It would always come to this. At some point there would be a reckoning for BLM and Antifa.
The shootings in Kenosha, WI are a dividing line for America.
This is the moment where normal people finally said, “Enough. There will be consequences. “
This is a war between radicalized lunatics bathed in unquenchable envy and self-pity and those who refuse to act like victims.
But they are victims.
All of us are. On both sides of the divide.
We are victims of a vicious program to divide and conquer the U.S. through a culture war designed to dehumanize each other.
We fight among ourselves over scraps while the people who manipulated events to this point walk away laughing at the destruction.
They want the violence. They love it. They relish it. It brings them power and prestige.
To maintain their power, as the systems they’ve built fail, they have set us against each other: paid looters and rioters to become cannon fodder in their war against common decency, culture, communities and family.
All for control over the levers of political power.
In 2016 we tried to tell them, peacefully, enough was enough. We elected Donald Trump, of all people, to be our standard bearer. We did it the way we were taught was the right way, through the ballot box.
It was supposed to be the hallmark of our enlightenment, the peaceful transfer of power. It’s been anything but.
For four years we’ve endured a non-stop parade of political venality unmatched in modern history. The quest for regaining the power of the White House brooked no holds being barred.
And if Trump wouldn’t go willingly and we didn’t learn our lesson, then they would activate every cell to flood the streets with disaffected and nihilistic youths to loot and rob; using their outrageous sense of entitlement as fuel for their rage against a machine they are, unwittingly, the main cogs of.
But having watched one young man clear in his purpose to defend his town from roving thugs in Kenosha be forced (under clear conditions of self-defense) to kill two people is a dividing line we’re not coming back from.
Wars are only profitable for those that promote them. Those that fight the wars are the real victims. This kid, a hero by my personal reckoning, is also a victim and there’s no coming back from what he’s had to do.
Killing while justified is still killing. It scars you, no matter if you wear a blue uniform, fatigues or a green t-shirt.
The animals I see on the streets under the auspice of what the media calls ‘peaceful protests’ beating people to within inches of their lives for the crime of being white and defending their property have no humanity.
My livestock have more decency than these people.
And yet, in order for us to survive this dark period of history, we will still have to reach out to them and offer them peace and assistance back from the insanity that grips them now.
That will be the hardest thing for us to do, while also maintaining the resolve to do what we feel is necessary to preserve something of what we’ve built.
That is the dividing line for many of us.
Only you know where that limit is. There are a lot of people out there right now confronting that limit for the first time.
As my dad used to say, as NYPD, “I’d rather be judged by twelve than carried by six.”
We are up against people who brook no limit on their behavior. Everything is justified in the pursuit of their righteous cause. You can see in it all the video footage.
And they know it. They know that we’d rather not fight back. That, unfortunately, to people empowered by the mob and turned into bullies, is misinterpreted as weakness.
Having humanity is not weakness. It is strength.
And nothing bursts the bubble of false bravado on display by Anfita/BLM at this point than strength of character, which defines limits, creates boundaries and establishes consequences.
The sad truth is that this is only the beginning of what’s to come. The line is crossed and from town to town, that line will be more difficult to assess than ever before.
The myth of policing is failing. There aren’t enough cops to quell these riots. The State has been revealed as their enablers.
The law has been used against property owners told they shouldn’t defend themselves or their businesses.
They’ve been afraid of being the ones who cross the line while the looters overwhelm the streets. That impulse will continue to wither. This anarcho-tyranny will not stand for much longer.
That’s what we saw it on the streets of Kenosha.
We’ll see more of it, until a new form of order asserts itself.
Salesforce Fires 1,000 On Day Its Stock Soars To All Time High Tyler Durden
Wed, 08/26/2020 – 16:09
With Saleforce stock exploding 25% higher today, one would think that some of the newly-found $48 billion in market cap would “trickle down” to its employees. One would be wrong.
Earlier today, Salesforce reported that revenue climbed 29% to a record $5.15 billion smashing expectations (even as the costs to generate that revenue jumped around 35%), and also boosted its full year forecast for annual sales, signaling that it is one of the companies benefiting immensely from the covid pandemic. Shares of the San Francisco-based company surged 25% on Wednesday in New York on the rosy projections, bringing gains for the year to 65%, and pushing its market cap to a record $243 billion.
As if that wasn’t enough, next week Salesforce’s stock will be one of the 30 making up the Dow Jones Industrial Average; it was added to offset the effects of Apple’s four-to-one stock split that would have given the information-technology sector a smaller representation in blue chip index.
So how does Saleforce celebrate the record riches of its shareholders and its promotion to the “Industrial” (in all but name) index? Why by informing 1,000 workers (via videoconference call of course) they would be fired.
In a vivid example of everything that is wrong with the Fed’s attempt to reflate the economy by inflating the biggest stock bubble ever, Salesforce would eliminate mostly sales and customer-support roles. As Bloomberg notes, “in the U.S., the move affects some workers who sell the company’s software aimed at financial-services firms, health and life-science companies and other cloud sales teams” with “some employees focused on Service Cloud, Salesforce Platform and configure-price-quote software also affected.”
Employees who were notified their job was being eliminated have 60 days to find a new role in the company, the WSJ added.
“We’re reallocating resources to position the company for continued growth,” a Salesforce spokeswoman said. “This includes continuing to hire and redirecting some employees to fuel our strategic areas, and eliminating some positions that no longer map to our business priorities. For affected employees, we are helping them find the next step in their careers, whether within our company or a new opportunity.”
It is somewhat ironic that on March 25, Salesforce CEO Marc Benioff pledged on Twitter that the company would avoid any significant layoffs for 90 days during the pandemic even as the company shifted to remote working. He called on other CEOs to follow him in a “no layoff” pledge.
6.Release workers who are ok.Develop plan for this with antibody titers to be on front line exposure positions.
7.Every ceo take a 90 day “no lay off” pledge.https://t.co/hwC6xme1QT everyone
Global Stocks Hit Record High, Gold Spikes Ahead Of Powell Speech Tyler Durden
Wed, 08/26/2020 – 16:00
Global stocks finally took out their old record highs today (as measured by the MSCI World Index)…. and all it took was almost $10 trillion in global liquidity…
Source: Bloomberg
Global sovereign bond yields (blue above) are at the same time hovering near record lows (though have lifted a little in the last week ahead of Powell’s “I Promise Inflation” speech tomorrow).
“You are meddling with the primary forces of nature, Mr Powell, and I won’t have it! Is that clear?”
Reflecting that somewhat, Breakevens continued to rebound notably today…
Source: Bloomberg
Sending 5Y Breakevens (strong TSY auction today) back to pre-COVID levels…
Source: Bloomberg
Which sent real yields tumbling (back to -1.05%), and grabbed gold higher…
Source: Bloomberg
The momo/value ‘rotation’ from Monday has been unrotated…
Source: Bloomberg
Leaving Nasdaq (blue) soaring and Small Caps (red) slammed… S&P was up over 1% and The Dow managed modest gains…
“Another day, another new record as internals continue to get more lopsided…”
Source: Bloomberg
Despite Nasdaq’s big surge, there were 578 more decliners than advancers…
Source: Bloomberg
NDX is now 28% above its 200 DMA, the widest spread since 2000… Can it get wider? Of course, it went to ~60% at the peak in 2000. “But this is certainly rarified air” over last 30 yrs.
Source: Bloomberg
This didn’t seem to spook stocks at all:
1035ET *FED’S BARKIN: BIG TECH DONE WELL IN PANDEMIC, REFLECTED IN STOCK MKT, THERE CLEARLY IS SOME RISK AS VALUATIONS GET ELEVATED
As FANG stocks soared by the most since April 6th to a new record high…
Source: Bloomberg
TSLA did what TSLA does…
And then there’s Salesforce!!!!! Up fucking 26% today!!!!!! And it announced layoffs!!! Bwuahahaha
Small Caps very volatile around the cash open.
There was a big short-squeeze at the open but it faded the rest of the day…
Source: Bloomberg
VIX and stocks decoupled today but once again we caution readers of the record low put/call ratio as traders buy calls not downside protection (which also bids up vol, and thus VIX)…
Source: Bloomberg
Very strong 5Y auction reversed the trend higher in yields.
Source: Bloomberg
10Y Yields fell back below 70bps (again)…
Source: Bloomberg
Dollar dumped after briefly spiking at 0830ET on the durable goods orders beat (it appears it was fake breakout of that coiling pattern we suggested yesterday)…
Source: Bloomberg
Cryptos bounced back today with Bitcoin testing back up to $11,5000…
Source: Bloomberg
Oil was flat on the day, Silver the big gainer with gold and copper stronger by around 1%…
Source: Bloomberg
Finally, year-to-date, global investors (in bonds and stocks) have made almost $10 trillion ($6.66 trillion from bonds and $3.07 trillion from stocks), after being down over $25 trillion at the trough in March…
Source: Bloomberg
via ZeroHedge News https://ift.tt/34EitLs Tyler Durden
‘Millions Of Americans Will Suffer’ – Janet Yellen Warns Of Devastating Fiscal Cliff If Congress Fails To Act Tyler Durden
Wed, 08/26/2020 – 15:45
Former Federal Reserve Chair Janet Yellen and Jared Bernstein, chief economist to former vice president Joe Biden, penned an op-ed for the New York Times on Monday blaming Congress for their inability to pass additional fiscal support as depressionary unemployment and surging virus cases and deaths weigh on the economic recovery.
“If senators still fail to resolve stalled negotiations when they return after Labor Day, millions of needy Americans will suffer — and the overall economy could degrade from its current slow rebound in growth to no growth at all,” Yellen and Bernstein wrote.
The pair said monetary policy alone could not generate a robust recovery, and further support will need to have a fiscal component to cushion households.
“Both monetary policy, which is the Federal Reserve’s job, and fiscal policy, the job of the federal government, have complementary roles to play in supporting the economy,” they said.
Yellen and Bernstein warned about a faltering recovery as the virus continues to rage across the country, forcing states to pause or reverse reopenings:
“Now, so-called real-time data show consumer spending slowing overall and deteriorating conditions for low-income households, who have become more anxious about how they will pay for their rent and their food,” they wrote, suggesting 30 million Americans are going broke and hungry.
“These numbers reflect the confluence of at least three forces: acceleration of the spread of the virus; expiration of the supplemental federal unemployment benefits; and the ending of various eviction moratoriums,” they said, noting an economic recovery cannot occur unless the virus disappears.
“It became clear this summer that public health measures across much of the country were relaxed too soon and without proper medical safeguards against the coronavirus,” they added.
The economists said, “the Federal Reserve has largely done its job,” suggesting Congress “cannot expect the Fed to keep everything together on its own.”
Yellen and Bernstein wrote the op-ed, in what could be a move to shift blame to Congress for the coming growth scare that could lead to a correction in the stock market.
The party on Wall Street, driven by liquidity via central banks and bailouts from Congress have reinflated financial assets to nosebleed valuations as the labor market implodes.
Morgan Stanley’s Michael Wilson suggested a “growth scare to be followed by a rate scare” could be seen in the weeks or months ahead.
via ZeroHedge News https://ift.tt/3hBKlna Tyler Durden
While we’ll learn more details, what’s unlikely to change is the chaos in the streets, with multiple hard-to-identify factions and unaffiliated individuals joining up in loose alliances or squaring off in volatile confrontations. That’s the face of modern social unrest, and a sight with which we’ll become very familiar if the situation in this country continues to spiral out of control.
“Two people were killed and a third injured in a shooting at a used car lot on the corner of Sheridan Road and 63rd Street overnight Wednesday by a man armed with an AR-15-style rifle,” Kenosha Newsreports. “The man, who was white, was seen on social media with a group of armed men described online as ‘militia’ who were at a small used car lot on the northwest corner of Sheridan Road and 63rd Street.”
“Militia” could mean anything at this stage, from local people defending businesses to organized groups from elsewhere participating in the scrum. For what it’s worth, at least one Boogaloo Boys group disavows any connection to the shooter.
But there are any number of possible participants. In Portland, Proud Boys and antifa (and others) tangled over the weekend while police pulled back. In communities around the country, residents and business owners have faced-off against protesters and sometimes shot looters. And lone individuals—advocating police reform, or else supportive of cops, or just wanting to see shit burn—have shown up to participate in protests or to just stir the pot.
That’s all too common a pattern, and an unpleasant indicator of where the whole country could be headed if the growing political and racial tensions of recent years follow the path on which the people of Kenosha, Portland, and elsewhere are already walking.
In terms of where those tensions are taking us, the possibility of domestic strife as serious as a second Civil War has been a topic of conversation in recent years—sometimes mockingly (#secondcivilwarletters, anybody?)—but other times more seriously. Three years ago, Thomas E. Ricks scared the hell out of a lot of people when he casually asked “smart national security thinkers” their spitball estimates of the near-term chance of a second civil war and came up with an average estimate of “about 35 percent” for a piece in Foreign Policy.
Most Civil War 2 discussions dwell on a red states vs. blue states battle, as if clear geographical divisions and well-defined sides are a standard feature of civil wars. But social unrest in the modern world is usually messier.
“The war in Bosnia and Herzegovina was a battle between three factions—the Bosnian Muslims, Croats (Catholic) and Serbs (predominately Orthodox Christian),” the U.S. Army notes of the experience of Hajrudin Djedovic, who left the Yugoslav Army in 1992 as that country was falling apart to fight for Bosnia and Herzegovina. “It was strange fighting against people he had served with only a few years earlier, he said. One day, they are neighbors and friends. The next day—they attacked his village, killed his friends and members of his family.”
Countries don’t have to collapse for chaos to reign. From the late 1960s through the early 1980s, Italy muddled through the anni di piombo—years of lead. The Economistsummarizes the confusion of that time, which still cast a shadow over Italians’ lives:
Marxist extremists, notably the Red Brigades, began kidnapping and assassinating ‘anti-worker’ officials: policemen, judges, journalists. Their right-wing opponents bombed civilians to ‘drown democracy under a mountain of corpses’. Both sides hoped to weaken the state and to spark revolution or a military takeover. Members of the Italian secret service nudged things along, working with neo-fascist killers to frame the left.
For a taste of the uncertainty of a country plagued by factional violence, it’s worth seeing the 2014 movie ’71. Set in Belfast at the start of “The Troubles,” it follows an accidentally stranded British soldier whose fate depends on the loyalties of the neighborhoods through which he passes, and the inclinations of whichever paramilitary has him at its mercy— not just unionist or nationalist, but specific factions thereof.
The U.S. as a whole is not yet immersed in its own version of “The Troubles” or the “years of lead,” let alone a Balkan-style civil war. But we’re not as far from that state as we were six months ago, let alone a decade ago.
We started this year with nearly six in 10 Americans believing that political tensions in this election year would lead to protests and rioting, according to Ipsos polling. The source of those fears is obvious, given the contempt in which the country’s major political factions hold each other. Fifty-five percent of Republicans and 44 percent of Democrats say the party opposing their own is “not just worse for politics—they are downright evil,” according to a 2019 YouGov survey. As a result of those hostilities, just over 20 percent of both Democratic and Republican respondents believe violence is at least somewhat justified if their side loses the election, according to the Democracy Fund Voter Study Group.
To that political tension, we’ve added pandemic-fueled panic and lockdown orders that have crippled the economy and increased stress. We’ve also seen an eruption of long-simmering resentment over police treatment of civilians—especially African-Americans. The killing of George Floyd brought that anger against law enforcement abuses to a head, and it continues to this day.
The result has been protests, which have all-too-often morphed into violence in the streets in multiple cities. That violence features antifa, Proud Boys, Black Lives Matter, Boogaloo Boys, neighborhood watches, and other factions and individuals of every and no ideological flavor. They interact in various shades of support, conditional alliance, and outright opposition—sometimes resulting in bloodshed.
And we haven’t even arrived at Election Day, which had Americans so on-edge at the beginning of the year.
Kenosha doesn’t have to be a vision of America’s future. Neither does Portland. But the fact that the violence is continuous and seems to be escalating is cause for concern. To avoid the spread of that conflict, we’re going to have to find a way to live with each other, or to leave each other alone. If we don’t, the violent social unrest that plagues some of our communities will become a feature of many more.
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Joe Biden’s long history of promoting draconian sentences, hard-line anti-drug policies, and proliferating death penalties is an easy target for any politician who is serious about criminal justice reform. But there is little evidence that description applies to President Donald Trump, who has repeatedly slammed Biden as “the chief architect of mass incarceration and the War on Drugs“ while presenting himself as an opponent of excessively punitive policies—a major theme of this week’s Republican National Convention.
Trump’s bona fides as a reformer consist of two accomplishments. First, he supported the FIRST STEP Act, a 2018 law that included some modest but significant drug sentence reductions. Second, he has issued 25 pardons and 11 commutations, some of which seem to reflect a sincere belief in rehabilitation and a genuine concern about unjust penalties. Most famously, Trump freed Alice Marie Johnson, a nonviolent, first-time offender who received a life sentence for her role in a Memphis-based cocaine distribution ring. Johnson, whom the president introduced during his State of the Union speech last year, was featured in a Trump campaign ad during this year’s Super Bowl and is scheduled to speak at the Republican convention on Thursday night.
Although it did not go as far as many reformers would have liked, the FIRST STEP Act, which passed with overwhelming support in the House and Senate, was a clear improvement that freed thousands of drug war prisoners, and Trump deserves credit for backing it. The fact that he has used his clemency powers not only to help his cronies but to ameliorate some real injustices is also laudable. Barack Obama, who eventually commuted a record 1,715 sentences, approved just one petition during his first term. But when it comes to his plans for a second term, Trump has said little about criminal justice, and what he has said is inconsistent with the image he is trying to project.
The second-term agenda that Trump unveiled this week, like the “Law and Justice” section of his campaign website, does not mention criminal justice reform. But it does list five points under the heading “Defend the Police,” a rejoinder to the “Defund the Police” movement. Trump’s wish list does not inspire confidence in his commitment to reversing Biden’s mistakes.
Trump wants to “fully fund and hire more police and law enforcement officers,” which sounds an awful lot like a central element of the “1994 Biden Crime Bill” (as the former vice president proudly calls it). Yet Trump says that law epitomizes the Democratic nominees’s role in promoting mass incarceration and should make African Americans think twice about voting for Biden. “Anyone associated with the 1994 Crime Bill will not have a chance of being elected,” Trump tweeted last year. “In particular, African Americans will not be able to vote for you. I, on the other hand, was responsible for Criminal Justice Reform, which had tremendous support, & helped fix the bad 1994 Bill!”
Trump wants to “increase criminal penalties for assaults on law enforcement officers.” He does not explain why current penalties are inadequate or how he would change the state laws that prescribe them. Perhaps Trump has in mind laws that treat assaults on police as hate crimes, which result in arbitrary sentence enhancements that are predictably deployed against members of the same minority group that Trump says has disproportionately suffered from the policies Biden championed. Here, too, Trump sounds like the Biden of the 1980s and ’90s, who was keen to show that Democrats could be just as mindlessly “tough on crime” as Republicans.
Trump wants to “prosecute drive-by shootings as acts of domestic terrorism.” That would be inconsistent with the current federal definition of terrorism as “the unlawful use of force and violence against persons or property to intimidate or coerce a government, the civilian population, or any segment thereof, in furtherance of political or social objectives.” It does not make much sense to put violence between urban gangs in the same category as the ideologically motivated 9/11 attacks or 1995 Oklahoma City bombing. But again, the point is emotional rather than logical, reflecting the same mentality that gave us the ever-escalating criminal penalties Trump faults Biden for supporting.
Trump wants to “bring violent extremist groups like ANTIFA to justice,” which seems unobjectionable until you contemplate how members of that ad hoc, decentralized, and vaguely defined movement are to be identified. Punishing people for their alleged membership in a group rather than their individual actions is a recipe for indiscriminate penalties of the sort that Trump intermittently condemns.
Trump wants to “end cashless bail and keep dangerous criminals locked up until trial.” That proposal is a direct swipe at a reform widely supported by critics of the criminal justice system, who say people should not be imprisoned prior to trial simply because they cannot afford bail, which punishes them without a conviction, impairs their ability to mount a defense, and pressures them into plea deals that otherwise would be less appealing. By describing defendants as “dangerous criminals,” Trump erases the presumption of innocence and ignores all the defendants, including alleged drug offenders, who are “locked up until trial” even though they do not plausibly pose a threat to the general public.
Unlike Trump, whose campaign website does not address criminal justice reform in any substantive way, Biden has a lot to say on the subject. He has repudiated the mandatory minimums and death penalties he once supported, saying they should be abolished. He also wants to eliminate the irrational sentencing disparity between the smoked and snorted forms of cocaine, which was created by a 1986 law that Biden wrote and resulted in strikingly unequal treatment of black defendants. That gap was reduced by the Fair Sentencing Act of 2010, a law signed by Obama and supported by Biden that casts doubt on Trump’s claim that only he can deliver “real criminal justice reform.”
While continuing to resist the repeal of federal marijuana prohibition, Biden now calls for decriminalizing cannabis consumption and automatically expunging “all prior cannabis use convictions” (neither of which would have much of an impact at the federal level, since the Justice Department rarely prosecutes low-level marijuana cases). He also says states should be free to legalize marijuana, which is similar to the position Trump has implied he supports and has taken in practice.
One need not believe that Biden’s conversion is completely sincere to recognize that the current climate of opinion within the Democratic Party would make reverting to his old drug-warrior instincts politically difficult. Trump, by contrast, is trying to have it both ways, assuring unreconstructed conservatives that he will be tougher on crime than Biden while telling moderates he understands that criminal penalties are frequently arbitrary and disproportionate. Reconciling those seemingly contradictory messages may not be possible, and it surely would require more thoughtfulness than Trump has demonstrated so far.
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The mother of Jacob Blake, the man who was shot in the back by Kenosha police on Sunday, has called for an end to the rioting that broke out in the aftermath her son’s shooting, which has since left two people dead.
“My family and I are very hurt. And quite frankly disgusted,” Julia Jackson, Blake’s mother, said in an interview with CNN Tuesday. “And as his mother, please don’t burn up property and cause havoc and tear your own homes down in my son’s name. You shouldn’t do it.”
Jacob Blake’s mom on violence in Kenosha: "My family and I are very hurt. And quite frankly disgusted. And as his mother, please don’t burn up property and cause havoc and tear your own homes down in my son’s name. You shouldn’t do it. … it’s just not acceptable.” pic.twitter.com/T00Fg5MOvj
Blake is, according to his father, paralyzed from the waist down.
The video of his shooting prompted riots in the 100,000-person city of Kenosha, where businesses and vehicles have been torched. The city has declared an 8 p.m. curfew and 100 members of the Wisconsin National Guard have been deployed to the city.
Two people were fatally shot Tuesday night, according to a statement from the Kenosha Police Department.
Before the shooting incident, police, using tear gas, had pushed demonstrators out of a park in front of the Kenosha Courthouse.
Some of the crowd had reassembled at a nearby gas station where they got into repeated verbal arguments with armed men who said they were there to protect businesses from vandalism, reportsTheNew York Times. A video of the incident shows a person with a rifle being chased down a street by a crowd of people.
One man can be seen taking a swing at the back of the gunman’s head. He later falls to the ground and is set upon by several members of the crowd, and can be seen shooting at least two of them. The shooter is then seen walking toward armored police vehicles.
Several bystanders in video of the incident say that the gunman was being chased after already shooting someone, reports NPR. The alleged shooter, 17-year-old Kyle Rittenhouse of Antioch, Illinois, was arrested in Illinois and charged with first-degree intentional homicide.
The Daily Beast reports that Rittenhouse was an active supporter of Blue Lives Matter and pro-police causes on Facebook. An interview posted to Twitter by Daily Caller videographer Richard McGinnis shows Rittenhouse stating that he was there to protect businesses and that he was carrying a rifle and medical kit.
I interviewed the alleged shooter before the violence started.
Many of the details surrounding last night’s shooting incident remain murky. Wisconsin state police are in charge of the investigation, reports The New York Times.
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Joe Biden’s long history of promoting draconian sentences, hard-line anti-drug policies, and proliferating death penalties is an easy target for any politician who is serious about criminal justice reform. But there is little evidence that description applies to President Donald Trump, who has repeatedly slammed Biden as “the chief architect of mass incarceration and the War on Drugs“ while presenting himself as an opponent of excessively punitive policies—a major theme of this week’s Republican National Convention.
Trump’s bona fides as a reformer consist of two accomplishments. First, he supported the FIRST STEP Act, a 2018 law that included some modest but significant drug sentence reductions. Second, he has issued 25 pardons and 11 commutations, some of which seem to reflect a sincere belief in rehabilitation and a genuine concern about unjust penalties. Most famously, Trump freed Alice Marie Johnson, a nonviolent, first-time offender who received a life sentence for her role in a Memphis-based cocaine distribution ring. Johnson, whom the president introduced during his State of the Union speech last year, was featured in a Trump campaign ad during this year’s Super Bowl and is scheduled to speak at the Republican convention on Thursday night.
Although it did not go as far as many reformers would have liked, the FIRST STEP Act, which passed with overwhelming support in the House and Senate, was a clear improvement that freed thousands of drug war prisoners, and Trump deserves credit for backing it. The fact that he has used his clemency powers not only to help his cronies but to ameliorate some real injustices is also laudable. Barack Obama, who eventually commuted a record 1,715 sentences, approved just one petition during his first term. But when it comes to his plans for a second term, Trump has said little about criminal justice, and what he has said is inconsistent with the image he is trying to project.
The second-term agenda that Trump unveiled this week, like the “Law and Justice” section of his campaign website, does not mention criminal justice reform. But it does list five points under the heading “Defend the Police,” a rejoinder to the “Defund the Police” movement. Trump’s wish list does not inspire confidence in his commitment to reversing Biden’s mistakes.
Trump wants to “fully fund and hire more police and law enforcement officers,” which sounds an awful lot like a central element of the “1994 Biden Crime Bill” (as the former vice president proudly calls it). Yet Trump says that law epitomizes the Democratic nominees’s role in promoting mass incarceration and should make African Americans think twice about voting for Biden. “Anyone associated with the 1994 Crime Bill will not have a chance of being elected,” Trump tweeted last year. “In particular, African Americans will not be able to vote for you. I, on the other hand, was responsible for Criminal Justice Reform, which had tremendous support, & helped fix the bad 1994 Bill!”
Trump wants to “increase criminal penalties for assaults on law enforcement officers.” He does not explain why current penalties are inadequate or how he would change the state laws that prescribe them. Perhaps Trump has in mind laws that treat assaults on police as hate crimes, which result in arbitrary sentence enhancements that are predictably deployed against members of the same minority group that Trump says has disproportionately suffered from the policies Biden championed. Here, too, Trump sounds like the Biden of the 1980s and ’90s, who was keen to show that Democrats could be just as mindlessly “tough on crime” as Republicans.
Trump wants to “prosecute drive-by shootings as acts of domestic terrorism.” That would be inconsistent with the current federal definition of terrorism as “the unlawful use of force and violence against persons or property to intimidate or coerce a government, the civilian population, or any segment thereof, in furtherance of political or social objectives.” It does not make much sense to put violence between urban gangs in the same category as the ideologically motivated 9/11 attacks or 1995 Oklahoma City bombing. But again, the point is emotional rather than logical, reflecting the same mentality that gave us the ever-escalating criminal penalties Trump faults Biden for supporting.
Trump wants to “bring violent extremist groups like ANTIFA to justice,” which seems unobjectionable until you contemplate how members of that ad hoc, decentralized, and vaguely defined movement are to be identified. Punishing people for their alleged membership in a group rather than their individual actions is a recipe for indiscriminate penalties of the sort that Trump intermittently condemns.
Trump wants to “end cashless bail and keep dangerous criminals locked up until trial.” That proposal is a direct swipe at a reform widely supported by critics of the criminal justice system, who say people should not be imprisoned prior to trial simply because they cannot afford bail, which punishes them without a conviction, impairs their ability to mount a defense, and pressures them into plea deals that otherwise would be less appealing. By describing defendants as “dangerous criminals,” Trump erases the presumption of innocence and ignores all the defendants, including alleged drug offenders, who are “locked up until trial” even though they do not plausibly pose a threat to the general public.
Unlike Trump, whose campaign website does not address criminal justice reform in any substantive way, Biden has a lot to say on the subject. He has repudiated the mandatory minimums and death penalties he once supported, saying they should be abolished. He also wants to eliminate the irrational sentencing disparity between the smoked and snorted forms of cocaine, which was created by a 1986 law that Biden wrote and resulted in strikingly unequal treatment of black defendants. That gap was reduced by the Fair Sentencing Act of 2010, a law signed by Obama and supported by Biden that casts doubt on Trump’s claim that only he can deliver “real criminal justice reform.”
While continuing to resist the repeal of federal marijuana prohibition, Biden now calls for decriminalizing cannabis consumption and automatically expunging “all prior cannabis use convictions” (neither of which would have much of an impact at the federal level, since the Justice Department rarely prosecutes low-level marijuana cases). He also says states should be free to legalize marijuana, which is similar to the position Trump has implied he supports and has taken in practice.
One need not believe that Biden’s conversion is completely sincere to recognize that the current climate of opinion within the Democratic Party would make reverting to his old drug-warrior ways politically difficult. Trump, by contrast, is trying to have it both ways, assuring unreconstructed conservatives that he will be tougher on crime than Biden while telling moderates he understands that criminal penalties are frequently arbitrary and disproportionate. Reconciling those seemingly contradictory messages may not be possible, and it surely would require more thoughtfulness than Trump has demonstrated so far.
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The mother of Jacob Blake, the man who was shot in the back by Kenosha police on Sunday, has called for an end to the rioting that broke out in the aftermath her son’s shooting, which has since left two people dead.
“My family and I are very hurt. And quite frankly disgusted,” Julia Jackson, Blake’s mother, said in an interview with CNN Tuesday. “And as his mother, please don’t burn up property and cause havoc and tear your own homes down in my son’s name. You shouldn’t do it.”
Jacob Blake’s mom on violence in Kenosha: "My family and I are very hurt. And quite frankly disgusted. And as his mother, please don’t burn up property and cause havoc and tear your own homes down in my son’s name. You shouldn’t do it. … it’s just not acceptable.” pic.twitter.com/T00Fg5MOvj
Blake is, according to his father, paralyzed from the waist down.
The video of his shooting prompted riots in the 100,000-person city of Kenosha, where businesses and vehicles have been torched. The city has declared an 8 p.m. curfew and 100 members of the Wisconsin National Guard have been deployed to the city.
Two people were fatally shot Tuesday night, according to a statement from the Kenosha Police Department.
Before the shooting incident, police, using tear gas, had pushed demonstrators out of a park in front of the Kenosha Courthouse.
Some of the crowd had reassembled at a nearby gas station where they got into repeated verbal arguments with armed men who said they were there to protect businesses from vandalism, reportsTheNew York Times. A video of the incident shows a person with a rifle being chased down a street by a crowd of people.
One man can be seen taking a swing at the back of the gunman’s head. He later falls to the ground and is set upon by several members of the crowd, and can be seen shooting at least two of them. The shooter is then seen walking toward armored police vehicles.
Several bystanders in video of the incident say that the gunman was being chased after already shooting someone, reports NPR. The alleged shooter, 17-year-old Kyle Rittenhouse of Antioch, Illinois, was arrested in Illinois and charged with first-degree intentional homicide.
The Daily Beast reports that Rittenhouse was an active supporter of Blue Lives Matter and pro-police causes on Facebook. An interview posted to Twitter by Daily Caller videographer Richard McGinnis shows Rittenhouse stating that he was there to protect businesses and that he was carrying a rifle and medical kit.
I interviewed the alleged shooter before the violence started.
Many of the details surrounding last night’s shooting incident remain murky. Wisconsin state police are in charge of the investigation, reports The New York Times.
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“Ground control to Major Tom … Your circuit is dead, there’s something wrong. Can you hear me Tom. Can you here me Tom….Tom: “I am floating around in my tin can and there is nothing I can do.” (David Bowie)
Yes, Ground Control in the form of the major central banks have totally lost control and the world economy is now floating around helplessly without direction. Since the end of 2006, the major CBs (Fed, ECB, BOJ & PBOC) have increased their balance sheets from $5 trillion to $25.5t today. The great majority of the extra $20t created since 2006 has gone to prop up the financial system.
And even with these $20t the world economy is more rudderless than it has ever been. Clueless CBs are doing what we had expected them to do which is doing the only thing they know – namely printing endless amounts of money that has zero value since it is created out of thin air. But the CBs money creation is just a small part of the problem. On the back of CB’s $25t balance sheets, global debt has exploded from $125t in 2006 to $280t today.
None of this colossal extra debt has benefitted ordinary people. It has propped up the banks and made the gap between the haves and the have-nots dangerously high. In the US for example 10% of the population hold 70% of the wealth. No wonder that we are seeing an increasing number of protests and riots. And as the economy deteriorates the violence is sadly going to increase substantially.
SPACE ODDITY
So what is the destiny of this Space Oddity (name of Bowie’s song above) with not only central banks having lost control of but also governments?
We can just take the US as an example since it is the biggest economy in the world and also the most vulnerable. But many countries are in the same situation.
Here are some of the areas which neither Trump nor Biden will come to grips with:
CV-19 – Man made virus paralysing the world, no effective vaccine for long time, if ever
Economy – The precipitous fall is more likely to accelerate than recover
Deficits – Will accelerate for years to support economy, people & financial system
Debts – Will surge to 200% of GDP quickly, much higher when banks collapse
Unemployment – 20-30% will be the floor, higher likely
Social unrest – Only beginning now, much more to come with empty stomachs
Civil war – Government can’t cope with protests now, risk of escalation major
Pensions – Will disappear as asset markets collapse, most people don’t have pension
Social security – Will be insufficient with bankrupt government and hyperinflation
Political turmoil – No party or leader will be trusted – not even coming Marxists
The problems are endless and all of the mess above has been created by humans, even Covid-19, so we are looking at a world falling apart due to human failure and mismanagement – not that this is new in history.
SOUND MONEY
Anyone who understands sound money cannot seriously believe that the explosion of debt since 1971 (when Nixon closed the gold window) will end well.
One of the most important attributes of sound money is that it must be scarce. The explosion of money supply and debt since 1971 proves what happens when money is infinite. The Keynesians and MMT (Modern Money Theory) followers believe that money can be pulled out of a hat like a rabbit. And for 50 years they have got what they asked for without understanding the consequences. Because for every wilful action, there are always serious consequences.
For 50 years, unlimited paper or fiat money has been created without any service or goods produced in exchange. Since 1971, total US debt has gone from $1.7t to $78t. In the same period, prices for houses, goods and services have exploded but most consumers are not aware of this since it is a slow process. As the chart below shows, debt has surged 46x in 1971-2020 whilst GDP is up only 18x. So the US economy is running on empty as more debt is required to raise GDP.
As the money created to expand the economy is fake, the increase in GDP is not either but just an inflated figure due to chronic currency debasement.
SOUND MONEY MUST BE SCARCE
The creeping inflation that the US and most of the world has experienced for half a century is best illustrated in the debasement of currencies.
Since sound money must be scarce, fiat money can never be sound since unlimited amounts can be and have been created. One of the very important features of gold is that it is scarce. The total global gold stock only increases by 1.7% or 3,000 tonnes per annum.
So scarcity is one of the important reasons why gold is the only currency that has survived in history. If we look at the gold price in US dollars since Nixon abandoned the gold backing of the dollar in 1971, the dollar has lost a staggering 98%.
Only in this century, the dollar has lost 85% against real money or gold. There is no better proof of the total failure of the policies of the Fed and other CBs than the destruction of the currencies.
END OF THE END
The world has now entered the final phase or the end of the end of this economic era which started in 1913 with the creation of the Fed. The beginning of the end was 1971 with Nixon’s fatal decision. The very final phase started in August 2019 when the ECB and the Fed told the world that the financial system is bankrupt. They didn’t quite use those words but their semi-veiled language and especially actions were crystal clear for once.
Trouble in the financial system meant that the Fed and the ECB would do whatever it takes and this is what they have done for the last 6 1/2 months. Total asset of primarily the Fed and the ECB have gone up by $6t since Aug 2019.
But this is just the mere beginning. With first a bankrupt financial system, an extremely weak world economy and a pandemic on top of that, the Fed and the ECB are totally lost. They are continuing to throw petrol on the fire as if that would solve the problem. But instead of extinguishing the inferno, they are just making it bigger and more dangerous by the day.
DISCONNECT IS COMING TO AN END
The directionless world economy is unlikely to continue to drift endlessly whatever CBs do. On the surface these banks are under the illusion that the world has confidence in them since stock markets continue to defy reality. The disconnect with the real economy continues to get bigger by the day. And the implosion of markets and the world economy are not far away.
Just look at the Nasdaq which is now more than 10x!! higher than the 2009 low. It seems that investors believe that the world will just sit at home on benefits and play with their iPhone and iPad, buy things from Amazon they don’t need and then watch Netflix shows all day.
But even if they do, with 30% unemployed in the US they are hardly in a position to support the stupendous valuations of these companies. Netflix is valued at $217 billion with an 83 p/e. It has an infinite multiple of free cash flow since that has been negative to the extent of $11 billion in the last 5 years. Amazon is valued at $1.6 trillion with a p/e of 126! Many other companies are on p/e’s that guarantees a coming crash soon.
The US government will need to extend the unemployment benefits in perpetuity in order for these companies to justify the current valuations. But not even that will be enough.
INFLATE AND DIE
The legendary Richard Russell coined the phrase “Inflate or Die”. We have sadly gone past that point and the world economy is more likely to experience INFLATE AND DIE. But it is not just about inflating or printing money to subsidise the unemployed or ailing companies. The next big phase of QE will be to prop up the financial system on a much bigger scale.
Neither companies nor individuals will be in a position to service or repay loans in coming years. Nor will be the government, states, municipalities etc. Instead everybody will need more debt to survive.
Credit losses for the banks will be astronomical. Even with current low interest rates, bad debts are increasing rapidly. And most banks have most certainly not yet recognised the problem adequately. The 15 largest US banks have so far set aside $76b to cover bad debts and the 32 biggest European banks €56b.
This is the highest loan provision since the 2006-9 crisis which brought down Lehman and Bear Stearns. The consultants Accenture estimates that losses from bad debts could rise to $880b by the end of 2022. That would be 2.5x the 2009 loan provisions.
But I doubt that banks have realised the magnitude of the current economic problems. Central banks clearly see the risks. Otherwise they wouldn’t have panicked back in August 2019.
WILL DEUTSCHE BANK CAUSE SYSTEMIC COLLAPSE?
Just take Deutsche Bank (DB) which is the worst of the lot. They have total assets of €1.3t and equity of €62b. The equity is 4.7% of their total assets. So loan losses of 5% would wipe out their capital. I would be surprised if the coming loan losses would be less than 25% and probably a lot more. And if we add the gross derivatives exposure of $50t, a 0.1% loss would be enough to bankrupt DB.
Now people will argue that gross exposure should be reduced to a much lower net figure. The problem in a crisis is that gross exposure remains gross when counterparties fail.
So in the next crisis, DB is very unlikely to survive. As one of the biggest banks in the world, DB will have positions with all major banks worldwide. So a fall of DB would most likely lead to systemic collapse with the whole system imploding.
FED AND ECB STANDING BY WITH HELICOPTER MONEY
The Fed and ECB are clearly totally aware of this risk and are therefore standing watch. They will initially do everything in their power which is helicopter money, stopping withdrawals, bail-ins, bail-outs, negative rates etc.
There is also likely to be a new reserve currency in the form of a cryptodollar, debt moratoria etc and a possible reset linked partly to the gold price. This might work for a limited period but will fail in the end. The Chinese and Russians will not agree and will challenge the US financial solidity as well as the real level of their gold holdings which is likely to be substantially below the declared 8,000 tonnes. The second reset will be disorderly and this is when the banking system will not survive in its present form.
At that point the world will realise that the central banks have totally lost control of the system as the money they are printing will be recognised as having ZERO value.
“And there is nothing they can do” as Bowie said.
POLITICAL DISARRAY AND ANARCHY
When we reach that point, governments will also be in disarray and powerless for most of the time. The people will always back the opposition parties which will promise the earth but when they gain power deliver very little. So government changes will be frequent and there will be periods of anarchy.
A dark scenario sadly but the die is already cast and I cannot see any chance of avoiding “a final and total catastrophe of the currency system involved” (von Mises).
I clearly hope that this scenario won’t happen but the chances of avoiding it are slim. It is only a matter of the degree and severity of the collapse.
Not easy for ordinary people to protect themselves against Armageddon. Financial protection in the form of physical gold and some silver is absolutely essential but that is only a small part of things to prepare for.
The most important support is a close family and close friends and also appreciating non-material and virtually free values such as nature, books and music.
The effects on markets and money will of course be dramatic but more about that in another letter.
via ZeroHedge News https://ift.tt/2EzhDF1 Tyler Durden
