A former Google insider claiming the company created algorithms to hide its political bias within artificial intelligence platforms – in effect targeting particular words, phrases and contexts to promote, alter, reference or manipulate perceptions of Internet content – delivered roughly 950 pages of documents to the Department of Justice’s Antitrust division Friday.
The former Google insider, who has already spoken in to the nonprofit organization Project Veritas, met with SaraACarter.com on several occasions last week. He was interviewed in silhouette, to conceal his identity, in group’s latest film, which they say exposes bias inside the social media platform.
Several weeks prior, the insider mailed a laptop to the DOJ containing the same information delivered on Friday, they said. The former insider is choosing to remain anonymous until Project Verita’s James O’Keefe reveals his identity tomorrow (Wednesday).
He told this reporter on his recent trip to Washington D.C. that the documents he turned over to the Justice Department will provide proof that Google has been manipulating the algorithms and the evidence of how it was done, the insider said.
Google CEO Sundar Pichai told the House Judiciary Committee in December, 2018, that the search engine was not biased against conservatives. Pichai explained what algorithm’s are said Google’s algorithm was not offensive to conservatives because its artificial intelligence does not operate in that manner. He told lawmakers, “things like relevance, freshness, popularity, how other people are using it” are what drives the search results. Pichai said even if his programmers were anti-Republican, the process is so intricate that the artificial intelligence could not be manipulated and it was to complicated to train the algorithm to fit their bias.
Google did not immediately respond for comment on the insider’s claims, however, this story will be updated if comment is provided.
The insider says Google is aware most people are unaware or not knowledgeable about these advanced IT systems and therefore unable to determine who is telling the truth.
“I honestly think that a free market can fix this issue,” he told this reporter at a meeting in Washington D.C.
“The issue is that the free market has been distorted and what’s happened is that the distortion is so grotesque and the engineering is so repulsive, all we need to do is just expose what’s going on. People can hear that it is bad but that can be bias. But when they see what Google has actually written with the documents, this will actually be taught in universities of what totalitarian states can do with this type of capability.”
“It will be so revolting that it doesn’t matter what the solution is, a solution will just form as a reaction to this manipulation they have done,” the Google insider said.
He said he’s asked himself many times if he’s overreacting “and every time I simply look back at the documents and realize that I am not.”
“It’s that bad,” he said. “Disclosing Google’s own words to the American public is something I am, must do, if I am to consider myself a good person. The world that google is building is not a place I, or you or our children want to live in.”
⚡️TOMORROW: Our ML Fairness Google insider comes out of the shadows.
AND: OVER A THOUSAND of pages of internal documents are released.
Another Google insider, who has come forward already, told O’Keefe and other media outlets recently that it is the programers at Google who use the algorithms to manipulate the information to advance its leftist agenda.
Greg Coppola, a software engineer, told Project Veritas that he doesn’t “have a smoking gun.”
However, “I’ve just been coding since I was ten, I have a Ph.D., I have five years of experience at Google, and I just know how algorithms are. They don’t write themselves. We write them to make them do what we want them to do.”
“I look at Search and I look at Google News, and I see what it’s doing,” he said.
“I see Google executives go to Congress and say … that it’s not political, and I’m just so sure that that’s not true.”
Department of Justice officials declined to comment on the document dump.
But SaraACarter.com has reviewed the documents and obtained proof from the Google insider that the documents were delivered to the DOJ.
The unnamed Google insider first spoke to O’Keefe’s Project Veritas. O’Keefe has been criticized by the left for outing the political bias of executives and employees of Google and other social media companies.
In the nonprofits most recent video, Project Veritas uses their undercover techniques to get Google employees to talk openly about their disdain for Trump and how their artificial intelligence operates.
Jenn Gennai, who heads Google’s Responsible Innovation Team, did not know she was being filmed by O’Keefe’s group. She told the undercover journalist that “the reason we launched our AI principals is because we’re not putting our line in the sand. They were not saying what’s fair and what’s equitable so we’re like, well we’re a big company, we’re going to say it.”
via ZeroHedge News https://ift.tt/31FkYsq Tyler Durden
LinkSpace, China’s first private rocket company, successfully launched its independently developed reusable rocket on Saturday morning in Northwest China’s Qinghai Province, according to the Global Times.
The rocket is 8.1 meters long and flew to a designated height of 300 meters before safely landing with an accuracy of 7 centimeters in 50 second. Wan Mei, vice president of LinkSpace, said:
“This is a new milestone in China’s reusable rocket research.”
The company said that the rocket can be used multiple times and has a low test cost and capability of rapid iteration. The launch also “successfully tested several other key technologies for reusable rockets, including new ignition and launching technology, and technology of parallel connection of multiple engines.”
On the same day, the company announced a new project for a 14 meter long rocket that can be launched more than 100 times per year after the technology is perfected.
LinkSpace launched its first rocket in October 2018, which carried a small satellite for a state media group. Since 2014, the Chinese government has actively encouraged private businesses to tackle the space industry. There are now more than 60 private companies in the space industry in China.
Video of the rocket landing can be seen here:
China’s private rocket company LinkSpace successfully launched a reusable rocket from Northwest China’s Qinghai Province on Saturday morning. The RLV-T5 rocket flew to a designated height of 300 meters and then safely landed with a landing accuracy of 7 centimeters in 50 seconds. pic.twitter.com/q0XtQS82HF
As if it weren’t enough of a downer for Russiagate true-believers that no Trump-Russia collusion was found, federal judges are now demanding proof that Russia hacked into the DNC in the first place.
It is shaping up to be a significant challenge to the main premise of the shaky syllogism that ends with “Russia did it.”
If you’re new to this website, grab onto something, as the following may come as something of a shock. Not only has there never been any credible evidence to support the claim of Russian cyber interference, there has always been a simple alternative explanation that involves no “hacking” at all — by Russia or anyone else.
As most Consortium News habitués are aware, Veteran Intelligence Professionals for Sanity (which includes two former NSA technical directors), working with independent forensic investigators, concluded two years ago that what “everyone knows to be Russian hacking of the Democratic National Committee” actually involved an insider with physical access to DNC computers copying the emails onto an external storage device — such as a thumb drive. In other words, it was a leak, not a hack.
VIPS based its conclusion on the principles of physics applied to metadata and other empirical information susceptible of forensic analysis.
But if a leak, not a hack, who was the DNC insider-leaker? In the absence of hard evidence, VIPS refuses “best-guess”-type “assessments” — the kind favored by the “handpicked analysts” who drafted the evidence-impoverished, so-called Intelligence Community Assessment of Jan. 6, 2017.
Dulles: Wielded “conspiracy theorist” as a weapon.
Conspiracy Theorists
Simply letting the name “Seth Rich” pass your lips can condemn you to the leper colony built by the Washington Establishment for “conspiracy theorists,” (the term regularly applied to someone determined to seek tangible evidence, and who is open to alternatives to “Russia-did-it.”)
Rich was a young DNC employee who was murdered on a street in Washington, DC, on July 10, 2016. Many, including me, suspect that Rich played some role in the leaking of DNC emails toWikiLeaks. There is considerable circumstantial evidence that this may have been the case. Those who voice such suspicions, however, are, ipso facto, branded “conspiracy theorists.”
That epithet has a sordid history in the annals of U.S. intelligence. Legendary CIA Director Allen Dulles used the “brand-them-conspiracy-theorists” ploy following the assassination of President John F. Kennedy when many objected — understandably — to letting him pretty much run the Warren Commission, even though the CIA was suspected of having played a role in the murder. The “conspiracy theorist” tactic worked like a charm then, and now. Well, up until just now.
Rich Hovers Above the Courts
U.S. Courts apply far tougher standards to evidence than do the intelligence community and the pundits who loll around lazily, feeding from the intelligence PR trough. This (hardly surprising) reality was underscored when a Dallas financial adviser named Ed Butowsky sued National Public Radio and others for defaming him about the role he played in controversial stories relating to Rich.On August 7, NPR suffered a setback, when U.S. District Court Judge Amos Mazzant affirmed a lower court decision to allow Butowsky’s defamation lawsuit to proceed.
Judge Mazzant ruled that NPR had stated as “verifiable statements of fact” information that could not beverified, and that the plaintiff had been, in effect, accused of being engaged in wrongdoing without persuasive sourcing language.
Isikoff: Russians started it. (Wikipedia)
Imagine! — “persuasive sourcing” required to separate fact from opinion and axes to grind! An interesting precedent to apply to the ins and outs of Russiagate. In the courts, at least, this is now beginning to happen. And NPR and others in similarly vulnerable positions are scurrying around for allies.??The day after Judge Mazzant’s decision, NPR enlisted help from discredited Yahoo! News pundit Michael Isikoff (author, with David Corn, of the fiction-posing-as-fact novel Russian Roulette). NPR gave Isikoff 37 minutes on its popular Fresh Air program to spin his yarn about how the Seth Rich story got started. You guessed it; the Russians started it. No, we are not making this up.
It is far from clear that Isikoff can be much help to NPR in the libel case against it. Isikoff’s own writings on Russiagate are notably lacking in “verifiable statements of fact” — information that cannot be verified. Watch, for example, his recent interview with Consortium News Editor Joe Lauria on CN Live!
Isikoff admitted to Lauria that he never saw the classified Russian intelligence document reportedly indicating that three days after Rich’s murder the Russian SVR foreign intelligence service planted a story about Rich having been the leaker and was killed for it. This Russian intelligence “bulletin,” as Isikoff called it, was supposedly placed on a bizarre website that Isikoff admitted was an unlikely place for Russia to spread disinformation. He acknowledged that he only took the word of the former prosecutor in the Rich case about the existence of this classified Russian document.
In any case, The Washington Post, had already debunked Isikoff’s claim (which later in his article he switched to being only “purported”) by pointing out that Americans had already tweeted the theory of Rich’s murder days before the alleged Russian intervention.
‘Persuasive Sourcing’ & Discovery??
Butowsky’s libel lawsuit can now proceed to discovery, which will include demands for documents and depositions that are likely to shed light on whatever role Rich may have played in leaking to WikiLeaks. If the government obstructs or tries to slow-roll the case, we shall have to wait and see, for example, if the court will acquiesce to the familiar government objection that information regarding Rich’s murder must be withheld as a state secret? Hmmm. What would that tell us?
Butowsky: Suit could reveal critical information. (Flickr)
During discovery in a separate court case, the government was unable to produce a final forensic report on the “hacking” of the Democratic National Committee. The DNC-hired cyber firm, CrowdStrike, failed to complete such a report, and that was apparently okay with then FBI Director James Comey, who did not require one.
The incomplete, redacted, draft, second-hand “forensics” that Comey settled for from CrowdStrike does not qualify as credible evidence — much less “persuasive sourcing” to support the claim that the Russians “hacked” into the DNC. Moreover, CrowdStrike has a dubious reputation for professionalism and a well known anti-Russia bias.
The thorny question of “persuasive sourcing,” came up even more starkly on July 1, when federal Judge Dabney Friedrich ordered Robert Mueller to stop pretending he had proof that the Russian government was behind the Internet Research Agency’s supposed attempt to interfere via social media in the 2016 election. Middle school-level arithmetic can prove the case that the IRA’s use of social media to support Trump is ludicrous on its face.
Russia-gate Rubble
As journalist Patrick Lawrence put it recently: “Three years after the narrative we call Russiagate was framed and incessantly promoted, it crumbles into rubble as we speak.” Falling syllogism! Step nimbly to one side.
The “conspiracy theorist” epithet is not likely to much longer block attention to the role, if any, played by Rich — the more so since some players who say they were directly involved with Rich are coming forward.
In a long interview with Lauria a few months ago in New Zealand aired this month on CN Live!, Kim Dotcom provided a wealth of detail, based on what he described as first-hand knowledge, regarding how Democratic National Committee documents were leaked to WikiLeaks in 2016.
The major takeaway: the evidence presented by Dotcom about Seth Rich can be verified or disproven if President Trump summons the courage to order the director of NSA to dig out the relevant data, including the conversations Dotcom says he had with Rich and Rich may have had with WikiLeakspublisher Julian Assange. Dotcom said he put Rich in touch with a middleman to transfer the DNC files to WikiLeaks. Sadly, Trump has flinched more than once rather than confront the Deep State — and this time there are a bunch of very well connected, senior Deep State practitioners who could faceprosecution.
Another sign that Rich’s story is likely to draw new focus is the virulent character assassination indulged in by former investigative journalist James Risen.
Not Risen to the Challenge
Risen: Called Binney a “conspiracy theorist.” (Flickr)
On August 5, in an interview on The Hill’s“Rising,” Risen chose to call former NSA Technical Director Bill Binney — you guessed it — a “conspiracy theorist” on Russia-gate, with no demurral, much less pushback, from the hosts.
The having-done-good-work-in-the-past-and-now-not-so-much Risen can be considered a paradigm for what has happened to so many Kool-Aid drinking journalists. Jim’s transition from investigative journalist to stenographer is, nonetheless unsettling. Contributing causes? It appears that the traditional sources within the intelligence agencies, whom Risen was able to cultivate discreetly in the past, are too fearful now to even talk to him, lest they get caught by one or two of the myriad surveillance systems in play.
Those at the top of the relevant agencies, however, are only too happy to provide grist. Journalists have to make a living, after all. Topic A, of course, is Russian “interference” in the 2016 election. And, of course, “There can be little doubt” the Russians did it.
“Big Jim” Risen, as he is known, jumped on the bandwagon as soon as he joined The Intercept, with a fulsome article on February 17, 2018 titled “Is Donald Trump a Traitor?” Here’s an excerpt:
“The evidence that Russia intervened in the election to help Trump win is already compelling, and it grows stronger by the day.
“There can be little doubt now that Russian intelligence officials were behind an effort to hack the DNC’s computers and steal emails and other information from aides to Hillary Clinton as a means of damaging her presidential campaign. … Russian intelligence also used fake social media accounts and other tools to create a global echo chamber both for stories about the emails and for anti-Clinton lies dressed up to look like news.
“To their disgrace, editors and reporters at American news organizations greatly enhanced the Russian echo chamber, eagerly writing stories about Clinton and the Democratic Party based on the emails, while showing almost no interest during the presidential campaign in exactly how those emails came to be disclosed and distributed.” (sic)
Poor Jim. He shows himself just as susceptible as virtually all of his fellow corporate journalists to the epidemic-scale HWHW virus (Hillary Would Have Won) that set in during Nov. 2016 and for which the truth seems to be no cure. From his perch at The Intercept, Risen will continue to try to shape the issues. Russiagaters major ally, of course, is the corporate media which has most Americans pretty much under their thumb.
Incidentally, neither The New York Times, The Washington Post, nor The Wall Street Journal has printed or posted a word about Judge Mazzant’s ruling on the Butowsky suit.
Mark Twain is said to have warned, “How easy it is to make people believe a lie, and [how] hard it is to undo that work again!” After three years of “Russia-Russia-Russia” in the corporate — and even in some “progressive” — media, this conditioning will not be easy to reverse.
Here’s how one astute observer with a sense of humor described the situation last week, in a comment under one of my recent pieces on Consortium News:
“… One can write the most thought-out and well documented academic-like essays, articles and reports and the true believers in Russiagate will dismiss it all with a mere flick of their wrist. The mockery and scorn directed towards those of us who knew the score from day one won’t relent. They could die and go to heaven and ask god what really happened during the 2016 election. God would reply to them in no uncertain terms that Putin and the Russians had absolutely nothing to do with anything in ‘16, and they’d all throw up their hands and say, ‘aha! So, God’s in on this too!’ It’s the great lie that won’t die.”
I’m not so sure. It is likely to be a while though before this is over.
via ZeroHedge News https://ift.tt/2YMPT9b Tyler Durden
Russia says their nuclear-powered missile is far ahead of the United States despite a deadly mishap during a failed test which killed seven people and sent radiation all over the region, according to Bloomberg.
Speaking with reporters on Tuesday, Kremlin spokesman Dmitry Peskov said that Russian President Vladimir Putin “has repeatedly said that Russian developments in this area surpass the level achieved by other countries, and are quite unique.”
According to the report “U.S. officials have said repeatedly in the past year that its military is working on such programs,” which was echoed in a Monday tweet by President Trump – who said “We have similar, though more advanced, technology,” adding “The Russian “Skyfall” explosion has people worried about the air around the facility, and far beyond. Not good!”
The United States is learning much from the failed missile explosion in Russia. We have similar, though more advanced, technology. The Russian “Skyfall” explosion has people worried about the air around the facility, and far beyond. Not good!
“Skyfall” appears to confirm reports that the weapon being tested was the Burevestnik SSC-X-9 nuclear-powered cruise missile, which Putin introduced during a brief animated segment during his state-of-the-nation address last year.
The deadly mishap sent radiation spiking as high as 20 times normallevels after the incident, according to The Guardian, while Russia’s Federal Service for Hydrometeorology and Environmental Monitoring (Roshydromet) said that gamma radiation measured in six out of eight testing stations in the port city of Severodvinsk ranged from 4 to 16 times the normal rate of 0.11 microsieverts per hour. One measurement was as high as 1.78 microsieverts per hour.
While World Nuclear Association spokesman Jonathan Cobb says that the radiation spike would be akin to a dental x-ray, however the incident prompted a voluntary evacuation (downgraded from mandatory), and has residents and neighboring countries on edge.
News of the explosion set off in nearby cities and towns a run on iodine, a form of which is believed to help prevent the thyroid gland from absorbing radiation. Norway said it had stepped up radiation monitoring after the incident but hadn’t detected anything abnormal. Finland’s Radiation and Nuclear Safety Authority said it didn’t find an increase in radiation after the incident.
The military planned and then canceled activities that would have required the evacuation of residents of Nyonoksa, the town next to the offshore site where the explosion took place, the state-run Tass news service reported, citing a local official. Previously, a local news site reported that the town would be evacuated from 5 a.m. to 7 a.m. on Wednesday. –Bloomberg
“The authorities still haven’t provided enough information about the full spectrum of radiation that may have been released,” said Greenpeace Russia’s Rashid Alimov. “They need to publish more comprehensive data on the event before we can know if the local population faces danger.”
via ZeroHedge News https://ift.tt/2yVUjez Tyler Durden
The Federal Reserve, responding to concerns about the economy and the stock market, and perhaps to criticisms by President Trump, recently changed course on interest rates by cutting its “benchmark” rate from 2.25 percent to two percent. President Trump responded to the cut in already historically-low rates by attacking the Fed for not committing to future rate cuts.
The Fed’s action is an example of a popular definition of insanity: doing the same action over and over again and expecting different results. After the 2008 market meltdown, the Fed launched an unprecedented policy of near-zero interest rates and “quantitative easing.” Both failed to produce real economic growth. The latest rate cut is unlikely to increase growth or avert a major economic crisis.
It is not a coincidence that the Fed’s rate cut came along with Congress passing a two-year budget deal that increases our already 22 trillion dollars national debt and suspends the debt ceiling. The increase in government debt increases the pressure on the Fed to keep interest rates artificially low so the federal government’s interest payments do not increase to unsustainable levels.
President Trump’s tax and regulatory policies have had some positive effects on economic growth and job creation. However, these gains are going to be short-lived because they cannot offset the damage caused by the explosion in deficit spending and the Federal Reserve’s resulting monetization of the debt. President Trump has also endangered the global economy by imposing tariffs on imports from the US’s largest trading partners including China. This has resulted in a trade war that is hurting export-driven industries such as agriculture.
President Trump recently imposed more tariffs on Chinese imports, and China responded to the tariffs by devaluing its currency. The devaluation lowers the price consumers pay for Chinese goods, partly offsetting the effect of the tariffs. The US government responded by labeling China a currency manipulator, a charge dripping with hypocrisy since, thanks to the dollar’s world reserve currency status, the US is history’s greatest currency manipulator. Another irony is that China’s action mirrors President Trump’s continuous calls for the Federal Reserve to lower interest rates.
While no one can predict when or how the next economic crisis will occur, we do know the crisis is coming unless, as seems unlikely, the Fed stops distorting the economy by manipulating interest rates (which are the price of money), Congress cuts spending and debt, and President Trump declares a ceasefire in the trade war.
The Federal Reserve’s rate cut failed to stop a drastic fall in the stock market. This is actually good news as it shows that even Wall Street is losing faith in the Federal Reserve’s ability to manage the unmanageable — a monetary system based solely on fiat currency.
The erosion of trust in and respect for the Fed is also shown by the interest in cryptocurrency and the momentum behind two initiatives spearheaded by my Campaign for Liberty – passing the Audit the Fed bill and passing state laws re-legalizing gold and silver as legal tender.
There is no doubt we are witnessing the last days of not just the Federal Reserve but the entire welfare-warfare system. Those who know the truth must do all they can to ensure that the crisis results in a return to a constitutional republic, true free markets, sound money, and a foreign policy of peace and free trade.
via ZeroHedge News https://ift.tt/2MZP05P Tyler Durden
Russia’s Defense Ministry has published dramatic video Tuesday showing another close encounter between its military planes and NATO jets over the Baltic Sea, but this time it involved a dangerous intercept as the NATO aircraft came just off the wing of a large passenger plane carrying Defense Minister Sergei Shoigu.
A TASS news agency correspondent aboard Defense Minister Shoigu’s plane captured the moment when a pair of Russian Su-27 escorts drove off the NATO F-18 aircraft in what is the most serious incident in the neutral skies over the Baltic to date.
A Russian Su-27 jet propels an F/A-18 Hornet fighter jet away from the aircraft of Russian Defence Minister Sergei Shoigu in the sky over the Baltic Sea.#Russia#USA#Balticpic.twitter.com/uUeTebiYDd
TASS describes the incident as follows (based on rush translation):
The plane carrying Shoigu was accompanied by an escort of two fighter aircraft of the Baltic Fleet Su-27 as it went from Kaliningrad to Moscow.
Above the neutral waters of the Baltic, the NATO F-18 aircraft tried to approach the defense minister’s plane, but the Russian pilots pushed the fighter out, not allowing it to come close to the liner.
One of the Russian Su-27’s can be seen banking hard into the NATO F-18, after which the F-18 continues its path away from the defense minister’s plane.
Given the close-call incident involved Russia’s top military official, Moscow is likely to lodge a formal complaint with NATO command in Brussels.
via ZeroHedge News https://ift.tt/2MnvCR1 Tyler Durden
When it comes to investing in safe assets such as US Treasuries, the decision process is relatively simple: one buys coupon securities (with a maturity over 1 year), on specific expectations of inflation (or deflation) and receiving current income in the form of a cash coupon (assuming there is one). When it comes to T-Bills the decision is simpler: it’s all about liquidity preference – does one keep cash equivalents in the form of US Dollars, whether paper or electronic, or does one purchase Bills, with a maturity from 4- to 52-weeks. If investors are mostly happy to exchange money for Bills, it is generally said that liquidity in the financial system is ample; if however investors are unwilling to part with their “cash” in order to fund the US Treasury (as a reminder, in a time of chronic budget deficits, Uncle Sam has to issue debt to fund its operations), then there is a liquidity shortage.
We bring this up because last week we warned that as the Treasury scrambles to rebuild its cash balance to roughly $350BN from the latest $133BN in Treasury cash, a process that will require the aggressive gross and net issuance of T-Bills, liquidity in the system was set to collapse.
In fact, according to Bank of America the liquidity shortage over the next two months – a period in which as shown in the chart above the Treasury would aggressively be issuing bills – would be so acute, that the Fed may be forced to launch QE, a conclusion which JPMorgan echoed just days later.
Today, we got the first proof that Bank of America may be right when we observed just how tight liquidity already is in today’s sale of $28 billion in 52 week bills by the Treasury, an auction which went so poorly it was widely panned by analysts, with Stone & McCarthy going so far to describe it as terrible.
For those who missed it, this is what happened: today, just before noon, the Treasury sold $28 billion of 52-week bills at a yield of 1.80% versus the when-issued level of 1.775%; while the WI may have been “too rich for the buyside” according to Jefferies economist Ward McCarthy, the massive, 2.5bps tail was the largest on record since Treasury began to auction 1-year bills in June 2008, Stone & McCarthy analysts wrote.
Worse, the bid-to-cover of 2.66 was not only sharply below the 2.87 from last month, it was the lowest since 2008.
The auction was so ugly, in fact, that it prompted Jefferies to notes that “if you are looking for a pretty auction, look someplace else” while SMRA chimed in that “the combination of extreme recent market volatility and the record auction size made for a terrible auction.”
Speaking on Bloomberg TV, Guggenheim Partners CIO Scott Minerd, who recently warned that the coming crash could easily wipe out as much as 50% of the S&P, countered BofA’s warning saying that T-bills “aren’t a bad place to be,” given that there’s a lot of supply and short-term rates “are fairly high.”
And speaking of supply, there is a lot of it coming: on Monday the Treasury sold 42BN of three-month bills and $42BN of six-month bills on Monday; the size of the three- and six-month tenors were each $3BN larger than prior sales, while the 52-week auction is $2b larger than last month’s offering; the combination of settlements for Treasury bill and mid-month coupon auctions is expected raise about $55 billion this week, however it is the coming months that will see a tsunami of Bill issuance as the Treasury scramble to refill its cash balance to $350 billion, meaning Treasury will have a boatload of short-term securities to sell.
For those wondering how to keep track of just how tight funding conditions are becoming, look no further than the repo market, because while the glut of cash has recently softened overnight repo rates, the market may be starting to shift with overnight GC trading around 2.20%/2.18% Friday, ICAP data show; curiously on Tuesday it dipped down to 2.15/2.07 after opening at 2.26/2.24.
“Liquidity should dry up [this] week as recent bill auctions settle on Tuesday, and Thursday’s bill and coupon auction settlements raise a combined $34.7 billion,” Stone & McCarthy analysts said.
While it remains unclear if the Fed will have to step in and launch QE in the next few months to offset the plunge in market liquidity, a few more “terrible” auctions like today’s 52-Week sale and Powell may have no choice.
via ZeroHedge News https://ift.tt/33vwyrD Tyler Durden
It looks like a new page has turned in the tug of war between Tesla bears and bulls. Gone are the days of Elon Musk taunting short sellers. Gone are the days of mailing David Einhorn pairs of “short shorts” to take jabs at his public short position of the company.
And here to stay, perhaps, are the Tesla bears in the proverbial “driver’s seat”.
So far in 2019, Tesla has become the most profitable short bet in the U.S., according to Bloomberg. As Tesla’s stock has plunged 30% this year, short sellers have netted a massive $2.75 billion in mark-to-market gains.
Shares have bounced off of their 52 week lows near $177 and recovered slightly, but are still far off from the $300 level they started the year near. The company’s stock remains on pace for its worst annual decline in its history, prompted by continuing concerns about demand, the inability to consistently turn a profit and a CEO that may or may not be involved in the Jeffrey Epstein scandal, as we recently reported.
According to Aug. 9 data from S3 Partners, gains from shorting Tesla are about three times that of the second most lucrative short of 2019, Abbvie.
The worst performing shorts of the year, according to the same data, include names like Alibaba, Apple and AMD. Alibaba shorts are down almost $3 billion, while shorts in Apple are down about $2.7 billion.
The tech-heavy list of names on the “least profitable short” list coincides with the fact that the S&P 500 Information Technology index is up 28% in 2019. The index includes about half of the names on the list.
…as if we needed even further proof of what we already know: Tesla is a car company, not a technology company. And, if it truly is assigned a car company valuation, shorts likely stand to catapult even higher on the “profitable short” list in the future.
via ZeroHedge News https://ift.tt/2TAyF9a Tyler Durden
The year is 2030 and the S&P just broke the 1 million level following an algo-induced short squeeze after Trump tweets, “President Ivanka headed to China to negotiate an even better deal for USA. Chinese seriously intimidated because she’s hot.” It has now been 12 years, a trade deal is nowhere in sight and despite a global economic collapse, the market still rallies 2% every time Trump tweets that a deal is close—which happens just about every day. The occasional down days are the result of rumors that the UK has scrapped yet another BREXIT plan.
The Russell 2000 officially announces that during its annual re-balance, it will remove all profitable companies as “no one wants to own those anyway.” Going forward, the only requirement for index inclusion is a 5-page corporate presentation showing how your business has a TAM of at least 1% of global GDP.
In other news, the Federal Reserve is debating if they should lower the Fed Funds rate another 100bps to negative 101% and break the “neg 100 barrier” in order to achieve their 2% inflation target. A loaf of bread now costs USD $100 million but the Fed stands by their excel model known as “OFFICIAL HEDONICS MODEL_everyone_please_work_off_this_version_v9” Despite millions of hours of billable work, McKinsey still cannot figure out how to fix the circular reference that keeps crashing the 2,000 tab model.
Tesla is the most valuable company on earth. In 2023, Musk chose to exit the car business by locking the doors to the Fremont factory and setting it on fire. Due to shoddy record-keeping, no one knows how many workers died in the worst work-place tragedy in US history. CFO Zach Kirkhorn’s crayon on construction paper count system is indecipherable to investigators. After Musk tweeted that, “they all said they were willing to die for The Mission,” the US government drops all investigations into the fire and Musk re-focuses Tesla’s business model entirely on tweeting rumors that the Flying Saucer Reveal Event is coming soon. Algos panic buy Tesla shares every time he tweets a saucer GIF. Analysts regularly upgrade the stock based on his creative use of emojis. Thousands of innocent pedestrians are killed each year by legacy Teslas on auto-pilot. No one in the NHTSA seems to care as “getting Tesla’d” enters the global lexicon.
WeWork is now the largest owner of property globally. 80% of all people live in a WeHome. Operating losses run at three times revenues. Softbank keeps funding the losses with up-rounds in order to mark-up its own book. There are now hundreds of public hold-cos with fully controlled VC deals participating in similar Masayoshi Schemes. The prevalence of these Masayoshi Schemes leads investors to characterize Ponzi Schemes as small-time amateur frauds for retail investors. Silly Madoff was only thinking in billions while Softbank will collapse the whole Japanese economy when it fails.
As ETF managers run out of shares to buy that aren’t already owned by other ETFs, ETF management groups focus on building ETFs of ETFs. Leading-edge firms create ETFs of these ETFs affectionately as “ETFs Cubed” or just “Cubes.” ZeroHedge continually warns that the supply of Cubes will run out when firms start creating ETFs of Cubes—most of Wall Street warns “this could never happen.”
Natural gas now trades at 5 cents as US E&Ps continue to out-spend cash flow by 300%. They appear to have unlimited debt funding access as they are the only global debt issuers still offering a positive interest rate yield. Despite two decades of lies, investors still stubbornly believe that this is the year that E&Ps will spend within cash flow.
Compounder Bros. LP is the world’s largest hedge fund. Their pitch deck notes that had you paid 50 times revenue for any SAAS company 10 years ago, you’d have out-performed every other asset class on earth. 1000 times revenue is actually cheap if you play it forward another 500 years. Berkshire Hathaway’s focus on earnings shows just how out of touch Buffett really is. Multiple activist funds have launched campaigns against each other over how to break up Berkshire and “financialize” the various components.
The year is 2030; I keep my sanity by writing satire at http://adventuresincapitalism.com while managing my hedge fund, invested in companies now trading for less than half of 1 times cash flow. I swear that 2031 is the year for mean reversion…
An opioid crisis is unfolding across the Bay Area, according to a new report from San Francisco’s public health department.
Last year, fentanyl overdose deaths jumped 150% in San Francisco, to 89, up from 37 deaths in 2017.
Fentanyl was first spotted on the streets of the city during the 2008 financial crash when five deaths were reported. In 2010, six deaths were connected to the highly addictive synthetic opioid, which killed 22 people in 2016.
“It’s not a huge surprise to see this, although it’s certainly disappointing and sad to have lost this many lives in the city,” Dr. Phillip Coffin, the director of substance use research for the San Francisco Department of Public Health, told San Francisco Chronicle.
“Unfortunately, there is no locality that can withstand the introduction of fentanyl without some increase in mortality.”
Per the city’s medical examiner, 39 people overdosed on fentanyl in 1Q19 alone. That number is expected to increase dramatically this year, could be several hundred by year’s end.
The Chronicle said fentanyl is 50-100 times more potent than morphine.
“It has taken over heroin as the number one choice for opioid,” Dr. Chris Colwell, chief of emergency medicine at Zuckerberg San Francisco General Hospital, told the paper.
Fentanyl is starting to become a significant issue across the city; this comes at a time when the homeless crisis is also gaining momentum.
The total number of homeless counted in the city in January 2019 was nearly 10,000, according to the Los Angeles Times.
A perfect storm has been brewing in the Bay Area for the last five years: An expanding homeless population blended with synthetic opioids is leading to an exponential increase in overdose deaths that could soon be considered a public health emergency.
Coffin said fentanyl has “become more and more prevalent as the opioid that people are using in San Francisco” and “is a riskier opioid compared to prescription opioids.”
Last month US District Judge Dan Polster allowed the public for the first time to examine opioid sales from the Drug Enforcement Administration’s Automation of Reports and Consolidated Orders System (ARCOS) that details how the opioid epidemic exploded into almost every community across the US from 2006 through 2012.
As per The Washington Post, the ACROS data showed big pharmaceutical companies pumped 76 billion oxycodone and hydrocodone pills from 2006 through 2012 into nearly every zip code across the country.
As shown in the map below, the number of legal opioid pills distributed per person, per year, from 2006 to 2012, was some of the highest in Northern California, bordering the Bay Area.
With the opioid and homelessness crisis far from over in the city, expected to gain momentum through the mid-2020s, these two imbalances could trigger a public health crisis that would drain resources from emergency systems and funds from the local government.
via ZeroHedge News https://ift.tt/2YO15Cn Tyler Durden
