Tag: news

Stunning Footage Inside Brazil’s Fire-Gutted National Museum

It contained centuries-old priceless artifacts charting the history of an entire country and people. The National Museum of Brazil was established in 1818 under King John VI of Portugal and contained over 20 million exhibits and artifacts, but was consumed completely by a devastating fire on Sunday night after it closed for the day.

Now Brazilians are raging at their government’s failure to take simple preventative measures that could have saved the museum after its central building caught fire, quickly engulfing side buildings, which firefighters were helpless to do much about. There wasn’t even so much as a working fire suppression system, considered standard for most any national antiquities museum across the globe, according to local reports. 

Witnesses say that though security and other staff were evacuated in time, nothing of the museum’s priceless collection could be saved. 

“This is a tragic day for Brazil,” Brazilian President Michel Temer said in a statement the following day. “Two hundred years of work and research and knowledge are lost.”

And the director National History Museum told Globo TV that “this is a cultural tragedy.”

Meanwhile Reuters reported that the institution had suffered from years of neglect under numerous governments: “We never got anything from the federal government… We recently finalized an agreement with (state-run development bank) BNDES for a massive investment, so that we could finally restore the palace and, ironically, we had planned on a new fire prevention system,” said museum vice director Luiz Duarte.

Others also lashed out at the pattern of neglect which they say led to the fire. Luiz Fernando Dias Duarte, a deputy director, vexpressed “profound discouragement and immense anger” according to local reports, and accused Brazilian authorities of a “lack of attention”.

“We fought years ago, in different governments, to obtain resources to adequately preserve everything that was destroyed today,” Dias Duerte told journalists.

In recent years the museum had reportedly suffered from severe funding cuts. Many Brazilians took to social media in the immediate aftermath, calling out the hypocrisy of floating massive funds toward hosting the Rio 2016 Summer Olympics or building towering soccer stadiums, but all the while starving the national museum for funds. 

The main building of the museum, now utterly destroyed after in took firefighters some five hours to snuff out the fire, was once the residence of the Portuguese royal family. 

Per Axios, among the priceless items destroyed include the following:

  • One of the Americas’ oldest human fossils — the skull and bones of a 25-year-old “Luzia” who died around 11,500 years ago, according to National Geographic.
  • It also held the largest meteorite ever found in Brazil, bones of Brazilian dinosaurs as well as Latin America’s oldest collection of ancient Egyptian mummies and artifacts.
  • The museum housed one of the best collections of indigenous literature, Guardian journalist Jonathan Watts wrote on Twitter. Urutau Guajajara, a leader and researcher of indigenous right, told Watts, “This is the greatest loss of indigenous writing in Latin America… Our memory has been erased.”
  • There were also pre-Colombian, Incan treasures, according to the museum’s website, and extensive collections of ancient Greek and Roman artifacts.
  • Some items were brought to Brazil by the country’s founder and first ruler Dom Pedro I, according to the Guardian.

There’s yet to be an official reason given for the cause of the fire, but multiple reports suggest the museum’s structure and wiring had suffered from years of neglect and was in dire need of repairs. 

“Very little will be left,” preservation director Joao Carlos Nara told Agencia Brasil,according to CNN.

Judging from the new to emerge footage inside the museum showing the aftermath, it appears that all is indeed lost. 

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QAnon and Its Precursors

The War College podcast interviewed me last week about QAnon, the rather elaborate conspiracy theory in which Donald Trump and Robert Mueller are secretly working together to target a vast network of deep-state pedophiles. (There’s more to the story than that—much, much more—but that’s the gist of it.) We talked about similar conspiracy yarns of the past, the possibility that this one started as a prank, and the question of how many QAnon speculators actually believe what they’re saying and how many are just playing a sort of spontaneous Alternate Reality Game, among other angles on the subject. Even Pappy O’Daniel has a cameo.

Listen here:

Inevitable advertisement: To buy my book on the history of American conspiracy folklore, go here.

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A Second Look at a Controversial Study About Defensive Gun Use

In April, criminologist Gary Kleck reported that he had uncovered evidence supporting his contention that Americans use firearms in self defense times over 2 million a times a year. The survey he discovered had not been previously analyzed, but he reported that it matched what he found in the 1993 survey he conducted with Marc Gertz and published in 1995, known as the National Self-Defense Survey (NSDS).

His new report was based on surveys conducted by the Centers for Disease Control (CDC) in its Behavioral Risk Factor Surveillance System (BRFSS) survey in the years 1996-98. This finding was touted by many outlets—including Reason—as evidence in support of the utility of private gun ownership.

Shortly after that study was released, however, Robert VerBruggen of National Review (who has been of inestimable help in thinking through these issues) tweeted that he noticed, by studying the raw survey data himself, that Kleck had mistaken what were in fact surveys limited to small numbers of states per year for a national survey, analogous to Kleck/Gertz’s own national surveys.

in direct response to queries from Reason, who first directly notified Kleck of his error, he worked through and has since issued a revised version of the paper, published as was the original as a working paper on the Social Science Research Network. In the new version, Kleck re-analyzes the BRFSS survey data accurately as limited to a small number of states, and ultimately concludes that, when their surveys are analyzed in conjunction with his NSDS, that their surveys indicate that nationally there are likely over 1 million defensive uses of guns (DGUs) a year, compared to the over 2 million of his own NSDS.

Here’s how Kleck got to that new conclusion. The BRFSS, as Kleck describes it in his paper, “are high-quality telephone surveys of very large probability samples of U.S. adults…even just the subset of four to seven state surveys that asked about DGU in 1996-1998 interviewed 3,197-4,500 adults, depending on the year. This is more people than were asked about this topic in any other surveys, other than the National Self-Defense Survey conducted in 1993 by Kleck and Gertz (1995), who asked DGU questions of 4,977 people.” The BRFSS asked about defensive uses of guns in seven states in 1996, seven in 1997, and four in 1998.

Kleck judged the “wording of the DGU question in the BRFSS surveys” as “also excellent, avoiding many problems with the wording that afflicted the DGU questions used in other surveys.”

The BRFSS results were designed to exclude “uses by military, police and others with firearm-related jobs” and “uses against animals.” The survey was designed to garner “yes” answers as long as a gun was used in presumed self-defense in any location (not just the home), whether or not the gun was actually fired (as, per Kleck’s survey, around 3/4 of the time one needn’t fire the gun to have found it useful in deterring an intruder or attacker).

Since Kleck’s survey did not include Alaska and Hawaii and the BRFSS did (in 1996 and 1997 respectively), he kept them out of the comparison. The states for which a meaningful comparison could be made between his NSDS and this CDC survey, then, were, in 1996, Kentucky, Louisiana (also surveyed in 1998), Maryland, New Hampshire (also surveyed in 1997), New York, and West Virginia; in 1997, Colorado, Missouri, New Jersey (also surveyed in 1998), North Dakota, and Ohio; and in 1998, Montana and Pennsylvania.

Kleck notes that it’s simply impossible to extrapolate meaningfully from the small set of states surveyed over the course of those three years to a solid national DGU figure from the BRFSS itself: “We cannot directly apply these estimates to the U.S. because the sets of states do not constitute a probability sample of the U.S. The prevalence of DGU could be far higher in some states than in the nation as a whole if the states have higher-than-average rates of gun ownership and/or crime, or could be far lower if the set of states had lower gun ownership or crime rates.”

But he does think by comparing the national results from his NSDS to the results in the BRFSS-surveyed set of states in his NSDS you can make a tentative extrapolation (after adjusting for the fact that the BRFSS only asked the DGU question to households that had already said they had a gun, while his surveys “found that 21% of persons who reported a DGU had denied having a gun in their household at the time of the interview.”)

In the group of states (minus Alaska and Hawaii) that BRFSS surveyed over those three years, the BRFSS found raw numbers of 55 (1996), 29 (1997), and 33 (1998) DGUs.

After a series of adjustments and weightings described at length in the paper, Kleck concludes the BRFSS survey indicates that the percentage of adults in gun-owning households who experienced a DGU in the states they surveyed were 1.33 percent for 1996, 0.89 percent for 1997, and 1.04 percent for 1998.

Again, while a straight national extrapolation for the BRFSS data alone can’t be meaningfully done, Kleck tries, presuming that the ratio of the national DGU rate over the rate in the specific group of states that BRFSS happened to survey found in his NSDS should hold for the BRFSS as well, to make a national DGU rate guess from the BRFSS data. He ends up calculating national percentage rates for adults in gun-owning households nationally of 0.59 percent based on the 1996 states, 0.81 percent based on the 1997 states, and 1.82 percent based on the 1998 states.

After adjustments to get a guess for total adults, not just adults in gun-owning households, the range of total DGUs Kleck estimates for the nation with the above methods from the CDC’s state-level surveys range from a low of 620,648 for 1996 to 1.9 million in 1998, for an average over the years of 1.1 million.

In Kleck and Gertz’s NSDS, 10, 8, and 4 “weighted past year DGU cases” were found in the states BRFSS surveyed in the years 1996, ’97, and ’98 respectively. Given that very small number of actual pre-extrapolation DGUs Kleck found in the states that both he and the BRFSS covered in 1998, just four, making extrapolative adjustments based on them might seem to overstate his case.

As the adjustments work, for example, as spelled out for me initially by VerBruggen, had Kleck/Gertz found just two more DGUs in their surveys over the four 1998 states, the adjustments downward for the ratio of total U.S. DGUs over that group of states would be from 1.7 to 1.1, meaning that the national extrapolation for the BRFSS based on the NSDS would be a whole number around 600,000 DGUs lower. That seems a lot of weight to place on such a tiny initial count. (There is also the wrinkle, as drawn out by economist Alex Tabarrok when discussing Kleck’s first version of this paper, that with surveys regarding rare events, even a small number of liars, if the lies are distributed without any particular bias one way or the other, can very much overstate the phenomenon.)

A CDC representative, when asked about why no study using or publicizing the raw data on this DGU survey was ever issued, a matter Kleck speculates on quite a bit, wrote merely that “Data from the optional module data [asking the questions for those years’ BRFSS were optional to the states, which is why only a few did] were made available to the public to analyze via the BRFSS public use dataset online” which is where Kleck eventually found them, though CDC never otherwise drew any conclusions from them in any publication nor drew anyone’s attention to them.

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Kelly Says He Didn’t Call Trump “Idiot”, As White House Slams Woodward’s “Fabricated Stories”

One of the most provocative leaked passages in Bob Woordward’s new book “Fear”, was a quote allegedly from Trump’s Chief of Staff John Kelly, who reportedly called Trump an “idiot” adding that he had gone “off the rails” and that “I don’t know why any of us are here.”

White House Chief of Staff John F. Kelly frequently lost his temper and told colleagues that he thought the president was “unhinged,” Woodward writes. In one small group meeting, Kelly said of Trump: “He’s an idiot. It’s pointless to try to convince him of anything. He’s gone off the rails. We’re in Crazytown. I don’t even know why any of us are here. This is the worst job I’ve ever had.”

It didn’t take long for Kelly to deny any of this happened: “The idea I ever called the President an idiot is not true,” Kelly said in a statement distributed by the White House. “He always knows where I stand, and he and I both know this story is total BS.”

John Kelly’s full statement below:

“The idea I ever called the President an idiot is not true. As I stated back in May and still firmly stand behind: “I spend more time with the President than anyone else, and we have an incredibly candid and strong relationship. He always knows where I stand, and he and I both know this story is total BS. I’m committed to the President, his agenda, and our country. This is another pathetic attempt to smear people close to President Trump and distract from the administration’s many successes.”

Meanwhile, the White House also blasted Bob Woodward new book, calling it “nothing more than fabricated stories.”

The full White House statement:

“This book is nothing more than fabricated stories, many by former disgruntled employees, told to make the President look bad. While it is not always pretty, and rare that the press actually covers it, President Trump has broken through the bureaucratic process to deliver unprecedented successes for the American people.”

“Sometimes it is unconventional, but he always gets results. Democrats and their allies in the media understand the President’s policies are working and with success like this, no one can beat him in 2020 – not even close.”

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EPA Watchdog: Scott Pruitt’s 24/7, $3.5 Million Security Detail Was Unjustified

The 24/7 protection that Scott Pruitt received during his tenure running the Environmental Protection Agency (EPA) was unjustified, according to an EPA Office of Inspector General report released today.

A security detail gave Pruitt round-the-clock protection starting on his first day in February 2017. Former White House adviser Don Benton requested the extensive protection as a precautionary measure, citing possible threats against Pruitt.

That extra security came at a steep price. From the start of Pruitt’s tenure until the end of the 2017 calendar year, the EPA spent $3.5 million protecting the boss. For comparison’s sake, that’s more than double the $1.6 million incurred by the agency’s Protective Service Detail over the same period in 2016.

The fact that Pruitt’s security detail cost $3.5 million isn’t exactly news—the inspector general revealed that information in May. What is news, even if it’s completely unsurprising, is that the inspector general found no “documented justification” for the “increased costs,” which it deemed an “inefficient use of agency resources.”

The EPA likely wasted so much money protecting Pruitt because it has no idea how to assess threats. “We found that the [agency] has no final, approved standard operating procedures that address the level of protection required for the Administrator or how those services are to be provided,” the inspector general’s report says. “The failure to have effective and current standard operating procedures can result in the organization having unclear lines of authority, inconsistent practices, inappropriate or inadequate staffing, and excessive or unnecessary costs.”

It’s not even clear if the EPA has the legal authorization to protect its administrator. The Government Accountability Office has said that only the Secret Service and Department of State can protect Cabinet officials. But according to the EPA’s Office of Legal Counsel (OGC), the EPA can provide protection. The inspector general report “does not take any position on the merits of the OGC analysis.”

The report doesn’t make Pruitt look great, but that’s nothing new for the former administrator. Pruitt resigned in March following months of scandals—and not just his 24/7 security detail or his taxpayer-funded first-class air travel, which he also used security concerns to justify. Pruitt also faced investigations for renting a posh D.C. condo from a Washington lobbyist at a cost far below the market rate and installing a $43,000 soundproofed telephone booth in his office.

That last accusation in particular screams government waste. Pruitt said he needed the phone booth to conduct “confidential communications,” specifically with the White House. He ended up using it to call the White House exactly once.

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WTF Chart Of The Decade

Authored by Lance Roberts via RealInvestmentAdvice.com,

With the markets closed yesterday, there is little to update you on with respect to the technical backdrop from this weekend’s missive. However, this is a good opportunity to review the fundamentals as Q2-earnings season comes to a close.

Not surprisingly, the cuts to corporate tax rates in December led to a surge in quarterly earnings numbers. During the first two quarters of this year, 12-month operating earnings per share rose from $124.51 per share in Q4 of 2017 to $132.23 and $140.45 in Q1 and Q2 of 2018 respectively or more than 6% in each quarter. While operating earnings are widely discussed by analysts and the general media; there are many problems with the way in which these earnings are derived due to one-time charges, inclusion/exclusion of material events, and outright manipulation to “beat earnings.”

Therefore, from a historical valuation perspective, reported earnings are much more relevant in determining market over/undervaluation levels. There was good news found here as well with reported earnings also getting a tax-related surge. For the quarter, 12-month reported earnings per share rose from $109.88 in Q4 of 2017 to $115.44 and $122.47 in Q1 and Q2 of 2018 respectively. This also translated into roughly a 6% increase in both quarters. 

However, despite the improvement in reported earnings for the first quarter, the thing that jumped out was the decline in revenues per share which slumped from $329.59/share in Q4 to $320.39/share in Q1.

In other words, while top line SALES fell, bottom line revenue expanded as share buybacks and accounting gimmickry escalated for the quarter. The question is whether sales dramatically expanded in Q2? Given some of the recent economic data, we have our doubts and expect a smaller increase. (I will update this chart when S&P updates the sales/share figure for Q2) As shown in the chart below, the biggest support for earnings expansion in Q2 continues to be the dramatic decline in shares outstanding.

ZH: In three little word – WTF!

Of course, such should not be a surprise. Since the recessionary lows, much of the rise in “profitability” have come from a variety of cost-cutting measures and accounting gimmicks rather than actual increases in top-line revenue. While tax cuts certainly provided the capital for a surge in buybacks, revenue growth, which is directly connected to a consumption-based economy, has remained muted. Since 2009, the reported earnings per share of corporations has increased by a total of 353%. This is the sharpest post-recession rise in reported EPS in history. However, the increase in earnings did not come from a commensurate increase in revenue which has only grown by a marginal 44% during the same period and declined from 49% in Q1.

ZH: In three little word – WTF!

The reality is that stock buybacks create an illusion of profitability.  If a company earns $0.90 per share and has one million shares outstanding – reducing those shares to 900,000 will increase earnings per share to $1.00. No additional revenue was created, no more product was sold, it is simply accounting magic. Such activities do not spur economic growth or generate real wealth for shareholders. However, it does provide the basis for with which to keep Wall Street satisfied and stock option compensated executives happy.

Always Optimistic

But optimism is certainly one commodity that Wall Street always has in abundance. When it comes to earnings expectations, estimates are always higher regardless of the trends of economic data. The problem is that the difference between expectations and reality have been quite dramatic. 

Since the beginning of this year, forward expectations have already started falling as economic realities continue to impede overly optimistic projections. However, just since May, estimates for the end of 2018 have fallen by more than $10/share.

But it isn’t just this year where estimates are falling, but into 2019 as well. The chart below shows the changes in estimates a bit more clearly. It compares where estimates were on January 1st versus April, June and September 1st. Currently, optimism is exceedingly “optimistic” for the end of 2019.

The risk to current estimates going forward remain higher rates, tighter monetary accommodation, and trade wars. As I wrote recently, the estimated reported earnings for the S&P 500 have already started to be revised lower (so we can play the “beat the estimate game”) but an ongoing trade war could effectively wipe out the entire benefit of the tax cut bill. For the end of 2019, forward reported estimates have declined by roughly $9.00 per share.

Comparisons To Get Tougher

There is no argument that corporate profits have indeed jumped over the last two quarters. The good news is the bump in earnings have helped hold valuations in check. The chart below shows the surge in earnings due to the reduction in corporate taxes.

Notice the stock market rose (capital appreciation only) by over 40% while reported earnings growth rose by a whopping 2% through the end of 2017. However, in the last two quarters, earnings growth has surged by over 20%, but as noted above, that surge came without a commensurate surge in revenues.

The chart below expands that analysis to include four measures combined: Economic growth, Top-line Sales Growth, Reported Earnings, and Corporate Profits After Tax. Clearly, the stock market has grown substantially faster than all other measures. Since 2014, the economy has only grown by a little more than 10%, top-line revenues by just 9% but corporate profits after tax, and reported earnings, are up over 20%. All of that while asset prices have grown by 45% through Q2.

But looking forward, year over year comparisons are going to become markedly more troublesome even as expectations for the S&P 500 index continues to rise.

Furthermore, the deviation of earnings from the long-term growth trend are now at levels that have historically denoted reversions as well. Consequently, such reversions have not been kind to stock market investors either.

But despite the data, many on Wall Street are suggesting the recent string of “record highs” is all about improving fundamentals rather than short-term policy-related boosts.

To see if such is indeed the case, we can expand our data back to 1955. The chart below shows the real, inflation-adjusted, profits after-tax versus the cumulative change to the S&P 500. Here is the important point – when markets grow faster than profitability, which it can do for a while, eventually a reversion occurs. This is simply the case that all excesses must eventually be cleared before the next growth cycle can occur. Currently, we are once again trading a fairly substantial premium to corporate profit growth.

Since corporate profit growth is a function of economic growth longer term, we can also see how “expensive” the market is relative to corporate profit growth as a percentage of economic growth. Once again, we find that when the price to profits ratio is trading ABOVE the long-term linear trend, markets have struggled and ultimately experienced a more severe mean reverting event. With the price to profits ratio once again elevated above the long-term trend, there is little to suggest that markets haven’t already priced in a good bit of future economic and profits growth.

While none of this suggests the market will “crash” tomorrow, it is supportive of the idea that future returns will substantially weaker than in recent years.

Despite much hope that the current breakout of the markets is the beginning of a new longer-term advancing “bull” market – the economic and fundamental variables suggest otherwise. Also, as I noted last Friday, pay attention closely to the message that emerging markets are sending.

“My position is simply that the economic dependency of emerging markets on the U.S. is extremely high. Therefore, when the U.S. gets a ‘cold,’ emerging markets get the ‘flu.’ 

Over the last 25-years, this has remained a constant.”

“In 2000, 2007 and 2012, emerging markets warned of an impending recessionary drag in the U.S. (While 2012 wasn’t recognized as a recession, there were many economic similarities to one.)”

With analysts once again hoping for a continued surge in earnings in the months ahead, it is worth noting this has always been the case. Currently, there are few, if any, Wall Street analysts expecting a recession at any point in the future. Unfortunately, it is just a function of time until the recession occurs and earnings fall in tandem.

The deterioration in earnings is something worth watching closely. While earnings have improved in the recent quarter, due to the benefit of tax cuts, it is likely transient given the late stage of the current economic cycle, continued strength in the dollar and potentially weaker commodity prices in the future.

Wall Street is notorious for missing the major turning of the markets and leaving investors scrambling for the exits.

This time will likely be no different.

It is important to remember the bump in earnings growth will only last for one year at which point the analysis will return to more normalized year-over-year comparisons. While anything is certainly possible, the risk of disappointment is extremely high.

It certainly brings to mind Bob Farrell’s Rule #9 which states:

“When all experts agree – something else is bound to happen.”

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Pope Francis Calls for Global Regulations to Solve the Oceans’ Plastic Pollution Problem

Pope Francis is deeply concerned about the oceans filling with plastic—a problem he says only a higher power can fix. And by higher power I mean global governance.

On Saturday, in his annual message for the Church’s environmentally themed Day of Prayer for the Care of Creation, the leader of the Holy See called on humanity to be better stewards of the water. “Sadly, all too many efforts fail due to the lack of effective regulation and means of control, particularly with regard to the protection of marine areas beyond national confines,” he lamented. The faithful, he said, should pray for those “who contribute to the development and application of international regulations on the seas.”

With 8 million metric tons of plastic entering the world’s oceans every year, the Holy Father is not wrong to draw attention to marine plastic pollution. But neither his diagnosis of the problem nor his proposed solution seem divinely inspired.

While the ocean is a global commons, the plastic that enters it each year comes mostly from land-based sources that hardly lack government oversight and regulation. According to a 2017 study in Environmental Science & Technology, as much as a quarter of a year’s marine plastic pollution—nearly 2.75 million metric tons—makes its way into the oceans from just 10 rivers. As much as 1.5 million tons come from China’s Yangtze River alone.

A 2015 study found similarly that of the 8 million tons of plastic entering the ocean each year, the vast majority comes from poorer, populous, and coastal East Asian nations where most single-use plastic items wind up as litter, which then makes its way into the seas. The best solution, thus, is to improve these countries’ waste management systems, so that more plastic goes instead to the landfill, the incinerator, or the recycling center. Contrary to the papal message, this is something that national governments have every power and ability to address.

It’s true that a lot of the plastic that gets into the ocean comes from discarded nets, traps, and other fishing gear discarded in international waters. Some 46 percent of the Great Pacific Garbage Patch is said to be made up of the stuff. But here too, national governments are hardly powerless. They can and do regulate all aspects of their fishing industries, down to what kind of equipment can be used and how it is to be disposed of. Any global regulations would still need to be implemented by those same national governments that have already failed—through lack of political will, resources, or general competence—to handle their own plastic waste problems.

The best hope in this area isn’t coming for regulators, national or global, but from local, private actors. For example, the Philippine municipality of Quezon City, just outside the capitol Manilla, has managed to achieve a recycling rate of about 40 percent after privatizing its landfill operations and largely handing over waste collection to some 500 private recycling centers.

Other organizations, like the Vancouver-based Plastic Bank, pay people an above-market rate for plastic items, which are then recycled and resold to Western retailers who market them as socially responsible plastics. Plastic Bank, which has operations in Brazil, Haiti, and the Philippines, has collected some 8 million pounds of plastic since 2015.

These efforts are a work in progress, but they seem promising. Pope Francis should put a little more faith in them, and a little less in yet another top-down, global, government-led crusade.

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GM Sales Plunge 13% As August Passenger Car Sales Collapse

When GM surprised the market several months ago with its announcement that, unlike most other US automakers, it would stop disclosing monthly sales, some immediately saw through this as a thinly veiled confirmation that pain is coming. And nowhere was it more obvious than in the company’s August sales, which while undisclosed, predictably leaked, with Bloomberg reporting that in the last month, GM sales plunged 13% for the same reason most other automakers saw a sharp drop in July sales: a sharp pull back on sales incentives, especially for full-size pickups.

In addition to the biggest drop in years, GM’s total sales also missed analysts’ average estimate for a decline of 7.7%. Speaking to Bloomberg, company spokesman Jim Cain refused to comment on the sales drop, but he did confirm that GM dialed back discounts during the month.

The report extended the decline for GM shares, which dropped 1.3% to $35.58. The stock is now down 13% YTD.

Meanwhile, other OEMs also reported weak August results: with the exception of Ford Motor, all other major automakers also reported sales that trailed analysts’ estimates, as demand for passenger cars including the Honda Accord and Toyota Camry plunged.

Looking over the past month, Honda was perhaps the best indicator of the tectonic shifts in the US auto market: as Bloomberg notes, the Japanese automaker extended “a bleak stretch” for a car model widely regarded as one of the best on the U.S. market, showing just how swiftly consumer demand has shifted to SUVs and away from sedans.

Total deliveries for Honda rose 1.3% last month, missing estimates, and while Honda SUVs – including the Honda Pilot and Acura RDX – are setting sales records, the Accord’s 11% drop just how loathed sedans have become, as the sales drop has now extended for a dismal 10 consecutive months for the award-winning Accord.

Sedan sales also slumped for Toyota and Ford as consumers snubbed traditional favorite models like the Camry and Fusion, picking SUVs instead.

The revulsion to passenger cars has been so extensive, that according to Michelle Krebs, senior analyst with AutoTrader, the segment may have plunged to just 29% of the market in August, which would be an all-time low. Five years ago, sedans were 49% of industry-wide deliveries, she said.

“If it continues to slide, then one wonders how low it can go,” Krebs said of the sedan market. “We were anticipating passengers cars would make up 30 percent of the market this year and that may have been optimistic.”

The silver lining for automakers is that as sedan sales have collapsed, overall US car demand has been a little better than analysts anticipated entering the year, thanks to surging demand for roomy and fuel-efficient SUVs. The seasonally adjusted annualized rate of sales in August probably accelerated to 16.8 million according to Bloomberg, from 16.6 million a year ago, when Hurricane Harvey crippled deliveries to Texas’s gulf coast.

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India Joins China In Defying Trump, Will Allow Imports Of Iranian Oil

Two weeks after China – the top importer of Iranian crude oil – defied the White House, disclosing that it would continue importing Iranian oil ignoring US sanctions on Tehran, India, the second biggest buyer of Iranian oil exports, has given permission to its state refiners to import Iranian oil using a similar scheme as China in which Tehran would arrange tankers and insurance after firms including the country’s top shipper Shipping Corp of India halted voyages to Iran due to U.S. sanctions.

According to Reuters, New Delhi’s attempt to keep Iranian oil flowing mirrors a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC). China previously said that it would not stop buying Iranian oil despite U.S. efforts to bring the Iranian exports down to ‘zero.’ But Beijing is also said to have agreed not to increase its oil purchases from Iran.

The decisions by Iran’s two top crude oil customers confirm that the Islamic Republic will not be fully cut off from global oil markets from November, when U.S. sanctions against Tehran’s petroleum sector are due to start.

“We have the same situation (as most Western shippers) because there is no cover, so we cannot go (to Iran),” an SCI official told Reuters.

New Delhi turned to the NITC fleet after most insurers and reinsurers had begun winding down services for Iran, wanting to avoid falling foul of the sanctions given their large exposure to the United States. As a reminder, President Trump ordered the reimposition of economic curbs after withdrawing the United States from a 2015 nuclear deal between Iran and six world powers. No one trading with Iran will do business with America, he said although that threat appears to not be too concerning to either China or India.

SCI had a contract until August to import Iranian oil for Mangalore Refinery and Petrochemicals Ltd (MRPL), two sources familiar with the matter said.

Eurotankers, which had a deal with MRPL to import two Iranian oil cargoes every month, has also said it cannot undertake Iranian voyages from September, the sources said.

“The shipping ministry has given refiners permission to buy Iranian oil on a CIF (cost, insurance and freight) basis,” a government source told Reuters.  Under the CIF arrangement, Iran will provide shipping and insurance, enabling Indian refiners to continue purchases of the country’s oil despite the non-availability of cover from Western insurers due to the restrictions imposed by Washington.

* * *

The move will benefit Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and MRPL, which plan to lift Iranian cargoes during the rest of the fiscal year ending on March 31. India wants to continue buying oil from OPEC member Iran as Tehran is offering almost free shipping and an extended credit period.

With the Indian decision, it is possible that virtually all of Iran’s output could be captured by just China and India if Tehran’s other “pro-US” clients decide to comply with the US sanctions. Indian state refiners, which drove India’s July imports of Iranian oil to a record 768,000 barrels per day, had planned to nearly double oil imports from Iran in 2018/19.

Reuters notes that unlike their private peers, India’s state-run refiners need government permission to import oil on a delivered, or CIF, basis. Federal policy requires them to favor Indian insurers and shippers by buying only on a free on board (FOB) basis. However, the permission for CIF purchases applies only to existing annual contracts with Iran, the government source said.

India will finalize its strategy on crude purchases from Tehran after a meeting with top U.S. officials this week, a senior government official told Reuters last week. With it now public knowledge that India will defy the White House on Iran oil purchases, it remains to be seen what, if any, retaliation the Trump administration will threaten against India should it proceed as planned.

via RSS https://ift.tt/2Q5f3ru Tyler Durden

Detroit Police Shot 54 Dogs Last Year—Twice as Many as Chicago

Detroit police officers shot 54 dogs last year, according to public records obtained by Reason. That’s a marked increase over the number reported by the department in 2016 and 2015, and more than twice as many as Chicago, a city with roughly 2 million more people.

The rise occurred at the same time Detroit is trying to fend off lawsuits from residents who say police wantonly killed their dogs during drug raids. Such incidents, given the grim moniker “puppycide,” regularly make local and national headlines across the country, and in recent years they’ve cost cities hundreds of thousands of dollars in legal settlements.

In response, several states have passed laws mandating new training, and police departments have begun teaching officers how to properly read canine behavior. Chicago police, for instance, shot 24 dogs last year, according to the Chicago Tribune. The number of dogs shot by Chicago police has been steadily falling—67 percent over the past three years, the city says—and officials attribute it to better training.

Detroit, meanwhile, went from 25 dog shootings in 2015 to more than twice that in 2017, although several reports were missing from previous records provided by the city.

There are, of course, vast differences between cash-strapped Detroit and other major U.S. cities. In 23 of those shootings, Detroit police were responding to reports of aggressive dogs running loose on the street, sometimes menacing and attacking residents. According to city data, Detroit’s 911 service received 5,999 animal complaints and vicious animal reports in 2017. In one case, a police officer saved a child who was being mauled by two pit bulls. Officers sometimes tried to lure dogs with food and treats or use a control stick, according to police reports. In others, they waited in vain for animal control before taking the situation into their own hands.

But more than one-third of those dog shootings involved a Detroit narcotics unit that has been at the center of numerous media reports and costly lawsuits.

A 2016 Reason investigation found that the Detroit Police Department’s Major Violators Unit, which conducts hundreds of drug raids a year in the city, had a nasty habit of leaving dead dogs in its wake.

One officer had killed 69 dogs over the course of his career, public records showed. That officer has now shot 80 dogs, according to “destruction of animal” reports filed by Detroit police officers in 2017 and obtained by Reason.

Of the 54 dogs destroyed by the department in 2017, 19 were killed during drug raids conducted by the Major Violators Unit. That’s more animal shootings than the entire Los Angeles Police Department performed—14 total—in 2016, the latest year for which summary statistics of LAPD use-of-force incidents are available.

The Major Violators Unit was responsible for an April 26, 2017, narcotics raid on Detroit resident Renee Attles’ house that ended with her pit bull being shot dead. Speaking to a local television news channel, Attles said the police stormed into her home and killed her dog during a wrong-house drug raid:

“I am so hurt,” said Renee Attles. “You all you don’t understand, I am so freaking hurt. That was my dog.”

Renee Attles says she ran out to her sister’s car to decide where they were going to celebrate their deceased mother’s birthday. All of a sudden Detroit police stormed her Ryan Street home.

“I said what do you want,” she said. “They handcuffed me and her sister at her car before we even got right there. All I heard was pop, pop, pow. Just like that. I told them let me get my dog.”

The only drug confiscated from the scene was a small bottle of Attles’ medical marijuana.

Another destruction of animal report shows that several hours earlier that same day, the same Major Violators Unit crew executed another narcotics search warrant on a house a mile and a half away and shot another pitbull. Again, the only drug recovered was marijuana.

This February, the Detroit City Council approved a $225,000 settlement to Kenneth Savage and Ashley Franklin. The couple filed a federal civil rights lawsuit last July against the city and several Detroit police officers, alleging the officers shot Savage and Franklin’s three dogs while the animals were enclosed behind an 8-foot-tall fence—all so the officers could confiscate several potted marijuana plants in the backyard.

In 2015, the city of Detroit approved a $100,000 settlement to a man after police shot his dog while it was securely chained to a fence.

Two other federal civil rights lawsuits stemming from Detroit drug raids are currently being considered by the Sixth Circuit Court of Appeals. In one, Detroit resident Nikita Smith alleges that narcotics officers shot her three pitbulls, including one that was secured behind a bathroom door. Smith was initially charged with a marijuana offense, but the charges were dismissed when police failed to appear at her court hearing.

In the second lawsuit, Nicole Motyka and Joel Castro say narcotics officers raided their house and shot two of their pitbulls, despite the dogs being behind a barrier in the kitchen. The officers found 26 marijuana plants inside, which shouldn’t have been a surprise. Castro was a state-licensed medical marijuana caregiver. Marijuana charges against the couple were later dropped.

“I don’t want anything to do with the Detroit police anymore,” Motyka told Reason in an interview. “You grow up being taught these are the people you’re supposed to trust, and then they come in and kill your family. I have no love for them. None. They probably sleep well at night. We don’t.”

To try and combat these lawsuits, the city of Detroit has adopted the novel legal argument that, if a dog is unlicensed, as in Smith’s case, it is considered “contraband” and not protected from unreasonable police seizure—read: killing—under the Fourth Amendment of the Constitution.

Two lower federal judges have come to opposite conclusions on the issue. One dismissed Smith’s case, ruling that her unlicensed dogs amounted to contraband. The other federal judge rejected Detroit’s argument in Motyka’s lawsuit and ruled that the couple’s unlicensed dog was still legitimate property.

The Sixth Circuit Court now has the unenviable task of determining whether a pet’s property status lies in its owner’s compliance with city regulations, and if that means a police officer can shoot it with impunity.

The Detroit Police Department did not immediately respond to a request for comment. However, in an interview last March with a local news channel, Detroit Police Assistant Chief James White defended the department from charges that it is needlessly shooting dogs.

“This isn’t Fluffy the family pet in many instances,” White told the news station. “Door comes off the hinges. There’s pandemonium. People are running. Perpetrator, in many instances, has a weapon himself, can start shooting. Sometimes the dog is used as a tactic to get the advantage over the officers, and I just don’t think it would be acceptable to an officer to put their life at risk to try to stop a dog from attacking them during a drug raid.”

Officers were found in compliance with department regulations in every single destruction of animal report reviewed by Reason.

As I’ve written several times, better police training on how to read dogs’ body language would help in some cases, but these stories will inevitably continue as long as the Detroit police continue to perform aggressive drug raids on a daily basis.

The lawsuits will inevitably continue, too.

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