A funny thing has been happening on YouTube. For some reason, certain combinations of Chinese characters have been immediately removed from the platform within a few short seconds. No warning or reason would be given to the Mandarin-speaking moderatees. And it’s not like they had been foul or freaky in a foreign tongue. The Hanzi Which Shall Not Be Named were merely 共匪 (“communist bandit”) and 五毛 (“fifty cents”).
Huh? Why in the world would YouTube want to immediately take down those particular phrases? Well, according to YouTube, they didn’t. It’s an algorithmic mistake, you see. The company toldThe Verge that upon review, they discovered this odd insta-deleting was indeed an “error in [their] enforcement systems” that is currently being patched.
How strange that this automated fluke would tend towards the direction of the Chinese Communist Party’s (CCP) preferences. These terms might seem random to Westerners, but they carry significant political weight in China.
It’s not nice to call someone a bandit, whether they are a communist or not. But in the Chinese context, the term 共匪 has a very particular meaning: it was used by Nationalist partisans led by the Republic of China’s Chiang Kai-shek against the People’s Republic of China’s Mao Zedong and the reds. Today, it is considered a slur against the CCP and its patriotic supporters.
五毛 is a cleverer anti-CCP troll. It’s basically calling a pro-CCP commenter a paid shill, albeit a cheap one. The joke is that human CCP NPCs get paid fifty cents for each pro-CCP post; ergo, the “fifty-cent army” or 五毛党.
One of the weirder things about this controversy is that those terms would not disappear from YouTube comments if you typed them out in English or in Pinyin, which is a phonetic way to write out Chinese characters. They would only get struck if they appeared in the original Hanzi.
Yet YouTube is already banned in China and can be a pain to access without a good VPN and strong desire to do so. It’s not like YouTube would have a significant impact on domestic Chinese opinion anyway. It would be like if WeChat, a hugely popular Chinese messaging app that basically no non-expat Americans use, randomly started censoring terms like “MAGAtard” or “McCarthyite.” What’s the point?
Well, theoretically, this kind of censorship could be aimed at keeping diaspora citizens in line. Chinese immigrants have found success and fortune throughout Western democracies. The CCP may worry that their erstwhile assets could become a little too accustomed to such capitalist pig values as freedom of speech. If people can’t be kept off YouTube, maybe the most memorable memes can.
But that is just a theory. We are asked to believe that YouTube’s pesky algorithm just happened to accidentally disappear these very particular Chinese anti-government phrases since at least October of 2019. And although users had publicly flagged this “bug” on official YouTube help forums last fall, it did not become a major concern until the issue received attention in the press last week.
Do you believe YouTube? A lot of people don’t. It’s hard to know for sure what happened. Platform algorithms are necessarily opaque, and they can sometimes produce outcomes that even their designers struggle to understand. Not only are these algorithms trade secrets, they are an inherently secretive trade.
It is entirely possible that YouTube discretion had nothing to do with this seeming pro-CCP censorship. Perhaps the fifty-cent army flagged these phrases enough to become automatic triggers that the algorithm would automatically pull. But it is also possible that someone at YouTube manually added these terms to a blocklist. Other platforms are known to have such lists. Right now, we don’t know. Besides, the outcome is a problem either way.
There is a lot of smoke, but is there fire? How deep might such problems run? Someone needs to dig for answers.
The U.S. government could try. Pressure from politicians of both parties contributed to Google winding down its proposed “Dragonfly” Chinese search engine that would have been compliant with CCP censorship demands. Of course, this pressure campaign relied on someone with close knowledge of the Dragonfly Project to leak documents to the Intercept in the first place. Without a whistleblower, there’s no trail to follow.
Perhaps YouTube employees will take more public interest in such matters. They are in a good position to extract answers and concessions from their managers if there is more to this story than official statements indicate. It could be personally risky. But Alphabet employees have been willing to stick their necks out for ideals in the past. In addition to their opposition to Project Dragonfly, Googlers’ demonstrations against the Project Maven proposal with the U.S. Department of Defense proved fruitful.
We can hope that YouTube will do the right thing. Yet it is an unsatisfactory option, and even the most public-minded company would struggle to consistently and ethically do battle against a set of politically-mediated “enemies.” Is that realistic or even desirable?
We are currently amidst a complex debate about what rights and responsibilities platforms may have in moderating user-submitted content. Few would dispute that Section 230, which shields internet actors from legal liability due to information provided by others, is responsible for the internet environment we inhabit today. The problem is that this internet environment is one where hostile foreign governments that operate reeducation camps for religious minorities may stealthily manipulate content and stifle dissent on U.S.-based platforms with impunity. Does anyone really think this is sustainable?
Laws and activism can only do so much. Censorship, whether by accident or pressure, will be a threat whenever a central party has the ability to censor. The cypherpunk activist John Gilmore noted that “the net interprets censorship as damage and routes around it.” It may take time, but eventually we will arrive at a system where authorities could not censor distributed content even if they wanted to.
For those who oppose censorship, working towards solutions that further entrench governments or central platforms in content moderation misses the long-term answer. Instead, they should seek and support technological projects that make the problem irrelevant.
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I touched on this briefly in my looting/shooting post, but I thought I’d elaborate a bit more (especially since the commenters seemed to be interested in both the legal and moral aspects of this question). Note that this is, as usual, not specific legal advice, but just a general layout of how various American courts deal with the matter; many of the rules, as you’ll see, vary sharply among states, and often turn on specific factual details. (I say “you” below for clarity and convenience—I hope none of you has to actually do any of this.)
[1.] In all states, you can use deadly force to defend yourself against death, serious bodily injury (which can include broken bones and perhaps even lost teeth), rape, or kidnapping, so long as (a) your fear is reasonable and (b) the danger is imminent (requirements that also apply to the doctrines I discuss below). For instance, you should be able to use deadly force against someone who is trying to burn down your home, since that threatens you with death or serious bodily harm. You should be able to do the same against someone who is trying to burn down your business, though with possible limitations involving the duty to retreat in the minority of states that recognize such a duty.
But in nearly all states, you can’t generally use deadly force merely to defend your property. (Texas appears to be an exception, allowing use of deadly force when there’s no other way to protect or recapture property even in situations involving simple theft or criminal mischief, though only at night, Tex. Penal Code § 9.42; see, e.g., McFadden v. State (Tex. Ct. App. 2018).) That’s where we get the conventional formulation that you can’t use deadly force just to defend property.
[2.] This conventional formulation, though, omits an important limitation: In basically all states, you can use nondeadly force to defend your property—and if the thief or vandal responds by threatening you with death or great bodily harm, you can then protect yourself with deadly force. So in practice, you can use deadly force to protect property after all, if you’re willing to use nondeadly force first and expose yourself to increased risk.
And in some states, you don’t even need to expose yourself to such increased risk, if you reasonably fear at the outset that nondeadly protection of property would be too dangerous. In those states, to quote the Model Penal Code formulation (which some have adopted), deadly force can be used if
the person against whom the force is used is attempting to commit or consummate arson, burglary, robbery or other felonious theft or property destruction and either:
[a] has employed or threatened deadly force against or in the presence of the actor; or
[b] the use of [nondeadly] force to prevent the commission or the consummation of the crime would expose the actor or another in his presence to substantial danger of serious bodily injury.
Note the requirement, in at least this version, of felonious theft or property destruction.
[3.] And that’s just for garden-variety theft and property damage. When the theft or vandalism is aggravated in certain ways, many states allow for still more deadly force.
[A.] In about half the states you can use deadly force against robbery, which generally includes any theft from the person that uses modest force or a threat: “Even a purse snatching can constitute a robbery if the victim simply resists the effort to wrest the purse away.” Some robbery of course does also create a reasonable fear of death or serious bodily injury, but in these states such a fear is not required.
[B.] In some states, there is a rebuttable presumption that you reasonably fear death or great bodily harm—and may thus use deadly force—if the target is (to quote the Iowa statute),
Unlawfully entering by force or stealth the dwelling, place of business or employment, or occupied vehicle of the person using force, or has unlawfully entered by force or stealth and remains within the dwelling, place of business or employment, or occupied vehicle of the person using force.
This is just a presumption, but to rebut it the prosecution would generally have to prove beyond a reasonable doubt that you didn’t actually reasonably fear death or great bodily harm in such a situation.
This, of course, is just the tip of the iceberg: There are various limitation to these rules (e.g., if you’re actually the initial aggressor, or if you know there’s a good-faith dispute about the ownership of the property), and I’ll note again that the rules and their interpretation can vary sharply from state to state. But this is the big picture, which I think helps show the complexity of this area of the law.
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“He spoke of lands not far, for lands they were in his mind..”
Harry Hindsight is the greatest trader none of us has ever met. He has 20/20 rear view vision. He’s made off like the proverbial butcher’s dog with the sausages through this crisis. He correctly foresaw how the greatest economic shock of the last 200 years was the perfect opportunity to arbitrage predictable Central Bank and Government responses, and make billions.
Yet, I suspect Harry is now shorting the public markets he loaded up on in March, and is reinvesting the gains into gaming deepening distress. The picture is changing.
Yesterday I wrote how the current disconnect is widening. Global stock markets continue to grind higher. The outlook for growth and jobs continues to deteriorate. It’s not healthy. It’s becoming obscene. Many investors still seem blind to the devasting potential of crisis in jobs, growth, welfare and inequality the apparent recovery in stocks is hiding.
If you think you’re a financial genius because you bought the rally on March 23rd (the bottom of the COVID crash, and incidentally, the day UK lockdown was announced), then you either arbitraged how Central Banks and Governments were going to press the MAX POWER button to juice the market through QE Infinity (QEI), bailouts and nationalising payrolls, (in which case, well done), or you were just a lucky idiot who bought into all the nonsense hype about an oversold opportunity.
Do you perhaps think the liquidity Central Bank have pumped into the market might be related to recent stock and bond gains? (Clue: Yes.)
The Fed’s balance sheet has expanded by over $3 trillion since March. Stock Market capitalisation has increased by …. about the same amount. $2.9 trillion. And bond market investors found another $1 trillion to put into the busiest corporate new issue market of all time because they saw it was backstopped by QEI and rates were going lower. Thank you Fed!
The only thing the market is worried about is when the QEI orgy MIGHT stop. That’s pretty obscene when millions of workers are about to lose their jobs across Europe, American cities are burning with injustice, and the virus is still reaping its toll across increasingly fraxious economies. The social risks are escalating faster than the market thinks.
Yet the only real risk the market perceives is “normalisation” – central banks around the globe switching off the cash spigot. Imagine what a “taper tantrum” might look like today if the BoE, The Fed and ECB decided to switch policies, raise rates and stop QE? The market is making a very clear assumption that Central Banks will not stop, and this free ride is going to continue.
Will it?
At some point Governments will have to act to directly address the economic disaster that’s unfolding. They may do so gently. Or it might get messy. There is certainly potential for a brutal socially driven correction and unwind of current policy if we don’t see a swift recovery, job creation and inequality addressed – this summer could be a season of riots as frustration and fury takes hold.
I suspect Harry Hindsight is already investing on the basis Governments are seeking the former outcome; addressing the very real jobs, growth and welfare crash through sensible and considered fiscal and industrial policies designed to create jobs and stabilise the economy – rather than markets.
Harry has figured out just how much the global economy is going to change. He’s now investing in distressed opportunities – figuring what companies and sectors governments will target and focus support to, and looking for ways to invest into distressed assets in critical areas like property, infrastructure, education and industry, on the basis they are the long-term bases for post-COVID economy.
Unfortunately, I am nowhere near as clever as Harry Hindsight… but I see the way he’s thinking: What do markets hate most? Government intervention.
If you were to propose the government effectively runs or dictates aspects of the economy, you will immediately be called a communist, reminded how state industries have failed everywhere and that governments can run the economy. Only free markets can do that.
Twaddle! Markets are only showing a pulse because of state intervention and oodles of government money.
But it’s a fair comment that governments don’t do running business well – bureaucracy thrives in all government sectors. So this time it’s likely to be governments encouraging the private sector to invest alongside. It might be state SME banks – like the idea the UK could use a new 3i. I suspect new business focused banks are going to be part of the future – and Harry will be investing in them.
And we don’t need to wholly nationalise economies. Trends and themes are emerging.
Some firms are doing just fine. The big money pushing the largest stock market gains have been concentrated in the few really big FAAMA tech giants (Facebook, Apple, Amazon, Microsoft and Alphabet.) Gains in smaller stocks are largely on the back of virus narrative; if there is a positive story to tell – no matter how tenuous, stocks love a good story: so we’ve seen drugs companies, tractor part suppliers and pizza delivery firms have their five minutes of fame as they post spectacular but usually brief gains.
In the bond markets, the $1 trillion feeding frenzy of new issuance was focused entirely on larger companies. Their party was backstopped by QE Infinity, and Central Banks politely pretending no one is being downgraded. If Jerome Powell squints his eye hard enough some fallen angles might still look to be investment grade.
There are dangers:
We should not underestimate the continuing risk of the virus. Yesterday, I stated the “around the globe the virus numbers suggest we’re past the moment of greatest danger.” A reader quickly corrected me – it might be true for the most developed nations, but 75% of the global population in second tier nations are only now experiencing rising contagion rates. How less wealthy nations of the world treat the pandemic with limited health resources could well dominate headlines in coming months – especially when China and the West will be competing to support them!
Politics are still throwing up a number of potential wobbly moments:
i) Can the UK negotiate a meaningful trade deal with Europe?
ii) The coronavirus is proving a “heads it wins, tails you lose” scenario for politicians across Europe – raising the prospect of new rounds of populisim.
iii) Who wins in November’s US election – bad, worse and worst scenarios exist. The result is going to set the tone of US engagement/disengagement for the next 25 years, and have enormous consequences for global growth.
Market technicals look negative. I tend to try and fit the market narrative to what the technicals claim to show – for instance if the charts show a looming shock, I’ll figure out what the current China tension story is likely to be. Looking for an event that could trigger the down-phase the charts propose – is guesswork, but sometimes you get lucky. I was told yesterday its time to load up VIX, but also the charts show some very contradictory patterns. In other words… a correction is coming, but it might be a few days or a few months long…
Rolls-Royce gathers more than 70tn data points from its in-service aero-engines. So why do we most often wait for our bodily engines to develop a fault before we regularly collect health data? Thanks to the use of smartwatches and other wearable sensors, we carry permanent health monitors on our wrists. With the right apps, we can easily measure our temperature, heart rate, glucose levels, menstrual cycles, blood pressure and sleeping patterns. Such technology can help deliver the precious 3Ps of healthcare: personalisation, prevention and precision. It may also be able to provide early warning signals of a fourth P: pandemics.
Imagine a world where all your health data is encrypted on your watch, smartphone and PC. Where your Doctor AI system is constantly monitoring changes, and referring you for blood samples or other tests when it thinks they are required. My heart Surgeon Nick Curzon told me about his vision for this kind of AI based system a few years ago.
We all love the NHS – we’ve been out clapping doctors and nurses with pride. But it’s a massive top-heavy bureaucracy that doesn’t work particularly well Perhaps the virus is a chance for reform. Fewer health managers means more doctors and nurses!
via ZeroHedge News https://ift.tt/2ZZQ54f Tyler Durden
Global stocks and S&P futures rose to three-month highs as central banks looted shorts and as investors looked past the worst social unrest in decades and the risk of a second round of corona virus infections, to signs on even more fiscal and monetary stimulus propping up what BofA called “fake markets.” The dollar fell for a fourth straight day, and yields rose.
S&P 500 futures surged alongside European stocks after initially dropping in the wake of President Donald Trump’s vow to deploy large numbers of troops if cities and states don’t act to contain violence from the ongoing riots, and reports China had ordered U.S. soybean purchases to be halted but Europe got the bulls back on track.
The European STOXX 600 index jumped over 1% to a fresh 12-week high as German Chancellor Angela Merkel sought to thrash out a second package to help the country’s economy. Germany’s DAX surged nearly 3% on news Lufthansa’s board had approved its government bailout and as Volkswagen and BMW shares rose as much as 7% at the prospect of a 5 billion- euro government-funded scheme to boost sales. Deutsche Lufthansa AG surged after the airline overcame most of the barriers to receiving a 9 billion euro ($10 billion) bailout from the government.
“In a way, it is remarkable that the market remains in this positive mood,” said Elwin de Groot, head of macro strategy at Rabobank. “Even with these rising protests in the U.S. and the situation in Hong Kong at the moment, the market is pushing on and seeing room for optimism.”
Asian stocks also gained, led by finance and industrials, after rising in the last session. Trading volume for MSCI Asia Pacific Index members was 27% above the monthly average for this time of the day. Japan’s Nikkei rose 1.2% to its highest since late February in Asia and the Topix gained 1.2%, with Sysoft and DLE rising the most. The Shanghai Composite Index rose 0.2%, with Silvery Dragon and Beijing Jingyuntong Tech posting the biggest advances. Markets in Seoul, Taipei and Hong Kong also gained.
“This optimistic read for risk can only persist if measures like orders and employment continue to improve month to month,” said Alan Ruskin, chief international strategist at Deutsche Bank. “Early setbacks would be a very poor sign, but are not expected in the period immediately following the end of lockdowns.”
World stock markets have rallied nearly 36% from March lows on hopes for a swift recovery from a pandemic that has killed nearly 375,000 people and crushed global growth as countries shut down to try and slow the virus’ spread. May Purchasing Managers Index data pointed to a fragile but encouraging recovery in global manufacturing, raising hopes that the worst is over.
The rally has come despite a slew of risks still on the horizon, including tense U.S.-China relations that may jeopardize a hard-won trade deal. The increasingly violent demonstrations across U.S. cities are another worry traders appear to be taking in stride.
“The main focus once again appears on the longer-term prospects of the easing of lockdowns across the world, though if the violence on U.S. streets continues for much longer, U.S. investors might have to cope with a lockdown of a different kind, imposed by the National Guard,” said Michael Hewson, an analyst at CMC Markets.
Bunds traded mixed amid a modest rise in the front end of the curve and an decline in the long end; ECB’s PEPP breakdown is due later Tuesday.
In FX, the Bloomberg Dollar index fell a fourth consecutive day and was at multi-month lows against most major currencies following a 5% drop for its main index in recent weeks. The euro got as high as $1.1160 on Tuesday, Britain’s pound topped $1.2530 for the first time in over a month and the Canadian and Australian dollars both rose around 0.4% as commodity markets continued their recoveries.
The Australian dollar held near a four-month high after the central bank left rates unchanged and indicated the impact from the coronavirus may not be quite as bad as earlier expected. The euro neared 1.12 against the dollar as equity markets rallied; The pound advanced to a month high following a report the U.K. may be willing compromise with the European Union in trade negotiations that resume on Tuesday. New Zealand dollar hovered around an almost 2-month high versus the greenback; the nation could remove most of its remaining restrictions on people and businesses as soon as next week after successfully wiping out the coronavirus. Oil edged higher toward $36 a barrel as the market waited to see if OPEC and its allies will extend record production curbs. The yen was sold in response to gains in Japanese stocks as the currency remains vulnerable to any increase in risk-on sentiment.
In commodities, Brent rose another 2% to just over $39 a barrel as traders expected major producers to extend output cuts at an OPEC+ meeting later in the week. U.S. crude was up 1% at $35.86 a barrel. Copper prices were at their highest in nearly three months on signs that demand from top metals consumer China was recovering. Stockpiles dropped at the fastest pace last week since September 2017, data showed. Aluminum producer Rusal said its customers were gradually returning after a major slump in April.
“This is real demand. Domestic investment is booming，especially in infrastructure. Supply and transport slowdowns from South America are also supporting prices,” said a copper trader in China.
Looking ahead, some of the key events coming up include the ECB which is expected to top up its rescue program with an additional 500 billion euros of asset purchases at a meeting on Thursday. Anything less than an expansion would be a big shock, Bloomberg Economics said. On Friday, the U.S. labor market report on Friday will probably show American unemployment soared to 19.6% in May, the worst since the Great Depression.
There is no major economic reports today, CrowdStrike and Zoom Video are among companies reporting earnings.
Market Snapshot
S&P 500 futures up 0.3% to 3,064.50
STOXX Europe 600 up 1.5% to 359.32
MXAP up 1% to 154.77
MXAPJ up 0.9% to 492.78
Nikkei up 1.2% to 22,325.61
Topix up 1.2% to 1,587.68
Hang Seng Index up 1.1% to 23,995.94
Shanghai Composite up 0.2% to 2,921.40
Sensex up 1.5% to 33,802.34
Australia S&P/ASX 200 up 0.3% to 5,835.09
Kospi up 1.1% to 2,087.19
German 10Y yield fell 1.7 bps to -0.419%
Euro up 0.3% to $1.1165
Italian 10Y yield rose 1.1 bps to 1.316%
Spanish 10Y yield fell 2.4 bps to 0.553%
Brent futures up 2.1% to $39.11/bbl
Gold spot up 0.1% to $1,741.77
U.S. Dollar Index down 0.3% to 97.57
Top Overnight News from Bloomberg
President Donald Trump threatened to deploy the U.S. military to end “riots and lawlessness” across the country in a Rose Garden address punctuated by the sound of explosions as federal officers dispersed peaceful demonstrators just outside the White House gates
Boris Johnson plans to re-set his government’s agenda with a major speech and a financial statement to prepare the U.K. for the new reality after the coronavirus pandemic. Amid forecasts of the worst recession in 300 years, Chancellor of the Exchequer Rishi Sunak is drawing up options to bolster the economy after the government withdraws its vast package of financial support in the months ahead, according to people familiar with the matter
New York Governor Andrew Cuomo warned that mass protests against police violence risked accelerating the spread of coronavirus and could undo weeks of social- distancing efforts. The state imposed an overnight curfew Monday even as deaths there fell to their lowest daily level since March. Gilead Sciences Inc.’s treatment remdesivir showed only a limited benefit in a large trial
Oil traded without direction for a second day as the market waited to see if OPEC and its allies will extend record production curbs
German Chancellor Angela Merkel will seek to broker a compromise Tuesday on a second stimulus package to help Europe’s biggest economy recover from the deep recession caused by the coronavirus
Amid forecasts of the worst recession in 300 years, the U.K. Chancellor of the Exchequer Rishi Sunak is drawing up options to bolster the economy after the government withdraws its vast package of financial support in the months ahead, according to people familiar with the matter
U.K. house prices fell 1.7% m/m in May, the most in more than a decade as the coronavius lockdown shuttered the housing market, according to Nationwide Building Society
France’s Finance Minister Bruno Le Maire said the economy will shrink 11% this year, more than the 8% previously predicted, and that it means France must continue with emergency support and pro-business reforms, and not raise taxes that could choke off growth
Asian equity markets traded with cautious gains following the positive performance on Wall St but with upside limited after US President Trump’s announcement that he will deploy military forces in response to the riots which triggered a mild pull-back in US equity futures. ASX 200 (+0.3%) and Nikkei 225 (+1.2%) were positive but with the gains in Australia capped by weakness in mining names and amid a largely uneventful RBA rate decision where the central bank kept rates unchanged and provided no major fireworks as expected, while Japanese exporters were bolstered by recent favourable currency flows. KOSPI (+1.1%) was also underpinned despite the weak Final Q1 GDP data which was revised higher from the preliminary reading but still showed the worst contraction since 2008 with Q/Q at -1.3%, although notable strength was seen in the top shipbuilders after Qatar Petroleum signed a KRW 23.6tln agreement with Daewoo Shipbuilding, Hyundai Heavy Industries and Samsung Heavy Industries for more than 100 ships. Elsewhere, Hang Seng (+1.1%) and Shanghai Comp. (+0.2%) were mixed with the mainland indecisive after the PBoC liquidity drain and due to ongoing US-China tensions, although it was also reported that the PBoC will purchase some bank loans issued to small firms in an effort to bolster lending, which it expects could spur about CNY 1tln of new unsecured loans. Finally, 10yr JGBs were initially marginally higher after a rebound off support near 152.00 and amid a similar recovery observed in T-notes from the prior session’s bear steepening and Amazon’s USD 10bln offering where the order book rose to above USD 30bln, although weaker results from the 10yr JGB auction later hampered prices.
Top Asian News
Abu Dhabi Said to Near Pipeline Deal With GIP-Backed Group
Bain Capital, Cyrus Emerge as Final Virgin Australia Suitors
‘New Era’ for China-Japan Ties Dissipates Over Trump-Xi Fight
Europe stocks continue to plough higher [Euro Stoxx 50 +3.6%] as the region built on the positive APAC handover, and with sentiment somewhat underpinned by the Foreign Ministry stating that they have no information regarding the US soybean halt leaked by sources yesterday. Europe sees more noticeable gains now that the DAX (+3.9%) joins the fray following a long weekend, and with US riots somewhat hampering gains in US futures. Cash bourses have tested several key levels, with DAX briefly breaching 12k, FTSE 100 topping 6200, Euro Stoxx 50 trading above 3150 and IBEX rising above 7400 in a fleeting move. German specifically, awaits updates from Chancellor Merkel this afternoon who is looking to agree a compromise around a second stimulus package. Sectors are mostly in the green with cyclicals heavily outpacing defensives. Energy outperforms whilst Healthcare and Consumer Staples lag. The breakdown also sees risky sectors topping the charts with Auto, Insurance, Banks and Oil & Gas among the top performers. Meanwhile, Travel & Leisure descended from its earlier top spot but remains in firm positive territory. In terms of individual movers, Lufthansa (+5.8%) opened higher by almost 9% amid the Co’s board approving revised terms for their EUR 9bln bailout. Bayer (+5.0%) remains supported this morning with the Co’s Glyphosate dispute progressing to the next phase today, with the first hearing before the Court of Appeals to occur today in San Francisco at 17:00BST. Elsewhere, Airbus (+5.1%), Safran (+3.6%), Thales (+2.2%) all glean support from an anticipated support package for the French aeronautical sector.
Top European News
Merkel Lines Up as Much as 100 Billion Euros More in Stimulus
France Says Virus Recession Will Be Deeper Than Expected
World’s Biggest Jewelry Firm Moves to Recycled Gold, Silver
Boris Johnson Revamps Agenda for Worst Recession in 300 Years
In FX, AUD/GBP/NZD – The Aussie has now extended its rally to fresh multi-month highs in wake of the RBA’s latest policy meeting that reaffirmed wait-and-see guidance and was accompanied by a less downbeat economic outlook based on some sectors re-opening from COVID-19 lockdown sooner than previously envisaged. Moreover, the Q1 current account surplus beat consensus and net export contribution firmer than forecast, suggesting an upside bias for Wednesday’s GDP data and all helping to lift Aud/Usd through 0.6865, while Aud/Nzd has rebounded over 1.0800 again and towards 1.0875 amidst various offers in Nzd/Usd just above 0.6300. Note also, the Kiwi has been hampered by a bigger than expected decline in NZ Q1 terms of trade and further, albeit less pronounced weakness in building consents. Conversely, the Pound continues to claw back May’s largely seasonal losses with Cable now above 1.2550 and testing the 200 DMA (1.2571 vs 1.2575 at best thus far), but Eur/Gbp retreating further from yesterday’s 0.9000+ peaks to sub-0.8900 at one stage on the back of some positive reports indicating leeway on the UK side of the Brexit divide on fishing and the level playing field if the EU softens its stance on regulatory alignment and fishery access.
EUR/CAD/DXY – The Euro and Loonie are taking advantage of deeper US Dollar depreciation, as the index clearly breaches Fib support (97.837), the psychological 97.500 level and the next downside chart target at 97.446 (March 16 low) before finding a few underlying bids ahead of 97.400. In contrast, Eur/Usd has now overcome resistance between 1.1163-67 and eyeing 1.1200, while Usd/Cad is testing 1.3500 with some assistance from crude climbing on OPEC+ output cut extension momentum, though oil prices paring back from circa Usd36.50 and Usd39.50 for WTI and Brent respectively on talk that Russia and other producers prefer 1 month on top of the current 2 that expires at the end of June.
CHF/JPY/SEK – Relative G10 underperformers or laggards, as the Franc retreats below 0.9600 vs the Buck and under 1.0750 against the Euro after a sharp fall in Swiss retail sales, modest recovery in the manufacturing PMI and fairly tame rises in weekly sight deposits. Similarly, the Yen has reversed from 107.50+ to within a whisker of Monday’s 107.85 low amidst a broad recovery in risk sentiment after China denied knowledge of any suspension of soy purchases from the US under the terms of the Phase 1 trade deal, while the Swedish Crown has faded into 10.4190 vs the Euro following a downbeat NIER business survey.
NOK/EM – The Norwegian Krona is outpacing its Scandi and Eurozone counterparts due to the aforementioned buoyancy in oil and with the manufacturing PMI not far from the key 50.0 level, while EM currencies are firmer across the board on a combination of renewed risk appetite and the ongoing Greenback weakness noted above.
In commodities, WTI and Brent futures extend on gains amid the broader risk appetite coupled with USD softness heading into the OPEC+ confab, albeit a date and timing are yet to be confirmed. Participants will be eyeing whether OPEC continues its current deal of tapering cuts from July or extend this. Saudi is reportedly vying for current cuts of around 10mln BPD to be extended to year-end, while Russia is opting for a one-month extension to the existing curbs, according to sources. Many believe that middle ground is likely to be found between the two nations at the next meeting. Some also advise on keeping US influence on the radar, given how the US President and oil-state Republicans welcomed Saudi’s over compliance. “We do not entirely rule out that OPEC+ could extend the 9.7 mb/d cut for the duration of 2020, especially if President Trump makes the specific ask and offers sufficient inducements”, RBC writes. WTI July eyes USD 36.50/bbl (vs. low 35.28/bbl) whilst the Brent August takes aim at USD 40.0/bbl, having printed a base at 38.26/bbl. Elsewhere spot gold does not see much action despite the DXY’s continuing decline amid fighting forces with investors shifting to riskier assets whilst a weaker USD keeps the yellow metal buoyed around USD 1740/oz. In terms of base metals, copper tracks stocks higher with participants also noting that focus for the metals remain on the demand prospect from reopening economies.
US Event Calendar
Wards Total Vehicle Sales, est. 11.1m, prior 8.58m
DB’s Jim Reid concludes the overnight wrap
In spite of what was some generally negative newsflow yesterday, global markets continued to climb as hopes for further economic recovery gathered more momentum. Indeed, by the end of the session, the S&P 500 was up a further +0.38% at its highest level since the pandemic hit, while the NASDAQ was up +0.66%, a move that left the tech index less than 3% off its all-time closing high back in February. Similar to last week, some industries that underperformed early in the pandemic were the top performing industries in the S&P 500 with Autos up +3.25%, Real Estate up +2.10% and Banks up +1.96%. This comes as some higher-growth industries like Pharmaceutical Biotech (-1.51%) and Semiconductors (-1.16%) lagged on the day.
This is a continuation of the rotation out of “growth” stocks and into more “value” oriented securities that we saw last week. Our Head of Asset Allocation, Binky Chadha, highlighted this in a report last week looking at the strength of the mega-cap growth stocks through the last two months. These 10 Mega-cap growth stocks (MCG) make up 27% of the S&P 500’s market cap and have surpassed their pre-Covid-19 peak. MCG stocks are those with a market cap over $150bn today and returning more than 20%+ annually for the last 5+ years. They are Microsoft, Apple, Amazon, Google, Facebook, Visa, Mastercard, Netflix, Nvidia and Adobe. Year-to-date MCG stocks are up roughly 15% through the end of last week, compared to the S&P 500 ex-MCG which is down around 15% and had been range-bound since mid-April before a small pick up last week. Meanwhile, the large cap growth stocks continued rallying during that period, having also outperformed on the way down (-26% compared with – 36% for the rest). These ten stocks that have buoyed the S&P 500 have benefitted from the pandemic as we’ve seen accelerating trends towards e-commerce, cloud migration, digital payments and online content production. However Binky has moved from an implicitly overweight position on MCG in his sector allocations, to neutral as the valuations are now fully pricing the upside. Specifically he has moved Tech from overweight to neutral, while also increasing exposure to cyclical growth by moving the Financials, Industrials, and Energy sectors to overweight. See the full piece here.
Back to markets and Europe out-performed yesterday even as a number of countries including Germany were closed. The FTSE 100 (+1.48%) and the CAC 40 (+1.43%) managed to start the month with strong performances. Interestingly the pound gained +1.26% against the dollar, its best day since the 27 March. Along similar lines 10yr Gilt yields rose +4.7bps to 0.23%, the largest one day rise since early April. Sterling has now risen in 5 of the previous 6 sessions, and is nearly at 4 week highs ahead of another round of Brexit negotiations today between the UK and the EU on their future relationship. The rally coincided with news that PM Johnson is going to unveil a major fiscal event in the coming weeks. So maybe markets liked the potential growth element of what that might mean rather than how it might be paid for.
A quick check on markets this morning shows the Nikkei (+1.09%), Hang Seng (+0.38%) and Kospi (+0.75%) all up while bourses in China are flattish. Futures on the S&P 500 are down -0.54% however after President Trump called on governors and mayors to “dominate the streets” and announced that he was sending thousands of heavily armed military personnel into the nation’s capital to quell the unrest.
In other overnight news, Bloomberg reported that the OPEC+ is likely to discuss a short extension of their production cuts to maintain record output curbs for an extra one to three months, a proposal favoured by Saudi Arabia and its Gulf allies. However, the delegates are still wrangling to settle on a new date for meeting after the idea of bringing forward the meeting by a few days to June 4 was first floated. WTI oil prices are trading up +0.51% this morning at $35.62. Meanwhile, the PBOC said overnight that it will temporarily purchase loans made to small businesses from some local banks, a new policy to aimed boost the supply of lending to the real economy.
Back to yesterday, and as markets continued to rally it was interesting that Gilead fell -3.43% as they announced results from a Phase 3 trial of remdesivir for patients with moderate Covid-19. While they found that patients in the 5-day treatment group “were 65 per cent more likely to have clinical improvement at Day 11 compared with those in the standard care group”, it was also the case that the group receiving the 10-day treatment course didn’t see a statistically significant improvement.
The other story in the background in recent days has been the increase in tensions between the US and China, and yesterday Bloomberg reported that Chinese government officials had told state-owned traders Cofco and Sinograin to stop their purchases of some US farm goods as China took stock of the current escalation in tensions. The decision certainly raises questions as to the fate of the Phase One trade deal between the two, which was only signed in January, and follows President Trump’s criticisms of China on Friday. Speaking of trade, it is worth highlighting that the US trade representative Robert Lighthizer is scheduled to speak on Thursday June 4 at the Economic Club of New York (2pm to 2:45pm). The topic is “next steps and potential outcomes for trade talks around the world in the midst of the Coronavirus pandemic”. So one to watch.
Elsewhere in Europe, we got two notable reports from MNI. The first was on this week’s ECB meeting, where they reported sources who said that many members of the Governing Council would oppose adding to their €750bn Pandemic Emergency Purchase Programme. There seemed to be an acknowledgement that it would eventually get extended, but a senior Eurosystem official said that doing so just 3 months into a programme due to last for 9 would appear “a little bit panicky”. The other report was on the European Commission’s proposal for a €750bn recovery fund, which said that the so-called “Frugal Four” member states (Austria, Denmark, the Netherlands and Sweden) would issue a list of their objections in the coming days. The plan would need to be decided by unanimity, so these states clearly have a potential role to play here.
Against this backdrop sovereign debt sold off across Europe, with yields on 10yr bunds climbing +4.5 bps to close at around -0.40% for the first time since mid-April. It was a milder move for US Treasuries, with 10yr yields rising by +0.7bps to 0.659%. Even with the MNI stories there was a further narrowing in peripheral spreads, with those on 10yr Italian and Spanish debt tightening by -3.5bps and -3.1bps respectively.
What might have encouraged optimism yesterday were the manufacturing PMI numbers, which showed some improvement from the dire numbers back in April. The overall number for the Euro Area was revised down a tenth from the flash reading to 39.5, but this was still up from the 33.4 reading back in April. In addition, all the other European countries reporting showed an improvement into May. Rather surprisingly, the strongest European reading was actually in Italy, where the PMI rose to 45.4 (vs. 36.8 expected). Nevertheless, it’s worth bearing in mind that 45.4 is still below the 50-mark that separates expansion from contraction, so we shouldn’t get too excited yet. It was also the country that had the worst starting point. We also saw the ISM manufacturing number from the US yesterday, which rose to 43.1 in May, up from 41.5 in April. However, as with the PMIs this is still pretty bad in absolute terms, even if it’s an improvement from April.
It’s a pretty quiet schedule over the day ahead, with much of the attention on the aforementioned Brexit talks. Data includes UK mortgage approvals and consumer credit for April.
via ZeroHedge News https://ift.tt/2MofjkA Tyler Durden
Mutliple Dead/Injured As Rioters Target Cops After Trump’s Threat Of Military Force Fails To Deter 7th Night Of Violence Tyler Durden
Tue, 06/02/2020 – 07:45
Summary:
President Trump threatens to deploy military
At least nine dead, +4,000 arrested, riots rage in 140 cities as riots rage for the seventh day
National Guard deployed in 23 states
40 cities to impose strict curfews
* * *
Update (0830ET): Last night saw the worst of the violence aimed at police officers with one dead, at least five shot, and at least four more run over by “protesters.”
At least five U.S. police were hit by gunfire during violent protests over the death of a black man in police custody, police and media said, hours after President Donald Trump said he would deploy the military if unrest does not stop.
-One US Marshall killed in Las Vegas
-Four officers shot in St. Louis
-At least two officers run over in Buffalo, NY
-One NYPD officer run over in the Bronx
-Another run over in Greenwich Village
An emotional St Louis police commissioner, John Hayden, said about 200 protesters were “jumping up and down like crazy people”, looting and throwing fireworks and rocks at officers.
Hard to describe how rampant the looting was tonight in Midtown Manhattan and how lawless it was. Complete anarchy. Literally hundreds of stores up and down Broadway, Fifth Ave, Sixth Ave. Kids ruling the streets like it was a party. pic.twitter.com/y9Ly1UD1WX
President Trump on Monday evening threatened to activate federal troops if governors and city mayors did not act to suppress continuing social unrest across major metros over the killing of George Floyd.
After the president spoke, the situation across the country rapidly deteriorated into the evening, as riots continued for the seventh straight day.
Protests were organized in more than 200 cities. Many of the demonstrations began peacefully but turned violent by evening. About 140 cities saw riots, resulting in government officials in 40 metro areas to impose strict curfews. New York City issued its first curfew on Monday, which was the first time an official curfew was imposed in the city since 1943.
At the moment, and growing by the day, 23 states and the District of Columbia have activated National Guard troops to support local law enforcement in restoring order. Customs and Border Protection flew their military surveillance drone on Monday afternoon, though our report didn’t specify if it was monitoring unrest in any city. However, it appeared the drone was conducting a mock surveillance mission of a metro area.
Deaths connected with social unrest continues to grow. Here’s the tally so far according to AP News:
Louisville
As local police and the National Guard sought to disperse a crowd early Monday, they heard gunshots and returned fire, killing the owner of a barbecue restaurant, David McAtee. The mayor has since terminated the city’s police chief after finding out that officers on the scene did not activate their body cameras. The state police and the U.S. attorney also are investigating.
The 53-year-old McAtee was an African American man known for offering free meals to officers who stopped by.
“We lost a wonderful citizen named David McAtee,” Louisville Mayor Greg Fischer said. “David was a friend to many, a well-known Barbecue man.”
The protests in Louisville have centered not just on Floyd’s killing but also the death of Breonna Taylor, a black woman killed in her home in Louisville in March. The 26-year-old EMT was shot eight times by narcotics detectives who knocked down her front door as they attempted to enforce a search warrant. No drugs were found in the home. – AP
Oakland
A federal law enforcement officer was providing security at the federal courthouse in Oakland during a protest when someone fired shots from a vehicle.
Dave Patrick Underwood, 53, died and another officer was critically injured in the shooting.
It was not immediately clear if the drive-by shooting was related to the protests, though the federal building’s glass doors were smashed and the front entrance was sprayed with anti-police graffiti.
Underwood, who was black, and the other officer were contracted security officers and employed by the Department of Homeland Security’s Federal Protective Service; they were monitoring a nearby protest.
No one has been arrested and a motive for the shooting has not yet been determined.
Underwood was the brother of Angela Underwood Jacobs, recently a Republican candidate to fill a vacant U.S. congressional district north of Los Angeles. -AP
Indianapolis
Two people were killed over the weekend amid unrest in Indianapolis, including 38-year-old Chris Beaty, a former offensive lineman for Indiana University.
Beaty was known as “Mr. Indianapolis” and remained involved with the Hoosiers long after his graduation. He also was a prominent businessman in the city and ran multiple nightclubs.
“I am at a loss for words. The news of the passing of Chris Beaty is just devastating,” coach Tom Allen said in a statement. “Since I returned home to coach at Indiana, Chris embraced me, encouraged me and supported me! His passion for life and Indiana Football energized me every time we were together.”
The circumstances of his shooting weren’t immediately clear but some media reports said it happened near an apartment where he lived. It also occurred the same night that an 18-year-old man also was fatally shot as protests broke out in the city. -AP
Minneapolis
In what is believed to be the first killing since the protests broke out, a 43-year-old black man was fatally shot outside a pawn shop as rioting broke out last week in Minneapolis and then spread nationally.
The owner of the pawn shop, who is white, was arrested in the death of Calvin L. Horton Jr. Police say they are investigating the circumstances surrounding the killing, including whether it was related to protests in the neighborhood.
The shop was described as having been significantly damaged during unrest. – AP
Omaha, Nebraska
A 22-year-old black man was killed after authorities said he tussled with the owner of two bars in downtown Omaha. Surveillance video of the strip of bars shows a group of people, including James Scurlock, approach bar owner Jake Gardner.
Two people are seen on the video tackling Gardner, who ended up on his back and fired shots in the air. Seconds later, Scurlock is seen tackling Gardner, who then fires the gun over his shoulder, striking Scurlock.
Authorities have declined to press charges, calling the shooting self-defense. -AP
Detroit
A 21-year-old man was killed in downtown Detroit after someone fired shots into a vehicle during a protest. According to a police report, the man was sitting in the driver’s seat of a car in a parking lot with two others when someone fired shots into the vehicle and then fled on foot. -AP
Chicago Suburb
Two people were killed during unrest Monday in the Chicago suburb of Cicero, according to a town official. Spokesman Ray Hanania did not provide details about those who were killed but said it happened amid protests there. -AP
Here are some of the most important developments from the overnight:
President Trump threatens to deploy military if states and cities don’t squash social unrest
Washington, Baltimore and New York unrest continues to worsen
Helicopters buzz protesters in downtown Washington, DC
NYPD officer hit by a car in the Bronx
Las Vegas police officer shot during protests
Two officers hit by a car in Buffalo during protests
Four St. Louis officers shot during protests
“This is how nations collapse”: Fox News’ Tucker Carlson slams Trump’s response to protests
Pelosi, Schumer condemn President Trump for tear-gassing protesters outside White House
National Guard forces activated in 23 states and Washington, DC
40 cities and Washington, DC, have imposed curfews
Looting intensifies in Manhattan
Protests worsen in Los Angeles and Oakland
In the past seven days, at least nine people have died, +4,000 arrested, riots rage in 140 cities, hundreds (or maybe thousands of stores looted), commercial and government buildings burned, and National Guard deployed in 23 states — here are some of the scenes of the chaos from the overnight:
Looting seen in New York City and Los Angeles as curfew nears and protests/looting spread to the suburbs around the nation. High-end stores like Bloomingdales, Gucci, Nike Soho, Chanel, Tory Burch, Kate Spade were all vandalized. Best Buy in Union Square and several drug stores were also hit.
Chaos already by Union Square. Looters pouring in and out of boarded up Zumiez apparel store. Nearby, people are jamming sneakers and clothes into their backpacks. It’s like a shopping spree. #nyc#lootingpic.twitter.com/zT9En6Y5DE
See how a Car hits a NYPD officer, see how his body flies in air and then falls on the ground.
What kind of justice this is for #GeorgeFloyd ?pic.twitter.com/PTCu5BxuIC
#BREAKING: Video shows SUV plowing into officers at Floyd protest in Buffalo, New York, running over at least 1, then speeding away pic.twitter.com/jlyvZskTfB
I touched on this briefly in my looting/shooting post, but I thought I’d elaborate a bit more (especially since the commenters seemed to be interested in both the legal and moral aspects of this question). Note that this is, as usual, not specific legal advice, but just a general layout of how various American courts deal with the matter; many of the rules, as you’ll see, vary sharply among states, and often turn on specific factual details. (I say “you” below for clarity and convenience—I hope none of you has to actually do any of this.)
[1.] In all states, you can use deadly force to defend yourself against death, serious bodily injury (which can include broken bones and perhaps even lost teeth), rape, or kidnapping, so long as (a) your fear is reasonable and (b) the danger is imminent (requirements that also apply to the doctrines I discuss below). For instance, you should be able to use deadly force against someone who is trying to burn down your home, since that threatens you with death or serious bodily harm. You should be able to do the same against someone who is trying to burn down your business, though with possible limitations involving the duty to retreat in the minority of states that recognize such a duty.
But in nearly all states, you can’t generally use deadly force merely to defend your property. (Texas appears to be an exception, allowing use of deadly force when there’s no other way to protect or recapture property even in situations involving simple theft or criminal mischief, though only at night, Tex. Penal Code § 9.42; see, e.g., McFadden v. State (Tex. Ct. App. 2018).) That’s where we get the conventional formulation that you can’t use deadly force just to defend property.
[2.] This conventional formulation, though, omits an important limitation: In basically all states, you can use nondeadly force to defend your property—and if the thief or vandal responds by threatening you with death or great bodily harm, you can then protect yourself with deadly force. So in practice, you can use deadly force to protect property after all, if you’re willing to use nondeadly force first and expose yourself to increased risk.
And in some states, you don’t even need to expose yourself to such increased risk, if you reasonably fear at the outset that nondeadly protection of property would be too dangerous. In those states, to quote the Model Penal Code formulation (which some have adopted), deadly force can be used if
the person against whom the force is used is attempting to commit or consummate arson, burglary, robbery or other felonious theft or property destruction and either:
[a] has employed or threatened deadly force against or in the presence of the actor; or
[b] the use of [nondeadly] force to prevent the commission or the consummation of the crime would expose the actor or another in his presence to substantial danger of serious bodily injury.
Note the requirement, in at least this version, of felonious theft or property destruction.
[3.] And that’s just for garden-variety theft and property damage. When the theft or vandalism is aggravated in certain ways, many states allow for still more deadly force.
[A.] In about half the states you can use deadly force against robbery, which generally includes any theft from the person that uses modest force or a threat: “Even a purse snatching can constitute a robbery if the victim simply resists the effort to wrest the purse away.” Some robbery of course does also create a reasonable fear of death or serious bodily injury, but in these states such a fear is not required.
[B.] In some states, there is a rebuttable presumption that you reasonably fear death or great bodily harm—and may thus use deadly force—if the target is (to quote the Iowa statute),
Unlawfully entering by force or stealth the dwelling, place of business or employment, or occupied vehicle of the person using force, or has unlawfully entered by force or stealth and remains within the dwelling, place of business or employment, or occupied vehicle of the person using force.
This is just a presumption, but to rebut it the prosecution would generally have to prove beyond a reasonable doubt that you didn’t actually reasonably fear death or great bodily harm in such a situation.
This, of course, is just the tip of the iceberg: There are various limitation to these rules (e.g., if you’re actually the initial aggressor, or if you know there’s a good-faith dispute about the ownership of the property), and I’ll note again that the rules and their interpretation can vary sharply from state to state. But this is the big picture, which I think helps show the complexity of this area of the law.
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There’s a lot going on in the country right now. But for law professors and others interested in legal academia who want a distraction, here’s the third episode of my new show The Legal Academy. The guest is Sarah Lawsky of Northwestern Pritzker School of Law. Topics include Sarah’s invaluable entry-level hiring report; the world of tax scholarship and how it’s different from other fields (and how to evaluate tax scholars if you aren’t one); lateral hiring and visits; and being an associate dean.
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There’s a lot going on in the country right now. But for law professors and others interested in legal academia who want a distraction, here’s the third episode of my new show The Legal Academy. The guest is Sarah Lawsky of Northwestern Pritzker School of Law. Topics include Sarah’s invaluable entry-level hiring report; the world of tax scholarship and how it’s different from other fields (and how to evaluate tax scholars if you aren’t one); lateral hiring and visits; and being an associate dean.
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