As we reported last week, a looming Trump presidency has generated a surge in immigrants trying to cross the southern border of the United States.
From October 2015 to March of this year, the US Border Patrol apprehensions averaged 330 Central Americans a day, an increase of 100 percent over the same period a year earlier according to the Pew Research Center. The issue has even prompted Homeland Security Secretary Jeh Johnson to travel to Central America to remind everyone in person that the US border is not open.
"I am here today to send a message that our borders in the United States are not open to irregular migration" Johnson said.
Despite the nice speech from Jeh Johnson, family holding facilities are full on the southern border, and the need for supplies at places such as Catholic Charities of the Rio Grande Valley has skyrocketed.
"It's like 50, 60, 100, 200 backpacks that we need every day; 200, or 50 or 80 deodorants or shoes. Can you imagine coming up with 50, 60, 80 pairs of shoes every day? It's amazing." said Sister Norma Pimentel, director of Catholic Charities of the Rio Grande Valley.
Border Patrol agents are becoming frustrated, and the root cause of the frustration is that there is a catch and release program taking place. The time it is taking for agents to round up and process those who turn themselves in asking for asylum (just to release them into the US) is taking away from capturing the immigrants who aren't looking to turn themselves in to anyone – drug traffickers for example.
Union president Brandon Judd testified at a congressional hearing that if immigrants are arrested and ask for asylum, they're being allowed to get processed and move along on their journey to join family members elsewhere in the US while they await their hearing. The hearing itself could take up to two years, as the courts currently have a backlog of nearly a half a million cases. The reason being given is that the US court rulings restrict the agency's ability to detain those arrested.
"What happens is if you are arrested in the United States and you ask for any sort of asylum, what we do is we will process you, and we will walk you right out our front door, give you a pat on the back and say, 'Welcome to the United States.' And they're good to go," Judd testified at the hearing.
Chris Cabrera, a south Texas Border Patrol agent and union official says all the families surrendering to seek asylum are distracting his member agents, when they should be chasing drug and human traffickers.
"Our agents are so caught up with rounding up the ones that are turning themselves in, corralling them and getting them to the station, that we don't have adequate resources to get the ones that are trying to get away," Cabrera said.
And as it turns out, it's not just a looming Trump presidency that is driving the surge in immigrants to the US, it's an expectation of the immigrants that when they are arrested, they'll be processed and released, free to go in the United States.
Central Americans risk the journey because they know most of them will be admitted at the U.S. border and not locked up, as are immigrants from Mexico who cross illegally.
Wendy Villanueva is from Honduras, traveling with her toddler daughter. The 21-year-old says they fled Colón Province when gangsters extorted her small clothing business and threatened to kill her if she didn't pay up.
Villanueva and her daughter took buses to the Texas-Mexico border and surrendered to U.S. agents on the international bridge at Brownsville. They're headed to North Carolina to join her mother and sisters, who are also seeking amnesty.
"According to our countrymen who are here, and from what they learned, we expect that the authorities will also give us permission to remain here," she says, waiting to collect some new clothes and hygiene items at the shelter for the next leg of her journey north.
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Whatever one's politics are on the issue, as we say time and time again, if the economy isn't performing well, violence will continue and so will the surge of immigrants trying to find safety and a better way of life. It's also worth noting, that no matter how effective a wall may be, if there is a catch and release program taking place it defeats the entire purpose of building a wall in the first place.
Sadly, everyone has seemingly forgotten that the lessons of the past can help prepare us for the future. For example, one would assume that the sting of owning an truck or SUV during the financial crisis would stick with consumers long enough to deter them from falling back into the same trap again just because oil was trading lower… then again, just as assuming market participants would remember that time period, one would be wrong.
So here we are once again. Last year, SUVs outsold any other type of passenger vehicle in Europe for the first time, and the trend has continued into 2016 as Bloomberg reports.
The same is occurring in the US, as today light trucks, vans, and SUVs account for 60 percent of the total vehicle sales, a level only reached briefly in 2005 when Brent averaged $55/bbl – meaning that once again low oil prices have lured consumers back into buying less fuel efficient vehicles.
In April, the average car sold achieved a fuel economy of 25.2 mpg, down from a peak of 25.8 mpg set in August 2014. As Bloomberg notes, at current trends, 2016 will mark the first drop in average US fuel economy since at least 2007.
"Fuel economy improvement is really flatlining. The gains completely stopped right at the same time that oil prices started to decline" said Sam Ori, executive director of Energy Policy Institute at the University of Chicago.
As further evidence that consumers having amnesia, light trucks as a share of total US vehicle sales is also hovering around record highs since 1976
China is not immune to this of course, as according to official data, vehicles such as light trucks and SUVs accounted for almost 35 percent of Chinese passenger sales in April, up from 10 percent in 2010, and less than 5 percent a decade ago.
"Consumers are thinking that a period of plentiful oil supply is here to stay" says Christof Ruhl, head of research at the Abu Dhabi Investment Authority.
US demand for fuel peaks between the Memorial Day holiday in late May and Labor Day in early September when Americans usually take vacations, so given the trend of consumers going to bigger, less fuel efficient cars, it's easy to determine that demand will perhaps help oil prices rise during that time. However, a lot depends on the global economy and the supply side of things, neither of which look to be helpful at the moment, as US and China manufacturing PMIs are slumping and Saudi Arabia plans to boost production even more.
All we can say to this is that just as with the last financial crisis, cheap oil is there until its not, and vehicle manufacturers have demand for all of those trucks and SUVs until another crisis hits and they find themselves back in need of a bailout for over committing to those product lines.
As for the markets, well, we know how that ends as well.
Which reminds us of Rudyard Kipling's poem "The Gods Of The Copybook Headings", specifically this portion:
Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew And the hearts of the meanest were humbled and began to believe it was true That All is not Gold that Glitters, and Two and Two make Four And the Gods of the Copybook Headings limped up to explain it once more.
As it will be in the future, it was at the birth of Man There are only four things certain since Social Progress began. That the Dog returns to his Vomit and the Sow returns to her Mire, And the burnt Fool's bandaged finger goes wabbling back to the Fire;
As reported earlier, over the weekend Weekly Standard editor and prominent neocon, Bill Kristol, one of Trump’s most vocal detractors, announced that he would challenge Trump’s presidential candidacy by unveiling an independent candidate, “asn impressive one, with a strong team and a real chance.” This led to another heated exchange between Trump and Kristol, with Trump calling the conservative voice a “loser” and a “dummy”
If dummy Bill Kristol actually does get a spoiler to run as an Independent, say good bye to the Supreme Court!
This is turn led to another response by Kristol who said on Twitter that “I gather Donald Trump said I’m a loser”, adding that “I’ve won some and I’ve lost some, but one thing I’ve always tried not to be is a roaring jackass.”
I gather Donald Trump said I’m a loser. I’ve won some and I’ve lost some, but one thing I’ve always tried not to be is a roaring jackass.
The feud between the Trump and Kristol aside, the political world has been engaged in a fevered guessing game over whom that person might be.
Shortly after Kristol’s Sunday tweet, he left for Israel and has been avoiding the press, speaking only through a series of tweets taunting Trump for responding to Kristol’s Sunday tweet. Speculation had centered on 2012 Republican nominee Romney, freshman Nebraska senator Ben Sasse, and other current and former state and federal office-holders.
The answer was revealed by Bloomberg late this afternoon, which reported that according to two Republicans intimately familiar with Bill Kristol’s efforts to recruit an independent presidential candidate to challenge Donald Trump that the person Kristol has in mind is David French – whose name the editor of the Weekly Standard floated in the current issue of the magazine.
Who is David French? Bloomberg has the details?
French is a veteran of Operation Iraqi Freedom. According to the website of National Review, where French is a staff writer, he is a constitutional lawyer, a recipient of the Bronze Star, and an author of several books who lives in Columbia, Tenn., with his wife Nancy and three children.
Reached in Israel late Tuesday afternoon, Kristol declined to comment on his efforts to induce French to run. The two Republicans confirmed that French is open to launching a bid, but that he has not made a final decision. One of the Republicans added that French has not lined up a vice-presidential running mate or significant financial support. However, according to this person, some conservative donors look favorably on the prospect of French entering the fray.
In Kristol’s piece in the Standard’s June 6 issue, he argued that “the fact of Trump’s and Clinton’s unfitness for the Oval Office has become so self-evident that it’s no longer clear one needs a famous figure to provide an alternative.” Bloomberg adds that after mentioning Mitt Romney and other possibilities such as Judd Gregg and Mel Martinez, Kristol invoked French’s name and résumé, writing, “To say that he would be a better and a more responsible president than Hillary Clinton or Donald Trump is to state a truth that would become self-evident as more Americans got to know him.”
Bloomberg concludes that according to one person deeply involved in the efforts to recruit an independent challenger, the search has focused on individuals who have one or more of the following three traits seen as vital for credibly launching such a bid: fame, vast wealth, and elective experience.
We fail to see precisely which of the three traits French possesses. And now we await the imminent response from Trump.
The world is drowning in steel – there is huge overcapacity in steel production worldwide. This is a direct result of the massive global credit expansion that has taken place over the past 15 years. Much of this capacity is located in China, but while the times were good, iron ore and steel production (and associated lines of production) was expanded everywhere else in the world as well.
Steel factory
Heavy industries like steel, which represent quite a high stage of the production structure, i.e. are temporally far removed from the consumption stage, are especially prone to falling prey to boom-bust cycles. In a fiat money system run by central planning agencies and supplemented by a fractionally reserved banking system, the amplitude of business cycles will be especially pronounced (readers may have noticed that systemic crises have become increasingly severe with every new iteration).
Experience shows that there exists a trade-off between frequency and amplitude: constant central bank intervention has lowered the frequency of economic downturns, but has it has made the crises much worse when they do strike, as imbalances have more time to accumulate.
Moreover, the economy’s long term wealth creation capacity is slowly but surely fatally undermined, as more and more capital is consumed. This is evidenced by the fact that economic growth is increasingly giving way to stagnation nearly everywhere in the world.
Steel rebar futures prices in Shanghai, monthly – click to enlarge.
It is easy to see that the steel industry has been one of the focal points of the last cycle – all we need to do is look at the price history of steel. The longest continuous chart of steel rebar futures we could find is the one shown above, so we are supplementing it with a longer term line chart that shows steel prices from 2003 to 2014. As can be seen, current prices are well below the level they inhabited in 2003. In short, the entire price rise of the “bubble period” has been erased.
Steel prices from 2003 to 2014 – the red line on the right hand side indicates current price levels – click to enlarge.
The Return of “Just Prices”
As a result of all this, the steel industry (along with many other commodity industries) is facing a painful time of liquidation and reorganization. On the other hand, lower steel prices are obviously benefiting all steel users, such as the car industry and the construction industry, to name two important ones. Consumers obviously stand to benefit greatly from this as well, as the latter industries will have more scope to lower the prices of their products.
It seems glaringly obvious that in Western countries, the industries benefiting from low steel prices are far larger and far more important than the steel industry. And it should go without saying that anything that benefits consumers should be enthusiastically welcomed. In fact, the benefit to consumers should be the only standard by which such situations should be judged.
Moreover, lower steel prices are an important signal to the marketplace – they tell entrepreneurs that investments need to be shifted. There is no point in tying up factors of production in steel factories – it will be far better if they are deployed elsewhere.
All of this makes it utterly absurd that the EU, the US and China have begun slapping each other with massive tariffs on steel imports over the past several months (here are links to articles giving some color on the moves made by the EU and the retaliatory moves made by China). The latest event in this comedy of economic error is a massive increase of tariffs introduced by the US commerce department that involves not only China, but several more countries:
“The U.S. Department of Commerce (“DOC”) has made its final decision on anti-dumping investigations on imports of corrosion-resistant steel and concluded that China, India, Italy, South Korea and Taiwan are selling these products in the U.S. market below their fair values and therefore, are subject to anti-dumping duties.The ruling marks yet another major step in stemming the torrent of unfairly-traded foreign imports.
[…]
The biggest U.S. steel producers [five of them all in all, ed note], in June 2015, filed anti-dumping and countervailing duty petitions with the U.S. International Trade Commission (USITC) and the DOC against five countries accused for illegally dumping cheap corrosion-resistant steel.
[…]
Imports of corrosion-resistant steel from China, India, Italy, South Korea, and Taiwan were valued at an estimated $500.3 million, $219.6 million, $110 million, $509.1 million, and $534.4 million, respectively, in 2015 (combined value of nearly $1.9 billion). These products are being illegally dumped by foreign steel producers in the American market at unfairly low prices that significantly undercut the prices of U.S. steel makers.
The DOC, on Wednesday, imposed a whopping final anti-dumping duty rate of 209.97% on imports of these products from China. This will hurt Chinese exporters including Yieh Phui (China) Technomaterial Co. Ltd and Jiangyin Zongcheng Steel Co. Ltd. India, Taiwan, South Korea, and Italy received anti-dumping duties in the range of 3.05% to 92.12%.”
(emphasis added)
This article almost sounds like a satire of sorts. First of all, there is apparently a VAST CONSPIRACY between the steel makers in all these countries, hitherto well hidden from the public eye. Thank the Lord that US steelmakers have spotted it in good time! Who knows what evils may have befallen us otherwise!
Alas, the assertion that steel is “dumped below its fair value” requires us to accept the ludicrous idea that a bunch of bureaucrats actually knows what the “fair value” of steel is supposed to be. In Europe, medieval scholars once extensively discussed the notion of a “just price” in the context of religious doctrine – a debate that went on for centuries. They eventually concluded that there is no just price apart from the market price.
It took these several centuries of learned debate to finally get rid of most of Charlemagne’s extensive and absurd price controls. So essentially, today’s bureaucrats are assuming the role once played by kings, popes and their representatives in determining “just” prices. It sounds almost as though more than a thousand years of progress have just gone “poof”.
Karolus Magnus, a.k.a. Charlemagne, who introduced countless price controls and economic regulations at the Council of Nijmegen in AD 806. It took centuries to get rid of the economic decrees he and his successors imposed in the name of church doctrine (the fashionable pretext at the time. Today the pretext is provided by socialist doctrine).
No Fair! The Economics of “Dumping”
Let us briefly consider the economics of so-called “dumping”. From the perspective of consumers, the case seems crystal clear. Imagine for example that you long wanted to buy a new car, but were put off by its high cost. Suddenly, a car dealer near you lowers the price of the car you want by 30%. Are you going to a) buy it or b) complain about his “car dumping” and alarm the local Spanish Inquisition rep… , sorry, commerce department representative?
We can tell you what 99.99% of consumers would do. We can probably agree that if the remaining 0.01% had a second brain, it would feel lonely. We would come to similar conclusions about a car manufacturer complaining about low steel prices. We’d rightly consider him to be a few French fries short of a happy meal.
No-one expects the Spanish Inquisition!
However, those complaining are of course the steelmakers (all five of them!). What are they really complaining about though? As the charts above show, steel prices are currently very low, and steelmakers obviously don’t like that. So they demand that the State artificially raise them, under the pretext that low import prices constitute evidence of “dumping”.
In case you were wondering how the International Trade Commission of the department of commerce determines whether dumping takes place, here is the official definition of “unfair” prices (get out those prayer beads, ye unbelievers, as we familiarize you with official doctrine!):
“Dumping occurs when imported merchandise is sold in, or for export to, the United States at less than the normal value of the merchandise.”
See how easy it is? According to our sources, it was not quite clear whether the “normal value” of steel was last week’s or last year’s price, or the price in Shanghai or in Rome, so darts were thrown at the steel rebar futures chart we showed above (we cannot guarantee that his is how it really happened).
So the governments of the US, the EU and China are acting as enforcement arms of domestic steelmakers to the detriment of everybody else. Does that make any sense whatsoever? What if Chinese steelmakers offered to give us steel for free? Should we refuse to take it? Shouldn’t we rather be happy to get such a generous gift?
Even if allegations that China’s government is subsidizing its steelmakers are true (i.e., to be precise, if it is true that it is subsidizing them more than other governments are subsidizing theirs), it seems to us that the party that would be hurt the most by said dumping activity would be the dumpers themselves. We should happily let them proceed, in fact, they should be encouraged! The dumpers are evidently subsidizing US consumers and helping to raise their living standards. What’s not to like?
Here is something protectionists never talk about: if one makes it more difficult for others to sell their wares, how are they supposed to pay for what one wants to sell to them? If one thinks their arguments through, protectionists seem to believe that it would be best to have no trade at all. When they first came up with their ideas, they must have been thinking of all those immensely rich villages in the world’s most inaccessible mountain regions.
High up in the Nuba Mountains, where the rich guys live!
Coalition of Obsolete Industries
Obviously though, the governments involved in this trade spat are only acting in the best interests of steel workers. Just as they are only acting in the best interests of taxi drivers when regulating Uber out of existence in a city. Why, we should actually consider bringing back VHS video while we’re at it. Someone must have made those tape machines and tapes, and obviously they’re all out of a job as well.
We have remarked on previous occasions that stopping and reversing economic progress seems to be a major function of governments – and as the makers of the video below rightly ask: How are we ever going to have jobs if we don’t stop progress? Naturally, the same applies to free trade.
It’s time to side with the coalition of obsolete industries! Patriotic duty, etc.!
Conclusion
If Western steelmakers are not able to compete with Asian ones at current steel prices, then jacking import prices up by 200% may temporarily help to keep them in business, but they will no longer have an incentive to become more efficient. In the long run, they will simply be set up for an even bigger fall. The may enjoy an advantage for a brief time, but it isn’t going to last.
Since the amount of capital is finite, tying up capital and labor in an inefficient sector of the economy perforce deprives other sectors of these resources. Here one can interweave our example of the consumer who considers whether or not to buy a car, and finds to his delight that it is offered at a 30% discount one day. The money he saves will now be available for other uses.
In other words, not only is our hypothetical consumer’s living standard raised immediately, but the funds he saves will also benefit others. Whether he saves the money or spends it on other consumer goods, more economic opportunity will ensue. The important thing is that it is the consumer making the allocation decision.Ultimately the economy’s production structure is supposed to serve consumers after all – not government bureaucrats and cronies.
Did SoftBank just ring the bell at the top for internet retail giants?
Shortly after the close, Japan’s SoftBank Group Corp., the largest and one of the oldest investors in Chinese e-commerce giant Alibaba, said it would sell at least $7.9 billion of its stake (with an option to sell another $1 billion) in the company to boost its cash position and pay down debt.
According to the filed press release, SoftBank has established a new vehicle called the Mandatory Exchangeable Trust, with the intention of divesting $5 billion in Alibaba’s American depositary receipts in a private placement “to qualified institutional buyers.” SoftBank will also sell 2 billion in shares back to Alibaba, $400 million to members of the Alibaba Partnership and $500 million “to a major sovereign wealth fund.”
As a result of the partial liquidation, Softbank’s holdings will decline from 32% to 28%. As Bloomberg adds, the sales are part of a broader effort by the Japanese technology giant to reduce its leverage.
In the press release, SoftBank Chairman and CEO Masayoshi Son said that “this investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects,” SoftBank Chairman and Chief Executive Officer Masayoshi Son said in the statement. “In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership.”
In a separate statement, Jack Ma, Alibaba’s chairman, said that “as SoftBank looks to strengthen its own balance sheet, Alibaba determined that it was the best use of our capital to re-invest in our own business through an efficient buyback of a large number of shares in our own company that is accretive to our stockholders.”
U.S. web portal Yahoo! Inc. has about a 15 percent stake in Alibaba – part of the remaining holdings it first acquired in 2005 for about $1 billion. Yahoo has been seeking a tax-efficient way to separate from the stock. Most recently it has sought to sell its core web assets in a strategic review.
BABA stock declined 2.8% in after hours trading Tuesday after the announcement; it is still up roughly 20% in 2016.
* * *
The press release is below:
SoftBank Announces a Minimum $7.9 Billion Monetization of its Alibaba Stake in Coordination with Alibaba Group
Proceeds from Capital Raise to Reduce SoftBank’s Leverage
Consistent with the Company’s SoftBank 2.0 Disciplined Capital Structure Management Strategy
SoftBank to Remain Alibaba’s Largest Stockholder and Close Strategic Partner
SoftBank Group Corp. (“SBG”) today announced that it has approved a series of capital raising transactions (the “Transactions”) which involve monetizing a portion of the shares of Alibaba Group Holding Limited (“Alibaba”) held by SBG’s wholly owned subsidiary SB China Holdings Pte Ltd (“SB China”).
Specifically, the Transactions are comprised of (i) the intended sale of $2.0 billion of Alibaba ordinary shares to Alibaba, (ii) the intended sale of $400 million of Alibaba ordinary shares to members of the Alibaba Partnership acting collectively, and the sale of $500 million of Alibaba ordinary shares to a major sovereign wealth fund pursuant to an exemption from registration under the U.S. Securities Act and (iii) an intention of the Mandatory Exchangeable Trust (“Trust”), a newly formed trust, to offer, subject to market conditions and other factors, $5.0 billion aggregate purchase price of its mandatory exchangeable trust securities (“Trust Securities”) exchangeable into American depositary shares (“ADSs”) of Alibaba in a private placement to qualified institutional buyers pursuant to Rule 144A under the U.S. Securities Act. The Trust expects to grant the initial purchasers of the Trust Securities an option to purchase up to an additional $1.0 billion aggregate purchase price of Trust Securities.
1. Purpose of the Transactions
Following SBG’s first investment in Alibaba in 2000, the two companies have built a close relationship through business partnerships, joint ventures, joint investments and other collaborations. SBG Group held 32.2%1 of Alibaba’s issued and outstanding shares as of March 31, 2016, and Alibaba is an equity method affiliate of SBG. SBG continues to be committed to its partnership with Alibaba, and the Transactions are driven purely by SBG’s capital structure and de-leveraging objectives.
A disciplined approach to capital structure and leverage is fundamental to our SoftBank 2.0 transformation strategy. The Transactions are expected to allow SBG to monetize a portion of its Alibaba shares in order to increase its liquidity cushion, improve SBG’s consolidated net interest-bearing debt / EBITDA ratio (excluding Sprint Corporation) from 3.8x as of March 31, 2016 to approximately 3.3×2, and enable flexible and prudent financial management. The sale of Trust Securities is expected to allow SBG to monetize its shares at a potential premium to the current share price, while eliminating downside risks as a result of owning these shares. The Trust Securities are expected to be settled upon exchange by delivery of Alibaba ADSs representing the pledged shares, which is expected to occur on the scheduled exchange date (in 3 years), and both the sale of Alibaba ordinary shares and the issuance of the Trust Securities will enhance SBG’s financial profile. SBG plans to use the proceeds of the Transactions for the repayment of interest-bearing debt as well as other general corporate purposes.
SBG would continue to hold approximately 28%3 of Alibaba’s total outstanding shares following the Transactions (excluding the ordinary shares that are expected to collateralize the Trust Securities). Alibaba will remain an equity method associate of SBG. SBG expects that its Alibaba shares will continue to be a core shareholding of SBG and it intends to maintain its strong relationship with Alibaba. SBG’s Chairman & CEO, Masayoshi Son, will remain a board director of Alibaba, and Alibaba’s Executive Chairman, Jack Ma, will remain a board director of SBG.
In connection with the Transactions, SBG will also enter into a lockup agreement with Alibaba under which it has agreed not to transfer any Alibaba shares held by it for a period of six months, subject to certain exceptions.
“When I first met Jack Ma, I knew immediately he had the vision and passion to build the world’s leading e-commerce company, and I was very happy to invest alongside him to help him realize his ambition,” said SBG Chairman and CEO Masayoshi Son. “This investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects. In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG looks forward to the continued partnership.”
2. Overview of the Transactions
The Trust will enter into a variable forward purchase agreement to acquire Alibaba shares from West Raptor Holdings, LLC (“WRH LLC”), a wholly owned subsidiary of SoftBank Group International GK (“SBIGK”), which in turn is wholly owned by SBG. At the closing of the offering of the Trust Securities, the Trust will pay to WRH LLC the proceeds received from the issuance of the Trust Securities, excluding amounts in respect of the Trust’s expenses and amounts used to purchase U.S. Treasury securities, which will fund quarterly distributions on the Trust Securities. At the exchange date, which is expected to be the first scheduled trading day after June 1, 2019, the Trust will exchange each Trust Security for a certain number of ADSs (determined with reference to the trading price of the ADSs at that time) or, subject to WRH LLC’s election, cash or a combination of cash and ADSs. Under certain circumstances, including at WRH LLC’s election, the Trust Securities may be exchanged prior to the scheduled exchange date.
In addition, SB China will enter into separate share purchase transactions with each of Alibaba, members of the Alibaba Partnership, acting collectively, and a major sovereign wealth fund for the purchase of approximately $2.9 billion of Alibaba shares held by SB China, of which approximately $2.0 billion of the total is being purchased by Alibaba. The sales to members of the Alibaba Partnership acting collectively, and a major sovereign wealth fund would be exempt from registration pursuant to an exemption from registration under the U.S. Securities Act, and the shares would be eligible for resale under Rule 144 following a 6-month holding period (subject to additional restrictions applicable with respect to shares acquired by affiliates under Rule 144).
3. Impact on Consolidated Financial Results
The impact on consolidated financial results from the Transactions will be disclosed as necessary once it is determined.
Less than a month after a damning report emerged that a high-ranking police officer has alleged that his seniors tried to strike the word rape from an internal police report after the mass sexual assaults in Cologne over New Year, Germany is gripped in a new sexual assault scandal involving refugees. Eighteen German women have filed police complaints saying they were sexually assaulted at a musical festival in Darmstadt. Police arrested three refugees from Pakistan at the scene after three of the women immediately reported their attacks.
According to Die Welt, the sexual assaults are reported to have taken place at the Schlossgrabenfest music festival in the city of Darmstadt, near Frankfurt, on Saturday night. The festival in Darmstadt took place over four days and attracted some 400,000 revelers.
Three of the women immediately alerted police at the festival that they had been assaulted. They said they had been surrounded and then sexually harassed by a group of men who were of South Asian appearance.
“Unfortunately several women were sexually harassed on Saturday, when the dance floor area was completely packed,” the police said in a statement, quoted by RT.
And once again, refugees are implicated: as RT adds, due to the quick intervention by the law enforcement officers, three suspects, who are asylum seekers from Pakistan and aged between 28 and 31, were promptly apprehended. Police added that there could be more who took part in the attacks that are still at large.
Since the arrests were made, a further 15 women have come forward since Tuesday, to say they were sexually assaulted at the festival. The women added that the pattern of the attacks was similar, as they were surrounded by a group of men, who proceeded to assault them sexually.
These attacks take place just over two weeks after two female teenagers, 17- and 18-years-old, were sexually harassed by a group of 10 men during a street festival in Berlin. The men allegedly pressed against the teens and groped them, blocking their attempts to escape.
Following that attack, police arrested three teenagers aged between 14 and 17 at the scene, while they tweeted that the three suspects were known to the police from prior incidents, adding that “two are of Turkish descent and the third is [of] unknown [origin].”
The attacks in May were reminiscent of numerous allegations of sexual assaults being reported in Cologne on New Year’s Eve. Some 1,049 people said they were victims of attacks allegedly committed by men of North African and the Middle Eastern descent, while about 821 complaints were filed with the police.
German police were heavily criticized for their perceived lack of activity during the New Year’s Eve celebrations in the city as well as for their poor investigations into the crimes. Cologne Police Chief Wolfgang Albers resigned a week after the incident.
A welcoming Germany has taken steps to try and assimilate asylum seekers into German culture, with one education center even holding classes to explain to refugees how they should interact with women in Germany, as well as flyers how to interact with women at local public pools.
“The majority don’t have a clue how to approach the opposite sex in this country,” said sex therapist Christian Zech, who works with the Pro-Familia center, specializing in sexuality, partnership and family planning.
We doubt that excuse justifies the recurring stories of sexual assaults involving refugees and local women.
Meanwhile, the German government has said will allocate nearly €94 billion (US$105 billion) for incoming refugees over the next five years. The money will be used for housing, “integration”, German language courses and social welfare benefits, as well as dealing with the underlying causes of the refugee influx.
The Federal Finance Ministry expects around 600,000 refugees to enter Germany in 2016, some 400,000 in 2017 and about 300,000 each consecutive year. In 2015, an estimated 1.1 million arrived in Germany seeking asylum.
Some in Germany have not taken kindly to the mass arrivals of asylum seekers, mainly from the Middle East and North Africa, with German police recording 45 cases of arson at refugee centers since the start of the year, while there have been calls for Chancellor Angela Merkel to cap the number of refugees entering Germany.
Curiously, none other than Buddhist spiritual leader, the Dalai Lama opined on the current migrant crisis in Europe. Cited by Austria’s Krone, the monk said that he is skeptical about the refugee trend in Germany: “Germany cannot become an Arabic country, Germany is Germany!”, he told reporters of the “Frankfurter Allgemeine Zeitung”.
He added that from an ethical point of view, it is justifiable to only accept refugees on a temporary basis. “The number of migrants in Germany is too high. The aim should be, that these people return to their home countries and help rebuilding infrastructure.”
Ultimately, the future of such dramatic scenes may be in the hands of none other than Turkey’s president Erdogan, who has repeatedly warned that if Europe does not follow through with its promises of visa-free travel for Turkish citizens, he may unleash another wave of refugees using the “land corridor” which ultimately ends in Germany.
The impact of US-style "safe space" politics, in which causing offense is held to be a grave sin, is also limiting freedom of speech abroad. As Oxford Professor of European Studies Timothy Garton Ash exclaimed, figures like Jesus, Charles Darwin and Karl Marx would all be banned from British universities today due to the rise of social justice warrior pressure groups and correspondingly populist counter-extremism legislation.
This is "a double-pronged attack on free speech," Ash told an audience at the Hay literary festival on Monday.
As RT reports, as well as Marx, Darwin and Jesus, he warned that philosophers like Rousseau and Hegel would today be banned from campuses.
Referring to the UK government-led Prevent scheme, intended to keep extremism out of educational institutions, Garton Ash warned that:
“securocrats in the Home Office” are imposing bans which would “prevent even non-violent extremists speaking on campus.”
“Now non-violent extremists? That’s Karl Marx, Rousseau, Charles Darwin, Hegel, and most clearly Jesus Christ, who was definitely a non-violent extremist,” the academic said. The Home Office “wouldn’t want him preaching on campus,” he added.
But state intervention is only one side of the coin, Garton Ash said, arguing that the impact of US-style “safe space” politics, in which causing offense is held to be a grave sin, were also limiting freedom of speech.
He said there is a “certain push from below from our own students demanding so-called safe spaces” which involved “no platforming” people simply on the basis that particular students disagreed with them.
“It’s one group of students censoring another,” he said, warning this resulted in free speech being “salami sliced” away.
Garton Ash said the UK, “which in a way invented the modern version of free speech in the 17th century, is in my view much too feeble when it comes to standing up for free speech.”
No matter where you go in life, someone will be there to offend you. Maybe it’s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your “safe space” away from the harmful words of others, then you’re best to just stay put at home. Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It’s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.
It has long been my contention that the elite are more than willing to do whatever they have to do to keep Donald Trump out of the White House. There are many forms that this could take, and one potential option just became a little bit clearer. On Sunday, the founder and editor of the Weekly Standard, Bill Kristol, announced on Twitter that there “will be an independent candidate–an impressive one, with a strong team and a real chance.” Kristol has very, very deep ties to the Republican elite, and so this is certainly not an idle threat. At this point we do not know who the candidate will be, but some of the names that have been mentioned include Mitt Romney, John Kasich, Nebraska Senator Ben Sasse and billionaire Mark Cuban. Of course dividing the conservative vote would be suicidal and would virtually ensure a victory for Hillary Clinton in November. So why would Kristol and other Republican elitists want to do this?
That is a very good question, and it goes to the very core of how the game of politics is played in America today.
The truth is that the elite are accustomed to being in control of both parties, and that is why things never seem to change very much no matter who is elected.
But this time someone that the elite do not control has miraculously captured the Republican nomination, and this scares them to death.
So now the mission is to destroy the Trump candidacy at all costs, even if that means having the Republican elite sabotage the Republican nominee.
I wasn’t sure if they were actually going to pull the trigger on a major third party candidate, but Bill Kristol now says that this is absolutely going to happen…
Just a heads up over this holiday weekend: There will be an independent candidate–an impressive one, with a strong team and a real chance.
I would be upset too. For the Republican elite to purposely sabotage Trump and throw the election to Hillary Clinton is seemingly insane. This is something that Ben Carson commented on during a recent interview with Fox News…
Former 2016 candidate and Trump backer Ben Carson, speaking Monday on Fox News, echoed Trump’s warnings and invoked the 1992 presidential race as an example.
“A quarter of a century ago, another Clinton was running for the White House, and it was the entrance of a third-party candidate, Ross Perot, that made it possible for him to win,” Carson said. “Wouldn’t it be ironic if the same thing happened this time?”
Of course Kristol and the others that he is working with know precisely what they are doing.
There is no way in the world that Romney, Sasse, Kasich or Cuban could win. But that wouldn’t be the goal anyway. The goal would simply be to deny five or ten percent of the vote to Trump so that Hillary would win in a landslide.
At one time it seemed like such sabotage would not be necessary, but now polls have begun to shift and the elite are beginning to panic. Here is one example of how the numbers have shifted…
That data and recent events suggest that Wall Street, which currently prefers former Secretary of StateHillary Clinton to real estate mogul Donald Trump, may not get the president it wants. According to the Iowa Electronic Markets, a prediction online betting platform, the probability that we’ll see a Democrat take the White House in 2016 is shrinking fast.
“The Democratic candidate was all but a certainty to win the presidency less than a month ago—it was at 74 percent and it’s down to 58 percent today,” said Hickey.
In a head to head matchup, there is a very real possibility that Trump could defeat Clinton. So that is why the elite feel that they have to make a move.
But we probably will not find out the identity of the third party candidate until some time in June at the earliest. In fact, a source that is involved in this third party effort told CBS News “not to expect an announcement for a couple of weeks.”
So for the moment, we will wait.
But without a doubt, there appears to be a unique opportunity for a third party candidate in this election cycle. A whole host of recent polls and surveys have shown that the American people are not pleased with either party at this point and that most Americans would like to see an alternative choice to either Clinton or Trump. The following comes from the New York Times…
The survey also found evidence of overwhelming interest in the presidential contest, although less than a quarter of Americans say they’re excited about it.
Worse, 55 percent of Americans, including 60 percent of Republicans and 53 percent of Democrats, say they feel helpless about the 2016 election. And two-thirds of Americans under 30 report feeling helpless.
“I am despondent,” said Cserbak. “I wouldn’t say I feel totally helpless. I do have a vote.”
Of course no matter who runs as a third party candidate, there is no way in the world that individual will win. Any third party candidate will simply play the role of spoiler, and will throw the election one way or the other.
I understand that a lot of people out there are very excited about Trump. And it would be very nice to think that the American people could actually elect a president that is not controlled by the elite.
But that is not how the real world works, and over the next several months we are going to get a very clear lesson in power politics.
If necessary, the elite will move heaven and earth if that is what it takes to keep Donald Trump out of the White House. Anyone that would suggest otherwise simply doesn’t understand how the game is played.
Back in March, the former Fed chairman said that we're in trouble because "productivity is dead in the water, and real capital investment is way below average because business people are very uncertain about the future." Greenspan went on to add that entitlement programs are crowding out capital investment, and thus crowding out productivity."
Alan Greenspan is back delivering more warnings about the state of the global economy, hammering home the same key points made back in March.
"We have a global problem of a shortage in productivity growth and it's not only the United States but it's pretty much around the world, and it's being caused by the fact that populations everywhere in the Western world are aging, and we're not committing enough of our resources to fund that. We should be running federal surpluses right now not deficits. This is something we could have anticipated twenty five years ago and in fact we did, but nobody's done anything about it. This is the crisis which has come upon us."
Of course nobody has done anything about it Alan, your prior employer makes it so that precisely zero fiscal accountability needs to take place.
Entitlements are still a hot button issue with Greenspan (as they should be for everyone), saying that if we don't fix this issue we're headed for a disaster. Greenspan wants entitlements (and the America's inability to fund them in any way shape or form) to be the central issue of the presidential debate.
"Entitlements are crowding out savings, and hence capital investment. Capital investment is the critical issue in productivity growth, and productivity growth in turn is the crucial issue in economic growth. We're running to a state of disaster unless we turn this around."
"This should be the central issue of the presidential debate. Unless and until we can rein in entitlements, which have been rising at a nine percent annual rate in the United States and comparable levels throughout the world, we are going to find that productivity is going to maintain a very low rate of increase"
Greenspan also doesn't really view recession as the biggest problem right now, he is concerned (rightfully so) about the longer term problem of low economic growth and soaring entitlement growth.
"I don't think that's our problem. Our problem is not recession which is a short-term economic problem, I think youhave a very profound long-term problem of economic growth at the time when in the Western world there is a very large migration from being a worker to being a recipient of social benefits"
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As we said last time Greenspan spoke some truthiness for once, if only he hadn't gotten us into this mess in the first place.
It’s irresistible, enticing and addicting. And, as News10.com reports, it’s available 24-hours a day all over the world to billions of people. Facebook beckons to users seemingly with a two-prong approach – both the pressure and pleasure to post. We share stories, photos, triumphs and tragedies. It is ingrained into our daily lives so deeply that studies show people check Facebook, on average, 14 times a day. With all those eyes all over the globe dialed in and the purchasing power available, the online giant has tapped into a controversial delivery of data into its intelligence gathering. It all starts with something that you may not even realize is enabled on your phone.
A little-known feature deeply embedded in Facebook's privacy settings is causing users to think twice aboutnot just what they write but what they say. As TheAntiMedia.org's Clarice Palmer explains…
The debate over Internet privacy and the responsibility social media companies should carry in protecting user privacy never ceases to spark controversy — among both users and tech insiders. But while Facebook, one of the most popular social media networks, struggles with accusations of news suppression and even fraud, a new report on the network’s microphone settings is reigniting past fears of surveillance that were never fully addressed.
According to University of South Florida Professor Kelli Burns, Facebook is a huge part of the lives of smartphone users. Due to this widespread addiction, Burns explains, “Anytime you’re using your phone, any kind of information that you’re putting into your phone, looking at on your phone, Facebook can access that.” But details regarding what you’re doing or what you’re browsing while on Facebook are not the only type of data the Silicon Valley giant can access. The social media’s microphone feature, which can be enabled by the user via Facebook’s settings, is also listening.
A few months back, a Facebook user took their concerns over the microphone settings to Reddit. The post quickly went viral, prompting Facebook to issue a statement on the matter. According to the social media network, the company does not “record your conversations.” Instead, the statement claimed, if the user chooses to turn the microphone feature on, Facebook will “use your microphone toidentify the things you’re listening to or watching based on the music and TV matches we’re able to identify. If this feature is turned on, it’s only active when you’re writing a status update.”
But According to ABC’s WFLA, Burns might have been able to prove Facebook isn’t telling the whole story behind this technology.
From the publication:
“We tested the theory with Kelli, and even we were surprised by what we found and saw.
“Kelli enabled the microphone feature and talked about her desire to go on safari, right down to her mode of transportation. ‘I’m really interested in going on an African safari. I think it’d be wonderful to ride in one of those jeeps,’ she said aloud, phone in hand.
“Less than 60 seconds later, the first post on her Facebook feed was a safari story that seemed to pop up out of nowhere. Turns out, it was a story that had been posted three hours earlier. And, after mentioning a jeep, a car ad also appeared on her page.”
This test, the news organization contended, demonstrates how Facebook picks up “buzz words” in order to show that particular user ads and posts matching their interests. The fact the professor made those comments after turning the feature on may serve as an example of how easily Facebook can trick users into giving the company access to their private conversations.
Though Facebook claims it does not store or share user information, the very existence of the technology may give hackers, including government-backed security experts, a reason to explore private data further, putting the privacy — and even safety — of Facebook users in danger. What’s more concerning about this issue is the company’s previous association with the U.S. National Security Agency’s PRISM program, which gave federal agents access to users’ private data, including, emails, photos, and instant messages, among other things. While Facebook’s more recent claims concerning user privacy regarding the microphone feature might be legitimate, the company’s former cooperation with NSA officials could indicate the feds may seek to explore the microphone feature — whether Facebook agrees with them or not.
Smart TV manufacturers like Samsung have recently been forced to publicly address privacy concerns after news broke the technology was listening to users’ conversations. As the same users learn Android Smart TVs may also present vulnerabilities that give hackers the ability to record what they do, other members of the tech industry, like Facebook, might also face growing obstacles and skepticism from users.
In contrast, though Apple has aligned with the federal government in at least one case, the company was widely praised for standing for privacy rights in a legal standoff involving the FBI over the San Bernardino shooter’s iPhone. But unlike Apple, whose hesitation regarding lobbying practices has earned negative attention from Congress in the past, Facebook has a relatively cozy relationship with Washington. Whether this relationship is mutually beneficial to both parties — and whether Facebook will respond like Apple has — remains to be seen.
…the article Facebook appears to confirm that it does indeed use your microphone — which means it listens to and uploads the contents of speech and other sound around you when you are using the app.
Explain to me, if you would, why you'd ever allow such a device in your pocket? Further, please explain to me exactly why you believe Facebook would only use this for "ad targeting"….. when there is literally nothing to prevent them from doing otherwise.
And finally, please explain why this is legal and Facebook and its officers are not under criminal indictment, particularly when you consider that people other than you may well speak within the listening range of your microphone, and while you may have given consent they did not and further, they had no idea they were being recorded!
So you want to have a conversation with me, eh? Well I don't consent to being recorded, and in many states (including Florida)unless said recorder is either openly and notoriously present and thus obvious (giving me the clear option to refuse to talk to you in its presence) or you have my consent it's a felony to make that recording in any situation where I reasonably believe I'm not being taped or overheard.
Oh by the way, the use to which you put the recording is immaterial; it is not legal in this state to do so for "purely" advertising purposes; any such use is unlawful and in fact it is a felony in this state.
Heh Zuckerpig — your ass ought to be indicted for this crap, and Florida is not alone in criminalizing this activity.
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And finally, here is a media design professor exposing how his Facebook provacy settings were opted back in without notice or consent…