Wall Street Reacts To Powell’s Dovish Speech As Markets Explode Higher

Wall Street Reacts To Powell’s Dovish Speech As Markets Explode Higher

Stocks are soaring because once again CNBC’s in-house clown Jim Cramer was dead wrong when he predicted that Powell has “every reason to be hawkish” after today’s stronger than expected Q3 GDP – because apparently the Fed looks at 6 month old lagging indicators when making policy…

… and instead the opposite happened – as usual – with Powell signaling that the Fed would slow the pace of interest-rate increases, starting as soon as at its Dec. 13-14 meeting (read: 75bps hike are dead). While Powell did have his hawkish moments, like when he repeated that it’s likely that interest rates will need to go “somewhat higher” than what policymakers had forecast in September, he was more dovish than hawkish and omitted language from Nov 2 when he said that “we have a ways to go with interest rates before we get to the level that is sufficiently restrictive.”

And while we’ll get an update to those forecasts at the December meeting, which will likely show an uptick in that terminal rate projection, it will be below 5%, as Powell’s comments clearly hammered the terminal rate back under 5%.

Powell also said Fed officials will be looking for “significant positive” real rates across the yield curve, among other asset classes, to assess how restrictive monetary policy is.

While the Fed chair discussed monetary policy, he talked extensively about the labor market, saying there are some early signs of a slowdown and that a “softish” landing is still possible. He said officials are concerned that workers may soon start demanding higher wages, which could have a more troubling impact on inflation.

And despite Powell’s saying that history has taught him “loosening policy prematurely would be a mistake” and that the Fed is going to stay the course until its job is done, stocks exploded when he echoed Brainard saying that “If you are waiting for inflation to go down, it’s very difficult not to overtighten.”

In response to Powell’s dovishness, the S&P 500 soared more than 2.1% as of 3:00 p.m. in New York, while the Dow Industrial Average added 1.3%; Tech stocks were the standout, with the Nasdaq 100 surging more than 3%. The VIX index of volatility was set to drop below 20.

Below is a snapshot of several Wall Street reactions to Powell’s comments.

Neil Dutta of Renaissance Macro Research:

“Powell is giving the Fed an off-ramp to 75 basis point moves, but I don’t think you can rule out anything else. There is a reasonably strong chance the Fed extends 50 basis point hikes or 25 basis point hikes.”

Bloomberg Chief US Economist Anna Wong:

“Powell said the labor shortfall — which he estimates at 3.5 million — mostly reflects early retirement, and there’s few signs these workers will return. He’s implying the unemployment rate will likely have to rise to cool wage growth, since an increase in labor supply is not forthcoming.”

“Powell has sounded more hawkish than the typical FOMC participant. Notably, he appears less confident than some in the November FOMC minutes that wage growth has cooled. He hinted labor supply is unlikely grow anytime soon, and the Fed will have to bring down demand or raise the unemployment rate to slow wage growth. This speech confirms our view that Powell is on the hawkish end of the FOMC spectrum — possibly more hawkish than the median participant.”

Bloomberg rates strategist Ira Jersey

Jersey notes that Powell discussed when to stop the balance sheet runoff, and mentioned that at some point they will stop shrinking the balance sheet while allowing reserves to fall as other liabilities naturally climb adding:“The thing that eventually will need to happen is organic balance sheet growth. Everyone has seemed to forget the Fed used to purchase modest amounts of Treasuries every month — but these weren’t ‘large security asset purchases,’ they were just normal. Communicating this shift may be confusing to some market participants when the time comes. The Fed may need to consider starting to communicate this once they’re done hiking.”

Developing

Tyler Durden
Wed, 11/30/2022 – 15:17

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“We’re In For A Really Big Mess” – Charles Nenner Warns “War Cycle To Really Heat Up In 2023”

“We’re In For A Really Big Mess” – Charles Nenner Warns “War Cycle To Really Heat Up In 2023”

Via Greg Hunter’s USAWatchdog.com,

Renowned geopolitical and financial cycle expert Charles Nenner said, back in September, the markets would sink and then go back up.  Both calls happened right on time.  What does Nenner see now? 

Nenner says, “Two days ago, we started to take profits again.  So, we are not that bullish…”

“The public we have now do not understand bear markets… They don’t understand that we can have rallies of 15% to 20%, and then it can go down again…

So, we took profit and we are mostly in cash again.  We are long in the bond market for a change because it looks like inflation is going to moderate for a little bit. 

We are waiting for the gold cycles to bottom, and we are getting very close, but the bull market in gold will come, but it’s still going to take a few more weeks.”

So, are interest rates on the way down?  Nenner says, “Yes, but for very short term…”

”  You might remember our interest rate cycles bottomed, and the cycle is up for the next 30 years.  I expect interest rates to go back to where they were in the early 1980’s…

Longer term interest rates are going much higher.  Right now, we have a bounce because commodities are weaker, and I think they will be weak until around February.  This is probably why the Fed is not going to talk as aggressive as they were talking.  This is still temporary and interest rates are still going to go much higher in the future.”

Nenner also says, “Mortgage interest rates will go to the 8% to 9% range in 2023. . . .and the stock market will go down by about 50%.”

Nenner says look for inflation to moderate for the next few months but look out in 2023.  Nenner predicts,

“Beware because once inflation raises its head, it is very difficult to get it back into the box.  We could go down to 6% or 6.5% inflation, but also the inflation cycle just started, and we are going to see much higher inflation.”

On the war cycle, Nenner has been predicting this “war cycle will really heat up in 2023.”  He’s convinced all the signs say he’s going to be right.  Nenner says,

“I don’t think the inflation has anything to do with the war in Ukraine, but I think in the middle of next year, we have war cycles bottoming.  I think we are in for a really big mess because it doesn’t seem like anybody is ruling any country anymore, even China.  This may be the reason why gold and silver are going to take off.  If there are shortages, then the inflation will go through the roof.

There is much more in the 36 min. interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with renowned cycle analyst and financial expert Charles Nenner. (11.29.22)

*  *  *

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Tyler Durden
Wed, 11/30/2022 – 15:05

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South Korea Scrambles Jets To Warn Off Inbound Chinese-Russian Joint Bomber Patrol

South Korea Scrambles Jets To Warn Off Inbound Chinese-Russian Joint Bomber Patrol

An unusual incident occurred Wednesday over regional waters at a moment tensions across the Korean peninsula remain high. A group of Chinese and Russian fighter jets abruptly breached South Korea’s Air Defense Identification Zone (ADIZ), causing the South Korean military to scramble jets to warn the foreign fighters off. 

Seoul described that six Russian and two Chinese warplanes had approached without notice, with the south’s Joint Chiefs of Staff describing “the Chinese H-6 bombers repeatedly entered and exited the Korea Air Defense Identification Zone (KADIZ) near South Korea’s southern and northeastern coasts early Wednesday.”

Illustrative file image: theaviationgeekclub.com

Additionally, Russian and Chinese bombers were monitored flying over regional waters nearby, but not in breach of the South Korean air defense zone. 

The South Korean military statement of the events, which spanned hours, was published in AFP as follows:

“Our military deployed air force fighter jets even before Chinese and Russian aircraft entered the KADIZ to take tactical measures in case of contingency,” the JCS said in a statement.

Beijing and Moscow appeared to have “engaged in a combined air exercise”, Seoul’s Yonhap news agency reported, citing unnamed “observers”.

Japan’s Joint Staff said two Chinese H-6 bombers “entered the Sea of Japan and then flew north” on Wednesday morning.

“Around the same time, what appears to be two Russian aircraft flew south over the Sea of Japan and then turned around,” it said, adding that it had scrambled jets in response.

At one point the group included four Russian TU-95 bombers, which indeed suggests that this was a planned significant joint aerial exercise. 

The flights triggered at alert among Japan’s defense force as well, with Japanese fighter jets also having been dispatched over the Sea of Japan.

While such Chinese-Russian cooperation in bomber patrol flights is less common, the past year has seen stepped up naval patrols among the two countries, coming at a time Washington has put pressure on both related to the war in Ukraine.

Tyler Durden
Wed, 11/30/2022 – 14:45

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Brazil Approves Bill Regulating Use Of Bitcoin As Payment

Brazil Approves Bill Regulating Use Of Bitcoin As Payment

Authored by ‘NAMCIOS’ via BitcoinMagazine.com,

Brazilian lawmakers have approved a complete regulatory framework for the trading and use of cryptocurrencies in the country…

Voted on Tuesday evening in Brasilia, the country’s capital, the new rules recognize bitcoin as a digital representation of value that can be used as a means of payment and as an investment asset in the South American nation.

The bill applies broadly to a sector which it calls “virtual assets,” and now only needs the President’s signature before it becomes law. It does not make bitcoin or any cryptocurrency a legal tender in the country.

The bill tasks the executive branch with selecting government bodies to oversee the market. The expectation is that the Central Bank of Brazil (BCB) will be in charge when bitcoin is used as payment, while the country’s securities and exchange commission (CVM) will be the watchdog when it is used as an investment asset. Both the BCB and the CVM, along with the federal tax authority (RFB), helped lawmakers craft the overhaul legislation.

Home to a vibrant cryptocurrency economy, Brazil has at times seen more citizens trade coins such as bitcoin than invest in the stock market. Now, the country seeks to set the stage for that to translate into more day-to-day usage in financial transactions.

But not all in the text is positive for the development of the market in the country. A big miss from Tuesday’s vote was the rejection of a clause that sought to cut some state and federal taxes on purchases of bitcoin mining machines. While the text was quite restrictive –– the benefit would only apply to operations using renewable energy sources –– it was apparently not enough to be approved.

Other provisions include the regulation of service providers such as exchanges, who will need to abide by specific rules to operate in Brazil. The bill seeks to regulate the establishment and operation of Bitcoin service providers in Brazil, defining such entities as those who provide cryptocurrency trading, transfer, custody, administration, or sale on behalf of a third party. Cryptocurrency service providers will only be able to operate in the country after explicit authorization by the federal government.

One rule sought to demand that such companies explicitly separate their patrimony from capital owned by customers –– for example, bitcoin the firm custodies for users. The clause sought to prevent events such as the recently seen with FTX, where user funds were commingled with the company’s funds, and help the recovery of user assets in the event of bankruptcy. It was rejected on Tuesday’s vote.

Tyler Durden
Wed, 11/30/2022 – 14:27

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Russia Counters That US “Lack Of Desire” Behind Collapse Of New START Talks

Russia Counters That US “Lack Of Desire” Behind Collapse Of New START Talks

Russia has rejected White House accusations that Moscow is to blame for the collapse of the planned resumption of New Strategic Arms Reduction Treaty (New Start) negotiations, which were supposed to kick off this week and run into the next.

On Monday the United States said that Russia had “unilaterally postponed” the important nuclear arms control talks without explanation. But in a fresh statement the Kremlin said the American side is to blame for “lack of desire” to take seriously Russian priorities

“We have encountered a situation where our American colleagues not only demonstrated a lack of desire to take note of our signals, acknowledge our priorities, but also acted in the opposite way,” Russian Deputy Foreign Minister Sergei Ryabkov told a press briefing

AFP/Getty Images

Ryabkov’s comments did suggest it was the Russian side that canceled, and further admitted that the Ukraine war makes the nuclear talks more difficult to resume, citing Washington’s immense weapons and foreign aid support to Kiev: 

“Naturally, the events unfolding inside and around Ukraine in this case impact that,” he said.

A potential date for New START dialogue resumption remains uncertain. Ryabkov Russia will eventually propose new dates, but only when “the time is right.”

“The situation was developing in the way that left us no choice. The decision was made on the political level,” the Kremlin official explained further.

It was a mere weeks ago that the two sides finally agreed to restart the talks for the first time since Russia’s Ukraine invasion, given the growing international alarm over the increasing prospect of nuclear confrontation and accompanying rhetoric. 

New START remains the last significant end of Cold War era agreement on nuclear arms control between Washington and Moscow. It is also one of the last hoped-for points of positive communications between the two sides, given spiraling relations over the Ukraine war.

The commission has not met in more than a year, in October 2021, with central aspects of the treaty since stalled due to attempts of the US to resume nuclear arsenal inspections on Russian soilwhich Moscow rebuffed.

Tyler Durden
Wed, 11/30/2022 – 14:05

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Next Week Will Be Critical For Oil Markets

Next Week Will Be Critical For Oil Markets

By Tsvetana Paraskova of OilPrice.com

The next few days will be one of the most crucial for the oil market in weeks as several events and factors at the same time could determine the trend in prices by the end of this year and beyond.   While the Chinese zero-Covid policy and protests against that policy weigh negatively on market sentiment, the OPEC+ meeting on December 4 and the beginning of the EU embargo on Russian seaborne crude oil imports on the next day are likely to shape the course of the prices. Uncertainty is high, which would stoke further volatility in prices. 

Oil slumped early on Monday to the lowest level in nearly a year – since December 2021, weighed down by risk aversion in commodity markets amid protests in China over the authorities’ strict Covid curbs policy. 

The recent price rout, with Brent plunging by 10% in one week, intensified speculation that OPEC+ members could consider another production cut when they meet on Sunday, December 4. On the following day, December 5, the EU ban on imports of Russian crude oil and the associated G7-EU price cap begins, with the exact price of the cap yet to be agreed on and announced. 

With so many uncertainties, oil prices are seesawing and jumping up or down on every rumor or report. The next week and the ones after that will likely see more of the same and prices could swing either way depending on the OPEC+ meeting, the EU ban and price cap on Russian oil and Russia’s reaction to it, and the developments in China, which, so far, is singlehandedly dragging down oil prices due to fears of weak demand in the world’s top crude oil importer at least in the short term. 

What Will OPEC+ Do?

A violent move down in prices began on November 21 after The Wall Street Journal reported, citing OPEC delegates, that the members of the cartel had informally discussed whether there would be a need for more oil on the market in view of the EU embargo on Russian crude oil imports. The report was immediately denied by OPEC’s top producer Saudi Arabia and another influential member of the cartel, the United Arab Emirates (UAE). 

“United Arab Emirates denied that it is engaging in any discussion with other OPEC+ members to change the last agreement, which is valid until the end of 2023,” its Energy Minister Suhail al-Mazrouei said on November 21.

“We remain committed to OPEC+ aim to balance the oil market and will support any decision to achieve that goal,” the minister added. 

A week later, as of November 29, speculation is mounting that OPEC+ could consider a cut at its December 4 meeting due to gloomier-than-expected oil demand outlook amid Chinese Covid curbs and protests and slowing economies elsewhere. 

Considering that oil prices slumped to the lowest level since December 2021 earlier this week, OPEC+ could indeed decide to defend an $80 floor under prices, but it will have a difficult task in predicting how the embargo on Russian crude will impact trade flows and prices. 

Still, speculation about a cut is gathering momentum. Early on Tuesday, oil prices rose by 2% as market participants weighed a possible new cut and were possibly buying the dip after the rout in recent days. 

Most traders and analysts polled by Bloomberg on Monday expect further OPEC+ cuts to its headline production target, on top of the 2 million barrels per day (bpd) reduction which began this month. 

Moreover, the structure of the oil futures market is showing signs of sluggish global oil demand and sufficient supply just ahead of the embargo on Russian oil. Weakening physical demand and plunging spot premiums for Middle Eastern crude could prompt OPEC+ to announce a fresh cut on Sunday. 

The alliance of OPEC and non-OPEC producers led by Russia regularly denies it’s defending a certain oil price, but it always says that it looks at the market fundamentals. And these days, the physical market is showing signs of weakness and even an oversupply in the short term, considering the contango in both WTI and Brent front-month to second-month futures. 

Iraq, OPEC’s second-largest producer, signaled this weekend that the OPEC+ meeting would focus on the current market conditions and balances.  

What Will G7-EU and Russia Do?

Several hours after the OPEC+ meeting, the EU embargo and the price cap on Russian oil enter into force. There are so many uncertainties surrounding the measures that analysts cannot predict anything but further volatility in oil prices. The uncertainties range from the exact price of the cap – with the EU still at odds over this five days before the embargo kicks in – to how many vessels Russia would need to place its oil to willing buyers, where ship-to-ship transfers can occur for Baltic exports bound for Asia, how big the ‘dark fleet’ under the radar could be, and last but not least, whether Putin will go through with his promise to stop supplying oil to anyone joining the price cap. 

“All of these things are so significant to the oil markets that they could whip prices from one direction to the other very significantly,” Michael Haigh, Global Head of Commodities Research & Strategy Societe Generale, told The Wall Street Journal.   

Tyler Durden
Wed, 11/30/2022 – 13:45

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David Bier on “What Biden Has Gotten Right on Immigration Policy”


student loan student debt forgiveness Joe Biden White House COVID-19 Paycheck Protection Program bailout
President Joe Biden
President Joe Biden.

 

There is much to criticize in the Biden Administration’s record on immigration policy, and I myself have sometimes been among the critics, most notably on the administration’s extension of cruel Title 42 “public health” expulsions of migrants, and other harmful pandemic-era migration restrictions.  But it is also important to recognize that Biden has made major improvements in immigration policy, and has even—belatedly—begun to wind down some of the awful policies he himself previously perpetuated.  At the very least, claims that Biden has mostly just perpetuated Trump’s ultra-restrictionist policies are utterly unjustified.

Cato Institute immigration policy expert David Bier—himself often a critic of the administration—has a helpful summary of their achievements in this field. The list is long and difficult to summarize. I urge anyone interested in these issues to read (oar least skim!) the whole thing.

However, it’s worth emphasizing that Biden has now—however belatedly—terminated almost of all of Trump’s major restrictionist innovations, including his anti-Muslim travel bans, restrictions on work visas, the massive Title 42 expulsions (now scheduled to end on Dec. 21, though litigation might yet prevent that), and much else. And, in his establishment of private refugee sponsorship programs that make it possible to admit migrants far faster and cheaper than in the moribund traditional refugee system, he has gone beyond merely repudiating Trump. These innovations, most notably the Uniting for Ukraine program, not only improve on Trump’s policies, but also on those of prior administrations.

As Bier notes, there are still many flaws in Biden’s immigration policies. Moreover, most of his beneficial initiatives have the shortcoming that they largely depend on unilateral executive action. As such, they could potentially be easily reversed by a future president, or even by Biden himself, should he find it politically advantageous to do so. Furthermore, the Administration’s successes on immigration policy should not blind libertarians—or anyone—to its shortcomings on other issues. Ironically, the same president who (rightly) denounced Trump’s abuse of emergency powers to try to build his border wall, is using similar high-handed tactics to facilitate student loan debt cancellation.

Nonetheless, Biden does deserve considerable credit for the many improvements he has made on immigration policy. Reducing immigration restrictions is one of the great issues of our time. Barriers to migration are among the most severe restrictions on liberty imposed by Western democracies (including that of current US citizens), and inflict massive harm on both would-be immigrants (many of whom are forcibly condemned to lifelong and poverty and oppression merely because they were born in the wrong place or to the wrong parents) and natives, alike.

 

 

 

 

 

 

The post David Bier on "What Biden Has Gotten Right on Immigration Policy" appeared first on Reason.com.

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What Does the Respect for Marriage Act Actually Say?


Gay couple getting married

The Respect for Marriage Act passed the Senate Tuesday night by a vote of 61–36. Twelve Republican lawmakers crossed the aisle and voted with all the Democrats for the bill, which will enshrine federal recognition for same-sex and interracial marriages in states that have legalized it.

The Respect for Marriage Act is intended as a backstop should the Supreme Court ever decide to reconsider and overturn U.S. v. Windsor, which ruled that the federal government must recognize state-approved, same-sex marriages, and Obergefell v. Hodges, which ruled that all states and the federal government must legally recognize same-sex marriage. The Respect for Marriage Act repeals and replaces the Defense of Marriage Act, passed in 1996, which prevented the federal government from recognizing same-sex marriage.

There has been quite a bit of exaggeration about what the bill actually does in the run-up to Tuesday’s vote, particularly by social conservatives who have a very long history of opposing same-sex marriage. The Heritage Foundation describes the bill as “radical” and, uh, tweeted out a frowny-face emoji in response to the vote. A reminder here that a majority of Americans, including Republicans, support legal recognition of gay marriage.

In a post at The Daily Signal, Roger Severino, Heritage Foundation’s vice president of domestic policy, opined, “No American who believes in marriage as the union of one man and one woman should be persecuted by the state or radical activists for their sincerely held convictions.”

The bill doesn’t actually authorize any of that, but the Foundation is highlighting concerns that down the line, the IRS or federal government will use religious opposition to same-sex marriage to attack the tax-exempt status of religious organizations. Sen. Mike Lee (R–Utah) attempted to introduce an amendment that would strengthen religious freedom protections in the bill but was rejected.

Conservatives aren’t the only ones whose representations of the Respect for Marriage Act aren’t quite getting the big picture. Coverage of the Respect for Marriage Act in The New York Times, for example, downplays the respect for state powers in the bill—it does not require states to legalize gay marriage recognition. To be fair, here, conservatives like Sen. Tom Cotton (R–Ark.) also seem to think that the bill is forcing same-sex marriage on states.

So a quick refresher on what the bill actually does and does not do:

The Respect for Marriage Act requires the federal government to recognize same-sex marriages performed in states where it is legal. This is obviously very important in terms of taxes and federal benefits that are tied to marriage. This is not an expansion of the federal government so much as widening the group of people who have access to existing privileges, rights, and benefits. If senators like Cotton think the federal government is too involved with a state issue, they can certainly attempt to start rolling back the many, many, many federal regulations and policies that are connected to marital status. But I won’t be holding my breath.

The Respect for Marriage Act does not require any state to legalize same-sex marriages. Many states still have bans on recognition on the books. If the Supreme Court ever decides to overturn Obergefell, those bans will likely become active again. The Times coverage somewhat downplays this, and some gay couples might end up being surprised at what happens if Obergefell ever goes away.

The Respect for Marriage Act does require states to recognize same-sex marriages performed legally in other states. While this feels awkward and intrusive from a federalism standpoint, do try to imagine what would happen if this were not the case. More specifically, try to imagine if this were not the case with heterosexual couples. Each state sets its own marriage rules, but each state historically recognizes legal marriage licenses from other states for heterosexual couples. Gay couples shouldn’t be any different.

The Respect for Marriage Act lets religious organizations decline to participate in gay weddings. The bill specifically provides that churches and other houses of worship, religious groups, faith-based social agencies, etc. “shall not be required to provide services, accommodations, advantages, facilities, goods, or privileges for the solemnization or celebration of a marriage. Any refusal under this subsection to provide such services, accommodations, advantages, facilities, goods, or privileges shall not create any civil claim or cause of action.”

The Respect for Marriage Act does not resolve conflict over whether religious organizations may be required under the law to recognize same-sex marriages in certain circumstances. This is what Lee is attempting to address with his failed amendment. Can a church-connected foster agency refuse to place children with same-sex couples? Does a religious school with a position against same-sex marriage have to employ teachers in these marriages? The bill is silent on this conflict entirely. But that’s also the current status quo, where the matter is somewhat unsettled. A recent Supreme Court decision in favor of a Catholic foster program failed to address the underlying question. The reason this is not addressed by the bill is because Republicans and Democrats are on opposite sides here and the amendment would certainly stop its passage. (A cynic might wonder if this is the intent in trying to push it into the bill.)

The Respect for Marriage Act does not resolve conflict over whether private businesses can be forced by law to provide goods and services for gay weddings. The bill is completely silent over state-level public accommodation laws and wedding services like wedding cakes, invitations, floral arrangements, and the like. The reason the bill is silent here is most certainly the same as above—taking a stand in either direction would kill the bill due to currently irreconcilable political differences. On Monday, the Supreme Court will be hearing arguments in 303 Creative v. Elenis, a case about whether a web designer and host can be forced to provide her services to create gay wedding pages despite her religious opposition to recognition.

And to be clear here, the Respect of Marriage Act is how same-sex marriage should be legalized, rather than just leaving it to the Supreme Court to make the decision. We should look askance at lawmakers like Lee who argue that Congress doesn’t need to act here simply because there’s no current case being pushed before the Supreme Court to undermine same-sex marriage. This is Congress’ job: Having laws that specify the boundaries of federal marriage recognition is something we should expect lawmakers, not judges, to determine.

Now that the bill has passed the Senate, it will have to go back to the House for another vote, as part of the compromise with Senate Republicans which involved adding a section specifying that the Respect for Marriage Act doesn’t allow for recognition of polygamous marriage. It’s expected to sail back through the House and get President Joe Biden’s signature before the lame-duck session ends.

The post What Does the Respect for Marriage Act Actually Say? appeared first on Reason.com.

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Iran Attempted To Use the World Cup To Stoke Nationalist Pride


Two World Cup fans sporting jersey's for Iran in protest.

Riot cops dance with young people in the streets, waving the flag together and setting off smoke grenades in the national colors. It seems like the ending to a badly written dystopian movie, or perhaps a copy of Kendall Jenner’s infamously tone-deaf Pepsi commercial.

Instead, it was a real scene on Iranian television, after the national team’s victory over Wales last week. Iranian authorities have tried to use the World Cup to stoke nationalist pride and project an image of unity amid an ongoing uprising.

Activists debated whether to claim the national team or shun it. The government has used the latter position to portray its opponents as unpatriotic scolds. To make matters even more charged, Iran’s Group B opponents include two historic enemies, England and America.

The team itself does not seem too thrilled about its political role. Iranian players showed their support for protesters during their game against England, and authorities arrested former national team member Voria Ghafouri soon after, likely as a warning to the current players.

After losing to America on Tuesday night, the team will not advance to the next round of the World Cup. Protesters reportedly took to the streets in response. 

Iran has been rocked by an uprising for the past two months. Protests began in response to the death of Mahsa Jina Amini in police custody, then became a general airing of grievances against theocratic rule. Police have fired lethal weapons at protesters and reportedly subjected prisoners to torture and sexual abuse.

More than 300 people have been killed, 14,000 arrested, and six sentenced to death in connection to the unrest, according to the United Nations Human Rights Office.

Along with the repression, Iranian authorities have signaled their openness to reform and have even tried to co-opt the protesters’ demands. After decades of enforcing intrusive social rules—Amini was arrested for “bad hijab”—the Islamic Republic is suddenly beating the drum of national unity between secular and religious citizens.

The World Cup was an opportunity to promote that kind of unity. Leaked audio shows that Iranian officials coordinated with World Cup host country Qatar to manage the image of Iranian crowds. Ever sensitive of its own human rights record, Qatar has tried to keep the soccer tournament as apolitical as possible.

For example, Qatari authorities kicked out a fan for wearing a jersey with Amini’s name on it and prevented spectators from bringing any Iranian flag other than the Islamic Republic’s version.

Under the previous monarchy, the Iranian flag had a lion-and-sun emblem in the middle. After the 1979 revolution, the new Islamist government replaced the emblem with a tulip made of religious calligraphy. Iranians abroad often fly the monarchist flag or a simple red, white, and green tricolor as a symbol of opposition to the Islamic Republic.

Opposition activists debated how to deal with the soccer propaganda. Some had already been calling for a boycott of Iranian sports, as part of a broader campaign to take away the Islamic Republic’s international legitimacy. After all, the national team met with President Ebrahim Raisi before heading off to Qatar.

Retired players Ali Karimi and Ali Daei announced that they would boycott the World Cup. Karimi, who now lives in the United Arab Emirates, has become a kind of spokesman for the protest movement. Iranian agents have reportedly tried to kidnap him in order to shut him up.

Others, like electronic freedom activist Amir Rashidi, British-Iranian comedian Omid Djalili, and former prisoner Jason Rezaian, publicly argued that the team could help draw attention to the Iranian people’s demands.

Iranian players had worn black and refused to celebrate their goals. Star player Sardar Azmoun even wrote on Instagram that his career is worth “sacrificing for one strand of Iranian women’s hair. Shame on you who kill people so easily. Long live Iranian women.”

The team ended up using the World Cup to draw attention to the uprising.

Team captain Ehsan Hajsafi began a press conference “in the name of the Lord of Rainbows,” a reference to the case of Kian Pirfalak, a 9-year-old child shot dead at an Iranian police checkpoint several days before.

In widely televised images, Iranian players took a knee before their first match against England, then refused to sing the national anthem.

Iran ended up losing that match 6–2. Kayhan, a newspaper close to the Iranian government, called it six goals for “England, Israel, the Saudi royal family, and unpatriotic sellouts,” referring to Iran’s geopolitical rivals.

Iran International, a Persian-language news channel with ties to Saudi Arabia, claimed that the Iranian people were celebrating “Iran’s worst defeat in World Cup history.” The Israeli foreign minister reposted Kayhan‘s headline with the caption, “We didn’t go to the World Cup, but we scored six goals. Congratulations to us.”

Iranian authorities arrested Iranian-Kurdish athlete Voria Ghafouri, a former player on the national team, for “incitement.” (Amini was Kurdish, and the heaviest unrest has taken place in Kurdistan.) In private, they threatened the national team’s family members, an anonymous source told CNN. 

The players apparently got the message. At the next match against Wales, they sang the national anthem. Iran won 2–0.

Then came the gloating from pro-government media. Kayhan bragged that the Israelis, the Saudis, and the sellouts scored nothing. The heavily armored police who had been watching over public squares began to celebrate. State news agencies filmed them dancing with soccer fans and even celebrated photos of women without hijabs in the crowds.

In other words, the Iranian government painted itself as the side of wholesome fun, opposed by treasonous killjoys.

Ironically, the Islamic Republic had previously tried to keep female soccer fans out of stadiums in order to prevent gender mixing. The restrictions were only lifted in 2019, after soccer fan Sahar “Blue Girl” Khodayari snuck into a game disguised as a man, then died by suicide when she was threatened with jail time.

The latest games coincided with a lull in unrest. Mark Pyruz, a researcher who tracks the situation in Iran, noted that turnout at demonstrations and riots last week was only a fraction of the previous week’s crowds. He speculated that public attention on the World Cup, as well as heavy repression in Kurdish areas, could have put a lid on protests.

Some activists who had called for a boycott downplayed the significance of the celebrations of the victory over Wales.

Voice of America presenter Masih Alinejad tweeted a video of police clapping for the team.

“Only our jailers, interrogators and murderers are celebrating the victory of Islamic Republic’s football team in the World Cup,” she wrote in the caption. “Iranians are in mourning for more than 500 protesters including 50 children were killed by these security forces in the ongoing uprising.”

Others showed a bit of regret about the opposition’s approach to soccer.

“It was us who pushed the team into the arms of the Islamic Republic, which made us more divided than ever,” wrote former BBC producer Panah Farhadbahman after the victory over Wales. “Now that Iran and ‘not the Islamic Republic’ is on the verge of advancing to the World Cup knockout stage for the first time in history, we missed a golden opportunity.”

He speculated that Iranians could have turned their “joy and rebellion into global scenes of protest against the Iranian Republic,” but “now it is the forces of repression who laugh in our faces.”

The match with America has become another venue for political posturing. In an infographic about the Group B rankings, the U.S. Soccer Federation used a version of the Iranian flag without the tulip. The Iranian government lashed out, calling for America to be expelled from the World Cup.

During that game, Azmoun again stayed silent during the anthem, although other players sang along.

After the United States won, videos emerged of Iranian protesters celebrating the national team’s loss in the streets, especially in Kurdish areas. Police attacked the cars of people who were celebrating the loss, according to actor Mohammad Naderi, and reports have emerged that police shot a citizen dead during the demonstrations on Tuesday night.

The tone of pro-boycott activists again turned triumphant.

“The moral fate of the Islamic Republic’s football team—formerly the national team—shows there are only two choices with no middle ground: the people or the government!” wrote Iranian-Finnish activist Kambiz Ghafouri. “Playing moderate means collaborating with the government. People who play at moderation are destined to be finished off.”

The post Iran Attempted To Use the World Cup To Stoke Nationalist Pride appeared first on Reason.com.

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Robert Draper: The GOP Needs a Post-Trump Reality Check


The Republican Party Needs a Post-Trump Reality Check

Has the Republican Party lost its mind—and its way—in its slavish devotion to Donald Trump, who insists that the 2020 election was stolen from him through extensive voter fraud?

That’s the question that journalist Robert Draper investigates in his new book Weapons of Mass Delusion, which looks at rising Republican stars such as Rep. Marjorie Taylor Greene (R–Ga.) and failed Arizona gubernatorial candidate Kari Lake, who are diehard Trump loyalists, and established party leaders such as likely Speaker of the House Kevin McCarthy, who is openly terrified to cross the former president.

I spoke with Draper shortly after the midterm elections, in which the GOP had an unexpectedly poor showing against a massively unpopular Joe Biden. Is this a sign that Trump’s hold on his party—and the country—is weakening? And is there any reason to believe that the party of Ronald Reagan and Barry Goldwater may return to its small government roots?

We also talked about Draper’s 2014 New York Times Magazine cover story, “Has the Libertarian Moment Finally Arrived?,” which prominently featured me and Matt Welch.

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The post Robert Draper: The GOP Needs a Post-Trump Reality Check appeared first on Reason.com.

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