What Happens When An Idiot Market Finally Gets The Post-Euphoria Hangover

Nowhere is the ‘get-rich-quick’, ‘fundamentals-are-for-suckers’, new normal ‘idiot’ market more apparent than in the “mistakes” investors have made in Twitter’s IPO (TWTRQ), Google’s NEST acquisition (NEST), and now Facebook’s Oculus purchase (OCLS & OVZT). 

 

 

As The Fly notes,

Shares of Oculus Innovative Sciences (OCLS), a healthcare company that makes products for treating acute and chronic wounds, are trading higher after Facebook (FB) acquired another company with a similar name but very different business.

 

Facebook announced that it has agreed to acquire Oculus VR, which is is based in Irvine, California and makes the the Oculus Rift, a virtual reality headset. Facebook will pay about $2B for Oculus VR, including $400M in cash and 23.1M shares of Facebook common stock valued at $1.6B.

 

Oculus VR is not related to Oculus Innovative Sciences. A company spokesperson told The Wall Street Journal’s MarketWatch that the mistaken identity “might play a part” in today’s move higher.

 

Another company, Oculus VisionTech (OVTZ), clarified earlier in a press release that there is no material change in the affairs of the company and the company is not associated with the transaction involving Facebook and Oculus VR.

 

Oculus VisionTech, which is based in Vancouver, designs and markets technology for delivery of digital media and trades on Canadian exchanges and on the OTC markets with the ticker “OVTZ.”  

Peak stupidity?


    



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New Jersey Parents: Drug Test Teachers; Also Have More Searches, Cameras

sign applies to studentsSome parents in Cliffside Park, New
Jersey, are agitating for random drug testing of teachers after one
middle school teacher was arrested for possession of heroin,
prescription meds, needles, and other paraphernalia. He and another
teacher were suspended with pay by the school district, and a third
teacher reportedly requested a leave related to the investigation.
Last week a child found a syringe in the boys bathroom. Although
school bus drivers in New Jersey must undergo drug testing, thanks
in part to union representation, there are no drug test mandates
for public school teachers. The Bergen Record
reports on parents’ reactions
:

“I could care less for the unions” if they oppose this,
said one school parent who would not give her name. “The security
of my child is important.”

…Several parents — none of whom would give their name — said after
the [Thursday school board] meeting they would like the school to
install surveillance cameras, while another mom said she wanted
employees to be drug tested monthly.

“I trusted the teacher so much,” she said, though she would not
specify which educator taught her child. “I’m so
disappointed.”

Parents also had spoken out the previous evening, telling officials
at the school board meeting that they did not want the teachers
returning to work. Others called for more drug searches on
campuses.

All the teachers implicated are tenured, a job protection
originally fashioned to protect teachers from reprisals for the
content of their teaching. Even if heroin were legalized, leaving
syringes in the student bathroom isn’t something teachers ought to
be doing.

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Soaring Bacon Prices Got You Down? Blame The Porcine Epidemic Diarrhea Virus

We recently noted the soaring cost of US foodstuffs this quarter (handily outperforming stocks) but without a doubt it is lean hogs that are the best performer – up a stunning 51% in Q1. As Bloomberg reports, the reasons are varied and, fair warning, sometimes disgusting: The same Ukraine story that is helping to keep a lid on equities is fueling a rally in wheat on concerns about Russian crops; the pigs in China are gobbling up U.S. soy, while the hog supply in the U.S. is being hurt by a nasty case of “porcine epidemic diarrhea virus.”

 

Via Bloomberg:

So far in 2014 it’s worth taking note of the leaders to show that while alpha may not grow on trees, it can sometimes grow in the fields:

Lean hogs are up 51 percent this quarter.

 

Corn is up 16 percent.

 

Even untradable chicken wings (specifically the USDA Georgia Dock Chicken Ready To Cook Wings Spot Price) are up 8.9 percent.

And of course, the broad US Foodstuff index

 

Must be the weather? But summing it all up – Q1 has been the quarter of food inflation and financial asset deflation


    



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The Top 10 Surprises Of The First Quarter

From Nick Colas of ConvergEx

Q1 2014 – Top 10 Surprises

U.S. stocks are like a duck, floating on a quiet pond – calm above the surface, but lots of furious churning invisible to the naked eye.  The S&P 500 looks like it will end the first quarter within a hair of the 1848 level where it started the year, but that doesn’t mean everything else is all stasis and light.  Today we offer up a quick ‘Top 10’ list of surprises from the last 90 days.  Gold, for example, is back from the grave, up 7.3%.  So is an imperial Russia, with the biggest land grab since the building of the Berlin Wall.  Mutual fund flows are ahead of exchange traded funds by a factor of 5:1.  And most of those ETF inflows are into bond funds, not the “Great Rotation” we all expected into stocks.  The 10-year U.S. Treasury yields all of 2.67%, and bonds have bested U.S. stocks consistently in 2014.  First quarter 2014 may not have been a long trip, but it certainly has been strange.

The number 1848 is synonymous with revolution.  Starting in France early in February 1848, populations in scores of countries from Latin America to Poland rose up, sometimes even overthrowing long established monarchies, with calls for greater democracy.  There was no Twitter back then, of course, or any of the other technological enablers we now consider essential for a truly modern uprising.  These were old-school revolts, but no less effective in their impact for want of a YouTube channel or Facebook page.

Fast forward to the current year and relocate the conversation to Wall Street, and the number 1848 is a good deal more benign – even boring.  We started the year at 1848.36 on the S&P 500 and 85 days later we are at 1849.04.  Excluding dividends, that is a 0.04% increase, and a negative return when adjusted for inflation.  Yes, we are coming off a strong 2013, but that lack of follow through is a notable shift from expectations just three months ago. 

That got me thinking about capital markets ‘Surprises’ generally, and it wasn’t too difficult – with the help of some ConvergEx capital markets professionals – to come up with a “Top 10” list.  Yes, I know Jimmy Fallon is beating the Worldwide Pants off David Letterman, but a series of “Thank you” notes didn’t seem to capture the “Spirit of 1848” in quite the right way. 

Here’s our list of Q1 2014 capital markets surprises:

  1. Geopolitical Headline Risk is Back – and No One Cares.  If you had told 100 traders at the end of last year that Russia would annex the Crimea and amass a sizeable military force on the Ukrainian border, 101 of them would have laughed in your face.  And then they would all have sold their risk assets.  Yet, even with this event now in the history books, U.S. equities are flat and European stocks are catching a bid late in the quarter.
  2. Gold Beats U.S. Stocks.  The yellow metal is back with a vengeance, up 7.3% year to date.  Yes, it is well off its 2011 highs of +$1,800, but rumors of its demise in 2013 were greatly exaggerated.  All the more impressive is the fact that this move comes with worries of European deflation and new Fed Chair Janet Yellen’s “Six month” doomsday clock to interest rate hikes. 
  3. Bonds Beat U.S. Stocks.  Look at any wide measure of performance for the fixed income complex – high grade corporates, their high yield cousins, or aggregate bond indices – and you’ll see YTD performance of +1.3 to +2.5%.  That’s much better than the stuck-in-neutral U.S. equity market.  Domestic stocks, in fact, have lagged their bond market competition in all but 5 days of 2014 when looking at YTD returns. 
  4. Mutual Funds Get Their Groove Back.  The aftermath of the Financial Crisis was especially cruel to the mutual fund industry, as retail investors reduced risk from 2007-2013.  Now, in 2014, total mutual fund flows as measured by the Investment Company Institute are +$85.7 billion through March 19th.  Of that total, equity funds got more than half, or $51.9 billion.  Domestic stock mutual funds may see their first 3 month streak of inflows since 2009 if the last half of March just holds flat for money flows.
  5. CBOE VIX Index Begins to Trend Higher.  Over the last few years, the only activity at most volatility desks on Wall Street was the occasional tumbleweed rolling through town.  The “Bernanke Put” made stock investors fearless, pushing their demand for options-based insurance dramatically lower.  Now, with the Federal Reserve talking up the need to start lifting rates, volatility is creeping back into stock markets.  We continue to believe that the VIX will grind its way higher in 2014 and average 15-20 as we move through Q2. 
  6. U.S. Treasuries – What, Me Worry?  The 10 year started 2014 at 3.03% and currently sits at 2.67%.  Everyone talks about how the horrid weather this winter hurt the U.S. economy; no one mentions that the weakness seems to have helped Treasury yields by dampening fears of accelerating economic growth and inflation.  Throw in some asset allocation trades from institutional investors anxious to lock in their 2013 stock market gains, and you have a measurable rally in the most hated asset class out there – bonds.
  7. Utilities Beat Tech – and Everything Else.  The top sector with the S&P 500 is Utilities, up 7.8%. With a 3.6% dividend yield, this group is the closest thing an equity investor can get to bond exposure in all-stock portfolio.  So, for 2014: Widows and orphans: 1, momentum investors: 0.
  8. Jan Brady (MidCaps) Finally Get a Date.  Of the three closely followed S&P market cap indices, mid caps rule the roost, up 0.6% in 2014.  One explanation: they are not as risky as small caps (down 1.0% in YTD) and not as international and heavily super-cap as the S&P 500 (flat). 
  9. Miss PIGSy Gets Her Frog.  Exchange Traded funds focused on Portugal, Italy, Greece and Spain are pulling in assets, to the tune of $1.0 billion year-to-date.  That’s especialy impressive considering their total asset under management are just $3.1 billion. 
  10. No Great Rotation.  The old saw that “Convention wisdom is always wrong” lives on in 2014.   This was supposed to be the breakout year for stocks, full of revenue growth, synchronized expansion in developed economies, and rising interest rates.  Yeah… Not so much.  Money flows into fixed income ETFs of $10.4 billion YTD outnumber those into equity products, with just $1.3 billion.  Interest rates seem well grounded, as noted previously.  If you had a flashback to high school History class at the top of this note, consider the following: “The Great Rotation is neither ‘Great’ nor a ‘Rotation’.  Discuss.


    



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Sixth Grade Whiz Figures Out How to Save the Government Almost $400 Million by Changing Fonts

Figuring out how to save
taxpayers hundreds of millions of dollars on ink is so easy a sixth
grader could do it. In fact, one did. 

Suvir Mirchandani, a student at a Pittsburgh middle school,
decided he wanted to look for ways to reduce waste at his school.
So for a science project, he measured how much ink was used in
creating enlarged versions of commonly used letters in his
teachers’ handouts. And then he measured how ink usage would be
reduced by using different fonts. 

Printer ink can be quite expensive—almost double the per ounce
price of Chanel No. 5 perfume, as Mirchandani tells CNN, which

first reported the story

It turned out his school district could reduce its annual ink
usage by 24 percent and save $21,000 a year by switching to
Garamond, a lighter font with thinner, less ink-heavy
strokes. 

After submitting his work to a journal for young researchers run
by Harvard grad students, Mirchandani was encouraged to expand his
research. 

The task was tougher. But the potential savings were much, much
bigger. CNN reports:

With an annual printing expenditure of $1.8 billion, the
government was a much more challenging task than his school science
project.

Suvir repeated his tests on five sample pages from documents on
the Government Printing Office website and got similar results
change
the font, save money
.

Using the Government Services Administration’s estimated annual
cost of ink — $467 million — Suvir concluded that if the federal
government used Garamond exclusively it could save nearly 30% — or
$136 million per year. An additional $234 million could be saved
annually if state governments also jumped on board, he
reported.

So will the Government Printing Office make a change? I wouldn’t
count on it:

Gary Somerset, media and public relations manager at the
Government Printing Office, describes Suvir’s work as “remarkable.”
But he was noncommittal on whether the GPO would introduce changes
to typeface, saying the GPO’s efforts to become more
environmentally sustainable were focused on shifting content to the
Web.

Sounds like Mirchandani may end up learning two lessons: With a
little thought, a smart person can find simple ways for the
government to save money—and the government doesn’t seem terribly
interested in pursuing them. 

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Gold Arbitrage and Backwardation Part III (Gold as a Commodity)

by Keith Weiner

 

In Part I, we discussed the concept of arbitrage. We showed why defining it as a risk-free investment that earns more than the risk-free rate of interest is invalid. There is no such thing as a risk-free investment, and in any case economics must be focused on the acting man rather than theoretical constructs. We validated that arbitrage arises because the market is constantly offering incentives to the acting man in the form of spreads. Arbitrage is the act of straddling a spread. Arbitrage will tend to compress a spread. The spread will narrow, though not to zero because no one has any incentive to make it zero.

In Part II, we looked at the question of whether gold is a currency. The answer cannot be provided by the symbol naming committee at Bloomberg. Gold is indisputably money, and it may be used in the occasional transaction today. The reason for considering it as a currency was to look at contango and backwardation simply as states of gold having an interest rate that is lower or higher, respectively, than the dollar. However, as we concluded in Part II, there is no proper interest rate in gold. The gold lease rate is closer to being a discount rate than an interest rate.

In this final Part III, we look at the fact that gold is a tangible commodity. While the question of whether gold is a currency is important, and it’s good to think about philosophical concepts such as arbitrage, let’s not forget that gold is a material good. It can be held in the hand, it can be bought and sold, and it can be warehoused.

Warehousing is an important innovation. Did you ever wonder how people coordinate their actions over many months between wheat harvests? How is it possible that farmers, bakers, financiers, and consumers could somehow work out a mechanism in the free market to store grain at the time of the harvest and release it throughout the year? The fact that this occurred is amazing. Wheat is not only available out of season, but its price does not gyrate radically (at least no more than every other price these days, as the failing dollar goes off the rails). It does not crash when the grain is harvested and it does not skyrocket as the grain stocks are consumed later in the year.

Obviously, a warehouse suitable for storing grain is necessary. However, without another innovation the warehouse won’t be able to solve the problem. It is necessary but not sufficient. The innovation of the futures market is also necessary.[1]

Today, we think of futures market as a venue to speculate on the price of something, such as wheat. If we expect the price to rise, we go long a futures contract. To bet on a falling price, we could go short. Speculators indeed play an important role in the market. They drive prices up, when they expect goods to be scarce, which prevents overconsumption and running out. They also drive prices down, when they expect a glut, which encourages consumption before stockpiles overflow.

The futures market evolved to fulfill the needs of two other actors. The producer of a good—the farmer in the case of wheat—wants to lock in a price at which he can make a profit. If, in March when he is making his decision of what crop to plant, the price of wheat is $6 per bushel, he can sell wheat futures and lock in a price of around $6 immediately. This removes the risk of an adverse price move. It may also help him obtain financing to produce the wheat.

On the other side of the trade, there is a bakery that wants to secure access to wheat and to hedge the risk that the price could rise. The bakery can buy wheat futures.

The speculator is not able to deliver, or take delivery of, any goods. By contrast, the producer and consumer intend to exchange wheat and cash. The farmer intends to deliver wheat when he harvests it. The bakery intends to take delivery when he needs it to bake bread.

One other actor is necessary to make this market work. The warehouseman arbitrages the spread between wheat in the cash market and wheat in the futures market. Suppose that cash wheat is selling for $5 during the harvest season, but January future wheat is selling for $6. The warehouseman can simultaneously buy spot and sell January, pocketing $1. He stores the wheat until delivery in January.

The warehouseman has no exposure to the wheat price.

This is a really important idea. He is a specialist in knowing when to store wheat, not in speculating on the price. If the warehouseman were forced to take price exposure, there would either not be warehousing, or the cost of warehousing would have to rise dramatically to cover the price swings.

If the warehouseman has no exposure to price, what does he have exposure to? On what does he make his money? He has exposure to the spread between the cash or spot market, and the futures market—called the basis. In our example, this was $1.

If the price of wheat in the futures market is greater than the price in the spot market, this is called contango. In a contango market, if the warehouseman has space for more wheat, he will add wheat to his warehouse. Putting wheat into the warehouse for delivery under contract later is called carrying it.

This works in the other direction, too. If the price in the spot market is higher than in the futures—called backwardation—then the warehouseman will sell wheat in the spot market and buy back the futures he shorted. Selling wheat and buying back the futures contract is called decarrying.

If there is contango and the basis is rising, then we can be sure that more wheat is going into warehouses. If there is backwardation and the basis is falling, then we know that wheat is leaving the warehouses. This can continue until there is no more wheat in the warehouses.

It is worth mentioning what one must have in order to take these arbitrages. To carry wheat, one must have money. With current credit conditions, this is not much of a constraint. One must also have extra warehouse capacity. To decarry it, one must have wheat. This makes for a
lopsided set of risks to the basis.

The basis isn’t going to rise much above the cost of credit plus storage costs, because in normal circumstances warehousemen have access to credit and warehouse space (in some commodities, space can be a problem such as crude or natural gas).

Consider the other direction. Suppose you drove a truck up to a grain elevator town two days before the harvest. Workers have the equipment partially disassembled and they’re cleaning it, getting ready for the trucks that will soon be coming off the farm fields. You hop out and go over to a group of elevator operators chatting on the edge of the parking lot. You ask them how much to fill up your truck with wheat, right now?

They begin to laugh, so you take out a wad of $100 bills. They stop laughing and stare at you and eventually one of them says $20 a bushel. He reminds you that if you can sign a contract to take delivery in a month, the price is $7.

Clearly, just days before the harvest, no one has any extra wheat. If you pay that $20, he will make a phone call and a truck halfway to some bakery in another county will turn around. That bakery will end up getting paid more money to be idle for a week than it would have made by selling bread.

This is a case of extreme backwardation (exaggerated to make a clear point). Think of backwardation as being synonymous with shortage. This is a pretty strong statement, so let’s look at the proof.

If there was no shortage of wheat, then why isn’t someone decarrying it? The markets do not normally offer you a risk-free profit that grows day by day. If, for example, IBM shares traded in NY for $99 and for $101 in London, then someone would buy in NY and sell in London and keep doing it until the prices were brought together. Arbitrage acts to compress the very spread from which it derives its profit.

In our example, no one is taking the wheat decry arbitrage because no one has any wheat left over.

While, as we saw above, there is a limit to how high the basis can go, there is no limit to how low. The scarcer the good, the lower the basis could fall.

One other thing is worth noting before we proceed. With the advent of the futures market, the price of a good that’s produced seasonally but consumed all year need not fluctuate much due the time of year. Price fluctuation would harm producers or consumers.

What can fluctuate harmlessly is the basis spread.

What does this have to do with gold? Virtually every ounce of gold ever mined in thousands of years of human history is still held in human possession. The stocks to flows ratio—inventories divided by annual production—is measured in decades for gold, but months for wheat and other regular commodities.

This means that there is no such thing as a glut in gold, and no such thing as scarcity. Gold is not produced seasonally, and it is not consumed. There should not be a futures market in gold. It exists as a perverse byproduct of the regime of irredeemable paper money. It would not exist in a free market, which would have a robust global market for gold lending.

Right before the harvest, the wheat market can go into backwardation because no one has any wheat to decarry. It is truly scarce. In gold, backwardation should not be possible. There is always enough gold in existence, to decarry and eliminate any backwardation.

And yet, there has been an intermittent gold backwardation since December of 2008. It has become typical for each futures contract to go into backwardation as it headed into expiration, and I have coined the term temporary backwardation.[2]

Gold backwardation is incredible. Like a unicorn, it should never be seen! All of this gold just sitting around, and the owners stare at their screens and don’t take the bait. It’s a risk free profit, according to the conventional view. And yet gold is becoming scarcer, at least to the market. All of those gold owners are choosing to let their gold sit idle, not earning anything at all, rather than trade away their bars for futures contracts.

It’s not possible to understand this phenomenon with mathematical models. Sure, you can measure the basis and use it to model all sorts of things, but to understand the big picture you have to take a step back. You have to see the forest and that means backing away from that tree for a minute.

Perhaps one of the biggest news items pertaining to gold as I write this is the ongoing situation regarding Germany’s gold. Germany asked for the Federal Reserve to give back a quantity of their gold over a period of 7 years. And by the end of 2013, the Fed had delivered too little, and was falling behind even that leisurely pace. I won’t speculate on what’s happening, but I do want to point out what the Germans are thinking.

They don’t trust the Fed.

They didn’t trust the Fed in the first place, which is why they pressured the Bundesbank to ask for the gold to be shipped to Germany. The Fed’s apparent failure to deliver only deepens their convictions that they were right not to trust the Fed, and of course increases the distrust of many observers around the world too.

Many in the online gold community want to see Germany get their gold, but are concerned that they won’t. They have themselves taken possession of their own gold. They urge everyone to take his own gold in the form of coins or bars out of the banking system, and hold it at home or someplace that’s safe and secure.

This is the process of gold withdrawing from the market. It is an inexorable trend towards permanent backwardation.[3] One ignores this at one’s peril. It cannot be dismissed by the assertion that gold is a currency. Whether or not gold has a rate of interest, and whether this rate is above or below LIBOR has no bearing here.

Gold is a physical commodity. Its owners are removing it from the tradable markets, squirreling it away in nooks and crannies where they feel it’s safe. This is not merely a phenomenon of differing interest rates. Real metal is being moved in the real world, and everyone would do well to understand why, and what it means.

Trust is collapsing, and for good reason. The foundation of the global financial system is the US Treasury bond. It is backed by nothing more nor less than the full faith and credit of a government with exponentially rising debt, and which has neither the means nor intent to repay. If you don’t trust that the US government can pay, then you can’t trust a bank deposit because the bank uses the Treasury as their asset. If you can’t trust a bank, then you can’t trust a gold futures contract.

It is in this light that one must view gold backwardation. In wheat or any other ordinary commodity, there is sometimes a state of shortage. When that occurs, anyone with the commodity can make a risk-free profit by decarrying it. However, there is no such thing as a shortage of gold. There is a shortage developing—a shortage of trust. Decarrying gold does incur a risk. One may be giving up good metal for bad paper, and never be able to reverse the swap.

Unfortunately, with the collapse of trust comes the collapse of coordination of economic activity. The disappearance of gold from the monetary system will have momentous consequences. This is why I founded the Gold Standard Institute USA to promote the gold standard, and reverse this trend before it reaches the end.

 


[1] What follows is material I shared with my private subscribers in Feb 2012.


    



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Biotech Bounce Bulls Bashed

Yesterday’s late bounce and this morning’s opening follow-thrugh were heralded by many talking-heads this morning as the end of the sell-off and a great buying opportunity. Well, on the bright side, those stocks are now at least 3% cheaper having plunged from the opening highs – even as the broader indices hold in. The Momos, also considered to have seen the worst, are re-collapsing…

 

The Nasdaq and Russell are now red YTD once again

 

This is the 8th day in a row of early strength collapsing into weakness…

 

and the momos are giving all the early gains back…

 

so much for that “rotation”


    



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#CancelColbert for Lampooning Racism?

The
Internet is, for better or worse, an amplifying device.
Especially
on Twitter, whether its #FreeBieber and #FreeAlaa,
people can really crank their opinions up to 11. Amplification does
not mean clarification though, and everyone’s favorite
microblogging site is at the center of another a hot mess, fighting
about Stephen Colbert, racism, and the stinging impact of
satire.

The Comedy Central pundit ran a
segment
about the Washington Redskins on Wednesday, mocking the
team’s owner for starting the Washington Redskins Original American
Foundation. To hit home his point that the charity is an empty
gesture, Colbert joked about starting his own Ching-Chong Ding-Dong
Foundation for Sensitivity to Orientals or Whatever. The next day,
someone in control of the Colbert Report’s official twitter account
wrote about the satirical foundation.

Cue the outrage.

Suey Park, a self-described writer and
activist, saw the tweet and wrote back, “The Ching-Chong Ding-Dong
Foundation for Sensitivity to Orientals has decided to call for
#CancelColbert.
Trend it.” She also blamed “white liberals” for not doing enough to
end racism.

Cue the outrage getting messy.

Today, #CancelColbert is trending in the U.S. and worldwide. The
mosaic of 140 character statements in solidarity with Park
constitutes an argument that Colbert’s attempted anti-racist satire
is still hurtful and racist because it relies on racial
stereotyping, and is therefore unacceptable. On the other side of
the kerfuffle, people are angry that others want a jokester off the
air for making a joke. Given the nature of the debate, a lot of the
outrage seems to be satire-on-satire posturing. Even Colbert
called for
canceling his show while noting that he didn’t send the original
tweet.

Blurring more lines, Park hasn’t shied away from using the same
kind of ironic humor Colbert does to address race-related issues.
She previously started a Twitter campaign called
“#NotYourAsianSidekick” and embraces
Asian stereotype
 jokes to make her point in the current
argument. She contends that it’s not a two-way street, though,
because of minority marginalization.

“As a white man, I don’t expect you to be able to understand
what people of color are seeing,” Park
charged
against HuffPost Live‘s Josh Zepps, who
interviewed her today.

Zepps retaliated on
Twitter that Park is a “professional umbrage-taker” and “pretending
that a silly idea isn’t silly because of the race of the person
holding it is condescending and racist.”

Some Native Americans are mad that the #CancelColbert
indignation has overshadowed the Redskins affair.

The caps-lock-because-I’m-shouting confusion
hit new highs
when Fox News’ Michelle Malkin retweeted Park,
and people started blaming conservatives for starting the
anti-Colbert push.

At Salon, Mary Elizabeth Williams,
describing
herself as a “a full-time, professional offended
feminist” offered some advice: “You don’t like what you see in the
world? Speak up about it. Shine a light on it. But don’t insist
that other people be shut down.”

Park is well within her First Amendment right to speak out
against the perceived threat that Colbert poses. But, policing
humor threatens a valuable form of free speech that is
particularly useful
in addressing sensitive issues.

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Scott Shackford on the Language Police and Learning from Trolls

PeanutsIt seems
as though Facebook executive Sheryl Sandberg’s campaign to “ban
bossy” is not going to have the traction she wants. In fact, her
efforts resulted in a cultural backlash where the word ended up
tossed around left and right. As a tech and social media
professional, Sandberg should have predicted the response. The
trolls are always looking for ways to upset people and will defy
efforts to police language the way rum-runners defied efforts to
ban alcohol. Reason’s Scott Shackford explains that attempting to
make the world around you responsible for your emotional well-being
through language choices is just giving certain reprehensible
people the blueprint on exactly how to hurt you.

View this article.

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