The Fight Against California's Electric Skateboard Ban

“The Fight Against California’s Electric Skateboard Ban” is the
latest video from Reason TV. Watch above or click on the link below
for video, full text, supporting links, downloadable versions, and
more Reason TV clips.

View this article.

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The Fight Against California’s Electric Skateboard Ban

“The Fight Against California’s Electric Skateboard Ban” is the
latest video from Reason TV. Watch above or click on the link below
for video, full text, supporting links, downloadable versions, and
more Reason TV clips.

View this article.

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8 Months of Muppet Brutality: Why And Where Goldman Told Clients To Buy Banco Espirito Santo

Another day, another case of unprecedented muppet brutality, or, as Cramer would say: “Bear Espirito Stearns is fine“…

Rewind to January 14, 2014 where Goldman said:

Buy BES: Winner at home, recovering abroad

 

In our view, BES is (1) optimally positioned to gain from Portugal’s banking market evolution and (2) likely to benefit from improving margins in Angola. With the stock trading at a 29% discount to peers’ 2015E P/TBV and with 28% upside to our 12m target price of €1.55, we upgrade BES to Buy.

 

* * *

 

Positioning: Looking beyond the crisis – BES best placed

 

Resilience to asset quality deterioration determined banks’ ability to withstand the effects of the economic and financial crisis. Those effects, however, have their cause in macroeconomic imbalances that led Portugal to ask for financial assistance from the EU/IMF. Addressing those causes will determine the future shape of the Portuguese banking market and the relative positioning of the banks. In this context, we develop a theoretical (and severe) scenario to assess relative positioning in a deleveraging economy: under this scenario, we estimate that Portuguese banks would need to delever by a further €35 bn domestic loans (or 15%) by 2020 to partially reverse the imbalances that contributed to the crisis. This is a top-end assumption and depends heavily on the country’s future macroeconomic performance. In this negative scenario, we show that BES would be best positioned to gain from a “race to the bottom”. Our estimate is harsh, but we still believe that it is a good proxy for the underlying trends in the lending market. In this context, even under more benign scenarios, BES is best placed.

Goldman had BES at a Buy until, well, now.

So how did the stock perform during this period?

And now… the common is finished, or would be if it wasn’t halted.




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US Equities Tumble – Give Up All "Europe Is Saved" Gains

But Banco Espirito Santo was bailed out… and Europe is fixed again?

 

 

Treasury yields are all lower on the day with the 10Y well under 2.5%

 

The driver for the weakness… as we warned earlier, USDJPY losing its overnight support…

 

Charts: Bloomberg




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US Equities Tumble – Give Up All “Europe Is Saved” Gains

But Banco Espirito Santo was bailed out… and Europe is fixed again?

 

 

Treasury yields are all lower on the day with the 10Y well under 2.5%

 

The driver for the weakness… as we warned earlier, USDJPY losing its overnight support…

 

Charts: Bloomberg




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Netanyahu: The Bombings Will Continue Until Calm Is Restored

One can’t make this up. Well, one can, if one was the Onion, which alas has permanently missed its IPO window in a world in which reality is now the very definition of absurd.




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The Slide To Collapse Is Greased With Self-Interest

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Self-interest is intrinsically self-liquidating on a systemic level.

One enduring if rarely stated principle of Neoliberal Democracy is that the single-minded pursuit of self-interest magically produces an equilibrium which serves everyone's interests well enough to avoid the destabilization of rebellion or systemic collapse.

 
Let's start by defining Neoliberal Democracy: neoliberalism sees markets as the only efficient, fair and durable method of organizing resource extraction and the social order: governance, employment, distribution of income, etc. Turning every social and economic function into a marketplace ensures that market forces provide the discipline and transparency participants need to make prudent choices and investments.
 
Democracy is a political marketplace in which votes replace investor and consumer decisions as the mechanisms that enforce discipline and transparency.
 
The melding of these two ideologies is clearly natural, as both see a transparent market as the best possible system for both governance and and the economy.
 
The key characteristic of a market is that all participants exclusively pursue their own self-interest. No one need sacrifice their own self-interest for the good of the whole system because by definition the system of competing interests naturally organizes itself to maximize the choices of each individual and the equilibrium of the system.
 
The transparency, fairness and stability offered by this ideological system is very compelling: the advantages of a system that transparently discovers the price of everything while offering roughly equal opportunity to all participants to seek self-fulfillment (i.e. the pursuit of happiness) via a dogged focus on self-interest are self-evident.
 
Looking out for Number One is thus the foundation not just of personal self-aggrandizement but of systemic stability and fairness.
But let's move from ideological abstraction to the pragmatic–what happens in the real world? What we find in the real world is that participants seek to transfer their own risk to others while minimizing their productive work and maximizing their gain/skim.
 
Risk inevitably introduces the possibility of loss–both fair and unfair. Let's say a participant in the market invests in a scheme to produce the Acme Brand widget. 
 
Unfortunately, the widget fails to find a market and the enterprise closes its doors. The investors lose their investment: this is fair because any enterprise in a market is at risk of losing favor from changes in fashion or the emergence of more agile competitors.
 
Unfair risk is loss incurred through no fault of one's own. Let's say an employee of Acme Widget Corporation gave his all to the company, and was laid off anyway–not through some failing in his efforts or talents but as a result of dynamics beyond his control: the marketplace found little value in the Acme Widget.
 
The rational, self-interested participant will naturally seek to offload risk of loss to other participants. Employees of the state (i.e. the government) transfer most of the risk of being laid off to the larger group of taxpayers: in a recession, the state can raise taxes on everyone in the system to guarantee its employees get paid. In effect, the risk of loss is distributed to everyone paying taxes in order to guarantee the employment of state employees.
 
Financiers have learned that making bets big enough to render their enterprise too big to fail effectively transfers the risk of loss to the taxpayers. We see the same mechanism in action: those who manage to transfer the risk of loss to others guarantee their self-interest can be pursued risk-free.
 
The rational, self-interested participant will also naturally seek to minimize his productive contribution while maximizing his income/gain. The state employee will (for example) game the system to retire early on a fake disability claim, or manage to evade work, accountability or responsibility with little risk of loss because the system makes firing a slacker employee almost impossible.
 
A financier will use free money for financiers issued by the Federal Reserve to buy assets everyone needs to live: private water systems, rental homes, parking meters, etc.–what are known as rentier assets because the financier isn't adding or creating any value in his ownership; he is skimming a fee from those who pass through the gate he owns.
 
The rational, self-interested participant will minimize his own expenses and maximize his income/gain by exploiting the commons–assets shared by all participants. The rational, self-interested participant will thus let his sheep out into the common pasture to graze for free, dump his waste into the river and the smoke from his works into the air, all free of charge.
 
This dynamic of everyone pursuing their own self-interest destroying the commons was articulated by Garrett Hardin in his paper The Tragedy of the Commons.
 
There is another dynamic at work called tyranny of the majority.
 
Imagine a ship with 100 passengers and crew drifting down a river that eventually cascades over a 1,000 foot waterfall. It's easy to plot the ship's course and the waterfall ahead. You might think 100% of those onboard would agree that something drastic must be done to either reverse course or abandon ship, but before we jump to any conclusion we must first identify what each of the 100 people perceive as serving their self-interest.
 
If life onboard is good for 60 of the 100, they may well rationalize away the waterfall dead ahead. Why risk the treacherous river currents by abandoning ship? As a result, the majority vote to tweak the ship's course slightly, thus dooming the 40 others who can hear the thundering cascade ahead but who are powerless to change course in a democracy.
 
This is the tyranny of the majority feared by some of the American Founding Fathers.
 
If 60% of the voting public is dependent on government spending, then they will vote to continue that spending regardless of its unsustainability, source or unfairness to those who will suffer most when the entire contraption collapses in a heap.
 
 
To the degree that government revenue is a form of public commons, then the siphoning of that resource to serve individual gain leads to the loss of the commons, as well as the loss of any notion of the common good.
 
With 60 of the 100 voting to continue the present course of State borrowing and spending to support their piece of the largesse, the ship is doomed to end up in pieces at the bottom of the waterfall, despite the utter obviousness of the catastrophe just ahead.
 
In other words, democracy functions when a sustainable equilibrium can be maintained with slight adjustments in course/policy. But when a dramatic change of course is required to save the system, a change that upends all the rentier skims and redistributes risk of loss to all those who reckoned they'd successfully offloaded all risk onto others, then there is no political support for the necessary radical change of course.
 
Those collecting a piece of State spending will vote to keep the ship firmly heading for the waterfall, because they fear the consequences of changing course or abandoning ship. Any radical change of course reintroduces the risk of loss that each self-interested participant offloaded onto the system itself.
 
Enterprises that haven't offloaded risk or secured guarantees from the State are forced to make radical changes when their survival demands it. Recent history is full of examples of corporations that were riding high and then failed to change course radically enough; those companies lost their way and were acquired for a sliver of their former value.
 
The political marketplace of democracy fails when the State has transferred risk and guaranteed the skim of enough voters.
 
The political marketplace of democracy also fails because self-interest is best served by influencing the State to protect one's private rentier skims and gains.The highest-leverage, highest-return investment is buying political favors and influence from politicos.
 
If average citizens could buy a semi-permanent escape from taxes for, say, a $20,000 "contribution" to the right politico, anyone with a tax burden of $10,000 or more annually would make this easy calculation: in a single decade, I'm going to pay $100,000 in taxes if I do nothing. If I buy the political favor for $20,000, I will save $80,000 over a decade.
 
That's a four-fold yield (400% return) on the initial investment. Where else can you reap that kind of guaranteed return?
 
It turns out to be remarkably easy to evade the transparency required to make democracy and the market function fairly. The political favor is buried in hundreds of pages of legalese jargon in a legislative bill or regulatory statutes. No one will ever discover the favor unless they know where to look.
 
Self-interest is intrinsically self-liquidating on a systemic level, something I analyze in depth in Resistance, Revolution, Liberation, for without an understanding of the distorting mechanisms of self-interest, we cannot understand why people will continue supporting a visibly imploding Status Quo: they will do so as long as they are getting a piece of that Status Quo that is free to them.
 

This is how systems collapse: those who have offloaded risk (a.k.a. skin in the game) to the system itself and guaranteed their job, income, pension or rentier skim via the State will continue to support the Status Quo that has benefited them so handsomely even as the ship tumbles over the waterfall to its destruction.

 




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Are California Lawmakers Trying to Chase Out Porn Industry Entirely?

When Los Angeles enacted
a rule requiring condom-use in porn
, the ostensible reason was
to stop the spread of sexually transmitted infections (STIs).
Nevermind that this isn’t really a problem in the up-and-up adult
film industry, which has voluntarily adopted strict STI-testing
standards and boasts an on-set HIV transmission rate of zero over
the past decade. The county was going to “protect” performers
from condomless sex,
whether anyone in porn wanted it
or not. 

Since the measure’s passage, in 2012, the number of porn stars
utilizing condoms hasn’t really risen, but the number of porn films
made in L.A. has plummeted. According
to Film L.A.
, the organization that issues local film
production permits, there were around 480 adult films shot there in
L.A. county in 2012, before the condom law went into effect; in
2013, there were about 40. 

It’s
a safe bet to say that the world didn’t lose its appetite for porn
during that time
,” writes Los Angeles Times editor Jim
Newton. “Instead, many of those who produce it are either moving
outside the county … or filming without permits.”

Newton spoke with Kayden Kross, a porn actress and director who
moved filming from L.A.
to Ventura County to skirt the condom law
. But she may be
forced out of the state of California entirely, if lawmakers in
Sacramento have their way. State Assemblyman Isadore Hall is
sponsoring AB 1576, a measure to take the condoms-in-porn
requirement statewide, as well as implement new state-mandated
testing and reporting requirements. It’s under consideration by a
Senate committee today. 

Given the way the condom law has played out in L.A., it’s hard
not to see this as a move by California legislators to unload it’s
porn-production hub status to places beyond state lines. At the
least, it’s a downright illogical and ineffective way to try and
make porn safer, as Newton explains: 

At first blush, the requirement seems sensible. Who could oppose
safe sex? But the effort to require condom use in adult films is
misdirected — the porn business isn’t the hub of AIDS or sexually
transmitted diseases. Moreover, asking people to wear condoms is
one thing; having the government order it and enforce it is
another. And, most important, it doesn’t work. Measure B is taking
a fairly safe business and pushing it underground, outside Los
Angeles and quite possibly into places that don’t honor protocols
put into place to protect adult film actors, which require that
every performer be tested every two weeks for sexually transmitted
diseases and cleared for work only if the test is negative.

“It’s time to accept that Measure B’s impact hasn’t been to
encourage condom use; it’s been to encourage evasion and flight,”
Newton concluded. 

For more on Cali’s quixotic campaign to solve a porn problem
that doesn’t exist, check out this 2012 video from Reason TV. For
other avenues of neo-“war
on porn” activism, check out Peter Suderman
from the March 2014
issue of Reason.

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A Field Guide to Government Whistleblower Retaliation

"You can probably handle the truth, but we can't, frankly."The scandal over the absolutely
horrible treatment of patients by the Department of Veterans
Affairs (VA) has a
secondary scandal
: VA employees who have attempted to blow the
whistle on the agency’s corruption have faced retaliation.

The Washington Post
spent time
with the woman who used to be the spokesperson for
the hospital in Phoenix (the one that had been Ground Zero for the
scandal, but problems have been exposed at hospitals across the
country). She is no longer the hospital’s spokesperson. She is now
essentially a living joke about government bureaucracy:

[Paula] Pedene, 56, is the former chief spokeswoman for this VA
hospital. Now, she is living in a bureaucrat’s urban legend. After
complaining to higher-ups about mismanagement at this hospital, she
has been reassigned — indefinitely — to a desk in the basement.

In the Phoenix case, investigators are still trying to determine
whether Pedene was punished because of her earlier complaints. If
she is, that would make her part of a long, ugly tradition in the
federal bureaucracy — workers sent to a cubicle in exile.

In the past, whistleblowers have had their desks moved to break
rooms, broom closets and basements. It’s a clever punishment,
good-government activists say, that exploits a gray area in the
law.

The whole thing can look minor on paper. They moved your
office. So what?
But the change is designed to afflict the
striving soul of a federal worker, with a mix of isolation, idle
time and lost prestige.

The Post describes her workday in the basement, which
is exactly what you’d think it is—she’s a second receptionist in a
basement library where the visitors rarely need any help at
all.

The Washington Post attempted to get an explanation
from the VA on why Pedene is being treated the way she was. The hit
a wall, partly because the person responsible for sending Pedene to
the basement has been put on leave because of the big scandal, and
partly because of the typical “no comment on personnel matters”
response that thwarts any journalist trying to figure out what
happens to any human being who works for any government from lowly
garbage collectors, to police officers, to city managers.
 

Read the whole thing
here
.

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Small-Town Cops Get Armored Vehicle. 'It's definitely a big icebreaker with the kids.'

MRAPWatertown, Connecticut, a
city
of 22,000 people
with crime rates that seem to be enviably
below the national average
, now has itself a slightly used
Mine-Resistant Ambush Protected armored vehicle. Nearby Waterbury
has one, too. All they had to pay for the military surplus hardware
was a few grand for shipping and handling (new, the vehicles run
$733,000)—and maintenance from here on out. And now they have
themselves some mobile armor designed to survive insurgents armed
with small arms and explosives.

“It’s a great opportunity for the public to learn about the
police and what we do,” says Watertown Police Sgt. Curt Molnar.
“It’s definitely a big icebreaker with the kids.”

And brick-breaker, and timber-breaker, and cinder-block
breaker…

Writes Bill Bittar at
Stars and Stripes
:

WATERTOWN, Conn. — When Waterbury’s Emergency Response Team set
out to arrest two suspects in a home-invasion case early this
month, they went in force: Two heavily armored trucks led a convoy
of officers to nab the suspects at a house on Laurel Street.

The mine-resistant, ambush-protected vehicles used in the raid
were acquired for free by Watertown and Waterbury, which are among
11 Connecticut police departments to own such gear.

Watertown Police Sgt. Curt Molnar said his department shares its
MRAP as a regional vehicle with Waterbury, Naugatuck Valley
Community College, Wolcott and Middlebury.

“You hope not to use it much, because it could mean there’s a
shooter or a serious call,” Molnar said.

Just a few weeks ago, the same publication
pointed out
, “MRAP armored troop carriers, night-vision rifle
scopes, camouflage fatigues, Humvees and dozens of M16 automatic
rifles are just some of the tools that have found their way to
Michiana police, courtesy of the federal government.”

Reason has covered the ongoing militarization of
policing
for years, well before it hit the national radar as a
serious concern (see our video, below). The American Civil
Liberties Union recently reported on the phenomenon,
cautioning
:

Across the country, heavily armed Special Weapons and Tactics
(SWAT) teams are forcing their way into people’s homes in the
middle of the night, often deploying explosive devices such as
flashbang grenades to temporarily blind and deafen residents,
simply to serve a search warrant on the suspicion that someone may
be in possession of a small amount of drugs.

Even the federal government’s own Justice Department is
concerned. Karl Bickel, a senior analyst in the DOJ’s Community
Oriented Policing Services Office,
wrote this past December
:

Police chiefs and sheriffs may want to ask themselves—if after
hiring officers in the spirit of adventure, who have been exposed
to action oriented police dramas since their youth, and sending
them to an academy patterned after a military boot camp, then
dressing them in black battle dress uniforms and turning them loose
in a subculture steeped in an “us versus them” outlook toward those
they serve and protect, while prosecuting the war on crime, war on
drugs, and now a war on terrorism—is there any realistic hope of
institutionalizing community policing as an operational
philosophy?

Of course, much of the impetus for small-town police departments
with military vehicles, weapons and tactics comes from the feds
themselves. That free MRAP in Watertown comes courtesy of the

Defense Logistics Agency’s 1033 program
, which supplies
law-enforcement agencies with military surplus. “Preference is
given to counter-drug and counter-terrorism requests.”

The
program’s current catalog
(get your shopping done early!) lists
all sorts of goodies, including tactical vehicles and assault
rifles. It’s a bargain many police departments can’t resist.

And it’s such an icebreaker with the kids.

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