Unemployment Is 3.8%, So Feds Raid Ohio Landscape Company, Arrest 114 Illegal Immigrants

Like any president, Donald Trump likes to brag about low, low unemployment rates. Who can blame him? Even his least-favorite paper—what Trump habitually calls “the failing New York Times“—says it literally “Ran Out of Words to Describe How Good the Jobs Numbers Are.” In May national unemployment stood at just 3.8 percent, the lowest figure in more than a decade.

That tight labor market makes it particularly unnerving to read this AP story from Sandusky, a resort town in the northeast corner of Ohio:

More than 100 workers at an Ohio gardening and landscaping company were arrested Tuesday when about 200 federal officers descended on the business and carried out one of the largest workplace immigration raids in recent years….

The 114 arrests occurred at two locations of Corso’s Flower & Garden Center, one in Sandusky, a resort city on Lake Erie, and another in nearby Castalia. U.S. Immigration and Customs Enforcement said it expected criminal charges including identity theft and tax evasion.

The Sandusky raid wasn’t a one-off. It’s part of an explicit strategy to crack down on businesses suspected of hiring workers with phony documents. Workplace raids are not distinctively Trumpian, of course; they were conducted under both Barack Obama and George W. Bush. What’s different is the rapid increase in the number of business and document audits taking place. More audits mean more raids. More raids mean more prisoners, more family separations, and so on.

But it doesn’t necessarily mean less immigrants. That’s because migrants, especially those willing to operate outside the law, are more motivated by economic opportunity than by fear of punishment. Except in highly authoritarian countries—which are usually trying to keep people from leaving, not from coming in—it has proven nearly impossible to tightly control borders. If we have a good economy, people will want to move here by any means necessary. (That’s the point of the magnet image above. Taken from an early-20th-century issue of Judge, it laments that immigrants are “the only bad feature of our prosperity.”)

The AP continues:

Immigration officials have sharply increased audits of companies to verify their employees are authorized to work in the country. There were 2,282 employer audits opened between Oct. 1 and May 4, nearly a 60 percent jump from the 1,360 audits opened between October 2016 and September 2017. Many of those reviews were launched after audits began at 100 7-Eleven franchises in 17 states in January.

The audit that preceded the Sandusky raid was based on squeezing a vendor who sells fake documents. Here, according to the AP, is what the feds found:

Of the 313 employees whose records were examined, 123 were found suspicious and targeted for arrest and criminal charges of identity theft and, in nearly all cases, tax evasion. [Steve Francis, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations unit in Detroit] said the identity theft targeted U.S. citizens who had no idea their information was being used at the Ohio business.

Opponents of illegal immigration will seize on ubiquitous charges of identity theft and tax evasion as signs that illegal immigrants are criminals and thus should be kicked out of the country for breaking the law. And indeed, they are breaking the law.

But there’s a better way to resolve this situation, especially in an economy that is everywhere starved for workers, particularly when it comes to manual labor. If more people were allowed to come here legally, that would shred the whole reason for identity theft and cut down on tax evasion too. (It’s noting, incidentally, that even illegal immigrants pay FICA taxes and sales taxes.)

American employers have already used up this year’s quotas for H-1B and H-2B visas (for skilled and unskilled workers in short supply). Our birth rate is falling and our average age is rising. Our unemployment is at record lows, there are more job openings than job seekers, and small businesses say finding workers is a bigger concern to them than taxes and regulations. And the response is to round up 114 people at work?

That’s not going to make America great again. It’s not even going to stop immigrants desperate for work from coming here. There’s a simpler, pragmatic solution that allows the economy to grow, reduces identity theft, and tosses more coins into public coffers: Allow more people to legally enter and work in the United States. This is the immigration issue we need to be debating, not whether all immigrants are animals or just the members of MS-13 (many of whom are actually American citizens).

Related: The 5 Best Arguments Against Immigration—and Why They’re Wrong!

For text and links, go here.

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Why Have Oil Markets Turned So Bearish?

Authored by Tsvetana Paraskova via OilPrice.com,

Oil prices slid early on Tuesday, as reports of the U.S. asking OPEC to lift oil production and hedge funds boosting their short positions added to bearish sentiment. Rising geopolitical concerns over Iran vowing to enrich uranium amid EU attempts to salvage the nuclear deal as well as heightened tensions in the Iranian-Israeli feud helped to boost prices in the afternoon, but prices extended losses after the API inventory report.

WTI Crude traded as low as $64.22 yesterday – near two month lows and well below the levels on May 8, the day on which the U.S. withdrew from the Iran nuclear deal.

Earlier on Tuesday, Bloomberg reported that the United States had quietly asked Saudi Arabia and several other OPEC nations to raise oil production by some 1 million bpd.

While the U.S. government has often expressed opinion against OPEC’s oil price-fixing policies, including a recent comment by President Trump, asking for a specific amount of oil production come online is a rare move.

Saudi Arabia and some of its close Arab allies in the Gulf, as well as the leader of the non-OPEC nations taking part in the production cut deal – Russia – are the only producers that have the spare capacity to increase production. So, in case of increased production from OPEC and allies, the potentially lower oil prices would hurt the other OPEC members that don’t have the spare capacity to boost output.

On the geopolitical front, Iran’s Supreme Leader Ayatollah Khamenei ordered on Monday the Atomic Energy Organization of Iran to “make the necessary arrangements to reach 190,000 SWU in the framework provided by the JCPOA.”

“Iranian nation & government will not stand being under both sanctions & nuclear restrictions. The Atomic Energy Organization of #Iran must immediately make the preparations for achieving 190K SWU– for now within #JCPOA– starting tomorrow,” a tweet from the leader’s Twitter account says.

The Prime Minister of Israel, Benjamin Netanyahu, tweeted, referring to Iran’s pledge to enrich uranium:

“Ayatollah Khamenei, ruler of Iran, declared his intention to destroy Israel. Yesterday he explained how he would do this – with the unrestricted enrichment of uranium, to produce an arsenal of nuclear bombs. We are not surprised. We will not allow Iran to obtain nuclear weapons.”

The Iran-Israel spat continues to escalate while the EU, China, and Russia try to salvage the Iran nuclear deal. Meanwhile, analysts continue to speculate as to how much of Iran’s oil exports would be affected when the U.S. sanctions on Tehran return.

After oil prices rallied before the U.S. withdrawal from the Iran deal and immediately after it, prices snapped back two weeks ago as reports started to emerge that OPEC is considering stepping in to offset potential loss of supply from Iran and Venezuela.

Hedge funds and other money managers have reduced their bullish bets on oil prices in recent weeks, and shorts on U.S. oil last week were at their highest in six months, while short positions in Brent were at their highest since early August last year. Long positions in Brent dropped for a seventh week in a row, to the lowest since early last September.

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The U.S. Military Says It Killed About 500 Civilians Last Year. Outside Groups Put the Count Far Higher.

The U.S. military killed 499 civilians and injured another 169 in 2017, according to a new report from the Defense Department. The government is still investigating 450 other potential civilian casualties from 2017, so the official total may eventually move higher. Since 2014, the U.S. and its allies estimate that they’ve killed 896 civilians while fighting ISIS in Iraq, Syria, and Libya.

Those may be severe undercounts.

The British nonprofit Airwars estimates that the U.S.-led anti-ISIS coalition was responsible for anywhere between 3,923 and 6,102 civilian deaths last year, and a minimum of 6,259 since 2014. It does not have a U.S.-specific total, but given that the United States is responsible for a majority of coalition airstrikes it is reasonable to assume that a good portion of those 6,000+ deaths are on America’s hands.

The Defense Department acknowledges that other groups put the number of casualties far higher than it does, chalking up the disparity to differing methodologies.

According to the Pentagon’s new report, U.S. military gets its tally on civilian casaulties by comparing outside reports from non-governmental organizations, local media, and social media with its own information on the location and activity of its forces, as well as any intelligence it has on the site of alleged civilian casualties.

Airwars depends on a mix of Arabic-language media and social media sites, along with reports from local casualty monitors, NGOs, international agencies, and international media. It is obviously unable to draw on U.S. intelligence.

The big problem, according to Daphne Eviatar of Amnesty International, is that American government, whatever its informational advantages, fails to follow up on most reports of civilian casualties.

“The Defense Department has deemed that the vast majority of claims of civilian casualties are not credible without ever investigating them. Its numbers therefore likely severely undercount the actual civilian death toll,” Eviatar said in a statement. She added that “the investigations that do occur by the Defense Department also do not appear to involve interviews with witnesses nor survivors, nor visits to the locations of the strikes.”

Whatever the ultimate death toll may be, it is unsettling that so many innocent people are being killed by U.S. forces, especially in wars that are not authorized by Congress and have an increasingly tenuous connection to American security.

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VIX Plunges To 11 Handle As Italian Bond Yields Spike

With European stocks tumbling (again), Italian bond yields spiking (again), and redenomination risks surging (again), US investors have decided now is the time to dump protection to its lowest level since January

Europe is imploding again…

And it’s Italy’s fault…

All those $500 million worth of BTPs that Italy’s FinMin bought last week… are now underwater…

 

All of which means… Sell US vol with both hands and feet…

Oh and ignore the fact that there’s The Fed and the North Korea Summit next week.

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Women Candidates Dominated in June 5 Primary Elections: Reason Roundup

Good results Tuesday for both GOP and Democrats. Yesterday marked the most crowded primary day of the 2018 election, with eight states voting on candidates for Congress, governorships, and more. Elections took place in Alabama, California, Iowa, Mississippi, Montana, New Jersey, New Mexico, and South Dakota.

The bottom line, according to The Hill: “In critical races across the country, Democrats had a good night. But so too did Republicans, who avoided a disaster that could have cost them several seats in the House.”

Making some of the most headlines was a judge recall vote in Santa Clara County, where Superior Court Judge Aaron Persky had angered Californians (and internet observers across the country) with the light sentence he handed to student and convicted rapist Brock Turner. And as of now, it looks like Pensky is out—making him the first California judge to be recalled since 1932. “With 43 percent of precincts reporting, 59 percent of the county’s voters favored recalling Persky while 41 percent opposed the recall,” reports the San Francisco Chronicle.

California races commanded a disproportionate amount of media coverage, in part due to Democrats’ fears that the state’s top-two-take-all primary system could shut the party’s candidates out of some key races entirely. But in the end, “Democrats appear to have secured at least a second-place finish in every race they targeted,” according to The Hill:

With plenty of votes left to count, Democrats felt confident about their chances of claiming a spot in the November runoff in districts held by Reps. Ed Royce (R) and Darrell Issa (R), who are retiring, and Reps. Mimi Walters (R) and Dana Rohrabacher (R), who are seeking another term.

Other notable California results:

  • Longtime Democratic Sen. Dianne Feinstein will once again face California voters in November, after ousting challengers yesterday. If she wins, it would be Feinstein’s fifth term in Congress.
  • Democratic Lt. Gov. Gavin Newsom and Trump-backed Republican businessman John Cox secured spots to run against each other for the chance to be state’s next governor.

One of the biggest themes to emerge yesterday—and in the 2018 primaries so far—was the triumph of liberal women candidates over their Democratic male counterparts (with some of this dynamic on the GOP side, too). “So far this cycle, women have won 47 of 68 incumbent-less Democratic primary matchups with male candidates” for the U.S. Senate, the U.S. House, and gubernatorial seats, according to Nathaniel Rakich of Inside Elections and FiveThirtyEight.

In gubernatorial races:

  • U.S. Rep. Michelle Lujan Grisham got the Democratic nod in New Mexico, where she’ll face off in November against GOP Rep. Steve Pearce.
  • Rep. Kristi Noem won the Republican nomination for governor in South Dakota, beating out state Attorney General Marty Jackley.
  • Alabama Gov. Kay Ivey, who stepped in last year when Robert Bentley resigned (becoming the state’s first female governor), beat out Tommy Battle, state Sen. Bill Hightower, and evangelical preacher Scott Dawson to become the GOP gubernatorial candidate. “In deep-red Alabama, the Republican [gubernatorial] primary will almost certainly determine the general election winner,” notes The New York Times.

In congressional races:

  • New Mexico Democrat Deb Haaland got her party’s nomination for the U.S. House of Representatives, making her the first Native American woman candidate for Congress. She’ll face Republican Janice Arnold-Jones in November.
  • Abby Finkenauer, a 28-year-old Iowa state senator, won the Democratic nod for the 1st District congressional seat (beating out challenger Thomas Heckroth with 47 percent of the vote). She’ll face Republican Rep. Rod Blum this fall.
  • “The National Republican Congressional Committee backed Young Kim—an immigrant and the first ever Korean-American Republican woman elected to serve in the California State Assembly—who won the GOP primary for Rep. Ed Royce’s seat,” notes Axios.

It also looks like Iowa GOP Rep. Greg Gianforte, best known for body-slamming a journalist, will face a female challenger, former state lawmaker Kathleen Williams.

A few more highlights and lowlights from the June 6 primaries:

Alabama: “If there was any doubt that the Republican Party was now the party of Donald Trump, Tuesday’s results in a deep-red Alabama congressional race should put it to rest,” writes Deirdre Shesgreen in USA Today. “Incumbent Republican Rep. Martha Roby came under fierce fire in her GOP primary for withdrawing her endorsement of Trump in the 2016 presidential race,” and “those attacks took their toll,” with Roby “forced into a runoff on Tuesday after failing to win the GOP nod outright” against Bobby Bright, whose campaign ads accused her of turning “her back on President Trump when he needed her the most.”

Also, this:

Missouri

Montana: State Auditor Matthew Rosendale got the GOP nod to run for a U.S. Senate seat against Democratic incumbent Sen. Jon Tester.

FREE MARKETS

Medicare going broke sooner than expected.

According to a new report from the Medicare and Social Security trustees, Medicare’s expected insolvency date is actually 2026, not 2029 as previously estimated. The projected Social Security insolvency date is still 2034.

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Brevan Howard Makes A Killing On Italian Bond Turmoil: Best Month Since 2008

Last week, when we laid out the biggest hedge fund winners from the Italian bond rout, one name stood out: that of iconic macro hedge fund, Brevan Howard, which otherwise has otherwise had a relatively lackluster and subdued performance over the past few years.

As we reported then, “among big-name managers profiting from the selloff in Italian bonds is Alan Howard, the secretive billionaire co-founder of hedge fund firm Brevan Howard. A little-known hedge fund run personally by Mr. Howard has been betting that Italy’s borrowing costs will rise relative to Germany’s.

Perhaps the only question was how much of a payday for Howard’s “little known hedge fund” was last week’s turmoil in Italian bonds.

Alan Howard

Overnight, Bloomberg gave the answer, reporting that the Brevan Howard AH Master Fund posted a blockbuster 36.7% profit in May. The May gain means that the AH Master Fund, which started in 2017, has now returned about 44% this year, the person said.

“I am happy that the loyalty and confidence shown by my investors has been rewarded with a very positive result,” Howard said via email, without confirming the returns. It wasn’t immediately clear which of the fund’s bets generated such a major return in the month.

Investors will be just as happy, and news of the blockbuster monthly gain will likely result in an influx of new investors. The hedge fund currently manages about $2.3 billion and is open to small amounts of new money from existing Brevan Howard investors, at a management fee of 0.75 percent and a performance fee of 30 percent, another person said. A spokesman for the firm declined to comment on performance and assets.

Howard, 54, started the smaller fund to make riskier bets for himself, outside investors and Brevan Howard’s main fund, which has seen mediocre returns in recent years, so much so that firm-wide assets have fallen about 75% from their peak in 2013 to around $8 billion now. The money manager has been forced to cut fees and go back to his previous business model of running several funds in a bid to reduce reliance on one main money pool.

Separately, the larger, $4.2BN Brevan Howard Master Fund gained 7.6% – its best monthly return since 2008, boosting its YTD returns to nearly 9%.

Howard’s sterling performance during the latest Italian bond crisis marks a significant turnaround for macro trading which has struggled to make money for years, dragged by environment in which logic was turned upside down due to central bank intervention. Poor performance had prompted impatient investors pull money from some of the oldest and most established macro traders including Brevan Howard, Tudor and Caxton Associates, Bloomberg noted. However, that’s reversing now as central banks start to gradually normalize a decade of unprecedented monetary policy, and as logic returns to markets investors have poured nearly $12 billion into macro funds during the first four months of the year, the most of any strategy, according eVestment data.

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Athenahealth CEO Steps Down After Lewd Video Emerges; Company Weighing Sale

After years of being dogged by allegations of domestic abuse and sexual harassment, Jonathan Bush has stepped down as president, CEO and director of Athenahealth, according to Bloomberg. As the company begins the executive-search process, it has appointed Jeff Immelt to step in to the executive chairman role, while CFO Marc Levine will assume additional operational responsibilities.

Bush

Bush, the nephew of former President George W Bush, was the subject of a Bloomberg story published over the weekend that contained new details about alleged inappropriate behavior, including reports that he abused his ex-wife and created a “sexually hostile work environment.’

Bloomberg claimed to have seen a video where Bush dressed up as a race car driver and pretended to be the title character from the 2006 comedy “Talladega Nights: The Ballad of Ricky Robby.”

Halfway through the skit, he said he wanted to “jump down on” one of his female employees and “do inappropriate things.” He then briefly pauses. “Uh, but obviously that’s totally inappropriate and would never happen or be said on a microphone.” The exact context of the remarks isn’t clear.

The medical technology company said in a statement that it would consider a sale or merger. It’s also fighting a $160 a share takeover offer from Paul Singer’s Elliott Management. It is surely a pure coincidence the CEO quit less than a month after relentless hedge fund manager Paul Singer went hostile.

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5 Years After Snowden, Has Anything Changed?

Edward SnowdenFive years ago The Guardian published the first of what would be a bombshell series of stories about how the United States (and several other Western countries) were engaged in the mass surveillance of their own citizens, collecting millions upon millions of telephone and internet records.

It wasn’t the first time the feds’ saw some of their secret tech surveillance exposed—you may recall the revelation of AT&T’s secret room 641A, for example—but now Americans got provided evidence of how far-reaching this surveillance was. It became very clear that the targets included all of us.

The name of the source behind the story was initially kept secret, but he soon revealed himself to be a government contractor named Edward Snowden.

Since then, Snowden has become a household name—even as he remains stuck in Russia, wanted on espionage charges in the United States. The Guardian and The Washington Post won Pullitzer prizes in 2014 for their reporting based on the documents Snowden provided.

Five years later, it’s worth looking at the legacy of Snowden’s revelations.

The Snooping Hasn’t Really Stopped—But There Have Been Changes: Among the revelations that emerged from Snowden’s leaks was how much of the surveillance was based on secret interpretations of federal laws. Section 215 of the PATRIOT Act allowed the Foreign Intelligence Surveillance Act (FISA) Court to grant the feds approval to secretly collect information from third parties during terrorism investigations. The Department of Justice turned out to have secretly interpreted this section of the law as an authorization to collect the metadata records of millions upon millions of Americans.

This interpretation was so far afield of the law’s intent that Rep. Jim Sensenbrenner (R-Wis.), who crafted the PATRIOT Act, publicly denounced it. And released reports from the FISA Court indicated it sometimes was not fully aware of how extensive the federal data collection reached. Other courts subsequently ruled that this mass data collection was not authorized.

In 2015, Section 215 of the Patriot Act was set to sunset, and a pack of legislators—most famously Sen. Rand Paul (R-Ky.)—moved to block it from being renewed. They succeeded, and it was replaced by the USA Freedom Act.

The USA Freedom Act did not, unfortunately, eliminate mass metadata collection. But it did set up actual guidelines that required government investigators to use specific search terms when attempting to look at metadata in records collected by phone companies. The new law also called for annual reports that give Americans a sense of how much secret surveillance is happening. The reports are vague and incomplete, but they’re more than we were getting previously.

Americans Learned What Metadata Is and Why It Mattered: When Snowden’s leaks first started, President Barack Obama and many lawmakers insisted that “Nobody is reading your email.” This became a mantra among those trying to downplay Snowden’s revelations.

It was a deliberate attempt to distract from the reality that we were all leaving electronic fingerprints everywhere we went and every time we communicated with each other. The government was collecting all our metadata—information about where, when, and to whom we were communicating. They were collecting everything but the conversations themselves.

Back in the days of Ma Bell, we thought of “metadata” as simply information about who we were calling and for how long we were talking. These days we all keep huge chunks of information about our lives on our computers, tablets, and smartphones. Experiments have demonstrated that, based on just your metadata, observers can reconstruct a good part of your life and your relationships with others.

This realization about how much privacy we’re losing via our metadata has played out as we worry about government track our social media use—and as we become more aware of the ways that police (and not just federal police) are trying to keep track of our behavior through such tools as license plate readers and facial recognition.

Efforts to Push Forward with Increased Tech Surveillance Get Pushback: Many citizens and even lawmakers aren’t accepting the idea that every form of surveillance that the government demands is necessary. Some states have passed laws requiring police to get warrants in order to track cellphone location data. The question of whether this tracking violated the Fourth Amendment is now under review by the Supreme Court.

Senators have warned the Department of Homeland Security about using facial recognition software to scan Americans boarding international flights. In California, lawmakers are currently considering legislation requiring police to get permission from their local government before implementing new surveillance technologies.

But other officials keep pushing and pushing to implement more surveillance tech, even as the public resists. Immigration enforcers want access to the data the feds have collected. Officials want to use facial recognition systems when monitoring protests via drones, and to combine such systems with police body cameras. Police in Miami Beach are willing to cause massive traffic jams in order to scan everybody’s license plates while searching people with warrants. New York Gov. Andrew Cuomo wants to use facial recognition tools on cashless toll roads to identify drivers.

There are stories every day about officials wanting to use technology for surveillance. While some of the news coverage may fall on deaf ears, Snowden’s information has been valuable to help people grasp that whenever the government starts spying, the surveillance will probably be broader and deeper than they actually tell us.

New Encryption Fights Begin: Back in the 1990s, the feds fretted about encryption on personal computers. Their efforts back then to limit our access to encryptionfailed.

Fears of terrorism having given new life to that old fight against encryption. Officials want access to locked phones or other secured devices belonging to people who have allegedly committed crimes, but encryption makes it harder for law enforcement to get in.

For many officials, the public push has been to try to force tech companies to compromise data security by creating so-called “backdoors” that bypass tech encryption or to otherwise provide access on demand. In the wake of the terrorist attack in San Bernardino, California, the FBI had a court fight with Apple over its efforts to force the company to give it access to an iPhone in one terrorist’s possession. While Apple resisted, the FBI managed to get access with the assistance of a third party. It turned out later that the FBI was deliberately looking for a fight to try to establish a precedent.

Privacy and technology experts have warned us over and over that compromising encryption means rendering all of us vulnerable to breaches from anybody who gets their hands on these encryption keys or figures out how to mimic these access mechanisms. Weakening encryption would make everyone susceptible not just to government snoops—ours or those working for malicious foreign governments—but to hackers with identity theft or other crimes in mind.

Many officials demanding an encryption bypass simply refuse to entertain the possibility that this would expose citizens to greater threats. Nor are they understand the ways Snowden’s disclosures have made Americans more skeptical about giving them access in the first place.

But tech companies keep pushing for stronger mechanisms to keep users’ data secure, regardless of the wishes of government officials. Snowden’s own email provider, Lavabit, shut down in 2013 rather than comply with the government’s demands for the encryption key that would let it access Snowden’s communications. Founder Ladar Levison resurrected the company in 2017 with end-to-end encryption that makes it much harder for the government to force its way in.

The Trumpification of the Surveillance Fight: After Donald Trump became president, the surveillance fight took a strange turn. The FBI had gotten the FISA Court’s authorization to snoop on Trump campaign aides in order to probe connections with foreign countries—Russia in particular. As the special investigation plays out, Trump and his supporters have decried the use of these secret surveillance tools against people close to him.

This could have been an opportunity to discuss how the federal government engages in secret snooping against the citizenry in general, how this could be corrupted for political purposes, and why that would be a good reason to limit the feds’ surveillance powers.

But that conversation did not happen. Indeed, some of the people crying the loudest that the “deep state” is coming after Trump also believe that Snowden committed treason by exposing federal surveillance. Rep. Devin Nunes (R-Calif.), a conservative lawmaker who frequently insists the FBI’s investigation of the president is politically motivated, is a huge fan of government surveillance on you. He just doesn’t like it when Trump’s the target.

This preference for simply protecting Trump rather than having an actual surveillance debate became clear when Section 702 of the FISA Amendments came up for renewal last year. Section 702 is another law that’s been commandeered for domestic surveillance even though its stated purpose is to fight foreign terrorism and espionage. During the debate over renewing it, civil rights activists and privacy-minded lawmakers tried to force reforms. But despite all the yelling about spying on Trump that was taking place at the exact same time, most Republican lawmakers (Nunes included) voted not only to renew Section 702 but to expand its ability to target Americans.

Utlimately, Snowden’s biggest accomplishments were to bringing the surveillance debate to the forefront and to encourage tech companies to ramp up their encryption and other security efforts. In the July Reason, Elizabeth Nolan Brown explains how you can encrypt your own communications. The fact that strong encryption tools are becoming more available to average internet users is one thing we can all thank Snowden for.

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Trump’s “Trade War” Is Working: US Trade Deficit Collapses

One month after the biggest plunge in the US trade deficit since the financial crisis – good news for Trump who has engaged in “trade war” with the rest of the world to boost US trader and exports – the good news continued in April, when according to the Census Bureau, the US deficit shrank again, down 2.1% from a revised $47.2BN to $46.2BN, and beating the $49BN consensus estimate and better than the lowest estimate of $46.2BN.

The number was so good, some were wondering why Trump didn’t pre-tweet it, as he did with the payrolls report.

Incidentally, with today’s revision, the March plunge in the US trade deficit has now risen to $10BN, the highest since 2008, and the second biggest improvement in the US deficit on record.

According to the census bureau, the deficit decreased from a revised $47.2 billion in March to $46.2 billion in April, amid a perfect trade environment as exports rose and imports declined for the second month in a row, or as Trump would say, “his policies to boost US trade worked.”

 

Broken down by category, the goods deficit decreased $1.0 billion in April to $68.3 billion. The services surplus decreased less than $0.1 billion in April to $22.1 billion.

The good news: exports of goods and services increased $0.6 billion, or 0.3%, in April to $211.2 billion. Exports of goods increased $0.3 billion and exports of services increased $0.3 billion.

  • The increase in exports of goods mostly reflected increases in industrial supplies and materials ($1.3 billion) and in foods, feeds, and beverages ($0.7 billion). A decrease in capital goods ($1.4 billion) partly offset the increases.
  • The increase in exports of services mostly reflected increases in other business services ($0.1 billion), which includes research and development services; professional and management services; and technical, trade-related, and other services, in financial services ($0.1 billion), and in charges for the use of intellectual property ($0.1 billion).

Also good news, if only for GDP bean-counters: imports declined, decreasing by $0.4 billion, or 0.2%, in April to $257.4 billion. Imports of goods decreased $0.7 billion and imports of services decreased $0.3 billion.

The decrease in imports of goods mostly reflected decreases in consumer goods ($2.8 billion) and in automotive vehicles, parts, and engines ($0.9 billion). Increases in other goods ($1.3 billion) and in industrial supplies and materials ($1.2 billion) partly offset the decreases.

The increase in imports of services mostly reflected increases in transport ($0.1 billion), in other business services ($0.1 billion), and in charges for the use of intellectual property ($0.1 billion)

Broken down by trading partner, the March figures showed surpluses with South and Central America ($4.1), Hong Kong ($2.2), United Kingdom ($0.9), Singapore ($0.7), and Brazil ($0.6

Meanwhile, the countries that should be worried that they may fall in Trump’s trade war sights, and recorded deficit with the US in March, included China, of course, with a $30.8 billion deficit, down sharply from $35.4 billion a month earlier, but also the European Union ($13.2), Mexico ($6.0), Japan ($5.9), Germany ($5.6), OPEC ($3.3), Italy ($2.4), India ($2.0), Canada ($1.7), France ($1.6), South Korea ($1.3), Taiwan ($1.1), and Saudi Arabia ($0.9).

Finally, to help Trump make his economic case even stronger, the US deficit excluding petroleum products: after hitting a record in February, continued its dramatic improvement in April, suggesting that whatever Trump is doing to boost overall trade (we already know US petroleum exports are soaring), may be working, as it shrank from over $50BN in February to just $41BN in April.

And now, we expect even more upward revisions to Q2 GDP, which according to the Atlanta Fed will now likely print above 5.0%

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Putin Praises “Courageous And Mature” Trump For Agreeing To Meet With North Korea

Russian President Vladimir Putin praised US President Donald Trump for agreeing to meet with North Korean leader Kim Jong Un about the possibility of denuclearization on the Korean Peninsula. After calling Trump “courageous and mature”, Putin added that he’s expecting a “positive outcome” from the June 12 summit, which is set to take place in Singapore.

“I still hope that this meeting – a very courageous and mature decision U.S. President Donald Trump has made, to have direct contacts with North Korean leader Kim Jong Un – will take place, and we all expect a positive outcome,” Putin said in an interview with China Media Group ahead of a planned summit in Shanghai later this week.

Putin and Trump are said to be planning a summit, and the two leaders have met twice in person since Trump took office.

Trump

In addition, Putin recently told an Austrian media outlet that he and Trump speak on the phone regularly.

Indeed, Donald Trump and I have, firstly, met more than once at various international venues and secondly, we regularly talk over the phone,” the Russian leader said.  

Putin’s remarks come a day after Putin invited Kim to Russia. Later in the interview, Putin criticized US sanctions against Russia, saying they would hurt both sides. Though he added that Russia isn’t afraid of the sanctions.

How long before the left uses these two statements to ‘confirm’ Trump’s treasonous relations with Putin? We suspect not long.

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