It Begins: For The First Time Ever, China Takes Over An Insolvent Bank

There was a time when in the years following the financial crisis, every Friday the FDIC would report of one or more small and not small banks failing, as their liabilities exceeded their assets, who were taken over by larger peers with a taxpayer subsidy to cover the shortfall.  And while this weekly event, also known as “FDIC Failure Friday” has faded from the US for now, it has made a grand appearance in China.

China’s financial regulators said on Friday the country’s banking and insurance regulator and the central bank, will take control of the small, troubled inner Mongolia-based Baoshang Bank due to the serious credit risks it poses. The regulator’s control of Baoshang will last for a year starting on Friday, the People’s Bank of China (PBOC) and China Banking and Insurance Regulatory Commission (CBIRC) said on their websites.

China Construction Bank (CCB) will be entrusted to handle the business operations of the small lender, based in the industrial city of Baotou, the statement said.

Such a takeover by national authorities is extremely rare, and takes place amid gathering concerns among regulators and financial analysts about a renewed surge in bad debts…

… a record pace of corporate defaults, amounting to 39.2 billion yuan of domestic bond defaults in the first four months of the year, 3.4 times the total for the same period of 2018…

… and the deteriorating health of small-scale banks in rural areas and small cities as China’s economy slows and enormous debts come due.

“It’s a rare move for the Chinese central government to take over a bank,” said Shujin Chen, an analyst with Huatai Securities.

Moody’s analyst Yulia Wan told the WSJ that regulators likely decided to take over Baoshang to limit any fallout to businesses in Inner Mongolia. “The move is to reduce the risk of a shock to the local economy,” said said, adding that the Baoshang takeover appeared to be the first time that national authorities seized control of a bank since Chinese lenders started listing on stock markets in the 1990s. In the past when banks came under pressure, local authorities would pull together funds from local state-owned firms and investors, or have another bank stage a takeover.

As Reuters adds, this extremely rare takeover – the first in nearly three decades – comes at a time when the PBOC has aggressively eased financial standards and cut reserve ratios for smaller banks to avoid just this outcome, and highlights the long struggle of some smaller regional lenders in China, which suffer from deteriorating asset qualities, inadequate capital buffers, and poor internal controls and corporate governance

Baoshang Bank rose to prominence after its key stakeholder Tomorrow Holdings was targeted in a government crackdown on systemic risks posed by financial conglomerates. The bank was also linked to financier Xiao Jianhua, according to the WSJ. Xiao left Hong Kong and crossed the border into mainland China in early 2017, according to statements from Hong Kong police and his company, and he hasn’t been heard from since.

Later that year, Baoshang “unexpectedly” reported a capital shortage. Chinese ratings agency Dagong Global Credit Rating Co. then revised its outlook on Baoshang to negative, questioning the lender’s ability to repay borrowings. They were right.

There is concern the Baosheng takeover “will add to the vulnerability of country’s financial system amid the economic slowdown.”

While it has been generally described as a “small” bank, Baoshang had a total of 156.5 billion yuan ($22.68 billion) of outstanding loans by the end of 2016, a 65% jump from the end of 2014, according to the bank’s last filing on its assets and liabilities on its website. What is absolutely bizarre, however, is that the bank’s “official” non-performing loan ratio then was only 1.68% as of December 2016. That, in itself, would never have been sufficient to force a takeover, and suggests that not only was the bank’s real bad debt ratio much higher, but that China continues to chronically under-represent the true state of its NPLs to avoid bank runs.

The last time Baoshang disclosed financial data was in the third quarter of 2017. Then it had 576 billion yuan in assets and 543 billion yuan in liabilities, with a net profit of 3.2 billion yuan. Based on those 2017 numbers, analyst Long Chen with consulting firm Gavekal Dragonomics estimated that Baoshang back then was ranked around the 50th largest bank in the nation.

Naturally, to avoid a panic bank run among other smaller, less capitalized banks, the CBIRC said that principal and interest on personal saving accounts in the bank will be fully guaranteed, and the business operations of Baoshang bank will not be affected by the takeover.

The takeover of the bank is the first in decades, and takes place amid China’s crackdown on systemic financial risks, which in February 2018 resulted in the take over of former roll-up giant and conglomerate Anbang Insurance, which in 2015-2016 made eyebrow-raising investments in overseas property, including the Waldorf Astoria hotel in New York. Anbang’s chairman, Wu Xiaohui, was sentenced to 18 years in prison later that year after being convicted of fraud and abuse of power. Wu expressed remorse, according to the court that sentenced him, but he also said he doubted he violated any laws. He hasn’t made a public statement since.

The question now is whether bank investors, having seen first hand for the first time in nearly 30 years, that a Chinese bank can fail (and be taken over by the state), will jog at a leisurely pace, or not so leisurely, to their own local bank and pull out their deposits in a cool, calm and collected manner… or not so cool, calm and collected. If so, the trade with between the US and China will have a clear winner in the very near future.

via ZeroHedge News http://bit.ly/2WrkLd6 Tyler Durden

Who Owns Your Life Story? Free Speech Rules (Episode 4)

Do people need your permission to write about you? What if they want to make a movie about you, or a YouTube video, or a blog post, or whatever? Who owns your name, likeness, voice, and life story? Here’s the answer, in four rules.

Well, two rules, one who-knows, and one piece of advice.

Rule 1: People can write books about you, make movies about you, or write articles about you without violating your so-called “right of publicity.” That right is often defined as an exclusive right to commercial use of your name, likeness, voice, and other “attributes of identity”; but it does not apply to biography, fiction, news coverage, and so on.

The First Amendment protects people’s ability to write about others. That’s what newspapers do, both about famous people and about ordinary ones who happen to draw the newspaper’s attention. It’s also why we see unauthorized biographies, whether in print or on the screen, and fiction with real characters, like Midnight in Paris and Forrest Gump. And that’s true even though those items are distributed for money.

So you don’t really own your name or likeness or life story, in the sense of having exclusive rights over it. Neither does your biographer. No one owns it, because everyone is free to use it, at least when they’re commenting about you and your life.

Rule 2: People generally can’t use your name, likeness, or voice in commercial advertising. In some situations, such use can also violate trademark law, because consumers might be confused into thinking you’re endorsing the product.

Exception: If people are advertising books about you or newspapers that mention you, it’s OK for them to use your name or picture in doing so. Such ads are treated like the underlying book or newspaper, and are therefore allowed.

This right to prevent the use of a name or likeness in advertising applies not just to living people, but also to recently dead ones. How recent? Depends on the state where the people were living when they died. Some states cover people for 50 years after their death, some more, some less.

Rule 3: When it comes to merchandising, different state and federal courts have reached different results about this, often inconsistent results. The Missouri Supreme Court has held that people can sue over use of their name in comic books, though courts have consistently rejected this theory for other kinds of books. But this may be an outlier decision; other judges have criticized it, and the California Supreme Court has rejected such a lawsuit in a comic book case very similar to the Missouri one.

It’s also unsettled whether athletes’ names and statistics can be used in the big business of sports gaming, whether fantasy sports leagues or sports video games. The Supreme Court could resolve whether and when the First Amendment protects such less traditional communications media against right of publicity claims, but the Justices haven’t done that yet.

Finally, a practical note: Even though creators may have the right to freely use people’s names in, say, movies about them, it might still be a good idea to get their agreement, if possible.

There are several reasons for that. For one, while filmmakers and authors routinely win right of publicity lawsuits filed against them, there’s still some risk and a lot of expense. Safer for the creators to pay some money, if they have it and the person is willing to take it.

Second, biographers can be liable for defamation if they get some significant facts wrong about a living person.

Third, working with subjects (or their heirs) can give authors access to facts they otherwise wouldn’t know.

Fourth, getting the subject’s permission can prevent bad publicity, and can enlist the subject into helping promote the work.

All this might be impossible. If a biography would be critical of its subject, for instance, the subject might refuse to cooperate. In that case, the authors may want to stand on their First Amendment rights—see Rule 1. But if cooperation is possible, it’s a good idea.

Finally, all we say here has to do with American law. These days, much of the revenue for movies comes from other countries—and the rules in those countries might be different. Better safe than sorry, many producers and publishers say.

So to sum up:

The First Amendment protects authors’ rights to use others’ names, likenesses, and life stories in biographies, works of fiction, and the like, even though such works are commercially sold. The so-called “right of publicity” can’t stop that.

The First Amendment doesn’t protect such uses in most advertising; there, the advertiser generally has to get the permission of people referred to in the ads.

Courts are split on whether people’s names can be used on T-shirts, greeting cards, in video games, and the like.

And it’s often a good idea to get the subject’s agreement anyway, even for a movie that you might technically be legally free to make.

Written by Eugene Volokh, who is a First Amendment law professor at UCLA.
Produced and edited by Austin Bragg, who is not.

This is the fourth episode of Free Speech Rules, a video series on free speech and the law. Volokh is the co-founder of The Volokh Conspiracy, a blog hosted at Reason.com.

This is not legal advice.
If this were legal advice, it would be followed by a bill.
Please use responsibly.

—

Music: “Lobby Time,” by Kevin MacLeod (Incompetech.com)
Licensed under Creative Commons: By Attribution 3.0 License
http://bit.ly/oKTIFM

Subscribe to our YouTube channel.
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Bill Would Limit California Cops’ Use of Deadly Force

A compromise between California law enforcement and civil rights organizations will allow a bill to move forward that would restrict how police in the state may use deadly force against suspects.

AB 392, introduced by Assemblymember Shirley Weber (D–San Diego), was introduced in response to the 2018 fatal shooting of Stephon Clark. Following a foot chase, Sacramento police officers mistook Clark’s cell phone for a gun and opened fire.

The ensuing public outrage was compounded in March when the Sacramento District Attorney’s office decided not to file any charges against the two officers involved. California law permits cops to use deadly force if they have a “reasonable fear” that they are in danger. Officers thus can justify the use of deadly force by saying they saw what they thought was a threat, even if the threat wasn’t real.

Weber’s bill changes this threshold to require that the officer not just believe he or she was in danger, but believe “based on the totality of the circumstances, that deadly force is necessary to defend against an imminent threat of death or serious bodily injury to the officer or to another person, or to apprehend a fleeing person for a felony that threatened or resulted in death or serious bodily injury, if the officer reasonably believes that the person will cause death or serious bodily injury to another unless the person is immediately apprehended.”

That’s a bit of a mouthful, and that’s partly due to the aforementioned compromise. The original version of the bill was a bit stricter: That “necessary” use of deadly force referred more specifically to when a police officer objectively believes he or she had no alternatives to the use of deadly force given the totality of the circumstances.

In the Clark example, the police immediately started shooting because they mistakenly thought Clark had fired a gun at them. He did not. The police were not pinned in or out in the open and vulnerable. They had Clark trapped in a backyard and were around a corner from him. They could have backed off for a moment and remained completely safe, and then they might have realized that Clark was not, in fact, shooting at them. That’s the kind of decision that the bill was intended to propose.

But law enforcement groups resisted that version of the bill, and so the two sides have reached this compromise. As the Los Angeles Times notes, this doesn’t mean the police organizations are supporting AB 392. They remain unhappy about it. It just means they’re not going to oppose its passage any longer.

Nevertheless, the bill’s supporters are claiming a big win. It certainly seems much more likely to pass now. Peter Bibring, police practices director for the American Civil Liberties Union of California, sent out a prepared statement about the good news:

By requiring that officers use deadly force only when necessary, AB 392 will finally address this serious problem head on and establish one of the strongest state use of force laws in the country.

This groundbreaking bill draws directly from use of force policies that individual law enforcement agencies have successfully adopted throughout the country—and that we know work to reduce use of force incidents while also keeping officers safe.

The bill will now move forward to an Assembly vote. Democratic Gov. Gavin Newsom has already declared his support for the legislation. You can read the new compromise text here.

 

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Short Circuit: A Roundup of Recent Federal Court Decisions

Please enjoy the latest edition of Short Circuit, a weekly feature from the Institute for Justice.

IJ’s own Diana Simpson was on NPR discussing Chicago’s vehicle impound system, which imposes tens of millions of dollars in fines and fees annually and is insanely unfair to residents, afflicting the innocent as well as the guilty and the poor most of all. Click here to listen.

  • Fan of the Libertarian Party dies, leaves the party a surprise gift of $235k. Uh oh! Campaign finance law imposes limits on contributions to political parties. Libertarian Party: The limits exist to prevent quid pro quo corruption, and we can’t repay a favor to a dead guy. D.C. Circuit (en banc): Yeah, but it’s conceivable that a donor might strike a corrupt bargain with a campaign before they die, so the limit is fine. Dissent: This is the First Amendment; you need real evidence, not just speculation.
  • Federal law authorizes retired law enforcement officers to carry concealed firearms all over the country (subject to some conditions), overriding state and local laws to the contrary. D.C.: Retired corrections officers don’t count, as they didn’t have the power to arrest anyone. D.C. Circuit: They do and did.
  • Friends, please enjoy this vocab quiz from Judge Selya of the First Circuit: Perfervid, salmagundi, immurement, plaint, ossature, praxis, and tenebrous. Plus, a scrutable idiom: “nose-on-the-face plain.”
  • Lawful permanent resident, a hairdresser from the Bronx, is jailed for several months awaiting deportation hearing, during which time she experiences severe mental health breakdown. She prevails at her hearing; Orange County, N.Y. officials release her in sub-zero temperatures without her medication or any way of obtaining more (or even knowing what medication she needed). Second Circuit: She’s plausibly alleged officials failed to provide adequate discharge planning in violation of the Fourteenth Amendment. The suit should not have been dismissed.
  • The Trump Administration failed to adequately explain its reasons for rescinding DACA, an Obama administration program delaying deportation for immigrants who came to the U.S. illegally as children. Which violated the Administrative Procedure Act. So says the Fourth Circuit (over a dissent).
  • Man buys gift for friends on Amazon—a headlamp. It’s defective; it burns down his friends’ Montgomery County, Md. home. Must Amazon pay the friends’ insurer? The Fourth Circuit says no; under state law, Amazon is not a “seller” as it never took title to the lamp. Concurrence: Which is about the only thing Amazon didn’t do; it warehoused the lamp, took payment for it, and assumed the risk of credit card fraud, among things. Maryland legislators and judges might want to look into this.
  • Litigation financing, heartbreak, and recusal collide in this Texas-sized debacle. A litigation financing company has a stake in 21 lawsuits being litigated by a Mexican law firm. But one of the law firm’s owners is embroiled in a divorce in Texas, and his interest in the law firm is part of the marital estate. So the litigation financing company intervenes in the divorce proceeding to protect its investment in the law firm and to collect debts owing to the firm. But the lawyer the company hires to collect the soon-to-be-divorced lawyer’s debts turns out to also be law partners with the divorce court judge. Which—when uncovered—explodes the litigation financing company’s efforts to recover its investment and leaves it having wasted $2 mil in attorney fees. Yikes! But that’s just the beginning. The litigation financing company then sues the lawyer for malpractice. No, not the lawyer getting the divorce. The other one; the one it originally hired to recover its investment but who had the business relationship with the judge. And in response to the company’s suit, the lawyer commits what the Fifth Circuit later describes as a “litany of litigatory misbehavior.” Which leads to the district court’s striking the lawyers’ pleadings, entering a default judgment in favor of the litigation financing company, and awarding nearly $3 mil in damages. Fifth Circuit: The default judgment shall stand, but the district court needs to recalculate the damages award.
  • Man allegedly violates his probation; his probation officer gets a Houston County, Tenn. judicial commissioner to revoke it. He goes to jail for several months. But wait! A state court judge rules that Tennessee judicial commissioners, who can issue search and arrest warrants, do not have the authority to issue probation revocation warrants. Can the man sue the commissioner? The Sixth Circuit says no. Judicial immunity.
  • Since 2014, Bel-Nor, Mo. resident has displayed a “Black Lives Matter” sign in his front yard; since 2016, he has also displayed two (now-outdated) political signs. City: Under our ordinance, you’re allowed one “sign” and one “flag”—which we’ve defined to mean a piece of fabric that is a “symbol of a government or institution”—and none of your signs are a flag. Eighth Circuit: The city’s different treatment of “signs” and “flags” is content based. A banner with an Army logo would qualify as a “flag,” but one with a Cardinals logo wouldn’t. That makes the ordinance likely invalid under the First Amendment, so the resident gets a preliminary injunction while the case proceeds.
  • Man is sent to prison for 145 years on strength of his eighth grade stepdaughter’s testimony that he abused her. She recants, but a state court determines the recantation was not credible, and the Colorado Supreme Court declines to order a new trial. Tenth Circuit: His claim that the trial court relied on false testimony (in violation of due process) doesn’t work since the allegedly false testimony was from a private citizen and he can’t show the gov’t knew it was false.
  • Gorilla Gym infringes Gorilla Playsets’ trademark, as both use a similar size and type of gorilla for their children’s playground equipment, says the Eleventh Circuit. But the district court was monkeying around when it ordered the infringer to pay its profits for continuing to use the trademark after being sued. After all, it was, at the time, a legal trademark that no judge had ruled against.
  • And in en banc news, the Ninth Circuit has asked the Montana Supreme Court for its view on whether dinosaur fossils are owned by the owner of the land on which they’re found or instead by them that own the rights to mine minerals under that land.
  • And in further en banc news, the Seventh Circuit will not reconsider its decision applying the “doctrine of consular nonreviewability.” Come for the initial decision (a U.S. citizen cannot challenge a consular official’s decision to deny his Yemeni wife and children a visa because it isn’t clear that the ability to live in America with one’s spouse is a protected constitutional right (and, even if it were, the decision was legit)), stay for the fiery back and forth between the dissental and concurrence regarding the denial of rehearing. (Judicial abdication! Rights of citizenship! Bad faith of immigration officials!)

It was a good week for the First Amendment. In North Dakota, a federal judge issued a temporary restraining order barring the city of Mandan from imposing thousands of dollars in fines on the owners of the Lonesome Dove saloon (for now). The owners’ crime? Commissioning a painted mural on the side of their building that features a sunset over a landscape with mountains and cowboys and the words “Lonesome Dove,” which the city deemed an unlawful commercial message. Click here to learn more. In Savannah, Ga. a federal judge ruled that the city’s tour guide licensing law, which, among other things, had imposed a 100-question test filled with picayune trivia on would-be guides, violated the First Amendment. “Today’s ruling vindicates a simple principle,” says IJ Senior Attorney Robert McNamara. “In this country, we rely on people to decide whom they want to listen to. We do not rely on government to decide who will get to speak.” Click here for more.

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Who Owns Your Life Story? Free Speech Rules (Episode 4)

Do people need your permission to write about you? What if they want to make a movie about you, or a YouTube video, or a blog post, or whatever? Who owns your name, likeness, voice, and life story? Here’s the answer, in four rules.

Well, two rules, one who-knows, and one piece of advice.

Rule 1: People can write books about you, make movies about you, or write articles about you without violating your so-called “right of publicity.” That right is often defined as an exclusive right to commercial use of your name, likeness, voice, and other “attributes of identity”; but it does not apply to biography, fiction, news coverage, and so on.

The First Amendment protects people’s ability to write about others. That’s what newspapers do, both about famous people and about ordinary ones who happen to draw the newspaper’s attention. It’s also why we see unauthorized biographies, whether in print or on the screen, and fiction with real characters, like Midnight in Paris and Forrest Gump. And that’s true even though those items are distributed for money.

So you don’t really own your name or likeness or life story, in the sense of having exclusive rights over it. Neither does your biographer. No one owns it, because everyone is free to use it, at least when they’re commenting about you and your life.

Rule 2: People generally can’t use your name, likeness, or voice in commercial advertising. In some situations, such use can also violate trademark law, because consumers might be confused into thinking you’re endorsing the product.

Exception: If people are advertising books about you or newspapers that mention you, it’s OK for them to use your name or picture in doing so. Such ads are treated like the underlying book or newspaper, and are therefore allowed.

This right to prevent the use of a name or likeness in advertising applies not just to living people, but also to recently dead ones. How recent? Depends on the state where the people were living when they died. Some states cover people for 50 years after their death, some more, some less.

Rule 3: When it comes to merchandising, different state and federal courts have reached different results about this, often inconsistent results. The Missouri Supreme Court has held that people can sue over use of their name in comic books, though courts have consistently rejected this theory for other kinds of books. But this may be an outlier decision; other judges have criticized it, and the California Supreme Court has rejected such a lawsuit in a comic book case very similar to the Missouri one.

It’s also unsettled whether athletes’ names and statistics can be used in the big business of sports gaming, whether fantasy sports leagues or sports video games. The Supreme Court could resolve whether and when the First Amendment protects such less traditional communications media against right of publicity claims, but the Justices haven’t done that yet.

Finally, a practical note: Even though creators may have the right to freely use people’s names in, say, movies about them, it might still be a good idea to get their agreement, if possible.

There are several reasons for that. For one, while filmmakers and authors routinely win right of publicity lawsuits filed against them, there’s still some risk and a lot of expense. Safer for the creators to pay some money, if they have it and the person is willing to take it.

Second, biographers can be liable for defamation if they get some significant facts wrong about a living person.

Third, working with subjects (or their heirs) can give authors access to facts they otherwise wouldn’t know.

Fourth, getting the subject’s permission can prevent bad publicity, and can enlist the subject into helping promote the work.

All this might be impossible. If a biography would be critical of its subject, for instance, the subject might refuse to cooperate. In that case, the authors may want to stand on their First Amendment rights—see Rule 1. But if cooperation is possible, it’s a good idea.

Finally, all we say here has to do with American law. These days, much of the revenue for movies comes from other countries—and the rules in those countries might be different. Better safe than sorry, many producers and publishers say.

So to sum up:

The First Amendment protects authors’ rights to use others’ names, likenesses, and life stories in biographies, works of fiction, and the like, even though such works are commercially sold. The so-called “right of publicity” can’t stop that.

The First Amendment doesn’t protect such uses in most advertising; there, the advertiser generally has to get the permission of people referred to in the ads.

Courts are split on whether people’s names can be used on T-shirts, greeting cards, in video games, and the like.

And it’s often a good idea to get the subject’s agreement anyway, even for a movie that you might technically be legally free to make.

Written by Eugene Volokh, who is a First Amendment law professor at UCLA.
Produced and edited by Austin Bragg, who is not.

This is the fourth episode of Free Speech Rules, a video series on free speech and the law. Volokh is the co-founder of The Volokh Conspiracy, a blog hosted at Reason.com.

This is not legal advice.
If this were legal advice, it would be followed by a bill.
Please use responsibly.

—

Music: “Lobby Time,” by Kevin MacLeod (Incompetech.com)
Licensed under Creative Commons: By Attribution 3.0 License
http://bit.ly/oKTIFM

Subscribe to our YouTube channel.
Like us on Facebook.
Follow us on Twitter.
Subscribe to our podcast at iTunes.

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“It Feels Lousy” – Trade Deal Hope Hits 28-Month Lows

With The Dow on course for its longest losing streak in 8 years, albeit remaining modestly off its record highs and still significantly on the year, traders are anxious that President Trump’s plunge-protecting-tweets appear to have stopped working, along with the guru-creating BTFD strategy that has worked so well for every Tom, Dick, & Harry home-gamer playing the stock market.

As Bloomberg reports, three weeks after the president rekindled the trade war with China, sending the Dow into a 4% tailspin, traders are growing increasingly impatient for their dose of White House succor. 

“It’s beginning to feel lousy,” said Donald Selkin, chief market strategist at Newbridge Securities Corp.

“I own stocks. Of course you’d like to see some kind of a stop to this downtrend we’re in now.”

Stocks have been rattled by trade-related headlines ever since Trump hiked tariffs on Chinese goods earlier this month. Since then, there’s been a tit-for-tat escalation, with China retaliating, the president targeting Chinese tech companies and China subsequently warning of its unwavering resolve to fight.

This has sparked a collapse in ‘hope’ for a trade deal with China-sensitive stocks underperforming the market by the most since January 2017.

And as the decline accelerates, traders become ever more hopeful that a well-placed tweet, or leaked optimistic headline, will trigger a re-run of January/February’s panic-bid short-squeeze meltup once again.

“He’s not afraid to use his social media pulpit. He’s not afraid to try to jawbone the market,” Chris Gaffney, president of world markets at TIAA, said in an interview.

“He does look at the equity markets as a measure of confidence in his administration, certainly with any big problems facing the equity markets he has a tendency to try to.”

But, as Bloomberg notes, Trump’s been relatively quiet about the market since then. JPMorgan’s quant market-whisperer Marko Kolanovich suggested the president’s threshold for market pain is about 4%, but for now, no sign of him.

Instead of talking up equity markets, Trump is devoting attention to assuaging a key political constituency, with plans to announce an aid package for farmers suffering under the latest batch of tariffs.

Leaving some to wonder whether the trade war had escalated to the point where markets have grown inured to any presidential soothing.

“I don’t think that either the presidency or the Fed has infinite power over economic activity or over markets,” said Ed Keon, portfolio manager for QMA, a quantitative firm in Newark, New Jersey.

“I’d be a little reluctant to place an investment on the theory that the Fed or president will have my back under any circumstances and I can therefore downplay risk.”

And don’t forget, there appears to be a constituency in the Asia sessions that is willing to heavily sell US equities…

Who could that be?

via ZeroHedge News http://bit.ly/2EwnsQs Tyler Durden

‘Ratfu*ker And Spy’ Stefan Halper Sued By Cambridge Academic Smeared As Flynn’s ‘Honeypot’ 

A Russian-born British academic is suing FBI informant Stefan Halper for dragging her name through the mud as part of a “conspiracy to undo the 2016 Presidential election and topple the President of the United States of America.” 

Svetlana Lokhova

Svetlana Lokhova filed the lawsuit against Halper and several Mainstream Media (MSM) news organizations, who she has accused of publishing false information provided by Halper. Lokhova’s contact with Flynn at at 2014 dinner organized by former MI6 head Sir Richard Dearlove was used in several 2017 media reports to suggest that Flynn had been “gotten to” by the Russians, while pundits and social media commentators suggested she was a Kremlin “honeypot.” 

Michael Flynn is pictured at a 2014 dinner at the University of Cambridge. (Courtesy of Svetlana Lokhova)

“Stefan Halper is a ratfucker and a spy, who embroiled an innocent woman in a conspiracy to undo the 2016 Presidential election and topple the President of the United States of America,” reads the lawsuit – which hilariously justifies the use of the word “ratfucker” in a footnote. 

Halper is accused of working with the FBI and “political operatives” at Cambridge to spread misinformation through MSM sources they had relationships with, in order to “fuel and further the now debunked and dead narrative that the Trump campaign colluded with Russia.”

Stefan Halper

The first story that hinted at impropriety between Flynn and Lokhova was published on Feb. 19, 2017 by Andrew, the Cambridge historian and Lokhova’s mentor. The piece reads as a lighthearted jab at Flynn, who had been fired as national security adviser three days earlier because of his contacts with Russia’s ambassador.

But Lokhova maintains that the article is “laden with sexual innuendo.” In it, Andrew claims that Flynn asked Lokhova to travel with him to Russia and to serve as his translator. He also claimed that Flynn referred to himself as “General Misha” in an email to Lokhova. She denies all the claims.

Several news outlets followed up on Andrew’s article with the added details that American intelligence authorities had been tipped off about Flynn’s contact with Lokhova. –Daily Caller

Lokhova notes that despite being flagrantly smeared by Halper and the MSM, special counsel Robert Mueller “never interviewed” her, and “never subpoenaed a single record from her,” and that the special counsel’s investigation found “no evidence” that she was a Russian spy, or that General Flynn had an affair with her.  

“The Mueller Report conclusively vindicates Plaintiff and General Flynn, and proves Halper and his associates were intentionally lying about virtually every material fact,” reads the filing. 

I’m not a Russian spy and I have never worked for the Russian government,” Lokhova told Fox News in April, adding “I believe that General Flynn was targeted and I was used to do it.“

As part of her filing, Lokhova notes that Halper was paid over $1 million by the Obama Defense Department between 2012 and 2018, with nearly half of it surrounding the 2016 US election. 

She also notes that according to journalist Sara Carter, Halper is steeped in Kremlin contacts. 

Ironically, documents obtained by SaraACarter.com suggest that Halper also had invited senior Russian intelligence officials to co-teach his course on several occasions and, according to news reports, also accepted money to finance the course from a top Russian oligarch with ties to Putin.

Several course syllabi from 2012 and 2015 obtained by this outlet reveal Halper had invited and co-taught his course on intelligence with the former Director of Russian Intelligence Gen. Vladimir I. Trubnikov.

…

Even more interesting are reports from the British Media outlet, The Financial Times, that state Halper received funds for the Cambridge seminar from Russian billionaire Andrey Cheglakov, who has close ties to Russian President Vladimir Putin. –Sara A. Carter

Lokhova says she “lives in constant fear” and has “contemplated suicide to end the suffering caused by the enormous weight and stress of being collateral damage in Halper’s international conspiracy and scandal.” 

Also named in the lawsuit are the New York Times, Washington Post, Wall Street Journal and NBC Universal. 

via ZeroHedge News http://bit.ly/2QlIYMr Tyler Durden

Bill Would Limit California Cops’ Use of Deadly Force

A compromise between California law enforcement and civil rights organizations will allow a bill to move forward that would restrict how police in the state may use deadly force against suspects.

AB 392, introduced by Assemblymember Shirley Weber (D–San Diego), was introduced in response to the 2018 fatal shooting of Stephon Clark. Following a foot chase, Sacramento police officers mistook Clark’s cell phone for a gun and opened fire.

The ensuing public outrage was compounded in March when the Sacramento District Attorney’s office decided not to file any charges against the two officers involved. California law permits cops to use deadly force if they have a “reasonable fear” that they are in danger. Officers thus can justify the use of deadly force by saying they saw what they thought was a threat, even if the threat wasn’t real.

Weber’s bill changes this threshold to require that the officer not just believe he or she was in danger, but believe “based on the totality of the circumstances, that deadly force is necessary to defend against an imminent threat of death or serious bodily injury to the officer or to another person, or to apprehend a fleeing person for a felony that threatened or resulted in death or serious bodily injury, if the officer reasonably believes that the person will cause death or serious bodily injury to another unless the person is immediately apprehended.”

That’s a bit of a mouthful, and that’s partly due to the aforementioned compromise. The original version of the bill was a bit stricter: That “necessary” use of deadly force referred more specifically to when a police officer objectively believes he or she had no alternatives to the use of deadly force given the totality of the circumstances.

In the Clark example, the police immediately started shooting because they mistakenly thought Clark had fired a gun at them. He did not. The police were not pinned in or out in the open and vulnerable. They had Clark trapped in a backyard and were around a corner from him. They could have backed off for a moment and remained completely safe, and then they might have realized that Clark was not, in fact, shooting at them. That’s the kind of decision that the bill was intended to propose.

But law enforcement groups resisted that version of the bill, and so the two sides have reached this compromise. As the Los Angeles Times notes, this doesn’t mean the police organizations are supporting AB 392. They remain unhappy about it. It just means they’re not going to oppose its passage any longer.

Nevertheless, the bill’s supporters are claiming a big win. It certainly seems much more likely to pass now. Peter Bibring, police practices director for the American Civil Liberties Union of California, sent out a prepared statement about the good news:

By requiring that officers use deadly force only when necessary, AB 392 will finally address this serious problem head on and establish one of the strongest state use of force laws in the country.

This groundbreaking bill draws directly from use of force policies that individual law enforcement agencies have successfully adopted throughout the country—and that we know work to reduce use of force incidents while also keeping officers safe.

The bill will now move forward to an Assembly vote. Democratic Gov. Gavin Newsom has already declared his support for the legislation. You can read the new compromise text here.

 

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Trump Says China Is Paying for His $16 Billion Tariff Bailout to Farmers. That’s Simply Not True.

For the past year, much of the debate over President Donald Trump’s tariffs has been focused, stubbornly, on who is paying for them.

The truth is that Americans are paying. When tariffed goods from China arrive at American ports, the importers must pay a tax of 10 percent (soon to increase to 25 percent). Importers pass that cost along to buyers, who pass it along to distributors, who pass it along…until it gets to you.

This isn’t exactly a state secret. It’s basic economics. It has been demonstrated to be true not only in theory but in several studies of how Trump’s tariffs are affecting the cost of goods. Perhaps most obviously, here is how goods subject to tariffs have increased in price over the past year relative to non-tariff goods:

Nonetheless, this has been subject to debate, because the president has built an alternate reality in which none of these obvious facts are true. In Trump’s fantasy world, the tariffs are basically free money pouring into federal coffers from China. He has made this claim in tweet after tweet, and high-ranking administration officials have repeated it in public statements. Treasury Secretary Steve Mnuchin tied himself in knots earlier this week to avoid stating the obvious—that Americans pay for the tariffs—and Trump was reportedly unhappy with Larry Kudlow, one of his senior economic aides, after Kudlow admitted to Fox News that the tariffs are being paid by Americans.

This might seem like nothing more than a snoozeworthy debate over semantics or economic theory or government PR strategies. But it matters a lot.

Case in point. In response to American tariffs on Chinese goods, China has effectively cut off purchases of many American farm goods—soybeans, most prominently. Previously, about 40 percent of all American-grown soybeans were exported to China. The loss of that export market has caused a glut of supply, leading prices to fall by as much as 25 percent and leaving farmers in the lurch. So yesterday Trump announced a second round of bailouts for American farmers stung by those retaliatory tariffs. This new round of farm bailouts will cost $16 billion, on top of the $12 billion that was redistributed to farmers last year.

Here’s why the debate over who pays for the tariffs matters. Listen to how Trump justified the new round of bailouts on Thursday:

“It all comes from China,” he said. “We’ll be taking in, over time, hundreds of billions of dollars in tariffs and charges on China, and our farmers will be greatly helped.”

The farm bailout is costless, Trump is arguing, because he’s taking money from China and giving it to American farmers. That argument could only hold water if China wer paying for the tariffs.

To repeat: Americans are paying for the tariffs.

Even if you believe, as some Trump supporters routinely argue, that China will ultimately “pay” for the tariffs in the form of lost American investment and a reduction in long-term growth—which is possible, yes—that does not change the basic fact that the tariff revenue being collected by the federal government today and redistributed to farmers tomorrow is coming out of American wallets.

Again: Americans are paying for the tariffs.

For what it’s worth, Trump is wrong about the numbers too. The federal government has collected about $40 billion in tariff revenue since last year—not hundreds of billions of dollars. That means the $28 billion spent bailing out farmers accounts for about 70 percent of all tariff revenue.

It’s also obvious political favoritism. Sure, farmers have been hit hard by the trade war, but so have plenty of other industries. How long before they start lining up for their own bailouts?

There are plenty of other questions about the farm bailout program, from the technical to the esoteric. The funding will flow through a New Deal–era agriculture insurance program. Taxpayers for Common Sense, a fiscal watchdog, describes the arrangement as “a backdoor revival and expansion” of a discredited farm subsidy program, “but with a few twists that make it more confusing and more costly.”

Or as trade lawyer and Cato Institute scholar Scott Lincicome put it:

Honestly, I can see why this seems repetitive.

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Trump Says China Is Paying for His $16 Billion Tariff Bailout to Farmers. That’s Simply Not True.

For the past year, much of the debate over President Donald Trump’s tariffs has been focused, stubbornly, on who is paying for them.

The truth is that Americans are paying. When tariffed goods from China arrive at American ports, the importers must pay a tax of 10 percent (soon to increase to 25 percent). Importers pass that cost along to buyers, who pass it along to distributors, who pass it along…until it gets to you.

This isn’t exactly a state secret. It’s basic economics. It has been demonstrated to be true not only in theory but in several studies of how Trump’s tariffs are affecting the cost of goods. Perhaps most obviously, here is how goods subject to tariffs have increased in price over the past year relative to non-tariff goods:

Nonetheless, this has been subject to debate, because the president has built an alternate reality in which none of these obvious facts are true. In Trump’s fantasy world, the tariffs are basically free money pouring into federal coffers from China. He has made this claim in tweet after tweet, and high-ranking administration officials have repeated it in public statements. Treasury Secretary Steve Mnuchin tied himself in knots earlier this week to avoid stating the obvious—that Americans pay for the tariffs—and Trump was reportedly unhappy with Larry Kudlow, one of his senior economic aides, after Kudlow admitted to Fox News that the tariffs are being paid by Americans.

This might seem like nothing more than a snoozeworthy debate over semantics or economic theory or government PR strategies. But it matters a lot.

Case in point. In response to American tariffs on Chinese goods, China has effectively cut off purchases of many American farm goods—soybeans, most prominently. Previously, about 40 percent of all American-grown soybeans were exported to China. The loss of that export market has caused a glut of supply, leading prices to fall by as much as 25 percent and leaving farmers in the lurch. So yesterday Trump announced a second round of bailouts for American farmers stung by those retaliatory tariffs. This new round of farm bailouts will cost $16 billion, on top of the $12 billion that was redistributed to farmers last year.

Here’s why the debate over who pays for the tariffs matters. Listen to how Trump justified the new round of bailouts on Thursday:

“It all comes from China,” he said. “We’ll be taking in, over time, hundreds of billions of dollars in tariffs and charges on China, and our farmers will be greatly helped.”

The farm bailout is costless, Trump is arguing, because he’s taking money from China and giving it to American farmers. That argument could only hold water if China wer paying for the tariffs.

To repeat: Americans are paying for the tariffs.

Even if you believe, as some Trump supporters routinely argue, that China will ultimately “pay” for the tariffs in the form of lost American investment and a reduction in long-term growth—which is possible, yes—that does not change the basic fact that the tariff revenue being collected by the federal government today and redistributed to farmers tomorrow is coming out of American wallets.

Again: Americans are paying for the tariffs.

For what it’s worth, Trump is wrong about the numbers too. The federal government has collected about $40 billion in tariff revenue since last year—not hundreds of billions of dollars. That means the $28 billion spent bailing out farmers accounts for about 70 percent of all tariff revenue.

It’s also obvious political favoritism. Sure, farmers have been hit hard by the trade war, but so have plenty of other industries. How long before they start lining up for their own bailouts?

There are plenty of other questions about the farm bailout program, from the technical to the esoteric. The funding will flow through a New Deal–era agriculture insurance program. Taxpayers for Common Sense, a fiscal watchdog, describes the arrangement as “a backdoor revival and expansion” of a discredited farm subsidy program, “but with a few twists that make it more confusing and more costly.”

Or as trade lawyer and Cato Institute scholar Scott Lincicome put it:

Honestly, I can see why this seems repetitive.

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