly/2D1Mndd Tyler Durden

“There Has Never Been A Month Like January When All Major Assets Delivered Positive Returns”

Late last year, Deutsche Bank published what may have been the iconic chart that captured the prevailing investing zeitgeist: it showed that 2018 was the worst year on record on terms of the percentage of global assets down on a dollar adjusted basis – with roughly 93% of all assets down for the year, worse even than the years of the Great Depression. Indeed, 2018 was the year when “nothing worked.”

But while December may have been the worst month since the Great Depression, Powell’s full dovish capitulation and loss of all credibility in January, resulted in a violent reversal for the S&P in January, which in turned was the best start to the year since 1987 (a year which is far better remember for another market event).

It also means that one can take the above chart and apply a mirror image to it to explain what has happened so far in 2019: as Deutsche Bank writes today, based on its usual sample of assets used for performance review, there has never been another month in which all 38 assets delivered a positive total return in local currency terms. In fact the next best was 36 assets
which happened in January 2012, September 2009, July 2009 and October 2007.

Amusingly, as Deutsche Bank strategist Craig Nicol writes, “as one would expect, it’s rare to have a month where risk assets and rates rally.” Actually, no: since this is what is known as the “QE trade”, when a dovish shock from the Fed leads to a surge in all assets coupled with a plunge in the dollar – precisely what we observed in January – it is not that rare to have a month like this in the new normal, when central bank intervention has been the primary source of equity upside in global markets. In fact, for an entire generation of traders, one could say that it is far more rare to see a month like December when the S&P dipped into a bear market for the first time in a decade… if only for a few seconds.

In any case, as Deutsche Bank adds, January “is the best broad-based month for performance in markets since we started collecting data nearly 12 years ago. For context, the average number of assets with a positive total return in any given month since the start of 2007 is 22.”

Deutsche Bank was not the only bank left scratching its head: following up to his note from Tuesday, SocGen’s Andrew Lapthorne writes that January is often a time for reversals and risk taking, and January 2019, helped by the Fed and coming off a very weak December, was no exception. But, as the SocGen strategist writes, and many others would agree with him, “the extent of the bounce back has taken many by surprise.”

As Lapthorne show in the chart below – which is effectively the mirror image of the Deutsche Bank chart – while December 2018 saw 90% of MSCI World stocks fall, January 2019 has seen 88% of stocks go up, a 20-year record, or as SocGen calls it “from indiscriminate selling to indiscriminate buying.”

“What does all this mean”, Lapthorne asks rhetorically, and answer: “Well, from a prediction point of view, very little. A lack of discrimination in stock movements or strong price reversals over one month does not imply anything for the following month.” But while Lapthorne is right that one can’t derive any conclusions from the violent market reversal last month, what one can say that it is symptomatic of a confused market, “with the kind of performance we saw in price reversals last month in the US (+7.1%) only ever seen during periods of macro turmoil.

Meanwhile, this being Lapthorne, the conclusion was hardly cheerful:

For all the exciting price action, the fact remains that US EPS estimates have slumped, with an 8% cut in 1Q19 S&P 500 EPS estimates over the last three months. There is almost no growth expected now in 1Q. Downgrades have been less harsh in Europe, with 2018 EPS estimate just 3% of their peak and 2019 4% off. However, Europe is less expert at pre-positioning estimates, so unlike the US which typically see an uplift in EPS during the reporting season, Europe has plenty of room for downgrades.

And visually:

 

via ZeroHedge News http://bit.ly/2Trk6ns Tyler Durden