The reason for that bias is that political leanings of academic criminologists are liberal. Liberal criminologists outnumber their conservative counterparts by a ratio of 30-to-1.
Ideology almost perfectly predicts the position of criminologists on issues from gun control to capital punishment too harsh sentencing. Liberal criminologists march in step for gun control, oppose punitive prison sentences and are vehemently against the death penalty.
In 2012, the National Academy of Sciences commissioned a study on the growth of incarceration. It showed that from 1928 until 1960, crime rates rose slowly each year. After the 1960s, crime rates exploded to unprecedented levels of violence until the 1990s. Prior to 1980, only 40% of individuals arrested for murder were sentenced to prison and those that were served an average of five years. In 1981, less than 10% of those arrested for sexual assault was sentenced to prison. Those who were sentenced served an average of 3.4 years. Liberal criminologists probably believe that light sentencing for murderers and rapists is just.
If criminologists have the guts to even talk about a race-crime connection, it’s behind closed doors and in guarded language. Any discussion about race and crime sets one up for accusations of racism and that can mean the destruction of one’s professional career. Wright and DeLisi say that liberal criminologists avoid discussing even explicit racist examples of black-on-white crime such as flash-mob assaults, “polar bear hunting” and the “knockout game.”
These are cases where black youth seek out white people to physically attack.
According to Wright and DeLisi:
“Disproportionate black involvement in violent crime represents the elephant in the room amid the current controversy over policing in the United States. Homicide numbers from the Federal Bureau of Investigation Supplementary Homicide Reports, 1976-2005 indicate that young African-American males account for homicide victims at levels that are ten to 20 times greater than their proportion of the population and account for homicide offenders at levels that are 15 to 35 times greater than their proportion of the population.
The black-white gap in armed-robbery offending has historically ranged between ten to one and 15 to one. For all racial groups, violent crime is strongly intraracial, and the intraracial dynamic is most pronounced among blacks.”
That means the primary victims of black crime are other black people. In more than 90% of homicides, for example, both the victim and the perpetrator are black.
Between 1991 and 2017, the nationwide violent crime rate fell from 758 cases to 382 cases per 100,000 people. Despite the evidence that higher incarceration reduces crime rates, many criminologists argue that “mass incarceration” has actually “took minority men out of their neighborhoods, stripped them of voting rights, destabilized families, and sapped already-paltry economic resources from struggling communities.”
Wright and DeLisi say that:
“Such claims could seem plausible only if one believes — contrary to evidence and common sense — that career criminals contribute positively to their neighborhoods, enjoy stable and functional families, vote, and work. What they did, in reality, was to prey on their neighbors.”
Crime is a major problem for the black community. But in addition to incarcerating those who prey on the black community, what can be done? The answer is easy, though implementation poses a challenge. We should re-adopt the values and practices of our ancestors. Black families of yesteryear were mainly two-parent and stable, even during slavery. Black people didn’t tolerate property destruction. There were few school fights. Disrespect and assaults on teachers were virtually unknown. These are now all too common. The strong character of black people is responsible for the great progress made from emancipation to today. Find a 70-, 80- or 90-year-old black person and ask him whether today’s conduct among black youth would have been tolerated yesteryear. I guarantee you that no will be their answer.
via ZeroHedge News https://ift.tt/2ZN4fBP Tyler Durden
Stanford law professor John Donohue claims to have discovered evidence that the 1994 federal ban on so-called assault weapons “really did work,” because mass shootings and the deaths caused by them declined while the law was in effect, then rose afterward. But the methodology Donohue used is suspiciously selective, and his results do not show what he thinks they do.
“Public mass shootings—which we defined as incidents in which a gunman killed at least six people in public—dropped during the decade of the federal ban,” Donohue and Stanford student Theodora Boulouta write in a New York Times op-ed piece published yesterday. “Yet, in the 15 years since the ban ended, the trajectory of gun massacres has been sharply upward, largely tracking the growth in ownership of military-style weapons and high-capacity magazines.”
Donohue and Boulouta relied on the Mother Jones database of mass shootings, which includes “indiscriminate rampages in public places resulting in four or more victims killed by the attacker.” Yet they chose to focus on cases with six or more fatalities, for no obvious reason except that it exaggerates the changes they attribute to the “assault weapon” ban that expired in 2004.
Based on the definition used by Mother Jones, there were 16 mass shootings, involving 125 fatalities, during the 10 years before the “assault weapon” ban took effect on September 13, 2004. During the 10 years when the law was in effect, there were 15 mass shootings with 99 fatalities. That represents a slight decline in a rare kind of crime, and it is by no means clear that the ban had anything to do with it.
As Donohue and Boulouta note, violent crime in general was falling throughout that period. Furthermore, the law targeted guns based on “military-style” features, such as folding stocks, pistol grips, and threaded barrels, that had little or nothing to do with their lethality in the hands of mass shooters, and it left more than 1.5 million “assault weapons” in circulation.
Limiting their analysis to shootings in which six or more victims were killed, Donohue and Boulouta report that the “federal assault weapon ban in effect from September 1994 through 2004 was associated with a 25 percent drop in gun massacres (from eight to six) and a 40 percent drop in fatalities (from 81 to 49).” Those are bigger drops than the Mother Jones database shows, but only because Donohue and Boulouta arbitrarily excluded mass shootings with five or fewer victims.
Having magnified the decrease associated with the “assault weapon” ban through careful case selection, Donohue and Boulouta suggest the change must be due to the law. “This decline is plausible because assault weapons are semiautomatic firearms designed for rapid fire and combat use, and large-capacity magazines increase the number of rounds that can be fired without reloading,” they say. “While the gun lobby prevented the ban from being as effective as it could have been and saddled the law with a 10-year sunset provision, the ban did impede the easy access to the type of lethal weaponry that those intent on mass killing have readily available in most of the country today.”
Contrary to Donohue and Boulouta’s implication, neither rate of fire nor the capacity to accept detachable magazines distinguished the guns covered by the 1994 law from the guns that remained legal. In any case, the numbers do not suggest that the ban had much of an impact on the weapons used by mass shooters. By my count, guns covered by the ban were used in five out of 16 mass shootings (31 percent) in the decade before it was enacted, compared to four out of 15 (27 percent) while it was in effect. Even leaving aside the functional similarity between banned and legal guns, it seems clear that the slight change in the mix of weapons cannot explain the 21 percent drop in fatalities, especially since the two deadliest pre-ban mass shootings, accounting for nearly a third of the fatalities during that period, were carried out with handguns.
What about after the ban expired? In the subsequent decade, there was indeed a big increase in mass shootings and fatalities caused by them. Based on the Mother Jones tally, there were 36 mass shootings with nearly 300 fatalities. Is that because “assault weapons” were easier to get? Again, the numbers suggest otherwise. Guns that would have been covered by the ban were used in seven of those attacks, or 19 percent. In other words, they were less commonly used in mass shootings after the ban than they were during it.
Donohue and Boulouta claim that the expiration of the federal ban “permitt[ed] the gun industry to flood the market with increasingly powerful weapons that allow for faster killing.” But so-called assault weapons are no “faster” or more “powerful” than functionally similar guns that do not fall into that arbitrary category. They fire the same ammunition at the same rate with the same muzzle velocity. The causal mechanism that Donohue and Boulouta have in mind is therefore rather mysterious, since banning “assault weapons,” even it made all of them disappear overnight, would leave mass shooters with plenty of equally deadly alternatives.
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Last night’s “Climate Town Hall” on CNN wasn’t just long (seven hours!). It was deeply revealing about how Democratic presidential candidates think about government’s power to regulate virtually all aspects of human behavior and how they approach policy and cultural change.
The Democratic contenders have laid out plans costing anywhere from about $1 trillion (Pete Buttigieg) to $16 trillion (Bernie Sanders) in direct federal spending on climate change over the next decade. About half of the candidates have endorsed the Green New Deal proposed by Rep. Alexandria Ocasio-Cortez (D–N.Y.) and Sen. Ed Markey (D–Mass.), which could cost as much as $90 trillion to implement. As important as any specific policy or position outlined last night were the general attitudes that were widely shared by the participants.
A number likened fighting climate change to the effort to win World War II, a metaphor that perhaps says more about their comfort with regimenting society than the speakers intended. During World War II, all industrial production was overseen by the federal government, food and fuel were rationed, and civil liberties were sharply curtailed in the interest of defeating the Axis powers.
In a related way, the candidates all bought into the apocalyptic premises of the questioners, who took for granted the idea that the world is likely to end in a decade or so unless massive, transformational change takes place. The resulting conversations were thus long on the need for action and short on the need to build consensus or to fully assess the costs and benefits of particular actions.
Here are four memorable moments involving the leading candidates:
1. Joe Biden: Here’s Blood in Your Eye.
Whatever the former vice president and Delaware senator actually said last night will forever be a footnote to the fact that his left eye apparently filled with blood during his time on the stage, leading Hot Air‘s Allahpundit to suggest that “individual Biden body parts are now generating their own gaffes.”
The bloody eye won’t help a campaign that has been plagued with questions about the 76-year-old’s mental and physical health, but the less we remember about what Biden actually says on the campaign trail, the better. Indeed, the nation’s only fully satisfied Amtrak rider had barely started talking when he announced, “We can take millions of vehicles off the roads if we have high-speed rail.” That’s a callback to President Barack Obama’s high-speed rail plans, which went nowhere even when the Democrats controlled the White House and Congress. There’s simply no reason to believe that high-speed rail will ever be successfully built in America (California alone has spent a decade and billions of federal, state, and local tax dollars while making effectively zero progress on its high-speed rail project)—and even if it does get built, there’s little reason to expect it to yield meaningful environmental benefits.
2. Elizabeth Warren: “We only have 11 years to cut our emissions in half.” So let’s…stop using nuclear power?
Sen. Elizabeth Warren (D–Mass.) famously has a plan for everything. While the former Harvard Law School prof sidestepped questions about whether the government would continue to dictate what light bulbs Americans can buy (so that’s a yes), she stressed that we’ve “got, what, 11 years, maybe, to reach a point where we’ve cut our emissions in half.” In suggesting that the world will end in 2030 unless we dramatically reduce greenhouse gas emissions, Warren is invoking Ocasio-Cortez’s stunning misreading of a 2018 Intergovernmental Panel on Climate Change report. Far from declaring that the planet would soon be fried, the report theorizes that, as Reason‘s Ronald Bailey writes, “if humanity does nothing whatsoever to abate greenhouse gas emissions, the worst-case scenario is that global GDP in 2100 would be 8.2 percent lower than it would otherwise be.”
Whether or not such a projection is reliable, Warren clearly believes in the 2030 apocalypse. That makes the stance she took last night against nuclear power puzzling, since nuclear is much cleaner than fossil fuels or coal. “In my administration, we won’t be building new nuclear plants,” she said. “We will start weaning ourselves off nuclear and replace it with renewables.” Which is to say, she’s in line with many progressives (including Bernie Sanders, Ed Markey, and AOC), who say simultaneously that the world is ending but nuclear power should remain off the table, even as they push “solar panels, [which] produce 300 times more waste for the amount of energy created than do nuclear plants,” according to environmentalist researcher Michael Shellenberger. Staring down a supposed existential threat, Warren and her anti-nuke allies still have principles, or something.
Sen. Elizabeth Warren: "The fossil fuel industry… want[s] to be able to stir up a lot of controversy around lightbulbs, around your straws, and around your cheeseburgers when 70% of the pollution of the carbon that we're throwing into the air comes from 3 industries." pic.twitter.com/DhQXbLJO3P
3. Bernie Sanders: Aggressively fighting the phantom menace of global overpopulation.
A teacher at the town hall said world population was growing beyond the planet’s carrying capacity and asked Bernie Sanders the following:
“Empowering women and educating everyone on the need to curb population growth seems a reasonable campaign to enact. Would you be courageous enough to discuss this issue and make it a key feature of a plan to address climate catastrophe?”
Pro-life right-wingers are hot and bothered over the Vermont senator’s willingness to support taxpayer-supported birth control, including abortions, in his quest to defeat climate change. For those of us who believe in female autonomy and reproductive rights, that’s far less troubling than watching him buy into the idea that global overpopulation is in any way a problem.
As the folks at Our World in Data note, “global population growth reached a peak in 1962 and 1963 with an annual growth rate of 2.2%….For the last half-century we have lived in a world in which the population growth rate has been declining.” The United Nations has changed its projections for population growth; it now even suggests a 27 percent chance that global population will peak and start to decline by 2100. And there’s this:
Demographer Wolfgang Lutz and his colleagues at the International Institute of Applied Systems Analysis (IIASA) believe that the United Nations’ projections are likely to be too high. In their 2018 demographic assessment, IIASA calculates a medium fertility scenario that would see world population peak at 9.8 billion people at around 2080 and fall to 9.5 billion by 2100.
If worries about the world ending by 2030 are overstated, so too are fears of a planet that can’t support its population, especially given the incredible strides we’ve recently made in reducing global poverty and increasing general living standards.
4. Kamala Harris: “I think we should” ban plastic straws.
“Plastic straws are a big thing right now,” said CNN’s Erin Burnett to Kamala Harris. “Do you ban plastic straws?” “I think we should, yes,” replied the California senator, who then proceeded to laugh uneasily as she said paper straws were not very good.
The moral panic about plastic straws exemplifies how discussions of environmental issues go off the rails. As Reason‘s Christian Britschgi revealed in January 2018, the erroneous idea that Americans used 500 million straws a day was based on a school project done in 2011 by a nine-year-old boy in California. America in fact contributes only a small portion of the world’s plastic pollution problem, and straws represent just a tiny fraction of that. And yet by the end of last year, plastic straws were “an endangered species” around the country due to outrage over a made-up number.
But Harris wasn’t simply trash-talking plastic straws. She also spent time attacking the eating of red meat, calling for the end of land sales for oil and gas drilling, and pledging to end fracking, the very technology that helped lower U.S. greenhouse gas emissions to record-low levels.
Democrat presidential candidate Kamala Harris wants to ban plastic straws, says about paper straws: "If you don't gulp it down immediately it starts to bend" pic.twitter.com/cnIddUuj1s
In this bonus episode of the Cyberlaw Podcast, Alex Stamos of Stanford’s Freeman Spogli Institute talks about the Institute’s recent paper on the risk of Chinese social media interference with Taiwan’s upcoming presidential election. It’s a wide-ranging discussion of everything from a century of Chinese history to the reasons why WeChat lost a social media competition in Taiwan to a Japanese company. Along the way, Alex notes that efforts to identify foreign government election interference have been seriously degraded by (what else?) privacy law, mixed with fear of commercial consequences when China is the attacker. If companies make data about foreign government and “inauthentic” users public, the risk of liability under GDPR as well as Chinese retaliation is real, and the benefits go more to the nation as a whole rather than to the companies taking the risk.
During the interview, Alex references a paper co-authored by his colleague, Jennifer Pan, regarding the “50c party.” You can find that paper here. He also mentions his recent op-ed in Lawfare, which you can find here.
As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with @stewartbaker on Twitter. Send your questions, comments, and suggestions for topics or interviewees to CyberlawPodcast@steptoe.com. Remember: If your suggested guest appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!
The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.
from Latest – Reason.com https://ift.tt/2ZHhGr8
via IFTTT
Last night’s “Climate Town Hall” on CNN wasn’t just long (seven hours!). It was deeply revealing about how Democratic presidential candidates think about government’s power to regulate virtually all aspects of human behavior and how they approach policy and cultural change.
The Democratic contenders have laid out plans costing anywhere from about $1 trillion (Pete Buttigieg) to $16 trillion (Bernie Sanders) in direct federal spending on climate change over the next decade. About half of the candidates have endorsed the Green New Deal proposed by Rep. Alexandria Ocasio-Cortez (D–N.Y.) and Sen. Ed Markey (D–Mass.), which could cost as much as $90 trillion to implement. As important as any specific policy or position outlined last night were the general attitudes that were widely shared by the participants.
A number likened fighting climate change to the effort to win World War II, a metaphor that perhaps says more about their comfort with regimenting society than the speakers intended. During World War II, all industrial production was overseen by the federal government, food and fuel were rationed, and civil liberties were sharply curtailed in the interest of defeating the Axis powers.
In a related way, the candidates all bought into the apocalyptic premises of the questioners, who took for granted the idea that the world is likely to end in a decade or so unless massive, transformational change takes place. The resulting conversations were thus long on the need for action and short on the need to build consensus or to fully assess the costs and benefits of particular actions.
Here are four memorable moments involving the leading candidates:
1. Joe Biden: Here’s Blood in Your Eye.
Whatever the former vice president and Delaware senator actually said last night will forever be a footnote to the fact that his left eye apparently filled with blood during his time on the stage, leading Hot Air‘s Allahpundit to suggest that “individual Biden body parts are now generating their own gaffes.”
The bloody eye won’t help a campaign that has been plagued with questions about the 76-year-old’s mental and physical health, but the less we remember about what Biden actually says on the campaign trail, the better. Indeed, the nation’s only fully satisfied Amtrak rider had barely started talking when he announced, “We can take millions of vehicles off the roads if we have high-speed rail.” That’s a callback to President Barack Obama’s high-speed rail plans, which went nowhere even when the Democrats controlled the White House and Congress. There’s simply no reason to believe that high-speed rail will ever be successfully built in America (California alone has spent a decade and billions of federal, state, and local tax dollars while making effectively zero progress on its high-speed rail project)—and even if it does get built, there’s little reason to expect it to yield meaningful environmental benefits.
2. Elizabeth Warren: “We only have 11 years to cut our emissions in half.” So let’s…stop using nuclear power?
Sen. Elizabeth Warren (D–Mass.) famously has a plan for everything. While the former Harvard Law School prof sidestepped questions about whether the government would continue to dictate what light bulbs Americans can buy (so that’s a yes), she stressed that we’ve “got, what, 11 years, maybe, to reach a point where we’ve cut our emissions in half.” In suggesting that the world will end in 2030 unless we dramatically reduce greenhouse gas emissions, Warren is invoking Ocasio-Cortez’s stunning misreading of a 2018 Intergovernmental Panel on Climate Change report. Far from declaring that the planet would soon be fried, the report theorizes that, as Reason‘s Ronald Bailey writes, “if humanity does nothing whatsoever to abate greenhouse gas emissions, the worst-case scenario is that global GDP in 2100 would be 8.2 percent lower than it would otherwise be.”
Whether or not such a projection is reliable, Warren clearly believes in the 2030 apocalypse. That makes the stance she took last night against nuclear power puzzling, since nuclear is much cleaner than fossil fuels or coal. “In my administration, we won’t be building new nuclear plants,” she said. “We will start weaning ourselves off nuclear and replace it with renewables.” Which is to say, she’s in line with many progressives (including Bernie Sanders, Ed Markey, and AOC), who say simultaneously that the world is ending but nuclear power should remain off the table, even as they push “solar panels, [which] produce 300 times more waste for the amount of energy created than do nuclear plants,” according to environmentalist researcher Michael Shellenberger. Staring down a supposed existential threat, Warren and her anti-nuke allies still have principles, or something.
Sen. Elizabeth Warren: "The fossil fuel industry… want[s] to be able to stir up a lot of controversy around lightbulbs, around your straws, and around your cheeseburgers when 70% of the pollution of the carbon that we're throwing into the air comes from 3 industries." pic.twitter.com/DhQXbLJO3P
3. Bernie Sanders: Aggressively fighting the phantom menace of global overpopulation.
A teacher at the town hall said world population was growing beyond the planet’s carrying capacity and asked Bernie Sanders the following:
“Empowering women and educating everyone on the need to curb population growth seems a reasonable campaign to enact. Would you be courageous enough to discuss this issue and make it a key feature of a plan to address climate catastrophe?”
Pro-life right-wingers are hot and bothered over the Vermont senator’s willingness to support taxpayer-supported birth control, including abortions, in his quest to defeat climate change. For those of us who believe in female autonomy and reproductive rights, that’s far less troubling than watching him buy into the idea that global overpopulation is in any way a problem.
As the folks at Our World in Data note, “global population growth reached a peak in 1962 and 1963 with an annual growth rate of 2.2%….For the last half-century we have lived in a world in which the population growth rate has been declining.” The United Nations has changed its projections for population growth; it now even suggests a 27 percent chance that global population will peak and start to decline by 2100. And there’s this:
Demographer Wolfgang Lutz and his colleagues at the International Institute of Applied Systems Analysis (IIASA) believe that the United Nations’ projections are likely to be too high. In their 2018 demographic assessment, IIASA calculates a medium fertility scenario that would see world population peak at 9.8 billion people at around 2080 and fall to 9.5 billion by 2100.
If worries about the world ending by 2030 are overstated, so too are fears of a planet that can’t support its population, especially given the incredible strides we’ve recently made in reducing global poverty and increasing general living standards.
4. Kamala Harris: “I think we should” ban plastic straws.
“Plastic straws are a big thing right now,” said CNN’s Erin Burnett to Kamala Harris. “Do you ban plastic straws?” “I think we should, yes,” replied the California senator, who then proceeded to laugh uneasily as she said paper straws were not very good.
The moral panic about plastic straws exemplifies how discussions of environmental issues go off the rails. As Reason‘s Christian Britschgi revealed in January 2018, the erroneous idea that Americans used 500 million straws a day was based on a school project done in 2011 by a nine-year-old boy in California. America in fact contributes only a small portion of the world’s plastic pollution problem, and straws represent just a tiny fraction of that. And yet by the end of last year, plastic straws were “an endangered species” around the country due to outrage over a made-up number.
But Harris wasn’t simply trash-talking plastic straws. She also spent time attacking the eating of red meat, calling for the end of land sales for oil and gas drilling, and pledging to end fracking, the very technology that helped lower U.S. greenhouse gas emissions to record-low levels.
Democrat presidential candidate Kamala Harris wants to ban plastic straws, says about paper straws: "If you don't gulp it down immediately it starts to bend" pic.twitter.com/cnIddUuj1s
In this bonus episode of the Cyberlaw Podcast, Alex Stamos of Stanford’s Freeman Spogli Institute talks about the Institute’s recent paper on the risk of Chinese social media interference with Taiwan’s upcoming presidential election. It’s a wide-ranging discussion of everything from a century of Chinese history to the reasons why WeChat lost a social media competition in Taiwan to a Japanese company. Along the way, Alex notes that efforts to identify foreign government election interference have been seriously degraded by (what else?) privacy law, mixed with fear of commercial consequences when China is the attacker. If companies make data about foreign government and “inauthentic” users public, the risk of liability under GDPR as well as Chinese retaliation is real, and the benefits go more to the nation as a whole rather than to the companies taking the risk.
During the interview, Alex references a paper co-authored by his colleague, Jennifer Pan, regarding the “50c party.” You can find that paper here. He also mentions his recent op-ed in Lawfare, which you can find here.
As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with @stewartbaker on Twitter. Send your questions, comments, and suggestions for topics or interviewees to CyberlawPodcast@steptoe.com. Remember: If your suggested guest appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!
The views expressed in this podcast are those of the speakers and do not reflect the opinions of the firm.
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Chinese stocks opened dramatically higher but faded into the close of the afternoon session…
Source: Bloomberg
European stocks soared also, led by Germany (trade hopes) on the day…
Source: Bloomberg
German 30Y Yields broke back above 0.00% for the first time in over a month…
Source: Bloomberg
US equity markets were all higher on the day, smashing above Trump tariff tantrum levels…
And as futures show, the bulk of the gains overnight…
Notably, today’s buying extravaganza lifted the S&P back to unchanged since The Fed cut rates in July…
All the majors crossed above key technical levels today (Russell 2000tagged its 200DMA but was unable to hold above it)
Cyclicals dominated as the odds of a China trade deal surged…
Source: Bloomberg
Shorts were dramatically squeezed yet again…
Source: Bloomberg
And then there was Slack which crashed over 10% after cutting guidance but was panic-bid back to unchanged after the open…
Bonds don’t seem to be buying it though…
Source: Bloomberg
Treasury yields surged today with the long-end modestly outperforming (30Y +8bps, 2Y +11bps)…
NOTE – between a record high $74 billion calendar (rate-locks), Fed POMO bid disappearing due to “technical difficulties”, trade-deal hopes, and the better-than-expected ISM services data (despite everything else being weaker)
Source: Bloomberg
Today was among the biggest absolute spikes in 10Y (above 1.50%) and 30Y (above 2.00%) Yields since the election in 2016…
NOTE – after the initial spike, yields rallied back lower.
Source: Bloomberg
The yield curve steepened on the day but 3m10Y remains deeply inverted…
Source: Bloomberg
The dollar ended the day lower, but roundtripped off overnight lows…
Source: Bloomberg
Yuan is higher overnight but well off the highs, notably divergent from US stocks…
Source: Bloomberg
Cryptos were mixed with Altcoins fading but Bitcoin stable…
Source: Bloomberg
Commodities were mixed with copper best, crude pumped-n-dumped, and PMs weak after the PMI data…
Source: Bloomberg
Gold was hit on very heavy volume…
But silver was worse…
Sending Gold/Silver higher for a change…
Source: Bloomberg
Oil pumped and dumped today after inventory data spiked it up to 5-wek highs briefly…
Finally, we should note that while the market has pushed for more and more easing in recent weeks, since The Fed first cut, the macro-economic data has beaten (admittedly low) expectations dramatically…
Source: Bloomberg
via ZeroHedge News https://ift.tt/34sWbKj Tyler Durden
Back in August, we wrote that after decades of waiting, for Albert Edwards vindication was finally here – if only outside the US for now – because as per BofA calculations, average non-USD sovereign yields on $19 trillion in global debt had, as of Monday, turned negative for the first time ever at -3bps.
So now that virtually every rates strategist is rushing to out-“Ice Age” the SocGen strategist (who called the current move in rates years if not decades ago) by forecasting even lower yields (forgetting conveniently that just a year ago consensus called for the 10Y to rise well above 3% by… well, some time now), we reported what man who correctly called the unprecedented move in global yields – which has sent $17 trillion in sovereign debt negative – thinks happens next (for those who missed it, the summary was “There is a lot more to come.“)
Of course, it ain’t easy being a permabear – even when your global “Japanification” thesis, 30 years in the making, has been validated – for the simple reason that there are haters always and everywhere, and for some odd reason Edwards decided that responding to them in his latest letter is a prudent use of his time. In this particular case, Edwards takes umbrage at the criticism of a fellow “financial advisor” who inexplicably, spends more time on CNBC and on twitter than, well, providing financial advice, but that’s Albert’s prerogative (our advice: ignore them).
So instead of diluting Edward’s message with trivial tangents, we focus on several key points, the first of which is why if Edwards got the bond bull market so spectacularly right at a time when virtually everyone remains short bonds…
… has he been wrong on stocks, with his calls to short the equity market, which is also explains the genesis of his “permabear” moniker (alternatively, Edwards is the biggest bond permabull in existence). This is what Edwards said:
… my biggest Ice Age mistake was to assume that the US would be like Japan and that subsequent to the 2008 GFC, US policymakers would find it much harder to manipulate the economic and credit cycles. I thought we would return to normal economic cycles with lengths nearer to 40 months.
And if I was right, perceptions of increased EPS volatility would cause the equity or cyclical risk premium to rise ie the increased volatility of the economic cycle would cause PEs to decline for any given level of bond yield.
However a funny thing happened on the way to normalcy: central banks decided that they need to unleash more central planning that the USSR, and effectively kill the business cycle, so rather than seeing shorter cycles of around 40 months, the US is still enjoying the longest economic cycle in its history of 122 months and counting!
“How wrong can one be?” Edwards asks rhetorically, adding “Yes, I know it is also one of the weakest in history, but thats not the point.”
For I had pencilled in the next US recession as the time when we see the next intensification of the Ice Age (as occurred in Japan), where equity prices and PEs would fall to new lower lows and where new and unprecedented monetary measures would need to be taken in the face of outright deflation. That is why I have been so wrong for so long and that also goes for my bearish view on bonds, articulated in 2011 (see reference to blog criticism, page 3). I had by now expected the helicopters to have already dropped hundreds of trillions of confetti dollars onto the US economy and CPI inflation to have already begun to twitch into life like Frankensteins monster.
Don’t worry Albert: one look at the campaigns of potential socialist US presidents, and it becomes abundantly clear that helicopter money, i.e. MMT, is coming. And once said socialists promise enough free shit, it is only a matter of time before they are elected. After all, everyone likes free shit.
Which brings us to the logical next question: having discussed what next happens to bond yields two weeks ago, Edwards now tackles the question of “what might happen in the next recession?”
Will equity yields continue to grind lower (PEs higher) in line with US bond yields falling into negative territory, and as the printing presses are started up again and running at such a frenzied pace you will be able to hear them from Mars? Or will, as I suspect, a slide into recession again be accompanied by the bursting of credit and asset bubbles and the ensuing recession be as surprisingly deep as the 2008 GFC?
The answer coming from the equity permabear deflationista will hardly be a surprise: he maintains his view that the US equity market will fall to a new low in the next recession as investors witness yet another credit-induced, economic implosion. “And, at the same time as the economy implodes, expect President Trump to explode with rage. Indeed, even before his election I felt it very unlikely that the Fed would be able to maintain its independence if it is the midwife for yet another credit-induced deep recession.”
Oh sure, the Fed will try to fight it, and it will, culminating with the endgame for every central bank – the release of helicopter money in hopes of terminal currency debasement sparking debt hyperinflation. But to the SocGen strategist, that won’t be enough.
Wont [helicopter money] fill the swimming pool and cushion the equity markets descent? Wont an activist Fed, with President Trump screaming with rage in the background, be able to prevent any potential collapse in the equity market? I believe not. Why will the next recession be any different from the last one, which saw equities collapse despite massive monetary stimulus?
As a reminder, yesterday we noted that policy impotence is one of the reasons behind BofA’s contention that policy impotence is why the cycle finally ends in 2020. Edwards agrees:
I would expect renewed rounds of QE, and/or helicopter money, as MMT is embraced as a desperate solution to the next slump. But this liquidity is not guaranteed to flow into equities or indeed any risk asset while the economic downturn is in full force. I use the example of commodity prices after the GFC, which initially behaved just like equities, benefitting massively from QE. Then, as you can see in the chart below, industrial commodities de-coupled from rising equity markets, primarily because the fundamental backdrop deteriorated as the Chinese economy slowed. Ample liquidity cannot be guaranteed to flow into any particular risk asset if its fundamentals turn negative. Liquidity will initially flow into whatever momentum trade is still standing at the time, backed by fundamentals, and that will most likely be government bonds.
But if everyone buys bonds, won’t stocks also be bid? After all, that’s the basis of the Fed model, is it not? Well, here too Edwards has something to say.
The so-called Fed Model (below) was an essential asset allocation reference tool in the 1980s and 1990s. It was thought that this ratio of 10y US bond yield and forward earnings yield (inverse of PE) enjoyed some sort of equilibrium level at 1.0, as for most of that period the ratio oscillated above and below 1.0 (until the Nasdaq/TMT bubble).
We said in 1996 that there was no fundamental reason why there was any mean-reverting properties to this valuation ratio, and that indeed in the Ice Age the ratio would fall lower and lower as equities de-rated versus bonds. And indeed it did, with valuation support at 0.8 prior to 2000 becoming valuation resistance to the upside after the Nasdaq bubble burst. Then we saw another lurch down in the ratio until Fed QE stabilised the situation in 2012. We expect yet another vicious lurch downwards in this ratio during the next recession.
Indeed you see from the chart below that the nominal bond yield/equity yield was not ever stable in the long run if you go back to the 1950s (this chart uses dividend rather than forward earnings yield). The 1982-2000 period was an anomaly in the longer-term context. A fundamentally important Ice Age forecast was that we were going to return to a world where the equity dividend yield would rise above the bond yield and stay above it. It was the 1965-2000 period that I thought was the anomaly. So while market commentators have recently noted that the US 30y bond yield has fallen below the dividend yield I believe that is the natural order.
That said, one thing that the always humble Edwards admits he did not account for, and understandably so, was perpetual QE, i.e., the takeover of markets by central banks, to wit:
My key Ice Age contention was that lower bond yields that had pushed PEs higher during the 1990s (all else equal), would no longer do the same job. In a post-bubble Ice Age world, despite continued falls in bond yields, PEs would decline on a secular basis.
In a nutshell, from a simple discounted cash flow calculation, a more volatile and uncontrollable post-bubble economic cycle would drive the equity (cyclical) risk premium higher (driving PEs lower) and deflationary conditions would drive long-term eps expectations to be more in line with anaemic nominal GDP growth (also driving PEs lower). In the Ice Age the PE compressing force from falling long-term eps expectations and rising cyclical risk premiums would outweigh the PE expanding influence from falling bond yields. That is it in a nutshell.
But experience has shown us that in a post-bubble world a cyclical recovery could lead to a pause or even reversal of the two PE depressing drivers. And the longer the economic recovery continues the more the markets will believe there is a return to Great Moderation normality and the more it can ignore the Ice Age. That is exactly what has happened, aided by QE.
Indeed the chart below shows that US long-term earnings expectations have done exactly what they did during the late 1990s Nasdaq bubble. The echoes of that time are unerringly similar. Belief in this equity market has been centred around the new large technology, growth stocks typified by the large-cap FAANGs (Facebook, Apple, Amazon, Netflix and Alphabet’s Google), rather than TMT generally.
Assuming that Edwards is correct that QE has merely recreated another tech bubble, what happens next then should be obvious: “We will find out in the next recession which of the currently designated growth stocks are simply deep cyclicals masquerading as growth stocks. We just dont know and neither do they! But one thing I know from our experiences in the 2000 Nasdaq collapse: if a company valued as a growth stock on eye-wateringly high multiples gets found out to be a deep-cyclical imposter, that stock collapses as both its earnings and cyclical risk premium get rapidly reappraised.”
And finally, there is the issue of a decade of accumulated non-GAAP gimmickry to catch down to:
Despite the recent downtick, S&P Composite long-term eps expectations are still way out of line with both nominal GDP and particularly whole economy profits growth (see chart below, both 5y trailing to match the 5y projection for long-term eps expectations). In a recession, expect the dotted line in the chart below to lurch down sharply as it did in both the last two recessions (shaded areas). That is when you will see equity prices melt away.
Which brings us back to Edwards’ cataclysmic forecast, that the S&P will tumble below the 666 “generational low” of March 2009. Here is the SocGen strategist’s defense of that extremely controversial claim:
How can we possibly believe that the S&P could fall back below its 666 March 2009 low. Simple: I believe the 12-month forward PE will decline to a new lower low compared to the profits nadirs of 2002 (15.5x) and 2009 (10.5x). At the height of a bear market, during the eye of the storm, the equity market does not trade like an auto stock or a copper stock. It does not go to peak PEs of infinity at the bottom of the earnings cycle. Quite the reverse – the market in its panic goes to trough PEs on close to trough earnings.
Which brings us to the doom and gloom conclusion: how Albert envisions the next recession. In a nutshell, it will be right out of Dante’s inferno:
In the next recession, as the secular forces of the Ice Age thesis combine with the cyclical chaos of another deep GFC-like event, I would expect the S&P 12m forward PE to collapse from a QE inflated 16½x currently to around a 7x trough eps – while forward earnings fall something like 40% to $100/sh, just as they did in the last recession. Add in the impact of a loss of confidence in the Fed (just as there was a loss of confidence in the BoJ and MoF in Japan), and there is a realistic prospect of a decline below the March 2009 666 low. And with that I must stop.
It took about 20 years but Albert Edwards was eventually proven correct in his bond forecast. For the sake of civilization, one can only hope that his equity forecast is wrong.
via ZeroHedge News https://ift.tt/2UyuY4f Tyler Durden
The Democratic presidential candidates subjected Americans to a lengthy town hall event on CNN last night covering climate change, where they discussed a range of plans that will entirely upend the U.S. energy sector.
In the last few months, the candidates have tried to outdo each other as they released ever more aggressive plans on energy and climate change, engaging in an arms race of sorts with trillion-dollar spending plans.
There is still quite a gulf between, say, Vice President Joe Biden’s $1.7 trillion plan and Senator Bernie Sanders’ $16.3 trillion plan and everything in between. There is arguably an even greater ideological difference in the modest carbon tax proposals and R&D clean tech funding from South Bend Mayor Pete Buttigieg, which very much rely on private companies and leave existing energy markets largely untouched, and the more dramatic economic and social transformation embedded in Sen. Sanders’ plan, which, among other things, calls for publicly-owned utilities to lead the way on renewable energy.
But perhaps the most striking thing about the climate plans is where the candidates agree. The proposals range in scope, but they are undoubtedly bold visions for a clean energy transition. It was too long ago that a modest carbon tax was seen as controversial; now the baseline in the Democratic Party is a complete phase out of fossil fuels in the medium- to long-term. The Overton window has very much been moved.
As Bloomberg noted, there are several issues that they all agree on.
For instance, they will all rejoin the Paris Climate Accord, which, given the scale of the climate crisis, is child’s play. That’s the bare minimum and almost not worth mentioning, especially since it relied on voluntary commitments anyway. It was also done by the prior Democratic administration so it shouldn’t be seen as any sort of bold proposal for change.
More relevant for the oil and gas sector is the call to end subsidies for fossil fuels, which total as much as $14.7 billion annually, including deductions for intangible drilling costs; last-in, first-out accounting; master-limited partnership tax exemptions; and low-cost royalty and leasing rates on federal lands, among others. Some of this was also proposed by the Obama administration but stalled in Congress.
It may give some oil executives a bit of heartburn to see their subsidies on the chopping block, but even if passed, these measures wouldn’t fundamentally disrupt the industry.
But here is where it gets really tricky if you are an oil and gas driller. Many of the top tier candidates want to revoke the permits or otherwise block major long-distance pipelines, including Keystone XL, Dakota Access, Line 3, Line 5, and essentially any other project of this nature. This will severely damage Canada’s oil sands, which will begin to lose access to the U.S. market. Oil sands producers would only have the Pacific Ocean as their way out.
Moving on to other ambitious proposals. All of the candidates – at least all of the viable ones – have vowed to end drilling on federal lands. This was something Senator Elizabeth Warren came out with early on, and other candidates have followed suit. No new leases for offshore drilling, none for BLM land, etc. The candidates point out that to fundamentally transform the energy system, and to hit climate targets that are becoming exceedingly difficult to reach, oil and gas reserves need to be left in the ground.
Some candidates want a ban on oil exports and a ban on fracking.
Many of them have some version of a net-zero emissions target, although the timeframes vary. That means eliminating fossil fuels from the energy system entirely, including full electrification of the transportation fleet.
While much of these ideas target fossil fuels, at the same time the candidates want to invest trillions in renewable energy, cleantech R&D, EV fleets and infrastructure, green manufacturing, and a litany of other initiatives intended to accelerate the transition off of fossil fuels.
This is by no means a comprehensive look at all the details of individual climate proposals. But the point is that the U.S. oil and gas industry would be phased out of existence. Much of the plans are hypothetical, and would require heavy lifts by the U.S. Congress. Passing legislation that overhauls huge sectors of the economy is not something the institution is known for.
But there is plenty of room for executive action, notably on major pipeline infrastructure, fracking, air regulations, and drilling on public lands. The President won’t need to turn to Congress to still upend the oil and gas industry.
It’s telling that in the last few weeks, much has been made of the Trump administration’s regulatory rollback on methane emissions, a signature policy from the Obama administration. It’s a testament to the scope and scale of the climate proposals from the 2020 candidates that regulating methane is such an afterthought, a miniscule policy idea compared to the transformational packages on offer.
via ZeroHedge News https://ift.tt/2PL5hyt Tyler Durden
The US government’s watchlist of over 1 million people flagged as “known or suspected terrorists” is a violation of their constitutional rights, according to US District Judge Anthony Trenga of Virginia.
CAIR attorney Gadeir Abbas
In a summary judgement granted to nearly two dozen Muslim US citizens backed by the Council on American-Islamic Relations (CAIR), Trenga concluded that “There is no evidence, or contention, that any of these plaintiffs satisfy the definition of a ‘known terrorist,” that the definition of “suspected terrorist” can be misconstrued based on innocent conduct, according to the Seattle Times.
“The court concludes that the risk of erroneous deprivation of plaintiffs’ travel-related and reputational liberty interests is high, and the currently existing procedural safeguards are not sufficient to address that risk,” wrote Trenga – a Bush II appointee.
While the ruling was a win for the plaintiffs (CAIR called it a “complete victory”), Trenga is seeking additional legal briefs before deciding what to do about the watchlist itself.
“Innocent people should be beyond the reach of the watchlist system,” said Gadeir Abbas, a lawyer for the plaintiffs. “We think that’s what the Constitution requires.”
Abbas said that while there has been significant litigation over the no-fly list, which forced the government to improve the process for people seeking to clear their name from the list, he said Trenga’s ruling is the first to broadly attack the government’s use of the watchlist. Trenga also wrote in his 31-page ruling that the case “presents unsettled issues.”
Ultimately, Trenga ruled that the travel difficulties faced by plaintiffs — who say they were handcuffed at border crossings and frequently subjected to invasive secondary searches at airports — are significant, and that they have a right to due process when their constitutional rights are infringed. –Seattle Times
CAIR executive director Nihad Awad said in a statment that the group’s “legal team has finally brought an end to the secretive watchlist, which is effectively a Muslim registry created in the wake of the widespread Islamophobia of the early 2000s.”
The FBI maintains the watchlist, also known as the Terrorist Screening Database, across various federal agencies such as US customs, which can cross-reference it for people entering the United States at border crossings. Aviation officials also use the database to maintain the smaller no-fly list.
As of June 2017, the list included approximately 1.16 million people, up from 680,000 in 2013 according to government documents filed in the lawsuit. Most individuals on the list are foreigners, however there are also around 4,600 US citizens and lawful permanent residents on the watchlist as well.
Earlier this year Abbas argued that the watchlist is worthless in terms of preventing terrorism, as it did nothing to stop Oralando nightclub shooter Omar Mateen, who killed 49 people in 2016. He was once on the list but later removed. Other terrorists, Abbas said, were never added to the watchlist despite having committed crimes.
The suit was filed in 2016, and has exposed previously unknown details about the list and how it is disseminated. In particular, government lawyers acknowledged after years of denials that more than 500 private entities are given access to the list. Government lawyers describe those private agencies as “law enforcement adjacent” and include university police forces, and security forces and hospitals, railroads and even animal-welfare organizations.
Abbas said the revelations about the government’s actions have come after years of dismissive responses from government officials who accused CAIR and others of paranoia, and that people are now paying more attention to the civil-rights implications of watchlisting.
As the Times notes, Rep. Ilhan Omar (D-MN) crafted a proposal adopted by the House which would force President Trump’s administration to disclose how it shares the watchlist with foreign countries.
via ZeroHedge News https://ift.tt/2Ll3r36 Tyler Durden
