- BuzzFeed And The NYDN: Click-Bait Headlines, False Stories, And Virtually Nonexistent Retractions
On Thursday, December 1st, Yasmin Seweid was allegedly assaulted by Trump supporters in NYC. According to BuzzFeed and the NY Daily News, the attack took place at the uptown 6 train stop at 23rd Street in midtown Manhattan. The assaliants allegedly called Seweid a terrorist, broke her bag strap, followed her when she tried to get away from them, and tried but were unable to pull her hijab off of her head.
Both Tamerra Griffin and Ben Kochman, the authors for BuzzFeed and the NYDN stories, did not include any additional sources for their story, other than Seweid’s personal account and a statement from police that the “investigation was ongoing” with no further comment. It seems both read her Facebook post recounting her story (which has since been removed), and after speaking with her, they took it and her account of the incident as fact, without verifying her story anywhere else. Even though Seweid was their sole source for the story, they didn’t even bother to include the word “allegedly” as I did in italics above. The NY Daily News said Seweid stated the following:
They kept screaming Trump’s name at her, and then said, “Oh look, a (expletive) terrorist,” she said.“ Get the hell out of the country!” they yelled during the train ride. “You don’t belong here!”
When Seweid ignored them, they pulled on her bag to get her attention and the strap broke.“That’s when I turned around and said ‘can you please leave me alone,’ and they started laughing,” she said. She walked to the other end of the train, and they followed her and tried to pull off her hijab, a head covering worn by Muslim women.“ Take that thing off!” they hollered.
“I put my hand on top of my head to hold it,” Seweid said. “Then I turned around and screamed ‘what the (expletive).’ ” Seweid got off the train at Grand Central Terminal on E. 42nd St. and reported the terrifying incident to police.
Her father, Sayeed Seweid, 55, of New Hyde Park, L.I., said he was also angry that no one else stepped in to defend his daughter.“ Nobody even offered to help an 18-year-old girl,” he said. “That means something. Her phone was dying. You offer help — it doesn’t matter the race, religion, or the country.”
Yes, in overwhelmingly “accepting” and liberal NYC, which voted 87% for Hillary Clinton and 10% for Donald Trump, a Muslim woman was attacked by Trump supporters on a subway platform directly under the Credit Suisse building in a very safe part of Manhattan. Not only that, no one stepped in to help, and even more surprisingly, no one recorded the incident and splashed it all over social media. And no police officer was able to readily verify her account to reporters with confirmation from the vast network of surveillance cameras that are omnipresent in NYC.
The only time I would ever expect to hear this story is if it were prefaced with the words, “I’ll take stuff that never happened for $400, Alex.”
In fact, the story would have been much more believable if it was a Trump supporter who was being harassed and attacked. Back in August, some guy who was wearing a “Make America Great Again” hat tried to walk through the public park surrounding City Hall. Unfortunately for him, he just so happened to be walking through a police protest, but the protesters turned on him, shouting and shoving him out of the park to the chants of “racist out” and “fascist out”, while police stood by without intervening. Of course, video of the whole incident was captured and posted on social media:
— Alexander Rubinstein (@AlexR_DC) August 1, 2016
As the NY Post reported, protesters took to the streets in force after Trump won the election, chanting “not my president” and “Trump Is Hitler” all over Manhattan, even using a noose to hang a Trump effigy in Columbus Circle.
If you heard a story about a Trump supporter and an attack on an NYC subway, and just after this election, wouldn’t you expect it to be a Trump supporter getting attacked by a group of anti-Trump assailants, and not a group of Trump supporters doing the attacking? And no matter what happened, wouldn’t you expect to see a video of the incident?
You certainly should. As an example, in the days after the election, GotNews founder Charles C. Johnson was on an NYC subway wearing a “Make America Great Again” hat, minding his own business, when he was repeatedly harassed by someone who was angry with Trump’s election. Once again, the whole incident was captured on video and splashed all over the internet, like so many other confrontations, altercations and assaults that take place on public transit that have been made quite popular on websites like World Star Hip Hop and LiveLeak.
And yet, BuzzFeed and the NYDN ran the Seweid story on her word alone, without any video, police or witness commentary to support her claim. Notably, they presented her story as fact, never once stating that it could be fiction. Given the attack’s alleged location and assaliants, if you were a journalist, wouldn’t you expect fiction to be the case, and not even bother running the story?
My sentiments exactly. Though the NYDN was careful to post a follow-up story detailing discrepancies and doubts in her story, it wasn’t until almost two weeks later when she was arrested and formally charged by police for filing a false report that the NYDN acknowledged that their original story was totally bogus. According to police, Seweid finally told them, “she didn’t want to get in trouble for breaking her curfew after being out late drinking with friends”, even though “she had numerous opportunities to admit nothing happened and she kept sticking by her story.” And somehow, the original story remains up on the NYDN website, unedited and readily accessible to NYDN readers, and no retraction was ever published.
As I have pointed out in the past, were any of the “fake news” websites listed by the MSM to do this, they would not only be called out by the MSM, they would instantly lose all of their viewers. But somehow, people keep going back to the true purveyors of “fake news”, when they time and again demonstrate that they are not willing to hold themselves accountable for their mistakes. Which is something that is readily apparent in the case of BuzzFeed, who has left their original story and click-bait headline up, and only posted the following addition below the title:
UPDATE: The woman was arrested on Dec. 14 for filing a false police report and obstructing government administration, police said.
TRUNEWS, who did an excellent job of covering a real, videotaped assault of a Trump supporter in Chicago, also did a superb job of summarizing the entire saga of the Seweid story. I spoke with Edward Szall, the TRUNEWS correspondent who covered both stories, and he explained to me the specifics about how the Seweid story was run without question by the local news and the aforementioned outlets, noting the initial reaction to the story and the ensuing vilification of Trump supporters. I’ve provided screenshots to the BuzzFeed comments section, which also remains up, so you have an idea of how exactly people reacted.
Note that you can see the doubt in the minds of some of the commenters. Shocking, but hardly surprising; even BuzzFeed’s own comment section sees holes in the story that author Tamerra Griffin didn’t even bother to acknowledge at all.
And somehow, Seweid’s sister Sara is blaming the police for investigating the incident. Yes, she really expects police to not be skeptical of a dubious allegation and not investigate her story. WND reported what she stated in a Facebook post below:
…she said she was concerned about the “mental state of young Muslim women who feel that they have to lie so intensively to survive.”
She also wrote, “The NYPD should have never been involved in the first place even if the incident did happen. It became super clear to me these past two week [sic] that the police’s first instinct is to doubt your story and try to disprove it.”
Sara Seweid also blasted the police: “The NYPD doesn’t care about us or our safety. Never did.”
Then she went on to attack the media: “Things snowballed out of our control because of the media because by the next morning the news had started publishing stories. Reporters made things so much worse for my family.”
As ridiculous as she sounds, Sara Seweid makes a good point – we never would have heard about this story if it wasn’t for irresponsible reporting from outlets like BuzzFeed and the NYDN. But in her post, she of course omitted the obvious fact that Seweid retold her lie to the media on her own.
If journalists and publications plan to stay in business and retain readers, they will need to do a better job of providing tangible content that isn’t later proven to be completely fabricated. If they don’t, they’ll soon find their names in the constantly growing list of defunct newspapers and websites. BuzzFeed and the NYDN will need to learn that not only do they need to publish truthful stories that are credible and honest, they need to do a better job of owning up to their mistakes and retracting them. It wouldn’t have taken more than a couple seconds to verify that Seweid’s story was dubious – they shouldn’t have posted it almost as much as Seweid shouldn’t have told it.
Look, we’ve all been teenagers and made teenage mistakes. I’ve certainly made much bigger mistakes than coming home “after curfew” and dating someone my parents didn’t approve of, and you probably have too. But, I’ve always faced up to the consequences of my decisions. With Seweid’s indiscretions now being front page news, its fair to say that she is certainly facing up to the multitude of mistakes she made, and it almost feels unnecessary to write this article as a result.
But, Seweid needs to be held accountable for what she did. Not only did she foolishly get the police and media involved in her ridiculous attempt to cover her tracks, she made a false accusation. If someone ended up being accused of a crime against her, it could have been even more damaging personally and professionally as whatever Seweid is facing, from either the authorities or her parents. What if it was you on that subway platform who was accused of assaulting her, and you got dragged before the police and falsely charged with a crime?
What should her punishment be? You’ll have to trust the courts to sort that one out properly. Should her parents have punished her over this incident and being “upset she was dating a Christian” by shaving her head and eyebrows prior to her arrest, and having her display it by not wearing her hijab? You’ll have to decide that one for yourself.
- Did Satellites Expose A Secret American Drone Hangar In A Saudi Desert?
Buried deep in the heart of one of the most barren deserts in Saudi Arabia, and the entire planet for that matter, a commercial satellite happened upon what appears to be a very modern airport that suddenly appeared out of thin air from one year to the next. What makes the airport even more mysterious is the fact that there are no planes on site and no government claims ownership of the facility. So, is this airport a mere “Border Guard” facility, as Google Maps would suggest, or did this satellite just happen to reveal the location of a secret U.S. military airport used to conduct drone operations in Yemen?
Certainly, the proximity to the Yemen border would make this an ideal location for drone operations.
And it does seem somewhat odd that such a massive airport, with 3 large hangars, would be required to conduct “border operations.” Moreover, while we understand that the Saudi border police are probably using some pretty sophisticated prop planes to conduct their operations, it does seem a bit odd that not a single plane would be visible at the airport.
While we may never know the true owner/function of this mysterious facility, we’re almost certain that Russia hackers are behind the leak of it’s location.
- 2016 Facts And Figures Quiz
As Nick Colas writes, one thing is certain: 2016 was a truly historic year.
From Donald Trump’s unorthodox but successful campaign for President to the Brexit vote, popular votes shifted the course of global politics in ways very few could have imagined a year ago. Here is a brief quiz that highlights the year’s politics, developments in technology, and changes in the U.S. labor market/economic policy.
The idea here, Colas writes, is to (hopefully) shed a little light and (more importantly) humor on the events of 2016 and what they might mean for 2017. Which stock has most contributed to the Dow’s move this year to 20,000? How’s the FANG thing working these days? And how has a “Real” (60/40 stock/bond) investor done since Election Day (not great actually…). Read on for the answers and a few other questions about the year.
From Convergex’ Nick Colas
I am a big fan of the weekly National Public Radio show “Wait, Wait, Don’t Tell Me.” It is, by NPR standards, a nonpartisan news quiz show that uses humor to inform. If you don’t know the show, check it out. If you do, you’ll recognize the spirit of the questions below.
The idea here is to highlight the most notable events of 2016 and place them into a greater context. In conversations with scores of clients and friends in the last few weeks one theme comes up repeatedly: 2016 has been a truly momentous year. Sometimes the years go by quickly because nothing much new happens. This one is the opposite – 2016 feels like “You are there” history in the making.
Today we will cover Trump/Brexit, and bit of technology and economics. We’ll finish off tomorrow with a few other subjects.
Topic #1: Donald Trump
Question 1: President Elect Trump uses social media to deliver his message directly to his supporters. How many tweets/retweets has he sent since setting up his @realDonaldTrump Twitter account in March 2009?
Answer: D. As of this Monday, Trump had sent a total of 34,121 tweets/retweets. That is an average of 12 messages per day, every day. And if you put this in historical context, not all that surprising. FDR had his fireside chats using the then-relatively new medium of radio. JFK’s good looks played well with television audiences. Politicians understand that “The medium is the message”.
Question 2: While Mr. Trump has over 17 million Twitter followers, he himself only follows 40 accounts. Which one of these people is on that select list?
- Geraldo Rivera
- Piers Morgan
- YouTube personalities “Diamond and Silk”, two sisters from North Carolina
- Ann Coulter
Answer: All of the above. Having the President-Elect follow you on Twitter is essentially the most exclusive club in the world. By comparison, Augusta National Golf Club has more members, at about 300 currently.
Question #3: Which one of these is listed as a “Signature cocktail” at the bar at Trump Tower NYC? (check all that apply).
- “You’re Fired”, the bar’s take on a classic Bloody Mary
- “Make America Great Again”, an Old Fashioned with either rye or bourbon
- “A Big Beautiful Wall”, a frozen margarita made with American-sourced tequila
- “The Billionaire Martini”, with Premium Chopin vodka
Answer: A & D. Worth noting: Mr. Trump himself does not drink alcohol. And if you want to try any of these cocktails, be ready for a wait. Trump Tower is locked down tight at the moment, as anyone who has been to 56th and 5th can tell you.
* * *
Topic #2: Technology
Question #4: On July 22, 2016, a Japanese company made the very last unit of a product that profoundly changed the way the world consumed entertainment and information. What was it?
- A black and white television
- A stereo cassette deck
- A VCR machine
- A cathode ray tube (CRT) television
Answer: C (VCR machine). Phillips made the first mass market video cassette recorder available in 1972. The product started to gain broad appeal in the late 1970s as popular movies became available for purchase or rental, allowing consumers to view content at home. From there it is a straight line to Netflix streaming, Hulu and Apple TV. And the global long term success of the VCR – 40-plus years in constant production – is a record that will likely never be broken. For reference, consider that the iPhone is 9 years old. Only 31 years to go….
* * *
Topic #3: Brexit
Question #5: What do Boston (England, not MA) and Gibraltar have in common when it comes to the Brexit vote?
- They had the lowest turnout of any region/country for the referendum
- They represent the two most extreme votes for Remain/Leave of any region/country in the U.K.
- They were the only two regions/country perfectly indifferent (exactly 50/50 votes) to the outcome
- None of the above.
Answer: B (the two extremes). The town of Boston voted 76% to “Leave”, while Gibraltar polled 96% to remain, representing the extremes of the Brexit vote. Also among the areas with a predominant “Remain” vote; many of the well-known cities in the U.K., including the City of London (75% Remain), Oxford (70%), Cambridge (74%), and Edinburgh (745). “Remain”, however, only managed to win in three areas: Scotland (62%), London (60%) and Northern Ireland (56%).
In what is, I think, the deepest commonality with the U.S. Presidential election, Secretary Clinton also handily won most of the large American urban centers. These include Manhattan (90%), Boston (85%), Cook County Chicago (78%), San Francisco (90%) and Los Angeles (75%). The populist schism that has punched its hallmark into 2016 is most easily understood as a divide between urban/non-urban dweller, which makes it difficult to see how this social rift begins to mend itself.
* * *
Topic #4: Economics
Question #6: Who mused in a recent public speech about the merits of a “High pressure economy” where everything runs a little hotter than usual (wages, employment, inflation) to overcome the last vestiges of the Great Recession, and even cited their spouse to defend the merits of “Running hot”?
- Donald Trump
- Janet Yellen
- Mario Draghi
- Bill Dudley
Answer: B (Janet Yellen, in a speech titled Macroeconomic Research After the Crisis). The key question of 2017 will, of course, be just how much “High pressure” the Fed Chair is willing to accommodate. The U.S. central bank may finally get the fiscal stimulus it has requested for years, thanks to Mr. Trump’s plans to cut taxes, reduce regulation and spur infrastructure spending. Will Chair Yellen and the Fed allow the U.S. economy to run hotter than normal in 2017/2018, or will they work to tamp down the animal spirits that President Trump and Congress want to encourage?
Question #7: By some measures, the U.S. labor market is back to essentially full employment. But by others, it still shows troubling signs. Which one of these issues still plagues the domestic labor market?
- Participation rates are still declining, with November’s reading below 60%.
- Teenage unemployment is higher than a year ago, at +16%
- Average weeks spent unemployed are still 30% higher than the prior worst-ever levels (back in 1984).
- Unemployment for those people with less than a high school degree is still over 10%.
Answer: C (Average time spent unemployed is 26 weeks as of November 2016, still far worse than any post-World War II recession). If you have a friend who has been unemployed for more than a few months, you know this is true. Perhaps their skills don’t meet what employers need. Or perhaps there is a negative bias to the long term unemployed. Whatever the reason, there are still 1.9 million people in the U.S. who have been unemployed longer than 6 months and still want a job. In every prior recovery, it has taken them less time to get back to work.
* * *
Topic #5: Markets
Question #1: You probably know that Energy (up 29%) and Health Care (down 3%) are the best and worst performing large cap sectors in the S&P 500. But what are the second best and worst sectors in terms of price performance?
Answer: Industrials take silver with a 20% price return YTD, and Consumer Staples (up 4%) get the steak knives for second worst.
Question #2: The Dow Jones Industrial Average is knocking at the door of 20,000. What stock has contributed the most this year to getting the Dow to this level?
Answer: Goldman Sachs (GS) represents 440 points of the Dow’s 2,480 point move this year, or 18% of the total. Other major contributors: UnitedHealth (340 points), Caterpillar (230 points) and IBM (220 points). Goldman now has an 8.2% weighting in the Dow, the largest of any of the 30 components, so watch that name in the final sprint to 20,000. And in case you were wondering, Apple’s move this year (up 9%) only adds about 60 points to the Dow.
Question #3: Over the last few years, everyone was talking about the FANG stocks (Facebook, Amazon, Netflix and Google). How did this group do in 2016, assuming an even weighted portfolio?
Answer: The average return for the FANG portfolio is 11.2% YTD, spot on the price return for the S&P 500) of 11.1%.
Question #4: The S&P 500 is up 6.2% from Election Day, but how much is the classic 60/40 stock/bond portfolio up over the same period?
Answer: It depends on which bond proxy you use in the calculation, but a reasonable answer is a 2.6% return. That is based on a broad bond market index, which is down 3% on a price basis since Election Day. If you were only in long dated Treasuries over this period (down 9.2% since Election Day), you are actually flat.
Question #5: If I asked you which ETF drew the most new money thus far in 2016, you’d probably guess SPY (SPDR S&P 500 ETF). And you’d be right, with $20.3 billion of inflows YTD. But which U.S. listed ETFs have seen the largest redemptions this year?
Answer: The ETF with the largest outflows is the Wisdom Tree Europe Hedged Equity Fund ($8.1 billion out). Other ETFs with more than $5 billion of outflows this year to date: Deutsche X-trackers MSCI Currency Hedged Equity Fund ($5.6 billion), PowerShares QQQ ($5.6 billion), WisdomTree Japan Hedged Equity ($5.8 billion) and iShares MSCI EMU ETF ($6.7 billion). Don’t take that as any measure of investment merit, of course – this is a data point about investment themes.
Question #6: The long run average of the CBOE VIX is 20. How many days in 2016 has the VIX closed higher than that?
Answer: If you guessed less than 20, you are wrong (41 days is the answer). But the error is understandable, because during the second half of the year the VIX has only closed above 20 on 2 days (November 3 and 4).
Question #7: U.S. equity small caps have dramatically outperformed large caps this year, but the two most closely watched indices for this asset class have very different YTD returns. The Russell 2000 is up 22%, where the S&P Small Cap 600 is up 27%. Why?
Answer: Sector weightings go a long way to explaining the disparity. For example, the S&P Small Cap Index has a 19% weighting to Industrials, where the Russell is only 15% exposed to that strongly performing sector.
Question #8: President-Elect Donald Trump famously used Twitter as a cornerstone of his communication strategy during the campaign. How much of a “Trump bump” did Twitter’s stock get this year from this high-profile use case for its technology?
Answer: Hard to say. The stock is down 16.3% year to date, so draw your own conclusions.
Question #9: Simple question – which has done better in 2016: gold or silver?
Answer: It’s not even close. Silver is up 22% and gold is only up 9%. Earlier in the year (August) silver was up close to 50% and gold was 28% higher.
Question #10: Who told Bob Woodward of the Washington Post back in April that “It’s a terrible time right now” to invest in U.S. stocks?
Answer: An easy one to close things out, because I am pretty sure everyone knows it was President-Elect Donald Trump. Total return for the S&P 500 since that story ran: 11.3%, with more than half of that return coming since Election Day. Now, I suspect everyone (including Mr. Trump) hopes he is wrong. Or at least that his future policies will “Make US stocks Great Again”.
- Stunning Visualization Of The Flow Of International Trade
The interactive visualization you see in this post was created by data visualization expert Max Galka from the Metrocosm blog. (Also check out his new project, Blueshift, which allows users to upload data and visualize it on maps with no coding required.)
Trade is an essential part of economic prosperity, but, as Visual Capitalist’s Jeff Desjardins asks, how much do you know about global trade?
The stunning visualization below helps to map international trade on a 3D globe, plotting the exchange of goods between countries. It enables the abstract concept of trade to become more tactile, and at the same time the visuals make it easier to absorb information.
Click here for full interactive chart, enabling users to select a country to see its share of trade alone, or spin/navigate the globe by using your mouse.
EXPLORING THE MAP
Here are a few things we found particularly interesting, as we scanned through the map:
- When looking at the globe as a whole, trade is concentrated into obvious hubs. The United States, Europe, and China/Japan are the most evident ones, and they are all lit up with color.
- There are also obvious have-nots. Take a look at most of the countries in Africa, or click on an individual country like North Korea to see a lack of international trade.
- In fact, North Korea is completely vacuous, except for one lonely dot floating to China every so often. After taking a quick look at the data, it seems China takes in over 60% of North Korea’s exports, which are mostly raw materials such as coal, iron ore, or pig iron.
- Now click on South Korea, and the situation is completely different. By the way, South Korea exports $583 billion of goods per year, while the hermit nation does just $3.1 billion per year.
- This map also shows how dependent some countries are on others for trade. Look at Canada, a country that sends close to 75% of its exports to the United States. Mexico has a similar situation, where it does most of its business with the U.S. as well.
- This is a stark contrast to Cuba, which doesn’t trade enough with any one partner to have it visualized on this scale at all. Cuba has exports of only $1.7 billion, and its largest trading partner is China, which only takes in $311 million of goods per year.
- How Come No One Involved in the Russian Hacking Conspiracy Talked?
The claims that the Russian government hacked US voting machines are absurd.
Voting machines are not connected to the Internet. To hack a voting machine you have to be physically in proximity to the machine and use a hand held device.
The machines can be programmed to throw the vote count to one candidate or the other, and there are other ways to interfere with elections.
Possibly if a foreign power had server presence in the US, some precinct reports of results could be intercepted and altered, although a voice check over the telephone is an easy way to verify the electronic transmission. What is clear is that Russia cannot hack the voting machines.
What about the claims that Russia hacked Hillary’s emails and used a network of 200 Internet websites to convince the American people to vote for Trump?
Wikileaks, which released the emails, said they were a leak, not a hack, and that they did not come from Russians. The FBI and the Director of National Intelligence do not support the CIA’s claims. Or should we say claims attributed to the CIA as apparently the source of the claims, like the source of PropOrNot, is unknown.
And look at the size of the alleged conspiracy—the Kremlin and 200 websites. Surely someone would have talked!
John McCain says he is sure Russia did something and we need a congressional investigation to find out what.
Why not start with an investigation of PropOrNot and what they are up to?
We also need an investigation why Americans living in big cities on the NE and West coasts were immune to Russian fake news, whereas the geographical bulk of the country succumbed to the Russian fake news instead of to the presstitute fake news that conquered the NE and West coasts.
The FBI says that the claims attributed to the CIA would not stand up in court.
So what are the claims all about? Who is behind them?
Are there elements within the CIA committing treason by working against president-elect Trump?
Are there elements in the US Congress committing treason by trying to sway electors with fake news resting on unattributed claims that the Russians, not the American people, elected Trump?
Why these claims in the absence of proof?
What we are experiencing in the delegitimization of Donald Trump is an extraordinary rejection of democracy by elements in the government and by the presstitutes.
- Gartman's 2016 Year in Review
From Slope of Hope: I realize that the year isn’t quite over, but it’s late enough in 2016 to put together a retrospective of ZeroHedge’s favorite “commodity king”, Mr. Dennis Gartman. This is the man, of course, frequently featured on CNBC, even though his daughter Courtney left the network earlier this year.
Although Gartman mostly makes market commentary, he also declared quite plainly in late August that Trump had “no chance” of winning the presidential race.
I did a couple of posts about the man, such as The Gartman Grid, which offers insight into how to interpret the often curious ponderings of DG, as well as a fanciful take at a new Broadway production Gartman The Musical.
A more serious (and time-consuming) undertaking was to go through all of the Gartman-specific posts on ZH that called out concrete buy or sell recommendations from Gartman. Now “concrete” is a little tough with a man who peppers his speech with words like “gently” and “slightly” and “very very lightly”, but I’ve tried my best. I can understand his reticence to make the bold declarations that he used to (e.g. “I have never been so bullish of oil”) given the tomato-throwing that often ensues when he’s wrong.
Nevertheless, I have broken down all his equity buy/sell and crude oil buy/sell ideas. According to my analysis, he’s been right about 30% of the time overall, with equities (22.73% correct) being weaker than oil (45.45% correct). Well, they do call him the commodity king, right?
You can access this analysis by clicking the image above or click here to see the Google Doc itself. I look forward to keeping up with the man’s declarations in 2017 and perhaps doing another analysis next December.
- "When Gold Goes Above 1430 We Whack It"
As it goes in silver, so it goes in gold. In London at least.
In a bid to have UBS reinstated as a defendant in a London Gold Fix antitrust lawsuit, plaintiffs documents submitted to a New York Court last week include explosive chat room transcripts of UBS and traders from different banks encouraging each other to “push,” “smack,” and “whack” gold prices.
The transcripts are equally as startling as those described of banks of the London Silver Fix and UBS given to the court the previous day and described last week in this article.
On December 6th attorneys for plaintiffs in a consolidated class action against banks of the London Gold Fix and UBS, asked the court for leave to amend with a Third Amended Complaint. The TAC includes additional facts based on a “limited set of cooperation materials” produced by former defendant Deutsche Bank, as part of a settlement agreement and further statistical analysis.
Supporting documents say the amended complaint addresses the Court’s October finding that the previous complaint failed to plausibly plead firstly that UBS was part of the antitrust conspiracy, and secondly that the conspiracy existed prior to 2006.
Also, for the first time a gold producer has been added to the class action of those claiming losses in gold trading due to the manipulation. Compania Minera Dayton, SCM the Chilean subsidiary of Australian resources company Lachlan Star is said to have “sold gold on many of the specific days on which Plaintiffs demonstrated manipulation of gold investments” totaling $287.4 million over the period 2004 to 2013.
In support of allegations that UBS shared customer order information and executed coordinated trades to manipulate gold markets, samples of “dozens” of chat room messages between UBS and Deutsche Bank are contained in the revised document indicating "many efforts to artificially suppress gold prices, and to manipulate gold prices at the time of the Fixing.”
Filings include the following script reminiscent of an 1980’s arcade game scene. Rather than competing for business in the marketplace, supposed competitors UBS and Deutsche Bank however are seen coordinating tactics as they anticipate the most illiquid of days to jointly execute their sell orders for greatest negative impact on the market.
Deutsche Bank: bro japan holiday today
Deutsche Bank: think it’ll be quiet
Deutsche Bank: well, illiquid, not quiet haha
Deutsche Bank: illiquid means wild wild west
UBS:okay when gold pops 1430
UBS: we whack it
UBS: u sell your 50k
UBS: i sell my 20k
UBS: then we double that up and produce our on liquidity too
UBS: that should be enough to cap it on a holiday
Deutsche Bank: haha yeah
Deutsche Bank: lol
One chat see's a Deutsche Bank trader confirming with a UBS trader his trading had indeed influenced the Gold Fix: “u just said u sold on fix.” The UBS traded replied “yeah,” “we smashed it good.”
The secret associations between traders appear to be close knit, with the members willing to assist their opposite numbers at every chance: UBS “im feeling helpful to ubs today.” The UBS trader then said “need to push this back wer,” to which the Deutsche Bank trader replied “ok,” and “lets do it.”
Counter-intuitively, the banks special penchant to suppress the price of gold is repeated throughout the examples. As the gold ticker rose on this occasion the indignant traders teamed up to push it back down, commending themselves sarcastically meanwhile.
Deutsche Bank: someone still trying to push our gold up
UBS: so u should pay the mkt right away
Deutsche Bank: nope
UBS: cause chances are someone else got hit and u f*ck them up
Deutsche Bank: no touchy
Deutsche Bank: im short 15k
Deutsche Bank: xau
Deutsche Bank: too much fire
UBS: im gonna sell more silver and gold
Deutsche Bank: k
Deutsche Bank: i really think we are on the right side today, being short
Not only are they pushing the market down but also there appears to be intent to harm client interests as the November 2014 FINMA investigation loosely reported.
Here a UBS trader gives information to a Deutsche Bank trader about a client’s order query on Nov 16th 2010, and strategizes to punish them by whacking the price lower if purchased from another party.
UBS: boc sniffing around in gold
Deutsche Bank: likewise
Deutsche Bank: passed my bid
Deutsche Bank: dude
Deutsche Bank: so their round
Deutsche Bank: is from u
Deutsche Bank: to me
Deutsche Bank: haha
UBS: not always
UBS: anyway good to give each other heads up
UBS: if we find out side, whack it
Deutsche Bank: yeah
Bank of China, one of the largest state-owned commercial banks in China, and which offers customers “a wide range of gold investments in gold bars and gold bullion coins” have yet to respond to this author’s query if the bank could be the buyer referred to as “BOC” in the above conversation.
A central tenant of this lawsuit is that the banks have chosen one particular part of the trading day to act secretly. The strategy of banks that "colluded around the PM Fixing to ensure prices moved the direction they wanted, when they wanted," was enabled in this case by the same Deutsche Bank trader who appears in multiple chats over a period of years with various others sharing their presumably winning strategies around the afternoon benchmark.
During a trading day which had been less successful the Deutsche Bank trader assured his opposite trader from Bank of Nova Scotia that “at least the fix will be fun . . . make it all back there!!!!!! : ?”
Another day the Deutsche Bank trader remarked to a different trader at Bank of Nova Scotia “hahahahaha, we were all short going into that fix.”
The Deutsche Bank trader was informed by a HSBC trader: “i kick some out and take it back after the fix,” describing a tactic to sell gold high before the fix and buy it back after the fix at a lower price. Plaintiffs say the traders knew it would nearly always be cheaper after the fix. The Deutsche Bank trader replied ironically: “ yeah no one else is thinking that : – ?.”
The Deutsche Bank trader this time to another HSBC trader: “everyone shrt into the fix i swear it’s the only time ppl trade,” to which the opposite party at HSBC replied “hahahhahahahahahahahha shocking absolutely shocking.”
The Deutsche Bank trader said to his opposite number at Barclays, “im glad u are now interbank.” Barclays trader: "Why?" Deutsche Bank trader: “it’s a good alliance.”
That day the Deutsche Bank trader informed another trader at Barclays, “im a tiny buyer at the mom.” Barclays trader: “think im buyer too,” Deutsche Bank trader: “means we fix lower.”
An example of further statistical analysis from plaintiff's Third Amended Complaint, TAC is a chart showing UBS spot gold price quotes over the period 2004-2012. The complaint says the bank "used its transactions and substantial presence in the gold market to drive prices downward, thus playing a key role in the conspiracy."
Deutsche Bank's proposed settlement of the London Gold Fix class action amounting to $60 million including the provision of cooperation materials was given the Court's preliminary approval on December 9th subject to a Fairness Hearing. This follows the non-UBS defendant banks of the London Gold Fix; Bank of Nova Scotia, Barclays, HSBC, and Société Générale being ordered in October to face charges in the lawsuit along with London Gold Market Fixing Limited, LGMF a private company owned by the five banks. Deutsche Bank's settlement offer of $38 million including cooperation materials in a similar antitrust lawsuit involving the banks of the London Silver Fix was given the court's preliminary approval earlier.
The new chat evidence in silver and gold described in this and other articles provides the missing narrative to the volumes of statistical analysis incorporated in the original and amended complaints closely scrutinized by court and counsel at the April hearings. It lifts the curtain for once and all on the dirty role of bank suppression in gold and silver markets, and its not just the London Fix. The Court has already acknowledged plaintiffs evidence of symbiosis between the London Fixes and the pricing of other silver and gold products. The Court's preliminary approval of the Deutsche Bank settlements may provide for class claims in bullion, coins, options, futures, spot and other markets including exchange traded funds, ETF's within the US.
The collective evidence also neatly deals with the court's October supposition that further amending the complaint would be "futile."
Given the damming nature of material against UBS particularly, it remains all the more mystifying why the 2014 Swiss Supervisory Market Authority FINMA report into foreign exchange and precious metals trading at UBS said so little comparatively about UBS' precious metals trading misconduct, and specifically nothing about gold trading misconduct. As discussed in an earlier article, the word “gold” is conspicuously absent from the 2014 report.
Were it not for the early moral act of Deutsche Bank in providing the cooperation materials, which presumably gave them a settlement advantage, UBS directors might be sleeping much easier this week. If the remaining non-UBS defendants agree to settle, which is an increasing likelihood, there will be no need for the court discovery scheduled for 2017 and civil trial beyond. In the meantime we wait to see how long UBS hangs in there.
The appearance of a precious metals producer among the class of plaintiffs will also see shareholders and directors reaching for the calculator. SCM is but one of thousands of producers who have sold precious metal in the US throughout the period and like any other plaintiff if the case is successful could be entitled to treble damages with interest if granted standing.
Plaintiffs analysis indicates that manipulation of the London Gold Fix led to average losses of up to four basis points or four hundredths of a percentage point in the gold price on the days affected. Therefore, a small gold producer similiar to SCM with say $500 million of gold sales over 8 years could tally treble claims of $600,000 plus interest.
Supposing as statute 28 U.S.C. 1961 directs, the present Treasury constant maturities nominal- 1-year interest rate currently at 0.83% is applied to this figure over an average sale date midway through the class period of say December 2008, and an optimistic successful conclusion of the lawsuit comes a year from now. Interest then of $54,793.64 could bring a theoretical claim of $654,793.64 for just one class member like this. In this context Deutsche Bank's $60 million, plus the cooperation materials supplied, appear to be money well spent.
- Obama "Housing Recovery" Crushes "Blacks, Young Adults" As Homeownership Rates Crash
The Obama administration has a tendency to conflate the strong performance of Fed-induced "assets bubbles" with "strong economic growth." Unfortunately, as is often the case these days, the "hard data" paints a slightly different picture than the "narrative" being pushed by Obama and his staff.
Per a new report from the Pew Research Center, and as our readers are undoubtedly aware, home prices have indeed recovered to pre-recession levels with a little help from Janet Yellen and crew.
That said, the Obama narrative breaks down from there as further research readily reveals that home prices have recovered despite a massive drop in overall homeownership rates.
Moreover, the folks that seem to have been hit the hardest are the ones that were the biggest supporters of Obama's "Hope & Change" agenda. Per the table below, homeownership rates among "Young Adults" and "Blacks" are down 18% and 16%, respectively, since the peak in 2004. And while that's definitely a big "Change," its somewhat lacking on the "Hope."
But if "mainstreet" Americans didn't drive Obama's housing recovery then who did? Perhaps the following Bloomberg headline can help answer that question:
Yes, the benefits of Obama's "housing recovery" accrued to none other than his "archenemy," Wall Street, which poured $100's of millions into single-family houses on a weekly basis and $10's of billions over the past couple of years.
Adding insult to injury, this massive pace of investment has re-inflated the housing price bubble, making it, once again, nearly impossible for "Young Adults" and "Blacks" to afford homes. And, unlike in 2007 when subprime lending basically erased the need for down payments, homebuyers today are forced to "have some skin in the game" before banks will blindly give them $100,000's of dollars.
But, with the average American having about $3,000 in "financial assets," we're not sure that's feasible.
But, as we always say, who needs facts when narratives are so much more fun.
- Princeton & NYU Professor Warns Of Dangers From Liberal Media's "False Narratives Of A New Cold War"
We’re shut out now. There hasn’t been an op-ed in The New York Times or Washington Post editorial pages arguing that the United States is at least equally to blame for this new Cold War crisis. They simply will not accept those articles…So this is the problem. In a democracy we fight through discourse. If you can’t get to the mainstream media and make the argument, then there’s no way of slowing the drift toward catastrophe.
– Stephen F. Cohen, Professor Emeritus of Russian studies at Princeton University and New York University
Stephen Cohen just recorded an incredibly trenchant interview regarding the extreme dangers of the recent explosion in Russia hysteria with Brian Lehrer on WNYC.
The degradation of mainstream American press coverage of Russia, a country still vital to US national security, has been under way for many years. If the recent tsunami of shamefully unprofessional and politically inflammatory articles in leading newspapers and magazines—particularly about the Sochi Olympics, Ukraine and, unfailingly, President Vladimir Putin—is an indication, this media malpractice is now pervasive and the new norm.
Even in the venerable New York Times and Washington Post, news reports, editorials and commentaries no longer adhere rigorously to traditional journalistic standards, often failing to provide essential facts and context; to make a clear distinction between reporting and analysis; to require at least two different political or “expert” views on major developments; or to publish opposing opinions on their op-ed pages. As a result, American media on Russia today are less objective, less balanced, more conformist and scarcely less ideological than when they covered Soviet Russia during the Cold War.
And sure enough, what has come to pass.
As the following paragraphs published in Politico earlier today show… While the article itself was embarrassingly biased toward standard U.S. government talking points, some valuable history can be found amongst all the noise. Such as the following:
Related was Hillary Clinton’s enthusiasm for NATO’s further expansion into Eastern Europe. That process was based on the well-founded idea that Eastern Europe needed—indeed, was asking for—protection from Russia aggression. But Russia’s military establishment treated it as a slow-rolling invasion of their sphere of influence.
This reaction, too, had its roots under Bill Clinton. An expanded NATO would help ensure democracy, prosperity and stability across Europe, he believed. Moscow took a sharply different view. After one 1994 summit at which Yeltsin gave Bill Clinton his blessing to the addition of new NATO members—including Poland and Hungary, both former Soviet satellites—a communist newspaper fumed about “the capitulation of Russian policy before NATO and the U.S.” One of Yeltsin’s main political opponents said he had allowed “his friend Bill [to] kick him in the rear.” He compared the agreement to the treatment of Germany at Versailles after World War I—a recurring theme among Russian officials since the Cold War’s end.
Some of Bill Clinton’s top advisers correctly predicted that NATO expansion would produce a backlash in Moscow, and would create a handy narrative for would-be nationalists to posture against the West. Clinton’s secretary of defense, William Perry, told POLITICO this summer that he considered resigning over the issue out of concern for its effect on U.S.-Russia relations. But Clinton pressed ahead, kicking off a process that added a dozen new members over the next 20 years, from the Baltic countries of Latvia, Lithuania and Estonia through Eastern Europe (the Czech Republic and Romania) and into the former Yugoslavia—all places where Russia had once enjoyed uncontested influence.
As Obama kept the NATO train rolling, his secretary of state was fully on board. “There can be no question that NATO will continue to keep its doors open to new members,” Clinton said in February 2010.
Now without further ado, here’s perhaps the most important interview you’ll hear all month. Listen and share with everyone you know.
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