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Retail Investors Dump FAANGs, Adding To Nasdaq Mystery

Ever since tumbling into a bear market in Q4 2018, the Nasdaq has exploded higher – led by the FAANG names – and surging more than 30% since Christmas, trading just shy of all time highs and nobody on Wall Street can explain why…

… because as Bloomberg put it, aside from the stock price itself, “everywhere else you look in the industry, bad news is overwhelming the good.”

As we further discussed last night, here are some of the reasons why Wall Street is puzzled: even as tech stocks soar, with the Nasdaq up 5 of the last 6 trading sessions (and set to make it 6 of 7 today) tech profits are shrinking “at an alarming pace”, valuations are reflating and politicians want to break the companies up. Worse, last week Samsung previewed a dismal quarter for semiconductor orders which have collapsed, while spending on infrastructure to support the all-important “cloud” is sliding. And yet, as Bloomberg framed it, the addiction to tech just won’t break.

And so, one explanation for this historic divergence between deteriorating fundamentals and soaring stock prices, is that as the economy sank and central banks turned more dovish, investors – the Pavlovian dogs of central planners everywhere for the past decade – rushed into growth names, eager to ride the rebound once the economic rout stabilizes (that this optimism may be unwarranted is what Morgan Stanley warned about earlier, warning that the earnings contraction set to emerge with this quarter’s earnings will once get worse and become a full blown earnings, if not economic, recession).

However, the mystery only grew deeper today, when according to TD Ameritrade’s Investor Movement Index, after a three-month rally that added approximately $800 billion to the market cap of FAANG stocks since Christmas Day, retail investors joined their institutional peers, and decided it’s time to cash out of these ultra high-flying names.

This is perplexing because as Bank of America showed two weeks ago, retail investors (and buybacks, of course) were long seen as the buyer of last resort, while institutional investors, hedge funds, high net worth clients and funds in general were dumping tech stocks en masse.

Well, now we can eliminate retail investors from the group of potential buyers too, because as clients at discount brokerage TD Ameritrade modestly increased their overall exposure to equity markets for a second consecutive month in March, they sold shares of Amazon, Facebook, Netflix and Apple. These four core FAANG members have gained at least 35% since stocks bottomed on Christmas Eve, one-and-a-half times the S&P 500’s return, even as it increasingly appears that investors were aggressively selling their shares…

… suggesting that the only marginal buyer were… the companies themselves (it is hardly surprising then that over the weekend Goldman warned that should stock buybacks be banned, the market could crash).

Speaking to Bloomberg, JJ” Kinahan, chief market strategist at TD Ameritrade, said that “taking profits isn’t the worst idea in the world,” noting clients had been buyers of Amazon for eight straight months. “What it makes me wonder is, they were the momentum stocks, so where do we get our new momentum?” Actually, before we answer that, a better question is if retail investors were – like everyone else – dumping tech names, who was buying (beside buybacks of course).

Aside from the dump in FAANGs, the IMX reading for the five-week period ending March 29, 2019 showed investors were once again increasing their risk exposure, but ranks “Moderately Low” relative to the historic level of exposure investors took to the market.

“Major decisions surrounding key political concerns like Brexit and the China trade deal are on hold for the time being and remain overriding factors,” said JJ Kinahan, chief market strategist at TD Ameritrade. “In the short term, we’ve seen hope of a positive resolution on trade issues and that helped the overall markets go higher in March.”

And while retail investors may have enough of tech for a while, they appear to have zeroed in on the next mini bubble: cannabis companies, as many TDA clients were buyers of Aurora Cannabis and CVS Health, which recently announced that it will begin selling CBD-infused products at more than 800 of its stores. Millennial clients also scooped up shares of Canopy Growth Corp., according to a statement from TD Ameritrade. Finally, while dumping FAANGs, retail investors were also large buyers of Tesla (oops), NIO (oops), and AT&T.

 

via ZeroHedge News http://bit.ly/2D2R3jG Tyler Durden

Allison Mack Pleads Guilty In NXIVM Sex-Cult Case

Former Smallville actress Allison Mack wept in a Brooklyn federal courtroom on Monday as she pleaded guilty to charges that she manipulated women into becoming sex slaves for the leader of a purported self-help group tied to the Clintons. 

Allison Mack​​​​

The 36-year-old Mack apologized to the women who prosecutors say were exploited by the group’s leader, Keith Raniere, within the “inner sanctum” of his NXIVM self-help business known as “dominus obsequious sororium” – Latin for “master over the slave women.“

Mack arrived for her bail hearing in Brooklyn on May 4. According to one of her alleged sex slaves, Mack threatened that if she refused sex with Raniere she would be destroyed.

Mack allegedly occupied the second-most-senior position in the group.

“I believed Keith Raniere’s intentions were to help people, and I was wrong,” Mack told the judge as she pleaded guilty to racketeering charges. “I know I can and will be a better person,” she added. Her sentencing was set for September 11. 

Keith Raniere

Mack allegedly procured women for Raniere – who required that prospective “slaves” upload compromising collateral into a Dropbox account. One such recruit-turned-coach was India Oxenberg – daughter of Dynasty actress Catherine Oxenberg, who met with prosecutors in New York in late 2017 to present evidence against Raniere. 

Mack’s guilty plea will mean she doesn’t have to stand trial with Raniere, wealthy Seagram’s heiress Clare Bronfman, and another NXIVM inner circle member, Kathy Russell – all of whom have pleaded not guilty and denied wrongdoing, according to the Hollywood Reporter. 

Most recently, Raniere was accused of having sex with children and producing kiddie porn, to which he has pleaded not guilty.

Raniere, 58, is accused of having a child “engage in sexually explicit conduct for the purpose of producing one or more visual depictions of such conduct, which visual depictions were produced and transmitted,” reads a new indictment released Wednesday.

Raniere’s co-defendants, “Smallville” actress Allison Mack, Seagram heiress Clare Bronfman, Lauren Salzman and Kathy Russell were allegedly aware of his predilection for predation, and even facilitated it, according to prosecutors, who have now charged them for that conduct under a racketeering count.

His co-defendants “were aware of and facilitated Raniere’s sexual relationships with two underage victims: (1) a fifteen-year-old girl who was employed by Nancy Salzman and who – ten years later – became Raniere’s first-line ‘slave’ in DOS,” the filing reads. –New York Post

Both Mack and Bromfman sought a separate trial in the wake of the pedophilia charges. 

A 2009 photo of Raniere in Albany, New York, where Mack bought a house to be closer to the Nxivm founder.

After being run out of Arkansas in the early ’90s by then-Governor Bill Clinton’s attorney general on charges of fraud and business deception, Raniere and NXIVM executives emerged a decade later only to donate $29,900 to Hillary Clinton’s 2006 presidential campaign a decade later. At least three NXIVM officials are (or were) “invitation-only” members of the Clinton Global Initiative, according to the New York Post. 

As we noted in late March, while NXIVM describes itself as a self-help business that has helped thousands of people “reach their potential” through various courses, the women’s-only “inner sanctum” led by Raniere is known as ‘DOS’, which whistleblower Frank Parlato said stands for “dominus obsequious sororium” – Latin for “master over the slave women”. Once they are a member – or “slave” – they are allegedly encouraged to recruit new women into their “slave pods”, stop dating, and be on call 24 hours a day after being branded with Raniere’s initials below the hip using a cauterizing iron. 

According to a 2010 Vanity Fair report, Clare and her sister Sara Bronfman, who joined NXIVM in 2002, contributed approximately $150 million of their trust fund to NXIVM, while Claire bought 80% of Wakaya island off the coast of Fiji for $47 million in 2016.

[I]n the last six years as much as $150 million was taken out of the Bronfmans’ trusts and bank accounts, including $66 million allegedly used to cover Raniere’s failed bets in the commodities market, $30 million to buy real estate in Los Angeles and around Albany, $11 million for a 22-seat, two-engine Canadair CL-600 jet, and millions more to support a barrage of lawsuits across the country against nxivm’s enemies. Much of it was spent, according to court filings, as Sara and Clare Bronfman allegedly worked to conceal the extent of their spending from their 81-year-old father and the Bronfman-family trustees. –Vanity Fair

Edgar Bronfman Sr. receiving the Presidential Medal of Freedom from President Bill Clinton in 1999 

The 39-year-old Clare – daughter of late Seagram CEO Edgar Bronfman (whose funeral Hillary Clinton spoke at) pleaded not guilty last July to charges of racketeering, money laundering and identity theft for NXIVM – fainted in court last month in response to being asked if she’d secretly retained lawyer Michael Avenatti.

Michael Avenatti and Seagram heiress Clare Bronfman 

Now that Mack has pleaded guilty, we wonder what the future holds for her co-defendants. According to the Hollywood Reporter, “The jury questionnaire covers several topics, including asking candidates for their opinions about “rich individuals” and people who “engage in relationships with multiple sexual partners” and whether they “believe that people under the age of 17 should be able to consent to sex with adults.“”

via ZeroHedge News http://bit.ly/2uUcMWM Tyler Durden

Despite Congressional Approval, Selling Hemp and CBD Remains Legally Perilous

At the end of last year, Congress passed a farm bill that legalized hemp, defined as cannabis containing no more than 0.3 percent THC by weight, and its derivatives, including cannibidiol, a nonpsychoactive but medically promising compound that has been openly sold online and in brick-and-mortar stores throughout the United States for years. Yet in January, state troopers in Idaho seized 7,000 pounds of industrial hemp from a truck on Interstate 84. The following month, state troopers in Ohio seized 55 gallons of CBD oil from a truck on Interstate 70. Last month, local police raided a smoke shop in Duncanville, a Dallas suburb, and seized “hundreds of pounds of CBD oil in various forms.”

This situation is the reverse of the one encountered by state-licensed suppliers of marijuana, which remains completely illegal at the federal level. In this case, hemp and hemp-derived CBD seem to be legal at the federal level, but they may still be prohibited by state law. Even under federal law, states have “primary regulatory authority over the production of hemp” only after their rules are approved by the U.S. Department of Agriculture, which proved to be a sticking point in the Idaho case. And although the Drug Enforcement Administration (DEA) no longer has authority over hemp under the Controlled Substances Act, the Food and Drug Administration (FDA) may still take action against CBD products that are sold based on medical claims.

The hemp seized in Idaho was part of a 13,000-pound shipment produced by Boones Ferry Berry Farms in Hubbard, Oregon, and purchased by Big Sky Scientific in Aurora, Colorado. It was on its way from Oregon to Colorado when it was intercepted by the Idaho State Police. Neither the seller, the buyer, nor the trucking company made any attempt to conceal the hemp, which they thought was legal to transport through Idaho.

Idaho officials took a different view. Idaho law, unlike federal law as revised by the 2018 farm bill, defines marijuana as “all parts of the plants of the genus Cannabis, including the extract or any preparation of cannabis which contains tetrahydrocannabinol.” In other words, Idaho does not recognize a distinction between marijuana and hemp. “Our troopers adhere to Idaho law,” Idaho State Police spokesman Tim Marsano told the Idaho Statesman. “Substances with any amount of THC are illegal in this state.” The driver of the truck carrying Big Sky’s hemp was charged with marijuana trafficking, which carries a five-year mandatory minimum sentence under Idaho law.

Big Sky cited a provision of the farm bill that says “no state or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946…through the State or the territory of the Indian Tribe.” But Idaho argued that the hemp en route to Big Sky Scientific did not qualify for that protection because Oregon had not received federal approval for its regulatory system. In a February 2 ruling, U.S. Magistrate Judge Ronald Bush rejected Big Sky’s emergency motion for a temporary restraining order and preliminary injunction against Idaho’s seizure, saying “the Court cannot conclude on this record that Big Sky has a likelihood of success on the merits.”

Bush said he might reach a different conclusion “after the record is more fully developed.” Big Sky has asked the U.S. Court of Appeals for the 9th Circuit to overturn Bush’s ruling, and on March 18 the Idaho House of Representatives approved a bill that would legalize hemp in that state. “It might be said that Big Sky was taking a gamble that it thought was worth taking,” Bush wrote. “In another view, it might be said that Big Sky did not realize that Idaho might take a different position about whether Big Sky was free to move industrial hemp around the country.”

A similar clash of expectations explains the seizure of CBD oil in Ohio, which defines marijuana in a way that tracks the unrevised federal definition: “all parts of a plant of the genus cannabis, whether growing or not; the seeds of a plant of that type; the resin extracted from a part of a plant of that type; and every compound, manufacture, salt, derivative, mixture, or preparation of a plant of that type or of its seeds or resin.” Ohio’s definition excludes “the mature stalks of the plant, fiber produced from the stalks, oils or cake made from the seeds of the plant, or any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks, except the resin extracted from the mature stalks, fiber, oil or cake, or the sterilized seed of the plant.”

While CBD derived from cannabis stalks arguably does not fit that definition, the Ohio State Highway Patrol treats all CBD oil as a Schedule I substance. Hence the two men who were transporting the CBD oil seized in February were charged with felonies punishable by a maximum penalty of 11 years in prison and a $20,000 fine. Ohio has a medical marijuana program that started operating last week, but the CBD oil in this case was not part of it.

The situation is similar in Texas, which defines marijuana as broadly as Ohio does. It makes a narrow exception for CBD oil produced by three state-licensed companies for treatment of epilepsy. Those licensees do not include GM Tobacco, the Duncanville shop that was raided in March. “When the officers were asked why you are taking this stuff, they said because it’s marijuana,” Daniel Sullivan, a Dallas attorney who represents the store’s owners, told the Fort Worth Star Telegram. “Which is either profoundly ignorant or dishonest. If they don’t know the difference between CBD and marijuana, they need to study more.”

But under Texas law, that distinction does not matter except for suppliers licensed under the state’s Compassionate Use Program. “Our investigations revealed criminal activity occurring at GM Tobacco in Duncanville, and our responsibility to protect the community is paramount to the health, safety and welfare of our citizens,” said Mark LiVigni, Duncanville assistant police chief. “Marijuana is illegal in the state of Texas.”

CBD sellers face additional risks under federal law. “With passage of the Farm Bill,” DEA spokeswoman Mary Brandenberger says in an email, “any part of the marijuana plant (including seeds, derivatives and extracts) that have a THC concentration of no more than 0.3% THC will be defined as ‘hemp’ and accordingly will not fall under DEA’s purview.” But the only CBD product that is recognized as a medicine by the FDA is Epidiolex, an oral solution that the agency approved last year for treating two rare forms of epilepsy.

Before stepping down as head of the FDA last week, Scott Gottlieb told a House subcommittee his agency would take a “risk-based approach” to CBD products. “We’re going after places where CBD is being marketed in situations where we think the claims are either misleading to the point of encouraging a patient to forgo otherwise effective therapy for a medical condition or being marketed in a formulation and in a dose that’s at a level that creates significant safety concerns,” he said. On March 28, for instance, the FDA sent warning letters to three CBD vendors, warning that selling the compound for “the cure, mitigation, treatment, or prevention of disease” violates the Food, Drug, and Cosmetic Act.

Gottlieb also has expressed concern about plans by CVS and Walgreens to begin carrying CBD products. “We now see big box stores seeking to market CBD products for some uses where the claims seem to be potentially over-the-top claims for the treatment of pain,” he said in his congressional testimony. “We’re not allowing this. What’s happening is we see a burgeoning market, and we can’t boil the ocean, so we’re trying to take a risk-based approach to our enforcement like we do on all matters.”

Yet Gottlieb suggested the FDA wants to create rules that would allow the sale of CBD products. “I recognize Congress wants there to be a pathway here,” he said, “so we’re trying to work at the same time expeditiously to create a viable pathway that can differentiate between potentially appropriate use of the product if we can have scientific evidence to support its appropriate use and use of the product that creates safety risks for the consumers.” The FDA has scheduled a May 31 public hearing to “obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds.”

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Achievement Gap Between Rich and Poor Public School Students Unchanged Over 50 Years

FailBradCalkinsDreamstimeHalf a century of trying hasn’t closed one of schooling’s most vexing achievement gaps. According to a new paper, the gap in educational achievement between public school students in the bottom 10th socioeconomic status (SES) percentile and those in the top 90th SES percentile has remained essentially unchanged over the last 50 years.

“In terms of learning, students at the 10th SES percentile remain some three to four years behind those in the 90th percentile,” report a team of researchers led by the Stanford economist Eric Hanushek in their disheartening new National Bureau of Economic Research study, “The Unwavering SES Achievement Gap.”

It would be one thing, the researchers note, that “if all achievement were rising, i.e., if a rising tide was lifting all boats.” But that’s not what’s happening. Young adolescents’ performance has risen over the past 50 years, but their scores drift downward once they reach high school. The upshot is that there has been no significant improvement in the overall education achievement scores of American high school student cohorts born since the 1950s.

The researchers draw upon data from four periodically administered assessments of U.S. student performance: the Program for International Student Assessment, the Trends in International Mathematics and Science Survey, and two versions of the National Assessment of Educational Progress. They then divvy up the student cohorts based their parental socioeconomic status.

The researchers calculate the standard deviation between the scores of each socioeconomic cohort to compare how far the average achievement scores of students clustered in the top 10 and 25 percent of SES percentiles are from the scores of those students aggregated into the bottom 10 and 25 percentiles of SES. A declining standard deviation would mean that the gaps between the cohorts’ scores are closing. That is not what they find.

As they report at Education Next, the socioeconomic achievement gap among the 1950s birth cohorts is very large—about 1.0 standard deviations between those in the top and bottom deciles of the socioeconomic distribution (the 90–10 gap) and around 0.8 standard deviations between those in the top and bottom quartiles (the 75–25 gap). Measuring cohorts of students born since the 1950s, the SES gap closes by about 0.5 standard deviations for students under age 14. But those gains among young adolescents disappear almost entirely by the time students reach age 17.

The persistence of the SES gap remains when the researchers compare only white students over time, and they take into account such factors as the changing ethnic makeup of American school children.

The researchers note that these disappointing results occurred despite the fact that “overall school funding increased dramatically on a per pupil basis, quadrupling in real dollars between 1960 and 2015.” In addition, pupil-teacher ratios declined from 22.3 in 1970 to 16.1 in 2014.

Why do these gaps persist? The authors suggest that any negative impacts stemming from rise of single-parent families may well be offset by factors that correlate with better educational outcomes, such as fewer siblings and the fact that today’s parents in general are better educated. They hypothesize that a steep decline in the quality of teachers is likely a big factor.

“Because cognitive skills as measured by standard achievement tests are a strong predictor of future income and economic well-being, the unwavering achievement gaps across the SES spectrum do not bode well for improvements in intergeneration mobility in the future,” they observe. “Perhaps more disturbingly, the U.S. has introduced and expanded a set of programs designed to lessen achievement gaps through improving the education of disadvantaged students, but they individually and collectively appear able to do little to close gaps beyond offsetting the probable decline in teacher quality in schools serving lower SES students.”

In light of these findings, Washington Post columnist Robert Samuelson makes some useful suggestions: “The national strategy of controlling the country’s schools—through subsidies and regulatory requirements—has prevailed for half a century. It has failed. The federal government should exit the business of overseeing K-12 education.

Samuelson adds, “We should let states and localities see whether they can make schools work better. The grandiose fix-it national plans are mostly exercises in political marketing. We need solutions, not slogans.”

But much more needs to be and can be done. As former Reason Foundation director of education policy Lisa Snell has pointed out:

Private school students have performed higher on NAEP exams and increasing evidence shows that both charter schools and private choice programs are improving student performance—especially for the most disadvantaged students.

We’ve seen little change in school performance for our pubic high school seniors, despite soaring education costs in traditional public schools. But school choice and competition show promise to improve outcomes for students by allowing families to find the schools and education services that best match their needs. Healthy competition can keeps schools focused on improving the quality of their services to students.

Competition drives continuous improvement in the quality of goods and services in every other part of our economy. It can do the same for educating America’s children too.

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The Curse Of America’s Thinking Class

Authored by James Howard Kunstler via Kunstler.com,

How might we account for the strange melding of neuroticism and dishonesty that has gripped America’s thinking class since the ascent of Donald Trump as an epically reviled figurehead on our ship of state?

It all seems to come down to shame and failure.

There is, for instance, the failure of America’s leading economic viziers to arrest the collapse of the middle class — and with it, the disintegration of families — that more than anything produced the 2016 election result. What is a bigger emergency: the destruction of all those towns, cities, and lives in flyover-land, or the S & P stock index going down twenty points?

The choice made by the “experts” the past ten years is obvious: pump the financial markets at all costs by using dishonest policy interventions which they are smart enough to know will eventually blow up the banking system. They did it to preserve their reputations long enough to retire out of their jobs. The trouble is that the damage is now so extreme that when the time comes for them to apologize it will not be enough. They will lose their freedom and perhaps their heads.

The neuroticism and dishonesty is exactly what turned two of this country’s most sacred and noble endeavors, higher education and medicine, into disgraceful rackets. Sunday night, CBS 60 Minutescovered both bases in their lead story about how the NYU medical school recently declared its program tuition-free. This great triumph was due to an enormous cash gift from one of the founders of the Home Depot company, billionaire Ken Langone. Nowhere in the broadcast did CBS raise the question as to how the cost of a degree became so outrageous in the first place. Or how Mr. Langone made his fortune by putting every local hardware store in America out of business, which enabled him to capture the annual incomes of ten thousand small business owners and their employees. NYU’s grand gesture is just a way to paper over the shame of the University executives’ role in the college loan racket that may destroy countless lives.

Neuroticism and shame is what drives identity politics with all its weird ritual persecutions and punishments. It was the thinking class that led the civil rights campaign of the 1960s. Here we are fifty years later with dozens of ruined cities, failed public school systems, and prisons stuffed with black men way out of proportion to their actual demographic in the general population (nationally 37 percent versus 13 percent). In California, it’s 29 percent while only 6 percent of the state’s male residents are African American. The favored narrative of the thinking class says that the high incarceration rate is due to unfair application of drug laws for relatively minor offenses, especially being caught holding weed.

Okay, marijuana has been legal in California for several years now. Has that altered the statistics? I guess we’ll find out soon. Is there another explanation? Perhaps disproportionate bad behavior of other kinds: assault, robbery, murder? Perhaps the result of government policies engineered by the thinking class to promote single-parent households with no fathers present for three generations now?

After all this time and all the evidence of how pernicious this condition is, why is there no debate about it? Why is the thinking class so dishonest about the most ruinous ingredient in everyday public schooling: bad behavior, violence, and constant classroom disruption. The thinking classes must be ashamed and appalled by all this, since it appears to contradict all the mighty efforts made to uplift the black underclass. And so what was the most notable response? The Obama Department of Education directed school districts to stop suspending and disciplining black kids who behaved badly because it looked bad, and that policy is still in place. How’s that working out?

The latest appeal among the thinking class to remedy these otherwise intractable and embarrassing problems is the panacea of reparations for the descendants of slaves. Of course, the money spent on social services the past half-century, if simply distributed as cash, would have made every African American a millionaire. Personally, I can’t imagine a worse way of ginning up racial animosity across America to the breaking point than these proposed reparations. We will surely hear more about this in the long slog to the 2020 elections, and it will only make the USA look more insane to the rest of the world.

The thinking class’s position on both legal and illegal immigration is possibly even more cynical — because they surely know how dishonest it is, even through the fog of self-deception. Last week California’s attorney general Xavier Becerra proposed that illegal immigration be decriminalized. Surprisingly, nobody laughed at this extraordinary exercise in casuistry. Meanwhile, the state slides into hopeless insolvency, squalor, and chaos — a reminder that people don’t necessary get what they expect, but rather what they deserve.

RussiaGate, of course, has been the most acute locus of neurotic dishonesty across this land the past two years. The primary information organs of the thinking class — The New York Times, The WashPo, CNN, MSNBC — have not only omitted to apologize for the dangerous hysteria they knowingly propagated, but they persist in supporting the matrix of fantasies at all costs in what must now be seen as a hopeless attempt to preserve their reputations and perhaps even their livelihoods. The repudiation of this nonsense by chief inquisitor Robert Mueller could not be more absolute, even if he was compelled by reality against his own wishes and instincts to do it.

And now, what avenue will all this diseased animus of the thinking class go down in its destructive, shame-fueled frenzy to justify itself?

via ZeroHedge News http://bit.ly/2IkJHvp Tyler Durden

Will a Free Press Cheer on Government Censorship of the Internet?

Internet CensorshipThe United Kingdom appears to be following in the footsteps of the European Union and Australia in trying to punish online platforms that don’t censor content the way government officials want them to.

The British authorities are pondering a proposal to create an entirely new government agency to regulate, and even punish, online communication platforms to make them more thorough in removing content the government deems dangerous or violent.

There isn’t a full-fledged plan yet—more of a blueprint of what lawmakers would like to get passed. But the intent is very clear: The government wants to hold executives at various tech companies liable, financially and possibly even criminally, for content that officials do not want posted online.

Sadly, this move should not be surprising. Every outrage has led to more calls for regulation, and the viral distribution of videos of the recent massacre in Christchurch, New Zealand, may finally be the tipping point, or at least the latest excuse.

What may be more surprising is how willing people in the media—people whose work depends on the right to a free press—are to frame this as a story of wise leaders holding the feet of those irresponsible, profit-grubbing Silicon Valley tech bros to the fire.

Consider Tony Romm’s report on the British plan, published in The Washington Post. It contains a lot of loaded language for what is supposed to be a straightforward news story. The lede to Romm’s piece describes these online companies as having “long dodged responsibility for what its users say or share,” not-so-subtly suggesting that Facebook and Google are getting away something sinister. The article later says these companies face this regulation because they are “failing to clean up a host of troubling content.”

Romm uses the “experts said” route (he literally uses the words “experts said”) to suggest that these regulations could stop the reach of violent content online, yet the only individual human beings quoted in his story are government officials. His example of an “expert” is U.K. Prime Minister Theresa May, who is proving to be no expert in anything at all.

The story ends with a quote from Sajid Javid, U.K.’s home secretary (the cabinet-level position overseeing national security), saying they’re “forcing these firms to clean up their act once and all.” That leaves readers with a message that these companies are doing something wrong by not engaging in enough censorship that pleases the government.

Romm also links to a pro-censorship “Somebody do something!” panicked commentary by Margaret Sullivan that insists that social media companies have to “deal with the crisis that they helped create” by using “editorial judgment” to control what can be said on their platforms, just like news outlets do.

The punchline: Directly under Sullivan’s panicked fearmongering are 1,300 comments posted by readers. They were not, in fact, hand-picked by the Washington Post‘s editors. Here’s how their professional judgment works when it comes to online participation:

Most discussions on The Post are post-moderated, which means reader comments appear almost instantaneously. We do this to foster an organic discussion without delay, but this also means comments that go against the rules may appear before they’re removed.

Our team moderates discussions 24/7, but we rely on the community to help police discussions. If you see a post against the rules, use the flag button to report it. Reports go directly to our team, so be judicious.

Alternatively, readers can block posts from other commenters by muting them. To do this, click their display name and select “Ignore.” You can unmute a reader by going to your profile.

So not even the Washington Post operates the way Sullivan wants. If, say, the U.S. government were to fine the Washington Post if somebody posted an inappropriate comment and their moderators didn’t delete it fast enough, how long would it take for commenting to be removed entirely? Many in the media (myself included) have a love-hate relationship with commenters, so it wouldn’t be surprising if some people at the Post actually want such an outcome. It would be a soft form of government censorship, because it wouldn’t be directly imposed. The Post itself would make the decision—but only because of its fear of fines.

Over at the BBC, technology reporter Chris Fox actually went through the effort to talk to people who value online speech freedom, rather than just leaving this story presentation as though it was about wise regulators bringing feckless tech monsters to heel:

Jim Killock, executive director of Open Rights Group, said the government’s proposals would “create state regulation of the speech of millions of British citizens”.

Matthew Lesh, head of research at free market think tank the Adam Smith Institute, went further.

He said: “The government should be ashamed of themselves for leading the western world in internet censorship.

“The proposals are a historic attack on freedom of speech and the free press.

“At a time when Britain is criticising violations of freedom of expression in states like Iran, China and Russia, we should not be undermining our freedom at home.”

Rather than leaving readers with a government official demanding more control over the Internet for all our own good, Fox chose to end his story with a warning from civil libertarians that these proposals from the United Kingdom could “violate individuals’ rights to freedom of expression and privacy.”

They’re absolutely right to be worried.

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Automakers Stuff Fleet Channels Amid Showroom Demand Collapse

Fleet sales – those to rental companies – have been for a long time the dirty little secret of the automobile industry. They are often times where automakers can bolster numbers that would otherwise looks dismal based only on organic, showroom sales. And according to Bloomberg, this is exactly what has been happening over the last couple of months.

Rental car deliveries and other non-retail buyers have accounted for more than 33% of total sales last month for Ford and Nissan, according to data from Cox automotive. In fact, deliveries to rental companies alone in March and in the first quarter were the highest that they’ve been in two years.

There is, of course, a catch: rental car sales have lower profit margins and generally erode used vehicle prices once they hit the resale market. It seems as though automakers are now, more than in the past few years, leaning on fleet deliveries to make up for demand in the showroom as economic growth in the US and worldwide, is collapsing. 


Zohaib Rahim, manager of economics and industry insights at Cox, told Bloomberg: “Any favorable view we have of the market is because of sales into fleets. The market peak of 2016 is behind us and retail sales are softening more and more now.”

Automakers sold 550,000 vehicles to rental car companies in the first quarter, the most since the first quarter of 2016 and up 6% so far this year. This increase comes on top of a 7% gain in 2018 to 2.7 million. This surge helps explain the resilience of the auto market of late: sales have been down every month this year, but the annualized selling rate has improved to 17.45 million.

Of all auto makers, Ford leaned on fleets the most in March, with its fleet deliveries accounting for 39% of sales, including 19% from rental car companies. The automaker is discontinuing models like the Focus that used to be significant volume contributors.

Ford says it expects these fleet sales to “smooth out over the course of the year” and that they were “dictated by the timing of orders from rental companies”. Oh, but of course, we’re sure it’s all just one big coincidence.

Mark LaNeve, Ford’s U.S. sales chief, said: “Our plans are to end 2019 down slightly in the rental channel. The retail performance was strong where it needed to be, in trucks and new SUVs.”

Nissan’s total fleet share was equally as significant, at 36%, with “most” of the volume going to rental lots.

  • General Motors saw deliveries drop 7% for the quarter, with all four brands falling
    • Chevy Silverado was down 16%
    • Chevy Suburban dropped 25%
  • Fiat Chrysler sales fell 7.3% (estimates were for a decline of 6.4%)
    • Jeep sales fell 11%, continuing the February trend of SUV demand drying up
  • Toyota sales fell 3.5%
    • This beat estimates for the month, but still showed softness
    • Toyota also fell 5% for the first quarter, hurt by a decline in demand for its Corolla
    • Nissan sales were down 5.3% in March
      • Nissan’s first quarter sales were down 11.6%
      • Deliveries fell 23% for its Infiniti brand
    • Ford sales were down 5% in March, according to industry data
      • The company is expected to show a 2% decline for the quarter
    • Honda saw a 4.3% percent increase, as passenger car sales rose more than 4%.
      • Accord sales were up 5%

    And that’s with the fleet channel stuffing. We can only imagine what happens later this year when the rental companies no longer have capacity to buy whatever the OEMs have to liquidate…

    via ZeroHedge News http://bit.ly/2IjImFf Tyler Durden

    Uninsured Farmers Face Existential Crisis As Floods Destroy 100s Of Millions Of Dollars In Crops

    Authored by Michael Snyder via The End of The American Dream blog,

    This is the worst economic disaster for U.S. farmers in modern American history. 

    Our ongoing trade war with China had greatly depressed prices for wheat, corn and soybeans, and so farmers were storing more crops on their farms than ever before in early 2019.  And then the floods came.  The water moved so fast that the vast majority of the farmers in the affected areas could not have moved what they had stored even if they wanted to, and the scale of the losses that these farmers have suffered is starting to become clearer. 

    According to UPI, “hundreds of millions of dollars in crops” that were destroyed by the flooding were not covered by insurance…

    Hundreds of millions of dollars in crops destroyed in Midwestern floods this month were not insured, farmers say. And the losses could leave many without sufficient income to continue farming.

    “This uninsured grain issue is really starting to affect people,” said Jeff Jorgenson, a western Iowa corn and soy grower whose farm flooded when the Missouri River spilled over its banks March 12.

    Without an extraordinary amount of assistance, there are thousands of farmers that will never be able to come back from this.

    One fifth-generation farmer that was interviewed by Fox News said that about 7 million dollars worth of grain was destroyed in his county alone…

    Dustin Sheldon, a fifth-generation grain and soybean farmer, watched in horror as the floods that devastated the Midwest began to recede and he could assess the damage to his crops.

    He said the record-breaking floods caused about $1 million in losses for his family farm.

    “We figured that there is roughly $7 million worth of grain sitting in these grain bins here just in our county alone that is either destroyed or inaccessible right now that we won’t even be able to get to or sell,”he said. “Financially, there’s a lot of farmers that can’t come back from that and they may be out of business.”

    According to government regulations, when stored crops get flooded they must be destroyed.

    And unfortunately, the government also doesn’t have any sort of a program to cover those losses.  In fact, USDA Under Secretary Bill Northey told Reuters that “there’s nothing the U.S. government can do to help”…

    Hundreds of farmers may be out of luck trying to recuperate losses after last month’s historic floods in the Midwest. Millions of bushels of grains were destroyed in more than 800 on-farm storage bins – mostly in eastern Nebraska and western Iowa – and U.S. Department of Agriculture (USDA) Under Secretary Bill Northey recently told Reuters that, under current laws and disaster aid programs, there’s nothing the U.S. government can do to help.

    Of course Congress could pass a law to change all that, but right now that is not happening and it does not appear likely to happen.

    This is yet another example that shows who we send to Congress really matters.  If I had won my race for Congress, I would be endlessly causing havoc until our farmers got the emergency assistance that they desperately need.

    Because as it stands, thousands of farmers that have been financially ruined by this flooding are going to be forced out of the profession forever.

    For 71-year-old farmer Bruce Biermann, it looks like the end has come after the floodwaters destroyed more than $100,000 worth of his stored crops…

    The two grain bins on Bruce Biermann’s farm near Corning, Missouri, could not withstand the strong currents of the Missouri River.

    With four feet of water pressing from the outside and grain swelling from moisture inside, the bins burst.

    At 71, Biermann is looking at more than a $100,000 loss.

    Because of the trade war, he had been storing 12,000 bushels of corn and 8,200 bushels of soybeans until prices went up again.

    Now all of that hard work has been washed away, and no help is on the horizon.

    33-year-old farmer Travis Green has a similar story…

    Travis Green, 33, who operates farms in both Kansas and Nebraska, stored 25,000 bushels of yellow corn in a pair of grain bins in White Cloud, Kansas, near the Missouri River.

    One of the bins “literally just blasted open,” after it filled with floodwater and the other was uprooted— destroying an estimated $100,000 worth of corn. On top of that, he’s unsure whether he’ll be able to plant anything this year because of the water damage.

    Even before the floods came, U.S. farm incomes had already sunk to a 12 year low.  America’s farmers need our help more than ever, and yet Congress has chosen to abandon them.

    Overall, AccuWeather is now estimating that the total amount of economic damage from all of this flooding will reach 12.5 billion dollars…

    AccuWeather estimates the total damage and economic loss caused by record-breaking flooding in the Midwestern U.S. this spring will total $12.5 billion, based on an analysis of damages already inflicted and those expected by additional flooding, as well as the lingering health effects resulting from flooding and the disease caused by standing water.

    Personally, I think that number is too low, but we will see.

    And remember, a lot more flooding is still on the way.  Just check out what one expert is saying…

    “We’re not done. There is what amounts to a wall of water that will cross the state of Missouri, by way of the Missouri River, and meet a rapidly rising Mississippi River,” Dr. Hurburgh says.

    The snow in Wisconsin and Minnesota is melting this week, and flooding is expected in northern Illinois and southern Wisconsin. That’s all going to end up in the Mississippi River, at a point, he says.

    In addition, a lot more rainfall is coming too.  In fact, powerful storms are set to dump up to 6 inches of rain across the southern portion of the country through Monday night…

    In addition, the prolonged period of wet, stormy weather will only exacerbate and worsen the ongoing flooding issues on the Mississippi River and its tributaries.

    Through Monday night, the highest rainfall totals of 3 to 6 inches are forecast to extend from eastern Texas and western Louisiana into southeastern Arkansas, northern Mississippi and western parts of the Tennessee Valley.

    Overall, at least a million acres of U.S. farmland were covered by water by the recent floods.  It is a disaster that we will be talking about for a very long time to come.

    Unfortunately, time is not on the side of the thousands of farmers that have been financially ruined by this great tragedy.

    Congress needs to act, and they need to do so quickly.

    via ZeroHedge News http://bit.ly/2IlMrso Tyler Durden

    Trump Administration Labels Iran’s Revolutionary Guard Corps a ‘Terrorist Organization’

    The Trump administration said today that it is designating a powerful Iranian paramilitary organization as a foreign terror group.

    The Islamic Revolutionary Guard Corps (IRGC) has long faced accusations of sponsoring global acts of terror. A White House press release cites several examples, including an alleged 2011 plot to assassinate Saudi Arabia’s ambassador to the United States. The IRGC has also been known to support various militant groups in the Middle East.

    “The Iranian regime is the leading state sponsor of terror,” says the press release. “It exports dangerous missiles, fuels conflicts across the Middle East, and supports terrorist proxies.”

    “This action sends a clear message to Tehran that its support for terrorism has serious consequences,” President Donald Trump declares in a separate statement. “We will continue to increase financial pressure and raise the costs on the Iranian regime for its support of terrorist activity until it abandons its malign and outlaw behavior.”

    The IRGC is not part of Iran’s normal military, though it is a government organization that answers to the nation’s supreme leader. This move—the first time the U.S. has labeled an entity within another government as a terror organization—means any American conducting business with the IRGC could face criminal charges.

    Secretary of State Mike Pompeo says it will be another week before the new designation takes effect.

    Relations between Iran and the U.S. have been tense for a while, especially since Trump withdrew last year from the two nations’ Obama-era nuclear deal. “We will answer any action taken against [the IRGC] with a reciprocal action,” says a statement issued by a majority of Iranian lawmakers, according to Reuters. “So the leaders of America, who themselves are the creators and supporters of terrorists in the [Middle East] region, will regret this inappropriate and idiotic action.”

    Iranian Foreign Minister Mohammad Javad Zarif has reportedly sent a letter to President Hassan Rouhani calling on Iran to label U.S. military forces in the Middle East “terrorist groups.” Since then, Iran has dubbed the U.S. a “supporter of terrorism” and the U.S. Central Command a terror group.

    Trump’s action came after much debate within the administration, The New York Times reports, with Pompeo and National Security Adviser John Bolton pushing for the designation.

    “There is a reason that successive administrations have held off designating the I.R.G.C. as a terrorist organization, and why many of Trump’s own military and intelligence officials are said to be highly opposed to the move: The potential blowback vastly outweighs the benefits,” Jeffrey Prescott, a Obama-era member of the White House National Security Council, tells the Times. “It will put our service members in Iraq and throughout the region at additional risk with nothing to show in return.”

    John Glaser, director of foreign policy studies at the libertarian Cato Institute, expressed similar sentiments on Twitter:

    The IRGC is, no doubt, a shady organization that does very bad things. But officially labeling it a terror group won’t necessarily decrease, and may well increase, its willingness and ability to cause harm.

    from Hit & Run http://bit.ly/2VxFHLN
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    Trump Fires Head Of Secret Service

    Following former Homeland Security Secretary Kirstjen Nielsen’s Sunday resignation due to her “abysmal failure” to curb the crisis at the southern border (indeed, the number of migrants and asylum seekers pouring into the US has reached unprecedented levels this year), President Trump appears to be embarking on a purge of all Nielsen’s allies and direct reports – starting with Secret Service Director Randolph “Tex” Alles.

    Alles

    Secret Service Director Randolph “Tex” Alles

    According to CNN, Trump has asked Chief of Staff Mick Mulvaney to fire Alles. Alles is reportedly aware that he will soon be pushed out, but his departure hasn’t yet been made official. One of CNN’s sources described Alles’ ouster as part of a “near systematic purge” as Stephen Miller, who has been charged with running the administration’s immigration policy, consolidates power. One official described Miller’s purge as a “wholesale decapitation” of DHS.

    “There is a near-systematic purge happening at the nation’s second-largest national security agency,” one senior administration official says.

    And Alles’s likely won’t be the last head to roll at DHS. Two other top officials are reportedly on their way out.

    United States Citizenship and Immigration Services director Francis Cissna and Office of the General Counsel’s John Mitnick are expected to be gone soon, and the White House is eyeing others to be removed.

    A former marine, Alles was recommended for the post by former White House Chief of Staff John Kelly, who ran the department before his move to the West Wing, per the AP.

    Notably, Alles firing may also be related to an embarrassing episode for the secret service after a Chinese woman illegally entered the President’s Mar-a-Lago club carrying four cell phones, two passports, electronic devices and a thumb-drive containing malware. Whatever the reason, the White House and DHS declined to comment to CNN on the matter.

    via ZeroHedge News http://bit.ly/2VrlgQN Tyler Durden