House Democrats Approve Bill To Make Washington DC 51st State

House Democrats Approve Bill To Make Washington DC 51st State

Tyler Durden

Fri, 06/26/2020 – 15:05

The Democrat-controlled House voted on Friday to make Washington D.C. the country’s 51st state and rename it “Washington, Douglass Commonwealth,” replacing Italian explorer Christopher Columbus with Maryland-born abolitionist Frederick Douglas.

Precisely zero House Republicans voted for the bill, which passed 232 to 180. Democratic Rep. Collin Peterson (MN) – who voted against impeaching President Trump, voted no along with the Republicans, as did independent Rep. Justin Amash.

The bill is expected to die in the Senate, while Trump also opposes the move which would likely grant the new state two Democratic senators.

On Thursday, Joe Biden(‘s handlers) tweeted: “DC should be a state. Pass it on,” adding to a long chain of Democrats ‘passing it on’ which was started by Ilyse Hogue, president of pro-choice organization NARAL.

Keep in mind that House Democrats – who just weeks ago appeared for a choreographed ‘kneeling’ while dressed in African attire – know the DC statehood vote has no chance of passing, and is therefore yet another giant virtue signaling circlejerk.

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Students Are Demanding A Professor Be Fired For Opposing Slavery

Students Are Demanding A Professor Be Fired For Opposing Slavery

Tyler Durden

Fri, 06/26/2020 – 14:51

Authored by Steve Watson via Summit News,

Students are petitioning to have a professor at Loyola University New Orleans fired over his opinions on slavery, even though he vehemently opposes it.

Economics professor Walter Block says he opposes slavery because he is a libertarian, but that reasoning isn’t good enough for some students, who wish to see the professor removed because he doesn’t have exactly the same opinions as they do.

petition, signed by over 600 students, alleges that Block has ‘racist and sexist beliefs’.

The petition claims that Block “has publicly stated that he believes slavery to be wrong because it goes against Libertarianism, not because it is morally wrong.”

“If Loyola is really wanting to remove racism, they should remove racists from teaching,” it adds.

“While it is important to have professors with different views and opinions and beliefs, racist and sexist beliefs should not be a part of this,” it continues, adding “It is harmful to any non-men and any Black people to be taught that slavery isn’t morally wrong, to be taught that women don’t deserve to be paid and treated equally.”

The students also claim that Block has “ableist” opinions, in that he discriminates against people with disabilities. It claims that Block once told a student that he thinks the “Americans with Disabilities Act was a terrible law”.

The Spectator managed to get a comment from Block, as the professor told the publication “Slavery is wrong, evil and should be outlawed, and slavers be considered criminals and put in jail because it is a rights violation; it is an abomination.”

He further notes, however, that “woke” students are trying to remove him because they are not capable of accepting, co-existing with,  or debating a diversity of discourse.

“The woke people who want me fired do not wish to engage in civil dialogue or debate. Also, thank goodness for academic freedom and what little intellectual diversity remains on campus,” Block urged.

The University appears to be standing by Block for now, with Interim Provost Maria Calzada commenting that academic freedoms need to be upheld.

“We have serious legal constraints on our ability to fire faculty for that which they publish, even if we find it anathema,” Calzada said, adding “We cannot be accredited as a university without policies of academic freedom.”

This case perfectly illustrates how the woke mob don’t really care about freedom of expression or diversity of opinion. You may hold morally sound beliefs but still be targeted for cancellation because you do not have the exact same opinions as they do.

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RIP Lester Grinspoon, Who Encouraged Americans To Reconsider Demonized Drugs

Lester-Grinspoon-NORML

Lester Grinspoon, a leading drug policy reformer who died yesterday at the age of 92, was an optimist. “Whatever the cultural conditions that have made it possible, there is no doubt that the discussion about marihuana has become much more sensible,” Grinspoon wrote in 1977. “If the trend continues, it is likely that within a decade marihuana will be sold in the United States as a legal intoxicant.”

It turned out that Grinspoon was off by a few decades. He did not anticipate the reaction against adolescent pot smoking that would lead to an intensified war on weed during the Reagan administration, when public support for legalization dropped after rising during the 1970s. But Grinspoon lived to see marijuana become a legal intoxicant in 11 states, nine of which have government-licensed shops serving recreational consumers. Marijuana retailers not only are legitimate businesses in those nine states; they were deemed “essential” during COVID-19 lockdowns in all but one, meaning they were allowed to stay open as other merchants were forced to close.

That is a remarkable development after a century of pot prohibition, which began at the state level in 1911 and culminated in the federal Marihuana Tax Act of 1937. The ongoing collapse of that regime is due in no small part to Grinspoon’s tenacious advocacy of a more rational and tolerant approach to America’s most popular illegal drug.

Grinspoon’s career as a reformer spanned half a century, beginning with his 1971 book Marihuana Reconsidered. When he published that book, Grinspoon was a professor of psychiatry at Harvard Medical School. That respectable perch gave him credibility as he made a case that was still highly controversial at a time when nearly nine out of 10 Americans thought marijuana should remain illegal.

Grinspoon, whose old-fashioned spelling of the drug’s name harked back to the era of Reefer Madness, originally set out to present credible evidence of marijuana’s harms to pot-smoking kids who were ignoring the government’s warnings. “I was concerned about all these young people who were using marijuana and destroying themselves,” he told me in 1993. But after examining the research on marijuana’s effects, he said, “I realized that I had been brainwashed, like everybody else in the country.” In his book, he methodically debunked many scary claims about pot, including fears that it caused crime, sexual excess, psychosis, brain damage, physical dependence, and addiction to other drugs.

The following year, the Nixon-appointed National Commission on Marihuana and Drug Abuse reached broadly similar conclusions: that the dangers of pot had been greatly exaggerated and could not justify punitive treatment of its users. The commission introduced the concept of decriminalization, which the newly formed National Organization for the Repeal of Marijuana Laws (NORML)—which early on replaced repeal with reform in its name—soon adopted as a goal. At a time when some 600,000 people were being arrested each year on marijuana charges, most for simple possession, the strategy had broad appeal. Liberals were concerned about the injustice of sending college students to jail for carrying a joint or two. Conservatives worried about the mass alienation and disrespect for the law that the policy was breeding.

In 1973 Oregon became the first state to “decriminalize” marijuana, making possession of less than an ounce a civil offense punishable by a maximum fine of $100. By the end of the decade, 11 states had decriminalized possession, a policy endorsed by President Jimmy Carter, the American Bar Association, the American Medical Association, and the National Council of Churches. Every other state had reduced the penalty for simple possession, nearly all of them changing the offense from a felony to a misdemeanor. Most allowed conditional discharge, without a criminal record.

That was the context of Grinspoon’s optimism in 1977, when he published an updated edition of Marihuana Reconsidered. But as he noted at the time, decriminalization, while a clear improvement, was not an adequate solution, and it was inherently unstable. “As long as marihuana use and especially marihuana traffic remain in this peculiar position neither within nor outside the law, demands for a consistent policy would remain strong,” he wrote. “We would have to ask ourselves why, if using marihuana is relatively harmless, selling it is a felony; then we would have to decide whether to return to honest prohibition or move on to legalization.”

Although it took longer than Grinspoon expected, Americans eventually grappled with that conundrum and resolved it in favor of legalization, which two-thirds of respondents supported in the most recent Gallup poll. Given the current climate of opinion, it is easy to overlook the courage and perseverance it took to calmly, graciously, and persistently advocate a cause that remained broadly unpopular until the last decade or so.

But Grinspoon, who served for many years on NORML’s board of directors, did more than that. In his 1993 book Marihuana: The Forbidden Medicine, co-authored by James B. Bakalar, he made the case that cannabis—which was a common ingredient in patent medicines during the 19th century, when it was extravagantly promoted as a cure for a wide range of maladies, including coughs, colds, corns, cholera, and consumption—actually had scientifically verifiable medical potential. That was three years before California became the first state to allow medical use of marijuana, a policy that was eventually adopted by 32 other states.

The significance of that development is hard to overstate, because it not only highlighted the potential benefits of a long-demonized plant but focused attention on its side effects, an obvious concern when medically frail people use it for symptom relief. The hazards of marijuana, in turned out, compared quite favorably to those of many widely prescribed pharmaceuticals. And in states like California, where loose rules allowed pretty much anyone to legally obtain marijuana as long as they had a doctor’s note, permitting medical use became a test for broader legalization. The sky did not fall—a point recognized by the voters who eventually approved tolerance of recreational use in California and elsewhere.

Grinspoon’s position on marijuana’s therapeutic potential was eventually endorsed, to at least some extent, by such scientific authorities as the Food and Drug Administration (FDA) and the National Academies of Sciences, Engineering, and Medicine. Two years ago, the FDA, which had approved a synthetic version of THC as a treatment for AIDS wasting syndrome and the side effects of cancer chemotherapy in the 1980s, authorized the sale of Epidiolex, the first cannabis-derived medication to be approved by the U.S. government, as a treatment for two rare kinds of epilepsy.

Grinspoon’s advocacy was not limited to marijuana. In their 1979 book Psychedelic Drugs Reconsidered, he and Bakalar gave that class of psychoactive substances, which had long terrified politicians and the general public, the same sort of demystifying treatment that Grinspoon had applied to marijuana eight years earlier. As with marijuana, government officials have acknowledged at least some of the truth Grinspoon was telling. In 2018, the same year it approved Epidiolex, the FDA recognized psilocybin as a “breakthrough therapy” for depression, signaling that it might be approved as a prescription drug sometime in the next few years. Meanwhile, state and local activists are pushing for legal tolerance of nonmedical psilocybin use. They scored their first victory in Denver last year.

It is safe to say that Americans, most of whom favor the legalization of psychedelics as psychotherapeutic catalysts, are much calmer about those drugs than they were in the 1960s and ’70s. That sort of reevaluation does not come out of thin air. It is a function of the arguments and evidence marshaled by pioneering public intellectuals like Grinspoon.

Grinspoon did not simply argue that the government should allow the use of drugs that prove to be “relatively harmless,” as he described marijuana in the 1970s. In the 1984 book Drug Control in a Free Society, he and Bakalar delved into the deeper issues raised by politicians’ attempts to enforce their pharmacological prejudices.

Starting with John Stuart Mill’s On Liberty and with nods toward libertarians such as Thomas Szasz and Robert Nozick, Grinspoon and Bakalar thoughtfully challenged the case for paternalistic drug policies; questioned the conventional understanding of addiction; noted how a sweeping conception of public health becomes a license for all manner of meddling in personal choices; highlighted the arbitrary legal distinction between alcohol and other drugs; and insisted that the pleasure people get from drugs should count for something in any calculus of prohibition’s cost and benefits. It is a slim, wisdom-packed volume that is still relevant 36 years later.

Americans have mostly accepted Grinspoon’s position on marijuana, and they may be coming around on psychedelics as well. I am less hopeful that they will ever think logically, consistently, and systematically about drug policy in general. But if they do, it will thanks to dogged dissidents like Grinspoon.

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Rand Paul Tries (Again!) To Make it Harder for Police To Take Your Stuff

randpaulforfeiture_1161x653

Amid popular calls for policing reform, a handful of senators are resurrecting a bill to make it harder for police to take people’s property without first convicting them of crimes.

Sens. Rand Paul (R–Ky.), Mike Lee (R–Utah), Mike Crapo (R–Idaho), and Angus King (I–Maine) reintroduced the Fifth Amendment Integrity Restoration (FAIR) Act this week to significantly restrain the federal use of civil asset forfeiture, a practice that lets police and prosecutors seize and keep property they claim are associated with criminal activity.

Because the process is “civil,” it often allows police to do this without ever proving the property owner has committed a crime, or even charging them with criminal action. Those facing the forfeiture process often have to pay for their own lawyers (if they can afford lawyers, what with their assets being seized) and face a complex bureaucratic process stacked against them. This was sold as a way to fight drug cartels, but over the past several decades it has become clear that cops are abusing the process to pad their budgets and payrolls. Instead of drug kingpins, the targets are frequently poorer people, often minorities or immigrants, who lacked the financial resources to fight back when police took their property. Law enforcement agencies have raked in more than $35 billion in this way over the last two decades.

Several states have tried to curtail abuses by imposing their own restrictions on forfeitures, but the federal Department of Justice’s programs can be used to bypass state-level restraints. The Justice Department’s Equitable Sharing program allows local law enforcement agencies to team up with the FBI or Drug Enforcement Administration to do a raid, then launder the assets they seize through the feds and keep much of it.

The FAIR Act would eliminate such “equitable” sharing, forcing law enforcement agencies to comply with state-level restrictions on forfeiture. It also increases the evidentiary threshold for forfeiture, requiring “clear and convincing evidence” that the property to be seized is connected to a crime, compared to the current, much looser standard or a “preponderance of the evidence.” It’s still not the same “beyond a reasonable doubt” threshold to get a conviction, but it’s nevertheless an improvement.

The bill would also make sure that people subjected to federal forfeitures would receive appointed counsel if they need it. And it would reduce the profit motive to engage in forfeiture by directing the money seized in this way to the Treasury’s General Fund, to be distributed by Congress rather than be sent directly to law enforcement agencies.

“The federal government has made it far too easy for government agencies to take and profit from the property of those who have not been convicted of a crime,” Paul said in a prepared statement. “The FAIR Act will uphold the Fifth Amendment and ensure government agencies no longer profit from taking American citizens’ property without due process. It will guard against abuse while maintaining the ability of courts to order the surrender of proceeds of crime.”

Paul attempted to get this bill passed back in 2014, but it languished at the Senate Judiciary Committee. Rep. Tim Walberg (R–Mich.) has sponsored the House version, which has attracted co-sponsors from both major parties, but it has also been stuck in committee since May 2019.

This time Paul says he’ll be attempting to attach the FAIR Act as an amendment to any police reform bill the Senate might consider. Unfortunately, it’s not clear that the Senate will actually be considering any of them. Senate Democrats refused to support a Republican-sponsored bill organized by Sen. Tim Scott (R–S.C.) because it didn’t go far enough for them. Meanwhile, the bill Democrats pushed through the House last night included a provision that would strip officers of qualified immunity, an idea that Senate Republicans don’t want to consider.

So ultimately there may not be anything for Paul to actually attach the FAIR Act to. We’ll have to see.

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Rand Paul Tries (Again!) To Make it Harder for Police To Take Your Stuff

randpaulforfeiture_1161x653

Amid popular calls for policing reform, a handful of senators are resurrecting a bill to make it harder for police to take people’s property without first convicting them of crimes.

Sens. Rand Paul (R–Ky.), Mike Lee (R–Utah), Mike Crapo (R–Idaho), and Angus King (I–Maine) reintroduced the Fifth Amendment Integrity Restoration (FAIR) Act this week to significantly restrain the federal use of civil asset forfeiture, a practice that lets police and prosecutors seize and keep property they claim are associated with criminal activity.

Because the process is “civil,” it often allows police to do this without ever proving the property owner has committed a crime, or even charging them with criminal action. Those facing the forfeiture process often have to pay for their own lawyers (if they can afford lawyers, what with their assets being seized) and face a complex bureaucratic process stacked against them. This was sold as a way to fight drug cartels, but over the past several decades it has become clear that cops are abusing the process to pad their budgets and payrolls. Instead of drug kingpins, the targets are frequently poorer people, often minorities or immigrants, who lacked the financial resources to fight back when police took their property. Law enforcement agencies have raked in more than $35 billion in this way over the last two decades.

Several states have tried to curtail abuses by imposing their own restrictions on forfeitures, but the federal Department of Justice’s programs can be used to bypass state-level restraints. The Justice Department’s Equitable Sharing program allows local law enforcement agencies to team up with the FBI or Drug Enforcement Administration to do a raid, then launder the assets they seize through the feds and keep much of it.

The FAIR Act would eliminate such “equitable” sharing, forcing law enforcement agencies to comply with state-level restrictions on forfeiture. It also increases the evidentiary threshold for forfeiture, requiring “clear and convincing evidence” that the property to be seized is connected to a crime, compared to the current, much looser standard or a “preponderance of the evidence.” It’s still not the same “beyond a reasonable doubt” threshold to get a conviction, but it’s nevertheless an improvement.

The bill would also make sure that people subjected to federal forfeitures would receive appointed counsel if they need it. And it would reduce the profit motive to engage in forfeiture by directing the money seized in this way to the Treasury’s General Fund, to be distributed by Congress rather than be sent directly to law enforcement agencies.

“The federal government has made it far too easy for government agencies to take and profit from the property of those who have not been convicted of a crime,” Paul said in a prepared statement. “The FAIR Act will uphold the Fifth Amendment and ensure government agencies no longer profit from taking American citizens’ property without due process. It will guard against abuse while maintaining the ability of courts to order the surrender of proceeds of crime.”

Paul attempted to get this bill passed back in 2014, but it languished at the Senate Judiciary Committee. Rep. Tim Walberg (R–Mich.) has sponsored the House version, which has attracted co-sponsors from both major parties, but it has also been stuck in committee since May 2019.

This time Paul says he’ll be attempting to attach the FAIR Act as an amendment to any police reform bill the Senate might consider. Unfortunately, it’s not clear that the Senate will actually be considering any of them. Senate Democrats refused to support a Republican-sponsored bill organized by Sen. Tim Scott (R–S.C.) because it didn’t go far enough for them. Meanwhile, the bill Democrats pushed through the House last night included a provision that would strip officers of qualified immunity, an idea that Senate Republicans don’t want to consider.

So ultimately there may not be anything for Paul to actually attach the FAIR Act to. We’ll have to see.

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Here We Go Again: Trump Wants New Tariffs on Canadian Aluminum

sfphotosfour111336

Just days before a new trade deal among the United States, Canada, and Mexico is set to take effect, the administration is reportedly considering reimposing tariffs on Canadian aluminum that it had dropped in order to negotiate the deal.

Whether or not the 10 percent tariffs become reality again, the incident seems to demonstrate—once more—that foreign nations have little to gain by negotiating trade deals with America while Donald Trump remains in office. As long as America’s trade policy is being directed by tempestuous protectionists, it will be difficult for any foreign leader to trust that the U.S. is negotiating in good faith.

Restarting an unnecessary and counterproductive trade skirmish with a close ally and key trading partner would also demonstrate that the president has learned nothing from more than two years of failed tariff policies.

“Bringing back these tariffs would be like a bad horror movie,” Neil Herrington, a senior vice president at the U.S. Chamber of Commerce, told The New York Times. If they are enacted, Canada will likely retaliate with tariffs on American goods, likely souring any goodwill that might have been generated by the upcoming official launch of the United States–Canada–Mexico Agreement (USMCA).

The Trump administration imposed 10 percent tariffs on nearly all aluminum imports (and 25 percent tariffs on most steel imports) in March 2018 for shallow “national security” reasons. A year later, the White House lifted those tariffs on imports from Canada and Mexico after congressional leaders and foreign officials said this would be a necessary first step to reaching the tripartite trade deal that Trump sought to replace the North American Free Trade Agreement (NAFTA).

Under the terms of the new deal, the United States retains the right to impose tariffs on Canadian aluminum if there is a surge in imports—and that is the justification White House officials appear to be using for this latest tariff threat. As Politico reports, U.S. Trade Representative Robert Lighthizer told Congress last week that the administration was “looking at” a recent increase in aluminum imports from Canada as “something of genuine concern.”

But genuine concern to whom? The Times reports that the push for new tariffs is coming from exactly two domestic companies: Century Aluminum and Magnitude 7 Metals.

Meanwhile, most of the rest of the aluminum manufacturing sector is opposed to the idea. In a letter sent to the White House on Thursday, the heads of 15 companies and trade associations involved in aluminum manufacturing called for Trump to revoke his threat of additional tariffs.

That supposed surge in imports is overblown too. The Aluminum Association, an industry group, said in a statement that imports from Canada are “largely consistent with historical trends in line with historic norms.”

Just like in 2018, tariffs on aluminum imports stand to harm far more American businesses and consumers than they would help—97 percent of American aluminum jobs are in downstream industries where higher costs on imported metal will cause unnecessary economic pain. As always, Americans will be hit with the cost of the tariffs, which are taxes paid by importers, not by foreign manufacturers.

“The last thing that U.S. manufacturers need is for the government to tax an important input like aluminum while these companies are dealing with unprecedented challenges resulting from the COVID-19 pandemic,” the Coalition of American Metal Manufacturers and Users said in a statement. The group noted that U.S. manufacturers have been paying billions of dollars in tariff-related costs for two years, and that they could have used that money to hire workers or make capital investments.

More tariffs on Canadian aluminum make little sense as economic policy. But what about as a political tactic? There, too, it’s unclear what Trump stands to gain by undermining the launch of the USMCA, one of his administration’s signature accomplishments—or by raising taxes on American businesses during an election year.

And if the Trump administration is going to object every time a new trade deal causes more trade to happen, what incentive do other countries have to negotiate for better terms? The whole episode seems to confirm that Trump values the ability to raise barriers to trade more than he wants to lower them, and it exposes the fundamental flaw in his view of trade as a zero-sum game. When more aluminum is bought and sold across the U.S.-Canada border, both countries become more prosperous.

“Tariffs on Canadian aluminum on the eve of the USMCA commencement make no economic or diplomatic sense,” says Dan Ikenson, director of trade studies for the libertarian Cato Institute, “but that makes the move perfectly Trumpian.”

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A Quarter Of All Personal Income In The US Now Comes From The Government

A Quarter Of All Personal Income In The US Now Comes From The Government

Tyler Durden

Fri, 06/26/2020 – 14:25

Following today’s release of the latest Personal Income and Spending data, Wall Street was predictably focused on the changes in these two key series, which showed a record jump in personal spending (to be expected one month after the savings rate in the US hit a whopping 32% annualized), and a record drop in personal income (as government benefits and stimulus checks slowed substantially).

But while the change in the headline data was indeed notable, what was far more remarkable was less followed data showing just how reliant on the US government the population has become.

We are referring, of course, to Personal Current Transfer payments which are essentially government sourced income such as unemployment and emergency benefits, welfare checks, and so on. In May, this number was $5.3 trillion annualized, following the record $6.4 trillion hit last month when the US government activated the money helicopters to avoid a total collapse of the US economy.

Eve more striking, is that as of May when total Personal Income was just shy of $20 trillion annualized, the government is now responsible for over a quarter of all income.

Putting that number in perspective, in the 1950s and 1960s, transfer payment were around 7%. This number rose in the low teens starting in the mid-1970s (or right after the Nixon Shock ended Bretton-Woods and closed the gold window). The number then jumped again after the financial crisis, spiking to the high teens.

And now, the coronavirus has officially sent this number into the mid-20% range, after hitting a record high 31% in April.

And that’s how creeping banana republic socialism comes at you: first slowly, then fast.

So for all those who claim that the Fed is now (and has been for the past decade) subsidizing the 1%, that’s true, but with every passing month, the government is also funding the daily life of an ever greater portion of America’s poorest social segments.

Who ends up paying for both?

Why the middle class of course, where the dollar debasement on one side, and the insane debt accumulation on the other, mean that millions of Americans content to work 9-5, pay their taxes, and generally keep their mouth shut as others are burning everything down and tearing down statues, are now doomed.

The “good” news? As we reported last November, the US middle class won’t have to suffer this pain for much longer, because while the US has one one of the highest median incomes in the entire world, with only three countries boasting a higher income, it is who gets to collect this money that is the major problem, because as the chart also shows, with just a 50% share of the population in middle-income households, the US is now in the same category as such “banana republics” as Turkey, China and, drumroll, Russia.

What is just as stunning: according to the OECD, more than half of the countries in question have a more vibrant middle class than the US.

So the next time someone abuses the popular phrase  “they hate us for our [fill in the blank]”, perhaps it’s time to counter that “they” may not “hate” us at all, but rather are making fun of what has slowly but surely become the world’s biggest banana republic?

And as we concluded last year, “it has not Russia, nor China, nor any other enemy, foreign or domestic, to blame… except for one: the Federal Reserve Bank of the United States.”

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The Secret Is Out: “The Fed Is Busted”

The Secret Is Out: “The Fed Is Busted”

Tyler Durden

Fri, 06/26/2020 – 14:04

Authored by Sven Henrich via NorthmanTrader.com,

First they dismiss you as a conspiracy theorist then they join you. The secret is out, the Fed is busted: Central banks have distorted asset prices far above the economy.

I’ve been harping about the market cap to GDP ratio for a while and even called the Fed’s asset price distortion operation a direct threat to the economy.

Now it appears the IMF agrees:

This disconnect between markets and the real economy raises the risk of another correction in risk asset prices should investor risk appetite fade, posing a threat to the recovery”

Posing a threat to the recovery. This was precisely my point on CNBC Fast Money last week:

The Fed is the danger. None of what we are seeing here is normal nor healthy as seen in market cap to GDP:

And be clear: Everything is about the Fed. It’s gotten so bad that a broad sense of resignation is making itself felt. Wall Street analysts are reduced to cite nothing but the Fed and further stimulus to justify a buy stocks narrative. Everything is so distorted that the very tenants of capitalism are crumbling.

Tim Seymour acknowledged as much last night: Capitalism is dead:

The very notion of price discovery is reduced to a central bank command order operation. Ever more ready to intervene at an ever more frantic pace, fearful of any downside in markets.

Just take the month of June. Two corrective moves in June and both seeing markets bounce back on what? The Fed coming to the rescue:

I keep asking how desperate they are behind the curtain.

One can’t help but wonder if we are approaching a moment of singularity:

For all the bullish narratives out there nobody can hide from a very self evident fact: Markets peaked on June 8th. It was the same day I asked the Crash 2 question. People mostly think of a crash as a fast event, but that’s not necessarily so. February/March was a crash because it happened so fast. But 2000 was a crash and it took 2 years to play out.

Not everything happens in a day, week or month.

And so I want to highlight some charts that suggest something more sinister may be in play than currently recognized.

Markets did peak on June 8th and the island reversal patterns we discussed in Straight Talk #6 remain in place:

$DJIA:

$NYSE:

$IWM:

All of them peaked on June 8th.

Including $SPX and the $VIX bottomed that day and have broken out since, the pattern busted to the upside:

All except one index who’s new record headlines made these market peaks fade into the background: The almighty Nasdaq managing to hit all time highs on a negative divergence hitting a key trend line before rejecting.

And the market cap concentration of the Nasdaq hiding the most striking fact: Equal weight remains below the December 2018 lows also peaking in June:

Hence I call all this still a bear market.

A bear market that hides in the details hidden beneath and asset prices distorted by the Fed that also can’t hide from this truth:

This market remains about control. It can’t maintain asset price levels this historically disconnected from the economy without artificial intervention expanding. Reduce it by a sliver and asset prices drop.

So far the Fed has succeeded in its mission to save markets from pain commensurate with the crisis unfolding, but it is killing capitalism itself in the process.

Now desperately intervening in one form or another on every down day the Fed soon will run out things to do and buy and market participants having chased nothing but the Fed put have greatly aided and abetted this historic distortion:

I’ve called this a battle for control between fundamental reality on the ground and artificial liquidity injections.

Everything we’re seeing are vertical distortions that are non sustainable:

But worse than vertical they are not changing reality on the ground. They are just masking it.

No bull market without central bank intervention has now been proven beyond a reasonable doubt. The Fed is busted and Wall Street exposed to be nothing but a suckling at the Fed’s liquidity chest.

Rallies still occur when the Fed intervenes. But despite two interventions in June prices now remain below the June 8th peak. The Fed and markets now have to prove they can exceed above these prices or potentially face the point of singularity: No bull market even with central bank intervention. If they can’t, then this bear market will come out of hiding.

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$266,325 Lamborghini Totaled 20 Minutes After It Leaves The Showroom

$266,325 Lamborghini Totaled 20 Minutes After It Leaves The Showroom

Tyler Durden

Fri, 06/26/2020 – 13:45

We hope they had insurance.

Because little did the driver of a Lamborghini Huracan Spyder know that just 20 minutes after they would leave the showroom with their supercar, it would be scattered across a highway in West Yorkshire, U.K., totaled and in pieces.

That was the case after the “brand new” car wound up stopped on a highway in West Yorkshire after experiencing mechanical failure. While waiting for assistance and broken down, the car was slammed into from behind by an “innocent motorist” on the same highway, according to CNBC

The accident took place on Wednesday and left the Italian-made car in a wrecked heap of metal. Even the West Yorkshire Police Roads Policing Unit had to cringe a bit on Twitter before sharing photographs of the wreck.

“It’s only a car,” they wrote in jest on Twitter, saying the Lamborghini was just “20 minutes old”. They used the hashtag “#CouldHaveCried” in their Tweet. 

According to the BBC, the driver of the van that hit the car was suffering from head injuries, though they were not described as serious. The driver of the Lamborghini has not been identified.

As a result of the accident, portions of the West Yorkshire Highway had to be closed down. 

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Here We Go Again: Trump Wants New Tariffs on Canadian Aluminum

sfphotosfour111336

Just days before a new trade deal among the United States, Canada, and Mexico is set to take effect, the administration is reportedly considering reimposing tariffs on Canadian aluminum that it had dropped in order to negotiate the deal.

Whether or not the 10 percent tariffs become reality again, the incident seems to demonstrate—once more—that foreign nations have little to gain by negotiating trade deals with America while Donald Trump remains in office. As long as America’s trade policy is being directed by tempestuous protectionists, it will be difficult for any foreign leader to trust that the U.S. is negotiating in good faith.

Restarting an unnecessary and counterproductive trade skirmish with a close ally and key trading partner would also demonstrate that the president has learned nothing from more than two years of failed tariff policies.

“Bringing back these tariffs would be like a bad horror movie,” Neil Herrington, a senior vice president at the U.S. Chamber of Commerce, told The New York Times. If they are enacted, Canada will likely retaliate with tariffs on American goods, likely souring any goodwill that might have been generated by the upcoming official launch of the United States–Canada–Mexico Agreement (USMCA).

The Trump administration imposed 10 percent tariffs on nearly all aluminum imports (and 25 percent tariffs on most steel imports) in March 2018 for shallow “national security” reasons. A year later, the White House lifted those tariffs on imports from Canada and Mexico after congressional leaders and foreign officials said this would be a necessary first step to reaching the tripartite trade deal that Trump sought to replace the North American Free Trade Agreement (NAFTA).

Under the terms of the new deal, the United States retains the right to impose tariffs on Canadian aluminum if there is a surge in imports—and that is the justification White House officials appear to be using for this latest tariff threat. As Politico reports, U.S. Trade Representative Robert Lighthizer told Congress last week that the administration was “looking at” a recent increase in aluminum imports from Canada as “something of genuine concern.”

But genuine concern to whom? The Times reports that the push for new tariffs is coming from exactly two domestic companies: Century Aluminum and Magnitude 7 Metals.

Meanwhile, most of the rest of the aluminum manufacturing sector is opposed to the idea. In a letter sent to the White House on Thursday, the heads of 15 companies and trade associations involved in aluminum manufacturing called for Trump to revoke his threat of additional tariffs.

That supposed surge in imports is overblown too. The Aluminum Association, an industry group, said in a statement that imports from Canada are “largely consistent with historical trends in line with historic norms.”

Just like in 2018, tariffs on aluminum imports stand to harm far more American businesses and consumers than they would help—97 percent of American aluminum jobs are in downstream industries where higher costs on imported metal will cause unnecessary economic pain. As always, Americans will be hit with the cost of the tariffs, which are taxes paid by importers, not by foreign manufacturers.

“The last thing that U.S. manufacturers need is for the government to tax an important input like aluminum while these companies are dealing with unprecedented challenges resulting from the COVID-19 pandemic,” the Coalition of American Metal Manufacturers and Users said in a statement. The group noted that U.S. manufacturers have been paying billions of dollars in tariff-related costs for two years, and that they could have used that money to hire workers or make capital investments.

More tariffs on Canadian aluminum make little sense as economic policy. But what about as a political tactic? There, too, it’s unclear what Trump stands to gain by undermining the launch of the USMCA, one of his administration’s signature accomplishments—or by raising taxes on American businesses during an election year.

And if the Trump administration is going to object every time a new trade deal causes more trade to happen, what incentive do other countries have to negotiate for better terms? The whole episode seems to confirm that Trump values the ability to raise barriers to trade more than he wants to lower them, and it exposes the fundamental flaw in his view of trade as a zero-sum game. When more aluminum is bought and sold across the U.S.-Canada border, both countries become more prosperous.

“Tariffs on Canadian aluminum on the eve of the USMCA commencement make no economic or diplomatic sense,” says Dan Ikenson, director of trade studies for the libertarian Cato Institute, “but that makes the move perfectly Trumpian.”

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