Month: April 2019

Authored Dagny Taggart via The Organic Prepper blog,

Experts have been warning us about potential dangers associated with artificial intelligence for quite some time. But is it too late to do anything about the impending rise of the machines?

Once the stuff of far-fetched dystopian science fiction, the idea of robot overlords taking over the world at some point now seems inevitable.

The late Dr. Stephen Hawking issued some harsh and terrifying words of caution back in 2014:

The development of full artificial intelligence could spell the end of the human race. It would take off on its own, and re-design itself at an ever-increasing rate. Humans, who are limited by slow biological evolution, couldn’t compete, and would be superseded. (source)

Elon Musk, the founder of SpaceX and Tesla Motors, warned that we could see some terrifying issues within the next few years:

The risk of something seriously dangerous happening is in the five year timeframe. 10 years at most. Please note that I am normally super pro technology and have never raised this issue until recent months. This is not a case of crying wolf about something I don’t understand.

The pace of progress in artificial intelligence (I’m not referring to narrow AI) is incredibly fast. Unless you have direct exposure to groups like Deepmind, you have no idea how fast — it is growing at a pace close to exponential.

I am not alone in thinking we should be worried.

The leading AI companies have taken great steps to ensure safety. They recognize the danger, but believe that they can shape and control the digital superintelligences and prevent bad ones from escaping into the Internet. That remains to be seen… (source)

Experts say it is time to study “machine behavior.”

Last week, a team of researchers made a case for a wide-ranging scientific research agenda aimed at understanding the behavior of artificial intelligence systems. The group, led by researchers at the MIT Media Lab, published a paper in Nature in which they called for a new field of research called “machine behavior.” The new field would take the study of artificial intelligence “well beyond computer science and engineering into biology, economics, psychology, and other behavioral and social sciences,” according to an MIT Media Lab press release.

Scientists have studied human behavior for decades, and now it is time to apply that kind of research to intelligent machines, the group explained. Because artificial intelligence is doing more collective ‘thinking,’ the same interdisciplinary approach needs to be applied to understanding machine behavior, the authors say.

“We need more open, trustworthy, reliable investigation into the impact intelligent machines are having on society, and so research needs to incorporate expertise and knowledge from beyond the fields that have traditionally studied it,” said Iyad Rahwan, who leads the Scalable Cooperation group at the Media Lab.

Machines are making decisions and taking action without human input.

Rahwan explains:

“We’re seeing the rise of machines with agency, machines that are actors making decisions and taking actions autonomously. This calls for a new field of scientific study that looks at them not solely as products of engineering and computer science but additionally as a new class of actors with their own behavioral patterns and ecology.” (source)

This is particularly concerning, especially considering we already know that AI can hate without human input and that robots have no sense of humor and might kill us over a joke.

“We’re seeing an emergence of machines as agents in human society; these are social machines that are making decisions that have real value implications in society,” says David Lazer, who is one of the authors of the paper, as well as University Distinguished Professor of Political Science and Computer and Information Sciences at Northeastern.

We interact numerous times each day with thinking machines, as the press release explains:

We may ask Siri to find the dry cleaner nearest to our home, tell Alexa to order dish soap, or get a medical diagnosis generated by an algorithm. Many such tools that make life easier are in fact “thinking” on their own, acquiring knowledge and building on it and even communicating with other thinking machines to make ever more complex judgments and decisions—and in ways that not even the programmers who wrote their code can fully explain.

Imagine, for instance, a news feed run by a deep neural net recommends an article to you from a gardening magazine, even though you’re not a gardener. “If I asked the engineer who designed the algorithm, that engineer would not be able to state in a comprehensive and causal way why that algorithm decided to recommend that article to you,” said Nick Obradovich, a research scientist in the Scalable Cooperation group and one of the lead authors of the Nature paper.

Parents often think of their children’s interaction with the family personal assistant as charming or funny. But what happens when the assistant, rich with cutting-edge AI, responds to a child’s fourth or fifth question about T. Rex by suggesting, “Wouldn’t it be nice if you had this dinosaur as a toy?”

“What’s driving that recommendation?” Rahwan said. “Is the device trying to do something to enrich the child’s experience—or to enrich the company selling the toy dinosaur? It’s very hard to answer that question.” (source)

There is still a lot we don’t know about how machines make decisions.

What hasn’t been examined as closely is how these algorithms work. How do they evolve with use? How do machines develop a specific behavior? How do algorithms function within a specific social or cultural environment? These issues need to be studied, the group says.

There is a significant barrier to the type of research the group is proposing, however:

But even if big tech companies decided to share information about their algorithms and otherwise allow researchers more access to them, there is an even bigger barrier to research and investigation, which is that AI agents can acquire novel behaviors as they interact with the world around them and with other agents. The behaviors learned from such interactions are virtually impossible to predict, and even when solutions can be described mathematically, they can be “so lengthy and complex as to be indecipherable,” according to the paper. (source)

And, there are ethical concerns surrounding how AI makes decisions:

Say, for instance, a hypothetical self-driving car is sold as being the safest on the market. One of the factors that makes it safer is that it “knows” when a big truck pulls up along its left side and automatically moves itself three inches to the right while still remaining in its own lane. But what if a cyclist or motorcycle happens to be pulling up on the right at the same time and is thus killed because of this safety feature?

“If you were able to look at the statistics and look at the behavior of the car in the aggregate, it might be killing three times the number of cyclists over a million rides than another model,” Rahwan said. “As a computer scientist, how are you going to program the choice between the safety of the occupants of the car and the safety of those outside the car? You can’t just engineer the car to be ‘safe’—safe for whom?“ (source)

The researchers explain that it will take experts from a host of scientific disciplines to study the way machines behave in the real world, as a press release from Northeastern University states. “The process of understanding how online dating algorithms are changing the societal institution of marriage, or determining whether our interaction with artificial intelligence affects our human development, will require more than just the mathematicians and engineers who built those algorithms.”

via ZeroHedge News http://bit.ly/2J29zwF Tyler Durden

The Trump administration is gearing up to issue an order that would designate the Muslim Brotherhood a foreign terrorist organization after Egypt’s president encouraged President Trump to do so while visiting the White House earlier this month, according to the New York Times, citing loose-lipped officials familiar with the matter. According to the report, National Security Adviser John Bolton and Secretary of State Mike Pompeo are supportive of the idea – which has been under consideration since 2017. 

The designation would bring the weight of American sanctions on the influential Islamist political movement which counts millions of members in its ranks, as well as those who interact with or support the organization (such as Turkey’s President Erdogan). 

The White House directed national security and diplomatic officials to find a way to place sanctions on the group after a White House visit on April 9 by President Abdel Fattah el-Sisi of Egypt, for whom the Brotherhood represents a source of political opposition. In a private meeting without reporters and photographers, Mr. el-Sisi urged Mr. Trump to take that step and join Egypt in branding the movement a terrorist organization. –New York Times

The Muslim Brotherhood is already listed as a terrorist organization by Russia, Syria, Egypt, Saudi Arabia, Bahrain, the UAE and the post-Soviet CSTO states. 

The motion has sparked an internal debate within the administration, according to the report, “including at a senior-level meeting of policymakers from various departments convened last week by the White House’s National Security Council,” according to the leaky officials. 

“…the Pentagon, career national security staff, government lawyers and diplomatic officials have voiced legal and policy objections, and have been scrambling to find a more limited step that would satisfy the White House,” reports the Times. 

Press Secretary Sarah Huckabee Sanders acknowledged the push to designate the Muslim Brotherhood as terrorists, saying “The president has consulted with his national security team and leaders in the region who share his concern, and this designation is working its way through the internal process.” 

Officials opposed to the designation have argued that the criteria for designating a terrorist organization don’t apply to the Muslim Brotherhood, “which is less a coherent body than a loose-knit movement with chapters in different countries that either use that moniker or have strong historical ties to it.” Meanwhile, various political parties in places such as Jordan and Tunisia identify as being part of the Muslim Brotherhood, or acknowledge ties to it, while stating they oppose violent extremism. 

As a matter of policy, such a designation could have rippling consequences, including further stressing relations with Turkey, whose president, Recep Tayyip Erdogan, is a staunch Brotherhood supporter. It is also unclear what the consequences would be for Americans and American humanitarian organizations with links to the group, and human rights officials have worried that Mr. el-Sisi might use it to justify an even harsher crackdown against his opponents.

Among the alternative ideas raised at the meeting last week were trying to identify and target a terrorist-linked group with ties to the Brotherhood that has not yet been designated or limiting any designation’s scope to the Egyptian branch, officials said. –New York Times

If you recall from 2013, el-Sisi is a former Egyptian general who helped lead a coup to overthrow Mohamed Morsi – Egypt’s first democratically elected president and a former leader within the Muslim Brotherhood. Morsi and other senior figures from the then-ruling Muslim Brotherhood was sentenced to 20 years in prison in connection with the killings of protesters during 2012 demonstrations.

The men were convicted in April 2015 on charges including kidnapping, torture and the killings of protesters during unrest in 2012. The Muslim Brotherhood denies responsibility and says that most of those killed were from its own ranks. –SMH

The Trump administration had weighed whether to designate both the Muslim Brotherhood and an arm of Iran’s military, the Islamic Revolutionary Guards Corps, as terrorist organizations during its chaotic first weeks in 2017. But the ideas lapsed amid objections from career professionals and the fallout from other capricious early steps, like Mr. Trump’s ban on visitors from several predominantly Muslim countries.

But this spring, the administration abruptly pushed through the terrorist designation for the Revolutionary Guards. Mr. Pompeo, who has the most important voice in the debate besides Mr. Trump’s because the secretary of state controls the list of designated terrorist organizations, announced sanctions on the Iranian military arm on April 8, the day before Mr. el-Sisi visited the White House. –New York Times

The Muslim Brotherhood was founded in Egypt in 1928, and amassed a secret armed wing to fight against British colonial rule. It grew to 200,000 members by 1936, and over 2 million by 1948. After the Egyptian government arrested 32 leaders of the Brotherhood’s “secret apparatus” in 1948, banning the organization – its ranks fell to around 500,000 members or sympathizers across 2,000 branches. 

via ZeroHedge News http://bit.ly/2PGJeW7 Tyler Durden

CNN and the BBC were quickly taken off the air in Venezuela on Tuesday by the government amid an apparent coup by forces loyal to National Assembly Leader Juan Guaidó.

As reported by CNN, “DirecTV, Net Uno, Intercable, and Telefónica all received orders from Venezuela’s government regulator Conatel to block CNN. (DirecTV and CNN are both owned by AT&T.)” while a spokesperson from the BBC told CNN that BBS Global News had been similarly taken off air by the South American country. 

Momento exacto cuando el gobierno dictador saca del aire a CNN (en inglés) de la parrilla de programación por cable (canal 706) y censura aún más con Conatel.

¿Alguno tiene duda de que la libertad de expresión no existe en Venezuela? pic.twitter.com/WR0XReOWNW

— Jhomar Lóp[e]z (@JhomarLopez) April 30, 2019

Earlier Tuesday, CNN broadcast footage of military vehicles running over protesters in the capital city of Caracas. 

🇻🇪 | REBELIÓN EN VENEZUELA: Tanquetas militares arrollan a grupo de manifestantes en Caracas: pic.twitter.com/BLirOAoFkP

— Alerta News 24 (@AlertaNews24) April 30, 2019

Meanwhile US Secretary of State Mike Pompeo claims that Venezuelan President Nicolas Maduro was willing to leave the country for Cuba, only to be talked out of it by Russia. 

“We’ve watched throughout the day, it’s been a long time since anyone’s seen Maduro,” said Pompeo in an interview with CNN‘s Wolf Blitzer. 

“He had an airplane on the tarmac, he was ready to leave this morning as we understand it and the Russians indicated he should stay,” he added, noting “He was headed for Havana.” 

Secretary Pompeo just told CNN’s Wolf Blitzer that Maduro had a plane on the tarmac ready to go earlier today… but Russia talked him out of it

wow. pic.twitter.com/mouqKcGefW

— Jason K. Morrell (@CNNJason) April 30, 2019

via ZeroHedge News http://bit.ly/2ZJ4HSR Tyler Durden

A new study revealed how youth suicides spiked to a two-decade high following the release of an online streaming television series on Netflix that depicted a young girl ending her life, read a press release.

The study, led by Nationwide Children’s Hospital, published the shocking report Monday, demonstrated how the first episode which aired on March 29, 2017, led to a massive increase in the suicide rate for 10- to 17-year-olds in the following month [April 2017].

“Youth may be particularly susceptible to suicide contagion, which can be fostered by stories that sensationalize or promote simplistic explanations of suicidal behavior, glorify or romanticize the decedent, present suicide as a means of accomplishing a goal, or offer potential prescriptions of how-to die by suicide,” said Jeff Bridge, PhD, director of the Center for Suicide Prevention and the lead author of the study.

More than 190 American tweens in April 2017 took their own lives. That resulted in a suicide rate of .57 per 100,000 people, more than 30% higher than in the preceding five years for the month. An additional investigation determined that the April 2017 suicide rate tagged 19-year highs.

“Portrayals of suicide in entertainment media should avoid graphic detail of the suicide – which the series did not – and adhere to best practice guidelines to reduce risk of subsequent suicide,” Bridge said.

Researchers used “interrupted time series and forecasting models” to examine monthly rates of youth suicides between 1Q13 through 4Q17 — the period of time before the release of “13 Reasons Why.”

“The researchers examined immediate effects and subsequent trends and adjusted for potential effects of seasonality and underlying trends on suicide rates. Data were obtained for cases in which suicide was listed as the underlying cause of death from the Web-based Injury Statistics Query and Reporting System (WISQARSTM) of the Centers for Disease Control and Prevention,” read the press release.

Months after the “13 Reasons Why” airing date, Netflix increased the graphic content advisories and added a warning before the initial episode. Stating:

“13 Reasons Why is a fictional series that tackles tough, real-world issues, taking a look at sexual assault, substance abuse, suicide, and more. By shedding a light on these difficult topics, we hope our show can helps viewers start a conversation. But if you are struggling with these issues yourself, this series may not be right for you or you may want to watch it with a trusted adult. And if you ever feel you need someone to talk with, reach out to a parent, a friend, a school counselor, or an adult you trust, call a local helpline, or go to 13ReasonsWhy.info. Because the minute you start talking about it, it gets easier,” read the series’ warning.

Dr. John Ackerman, a co-author on the study and suicide prevention coordinator at CSPR, said this “study demonstrates parents should be cautious about exposing youth to this series. With a third season of the series expected to air soon, continued surveillance is needed to monitor potential consequences on suicide rates in association with viewing the series.”

Lisa Horowitz, a co-author and researcher at the National Institute of Mental Health, said suicide is one of the top causes of deaths for tweens and called it a “major public health crisis.”

It’s clear that young Americans are highly influenced by media. With a third season expected to return this year, parents have to be extra vigilant when allowing their children to watch such a graphic show.

via ZeroHedge News http://bit.ly/2UQ11LF Tyler Durden

Authored by Justin Murray via The Mises Institute,

One of the most enduring justifications for State intervention in an economy is the concept of wealth inequality. As the story goes, just 1% of the population owns roughly half of the wealth in the world. This is used as justification for a long range of programs, such as welfare, the graduated income tax and multiple components of the Green New Deal. However, the problem with this narrative is it fails to address two major questions:

1. What are the components of that wealth?

2. Who are the primary beneficiaries of that wealth?

Wealth Isn’t Uniform

To begin, we need to first understand how wealth is defined. Wealth, in investment terms, is defined as “the value of all the assets of worth owned by a person, community, company or country.” The underlying issue of the definition of wealth is within the concept of value. Value is not an objective concept; each individual will value every good or service on the planet differently based on personal interests. This is best defined in theParadox of Value. Water is objectively more important to survival than a sack of diamonds; a person living by a river would trade truckloads of water for a sack of diamonds while a person stranded in the Sahara would eagerly trade a sack of diamonds for a CamelBak full of water. This is the underlying purpose of trade — to obtain something of relatively low supply locally for something of local abundance.

The problem here is that such valuations are subjective and highly reliant on meeting specific conditions. If we look at the components of wealth, the wealth of the 1% is made up predominantly of business ownership stakes .

Business ownership is typically represented by stock share in the company. How a person’s wealth is defined here is taking the current listed market price of the stock and multiplying it by the ownership stake of that individual. The problem with this definition is how equity is traded. The value of equity you will see on the Dow Jones is not the value of every share in existence. It is, instead, effectively the last marginal transaction for that particular company. So if Amazon is listing at $1,800 per share, all this means is that someone out there sold one or more shares for $1,800 to someone else. This does not mean that if someone waved $920 billion at the market, they’d be the sole owner of Amazon.

The vast majority of the ~500 million outstanding shares of Amazon are valued more than the listed market price by the holder. To get Jeff Bezos to part with his roughly 20 million shares would require a lot more than $37 billion. However, this does not mean Jeff Bezos is richer than advertised. Conversely, people who don’t own Amazon stock value it below the $1,800 market price. If Mr. Bezos were to face a life-or-death situation in which he needed to pay $37 billion in cash, he would be lucky to come up with a small percentage of that as attempting to dump that many shares on the market at once would collapse the market price.

The issue here is that maintaining high levels of wealth requires never trading in the goods. The only way the wealthy can remain wealthy is to never convert their equity into usable liquidity. While a single share of stock is, in accounting terms, classified as a liquid asset, a large block of shares is about as illiquid as owning a skyscraper or NFL stadium. Because of this, the wealth of the 1% is largely illusory since they realistically can’t use it for anything lest they destroy its apparent value.

Conversely, the bottom 99% posses roughly 15% of their assets in some kind of easily liquid form and their stock assets are significantly more liquid than those in the top. A person with $50,000 in assets can easily liquidate their property without causing a blip in the market pricing. In terms of assets that can be used without suffering a value impairment, the top 1% really only owns about 6% of the assets. While this is still unequal, it’s nowhere near the gaudy 50% frequently presented.

Who Really Benefits

One can easily counter this to say that those assets still primarily benefit the wealth individual and the rest of us are stuck holding the bag. However, this is also not held up as true. If we use the concept of CEO pay disparity, we can demonstrate who really benefits from that wealth.

Take Wal-Mart, a favorite target of unfair wage practice claims. The company’s CEO, Doug McMillon, is accused of earning 1,180 times more than the median worker with an annual compensation package of $22.8 million. To a single individual, $22.8 million seems like a lot of money. But consider that Wal-Mart also has in the order of 2.2 million employees. If the CEO were to take a $1 salary and the company were to spread that over each worker, the worker would receive a one-time bonus of $10. Mr. McMillon would quickly go bankrupt just trying to buy dinner for each employee just once.

If we look at Wal-Mart’s 2018 10-K report, the company produced revenues of $514 billion. Of that, $385 billion was a direct expense, primarily sent down the product chain to suppliers to pay for their workers and suppliers and so forth. Roughly $50 billion went to store workers. Another $107 billion was on SG&A, which can be assumed to be almost entirely labor related, either direct Wal-Mart employees or outside companies paying their workers.

All-told, an estimated $490 billion of those $514 billion in revenues ended up in the pockets of a direct worker somewhere in the world, supporting untold millions. Just the direct Wal-Mart employees collected an estimated 20-25% of the total revenues. The total C-Suite compensation package doesn’t even register as a rounding error. Investors got a dividend of $6 billion, or just 1% of that. It’s important to note that investors are primarily held in individual investment accounts or pension systems, so that also goes back to the line worker.

The wealthy owners of Wal-Mart, the Waltons, only see 0.2% of the economic activity generated by the company. That’s a far cry from the 95% paid to workers and the remainder going to retirement pension accounts for individuals. The workers, or the 99%, are overwhelmingly the beneficiaries of all that wealth the Waltons formally own.

Why the Rich Are Good for Us

Ultimately, these extremely on-paper wealthy individuals have been of an immense value to the rest of us. Without someone taking the risk to form a business, to collect all of our disparate skills that, alone, are worthless and combining them into an organization, we would not be living in a world where poverty and hunger continues to collapse and some countries have gotten so wealthy that people with broadband internet and smartphones are classified as impoverished. This is entirely thanks to all those rich people who are only asking to keep a very small portion of the production their assets produce. Attempting to destroy this with redistribution schemes will ultimately be harmful to the 99%.

via ZeroHedge News http://bit.ly/2Wort08 Tyler Durden

The Sunday Times discovered dozens of billboards with cameras and facial detection software are targeting consumers at shopping malls across the country with personalized ads.

The report found 50 advertising screens with facial detection technology that identifies the age, gender, and mood of consumers, and even monitors their view time behavior of the personalized ads. For instance, millennial men could be standing in front of the billboard; seconds later, a Gillette shaving cream ad is displayed on a giant screen.

Advertisers operating the new system have claimed it fully complies with the Data Protection Act 2018 because no consumer is identified, nor is their data collected or stored.

UK law indicates there is no legal requirement to tell shoppers that they’re being surveilled for commercial purposes.

Ocean Outdoor is the first advertiser to adopt public surveillance technology for smart billboards.

Called the LookOut system, it uses artificial intelligence and cameras to serve adverts to consumers based on gender, age, facial hair, eyewear, mood, and engagement level, stated the Ocean Outdoor’s website.

The company lists several ways in which LookOut can be used:

• Optimization – delivering the appropriate creative to the right audience at the right time.
• Visualize – Gaze recognition to trigger creative or an interactive experience
• AR Enabled – Using the HD cameras to create an augmented reality mirror or window effect, creating deep consumer engagement via the latest technology
• Analytics – Understanding your brand’s audience, post-campaign analysis and creative testing

Ocean Outdoor’s chief executive Tim Bleakley told The Sunday Times: “We pioneered a facial detection technology which identifies the characteristics of the face to allow you to talk to advertisers about mood, gender, emotion and those kind of things.”

“We can measure the level of happiness or sadness. We can measure the dwell time.”

The creepy surveillance technology has already been installed in national supermarket chains like Waitrose Limited and Bleakley said the supermarket’s administrators were able to monitor consumer happiness levels in real-time.

In a promotional video of OutLook, consumers walked past billboards in Westfield. The video says: “3 cameras give the billboard eyes.”

The intelligent billboard’s cameras regularly analyze shoppers and can communicate to advertisers what kinds of people were shopping and when.

Another video showing one of its billboards at Canary Wharf stated that 49% of people who walked by of a given day were wealthy.

Ocean Outdoor plans to use the technology on roadside billboards to determine the model of a vehicle so that adverts based on car price can be be shown on the billboard.

French company Quividi sells facial detection technology says the pictures taken in the OutLook system of consumers are deleted in milliseconds.

Quividi said it could determine someone’s gender with 90% accuracy and age within a five-year bracket.

Mass surveillance with artificial intelligence is now an integral part of the social, economic and political lives of many in the Western world. Advertisers and mega-corporations are spying on British people like never before — as smart billboards with surveillance cameras are the latest evidence a free and open society is a thing of the past.

via ZeroHedge News http://bit.ly/2VzU1GT Tyler Durden

Authored by Jon Street via Campus Reform,

Leftist comedian Bill Maher challenged liberals over the weekend on his HBO show “Real Time with Bill Maher” on a key 2020 issue: free college.

Unlike many in his party, though, Maher challenged the conventional thinking of “free college,” pointing out that it would only hurt the poor.

Maher’s comment came just days after 2020 Democrat presidential candidate Sen. Elizabeth Warren outlined her plan to offer “free” four-year college through raising some taxes. At least two more Democrat 2020 presidential candidates, Sen. Kamala Harris of California and Sen. Bernie Sanders of Vermont, have also indicated they support the idea of “free” four-year college.

Warren, Sanders, Harris, and 2020 Democrat presidential candidate Sen. Amy Klobuchar of Minnesota support “free” two-year college for all. Rep. Alexandria Ocasio-Cortez (D-N.Y.), who is not yet old enough to run for president but introduced the Green New Deal, also is an outspoken supporter of “free” college for all.

Despite multiple presidential candidates in his party supporting “free” college, Maher took a step back, pointing out that “nothing is free.”

“If you have a Bachelor degree, you earn on average 65 percent more than someone who doesn’t have one. If you have a Master’s degree, 100 percent more over the course of your lifetime. So nothing is free. Like a free lunch? No. Neither is college,” Maher said.

“Somebody will be paying for this free college and it will be taxpayers, so are we really saying that someone who didn’t go to college should be subsidizing the people who went and got the benefit from going to college and made more money?”

Maher’s guest, conservative Grover Norquist, agreed, adding, “that’s an incredible transfer from lower-income people to higher income people. If you look at the beneficiaries of that proposal, it is a huge subsidy to higher income people and if you’re out buying votes, you go with the people you think are going to vote.”

via ZeroHedge News http://bit.ly/2V7wqy6 Tyler Durden

For weeks now, those who can see past the White House’s ‘cautious optimism’ regarding the potentiality of the ongoing trade talks with Beijing have probably understood that the year-long trade war with China could end one of two ways: Either Trump walks away from the deal, risking a brutal correction in stocks (which, according to some, is the only barometer of his performance in office that matters to Trump) or cave on several of the administration’s most unpalatable demands.

So far, the White House has already purportedly punted on enforcement (though nothing is set in stone) and backed away from demands that Beijing scrap industrial subsidies.

And according to a just-released report in the FT, Trump has instructed his negotiators, who are presently engaged in talks in Beijing, to drop a demand that China halt the instances of cybertheft that have become such a widely publicized point of contention between China and the West.

To what we imagine is the frustration of Robert Lighthizer, the lead trade negotiator, who has insisted that the US take advantage of its ‘leverage’ to exact the best possible deal or simply walk away and wait, one source told FT that Trump “wants a deal.” End of story.

Donald Trump has dropped a central demand from trade negotiations with China that it halt alleged instances of commercial cyber theft, in order to end a long-running tariff dispute. Mr Trump has softened his administration’s opening position on what it originally characterized as “Chinese government-conducted, sponsored, and tolerated cyber intrusions into US commercial networks,” according to several people briefed on the negotiations. The US is instead likely to accept a watered-down commitment from Beijing as an alternative.

“A lot of issues are being jettisoned from this negotiation because President Trump wants a deal,” one of the people said.  The absence of strong provisions against Chinese theft of US trade secrets will raise concerns that the Trump administration is prepared to settle for limited progress on crucial “structural” reforms in the trade agreement.

Beijng has denied accusations of state-sponsored cyber espionage, and claims that it has been fully compliant with a promise it made to President Barack Obama in 2015. When it comes to the trade deal, the Chinese are adamant that language condemning cyberespionage not be included, per the FT’s source.

“With regards to enforceable benchmarks [on cyber theft], there will be nothing that goes beyond Xi Jinping’s broken promise at the White House in September 2015. They are just going to ignore a core feature of the original [US trade complaint],” the person said. 

And now that the White House has caved, it’s time for some revisionist history as one trade official said the US never expected Beijing to agree to its demands in the first place.

James Green, former head of the USTR’s Beijing office, said it was always unlikely that the trade talks would resolve the two sides’ bitter charges and countercharges over alleged commercial cyber theft. “I don’t think the administration seriously thought that trade talks or tariffs would curb those activities,” said Mr Green, who is now a senior adviser at McLarty Associates. “We could highlight the practice, but it would need to be law enforcement and national technical means that would actually do something,” he said.

Contrary to Mick Mulvaney’s insistence that Trump would only accept a great deal, the FT hinted that the US will be caving on other key demands as the White House scrambles to ensure that the next round of talks in Washington next week will be the last.

In the final stretch of talks, Mr Lighthizer and Mr Mnuchin are expected to try to eke out some eleventh-hour pledges from China in a number of areas, from biotech approvals, to cloud computing, to data protection for drug companies. They will also attempt to finalise the agreement on the enforcement mechanism to ensure compliance with the deal, and the fate of existing tariffs, with the US administration insisting to maintain some of its levies on $250bn of Chinese imports until Beijing meets certain implementation benchmarks. Although Mr Trump has frequently promised that a big trade deal with China was around the corner, US officials insisted that he might still walk away. 

If this report is accurate, then the trade pact might end up resembling Lighthizer’s worst nightmare: An agreement to significantly lower punitive tariffs and drop most of the US’s big demands in favor of a promise by Beijing to buy billions of dollars in agricultural goods – something that Trump could at least take home to America’s suffering farmers.

via ZeroHedge News http://bit.ly/2GMWuod Tyler Durden