David Koch, the conservative billionaire, activist and philanthropist, who gave more than $1 billion to charitable causes but was best known for using his money to reshape U.S. politics has died at the age of 79.
David, together with his brother, Charles, co-owned Koch Industries, a Nebraska-based energy and chemical company, since 1983. David stepped down from running the Koch organization last year due to declining health. A longtime New York resident, Koch was until retirement in June 2018 an executive vice president of the family company.
The Koch brothers are perhaps best known for building a massive conservative network of donors for organizations that work to mobilize voters and sway elected officials in support of libertarian-leaning economic policies.
In a prepared obit, the WSJ notes that “Koch, whose net worth of about $50.5 billion tied him with his brother as the world’s 11th-richest person in Forbes magazine rankings, gained most of his wealth from a 42% stake in Wichita, Kan.-based Koch Industries Inc., which has interests ranging from oil to beef to paper and is the second-largest closely held U.S. company.”
Some more details from the WSJ:
Though he was a liberal on social issues like abortion and same-sex marriage, Mr. Koch used his fortune to support conservative causes that favor lowering taxes, free trade and fewer regulations. He was the Libertarian Party’s 1980 vice-presidential candidate.
With his surviving older brother Charles Koch, the chairman and chief executive of Koch Industries, Mr. Koch created a network composed of like-minded wealthy donors brought together to back conservative causes.
They were credited with helping finance the limited-government Tea Party movement that helped Republicans win control of the House in 2010 during President Obama’s first term.
Their support of conservative causes became a lightning rod for Democrats, raising the ire of then-Sen. Harry Reid of Nevada, who in 2014 called Mr. Koch and his brother “un-American” and accused them of “trying to buy America” through campaign cash.
As the WSJ further notes, Megadonors such as the Kochs were able to grow their influence after the Supreme Court’s 2010 Citizens United decision, which allowed unlimited spending, both directly and indirectly, by outside groups
Diagnosed with prostate cancer in 1992, Koch had in recent years suffered from deteriorating health, according to the letter announcing his retirement from business and political activities. Over decades, Mr. Koch funneled some of his largest donations to cancer research, most notably to Memorial Sloan Kettering Cancer Center in Manhattan and to his alma mater, the Massachusetts Institute of Technology in Cambridge, Mass., for the founding of the Koch Institute for Integrative Cancer Research.
Koch attributed his philanthropy to a near-death experience in 1991, when an airplane he was in collided with another at Los Angeles International Airport. Mr. Koch was able to escape the smoke-filled plane, while more than 30 others were killed in the collision. Speaking about the crash in a 2014 television interview, Mr. Koch said, “I felt that the good Lord was sitting on my shoulder and that he helped save my life because he wanted me to do good works and become a good citizen.”
Born in Wichita on May 3, 1940, Koch attended public schools in his hometown before attending the prestigious Deerfield Academy in Deerfield, Mass. Mr. Koch earned his bachelor’s and master’s degrees in chemical engineering from MIT.
In addition to his brother Charles, Mr. Koch is survived by his three children; wife, Julia; twin brother, William Koch, and brother, Frederick Koch.
via ZeroHedge News https://ift.tt/2MADC16 Tyler Durden
If there are any virtues of debt instruments with negative yields we’ve yet to realize them. Certainly, we understand that as bond yields fall, bond prices rise, and bond investors are rewarded with capital appreciation. But when capital’s appreciating as a consequence of negative yields, we suspect there’s something fundamentally wrong with the capital itself.
Capital markets, as we’ve always understood them, are centered around lenders buying debt – such as a bond – at a yield that compensates for the risk of default over a contracted duration. The acceptance of negative yield is an abstraction that violates the form and function that capital markets are built on. In fact, negative interest rates undermine the foundational business model of banking in general.
How can banks loan money if they’re not compensated for the risk that some loans will go bad? And if banks can only loan money at a loss, why loan money at all? If there’s no profit motive, what’s the point?
There’s currently about $17 trillion in combined government and corporate negative yielding debt in existence. The European Central Bank and the Bank of Japan, with policies of mass money debasement that far exceed those of the Federal Reserve, are the primary culprits. Their fake money and fake interest rates have produced fake capital markets.
In effect, Negative Interest Rate Policy (NIRP) destroys a commercial banks ability to build capital and offset losses. In other words, NIRP destroys commercial banks. By extension, NIRP via central banks leads to the implied nationalization of commercial banks.
Japan and Europe are already past the point of no return. President Trump beats on Fed Chair Jay Powell practically every day to go negative. Will he acquiesce? In truth, he doesn’t have a choice…
Roadkill
In western Wyoming, between the Teton Mountain Range and the Gros Ventre Range, sits a high altitude mountain valley. The near vertical slopes used by Davy Jackson and other 19th century fur trappers to enter the valley from the north and east gave the sensation of entering a hole. The name stuck.
The conditions are harsh along the Jackson Hole valley floor. Radiational cooling, where low lying cold air from the snow covered ground plunges the temperature as the air migrates down the valley. This cooling effect, an effect similar to negative yielding debt, has produced temperatures of negative 66 degrees Fahrenheit.
However, for a brief period each year, the conditions in Jackson Hole are near perfect. In late summer, the valley’s paradise. Still, perfect conditions do not mean all is perfect in Jackson Hole.
On Sunday night, for example, resident Gale Wilson took a photo of a moose and her calf near Highway 390 and the Snake River. When she stepped outside on Monday morning she was greeted by the dead calf’s body. “It just ruined my day,” said Roosevelt.
Unfortunately, moose roadkill has become such a common occurrence along this stretch of Highway 390 that Mark Gocke, with the local Game & Fish, has lost track of how many moose have died. To better square up the runaway roadkill, Mr. Gocke’s hard at work – or, perhaps, hardly working – on an official tally. He may need to add several new entries to his log before the weekend’s over…
Dead Meat in Jackson Hole
This Thursday through Saturday, for the 37th consecutive year, the Kansas City Federal Reserve is hosting its economic symposium in Jackson Hole. Central bankers from the Federal Reserve have descended upon the valley like 19th century fur trappers. Who they bill their expense reports to is a question that’s better not asked.
At the time of this writing, Fed Chair Powell has yet to give his speech. There are many things he could say. There is little that he will say. There are things he definitely won’t say.
For example, Powell won’t say that the world’s central banks are tripping and stumbling as they race to out-stoopid one another. Nor will he say that locking in a guaranteed loss on bonds that are held to maturity is a terrible way for investors and pension funds to meet their long-term liabilities. Or that sometime over the next decade retirees will be eviscerated. He won’t say any of that…
Powell also won’t say that the Federal Reserve’s days are numbered. That the central bank’s obsolete and one crisis away from its own destruction. That it has cannibalized the nation’s time and treasure, transferring individual wealth to Washington for Washington’s ends.
Powell certainly won’t say that he may very well be the last Chair of the Federal Reserve. That the economic model of the 20th century is over. That increased issuances of debt no longer translates into increased economic growth. That the Fed merely provokes wild asset price swings, negative yielding bonds, casino style speculation, and epic bubbles and busts. And that with full knowledge of this, he’ll still take the nation into the hole of negative yields.
Indeed, the rash of moose kills in Jackson Hole is acutely instructive. The central bankers are dead meat. And they know it.
via ZeroHedge News https://ift.tt/33Se6cV Tyler Durden
There was a saying, which sprung from the French Revolution and was used during the Russian Revolution: “No enemies on the Left.” It was the idea that left-wing revolutionaries should moderate their criticism of anyone on their side of the aisle, no matter what type of extremism they embraced. During the Cold War, conservatives rightly mocked liberals who hedged about the evils of communism. They struggled to condemn anyone to their Left.
Last week, I wrote about the apparent re-emergence of white nationalist thinking. Some mass shooters (El Paso, Pittsburgh, Charleston) seem to subscribe to a white-supremacist ideology, based on their alleged manifestos and police statements. Judging by the reactions to some of the latest shootings, there’s a similar philosophy at work: “No enemies on the Right.” Everyone condemns the killers, of course, but people hem and haw about the far-right danger.
My column simply called for a recognition of the problem—and the use of existing laws to deal with self-radicalizing white supremacists who break the law. It’s the same solution I embraced after the 9-11 terrorist attacks, and after home-grown killers with an alleged Islamic radical viewpoint murdered Americans in a couple of shooting sprees. Facing the issue and using the vast law-enforcement tools already at our government’s disposal beats emotion-driven approaches that curtail our civil liberties.
Unfortunately, there are many pitfalls even with using those existing tools. As analysis of the latest shootings subsided, another news story has grabbed attention here in northern California. It offers warnings about what happens when fear and emotion rule the day—and when our government seems driven more by panic than justice. It’s from the small Central Valley city of Lodi, but has nationwide implications.
In late July, U.S. District Judge Garland E. Burrell Jr. vacated the conviction and 24-year sentence for a suspect in a 2006 terrorism case. Burrell was the judge who oversaw the trial of Lodi cherry picker Hamid Hayat, who was accused of training in a Pakistani terrorism camp. The feds argued that he allegedly gained weapons and explosives training that used President George W. Bush as a target, according to newspaper reports. This had the makings of a sensational case.
In January, a different federal judge, Deborah Barnes, called for the sentence to be overturned based in part on the inexperience of Hayat’s attorney and the government’s failure to consider exonerating evidence. She heard “new testimony from witnesses who said, Hayat, a California native, never had time to receive terror training while visiting relatives and getting married in his ancestral village in Pakistan,” according to a Sacramento Bee report.
In a 2018 hearing that re-examined aspects of that controversial case, Hayat’s attorney alleged that the FBI coerced a confession, “that the training camp he supposedly visited was not even open at the time … and that alibi witnesses who could prove his innocence were not produced at the original trial,” according to the newspaper. Here’s the best spin to put on this injustice: Our system still is willing to examine evidence years after a case is closed.
In hindsight, the whole matter is so unseemly. The New York Timeschaptered-and-versed some of the problems. One former FBI agent watched the testimony and said “it’s the sorriest interrogation, the sorriest confession, I’ve ever seen.” (False or coerced confessions are not unusual, but comprise more than a third of the nation’s murder exonerations, according to recent studies.)
Meanwhile, newspaper headlines announced the government’s dismantling of an apparent terror cell is a tranquil city in wine country. The director of national intelligence, it noted, told Congress that, “A network of Islamic extremists in Lodi, California, for example, maintained connections with Pakistani militant groups, recruited United States citizens.”
Except that there was no network. Hayat was the only scalp the FBI could secure, although the agency investigated (but never filed charges) possible immigration violations against local imams. If the Hayat case seemed dubious, it wasn’t an outlier.
As LA Weeklyreported at the time of the trial in 2006, “The Bush administration claims that more than 400 people have been charged with terrorism-related crimes in the post-September 11 era, and that 228 have been convicted. But the vast majority of these cases have involved minor crimes not directly related to terrorism, such as immigration violations.” The feds can appeal Burrell’s decision, but after 14 years in prison, Hayat has a good chance of finally being freed. It’s unclear how many of those other cases were re-examined.
None of us should minimize potential terror threats, from whatever swamp they might emerge. But our government has plenty of power to investigate and prosecute potential miscreants. Yes, we should all recognize that there are enemies on our Left and Right. But before calling for new governmental powers, we should remember the Lodi case and what happens when emotion rules and the government overplays its hand.
This column was first published in the Orange County Register.
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Just over an hour after the Global Times’ Hu Xijing warned that China would announce retaliatory tariffs on certain US products, adding that “China has ammunition to fight back”, that’s precisely what happened when China’s Ministry of Finance said in statement posted on website late Friday that it would levy retaliatory tariffs on another $75BN in US goods with rates anywhere between 5 and 10%, with the tariffs set to be implemented in two batches, one at midnight on Sept 1 and another at midnight on Dec 15.
Additionally, China said it would resume 25% tariffs on US autos.
August 15, 2019, the US government announced that it would impose a 10% tariff on approximately US$300 billion of goods imported from China, which will be implemented in two batches from September 1 and December 15, 2019. The US measures have led to the continuous escalation of Sino-US economic and trade frictions, which have greatly harmed the interests of China, the United States and other countries, and have also seriously threatened the multilateral trading system and the principle of free trade.
In response to the above measures by the US, China was forced to take countermeasures. According to the “Customs Law of the People’s Republic of China”, “The Foreign Trade Law of the People’s Republic of China”, “Regulations on Import and Export Tariffs of the People’s Republic of China” and other basic laws and principles of international law, the State Council’s Customs Tariff Commission decided to produce 5078 originating in the United States. The tax items, about 75 billion US dollars of goods, plus 10%, 5% tariffs, in two batches from 12:01 on September 1, 2019, 12:01 on December 15 implementation.
Customs Tariff Commission of the State Council will continue to carry out the elimination of tariffed goods from the United States and Canada. In the list of 75 billion US dollars of goods, the excluded goods subject to review and approval, according to the exclusion method, do not levy the tariffs imposed by me for the anti-US 301 measures; the products that are not included in the first two batches of the scope of application for exclusion will be included in the third The scope of the batch can be applied for exclusion, and the application method will be announced separately.
s adoption of tariff-adding measures is a forced move to deal with US unilateralism and trade protectionism. The Chinese side once again reiterated that for China and the United States, cooperation is the only correct choice, and a win-win situation can lead to a better future. It is hoped that China and the United States will respect each other with mutual respect, mutual equality, words and trust, and words and deeds, resolve differences in a mutually acceptable way, and actively build a balanced, inclusive and win-win new Sino-US economic and trade order, and jointly safeguard and promote Reform and improve the multilateral trading system and promote mutually beneficial and win-win cooperation with other countries in the world.
The news sent US equity futures tumbling…
… and US 10Y yield sharply lower.
Meanwhile over in Jackson Hole:
Powell, on seeing the China news, realizing he now has to rewrite his entire speech pic.twitter.com/MtqxYAn25A
With the 70th anniversary of the founding of the CPC looming, and Beijing staking out a more aggressive trade stance Friday morning by threatening retaliatory tariffs, the US picked the best – or worst – time to provoke Beijing, when a Navy ship sailed through the Taiwan Strait in the Navy’s latest “freedom of navigation” operation, or ‘freeop’ on Friday.
As CNA points out, Washington has actually increased its antagonistic operations in the Taiwan Strait as tensions with Beijing have soared this year, and Friday’s mission risks stoking tensions even further, as Beijing has warned international powers not to interfere in its relationship with Taiwan, or risk provoking Beijing’s wrath.
Yet interfering is precisely what the US has done, and earlier this month, Beijing denounced the sale of $2.2 billion in weapons to Taiwan by the US. Beijing has been ramping up pressure to assert its sovereignty over the island, which it considers a wayward province.
Commander Reann Mommsen, a spokeswoman for the US Navy’s Seventh Fleet, said the operation in the 111-mile wide waterway separating Taiwan from China “demonstrates the US commitment to a free and open Indo-Pacific.”
Mommsen identified the ship as the Green Bay, an amphibious transport dock ship, hinting at a possible marine transport to the controversial island. Typically, these missions are carried out using destroyer-class ships.
Taiwan’s Defense Ministry said in a statement that the island’s military had a full grasp of the situation in the Strait and closely monitored it.Washington has no formal ties with Taiwan, but the US is bound by law to help defend the island nation should it be attacked. The US is also its primary source of arms.
via ZeroHedge News https://ift.tt/2NqZYBJ Tyler Durden
Global stocks, US equity futures, and the dollar rose on Friday ahead of a much anticipated speech by Jerome Powell which the market hopes will provide clarity on whether the Fed will deliver another interest rate cut in three weeks, and whether it will be 25 or 50bps.
The levitation was hit, however, just after 630am when Global Times EIC tweeted that a Chinese retaliation to the latest round of US tariffs is coming.
Twitter trolling notwithstanding, the MSCI All Country World Index was up 0.1% and set to break a three-week losing streak.
European stocks rebounded from the previous day’s falls, with the European Stoxx 600 index gaining as much as half a percent in early deals, and were set for the best weekly gain since June, clearly indicating confidence that Powell would not reveal any hawkish surprise. Britain’s FTSE 100 index was up 0.64%.
Earlier in the session, the MSCI Asia index ex Japan rose 0.3% and was up 1.0% for the week, on track to break a four-week losing streak. Japan’s benchmark Nikkei advanced 0.4% and Australian stocks added 0.3%. Energy producers and utility companies led gains. Most markets in the region were up, with India and Thailand among the top performers. The Topix added 0.3%, supported by electronic firms and retailers. Japan’s highly manipulated and goalseeked CPI stayed unchanged in July amid speculation that the central bank will boost stimulus. The Shanghai Composite Index rose 0.5% for its best week since June, with Kweichow Moutai Co. and Jiangsu Hengrui Medicine Co. among the biggest boosts. China and U.S. deputies had a “productive call” on trade negotiations Wednesday, Larry Kudlow told Fox Business although that was rejected hours later when the Global Times said China is preparing for retaliation and the US “will feel the pain.” India’s Sensex advanced 0.7%, driven by Reliance Industries Ltd. and Tata Consultancy Services Ltd., after an official said the government may soon reverse a planned tax on foreign investors
Volumes, as has been the case, were lethargic with traders unwilling to commit capital ahead of today’s main event, when Powell is due to speak at 10am at Jackson Hole, Wyoming. While markets overwhelmingly expect the Fed to follow up its first rate cut in a decade with more stimulus at its meeting next month, a trio of policymakers sounded less than keen. On Thursday, Kansas City Fed President Esther George, who dissented against the decision to ease in July, Philadelphia Fed President Patrick Harker, who said he “reluctantly” supported the cut, and Boston Fed’s Rosengren all said the U.S. economy did not need more stimulus at this point.
This hawkishness was somewhat offset by Dallas Fed President Robert Kaplan who said businesses had become much more cautious due to surprises on trade policy and he was “going to at least be open-minded about making some adjustment” if he saw continued weakness. That has made Powell’s speech pivotal for markets as they look for any clues on future policy direction, according to Reuters.
“Judging by the minutes from the July meeting the central bank seems content to sit on their hands, but it is worth remembering the U.S.-China trade situation has intensified, and so has the unrest in Hong Kong, and that might prompt Mr. Powell to be a touch more dovish than he was in late July,” said David Madden, markets analyst at CMC Markets in London.
In the U.S. bond market, the 2-10 year yield curve briefly moved back into inversion territory overnight, a shift that also occurred yesterday and for the first time since the crisis, last week, and hit financial markets amid worries that it presaged a sharp global downturn.
“There’s been no jaw-dropping news this week but we have had incrementally less bond-friendly news – the FOMC minutes, the euro area PMIs, and Fed speakers in recent days that give the impression that July was an insurance rate cut,” said Standard Chartered FX strategist John Davies. “This has dragged the market away from speculating about 25-50 basis points rate cut in September to a discussion on a 25 bps cut to will they cut rates, so a bit more uncertainty has been injected into markets.”
European bonds were rangebound, while Italian bonds fell after President Sergio Mattarella gives rival parties more time to put together a new parliamentary majority.
In FX, the euro eased marginally to $1.1073, while the pound fell half a percent to $1.2195, reversing most of the gains made on Thursday after traders interpreted encouraging comments on Brexit from German Chancellor Angela Merkel to mean a solution to the Irish border problem could be found before Britain leaves the EU on Oct. 31.
The closely watched Chinese yuan recovered some ground after hitting an 11-1/2 year low. Spot yuan slid to as low as 7.0992 per dollar, its weakest since March 2008. China’s central bank set the midpoint rate at 7.0572, its weakest level in 11-1/2 years but much stronger than traders had expected.
The kiwi led G10 currency gains after Governor Adrian Orr said New Zealand’s central bank can afford to wait and see before deciding on further steps to support economy.
Finally, the Bloomberg Dollar Spot Index held near year-to-date highs ahead of Federal Reserve Chairman Jerome Powell’s speech at Jackson Hole. Perhaps more notable is that the broadly trade weighted dollar just hit an all time high, making the probability of a direct US intervention in the currency especially high.
In commodities, oil prices weakened, with both Brent crude and U.S. West Texas Intermediate down 0.1%. Brent crude traded at $59.89 per barrel and WTI crude at $55.31. Gold eased and was set for its worst week in nearly five months. Spot gold was down 0.2% at $1,495.60 an ounce.
Besides the Jackson Hole speeches (full schedule here) expected data include new home sales. Foot Locker reported poor earnings, and dismal same store sales, sending its stock plunging.
Market Snapshot
S&P 500 futures up 0.4% to 2,933.50
STOXX Europe 600 up 0.5% to 376.29
MXAP up 0.3% to 152.25
MXAPJ up 0.4% to 493.20
Nikkei up 0.4% to 20,710.91
Topix up 0.3% to 1,502.25
Hang Seng Index up 0.5% to 26,179.33
Shanghai Composite up 0.5% to 2,897.43
Sensex up 0.8% to 36,760.48
Australia S&P/ASX 200 up 0.3% to 6,523.13
Kospi down 0.1% to 1,948.30
German 10Y yield rose 1.8 bps to -0.626%
Euro down 0.09% to $1.1070
Italian 10Y yield fell 2.5 bps to 0.96%
Spanish 10Y yield rose 3.4 bps to 0.175%
Brent futures down 0.2% to $59.81/bbl
Gold spot down 0.1% to $1,495.91
U.S. Dollar Index up 0.2% to 98.35
Top Overnight News from Bloomberg
Italy’s center-left Democrats have until Tuesday to form a coalition with their long-time rivals, the anti-establishment Five Star Movement, after President Sergio Mattarella gave them more time to put together a new parliamentary majority.
Emmanuel Macron said Group of Seven leaders gathering in Biarritz, France, Saturday must tackle head on the fires in the Amazon jungle, establishing the summit’s first flash point. “Our house is burning. Literally,” the French president wrote in a tweet late Thursday. “It is an international crisis.”
Three Federal Reserve policy makers voiced their resistance to the notion that the U.S. economy needs lower interest rates
Dallas Fed President Robert Kaplan said he supported the central bank’s move to cut its benchmark interest rate by a quarter point last month — and is open to another reduction in the months ahead, according to WSJ.
New Zealand’s central bank will do “whatever it takes” to support the economy and will monitor the inflationary impact of this month’s unexpectedly large interest rate cut before considering further easing, Orr said
Italy’s center-left Democrats have until Tuesday to form a coalition with the anti-establishment Five Star Movement, after President Sergio Mattarella said he was giving parties more time to try and put together a new parliamentary majority
Japan’s key inflation gauge remained unchanged in July amid increasing speculation that the Bank of Japan may ramp up its stimulus as early as next month
Germany’s central bank doesn’t see a need for fiscal stimulus at this time, even though it expects the economy to shrink again this quarter, according to two people familiar with the Bundesbank’s stance
Japan’s sovereign debt market is in danger of joining Germany with negative bond yields across all maturities
Investors are starting to question the epic bond rally that’s driven global yields to new lows and fueled the U.S. Treasury market’s best performance since the era of quantitative easing.
Volkswagen AG is exploring potential investments in Chinese automotive suppliers as it seeks to secure access to key technology in the world’s largest car market, people familiar with the matter said
Donald Trump’s lawyers will be in a New York courtroom Friday trying to block Democrats’ access to financial records from Deutsche Bank AG and Capital One Financial Corp. — and House Speaker Nancy Pelosi has much at stake over the outcome
Asian equity markets traded with cautious gains as participants await Fed Chair Powell’s looming speech at the Jackson Hole Symposium and after the lack of conviction on Wall St. where risk appetite was dampened by hawkish Fed rhetoric, as well as decade-low US Manufacturing PMI data. ASX 200 (+0.3%) was positive with stock news in Australia dominated by earnings including Goodman Group and Sims Metals which have surged due to profit growth, although upside in the index was limited by weakness in the commodity sectors especially gold miners after the precious metal slipped below USD 1500/oz level. Elsewhere, Nikkei 225 (+0.4%) was supported by favourable currency moves, while Hang Seng (+0.5%) and Shanghai Comp. (+0.5%) were higher despite early indecisiveness after China’s MOFCOM reiterated its threat to retaliate against the US in the trade dispute and amid mixed signals from the PBoC in which they conducted reverse repos but resulted to a net liquidity drain for the week and softened its reference rate, although not as weak as anticipated. Finally, 10yr JGBs were subdued amid similar weakness in T-notes and as stocks in the region eked mild gains, although downside was stemmed amid the BoJ’s presence in the market for over JPY 1.2tln of JGBs in 1yr-10yr maturities.
Top Asian News
India May Roll Back Tax on Foreign Investors, Official Says
Delinquencies Jump After Bangladesh Central-Bank Move Backfires
A 203-Year-Old Trading Empire Faces China’s Wrath Over Hong Kong
European equities opened and remained on a somewhat firmer footing (thus far) [Eurostoxx 50 +0.3%] on the last trading day of the week which follows on from an initially cautious Asia-Pac session before sentiment turned for the better ahead of Fed Chair Powell’s opening remarks at the Jackson Hole Symposium at 1500BST/1000EDT. Sectors are mostly in the green with the exception of the energy sector which coincides with recent losses in the oil complex. Meanwhile, the IT sector outperforms as stellar earnings from US-listed Salesforce.com (+6.8% pre-market) provided tailwinds to DAX heavyweight SAP (+0.6%), which accounts for around 1.5% of the Stoxx 600 index. In terms of individual movers, Thyssenkrupp (+0.7%) opened higher amid source reports that it is planning to merge its steel unit with Klöckner (+8.3%). Also, it’s worth keeping in mind a report by Politico which stated that EU Officials are seeking to create a EUR 100bln wealth fund in order to bolster ‘European Champions’ against American and Chinese business rivals such as Apple (+0.6% pre-market), Google (+0.9% pre-market) and Alibaba (+0.9% premarket).
Top European News
Hasbro Agrees to Buy Producer of Peppa Pig Show for $4 Billion
Woodford Raises About $800 Million Since Freezing Flagship
Commerzbank Considers Cutting Up to 2,000 Additional Jobs
Italian Bonds Fall as Positions Pared Ahead of Powell, G7 Meet
In FX, the Greenback has nudged up a bit further from post-US manufacturing PMI lows that saw the DXY skirt 98.000, and the index is now edging back up towards wtd peaks just shy of 98.500 posted on Tuesday within a 98.185-436 range. Relatively hawkish rhetoric from Fed’s George and Harker have underpinned the Buck ahead of Chair Powell’s keynote speech that is being eyed for clearer policy guidance given this week’s FOMC minutes highlighting divisions between voters beyond the 2 dissenters against July’s 25 bp insurance/mid-cycle rate cut.
NZD/GBP – Not quite all change, but positions and roles have partially reversed for the Kiwi and Pound following supportive comments from RBNZ Governor Orr and less euphoria/hype about the prospect of formulating a plan for the Irish backstop that is mutually acceptable for the UK and EU. To recap, NZ’s Central Bank head indicated that the recent larger than expected OCR ease (1/2 point) affords some time for assessment before deciding whether more stimulus is needed in November and effectively signally a pause next month, while French President Macron and German Chancellor Merkel have both been receptive to PM Johnson and the notion that a resolution to the Irish backstop impasse can be reached before it’s too late, but the ball and onus to come up with something different is back in UK hands. In response, Nzd/Usd has rebounded towards 0.6400, with AUD/Nzd back under 1.0600 as Aud/Usd pivots 0.6750 amidst the ongoing, incremental rise Usd/Cny mid-point rates, while Cable has retraced more of its gains through 1.2200 at one stage.
CHF/JPY – The Franc and Yen are both weaker vs the Dollar as US Treasury yields rise and the curve steepens, while safe-haven demand is also waning with global trade and geopolitical tensions still prevalent, but not escalating (at present). As such, Usd/Chf and Usd/Jpy are firmer around 0.9850 and 106.50 handles respectively.
CAD/EUR – The Loonie and Euro remain relatively rangebound vs the Greenback circa 1.3315 and 1.1065, with the former looking for more independent inspiration from Canadian retail sales data after failing to glean any real or lasting impetus via firm CPI and other minor macro inputs this week (wholesale trade and manufacturing sales). Meanwhile, the single currency is hanging on above 1.1050 and the 2019 base (1.1029) awaiting insight from Fed’s Powell, September’s ECB policy meeting to see how much stimulus is delivered after minutes underlining heightened economic concerns and what happens next in Italy on the political front.
EM – The Rand is outperforming and clawing back recent losses vs the Buck with a less downbeat/negative take from Moody’s on the SA fiscal outlook following extra financial assistance for Eskom helping alongside a less bearish technical backdrop as Usd/Zar reverses through 15.2500 and 15.1500 before basing around 15.1300.
RBNZ Governor Orr reiterated a rate cut earlier reduces likelihood of having to do more later and stated they will do whatever it takes to support New Zealand economy but can afford to wait and observe what is happening, while he added that they will see what the situation is like in November and will cut if necessary. (Newswires)
In commodities, WTI and Brent futures are choppy in a relatively tight parameter as all eyes turn to Fed Chair Powell for any hint on the magnitude of the widely anticipated Fed rate cut in September against the backdrop of some recent hawkish Fed rhetoric. WTI futures remain contained in a 55.20-60/bbl range whilst its Brent counterpart straddles on either side of 60/bbl. Elsewhere, gold is marginally softer intraday and remains below the 1500/oz mark, largely weighed on by a firmer Greenback, in anticipation for the Fed Chair’s speech. Copper on the other hand is rebounding off recent lows, albeit prices remain below 2.6/lb with desks citing US-China optimism as a driver, although a retracement of recent losses/some profit taking may also be factors. Meanwhile, Dalian iron ore surged over 3% overnight following the ruthless sell-off in recent days, also potentially due to profit-taking heading into a risk-packed weekend. Finally, ING notes that the recent surge in Nickel prices seem to be running out of steam after prices declined around 4% this week. “The speculated supply disruptions from Indonesia have not materialised yet, whilst the demand-side continues to face pressure as margins for stainless steel producers take a hit” the analysts state.
US Event Calendar
10am: New Home Sales, est. 647,000, prior 646,000
10am: New Home Sales MoM, est. 0.16%, prior 7.0%
10am: Annual Federal Reserve Policy Symposium in Jackson Hole
DB’s Craig Nicol concludes the overnight wrap
The annual spotlight on the tiny Wyoming resort of Jackson Hole is once again upon us today with the big event being Fed Chair Powell’s speech at 10am EST/3pm GMT. Given that we haven’t heard much out of the Fed in recent weeks and that since the last FOMC meeting we’ve had another round of trade war tensions, global growth slowdown fears and further steep drops in bond yields, the event couldn’t come soon enough. All those concerns are crystalizing today, after the 2y10y curve closed in negative territory last night for the first time since 2007. As we know, the symposium has had its fair share of moments, most notably in 2014 when Draghi laid the groundwork for QE and in 2012 when Bernanke hinted at QE3. However, with the market pricing in 57ps of cuts this year and a further 47bps in 2020, the dovish bar is already set fairly high for Powell.
As a reminder the topic of this year’s event is the sufficiently vague “Challenges for Monetary Policy”. The immediate focus of Powell’s speech will likely be whether he affirms that the current easing is a ‘mid-cycle adjustment’ as per the FOMC minutes or align more closely to market pricing. In his note from two days ago (see here ), DB’s Alan Ruskin believes that if Powell sticks to the old language as is most likely, it would affirm that he is still confident that the strength of consumption, in combination with modest Fed easing, will be sufficient to keep the recovery broadly on track. Alan believes that while this is implicitly slightly more hawkish than the market, pricing will not shift dramatically given it has already moved in that direction after the FOMC minutes on Wednesday.
The agenda for the event was released last night and other potentially interesting agenda items to keep watch for apart from Chair Powell’s speech include a panel on “monetary policy divergence” and one on “monetary policy spillovers.” So today’s sessions will focus on the international angle to central bank policy, followed by another panel on “what does it mean to be a data-dependent central banker?” The panels on Saturday look a bit less impactful, with sessions on “commodity price shocks,” “financial markets,” and an economic overview from IMF chief economist Gita Gopinath.
Fed officials already descended on Jackson Hole yesterday, and we got an interesting trickle of comments from some regional presidents. Overall, the tone was on the hawkish side of expectations. Kansas City’s George said that she is not ready to provide more policy accommodation, Dallas’s Kaplan said “I’d like to avoid having to take further action,” and Philadelphia’s Harker said “I think we should stay here for a while and see how things play out.” And yes, he was talking about interest rates, not the beautiful resort in Wyoming.
Markets were in something of a holding pattern yesterday going into Powell’s speech with the main talking point being the PMI releases in Europe and the US. We’ll come to those shortly however in terms of markets, the S&P 500 finished -0.05% last night, with the NASDAQ lagging -0.36% and the DOW outperforming +0.19%. Markets in Europe ebbed and flowed before the STOXX 600 ended -0.40%. Meanwhile, in rates Treasuries continued to weaken slightly, with 10y yields up +2.2bps while the 2s10s curve finished below zero at -0.1bps. That marks the first close below zero and in inversion territory of this cycle. European bond yields were higher, mostly as a result of the ECB minutes from the meeting last month which at the margin were slightly hawkish. There appeared to be broad agreement to reintroduce the rates easing bias however “nuances were expressed” with regards to how the design and individual elements of a possible policy package could look. There was also a reference to how the risk of an unwarranted tightening of financial conditions was higher at the short end than the long end of the yield curve while there was also talk of concerns about possible “unintended consequences” with regards to tiering. European banks did however benefit from the move higher in yields, rallying +1.32%.
Overnight, markets in Asia have nudged higher with the Nikkei (+0.26%), Hang Seng (+0.48%), Shanghai Comp (+0.48%) and Kospi (+0.05%) all making advances. In FX, the New Zealand dollar is up +0.39% this morning after the country’s central bank governor said he could afford to wait before deciding whether to add more support for the economy. All other G-10 currencies are trading a bit weaker. Elsewhere, futures on the S&P 500 are up +0.33%. In terms of overnight data releases, Japan’s July CPI came in one tenth lower than expected at +0.5% yoy while core CPI came in line with expectations at +0.6% yoy and core-core CPI came in one-tenth above expectations at +0.6% yoy.
Back to those PMIs yesterday, where although much was made of the beat at the headline level in Europe, the underlying details particularly in Germany were less than encouraging. Indeed composite readings in France (52.7 vs. 51.8 expected; 51.9 previously), Germany (51.4 vs. 50.6 expected; 50.9 previously) and the Euro Area (51.8 vs. 51.2 expected; 51.5 previously) all bettered expectations and rose from the month prior. It was a similar story for the services and manufacturing components with Germany’s manufacturing print coming in 0.4pts higher at 43.6 (vs. 43.0 expected) and the services reading at 54.4 (vs. 54.0 expected). That being said, it’s hard to ignore the fact that this is still the eighth contractionary manufacturing print for Germany in succession, while the details of Germany’s PMIs also revealed deterioration in total inflow of new business (for the third month in a row), new orders from abroad dropping across all sectors and for the first time in five years, a majority of firms expecting output to fall over the next twelve months. In addition, the decline in the order backlog accelerated some more and while the gap between manufacturing and services narrowed slightly, the dichotomy still very much remains.
All-in-all the data implies around +0.2% qoq GDP growth for the Euro Area in Q3, low +0.3% qoq in France and barely positive growth for Germany which fits with our economists view of a potential contraction in Q3 and therefore a technical recession. Staying with Europe it’s worth noting that the data was also less than encouraging in Sweden yesterday where the unemployment rate ticked up notably in July to 7.1% on a seasonally adjusted basis – and the highest since August 2016 – from 6.7% in June. That was after expectations were for a drop to 6.5%.
In the US the PMIs were also disappointing. That was especially the case for the manufacturing print which fell into contractionary territory at 49.9 (vs. 50.5 expected) for the first time since 2009. The services reading also fell, to 50.9 (vs. 52.8 expected) from 53.0 last month which put the composite at 50.9 and matching the lows from May this year. As for what that means for growth, that corresponds to near 1.5% GDP growth in Q3 and Q4. Prior to that, the latest jobless claims data showed no signs of softness following a lower than expected 209k reading – which was the lowest in four weeks. Meanwhile the July leading index printed at 0.5%, up 0.6pp for the biggest increase since 2017, and the August Kansas Fed manufacturing survey fell to -6 from -1.
Meanwhile, Brexit headlines continued to flow, with the pound rallying +1.02% versus the dollar. Apparently headlines from Chancellor Merkel saying there is still time to find a solution to the backstop to avoid a no-deal Brexit sparked optimism. We remain skeptical that her comments signaled any change in position, and indeed President Macron said later that “we are not going to find a new withdrawal agreement that is far from the original.” Nevertheless, the pound did hold its gains.
Looking at the day ahead, the obvious focus will be on Fed Chair Powell’s speech at Jackson Hole this afternoon, with the only data due being July new home sales numbers in the US.
via ZeroHedge News https://ift.tt/2PaCK59 Tyler Durden
There was a saying, which sprung from the French Revolution and was used during the Russian Revolution: “No enemies on the Left.” It was the idea that left-wing revolutionaries should moderate their criticism of anyone on their side of the aisle, no matter what type of extremism they embraced. During the Cold War, conservatives rightly mocked liberals who hedged about the evils of communism. They struggled to condemn anyone to their Left.
Last week, I wrote about the apparent re-emergence of white nationalist thinking. Some mass shooters (El Paso, Pittsburgh, Charleston) seem to subscribe to a white-supremacist ideology, based on their alleged manifestos and police statements. Judging by the reactions to some of the latest shootings, there’s a similar philosophy at work: “No enemies on the Right.” Everyone condemns the killers, of course, but people hem and haw about the far-right danger.
My column simply called for a recognition of the problem—and the use of existing laws to deal with self-radicalizing white supremacists who break the law. It’s the same solution I embraced after the 9-11 terrorist attacks, and after home-grown killers with an alleged Islamic radical viewpoint murdered Americans in a couple of shooting sprees. Facing the issue and using the vast law-enforcement tools already at our government’s disposal beats emotion-driven approaches that curtail our civil liberties.
Unfortunately, there are many pitfalls even with using those existing tools. As analysis of the latest shootings subsided, another news story has grabbed attention here in northern California. It offers warnings about what happens when fear and emotion rule the day—and when our government seems driven more by panic than justice. It’s from the small Central Valley city of Lodi, but has nationwide implications.
In late July, U.S. District Judge Garland E. Burrell Jr. vacated the conviction and 24-year sentence for a suspect in a 2006 terrorism case. Burrell was the judge who oversaw the trial of Lodi cherry picker Hamid Hayat, who was accused of training in a Pakistani terrorism camp. The feds argued that he allegedly gained weapons and explosives training that used President George W. Bush as a target, according to newspaper reports. This had the makings of a sensational case.
In January, a different federal judge, Deborah Barnes, called for the sentence to be overturned based in part on the inexperience of Hayat’s attorney and the government’s failure to consider exonerating evidence. She heard “new testimony from witnesses who said, Hayat, a California native, never had time to receive terror training while visiting relatives and getting married in his ancestral village in Pakistan,” according to a Sacramento Bee report.
In a 2018 hearing that re-examined aspects of that controversial case, Hayat’s attorney alleged that the FBI coerced a confession, “that the training camp he supposedly visited was not even open at the time … and that alibi witnesses who could prove his innocence were not produced at the original trial,” according to the newspaper. Here’s the best spin to put on this injustice: Our system still is willing to examine evidence years after a case is closed.
In hindsight, the whole matter is so unseemly. The New York Timeschaptered-and-versed some of the problems. One former FBI agent watched the testimony and said “it’s the sorriest interrogation, the sorriest confession, I’ve ever seen.” (False or coerced confessions are not unusual, but comprise more than a third of the nation’s murder exonerations, according to recent studies.)
Meanwhile, newspaper headlines announced the government’s dismantling of an apparent terror cell is a tranquil city in wine country. The director of national intelligence, it noted, told Congress that, “A network of Islamic extremists in Lodi, California, for example, maintained connections with Pakistani militant groups, recruited United States citizens.”
Except that there was no network. Hayat was the only scalp the FBI could secure, although the agency investigated (but never filed charges) possible immigration violations against local imams. If the Hayat case seemed dubious, it wasn’t an outlier.
As LA Weeklyreported at the time of the trial in 2006, “The Bush administration claims that more than 400 people have been charged with terrorism-related crimes in the post-September 11 era, and that 228 have been convicted. But the vast majority of these cases have involved minor crimes not directly related to terrorism, such as immigration violations.” The feds can appeal Burrell’s decision, but after 14 years in prison, Hayat has a good chance of finally being freed. It’s unclear how many of those other cases were re-examined.
None of us should minimize potential terror threats, from whatever swamp they might emerge. But our government has plenty of power to investigate and prosecute potential miscreants. Yes, we should all recognize that there are enemies on our Left and Right. But before calling for new governmental powers, we should remember the Lodi case and what happens when emotion rules and the government overplays its hand.
This column was first published in the Orange County Register.
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As an attack on right-wing radio, Hot Air is surprisingly inept. Steve Coogan, the movie’s star (and an executive producer) is a smart, funny actor; but he’s also a standard-issue English lefty (votes Labour, supports Jeremy Corbyn, detests Brexit), and it’s easy to imagine that he never had any intention of giving a nuanced account of his character here, a slick New York talk-radio firebrand named Lionel Macomb. On the air, Macomb leads his callers in reviling illegal immigration (Lionel wants to build not just a wall, but a moat, too) and mocking official alarms about global warming. (“That’s why I live in a penthouse,” Lionel says. “Higher ground.”) You get the idea.
You’d think Coogan—who demonstrated a mastery of smug cluelessness playing TV host Alan Partridge on the BBC, and who has had fun with sour disgruntlement in the three road-trip series he’s made with Rob Brydon—would be just the man to do a witty takedown of this ugly American. But no—Coogan’s performance is an exercise in simpleminded political gesturing: he hates this guy and what else is there to say? Unfortunately, that leaves the reins of the picture in the hands of director Frank Coraci, whose résumé is heavy with Adam Sandler and Kevin James movies (and who previously directed Coogan in a wildly unsuccessful 2004 remake of Around the World in 80 Days). And Coraci is himself chained to a strikingly mindless script by first-time screenwriter Will Reichel.
The story is a bagful of clanking plot stratagems. We meet Lionel in the studio, bonding as usual with his angry listeners. (“Bring me your rage.”) Then we see a teenage girl named Tess (Taylor Russell) turning up at Lionel’s door. She’s the daughter of Lionel’s good-for-nothing sister Laurie (Tina Benko), who’s currently in rehab again. Lionel is supposed to be a heartless dick, and at first he does make huffy noises about turning Tess away—but he thinks better of them after she threatens reputational repercussions on Twitter. Okay, that’s blackmail. But then, voluntarily, Lionel starts providing Tess with expensive clothing from Barney’s and engineering her acceptance to a posh boarding school. Go figure.
Lionel’s publicist and longtime girlfriend Valerie (Neve Campbell) is quickly stirred into the mix. Val knows that Lionel is a bit of an idiot (he only likes foie gras because it’s illegal in California, she tells Tess), but hey, there’s something about the guy. (Lionel is also cheating on Val with his hot housekeeper—a distasteful fact that the movie never deals with.)
When more plot conflict is called for, we learn that Lionel’s ratings are beginning to slide. The immediate cause of this is a kinder, smilier young rival named Gareth Whitley (Skylar Astin), who was once Lionel’s heir apparent. But there’s also the possibility that the public has simply grown tired of Lionel’s snotty schtick. On the street one day, we see him mobbed by protesters waving signs that say, “Talk’s not cheap, it’s toxic.” This would seem to be a flat-out declaration by the filmmakers of an increasingly commonplace leftwing attitude toward the First Amendment (it’s echoed on the movie’s poster: “We all have a voice. Just be careful how you use it”). But then later, when one of the sign-wavers gets to express his views more fully on Lionel’s show, he proves himself to be an empty-headed fool. Could this be an attempt to offer us another point of view? It feels more like clumsy plot construction.
Even viewers who might find the movie’s message agreeable are likely to reject the puddle of shameless narrative goo into which it begins to sink toward the end. This is a redemption story that owes a lot to the 1976 Network—just not enough. In an on-air showdown with Whitley and a liberal senator (Judith Light), Lionel rounds on the live audience and blames them, not himself, for talk-media’s affronts to common decency. “We just get rich and powerful by yanking your strings,” he says. “Our best days are behind us…The American Dream is dead and buried and you’re dancing on its grave.”
Has Lionel seen the light? Did he actually just say, “Who cares about real feelings when you have emojis?” Can this movie get any dumber? Yes, I’m afraid. And yes, yes.
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As the outcry over the wildfires currently tearing through the Amazon intensifies, Brazilian President Jair Bolsonaro admitted on Thursday that farmers might be illegally setting fires to clear land for pasture, after previously blaming NGOs for the the 85% spike in wildfires, compared to 2018 Reuters reports.
But he warned outsiders not to interfere, as French President Emmanuel Macron insisted that the situation in Brazil should be discussed by the G-7 in Biarritz this weekend, while UN Secretary General Antonio Gutterres expressed concern about the fires via Twitter.
But Bolsonaro was angered by what he described as ‘meddling’, and mocked countries like Germany and Norway that recently suspended financing for projects intended to curb deforestation.
“These countries that send money here, they don’t send it out of charity…They send it with the aim of interfering with our sovereignty,” Bolsonaro said.
That said, their money is still welcome: earlier on Thursday, he admitted that Brazil alone doesn’t have the resources to suppress the ‘criminal’ fires.
“The Amazon is bigger than Europe, how will you fight criminal fires in such an area?” he asked reporters as he left the presidential residence. “We do not have the resources for that.”
According to government figures, wildfires have nearly doubled during this year’s dry season. Federal prosecutors said they were investigating the spike in deforestation and wildfires in the state of Pará to determine whether there has been reduced monitoring and enforcement of environmental protections.
But some have accused Bolsonaro of tacitly condoning the farmers, by insisting that Brazil should open up more of the rainforest to business interests like farming and mining. Roughly 60% of the rainforest is in Brazil.
Prosecutors said they would look into an ad that they said was published in a local newspaper encouraging farmers to participate in a “Fire Day,” in which they would burn large areas of forest “to show Bolsonaro their willingness to work.”
Colombia, which is also home to part of the rainforest, said on Thursday that it would support protecting against the fires.
“Colombian authorities are already working to contain the propagation of these fires toward Colombian territory and we are willing to collaborate with our neighbors in this common cause,” the Colombian Foreign Ministry said in a statement.
Bolsonaro has been repeatedly criticized for his stance on the Amazon, and though the wildfires are largely out of his control, his reluctance to blame farmers for setting them risks giving the impression that he doesn’t see stopping the fires as a priority.
Meanwhile, in the US, every celebrity and ‘influencer’ has posted about the wildfires and the lack of ‘media’ coverage – giving the impression that the rainforest is truly in danger, and ignoring the fact that wildfires happen in the Amazon every year.
via ZeroHedge News https://ift.tt/2TXTU51 Tyler Durden
As an attack on right-wing radio, Hot Air is surprisingly inept. Steve Coogan, the movie’s star (and an executive producer) is a smart, funny actor; but he’s also a standard-issue English lefty (votes Labour, supports Jeremy Corbyn, detests Brexit), and it’s easy to imagine that he never had any intention of giving a nuanced account of his character here, a slick New York talk-radio firebrand named Lionel Macomb. On the air, Macomb leads his callers in reviling illegal immigration (Lionel wants to build not just a wall, but a moat, too) and mocking official alarms about global warming. (“That’s why I live in a penthouse,” Lionel says. “Higher ground.”) You get the idea.
You’d think Coogan—who demonstrated a mastery of smug cluelessness playing TV host Alan Partridge on the BBC, and who has had fun with sour disgruntlement in the three road-trip series he’s made with Rob Brydon—would be just the man to do a witty takedown of this ugly American. But no—Coogan’s performance is an exercise in simpleminded political gesturing: he hates this guy and what else is there to say? Unfortunately, that leaves the reins of the picture in the hands of director Frank Coraci, whose résumé is heavy with Adam Sandler and Kevin James movies (and who previously directed Coogan in a wildly unsuccessful 2004 remake of Around the World in 80 Days). And Coraci is himself chained to a strikingly mindless script by first-time screenwriter Will Reichel.
The story is a bagful of clanking plot stratagems. We meet Lionel in the studio, bonding as usual with his angry listeners. (“Bring me your rage.”) Then we see a teenage girl named Tess (Taylor Russell) turning up at Lionel’s door. She’s the daughter of Lionel’s good-for-nothing sister Laurie (Tina Benko), who’s currently in rehab again. Lionel is supposed to be a heartless dick, and at first he does make huffy noises about turning Tess away—but he thinks better of them after she threatens reputational repercussions on Twitter. Okay, that’s blackmail. But then, voluntarily, Lionel starts providing Tess with expensive clothing from Barney’s and engineering her acceptance to a posh boarding school. Go figure.
Lionel’s publicist and longtime girlfriend Valerie (Neve Campbell) is quickly stirred into the mix. Val knows that Lionel is a bit of an idiot (he only likes foie gras because it’s illegal in California, she tells Tess), but hey, there’s something about the guy. (Lionel is also cheating on Val with his hot housekeeper—a distasteful fact that the movie never deals with.)
When more plot conflict is called for, we learn that Lionel’s ratings are beginning to slide. The immediate cause of this is a kinder, smilier young rival named Gareth Whitley (Skylar Astin), who was once Lionel’s heir apparent. But there’s also the possibility that the public has simply grown tired of Lionel’s snotty schtick. On the street one day, we see him mobbed by protesters waving signs that say, “Talk’s not cheap, it’s toxic.” This would seem to be a flat-out declaration by the filmmakers of an increasingly commonplace leftwing attitude toward the First Amendment (it’s echoed on the movie’s poster: “We all have a voice. Just be careful how you use it”). But then later, when one of the sign-wavers gets to express his views more fully on Lionel’s show, he proves himself to be an empty-headed fool. Could this be an attempt to offer us another point of view? It feels more like clumsy plot construction.
Even viewers who might find the movie’s message agreeable are likely to reject the puddle of shameless narrative goo into which it begins to sink toward the end. This is a redemption story that owes a lot to the 1976 Network—just not enough. In an on-air showdown with Whitley and a liberal senator (Judith Light), Lionel rounds on the live audience and blames them, not himself, for talk-media’s affronts to common decency. “We just get rich and powerful by yanking your strings,” he says. “Our best days are behind us…The American Dream is dead and buried and you’re dancing on its grave.”
Has Lionel seen the light? Did he actually just say, “Who cares about real feelings when you have emojis?” Can this movie get any dumber? Yes, I’m afraid. And yes, yes.
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