- Hispanic-Owned Businesses Dominate Bids For Trump's 'Xenophobic' Border Wall
Trump’s proposed border wall has been described by many of the left as everything from “xenophobic” to just plain “racist” and pretty much everything in between. That said, perhaps “equal opportunity employer” would be more accurate in light of a new analysis from the Wall Street Journal that took a look at who has submitted bids to help construct the wall so far…in a little dose of irony for the left, hispanic-owned businesses currently lead the charge with 32 bids.
More than 200 companies have expressed interest in submitting plans to help design and build a wall along the U.S. border with Mexico, as the Trump administration seeks to fulfill a key campaign promise despite significant obstacles.
The companies, whose names were published on a federal contracting website, vary widely in size and capability—from construction giants like Kiewit Corp. to smaller, family-owned businesses.
Among those interested at this early stage are more than three dozen businesses owned by minorities, a Wall Street Journal analysis shows. Roughly 13% of the companies expected to submit proposals for the wall, for example, are owned by Hispanics.
One such immigrant-owned business bidding on the border wall is run by Mario Burgos whose father immigrated to the U.S. from Ecuador.
Mario Burgos, the son of an immigrant, owns an Albuquerque, N.M., construction logistics company and plans to submit a proposal. He said he viewed the project as more geared toward border security than immigration, and a surefire way to boost employment in job-strapped New Mexico.
“I am not against immigrants by any stretch of the imagination,” said Mr. Burgos, whose father came to the U.S. from Ecuador. “There isn’t a country in the world that doesn’t have borders and doesn’t want to enforce them.”
Mr. Burgos noted that his company, Burgos Group LLC, which holds various defense contracts with federal agencies, has handled projects in southern New Mexico near the border and was familiar with operating in remote, rugged locations.
Meanwhile the owner of Helix Steel said he’s not worried about the potential political fallout, saying “if fighting for American jobs is wrong, I’ll take that risk.”
Other interested businesses have niche specialties, like Leesburg, Va.-based Helix Steel. Chief Executive Chris Doran said Helix’s products, which make concrete more resistant to blasts and other stresses, would suit what he called a “massive opportunity.”
Mr. Doran, whose company has about 50 employees, said he wasn’t concerned with fallout from participating in the project. “All I can say is I’m fighting for American jobs, and if fighting for American jobs is wrong, I’ll take that risk,” he said.
Of course, as we noted last week, just as Trump sent out RFP’s for his impenetrable, yet “aesthetically pleasing”, 30-foot border wall, Mexico’s government warned Mexican companies that it would not be in their best “interests” to participate in the project even though there will be no explicit legal restrictions or sanctions to stop them if they tried. Per Reuters:
“We’re not going to have laws to restrict (companies), but I believe considering your reputation it would undoubtedly be in your interest to not participate in the construction of the wall,” said Mexican Economy Minister Ildefonso Guajardo.
“There won’t be a law with sanctions, but Mexicans and Mexican consumers will know how to value those companies that are loyal to our national identity and those that are not,” Guajardo added.
His comments echo those of Mexico’s foreign minister Luis Videgaray, who said on Friday that Mexican companies that see a business opportunity in the wall should “check their conscience” first.
Seems like the list of ‘racist’ companies in this country is growing very quickly.
- L.A. To Worsen Housing Shortage With New Rent Controls
Authored by Ryan McMaken via Mises Institute,
Los Angeles, home to one of the least affordable housing markets in North America, is now proposing to expand rent control to “fix” its housing problem.
As with all price control schemes, rent control will serve only to make housing affordable to a small sliver of the population while rendering housing more inaccessible to most.
Specifically, city activists hope that a new bill in the state legislature, AB1506, will allow local governments, Los Angeles included, to expand the number of units covered by rent control laws while also restricting the extent to which landlords can raise rents.
Unintended Consequences
Currently, partial rent control is already in place in Los Angeles and landlords there are limited in how much they can raise rents on current residents. However, according to LA Weekly, landlords are free to raise rents to market levels for a unit once that unit turns over to new residents.
This creates a situation of perverse incentives that do a disservice to both renters and landlords. Under normal circumstances, landlords want to minimize turnover among renters because it is costly to advertise and fill units, and it’s costly to prepare units for new renters. (Turnover is also costly and inconvenient for renters.)
By limiting rent growth for ongoing renters, however, this creates an incentive for landlords to break leases with residents — even residents who the landlords may like — just so the landlords can increase rents for new incoming renters in order to cover their costs of building maintenance and improvements. The only upside to this current regime is that at least this partial loophole still allows for some profit to be made, and thus allows for owners to produce and improve housing some of the time.
But, if this loophole is closed, as the “affordable housing” activists hope to do, we can look forward to even fewer housing units being built, current units falling into disrepair, and even less availability of housing for residents.
Why Entrepreneurs Bring Products to Market
The reason fewer units will be built under a regime of harsher rent control, is because entrepreneurs (i.e., producers) only bring goods and services to market if they can be produced at a cost below the market price.
Contrary to the myth perpetuated by many anti-capitalists, market prices — in this case, rents — are not determined by the cost of producing a good or service. Nor are prices determined by the whims of producers based on how greedy they are or how much profit they’d like to make.
In fact, producers are at the mercy of the renters who — in the absence of price controls — determine the price level at which entrepreneurs must produce housing before they can expect to make any profit.
However, when governments dictate that rent levels must be below what would have been market prices — and also below the level at which new units can be produced and maintained — then producers of housing will look elsewhere.
Henry Hazlitt explains many of the distortions and bizarre incentives that emerge from price control measures:
“The effects of rent control become worse the longer the rent control continues. New housing is not built because there is no incentive to build it. With the increase in building costs (commonly as a result of inflation), the old level of rents will not yield a profit. If, as often happens, the government finally recognizes this and exempts new housing from rent control, there is still not an incentive to as much new building as if older buildings were also free of rent control. Depending on the extent of money depreciation since old rents were legally frozen, rents for new housing might be ten or twenty times as high as rent in equivalent space in the old. (This actually happened in France after World War II, for example.) Under such conditions existing tenants in old buildings are indisposed to move, no matter how much their families grow or their existing accommodations deteriorate.”
Thus,
“Rent control … encourages wasteful use of space. It discriminates in favor of those who already occupy houses or apartments in a particular city or region at the expense of those who find themselves on the outside. Permitting rents to rise to the free market level allows all tenants or would-be tenants equal opportunity to bid for space.”
Not surprisingly, when we look into the current rent-control regime in Los Angeles, we find that newer housing is exempt, just as Hazlitt might have predicted. Unfortunately, housing activists now seek to eliminate even this exemption, and once these expanded rent controls are imposed, those on the outside won’t be able to bid for space in either new or old housing.
Newcomers will be locked out of all rent-controlled units — on which the current residents hold a death grip — and they can’t bid on the units that were never built because rent control made new housing production unprofitable. Thus, as rent control expands, the universe of available units shrinks smaller and smaller. Renters might flee to single-family rental homes where rent increases might still be allowed, or they might have to move to neighboring jurisdictions that might not have rent controls in place.
In both cases, the effect is to reduce affordability and choice. By pushing new renters toward single-family homes this makes single-family homes relatively more profitable than multifamily dwellings, thus reducing density, and robbing both owners and renters of the benefits of economies of scale that come with higher-density housing. Also, those renters who would prefer the amenities of multifamily communities are prevented from accessing them. Meanwhile, by forcing multi-family production into neighboring jurisdictions, this increases commute times for renters while forcing them into areas they would have preferred not to live in the first place.
But, then again, for many local governments — and the residents who support them — fewer multifamily units, lower densities, and fewer residents in general, are all to the good. After all, local government routinely prohibit developers from developing more housing through zoning laws, regulation of new construction, parking requirements, and limitations on density.
And these local ordinances, of course, are the real cause of Los Angeles’s housing crisis. Housing isn’t expensive in Los Angeles because landlords are greedy monsters who try to exploit their residents. Housing is expensive because a large number of renters are competing for a relatively small number of housing units.
And why are there so few housing units? Because the local governments usually drive up the cost of housing. As this report from UC Berkeley concluded:
“In California, local governments have substantial control over the quantity and type of housing that can be built. Through the local zoning code, cities decide how much housing can theoretically be built, whether it can be built by right or requires significant public review, whether the developer needs to perform a costly environmental review, fees that a developer must pay, parking and retail required on site, and the design of the building, among other regulations. And these factors can be significant – a 2002 study by economists from Harvard and the University of Pennsylvania found strict zoning controls to be the most likely cause of high housing costs in California.”
Contrary to what housing activists seem to think, declaring that rents shall be lower will not magically make more housing appear. Put simply, the problem of too little housing — assuming demand remains the same — can be solved with only one strategy: producing more housing.
Rent control certainly won’t solve that problem, and if housing advocates need to find a reason why so little housing is being built, they likely will need to look no further than the city council.
- Facial Recognition Tech Could Ensnare Millions Of Innocent Americans For Crimes They Didn’t Commit
Authored by Daniel Lang via SHTFplan.com,
It’s often the case that new technologies arrive on the scene faster than our society and its legal code can keep up. Sometimes this can be a good thing. For instance, 3D printing allows people to print out unregulated gun parts, thus allowing gun owners to circumvent the onerous laws of our government, which has struggled to come up with new laws to restrict the technology.
When technology advances at a breakneck pace however, it can also be quite dangerous for our liberties. This is especially true in regards to privacy. If a new technology makes it easy for the government to track us, you can bet that the government is going to take its sweet time updating the legal code in a way that will protect us from surveillance.
That certainly seems to be the case with facial recognition software. During a recent Congressional Oversight Committee hearing, members of both political parties sounded the alarm on the FBI’s use of the technology, and read the written testimony of Electronic Frontier Foundation senior staff attorney Jennifer Lynch:
Lynch detailed the stunning scope of the FBI’s photo collection. In addition to collecting criminal and civil mug shots, the agency currently has “memorandums of understanding” with 16 states that mean every driver’s license photo from those states is accessible to the agency—without the drivers’ consent. The FBI also has access to photos from the U.S. State Department’s passport and visa records.
Lynch argued that “Americans should not be forced to submit to criminal face recognition searches merely because they want to drive a car. They shouldn’t have to worry their data will be misused by unethical government officials with unchecked access to face recognition databases. And they shouldn’t have to fear that their every move will be tracked if face recognition is linked to the networks of surveillance cameras that blanket many cities.”
“But without meaningful legal protections, this is where we may be headed,” Lynch stated. “Without laws in place, it could be relatively easy for the government and private companies to amass databases of images of all Americans and use those databases to identify and track people in real time as they move from place to place throughout their daily lives.”
All told, law enforcement agencies around the country have access to 400 million photos in facial recognition databases, which are connected to roughly 50% of American adults. Most of these people have never committed a crime, and obviously haven’t given any consent to this.
At first glance it may sound harmless to be in one of these databases. Movies and TV shows make it sound like this technology can help law enforcement swiftly and precisely nab suspects. So what do you have to fear if you haven’t committed a crime? It turns out that in real life, facial recognition is far from perfect.
Internal FBI documents obtained in a Freedom of Information Act lawsuit by the nonprofit Electronic Privacy Information Center indicate that the FBI’s own database, called the Next Generation Identification Interstate Photo System, or NGI-IPS, had an acceptable margin of error of 20 percent — that is, a 1-in-5 chance of “recognizing” the wrong person.
And research published in the October 2015 issue of the scientific journal PLOS ONE by researchers at the universities of Sydney and New South Wales in Australia found that the humans who interpret such data build in an extra error margin approaching 30 percent.
If we ever allow our government to roll out facial recognition cameras on a wider scale, lots of innocent people are going to be hurt. Whether by mistake or by malice, it will become shockingly easy for law enforcement to identify ordinary people as criminals. The surveillance control grid will not only be inescapable, it will be unwieldy and rife with abuse.
It’s often said that you should never trade freedom for safety. In this case, we wouldn’t receive any kind of safety.
- Is Public Equity A Broken Concept?
Submitted by Nick Colas of Convergex
Is Public Equity A Broken Concept
David Einhorn’s proposal to GM that it split its stock into dividend and capital appreciation shares got us thinking about the bedrock principles of public equity ownership. Other catalysts for this examination: recent IPO SNAP’s lack of shareholder voting rights, the reluctance of venture capitalists to list their “Unicorns”, and the dearth of IPOs generally. The critical question here is “Does the traditional one-size-fits-all model of publicly-held equity still work in a world that increasingly values customization?” Further, will other social and economic trends force a change in this structure, such as aging demographics in the US population and the investment-heavy nature of major technological developments like autonomous cars, workplace automation, and artificial intelligence? Bottom line: “public equity” needs to be a fluid concept that responds to the changing needs of both providers and users of capital.
If it is true that we learn the most from our mistakes, then I would posit that we can glean a lot of useful information from analyzing troubled industries rather than just focusing on commercial “Winners”. For example, I have studied the US auto industry for the last 25 years as both a sell side and buy side analyst, and more recently in the context of the macro work I do in these notes. It has been an education that has served me very well, even if the group has historically presented limited long term investment potential.
Here is a summary of everything I know about this auto industry:
- Demand is economically sensitive and volatile in major markets like the US, Europe and Japan. Since it takes years to design a new vehicle and that process is expensive, automakers have high fixed costs. This leads to significant variability in earnings over a typical economic cycle and the threat of bankruptcy in a bad downturn is real. “Hot” product offerings can mitigate this pressure, but not reliably so.
- There is too much supply. The auto industry employs a lot of people both in final assembly and in the supply chain. These tend to be good-paying jobs, which means governments are perennially throwing money at car companies to set up shop in their jurisdiction. Moreover, those same governments don’t ever want to see a plant close. This makes capacity very sticky, and in some places like Europe there are still too many auto plants.
- Those two factors make it very hard to earn a decent return on capital over a cycle. Boom times bring excellent free cash flow, but those earnings are later consumed by the lean years. As a result of both industry structure (point #2) and company-specific earnings volatility (point #1), public equities in the sector tend to have very low normalized valuations.
I was therefore intrigued by investor David Einhorn’s proposal, made public today, to split GM’s stock into two pieces: a dividend paying equity and a capital appreciation “stub”. To be clear, I have no idea if it would improve the company’s equity market valuation. You can read a description here and see the slide deck from his firm, Greenlight Capital, as well: http://www.zerohedge.com/news/2017-03-28/david-einhorns-presentation-how-gm-can-unlock-between-13-and-38-billion-value
Einhorn’s proposal got me thinking about the nature of public equity capital. His thesis is that GM’s equity does not have a clean and distinct ownership base. Dividend-seeking investors are put off by the company’s share buyback program since it drains cash for purposes they don’t value, and capital appreciation-focused investors would prefer that GM just use all their cash generation to repurchase shares. Split the stock and the conflict goes away, or so the idea goes.
Regardless of the merits of the idea for GM, Greenlight’s proposal raises a provocative macro question: “Is a one-size-fits-all equity structure really the best approach to both maximizing corporate value and giving shareholders the types of investments they desire?” Once you pose the question that way, a raft of other capital market trends pop up:
- Voting rights. The vast majority of public stocks feature a “One share, one vote” structure of corporate governance. Shareholders can elect Boards, vote on major corporate actions like takeovers and mergers, and lobby for changes in management if they feel the business is being mismanaged.
- The recent high-profile SNAP IPO had an unusual feature, however: no voting rights at all. While novel, this is the continuation of a trend among technology companies, which in many prominent cases have dual classes of stock with different voting rights. The intention here is to limit public shareholders’ traditional rights in favor of management’s/core shareholders’ long term business plans and judgment.
- Dearth of IPOs. Look at a long term chart of the number of Initial Public Offerings in US markets, and you’ll see a significant decline in the number of new issues from the 1990s to now. The good times were in the late 1990s, of course, when it was customary to see 30-80 IPOs per month. Now, that number is more like 10-20.
- Venture capital’s reluctance to list “Unicorns”. You might argue that capital markets are simply more selective now and the 1990s IPO cycle was an outlier. But then why are so many truly revolutionary companies like Airbnb, Uber, Lyft, Palantir, and other “Unicorns” all still private? These are transformational businesses, but the venture capitalists that fund them see no need to take them public.
Now, I am sure that Uber’s shareholders are happy just now that the company isn’t subject to the daily vagaries of the stock market, but on balance the absence of “UBER” as a symbol on the NYSE or the NASDAQ is troublesome.
At its core, the social compact between public equity markets and society is simple: over time, any investor should have access to the equity of important enterprises created by that society. If that isn’t happening by virtue of some misalignment of incentives, then those need to be fixed. The alternative – that the winners stay private but the losers are public – is untenable. Investors will choose to hoard cash and capital will slowly stop circulating to its best possible use.
Given the pace of innovation that seems to be on its way, this problem may only get worse. If the futurists are correct, there are several societal sea changes just over the horizon, from artificial intelligence to workplace automation to driverless cars, all in various stages of development. The home for that capital right now too often has a Sand Hill Road address rather than 11 Wall Street.
We’ve come a long way from what now seems like a pretty humble proposal regarding one car company, so let’s put on bow on all this. A few summary points:
- For all the innovation on offer in American industry, the concept of public equity is perhaps overly reliant on an outdated concept where one equity security with proportional voting rights is the only flavor available. It is, at least, a topic worth discussing.
- Investors, in their role as consumers, are used to custom solutions in every facet of their life – so why not think about how to apportion the value of a company to fit their needs? Yes, equity and debt are the traditional solutions. But why do you think Exchange Traded Funds are so popular? In part it is because they target investor needs in creative ways. Corporate boards and investment bankers might take a page from that book.
- Demographics and technology may force the issue. An aging US population might embrace novel approaches to accessing the corporate cash flows of public companies. And if there is a new wave of innovation ready to drop on us, the only nature hedge might be to have access to the equity of those businesses. Even if they don’t carry voting shares or other traditional features.
Now, one caveat: all of this needs sufficient regulation to curtail abuse. The mortgage market of the early 2000s is the cautionary tale here, of course. Changes to the notion of public equity need careful scrutiny to make sure disclosures are complete and structures are sound.
But in the end, “Equity” will need to evolve in the same way everything else does in a capitalist society – in a way that serves both investors and users of capital.
- China Manufacturing PMI Jumps To Five Year High
China’s reflation story (on the back of a record amount of debt created last year) was put on display on Friday morning when both the Chinese manufacturing and non-manufacturing PMI rose more than expected, with the Manufacturing PMI rising to a level not seen since April 2012. According to the NBS, China’s Mfg PMI rose from 51.6 to 51.8 in March, the highest in almost five years, and above the 51.7 consensus estimate, while the non-manufacturing PMI also jumped, rising from 54.2 to 55.1, the highest in two years.
The National Bureau of Statistics reported that New Orders rose from 53.0 to 53.3 while new export orders rose to 51, the highest since early 2012. Broken by firm size, the state-measured PMI showed largest enterprises were the strongest at 53.3, followed by medium-sized companies, while small firms remained in contraction at 48.6. Perhaps the most notable internal metric was the employment index, which hit the 50 level for the first time since May 2012, marking the first time the manufacturing sector has not lost jobs in nearly 5 years.
As the chart below shows, the catalyst for the move higher has been the recent surge in producer prices, which have soared as much as 7% Y/Y on the back of soaring commodity prices; both have since peaked and it is expected that in the coming months, China’s inflationary pressures will subside especially given the recent efforst by Beijing to reign in out of control credit, especially shadow, issuance.
A subindex for construction activity rose in March for the first time since the start of the year, hitting 60.5. As a reminder, and as Deutsche Bank explained two weeks ago, the only thing that matters for both China, and the rest of the world, is making sure China’s housing bubble, as explained in “Why The Fate Of The World Economy Is In The Hands Of China’s Housing Bubble,” does not burst.
“The first quarter is off to a good start,” said Wang Qiufeng, an analyst at China Chengxin International Credit Rating in Beijing, quoted by Bloomberg. “The upbeat momentum may last through the first half of this year, as the government is pushing investment.”
“The fact that the real strength is with the non-manufacturing PMI suggests that there’s fundamentally a good story going on here,” said James Laurenceson, deputy director of the Australia-China Relations Institute at the University of Technology in Sydney. “Manufacturing is where you’d expect to see the effects of stimulus showing up.”
So is China worried by the potential inflationary signals carried by today’s PMI prints? Oh yes, which is why the PBOC did not conduct a reverse repo liquidity injection for the sixth consecutive day, saying in a statement that the liquidity level if “relatively high” despite traditional month-end liquidity demands; as a result in the past 6 days, the PBOC has now drained some 320 billion yuan from the banking system.
In recent days this has led to a sharp move higher in various repo tenors, most notably the benchmark 7-Day repo, which on Thursday fell w bps to 2.81%, but has jumped sharply in the past week as interbank funding problems have emerged, leading to the biggest drop in months in the Shanghai composite index overnight. Keep an eye on the the repo market in Friday’s session for any acute liquidity shortages, especially since China’s onshore market is closed on Monday and Tuesday.
- How To Protect Your Online Privacy Now That Congress Sold You Out
Authored by Eric Limer via Popular Mechanics
All your private online data—the websites you visit, the content of your chats and emails, your health info, and your location—just became suddenly less secure. Not because of hackers, but because Congress just blocked crucial privacy regulations. This will allow your internet service provider to collect all your data and sell that info to the highest bidder without asking you first. Welcome to a brave new world.
A pair of resolutions, which passed through the Senate and House with exclusively Republican votes, roll back rules proposed by the Democratic leadership of the Federal Communications Commission during the Obama administration which, though passed in October, had not yet gone into effect.
The rules—which will be completely dead following the expected signature of President Trump—would have required ISPs to get explicit opt-in approval from customers before selling the following “sensitive data”:
This doesn’t just mean that sharing that information without your explicit permission will be fine and dandy. Since the rules were rolled back through the Congressional Review Act, the FCC is also barred from creating any “substantially similar” rules down the line.
In theory, the information collected will be stored under some sort of ID separate from your actual name. But that’s a cold comfort considering the level of detail in this sort of information would make your identity a dead giveaway, and ISPs can hardly be trusted to keep your identifying information suitably safe from prying eyes. After all, they’ll be building dossiers any hacker would love to steal.
What to do? There are a few things you can do to try and keep your data safe, and while they aren’t necessarily easy or free, they’re worth it if you value your privacy.
Opt out with your ISP
Your ISP may not need your permission to sell your data, but you can still go to them and tell them not to do it. The catch, of course, is this requires you to be proactive, and there’s no real guarantee that this will protect you completely. Still, do it. Get on the phone or visit the website of your ISP and opt out of every ad-related thing—and into every privacy-related thing—you can find. The process can be a little arduous—often requiring the use of your ISP-given email address that you probably never use—and it may not take effect immediately either. All the better reason to do it now.
Time Warner/Spectrum customers can find their privacy dashboard here. Comcast customers can opt out of some targeted programs using these instructions. Verizon customers can find opt out options here. Remember, your phone company is technically an ISP too, so look up your options on that front as well.
Opting out is an important first step, but it is not enough to actually preserve your privacy. Your ISP is not necessarily giving you the opportunity to opt out of all its ad-targeting programs. As the policy counsel at the Open Technology Institute, Eric Null, told Gizmodo, it is “highly unlikely” the new FCC will go after ISPs that aren’t offering robust opportunities to opt-out.
Some smaller ISPs, which survive on small and satisfied customer bases as opposed to a large and captive audience, are more incentivized to protect your privacy with gusto. In fact, a whole host of small ISPs wrote a letter to Congress opposing this move. If you’re lucky enough to have the option of switching to one, now might be a good time.
Keep your data out of your ISP’s hands in the first place
Your ISP is uniquely suited to snoop on your information. Anything you put online has to pass through its hands. Email you send through Gmail, chats through Facebook Messenger—they all travel through your ISP before they reach the service that actually sends them on. But while it is impossible to cut your ISP out of this exchange entirely, you can hide the data as you are sending it.
Apps with end-to-end encryption can encrypt your private information on the phone or computer you’re using, ensuring that it is coded and protected through the entire delivery process. So while your ISP can see the data go by, they can’t make sense of it.
Secure chat apps like Signal will be crucial to keep your chats private not only from the government and hackers, but from your ISP. Just make sure these services have security measures that are open-source and trusted by experts who can help keep them honest. You can also encrypt data manually, using a standard like PGP, before you send it off into the web, but it can be an arduous process, because you have to ensure that the recipient has the means to decode that info and read it.
The most seamless solution is to pay for a Virtual Private Network—a VPN—which allows you to encrypt all the data that passes through your ISP. This means that while your ISP is still doing the work of hauling your data around, it can’t understand any of it. The downside to this is that VPNs (at least any VPNs you can trust) are not free. Most good ones will require a yearly subscription. Furthermore, you aren’t hiding your personal data from everyone, you are just entrusting it to the VPN instead of your ISP, so do your research and choose a VPN you trust not to sell you out. Fortunately, since VPNs exist exclusively to keep your data private, they are pretty incentivized to keep you happy.
The only one you can really trust to protect you is you.
The short and uncomfortable truth is this: Until more robust privacy protections are put in place, the burden of protecting your online data falls on you. Keep it in mind, do your research, and remember that your monopolized ISP has every reason in the world to sell you out and wring your data for every dime that it is worth. The only one you can really trust to protect you is you.
- Starbucks Will Never Learn: New Program Encourages "Bipartisan Coffee Drinking"
Seemingly no amount of brand destruction will ever be sufficient to convince Starbucks CEO Howard Schultz that while most adult-aged Americans seem to like his company’s coffee, roughly 50% of them couldn’t give a flying flip about his leftist political opinions that he’s constantly try to shove down their throats along with their morning java.
The latest gimmick comes via a partnership with Boston-based startup “Hi From the Other Side” and offers free coffee to people with opposing political opinions who agree to meet up at Starbucks to “engage in a civil conversation” about their political differences. Per The Hill:
Participants who sign up (there’s currently a waitlist) for the app through Facebook are paired up with another local from the opposing political party.
The app brings together “nice people across the political divide to talk like neighbors. Not to convince, but to understand,” the Hi From the Other Side website states. The company says it’s “hopeful there are people who really want to engage in a civil conversation.”
As part of a recently launched, limited promotion, the startup says those who sign up and are matched will receive a Starbucks e-gift card.
“This means you’ll have to show up and work together to unlock the gift card!” according to its site.And here’s “Hi From the Other Side’s” take on the program:
“Hi From The Other Side has a way for you to make a connection over a great cup of coffee at Starbucks. If you are one of the first to be matched during this limited offer, you will receive a Starbucks e-gift card to redeem together at a nearby store. This means you’ll have to show up and work together to unlock the gift card!”
Of course, all of this comes just a few weeks after Schultz’s public announcement to hire 10,000 refugees, a clear shot at the Trump administration’s immigration policies, seemingly backfired with his “brand perception” taking a sudden and massive hit (we wrote about it here: “Starbucks’ ‘Brand Perception’ Takes A Massive Hit After Announcing Plans To Hire 10,000 Refugees“).
Credit Suisse’s Restaurant team, led by Jason West, also took note of the constant damaging political campaigns and warned that Schultz’s refugee stunt could cause the company to miss upcoming same-store-sales estimates.
We have analyzed online “net sentiment” data (positive vs. negative online mentions) provided by NetBase to gauge changes in Starbucks’ brand perception. This follows recent media reports that SBUX’s decision to hire 10,000 refugees over the next five years could have upset some customers, perhaps negatively impacting sales trends. Our work shows a sudden drop in brand sentiment following announcement of the refugee hiring initiative on Jan. 29th, to flattish from a run-rate of ~+80 (on an index of -100 to +100). Net sentiment has since recovered, but has seen significant volatility in recent weeks. While this is only one data point, the analysis leaves us incrementally cautious on SBUX’s ability to meet consensus US SSS forecasts, which call for SSS to accelerate from +3% in F1Q17 (Dec. qtr.) to ~+3.5% in F2Q and ~+5.5% in 2H17.
Potential impact to F2Q SSS: NetBase data show that net sentiment remained depressed for 10 days in late Jan. and early Feb. and was particularly volatile through the remainder of Feb. We see potential for a scenario in which US SSS slowed for a few weeks following news of the refugee hiring initiative, negatively impacting full-quarter SSS by ~70-80bps under a reasonable bear case. This assumes that (1) SSS during the initial 10-day stretch were ~flat, (2) SSS averaged +2% during the remaining 3 weeks of Feb. (when net sentiment saw particularly high volatility) and (3) SSS during the rest of the qtr (Jan. and Mar.) average +3.5% (in line with consensus forecasts for F2Q), putting F2Q US SSS at ~+2.8%. We caveat that we found little to no correlation over longer time periods between the net sentiment data and US SSS. However, in our past work on Chipotle (CMG: Neutral), we found that large and sudden spikes in net sentiment coincided with similar shifts in SSS trends.
For those who missed it, here are some excerpts from the politically charged message drafted by Schultz to his employees with “deep concern and a heavy heart”:
I write to you today with deep concern, a heavy heart and a resolute promise. Let me begin with the news that is immediately in front of us: we have all been witness to the confusion, surprise and opposition to the Executive Order that President Trump issued on Friday, effectively banning people from several predominantly Muslim countries from entering the United States, including refugees fleeing wars. I can assure you that our Partner Resources team has been in direct contact with the partners who are impacted by this immigration ban, and we are doing everything possible to support and help them to navigate through this confusing period.
Hiring Refugees: We have a long history of hiring young people looking for opportunities and a pathway to a new life around the world. This is why we are doubling down on this commitment by working with our equity market employees as well as joint venture and licensed market partners in a concerted effort to welcome and seek opportunities for those fleeing war, violence, persecution and discrimination. There are more than 65 million citizens of the world recognized as refugees by the United Nations, and we are developing plans to hire 10,000 of them over five years in the 75 countries around the world where Starbucks does business.
Building Bridges, Not Walls, With Mexico: We have been open for business in Mexico since 2002, and have since opened almost 600 stores in 60 cities across the country, which together employ over 7,000 Mexican partners who proudly wear the green apron. Coffee is what unites our common heritage, and as I told Alberto Torrado, the leader of our partnership with Alsea in Mexico, we stand ready to help and support our Mexican customers, partners and their families as they navigate what impact proposed trade sanctions, immigration restrictions and taxes might have on their business and their trust of Americans.
Apparently nothing will ever convince some of America’s leftist billionaires that, no matter how rich they become, they will never be able to force their political opinions on Americans who see through their propaganda…just ask all the rich people that just lost a fortune trying to elect Hillary.
- "He Certainly Has A Story To Tell" – Statement From Mike Flynn's Lawyer
Hot on the heels of the WSJ report that Trump’s former National Security Advisor, Mike Flynn, has offered to testify in exchange for immunity from prosecution, Flynn’s lawyer, Robert Kelner of the law firm Covington, issued the following statement, in which judging by Kelner’s language, Flynn’s offer is not so much to “turn” on Trump, as to set the record straight, while putting an end to the ongoing “media witch hunt”, to wit:
the media are awash with unfounded allegations, outrageous claims of treason, and vicious innuendo directed against him. He is now the target of unsubstantiated public demands by Members of Congress and other political critics that he be criminally investigated. No reasonable person, who has the benefit of advice from counsel, would submit to questioning in such a highly politicized, witch hunt environment without assurances against unfair prosecution.
It is also notable that Flynn’s lawyer does not explicitly mention a request for immunity as the WSJ reported, instead it merely requests an environment which assures against “unfair prosecution.”
The full statement by Robert Kelner is below
Counsel to Lt. General Mike Flynn (Retired)
General Flynn certainly has a story to tell, and he very much wants to tell it, should the circumstances permit.
Out of respect for the Committees, we will not comment right now on the details of discussions between counsel for General Flynn and the House and Senate Intelligence Committees, other than to confirm that those discussions have taken place. But it is important to acknowledge the circumstances in which those discussions are occurring.
General Flynn is a highly decorated 33-year veteran of the U.S. Army. He devoted most of his life to serving his country, spending many years away from his family fighting this nation’s battles around the world. He was awarded four Bronze Stars for actions in Iraq, Afghanistan and elsewhere in the war on terror. He received the Legion of Merit twice, and the Defense Superior Service Medal four times. He is a recipient of the Defense Department’s Distinguished Service Award and the Intelligence Community Gold Seal Medallion for Distinguished Service, as well as numerous other decorations.
Notwithstanding his life of national service, the media are awash with unfounded allegations, outrageous claims of treason, and vicious innuendo directed against him. He is now the target of unsubstantiated public demands by Members of Congress and other political critics that he be criminally investigated. No reasonable person, who has the benefit of advice from counsel, would submit to questioning in such a highly politicized, witch hunt environment without assurances against unfair prosecution.
h/t @ChuckRossDC
- Is War Between U.S. And China Brewing In The South China Sea?
Authored by James Holbrooks via TheAntiMedia.org,
Adding fuel to an already highly combustible situation in Southeast Asia, Reuters reported Tuesday that China has “largely completed major construction of military infrastructure on artificial islands it has built in the South China Sea,” and that the Asian superpower “can now deploy combat planes and other military hardware there at any time.”
Citing satellite imagery analyzed by the Asian Maritime Transparency Initiative, part of Washington, D.C.’s Center for Strategic and International Studies, the news agency writes that “work on Fiery Cross, Subi and Mischief Reefs in the Spratly Islands included naval, air, radar and defensive facilities.”
Sticking to the mainstream narrative that China is an aggressor in claiming sovereign rights to the majority of the South China Sea, Pentagon spokesman Commander Gary Ross says the new images confirm what the U.S. military already knows.
“China’s continued construction in the South China Sea is part of a growing body of evidence that they continue to take unilateral actions which are increasing tensions in the region and are counterproductive to the peaceful resolution of disputes,” he told Reuters.
China, as it has repeatedly, downplayed this notion and stuck to the position that it’s simply erecting defensive infrastructure within its own borders, as would any nation.
“As for China deploying or not deploying necessary territorial defensive facilities on its own territory, this is a matter that is within the scope of Chinese sovereignty,” Foreign Ministry spokeswoman Hua Chunying said at a press briefing Tuesday.
Despite comments such as these — and the very real fact that China hasn’t actually invaded anyone — the corporate media jumped on the news of the new images.
Forbes, for instance, ran a piece that essentially listed all the reasons why China is a really bad actor in the region, and CNN talked to analysts who explained how the military buildup on the artificial islands will be gradual as China continues to exert its authoritarian influence over neighboring countries.
That’s the narrative. Believe as you will.
But the reality of the situation in the South China Sea – all geopolitical analysis aside – is that there’s about to be a hell of a lot of military hardware in those waters.
As Anti-Media has been reporting, U.S. forces are already in the region, taking part in joint drills with ally South Korea that will last until the end of April. Then, at the beginning of May, Japan — another U.S. ally — will sail its navy’s most powerful warship through the South China Sea on a three-month tour.
That means that just as the joint drills with South Korea end — which, incidentally, units from Delta Force, the Navy SEALS and Army Rangers are taking part in — Japan will shove off a warship aimed at waters claimed by China.
If that timing seems a little curious, also consider that the U.S. just deployed its Terminal High Altitude Area Defense (THAAD) missile system in South Korea, which both China and Russia cared none too much for.
With China showing no signs of backing away from its stance in the South China Sea — both ideologically and physically — and with the corporate media willing and eager to push the “evil China” narrative that the U.S. military appears hell-bent on capitalizing on, it appears the long-dreaded collision course with China may, indeed, be not far off on the horizon.
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