The Fourth Amendment Is Supposed to Work for the People, Not the Government (New at Reason)

Young America fought a revolution against its colonial master, in great part to get rid of the system of general warrants which allowed the government to search and seize the property of private citizens without individualized suspicion or probable cause.

When the war was won and the constitution written, Andrew Napolitano writes, “The Fourth Amendment was expressly written to protect our individual right to privacy from the voracious and insatiable appetite of government to assault it.”

In his new column, Napolitano argues that when FBI Director James Comey recently testified before a Senate committee to make the case that the Bureau should have access to citizens’ internet browser history, Comey effectively said “the Fourth Amendment is a pain in the neck and his agents could operate more efficiently without it.”

To which Napolitano retorts, “Wake up, America. The Fourth Amendment is supposed to be a pain in the neck for the government.”

View this article.

from Hit & Run

With Daily Record Lows, Here Is A Chart OF German Bund Yields Since 1977

Whether it is due to rising, or receding, fears of Brexit, earlier today UK Gilts joined the global club of record low government bond yields. As the FT noted earlier, Gilt yields have followed where JGBs and German Bunds led, hitting a new record low of 1.222% today on the back of the relentless rush for fixed income and central bank frontrunning. the 10-year Gilt yield dropped 3 bps today to a new record low, surpassing the previous low of 1.225 per cent seen in February.

According to the WSJ, “England has been issuing debt for centuries: The Bank of England was founded in 1694 to finance King William III’s wars with France. The 10-year bond is a relatively recent phenomenon—much early government debt had no fixed repayment date—but today’s yields appear unprecedented.”

According to Bank of England data, “medium-dated” government yields—a rough proxy for the 10-year bond—fell below 2% in 1946. They then rose in the postwar years, and the 10-year bond crested above 16% in the 1970s and again in the early 1980s. In the 1990s, they returned permanently—so far—to single digits.

On Tuesday, the U.K. sold a 30-year bond with a yield of 2.095%, the lowest average auction yield ever for that maturity. A similar bond auctioned in April yielded 2.345%. And Switzerland announced it will be issuing 13-year bonds with a 0% coupon, the lowest on record.  It is difficult to assess how the pending British referendum on its membership in the European Union is affecting bond yields. On the one hand, a vote to leave may cause economic disruption; on the other, investors appear to be betting that the central bank will cut rates if there is one.

It wasn’t just the UK. As the WSJ adds, yields on the 10-year government debt of Germany and the U.K. fell to all-time lows, a stark demonstration of the modern era of scant inflation, weak growth and outsize monetary policy. Government-bond yields have been slumping for a year across the developed world. Tuesday’s decline came after tepid U.S. jobs data on Friday spurred concerns that the global economy would remain weaker for longer. Which apparently was also enough to send the S&P just shy of new all time highs.

But the start attraction remain German Bunds where the yield on 10-year German bunds closed at 0.049% on Tuesday and continued to fall on Wednesday, hitting 0.036% in early European trade, according to data from Tradeweb. The 10-year U.K. gilt yield slipped to 1.263% at Tuesday’s close and traded down to 1.256% early Wednesday. Both yields are lower than previous troughs in the first half of last year. A different measure of the U.K. yield from data provider FactSet stood at 1.267% Tuesday. Yields fall as prices rise.

And two stunning statistics: according to Commerzbank almost two-thirds of all German sovereign debt outstanding now yields below minus-0.4%, which makes it ineligible for central-bank purchases. Additionally, as DB adds, Bund yield across the whole curve has gone negative for the first time.

“A bund yielding zero or slightly below zero is a credible scenario in the coming weeks with almost no inflation in Europe and [strong] appetite from the ECB,” said Vincent Juvyns, global market strategist at J.P. Morgan Asset Management. “The bulk of the negative-yielding supply of eurozone bonds will be in the second half of the year,” said Eric Oynoyan, analyst at French bank BNP Paribas. “There’s the potential for a further rally.”

Putting it all together, here is a chart of German bunds since 1977. It needs no commentary.

via Tyler Durden

Futures Slide On Rising Dollar As Global Bond Yields Hit Fresh Record Lows

Please do not adjust your screens: that off-green color you are seeing, that is not a malfunction. Yes, for the first time in six days, global stocks are lower with the MSCI all-country world index dipping from a 6 month high dragged down by lower European and Japanese equity markets, as the USDJPY dropped to a fresh five-week low while Treasury yields continued to hit new record lows because, as Bloomberg explains, “traders assessed the outlook for the global economy.” It is unclear if that means that the outlook is suddenly much brighter. After all, it was last Friday’s recessionary payrolls that sent the S&P soaring to just shy of all time highs, so in this bizarro, centrally-planned “market”, we need more clarification.

The global stocks gauge fell 0.4%, led by telecom and materials shares. The Stoxx Europe 600 Index dropped 1 percent, heading for its biggest slide since May 23. S&P 500 futures expiring this month retreated 0.4%. Markets in China and Hong Kong were closed today,

It also appears the algos have gotten tired of first creating then chasing oil momentum because after hitting almost record overbought levels, oil finally fell and the Bloomberg Commodity Index erased earlier gains, putting it on track for the first decline in seven days after earlier advancing as much as 0.4%. WTI dipped back under $51 following yesterday’s late day algo-driven buying scramble, down 0.9% to $50.78, while Brent dropped 0.3% to $52.34 a barrel.

However, while “risk” assets such as stocks and commodities dipped, bonds rose, with U.K. gilt and German Bunds yields declining to a record low and a Japan 5 year auction pricing at a fresh average record low yield overnight. New Zealand’s currency jumped after the central bank refrained from cutting borrowing costs.

Some more humor: this is what Bloomberg has to say: “Global economic optimism has cooled because of weak U.S. jobs data, a lower growth forecast from the World Bank and the U.K.’s looming referendum on quitting the European Union. Central banks are still pursuing accommodative policies, with the European Central Bank buying corporate bonds for a second day and the Bank of Korea unexpectedly cutting rates.” Oh so it took traders 5 days to spot the “weak US jobs data” and 2 days to finally read the article on the growth forecast cut? Golf clap.

And now some even more fantastic quotes: “Growth still doesn’t look brilliant,” said Peter Dixon, global equities economist at Commerzbank AG in London. “The kind of rally we’ve had in the past few days across most assets doesn’t tend to last very long.” Oh but it can Peter – after all, all it takes is a bunch of lunatic central bankers who are left with nothing to lose and intent on blowing the biggest bubble in history, to keep doing what they do so well (for the full slamdown, read DB’s response). Here, James gets it: “Monetary policy remains accommodative globally and expectations for a rate hike in the U.S. have been pushed back,” James Woods, an analyst at Rivkin Securities in Sydney, said by phone. “That should be supportive of equities.” That’s right James: bad news for millions of US workers – for the 8th year in a row – is great news!

The dollar hit a five-week low against the yen, hurt by falling Treasury yields amid waning expectations that the Federal Reserve will lift interest rates anytime soon. Those expectations saw German 10-year Bund yields hit a low of 0.034 percent, not far from negative territory in which $10 trillions worth of bonds globally already trade at.

Market Snapshot

  • S&P 500 futures down 0.4% to 2101
  • Stoxx 600 down 0.8% to 342
  • FTSE 100 down 0.8% to 6251
  • DAX down 1.2% to 10099
  • S&P GSCI Index down 0.2% to 388.9
  • MSCI Asia Pacific down 0.6% to 132
  • Nikkei 225 down 1% to 16668
  • S&P/ASX 200 down 0.1% to 5362
  • US 10-yr yield down 3bps to 1.68%
  • German 10Yr yield down less than 1bp to 0.05%
  • Italian 10Yr yield down 1bp to 1.38%
  • Spanish 10Yr yield down 2bps to 1.41%
  • Dollar Index up 0.21% to 93.79
  • WTI Crude futures down 0.4% to $51.01
  • Brent Futures down 0.7% to $52.14
  • Gold spot down 0.3% to $1,259
  • Silver spot up less than 0.1% to $17.06

Top Global News

  • Soros Said to Return to Hands-On Trading, Sees Market Shifts: Has been spending more time in the office directing trades and recently oversaw a series of big, bearish investments
  • China’s Factory-Gate Deflation Eases in Capacity-Cut Drive: May producer price index fell 2.8%, least since late 2014
  • UBS to Cut Managers at U.S. Wealth Unit, Recruit Fewer Advisers: Headcount reduction will mostly hit middle and senior managers, including some at main offices in New Jersey, New York
  • Twitter Confident Systems Not Breached By Hackers: Techcrunch: Co. confident that “our systems have not been breached,” TechCrunch says citing a spokesperson responding to reports that >32m Twitter login credentials have been leaked; Ross Hoffman to Run Twitter Media Team: Recode
  • Blackstone Said to Have $200 Million Profit in Hawaii Deal: Hyatt Waikiki Beach resort to sell to Mirae for $780m
  • DOJ Asks Supreme Court to Overturn Apple Patent Ruling: Reuters: DOJ asked the Supreme Court to send Apple, Samsung’s smartphone patent case to trial court for more litigation
  • Ralph Lauren Said to Hire Coach’s Jane Nielsen as CFO: WSJ; Coach CFO Nielsen to Leave Co. to Pursue Another Opportunity
  • Avaya Said to Meet Creditors as It Wrangles $6 Billion Debt Load: Discussions will put co. face-to-face with a group of lenders including Blackstone Group and Apollo Global Management
  • Samsung May Supply Batteries to Tesla Energy, CEO Musk Says: Unit provides electricity storage for homes, businesses
  • Solar Makes Up Most of New U.S. Power Capacity for First Time: Solar accounted for 64% of new capacity, wind added 33%
  • Puerto Rico Bill Faces House Vote Despite Uncertain GOP Support: Republicans will likely need robust support from Democrats to pass the measure
  • Caesars Judge Says He May Not Be Able to Halt Creditor Suits: Casino giant asking for freeze on cases in Delaware, New York

Asia equity markets shrugged off the positive US close and traded cautious with a lack of demand amid several market closures in the region. Nikkei 225 (-1.0%) underperformed on a firmer JPY and weaker than expected Machine Orders in which the M/M figure contracted the most since May 2014. ASX 200 (-0.2%) also suffered from broad-based weakness, although commodity strength stemmed losses after oil prices extended its gains following the DoE inventory drawdown. Elsewhere, the KOSPI (-0.1%) was initially supported following an unexpected 25bps rate cut by the BoK but then conformed to the downbeat sentiment, while mainland Chinese and Hong Kong markets were closed for holiday. 10yr JGBs traded marginally higher amid the risk-averse tone, while the 5yr auction saw the highest b/c since 2014, a narrower tail in price and the lowest accepted price surpassing estimates.

Top Asian News

  • Korea Unexpectedly Cuts Rate to Support Debt Restructuring: Only one of 18 economists in survey correctly picked move
  • Korea Bond Yields Drop to Records as BOK Signals Worst Not Over: BOK Governor Lee Ju Yeol says S. Korea seems to be getting closer to lower rate limit
  • RBNZ Keeps Key Rate at 2.25% as Inflation, Housing Pick Up: Governor Wheeler says further easing may still be needed
  • Tencent Said to Weigh Supercell Deal at $9 Billion Valuation: SoftBank is selling assets to strengthen balance sheet

European shares fell for a second straight day, with a drop in Vodafone weighing on the telecom sector and Essentra hit by a profit warning.  Risk-off tone dictates the state of play in Europe with the Euro Stoxx (-1.1%) seeing heavy losses this morning amid the softness across the commodity complex with WTI crude edging towards USD 51.00bbl . Additionally, the DAX has been one of the underperformers led by utility giant EON (-6.8%) as they go Ex Div. As such, this has underpinned the gains in Bunds, while the 30yr outperforms on the back of duration buying with the yield curve continuing to bull flatten amid the front end lagging with oil prices hovering near 8-monh highs.

Top European News

  • ECB Said to Buy Volkswagen Securities in Second Day of Purchases: Purchases included securities issued by Volkswagen, Continental and Orange, according to a person familiar
  • Draghi Says Economic Cost of Delaying Reforms Too High to Ignore: Called on politicians to help the ECB’s bid to restore economic health to the region by accelerating reforms, comments in speech at Brussels economic forum
  • U.K. House Prices Predicted to Drop for First Time Since 2012: RICS survey shows London home prices already falling in May
  • Dong Valued at $15 Billion Joins List of European IPO Giants: Share sale raises gross proceeds of DKK17.1b
  • Aspen to Buy Anaesthetics From AstraZeneca for $520 Million: Will also pay AstraZeneca royalties and as much as $250m in additional sales-based installments over the next two years
  • Glencore Sells Agri Stake to Canadian Fund for $625 Million: British Columbia Investment Management Corp buys 9.99% stake
  • Telefonica Said to Seek Sale of Argentine TV Broadcaster Telefe: Disposing of non-core assets under new chairman

In FX, the Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, gained 0.3 percent, snapping a two-day drop. The U.S currency strengthened 0.4 percent to $1.1347 per euro and was 0.5 percent weaker against the yen. The kiwi soared as much as 2 percent to 71.48 U.S. cents, its strongest level in about a year, after the Reserve Bank of New Zealand refrained from cutting rates and said it expects inflation to accelerate.  Risk sentiment has been driving FX this morning, with USD/JPY driven lower again to take out the Monday lows at 106.35, but limited follow through below here as we hold comfortably off 106.00 for now Nevertheless, AUD, CAD and GBP have suffered a little in line with this, while NZD has had some of the shine taken off the post RBNZ rally. The EUR/USD slipped back into the mid 1.1300’s. In the GBP, more data proving the UK economy is holding up despite the uncertainty over the Brexit vote in 2 weeks, as the trade deficit narrowed on the month, whilst also exceeding expectations. GBP lower nevertheless, with Cable now in the mid 1.4400’s. Losses proving hard fought though, but this is largely down to lower participation. Another day of slim pickings for US data, with only weekly claims and wholesale inventories to look to, but Wall Street now key for the JPY pairs after the price action see this morning.

In Commodities, WTI and Brent have traded in negative territory in the EU session and this comes in tandem with broad based weakness across the commodities sector with Gold USD 1252.10/oz down 0.37% in EU trade. U.S. crude oil fell 0.9 percent to $50.78 a barrel after hitting a 11-month high of $51.67 a barrel. Brent crude rose as high as $52.86 a barrel, highest since October 2015, but was last trading lower at $52.23 a barrel. Spot gold dropped after hitting a three-week high of $1,266.01 an ounce, while aluminium fell 1 percent after climbing to a one-month high of $1,614.50 a tonne. Copper also fell. “I think gold is going to stay range bound until we see more confirmation. We need more confirmation from labour market data in the U.S. that we get in a month from now. The market wants to see at least two data points,” said Dominic Schnider of UBS Wealth Management in Hong Kong. Silver is also down 0.75%. This morning base metals have been quiet as Chinese markets are closed but copper has edged higher rising 0.7% and an average gain across the board of 1.2%, today’s volumes have been light with 2,597 lots traded.

Looking at today’s calendar, it’ll be interesting to see how last week’s initial jobless claims data comes in (270k expected) in light of the weak payrolls report. Later on this afternoon we’ve also got the April wholesale trade sales and inventories report. Away from the data we’ve got the ECB’s Draghi due to speak at 8am BST this morning where he opens the Brussels Economic Forum so it’ll be worth seeing if anything of interest comes out of that.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities enter the North American crossover lower across the board with risk-averse sentiment gripping the region
  • USD/JPY has been driven lower again to take out the Monday lows at 106.35, but limited follow through below here as we hold comfortably off 106.00 for now
  • Looking ahead, highlights include US Initial Jobless Claims and Wholesale Inventories
  • Treasuries edge higher in overnight trading, global equities and commodities sell off; auctions conclude with $12b 30Y bonds, WI 2.49%, last sold at 2.615% in May, extended a pattern of tails by 30Y refundings.
  • South Korea’s central bank unexpectedly cut the benchmark interest rate to a new record low Thursday, citing growing risks to the economy including slowing global trade and the government’s push to restructure indebted companies
  • The European Central Bank bought corporate bonds in euros for a second day as it expanded its stimulus program for the region’s flagging economy; The bank’s entry into the corporate bond market included buying bonds with junk ratings and saw purchases of notes from troubled German carmaker Volkswagen AG
  • Billionaire investor George Soros has become more involved in trading at his family office, concerned about the outlook for the global economy and the risk that large market shifts may be at hand, according to a person familiar with the matter
  • “Everything is being driven by high liquidity that ultimately is being provided by central banks,” Simon Quijano-Evans, chief emerging-market strategist at Commerzbank AG, Germany’s second-largest lender, said in London
  • UBS Group AG, which said last month it’s looking for ways to cut costs, is eliminating some management positions in its U.S. wealth unit and reducing the number of financial advisers recruited from competitors
  • U.K. exports surged 9.1% in April to their highest level in almost three years as Britain shipped more to countries both inside and outside the European Union

US Event Calendar

  • 8:30am: Initial Jobless Claims, June 4, est. 270k (prior 267k)
  • 9:45am: Bloomberg Consumer Comfort, June 5
  • 10am: Wholesale Inventories m/m, April, est. 0.1% (prior 0.1%)
  • 10am: Wholesale Trade Sales m/m, April, est. 0.9 (prior 0.7%)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: Bank of Canada’s Poloz holds news conference on financial system review
  • 10:30am: EIA natural-gas storage change
  • 12pm: Household Change in Net Worth, 1Q (prior $1.637t)

DB’s Jim Reid concludes the overnight wrap

The post-payrolls and post-Yellen slow grind higher continues for US equity markets with the S&P 500 continuing to edge to within touching distance of that record high. Yesterday it closed up +0.33% and it means we’ve not had a swing of greater than 0.50% either way for the index since May 25th. A fourth consecutive weaker day for the US Dollar seemed to be the trigger with little other newsflow for markets to really feed off. European equity markets had actually edged lower (Stoxx 600 -0.49%) earlier on following a big two-day rally as peripheral banks came under pressure again while those moves in the Bund market were also closely watched. 10y Bund yields actually touched an intraday low of 0.032% only to give up those gains into the close to finish more or less unchanged around 0.053%.

Meanwhile, much of the chatter yesterday was on how much of an impact the start of the ECB corporate sector purchasing program, which kicked off yesterday, would have on markets. Certainly the price action in the European CDS indices was more one of consolidation that anything else with the iTraxx Main and Crossover indices little changed on the day. All of the suggestion was that they were very much active through the secondary market as we’d expected.

Flipping over to Asia now where the latest inflation numbers have been released in China. Headline CPI has printed at -0.5% mom in May, the third straight monthly decline which has had the effect of lowering the YoY rate by three-tenths to +2.0% (vs. +2.2% expected). Another slowdown in food prices appears to have been the main driver there. On the other hand, there was a notable increase in the latest PPI print. Prices rose +0.5% mom last month which has resulted in the YoY rate increasing to -2.8% (vs. -3.2% expected) from -3.4%. Producer prices have actually edged higher for three consecutive months now.

With markets in China and Hong Kong closed today, we’ll have to wait to see what the impact there is although it’s largely a sea of red for markets elsewhere in Asia. The Nikkei (-0.91%), Kospi (-0.22%) and ASX (-0.59%) are all lower while there’s also been some action in the FX market. The Kiwi Dollar has rallied nearly 2% after the RBNZ held rates on hold again with some concern about financial stability risks stemming from the housing market being attributed. Meanwhile the Bank of Korea surprisingly cut its benchmark rate this morning by 25bps to 1.25% after expectations had been that they would stay put. The Won immediately weakened 0.7% post the move but is back to unchanged now.

Elsewhere while both US equities and credit were a smidgen stronger yesterday, Gold actually rallied a robust +1.53% while Treasuries were also well bid with the benchmark 10y yield trading down a couple of basis points to 1.703%. Oil continued its surge too with WTI (+1.73%) rallying hard for the third consecutive day to settle up above $51/bbl now. The latest EIA data showing a decline in US crude stockpiles helped, as did the concerning reports of more wildfires in Canada. Indeed two Canadian oil producers have been forced to halt production only just as output had recommenced and workers have again been evacuated in the Alberta region.

With regards to that JOLTS job openings report yesterday in the US, openings were reported as increasing to 5.79m in April (vs. 5.68m expected) from a downwardly revised 5.67m in March. That put the job opening rate at 3.9% from 3.8%, however the data also showed that the hiring rate dipped two tenths to 3.5% which is the lowest level since August 2014. Given this is one of Yellen’s most favoured series the recent spike lower is significant. Our US economists highlighted yesterday that in their view corporate profit margins may be one source of the weakness in hiring. Indeed they note that corporate profits have been down year-over-year for the last three quarters and they suggest that corporate profit margins have likely peaked in the current business cycle.

Away from this, the only other data of note was out of the UK with a surprisingly bumper industrial production report for April (+2.0% mom vs. 0.0% expected). That was the actually the largest monthly increase since 2012 and has had the effect of lifting the YoY rate to +1.6% from -0.2% in the month prior. Manufacturing production was also up a robust +2.3% mom during the month (vs. -0.1% expected).

Looking at today’s calendar, it’s another relatively quiet one with the only releases of note this morning in Europe being the April trade numbers out of Germany and the UK. Over in the US this afternoon it’ll be interesting to see how last week’s initial jobless claims data comes in (270k expected) in light of the weak payrolls report. Later on this afternoon we’ve also got the April wholesale trade sales and inventories report. Away from the data we’ve got the ECB’s Draghi due to speak at 8am BST this morning where he opens the Brussels Economic Forum so it’ll be worth seeing if anything of interest comes out of that.

via Tyler Durden

NIRP Goes Political For Japan’s Abe As Opposition Party Demands “Withdrawal Of Negative Interest Rates”

It's taken roughly five months, but in addition to having skeptics within the BoJ, NIRP has now encountered political opposition.

Ahead of an Upper House election next month, Shiori Yamao, a former public prosecutor turned policy chief of the Democratic party (the main opposition party to Prime Minister Shinzo Abe's Liberal Democratic Party) is calling for the BoJ to get rid of its negative interest rate policy due to… drum roll… shifting the burden onto savers.

"The Democratic Party wants to call for the withdrawal of negative interest rates. Negative interest rates shift the burden onto savers. They cause unease among smaller companies because they make financial institutions unwilling to loan, or prompt them to call loans in early." Yamao said.

The Democratic Party faces a difficult battle in trying to differentiate itself from Abe's party, and along with calling for NIRP to be rescinded, Yamao is hammering Abe for the decision to delay increasing the sales tax (implicitly admitting Abenomics has failed). The funds from the tax increases were going toward social programs such as bolstering child care to enable mothers to work, and help to the elderly on low incomes. In order to pay for the benefits, Yamao said that regardless of the tax hikes, other bloated areas of spend could be decreased. "We would cut back the wasteful public works which have increased under the LPD government. It's the old pattern of stimulating the economy through public works."

Only 12% of respondents to a poll published June 6 say they plan to vote for the DP in the Upper House election, while 39% will vote for Abe's LDP.

While it doesn't seem that the votes are there yet to change the course of Abenomics, it is important to note that the dismal economic failure of Abenomics has now become a political issue for the Prime Minister to deal with. As we have detailed many times, Abenomics has failed to boost inflation, failed to boost wages, and has plummeted trade to post crisis lows.


JPY is strengthening and Japanese stocks are tumbling…


If as this continues, the political pressure will continue to grow on Abe, as it appears that the people of Japan are beginning to grow tired of the same old same.

via Tyler Durden

Saudis Threaten To Leave U.N. Over Human Rights Criticism In Yemen

Authored by Colum Lynch, originally posted at,

Saudi Arabia threatened this week to break relations with the United Nations and cut hundreds of millions of dollars in assistance to its humanitarian relief and counterterrorism programs to strong-arm the U.N. into removing Riyadh and its allies from a blacklist of groups that are accused of harming children in armed conflict.

The threat — which has not been previously reported — worked, and the U.N. subsequently dropped the Saudis from a rogues’ gallery of the world’s worst violators of children’s rights in conflict zones.

In their Monday warning, senior Saudi diplomats told top U.N. officials Riyadh would use its influence to convince other Arab governments and the Organization of Islamic Cooperation to sever ties with the United Nations, the officials said. The threats were issued in a series of exchanges between top Saudi officials in Riyadh, including Saudi Foreign Minister Adel al-Jubeir, according to U.N.-based officials. The Saudi mission to the United Nations did not respond to a request for comment Tuesday afternoon.

Riyadh was enraged after U.N. Secretary-General Ban Ki-moon included the Saudi-led military coalition in Yemen on a list of countries, rebel movements, and terrorist organizations that killed, maimed, or otherwise abused children in conflict. The 40-page report — which was issued last week and primarily written by Leila Zerrougui, the U.N. chief’s special representative for children and armed conflict — claimed the coalition was responsible for about 60 percent of 1,953 child deaths and injuries in Yemen since last year.

Hoping to mollify the Saudis, Ban issued a statement Monday saying he would remove the Saudi-led coalition from the list, pending a review of the matter by a joint U.N. and Saudi panel. The reversal triggered a wave of criticism of the U.N. from human rights groups, who accused Ban of caving to Saudi intimidation.

“It appears that political power and diplomatic clout have been allowed to trump the U.N.’s duty to expose those responsible for the killing and maiming of more than 1,000 of Yemen’s children,” Sajjad Mohammad Sajid, Oxfam’s country director in Yemen, said in a statement. “The decision to retract its finding is a moral failure and goes against everything the U.N. is meant to stand for.”

The Saudi threat reflects a growing trend by U.N. member states to threaten retaliation against Turtle Bay for challenging their human rights records.

In March, Morocco expelled 84 international staffers from a U.N. peacekeeping mission in the disputed Western Sahara region after Ban characterized the territory as “occupied.” Last year, the United States warned that Congress might cut off funding to the U.N. if it included Israel on the same blacklist of armed entities that killed or injured children in conflict, according to two U.N. diplomatic officials who spoke on the condition of anonymity. In that case, Ban removed Israel from a draft blacklist before it was made public.

Pushing Monday for Riyadh to be delisted, Saudi Arabia’s U.N. ambassador, Abdallah al-Mouallimi, said it was unfair for Israel to be quietly let off the hook, while the kingdom initially was not.

“We have to ask the question: Why was Israel removed from the list last year?” Mouallimi said. “Israel has been guilty of crimes against children that are far in excess of even the inaccurate numbers that report contains about Yemen.”

At the time, Israel said it should not be part of a list that also included outlawed extremist groups like the Islamic State, al Qaeda, and the Taliban. Israel also maintained it continually sought to protect civilians from its warfare with Palestinian armed groups.

Mouallimi said he protested Saudi Arabia’s inclusion on the 2016 list in a face-to-face meeting Monday morning with U.N. Deputy Secretary-General Jan Eliasson and said Ban had shown “wisdom” in striking Israel from the tally in 2015. “We fail to see why he has not exercised the same wisdom in this report this year,” Mouallimi said.

But hours later, Mouallimi praised Ban for seeing the light and reversing his position.

Taking Riyadh off the list “clearly vindicates” the Saudi-led coalition in Yemen, he told reporters. The U.N. decision, he insisted, is “irreversible and unconditional.”

via Tyler Durden

US Says North Korea Has Restarted Production Of Plutonium Fuel

According to the US State Department, North Korea has restarted production of plutonium fuel, indicating that it intends to pursue its nuclear weapons program in defiance of international standards, and tougher UN sanctions that were backed by China in March.

The latest developments suggest North Korea's regime is working to ensure a steady supply of materials for its drive to build warheads, Reuters reports.

The US assessment comes a day after a UN nuclear watchdog said it had indications that Pyongyang has reactivated a plant to recover plutonium from spent reactor fuel at Yongbyon, its main nuclear complex. The website 38 North reported last week, based on commercial satellite imagery, that exhaust plumes had been detected twice in May from the thermal plat at Yongbyon's Radiochemical Laboratory, the site's main reprocessing installation. The Institute for Science and International Security also confirmed reports of exhaust emissions from a chimney at the plant.

"They take the spent fuel from the 5 megawatt reactor at Yongbyon and let it cool and then take it to the reprocessing facility and that's where they've obtained the plutonium for their previous nuclear tests. So they are repeating that process, that's what they're doing." the US offical said, speaking on condition of anonymity.

The country announced last month at a congress of its ruling Workers' Party that it would strengthen its defensive nuclear weapons capability, and although in the past it had obtained key components for its nuclear program from other countries, there was no sign of any recent outside procurement involved in reactivating its plutonium reprocessing said the US official.

There is little proven knowledge about the quantities of weapons-grade uranium or plutonium that North Korea possesses, or its ability to produce either.

From Reuters

There is little proven knowledge about the quantities of weapons-grade uranium or plutonium that North Korea possesses, or its ability to produce either, though plutonium from spent fuel at Yongbyon is widely believed to have been used in its nuclear bombs.


South Korean Defense Minister Han Min-koo said last month the North probably had about 40 kg (88 lb) of plutonium. That would be enough to make eight to 10 bombs, according to experts.


Operating the 5 megawatt reactor could yield about 5-6 kg of plutonium a year, they said.


Experts at the U.S.-Korea Institute at Johns Hopkins University's School of Advanced International Studies in Washington predicted last year that North Korea's nuclear weapons stockpile could grow to 20, 50 or 100 bombs within five years, from an estimated 10 to 16 weapons at that time.

South Korea's Unification Ministry spokesman Cheong Joon-hee said Seoul was closely watching movements related to the North's nuclear facility "with grave concern", and a spokesman for China's Foreign Ministry said "we hope all parties can work hard together to put the nuclear issue back on the track of dialogue and negotiations."

North Korea has already declared itself "a responsible nuclear weapons state" and disavowed the use of nuclear weapons unless its sovereignty is first infringed by others with nuclear arms.

CNN reported in 2015 that North Korea was one of the few countries to have nuclear weapons.

via Tyler Durden

Mervyn King’s Alarmist Warning: “All China’s Assets In The US Might Be Annulled”

What is it about former central bankers who first destroy the fiat system with their monetarist policies, only to go into retirement, and preach the virtues of the one compound they spend their entire professional careers trying to destroy: gold. To be sure, when it comes to polar reversals of opinion, nobody comes even remotely close to Alan Greenspan: the former Fed chairman who is not only instrumental in launching the “Great Moderation”, which unleashed the current unprecedented global debt wave which will lead to unprecedented disaster sooner or later, has in recent years become one of gold’s biggest advocates as demonstrated most recently in “Greenspan’s Stunning Admission: “Gold Is Currency; No Fiat Currency, Including the Dollar, Can Match It.”

Now it’s the turn of his former colleague at the Bank of England, Mervyn King, who in an interview with the WGC’s Gold Investor monthly, pours cold water over Bernanke’s “explanation” that gold is merely a tradition, and says the following:

“I am very struck by the fact that over many many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio. Obviously, there is no high running return, but when unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold,” he adds.”

The then innocently pointed out that when it comes to defense against hyperinflation, gold remains the, well, gold standard:

“It’s still early days to conclude that around the world, governments have found the solution to maintaining price stability with a managed paper currency. We made real progress in the 1990s and early 2000s and a lot of countries went down that road and followed us. But hyper-inflation has clearly not disappeared – the second biggest hyper-inflation in history was in Zimbabwe in this century – so I can understand why holding gold would seem to be a sensible part of a national portfolio. Because there is clearly a need to take some precautions against an unknowable future.”

But the most interesting observation from Mervyn King’s interview comes courtesy of an observation by The Money Trap’s Robert Pringle, who writes the following about “Mervyn King’s alarmist warning“:

According to the World Gold Council, Mervyn King, former governor of the Bank of England, believes that in certain circumstances China’s assets in the US could be “annulled”. Mervyn King’s alarmist warning is  made in an interview, entitled “Present perilous, future imperfect” that appears in the June issue of Gold Investor,  a WGC publication.  After pointing out that “China and other countries do not want to be in a situation where all their iternational assets are in effect dependent on the US”, he is quoted as suggesting that all China’s US assets could be at risk:


“Over the last decade or so, the claims by some emerging market countries on the US have grown. Who knows what the future holds, but China and other countries do not want to be in a situation where all their international assets are in effect dependent on the US. Of course the US would not want to renege on its debts, but if some awful conflagration occurred, then all China’s assets in the US might be annulled. So there are plenty of big concerns that make it extremely reasonable to have assets in your portfolio that are not dependent on the goodwill of other countries.”


The choice of the word “annulled” suggests some kind of deliberate action.  Under what scenario could this be even contemplated?


Does he have in mind some sort of armed conflict? That is suggested by his reference to an “awful conflagration”.   He appears to be suggesting that if China and the US went to war, the US could cancel the Treasuries China owns (only those China owns?) and not repay (nor service the interest) unilaterally.


He does not say so, but of course this would cause all US Treasuries to collapse, and the US would not be able to issue new bonds.


Temporary suspension?


If he means that the US would suspend paying interest or capital on the bonds that it owes to China (and its allies) only while the war went on, then he cannot mean ‘annulled.’


It is fair to point, as he does,  to concerns that make it  reasonable to have assets in a central bank’s portfolio that are not dependent on the goodwill of other countries.

It is also quite legitimate to consider  extreme scenarios other than those mentioned by Mervyn King; e.g. that US fiscal deficits might grow out of control, ending in rapid inflation or even hyperinflation.

But for Mervyn King to say that there are circumstances in which the US could annul its debts is astonishing. Mervyn King’s alarmist warning goes far beyond scenarios outlined in his recent book “The End of Alchemy”

All we can add to this is that with Icahn, Druckenmiller, and Soros, and now Mervyn King too, all warning that major trouble is coming, we are confident that the algos and the 17-year-old hedge fund managers will be right in betting it all on central banks to keep pushing the S&P to new record highs and beyond even as the global economy grinds to a halt.


via Tyler Durden

How Companies ‘Collaborate’ to Rip Off and Get Rid of Workers

By EconMatters




We occasionally cover some of the odd and weird phenomenons in the current corporate America. We are going to categorize them as Workplace NWO (NWO = New World Order). Here is the latest we’ve observed.


The current prevalent corporate slogan is ‘team work’ and problem solving, decision-making through ‘collaborative effort’. On the surface, this represents a healthy evolution of workplace process, like the old saying goes ‘Two brains are better than one”.


However, in our previous post we noted how PIP (Performance Improvement Plan) has become a popular tool used by the new generation of less experienced managers to get rid of high performance, more experienced, ‘black horse’ employees who do not fit into an otherwise mediocre ‘team’. In addition to PIP, there’s another way to still rip the benefit, so to speak, of such employee (after all, you can’t put every such employee on PIP) under the cloak of ‘collaboration’.



Cool, You Got A Project That Nobody Else Can Deliver

In this situation, the high performance ‘black horse’ employee is typically given a challenging project or task that nobody else in the ‘team’ is capable of delivering. The project usually requires recurring deliverable, that is, it is not something you do it one time and leave.


At first glace, this seems to demonstrate manager’s confidence as well as confirmation in this employee’s skills and capabilities. So this more experienced and high performance ‘black horse’ employee gets a moral boost and works hard on the project. The project eventually gets completed with resulting compliments even from higher-ups. A job well done and this employee gets some deserving recognition, everything seems fair and square, right? Not so fast.


Collaborate to Rip Off


As mention before, this is a recurring project. Usually, the most difficult part is to establish a sustainable and repeatable process for product creation and delivery on schedule every and each time. In a more traditional workplace, the recurring portion of the project should also fall under the initial project leader and creator (in this case, the ‘black horse’ employee) to continue managing the ongoing process and deliverable. However, in the ‘modern’ corporate workplace dominated by Gen X and millennial, nothing is done with rules based on standard moral compass any more.



What typically happens is that as soon as the project gets some ‘credibility’ and ‘buzz’ (mostly on the back of that ‘black horse’ employee), the manager goes ‘let’s use the collaborative approach’ and distributes project ownership part and parcel to other junior and mediocre ‘team members’. After all, following (an established process) is much easier than creating.


Lead a Project without Ownership

This means this ‘black horse’ employee is still the ‘project leader’ responsible and accountable for the project outcome, but does not have true project ownership any more. You might ask what is the purpose of the manager doing so? Well, for one thing, the ‘black horse’ employee is still the ‘project leader’, so he or she has to do a lot of work mopping up after other ‘team members’. If anything goes wrong, which most likely will, the blame is on the project leader. Secondly, since the initial project leader has established credibility, other team members who now become part project owner are able to ride on that coat tail and may get away with inferior product delivery. A third reason is that every team member gets a bite out of the sweet successful project pie instead of the out-of-favor ‘black horse’ employee getting all the glory.




Ripoff Cycle Repeats


The story usually does not end there. There will always be another difficult project, and again it will be assigned to the ‘black horse’ employee and then be taken away just like so. This high-performance and hard-to-terminate employee most likely will not get much benefit on the performance review since most of his or her achievement has now morphed into the ‘collaborative effort” of the team.

Everybody Loves Collaboration!


Of course, all other team members support and love how manager is looking out for their ‘personal development’. What’s not to like when somebody else does the heavy lifting and you get to share the credit and glory regardless how little contribution you have made? And since we are in a distorted democratic society where majority rules, this could go on forever with support and approval from seemingly everywhere. The only ‘victim’ is the ‘black horse’ employee who is constantly trying to rein in project quality control behind the scene.


But At Whose Expense?

What is very likely going to take place is that those other relatively mediocre ‘team members’ get noticed or even moved up in positions due to the ‘contribution’ and ‘collaborative’ work of a few high-visibility project, while the brain behind these projects will never move up or go anywhere. Eventually, this high performance, hard-to-terminate employee gets so frustrated and moves on to a new job at a different company.


‘More Bang for the Buck’


Similar to PIP, this ripoff disguising as ‘collaboration’ is something that emerged in corporate America within the past 5-10 years, and also has become part of the standard operating procedure for the new generation of middle managers.


Both achieve the same goal – getting rid of a worker disharmonious to the ‘team’ but otherwise hard to terminate based on performance alone. The difference is that PIP leaves a paper trail in HR records with some legal risk, whereas ‘collaborate to rip off’ is much more subtle and stealthy while getting more bang for the buck, figuratively speaking, plus zero risk of a law suit.


Like a Pack of Wolves


In my view, there’s is really nothing significantly unreasonable with PIP or the ‘Collaborative Approach”; however, the problem lies squarely with how they are implemented by the new breed of middle managers after the Boomer generation.


The post-boomer new generation middle managers tend to have a heightened sense of self-entitlement and like to rely on standardization as a managerial skill. That is, their main goal in managing people is to have a ‘group-think-and-act’ team with similar degree of inexperience. So these managers will not tolerate anyone who does not fit the preferred team mode. They also tend to register low on the moral compass, and like to band together like a pack of wolves taking out ‘obstacles’ in the process of climbing the corporate ladder.


Short Term Win (maybe), Long Term Total Loss


I know some will argue that this is what Corporate America needs to complete in the global world against the emerging economies like China or S. Korea. I believe this is purely short-sighted and may see some short-term benefits, but in the longer term, Corporate America will lose out with these Workplace NWO.


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via EconMatters

No Fly No Buy: Obama’s Last Ditch Effort To Cripple The Second Amendment

Submitted by Joshua Krause via,

There’s one thing that all gun grabbing politicians have in common. They are all quite adamant that they don’t want to take your guns. They’ll tell you over and over again that all they want is a few reasonable regulations. Every once in a blue moon they’ll let their guard down in front of an reporter, and reveal their true long-term intentions, but by and large they’re always trying to put a reassuring face on their gun grabbing agenda.

Obama for instance, has consistently claimed throughout his presidency that all he wants is a few “reasonable” restrictions, and that all he intends to do is keep guns out of the hands of “bad guys.” Whenever he talks about it however, you can read between the lines and find his ulterior motives.

At a recent Town Hall meeting, Obama was put on the spot by gun store owner, who asked him why he wants to restrict gun use for law-abiding citizens. The video has since gone viral among liberals who think that the president gave a stellar response. In reality, he merely showed us his true colors.

“First of all, the notion that I or Hillary or Democrats or whoever you want to choose are hell-bent on taking away folks’ guns is just not true,” he claims “And I don’t care how many times the NRA says it.” Obama then goes on to make the case for restricting gun ownership for people who find themselves on the no fly list, and cites an example of someone who has been visiting ISIS websites but is still allowed to buy firearms.


“So sir I just have to say respectfully, that there is a way for us to have common sense gun laws. There is a way for us to make sure that lawful responsible gun owners like yourself, are able to use them for sporting, hunting, protecting yourself. But the only way we’re going to do that is if we don’t have a situation in which anything that is proposed is viewed as some tyrannical destruction of the Second Amendment.”

Unfortunately, his idea to restrict gun ownership for people on the no-fly list is exactly the kind of thing that could lead to the tyrannical destruction of the Second Amendment. In a perfect world it would be nice if we could keep guns away from terrorists, but restricting the gun rights of people who are on the no-fly list is anything but reasonable or “common sense.”

That’s because literally anyone can find themselves on the no-fly list. You don’t have to commit a crime and you don’t need to visit any suspicious websites. They can take away your right to travel freely without any due process whatsoever. At best, all the government needs to do is hear that you might have some sympathies for a terrorist organization, and you’ll be barred from being on a plane for life.

As pointed out last year, more than a third of the people on the no-fly list have no known terrorist affiliations. If Obama’s plan were ever put in place, you could lose your right to bear arms over nothing more than a hunch or a rumor.

Leaks to the Intercept revealed that the “process” by which people are put on either the no fly list or the terrorist watch list basically involves hunches, and revelations from just a few months ago show that DHS still uses flim flam pseudo science to put people on the list based on hunches that the government laughably calls “predictive judgment,” but which experts have said has no scientific basis whatsoever.


If you want to understand how incredibly wrong this proposal is, you just need to replace “buy guns” with something else, like “the right to assemble” or “the right to use the internet.” It’s easy to say: “What could possibly be the argument for allowing a terrorist suspect to use the internet?” But then you remember that these aren’t actual suspects — they’re just people put on a list by law enforcement with no thorough process, let alone due process to defend themselves or to get off the list. And, of course, being a “suspect” doesn’t mean you’re guilty. Innocent until proven guilty used to actually mean something.

And let’s not forget, that our government has a very broad definition of “terrorist,” and has in the past claimed that conservatives, libertarians, veterans, and Christians should be watched closely for their supposed terrorist potential (i.e., the groups that are most likely to own firearms).

Sorry Obama, but you’re a gun grabber plain and simple. At best perhaps, you’re ignorant of what your proposal could do to our rights, and at worse you’re lying to the American people. You know exactly what a “no-buy list” would lead to. Furthermore, the fact that more guns were sold during your administration than any other in history does not prove that you’re not trying to take our guns, it’s only proof that you’ve failed to take them. You can sugarcoat your anti-Second Amendment vision, and claim that you just want to make us all a little safer, but we know what your ideas would do to our rights.

via Tyler Durden