Track It Here: Reaper Drone Takes Flight Monday Amid Worsening Riots Across America Tyler Durden
Mon, 06/01/2020 – 14:45
The U.S. Customs and Border Protection’s (CBP) General Atomics MQ-9 Reaper military surveillance drone is back in the skies on Monday afternoon.
Here is the live air map via Radar Box showing CBP-104 flying at 20,000 feet altitude near Minot, North Dakota, with an unknown destination.
CBP-104 near Minot, ND, on June 1. h/t Radar Box
CBP-104 was first brought to our attention on Friday morning (May 29) after Radar Box spotted the surveillance drone spying on protesters in Minneapolis. The drone circled the city more than once as it gathered intelligence for the federal government about the ongoing social unrest on the ground.
With a military drone in the skies, and about 5,000 National Guard soldiers activated in 15 states and Washington, D.C. — it appears the federal government is gearing up for an extended period of social unrest.
via ZeroHedge News https://ift.tt/2MlH25C Tyler Durden
“The Pain Trade Is Clearly Up”: How One Bear Is Hedging The Continued Market Meltup Tyler Durden
Mon, 06/01/2020 – 14:25
For BofA’s Benjamin Bowler, the past two months have been rough. The bank’s head of derivatives research has been skeptical throughout the recent 35% surge in the S&P, urging clients to fade the rally or simply to ignore it, as highlighted in recent posts:
To be sure Bowler is not alone, because as the latest BofA Fund Manager Survey showed, a sizable majority (68%) of investors still believe this is a bear market which would make this a bear market rally (arguably one of the fastest on record) despite the S&P crossing the psychologically important 3,000 level and breaking above what historical analogs suggest as bear-rally peaks.
As such, in his latest note the BofA strategist writes that “the pain trade is clearly up”, which reinforced by weak fundamentals (BofA economists downgraded their global growth forecasts again last week following a worsening projection by the IMF earlier in May), means that “the risk is getting forced into chasing a reflexive bubble in a late-stage bear-market rally.”
The liquidity easing provided by policymakers is likely helping to create a disconnect between fundamentals and asset prices, as investors are forced deeper into the risk spectrum. The staggering differential in performance between the market leaders (that have been perceived to be high quality stocks) and the rest of the market, suggests ‘beaten down’ names have plenty of upside room if markets continue marching higher.
Yet refusing to capitulate and join the momentum-chasing crowd (for now), Bowler observes that “markets are able to overshoot historical bear-rally peaks highlights the strength of the post-GFC learned response to ignore fundamentals and not fight policy makers.” However, as he cautions, “hoping that either fundamentals will improve at record speed, or that they simply don’t matter is a real risk, given markets’ inability to decouple from recessions in the last 90 years.”
Hence, in his view the key to trading these markets is risk mitigation – “hedging the pain trade without fully capitulating to the “this time is different” narrative.” To do this, one needs to find the cheapest sources of asymmetry, as despite vols coming down near record speed in this wave of optimism, options purchased outright are still not cheap.
So how does Bowler propose hedging the continued pain trade meltup? Below he lists some of the cheaper hedges that he was encountered in recent weeks:
Too early to own upside in ‘Covid-19’ losers; rent instead
To start, Bowler recommends that investors use options to rent (“rather than own”) upside on the most beaten-down stocks. From a vol perspective, both volatility and upside skew remain elevated on average across single stocks . Hence, we prefer screening for call spread candidates on stocks that are perceived as being ‘Covid-19 losers’, with relatively lower vol, and flat call skew.
Screen for cheap call spreads on beaten-down S&P stocks
Among names in the S&P with liquid option markets (avg. daily notional options volume over the past one month in excess of $5mn), we narrow down the universe based on:
Beaten-down industries: Among the 64 industries in the S&P 500, we select only names that belong to industries with the worst performance since 19-Feb (when the S&P peaked). Specifically, we adjust industries’ performance by the trailing 3m realized vol as of 19-Feb, and identify those industries where the vol-adjusted performance is less than or equal to -25.0 (bottom quartile of vol-adjusted performance across all industries).
Benign long vol carry: We select only names where the 1yr %-ile of the 2m ATMf implied vs. 10-day realized vol ratio is less than 25% (quartile with the best carry).
For the resulting subset of names that satisfy the criteria set above, we rank based on the average of the following:
Flat call skew: Names with the lowest 1yr %-ile of call skew, as measured by the 5-day moving average of the implied vol spread between 2m ATMf and 25d call implied vol (normalized by 2m ATMf implied vol).
Beaten down names: Names that suffered the worst vol-adjusted performance since 19-Feb (the volatility measure used to adjust performance is the 3m trailing realized vol as of 19-Feb).
Names in Table 2 are ordered according to their ranking across ‘flat call skew’ and ‘vol-adjusted performance’ (the two rightmost columns in the table). The top five candidates to buy call spreads on are Delta Air Lines (DAL), Wells Fargo (WFC), United Airlines (UAL), MGM Resorts International (MGM), and Aflac (AFL).
* * *
Hedge the “pain trade” for almost zero-cost with VIX put ratios
As Bowler noted on previous occasions, the VIX has been decaying at a particularly rapid pace relative to history following its March 2020 peak. This mean reversion of volatility has only gained steam in recent days, as seen from Chart 10, with the VIX now trading between levels implied by the fastest (1987 crash) and (the average of the) 5-fastest vol retracements witnessed since 1986. BofA argues that this rapid vol decay as the flip side of a similarly aggressive equity market rally – one that has overshot historical bear-rally analogs and highlights the strength of the post-GFC learned response to ignore fundamentals and not fight policy makers.
Bowler then focuses on how to hedge the “pain trade” of higher equities/lower vol using VIX put structures with low upfront premium and small, defined max loss in a secondary vol shock. To this end, VIX put ratios look interesting, for example the VIX Jul 26/23 1×2 put ratio (+1x 26, -2x 23), which costs ~0.1v (ref. 30.5 on the Jul VIX future), as:
The trade is profitable at July expiry if the VIX settles between 20 and 26, and achieves its max payout of 3v at the midpoint of what the fastest and 5-fastest decay paths in Chart 10 imply (i.e., [29+17]/2=23, see Chart 11 for the expiry P&L).
If VIX futures remain sticky near current levels (and in line with the 5-fastest historical decays), the passage of time should benefit the trade. For example, the same structure for June expiry costs ~0.45v today (at mids), with the June VIX future at 29.70, illustrating the potential positive carry if the status quo persists.
In a secondary vol spike, losses are limited to the low upfront premium of 0.1v.
The risk to the trade is a 1987-style vol crush, taking the VIX to 17 by July expiry. However, Bowler remains skeptical that volatility in a severe fundamental shock like today’s can sustain the pace of decay seen in the highly technical 1987 crash.
Cheap hedges for a policy-fueled pain trade higher in US equities
As Bowler reminds us, “it was only three months ago that US assets were delivering one of their most impressive concurrent rallies in recorded history, with an average annualized Sharpe of 4.23 at the time, in the 98th percentile since 1982.” Much has obviously changed in the last three months, but the core thesis is still surprisingly valid today and helps explain the strong rally in US equities since the March bottom.
The BofA strategist rationalized then that the remarkable performance was mostly due to (i) an asymmetrically dovish Fed (arguably more so today, particularly relative to other CBs and governments), and (ii) the relative strength of the US economy (still true today and likely to remain so barring a second virus wave, due to less severe lockdowns). Breaking this dynamic required a rebound in global growth or an idiosyncratic event in the US, neither of which has happened.
The crucial common thread that has allowed these themes to persist has been the ability for the US to deliver a much larger (monetary and fiscal) stimulus package, making its financial market again the beneficiary of the world’s flows (the US was the most and only overweight region in the May Fund Manager Survey). However, this also means that continued outperformance of US equities likely requires continued CB support. A major risk therefore, Bowler warns, “is the formation of a US equity bubble as fundamentals take a backseat to investors’ need to allocate capital to what’s arguably the safest risk asset left.”
To get cheap, risk-limited exposure to a policy-fueled melt-up in US equities, BofA recommended two weeks ago QQQ calls contingent on 10Y yields not rising. That trade still works as bond/equity correlation remains near its most negative since 2012 (Chart 16) and the narrative around yield curve control (which may add downward pressure to yields) is gaining strength. A more vanilla trade in the same spirit is to partially fund QQQ calls by selling TLT puts, taking advantage of the recent drop in the QQQ/TLT vol ratio to its 2-year average (Chart 17).
Trade #1: Buy QQQ Sep 240 calls (104.8%) contingent on 10Y CMS < 70bps for 1.58% (55% disc. to vanilla, ref. 229.04 & 0.71% fwd)
Trade #2: Buy $1 notional of QQQ Sep 240 calls, sell $1 notional of TLT Sep 155 calls for ~1.8% (ref. 229.04 & 163.33)
* * *
Hedging Asian risks
Finally, Bowler analyzes recent developments and dynamics in the Asia autocalls market to flag vol dynamics that re-enable one of his favorite tail hedges (e.g. for investors wanting to hedge a substantial escalation of political tensions in Hong Kong). The autocall market in Asia has slowed down sharply amid the crisis. In April, only US$1.9 Bn notional of Korean autocalls were issued; down 71% from pre-crisis (Chart 22). At the same time, index-linked Uridashi issuance in Japan fell 81%. BofA highlights the following:
Here, issuance is expected to remain low in May-Jun as many existing autocallables look unlikely to knock out. A majority of notes in Korea depend on the 6-month performance of the SX5E, which is currently -19% (typically, autocalls require a 6-month performance better than -10% in order to knock out). Low knock-out rates tend to limit new issuance as old notes would otherwise get rolled into new ones. Baskets that do not include SX5E (in April, ~25% of new issuance), however, may start knocking out as the worst 6-month performers, HSCEI or KOSPI2 – down 10% and -9%, respectively – are close to the knock-out barriers.
Long-dated HSCEI vols coming lower while Nikkei vols have been supported. HSCEI Dec-21 fixed strike put vols (strike close to 80%) are gradually normalising, having retraced ~75% of the March spike, trading ~3% above pre-crisis levels. The corresponding Nikkei vols have been more supported recently, trading ~5% above pre-crisis levels and close to unchanged since the end of March (Chart 28).
Rallying markets should keep vols supported in the near term. The Nikkei and the HSCEI are at similar distances from their respective peak vegas (peaks are -6% and -7% away, respectively; see Table 4). The relative proximity to peak vega creates an autocall-linked vol supply/demand asymmetry as 10% spot declines barely changes the outstanding vega while 10% rallies would decrease(*) vega by US$26 Mn and US$13 Mn, respectively, for Nikkei and HSCEI (Charts 23 and 24).
Tail hedge on HSCEI in case the Hong Kong tensions escalate
Risks in Hong Kong could rise further in the coming months; especially in case the US considers withdrawing the special status of Hong Kong that treats it differently from mainland China on trade, commerce and other areas. While such a withdrawal has been discussed for a while now, the recently souring relations between the US and China together with US lawmakers last year passing the Hong Kong Human Rights and Democracy Act of 2019, make these risks higher, in our view. Indeed, US Secretary of State, Mike Pompeo, said on Friday last week that bypassing HK’s LegCo “would be a death knell for the high degree of autonomy” (HK earns the special status as it maintains sufficient autonomy under the “one country, two systems” framework).
While tail hedges are not the “screaming buy” they were pre-crisis, long-dated HSCEI put vols have retraced a considerable amount of the March spike (Chart 28). Investors worried about substantial issues in Hong Kong in the months ahead should consider shorting HSCEI Dec-21 1×3 put ratios. Long 3x 7,000 strike and short 1x of the 9,200 strike costs HKD 52 (indic. ~0.5% of spot; vols 28.3/22.4, -7% delta, spot ref: 9,595) and could gain >10-to-1 in case of a sharp sell-off (e.g. ~25% drawdown or worse).
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Since the killing of George Floyd by Minneapolis police officer Derek Chauvin—assisted by three murderously indifferent cop buddies—protests over abusive and lethal police conduct have spread across the country and turned destructive. Law-and-order types take that as an opening to shift the topic from the long, troubling history of law enforcement in this country to the excesses of the protesters. Conservative-populist pundit Tucker Carlson put the cherry on top of that tactic when he invoked the word “tyranny” and applied it not to government employees who deploy violence as a tool of first resort when terrorizing communities, but to those who turn violent in response.
“Rioting is a form of tyranny,” Carlson said on his Fox News show. “The strong and the violent oppress the weak and the unarmed. It is oppression.”
Ironically, Carlson illustrated his point with video of people attacking police cruisers of the sort driven by Officers Chauvin, Tou Thao, J Alexander Kueng, and Thomas K. Lane, all of whom had either pinned Floyd or held back concerned passersby attempting to intervene. Subsequently, the Minneapolis Police Department abandoned the besieged Third Precinct building where the four officers worked and it was rapidly set ablaze by an angry crowd. None of that seems like “tyranny” so much as it looks like violent pushback from members of the public tired of being tyrannized by abusive government enforcers who have a reputation for specifically targeting African Americans. It more closely resembled the 1854 attempted storming of the federal courthouse in Boston to free escaped slave Anthony Burns—during which a U.S. marshal was killed—than it did an exercise in oppression.
That’s not to say all, or even the majority, of the crowd’s ire in Minneapolis and elsewhere has been focused on cop cars and government buildings. Grocery stores have been torched, pawn shops smashed, pharmacies looted, private cars and residential buildings destroyed. These all represent significant investments and, often, needed sources of income for their owners. None of those owners had anything to do with the killing of George Floyd, and many of them are horrified by the incident and support the protests.
But protests aren’t directed by mass minds, and their participants often have conflicting priorities and agendas. Some of the more violent rioters are opportunists, often traveling from elsewhere with their own missions.
“People from all corners of the country representing a patchwork of ideologies—some extreme—have increasingly turned up as the protests have grown in size and level of violence,” reports the Minneapolis Star-Tribune. “Hennepin County jail logs showed arrests of people coming from Michigan, Missouri, Illinois and Florida. One suspect from Alaska had bragged online of coming to the protest with Molotov cocktails.”
In response to the violence, some protesters have stepped in to protect businesses against others who are less discriminating in their anger, or who just want to steal and smash.
That hasn’t been enough, though. Shopkeepers and property owners—many of them part of communities that have been targeted by the police—have had to take matters into their own hands to protect what belongs to them. They have every right to do so, though it hasn’t been enough to prevent widespread damage and loss.
When the local hotheads and riot tourists are done doing their worst, they’ll leave in their wake damaged neighborhoods with fewer jobs, businesses, and opportunities for buying and selling goods and services. Stores economically hobbled by the pandemic lockdowns and by voluntary decisions regarding social distancing and tighter family budgets will be less likely to rebuild than they might be in normal times.
As a result, communities protesting abusive police conduct and racist policing will be even more dependent on the government that employs those police. That will deprive them of a measure of the leverage they need to force changes in the way the powers-that-be govern and enforce their will. That’s a shame, because there’s a real problem in Minneapolis and elsewhere with the spiderweb of laws in which we’re ensnared and the selective ways in which they are enforced.
“Black people were 8.7 times more likely than white people to be arrested for a low-level offense—any offense with a fine of $3,000 or less and/or a year or less in jail,” the American Civil Liberties Union (ACLU) of Minnesota found in 2015. “Native Americans were 8.6 times more likely than white people to be arrested for such offenses.”
The ACLU attributed the problem to both racial disparities and overcriminalization. For starters, there are too many bullshit excuses for hassling people; 70 percent of the low-level charges described by the ACLU involve such offenses as expired boat registration, no proof of car insurance, selling liquor without a license, littering, disorderly conduct, consuming in public, interfering with pedestrian traffic, loitering with intent to commit a narcotics offense, drug paraphernalia, truancy, and curfew violations. With such excuses in hand, some police officers are then prone to disproportionately wield their power against people they don’t like, such as members of minority groups.
“On the opening day of law school, I always counsel my first-year students never to support a law they are not willing to kill to enforce,” Yale Law School’s Stephen L. Carter wrote in 2014 after New York City cops killed Eric Garner during a confrontation rooted in suspicion that he was illegally selling loose cigarettes. “I remind them that the police go armed to enforce the will of the state, and if you resist, they might kill you.”
Whether death, or injury, or loss of liberty is the final result, the victims of a plague of laws and their enforcement might be anybody; the March killing of Duncan Lemp, who was white, by police in Montgomery County, Maryland excited anger and threats to arrest his family for protesting. But African-Americans notice that an awful lot of the victims of abusive policing look like Breonna Taylor, or Charles Kinsey, or Philando Castile, or George Floyd—black like them, or otherwise members of groups that often get the short end of the stick when it comes to law enforcement.
“Police arrested 40 people for social-distancing violations from March 17 through May 4,” The New York Timesreported last month. “Of those arrested, 35 people were black, four were Hispanic and one was white.” Nobody was killed, fortunately, but some were punched or knocked to the ground. And while the arrests did provoke anger, no violence beyond the arrests themselves resulted.
But everybody has a breaking point.
When aimed at individuals and private property that have nothing to do with governing institutions or law enforcement, riots are certainly destructive, and counterproductive, and flat-out wrong, but they’re not “tyranny,” as Tucker Carlson and company would have it. That word—tyranny—should be reserved for governments that over-govern and over-police their subjects until they elicit rage.
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Since the killing of George Floyd by Minneapolis police officer Derek Chauvin—assisted by three murderously indifferent cop buddies—protests over abusive and lethal police conduct have spread across the country and turned destructive. Law-and-order types take that as an opening to shift the topic from the long, troubling history of law enforcement in this country to the excesses of the protesters. Conservative-populist pundit Tucker Carlson put the cherry on top of that tactic when he invoked the word “tyranny” and applied it not to government employees who deploy violence as a tool of first resort when terrorizing communities, but to those who turn violent in response.
“Rioting is a form of tyranny,” Carlson said on his Fox News show. “The strong and the violent oppress the weak and the unarmed. It is oppression.”
Ironically, Carlson illustrated his point with video of people attacking police cruisers of the sort driven by Officers Chauvin, Tou Thao, J Alexander Kueng, and Thomas K. Lane, all of whom had either pinned Floyd or held back concerned passersby attempting to intervene. Subsequently, the Minneapolis Police Department abandoned the besieged Third Precinct building where the four officers worked and it was rapidly set ablaze by an angry crowd. None of that seems like “tyranny” so much as it looks like violent pushback from members of the public tired of being tyrannized by abusive government enforcers who have a reputation for specifically targeting African Americans. It more closely resembled the 1854 attempted storming of the federal courthouse in Boston to free escaped slave Anthony Burns—during which a U.S. marshal was killed—than it did an exercise in oppression.
That’s not to say all, or even the majority, of the crowd’s ire in Minneapolis and elsewhere has been focused on cop cars and government buildings. Grocery stores have been torched, pawn shops smashed, pharmacies looted, private cars and residential buildings destroyed. These all represent significant investments and, often, needed sources of income for their owners. None of those owners had anything to do with the killing of George Floyd, and many of them are horrified by the incident and support the protests.
But protests aren’t directed by mass minds, and their participants often have conflicting priorities and agendas. Some of the more violent rioters are opportunists, often traveling from elsewhere with their own missions.
“People from all corners of the country representing a patchwork of ideologies—some extreme—have increasingly turned up as the protests have grown in size and level of violence,” reports the Minneapolis Star-Tribune. “Hennepin County jail logs showed arrests of people coming from Michigan, Missouri, Illinois and Florida. One suspect from Alaska had bragged online of coming to the protest with Molotov cocktails.”
In response to the violence, some protesters have stepped in to protect businesses against others who are less discriminating in their anger, or who just want to steal and smash.
That hasn’t been enough, though. Shopkeepers and property owners—many of them part of communities that have been targeted by the police—have had to take matters into their own hands to protect what belongs to them. They have every right to do so, though it hasn’t been enough to prevent widespread damage and loss.
When the local hotheads and riot tourists are done doing their worst, they’ll leave in their wake damaged neighborhoods with fewer jobs, businesses, and opportunities for buying and selling goods and services. Stores economically hobbled by the pandemic lockdowns and by voluntary decisions regarding social distancing and tighter family budgets will be less likely to rebuild than they might be in normal times.
As a result, communities protesting abusive police conduct and racist policing will be even more dependent on the government that employs those police. That will deprive them of a measure of the leverage they need to force changes in the way the powers-that-be govern and enforce their will. That’s a shame, because there’s a real problem in Minneapolis and elsewhere with the spiderweb of laws in which we’re ensnared and the selective ways in which they are enforced.
“Black people were 8.7 times more likely than white people to be arrested for a low-level offense—any offense with a fine of $3,000 or less and/or a year or less in jail,” the American Civil Liberties Union (ACLU) of Minnesota found in 2015. “Native Americans were 8.6 times more likely than white people to be arrested for such offenses.”
The ACLU attributed the problem to both racial disparities and overcriminalization. For starters, there are too many bullshit excuses for hassling people; 70 percent of the low-level charges described by the ACLU involve such offenses as expired boat registration, no proof of car insurance, selling liquor without a license, littering, disorderly conduct, consuming in public, interfering with pedestrian traffic, loitering with intent to commit a narcotics offense, drug paraphernalia, truancy, and curfew violations. With such excuses in hand, some police officers are then prone to disproportionately wield their power against people they don’t like, such as members of minority groups.
“On the opening day of law school, I always counsel my first-year students never to support a law they are not willing to kill to enforce,” Yale Law School’s Stephen L. Carter wrote in 2014 after New York City cops killed Eric Garner during a confrontation rooted in suspicion that he was illegally selling loose cigarettes. “I remind them that the police go armed to enforce the will of the state, and if you resist, they might kill you.”
Whether death, or injury, or loss of liberty is the final result, the victims of a plague of laws and their enforcement might be anybody; the March killing of Duncan Lemp, who was white, by police in Montgomery County, Maryland excited anger and threats to arrest his family for protesting. But African-Americans notice that an awful lot of the victims of abusive policing look like Breonna Taylor, or Charles Kinsey, or Philando Castile, or George Floyd—black like them, or otherwise members of groups that often get the short end of the stick when it comes to law enforcement.
“Police arrested 40 people for social-distancing violations from March 17 through May 4,” The New York Timesreported last month. “Of those arrested, 35 people were black, four were Hispanic and one was white.” Nobody was killed, fortunately, but some were punched or knocked to the ground. And while the arrests did provoke anger, no violence beyond the arrests themselves resulted.
But everybody has a breaking point.
When aimed at individuals and private property that have nothing to do with governing institutions or law enforcement, riots are certainly destructive, and counterproductive, and flat-out wrong, but they’re not “tyranny,” as Tucker Carlson and company would have it. That word—tyranny—should be reserved for governments that over-govern and over-police their subjects until they elicit rage.
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What happens when media outlets are held legally liable for defamatory comments visitors post to their Facebook pages? Australians (and the rest of us) may soon find out. The Court of Appeal for New South Wales has just dismissed an attempt by several Australian media outlets to overturn a 2019 ruling that they could be held liable for Facebook comments about Dylan Voller.
In 2016, a television program aired footage of Voller shackled in a restraining chair. The coverage led to a national outrage about the mistreatment of youth in Australian detention systems. Voller then sued some of the media outlets that covered him—not because the news reports defamed him, but because other people writing on the outlets’ Facebook pages were accusing him of having committed various crimes.
Australian courts have not yet ruled on whether these comments defamed Voller. This fight is about whether media outlets could even be sued for Facebook comments.
The outlets argue that they’re not the “publishers” of what people say on Facebook and, in fact, that Facebook does not let them preemptively stop individual readers from posting comments on their page. They do have the option to delete, hide, or report individual comments, but only after they’ve been posted. Facebook comments are not like letters to the editor that they can choose whether or not to run.
But the fact that these outlets have the ability to delete comments after the fact was enough for Judge John Basten to declare them publishers: “They facilitated the posting of comments on articles published in their newspapers and had sufficient control over the platform to be able to delete postings when they became aware that they were defamatory.” Based on that logic, the media outlets “facilitated” the posting of comments simply by sharing the articles on Facebook.
Another judge suggested that a potential solution would be to use filtering tools that recognize certain trigger words and hide those comments automatically. This “solution” means the media would have to censor content on the basis of certain words appearing in the comment and not because the comment itself was defamatory.
If this ruling stands, it’s going to force Australian media outlets to monitor all comments and beef up their social media teams at a time when they’re having to lay off staff and even shut down newspapers.
“It’s a big challenge to the business model of publishers, because it means there is a greater risk any time you create content which is in any way controversial,” the Australian defamation lawyer Michael Douglas toldThe Wall Street Journal. “There is a risk that users will write something objectionable, which will open up the entity behind the account to being sued for defamation.” The Guardianreports that the media outlets are thinking of asking Australia’s Supreme Court to consider the case.
Even if media outlets are able to bolster their social media monitoring presence, they’ll be asked to make snap decisions on what’s defamatory and respond immediately. When media outlets act as publishers and are concerned with possible libel or defamation within news stories, these pieces typically go through several editors (and sometimes even lawyers) before they are published. Sometimes the outlets get sued anyway, and sometimes their internal analysis turns out to be wrong. The most logical result of this ruling is that outlets will delete any comment that says anything critical about anybody in a story or report they’ve shared on Facebook, regardless of whether or not it’s actually defamatory, because they can’t prereview them. Who can afford that level of risk?
This is precisely why the attacks on Section 230 of America’s Communications Decency Act are so extremely misguided. If you hold social media platforms and/or media outlets legally liable for commenters, it’s not going to lead to some sort of politically neutral or “unbiased” moderation that protects unpopular opinions from getting deleted. It will lead to much more censorship. It will probably kill off some comment forums altogether.
Even if these reckless attacks on Section 230 fail, what’s happening in Australia can still affect Americans. Countries across the world have been aggressively trying to force websites, search engines, and social media platforms to censor content in a way that crosses virtual borders and affects what people in other nations can see. Last year the European Court of Justice ordered that Facebook must censor any comments posted from anywhere in the world that spoke critically of an Austrian Green Party politician. Canada’s Supreme Court has ruled that when Google is forced to remove a link from search results (in this case because the page’s content violates copyright laws), Canada has the authority to make this order global.
The European Court of Justice has applied Austria’s defamation laws to speech that would be protected by the First Amendment here in the United States. Many Western countries have strong free speech protections, but they often don’t go as far as America’s. The threat to the First Amendment here isn’t coming from private platforms censoring speech because of political bias, but by governments attempting to force their censorship rules worldwide.
This ruling in Australia is bad for the media, but it’s even worse for members of the public. They’re the ones who’ll get censored.
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While many have condemned Antifa and similar groups for destroying Minneapolis and other cities, Minneapolis city council member for Ward 5 (and son of the Minnesota Attorney General Keith Ellison) Jeremiah Ellison tweeted Sunday that he is not among them. Indeed, he is declaring his support for Antifa. Some of us have long opposed Antifa as a vehemently anti-free speech group. Ellison does not seem to include free speech among his priorities for voters in Ward 5.
Ellison tweeted:
“I hereby declare, officially, my support for ANTIFA,” Ellison said. “Unless someone can prove to me ANTIFA is behind the burning of black and immigrant owned businesses in my ward, I’ll keep focusing on stopping the white power terrorist THE ARE ACTUALLY ATTACKING US!”
I hereby declare, officially, my support for ANTIFA
Unless someone can prove to me ANTIFA is behind the burning of black and immigrant owned businesses in my ward, I’ll keep focusing on stopping the white power terrorist THE ARE ACTUALLY ATTACKING US! https://t.co/m6jxtDYmTi
I have opposed the President’s declaration that Antifa will be designated a terrorist organization. However, it is baffling to see a city council member embracing this violent group as his own city is burned and looted.
via ZeroHedge News https://ift.tt/3cq6yRL Tyler Durden
Watch Live: White House Press Secretary Holds First Briefing After Weekend Of Chaos Tyler Durden
Mon, 06/01/2020 – 13:55
Update (1425ET): The press conference has begun (20 mins late, as per usual) and the headlines (and tweets) are rolling in:
GOVERNORS MUST ACT, DEPLOY NATIONAL GUARD AS FITS, MCENANY SAYS
TRUMP IS DEMANDING ACTION TO PROTECT CITIZENS, MCENANY SAYS
WHITE HOUSE SAYS THERE WILL BE ADDITIONAL ‘FEDERAL ASSETS’ DEPLOYED ACROSS NATION IN RESPONSE TO VIOLENT PROTESTS
‘WE’RE LOOKING AT EVERY TOOL IN THE FEDERAL TOOLKIT’
WHITE HOUSE SAYS JUSTICE DEPARTMENT HAS ‘AMPLE EVIDENCE’ THAT ANTIFA BEHIND VIOLENCE AT PROTESTS
UTILIZING NATIONAL GUARD WAS TOPIC OF CALL WITH GOVERNORS
Asked what the president is doing about the death of George Floyd, @PressSec replies there’s a federal civil rights investigation” but can’t allow antifa to carry out violence in its wake.
Trump’s tweets purportedly calling for police to embrace more violent tactics have aggravated his critics, while many of his supporters largely stood by him as officials who started the weekend blaming white supremacists and “foreign influence” for the devastation in their cities eventually pleaded with “anarchists” and “violent hooligans” commingling with “peaceful demonstrators” for most of the violence.
JUST IN: President Trump unloads on the nation’s governors on a call, calls on them to step up enforcement: “You have to dominate, if you don’t dominate you’re wasting your time. They’re going to run over you, you’re going to look like a bunch of jerks. You have to dominate.”
“Go Big”: BET’s Billionaire Founder Calls For $14 Trillion In Reparations For Slavery Tyler Durden
Mon, 06/01/2020 – 13:45
At a moment major American cities are loosing hundreds of millions by the day in rampant destruction during nightly George Floyd protests, the man celebrated as the nation’s first black billionaire has called for trillions in ‘reparations’ for slavery.
“Wealth transfer is what’s needed,” 74-year old Robert Johnson, founder of Black Entertainment Television (BET) said in a CNBC interview Monday. “Think about this. Since 200-plus-years or so of slavery, labor taken with no compensation, is a wealth transfer. Denial of access to education, which is a primary driver of accumulation of income and wealth, is a wealth transfer.”
Though no longer on the Forbes billionaires list following the 2001 sale of BET to Viacom for a whopping nearly $3 billion, Johnson is currently estimated to be worth over $600 million. Perhaps this is why he wants to “go big” in terms of a figure: he said the US federal government should pay out $14 trillion in reparations, or “damages that are owed” as he put it.
BET founder Robert Johnson with then President-elect Trump in 2016, via AP.
He described what would in effect be the “affirmative action program of all time”:
“Damages is a normal factor in a capitalist society for when you have been deprived for certain rights,” he said. “If this money goes into pockets like the [coronavirus] stimulus checks… that money is going to return back to the economy” in the form of consumption. There will also be more black-owned businesses, he added.
Though not the first time he’s issued a provocative call for massive reparations for the historic evil of slavery in America, the timing comes at a moment events rapidly escalated from ‘peaceful protests’ last week to full-on riots and mass mayhem, where the purpose among some seems to be to unleash as much destruction and chaos as possible as fast as can be accomplished.
“Now is the time to go big.” BET founder Robert Johnson calls for “full and complete” reparations for descendants of slaves. pic.twitter.com/6CoR51OIXL
We doubt federal authorities, or the majority of Congressional leaders, will seriously consider handing out ‘reparations payments’ anytime soon, considering buildings and entire city streets are on fire, as large-scale looting continues in a surge of “everything’s free! mentality, to the frustration of many activists.
Even national monuments in D.C. are reportedly under threat by vandalizing mobs. And in some cities, both black-owned businesses as well as even civil rights-related sites and museums have not escaped unscathed.
Proof that the looters don’t care about racial justice. They just vandalized the International Civil Rights Museum in Greensboro, NC. This is where the “Greensboro 4” started the desegregation movement in NC with a peaceful sit-in protest. See: https://t.co/nWaBg7aDZLpic.twitter.com/MbuMBcZDnB
And as a case in point of the contradictory and chaotic aims of the street demonstrations, a local NBC affiliate confirmed that in Greensboro, North Carolina the International Civil Rights Center and Museum was vandalized.
Meanwhile BET founder Johnson stressed further in the Monday interview:
“I’m talking about cash. We are a society based on wealth. That’s the foundation of capitalism.”
This also as following the first round of coronavirus stimulus check payments paid out directly to American by the IRS, a Democratic Congressional push for further and larger payments has been stalled.
Some analysts have theorized that if the helicopter money dries up, people will further take to the streets. That could be a key element behind some of the chaotic mayhem being unleashed now.
via ZeroHedge News https://ift.tt/2TU7cR9 Tyler Durden
On Friday afternoon, Federal Reserve Chairman Jerome Powell did a Q&A session with Princeton economist Alan Blinder. Powell admitted that the central bank had “crossed a lot of red lines,” but insisted he was comfortable with the actions given “this is that situation in which you do that, and you figure it out afterward.”
In his podcast, Peter Schiff called it the Nancy Pelosi version of monetary policy. “We need to print the money to see where it goes.”
Binder asked Powell if there is any limit to how much the Fed’s balance sheet can grow. Powell said he wasn’t concerned and the balance sheet has a long way to go. Peter said if Powell really believes there is no limit to the size of the balance sheet — that is a very scary thought. It means there is no limit to the depths to which the dollar can plunge.
That’s all Powell is doing is inflation. He is inflating the money supply. That is the definition of inflation. Expand the money supply. That is what Powell is doing.”
But Powell is not concerned. He’s worried about falling prices.
So, the furthest thing from Powell’s mind is a problem with consumer prices going up. … He thinks he can keep on inflating and there’s nothing to worry about because prices aren’t going to rise. And that is just absurd. I mean, they’re already rising. There are plenty of prices that are going up.”
Of course, there are some prices that have gone down. But they’re not going to stay down. When you have a demand collapse as we’ve seen with the COVID-19 lockdowns, you will naturally have some contraction in prices. But as inventories deplete and production capacity falls, the glut of merchandise disappears and prices readjust back upward.
That’s when the effect of all the new money is going to be hitting consumer prices. That lag, you’re going to see all this money arriving just as all the goods have diminished, the supply of goods to buy. So, the fact that Powell is not at all worried about inflation despite the fact that he’s creating so much of it — that’s why you should be buying gold and silver.”
As far as “crossing red lines,” Peter said Powell’s overall message was basically to act blindly, hope for the best, and then see what happens. He said it reminded him of Nancy Pelosi’s famous words, “We’ve got to pass the bill to see what’s in it.”
That’s basically what Powell is doing with monetary policy. We’ll just print the money, and then we’ll see where it goes. Who cares? Because things are just so bad that we might as well just do this.”
Peter said Powell is basically treating the economy like a terminally ill patient who is going to die anyway. Just try anything.
Things are so bad that it doesn’t even matter if the cure kills us because we’re going to die anyway.”
Powell continued to insist the Fed wasn’t planning on negative interest rates. Peter said it doesn’t matter what they’re planning on; it’s all about what they’re going to do.
I think if the market demands it, then the Fed will supply it.”
Powell said he was reluctant to try negative rates because there is no proof they work.
Well, there’s no proof that zero works either, and we’re at zero.”
In fact, Powell is sending mixed messages because he’s already told us he’s just going to figure it out after the fact. Why demand proof for negative rates?
So, I don’t believe Powell when he says he’s not going to do something just because there’s no proof that it works. I mean, the reason that central banks do this is not because it works. It’s because they’re desperate, and they know if they don’t do it, there’s going to be a crisis. So, they do it even if that means there’s a bigger crisis later on.”
Peter said the real question is the efficacy of central bank policy to begin with. If you cut to zero and you still need more stimulus, “maybe what you’re doing ain’t working.”
Maybe the fact that you had to bring rates down to zero, and you still have a problem, means that cutting rates is not the solution to that problem. In fact, maybe it’s the rate cuts that are perpetuating the problem. Maybe we wouldn’t have a problem but for rates going down. In fact, had the Fed let rates go up, that would have actually solved the problem. Maybe it would have been a painful cure, but it would have worked. But just giving a drug addict more drugs in ever-increasing doses, which is all the Fed is doing, that’s never going to work.”
In this podcast, Peter also talked about the rally in gold and silver, economic data, Mark Cuban’s view on printing money, Goldman Sachs and bitcoin, and Trump’s war of words with China.
via ZeroHedge News https://ift.tt/3gLoCcg Tyler Durden
“Most Of You Are Weak”: Trump Slams Governors Following Violent Weekend Riots Tyler Durden
Mon, 06/01/2020 – 13:05
President Trump slammed governors in Democrat-run states as “weak,” after nationwide protests over the death of George Floyd turned into violent riots.
“Most of you are weak,” Trump told the nation’s governors during a Monday morning phone call – while Attorney General Bill Barr, who was on the call, advised them to “dominate” the situation and “take back your streets,” according to AP, citing multiple sources familiar with the call.
The president told the governors they were making themselves “look like fools” for not calling up more of the National Guard as a show for force on city streets.
Attorney General Bill Barr, who was also on the call, told governors that a joint terrorist task force would be used to track the agitators and urged local officials to “dominate” the streets and control, not react to crowds, and urged them to “go after troublemakers.”
Trump’s comments come as images of smouldering cities followed a night of escalating violence, looting and clashes with the police – for which he has come under increasing pressure from both sides to deliver a formal address. So far, Trump has responded with a flurry of tweets over the weekend blaming the demonstrators, the press, and slamming former VP Joe Biden and his staff for donating money to bail out rioters in Minneapolis.
“These were the people that trashed Seattle years ago. Who’s paying for these people. I was appalled that 13 of Joe Biden’s staff were donating money to bail people out in Minneapolis. They should have stayed in jail until this is over (and beyond).” @newtgingrich@foxandfriends
The Lamestream Media is doing everything within their power to foment hatred and anarchy. As long as everybody understands what they are doing, that they are FAKE NEWS and truly bad people with a sick agenda, we can easily work through them to GREATNESS!
According to AP, “Trump’s advisers discussed the prospect of an Oval Office address in an attempt to ease tensions. The notion was quickly scrapped for lack of policy proposals and the president’s own seeming disinterest in delivering a message of unity.”
During Monday’s call, Trump told the governors: “You’ve got to arrest people, you have to track people, you have to put them in jail for 10 years and you’ll never see this stuff again.“
The president also urged governors to deploy the National Guard, which he commended for keeping the peace in Minneapolis Sunday night – suggesting that the same should be done in New York, Los Angeles and Philadelphia.
via ZeroHedge News https://ift.tt/2Mpg6BL Tyler Durden
