Dianne Feinstein Wants Brett Kavanaugh to ‘Reconcile’ His Second Amendment Reasoning With ‘Hundreds of School Shootings’ That Never Happened

Yesterday Sen. Dianne Feinstein (D-Calif.), who wrote the federal “assault weapon” ban that expired in 2004 and in recent years has been pushing a new, broader version of that law, asked Supreme Court nominee Brett Kavanaugh to explain why he concluded that such legislation is unconstitutional. After Kavanaugh recapped his reasoning (more on that in a minute), Feinstein replied, “How do you reconcile what you’ve just said with the hundreds of school shootings using assault weapons that have taken place in recent history?”

Feinstein’s response was striking for two reasons. First, there have been nothing like “hundreds of school shootings using assault weapons,” whether you look at “recent history” or go back half a century. Second, the shootings are irrelevant to the question of whether banning so-called assault weapons is consistent with the Second Amendment.

According to a database maintained by Mother Jones, there have been 101 “indiscriminate rampages in public places resulting in four or more victims killed by the attacker” since 1982. A Washington Post tally published last October, based on the FBI’s definition of mass murder, identified “154 shootings in which four or more people were killed” since 1966. Only a small share of these attacks—16 of 101 in the Mother Jones database—occurred at schools, including universities. Just six of those 16 school attacks involved “assault weapons,” which account for about a quarter of the firearms used by mass shooters, most of which are handguns.

Even if Feinstein had in mind a broader definition of school shooting, it is hard to see how she could get to “hundreds” involving “assault weapons.” By her own count, 385 people were killed with “assault weapons” from 2004 through 2011 (which is about 0.5 percent of gun homicides during that period), and the vast majority of those murders did not occur in schools. If we assume that something like 16 percent of them did (in line with the Mother Jones numbers), that would be 60 or so murders involving “assault weapons” at schools over eight years, and the number of separate incidents would be even lower. It is difficult to escape the conclusion that Feinstein is just making shit up when she refers to “hundreds of school shootings using assault weapons that have taken place in recent history.”

In any case, the number of school shootings has no bearing on the question Kavanaugh was answering, which was why he dissented from a 2011 D.C. Circuit decision upholding the District of Columbia’s “assault weapon” ban, which (as he noted) covered a “haphazard” set of arbitrarily selected guns “with no particular explanation or rationale for why some made the list and some did not.” As Kavanaugh explained to Feinstein, the Supreme Court held in District of Columbia v. Heller that the Second Amendment protects the right to keep handguns for self-defense, while allowing that bans on “dangerous and unusual” weapons—firearms that are not “in common use” for “lawful purposes”—would be constitutional. “Most handguns are semi-automatic,” Kavanaugh observed. “The question was can you distinguish, as a matter of precedent,” between semi-automatic handguns and semi-automatic rifles. He noted that “semiautomatic rifles are widely possessed in the United States; there are millions and millions.” To Kavanaugh, that means the guns that Feinstein wants to ban are “in common use” for “lawful purposes” such as self-defense and hunting, meaning possession of them is protected by the Second Amendment.

Feinstein implausibly insisted that “assault weapons are not in common use,” even though Americans own more than 16 million of them, only a tiny percentage of which will ever be used to commit crimes. She also suggested that Kavanaugh needed to “reconcile” his constitutional reasoning with the fact that such guns are sometimes used in school shootings, which makes no sense. As Kavanaugh noted in his dissent, handguns are used to murder people much more often than “assault weapons” are. The Supreme Court nevertheless held in Heller that Americans have a constitutional right to own handguns.

Either Kavanaugh applied Heller correctly or he didn’t. The “hundreds of school shootings using assault weapons” that Feinstein invented have no bearing on that question.

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Meet The North Korean Evil Genius Who Hacked Sony, The Bangladesh Central Bank, And Launched WannaCry

In the latest crackdown on foreign hackers, on Thursday the DOJ accused a North Korean programmer of hacking a series of financial institutions and entertainment companies as part of a wave of cyber attacks ordered by the Kim Jong Un’s regime. The criminal complaint unsealed on Thursday alleged that Park Jin Hyok was responsible for the hack of Sony Pictures in 2014, the theft of $80m from the Bangladesh Central Bank in 2016, and the WannaCry malware attack in 2017.

The US government also alleged that Hyok targeted Lockheed Martin, which built an anti-missile defence system deployed in South Korea.

Met… North Korea’s notorious cyber villain, hacking wizard and undisputed evil genius.

Hyok was charged in a 179-page criminal complaint that detailed his alleged hacks on behalf of the North Korean government from 2014 through to 2018. The filing does not name any other individuals but a DoJ official said its investigation was ongoing. At the same time, the US Treasury announced sanctions against Hyok and Chosun Expo Joint Venture, the company he worked for. The DOJ claimed the company was a front designed to generate currency for North Korean intelligence.

“Working for a foreign government does not immunise criminal conduct,” said John Demers, assistant attorney-general for the DoJ’s national security division. In noting previous cyberhacking charges against Chinese, Russian and Iranian nationals going back to 2014, Demers said that  “today we add the North Korean regime to our list,” he said, which made “four out of four of our principal adversaries in cyber space.”

“These activities run afoul of acceptable norms of behaviour in cyber space and the international community must address them,” he added.

Ironically – or perhaps intentionally – the DOJ announcement of the charges came just hours after Donald Trump tweeted praise from the North Korean leader.

“Kim Jong Un of North Korea proclaims ‘unwavering faith in President Trump’. Thank you to Chairman Kim. We will get it done together!” Mr Trump tweeted on Thursday morning.

A senior DoJ official said the department had given “our partners in the US government a heads-up” regarding the action, as normal. The official declined to provide detail on why the justice department chose to unseal the complaint at this time, according to the FT. It was filed in the central district of California in June.

The FBI has previously identified North Korea as responsible for the hack of Sony 2014, which the US said was in retaliation for The Interview, a movie that mocked the North Korean leader. Last year, the Trump administration also attributed the WannaCry ransomware attack to North Korea.

The charges against Hyok come as US officials grow increasingly frustrated that North Korea has not made any moves towards denuclearisation following the historic summit between Mr Trump and Mr Kim in June. After the summit, Mr Trump and Mike Pompeo, the secretary of state leading the North Korea talks, defended the agreement reached in Singapore against accusations that it was too vague.

Today’s release may therefore be a nudge to Trump to push forward with escalating the peace process, or else engage in further sanctions.

In recent weeks Trump himself has conceded that negotiations are not progressing well — to the point that he told Mr Pompeo to cancel a visit to Pyongyang where the secretary of state had been expected to meet Kim.  After a gap of six months, the US in August started imposing more North Korea-related sanctions, as it attempted to step up economic pressure on Pyongyang. China has reportedly been easing some of the measures that it had imposed in accordance with UN sanctions on the North Korean regime.

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Short Seller Andrew Left Files Securities Fraud Lawsuit Against Tesla, Elon Musk

Citron Research’s famous short seller Andrew Left is the latest to carry the torch for Tesla skeptics and shorts. 

In a Securities Class Action complaint that was filed on September 6, 2018 (link here), noted short seller Andrew Left of Citron Research has sued Tesla, naming both the company and Elon Musk as defendants. In the suit, Left claims that Musk/Tesla “artificially manipulated the price of Tesla securities to damage the Company’s short sellers”.

Left alleges that Musk “artificially manipulated the price of Tesla securities with objectively false tweets in order to ‘burn’ the company’s short sellers.” It calls Musk’s actions a “fraudulent scheme”.

Speaking on behalf of short sellers, Left then goes on to state what an important role they play in the market. He also lays out that company’s sometimes try to “squeeze” out short sellers. After this, he makes the case that Musk’s actions followed a slate of “ill conceived” attempts to artificially manipulate the price of Tesla [stock] in order to create such a squeeze. 

Left alleges that Musk’s August 7th tweets regarding going private were “materially false and misleading”.

The suit lays out all communication from Musk and the company after the Tweet was posted and documents all press accounts of what happened, in order to try and make the case that there was never a go-private deal to begin with. 

Further, the suit alleges scienter, claiming Musk “acted with scienter in that [he] knew or was reckless as to whether the statements he made were materially false and misleading.” 

Left alleges on behalf of a class that economic loss took place as a result of Musk’s “false and misleading statements” and “scheme to deceive the market”

The suit has 3 counts:

  1. Violation of Section 10 (b) of the Exchange Act and Rule 10b-5 Against All Defendants 
  2. Violation of Section 10 (b) of the Exchange Act and Rule 1b-5 for Market Manipulation
  3. Violation of Section 20 (a) of the Exchange Act, specifically against Elon Musk

Attached to the suit is the following declaration, which, along other things, states that Left is willing to act as lead plaintiff: 

More interestingly, there are 3 pages of trading exhibits that show Left transacting in tens of millions of dollars in Tesla stock and options, using two accounts, over about 11 days. 

Ahead of the coming lawsuits against Tesla, we will be interested to see if this particular case goes to discovery, and we’d be willing to bet that Left is hoping the same.

Full lawsuit below

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Cynthia Nixon Has No Idea How Much New York’s Millionaires Pay in Taxes. She Wants Them To Foot the Bill For Her Progressive Agenda Anyway.

Cynthia Nixon wants millionaires to pay their fair share of taxes. Also, Cynthia Nixon does not know how much millionaires pay in taxes already.

On Wednesday, the former Sex and the City actress and New York gubernatorial candidate sat down with the New York Daily News editorial board to discuss the finer points of her sweeping, progressive policy agenda, which includes spending billions more on education, transit, and healthcare.

To pay for all these policies, Nixon is looking at soaking the rich. Her #fixthesubway plan would rely in part on a millionaire’s tax. The Medicare-for-all bill Nixon’s endorsed would require high income earners and their employers to spend thousands more on healthcare than they currently do. And her $7.4 billion education plan? Fat cats will be on the hook for that one, too.

“That sounds expensive,” Nixon said of her education plan to the Wall Street Journal. “You know what? It is, and it should be. We can do it by requiring that millionaires, and billionaires and corporations, who this economy has blessed, pay their fair share for all of our children.”

Yet when the Daily News Ed. Board asked Nixon some basic questions about the burden already shouldered by New York’s high-income earners, the candidate was reportedly flummoxed.

“Though she has made imposing a millionaire’s tax to help fund education and the subways a central theme to her campaign, Nixon, who is a first-time candidate with no state government experience, did not know the top income tax rate in New York, which is 8.82%. She also couldn’t say how much of the income taxes raised for the state budget comes from millionaires—it’s 40%—or offer a ballpark figure.

She said she worries there could be a breaking point where the wealthy decide to leave the state, but doesn’t believe New York has hit that situation yet. She also said that by offering corporations and the wealthy tax breaks, it’s starving the state of needed revenue to improve schools and infrastructure, all things businesses look for when deciding where to locate.”

For someone who has made squeezing more money out of high income earners the lynchpin of her progressive campaign, this is a shocking and telling display of ignorance. It reveals an unfounded belief—not uncommon among many on the progressive left—that all that is needed to erect a Nordic-style social welfare system is higher and more progressive income taxes.

Yet, the fact is paying for expansive healthcare and educational benefits for everyone requires taxing everyone, not just a small but wealthy slice of corporations and high-income earners. Indeed, countries like the Denmark and Sweden manage to pay for their welfare states only through higher rates of taxation applied to a very broad base of people.

According to a 2015 Tax Foundation study, Denmark’s top marginal income tax bracket of 60 percent kicks in for income earners making over 120 percent of national median income (which would be about $70,000 here in the United States), and the country charges a 25 percent value added (sales) tax. In the U.S. one has to make about 700 percent of the national median income ($400,000) before they’re subject to top marginal tax rates. The U.S. also has no value added tax, with the steepest sales taxes in the country barely cracking 10 percent.

Despite this, leading lights of the progressive left continue to talk about their plans for the welfare state’s expansion as if it can be born on the backs of the wealthy alone.

Sen. Bernie Sanders (I–Vt.)—America’s most prominent self-identified socialist—continues to call tax hikes on millionaires and billionaires “the fairest way…to guarantee health care as a right,” and his plan for funding Medicare-for-all includes a whole section on “options to make the wealthy pay their fair share.”

Yet when one totals up the money Sanders expects to raise from those options, it amounts to $4.5 trillion over ten years. That’s a princely sum that still pales in comparison to the $32.5 trillion costs of his Medicare-for-all legislation.

At best, this focus on taxing the rich by Nixon, Sanders, and co. on taxing the rich to pay for their chosen policies demonstrates a naiveté about the costs of these programs. At worst, it’s a craven attempt to win office using bait-and-switch plans that won’t actually deliver what progressive candidates promise.

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4 Dead, 2 Injured in Shooting at Cincinnati Bank

A shooter opened fire at a skyscraper in downtown Cincinnati this morning, killing three people and injuring at least two more. The suspect later died after exchanging gunfire with police.

The shooting occurred at the loading dock and lobby area of the Fifth Third Center, according to Fox News. The building serves as the corporate headquarters of Fifth Third Bank.

It’s not clear what the shooter’s motives were. “[The gunman] was actively shooting at innocent victims, it appears, and our officers were able to kill him and stop the threat,” Cincinnati Mayor John Cranley said at a press conference. No officers were injured in the shooting.

The victims were taken to University of Cincinnati Medical Center. One of the injured is in serious condition, while the other is in critical condition.

Authorities have yet to release the identity of the shooter, but the Hamilton County Sheriff’s Office told WLWT that police are currently searching the suspect’s home in North Bend, Ohio.

Witnesses described the terrifying scene. Leonard Cain tells The Cincinnati Enquirer that he was about to walk into the bank until someone told him about the shooting. Passersby tried to similarly warn a woman not to enter the building, but she couldn’t hear them over her headphones. “She walked in the door and he shot her,” Cain says.

Some didn’t have to see the shooter to know something was wrong.”We did hear a gun shooting from the 29th floor,” a manager at the bank tells WXIX. “We could quickly see there was a large police presence and could see them blocking Fountain Square. We knew immediately something was wrong. We’re a bit rattled.”

By the Enquirer‘s count—which defines “mass shooting” by the total number of victims, not the number of people killed—this is the 15th mass shooting in the area since 2013, and also the deadliest.

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Psychic Nikki Haley: If There Is A Future Chemical Weapons Attack, Assad Did It

Authored by Caitlin Johnstone via Medium.com,

UN Ambassador and Clairvoyant Prognosticator of the Transmundane Nikki Haley has foreseen that, if there are any future chemical weapons attacks in the Syrian province of Idlib, it will most definitely be the Syrian government that is responsible and not the multiple terrorist factions in the area.

“If they want to continue to go the route of taking over Syria, they can do that,” said Nikki Haley at a UN press conference today, without explaining how a nation’s only recognized government can ‘take over’ the country it governs.

“But they cannot do it with chemical weapons. They can’t do it assaulting their people. And we’re not gonna fall for it. If there are chemical weapons that are used, we know exactly who’s gonna use them.”

Haley was referring to the Syrian government’s impending push to complete its military campaign of recapturing its land from the terrorist factions and militias who, with extensive help from the US and its allies, have been holding communities hostage in a failed attempt to take over Syria. Her supernatural prophecy is just the latest in an increasingly bizarre string of claims being advanced by political figures and establishment media that the Assad government is planning to use chemical weapons to complete that campaign in Idlib.

Their narrative is that the Russian government’s warnings of a plot by the Al Qaeda-linked terrorist factions occupying the region to stage a chemical weapons attack and frame the Syrian government for it are actually just a preemptive “smoke screen” to allow them to get away with committing war crimes. When Haley said “we’re not gonna fall for it,” this is the ‘it’ she was referring to.

So let’s unpack that a bit. I’m going to propose two different possibilities to you, and you decide for yourself which one is the more likely event to occur in the future:

Possibility 1: The actual, literal terrorist factions occupying Idlib are on the cusp of defeat with nowhere to escape to. They know for a fact that the US and its allies have launched repeated attacks on the Syrian government following chemical weapons allegations without first waiting for an investigation into those allegations. They also know for a fact that multiple high level officials in the western alliance have stated they will carry out aggressive attacks against the Syrian government in retaliation for any perceived chemical weapons attacks, and, thanks to the public prognostications from Madame Haley’s crystal ball, they also know that the Syrian government has already been assigned blame for any such attack in advance. Knowing all of these things, with their backs against the wall with the absolute certainty that getting the western military alliance on their side is their last and only chance, they get their hands on some chemical weapons and kill some of the civilians they’ve captured.

Possibility 2: On the cusp of victory, the Assad government decides to do the one thing that risks a US-led regime change military intervention in order to accomplish the crucial strategic masterstroke of killing a few kids with chlorine or sarin in front of a bunch of White Helmets cameras.

While you are weighing those two options, consider for a moment the fact that the US and its allies have an extensive history of attempting to control who governs Syria, and indeed plotted to create a violent uprising exactly as it occurred in 2011. Not after the violence had already started, but years in advance.

This is not my opinion, and it is not a conspiracy theory. It is a known fact that you can verify for yourself:

  • Here is a 2006 WikiLeaks cable in which the US government is seen exploring possible factions which could be incentivized to rise up against Assad, and ways in which psyops could be used to ensure widespread violence.

  • Here is a declassified CIA memo from 1986 in which the Central Intelligence Agency is seen exploring ways in which sectarian tensions can be inflamed to provoke a violent uprising in Syria. Here is a useful articlefeaturing excerpts from the memo showing some jarring parallels between what was being planned and what happened a quarter century later.

  • Here is a video clip of General Wesley Clark naming Syria among the countries scheduled by the Pentagon for regime change in the wake of 9/11.

  • Here is a video clip of the former Foreign Minister of France stating in plain language that he was informed by British government insiders in 2009 that a violent Syrian uprising was being planned, two years before the violence erupted.

  • Here is an article featuring a video of the former Qatari Prime Minister stating that the US and its allies were involved in the violence from the very beginning.

  • Here is an article from May of 2011 reporting on some of the extremely suspicious provocations that led to the outbreak of widespread violence. Here’s another from March 2011. Here’s another from December 2011.

You get the picture. If a man had documented his plans to murder his wife with an axe, and those plans were found after his wife turned up dead of axe wounds exactly as he’d planned them, and multiple people in the area said they’d heard him murdering her with an axe, the primary suspect in that case would not be the neighbor’s cat.

The violence in Syria was planned and orchestrated years in advance, and now hundreds of thousands of human beings are dead as a direct result. And these monsters are now pretending to be concerned about human rights?

No. Get out of Syria, you absolute ghouls. Everyone responsible for perpetrating and sustaining these horrors should spend the rest of their lives in a Hague cell. If there is a chemical weapons attack as the Syrian government moves to recapture Idlib, the last people anyone should believe is the psychopathic governments who are responsible for this catastrophe in the first place.

*  *  *

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Sanctions Lead to Creative Condoms for a Communist Cuba

|||ENRIQUE DE LA OSA/REUTERS/NewscomIn a communist country like Cuba, you have to be innovative to make up for the absence of goods more widely available in open markets.

According to a Reuters report, latex condoms are one such vector for problem solving. Cubans have found uses for them that include fishing, fermenting wine, and tying up hair.

Last year, the Associated Press interviewed Orestes Estevez, a Cuban winemaker who used condoms to ferment his fruit wines. “Putting a condom on a bottle is just like with a man,” he told AP. “It stands up, the wine is ready, and then the process is completed.”

Reuters goes on to explain that a box of three latex condoms are as cheap as one Cuban peso, the equivalent to four cents. This is especially significant when considering that the average state wage on the island is $30 a month. The product is cheap because of a mix of government subsidies and a heightened focus on sexual health. As for how condoms became an acceptable replacement for products such as hair ties, Cuban consumers can look to a centralized economy and foreign economic interventions such as U.S. sanctions and embargoes, all of which have led to desolate markets and expensive imports.

A number of American politicians have spoken out against the American government’s role in this. Before Sen. Jeff Flake (R–Ariz.) accompanied former President Barack Obama on a historical trip to the island in 2016, Flake told Reason that “It always bothered me that as a Republican we preach the gospel of contact and commerce and trade and travel, yet with Cuba we turn around and say, ‘No, it’s not going to work there.'” Flake also observed that economic interventions have affected American citizens by limiting their freedom to travel to the island. In 2017, Sen. Rand Paul (R–Ky.) argued in Reason that the embargo placed on Cuba over half a century ago has done “absolutely nothing” to remove figures like the now-deceased Fidel Castro from power. In fact, Paul said the embargoes may have indirectly kept him in power longer.

Bonus link: John Stossel encourages President Trump to embrace free trade with Cuba.

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Law & Order: Hate Crimes Is a Bad Idea Built on Worse Statistics

An upcoming iteration of Law & Order will focus on hate crimes, that nebulous category of criminal offense that has become a locus of debate since Donald Trump’s election. NBC announced on Tuesday that it had commissioned 13 episodes of Law & Order: Hate Crimes, a series based on the Hate Crimes Task Force within the New York City Police Department (NYPD).

This “elite, specially trained team of investigators” is housed within the department’s Special Victims Unit (SVU), which also houses creator and executive producer Dick Wolf’s longest-running franchise, the launched-in-1998 Law & Order: SVU. And, boy, does Wolf sound sanctimonious about his new project.

“I want to depict what’s really going on in our cities,” said Wolf in a statement.

Twenty years ago when SVU began, very few people felt comfortable coming forward and reporting these crimes, but when you bring the stories into people’s living rooms … a real dialogue can begin. That’s what I hope we can do with this new show in a world where hate crimes have reached an egregious level.

In addition, NBC programming exec Lisa Katz said in a statement Law & Order: Hate Crimes is extremely timely “considering that last year there was a double-digit rise in hate crimes in our 10 largest cities—the highest total in over a decade.” The FBI defines hate crime as any “offense against a person or property” that is “motivated in whole or part by an offender’s bias against a race, religions, disability, sexual orientation, ethnicity, gender, or gender identity” (and would be better named bias-based offenses).

But there’s actually no evidence, save for misleading media headlines, that there’s been an “egregious” spike in bias-based offenses, not since Trump was elected nor over the past decade. In 2016, the most recent year for which the FBI has data, the national hate-crime rate was significantly lower than had been reported in 2001, 2006, 2008, or 2012.

“Hate crimes in 2016 were down 19.7 percent over the previous 10 years,” noted professors Brian Levin, James J. Nolan, and John David Reitzel in a June article at The Conversation, and “far below 2001’s record high.”

Levin—who is director of the Center for the Study of Hate and Extremism at California State University San Bernardino—and his colleagues conducted their own research to get a measure of hate-crime reports in 2017, since the FBI data is not due out until November. They’re the ones who broke down data from America’s 10 largest cities, finding the “double-digit rise in hate crimes” that Katz mentioned—albeit just barely. On average, incidents were up 12 percent (from 923 incidents to 1,038).

In New York City specifically, hate crimes last year were down two percent from 2016, and lower than they had been in 2010 (339 reports last year, versus 350 at the start of this decade). Hate crime rates fell in other top-10 cities last year, too, including Chicago (down 14 percent) and San Antonio (down 60 percent).

But these drops were offset by larger increases in some cities. Overall, the 2017 study found an additional 115 incidents reported in the 10 biggest cities, with 49 percent of these coming from Phoenix and about one-fifth apiece coming from Los Angeles and San Jose.

So far, their 2018 data shows more city-specific drops, in New York City—96 reported hate crimes through April 30 this year, versus 132 at that time in 2017—as well as cities such as Washington, D.C. and Seattle. They note that “only a small number of agencies have partial year data for 2018, but most are down significantly.”

Between their data and the FBI’s, there’s little to hint at a cohesive explanation for fluctuations (though the authors do try to pin any recent increases on Russian influence). Many areas have shifted back and forth between slight annual increases and slight annual decreases. Some show dramatic spikes or falls all of a sudden, in contrast to areas around them. Some report no such incidents officially, though such incidents make local news.

The problem with Law & Order: Hate Crimes isn’t just that it’s premised on tortured statistics, however. If there’s anything this country does not need right now, it’s more stoking of identity-based tensions and televised depictions of discord based on them.

To be clear, I’m not worried that people otherwise unbiased and unmotivated to commit crimes will suddenly get a hankering to go spray paint their local park with swastikas after watching the show.

I am worried that people’s perceptions of the prevalence of bias-based incidents and the likelihood of fair treatment from cops and the criminal justice system will be shaped by it in unsavory ways (remember the CSI effect?). And these ways tend to reinforce calls for carceral solutions, that wind up entrenching state power and strengthening systems of abuse at the expense of vulnerable and minority groups.

If Law & Order: Hate Crimes must exist, however, I do have some recent ripped-from-the-headlines suggestions for plot lines:

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Goldman’s Primer On How To Trade The Next $200BN In China Tariffs

The public comment period for the Trump Administration’s proposed US$200 billion in additional tariffs on China ends later today, and while a number of details are uncertain, Goldman is confident that the White House will move forward with these tariffs, imposing a rate of 10% on consumer goods and 25% on other (industrial/intermediate) products.

And with traders looking for ways to position ahead of the announcement once it is announced by Trump, most likely some time tomorrow, Goldman notes that tariffs on China can affect FX markets through three main channels:

  • (i) by lowering expectations for Chinese growth,
  • (ii) by causing a general decline in risk tolerance and therefore weakness in riskier currencies, and
  • (iii) by weakening the Chinese Yuan relative to the US Dollar. Each of these channels has different implications for currency markets.

This is shown in the Venn diagrams below:

How should investors concerned about a worse-than-expected outcome for the US-China trade disputes trade? Goldman’s summary is the following:

  • (i) sell USD/JPY,
  • (ii) buy USD/KRW, and
  • (iii) remain tactically cautious about high-beta EM FX, even for currencies outside the region. Long JPY/KRW would likely be the cleanest tail risk hedge consistent with our views.

Commenting further on the above, Goldman notes that weakness in Chinese growth expectations tends to affect currencies with close economic ties to China, especially its regional neighbors and certain commodity exporters.

A broader pullback in risk assets affects a number of these currencies as well, but also other risk-sensitive EM exchange rates with smaller economic links to China. In contrast, CNY depreciation affects a different set of currencies — most notably Asian exporters that compete with China in third markets. Two currencies are particularly notable in this graphic: (i) the Korean Won, which ticks all of the boxes, and (ii) the Yen, which trends to depreciate alongside CNY weakness, but appreciate in times of falling global risk tolerance.

In addition to this statistical analysis, some features of the current market environment should be taken into account, Goldman adds. In particular, three factors have changed over the course of the summer that should affect optimal trade conflict hedging strategies.

  • First, the Trump Administration has expressed its displeasure with USD strength, particularly against the CNY, and the PBOC has taken steps to stabilize the Yuan. In our view this implies that the “CNY devaluation” channel will be less significant this time around — with the Yuan remaining stable or depreciating only very gradually.
  • Second, market sentiment around EM assets has become much more fragile. This might imply that spillovers to EM currencies outside of Asia could be more meaningful.
  • Third, partly reflecting the prior point, valuations are much cheaper for many EM currencies as well as certain commodity prices (especially copper).

With these points in mind, Goldman’s FX team urges investors looking to hedge a worse-than-expected outcome in the US-China trade dispute should, to do the following:

  • (i) sell USD/JPY, as the Yen’s strong response to a worsening risk environment would likely outweigh the effects of declining Chinese demand expectations and any modest weakening in the Yuan,
  • (ii) buy USD/KRW, which remains at the center of the storm, and
  • (iii) remain tactically cautious about high-beta EM FX, even for currencies outside the region. Long JPY/KRW would likely be the cleanest tail risk hedge.

Of course, if the quality of Goldman’s FX predictions in the past is any indication, and assuming that much of the worst case scenario is already priced in by the market, one should probably do the opposite of everything that the bank suggests.

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Cory Booker Risks Senate Expulsion, Releases Confidential Kavanaugh Emails About ‘Racial Profiling’

Sen. Cory Booker (D-N.J.) followed through today on his vow to risk expulsion from the Senate by releasing confidential emails from Supreme Court nominee Brett Kavanaugh.

“I understand the penalty comes with potential ousting from the Senate,” Booker stated. “I openly invite and accept the consequences of my team releasing that email right now.”

The emails in question, dating back to Kavanaugh’s time as a lawyer in the George W. Bush administration, had been labeled “committee confidential,” meaning only senators on the Senate Judiciary Committee had access to them. But Booker released the messages anyway, arguing they’re not “national security-related.”

Booker made public twelve pages of emails, including a thread with the subject line “Racial Profiling.” In one of the emails, dated January 17, 2002, Kavanaugh wrote that while he “generally favor[s] effective security measures that are race-neutral,” it’s still necessary to “grapple…with the interim question of what to do before a truly effective and comprehensive race-neutral system is developed and implemented.”

Booker’s acknowledgement that he’s “knowingly violating” Senate rules is the latest development in Kavanaugh’s contentious confirmation hearing before the Judiciary Committee. Booker questioned Kavanaugh over the emails yesterday, prompting a protest from Sen. Mike Lee (R–Utah), who pointed out that Booker was grilling Kavanaugh over documents he “can’t see.”

According Sen. Chuck Grassley (R–Iowa), there was a clear process in place for senators to request that certain documents be cleared for public release. Booker disagreed, referring to “this process as a bit of a sham.” The New Jersey Democrat indicated that by releasing the documents, he’s engaging in “civil disobedience.”

Republicans condemned Booker, accusing him of grandstanding. Senate Majority Whip John Cornyn (R–Texas) even read the Senate rules to his colleague during the hearing. But Booker said it didn’t matter. “Bring it. Bring it. Apply the rule and bring the charges. Bring it,” he replied to Cornyn.

Booker got some backup in his act of “civil disobedience” from many of his Democratic colleagues. Senate Minority Leader Chuck Schumer (R–N.Y.) and Minority Whip Dick Durbin (R–Ill.) as well as Sens. Sheldon Whitehouse (D–R.I.), Richard Blumenthal (D–Conn), and others expressed their support for Booker.

While Booker has been praised by liberals for releasing the emails, one can’t ignore his ulterior motives. Though he hasn’t said yet if he’ll run for president in 2020, he’s expected to be one of the top democratic contenders if he does. Making a scene at a high-profile confirmation hearing can only boost his profile and improve his chances of one day winning the Democratic nomination.

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