A Year Ago, the Media Mangled the Covington Catholic Story. What Happened Next Was Even Worse.

On the weekend of January 18, 2019, a short video appeared on Twitter that purported to show a group of Catholic high school boys—one young man, Nicholas Sandmann, in particular—harassing a Native American elder named Nathan Phillips on the steps of the Lincoln Memorial.

One year later, the media’s reckless mishandling of the story stands as an important warning against the kind of agenda-driven, outrage-mongering clickbait that unfortunately thrives in the world of online journalism.

But no less noteworthy was the news cycle that followed the initial flawed coverage, which featured a host of ideologically-motivated partisans doubling down on their initial assumption, digging for new information to justify it, and reassuring themselves that they were right all along. Sandmann and his MAGA hat-wearing friends had identified themselves as members of Team Trump, and thus the national shaming they endured was deserved, this thinking went. Indeed, those who had defended the boys by disputing some aspects of the encounter—including me, in an article for Reason that changed many people’s minds about what had happened—were engaged in “gaslighting“: trying to make people think that something they saw hadn’t really happened.

Sandmann’s subsequent lawsuits have kept the Covington-sympathetic public focused on several of the outlets that misreported the initial story: CNN, The Washington Post, and others. Indeed, these publications certainly deserve criticism, independent of the merits of the individual lawsuits. But these outlets’ Covington-related sins pale in comparison to those who continued to malign the teens long after the additional video footage was available.

It’s important to recall that the mainstream media’s textbook rush-to-judgment about the Covington teens relied on two key pieces of faulty evidence. The first was the misleading video clip, which did not contain important context about what had happened immediately before the encounter between Sandmann and Phillips.

The second was Phillips’ brazenly inaccurate statements to the press: He claimed that he had intervened to protect the third group, the Black Hebrew Israelites, from the “predatory” boys, even though the boys were not threatening anyone. He also claimed he had heard a “build the wall” chant, even though no evidence of this has emerged in any of the additional footage. Phillips, it turned out, was a false witness: an on-the-ground source whose information seemed credible, but wasn’t. (In fact, Phillips is a charlatan with a long history of allowing the media to misrepresent him as a Vietnam War veteran, even though he never served abroad or saw combat.)

Since journalism in the modern era moves at a rapid pace, irrespective of the need to double- and triple-check facts, these two pieces of evidence were sufficient to launch dozens of stories in mainstream press that essentially indicted Covington’s students as racists. These stories employed some cautious language—allegedly, seemingly, etc.—and attributed the stronger statements to Phillips, which provided a veneer of objectivity, even though readers were given little reason to think there might be more to the story.

A truly discerning reader would have wondered why a trivial encounter that involved no one of significance and resulted in zero injuries or property damage was worthy of so much coverage at all. But no matter: The actions of Sandmann and his friends, as described by the media, generated apoplectic denunciation by conservatives, liberals, Catholics, celebrities, politicians, and virtually everyone else. Even ideological allies of the boys, who had come to Washington, D.C. to attend the anti-abortion March for Life rally, were quick to condemn them.

In hindsight, the slanted nature of the coverage is almost comical. The Detroit Free Press described the video as depicting “Phillips peacefully drumming and singing, while surrounded by a hostile crowd” and suggested that this “illustrates the nation’s political and racial tensions.” The Daily Beast‘s story was filed under “AWFUL” and described the video as “disturbing.” Its first several paragraphs quote directly from Phillips. NPR asserted that the boys had mocked the Native American man. In story after story, news outlets claimed the Covington kids had shouted “build the wall.” Again, the sole source of this claim was Phillips.

The news stories, at least, were edited; Twitter is not. Thus the reaction on social media was even more unhinged. Reza Aslan, a scholar and television pundit on CNN, tweeted that Sandmann had a “punchable” face. His CNN colleague Bakari Sellers agreed. BuzzFeed‘s Anne Petersen tweeted that Sandmann’s face reminded her of Brett Kavanaugh’s—and this wasn’t intended as a compliment.Vulture writer Erik Abriss tweeted that he wanted the kids and their parents to die. Kathy Griffin said the high schoolers ought to be doxxed. As a USA Today retrospective noted, “comedian Patton Oswalt called the students in the video ‘bland, frightened, forgettable kids who’ll grow up to be bland, frightened, forgotten adult wastes.’…Writer Michael Green, referring to Sandmann’s apparent smirking at the Native American man, wrote: ‘A face like that never changes. This image will define his life. No one need ever forgive him.’…Huffington Post reporter Christopher Mathias explicitly compared the students to violent segregationists.”

Within 48 hours, the truth had emerged. A longer video, which showed the Covington boys’ prior harassment at the hands of the Black Hebrew Israelites, made it clear that the kids had not directed racist invectives at Phillips’ crowd—they were cheering in order to drown out the Black Hebrew Israelites. Phillips then entered the teens’ midst, drumming and chanting at them. Some thought he was joining their cheer, a small few made inappropriate tomahawk gestures, while others seemed confused or even wary—correctly wary, since Phillips and his entourage had not come in good faith.

I wrote about the additional footage, and, over time, many commentators backpedaled. The mainstream media did as well. Case in point: The New York Times went from “Viral Video Shows Boys in ‘Make America Great Again’ Hats Surrounding Native Elder,” to “Fuller Picture Emerges of Viral Video of Native American Man and Catholic Students.”

But less well remembered than the mainstream media’s belated mea culpa was the absurd effort to re-legitimize the initial narrative.

On the next day, January 21, the New York Daily News published a contemptible hit piece attributed to its sports staff titled: “SEE IT: Covington Catholic High students in blackface at past basketball game.” The first sentence read: “This won’t help Nick Sandmann’s case,” as if the story was some sort of indictment of him. In fact, it had nothing to do with him, or any of his classmates at the Lincoln Memorial. The “blackface” incident was from a Covington basketball game years before, in which some attendees had painted themselves black to show school spirit. Ill-advised, in today’s rage-charged climate? Sure. An example of racial harassment? Probably not. In either case, it had nothing to do with Sandmann.

Not to be outdone, Ben Kesslen of NBC News published a story the next day with the headline: “Gay valedictorian banned from speaking at Covington graduation ‘not surprised’ by D.C. controversy.” Kesslen’s piece included critical remarks from the gay valedictorian, as well as a local Native American activist group for good measure. The Covington kids “were not blameless,” said the valedictorian. Readers who consumed the article too quickly may have missed that this student hailed from a different Covington school (albeit one in the same diocese), rendering his subjective impression of what may or may not have happened at the Lincoln Memorial fairly useless.

Then there was another video clip—this one just eight seconds long—that was widely cited as evidence that perhaps the Covington boys were up to no good, after all. It allegedly depicted a separate incident near the Lincoln Memorial, involving a group of boys who may or may not be students from Covington. The appear to yell something—perhaps “MAGA”—at a passing girl. It’s not clear what prompted this. It’s not clear if the girl initiated a conversation with the boys. It’s not clear if they meant to harass her. It’s not even clear that these boys are the same ones who encounter Phillips. It’s an eight-second video.

For some reason, Vox‘s Emily Stewart embedded the short clip in her January 24 piece about Covington. This isn’t even the most astonishing failing of the piece: She also uncritically cited Phillips throughout.

“Phillips told the Post that even before the confrontation, he and other Native American activists had issues with the students during the day,” wrote Stewart. “And it wasn’t just him and the Hebrew Israelites—a video surfaced on Twitter purporting to show the Covington boys harassing a group of girls as they walked by.”

Stewart’s piece is shockingly devoid of pushback, failing to note that Phillips’ account was misleading—even though the piece was written four days after his narrative had fallen apart. She made note of my piece, and a few others from those in the Fox News orbit, but her bolded points were “We’re probably never going to know exactly what happened on the Lincoln Memorial steps” and “These kids still don’t look great.”

On the latter point, she linked to a piece by Slate‘s Ruth Graham, who wrote, “There’s no mistaking the core dynamics of the encounter: Sandmann smugly grins in Phillips’s face and declines to step backward, and he’s backed by dozens of boisterous teens who are jeering and mocking the much smaller group of Native marchers.”

In a previous piece, she had referred to Sandmann’s face as “punchable and untouchable.” Her new piece contained no apology—indeed, she hardly changed her mind about him at all.

“The new facts about this small encounter this weekend in Washington are important, and worth clarifying,” wrote Graham. “But they don’t change the larger story, the one that caused so many people to react so viscerally to the narrative’s first, and simpler, draft.”

The most obnoxious entry in this series was penned by Deadspin‘s Laura Wagner, who actually attempted to shame those who had changed their mind about the Covington kids in the face of new evidence. “Nothing about the video showing the offensive language of Black Israelites changes how upsetting it was to see the Covington students, and Sandmann in particular, stare at Phillips with such contempt,” wrote Wagner. “I don’t see how you could watch this and think otherwise unless you’re willing to gaslight yourself, and others, in the service of granting undeserved sympathy to the privileged.”

That’s right—people who were sorry for making a snap judgment and condemning a teenager for not smiling the right way while caught in a confusing moment with a bad-faith interloper were “granting undeserved sympathy to the privileged.” (I responded to Wagner’s piece shortly after it was first published.)

One year after the Covington debacle, it’s actually the gratuitous cruelty of the Laura Wagners and Ruth Grahams that sticks out to me as worthy of ongoing criticism—far more than the significantly flawed but at least summarily retracted news articles by the likes of Washington Post and CNN. Covington is a story about a viral outrage-addicted media succumbing to a bad impulse and make horrible mistakes. But as the better-known news outlets continue to garner the lion’s share of the opprobrium, it’s important to remember that there are plenty of commentary writers who continue to think—wrongfully, and shamefully—that the media had it basically right the first time.

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A Year Ago, the Media Mangled the Covington Catholic Story. What Happened Next Was Even Worse.

On the weekend of January 18, 2019, a short video appeared on Twitter that purported to show a group of Catholic high school boys—one young man, Nicholas Sandmann, in particular—harassing a Native American elder named Nathan Phillips on the steps of the Lincoln Memorial.

One year later, the media’s reckless mishandling of the story stands as an important warning against the kind of agenda-driven, outrage-mongering clickbait that unfortunately thrives in the world of online journalism.

But no less noteworthy was the news cycle that followed the initial flawed coverage, which featured a host of ideologically-motivated partisans doubling down on their initial assumption, digging for new information to justify it, and reassuring themselves that they were right all along. Sandmann and his MAGA hat-wearing friends had identified themselves as members of Team Trump, and thus the national shaming they endured was deserved, this thinking went. Indeed, those who had defended the boys by disputing some aspects of the encounter—including me, in an article for Reason that changed many people’s minds about what had happened—were engaged in “gaslighting“: trying to make people think that something they saw hadn’t really happened.

Sandmann’s subsequent lawsuits have kept the Covington-sympathetic public focused on several of the outlets that misreported the initial story: CNN, The Washington Post, and others. Indeed, these publications certainly deserve criticism, independent of the merits of the individual lawsuits. But these outlets’ Covington-related sins pale in comparison to those who continued to malign the teens long after the additional video footage was available.

It’s important to recall that the mainstream media’s textbook rush-to-judgment about the Covington teens relied on two key pieces of faulty evidence. The first was the misleading video clip, which did not contain important context about what had happened immediately before the encounter between Sandmann and Phillips.

The second was Phillips’ brazenly inaccurate statements to the press: He claimed that he had intervened to protect the third group, the Black Hebrew Israelites, from the “predatory” boys, even though the boys were not threatening anyone. He also claimed he had heard a “build the wall” chant, even though no evidence of this has emerged in any of the additional footage. Phillips, it turned out, was a false witness: an on-the-ground source whose information seemed credible, but wasn’t. (In fact, Phillips is a charlatan with a long history of allowing the media to misrepresent him as a Vietnam War veteran, even though he never served abroad or saw combat.)

Since journalism in the modern era moves at a rapid pace, irrespective of the need to double- and triple-check facts, these two pieces of evidence were sufficient to launch dozens of stories in mainstream press that essentially indicted Covington’s students as racists. These stories employed some cautious language—allegedly, seemingly, etc.—and attributed the stronger statements to Phillips, which provided a veneer of objectivity, even though readers were given little reason to think there might be more to the story.

A truly discerning reader would have wondered why a trivial encounter that involved no one of significance and resulted in zero injuries or property damage was worthy of so much coverage at all. But no matter: The actions of Sandmann and his friends, as described by the media, generated apoplectic denunciation by conservatives, liberals, Catholics, celebrities, politicians, and virtually everyone else. Even ideological allies of the boys, who had come to Washington, D.C. to attend the anti-abortion March for Life rally, were quick to condemn them.

In hindsight, the slanted nature of the coverage is almost comical. The Detroit Free Press described the video as depicting “Phillips peacefully drumming and singing, while surrounded by a hostile crowd” and suggested that this “illustrates the nation’s political and racial tensions.” The Daily Beast‘s story was filed under “AWFUL” and described the video as “disturbing.” Its first several paragraphs quote directly from Phillips. NPR asserted that the boys had mocked the Native American man. In story after story, news outlets claimed the Covington kids had shouted “build the wall.” Again, the sole source of this claim was Phillips.

The news stories, at least, were edited; Twitter is not. Thus the reaction on social media was even more unhinged. Reza Aslan, a scholar and television pundit on CNN, tweeted that Sandmann had a “punchable” face. His CNN colleague Bakari Sellers agreed. BuzzFeed‘s Anne Petersen tweeted that Sandmann’s face reminded her of Brett Kavanaugh’s—and this wasn’t intended as a compliment.Vulture writer Erik Abriss tweeted that he wanted the kids and their parents to die. Kathy Griffin said the high schoolers ought to be doxxed. As a USA Today retrospective noted, “comedian Patton Oswalt called the students in the video ‘bland, frightened, forgettable kids who’ll grow up to be bland, frightened, forgotten adult wastes.’…Writer Michael Green, referring to Sandmann’s apparent smirking at the Native American man, wrote: ‘A face like that never changes. This image will define his life. No one need ever forgive him.’…Huffington Post reporter Christopher Mathias explicitly compared the students to violent segregationists.”

Within 48 hours, the truth had emerged. A longer video, which showed the Covington boys’ prior harassment at the hands of the Black Hebrew Israelites, made it clear that the kids had not directed racist invectives at Phillips’ crowd—they were cheering in order to drown out the Black Hebrew Israelites. Phillips then entered the teens’ midst, drumming and chanting at them. Some thought he was joining their cheer, a small few made inappropriate tomahawk gestures, while others seemed confused or even wary—correctly wary, since Phillips and his entourage had not come in good faith.

I wrote about the additional footage, and, over time, many commentators backpedaled. The mainstream media did as well. Case in point: The New York Times went from “Viral Video Shows Boys in ‘Make America Great Again’ Hats Surrounding Native Elder,” to “Fuller Picture Emerges of Viral Video of Native American Man and Catholic Students.”

But less well remembered than the mainstream media’s belated mea culpa was the absurd effort to re-legitimize the initial narrative.

On the next day, January 21, the New York Daily News published a contemptible hit piece attributed to its sports staff titled: “SEE IT: Covington Catholic High students in blackface at past basketball game.” The first sentence read: “This won’t help Nick Sandmann’s case,” as if the story was some sort of indictment of him. In fact, it had nothing to do with him, or any of his classmates at the Lincoln Memorial. The “blackface” incident was from a Covington basketball game years before, in which some attendees had painted themselves black to show school spirit. Ill-advised, in today’s rage-charged climate? Sure. An example of racial harassment? Probably not. In either case, it had nothing to do with Sandmann.

Not to be outdone, Ben Kesslen of NBC News published a story the next day with the headline: “Gay valedictorian banned from speaking at Covington graduation ‘not surprised’ by D.C. controversy.” Kesslen’s piece included critical remarks from the gay valedictorian, as well as a local Native American activist group for good measure. The Covington kids “were not blameless,” said the valedictorian. Readers who consumed the article too quickly may have missed that this student hailed from a different Covington school (albeit one in the same diocese), rendering his subjective impression of what may or may not have happened at the Lincoln Memorial fairly useless.

Then there was another video clip—this one just eight seconds long—that was widely cited as evidence that perhaps the Covington boys were up to no good, after all. It allegedly depicted a separate incident near the Lincoln Memorial, involving a group of boys who may or may not be students from Covington. The appear to yell something—perhaps “MAGA”—at a passing girl. It’s not clear what prompted this. It’s not clear if the girl initiated a conversation with the boys. It’s not clear if they meant to harass her. It’s not even clear that these boys are the same ones who encounter Phillips. It’s an eight-second video.

For some reason, Vox‘s Emily Stewart embedded the short clip in her January 24 piece about Covington. This isn’t even the most astonishing failing of the piece: She also uncritically cited Phillips throughout.

“Phillips told the Post that even before the confrontation, he and other Native American activists had issues with the students during the day,” wrote Stewart. “And it wasn’t just him and the Hebrew Israelites—a video surfaced on Twitter purporting to show the Covington boys harassing a group of girls as they walked by.”

Stewart’s piece is shockingly devoid of pushback, failing to note that Phillips’ account was misleading—even though the piece was written four days after his narrative had fallen apart. She made note of my piece, and a few others from those in the Fox News orbit, but her bolded points were “We’re probably never going to know exactly what happened on the Lincoln Memorial steps” and “These kids still don’t look great.”

On the latter point, she linked to a piece by Slate‘s Ruth Graham, who wrote, “There’s no mistaking the core dynamics of the encounter: Sandmann smugly grins in Phillips’s face and declines to step backward, and he’s backed by dozens of boisterous teens who are jeering and mocking the much smaller group of Native marchers.”

In a previous piece, she had referred to Sandmann’s face as “punchable and untouchable.” Her new piece contained no apology—indeed, she hardly changed her mind about him at all.

“The new facts about this small encounter this weekend in Washington are important, and worth clarifying,” wrote Graham. “But they don’t change the larger story, the one that caused so many people to react so viscerally to the narrative’s first, and simpler, draft.”

The most obnoxious entry in this series was penned by Deadspin‘s Laura Wagner, who actually attempted to shame those who had changed their mind about the Covington kids in the face of new evidence. “Nothing about the video showing the offensive language of Black Israelites changes how upsetting it was to see the Covington students, and Sandmann in particular, stare at Phillips with such contempt,” wrote Wagner. “I don’t see how you could watch this and think otherwise unless you’re willing to gaslight yourself, and others, in the service of granting undeserved sympathy to the privileged.”

That’s right—people who were sorry for making a snap judgment and condemning a teenager for not smiling the right way while caught in a confusing moment with a bad-faith interloper were “granting undeserved sympathy to the privileged.” (I responded to Wagner’s piece shortly after it was first published.)

One year after the Covington debacle, it’s actually the gratuitous cruelty of the Laura Wagners and Ruth Grahams that sticks out to me as worthy of ongoing criticism—far more than the significantly flawed but at least summarily retracted news articles by the likes of Washington Post and CNN. Covington is a story about a viral outrage-addicted media succumbing to a bad impulse and make horrible mistakes. But as the better-known news outlets continue to garner the lion’s share of the opprobrium, it’s important to remember that there are plenty of commentary writers who continue to think—wrongfully, and shamefully—that the media had it basically right the first time.

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‘Climate Puppet’ Greta Thunberg Shames Davos Attendees For ‘Doing Nothing’

‘Climate Puppet’ Greta Thunberg Shames Davos Attendees For ‘Doing Nothing’

Greta Thunberg did exactly as expected at Davos – delivering her trademark public shaming to the world’s most rich and powerful (non-Chinese) leaders gathered on the icy slopes of the Swiss Alps.

“Our house is still on fire,” the 17-year-old told the World Economic Forum. “Your inaction is fueling the flames by the hour.”

“I wonder, what will you tell your children was the reason to fail and leave them facing the climate chaos you knowingly brought upon them?” she added, delivering a verbal flagellation to elite climate sinners that want to repent – as long as they can brand themselves as ‘green’ and make hand-over-fist in the process.

Thunberg is pushing immediate, radical change in order to achieve ‘net zero’ carbon emissions by 2050, along with the planting of 1 trillion trees to offset pollution, in order to keep temperatures from rising beyond 1.5 degrees from preindustrial levels.

She and a group of young climate activists have called on private investors and governments to immediately halt exploration for fossil fuels, to stop funding their production, to end taxpayer subsidies for the industry and to fully divest their existing stakes in the sector. –NYT

“Let’s be clear. We don’t need a ‘low carbon economy.’ We don’t need to ‘lower emissions,’” Thunberg told the audience. “Our emissions have to stop.“

And while the private jet, virtue-signaling billionaires and their entourages might be embracing their shaming, it appears the general public isn’t exactly buying Greta’s shtick.

As Raúl Ilargi Meijer of The Automatic Earth notes:

“You see, Greta, the message the rich get is not that they must listen to you, it’s that others do listen who control a lot of money, individuals, governments, and so there will be money to be made if they just promote your ideas enough. You’ve been co-opted and pre-empted, so to speak. And what are you going to do now? You’re in cahoots, whether you like it or not, with the likes of Exxon, Shell, and Mercedes.

The oil companies have long rebranded themselves as energy companies (this started when BP’s logo turned green years ago) and invested billions in solar and wind turbines. The carmakers are betting big on electric vehicles. And this is supposed to achieve your goal of carbon neutrality? Let’s get real, shall we?

You’re way out of your league. You’re up against people who represent decades if not centuries-old interests, as well as -aspiring- politicians in every Parliament and even city counsel who know full well their careers will be nipped in the bud if they don’t go along with those interests. And then there’s 10,000 Middle East sheiks.

Davos is not your stage, Greta, and it’s not the stage for the people who believe in you. You’re betraying them by going there, because you have no control over the stage. Still, the other side really want you to think it is, the oil companies do, US and EU governments do, Mercedes and Toyota and Ford, do. Because you are their meal ticket.

They want you to believe that the problem that keeps you up at night can be solved with electric cars and solar panels and wind turbines. Because they have invested heavily in companies that produce all of those.

And now there’s a trillion here and a trillion there, because people listen to you. No government, no chosen official or appointed civil servant at any level, can anymore be forgiven for not budgeting heavily for climate change effects, even if they are ignorant about what those are.“


Tyler Durden

Tue, 01/21/2020 – 09:55

Tags
Environment

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Guggenheim’s Minerd Warns Global Central Banks Are Fueling A Ponzi Market

Guggenheim’s Minerd Warns Global Central Banks Are Fueling A Ponzi Market

Authored by Scott Minerd, Global CIO Guggenheim Investments,

One of the topics that I am focused on in Davos is the deterioration in the quality of the corporate bond markets. 

The disturbing trend is that despite the rally in risk assets in the prior year, the number of defaults rose by approximately 50 percent, according to data compiled by J.P. Morgan. Additionally, the number of distressed exchanges increased by 400 percent.

This correlates well with our observation that the number of idiosyncratic defaults has been increasing. Ultimately, markets will need to reprice for this rising risk with increased bond spreads relative to Treasury securities. However, that day of reckoning when spreads rise is being held off by the flood of central bank liquidity and international investors fleeing negative yields overseas. 

And let’s not forget downgrade risk of BBBs: today 50 percent of the investment-grade market is rated BBB, and in 2007 it was 35 percent. More specifically, about 8 percent of the investment-grade market was BBB- in 2007 and today it is 15 percent. It has more than quintupled in size outstanding, from $800 billion to $3.3 trillion. We expect 15–20 percent of BBBs to get downgraded to high yield in the next downgrade wave: This would equate to $500–660 billion and be the largest fallen angel volume on record—and would also swamp the high yield market.

Ultimately, we will reach a tipping point when investors will awaken to the rising tide of defaults and downgrades. The timing is hard to predict but this reminds me a lot of the lead-up to the 2001 and 2002 recession. 

The prolonged period of tight credit spreads experienced in the late 1990s lulled investors into unwittingly increasing risk at a time they should have been upgrading their portfolios.

This brings to mind the famous observation by economist Hyman Minsky, who stated that stability is inherently destabilizing. That is to say that long periods of relative stability in risk assets causes investors to keep upping the risk during a long period of calm.

Ultimately, this leads to what he called a Ponzi Market where the only reason investors keep adding to risk is the fear that prices will be higher tomorrow (or in the case of bonds, yields will be lower tomorrow).

Daniel Kahneman observed this behavior in his own work, when he identified that investors’ fear of missing an opportunity induces them to buy when they should be selling. 

Even though the recession clearly has been put off until 2021 and perhaps 2022, in the lead-up to the 2001 recession, credit deterioration started to be evidenced three years earlier in 1998 as defaults and credit spreads were rising. 

This would sound like good news for yield starved investors and I would agree.

But patience will lead to bigger opportunities for disciplined investors who don’t wander off into exotic asset classes or chase current returns.


Tyler Durden

Tue, 01/21/2020 – 09:35

Tags
Business Finance

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Former Interpol Chief Sentenced To 13.5 Years In A Chinese Prison

Former Interpol Chief Sentenced To 13.5 Years In A Chinese Prison

Roughly 16 months ago, Meng Hongwei, the Chinese President of international crime-fighting agency Interpol, disappeared after returning to China and being detained by authorities.

Now, Meng, who also served as a senior justice official in China, has been sentenced to more than 13 years in a Chinese prison for graft, in a case that the Financial Times said raises “concerns about Beijing’s influence on global organizations.”

Meng, the first Chinese official to lead Interpol, held his position for two years from November 2016 until he disappeared in October 2018.  Days after his disappearance, his family in Lyon reported him missing. But after Chinese officials confirmed that Meng had been arrested on corruption charges, he was apparently coerced to hand in his resignation to Interpol.

At the time of Meng’s disappearance, Human Rights Watch said his case “raised concerns at global institutions where high-level Chinese officials already have been installed in powerful positions” because “any government official is vulnerable” to a graft probe in China.

During his trial at a court in Tianjin city, not far from Beijing, prosecutors said Meng had abused his power for personal gain while helping to run China’s public security agency. Meng was accused of accepting more than 14 million yuan ( about $2 million) in bribes and kickbacks.

Although the verdict didn’t mention Meng’s involvement with Interpol, it did claim that he also used his standing abroad to “seek improper profits.”

According to the Chinese court, Meng accepted his judgment and would not appeal the case. Though we doubt any appeal would get very far in a legal system which is under total control of Communist Party judges.

Meanwhile, back in Lyon, Meng’s wife, Grace Meng, has been granted political asylum. She’s launched a lawsuit against Interpol, accusing the organization of leaving her husband twisting in the wind by not standing up to Beijing and demanding his return. Beijing insists that the case was an “internal matter” and was handled according to Chinese law.


Tyler Durden

Tue, 01/21/2020 – 09:15

Tags
Law Crime
Politics

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No ‘Insurrection’ or Violence at Virginia Gun Rights Rally

Peaceful demonstration against increased gun regulation in Richmond. Virginia Governor Ralph Northam’s emergency declaration proves as silly as critics said it would, after thousands of Second Amendment supporters showed up in Richmond without starting trouble.

Before the statehouse rally on Monday—organized by the Virginia Civil Defense League—Northam warned that the event would likely bring out-of-town demonstrators who had “as their purpose not peaceful assembly but violence, rioting, and insurrection.” His emergency declaration (covering last Friday at 5 p.m. through today at 5 p.m.) meant that no guns could be brought on Capitol grounds and also allocated special police resources to the area.

But the rally “passed without incident,” as Northam put it in a Monday afternoon tweet.

Naturally, Northam took credit for keeping the peace with his security-theater shenanigans, saying that his teams had “successfully de-escalated what could have been a volatile situation.”

And yet Virginia Civil Defense League regularly organizes “lobby day” rallies at the Virginia statehouse (as J.D. Tuccille pointed out at Reason yesterday) and such events have gone down without violent incident as well, despite a lack of gubernatorial fussing.

“Unbelievable,” wrote Washington Examiner Executive Editor Philip Klein in response to Northam’s de-escalation tweet. “This guy exploited stereotypes of gun owners to create hysteria about violent mobs and then when it turns out law abiding gun owners are law abiding, he takes credit for lack of violence.”

FOLLOWUPS

Impeachment update: House “impeachment managers” in the Senate and President Donald Trump’s team will each get “24 hours divided over two days for their opening arguments in the Senate’s impeachment trial,” CNN reports, after obtaining a copy of Senate Majority Leader Mitch McConnell’s organizing resolution for the process. This represents “a break from the impeachment trial of President Bill Clinton, when the 24 hours were split over a four-day period,” notes CNN. General impeachment proceedings in the Senate start at 1 p.m. today.

Iran admits to causing Ukrainian plane crash that killed 176 people. “Investigators…discovered that two Tor-M1 missiles…were fired at the aircraft,” said Iran’s Civil Aviation Organization in a report on initial findings, released yesterday, about the January 8 crash.

FREE MINDS

Ugh: Joe Biden continues to campaign against Section 230, the federal communications law that built the internet as we know it. “Section 230 should be revoked, immediately,” said Biden in an interview with The New York Times, published Friday. “For Zuckerberg and other platforms.”

As Eric Boehm pointed out on Friday, “Biden and Facebook have been feuding for months.”

When the Times interviewer responded that Section 230 is “pretty foundational” for “the modern internet,” Biden said “exactly right” before launching into a buzzword salad dressed with random rambling associations:

It should be revoked because [Facebook] is not merely an internet company. It is propagating falsehoods they know to be false, and we should be setting standards not unlike the Europeans are doing relative to privacy. You guys still have editors. I’m sitting with them. Not a joke. There is no editorial impact at all on Facebook. None. None whatsoever. It’s irresponsible. It’s totally irresponsible.

For more on what Section 230 really is and does, watch this:

FREE MARKETS

We don’t need to ban (nicotine or THC) vaping, we just need to build better devices, writes Diane Nelson, a postdoctoral fellow in chemical engineering at Carnegie Mellon University:

The knee-jerk reaction by some states has been to pull e-cigarettes and vapes off the market. Even the federal government has suggested it might push for a ban on some vaping and e-cigarette related products. But these products have been shown to be effective at helping smokers quit — more effective, in fact, than any other nicotine-replacement therapy on the market, including nicotine patches and nicotine gum.

We don’t need to ban vaping. What we need to do is the research needed to build a better vape.

ELECTION 2020

Yikes:

QUICK HITS

“More than 40 U.S. states could allow some form of legal marijuana by the end of 2020, including deep red Mississippi and South Dakota,” reports Politico.

Good news:

from Latest – Reason.com https://ift.tt/2RDsnVx
via IFTTT

No ‘Insurrection’ or Violence at Virginia Gun Rights Rally

Peaceful demonstration against increased gun regulation in Richmond. Virginia Governor Ralph Northam’s emergency declaration proves as silly as critics said it would, after thousands of Second Amendment supporters showed up in Richmond without starting trouble.

Before the statehouse rally on Monday—organized by the Virginia Civil Defense League—Northam warned that the event would likely bring out-of-town demonstrators who had “as their purpose not peaceful assembly but violence, rioting, and insurrection.” His emergency declaration (covering last Friday at 5 p.m. through today at 5 p.m.) meant that no guns could be brought on Capitol grounds and also allocated special police resources to the area.

But the rally “passed without incident,” as Northam put it in a Monday afternoon tweet.

Naturally, Northam took credit for keeping the peace with his security-theater shenanigans, saying that his teams had “successfully de-escalated what could have been a volatile situation.”

And yet Virginia Civil Defense League regularly organizes “lobby day” rallies at the Virginia statehouse (as J.D. Tuccille pointed out at Reason yesterday) and such events have gone down without violent incident as well, despite a lack of gubernatorial fussing.

“Unbelievable,” wrote Washington Examiner Executive Editor Philip Klein in response to Northam’s de-escalation tweet. “This guy exploited stereotypes of gun owners to create hysteria about violent mobs and then when it turns out law abiding gun owners are law abiding, he takes credit for lack of violence.”

FOLLOWUPS

Impeachment update: House “impeachment managers” in the Senate and President Donald Trump’s team will each get “24 hours divided over two days for their opening arguments in the Senate’s impeachment trial,” CNN reports, after obtaining a copy of Senate Majority Leader Mitch McConnell’s organizing resolution for the process. This represents “a break from the impeachment trial of President Bill Clinton, when the 24 hours were split over a four-day period,” notes CNN. General impeachment proceedings in the Senate start at 1 p.m. today.

Iran admits to causing Ukrainian plane crash that killed 176 people. “Investigators…discovered that two Tor-M1 missiles…were fired at the aircraft,” said Iran’s Civil Aviation Organization in a report on initial findings, released yesterday, about the January 8 crash.

FREE MINDS

Ugh: Joe Biden continues to campaign against Section 230, the federal communications law that built the internet as we know it. “Section 230 should be revoked, immediately,” said Biden in an interview with The New York Times, published Friday. “For Zuckerberg and other platforms.”

As Eric Boehm pointed out on Friday, “Biden and Facebook have been feuding for months.”

When the Times interviewer responded that Section 230 is “pretty foundational” for “the modern internet,” Biden said “exactly right” before launching into a buzzword salad dressed with random rambling associations:

It should be revoked because [Facebook] is not merely an internet company. It is propagating falsehoods they know to be false, and we should be setting standards not unlike the Europeans are doing relative to privacy. You guys still have editors. I’m sitting with them. Not a joke. There is no editorial impact at all on Facebook. None. None whatsoever. It’s irresponsible. It’s totally irresponsible.

For more on what Section 230 really is and does, watch this:

FREE MARKETS

We don’t need to ban (nicotine or THC) vaping, we just need to build better devices, writes Diane Nelson, a postdoctoral fellow in chemical engineering at Carnegie Mellon University:

The knee-jerk reaction by some states has been to pull e-cigarettes and vapes off the market. Even the federal government has suggested it might push for a ban on some vaping and e-cigarette related products. But these products have been shown to be effective at helping smokers quit — more effective, in fact, than any other nicotine-replacement therapy on the market, including nicotine patches and nicotine gum.

We don’t need to ban vaping. What we need to do is the research needed to build a better vape.

ELECTION 2020

Yikes:

QUICK HITS

“More than 40 U.S. states could allow some form of legal marijuana by the end of 2020, including deep red Mississippi and South Dakota,” reports Politico.

Good news:

from Latest – Reason.com https://ift.tt/2RDsnVx
via IFTTT

Is Mass Civil Disobedience Our Future?

Is Mass Civil Disobedience Our Future?

Authored by Patrick Buchanan via The Unz Review,

On the holiday set aside in 2020 to honor Martin Luther King, the premier advocate of nonviolent Gandhian civil disobedience, thousands of gun owners gathered in Richmond to petition peacefully for their rights.

King had preached that there was a higher law that justified breaking existing laws that mandated racial segregation.

When Rosa Parks refused to give up her seat in the front of the bus in Montgomery, when Freedom Riders integrated bus terminals, when black students sat at segregated lunch counters in North Carolina, they challenged state law in the name of what they said was a higher law.

And Virginia gun owners believe their moral obligation to protect families, friends and themselves in a violent society justifies their right to keep and carry firearms, no matter what the Virginia legislature says.

Americans have a long history of breaching laws in the name of a higher law or God-given rights.

The patriots of Boston gathered an arsenal at Concord in defiance of the British. To protest a tea tax imposed by parliament, they dressed as American Indians and threw shiploads of imported tea into Boston Harbor.

Shays’ Rebellion in Massachusetts, to protest debt collections in 1786-87, and the 1794 Whiskey Rebellion in western Pennsylvania, to protest a tax, both had to be crushed with force.

Abolitionists supported the violation of fugitive slave laws, the enforcement of which Lincoln endorsed in his first inaugural as a national necessity to restore and preserve the Union.

A constitutional prohibition of the sale of beer, wine and liquor in the U.S., following the enactment of the 18th Amendment, led to massive civil disobedience in the Roaring ’20s, before it was repealed in 1933 by the 21st Amendment.

During Vietnam, burning draft cards was a regular feature of anti-war rallies.

Historians may describe the racial riots of the 1960s — Harlem, Watts, Newark, Detroit, and 100 U.S. cities including Washington, D.C., after King’s assassination — as popular uprisings, but many required National Guard and federal troops to stop the looting, shooting and arson.

By the late 1960s, LBJ, who had passed the Civil Rights Act of 1964 and the Voting Rights Act of 1965, could not visit a college campus without a violent demonstration.

This week, Washington hosts the 46th annual March for Life to commemorate the 60 million unborn killed in the abortion mills of America since Roe v. Wade in 1973.

In conservative states, restrictions imposed on abortion facilities have put some out of business. The legislators and governors who have done so believe the right to life trumps the Warren Court ruling in Roe v. Wade.

Perhaps the greatest manifestation of civil disobedience today is the illegal presence of between 12 million and 20 million immigrants who broke into our country or are breaking the law by being here after their visas expired.

Their collaborators are the business owners who hire them and the public officials who refuse to treat them as lawbreakers.

“Sanctuary cities” have been created where local and state authorities refuse to cooperate with immigration enforcement.

Now, towns, cities and counties are creating “Second Amendment sanctuaries,” where laws restricting gun rights will not be enforced.

If state and local police, themselves gun owners, stand with those who defy the new state laws on guns, who enforces the new laws?

The Virginia Senate has begun to move bills requiring background checks for gun purchasers including red flag laws to disarm individuals deemed at risk to themselves or others, and bills granting permission for locales to restrict the carrying of arms in government buildings and confining the purchases of handguns to one a month.

There are other restrictions the Democratic legislature in Richmond and governor are ready to move, including restricting the number of bullets in clips and magazines and halting sales of rifles like the AR-15.

Gun owners see these as the onset of an all-out assault on gun rights.

For a republic to endure, there has to be a common consent on the rule of law and what constitutes a good society. But these seem to be at issue again in America.

Is abortion the killing of an innocent human being? Do Americans have a constitutional and human right to keep and carry firearms to protect themselves and their loved ones?

Who is and who is not a rightful resident of our national home?

Do illegal migrants have a right to come here and stay here? Or do their numbers imperil our national identity and existence as “one nation and one people”?

Violent crime was greater in America in the early 1990s. Urban riots were far more common in the 1960s. And there is nothing today comparable to the bloodletting of the 1861-65 War Between the States.

Still, Americans seem to disagree with each other more and to dislike each other more than they have in the lifetime of most of us.

One wonders: How does it all stay together? And for how long?


Tyler Durden

Tue, 01/21/2020 – 08:55

Tags
War Conflict
Politics

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“Reminds Me Of 1999”: Paul Tudor Jones Warns This Is The “Craziest Policy Mix In History”

“Reminds Me Of 1999”: Paul Tudor Jones Warns This Is The “Craziest Policy Mix In History”

While President Trump was touting the economy during his speech at Davos on Tuesday — Billionaire investor Paul Tudor Jones sat down with CNBC’s Squawk Box at the conference and warned: “We are in the craziest monetary fiscal mix in history. It’s so explosive. It defines imagination.”

Jones went onto say, “it reminds me a lot of the early ’99. Early ’99 we had 1.6% PCE, 2.3% CPI. We have the exact same metrics today. The difference is fed funds rate 4.75% today 1.62%, and back then we had budget surplus and we’ve got a 5% budget deficit … Crazy times.”

“Crazy times” indeed – if Tudor Jones is right, the market is in the final blow-off stage as ‘Not QE’ propels markets to new highs. It will only be when the Federal Reserve winds down its unprecedented monetary accommodations that will trigger a top in the market (just as it did in 1999 after supplying liquidity to tamp down Y2K anxieties).

As we’ve discussed before, the deviation of the stock market from corporate profitability is the widest since 1999 – it seems that Jones’ warning should grab the attention of bulls as the economy continues to stagnate.

And in Jones’ view – this will end very badly.


Tyler Durden

Tue, 01/21/2020 – 08:37

Tags
Business Finance
Human Interest

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Extreme Deviations & Eventual Outcomes

Extreme Deviations & Eventual Outcomes

Authored by Lance Roberts via RealInvestmentAdvice.com,

The good news is that with the market closed yesterday, the extreme extensions of the market did not get any more extreme. Also, it doesn’t change our analysis much from this past weekend’s missive either:

“This week, the market pushed those deviations even further as the S&P 500 has now pushed into 3-standard deviation territory above the 200-WEEK moving average.”

“There have only been a few points over the last 25-years where such deviations from the long-term mean were prevalent. In every case, the extensions were met by a decline, sometimes mild, sometimes much more extreme.”

As we discussed, there is a potential the current “momentum” push, due to the Fed’s ongoing “NotQE,” which could drive markets higher in the short-term.

“With the Federal Reserve’s ongoing ‘Not QE,’  it is entirely possible the markets could continue their upward momentum towards S&P 3500, and Dow 30,000. Clearly, the ‘cat is out of the bag’ if CNBC even realizes it’s the Fed:

‘On Oct. 11, the central bank announced it would begin purchasing $60 billion of Treasury bills a month to keep control over short-term rates. The magnitude of the purchases resembles the quantitative easing program the Fed conducted during and after the financial crisis.’

‘The increase in the Fed’s balance sheet has been in near lockstep with the stock market’s climb. The balance sheet has expanded 10% since October, while the S&P 500 shot up 12%, including notching its best fourth quarter since 2013.’”

There is much debate between the Fed, and their supporters, and virtually everyone else, about the implications of the Fed’s actions. The “Heisenberg Report” did a good job summing up our view on the issue:

“Neel Kashkari’s take is a bit different, as is Mary Daly’s. The whole ‘debate’ is somewhat silly. Both sides are being disingenuous. It’s not ‘QE.’ It probably will be, eventually, but for right now, the Fed isn’t buying coupons. And irrespective of any knock-on effects for risk assets, the overarching intent is to avoid another short-term funding squeeze by reestablishing an abundant reserves regime with a buffer. That, as opposed to a goal of compressing risk premia, driving investors out the risk curve and down the quality ladder to foster the wealth effect.

On the other hand, the idea that the distinction matters is a bit dubious. Regardless of what the overarching goal is, liquidity provision is liquidity provision and there’s a signaling effect too. Call it a ‘chart crime’ if you like, but I’d be more inclined to say that ‘it is what it is’”

He’s correct, and as he notes, even those sophisticated enough to be “short” something, are probably “net long” currently.

This is precisely our positioning, and why we discussed “taking profits” last week. While we are certainly not opposed to “shorting the market” to hedge our portfolio risk, the continued flood of liquidity by the Fed makes shorting a challenging proposition in the short-term. Therefore, our best option to reduce risk was to simply “ease back on the gas” by reducing position weights in the most egregiously “overbought” areas.

Most likely, this will be an exercise we repeat as long as the Fed is continuing to push liquidity into the market.

The Higher We Go…

At present, there is seemingly little to stop the markets from pressing higher, particularly once the push hits “rarefied air.” Weak fundamental and economic data is readily dismissed “hopes” those “soft spots,” will soon strengthen to catch up with price. More often than not, it is usually the opposite, which occurs.

The chart below shows the S&P 500 index versus its 200-WEEK moving average and the historical percentage deviation between the two. The chart assumes the market will continue to push higher through the end of the “seasonally strong period,” and attain the 3500 level by June. 

Historically, when the market becomes deviated from its 4-year (200-week) moving average by 20% or more, as it is currently, corrections have tended to follow. Some corrections were minor, such as the “Crash of 1987”,  the “LTCM crisis” in 1988, or the 2015-2016 “Taper Tantrum.” Other corrections from such deviations were much more severe such as the “Crash of 1974”, the “Dot.com Bust”, or the “Financial Crisis” of 2008.

The same deviation mismatch can be seen in the 60-month (5-year) moving average. At 3500, the S&P 500 will achieve a deviation only seen 3-times prior, which preceded the “Crash of 1987″, the “Dot.com Bust,” and the 2015-2016 “Taper Tantrum.”

The defining aspect of whether corrections were “mild” or “severe” really came down to whether the valuations were expanding from “cheap to expensive,” or if they were “expensive heading towards cheap.” At 30x trailing reported 10-year average earnings, and price-to-sales above 2x (the highest level on record for the S&P 500), it is hard to suggest that valuations are cheap. 

Our favorite way to look at the data is with our QUARTERLY analysis that combines both valuation, relative strength, and deviations into one chart.

There is little to suggest that investors who are extremely “long equity risk” in portfolios currently won’t eventually suffer a more severe “mean reverting event.” 

While valuations and long-term deviations suggest problems for the markets ahead, such can remain the case for quite sometime which always leads investors to believe “this time is different.” Because of the time required for long-term data to revert, monthly and quarterly data is more useful as a guide to manage allocations and longer-term exposures. In other words, this data is not useful as a short-term market-timing tool.

However, even the short-term data, has now reached more extreme technical levels which DO suggest caution. The chart below is our RIAPRO (Try 30-Days Risk Free) Technical Composite which combines short-term relative strength, momentum, and deviation into one indicator.

At 98.48, corrections from short-term market peaks tend not to be far off. In January of 2018, as the “tax cut” bill took effect, stocks were soaring in January pushing the technical composite to a similar level. It is worth remembering, the market dropped 10% heading into the first two weeks of February.

Currently, the market feels much like what we saw in early 2018, and a similar correction is likely in the short-term. However, longer-term it will be a reduction in corporate “share repurchases,” which will be a bigger factor in the sustainability of the market’s advance.

Clearly, the Federal Reserve is doing whatever it can to keep markets stable. With economic growth already fragile, a more serious correction in prices would collapse consumer confidence, lead to rising unemployment, and foster the onset of a full-blown recession. Such would be problematic for the Fed to counter, particularly if the trillions of dollars at play in leveraged hedge funds begin to lock up.

However, I agree with Wolf Richter’s recent comment.

In my decades of looking at the stock market, there has never been a better setup. Exuberance is pandemic and sky-high. And even after today’s dip, the S&P 500 is up nearly 29% for the year, and the Nasdaq 35%, despite lackluster growth in the global economy, where many of the S&P 500 companies are getting the majority of their revenues.

Mega-weight in the indices, Apple, is a good example: shares soared 84% in the year, though its revenues ticked up only 2%. This is not a growth story. This is an exuberance story where nothing that happens in reality – such as lacking revenue growth – matters, as we’re now told by enthusiastic crowds everywhere.

He’s right. The only period in history where we have seen a similar “set-up” was in 1999.

While we do realize this time “IS” different, we also know the “outcomes” will ultimately be the same. This is why we continue to look for opportunities to reduce risk, raise exposures to cash, and are ready to respond to market changes as they occur.

Yes, we are underperforming the market this year, but (to adapt a phrase from Popeye), we will gladly pay that price today for a “hamburger” on Tuesday.


Tyler Durden

Tue, 01/21/2020 – 08:16

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Business Finance

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