Individual Economists

"Cargo Declines at Port of Long Beach in June"

Calculated Risk -

Note: I'll have more on LA area port traffic once the Port of Los Angeles releases June statistics.

From the Port of Long Beach: Cargo Declines at Port of Long Beach in June
The COVID-19 pandemic continued to drive down demand for goods in the second quarter of 2020, leading to an increase in canceled sailings and a decline in cargo containers shipped through the Port of Long Beach in June.

Dockworkers and terminal operators moved 602,180 twenty-foot equivalent units (TEUs) last month, an 11.1% decline compared to June 2019. Imports shrank 9.3% to 300,714 TEUs and exports dropped 12.2% to 117,538 TEUs. Empty containers shipped overseas to Asia were down 13.1% to 183,928 TEUs.

Economic uncertainty brought by decreased consumer spending and ongoing health concerns amid the COVID-19 epidemic contributed to a drop during the first half of 2020, with cargo shipments at 3,433,035 TEUs, 6.9% less than the same period last year.

Canceled sailings continued to rise at a rapid rate in the second quarter as ocean carriers adjusted their voyages to a decline in demand for imports during the national COVID-19 outbreak,” said Mario Cordero, Executive Director of the Port of Long Beach. “The economic challenges may persist for some time, but the Port of Long Beach continues to invest in infrastructure projects that will meet the needs of our customers.”

The San Pedro Bay ports complex – Long Beach and L.A. combined – had 41 canceled sailings in the first half of 2019. This year it was 104 – 37 of which were destined for the Port of Long Beach.
emphasis added

Six High Frequency Indicators for a Recovery

Calculated Risk -

These indicators are mostly for travel and entertainment - some of the sectors that will recover very slowly.

----- Airlines: Transportation Security Administration -----
The TSA is providing daily travel numbers.

TSA Traveler Data Click on graph for larger image.

This data shows the daily total traveler throughput from the TSA for 2019 (Blue) and 2020 (Red).

On July 12th there were 754,545 travelers compared to 2,669,717 a year ago.

That is a decline of 72%. There has been a slow steady increase from the bottom, but air travel is still down significantly.

----- Restaurants: OpenTable -----
The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities.

Move Box OfficeThanks to OpenTable for providing this restaurant data:

This data is updated through July 11, 2020.

This data is "a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year."

Note that this data is for "only the restaurants that have chosen to reopen in a given market".

The 7 day average for New York is still off 81%.

Florida is only down 57% YoY.  Note that dining seems to be declining in many areas (probably due to the recent surge in COVID cases).

----- Movie Tickets: Box Office Mojo -----
Move Box OfficeThis data shows domestic box office for each week (red) and the maximum and minimum for the previous four years.  Data is from BoxOfficeMojo through July 9th.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.

Movie ticket sales have picked up a slightly from the bottom, but are still under $1 million per week (compared to usually around $300 million per week), and ticket sales have essentially been at zero for sixteen weeks.

Most movie theaters are closed all across the country, and will probably reopen slowly (probably with limited seating at first).

----- Hotel Occupancy: STR -----
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

Hotel Occupancy RateThe red line is for 2020, dash light blue is 2019, blue is the median, and black is for 2009 (the worst year probably since the Great Depression for hotels).

2020 was off to a solid start, however, COVID-19 crushed hotel occupancy.  Hotel occupancy was off 30.2% YoY last week.

Notes: Y-axis doesn't start at zero to better show the seasonal change.

Usually hotel occupancy starts to pick up seasonally in early June. So some of the recent pickup might be seasonal (summer travel).   Note that summer occupancy usually peaks at the end of July or in early August.

----- Gasoline Consumption: Energy Information Administration -----
gasoline ConsumptionThis graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows the year-over-year change in gasoline consumption.

At one point, gasoline consumption was off almost 50% YoY.

As of July 3rd, gasoline consumption was only off about 10% YoY (about 90% of normal).

Note: I know several people that have driven to vacation spots - or to visit family - and they usually would have flown.   So this might have boosted gasoline consumption.

----- Transit: Apple Mobility -----
The final graph is from Apple mobility. From Apple: "This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities." This is just a general guide - people that regularly commute probably don't ask for directions.

There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index. However the index is set "relative to its weekday-specific average over January–February", and is not seasonally adjusted, so we can't tell if an increase in mobility is due to recovery or just the normal increase in the Spring and Summer.

Apple Mobility DataThis data is through July 11th for the United States and several selected cities.

The graph is the running 7 day average to remove the impact of weekends.

IMPORTANT: All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. People walk and drive more when the weather is nice, so I'm just using the transit data.

According to the Apple data directions requests, public transit in the 7 day average for the US is still only about 50% of the January level. It is at 39% in New York, and 56% in Houston (down over the last couple of weeks).

BBRG: Big Tech Drives the Stock Market Without Much U.S. Help

The Big Picture -

Big Tech Drives the Stock Market Without Much U.S. Help
The Fang stocks get lots of their sales from countries that are doing better at managing the pandemic and reopening.
Bloomberg, July 13, 2020




Frustrated investors sometimes forget Mr. Market is occasionally irrational. A surprise 42% rally while the nation remains in the throes of a pandemic shows no signs of abating has them confused; so does unemployment at levels not experienced since the Great Depression and GDP off as much as 40%. Worse still, after a lengthy lockdown, the economic re-opening of the country seems to have been bungled.

The average American is experiencing an economy that is very negative.

Despite this, and a long host of woes, the market seems unstoppable. Yesterday, the Nasdaq hit new all-time highs. The S&P 500 is not too far behind. Both seem to be ignoring new record highs in coronavirus infections and myriad re-opening stumbles.

Attempts at explanations have included the Federal Reserve’s liquidity injections, the Congressional stimulus, an imminent Covid-19 treatment and/or vaccine. Perhaps the markets are looking to another trillion in stimulus this summer; maybe investors are looking past 2020 to 2021 or beyond. Or some combination of all of the above.

Another explanation is less glib: The most important stocks in the S&P500 are giant technology firms that derive a majority of their revenues from outside of the United States. On a relative basis, and for the first time in a decade, much of the world’s wealthy industrialized countries are doing better (and in some cases, much better) than the United States. Nations like Japan, South Korea, and Germany not only have managed to wrestle the pandemic into submission, their economies are far ahead of ours into their re-openings.

For the past 5 years, the group of stocks known as “FAANMG” have had an outsized influence on U.S. markets. “Since the start of 2015, the market capitalization of the S&P 500 has increased by $6 trillion. Of this, $4 trillion has come from the big six tech names: Microsoft, Apple, Amazon, Facebook, Alphabet (the owner of Google) and Netflix,” according to The Times of London.1  Two thirds of the gains in the S&P500 have been driven by just six U.S. companies.


See full column here




1. For the 5-year period since 2015 inclusive, the index gained 56.5%. Since the March 23rd lows this year, the index is up 42.1%, about three quarters of the gains of the prior 5 years.




I originally published this at Bloomberg, July 13, 2020. All of my Bloomberg columns can be found here and here


The post BBRG: Big Tech Drives the Stock Market Without Much U.S. Help appeared first on The Big Picture.

10 Monday AM Reads

The Big Picture -

My back to work morning train WFH reads:

The Political Genius of John Roberts: The chief justice stood up to Trump, placated Democrats, and scored indisputable points for judicial supremacy. (Slate)
Beware When Wall Street stock analysts scream ‘buy’ (the smart money is already way ahead of them): Most brokerage analysts tend to play it safe rather than risk their reputations and jobs (Marketwatch)
Don’t Fall in Love with your Stocks: One way to minimize regret is to sell portions of your stock on a predetermined schedule. Don’t forget, you can hold on to some of the shares forever if you want (The Belle Curve)
The leveraging of America: how companies became addicted to debt: Hertz’s demise has drawn attention to the relentless build-up in corporate debt in the US, where companies now owe a record $10tn (Financial Times)
This Is What It Looks Like When a Texas Oil Boom Busts: A year ago, the Permian Basin region was one of America’s hottest labor markets, fueled by a fracking gold rush. Today, the oil field has all but shut down, and everyone is feeling the pain, from restaurant owners to landlords to barbers. (Wall Street Journal)
The Boat Business Is Booming: Boats haven’t quite achieved sold-out pandemic panic-buy status, but they’re in increasingly short supply as families look for a way to vacation in as close to home as possible. (New York Times)
Elon Musk just surged past Warren Buffett on the list of the world’s richest people: Musk is now the world’s 7th-richest person, also ahead of tech titans Larry Ellison and Sergey Brin. The 49-year-old owns about a fifth of Tesla’s outstanding stock, which comprises the bulk of his $70.5 billion fortune. His majority ownership of Space-X accounts for about $15 billion (Fortune)
A top terrorism fighter’s dire warning: Russell Travers detailed his concerns to the intelligence community’s watchdog. Days later he was fired. (Politico)
Robert Mueller: Roger Stone remains a convicted felon, and rightly so: A jury later determined he lied repeatedly to members of Congress. He lied about the identity of his intermediary to WikiLeaks. He lied about the existence of written communications with his intermediary (Washington Post)
Storm King Reopens for the Art-Starved: The pastoral sculpture park in New York’s Hudson Valley opens its gates, with new works by Mark di Suvero, Kiki Smith and Martha Tuttle — and new precautions. (New York Times)

Be sure to check out our Masters in Business with Bill Miller of Miller Value Partners, which manages $2 billion in client assets. Miller is best known for running Legg Mason’s Capital Management Value Trust, whose after-fees returns beat the S&P 500 index for 15 consecutive years from 1991 through 2005.

Tech prospers in the pandemic

Source: Financial Times


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UN: 700 Die In Syrian Camp For ISIS Families - "Explosive" Situation For Renewed Terrorism

Zero Hedge -

UN: 700 Die In Syrian Camp For ISIS Families - "Explosive" Situation For Renewed Terrorism Tyler Durden Mon, 07/13/2020 - 02:45

ISIS has long been out of international media headlines, but sprawling refugee camps full of what are said to be Islamic State families and sympathizers remain in eastern Syria.

Days ago the United Nations issued an alarming report detailing that the some 70,000 mostly women, children, and elderly connected to ISIS at the al-Hol and Roj camps remain in "very dire conditions".

The UN counterterrorism chief Vladimir Voronkov announced late last week that 700 people "recently" died in the two camps, according to information his office had received. 

Al-Hol camp in Hasakah province, Syria. Via Reuters

Al-Hol and Roj are essentially massive open-air prison camps in the desert, administered by Syrian Kurdish forces backed by the United States.

Voronkov underscored that driving the high fatality rate are "lack of medicine, lack of food" - and though there have been recent reports that coronavirus may be in the camps, it's unclear the extent to which COVID-19 is a factor.

A UN team was reported to have entered the largest of the two camps, al-Hol, earlier this month. The populations there are in a legal limbo of sorts, and their fate uncertain.

From a counterterrorism point of view, the UN office warned the camps post a "huge problem" as they remain "very dangerous" for the prospect of a renewed Islamic State terror campaign. 

Voronkov warned: "they could create very explosive materials that could be very helpful for terrorists to restart their activities" in Syria and Iraq.

In the past weeks hundreds of ISIS sympathizers in the camps were reported to have escaped. 

Europe: Rape Victims Accused Of Racism

Zero Hedge -

Europe: Rape Victims Accused Of Racism Tyler Durden Mon, 07/13/2020 - 02:00

Authored by Raymond Ibrahim via The Gatestone Institute,

An increasingly popular idea is that whenever races clash, only minorities can be victims. The notion is hardly limited to the recent riots in America. Elements of such thinking often appear in other contexts.

British women, for instance, including rape victims who drew attention to "Asian" (Pakistani and South Asian) sex grooming gangs, are also being attacked by the "woke" establishment.

Earlier this month in the UK, Sarah Champion, a Labor politician and MP for Rotherham (the epicenter of sex grooming), was accused of "fanning the flames of racial hatred" and "acting like a neo-fascist murderer."

Her crime? She had dared to assert that "Britain has a problem with British Pakistani men raping and exploiting white girls."

The same elements accusing Champion of being a "murderer" also characterized the UK's anti-extremism program, Prevent, as being "built upon a foundation of Islamophobia and racism."

A few weeks earlier, an article titled, "I was raped by Rotherham grooming gang—now I still face racist abuse online," appeared. In it, a British woman (alias, "Ella") revealed that her Muslim rapists called her "a white whore, a white b***h," during the more than 100 times she was raped in her youth by the Pakistani grooming gang.

"We need to understand racially and religiously aggravated crime if we are going to prevent it and protect people from it and if we are going to prosecute correctly for it," Champion said in a recent interview.

"Prevention, protection and prosecution—all of them are being hindered because we are neglecting to properly address the religious and racist aspects of grooming gang crimes.... It's telling them that it's OK to hate white people."

Ella's attempts to highlight the "religious and racist aspects" of her and many other girls' similar abuse led only to "a lot of abuse from far-left extremists, and radical feminist academics," she said. Such groups "go online and they try to resist anyone they consider to be a Nazi, racist, fascist or white supremacist".

"They don't care about anti-white racism, because they appear to believe that it doesn't exist. They have tried to floor me and criticise me continually and this has been going on for a couple of months. They tried to shut me down, shut me up ... I've never experienced such hate online in my life. They accuse me of 'advocating for white paedophiles' and being a 'sinister demonic entity.'"

Placing the blame -- or at least responsibility -- on the victim is not limited to the UK. According to an August 9, 2019 report, "in the Swedish city of Uppsala ... four women were raped in as many days." Although police failed to issue descriptions of the rapists -- usually a sure sign of their origins -- they did issue warnings for women to "think how they behave," to "think ahead," and not "go out alone."

Advice against alcohol, drugs, and reckless behavior would be more compelling if it were not made under duress.

After mobs of Muslim migrants sexually assaulted as many as a thousand women on New Year's Eve 2016 in Cologne, Germany, the city's mayor, Henriette Reker, called on women to "be better prepared, especially with the Cologne carnival coming up. For this, we will publish online guidelines that these young women can read through to prepare themselves."

In Austria, after a 20-year-old woman waiting at a bus stop in Vienna was attacked, beaten and robbed by four Muslim men -- including one who "started [by] putting his hands through my hair and made it clear that in his cultural background there were hardly any blonde women" -- police responded by telling the victim to dye her hair.

"At first I was scared, but now I'm more angry than anything. After the attack they told me that women shouldn't be alone on the streets after 8pm. And they also gave me other advice, telling me I should dye my hair dark and also not dress in such a provocative way. Indirectly that means I was partly to blame for what happened to me. That is a massive insult."

In Norway, Unni Wikan, a female professor of social anthropology at the University of Oslo, insists that "Norwegian women must take their share of responsibility for these rapes," because Muslim men found their manner of dress provocative. So much for the feminist claim that women are free to dress as seductively as they want -- and woe to the man who misinterprets this, unless he is from a racial or religious minority group.

Professor Wikan's conclusion was not that Muslim men living in the West need to adjust to Western norms, but the exact opposite: "Norwegian women must realize that we live in a Multicultural society and adapt themselves to it."

Even when it comes to rape, then, if the victim is white and the rapist is not, she is no victim at all; worse, she is a "racist" and "hater" who, if anything, apparently deserves what she got and more. "Blame the victim" is back with a vengeance and gaining ground throughout the West.

Japan Announces New Stealth Fighter As US Clears Massive F-35 Sale 

Zero Hedge -

Japan Announces New Stealth Fighter As US Clears Massive F-35 Sale  Tyler Durden Mon, 07/13/2020 - 01:00

Japan announced this week it plans to produce a domestic fifth-generation fighter jet over the next decade. It also unveiled the purchase of more than 100 stealth fighters from the US, reported Forbes

The Ministry of Defense on Wednesday announced the official timeline of the supersonic F-3 fighter's first prototype should be ready in 2024. Series production will be handled by Mitsubishi Heavy Industry's factory in 2030. The first F-3s are expected to enter service by 2035.

Mitsubishi F-3 prototype 

The F-3 is expected to be one of the world's most sophisticated stealth jet fighters. The stealth fighter was designed to counter China's ambitious expansion across the South China Sea and other regions in the Pacific. 

According to CNN, citing Japan's Acquisition, Logistics and Technology Agency (ALTA), the F-3 could feature these technologies: 

  • an ability to sync missile targeting between multiple aircraft, known as integrated fire control or network shooting;
  • internal weapons bays, like those seen on American F-22 stealth jets;
  • the use of thrust-vectoring nozzles, devices that use the engine's thrust to turn more sharply.

News of Japan's first stealth fighter come as the US State Department cleared it to purchase 105 Lockheed Martin F-35 Lightning II stealth jets, worth an estimated $23.11 billion. 

The deal is one of the most massive foreign military sales approved by Washington. The goal here is to install an "F-35 friends circle" in the Asia-Pacific region to counter China. 

Constitutional Republic Versus Pure Democracy: How The US Election Process Has Changed

Zero Hedge -

Constitutional Republic Versus Pure Democracy: How The US Election Process Has Changed Tyler Durden Mon, 07/13/2020 - 00:00

Authored by Sam Jacobs via,

“I pledge allegiance to the Flag of the United States and to the Republic for which it stands, one Nation under God, indivisible, with liberty and justice for all.”

- Pledge of Allegiance, with a revision made in 1923

Conservatives are generally quick to point out that America is a republic, not a democracy. But what really is the difference, and are they even right?

Voting in America has changed considerably since the days of our founding. Back then, the government didn’t even print official ballots. Instead, you got ballots from the candidate who wanted your support. Sometimes voting took place in public, so everyone knew who you voted for. And, of course, the franchise was largely restricted to white, male property owners.

Now, anyone who turns 18 can vote. And the Democratic Party wants to increase ballot access by automatically registering anyone who gets a driver's license. Democrats even pushed for mail-in ballots for the 2020 election to make voting even easier – and more open to voter fraud. But is any of this a good thing?

Indeed, it is worth considering the transformation of the United States from a Constitutional Republic, ruled by law with the input of the people, to a total democracy, where the will of the people dominates all other discussion.

A Brief History of the Franchise in America

Open up your pocket Constitution and find the part where it says who can vote and who can’t. You’ll come up short. That’s because the Constitution delegates this right to the states. And while there are some amendments that, for example, say states can’t restrict the franchise on the basis of race, gender or being over the age of 18, otherwise there is broad leeway given in terms of who can vote and who can’t.

Before the United States existed, people were still voting and there were oftentimes even more restrictions in place. Property qualifications were most common, but there was often also a religious test involved. For example, Plymouth Colony required that voters be “orthodox in the fundamentals of religion,” which would have likely excluded even Catholics from voting. Indeed, Catholics, Quakers and Baptists were frequently forbidden from voting in early colonial elections. (Jews were forbidden from state office in Maryland until 1828, because of a state law requiring affirmation of belief in an afterlife.)

One of the first laws drafted by the new nation was a process for people to become citizens and thus be able to vote in places where citizenship was a requirement to do so – and indeed, citizenship was not a requirement in many states or colonies in the early days of America. While only “natural born” citizens can become president, naturalized citizens enjoy the full benefits of the franchise. There is still much debate as to what qualifies as a “natural born” citizen, and it’s worth noting that several recent major party presidential candidates were not born in the United States – most recently Tulsi Gabbard (who was born in American Samoa) and Ted Cruz (who was born in Canada). The Republican nominee in 2008, John McCain, was born in the Panama Canal Zone. The last of these was the most problematic, as Downes v. Bidwell ruled that unincorporated territories were explicitly not the United States.

While it is easy to ascribe this to petty religious bigotry, the reason is actually somewhat more profound: The colonists and the colonial governments that they formed considered it important to only allow the franchise to people who shared their values. Thus, those with heterodox religious beliefs were not allowed to vote on the grounds that doing so would undermine both the values and the liberty of the colony.

Similarly, property holders were meant to be the main voters for the simple reason of having skin in the game. The early colonists did not want, for example, the merchant class to have an outsized say in politics because they were not tied to the land and thus not as subject to bad decisions. A shopkeeper or importer can simply sell their stock and move on to the next colony. A freeholder, working the land with his family, has far less flexibility and, the theory goes anyway, would be making more long-term decisions about what is best for the polity.

What this meant, also, is that, in places like New Jersey, women were allowed to vote until 1807, provided that they could meet the property requirement. What changed in the early 19th century, under the expansion of the franchise under Jacksonian Democracy, was that race and gender were prized more than property rights. But free blacks still had the right to vote in some Northern states until 1838.

This too was not an arbitrary distinction. Men who had been veterans of the War of 1812, or at the very least, defended their community against Indian raids, believed that they were entitled to the franchise on the basis of that service. By 1856, free white men were allowed to vote without meeting any property requirements, but five of the states still kept tax requirements (frequently a poll tax) in place. Again, this makes sense: The force of government is largely about the spending of taxes and the use of the military.

By 1856, all property requirements had been lifted, but tax requirements remained in place in Rhode Island and Pennsylvania, until the 20th century. Rhode Island had what was basically a brief, low-level civil war over the question of property requirements known as the Dorr War. Indeed, anytime that post-Civil War disenfranchisement is discussed, it must include a discussion of the disenfranchisement of poor whites as well. The Battle of Athens is a fascinating tale of World War II veterans returning from battle and refusing to be shafted at the ballot box anymore.

Of the 15 Constitutional Amendments passed since the Civil War, four involve the franchise. The 15th Amendment bars states from restricting the franchise on the basis of race, the 19th from restrictions on the basis of gender, the 24th bars any tax requirements, and the 26th bars any age restrictions against those over the age of 18. Another Amendment, the 17th, allows for the direct election of senators, rather than having them elected by the respective state legislature – another expansion of pure democracy in America, though not an expansion of suffrage per se.

The previous method of electing senators, having them appointed by the respective state legislatures, was not an oversight on the part of the Founders. Rather, this was to give a voice to the state governments in the federal government. This was seen as an important safeguard against the overreach of federal power. Among other things, the Senate was a check on a power-hungry federal government seeking to put its tentacles into anything it could. It was a form of distributed power that was yet another attempt by the Founders to prevent consolidation and centralization of government.

It’s worth noting that Western states, starting with Wyoming in 1869, were granting women the right to vote, largely as an enticement to get them to move to the region, which was seriously devoid of women.

The concept of “one man, one vote” is the cornerstone of a more pure democracy. There were three decisions of the Earl Warren Supreme Court that definitively transformed the landscape of America into a democracy:

  • Baker v. Carr found that federal courts had jurisdiction over state redistricting efforts.

  • Wesberry v. Sanders found that U.S. House of Representatives districts – whose borders are determined by state governments – must be roughly equal in population.

  • Reynolds v. Sims found that state legislature districts must be roughly equal in population, regardless of chamber. This effectively means that states are not allowed to have institutions like the Senate – for example, a state government cannot give each county two seats in the state legislature if the counties do not have roughly the same population size.

Residency requirements are mostly illegal in the United States, with one-year requirements struck down in Dunn v. BlumsteinThe longest residency requirement that states are allowed to have now is 50 days.

What’s So Wrong With Democracy?

All of this raises the question of what is wrong with democracy, as opposed to a Constitutional Republic? It’s a cliche that democracy is the right of 51 percent of the population to take away the toothbrushes of the other 49. The Constitution provides protections against the tyranny of the majority and one of those protections is against pure democracy.

Indeed, the Senate and Electoral College, two of the last vestiges of the anti-democratic mood that penetrated the country during Revolutionary times, provide protections to rural states to this day. Without either of these, or with a Senate converted into a proportional representation body, as some have suggested, rural states are effectively political serfs for the larger urban centers.

The counter argument presented to this is that “land doesn’t vote,” which is fair enough, but again: America was not conceived as a pure democracy where everyone had an equal say in everything. There are many layers to the onion, many tiers that prevent one group of the population from having too much say over the others. The Electoral College and the Senate allow rural states to have a voice in how the country is run, rather than being totally ruled over by people in urban centers who don’t own guns, can’t grow food, and have never met their neighbors.

It’s not a coincidence that Electoral College abolition is a particular ax ground by the left. The abolition of the Electoral College would allow for sweeping changes in American public policy championed by those currently on the leftward edge of the political spectrum. Do you want to live in a country where, for example, the voters of smaller states like Nevada, New Hampshire and Montana are drowned out by a handful of cities on the coasts? What of medium-sized states with a number of post-industrial cities with their own concerns, just as valid as those of rural America, but entirely separate from the centers of financial, cultural and academic power?

There’s also the small matter of the role that the media plays in shaping public opinion, as well as the role that public works projects and other government spending play in essentially buying votes. Ostensibly “undemocratic” institutions act as brakes on the manipulation of public opinion. Indeed, the Senate was specifically designed as a deliberative body that would “cool the passions” of the masses represented in the lower house, the House of Representatives.

The Primary System as a Laboratory of Democracy

The primary process for nominating presidential candidates represents an excellent example of how pure democracy has produced poorer results than a more managed and directed one.

Most Americans, particularly younger ones, don’t know that prior to the 1970s, the primary contests didn’t mean much. Rather, it was the state party conventions which held greater weight and these were largely managed by party bosses rather than directly influenced by voters. It’s not that this system of backroom wheeling and dealing never produced a total dud or stifled genuine needs for reform – of course it did. However, looking at the roster of candidates produced by this process (i.e., two Roosevelts, a Coolidge, an Eisenhower and a Kennedy), it’s hard to argue with the results.

What was entirely lacking was the current primary process that we have in the United States, which still boasts a very low overall turnout and lasts from approximately the fourth quarter of the year before the election sometimes all the way up until the convention. All told, the Democratic Primary cycle of 2020 had 12 debates planned, with 11 completed and the 12th not happening simply because Joe Biden said he wasn’t going to show up.

The primaries are dominated by highly motivated and often highly ideological voters. This means that a number of highly polarizing figures have made it through the modern primary process, including Barry Goldwater (1964, so a little early) and George McGovern, but also a ton of people who the party in question loved but Americans just plain didn’t like (examples of this being Walter MondaleMichael Dukakis and Mitt Romney). This is because party bosses were much more concerned about someone who could win – and all the patronage that flowed from that – rather than someone who shared their ideological picadillos.

President Eisenhower is perhaps the gold standard of a president annointed by party bosses. Senator Robert Taft, the leading light of the ideologically conservative faction of the party, lost to the choice of the party bosses, General Dwight D. Eisenhower. While historical counterfactuals are hard to tease out, there’s little reason to believe that Senator Taft could have won a general election against President Truman or eventual nominee Senator Adlai Stevenson. This is because, while there was a big thirst to roll back the whole of the New Deal among the hardcore Republican base, there was virtually no taste for it in the American mainstream, which either liked the programs or had learned to live with them. Indeed, it is largely believed that the delegates themselves might have preferred Taft to Eisenhower – but they preferred Eisenhower to losing.

It’s worth noting that in the last two Democratic primaries, party bosses have leaned heavily on the scale against insurgent candidate Bernie Sanders in favor of, respectively, Hillary Clinton and Joe Biden. In contrast, Donald Trump was able to coast to the nomination in 2016 without any significant organized chicanery on the part of the party bosses.

But it’s not just political parties who lose when American presidential candidates are the result of a process catering to a very small niche of the electorate. America loses also, because we are incapable of having substantive, issue-driven debates that address real problems of the American people. Instead, we end up focusing much more on the personalities and cultural differences that divide the two parties – to the detriment of the entire nation.

Election Fraud in the United States

There is dispute as to whether or not there is widespread election fraud in the United States. However, there are three presidential elections that merit a brief discussion in our exploration of the franchise in America.

The 1876 Election

The election of 1876 was so controversial and potentially fraud-ridden that it was the subject of a Congressional Electoral Commission in response to a major Constitutional crisis. There were 20 electoral votes outstanding, with the Democratic candidate one shy of winning, with the 20 outstanding electoral votes all coming from states with potentially massive voter fraud. The Commission was convened by the Democratic House and the Republican Senate, with five members from each body and five from the Supreme Court of the United States.

One of the tricks in question is actually an exploit of pure democracy: In those days, there were no official ballots. Ballots or “tickets” were generally printed up by political parties or their partisans and distributed to the voters. Southern Democrats used ballots with Abraham Lincoln on them in an attempt to fool illiterate voters into voting for their slate.

"Tilden or Blood!" was a slogan at the time and Democratic candidate Samuel Tilden’s supporters declared that they had 100,000 men ready to march on the capital and install him as president if need be. A party-line vote of the Electoral Commission gave all the votes to Republican Rutherford B. Hayes, making him president. However, as a concession, the South got the end of Reconstruction and the withdrawal of all remaining federal troops.

Democrats remained unsatisfied, with the House of Representatives going as far to pass a non-binding resolution declaring Tilden the winner. The Electoral Count Act of 1887 made the state legislature the definitive arbiter of who counted as an elector, which was the subject of Bush v. Gore, another controversial election over 100 years later.

The 1960 Election

The 1960 election was disputed as well, but not formally and officially like in 1876. The claim is this: That the Democratic Party used friendly city machines in Dallas and Illinois to win states for John F. Kennedy that he otherwise would not have won – and that would have delivered the presidency to Republican Richard Nixon.

This is not a marginal theory. Senators such as Everett Dirksen and Barry Goldwater have stated that they believe there was fraud in the election. All told, Republicans in 11 states sought to have the vote overturned, including in Illinois and Texas. A special prosecutor charged 650 people with voter fraud, but there were no convictions.

It is unknown to what degree Nixon felt he had been cheated, but he never seriously pursued it, believing it would divide the nation and tarnish the office of the presidency.

The 2000 Election

Finally, there is the 2000 election, where chicanery is alleged to have taken place not at the ballot box, but at the Supreme Court. It was the Supreme Court who stopped the recount under the Equal Protection Clause because they did not approve of how the recount was being carried out. Further, a new standard could not be agreed upon because of the time frame – electors had to be selected by December 12.

This allowed a previous vote count certified by Secretary of State Katherine Harris (a Republican and Bush family ally) to stand.

Here the question was not about whether or not someone was ballot-box stuffing. No one has seriously or credibly proposed this. What was in question is how the votes were counted. This calls to mind an apocryphal quote often attributed to Soviet dictator Joseph Stalin:

“The people who cast the votes decide nothing. The people who count the votes decide everything."

Several have written that if a statewide recount were done, rather than a county-based one, that it was Vice President Al Gore who would have won. But the question here is what was the best way to count the votes. And unsurprisingly, partisans of both parties prefer the method resulting in their candidate winning.

Beyond the Theory: Why Pure Democracy Is Bad In Its Execution

Once the notion of a universal franchise enters the public vernacular, there is then no limit on who should be included. Andrew Yang became the first major party presidential candidate to endorse lowering the voting age to 16, but others have endorsed removing age requirements for voting entirely. Indeed, there is an entire current of thought that says that citizenship shouldn’t be a requirement (it isn’t in some municipal elections) or even that the entire world should be allowed a say in who becomes the President of the United States.

While these might all sound like ridiculous proposals – and we agree that they are – they are the thin edge of the wedge, the tip of the spear that will eventually introduce this kind of discourse into the political mainstream and perhaps much sooner than anyone thinks. If the only criteria for who gets to vote is that you are “affected by government policy” or some such and thus entitled to a say, why not let the entire populations of France and Bangladesh and China have a vote? There is a logic to universal suffrage that does not end with America’s adult population or even at its borders.

Consider the fight against voter ID laws in the United States. When one accepts that voting is a universal right, it makes perfect sense that having or not having an ID shouldn’t be an impediment to exercising that right. A lack of voter ID laws has been tied to voter fraud. But perhaps more disturbing is the growing practice of ballot harvesting.

Ballot Harvesting

The Democratic Party likes ballot harvesting so much that they tried to insert it into the stimulus and relief bill targeted at people suffering from the effects of the Wuhan Coronavirus outbreak of 2020. Put simply, this is when paper ballots are collected by intermediaries between the state and the voter, then delivered en masse. If this sounds like it’s a ripe place for voter fraud to happen, that’s because it is. Ballot harvesting played a role in the do-over of the 2019 North Carolina election, where Democrats were, perhaps for the first time ever, deeply concerned with the specter of voter fraud.

Orange County, California, was home to a whopping quarter million ballots delivered on Election Day alone. In practice, ballot harvesters go around collecting ballots for people who vote for the candidate they want to win. In the case of North Carolina, there were allegations that ballots had been discarded because people voted for the “wrong” candidate.

In the wake of the Wuhan Coronavirus outbreak, there has been a push – mostly from Democrats – to offer mail-in ballots. These are different from absentee ballots, which are sent out to specific voters on a by-request basis. Compare this with the push for mass mail-in voting: This is just printing up a ton of ballots, sending them out and letting everyone mail them in. There are few, if any, protections in place for preventing people from voting twice, preventing non-registered voters from voting, or preventing illegal aliens from voting. For every person who votes that shouldn’t, a legal voter has their vote cancelled out or nullified.

There’s not much of a way to verify and track this process to ensure that everyone who votes is having their vote counted. But again, it is very much in keeping with the logic of “one man, one vote.” Those who espouse the ideology of a pure democracy are always looking for ways to make it easier for people to vote.

Perhaps, not coincidentally, making it easier for people to vote also opens up the door to electoral fraud.

And this is really the crux of the matter when it comes down to pure democracy: The transition to a purer democracy has coincided with greater influence among unofficial kingmakers who control the process while also consolidating greater power in Washington, D.C. In practice, this has meant favoring a bureaucratic elite who effectively act as unelected legislators. Most of the regulations put in place by the alphabet soup of federal agencies aren’t there by statute, but are in fact part of powers delegated to them by the legislature who have abdicated their legislative authority.

What’s more, these unofficial kingmakers are often shadowy figures whose names (to say nothing of their intentions) are mostly unknown. These are not the traditional party bosses who were, in a sense, beholden to their people in the form of having to provide patronage and pork and other tangible results. Rather the new kingmakers of our pure democracy are the mass media, party activists and others with no skin in the game and little in the way of public accountability. Their angle is one entirely of self-interest and not to the broader body politic, to say nothing of future generations.

China Vehicles Sales Expected To Plunge 10-20% This Year

Zero Hedge -

China Vehicles Sales Expected To Plunge 10-20% This Year Tyler Durden Sun, 07/12/2020 - 23:30

Even the good news for the world's auto market seems to be bad news right now. 

Day ago, when detailing China's passenger auto sales plunge for the month of June, we noted that the China Association of Automobile Manufacturers has been predicting for the last few months that auto sales would fall between 15% and 25% for the year.

Those predictions have now been adjusted slightly upward, to a drop of 10% to 20%, despite the fact that China's auto market still appears to be leading the global market into several more years of deep recession. Recall, the auto market was already facing headwinds and China's market specifically was already contracting for several years before the pandemic. 

And while passenger vehicles fell 6.5% in June, as we noted, total vehicle sales rose 11.6% for the month to 2.3 million units, likely helping lead to the revised predictions for the year. The driving force behind total vehicles rising was a 63% surge in commercial vehicles, which also saw a 8.6% rise in the first half of 2020, likely due to vehicles being used to manage the spread of the virus in the country. 

Recall, days ago Beijing announced that the country had sold 1.68 million passenger vehicle units in JuneThis marks a 6.5% year over year drop despite May's dead cat bounce, where numbers rose 1.9% from the year prior, mostly due to easy comps. The association called the number proof of a "continuing recovery" in the passenger car market, according to Reuters

As was the case in May, luxury automakers outpaced the market while sales of NEV vehicles reached 85,600. Tesla accounted for 23% of the pure battery EV sector in the month and CPCA Secretary-General Cui Dongshu said he expects EV sales to outperform in the second half of 2020. 


These numbers won't come as too big of a surprise for Zero Hedge readers. We noted days ago that sales numbers coming out of June looked as though it would be another slumping month for China. Just days ago, the CPCA said that retail car sales were down 37% YOY for the 4th week of June.

Average daily sales were down to 51,627 during June 22-27, which marked a 6% sequential fall from the same week in May, indicating little respite or improvement from the pressure of the coronavirus pandemic on the industry. PCA blamed "seasonal factors" for the drop, which is a funny way to say "Chinese-borne virus ravaging the entire planet". 

We said days ago:

"This also paints an ugly picture for June's new car sales number, since we reported about 3 weeks ago that the first week in June was also off to an ugly start. In that article, we noted that retail car sales fell 10% year over year - but more importantly 20% from the same period in May - in the first week of June."

This news comes despite better than expected results in May, where sales showed a 12% increase year over year. 

According to The Detroit Bureau, premium and luxury passenger car retail sales led the charge in May, rising 28% last month compared with year-ago results. Luxury vehicles maintained their strength in June.

The Chinese government continues to try to spur demand with new policies aimed at enticing buyers.... but as we showed yesterday, it's not working.

Recall, we have recently noted that U.S. auto manufacturers are also teeing up sizeable incentives to get buyers back into showrooms. Europe is following suit, with Volkswagen starting a sales initiative to revive demand, including improved leasing and financing terms. 

Harper's "Bizarre" Letter & The Woke Revolution

Zero Hedge -

Harper's "Bizarre" Letter & The Woke Revolution Tyler Durden Sun, 07/12/2020 - 23:00

Authored by Paul Craig Roberts,

150 prominent intellectuals and Ivy League academics of leftish persuasion have signed a letter in Harper’s protesting the breakdown in civilized debate and imposition of ideological conformity.

The signatories made the obligatory bow to denouncing Trump as “a real threat to democracy” and called for “greater equality and inclusion across our society.”

But this wasn’t enough to save them from denunciation for stating these truthful facts:

The free exchange of information and ideas, the lifeblood of a liberal society, is daily becoming more constricted. While we have come to expect this on the radical right, censoriousness is also spreading more widely in our culture: an intolerance of opposing views, a vogue for public shaming and ostracism, and the tendency to dissolve complex policy issues in a blinding moral certainty. We uphold the value of robust and even caustic counter-speech from all quarters. But it is now all too common to hear calls for swift and severe retribution in response to perceived transgressions of speech and thought.

More troubling still, institutional leaders, in a spirit of panicked damage control, are delivering hasty and disproportionate punishments instead of considered reforms. Editors are fired for running controversial pieces; books are withdrawn for alleged inauthenticity; journalists are barred from writing on certain topics; professors are investigated for quoting works of literature in class; a researcher is fired for circulating a peer-reviewed academic study; and the heads of organizations are ousted for what are sometimes just clumsy mistakes.

Whatever the arguments around each particular incident, the result has been to steadily narrow the boundaries of what can be said without the threat of reprisal. We are already paying the price in greater risk aversion among writers, artists, and journalists who fear for their livelihoods if they depart from the consensus, or even lack sufficient zeal in agreement.”

The signatories to the letter do not understand that time has passed them by. Free speech is no longer a value. Free speach is an ally of oppression because it permits charges against Western civilization and the white racist oppressors to be answered, and facts are not welcome. The purpose of the woke revolution is to overthrow a liberal society and impose conformity with wokeness in its place. Whiteness has been declared evil. There is nothing to debate.

The signatories do not understand that today there is only one side. In place of debate there is denunciation, the purpose of which is to impose ideological conformity. It is pointless to search for truth when truth has been revealed: Western civilization and all its works are a white racist construct and must be destroyed. There is nothing to debate.

To make clear that in these revolutionary times not even prominent people of accomplishment such as Noam Chomsky are entitled to a voice different from woke-imposed conformity, the letter was answered by a condescending statement signed by a long list of woke journalists of no distinction or achievement, people no one has ever heard of.

The 150 prominent defenders of free speech were simply dismissed as no longer relevant.

Noam Chomsky and the other prominent signatories were dismissed as irrelevant just as the prominent historians were who took exception to the New York Times 1619 project, a packet of lies and anti-white propaganda. The famous historians found that they weren’t relevant. The New York Times has an agenda that is independent of the facts.

The message is clear: shutup “white, wealthy” people and you also Thomas Chatterton Williams, a black person with a white name. Your voices of oppression have been cancelled.

The “oppressed” and “marginalized” voices of woke revolutionaries, who have imposed tyranny in universities, the work place, and via social media, are the ones that now control explanations. No one is permitted to disagree with them.

Lining up on the woke side are CNN, New York Times, Los Angeles Times, Slate, and other presstitute organizations desperately trying to remain relevant. Everyone of these institutions quickly took the side of the woke revolution against facts and free speech.

The revolution is over unless the guillotine is next. Academic freedom no longer exists. Free speech no longer exists. The media is a propaganda ministry. Without free speech there can be no answer to denunciation. White people are guilty. Period.

Graham Asks Mueller To Testify Before Senate After WaPo Editorial Slamming Stone Commutation

Zero Hedge -

Graham Asks Mueller To Testify Before Senate After WaPo Editorial Slamming Stone Commutation Tyler Durden Sun, 07/12/2020 - 22:30

From the minute President Trump handed down his commutation of Roger Stone's sentence Friday just days before the longtime Trump ally was set to go to prison, it was only a matter of time before the now-retired Robert Mueller, the infamously reticent former special prosecutor, weighed in to assure the world that Trump is once again 'abusing' the powers of his office, and thereby threatening the democratic controls and values at the very core of our system. Prosecutors who worked on Mueller's team have been popping up in the press more frequently. One even testified to Congress about DoJ interference and alleged political pressure in the Stone case.

The former FBI chief broke his silence last night, when the Washington Post published a Mueller-penned op-ed hitting all the expected notes. Reminding the public - well, more like implying - that Stone knows all the secrets of the Russia-Wikileaks-Trump connection. The DNC hack, Hillary's missing emails, all those twitter bots - all of these victories surely helped sway voters in Trump's favor, Mueller argues.

And without Russia's tacit support, Mueller argues, they would never have happened. But was Stone really so integral to these operations? His reputation as a fabricator and an exaggerator were well covered during the case.

We now have a detailed picture of Russia’s interference in the 2016 presidential election. The special counsel’s office identified two principal operations directed at our election: hacking and dumping Clinton campaign emails, and an online social media campaign to disparage the Democratic candidate. We also identified numerous links between the Russian government and Trump campaign personnel — Stone among them. We did not establish that members of the Trump campaign conspired with the Russian government in its activities. The investigation did, however, establish that the Russian government perceived it would benefit from a Trump presidency and worked to secure that outcome. It also established that the campaign expected it would benefit electorally from information stolen and released through Russian efforts.

Uncovering and tracing Russian outreach and interference activities was a complex task. The investigation to understand these activities took two years and substantial effort. Based on our work, eight individuals pleaded guilty or were convicted at trial, and more than two dozen Russian individuals and entities, including senior Russian intelligence officers, were charged with federal crimes.

Congress also investigated and sought information from Stone. A jury later determined he lied repeatedly to members of Congress. He lied about the identity of his intermediary to WikiLeaks. He lied about the existence of written communications with his intermediary. He lied by denying he had communicated with the Trump campaign about the timing of WikiLeaks’ releases. He in fact updated senior campaign officials repeatedly about WikiLeaks. And he tampered with a witness, imploring him to stonewall Congress.

Stone was found guilty by a jury back in November of all seven charges that he faced. He was charged with lying to Congress, witness tampering and obstruction. At the time, the press reported that Stone could face up to 50 years in prison. He was eventually sentenced to between 3 and four years after being convicted on all 7 counts he faced, including the witness tampering charge, which carried a maximum penalty of 20 years, while the maximum for each of the other six charges is five years. Stones convictions will stand, and he will remain a felon.

Mueller also insisted he made every decision based "solely on the facts", though we wonder how tipping off CNN to the military-style raid that brought Stone into federal custody relates to Mueller's "by the book" credo.

Russian efforts to interfere in our political system, and the essential question of whether those efforts involved the Trump campaign, required investigation. In that investigation, it was critical for us (and, before us, the FBI) to obtain full and accurate information. Likewise, it was critical for Congress to obtain accurate information from its witnesses. When a subject lies to investigators, it strikes at the core of the government’s efforts to find the truth and hold wrongdoers accountable. It may ultimately impede those efforts.

We made every decision in Stone’s case, as in all our cases, based solely on the facts and the law and in accordance with the rule of law. The women and men who conducted these investigations and prosecutions acted with the highest integrity. Claims to the contrary are false.

Unsurprisingly, Mueller's latest communique (expect the WaPo op-ed, like the Mueller report before it, to be transformed into its own book - then who knows? Maybe a maybe motion picture based on the limited communications of Robert Swan Mueller III?) triggered a wave of hand-wringing in Washington, including among some Republicans, who have groused about Trump's decision to intercede on behalf of his one-time advisor (and, reportedly, friend). Despite being a firm Trump backer and friend, Graham has made noises about joining with Democrats and granting permission to bring Mueller in to testify before the Senate Judiciary Committee (nearly a year ago, Mueller participated in a marathon series of hearings before the House Intelligence Committee and House Judiciary).

Most Republicans have generally opposed another round of Mueller testimony, But Graham is facing a competitive election bid, and grandstanding on this topic allows him to both feign bipartisan cooperation while upping the pressure for a Congressional investigation into the origins of the 'Witch Hunt' which would presumably target Mueller, Comey and the rest of the FBI/DoJ leadership who were caught up in it.

Graham delivered the statement in a series of tweets.

Of course, most observers agree that they would be shocked if Mueller accepted. Though, perhaps with Mueller's input, Graham will finally be able to cobble together those 'witch hunt' subpoenas he's been promising.'

Or maybe not - but either way, we suspect the issue will stay 'open' until at least Nov. 4.

American Collusion: Weaponizing Media, Big-Tech, & Government

Zero Hedge -

American Collusion: Weaponizing Media, Big-Tech, & Government Tyler Durden Sun, 07/12/2020 - 22:00

Authored by James Grundvig via,

The planners quickly deployed the "insurance policy" after Donald J. Trump won the presidential election in 2016. Like an annuity, the payments to the policyholders would be small and steady at first, then lead, they hoped, to a much bigger payoff: the removal of President Trump from office.

At least that was the plan. Three and a half years later, the big day never arrived.

From the unsubstantiated Steele dossier, the discredited Russiagate investigation, to the FISA court abuses, the potholed-strewn road to impeachment circled back to the Mueller Report, which was supposed to clinch the deal. Without a smoking gun on the president, the Mueller team reached and then overreached, picking off a few Trump confidants, in an attempt to tighten the noose. The results were half-baked. That's usually what the FBI perjury trap produces. Plea deals; no evidence of collusion.

Sure, Robert Mueller collected a few big scalps in Gen. Michael Flynn and Roger Stone. But now that Flynn's indictment unraveled, the insurance claim has turned into a liability for the policyholders. Trump is still president. And now the investigation into collusion has moved in the other direction focusing on the planners of the insurance policy.

Going largely unnoticed, the Trump campaign turned social media into a clear advantage in 2016. Twitter emerged as the platform of choice, empowering Trump to communicate directly to the American people without filter, media biased, or interpretation, and with greater reach than all the network news outlets combined.

In late October 2016, Jason Sullivan – then chief Twitter strategist for Roger Stone, used a data-mining tool he created, Power10, to peer into the public sentiment of the election. Outgunning the antiquated polling surveys that got it so wrong, Sullivan witnessed candidate Hilary Clinton catch up to Trump two weeks before the election in real time. He then saw, a few days later, how FBI Director James Comey gave Clinton a temporary boost that helped her overtake Trump when he announced the bureau would reopen the investigation into her email scandal.

Since that time, Jason Sullivan hasn't told his story about what happened behind the scenes leading to the biggest presidential upset election in more than a century. He wasn't able to. That's because the FBI swept Sullivan up in a dawn raid in early 2018, after intimidating other members of his family. The FBI hauled him off to testify under oath of perjury before the Mueller team.

Surviving the FBI interrogation, Jason Sullivan retreated from the social media spotlight. That was until this June when he saw the establishment's coordinated effort to tilt the 2020 election against President Trump, again.

The COVID-19 outbreak and subsequent lockdowns gave blue states cover for an all mail-in paper election. The Black Lives Matter (BLM) and Antifa protests, looting and riots further shut down cities across the United States. Some posed the theory that funds donated to BLM flow through ActBlue, another political front company, and into the DNC.

The biggest lever in tilting the election this year, however, emerges with the collusion between the mainstream media and the tech giants as de facto gatekeepers of information. They wield tremendous power to determine what can and cannot be said, seen, shared and posted. They include Twitter, Facebook, Google and YouTube, among others.

All this boils down to one objective: Censorship.

Surviving the Mueller interrogation, Sullivan developed a strong opinion on both censorship and what transpired during the last presidential election.

"On November 8th, 2016, all the laws of gravity were completely defied, and the legitimacy of every last one of the traditional political polls were utterly destroyed and proven beyond a shadow of a doubt to be completely inaccurate in what went down as the single biggest political upset in modern-day history," Sullivan said.

"The DNC, Hilary Clinton, the Obama administration, all the Democrats, all the leading newspapers and publications, the establishment Republicans and the RINOs were ALL completely caught flat-footed! If any one of the traditional polls were remotely accurate, candidate Trump did not stand a snowball's chance in hell of winning the presidential election."

Sullivan concluded his first salvo, stating, "There is no one today who will argue that Donald Trump won the presidency because of social media … not even President Trump. But social media is what allowed candidate Donald Trump to completely circumvent the mainstream media and get his message out directly to the people."

On Twitter shadow-banning, Sullivan observed the "systemized censorship that if Twitter staff members didn't like a user's tweet, they would zap the user's account, for a period of time. Meaning, everything the user would post would not show up on any of his followers news feeds. It's like getting hit with a digital stun gun."

Another deceptive tool Twitter deploys includes "removing the user's Twitter handle from its search function," Sullivan explained. "The search wouldn't show up or populate in the results of the Twitter search bar. In short, the Twitter handle would not be found by anyone attempting to visit the account."

Today, Twitter has been warning (President Trump twice), suspending (Candace Owens) and deleting accounts at a pace that's picking up speed. Maybe this is due to Twitter's fluid policies on "hate speech" and other rules that provide gray area to surgically remove some content, while allow other more insidious content to remain.

At the Sept. 5, 2018, U.S. congressional testimony, Twitter CEO Jack Dorsey claimed, in his opening statement: "Twitter is used as a global town square, where people from around the world come together in an open and free exchange of ideas."

Nice digital utopian vision. What if the "town square" is closed off to some, with groups of other voices silenced? Then Twitter no longer is a forum for the "free exchange of ideas," but a gatekeeper with clear editorial controls.

What's interesting is Sullivan knows that Jack Dorsey and Twitter are censoring more people today than ever before. And he can prove it.

Stifling Free Speech

What worries Sullivan are the other candidates in this election cycle. "Think about it," he said. "Twitter is and has been systematically shadow-banning federal level senatorial and congressional candidates across the country? Twitter could prevent them from campaigning effectively by muting their voices from reaching potential voters."

Jason Sullivan isn't alone in his concern or his quest to expose the censorship being carried out by social media platforms. Bill Binney, the former NSA technical director of the World Geopolitical and Military Analysis Reporting Group, has joined Sullivan in setting out to reestablish a level playing field for all candidates.

Twice, Binney submitted sworn affidavits to the court where the Mueller team tried Gen. Flynn and Roger Stone. In both cases, "The judge wouldn't allow my testimony in court," Binney wrote in an email.

On Russiagate, Binney stated the three things that bother him about the "insurance policy":

A. "The lack of IC agencies (like NSA, CIA, FBI) looking at forensics of WikiLeaks and Guccifer 2.0 data, or even stating what they had or did not have in their collection."

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B. "Mueller, Rosenstein, the House and Senate committees' failure to listen to our VIPS testimony."

C. "The refusal of judges in the Flynn and Stone cases to allow our Russiagate testimony in court."

Binney added that the reason why mainstream media and their proxies continue to push Russiagate in July 2020, despite it being exposed, "would require them to admit that they have been pushing an outright fraud for three years. That's too big a crow for them to eat."

The insurance policy started as "a diversion to make it look like the Russians interfered and to set the basis to justify the Democratic effort to impeach President Trump," Binney added. "This effort and follow-on ones have failed as they too were obvious manufactured frauds."

Binney explained the CIA's software tool HammerDrill. "My understanding is that it uses NSA and other collection equipment to capture data plus some hacking tools to exfiltrate data." In the case of domestic spying, "HammerDrill was used to keep the rest of government not knowing what the CIA and John Brennan were doing. If they used the NSA data, they would have been recorded; same for FBI."

Jason Sullivan recalled, "President Trump has been wise to the censorship since it began. We know, because we have personally been feeding evidence to the people instrumental to the Trump administration ever since he won the nomination at the Republican National Convention in July 2016."

On what Twitter is currently doing, Sullivan won't discuss the more advanced shadow-banning practices and methodologies, "because there is an ongoing investigation by this administration, by We the People, by reporters and investigators at-large, and by an army digital soldiers," he said. "But I will say, we are hot onto social media's misdeeds and nefarious practices, for which the president is keen. POTUS has recently set the stage by his latest executive order on 'Preventing Online Censorship.'"

Bill Binney has summed up the past three years in a fractious America, stating, "Sad to say, but this is the most serious attack on our Republic since the Civil War."

Jason Sullivan agrees with Binney. Together they make a formidable team to challenge Twitter and the other digital gatekeepers in the free flow of ideas.

Authors Of Study Finding No Bias In Police Killings Ask For Retraction

Zero Hedge -

Authors Of Study Finding No Bias In Police Killings Ask For Retraction Tyler Durden Sun, 07/12/2020 - 21:00

Submitted by by Sovereign Man

The authors of a study which found no racial bias in police shootings asked for the study to be retracted.  The main findings were:

“1) As the proportion of Black or Hispanic officers in a [fatal officer-involved shootings] increases, a person shot is more likely to be Black or Hispanic than White, a disparity explained by county demographics; 2) race-specific county-level violent crime strongly predicts the race of the civilian shot…”

But the authors don’t want the study to be retracted because their findings were wrong. The data is sound.

Rather, the authors of the study now feel that it is being used improperly in the debate about police killings. They don’t like that people are using their study to discredit the Black Lives Matter narrative.

What this means:

A professor who helped fund parts of the study was the victim of the Twitter mob a couple weeks ago. We talked about how Stephen Hsu was fired from his position as Vice President of Research and Innovation at Michigan State University, essentially for supporting academic freedom.

We are all for police reform.

We’ve discussed many of the needed reforms: ending qualified immunity, reigning in police unions, ending civil asset forfeiture, ending the drug war, and so on. But we’ve always been skeptical of the argument that the way police behave is all about race.

And we are especially skeptical of movements like Black Lives Matter, which goes way beyond racial injustice and promotes a Marxist agenda.

Getting power out of government hands is the best solution, especially if racial prejudice is built into the system.

* * *

Bill in Senate would reform Civil Asset Forfeiture

What happened:

Senator Rand Paul and others have introduced a bill called the Fifth Amendment Integrity Restoration, or FAIR Act. If passed, the law would put due process back into civil asset forfeiture.

Civil asset forfeiture is when authorities take property suspected of being involved with or obtained through criminal activities, without convicting or even charging the owner with a crime.

The legislation requires a court date in front of a judge within two weeks from a seizure. Right now, victims of forfeiture are often forced into an administrative appeal with whatever department seized the property, not an actual court.

The bill also would require the property to have been knowingly involved in criminal activity, as opposed to incidentally. In the past, vehicle owners have had their cars seized when someone else was driving, sometimes without permission.

The bill would also end equitable sharing where state and local police keep 80% of property seized for federal agencies-- an obvious conflict of interest.

The bill also gives the owner of the seized property the right to counsel, guaranteed by the Sixth Amendment.

What this means:

Reading what the bill changes, most people would be shocked to hear that these are standard practices in law enforcement right now.

Many of these practices with civil asset forfeiture so obviously violate due process and the rights of the accused. It’s unbelievable they have gone on so long.

There are a lot of people demanding criminal justice reform right now.

But somehow it seems like the bills introduced by libertarian-leaning politicians like Sen. Rand Paul and Rep. Justin Amash (ending qualified immunity) aren’t getting much traction...

* * *

France bans a bike commercial for discrediting auto industry

What happened:

A Dutch commercial shows a black vehicle, and in the reflection, all the negative things associated with driving.

You see pollution, car crashes, traffic jams and so on. Eventually the car melts away into oil, and a bicycle is revealed. The video is an advertisement for a Dutch bicycle company.

But France’s advertising regulators have banned the commercial from showing in France.

They say it creates a “climate of anxiety,” and attempts to “discredit the automobile sector.”

What this means:

From the same country that brought you a ban on using meat and dairy terms to advertise vegetarian/ vegan alternatives...

This is a reminder that government powers to regulate always turn into cronyism.

The meat industry is more entrenched and powerful than the veggie-burger industry. So they get the government on their side to club the competitors.

Same goes with the automobile industry-- more powerful than the bike industry.

Anytime you allow the government the power to regulate speech, this sort of thing is inevitable

Cost-Cutting And COVID-19 Could Catalyze Election Day Chaos

Zero Hedge -

Cost-Cutting And COVID-19 Could Catalyze Election Day Chaos Tyler Durden Sun, 07/12/2020 - 20:30

State and local governments are already setting up for what is likely going to be one of the most difficult elections to manage in decades due to the pandemic. Compounding the issues that come with the coronavirus is the fact that many states and municipalities are also facing budget cuts, suffocating their ability to make the changes necessary to keep voters safe in November.

States remain on different footing with how they want to approach November. For example, in Ohio, election officials want to equip polling places with safety measures to constrain the virus. In Georgia, officials are considering making absentee ballots easier to get.

Regardless, across the nation, it's a situation that could lead to "chaos" in November, Reuters reports.

Tina Barton, the city clerk and chief elections official in Rochester Hills, Michigan, a tightly contested election area, said: “What kind of price tag are you going to put on the integrity of the election process and the safety of those who work it and those who vote? Those are the things at risk.”

At the very least, elections will simply cost more this year: face masks, face shields and other virus-proofing equipment will need to be purchased in addition to a normal election budget. There are also costs associated with a larger volume of more mail-in ballots. Across the U.S., election officials are warning that they don't have what they need to do the job properly. 

Myrna Perez, director of the elections program at New York University’s Brennan Center for Justice, says there could be “widespread disenfranchisement,” as a result. “We run the risk of people really questioning the legitimacy of the election,” she commented.

Congress has already approved $400 million in federal funding to help states hold the elections as part of the CARES Act. But that is 10% of the $4 billion that experts believe will be necessary to hold "safe and fair" elections this year. Postage alone for mail-in ballots will cost almost $600 million. 

An aid bill passed in May in the House included $3.6 billion in new election funding, but the bill has no chance of passing the Senate as Republicans have taken exception with mail-in voting rules changes that were included in the bill. Republicans remain worried that mail-in voting will encourage fraud and will favor the Democrats. 

Hans von Spakovsky, a former Republican member of the Federal Elections Commission, thinks the answer is simply keeping polling places safe instead of switching to mail-in voting: “I’m not saying that this is easy but it is not going to be as difficult as all these people are predicting.”

Amy Klobuchar, the senior Democrat on the Senate rules committee that oversees federal grants for elections, says that money that is supposed to be used for election security is now being used for cleaning supplies: “That’s not a one-or-the-other choice. We need voters to be safe and we need our elections to be secure.”

Still some state and local governments are trying their best to make changes despite a combined $360 billion revenue loss over the next 36 months due to the Covid outbreak. According to Reuters:

  • Georgia sent absentee ballot requests to all voters ahead of its June 9 elections, which officials cited in local media estimated would cost at least $5 million
  • Philadelphia is faced with an election budget of $12.3 million, instead of $22.5 million and has already spent more than its expected CARES grant holding during its June 2 primary.
  • Ohio’s Lucas County has simply ruled out buying safety equipment like Plexiglas sneeze guards for more than 300 polling stations that the county hopes to operate.

Finally, the budget cuts mean that election results may be in much later in the evening than we are currently used to. In places like Michigan, where election boards need machines to count ballots faster, there remains budget shortfalls in the tens of millions. Secretary of State Jocelyn Benson concluded: “This means ... that election results may not be available until long after election night.”

Sunday Night Futures

Calculated Risk -

Schedule for Week of July 12, 2020

• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 20 and DOW futures are up 199 (fair value).

Oil prices were down over the last week with WTI futures at $40.25 per barrel and Brent at $42.93 barrel.  A year ago, WTI was at $57, and Brent was at $64 - so WTI oil prices are down about 30% year-over-year.

Here is a graph from for nationwide gasoline prices. Nationally prices are at $2.19 per gallon. A year ago prices were at $2.79 per gallon, so gasoline prices are down $0.60 per gallon year-over-year.

More Media-Hyped Hysteria? Fearmongering NBC Doctor Who 'Battled COVID' Admits Never Had Virus

Zero Hedge -

More Media-Hyped Hysteria? Fearmongering NBC Doctor Who 'Battled COVID' Admits Never Had Virus Tyler Durden Sun, 07/12/2020 - 18:30

Make no mistake about it: no matter what your take on the coronavirus pandemic, most people seem to understand that the media is likely making the situation out to be far more dire than it is. And why wouldn't they - most media outlets spend 24 hours a day, 7 days a week of live coverage looking for anything possible to undermine the Trump administration.

As it relates to coronavirus, the media rarely ever offers details when it touts awful sounding things like the "death count". MSM outlets never take the time to detail the age group and underlying health conditions - and even the primary cause of death - behind all of the deaths included in the coronavirus death count. They report every time a celebrity tests positive for the virus, but never cover when someone recovers from the virus. The reporting on the virus is selective, to say the least. 

Which is why we weren't the least bit surprised to read that NBC News spent weeks documenting the coronavirus "journey" of one of its contributors with Covid-19 - despite the fact that he never tested positive for the virus!

The contributor, Dr. Joseph Fair, believed he had the virus, according to the Daily Wire, and subsequently appeared on the air on NBC several times to discuss his struggle with the illness in May and June.

“I had a mask on, I had gloves on, I did my normal wipes routine … but obviously, you can still get it through your eyes. And, of course, I wasn’t wearing goggles on the flight,” Fair said in the appearance on the “TODAY” show from the hospital.

Host Hoda Kotb said during the segment about the tests:

“Every time it came back negative, but clearly you have it.”

A negative test indicates the patient does not have the virus.

But last week, Fair admitted that he never tested positive for the virus and also tested negative when he was administered and antibody test. 

He Tweeted out last week: “My undiagnosed/suspected COVID illness from nearly 2 months ago remains an undiagnosed mystery as a recent antibody test was negative. I had myriad COVID symptoms, was hospitalized in a COVID ward & treated for COVID-related co-morbidities, despite testing negative by nasal swab.”

Fair said he had a myriad of COVID-19 symptoms, was hospitalized in a ward along with other patients with the new disease, and treated for “COVID-related co-morbidities.”

"I was severely ill for 2 weeks, 4 days of it in critical condition, resulting in pneumonia, diffuse lung injury & 18lbs of weight loss. My path forward is a 2nd AB test, & follow-up with a pulmonologist & tropical medicine specialist in an effort to diagnose what made me so ill," he wrote.

He said he plans to take another antibody test.

Fair said he was humbled by what happened and hit back at his critics, writing in a missive:

“I have absolutely nothing to hide. I got really sick, brought up my test results upfront, and reported the follow-up. A somewhat funny irony is that no one would have ever known I had any negative tests had I not reported them.”

But back in May, Fair had suggested on the air on the "Today" show that he may have gotten the virus through his eye during a flight that he took. He gave the interview from a hospital bed in New Orleans.

Even better, NBC knew about the negative tests and failed to mention them, according to the Daily Wire. They wrote: "During a June 14 interview with Chuck Todd on 'Meet the Press,' no one noted that Fair had already tested negative at least five times."

Steve Krakauer, author of the “Fourth Watch” newsletter, wrote: “In the end, NBC’s viewers were left with two very alarming – and false – impressions. First, that an expert virologist can take every precaution but can still catch COVID-19 through his eyes. False. Second, that tests can be so untrustworthy that you can have multiple negative tests and still have coronavirus.”

Cross-Asset Valuations Suggest That The Market Is Deeply Suspicious Of Growth Returning To Normal

Zero Hedge -

Cross-Asset Valuations Suggest That The Market Is Deeply Suspicious Of Growth Returning To Normal Tyler Durden Sun, 07/12/2020 - 18:00

Authored by Morgan Stanley chief global economist, Andrew Sheets

Will there be a V-shaped global recovery? Probably no financial question is more important, or more poorly defined. The intensity of investor debate over which letter the economy will resemble, with no broad agreement on what those letters mean, remains a major challenge. Morgan Stanley’s forecast for a V-shaped recovery has US and DM growth returning to pre-recession levels by 4Q21, faster than consensus and much faster than the recuperation from the global financial crisis. But it will still be 18 months before growth returns to normal; even a V-shaped recovery takes time.

That slog would seem to stand in sharp contrast to action in the financial markets, which, free to look ahead, have roared back from the lows. Global equities are up almost 40% since late March, causing a healthy amount of scepticism that “markets have run ahead of the fundamentals”. We see this concern in investors’ positioning, read it in the financial press, and hear it in client conversations. There’s just one problem with this view: if markets are pricing a 'V', they’re going about it in an odd way.

Since there’s no common definition for 'V-shaped', we’re going to support the home team and use Morgan Stanley’s above-consensus economic forecasts. They assume a modest second wave of infections this winter, widespread availability of a vaccine in the US by mid-2021, and continued support from fiscal and monetary policy. They expect that pent-up savings will support consumer spending next year even as businesses are slower to respond, and that the global economy won’t suffer a lasting, deflationary shock.

Markets have other ideas. Cross-asset valuations suggest that the market is deeply suspicious of growth returning to normal, worries about ongoing market volatility, and expects deep scarring in the US and global economy for years to come. There are many ways to describe such a scenario, but 'V' isn’t among them.

Let’s start with expected growth. Greater optimism on the recovery should boost demand for smaller, more cyclical businesses, which have more gearing to economic activity. It should reduce the discount for lower-quality companies and credits, as a rising tide lifts more boats. It should lead to higher yields, as economic normalcy removes the need for extremely accommodative policy.

That’s not exactly happening. Relative valuations for global small caps versus large caps are well below average, and low-quality stocks have almost never been cheaper to high-quality ones.  The basis between BBB and A rated credit, and B and BB rated credit, remains elevated. And developed market yields are still within a whisker of all-time lows, despite the improvement in stock markets and economic indicators.

Volatility markets also suggest scepticism about a return to normal. Implied equity and credit vol sit in the top 15% of all observations of the last 20 years (the very opposite of 'normal'), while skew, a measure of how much extra investors are willing to pay for disaster protection, has rarely been higher. Neither suggest a market that’s pricing a return to normal any time soon.

And then there’s the long term. Looking beyond 2021 may feel like a luxury, but what market pricing implies is still remarkable: a Fed that won’t raise interest rates until 2024. A US 10-year yield that’s sub-2% past 2035. US CPI inflation averaging ~1.6%Y, well below the Fed’s inflation goal, through 2050.

All this means that we don’t think markets are priced for our economists’ forecasts for a V-shaped recovery. It also makes three events this month important:

  • 2Q earnings season kicks off next week, and my colleague Mike Wilson thinks it will more likely help than hurt. Companies should be able to report a better trajectory of business since the March lows, leading to a sustainable bottom in earnings revisions. Banks, which have lagged the market, will be among the first to report.
  • The European recovery fund, which my colleagues Reza Moghadam and Jacob Nell expect to be approved by the end of the month, and which my colleague Graham Secker sees as a positive catalyst for European equities.
  • Further US fiscal stimulus, which my colleague Michael Zezas believes will amount to another ~US$1 trillion, to be approved near month-end. The failure of such a measure would mean significantly higher risk for markets.

After July, these catalysts will be behind us and the tactical environment looks more challenging: First things first; we think that positive events still lie ahead over the next several weeks, and among the various risks facing markets, 'priced for a V' isn’t at the top of our list.

21 Hospitalized After Fire, Explosion Aboard Naval Ship Docked In San Diego

Zero Hedge -

21 Hospitalized After Fire, Explosion Aboard Naval Ship Docked In San Diego Tyler Durden Sun, 07/12/2020 - 17:53

Update (1750ET): 17 sailors and four civilians have been transported to a San Diego hospital with non-life-threatening injuries following the fire and explosion aboard the USS Bonhomme Richard.

The fire broke out around 9 a.m. local time, according to San Diego Fire-Rescue, before quickly reaching three-alarm status.

There were 160 sailors aboard at the time and the entire crew, as well as responders, have been accounted for.

Update: Watch live

*  *  *

A fire broke out Sunday on the USS Bonbomme Richard at US Naval San Diego, injuring several sailors according to authorities.

A three-alarm fire was declared on the amphibious assault ship, reported at 8:51 a.m. according to local station CBS8, citing the San Diego Fire-Rescue department. As the fire progressed, the ship was reportedly evacuated.

Smoke could be seen from a distance as the fire burned. Meanwhile, just before 11 a.m. an explosion was reported resulting in at least one injury, according to the report. 


Iran Says Radar Operator "Forgot" To Make Crucial Adjustment, Leading To Airline Downing

Zero Hedge -

Iran Says Radar Operator "Forgot" To Make Crucial Adjustment, Leading To Airline Downing Tyler Durden Sun, 07/12/2020 - 17:30

Iran has made a key announcement revealing shocking details behind the tragic downing of Ukraine International Airlines Flight 752 shortly after it took off from Tehran Imam Khomeini International Airport on January 8. All 176 passengers and crew were killed when it exploded in the sky after direct missile impact. 

Recall that the Islamic Republic and the US were on the brink of war over the US assassination by drone of IRGC Quds Force chief Qassem Soleimani in Baghdad days prior, and that two surface-to-air missiles took out the passenger aircraft, mistaking it for an inbound American attack. 

After six Iranians were arrested in June over the accidental shoot down, with no details or identification given, Tehran officials announced Saturday that it was ultimately triggered by human error related to monitoring defensive radar. Personnel "forgot" to make a crucial radar adjustment after resetting the defensive system, Iran's Civil Aviation Organization (CAO) said.

Wreckage from downed Ukraine International Airlines Flight 752, image via Wikimedia Commons.

Bloomberg writes of the new findings

An Iranian air defense unit that “forgot” to adjust its radar system triggered a chain of communication and human errors that led to the deadly downing of a Ukrainian passenger jet in January, according to a report from Iran’s Civil Aviation Organization.

The report further underscored that it was an isolated but devastating error that did not pass through the chain of command.

"The operator of the air defense system launched a missile at what it had detected as a hostile target without response from the command center," CAO said its report, which also detailed that authorities were not informed before the launch.

Stillframe footage of horrific aftermath, via BBC.

The two missiles were fired about 30 seconds apart, targeting what ground units thought was a cruise missile. Data from the passenger airline's black box is not expected to be decoded starting until July 20.

At the time Iran was fully expecting to come under attack given soaring tensions with the US in neighboring Iran and stated threats with warnings of "red lines" out of the Trump administration.