Bernie Sanders Criticizes Lawsuits That Blame Gun Makers for Murder

During last night’s Democratic presidential debate in Flint, Michigan, Hillary Clinton once again criticized Bernie Sanders for supporting the Protection of Lawful Commerce in Arms Act, a 2005 law that she falsely claimed gave gun manufacturers and dealers “absolute immunity” against lawsuits. Clinton, who as a senator voted against that law, has brought up Sanders’ vote for it during six out of seven debates so far, misrepresenting what the law says almost every time. Sanders has responded defensively, saying he would take another look at the law to see if it can be improved. But last night he made it clear that he supports the basic principle embodied in the law, which is that manufacturers and dealers generally should not be held responsible for criminal misuse of the guns they supply.

Moderator Anderson Cooper asked Sanders about a lawsuit against the manufacturer, distributor, and retailer of the rifle used in the 2012 massacre at Sandy Hook Elementary School in Newtown, Connecticut. Here is Sanders’ reply:

If you go to a gun store and you legally purchase a gun, and then, three days later, if you go out and start killing people, is the point of this lawsuit to hold the gun shop owner or the manufacturer of that gun liable?

If that is the point, I have to tell you I disagree. I disagree because you hold people—in terms of this liability thing, where you hold manufacturers’ [liable] is if they understand that they’re selling guns into an area that—it’s getting into the hands of criminals, of course they should be held liable.

But if they are selling a product to a person who buys it legally, what you’re really talking about is ending gun manufacturing in America. I don’t agree with that….

As I understand it…what people are saying is that if somebody who is crazy or a criminal or a horrible person goes around shooting people, the manufacturer of that gun should be held liable….

If that is the case, then essentially your position is there should not be any guns in America, period.

That is basically what the plaintiffs in the Newtown massacre lawsuit are saying, but they dress up their argument in terms designed to get around the limits imposed by the Protection of Lawful Commerce in Arms Act. That law bans lawsuits based on “the harm solely caused by the criminal or unlawful misuse of firearm products or ammunition products by others when the product functioned as designed and intended.” But it allows tort claims based on “negligent entrustment”—i.e., “the supplying of [firearms] by a seller for use by another person when the seller knows, or reasonably should know, the person to whom the product is supplied is likely to, and does, use the product in a manner involving unreasonable risk of physical injury to the person or others.” The Newtown plaintiffs, who include the families of nine people murdered at Sandy Hook, plus a survivor of the massacre, maintain that the defendants are guilty of negligent entrustment because they made a gun with no legitimate civilian uses available to the general public.

That argument is implausible, to say the least, since AR-15-style guns like the one used in Newtown are very popular and plainly do have legitimate civilian uses. Yet Sanders, who favors a federal ban on so-called assault weapons, seems to believe otherwise. Last night he said, “I don’t think it’s a great idea in this country to be selling military-style assault weapons which are designed to kill people.” That does not necessarily mean Sanders would support this lawsuit, since the gun at the center of it was legal at the time even in Connecticut. The plaintiffs are trying to stretch negligent entrustment to cover entirely lawful actions by a large segment of the gun industry. Even Dennis Henigan, former director of the Legal Action Project at the Brady Center to Prevent Gun Violence, concedes they are unlikely to succeed. 

That does not mean the lawsuits allowed by the Protection of Lawful Commerce in Arms Act, which can be based on product defects or illegal actions as well as negligent entrustment, are doomed to fail. Last fall a Wisconsin jury awarded $5.1 million in damages to two police officers who were gravely injured by a handgun that Badger Arms, a store near Milwaukee, sold to a straw buyer. The jurors concluded that the store clerk who sold the gun ignored obvious clues that the ostensible buyer was not the real buyer, who was 18 and therefore not legally permitted to purchase a pistol from a federally licensed dealer. The jurors faulted the store’s owners for failing to properly train their employees. 

As that example shows, it is still possible to hold gun makers and dealers liable for negligence. Clinton wants to do more than that, arguing that litigation can “force gun makers to do more to make guns safer.” She is referring to “smart guns” that are more expensive, harder to use, and less reliable than standard firearms. The only way litigation would encourage the sale of such guns is by making manufacturers liable for producing the firearms their customers actually want. When such lawsuits were filed “in the late ’90s and in the early 2000s,” Clinton said last night, “the NRA saw this happening, and they said, ‘We’ve got to stop it. Last thing in the world we want is to have guns that you can only shoot with your fingerprint, or to have guns with such strong safety locks on them that they may not be sellable.'” But as far as Clinton is concerned, unsellable guns would be a victory.

I remain unconvinced that the law Clinton faults Sanders for supporting was necessary or appropriate. There is a credible argument that Congress acted to protect Second Amendment rights against litigation that ultimately could have made them difficult or impossible to exercise. That is the argument to which Sanders alluded when he said lawsuits blaming gun makers for gun crimes, if successful, could mean “ending gun manufacturing in America.” In 2005, however, that threat remained distant and theoretical, since the lawsuits had been almost uniformly unsuccessful and had prompted legislative responses at the state level. Furthermore, there were legitimate constitutional concerns about interfering with state tort law. But no matter which side you took in that debate, Clinton is clearly wrong to suggest that the Protection of Lawful Commerce in Arms Act gave the gun industry complete immunity against lawsuits, and Sanders is clearly right that manufacturers, distributors, and dealers should not be held liable for crimes committed with their products unless they deliberately or negligently foster those crimes.

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Chinese Reserves Drop To Fresh Four Year Low After February’s $29BN Decline

After three consecutive declines in China’s Foreign Reserves in the November-January period, which averaged nearly $100 billion per month (with particular attention paid to last month’s number), consensus expectations were for a moderation in reserve outflows in February to approximately $40 billion in February; moments ago the PBOC reported, that as expected, reserve outflow “slowed down” to just $28.6 billion, bringing China’s total foreign reserves to $3.2 trillion, the lowest level since early 2012.

 

With the February drop, Chinese total reserves are back to levels last seen in early 2012.

 

One factor for the slowdown in Chinese capital outflows may be the relative stability of the Chinese currency, which after suffering a substantial devaluation at the end of 2015 and early 2016, has since stabilized to levels during the start of year fixing. As Nathan Chow, a Hong Kong-based economist at DBS Group Holdings Ltd., told Bloomberg “financial markets were more stable last month compared with January and the sentiment toward the yuan has improved. Capital outflows may slow down in the second half of this year if economic fundamentals improve.”

Policy makers have been burning through their stockpile to help stabilize the currency, a key goal for China’s leaders, who are gathered this week for their annual policy meeting in Beijing. The nation’s defense of the yuan depleted its foreign reserves by $513 billion last year, while Bloomberg Intelligence estimates that a record $1 trillion of money moved overseas in 2015.

According to one theory proposed by the BIS, “persistent capital outflows from China since mid-2014 were probably driven more by local companies paying down dollar-denominated debt — in anticipation of a stronger U.S. currency — than investors ditching assets.” Those same BIS experts have probably never had the please of bidding for an abandoned house in Vancouver for $7 million, a local housing bubble which is precisely a function of local investors taking their money offshore in a panic.

Finally, recall that just two weeks ago China stopped reporting the “position for forex purchase” a series which tracked total foreign exchange purchases by both the central bank and other financial institutions. Many – us included – saw this as a premeditated attempt to confuse market watchers and prevent the full picture of Chinese outflow data from emerging. As such one will surely take the PBOC’s reserve data with an excess capacity-producing mine of salt.

In other news, China reported that the value of its gold reserves jumped to $71 billion from $63.6 billion a month ago, with the actual inventory of reported gold rising from 57.18 million in January to 57.5 million as of last month.


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Shorts Pulverized As Iron Ore Soars 19% After Goldman Says “Bearish Case Intact”

Goldman does it again.

Just hours after the central banker-spawning investment bank issued a report in which it said the iron ore rally is likely to be short lived “in the absence of a material increase in Chinese steel demand, and steel raw materials will once again drive steel prices rather than the other way around”, overnight Iron Ore futures traded on the Singapore SGX exploded as much as 19% higher to $58.95 in one session.

 As seen in the chart below, the one day squeeze has been the most violent in years in trading. It probably goes without saying that with the market suddenly offerless, there has been virtually no actual volume as bids scramble to catch whatever asks they can find, in the process crushing whoever was short the commodity and unleashing countless margin calls.

 

The euphoria was also matched on China’s Dalian Commodity Exchange where Iron Ore soared limit up to $62.47/mt – the highest in six months.

 

On Monday, steel in China also rose by the daily limit, with steel reinforcement bar for May up 5 percent to 2,073 yuan a ton on the Shanghai Futures Exchange, and hot-rolled coil climbing the same amount to 2,256 yuan a ton.

The catalyst for the move was confusing: on one hand Chinese policy makers signaled their willingness to buttress growth in the ongoing People’s Congress, while on the other authorities reiterated pledges to cut excess industrial capacity, including in steel, and implement reforms, in what are clearly contradictory promises. It is clear on which side of the this “contradiction”  the market stands, if only for now.

As Bloomberg notes, iron ore has advanced in 2016, countering expectations it would see
further losses on mounting low-cost supply from Australia and Brazil and
weakening demand for steel in China, which accounts for about half of
global output. At the annual National People’s Congress at the weekend,
authorities said they’d allow a record high deficit and higher
money-supply target to support growth of 6.5 percent to 7 percent. The
nation will also subsidize cuts to excess capacity in industries such as
steel.

All of this means that China is back to its old, broken model which led China to the edge of the hard landing from which it is desperately trying to pull itself up from, and it will do so by unleashing all the same policies and debt-binge that put it here in the first place.  That should also answer questions about just how sustainable this rally truly is, apart from the technicals where the shorts have gotten pulverized.

Meanwhile, however, stocks are loving it with miners’ shares such as Australia’s Fortescue Metals rocketing higher by 24 percent. Steelmakers’ shares rose in China on Monday, with Baoshan Iron & Steel Co. up as much as 9.7 percent in Shanghai. Angang Steel Co. gained as much as 5.2 percent in Hong Kong, while Maanshan Iron & Steel rose 6.5 percent. In Australia, Rio — which said last week it expected the global supply of seaborne ore to outpace demand growth in the near term — gained 3.5 percent to the highest since December. BHP Billiton Ltd., which has forecast the raw material will probably extend declines to find a level well below $50, was up 5 percent.

Iron ore’s upswing this year has accompanied a revival in other commodities including oil and base metals such as copper. State efforts to cushion the loss of steel capacity in China, including helping retrenched staff, may help to improve the profit margins at mills that remain by reducing competition.

* * *

So to all those who listened to Goldman which just yesterday said the “Bearish case remains intact”, and pressed their shorts: our condolences.

This is what else Goldman’s Christian Lelong and Amber Cai said overnight.

Market roundup

Iron ore rallied 9% wow to US$53.50/t, a pace that flat and long steel prices failed to match with 5% and 2% wow increases respectively. On the demand side, the Chinese government announced a gradual deceleration in the economy and a modest increase in the fiscal deficit for 2016. Meanwhile, a recent tax cut on transactions should support property sales. On the supply side, up to half a million steel workers may be reallocated to other sectors in an effort to reduce overcapacity in the steel industry. Metallurgical coal also participated in the rally, rising 3% wow to US$79/t at a time when negotiations for the next quarterly benchmark prices are due to start. In spite of this relatively modest bounce in the seaborne market, 7.8Mtpa of production capacity has been flagged for closure since the start of the year. The US$420m proposed sale of the Buchanan mine in the US would indicate that premium assets are finally being offered after four years of price declines.

* * *

Spot iron ore prices have rebounded strongly from their recent low in mid-December. The contrast between a 24% ytd price rally and the previous period of mine closures and production cuts raises the following questions:

Q1: What has been driving this rally?

Steel prices should reflect the cost of raw materials and the level of industry profitability but the causal relationship between the two commodities can sometimes be reversed. In our view, steel prices have rallied because the market was in deficit and better margins were required to increase production ahead of the peak demand season. This mean reversion in steel margins happened to coincide with an unexpected increase in Chinese total social financing (TSF) for the month of January that fueled expectations of higher construction activity for 2016.

Q2: How is this rally likely to evolve?

The profitability of steel mills is the key indicator to watch, in our view. Higher steel prices encourage idled blast furnaces to incur start-up costs and resume production, but this window of profitability is currently at risk because of rapidly rising iron ore prices and a persistent mismatch between steel-making capacity and Chinese demand.

Q3: Why are we still bearish on iron ore?

We expect the current rally to be short-lived in the absence of a material increase in Chinese steel demand, and steel raw materials will once again drive steel prices rather than the other way around. The price signal to shut down marginal supply ex-China has been turned off temporarily but seaborne demand has essentially peaked and the stream of announced production cuts is bound to resume in the months ahead.

* * *

We have no doubt that Goldman will be right… in the months ahead. In the overnight session, we can’t help but feel sorry for anyone who decided to trade on Goldman’s reco and short ahead of today’s move.


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Paul Craig Roberts: Murder Is Washington’s Foreign Policy

Authored by Paul Craig Roberts,

Washington has a long history of massacring people, for example, the destruction of the Plains Indians by the Union war criminals Sherman and Sheridan and the atomic bombs dropped on Japanese civilian populations, but Washington has progressed from periodic massacres to fulltime massacring. From the Clinton regime forward, massacre of civilians has become a defining characteristic of the United States of America.

Washington is responsible for the destruction of Yugoslavia and Serbia, Afghanistan, Iraq, Libya, Somalia, and part of Syria. Washington has enabled Saudi Arabia’s attack on Yemen, Ukraine’s attack on its former Russian provinces, and Israel’s destruction of Palestine and the Palestinian people.

The American state’s murderous rampage through the Middle East and North Africa was enabled by the Europeans who provided diplomatic and military cover for Washington’s crimes. Today the Europeans are suffering the consequences as they are over-run by millions of refugees from Washington’s wars. The German women who are raped by the refugees can blame their chancellor, a Washington puppet, for enabling the carnage from which refugees flee to Europe.

In the article below Mattea Kramer points out that Washington has added to its crimes the mass murder of civilians with drones and missile strikes on weddings, funerals, children’s soccer games, medical centers and people’s homes. Nothing can better illustrate the absence of moral integrity and moral conscience of the American state and the population that tolerates it than the cavalier disregard of the thousands of murdered innocents as “collateral damage.” 

If there is any outcry from Washington’s European, Canadian, Australian, and Japanese vassals, it is too muted to be heard in the US.

As Kramer points out, American presidential hopefuls are competing on the basis of who will commit the worst war crimes. A leading candidate has endorsed torture, despite its prohibition under US and international law. The candidate proclaims that “torture works” — as if that is a justification — despite the fact that experts know that it does not work. Almost everyone being tortured will say anything in order to stop the torture. Most of those tortured in the “war on terror” have proven to have been innocents. They don’t know the answers to the questions even if they were prepared to give truthful answers. Aleksandr Solzhenitsyn relates that Soviet dissidents likely to be picked up and tortured by the Soviet secret police would memorize names on gravestones in order to comply with demands for the names of their accomplices. In this way, torture victims could comply with demands without endangering innocents.

Washington’s use of invasion, bombings, and murder by drone as its principle weapon against terrorists is mindless. It shows a government devoid of all intelligence, focused on killing alone. Even a fool understands that violence creates terrorists. Washington hasn’t even the intelligence of fools.

The American state now subjects US citizens to execution without due process of law despite the strict prohibition by the US Constitution. Washington’s lawlessness toward others now extends to the American people themselves.

The only possible conclusion is that under Clinton, George W. Bush, and Obama the US government has become an unaccountable, lawless, criminal organization and is a danger to the entire world and its own citizens.


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Sanders and Clinton Say Bigger Government Is the Answer to Flint’s Water Crisis

SandersHillary Clinton and Bernie Sanders both sharply criticized state and local government officials for mismanaging Flint’s water supply while sneering at the idea that privatization could possibly be the answer. 

In doing so, the Democratic presidential contenders did a disservice to the people of Flint who hosted the candidates for yet another debate on Sunday night. 

Clinton and Sanders both called on Michigan’s Republican Gov. Rick Snyder to resign for his role in the crisis. 

“The governor should resign or be recalled,” said Clinton. “We should support the efforts of citizens attempting to achieve that.” 

Clinton said the her election to the presidency would usher in an era of greater government transparency, accountability, and regulation that would prevent something like the Flint water crisis from happening again. She also called on the federal government to send aid to Flint, even though the state could raise sufficient funds if it ended some of its more costly—and pointless—PR stunt campaigns. 

Sanders, too, was critical of government’s failures with respect to Flint. “You are paying three ]times more for poisoned water than I am paying for clean water,” said Sanders. 

Their criticisms of government were spot-on: Flint’s water crisis, in fact, is the result of foolish government-planned economic stimulus, compounded by pure mismanagement and bad incentives. And when push came to shove, the state put its own bureaucrats’ needs well before the needs of its citizens. 

But when debate host Anderson Cooper suggested that Flint’s situation might be an indictment of government planning—and implied that the private sector could do better—Sanders mocked him. 

“Maybe we should let Wall Street run Flint,” Sanders suggested, oozing sarcasm. “We can trust them, I’m sure.” 

Sanders added: “I will trust the people to create a government that works for them, rather than Wall Street or corporate America.” 

These remarks show the extreme limitations of his corporations-are-always-evil shtick. Corporations did not poison Flint, but they are making millions of bottles of water available to its people. Corporations were not responsible for providing water to Flint—though they provide water to countless other municipalities, most of which happily renew their contracts year after year. Corporations did not poison Flint, but if they had, they would have been sued. They could have been forced to make Flint whole again. 

Sanders, and to a lesser extent Clinton, are so committed to a left-wing view of how resources should be allocated and managed that they can’t even comprehend the idea that some force other than government might be better equipped to provide a service. Sanders finds the very idea deserving of mockery. 

This is a tremendous failure of imagination on their parts, and betrays their reflexive hostility toward the idea that free people are capable of resolving each other’s problems—to mutual benefit—when government gets out of the way. My colleague Shikha Dalmia has suggested that the best thing for the people of Flint might be allowing private interest to buy them out of their property and evacuate them to greener pastures. But it sure sounds like Clinton and Sanders won’t appreciate that solution, since it doesn’t require vigorous action from the state. 

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The Divided States Of An Armed America

Few issues spilt America as conclusively as the Second Amendment to the US Constitution, which protects the right of the people to keep and bear arms.

In July 2015, 50% of Americans said it is important to control gun ownership, and 47% said it is more important to protect the right of Americans to own guns (Pew).

Source: BofAML

The map above shows the divide in public opinion on expanding gun control, favored greatly by the metropolitan coasts, opposed with determination by the rural middle.


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John Perkins: The Shadow World Of The Economic Hitman

Submitted by Adam Taggart via PeakProsperity.com,

If you're hoping to have a 'feel good' day today, we're about to owe you an apology.

John Perkins, author of The New Confessions of an Economic Hit Man, is someone we've been trying to get on the program for some time. He tells a dark story of an elite cabal working in the shadows to subjugate governments as it pursues ever-greater control of the planet's resources.

What's most frightening about this story is how credible it is. Anybody paying attention to world developments will have a hard time dismissing Perkins' claims out-of-hand; and a harder time not being sickened at how on the mark his claims may likely prove to be:

Economic hitmen – I'm a former one, actually – created the world's first truly global empire. It's really a corporate empire, not an American empire although the U.S. government certainly supports it.

 

We work many different ways, but perhaps the most common is that we will identify a country that has resources that corporations want, like oil. We arrange huge loans of that country from the World Bank or one of its sisters. Yet, the money never actually goes to the country. It is primarily there to make the our companies — that build the infrastructure projects like the power plants, and the industrial parks, highways, and ports — very rich.

In addition, a few wealthy families make a lot of money off of these programs. They own the industries and commercial centers.

 

But the majority of the people do not benefit at all. They do not have enough money to buy much electricity. They cannot get jobs in industrial parks because the industrial parks do not hire many people. They lose out because a lot of money is diverted from healthcare, education, and other social services to try to pay the interest on the debt.

 

In the end, the principal is never paid down. We go back and say Since you cannot pay your debts, sell your resource real cheap to our corporations without any environmental restrictions or social regulations. Or privatize, and sell off your electric utilities;,your water and sewage systems, and your schools, your jails — all of your public sector businesses — to our corporations.

 

These leaders are very aware that if they do not accept these deals; if we economic hitmen fail to bring them around, the jackals are likely to show up. These are people that will either assassinate those leaders or overthrow their governments. 

Click the play button below to listen to Chris' interview with John Perkins (41m:54s)


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“We’re In The Eye Of The Storm” Rothschild Fears “Daunting Litany” Of Problems Ahead

As central bank policy-makers' forecasts have become more pessimistic (i.e. more realistic), Lord Rothschild is unsurprised at the current malaise: "not surprisingly, market conditions have deteriorated further…So much so that the wind is certainly not behind us; indeed we may well be in the eye of a storm." On this basis, Rothschild highlights a "daunting litany of problems," warning those who are optimistically sanguine about the US economy that "2016 is likely to turn out to be more difficult than the second half of 2015."

Lord Rothschild Letter to Investors (via RIT Capital):

In my half-yearly statement I sounded a note of caution, ending up by writing that “the climate is one where the wind may well not be behind us”; indeed we became increasingly concerned about global equity markets during the last quarter of 2015, reducing our exposure to equities as the economic outlook darkened and many companies reported disappointing earnings. Meanwhile central banks’ policy makers became more pessimistic in their economic forecasts for, despite unprecedented monetary stimulus, growth remained anaemic.

 

Not surprisingly, market conditions have deteriorated further. So much so that the wind is certainly not behind us; indeed we may well be in the eye of a storm.

 

The litany of problems which confronts investors is daunting:

  • The QE tap is in the course of being turned off and in any event its impact in stimulating asset prices is coming to an end.
  • There’s the slowing down to an unknown extent in China.
  • The situation in the Middle East is likely to be unresolvable at least for some time ahead.
  • Progress of the US and European economies is disappointing.
  • The Greek situation remains fraught with the country now having to cope with the challenge of unprecedented immigration.
  • Over the last few years we have witnessed an explosion in debt, much of it repayable in revalued dollars by emerging market countries at the time of a collapse in commodity prices. Countries like Brazil, Russia, Nigeria, Ukraine and Kazakhstan are, as a result, deeply troubled.
  • In the UK we have an unsettled political situation as we attempt to deal with the possibility of Brexit in the coming months.

The risks that confront investors are clearly considerable at a time when stock market valuations remain relatively high.

 

There are, however, some influential and thoughtful investment managers who remain sanguine about markets in 2016 on the grounds that the US economy is in decent shape – outside of manufacturing – while they feel that economic conditions may be improving. To them, the decline in these markets may have more to do with sentiment than substance. Others are less optimistic but feel that the odds remain against these potential difficulties materialising in a form which would undermine global equity markets. However our view is that 2016 is likely to turn out to be more difficult than the second half of 2015. Our policy will be towards a greater emphasis on seeking absolute returns. We will remain highly selective when considering public and private investment opportunities. Reflecting this policy, our quoted equity exposure has been reduced to 43% of net asset value.

 

There’s an old saying that in difficult times the return of capital takes precedence over the return on capital. Our principle will therefore be to exercise caution in all things in the current year, while remaining agile where opportunities present themselves. Problems have a habit of creating opportunities and I remain confident of our ability to identify and profit from them during 2016.

Perhaps Lord Rothschild is on to something…

Fundamentally…

Source: @DonDraperClone

Of course, even The Fed is forced to admit that recession probabilities are rising fast…  

 

And technically, we are indeed in the "eye of the storm"

 

However, we have seen this pattern on a bigger scale before… and it did not end well.

What happens next?

 

Eye of the Storm? Or Storm In A Teacup?


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