Month: May 2021

Small Caps Surge Amid Massive Short-Squeeze, Dollar Dead-Cat-Bounces

Small Caps Surge Amid Massive Short-Squeeze, Dollar Dead-Cat-Bounces

Spot the odd one out!

Small Caps exploded at the cash open (just as they did yesterday) and kept going (unlike yesterday) as Dow, S&P, and Nasdaq trod water. Did Small Caps run the stops and lose momentum?

All thanks to a huge short-squeeze – the second biggest daily jump in “most shorted” stocks this year…

Source: Bloomberg

Squeeeeze…

Small Caps huge surge today was very technical as it bounced off its 100DMA and ran stops above its 50DMA…

Will it hold this time?

And the whipsaws in the Russell/Nasdaq pair are ripping people’s faces off left and right…

Bezos bought Bond today and AMZN shares ended lower, MGM higher…

Mixed bag in bonds today with the longer-end underperforming (but only up around 2bps)…

Source: Bloomberg

10Y yields chopper around in a very narrow range, still well off the FOMC Minutes spike high…

Source: Bloomberg

The dollar bounced back to unchanged on the week…

Source: Bloomberg

Cryptos were higher on the day but gave back early gains during the US session with Bitcoin unable to hold $40k…

Source: Bloomberg

Ether followed a similar path but outperformed bitcoin, testing above $2800…

Source: Bloomberg

ETH trading volumes are overtaking those of BTC…

Gold ended unchanged after a clubbing at around 1345ET took futs down below $1900…

Oil prices chopped around weighing demand pickups with Iran supply concerns (and helped by some notable inventory draws today)…

Commodities were broadly higher today but had a big dip intraday, but is well off the highs…

Source: Bloomberg

And finally, don’t forget the banks keep puking excess over to The Fed (even before month-end window-dressing)…

Source: Bloomberg

Tyler Durden
Wed, 05/26/2021 – 16:00

via ZeroHedge News https://ift.tt/2SzecEY Tyler Durden

US Troops Will Be Out Of Afghanistan By July: Pentagon Officials

US Troops Will Be Out Of Afghanistan By July: Pentagon Officials

Authored by Dave DeCamp via AntiWar.com,

According to a report from The New York Times, US troops are expected to be out of Afghanistan by early to mid-July, well before the September 11th deadline set by President Biden.

Unnamed US officials told the Times that Washington’s allies are also expected to be out by July, although Germany is apparently struggling to keep up the pace. US Central Command on Tuesday said the Afghanistan withdrawal process was about 16 to 25 percent complete.

Getty Images

The US recently handed over Kandahar Airfield to Afghan forces. The Times report said that US fighter jets and other military equipment will start leaving Bagram Air Base in the coming days. Last week, locals told Afghanistan’s Tolo News that the US has shipping truckloads of scrapped equipment out of the Bagram Air Base, which is the largest US military facility in Afghanistan.

Because of the quicker withdrawal, the Pentagon is scrambling for ways to maintain influence and assets in Afghanistan. The US and NATO both plan to continue supporting the Afghan government financially. The Times report said the approximately 17,000 Pentagon contractors in Afghanistan are leaving alongside US and other foreign troops.

The Afghan military is almost entirely reliant on these Pentagon contractors to maintain their equipment, so Afghan officials are looking into hiring contractors of their own, which the US would pay for anyway.

The Pentagon is hoping to reposition military assets into neighboring countries, but the US has no basing agreements in the region. The US might have to settle for launching reconnaissance missions or airstrikes in Afghanistan from bases in the Gulf after the pullout.

Pentagon officials said after the withdrawal, the US would limit airstrikes in Afghanistan to “counterterrorism operations,” a definition that can be used loosely.

The US wants to keep a diplomatic mission in Afghanistan, which would require the Kabul airport to be secure from the Taliban or other militants. Hundreds of Turkish troops are currently guarding the airport, but it’s not clear if they will stay. The US is mulling options to incentivize Ankara into continuing defending the airport. A diplomatic mission in Afghanistan could also be used to justify a small US troop presence.

Washington’s decision to pull out before September is likely an effort to avoid Taliban attacks on withdrawing troops. President Biden broke the US-Taliban peace deal by pushing back the original May 1st withdrawal deadline. Earlier this month, Tolo News reported that the US and the Taliban were in talks to get foreign troops out by sometime in July. In exchange, the Taliban would participate in a planned Afghan peace summit in Istanbul.

Tyler Durden
Wed, 05/26/2021 – 15:45

via ZeroHedge News https://ift.tt/3uovBO0 Tyler Durden

“Change Is Coming” – Engine No. 1 Wins Two Exxon Board Seats  

“Change Is Coming” – Engine No. 1 Wins Two Exxon Board Seats  

Activist firm Engine No. 1 has won at least two seats on the board of Exxon Mobile Corp. following a multi-month battle over the oil giant’s board of directors to change the company’s path towards one centered around achieving net-zero carbon emissions by 2050 or sooner, according to WSJ.

Engine No. 1, an upstart hedge fund, owns a tiny 0.02% stake in Exxon, has gone on a blitz against the company since December to shift away from fossil fuels to a zero-carbon world. The fund was founded by veteran hedge fund investor Chris James. 

Charlie Penner, one of Engine No. 1’s leaders, told investors at Wednesday’s annual shareholder meeting that Exxon management is “determined to fight off the future for as long as possible,” but added: “change is coming.”

According to Reuters, BlackRock, the world’s largest asset manager, owns a 6.7% stake in Exxon and gave full support to Engine No. 1 mission to force new change on the company’s board. The activist fund won support from Legal & General, one of Exxon’s top 20 investors. They also gained support from large pension funds, including CalPERS, calSTRS, and New York State Common Retirement Fund.

Engine No. 1 pushed to add four new members to Exxon’s board. A tally so far shows the activist fund has won at least two seats.

Wednesday’s vote came during Exxon’s annual shareholder meeting, where CEO Darren Woods responded to questions about Exxon’s investments in carbon capture technology.

“ExxonMobil is in a strong position to create differentiating value throughout the energy transition,” CEO Darren Woods said, touting Exxon’s oil-and-gas portfolio and its investment in climate technologies.

“We welcome the new directors Gregory Goff in Kaisha Hietala to the board and look forward to working with them constructively and collectively on behalf of all shareholders,” Woods said.

Exxon shares have collapsed over the past few years but have doubled off the double-bottom lows of March and October of last year…

“This is a landmark moment for Exxon and for the industry, and will accelerate needed change in the sector,” said Andrew Logan, senior director for oil and gas at Ceres, which co-ordinates investor climate action.

“Nothing focuses a director’s mind like the possibility that they might lose their job. Today that risk became very real,” he added.

What is most shocking is how a tiny upstart fund with a small position in the company could gain enough (woke) support from top shareholders to force change within the company.

“That certainly calls his leadership into question,” Mr. Logan said. “There is no going back to the Exxon of old nor should there be.”

Tyler Durden
Wed, 05/26/2021 – 15:25

via ZeroHedge News https://ift.tt/3bVZDm5 Tyler Durden

The Fear That Abolishing Qualified Immunity Would Expose Cops to Ruinous Personal Liability Is a Big Fat Red Herring


Tim-Scott-5-25-21-Newscom

A year after George Floyd’s death, Congress is still mulling reforms that could help prevent such horrifying abuses of police power. A major sticking point is restricting or abolishing qualified immunity, the court-invented doctrine that shields police officers from liability when the rights they are accused of violating were not “clearly established” at the time. The debate about qualified immunity has been dominated by Republican warnings that the threat of ruinous personal liability would have a chilling effect on legitimate policing. But that concern, it turns out, is a big fat red herring, because cops almost never pay a dime in damages even when courts rule against them.

In a 2014 study of civil rights cases that covered “forty-four of the largest law enforcement agencies across the country,” UCLA law professor Joanna Schwartz found that “police officers are virtually always indemnified.” That means they are not responsible for settlement payments or jury-awarded damages arising from allegations of police abuse. From 2006 to 2011, Schwartz reported in the New York University Law Review, “governments paid approximately 99.98% of the dollars that plaintiffs recovered in lawsuits alleging civil rights violations by law enforcement.”

During that period, Schwartz writes, “officers financially contributed to settlements and judgments in just .41% of the approximately 9225 civil rights damages actions resolved in plaintiffs’ favor, and their contributions amounted to just .02% of the over $730 million spent by cities, counties, and states in these cases.” She notes that “officers did not pay a dime of the over $3.9 million awarded in punitive damages,” and “governments satisfied settlements and judgments in full even when officers were disciplined or terminated by the department or criminally prosecuted for their conduct.”

What about legal fees? “Although my public records requests did not seek information about who bears the cost of defense counsel,” Schwartz says, “several government employees and plaintiffs’ attorneys noted in their responses that officers are almost always represented by the city’s or county’s attorneys, or by attorneys hired by union representatives.”

Despite this reality, defenders of qualified immunity insist it is necessary to protect cops from the financially devastating consequences of good-faith decisions that are later deemed illegal. In response to that chimerical concern, Sen. Tim Scott (R–S.C.) has proposed a compromise that would allow federal civil rights claims against police departments instead of their employees. The New York Times reports that Scott “has suggested that the legal burden could be shifted from individual officers to police departments, potentially passing on financial liability to municipal governments while satisfying powerful police unions.” But that is already what happens in practice.

State legislators are likewise keen to allay a fear that has no real basis. Since Floyd’s death, Colorado, Connecticut, and New Mexico have enacted laws that allow victims of police abuse to seek damages in state court without having to overcome the formidable obstacle of qualified immunity, which frequently bars federal claims even in cases involving outrageous conduct. All three laws require indemnification of police officers in all or nearly all cases.

Colorado’s law requires indemnification unless “the peace officer’s employer determines that the officer did not act on a good faith and reasonable belief that the action was lawful.” Connecticut requires municipalities to cover all defendant expenses unless an officer’s misconduct was “deliberate, willful or committed with reckless indifference.” New Mexico’s law goes even further, ruling out individual liability in any circumstances.

Schwartz’s research suggests that such protections are redundant. “My findings of widespread indemnification undermine assumptions of financial responsibility relied upon in civil rights doctrine,” she writes. “Although the [Supreme] Court’s stringent qualified immunity standard rests in part on the concern that individual officers will be overdeterred by the threat of financial liability, actual practice suggests that these officers have nothing reasonably to fear, at least where payouts are concerned.”

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The Fear That Abolishing Qualified Immunity Would Expose Cops to Ruinous Personal Liability Is a Big Fat Red Herring


Tim-Scott-5-25-21-Newscom

A year after George Floyd’s death, Congress is still mulling reforms that could help prevent such horrifying abuses of police power. A major sticking point is restricting or abolishing qualified immunity, the court-invented doctrine that shields police officers from liability when the rights they are accused of violating were not “clearly established” at the time. The debate about qualified immunity has been dominated by Republican warnings that the threat of ruinous personal liability would have a chilling effect on legitimate policing. But that concern, it turns out, is a big fat red herring, because cops almost never pay a dime in damages even when courts rule against them.

In a 2014 study of civil rights cases that covered “forty-four of the largest law enforcement agencies across the country,” UCLA law professor Joanna Schwartz found that “police officers are virtually always indemnified.” That means they are not responsible for settlement payments or jury-awarded damages arising from allegations of police abuse. From 2006 to 2011, Schwartz reported in the New York University Law Review, “governments paid approximately 99.98% of the dollars that plaintiffs recovered in lawsuits alleging civil rights violations by law enforcement.”

During that period, Schwartz writes, “officers financially contributed to settlements and judgments in just .41% of the approximately 9225 civil rights damages actions resolved in plaintiffs’ favor, and their contributions amounted to just .02% of the over $730 million spent by cities, counties, and states in these cases.” She notes that “officers did not pay a dime of the over $3.9 million awarded in punitive damages,” and “governments satisfied settlements and judgments in full even when officers were disciplined or terminated by the department or criminally prosecuted for their conduct.”

What about legal fees? “Although my public records requests did not seek information about who bears the cost of defense counsel,” Schwartz says, “several government employees and plaintiffs’ attorneys noted in their responses that officers are almost always represented by the city’s or county’s attorneys, or by attorneys hired by union representatives.”

Despite this reality, defenders of qualified immunity insist it is necessary to protect cops from the financially devastating consequences of good-faith decisions that are later deemed illegal. In response to that chimerical concern, Sen. Tim Scott (R–S.C.) has proposed a compromise that would allow federal civil rights claims against police departments instead of their employees. The New York Times reports that Scott “has suggested that the legal burden could be shifted from individual officers to police departments, potentially passing on financial liability to municipal governments while satisfying powerful police unions.” But that is already what happens in practice.

State legislators are likewise keen to allay a fear that has no real basis. Since Floyd’s death, Colorado, Connecticut, and New Mexico have enacted laws that allow victims of police abuse to seek damages in state court without having to overcome the formidable obstacle of qualified immunity, which frequently bars federal claims even in cases involving outrageous conduct. All three laws require indemnification of police officers in all or nearly all cases.

Colorado’s law requires indemnification unless “the peace officer’s employer determines that the officer did not act on a good faith and reasonable belief that the action was lawful.” Connecticut requires municipalities to cover all defendant expenses unless an officer’s misconduct was “deliberate, willful or committed with reckless indifference.” New Mexico’s law goes even further, ruling out individual liability in any circumstances.

Schwartz’s research suggests that such protections are redundant. “My findings of widespread indemnification undermine assumptions of financial responsibility relied upon in civil rights doctrine,” she writes. “Although the [Supreme] Court’s stringent qualified immunity standard rests in part on the concern that individual officers will be overdeterred by the threat of financial liability, actual practice suggests that these officers have nothing reasonably to fear, at least where payouts are concerned.”

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Phoenix Authorities Used ‘ACAB’ Slogan To Designate Protesters as a Gang


uigphotos359881

The acronym ACAB—”all cops are bastards”—has become a popular slogan at protests against police brutality and corruption. Cops whose feelings are hurt by this have little legal recourse since declaring all cops bastards is protected speech whether they like it or not. But Phoenix-area law enforcement apparently thought that they had found a way around this: by declaring ACAB to be the name of a criminal gang, and those chanting it to be declaring their gang membership.

This was a fiction—and authorities now admit as much. Prosecuting slogan-chanting protesters on gang charges was “deeply flawed” and there was “no likelihood of conviction on the gang charges,” wrote Maricopa County prosecutor Ryan Green in a court motion.

Yet promulgating this pretense allowed Phoenix-area authorities to arrest and charge more than a dozen anti–police brutality protesters under the guise of stopping gang activity.

After being arrested last fall, these defendants were forced to spend months fighting allegations that they had been “assisting a criminal street gang.” The charges were eventually dismissed in February. But “prosecutors have not permanently backed off from future prosecution,” notes the Arizona Republic. Of the 15 adults charged, “only one of them had their case dismissed with prejudice, which means prosecutors can’t refile charges against them.”

Besides, those charged were listed in the state’s gang database and may still be on it. Officials still won’t say whether they have now been removed.

The case “highlights larger issues with the vague nature of Arizona’s gang statutes and the broad power provided to law enforcement agencies to document and track alleged gang members without public scrutiny,” suggests ABC15 reporter Dave Biscobing.

Amy Kaper, who is 29, was one of the people that local authorities deemed members of the fictional ACAB gang after she attended a small October 17, 2020, protest against police abuse. Reportedly all of those in attendance—15 adults and three minors—were arrested.

“It’s scary,” Kaper said in a February interview with ABC15. “It feels like totalitarianism. It feels like we’re not allowed to speak out about our rights. And unless you’re on the side [police are] on, they’re going to arrest you and try to ruin your life.”

ABC15 has been digging deep into the alleged “gang” prosecutions. “The evidence shows police and prosecutors presented grand jurors with dubious claims, one-sided evidence, exaggerations, and lies,” the station concluded.

The bulk of the protest consisted of the group simply marching down a street and chanting. Some carried umbrellas, to shield themselves from potential pepper balls or identification by counterprotesters trailing them with cameras. In addition, “some protesters tipped orange cones, toppled temporary street signs, and dragged construction barriers to slow and annoy the police” who were trailing them, reports ABC15. “At one point, one person in the group released a smoke maker—the same type often used in gender reveal parties, court records show.”

After being arrested, the protesters were entered into Arizona’s statewide “GangNet” database and charged with rioting, obstructing a public thoroughfare, unlawful assembly, conspiracy to commit assault, and assisting a criminal street gang. While all of the charges seem like overreach, the gang charge is especially galling.

Circuitous and vague definitions of gang activity in Arizona helped make it possible.

Arizona defines assisting a criminal street gang—a felony—as “committing any felony offense, whether completed or preparatory for the benefit of, at the direction of or in association with any criminal street gang.” A criminal street gang is defined as “an ongoing formal or informal association of persons in which members or associates individually or collectively engage in the commission, attempted commission, facilitation or solicitation of any felony act and that has at least one individual who is a criminal street gang member.”

To be deemed a criminal street gang member, someone must meet two of seven criteria: self-declaration, “witness testimony or official statement,” “written or electronic correspondence,” paraphernalia or photographs, tattoos, clothing or colors, or “any other indicia of street gang membership.”

At a grand jury trial for one of the arrested protesters, Sergeant Doug McBride of the Phoenix Police Department said the protesters met the criteria because chanting “all cops are bastards” counted as self-identification with the alleged ACAB gang, and the color black, worn by many protesters, was an ACAB gang color. (He also said umbrellas were part of the ACAB gang uniform.) Besides, “under the gang statute, just hanging around and participating can also be another indication of former or informal association,” he told the grand jury.

McBride said Phoenix police had “first came into contact with this group through graffiti, signage, ACAB written on the back of skateboards and different paraphernalia,” then went on to liken the alleged ACAB gang to Hells Angels, the Bloods, and the Crips:

Q: And are you finding that ACAB is following the exact same type of philosophy of let’s say the Bloods and the Crips?

A: Yes.

Q: And what about even maybe the same philosophy as the Hells Angels?

A: Very similar, yes.

Q: And why would that be similar?

A: I think because the tattoos, the intimidation factor, how they are directing their violent behavior very similar to the Hells Angel organization where they actually organize their violent behavior, and then they carry that out in a very organized fashion. It’s not random with the Hells Angels.

Q: And are you finding that’s exactly what this ACAB group is doing is they are organizing for the intent to create violence?

A: Yes.

McBride further contended that unlike the Bloods and the Crips, “this is the first time…that we have an organized group of individuals and all of their planning and all of their violence is directed directly toward the police department.”

All of this is ridiculous, as anyone who has encountered the ubiquitous (and at least century-old) ACAB slogan online and at protests can attest.

It’s also frighteningly authoritarian. Charging protesters as gang members has “serious implications not only for the individual lives of those impacted, but for everyone who values free speech and the promise of democracy,” said Phoenix City Councilmember Carlos Garcia in a statement last November. “It’s an abuse of power. It is political persecution. It is undemocratic.”

Maricopa County said the information that ACAB was a gang was based on faulty reports from a former police informant—Riley Behrens—with a history of lying. Behrens also provided information to the FBI.

This isn’t the only time last summer and fall that Phoenix authorities arrested protesters, nor the only protest case in which they are accused of lying. “Phoenix officers embellished the facts in another protest arrest last year by falsely claiming a demonstrator intentionally stabbed a sergeant with a sharpened umbrella tip,” notes ABC15. Cellphone video obtained by the station shows this was not the case.

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Suddenly The Market No Longer Sees Jackson Hole As Taper D-Day

Suddenly The Market No Longer Sees Jackson Hole As Taper D-Day

Just a few weeks ago, the market was rife with speculation that amid galloping inflation, the Fed would almost certainly breach the topic of the infamous taper during its June 16 FOMC meeting, and if not then, then no later than the September 22 meeting, which takes place just after the late-August Jackson Hole central banker outing in which most of the Fed’s “radical” ideas in the past decade have been introduced.

Not any more. As Bloomberg’s Stephen Spratt points out, 3-month 10-year implied swaption vol – a closely-watched metric of how much TSY prices may move over the period – has been steadily declining, and hit the lowest levels since early March, amid a non-stop barrage of central bankers repeating in the past 48 hours that inflation will be transitory. Among these were Fed vice chair Richard Clarida who downplayed the effects of higher price pressures, voicing faith in the central bank’s ability to engineer a “soft landing” if prices continue to escalate beyond what is expected. He was joined on Wednesday by Bank of France Governor Francois Villeroy de Galhau talked down stimulus adjustments anytime soon, while European Central Bank Executive Board member Fabio Panetta who said he sees no signs of sustained inflation that would allow for a reduction in bond purchases.

The three-month swaption in the U.S. implies a breakeven range of around 30 bps, suggesting benchmark 10-year yields may trade between 1.25% and 1.85%, versus about 1.56% currently. The same gauge for Europe has a range of 17 basis points either side of the current 10-year swap rate at 0.14%.

What is remarkable is that the drop has come even as the three-month contract now cover the likely start dates for the Jackson Hole Economic Symposium, which has traditionally started in the last week of August, and where as noted above, is where central banks have traditionally telegraphed material changes in central bank policies.  As Spratt notes, large bets for a hawkish shake-up at Jackson Hole were seen earlier this month, with option positions targeting a more aggressive rate outlook for both the Federal Reserve and European Central Bank.

If the market is right and there is no taper announcement at Jackson Hole, it is unclear when the Fed’s next window of opportunity will be.

In the U.S., “volatility is low because the Fed has crushed it,” James Athey, investment director at Aberdeen Asset Management, told Bloomberg even though he disapproves of selling it here, and instead owns vol in five-year Treasuries and swaps. “I don’t think selling vol is attractive at all. It’s like picking up pennies in front of a steam roller.”

To be sure, even without a J-Hole surprise, there are a series of factors that could inject fresh volatility into markets. Federal Open Market Committee minutes show a number of participants signaling openness to discussing tapering of bond buying at “upcoming meetings” if the economy evolves as expected. This position was echoed by Fed Vice Chair Richard Clarida on Tuesday.

Tyler Durden
Wed, 05/26/2021 – 15:09

via ZeroHedge News https://ift.tt/3bT9lFO Tyler Durden

Phoenix Authorities Used ‘ACAB’ Slogan To Designate Protesters as a Gang


uigphotos359881

The acronym ACAB—”all cops are bastards”—has become a popular slogan at protests against police brutality and corruption. Cops whose feelings are hurt by this have little legal recourse since declaring all cops bastards is protected speech whether they like it or not. But Phoenix-area law enforcement apparently thought that they had found a way around this: By declaring ACAB to be the name of a criminal gang, and those chanting it to be declaring their gang membership.

This was a fiction—and authorities now admit as much. Prosecuting slogan-chanting protesters on gang charges was “deeply flawed” and there was “no likelihood of conviction on the gang charges,” wrote Maricopa County prosecutor Ryan Green in a court motion.

Yet promulgating this false pretense allowed Phoenix-area authorities to arrest and charge more than a dozen anti–police brutality protesters under the guise of stopping gang activity.

After being arrested last fall, these defendants were forced to spend months fighting allegations that they had been “assisting a criminal street gang.” The charges were eventually dismissed in February. But “prosecutors have not permanently backed off from future prosecution,” notes the Arizona Republic. Of the 15 adults charged, “only one of them had their case dismissed with prejudice, which means prosecutors can’t refile charges against them.”

Besides, those charged were listed in the state’s gang database and may still be on it. Officials still won’t say whether they have now been removed.

The case “highlights larger issues with the vague nature of Arizona’s gang statutes and the broad power provided to law enforcement agencies to document and track alleged gang members without public scrutiny,” suggests ABC15 reporter Dave Biscobing.

Amy Kaper, who is 29, was one of the people that local authorities deemed members of the fictional ACAB gang after she attended a small October 17, 2020 protest against police abuse. Reportedly all of those in attendance—15 adults and three minors—were arrested.

“It’s scary,” Kaper said in a February interview with ABC15. “It feels like totalitarianism. It feels like we’re not allowed to speak out about our rights. And unless you’re on the side [police are] on, they’re going to arrest you and try to ruin your life.”

ABC15 has been digging deep into the alleged “gang” prosecutions. “The evidence shows police and prosecutors presented grand jurors with dubious claims, one-sided evidence, exaggerations, and lies,” the station concluded.

The bulk of the protest consisted of the group simply marching down a street and chanting. Some carried umbrellas, to shield themselves from potential pepper balls or identification by counter-protesters trailing them with cameras. In addition, “some protesters tipped orange cones, toppled temporary street signs, and dragged construction barriers to slow and annoy the police” who were trailing them, reports ABC15. “At one point, one person in the group released a smoke maker — the same type often used in gender reveal parties, court records show.”

After being arrested, the protesters were entered into Arizona’s statewide “GangNet” database and charged with rioting, obstructing a public thoroughfare, unlawful assembly, conspiracy to commit assault, and assisting a criminal street gang. While all of the charges seem like overreach, the gang charge is especially galling.

Circuitous and vague definitions of gang activity in Arizona helped make it possible.

Arizona defines assisting a criminal street gang—a felony—as “committing any felony offense, whether completed or preparatory for the benefit of, at the direction of or in association with any criminal street gang.” A criminal street gang is defined as “an ongoing formal or informal association of persons in which members or associates individually or collectively engage in the commission, attempted commission, facilitation or solicitation of any felony act and that has at least one individual who is a criminal street gang member.”

To be deemed a criminal street gang member, someone must meet two of seven criteria: self-declaration, “witness testimony or official statement,” “written or electronic correspondence,” paraphernalia or photographs, tattoos, clothing or colors, or “any other indicia of street gang membership.”

At a grand jury trial for one of the arrested protesters, Sergeant Doug McBride of the Phoenix Police Department said the protesters met the criteria because chanting “all cops are bastards” counted as self-identification with the alleged ACAB gang, and the color black, worn by many protesters, was an ACAB gang color. (He also said umbrellas were part of the ACAB gang uniform.) Besides, “under the gang statute, just hanging around and participating can also be another indication of former or informal association,” he told the grand jury.

McBride said Phoenix police had “first came into contact with this group through graffiti, signage, ACAB written on the back of skateboards and different paraphernalia,” then went on to liken the alleged ACAB gang to Hells Angels, the Bloods, and the Crips:

Q: And are you finding that ACAB is following the exact same type of philosophy of let’s say the Bloods and the Crips?

A: Yes.

Q: And what about even maybe the same philosophy as the Hells Angels?

A: Very similar, yes.

Q: And why would that be similar?

A: I think because the tattoos, the intimidation factor, how they are directing their violent behavior very similar to the Hells Angel organization where they actually organize their violent behavior, and then they carry that out in a very organized fashion. It’s not random with the Hells Angels.

Q: And are you finding that’s exactly what this ACAB group is doing is they are organizing for the intent to create violence?

A: Yes.

McBride further contended that unlike the Bloods and the Crips, “this is the first time … that we have an organized group of individuals and all of their planning and all of their violence is directed directly toward the police department.”

All of this is ridiculous, as anyone who has encountered the ubiquitous (and at least century-old) ACAB slogan online and at protests can attest.

It’s also frighteningly authoritarian. Charging protesters as gang members has “serious implications not only for the individual lives of those impacted, but for everyone who values free speech and the promise of democracy,” said Phoenix City Councilmember Carlos Garcia in a statement last November. “It’s an abuse of power. It is political persecution. It is undemocratic.”

Maricopa County said the information that ACAB was a gang was based on faulty reports from a former police informant—Riley Behrens—with a history of lying. Behrens also provided information to the FBI.

This isn’t the only time last summer and fall that Phoenix authorities arrested protesters, nor the only protest case in which they are accused of lying. “Phoenix officers embellished the facts in another protest arrest last year by falsely claiming a demonstrator intentionally stabbed a sergeant with a sharpened umbrella tip,” notes ABC15. Cellphone video obtained by the station shows this was not the case.

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5 Arrested In Portland During Riot On Anniversary Of George Floyd’s Death

5 Arrested In Portland During Riot On Anniversary Of George Floyd’s Death

Authored by Zachary Stieber via The Epoch Times,

Five people were arrested overnight in Portland, Oregon after a riot broke out on the anniversary of George Floyd’s death.

The quintet was part of a crowd who set a fire in a dumpster next to the Justice Center, a building that houses a jail and law enforcement offices, while chanting “Burn the building down,” according to a Portland Police Bureau incident summary and photographs and video footage from the scene.

(L) Damage to a business inflicted by rioters. (R) Two of those arrested during the rioting, Elizabeth Hall and Jacob Myers, are pictured in mugshots. (Portland Police Bureau; Multnomah County Sheriff’s Office)

Others in the crowd hurled frozen water bottles and eggs at police officers and some threw metal spikes into the road.

The mob later marched to City Hall, breaking windows and scrawling far-left slogans across the facade. The mob was “incited” by some people, police said.

Because of the continued criminal actions, police declared a riot and warned people to disperse or face arrest or crowd control tactics.

The crowd kept moving through the city, damaging property at businesses and breaking more windows, including at a steakhouse where people were eating inside.

“Slowly, as the number of people in the crowd became smaller and smaller, they began to spread out, fight among themselves and light occasional trash can fires. People within the crowd were overheard saying the night was a success,” police said.

Those arrested were identified as Elizabeth Hall, 30, Emery Hall, 30, Rhiannon Millar-Griffin, 23, Jacob Myers, 22, and Jarrid Huber, 21. They faced charges including criminal mischief, riot, and arson.

Jarrid Huber and Emery Hall are seen in mugshots. (Multnomah County Sheriff’s Office)

The crowd on Tuesday night was largely dressed in garb favored by Antifa, the far-left, anarcho-communist network that advocates for the abolition of police and has frequently targeted Portland Mayor and Police Commissioner Ted Wheeler.

Wheeler has in recent months turned against the rioters, describing them as anarchists who are bent on destruction and calling for community members to help “unmask them” so they can be arrested and prosecuted.

Portland has dealt with unrest for about a year, starting with the death of Floyd in Minneapolis. Rioters set fire to the Justice Center in the spring of 2020 before turning their sights on the U.S. courthouse downtown, triggering the deployment of federal officers. Nightly clashes between the rioters and officers played out for weeks until the feds withdrew, letting a combined city-state force respond to unrest.

Riots have continued taking place on a regular basis.

Antifa members promoted the gathering that turned into a riot on Tuesday, according to Andy Ngo, an editor for The Post Millennial who is an expert on the group. One poster promoting the gathering called for people to “bloc up,” a reference to wearing all-black clothing with faces obscured and to be ready to carry out destruction.

Millar-Griffin was arrested during a riot in August 2020 on disorderly conduct and law enforcement interference charges.

Huber has described himself on social media as an independent reporter. He has previously shared a meme calling for the resignation of Wheeler.

Tyler Durden
Wed, 05/26/2021 – 14:45

via ZeroHedge News https://ift.tt/34jk5ZA Tyler Durden

“Eerily Analogous To 2008” – Carl Icahn’s “Big Short 2.0” Trade Starts Paying Off As Mall Loan Fails

“Eerily Analogous To 2008” – Carl Icahn’s “Big Short 2.0” Trade Starts Paying Off As Mall Loan Fails

In 2017, we were among the first to bring the market’s attention to what has subsequently been dubbed “Big Short 2.0” as we reported that “Mega-Bears Smell Blood As Mall REITs Tumble.”

 “Wall Street speculators are zeroing in on the next U.S. credit crisis: the mall…. Its no secret many mall complexes have been struggling for years as Americans do more of their shopping online. But now, theyre catching the eye of hedge-fund types who think some may soon buckle under their debts, much the way many homeowners did nearly a decade ago.”

In late 2019, none other than iconic investor Carl Icahn jumped in to the the big short 2.0, shorting America’s malls by going long default risk via CMBX, or otherwise shorting the CMBS.

As a reminder, CMBX 6 – which tracks the value of 25 commercial-mortgage-backed securities, or CMBS – grabbed investor attention because it has significant exposure to loans made in 2012 to malls that lately have been running into difficulties.

Many (long-only bond managers) argued against Icahn’s bet against mall owners at the time…

The short sellers are peddling a “false narrative,” said Brian Phillips, director of commercial real estate credit research at AllianceBernstein.

“They are focused on momentum rather than credit fundamentals.”

But the corporate raider pressed on undeterred as The Wall Street Journal estimated that the billionaire investor stood to gain $400 million or more if mall owners run into challenges servicing their debt, according to people familiar with the matter.

And so, despite trillions in Fed liquidity to prop up every asset class in the world (especially credit), the CMBS market has failed to get over-excited…

And today could be the start of the reality wave reappearing as Bloomberg reports that a loan tied to a beleaguered mall outside of Las Vegas realized a loss of 120% after the shopping center sold for about the same price as a condo.

The loan, which had a current balance of $62.2 million, was completely written down after the Prizm Outlets were liquidated for just over $400,000, according to Bank of America Corp. The Prizm Outlets had been valued as high as $28.2 million less than a year ago, and $125 million in 2012 when the loans were bundled into a commercial mortgage-backed security.

When accounting for $11.5 million in fees and reimbursements owed to the master servicer for advances made, the total realized loss came out to $74 million.

The Prizm Outlet Mall in Primm, Nevada.

That’s the largest loss — both in terms of dollar amount and as a percent of the original loan balance — for a commercial mortgage backed conduit loan since the 2008 financial crisis, Bank of America analysts Alan Todd, Mao Dingand Graham Voss wrote in a May 21 report.

“May 2021 servicer data that was released indicates the asset resolved with a larger loss than expected,” commercial real estate data company Trepp said in a May 18 report.

This is the first payout to those who shorted the index…

The two lowest-ranking tranches of the CMBS deal’s capital structure were completely written off this month as a result of the liquidation, Bank of America said. The tranche above that, originally rated in the BB range, was partially written down.

83-year-old Icahn appears to have been vindicated as Bloomberg’s Cott Deveau sat down with the infamous investor this week, where he warned: “We believe these mortgages will have the same disastrous fate as mortgage-backed securities had in the 2008 debacle.”

You made a bet against malls heading into the pandemic by shorting an index designed to reflect the creditworthiness of certain commercial mortgage-backed securities. Do you still think that’s the right vehicle for that view?

My “big bet” against these malls still stands.

In fact, it is currently one of our largest positions.

On a risk-reward basis, I believe my short bet on these malls is about as good a bet you can make in today’s dangerous markets.

The bet is that the malls and other questionable real estate represented by the CMBX 6 will not be able to refinance and pay off their mortgages, which include a large number of mall mortgages due in 2022. We believe these mortgages will have the same disastrous fate as mortgage-backed securities had in the 2008 debacle.

We’ve effectively purchased billions of dollars of insurance on these mortgages by entering into credit-default swap contracts. The CDS contracts require us to pay a small fixed amount annually to counterparties who agree basically to insure that a certain level of these mortgages get paid at par. As it becomes more and more apparent that a number of these malls and other distressed properties will not be able to pay these mortgages, the value of this insurance increases in value.

Interestingly, large mutual funds such as AllianceBernstein and Putnam have taken the other side of my “bet” in that we believe the sellers of billions of dollars of this distressed mall insurance have been these two funds. It appears, based on their most recent data, that Putnam may have sold approximately $1.8 billion and AllianceBernstein may have sold approximately $3.5 billion (including CMBX 6 BBB- and CMBX 6 BB).

The current situation is eerily analogous to what happened in 2008, when billions and billions were lost by average Americans who placed their trust in well-respected firms and purchased mortgage-backed securities believing they were as safe as Treasuries. Last year, Putnam, in offering materials on their website, in effect told potential investors that the fund making these risky bets is consistent with the preservation of capital by comparing the funds to a benchmark index based on U.S. Treasuries.

If an investor sold this type of insurance in January of 2020, that investor would have lost over 20% at today’s valuations, while Treasuries would have returned over 4% with taking much less risk.

However, AllianceBernstein and Putnam still collect their fees. Today, money still flows into AllianceBernstein and Putnam bond funds. Many believe that these malls and other distressed properties will never be able to pay their mortgages. How can any adviser put clients into a transaction where, for only receiving a small return over treasuries, they take the very real risk that malls and other questionable real estate cannot pay off their mortgages and that these investors therefore might lose a great deal of their principal.

It is highly probable that inflation will soon rear its ugly head causing interest rates to meaningfully rise and therefore make it literally impossible for these malls to have any chance of refinancing so that they can pay the mortgages. However, it is true that highly respected firms advise their clients to do things that were just as stupid in 2008. As the old saying goes, where are the customers’ yachts?

Icahn discussed many other things in the interview (read more here), but ended with a sad reflection of what has happened to his home – New York City: “Throughout my whole life I loved New York and for most of my life I lived there… It saddens me to see what has happened to the city. I personally hope it can be saved.”

Tyler Durden
Wed, 05/26/2021 – 14:26

via ZeroHedge News https://ift.tt/3hZYWf9 Tyler Durden