It’s Not Over Jussie: Smollett Indicted Again Following Six-Month Special Counsel Investigation

It’s Not Over Jussie: Smollett Indicted Again Following Six-Month Special Counsel Investigation

The Obamas might not be able to save Jussie Smollett this time, after the unemployed “Empire” star was slapped with a six-count indictment on Tuesday following a six-month investigation by Cook County special prosecutor Dan Webb, according to Fox4. Smollett is accused of staging a hate crime hoax last year.

Webb found that Smollett filed four separate police reports claiming he was attacked last January by two masked men as he was walking home from a Subway sandwich shop in an upscale Chicago neighborhood at around 2 a.m. The actor – who is openly gay and black – said that the attackers recognized him from Empire and began shouting racial and homophobic slurs. 

It was later discovered that the two men, brothers from Nigeria, were associates of Smollett’s who say the actor paid them $3,500 to stage the whole thing. Last November, Smollett filed a lawsuit against the brothers for ‘concocting the whole thing.’

Smollett – whose sisters worked for President Obama, was originally slapped with a 16-count indictment for lying to the police, however the Cook County State Attorney’s office suddenly dropped the charges after  Michelle Obama’s former Chief of Staff, Tina Tchen, pressured Chicago’s top prosecutor, Kim Foxx, to transfer the case to the FBI. When that wasn’t done, Foxx’s office decided not to pursue the case

Explaining their decision to drop the case, Foxx’s office said: “After reviewing all of the facts and circumstances of the case, including Mr. Smollet’s volunteer service in the community and agreement to forfeit his bond to the City of Chicago, we believe this outcome is a just disposition & appropriate resolution.”

In a Tuesday statement following the indictment, Webb said:

“Pursuant to the first part of Judge Toomin’s mandate, in connection with whether to further prosecute Jussie Smollett, the grand jury’s investigation revealed that Jussie Smollett planned and participated  in  a  staged  hate  crime  attack,  and  thereafter  made  numerous  false  statements  to  Chicago Police Department officers on multiple occasions, reporting a heinous hate crime that he, in fact, knew had not occurred.  Therefore, Mr. Webb has determined that reasonable grounds exist to further prosecute Mr. Smollett.”

Webb also wrote that his office has obtained “sufficient factual evidence to determine that it disagrees with how the CCSAO resolved the Smollett case,” and that when he was hit with the 16 count indictment, the Cook County State Attorney’s Office “had concluded that the evidence against Mr. Smollett was strong.


Tyler Durden

Tue, 02/11/2020 – 19:25

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Pentagon’s Rising Head Injury Count Designed To Conceal Troop Deaths: IRGC Spokesman

Pentagon’s Rising Head Injury Count Designed To Conceal Troop Deaths: IRGC Spokesman

A day after the number of American soldiers diagnosed with traumatic brain injury (TBI) due to the Jan. 8 Iranian ballistic missile attack on Ain al-Assad airbase in Iraq spiked once again — this time from 64 to 109 (before that going from zero to 11 to 34 to 50) Iran’s elite Islamic Revolution Guards Corps (IRGC) which orchestrated the attack charged that the Pentagon is still hiding the true extent of casualties

IRGC spokesman Brigadier General Ramezan Sharif said on Tuesday at a rally marking the anniversary of the country’s Islamic Revolution: “The word dead in the US lexicon has been changed with traumatic brain injury and they conceal their damages and tolls of our attack against Ein al-Assad,” according to semi-official Fars

He asserted that the United States is using the steadily rising TBI count to conceal that there were American troops killed in the attack

Brigadier General Ramazan Sharif, the spokesman for the Islamic Revolution Guards Corps, via Tehran Times.

Iranian state media had claimed in the immediate aftermath of the attack that scores were dead and wounded, which was immediately dismissed in the West as propaganda. 

However, the Pentagon’s steadily rising injury count has left many scratching their heads, and certainly shows Trump’s prior dismissal of the injuries as but mere “headaches” to be the White House’s own propaganda spin on the incident. It was later confirmed that many of the wounded had to be medevacked out of Iraq to Germany for treatment and observation, and some among those were taken back to the United States for continued observation. 

The IRGC appears to be seizing upon the ever-changing injury count offered by the Pentagon as ‘proof’ the US is lying about the true nature of the Jan.8 ballistic missile attack.

Alluding to the Jan.3 US assassination by drone strike of Qassem Soleimani, Gen. Sharif added the following threat: “Rest assured that assassination of General Soleimani will make the US and Israel leave the region.”

If indeed US personnel had died in the attack, this would have forced a US military response, paving the way for a massive war. It appears the White House downplayed initial casualties in the first place in order to avoid this scenario.

While it seems near impossible that the Pentagon could hide fatalities, something like head injuries appears easier to conceal and downplay — this appears precisely what happened. 


Tyler Durden

Tue, 02/11/2020 – 19:05

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Joe Scarborough Celebrates Demographic “Freight Train” That Will Collapse GOP

Joe Scarborough Celebrates Demographic “Freight Train” That Will Collapse GOP

Authored by Paul Joseph Watson via Summit News,

Joe Scarborough is celebrating the fact that a demographic “freight train” will secure electoral success for Democrats far into the future and lead to the “collapse” of the GOP.

The former Congressman and current MSNBC host tweeted, “Democrats have won the popular vote 6 of the last 7 elections. They won a record landslide in 2018. Demographics are a freight train carrying them into the future. The GOPs actions will accelerate their collapse. The future belongs to Democrats if they work hard & focus on 2020.”

Scarborough’s rhetoric is similar that of presidential candidate Joe Biden, who previously hailed an “unrelenting stream of immigration,” leading to whites becoming a minority, which he said was “not a bad thing” and something to be “proud of.”

It also sounds similar to what was said at a recent Leadership Conference on Civil and Human Rights when a speaker referenced what had happened in South Africa before remarking, “People say that demographics aren’t destiny, well we are trying to make it destiny.”

This is yet another example of how it’s only considered acceptable to talk about huge demographic changes if you’re in favor of them.

Suggesting that a drastic decline in the white population will change America for the worse is treated as at best virulent racism and at worst a dog whistle to genocidal neo-nazis.

Meanwhile, celebrating the demographic decline and replacement of white people in order to turn traditionally red states blue is exalted as some kind of progressive virtue.

Last month, the New York Times published a story lauding the fact that changing demographics had turned Virginia solid blue.

The “more lasting force at work is demographics,” admitted the newspaper.

*  *  *

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Tyler Durden

Tue, 02/11/2020 – 18:45

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Magazines over 10 rounds were well-known to the Founders

Did the Framers of the Second Amendment consider the possibility that Americans might own firearms with a capacity greater than 10 rounds? Certainly yes. Such arms had been invented two centuries before the Second Amendment, and by 1791, repeating arms, including those capable of firing more than 10 rounds, were well-known in the United States. The history is explained in a Third Circuit amicus brief I coauthored last week.

Case background: In 2018, the New Jersey legislature prohibited the possession of magazines holding more than 10 rounds. The details of the statute are explained here by NJ firearms attorneys Scott Bach and Evan Nappen. The day the governor signed the legislation, the Association of New Jersey Rifle and Pistol Clubs sued the New Jersey Attorney General, asking for a preliminary injunction. District Court filings are available here. District Judge Peter G. Sheridan denied the preliminary injunction in September 2018. 2018 WL 4688345 (Sept. 28, 2018).

On expedited appeal, a 2-1  panel of the Third Circuit upheld the denial of the preliminary injunction in December 2018. 910 F.3d 106. Circuit Judge Patty Shwartz wrote the opinion, joined by Judge Joseph A. Greenaway, Jr. (Both are Obama appointees. Judge Shwartz’s seat was previously held by President’s Trump’s sister Marion Trump Barry; Judge Greenaway replaced Samuel Alito.) Judge Stephanos Bibas (former U. Penn. prof., appointed 2017 by Trump) dissented, writing “the majority’s version of intermediate scrutiny is too lax. It cannot fairly be called intermediate scrutiny at all. Intermediate scrutiny requires more concrete and specific proof before the government may restrict any constitutional right, period.” 910 F.3d at 133–34.

After remand to the district court, the District Judge ruled that there was nothing more to do, since the Third Circuit majority had disposed of all issues. Plaintiffs disagreed, and the case has now returned to the Third Circuit for briefing.

Amici: The amici on the brief include seven professors who are experts in Second Amendment law: Royce Barondes (Missouri), Robert Cottrol (George Washington),
Nicholas Johnson (Fordham), Joyce Malcolm (George Mason), Joseph Olson (Mitchell Hamline), Glenn Reynolds (Tennessee), and Gregory Wallace (Campbell). Organization amici are the Firearms Policy Coalition, Firearms Policy Foundation, Madison Society Foundation, California Gun Rights Foundation, and Independence Institute (where I work). The lead attorney on the brief was Joseph Greenlee, joined by me and by Prof. George A. Mocsary (U. Wyo. law school). Some of the material in the brief is covered in more detail in my article The History of Firearms Magazines and of Magazine Prohibition, 78 Albany Law Review 849 (2015).

Earliest repeating arms:  repeater is a firearm that can fire more than one shot without having to be reloaded. The first known repeating firearms date back to between 1490 and 1530, with guns that fired 10 consecutive rounds. A 1580 gun could fire 16 shots. Once the user pressed the trigger, these guns would continue to fire until the ammunition was exhausted.

Seventeenth century: By the 1640s, major improvements in repeating arms had been developed. Now, the user could fire just one shot by pressing the trigger, and then fire more shots by pressing the trigger repeatedly. Danish rifles invented by Peter Kalthoff had ammunition capacities ranging from 6 to 30 rounds. During the seventeenth century, Kalthoff repeaters were copied by gunsmiths from London to Moscow.

At about the same time, the Lorenzoni revolver was invented in Italy, with a typical capacity of 7 shots. Like semiautomatic firearms (invented 1885), the Lorenzoni could self-reload. To fire the next shot, the user did not have to move a lever, bolt, or pump; the Lorenzoni could fire as fast the user could press the trigger–similar to modern revolvers or semiautomatics. The Lorenzoni was manufactured far and wide–including in New England. Famed diarist Samuel Pepys was much impressed with a demonstration he saw in London in 1664.

Early America: The Kalthoffs and Lorenzonis were not the only repeaters made during the century. For example, in the mid-1600s, some American repeaters were manufactured with revolving cylinders to hold the ammunition. Unlike the revolvers perfected by Samuel Colt in the 1830s, these revolvers required the user to rotate the cylinder by hand after each shot.

The French in North America had their own repeaters. For example, in 1690 the Comte de Frontenac “astonished the Iroquois with his three and five shot repeaters.” 1 Charles Winthrop Sawyer, Firearms in American History 29 (1910).

Eighteenth century: Before the industrial revolution, firearms manufacture was artisanal, with guns being made one at a time by gunsmiths. Repeating arms have more parts than single-shot guns, and the parts must fit more closely than in a single-shot. Accordingly, the necessary expertise and labor time to manufacture repeaters meant that repeaters were only affordable for the wealthier minority of the population.

Growing prosperity in the eighteenth century enabled more Americans to buy repeaters. Lorenzoni variants were popular, particularly 9 or 10 shot versions made by London gunsmith John Cookson, and by a New England gunsmith of the same name. In 1722, Boston gunsmith John Pim impressed some local Indians with an 11-shot repeater that he manufactured and sold. “[L]oaded but once,” it “was discharged eleven times following, with bullets, in the space of two minutes, each which went through a double door at fifty yards’ distance.” Samuel Niles, A Summary Historical Narrative of the Wars in New England, in Mass. Hist. Soc. Collections, 4th ser., vol. 5, at 347 (1837).

During the Revolution, inventor Joseph Belton demonstrated a 16 shot long gun. Witnesses, including Gen. Horatio Gates and scientist David Rittenhouse, were impressed, and the Continental Congress negotiated with Belton for a large order, but Belton wanted more money than Congress could afford.

Also during the Revolution, the British introduced their six-shot Ferguson Rifle (which might have made a difference in the war, if the British had manufactured enough of them) and the Nock Valley Gun (which shot seven rounds at once).

Early Republic: By the time the Second Amendment was ratified, the state-of-the-art
repeater was the Girandoni air rifle, which could shoot 21 or 22 rounds in .46 or .49 caliber. Although powered by compressed air, the Girandoni was ballistically equal
to a powder gun, and powerful enough to take an elk with a single shot. Many air guns of the time were equally powerful.

Originally invented for Austrian army sharpshooters, the Girandoni was manufactured in Russia, Germany, Switzerland, England–and Pennsylvania. Meriwether Lewis bought a Pennsylvania model, and carried on the Lewis and Clark Expedition. The gun is mentioned 22 times in Clark’s journal–usually in the context of the expedition showing off the gun to Indians, making the implicit point that the expedition could defend itself against a larger group.

Early nineteenth century: The 1820s brought a new type of repeaters: Isaiah Jennings’ 15-20 shot models, which were copied by Reuben Ellis for a military contract later in the decade.

Double-barreled guns (like today’s double-barreled shotguns) had long been popular, but the first repeating arms that could fire several shots and that were broadly affordable to the middle class were the pepperbox handguns of the 1830s. They held the ammunition in rotating barrels, one round per barrel. The most common pepperboxes held 4 to 8 rounds, while some held up to 24. The 12-shot Bennett and Haviland Rifle used a similar system.

Colonel Samuel Colt improved everything with his revolvers. Colt’s handguns only needed one barrel, while the ammunition was stored in a revolving cylinder.

Since the War of 1812, the federal armories at Springfield, Massachusetts, and Harpers Ferry, Virginia, had been working hard at learning how to mass produce firearms with interchangeable parts. The Springfield Armory worked closely with private entrepreneurs, gaining their knowledge and broadly disseminating its own knowledge. The federal armories became the foundation of “the American system of manufacture”–a term that caught on globally when Samuel Colt displayed his revolvers at the Crystal Palace Exhibition in London in 1853-54.

The government-led advances in firearms manufacturing helped made firearms, including repeaters, increasingly affordable. The American system of manufacture first spread from firearms to sewing machines and eventually to grain reapers, typewriters, bicycles, and automobiles. The prosperity created by the American system created a virtuous cycle in which Americans got richer and spent more money on manufactured goods, and the growing sales of the manufacturers led to improvements that continually increased quality and reduced price.

Mid-nineteenth century: By the 1850s, all sorts of repeating arms were being sold in America, including 21-round pinfire revolvers, 12 shot/6 chamber revolvers, the 15-round Hall rifle, the 38 or 60 shot Porter Rifles, and the 42 shot Ferris Wheel pistol.

But the most successful developments began with a collaboration of Daniel Wesson (later, of Smith & Wesson) and Oliver Winchester. They combined the recently-invented metallic cartridge (which holds the bullet, gunpowder, and primer in a metal cylinder) with the lever action (in which the user reloads the next round of ammunition by pulling a lever up and down). The lever action had been invented centuries before in England, but was not broadly affordable until the American system of manufacture.

The first Wesson and Winchester gun was the 30-shot Volcanic Rifle; introduced in 1859, it had reliability problems. The problems were solved in the successor model, the 16 shot Henry Rifle of 1861, which could fire its full capacity in 11 seconds. By 1862, Union solders were using Henrys in the Civil War.

Then as now, repeaters make self-defense possible for an individual who is attacked by a group. One of he most famous testimonials for the Henry came from Captain James M. Wilson of the 12th Kentucky Cavalry, who used a Henry Rifle to kill seven of his Confederate neighbors who broke into his home and ambushed his family. Wilson praised the rifle’s 16-round capacity: “When attacked alone by seven guerillas I found it to be particularly useful not only in regard to its fatal precision, but also in the number of shots held in reserve for immediate action in case of an overwhelming force.” H.W.S. Cleveland, Hints to Riflemen 181 (1864).

By the time the Fourteenth Amendment was before Congress, the Henry had been improved into the Winchester Model 1866 rifle, which could hold up to 18 rounds, depending on caliber. It was a major commercial success, especially in the West. The Model 1866 was succeeded by the Model 1873, with capacity from 6 to 25. Both Winchesters have deservedly been called “the gun that won the West.” The Model 1892 (15 rounds) was a favorite of Annie Oakley, and, later, of John Wayne.

As an alternative to the lever action, the pump action (the user pushes and pulls a slide underneath the barrel to load the next round) came on the market in the last quarter of the century, most famously with the 15-round Colt Lightning of 1884.

The next year brought the first functional semiautomatic firearm, the Mannlicher Model 1885. Before the end of the century, numerous models of semiautomatic pistols were on the market; some of them had magazines over 10 rounds, such as the Luger M1899, with an optional 32 round magazine.

As always, repeaters were essential for defense against group attacks. That is why anti-lynching crusader Ida B. Wells and other civil rights activists urged black people to buy repeating rifles for defense against lynch mobs. For the same reason, the Florida legislature in 1893 enacted the first American controls on particular types of firearms, after a repeating rifle was used to deter a lynch mob.

Magazine controls: In the 1920s and early 1930s, alcohol prohibition gave a tremendous boost to organized crime and intergang warfare. Starting in 1927, six states enacted laws regarding ammunition capacity: Rhode Island, Michigan, Minnesota, Ohio, California, and Virginia. None of these laws banned possession; some required a license or registration, or banned in-state sales, or simply forbade altering a firearm to change its original capacity (while allowing purchase of manufactured firearms with any capacity). A 1932 congressional statute for the District of Columbia banned semiautomatic firearms with a capacity of over 12.

All of the state laws were later repealed. The Heller case suggested that “longstanding” gun control laws have a better chance to be found constitutional than novel laws; to be “longstanding,” a law must be “long” and “standing,” and none of the repealed state laws qualify, since they are no longer standing. 1 Shorter O.E.D. 1625 (1993) (“adj. Of long standing; that has existed a long time, not recent.”). No magazine ban currently in force is older than the 15-round limit enacted by New Jersey in 1990. And three decades is hardly enough to be longstanding, considering that DC’s 1975 handgun had been in effect for 33 years until the 2008 Heller decision.

In sum, guns with ammunition capacity greater than 10 rounds have existed since the sixteenth century, were well-known to the Founders (including the Continental Congress), and were mass market consumer items by the time of the Fourteenth Amendment. Although the Second Amendment’s protection is not limited only to the types of arms that existed in 1791, the Second Amendment does protect the types of arms that did exist in 1791, and those included arms with ammunition capacity greater than 10.

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US Household Debt Soars Most Since Crisis In Q4 Amid Explosion In New Mortgage Originations

US Household Debt Soars Most Since Crisis In Q4 Amid Explosion In New Mortgage Originations

Today the NY Fed published its latest quarterly consumer credit report which found that aggregate household debt increased 1.4%, or by $193 billion in the fourth quarter 2019, its 22nd consecutive increase, for the first time ever surpassing $14 trillion ($14.15 trillion to be exact) some $601 billion higher than a year ago. This was the single biggest monthly increase in household debt since before the financial crisis.

Household debt balances have been steadily rising for the past five years and in aggregate are now $1.5 trillion higher than the previous peak of $12.68 trillion reached in Q3, 2008. Overall household debt is now 26.8% above the Q2 2013 trough.

The surge in consumer debt was led by mortgage debt which rose by $120BN in Q4, to $9.56 trillion, while balances on home equity lines of credit saw a $6 billion decline, bringing the outstanding balance to $390 billion and continuing the 10 year downward trend. The dramatic increase in new mortgage debt took place as the rate on a 30-year mortgage fell by about 100 basis points over the past year, adding to home purchasers’ buying power.

“Mortgage originations, including refinances, increased significantly in the final quarter of 2019, with auto loan originations also remaining at the brisk pace seen throughout the year,” said Wilbert Van Der Klaauw, senior vice president at the New York Fed. “The data also show that transitions into delinquency among credit card borrowers have steadily risen since 2016, notably among younger borrowers.”

Mortgage originations jumped to the highest volume seen since Q4 2005, rising to $752 billion in the fourth quarter from $528 billion in Q3 2019, due to a large increase in refinance activities. Among newly originating mortgage borrowers, the median credit score stood at 770, a 5-point increase from the Q3 2019, reflecting higher share of refinances.

And with interest rates near record low, only about 1.0% of current mortgage balances became 30 or more days delinquent in the fourth quarter, near the lowest level observed in the data history. At the same time, just 71,000 individuals had a new foreclosure notation added to their credit reports between October 1 and December31, as foreclosures remained historically low.

Non-housing balances increased by $79 billion in the fourth quarter, with increases across the board, including $16 billion in auto loans, $46 billion in credit card balances, and $10 billion in student loans.

  • Outstanding student debt stood at $1.51 trillion in the fourth quarter of 2019, an increase of $10 billion from Q3 2019.
  • 11.1% of aggregate student debt was 90+ days delinquent or in default in Q4 2019. The transition rate into 90+ day delinquency among student loans was 9.2%.
  • Auto loan balances stood at $1.33 trillion in Q4 2019, an increase of $16 billion from the previous quarter. The transition rate into serious (90+ days) delinquency among auto loans rose to 2.36% in the fourth quarter from 2.34% in Q3 2019.  

The large increase in credit card balances reflects, in part, a shifting of balances across debt types as portfolios have shifted by among lender.

Auto loan originations, which include both newly opened loans and leases, at $159 billion, were about flat with the previous quarter’s high level. Auto debt, which has risen for 35 consecutive quarters, increased $16 billion from the previous quarter. Almost 5% of auto loans are 90 days of more delinquent. This is the highest percentage since the third quarter of 2011.

After several years of easing standards, auto loans saw tightening in underwriting standards, with a 4 point increase in the median originating credit score. The volume of subprime auto originations was $31 billion, a level on par with the last several years.

Aggregate credit limits on credit cards also increased, by $96 billion, and continuing a 10-year upward trend.

And yet despite near all time low rates, there was one especially troubling trend: credit card delinquencies rose to 8.36% an 18-month high, while auto loan delinquencies approached all time highs.

NY Fed economists said in a blog post that credit cards have again surpassed student loans as the most common form of initial credit history among young borrowers, following several years after the crisis when student loans were higher.

“The data also show that transitions into delinquency among credit card borrowers have steadily risen since 2016, notably among younger borrowers,” Wilbert Van Der Klaauw, senior vice president at the New York Fed, said in a statement.

And speaking of student loans, the total amount of debt stood at $1.51 trillion in the fourth quarter, up by $10 billion from 2019 Q3, with more than 11% of aggregate student debt 90+ days delinquent or in default in 2019 Q4. Far more troubling, about half of student loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle. Once these loans enter that cycle, delinquency rates are projected to be roughly twice as high, according to the Fed report, but for now everyone is pretending that the US does not have a student loan crisis.


Tyler Durden

Tue, 02/11/2020 – 18:25

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Why We Should Worry About Stagflation

Why We Should Worry About Stagflation

Authored by Daniel Lacalle via DLacalle.com,

Central banks have tried to create inflation at any cost under the misguided view that this will boost growth and help reduce the debt burden. Just as a pilot driving a Ferrari with the instructions of a Ford T, central banks are pushing the accelerator looking at the rearview mirror and screaming “go faster, we have not crashed yet!”.

The first problem with governments’ calculation of inflation is that it massively misrepresents some important factors. Housing is not reflecting either real rental prices or actual mortgage payments, healthcare and education weigh only 8.5% and 6.5% respectively on CPI but are two of the largest expenditures of an average family. It is not a surprise that protests against the rising cost of living are spreading all over the world while central banks say there is no inflation. The recent case in China is also symptomatic. China CPI came at 5.4% but pork prices rose 116% while vegetables soared 17% and transport-related fuel price inflation increased 7.2 percent year on year.

CPI components for Germany and France, where protests have increased in the past two years over rising consumer prices, also show the disparity: In Germany, the food price index rose 40% more than the official CPI, in an economy where GDP narrowly escaped recession. In France, food and services also rose higher than official inflation (between 90% and 30% higher, respectively), also in an economy where growth was weak. These may seem low figures for central bank officials, but the house price index, rental costs, and food price indicators are rising faster than after-tax real wages and the economy. Without entering into a debate about the calculation of CPI, these figures can help us understand why consumer habits are changing and why investment and consumption remain weak or negative in many economies. Consumers are more prudent because they perceive higher levels of inflation and cost of living in a weak wage growth environment while companies invest less as growth expectations are revised down and overcapacity is incentivized via low rates and high liquidity.

Protests against the rising cost of living were spreading globally many months before the coronavirus impact on Chinese prices, and even in China pork and food prices were seeing double-digit growths before the lockdowns and outbreaks. From Iran to Chile, Nicaragua to France or Spain, this is not an isolated or temporary issue, and the demonstrations also coincide with the ongoing downward revisions of global and countr-specific growth rates with central banks accelerating financial repression and trying to disguise the problem with more liquidity.

Why should investors and economists care about stagflation risks? Because central banks have no tool to combat it, and fiscal policies do not help. One can argue that central banks have no tool to combat economic cycles, but no one can disagree that stagflation cannot be solved with money printing, low rates, and government spending. Those measures exacerbate the issue. For investors, it is a true challenge, as macro and earnings disappoint, but global liquidity continues to disguise problems. Furthermore, governments tend to implement more interventionist measures when stagflation arrives. Do non-replicable good prices rise? Governments decide to intervene with price controls, which causes less investment, regulatory and legal security risk and, in turn, even lower growth.

No government or central bank will admit that rising inflation in essential goods is a direct consequence of financial and fiscal repression, and economic history always shows us that their reaction to rising discontent will be more financial repression and economic intervention.

We need to monitor these changes in patterns of inflation and growth as it is happening in more economies every year.

With the global supply chain significantly impacted by the epidemic in China and the estimates of global growth significantly downgrades, stagflation is a word most economists and policymakers do not want to mention, but one that may become a real risk in very little time.


Tyler Durden

Tue, 02/11/2020 – 18:05

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New Data Suggest Florida Cops Have Broad Power to Take Away People’s Second Amendment Rights

A new report on Florida’s “red flag” law claims Broward County’s experience with gun confiscation orders confirms that they prevent suicides and homicides while guaranteeing due process for people accused of posing a threat to themselves or others. But the analysis by the Giffords Law Center to Prevent Gun Violence (GLC), based on 255 police petitions filed in the year ending March 9, 2019, actually reinforces the civil liberties concerns raised by red flag laws. In particular, it shows that the judges who are supposed to decide whether someone poses enough of a threat to justify suspending his Second Amendment rights almost always defer to the conclusions reached by law enforcement agencies.

Florida, like every other state with a red flag law, allows police to obtain temporary, ex parte orders forbidding people to possess firearms. When police file such petitions, the respondent has no advance notice and no opportunity to rebut the allegations against him. The orders, which last up to 14 days, are supposed to be based on “reasonable cause to believe that the respondent poses a significant danger of causing personal injury” to himself or others “in the near future.” In the cases covered by the GLC report, police always sought ex parte orders, judges always granted them, and they did so “very quickly,” sometimes within hours.

Despite the wording of the statute, it seems that neither police nor judges are distinguishing between people who pose a risk that is “significant” (whatever that means) but not imminent and people who are apt to harm themselves or others “in the near future,” such that waiting for a hearing would be unacceptably dangerous. The routine, automatic issuance of ex parte orders means that when a respondent finally gets his day in court, the playing field is slanted sharply against him. The judge is deciding whether to maintain the presumptively protective status quo or change course and give the respondent legal access to guns he might use to kill himself or someone else.

Not surprisingly, the information obtained by the GLC shows that judges are rarely willing to take that chance. When police sought final orders, which they did in 93 percent of the cases, judges issued them 96 percent of the time in cases where the outcome was known. Final orders, which typically last a year and can be extended for another year, are supposed to be based on “clear and convincing evidence” that the respondent “poses a significant danger of causing personal injury” to himself or others. Theoretically, that test is much harder to satisfy than the “reasonable cause” standard for an ex parte order (although the threat no longer has to be “in the near future”). Yet respondents persuaded judges to restore their Second Amendment rights just 4 percent of the time.

Respondents usually did not even try. “In 76% of cases,” the GLC report says, “respondents agreed to the final orders prior to the hearing.” In other words, “full hearings where both parties had the opportunity to present evidence in front of a judge occurred in only 24% of cases.” The GLC says “the frequency with which final orders were agreed to by stipulation without a hearing likely minimized the administrative burden these orders placed on the courts while still providing the key elements of due process and ensuring that respondents had notice and an opportunity to be heard.”

How can there be due process when three-quarters of the respondents never even presented their side of the story? You might surmise that respondents gave up without a fight because the police had strong evidence against them, but that is not necessarily true. In these cases, people who have already lost their Second Amendment rights are confronting a complicated and intimidating process, and they are doing so without the aid of a lawyer unless they can afford one and find one in time. Florida, like every other state with a red flag law except for Colorado, does not provide court-appointed counsel for respondents trying to get their gun rights back.

David Kopel, a gun policy expert at the Independence Institute, notes that prosecutors in Connecticut have been known to actively discourage respondents from seeking legal representation. When law enforcement officials “arm-twist respondents into giving up before the hearing,” he says, that hardly proves the government’s case was strong.

“A lot of people are terrified of court,” says Kendra Parris, an Orlando lawyer who specializes in red flag cases. “A lot of people think that if they lose, they’ll be arrested. It’s not like people understand these things or what’s going on, especially not low-income people without a bunch of free time to surf the internet and [do] research. Sometimes people get confused about the date, or can’t find a lawyer in time and give up.”

Parris also notes that “some of the cities in Broward County are having their officers show up with the sheriff during service of the ex parte order and petition with a stipulation in hand.” She adds that “some of them appear to be giving the respondents legal advice” by saying, for example, that they can still appeal even if they sign the stipulation. “This is not due process,” she says. “It’s pressure and intimidation.”

Respondents face better odds in some of the other states with red flag laws. Connecticut judges ordered guns returned about a third of the time in cases where the outcome was known, according to a 2014 Connecticut Law Review article (although outcomes were reported in less than 30 percent of cases). Data from Maryland indicate that respondents have a similar chance of success there. In Indiana, according to a 2015 study reported in the journal Behavioral Sciences and the Law, gun owners generally prevailed when they showed up for hearings. During the last 71 months covered by the eight-year study, gun owners won every contested case.

The much lower success rate for respondents in Broward County, which is consistent with statewide data for Florida, could mean that police are doing a very good job of investigating and substantiating the risks that people pose, so that judges generally do not see any reason to second-guess them. “We don’t know the screening process on the police side,” Kopel notes. “Some departments may just file a petition upon any request. Others may conduct their own investigations and decide not to file.”

The GLC says 55 percent of the Broward County cases, which include petitions filed by 14 city police departments as well as the county sheriff, involved homicide threats, 48 percent involved suicide threats, and 18 percent involved both. The report describes about half a dozen cases with compelling facts. One involved an “easily agitated” young man who routinely brought guns and a “heavy workout plate” to church despite requests that he stop doing so, expressed hostility toward organized religion, and talked about committing acts of violence. Another case involved a man who owned 40 guns and “had made multiple threats about harming himself and attempting suicide.” Readers are invited to conclude that all of the cases were as clear-cut as these, which seems doubtful.

Judging from the GLC report, Florida is giving police a lot of power to determine who should be allowed to retain his Second Amendment rights. That faith can be misplaced, as illustrated by some of the cases I discussed in a recent Reason feature story about red flag laws. Even when police officers are conscientious, they may err on the side of seeking orders, since the prospect of a preventable suicide or homicide tends to loom larger than the chance that someone will unfairly lose his gun rights for a year or two.

Unfortunately, judges, who are supposed to act as a check against hasty police conclusions, have the same bias. Parris says the GLC study “pretty much confirms my suspicion and fear that the courts aren’t actually reviewing these [applications]—just rubber-stamping them—and/or that courts are reluctant to push back against a petition from law enforcement.”

[This post has been updated with an additional quotation from Kendra Parris.]

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New Data Suggest Florida Cops Have Broad Power to Take Away People’s Second Amendment Rights

A new report on Florida’s “red flag” law claims Broward County’s experience with gun confiscation orders confirms that they prevent suicides and homicides while guaranteeing due process for people accused of posing a threat to themselves or others. But the analysis by the Giffords Law Center to Prevent Gun Violence (GLC), based on 255 police petitions filed in the year ending March 9, 2019, actually reinforces the civil liberties concerns raised by red flag laws. In particular, it shows that the judges who are supposed to decide whether someone poses enough of a threat to justify suspending his Second Amendment rights almost always defer to the conclusions reached by law enforcement agencies.

Florida, like every other state with a red flag law, allows police to obtain temporary, ex parte orders forbidding people to possess firearms. When police file such petitions, the respondent has no advance notice and no opportunity to rebut the allegations against him. The orders, which last up to 14 days, are supposed to be based on “reasonable cause to believe that the respondent poses a significant danger of causing personal injury” to himself or others “in the near future.” In the cases covered by the GLC report, police always sought ex parte orders, judges always granted them, and they did so “very quickly,” sometimes within hours.

Despite the wording of the statute, it seems that neither police nor judges are distinguishing between people who pose a risk that is “significant” (whatever that means) but not imminent and people who are apt to harm themselves or others “in the near future,” such that waiting for a hearing would be unacceptably dangerous. The routine, automatic issuance of ex parte orders means that when a respondent finally gets his day in court, the playing field is slanted sharply against him. The judge is deciding whether to maintain the presumptively protective status quo or change course and give the respondent legal access to guns he might use to kill himself or someone else.

Not surprisingly, the information obtained by the GLC shows that judges are rarely willing to take that chance. When police sought final orders, which they did in 93 percent of the cases, judges issued them 96 percent of the time in cases where the outcome was known. Final orders, which typically last a year and can be extended for another year, are supposed to be based on “clear and convincing evidence” that the respondent “poses a significant danger of causing personal injury” to himself or others. Theoretically, that test is much harder to satisfy than the “reasonable cause” standard for an ex parte order (although the threat no longer has to be “in the near future”). Yet respondents persuaded judges to restore their Second Amendment rights just 4 percent of the time.

Respondents usually did not even try. “In 76% of cases,” the GLC report says, “respondents agreed to the final orders prior to the hearing.” In other words, “full hearings where both parties had the opportunity to present evidence in front of a judge occurred in only 24% of cases.” The GLC says “the frequency with which final orders were agreed to by stipulation without a hearing likely minimized the administrative burden these orders placed on the courts while still providing the key elements of due process and ensuring that respondents had notice and an opportunity to be heard.”

How can there be due process when three-quarters of the respondents never even presented their side of the story? You might surmise that respondents gave up without a fight because the police had strong evidence against them, but that is not necessarily true. In these cases, people who have already lost their Second Amendment rights are confronting a complicated and intimidating process, and they are doing so without the aid of a lawyer unless they can afford one and find one in time. Florida, like every other state with a red flag law except for Colorado, does not provide court-appointed counsel for respondents trying to get their gun rights back.

David Kopel, a gun policy expert at the Independence Institute, notes that prosecutors in Connecticut have been known to actively discourage respondents from seeking legal representation. When law enforcement officials “arm-twist respondents into giving up before the hearing,” he says, that hardly proves the government’s case was strong.

“A lot of people are terrified of court,” says Kendra Parris, an Orlando lawyer who specializes in red flag cases. “A lot of people think that if they lose, they’ll be arrested. It’s not like people understand these things or what’s going on, especially not low-income people without a bunch of free time to surf the internet and [do] research. Sometimes people get confused about the date, or can’t find a lawyer in time and give up.”

Parris also notes that “some of the cities in Broward County are having their officers show up with the sheriff during service of the ex parte order and petition with a stipulation in hand.” She adds that “some of them appear to be giving the respondents legal advice” by saying, for example, that they can still appeal even if they sign the stipulation. “This is not due process,” she says. “It’s pressure and intimidation.”

Respondents face better odds in some of the other states with red flag laws. Connecticut judges ordered guns returned about a third of the time in cases where the outcome was known, according to a 2014 Connecticut Law Review article (although outcomes were reported in less than 30 percent of cases). Data from Maryland indicate that respondents have a similar chance of success there. In Indiana, according to a 2015 study reported in the journal Behavioral Sciences and the Law, gun owners generally prevailed when they showed up for hearings. During the last 71 months covered by the eight-year study, gun owners won every contested case.

The much lower success rate for respondents in Broward County, which is consistent with statewide data for Florida, could mean that police are doing a very good job of investigating and substantiating the risks that people pose, so that judges generally do not see any reason to second-guess them. “We don’t know the screening process on the police side,” Kopel notes. “Some departments may just file a petition upon any request. Others may conduct their own investigations and decide not to file.”

The GLC says 55 percent of the Broward County cases, which include petitions filed by 14 city police departments as well as the county sheriff, involved homicide threats, 48 percent involved suicide threats, and 18 percent involved both. The report describes about half a dozen cases with compelling facts. One involved an “easily agitated” young man who routinely brought guns and a “heavy workout plate” to church despite requests that he stop doing so, expressed hostility toward organized religion, and talked about committing acts of violence. Another case involved a man who owned 40 guns and “had made multiple threats about harming himself and attempting suicide.” Readers are invited to conclude that all of the cases were as clear-cut as these, which seems doubtful.

Judging from the GLC report, Florida is giving police a lot of power to determine who should be allowed to retain his Second Amendment rights. That faith can be misplaced, as illustrated by some of the cases I discussed in a recent Reason feature story about red flag laws. Even when police officers are conscientious, they may err on the side of seeking orders, since the prospect of a preventable suicide or homicide tends to loom larger than the chance that someone will unfairly lose his gun rights for a year or two.

Unfortunately, judges, who are supposed to act as a check against hasty police conclusions, have the same bias. Parris says the GLC study “pretty much confirms my suspicion and fear that the courts aren’t actually reviewing these [applications]—just rubber-stamping them—and/or that courts are reluctant to push back against a petition from law enforcement.”

[This post has been updated with an additional quotation from Kendra Parris.]

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NYC Mayor Bill de Blasio Wants to Use Commercial Rent Control to Save Small Businesses

Imposing rent control on commercial properties is almost certainly illegal in New York City and would likely do little to fill vacant storefronts with thriving small businesses. Other than that, it’s a great idea.

Last week, during his annual State of the City address, Mayor Bill de Blasio said that he would be forming a commission to investigate the legality of the controversial policy as part of his drive to save the city’s mom-and-pop stores.

“I’m going to name a commission of people of different viewpoints and different expertise to come back to us once and for all this year with an answer, is there a legal way we can have commercial rent control in New York City?” said de Blasio. “That is the answer we need, and, if it’s a yes, we should go to Albany and get it done in 2021.”

Commercial rent control in New York City existed between 1945 and 1963, when a state-level law authorizing it expired. The idea of bringing it back has resurfaced every couple of decades, according to The City.

In 2018, City Councilmember Ydanis Rodriguez (D) introduced the Small Business Survival Act, which would have required landlords to renew a commercial tenant’s lease for 10 years, and mandated the two parties submit to forced arbitration if they weren’t able to negotiate new lease terms, including rent.

In November 2019, Councilmembers Stephen Levin and Brad Lander, both Democrats, introduced the Commercial Rent Stabilization Act, which would create a city panel that would set allowable rent increases for small retail, manufacturing, and office locations.

“There would be no incentive for a landlord to sit on an empty storefront and it would allow small businesses to compete,” said Levin (D) to Curbed, articulating the view that vacant commercial properties are the result of speculating building owners holding out for higher rents.

That view is not generally supported by city government studies on New York City’s retail vacancies.

An August 2019 report from the Department of City Planning found that this kind of speculative behavior might be behind some vacant commercial spaces in high-demand retail corridors, but not in most of the city.

“A rent bubble and a surge in high-priced property sales in Manhattan and some of Brooklyn’s more established corridors may have encouraged retention of vacant space in anticipation of unrealistic rents,” reads that report, while noting that this glut of empty space is starting to drive down commercial rents and vacancy rates.

Outside Manhattan, there was little evidence that commercial property owners were warehousing space in the hopes of attracting higher-paying tenants, that report notes. It also stressed that in addition to rents, the rise of e-commerce, the changing desirability of particular neighborhoods, regulation, and taxes all played a role in determining commercial vacancy rates.

Another September 2019 study from the city Comptroller’s office was more sympathetic to the idea of rising rents being responsible for commercial vacancies, finding that a 1 percent increase in average retail rents was associated with 0.33 percent increase in vacant retail square footage.

The same report, however, found other regulatory factors were more impactful, particularly permitting delays. A 1 percent increase in the number of building alteration permits not approved within 30 days was associated with a 3.28 percent increase in vacant retail space, the study found.

“The average number of days it takes to get a liquor license is also a significant driver of retail vacancy,” noted the comptroller’s report.

Business groups have likewise stressed the multitude of factors that are making things difficult for businesses in the city.

“Data shows that retail vacancy rates are driven by rising property taxes, longer wait times for government approvals, e-commerce and various other factors,” said the head of the Real Estate Board of New York, a trade association, in a November 2019 press release.

Borough-level Chamber of Commerce chapters similarly argued that the high costs of the minimum wage and mandated paid sick leave played a much bigger role in driving businesses out of the city than rent increases.

These practical considerations were enough for the de Blasio administration to come out against the Small Business Survival Act when it was first proposed.

As de Blasio noted in his speech last week, there are also major legal obstacles for the city to clear before establishing commercial rent control on its own initiative.

A 2018 report by the New York City Bar Association noted that efforts by the city to establish its own residential rent control regulations have been shot down by the courts. While commercial rent control has never been ruled on, it would also likely fail judicial scrutiny, said the Bar Association.

That means New York City leaders would likely have to convince state lawmakers to pass a commercial rent control bill if they wanted to see the policy stick.

Last year, the state legislature passed landmark legislation expanding rent control laws on apartments in New York City, suggesting there could be some appetite to do the same for commercial units.

On the other hand, establishing commercial rent controls when they don’t already exist is a heavier lift than simply expanding existing residential rent regulations. The brief history of the new 2019 rent control law would also hopefully dissuade lawmakers from trying to replicate the policy.

Building sales of rent-regulated buildings have plummeted following the passage of the 2019 law, as have building owners’ spending on renovations. Any commercial rent control policy could be expected to produce similar results.

In addition to studying commercial rent control, de Blasio has proposed a handful of other policies to assist small businesses. Some of these, like cutting small business fines and hiring more staff to help business owners secure permits more quickly, sound sensible enough.

The idea for a vacancy tax on commercial landlords—predicated as it is on the same idea that speculation is behind so many of the city’s empty storefronts—is much less sensible. The mayor’s proposal to invest $500 million in city pension funds in small businesses would be a huge, likely disastrous gamble.

City governments should consider reducing their own regulatory and tax burdens on tenants, commercial and residential, before reaching for blunt, destructive price control policies.

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WSJ Publishes “Highly Classified” Evidence Proving Huawei Spies For Beijing

WSJ Publishes “Highly Classified” Evidence Proving Huawei Spies For Beijing

Late last week, British media reported the details of a particularly tense phone call between President Trump and UK PM Boris Johnson. During the call, Trump effectively chewed out Johnson over the UK’s decision to allow Huawei equipment to be used during the construction of “non-core” segments of the country’s 5G network

Though Johnson tried to play down the significance of the decision, there’s no question that he had willingly risked a serious break in his relationship with Trump and Washington. We suspect Trump was so enraged because he has frequently bragged about striking a “big, beautiful” trade deal with Johnson. As the Vindman twins can attest, Trump doesn’t tolerate embarrassment.

It’s possible Johnson might be willing to abandon Huawei, but such a decision is not without cost. Using Huawei’s equipment would allow telecom companies to save money building the network, as parts by rivals Ericsson and Nokia are far more expensive than equipment made in China. Perhaps Johnson is simply waiting to cash in this chit.

For whatever reason, the Trump Administration isn’t giving up on its pressure campaign. Instead, it appears to be cranking up the pressure.

To wit: On Tuesday, WSJ published an expansive report tying together what appear to be the broad strokes of the threat that Huawei poses to national security.

In other words, Britain tried to call America’s bluff, but President Trump and the administration are coming through with the goods.

Not that there was ever really any doubt. Dutch intelligence, Microsoft, American intelligence and others have uncovered and shared evidence that Huawei exploited so-called ‘backdoors’ in their systems. We’ve noted the results of these investigations repeatedly over the years.

Now, it appears the administration has sanctioned a leak to smear Huawei and further underscore the Pentagon’s warnings to America’s allies that Huawei represents a serious national security threat.

“Highly classified” US intelligence that was shared with European allies last year included details of Huawei’s capabilities, including exploring how it covertly infiltrates mobile-phone networks via “back doors” designed for use by local law enforcement. Typically, governments ask that all telecoms systems include a “back door” to allow law enforcement access. But in the equipment Huawei builds, the Huawei apparently  Huawei has reportedly had this capability for more than a decade, according to last week, British media reported the details of a particularly tense phone call between President Trump and UK PM Boris Johnson. During the call, Trump effectively chewed out Johnson over the UK’s decision to allow Huawei equipment to be used during the construction of “non-core” segments of the country’s 5G network

Though Johnson tried to play down the significance of the decision, there’s no question that he had willingly risked a serious break in his relationship with Trump and Washington. We suspect Trump was so enraged because he has frequently bragged about striking a “big, beautiful” trade deal with Johnson. As the Vindman twins can attest, Trump doesn’t tolerate embarrassment.

It’s possible Johnson might be willing to abandon Huawei, but such a decision is not without cost. Using Huawei’s equipment would allow telecom companies to save money building the network, as parts by rivals Ericsson and Nokia are far more expensive than equipment made in China. Perhaps Johnson is simply waiting to cash in this chit.

But for better or worse, the Trump Administration isn’t giving up on its pressure campaign – in fact, it looks like it’s seriously ramping up. Because on Tuesday, WSJ published an expansive report tying together what appear to be the broad strokes of the threat that Huawei poses to national security.

In other words, Britain tried to call America’s bluff, but President Trump and the administration are co”>WSJ.

US officials say Huawei has built equipment that secretly preserves the manufacturer’s ability to access networks through these interfaces without the carriers’ knowledge. The officials didn’t provide details of where they believe Huawei is able access networks. Other manufacturers don’t have the same ability, they said.

“We have evidence that Huawei has the capability secretly to access sensitive and personal information in systems it maintains and sells around the world,” said national security adviser Robert O’Brien.

“Huawei does not disclose this covert access to its local customers, or the host nation national-security agencies,” another senior U.S. official said.

Per WSJ, US officials stopped short of detailing explicit examples of Chinese spies or state-sponsored hackers exploiting these backdoors, and wouldn’t say if they had any evidence of this nature.

In response to Washington’s allegations, Huawei has claimed it would never cooperate with the Chinese government to spy on foreign customers. Few take the company seriously, especially considering its founder’s association with the PLA.

The intelligence cited by WSJ has been shared with American allies for months, and some of it was recently declassified to allow more flexibility regarding who can see it (though some of the material remains “highly classified”). This is presumably how it got in the hands of two WSJ reporters.

Washington has been sharing the intelligence with allies for months, and declassified part of it last week to allow for wider distribution, according to U.S. officials. It hasn’t yet been publicly disclosed or reported.

Though it’s also possible that Matthew Pottinger, the Trump Administration’s point man on Asia and a former Wall Street Journal reporter (coincidence?), handed the scoop to his former employer, possibly via an old friend who’s still an editor over at WSJ’s Midtown newsroom.

Pottinger has apparently been tasked with leading the effort to convince America’s European allies to listen to the administration’s warnings, and put their bitterness about Trump’s aggressive trade policies and opposition to the EU as an entity aside.

Matthew Pottinger, a U.S. deputy national security adviser, traveled to Berlin in late December to share the intelligence with senior officials in Chancellor Angela Merkel’s government, according to U.S. and German officials.

Foreign capitals have had to weigh Huawei’s alleged threat to national security against what many carrier executives say is its high-quality gear and competitive pricing.

If the UK is a lost cause (and that’s not a sure thing yet), the Trump administration’s next major flashpoint in the campaign against Huawei is coming during the next few weeks, when the German legislature is expected to vote on a bill that would give Huawei full access to Germany’s 5G market in exchange for additional “security guarantees.” Beijing and Huawei have promised clients the company would undertake a “pledge” not to aid the Chinese government in surveillance. Some European leaders appear inclined to take Beijing’s word for it and roll the dice to cut costs.

Perhaps they’re using their disdain for Trump to justify allowing Chinese state actors unfettered access to their civilian and military communications networks.


Tyler Durden

Tue, 02/11/2020 – 17:45

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