iftttwall

Authored by Jeffrey Snider via Alhambra Investment Partners,

Rate Of Change

We’ve got to change our ornithological nomenclature. Hawks become doves because they are chickens underneath. Doves became hawks for reasons they don’t really understand. A fingers-crossed policy isn’t a robust one, so there really was no reason to expect the economy to be that way.

In January 2019, especially the past few days, there are so many examples of flighty birds. Here’s an especially obvious, egregious one from Atlanta Fed President Raphael Bostic. He was so damn positive at the end of October just three months ago he admitted it was giving him problems wordsmithing. Two and a half months, really.

The economy is in a good place. So good, in fact, that as I was sitting down to write this speech, I struggled to come up with sufficient variations on the word “strong.” Strong has many definitions that can describe physical prowess, the intensity of an odor or flavor, and, in physics, a type of force between particles. But one definition stands out to me as particularly apt to describe the economy at this moment: strong—able to withstand great force or pressure.

And now this week:

So grassroots intelligence from Main Street and messages from Wall Street indicate heightened uncertainty and concern about the economy. But the aggregate economic data continue to paint a robust picture. What is a policymaker to conclude from these mixed signals?

To me, the appropriate response is to be patient in adjusting the stance of policy and to wait for greater clarity about the direction of the economy and the risks to the outlook.

So, maybe unable to withstand great force or pressure? You don’t go from strong to heightened uncertainty in a matter of weeks unless it wasn’t ever strong to begin with. Using the same dictionary as President Bostic, it tells me the antonym for “strong” is “weak.”

Memo to Economists: stop using the unemployment rate, this “aggregate economic data” point will let you down every time. Every time. It’s easy to try and ignore the participation problem, but there is no escaping the global “L.”

But this isn’t really about that; or, more accurately, our desire is to use this more comprehensive and appropriate reading of the past in order to better analyze future prospects. The way in which the global economy is turning is a shocking surprise to those like Bostic who thought it was strong. Realizing it wasn’t, the nature and more so the speed of its deterioration isn’t at all unexpected.

Leading the way forward, meaning downward, is China. The Chinese economy in 2017 was practically begged to be the centerpiece of globally synchronized growth. As 2018 rolled onward, it became increasingly clear it hadn’t and wasn’t ever going to. As each month flips on the calendar, there are only indications of bad things just ahead.

Today, China’s CPI was reported to have fallen below 2% again in December 2018. This despite a relatively high (for recent times) rate of food inflation. In the West, consumer prices overall are pushed around by oil. In the East, by food. Thus, given 2.5% in food price inflation a 1.9% headline (down from 2.2% in November, and 2.5% in October) is somewhat concerning.

The bigger problem is factory pricing. China’s PPI rose by just 0.9% year-over-year in December. It’s down sharply from 2.7% in November and 4.6% as late as August. No one should ignore the gamma, the rate of change (this means not just how fast factory gate prices are decelerating, but also how quickly and substantially Federal Reserve officials change their tune).

Raphael Bostic almost certainly doesn’t care about Chinese prices, but he should pay close attention to them. Everything we want to know about the global monetary system and therefore the direction, and strength of direction, for the global economy is contained in RMB.

Monetary constraint is the primary reason for the speed of the economic deceleration, a coincident occurrence with so much market disaster that just isn’t coincidence. Dollar short + dollar shortage = hawks becoming doves in the blink of an eye.

The eurodollar market restricts the flow of “dollars” into China, therefore the central government through the central bank (and others) steps in to try and fill the gap. By doing so, the PBOC is constrained on its own money side. RMB money suffers.

These RRR cuts are a poor offset to the more basic deficiency, counting on banks to supply necessary liquidity (even plain money) during times of turmoil. In 2015, they understandably chose to hoard and the policy was foiled. How about 2018? Seems the same so far.

Chinese missteps are global missteps because of the world’s reserve currency’s renewed dysfunction. What’s happening now is merely confirmation that economy is reacting as expected to textbook monetary restriction. Eurodollar #4 is more and more visible beyond currency prices or the alarming behavior of esoteric money statistics.

Unless something is done, what will happen next is what always happens next – four times so far. The economic confirmation proves the risks, which will lead to further monetary constraint and then further economic deceleration (or contraction).

Mr. Bostic goes from “I struggled to come up with sufficient variations on the word strong” to “heightened uncertainty and concern” in less than three months and Eurodollar Bank #6 thinks it’s a good time to adjust (pare back) more than it already has. China’s PPI just confirms the wisdom of noticing the deterioration and not waiting for Bostic to catch up (assuming he ever does).

What can be done to stop this? This is, actually, China and the world’s grand predicament. The Chinese have tried to start the process of circumventing the eurodollar for years, almost exactly a decade since former PBOC Governor Zhou Xiaochuan first raised the issue of offshore, credit-based money in March 2009. The Chinese yuan just isn’t an acceptable alternative no matter how many times people keep saying it is happening (if it was, they would’ve done something long before 2014, avoiding suffering the grave consequences of the downturn that followed).

And they can’t even get the idea of a cooperative replacement off the ground because Economists. The latter are convinced the Federal Reserve is staffed with competent experts who know what they are talking about. There can’t be a global dollar problem because surely someone would’ve said something long before today. Who is Yi Gang going to negotiate with, Raphael Bostic?

That’s way too far off in the future, so we are left with what increasingly looks to be inevitable. We’ve had more than a year for any possible deviations from this course, and yet the global economy has been locked in this direction as if set by autopilot. The fact that central bankers are shocked by this development is an indictment of central bankers, not cause to doubt the development.

The only thing that is or has been truly strong is the eurodollar system’s intermittent drag, that which is now being captured by the rate of change in more and more places.

How do you spell eurodollar economy? L.

via RSS http://bit.ly/2smjMKA Tyler Durden

Despite its continued posturing of confidence behind full self driving (“FSD”), Tesla has been reportedly warning potential buyers that the activation of the package – a package that Tesla has been taking $3,000 deposits on for years now – could still be “very far away” due to regulations.

This follows a report that we put out back in October about Tesla removing full self driving options from its website, creating confusion for those who have already paid for it. The option was introduced back in 2016 alongside of Autopilot 2.0 and has yet to materialize in any functional or meaningful fashion. Tesla’s line at the time was that it was going to release FSD through over the air updates after receiving regulatory approval.

But here we are, two years later – of course – and that is yet to happen. And despite taking the option off of the website, Tesla has always claimed that they’re still working on it. And now, lucky buyers can still order it as an “off the menu item” for $5000. However, sales advisers at Tesla that process orders have been warning potential buyers that the package will likely still be “very far away”.

According to the pro-Tesla lot over at electrek, one sales adviser said: “Before I take your order for the FSD, I would like to point out that the legal aspect of Full Self Driving is very far away. Especially in Europe, the USA might be closer to get it legalized.”

People that have ordered the full self driving capability package will get the Hardware 3 Autopilot computer as a retrofit for their vehicles once it becomes available. This hardware is already being tested in employee vehicles. To entice its staff to become beta testers, Musk told his employees they’d waive its now $8,000 cost. 

“If you elect to participate in the program and provide feedback for improvement to the Autopilot team, the $8,000 cost of FSD will be waived. This is on a first to purchase basis and will close as soon as we have enough participants. this is the last time the offer will be made.”

However, sales advisers have reiterated that the package could still take “a very long time”, even after the Autopilot Hardware 3 is installed.

“So even when we have the hardware ready, and your car would have it, you would most likely not be able to use it for a very long time,” an adviser told electrek.

FSD features were a $3,000 add-on for Tesla models that the company began offering as an option in October 2016. Supposedly the $3,000 would enable you to eventually unlock a feature that would allow your already-hardware-equipped Tesla to make door to door trips for you in their entirety: the driveways, the back roads, the unmarked city traffic, the highways, and back to the driveways and parking lots again.

FSD remains the crux behind many bullish Tesla price targets, including Ark’s mentally unstable optimistic $4,000 price target, which relies heavily on Tesla Mobility. Full self driving was touted as a step above Autopilot, which isn’t really Autopilot, so much as it’s essentially just enhanced cruise control that still requires the driver’s attention. 

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The dramatic flip-flop by Jerome Powell over the past month, when the former lawyer and PE partner mutated from a bubble-busting hawk to a BTFDove in response to the market’s reaction to the Fed’s “autopilot” comment on the Fed’s balance sheet, was not the first time the Fed chair radically reassessed his monetary policy view in response to the market.

He also did so back in 2013, before and after the Fed’s bond tapering announcement, when the US central bank first hinted it would start reducing its bond purchases as it sought to normalize its balance sheet, and which culminated with the infamous Taper Tantrum of 2013 when bond yields spiked and stocks tumbled over fears the Fed was removing the market’s training wheels.

As a reminder, during a May 22, 2013 congressional hearing, Ben Bernanke for the first time discussed an end to the bond purchases which sparked the “taper tantrum,” sending up bond yields and sparking an outflow of money from emerging markets.

Well, the just released transcript from the May 2013 FOMC meeting , the one just prior to Bernanke’s May testimony, reveals that Powell was ready to begin reducing bond purchases as soon as the June meeting. His concern at the time was reasonable and probably the same one he in late 2018 when he was eager to push on with his “autopilot” comment while continuing to hike rates, to wit:

… we have closed off all the off-ramps except one, and we could be sitting here in a year having this conversation trapped by market expectations.  The case for tapering would be that since the program was initiated in September, we’ve achieved substantial progress toward our economic objectives in the form of lower unemployment and higher payrolls.” As a result, Powell said that “we ought to take the next plausible opportunity reduce the pace of purchases, and I hope that time will come in June“

… although he did leave himself an economic, but not market-dependent, loophole, saying that “if the data are bad in June and it’s not plausible to taper, I will support tapering at the next reasonable opportunity.  If the data are really terrible, I’m also open to increasing purchases.“

As the WSJ notes, Powell also appeared confident at the meeting that the central bank could communicate its plans in a way that wouldn’t roil markets, with Powell saying something prophetic that would come back to haunt him just over 5 years later:

As a practical matter, let me say that, in my view, it’s never going to be a good idea to surprise the market by a surprise tapering or to say that the tools have stopped working… This can be managed. This is not an unmanageable thing in the context of reasonable economic data. We showed, after the last meeting, that this is something that can be done.  This is not going to be done in a way that provokes a massive reaction of shock from the market.

Well, oops, because for those who are too young to remember, what happened next is that… the market was shocked, and the 10Y yield soared 100 bps from the start of May 2013 to late June 2013 as traders freaked out that without the Fed there to backstop TSYs, prices would tumble.

The result was a surge in the dollar, a sharp drop in EMs, and a hit to stocks, and then to the June 19 FOMC meeting, when Powell found out just how easily markets can be shocked, and that the sharp spike in yields was a “dangerous state of affairs.” Here’s why:

My conversations with investors carry a clear message that we have all heard, which is that the market does not understand when we will reduce purchases or why. And that has got to be one reason why the financial market reaction in fixed-income markets here and around the world has been stronger than I would have expected. This is a dangerous state of affairs, and I see the main purpose of this meeting, and the Chairman’s press conference, as addressing that.

Ironically, Powell once again knew what was going on – namely that the market simply can not operate without the Fed’s “visible hand” propping it up, and certainly not infinitely, but when the market panicks, as it did in the summer of 2013… and as it did in December, there was nothing Powell, first as Fed governor and then as Fed chair, could do besides offer some more Kool-aid to the market.

In a sense, as some have argued, the increase in rates has been healthy, as investors are becoming aware that low rates are not going to last forever and are taking appropriate measures. But it will not be healthy or warranted if, for example, the 10-year rate backs up another 50 basis points, or if investors move the liftoff date or, for that matter, if investors conclude that serious consideration of reducing purchases is postponed indefinitely. So it will be very important to leave the markets feeling much more certain about the Committee’s intentions.

Powell’s parting recommendation: “it’s important that the Committee, by which I really mean the Chairman, assert strong leadership to the markets on this issue at this time.”

Bernanke did just that and the Fed ultimately waited until December to taper the purchases, due to the market’s initial tantrum to taper announcement. In the end, the market realized that tapering was inevitable and resumed purchases of bonds.

Which begs a question: having observed one such market shock in response to a Fed statement, which however did nothing to alter the Fed’s plans to eventually not only taper but also ultimately begin shrinking its balance sheet, will Powell do the same this time, and having observed the initial “freak out” in the market last December, the FOMC chair will continue shrinking the Fed’s balance sheet, ignoring the market’s “shock”, or as so many have suggested, will Powell now be forever “trapped by market expectations” having tipped his hand that the “Powell Put” is just above S&P 2,300, and cave every single time traders decide to take the market hostage and demand concessions from the Fed by hammering stocks lower, especially with Trump breathing down his back.

We don’t know the answer yet, however as the latest set of FOMC transcripts made all too clear, everyone at the Fed is quite aware that its monetary policy is nothing but alcoholic-spiked Kool Aid designed to boost markets as the following excerpt from the Dallas Fed’s Dick Fisher in the January 2013 FOMC meeting reveals:

… as Charlie Evans referenced the paper yesterday and as the paper argues, we do have a pretty well-stocked cabinet. We still have excess reserves of $1.52 trillion as of the statement of January 23—that’s 92.9 percent of reserves—and a monetary base at $2.7 trillion. So I think Koenig and Atkinson are right. We’ve installed a liquor cabinet in the Fed’s rec room. It’s fully stocked with an assortment of booze.

… yet even Fisher, arguably one of the biggest Hawks in Fed history, did not advocate cutting off the monetary heroin:

I want it clearly understood that I am not advocating going cold turkey—so, basically, no migration—to use and kill the liquor cabinet image—from Wild Turkey to cold turkey.

… even as he admitted that the Fed has done nothing to boost the economy, and all it does is to stimulate markets:

We might take credit for the perceived improvement in the economy, but nearly all of the money that we’ve created remains in the form of excess reserves. It isn’t circulating through the economy. What we have done, basically, is to provide a monetary head fake.

And then this punchline, also from Fisher:

I discussed views with some 25 market veterans in New York, and you’re going to be coming down as our guest to discuss with some of the local Texas market operators. I would say one consensus, and one only, emerged, and that is that quantitative easing is unambiguously inflating asset prices and, according to some, is distorting financial market functionality. As one said, artificially low interest rates invite fiscal sin.

Good luck with that normalization.

via RSS http://bit.ly/2Foq2Jw Tyler Durden

Continuing his eight day tour of the Middle East which kicked off with a speech at Cairo University, Secretary of State Mike Pompeo has announced the United States will host an international summit next month focusing on Middle East security and Iran’s regional influence in what appears the latest attempt to reassure allies like Israel and Saudi Arabia that in pulling out of Syria the US will still seek to prevent Iranian expansion and entrenchment in the region. In total Pompeo will visit nine nations, including Gulf GCC countries were he’s expected to continue a heavily anti-Iran message to allies. 

In an interview with FOX while speaking from Cairo, Pompeo said the international gathering would take place Feb. 13 to Feb. 14 in Poland to “focus on Middle East stability and peace and freedom and security here in this region, and that includes an important element of making sure that Iran is not a destabilizing influence.”

“We’ll bring together dozens of countries from all around the world,” he added, noting that invitees would include leaders from Asia, Africa, the Western Hemisphere, Europe and the Middle East, according to FOX. The White House has in recent months sought to keep up an intense “pressure campaign” on Iran and new sanctions after pulling out of the 2015 nuclear deal.

The US has also warned Iran to cease it’s “illegal” space program to launch satellites into orbit, saying the ballistic technology used in tests and launches only serve to further Iran’s nuclear delivery capability. Early this month Pompeo threatened Iran via Twitter statement over plans to fire off Space Launch Vehicles which possessed, as Pompeo claimed, “virtually the same technology as ICBMs” in a “defiant” launch that will “advance its missile program” — a threat which Tehran rebuffed. 

Notably, France on Friday affirmed Pompeo’s warning, and in a statement condemned Iran’s upcoming space launches. After Iran again announced it plans to put two satellites into orbit in the coming weeks,  Foreign ministry spokeswoman Agnes von der Muhll told reporters, “France recalls that the Iranian missile program is not conform with U.N. Security Council Resolution 2231,” and added, “It calls on Iran to immediately cease all ballistic missile-related activities designed to carry nuclear weapons, including tests using ballistic missile technology.”

Iran, for its part, has always maintained it is free to develop a “peaceful” space program, pointing out that the wording of the UN resolution leaves open the possibility of missile development programs unrelated to the delivery of nuclear weapons. 

The resolution says that Iran “is called upon” not to undertake any activity related to ballistic missiles “designed to be capable” of nuclear warhead delivery while stopping short of explicitly banning the activity.

Meanwhile, on Friday the US Secretary of State arrived in Bahrain, after which he will visit the United Arab Emirates, where he’s expected to push both a unifying message among increasingly splintered Gulf allies amidst an ongoing dispute with Qatar and give reassurance that the US is not abandoning the region to Iranian influence by its Syria exit. Toward this end he’ll promote the administration’s idea of an “Arab NATO” to counter Iran in the broader Middle East. 

Ahead of Pompeo’s tour of the Gulf states, the State Department issued a formal statement saying American partnerships with the members of the Gulf Cooperation Council (GCC) “are critical to achieving shared regional objectives: defeating ISIS, countering radical Islamic terrorism, protecting global energy supplies, and rolling back Iranian aggression.”

During the Friday FOX interview, Pompeo made some especially revealing comments about how the White House sees Syrian President Bashar al-Assad’s future:

Pompeo’s predecessor, Rex Tillerson, said in October 2017, that Syrian President Bashar al Assad had no role in Syria’s political future, but when asked whether that is still the U.S. position, Pompeo today said the Assad regime will be part of those conversations.

“We want to make sure all the options are open as that political discourse begins,” Pompeo said. “We are very hopeful that we will get the bad actors in the region, the Russians and the Iranians, to come to the table, along with the regime and all the other stakeholders in there to come to the table and have conversations about what a post-civil-war political structure might look like in Syria.”

Pomepo ultimately suggested the fate of Assad will be in the Syrian people’s hands, in what is perhaps the most significant acknowledgement of Washington’s complete turnaround on Assad to date. This as it appears President Trump’s promised US troop “full” and “immediate” withdrawal from Syria appears to finally be in motion. 

via RSS http://bit.ly/2FmK2NG Tyler Durden

Submitted by Bill Blain of Blain’s Morning Porridge

“I laughed and shook his hand, and made my way back home..”

I’m wondering if We Work (or the We Company as it now grandly calls itself), is likely to be the car crash that causes the almighty pile up in the Unicorn/Tech Market we’ve so long expected?  The spark that ignites the conflagration to restore valuation common sense?

What is WeWork’s EBITDA? Whatever you want it to be pic.twitter.com/qOtttcgRBA

— zerohedge (@zerohedge) May 1, 2018

I didn’t have time yesterday morning to launch into an analysis of the Softbank/We Work farago, but a number of readers came back with similar concerns.

In case you missed it: We Work was expecting a $16 bln capital injection from Softbank’s Visionfund, but after the Middle East Sovereign Wealth Funds (who fund Visionfund) pointed out there is nothing Tech about funding a property rental business, Softbank had to scale back the investment to $2 bln, causing massive internal loss of face, and a scrabbling around to present a story pretending it doesn’t matter or change anything. Part of the response was the name shift from We Work to We Company to clarify just what a life-style modern tech company We Work (sorry We Company) really is…. You can put lipstick on a pig.

WeWork To Rebrand as ‘The We Company,’ CEO Tells Fast Company

“We need to make people forget that we just lost our biggest investor. Suggestions?”

“I got it: let’s change our name”

— zerohedge (@zerohedge) January 8, 2019

Softbank must be very disappointed. By, today’s convoluted millennial wisdom: the more a company loses, the more it must be worth! On that basis We Work should and must be a screaming buy! $16 bln to buy out other shareholders, fund the company to lose yet more money and give a $50 bln valuation.. what’s not to like?

There is logic to the madness of Unicorn valuations.

Stocks ratcheting up massive losses while exhibiting zero earnings growth can be massively valuable – especially if they are creating new markets and a variation of a monopoly position for themselves. That’s about the only reason I stick with Tesla – even though every single one of my neurons screams something like – it’s a crap car, it can’t make enough of them, Musk is hatstand…. But the reality may be Tesla has probably cracked the electric car. Or how about Amazon – among the most valuable companies in the world because it recognised and seized e-commerce. I could go on… Facebook…

Others, I am not so sure off. Netflix is a case in point – it moved video rental into streaming and created a whole new way to watch TV. But it’s massively vulnerable to completion – and Disney is the one I watch. Sure Netflix is making great content… but its burning through money to garner subscribers to get them to watch their programmes, while Disney leads with its Great Content attracting subscribers in. Simples…

But We Work is something else completely. It’s nothing new. It’s not innovative. But, it is very good at what it does – renting office space. I’ve been in We Work offices – and they’re fine. She-who-is-Mrs-Blain loves them. A chum who is CFO of a Tech firm swears by them – she sticks all her staff in them. But, she’s also quite happy to use a Regus office for board meetings. In fact she prefers to. Everyone is aware We Work has smashed the previous short-term office rental paradigm – a market of 3-4 firms. It leases property long term, does them up to make them attractive to the kind of workforce likely to use them – millenials, start-ups, gig-workers, consultancies, etc.

The rest of the We Company stuff is pure-bunkum – schools and residential living might be aspirational, but it’s a complete distraction. I can’t imagine a more meaningless life – everything from your home, to friends, holidays and kids, circling round your workspace.. How did we manage before We Work figured you might have a pint with co-workers.. (Maybe I get SoftBank to fund me $20 bin for my new social-dynamic inter-reactions experience-centre: My pub.com?)

The bottom line is We Work rents property long-term and rents it out short term. End of. And very dangerous.

There isn’t anything remarkable, innovative or fundamental about renting office space. If the world is entering recession, then the first parts of the economy likely to be shaken out are… consultants, start-ups, and SMEs. It reminds me of a German Bank I used to cover in the 1990s – they told me they borrowed long and lent short and were happy to take the risk because the Bundesbank was right next door and therefore they could predict interest rates perfectly. They collapsed and went under.

The question to ask is how We Work’s CEO, Adam Neumann, pulled it all together? Marketing is a talent. Tell people what they want to believe and they will believe it. Finding the right partner even more so.

Softbank founder Masayoshi Son was the perfect mark. He and Neumann cooked up the valuations between themselves. He bought into the flaky We Work white-board Venn diagram concentric circles encompassing Work Space, Health, Sport, Friends, Etc… Somewhere he might have missed is the point we do these things anyway.. and the core of We Work was Property, Property, Property.

Nothing Tech about it.

How did he fall for it? I’m sure he was mightily impressed that Neumann was sporting a broken finger earlier this week – broken while surfing 15 ft waves in Hawaii with a top pro surfer. Wow. Aspiration lifestyle, and you can get it all, with free beer on a Friday, at We Work. I bet Son would love to do the same.

At which point its worth bearing in mind how We Work is also vulnerable to changing fashion. At the moment millennials like shabby post industrial-chic. The plus is it looks distressed today, and will still be distressed in 10-years time as We Work’s leases come up. However, the reason the Millennials’ bosses rent a board room from Regus is because they have to impress the baby boomers who still control the purse strings. (And bear in mind, Regus’s parent IWG makes money.) Toscafund has been steadily increasing its stake in IWC, even as Regus starts to do stuff We Work does, like allowing yoga pants in the office.. But, they do it profitably.

Who knows if We Work will be another “Wake up and smell the Coffee” moment… In this strange, curious and difficult to understand modern world, everything is not what it seems. There is actually value in losses to build position. There is corporate evolution, and the “Art of War” is as relevant today as ever. But, you can’t put lipstick on a property gamble and call it a Tech paradigm shift…

via RSS http://bit.ly/2D3NVEC Tyler Durden

In what looks like a nightmare scenario for American banks, Socialist Sandy may soon be joining Mad Maxine on the influential House Financial Services Committee, Politico reported.

Rep. Gregory Meeks, the lawmaker representing New York on the House panel that doles out committee assignments, said he planned to nominate Queens Democrat and self-described “Democratic Socialist” Alexandria Ocasio-Cortez for a spot on the committee after she requested it. As one of the farthest-left members of the Democratic caucus, Ocasio-Cortez has been outspoken in her criticism of Wall Street and big business (recently leading the backlash to Amazon’s taxpayer-assisted move to Queens and igniting a controversy by proposing a 70% marginal tax rate). She has also refused to drop criticisms of her fellow more-moderate Democrats for their support of Wall Street.

Ocasio-Cortez

Among the Democrats who could be targeted by Ocasio-Cortez could be Meeks himself, who represents a district in Queens and is a member of the New Democrat Coalition, a group of centrist lawmakers. Meeks has said that he believes that when Wall Street does well, so do his constituents.

There have even been rumors that Ocasio-Cortez could support a challenger to Meeks and another prominent New York Democrat, Brooklyn Rep. Hakeem Jeffries, who was recently awarded a position in the leadership as head of the Democratic Caucus, a position formerly held by Rep. Joe Crowley, whom Ocasio-Cortez defeated in her stunning upset primary campaign.

As Politico pointed out, Ocasio-Cortez’s presence on the committee could be “a new kind of test” for Chairwoman Maxine Waters, who will now need to struggle with a Democrat on her left, while managing the expectations of centrist Democrats and Republicans on the committee. Waters has said she wants to focus on consumer protection and housing.

Unsurprisingly, financial services industry lobbyists expressed some “mixed views” to Politico about AOC joining the committee. Their opinions ranged from anxieties that her presence could make it even more difficult for Democrats and Republicans on the committee to work together to confidence that one low-ranking member likely wouldn’t have much of an impact on the committee’s policy work.

Then again, being a member of the committee could come with some drawbacks for Ocasio-Cortez, as one lawmaker who survived a primary challenge from an Ocasio-Cortez backed challenger pointed out.

Rep. Lacy Clay said Ocasio-Cortez “could get a full appreciation of financial services in this country.”

“Who knows,” he said. “She may deal with some issues over this first term and her supporters may start referring to her as a sellout.”

via RSS http://bit.ly/2RmjT7Z Tyler Durden

A local San Diego television station said on Thursday that CNN invited them to provide a “local view” of the existing wall at the US-Mexico border, only to cancel after past reports from the station showed that the wall is an effective method of combating illegal immigration. 

“Thursday morning, CNN called the KUSI Newsroom asking if one of our reporters could give them a local view of the debate surrounding the border wall and government shutdown,” begins a report by local San Diego station KUSI. 

“KUSI offered our own Dan Plante, who has reported dozens of times on the border, including one story from 2016 that was retweeted by former Speaker of the House, Newt Gingrich, and posted on DrudgeReport.com,” the report continues. 

“We believe CNN declined a report from KUSI because we informed them that most Border Patrol Agents we have spoken to told us the barrier does in fact work,” it concludes. “We have continuously been told by Border Patrol Agents that the barrier along the Southern border helps prevent illegal entries, drugs, and weapons from entering the United States, and the numbers prove it.” 

Thursday morning, @CNN called the KUSI Newsroom asking if a reporter could give them a local view of the debate surrounding the border wall and government shutdown. After we informed them about our past reports, they declined to hear from us.

More info: https://t.co/RX4mB6EdNE pic.twitter.com/r0SAvWxFIm

— KUSI News (@KUSINews) January 11, 2019

Conservative pundits took notice;  

.@CNN to local station: can one of your reporters come on air to talk about how the Wall doesn’t work in San Diego?

Local station: it actually works well.

CNN: bye!

(Actually happened. Watch video.)#MAGA 🇺🇸
pic.twitter.com/1c4bLLDsaI

— Harlan Z. Hill (@Harlan) January 11, 2019

No ethics. @brianstelter is a total propagandist and a liar.

— Ali Alexander (@ali) January 11, 2019

Of course, San Diego’s border wall to the east is a bit less fortified…

Acosta mocked

On Thursday, CNN‘s Jim Acosta was ridiculed over social media after his report from a steel wall from the border “didn’t show anything resembling a national emergency.” 

“I found some steel slats down on the border,” tweeted Acosta. “But I don’t see anything resembling a national emergency situation.. at least not in the McAllen, Texas, area of the border where Trump will be today.” 

I found some steel slats down on the border. But I don’t see anything resembling a national emergency situation.. at least not in the McAllen TX area of the border where Trump will be today. pic.twitter.com/KRoLdszLUu

— Jim Acosta (@Acosta) January 10, 2019

Acosta was widely mocked by conservatives for proving that border walls work. House Minority Whip Steve Scalise (R-LA), Donald Trump Jr., and even the President himself poked fun at the CNN White House correspondent. 

Dear Diary… https://t.co/NAuMaQW6fl

— Donald J. Trump (@realDonaldTrump) January 11, 2019

I know this might be hard for you to comprehend Jimbo, but the reason why all of Twitter has been mocking you today is because you were at a part of the border WITH A WALL. So yes, of course it was working. Replicate that across the border & we’ll all be safer. #RealNews #ByeBye https://t.co/BtdJ3GcxSV

— Donald Trump Jr. (@DonaldJTrumpJr) January 10, 2019

Spotted: Jim Acosta playing golf earlier today. pic.twitter.com/fi0nubIS2I

— Arthur Schwartz (@ArthurSchwartz) January 11, 2019

Er, you found a place where there is a barrier and all is quiet? Jim, do you know what point you’re actually making here? https://t.co/YbZfYtyO5P

— Stephen Miller (@redsteeze) January 10, 2019

For a company that non-ironically claims their motto is “#FactsFirst,” it seems like @CNN is not a fan of facts that contradict the Democrat talking points their “unbiased reporters” regurgitate on air all day long. @CNNPR https://t.co/PWNb2FXhpO

— Andrew Surabian (@Surabees) January 11, 2019

Is it possible Acosta is actually a pro-Trump false flag operating under deep cover in the media?
If so, he’s a genius. https://t.co/EvRYGrIQZI

— Buck Sexton (@BuckSexton) January 10, 2019

(h/t Joe Concha of The Hill)  

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