Bob Shiller Warns Of “Economic Crisis” Due To “Showman”-Trump’s “Chaos”

Nobel Prize-winning economist Robert Shiller warned that further escalation in US-China trade tensions would immediately result in an economic crisis and lambasted President Trump for causing this chaos.

Speaking in Beijing at the annual China Development Forum on Saturday, Shiller blasted the president as a “showman,” who “obviously relishes” celebrity, and whose actions are “totally unbecoming for a president.”

As CNBC reports, Shiller then got serious, warning that the “chaos” brought by a trade war could have a devastating impact.

The immediate thing will be an economic crisis because these enterprises are built on long-term planning, they’ve developed a skilled workforce and ways of doing things,” Shiller told CNBC.

“We have to rediscover these things in whatever country after the imports are cut off.”

Shiller then told CNBC that he did not believe there would be a significant inflationary effect to the U.S. from steel and aluminum tariffs, but he warned that heated trade rhetoric from both sides could send the American economy reeling into a recession.

“When you ask about the size of the impact on the economy, I think a lot of it is more psychological than direct, unless they really slam on tariffs,” he said.

The Yale economist pointed to the “most famous tariff war of all” during the Great Depression, which he said did not “plausibly, directly” affect economic growth “in a major degree,” but it may have helped “destroy confidence” and willingness to plan for the future.

“It’s exactly those ‘wait and see’ attitudes that cause a recession,” he explained, adding that…

It’s just chaos: It will slow down development in the future if people think that this kind of thing is likely.”

Shiller also questioned the fitness of others in the Trump administration, telling CNBC that president “has hired some extremist people.” He cited Peter Navarro, the White House trade advisor who wrote books called “Death by China” and “The Coming China Wars.”

“It seemed to me that no responsible president would give credence to that, but here we are. I think he’s a showman who is doing this for political reasons within the U.S.,” the economist said, pointing to the upcoming midterm elections and Trump’s own attempt to get re-elected in 2020.

 

 

via RSS https://ift.tt/2urQaQ0 Tyler Durden

The US Government Just Destroyed Our Privacy While Nobody Was Paying Attention

Authored by Carey Wedler via TheAntiMedia.com,

While the nation remained fixated on gun control and Facebook’s violative practices last week, the U.S. government quietly codified the CLOUD Act, its own intrusive policies on citizens’ data.

While the massive, $1.2 trillion omnibus spending bill passed Friday received widespread media attention, the CLOUD Act — which lawmakers snuck into the end of the 2,300-page bill — was hardly addressed.

The Clarifying Lawful Overseas Use of Data Act (CLOUD) “updates the rules for criminal investigators who want to see emails, documents and other communications stored on the internet,” CNET reported. “Now law enforcement won’t be blocked from accessing someone’s Outlook account, for example, just because Microsoft happens to store the user’s email on servers in Ireland.

The CLOUD Act will also allow the U.S. to enter into agreements that allow the transfer of private data from domestic servers to investigators in other countries on a case-by-case basis, further globalizing the ever-encroaching surveillance state. The Electronic Frontier Foundation, which has strongly opposed the legislation, listed several consequences of the bill, which it called “far-reaching” and “privacy-upending”:

  • Enable foreign police to collect and wiretap people’s communications from U.S. companies, without obtaining a U.S. warrant.

  • Allow foreign nations to demand personal data stored in the United States, without prior review by a judge.

  • Allow the U.S. president to enter “executive agreements” that empower police in foreign nations that have weaker privacy laws than the United States to seize data in the United States while ignoring U.S. privacy laws.

  • Allow foreign police to collect someone’s data without notifying them about it.

  • Empower U.S. police to grab any data, regardless if it’s a U.S. person’s or not, no matter where it is stored.

The bill is an update to the current MLAT (Mutual Legal Assistance Treaty), the current framework for sharing internet user data between countries, which both legislators and tech companies have criticized as inefficient.

Some tech companies, like Microsoft, have endorsed the new CLOUD policy. Brad Smith, the company’s president and chief legal officer, called it  “a strong statute and a good compromise,” that “gives tech companies like Microsoft the ability to stand up for the privacy rights of our customers around the world.”

They echoed the sentiment of lawmakers like Orrin Hatch (R-UT). In February, he said of the bill:

The CLOUD Act bridges the divide that sometimes exists between law enforcement and the tech sector by giving law enforcement the tools it needs to access data throughout the world while at the same time creating a commonsense framework to encourage international cooperation to resolve conflicts of law.”

But one of the biggest complaints from privacy advocates, however, it that the new legislation places too much unmitigated power in the hands of governments with abysmal human rights records while also giving too much discretion to the U.S. government’s executive branch. Noting that the executive branch will decide which countries are human rights compliant and that those countries will then be able to engage in data collection and wiretaps without any further restrictions or oversight, the ACLU warned:

Flip through Amnesty International or Human Rights Watch’s recent annual reports, and you can find a dizzying array of countries that have ratified major human rights treaties and reflect those obligations in their domestic laws but, in fact, have arrested, tortured and killed people in retaliation for their activism or due to their identity.”

The organization pointed out that no human rights organizations have endorsed the CLOUD Act, adding that “in the case of countries certified by the executive branch, the CLOUD Act would not require the U.S. government to scrutinize data requests by the foreign governments — indeed, the bill would not even require notifying the U.S. government or a user regarding a request.”

Further, the ACLU says, if a foreign government’s human rights record deteriorates, there is no mechanism to revoke its access to data. Considering the U.S.’ existing record on supporting regimes that severely restrict basic rights like freedom of expression, the expanded access the CLOUD Act provides is undoubtedly worrisome.

Also predictable is the government’s stale justification for expanding its power. As the CLOUD Act claims, it is purportedly to “protect public safety and combat serious crime, including terrorism” — even if it further empowers governments that support and commit said terrorism.

In an age where the government already engages in mass surveillance and is eager to disable the people’s efforts to protect their privacy through encryption technology, it is unsurprising, albeit dangerous, that Congress continues to encroach on what little is left of safeguards against unwarranted intrusions.

via RSS https://ift.tt/2GBIhfT Tyler Durden

Stocks Are Suddenly Tanking… Again

Tough to pin a catalyst in this flush – which has pushed S&P red and Nasdaq down hard – but a combination of NVDA’s drop, TSLA’s tumble, 5Y auction tail, and FB comments, seems to be stalling the bounce.

 

Or perhaps stocks are catching down to bonds…

 

As VIX spikes (and remains inverted)

via RSS https://ift.tt/2uuHsQO Tyler Durden

“Investors Have Become Completely Inured That All Cans Can Be Kicked Down The Road…”

Yesterday’s exuberance in stocks is continuing today (despite some early noise), but bond yields are tumbling, having erased yesterday’s spike higher (and the dollar is rolling back lower). All of this has former fund manager Richard Breslow wondering once again at the reignited ignorance of the stock market to every possible non-positive action… making it clear that investors should “resist any temptation to believe you know what the Chinese are thinking.”

Via Bloomberg,

It certainly isn’t a crime to not have a solid grasp on what is going on with the price action. It doesn’t even make you a bad person. Being out of sync with the market is an important state to identify and should be respected — not ignored nor fought. Opportunities, and good ones, come to all who wait. But I have to admit, it is of some comfort to realize that it is something going around and not just me.

If the equity rally yesterday and so far today can be laid off on having been sparked by a couple of tweets and throw-away lines, then I am going back to the charts until some of the muck has been cleared. As shares went soaring, it was pointed out that fears had been allayed because Treasury Secretary Mnuchin is optimistic about trade tensions. This morning I learned that the global rally continued thanks to the President tweeting that trade talks are going on and “all will be happy.” Man, if that’s all it takes, this should be easier than it looks.

From an analysis point of view, it is, however, safe to assume that the “noise” we’ve been experiencing is largely based on some extraordinarily short-term and superficial analysis. In truth, the market’s ability, and culpability, in ignoring big geopolitical threats is wholly intact. Investors have become completely inured to the belief that all cans can be kicked down the road.

That’s not what is meant by playing long-ball.

And to be fair, this week is month-, quarter-, for some year-end, all ahead of a long weekend. A certain amount of hinky trading is to be expected. But shouldn’t be given more than its fair due. Window-dressing can only mask so much.

So what to do for the next couple of days aside from making up a shopping list for the holiday meals?

Respect that oh-so-impressive 200-day moving average holding up the S&P 500 future. Use 2,700 as a major pivot point and assume if we ever take out 2,800, everything you’ve read for the last two weeks can be shredded. A simple game plan for a market that will rapidly thin out as Friday approaches.

The dollar is in the mood to torture traders. It’s tradable but has a lot going on well beyond the debate of who will impress us with new forward guidance. It’s very tempting to look for places to buy it, but it’s worth asking why it insists on continuing to come back offered. Just remember, if you are selling the currency here, you are making a call that it will be able to power through some formidable support. You wouldn’t be alone.

I’m taking the rest of the week off from Treasuries. They have hurt my feelings by being so insufferable with their unwillingness to move. But I have to confess, it is almost impossible for me to ignore the yield curve down here and consider just how flat 5s/30s will have looked if 40 basis point support holds. I may be crazy, but the yield curve could be a decent proxy way of playing the dollar. The Treasury auctions, all auctions going forward, will matter.

Whether it has any bearing on your trading strategy or not, resist any temptation to believe you know what the Chinese are thinking.

via RSS https://ift.tt/2pJ71ZK Tyler Durden

Coincident Economic Indicators: History Suggests Recession Is Close

Authored by Mike Shedlock via MishTalk,

The Philadelphia Fed’s coincident economic activity index suggests the economy is close to recession.

The Coincident Economic Activity Index is produced monthly by the Philadelphia Fed.

The indexes are released a few days after the Bureau of Labor Statistics (BLS) releases the employment data for the states.

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

A dynamic single-factor model is used to create the state indexes. James Stock and Mark Watson developed the basic model for constructing a coincident index for the U.S. Theodore Crone and Alan Clayton-Matthews adapted the basic model for the states. The method involves a system of five major equations: one equation for each input variable and one equation for an underlying (latent) factor that is reflected in each of the indicator (input) variables. The underlying factor represents the state coincident index. The model and the input variables are consistent across the 50 states, so the state indexes are comparable to one another.

On a year-over-year basis, recessions have started when the year-over-year CEI was around 2.5 percent.

Leading Economic Indicators

The Philadelphia Fed also produces leading indexes for each of the 50 states.

The data does not go back as far as the CEI data.

LEI Data Sources

  • Delivery times from the ISM Manufacturing Survey can be obtained from the Institute for Supply Management.

  • Housing permits can be obtained from the U.S. Census Bureau.

  • Initial unemployment insurance claims can be obtained from the Department of Labor.

  • Interest rates for the 10-year Treasury bond and the 3-month Treasury bill can be obtained from the Board of Governors.

The leading index for each state predicts the six-month growth rate of the state’s coincident index. In addition to the coincident index, the models include other variables that lead the economy: state-level housing permits (1 to 4 units), state initial unemployment insurance claims, delivery times from the Institute for Supply Management (ISM) manufacturing survey, and the interest rate spread between the 10-year Treasury bond and the 3-month Treasury bill.

A time-series model (vector autoregression) is used to construct the leading index. Current and prior values of the forecast variables are used to determine the future values of the index.

The model uses leading index components to predict the coincident index. The concept seems bogus, even more so with a closer look at the allegedly leading indicators.

Permits vs Starts

I question the use of housing permits as a leading indicator. Instead, I suggest using housing starts. Permits are essentially a leading indicator of a leading indicator and hugely wrong at economic turns.

ISM

Reliance on ISM data single-handedly makes the leading indicator report bogus.

For discussion, please see ISM a Leading Indicator? Of What?

via RSS https://ift.tt/2I72KGb Tyler Durden

Mediocre Demand For 5Y Auction Amid Record Weekly Treasury Supply

One day after the Treasury sold $124BN in 3 and 6 Month Bills and $30BN in 2Y bonds in average auctions, on Tuesday the Treasury continued its record weekly sales by unloading $24BN in 52 Week Bills and, moments ago, $35BN in 5Y notes.

Stopping at a high yield of 2.612%, the 5Y saw a dip in the yield from 2.658% one month ago and 2.44% in January; the yield also tailed the 2.609% When Issued by 0.3bps. This was the 5th consecutive tailing 5Year auction in a row.

On the other hand, the internals came in somewhat stronger than recent auctions, with the bid to cover rising from 2.44 to 2.50, and above the 6 month auction average of 2.45. Notably, Indirects took down 63.5%, a solid improvement to the 58.0% last month (just in case there is any confusion if foreign buyers are in the market), with Directs taking down 8.3%, down from 12.7% last month, leaving Dealers with 28.2% of the auction, down from 29.3% the previous month.

Overall, an average auction, however considering the record deluge of Treasury sales this week, which is just shy of $300BN, the fact that the market managed to digest the ongoing issuance with virtually no problem is more notable than the mediocre auction specifics.

via RSS https://ift.tt/2DZWGwK Tyler Durden

“Want To Freak Yourself Out?” Here Is All The Personal Data That Facebook/Google Collect

The Cambridge Analytica scandal was never really about Cambridge Analytica.

As we’ve pointed out, neither Facebook nor Cambridge Analytica have been accused of doing anything explicitly illegal (though one could be forgiven for believing they had, based on the number of lawsuits and official investigations that have been announced).

Instead, the backlash to these revelations – which has been justifiably focused on Facebook – is so severe because the public has been forced to confront for the first time something that many had previously written off as an immutable certainty: That Facebook, Google and the rest of the tech behemoths store reams of personal data, essentially logging everything we do.

In response to demands for more transparency surrounding user data, Facebook and Google are offering users the option to view all of the metadata that Google and Facebook collect.

And as Twitter user Dylan Curran pointed out in a comprehensive twitter thread examining his own data cache, the extent and bulk of the data collected and sorted by both companies is staggering.

Google, Curran said, collected 5.5 gigabytes of data on him – equivalent to some 3 million Microsoft Word documents. Facebook, meanwhile, collected only 600 megabytes – equivalent to roughly 400,000 documents.

Another shocking revelation made by Curran: Even after deleting data like search history and revoking permissions for Google and Facebook applications, Curran still found a comprehensive log of his documents and other files stored on Google drive, his search history, chat logs and other sensitive data about his movements that he had expressly deleted.

What’s worse, everything shown is the data cache of one individual. Just imagine how much data these companies hold in total.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Google even saves a log of every log a user has ever viewed or clicked on, every app they’ve every opened and every image they’ve every searched for – and every news article they’ve ever read.

 

 

 

 

 

 

Curran, who joked that he’s “probably on an FBI watchlist” following his twitter thread, explained that the data he highlighted – while some of it might seem obscure – could have thousands of potentially compromising applications, including blackmailing a rival or spying on a spouse.

 

 

 

 

 

 

The question now is: Will this transparency actually change user’s behavior? Or will Facebook’s hollow promises to change be enough to lull its legions of users back into a passive ignorance. As Curran points out, people would be outraged if they discovered the government was monitoring them to this extent. But when Google does it? People hardly bat an eye.

via RSS https://ift.tt/2IXvpyP Tyler Durden

Tesla Collapses To 12-Month Lows After NTSB Probes California Crash

Tesla shares were under pressure early on but news that The U.S. National Transportation Safety Board (NTSB) is sending two investigators to examine issues raised by a fatal Tesla car crash in California, has smashed the share to their lowest in a year…

As we detailed previously, while driving on Highway 101 near Mountain View, California, a Tesla Model X suffered a gruesome crash when the vehicle hit a carpool lane barrier, leading two more cars to crashing into it, and causing the lithium ion batteries powering the vehicle to ignite and explode, at which point the vehicle burst into flames.

Here are the details according to the Redwood City CHP.

 

And now, as Bloomberg reports, the safety board will examine the post-crash fire and steps needed to make the vehicle safe to remove from an accident scene, the agency said in a tweet Tuesday. It’s unclear whether the Tesla’s partially autonomous driving system, known as Autopilot, was engaged at the time of the crash, the NTSB said.

As a reminder, the investigation is the second this year involving Tesla by the NTSB, which opens only a handful of highway cases each year. The agency is also examining a Jan. 22 accident in Los Angeles in which a Tesla Model S rammed into the rear of a fire truck parked on a freeway. In that case, the driver told authorities on the scene it was operating under Autopilot.

With bond yields at record highs, Tesla stock investors are rapidly pulling out with the shares now below $290…

This is the lowest level since Elon Musk taunted shorts

via RSS https://ift.tt/2IVDfZK Tyler Durden

Nvidia Tumbles After Global Suspension Of Self-Driving Tests

One day after Arizona’s Governor  Doug Ducey announced  the suspension of Uber’s license to test self-driving cars on public roads in the state, moments ago Reuters reported that Nvidia would suspend self-driving tests across the globe after Uber’s fatality last week.

Like Uber, Nvidia has been testing self-driving technology globally including in New Jersey, Santa Clara, Japan and Germany.

The test halt is the second in 24 hours, and takes places shortly after Gov. Doug Ducey sent a letter to Uber Chief Executive Dara Khosrowshahi, in which he said that he found a video released by police of the crash “disturbing and alarming, and it raises many questions about the ability of Uber to continue testing in Arizona.”

The move also comes days after The New York Times reported that the company’s own documents showed the testing program was rife with issues. The documents showed trouble with driving through construction zones and requiring far more human intervention than competing companies.

Experts have told The Associated Press that the company’s technology should have detected the pedestrian in time to avoid the crash.

On Monday, the co-founder of Israeli start-up Mobileye, Amnon Shashua, said on Monday its computer vision system would have detected the pedestrian who was killed in Arizona by a self-driving Uber vehicle, and called for a concerted move to validate the safety of autonomous vehicles. In a blog post, Shashua also criticized “new entrants” in the self-driving field that have not gone through the years of development necessary to ensure safety in the vehicles.

News of the halt sent the stock tumbling…

…  and dragged the Nasdaq into the red.

via RSS https://ift.tt/2uqhwWz Tyler Durden

Cambridge Analytica Whistleblower: My Predecessor Was Poisoned

Cambridge Analytica whistleblower Chris Wylie’s testimony before the culture select committee of MPs has been nothing short of shocking. But perhaps the most disturbing claim made by the former Cambridge Analytica data scientist was that his predecessor was murdered in Kenya after a mysterious “influence brokering” deal went sour.

Wylie told the committee that he wasn’t aware of his predecessor or his fate when he arrived at Cambridge in 2012. But shortly after, he was looking for a file that would’ve been maintained by his predecessor. During the course of looking for the file, another employee told him about the rumors. Wylie’s predecessor, Dan Muresan, the son of a former Romanian minister of agriculture who is now imprisoned, was found dead in 2012, according to the Daily Mail.

Wylie said his predecessor had been working for President Uhuru Kenyatta’s re-election campaign when he was found dead.

‘Dan was my predecessor….what I heard was that he was working on some kind of deal of some sort – I’m not sure what.

‘The deal went sour.

‘People suspected he was poisoned in his hotel room. I also heard that the police had got bribed not to enter the hotel room for 24 hours.’

He added: ‘That is what I was told – I was not there so I speak to the veracity of it.

Muresan was the son of former Romanian Agriculture Minister Ioan Avram Muresan, who is now in prison for corruption charges.

According to a report of his death which ran in 2012 in the Bucharest Herald, the 32 year-old had studied at the LSE in London and had coordinated election campaigns in Europe, Africa and the US.

Romania’s Foreign Ministry told the Bucharest Herald at the time: The Romanian citizen was working with a British telecommunications company, being in Kenya for a while.

He had not yet registered his presence on Kenyan territory with the Romanian diplomatic mission.

When the police finally arrived, Muresan’s body was taken for an autopsy. It’s unclear if the death was even investigated as a homicide.  

During his lengthy appearance, Wylie made other extreme claims, including corroborating earlier reports that SCL Group – Cambridge Analytica’s parent company – had contracted with an Israeli private security firm to steal emails and other kompromat to be used against Nigerian President Muhammadu Buhari, who was running for president at the time.

Wylie then compared his former company’s work in Africa to the practice of colonialism.

Describing how SCL operates, Mr Wylie said: ‘You can be a colonial master in these countries…it was very much like a privatized colonial operation’

He also claimed that Alexander Nix, CA’s chief executive, set up a fake office in Cambridge in a bid to woo Steve Bannon.

He claimed that Nix was very wealthy, saying “you have to remember that a lot of these people are very wealthy already.”

“Alexander Nix in particular – there was one time when we were running late because he had to pick up a £200,000 chandelier.

These are people who don’t need to make a lot of money, but the thing that I learned is that for certain wealthy people, they need something to keep them occupied and they need projects.”

“Going into the developing world and running a country is something that appeals to them.”

 

 

via RSS https://ift.tt/2I4IgxZ Tyler Durden