Bloggers Beware; Government-Criticizing Chinese Newspaper Editor Hacked With Cleaver

Kevin Lau, the 49-year-old former editor of the respected Ming Pao newspaper (who was unexpectedly replaced last month by journalist with no experience) following his reporting on human rights abuses in China is in critical condition after being attacked with a meat-cleaver. As The Daily Mail reports, slashed three times by a man in a crash helmet in a residential neighbourhood who then fled on a motorbike, police said. His sudden dismissal sparked protests across the city over freedom of the press as the move raised fears among journalists that the newspaper's owners were moving to curb aggressive reporting on human rights and corruption in China. It appears, given this attack, they were right.


Via The Daily Mail,

The former editor of a Hong Kong newspaper is in critical condition after being attacked with a meat clever earlier today.

Kevin Lau was slashed three times by a man in a crash helmet in a residential neighbourhood who then fled on a motorbike, police said.

Lau was hospitalised in critical condition with slashes in his back and legs, said Kwan King-pan, acting superintendent of Hong Kong Police.

Police are searching for two men in connection with the attack.

'One of them alighted from the motorcycle and used a chopper to attack the victim,' police spokesman Simon Kwan told reporters.

'He suffered three wounds, one in his back and two in his legs,' Mr Kwan said, adding that the back wound was deep.

Police did not announce any motive for the attack and appealed to the public for information. 

Lau was replaced last month after criticising the Chinese government over human right's abuses

Lau, 49, was named editor of the respected Ming Pao newspaper in 2012 but was replaced last month by a Malaysian journalist with no local experience.

Lau was transferred to the parent company's electronic publishing unit.

The move raised fears among journalists that the newspaper's owners were moving to curb aggressive reporting on human rights and corruption in China.

His sudden dismissal sparked protests across the city over freedom of the press.

The Hong Kong Journalists Association said it was shocked and angered by the attack, calling it a 'serious provocation to Hong Kong press freedom.'

Speaking outside hospital, Hong Kong leader Leung Chun-ying said: 'We strongly condemn this savage act.'

Freedom of speech and the press is a growing concern in the semi-autonomous Chinese city, where such rights are guaranteed by its mini-constitution.

On Sunday, thousands of people took to the streets to protest Lau's dismissal, the ousting of an outspoken radio host, and reports that Beijing-backed businesses were pulling ads from some newspapers over editorial stances.


via Zero Hedge Tyler Durden

Harvard Supercomputer “Abused” To Mine Dogecoin

Harvard’s Research Computing department’s 14,000-core supercomputer “Odyssey” has been moonlighting as a virtual currency miner. As The Register reports, a Harvard student has had their access credentials revoked after the discovery that the Odyssey cluster had been scheduled for use in a Dogecoin mining operation. Harvard is not happy: “Any participation in ‘Klondike’ style digital mining operations or contests for profit requiring Harvard owned assets to examine digital currency key strength and length are strictly prohibited for fairly obvious reasons.”

That someone would seek to employ a supercomputer cluster in a mining operation is hardly a surprise, given the current market for Bitcoin and the various altcoin formats.

As The Crimson reports,

A “dogecoin” (bitcoin derivative) mining operation had been set up on the Odyssey cluster consuming significant resources in order to participate in a mining contest,” wrote Assistant Dean for Research Computing James A. Cuff, in an email to the FAS Research Computing Users Group last Friday.

Cuff went on to write that research computing resources cannot be used for “personal or private gain or any non-research related activity.” He wrote that the person involved in the mining operation no longer has access to “any and all research computing facilities on a fully permanent basis.”

The Odyssey cluster is a bunch of computers networked together in a way that allows fast data transfer between processors. Although each individual processor isn’t much more powerful than your personal laptop, having many processors together can be a huge benefit when doing scientific computing,”

Or mining virtual currencies…


via Zero Hedge Tyler Durden

House-Approved Cell Phone Unlocking Bill Doesn’t Permit Bulk Unlocking

Consumers earned a small
victory yesterday when the House of Representatives approved a bill
that loosens restrictions on cellphone unlocking (modifying phones
to work with any carrier after a contract expires). Unfortunately,
the act stops short of allowing businesses to unlock phones.

The House voted 295-114 in favor of Rep. Bob Goodlatte’s (R-VA)
Unlocking Consumer Choice and Wireless Competition Act, which lost
supporters when Goodlatte slipped in a last minute change that “does not
permit the unlocking of cell phones for the purpose of bulk

Derek Khanna, a longtime
of legalizing unlocking
to PC World why this addition is

The new wording favors mobile carriers… Phone companies
lobbied to make phone unlocking illegal, and now that the public
has responded with outrage and demanded action the phone companies
lobbyists have rewritten the legislation to go after their
competitors… Many consumers have to rely upon others to unlock
their devices for them; under this text small businesses could not
provide that service.

Electronics resellers should be able to buy phones from
consumers, and after ensuring they’re not stolen, unlock them for
resale… This is a critical part of how the wireless market

Public Knowledge, an intellectual property advocacy group,
retracted its endorsement,
a similar sentiment that the bill “pick[s] winners
and losers between business models.”

Mike Masnick of TechDirt says it’s
“massively problematic” to “suggest that the
unlocker’s motives in unlocking has an impact on …
whether or not it’s legal. And that’s an entirely subjective
distinction when a bill seems to assume motives.”

The Electronic Frontier Foundation
that “unlocking allows re-use, and that means less
electronic waste,” and criticizes the legislation for ignoring the
“collateral damage” caused by preventing the practice.

This bill “was never the first choice of unlocking advocates,”

to The Verge‘s Adi Robertson, because
“instead of permanently legalizing unlocking, it just extended the
exemption, which would need to be reexamined anyways in less than
two years. But it’s been relatively uncontroversial, and so far,
it’s the only piece of legislation to have passed

Although the practice has been uncontroversial elsewhere in the
world, unlocking has been virtually illegal in
the U.S. for years, thanks to the Digital Millennium Copyright

from Hit & Run

PTC revamps ethics rules, ditches citizen involvement

By unanimous vote, the Peachtree City Council approved sweeping changes to its ethics ordinance Feb. 20, including the replacement of a citizen ethics board with an attorney from outside the city who would sit in judgment of specific complaints as a “hearing officer.”

Under the new ordinance, that attorney must have at least five years’ experience and a law practice and residence at least more than 10 miles outside the city limits.

read more

via The Citizen

The Ominous Message in 200 Years of Global Public Finances

Submitted by F.F.Wiley via Cyniconomics blog,

After our recent article showing the history of non-defense budget balances for large, developed countries, some readers wondered how our results might change with defense spending included.

Here’s a new chart showing total budget balances:


fiscal balance with defense

As in the first chart, we started in 1816 with four countries (the U.S., U.K., France and Netherlands) and then added seven more at different points in time, while weighting each country by its GDP. (Click here for data sources and more details.)

New chart, same story

The message is basically the same, regardless of whether you isolate non-defense budget balances as in the earlier chart or look at total balances as above.

That is, current fiscal risks are unlike any the world has ever seen.

Echoing our thoughts from the earlier post:

The [growing deficits of the past 50 years] suggest that we’ve never been in a predicament comparable to today. Essentially, the world’s developed countries are following the same path that’s failed, time and again, in chronically insolvent nations of the developing world.

Look at it this way: the chart shows that we’ve turned the economic development process inside out. Ideally, advanced economies would stick to the disciplined financial practices that helped make them strong between the early-19th and mid-20th centuries, while emerging economies would “catch up” by building similar track records. Instead, advanced economies are catching down and threatening to throw the entire world into the kind of recurring crisis mode to which you’re accustomed if you live in, say, Buenos Aires.

The diminishing ability of wars to explain public finances

The new chart shows more clearly how the purposes of public borrowing have evolved. In the 19th and early-20th centuries, governments borrowed mostly to fund wars. In fact, any military history is incomplete without consideration of warring nations’ access to capital. You can argue that government borrowing not only enables wars, but that the ability to borrow heavily is a major determinant of whether your army wins or loses, more important in many cases than military prowess.

(Niall Ferguson claims exactly this in his bestseller, The Ascent of Money: A Financial History of the World. Are you interested in the Napoleonic Wars, U.S. Civil War and World War 1 – three periods of significant public borrowing as shown in the chart? Ferguson links the ultimate outcomes of each of these wars to the victors’ superior access to government bond investors.)

Fast forward to today, and deficits have broken free of the costs of tanks, bombs and warplanes. Considering current public finances, it’s hard to imagine another widespread war that doesn’t lead to financial mayhem. A surge in military spending would surely end any hopes that large, developed nations won’t eventually be forced into defaults and/or wealth confiscation.

Worse still, it’s looking more and more as though we’re headed for disaster even without a future spike in military spending. The risks of a severe fiscal crisis are obvious in our earlier chart showing non-defense budget balances, and they’re just as apparent with defense spending added back in.

Bonus chart

The chart below separates budget balances into two pieces – the non-defense portion (as in the earlier post) and defense spending. We’ll add more detail in the future, including a country-by-country breakdown of the underlying data.

fiscal balance ex-defense 2


via Zero Hedge Tyler Durden

New map means confusion for some candidates, voters

NAACP hails judge’s decision as ‘historic win-win’; new map creates district to ensure a minority candidate will be elected in Fayette

The switch to district voting for Fayette County Commission and Board of Education elections will prevent about 60 percent of Fayette voters from casting ballots in four local races during the May primary and the November general election.

read more

via The Citizen

U.S. Senator Wants to Ban Bitcoin – To be Followed by Book Burning Ceremonies and Witch Hunts

Before the U.S. gets too far behind the curve on this important topic, I urge the regulators to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.

– Senator Joe Manchin, in his letter calling for a ban on Bitcoin

Whenever you hear a politician say he or she wants to do something to “protect hard-working Americans,” you know this person is so full of shit that whatever proposal being peddled should be treated with extreme skepticism. It’s incredible to me that this sort of infantile and transparently superficial language actually still works on people, but apparently it does.

Seemingly frustrated that the cessation of actives at Mt. Gox hasn’t destroyed Bitcoin, Senator Joe Manchin III is taking matters into his own hands. You know, for your own good. His solution is to “ban” Bitcoin, and he outlined his rationale (if we can call it that) in a fear ridden, garbled letter to a diverse group of power players in D.C., which include Treasury Secretary Jack Lew and Federal Reserve Chairwoman Janet Yellen.

Let’s examine some of the low points in this incredibly desperate and pathetic letter. Mr. Manchin III writes:

By way of background, Bitcoin is a crypto-currency that has gained notoriety in recent months due to its rising exchange value and relation to illegal transactions.  

Um, no not really. It has gained notoriety recently for being accepted at major retailers such as and the fact that its largest exchange has collapsed.

Lie number 1.

Secondly, no currency is more utilized for money laundering than the U.S. dollar and our banking system that actively supports it. If the government was really so concerned about such behavior why did HSBC get off the hook for laundering billions on behalf of Mexican drug cartels with a mere slap on the wrist?

Lie number 2.

That is why more than a handful of countries, and their banking systems, have cautioned against the use of Bitcoin.  Indeed, it has been banned in two different countries—Thailand and China—and South Korea stated that it will not recognize Bitcoin as a legitimate currency.  

Since when are we taking cues from Thailand (a country where you get thrown in jail for insulting the king), or China, a country that censors huge swaths of the internet?

Plus China didn’t ban Bitcoin, and South Korea was making significant BTC investments last I checked.

Lie number 3.

I am most concerned that as Bitcoin is inevitably banned in other countries, Americans will be left holding the bag on a valueless currency.

Well many Americans, including people I know, have likely lost significant BTC at Mt. Gox. Not a single one is calling for a ban on Bitcoin. So perhaps we should listen to the individuals actually affected, rather than some self-righteous political hack.

Lie number 4.

Look we all know what is actually happening here. You are doing your best to protect the parasitic legacy financial system that has done more harm to the U.S. economy than Bitcoin ever could. You are just the latest in a long list of historical opportunists looking to scapegoat ideas that don’t fit into a corrupt status quo you depend on.

Advocating the ban of revolutionary technology is no different from Nazis burning books. We all know what happens next.

His full letter can be found here.

In Liberty,
Michael Krieger

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U.S. Senator Wants to Ban Bitcoin – To be Followed by Book Burning Ceremonies and Witch Hunts originally appeared on A Lightning War for Liberty on February 26, 2014.

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from A Lightning War for Liberty

JCP’s Quarter In Charts: Retailer Generates Least Amount Of Cash Flow In Holiday Quarter In Recent History

Moments ago JCP did what it does best: released results that missed expectations, with Revenues in the traditionally strongest, holiday (Q4) quarter of $3.78 billion below the $3.86 billion expected, and comp sales up 2.0% below the 2.1% expected. Additionally, the company’s profit margin was 28.4%, the second lowest in recent history, and only better than the 23.8% posted a year ago when the company was openly imploding. But the red flag was Free Cash Flow, driven entirely by inventory liquidation, was $246 million: the lowest such amount for the holiday quarter also in history. Whether or not this miss was not quite as bad as a worst case miss could be, whatever that means, is unclear but for now the traditional post-earning squeeze has pushed the stock higher. How long this particular squeeze persists is unclear, but likely depends on the longer-term viability of the company, and recent trends. To determine what these are, here are some charts showing how the company has performed in recent years.

First, here is JCP’s all important Free Cash Flow. While in Q4 JCP generated a little over $200 million in cash, it is the next three quarters that matter, as this is when the company burned the bulk of its cash. As a reference point: last year, in the Q1-Q3 period, JCP burned $3 billion.


JCP better not intend on burning $3 billion this year too. Why? Because as it reported, it expects its liquidity “to be in excess of $2 billion at year-end.” Really? How? Because that inventory build and $2-3 billion cash need will hardly grow on trees.

Next, we look at revenue: while this missed as we noted above, it was the only bright spot in the earnings report – the good news: it wasn’t an all out crash, even if like FCF, it was the lowest revenue for the holiday quarter in recent history.


Next, and perhaps most troubling, was the reason for the company’s subar free cash flow creation: in a nutshell, the company did not sell nearly enough inventory in the quarter. As the following chart shows, JCP liquidated, and thus generated “only” $812 million in inventory cash in the quarter: in prior years this number was always greater than $1 billion. This likely means even greater mark downs in coming quarters as JCP scrambles to dump even staler products.


Last and almost least, was JCP’s profit margin in the quarter. Surprisingly, it was a substantial 28.4%. Why? See the chart above – the company opted to not liquidate stale inventory and pull  margins down even lower. This was “good” for the profit margin, but bad for cash flow creation, and even worse for future quarter margins.

Finally, the cherry on top in the newsflow had nothing to do with JCP per se, but with the SEC: as readers will recall, it was back on September 26 when the company announced on CNBC it would not do a follow on offering only to announce, a few hours later, that it was doing precisely such a follow on equity offering. We were disgusted and appalled. We are more disgusted and appalled by the SEC which has announced the following:


And that, in a nutshell, is all you need to know about our criminal markets.


via Zero Hedge Tyler Durden

Morgan Stanley Underwrites TSLA Convertible Offering Day After 100% Stock Price Upgrade

Tesla has just announced it intends to issue a $1.6 billion convertible note offering "for the development of a "Gigafactory" and a "Gen III" vehicle." While not that unusual – and of course, why not take advantage of low cost financing and a surging momentum in your stock – what we did find at least intriguing was the underwriters included Morgan Stanley. This is the same firm (though we would be very sure that Chinese walls ensured total lack of knowledge) that doubled their price target (from $153 to $320) for TSLA yesterday (following the analyst's now almost clairvoyant questions during the earnings conference call). Paging Henry Blodgett?

Four things jump out at us…

1. During the recent conference call, MS analyst Adam Jonas seems to be advancing the idea of a capital raising for this battery factory on the behalf of Musk, who just agrees with the concept…

Adam Jonas: Elon, the stock price and the results have been obviously performing very well lately. You’ve got some great investment opportunities and some growth opportunities ahead of you, not only in the auto business but also in the non-auto business and the battery business. So I’m just wondering, how are you thinking about being opportunistic and pulling in some fresh capital to help derisk the plan, plan for a force majeure, or to see some of these opportunities that you have.


Elon Musk: Yes, I think that’s a good idea. I agree with that. I think that would be the smart move. We can talk more about that next week with — and also discuss the Gigafactory plans. Unfortunately, I can’t say anything [indiscernible] right now, except that I agree. I think your advice is good.


Adam Jonas: Okay. And I don’t want to follow up [ph] or anything, but as a follow-up to that, I guess, is a — would a capital raising be a prerequisite to launch the Gigafactory? Or is that an understatement?


Elon Musk: I think it’s necessary to have it occur in 3 years. It’s not necessary if we allow that time frame to expand.

2. Morgan Stanley raises their price target for TSLA by over 100%

January 25: Raising our price target to $320 from $153 previously.

We understand the change to our fair valuation of TSLA shares is significant – more than $13bn on a fully diluted share count of 142m.


This magnitude of value attribution is equivalent to an additional $1.7bn of after tax free cash flow by 2020, growing at 5% with a 12% discount rate. A $1.7bn NOPAT number is enormous within the scope of Tesla’s existing business path (our current forecasts call for $0.8bn of net income by 2015 and $2.1bn by 2020).


However, from the perspective of a global auto industry (>100 million annual unit sales and >$2 trillion of revenues by 2020) or a global electric utility industry (0.7 billion households combined in US + Europe + China out of households 1.4 billion globally) it is a tiny number. Our previous forecast of 500k complete TSLA vehicles by 2028 would account for 40bps of global market share.


Successful? Yes. Disruptive? Not really at all.

3. Day after Stock soars $60, Morgan Stanley underwrites a huge convertible note issue for TSLA (implicitly reducing an dilution via the stock ramp).

Tesla announced today an offering of $1.6 billion aggregate principal amount of convertible senior notes in an underwritten registered public offering. Of the total offering, Tesla will offer $800 million aggregate principal amount of convertible senior notes due 2019 and $800 million aggregate principal amount of convertible senior notes due 2021. In addition, Tesla intends to grant the underwriters a 30-day option to purchase up to an additional $120 million in aggregate principal amount of convertible senior notes due 2019 and an additional $120 million in aggregate principal amount of convertible senior notes due 2021, for a total potential offering size of up to $1.84 billion.

Goldman, Sachs & Co., Morgan Stanley, J.P. Morgan and Deutsche Bank Securities are acting as joint book-running managers for the offering.

and 4. In the disclosures, of course, Morgan Stanley admitted it would seek compensation from Tesla (which it did)…

In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from Autoliv, Avis Budget Group Inc, BorgWarner Inc., Dana Holding Corp., Delphi Automotive PLC, Ford Motor Company, General Motors Company, Goodyear Tire & Rubber Company, Hertz Global Holdings Inc, Johnson Controls, Inc., Lear Corporation, Magna International Inc., Tenneco Inc., Tesla Motors Inc., TRW Automotive Holdings Corp.

As long as CNBC (and everyone else in the status quo hugging mainstream media) keeps pumping every word from the sell-side as gospel, this will never end…

While we are sure this is a mere coincidence and that sell-side research which absolutely cannot pay its own way has learned its lessons, as one smart chap wrote us…

This is exactly the modus operandi of the dot-com analysts: roping retail investors in at higher and higher levels while the companies concerned massively diluted shareholders leading to an implosion… I cant remember a time apart from Dotcom where price targets were jacked up in this way right before a capital raising.


via Zero Hedge Tyler Durden

Brown wants term limits for commission

The Fayette County Commission will vote Thursday on a recommendation to apply term limits to existing and future commissioners.

The restrictions would limit commissioners to serving no more than two consecutive four-year terms. Proposed by Commission Chairman Steve Brown, the restrictions would be made retroactive to those holding office since 2011, which would include Brown and fellow commissioner Allen McCarty.

read more

via The Citizen