Month: July 2019

Martyr For The Cause – Domestic Terrorism Via Antifa

Authored by Charles “Sam” Faddis via ANDMagazine.com,

Occupy ICE Vigil

“Call from Occupy ICE PDX for a vigil outside of the Portland ICE Detention Center on July 17th.

On July 17th, at 8:30pm OccupyICEpdx will be hosting an outdoor vigil beside Portland’s ICE Detention Center located at 4310 SW Macadam Ave.  Join us as we remember a fallen comrade Willem Van Spronsen, a person who gave their life in order to stop the seperation of North Western families. Let us also honor and mourn all migrants and assylum seekers killed by today’s harsh immigration policies.

Before we begin the much needed work of strengthening our communities resistence to ICE, let us honor the actions of Van Spronsen and mourn their loss. We must close Portland’s ICE Detention Center and North West Detention Center, then keep shutting them down until they are all abolished. As Maru Mora Villalpando from La Resistencia said “If this place wasn’t here (NWDC), that person would be alive today. People have died because of the detintion center and people keep dieing because of immigration enforcement.” We are the fire that Will melt ICE!

The vigil begins at 8:30pm with an Indigenous land acknowledgement, followed by the reading of William Van Spronsen’s manifesto. We will finish the event with a few chants that hopefully have us walking away from the vigil feeling joyfully revolutionary.”

It’s Going Down – “…publicize and promote revolutionary theory and action”

The above language, misspellings included, is taken verbatim from a website called “It’s Going Down,” which is in its own words: a “digital community center from anarchist, anti-fascist, autonomous anti-capitalist and anti-colonial movements” whose mission is to “publicize and promote revolutionary theory and action.” “It’s Going Down” is the website of the Antifa movement in this country.

To review – Van Spronsen is the individual who only days ago attacked a migrant detention facility in Tacoma, Washington where illegal immigrants are held. Van Spronsen was armed with a rifle and carrying incendiary devices. He set one vehicle on fire and was killed while attempting to detonate a large propane tank at the facility, which would have likely resulted in a catastrophic fire and the deaths of many of those inside.

Van Spronsen was a domestic terrorist.

Van Spronsen’s Manifesto

Before attacking the detention facility Van Spronsen, good terrorist that he was, wrote a manifesto and sent it to the press. It reads in part:

“I regret that I will miss the rest of the revolution.”

“I strongly encourage comrades and incoming comrades to arm themselves.”

“I am antifa.”

Van Spronsen’s manifesto was published in full on “It’s Going Down” along with a giant, adoring caricature of the man with the caption “Rest in Power.” The website’s commentary regarding Van Spronsen’s attack ended with this statement, “In those regards, what he did was heroic.”

This kind of hero worship – of madmen planning mass murder and involved in attacks on government facilities – is the kind of thing we have long associated with Islamic terrorists and their state sponsors. Hezbollah is famous for parading caskets carrying the bodies of their “martyrs” through the streets to whip up the crowd and stoke revolutionary fervor. The Palestinian Authority, to this day, is regularly criticized for paying compensation to the families of suicide bombers and glorifying them in the press.

Terrorism At Home

Yet, this is not happening in the streets of Beirut or on the West Bank. This is happening right here in the United States, and it is happening right now.

It is also going to get much, much worse before it gets any better. The commentary coming from far-left propaganda organs, and some members of Congress, is not calculated to calm the waters. We do not hear condemnation of the use of violence or calls for restraint. In fact, we hear nothing from those who have done the most to fan the flames and incite this kind of terrorism.

When asked directly by the press to comment on Van Spronsen’s attack, Congresswomen Alexandra Ocasio-Cortez, Ayanna Pressley and Ilhan Omar all pointedly declined to provide any statement. This despite the fact that much of what was written in Van Spronsen’s manifesto could have been lifted virtually verbatim from any number of speeches given by these women. This despite the regular use of inflammatory rhetoric such as this.

“I learned a long time ago that when change happens it’s either because people see the light, or they feel the fire. We’re lifting up these stories in the hopes that you will see the light. And if you don’t, we will bring the fire.”

– Rep. Ayanna Pressley.

Identity Politics and Division

The Democratic Party turned loose the forces now at work years ago in the interest of electoral advantage. It went all in on identity politics, division and rage. Rather than work to unite this country it saw it to its advantage to turn Americans against each other and to drive people to the ballot box -not based on hope or promise – but based on fear and rage.

We are paying the price now. Van Spronsen is dead. Out there in the darkness untold numbers of new Van Spronsens are writing their manifestos.

And “It’s Going Down” is standing by to publish them and celebrate the newest martyr for the cause.

via ZeroHedge News https://ift.tt/32x8G6l Tyler Durden

N.Y. Court Refuses to Enjoin Allegedly Libelous Speech About Chinese Official

From Huang v. Guo, 2019 WL 3206146 (N.Y. trial. ct.), handed down Tuesday by N.Y. Judge Shlomo S. Hagler:

Around May 11, 2017, defendant uploaded a YouTube video to his YouTube channel in which he alleged that plaintiff, is “a negative example of corrupt Chinese government officials.” … The video accuses plaintiff of avarice, promiscuity—in particular, of sexual relations with other government officials—cronyism, and graft. The 25-page transcript which plaintiff submitted has a number of underlined paragraphs highlighting the alleged defamation. The complaint alleges “[s]ome of Guo’s false and defamatory statements.” For example, defendant states:

“In [then-vice-mayor Liu Azhihua’s] bedroom, we found a secret. Mr. Liu likes taking naps at noontime…. Who regularly and most frequently appeared in Mr. Liu’s bedroom half an hour before his nap? This person is … Ms. Huang Yan, from the Beijing Municipal Planning and Land Resources Management Committee…. After that, Mr. Liu would usually have sexual behavior with Ms. Huang. This occurred basically every time she visited. Accurately, each instance lasted 17 to 19 minutes, with changes in position.”

Defendant also noted plaintiff’s expensive taste, her love of Hermes bags, scarves, and accessories, and her valuable calligraphy and painting collections). The video asserts that defendant possessed tapes of these encounters and that he submitted them to Director Ling Jihua (“Ling”) of the Central Commission for Discipline Inspection (“CCDI”), but that Ling told defendant to hand over all copies of the video to him and never mention their substance again. [Further factual details omitted. -EV]

The court concluded that plaintiff’s libel claim could go forward:

[M]any of the allegedly defamatory statements appear not to be expressions of opinion or speculations as to plaintiff’s future conduct. On the contrary, defendant went to great lengths to suggest that he was setting forth facts. With respect to plaintiff’s activities generally, for example, defendant asserted that [t]here is only one person who would know the truth, and that person is me, Wengui.” In addition, defendant asserted that he knew about plaintiff’s affair with Mr. Liu because he once possessed videotapes which proved that the two were having sex….

Plaintiff acknowledges that she is a high-ranking official in China. [The defendant accused her of misconduct when she was director of the Beijing Municipal Commission of Urban Planning, and now she’s Vice Minister of Housing and Urban-Rural Development. Thus, through her public office she has become a limited purpose public figure within the world of Chinese government. Plaintiff’s lack of fame in the United States is not critical here, where (1) defendant posted the videos on YouTube, thus making them available to people worldwide, and (2) defendant posted his videos in Chinese and focuses on the alleged corruption in Beijing among officials, thus directing the videos to Chinese-speaking people concerned with that country’s politics.

[T]he plaintiff alleges in the complaint that defendant “knew the statements made by him on above said video were false and misleading” and that defendant posted the video on his popular YouTube channel “maliciously for the sole purpose of impugning [plaintiff’s] reputation and standing and casting aspersions upon [her].” … Plaintiff repeatedly states in the complaint that, at the very least, defendant recklessly disregarded both the truth and the substantial probability that plaintiff would be harmed by his statements. This showing is sufficient to withstand the pre-answer motion to dismiss the complaint [under the standards applicable to libel lawsuits by public figures, including as to punitive damages].

But the court held that an injunction was unavailable:

“Prior restraints on speech are the most serious and the least tolerable infringement on First Amendment rights, and any imposition of prior restraint, whatever the form, bears a heavy presumption against its constitutional validity” (Brummer v Wey, 166 AD3d 475, 476 [1st Dept 2018] [internal quotation marks and citations omitted]). Even “highly offensive, repulsive and inflammatory” speech cannot be restrained unless it “communicate[s] a serious expression of an intent to commit an act of unlawful violence to a particular individual or group of individuals” (id. [internal quotation marks and citations omitted]). Applying this principle, courts have found that “[p]rior restraints are not permissible … merely to enjoin the publication of libel.” Plaintiff’s complaint does not assert facts sufficient to justify such relief.

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American Tech Giants Are Helping To Build China’s Surveillance State

Google and IBM are leading an effort via the non-profit “OpenPOWER Foundation” that is supporting China’s authoritarian government in conducting mass surveillance against its citizens, The Intercept has revealed.

IBM under OpenPOWER sparked “innovation” in China’s technology industry, has been leading a collaborative effort with China’s Semptian Big Data Solutions and US semiconductor Xilinx to “advance a breed of microprocessors that enable computers to analyze vast amounts of data more efficiently.”

An industry insider emailed documents to The Intercept alleging that Semptian uses American microprocessors to “enhance the capabilities of internet surveillance and censorship technology it provides to human rights-abusing security agencies in China” that monitors more than 200 million Chinese internet users on a daily basis.

After receiving tips from confidential sources about Semptian’s role in China’s mass surveillance program, a reporter used a bogus name and acted as a  potential customer. A Semptian sales representative sent documents confirming that the company, under the cover of iNext — has developed a mass surveillance system named Aegis, which can “store and analyze unlimited data” to allow “a full view to the virtual world”; reveal “the connections of everyone”; and provide “location information for everyone in the country.”

Confidential sources said Aegis is currently operating in China’s communication networks to control information and assist government agents to “collect people’s email records, phone calls, text messages, cellphone locations, and web browsing histories.”

While Semptian, Google, and Xilinx ignored requests from The Intercept for comment, OpenPOWER Foundation emailed a statement insisting it “does not become involved, or seek to be informed, about the individual business strategies, goals or activities of its members,” due to antitrust and competition laws.

An IBM spokesperson informed The Intercept that the company “has not worked with Semptian on joint technology development,” refused to reply when asked about IBM’s SuperVessel OpenPOWER cloud computing platform maintained by an IBM research unit in China.

IBM states on research.ibm.com that the Supervessel “acts as a virtual R&D engine for the creation and testing of applications serving burgeoning areas such as mobile and data analysis.” IBM claims POWER applications are for big data, Internet of Things, and data virtualization consume “90% lower” power and are “300+ times faster in pattern matching, 200+ times faster for compression, 100+ times faster in machine learning.”

IBM Research and Xilinx announced in 2016, “they will be enabling FPGA-based acceleration within the SuperVessel OpenPOWER development cloud” for demanding artificial intelligence applications including “big data analytics and machine learning.”

Xilinx microprocessors have similar components that are also in Intel Xeon and Xeon Phi used US super-computers. In 2015, the export of these chips to China was prohibited by the US Department of Commerce, but Xilinx coprocessors used in the SuperVessel cloud for China were excluded from the export ban.

Google shut down its Chinese search engine in 2010 after dozens of Gmail accounts of Chinese human rights activists had been hacked. Then the Chinese government demanded Google comply with demands to refine its search results. And since, Google has been quietly working on a Chinese censor-compliant search engine named Project Dragonfly.

The key to Google’s search engines is its Tensor Processing Unit (TPU) for neural networks that delivers “15–30X higher performance and 30-80X higher performance-per-watt than contemporary CPUs and GPUs.”

Exporting American TPU processors would undoubtedly be subject to US Commerce Department trade restrictions, but The New York Times reported last year that Google, just like IBM, “would allow other companies to buy access to those chips through its cloud-computing service.”

Semptian has undoubtedly benefited from American tech companies, gaining access to breakthrough microprocessors and super-computer parts. The Chinese company stated on its website that it’s “actively working with world-class companies such as IBM and Xilinx.”

OpenPower Foundation stated on its website that it was excited to observe the partnership between Semptian, IBM, Xilinx, and other US tech firms.

It remains a mystery why US tech firms have preferred to work with Semptian; the arrangement could be a more comprehensive strategy to work jointly with the Chinese government to obtain greater access to other markets in Asia.

Elsa Kania, an adjunct senior fellow at the Center for a New American Security, said business partnerships between the US and Chinese companies are essential to have, “but when it is a company known to be so closely tied to censorship or surveillance and is deeply complicit in abuses of human rights, then it is very concerning.”

Kania said, “I would hope that American companies have rigorous processes for ethical review before engaging, but sometimes it seems like there’s a ‘don’t ask, don’t tell,’ policy — it’s profit over ethics.”

With US tech firms allegedly building China’s surveillance state, it will only be a matter of time before this Orwellian technology washes ashore stateside.

via ZeroHedge News https://ift.tt/2GhpLaV Tyler Durden

N.Y. Court Refuses to Enjoin Allegedly Libelous Speech About Chinese Official

From Huang v. Guo, 2019 WL 3206146 (N.Y. trial. ct.), handed down Tuesday by N.Y. Judge Shlomo S. Hagler:

Around May 11, 2017, defendant uploaded a YouTube video to his YouTube channel in which he alleged that plaintiff, is “a negative example of corrupt Chinese government officials.” … The video accuses plaintiff of avarice, promiscuity—in particular, of sexual relations with other government officials—cronyism, and graft. The 25-page transcript which plaintiff submitted has a number of underlined paragraphs highlighting the alleged defamation. The complaint alleges “[s]ome of Guo’s false and defamatory statements.” For example, defendant states:

“In [then-vice-mayor Liu Azhihua’s] bedroom, we found a secret. Mr. Liu likes taking naps at noontime…. Who regularly and most frequently appeared in Mr. Liu’s bedroom half an hour before his nap? This person is … Ms. Huang Yan, from the Beijing Municipal Planning and Land Resources Management Committee…. After that, Mr. Liu would usually have sexual behavior with Ms. Huang. This occurred basically every time she visited. Accurately, each instance lasted 17 to 19 minutes, with changes in position.”

Defendant also noted plaintiff’s expensive taste, her love of Hermes bags, scarves, and accessories, and her valuable calligraphy and painting collections). The video asserts that defendant possessed tapes of these encounters and that he submitted them to Director Ling Jihua (“Ling”) of the Central Commission for Discipline Inspection (“CCDI”), but that Ling told defendant to hand over all copies of the video to him and never mention their substance again. [Further factual details omitted. -EV]

The court concluded that plaintiff’s libel claim could go forward:

[M]any of the allegedly defamatory statements appear not to be expressions of opinion or speculations as to plaintiff’s future conduct. On the contrary, defendant went to great lengths to suggest that he was setting forth facts. With respect to plaintiff’s activities generally, for example, defendant asserted that [t]here is only one person who would know the truth, and that person is me, Wengui.” In addition, defendant asserted that he knew about plaintiff’s affair with Mr. Liu because he once possessed videotapes which proved that the two were having sex….

Plaintiff acknowledges that she is a high-ranking official in China. [The defendant accused her of misconduct when she was director of the Beijing Municipal Commission of Urban Planning, and now she’s Vice Minister of Housing and Urban-Rural Development. Thus, through her public office she has become a limited purpose public figure within the world of Chinese government. Plaintiff’s lack of fame in the United States is not critical here, where (1) defendant posted the videos on YouTube, thus making them available to people worldwide, and (2) defendant posted his videos in Chinese and focuses on the alleged corruption in Beijing among officials, thus directing the videos to Chinese-speaking people concerned with that country’s politics.

[T]he plaintiff alleges in the complaint that defendant “knew the statements made by him on above said video were false and misleading” and that defendant posted the video on his popular YouTube channel “maliciously for the sole purpose of impugning [plaintiff’s] reputation and standing and casting aspersions upon [her].” … Plaintiff repeatedly states in the complaint that, at the very least, defendant recklessly disregarded both the truth and the substantial probability that plaintiff would be harmed by his statements. This showing is sufficient to withstand the pre-answer motion to dismiss the complaint [under the standards applicable to libel lawsuits by public figures, including as to punitive damages].

But the court held that an injunction was unavailable:

“Prior restraints on speech are the most serious and the least tolerable infringement on First Amendment rights, and any imposition of prior restraint, whatever the form, bears a heavy presumption against its constitutional validity” (Brummer v Wey, 166 AD3d 475, 476 [1st Dept 2018] [internal quotation marks and citations omitted]). Even “highly offensive, repulsive and inflammatory” speech cannot be restrained unless it “communicate[s] a serious expression of an intent to commit an act of unlawful violence to a particular individual or group of individuals” (id. [internal quotation marks and citations omitted]). Applying this principle, courts have found that “[p]rior restraints are not permissible … merely to enjoin the publication of libel.” Plaintiff’s complaint does not assert facts sufficient to justify such relief.

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This Isn’t Normal: 20 Large Quakes Have Hit California Within The Last 24 Hours

Authored by Michael Snyder via The End of The American Dream blog,

It has been more than 10 days since southern California was hit by the two largest earthquakes that the state has experienced in decades, and yet the shaking refuses to stop. 

In fact, now northern California is joining the party.  On Tuesday, San Francisco residents were greatly alarmed when a magnitude 4.3 earthquake rattled buildings all over the region.  Thankfully not a lot of damage was done, but it has been a very long time since California has been hit by so many sizable earthquakes over such an extended period of time.  According to the USGS, there have been 20 earthquakes of magnitude 3.0 or greater in the state of California within the last 24 hours.  Of course most of the “experts” are assuring us that all of this seismic activity will soon settle down, but what if they are wrong?

The magnitude 4.3 earthquake that just hit the San Francisco Bay area definitely surprised a lot of the “experts”.  According to one local resident, it felt “as if something had slammed against the side of our house”…

A magnitude 4.3 earthquake rattled the San Francisco Bay Area Tuesday afternoon, and residents around the region widely reported feeling light shaking.

The quake struck at 1:11 p.m. with a depth of 7.46 miles and an epicenter in the East Bay, about 7.5 miles east of Blackhawk and 17 miles southeast of Concord, according to the United States Geological Survey.

“I felt it,” says Aimee Grove who lives in the East Bay. “But it just felt like a single jolt, as if something had slammed against the side of our house.”

And that quake was followed just four minutes later by an even larger earthquake in southern California…

Four minutes later, a magnitude 4.5 quake hit near Ridgecrest, which, earlier this month, was rattled by a pair of massive temblors, including the most powerful shaker ( a magnitude 7.1) to strike California in 20 years.

And, then, at 1:24 p.m., the Bay Area felt another rumble, this time a magnitude 3.2, again centered near Blackhawk, an unincorporated community east of Oakland. It was originally reported as a magnitude 3.5.

Hopefully that magnitude 4.5 quake in Ridgecrest was just an aftershock of the very large earthquakes that we witnessed on July 4th and 5th and not a foreshock for another large seismic event that is still coming.

Overall, there have been 8,578 earthquakes of all magnitudes in California and Nevada over the last 7 days.  Most of those quakes have been extremely small, and seismologists expected that we would see thousands of aftershocks after the two huge earthquakes earlier this month.

But someday we will see “the Big One”, and all of our lives will change in an instant.

One angle that I have not really talked about is what such a quake would mean for the U.S. economy.  Today, the number one economic asset in the entire country is our real estate.  As a whole, the U.S. housing market is worth more than 33 trillion dollars, and the real estate in the state of California accounts for about one-third of that entire total.

So what do you think that it will do to our economy if vast stretches of that real estate were suddenly destroyed by an earthquake of magnitude 9.0 or greater?

Unfortunately, earthquake insurance is not required in California, and approximately 90 percent of all homeowners in the state do not have it…

About 90 percent of Californians have no earthquake insurance. Unlike homeowners’ insurance (which doesn’t cover earthquakes), it is not required to obtain a mortgage, and having the coverage roughly doubles the standard cost of insuring a home.

So when they lose their homes, they are really going to lose their homes.  Since the vast majority of them don’t have insurance, there won’t be any money to rebuild even if they wanted to.

And of course it isn’t just residents of the state of California that we need to be concerned about.  Farther north, Seattle has been rattled by 3 sizable earthquakesover the past week, and for a long time I have been warning that an enormous eruption of Mt. Rainier is coming.

The entire west coast of the United States sits along the Ring of Fire, and we have seen very unusual seismic activity all along the Ring of Fire in recent weeks.  A recent article posted by the Big Wobble cited a few of the examples that we have seen over the past few days…

A magnitude 6.4 (reduced to a 6.2) – 25km N of Kandrian, Papua New Guinea is the 5th major quake to strike the planet in the last 4 days.

The quake struck 26 km (14 miles) north of Kandrian, in New Britain, at a depth of 33 km.

There were no immediate reports of damage.

Nearby Indonesia’s Moluccas islands were hit by scores of aftershocks on Monday after a magnitude 7.3 earthquake killed at least two people, prompting hundreds of people to flee their homes on Sunday.

Unfortunately, most people still seem to be under the illusion that things will soon return to “normal”.

But the truth is that whatever was considered “normal” in the past will not be “normal” anymore.

And I am not just talking about seismic activity.

via ZeroHedge News https://ift.tt/2O0SbMY Tyler Durden

Another Tesla Bursts Into Flames After Suspected Drunk Driving Accident In California

As the old joke goes, it must be a day that ends in “Y”, because another Tesla has burst into flames – this one after crashing into the parking lot of a California apartment complex early on Wednesday.

According to NBC, the Encinitas Fire Department said that the driver was speeding east of S. Coast Highway 101 when he lost control and went off the roadway at about 2AM.

The Tesla then crashed into a parking lot of an apartment complex and, after taking down a fence, burst into flames.

Initial reports had indicated that the car crashed into the building, but it was still unclear as to whether or not the structure had been damaged. The driver was taken into custody on suspicion of drunk driving and firefighters arrived and worked for several minutes to battle the flames that were “shooting up from the car”.

Fire crews had to remain on the scene for several hours to make sure that the Tesla battery didn’t catch fire again, according to the Encinitas Fire Department.

There was no indication of whether or not the car was on Autopilot, but we will continue to follow the story and will update this article with details as they become available. 

via ZeroHedge News https://ift.tt/2M6Ol2j Tyler Durden

Will The Recent Run Of Strong Data Change The Fed’s Easing Plans

Authored by Marc Orsley of PrismFP

  • Better data recently begs the question if this is a temporary bounce or a trend change to reflation
  • Potential for China stimulus and the dovish global CB pivot to slow the data deterioration
  • Despite the better data, FOMC voting members are still talking extremely dovish
  • FF/IOER spread widening indicative of why the Fed will cut even if the data firms (don’t fight the Fed)

Since the July 5th Payroll day, the US has seen a mini run of better data. Therefore, the question du jour has become: is this another temporary blip up in the data (like we saw in January and May) inside the larger downtrend of data deterioration, or is there truly a real turn in the data developing?

The first thing to note is that after more than a year of the US data disappointing; economic surprise indices have entered the zone where the index tends to mean revert.

Citi US Econ Surprise Index

That’s not to say the data can’t still be weak. It’s just economist, who tend to be overly optimistic and playing from behind, catch up to the narrative that the data trend is lower and thus they downgrade all their forecast and voilà; surprise indices bounce.

In order to identify if the better data is a blip or a reversal, there needs to be a catalyst. Let’s identify a few major potential catalyst to a data pivot and assess if it can drive a reversal:

1) US/China Trade Wars – since the G20 “truce” that in reality yielded no progress, the news flow has worsened. To name a few…

  • The Chinese insertion of Zhong Shan (considered a hawk) into the negotiating team suggests China is taking a harder line
  • China now denying making any explicit commitment to buy more US agricultural products as the administration has previously said China would
  • US officials pushing for sanctions on China over oil purchases from Iran
  • AFL-CIO labor union threatening to end their support for Trump if he takes a softer stance

Bottom line – there is no progress to speak of and the two sides seem to be digging in. Therefore, considering trade wars have been a major cause of the data deterioration, this is will only lead to continued weakness not a reversal. Throw trade wars out as a catalyst for a data reversal for now.

2) China stimulus – since Q4 2018, China has instituted something like 88 incremental stimulus measures and there is always a multi month lag between the stimulus and the economic data. Here is an easy way to show the effects of stimulus to the data….

China Credit Impulse (black) vs. China Manufacturing PMI (lagged 8-months in purple)

Additionally, on the liquidity front, the PBoC yesterday began injecting liquidity via 7-day reverse repos for the first time in 16 sessions. Over the past two days, the PBoC has injected CNY260b. That is a trend change.

Bottom line – it is entirely possible the 88 incremental stimulus measures is beginning to feed into the economic data and the renewed liquidity injections will also aid the economy. This bears watching.

3) The global Central Bank dovish pivot – We already know the PBoC, Fed, ECB, and BOJ have turned dovish out of the major central banks, and after last week we can add the BoC to the list as Poloz indicated the markets “aren’t factoring in the complexity of trade wars.” While not moving to an easing bias quite yet, the BoC has moved away from its tightening bias.

Only the Norges bank remains the lone G10 stand out towards hiking but even they could pivot shortly given the CPI “miss” last week.

The Baltic Dry has long been thought of as a read through to global growth (note: I have never been able to validate this but the market talks about it so let’s highlight it). Perhaps the global dovish pivot has started to feed through into better activity that could lead to a bounce in the sagging PMI’s.

Baltic Dry Index (black) vs. US Manufacturing PMI (purple)

Bottom line – with almost all CB’s moving to a dovish bias it will, at the very least, help stabilize the economic data/slow the rate of change of the deterioration.

Putting all that together, there is some scope for China stimulus and dovish central banks to slow the data deterioration theme we have spoken about for months now. However as long as trade wars languish, it will be very difficult to see a major reflationary turn.

* * *

The better data does not mean the Fed will not still cut rates. With good data in hand, we have received that confirmation from voting members of the FOMC in the past few days:

1) Chair Powell – continuing his staggering dovish comments:

“Sees June Core PCE running 1.7% YTD” (so still below their mandate and talking down the stronger CPI data last week)

  • “Factors holding down the neutral rate is likely to persist” (this suggest more than an insurance cut)
  • “We must continue to assess additional policy strategies (so AIT and YCC?)

2) Evans – along with Bullard signals there is at least 50bps of cuts coming:

  • “Says he forecasts 50bps of accommodation to lift inflation”
  • “Fed may need more than 50bps of cuts in cumulative easing” (that doesn’t sound like a one-time insurance cut)

3) The other FOMC voting members’ comments I showed in Friday’s note from Williams, Clarida, Brainard, and the FOMC minutes that all showed they will cut despite better payroll and CPI data.

  • Please note the Fed’s preferred inflation gauge is Core PCE not the headline CPI data (Powell confirmed this yesterday)
  • NFP was likely overstated by the rising number of people who are taking on two jobs – that gets double counted in NFP and is overall not a bullish read on the economy

As you can see above, the FOMC is highly likely to deliver 50bps before the year is out and there is scope for more.

There are other reasons besides weakening data why the Fed will cut. To repeat what I said in Friday’s note:
“You may disagree with my data deterioration theme which gives the Fed reasons to cut, but do not miss this important point why the Fed will cut:

  • Rising deficits which causes increase treasury supply at a time when foreigners are losing their appetite to fund the US govt (as noted above in the bond auction) means the Fed needs to talk dovish/cut rates/provide accommodation/inject liquidity in order to keep yields from rising. We saw what happens when front end yields like 1y1y rise above 3% as it did in Q3 2018; the system breaks.”

The Fed Fund (FF)/Interest on Excess Reserve (IOER) spread is the clearest indication that the Fed will have to cut even if the data is turning better. It is the symbolic representation that debt levels are too high to have rising rates.

To recap what is pushing FF over IOER:

1) Deficits are increasing and projected to increase more

CBO US Projected Budget Data Deficit 2019-2029

2) Increased deficits mean increased Treasury supply to fund the deficit (see chart in point #4)

3) Decreasing foreign demand in UST’s means domestic demand is needed to take down the supply

Treasuries owned by China has been decreasing since 2014

4) That need for domestic demand is causing repo rates to increase and reserves to shrink. Rising repo rates are taking FF higher it and above IOER:

FF/IOER spread (black) vs. US Treasury issuance (purple)….

Therefore, there are only a few ways to stop Fed Funds from rising (since cutting IOER did not help):

  • To my point above, the Fed will cut the Fed Fund rate (to the chagrin of those that think the data is strong)
  • The government will have to cut the deficit (as Powell stated in his testimony to Congress last week, but unlikely any time soon)
  • The Fed will have to institute a standing repo facility (as stated in the Minutes, it is being considered but it is complicated)

Therefore, even if you think the data is not weak enough to warrant Fed cuts, the Fed has to cut to control Fed Effective. You simply cannot have rising yields any more.

What do I mean by you can’t have rising yields? Just look at how S&P’s traded yesterday after the US received its strong retail sales report and fixed income sold off. The 5yr note future made its lows at 9am EST and by 11am, S&P’s were breaking down.

June 16th intraday chart of S&P’s (black) vs. 5yr note futures (purple) – when yields rise, stocks sell off

As we saw in December, you can’t have S&P’s falling off a cliff or the whole economy goes with it and that puts the massive credit market also at risk. Therefore……the Fed has to act to compress yields which means whether this is a reversal of the data or not, the Fed will cut rates.

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Runescape “Muting” Leads to First Amendment / Due Process Lawsuit Against Video Game Company

From Elansari v. Jagex Inc., 2019 WL 3202195 (E.D. Pa. July 15), handed down by Judge Mark A. Kearney a mere 5 days after the Complaint was filed:

Amro Elansari sues a video gaming company located in the United Kingdom for allegedly “muting” him from playing his game. {[He alleges that] Jagex Inc. “operates public game open to public — free + membership” [quoting the Complaint]. Although his allegations are far from clear, Mr. Elansari alleges Jagex Inc. bans a player violating the rules of the game. He alleges Jagex Inc. “muted” him without explaining why and then denied his appeal of the decision without reasons.}

[Elansari] pro se alleges the video gaming company deprived him of due process, free speech and human rights…. He also moves for leave to proceed in forma pauperis. We grant Mr. Elansari leave to proceed in forma pauperis but dismiss his Complaint under 28 U.S.C. § 1915(e)(2)(B)(ii).

Mr. Elansari … only alleges constitutional claims. He cannot state a constitutional claim against a private gaming company precluding him for amending to assert a federal question. As he does not assert a state law claim, we dismiss the case without prejudice for him to allege a potential state law claim against parties who may have diverse citizenship….

The hand-written complaint states that “Plaintiff is Streamer ← 2000 hours+ invested.” I’m not a gaming expert, but I assume that the Jagex game involved is likely Runescape, which seems to be Jagex’s main product.

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Runescape “Muting” Leads to First Amendment / Due Process Lawsuit Against Video Game Company

From Elansari v. Jagex Inc., 2019 WL 3202195 (E.D. Pa. July 15), handed down by Judge Mark A. Kearney a mere 5 days after the Complaint was filed:

Amro Elansari sues a video gaming company located in the United Kingdom for allegedly “muting” him from playing his game. {[He alleges that] Jagex Inc. “operates public game open to public — free + membership” [quoting the Complaint]. Although his allegations are far from clear, Mr. Elansari alleges Jagex Inc. bans a player violating the rules of the game. He alleges Jagex Inc. “muted” him without explaining why and then denied his appeal of the decision without reasons.}

[Elansari] pro se alleges the video gaming company deprived him of due process, free speech and human rights…. He also moves for leave to proceed in forma pauperis. We grant Mr. Elansari leave to proceed in forma pauperis but dismiss his Complaint under 28 U.S.C. § 1915(e)(2)(B)(ii).

Mr. Elansari … only alleges constitutional claims. He cannot state a constitutional claim against a private gaming company precluding him for amending to assert a federal question. As he does not assert a state law claim, we dismiss the case without prejudice for him to allege a potential state law claim against parties who may have diverse citizenship….

The hand-written complaint states that “Plaintiff is Streamer ← 2000 hours+ invested.” I’m not a gaming expert, but I assume that the Jagex game involved is likely Runescape, which seems to be Jagex’s main product.

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Facebook Won’t Say Whether Banned Individuals Can Use Libra Despite Claiming To Be ‘Politically Neutral’ 

Facebook’s second day of Congressional hearings over Libra was by most accounts a total debacle – between Rep. Carolyn Maloney (D-CA) suggesting that the social media giant ‘shouldn’t launch’ the cryptocurrency – as new currencies should be ‘left to democratically accountable institutions,’ and another lawmaker accusing the company of ‘winging it.’ 

Perhaps the most significant revelation, however, was Facebook executive and Libra head David Marcus giving a disturbing answer over whether individuals banned from Facebook will be allowed to use the digital currency, while also claiming that the Libra Association will remain politically neutral. 

Facebook also took flack for being, well, Facebook. 

“Just because we may not fully understand a new technology proposal does not mean we should immediately call for its prohibition,” said Rep. Patrick McHenry of North Carolina – the Committee’s ranking Republican. “But let’s face it, let’s be honest, it’s Facebook, and I’m skeptical.”

Meanwhile, House Financial Services Committee Chair Maxine Waters (D-CA) has already unveiled draft legislation which would block Facebook from creating Libra, and has compared the company to ‘scandal-plagued’ Wells Fargo, per the Washington Post. 

Marcus attempted to defend Facebook, telling the lawmakers “I believe we’re owning these mistakes and working hard in remedying them and working hard at improving on all fronts.” 

It doesn’t appear anyone’s buying what Facebook is selling.

Watch what’s left of the hearing below:

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