ICE Investigates Twitter Joke About Cultural Appropriation: Reason Roundup

Watch what you tweet. When it comes to taking a joke, the feds make progressive college-kids look like George Carlin. Two recent stories highlight how aggressively Immigration and Customs Enforcement (ICE) and the FBI are policing speech on social media, seeing “threats” and “terrorism” in statements clearly not intended as such. (Sound familiar, woodchipper fans?) In the first, ICE opened an investigation into Brooklyn comedian Jake Flores because of his Twitter jokes about Cinco de Mayo, cultural appropriation, and ICE agents.

On May 5, Flores started by questioning chattering-class priorities. “It would be cool if we talked about cultural appropriation after we ABOLISH ICE,” Flores tweeted. “One of these things is a problem that we can actually solve that people are frankly not doing much about, and one of these is an unsolvable symptom of culture that we’ve built an industry around endlessly analyzing fueled by scolding, guilt, and clicks.”

These tweets were followed up by Flores laying out a modest proposal for how Cinco de Mayo should work:

White people are allowed to culturally appropriate on the condition that you help to destroy ICE. You kill 1 ICE agent and you get to wear a sombrero. 2 kills and you can wear a pancho.

3rd kill you can draw a mustache on your face in sharpie. 5 kills and you can do skull paint. It goes on and on like this up to 100…

After you kill 100 ICE agents you area allowed to be full on racist and no one can give you sh-t about it. Drive a lowrider, call people wetbacks, get a weird tattoo of a chola that’s also a clown for some reason. No one can stop you. You earned it.

The next day, Homeland Security allegedly showed up at Flores’ apartment door.

ICE Press Secretary Jennifer Elzea has at least confirmed that the agency opened an investigation into Flores after reading his tweets (no word from Elzea on the alleged apartment visit). “The kind of language expressed…even in an allegedly joking manner, is reckless and irresponsible,” she tells Splinter News. “It potentially puts at risk those who have taken an oath to uphold the law and protect public safety.”

Meanwhile, The Guardian offers up an all-too-similar story. Rakem Balogun of Texas fell under FBI surveillance for making Facebook posts that didn’t sit right with the bureau. In December of last year, agents raided Balogun’s house and arrested him; they kept him in jail for five months (with no bail allowed). But the “case [against Balogun] fell apart,” notes New York:

Eventually, the Feds resigned themselves to busting the man for illegally owning a firearm; a judge found that charge to be bogus. He was freed; but while the government had kept him locked up for the crime of expressing an affection for guns—and opinions the deep state didn’t like—he lost his car, job, home, and the opportunity to witness the first year of his newborn’s life.

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Polarization in “Real America” pales in comparison to tribalism among elites. “In our current culture, it’s precisely the elites who seem to be driving tribal identity and thought,” writes Andrew Sullivan in his latest New York magazine column. Sullivan points to a new book from Lilliana Mason detailing how “the more highly educated also tend to be more strongly identified among political lines.”

“Our elite debate,” suggests Sullivan, “has become far less focused on individual issues as such, and the complicated variety of positions, left, right and center, any thinking individual can take. It has become rather an elaborate and sophisticated version of ‘Which side are you on?'”

It’s a bad breeding ground for libertarianism. In such a “deeply tribal” atmosphere, writes Sullivan, “the individual is always subordinate to the group” and “the ‘I’ is allowed only when licensed by the ‘we.'” Read the whole thing here.

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Make China Great Again?

QUICK HITS

  • Israeli troops killed at least 37 Palestinian civilians and wounded several dozen others who were peacefully protesting near the Gaza border Monday. Along with general occupation complaints, the Palestinian protesters were upset over today’s U.S. Embassy opening in Jerusalem.
  • A white police officer at a Wisconsin mall was caught on camera punching a black teenager in the face. His department said the video shows “only a small segment of the interaction between the suspect and the officer,” who was called by mall security about the teen and four others causing a “disturbance.”
  • Kansas cops can no longer have sex with people in their custody and claim it’s consensual.
  • Seattle leaders are scheduled to consider a controversial “jobs tax” today. (Read J.D. Tuccille for more on this nonsensical proposal.)
  • Financial institutions “are increasingly wary” of doing business with recreational marijuana shops, “so it’s especially important for Congress to…pass a federal solution that will allow banks to handle funds from what is now largely a cash business,” says the Boston Globe editorial board.
  • In New York City, “black people were arrested on low-level marijuana charges at eight times the rate of white, non-Hispanic people over the past three years,” according to a New York Times analysis. “Hispanic people were arrested at five times the rate of white people.”
  • The average gasoline price in America are expected to soon reach $3 per gallon again.
  • How Trump may have “dealt religious freedom a blow with his new White House Faith and Opportunity Initiative.”
  • “My colleague Mike Allen, who has spent nearly 20 years covering the White House, says we learn more about what’s going on inside the Trump White House in a week than we did in a year of the George W. Bush presidency,” writes Jonathan Swan. It prompted him to start asking White House leakers why they do what they do—and how they ensure they don’t get caught. One leaker told Swan, “To cover my tracks, I usually pay attention to other staffers’ idioms and use that in my background quotes.”

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Main Events This Week: US Retail Sales, China Data Barrage; Non-Stop Fed Speakers

As markets take a slow transition into summer with earnings season now almost over, the calendar takes a bit of a break this week with US retail sales the only real highlight on the data docket.

The second revision to Q1 GDP in the Euro area, retail sales and CPI data in Canada, and final April CPI reports are due in Europe while China activity indicators are also expected. In Japan, GDP is likely to slow down to +0.0% qoq saar from +1.6% in Oct-Dec ’17 due to weather related weakness in private consumption, reversal of earlier inventory build-up, and slowdown in export momentum.

The main action will be away from data with a busy Fed-speak calendar due, especially following the latest disappointing CPI print. Overnight, Cleveland Fed President Loretta Mester spoke, and was hawkish as usual, saying she would look through ‘transitory’ factors behind recent inflationary softness,

Trade talks might come back to the fore with China’s Vice Premier Lie He traveling to Washington to continue talks with Treasury Secretary Steven Mnuchin. This week also brings a Paul Ryan-imposed deadline for a NAFTA deal. The Brexit drama continues, with the UK government still unable to find an agreement on a customs approach, but sterling doesn’t appear to be bothered.

There’s also a few Brexit meetings to flag while Italy’s political developments should also continue to be a focus. There are monetary policy meetings in Brazil, Mexico, Poland, Indonesia, Thailand and Egypt. Mexico’s BANXICO will likely hike 25bp. GDP releases in Russia and CEE.

On the geopolitical front, Monday is set for a busy day as the US opens a Jerusalem embassy while Italy is set to announce new government formation.

* * *

As Deutsche Bank writes, with the data calendar fairly thin next week, the main focus will be on the US April retail sales report on Tuesday. As of this morning, the consensus expects a relatively solid +0.4% mom headline reading and +0.4% mom ex auto and gas print. The control group component – which goes into the GDP accounts – is also expected to show a +0.4% mom reading. Away from that we’ve got April housing starts and building permits data on Wednesday along the April industrial production print (+0.6% mom expected).

In Europe next week the main focus for markets will likely be the second flash estimate of Q1 GDP for the Euro area on Tuesday where no change from the +0.4% qoq flash is expected and the final April CPI print for the Euro area on Wednesday. The consensus for that is a +0.7% yoy core reading (no change from  the flash) and +1.2% yoy headline. That all said, given the Easter holiday timing, it’s unlikely that the ECB puts much weight behind the April data. Other data worth flagging in Europe next week is the second reading of Q1 GDP in Germany on Tuesday, UK labour market stats for March and April on Tuesday where the big focus will be on wages data following some soft readings of late, March industrial production for the Euro area on Tuesday and Germany’s ZEW survey for May on Tuesday.

Finally in Asia all eyes will be on China’s April retail sales, industrial production and fixed asset investment data on Tuesday (which is expected to remain broadly stable) and Japan’s second reading of Q1 GDP on Wednesday and the final April CPI data on Friday.

As noted above, it will be a very busy week for Fed speakers with Monday’s speech by Cleaveland Fed President Mester (hawk/voter) followed by St Louis Fed President Bullard (dove/non-voter) in the afternoon at a Blockchain technology conference in New York. On Tuesday, Dallas Fed President Kaplan (neutral/non-voter) then speaks to the Council on Foreign Relations on the Outlook for the Economy and Energy Market in the afternoon, before San Francisco Fed President Williams (neutral/voter) speaks to the Economic Club of Minnesota in the evening.

Bisecting  those two talks are the confirmation hearings for Fed Nominees Richard Clarida (nominated for Vice-Chairman) andMichelle Bowman (nominated for Governor). On Wednesday it’s the turn of Atlanta Fed President Bostic (neutral/voter) when he gives an economic update in Augusta, before Bullard speaks again to the media in the evening. On Thursday, Minneapolis Fed President Kashkari (dove/non-voter) speaks at a moderated Q&A in Minnesota, followed closely by Kaplan speaking again also at a moderated Q&A in Texas. Finally on Friday, Mester speaks on Macroprudential and Monetary Policy at an ECB conference in the morning, before Kaplan speaks at another moderated Q&A in Dallas and Fed Governor Brainard (dove/voter) speaks in New York.

Away from all that, there’s a few other events worth flagging next week. Those on Brexit watch will have EU Chief Brexit negotiator Michel Barnier briefing European affairs ministers on the status of talks on Monday, while EU foreign policy chief Federica Mogherini will also speak on a “Future of EU Foreign Security” panel in Brussels on the same day. From the UK side, PM Theresa May is due to meet her Brexit cabinet on Tuesday to discuss plans for a post-withdrawal customs union. Also worth noting next week is senior officials from the Euro area discussing the latest Greek bailout review on Monday, the MSCI releasing its semi-annual EM index review including China-A shares for the first time also on Monday, China Vice Premier Liu He traveling to Washington on Tuesday to continue trade talks with Treasury Secretary Steven Mnuchin, Russian state Duma discussing retaliatory measures against US sanctions on Tuesday, and finally EU leaders holding an informal dinner in Sofia on  Wednesday to discuss global trade and the US decision to leave the Iran nuclear deal.

The above is summarized in the following table:

Broken down on a day-to-day basis, here are the key events courtesy of Deutsche Bank:

  • Monday: Central bank speak should be the focus on Monday with the Fed’s Mester and ECB’s Villeroy both speaking in the morning in Paris, followed by the Fed’s Bullard and ECB’s Lautenschlaeger and Praet later in the day. Brexit developments could also come back to the forefront with the EU’s Barnier due to brief European affairs ministers on the status of talks. Datawise the only releases of note are Japan PPI for April and the Bank of France industry sentiment print for April. Senior officials from Euro area finance ministries are also due to meet to discuss the latest Greek bailout review.
  • Tuesday: The overnight focus on Tuesday will be in China with April retail sales, industrial production and fixed asset investment data all due. In Europe, the preliminary Q1 GDP report in Germany is due, along with the Q1 GDP report for the Euro area. In the UK April and March employment data is expected while in France the final April CPI revisions are due. March industrial production data for the Euro area is also due, as well as the May ZEW survey in Germany. In the US the big focus will be on the April retail sales report, while May empire manufacturing, March business inventories and the May NAHB housing market index print are also due. Fed nominees Clarida and Bowman are due to appear for confirmation hearings while the Fed’s Kaplan and Williams are both scheduled to speak. UK PM Theresa May is also due to meet with her Brexit Cabinet while China Vice Premier Liu He is due to visit Washington and continue trade talks.
  • Wednesday: Overnight, the preliminary Q1 GDP report in Japan is due along with March industrial production and April new home prices in China. In Europe the final April CPI reports for the Euro area and Germany will be the focus. In the US April housing starts and building permits, along with April industrial production will be the main highlights. The Fed’s Bostic and Bullard are both scheduled to speak while EU leaders are also due to hold an informal dinner to discuss global trade and the US decision to leave the Iran nuclear deal.
  • Thursday: A fairly quiet day highlighted by the Fed’s Kashkari and Kaplan speaking in the afternoon and evening. The ECB’s Constancio is also scheduled to speak, while the only economic data of note is the April leading index, May Philly Fed PMI and weekly initial jobless claims in the US.
  • Friday: Overnight, Japan will release its April CPI report. In Europe, April PPI in Germany and the March trade balance for the Euro area are due. There’s no data due in the US on Friday however the Fed’s Mester, Kaplan and Brainard are all due to speak

* * *

Finally, looking at only the US, Goldman writes that key releases this week are the retail sales report on Tuesday and the industrial production report on Wednesday. The main US events are shown in the table below:

A detailed summary follows:

Monday, May 14

  • 02:45 AM Cleveland Fed President Mester (FOMC voter) speaks: Cleveland Fed President Loretta Mester will speak at an event with the Governor of the Banque de France in Paris. Audience Q&A is expected.
  • 09:40 AM St. Louis Fed President Bullard (FOMC non-voter) speaks: St. Louis Fed President James Bullard will deliver a presentation at CoinDesk’s blockchain technology summit in New York. Audience Q&A is expected.

Tuesday, May 15

  • 08:00 AM Dallas Fed President Kaplan (FOMC non-voter) speaks: Dallas Fed President Robert Kaplan will give a speech at the Council of Foreign Relations in New York. Audience and media Q&A are expected.
  • 08:30 AM Retail sales, April (GS +0.2%, consensus +0.3%, last +0.6%); Retail sales ex-auto, April (GS +0.4%, consensus +0.5%, last +0.2%); Retail sales ex-auto & gas, April (GS +0.4%, consensus +0.4%, last +0.3%); Core retail sales, April (GS +0.5%, consensus +0.4%, last +0.4%): We estimate core retail sales (ex-autos, gasoline, and building materials) rose at a solid 0.5% pace in April, reflecting a continued boost from previously delayed tax refunds and the continued positive impulse from tax reform. We also note scope for upward revisions to the March core measures, which appeared soft relative to chain store results. On the negative side, we expect cold and snowy April weather to weigh on sales in the building materials and clothing categories. Based on a pullback in auto SAAR but a seasonally adjusted rise in gasoline prices, we estimate a 0.2% and 0.4% respective increases in the headline and ex-auto measures.
  • 08:30 AM Empire manufacturing survey, May (consensus +15.0, last +15.8)
  • 10:00 AM Fed Nominees Bowman and Clarida speak: Federal Reserve Board nominees Michelle Bowman and Richard Clarida will testify in front of the Senate Committee on Banking, Housing and Urban Affairs during a hearing for their nominations. Clarida has been nominated to be a Member and Vice Chairman of the Board of Governors, and Bowman has been nominated to be a Member of the Board of Governors and would occupy the seat required to be filled by a member with community banking experience.
  • 01:10 PM San Francisco Fed President Williams (FOMC non-voter) speaks: San Francisco Fed President (and incoming New York Fed President) John Williams will give a speech to the Economic Club of Minnesota in Minneapolis.

Wednesday, May 16

  • 08:30 AM Housing starts, April (GS -1.4%, consensus +0.5%, last +1.9%); Building permits, April (consensus -2.3%, last +4.4%): We estimate housing starts pulled back 1.4% in April, retracing most of the 1.9% March increase. We expect cold, snowy weather to weigh on construction activity, though we believe solid single-family construction fundamentals will partly offset these effects.
  • 08:30 AM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Raphael Bostic will speak on current economic conditions at an event in August, Georgia. Audience Q&A is expected.
  • 09:15 AM Industrial production, April (GS +0.6%, consensus +0.6%, last +0.5%): Manufacturing production, April (GS +0.4%, consensus +0.8%, last +0.1%); Capacity utilization, April (GS +78.4%, consensus +78.4%, last +78.0%): We estimate industrial production rose 0.6% in April, as the utilities and mining categories likely rose further. We expect manufacturing production also increased modestly, reflecting strength in non-auto manufacturing but weakness in auto manufacturing.
  • 06:30 PM St. Louis Fed President Bullard (FOMC non-voter) speaks: St. Louis Fed President James Bullard will give opening remarks at the Homer Jones Memorial Lecture in St. Louis. Audience Q&A is expected.

Thursday, May 17

  • 08:30 AM Initial jobless claims, week ended May 12 (GS 210k, consensus 229k, last 211k); Continuing jobless claims, week ended May 5 (consensus 1,775k, last 1,790k): We estimate initial jobless claims declined by 1k to 210k in the week ending May 12. While the level of claims still looks relatively low in New York, the trend in jobless claims appears to be falling, and we expect another very low reading. Continuing claims—the number of persons receiving benefits through standard programs—rebounded last week but also appear to be trending lower.
  • 08:30 AM Philadelphia Fed manufacturing index, May (GS +22.5, consensus +21.7, last +23.2); We expect the Philadelphia Fed manufacturing index to edge down 0.7pt to 22.5 in May. Our forecast reflects generally upbeat top-line results and commentary from industrial firms, though we note that uncertainty around trade policy might be weighing on business sentiment. In the April report, the headline index rebounded by 0.9pt, while the underlying composition was more mixed. Overall, the index is likely to remain at levels suggestive of moderate expansion in manufacturing activity.
  • 10:45 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks; Minneapolis Fed President Neel Kashkari will participate in a moderated Q&A at an event in Minneapolis. Audience Q&A is expected.
  • 01:30 PM Dallas Fed President Kaplan (FOMC non-voter) speaks: Dallas Fed President Kaplan will take part in a moderated Q&A at a Richardson Chamber of Commerce event in Texas. Audience and media Q&A is expected.

Friday, May 18

  • 03:00 AM Cleveland Fed President Mester (FOMC voter) speaks; Cleveland Fed President Loretta Mester will give a speech on macroprudential and monetary policy at a conference in Frankfurt. Audience Q&A is expected.
  • 09:15 AM Dallas Fed President Kaplan (FOMC non-voter) speaks: Dallas Fed President Robert Kaplan will participate in a moderated Q&A session at a University of Texas at Dallas event. Audience Q&A is expected.
  • 09:15 AM Fed Governor Brainard (FOMC voter) speaks: Fed Governor Lael Brainard will give a speech on “Community Reinvestment Act Modernization” at an Association for Neighborhood and Housing Development conference in New York. Audience Q&A is expected.

Source: Deutsche, BofA, Goldman

 

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Argentine Peso Collapses To New Low Despite Massive Intervention

Update: *ARGENTINE CENBANK SAID TO OFFER $5B IN PESO MARKET AT 25/USD

* * *

The Argentine Central Bank spent over $1 billion buying pesos on Friday (and another billion to buy short-term bonds back) to support the collapsing currency…

But… the weekend appears to have provided no confidence improvement for investors who are wary of this week’s maturing bills and the potential delays of any IMF bailout…

Some investors are spooked by the fact that, as Bloomberg reports, members of the central bank’s monetary policy committee met with representatives of the nation’s top banks on Saturday to discuss the recent FX volatility and Tuesday’s note auction, according to two people with direct knowledge of the matter.

Furthermore, the central bank asked banks to guarantee branches have enough cash on hand.

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Watch Live: US Opens Jerusalem Embassy On Israel’s 70th Independence Day

In a tweet sent early this morning, President Donald Trump urged Americans to tune in to the official opening of the new US embassy in Jerusalem on Monday – which coincides with the 70th anniversary of the founding of the State of Israel.

Outraged Palestinians protested along the border fence separating Israel from the Gaza Strip, where more than two dozen demonstrators were slaughtered by Israeli Defense Forces. Among the dead were a 12-year-old and a 14-year-old. More than 900 Palestinians were wounded in the standoff. The opening ceremony is set to begin at 9 am ET. Watch it live below:

Treasury Secretary Steven Mnuchin is in Jerusalem for the occasion. As Israel prepared to celebrate the opening – something that every US president since Bill Clinton has promised to do, but only Trump has followed through with – Israeli Prime Minister Benjamin Netanyahu told revelers attending the event that Trump’s declaration late last year recognizing Jerusalem as Israel’s capital was “the right thing to do,” as Fox reported.

Netanyahu said: “Thank you, President Trump, for your bold decision. Thank you for making the alliance between Israel and the United States stronger than ever…it’s been the capital of our state for the past 70 years. It will remain our capital for all time,” he said.

President Trump’s daughter Ivanka and her husband Jared Kushner (who is nominally in charge of the Trump administration’s efforts to promote peace in the Middle East) were sitting int he front row for the ceremony not far from Netanyahu.

Netanyahu said their presence at the event is a “national and international statement” that “touches our hearts.”

Meanwhile, dozens of countries – including the UK and France – were skipping the ceremony in protest, and also avoided Independence Day celebrations, which began last night – though Monday is the official anniversary of the country’s founding in 1948.

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SocGen Makes A Striking Discovery: Most Buybacks Were Used To Pay For Stock Options

Frequent readers will recall that it was Andrew Lapthorne’s revelation back in late 2015, which was behind the following chart, indicating that virtually all net debt issued this century has gone for one thing: to fund buybacks, i.e. wealth transfers from bondholders to shareholders.

Now, in a follow up note as the increasingly politically-charged topic of record (projected) buybacks…

… which over the past few days has once again made the financial media rounds (WSJ:Record Buybacks Help Steady Wobbly Market“; Barron’sWhy the Buyback Boom Is Bullish for Investors“; ZH:This Is What The Slow-Motion LBO Of The Stock Market Looks Like“), Lapthorne reminds his readers that “we are anti-buybacks for the simple reason that while the theory is sound, in practice they are hugely inefficient.” And as Lapthorne explained last year, “typically it is the weakest not the strongest businesses that buyback”, which if accurate raises big question markets about some of the most lauded companies in the S&P500:

Lapthorne is also against buybacks because, as he often notes, “there is also a strong tendency to use debt rather than spare cash, which has led to a dangerous build up in US leverage“, and he is right: see the top chart for evidence.

But have buybacks really helped stocks outperform the overall market? As we noted over the weekend, according to WSJ calculations the answer is yes as “of the 20 S&P 500 companies that spent the most on buybacks over the first quarter, nearly three-quarters have outperformed the index so far this year. The group has risen an average of 5.2% in 2018, compared with the S&P 500’s 1.9% gain.” Lapthorne is not so sure, and writes that while “much has been made of the surge in repurchases, which leapt 20%+ in the last quarter as companies took advantage of repatriated cash and tax cuts to increase their buyback programs” a more nuanced look reveals something surprising.

Of course, the S&P500 is up over 20% over the last year so 20%+ is just keeping up with market prices, but newswires are still full of glowing articles proclaiming companies that bought back in Q1 outperformed and have helped prop up the equity market. We find differently. When measured as a % of market capitalisation, businesses that buy back the most of their market cap underperformed – albeit not significantly so.

Wait, but if buybacks did not have a direct impact on outstanding shares, what were they used for? And here another stunning revelation by Lapthorne: “it looks like the bulk of last quarter’s repurchases went on stock options (aka wages).”

We recognise that calculating the stock option effect is an educated guess as we look at the amount repurchased versus the actual reduction in the share count and assume the difference is the option issuance effect (though issuance can be for other reasons).

The SocGen strategist’s conclusion: “looking at the table below it appears as if buybacks have indeed gone to pay higher wages, but we suspect not in the way policymakers hand in mind.

Well, at least someone is getting rich from Trump tax reform, too bad it’s the opposite of the middle class that was supposed to benefit.

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Israel Kills 28, Injures 600 In Gaza As Palestinians Protest Opening Of US Embassy In Jerusalem

The Israeli military continued its violent repression of Palestinian protesters on Monday when soldiers once again gunned down unarmed demonstrators whom it claimed were trying to penetrate the border fence separating Israel from the Gaza Strip.

According to Italian newspaper Il Sole 24 Ore, Israeli soldiers said they were “provoked into violence” when small groups of Palestinians began throwing stones at IDF soldiers from the other side of the border fence. The soldiers responded by gunning down demonstrators; by the time the demonstrations had quieted down, at least 28 Palestinians had been killed, and another 600 had been wounded, according to the Hamas-controlled Health Ministry.

The Wall Street Journal reported that a 12-year-old and a 14-year-old had been counted among the dead.

At least 10,000 Palestinians had gathered early Monday local time along more than 10 locations along the border fence, which is one of several closed borders that has effectively cut off Gaza from the rest of the world (though Hamas has been known to dig tunnels to help people move in and out of the territory), Il Sole 24 Ore reported.

The international community has widely condemned President Trump’s decision to move the US embassy to Jerusalem (though, as Trump has correctly pointed out, every US president since at least Bill Clinton had promised to move the embassy). The UK reiterated Monday that it doesn’t intend to move its embassy, adding that it doesn’t agree with President Trump’s decision.

Gaza

Gaza

Since late March, Hamas has been organizing protests along the border fence as part of six weeks of protests meant to demand the long-sought “right of return” for Palestinians who were forced off their land by Jewish settlers during the genesis of the Israeli state.

Three

The IDF has blamed Hamas, which controls Gaza’s government – of instigating the “March of Return” protests with the intention of ultimately breaching the border fence, something that the army says would threaten Israeli towns near the border.

On Sunday, Israel dropped leaflets throughout Gaza warning Palestinians to stay away from the border fence. They also accused Hamas of “stealing your money and using it to dig tunnels at your expense.

Ruptly is broadcasting a live feed from the Gaza side of the border, where demonstrators could still be seen milling about amid clouds of smoke – though the protest had largely subsided.

On Monday, Israel is celebrating its 70th Independence Day. However, among Palestinians – many of whom are descendants of the Arabs who were forced off their land by the Israelis – the anniversary is known as the Nakba, or “catastrophe”.

In a series of tweets, the IDF accused Hamas of leading a “terrorist operation under the cover of the masses throughout Gaza” and said the army would “destroy Hamas infrastructure, which was intended to be used as forward operating bases for terrorist activity today and tomorrow.”

The IDF added that, should Hamas succeed in breaching the border, Palestinians would threaten thousands of Israeli lives.

Of course, Gaza isn’t the only area where tensions were flaring. As we pointed out yesterday, Israeli police swarmed Jerusalem’s Old City to try and stop radical Jewish settlers from storming Islam’s third-holiest site, the Al-Aqsa Mosque, and raise Israel’s flag over the monument.

“Hundreds of settlers stormed the compound along with a large Israeli police force,” Firas al-Dibis, a Palestinian official who oversees the city’s Islamic religious sites said in a statement.

President Trump tweeted Monday morning that the opening of the US embassy in Jerusalem would be covered live on Fox News beginning at 9 am. Treasury Secretary Steven Mnuchin was in Jerusalem for the occasion. In recognition of Trump’s decision to move the embassy despite widespread international outrage, one of Israel’s top football teams announced Sunday night that it would rename itself in honor of President Trump.

According to the Mirror, Beitar Jerusalem said it would now be called Beitar Trump Jerusalem.

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‘Assault Weapons,’ Explained: New at Reason

Although “assault weapons” fire no faster than any other semi-automatic, such as a Glock 19 pistol or a Ruger 10/22 hunting rifle, politicians routinely conflate them with machine guns, which have not been legally produced for civilians in the United States since 1986. Prohibitionists like Sen. Diane Feinstein (D–Calif.) argue that “assault weapons” are good for nothing but mass shootings and gang warfare, despite the fact that only a tiny percentage of these guns are ever used to commit crimes. They say these firearms are “weapons of choice” for mass shooters, who are in fact much more likely to use handguns, and claim they are uniquely deadly, even though the category is defined based on features that make little or no difference in the hands of a murderer.

Josh Sugarmann, founder and executive director of the Violence Policy Center, laid out this strategy of misdirection and obfuscation in a 1988 report on “Assault Weapons and Accessories in America.” Sugarmann observed that “the weapons’ menacing looks, coupled with the public’s confusion over fully automatic machine guns versus semi-automatic assault weapons—anything that looks like a machine gun is assumed to be a machine gun—can only increase the chance of public support for restrictions on these weapons.”

He added that because “few people can envision a practical use for these guns,” the public should be more inclined to support a ban on “assault weapons” than a ban on handguns, writes Jacob Sullum in the latest edition of Reason.

View this article.

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California’s Boneheaded Solar Remedy for Climate Change: New at Reason

In the world of government policy, two chief dangers always loom. The first is people with bad intentions using every available means to achieve their malignant goals. The second, more common but no less destructive, is people with the purest of hearts and the most boneheaded of methods.

For an example of the latter, writes Steve Chapman, look west, where the California Energy Commission just decreed that starting in 2020, new homes must be equipped with solar panels.

View this article.

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Bill Gross’s Ex-Wife Stole A $35M Picasso From Their Bedroom And Replaced It With A Hand Drawing

High-profile Wall Street divorces typically provide some entertaining grist for the gossip pages – whether it’s Ken Griffin’s ex-wife demanding alimony payments of $1 million a month (how else would she afford those $500,000 vacations?) or a former Miss Germany suing her hedge-fund hubby for (allegedly) giving her herpes.

To that list, we can now add the story of Bill Gross’s ex-wife Sue Gross, who pilfered a 1932 Picasso purportedly worth some $35 million from the couple’s Laguna Beach, Calif. home.

Gross

“Le Repos” by Pablo Picasso, courtesy of Sotheby’s

In the months before their separation, Sue Gross replaced the painting – which had been hanging in the couple’s former bedroom – with a copy that she said she herself had painted a few years prior.

And as it turns out, despite having publicly acknowledged his ex-wife’s fondness for painting replicas of their art collection, her husband never noticed. That, or it just goes to show what the intrinsic value of a Picasso is, when one’s amateur painting wife can draw a replica and the billionaire purchaser will never know…

In any case, the former Mrs. Gross revealed the switcheroo during the couple’s acrimonious divorce proceedings, noting that she had already taken the painting after she successfully secured control of the piece in a coin flip used to divide their assets. 

Upon learning of his wife’s deception, Bill Gross was not pleased: “She stole the damn thing,” Gross fumed, according to the New York Post.

The painting, titled “Le Repos”, is “an intimate portrait” of Picasso’s lover and muse, Marie-Thérèse Walter. The couple had owned the painting since 2006.

In November testimony, the ex-wife readily admitted to swiping the Picasso, citing an e-mail Bill sent to her where he instructed her to “take all the furniture and art that you’d like.”

“And so I did,” she said.

But it wasn’t quite that simple, as testimony revealed the ex-wife’s prowess for both painting and artful deception.

“Well, you didn’t take it and leave an empty spot on the wall, though, did you?” lawyers for Bill Gross asked.

“No,” Sue responded.

“You replaced it with a fake?” the lawyer asked.

“Well, it was a painting I painted,” Sue responded.

“A replication of the Picasso?” the lawyer asked.

“A replication, yes,” Sue answered.

“And it had the Picasso signature and everything, didn’t it?” the lawyer asked.

“Not exactly . . .” she said.

“Whose signature was it? Sue Gross?” the lawyer asked.

“I don’t remember how I signed it. Bill will remember because I painted it at home years ago,” she said.

“Did you tell him that you took the Picasso?” the lawyer asked.

“No. We didn’t speak for a year and a half,” she answered just before the line of questioning turned to a 7-foot, 300-pound rabbit sculpture she also admitted taking.

While Gross admitted that he couldn’t tell the difference between the original and the wife-drawn replica, he said he wasn’t surprised to learn of the original’s fate.

According to court documents, Gross alleged that several other choice items had gone missing from their home shortly after their separation – including a Tiffany clock, 20 bottles of wine, Christmas decorations and a 1,000-pound-statue.

As the Post reminds us, Gross once praised his wife’s painting prowess during one of his famous investor letters from June 2015, when he conceded that his wife was “the artist in the family.”

“[Sue] likes to paint replicas of some of the famous pieces, using an overhead projector to copy the outlines and then just sort of fill in the spaces,” Gross wrote.

“‘Why spend $20 million?’ she’d say – ‘I can paint that one for $75,’ and I must admit that one fabulous Picasso with signature ‘Sue,’ heads the fireplace mantle in our bedroom,” Bill continued, referring to a different artwork.

The original Picasso is expected to sell for between $25 and $35 million during a Sotheby’s auction at 7pm on Monday. It is unclear if Bill will be (double) bidding on it, to assure its return back to his mansion.

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ECB’s Villeroy Spooks Europe With “End Of QE” Talk; Spikes EUR, Bund Yields

ECB member and Bank of France governor, Francois Villeroy de Galhau, hit the wires this morning insisting that despite sluggish inflation, the governing council is set to stick with the plan and end QE over he near term, citing September or December as the likely cut off point, and warning that the first rate hike could come quarters, not years after the end of asset purchases.  

Absent some political fiasco (ahem Italy), the ECB wants to stick with the current plan of normalisation, to some degree, and on inflation alone he went on to say that the governing council view the slowdown as ‘temporary’ and that it expects a pick up to ‘resume over coming months’.

Bank of France governor Francois Villeroy de Galhau

In light of this, the Bank of France governor deemed it necessary to quantify the meaning of rate hikes ‘well past’ the end of QE, saying that this does not mean years but rather quarters.  Naturally central bankers like to maintain a level of consistency to their guidance – much like we saw with the Bank of England last week and their more optimistic take on the Q1 GDP data, and in the same way, the ECB will be loath to back down from previous assessments, with less caution required on their wording and general rhetoric now that we have seen the EUR moderate levels against the resurgent USD.  

Villeroy’s comments prompted a spike in the Euro, which rose to session, and one week highs, rising as much as 1.990, while 10Y bund yields similarly bounces during the speech, rising as high as 0.60% this morning.

Later on this week we get the final reading of Apr CPI which is expected to remain at 1.2%, but ahead of this, on Tuesday, Q1 GDP is expected to show a 0.4% rise which should alleviate some of the concerns over damp inflation levels.  Nevertheless, this is the ECB’s primary mandate, and they will dance to the tune of asset price stability or not, but at least they will be less concerned over the level of the exchange rate which almost moderated to their forecast level of 1.1800 used as reference late last year.

That said, in a classic case of reflexivity, the ECB is only considering pulling back on QE (and eventually hiking rates) as long as European markets are stable, which they are currently, and surprisingly so in light of the latest political developments in Italy, although the moment the ECB hints QE is over, expect turmoil and chaos to turn, because – as we have shown on several occasions in the past week – the only buys of Italian bonds in the past few years, has been the ECB. Take the ECB out and all that’s left are sellers.

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