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Trump Strikes Back

Authored by James Howard Kunstler via Kunstler.com,

Not long ago, few Americans of the thinking persuasion might have imagined that such a well-engineered republic, with its exquisite checks and balances, sturdy institutions, and time-tested traditions would end up as so much smoldering goop in a national dumpster fire, but such is the sad state-of-the-union moving into the fateful summer of 2019. The castle of the permanent bureaucracy is about to be torched by an uprising of deplorable peasants led by a Golden Golem made furious by relentless litigation. It’s Game of Thrones meets the Thermidorian Reaction with a Weimar-flavored cherry on top — really one for the ages!

There’s perhaps a lot to dislike about Donald J. Trump, US President No. 45. Despite all the grooming and tailoring, there’s little savoir faire there. He tweets not like a mellifluous songbird, but in snorts like a rooting aardvark. His every predilection is an affront to the refined Washington establishment: his dark business history, his beloved ormolu trappings, his Mickey-D cheeseburgers, the mystifying hair-doo.

Even so, the bad faith of his antagonists exceeds even Mr. Trump’s defects and vices. The plot they concocted to get rid of him failed. And, yes, it was a plot, even a coup. And they fucked it up magnificently, leaving a paper trail as wide as Interstate-95. Now all that paper is about to fall over the District of Columbia like radioactive ash, turning many current and former denizens of rogue agencies into the walking dead as they embark on the dismal journey between the grand juries and the federal prisons.

Hence, the desperate rage of the impeachment faction, in direct proportion to their secret shameful knowledge that the entire RussiaGate melodrama was, in fact, a seditious subterfuge between the Hillary Clinton campaign and a great many key figures in government up-to-and-including former president Barack Obama, who could not have failed to be clued-in on all the action. Even before the declassification order, the true narrative of events has been plainly understood: that the US Intel “community” trafficked in fictitious malarkey supplied by Mrs. Clinton to illegally “meddle” in the 2016 election.

Most of the facts are already documented. Only a few details remain to be confirmed: for instance, whether international man-of-mystery and entrapment artist Josef Mifsud was in the employ of the CIA, and/or Britain’s MI6, and/or Mrs. Clinton’s Fusion GPS contractor (or Christopher Steele’s Orbis Business Intelligence company, a subcontractor to both Fusion GPS and the FBI). Questions will now be asked — though not by The New York Times.

The evidence already public indicates that Robert Mueller must have known as early as the date of his appointment (and likely before) that the predicating evidence for his inquiry was false. After all, his soon-to-be lead prosecutor, Andrew Weissmann, was informed of that in no uncertain terms by his DOJ colleague, Deputy Attorney General Bruce Ohr, in 2016. Justice may seek to know why Mr. Mueller did not inform the target of his inquiry that this was so. The answer to that may be that Mr. Mueller’s true mission was to disable Mr. Trump as long as possible while setting an obstruction of justice trap — which also failed tactically.

Notice that Mr. Mueller declined to testify before the House Judiciary Committee last week. Chairman Jerrold  Nadler (D-NY) was a fool to invite him. Did he not know that minority members of his committee get to ask questions too?

In an interesting turn of the screw last week, polling showed that a majority of those asked were in favor of investigations into the origin of the RussiaGate story. The FBI, being an agency under the direct supervision of the Attorney General, will be hosed out for sure. The CIA, on the other hand, has a sordid history of acting as a sovereign state within the state — hence the derivation of the Deep State. They are renowned for protecting their own. Remember, the Senate Minority Leader, Mr. Schumer, snidely told the incoming President Trump at the get-go that the Intel community “has six ways from Sunday at getting back at you.” I guess we’ll finally get to see about that because the CIA’s former director, the wicked Mr. Brennan, is grand jury bound. I suspect he will not be protected by his former colleagues. His downfall may presage a more thorough cleanup, and perhaps a major reorganization, of this monstrous agency.

The indictment of Julian Assange adds a big wrinkle to these upcoming proceedings. Apart for what it means to First Amendment protection for a free press (no small matter), Mr. Assange is the one person who actually knows who handed over the “hacked” DNC emails to Wikileaks. Perhaps getting the answer to that question is the real reason that the DOJ is throwing the book at him. The trial of Mr. Assange is sure to be a humdinger.

I’m convinced, personally, that all this melodrama will play out against the background of a cratering global economy, tanking financial markets, and epic disruption of the established international order. Consider laying in some supplies.

via ZeroHedge News http://bit.ly/2W4dYGY Tyler Durden

Stocks Suffer Worst Streak In 8 Years As Trade Tempest Sparks Rates Rout

Well that was a week…

China remains best YTD followed by Europe and US the slight laggard…

 

Chinese stocks were lower on the week with tech-heavy indices hit hardest…

 

European markets were all lower on the week, led by Italy…

 

US stocks were also down on the week as trade tensions escalated and morphed into growth scares… The Dow was least worst while Trannies and Nasdaq suffered most…

The Dow is down 5 weeks in a row – the longest losing streak since June 2011

“Most Shorted” Stocks had their 3rd weekly loss in a row – the biggest 3-week drop of the year – as Tuesaday’s short-squeeze couldn’t last…

 

Hope of a Chinese trade deal has collapsed…

 

But the algos remain ever alert to a bounce on optimistic headlines (h/t @jsmauro13)

 

Semis suffered their worst week of the year (down 3 weeks in a row – tumbling over 16% in that time – the worst 3-week loss since Oct 2008)

 

Technology stocks overall were whacked…

 

Energy stocks are down 7 weeks in a row…

 

Musk had a bad week…

 

Banks outperformed the market this week, but don’t hold your breath…

 

Credit markets blew wider this week even as VIX ended the week almost unchanged…

 

Treasury yields took a breather today (and a half day ahead of Memorial Day) after a breathless plunge midweek…

 

Slamming yields to multi-year lows…

 

10Y Yields are down 5 of the last 6 weeks to 2.32% – the lowest weekly close since Oct 2017…

 

The yield curve crashed back into inversion this week…

 

The Dollar Index slumped this week after a brief surge early yesterday to a new cycle high…

 

Cable had a volatile week of May/Brexit headlines but ended the week practically unchanged…

 

Litecoin soared over 15% today but Bitcoin and Bitcoin Cash also surged again on the week…

 

With Bitcoin back above $8000…

 

And ugly week for WTI crude (and copper) with PMs managing gains…

 

WTI broke below its 50- and 200-DMA, but bounced at the 100DMA for now…

 

Silver had its best week in 4 months…

 

Copper was clubbed like a baby seal…

 

Finally, The Fed has a problem – how’s it going to be able to support the market when investors are already pricing in 45bps of rate cuts for 2019…

It appears the market thinks the recession has already started…

Global Economic Policy Uncertainty is back near record highs…

But there is a silver lining…It’s going to cost you less to refill the propane tank for your gas grill this Memorial Day weekend. Propane prices have plunged this month, reaching their lowest level in more than 2 1/2 years…

via ZeroHedge News http://bit.ly/30GgO3F Tyler Durden

Should Baltimore Pay Ransom to the Hackers Holding City Computers Hostage?

Baltimore’s city computers are still down.

They’ve been down since May 7, when the city learned that the ransomware known as RobbinHood had infected many of its computer systems and encrypted their files. To restore the data, the city was given four days to pay three Bitcoins—about $23,000 at today’s prices.

The city did not respond by the deadline. So the ransom increased to 13 Bitcoins—about $100,000—with a new deadline of May 17.

Baltimore again refused to pay. The second deadline also passed. Predictably, computer chaos continued. The city’s email, voicemail, and some websites were down. Its online bill payment system was offline and a database of parking fines was inaccessible. Permits could not be issued, text alerts could not be sent, and real estate transactions, including home sales, could not be processed.

The news isn’t all bad. Baltimore is also having problems collecting property taxes, giving financially strapped homeowners a few extra weeks of tax relief. The city also couldn’t update its controversial “gun offender” registry, which requires anyone convicted of certain firearm-related crimes to register with the police commissioner for three years. (Among the crimes requiring registration: carrying a handgun without a permit, manufacturing unapproved handguns, and possessing “assault pistols.” Baltimore has proven more diligent at curbing Second Amendment rights than at securing its Windows PCs.)

Should the city pay the ransom? Mayor Jack Young, a Democrat, was firmly against the idea at first. “That’s just like us rewarding bank robbers for robbing banks,” he told the press. “No, we’re not going to pay a ransom.”

But now the mayor is signaling some flexibility. Asked again this week about whether Baltimore would pay the ransom, Young told the interviewer: “To move the city forward I might think about it.”

If Baltimore were a private company, with its annual budget of around $3.5 billion, it likely would have paid the modest ransom of three Bitcoins to recover its computers (and then secured its systems to prevent a repeat). “Many consumers opt to pay rather than lose their precious photo and video memories, financial records, and other files they value,” an F-Secure report says. A ProPublica article last week revealed that outside consultants hired by victims often just pay the ransom (sometimes negotiating discounts or extensions for their clients).

Even the FBI has endorsed this approach. “To be honest, we often advise people just to pay the ransom,” the assistant special agent in charge of the FBI’s cyber program said at a Boston security conference, according to The Security Ledger. The bureau endorses the payoffs, the agent said, because “the ransomware is that good.”

But when the computer systems held hostage belong to the government, a different set of standards seems to be applied.

A Slate article this week argues that it’s “ethically” a “bad idea” for Baltimore to pay the ransom. “Public entities, like city governments and police departments, have a particular responsibility to protect the public good by doing the slow, hard, expensive work of restoring and securing their systems rather than taking the easy way out—which will, in the end, only make everything harder,” the author says. A Baltimore Sun editorial echoes this view, saying the city “shouldn’t pay the ransom to end the City Hall hack.”

This argument suggests that public officials must act more “ethically” than the private sector—that is, they should set a virtuous example for the rest of us to follow.

If we’re given a choice between a government that’s virtuous and one that’s not, most of us would reasonably choose the former. But in Baltimore, that ship may have sailed long ago. This is the city where a squad of police officers took, in the words of The New York Times, “every opportunity to rob those they were supposed to be policing or protecting, and barely bothering to cover up their deeds.” One supervisor instructed officers to carry a toy gun in case they found themselves “in a jam” and needed to plant one. Baltimore’s previous mayor, Catherine Pugh, quit earlier this month amidst a bizarre scandal involving $700,000 in payments from city-linked businesses for her self-published children’s books; Maryland’s governor has asked for a criminal investigation.

Whatever Baltimore decides, it’s not alone. Cloud security company Armor reports that so far this year, there have been 22 known ransomware attacks against state and local governments. The affected municipalities include Amarillo, Texas; Augusta, Maine; Imperial County, California; Garfield County, Utah; Greenville, North Carolina; Albany, New York; Atlanta, Georgia; and the Cleveland Airport. A recent ransomware analysis conducted by Recorded Future, a real-time threat intelligence firm, suggests that 45 percent of all public and private organizations targeted by such attacks pay the ransom, but only 17 percent of state and local governments did.

Baltimore could have been better prepared: Its 911 dispatch system was taken offline in March 2018 in what turned out to be a ransomware attack. But even after that experience, Baltimore neglected to purchase an insurance policy to cover cybersecurity incidents. A Sophos Naked Security report says that the city council was told “last year at a budget hearing that the city needed one, but it didn’t happen.” Instead, Young—then the council president, now the mayor—called for a feasibility study for a municipal-run broadband network. (Given Baltimore’s evident technical expertise, this could only end well.)

For now, at least, Baltimore is experimenting with manual workarounds for transactions typically done electronically. The city has declined to say how long it will take for services to return to normal, though most guesses say it will be at least a few more weeks. The mayor’s most recent press release offers no details, instead saying laconically: “I am not able to provide you with an exact timeline on when all systems will be restored.”

from Latest – Reason.com http://bit.ly/2K2GTE6
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Should Baltimore Pay Ransom to the Hackers Holding City Computers Hostage?

Baltimore’s city computers are still down.

They’ve been down since May 7, when the city learned that the ransomware known as RobbinHood had infected many of its computer systems and encrypted their files. To restore the data, the city was given four days to pay three Bitcoins—about $23,000 at today’s prices.

The city did not respond by the deadline. So the ransom increased to 13 Bitcoins—about $100,000—with a new deadline of May 17.

Baltimore again refused to pay. The second deadline also passed. Predictably, computer chaos continued. The city’s email, voicemail, and some websites were down. Its online bill payment system was offline and a database of parking fines was inaccessible. Permits could not be issued, text alerts could not be sent, and real estate transactions, including home sales, could not be processed.

The news isn’t all bad. Baltimore is also having problems collecting property taxes, giving financially strapped homeowners a few extra weeks of tax relief. The city also couldn’t update its controversial “gun offender” registry, which requires anyone convicted of certain firearm-related crimes to register with the police commissioner for three years. (Among the crimes requiring registration: carrying a handgun without a permit, manufacturing unapproved handguns, and possessing “assault pistols.” Baltimore has proven more diligent at curbing Second Amendment rights than at securing its Windows PCs.)

Should the city pay the ransom? Mayor Jack Young, a Democrat, was firmly against the idea at first. “That’s just like us rewarding bank robbers for robbing banks,” he told the press. “No, we’re not going to pay a ransom.”

But now the mayor is signaling some flexibility. Asked again this week about whether Baltimore would pay the ransom, Young told the interviewer: “To move the city forward I might think about it.”

If Baltimore were a private company, with its annual budget of around $3.5 billion, it likely would have paid the modest ransom of three Bitcoins to recover its computers (and then secured its systems to prevent a repeat). “Many consumers opt to pay rather than lose their precious photo and video memories, financial records, and other files they value,” an F-Secure report says. A ProPublica article last week revealed that outside consultants hired by victims often just pay the ransom (sometimes negotiating discounts or extensions for their clients).

Even the FBI has endorsed this approach. “To be honest, we often advise people just to pay the ransom,” the assistant special agent in charge of the FBI’s cyber program said at a Boston security conference, according to The Security Ledger. The bureau endorses the payoffs, the agent said, because “the ransomware is that good.”

But when the computer systems held hostage belong to the government, a different set of standards seems to be applied.

A Slate article this week argues that it’s “ethically” a “bad idea” for Baltimore to pay the ransom. “Public entities, like city governments and police departments, have a particular responsibility to protect the public good by doing the slow, hard, expensive work of restoring and securing their systems rather than taking the easy way out—which will, in the end, only make everything harder,” the author says. A Baltimore Sun editorial echoes this view, saying the city “shouldn’t pay the ransom to end the City Hall hack.”

This argument suggests that public officials must act more “ethically” than the private sector—that is, they should set a virtuous example for the rest of us to follow.

If we’re given a choice between a government that’s virtuous and one that’s not, most of us would reasonably choose the former. But in Baltimore, that ship may have sailed long ago. This is the city where a squad of police officers took, in the words of The New York Times, “every opportunity to rob those they were supposed to be policing or protecting, and barely bothering to cover up their deeds.” One supervisor instructed officers to carry a toy gun in case they found themselves “in a jam” and needed to plant one. Baltimore’s previous mayor, Catherine Pugh, quit earlier this month amidst a bizarre scandal involving $700,000 in payments from city-linked businesses for her self-published children’s books; Maryland’s governor has asked for a criminal investigation.

Whatever Baltimore decides, it’s not alone. Cloud security company Armor reports that so far this year, there have been 22 known ransomware attacks against state and local governments. The affected municipalities include Amarillo, Texas; Augusta, Maine; Imperial County, California; Garfield County, Utah; Greenville, North Carolina; Albany, New York; Atlanta, Georgia; and the Cleveland Airport. A recent ransomware analysis conducted by Recorded Future, a real-time threat intelligence firm, suggests that 45 percent of all public and private organizations targeted by such attacks pay the ransom, but only 17 percent of state and local governments did.

Baltimore could have been better prepared: Its 911 dispatch system was taken offline in March 2018 in what turned out to be a ransomware attack. But even after that experience, Baltimore neglected to purchase an insurance policy to cover cybersecurity incidents. A Sophos Naked Security report says that the city council was told “last year at a budget hearing that the city needed one, but it didn’t happen.” Instead, Young—then the council president, now the mayor—called for a feasibility study for a municipal-run broadband network. (Given Baltimore’s evident technical expertise, this could only end well.)

For now, at least, Baltimore is experimenting with manual workarounds for transactions typically done electronically. The city has declined to say how long it will take for services to return to normal, though most guesses say it will be at least a few more weeks. The mayor’s most recent press release offers no details, instead saying laconically: “I am not able to provide you with an exact timeline on when all systems will be restored.”

from Latest – Reason.com http://bit.ly/2K2GTE6
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“You Might Be A British Right Wing Extremist If…”

The British Army has distributed a cheat sheet of “indicators & warnings” if one suspects that they (or a friend) might be a member of the “Extreme Right Wing” (XRW).

  1. Describe themselves as “Patriots”

  2. Add ‘istan’ to British place names

  3. Describe multicultural towns as ‘lost’

  4. Have tattoos with overt and covert XRW iconography

  5. Look at opponents as ‘Traitors’

  6. Use the term ‘Islamofascism’ 

  7. Discuss the creation of ‘white only’ communities

  8. Become increasingly angry at perceived injustices or threats to so called ‘National Identity’

  9. Refer to individuals ready to challenge their XRW views as being ‘indoctrinated’ 

  10. Make generalisations about Muslims and Jews

  11. Claim that immigration is the root of injustices against vulnerable people (e.g. old age pensioners, veterans)

  12. Involve colleagues in closed social media groups

  13. Refer to Political Correctness as some left wing or communist plot

  14. Make inaccurate generalisations about ‘the Left’ or Government

  15. Threaten violence when losing an argument, although claiming that XRW groups protest peacefully

  16. Actively seek out impressionable individuals to indoctrinate or recruit

  17. Use blatantly untruthful or incorrect references to immigrants, Judaism or Islam

  18. Talk of an impending racial conflict or ‘Race War’

  19. Claim that it is acceptable to abuse Jews or Muslims as Judaism or Islam are not ‘races’

  20. Have extreme XRW group stickers or badges on clothing and personal items

So, if you consider yourself a patriot who talks to people in closed social media groups, have scary tattoos or stickers, or make “inaccurate” comments about the left or government, you may be an extreme right winger! 

via ZeroHedge News http://bit.ly/2M8JgIm Tyler Durden

The Lubricant Of The Global Financial System Is Not Working Anymore

Via WorldOutOfWhack.com,

Nedbank’s Mehul Daya writes and I concur… it’s simple: it’s all about Dollar-Liquidity.

Slowdown in global trade is putting pressure on creation and velocity of Dollars via value-chains/Dollar-leverage since the Dollar is the lubricant of the global financial system.

Chart 2 – this is how the dollar gets transmitted into the world

Chart 3 – global trade vs USD vs Triffin dilemma

BIS writes in ”The geography of dollar funding of non US banks”

  • US dollar liabilities of non-US banks grew after the Great Financial Crisis (GFC). At end-June 2018, they stood at $12.8 trillion ($14.0 trillion including net off-balance sheet positions) – as large as at the peak of the GFC.

  • Banks raise relatively fewer dollar liabilities in their affiliates in the US since the GFC. This is due to a rise in the share of dollar liabilities booked in the country where banks are headquartered.

  • European banks, which traditionally have had a large US footprint, have shrunk their dollar business and the role of their US affiliates since the GFC. At the same time, non-European banks expanded their dollar borrowing quite rapidly, but in recent years have also raised relatively fewer dollars in the US.

  • A large share of US dollar liabilities of non-US banks are cross-border (51% at end-June 2018), implying that the location where US dollar funding is raised is different from the location of the funding provider.

  • The global share of US dollar funding provided by US residents is significantly higher than that raised at foreign banks’ US branches and subsidiaries, though these shares vary across banking systems.

Global trade is slowing down and cross border trade is the largest supplier of USD into the global economy and financial system and as BIS summaries…

How might this funding configuration behave in times of market stress? Non-US creditors may be pressured to withdraw funding as they might face a dollar funding squeeze themselves. This in turn is akin to margin call on all assets which were beneficiary of dollar based monetary system.

Nedbank’s Daya concludes:

“The consensus is that should the trade wars accelerate it will be inflationary. We agree there obviously be a price shock on the back of the tariffs, but we do not expect an inflationary cycle, we expect the opposite.

As the USD monetary base contracts, it will slow down money/credit growth which is deflationary. This will favour bonds and other yielding assets over growth assets.”

The macroeconomic tailwind arising from the growth in the USD monetary base is under threat, leaving the global economy and financial system vulnerable to tighter financial conditions.

Investment implications: We remain structural USD bulls supported by our view that USD creation is slowing down. However, we expect central bank balance sheets to become even more important role in the financial landscape to manage the changes in the quantum of USD in the global economy – leaving traditional signals like the yield curve, volatility and IR differentials difficult to interpret compared to previous cycle. We will continue to rely on the USD and our measurement of USD monetary base.

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

After Helping OxyContin Maker ‘Turbocharge’ Sales, McKinsey Cuts Ties With Purdue Pharma

McKinsey’s reputation has taken a beating over the past year, largely thanks to a flurry of New York Times’ stories detailing the secretive consulting giant’s work with authoritarian governments, while exposing conflicts of interest involving the firm’s bankruptcy business and its internal hedge fund (the former led to a wrist-slap fine from the DoJ).

Unwilling to countenance another PR hit, McKinsey has apparently tried to head off more questions about the firm’s commitment to ethical business practices by announcing that it has cut ties with Purdue Pharma and all other businesses involved in the sale of opioid pain pills.

Oxy

The fact that McKinsey and other consulting firms haven’t faced more of a backlash for their work with opioid makers is, frankly, surprising, as details from the Massachusetts AG’s lawsuit against Purdue would suggest: During Mckinsey’s decade-long relationship with Purdue, the consulting firm helped the OxyContin maker boost sales and circumvent government efforts to tighten restrictions.

According to Bloomberg, which quoted from the Massachusetts lawsuit, McKinsey even formulated a pitch that it said would help Purdue “turbocharge” sales.

But McKinsey isn’t the only big firm cutting ties with Purdue this week. JP Morgan, which was among the banks that treid to ‘limit’ ties to gun-makers and sellers after the Parkland shooting, has told Purdue that it will need to do its banking somewhere else.

JPM’s decision makes it “the most high-profile corporation known to have distanced itself from Purdue and its wealthy owners, the Sackler family,” Reuters said. JPM reportedly informed Purdue back in March that it had six months to find another bank. It has reportedly tapped Dallas-based regional bank Comerica to handle its financial transactions. JPM reportedly told Purdue that its decision was motivated by ‘reputational risks’. Though it never lent money to Purdue, JPM’s commercial bank manged the company’s cash and bill payments.

Many museums and nonprofits have already cut ties with the Sacklers, who were known for their philanthropy.

Unfortunately for Purdue (and maybe for McKinsey given its bankruptcy business), cultivating new banking relationships might not be a problem in the very near future: The company is reportedly considering filing for bankruptcy to avoid payouts in the roughly 2,000 lawsuits accusing it of misleading doctors and patients about the addictive qualities of OxyContin. The company and its owners, the Sackler family, have already reached a nearly $300 million settlement with the state of Oklahoma.

via ZeroHedge News http://bit.ly/2K4o2bF Tyler Durden

Environmental Group Behind California’s Paper Receipt Crackdown Is Chaired by CEO of Digital Payment Company

They’re at it again. On Thursday the California Assembly passed a bill that would require customers to request a paper receipt before they can be given one.

“Most of us don’t need a physical receipt for every transaction. It doesn’t make sense to kill so many trees and unnecessarily expose people to toxins for something we don’t often need,” said the bill’s sponsor, Assemblyman Phil Ting (D–San Francisco), after its passage. The bill now moves to the state Senate.

Starting in 2022, AB 161 would forbid businesses from providing customers with a traditional paper receipt unless they ask for one. Beginning in 2024, businesses would also be required to provide digital proof of purchase should a customer so request.

Cash-only businesses, health care providers, and retailers doing less than $2 million in business each year are exempted from the bill. Should you be caught printing up receipts in violation of the law, you’ll get two warnings, after which you could be fined up to $300 a year.

To make the environmental case against receipts, Ting’s bill relies on Green America, a D.C.-based group whose “Skip the Slip” report says that receipts produce about 150,000 tons of waste each year.

The chairman of Green America’s Board of Directors is Jeff Marcous. Marcous also serves as CEO of Dharma Merchant Services, which sells digital point-of-sale technology—the kind that Ting’s bill would require stores to adopt.

In the May 2018 version of Green America’s “Skip the Slip” report, the group estimates that 10 million trees were felled each year to produce America’s paper receipts. A January 2019 version of the report says the country uses only 3 million trees to produce all our receipts. The report does not explain this dramatic fall in the estimate, and Reason‘s request for clarification about the change was not addressed as of press time.

Green America’s newest estimates of receipt paper usage actually appear to be on the low side. The American Forest and Paper Association (AFPA) estimates that the U.S. goes through about 181,000 tons of paper receipts year. Grand View Research, a market research firm, puts the amount of receipt paper at 282,000 tons a year.

But this is a tiny fraction of even California’s own paper waste. According to analysis from the California Assembly’s Committee on Natural Resources, 17 percent of waste deposited in California landfills, roughly 5.95 million tons, is comprised of paper.

No state-specific data exists on receipt usage. But for the sake of argument, let’s assume per capita receipt consumption is uniform across the country.

Given the state comprises 11 percent of the country’s total population, this would mean Californians use 11 percent of all the country’s receipts, or 31,000 tons. (That’s relying on the highest estimate of receipt paper consumption.) That would mean receipts make up .5 percent of the state’s paper waste, and .08 percent of total waste.

Even if all of the country’s receipts were dumped in California, they’d still comprise about 5 percent of its paper waste and at most 1 percent of total waste.

Ting and Green America say receipts also pose a health risk because they contain Bisphenol-A (BPA) and Bisphenol-S (BPS).

“Implementing phenol-free paper is an essential immediate step to ensure worker and customer health,” says Green America’s report. A press release from Ting’s office similarly calls the public health impacts of receipts “especially alarming.”

But both the American Food and Drug Administration (FDA) and the European Food Safety Authority (EFSA) have said that the levels of BPA found in food containers and packaging are safe, and do not pose a risk to consumer health. In 2015 the EFSA—generally a hypercautious group—released a report concluding that “BPA poses no health risk to consumers of any age group.”

Meanwhile, paper receipts are popular. A May poll from Tulchin Research found that 72 percent of California voters prefer paper receipts.

In short, receipts are a tiny, tiny fraction of paper waste, and safety watchdogs in both the U.S. and Europe have found that they do not pose a health risk. The push against them is as misguided and invasive at best, cynically self-interested at worst.

If California legislators really wanted to reduce unnecessary paper consumption, they should consider printing fewer nonsense bills.

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Houston, We Have A Problem

Authored by Marc Orsley of PrismFP

  • Oil sell off coming at the most inopportune time with PMI’s melting
  • If oil sell off persists, US growth is going to contract and that is why Fed cut pricing is reasonable

Back after a couple days on the road and would have to say I missed watershed price action.

I have constantly seen over the past few years the market underestimating the effects of a meaningful rise or fall in crude oil prices. First in 2014 when most economists thought falling oil would be a stimulus (wrong, collapsing production killed growth and the petrodollar) and then in 2017-2018 when rising oil helped provide the market with an inflationary impulse when most were stuck in a lowflation mindset (inflation rose and put the Fed into a consistent hiking cycle).

This week, crude oil has fallen over 7% and it’s safe to say the bull market WTI has been in since December, is now over.

I find the 7% collapse in crude this week more than interesting. What is the read through here that prices are collapsing in the face of multiple bullish elements such as:

  • The highest geopolitical risk regime we have seen in a while in the Mid-East with US-Iran precariously close to military escalation
  • Venezuela continuing to languish with continued production shrinkage
  • Saudi Energy Minister al-Falih saying its possible to rollover the OPEC production cuts in 2H
  • US production, which has been on a secular two year ascent, has now shifted lower
  • Entering the peak seasonal demand/summer driving period
  • OMO 2020 product demand starting to gain momentum (this is the marine sulfur output story where cargo ships will need a higher quality of crude to omit less sulfur).

If all that supply disruption and disruption potential is not able sustain WTI over $60, we must make the read through that global demand, and thus global growth, is weak. That is the important signaling here. That was confirmed by the IEA last week who cut global oil demand from 1.4m bpd to 1.3m bps and the IEA’a Atkinson who indicated that that lower oil demand growth outlook was “modest” and there was “no demand shock.”

The breakdown in WTI could not be coming at a more inopportune moment. Regular readers will know that I focus less on lagging indicators such as the unemployment rate and more on forward indicators such as PMI’s. Doing so has allowed to accurately project the current economic environment we are in today. Thus, this week’s atrocious PMI data is signaling further weakness to say the least.

Here is my rub though, while the US Markit PMI is not the gold standard (NAPM still is), at 50.6; this index is perilously close to falling into contraction. That data was collected pre-WTI breakdown. I can assure you that falling crude prices will only add to the malaise and that means we should assume manufacturing PMI’s in the US will fall into contraction territory relatively soon.

Do not underestimate how much oil and all the “downstream” industries means to the US economy. At roughly 12m barrels/day of production, the US is now by far the largest crude producer in the world (Saudi’s are currently producing around 10m barrels/day).

To be clear, this is not a big call on oil prices. It is just to say that if WTI remains sub-$60 and/or continues to fall; US growth will further deteriorate especially as trade wars persist too long.

You may say well manufacturing makes up roughly 15% of the US economy but as we also saw yesterday; US Markit Service PMI hit the lowest level since the summer of 2016. Therefore, there are signs that manufacturing/export led weakness caused by trade wars is bleeding through to the larger economy. There is a clear slowdown occurring, and the S&P 500 and the Unemployment rate are a bit of false signals (or lagging ones)

This is why it is perfectly reasonable to price in Fed cuts with S&P’s still within 5% of the all-time highs and the Unemployment rate at all-time lows. Growth is soft and it is about to get softer if crude oil does not recover. With almost 70% of a chance of a Fed cut by September, I continue to think that is not the play here. The wiser position is to play the terminal amount of cuts which has risen from 40bps when I first showed the underpricing earlier this month to now 72bps.

In a world where the Fed has become obsessed with inflation, the move this week in oil is crushing inflation expectations.

This inflation expectation decline is one big reason (I have about 8 others if you want to go over it) why Fed cut pricing will persist and likely grow in the face of still sky high equity prices and a tight labor market. The Fed has two mandates and their main focus/obsession, inflation, is now falling out of bed.

via ZeroHedge News http://bit.ly/2X4RvGi Tyler Durden

Environmental Group Behind California’s Paper Receipt Crackdown Is Chaired by CEO of Digital Payment Company

They’re at it again. On Thursday the California Assembly passed a bill that would require customers to request a paper receipt before they can be given one.

“Most of us don’t need a physical receipt for every transaction. It doesn’t make sense to kill so many trees and unnecessarily expose people to toxins for something we don’t often need,” said the bill’s sponsor, Assemblyman Phil Ting (D–San Francisco), after its passage. The bill now moves to the state Senate.

Starting in 2022, AB 161 would forbid businesses from providing customers with a traditional paper receipt unless they ask for one. Beginning in 2024, businesses would also be required to provide digital proof of purchase should a customer so request.

Cash-only businesses, health care providers, and retailers doing less than $2 million in business each year are exempted from the bill. Should you be caught printing up receipts in violation of the law, you’ll get two warnings, after which you could be fined up to $300 a year.

To make the environmental case against receipts, Ting’s bill relies on Green America, a D.C.-based group whose “Skip the Slip” report says that receipts produce about 150,000 tons of waste each year.

The chairman of Green America’s Board of Directors is Jeff Marcous. Marcous also serves as CEO of Dharma Merchant Services, which sells digital point-of-sale technology—the kind that Ting’s bill would require stores to adopt.

In the May 2018 version of Green America’s “Skip the Slip” report, the group estimates that 10 million trees were felled each year to produce America’s paper receipts. A January 2019 version of the report says the country uses only 3 million trees to produce all our receipts. The report does not explain this dramatic fall in the estimate, and Reason‘s request for clarification about the change was not addressed as of press time.

Green America’s newest estimates of receipt paper usage actually appear to be on the low side. The American Forest and Paper Association (AFPA) estimates that the U.S. goes through about 181,000 tons of paper receipts year. Grand View Research, a market research firm, puts the amount of receipt paper at 282,000 tons a year.

But this is a tiny fraction of even California’s own paper waste. According to analysis from the California Assembly’s Committee on Natural Resources, 17 percent of waste deposited in California landfills, roughly 5.95 million tons, is comprised of paper.

No state-specific data exists on receipt usage. But for the sake of argument, let’s assume per capita receipt consumption is uniform across the country.

Given the state comprises 11 percent of the country’s total population, this would mean Californians use 11 percent of all the country’s receipts, or 31,000 tons. (That’s relying on the highest estimate of receipt paper consumption.) That would mean receipts make up .5 percent of the state’s paper waste, and .08 percent of total waste.

Even if all of the country’s receipts were dumped in California, they’d still comprise about 5 percent of its paper waste and at most 1 percent of total waste.

Ting and Green America say receipts also pose a health risk because they contain Bisphenol-A (BPA) and Bisphenol-S (BPS).

“Implementing phenol-free paper is an essential immediate step to ensure worker and customer health,” says Green America’s report. A press release from Ting’s office similarly calls the public health impacts of receipts “especially alarming.”

But both the American Food and Drug Administration (FDA) and the European Food Safety Authority (EFSA) have said that the levels of BPA found in food containers and packaging are safe, and do not pose a risk to consumer health. In 2015 the EFSA—generally a hypercautious group—released a report concluding that “BPA poses no health risk to consumers of any age group.”

Meanwhile, paper receipts are popular. A May poll from Tulchin Research found that 72 percent of California voters prefer paper receipts.

In short, receipts are a tiny, tiny fraction of paper waste, and safety watchdogs in both the U.S. and Europe have found that they do not pose a health risk. The push against them is as misguided and invasive at best, cynically self-interested at worst.

If California legislators really wanted to reduce unnecessary paper consumption, they should consider printing fewer nonsense bills.

from Latest – Reason.com http://bit.ly/2QoiKJf
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