Tag: news

Authored by Mark Glennon via WirePoints.com,

Here’s something you don’t see every day: Chicago’s progressive Readeraligned with conservative Breitbart. Both had articles Wednesday slamming the Obama Center to be built in Chicago’s Jackson Park.

And everybody in between, it seems, is upset with the proposed center for one reason or another.

The community organizer has managed to inspire unusual unity:

• Fiscal conservatives worried about our insolvent state object to how some $200 million was quietly appropriated in Illinois’ recently enacted budget for roadways around the center. Federal taxpayers will reimburse Illinois for 80% of that money, which was the subject of our recent Wall Street Journal article.

• Local folks have long objected, claiming the Obama Foundation, which is building the center, isn’t directing enough jobs and benefits towards them. No surprise. When I visited the site a few weeks ago it looked like most of the work was being done by the usual Chicago union white guys. The Nation earlier criticized the absence of some form of community benefits agreement.

• Many University of Chicago graduates, who serve as de facto guardians of the architectural and intellectual standards of the neighborhood, don’t want a scar on the area. Some are behind the federal lawsuit now pending to stop construction.

• Believers of the rule of law say statutes were trampled on to cram authorization through, which is outlined in the legal complaint.

• First Amendment hawks like me object to use of taxpayer money and exceptionally valuable land for what will be a political training camp in part. A First Amendment claim is part of the lawsuit.

• Environmentalists and conservationists were particularly infuriated to see pictures of mature trees being mowed down for the center on land that’s supposed to be permanently dedicated as parkland.

• And everybody just seems fed up with all the lying, including the federal judge. It was originally pitched as privately funded, presidential library, but it’s neither. Recently, the city got the judge to allow it to continue mowing down trees on the parkland site based on the city’s claims that its work was separate from the center. The plaintiffs in the lawsuit filed a motion saying the city basically lied about that. Before that motion would be heard, the city turned tail and agreed to halt its work.

The judge, apparently unhappy with the city’s conduct, said Thursday he was “disappointed” with what it had represented to the court, and proceeded to issue an order helping the activists seeking to block the center. According to the Chicago Sun-Times, he set the next court hearing for Oct. 24, which will allow the activists to make a presentation to the judge before the City Council votes on the project — and they can use the discovery process to force the city to reveal information.

That City Council vote will be on a new ordinance that would, among other things, ratify a 99-year lease of the parkland for total rent of $10. The proposed ordinance basically puts lipstick on a pig, as opponents see things.

See the rebuttal to the ordinance below by Herb Caplan, one of the University of Chicago grads behind the lawsuit.

DOES CLAIMING THAT A HUMONGOUS 23 STORY TOWER AND CLUSTERED BUILDINGS TO BE BUILT IN AN HISTORIC PUBLIC PARK WILL BE IN THE PUBLIC INTEREST MAKE IT SO ? – WHO ARE THEY TRYING TO FOOL.

In the face of a lawsuit challenging the legality of everything they have been doing, our soon to be departing Mayor and the City seem to be compulsively unable to see the public trust issues intrinsic to their destructive efforts to sacrifice priceless and irreplaceable dedicated lakefront public park land in the historic Jackson Park. It is telling however, that they have actually, inadvertently, admitted all the allegations of illegal conduct detailed in the Complaint filed against them by their creative efforts to conjure up a new variety of their deceptive bait and switch and shell game tricks.

The key to understanding what the City is now attempting to do is this: Instead of the Obama Center receiving the park land and owning the buildings outright, it will still construct and operate the Center in the public park; but under the new ordinance the City will now technically become “owner” of the intrusive 235 foot, 23 story Obama Center because the Obama Center will immediately transfer its ownership of the Center buildings to the City, BUT the City will immediately lease it back, surprise, to the Center together with the underlying public park land for its private use for 99 years for only $10 bucks. The City wizards invent more magic.

The provisions of proposed new Obama Center ordinance , many laugable, try to patch all all the holes in the old ordiance and give it a new paint job.

1. Instead of approving construction of the originally promised Official NARA administered Presidential Library providing access to all the original documents and records of the former president (like all other Presidential Libraries) as described in the previous ordinance , the “Obama Center” is now to be approved as a so-called “museum” consisting entirely of the valueless personal knicknacks collected over the years by the former president and his wife, and a gathering place for the former president’s political supporters.

2. Instead of an outright City and Park District gift of public property, potentially renewable forever , the proposed new ordinance “drastically” limits the gift , on paper, to just “99 years.”

3. Instead of paying $ 1 dollar for the land, the new ordinance will raise that to an exhorbitant “$ 10 dollars”.

4. Instead of the Park District being authorized by law to collect that hidden tax on the taxpayers of Chicago to pay for the maintenance and repair of the Obama Center facilities, which the City had secretly engineered as an amendment to the pre-existing statute, the new ordinance “claims” the Obama Center , now to be owned by the City, will not receive benefits of that tax , and as the “lessee” will “bear responsibility for maintaining and repairing the Center’s buildings and grounds”. But will it ?

5. The City also has assumed an obligation to pay for “incremental remediation costs” coming out of the environmental investigation when they agree to provide a “site ready for development.” The risk to the City goes up exponentially when one remembers that the proposed Obama Center garage has to go underground on what is now landfill and where that landfill came from the Columbian Exposition. The City has not disclosed how much all that will cost, but the Obama Center knows because they have been soil testing for over a year now, and this is why the provision is secreted in the document.

The Mayor, the City , the Park District and the proposed Obama Center now have an opportunity to respect the public trust and serve a real public interest. The ideal solution to building an Obama Center on the south side and benefiting local residents has always been locating that Center on private land in a neighborhood needing investment and local development, not trashing a needed open, clear and free public park.

A wonderful example of how the location process could have been perfected can be seen in Englewood (https://blockclubchicago.org/2018/09/18/how-you-can-help-transform-a-vacant-englewood-lot-into-a-safe-community-oasis/) where the local Resident Association of Greater Englewood (RAGE) and the non-profit Chicago Cares have transformed abandoned lots to serve the needs of the community. Former President Obama could embellish rather than tarnish his legacy by following that example.

Mark Glennon is founder and executive editor of Wirepoints.

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Colombia is producing more cocaine now than it ever has, according to a new report by Bloomberg. The amount of land planted with coca shrubs is up 17% last year, rising to 171,000 hectares, which surpasses levels prior to US president Bill Clinton’s “Plan Colombia” counter-narcotics program.

Almost all of the world’s cocaine comes from Colombia, Bolivia and Peru. Colombia produces more than half of the total cocaine in the world. Under Clinton’s plan, the aid provided to Colombia over the course of the last six decades was “stepped up dramatically”. Colombia has repaid the world by cranking out record levels of cocaine – probably not the solution Clinton, or other advocates for aid-giving, were seeking. 

Colombia’s 171,000 hectares is enough raw material to produce 1,379 tons of cocaine, according to the United Nations Office on Drugs and Crime. It’s also more than triple the output of five years ago.

The previous record had been 163,000 hectares in the year 2000. This was the same year that Clinton‘s “Plan Colombia” initiative started. Since then, the United States has supplied Colombia with more than $10 billion in aid – the most of any country outside of Asia and the Middle East.

Those who are experts in Colombia stated that Clinton’s plan didn’t change any conditions in the country’s cocaine producing regions. These very same regions also suffer from an absence of the state, land titles, roads or any type of legal economic opportunities.

Adam Isacson, a Colombia expert at the Washington Office on Latin America, stated: “The reasons farmers resorted to growing coca didn’t go away as a result of $10 billion in U.S. aid.”

Aside from the obvious problem of more cocaine to export, the rise in production has also gotten in the way of the peace process with Marxist rebels, as private armies of drug traffickers have usurped former guerilla zones in order to take control of the profits from cocaine. This shift in territory has prompted more violence in Colombia.

It has also put pressure on the relationship between Bogota and Washington. Colombia’s government, led by President Ivan Duque, who was recently elected, is now reportedly trying to put forth policies now favored by the Trump administration. These policies favor forcible eradication, with less emphasis on voluntary crop substitution.

We reported back in July of 2017 that Colombia was on a blistering pace for cocaine production, producing a record crop in 2016 for the second straight year.

Coca cultivation in the South American country surged 52 percent in 2016, spanning 146,000 hectares, compared with 96,000 in 2015. The 2016 crops produced an estimated 866 metric tons of cocaine, an increase of 35 percent compared to 2015. Meanwhile, cocaine use appears to be increasing in the two largest markets, North America and Europe.

Perhaps, given the long-term results of providing more aid as a solution, the government may now finally consider cutting off aid and dealing with such problems in a less diplomatic fashion going forward.

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Authored by James Howard Kunstler via Kunstler.com,

How hilarious is it in this pornography-saturated culture of anything-goes-and-nothing-matters that a long-ago session of awkward teenage necking becomes the most horrifying crime since Eve consorted with a snake in the original wayback?

One theory: having worked tirelessly to destroy behavioral boundaries in its quest to transform human nature for the greater good of society, the Prog-Left has no idea anymore how the world works or how to interpret what human beings actually do in it. Hence this effort to turn the Brett Kavanaugh nomination proceeding into a retroactive abortion of the nominee.

The Democratic Party seems to be afflicted with a vicious sort of PMS that has turned the brains of even its theoretically male members, Senators Chuck Schumer and Richard Blumenthal, into polenta with red sauce on top. They see blood everywhere, and even appear to be thirsting for it like a gang of Old World Nosferatus, or giddy Jacobins merrily geeing up the guillotine blade in a frenzy of summary execution.

My own sense of the situation is that Christine Blasey Ford’s accusations are going exactly nowhere, no matter how carefully and elaborately conditions are set for her to lay out her case. It couldn’t be more firmly established that she doesn’t remember what year or what place the alleged necking happened in. Is she going to change that part of the story now?

Surely lawyers, gumshoes, and phrenologists on the Democratic Party payroll would like to engineer some magic memory retrieval so she’ll be supplied with dates and addresses when her turn at the microphone comes. By the way, the boundary between truth and untruth is one of the lines that has turned all squishy on them. Because they can’t tell anymore, they must assume nobody else can either.

Who knows if Ms. Ford is sturdy enough for this ordeal-by-testimony. CNN asserted last night that this episode has “destroyed her life.” Of course, that claim, too, might be viewed as just another manifestation of hormonal disturbance which, less face it, women of a certain age are subject to. She can always retreat to her “safe space” back at Palo Alto U, with all the perqs and emoluments of her professorship, or perhaps even make a run for congress. God knows, California could use another victim of white male sexual abuse to advance the project of getting rid of men altogether. Hollywood would sign on for that in a New York minute.

This might come as a shock to readers, but the time is not far off when the remaining not-insane cohort of adult Americans gets good and goddamn sick of political sex bombing. Especially given this case of shuck-and-jive. Consider that the same CNN this week produced an entire segment about the shape and size of the President’s generative organ (as reported by an expert in these matters, the porn star and prostitute known as Stormy Daniels). It must be a subject of extraordinary interest to CNN’s Anderson Cooper.

On the other flank of the news this week is the much more perilous showdown between the Department of Justice (and the FBI), and Mr. Trump, the cis-hetero-white Golem who happens to be president. He has ordered these agencies to produce a set of un-redacted documents pertaining to the long-running Russia investigation, set into motion by personnel at these very places. It’s his prerogative under the constitution to do that. In turn, these agencies are being egged on by possibly culpable characters in this melodrama, such as former CIA Director John Brennan and Congressman Adam Schiff (D-Cal), to stonewall the Golem. If I were president — and I may get there yet — I’d send federal marshals into Rod Rosenstein’s office to seize these documents before they are mysteriously “lost.”

A tremendous tension hangs over this transaction. Imagine the awful possibility that Mr. Trump may have to declare some kind of martial law to roust out these seditious rascals and clean up their departments. There’s your Fourth Turning horror show with whipped cream and a cherry on top.

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The skyrocketing cost of tuition has not only resulted in a student debt bubble that is approaching $1.5 trillion, but it is also causing American college students to spend more time working paid jobs then they do studying, in class, or at the library. A new HSBC survey revealed that 85% of current college students work paid jobs while they are enrolled. The survey found that they spend an average of 4.2 hours per day working paid jobs: 2 hours more than they spend in class per day, 1.4 hours more than they spend studying at home, and more than double the amount of time they spend in the library.

John Hupalo, an education financial planner told Bloomberg: “The economics of the debt crisis have become a major distraction to students’ education. Students’ first priority should be to get value out of their education, not squeezing out hours at a job in order to make money to sustain that education.” 

The survey used data from 1,507 students that were aged 18 to 34 and were currently enrolled in both undergraduate and post-graduate programs. The survey also used data from 10,478 parents who had at least one child that was 23 years old or younger currently enrolled at a University. It was conducted by market research company Ipsos MORI.

The cost per college student in the United States, according to a September report from the Organization for Economic Cooperation and Development, is more than just about every other country in the world. Tuition costs are also at an all-time high, helping usher in the highest rate of student loan debt in history. Student loans are not only now the second largest type of debt for US households, but they have also cumulatively accrued to about $1.5 trillion. Debt loads are often more burdensome for the youngest Americans who are working jobs with minimum wage or entry-level wages. 40% of all millennial debt is student loans.

While in school, students also wind up taking on personal debt. The average student reportedly spends about $4,321 to pay back credit cards and personal loans during the course of earning their degree. According to the HSBC report, this is about $1,000 more than they spend on books.

Students in America are also tasked with funding far more of their expenses than students in other countries. Parents in America spend an average of $17,314 on tuition fees and other bills, but this doesn’t come close to $100,000 that students wind up spending over the course of a earning college degree. The funding gap of about $80,000 is where student loans wind up coming in, and it has been argued that the high cost of college tuition has been a function of the availability of student loans.

But educational planners shift some of that blame to families and students themselves, as well. Hupalo stated, “The fundamental issue is that families and students don’t have a realistic knowledge of the actual cost of an education in advance.”

To make matters worse, the study also showed that only a quarter of parents in the United States have specific education savings or investment accounts that they use to fund their children’s education. The rest rely on their day-to-day income. 

And the burden of these financial issues winds up affecting the quality of life for students. 6 in 10 students said that they feel anxious about their finances either “frequently” or “all the time”, according to a report by education technology company Chegg. The same report found that female students were 28% more likely than their male counterparts to be stressed by these financial concerns. It also found that women and minorities disproportionately bear the brunt of student loans, versus men. 

Disregarding the skyrocketing costs of education, Hupalo then concluded by stating that more work for students should be considered as the solution: “There’s no silver bullet. Despite these statistics, many students are actually handling these responsibilities well. And for some, taking on a bit more paid work could actually reduce their financial burden.”

Back in August, we reported that one million Americans default on their student loans each year. That means by 2023, approximately 40% of borrowers are expected to default.

That data was according to a report by the Urban Institute, a nonprofit research organization dedicated to developing evidence-based insights on critical socioeconomic issues. Researchers found about 250,000 student loan borrowers see their debts go into default every quarter, and an additional 20,000 to 30,000 borrowers default on their rehabilitated student loans.

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Authored by Lance Roberts via RealInvestmentAdvice.com,

An interesting thing has begun to occur in the market which is more a symptom of exuberance than prudence as there seems to be nothing that can derail the market advance to new highs. However, as Doug Kass noted recently in his diary, the ingredients to shock market participants are already in place.

• Speculative activity is on the rise (materially so in the case of Tilray (TLRY) and others in the space).

• Investor complacency (not a soul, save permabears, are looking for anything like a large markdown in market).

• Rising interest rates — with the pace of the yield climb now accelerating to the upside.

• Trade and tariff risk is rising.

• An extreme change in the market structure — much like portfolio insurance in 1987, (ETF and Quant strategies and products dominate the market) — in which participants are all on the same side (long) of the boat.

• Social unrest as the benefits of monetary and fiscal policies failed to trickle down.

• Weak market seasonals.

• Technical divergences.

The market is currently ignoring, in my opinion, two of the biggest risks to the fundamental underpinnings of the market which are earnings growth and valuation.

While the market has been rising on stronger rates of earnings growth, due primarily to tax cuts and share buybacks, that effect will begin to roll off in the months ahead. Tariffs and higher interest costs are a direct threat to bottom line profitability, particularly when combined with higher labor costs.

Today, however, I want to focus on the interest rate issue as it is the biggest threat the markets currently face if rates do indeed continue to rise further.

The following video takes a deep dive into rates and historical outcomes.

(Subscribe to our YouTube channel for daily videos on market-moving topics.)

But this is THE chart you should be paying attention to:

There are several important points to note in the chart above:

1. In the past 40-years, there have only been seven (7) other occasions where rates were this overbought. In each case, it was a great time to buy bonds and sell stocks. (When rates got oversold, it was time sell bonds and buy stocks.)

2. There were only two (2) other periods where rates were this extended above their long-term moving averages. The one that occurred between 1980-1982 began the long-term decline in bond prices. 

3. Economic growth has peaked every time rates got this extended. (Which shouldn’t be a surprise.)

4. Whenever rates have previously pushed 2-standard deviations of their 2-year moving average – bad things have tended to occur such as the Crash of 1974, Crash of 1987, Long-Term Capital Management, Russian Debt Default, Asian Contagion, Dot.com crash, and the Financial Crisis.

While the markets are currently ignoring the risk of higher rates, even a cursory glance at the chart above suggests that we are near the point where “rates will matter.”

I suspect the “Magic Number” is likely no higher than 3.25%.

But we will only know for sure when the “rabbit pops out of the hat.”

Just something to think about as you catch up on your weekend reading list.

Economy, 2008 & Fed

• Fed Officials Are Playing With Fire by Caroline Baum via MarketWatch

• Burying Our Heads In The Sand by Hunt Lawrence via American Spectator

• Further Tax Cuts, Further Fiscal Irresponsibility by Committee For A Responsible Federal Budget

• Tax Reform Promised A Deluge, We Got A Drip by Omri Marian via The HIll

• Trade War Escalates – Markets Shrug by Matt Phillips via NYT

• 6-Signs We’re Closer To A Recession Than You Think by Sean Williams via Motley Fool

• Wages Are Low And Workers Are Scarce by Annie Lowrey via The Atlantic

• The Casualties Of The Trump’s Trade War by Steve Chapman via Reason.com

• Economic Bump Due To Stimulus by James Macintosh via The New Yorker

• Can American Be A Successful Low-Tax Society by Grover Norquist via Ozy

• Who Really Creates Value In An Economy by Mariana Mazzucato via Project Syndicate

• A Decade Later, Is The Global System Safer by Knowledge@Wharton

Markets

• Edwards: Next Recession Only 6-Months Away by Tyler Durden via Zerohedge

• This Market Indicator Most Inflated Since 2000 by Mark Hulbert via MarketWatch

• TSLA: Headed To The Graveyard by Shawn Langlois via MarketWatch

• A Warning From Europe by Anne Applebaum via The Atlantic

• It’s A Nightmare Scenario For The Markets by Wolf Richter via Wolf Street

• The “Junkie Market” Is Back Again by Dana Lyons via The Lyons Share

• Central Banks On Gold Buying Spree by Simon Constable via Forbes

• Emerging Pieces From The EM Decline by Seth Levine via The Integrating Investor

• Markets Don’t Care About Trade Wars by Ryan Vlastelica via MarketWatch

• When Is The Next Recession & Bear Market by Jesse Colombo via Forbes

• The End Of The Incessant Bid by Kevin Muir via The Macro Tourist

Most Read On RIA

• The World Diverges From The U.S. by Lance Roberts

• Buffett: A Walking Contradiction by Michael Lebowitz

• The Ingredients Of An “Event” by Lance Roberts

• 80% Of Americans Face A Retirement Crisis by Lance Roberts

Research / Interesting Reads

• The Confidence Game Being Run At Salesforce by Ben Hunt via Epsilon Theory

• 2/3rds Of Americans Believe The Stock Market Hasn’t Risen by Tyler Durden via ZeroHedge

• A Decade Later: How The Recession Changed Everything by Liz Wolfe via Playboy

• How The Next Downturn Will Surprise Us by Ruchir Sharma via NYT

• 5-G Will Change Everything by Gary Shapiro via Real Clear Markets

• Statistics Say The Financial Crisis Is Behind Us, They’re Wrong by David Leonhardt via NYT

• The Biggest Economic Change In A Decade by John Stepek via MoneyWeek

• Is The Stock Market Overvalued? by Knowledge@Wharton

• Retirement Is In Peril For Most Americans by Ted Knutson via Forbes

• Fed Should Go Lower For Longer by Janet Yellen via Brookings

• The Will Be The Mother Of All Minsky Moments by John Mauldin via Mauldin Economics

• What We Should Have Learned From 2008, But Didn’t by Carmen Reinhart via Foreign Affairs

“It’s all fun and games until someone gets their eye put out.” – Every Mom In History

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Seriously…

Chinese stocks soared higher this week (SHCOMP +4.3%) – the best week since March 2016…

 

While China surged in two major National Team pumps, Europe was a one-way-street of stock-love all week…

 

But US markets were a little more mixed with The Dow leading, S&P holding gains, and Nasdaq, Small Caps, & Trannies all red…

 

It was quad-witch today, and a massive index reclassification, which prompted yuuge volume in stocks…

 

On the day, The Dow trod water rather too calmly as the rest of the market rolled over…and some serious moves into the close…

 

Dow (blue) leads the way in September (+3%) as Small Caps (red) and Nasdaq (green) remain in the red…

 

US still leads the world on the year…

 

FANG Stocks ended lower on the week

 

Making headlines all week were the weed-stocks, as Tilray exploded higher and crashed back to earth, but the broader cannabis market (ETF MJ), had a big week…

But it’s not a bubble…

 

Ahead of today’s major index reclassification, the S&P Tech sector ETF (XLK) saw an unprecedented inflow (at a time when heavyweight tech growth stocks like FB and GOOGL are about to be removed from it)…

 

Treasury yields rose for the 4th week in a row (longest losing streak since Feb)…

 

The yield curve steepened on the week (but was well off its steepest levels by the close)…

 

Notably after Tuesday’s major surge in yields – back above 3.00%, 10Y Yields have largely trod water in a very narrow range…

 

But 10Y remains off 2018 yield highs for now…

 

The Dollar Index fell for the second straight week – the biggest two-week drop since January…

NOTE – this week played out almost exactly like last week from a price-pattern perspective

Cable crashed most since June 2017 today following May’s “no deal” speech…

 

And as the Argentine Peso soared, Cable was even worse on the day than the Turkish Lira…

EM FX had the best week since February… back to 4-week highs…

 

The Hong Kong dollar jumped by the most since October 2003 this week, with analysts citing the prospect of higher rates in the city and stop losses as possible triggers.

 

Cryptocurrencies had a big week, but none bigger than altcoin Ripple, up over 100% on the week…

Copper soared this week on China stimulus hopes but despite USD weakness, PMs managed only modest gains…

 

Gold had a chaotic moment of manipulation this morning as someone decided 0845ET was the perfect time to puke $1.2 billion notional of paper gold into the futures market… Silver bounced back but gold was less able to…

 

Copper had its best week since Nov 2016 (Trump election)…

 

Finally, we note that U.S. stock valuations are increasingly in a world of their own…

The gap between these indicators widened in the 12 months ended Thursday by 20 percent, more than it has in any calendar year since 1997, according to data compiled by Bloomberg.

And as stocks hit record highs in price and valuations, @ETF.com reports that a massive $34 bn poured into ETFs this week…

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Submitted by Gordon Johnson of Vertical Group

TSLA is effectively “robbing Peter to pay Paul”, in our view, and it’s being positioned in the media as “Delivery Hell” because that’s what Elon Musk is calling it.

TSLA has been doing this for a while, but it seems to be picking up in 3Q18 (i.e., TSLA is filling new orders and then keeping older ones pushed out; i.e., if you are pre June 30, 2018 you’re still waiting). Why is no one in the media covering this? Why aren’t the experts on TV talking about this?

HOW DOES IT WORK? In our opinion, what TSLA may be doing by saying they are in “delivery hell” is, in an attempt to generate a lot of cash in 3Q18, taking a payment from “customer a” (in the form of a deposit for a car and/or configuration deposit with a promise to deliver a car by a certain date), then selling what “customer a” paid for to “customer b” (who is a new buyer), thus double booking cash – this trick is done by delaying the date you promised “customer a” they’d get their car in order to originally get their deposit, thus allowing you to temporarily boost your cash balance by selling the same thing (i.e., the rights to a car) twice.

In turn, you delay what you promised “customer a”, and call it “delivery hell” and have the celebrity CEO promise he’s fixing it. Another way of saying… we’re using accounting chicanery to double-book cash on car sales to boost free-cash-flow in 3Q18 to get our stock price higher (again, this is our opinion of what’s happening).

Do we know this for certain? Nope. But we’ve spent a career looking at, and undressing, accounting chicanery (SunTech; SunEdison; Yingli; Tainergy; etc.) and been to “the magic shows they put on”; we know how they hide a bunny in a hat and make a pile of liabilities look like a pile of cash.

Someone needs to ask TSLA these questions and/or investigate.

 

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Following in the footsteps of corporate giants Apple, Facebook, Google and Spotify, on Friday PayPal said it was is terminating its relationship with Alex Jones and his website, Infowars. In a statement, PayPal said that after an extensive review of Infowars and its related sites the company “found instances that promoted hate or discriminatory intolerance against certain communities and religions, which run counter to our core value of inclusion” although it declined to cite specific examples of Infowars’s problematic behavior.

After PayPal notified Infowars of its decision on Thursday, the site accused PayPal in a blog post of a “political ploy designed to financially sabotage an influential media outlet.” It added that PayPal had given it 10 days to find a new payment platform, after which PayPal’s services would no longer function.

After learning of the imminent ban, Infowars supporters began urging the site to accept bitcoin.

PayPal’s decision is only the latest crackdown against the controversial blog: last month, Jones’s podcasts were removed from iTunes after Apple said it did not tolerate hate speech. YouTube then took similar enforcement steps against Infowars, saying Jones had “repeatedly” violated its terms of service, according to the WaPo. And while Twitter initially resisted banning Jones, after a few days of pressure from the media and its peers, it too removed him from its platform earlier this month with a permanent suspension.

There may have been another reason: Twitter’s decision to ban Infowars came hours after Jones appeared at a high-profile congressional hearing involving Twitter’s Jack Dorsey and Facebook COO Sheryl Sandberg. Afterward, Jones tried to confront Dorsey as he was exiting the Senate office building where the hearing was held.

PayPal’s decision to remove Jones hits him where it will probably hurt his business the most: his wallet.

Will the PayPal ban hurt InfoWars? According to WaPo, “last month, roughly 1.15 million visitors logged onto Jones’s online storefront, Infowarsstore.com, Jonathan Albright, the Tow Center’s research director, told The Post’s Craig Timberg in a recent interview. Of those, more than 60 percent went to PayPal after visiting his digital shop, implying that Jones is effective at converting visitors into paying customers.”

As for whether the recent publicity has hurt the website’s traffic, for now – at least – all the bans appear to be backfiring.

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When we compiled yesterday’s Household Net Worth report for the second quarter, which is contained in the Fed’s quarterly Flow of Funds report, one thing stuck out: extensive data revisions to the nominal dollar amounts in both the Pension Funds and Corporate Bonds category.

We now know the reason: as Bank of America’s Hans Mikkelsen explains, in recent years and most recently in Q1, the Fed indicated that private defined benefit plans bought corporate bonds in recent years “but little Treasuries.” This is shown in the chart below.

However, as BofA observes, the latest data revisions as of 2Q shows the opposite: that Pensions bought Treasuries but little corporate bonds.

Here, BofA makes a good observation:

“We knew that the Fed’s flow of funds data is subject to large revisions, but in light of such revisions we are increasingly pondering whether it is useful at all.”

That is a valid concern since after the GDP and unemployment report, the Flow of Funds is arguably the most report providing a glimpse on the state of everything from the financial sector, to the net worth of US households, which as we explained previously, is merely a “plug” category, yet which is so critical in determining whether US households are getting richer or poorer.

As for the pensions revision, at the very least the revised pick-up in pension buying of Treasuries this year is consistent the odd increase in stripped Treasury volumes which we documented previously.

What may have caused the Fed’s error? One explanation is that stripped Treasuries were previously mis-classified as corporate bonds.

In any case, if the new data is correct, it would help explain the lack of flattening of the back end of the corporate yield curve this year relative to the Treasury curve (something we first discussed last year), where we now know that Pension funds have been an active buyer.

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