Fedex Refuses To Bow To Pressure, Won’t Discriminate Against NRA Members

While dozens of companies bowed to media pressure over the weekend, many severing ties in part or in whole with the NRA, or simply eliminating long-standing price discounts with the association’s members, among them Avis, Hertz, Delta, United, MetLife and others on Monday, FedEx refused to bend to demands to discriminate against NRA members.

In a press release issued on Monday afternoon, the logistics giant “responded to questions on the National Rifle Association, Gun Safety and Policy.”

In it, FedEx said that while it “opposes assault rifles being in the hands of civilians” and that it “views assault rifles and large capacity magazines as an inherent potential danger to schools, workplaces, and communities when such weapons are misused” therefore supporting “restricting them to the military”, it added that since it is a common carrier and “does not and will not deny service or discriminate against any legal entity regardless of their policy positions or political views” it will not end its discounted rate with the NRA which “is one of hundreds of organizations in our alliances/association Marketing program” as “FedEx has never set or changed rates for any of our millions of customers around the world in response to their politics, beliefs or positions on issues.

The Fedex statement was met with anger by anti-gun advocates, most notably David Hogg, who urged his followed to “Sell FedEx stock! If they wanna stick with NRA we’ll stick with @usps or @UPS

 

The NYT’s David Leonhardt also slammed the FedEx decision:

Ending a discount program won’t, in and of itself, save any lives or cause great political damage to the N.R.A. But the FedEx situation has now become something of a test case of the new anti-gun movement. It’s also a test case for whether a major company feels comfortable allying itself with a group that effectively promotes violence.

I’m with the students on this one: I encourage you not to use FedEx so long as it’s comfortable siding with the N.R.A.

End result: FedEx stock closed near session highs, up 1% on the day.

… as conveniently pointed out by some Twitter members:

Full FedEx statement below

FedEx Corporation’s positions on the issues of gun policy and safety differ from those of the National Rifle Association (NRA).  FedEx opposes assault rifles being in the hands of civilians.  While we strongly support the constitutional right of U.S. citizens to own firearms subject to appropriate background checks, FedEx views assault rifles and large capacity magazines as an inherent potential danger to schools, workplaces, and communities when such weapons are misused.  We therefore support restricting them to the military.  Most important, FedEx believes urgent action is required at the local, state, and Federal level to protect schools and students from incidents such as the horrific tragedy in Florida on February 14th.

FedEx is a common carrier under Federal law and therefore does not and will not deny service or discriminate against any legal entity regardless of their policy positions or political views.  The NRA is one of hundreds of organizations in our alliances/association Marketing program whose members receive discounted rates for FedEx shipping.  FedEx has never set or changed rates for any of our millions of customers around the world in response to their politics, beliefs or positions on issues.

 

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Georgia Lt. Gov. To Delta: No NRA Discounts, No Corporate Welfare

Casey Cagle—Georgia’s Lt. Governor and Republican gubernatorial candidate—says he will not support any more corporate welfare for Delta Airlines…until the company starts giving National Rifle Association members discounts again.

“I will kill any tax legislation that benefits Delta unless the company changes its position and fully reinstates its relationship with NRA,” Cagle said on Twitter today. “Corporations cannot attack conservatives and expect us not to fight back.”

The Atlanta-headquartered Delta had previously extended a group travel discount of 2 to 10 percent to NRA members travelling to the organization’s national conference to be held in Dallas in May.

On Saturday, Delta said via Twitter that it would be ending these discounts, and asking the NRA to remove any information about Delta and its travel programs from its website.

Several corporations, including United Airlines and Enterprise Rent-A-Car, have likewise pulled special discounts they have given to NRA members in response to pressure from activists demanding companies cut ties with the organization following it’s adamant pro-Second Amendment stance in the wake of the Parkland, Florida shooting.

The revocation of these discounts provoked a bevy of criticism from the right-wing media. Breitbart has spread calls for boycotts of Enterprise, while Fox News writer Todd Starnes live-tweeted his call with Delta customer service to see if he, as an NRA member, could still fly with the airline.

Cagle’s threat appears to be the first angry reaction to come with potential policy consequences for Delta airlines.

Currently the Georgia state legislature is considering a large tax cut bill that includes an exemption for jet fuel from state and local taxes. The provision is reported to save all airlines $50 million, $40 million of which would accrue to Delta.

The Georgia House of Representatives easily passed the bill last week. The measure is now being considered by the state senate, where Cagle—by virtue of his position as Lt. Gov.—serves as President. Should the 56-member state senate reach a tie vote on the tax cuts, Cagle would get to cast the deciding vote.

The Lt. Gov’s threat has provoked a range of reactions on Twitter. Some have offered criticism of Cagle for threatening to punish a company through the withholding of state benefits solely because of their political expression.

Others have spotted a free market silver lining. Business Insider‘s Josh Barro tweeted “if the culture war makes it harder to get corporate welfare bills through state capitals, that might be a silver lining of the culture war.”

Libertarians would not be remiss for being split on the matter. One the one hand, a politician refusing to back a special tax break because of his pro-Second Amendment views sounds pretty good. On the other hand, making opposition to corporate welfare contingent on whether businesses themselves hand out special deals to favored interest groups sounds less appealing.

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50 Cent Tells Feds: Bitcoin Fortune Was Fake News

Less than a month after rapper 50 Cent reportedly declared that he had accidentally amassed an $8 million fortune by holding on to a cache of bitcoins he received back in June 2014, the Queens-born rapper and actor said in sworn testimony that the bitcoins never existed.

According to TMZ and The Blast, the rapper filed a sworn declaration in bankruptcy court saying “[I have] never owned and [do] not now own, a Bitcoin account or any Bitcoins, and to the best of his knowledge, none of his companies had a bitcoin account from 2014 to the present.”

The rapper said he asked his financial advisers to investigate the situation after the US Trustee in his bankruptcy case and other creditors started asking about the coins.

It was widely reported last month that the rapper collected 700 bitcoins via his album sales – an amount that would be worth about $7 million at today’s price.

The documents were obtained by TMZ, which is following 50 Cents jaunt through bankruptcy court. The rapper is being sued by the ex-girlfriend of rival rapper Rick Ross for allegedly leaking a tape showing her having sex with her boyfriend.

FiftyCent

Of course, it’s unclear if 50 Cent was being dishonest to begin with – or if he’s just trying to avoid reporting his bitcoin assets.

According to the court documents, 50 Cent said he didn’t feel compelled to deny stories about his bitcoin wealth, saying “as a general matter, so long as a press story is not irreparably damaging to my image or brand, I usually do not feel the need to publicly deny the reporting.”

“This is particularly true when I feel the press report in question is favorable to my image or brand, even if the report is based on a misunderstanding of the facts or contains outright falsehoods.”

However, he did acknowledge that it’s possible some sales of his  album “Animal Ambition” and merchandise may have been paid for in bitcoin, but he said they were converted to US dollars by a third party before he ever saw the money.

The rapper famously earned $100 million from an investment in Vitamin Water – which was eventually sold to Coca-Cola.

The news of 50 Cent’s denial hardly dented a bitcoin rally that carried the pioneering cryptocurrency back above $10,000 on Monday.

Crypto

In an unrelated development, Deputy Attorney General Rod Rosenstein said the Department of Justice is honing in on criminal uses of cryptocurrencies.

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Selling Sovereignty on the Retail Level

Cutting-edge libertarian-world projects such as Seasteading and Liberland are rooted in the idea of widening competition in sovereignty. They also reflect the idea that the trappings of sovereignty that a globetrotter might value needn’t rely on physically inhabiting a particular piece of land.

The Atlantic has published a feature focused mostly on the nation of Cyprus’ “golden visa.” The country essentially sells citizenship to foreign investors “by setting a price on passports,” James Bridle writes. “If foreign nationals invest in property above a certain price threshold, they can buy their way into a country—and beyond, once they hold a citizenship and passport.”

Given the annoying rules a given country might place around their passport—including being fully up to date on taxes they claim you owe—there are obvious benefits in being free to choose from more than one.

A few nations offer such visas, but Cyprus, being part of the European Union (E.U.), offers an especially valuable set of travel rights. As Bridle points out, in Cyprus the whole transaction, “including acquisition of suitably priced real estate, can be carried out without ever setting foot on the island. The real estate doesn’t even have to exist yet—it can be completely virtual, just a computer rendering on a website. All for just 2 million euros, the minimum spend for the citizenship by investment.” This is an important development for anyone interested in the advantages of magnifying competition between states.

Some Cypriot politicians are alarmed at the possibilities of bribery and of passing on special benefits to pals in law and property development, so they want to demand that every citizen who buys Cypriot rights be a matter of published public record. “What third-country national, with a good reputation, would object to his or her name being made public once their application is approved?” asks the Cypriot Mail. But as Reason‘s Matt Welch has reported, dual passport holders have every reason to fear official harassment and might reasonably object to having it flagged that way. (Bridle’s story has an interesting detail about the looseness of “sovereignty” for small nations such as Cyprus when faced with the power interests of bigger ones, noting how “At one end of the island, fields of satellite dishes at NSA/GCHQ’s Ayios Nikolaos Station keep a close watch on the Middle East; at the other end, across the bay from Limassol, U-2 spy planes and RAF Tornadoes bound for Syria and North Africa roar out over the sea.”)

Markets in sovereignty, as some critical of the Cypriot experiment note, can indeed mean that folks with big money will seek tax rules more congenial to them. The Atlantic writes off the current practice as not much more than “an international, distributed version of gentrification”—though some of the practices it discusses, such as Estonia operating portions of its national health care system via blockchain, promise what even Bridle sees as benefits to the less-well-off.

The idea of virtualizing sovereignty has value and importance far beyond any individual’s tax bill (not that that tax bill is any of your business, would-be complainer). In a world seeing a resurgence of a hostile, illiberal nationalism based on ancient notions of “blood and soil,” it’s good to see a growing recognition, and practice, of the idea that the things we want out of being a “citizen” needn’t rely on actually standing on a given piece of land, much less having had a sufficient number of ancestors who did.

Encouraging governments to see citizenship as something not imposed on you or attached to you by luck (good or bad) of birth but something they should strive to make attractive to people with a choice in the matter has great potential for making the world a more interesting and freer place.

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Lacalle: “Be Ready For The Next Enron, Winter Has Arrived”

Authored by Daniel Lacalle via DLacalle.com,

The end of the era of cheap money highlights the risk of “Enron-style” bankruptcies in many sectors, including renewable energy. With the path of three rate hikes in the United States in 2018 confirmed by the Federal Reserve and a nervous equity market, the challenges are more evident than ever.

 

The past eight years of massive liquidity and low rates have not helped deleverage, and many companies have used this period to increase imbalances and create complex debt structures. In fact:

  • Corporate net debt to EBITDA levels is at record highs. About 20% of US corporates face default if rates rise, according to the IMF.

  • The number of zombie companies has risen above pre-crisis levels according to the Bank of International Settlements (BIS).

This is particularly evident in the renewable sector where, even in the years of high liquidity and low rates, bankruptcies soared.

The renewable sector has undergone an absolutely spectacular transformation in the past eight years. Technology advanced, costs fell and global leaders strengthened when their strategy was to develop an energy model. Understanding that disruptive technologies cannot be more leveraged than traditional ones was key. When technology reduces costs and disrupts inflationary models, basing the business on ever-increasing subsidies and higher prices and financing it with massive debt is suicidal.

In the era of cheap money and extreme liquidity, many companies used the “green” subterfuge to implement an extremely leveraged builder-developer model, ignoring demand, costs, and competition. A model whose sole objective was to install for the sake of installing capacity, whether there was a demand or not, and that pursued subsidies while stating that it is very competitive.

Even in a period of falling interest rates and very high liquidity, there have been spectacular bankruptcies, so imagine what can happen when rates rise.

Bankruptcies such as SolarWorld, ET Solar, American Solar, SunEdison, Sungevity, Suniva, Beamreach, Verengo Solar and others did not happen due to lack of support or technology, but due to a bubble-type business model. Increase debt to pay debt, death from excess capacity and working capital amidst unbridled imperialistic growth aspirations. While many companies filled Powerpoint slides with the competitive advantages of lower costs, their business sank due to the impossibility of generating returns above the cost of capital and the evidence of death by building working capital.

If a technology is viable, it does not need subsidies. If it is unviable, no subsidies will change it.

Bankruptcies in the solar sector exceed all those of the inefficient coal and fracking companies combined. This domino of bankruptcies, which includes more than 120 corpses of large companies around the world, was self-inflicted. And now, winter is coming.

Cheap debt is very expensive in the medium term. Integrated conglomerates learned that hard lesson years ago.

But the risk is now greater.

The global renewable sector faces refinancing needs in the next seven to eight years that exceed its entire market capitalization (134 billion euros, Renixx Index).

It is not a problem of technology, it is the addiction to cheap debt and growth for growth sake. And it’s not just a problem in the renewable sector. The combination of lower revenues and increased debt costs is a danger. Cost of debt rises, and cost of equity soars due to higher perceived risk, which in turn can dry up the market for capital increases and refinancing.

It is not just renewables, but it is worth highlighting that energy is -again- the most vulnerable sector due to the cyclical nature of its revenues and the perpetuation of overcapacity of the past eight years.

In 2018, for all sectors, refinancing needs exceed one trillion euros in Europe, Africa, and the Middle East. This figure is doubled if we include China and other markets.

At the same time, the number of zombie companies has skyrocketed in the era of cheap money. What is a zombie company? Those that are not able to pay interest expenses with operating profits.

Not all is bad news. Just as the end of the dotcom bubble gave us better and greater internet service and infrastructure at lower prices, the bankruptcy of the inefficient sectors will give us higher quality services at a lower cost.

The fallacy that “if interest rates rise, we will increase capital” has been dismantled many times in recent years. When debt markets close, equity markets close in tandem.

The next time you are told that companies have to borrow more to grow because rates are low or that increasing debt improves the cost of capital, remember. None of it happens if the business’ repayment capacity disappears with a mere 1% rate increase.

Be ready for the next Enron. Winter has arrived.

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Should We Abolish the Sex Offender Registry? New at Reason

On February 12, 2018, Emily Horowitz debated Marci Hamilton over whether we should abolish the registry for convicted sex offenders. Horowitz is chair of the sociology and criminal justice department at St. Francis College, and Hamilton authored Justice Denied: What America Must Do to Protect Its Children.

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Supreme Court Hearing Case Challenging Mandatory Union Fees, Monica Lewinsky Writes Abpout Relationship with Bill Clinton, West Virginia Schools Closed as Teachers Protest for Higher Pay: P.M. Links

  • The Supreme Court is hearing a case that challenges mandatory public sector union fees for non-members.
  • Monica Lewinsky reflected on her relationship with Bill Clinton and the power imbalances therein in a new essay in Vanity Fair.
  • Schools in West Virginia were closed today as teachers staged a walkout to protest for higher salaries and more benefits.
  • An Atlanta man ended up live streaming his own murder in North Carolina on Facebook.
  • The foreign ministry of China defended the ruling Communist Party’s decision to remove presidential term limits.
  • State media in Russia used footage from a video game combat simulator in a segment about the war in Syria.

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CNN President: Feds Should Investigate “Monopolies” At Google And Facebook

Amid reports that media organizations are tightening their digital paywalls to try and make up for falling advertising revenue, CNN boss Jeff Zucker is calling on Google and Facebook – traditional media’s two biggest competitors for advertising dollars – to help devise a solution to help news organizations monetize content posted on their platforms, according to Variety.

Zucker

…And with so much attention being paid to media mega-mergers (for example, the proposed merger of AT&T and Time Warner), regulators should also – in Zucker’s opinion – pay closer attention to the power of Google and Facebook. Zucker made these remarks at an industry conference in Spain.

“In a Google and Facebook world, monetization of digital and mobile continues to be more difficult than we would have expected or liked,” Zucker said, Monday, in a keynote address at Mobile World Congress in Barcelona. “I think we need help from the advertising world and from the technology world to find new ways to monetize digital content, otherwise good journalism will go away.”

Zucker referred to Facebook and Google as “monopolies” and that their dominance of advertising markets is “the biggest issue” facing the media industry.

“Everyone is looking at whether these combinations of AT&T and Time Warner or Fox and Disney pass government approval and muster, the fact is nobody for some reason is looking at these monopolies that are Google and Facebook,” Zucker said. “That’s where the government should be looking, and helping to make sure everyone else survives. I think that’s probably the biggest issue facing the growth of journalism in the years ahead.”

Asked what he would call the upcoming TV adaptation of Michael Wolff’s “Fire and Fury”, Zucker responded that he’d call it “Crazy Town,” adding that he’d start the

He added that he’d open the series on election night, showing President Trump and senior players in his campaign grappling with the fact that they were going to defeat Hillary Clinton – an outcome that none of them had anticipated, according to Wolff. 

Of course, Zucker – who has repeatedly clashed with Trump over his network’s adversarial coverage of the White House – said nothing about news networks and their obligation to ensure their coverage is free of partisan bias.

Research firm eMarketer recently estimated that Google and Facebook will account for more than 65% of US digital advertising revenues in 2018, according to the Hill.

 

 

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Stocks, Bonds, Bitcoin, Dollar, & Gold Rise (As Housing Collapses)

While the sales of new (and existing) homes crashed most in five years (as rates have spiked), stocks were panic-bid as the manic-month draws to a close

 

Nasdaq managed to get back to even for February…

 

Trannies were best on the day – rising over 2% before giving some back

 

Trannies outperformed thanks to Warren Buffett’s comments on owning an airline…

Bank stocks were soaring again for the second day in a row (despite falling and flattening rates)…

 

Even homebuilders saw ‘buy the dip’ love…

 

VIX was smacked lower early on – to a 15 handle…

 

Russell 2000 and Nasdaq Vols are back below the start of February levels…

 

HY Credit spreads slipped lower again today but remain notably elevated on the month…

 

Bonds also rallied on the day (bid overnight then sold off during the US session as stock surged)

 

Remember when rising rates were a bad thing for stocks?

Once again, Breakevens dramatically decoupled from Treasury yields…meaning real yields lower and thus stocks higher.

Financial conditions continues to ease dramatically back towards record lows (as The Fed prepares for 4 or 5 or 6… rate hikes this year)…

 

The Dollar was sold in Asia but bought back in a hurry in Europe to scrape out a green close… barely…

 

Cryptos bounced back (Bitcoin back above $10k and up for Feb) after Goldman headlines…

 

Despite the rebound in the dollar, commodities mostly managed to hold on to gains (except copper)…

Copper’s relative weakness helped support lower bond yields…

 

Finally, we note that silver at a key level of ‘cheapness’ relative to gold…

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Morgan Stanley Says The Great Bond Selloff Is Over

Buffett and Blankfein are wrong. That’s the message from Matthew Hornbach and the rates strategists at Morgan Stanley who proclaim in their latest report that “the bell has tolled for the best of the bear market in longer-duration bonds…We like the long end.

Amid record speculative short positions across the Treasury complex…

Morgan Stanley begins:

History has shown that consensus estimates for Treasury yields are usually wrong. Everyone understands that accurate point forecasts rarely occur. Either the consensus is wrong in terms of direction or, when it has the direction correct, the consensus is wrong in terms of timing. The wisdom of crowds has yet to grace itself on bond yield forecasters.

And furthermore, Hornbach and his team note that every time the bond market moves dramatically and unexpectedly higher in yield, the consensus forecast plays catch-up as the desperate “told you so” crowd of equity market commission-takers and asset-gatherers jumps on the trend to push ‘rotation’.

The chart below shows the 3-quarter-ahead consensus forecast for 10y Treasury yields over the past decade alongside 10y yields themselves.

The exhibit also shows that, even after yields stabilize, the consensus forecast continues to increase – likely reflecting bearish sentiment and recency bias in the wake of a large sell-off.

Morgan Stanley concludes: “We don’t feel compelled to join that crowd yet.

In Hornbach and his team’s view, it is too soon for FOMC participants to begin raising longer run dots with the view that the longer run neutral rate is rising. But it’s not too soon for participants to increase the pace of projected rate hikes to a degree that would still qualify as “gradual”. This keeps us in the yield curve flattening camp. We continue to see value at the long end of the Treasury curve relative to the projected equilibrium interest rate, as displayed in Exhibit 5 and Exhibit 6.

Hornbach concludes by suggesting investors maintain UST 2s30s flatteners at 0.92%… for now it’s working…

 

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