Category: zerohedge

One month ago, when we updated on the performance of Horseman Global, what until recently was the world’s most bearish hedge fund with a record net short exposure of -98%…

… at least until Icahn Enterprises emerged with its even more gargantuan -149% net short…

 

… we cited fund CIO Russell Clark who observed the fund’s dramatic -9.6% drop in the month of March, and made it clear that he wasn’t going anywhere because he was confident that the move was nothing but a short squeeze, which – if anything – made Clark even more bearish.

I can hear you say, how do you know this is just a short squeeze, and not the beginning of something much more substantial? While equities are trying to send a bullish tune, the 200 day moving average is now trending down for S&P, Dax and the Nikkei. This is not bullish. Furthermore, yield curves in the US, Japan and Europe have flattened. This is not bullish. Yen is rallying. This is not bullish. We have seen substantial covering by the market. This is not bullish.

 

To my mind, if you want to be short, this looks about as good as it gets.

One month later and not everything is working out according to plan because after last month’s nearly 10% drop, the losses continued and Horseman lost another 4.3% in April and -5.1% YTD after being up as much as 10% in the first two months of the year.

 

What happened? Well, as Clark puts it ever so well, “I think something has changed.“

Your fund fell 4.29% net last month.

 

To lose 4.29% last month was a bit of a surprise to me, as most of the technical indicators I use indicated that the short squeeze was largely over at the end of March, and yet it continued into April.

 

The question to be answered after a drawdown is always the same, “Has something changed?”. In this case, I think something has changed. The overwhelming theme of the market for the past 18 months or so has been that of a strong dollar. European and Japanese markets had performed well as their currencies weakened versus the dollar, and commodity prices were generally weaker. Furthermore the strong dollar put pressure on the renminbi and encouraged thoughts of a Chinese financial crisis.

 

I was aware of the consensus in the market and put hedges in place to offset a weak dollar. I have had since last year long euro and long yen positions in the currency book, while having short Japanese and European exporters in the short book since last year. These hedges have performed very well, and have been the main reason that despite the drawdown, the fund has managed to hold on to most of the gains from last year.

 

The message that I am getting from the market, the “something” that has changed is that the US dollar is no longer a strong currency. Typically the US dollar falls when its economic cycle begins to roll over. Many of the indicators that I look at show the US is either in or heading for recession. These indicators include; the US trade deficit ex petroleum products which is back to 2006 levels; US capacity utilisation peaking in late 2014 and declining rapidly ever since; and US high yield have generally been widening since 2014.

 

Historically, a weak US dollar is good for commodity prices, and it is also good for emerging markets. This has played out this year, where we have suffered pain on emerging markets and commodity shorts, but have gained on Japanese and European shorts. Given that the US dollar could potentially fall significantly from here, it seems to me that we should take what have been hedges to our portfolio (that is long euro and yen, short Japanese and European equities), and make this the core of the portfolio, while our emerging market and commodity related shorts should become the hedges.

 

Having realised this late in the month, we have already made substantial progress to making this change in the portfolio. We have increased our long euro position to 50% of the fund, and long yen to 30% of the fund. We have closed a number of emerging market financial shorts, and opened European financial shorts. We are now net short European financials. We have closed a number of US listed oil shorts and replaced them with shorted euro denominated oil stocks.

 

It is possible that the US dollar could be so weak, that the US equity bull markets can continue, but it would probably lead to depression and crisis in Europe and Japan. At the beginning of the year, an investor asked me to sum up current central bank policy. I described it as a circular firing squad, where at best perhaps one economy could escape, but most likely everyone dies. The gun that they hold is competitive devaluation. We know now who is most likely to live and who is most likely to die, and are making the appropriate changes.

 

 

Your fund remains short equities and long bonds.

And so it does, because after realizing that the “strong dollar” thesis is no longer dominant case, did Horseman cover any shorts? Not at all, and in fact quite the contrary: as of April, the hedge fund is for the first time in its history more than 100% net short, something Carl Icahn would surely appreciate.

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After many prominent blow ups in the retail and consumer space in the past week, moments ago Nordstrom was the latest casualty of the US consumer’s unwillingness to spend money when the company reported Q1 EPS of $0.26, missing consensus estimates of $0.46 by nearly half, and about a third of what the company earned last year despite relatively flat revenues of $3.25 billion which also missed expectations of $3.29 billion. Comparable sales dropped -1.7% on estimates of an unchanged print.

What was worse, however, and the reason why the stock is getting monkeyhammered after hours is that the company slashed its guidance, and instead of seeing a 0-2% increase in comp sales, JWN now expects -1 to +1% for 2016. Worst of all is that instead of seeing EPS of $3.10-$3.35, Nordstrom slashed earnings guidance, and now expects only $2.50-$2.70 in EPS for the full year.

None of this should come as a surprise: precisely one week ago we reported that the true state of the US consumer is deplorable when “All Six Retail Companies Reporting April Comp Sales Missed.” Now we are just seeking the flowthrough on the income statement.

The one good thing about JWN is that the company did not blame a stronger dollar (because it wasn’t in Q1), nor weather, but instead admitted the problem: lower sales. To wit:

“Our first quarter results were impacted by lower than expected sales. In response we have made further adjustments to our inventory and expense plans,” said Blake Nordstrom, co-president, Nordstrom, Inc. “As the pace of change in retail continues to accelerate, we remain committed to serving customers by taking steps that will continue to meet their expectations while driving profitable growth.”

The bottom line, of course, is that just like all the other retailers, Nordstrom is merely suffering from the same reason all the other retailers are getting crushed in Q1 –  a US consumer who simply refuses to spend. Since that same consumer accounts for two thirds of US GDP, the Federal Reserve has a major problem on its hands.

Some consumers who definitely won’t be spending much in the coming days are JWN longs: the stock has plunged as much as 15% after hours and is back to levels not seen since September 2011.

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Seriously…

 

Stocks were mixed today -Trannies and Nasdaq tumbled, the S&P ended marginally red and Dow barely held green.. Stocks were saved in the pre-NYMEX ramp from crude…

 

The path was insanely schizophrenic as algos have gone wild…(after soaring early, then crashing, then melting up)

 

The Dow has traveled 1500 points since the Payrolls print…and back red for the week

 

AAPL ugliness…

 

Yesterday's buying frenzy in bonds (and string 10Y auction demand) morphed into panic-selling-ish (as a weak 30Y and overall selling) senindg short-end yields positive for the week…

 

The USD Index resumed its uptrend today – 7th of last 8 days – as JPY weakened once again, running stops at yesterday's highs…

 

The USD ran the world again today…but once Europe closed, everything went up..

 

Commodities suffered on the day – all smacked as US equities opened – but of course oil BTFD'ers could noty help themselves…

 

Oil was just manic today also as no matter what the headline (Iraq discussing Freeze – BUY, Iraq increasing production – BUY), crude prices soared…

 

Charts: Bloomberg

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The situation in Venezuela is reaching all out chaos, as crippling socialist policies have resulted in a devastating power and food shortage, as well as looming political instability. This is Caracas today…

 

These are hungry Venezuelans protesting that their children are dying from lack of food and medicine and that they do not have enough water or electricity. As AgainstCronyCapitalism reports, this is a country with more oil than Saudi Arabia, and the government has stolen all th emoney and now they bottleneck peaceful protesters and threaten them with bombs (or haul them to prison and torture them).

On the other side, Vice President Aristobulo Isturiz, speaking on state television, said that a separate march will be held to support the extension of President Nicolas Maduro’s economic emergency decree.

As SHTFPlan.com's Mac Slavo details, the point was reached long ago where people were forced to wait in long lines for basic rations that may not even be there, or turn to the black market.

Now, hunger and scarcity have apparently reached a tipping point that is driving people to poach stray animals and even pets for food.

According to the PanAm Post:

Ramón Muchacho, Mayor of Chacao in Caracas, said the streets of the capital of Venezuela are filled with people killing animals for food.

 

Through Twitter, Muchacho reported that in Venezuela, it is a “painful reality” that people “hunt cats, dogs and pigeons” to ease their hunger. People are also reportedly gathering vegetables from the ground and trash to eat as well.

 

The crisis in Venezuela is worsening everyday due in part to shortages reaching 70 percent […] six Venezuelan military officials were arrested for stealing goats to ease their hunger, as there was no food at the Fort Manaure military base.

As pure desperation sets in, crime also becomes inevitable.

A man accused of mugging people in the streets of Caracas was surrounded by a mob of onlookers, beaten and set on fire, according to the Daily Mail, who published a pixeled-out but still graphic video of the man burning:

An alleged thief suffered the most brutal mob justice in Caracas, Venezuela, when he was beaten up and burned alive in the street.

Roberto Fuentes Bernal, 42, was reportedly caught trying to mug passersby in the Venezuelan capital, and before police arrived at the scene, the crowd took the law into their own hands.

 

[…]

 

Local media reports that Bernal was taken to a nearby hospital and is receiving treatment for burns covering 70 per cent of his body.

One witness said Bernal had been caught trying to rob a man as he left a nearby bank, while another version of the story has Bernal arguing with his wife in the street. 

Here’s the video (Warning: Graphic):

There are factions vying to oust Maduro, but signs that he may hang on and force his population to endure more of this socialist nightmare.

Let us hope that these events don’t come home to the streets of America, and prepare to avoid them in case they do.

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While oil bulls were delighted by yesterday’s DOE news of an inventory drawdown refuting the prior day’s API news of a major build, what was ignored was the build in Cushing storage (more on that shortly), which according to Genscape hit a utilization just shy of 80%, or more than 70 million barrels, a record high since Genscape began monitoring the hub in 2009. To be sure, the risk of running out of land storage has been one we have previously discussed on various occasions and hinted that one way this is being circumvented is with substantial amounts of oil being stored on tankers at sea, mostly by commodity trading companies who take advantage of the oil contango to generate month to month profits as producers choose to keep their product away from the market until prices rise.

As it turns out, not only is this the case, but according to Reuters, one particular energy trader – a name well-known to Zero Hedge readers – Glencore, has built up a massive inventory stake in the Brent market where it now holds an unprecedented 30% position in Brent, which it is holding for offshore storage in its tankers in hopes of pushing the price of Brent, and thus the entire energy complex higher, by limiting supply.

As Reuters details, citing trade sources, Glencore has built up one of the largest positions in part of the Brent crude market which acts as a benchmark for global oil prices since the start of the year.

For those unfamiliar, the Brent market is based on four North Sea crude oils – Brent, Forties, Oseberg and Ekofisk, or BFOE. And, according to Reuters Glencore is quietly cornering the Brent market, by holding more than a third of the 37 BFOE cargoes loading in June and is expected to acquire more.

The report details that Glencore has been acquiring June BFOE cargoes through the “chains” – a forward market in which cargoes soon to be assigned loading dates are traded, according to trade sources citing data from pricing agency Platts.

“It’s definitely a bold statement of market view by Glencore,” said a trading source with another company operating in the North Sea. “You’d have to be in their heads and in their books to know exactly what’s going on.”

To be sure, Glencore has been alleged to “warehouse” oil previously, most recently in January when Bloomberg reported that “Glencore is said to be storing oil on ships off the coast of Singapore and Malaysia as a market structure known as contango allows traders to benefit from holding on to supplies for sale later. The commodities trader has at least 4 very large crude carriers, each of which can hold about 2 million barrels, floating at sea off the nations’ coast in Southeast Asia.”

However taking advantage of contango for contango purposes is one thing. Attempting to corner the entire market is something entirely different, and has direct implications on the price of oil, something Glencore can further benefir from if it were to be concurrently long Brent. 

According to Reuters, just under half of June’s supply of the four benchmark crude grades amounts to nearly 10 million barrels of oil – over 10 percent of daily world production. “Glencore have got big positions all over the place in BFOE,” said another North Sea trading source. “They are consistently keeping cargoes in the chains.”

he company has taken this position as supply underpinning the Brent contract is set to be smaller than in a typical month. In June, output of the BFOE crudes will fall to 740,000 barrels per day – the lowest in almost two years – mainly because of maintenance at Ekofisk oilfields.  This, say analysts, helped Brent futures for June delivery strengthen against the July contract and eventually trade at a premium – a structure known as backwardation and unusual when supply is generally ample.

It also means that Glencore was likely losing money on the actual month to month roll of its inventory, however it was more than offsetting losses if it was concurrently long Brent as removing 30% of the overall market supply has certainly pushed the price of Brent notably higher.

Reuters sources agreed with this assessment: “Glencore have obviously been very bullish,” the first trade source said. “Part of the explanation would be that they recognised there would be next to no Ekofisk around and the North Sea market would tighten up. So, why not?“

Why not? Well, because to some this stockpiling reeks of manipulation of the price by keeping a major amount of monthly supply off the market. And snce Brent and WTI tend to trade largely in tandem, the answer to “why not” is because millions of consumers would end up paying far more at the pump than if Glencore was not choking supply just to boost its own earnings.

One way to see the impact of this may be to look at the strip which both in Brent and WTI has flattened substantially as can be seen on the chart below, as prompt month manipulation by the likes of Glencore pushes spot higher even as hedgers and long-term investors continue to sell the long end on expectations of declining future prices.

 

With the expiry of the June Brent futures contract at the end of April, the spread between the first-month Brent contract moved to a discount to the second month, known as contango and a more typical structure when supply is ample.

Trading houses such as Glencore, along with rivals Vitol, Trafigura, Gunvor and Mercuria, buy and sell physical commodities, from natural gas, to copper or crude oil, moving millions of tonnes of raw materials around the world each year. But because there are a small number of participants in the Brent market and it is far easier to manipulate the price, and it is therefore both not uncommon, and in fact frequent, for them to take large positions, which sometimes lead to unusual patterns in related physical and paper markets, according to other traders.

Glencore is not the first one who has done this: in January, Shell accumulated a large number of Forties cargoes and was expected to ship many of them to South Korea. This coincided with the last time the first-month Brent contract traded in backwardation to the second.

As for the market impact on both Brent (and indirectly WTI) it is elementary finance that when supply is throttled, the equilibrium price will rise substantially, as has been the case in recent weeks.

Finally, one question remains: who benefits? Well, one look at the net spec Brent long position shows that someone has been very bullish the Brent price. In fact, as of the past few weeks, net specs longs have never been higher.

And now that we know which trader has been cornering the Brent physical market, we can also make an educated guess which (same) trader has also made huge profits by betting on the recent surge in the price of Brent. Which, since the (same) trader controls the actual supply of Brent, is about as close to a “no-brainer” trade as we have ever seen.

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As reported earlier on Pitchbook, regulators are venturing into fintech targeting online lending platforms.  Numerous lending platforms evolved post financial crisis in order to extend credit to millions of Americans that normal banks couldn’t extend credit to, or just flat out wouldn’t extend credit to.

As is natural with internet companies, though, the methodologies employed evolved leaving banks antiquated; they can’t (and couldn’t, and won’t be able to) compete given their cost to issue the dollar.

What’s one to do when you can’t compete?

Regulate out of existence.

If there’s anything big banks have, it’s relationships with politicians (Zero Hedge has a long and storied history of reporting any number and nature of those relationships). 

It’s also interesting that given there’s already regulations in place (see, for instance, the Truth in Lending Act) we need a whole new set of regulations to protect the people that are already protected under the old regulations. 

No doubt, the new regulations will be structured to allow now-existing banks to enter the market at the peril of the innovators and small businesses, while those seeking small business loans, mortgages, and various other lines of credit &v equity continue to suffer.

 

[Fundist Small Business Loans]

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Submitted by Jeffrey Snider via Alhambra Investment Partners,

I have referred to the June 2003 FOMC meeting many times before and I suspect that I will continue to do so long into the future. It was one of those events that should be marked in history, truly relevant to the future developments that became panic and now sustained economic decay. It’s as if the committee members at that time anticipated their current powerlessness – yet did nothing about it. Their preferred course from that moment until August 2007 was relieved ignorance.  

Despite the fact that the dot-com recession had ended more than a year and half before that gathering, the FOMC voted at that time to lower the federal funds target to just 1%. It was a serious difference in policy and something that nobody at the table seemed able to have imagined prior (not the least of which because they couldn’t ever explain the problem). Not only was the economy seemingly stuck after what was a really mild recession, there was the still looming implication of a slow-motion stock crash that for orthodox economists always conjured images of 1929. The FOMC saw sluggish recovery and were adamant about using monetary policy (as they understood it) to make sure the dot-com bust did no more damage than the first truly “jobless recovery.”

Since this was a paradigm shift in monetary policy, the Committee was forced to confront not just what it was doing but what it might someday “have” to do beyond it. The Bank of Japan had gone into QE as a world’s first just two years before, but until June 2003 nobody thought it would possibly apply to anywhere but Japan. Voting to lower the target to 1% provided that sober realization, suggesting if only for a moment of unusual clarity a non-trivial possibility that their confidence in themselves might not be as deep as they believed.

Chairman Alan Greenspan was blunt in his summation of the prospect, for once (likely because it was private) admitting that what lay ahead of them below 1% was not well understood. He had good reason to be apprehensive given the circumstances of that day:

One is that I don’t think we know enough about how the private financial system works under these conditions. It’s really quite important to make a judgment as to whether, in fact, yield spreads off riskless instruments—which is what we have essentially been talking about—are independent of the level of the riskless rates themselves. The answer, I’m certain, is that they are not independent. But how their dependency functions and how those spreads behaved in earlier periods is something I think we’ll need to know more about. The reason is that I don’t believe, as I said before, that we can construct an effective preemption strategy. Well, we can construct a strategy, but I’m fearful that it would not be very useful.

Greenspan raised this point in response to Dallas Fed President Robert McTeer’s report that banks and businesses in his district were resisting the Fed’s moves before ever getting to 1%. Some of that was associated with what the Committee and Greenspan called uncertainty, but in truth Greenspan (as in the quote above) was not entirely unsympathetic to what “ultra-low” might mean as potentially very different than more normal monetary operations – with good reason.

Unlike Ben Bernanke who was far more assured of himself during that discussion, Greenspan was willing to admit that there was much they didn’t know about the true systemic nature at and around the zero lower bound. Further, in anticipating that there just might be a need to find out, he tasked the Fed at least rhetorically to do just that:

What is useful, as has been discussed, is to build up our general knowledge so that when we are confronted with the need to respond with a twenty-minute lead time—which may be all the time we will have—we have enough background understanding to enable us to make informed decisions. We need to know how the system tends to work to be able to make the necessary judgments without asking one of our skilled technical practitioners to go off and run three correlations between X, Y, and Z. So I think the notion of building up our knowledge generally as a basis for functioning effectively is exceptionally important…Even if we never have to use the knowledge for the purpose of fighting deflation, I will bet that we will find it useful for other purposes.

Did they? Here’s former Dallas Fed President Richard Fisher, McTeer’s replacement, on CNBC today:

Fisher said Fed policymakers did not anticipate the scope of easy money’s impact on the financial sector.

 

“Bank’s interest margins are being hammered. Money-market funds are trying to squeeze out a return. This is the kind of stuff, to be honest, sitting at the table, we did not foresee at the FOMC,” he said, referring to the Federal Open Market Committee.

Why didn’t the Fed ever do what Greenspan suggested in 2003? The answer is a combination of hubris and institutional/ideological inflexibility. On the first part, June 2003 represented the tail end of both the lingering recessiveness of the dot-com recession and dot-com bust – to which the Fed, as they always do, assigned their own actions as the ultimate saving grace. In other words, they believed that they had protected the world from a worse fate when there is and was every reason to suspect (starting with the already raging housing bubble and “global savings glut”) otherwise. As they saw it, they knew all they needed to know since they had already proven to themselves the monetary genius capable of such precision navigation.

Ideologically, they were never going to undertake a full investigation anyway. It was only two years after that they shut down completely M3 and all official reference to the monetary pieces that actually mattered. Greenspan “got us out of the dot-com’s” using just the federal funds target, so why bother with eurodollars, credit default swaps and repo collateral chains? The waving of the target wand was all they thought would be necessary “next time” while figuring themselves so good there would never be a next time (let alone something far, far worse). Bernanke’s performance in public starting at the housing bust (“subprime is contained”; “worst is behind us”; etc.) was this characteristic put into action.

Because of that intentional, self-limiting blindness the FOMC when confronted in 2007 with nothing they were familiar with did exactly as Greenspan admonished in advance. The FOMC especially under the staunchly unmovable Bernanke was left just making it up as they went (and failing time and time and time again). By the end of 2008, sifting through all the wreckage, what did they do? They followed Japan even though in June 2003 they had once declared everything that was supposedly wrong with Japanese QE.

One lesson that I drew from Japan was that not only did the Japanese get down to zero on the interest rate and not only did they try each new policy and say they were going to take it back, they didn’t give any sense of where they were going. They were lurching from one policy to the next, each time saying that they didn’t think it would work. So I do believe it’s important that we decide before we get to the point where such policies need to be triggered—and I’ll come to that issue next—at least on a very rough sequence of what we will do and how we will talk to the public about it. We don’t need to be very specific; but before we begin to use nontraditional techniques, I think we need to talk about them publicly and create a sense of continuity and confidence in our policymaking, which I believe was absent in Japan.

That was Federal Reserve Board Governor Donald Kohn’s view and despite being adamant about it in 2003 it describes very well Ben Bernanke’s Fed in 2008 (or 2010; or 2012) initiating their “nontraditional techniques.” What the Fed failed to realize in 2003, and even 2007, was that failing to forestall full-blown (interbank) panic removes any possibility of “a sense of continuity and confidence” in any policymaking.

Because they were so unprepared for 2008, we have been doomed to follow Japan, a growing possibility that another Fed President and current FOMC member brings up recently:

Indeed, Mr. Bullard has fretted for years that the United States and other major economies may be stuck with low interest rates for some time to come. In an interview last week, Mr. Bullard said he wants to raise rates. He really does. It just seems as if the necessary conditions keep slipping away.

After pushing to raise rates at the beginning of the year, he voted against a rate increase in April and he said he’s still thinking about June. “If you talk to people in Tokyo, they say, ‘Well, we’ve been through this and tried all these things and you guys are just following us,'” he said in the interview. “I hope that’s not exactly true.” [emphasis added]

It is true and it is something that the Fed unbelievably contemplated almost thirteen years ago, vowing if they ever had to it would be different. So much for that. Wallowing in their own monetary ignorance, instead these “best and brightest” removed all inquisitiveness, leaving for themselves only greater constraint so that long after it was too late their only option was to follow Japan into what they already knew didn’t work. Worse, they did so in exactly the same way as the Bank of Japan they openly criticized in 2003:

Another problem in Japan was that the authorities were overly optimistic about the economy. They kept saying things were getting better, but they didn’t. To me that underlines the importance of our public discussion of where we think the economy is going and what our policy intentions are.

Governor Kohn was apparently unable to imagine how non-Japanese central bankers might also possess (if not only possess) great ability to undermine themselves and their assumed power; especially in situations where they should not be so sure what power they might actually possess in the first place, essentially the central point of this discussion in June 2003. Alan Greenspan’s warning at that meeting could easily be distilled as “make sure you can actually do what you say you can do before you actually have to do it.”  Unfortunately, that would require honest assessment, which is something the Fed has demonstrated itself (over and over) never quite capable of producing. Instead, Kohn’s words might very well have been repeated by some other central banker in some other global hotspot criticizing Janet Yellen in 2014, 2015 and still in 2016. Apparently it was better to fail as the Bank of Japan failed then to do something with an actual chance of success – like let markets clear out imbalances while undertaking honest understanding of the actual run of banking and global money (and now its material deconstruction). It’s not like there hasn’t been ample time for this, inching closer every FOMC meeting toward a full lost decade despite that institution years before its start essentially warning itself not to do what it has done.

To date there have been no repercussions for any of this. They really don’t know what they are doing and these people will not stop no matter how far they sink us and how absurd they act in doing so. It reminds us once more why the recovery is now only political.

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It’s turning out to be a bad week for Facebook. As we reported earlier, it was learned that Facebook’s news feed routinely suppressed conservative news. Now, Recode is reporting that Facebook training documents given to its editors have leaked, and they reveal that editors select trending news topics from just ten editors, only one of which could be considered right-wing.

From Recode

A report published in the Guardian today includes a training document for Facebook editors that outlines how they should curate the “trending” headlines tool. 

 

Instructions in the documents appear to contradict Facebook’s earlier denials of a Gizmodo article that said Facebook editors directly inserted headlines into the trending news widget. It also contradicts what Facebook told Recode last summer. 

 

The guidelines obtained by the Guardian additionally show that editors must select trending news topics from a list of 10 “trusted” news sources that include the New York Times, BBC News, CNN and Fox News. This is likely to make people who are upset about alleged anti-conservative bias that Gizmodo reported on even madder; Fox News looks like the only right-wing outlet on the list. 

 

In turn, Facebook provided the Guardian with a much longer list of approved publications that includes conservative websites like the Daily Caller and the Drudge Report. The Guardian notes that the former Facebook editors it spoke to disagreed with the allegations of anti-conservative leanings at Facebook. 

 

In a response to the Guardian from Facebook VP of global operations Justin Osofsky, the company did not appear to contest the charge that its editors choose which headlines to use in the trending section. 

 

Representatives for Facebook could not immediately be reached for comment.

Now would be a good time for the company to simply admit to its shady practices, and implement a correction before things continue to deteriorate for darling of social media.

* * *

Full leaked document below…

Facebook in the Story Curation Guidelines by zerohedge

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Submitted by Mish Shedlock of MishTalk

 

Healthcare insurers are already taking it on the chin. Some insurers got out of the healthcare business entirely, others stopped coverage in multiple states due to mounting losses.

What happened is healthy individuals, especially millennials decided to opt out of Obamacare. Those who opted in after having been denied coverage previously were high-cost individuals.

Adding fat to the fire, a federal court ruled today that “cost sharing reductions”  to insurers are unconstitutional payments.

Please consider Judge Rules for House GOP in ObamaCare Suit.

In a major ruling, Judge Rosemary Collyer, an appointee of President George W. Bush, said the administration does not have the power to spend money on “cost sharing reduction” payments to insurers without an appropriation from Congress.

 

Collyer stayed her ruling so the administration can appeal the decision.

 

At issue are billions of dollars in “cost sharing reduction payments” under ObamaCare which are paid to insurance companies so they can reduce out of pocket costs such as deductibles for low income people on ObamaCare plans.

 

The House GOP argued that the administration was unconstitutionally spending money on these payments without an appropriation from Congress.

 

The administration argued it did not need an appropriation from Congress because the funds were already permanently appropriated by ObamaCare in the same section as the law’s better known tax credits that help people afford coverage.

 

However, Collyer ruled that the section only appropriated funds for tax credits, and said the cost sharing reductions require a separate congressional appropriation, which the administration does not currently have.

 

“Such an appropriation cannot be inferred,” Collyer wrote. “None of Secretaries’ extra-textual arguments — whether based on economics, ‘unintended’ results, or legislative history — is persuasive. The Court will enter judgment in favor of the House of Representatives and enjoin the use of unappropriated monies to fund reimbursements due to insurers under Section 1402.”

Judge Rosemary Mayers Collyer

Judge Rosemary Mayers Collyer (born November 19, 1945) is a United States District Judge for the United States District Court for the District of Columbia, and a member of the United States Foreign Intelligence Surveillance Court.

On August 1, 2002, Collyer was nominated by President George W. Bush to a seat on the United States District Court for the District of Columbia vacated by Thomas Penfield Jackson. Collyer was confirmed by the United States Senate on November 14, 2002, and received commission on November 15, 2002. She has announced that she will take senior status on May 18, 2016.

Senior status equates to semi-retirement. Last October, Collyer Refused to Let House ObamaCare Suit Move to Another Court.

 

Court Case

Collyer’s ruling seems to make sense. However, this case is surely headed to higher courts.

I do not pretend to know how those courts will rule.

 

Potential End of Obamacare

Many lawsuits were filed against Obamacare, some of them outright frivolous. This once could potentially stick.

Should the case go the the Supreme Court, it is conceivable a ruling might depend on who wins the presidential election this November.

Meanwhile there are going to be lots of skittish insurers with serious concerns. Already, many insurers are bleeding cash and dumping Obamacare.

This could mean the end of Obamacare, at least as we know it.

via http://ift.tt/1rIjivS Tyler Durden

 

There are many fine benefits of camping out.  You might try it this weekend.  The month of May is certainly a fine time to camp in much of the Northern Hemisphere.  It is so easy even a caveman could do it.

What follows are some modest suggestions.

When I say camping out, I mean under a blanket, or maybe in a sleeping bag, on the ground, maybe with a pad, definitely not in a trailer, not in an RV, and not even in a tent.  If it rains, pull out a tarp, or at most a bivey sack.

Find a place that allows open fires and is away from the road, parking lot, and crowds.  Even the shortest of hikes will often dramatically reduce the number of other campers.

Leave the cell phone, internet, and the rest of the world behind.

Bring along a kid, or several.

My God, just look at the stars!

Stare at the campfire.  Poke it with a stick.  Watch the embers float into the night sky.  Think about your ancestors.

Allow your body and mind to experience the cold, hot, wet, hard, dirty world that we are all designed to live in.

Drink some cold water from a stream.  Filter, boil, or treat it if you must.

Cook meals over a fire, not on a stove.  Use your knife to sharpen a willow branch then cook something on it, like a bratwurst that you put in your pack when it was still frozen.  Bake a foil-wrapped potato in the hot coals.  Start the fire in the morning and make coffee or tea.

Take a shit in the woods, and wipe your ass with some leaves.

Take a bath or swim in a river or lake.

Make love in the tall grass, or on the sand.

Take a nap in the sunshine.

What could possibly be better?

Peace!

via http://ift.tt/1ZJYSO1 hedgeless_horseman