Tijuana: Fed Up & On “On The Brink”

Authored by Sarah Cowgill via Liberty Nation,

The financial burden on the border city is only one cost. Add in crime, illness, and unsanitary conditions…

As thousands of immigrants gather in Tijuana after a months-long march through poverty-stricken countries to reach the Calexico border, it appears the Guatemalan, Salvadoran, and Honduran wannabe refugees are receiving an unhealthy dose of reality.

Their promised America — mostly advertised as a life replete with bountiful resources, including unending welfare, free child care, and high-paying jobs for the uneducated — refuses to process the entire lot.  And as a government scale-back and standoff over border security tediously plods along, legal immigration into the United States is held in perpetual limbo.

What could possibly go wrong?

As Host Cities Go

Tijuana is fed up with playing host-city to some 6,200 migrants bringing illness, creating fear for businesses and residents, and financially burdening the busy border town.  In an interview with Tijuana Mayor Juan Manuel Gastelum, pent-up frustrations were obvious, as he said the caravan is “hitting us hard. It’s costing us 550,000 pesos a day.”  That figure approximates $28,000, but is widely disputed by other officials as nearing an unmanageable $40,000 per day.

Tijuana City Delegate Genaro Lopez Moreno added details about the city’s migrant caravan-induced crisis on Fox News’ program Tucker Carlson Tonight:

“Things got out of hand because they kept growing and growing…

But we’re carrying the financial load of keeping these people with medicine, food, shelter, blankets, and whatever. There’s a lot of trash because the 360 grew to 6,200, and that’s when it got out of hand …

There’s like 1,500 people here, there’s 2,200 people there, and there’s 2,000 people that are not accounted for.”

The situation is overwhelming the town’s mental, physical, and financial resources. And one wonders where the organizers and assistance givers along the route, Pueblo Sin Fronteras, have gone.  If you ask Mayor Gastelum, he is quite clear on the fate of the organizers: “This person who say he’s from Pueblo Sin Fronteras, he say that he’s one of the leaders of the caravan, well, why don’t the federal police say, ‘Hey, hey, come over here.’”  .

The mayor, and most of the migrants, believe Pueblo Sin Fronteras lied about the caravan and how long the asylum process would take. The mayor indicated that representatives of the anti-borders group should be charged with “putting people at risk.”

And then there is the uptick in criminals now living in Tijuana, which accounts for almost 300 arrests for drug possession, intoxication, and breaking and entering.  During the journey, the Department of Homeland Security identified the most pressing concerns for Mexico and the United States:

“…over 270 individuals along the caravan route have criminal histories, including known gang membership. Those include a number of violent criminals – examples include aggravated assault with a deadly weapon, armed robbery, sexual assault on a child, and assault on a female. Mexican officials have also publicly stated that criminal groups have infiltrated the caravan. We also continue to see individuals from over 20 countries in this flow from countries such as Somalia, India, Haiti, Afghanistan, and Bangladesh.”

Liberals can squawk about the bedraggled masses of women and children seeking asylum, but Department of Homeland Security reports warned us that “50 percent are single adults …. Guatemalan Intel Minister said that the caravan is employing tactics to push women and children to the front to act as human shields ….”

Of course, what Americans in their right minds would buy what today’s alt-left Democrats are attempting to sell?

No Mas Caravanas

The people of Tijuana have taken to the streets to rid their city of the unwanted burden of an additional 6,200-plus people roaming around, depleting charity and city resources, with no assistance from the federales in the works.

Carrying handmade signs demanding “no more caravans,” people are speaking to their country and to Americans across the border in solidarity.

Does this sentiment sound familiar? Fidel Ernesto Gonzalez, of Tijuana, demanded the Mexican government secure his country’s southern border with Guatemala, requiring any asylum seeker enter the country legally, with passport and legal paperwork.

“It’s the same thing that Donald Trump is dealing with in the United States. If you want to enter the United States, you can enter, but you have to do so legally.”

Both Mexico and the United States have reached the end of their collective rope on the public relations stunt created and executed by the Democrats. It is obvious they care not for the people involved; they seek only the optics.  But the line between humanity and hysteria, legal and illegal, and the safety and welfare of thousands is beginning to blur.

Build the wall, Mr. Trump, and take no political prisoners in the process.

As Gastelum said, “Tijuana is a city of immigrants, but we don’t want them in this way. It was different with the Haitians; they carried papers, they were in order. It wasn’t a horde, pardon the expression.”

And that is precisely how the majority of Americans feel, Mr. Mayor.

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Why The Real Market Chaos Is Yet To Come: A Surprising Take From Goldman Sachs

If one asks traders what was the common market theme over the past three months, among the various (often angry) answers, one will stand out: general prevailing chaos, manifesting itself in soaring volatility which coupled with record low liquidity and massive trading volumes, resulted in disjointed, erratic price action that crushed all momentum and trend-following strategies (which these days is most of them).

Commenting on this phenomenon, among others, yesterday JPMorgan quant Marko Kolanovic opined, correctly noting that “liquidity has become to a large extent driven by market volatility” reinforcing a negative feedback loop between volatility and liquidity, and as the most recent examples he cited the unprecedented drop in futures market depth or “record low liquidity” we discussed previously (shown in the chart below), the currency flash crash on Jan 2, or the equity market “upside crash” on December 26.

Yet one thing that Kolanovic ignored was the the third aspect of what has recently become the market’s unholy trinity: trading volumes.

Addressing this under-discussed facet of market function, overnight Goldman’s derivatives expert Rocky Fishman pointed out that after nearly a decade of declining market volume, 2018 saw an abrupt reversal in this trend, with high volume growth in SPX E-mini futures (+21%), most S&P 500 ETFs (+40%), and SPX index options (+27%).

On the surface, this appears paradoxical: after all, falling realized liquidity would seem to contradict the observed strong growth in trading volumes of US index products. However, as Goldman points out, when volatility’s impact is considered, delta-one SPX product growth – or volume adjusted for vol impact – was actually low in 2018.

Indeed, when discussing market volumes one must always consider that they tend to be highly correlated with realized volatility, or as Goldman puts it, “there is a high positive correlation between realized volatility and volumes of SPX futures and the three major S&P 500 ETFs (SPY, VOO, IVV).”

The relationship shown in the graph below implies that E-mini SPX futures should trade $200bln notional/day when realized vol is at 10%, and around $260 bln/day when realized vol is at 20%. This relationship is particularly strong for the ETFs (0.88 correlation between monthly unit volume and realized volatility over the past 5 years, vs. 0.80 for E-mini futures).

From this it follows that the spike in volatility in the last quarter of 2018 contributed to high-volume months… however as shown above, delta-one volume was lower than volatility would have indicated. As Fishman notes, the concentration of high-volatility months (five of 2012-8’s ten most volatile months were in 2018) led to a concentration of high-volume months.

However, the last five years’ volume vs. volatility relationship for both futures and ETFs makes 2018’s delta-one volumes appear low for this level of volatility. Furthermore, July and August came with the lowest future and S&P ETF trading volumes in years, even though realized volatility was marginally higher than it was throughout 2017

Another consideration is that the sharp volume gains in 2018 were largely offsetting losses from the record low-volatility observed in 2017. According to Goldman, low volatility in 2017 contributed to reduced future and S&P ETF volumes in 2017, while 2018’s gains largely offset 2017’s losses.

Finally, showing the explicit co-relationships between volume, liquidity and volatility is the following chart which shows that the top-of-book depth, which as we showed previously is record low, tracks the ratio between volume and realized volatility. In other words, “volumes that are low for a given level of volatility may be limited by poor liquidity – or may be leading to poor liquidity” according to Fishman. So whichever way the arrow of causation works (it’s some of each), 2018 came with both poor liquidity metrics and delta-one volume numbers that were lower than would be expected for this level of volatility.

Why is this a concern?

Because in a time when the entire asset class of active investing is increasingly endangered by the encroaching threat of passive investing resulting in prominent hedge funds shuttering left and right and removing marginal market players, and where HFTs are now cannibalizing each other and unable to “provide liquidity”, i.e. offset any sharp jump in trading volume, as a result of unprecedented commoditization of order flow, trading volumes – in both absolute and delta-one terms – will keep declining. This is how Kolanovic explained the recent trends observed in the market:

The depletion of market reversion forces was driven by a decline of value investors (as money moved to passive and systematic strategies), a shift of assets from public to private equity (private equity has a more favorable mark to market treatment, thus creating arbitrage between public and private equity), and a reduction of human risk taking activity after the 2008 crisis (e.g., block traders, prop desks, etc.).

Said otherwise, with volatility expected to keep rising as central bank liquidity withdrawal accelerates in the coming months, something BofA discussed two days ago when it noted that “a flattening in the yield curve over the last three cycles has preceded rising volatility by about three years” and thus “expects a more volatile backdrop for US stocks in the coming years”, going so far as to suggest that volatility will “likely double by 2021″…

absent an increase in overall market volume, liquidity will collapse to even more unprecedented depths as the volume/volatility ratio hits new all time lows.

Which takes us back to something Kolanovic said yesterday, namely that “Equity markets could benefit from a rethinking of the current state of liquidity provision and of market reversion forces.” In this particular case, the JPM quant is absolutely correct, because if the current trend of rising volatility coupled with declining delta-one volumes continues, the result will be a market in which the top-of-book depth eventually collapses to zero and where even the smallest order has the potential to unleash chaos.

Which is good news for all those day traders who hope that the current illiquid, disjointed market state persists… and bad news for those investors who hope for a reversion to prior trends. Because absent another major central bank intervention that eliminates the endogenously rising market volatility, the real chaos is yet to come.

 

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2019 Could Make Or Break OPEC

Authored by Irina Slav via Oilprice.com,

When OPEC+ agreed to begin cutting crude oil production again in December, hardly anyone in the cartel thought the effect of the news on prices would be as lackluster as it turned out to be. It took some time for the fact to sink in that this time too many traders were worried about the future of oil demand and were reluctant to speculate with oil. Now OPEC is facing another tough year, perhaps even tougher than 2016, and it might just need to reduce production even more to make it work.

“Well, J.P. Morgan said prior to the OPEC meeting early December, that if OPEC didn’t really cut by more than around 1.2 million barrels per day, and they did just for the first half, (not) for the full year, that we could gravitate toward … our low-oil-price scenario, which is $55 Brent for 2019,” the investment bank’s head of oil and gas for the Asia-Pacific told CNBC this week.

“We expect oil markets to remain volatile, in part driven by flexible North American shale production that can ramp up and down quickly in response to changes in investment levels,” ConocoPhillips’ CEO Ryan Lance told Bloomberg, also this week.

North American shale production is, of course, the number-one challenge for OPEC’s plans. Two years ago it was easier: nobody was sure exactly how flexible shale oil production can be so the OPEC cuts worked, helped by a brighter global economic outlook. Now, things are different. Shale production is growing despite the slump in prices and although this may change if prices fall further or stay at current levels for longer, this is far from certain: in the last week of December, after prices have been on the decline for three months, U.S. drillers continued adding rigs.

Yet it wasn’t just U.S. production that rose last year: Russia’s hit a new record in 2018, at 11.16 million bpd, which made it the second-largest producer after the United States. Saudi Arabia also pumped at a record level of over 11 million bpd in the months that followed the June OPEC+ decision to reverse the cuts to rein in prices. This is the context in which OPEC+ agreed the new cuts, which were 600,000 bpd lower than the ones agreed in 2016. No wonder skepticism is rife.

Some analysts believe that once the cuts enter into effect, which they did at the start of the new year, the effect on prices will come to be felt. But JP Morgan’s Scott Darling may just turn out to be right: yesterday, news that Saudi Arabia had reduced its crude oil exports by half a million barrels daily pushed up prices only briefly before both Brent and West Texas Intermediate faltered and slid down again.

While six months may be enough to reduce the combined output of OPEC and its partners by the agreed 1.2 million bpd, if U.S. production continues to grow at the current rate, it would likely offset this cut completely. True, the amount of crude that is added or leaves the global markets is not the only factor that counts: the type of crude is also important, and U.S. oil is overwhelmingly light crude, while there is also global demand for heavier grades that the Middle East and Russia produce. Yet grades are rarely the top concern of traders when they hear words like “oversupply”. Volatility, as Conoco’s Ryan Lance said, is clearly here to stay and will likely intensify in the coming months. OPEC might just be forced to extend the cuts it agreed in December if a positive effect from this agreement fails to materialize soon.

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Leave the Strand Alone! Iconic Bookstore Owner Pleads With NYC: Don’t Landmark My Property—New at Reason

If New York City moves ahead with a proposal to landmark the home of the Strand Book Store, it would be putting a “bureaucratic noose” around the business, says owner Nancy Bass Wyden. “The Strand survived through my dad and grandfather’s very hard work,” Wyden says, and now the city wants to “take a piece of it.”

Opened by her grandfather, Benjamin Bass, in 1927, the Strand is New York City’s last great bookstore—a four-story literary emporium crammed with 18 miles of merchandise stuffed into towering bookcases arranged along narrow passageways. It’s the last survivor of the world-famous Booksellers Row, a commercial district comprised of about 40 secondhand dealers along Fourth Avenue below Union Square.

On December 4, 2018, the New York City Landmarks Preservation Commission held a public hearing on a proposal to designate the building that’s home to the Strand as a historic site. If the structure is landmarked, Wyden would need to get permission from the city before renovating the interior or altering the facade.

“It would be very difficult to be commercially nimble if we’re landmarked,” Wyden tells Reason. “We’d have to get approvals through a whole committee and bureaucracy that do not know how to run a bookstore.”

Wyden’s outrage derives in part from her family’s decades of struggle to keep the business alive.

The Strand survived, she says, because of “my grandfather and my dad’s very hard work and their passion…Both worked most of their lives six days a week” and they “hardly took vacations.”

Why can 11 unelected individuals of the Landmarks Commission curtail Wyden’s property rights? Signed into law in 1965, New York’s Landmarks Act was challenged as unconstitutional 13 years later by the owner of Grand Central Terminal, which sued the city for preventing it from building a skyscraper on top of the train station.

The U.S. Supreme Court upheld the law in a 6–3 decision, setting a precedent that in the dissenting opinion of Justice William Rehnquist undermined constitutional protections. As Rehnquist wrote, the city had “in a literal sense, ‘taken’ substantial property rights” from the company without offering just compensation, as required by the Fifth Amendment.

Since that ruling, the number of landmarked properties in New York has more than doubled to about 36,000, encompassing more than a quarter of all the buildings in Manhattan.

Wyden (who is married to Oregon Sen. Ron Wyden) has a big platform, as the owner of a literary landmark in the media capital of the world; The New York Times, The Guardian, Fortune, and the New York Post have all written about her fight with the Landmarks Commission. “I think that there are other business owners like me that ended up just kind of getting trapped in this situation without much of a voice,” Wyden says.

In her simple message to the city—”leave me alone”—Wyden is unwittingly echoing the line of retired public school librarian Ella Suydam, owner of a Brooklyn farmhouse built by her Dutch ancestor, which the city first tried to landmark in 1980. “Who the hell are you to tell me what I can do with my house,” Suydam told the Commission in 1980, intimidating its members into backing off.

The city waited until 1989, when Suydam was dead, to landmark the house.

Most building owners are less successful in their dealings with the Landmarks Commission. When the city proposed designating Manhattan’s former meatpacking district—a neighborhood comprised of 104 buildings—one property-owning family opposed the plan, testifying at a March 13, 2003, public hearing.

“If the buildings become part of a landmark district, this will essentially eliminate new construction,” said Richard Meilman, whose grandfather, a Russian-born butcher, had purchased multiple properties in the area in the 1940s.

The Landmarks Commission designated the properties later that year.

Wyden is committed to preserving the Strand. “I want to continue the Strand forever,” she says. “That’s my legacy and my goal in life.” She just objects to the loss of control.

“Our family’s been a great steward to the building,” Wyden tells Reason. “Two years ago there was a massive sewer fire. It blew out two stories of our windows and rocked the foundation. We restored the windows to the prior look and we restored the pillars to the way they originally had been even before we bought the building.”

The Landmarks Commission will vote on designating Wyden’s building next month. She’s not optimistic.

“I’ve been told that nobody wins with Landmarks, but I want to fight them because it’s just so wrong, and so unjust, and so unfair, and we can’t let them keep running over everybody in their way.”

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Justin Amash: Say You’re Not ‘OK’ With the Wall

WallIf there is one bright star in the bleak congressional landscape, it is Justin Amash, the Republican congressman from my home state of Michigan, who was just re-elected for his fifth term. At a time when almost every other GOP politico has flipped and flopped on Trump, depending on whether his/her political ambitions are served by cheerleading or resisting him, Amash has been a lonely voice of sweet reason. He has unwaveringly stood up to Trump not to score points or advance his career—or his stock among liberals—but for the sake of a principled libertarianism anchored in limited government, markets, fiscal responsibility, pluralism, tolerance, and a humane and pro-growth immigration policy.

So it is very disappointing that he commented this week to the Ionia Sentinel-Standard that he does not have an “inherent” problem with a border wall to control illegal immigration. This shows just how much Trump’s presidency has moved the Overton Window on immigration in general and the wall in particular.

That Sen. Lindsey Graham (R–S.C.), who called Trump “a race-baiting, xenophobic, religious bigot” who “doesn’t represent my party” after Trump proposed his Muslim ban, should now be four square behind the wall is one thing. Graham pulled a Trump Tower–sized switcheroo last year when his poll numbers in South Carolina tanked and it became clear that his #NeverTrump stance might cost him his re-election bid. At that point, he started shooting little Twitter valentines to Trump declaring that the Donald is “just what America needs” because he “relishes being the Law and Order president and a strong Commander in Chief.”

Mitt Romney, the incoming freshman senator from Utah, has pulled another switcheroo of his own. After accepting Trump’s endorsement twice—once before his failed presidential run and then for his Senate bid in the fall—Romney penned a scathing op-ed this week denouncing Trump as “divisive, racist, sexist, anti-immigrant, dishonest or destructive to democratic institutions.” No doubt, Romney is trying to replace outgoing Sen. Jeff Flake as the Senate GOP’s leading anti-Trumper (which would be a worthy goal, except that Romney is no Flake). He too has said he’d vote for Trump’s wall, a position that represents a small glimmer of consistency in Romney, actually, given that he was way ahead of the curve in staking a harsh restrictionist position: Running for president in 2012, he declared that he wanted to push illegal aliens to “self deport”—a position that Trump at the time called “maniacal” and blamed for Romney’s loss.

In contrast to Graham and Romney’s opportunism, Amash has been a sincere and steadfast voice of opposition, a man who consults not his political interests but his bedrock commitments when he opines on Trump’s policies and antics. He has supported Trump’s criminal justice reforms and the few other good things the president has done. But he has also gone after Trump in no uncertain terms for bad-mouthing minorities and immigrants, for proposing to get rid of birthright citizenship by executive order, and for waxing rhapsodic about his “easy to win” trade wars, and for mocking Rep. Mark Sanford for losing the election.

Amash has also called out other Republicans—including fellow members of the misnamed Freedom Caucus—as they’ve drifted toward Trumpism, trading their commitment to limited government and fiscal responsibility for a protectionist, reactionary nationalism. Amash was the only Republican who opposed the House GOP’s resolution last summer “supporting the officers and personnel” of ICE, a bill whose sole purpose was to embarrass the anti-ICE left. In a tweet, Amash denounced as “dubious” the resolution’s claim that ending ICE would allow gangs to roam free. He asked why his party would “treat a federal agency as though it’s beyond reproach and reform.”

So again, it’s troubling that Amash of all people would now be saying that if the wall is “done thoughtfully,” after taking into “consideration private property at the border and environmental concerns,” he’d be “OK with it.”

Walls are the specialty of Communist regimes that regard the outside world as a threat to their control. A wall with Mexico, a friendly neighbor, would be particularly terrible, because it would cut across an area that has historically been integrated around geographic, economic, cultural, and even ethnic lines. Indeed, the border in towns like Laredo, Texas, literally runs through families, with one half living in America and the other half in Mexico. Even mortal enemies like India and Pakistan have not erected artificial physical barriers between them, holding out hope that one day they will bury the hatchet and be united in trade and friendship.

Setting that aside, there are also many practical reasons why the wall would be “inherently” bad and not “OK.”

For starters, as Nick Gillespie and I (and numerous other Reason writers) have pointed out repeatedly, notwithstanding the hysteria about migrant caravans, border apprehensions are at a historic low; the number of Mexicans entering the country without authorization has plummeted, due to entirely natural causes. And it is unlikely to pick up again, because Mexico, like the rest of the world outside Sub-Saharan Africa, has completed its “demographic transition”—meaning its fertility rate has dropped as more infants survive to adulthood—so it no longer has surplus young men to send our way. Indeed, right now there are more Mexicans leaving America than entering. Even if you see immigration as a battle, building a wall would be fighting the last war.

Furthermore, at least half of the unauthorized population consists not of border jumpers but visa overstays (a non-trivial number of who at any given time are illegal because America’s Kafkaesque immigration bureaucracy failed to renew their visas in a timely fashion). A wall will do nothing about that. And the profits for drug smugglers are too huge to be deterred by a wall, as the Bipartisan Institute’s Theresa Brown has argued. Nor will it thwart motivated terrorists. The best way to enhance border security is not a silly wall; it’s to give those who mean no harm legal avenues, such as guest worker visas, to come to America. This will reduce cross-border illegal flows even more, handing America far more operational control over the border far more cheaply.

There is an argument, as I said last week, for paying Trump some ransom money for his wall in exchange for legalizing DREAMers (those who were brought to the country without authorization as minors) and Temporary Protected Status holders (those trying to escape turmoil or violence in their native countries). This is especially true since he has dropped his asking price considerably since the last shutdown. At that time he was demanding $25 billion and a 40 percent cut in legal immigration. This time, he wants “only” $5 billion.

But just because it is sometimes necessary to pay ransom to avoid a bigger catastrophe doesn’t mean it is “inherently” OK, no matter how small the amount.

That Amash, the man with the strongest moral compass in the GOP, should be signing off on a wall rather than calling for a guest worker program shows just how much the conversation about immigration policy has deteriorated in the GOP, compared to the 1980s when such sentiment was conventional wisdom in the party and the country.

Indeed, watch this 1980 debate between George H.W. Bush and Ronald Reagan and weep.

When asked whether kids of illegal aliens should he allowed a free education in public schools, Bush argues “yes.” It would do no good to anyone to deny them an education, he says. Then he goes on to point out that the only reason that substantial illegal immigration even exists is because America has made certain forms of labor that should be “legal” “illegal,” turning a whole bunch of “honorable, decent, family-loving people” who are “good” and “decent” and “part of my family” into law breakers.

Reagan one-ups Bush and says that “barriers” are not the answer to dealing with all the unemployed youth in Mexico at that time who wanted to come to America to work. “Open the border both ways,” he declares, calling specifically for “work permits” so that Mexicans can “come and go” legally from America. He points out that the fact that Mexicans can come to America to work is a “safety valve” that “prevents the lid from blowing off down there” and calls for working with Mexico in a “mutual recognition” of our common problems. No idiotic demands that Mexico pay for a wall. No denouncing it for sending “rapists” and “criminals” and not its “best people.”

Sad!

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Senate Bill Seeks Aggressive Clamp Down On Chinese Tech Espionage

After top FBI officials testified before the Senate Judiciary Committee last month that Chinese espionage poses the “most severe” threat currently facing American security, and after greater scrutiny of major Chinese telecommunications that had before operated with seeming impunity in the US like Huawei Technologies Co. and ZTE Corp.  especially following the arrest of Huawei’s CFO Meng Wanzhou and others in Canada — senators are now proposing a bill to combat technology threats from China

Senators Mark Warner and Marco Rubio during a previous press conference on Russian election meddling. via Getty

Senators Mark Warner and Marco Rubio are co-sponsoring legislation that seeks to counter the risk of state-sponsored technology theft by establishing an “Office of Critical Technologies and Security” overseen by the White House. The bill would add greater teeth and oversight to current Trump administration efforts to quash Chinese attempts at stealing technology secrets from US firms, which often also involves supply chain infiltration at foreign manufacturing sites, following a related bill signed into law last August which attempted to strengthen a panel that reviews foreign-based investments in the US for national security risks, but which was widely viewed as “watered down” when it came to China

Mark Warner (D-VA) described, “It is clear that China is determined to use every tool in its arsenal to surpass the United States technologically and dominate us economically.” Continuing his Friday statement, he said, “We need a whole-of-government technology strategy to protect U.S. competitiveness in emerging and dual-use technologies and address the Chinese threat.”

And Rubio (R-FL) specified the China tech theft threat as follows

China continues to conduct a coordinated assault on U.S. intellectual property, U.S. businesses, and our government networks and information with the full backing of the Chinese Communist Party

Rubio added, “The United States needs a more coordinated approach to directly counter this critical threat and ensure we better protect U.S. technology.”

This follows months of multiple major instances of China caught in brazen acts of theft of American technology and trade secrets, though which only very slowly picked up steam in the mainstream media. 

Trump has consistently blasted China’s “unfair trade practices” which includes stealing US intellectual property as the “cost of doing business” with Beijing. The issue has sent tensions soaring amidst a trade war that’s already disrupted the flow of hundreds of billions of dollars worth of goods, potentially slowing growth. 

Last month Presidents Trump and Xi Jinping called for a truce in their escalating trade war following a sideline meeting at the G20 summit in Buenos Aires, and starting early next week the two sides are set to hold governmental trade talks in Beijing (Jan 7-8).

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Hackers Release Personal Data On Hundreds Of German Politicians

The personal data of hundreds of German politicians including Chancellor Angela Merkel have been released in the largest data dump of its kind in the country, according to the Bloomberg

The leaked information includes personal chat transcripts, mobile phone numbers, email addresses and photo IDs, according to a review of the records. The records have been released over the past several weeks beginning right before Christmas via a Twitter account named “G0d,” which has been around since mid-2017 and identifies as a Hamburg-based “artist” involved in “security researching” and “satire & irony.” 

Notably, Germany’s right-wing party, AfD, was unaffected by the hack. 

It looks like the hackers got the passwords to Facebook accounts and Twitter profiles and worked their way up from there, said Simon Hegelich, a political scientist at Munich’s Technical University who has studied the manipulation of social networks.

“It’s a very elaborately done social engineering attack,” he said Friday by phone. “It’s a lot of data that’s been dumped.”

The German government is taking the attack “very seriously,” spokeswoman Martina Fietz said a briefing with reporters on Friday. –Bloomberg

“I can confirm that there has been an incident,” said a Linke party spokesman, whose members were among those targeted. That said, no politically sensitive documents have been released as part of the breach, and some of the information appeared to be several years old. 

Germany’s Federal Office for Information Security, known as BSI, is heading the investigation into the data dump at its cyber defense center. So far the agency has no indication that government networks have been affected, the BSI said on Twitter. Germany’s domestic intelligence agency BfV is reviewing the data and can’t yet comment because of the volume, a spokeswoman said. –Bloomberg

The perpetrators want to erode trust in our democracy and in our institutions,” said German Justice Minister Katarina Barley to news agency DPA. “Criminals and their backers must not be allowed to dictate debate in our nation.” 

It is unknown if the hack is connected to a 2015 incident in which the Bundestag parliament network was breached and 16 gigabytes of data was stolen. According to security firm Trend Micro, the Bundestag attack and others have been linked to the hacking group Pawn Storm. 

“This hack is different from breaching the Bundestag networks — which required a much higher level of sophistication,” said Munich Technical University political scientist Simon Heglich. “But they’re no kids either. It’s people that know about IT security.

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The SIX dumbest and most absurd stories of 2018

Every week we send out an alert to our premium subscribers highlighting important news that often goes overlooked…

We scour through recent court cases, laws moving through congress, whispers in the government and various, international news sites to find the latest things happening that could infringe upon your freedom… or that just make us laugh and cringe due to the never-ending stupidity of governments around the world.

If we had to pick one, dominant trend for 2018, it would be the rise of the “snowflake.”

It seems last year, everyone was a victim… and if you had an opinion on anything, you risked “triggering” huge amounts of people who would then retaliate your horrible offense with a social-media lambast.

We’ve compiled six of the most ridiculous stories we encountered in 2018.

Ironically, while humor seems to be dead in greater society, these stories are damn hilarious, and some are outright absurd.

Let’s get started…

1. Is Vegan a religion?

A British vegan man expressed concerns that the company he worked for invested money from its pension funds in non-vegan companies.

Then he was fired.

He sued, and now, a British court will decide if vegans should have protection, just like religions, for their beliefs.

If the court rules in his favor, British vegans will be protected by law against workplace discrimination based on their “beliefs.”

The further we go on with this whiny, victim mentality trend, the more claims anyone could have to consider themselves discriminated against.

Fired for being too short, old, fat, bald or sexy.

The company said they didn’t fire him because he’s a vegan…

You know, there’s always the chance he’s just an incompetent dolt.

2. Climate Activists did only what was necessary to save us all

If you broke into a home to save a child from a raging fire, you probably wouldn’t face any criminal charges.

But if you did, you could use the “necessity defense.” It was necessary to break the law to save the child. The emergency made the law unnecessary under the circumstances.

Climate activists tried to use that same defense.

They trespassed on private property and tampered with an oil pipeline. The emergency they say is global warming.

Using the emergency shut off valve on the pipeline was necessary to stop climate change, they argued.

An appeals court agreed and said the activists could use the “necessity” defense.

But the tactic never got tested in court.

In October, charges were suddenly dropped against the activists. This actually upset some activists who hoped that the case would set a precedent for future “necessity defenses.”

Just cutting the carbon footprint. It’s an emergency.

So luckily they haven’t yet legalized destroying cars, raising cattle, cutting power lines, and murdering countless people in the name of stopping climate change.

3. Scotland Cracks Down on the Right to Peel Potatoes

Things might be different if William Wallace had prevailed…

Scottish Police arrested a man for possession of a dangerous weapon in public. He was carrying a potato peeler.

Being “in possession of an object which had a blade or was sharply pointed,” carries up to four years in prison as Great Britain cracks down on a rash of knife violence.

But guys with potato peelers probably aren’t the main source of knife crimes in the UK.

Now who’s going to make all the chips?

4. Charleston Teen Arrested for Hard Work and Entrepreneurship

He wasn’t selling drugs on the corner. This Charleston teen was selling palmetto roses: handcrafted souvenir roses woven from palms.

And Police actually arrested the teen for this unauthorized entrepreneurship.

See, the city of Charleston runs the Palmetto Artisan Program. The program is meant to teach entrepreneurship skills to 9 to 16 year-olds. It is illegal for nonparticipating youth to sell palmetto roses within the city.

Adults over the age of 18 in the city are free to craft and sell their own palmetto roses.

Apparently there is no legal way for a 17-year-old to sell palmetto roses in Charleston.

But this teen and many others consider the Palmetto Artisan Program too restrictive.

It requires youth to waste a full week “training” for something they already know how to do.

God forbid they make more money selling the roses on their own.

So Charleston isn’t really teaching a lesson in entrepreneurship. It’s a lesson in cronyism and overregulation. Get the government to arrest your competition, and it’s easy street!

Great job, Charleston. You really taught this teen a valuable lesson about the sorry state of American entrepreneurship.

5. France Outlawed Vegan Lies Meat Terms for Veggie Products

How many times have you gone to the grocery store looking to purchase something that has been brutally slaughtered, only to be tricked into buying a soy substitute?

The French parliament had enough, the great patrons of steak and béarnaise sauce, and criminalized using meat terms to describe non-meat products.

For instance, a company that describes their flattened bean and tofu patties as veggie-burgers will be fined $300,000.

The same goes for calling non-animal products milk. Do almonds have udders? No. That is nut protein dissolved in water.

The French government was concerned that shoppers were being misled by terms like “vegan-bacon” and “meat-free-sausage.”

It might not surprise you that the law was crafted by a cattle-farmer. Just get rid of that pesky free speech and he can sell more meat!

Since 2013, the European Union has required all products with traditional dairy names to come from “normal mammary secretion.” They grandfathered products like coconut milk and peanut butter.

Meanwhile in the US, you can still call your pureed-veggie-tubes meat-free hot dogs.

A similar class action lawsuit was dismissed in US courts. Judges said that no reasonable consumer would be misled by terms like almond milk.

6. Jail Time for Plastic Straws

California was all set to slap the cuffs on that poor teen just trying to make a living waiting tables.

In early 2018, California lawmaker Ian Calderon introduced state legislation that would have made it illegal for a waiter to bring a customer a plastic straw unless specifically requested.

Wait staff who dropped an unrequested straw on the table could have faced up to six months in jail, and a $1,000 fine.

Calderon said that the excessive penalties automatically apply to any new misdemeanor.

So no matter how trivial the rule, boom, maximum fine and maximum prison time.

That exact bill never passed. But a different California law went into effect January 1, 2019 banning plastic straws in some restaurants. The new version only carries a fine to the restaurant of up to $25 per day, maxing out at $300 per year.

__

There you have it. Six of the most absurd stories we encountered in 2018.

From a teenager getting arrested for working hard making palm roses to veganism being considered a religious belief.

If you’ve ever wondered what you’re government has been up to… here’s a brief snapshot.

Also, we’d love your feedback on today’s Notes… would you like to see more content like this in the future? Let us know at admin@sovereignman.com

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Musk Deletes Tweet Incorrectly Praising Tesla After Bloomberg Fact Check

Even though Tesla’s fourth-quarter delivery numbers missed estimates and disappointed investors enough to send the stock lower after they were announced in tandem with an announcement of new price cuts, it didn’t prevent CEO Elon Musk from being in a boastful mood about his company‘s progress on Thursday. His excitement only lasted a couple of hours, before Bloomberg brought Musk back to reality.

Musk was encouraged to brag after an article by a Forbes contributor incorrectly stated that Tesla had outsold Mercedes-Benz in the United States for the three month period. “Tesla managed to cross the 2018 finishing line well ahead of all its competitors in the U.S. premium automotive market,” the Forbes article stated

Musk then tweeted out the article to his nearly 24 million followers.

The only problem? Tesla did not outsell Mercedes in the United States. For a chief executive officer so obsessed with journalistic integrity and accuracy, Musk failed to understand that the delivery number used for Tesla’s quarter was a global sales number, and not a US-only number. Bloomberg wound up setting the record straight in a brief article a couple hours after Musk’s tweet.

“The problem is, the 90,700 delivery figure Tesla reported was a global result. Mercedes sold 90,575 in the U.S. alone during the same period,” Bloomberg corrected. 

After making it clear that the CEO of the company didn’t seem to understand the difference between domestic sales and global sales, Bloomberg still tried to extend an olive branch by stating that BMW had, at least, acknowledged that they existed. 

“Tesla is now ramping up their volumes, and it’s putting pressure on that market segment,” BMW’s North American CEO is quoted as saying.

Shortly after Bloomberg’s correction, Musk deleted his original tweet, which was formerly at this link.

Perhaps in addition to having somebody examine Musk’s tweets in order to make sure that they don’t break securities laws, Musk can also hire a Twitter fact checker. Regardless, Pravduh scores for both Forbes and Bloomberg likely got taken down a peg today.

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Most Americans Want Congress to Fix Budget Crisis, Increase Spending. Huh?

If you’re concerned about the ever-expanding federal budget deficit, you probably think the government needs to, you know, spend less. Right? Maybe not.

Most Americans believe addressing the budget deficit should be one of the new Congress’ top priorities, according to a Harvard-Politico poll released yesterday. But a majority of respondents also want Congress to increase spending in a variety of areas, including infrastructure, education, and the military.

Eighty percent of respondents say it’s “extremely important” that Congress take “steps to substantially reduce the federal budget deficit.” This seems to be a bipartisan issue, with 81 percent of Republicans and 76 percent of Democrats in agreement. This concern over the budget deficit isn’t new. A Gallup poll from last March showed that 77 percent of Americans “personally worry about federal spending and the budget deficit” either a “great deal” (51 percent) or a “fair amount” (26 percent).

And there is plenty of cause for concern. It’s hard to believe that as recently as 2001, the federal government posted a budget surplus (albeit a small one). In 2002, we were back in the red, with a $158 billion deficit. Now the Congressional Budget Office has projected a $981 billion deficit for the 2019 fiscal year. By 2020, that number will likely surpass $1 trillion. And the deficits from recent years have piled up, with the national debt reaching an astounding $21.974 trillion at the end of 2018.

So it’s not a shock that people are worried. The problem is that Americans—both Republicans and Democrats—seem to want to keep spending anyway. Seventy-nine percent of respondents, including 82 percent of Democrats and 81 percent of Republicans, believe “increasing spending on the nation’s infrastructure” is “an extremely important priority.” Bipartisan support for this issue may explain why White House counselor Kellyanne Conway suggested recently that even with Democrats in control of the House, both parties could work together on an infrastructure bill. It’s not exactly clear what that legislation would look like, though President Donald Trump promised $1.5 trillion in infrastructure spending during his campaign.

Infrastructure isn’t the only area where most Americans want to see more spending. Seventy-three percent of respondents—including 84 percent of Democrats and 65 percent of Republicans—want Congress to raise federal spending on K–12 education. This would likely mean an increase over the $40.1 billion appropriated by the federal government for elementary and secondary education in 2019.

Finally, the poll shows that 53 percent of Americans want Congress to increase spending on the military. This idea is more popular among Republicans, 68 percent of whom agree ith it, though nearly half of Democrats (46 percent) support it as well. Of course, the nation already spends on astronomical amount—$686 billion in 2019—on the Pentagon. But sure, let’s throw more money its way!

Federal spending on infrastructure and education is not the main reason the government is nearly $22 trillion in debt. Military spending is a major factor, but the biggest culprits are entitlements, including more than $1 trillion for Social Security and roughly $625 billion for Medicare in 2019. This sort of spending is not sustainable. If no major changes are made, both programs will be insolvent within the next 15 years.

Now in this particular poll, those who said Congress should address the budget deficit came from a different sample from those who said they want Congress to increase spending in the areas described above. Still, the results suggest there’s probably significant overlap. But you can’t have it both ways. Either politicians take real steps to cut spending and balance the budget, or they keep on spending wildly. There’s really no in-between.

The results of the poll make sense. In theory, everyone wants to fix the budget deficit. But the best way to do so is by cutting spending, which no one wants to do, rather than increasing it, which a lot of people seem to like.

And the attitudes of the public reflect the approaches taken by the leaders they elect. Take Trump. Back in 2016, he told The Washington Post he could eliminate the national debt in eight years. Still, he explicitly promised during his campaign not to cut Social Security or Medicare spending. And in case his lack of interest in addressing the deficit/debt wasn’t apparent, The Daily Beast reported last month that Trump has said of the looming debt crisis: “Yeah, but I won’t be here.”

Trump was really just saying aloud what other politicians are no doubt thinking. Even former House Speaker Paul Ryan (R–Wisc.), a supposed budget hawk, was a complete failure when it came to balancing the budget.

So here’s the biggest takeaway from the Politico-Harvard poll: Plenty of people want Congress to tackle the budget deficit crisis, unless that means reigning the government’s wild spending. It probably won’t be long before we see how that works out.

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