American Society Would Collapse If It Weren’t For These 8 Myths

Authored by Lee Camp via TruthDig.com,

Our society should’ve collapsed by now. You know that, right?

No society should function with this level of inequality (with the possible exception of one of those prison planets in a “Star Wars” movie). Sixty-three percent of Americans can’t afford a $500 emergency. Yet Amazon head Jeff Bezos is now worth a record $141 billion. He could literally end world hunger for multiple years and still have more money left over than he could ever spend on himself.

Worldwide, one in 10 people only make $2 a day. Do you know how long it would take one of those people to make the same amount as Jeff Bezos has? 193 million years. (If they only buy single-ply toilet paper.) Put simply, you cannot comprehend the level of inequality in our current world or even just our nation.

So … shouldn’t there be riots in the streets every day? Shouldn’t it all be collapsing? Look outside. The streets aren’t on fire. No one is running naked and screaming (usually). Does it look like everyone’s going to work at gunpoint? No. We’re all choosing to continue on like this.

Why?

Well, it comes down to the myths we’ve been sold. Myths that are ingrained in our social programming from birth, deeply entrenched, like an impacted wisdom tooth. These myths are accepted and basically never questioned.

I’m going to cover eight of them. There are more than eight. There are probably hundreds. But I’m going to cover eight because (A) no one reads a column titled “Hundreds of Myths of American Society,” (B) these are the most important ones and (C) we all have other shit to do.

Myth No. 8—We have a democracy.

If you think we still have a democracy or a democratic republic, ask yourself this: When was the last time Congress did something that the people of America supported that did not align with corporate interests? … You probably can’t do it. It’s like trying to think of something that rhymes with “orange.” You feel like an answer exists but then slowly realize it doesn’t. Even the Carter Center and former President Jimmy Carter believe that America has been transformed into an oligarchy: A small, corrupt elite control the country with almost no input from the people. The rulers need the myth that we’re a democracy to give us the illusion of control.

Myth No. 7—We have an accountable and legitimate voting system.

Gerrymandering, voter purging, data mining, broken exit polling, push polling, superdelegates, electoral votes, black-box machines, voter ID suppression, provisional ballots, super PACs, dark money, third parties banished from the debates and two corporate parties that stand for the same goddamn pile of fetid crap!

What part of this sounds like a legitimate election system?

No, we have what a large Harvard study called the worst election system in the Western world. Have you ever seen where a parent has a toddler in a car seat, and the toddler has a tiny, brightly colored toy steering wheel so he can feel like he’s driving the car? That’s what our election system is—a toy steering wheel. Not connected to anything. We all sit here like infants, excitedly shouting, “I’m steeeeering!”

And I know it’s counterintuitive, but that’s why you have to vote. We have to vote in such numbers that we beat out what’s stolen through our ridiculous rigged system.

Myth No. 6—We have an independent media that keeps the rulers accountable.

Our media outlets are funded by weapons contractors, big pharma, big banks, big oil and big, fat hard-on pills. (Sorry to go hard on hard-on pills, but we can’t get anything resembling hard news because it’s funded by dicks.) The corporate media’s jobs are to rally for war, cheer for Wall Street and froth at the mouth for consumerism. It’s their mission to actually fortify belief in the myths I’m telling you about right now. Anybody who steps outside that paradigm is treated like they’re standing on a playground wearing nothing but a trench coat.

Myth No. 5—We have an independent judiciary.

The criminal justice system has become a weapon wielded by the corporate state. This is how bankers can foreclose on millions of homes illegally and see no jail time, but activists often serve jail time for nonviolent civil disobedience. Chris Hedges recently noted, “The most basic constitutional rights … have been erased for many. … Our judicial system, as Ralph Nader has pointed out, has legalized secret law, secret courts, secret evidence, secret budgets and secret prisons in the name of national security.”

If you’re not part of the monied class, you’re pressured into releasing what few rights you have left. According to The New York Times, “97 percent of federal cases and 94 percent of state cases end in plea bargains, with defendants pleading guilty in exchange for a lesser sentence.”

That’s the name of the game. Pressure people of color and poor people to just take the plea deal because they don’t have a million dollars to spend on a lawyer. (At least not one who doesn’t advertise on beer coasters.)

Myth No. 4—The police are here to protect you. They’re your friends.

That’s funny. I don’t recall my friend pressuring me into sex to get out of a speeding ticket. (Which is essentially still legal in 32 states.)

The police in our country are primarily designed to do two things: protect the property of the rich and perpetrate the completely immoral war on drugs—which by definition is a war on our own people.

We lock up more people than any other country on earth. Meaning the land of the free is the largest prison state in the world. So all these droopy-faced politicians and rabid-talking heads telling you how awful China is on human rights or Iran or North Korea—none of them match the numbers of people locked up right here under Lady Liberty’s skirt.

Myth No. 3—Buying will make you happy.

This myth is put forward mainly by the floods of advertising we take in but also by our social engineering. Most of us feel a tenacious emptiness, an alienation deep down behind our surface emotions (for a while I thought it was gas). That uneasiness is because most of us are flushing away our lives at jobs we hate before going home to seclusion boxes called houses or apartments. We then flip on the TV to watch reality shows about people who have it worse than we do (which we all find hilarious).

If we’re lucky, we’ll make enough money during the week to afford enough beer on the weekend to help it all make sense. (I find it takes at least four beers for everything to add up.) But that doesn’t truly bring us fulfillment. So what now? Well, the ads say buying will do it. Try to smother the depression and desperation under a blanket of flat-screen TVs, purses and Jet Skis. Nowdoes your life have meaning? No? Well, maybe you have to drive that Jet Ski a little faster! Crank it up until your bathing suit flies off and you’ll feel alive!

The dark truth is that we have to believe the myth that consuming is the answer or else we won’t keep running around the wheel. And if we aren’t running around the wheel, then we start thinking, start asking questions. Those questions are not good for the ruling elite, who enjoy a society based on the daily exploitation of 99 percent of us.

Myth No. 2—If you work hard, things will get better.

According to Deloitte’s Shift Index survey: “80% of people are dissatisfied with their jobs” and “[t]he average person spends 90,000 hours at work over their lifetime.” That’s about one-seventh of your life—and most of it is during your most productive years.

Ask yourself what we’re working for. To make money? For what? Almost none of us are doing jobs for survival anymore. Once upon a time, jobs boiled down to:

I plant the food—>I eat the food—>If I don’t plant food = I die.

But nowadays, if you work at a café—will someone die if they don’t get their super-caf-mocha-frap-almond-piss-latte? I kinda doubt they’ll keel over from a blueberry scone deficiency.

If you work at Macy’s, will customers perish if they don’t get those boxer briefs with the sweat-absorbent-ass fabric? I doubt it. And if they do die from that, then their problems were far greater than you could’ve known. So that means we’re all working to make other people rich because we have a society in which we have to work. Technological advancements can do most everything that truly must get done.

So if we wanted to, we could get rid of most work and have tens of thousands of more hours to enjoy our lives. But we’re not doing that at all. And no one’s allowed to ask these questions—not on your mainstream airwaves at least. Even a half-step like universal basic income is barely discussed because it doesn’t compute with our cultural programming.

Scientists say it’s quite possible artificial intelligence will take away all human jobs in 120 years. I think they know that will happen because bots will take the jobs and then realize that 80 percent of them don’t need to be done! The bots will take over and then say, “Stop it. … Stop spending a seventh of your life folding shirts at Banana Republic.”

One day, we will build monuments to the bot that told us to enjoy our lives and … leave the shirts wrinkly.

And this leads me to the largest myth of our American society.

Myth No. 1—You are free.

And I’m not talking about the millions locked up in our prisons. I’m talking about you and me. If you think you’re free, try running around with your nipples out, ladies. Guys, take a dump on the street and see how free you are.

I understand there are certain restrictions on freedom we actually desire to have in our society—maybe you’re not crazy about everyone leaving a Stanley Steamer in the middle of your walk to work. But a lot of our lack of freedom is not something you would vote for if given the chance.

Try building a fire in a parking lot to keep warm in the winter.

Try sleeping in your car for more than a few hours without being harassed by police.

Try maintaining your privacy for a week without a single email, web search or location data set collected by the NSA and the telecoms.

Try signing up for the military because you need college money and then one day just walking off the base, going, “Yeah, I was bored. Thought I would just not do this anymore.”

Try explaining to Kentucky Fried Chicken that while you don’t have the green pieces of paper they want in exchange for the mashed potatoes, you do have some pictures you’ve drawn on a napkin to give them instead.

Try running for president as a third-party candidate. (Jill Stein was shackled and chained to a chair by police during one of the debates.)

Try using the restroom at Starbucks without buying something … while black.

We are less free than a dog on a leash. We live in one of the hardest-working, most unequal societies on the planet with more billionaires than ever.

Meanwhile, Americans supply 94 percent of the paid blood used worldwide. And it’s almost exclusively coming from very poor people. This abusive vampire system is literally sucking the blood from the poor. Does that sound like a free decision they made? Or does that sound like something people do after immense economic force crushes down around them? (One could argue that sperm donation takes a little less convincing.)

Point is, in order to enforce this illogical, immoral system, the corrupt rulers—most of the time—don’t need guns and tear gas to keep the exploitation mechanisms humming along. All they need are some good, solid bullshit myths for us all to buy into, hook, line and sinker. Some fairy tales for adults.

It’s time to wake up.

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Hilarious Straw Ban Memes Hit on the Dark Truth That All Laws Require Force

The straw bans sweeping the nation have been nothing but bad news for liberty lovers, disabled people, and boba tea enthusiasts, but they have produced some choice memes:

Those don’t just make me laugh out loud. They hint at a darker truth about straw bans, a fact these policies’ proponents prefer to ignore: All laws ultimately rest on state violence.

This point is often greeted with eyerolls and snorts from straw ban apologists, who would rather focus on their good intentions than the coercive powers needed to bring their rules into effect.

Indeed, when I reported last week that Santa Barbara’s straw ban included a punishment of up to six months in jail and $1,000 in fines per straw, a spokesperson for a prominent environmentalist group emailed to inform me that focusing on the penalties was “unprofessional” and “inaccurate” because they would never actually be enforced, even after a third or fourth violation.

Santa Barbara officials have made a similar argument. Asked about the ban by a local ABC affiliate, the city’s environmental services outreach coordinator said that locking people up for straws is only “a last line of defense” and isn’t intended “for first-time offenders.” But he wouldn’t rule out the possibility of jail time, and he clearly thinks some circumstances might warrant such a severe sanction. So do the councilmembers that voted for the law.

Even when jail time is not an explicitly authorized punishment, a law will still require enforcement. That increases the likelihood of police encounters—and, thus, the chances that someone will get hurt in the course of such an encounter. One need only remember the cases of Eric Gardner (killed by police who were arresting him for selling untaxed cigarettes) or Philando Castile (shot to death during a routine traffic stop) to know that this is a possibility.

Those are extreme examples, of course; chances aren’t high that cops will start gunning people down for selling straws on the street corner. But I do expect to see more of these “summer of snitches“/”nation of narcs” incidents where some local busybody decides to call the cops on a local restaurant, a food truck, or maybe even some kid’s lemonade stand for handing out now-prohibited straws.

If that happens, the straw warriors who brought us these bans might insist that this was never their intention. But it will nevertheless be a direct consequence of their crusade.

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Carnage Everywhere

Well that happened…

As a reminder, Despite all the hoopla, GDP missed…leaving US Macro data at its weakest relative to expectations since…

 

China stocks rolled over…

 

And Yuan collapsed…

 

European stocks rallied on the week after the EU-US trade “deal”…

 

In the US Nasdaq and Small Caps were clubbed like a baby seal… Trannies and the Dow outperformed…

 

But futures show the chaotic moves around earnings from the FANGs…

 

Tech stocks were wrecked this week…

 

FANGs collapsed to 2-month lows…

 

All those no-brainers bloodbath’d…

 

Growth was puked as value soared back on the month…

 

Today was the worst day for tech stocks relative to banks since Dec 2017

 

A major factor shift…

 

JGB yields exploded to their highest since Feb 2017…

 

This was the worst week for absolute Treasury yield rise in over 2 months and extends last Friday’s BoJ-based bond battering…

 

The Treasury yield curve flattened very modestly on the week but remains notably steeper from pre-BOJ…

 

The Dollar ended lower for the second week in a row…

 

Yuan collapsed to fresh lows…

 

Cryptos had a good week, bouncing back today from last night’s SEC disappointment…

 

Copper and Crude fell today as PMs rallied but the story is flipped for the week…

 

Summing up the week – Techs Wrecked, China Choked, Bonds were Battered, But Bitcoin held a Bid

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Watch: Do Alexandria Ocasio-Cortez Supporters Understand Socialism?

Authored by Cabot Philips via Campus Reform,

Last month, 28 year-old Alexandria Ocasio-Cortez shocked the world by defeating incumbent Rep. Joe Crowley to earn the Democratic nomination in New York’s 14th Congressional District.

Ocasio-Cortez gained notoriety nationwide not just for her youth, but for her unabashed embrace of Democratic Socialism.

In her official platform, Ocasio-Cortez offers support for free college, “housing as a human right”,  “medicare for all,” and a mandatory minimum living wage.

Wanting to know if her supporters liked the idea of Democratic Socialism, and if they’d support the government offering these services for free, I headed to Ocasio-Cortez’s district, in Astoria, NY. 

People on the street were quick to offer support for Ocasio-Cortez’s brand of socialism, and overwhelmingly supported her vision for the district.

They were more hesitant, however, to offer ideas for how to pay for all of the free things that Ocasio-Cortez is promising.

“I don’t know where the money would come from, but they can figure it out,” one person stated confidently.

“Oh, God… Us, I guess,” conceded another.

One supporter seemed to think Americans would be okay with paying higher taxes, saying “with a good idea, and a good reason to spend their tax money, people wouldn’t actually mind paying more taxes.”

Another admitted that they’re not quite sure what it is that they like about Ocasio-Cortez’s economic philosophy, but insisted that “I just know that democratic socialist is better than conservative.”

What would these people think when asked how socialism is working in Venezuela?

Watch the full videoto find out!

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“I Dissent” – Why One SEC Commissioner Thinks A Bitcoin ETF Is Overdue

Following news last night that The SEC decided to reject The Winklevoss twins’ Bitcoin ETF application, the cryptocurrency fell just 2% and stabilized, suggesting, in and of itself, that Bitcoin may have matured somewhat…

And judging by SEC Commissioner Hester Pierce‘s “I Dissent” response and tweet exclaiming “Apparently, bitcoin is not ripe enough, respectable enough, or regulated enough to be worthy of our markets. I dissent”

…we suspect she feels the same way.

Pierce published her full dissent opinion on The SEC site:

I respectfully dissent from the Commission’s order disapproving a proposed rule change, as amended, to list and trade shares of the Winklevoss Bitcoin Trust on Bats BZX Exchange, Inc. (“BZX”).[1] As the order notes, in reviewing such a proposed rule change, the Commission considers whether the proposed change is consistent with the Securities Exchange Act of 1934 (“Exchange Act”) and the rules and regulations thereunder.[2] Contrary to the Commission’s determination, I believe that the proposed rule change satisfies the statutory standard and that we should permit BZX to list and trade this bitcoin-based exchange-traded product (“ETP”). Accordingly, I would set aside the action the staff took by delegated authority in this matter and approve the proposed rule change.

In addition, I am concerned that the Commission’s approach undermines investor protection by precluding greater institutionalization of the bitcoin market. More institutional participation would ameliorate many of the Commission’s concerns with the bitcoin market that underlie its disapproval order. More generally, the Commission’s interpretation and application of the statutory standard sends a strong signal that innovation is unwelcome in our markets, a signal that may have effects far beyond the fate of bitcoin ETPs. I will discuss each of these issues in turn.

I. The Proposed Rule Change Satisfies the Requirements of Exchange Act Section 6(b)

The Commission is disapproving BZX’s proposed rule change because it finds the proposed rule inconsistent with Section 6(b)(5) of the Act, which requires, in part, that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices [and] to protect investors and the public interest.” The Commission focuses its decision not on the ETP shares to be listed on the exchange but on the underlying bitcoin spot market. It rejects BZX’s argument that the underlying bitcoin market is resistant to manipulation and, contending that BZX does not have surveillance-sharing agreements with one or more regulated markets of significant size in the bitcoin spot market, finds that the proposed rule does not comply with Section 6(b)(5).

The Commission erroneously reads the requirements of Section 6(b)(5). The disapproval order focuses on the characteristics of the spot market for bitcoin, rather than on the ability of BZX—pursuant to its own rules—to surveil trading of and to deter manipulation in the ETP shares listed and traded on BZX. Section 6(b)(5), however, instructs the Commission to determine whether “[t]he rules of the exchange” are, among other things, “designed to prevent fraudulent and manipulative acts and practices [and] to promote just and equitable principles of trade,” and “are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers.”[3] It says nothing about looking at underlying markets, as the Commission often has done in its orders.

I am persuaded that the rules of the exchange satisfy the Section 6(b)(5) standard. As detailed in the exchange’s proposed rule filing, the shares of the Winklevoss Bitcoin Trust (“Trust”) would trade under BZX Rule 14.11(e)(4), which governs the listing and trading of Commodity-Based Trust Shares.[4] This rule would require the ETP shares to meet initial and continued listing standards.[5]It also would impose obligations on registered market makers in the shares intended to deter market manipulation and other misconduct, including limitations on certain trading activities and a requirement to make available to BZX certain records of transactions by such market makers.[6]BZX would have the ability to halt trading in the ETP shares, including in response to market conditions that are inconsistent with the maintenance of a fair and orderly market.[7] These requirements together convince me that BZX’s proposal to list the ETP shares under its rules is consistent with Section 6(b)(5).

Because the disapproval order focuses on the bitcoin spot market, it does not give adequate weight to the important function that exchanges, as self-regulatory organizations (“SROs”), perform under our regulatory framework. BZX should, and would, play a central role in monitoring trading in shares of the Trust. In performing that function, BZX would exercise the responsibilities entrusted to it as an SRO and would be subject to Commission oversight. In exercising these responsibilities, BZX would have powerful regulatory and business incentives to ensure the integrity of the products that it lists for trading. Nothing in the record suggests that BZX is unwilling or unable to fulfill its responsibilities under the Exchange Act.

Approval of this order would demonstrate our commitment to acting within the scope of our limited role in regulating the securities markets. The Commission’s mission historically has been, and should continue to be, to ensure that investors have the information they need to make intelligent investment decisions and that the rules of the exchange are designed to provide transparency and prevent manipulation as market participants interact with each other.

The Commission steps beyond this limited role when it focuses instead on the quality and characteristics of the markets underlying a product that an exchange seeks to list. As today’s disapproval order states, many previous orders approving other ETPs have noted the existence of surveillance-sharing agreements between the ETP-listing exchange and regulated exchanges that trade in the underlying product. It is not clear that these agreements were essential to the Commission’s prior decisions to approve other ETPs. Even if they were determinative in prior decisions, I do not believe that an analysis of such agreements or of the nature of the underlying market was ever appropriate under Section 6(b)(5).[8]

The concerns underlying the disapproval order go to the merits of bitcoin—and thus the bitcoin-based ETP at issue here—as an investment. The order raises concerns about potential future actions of potential large holders of bitcoin,[9] academic speculation about past manipulation in the market,[10] and the lack of regulation of the spot market.[11] Indeed, if the disapproval order’s rigorous standard were applied consistently, many commodity-based ETPs would be in peril, as rumors of manipulation plague many commodity markets,[12] and surveillance-sharing agreements with regulated markets cannot eliminate the sometimes messy nature of the commodities markets. Moreover, because it opines at length about the quality of the bitcoin spot market, the disapproval order suggests that, when we do finally approve an ETP on bitcoin (or any other product traded in a non-traditional market), investors may reasonably—but incorrectly—conclude that the investment carries with it the SEC’s imprimatur because the Commission has performed due diligence on the underlying market and, through its approval, is certifying the quality of that market.

For all of these reasons, I would limit review of BZX’s rule filing to a consideration of whether the exchange’s rules governing the trading of the ETP shares are consistent with Exchange Act Section 6(b)(5). Based on the record before the Commission, I find that they are consistent and would approve the rule filing.

Even if I accepted the majority’s approach and focused on the underlying bitcoin markets, I would reach the same conclusion. As an initial matter, I am not convinced that the Commission’s emphasis in recent orders on whether there is a “regulated market of significant size” for the underlier, as that phrase is interpreted by the Commission in the disapproval order, is the appropriate test under our prior approval orders.[13] It is well established that privately generated regulation can be effective at achieving well-functioning markets even absent government regulation.[14] In any case, the relevant market for purposes of this proposed listing, the Gemini Exchange, is in fact regulated by the New York State Department of Financial Services.[15]Moreover, BZX has entered into a surveillance-sharing agreement with the Gemini Exchange, the closing auction price of which would be used to calculate the net asset value of the ETP.[16]

II. The Disapproval Order Inhibits Institutionalization

In disapproving the proposed listing, the Commission points to problems in the bitcoin market that I believe would be mitigated by institutionalizing the market—a phenomenon that bitcoin ETPs would foster. For example, the order points to the price disparities across bitcoin markets.[17] While I contend that the markets are already better connected by active arbitrageurs than the Commission’s order suggests, the establishment of an ETP would invite more price arbitrage and thus better connections among markets. Because authorized participants could compose their baskets with bitcoin obtained from any source, the availability of the ETP would bring prices at different exchanges closer together. Greater participation by institutional investors in the bitcoin market would help to pressure exchanges to bolster their defenses against theft, encourage greater investment in custody solutions in the bitcoin space, and make it more difficult for market manipulators to escape the notice of their fellow market participants.

The disapproval order discourages new institutional participants from entering this market. Worse, it suggests that approval for bitcoin ETPs will come only when bitcoin spot and derivatives markets have matured substantially,[18] yet, at the same time, contributes to further delay in their maturation, as potential institutional investors may reasonably conclude that the Commission will continue to repress market forces for the foreseeable future. As long as these investors decline to enter the bitcoin market because there is no efficient vehicle that would reduce the costs of entry, the features of the bitcoin market that cause the Commission concern are likely to persist.

The disapproval order therefore unintentionally undermines investor protection. It precludes investors from accessing bitcoin through an exchange-listed avenue that offers predictability, transparency, and ease of entry and exit. Investors who want to diversify their portfolios by adding a bitcoin component will be relegated to the spot market, which will not benefit from the increased institutional discipline that approval of this product would bring.[19] These investors also will not have access to the types of disclosures that a listed ETP would provide (and that our regulations are intended to promote).

To maximize investor choice, foster competition, and avoid unnecessarily depriving investors of protections available under the Exchange Act and BZX’s rules, I would approve this order and welcome the Commission’s consideration of other bitcoin-based ETPs that offer different pricing mechanisms, are pegged to bitcoin futures markets, seek to be registered under the Investment Company Act of 1940, or otherwise differ from the ETP at issue here. Investors would benefit from having multiple, competing options for gaining exposure to bitcoin. It is also important that we not give one sponsor a monopoly in providing bitcoin ETPs.

Investors, of course, might conclude, based on the disclosures required in connection with listing the ETP shares, that neither direct nor indirect exposure to bitcoin is appropriate for them. Investors who determine that bitcoin is an appropriate investment may determine that one or more of these ETPs are inconsistent with their needs or are poorly designed to accommodate the unique characteristics of bitcoin. Even if all the ETPs we approve fail to generate investor interest, approval of such products would further the Exchange Act objective of “remov[ing] impediments to . . . a free and open market”[20] and empower them to make their own decisions about the merits of these products. The majority’s disapproval erects impediments and disempowers investors.

III. The Disapproval Order Dampens Innovation

More generally, the disapproval order demonstrates a skeptical view of innovation, which may have an adverse effect on investor protection, efficiency, competition, and capital formation well beyond this particular product. The disapproval order’s broad interpretation of the Commission’s statutory mandate signals that the Commission reserves for itself the authority to judge when an innovation is ripe enough, respectable enough, or regulated enough to be worthy of the securities markets. By suggesting that bitcoin, as a novel financial product based on a novel technology that is traded on a non-traditional market,[21] cannot be the basis of an ETP, the Commission signals an aversion to innovation that may convince entrepreneurs that they should take their ingenuity to other sectors of our economy, or to foreign markets, where their talents will be welcomed with more enthusiasm.

By withholding approval of a bitcoin-based ETP because the underlying market insufficiently resembles the markets for other commodities, we set ourselves up as the gatekeepers of innovation. Securities regulators are ill-equipped to fill this particular role.[22] It is telling that the disapproval order’s analysis shows little consideration of the relatively advanced features of this still nascent market. For example, trading in bitcoin is electronic, which facilitates competition and price transparency.[23] Bitcoin are interchangeable, so that a purchaser is sure to get exactly the same thing no matter where she purchases it.[24] In addition, bitcoin mining is not geographically limited (except to the extent it migrates to places with cheap electricity), so it is not subject to geopolitical threats that plague other commodity markets.[25] Rather than considering the unique opportunity that these innovative characteristics of the bitcoin market present to investors, the order analyzes the ETPs through a legal and regulatory framework derived from prior approval orders for commodities with very different characteristics.

In sum, I would rather we err on the side of approving products so that investors, who are generally better judges about these things than we are, can form their own views about a particular innovation and act on those views in the market.[26]

IV. Conclusion

By precluding approval of cryptocurrency-based ETPs for the foreseeable future, the Commission is engaging in merit regulation. Bitcoin is a new phenomenon, and its long-term viability is uncertain. It may succeed; it may fail. The Commission, however, is not well positioned to assess the likelihood of either outcome, for bitcoin or any other asset. Many investors have expressed an interest in gaining exposure to bitcoin, and a subset of these investors would prefer to gain exposure without owning bitcoin directly. An ETP based on bitcoin would offer investors indirect exposure to bitcoin through a product that trades on a regulated securities market and in a manner that eliminates some of the frictions and worries of buying and holding bitcoin directly. If we were to approve the ETP at issue here, investors could choose whether to buy it or avoid it. The Commission’s action today deprives investors of this choice. I reject the role of gatekeeper of innovation—a role very different from (and, indeed, inconsistent with) our mission of protecting investors, fostering capital formation, and facilitating fair, orderly, and efficient markets. Accordingly, I dissent.

 

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Off-Duty Florida Cop Arrested After She ‘Beat the Shit’ Out of a Pregnant Woman

|||Angelo Cavalli/robertharding/NewscomA Florida police officer is accused of kicking a pregnant woman with such force that it forced her into labor.

The incident occurred Wednesday, when North Miami Beach Police Officer Amber Pacheco and her sister got into an argument with a couple from Liberty City. (Pacheco was off-duty at the time.) The investigation did not list the cause of the fight, but the confrontation escalated when Evoni Murray’s boyfriend kicked Pacheco’s sister in the face. As Pacheco admitted to an arresting officer, she then “beat the shit” out of Murray.

Following the kick, an arresting officer observed that Murray, who was eight months pregnant, “appeared to be in severe pain and possibly having contractions.” Murray was taken to the hospital and gave birth. The baby appears to be healthy.

Pacheco later said that she kicked someone but wasn’t sure of their identity. She was arrested and charged with battery.

Maj. Richard Rand reports that Pacheco has been suspended with pay while the department conducts an internal investigation. Having been at the department for less than a year, Pacheco is on probationary employment.

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“What We’ve Seen Is Unprecedented”: “Mysterious” New Whale Emerges In The Market

A reader who works for a market-making group in the Eurodollar options writes in to describe a new ED market entrant and notes that “what we have seen over the past 3 months is unprecedented.

WHAT: A mysterious customer has been trading downside put-spread ratios, where they are selling the extra put units. They have done this to the point where they are short MILLIONS of put units in long-dated options. Goldman Sachs has even started taking the other side of the trade for size, but they continue to push it their way (how much capital can they possibly have). Is this why rate vol has collapsed to near record levels?

Consensus estimate among local Chicago trading groups is that this customer is short approx 3 million puts, amounting to 1 million straddles in volatility risk. The capital requirement for this position is estimated to be $1 billion. They continue to add every trading day.

EFFECTS: “It has pushed skew and put volatility well beyond all time lows (see below for recent analysis by a Eurodollar broker).”

POSSIBILITIES: “The trader must have access to huge amounts of capital to sustain such a large position. If interest rates were to rise in any volatility-inducing manner (rise quickly – aka futures breaking), this player could be on the hook for HUGE money. We believe if 2-3 year interest rates rose 1.5-2%, this player would have losses in the billions, and capital requirements would skyrocket.”

Some have ventured a guess that PIMCO is the mysterious customer?

* * *

And here is a detailed trade analysis courtesy of x-fa’s John Hayden.

This is the PnL Heatmap of the EDZ0 55/60 PS1x4 (+4Leg) at a purchase price of 0 Ticks. The time step is set at 30 Days and you will see the Fut Price on the vertical. Additionally the Volatility is set to Roll Forward so as we move forward in time the Vol Surface is reduced along the same path as the current Atm Vol Term Structure. For comparison, the following is the same heatmap with Vol set to Static (Fixed)

This trade really boils down to where 5-10 Delta long dated Put Skew is priced. And friends it is CHEAP. It is so cheap that it gives me great pause as to why someone would buy 1/sell 4 at these levels in this size. I have no idea. The following shows how cheap this vol is. Here are 5 year charts of the 5% Put, 10% Put, and ATM Vols.

Not only is the Put side on its all time lows – but the Risk Reversal is on it all time lows as well (Puts cheap).

The heat map says it all. The owner of 4 legs at Even literally has no risk … unless vol comes in. Here is the Static
Heatmap with Atm Vol run at the low (52%) (Which puts the Put area well below levels we have ever seen.)

As you can see there is very little change to the worst case scenario a year out. In other words its hard to lose when you own something for nothing.

You can imagine how ugly this trade could get for the seller of 4 legs if Vols peak and the Risk Reversal flips back to Puts.

In closing this trade is good for many reasons. It also gives the owner of 4 Legs a nice back stop to trade against if vols gravitate higher – and at very little risk.

I have saved the best for last … Here is the 5Y LookALike lookback on the 1by4 (+4Leg). It is hard to believe…

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Who Is America? May Leave You Wondering Who the Villain Really Is: New at Reason

'Who Is America?'Television critic Glenn Garvin finds Sacha Baron Cohen’s Who Is America? hilarious at times, but is disturbed by its emphasis on simply finding people to humiliate:

Not every interview is a fair fight. In his Cain-N.Degeocello guise, Cohen calls a “town meeting” with a couple of dozen residents of the desolate western Arizona town of Kingman. The subject: a new development that turns out to be a $385 million mosque that he describes as the world’s biggest outside the Middle East. The grizzled Kingmanites react with predictable hostility and some open racism. (This is not an interpretation. “I’m racist toward Muslims,” yells one of them.)

The chattering classes have seized the Kingman episode as Exhibit A in the Trump Era’s deformation of the American soul. What goes unmentioned: The folks at the meeting were not exactly a cross-section of the city, but more from its busted-luck demographic. Recruited on Facebook in return for a $150 payment, they were either out of work or have the kind of jobs that make it attractive to skip a day of work for $150.

View this article.

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US Wheat Exports Losing Ground To Russia As Mexico Seeks ‘Alternatives’

Russia briefly surpassed the United States as the top global wheat supplier in 2016, and the two top global suppliers have been neck and neck since, but recently the US market share has been on a dramatic decline due to Mexico increasingly turning to alternative suppliers amidst escalating trade tensions with its northern neighbor. This despite soaring Russian prices and a new setback to the Russian crop from drought.

The US has been Mexico’s primary supplier since the 1994 North American Free Trade Agreement (NAFTA) took effect, but American suppliers are alarmed as Mexican millers begin looking elsewhere with the threat of tariffs looming, a trend since Donald Trump famously labelled NAFTA “the worst trade deal ever” signed by the US, followed by his April 2017 threat to pull out and has since called to renegotiate. 

A recent Reuters report finds that “the U.S. market share decline is accelerating as Mexico casts about for more alternative suppliers in Latin America and elsewhere to hedge against the risk that U.S. grains will get more expensive if the Mexican government imposes tariffs, according to interviews with three large Mexican millers, international grains traders, the top Mexican government agricultural trade official and government and industry data analyzed by Reuters shows.”

Via AOL

Worldwide, in the opening half of 2018 total US wheat exports dropped 21 percent, while exports to Mexico fell by a whopping 38 percent, to $285 million.

This comes as last month Trump made good on prior threats to roll back NAFTA and begin anew — “a bad deal for U.S.A. Massive relocation of companies and jobs” with “large trade deficits with Mexico and Canada,” the president tweeted back in March — by levying a 25 percent tariff on steel imports and a 10-percent tariff on aluminum imports from Mexico, Canada and the EU.

Predictably, Mexico alongside the EU retaliated with import tariffs on select American products, including steel, applies and pork. 

President Trump has continued to warn “Tariffs on Steel and Aluminum will only come off if new and fair NAFTA agreement is signed,” even while offering US farmers cash to get them through current tough times — in the form of his $12 billion emergency farm aid plan announced Tuesday — that many fear will not be enough to repair damage to necessary long-term trade partnerships abroad

Russia became the world’s top wheat exporter in 2016, but recent drought could bring put the US back on top. 

Meanwhile, Russia has come in to fill the gap as producers of Mexican bread, pasta and flour tortillas look for cheaper supplies of wheat, and while Mexican companies are increasingly worried over substantial rumors that Mexico could in return target $4 billion in annual imports of US corn and soybeans.

Jose Luis Fuente, head of Canimolt, a major Mexican trade consortium representing 80 percent of Mexican millers, told Reuters, “It’s important to send signals to Mr. Trump,” adding that Mexico must always be somewhat reliant on US wheat due to proximity, but that “we can’t continue to have this absolute dependence.”

Before and after NAFTA:

Mexico is also reportedly planning to increase wheat imports from Argentina, Brazil, Canada and Ukraine to see itself through the crisis. 

Though it’s unclear whether Trump’s Monday afternoon comments at a White House “Made in America” event announcing he’s currently considering “very dramatic” trade action with Mexico as newly elected Mexican President Obrador Andrés Manuel López Obrador prepares to take power, what is clear is that the US industry will have to patiently watch as Russia and others take the spoils.

“Negotiations are going really well, be cool,” Trump tweeted Wednesday. “The end result will be worth it!” Though we can’t imagine that American farmers are taking too much comfort in these words.

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GDP Growth Is Good News—But Can It Continue During a Trade War?

The Commerce Department’s Bureau of Economic Analysis says the nation’s real gross domestic product grew 4.1 percent in the second quarter of 2018. That’s good news, but the looming consequences of Donald Trump’s tariffs mean it likely won’t last.

The GDP numbers, released today, show an improvement over the first quarter’s 2.2 percent growth. It’s the first time the economy has grown more than 4 percent in a quarter since 2014.

It wasn’t all sunshine and roses: Residential investment fell for the fourth time in five quarters, meaning that people are putting less money into home construction. But for the most part, the GDP report suggest a strong economy, with consumer spending going up 4 percent and business investment rising 7.3 percent. “The bottom line is that the economy is doing better,” Diane Swonk, chief economist for the accounting firm Grant Thornton, tells The New York Times.

President Trump thinks this is just the beginning. “We’re on track to hit the highest annual growth rate in over 13 years,” he said after the numbers were released. “And I will say this right now and I will say it strongly, as the deals come in one by one, we’re going to go a lot higher than these numbers, and these are great numbers.”

But as the nonpartisan Committee for a Responsible Federal Budget explains,

Many analysts believe the second-quarter growth numbers are artificially inflated by shifts in consumption to avoid the new tariffs announced this quarter. Most significantly, China appears to have accelerated purchases of soybeans, crude oil, and other exports before new tariffs went into effect. Pantheon Macroeconomics estimated the soybean surge alone could account for as much 0.6 percentage points of the growth rate. These accelerated purchases mean faster growth now at the expense of slower growth later.

In other words, foreign companies appear to be importing as many goods as they can from the U.S. before their own governments retaliate against Trump’s tariffs with duties of their own. Once those tariffs are in place, American goods won’t be in such high demand, which will hurt future GDP growth.

“We’re getting explosive growth in the second quarter because of trade,” economist Ellen Zentner of Morgan Stanley tells the Times. “You’ve got a big hole on the other side of that.”

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