Brickbat: Let the Punishment Fit the Crime

Ray Wolfe faces up to 24
years in jail for falsely claiming to have found
a hair in his food
 in the Summit County, Colorado, jail.
Wolfe claimed he found a long hair in his beef stroganoff and
complained to jailers. But after an investigation, including
reviewing video of the kitchen and dining area, officials said
Wolfe put the hair in his own food and charged him with tampering
with evidence, false reporting, attempt to influence a public
servant and a bail bond violation. With sentencing enhancements for
being a habitual violator, Wolfe faces more than two decades in
prison if convicted on all charges.

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Ferguson Tonight: Thunder Storms, Peaceful Protests, “Go Kill ISIS And Leave Us Alone” – Live Feed

One glimpse at the ominous clouds approaching Ferguson this evening was enough to suggest the end of the world was approaching but for now peacfeul protesters are once again walking (not allowed to stand) chanting “No Justice, No Peace” amidd dramatic lightning storms. The weather, for now, appears to have subdued the crowds but one protesters banner proclaiming “Go kill ISIS and leave us alone” caught our eye. Police presence is evident but not forceful for now as protesters proclaim “We want justice, here’s your peace” suggesting tensions are de-escalating.

 

Live Feed:

 

The clouds…

The crowds…

 

The thoughts…

*  *  *

Eric Holder has left the town…

 

 

* * *

Let’s hope it remains calm.




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Huey P. Newton Gun Club Pushes #BlackOpenCarry to Protest Police Violence

In Texas, blacks are protesting police violence in a
particularly Southwestern way:
By invoking their right to open carry
. On Wednesday, more
than 30 members
of the newly-formed Huey P. Newton Gun
Club gathered to march through South Dallas with rifles, shotguns,
and AR-15s. The group eventually entered a restaurant with their
weapons while Dallas police officers were inside eating lunch.

“The recent murders of unarmed black, brown, and whites across
the United States of America has eradicated trust in the police,”
the gun club’s website
states.  

Individuals across this nation have been stripped of due
process, subjected to state-sponsored police terrorism, and
continue to suffer the fate of being terminated
extra-judicially. 

In Dallas the police have murdered over 70 unarmed individuals,
most of the black and brown men, over the last ten years. Excluding
a recent incident where police testimony was contradicted by
surveillance footage, there have been no indictments since
1973.

The people, who are gunned down and murdered by violent and
militarized police forces, have formed the Huey P. Newton Gun Club,
for the specifc purpose of self defense and community policing.

Note that the only Dallas cop indicted for killing an unarmed
civilian was a case with surveillance footage available. More and
more, we’re seeing why dashcam and body cameras for cops are so
crucial. Just yesterday, a 25-year-old man was
gunned down by police in St. Louis
. The cops said
Kajieme Powell, who had just stolen two energy drinks from a
convenience store and was now pacing out front talking to himself,
was coming at them with a knife raised when they shot in
self-defense. A
cell-phone video released today
shows otherwise. It shows two
St. Louis officers barely stopping their car before they open fire
on a man with his arms seemingly at his side. 

“We demand the immediate end to police brutality, harassment,
and murder of the people,” says the Huey P. Newton Gun Club
website. “We assert the right of the people, particularly those of
color, to bear arms and protect themselves where local, state, and
the federal government have historically failed to do
so.” 

The hashtag #BlackOpenCarry has
been lighting up Twitter tonight. Some photos, tweets, and
video: 

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Goldman Warns Additional Chinese Stimulus Risks Global Financial Stability

The soft July data have once again generated expectations of monetary easing from China. Goldman however thinks further monetary easing would have incrementally less of an impact and would come at the cost of financial stability. This diminishing impact, they argue, would result as overcapacity/oversupply restricts long-term borrowing demand and due to interest rate deregulation, which tends to move the long-term risk-free interest rate to a higher equilibrium, as seen in recent data. As the tradable sector continues to recover on the back of an improved global outlook, Goldman believes that a combination of sectoral policies aimed at easing financial stress and structural adjustment would be a better policy option. They do not expect broad macro easing or an interest rate cut in what remains of this year.

Goldman's Li Cui Explains…

Better global growth has supported recovery, while domestic demand is still soft

Recent data show that the impact of earlier policy easing was short-lived, and domestic demand has remained soft. For July, in particular, most indicators related to domestic demand – including investment, financing and imports – decelerated notably from the previous month. Industrial production held up but this was most likely a reflection of stronger exports rather than domestic momentum. While one monthly data point does not signify a trend, the underlying picture is clear: Chinese exports have seen a visible recovery since last year, cushioning the impact of the domestic slowdown, in line with our expectation.

Given soft domestic momentum, market attention has again turned towards the potential for further monetary easing, including liquidity easing and a cut in interest rates. However, recent experience suggests that monetary easing is likely to have a limited impact on the growth recovery, as we have argued elsewhere. The credit rebound in May-June and the decline in July were entirely driven by short-term borrowing. Long-term borrowing corresponding to corporate capex and infrastructure construction has been muted, and stands at 15.5%yoy, compared with 17.3% at the end of 2013. Thus, long-term investment has continued to decelerate despite monetary easing. Along with the elevated long-term borrowing costs discussed below, this suggests that monetary easing has yet to produce a lasting impact on economic demand. The relief through higher short-term loans has mostly benefited enterprises with working capital needs, in particular companies in sectors with overcapacity.

Monetary easing is likely to have incrementally less of an impact on growth, but a higher cost in terms of financial stability

Monetary conditions have eased since Q1. The 7 day repo has declined by over 200 bps from its peak in late 2013, The domestic component of our FCI index also eased, although the majority of the FCI easing still came through the weaker exchange rate from last year.

There are reasons to question the impact of monetary easing (liquidity easing or interest rate cuts, as some observers have recently proposed), not least given their limited impact on growth so far.

First, long-term interest rates have shifted towards a new 'equilibrium' level. This is a powerful counterforce to near-term liquidity easing. Monetary policy affects the economy mostly through its effect on long-term borrowing costs. Despite the significant decline in front-end rates, the long-term risk-free rate has remained well above 4%, more than 100bp higher than in 2013, pointing to a rise in the term premium. (We calculate the term premium for 5-year government bond yields as the difference between the actual rate and the implied 5-year rate from the short-term rate forecast. See Exhibit 1, see Asia Economics Analyst: China: Higher term premium challenging monetary easing, May 16, 2014).

In turn, bank lending rates have held up as banks faced higher funding costs. Lending rates on general loans rose from 7.0% to 7.3% between December and June (the latest data available).

Higher long-term interest rates mostly reflect interest rate deregulation, in our view. As the government pursues incremental steps towards interest rate liberalisation and reduces financial repression, savers start to enjoy higher returns on their savings. This means increased funding costs for banks, and for the economy as a whole. Long-term interest rates thus show limited downward flexibility, despite the liquidity easing. This means that interest rate liberalisation tightens financial conditions, and hence a more supportive fiscal stance and exchange rate, as well as regulatory adjustments, are likely needed to compensate for the effect.

Exhibit 1: The increase in term premium* offsets the impact of liquidity easing on long-term borrowing costs

* The term premium is estimated as the difference between actual 5-year government bond yields and the yield implied by the short-term rate outlook estimated on the basis of Consensus Economics forecasts. For a detailed discussion, see Asia Economics Analyst: China: Higher term premium challenging monetary easing.

Second, the cost of monetary easing for financial stability is higher. A steeper yield curve tends to encourage interbank risk-taking (although such activities have declined due to the recent regulations). A cut in the benchmark deposit rate, which is already below the market rate, risks deposit outflows to higher-yield products (as observed most recently at end-June). This could increase liquidity and disintermediation risks for the banking system, without clear evidence that such a rate cut would help to bring down borrowing costs in the economy.

Third, long-term investment demand is constrained for reasons unrelated to funding costs. Domestic cyclical sectors (heavy industrials and property sectors) are still weighed down by overcapacity/oversupply, and fiscal measures have been selective and measured in general. The fiscal stance turned more supportive from May to June after the unusually contractionary stance in the January-to-April period, but the overall fiscal deficit is largely on par with the budget – there has been limited incremental expansion overall.

Policy balancing act has stayed on track, in part thanks to the higher cost of funding that has cooled leverage growth

We wrote at the start of the year that the macro policy agenda is unusually complex this year, and that the government needs to maintain stable growth, control credit expansion and curb tail risks, while at the same time pursuing structural reforms. On the positive side, the government has a large set of policy tools that allow it to address various policy priorities at the same time.

So far, the score-card for this balancing act has generally been positive:

  • Leverage growth has continued to come down, while economic growth has held up (Exhibit 2). Higher long-term rates help to contain leverage growth and reduce inefficient investment. Growth in the non-leveraged sector – in particular, exports – has helped to support the economic recovery.
  • Financial stress has declined, even though interest rate deregulation has continued. Financial tail risks as perceived by the market have come down substantially, measured using our financial stress indicators, which are compiled on the basis of financial market prices and spreads. Such declines reflected the more dovish central bank signals and the new regulations aimed at limiting risk-taking in the interbank market (Exhibit 3).

Exhibit 2: Total Social Financing (TSF) decelerates, while growth has remained stable

 

Exhibit 3: Market perception of tail risks** has declined sharply on the back of improved regulation

** These indices are combined on the basis of financial market prices and spreads, adjusting for economic cyclical positions. In particular, the interest rate risk index is the weighted average of the deposit rate and the 7-day repo rate. The credit risk index is the average of the yield spread for longer-term financing costs (corporate bond, AA-rated) over the government bond yield, and the yield spread of the short-term financing cost (bank acceptance bill rate) over the government bond yield. The liquidity risk index is the average of the spread of the 3-month interbank rate over the overnight repo rate, and the spread between bank bond financing and the risk-free rate.

Selective policy support to continue; we do not expect broad macro easing or an interest rate cut

On net, a tradable sector recovery, continued prudential rules to curb excessive risk-taking and targeted/selective policies should help to keep the balancing act on track, allowing the government to continue to pursue the structural agenda.

While we expect the general policy stance to remain accommodative, we do not expect significant further monetary easing. Indeed, as cyclical conditions improve, interbank rates are likely to drift up again and financial conditions could become tighter in H2. We do not expect an interest rate cut for the reasons discussed above.

Meanwhile, targeted policies to assist SME/agricultural sector borrowing, as well as further easing in housing-purchase-related, restrictions will continue. The PBoC may elect to use the PSL – or Pledged Supplementary Lending (a newly created facility to provide long-term liquidity to selected banks) – for specific sector support. Bond issuance by local governments is also likely to pick up to offset the expected dwindling of local land sales.

*  *  *

Of course, Goldman has been modestly bearish on China for months and this merely confirms that view but their perspective (at a time when the Fed is pulling back) is notable in that it leaves the ECB as the only treaty-busting player in the room that can surprise (since the BoJ is hampered by both proven ineffectiveness, soaring misery, and inflation pain).




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“The Financial System Is Vulnerable,” NYFed Asks “Could The Dollar Lose Its Reserve Status?”

When a tin-foil-hat-wearing blog full of digital dickweeds suggest the dollar's reserve currency status is at best diminishing, it is fobbed off as yet another conspiracy theory (yet to be proved conspiracy fact) too horrible to imagine for the status quo huggers. But when the VP of Research at the New York Fed asks "Could the dollar lose its status as the key international currency for international trade and international financial transactions," and further is unable to say why not, it is perhaps worth considering the principal contributing factors she warns of.

 

Via The World Economic Forum blog,

Could the dollar lose its status as the key international currency for international trade and international financial transactions, and if so, what would be the principal contributing factors?

Speculation about this issue has long been abundant, and views diverse. After the introduction of the euro, there was much public debate about the euro displacing the dollar (Frankel 2008). The monitoring and analysis included in the ECB’s reports on “The International Role of the Euro” (e.g. ECB 2013) show that the international use of the euro mainly progressed in the years prior to 2004, and that it has largely stalled since then. More recently, the euro has been displaced by the renminbi as the debate’s main contender for reducing the international role of the dollar (Frankel 2011).

This debate has mainly argued in terms of ‘traditional’ determinants of international currency status, such as country size, economic stability, openness to trade and capital flows and the depth and liquidity of financial markets (Portes and Rey 1998). Considerations regarding the strength of country institutions have more recently been added to the list. All of these factors influence the ability of currencies to function as stores of value, to support liquidity, and to be accepted for international payments. Inertia also plays a role (e.g. Krugman 1984, Goldberg 2010), raising the bar for currencies that might uproot the status quo.

We argue here – building on discussions we began during the World Economic Forum Summit on the Global Agenda 2013 – that the rise in global financial-market integration implies an even broader set of drivers of the future roles of international currencies. In particular, we maintain that the set of drivers should include the institutional and regulatory frameworks for financial stability.

The emphasis on financial stability is linked with the expanded awareness of governments and international investors of the importance of safety and liquidity of related reserve assets. For a currency to have international reserve status, the related assets must be useable with minimal transaction-price impact, and have relatively stable values in times of stress. If the risk of banking stress or failures is substantial, and the potential fiscal consequences are sizeable, the safety of sovereign assets is compromised exactly at times of financial stress, through the contingent fiscal liabilities related to systemic banking crises. Monies with reserve-currency status therefore need to be ones with low probabilities of twin sovereign and financial crises. Financial stability reforms can – alongside fiscal prudence – help protect the safety and liquidity of sovereign assets, and can hence play a crucial role for reserve-currency status.

The broader emphasis on financial stability also derives indirectly from the expanded awareness in the international community of the occasionally disruptive international spillovers of centre-country funding shocks (Rey 2013). We argue that regulatory reforms can play a role in influencing these spillovers. Resilience-enhancing financial regulation of global banks can help reduce the volatility of capital flows that are intermediated through such banks.

On financial stability and reserve-currency status

International reserve assets tend to be provided by sovereigns, notably due to the fiscal capacity of the state and the credibility of the lender of last resort function of the central bank during liquidity crises (see also De Grauwe 2011 and Gourinchas and Jeanne 2012). Systemic financial events can be accompanied by pressures on the government budget, however. While provision of a fiscal backstop to the banking sector is not the best ex ante approach to policy, fiscal support will tend to be forthcoming if the risk and estimated welfare costs of a systemic fallout are otherwise deemed too high.

Yet banking sector risks – and inadequate capacity within the banking sector to absorb these risks – can end up exceeding a government’s ability to provide a credible fiscal backstop without adversely affecting the safety of its sovereign assets. The fiscal consequences of bailouts may result in increased sovereign risk and the loss of safe-asset status, with implications for the status of the currency in question in the international monetary system.

To increase the likelihood that sovereign assets remain safe during systemic events, the sovereign can undertake financial and fiscal reforms that decouple the fiscal state of the sovereign from banking crises. Such reforms should achieve, in part, a reduction in the likelihood of and need for bailouts through increased resilience and loss absorption capacity of the financial system, and by ensuring sufficient fiscal space for credible financial-sector support (see also Obstfeld 2013).

Reform initiatives

A number of current reform initiatives already take steps in this direction. These include:

  • Reforms to bank capital and liquidity regulation, which reduce the likelihood that financial institutions, and notably systemically important ones (SIFIs), become distressed;
  • Initiatives that seek to counteract the procyclicality of leverage, and to strengthen oversight; and
  • Recovery and resolution regimes for distressed systemically important financial institutions (SIFIs) are being improved.

Importantly, initiatives are underway to improve recovery and resolution in the international context. While a global agreement on cross-border bank resolution is currently not in place, bilateral agreements among some pairs of countries are being forged ex ante to facilitate lower-cost resolution ex post. Further, the resilience of the system as a whole is being strengthened, to better contain the systemic externalities of funding shocks. Examples include:

  • The strengthening of the resilience of central counterparties and other financial market infrastructures; and
  • The foreign currency swap arrangements among central banks to provide access to foreign currency funding liquidity at times when market prices of such liquidity are punishingly high.

Nevertheless, the financial system contains vulnerabilities – globally, as well as in individual currency areas. The negative sovereign banking feedback loop may be weakened in many countries, but has not been fully severed. Moreover, reforms are not necessarily evenly implemented across countries. Fiscal capacities to provide credible backstops of the financial sector during stress vary widely. The consequences of recent reforms for the future of key international currencies are therefore open. Scope remains for countries vying for reserve-currency status to use the tool of financial stability reform to protect the safety and liquidity of their sovereign assets from the contingent liabilities of financial systemic risk.

Financial stability reforms matter for spillovers and capital flows

International capital flows yield many advantages to home and host countries alike. Yet the international monetary system still faces potential challenges stemming from unanticipated volatility in flows, as well as occasionally disruptive spillovers of shocks in centre-country funding conditions to the periphery. With the events around the collapse of Lehman Brothers, disruption in dollar-denominated wholesale funding markets led to retrenchment of international lending activities. Capital flows to some emerging-market economies then recovered with a vengeance as investors searched for yield outside the countries central to the international monetary system, where interest rates were maintained at the zero lower bound. After emerging markets were buoyed by the influx of funds, outflows and repositioning occurred when markets viewed some of the expansionary policies in the US as more likely to be unwound.

While macroprudential measures – and in extreme cases, capital controls – are some of the policy options available for addressing the currently intrinsic vulnerabilities of some capital-flow recipient periphery countries (IMF 2012), we point out that these vulnerabilities can also be addressed in part by financial stability reforms in centre countries.

Consider, for example, the consequences of the regulatory reforms pertaining to international banks that are currently being proposed or implemented. Improvements in the underlying financial strength and loss-absorbing capacity of global banks could have the beneficial side-effect of reducing some of the negative spillovers associated with unanticipated volatility in international banking flows – especially those to emerging and developing economies. Empirical research suggests that better-capitalized financial institutions, and institutions with more stable funding sources and stronger liquidity management, adjust their balance sheets to a lesser degree when funding conditions tighten (Gambacorta and Mistrulli 2004, Kaplan and Minoiu 2013). The result extends to cross-border bank lending (Cetorelli and Goldberg 2011, Bruno and Shin 2013).

While financial stability reforms may reduce the externalities of centre-country funding conditions, they retain the features of international banking that promote efficient allocation of capital, risk sharing and effective financial intermediation. By enhancing the stability of global institutions and reducing some of the amplitude of the volatility of international capital flows, they may address some of the objections to the destabilising features of the current system.

Cross-border capital flows that take place outside of the global banking system have recently increased relative to banking flows (Shin 2013). Regulation of global banks does very little to address such flows, and may even push more flows toward the unregulated sector. At the same time, however, regulators are considering non-bank and non-insurer financial institutions as potential global systemically-important financial institutions (Financial Stability Board 2014).

Conclusions

We have argued that the policy and institutional frameworks for financial stability are important new determinants of the relative roles of currencies in the international monetary system. Financial stability reform enhances the safety of reserve assets, and may contribute indirectly to the stability of international capital flows. Of course, the ‘old’ drivers of reserve currencies continue to be influential. China’s progress in liberalising its capital account, and structural reforms to generate medium-term growth in the Eurozone – as examples of determinants of the future international roles of the renminbi and the euro relative to the US dollar – will continue to influence their international currency status. Our point is that such reforms will not be enough. The progress achieved on financial stability reforms in major currency areas will also greatly influence the future roles of their currencies.

Authors: Linda Goldberg, Vice President of International Research at the Federal Reserve Bank of New York and Signe Krogstrup, Assistant Director and Deputy Head of Monetary Policy Analysis, Swiss National Bank; Member of the World Economic Forum’s Global Agenda Council on the International Monetary System




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Despite Collapsing Economy, Japanese PMI Surges To 5-Month High; China PMI Tumbles, Misses By Most On Record

Following New Zealand's biggest monthly plunge in consumer confidence in over 2 years, Japan's Manufacturing PMI surged to its highest since March at 52.5 (handily beating expectations of 51.5). Almost the entire suite of subindices were positive except JPY weakness-inspired margin compression as output prices tumbled and input prices surged. All of this in the face of collapsing and disappointing hard data. Meanwhile, China Manufacturing PMI plunged to 51.5, missing by the most on record, as China's apparent 'hard' data shows improvement. Perhaps it is time to recalibrate the seasonal magic in these PMIs…

 

New Zealand (like Australia) getting no help from China's recent PMI surge… biggest serial plunge in Confidence in over 3 years…

 

Which fits with the plunge in China PMI… (Employment continued its over 2-year contraction) as new orders retreated and inflation slowed

 

But then there is Japan's "miracle" survey…

 

More Japan schizophrenia…

 

Once again Soft survey data will be trumpeted over hard REAL data…




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China Push For Gold Pricing Power Continues, Grant 3 New Import Licences

Three more banks have been permitted to import gold to China, as IBTimes notes, the country redoubles its efforts to attain pricing power of the commodity. The move, which brings the number of firms allowed to import gold into China to 15, comes ahead of the SGE launching its Yuan settled bullion exchange, in hopes of replacing the now discredited London Fix and become a price-discovery center. Shanghai Pudong Development Bank and China Merchants Bank were joined by Standard Chartered – only the 3rd foreign bank to be allowed to import gold into China as the nation continues to increase the pace of liberalisation of the gold market following the approval last year of the country's first gold-backed WTFs.

 

As Reuters reports,

China has allowed three more banks, including a foreign lender, to import gold, sources with direct knowledge of the matter said, as the world's top gold buyer gears up for its strongest effort yet to gain pricing power of the metal.

 

 

Standard Chartered, Shanghai Pudong Development Bank and China Merchants Bank were given regulatory approval recently to import gold, five sources with direct knowledge of the matter told Reuters.

 

 

China approached foreign banks, gold producers and refiners to participate in SGE's international bourse, sources told Reuters earlier in the year, to boost its position as a price-discovery centre for gold. It plans to launch three physically-backed gold contracts.

 

The chairman of the exchange said in June that China should have its own pricing benchmark as it is the biggest consumer and producer of gold.

 

"The new import licenses seem to be well-timed. Along with their upcoming new exchange, they are clearly showing that they want to make the market more accessible, and easier for foreign players," said one precious metals trader in Hong Kong.

As IBTimes continues,

The news comes as Shanghai's international bullion exchange is on the verge of launching – a flagship initiative in China's attempts to wrest gold pricing power away from London.

Currently, the setting of the gold benchmark is determined twice daily on the London bullion market by Barclays, HSBC, ScotiaMocatta (the bullion banking division of Scotiabank), and Société Générale. China – along with Singapore – has been looking for ways to muscle in on the so-called 'gold fix'.

Opening the import market to three additional banks – Standard Chartered, Shanghai Pudong Development Bank, and China Merchants Bank – shows the Chinese government is willing to show some flexibility in order to do so.

The decision to permit a foreign lender is even more significant and, along with the fast-developing Shanghai Special Economic Zone, demonstrates the ongoing liberalisation of China's banking and commodity networks.

With the country's decision to permit gold-backed exchange-traded funds last year, as well as extending gold trading hours, its ambition of becoming a price discovery centre is growing closer.

Standard Chartered becomes just the third foreign bank after HSBC and ANZ to be permitted to import gold to China.

*  *  *

Of course, as we noted before, the timing of this liberalization also coincides with the collapse of the CCFD ponzi system and perhaps enables gold promises to be met more efficiently.

 

China's apetite for physical gold, which is further shown below focusing just on 2012 and 2013, has been estimated by Goldman to amount to over $70 billion in bilateral trade between just Hong Kong and China alone.




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St.Louis PD Release ‘Suicide-By-Cop’ Shooting Clip

As we noted previously, just days after the fatal shooting of Mike Brown in Ferguson, a 2nd officer-involved shooting ended in death for the suspect just miles from Ferguson. St.Louis Police Department – in the interests of transparency –  have released video of both the alleged shoplifting and the so-called ‘suicide-by-cop’ shooting itself of 25-year-old Kajieme Powell..”Powell approached the officers when they arrived, yelling at them to shoot him already. When he ignored commands to drop the knife, the two officers fired a total of 12 shots.”

 

As St.Louis public radio reports,

Powell was suspected of shoplifting energy drinks and donuts from a convenience store. The shop owner, believing that Powell was carrying a weapon, contacted police.

Another witness, Ald. Dionne Flowers, who represents the area and owns a beauty salon in the same block, noticed that Powell was acting erratically and also called police. Flowers told police she saw a second knife, though only one was recovered at the scene.

Powell approached the officers when they arrived, yelling at them to shoot him already.

When he ignored commands to drop the knife, the two officers fired a total of 12 shots. Chief Sam Dotson said the knife was like a steak knife.

The security camera footage of the alleged shoplifting. 

Cell phone footage of the shooting itself (the police start around 1:00)
Note: this contains both graphic language and violence.

The St. Louis Metropolitan Police Department said it will act with complete transparency.

*  *  *

We also note that AG Holder has already left Ferguson – having met with Mike Brown’s family.

And, as Bloomberg reports,

A grand jury will begin hearing evidence tomorrow in the police shooting death of Ferguson, Missouri, teenager Michael Brown, as violent clashes continued in the St. Louis suburb.

*  *  *




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Half Of All Americans Live With Someone Dependent On Government Benefits

More Americans than ever before are tapping government benefits. As WSJ reports, nearly half of Americans, 49.5%, lived in a household where at least one person was receiving some type of government benefit. Over the last few years, the number has mostly risen from more people turning to programs designed to help the poor, such as food stamps, Medicaid (the health-insurance program for the poor and disabled) and the Temporary Assistance for Needy Families program, commonly known as welfare. Welcome to Cloward-Piven's socialist America… or as some might say "Mission Accomplished."

 

Source: WSJ

 

As we discussed previously, this may not be entirely by accident…

In the mid-sixties at the height of the “social revolution” the line between democratic benevolence and outright communism became rather blurry. The Democratic Party, which controlled the presidency and both houses of Congress, was used as the springboard by social engineers to introduce a new era of welfare initiatives enacted in the name of “defending the poor”, also known as the “Great Society Programs”. These initiatives, however, were driven by far more subversive and extreme motivations, and have been expanded on by every presidency since, Republican and Democrat alike.

 

At Columbia University, sociologist professors Richard Cloward and Francis Fox Piven introduced a political strategy in 1966 in an article entitled 'The Weight Of The Poor: A Strategy To End Poverty'. This article outlined a plan that they believed would eventually lead to the total transmutation of America into a full-fledged centralized welfare state (in other words, a collectivist enclave). The spearpoint of the Cloward-Piven strategy involved nothing less than economic sabotage against the U.S.

 

Theoretically, according to the doctrine, a condition of overwhelming tension and strain could be engineered through the overloading of American welfare rolls, thereby smothering the entitlement program structure at the state and local level. The implosion of welfare benefits would facilitate a massive spike in poverty and desperation, creating a financial crisis that would lead to an even greater cycle of demand for a fully socialized system.

 

 

For those naïve enough to assume that Cloward-Piven is just a well intentioned activist method, it is important to understand that even if that were so, the effect of the Cloward-Piven Strategy will never achieve the goal its creators claimed to support. In my view, it is probable that they never really intended for it to produce wealth equality or an increased quality of life.

 

The tactic can only decrease wealth security by making all citizens equally destitute. As we have seen in numerous socialist and communist experiments over the past century, economic harmonization never creates wealth or prosperity, it only siphons wealth from one area and redistributes it to others, evaporating much of it as it is squeezed through the grinding gears of the establishment machine. Socialism, in its very essence, elevates government to the role of all-pervasive parent, and casts the citizenry down into the role of dependent sniveling infant. Even in its most righteous form, Cloward-Piven seeks to make infants of us all, whether we like it or not.

*  *  *

Mission Accomplished…?




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Was Kajieme Powell Really Holding High a Knife When Shot to Death by Police?

After St. Louis police shot to death 25-year-old Kajieme Powell
yesterday (as mentioned in Elizabeth Nolan Brown’s post
below
)—and apparently for good measure cuffed his corpse, says
an eyewitness at the scene of the video below around 2:45—St. Louis
Police Chief Sam Dotson told the press that he was a clear and
present danger to the officers, having, as the St. Louis
Post-Dispatch
reported, “pulled out a knife and came at the
officers, gripping and holding it high, Dotson said.” The
Huffington Post
 reported Dotson as saying
the knife was in an “overhand grip.”

This cell phone video—alas from pretty far away—does not look to
me like Powell was raising his arms. Nor does it show any obvious
sign that I can see of a knife at all, but I can’t be sure of that.
But the position of his arms seems clear enough to me when the
shots that killed him begin, around 1:35 or so of the video.

The video. Yes, it’s disturbing:

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