Turkish election officials have thrown out the results of an election for Istanbul’s mayor. Turkey’s ruling AKP party contested the election after the results showed them losing the mayor’s seat for the first time in 25 years. Mehmet Bekaroğlu, a member of the CHP party, whose candidate won the election, said AKP officials threatened election officials with prison if they did not vote to overturn the election. A new mayoral election will be held in June.
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The technology bankers at Morgan Stanley are probably regretting all of the work they put in to steal the coveted ‘lead left’ spot in the Uber IPO from Goldman.
Though the bank will still take home a sizable chunk of the underwriting fees, minus whatever they’ve been obligated to spend to try and ‘stabilize’ the stock, according to Bloomberg, Morgan’s hopes to strengthen ties between its wealth management business and its investment-banking side have been dealt a serious setback.
As Uber shares head lower for the second day, Bloomberg reports that Morgan’s wealth-management clients are already grousing about the company’s poor performance. Not only was the Uber IPO a money-loser right out of the gate for anybody who bought in once the shares started trading, but the loss brooked by Morgan insiders was amazingly even larger: According to BBG, Morgan’s private wealth management clients were offered a chance to invest in the Uber IPO via a fund called New Riders LP, which provided exposure to Uber at $48.77 a share, with holdings set to Class A stock in the IPO.
If you bought Uber at $48.77, your total loss at $40 a share would be 18% (compared with 11% for anybody who bought at $45).
For most of the bank’s private wealth clients who bought in to the fund, those losses likely tally in the thousands, if not millions, of dollars. The minimum investment amount was $250,000, andMorgan said clients could be charged up to 2% of the money they committed to the fund, just for the opportunity.
Morgan Stanley wins underwriter of the year award for screwing its clients out of the gate
Though some have blamed Uber’s post-IPO stumble on a confluence of factors including rising trade tensions with China and a weak Q1 earnings report from Uber rival Lyft, if the stock doesn’t turn around soon, Morgan might find one of its biggest advantages in its underwriting business – its network of wealthy clients eager to kick in capital – could instead become a liability, as the memory of Uber-related losses might make those same clients hesitant to commit capital before the next big tech IPO.
Years ago, Goldman offered its wealth-management clients convertible notes that could be redeemed at a discount to the IPO price, which might raise more questions from MS clients about why Goldman’s clients got the better deal, even though their bank lost out on the leader underwriter position.
Since their shares are restricted, Morgan’s clients now have 180 days to hope for a turnaround in Uber shares.
Turkish election officials have thrown out the results of an election for Istanbul’s mayor. Turkey’s ruling AKP party contested the election after the results showed them losing the mayor’s seat for the first time in 25 years. Mehmet Bekaroğlu, a member of the CHP party, whose candidate won the election, said AKP officials threatened election officials with prison if they did not vote to overturn the election. A new mayoral election will be held in June.
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With trade war between the US and China suddenly raging after a 5 month ceasefire, and on the verge of turning nuclear with China’s Global Times reporting that Beijing is contemplating selling “some treasuries” as part of its response, the Chinese yuan is in freefall as trader expect the PBOC to sharply devalue the currency to offset some or all of the tariff hike using a weaker currency.
Commenting on the yuan plunge this morning, Nomura’s Charlie McElligott notes that the Offshore Chinese Yuan is “being hammered”, as offshore yuan implied vol explodes higher…
… and 1m 25d riskies surging to 2.5 year highs, as the market prices-in further Yuan weakness “anticipating that the Chinese will use it to boost exports and offset negative implications of tariff barriers…
… with again-heightening ‘rate cut’ potential into further economic slowdown risk, which always-ironically helped keep the overnight downside move in Chinese Equities relatively ‘in check’).”
It’s not just China’s yuan: as the Nomura quant writes, broad EMFX is also in a very tough spot, as
the US trade row with China (and expectations of Chinese retaliation to the detriment of global trade) in conjunction with
US Dollar index hovering near 15 year highs (ongoing Fed B/S QT, Fed policy rate at 11 year highs and surging UST issuance sap USD liquidity) and
Crude now reaccelerating higher on the Saudi tanker “sabotage” and various supply-pressures makes for a very challenging backdrop, as the inflationary pressures on the Crude exporting EM countries makes it difficult for their central banks to cut rates
So where is some of this EM outflow heading? The answer: crypto — as the uncanny correlation between the Yuan and Bitcoin in the chart below shows — seems like a reasonable conclusion, “as EMFX currencies are at risk of rising CB rate cut risk and destabilizing currency outflows.”
Or, as McElligott shows, here is Bitcoin and offshore Yuan.
Not only is bitcoin now up almost 100% YTD, but the entire crypto space is sharply higher.
In short, crypto bulls have two things to thank: Trump, for now conceding defeat to Beijing, and trade war with China in general, which now appears will only get worse before it gets, well, even more worse.
via ZeroHedge News http://bit.ly/30kgbNd Tyler Durden
National Economic Council Director Larry Kudlow admitted on Sunday that American importers and consumers would have to pay the tariffs on Chinese imports, completely contradicting President Trump’s claims that China pays the duties.
On Fox News Sunday, two days after the US-China trade deal fell apart, anchor and political commentator Chris Wallace pressed Kudlow: “It’s not China that pays the tariffs, it’s the American importers, the American companies that pay what, is in fact, a tax increase.”
“Fair enough,” Kudlow responded. “In fact, both sides will pay. Both sides will pay in these things.”
Kudlow added, however, it isn’t China paying the tariffs, but suggests China’s GDP will suffer “with respect to a diminishing export market.”
“This is a risk we should and can take without damaging our economy in any appreciable way,” Kudlow said.
After much theatrics and 11th-hour negotiation, the US doubled tariffs to 25% on $200 billion in imports from China just after midnight on Friday. Then in an unexpected Friday evening development (after market hours of course) – President Trump began the process of raising tariffs on all remaining imports from China, valued at approximately $300 billion.
“Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China of 25% on 250 Billion Dollars worth of goods & products,” Trump tweeted Friday morning. “These massive payments go directly to the Treasury of the US.”
And Saturday, Trump hinted that the US was “collecting” tariffs from China.
“Would be wise for them to act now, but love collecting BIG TARIFFS!” Trump said in a tweet.
Trump must be confused about who pays custom duties (or maybe he can’t break the news to the deadbeat consumer ahead of an election year), as the US imposes increased tariff rates on Chinese goods. The tax is levied at the time of import and is paid by the American importer of record, and then passed onto consumers.
A new report from Oxford Economics, revealed that the 25% tariff rate on $200 billion in good imports from China would cost the economy $62 billion in economic output by next year, which translates to an equivalent loss of $490 per household.
The research firm estimates that a tariff on all imports from China would cost the economy about $100 billion by 2020, which translates to an equivalent loss of $800 per household.
The announced tariffs have come at a somewhat inconvenient time for the economy.
Economic growth is rapidly decelerating besides Kudlow’s bullish propaganda remarks, and the US faces continued headwinds from monetary policy tightening and actual fiscal drag in 2020.
Trump has stated that trade wars are “good and easy to win” and believes tariffs are the only solution to force China to make a deal.
The effects of the trade war are being felt by industries across the country, from farmers in the Midwest to auto manufacturers in the Rust Belt.
Senator Rand Paul told host George Stephanopoulos on Sunday that he’s “very concerned” that the trade war will depend and end up hurting consumers, farmers, and manufacturers.
“I know of a big company that told me that the tax cuts specifically helped them but that the tariffs are almost equal in punishing them,” Paul said, referring to the Republican-led tax overhaul passed in 2017. “The farmers in Kentucky are concerned about the tariffs, and I’ve talked to the administration about this. . . . The longer we’re involved in a tariff battle or a trade war, the better chance there is that we could actually enter into a recession because of it.”
Henry M. Paulson Jr., who was treasury secretary under President George W. Bush, spoke with “Face the Nation” on Sunday and said, “we don’t have many good tools” to pressure China into a deal but warned tariffs aren’t an ideal choice.
“They’re a tax on the American consumer,” said Paulson. He added: “Will it hurt us? If this persists too long, it will. There’ll be a cost to it.”
If President Trump ever admitted to his base that they were the ones paying the tariffs, not the Chinese, well, his base would be in an uproar, could jeopardize his 2020 run. So in the meantime, President Trump is keeping the American people content with fake news tweets while slowly pushing out Kudlow to spill the beans.
via ZeroHedge News http://bit.ly/2Yr9CXk Tyler Durden
I have been highly critical of the Profitless Prosperity Sector(a.k.a the Ponzi Sector). The sector consists of companies that are effectively Ponzi Schemes; in that they have accelerating losses but show blistering growth rates in order to attract new capital. This all worked fine when companies kept their free floats small enough to be manipulated like Tesla (TSLA – USA) or stayed private and used artificial transactions to mark-up equity values to loot various Middle Eastern princelings and other pockets of dumb money, like Softbank (9984 – Japan).
Now with the UBER (UBER – USA) IPO, the Ponzi Sector may finally be peaking.
On Friday, May 9, we saw conclusive proof that there simply isn’t enough dumb money left to fund endless operating losses, while simultaneously absorbing all the VC shares that are desperately seeking exits before their various Ponzi Schemes detonate. Remember, a Ponzi Scheme dies when more money goes out than comes in. This is especially true of schemes that rely on greater fool theories where most purchasers feel that they are “in on the scheme,” and will sell out to someone stupider than them in the future. When it becomes obvious that there are no more “bag-holders,” look out below.
I have been in the equity markets for two decades and have seen many failed IPOs where a stock broke pricing. I cannot remember an IPO that was this prominent where the stock didn’t at least open for trading at the IPO price. Hell, UBER never even traded a single share at the IPO price. This means that anyone who bought the IPO now has a loss. Even many of the VCs who bought in late stage, pre-IPO rounds are staring at losses. Retail investors may be stupid, but they’re still Pavlovian—if Ponzi Sector IPOs trade up, they’ll keep chasing them; with hefty losses on LYFT and now UBER, they are going to be gun-shy. Who else is going to buy this crap? A lot of anxious Ponzi Sector financiers are suddenly wondering the answer to that question.
Looking back to 2000, I remember that the tech bubble didn’t quite pop after the blow-off top. Rather, it deflated a bit and chopped around in a range. It was the endless rounds of insider lock-up expirations during the fall, that killed the bubble. You see, many of these companies had IPOs where tiny percentages of the float would list, the shares would rocket as crooked analysts promoted the stock and day-traders using margin accounts lifted offers. Within weeks, these things would trade with valuations in the billions. Then, 6 months later, tens of millions of shares would unlock and the insiders would sell as fast as legally possible. When your cost basis is a nickel, do you care if you get $200 or $100 or even $10 a share? You just sell, and you sell even faster if you know the company needs to raise additional equity capital to make payroll.
If you think of the Ponzi sector as a discrete asset class with a finite supply of dumb capital ultimately allocated to it; then every time there is another IPO or capital raise, that finite pool of capital is stretched further. To fund one Ponzi Scheme, investors must either use leverage or sell some other Ponzi Sector bellwether—which may be why many of the Ponzi Sector stalwarts are beginning to leak lower. Now that the big IPOs are coming, they are running out of dumb capital to absorb it all—even before we get to multi-billion-dollar recurring capital raises and insiders dumping en masse.
It is said that they don’t ring a bell at the top. Instead, in the “bubble economy,” LYFT uses newly raised shareholder capital to endlessly blast you with $5 single-use vouchers (thanks bag-holders; I won’t have to pay for a ride for years into the future).
I don’t short, I very rarely buy puts. However, if Uber cannot regain the IPO price in the next few days, I think the top is in for the Ponzi Sector. In that case, I have a long list of money-losing scams to get short—especially as they near lock-up expirations.
Stay tuned, the back half of 2019 may turn out to be a whole lotta fun…
via ZeroHedge News http://bit.ly/2JgBUjH Tyler Durden
The recent race for a seat on the Louisiana Supreme Court between two sitting judges, Judge Marilyn Castle on the trial court and Judge Jimmy Genovese on the appellate court, was especially contentious. Campaign ads in the print and broadcast media funded by special interest groups escalated, costing the respective candidates’ campaigns large sums of money. Such a campaign ad is the focus of the case before us, only the ad was directed by a candidate not against her opponent and not even against the PAC supporting her opponent, but directed against specifically named lawyers who contributed to the PAC.
In the ad at issue, The Committee to Elect Judge Marilyn Castle, designed, authorized and ran an ad that specifically listed named lawyers who concentrate in the area of plaintiff personal injury litigation, claiming that her opponent’s judicial *impartiality had been compromised. The ad specifically named trial lawyers who “unethically” contributed large sums to his campaign, bypassing campaign finance limits on contributions by creating a special PAC to donate large sums to her opponent’s campaign over and above campaign finance limits. PAC contributions, however, are clearly authorized by the Citizens United case and are neither unlawful nor unethical. In fact, public records of campaign financial reports, of which we take judicial notice, show that both campaigns received PAC contributions and/or PACs ran ads on their behalf. The ad in question stated in pertinent part:
“SHOULD PERSONAL INJURY LAWYERS PICK OUR NEXT SUPREME COURT JUSTICE Or should you? Personal Injury Lawyers have contributed over $ 1,000,000 to Jimmy Genovese’s campaign. Then, when ethics laws prevented them from giving more, 18 of the wealthiest of them poured another $ 945,000 into a PAC (Restore Our Coast) created to promote Genovese’s campaign.”
It is significant to note that this particular campaign ad was run prominently in the Daily Advertiser, the Lafayette newspaper in Judge Castle’s “home base,” so to speak, on November 6, 2016, only two days before the election on November 8, 2016. As shown in the exhibit, the ad featured Judge Castle, pictured in color in her judicial robes, smiling and wearing a large cross, while it portrayed her opponent in dark tones, frowning with a sack of money symbol next to the names of the “wealthy” personal injury attorneys accused of trying to “Pick Our Next Supreme Court Justice.”
The law firm of Broussard & David, plaintiff/relator’s counsel, was the only Lafayette law firm specifically listed in the ad, although their contribution to the PAC in question had been made by a company they managed, 557 Jefferson Street, LLC, and not their law firm directly. It is also significant to note that the campaign ad was paid for directly by Judge Castle’s campaign, not a competing PAC. Thus, as the candidate, Judge Castle was personally responsible for the content of the ad.
Under these circumstances, the court said, Judge Castle had to recuse from cases involving Broussard & David:
Using the objective [Due Process Clause] test articulated by the U.S. Supreme Court, the question at issue now is: Does the tone and tenor of the ad, with Judge Castle’s color picture in her judicial robes and cross, and her direct involvement in this campaign ad naming specific plaintiff personal injury attorneys, including Broussard & David, lead the reasonable person to conclude that, “Recusal is required when, objectively speaking, ‘the probability of actual bias on the part of the judge or decisionmaker is too high to be constitutionally tolerable.'” …
The question really is not whether Judge Castle will tilt her ruling against the client because she still may be resentful of Broussard & David’s financial support of her opponent through a PAC. One would like to believe that Judge Castle, who is reputed to be an honest, hardworking and conscientious trial judge, would try to do her best to decide the issues in the Valencia Daurbigney case fairly and impartially. However, under the recent jurisprudential standards on recusals, no “actual bias” need be proven…. As the Supreme Court in Caperton states, “the question is whether, ‘under a realistic appraisal of psychological tendencies and human weakness,’ the interest ‘poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented.'” …
The gravamen of the recusal motion is not that Broussard & David contributed to a PAC supporting Judge Castle’s opponent and the defendant seeks recusal on that basis. Rather, the problem in this case is that the ad in question did not directly attack Judge Castle’s opponent, but instead singled out specific lawyers who concentrate in the area of plaintiff personal injury litigation, including Broussard & David, for allegedly unethically creating a PAC specifically for the purpose of bypassing campaign limits on contributions to a judicial campaign in an “unethical attempt” to “Pick Our Next Supreme Court Justice.” As previously noted, the contributions by PACs are neither illegal nor unethical. The ad in question chills and challenges the legal ability of lawyers or anyone to contribute to judicial campaigns through PACs under the First Amendment, contributions lawful since Citizens United and its progeny were decided….
Public trust and confidence in the judiciary is already suffering. Looking at this case objectively, given the optics, the tone, timing and wording of the ad, it is implausible that this client, or any reasonable client under the circumstances, could have trust and confidence in the impartiality of the trial judge when the sitting trial judge hearing her case has published such an ad directly naming and attacking her attorneys….
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The bizarre and mysterious explosions that rocked the UAE port of Fujairah on Sunday just got even more strange after Saudi Arabia admitted overnight that two of its oil tankers were attacked while sailing toward the Persian Gulf possibly as part of the incident.
Crude prices quickly jumped as much as 2% on the news. Throughout Sunday as what was being reported in international press as multiple oil tankers exploding at port, local UAE officials had vehemently denied any explosion, much less that any sabotage incident, took place.
But even more interesting is that it was primarily Iran-linked media, beginning with Lebanon’s Al Mayadeen, which first reported and pushed the story into mainstream coverage. But later in the day, we reported that the UAE finally acknowledged an incident, saying four commercial cargo ships were targeted by “sabotage operations” off its eastern coast, near the Gulf of Oman. And now, a full 24 hours later, this bombshell admission which is fast sending oil prices higher:
Saudi Arabia said on Monday that two of its oil tankers had been sabotaged off the coast of the United Arab Emirates, in attacks it described as posing a threat to the security of global oil supplies.
Via AFP/Haaretz: Saudi cargo ship Bahri Yanbu next to British crude oil tanker Nordic Space (L) waiting in the port of Le Havre, May 9, 2019
The state-run Saudi Press Agency (SPA) said Monday that one of the vessels was due to be loaded with Saudi crude oil from the port of Ras Tanura, after which it would eventually supply customers in the United States. International shipping monitors identified the Saudi vessels as Bahri-owned crude carrier Amjad and crude tanker Al Marzoqah.
No casualties or oil spills were reported as part of the “sabotage” incident, but the statement acknowledged “significant damage to the structures of the two vessels.”
Crucially, the tankers had been reportedly approaching the vial Strait of Hormuz, the key oil navigation choke point in the Persian Gulf which both Iran and the US have been warning and threatening the other over. Both sides have issued strike warnings against the other should there be any military move to close off access to the narrow strait.
Location of Sunday’s incident at the port of Fujairah, though it’s yet unclear in both incidents took place at the UAE site, via CNN:
Concerning Sunday’s Fujairah port incident at first denied – and then affirmed by the UAE, it is as yet unclear if that incident was the same as what the Saudis are now reporting as sabotage against their vessels.
The UAE Ministry of Foreign Affairs called Sunday’s events a “dangerous development.” In a statement it said further, “The international community (needs to) assume its responsibilities to prevent any parties trying to undermine the security and safety of maritime traffic.”
Iran, for its part, urged caution and even suggested the events could be false-flag provocations designed to draw regional enemies into conflict. Foreign Ministry spokesperson Seyyed Abbas Mousavi said on Monday the incidents were “alarming and regrettable,” and urged that more details were needed.
He further warned against “plots by ill-wishers to disrupt regional security” and called for “vigilance of regional states in the face of any adventurism by foreign elements.”
Importantly, the “sabotage” incidents come after the U.S. Maritime Administration warned last Thursday that Iran could target commercial sea traffic.
“Since early May, there is an increased possibility that Iran and/or its regional proxies could take action against U.S. and partner interests, including oil production infrastructure, after recently threatening to close the Strait of Hormuz,” the warning read. “Iran or its proxies could respond by targeting commercial vessels, including oil tankers, or U.S. military vessels in the Red Sea, Bab-el-Mandeb Strait, or the Persian Gulf.”
So was Iran indeed “targeting commercial vessels”, or was someone pretending to be Iran and targeting commercial vessels, and if so did the operation fail to achieve its goal, resulting in the prompt denial that anything happened, even though it was Iran who originally reported that seven tankers were involved in the explosions?
Could this be the start of a Gulf of Tonkin type incident in the Persian Gulf which drags the US and its allies into confrontation with Iran?
via ZeroHedge News http://bit.ly/2E68twB Tyler Durden
After vowing over the weekend to “never surrender to external pressure”, Beijing has defied President Trump’s demands that it not resort to retaliatory tariffs and announced plans to slap new levies on $60 billion in US goods.
CHINA SAYS TO RAISE TARIFFS ON SOME U.S. GOODS FROM JUNE 1
CHINA SAYS TO RAISE TARIFFS ON $60B OF U.S. GOODS
CHINA SAYS TO RAISE TARIFFS ON 2493 U.S. GOODS TO 25%
CHINA MAY STOP PURCHASING US AGRICULTURAL PRODUCTS:GLOBAL TIMES
CHINA MAY REDUCE BOEING ORDERS: GLOBAL TIMES
Stocks are sliding on the news, with Dow futures off nearly 500 points on the day:
Stocks have now erased the entirety of the “constructive talks” ramp from Friday afternoon.
In bad news for American farmers, China might stop purchasing agricultural products from the US, reduce its orders for Boeing planes and restrict service trade. There has also been talk that the PBOC could start dumping Treasurys.
China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China. Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically.
The recent race for a seat on the Louisiana Supreme Court between two sitting judges, Judge Marilyn Castle on the trial court and Judge Jimmy Genovese on the appellate court, was especially contentious. Campaign ads in the print and broadcast media funded by special interest groups escalated, costing the respective candidates’ campaigns large sums of money. Such a campaign ad is the focus of the case before us, only the ad was directed by a candidate not against her opponent and not even against the PAC supporting her opponent, but directed against specifically named lawyers who contributed to the PAC.
In the ad at issue, The Committee to Elect Judge Marilyn Castle, designed, authorized and ran an ad that specifically listed named lawyers who concentrate in the area of plaintiff personal injury litigation, claiming that her opponent’s judicial *impartiality had been compromised. The ad specifically named trial lawyers who “unethically” contributed large sums to his campaign, bypassing campaign finance limits on contributions by creating a special PAC to donate large sums to her opponent’s campaign over and above campaign finance limits. PAC contributions, however, are clearly authorized by the Citizens United case and are neither unlawful nor unethical. In fact, public records of campaign financial reports, of which we take judicial notice, show that both campaigns received PAC contributions and/or PACs ran ads on their behalf. The ad in question stated in pertinent part:
“SHOULD PERSONAL INJURY LAWYERS PICK OUR NEXT SUPREME COURT JUSTICE Or should you? Personal Injury Lawyers have contributed over $ 1,000,000 to Jimmy Genovese’s campaign. Then, when ethics laws prevented them from giving more, 18 of the wealthiest of them poured another $ 945,000 into a PAC (Restore Our Coast) created to promote Genovese’s campaign.”
It is significant to note that this particular campaign ad was run prominently in the Daily Advertiser, the Lafayette newspaper in Judge Castle’s “home base,” so to speak, on November 6, 2016, only two days before the election on November 8, 2016. As shown in the exhibit, the ad featured Judge Castle, pictured in color in her judicial robes, smiling and wearing a large cross, while it portrayed her opponent in dark tones, frowning with a sack of money symbol next to the names of the “wealthy” personal injury attorneys accused of trying to “Pick Our Next Supreme Court Justice.”
The law firm of Broussard & David, plaintiff/relator’s counsel, was the only Lafayette law firm specifically listed in the ad, although their contribution to the PAC in question had been made by a company they managed, 557 Jefferson Street, LLC, and not their law firm directly. It is also significant to note that the campaign ad was paid for directly by Judge Castle’s campaign, not a competing PAC. Thus, as the candidate, Judge Castle was personally responsible for the content of the ad.
Under these circumstances, the court said, Judge Castle had to recuse from cases involving Broussard & David:
Using the objective [Due Process Clause] test articulated by the U.S. Supreme Court, the question at issue now is: Does the tone and tenor of the ad, with Judge Castle’s color picture in her judicial robes and cross, and her direct involvement in this campaign ad naming specific plaintiff personal injury attorneys, including Broussard & David, lead the reasonable person to conclude that, “Recusal is required when, objectively speaking, ‘the probability of actual bias on the part of the judge or decisionmaker is too high to be constitutionally tolerable.'” …
The question really is not whether Judge Castle will tilt her ruling against the client because she still may be resentful of Broussard & David’s financial support of her opponent through a PAC. One would like to believe that Judge Castle, who is reputed to be an honest, hardworking and conscientious trial judge, would try to do her best to decide the issues in the Valencia Daurbigney case fairly and impartially. However, under the recent jurisprudential standards on recusals, no “actual bias” need be proven…. As the Supreme Court in Caperton states, “the question is whether, ‘under a realistic appraisal of psychological tendencies and human weakness,’ the interest ‘poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented.'” …
The gravamen of the recusal motion is not that Broussard & David contributed to a PAC supporting Judge Castle’s opponent and the defendant seeks recusal on that basis. Rather, the problem in this case is that the ad in question did not directly attack Judge Castle’s opponent, but instead singled out specific lawyers who concentrate in the area of plaintiff personal injury litigation, including Broussard & David, for allegedly unethically creating a PAC specifically for the purpose of bypassing campaign limits on contributions to a judicial campaign in an “unethical attempt” to “Pick Our Next Supreme Court Justice.” As previously noted, the contributions by PACs are neither illegal nor unethical. The ad in question chills and challenges the legal ability of lawyers or anyone to contribute to judicial campaigns through PACs under the First Amendment, contributions lawful since Citizens United and its progeny were decided….
Public trust and confidence in the judiciary is already suffering. Looking at this case objectively, given the optics, the tone, timing and wording of the ad, it is implausible that this client, or any reasonable client under the circumstances, could have trust and confidence in the impartiality of the trial judge when the sitting trial judge hearing her case has published such an ad directly naming and attacking her attorneys….
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