Category: zerohedge

The number of Mexican politicians murdered since September has exceeded 113 as drug cartels continue to escalate a wave of violence that has transformed several popular vacation spots into mini-murder capitals.

And after 2017 marked the country’s bloodiest year in two decades, with more than 25,000 murders, some Mexican officials are starting to fight back against endemic corruption.

As Fox News reports, the entire police force of a small Mexican town in Michoacan, a province in western Mexico, has been arrested on suspicion of being involved in the murder of a mayoral candidate.

In all, 28 officers in Ocampo, Michoacan, in western Mexico have been transferred to the internal affairs unit of the state security secretariat.

The probe is reportedly focusing on potential violations of the police code of conduct – though the official statement on the arrests didn’t include any more details.

“All of them are being interviewed to proceed as due under law in the event anyone has taken part in acts that violate the town’s codes,” according to the Security Secretariat.

Mayoral candidate Fernando Angeles, who was the candidate of the center-left Party of the Democratic Revolution in the city, which is home to 24,000 people, was shot dead on Thursday. And less than 24 hours before Angeles’ death, Omar Gomez, an independent candidate for mayor of Anguililla, also in Michoacan, was fatally shot. Before that, a candidate for mayor of Taretan, also in the state of Michoacan, was killed on June 14, according to the AFP.

The killings have intensified ahead of the July 1 elections, where Mexicans will be voting for a new president, as well as other local and federal posts. More than 200,000 people have been murdered since 2006 in the country’s war against the cartels, while another 30,000 are missing (and presumed dead).

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Authored by Economic Prism’s MN Gordon, annotated by Acting-Man’s Pater Tenebrarum,

A Walk on the Wild Side

“Never play cards with a man called Doc.  Never eat at a place called Mom’s.  Never sleep with a woman whose troubles are worse than your own.”

– Nelson Algren, A Walk on the Wild Side

Fresh Fruit or Rotting Vegetables?

A subtle gas seems to always be vented into the atmosphere at the sunset of an extended bull market.  As the light fades, an odor that’s indiscernible from that of fresh fruit or rotting vegetables wafts down Wall Street.  You can almost smell it.  But what it is you smell is too faint to accurately characterize.

DJIA, daily; quo vadis Industrial Average, and what’s that odd smell? At the peak in late January the  weekly chart of the average sported an RSI of 92 – an all-time record “overbought” condition. A few other indexes (particularly the Nasdaq and small cap indexes) have reached new highs in the meantime, but broad-based and large cap indexes have failed to confirm these moves. [PT]

The Dow Jones Industrial Average (DJIA) closed at a record high of 26,616 on January 26 – nearly five months ago.  Since then it has swooned and spiked with uncertain direction.  Buying the dip at this juncture may not work out in anyone’s favor.

When the stock market peaked out in mid-2007, in the early days leading up to the 2008-09 crash, some of Wall Street’s best and brightest mistook the smell of the moderate initial decline for that of fresh fruit.  They bought the dip. At the time, however, it was still unclear what the source of the subtle odor was.  Was it really fresh fruit?  Or was it actually rotting vegetables?

The answer remained unknown until mid-2008.  That’s when the bear market delivered the rancid and punishing stench of rotting vegetables.  If you recall, the DJIA crashed by over 50 percent.

There are dips to buy.  There are dips not to buy.  The stock market dip that occurred between mid-2007 and mid-2008 was a dip not to buy.  What about the current dip?

Highly Dubious

Billionaire hedge fund manager Paul Tudor Jones has a long track record for successfully sniffing out the direction of the market.  This week, the man with three names shared what his olfactory senses are detecting at present.

Paul Tudor-Jones explains the hazy imagery conveyed by his nasal radar in the most general terms possible. He is conversing with God’s worker, whose bald pate decorates the foreground. Insert: a younger version of Tudor-Jones back from when orders still had to be phoned in and he was making his first gazillion. The off-screen contraption he is looking at is a Quotron, which provided real time quotes in a design reminiscent of MS-DOS. Here is an unauthorized documentary from the time when the photo was taken. PTJ prepared for the 1987 crash – he was essentially betting on the idea that the market was mimicking the 1920s boom and that a crash pattern similar to the 1929 crash would end the rally – this turned out to be spectacularly correct. As an aside: it is quite funny that the first thing mentioned by the narrator in this 32-year old video are “recent Wall Street scandals” – when are there no “recent Wall Street scandals”? [PT]

The special occasion was a conversation with Goldman Sachs CEO Lloyd Blankfein, as part of the bank’s “Talks at GS” series.  Through a strange mixture of grins and grimaces Jones offered the following general assessment:

“You have to be thinking this is a highly dubious sustainable price… You look at prices of stocks, real estate, anything.  We’re going to have to mean revert to a normal real rate of interest with a normal term premium that’s existed for 250 years.  We’re going to have to get back to that.  We’re going to have to get back to a sustainable fiscal policy and that probably means the price of assets goes down in the very long run.”

Mean reversion of real interest rates and the decline of asset prices over the long run are gloomy prospects, as far as we can tell.  Jones, regrettably, didn’t elaborate on what exactly happens when there is a significant long run asset price decline.  Obviously, a stock market index chart – like the S&P 500 – would exhibit a wave pattern that generally trends down and to the right for, perhaps, a decade or more.  But what else happens?

In just a moment, and with a little help from the departed, we will attempt to clarify the matter.  Yet, first, we must make an important distinction: The 2008-09 financial crisis was not a significant long run asset price decline; it was merely a blip. A long run asset price decline is something much more severe.  It is associated with a depression.

America hasn’t experienced a real lengthy and desolate economic depression since the 1930s.  In fact, it has been so long, there is hardly a living soul left who experienced the nation’s last real depression.  Hence, we must visit the crypt to find a proper first-hand account.

The events related below are by now thoroughly mummified and live witnesses are becoming increasingly scarce. Consultation of the Crypt library is therefore required. [PT]

A Walk on the Wild Side

What follows for your consideration are the portentous words of the late Nelson Algren, a long forgotten novelist. The quote is from his equally long forgotten novel, titled A Walk on the Wild Side:

“The Ladder of Success had been inverted [in 1931], the top was the bottom, and the bottom was the top.  Leaders of men still sporting gold watches were lugging baby photographs door to door with their soles flapping.  Physicians were out selling skin lighteners and ship captains queued in hope of a cabin boy’s mop and pail.

“Offices of great fire insurance companies went up in smoke, which seemed no more than just.  When the fire department – long unpaid – cleared off, little remained but scorched files, swivel-chairs on which no one would ever swivel again, lovely heaps of frosted glass, and all that mahogany.

“All that mahogany that hadn’t helped anybody but brokers after all.  Then the brokers began jumping off rooftops with no greater consideration for those passing below than they’d had when their luck was running.  Emperors of industry snatched all the loose cash on which they could lay hand and made one fast last run.  Lawyers sued one another just to keep in practice.

“And every bug-house had one little usurer hidden away in a cell all his own where he did nothing but figure percent with his fingernail on the wall, day after day after day.

“In less time than it takes to say God with your mouth open, the go-getting door-to-door canvasser became the backbone of the American economy.  He went to work for Realsilk Hose or Hoover Vacuum long enough to go-get himself a dozen pair of Realsilk hose or a second-hand sweeper by stealing it part by part. 

“There was also small change, milk money and such, left lying about on shelves and sills while housewives studied one proposition or another.  Change snatching too came under the head of go-getting, for hundreds subsisted upon it week in and week out.

“However, the secretary of the Federation of Labor pointed out, Business was resisting further decline. Self-reliance for the penniless and government aid to those who already had more than they could use was the plan.”

Is this what Jones meant by “the price of assets goes down in the very long run?”  We suspect the answer will be revealed soon enough.

A collection of depression era cartoons in chronological order, from late 1929 to mid 1932. We have copied the cartoon captions in a larger font to make them easier to read. Our own comments are in square brackets and/or italicized. [PT]

A photograph of Nelson Algren (1909 – 1981) taken in 1956, the same year in which A Walk on the Wild Side was published. He is actually not quite as unknown as Matt indicates above…:).  A Walk on the Wild Side was Algren’s last commercial success, but his work experienced a noteworthy posthumous renaissance in the mid to late 1980s. Algren primarily wrote about assorted losers and outcasts and reportedly entertained far-left political leanings. Similar to many other Western intellectuals he seems to have fallen for Soviet propaganda, which was highly effective from around 1930 until the late 1960s (the invasion of Czechoslovakia in 1968 in order to suppress the “Prague spring” reform movement of Alexander Dubček was an eye-opener for many). To his credit, Algren appears to have had a healthy disdain for members of the US Communist Party on account of “negative experiences” he had with them (we imagine that the authoritarianism of party apparatchiks and their complete submission to the Dear Leader in Moscow were rather obvious, which he may have found off-putting – of course this is just a wild guess). Nevertheless, the FBI suspected him of harboring communist sympathies and as a result his passport applications in the 1950s were denied. This kept him from visiting his girlfriend Simone de Beauvoir in Paris (who was quite a prominent leftist/ existentialist/ feminist author at the time). When he was finally able to obtain a passport in 1960, their relationship had cooled to mere friendship status – or as Algren himself put it, it was “too late”, because their relationship had changed “subtly, but decisively”. This was sad for Algren, but the world was spared their potentially far-left offspring…:) [PT]

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Suicide is exploding in America – and the increase isn’t confined to celebrities like Kate Spade and Anthony Bourdain. Suicide rates have risen by an astonishing 30% since 1999, with suicidal people citing relationship stress, financial difficulties and other issues as the underlying cause.

But suicide rates have increased for some professions more than others. According to CBS, farmers are facing the highest suicide rate of any profession in the US. The suicide rate for people in the field of farming, fishing and forestry is 84.5 per 100,000 people – more than five times that of the broader population. And with retaliatory tariffs from China and the European Union set to further undermine US crop prices, a bad situation could be about to get worse. Meanwhile, the Federal Reserve is raising interest rates, making the loans on which farmers depend increasingly expensive. 

The study comes with a few caveats: For one, it leaves out Iowa, a major agricultural state. And while farmers make up the bulk of the workers in their subgroup, they do share the designation with a small number of workers from related occupational groups, like fishing and forestry. But the figures largely jive with other recent studies. For example, suicide rates are highest in rural areas – where the bulk of farming is done.

One source said today’s crisis of suicide might be worse than a similar wave that gripped the American heartland in the 1980s. 

“The farm crisis was so bad, there was a terrible outbreak of suicide and depression,” said Jennifer Fahy, communications director with Farm Aid, a group founded in 1985 that advocates for farmers. Today, she said, “I think it’s actually worse.”

“We’re hearing from farmers on our hotline that farmer stress is extremely high,” Fahy said. “Every time there’s more uncertainty around issues around the farm economy is another day of phones ringing off the hook.”

Finances are probably the most pressing reason: Since 2013, farm income has been declining steadily according to the US Department of Agriculture. This year, the average farm is expected to earn 35% less than what it earned in 2013.

“Think about trying to live today on the income you had 15 years ago.” That’s how agriculture expert Chris Hurt describes the plight facing U.S. farmers today.

Farmers are at the mercy of extreme weather like hurricanes that threaten crops to agricultural commodity prices that have fallen below breakeven production levels. And prices will likely only continue to fall as America’s trading partners slap tariffs on American agricultural products.

Of course, farmers aren’t the only American professionals feeling squeezed. In New York City, local press has focused on a wave of cab driver suicides in recent months which have been largely blamed on the rise of ride-sharing apps, which have devalued cab drivers’ medallions. Over the last five months, more than five New York City cabbies had committed suicide, blaming Uber for their financial troubles.

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The CBO released its latest long-term budget outlook today, and found that America’s financial situation continues to deteriorate. While there were not many notable variations from the last forecast, there were some notable differences.

A quick summary of the latest financial situation:

At 78% of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II. If current laws generally remained unchanged, the Congressional Budget Office projects, growing budget deficits would boost that debt sharply over the next 30 years; it would approach 100 percent of GDP by the end of the next decade and 152% by 2048 (by comparison, in its March 2017 forecast, public debt was estimated at 113% of GDP in 2017 rising to 150% by 2047). That amount would be the highest in the nation’s history by far. 

Moreover, if lawmakers changed current law to maintain certain policies now in place— for example preventing a significant increase in individual income taxes in 2026 as Trump has been suggesting — the result would be even larger increases in debt.

A breakdown of projected spending and revenue over the next 30 years is shown below.

This is how the breakdown by key spending and revenue components would change from 2018 to 2048.

On the GDP side, the CBO forecasts average annual growth of 1.9% for the 2018-2048 period, an increase from the 1.4% average over the past decade.

The CBO also forecasts inflation of 2.4% and unemployment of 4.6% for the 2018-48 period.

More troubling is the CBO’s projection of interest rates which will rise from their currently low levels and as debt accumulates, putting increasing pressure on government finances and push interest payments to record levels in the coming decades.

Specifically, the rising levels of federal debt would push debt payments from 1.6% of the gross domestic product in 2018 to 3.1% in 2028 and 6.3% in 2048, which would be the highest level ever. At that point, interest payments would equal spending on Social Security.  Those payments would help put overall federal spending to 29% of GDP for the first time since World War II.

What was perhaps most notable is that as part of its admission that there is no way of accurately predicting the true state of the US economy in 30 years, the CBO noted that in order to illustrate the uncertainty of its projections, the Budget Office examined the extent to which federal debt as a percentage of GDP would differ from the amounts in its extended baseline if the agency varied four key factors in its analysis.

• The labor force participation rate
• The growth rate of total factor productivity,
• Interest rates on federal debt held by the public, and
• Excess cost growth for Medicare and Medicaid spending.

Where it gets interesting is in the CBO’s admission that if CBO varied one factor at a time, federal debt held by the public after 30 years would range from 42 percentage points of GDP below the agency’s central estimate—152 percent of GDP—to 60 percentage points above it.

And here is the worst case outcome: If all four factors were varied simultaneously such that projected deficits increased, federal debt held by the public in 2048 would be about 96% of GDP above CBO’s central estimate.

Or, in other words, the CBO admits that if everything went wrong, US debt/GDP in 2048 would be a catastrophic 247%, a number that would make even Japan blush.

What would the soaring debt burden do to the US?

Large and growing federal debt over the coming decades would hurt the economy and constrain future budget policy. The amount of debt that is projected under the extended baseline would reduce national saving and income in the long term; increase the government’s interest costs, putting more pressure on the rest of the budget; limit lawmakers’ ability to respond to unforeseen events; and increase the likelihood of a fiscal crisis.

And here is the CBO’s sullen admission of how the hyperinflationary endgame would look like:

In that event, investors would become unwilling to finance the government’s borrowing unless they were compensated with very high interest rates.

The CBO’s parting words are hardly a source of comfort:

Those calculations do not cover the full range of possible outcomes, and they do not address other sources of uncertainty in the budget projections, such as the risk of an economic depression or a major war or catastrophe, or the possibility of unexpected changes in rates of birth, immigration, or mortality. Nonetheless, they show that the main implications of this report apply under a wide range of possible values for some key factors that influence federal spending and revenues. In 30 years, if current laws remained generally unchanged, federal debt— which is already high by historical standards—would probably be at least as high as it is today and would most likely be much higher.

Policymakers could take that uncertainty into account in various ways as they make choices for fiscal policy. For example, they might design policies that reduced the budgetary implications of certain unexpected events. Or they might decide to provide a buffer against events with negative budgetary implications by aiming for lower debt than they would in the absence of such uncertainty.

Policymakers could take that uncertainty into account, but they won’t, and instead what is much more likely is that when the next perfect storm hits the US economy, whoever is in charge will do what the US has done every time there was a crisis: issue even more debt, and bring the financial system that much closer to failure. Then again, in 30 years even if the “catastrophic” scenario for the US were to come true, one can only wonder what shape the rest of the world would be in…

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The newly emboldened populist wave sweeping Europe has begun to clash with establishment EU “open border” advocates, as governments opposed to illegal mass migration dig their heels in and resist the influx of mostly North African migrants. 

Europe has been sharply divided over asylum seekers – however words turned to action in early June when Italy’s brand new Interior Minister, Matteo Salvini, closed Italian ports to Non-Government Organizations (NGO) ferrying migrants into the country. The rest of Italy’s populist coalition government supported the move, fending off condemnation from “hypocritical” French President Emmanuel Macron and other EU leaders. 

Perfectly capturing the current rift between populism and progressivism in Europe, Hungarian Foreign Minister Péter Szijjártó got in a spat with BBC presenter Emily Maitlis on Monday while trying to explain why his country opposes an open-border policy.

“The current migration policy of the European Union can be very easily translated as an invitation in the minds of those people, who can easily make a decision to head towards Europe,” – Péter Szijjártó

When quizzed by Maitlis on Hungary’s “Stop Soros” legislation introduced in January the Foreign Minister said “There are organisations who help people to ask for asylum, even if they no legal basis for that… and they have to contend with the consequences.”

Triggered by Szijjártó’s answer, Maitlis tried to argue that anyone landing in Hungary has the right seek asylum and have their case heard, to which the Hungarian hit back: 

“From the south, we are surrounded by peaceful countries, so those people who are violating our borders all came from peaceful countries like Serbia and Croatia and there’s no point of reference in any international regulations why you should be allowed or helped or assisted to violate a border between two peaceful countries.”

“What we don’t want is a massive illegal influx coming from the south to us, we want to keep Hungary a Hungarian country and we don’t think by definition that multiculturalism is good… If you think so, if people in this country think so, we respect that, but please don’t put pressure on us.”

WATCH | “You are unbalanced. You are one-sided.” Hungarian foreign minister Péter Szijjártó calls out the BBC’s @maitlis on her bias – she was seething with rage because Hungary dares to oppose mass immigration!

Read https://t.co/qNPbpu8udL
Support us https://t.co/ntwXbJeHQw pic.twitter.com/nVsSgI5ynz

— Leave.EU (@LeaveEUOfficial) June 26, 2018

“We want to keep Hungary a Hungarian country and we don’t think that multiculturalism is by definition good,” says Hungary’s Foreign Minister Péter Szijjártó #newsnight pic.twitter.com/lkY33zvmax

— BBC Newsnight (@BBCNewsnight) June 25, 2018

Over the weekend, Polish MP Dominik Tarczyński of the Polish Law & Justice party shocked UK Channel 4’s Cathy Newman when asked if European politicians have a “moral, humanitarian duty” to help asylum seekers: 

Polish MP: “Why did these parents put their own children at risk? Why did they put them in this situation?”

Cathy Newman: “Don’t the politicians of Europe have a moral, humanitarian duty to step in?”

Polish MP: “…No” pic.twitter.com/B159mR3eNr

— Jack Posobiec🇺🇸 (@JackPosobiec) June 25, 2018

Austria, meanwhile just conducted a massive border security exercise on Monday in the town of Spielfeld in preparation for a wave of 80,000 migrants expected to travel through the new “Balkan route” from Albania, Montenegro, Bosnia and Croatia to Western and Central Europe.

In short, citizens of Germany, France and now Spain will continue to “enjoy” watching their culture become “multicultural,” while those in Hungary, Poland, Austria, Bulgaria and several other European nations take active measures to resist the open border policies. 

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Submitted by Nick Colas of Datatrek Research

We got the first sign of a “Trump Tariff Put” on Monday as the White House walked back threats to the Tech sector late in the day after a steep intraday decline in US stocks. That got us wondering: what sort of equity market pullback would it take to have the White House shelve/materially soften its plans to renegotiate numerous trade pacts? Our back of the envelope math: 9% on the S&P from here, or a 3-5% one-day decline on Chinese/European retaliation.

In a recent note we cast a wary but hopeful eye on the notion of a “Trump Tariff Put”; yesterday we saw it in action. The day started with a Wall Street Journal article outlining possible limitations on Chinese investment in US companies with “Industrially significant technology”. A pre-open walk-back tweet from Treasury Secretary Mnuchin did little to calm markets. At the lows of the day the S&P was at 2700, down 2%.

Then trade advisor Peter Navarro came out in the afternoon and said to “discount” notions that there would be investment restrictions. That seemed to do the trick, and the S&P closed at 2717. One gets the feeling that perhaps policymakers are unaware that Technology is 26% of the S&P 500, and by taking its trade issues into that sphere they crossed a red line. At least as far as equity markets go…

Making some lemonade from Monday’s tart action, at least we now know what sort of market action makes trade hawks fly back to the nest for a break. The magic number seems to be 2% on the S&P and right around 500 points on the Dow Jones Industrial Average. For our readers who trade for a living, it is worth keeping those numbers in mind for future trade news-driven days.

Thinking a little more broadly about the “Trump Tariff Put”, let’s consider how much of a stock market slide it would take to convince the White House to materially soften its efforts on this front. We know from Monday’s headlines this is their Achilles Heel. But how big is that target?

A few background thoughts here:

• #1. Whether by a happy accident or entirely intentionally, policymakers have staged their economic/trade program quite cleverly since the start of 2017. Year 1, focus on tax cuts to rev the US economy and push equities to all-time highs. Year 2, do the heavy lifting on the trade issues that were a hallmark of President Trump’s campaign for office. Hope that Year 1’s actions serve as a counterweight to Year 2’s harsher measures.
• #2. That makes the current trade initiative entirely dependent on real-time economic growth and, by necessity, equity market returns. And since the latter keys off not just on current earnings but their perceived sustainability/future growth, the Trump administration’s focus on stock prices does have some self-correcting moderation built into the cadence of its actions.
• #3. The wild cards in the deck just now: a Federal Reserve bent on raising interest rates, a slow motion train wreck in emerging markets, and global debt levels over 2x higher than a decade ago. How much of these factor into White House trade policy is hard to know. The same holds true, of course, for US equity prices. And how much the current administration will parse the effects of these factors to determine its course of action on trade is the $64 question.

So how much of an equity decline would it take for the administration to soften its tone on trade? Two answers:

• Down 9% on the S&P from here, as long as the decline was clearly due to trade war concerns. The math behind this guesstimate: the index is up about 18% since President Trump took office. Giving back half those gains would be palatable. More than that would not be, and may even spook markets and consumers into thinking a recession was inevitable. Not the right scenario going into midterm elections.

• A 3-5% one-day move lower based on European/Chinese retaliation. We know from Monday’s action that 2% is some sort of a pain threshold, but “fixing” it was still in the administration’s power (Navarro’s late date walk-back). If that were not possible because the catalyst was outside US control, that might be enough to push the White House into a softer stance.

Bottom line: as investors gather more experience with this administration, they see that it responds and shifts positions based on news flow. And if we’ve learned one thing about “Policy puts” over the decades, it is that markets get pulled in the direction of the strike price once volatility picks up.

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New York City’s favorite out-of-touch billionaire former mayor is preparing yet another presidential bid in 2020, which, as CBS New York points out, would make him both the richest and the oldest person to seek the job. While he was first elected mayor on the Republican ticket – and later as an independent – many speculate that, if he follows through with another presidential run, Bloomberg may seek the office as a Democrat.

The anonymous sources who leaked the story to CBS New York said Bloomberg’s decision to run is driven in part by remorse that he didn’t stay in the race in 2016. Though he famously proclaimed that he wouldn’t “risk helping Trump” when he announced in March 2016 that he wouldn’t move ahead with an independent run, his feelings about that decision have (understandably) shifted. He now believes he could’ve either won outright – or at least stopped Trump from becoming president (in reality, a Bloomberg independent run would’ve probably taken away more votes from Clinton). Bloomberg has considered a White House run in 2008, 2012 and 2016.

The former mayor (and founder of Bloomberg LP) has been racking up political IOUs thanks to the $80 million he’s reportedly spending to help Democrats during the November midterms. “Republicans in Congress have had almost two years to prove they could govern responsibly. They failed,” Bloomberg said in a statement released last week, according to the Hill. “I’ve never thought that the public is well-served when one party is entirely out of power, and I think the past year and half has been evidence of that,” he added.

Bloomberg also accused Republicans of doing little to “reach across the aisle to craft bipartisan solutions – not only on guns and climate change, but also on jobs, immigration, health care and infrastructure”.

But Bloomberg’s particular brand of “nanny state” liberalism (remember the infamous soda ban that was blocked by New York courts?) is probably as popular today as it was when he was a third-term New York mayor (not very). His pro-gun control stance would also help galvanize Trump’s base, who would likely come out to vote en mass to stop a president who questions the second amendment.

Bloomberg isn’t the only septuagenarian who’s eyeing a run for the Democratic nomination: Former VP Joe Biden is also reportedly considering a bid and one can never count out Bernie Sanders. Meanwhile, California Sen. Kamala Harris and New York Sen. Kirsten Gillibrand are also reportedly weighing bids of their own.

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Stephanie Wilkinson, the now infamous social justice warrior that kicked Sarah Sanders out of her Red Hen restaurant, has resigned from a local volunteer group following major backlash.

As the local NBC news outlet reports, Stephanie Wilkinson has resigned from her role as Executive Director with Main Street Lexington, a volunteer-based organization.

Elizabeth Outland Branner, the president of the organization, accepted Wilkinson’s resignation Tuesday morning.

“Considering the events of the past weekend, Stephanie felt it best that for the continued success of Main Street Lexington, she should step aside,” Branner wrote in an email.

Per the organization’s website:

Main Street Lexington exists to enhance the economic prosperity and cultural vitality of our community, re-establishing downtown Lexington as the vibrant economic and cultural nexus of our area while maintaining its unique character.

We are a volunteer-based organization established in 2013. We are affiliate members of the Virginia Main Street Program, which uses a proven “Four Point Approach” created by the National Main Street Center to achieve economic revitalization in the context of historic preservation.

*  *  *

We wonder if “she’d do it all again” now?

 

 

 

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At a time when regulators in the US and elsewhere are finally cracking down on ICOs – though the industry as a whole has largely failed to shed its patina of shadiness – there’s still at least one Silicon Valley VC firm that thinks launching a “long-term” ICO-focused VC fund is a smart idea.

Marc Andreessen

As the Financial Times reports, Andreessen Horowitz is launching a $300 million hedge-fund style “venture capital” fund to invest in ICOs with a “typical venture-capital timeframe” of 10 years, or longer. The company has already named a former DOJ prosecutor as its first female partner – which is probably a smart move for a fund where sniffing out criminality and fraud should be a top-level skill.

The Silicon Valley investment firm announced it had raised $300m to back new cryptocurrency-related ideas, including investing directly in the currencies themselves, which have become the focus of massive financial speculation.

Andreessen also named Katie Haun, a former prosecutor at the Department of Justice, to help manage the fund, making her the firm’s first female general partner. Ms Haun led some of the most prominent enforcement actions in the area, including the DoJ’s investigation of Mt Gox, a bitcoin exchange that collapsed after a massive theft.

The timing of AH’s decision is interesting, given that Fred Wilson of Union Square Ventures argued in a blog post published last week that “the venture capital fund model is not optimized for investing in the blockchain/crypto sector.” In fact, it’s difficult to imagine any investing model where an ICO-focused strategy makes sense. Price movements among ICO tokens typically correspondent to two qualities: hype, and manipulation.

But amazingly, the ICO market still looks attractive to some professional investors. As one Andreessen partner put it: “You squint one way and it’s a whole new asset class – you squint another way it looks a lot like the venture capital world,” said Chris Dixon, an Andreessen partner.

And if you really look carefully, it looks like a scam. Andreessen said it has already made “a number” of investments in blockchain companies from its main fund, and the firm hopes the new dedicated fund will allow for more “flexibility” in their investments. This is a curious bit of hedging, which suggests that the firm is aware of the immense risk it is taking, and begs the question: why continue?

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Authored by Michael Krieger via Liberty Blitzkrieg blog,

If you vote for Trump, then you the voter, you, not Donald Trump, are standing at the border like Nazis going ‘you here, you here’.

– Donny Deutsch on MSNBC last week

Whoever fights monsters should see to it that in the process he does not become a monster. And if you gaze long enough into an abyss, the abyss will gaze back into you.

– Friedrich Nietzsche

With each passing day, Trump’s hardcore supporters and detractors become more deeply entrenched in their respective corners and grow more hysterical. With every turn of the news cycle, we see two groups increasingly and equally convinced that only they and their allies can save the nation from total ruin. As someone who isn’t a cheerleader for any politician or political party, it’s fascinating to watch. It’s also made me consider where to draw the line when it comes to political action or commentary.

First off, we need to understand that an increasingly centralized, corrupt and unaccountable government making decisions for 325 million people will be inherently and systemically abusive toward the citizenry. To confront this reality we need resistance, but it can’t be the superficial, purely partisan kind.

Superficial resistance is what you see from establishment Democrats and MSNBC, peddling the fairytale that Trump the person is the problem, not the system itself. In contrast, genuine resistance is admitting and confronting our root problems which are deeply engrained and systemic. It means coming to terms with the fact we’re largely living in an imperial, executive-driven government structure as opposed to a Constitutional Republic. Congress doesn’t even bother to seriously weigh in on war and military operations anymore, essentially outsourcing its most awesome responsibility to whoever happens to be president. Trump the man isn’t our huge problem; excessive, secret and unaccountable government power is.

We need to admit that whoever happens to be elevated to the presidency will invariably abuse such misplaced power. Obama’s terrible policies were deserving of intense criticism as are Trump’s, but thinking that merely switching out the  president is going to magically fix our problems is deranged. This is why I have no patience for “the resistance” to-date, which focuses all its energy and passion on Trump the man, versus they  imperial leviathan he happens to be in charge of at this moment in time.

Obsessing about Trump the man has caused many of his high profile detractors to become overly hysterical, myopic and downright foolish. A perfect example of this occurred last Friday when Donny Deutsch, an advertising guy and pundit, explicitly instructed people to consider Trump voters Nazis.

What Deutsch manages to do is take an already existing obsessive focus on Trump the individual and move it in an even more counterproductive and mindless direction. Blaming Trump the man apparently isn’t superficial enough for him, so he encourages you to demonize the voter. You know the average person who’s intentionality given two awful candidates to choose from every four years. They’re the real problem according to him. Moreover, he doesn’t just want you to blame Trump voters, he wants you to consider them Nazis. This is the sort of clown they put on political television.

The fact that such nonsense so seamlessly flowed from his mouth demonstrates a total lack of capacity for reason. According to this logic, every Obama voter should be seen as a reckless imperialist murderer directly responsible for the destruction of Libya and the emergence of slave markets there. Feel free to use this sort of logic, but you won’t like where it leads.

Even worse for Deutsch, blaming voters is a surefire way to achieve noting politically.

Sorry, you can’t guilt people into voting the way you want by calling them Nazis.

Perhaps you could think about creating opportunities so that people can pay rent without eating dog food.

— Michael Krieger (@LibertyBlitz) June 22, 2018

Trump supporters expressed outrage over what Deutsch said, and I’m sympathetic to that. What he said was ludicrous, dangerous and petty. That said, many of those same people got equally bent out of shape over the fact Trump press secretary Sarah Huckabee Sanders was asked to leave a Virginia restaurant by its owners. On this front I disagree, and think it’s important to draw a distinction between what Deutch said and what the owner of the Red Hen restaurant did.

If you work in government you are voluntarily putting yourself in the arena in a unique way. There are boundaries you shouldn’t cross, but don’t put these people on a pedestal irrespective of where you lie politically.

— Michael Krieger (@LibertyBlitz) June 25, 2018

Of course, I’m not arguing “anything goes” when it comes to government officials and bureaucrats, but kicking Sanders out of a restaurant is a non-violent political statement specifically directed at someone who voluntarily works for government. Standing up to and making government officials uncomfortable is part of our political heritage. We should also never forget how uncomfortable our unaccountable and overbearing government makes us feel all the time.

Finally, the action may herald the beginning of a new sort of activism based on grassroots action as opposed to the superficial, nonsensical and completely phony resistance promulgated by cable television pundits and washed up corporate Democrats such as Nancy Pelosi and Chucky Schumer.

This is why the move scares people of both parties in D.C. Because they want deference. In fact, they demand it. But politicians and government bureaucrats should only be respected when they earn respect. They work for us. We need to remind them of that.

— Michael Krieger (@LibertyBlitz) June 26, 2018

Obama wasn’t the problem, Trump isn’t the problem, and one slice of desperate, irritated voters isn’t the problem either. If we want to start blaming voters then we should look in the mirror, because all of us allowed this to happen. Demonizing and dehumanizing our neighbors because they voted differently might feel good, but it won’t get us anywhere.

However, giving government officials a hard time for doing terrible things is a reasonable tactic, irrespective of which party happens to be in power. They work for us, and if they’re screwing us over (which is at least 95% of the time) we shouldn’t just bow down and accept it.

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