Tag: finance

Why SocGen Thinks There Is Less Than 1% Chance That 10-Year Yields Will Fall Below 1.1%

SocGen has become the latest in a long and illustrious line of (so far wrong) forecasters, to predict that the 30-year-old bond rally, unleashed by Alan Greenspan’s “great moderation” and having gone through QE, thousands of rate cuts, and NIRP, is finally over.

As Bloomberg notes, Societe Generale SA is the most recent firm to go back to the drawing board, and is using a “different” approach in an attempt to come up with the right formula for why bonds are now massively overvalued. “Its bond team recently tweaked a long-standing macro model to incorporate two decades of bond prices from Europe, Japan and the U.K.”

Based on that new model and statistical norms, there’s less than a 1 percent chance U.S. 10-year yields fall below 1.1% especially as the Federal Reserve moves to raise interest rates.

What SocGen is forgetting is that it was precisely the Fed’s rate hike that sent the long end plunging, and yield curve going horizontal, on fears that the US – and global – economy is not ready for tighter US financial conditions. What it is also forgetting is that reliance on any historical models, and thus precedent, is laughable at a time when ever central bank is unleashing never before tried financial experimentation, and helicopter money may be next.

That said, here is why SocGen is convinced that the 10Y will not hit 1.1%: “We had to revert to a model-based approach to figure out how low yields can go after we broke below 1.4%,” a scenario that the firm didn’t think would happen unless the Fed did an about-face, said Subadra Rajappa, SocGen’s head of U.S. rates strategy. In our view, “it still doesn’t make any sense for the Fed to change its policy stance from tightening to even on-hold or easing.”

Cited by Bloomberg, Bruno Braizinha, the architect of SocGen’s models, says the new one implies a “fair value” for 10-year yields of 1.95 percent. That suggests Treasuries are still extremely overvalued after last week’s selloff. Yields were at 1.59 percent today, up from a record low of 1.318 percent on July 6. Alternatively, what the model may be implying is that global growth has been massively overestimated and misrepresented as political powers across the globe fabricate data to restore confidence among the population. But surely such a proposal would be considered nothing more than “conspiracy theory.”

And then there is the model’s own abysmal performance. As Bloomberg puts it very nicely, without hurting SocGen’s feelings, “the fact that SocGen’s original model implied a fair value of 2.85 percent — a level last seen in early 2014 — reflects just how bewildering the bond market has been.” Put in trader terms anyone who shorted the 10Y when it was at 2.85%, has lost about 15%, and that excludes the cost of carry.

It’s not hard to see why bond shops are looking for new methods: after all they have all been dead wrong. But before you mock SocGen, consider that at the start of 2016, strategists surveyed by Bloomberg projected that yields on 10-year Treasuries would end the year at 2.75%. That has proven to be… wrong. Today, the median forecast is more than a percentage point lower.

This is what SocGen’s model says explicitly:

How rich are Treasuries – a guide for the perplexed

 

Our macro model for treasuries reveals a significant decoupling between Treasury yields and US fundamentals since the start of the year, yielding a fair value for the 10yT of 2.85%.

  • The drivers for this decoupling are well understood: QE, a sustained bid for the back end of the US curve in a search for yield in a global low-yield environment, the recent risk-off environment on Brexit, the perception of the risks that a China hard-landing scenario may pose to the global outlook, and signs of a deterioration of domestic data in H1.
  • The strength of these exogenous factors can be incorporated into our macro model by the inclusion of a global yields variable. The analysis shows a roughly 90bp impact of these exogenous factors on the 10y sector of the US curve, roughly 65% of the gap between our macro model fair value and the market, yielding an adjusted fair value for the 10yT of 1.95%.
  • The maximum historical deviation from the fair value in this adjusted macro model was three standard deviations. This currently would correspond to 1.10% for the 10yT, where we expect significant resistance.

 

It is hardly perplexing to say that treasuries look rich – yields at the back end of the curve are around record lows after all – but quantifying by how much, and relative to what, and in what context is slightly more complicated. For a simple analysis versus fundamentals, we can use our macro model (a PCA framework that includes inflation, growth and employment macroeconomic variables, along with short-end  rates and a vector for QE purchases) or a simpler approach where we regress the 10y on long-term CPI and GDP averages to gauge the level of richness. The macro model (see Graphs 1a-c) shows a significant decoupling between Treasuries and fundamentals since the start of the year, with the current level for the 10yT roughly 3 sigma rich relative to fair value (roughly 2.85% – see Graph 2).

 

 

The regression versus long-term CPI and GDP averages yields a fair value of 2.35% for the 10yT implying that the 10yT yield is currently 1.5 standard deviations rich to fair value (see Graph 3). This is less impressive than the signal from the macro model but still rather significant, with this level of richness not seen since mid-2012 in the context of QE. Macro approaches therefore yield significant rich signals for the Treasury market and confirm the perception of a decoupling between the Treasury yields and macroeconomic fundamentals. It is also important to note that the maximum deviation from the mean in this model was seen in 2008 when yields were two standard deviations rich to fair value. How low can yields go? In today’s market, and in the context of this model, a two standard deviation from fair value would correspond to 1.15% for the 10yT yield, which is where we expect to see significant resistance.

Of course, the core fallacy in this model is the assumption that CPI and GDP are accurate. Which is also why we stopped reading there.

Incidentally, a far more compelling case was made not by some iteration of a SocGen model, but by its global asset allocation strategist , Alain Bokozba, who also tries to make the case that the “bottom of 30Y rates is in view”, however using a far simpler metric: trader positioning.  This is what he says.

Peak in long 30y T-bond positions suggests that the bottom of 30y rates may be in view

 

Currently, 30y Treasuries are yielding a dismal 2.2%. Meanwhile, higher Treasury prices only seem to increase demand for them. Hence, hedge funds remain positioned for even lower 30y yields, and increasingly so. In September 1998 and December 2004, net long positions on 30y Treasuries also peaked (chart below). A subsequent bottom in long-term yields was reached in the two weeks and six months thereafter, during which yields fell some 50bp to 4.7% and 4.2%, respectively. Those levels marked the bottom for 30y rates during the four and 2.7 years thereafter.

 

Ok great, however just one question: how many trillions in 30Y TSYs had central banks bought in 1998 and 2004, and how many trillions more were they expected to buy in the future? And yes, Alain may be right in the short run but, absent the launch of helicopter money, or direct central bank monetization of deficits and welfare which inevitably leads to runaway inflation, we are confident that when rereading this post one year from now, we will all have a hearty chuckle at someone calling a 2.2% yield on the 30Y “dismal”…

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Becoming Japan: “The Threat Of A Global Recession Is Growing”

Via The Economic Cycle Research Institute,

The risk of a global recession is edging up, as the global slowdown we first noted last fall continues (ICO Essentials, September 2015). This danger is heightened because longer-term trend growth is slowing in every Group of Seven (G7) economy, as dictated by simple math: growth in output per hour, i.e., labor productivity – plus growth in the potential labor force – a proxy for hours worked – adding up to real GDP growth.

As we laid out over a year ago (USCO Essentials, June 2015), this simple combination of productivity and demographic trends reveals that U.S. trend GDP growth is converging toward 1%. This is reminiscent of Japan during its “lost decades,” where average annual real GDP growth registered just ¾%,  which is why we have cautioned that the U.S. is “becoming Japan” (USCO Essentials, February 2016)and (ICO, July 2013).

Expanding this analysis to the rest of the G7, we find that every economy is effectively becoming Japan, and the sharpest slowdowns are happening outside North America. Thus, as trend growth falls in the world’s largest advanced economies amid the ongoing global slowdown, the threat of a global recession is growing.

In the face of slowing U.S. trend growth, the Fed had hoped that the U.S. economy would recover to earlier levels of trend growth, provided they could find the right size and mix of quantitative easing and low interest rate policies. We dubbed this effort, a “Grand Experiment,” which has served only to pull demand forward, ultimately depleting future demand and failing to achieve the Fed’s objective. Other G7 central banks have arguably made even greater attempts at ginning up growth, but with even less to show for it.

To make our simple math analysis consistent internationally, we used comparable annual data for productivity, labor force, and potential labor force for each G7 country. Then, we examined the data for the half-century preceding the Global Financial Crisis (GFC). Separately, we examined labor productivity growth in the 2010-15 period and potential labor force growth in the 2015-20 period to estimate trend growth in the latter period. As productivity is notoriously difficult to predict, and there is no compelling reason to expect it to change significantly in the near term, we used the last five years’ average productivity growth as the best available estimate for the next few years. The results for the U.S. were quite consistent with our original findings.

Outside of North America, trend growth will likely be even worse. Indeed, the German outlook is substantially weaker than that of the major developed English-speaking economies. While average productivity growth was relatively high at 0.8% from 2010-15, as shown in the chart (upper panel, red line), with negative 0.4% annualized potential labor force growth for 2015-20 (lower panel, red line), trend GDP growth is expected to be only 0.4% over the second half of this decade. To what extent Brexit will change the growth trajectory remains to be seen, but it is unlikely to help.

In Germany productivity growth averaged nearly 4% a year in the 1957-2007 period – being a bit higher in the 1960s and a little lower in the 1990s –(upper panel, gold line), while labor force growth was reasonably steady around 0.3% (lower panel, gold line). Thus, the growth rates of both productivity and the labor force have downshifted substantially in Germany in recent years – a major problem, since Germany is the Eurozone’s growth locomotive.

Still, no G7 economy has as dire an outlook as Japan, where trend GDP growth is converging to zero over the next five years. Indeed, with the potential labor force set to average -0.4% annual growth and productivity growth having averaged 0.4% for 2010-15 (not shown), they effectively offset each other, netting zero trend GDP growth. Unlike the rest of the G7, Japan has annualized growth stair-stepping down for both productivity and the labor force.

All of this highlights the degree to which the G7 economies are “becoming Japan.” In the 1957-2007 period, all of the economies except Japan were in the three-to–four-percent trend growth range. But, in the 2015-20 period, while Japan is on a zero-percent trend growth trajectory, Germany is on track for just 0.4% trend GDP growth. As productivity and labor force growth slow, all of the G7 economies are converging to lower levels of trend growth, with Japan leading the race to zero.

Of course, this lower trend growth problem is a hallmark of our “yo-yo years” thesis (ICO, March 2012), which posits that lower trend growth and higher cycle volatility lead to more frequent recessions. This is because, when trend growth is close to zero, it is relatively easy during growth rate cycle (GRC) downturns for actual growth to fall below zero for a sustained period, triggering a business cycle recession.

Another result of lower trend growth has been competitive devaluation (ICO Essentials, March 2015). As domestic demand fails to deliver sufficient growth, countries attempt to stoke growth through exports by devaluing their currency. However, as export volume growth hovers around zero for advanced economies and export price growth is negative, these countries are fighting over a shrinking trade pie (ICO Essentials, April 2016).

At the moment, all of the G7 economies are either in, or on the cusp of, GRC downturns, and therefore recession remains on the table, to some extent, in all cases. Given the ongoing global slowdown, this means that a global recession, while not at hand, is a distinct possibility in the relative near term. This is precisely the situation where the global economy can ill-afford major negative shocks, especially if some of these G7 economies enter windows of cyclical vulnerability defined by pronounced, pervasive and persistent downturns in the levels of their respective long leading indexes. With central banks around the world essentially out of ammunition and unable to reach any consensus on how to get growth back on track, a global recession would be particularly problematic.

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Caught On Tape: Protesters Clash With Police Outside Republican Convention

While today’s RNC demonstrations have been mostly peaceful, a small group of protesters clashed briefly with police outside the Republican convention in Cleveland Wednesday afternoon after the demonstrators attempted to burn an American flag.

Police in riot gear and on horseback moved in quickly to quell the disturbance, and several protesters struggled with police before being put in handcuffs. Approximately eight people were taken into custody and loaded into two Cleveland police vans.

Two officers were assaulted and suffered minor injuries, the Cleveland police department said on their verified Twitter account. The police department also posted a photo of shreds of a singed American flag it said protesters attempted to destroy.

The protest began outside one of the main gates to the secure zone around the convention, where vice presidential nominee Mike Pence is scheduled to speak later Wednesday.

It was unclear immediately who the protesters were, but some shouted, “Revolution Club.” Others wore T-shirts that said, “Revolution — Nothing Less!”

Within 30 minutes, the protest had largely dissipated and the gates were reopened to the convention’s secure area. 

Police ordered bystanders, including the sizable number of reporters and TV cameras, to disperse, threatening to arrest anybody who ignored the order.

Before the convention began, there were significant security concerns, particularly in the wake of recent police shootings. But the city has been largely peaceful, with minimal arrests related to protests.

Security has been extremely tight, with extra police officers coming from as far away as California and Florida.

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USDJPY Surges In Delayed Reaction To News That Japan Is Considering An Expanded JPY20 Trillion Stimulus Plan

In what we can only attribute to a delayed reaction to a news story that hit earlier in Japan’s Kyodo, according to which Japan was now considering a JPY20 trillion stimulus package, double what had been previously speculated, moments ago the USDJPY surged on now concurrent news, spiking by 0.5% and hitting the highest level since June 7.

For those who missed the Kyodo report, it said that Japan’s newly mulled JPY20 TRN package will be more than than an initial plan for just over 10 trillion yen to counter possible effects of the U.K.’s decision to leave the European Union.

  • New plan will include projects for FY2017 and beyond; increase low-interest “zaito” loans by 6t yen
  • Size may be increased further
  • Govt to seek cabinet approval of plan in early August
  • Package partly funded by extra budget for FY2016
  • 8.3t yen for infrastructure, including 3t yen for Osaka maglev train extension
  • Govt plans to lend dollar funds to cos. to counter Brexit impact
  • Govt to provide 3t yen from FX reserves to JBIC for lending to Japanese cos.
  • 3.4t yen to be allocated for cos. building infrastructure overseas
  • Funds also going toward improving disaster resilience of buildings and supporting farm exports

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Why Citi Thinks “The Pokemon GO Threat Is Real”

One week ago, when we first reported that as Pokemon Go was taking the world by storm and was already soaking up more use time than all other time-wasting social app, with users wasting over 40 minutes daily with the app, we asked “will all those minutes eat away from Facebook use (clearly a negative for FB stock), or will US worker productivity, already abysmally low, decline even further as far less time and effort is dedicated to productive efforts. The answer: probably a mixture of both, although we eagerly await to see what “seasonally adjusted” excuses tenured economists come up to justify away that US GDP output continues to decline even more in the coming months and years, and nobody can figure out the reasons why.”

We also mused about the impact on ad revenue this “black swan” game would have for the more established platforms such as Facebook, Twitter, YouTube and so on.

Overnight, Citi’s Mark May picked up on this reasoning and released a note titled “The Pokémon GO Threat Is Real”, which confirmed that should the Pokemon juggernaut continue, then ad spending for traditional plaforms over the coming months may be jeopardized.

This is what Citi said:

The Pokemon GO Threat Is Real

Intro – Pokemon GO is taking the global app world by storm, and as of today remains the top ranked app by daily downloads in every major market in which it has been launched. This momentum coupled with the app’s strong user metrics, poses a serious risk to time spent in other apps, and in some cases, may even impact 3Q16 and 2016 revenue forecasts. That’s why in this week’s Internet Chart of the Week, we review average daily usage on Facebook, YouTube, Instagram, Google and Twitter before and after the Pokémon GO launch to gauge which companies will likely be the most impacted by the new app’s global success.

The Charts — According to Sensor Tower, the avg. U.S. iOS user is spending over 33 minutes playing Pokémon GO (PG) each day (data for 07/11/16). This places PG ahead of apps such as Facebook, Snapchat, Twitter, and Instagram for avg. time spent by a user per day (Fig. 2). Although we believe that PG is adding some incremental time to total smartphone time, we think it would be wrong to assume that the app’s success is not coming at the expense of other players. In order to gauge the potential impact to our coverage, we reviewed avg. daily usage for U.S. iOS users the week prior to the U.S. launch vs. the first full week after the launch (*Fig. 1 notes). As shown in Fig. 1, YouTube and TWTR are seeing the largest decreases in avg. time spent per day, while FB is the only app showing resiliency in the week post-launch. Although we cannot definitively confirm that PG is causing these trends, we think the game’s success is likely a significant contributor.

Other Factors to Consider — For those ready to thematically sell GOOGL on this data, we urge you to consider the various other (positive) impacts that PG could have on Alphabet. As we recently noted (here and here), the App economy is performing better than anticipated, driven primarily by robustness in the games category, and PG’s continued success should serve as an additional benefit to Google’s Play Store business. As shown in Fig. 4, we conservatively estimate that Google Play will see $77mn from PG over the next 12 months. In addition, Alphabet also stands to benefit from its ownership stake in Niantic, the creator of PG, which we estimate may now be worth ~$200mn (GOOGL’s stake). Last but not least, both FB and GOOGL will likely see advertising dollars flow their way as both platforms offer unique global reach and highly targeted data to fuel PG’s global expansion.

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S&P Sees A “Crisis Of Confidence Around The Globe” As Corporate Debt Hit $75 Trillion In 2020

In an analysis that may rival that infamous “McKinsey report” from early 2015 which found that not only had there been no deleveraging since the financial crisis but that total global debt has risen to an unprecedented $199 trilion as of 2014, or up by $52 trillion in 7 years, earlier today S&P Global Raters issued a new report in which it forecasts that global corporate debt is set to rise by 50% over the next four years, rising from $51.4 trillion currently to $75 trillion by 2020 as a result of easy central bank monetary policy and low interest rates.

Not surprisingly, the world’s biggest credit creator, China, is expected to account for the bulk of the credit growth, with the nation projected to add $28 trillion or 45% of the $62 trillion in expected global demand increase (the other $13 trillion of the $75 trillion total are refinancings). The U.S. is estimated to add $14 trillion, or 22%, in new debt, with Europe adding $9 trillion, or 15 percent.

In the latest attack on unorthodox monetary policy yet, S&P notes that central banks may be trying to reinflate their economies, but they’re doing so to the detriment of credit quality. “Central banks remain in thrall to the idea that credit-fueled growth is healthy for the global economy. In fact, our research highlights that monetary policy easing has thus far contributed to increased financial risk, with the growth of corporate borrowing far outpacing that of the global economy.”

Continuing their assault on central banks, authors David Tesher, Paul Watters and Terry Chan say that “nearly half of corporate debt issuers are estimated to be highly leveraged, strongly suggesting that a correction in global credit markets is unavoidable. In fact, analysts believe that the credit correction began in late 2015 and will likely stretch through the next few years as defaults spike.”

This is best visualized in a recent report from Morgan Stanley which indeed shows that if history is precedent, the current default cycle will continue for a long time.

 

 

Here, once again, S&P explains how global central banks are now trapped: they no longer wish to push rates lower on one hand, but on the other any sharp spike in rates would wreak havoc on global credit markets, and the financial system in general.  As a result, S&P considers a correction in the credit markets to be “inevitable.” The only question, as MarketWatch notes, is degree of that unwinding. An unexpected sharp economic slowdown and an aggressive reversal of ultra-low interest rates pose big risks to what otherwise could be an orderly drawdown of the global pile of IOUs.

The problem is that the default cycle has already started, and any sharp changes to interest rates will only accelerate it. As we pointed out  last week, there has already been a sharp uptick in corporate defaults. Global corporate bankruptcies reached a milestone 100 so far in 2016 in July. That puts the current tally, led mostly by U.S. energy companies, up more than 50% from the same time last year. In fact, the last time the global count was higher at this point in the year was in 2009, during the financial crisis, when it reached 177. At this pace, 2016 is set to see a new all time high number in corporate defaults.

At this point the authors coin a new term, “crexit”  or “heightened sensitivity to unexpected developments similar to the U.K.’s referendum to leave the European Union could lead to a crisis of confidence and rapid departure of both lenders and lower-quality borrowers from the debt markets.” Call it a sudden “exit” of the entire credit market as buyers, unsure of what comes next, stage a buyers strike and leave trillion in rolling over debt without a chance of getting refinanced.

The paper also touches on the poor use of proceeds from these trillions in debt, which instead of going toward new growth, has been largely used – especially in the US – to prop up markets and repurchase stock. And while so far, easier corporate credit has served its purpose, helping nurse along a slow recovery, mostly by way pushing the stock market to record highs amid a flurry of share buybacks and a Chinese credit-funded malivestment deluge, this will all end badly according to S&P.

“Indeed, the credit build-up has generated two key tail risks for global credit. Debt has piled up in China’s opaque and ever-expanding corporate sector and in U.S. leveraged finance. We expect the tail risks in these twin debt booms to persist.”

The conclusion is about as dire as anything one could read on a tinfoil fringe blog:

“A worst-case scenario would be a series of major negative surprises sparking a crisis of confidence around the globe. These unforeseen events could quickly destabilize the market, pushing investors and lenders to exit riskier positions (a ’crexit’ scenario). If mishandled, this could result in credit growth collapsing as it did during the global financial crisis.”

For now, however, the music is still playing so the dance must go on.

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“My Own People Hate Me!” – Black Brooklyn Cop Slams “False Narrative Of Black Lives Matter”

Authored by Brooklyn, NY police officer Jay Stalien (via Facebook),

I have come to realize something that is still hard for me to understand to this day. The following may be a shock to some coming from an African American, but the mere fact that it may be shocking to some is prima facie evidence of the sad state of affairs that we are in as Humans.

I used to be so torn inside growing up. Here I am, a young African-American born and raised in Brooklyn, NY wanting to be a cop. I watched and lived through the crime that took place in the hood. My own black people killing others over nothing. Crack heads and heroin addicts lined the lobby of my building as I shuffled around them to make my way to our 1 bedroom apartment with 6 of us living inside. I used to be woken up in the middle of the night by the sound of gun fire, only to look outside and see that it was 2 African Americans shooting at each other.

It never sat right with me. I wanted to help my community and stop watching the blood of African Americans spilled on the street at the hands of a fellow black man. I became a cop because black lives in my community, along with ALL lives, mattered to me, and wanted to help stop the bloodshed.

As time went by in my law enforcement career, I quickly began to realize something. I remember the countless times I stood 2 inches from a young black man, around my age, laying on his back, gasping for air as blood filled his lungs. I remember them bleeding profusely with the unforgettable smell of deoxygenated dark red blood in the air, as it leaked from the bullet holes in his body on to the hot sidewalk on a summer day. I remember the countless family members who attacked me, spit on me, cursed me out, as I put up crime scene tape to cordon off the crime scene, yelling and screaming out of pain and anger at the sight of their loved ones taking their last breath. I never took it personally, I knew they were hurting. I remember the countless times I had to order new uniforms, because the ones I had on, were bloody from the blood of another black victim…of black on black crime. I remember the countless times I got back in my patrol car, distraught after having watched another black male die in front me, having to start my preliminary report something like this:

Suspect- Black/ Male, Victim-Black /Male.

I remember the countless times I canvassed the area afterwards, and asked everyone “did you see who did it”, and the popular response from the very same family members was always, “Fuck the Police, I ain't no snitch, Im gonna take care of this myself". This happened every single time, every single homicide, black on black, and then my realization became clearer.

I woke up every morning, put my freshly pressed uniform on, shined my badge, functioned checked my weapon, kissed my wife and kid, and waited for my wife to say the same thing she always does before I leave, “Make sure you come back home to us”. I always replied, “I will”, but the truth was I was never sure if I would. I almost lost my life on this job, and every call, every stop, every moment that I had this uniform on, was another possibility for me to almost lose my life again. I was a target in the very community I swore to protect, the very community I wanted to help. As a matter of fact, they hated my very presence. They called me “Uncle Tom”, and “wanna be white boy”, and I couldn’t understand why. My own fellow black men and women attacking me, wishing for my death, wishing for the death of my family. I was so confused, so torn, I couldn’t understand why my own black people would turn against me, when every time they called …I was there. Every time someone died….I was there. Every time they were going through one of the worst moments in their lives…I was there. So why was I the enemy? I dove deep into that question…Why was I the enemy? Then my realization became clearer.

I spoke to members of the community and listened to some of the complaints as to why they hated cops. I then did research on the facts. I also presented facts to these members of the community, and listened to their complaints in response. This is what I learned:

Complaint: Police always targeting us, they always messing with the black man.

 

Fact: A city where the majority of citizens are black (Baltimore for example) …will ALWAYS have a higher rate of black people getting arrested, it will ALWAYS have a higher rate of blacks getting stopped, and will ALWAYS have a higher rate of blacks getting killed, and the reason why is because a city with those characteristics will ALWAYS have a higher rate of blacks committing crime. The statistics will follow the same trend for Asians if you go to China, for Hispanics if you go to Puerto Rico, for whites if you go to Russia, and the list goes on. It’s called Demographics

 

Complaint: More black people get arrested than white boys.

 

Fact: Black People commit a grossly disproportionate amount of crime. Data from the FBI shows that Nationwide, Blacks committed 5,173 homicides in 2014, whites committed 4,367. Chicago’s death toll is almost equal to that of both wars in Iraq and Afghanistan, combined. Chicago’s death toll from 2001–November, 26 2015 stands at 7,401. The combined total deaths during Operation Iraqi Freedom (2003-2015: 4,815) and Operation Enduring Freedom/Afghanistan (2001-2015: 3,506), total 8,321.

 

Complaint: Blacks are the only ones getting killed by police, or they are killed more.

 

Fact: As of July 2016, the breakdown of the number of US Citizens killed by Police this year is, 238 White people killed, 123 Black people killed, 79 Hispanics, 69 other/or unknown race.

 

Complaint: Well we already doing a good job of killing ourselves, we don’t need the Police to do it. Besides they should know better.

 

Fact: Black people kill more other blacks than Police do, and there are only protest and outrage when a cop kills a black man. University of Toledo criminologist Dr. Richard R. Johnson examined the latest crime data from the FBI’s Supplementary Homicide Reports and Centers for Disease Control and found that an average of 4,472 black men were killed by other black men annually between Jan. 1, 2009, and Dec. 31, 2012. Professor Johnson’s research further concluded that 112 black men died from both justified and unjustified police-involved killings annually during this same period.

The more I listened, the more I realized. The more I researched, the more I realized. I would ask questions, and would only get emotional responses & inferences based on no facts at all. The more killing I saw, the more tragedy, the more savagery, the more violence, the more loss of life of a black man at the hands of another black man….the more I realized.

I haven’t slept well in the past few nights. Heartbreak weighs me down, rage flows through my veins, and tears fills my eyes. I watched my fellow officers assassinated on live television, and the images of them laying on the ground are seared into my brain forever. I couldn’t help but wonder if it had been me, a black man, a black cop, on TV, assassinated, laying on the ground dead… would my friends and family still think black lives mattered? Would my life have mattered? Would they make t-shirts in remembrance of me? Would they go on tv and protest violence? Would they even make a Facebook post, or share a post in reference to my death?

All of my realizations came to this conclusion.

Black Lives do not matter to most black people. Only the lives that make the national news matter to them. Only the lives that are taken at the hands of cops or white people, matter. The other thousands of lives lost, the other black souls that I along with every cop, have seen taken at the hands of other blacks, do not matter. Their deaths are unnoticed, accepted as the “norm”, and swept underneath the rug by the very people who claim and post “black lives matter”.

 

I realized that this country is full of ignorance, where an educated individual will watch the ratings-driven news media, and watch a couple YouTube video clips, and then come to the conclusion that they have all the knowledge they need to have in order to know what it feels like to have a bullet proof vest as part of your office equipment, “Stay Alive” as part of your daily to do list, and having insurance for your health insurance because of the high rate of death in your profession. They watch a couple videos and then they magically know in 2 minutes 35 seconds, how you are supposed to handle a violent encounter, which took you 6 months of Academy training, 2 – 3 months of field training, and countless years of blood, sweat, tears and broken bones experiencing violent encounters and fine tuning your execution of the Use of Force Continuum.

 

I realized that there are even cops, COPS, duly sworn law enforcement officers, who are supposed to be decent investigators, who will publicly go on the media and call other white cops racist and KKK, based on a video clip that they watched thousands of miles away, which was filmed after the fact, based on a case where the details aren’t even known yet and the investigation hasn’t even begun.

 

I realized that most in the African American community refuse to look at solving the bigger problem that I see and deal with every day, which is black on black crime taking hundreds of innocent black lives each year, and instead focus on the 9 questionable deaths of black men, where some were in the act of committing crimes.

 

I realized that they value the life of a Sex Offender and Convicted Felon, [who was in the act of committing multiple felonies: felon in possession of a firearm-FELONY, brandishing and threatening a homeless man with a gun-Aggravated Assault in Florida: FELONY, who resisted officers who first tried to taze him, and WAS NOT RESTRAINED, who can be clearly seen in one of the videos raising his right shoulder, then shooting it down towards the right side of his body exactly where the firearm was located and recovered] more than the lives of the innocent cops who were assassinated in Dallas protecting the very people that hated them the most.

 

I realized that they refuse to believe that most cops acknowledge that there are Bad cops who should have never been given a badge & gun, who are chicken shit and will shoot a cockroach if it crawls at them too fast, who never worked in the hood and may be intimidated. That most cops dread the thought of having to shoot someone, and never see the turmoil and mental anguish that a cop goes through after having to kill someone to save his own life. Instead they believe that we are all blood thirsty killers, because the media says so, even though the numbers prove otherwise.

 

I realize that they truly feel as if the death of cops will help people realize the false narrative that Black Lives Matter, when all it will do is take their movement two steps backwards and label them domestic terrorist.

 

I realized that some of these people, who say Black Lives Matter, are full of hate and racism. Hate for cops, because of the false narrative that more black people are targeted and killed. Racism against white people, for a tragedy that began 100’s of years ago, when most of the white people today weren’t even born yet.

 

I realized that some in the African American community’s idea of “Justice” is the prosecution of ANY and EVERY cop or white man that kills or is believed to have killed a black man, no matter what the circumstances are.

 

I realized the African American community refuses to look within to solve its major issues, and instead makes excuses and looks outside for solutions. I realized that a lot of people in the African American community lead with hate, instead of love. Division instead of Unity. Turmoil and rioting, instead of Peace.

 

I realized that they have become the very entity that they claim they are fighting against.

And ultimately, I realized that the very reasons I became a cop, are the very reasons my own people hate me, and now in this toxic hateful racially charged political climate, I am now more likely to die… and it is still hard for me to understand… to this day.

via http://ift.tt/29Wh1aE Tyler Durden

Erdogan Declares Three Month “State Of Emergency”, Warns S&P “Don’t Mess With Turkey”

Having warned earlier of the possibility, Turkish President Erdogan moments ago during a live broadcast address, announced a 3-month “state of emergency” across his nation to “effectively tackle the Gulen movement,” as Erdogan stated that there might be more plans to continue coup attempts. The decision has immediately raised fears of more arbitrary arrests, killings and disappearances.

Erdogan added that “citizens should have no concerns for democracy,” and warned ratings egency S&P “not to mess with Turkey” and comforted his citizens that a “state of emergency does not mean military rule” and that the decision was not against the constitution.

But most amusingly, Erdogan promptly warned S&P, which earlier today downgraded Turkey to BB, “not to mess with Turkey” and that the decision to downgrade the country was political; he did that as he warned Europe to mind its own business.

  • ERDOGAN: STATE OF EMERGENCY DOESN’T MEAN MILITARY RULE
  • TURKEY’S ERDOGAN: CITIZENS SHOULD HAVE NO CONCERN ON DEMOCRACY
  • TURKEY’S ERDOGAN SAYS WILL WORK AS PRESIDENT AND COMMANDER IN CHIEF WITH ARMED FORCES TO CLEANSE “VIRUS” FROM MILITARY
  • TURKEY’S ERDOGAN: STATE OF EMERGENCY AIMS TO PROTECT VALUES
  • TURKEY’S ERDOGAN SAYS S&P `SHOULD NOT MESS WITH TURKEY’
  • TURKEY’S ERDOGAN: WHAT’S S&P GOT TO DO WITH TURKEY?
  • TURKEY’S ERDOGAN: WE HAD CUT OUR TIES W/ S&P BEFORE
  • TURKEY’S ERDOGAN: S&P DECISION IS POLITICAL
  • ERDOGAN SAYS TURKEY WILL CONTINUE ITS INVESTMENTS  
  • ERDOGAN SAYS THERE WON’T BE ANY LIQUIDITY SHORTAGE IN MARKET
  • ERDOGAN SAYS TURKEY WON’T STEP BACK FROM FISCAL DISCIPLINE
  • ERDOGAN: TURKEY MILITARY TO BE UNDER COMMAND OF GOVERNORS
  • ERDOGAN: TURKISH MILITARY IS AT THE SERVICE OF ITS GOVERNMENT
  • ERDOGAN: AS COMMANDER-IN-CHIEF WE’LL WIPE OUT VIRUSES IN ARMY
  • ERDOGAN: PROCESS TO WIPE OUT VIRUSES IN INSTITUTIONS TO GO ON

And The Lira has crashed to 3.10 – a record low against the USD…

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Intel Reports Worst GAAP Earnings Since 2009; “Beats” Expectations Thanks To $1.4 Billion In Addbacks

While it is unclear why Intel stock is down after hours after reporting Q2 2016 earnings, which we can mostly attribute to the small miss in revenue, which came in at $13.5 billion, below the $13.55 billion expected, coupled with a data center group which grew only 5%, below the 15% growth forecasted (on platform volumes rising 5% and platform average selling prices down 1%,) , despite the company beating on the bottom line and on profit margin, it is quite clear that just like Microsoft, Intel engaged in yet another egregious non-GAAP fudging exercise when it reported non-GAAP EPS of only $0.27, which however promptly rose to $0.59, beating expectations of $0.54, only thanks to $1.4 billion in restructuring charge addbacks.

For those who care about such things as actual earnings, this was thje lowest GAAP earnings per share INTC reported going back all the way to Q2 2009.

 

This is what else Intel added: “Net income for the second quarter was $1.3B, down 51% on a year-on-year basis. Earnings per share was $0.27, down 28 cents on a year-on-year basis. During the quarter, we purchased $2.3B in capital assets, paid $1.2B in dividends, and repurchased $0.8B of stock.”

Odd how the restructuring charges almost prcisely offset the net income drop.

And since the company announced last quarter that it is laying off 12,000, in an abysmal Q1 earnings report…

There was $1.4B in restructuring charges for the quarter as a result of our restructuring program announced in April.

… all is forgiven, and INTC can now add-back however many restructuring costs it wants for the foreseeable future.

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Anti-Trump Protester Pepper-Sprayed, Arrested After Burning US Flag In Cleveland

Police and fire officials moved rapidly in Cleveland as an Anti-Trump protester – reportedly a Communist party supporter – set fire to the US flag.

There are few details as yet though it seems law enforcement had some knowledge it may occur…

 

 

This is on the streets of Cleveland… not fucking Tehran!!

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