Month: September 2022

A Section Three Disqualification

One of the lingering issues arising from the events of January 6, 2021 has been whether it would resuscitate the little used Section Three of the Fourteenth Amendment. Section Three provides:

No person shall be a Senator or Representative in Congress, or elector of President and Vice-President, or hold any office, civil or military, under the United States, or under any State, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may by a vote of two-thirds of each House, remove such disability.

The January 6th riot has been called an “insurrection” at various points, including in the second House impeachment of President Donald Trump. There has been a fair amount of interest in making use of Section Three to disqualify various participants in that riot from holding future public office.

Of course, the big target here is Donald Trump himself. There are many challenges to using Section Three to disqualify Trump from being inaugurated for a second term as president, but the legal theories are being tested on some smaller fish.

Representative Madison Cawthorn battled a ballot challenge on a Section Three argument in North Carolina, but his failure to win his primary election largely ended that challenge. The Fourth Circuit did address a limited set of issues in that case.

Today a judge in New Mexico gave the advocates of Section Three their first serious victory. This was a much easier case than the Cawthorn challenge or any possible Trump challenge.

Cuoy Griffin was a county commissioner in New Mexico and a founder of Cowboys for Trump. He’s been a vocal proponent of various election conspiracies, ordered an “audit” of election returns in his county, and obstructed the certification of the primary election results in his county in 2022.

Griffin also participated in the events of January 6th. He was not among the worst offenders. He did not enter the building itself, but stood on an exterior landing exhorting the crowd. As did so many, he had himself livestreamed to his social media audience while doing so. In subsequent days, he celebrated the riot and urged further armed activities in the future.

Unlike Cawthorn, Griffin was convicted in a federal court for his role in the riot and given a short jail sentence. He was not, however, convicted of seditious conspiracy but rather for a misdemeanor offense. His was one of the first trials prosecuted by the Justice Department.

In today’s action, the New Mexico judge held that the events of January 6th amounted to an insurrection within the terms of the Fourteenth Amendment and that Griffin had engaged in and aided that insurrectionary activity. Making use in part of my casebook co-author Mark Graber’s historical research, the judge concluded that Section Three’s language regarding insurrection and those who engaged in it had a fairly broad meaning in the nineteenth century.

Defendant traveled across the country to participate in a demonstration the purpose of which was to stop, impede, and delay the constitutionally-mandated process of counting electoral votes and, in turn, the certification of Joe Biden’s election as President. Defendant knowingly breached barricades put in place by the Capitol Police to prevent interference with Congress’s election-certification proceedings. He illegally trespassed onto the steps of the Capitol, where he proclaimed that it was a “great day for America!” as fellow Trump supporters assaulted law enforcement, smashed in the windows of the Capitol building, forced their way inside, and halted the electoral vote count. Defendant was then criminally charged for unlawfully breaching and occupying restricted Capitol grounds and engaging in “disruptive conduct” to “impede and disrupt” Congress’s certification of the 2020 presidential election.

Defendant personally contributed to the overwhelming of law enforcement by
entering through the site of the initial breach of the Capitol Police’s security perimeter at the Capitol’s West Front grounds, where crowds first began to flow into restricted areas and “all available” Capitol Police units were immediately deployed. By breaching these barricades and illegally remaining on restricted Capitol grounds for an hour and a half, Defendant contributed to the chaos that delayed Congress’s election-certification proceedings.

While at the insurrection, Defendant relished in the violent attack on the heart of American democracy and later threatened further such attacks unless the insurrectionists’ false and debunked claims of election fraud were addressed.

A sitting government official who actively engaged in the riot itself would seem to be the low-hanging fruit of the Section Three effort. We’ll see what happens next with this case and future ones.

The post A Section Three Disqualification appeared first on Reason.com.

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Chile Rejects Constitution That Would Have Banned ‘Job Insecurity’ and Disbanded the Senate


Chilean voter holding a ballot

On Sunday, Chilean voters rejected a proposed constitution that an elected assembly had been drafting since 2021. The 54,000-word document would have replaced the free market–friendly 1980 constitution, banned “job insecurity,” abolished the Senate, and massively expanded welfare programs.

Voting in the referendum was mandatory. Surveys conducted by Pulso Ciudadano in the months prior to the referendum projected the new constitution would fail, but no poll accurately predicted what turned out to be a 61.9 percent to 38.1 percent landslide rejection of the draft constitution.

President Gabriel Boric, who supported the document, says Sunday’s rejection shows the efficiency of Chile’s democratic system, and the government will try again to write a constitution that works for all Chileans.

“We have the opportunity to build the foundations of a new Chile,” Boric said in a speech following the vote, “collecting the best in our history, embarking us on a journey that strengthens us as a country and as a community.”

Enacted in 1980 during the military dictatorship of Augusto Pinochet, Chile’s current constitution promoted the privatization of industry and social services. Through the amendment process, it helped lower inflation and poverty rates, cut red tape, and increase gross domestic product over the following 40 years. The country’s free market economy has made it a model in the region.

But in 2011, student protests erupted over “unacceptable inequality,” with protesters demanding economic and social change to address the gaps between the rich and poor. Leaders of the movement said the Pinochet-era constitution was largely to blame. In October 2020, a year after violent protests shook the country, 78 percent of Chilean voters opted to replace Chile’s constitution.

The proposed replacement, drafted by a constitutional assembly elected in May 2021, would have permitted property and asset seizures by legislative decree, disbanded the Senate, ended school choice, mandated gender parity in all public institutions, and granted social rights that would expand the role of the state in health care, education, and housing.

It is true, as Boric stated in his speech, that the “vast majority” of Chileans want change. But it appears that voters were wary about the length of the document, its vagueness and breadth, and its numerous social proposals that seemed to go too far left.

“The constitution that was written now leans too far to one side and does not have the vision of all Chileans,” one voter told the Associated Press.

Boric has made it clear that the process to change the country’s constitution is not over. He said leaders must “work with more determination, more dialogue, more respect” to write another draft “that unites us as a country.”

To that end, the 36-year-old has called on political leaders to come together to discuss how to move forward and to “agree as soon as possible on the deadlines and borders of a new constitutional process.” On Monday, Boric met with Senate President Álvaro Elizalde, Chamber of Deputies President Raúl Soto, and leaders of different municipalities.

Elizalde and Soto are set to host meetings with Chile’s political parties and social organizations, with Elizalde saying he hopes “to move quickly” to push the constitutional process forward.

The 1980 constitution has its flaws, for which it has been altered over the last four decades. “Yet,” states a report by Niall Ferguson, a senior fellow at the Hoover Institution at Stanford Univesity, and Daniel Lansberg-Rodríguez, a constitutional research fellow at the Comparative Constitutions Project, “the idea that a constitution born in political sin can never become legitimate flies in the face of a great deal of history.”

The practice of discarding constitutions and rewriting foundational texts in Latin America helps to explain the region’s constant political turmoil.

An analysis by the University of Chicago Law School shows that the average lifespan of a constitution in Latin America is 12.4 years.

Ferguson and Lansberg-Rodríguez write that frequently replacing constitutions “can have precisely the opposite effect to what is ostensibly intended, weakening democratic institutions by denying them the benefits of reputations built up over time. By changing their constitutions too much too often, countries risk normalizing institutional vacuums, exacerbating instabilities and institutionalizing the kind of ‘adhocracy’ that constitutions are supposed to protect against.”

Chileans have had three constitutions since 1833, and the 1980 constitution, while longstanding, has been heavily amended. Cuba has had three in the last 120 years. Brazil has had seven since its independence in 1822. Venezuela has had 26. The Dominican Republic has had a whopping 38.

“A constitution provides legal stability and predictability—like a computer operating system,” wrote Daniel Raisbeck, a policy analyst on Latin America at the Cato Institute, and I for Reason last month. “Tampering with any foundational code creates security holes that are easily exploited by political opportunists looking to amplify their own power and overturn the established order.”

Whether voters will approve of whatever draft the government writes next remains to be seen. What is clear is that rehashing foundational documents, as Raisbeck warned, “could bring years of chaos, economic stagnation, and legal uncertainty.”

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Biden’s Disturbing Speech Outside Independence Hall


Biden speech in front of Independence Hall Philadelphia

In this week’s The Reason Roundtable, editors Katherine Mangu-Ward, Matt Welch, Peter Suderman, and Nick Gillespie discuss President Joe Biden’s speech last week in front of Independence Hall in Philadelphia as well as energy policy in California.

1:47: Biden’s speech in Philadelphia

25:42: Energy policy in California

33:18: Weekly Listener Question:

Whenever I am having a conversation with a die-hard Trump cultist for long enough, I ask the question “Why? Why do you love him so much? What did he actually do for you? He didn’t follow through on any campaign promises. He went the opposite direction on several.” If I’m speaking with someone who has a more nuanced response than “He talks shit to the people I don’t like,” it’s something like, “He did a lot of deregulation,” but they can never name anything specific that was deregulated.

I know Trump did lead some deregulation, but I’m not sure how much made a big difference. I started thinking about the deregulation under Jimmy Carter that I do know about. Everything from airlines to beer brewing. So now, my question is: “Is it possible that Jimmy Carter did more and better deregulation than Donald Trump, and how could we measure this?”

44:47: This week’s cultural recommendations.

Mentioned in this podcast:

“In Philadelphia, Joe Biden Peddled a Competing Brand of Authoritarianism,” by J.D. Tuccille

“Biden’s Presidential Address Was Actually a Campaign Speech,” by Elizabeth Nolan Brown

“Trump Disregards Democracy, While Biden Ignores Its Dangers,” by Jacob Sullum

“California Legislators Vote To Keep Diablo Canyon Nuclear Plant Running,” by Ronald Bailey

“In a Belated Outburst of Rationality, Germany Decides To Keep Three Nuclear Plants Open,” by Ronald Bailey

“Debts Forgiven and Debts Forgotten,” by Nick Gillespie

President Biden’s job approval, according to RealClear Politics.

“What Capitalism Gets Right – and Governments Get Wrong,” a TED Talk by Katherine Mangu-Ward

Send your questions to roundtable@reason.com. Be sure to include your social media handle and the correct pronunciation of your name.

Today’s sponsors:

  • Looking for your next podcast? Check out The Political Orphanage. Host Andrew Heaton is one of the funny guys in Reason TV videos—you may have seen him in “Libertarian PBS,” “Game of Thrones: Libertarian Edition,” or “Desperate Mayors Compete for Amazon HQ2.” The Political Orphanage is designed for people who don’t feel at home in the Republican or Democratic Parties. Rather than explaining issues as a slap fight between Red Team and Blue Team, Heaton looks for the underlying problems to big issues and cracks jokes along the way. This month, Heaton flew to Berlin to interview a historian about Nazi economics and whether Hitler was a socialist or a capitalist. Over the next two weeks, he’s going to talk to comedians about if social justice is a religion. And later this month, he’s doing a special on what might happen in the event of nuclear war. The Political Orphanage looks for the basic concepts affecting politics and explains them, so you can make your own mind up instead of just choosing a team to hate. It’s a funny, wonky, nonpartisan show with cool guests, and we think you’ll enjoy it. So check out The Political Orphanage.
  • It can be tough to train your brain to stay in “problem-solving mode” when faced with a challenge in life. But when you learn how to find your own solutions, there’s no better feeling. A therapist can help you become a better problem solver, making it easier to accomplish your goals—no matter how big or small. If you’re thinking of giving therapy a try, BetterHelp is a great option. It’s convenient, accessible, affordable, and entirely online. Get matched with a therapist after filling out a brief survey, and switch therapists any time. When you want to be a better problem solver, therapy can get you there. Visit BetterHelp.com/roundtable today to get 10 percent off your first month.

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A Section Three Disqualification

One of the lingering issues arising from the events of January 6, 2021 has been whether it would resuscitate the little used Section Three of the Fourteenth Amendment. Section Three provides:

No person shall be a Senator or Representative in Congress, or elector of President and Vice-President, or hold any office, civil or military, under the United States, or under any State, who, having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof. But Congress may by a vote of two-thirds of each House, remove such disability.

The January 6th riot has been called an “insurrection” at various points, including in the second House impeachment of President Donald Trump. There has been a fair amount of interest in making use of Section Three to disqualify various participants in that riot from holding future public office.

Of course, the big target here is Donald Trump himself. There are many challenges to using Section Three to disqualify Trump from being inaugurated for a second term as president, but the legal theories are being tested on some smaller fish.

Representative Madison Cawthorn battled a ballot challenge on a Section Three argument in North Carolina, but his failure to win his primary election largely ended that challenge. The Fourth Circuit did address a limited set of issues in that case.

Today a judge in New Mexico gave the advocates of Section Three their first serious victory. This was a much easier case than the Cawthorn challenge or any possible Trump challenge.

Cuoy Griffin was a county commissioner in New Mexico and a founder of Cowboys for Trump. He’s been a vocal proponent of various election conspiracies, ordered an “audit” of election returns in his county, and obstructed the certification of the primary election results in his county in 2022.

Griffin also participated in the events of January 6th. He was not among the worst offenders. He did not enter the building itself, but stood on an exterior landing exhorting the crowd. As did so many, he had himself livestreamed to his social media audience while doing so. In subsequent days, he celebrated the riot and urged further armed activities in the future.

Unlike Cawthorn, Griffin was convicted in a federal court for his role in the riot and given a short jail sentence. He was not, however, convicted of seditious conspiracy but rather for a misdemeanor offense. His was one of the first trials prosecuted by the Justice Department.

In today’s action, the New Mexico judge held that the events of January 6th amounted to an insurrection within the terms of the Fourteenth Amendment and that Griffin had engaged in and aided that insurrectionary activity. Making use in part of my casebook co-author Mark Graber’s historical research, the judge concluded that Section Three’s language regarding insurrection and those who engaged in it had a fairly broad meaning in the nineteenth century.

Defendant traveled across the country to participate in a demonstration the purpose of which was to stop, impede, and delay the constitutionally-mandated process of counting electoral votes and, in turn, the certification of Joe Biden’s election as President. Defendant knowingly breached barricades put in place by the Capitol Police to prevent interference with Congress’s election-certification proceedings. He illegally trespassed onto the steps of the Capitol, where he proclaimed that it was a “great day for America!” as fellow Trump supporters assaulted law enforcement, smashed in the windows of the Capitol building, forced their way inside, and halted the electoral vote count. Defendant was then criminally charged for unlawfully breaching and occupying restricted Capitol grounds and engaging in “disruptive conduct” to “impede and disrupt” Congress’s certification of the 2020 presidential election.

Defendant personally contributed to the overwhelming of law enforcement by
entering through the site of the initial breach of the Capitol Police’s security perimeter at the Capitol’s West Front grounds, where crowds first began to flow into restricted areas and “all available” Capitol Police units were immediately deployed. By breaching these barricades and illegally remaining on restricted Capitol grounds for an hour and a half, Defendant contributed to the chaos that delayed Congress’s election-certification proceedings.

While at the insurrection, Defendant relished in the violent attack on the heart of American democracy and later threatened further such attacks unless the insurrectionists’ false and debunked claims of election fraud were addressed.

A sitting government official who actively engaged in the riot itself would seem to be the low-hanging fruit of the Section Three effort. We’ll see what happens next with this case and future ones.

The post A Section Three Disqualification appeared first on Reason.com.

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Chile Rejects Constitution That Would Have Banned ‘Job Insecurity’ and Disbanded the Senate


Chilean voter holding a ballot

On Sunday, Chilean voters rejected a proposed constitution that an elected assembly had been drafting since 2021. The 54,000-word document would have replaced the free market–friendly 1980 constitution, banned “job insecurity,” abolished the Senate, and massively expanded welfare programs.

Voting in the referendum was mandatory. Surveys conducted by Pulso Ciudadano in the months prior to the referendum projected the new constitution would fail, but no poll accurately predicted what turned out to be a 61.9 percent to 38.1 percent landslide rejection of the draft constitution.

President Gabriel Boric, who supported the document, says Sunday’s rejection shows the efficiency of Chile’s democratic system, and the government will try again to write a constitution that works for all Chileans.

“We have the opportunity to build the foundations of a new Chile,” Boric said in a speech following the vote, “collecting the best in our history, embarking us on a journey that strengthens us as a country and as a community.”

Enacted in 1980 during the military dictatorship of Augusto Pinochet, Chile’s current constitution promoted the privatization of industry and social services. Through the amendment process, it helped lower inflation and poverty rates, cut red tape, and increase gross domestic product over the following 40 years. The country’s free market economy has made it a model in the region.

But in 2011, student protests erupted over “unacceptable inequality,” with protesters demanding economic and social change to address the gaps between the rich and poor. Leaders of the movement said the Pinochet-era constitution was largely to blame. In October 2020, a year after violent protests shook the country, 78 percent of Chilean voters opted to replace Chile’s constitution.

The proposed replacement, drafted by a constitutional assembly elected in May 2021, would have permitted property and asset seizures by legislative decree, disbanded the Senate, ended school choice, mandated gender parity in all public institutions, and granted social rights that would expand the role of the state in health care, education, and housing.

It is true, as Boric stated in his speech, that the “vast majority” of Chileans want change. But it appears that voters were wary about the length of the document, its vagueness and breadth, and its numerous social proposals that seemed to go too far left.

“The constitution that was written now leans too far to one side and does not have the vision of all Chileans,” one voter told the Associated Press.

Boric has made it clear that the process to change the country’s constitution is not over. He said leaders must “work with more determination, more dialogue, more respect” to write another draft “that unites us as a country.”

To that end, the 36-year-old has called on political leaders to come together to discuss how to move forward and to “agree as soon as possible on the deadlines and borders of a new constitutional process.” On Monday, Boric met with Senate President Álvaro Elizalde, Chamber of Deputies President Raúl Soto, and leaders of different municipalities.

Elizalde and Soto are set to host meetings with Chile’s political parties and social organizations, with Elizalde saying he hopes “to move quickly” to push the constitutional process forward.

The 1980 constitution has its flaws, for which it has been altered over the last four decades. “Yet,” states a report by Niall Ferguson, a senior fellow at the Hoover Institution at Stanford Univesity, and Daniel Lansberg-Rodríguez, a constitutional research fellow at the Comparative Constitutions Project, “the idea that a constitution born in political sin can never become legitimate flies in the face of a great deal of history.”

The practice of discarding constitutions and rewriting foundational texts in Latin America helps to explain the region’s constant political turmoil.

An analysis by the University of Chicago Law School shows that the average lifespan of a constitution in Latin America is 12.4 years.

Ferguson and Lansberg-Rodríguez write that frequently replacing constitutions “can have precisely the opposite effect to what is ostensibly intended, weakening democratic institutions by denying them the benefits of reputations built up over time. By changing their constitutions too much too often, countries risk normalizing institutional vacuums, exacerbating instabilities and institutionalizing the kind of ‘adhocracy’ that constitutions are supposed to protect against.”

Chileans have had three constitutions since 1833, and the 1980 constitution, while longstanding, has been heavily amended. Cuba has had three in the last 120 years. Brazil has had seven since its independence in 1822. Venezuela has had 26. The Dominican Republic has had a whopping 38.

“A constitution provides legal stability and predictability—like a computer operating system,” wrote Daniel Raisbeck, a policy analyst on Latin America at the Cato Institute, and I for Reason last month. “Tampering with any foundational code creates security holes that are easily exploited by political opportunists looking to amplify their own power and overturn the established order.”

Whether voters will approve of whatever draft the government writes next remains to be seen. What is clear is that rehashing foundational documents, as Raisbeck warned, “could bring years of chaos, economic stagnation, and legal uncertainty.”

The post Chile Rejects Constitution That Would Have Banned 'Job Insecurity' and Disbanded the Senate appeared first on Reason.com.

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Biden’s Disturbing Speech Outside Independence Hall


Biden speech in front of Independence Hall Philadelphia

In this week’s The Reason Roundtable, editors Katherine Mangu-Ward, Matt Welch, Peter Suderman, and Nick Gillespie discuss President Joe Biden’s speech last week in front of Independence Hall in Philadelphia as well as energy policy in California.

1:47: Biden’s speech in Philadelphia

25:42: Energy policy in California

33:18: Weekly Listener Question:

Whenever I am having a conversation with a die-hard Trump cultist for long enough, I ask the question “Why? Why do you love him so much? What did he actually do for you? He didn’t follow through on any campaign promises. He went the opposite direction on several.” If I’m speaking with someone who has a more nuanced response than “He talks shit to the people I don’t like,” it’s something like, “He did a lot of deregulation,” but they can never name anything specific that was deregulated.

I know Trump did lead some deregulation, but I’m not sure how much made a big difference. I started thinking about the deregulation under Jimmy Carter that I do know about. Everything from airlines to beer brewing. So now, my question is: “Is it possible that Jimmy Carter did more and better deregulation than Donald Trump, and how could we measure this?”

44:47: This week’s cultural recommendations.

Mentioned in this podcast:

“In Philadelphia, Joe Biden Peddled a Competing Brand of Authoritarianism,” by J.D. Tuccille

“Biden’s Presidential Address Was Actually a Campaign Speech,” by Elizabeth Nolan Brown

“Trump Disregards Democracy, While Biden Ignores Its Dangers,” by Jacob Sullum

“California Legislators Vote To Keep Diablo Canyon Nuclear Plant Running,” by Ronald Bailey

“In a Belated Outburst of Rationality, Germany Decides To Keep Three Nuclear Plants Open,” by Ronald Bailey

“Debts Forgiven and Debts Forgotten,” by Nick Gillespie

President Biden’s job approval, according to RealClear Politics.

“What Capitalism Gets Right – and Governments Get Wrong,” a TED Talk by Katherine Mangu-Ward

Send your questions to roundtable@reason.com. Be sure to include your social media handle and the correct pronunciation of your name.

Today’s sponsors:

  • Looking for your next podcast? Check out The Political Orphanage. Host Andrew Heaton is one of the funny guys in Reason TV videos—you may have seen him in “Libertarian PBS,” “Game of Thrones: Libertarian Edition,” or “Desperate Mayors Compete for Amazon HQ2.” The Political Orphanage is designed for people who don’t feel at home in the Republican or Democratic Parties. Rather than explaining issues as a slap fight between Red Team and Blue Team, Heaton looks for the underlying problems to big issues and cracks jokes along the way. This month, Heaton flew to Berlin to interview a historian about Nazi economics and whether Hitler was a socialist or a capitalist. Over the next two weeks, he’s going to talk to comedians about if social justice is a religion. And later this month, he’s doing a special on what might happen in the event of nuclear war. The Political Orphanage looks for the basic concepts affecting politics and explains them, so you can make your own mind up instead of just choosing a team to hate. It’s a funny, wonky, nonpartisan show with cool guests, and we think you’ll enjoy it. So check out The Political Orphanage.
  • It can be tough to train your brain to stay in “problem-solving mode” when faced with a challenge in life. But when you learn how to find your own solutions, there’s no better feeling. A therapist can help you become a better problem solver, making it easier to accomplish your goals—no matter how big or small. If you’re thinking of giving therapy a try, BetterHelp is a great option. It’s convenient, accessible, affordable, and entirely online. Get matched with a therapist after filling out a brief survey, and switch therapists any time. When you want to be a better problem solver, therapy can get you there. Visit BetterHelp.com/roundtable today to get 10 percent off your first month.

Audio production by Ian Keyser

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Music: “Angeline,” by The Brothers Steve

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Tech Tumbles To Worst Streak In 6 Years; Crypto, Credit, & Commodities Clobbered

Tech Tumbles To Worst Streak In 6 Years; Crypto, Credit, & Commodities Clobbered

No rescue from Powell’s pain as Putin’s promises pissed off more people from Poland to Paris over the weekend…

US futures attempted a half-arsed rally overnight but that was all puked back as the cash markets opened…

This left Nasdaq down 7 straight days – its longest losing streak since Nov 2016…

All the US majors attempted rally up to thjeir 50DMAs last week have now failed as fresh cycle lows and being made….

But the Nasdaq has further to fall to catch down to STIRs’ reality…

Source: Bloomberg

Bonds were also clubbed like a baby seal on the day, with yields up 13-14bps across the entire curve (only the short-end saw modest outperformance – up ‘only’ 10bps)…

Source: Bloomberg

Rate-hike (and subsequent rate-cut) expectations both tightened hawkishly today with the terminal rate now above 3.91% (March 2023)…

Source: Bloomberg

The dollar extended recent gains to fresh highs against its fiat peers with the EU session seeing the biggest bid once again…

Source: Bloomberg

Crypto crashed around 1300ET as some suggested (unsourced) this may be initial dump of MtGox holdings. This pushed Bitcoin down below $19k – testing the spike lows from 7/13…

Source: Bloomberg

Gold fell back after bouncing off $1700 late last week…

Oil prices slipped back after rallying yesterday on OPEC+ production cuts. WTI fell back after failing at $90 once again…

US NatGas plunged over 7% today, hitting a four-week low, as soaring output coupled with lower demand forecasts drags prices down, despite the fact that inventories are 11% lower than their five-year norm.

For context, European NatGas is now trading at around $400/bbl equivalent – triple that of US Natgas…

Source: Bloomberg

Finally, Dr.Doom himself is back with some ominous warnings. Nouriel Roubini said that stubborn inflation and the coronavirus pandemic might force the Fed to drive the US economy into an even deeper recession than the one it has avoided.

“I worry about a stagflationary debt crisis, because you have the worst of the ’70s in terms of supply shocks, and you have the worst of the global financial crisis because of too much debt, and that combination is dangerous,” he said.

“If you’re behind the curve, eventually the recession is going to be more severe, the loss of jobs and income and wages is going to be more severe,” the economist explained, referring to the Fed’s rate hikes relative to inflation. “You need to be ahead of the curve.”

What does that mean for stocks?

Source: Bloomberg

And Roubini says Fed actions will cause crashes across not just stocks, but bonds, housing, credit, private equity, and other assets in bubble territory. However, he warns, if the central bank gives up on fighting inflation, price increases could spiral out of control.

Tyler Durden
Tue, 09/06/2022 – 16:00

via ZeroHedge News https://ift.tt/SRbEFa1 Tyler Durden

Watch: Biden’s ‘Election Denier’ Spox Scrambles To Explain 2016 Tweet

Watch: Biden’s ‘Election Denier’ Spox Scrambles To Explain 2016 Tweet

Democrats are heading into midterms riding on their proud accomplishments crying “burn the witch!” at Republicans who dare commit the grave sin of challenging the results of the 2020 election – an effort which has been months in the making.

And last week President Biden spent a considerable amount of time calling “MAGA Republicans” a threat to democracy because they “don’t accept the results of free and fair elections.”

Poll workers in Detroit, MI cover windows during the counting of absentee ballots during the 2020 US election

And of course, one can see why they’re worried when people like Arozona Gubernatorial candidate Kari Lake gives answers like this:

Except, Democrats have denied the results of ‘free and fair elections’ for decades – particularly in 2016.

And so on Tuesday, Biden White House spokeswoman Karine Jean-Pierre was caught flat-footed when confronted with her own election-denying tweets. 

“In trying to understand the new attention on ‘MAGA Republicans,’ you tweeted in 2016 Trump stole an election —” Fox News‘ Peter Doocy said, to which Jean-Pierre replied: “I knew you were going to ask me that question.”

“Well, great, here we go,” Doocy shot back. “You tweeted Trump stole an election, you tweeted Brian Kemp stole an election. If denying election results is extreme now, why wasn’t it then?“

And what was her excuse?

“Let’s be really clear that that comparison that you made is just ridiculous,” Jean-Pierre replied. “I was talking specifically at that time of what was happening with voting rights and what was danger of voting rights.”

Watch:

So it’s extreme when Republicans deny elections.

Tyler Durden
Tue, 09/06/2022 – 15:50

via ZeroHedge News https://ift.tt/mxCJya5 Tyler Durden

Peter Schiff: We Can’t Postpone Inflation’s Day Of Reckoning Much Longer

Peter Schiff: We Can’t Postpone Inflation’s Day Of Reckoning Much Longer

Via SchiffGold.com,

Jerome Powell and other central bankers at the Federal Reserve are still talking tough about their inflation fight even as the economy continues to deteriorate. Peter Schiff says we’re nearing an inflection point, but the markets don’t get it yet. As he explained in his podcast, the Fed’s monetary tightening is causing a recession, but ultimately, the central bank will surrender to inflation. There is a day of reckoning ahead and we can’t avoid it much longer.

Stock market indexes went into the holiday weekend with another big selloff. We still haven’t reached the June lows, but the markets appear to be heading in that direction. Peter said he thinks we are on our way to “a historic bear market” both in severity and longevity.

Not only are we starting from an unprecedented level of excess valuation, but it’s also happening at a time of unprecedented macroeconomic imbalances. The economy has never been weaker while stocks have been more overpriced.”

Peter said we are at an inflection point. In the past, every time the stock market got into trouble or the economy got shaky, the Federal Reserve came to the rescue with more cheap money.

Well, it can’t do that anymore. At least it’s claiming it’s not going to do that. And if it did do that, it would have dire ramifications. So, for now, it’s not doing it. And the markets still don’t understand what this means for the economy and what it portends for stock market prices.”

The stock market has been surfing a wave of liquidity. With every recession or stock market decline, the Fed floods the markets with liquidity.

Stock prices are floating on that sea of liquidity. The valuations are extreme. But now, the Fed is pulling the plug, draining the markets of that liquidity, at the time when the markets need it the most.”

Earnings are under pressure because we are in the early stages of a recession. As the recession continues, there will be more downward pressure on earnings. And as interest rates rise, the value of those diminished earnings is falling even faster as they are discounted with those higher rates. Meanwhile, rising interest rates themselves hurt earnings because corporations are carrying unprecedented levels of debt. Artificially low interest rates did their job, incentivizing not only corporations, but also individuals and governments, to take on more and more debt.

Because of the Fed, everybody is leveraged to the hilt. The economy has never been this leveraged and never been this dependent on the cheap money that the Federal Reserve is now taking away. So, we’re going to go through the mother of all economic withdrawals as the Fed is weaning us from this monetary heroin.”

As businesses have to pay more to service their debt, that reduces earnings. It also lowers dividends, and it also means less money for stock buyback schemes. That means stock prices will likely continue their downward trend.

Anybody who thinks we’re anywhere near the bottom just doesn’t understand the stock market. And anybody who thinks the Fed is going to win this inflation fight doesn’t understand inflation.”

But a lot of people don’t understand. You still hear people out there talking about a “soft landing.” Peter said we’ve already crashed.

The only thing is we haven’t burst into flames yet.”

There seems to be an ongoing debate about whether the Fed needs to cause a recession to tame inflation. Peter said that’s not what happens. The central bank doesn’t have to set out to cause an economic downturn. The recession is simply a consequence of the inflation fight.

So, it’s not about whether the Fed needs to cause a recession to fight inflation. The reality is the Fed can’t fight inflation without causing a recession.”

In fact, Fed policy led to both excessive debt in the economy and rising prices.

Because it left monetary policy so loose for so long and allowed the economy to get so leveraged, allowed inflation to get this out of control, it’s not about the fact that fighting inflation is going to cause a recession. It’s going to cause a financial crisis. There is no way around that.”

Why don’t more people understand this?

They don’t understand what caused the last financial crisis. They don’t understand that it was the Federal Reserve. And they also don’t understand that the Fed’s policies subsequent to that crisis, which were supposed to alleviate the problems, actually made them worse. The problems have been compounded. But they’ve been kicked down the road. And we are dealing with those problems now, but few people seem to grasp that understanding. Well, they are going to be in for a rude awakening.”

Peter said this is why any comparisons between current Federal Reserve Chairman Jerome Powell and former chair Paul Volker fall flat. Powell will not succeed in this inflation fight.

Powell will surrender and inflation will win because when push comes to shove, and when we are in a financial crisis, Powell will not continue to fight inflation. He will give up that fight in order to save the economy and the markets from the consequences of that financial crisis. And that’s when inflation will cause an even greater crisis in terms of the US dollar crisis and a sovereign debt crisis, a fate that, so far, the US has managed to avoid. But its ability to postpone that day of reckoning will rapidly come to an end.”

In this podcast, Peter also talks about the August non-farm payroll data, how gold is bucking the downtrend in stocks, and Biden’s Philadelphia speech.

Tyler Durden
Tue, 09/06/2022 – 15:35

via ZeroHedge News https://ift.tt/7rpIJl8 Tyler Durden

“Sell My Car” Search Trends Explode 222% To All Time High In September

“Sell My Car” Search Trends Explode 222% To All Time High In September

It looks as though the spike in used car prices that we endured through 2021, and that continued as a result of the devastating inflation we have had so far in 2022, may finally be coming to an unceremonious end. 

That’s because search trends for the terms “sell my car” have exploded higher leading into September 2022, a new study from findthebestcarprice.com found this week. 

The site performed an analysis of Google search data and found that “searches for ‘sell my car’ exploded to over three times the average volume in September, an unprecedented increase in people searching for ‘sell my car’”, 

The terms ‘how to sell my car’ and ‘sell car’ also spiked higher, by 145% and 104%, respectively. 

Between August 25 and September 1, searches for ‘sell my car’ rose by 177%, the report said. They rose another 15% on September 4 after the the U.S. Labor Department announced that the unemployment rate has risen from 3.5% to 3.7%, the study says. 

“The U.S. has already dealt with rising bills over the past few months due to inflation and the soaring costs of gas,” a spokesperson for the site said.

“Now, as experts such as Stephen Roach are predicting that a recession is looming, consumers are having to make cutbacks in order to save money. Google Trends data reveals that more households are looking to sell their car to bring in some extra income. We will likely see this trend continue if the cost of living remains high and the U.S. continues negative growth into the fall.”

The top 10 states with the most search data on selling cars were:

  1. Michigan
  2. Arizona
  3. California
  4. Nevada
  5. South Carolina
  6. Oklahoma
  7. Florida
  8. Ohio
  9. Texas
  10. Colorado

We noted just days ago that used car pricing had plunged to a one year low. 

The latest Manheim Used Vehicle Value Index that tracks what dealers pay for used cars at auction is at a one-year low of 211.6. 

The index declined 3.6% from July in the first 15 days of August but is still up 8.8% from August 2021. The monthly slump was the most significant drop since April 2020.

Cox Automotive analysts said sliding wholesale used-vehicle values should continue through August. SUVs and pickups saw the most declines in value at auctions while minivans fell less — likely a function of thin supply, according to analysts. They said compact cars saw auction prices stable, noting it was likely due to more demand because elevated fuel costs have pushed consumers to more efficient vehicles. 

A metric called “days of inventory” – how long it would take dealers to sell out of cars at the current sales rate if they couldn’t acquire new stock – was eight days higher than a year ago as the nationwide supply of used vehicles (as of Aug. 15) was improving. 

Cox analysts noted consumers’ views of buying conditions for vehicles declined in August due to elevated prices and soaring rising interest rates. They said the only prior time consumers felt this pessimistic about purchasing a car was when auto loan interest rates were sky high in the early 1980s. 

Tyler Durden
Tue, 09/06/2022 – 15:05

via ZeroHedge News https://ift.tt/87p2eYE Tyler Durden