Gunmaker Stocks Outperform Post-Sandy Hook

Smith & Wesson’s earnings report gave renewed momentum to a rally in gun-making stocks, which began amid a debate about firearms that followed the Sandy Hook Elementary School shooting 15 months ago. As Bloomberg notes, many gun enthusiasts have stocked up on weapons to avoid potential restrictions in response to the Sandy Hook incident, the second-deadliest mass killing at a school in U.S. history, and that has driven stocks like Sturm Ruger to handily outperform even the highest of high-beta momo indices like the Russell 2000. SWHC was up 16% after earnings – its biggest gain since the shooting – as it beat expectations once again.

 

 

“The market should continue to be supported” as new gun owners purchase additional firearms, Ronald Bookbinder, a New Orleans-based analyst at Benchmark Co., wrote yesterday.

 

Chart: Bloomberg


    



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“No Inflation” Friday: The Dollar Has Lost 83.3% Against…

Submitted by Simon Black of Sovereign Man blog,

I needed a caffeine jolt late this morning after the long journey up from South America.

And while I’m generally averse to aspartame, high fructose corn syrup, and other government-sanctioned poisons, I did briefly consider a hit of Coca Cola as I walked past a vending machine on my way out of a grocery store.

Then I saw the price.

To give you some quick background, this was the same grocery store my mother used to shop at when I was a kid. And if I was really lucky, we’d stop for a can of coke on the way out– 25 cents back then.

Fast forward to today–. I’m a grown man of 35 now instead of a 9-year old kid. And while the store has changed hands a few times, there’s still vending machine near the entrance.

Same coke, same 12 ounces (though now in a plastic bottle instead of an aluminium can).

Price today? $1.50. [note, this is the vending machine price, not grocery store price.]

Put another way, $1 would have bought me 48 ounces of Coca Cola 26 years ago. Today that same dollar buys me just 8 ounces.

This means that the dollar has lost 83.3% of its value against Coca Cola over the past three decades, averaging roughly 6.6% inflation per year.

Some readers may remember the price of Coca Cola being just 5c back in the early 1950s (for a 6.5oz glass)… meaning the US dollar has lost 93.8% against Coca Cola over the past six decades.

Now, we are taught from the time we are children that ‘a little inflation is good…’

And when central bankers tell us they’re targeting an inflation rate of 2% to 3%, that certainly doesn’t seem so bad. 2% is practically just a rounding error. But bear in mind a few things–

1) An inflation rate of 2% is not price stability.

As Jim Rickards frequently points out, even with just 2% inflation, a currency loses over 75% of its value during an average lifespan. This can hardly be considered monetary stablilty.

And this practice of gradually plundering people’s purchasing power over time is incredibly deceitful.

2) Even if, they rarely meet their target.

As this case shows, 6.6% certainly ain’t 2%. The official statistics and research papers may say 2%. Reality is much different.

3) Wages often don’t keep up.

According to the US Labor Department, the median weekly wage back in 1988 was $382… or roughly 18,336 ounces of Coca Cola.

Today the median weekly wage is $831.40… or just 6,651.20 ounces.

So as measured in Coca Cola, the average wage in the Land of the Free has declined by 11,684 ounces per week– a 63.7% decline over the last three decades.

You can make a similar calculation denominated in Snickers bars, gallons of gas, etc.

If you have a big picture, long-term view, it’s clear that standard of living is falling.

Some readers may remember decades ago– a single parent could go out and, even with a blue collar job, comfortably support a growing family.

Today, dual income households struggle to keep their heads above water. This is the long-term plunder of inflation.

And just to give you a reminder of what things used to cost, I’ve pulled a page from the March 7, 1988 edition of the Bryan Times of Bryan, OH: 26-years ago today.

inflation federal reserve No inflation Friday: the dollar has lost 83.3% against...

You can scroll through the paper and note the prices:

25c for a dozen eggs. 69c for a loaf of bread. 49c for a pound of Chicken. A brand new Mustang LX for just $9203.

That’s the Federal Reserve for you. 100 years of monetary destruction and counting.


    



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Meet The Mysterious Firm That Is About To Leave Blythe Masters Without A Job

It was about a month ago when it was revealed that the infamous JPMorgan physical commodities group, plagued by both perpetual accusations of precious metal manipulation and legal charges most recently with FERC for $410 million that it had manipulated electricity markets, was in exclusive talks to be sold to Geneva-based Marcuria Group. It was also revealed that Blythe Masters, JPMorgan’s commodities chief, “probably won’t join Mercuria as part of the deal.” Of course, we all learned the very next day that Ms. Masters – an affirmed commodities market manipulator – and soon to be out of a job, had shockingly intended to join the CFTC trading commission as an advisor, a decisions which was promptly reversed following an epic outcry on the internet. This is all great news, but one thing remained unclear: just who is this mysterious Swiss-based company that is about to leave Blythe without a job?

Today, courtesy of Bloomberg we have the answer: Mercuria is a massive independent trading behemoth, with revenue surpassing a stunning $100 billion last year, which was started less than ten years ago by Marco Dunand and Daniel Jaeggi, who each own 15% of the firm’s equity. And it probably should come as no surprise that the company where the two traders honed their trading skill is, drumroll, Goldman Sachs.

Dunand and Jaeggi first met studying economics at the University of Geneva in the late 1970s. Their friendship was galvanized a few years later working for grain trader Cargill Inc. and sharing an apartment while on a training course in Minneapolis. Mercuria’s corporate strategy and culture have reflected the professional paths of its founders, who spent the bulk of their early careers at investment banks.

 

 

They left Cargill in 1987 for Goldman Sachs’s J. Aron unit in London. They stayed until 1994, then joined Phibro for a five-year stint when it was controlled by Salomon Brothers.

 

That experience defined the trading strategies of Dunand and Jaeggi who moved from Phibro to start Sempra’s European and Asian trading business in 1999 before founding Mercuria in 2004.

 

Without a commanding position in any region or commodity, the firm has sought out bottlenecks and imbalances in niche markets and positioned itself to make money trading derivatives using insights gained from its physical trading. In its early days it profited by opening a trade route shipping Russian crude to China from Gdansk, Poland.

 

Mercuria also differs in tone. At its headquarters on Geneva’s poshest shopping street, traders and executives wear open-collared shirts, sweaters and jeans, a sharp contrast to the shirt-and-tie policies at more established firms.

Not surprisingly, some of the key hires in the past couple of years as the firm expanded at a breakneck pace and added some 570 people, bringing its total headcount to 1,200, were from Goldman: “The hires include Houston-based Shameek Konar, a former managing director with Goldman Sachs Group Inc. who is chief investment officer overseeing Mercuria’s corporate development, including the JPMorgan negotiations. Victoria Attwood Scott, Mercuria’s head of compliance, also joined from Goldman Sachs.” We find it not at all surprising that the Goldman diaspora is once again showing JPMorgan just how it’s done.

So just how big is Mercuria now? Well, it is almost one of the biggest independent commodities traders in the world:

Mercuria traded 182 million metric tons of oil or oil equivalent in 2012, according to its website. Vitol, the largest independent oil trader, handled 261 million and Trafigura traded 102.8 million tons of oil and petroleum products. Brent crude rose 3.5 percent that year in a fourth annual advance. It slipped 0.3 percent in 2013 and is down 2.6 percent this year at about $108 a barrel.

 

With more trading companies trying to gain an edge by owning businesses that produce, store or process commodities, Mercuria followed suit. It now has stakes in a coal mine in Indonesia, oil and gas fields in Argentina, oil storage in China and a biodiesel plant in Germany. In June, it invested $50 million in a Romanian gas producer.

 

The JPMorgan unit employs about 600 and represents a range of assets assembled over decades by firms including Bear Stearns Cos. and RBS Sempra, which the bank bought during an acquisition binge beginning in 2008.

 

They include gas and power trading on both sides of the Atlantic, physical assets spanning 40 locations in North America, an oil-trading book with a supply and offtake contract with the largest refinery on the U.S. East Coast, 6 million barrels of storage leases in the Canadian oil sands, and Henry Bath & Sons Ltd., a 220-year-old metal-warehouse operator based in Liverpool, England.

In other words, the old boys’ club is about to get reassembled, only this time even further away from the supervision of the clueless, corrupt and incompetent US regulators. And with the physical commodity monopoly of the big banks finally being unwound, long overdue following its exposure here and elsewhere over two years ago, it only makes sense that former traders from JPM and Goldman reincarnate just the same monopoly in a jurisdiction as far away from the US and Fed “supervision” as possible. Which also means that anyone hoping that the great physical commodity warehousing scam is about to end, should not hold their breath.

As for the main question of what happens to everyone’s favorite commodity manipulator, “It hasn’t been determined whether Blythe Masters, who has led the JPMorgan unit since 2006 and orchestrated the buying spree, would join Mercuria, a senior executive at Mercuria said.” Which means the answer is a resounding no: after all who needs the excess baggage of having a manipulator on board who got caught (because in the commodity space everyone manipulates, the trick, however, is not to get caught).

Finally, with “trading” of physical commodities, which of course include gold and silver, set to be handed over from midtown Manhattan to sleep Geneva, what, if any, is the endgame?

The talks with JPMorgan forced Mercuria to put another deal on hold. Mercuria was nearing the sale of an equity stake of 10 percent to 20 percent to Chinese sovereign wealth fund State Development & Investment Co., according to two people familiar with the matter. The discussions with SDIC were halted once Mercuria neared the JPMorgan business, one of the people said.

But they will be promptly resumed once JPM’s physical commodities unit has been sold, giving China a foothold into this most important of spaces. Because recall what other link there is between China and JPM?

One may almost see the connection here.


    



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CrossFit Games Sued for Telling Transgender Contestant She Must Compete with Men

Chloie JohnssonChloie Johnsson, a personal trainer, wants to
compete in the CrossFit
Games
, an effort by the de-centralized fitness company founded
by libertarian Greg Glassman to find “the Fittest on Earth.”

Johnsson is transgender and had full sexual reassignment surgery
eight years ago. She wanted to compete as a woman. She was told by
CrossFit that she would have to compete with the men, and now she’s
filing a $2.5 million lawsuit. CNN notes:

Chloie Jonsson, a personal trainer, charges the CrossFit company
with discrimination, intentional infliction of emotional distress
and unfair competition in a lawsuit filed Thursday in Santa Cruz,
California.

While her lawyer calls it a case of discrimination against
transgender people, CrossFit’s lawyer calls it protecting the
competition. …

According to the lawsuit, Jonsson has identified herself as a
female since her teenage years and is legally recognized by
California as a woman. She had sexual reassignment surgery in 2006
and has been on female hormone therapy, according to her
lawsuit.

The lawsuit alleges that a CrossFit teammate of Jonsson’s sent
an anonymous e-mail to the games organizers asking about
transgender athletes in the competition. CrossFit determined that
competitors in the event had to compete in the gender of their
birth.

The story went around the media with some cherry-picked comments
from the letters involved. Dale Saran, CrossFit’s general counsel,
has posted links on
CrossFit’s forums
to the full letter sent to CrossFit by
Jonnson’s lawyer and his full response to put it all in context.
Her letter can be read
here
and his response
here
.

In short, even though freedom-friendly CrossFit supports
Jonnson’s right to identify herself as a woman and live her life as
she chooses, Saran argues, “The fundamental, ineluctable fact is
that a male competitor who has a sex reassignment  procedure
still has a genetic makeup that confers a physical and
physiological advantage over women.”

Jonsson’s lawyer told CNN that advantage doesn’t exist
anymore:

“(Jonsson) doesn’t have an advantage over other women. She’s
been on estrogen for such a long time,” he said about his
client.

Hormone replacement therapy for transgender women includes
anti-androgen therapy, which nullifies the effects of testosterone
to reduce the masculine features of the body. Therapies can also
consist of the hormones, estrogen and progesterone to feminize the
body.

Saran commented further about their decision on CrossFit’s
forums (while also taking a dim view about being lectured about
discrimination by her lawyer while at the same time being
threatened with legal action):

We’re faced with the Hobson’s choice of picking one “bin” (male)
and now being told that Ms. Jonnson needs 2.5 million dollars for
the “harm” of not being put into the category of her choosing – and
having that characterized as a “civil right” violation – OR
choosing “female” and having other female athlete’s complain that
they have to compete against someone who had the benefit of growing
up with a cascade of hormonal advantages well into adulthood.

Below, ReasonTV’s interview with CrossFit founder Glassman:

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Pot Prohibitionist at CPAC Says He Is ‘Fighting Against the Tide’

Yesterday The Atlantic‘s Molly Ball
attended a debate about marijuana legalization at the Conservative
Political Action Conference (CPAC) and came away
convinced
that critics of the war on drugs are ascendant within
the conservative movement. The debate pitted conservative blogger
and Fox News commentator Mary Katharine Ham against Christopher
Beach, a producer for former drug czar Bill Bennett’s radio show.
Ball reports that the discussion “turned out to be surprisingly
one-sided,” with the audience, or at least the most vocal parts of
it, overwhelmingly in favor of legalization, the position taken by
Ham. Ball acknowledges that CPAC skews young and libertarian, but
she says Beach told her he typically gets a hostile response when
he defends prohibition in the company of fellow conservatives.
“There used to be a strong conservative coalition opposed to drugs,
but it’s dissipated in the face of mounting public support for
legalization,” Beach say. “We’re fighting against the tide on
this.”

To longtime
opponents of the war on drugs, those are pretty startling words.
Back in the 1980s, when I started writing about drug prohibition,
Gallup
found
that less than a quarter of Americans thought marijuana
should be legal. My own father wanted to know whether I really
believed what I was saying or was just in it for the money. I am
not sure which answer would have been worse from his perspective.
Eventually he decided that advocating drug legalization was a
respectable position, since it had attracted support from serious
people like Milton Friedman and Bill Buckley. Today he mails me
clippings about medical marijuana from Israeli newspapers.

My father, who will turn 89 this year, is part of “the only age
group that still opposes legalizing marijuana,” according to a

Gallup poll
conducted last fall. Overall support for
legalization was 58 percent in that poll, and the breakdown by age
went like this:

18 to 29: 67 percent

30 to 49: 62 percent

50 to 64: 56 percent

65+: 45 percent

The results were similar in a CNN
poll
 conducted in January:

Two-thirds of those 18 to 34 said marijuana should be legal,
with 64% of those 34 to 49 in agreement.

Half of those 50 to 64 believe marijuana should be legal, but
that number dropped to 39% for those age 65 and older.

According to Gallup, only 35 percent of Republicans favor
marijuana legalization, meaning they are more inclined to support
pot prohibition than retirees are. As Ball observes, this situation
creates a dilemma for the Republican Party:

The situation closely parallels the party’s predicament on gay
marriage, which most Republicans still oppose even as widening
majorities of the broader public support it.

It adds up to a quandary for the GOP: Should it embrace the
unpopular position still disproportionately favored by its members
and risk marginalization as a result? Or will the burgeoning
conservative voices in favor of legalization win out? Simply put,
do Republicans want to be on the losing side of yet another culture
war?

It will be interesting to see how they answer that question. In
the meantime, I am trying to get used to the weird feeling of
swimming with the tide.

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Comic Artist Burns Copies of Book He Got Kickstarter Funded Rather Than Mail Them, Because Capitalism is Bad

For those who think Ayn Rand was just crazily overwrought in the
“unrealistic” characters she created to dramatize the
anti-capitalist mentality, you might want to see
this addendum to the Kickstarter page
of comic artist John
Campbell, who raised over $50,000 on Kickstarter to publish a book
of his comics Sad Pictures for Children.

He got tired of having to mail the books he promised, apparently
(believe me, I know that’s a drag) and so decided to burn a copy
for every person who asked about where the book they’d been
promised was.

The page has a video of him doing the burning.

He has elevated the annoyance of mailing 127 packages to an
anti-market rant of marvelous proportion. Excerpts, though whole
thing is worth reading, after he talks about how rich people he
knew as a kid mistreated a pet rat:

I got a lot of requests from backers to get books sent
before Christmas, which I was able to do for some people. I could
not do this for other people before leaving for the holidays, and
many of them asked for refunds.

I refunded them with money I got from selling the original art I
made for my webcomic from 2009-2012. This was money I planned to
ship orders with. After this happened, I could have made another
update explaining I had issued refunds and then tried to sell more
things or asked for more shipping money. Instead I thought for a
long time about what has been happening…

If you would like a refund, please contact a fan of my
work directly for your money. This is where the money would come
from anyway. I am cutting out the middle man.

I refunded some of the preorders I received through paypal in
addition to the kickstarter orders, but I will not be refunding any
more….

You could try to obtain refunds through kickstarter or paypal,
through your bank or credit card company. You could try to harass
me or inconvenience me or tell other people negative things about
me or this kickstarter in the hope that this will affect me
negatively. Be aware that each attempt to contact me about this
book will individually result in the burning of a book until the
books are gone…..

Why? Society is fucked up, man, and someone owes me a
living:

All right: I want direct funding for my living necessities. I
want to establish relationships with a group of people who can pay
for my baseline needs like food and rent. I am looking for people
who do not feel they need to see any “return” on their
“investment.” I am looking for people who understand that money is
a bad joke we use to hurt each other. I’m looking for people who
like me were born with a lot of privileges but who have had the
awareness and emotional stability to keep their bucket under the
faucet when the money comes out.

I am not looking for the support of anyone who wants a book, or
wants to see me put stick figure comics on the internet. I do not
need the support of anyone who thinks that I will deserve to eat
and sleep only after I have fulfilled some standard they’ve chosen
to hold me to. I am looking for people who believe that if you
spend your life in a small room thinking, you deserve to live and
breathe the same amount as someone who spends their life doing
intense physical or mental labor, or who has money that “makes
money.”

When I have established a means for a small group of people to
directly meet my needs, and I know that the people involved
understand the value of what they are doing and would continue
without me, I will transfer these relationships to someone else.
This will provide for the basic living necessities of a person who
would not usually have the opportunity for their needs to be met by
strangers on the internet. They will not be asked to do anything to
keep these relationships going. They will simply have their needs
met.

Mr. Campbell seems distressed about things above and beyond that
some people like to trade value for value, to be sure, with
intimations of trouble with medication and gender identity (I
think), but:

I am confident that I can find a handful of people who will help
meet my needs, and then someone else’s needs. Because the truth is,
that is not very much money, for a lot of people. We don’t need
much. The truth is there’s more than enough money and resources for
everyone to have their needs met, without worry, every day….

….if I can’t find people who want to make this happen, why
would I continue to interact with the internet? I put stick figure
comics on the internet for about a decade, and now I won’t. If I
make stick figure comics, then I should….live? If I ship your book,
then I deserve to eat and sleep? If I don’t interact in a
particular way with the post office, that makes me immoral?

I wrote in 2012 on people who hated Kickstarter for
lacking enough central cultural control
.

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FDNY Accused of Using NSA-Like Tactics, Subpoena Power to Retaliate Against Firefighter

power corrupts everywhere?A firefighter with the Fire
Department of New York (FDNY) accused the department of denying her
a promotion and using their subpoena power to search her cellphone
to determine she was the anonymous source
behind a story
about another female firefighter who was
graduated from the academy despite failing the running test five
times. The New York Post
reports
:

FDNY officials desperately hunted for the source of the
story by using subpoena power to search the cellphone records of
female firefighters.

Union boss Steve Cassidy called the FDNY’s actions “disgraceful,”
adding, “It’s reminiscent of the NSA scandal, and it has a chilling
effect on all New York City firefighters and the media covering the
story.”

He said FDNY Commissioner Sal Cassano and other fire officials “may
have committed serious abuses of the department’s subpoena
power.”

Why does the FDNY have its own subpoena power? When dealing with
potential arson, it seems they could easily work with the NYPD or a
prosecutor’s office. The allegations of whistleblower retaliation,
if true, ought to force New York City to reconsider the
department’s subpoena power. Even if the allegations aren’t true
(and keep in mind that retaliation for whistleblowers is not
uncommon within public agencies,
like the NYPD
), subpoena power is easily abused at great cost
to the victims of that abuse and probably shouldn’t be in the hands
of any more agencies than it has to be.

The union’s lawyer, Ron Kuby, says he’ll be suing the FDNY if it
doesn’t apologize to the firefighter and promote her. The FDNY,
meanwhile, alleges that she committed “a serious and potentially
unlawful act for which severe penalties are warranted” for leaking
“confidential medical and personnel information,” which begs the
question as to why they merely denied her a promotion and haven’t
suspended her or put her on administrative leave. You can be sure
however this ends, New York City taxpayers will likely be paying
for it.

h/t Slammer

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CPAC: Fred Thompson, Other Cons Totally Cool with States Legalizing Pot, Gay Marriage

“CPAC: Fred Thompson, Other Cons Totally Cool with States
Legalizing Pot, Gay Marriage” is the latest video from Reason TV.
Watch above or click the link below for full text, links,
downloadable versions and more.

View this article.

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Facebook Pays California Cop’s Salary

In a first-of-a-kind deal, Facebook will
pay the salary of a full-time police officer to patrol Menlo Park,
California, where the company’s headquarters are located.

The social media giant made a three year, $200,000-a-year offer
to fund a new position on the force, which city council unanimously
approved on Tuesday. The agreement stipulated that Facebook would
have no input in whom the city hired or any other employment
issues, such as discipline, after disbursing the funds. On
Thursday, the city picked eight-year veteran of the force Mary
Ferguson-Dixon. 

Business Insider
writes
that Ferguson-Dixon “won’t be patrolling the Facebook
campus — the company already employs a private security force for
that purpose. Instead, beginning April 1 she will “handle
neighborhood issues such as truancy, school and business safety,
and overall neighborhood security enhancements” in the Belle Haven
neighborhood,
notes
the San Francisco Gate.

Some are skeptical of the arrangement. NBC
spoke
to several communities members:

“I find this particularly concerning,” said Alessandro De
Giorgi, a justice studies professor at San Jose State
University.

Giorgi worries about the ramifications of a private company
paying for a historically publicly paid police officer. And in his
opinion, any money should go to fund education, not police officers
whose job it is to arrest people – especially students – and put
them in jail or juvenile hall.

“I don’t think there is anything ethically wrong with
it,” said Terry Francke, general counsel for Californians
Aware, a nonprofit group that aims to keep governments
accountable. “But I don’t think it’s good government. The
notion is that government services are paid for by everyone. This
comes awfully close to naming rights. So, what will things be
called now, ‘Google City Hall?'”

Yet, while it seems like the multi-billion dollar company could
better invest in the community in better ways that catching
delinquent youths, there’s no reason to bite the hand that feeds:
the $200,000 salary is one less burden the taxpayers of Menlo Park
have to bear.

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Landmark Copyright Ruling Rings in 20th Anniversary; Celebrate With Your Favorite Parody Videos

What does the above Saturday Night Live parody of Wes
Anderson films have in common with the 2 Live Crew song “Pretty
Woman?” Both were
made legally possible by a U.S. Supreme Court decision
handed
down 20 years ago today.

The case, Campbell v. Acuff-Rose, centered on 2 Live
Crew’s parody
of the Ray Orbison ballad “Oh, Pretty Woman.”
Because the hip hop group was making money off the parody, a lower
court had decided that the
fair use doctrine
did not apply.

But the high court disagreed, deciding unanimously that
commercial parody was fair use under
Section 107
of the U.S. Copyright Act. It noted that the more
transformative a new work was, “the less will be the significance
of other factors, like commercialism, that may weigh against a
finding of fair use.” From
DisCo’s Matt Schruers
:

Campbell cemented the viability of commercial parody in
U.S. copyright jurisprudence, along with the principle of
“transformativeness” as one motivating principle of Congress’s
decision to enact fair use. The idea of “transformativeness” … has
helped ensure that innovative new commercial technologies, which
often involve copying but still increase the value and
accessibility of creative works, can come to market.

The anniversary of Campbell is important to mark “due
to the growing significance of fair use for commercial purposes and
businesses,” Schruers added. Though the importance of commercial
fair use is often overlooked, about
17 percent of U.S. GDP
was produced by industries benefiting
from fair use and other copyright exceptions. 

Have a favorite parody video or few? Share ’em in the comments.
You know, for liberty’s sake. 

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