Category: zerohedge

As the People’s Bank of China’s longtime leader Zhou Xiaochuan prepares for retirement in March, speculation about who Chinese leader Xi Jinping might choose to succeed him is mounting – and according to Reuters, a formerly dark horse candidate is now being viewed with increasing certainty as Xi’s likely pick. 

His name is Liu He, and he’s both a senior government bureaucrat and longtime friend of Xi. Insiders say Liu has leapfrogged two other candidates as part of the wide-ranging government reshuffle that has accompanied Xi’s elevation to supreme leader during November’s Congress.

If he is, in fact, chosen to succeed Zhou, Liu could become one of the  most powerful central-bank governors in modern Chinese history.

Liu may be in a position to become one of China’s most powerful economic and financial officials ever, as he is already top adviser to Xi on economic policy and is also expected to become vice premier overseeing the economy.

Liu would replace current PBOC chief, 70-year-old Zhou Xiaochuan, who is China’s longest-running head of the central bank, having taken the job in 2002. Zhou is expected to retire around the time of the annual session of parliament in March, sources previously told Reuters.

The change would be part of a wider government reshuffle following the 19th Communist Party Congress in October last year, during which Xi laid out his vision for China’s long-term development, and elevated his key allies.

Speculation has been rife for months over the choice of the next central bank governor. Xi will have the final say, and the sources noted that while Liu is clearly the frontrunner he is not yet certain to get the job.

…

Just before last October’s Congress, sources told Reuters that China’s banking regulator head Guo Shuqing and veteran banker Jiang Chaoliang were leading contenders for the PBOC job.

Not only would Liu – who was educated at Harvard and speaks fluent English – be responsible for running the central bank, Reuters  says he is also set to become one of China’s four vice premiers who would oversee the economy and financial sector.

Reuters sources previously said that Liu was in line to become one of China’s four vice premiers, and that he would oversee the economy and financial sector. Whether he might hold both positions concurrently is unclear. As Reuters points out, only Zhu Rongji in the early-1990s held both the posts of vice premier and central bank governor simultaneously. Zhu later went on to become China’s premier from 1998-2003.

As Reuters points out, the PBOC is different from Western central banks in that it doesn’t have control over monetary policy – decisions on interest rates and the yuan are still governed by policies determined by the Party leadership. In a strategy that has repeatedly been employed by Chinese officials, Liu dangled the prospect of an open, internationalized economy in front of his audience at Davos last month, saying the country might soon roll out market-opening measures that would exceed “international expectations.”

But the next leader of the central bank will face tough challenges as he will have to walk a tightrope between ensuring economic stability and pushing reforms to rein in debt risks.

But perhaps most importantly of all, Liu has one key advantage over his rivals that, in addition to his friendship with and support of Xi Jinping, would probably aid his oversight of one of the world’s largest economies: He currently heads a government office in charge of preserving financial stability, and as a result almost undoubtedly had a hand in last night’s shocking news that Chinese regulators had decided to take control of Anbang Insurance – one of the country’s “big four” hyperleveraged conglomerates. That move was first announced by the China Insurance Regulatory Commission.

He was also widely seen by political analysts as being behind the voice of an unnamed “authoritative person” who wrote in the People’s Daily, the party’s mouthpiece, in May 2016 warning about risks from the country’s debt-driven growth model.

Liu, like Zhou, stands out among Chinese bureaucrats because of his grey hair. Many top officials dye their hair jet-black.

Liu, who currently heads the General Office of the ruling Communist Party’s Central Leading Group for Financial and Economic Affairs, is also set to become the head of the cabinet-level Financial Stability and Development Committee (FSDC), sources previously told Reuters.

He has been closely following Xi on regional tours and meetings with foreign leaders. When then-U.S. National Security Adviser Tom Donilon visited Beijing in 2013, Xi introduced Liu as “very important to me”, according to the Wall Street Journal.

The PBOC also recently shut down VIX trading, purportedly to halt market turbulence. Liu and Xi share a uniquely Chinese family history: that is, both their families were purged during the 1966-76 Cultural Revolution, and both their fathers were senior government officials.

“Without the reflection on the catastrophe of the Cultural Revolution, it is impossible for China to have today’s economic growth,” Liu said in an article published in 2017.

Amazingly, sources tell Reuters that Liu and Xi have been friendly since their teens, and have always kept in touch.

via Zero Hedge http://ift.tt/2GHSX93 Tyler Durden

Authored by John Vibes via The Mind Unleashed blog,

Raising rent prices and low wages have resulted in thousands of people across the city of Los Angeles becoming homeless, many of them now living in cars and RVs if they were able to keep it together that well.

According to the most recent counts by the KPCC, there are at least 7,000 people live in their cars in Los Angeles.

Many of these people still maintain jobs and try to live the most fulfilled lives that they can, but they are constantly facing problems from authorities.

It is such a common issue that many churches have opened up their parking lots to people living out of their cars. For example, the New Beginnings Counseling Center opened up their parking lot for a “Safe Parking program,” which was intended to provide a safe and welcome parking place for people living out of their cars. Unfortunately, under new legislation passed in Los Angeles, programs like this will be illegal, because sleeping in cars and RVs have been entirely outlawed.

Under the new laws, it is illegal to sleep in a car or RV that is parked in a residentially zoned area from 9 p.m. to 6 a.m. Areas within one block of a park, daycare, or school are entirely off limits. Fines will range anywhere from $25 to $75 which is impossible to pay for most people in these situations.

In 2014, LA lawmakers attempted to pass a similar bill but it was shot down in a federal appeals court. The judge in the case ruled that the legislation was “broad enough to cover any driver in Los Angeles who eats food or transports personal belongings in his or her vehicle. Yet it appears to be applied only to the homeless.”

The policy is up for debate and reconsideration in July, where homeless advocates are expected to strongly protest for an appeal.

Policies like this can have disastrous consequences, in Canada where laws like this have been implemented for some time, one man racked up over $110,000 worth of fines for essentially being homeless.

Last year, The Mind Unleashed reported that the city of Seattle was planning to set up razor-wire fencing to keep homeless populations from camping. Then, earlier this year we reported that San Francisco was using Robots scare homeless people away from encampments and report them to police.

Not soon after that, the city of San Francisco spent $8,700 installing large boulders under overpasses to prevent homeless people from setting up camps. There were numerous homeless encampments in the area until they were recently forced out of the area, and now the City’s government is doing everything they can to keep the camps out of the area.

via Zero Hedge http://ift.tt/2GFCuCn Tyler Durden

After admitting last week that “protocol was not followed” when at least two individuals called the FBI’s anonymous tip line to warn that Nikolas Cruz, the 19-year-old suspected of murdering 17 of his former classmates, the No. 2 FBI official said Thursday that he had visited the FBI’s call center this week as part of his review of why the tip wasn’t followed.

He also addressed, in the most detail yet, the mounting criticisms facing the bureau, according to the Washington Post.

The remarks followed NRA spokeswoman Dana Loesch’s assertion that the FBI was primarily to blame for not preventing the shooting.

Shortly before Bowdich spoke Thursday, NRA chief executive Wayne LaPierre, who was speaking at the same event, said the FBI’s leaders had gone “rogue.”

Acting deputy director David Bowdich said he believes the biggest threat to the FBI is “losing the faith of the American people”

“Look, I don’t want to get into who says what, but I do want to project out to the public, is when I look through the prism of risk for our organization, I find the number one risk for our organization is losing the faith and confidence of the American people. Number one,” Bowdich said when asked about the criticism from the NRA and others.

FBI Director Christopher Wray – who was appointed by Trump – has come under fire, with several prominent Republicans, including Florida Gov. Rick Scott, calling for him to resign. President Trump has said the bureau’s handling of the matter was “not acceptable.”

Still, while Bowdich provided some details about his visit to the FBI call center, he offered no new insight into why or how the tip wasn’t followed up on. The FBI is actively investigating why the tip wasn’t passed on to its Miami field office.

Bowdich said Thursday that he had visited the call center Monday with a team and sat in on some calls. He called the center “a professional operation” but added: “Now let me be clear that there was a mistake made. We know that. But it is our job to make sure that we do everything in our power to ensure that does not happen again.”

Bowdich did not directly address a question about why the tip on Cruz was not passed to agents in the field, though he hinted that those in the call center might have made a judgment error.

“People make judgments out on the streets every day. Every now and then, those judgments may not have been the best judgment based on the information they had at the time,” Bowdich said.

Last year, the FBI received about 765,000 calls, in addition to about 750,000 Internet tips, and 9 out of 10 did not produce leads that could be followed. He said the bureau was going back through its “holdings”  to make sure there aren’t any other similar tips that have slipped through the cracks.

Wray has held on so far, and speculation is mounting that he might stay on to supervise the internal probe into why, exactly, these tips weren’t followed up on.

via Zero Hedge http://ift.tt/2HH33Ix Tyler Durden

Authored by Daniel Greenfield via Sultan Knish blog,

Bots. Is there anything they can’t do?

The Internet Research Agency indictment accuses a troll bot farm of trying to influence the election in what the media claims is the worst attack on America since Pearl Harbor. 9/11 need not apply.

Bots are everywhere.

“Bots Are Trying to Help Populists Win Italy’s Election,” claims Bloomberg. “Russian Bots Are Using 2016 Tactics to Hijack the Gun Debate,” shrieks Vanity Fair. ABC spins that bots are trying to make Black Panther look bad. “Rampaging Twitter ‘bots’ bred in Suffolk farmhouse,” the London Times asserts.

This media madness might make you think that bots are some sort of new and advanced technology. But you can see them in the comments and they’ve been around forever. Automated programs that log into social media accounts are not a new technology. Internet users of a bygone era remember seeing them in chat rooms and on bulletin boards without ever rampaging around Suffolk farmhouses.

Bots have become a convenient media scapegoat. The new formula is “Bots + Thing We Disagree With = Proof We’re Right”. That’s why there are stories claiming that Russian bots are tweeting against gun control or Islamic migration. And it explains the “Russian Bots Rigged the Election for Trump” meme.

Bots are an informational technique. Media spin reverse engineers the technique to discredit the idea. Not only is that a fallacy, but bots just piggyback on popular trends to gain influence. Russian bots don’t tweet about gun control because they care about guns, but because they get retweeted. The same was true of the bots promoting Bernie Sanders and Donald Trump. There are a million brands doing the same thing with bots and influencers. But that’s okay because they push politically correct messages.

And that’s the bot double standard.

When Russian bots and trolls push Black Lives Matter, Bernie Sanders or Dakota Access Pipeline protests, their programmed actions don’t reflect on leftist causes, organizations and politicians. But the revelation that Russian bots and trolls tweeted about the Bill of Rights, Islamic migration or Trump is spun by the media into a conspiracy that indicts the ideas and discredits the previous election.

The latest example of the Big Bot Conspiracy is a bizarre Newsweek article by Nina Burleigh blaming Senator Franken’s problems on bots. Some might have thought that Franken had been forced to resign for groping women across America. But according to Burleigh, it was the fault of the Japanese bots.

The feminist activist was already infamous for putting her allegiance to Democrats ahead of sisterhood.

“I would be happy to give him a b_____ just to thank him for keeping abortion legal,” Nina Burleigh had said of Bill Clinton. “I think American women should be lining up with their Presidential kneepads on to show their gratitude.” Now Burleigh has brought her kneepads to the raided offices of Newsweek.

Nina Burleigh’s article blames Franken’s problems on “fake news sites, an army of Twitter bots and other cyber tricks”. The Democrat Senator’s original accuser is dismissed as a “Hooters pinup girl and lad-mag model”. So there was either nothing wrong with groping her or no reason to believe her.

That’s what leftists denounce as ‘slut-shaming’, but, as with Bill Clinton, it’s okay when Democrats do it.

Burleigh mentions the “release of a picture of a Tweeden and Franken” (editors are one of the casualties of Newsweek’s troubles), but neglects to mention that it’s a picture of Franken groping Tweeden. None of the other many accusers rate a mention from this feminist Franken activist.

There was the feminist choir member and book editor who accused Franken of groping her at the Women’s Political Caucus. It’s really hard to write her off as a “right-wing plant” or a “lad-mag model”.

Especially since she then voted for Senator Franken.

Another accuser was groped at the Loft Literary Center in Minneapolis and claimed that Franken wanted to join her in the bathroom. Nina Burleigh would have probably told her to go along and bring her senatorial kneepads in gratitude for his support of Planned Parenthood.

A Democrat congressional aide remembers Franken trying to give her an open mouth kiss while he was still a radio host with Air America. “It’s my right as an entertainer,” she recalls Franken telling her.

An Army vet on a USO tour described being groped by Franken during the Iraq War. “When he put his arm around me, he groped my right breast. He kept his hand all the way over on my breast.”

Jezebel, a hard left feminist site, offered an account from a liberal “former elected official in New England” who remembers Franken trying to plant a “wet, open-mouthed kiss” on her, on stage.

Instead of addressing the many accounts of Franken’s liberal accusers who supported him and, many of whom indicated they didn’t want him to quit, Burleigh, like most Frankentruthers from Tom Arnold to Richard Silverstein, smears Leeann Tweeden while ignoring Franken’s numerous other accusers.

After silencing the women who came out against Franken, Nina Burleigh surreally claims that the Franken accusations had served to “silence the testimonies of eight former female staffers who defended the Minnesota Democrat”.

Presenting testimonies from the few women you didn’t grope is not considered a compelling argument.

But instead of talking about any of this, Burleigh talks about bots. A “bot army” made the Franken accusations go viral. And then there was “a developer named Atsufumi Otsuka” who “registered a web domain in Japan” that hosted “Japanese-registered fake-news sites”. But, “by November 17, the trending of ‘Al Franken’ was officially also a Russian intelligence operation.”

The Japanese and the Russians had teamed up against the Minnesota groper. This wasn’t just worse than Pearl Harbor. It was WW2 and the Cold War combined in one hashtag.

“Researchers have found that each bot account had 30 to 60 followers, all Japanese. The first follower for each account was either Japanese or Russian,” Burleigh breathlessly relates.

Now that the Russian and Japanese bots had teamed up, all hope for humanity was lost.

Burleigh’s article has more international locations than a Tom Clancy novel. It also completely ignores the question of whether Franken groped his victims to discuss the bots who tweeted about it.

That’s not accidental. Burleigh doesn’t want to talk about whether Franken is guilty; she wants to write a progressive thriller in which international bots caused the problem by talking about it. And if it can be shown that bots amplified a scandal, then the facts somehow no longer matter. In the same way that if it can be shown that bots amplified Trump’s message, the 2016 election results were illegitimate.

But shooting the messenger bot doesn’t tell us anything the truth of the inconvenient message.

Since the election, these types of articles are everywhere. They rely on the work of “researchers” who are usually partisan activists, often amateurs with no actual technical training, to spread conspiracy theories. These conspiracy theories confuse correlation and causation. If a foreign bot retweets Trump, he works for the bot’s masters. If a bot tweets any conservative story, it’s a right-wing global bot plot.

Anyone who knows anything about how the internet works knows that this is nonsense.

Bots imitate to amplify. In this comments section, a bot will show up sooner or later, it will copy a comment that someone else made and post it in order to get likes so that it resembles a real account. For every stupid bot telling you how much it makes by working online, there’s a smarter bot leaving legitimate comments to blend in. And so bots tweet, comment and chat about everything popular.

If there’s a trending topic, the bots will quickly show up. And everyone uses them.

Rachel Maddow feeds the left’s appetite for bot conspiracy nonsense. But in 2013, MSNBC personalities, including Maddow, were being promoted by Chinese bots. Does that mean Maddow is a Chinese spy?

Bots are ads that pretend to be people. Tracking how they’re deployed can be interesting, but it’s dangerous to read too much into that.

Correlating bots with narratives isn’t actually causation.

The bot paranoia is being used to delegitimize real stories and candidates. If you can connect bots to a point of view you don’t like, then no one really believes it. Link it to a candidate you don’t like and he was never really elected. Hook it up to a serial predator in the Senate and you can ignore his victims.

But if you believe that, then MSNBC must be a Chinese informational warfare operations.

via Zero Hedge http://ift.tt/2BOEtoL Tyler Durden

Ten days after the reality of “rampant manipulation” in VIX was exposed yet again, perhaps because this time the market went down, US regulators are reportedly escalating their investigations into whether any wrongdoing occurred within VIX ETPs.

Following previous reports that The Financial Industry Regulatory Authority (FINRA) was scrutinizing whether traders placed bets on S&P 500 options in order to influence prices for VIX futures, and a whistleblower’s detailed explanation of how easy it is to spoof VIX’s tail to wag the market’s dog; Bloomberg reports that The Securities and Exchange Commission and the Commodity Futures Trading Commission have been conducting a broad review of trading since Feb. 5, when volatility spiked and investors lost billions of dollars, several people familiar with the matter said.

As a reminder, according to his letter, the whistleblower blames this VIX manipulation as the driver of last week’s volatility complex collapse:

“We contend that the liquidation of the VIX ETPs last week was not due solely to flaws in the design of these products, but instead was driven largely by a rampant manipulation of the VIX index,”

And, Bloomberg notes that after the losses, SEC officials reached out to Credit Suisse, a person with direct knowledge of the conversations said. Neither Credit Suisse nor ProShares have been accused of any wrongdoing. The regulators’ examinations are at an early stage and won’t necessarily lead to sanctions or new rules.

As another reminder, in May of last year we academic confirmation of the rigged nature the US equity market’s volatility complex, when a scientific study found “systemic VIX auction settlement manipulation.”

Two University of Texas at Austin finance professors found “large transient deviations in VIX prices” around the morning auction, “consistent with market manipulation.”

​Griffin and Shams calculate that “the size of VIX futures with open interest at settlement is on average 5.7 times the size SPX options traded at settlement, and it is 7.3 times for VIX options that are in-the-money at settlement.”

*  *  *

Bloomberg concludes that there is no indication thus far that specific companies, including Credit Suisse, are being probed, and an SEC spokesman declined to comment, while CFTC officials didn’t respond to requests for comment; but with losses now piling up, allegations of market manipulation are getting more attention and government watchdogs face questions about why small-time investors were permitted to buy such products in the first place.

While we certainly won’t be holding out breath for any regulatory crackdown on these products (as they are the mothers’ milk of the stock market), it is at least a positive that there is finally some scrutiny on the volatility complex (that may, just may, prompt some retail investors to be at least a little less willing to pile all their investments into the short-vol trade once again).

via Zero Hedge http://ift.tt/2CGvCSK Tyler Durden

Following “strained” magma chamber concerns at Yellowstone, Bay Area residents have grown increasingly concerned this week as a swarm of well over 50 earthquakes has struck in recent days…

Culminating in at least 32 quakes in the last 24 hours as large as magnitude 3.6 which struck the East Bay town of Danville around 3pmET today.

“It’s been nuts. It wakes us up every night. We have a little dog, sleeps on the bed with us, and he freaks out all the time,” said Danville resident Christian Sommer.

Bay Area Rapid Transit (BART) trains were impacted by the quakes with trains delayed.

“Looking in that general region, I’m counting 55 quakes just in the last week,” said Amy Vaughan, a geophysicist with the Geological Survey.

8 fault lines run through the bay.

Several more significant temblors then shook up Diablo area businesses at midday – the strongest being a 3.6.

“I was sitting at my desk when the first one hit,” said Danville resident Brenda Hammer. “And I thought something hit the building was my initial reaction. What just hit us?”

There was another swarm of quakes just three days ago on Tuesday.Some in the East Bay are busy retrofitting for a bigger quake.

This swarm comes just a few weeks after a 4.4 quake jolted much of Bay Area awake in January.

via Zero Hedge http://ift.tt/2ouVRGK Tyler Durden

Authored by Ryan McMaken via The Mises Institute,

2017 may have been the worst year for homicide in Mexico since the government began keeping track in the 1990s. 

It’s a safe bet that the homicide rate isn’t coming anywhere near what it was in the years surrounding the revolution 100 years ago. But it may be the worst rate in several decades. 

German news site DW reports: 

The Interior Ministry said authorities across Mexico opened 29,168 murder cases, saying that it put the country’s homicide rate at 20.5 per 100,000 inhabitants.

The highest figure ever recorded in Mexico before last year was in 2011, during the peak of the Mexican government’s war on drugs. That year, authorities recorded 22,409 homicides.

Unfortunately, some observers think the Mexican state is fudging the numbers:

However, experts have cast doubt on the latest figures, saying the homicide rate is likely much higher.

Mexican security analysts Alejandro Hope told AP news agency that the figure is based on the number of murder investigations opened last year, not the number of victims.

Hope added that it also doesn’t take into account that a killing may result in more than one victim. He placed the homicide rate closer to 24 per 100,000 inhabitants.

According to the official stats in recent years, the homicide rate in Mexico hit 22.6 per 100,000 in 2011, and then declined after that. If critics are right, and the current rate is near 24 per 100,000, that would be a new peak.

 

By comparison, the homicide rate in the United States was 5.3 per 100,000 in 2016 (the most recent data available) ranging from 1.3 per 100,000 in New Hampshire to 11 per 100,000 in Louisiana. 

Homicide rates vary far more wildly in Mexico, with rates ranging from around 1 per 100,000 in Yucatan state to over 100 per 100,000 in Colima state.

Why Are Rates So High?

Violent crime may be Mexico’s largest problem for its economy, growth, and its standard of living. In recent decades, Mexico has moved beyond single-party political rule. It now has competitive elections in more than name only. It has several metropolitan areas which are — outside of the crime issue — considered good places to do business.  It is increasingly connected to the global economy. The UN ranks it “high” on its Human Development Index. Along with other rapidly modernizing Latin American Countries like Chile, Argentina, Uruguay, and Panama, it would be very wrong to call Mexico a “third world” country. 

So why the persistent violent crime? 

This is one of those issues that has no simple answer. Part of the problem is due to a lack of local control. Some is due to the Drug War — as is the case in the US and other countries. Part is due to demographics. 

This doesn’t stop some commentators, though, from attempting to assign easy explanations to the problem. 

One such recent trend in polemics is found among gun-control advocates who attempt to blame Mexico’s crime woes on the availability of small arms in the United States. 

Unlike the United States, though, Mexico has relatively strict gun laws. As Vox notes: 

Mexico is one of the few countries that, like the US, guarantees the right to bear arms in its constitution. Still, Mexico maintains some fairly strict gun laws: All guns must be registered through the federal government, carrying a gun requires a license, sales are legally limited to one store in Mexico City, and carrying licenses can be taken away at the federal government’s discretion.

So, like much of Latin America, Mexico is a country with strict gun laws, but high homicide rates. 

So how to explain the problem? 

Well, in the case of Mexico, the answer for gun control activists is to blame the United States: “one way for Mexicans to get around their country’s strict gun laws is to simply walk across the border.” 

The logic proceeds accordingly: The presence of more guns means more homicide. And, although Mexico has strict gun laws, Mexico is unfortunately located close to the United States where guns can be easily purchased. Guns are then introduced into Mexico where they drive a higher homicide rate. 

There are some problems with this logic. Even if we account for all the black-market guns in Mexico, gun totals are still much higher in the US. That is, according to the 2007 Small Arms Survey, it is estimated that there are around 15 million privately-held guns in Mexico, on the high end. Even accounting for an additional increase since 2007, we’re looking at a rate of fewer than 20 guns per 100 people in Mexico. In the United States, on the other hand, that total is around 100 guns per 100 people. 

So, if one is going to pin Mexico’s violence problem on “more guns,” they have to account for why there are more than five times as many guns in the US, with only a small fraction of the homicides. 

Moreover, the statistics allegedly showing that as much as 70 percent or even 90 percent of guns seized in Mexico come from the US is not true. That statistic is based only on seized guns that are also traced by the ATF. How many of all guns seized in Mexico come from the US? According to Stratfor, “almost 90 percent of the guns seized in Mexico in 2008 were not traced back to the United States.” Nor does the Mexican government ask the ATF to trace all guns seized in Mexico. This is because many of those arms can be traced back to the Mexican government itself. 

After all, it’s not as if Latin America has no locally produced firearms. The Small Arms Survey notes: 

Latin America has a long tradition of gun production, with some manufacturers tracing their history back many decades. Brazil has the largest arms industry in the region, followed by Argentina. Firearms are also produced by private or government-owned industries in Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, and Venezuela. While most of the production is intended to equip the military and law enforcement institutions, some of the production is for private use. Research shows that, “[w]ith the important exceptions of major exporters led by Argentina, Chile, Mexico, and above all Brazil, [Latin America’s] small arms producers tend to be niche manufacturers, serving captive local markets.”

So Mexico contains local arms-producing manufacturers to the point that some are “major exporters” who also produce arms for government institutions. And government stockpiles are a source for black markets as well. 

Even worse, the same government institutions that work to keep firearms out of the hands of peaceful private citizens, are often in league with the cartels. As a recent New York Times article noted about local resistance to cartel-sown chaos, “Townspeople formed militias to eject both the cartel, which effectively controlled much of Michoacán, and the local police, who were seen as complicit.”

In other words, there is often no clear line between law enforcement and the cartels themselves. 

Often, official law enforcement simply can’t be bothered. Things are even worse when, as  one cartel member put it, “soldiers and cops are … really on our side.”

Thus, it shouldn’t exactly be a surprise that many of the guns seized in Mexico are coming from official government sources.

It requires quite a bit of creativity to then take these facts and twist them into a narrative which concludes “too many guns in Texas leads to more Mexican homicide.” If Texan guns are fueling homicide in neighboring jurisdictions, why aren’t US states close to Texas experiencing similar problems? 

New Mexico, after all, is next to Texas. But New Mexico’s homicide rate of 6.7 per 100,000 is a mere fraction of its neighbor to the south — Chihuahua state — where the homicide rate is over 40 per 100,000. 

Moreover, increases in gun totals over time in the United States have not shown increases in homicides. In fact, the opposite is true. According to statistics from the Bureau of Alcohol, Tobacco, and Firearms, new guns manufactured in the United States, since 2011, have been more than double what they were throughout most of the past thirty years. Total gun production rapidly increased from 2001 to 2013, yet, homicide rates were cut in half from the 1990s to today. Although homicide rates have trended up in the past two years, they remain near 50-year lows. 

 

Has Gun Control Helped Mexico?

It’s difficult to see how greater gun restrictions have helped Mexico. In practice, the restrictions discourage ownership by peaceful people while ensuring that cartels and official state agencies are the only armed groups. And both groups are often in league with each other. Ordinary people are then caught defenseless in the crossfire. 

Attempts at blaming Mexican violence on American guns ignores the fact that there are several times more guns in the US, but without the Mexico-like homicide rates. 

Indeed, some American border towns have low homicide rates, even by American standards. The homicide rate in El Paso, Texas, for example, was a very low 2.7 per 100,000 in 2016. Just across the Rio Grande, the city of Juarez is one of the murder capitals of the world. Moreover, 80 percent of El Paso residents are of Hispanic — primarily Mexican — origin, meaning we can’t even resort to a bigoted explanation about how Mexican ethnicity leads to more violence. 

So, why should it be outlandish to conclude that Mexican gun control might be an important factor? After all, on the southern side of the border, guns are reserved for cartels and often-corrupt police officials. Has this situation increased the quality of life of average Mexicans? It’s hard to see how. 

via Zero Hedge http://ift.tt/2BOFqgN Tyler Durden

Iran says it will withdraw from the 2015 nuclear deal if big banks continue to avoid doing business with the Islamic republic, deputy foreign minister Abbas Araghchi said on Thursday, speaking from London. 

The Islamic Republic agreed to restrict its nuclear program in exchange for the removal of crippling sanctions by the United States, Britain, China, France, Germany and Russia. 

Following the deal, however, major banks have continued to avoid doing business with Iran for fear of violating remaining U.S. sanctions – which Iran says has hampered their efforts to rebuild foreign trade and attract investment.

Most of it is because of this atmosphere of uncertainty which President Trump has created around JCPOA, which prevents all big companies and banks to work with Iran, it’s a fact, and it’s a violation lead by the United States. –Abbas Araghchi

Compounding Iran’s woes are comments from President Trump, who told Europeans on January 12 that they must “fix the terrible flaws of the Iran nuclear deal” or he would re-impose the sanctions lifted by the Obama administration as part of the pact. Trump set a May 12 deadline to review fresh “waivers” on U.S. sanctions. 

The May 12 deadline represents an opportunity for Trump to pull the U.S. out of another international deal. He has already abandoned the Paris climate accord and the Trans-Pacific Partnership, a 12-nation trade deal. He wants to renegotiate the North American Free Trade Agreement, a 24-year-old trade pact with Canada and Mexico. –USA Today

Trump sees three major defects in the deal; its failure to address Iran’s ballistic missile program, the terms by which inspectors are allowed to visit suspected Iranian nuclear enrichment sites, and “sunset” clauses on Iran’s nuclear program which expire after 10 years. 

Araghchi contends that Trump’s interpretation of the sunset clause is incorrect, and that Trump’s continued trash-talking is in violation of the deal itself;

“There is no sunset clause in the JCPOA. Although the U.S. administration and Trump are talking about sunset clause and that JCPOA is just for 10 years, that is not true,” he said.

You know, every time President Trump makes a public statement against JCPOA saying it’s a bad deal, it’s the worst deal ever, I am going to fix it, I am going to change it, all these statements, public statements are a violation of the deal. Violation of the letter of the deal, not a sprit, the letter. If you just see paragraph 28 it clearly says that all JCPOA participants should refrain from anything which undermines successful implementation of JCPOA, including in their public statements of silly officials.

The foreign minister said that if Iran does not receive the deal’s much touted economic benefits soon, it will likely pull out of the deal before the May 12 deadline. 

“If the same policy of confusion and uncertainties about the (deal) continues, if companies and banks are not working with Iran, we cannot remain in a deal that has no benefit for us,” Araqchi told an audience at the London-based think tank Chatham House. “That’s a fact.”

What of the nuclear program?

When asked what Iran would do if the nuclear deal is scuttled, Araghchi replied:

“Well if there is no deal anymore obviously there is no restrictions in our nuclear program anymore,” adding “Iran would still be a member of NPT (non-proliferation treaty) still committed to its obligations and still, you know, obliged not to go for nuclear weapons, this is our policy. And in that sense there is no sense of clause in the JCPOA, it’s like actually perception that Americans are spreading on others but this is absolutely wrong. Iran’s commitment not to ever seek or acquire or produce nuclear weapons is permanent.”

“I don’t think to add a new crisis over the non, over the proliferation of nuclear weapons would be beneficial for anybody, in the region and outside the region.”

 

via Zero Hedge http://ift.tt/2EPkYL3 Tyler Durden

Via Valuewalk.com,

Permitting a small percentage of school teachers with concealed carry weapon [CCW] permits to continue to carry concealed handguns and/or concealed non-lethal defensive sprays such as Mace, OC, CS, etc. at school might be worth at least trying out as a means of reducing school shooting tragedies, especially since other popular proposals may not be effective and/or garner enough support for adoption, suggests public interest law professor John Banzhaf, who offers some suggestions for effectuating such policies.

For example, he says, it should not be necessary for a large percentage of the teachers to participate, and especially not to require any who are not willing to assume the responsibility to do so, if the identity of the small percentage of teachers who regularly carry concealed weapons is kept secret.

If teachers carry weapons openly, or if students are allowed to know which teachers carry concealed weapons, any current or former student planning a shooting rampage might be able to target, work around, or neutralize (e.g., use a chain to lock them in a classrooms) those teachers known to be armed.

But if students are simply warned – with appropriate signs or otherwise – that some teachers carry concealed weapons, but are not sure which ones or how many there are, a potential shooter would face a significant risk of having his plans thwarted, and not be able to take any effective countermeasures.

Many proponents of arming teachers have suggested that the major impact of such plans would come from armed teachers actually stopping an attack which is already underway by shooting the offender. But, suggests Banzhaf, allowing a small unidentified minority of willing teachers to carry concealed weapons might provide sufficient deterrence that many shootings would be prevented, rather than simply ended more quickly once they begin.

Indeed, Banzhaf suggests that while many potential school shooters may be prepared die “heroically” at the hands of police, potential shooters may see little glory or honor in being shot down by old Mrs. Grundy who teaches 9th grade History, or by one of the other teachers.

To minimize risks to all concerned, teachers armed with concealed handgun probably should be required to use bullets – such as the Glaser round – which cannot ricochet, and which are very unlikely to penetrate walls. This will go a long way towards eliminating possible harm to innocent bystanders.

To provide even further safety, teachers probably should be required not only to pass whatever tests are required generally to obtain a CCW permit, but also whatever specialized training, review, and practice the school feels is necessary and appropriate to have a gun on school grounds, and to be prepared to use it responsible if there is an active shooter.

If there are a large number of teachers unable or unwilling to take on this added responsibility by carrying a concealed handgun – in a manner very similar to commercial airplane pilots whose primarily responsibility is flying an airplane, not protecting against terrorists – a school may wish to permit if not encourage some teachers to carry concealed defensive spray (Mace-like) products.

This alternative may well appeal to some who are opposed to the use of lethal force, would never want the awesome responsibility of taking a life (even of a shooter), are afraid that a gun could be taken from them and used to kill them or other innocents, or have similar concerns.

Defensive irritant sprays are generally regarded as non-lethal, and any person – including the teacher discharging the spray, or a nearby student who might be affected – will be at most briefly sickened, but will almost certainly survive without any lasting injuries.

While most would agree that even a small, light, and easily concealed handgun is many times more likely to stop a student shooter, a highly irritating chemical able to stop a grizzly and capable of being sprayed 20 or more feet is far more effective than attacking an armed shooter with chairs, backpacks, or even computer cables as some have suggested.

Another major advantage of defensive sprays over handguns is that they are much smaller, lighter, and easier to carry on a daily basis to one’s teaching position, thereby encouraging teachers to get into the habit of doing so. Even small handguns are heavier and are often harder to conceal, especially when wearing certain dresses or other form fitting clothing.

Banzhaf suggests that this proposal could provide a compromise that many sides in the current controversy might be willing to try. It is obviously less extreme than arming all or even most of the teachers, or having a significant number walking around with visible guns.

The latter would likely be distracting to most students, be seen as inappropriate and as sending the wrong message by many, and objectionable on many other grounds. But permitting those teachers who already have permits, and who therefore are likely to carry weapons at many other times, to do so also at school seems less offensive, and is almost certainly more effective than doing nothing and/or adopting some of the other proposed methods of deterring school shootings.

Stationing a armed guard at entrances to schools would be very expensive. Moreover, a determined student killer could then simply shoot the guard first, and then continue his murderous rampage secure in the knowledge that he will enjoy a gun-free target-rich environment.

While some other prophylactic proposals – e.g., further restrictions on gun sales, and/or improvements in the background-checking process – may yield a small amount of additional reduction in school shootings, the effect may be limited because at least some school shooters are able to acquire their weapons legally, and might well be able to do so even if some current proposals are adopted.

Moreover, the Supreme Court has ruled that the right to own and carry a firearm is entitled to some measure of constitutional protection so that – for example – trying to prevent 18-20 year old adults from purchasing firearms might face constitutional objections, and well as raise public policy concerns for some.

Likewise, says Banzhaf, simply trying to identify all teens who have a mental illness or defect which might become serious enough to lead them to shoot others might itself not be feasible, much less providing sufficient treatment, supervision, etc. to insure that it will not occur. After all, he notes, authorities cannot reliably identify teens who are members of criminal gangs which kill people, much less single out lonely teens who just might do so in the future.

Certainly, argues Banzhaf, no single prophylactic plan or proposal will be itself end the apparently-growing problem of school shootings, but it certainly makes sense to at least consider those which are in the nature of a compromise between major factions, and therefore have a chance of being adopted.

via Zero Hedge http://ift.tt/2GGcjLs Tyler Durden

A few months ago, we pointed out that Warren Buffett, the so-called “Oracle of Omaha” said during the 100-year anniversary celebration of Forbes magazine that the “Dow will be over a million” over the next 100 years and “that is not a ridiculous forecast”.

Of course, the second part of that statement was promptly ignored by the financial media, which churned out “shock and awe” headlines like “Warren Buffett Says The Dow Is Going Over One Million.”

Without context, this might appear to be an incredibly bullish call. But Dow one million 100 years from now would actually represent a deceleration in the Dow’s CAGR to 3.9% pre-tax, or closer to just 3% post-tax returns per year (assuming tax rates don’t trend toward 100% during the intervening period). A more optimistic prediction (at least based on past performance) would be for the Dow to hit 140,000,000 in 100 years.

Well, we received another update on Buffett’s long-term thinking on Friday when the Wall Street Journal reported that Berkshire Hathaway is holding more than $100 billion in cash or cash-equivalents – i.e. Treasury bills – on its balance sheet.

The company is doing this at great expense to shareholders (referring to the opportunity cost that comes with avoiding higher-yielding assets) and Buffett – who is expected to release his widely read annual shareholder letter this weekend – has vowed to find a better place to park this cash. Because of this conservatism, Berkshire is now one of the largest holders of Treasury debt.

However, Buffett has been promising to find a home for the cash for a few years now – which makes one wonder whether this is part of a deliberate strategy…

Berkshire has used its mounting cash pile to become one of the world’s largest owners of U.S. Treasury bills after struggling to find big companies to buy in recent years.

It held $109 billion in cash as of Sept. 30, up from $86 billion at the end of 2016 and more than double what it had at the end of 2006. Nearly all of that was invested in short-term bills, according to Mr. Buffett.

Berkshire has an outsize presence in the $2 trillion market for Treasury bills, a type of government debt that matures in a year or less. It held more bills around the end of the third quarter than large countries such as China and the U.K. It also had more at that time than the $13.5 billion held collectively by a group of 23 primary bond dealers that are obligated to underwrite U.S. government debt sales.

Berkshire’s holdings are big enough that when bond dealers need bills for a specific date, they will come to Berkshire and arrange a trade, Mr. Buffett said.

“We’re the ones they call. We’ve got the best inventory,” Mr. Buffett said in a 2017 interview with The Wall Street Journal. “That’s a new sideline for us here.”

…

“There’s no way I can come back here three years from now and tell you that we hold $150 billion or so in cash or more, and we think we’re doing something brilliant by doing it,” he said at Berkshire’s annual meeting last May. “I would say that history is on our side, but it would be more fun if the phone would ring.”

Berkshire’s cash holdings swelled by $3.3 billion last week when Phillips 66 bought back 35 million shares.

This massive inventory of T-Bills, which is a sizable portion of all outstanding short-dated debt, may be causing some of the recently noted distortions in the bond market, where short-term funding costs have risen rapidly in the form of the Libor-OIS spread, which has jumped to the highest level in over a year.

Buffett has famously resisted handing out dividends to investors – but has said Berkshire would begin buying back stock if shares ever fall below 120% of book value. Both classes of Berkshire stock were trading at 165% on Thursday. 

“He’s aware that [Berkshire’s cash] is not earning a high rate of return for shareholders,” said David Kass, a professor at the University of Maryland’s Robert H. Smith School of Business and a Berkshire shareholder. “Paying out a special cash dividend, a one-time dividend at the discretion of management, makes some sense.”

Berkshire earns revenue from holding and trading its Treasury bills, but the profit is minimal relative to its overall business operations. Berkshire’s head trader, Mark Millard, opted not to speak with WSJ.

WSJ also pointed out that other corporations with large cash piles prefer to hold higher-yielding assets like corporate bonds. But Buffett prefers to hold Treasury bills because they offer more liquidity during a downturn. Berkshire typically buys about $4 billion in Treasury bills every Monday at government auctions, or less than 4% of what the Treasury is selling, Mr. Buffett said on CNBC in January. He joked: “We’re very careful about how many we bid for.”

Buffett’s probity famously allowed Berkshire to throw a life line (and secure desperation deals that proved to be extremely lucrative over the following years) to Bank of America, Goldman Sachs and General Electric.

But with so much cash on hand, Buffett would have wide latitude to take advantage of the next downturn, potentially positioning Berkshire – which hasn’t bought a company since 2015 when it closed on Precision Castparts, its largest deal ever – to buy whatever’s on its wish list at a substantial discount.

Could this really be Buffett hinting that, though he feels compelled to maintain his optimistic rhetoric in public, he’s in reality bracing for the next crash?

via Zero Hedge http://ift.tt/2EMu5w7 Tyler Durden