Is Twitter Hiding A Screenshot Of Its Trend And Search Blacklist Tools?

Is Twitter Hiding A Screenshot Of Its Trend And Search Blacklist Tools?

Tyler Durden

Wed, 07/15/2020 – 22:29

By now, you probably already know about the massive Twitter hack that has taken place this evening where, in summary, the following has taken place:

  • A massive hack which allegedly has originated at a Twitter employee with access to the user management panel was, has affected hundreds of billionaires and politicians, including Barack Obama, Joe Biden, Bill Gates, Kanye West, Elon Musk, Wiz Khalifa, Apple, Uber, Jeff Bezos, Benjamin Netanyahu

  • Tweets urged people to send money to a Bitcoin address; over $113,000 has been sent so far

  • Twitter has investigated and appears to have resolved most of the issue after taking down the offending Tweets and restoring access to the site for those with blue checkmarks, all of whom were previously shut down from the site

For the full details on the hack, you can read our report on it here.

But now, an even more sinister subplot is emerging from the ruins of Twitter’s reputation.

Sources that are “close to or inside” the underground hacking community have leaked a screenshot of what is allegedly an internal software panel used by Twitter to interact with user accounts, according to a late Wednesday night report from Vice

The tool is said to be used to help change ownership of popular accounts and, in the case of the hack, was said to play a role in usurping the high profile accounts involved. Here is a photo of the panel, with portions redacted by the leaker of the photo to Motherboard. 

Source: Vice

The interesting thing is that screenshots of the supposed internal software are being aggressively pursued and deleted from Twitter by Twitter itself, with the company claiming that they violate the platform’s rules. In addition to being posted to Motherboard and Twitter, a similar image also appeared on a now deleted Tweet controlled by “Under the Breach”. They have since said their account has been suspended for 12 hours as a result of them posting it.

Of particular interest are the buttons labeled “SEARCH BLACKLIST” and “TRENDS BLACKLIST”. Could these be tools actively used by Twitter to censor what Tweets and topics appear during searches and on its trends page?

In other words, could this be the holy grail that all those who have accused Twitter over the years of shadowbanning conservative accounts, have been looking for?

“As per our rules, we’re taking action on any private, personal information shared in Tweets,” Twitter told Motherboard in response to inquiries about the screenshot, and its deletion or suspension of any account that posted it.

While we cannot confirm independently that the screenshot is, in fact, from Twitter’s development/moderator tools, it certainly would open up a whole new can of worms regarding the hack if it turns out to be.

For example, back in 2018, when Jack Dorsey took the Hill in Washington, D.C. to address the notion that Twitter could be disproportionately shadowbanning conservative voices on its site, Dorsey claimed that Twitter “believed strongly in being impartial”, according to Vox:

Pressed again and again to admit to Twitter showing some type of bias, either systemic or personal, Dorsey consistently demurred. At one point, he sidestepped giving information, when challenged, about whether his own personal political leanings are liberal; at another, he refused to concede that President Trump’s Twitter account might be in violation of Twitter’s general content policies. “We believe strongly in being impartial,” Dorsey said, “and we strive to enforce our rules impartially.”

He also told Congress that Twitter’s algorithms did not have a liberal bias:

In response, Dorsey repeatedly explained that the algorithm had no inherent political bias and was simply sorting Twitter content on the basis of numerous behavior signals from the accounts it was reviewing.

Perhaps the algorithms don’t – but maybe those manually using this alleged interface do?

Regardless, once people are done asking how this unprecedented hack could have happened in the first place, we wouldn’t be surprised if attention turns to how these moderation tools, if they truly exist, are being implemented.

via ZeroHedge News https://ift.tt/32med25 Tyler Durden

China’s Economy Returns To Growth In Q2 But Retail Sales Continue To Contract

China’s Economy Returns To Growth In Q2 But Retail Sales Continue To Contract

Tyler Durden

Wed, 07/15/2020 – 22:08

Judging by the Chinese stock market, Chinese credit impulse data, and Chinese PMIs, tonight’s GDP data should be a big winning rebound proving the communist nation has overcome the viral enemy and is back on its path to global economic domination.

Source: Bloomberg

The “v-shaped” recovery in all the PMIs is rather impressively well managed…

Source: Bloomberg

And Total Social Financing is soaring at a record pace…

Source: Bloomberg

And while trade data rebounded surprisingly in June (as it stepped up efforts to meet the terms of the U.S. trade deal), it remains well down from 2019 in the first six months of 2020, but rebounds are expected to continue to accelerate in all the other macro data released tonight, though most are still expected to be notably lower YoY.

Going into the data, the upturn in industrial production is the clearest sign that the Chinese economy expanded in 2Q after cratering in 1Q due to the COVID-19 impact, said Bloomberg Economics’ Chang Shu.

“Even so, weakness in private and external demand means the pace of growth is likely to be well below historical levels.”

“Even so, the revival in consumption probably remains a long way off, given changes in behavior to the detriment of contact-intensive services, as well as stress in the labor market and dented incomes.”

So here’s the data:

  • Q2 China GDP YoY BEAT +3.2% vs +2.4% exp and -6.8% in Q1

A much stronger than expected rebound (up a record 11.5% QoQ)…

  • June China Industrial Production YTD YoY BEAT -1.3% vs -1.5% exp and -2.8% in May

  • June China Retail Sales YTD YoY MISS -11.4% vs -11.2% exp and -13.5% in May

  • June China Fixed Asset Investment YTD YoY BEAT -3.1% vs -3.3% exp and -6.3% in May

  • June China Property Investment YTD YoY BEAT +1.9% vs +1.0% exp and -0.3% in May

  • June China Surveyed Jobless Rate BEAT 5.7% vs 5.9% exp and 5.9% in May

So, the good news is that GDP rebounded faster than expected, but the bad news is retail sales continued to contract YoY(-1.8% in June against expectations of a 0.5% expansion)…

The biggest disappointment was a contraction in large enterprise retail sales (-0.4% YoY in June vs +1.3% YoY in May) as the rebound stalls.

As Bloomberg’s Jeff Black points out, that tells us the recovery is still industry-led, and consumer confidence is still very fragile. That means China’s recovery will be harder to sustain if the world increasingly goes back into lockdown.

Offshore Yuan is back at 4-month highs…

Bloomberg’s Enda Curran notes that one big question remains, is it a rebound or a recovery.

Sceptics will argue that China’s GDP number will overstate the recovery while others say it reflects the rebound seen in underlying indicators on manufacturing, investment and consumption. But all sides will agree that even if GDP turned positive last quarter, it’s still a long way from a full recovery. We know China’s jobs market is under pressure and we know that the rest of the world remains in a funk. Both of which are clear brakes on China getting back to where it was before the crisis.

And for those who see tonight’s data and brush it off as implying the next stimulus move is imminent by Chinese officials, Shang-Jin Wei, a China expert at Columbia Business School in New York and formerly chief economist of the Asian Development Bank, warns:

“Prevention of a return or the ‘second wave’ of the virus outbreak is more important than getting a high growth rate for the remainder of the year.”

Additionally, with virus second-wave fears and the Trump administration back in sanction mode and seemingly less inclined to support Phase 1 of the trade deal, let alone Phase 2, perhaps the biggest “V” is now behind China; and none of the China growth is helped by an increasing number of runs of China’s banks.

And as Bloomberg’s David Ingles notes succinctly, most of the things you’ve seen in the news and will continue to see in the decades to come can be traced back to this one, single chart…

This won’t end well.

via ZeroHedge News https://ift.tt/32pUuhY Tyler Durden

The COVID-19 Panic Shows Us Why Science Needs Skeptics

The COVID-19 Panic Shows Us Why Science Needs Skeptics

Tyler Durden

Wed, 07/15/2020 – 21:50

Authored by Peter St.Onge via The Mises Institute,

The dumpster fire of COVID predictions has shown exactly why it’s important to sustain and nurture skeptics, lest we blunder into scientific monoculture and groupthink. And yet the explosion of “cancel culture” intolerance of any opinion that doesn’t fit a shrinking “3 x 5 card” of right-think risks destroying the very tolerance and science that sustains our civilization.

Since World War II, America has suffered two respiratory pandemics comparable to COVID-19: the 1958 “Asian flu,” then the 1969 “Hong Kong flu.” In neither case did we shut down the economy—people were simply more careful. Not all that careful, of course—Jimi Hendrix was playing at Woodstock in the middle of the 1969 pandemic, and social distancing wasn’t really a thing in the “Summer of Love.”

And yet COVID-19 was very different thanks to a single “buggy mess” of a computer prediction from one Neil Ferguson, a British epidemiologist given to hysterical overestimates of deaths, from mad cow to bird flu to H1N1.

For COVID-19, Ferguson predicted 3 million deaths in America unless we basically shut down the economy. Panicked policymakers took his prediction as gospel, dressed as it was in the cloak of science.

Now, long after governments plunged half the world into a Great Depression, those panicked revisions are being quietly revised down by an order of magnitude, now suggesting a final tally comparable to 1958 and 1969.

COVID-19 would have been a deadly pandemic with or without Ferguson’s fantasies, but had we known the true scale and parameters of the threat we might have chosen better tailored means to both safeguard the elderly and at-risk, while sustaining the wider economy. After all, economists have long known that mass unemployment and widespread bankruptcies carry enormous health consequences that are very real to the victims suffering drained life savings, ruined businesses, broken families, widespread mental and physical health deterioration, even suicide. Decisions involve tradeoffs.

COVID-19 has illustrated the importance of free and robust inquiry. After all, panicked politicians facing media accusations of “killing grandma” aren’t in a very good position to evaluate these tradeoffs, and they need intellectual ammunition. Not only to show them which path is best, but to bolster them when a left-wing media establishment attacks.

Moreover, voters need this ammunition so they can actually tell the politicians what to do. This means two things: debate that is transparent, and debate that is tolerant of skeptics.

Transparency means data and computer code open to public scrutiny as the minimum requirement for any study that is used to justify policy, from lockdowns to carbon taxes to whatever comes next. These studies must be based on verifiable facts, code that does what it says it does, and the ensuing decision-making process must be transparent and open to the public.

One former Indian bureaucrat put it well:

“Emergency situations like this pandemic should require a far higher—and not lower—level of scrutiny,” since policy choices have such tremendous impact.

“This suggests a need for democracies to strengthen their critical thinking capacity by creating an independent ‘Black Hat’ institution whose purpose would be to question any technical foundations of government decisions.”

Even more important than transparency, debate must be tolerant of alternative opinions. This means ideas that are wrong, offensive, even dangerous, have to be tolerated, even celebrated. By all means, refute them—most alternative hypotheses are completely wrong, so it shouldn’t be hard to simply refute them without censorship. This, after all, is the essence of science—to generate hypotheses testable by anybody, not just licensed “experts.”

Whether we are faced with a new crisis, a new policy innovation, or simply designing a better mousetrap, groupthink and censorship are recipes for disaster and stagnation, while transparency and tolerance of new ideas are the very essence of progress. Indeed, it is largely this scientific tolerance that allowed us to rise up from the long, brutal darkness of poverty.

As Francis Bacon observed three hundred years ago, innovation and new knowledge do not come from prestigious “learned” insiders, rather progress comes from the questioner, the tinkerer, the skeptic.

The industry of artificers maketh some small improvement of things invented; and chance sometimes in experimenting maketh us to stumble upon somewhat which is new; but all the disputation of the learned never brought to light one effect of nature before unknown. (In Praise of Knowledge, vol. 1, [1740] 1850)

Indeed, every major scientific advance challenged the “settled science” of its day, and was often denounced as pernicious and false, even dangerous. The modern blood transfusion, for example, was developed in the late 1600s, then banned for nearly a century by a hostile medical establishment, “canceling” tens of millions of lives at the altar of groupthink and hostility to skeptics.

It’s comforting to know that our problems are old ones, and also encouraging that our solution is both time-tested and simple: transparency and tolerance. After all, the very reason our culture elevates science is because it is built on a millennia-long evolutionary “battle of ideas” in which theories are constantly tested and retested in a delightfully endless search for ever better understanding.

This implies there is no such thing as “settled science”—the phrase itself is contrary to the scientific method. In reality, science is not some billion-dollar gleaming palace in Bethesda, rather it’s a gnarled mutant sewer rat that takes all comers because it’s been burned, cut, run over, crushed, run through the wood chipper, and survived. That ugly beast is our salvation, not the gleaming palace where we bow down to whichever random guy has the biggest degree in the room.

Only with free inquiry for the most unpopular, offensive, dangerous, and, yes, wrong ideas imaginable does that power sustain. And if we break that, we can expect a series of rapid catastrophes that, like failed golden ages of the past, return us to the nasty, brutish, and very short lives that have been humanity’s norm.

Whether pandemic, climate change, “institutional racism,” or whatever new crisis they conjure next, we have a fundamental right to tenaciously defend the transparency and tolerance that constitutes science itself so that it remains among humanity’s crowning achievements, and so that we preserve this golden age that would astound our ancestors.

via ZeroHedge News https://ift.tt/2Wm1vfO Tyler Durden

33-Year-Old Tech CEO’s Decapitated, Dismembered Remains Found In NYC Apartment Near Electric Saw

33-Year-Old Tech CEO’s Decapitated, Dismembered Remains Found In NYC Apartment Near Electric Saw

Tyler Durden

Wed, 07/15/2020 – 21:30

The decapitated and dismembered remains of 33-year-old tech CEO Fahim Saleh were found in his Manhattan apartment on Tuesday, according to ABC News (via MSN).

Saleh, co-founder of Bangladeshi ride-share app Pathao – and until this week CEO of Nigerian motorcycle ride-sharing company Gokada – was last seen entering his apartment elevator around 1:40 p.m. followed by a man wearing a suit, gloves, hat and mask, who was carrying a briefcase.

The elevator can be seen arriving on the 7th floor, after which Saleh’s body can be seen falling onto the floor – apparently after being attacked.

Saleh’s body was found Tuesday afternoon by his sister who was concerned after she had not heard from him for a day. She can be seen in surveillance footage entering the building, but the suspected killer is not seen leaving, leading law enforcement to believe she may have interrupted the act of dismembering, police sources said. There is a second way out of the apartment, through a service entrance, according to the sources. -ABC News

Saleh’s head and limbs were detached from his torso and found in several large bags nearby, while investigators also recovered an electric saw which was still plugged into an electrical outlet according to law enforcement sources.

The hitman did not kill Saleh’s dog.

“Fahim is more than what you are reading. He is so much more. His brilliant and innovative mind took everyone who was a part of his world on a journey and he made sure never to leave anyone behind. Fahim found success at an early age and built on it year after year, while remaining grounded and committed to helping others,” wrote Saleh’s family in a statement. “No matter what he did, he did it while thinking of the greater good and his family.”

“His parents and his sisters were his light and he was theirs. There are no words or actions to provide any of us comfort except the capture of the person who exhibited nothing short of evil upon our loved one.”

Gokada confirmed the “sudden and tragic loss” of its founder and CEO via Twitter, calling him “a great leader, inspiration and positive light for all of us.”

“Our hearts go out to his friends, family and all those feeling the pain and heartbreak we are currently experiencing, here at Gokada,” the company said. “Fahim’s vision and belief in us will be with us forever, and we will miss him dearly. Thank you for understanding as we get through this.”

In a second statement on its official Instagram Wednesday afternoon, Gokada said it was “shocked and saddened” by the “tragic circumstances” surrounding Saleh’s death. -ABC News

“Fahim’s passion for Nigeria and its youth was immeasurable. He believed young Nigerians are extremely bright and talented individuals who would flourish if just given the right opportunity. Fahim also believed that technology can transform lives and improve safety and efficiency. He built Gokada to act upon these beliefs,” reads the statement from Gokada. 

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Chinese Military Exercises Threaten To Invade Taiwan

Chinese Military Exercises Threaten To Invade Taiwan

Tyler Durden

Wed, 07/15/2020 – 21:10

Authored by Lawrence Franklin via The Gatestone Institute,

China’s People’s Liberation Army (PLA) is currently staging a military exercise across from the Taiwan Strait that looks as if it plans to culminate in an amphibious assault on an island in the South China Sea. Taiwan’s military — evidently fearing, with good reason, that the exercise may be a cover for an actual Chinese plan to seize another island in the region, Pratas (Dongsha), claimed by both the People’s Republic of China (PRC) and Taiwan — has declared a state of emergency. The PLA exercise also looks as if it is preparing China’s air, naval and marine assets required for an invasion of Taiwan.

In 1996, China initiated a similar crisis in the Taiwan Strait by staging an amphibious assault military exercise. After President Bill Clinton deployed two powerful US aircraft carrier-led battle groups, China discontinued its aggressive posture toward Taiwan. Strategic analysts judged that the Chinese decision was the fruit of a realistic assessment that it could not overcome the US ability to defend Taiwan.

The Chinese Communist Party (CCP), under current Chairman Xi Jinping, appears to be threatening war in a renewed effort to bring Taiwan under Communist Chinese control. The CCP considers Taiwan to be a Chinese province, an integral part of the mainland that ultimately must rejoin it, and the only remaining part of China yet to be returned after the Communists defeated the Nationalists in 1949. For China, it is unfinished business from 70 years ago. China has isolated Taiwan by requiring that all countries who want to have normal diplomatic ties with China must have no state-to-state links with Taiwan. Although the US consents to this diplomatic requirement, it also continues to provide Taiwan with weapon systems, enabling the island to defend itself against any Chinese invasion. US President Donald J. Trump recently authorized the latest sale of US weapons — including advanced heavy torpedoes — to Taiwan. Trump, earlier in his tenure, also approved the sale of anti-aircraft Stinger missiles, Abrams tanks, and F-16 fighter jets.

Many foreign specialists on China seem to discount the possibility that the Chinese are willing to risk war with the West to subdue Taiwan. Serious consideration should nevertheless be given to the Chinese Communist Party’s (CCP) determination to incorporate the “secessionist” province despite the danger of a conflict, especially if China considers the US distracted by the fallout of the Wuhan coronavirus that China unleashed on the world, and American voter squeamishness before a presidential election in four months.

The CCP views Taiwan as an existential threat to continued Communist rule in China. Taiwan’s vibrant democracy is the alternate model to the CCP’s totalitarian rule. Despite China’s efforts to cut Taiwan off from the world, the country remains an economically successful and politically free society, less than 90 miles from the Chinese coast.

Millions of mainland Chinese have visited Taiwan, a practice which could stimulate pressure by Chinese citizens on the Communist regime for liberalizing political reforms. If China assesses that its growing military power could quickly reduce Taiwan’s ability to defend itself or that the West has lost the will to defend the island, CCP Chairman Xi might direct the PLA to launch an invasion.

China also doubtless took stock of the free world’s obliging passivity the past few weeks as Beijing seized Hong Kong. Not one country lifted a finger to stop them. The move was in explicit violation of China’s 1997 Joint Declaration with the United Kingdom to maintain “one country, two systems” until 2047.

Presently, China seems to be assessing the West’s resolve to defend Taiwan, while simultaneously attempting to instill fear in the administration of Taiwan’s President Tsai Ing-wen. China initiated this latest aggressive posture toward Taiwan shortly after President Tsai’s May 2016 election, possibly anticipating that Taiwan could declare formal independence from China. In recent months, the PLA’s deployment of air and naval assets near Taiwan have been violating the island’s airspace and territorial waters. China’s aggressive moves have included its deployment of Air Force H-6 bombers and SU-30 and J-11 fighter jets. China’s ongoing 79-day military exercise (May 14 – July 31) opposite Taiwan is being orchestrated by the PLA’s Southern Theater of Command, headquartered in Nanning, the capital city of China’s Guangxi Zhuang Autonomous Region in the south. The exercise features the dual deployment of the Chinese Navy’s two aircraft carriers, the Shandong and the Liaoning, just across the narrow Taiwan Strait in China’s Bohai Sea. The exercise is utilizing air-cushioned boats, amphibious assault vehicles, landing barges, and ground attack helicopters. Reportedly, the ongoing PLA military exercise will conclude with an amphibious assault by Chinese Marines upon Woody Island (Yongxing) in the Philippine Sea, south of Taiwan. Woody Island is occupied by Chinese troops is also claimed by Taiwan and Vietnam (which calls the island Phu Lam).

In response to China’s threatening exercise, Major General Lin Wen-Huang, Chief of Taiwan’s Joint Operations, asserted that Taiwan’s military had plans and preparations in place. General Lin, perhaps fearing that the actual target of the PLA amphibious assault is the Taiwan-occupied island of Pratas (Dongsha), 548 kilometers southwest of Taiwan, reinforced the island’s small Coast Guard contingent with hundreds of Taiwanese Marines from the 99th Brigade.

Taiwan’s armed forces maintain close communication with the US military. In a “cross-strait” confrontation between Taiwan and China, American air and naval assets would be granted complete access to Taiwanese airfields and ports. The Trump Administration, signaling China not to assume dominance in the South and East China Seas, has conducted seven such “Freedom of Navigation” missions through the Taiwan Strait in 2020, and the US Navy has already deployed three aircraft carrier battle groups in the South China Sea.

China’s Communist leaders should not miscalculate that the US is too immersed in domestic distractions to defend Taiwan militarily against any possible plans to threaten the island’s sovereignty.

via ZeroHedge News https://ift.tt/3eyKm8U Tyler Durden

Trump Administration Weighing Travel Ban On Chinese Communist Party Members

Trump Administration Weighing Travel Ban On Chinese Communist Party Members

Tyler Durden

Wed, 07/15/2020 – 20:52

Topping off a day of increasingly aggressive tit-for-tat escalations between the US and China, the NYT reported late on Wednesday that the Trump administration is considering an extensive travel ban to the United States by members of the Chinese Communist Party and their families, a move that would almost certainly prompt retaliation against Americans seeking to enter or remain in China and further exacerbate tensions between the two nations.

President Xi Jinping of China at the Great Hall of the People in Beijing in May

Such a ban would be “the most provocative action against China by the United States since the start of the trade war between the two countries in 2018″ and would further deteriorate U.S.-China relations, which after several years of open clashes over economics, technology and global influence have devolved into a de facto new Cold War.

Additionally, the draft proclamation could revoke the visas of party members and their families who are already in the country, leading to their expulsion. The NYT further adds that some of the proposed language is also aimed at limiting travel to the United States by members of the People’s Liberation Army and executives at state-owned enterprises (even though many of them are likely to also be party members).

The presidential order would cite the same statute in the Immigration and Nationality Act used in a 2017 travel ban on a number of predominantly Muslim countries that gives the president power to temporarily block travel to the U.S. by foreign nationals who are deemed “detrimental to the interests of the United States.” The 2017 ban was fought in the courts and expanded this year.

Then again, this being the NYT, the whole report may well be fake news based on a non-existent (or conflicted NSA) source seeking to spark even more conflict in the already strained US-Sino relations, and the paper of records tacitly hints as much saying that “details of the plan have not yet been finalized, and President Trump might ultimately reject it.”

Assuming Trump is indeed considering such a ban, it wasn’t clear just how such a ban would be implemented: the Chinese Communist Party has 92 million members, and the U.S. government has no knowledge of party status for a vast majority of them. So trying to immediately identify party members to either prevent their entry or expel those already in the United States would be difficult. Meanwhile, almost three million Chinese citizens visited the United States in 2018.

As the NYT further adds, officials at the White House, State Department and Department of Homeland Security have been involved in the discussion over the ban. Officials at those agencies also continue to debate a variety of formulations for banning Chinese travel to the United States short of barring all party members, such as targeting only the 25 members of the ruling Politburo and their families.

Ironically, the report follows just hours after another anti-Trump outlet, Bloomberg, reported that the president “doesn’t want to further escalate tensions with Beijing, and has ruled out additional sanctions on top officials for now, according to people familiar with the matter.”

So which is it: no sanctions or sanction 92 million Chinese communists? It’s safe to say that the truth is somewhere inbetween.

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ECB Preview : The Calm Before The Storm

ECB Preview : The Calm Before The Storm

Tyler Durden

Wed, 07/15/2020 – 20:30

Submitted by Christopher Dembik, Head of Macro Analysis at Saxo Bank

Summary:  We are onside with consensus in expecting no change in monetary policy this week. Now the German court challenge has been defused, the ECB can focus on the future of its bond purchases. Technical discussions should concern the likely slowdown in the path of bond purchases this summer, further flexibility in the PSPP (Public Sector Purchase Programme) parameters, and early talks about the Strategy Review that is due next year, especially regarding climate change. The ECB is likely to remain on alert as the second economic wave of the COVID-19, characterized by business restructuring and permanent closures, is about to hit the Eurozone and fragilize the banking sector.

Timeline of the ECB’s response to the crisis:

  • March 12: The ECB decides to expand its QE programme by €120bn until the end of 2020, with a special focus on private sector bonds, such as corporate bonds, and to offer more favorable terms for the already planned TLTRO III with a rate up to -0.75%.

  • March 18: “Whatever it takes” moment. The ECB unveils its Pandemic Emergency Purchase Programme (PEPP) of €750bn until the end of 2020 with a high degree of flexibility: the 33% limit DOES NOT apply and the ECB can purchase debt across all the yield curve, including Greek debt under waiver. The QE program reach a total of €1050bn until the end of the year (including previous measures and the relaunch of QE by Draghi in 2019).

  • April 7: The ECB decides a very significant easing of its collateral requirements, including an expansion of eligible credit claims (ACCs) to SME loans, Greek debt (waiver) and a 20% reduction in haircuts.

  • April 22: The ECB accepts some junk-rated debt as collateral for loans to banks (Important caveats: the bonds must be rated as investment grade on April 7).

  • June 4: The ECB increases the €750bn envelope for the PEPP by €600bn to a total of €1350bn. All asset categories eligible under the existing asset purchase programme (APP) are also eligible under the new programme.

  • June 25: The ECB creates a Eurosystem repo facility to provide liquidity in EUR to central banks outside the euro area. This is a precautionary measure to alleviate potential euro funding difficulties due to the pandemic.

The timely response to the pandemic by the ECB successfully managed to close governments financing gap in the Eurozone. Despite the depth of the recession and the large negative shock to the level of public debt, Italy is able to finance COVID-19 expenses at very low cost, without requesting financial help from the ESM. The 10-year Italy-Germany government bond spread is basically back to pre-COVID levels, at 1.66% versus a crisis peak at 2.77% in mid-March. The ECB’s greatest success is that it has avoided a remake of the 2012 debt crisis, by absorbing almost all new public debt related to the pandemic, and by providing as much liquidity as necessary to the market, thus preventing the emergence of a liquidity crisis. Much bas been said about Christine Lagarde’s appointment as president of the ECB, but we need to recognize, myself included, that we were probably too critical and that she has brilliantly managed the crisis, almost making us forget about Draghi.

The ECB has managed to “fill the gap” in the Eurozone

Now the German Constitutional Court challenge has been defused, the ECB can focus on the future of its bond purchases. Technical discussions are likely to concern:

  • The slowdown in the path of the bond purchases, which usually happens during the summer season (July and August), and might be the main point of interest for investors this week;

  • Further flexibility in the PSPP parameters, especially regarding the 33% issuer limit. This issue needs to be addressed soon as there are many indications that the limits for German government bonds must be quite close.

  • As part of the Strategy Review due in 2021, early talks about how the ECB could help fighting climate change – a topic that has been at the heart of Lagarde’s speeches lately.

Due to the ECB firepower and hopes for EU deal on the recovery plan “”Next Generation EU” this week at the physical EUCO meeting on July 17 and 18, sentiment of investors has significantly improved over the past weeks regarding European financial assets, and especially the euro. Speculators are betting on a higher euro as they take their long position close to their annual high point, currently at 180,387 contracts. This move also reflects aversion against the USD due to the health crisis in the United States and the impact on the greenback of the Federal Reserve flooding the markets with US dollars. At least in the short term, the euro should keep performing well.

The ECB’s timely action and hopes for EU deal on budget and recovery plan have driven positive sentiment of investors regarding the euro

However, there is no room for complacency. Downside risks remain elevated for the coming months. The ECB is likely to remain on alert as the second economic wave of the COVID-19, characterized by business restructuring and permanent closures, is about to hit the Eurozone and fragilize the banking sector. Though the ECB systemic stress indicator has receded from its annual peak reached in mid-March, it is still in risk-zone territory at 0.21, confirming that further support from the ECB might be needed to limit financial issues that could slow down the recovery. It will be of prime importance to monitor well risks on the banking sector related to payment deferrals, that has been granted to consumers and businesses in order to cope with the crisis. These risks will only become apparent over time and might cause a sharp increase in the ratio of non-performing loans in the most vulnerable countries.

Euro area systemic stress remains in risk-zone

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Civil Unrest

Civil Unrest

Tyler Durden

Wed, 07/15/2020 – 20:10

Authored by Philip Marey, Senior US Strategist at Rabobank

Civil Unrest

Summary

  • In contrast to most other developed countries, the first wave of COVID-19 has not been suppressed in the US. Both at the federal and state level institutions are failing.
  • Protests against COVID-19 measures and against racism reflect a lack of trust in US institutions that predates the outbreak of the virus. In a polarized society trust in institutions is likely to be vulnerable.
  • No matter who wins the elections, the turbulence in US politics and society is not likely to pass. In fact, what we are seeing now may be only the beginning.

First wave failure

In the last months we have seen the US taking a descent into chaos. In contrast to most other developed countries, the first wave of COVID-19 has not been suppressed. In fact, in June the daily amount of new confirmed cases surpassed the initial peak reached in April. At the same time, a coherent federal plan to turn this around seems lacking. At the state level, economies have been reopened before meeting the criteria set out earlier by the White House. At the individual level, we have seen many protests against measures to contain the virus.

Stop the killing

Meanwhile, protests of another nature have taken over the streets. The endless series of police killings finally sparked a national outrage when images of the Minneapolis police murdering George Floyd were seen around the world. Of course this was nothing new. In fact, over the years many black Americans have lost their lives at the hands of the police. In most cases, the police got away with it. However, in this age of smartphones with cameras and social media, white Americans finally saw what black Americans experience.

Earlier during the coronacrisis, the second rate US citizenship of black Americans was evident in the asymmetric impact of COVID-19 that we noted in the April Monthly Outlook. According to CDC data (Table 1) black Americans have a COVID-19 associated hospitalization rate almost 5 times that of white Americans, adjusted for age. In fact, for native Americans this ratio is even higher. Living conditions, work circumstances and healthcare inequities put several ethnic minority groups at increased risk during COVID-19 according to the CDC.

V or W?

In sharp contrast to the widely broadcast civil unrest, stock markets have rebounded rapidly and the economic data for May and June suggest that the real economy is following. However, we should note that the recovery in the stock markets did not start until after the Fed had cut rates to zero, announced QE Infinity and launched its special lending facilities, which included corporate bonds. The recovery in the real economy follows a sharp contraction caused by the outbreak of COVID-19 and the lockdown that followed. The decline in economic activity in March and April was so steep that it caused both Q1 and Q2 GDP growth to be negative. The rebound we are now seeing is simply the effect of opening up the economy again. This is a mechanical rebound, and as we explained in The Recession of 2020: The Horror Version, we will have to wait until Q4 before we could see demand fluctuations determine GDP growth again. Then we will see how much damage really has been done.

Crumbling institutions

So at the moment there is this sharp contrast between the economic data and stock price levels on the Bloomberg screens and the images and discussions on TV. Note that both types of protests we mentioned, against COVID-19 measures and against racism, reflect a lack of trust in US institutions that predates the outbreak of the virus. In fact, data collected by the Pew Center show that trust in the federal government has fallen since the mid-1960s. In terms of economics, institutions are not working for Americans, unless you are one of the 1%. In terms of civil rights, institutions have failed black Americans and native Americans in particular.

Polarization

What’s more, in a polarized society trust in institutions is likely to be vulnerable. US politics has become polarized. Today, liberals vote for the Democrats and conservatives for the Republicans. This was not always the case however. In the 1950s there were liberals and conservatives in both parties. In fact, while many millennials regard the Democratic party as a beacon of political correctness, this party was a broad coalition that included Southern segregationists (= white supremacists) until the 1960s. Also, both in the Senate and the House of Representatives a higher percentage of Republicans voted for the Civil Rights Act of 1964 than Democrats. However, when Southern Democrats started to switch to the Republican Party after the Civil Rights Act, Northern liberals switched to the Democratic Party and this led to the sorting of liberals and conservatives between the two parties. Subsequently, the two parties were also sorted by race, religion and geography. This sorting process was a prelude to the polarization between the two parties. Political affiliation became part of someone’s identity. This also led to an increased aversion to the other party. The tone between the left and the right has become increasingly hostile. In light of this the polarization that we have seen in recent years is not caused by Trump, rather it is the other way around. The election of Trump is a consequence of this historical process. Polarization made it possible.

Moreover, polarization is even visible in opinions about the coronavirus outbreak (Table 2). With a lack of direction from the federal government, this makes a coherent national policy to get the outbreak under control very difficult.

Only the beginning?

The question is where does the US go from here? If President Trump is re-elected, he will be at the wheel for four more years, but this time without any restrictions imposed by concerns about re-election. If Biden takes the White House, federal policies will shift to the left again (for more details see the May Monthly Outlook). But will this lead to renewed trust in institutions? Perhaps for some on the left, but what about the rest? In a heavily polarized country, there is little common ground. Meanwhile, if right-wing populism is expelled from the White House, this does not mean it is going to disappear. It will only reorganize. Hopefully in the political arena, but we could also see another boost to violent right-wing extremism. In fact, right-wing attacks and plots account for the majority of terrorist incidents in the US since the mid-1990s. In the last six years, this has grown substantially (Figure 4). So no matter who wins the elections, the turbulence in US politics and society is not likely to pass. In fact, what we are seeing now may be only the beginning.

via ZeroHedge News https://ift.tt/2ZwIs4v Tyler Durden

Philly Mayor’s Ban On Large Events “Does Not Apply” To Protests Or “Demonstrations”

Philly Mayor’s Ban On Large Events “Does Not Apply” To Protests Or “Demonstrations”

Tyler Durden

Wed, 07/15/2020 – 19:50

Authored by Nicholas Bailey via JustTheNews.com,

Philadelphia Democratic Mayor James Kenney says his city-wide ban on large events and gatherings through February 2021 does not apply to protests.

“The city’s office of special events will not accept, review, process or approve applications, issue permits or enter into agreements for special events or public gatherings of 50 people or more on public property through the end of February. The moratorium will apply to special events and public gatherings, including but not limited to festivals, parades, concerts, carnivals, fairs and flea markets,” Kenney said during a coronavirus video update on Tuesday.

“In addition, permit applications for residential block permits will not be accepted until further notice. The timeline when such activities may resume will be communicated as soon as possible. To be clear, this hold on large public events does not, does not apply to demonstrations and First Amendment protected activities,” he added.

Just the News reached out to the mayor’s office to learn whether the city will issue formal permits for protests or demonstrations on municipal property during the large-event ban. The office did not respond before publication.

There have been many Black Lives Matter protests taking place in cities across the U.S. during the pandemic since the May 25 death of George Floyd while in the custody of Minneapolis police. Some demonstrations have resulted in destructive protests marked by looting, vandalism and removal of statues from public grounds. 

According to local media reports, Kenney recently waived “all protest-related code violations that were issued over the last month of protests in Philadelphia against systemic racial injustice.”

“My decision to waive these violations is not a statement on the validity of the individual citations,” Kenney said in a statement.

“Rather, it is a recognition of the core concerns that caused thousands to demonstrate on the streets of Philadelphia. In waiving these notices, I recognize that those issues are vitally important, that the pain of those marching is very real, and that their message – Black lives matter – needs to be heard every day until systemic racism is fully eradicated from this city and nation.”

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

ABA Issues Formal Opinion on Purpose, Scope, and Application of ABA Model Rule 8.4(g)

The ABA Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 493 on the purpose, scope, and application of ABA Model Rule 8.4(g).

Here is a summary from the abstract:

Rule 8.4(g) covers conduct related to the practice of law that occurs outside the representation of a client or beyond the confines of a courtroom. In addition, it is not restricted to conduct that is severe or pervasive, a standard utilized in the employment context. However, and as this opinion explains, conduct that violates paragraph (g) will often be intentional and typically targeted at a particular individual or group of individuals, such as directing a racist or sexist epithet towards others or engaging in unwelcome, nonconsensual physical conduct of a sexual nature.

The Rule does not prevent a lawyer from freely expressing opinions and ideas on matters of public concern, nor does it limit a lawyer’s speech or conduct in settings unrelated to the practice of law. The fact that others may personally disagree with or be offended by a lawyer’s expression does not establish a violation. The Model Rules are rules of reason, and whether conduct violates Rule 8.4(g) must necessarily be judged, in context, from an objectively reasonable perspective.

I have written about the Rule here and here, and submitted letters to several state supreme courts in opposition to Rule 8.4(g). The ABA opinion does not cite my work, or that of any other 8.4(g) critic. (The opinion frequently cites supporters of the rule). But the opinion addresses several concerns that I, and others, have raised. I will provide a summary of the opinion in this post.

“Severe or Pervasive” Standard Does Not Apply

The opinion makes clear that the “severe or pervasive” standard does not apply to Rule 8.4(g). A single incident could amount to misconduct:

For example, a single instance of a lawyer making a derogatory sexual comment directed towards another individual in connection with the practice of law would likely not be severe or pervasive enough to violate Title VII, but would violate Rule 8.4(g).The isolated nature of the conduct, however, could be a mitigating factor in the disciplinary process.

And in a footnote, the opinion lists 5 factors to consider with respect to discipline:

Whether discipline is imposed for any particular violation of Rule 8.4(g) will depend on a variety of factors, including, for example: (1) severity of the violation; (2) prior record of discipline or lack thereof; (3) level of cooperation with disciplinary counsel; (4) character or reputation; and (5) whether or not remorse is expressed.

The capacious nature of the fourth factor will likely swallow all others. And the fifth factor will likely be used to cow attorneys into admitting their fault.

Rule 8.4(g) Applies an “Objective Reasonableness” Standard

The opinion applies an “objective reasonableness” standard.

The existence of the requisite harm is assessed using a standard of objective reasonableness. In addition, a lawyer need only know or reasonably should know that the conduct in question constitutes discrimination or harassment.24 Even so, the most common violations will likely involve conduct that is intentionally discriminatory or harassing.

In other words, an attorney does not need to intentionally engage in misconduct. It is enough to know that an “objective” observer would know that his conduct amounts to harassment. In our maelstrom society, I do not know what an “objective” standard is with respect to race, sex, and other protected factors. Truly. Comments that were once thought to be innocuous have led to immediate cancellation. This standard in ABA Rule 8.4(g) can be weaponized.

“Harassment”

The opinion states that the term “harassment” is a well understood term.

Harassment is a term of common meaning and usage under the Model Rules.

The opinion relies on two dictionaries:

[Harassment] refers to conduct that is aggressively invasive, pressuring, or intimidating. FN 29

FN29: See, e.g., NEW OXFORD AMERICAN DICTIONARY 790 (3d ed. 2010) (defining “harassment” as “aggressive pressure or intimidation”); MERRIAM-WEBSTER DICTIONARY (defining “harass” as meaning “to annoy persistently”; “to create an unpleasant or hostile situation for, especially by uninvited and unwelcome verbal or physical conduct”), https://ift.tt/2tb472h (last visited June 23, 2020).

The opinion cites two instances where the word “harassment” is used in the model rules.

First, Model Rule 3.5(c)(3) states:

“A lawyer shall not … communicate with a juror or prospective juror after discharge of the jury if … the communication involves misrepresentation, coercion, duress or harassment.”

Here, the word “harassment” seems to resemble its neighbors: “misrepresentation, coercion, [and] duress.” The committee, however, reads the word “harassment” far more broadly:

Here, the term “harassment,” as in Rule 8.4(g), refers to conduct that is aggressively invasive, pressuring, or intimidating, including that which is reasonably perceived to be demeaning or derogatory, as demonstrated in In re Panetta.

Panetta relied on New York Rule of Professional Conduct that mirrors 3.5(c)(3) almost verbatim: it refers to “misrepresentation, coercion, duress or harassment.” Panetta did not discuss harassment in particular. It merely sustained the Special Referee’s report. I agree with the Committee that Panetta’s conduct was “insulting, badgering, and threatening.” But that standard is far more severe than “demeaning or derogatory.” The Committee errs by trying to extend truly threatening behavior to speech that is merely demeaning–especially when it may be judged by a reasonable woke objective standard.

Second, the opinion relies on Model Rule 7.3.(c)(2). It states:

“lawyer shall not solicit professional employment … if … the solicitation involves coercion, duress or harassment.”

Again, the phrase “harassment” seems to resemble “coercion” or “duress.” But the Committee reads the phrase in a different fashion:

As with other uses of “harassment” in the Model Rules, a rational reading of the term includes badgering or invasive behavior, as well as conduct that is demeaning or derogatory.

The first half of the sentence does not support the second half. There is a huge difference between “invasive” threats and “demeaning” comments. The Committee made the same analytical leap twice, without sufficient reasoning. The opinion adds in a footnote:

Consistent with the guiding principle that the Model Rules are rules of reason and “should be interpreted with reference to the purposes of legal representation and of the law itself,” the term “harassment” in Rule 8.4(g) must be construed and applied in a reasonable manner. See MODEL RULES Scope [14].

This hedge is not very reassuring.

“Discrimination”

Rule 8.4(g) prohibits both harassment and discrimination. The Committee explains that the terms overlap:

Bias or prejudice can be exhibited in any number of ways, some overlapping with conduct that also constitutes harassment. Use of a racist or sexist epithet with the intent to disparage an individual or group of individuals demonstrates bias or prejudice.

The committee cites In re McCarthy (Indiana 2010) to support its definition of “discrimination.” But that case did not involve “discrimination.” McCarthy did involve an interpretation of “bias or prejudice.” It relied on an earlier version of Rule 8.4(g):

engage in conduct, in a professional capacity, manifesting, by words or conduct, bias or prejudice based upon race, gender, religion, national origin, disability, sexual orientation, age, socioeconomic status, or similar factors.

The word “discrimination” has a far more settled interpretation. (Or at least it did before Bostock). I am less troubled by this element of the rule, to the extent the “discrimination” prong is limited to the employment context. But extending the word concept of “bias” to the more nebulous harassment context, outside the practice of law, proves problematic.

“Constitutional Principles”

I take it that constitutional law is outside the purview of the Committee. But the opinion does consider two “constitutional principles.”

The Committee does not address constitutional issues, but analysis of Rule 8.4(g), as with our analysis of other rules, is aided by constitutional context.46 For Rule 8.4(g), two important constitutional principles guide and constrain its application. First, an ethical duty that can result in discipline must be sufficiently clear to give notice of the conduct that is required or forbidden. Second, the rule must not be overbroad such that it sweeps within its prohibition conduct that the law protects.

The Court cites recent articles which rejected any possible First Amendment problems with Rule 8.4(g). But the Committee did not cite any contrary authority, including the opinions of several attorneys general.

The Committee then considers several attorney discipline cases that all arise in the practice of law. I explained long ago that the Bar’s power to punish dissipates as the regulate activity moves further away from the core legal practice. The Committee does not address that important limitation of state constitutional law.

The Committee also does not discuss recent precedent, such as NIFLA v. Becerra, which cast serious doubt on ABA Model Rule 8.4(g). That case held that the government lacks an “unfettered power” to regulate the speech of “lawyers,” simply because they provide “personalized services” after receiving a “professional license.” The failure to grapple with NFILA undermines the entire constitutional law analysis.

Hypotheticals

The opinion closes with five hypotheticals. These hypotheticals are designed to address directly concerns that I and others have raised. I think the committee is trying to grease the skids for enactment, and say that our critiques are not valid.

Consider the second hypothetical:

A lawyer participating as a speaker at a CLE program on affirmative action in higher education expresses the view that rather than using a race-conscious process in admitting African-American students to highly-ranked colleges and universities, those students would be better off attending lower-ranked schools where they would be more likely to excel. Would the lawyer’s remarks violate Rule 8.4(g)?

I raised this precise hypothetical about “mismatch theory” in my 2017 article. The committee responds:

No. While a CLE program would fall within Comment [3]’s description of what constitutes “conduct related to the practice of law,” the viewpoint expressed by the lawyer would not violate Rule 8.4(g). Specifically, the lawyer’s remarks, without more, would not constitute “conduct that the lawyer knows or reasonably should know is harassment or discrimination on the basis of . . . race.” A general point of view, even a controversial one, cannot reasonably be understood as harassment or discrimination contemplated by Rule 8.4(g). The fact that others may find a lawyer’s expression of social or political views to be inaccurate, offensive, or upsetting is not the type of “harm” required for a violation.

This answer confirms that a CLE event would fall within the ambit of Rule 8.4(g).  I am grateful the Committee thinks “inaccurate, offensive, or upsetting” views are outside the ambit of Rule 8.4(g). But I’ll admit that I’m skeptical.  The opinion defined “harassment” as “aggressively invasive, pressuring, or intimidating, including that which is reasonably perceived to be demeaning or derogatory.” Advocating mismatch theory would be, without question, deemed “demeaning or derogatory” to many people. I think that conclusion is objectively reasonable, in light of our present-day society. Indeed, during a class several years ago, I mentioned Justice Scalia’s comments concerning mismatch theory, and the reaction was visceral. I cannot imagine what would have happened if I said Scalia was right!

This answer also hedges a bit. It says: “the lawyer’s remarks, without more, would not constitute” misconduct. There’s the wiggle room. There will always be something “more.”

In short, this Q&A does not adequately address my concerns. And even if the conduct ultimately does not support discipline, attorneys will still have to litigate the proceedings for months and years. The complaint, and not the discipline, results in the chilling effect on speech.

***

I am grateful the Committee wrote this opinion. It filled in many of the gaps left unanswered by the Model Rule. But the opinion clarifies that many of my concerns were appropriate.

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