Category: zerohedge

“That’s What I’m Worried About Most Right Now”: Steve “Big Short” Eisman Reveals The Next “Black Swan”

Verbal acrobatics about the redundancy of defining an event as a “black swan” (yes, yes, it is by definition impossible to predict the unpredictable, we get it) aside, yesterday Steve Eisman, the infamous star of “Big Short” subprime fame, said that while he is not worried about the American financial system saying it is sound and that there is little risk of a systemic crisis like the one he effectively bet against more than a decade ago, he revealed that his biggest fear right now are the Hong Kong protests, which he says could endanger any kind of trade deal with China and hurt the global economy.

And yes, he called them a black swan: “I think the potential black swan, if there is a black swan right now, is what’s happening in Hong Kong right now,” said Eisman on CNBC’s Power Lunch. “If things escalate even further in Hong Kong, that would have a real impact back on the global economy.”

He is right, of course, only whereas Black Swans are events that nobody can anticipate, and thus when they arrive they shock the world, the risk of an insurrection in Hong Kong – as well as its potentially dire consequences – has been obvious to anyone following what we previously dubbed “the potential epicenter for the next global crisis.”

Hundreds of thousands of protesters have taken to Hong Kong’s streets since early June, due to opposition to a now-suspended extradition law that would have allowed people in the city to be extradited to Mainland China. These protests demonstrate the large discontent the people have for the city’s government, which has become a proxy for mainland rule. Meanwhile, for Beijing the ongoing protests represent a sign of weakness: if China’s 1.4 billion citizens see Beijing expressing doubt or weakness over how to bring Hong Kong to heel, the risk is that similar violent middle class insurrections could follow anywhere else in China. This, as China watchers know, represents the biggest nightmare for Beijing’s top politicians.

And much to the chagrin of China, the Neuberger Berman managing director said the protests in Hong Kong “seem to be escalating.”

“The people who are protesting are not backing down, the Chinese government doesn’t seem to be backing down, so if cooler heads don’t prevail it’s possible things in Hong Kong could get very ugly.”

Of course, as we listed last night, China has many other headaches on its hands, including trade war, PPI deflation, soaring food inflation, a trade war with the US, and record high debt. Eisman said conflict in Hong Kong could further adversely impact the trade war between the U.S. and China and could ripple through the global markets.

“That’s actually what I’m worried about the most right now, because every weekend we’ve got this drama where the people of Hong Kong are having protests in the millions and its starting to get very violent,” said Eisman.

“That is not going to be a positive in terms of negotiating a trade deal between the United States and China, its not going to be a positive at all for the global markets,” said Eisman.

Beside losing sleep over Hong Kong, Eisman is famously short Canadian banks, and is currently betting again shares of Zillow.

His full CNBC interview below:

via ZeroHedge News https://ift.tt/2YEhjOo Tyler Durden

Blackout Strikes London As UK Power Grid “Experiences A Major Incident”

Update: Electricity providers confirm 90% of customers are now restored and we are working hard to restore the remaining customers as soon as possible.

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London and large parts of the south of England are suffering from a widespread ‘power cut’ described as “a major incident” by electricity providers.

Transport for London said the drop in power is affecting traffic lights, while many trains have been delayed.

The blackout struck as Brits commute home (or head to the pub)…

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S.Korea Weighing Military “Options” To Protect Its Shipping In Persian Gulf

South Korea is denying a Yonhap news agency report which said US Defense Secretary Mark Esper issued a formal request to South Korea to send troops to join a proposed US-led maritime force in the Strait of Hormuz to protect international tankers sailing near Iran, according to Bloomberg. Esper is said to have directly appealed to Defense Minister Jeong Kyeong-doo during a meeting in South Korea. 

Seoul is said to be considering “various options,” according to Reuters, since South Korean vessels frequent the strait. Despite Seoul officials now downplaying the story, a prior Reuters report detailed early this week: 

The Maekyung business newspaper, citing an unidentified senior government official, said South Korea had decided to send the anti-piracy Cheonghae unit operating in waters off Somalia, possibly along with helicopters.

…“It is obvious that we have to protect our ships passing through the Strait of Hormuz, isn’t it? So we’re considering various possibilities,” deputy ministry spokesman Ro Jae-cheon told a regular news briefing on Monday.

Illustrative file photo

The current mixed messaging coming out of Seoul, however, suggests plans could be stalled, possibly as official wait and see if the White House plans for a global force gets off the ground.

Meanwhile the only European country to enthusiastically jump on board the US administration’s joint patrol plan has been the United Kingdom, with Germany and France trying to distance themselves, even as they attempt to form a European-led maritime initiative. At the moment France, Japan, and India have said they are undecided. 

Earlier this week it was revealed that China also, to the surprise of many observers, is actually mulling a reported invitation to join the proposed US-led maritime coalition to protect oil shipping lanes in the Gulf following Iran’s military confirming it has seized three foreign tankers this summer.

“If there happens to be a very unsafe situation we will consider having our navy escort our commercial vessels,” the Chinese ambassador to the UAE Ni Jian told Reuters in Abu Dhabi. “We are studying the U.S. proposal on Gulf escort arrangements,” China’s embassy later confirmed. 

Again, it’s likely that authorities in Seoul are waiting to see if European countries join but also Beijing’s stance regarding an international coalition ensuring the safety of the vital gulf waterway, before actually deploying its own troops and naval assets.  

via ZeroHedge News https://ift.tt/2GYtHhr Tyler Durden

El-Erian Warns: Trade Disruption Is A Symptom (Not The Cause) Of A Deeper Malaise

Authored by Mohamed El-Erian via Project Syndicate,

It’s only a matter of time until the escalating tensions between China and the United States prompt many more economists to warn of an impending global economic recession coupled with financial instability. On August 5, Bloomberg News said that the yield curve, a closely watched market metric, “Blares Loudest US Recession Warning Since 2007.” And Larry Summers, a former US Treasury Secretary who was also closely involved in crisis-management efforts in 2008-09, recently tweetedthat “we may well be at the most dangerous financial moment … since 2009.”

Many economists argue that resolving US-China trade tensions is the best way to avoid significant global economic and financial disruption. Yet, while necessary, this would be far from sufficient.

Don’t get me wrong: the focus on the deteriorating relations between China and America is entirely understandable. After all, their worsening dispute increases the risk of a trade war which, coupled with a currency war, would lead to “beggar-thy-neighbor” (that is, lose-lose) outcomes cascading throughout the global economy. As growth prospects deteriorated, debt and leverage issues would come to the fore in certain countries, adding financial instability to an already damaging economic cocktail. And with the US-China row now extending beyond economics to include national-security and domestic political issues, the best-case scenario on trade is a series of ceasefires; the more likely outcome is escalating tensions.

Yet, when viewed in the broader context of the past decade, trade tensions turn out to be a symptom rather than a cause of the world’s underlying economic and financial malaise. In fact, an excessive focus on trade risks is deflecting policymakers’ attention from other measures needed to ensure faster and more inclusive growth in a genuinely stable financial environment.

Policymakers must also contend with growing political pressure on central banks, the backlash against the inequality trifecta (of income, wealth, and opportunity), the politics of anger, the growth of anti-establishment movements, the loss of trust in governments and expert opinion, regional economic and geopolitical tensions, the growing risk of financial instability, threats to long-term financial-protection products, and a general sense of economic insecurity.

As I argued in The Only Game in Town, all of these recent developments – and also, of course, the growing US-China tensions – are related in a meaningful way to two basic and persistent features of the global economy since the 2008 financial crisis.

The first is the prolonged period in which economic growth has been not only too low but also insufficiently inclusive. As a result, growing segments of the population have felt marginalized, alienated, and angry – leading to unexpected election outcomes, the rise of populist and nationalist movements, and, in a few cases, social unrest.

The second post-crisis feature is the persistent over-reliance on the pain-numbing but distortionary medicine of central-bank liquidity, rather than a more balanced policy mix that seeks to ease the (mainly structural, but also cyclical) impediments to faster, more inclusive growth. Monetary policy has not been very effective in boosting sustainable growth, but it has lifted asset prices significantly. This has further fueled complaints that the system favors the already-rich and privileged rather than serving the broader population – let alone helping more disadvantaged groups.

If both these features persist, the global economy will soon enough come to an uncomfortable binary prospect on the road ahead. At this “T-junction,” the current, increasingly unsustainable path will give way either to a much worse outcome involving recessions, financial instability, and rising political and social tensions, or, more optimistically, to a pick-up in inclusive growth and genuine financial stability as the governance system finally responds to popular pressure.

Moreover, the journey to the neck of this T-junction is itself increasingly uncertain. In particular, the protracted use of unconventional monetary policies has entailed costs and risks that have intensified over time. These include attacks on the operational autonomy of central banks, the excessive decoupling of asset prices from their underlying economic and corporate fundamentals, and systemic overpromising of liquidity to end users (particularly in the non-bank sector). Today, a policy mistake or a market accident could make the journey much faster and a lot bumpier.

To avoid a nasty outcome for the global economy and financial system, China and America need to resolve their differences in the context of a more comprehensive policy compact that also involves other leading economies (especially Europe).

Efforts to revitalize free but fairer trade should start by addressing genuine US and European grievances vis-à-vis China regarding intellectual-property theft, forced transfer of technology, excessive subsidization, and other unfair trade and investment practices. And this in turn should serve as the foundation for a comprehensive multilateral effort to remove constraints on actual and potential growth.

Such an initiative would include infrastructure rehabilitation and modernization in Europe and the US, more balanced fiscal policies in Europe and a stronger regional economic architecture, stronger social safety nets around the world, and targeted liberalization and deregulation in China and Europe.

With concerted global action of this type, the world economy could navigate the upcoming T-junction favorably. Without it, current complaints about economic and financial instability and insecurity could pale in comparison to what comes next.

*  *  *

Of course, while El-Erian is right on the cause – years of central-planner-driven malinvestment – his “globalist” solution should come as no surprise to anyone… if only everyone could just get along, open more borders, and resign all sovereignty to a global government to take care of us all.

via ZeroHedge News https://ift.tt/2YUJ6p1 Tyler Durden

Farm Crisis Spreads As US Corn Exports Plunge To 19-Month Low 

American farmers have just lost their fourth-largest customer as China pulls out of buying US agriculture products this week. It’s a devastating blow in an environment of poor weather conditions across the Central and Midwest US and collapsing commodity spot prices, could trigger farm crisis 2.0.

“Sales have already been lower this crop year because of the existing tariffs. If we went all the way to no China exports whatsoever, that would, of course, result in an even larger market and price impacts,” Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri, told CNBC. “Cutting China completely out of the market would be a very big deal.”

Even before China officially said it would stop buying US agricultural products, the US Department of Agriculture’s (USDA) weekly export sales data shows US corn exports plunged to a 19-month low in June and could be depressed even further in July as elevated spot prices and increased foreign competition continued to weaken exports, reported Reuters.

Corn shipments in the first ten months of the 2018-19 year that started Sept. 1 totaled 46.6 million tons, down 5% from a year earlier, and June was the first month in the 2018-19 year corn exports fell below prior-year levels.

USDA’s weekly data showed the US had 6.7 million tons of corn to export during the last two months of the year to meet the full-year forecast of 53.3 million tons.

As of July 25, USDA’s weekly export sales data showed unshipped 2018-19 corn at 3.89 million tons, the smallest volume for the date in at least five years. Monday morning’s inspections data put US corn shipments at 631,289 tons in the week ended Aug. 1.

Total US corn commitments for 2018-19 reached 49.9 million tons as of July 25.

With US corn exports sliding lower, South American shipments have surged to meet demand. No. 2 exporter Brazil shipped 6.3 million tons in July, setting a new record for total exports of any month.

USDA estimates, Brazil, Argentina, and Ukraine, will export a combined 99.5 million tons in the 2018-19 year, a 52% increase versus the prior year.

Former Iowa Lt. Gov. Patty Judge said the loss of a trading partner like China sets up a “dangerous situation.”

“There are going to be some serious repercussions for farmers,” Judge said.

Those repercussions have already been seen as China avoids US farmers to source agriculture products from South America.

via ZeroHedge News https://ift.tt/2yNljNh Tyler Durden

Is It Time For A National Knife Ban?

Authored (satirically) by Leesa Donner via LibertyNation.com,

It’s time for some “common sense” knife-reform…

In downtown Pittsburgh two women were stabbed. One died and the other is in stable condition at last report. Over on the other side of the country, a 33-year-old Hispanic man in Santa Ana, CA, went on a two-hour stabbing spree. Four people are dead and two wounded. Back on the East Coast, with horrified patrons as a backdrop, a man walked into a nail salon in Queens, NY and plunged a knife into his wife’s back over and over until she lay dead on the floor. All this in just a couple of days in America.

Time For Knife-Control

It’s obvious the time has come for a national knife control bill. Since we must legislate all weapons based on their usage, it is vital that at the very least we begin background checks on those who want to purchase knives. The suspect in California, after all, had a criminal record.

Progressive retailers across America sprang into action. Within hours of the nationwide epidemic of stabbings, Williams-Sonoma, Sur La Table, Bed, Bath & Beyond, and the kitchen departments in Macy’s, Kohl’s, and Target began removing kitchen knives from the shelves.

Executives from Walmart HQ said they are seriously considering taking similar action.

Meanwhile on Capitol Hill – and flanked by fellow members of the Democratic Party – Speaker Nancy Pelosi (D-CA) held a press conference calling for a national ban on knives. “If it means eating our watermelon whole and cutting our meat with plastic, then Democrats plan to lead the way to a more safe and secure America.” After Pelosi spoke, she graciously yielded the microphone to Rep. Alexandria Ocasio-Cortez (D-NY). “I am proud to be the one who stopped J.A. Henckels from relocating to New York City. No amount of jobs is worth trading for American lives,” she said.

On the campaign trail, Rep. Joaquin Castro (D-TX) said he plans to publish the names of every national knife manufacturer CEO who does not take immediate action to restrict knife sales. Castro then took to Twitter, saying, “People need to know who is willing to sell knives and who is not. It’s a matter of national safety. Anyone selling knives without thorough background checks should be shamed for putting profits above lives. As such, I am calling for people all over this great nation of ours to rise, boycott and protest #walmart, @dickssportinggoods and #acehardware.”

Not to be outdone, Sen. Elizabeth Warren (D-MA) pointed out that the Cherokee Nation stopped using knives generations ago and that she plans to donate to the National Indigenous Women’s Resource Center to honor the fallen. Then, while at a campaign stop at Chipotle in Iowa, Sen. Cory Booker (D-NJ) said, “Under my watch, New Jersey was the first state in the union to call for rigorous blade background checks.”

On the South Lawn of the White House, the press corps gathered to get a reaction regarding the stabbing frenzy from the president. CNN’s Jim Acosta could be heard shouting over the whirring blades of Marine One, “Mr. President, in light of the recent spate of stabbings, do you support a national knife ban?” President Trump responded, “Knives? I have always liked knives, especially when I’m eating steak.”

This comment set off a firestorm from the Fourth Estate, with The New York Times out in front of the pack. Just before deadline for their failing print edition, editors put up a front-page article entitled “Trump Says Steak Comes First – American Lives Second.”

This caused the Portland, OR, ANTIFA Chapter to don their masks and take to the streets, where police stood by as concrete milkshakes were thrown at the CEO of Cuisinart, owner of the Knife Center based in Oregon. A shaken Steel M. Blade was taken to the hospital following the melee. He is reported in stable condition.

Meanwhile, in Fairfax, VA, at the headquarters of the National Knife Association, angry protesters swarmed the building. Fairfax County police were called to the scene to put those inside the NKA on lock-down until they could clear the area.

Do Americans have a right to own knives? Should extensive background checks regarding the criminal records and mental health of potential knife buyers become law? These are the crucial questions flooding the airwaves of the nation. Ultimately, it comes down to whether Americans are willing to rip meat from the bone with their bare hands or be permitted to cut it in with a knife in a civil way.

Only time will tell.

via ZeroHedge News https://ift.tt/2MRxRLO Tyler Durden

Joe Biden’s Latest Gaffe: “Poor Kids Are Just As Bright & Talented As White Kids”

Since announcing his campaign earlier this year, Joe Biden has been plagued by a seemingly unceasing parade of gaffes, from his embarrassing debate sign-off, to his praise of segregationist senators to his unwillingness to change his ‘tactile’ behavior despite all of the backlash he has acrued in the #MeToo era.

To that list, we can add Biden’s latest masterpiece: During a speech to minority voters in Iowa, the former vice president said that in Iowa “poor kids” are just as bright as “white kids”.

Here’s the money quote:

“We should challenge students in these schools that have advanced placement programs in these schools,” Biden said. “We have this notion that somehow if you’re poor, you cannot do it. Poor kids are just as bright and just as talented as white kids.”

After a brief pause, he added: “Wealthy kids, black kids, Asian kids, no I really mean it, but think how we think about it.”

Trump quickly posted a clip of the incident on his ‘Trump War Room Twitter Account”

Meanwhile other remark from his past are coming to light, including when Biden said in 2008 that Obama was “the first mainstream African American who is articulate and bright and clean and nice-looking guy.”

This isn’t the only embarrassing Biden gaffe this week. He once again referred to former Prime Minister Theresa May as Margarete Thatcher.

We’re sure there will be plenty more where that came from…

via ZeroHedge News https://ift.tt/2YCORwg Tyler Durden

6th-Grader Dragged Out Of Class For Saying Gender-Confused Boy “Is A Boy”

Authored Greg Piper via The College Fix,

“Temporary removal” is not discipline?

The school district claims he wasn’t punished. But it dragged him out of class for the day and warned him not to correctly identify the biological sex of a classmate again.

Liberty Counsel said an Ohio school district backed down after the religious liberty law firm warned that it could not punish a sixth grader for disagreeing with classmates who said a boy with gender dysphoria was actually a girl.

According to the narrative by Liberty Counsel in a press release and subsequent fundraising pitch, the school uniformly referred to the gender-confused male (“Boy A”) as a girl and used female pronouns for him.

In a redacted letter to the school district, Liberty Counsel said Boy A had started publicly identifying as a female this spring. It became “heavily discussed at the school, particularly by a group of girls” in John’s classes who quickly started treating Boy A as a girl and frequently discussing his “transition” with him in art class.

John is also in that class, and considers Boy A a friend. He was “subjected to conversations about these issues constantly, on at least a weekly or semi-weekly basis,” because the girls and Boy A sat directly behind him.

On May 13 the girls claimed that “taking girl hormones” and eventually getting his “male private parts removed” would turn Boy A into a girl. John “disagreed as a factual matter” and said he was “not a girl.” Another boy agreed that sex is “what you’re born with,” and cannot be changed by hormones and surgery, and a third boy “may have said something to a similar effect,” according to Liberty Counsel.

Their art teacher overheard the conversation and reported John and the boys to the assistant principal, falsely claiming they were “bullying” Boy A and that the third boy called him a “homosexual.”

‘There might be consequences’ for correctly identifying sex

The assistant principal, who is not named, called John into her office the next day and warned him “there might be consequences” because he called Boy A a boy and used male pronouns. She pulled him out of his physical education class that afternoon “in front of his friends” and apparently warned him again that he’ll be punished if he refuses to refer to Boy A as a girl.

According to Liberty Counsel, John learned “the other boys received in-school suspension” that day for their participation in the conversation, and out-of-school suspension the following day.

The assistant principal called John’s mother that day and said he was “only” suspended from gym class because though he misgendered Boy A, she didn’t believe that John was participating in the “bullying.”

Liberty Counsel told the school district it was not legally allowed to “silence students who respectfully disagree” with their classmates that “castration is a good thing” for Boy A. It can’t force John to “encourage” Boy A in his gender identity, because that could play a role in the gender-confused student taking “harmful cross-sex hormones” and seeking “non-medically necessary” surgery.

Citing the Supreme Court’s Tinker ruling, which bans schools from suppressing the peacefully expressed beliefs of students, Liberty Counsel told the school district it was singling out John for participating “in conversation during school time where students may talk” about “otherwise permissible subjects of discussion.”

It emphasized that John was “repeatedly subjected” to these conversations in art class, with the teacher apparently allowing students to affirm Boy A’s gender identity but not disagree with it.

‘Enclaves of totalitarianism’ that ignore science

To punish John is to “turn classrooms into enclaves of totalitarianism” that censor the “commonly-held, mainstream, factual view” that sex is biologically determined. Liberty Counsel cited “more than 6,500 unique differences at the DNA level” between the sexes that do not change based on hormones or surgery.

Not only did the school district botch its own anti-harassment policy, but it’s violating a “student rights” policy that protects the constitutional rights of students to express themselves “as appropriate for the school environment.” Since informal transgender discussion has already been approved in the classroom, the school district can’t censor one view, the letter said.

Liberty Counsel threatened to sue if the school district did not expunge John’s record for the incident. It also must promise not to punish or coerce students for “respectful disagreement” with transgender ideology and using sex pronouns correctly, the letter said.

In a response letter, the school district’s law firm denied that John had been formally disciplined, saying his “temporary removal” from class was not recorded. It said the Board of Education does not punish students for “respectful disagreement on any topic.”

It’s a little more complicated on the pronoun issue:

The Board of Education does not discipline students for using certain pronouns in referring to students or coerce any student to use a particular pronoun. Staff may inform students that a particular student prefers to be referred to as a particular pronoun. However, that would only occur with consent of the student and his or her parents, but no student would be required to use the preferred pronoun.

According to Liberty Counsel’s release, John’s parents were satisfied with the assurances from the school district.

The unnamed school district is apparently Cincinnati Public Schools, based on the dateline in Liberty Counsel’s original press release. The College Fix has contacted media relations for the school district to verify.

Read the release, fundraising pitch, warning letter and response letter.

h/t Christian Broadcasting Network

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Epstein Documents Hit; Accuser Says Trump ‘Didn’t Partake In Any Sex With Any Of Us’

The US Court of Appeals for the Second Circuit has ordered the partial release of what is expected to be approximately 2,000 pages of documents related to convicted pedophile sex offender Jeffrey Epstein. 

The document release stems from a 2015 defamation lawsuit in New York brought by Epstein accuser Virginia Roberts Giuffre against Epstein’s ‘Madam’ – Ghislaine Maxwell. Giuffre says Maxwell helped Epstein traffic herself and other underage girls to sex parties at the billionaire pedophile’s many residences. 

The case was settled in 2017 and the records were sealed – leading to an appeal by filmmaker and author Mike Cernovich, who was later joined by the Miami Herald and several other parties including lawyer Alan Dershowitz – who has sought to clear his name in connection with Epstein’s activities. 

Trump and Epstein

While Epstein’s ties to former President Bill Clinton and other famous figures are well known, much has been made about the relationship between President Trump and the pedophile financier. 

Upon being questioned over the accuracy of a 2011 article by journalist Sharon Churcher claiming that Donald Trump was a “good friend of Jeffrey’s,” Guiffre was asked to clarify Churcher’s possible misquoting that “Donald Trump was also a good friend of Jeffrey’s,” and that Trump “Didn’t partake in any” of — “any sex with any of us but he flirted with me.” 

“It’s true that he didn’t partake in any sex with us, and but it’s not true that he flirted with me. Donald Trump never flirted with me.” 

Other notable snippets: 

Developing… 

via ZeroHedge News https://ift.tt/2MKHvzI Tyler Durden