Ali Is Dead, Fear Is Alive & Free Speech Is Being Dealt A Knock-Out Punch

Submitted by John Whitehead via,
“What are the defenders of free speech to do? The sad fact is that this fundamental freedom is on its heels across America. Politicians of both parties want to use the power of government to silence their foes. Some in the university community seek to drive it from their campuses. And an entire generation of Americans is being taught that free speech should be curtailed as soon as it makes someone else feel uncomfortable. On the current trajectory, our nation’s dynamic marketplace of ideas will soon be replaced by either disengaged intellectual silos or even a stagnant ideological conformity. Few things would be so disastrous for our nation and the well-being of our citizenry.”—William Ruger, “Free Speech Is Central to Our Dignity as Humans“

As a nation, we have a tendency to sentimentalize cultural icons in death in a way that renders them non-threatening, antiseptic and easily digested by a society with an acute intolerance for anything controversial, politically incorrect or marred by imperfection. This revisionist history—a silent censorship of sorts—has proven to be a far more effective means of neutralizing radicals such as Martin Luther King Jr. than anything the NSA, CIA or FBI could dream up. In life, King called for Americans to rise up against a government that was not only treating blacks unfairly but was also killing innocent civilians, impoverishing millions, and prioritizing the profits of war over human rights and dignity. This was a man who went to jail over racial segregation laws, encouraged young children to face down police dogs and water hoses, and who urged people to turn their anger loose on the government through civil disobedience. King actually insisted that people have a moral responsibility to disobey unjust laws. In death, however, King has been reduced to a face on a national monument and a national holiday, neither of which even hint at the true nature of the man: fiery, passionate, single-minded in his pursuit of justice, unwilling to remain silent in the face of wrongdoing, and unafraid of offending those who might disagree with him. A contemporary of King’s, heavy-weight championship boxer Muhammad Ali followed a different path as a social activist and “breaker of boundaries.” Like King, Ali didn’t pull any punches when it came to saying what he believed and acting on it. Yet already, in the wake of Ali’s passing, we’re being treated to a sentimentalized version of the heavy-weight boxer. In life, Ali was fast-talking, fast-moving and as politically incorrect as they come. He became an early convert to the Nation of Islam, a black separatist religious movement whose membership at one time included Malcolm X and Louis Farrakhan. He denounced his “slave name” (Cassius Marcellus Clay) and refused to be the “white man’s Negro.” He was stripped of his boxing title, arrested and threatened with five years in prison and a fine of $10,000 after refusing to be drafted into the Army as a conscientious objector to the Vietnam War. “My conscience won’t let me go shoot my brother, or some darker people, or some poor hungry people in the mud for big powerful America,” declared Ali. “And shoot them for what? They never called me nigger, they never lynched me, they didn’t put no dogs on me, they didn’t rob me of my nationality, rape and kill my mother and father. … Shoot them for what? How can I shoot them poor people? Just take me to jail.” As First Amendment scholar David L. Hudson Jr. notes, “Ali’s remarkable career and life placed him at the vortex of these First Amendment freedoms… Ali freely exercised his religious faith. He regularly spoke provocatively on a variety of topics. The press was abuzz with coverage and criticism. Thousands assembled in support of him, and the champion himself took part in rallies, parades and marches. Some petitioned the government to redress the injustice of his conviction for refusing military service, which resulted in his being exiled from the boxing ring for his beliefs.” It took a legal battle all the way to the U.S. Supreme Court for Ali’s religious objections to serving in the Army to be given credence and his First Amendment arguments to prevail. The case was Clay v. United States. That was in 1971. Forty-five years later, Ali is dead, fear is alive, and free speech is being dealt one knock-out punch after another. Indeed, talk-show celebrity Piers Morgan has been soundly trounced and roundly censured for daring to suggest that Ali—a champion of the First Amendment who liberally peppered his speech with words (nigger and Uncle Tom) and opinions (“the white man is the Devil“ and “I’m sure no intelligent white person watching this show … want black boys and black girls marrying their white sons and daughters“) that would horrify most of his politically correct fans—made more “inflammatory/racist” comments than Donald Trump. Speaking of Trump, in Fresno, California, a third-grader was ordered to remove his pro-Trump “Make America Great Again” hat because school officials feared for his safety. The 9-year-old boy refused, citing the First Amendment. That was the same argument—a concern for safety—officials used in 2010 when they ordered several high school students to remove their t-shirts emblazoned with the American flag. The concern: wearing the flag on Cinco de Mayo, a Mexican day of celebration, might offend Hispanic students attending the school. The U.S. Supreme Court agreed with the school’s logic. Coincidentally, that same week, the high court also ruled against Confederate flag license plates on the grounds that they constituted government speech and might be offensive to African-Americans. For those of us who came of age in the 1960s, college campuses were once the bastion of free speech, awash with student protests, sit-ins, marches, pamphleteering, and other expressive acts showing our displeasure with war, the Establishment and the status quo. Today, on college campuses across the nation, merely chalking the word “Trump” on the sidewalk is enough to have student groups crying foul and labeling it as hate speech in need of censorship. Under the misleading guise of tolerance, civility, love and political correctness, college campuses have become hotbeds of student-led censorship, trigger warnings, microaggressions, and “red light” speech policies targeting anything that might cause someone to feel uncomfortable, unsafe or offended. As I point out in my book Battlefield America: The War on the American People, this doesn’t even begin to touch on the criminalization and surveillance of various forms of speech that the government deems to be hateful, anti-government, extremist, bullying, dangerous or inflammatory. One could say that we have allowed our fears—fear for our safety, fear of each other, fear of being labeled racist or hateful or prejudiced, etc.—to trump our freedom of speech and muzzle us far more effectively than any government edict could. Ultimately the war on free speech—and that’s exactly what it is: a war being waged by Americans against other Americans—is a war that is driven by fear. America is in the midst of an epidemic of historic proportions. The contagion being spread like wildfire is turning communities into battlegrounds and setting Americans one against the other. Normally mild-mannered individuals caught up in the throes of this disease have been transformed into belligerent zealots, while others inclined to pacifism have taken to stockpiling weapons and practicing defensive drills.
This plague on our nation—one that has been carefully cultivated and spread by the powers-that-be—is a potent mix of fear coupled with unhealthy doses of paranoia and intolerance, tragic hallmarks of the post-9/11 America in which we live. Everywhere you turn, those on both the left- and right-wing are fomenting distrust and division. You can’t escape it. We’re being fed a constant diet of fear: fear of terrorists, fear of illegal immigrants, fear of people who are too religious, fear of people who are not religious enough, fear of the government, fear of those who fear the government. The list goes on and on.
The strategy is simple yet brilliant: the best way to control a populace is through fear and discord. Confound them, distract them with mindless news chatter and entertainment, pit them against one another by turning minor disagreements into major skirmishes, and tie them up in knots over matters lacking in national significance. Most importantly, keep the people divided so that they see each other as the enemy and screaming at each other so that they drown out all other sounds. In this way, they will never reach consensus about anything or hear the corporate state as it closes in on them. This is how a freedom-loving people enslave themselves and allow tyrants to prevail. 
This Machiavellian scheme has so ensnared the nation that few Americans even realize they are being manipulated into adopting an “us” against “them” mindset. Instead, fueled with fear and loathing for phantom opponents, they pour millions of dollars and resources into political elections, hoping for change that never comes. All the while, those in power—bought and paid for by lobbyists and corporations—move their costly agendas forward, and “we the suckers” get saddled with the tax bills.
We have been down this road before. A classic example is the fear and paranoia that gripped the country during the 1950s. Many huddled inside their homes and fallout shelters, awaiting a nuclear war. It was also the time of the Red Scare. The enemy this time was Communist infiltration of American society.
Joseph McCarthy, a young Republican senator, grasped the opportunity to capitalize on the popular paranoia for personal national attention. In a speech in February 1950, McCarthy alleged having a list of over 200 members of the Communist Party “working and shaping the policy of the U.S. State Department.” The speech was picked up by the Associated Press, without substantiating the facts, and within a few days the hysteria began.
McCarthy specialized in sensational and unsubstantiated accusations about Communist infiltration of the American government, particularly the State Department. He also targeted well-known Hollywood actors and directors, trade unionists and teachers. Many others were brought before the inquisitional House Committee on Un-American Activities for questioning. Regarded as bad risks, the accused struggled to secure employment. The witch hunt ruined careers, resulting in suicides, and tightened immigration to exclude alleged subversives.
“McCarthyism” eventually smeared all the accused with the same broad brush, whether the evidence was good, bad or nonexistent. McCarthy, like many do today, appealed to the low instincts of envy, paranoia and dislike for the intellectual establishment.
“The real scoundrel in all this,” writes historian David Halberstam, “was the behavior of the members of the Washington press corps, who, more often than not, knew better. They were delighted to be a part of his traveling road show, chronicling each charge and then moving on to the next town, instead of bothering to stay behind and follow up. They had little interest in reporting how careless McCarthy was or how little it all meant to him.”
However, on March 9, 1954, Edward R. Murrow, the most-respected newsman on television at the time, broke the ice. He attacked McCarthy on his weekly show, See It Now. Murrow interspersed his own comments and clarifications into a damaging series of film clips from McCarthy’s speeches. Murrow ended the broadcast with one of the greatest news commentaries of all time, also a warning.
We will not walk in fear, one of another. We will not be driven by fear into an age of unreason, if we dig deep in our history and our doctrine; and remember that we are not descended from fearful men. Not from men who feared to write, to speak, to associate, and to defend causes that were for the moment unpopular.
This is no time for men who oppose Senator McCarthy’s methods to keep silent, or for those who approve. We can deny our heritage and our history, but we cannot escape responsibility for the result. There is no way for a citizen of a republic to abdicate his responsibilities. As a nation we have come into our full inheritance at a tender age. We proclaim ourselves, as indeed we are, the defenders of freedom, wherever it continues to exist in the world, but we cannot defend freedom abroad by deserting it at home. The actions of the junior Senator from Wisconsin have caused alarm and dismay amongst our allies abroad, and given considerable comfort to our enemies. And whose fault is that? Not really his. He didn’t create this situation of fear; he merely exploited it—and rather successfully. Cassius was right. ”The fault, dear Brutus, is not in our stars, but in ourselves.”
Whether you’re talking about free speech, surveillance, police misconduct or some other symptom of a government that has grown drunk on its own power, the answer is always the same: “we the people.” We need to reject fear as our guiding principle, and restore freedom to its rightful place at the center of our republic. As William Ruger writes in a powerful editorial for Time:
We must vigorously re-make the case for free speech. We must recur to its great defenders from ages past and reintroduce their ideas to our fellow Americans. The wisdom of John Milton, John Locke and John Stuart Mill—not to mention that of Americans like George Mason and Justice Louis Brandeis—is as true today as it was in their times. We just have to remember it… we must transmit an understanding of the value of free speech to today’s Americans in order to ensure that it is protected for future generations. And perhaps even more importantly, we need to demonstrate a vigorous commitment to free speech. America’s success depends on whether we continue to embrace this fundamental freedom.

Source: Zerohedge – Ali Is Dead, Fear Is Alive & Free Speech Is Being Dealt A Knock-Out Punch

ISIS Taxes Sockless Women & Beardless Men In Desperate Attempt To Raise Cash

As we have detailed in the past, the dramatic reduction in cash flow from oil sales has taken a tremendous toll on ISIS. A shortage of oil revenues has led to ISIS becoming so desperate for cash that it has even killed its own fighters in order to sell their organs. Now, it appears that another method is being tried to raise funds, this time by taking a page out of the standard government playbook: when you run out of cash, simply find ways to raise taxes on everyone.

RT is reporting that ISIS has now enacted new taxes on those that live in territories under the group's control (which has dropped from 9 million to 6 million people over the past year), and each tax is more bizarre than the next.
For leaving a door open, $100. If one were to fail a random Sharia test, $20 per wrong answer. For women, $30 for not wearing socks, and $25 if a cloak is too tight – for men, a quick trimming of the beard will get you hit with a $50 tax. And if someone is a non-sunni muslim or used to work for the government, then there is a special "repentance" certificate that needs to be paid for, and that will cost anywhere from $200 to $2,500.
"There are fewer people and business activities to tax, the same applies to properties and land to confiscate." Said Columb Strack, senior analyst at IHS. "This is a big indicator of the group's financial difficulties. Taxation makes up about 50 percent of the Islamic State's monthly revenue sources and encompasses almost every aspect of the population's life" added Ludovico Carlino, also of the IHS.
Speaking of every aspect of the population's life, there are even taxes related to livestock. For example, if a bell is found around a sheep's neck, that's a $10 fine for the owner, and the animal will be confiscated.
As ISIS is under pressure in both Iraq and Syria, it may lose even more territory. If and when that happens, who knows what kind of outlandish scheme the group will come up with at that point.
* * *
Bonus: Here is drone footage showing the Syrian army advancing on Raqqa, the de facto capital of the Islamic State.

Source: Zerohedge – ISIS Taxes Sockless Women & Beardless Men In Desperate Attempt To Raise Cash

Mapping The Cost Of "Sin" Across America

As spring heads into summer across the United States, many Americans may be enjoying a frosty adult beverage. And associated with the purchase of that alcohol, Americans will pay a hefty tax. The taxes collected from so-called sin taxes serve as a major source of revenue for some states. Sin taxes can cover activities from tobacco and alcohol to casino and racing gambling. decided to visually break down the amount of revenue that states generate from sin taxes on a total tax revenue basis, as well as examining the amount of revenue generated by the category of "sin taxes". States collected over $32 billion in sin taxes in 2014. As political pressure mounts to keep income and property taxes low, state legislatures have often turned to sin taxes to generate more revenue. Experts note that states have raised taxes on tobacco products 111 times between 2000 to 2015.

Eleven states collected over $1 billion from sin taxes. These states are identified by the darkest color on the visualization above. Pennsylvania led the way with $2.7 billion in sin tax revenues.  The Keystone state generated over $1 billion from tobacco revenue alone, one of only three states to do so. This was followed by revenue from racino in excess of $770 million and casino revenue of $575 million.
Pennsylvania is closely followed by New York with around $2.65 billion in sin tax revenue. Close behind in third was Texas with $2.51 billion in sin taxes. The other eight states in excess of $1 billion were Nevada, Indiana, Illinois, Ohio, Michigan, New Jersey, Florida and California.
At the bottom end of the scale, Wyoming had the lowest amount of "sin tax" revenue with only $26 million. North Dakota was in second place with only $41 million.
Taxes on tobacco products is a major source of sin tax revenue. As stated previously, only three states generated in excess of $1 billion in revenue from tobacco. New York took in the largest amount of tobacco taxes with $1.446 billion, in a virtual dead heat with Texas who also took in $1.446 billion. Pennsylvania generated the third largest amount of tobacco revenue at $1.028 billion. On the lower side of the scale, Wyoming only collected $24.4 million in tobacco. South Carolina was the second lowest with only $25 million generated from taxes on tobacco.
Another major category of sin taxes is alcohol. As shown by the visualization, Texas was the only state to generate over $1 billion in revenue from alcohol. The next closest state in a distant second was Florida with $452 million. New York was third far behind Florida with only $250 million in alcohol tax revenue. Wyoming saw the lowest amount of revenue with only $1.8 million from alcohol.
Only certain states allow casinos, thus geographically limiting the amount of revenue generated in this category. Not surprisingly, Nevada led the country in casino taxes with $912 million. The home of Las Vegas, casino revenue is a major source of income for the state. Pennsylvania was in second with $575 million in casino tax revenue. West Virginia was lowest in the category and only saw limited casino revenue of $3.8 million.
Another category with limited participants is revenue from Racinos. The combination of race tracks and casinos generated $937 million for New York, first in the category. This was followed by Pennsylvania with $770 million. Rhode Island followed in third with $318 million. Oklahoma was in last place with only $20 million in racino tax revenue.
The final category of sin taxes is revenue from video-gaming/pari-mutuel activities, generating fairly low revenue overall. West Virginia led the country in this category with $204 million collected. This was followed by Louisiana with $182 million. Illinois was in third with $152 million.
As states continue to grapple with ever-tightening budgets, it is nearly certain that state legislatures will continue to raise sin taxes. Sin taxes are an easy way for states to increase revenue without running into significant political opposition. However, the benefit of ever increasing sin taxes is questionable. Some academic studies have pointed to sin taxes as having limited revenue growth and high costs to enforce. The debate over sin taxes is certain to continue during the election year.

Source: Zerohedge – Mapping The Cost Of "Sin" Across America

The US Is Dumping Hazardous Electronic Waste Into Asia

US exports of goods and services may be decreasing, but one export that appears to be hanging in there is hazardous electronic waste.

According to a recent investigation conducted by the Seattle-based e-waste watchdog group Basel Action Network (BAN), much of the hazardous electronic waste discarded in America is not being recycled properly – and by not recycled properly he means dumped in a junkyard in southeast Asia.
Jim Puckett who leads BAN said that "most of the public still thinks that they're going to recycle e-waste right there in America. They have the right to know where their stuff goes."
Last year the investigation inserted GPS tracking devices inside 200 discarded computers, printers and TV's. The devices were dropped off at donation centers, recyclers, and electronic take-back programs across the country. What the investigation found was that about a third of the items were illegally exported from the US, generally ending up in independent shops and junkyards in southeast Asia.
Using a mapping app on an iPad, Puckett tracked several of the items, including one left with Dell Reconnect, to the outskirts of Hong Kong.
From Sputnik
Puckett's investigation led him to a site on the outskirts of the city of Hong Kong, where workers without protective gear, wearing aprons dusted with extremely poisonous toner ink, were dismantling, and in some cases simply smashing, large piles of old printers.The salvage locations were littered with the broken white fluorescent tubes used to illuminate LCD flat-screen monitors on the printers. When broken, these items release highly-toxic mercury vapor. Through his translator, Puckett learned that the workers were not made aware that they were dealing with toxic materials, or that their health was at risk.
Another device mounted with a Puckett GPS locater was found in a nearby abandoned field, amid scattered pieces of LCD and CRT monitors, camcorders and keyboards. Hong Kong bans the import of hazardous e-waste from the US, and Puckett believes many of these operations are illegal.

The Hong Kong Environmental Protection Department said "On the whole, Hong Kong has been effective in combating hazardous waste shipments", also adding that at least 21 cargo loads of e-waste have been sent back to the US in the past three years.
Ultimately, BAN's tracking investigation revealed that 65 US recyclers illegally shipped e-waste to China, Thailand, Pakistan, Taiwan, Mexico, and Kenya. Of the 28 electronic GPS-monitored devices dropped off by Puckett with Dell Reconnect, six went abroad, to Hong Kong, Taiwan, China, and Thailand.
In response, Beth Johnson, the head of Dell's producer responsibility program said the company is interested in finding out how the tracked electronics ended up overseas. "If there is something that did not follow the system, we would certainly want to know about it and certainly take corrective action."
Well, now Dell knows that it's been dumping hazardous electronic waste into Asia – let's see if it updates the website to say: "plus you'll be helping to protect the environment and benefit your community at the same time – all while dumping all of the hazardous shit into Asia!"

Source: Zerohedge – The US Is Dumping Hazardous Electronic Waste Into Asia

The New "Hope"

Submitted by Ben Hunt via Salient Partners' Epsilon Theory blog,

A policy-controlled market, whether it’s today’s investment environment or the 1930s or the 1870s, places enormous pressure on investors … for yield and consistent return, to be sure, but even more so for a resurrection of the investment beliefs that held sway in “normal times”, for an escape from the prison of extraordinary monetary policy and its grip on market behavior. Pressure and time. That’s all it took for the Shawshank Redemption and that’s all it takes for our modern market redemption. Or it least that’s all it takes for the hope and the escape attempt. Let’s see if we’re as successful as Andy Dufresne.
When suitably crystallized, an investment hope takes on a different form. It becomes an investment theme. Today the investment hope that has crystalized into an investment theme is the notion that soon, just around the corner now, perhaps as a result of the next mystery-shrouded meeting of the world’s central bankers, perhaps as a result of the U.S. election this November, we will enjoy a coordinated global infrastructure spending boom. Of course, this isn’t deficit spending or another trillion dollar layer of debt, but is “investment in our crumbling infrastructure.” This isn’t a mirror image of China’s massive over-build in empty cities or of Obama’s shovel-ready infrastructure projects from 2009-2010, but is “really a free lunch“, to quote Larry Summers, where there’s never a Bridge-to-Nowhere or an Airport-of-One. Or so the Narrative goes.
A Narrative theme is a theme of hope, pure and simple. And because hope can and will emerge without any evidence or support from the real world, a Narrative theme can work from an investment perspective even if it’s a non-event in the real world or, stranger yet, an abject failure in the real world. In exactly the same way that you can invest alongside central bank efforts to prop up markets and drive asset prices higher without believing in your heart-of-hearts that anything these bankers say is even remotely true, so can you invest alongside a Narrative theme without believing a single word of the Narrative itself.
And to be clear, my personal belief is that Larry Summers and the rest of the “public infrastructure projects are great investments!” crowd are sniffing glue. You’re pulling forward future economic activity, that’s all. Read the latest from Howard Marks if you don’t believe me. I’m not saying that government spending is bad — on the contrary, government spending is absolutely necessary to preserve life, liberty, and the pursuit of happiness, and there’s certainly a societal “return on investment” from government spending — but don’t tell me that there’s this huge productivity-enhancing, non-quotation-marked economic return on investment generated by the government building stuff that the private sector doesn’t want to build. Don’t tell me that what China is doing with their infrastructure is “mal-investment”, but that if we do it … well, that’s different, because, you know, our infrastructure is “crumbling” instead of “gleaming” the way it is in … umm … China. Yes, LaGuardia is a miserable airport. So stipulated. But there are infinitely greater productivity gains to be had from changing our insane TSA regulations and reducing security lines than by building a new Terminal B. If you want a massive Keynesian deficit spending program on top of our massive current debt … fine, make the argument. There’s an argument to be made. But don’t put a specious “investment” wrapper around it.

But it’s exactly that specious wrapper — the Narrative — that makes all of this work as an investment theme. If a massive public works program were couched in its traditional Keynesian or neo-socialist form (you don’t see Bernie Sanders talking about the economic ROI of his infrastructure proposals), it wouldn’t have a chance with the Wall Street Journal crowd. But, hey, if a public works program is “a smart investment” … never mind that this is about as smart an investment as Moonbase Alpha (yes, I had the Space: 1999 lunchbox) or perhaps a gigantic hole in the ground … well, then, let’s muster up the usual suspects at CNBC and the Wall Street Journal op-ed staff to get behind this, and let’s convince ourselves that Donald Trump wouldn’t be a nut job president, even though every shred of evidence and plain common sense screams the contrary, because he’s, you know, a “builder.”
It’s all based on hope for real economic growth and an escape from policy-controlled markets, a hope that springs in every investor’s heart given enough pressure and enough time. It’s a hope that, as Sir Francis Bacon said, makes for a good breakfast but a bad supper. We’re in the breakfast phase of this Narrative theme still, as Missionaries (to use the game theory term) like Larry Kudlow beat the drum louder and louder for a big infrastructure spend, and it’s a drumbeat that will continue to grow until there’s a reality check or a powerful Missionary creating Common Knowledge to knock it back. That will be the dinner portion of this Narrative theme, and it will be an unpleasant meal. But I don’t see dinner being served until well after the U.S. election, no matter who takes the White House or how the balance of power shifts in Congress, and it might be a year or two later before the thin gruel of dashed hopes is served up to markets.
So even though I think this U.S. public infrastructure build has barely a whiff of merit from an economic policy perspective, even though I think its net effect once implemented will be to make the ultimate debt reset that much more horrific, I also think it’s a highly investable idea. Because that’s the way you play the Common Knowledge Game.
Common Knowledge is information that everyone believes everyone has heard. It’s why executions were once held in public, not so a big crowd can see the guy getting hanged, but so the crowd can see the crowd watching the guy getting hanged. It’s why political debates are filmed in front of a live audience. It’s why sitcoms have laugh tracks. It’s how a relatively small but highly televised protest in Cairo’s Tahrir Square toppled Mubarak. It’s why the Chinese government still cracks down on media pictures of the Tiananmen Square protests, now more than 25 years old. Common Knowledge is the game theoretic concept behind the irresistible power of the crowd watching the crowd, and as a result Common Knowledge construction by governments, corporations, and yes, central bankers is one of the most potent instruments of social control on Earth.
The Common Knowledge Game is the game of markets, and it’s been internalized by good traders for as long as markets have existed. What you think about the market doesn’t matter. What everyone thinks about the market (the consensus) doesn’t matter. What matters is what everyone thinks that everyone thinks about the market, and the way you get ahead of this game is to track the “Missionary statements” of politicians, pundits, and bankers made through the four media microphones where the Common Knowledge of markets is created: The Wall Street Journal, The Financial Times, Bloomberg, and CNBC. It’s what Keynes called The Newspaper Beauty Contest, and it drove the policy-controlled markets of the 1930s exactly as it drives markets today. Is it an easy game to play? Nope. But you don’t have to be a professional poker player to avoid being the sucker at your local game. You don’t have to be a wizard trader to be aware that the Common Knowledge Game is being played, and that it’s driving market outcomes.
Red and Andy survived more than 20 years in Shawshank prison because they never lost hope. But they were smart about the concept of hope. They didn’t let hope consume them to take stupid chances. In Red’s words, they never let hope drive them insane. That’s the same balancing act we all need to adopt here in Central Bank prison. Hope is a good thing. Hope is a human thing. But hope is also a social construct that is used intentionally by others to shape our behaviors, in markets as in life. That’s the awareness we need to be hopeful survivors here in the Silver Age of the Central Banker, and that’s the awareness I’m trying to create with Epsilon Theory.

Source: Zerohedge – The New "Hope"

7 Charts One Hedge Fund Is Watching

Fasanara Capital’s Francesco Filia sends over the following list of things he is watching, as well as the following seven charts he believes will show the upcoming key inflection points.

Yields are reaching new lows: the average German government bond yield is now below zero for the first time in history. 10yr Bunds are testing April ’15 lows (at +7bps). Curve may flatten from here.
Negative yields putting pressure on the banking sector: historically, the European banking index tends to underperform when interest rates drop and the curve flattens. So far in the last month, banks are over-performing yields. Over-performance may fade from here.
Within Europe, Italian banks are getting particularly hit: they started to underperform at the beginning of May and the Italian Banks index has now hit new YTD lows.
We keep a close eye on the other risk factors:

USD/CNH is surprisingly grinding higher, despite weak NFP, dovish Yellen, weak broad US Dollar, EUR & JPY strengthening.
Oil and Base Metals decoupled in May: this relation is to be closely monitored, we look at Oil gyrations as short-term heavy volatility, within a long-term downward trend.

The GERMAN AVERAGE GOVERNMENT BOND YIELD now below zero for the first time in history‘Umlaufrendite’ dived below zero for the first time last Friday after weak US NFP numbers. Now 10trn$ worth of govies globally trade negatively
GERMAN 10yr and 30yr YIELDS keep falling, curve may flatten further from here10yr BUND yield already at all-time lows, 30yr BUXL is still ~30bps above historical lows

Banks over-performed yields recently, gap may narrow from here RATIO of EU BANKS / EUROSTOXX vs. 10yr BUND YIELD. Historically, the relative performance of European banks over the Eurostoxx correlates well with European yield curves. Banks have over-performed recently. The gap is likely to narrow from here: relatively, yields may rise more than bank equities or fall less than bank equities.
Italian banks underperformed the EU banking sector in May by most in 2016Italian Banks hit new YTD lows this week. Their underperformance vs the EU banking sector is now evident, whereas they had moved broadly in tandem during January/February sell-off. Negative news flows (Veneto Banca, recent local elections) might be the driver of the move. Trend to monitor.
BTP vs. BUND & FTSEMIB vs. EUROSTOXX: Italian underperformance is visible also in the fixed income and broader equity marketThe yield spread between 10yr BTPs and 10yr Bunds kept widening since mid-March, while the FTSEMIB underperformed the Eurostoxx even more visibly (10% since January)
USD/CNH grinding higher, despite broad US Dollar weakness CNH is nearing the psychological level of 6.60, and fixed at its weakest since2011, despite post-NFP broad US Dollar weakness and good China FX reserve depletion numbers just released.
OIL and BASE METALS decoupled in MayWhile the Oil price kept rising and moved to 50$, base metals fell off a cliff and descended below March lows. A trend to monitor closely for clues on who is right of the two.

Source: Zerohedge – 7 Charts One Hedge Fund Is Watching

World's "Safest" Market Suffers Worst Volatility Since 2009

As Fed credibility collapses in a pile of failed communications, Bloomberg notes that the $1.5 trillion market for U.S. Treasury bills, known as an oasis of stability for investors worldwide, is experiencing the most volatility since the financial crisis.
Since September's farcical Fed fold, T-Bill yields have seen a visibly notable increase in volatility – extra- and intra-day…

As Bloomberg reports, the gyrations underscore how it’s a precarious time for investors in bills and other instruments in the money market, which the Fed uses to implement policy changes. Asset managers looking to park cash in the short-term securities have to navigate officials’ efforts to normalize interest rates while also adapting to post-crisis rules.
Skepticism toward the Fed’s plans to boost its overnight target, following liftoff from near zero in December, is fueling the volatility. Futures assign a 2 percent chance of an increase at officials’ June 14-15 gathering, and the probability doesn’t exceed a coin toss until December.
“The Fed has hiked once already, so we are in a tightening cycle, but there is enough uncertainty about what that will look like,” said William Marshall, an interest-rate strategist in New York at Credit Suisse Group AG, one of the Fed’s 23 primary dealers.
“The other big uncertainty, where there is still a lot of debate, is what is going to be the end state for front-end demand once the money-fund reforms go into effect.”

While this huge market is the so-called "safest" place to park cash in the world, based on the average daily range swings, T-Bills have not been this 'risky' since 2009…

Regulatory changes are also driving the volatility…
On Oct. 14, Securities and Exchange Commission rules take effect that may lead investors to shift into money-market funds focused on government debt, from prime funds, which typically buy commercial paper. The new regulations mandate that institutional prime funds report prices that fluctuate, rather than sticking to $1 per share. The measures also allow fund companies to use steps such as redemption fees to prevent runs in times of panic.
Amid all the changes, which have already led many money-market companies to alter their offerings, institutional investors may pull about $400 billion from prime funds, JPMorgan Chase & Co. predicted in the first quarter.
The combination of fluctuating Fed bets and purchases of bills related to regulatory changes will spur volatility, said Jerome Schneider, head of short-term portfolio management at Newport Beach, California-based Pacific Investment Management Co., which oversees $1.5 trillion.
“Until these stimuli become reconciled and resolved, we may continue to see relative repricing a normal event in this sector,” he said.

So, as with everything else The Fed touches – stocks are at their lowest volatility in years (amid the highest valuations ever) and T-Bills are the riskiest in 7 years

Source: Zerohedge – World's "Safest" Market Suffers Worst Volatility Since 2009

Was Hillary Caught Colluding With AP To Announce Delegate Win Before California

Conspiracy theory may be about to become conspiracy fact once again as the oddly-timed proclamation by the Associated Press last night that Hillary had secured enough delegates to win the Democratic Party nomination may have been planned days in advance…
As we detailed earlier, on a day with no voting, based on AP's surveys of the un-named anonymous super-delegates, they stated that Hillary had the 2383 delegates to secure the nomination… as Mike Krieger exclaimed,
Last night, the American public witnessed the most egregious example of mainstream media malpractice of my lifetime. By declaring Hillary Clinton the Democratic nominee based on the pledges of superdelegates who have not voted, and will not vote until the convention on July 25th, the Associated Press performed a huge disservice to American democracy on the eve of a major primary day, in which voters from the most populous state in the union (amongst others) head to the polls.
If you are a U.S. citizen and you aren’t outraged by this, there’s something seriously wrong with you.

…a day before the California Primary which Hillary was losing in several polls – especially among Indepedents.
I bet this poll had a lot to do with the decision to call democratic race for Hillary. They're scared. #VoteBernie
— Christie Sparrow (@sparrows1981) June 7, 2016
However, the discovery of @Cold_Stare that the AP graphic used to tell the world of Hillary's success had an unusual URL has many questioning whether The Clinton campaign and AP colluded to announce this to avoid a devastatingly embarassing loss in California.
Here is @Cold_Stare to explain…
@DrJillStein Planned attack w/ @AP Graphic delivered tonight created days ago. Worked together to do this tonight.
— Stardust (@Cold_Stare) June 7, 2016
And a close up on the graphic's URL…

The URL –
Probably just pure coincidence – "secret win" ? and two dates before the actual event 20160605 and 060416 ?
*  *  *
We are sure this is all a big misunderstanding and in fact an AP reporter named "Secret Win" wrote the story and the dates are not really dates at all… or else it appears Trump and Sanders were 100% correct – "it is all rigged!"
*  *  *
Finally, here is The Burning Platform's Jim Quinn summarizing the farce perfectly…
If ever you needed any more proof the captured MSM is nothing but a mouthpiece for the establishment, you got it yesterday. Hillary Clinton, the hand picked surrogate for the crony capitalists, military industrial complex and Wall Street, was declared the winner of the Democratic nomination because some shadowy super delegates supposedly threw their support to her. What a load of bullshit. Hillary was going to lose the California primary today. That would be a huge black eye for her floundering campaign.
The establishment needed to make the votes in California meaningless and keep people from even voting. So they declared her the winner. The timing was calculated. The AP headline and story was written days ago. They waited until the day before the primary to pull the rug out from Sanders and his supporters. Sanders and his people should turn Philadelphia into a war zone at the convention in July. The ruling oligarchy has rigged the game folks and they are telling you your vote doesn’t matter.

When will the American people stand up?

Source: Zerohedge – Was Hillary Caught Colluding With AP To Announce Delegate Win Before California

Who Can Go After Banks for the Foreclosure Crisis?

Cities are arguing that they, too, were damaged by risky loans, and that they should be able to take the lenders to court to regain their losses. The Atlantic- In the wake of the housing crisis, surprisingly few people or institutions have been held accountable for the risky lending practices that nearly wrecked the U.S. […]

Source: Stopforeclosurefraud – Who Can Go After Banks for the Foreclosure Crisis?

8th Cir. Holds Cybertheft Covered by Financial Institution Bond Applying ‘Concurrent Causation’ Doctrine

The U.S. Court of Appeals for the Eighth Circuit recently held that a bank was entitled to recover its cybertheft losses under its financial institution bond, despite its employee’s violation of the bank’s internal policies and procedures, and despite the bank’s failure to update its antivirus software, holding that Minnesota’s “concurrent causation” doctrine applies to […]Coleman Braun

Source: Consumerfsblog – 8th Cir. Holds Cybertheft Covered by Financial Institution Bond Applying ‘Concurrent Causation’ Doctrine