College Student’s Claim Alleging Baseball Coach Violated First Amendment Can Go Forward

From Chief Judge Michael Urbanski’s opinion posted yesterday in Peyton v. Kuhn (W.D. Va.):

[The Amended Complaint alleges the following:] Peyton was recruited to play baseball for Radford University (“Radford”) by Radford’s former baseball coach, Joe Raccuia, who was replaced by Kuhn prior to Peyton’s matriculation. Peyton found many of Kuhn’s actions objectionable, such as: grouping the lockers of minority players, such as Peyton, together; informing all players that they were required to stand during the national anthem in order to remain in good standing; directing only the players of color to get haircuts prior to team pictures; prohibiting players from attending a racial justice rally on campus; referring to an Asian American player on the team as “Kim Chi,” rather than by his name; and assisting white players in finding summer league placements, but not assisting Peyton. Kuhn did not play Peyton in any baseball games during the 2020–2021 season.

Peyton was directed to inform Kuhn of his ongoing mental health concerns and believed Kuhn responded inappropriately to his disclosure. Peyton then reported this and the previous incidents to Radford’s athletic department. Kuhn subsequently asked Peyton whether Peyton had lodged a complaint against him. When Peyton’s parents became involved, Kuhn urged them to disenroll Peyton from Radford and stated, in front of others, that “these parents want me fired.” Several days later, Kuhn took the players out of earshot of other athletic staff members to “curse them out.”

Despite assurance from Radford’s athletic director that Peyton would not face retaliation for raising concerns about Kuhn, Peyton was taken off the active lineup, prohibited from participating in live batting practice, and prevented from traveling with the team.

During this period, Peyton had discussions with Kuhn and an assistant Athletic Director about preserving a year of playing eligibility by “red-shirting” since Peyton had not yet played in a game.

On April 21, 2021, Peyton and a dozen other baseball players met with an assistant Athletic Director at Radford to discuss Kuhn under the belief that the meeting was confidential. However, Peyton believes the substance of the meeting was shared with Kuhn shortly thereafter. On the very day Radford’s athletic director, Robert Lineburg, informed Peyton and his peers that the university would neither investigate nor take action against Kuhn, Kuhn met with players on the mound during a game and said: “You thought you were going to get me fired, but I’m not going anywhere.”

Kuhn then ordered Peyton into the game, causing Peyton to lose his opportunity to red-shirt.  Within days, Kuhn cut Peyton and another African American member of the team, causing Peyton to lose his scholarship and forcing Peyton to withdraw from Radford if he hoped to continue playing baseball. Peyton transferred to another college, but did not secure the same scholarship amount, increasing his net cost of university attendance by approximately $100,000.

The court denied Kuhn’s motion to dismiss, concluding that Peyton had adequately alleged that Kuhn’s actions were retaliation for Peyton’s First-Amendment-protected complaints:

“As a general matter, the First Amendment prohibits government officials from subjecting an individual to retaliatory actions for engaging in protected speech.” To state a First Amendment retaliation claim against Kuhn, Peyton’s complaint must allege facts supporting a reasonable inference that: (1) Peyton “engaged in protected First Amendment activity”; (2) Kuhn “took some action that adversely affected [Peyton’s] First Amendment rights”; and (3) “there was a causal relationship between [Peyton’s] protected activity and [Kuhn’s] conduct.” Kuhn contends that Peyton has failed to meet the second and third prongs of this test….

Peyton has alleged facts sufficient to support a reasonable inference that Kuhn’s actions adversely affected Peyton’s first amendment rights. To make this determination,

[W]e ask, from an objective standpoint, whether the challenged conduct would “likely deter a person of ordinary firmness from the exercise of First Amendment rights.” And we require that the challenged conduct generate more than a de minimis inconvenience….

Kuhn argues that Peyton’s claim that Kuhn played him in the last baseball game of the season—thereby causing Peyton to lose his ability to red-shirt and a year of eligibility—is not a sufficient adverse action. Even if this is true, Peyton also alleges that Kuhn cut him from the team and caused him to lose his scholarship. In Hening v. Adair (W.D. Va. 2022), a member of the Virginia Tech soccer team refused to kneel during the reading of a unity statement before a game. The court found that subsequent actions by the coach, including “publicly chastising her, removing her from the starting lineup, and reducing her playing time[,]” “would tend to chill a person of ordinary firmness’s exercise of her First Amendment rights.” The court noted that this “type of retaliatory conduct … would certainly have an effect on college athletes generally, especially those who rely on scholarships to offset (or cover) their academic expenses.”

Eliminating Peyton’s ability to play for Radford by cutting him from the team is a more severe adverse action than the deeds in Hening. Viewing the facts in the light most favorable to Peyton—as the court is required to do at this stage—Peyton has alleged facts sufficient to meet the adverse action prong….

[As to causation,] the facts alleged permit the reasonable inference that Kuhn was aware of that meeting, [and] the Amended Complaint also alleges a series of complaints by Peyton followed by negative effects. Each time Peyton lodged a complaint with Radford, he was questioned by Kuhn or singled out for apparently punitive action. In early 2021, Peyton expressed his concerns to a member of the Radford athletics department. Within days, “Kuhn called Peyton into his office to begin grilling him about whether he had made a complaint to the university.”

On March 22, 2021, Peyton and his parents met with staff in the athletic department to discuss their concerns about Kuhn. Four days later, Kuhn refused to permit Peyton to travel with the team—the only non-injured team member subject to such a prohibition. During a game on April 23, 2021—two days after the meeting with Radford staff and a NCAA Compliance Officer—Kuhn “came to the mound to meet with the players on the field and said, ‘You thought you were going to get me fired, but I’m not going anywhere,’ and retreated to the dugout,” shortly before ordering Peyton into the game and a few days before cutting him from the team.

Taken together, the cadence and temporal proximity of these events suggests—at least for the motion to dismiss stage—that Peyton’s multiple complaints about Kuhn caused Kuhn to cut him from the team….

This means that the case can go forward, with Peyton seeking more information through discovery; if Peyton finds enough evidence to support his retaliation theory, then it will be up to a jury (or, if both sides prefer, the judge) to decide what Kuhn’s true motive was.

See also this July post discussing the court’s refusal to let Peyton proceed pseudonymously. Benjamin Flanagan Sharpe (Daniel Medley & Kirby PC) and Robert Edwin Dean, II (Rob Dean Law) represent plaintiff.

The post College Student's Claim Alleging Baseball Coach Violated First Amendment Can Go Forward appeared first on Reason.com.

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Massive Explosion Destroys Home Of Crazed Man In Arlington, Virginia Neighborhood

Massive Explosion Destroys Home Of Crazed Man In Arlington, Virginia Neighborhood

On Monday night, a home spontaneously exploded in an Arlington, Virginia, neighborhood. Police were initially called to the home after neighbors reported someone firing a flare gun. 

Video journalist Nick Sortor posted on X a breakdown of what happened yesterday evening on the 800 block of North Burlington Street:

  • Around 4:45 pm Tuesday, Arlington County, VA police were called out to a report of “possible shots fired.”

  • Once officers got to the scene, they became aware that a man inside the home had fired a flare gun out the window 30 to 40 times

  • The owner of the home, James Yoo, then barricaded himself inside and refused to make contact with police.

  • As a result, they obtained a search warrant, and while attempting to execute it, the suspect fired multiple shots at the officers from inside the home.

  • Then, at 8:45 pm, an explosion occurred, leveling the entire property.

A video posted to X shows when the house exploded into a massive fireball. 

Arlington County police spokesperson Ashley Savage told NBC News that officials have yet to confirm if there were any deaths. She said the suspect was ‘inside’ the home during the explosion. 

Sortor revealed additional alleged information on Yoo: 

  • He’s a far leftist that posts anti-white hatred and quotes Noam Chomsky

  • He accused his neighbors of being spies on social media just three days ago

  • He had a previous encounter with the FBI

  • He filed countless frivolous lawsuits against his own sister and wife

  • He was the former Head of Global Security at the US government’s “Committee on Foreign Investment in the United States (CFIUS)”

X sleuths shed more color on Yoo, all of which is alleged: 

Plot thickens… 

Tyler Durden
Tue, 12/05/2023 – 08:30

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Stocks, Futures Slide For Second Day As Rally Fizzles Ahead Of Jobs Data Deluge

Stocks, Futures Slide For Second Day As Rally Fizzles Ahead Of Jobs Data Deluge

US stocks were set to extend Monday’s drop into a second day after hitting 20-month highs, as the recent rally looks increasingly stretched and traders scale back rate-cut bets while Chinese stocks tumbled to fresh five year lows after Moody’s downgraded China’s credit outlook to negative on soaring debt. As of 7:40am ET, S&P 500 futures slid 0.4%, trading at session lows, after the benchmark rose last week to its highest since March 2022 on bets the Fed would soon pivot to monetary easing; Nasdaq 100 futures dropped 0.5%. Bond yields eased as did the USD; 10Y TSY yield dropped 2bps to 4.22%. Commodities were seeing a bid within Ags and Energy while metals underperformed on China weakness despite better than expected PMIs. Bitcoin held near a 19-month high, just below the $42,000 mark.Today’s macro data focus is on JOLTS job openings and ISM Services (52.3 consensus vs. 51.8 prior).

In premarket trading, Take-Two Interactive shares declined after the company’s Rockstar Games unit released the first trailer for the highly-anticipated Grand Theft Auto VI video game. With the title planned for 2025, analysts were disappointed by the lack of an exact release date. Robinhood gained after the online brokerage said November crypto notional trading volumes were about 75% above October levels. Here are some other notable premarket movers:

  • Albemarle and Livent fell after Piper Sandler cut its rating on both stocks to underweight from neutral. The broker said the downgrades reflect a significant deterioration of global lithium markets.
  • Gitlab jumped 16% as after the application software company reported third-quarter results that beat expectations and raised its full-year forecast.
  • JOANN shares slumped 18% after the fabric and crafts retailer reported third-quarter net sales that missed estimates and a wider-than-expected adjusted loss per share.
  • Nio ADRs gained 3.1% after the Chinese EV maker reported profitability that beats estimates, including better-than-expected adjusted earnings and vehicle gross margin. Revenue outlook for current quarter is well below estimates.
  • Take-Two Interactive shares declined 6.1% after the company’s Rockstar Games unit released the first trailer for the highly-anticipated Grand Theft Auto VI video game, which will be released in 2025. While analysts saw the trailer as positive, they note the game being released in 2025 and the lack of an exact release date as a source of disappointment.

As November’s epic 12% rally on hopes that global central bankers were ready to shift to easy policy fizzles, investors are starting to doubt if it will extend in December especially after Goldman’s flows guru Scott Rubner warned that the rally has “Absolutely Run Out Of Gas.” As such, what had become the prevailing wisdom last month — that a “Goldilocks” scenario can be fulfilled by US central bankers in early, rapid rate cuts in 2024 — is now grounds for debate. US jobs data later in the week is seen as a key piece of the puzzle to understanding the economy and the risk that wage growth fans inflation, leading to higher borrowing costs for longer.  A salvo of US job numbers are expected every day for the rest of week, including JOLTS, ADP, jobless claims, non-farm payrolls and the unemployment rate.

“Even though US PMI and JOLTs data may increase market volatility in the afternoon, the “wait and see” stance will likely continue as investors brace for the crucial US jobs data due tomorrow and Friday,” said Pierre Veyret, a technical analyst at ActivTrades. “Meanwhile, a particular focus should be maintained towards central bankers’ speeches, as traders need to check whether their dovish expectations will be confirmed.”

Meanwhile, market breadth on the S&P 500 now looks extremely extended with the benchmark now firmly overbought for more than two weeks, while Goldman pointing out that the proportion of index members in overbought territory reached 33%, the highest reading since June 2020.

“It’s remarkable how quickly we’ve swung from different market narratives this year,” Hugh Gimber, global market strategist for JPMorgan Asset Management in London, said in an interview on Bloomberg Television. “Now it feels like we’ve gone full circle again.”

European stocks were mixed and US equity futures are down after Moody’s downgraded China’s sovereign debt outlook to negative. Euro Stoxx 50 rises 0.3%. IBEX outperforms peers, adding 0.5%, FTSE 100 lags, dropping 0.4%, after LSE faced issues earlier. Real estate, utilities and construction are the strongest-performing sectors in Europe. German markets got a boost from comments from European Central Bank policymaker Isabel Schnabel that further interest rate hikes are unlikely. The DAX Index added 0.2%, closing in on a record high and outperforming the broader Stoxx 600. Here are the biggest movers Tuesday:

  • Ericsson rises as much as 9.9%, among the top performers on the Stoxx 600, after winning a contract with AT&T that could amount to almost $14 billion over five years. Nokia, which lost out on the contract, fell as much as 10%
  • SSP Group gains as much as 4.9% after the food services company boosted its 2024 revenue guidance. The guidance should be “reassuring” for the outlook of travel retail, RBC said
  • Pirelli shares rise as much as 6%, the most intraday in a year, after UBS upgraded the Italian tiremaker to buy, citing earnings upside risk, deleveraging potential and an attractive valuation
  • Alm Brand gains as much as 5.9% after the Danish financial services firm announced a DKK250 million share buyback program due to its “very strong solvency coverage”
  • Moonpig shares advance as much as 3.5% after the onling gifting company reported first-half underlying Ebitda and adjusted earnings per share that beat estimates
  • Hapag-Lloyd and Maersk decline as Barclays says the global shipping market faces “the dawn of a new annus horribilis” due to industry oversupply and muted demand
  • Ashtead falls as much as 5.4% after the UK-based industrial and construction equipment rental firm reported 2Q earnings. While the results were solid, they may not reassure fully, RBC says
  • Carl Zeiss Meditec drops as much as 4.9% after JPMorgan initiated coverage on the German medical optics firm with an underweight rating
  • Auction Technology drops as much as 6.2% after Barclays downgraded its rating on the online auction technology provider to equal-weight, citing a more cautious view in the near term

Earlier in the session, Asian stocks tumbled and were on pace for their worst day since Nov. 20 as sharp selling in Chinese and Hong Kong shares hurt sentiment. The MSCI Asia Pacific Index slid as much as 1.1%, with Tencent, Samsung Electronics and AIA Group leading losses. Mainland China and Hong Kong stocks slumped in the wake of a move by Moody’s Investors Service to cut its outlook on the nation’s sovereign debt to negative. The MSCI China Index slid as much as 2.3% toward its lowest close since November 2022. On the mainland, the benchmark CSI 300 Index finished 1.9% lower as foreigners sold the largest amount of shares since mid-October.  Sentiment was also dragged by a selloff in technology stocks across the region, tracking similar losses for US tech giants Monday. The MSCI Asia Information Technology Index fell the most since October.

“The accumulation of news over last few weeks would be raising questions on China’s economy into 2024,” said Xin-Yao Ng, an investment director for Asian equities at abrdn. “Macro data has been soft. The big concern over the property slump remains as sales volume are still very weak.”

  • Hang Seng and Shanghai Comp retreated which saw the latter breach the psychological 3,000 level to the downside amid lingering frictions after China criticised the US for seeing it as a threat following calls by Commerce Secretary Raimondo for more funds to back chip curbs, while encouraging Caixin Services PMI data which printed a 3-month high at 51.5 (exp. 50.7) only provided a brief tailwind.
  • Nikkei 225 continued to weaken and slipped below the 33,000 level despite softer-than-expected Tokyo inflation data.
  • ASX 200 was led lower by the commodity-related industries with underperformance in gold miners after the precious metal faded the recent surge, while sentiment was also not helped by weak data and after the unsurprising RBA rate decision in which the central bank kept rates unchanged and reiterated its forward guidance.

In FX, the Bloomberg dollar spot index was steady. JPY and GBP were the strongest performers in G-10 FX, AUD and NZD underperformed.

  • EUR/USD pared a loss of 0.3% to trade flat at 1.0839, after the ECB’s Schnabel said that the moderation in inflation has made another rate hike unlikely; euro-area bonds rallied
  • AUD/USD sank as much as 0.8% to 0.6569, a one-week low, after the Reserve Bank left its policy rate unchanged and said inflation is continuing to slow
  • USD/CNH and USD/CNY steadied following Moody’s cut to its Chinese debt outlook to negative

In rates, treasuries held small gains amid steeper rally in bunds after ECB’s Schnabel said she sees further rate hikes as unlikely, citing a “remarkable” fall in inflation, according to Reuters. US yields are richer by 1bp-2bp across the curve with spreads flatter but still within 1bp of Monday close; 10-year yields around 4.23% with bunds and gilts outperforming by 3bp in the sector as core European rates drive gains. German bonds rose, with the front end outperforming comparable USTs and gilts, and money markets up their ECB easing bets after ECB’s Isabel Schnabel said that further interest rate hikes are unlikely. Peripheral spreads tighten to Germany. Dollar IG issuance slate includes JPMorgan 3Y and IADB 3Y; seven names priced almost $9b Monday and at least one stood down. Treasury coupon issuance is on hiatus until next week’s 3-, 10- and 30-year sales. US session includes ISM services index and JOLTS job openings data.

In commodities, oil steadied after three days of losses. Saudi Arabia said recent cuts by OPEC+ would be honored in full and could be extended. Most base metals trade in the red. Spot gold falls roughly $3 to trade near $2,027/oz.

Bitcoin held near a 19-month high, just below the $42,000 mark.

To the day ahead now, and data releases from the US include the ISM services index for November, and the JOLTS job openings for October. Elsewhere, there’s the global services and composite PMIs for November and Euro Area PPI for October. From central banks, we’ll get the ECB’s Consumer Expectations Survey for October.

Market Snapshot

  • S&P 500 futures down 0.2% to 4,566.50
  • STOXX Europe 600 up 0.1% to 466.33
  • MXAP down 1.0% to 159.84
  • MXAPJ down 1.1% to 497.42
  • Nikkei down 1.4% to 32,775.82
  • Topix down 0.8% to 2,342.69
  • Hang Seng Index down 1.9% to 16,327.86
  • Shanghai Composite down 1.7% to 2,972.30
  • Sensex up 0.6% to 69,290.91
  • Australia S&P/ASX 200 down 0.9% to 7,061.55
  • Kospi down 0.8% to 2,494.28
  • German 10Y yield little changed at 2.30%
  • Euro little changed at $1.0840
  • Brent Futures up 1.1% to $78.85/bbl
  • Gold spot up 0.1% to $2,030.89
  • U.S. Dollar Index down 0.10% to 103.60

Top Overnight News

  • Moody’s lowered China’s credit outlook to negative from stable while retaining a long-term rating of A1 on the nation’s sovereign bonds, according to a statement. China’s usage of fiscal stimulus to support local governments and its spiraling property downturn is posing risks to the nation’s economy, the grader said. BBG
  • China’s Caixin services PMI for Nov comes in ahead of plan at 51.5, up from 50.4 in Oct and above the Street’s 50.5 expectation. RTRS
  • Japan’s Tokyo CPI undershoots the Street in Nov, w/the core (ex-food/energy) number coming in at +3.6% (down from +3.8% in Oct and below the Street’s +3.7% forecast). BBG  
  • South Korea’s CPI undershoots the Street in Nov, with the core number coming in at +3% (down from +3.2% and below the Street’s +3.1% forecast). BBG
  • The ECB can take further interest rate hikes off the table given a “remarkable” fall in inflation and policymakers should not guide for rates to remain steady through mid-2024, ECB board member Isabel Schnabel told Reuters. RTRS
  • Qatar Holding, a subsidiary of the Qatar Investment Authority that helped bail out Barclays during the global financial crisis, launched the sale on Monday of almost 362mn shares of Barclays, worth about £510mn. The QIA is Barclays’ second-biggest shareholder, according to Bloomberg data, and the stock sale is expected to reduce its stake from 5.3% to 2.9%. FT
  • The head of Airbus has said the group “might need some support” from European governments for a new, multibillion-dollar commercial aircraft program as it gears up for a successor to its best-selling A320 family of jets. FT
  • Israeli forces closed in on the city of Khan Younis in the Gaza Strip on Tuesday, engaging in close combat with Hamas fighters in what could be the decisive battle of the two-month-old war, while residents fled from the fighting amid a worsening humanitarian plight. WSJ
  • CVS Health will overhaul how drugs are paid for, adopting a “cost plus” model whereby it will charge a simple markup and a flat fee on top of what it pays for pharmaceuticals. WSJ

A more detailed look at global markets courtesy of Newsquawk

APAC stocks declined following the mostly negative lead from Wall St where the major indices were choppy and ultimately weighed amid a rebound in yields ahead of key data releases. ASX 200 was led lower by the commodity-related industries with underperformance in gold miners after the precious metal faded the recent surge, while sentiment was also not helped by weak data and after the unsurprising RBA rate decision in which the central bank kept rates unchanged and reiterated its forward guidance. Nikkei 225 continued to weaken and slipped below the 33,000 level despite softer-than-expected Tokyo inflation data. Hang Seng and Shanghai Comp retreated which saw the latter breach the psychological 3,000 level to the downside amid lingering frictions after China criticised the US for seeing it as a threat following calls by Commerce Secretary Raimondo for more funds to back chip curbs, while encouraging Caixin Services PMI data which printed a 3-month high at 51.5 (exp. 50.7) only provided a brief tailwind.

Top Asian News

  • RBA kept the Cash Rate Target unchanged at 4.35%, as expected, while it reiterated its forward guidance that whether further tightening is required to ensure inflation returns to the target in a reasonable timeframe will depend upon data and evolving assessment of risks. RBA also repeated that the Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome, as well as noted there are still significant uncertainties around the outlook and that the limited information received on the domestic economy since the November meeting has been broadly in line with expectations.
  • Moody’s affirms China’s A1 rating; changes outlook to Negative from Stable. Reflects risks relating to persistently lower medium-term economic growth and ongoing downsizing of the property sector.
  • Chinese Finance Ministry says Chinese economy will maintain its rebound and positive trend; we expect the Q4 economy to keep the positive trend
  • Foxconn (2317 TW) November Sales +17.95% Y/Y (October -4.56% Y/Y); outlook for Q4 should be better than the original guidance for “significant growth”; revenue performance in the first two months of Q4 has been slightly higher than expected

European equities, Eurostoxx50 +0.3%, are mixed, with the FTSE100, -0.2%, once again the relative underperformer, largely hampered by ongoing losses in Basic Resources which is the worst performing sector. European sectors are mixed with a slight positive tilt; Real Estate outperforms following broker upgrades at British Land, +1.3%, and Land Securities, +0.8%. US equity futures are trading on the backfoot, continuing the losses seen in the prior days’ session as the year’s final few key events/releases begin with JOLTS.

Top European News

  • ECB’s Schnabel says current level of restriction is sufficient, has increased confidence that 2% target will be met in 2025; must not declare victory prematurely; further hikes “rather unlikely” after November inflation data. Must be more cautious with rate cuts than markets pricing; further hikes “rather unlikely” after November inflation data. Inflation developments are encouraging, fall in core prices is remarkable
  • YouGov/Citi survey showed the British public’s expectation for inflation in 5yr-10yr’s time rose to 3.5% from a prior 3.3% view in September.
  • German Ifo: Retailers Expect Little Help from Christmas Sales; Business Situation -8.8 (prev. -13.5).
  • Kantar UK Supermarket update (Nov): grocery price inflation 9.71% in the four weeks to Nov 26th; UK grocery sales +6.3% Y/Y.
  • ECB Survey of Consumer Expectations (October 2023): median consumer inflation expectations for the next 12 months and for three years ahead remained unchanged.
  • The London Stock Exchange (LSEG LN) is currently investigating an issue impacting its trading/information system. We are now resuming trading on impacted instruments. Instruments will go into auction at 09:55GMT with uncrossing beginning at 10:15GMT. All live orders remain on the system. LSE: Impacted securities are now in regular trading.

FX

  • DXY extended on the upper end of its overnight range towards 103.84 ahead of the European equity cash open and now resides within the middle of today’s range of 103.84-53.
  • EUR/USD is trading around flat having bounced off lows on revisions higher to Services & Composite PMI data.
  • The Japanese Yen is the G10 outperformer at the time of writing amid a combination of a pullback in US yields coupled with the broader risk aversion overnight.
  • AUDNZDCAD are all softer to varying degrees amid the initial broader risk tone, but the Aussie is the marked G10 laggard in the aftermath of the RBA policy decision which lacked hawkish undertones.
  • PBoC set USD/CNY mid-point at 7.1127 vs exp. 7.1476 (prev. 7.1011).
  • China’s major state-owned banks were seen acquiring dollars via onshore swaps and selling them in the spot FX market, while it was also reported that the RBI was likely selling dollars near the 83.38-83.39 rupee level, according to sources and traders cited by Reuters.

Fixed Income

  • ECB’s Schnabel (Hawk) says that further hikes are now “rather unlikely” following the November inflation data.
  • Commentary which drove Bunds to a 134.17 peak; though, upward revisions to PMIs have prompted a pullback, but one that is limited by the reports internal commentary.
  • Similar action has been seen in Gilts which perhaps derived initial support from the latest YouGov findings as well.
  • Finally, USTs are directionally in-fitting but with magnitudes more contained at the mid-point of 110.10 to 110.18 parameters ahead of JOLTS & PMIs/ISM.
  • UK sells GBP 1.5bln 0.75% 2033 I/L Gilt: b/c 2.68x (prev. 2.94x) and real yield 0.724% (prev. 0.831%)
  • Germany to sell EUR 3.66bln vs exp. EUR 4.5bln 3.10% 2025 Schatz: b/c 2.48x (prev. 1.7x), average yield 2.64% (prev. 3.06%), retention 18.67% (prev. 17.82%)

Commodities

  • WTI and Brent, +0.7%, front-month futures are on firmer footings after choppy trade on Monday amid continued fallout from OPEC+ in the backdrop of cooling economic data and volatile Middle East tensions.
  • Metals are mixed with precious metals moving horizontally as the DXY trades flat intraday spot gold and spot silver taking a breather following yesterday’s hefty losses.
  • Libya’s NOC Chair says current production is 1.3mln BPD (vs 1.218mln on 6th Nov), planning a bidding round for offshore/onshore blocks for end-2024. In the early stage to identify blocks. Says seeing a lot of interest for upcoming bid round from US, European and Asian firms. On track to increase production capacity to 2mln BPD in the next three-five years. Says hopefully oil production will increase by 100k BPD by end-2024.
  • Russia’s Kremlin, when asked if Russian President Putin will discuss coordinated actions on oil market, says such discussions are held in OPEC+ format but the issue is always on the agenda; Kremlin confirms Putin will visit Saudi and UAE on WednesdayRussian President Putin is to discuss oil market issues in the UAE and Saudi Arabia, according to Tass
  • Brazilian miner Vale expects iron ore market to remain tight in the coming years, says China cannot control the price of iron ore and there is no supply coming
  • China’s NDRC will cut retail gasoline and diesel prices by CNY 55/ton and CNY 50/ton, respectively, commending Dec 6th; NDRC sees weaker oil prices in the short term

Geopolitics

  • Israel is reportedly mulling a plan to flood Gaza tunnels with seawater, according to WSJ.
  • Israel’s army said its fighter jets attacked Hezbollah positions, infrastructure and military in response to a recent shooting, according to AJA Breaking via social media platform X.
  • Investors with prior knowledge of the October 7th attack on Israel by Hamas made at least tens of millions of pounds shorting Israeli stocks, according to The Telegraph.
  • US National Security Advisor Sullivan said attacks on vessels in the Red Sea are a threat to international peace and stability, while they have every reason to believe these attacks were fully enabled by Iran. Sullivan also said the US is engaging with allies on the next steps after the Red Sea attacks and weapons used by the Houthis in the attacks are being supplied by Iran.
  • White House warned that a failure to approve additional aid for Ukraine would ‘kneecap’ Kyiv, according to FT.

US Event Calendar

  • 09:45: Nov. S&P Global US Services PMI, est. 50.8, prior 50.8
  • 10:00: Oct. JOLTs Job Openings, est. 9.3m, prior 9.55m
  • 10:00: Nov. ISM Services Index, est. 52.3, prior 51.8
    • Nov. ISM Services New Orders, est. 54.9, prior 55.5
    • Nov. ISM Services Employment, est. 51.4, prior 50.2
    • Nov. ISM Services Prices Paid, est. 58.0, prior 58.6

DB’s Jim Reid concludes the overnight wrap

Markets have lost a little of their recent poise over the last 24 hours, with the S&P 500 (-0.54%) coming off its YTD high from Friday, just as yields on 2yr Treasury yields (+9.6bps) moved back up to 4.64%. There hasn’t been a specific catalyst for the softness, but the astonishing rally in November and long positioning has led to some scepticism about how much further it’s able to run, at least until we get some more data that’s soft-landing friendly. After all, even though markets are fully pricing in a Fed rate cut by the May meeting in just 5 months’ time, this isn’t the first time this year that rate cut speculation has built up. In fact, at the height of the SVB turmoil in March, futures were fully pricing in a rate cut by the July meeting, which was just 4 months away. So it’ll be fascinating to see the extent to which the FOMC’s dot plot next week validates or pushes back on current market pricing, which is now looking for 124bps of cuts in 2024 .

When it comes to the Fed’s next meeting, today kicks off a run of important data releases that will help shape the 2024 outlook. That includes the ISM services index, which will be in particular focus after the manufacturing number underwhelmed on Friday. Indeed, the Atlanta Fed’s GDPNow forecast for Q4 stands at just 1.2%, which if realised would be the weakest quarterly growth since Q2 2022. Alongside that, we’ll get the JOLTS report for October, which have shown job openings actually ticking back up over the last couple of months, suggesting that the labour market was still pretty tight. For instance, there were still 1.5 job vacancies per unemployed individual in September, which is still clearly above its pre-pandemic level around 1.2. We’ll see if that’s changed today.

Ahead of those releases, the S&P 500 (-0.54%) was unable to sustain its recent gains, suffering its worst start to a week since February. To be fair, it’s worth noting that the decline was fairly concentrated among big tech stocks, with the equal-weighted S&P 500 up a marginal +0.03%. And the small cap Russell 2000 index (+1.04%) actually rose for the fourth session in a row. But even so, it wasn’t much consolation for those segments that did lose ground, with both the NASDAQ (-0.84%) and the Magnificent 7 (-1.61%) seeing a notable underperformance .

Meanwhile on the rates side, there was a fairly sharp bounceback in Treasury yields following last week’s declines. The 10yr yield rose +5.8bps to 4.21%, though it rallied in the latter part of the US session having been up as much as +10bps intra-day. There were larger moves at the front-end as the 2yr yield (+9.6bps) saw its biggest daily increase in four weeks, moving back up to 4.63%. That came as investors took out some of the cuts priced in for 2024, with the total amount falling by -10.2bps to 124bps. And in turn, with investors expecting slightly fewer rate cuts, real yields also bounced back, with the 10yr real yield (+7.2bps) moving back above 2% again .

That advance in real yields put a pause to the gold rally over recent days. At the open, gold prices did manage to hit an all-time intraday high of $2135/oz, but by the close they were down a full -2.23% to $2026/oz. So a 5.56pp range on the day, which is a huge intra-day swing for Gold. Although we hit fresh all-time highs during the session, it’s worth noting that this is still only a nominal high point, since if you adjust for inflation then prices were higher in the early 1980s, in 2011, and even at the recent peak in 2020. Elsewhere in the commodities space, Brent Crude oil prices (-1.08%) were down again to $78.03/bbl, building on their run of 6 consecutive weekly declines .

Over in Europe, the market moves were much less aggressive yesterday, with the STOXX 600 only falling -0.09%. Similarly for sovereign bonds, yields on 10yr bunds (-0.8bps) actually fell back to a 5-month low of 2.35%, and others including 10yr OATs (+0.2bps) and BTPs (+2.5bps) only saw a modest increase. Gilts were the main exception to that pattern, with the 10yr yield up +5.5bps, as the 10yr real yield (+9.6bps) even hit a one-month high.

Asian equity markets are slipping this morning with the Hang Seng (-1.76%) emerging as the biggest underperformer followed by the Nikkei (-1.15%), the CSI (-0.80%), the Shanghai Composite (-0.69%) and the KOSPI (-0.38%). S&P 500 (-0.21%) and NASDAQ 100 (-0.24%) futures are edging lower.

Early morning data showed that Tokyo’s inflation rate rose by +2.6% y/y in November (v/s +3.0% expected), its slowest rise since July 2022 and compared with a downwardly revised increase of +3.2% in the previous month. Core CPI rose +2.3% in November (v/s +2.4% expected) from a year earlier down from a +2.7% gain in October thus clouding the BOJ’s exit path a touch. The BOJ next meet on Dec. 18-19 with our view that they will remove YCC in January. Elsewhere, China’s Caixin services PMI for November advanced to a three-month high of 51.5 (v/s 50.5 expected and 50.4 in October), thus diverging from the nation’s official PMI data that showed a contraction .

In monetary policy action, the Reserve Bank of Australia (RBA) decided to keep its official cash rate (OCR) unchanged at a 12-year high of 4.35% as consensus expected at its final board meeting of 2023. With the RBA’s statement viewed as being on the dovish side, the Aussie currency has come under renewed selling pressure, dropping -0.54% to trade at 0.6584 versus the dollar .

Looking back at yesterday’s data, October factory orders were the one notable release in the US. These saw a -3.6% monthly decline (vs -3.0% exp) and with September revised down to +2.3% from +2.8%. The less volatile non-defense capital goods series was revised down to -0.2% from 0.0% in the advance reading. So adding to a sense of weakening US growth momentum in Q4.

To the day ahead now, and data releases from the US include the ISM services index for November, and the JOLTS job openings for October. Elsewhere, there’s the global services and composite PMIs for November and Euro Area PPI for October. From central banks, we’ll get the ECB’s Consumer Expectations Survey for October.

Tyler Durden
Tue, 12/05/2023 – 08:16

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China’s Debt Binge Spurs Moody’s To Downgrade Credit Outlook

China’s Debt Binge Spurs Moody’s To Downgrade Credit Outlook

A protracted downturn in China’s real estate sector as well as a broader economic deceleration, but most of all downside risks from China’s record debt load which is now well over 300% of GDP

… has led Moody’s Investors Service to downgrade China’s sovereign credit rating outlook from stable to negative

While the revision does not signify Moody’s will imminently downgrade China’s credit rating, it does increase the odds if persistently lower growth and troubles in the property sector do not diminish. 

As the FT reports, the rating agency – which one month ago also lowered its US credit rating to negative – was concerned that government and state firms would provide fresh financial support to weak regions in the country, “posing broad downside risks to China’s fiscal, economic and institutional strength.” And they will, because they have no other choice, and the alternative is economic collapse and social upheaval.

The deteriorating outlook comes as the latest housing data in the world’s second-largest economy shows no end in sight for the property crisis amid worsening home sales. We noted last month that home prices plunged the most in eight years. 

Accelerating turmoil in the property market is further evidence that fiscal and housing stimulus to reboot the economy has failed so far, and perhaps a depression is unavoidable. 

Another concern is that local government debt has surged due to plummeting land sale revenues from the property downturn and pandemic lockdowns. This raises fears of a broader financial crisis. Additionally, there are mounting worries in China’s $3 trillion “shadow banking” sector, primarily because of bad property investments. 

For the broader economy, Moody’s forecasts GDP growth around 4% in 2024 and 2025 – nearly halved from 2019 levels. 

Moody’s also maintained an A1 rating on China’s sovereign bonds: 

“The affirmation of the A1 rating reflects China’s financial and institutional resources to manage the transition in an orderly fashion.

“Its economy’s vast size and robust, albeit slowing, potential growth rate, support its high shock-absorption capacity.”

China’s Finance Ministry, predictably, called Moody’s decision “disappointing”:

“China’s economy is shifting to high-quality development, new drivers of China’s economic growth are taking effect, and China has the ability to continue to deepen reforms and respond to risks and challenges,” adding that Moody’s concerns about the country’s growth and fiscal profile are “unnecessary.”

Simon Harvey, head of FX analysis at Monex Europe, responded to the decision and warned it’s tough to turn constructive on Chinese assets and the yuan.

“It was notable that the decline in USD/CNY towards the end of November didn’t necessarily coincide with an improvement in China’s macro outlook, without which we think it is difficult to turn constructive on Chinese assets and the yuan,” Harvey said.

As a result, the yuan extended losses on Tuesday. China equity indexes, including the CSI 300 Index and Hong Kong’s Hang Seng, fell 1.90% and 1.91%, respectively. 

Bloomberg indicated that details of Moody’s decision were leaked prior to the official announcement, with speculations suggesting a possible leak as early as last Friday. 

Last week, the OECD warned that “structural stresses” in China contributed to downside risk to global growth. 

This comes less than a month after Moody’s cut its outlook on US credit ratings to negative from stable, citing downside risks to the world’s largest economy’s fiscal strength. 

Tyler Durden
Tue, 12/05/2023 – 07:43

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“Hate Nickels Because They Are Not Dimes”

In MCAD v. Kahalas, decided Nov. 17 by Massachusetts Commission Against Discrimination Hearing Officer Jason Barshak, complainant Ambroise claimed she was racially harassed and then fired because of her race and because of her complaints about the harassment. (Ambroise was a paralegal at Kahalas’s law office; she had graduated from law school, but hadn’t passed the bar, in four tries. Ltayf, Ellison, Calloway, and Clancy were other support staff, and Welsh and Bongiorno were lawyers.) Here are the hearing officer’s findings of facts:

“HATE NICKELS BECAUSE THEY ARE NOT DIMES COMMENT”

On or about November 3, 2017, Ambroise was working late in the paralegals’ room. Kahalas saw her and said to Ambroise that he was going to call her nickels, because she hates nickels, because they are not dimes, and asked if she was trying to get ahead (“hate nickels because they are not dimes comment”). I credit Kahalas’ testimony that he was making a joke that he had made for years. Kahalas explained its meaning. The joke was that one who hates nickels because they are not dimes is a person who wants to make more money. Based on Kahalas’ credible testimony concerning what he said to Ambroise, I do not credit Ambroise’s testimony to the extent it implies Kahalas only said that he was going to call her nickels.

Ambroise did not know what Kahalas meant by his comment. After speaking to a friend, she had an understanding that it was a term relative to the value of an enslaved black person. Ambroise then performed a Google search and one of the results was the Urban Dictionary, a website where people submit their own definition of cultural slang. She searched the Urban Dictionary and found about a page and a half of definitions of “nickels” with five to ten definitions per page. Nowhere under the definitions of “nickels” was there a definition with racial connotation. None of the definitions of “nickels” stated that it meant “nickels n-word” or referenced the n-word. {Witnesses used the term “n-word” to reference the word “nigger” and it is used herein to connote the same.} After the definitions of “nickels”, there were words containing the term “nickel(s)” like “nickels n-word” and “nickel dollar” which had their own definitions. According to Urban Dictionary, “nickels n-word” meant a poor black person who pays in change.

At the time Ambroise heard Kahalas’ comment, she did not associate it with “nickels n-word.” At hearing, Ambroise admitted that she had no reason to believe that Kahalas has ever used the Urban Dictionary. It was only after speaking with a friend, and looking up the term “nickels” on Urban Dictionary that she concluded the comment had racial connotations….

Ambroise discussed Kahalas’ comment with Welsh. Welsh was familiar with Kahalas using a phrase that included “nickels” and remembered it was something to the effect of rubbing two nickels to get a dime. Welsh told Ambroise that he was certain that Kahalas did not mean the comment in reference to race. Ambroise told Welsh that she agreed. I do not credit Ambroise’s testimony that she did not talk to Welsh about the comment in light of Welsh’s credible testimony that they discussed it.

The day after Kahalas made the comment, Ambroise told Aronson about the definition of “nickels n-word” in the Urban Dictionary. Ambroise told Aronson that “nickels” was somewhat connected to “nickels n-word” and she was not comfortable with Kahalas using the term “nickels.” She asked Aronson to tell Kahalas not to call her “nickels” again.

Kahalas learned from Aronson that Ambroise had complained about his comment. He could not understand how the joke he had told for years could be interpreted as a racial comment, and was livid that he was being accused of making a racist comment. I credit Kahalas’ testimony that he felt Ambroise was trying to make him look like he had said something racist when he had not. Kahalas never used the Urban Dictionary and did not know it existed until after he was told Ambroise looked something up on it.

Kahalas never used the term “nickels” again and told Ambroise that he didn’t mean anything other than a joke….

NOVEMBER 13-14, 2017

I credit the following testimony by Ambroise. On November 13, 2017, there was a meeting between Ambroise, Kahalas and Guerriero. During that meeting, Kahalas told Ambroise that she was being hypersensitive for complaining about the “hate nickels because they are not dimes comment” and needed to lighten up; asked Ambroise whether she had a personal issue with Guerriero; and notified Ambroise that she was receiving a warning for leaving the office without notifying a supervisor. I infer that warning was for the November 10, 2017 incident since Kahalas had already notified Ambroise of the warning for the November 1, 2017 incident. I credit Ambroise’s testimony regarding the November 13, 2017 meeting for the following reasons: Kahalas was upset over Ambroise’s reaction to his comment; the Ambroise-Guerriero relationship had deteriorated by that point (see below); and just three days before, Ambroise had left the office without permission. In light of Ambroise’s credible testimony regarding this meeting, I do not credit Kahalas’ testimony to the extent it implies that: (a) after November 10, 2017, he did not discuss with Ambroise her leaving the office without permission; or (b) the only conversation he had with her regarding the “hate nickels because they are not dimes comment” was telling Ambroise that he didn’t mean anything other than a joke.

The next day, November 14, 2017, Ambroise overheard a conversation in which Kahalas was telling Bergel that Ambroise was accusing him of being a racist; he was not stupid enough to call her anything bad; he gave money to Suffolk University Law School for minority scholarships; and guessed Ambroise received a scholarship. I credit Ambroise’s description of what she overheard, as it is corroborated by the following. Kahalas graduated from and donated funds to Suffolk University Law School for minority students who could not afford to attend law school.

Kahalas’ comments on November 13 and 14, 2017 made Ambroise uncomfortable.

ALLEGED LUNCHROOM INCIDENT

Ambroise testified that on November 17 or 18, 2017, Ltayf commented that Ambroise’s hair looked like a Brillo pad, Ambroise was ugly or “fucking ugly,” black women were ugly, and made a sound of disgust regarding Ambroise…. I do not credit Ambroise’s testimony, and I find that Ltayf made a joking comment about Bongiorno’s hair and not a derogatory racial comment about anyone….

{LTAYF’S ALLEGED COMMENTS

Professional appearance in the office was important to Ltayf. If Ltayf believed an employee’s appearance was inappropriate, she would tell the employee. Ltayf told Clancy, when she dyed her hair blue, that her hair was nice but inappropriate for the office. Ltayf believed attire was important to Kahalas and did not want Clancy to get in trouble. Clancy corroborated Ltayf’s focus on professional appearance and belief that Kahalas required professional appearance, by testifying that Ltayf told Clancy that her blue hair looked silly and Kahalas would not allow it.

Ltayf considered Ambroise’s overall appearance to be disheveled. Ltayf believed Ambroise’s hair looked unhealthy and her attire unprofessional as it was not office-wear. Ltayf made comments to others about Ambroise’s unprofessional appearance at work.

Ambroise became offended about something Ltayf said about Ambroise’s hair. I credit Ltayf’s recollection of that incident. On one day, Ltayf noticed there was something, perhaps a piece of lint, in Ambroise’s hair, told Ambroise there was something in her hair, and removed it from Ambroise’s hair, who “totally took [the situation] out of context.”

On another occasion, Ltayf asked Ambroise if she used hair conditioner during a discussion regarding hair products with Ambroise, Ellison and Clancy. Although Clancy did not recall the discussion, I credit Ltayf’s testimony that it occurred, because I find persuasive Ltayf’s testimony that she and Ambroise did not have the kind of relationship where Ltayf would just walk up to Ambroise and ask her whether she used hair conditioner.

I credit Ambroise’s testimony that in October 2017, Ltayf made a comment about Ambroise’s skirt in front of Guerriero, who snickered, as it is corroborated by Ltayf’s testimony that she considered the things that Ambroise wore to be unprofessional.

At times, Ltayf commented about how beautiful Ellison was, and how nice her hair looked.

I do not credit Ambroise’s testimony that early in her employment, at a time when she was looking for supplies in a closet, Ltayf told Ambroise to “come out of the closet already,” because Ambroise filed a statement with the Commission within one month after her employment at the Firm ended that did not reference such a comment.

I do not credit Ambroise’s testimony that in late September/early October 2017, Ltayf asked her if she ever combed her hair nor do I credit her testimony that in mid-November 2017, Ltayf again asked her if she ever combed her hair. Ambroise testified that she believed both comments were made in front of Clancy’s desk and that Clancy overheard them. Clancy credibly testified she never heard such comments.}

The hearing officer concluded that the various comments Ambroise complained about weren’t based on her race or color, and thus weren’t racial harassment:

I determine that the following comments and actions were not based on race or color. First, as detailed below in the disparate treatment section, the two verbal warnings Ambroise received were not based on race or color. Second, there is no evidence the skirt comment was based on race or color. Third, derogatory comments about physical features linked to race can constitute race discrimination and/or create a hostile work environment, but Ltayf asking Ambroise, as part of a group discussion regarding hair products, if she used a hair conditioner is not a derogatory comment based on race or color. Fourth, Ltayf’s comment about Ambroise having something in her hair and taking it out was rude, but under the circumstances in this case, not based on race or color. Fifth, Ltayf’s positive comments about Ellison and her hair do not imply derogatory comments about Ambroise’s hair or race or color. Sixth, Kahalas calling Ambroise incompetent in the context of her drafting a letter was not based on race or color as evidenced by his expressing displeasure at times regarding quality of work by Ltayf. Because these comments and actions were not based on race or color, they cannot support the hostile work environment claims.

I determine the “hate nickels because they are not dimes comment” itself was not based on race or color. It was a joke about money Kahalas had used for years. Ambroise had no reason to believe he ever used the Urban Dictionary; admitted that nowhere under the definitions of “nickels” in the Urban Dictionary was there any definition with a racial connotation; and agreed with Welsh that Kahalas did not mean the comment in reference to race.

There may be circumstances where an employee being told she was hypersensitive and should lighten up over a comment she thought had racial connotations are not themselves comments based on race. However, under the circumstances of this case, which include Kahalas speculating the next day after he said such comments that Ambroise received a scholarship designed for underprivileged minority students, I determine the hypersensitive, lighten up, and scholarship comments are sufficiently connected to race or color. I shall collectively refer to those three comments as “Kahalas’ reactionary comments.”

Lastly, I analyze whether the comments connected to race or color, when considered in their totality, were sufficiently severe or pervasive to alter the terms or conditions of employment or create an abusive working environment for a reasonable person in Ambroise’s position considering all the circumstances. Even though I determined that the “hate nickels because they are not dimes comment” was itself not based on race or color, it is inherently entangled with Kahalas’ reactionary comments, and under the circumstances, I deem it appropriate to consider the combined effect of that comment and Kahalas’ reactionary comments in assessing whether there was an actionable hostile work environment.

The n-word is one of the most vile and devastating words in the English language. Its single utterance, by itself, is more than sufficient to establish a hostile work environment by race and color. But in this case, the n-word was not used, and any connotation to it is too attenuated to have meaningful impact. The “hate nickels because they are not dimes comment” was a joke about money that Kahalas had used for years. When Ambroise heard the comment, she did not associate it with “nickels n-word.” None of the definitions of “nickels” she found in the Urban Dictionary had a racial connotation, meant “nickels n-word” or referenced the n-word. In the Urban Dictionary, the term “nickels n-word” was a separate term from the term “nickels” with its own definition. Ambroise had no reason to believe Kahalas ever used the Urban Dictionary and agreed with Welsh that Kahalas did not mean the comment in reference to race. Kahalas telling Ambroise that she was being hypersensitive and should lighten up regarding his comment was insensitive. Kahalas complaining to another employee about Ambroise’s reaction to his comment and speculating she had received a scholarship designed for underprivileged minority students was insensitive and insulting. However, Kahalas’ reactionary comments combined with each other and the underlying “hate nickels because they are not dimes comment” fail to create a sufficiently severe or pervasive hostile work environment to rise to the level of race or color harassment. Thus, the hostile work environment claims of race and color are dismissed….

The court also concluded that there was no evidence that Ambroise’s eventual firing was based on her race or on retaliation for her complainants.

Richard M. Welsh, Jr. represents Kahalas.

The post "Hate Nickels Because They Are Not Dimes" appeared first on Reason.com.

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Give to Reason, Because We Have to Repeal Bad Laws


repeal-day | Reason

Today is Repeal Day—the day we celebrate the end of Prohibition.

Prohibition was dubbed the “noble experiment,” but there was nothing noble about it. 

The federal ban on buying, selling, and producing most alcoholic beverages turned a peaceful, artisan booze trade into a black market run by outlaws and gangs with guns. 

The only good news to this story is that in the end, after more than a decade of disaster and dysfunction, the feds finally gave up, wiping the ban from the books with a new constitutional amendment. 

That’s the way it is with public policy: Often the best way to reform government is just to end bad laws. 

Here at Reason, that’s what we make the case for every single day. 

At Reason, we argue for getting rid of entire federal agencies. We push for eliminating stupid, maddening, and counterproductive zoning laws. We show how top-down bans and mandates make everything worse for everyone. 

The FDA? The FCC? The TSA? Zoning? The Jones Act? The chicken tax? Yep. Even the chicken tax. 

We don’t need any of that nonsense! Let’s have a Repeal Day for all of it. 

We make these arguments with data, dispassion, and reasoned argument. But sometimes we do have to yell a little bit

Give us your money right now so we can keep on yelling about bad laws.

Even better: Your donation will be matched, thanks to a generous donor. In drink terms, you can think of it as ordering a single pourbut getting a double on the house. 

We also make the case against new bad laws—especially those that, like Prohibition, try to stop you from doing, consuming, and enjoying stuff that’s already legal and fun. 

When politicians try to outlaw PornHub, TikTok, Four Loko, or strawberry-flavored vapes, we’re on your side too. 

Prohibition has been over for nearly a hundred years. But the Prohibitionists aren’t letting up. Neither are we. 

Donate to Reason to help us stop the new Prohibitionists!

With your support, we end bad laws—and stop terrible new ones from going into effect

The post Give to <i>Reason</i>, Because We Have to Repeal Bad Laws appeared first on Reason.com.

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Hope Dies, Gold Flies

Hope Dies, Gold Flies

Authored by Matthew Piepenburg via GoldSwitzerland.com,

The primary stages of grief include: Denial, anger, bargaining, depression and finally, acceptance.

When it comes to grieving over the slow demise of the American economy, sovereign IOU/USD and the absolute failure of our “re-election-only-focused” policy makers, these stages of grief are easy to see yet easier to ignore.

But false hope won’t help us.

Denying a Recession

With the vast majority of sectors that make up the U.S. economy evidencing three months of negative GDP growth while a laundry list of leading homebuilder indicators (housing starts and prospective buyers) drops into recessionary red, I keep wondering when the recession debate will finally end.

Walmart is worrying, Jamie Dimon is worrying, commercial real estate delinquencies are rising and IPO markets are all but dead on arrival.

But that’s just the latest hard data.

One can cite everything from the Conference Board of Leading Indicators, negative M2 growth, yield curve movements and a drying repo market to make it empirically clear that the US is not heading for recession but has already been in one for nearly a year.

In fact, if we were to define a Depression by growth rates of inflation-adjusted GDP per capita, then factually speaking, we have also been in a quantifiable depression for the last 16 years.

Such data, of course, is depressing, but are we all still hoping for kinder facts or a political and monetary Santa Claus to cure our denial?

I for one favor preparation over denial.

Then Comes the Anger

Citizens storming the Capital, or grabbing guitars and singing “I’m taxed to no end and my dollar aint $#!T” are just the first signs of  the anger stage.

Even if the average (and indeed heroic) member of a grotesquely ravaged middle class can’t fully articulate every nasty detail of Wall Street lingo behind a Rigged to Fail market economy, they are catching on to a system which has turned capitalism into feudalism–making them veritable serfs while C-Suite hucksters, from Sam Bankman Fried to Adam Neumann fashion themselves as lords of the manor.

(Now Barron Larry Summers has joined the Marquis de Sam Altman at OpenAI, the perfect combo of perfect [insider] little devils.)

The backbone of America may not fully know the statistics which confirm that 90% of the wealth created by a Fed-driven market bubble circa 2009 was enjoyed by only the top 10%, but they certainly can “feel” it.

Meanwhile, the politicos and central bankers will keep inventing platitudes to mask honest math as market pundits debate soft and hard landings while US voters prepare for an election between a dark-state sleep-walker and an arrested-state swamp-cleaner as soldiers and money are ear-marked toward no-win wars.

Next, the Bargaining and the Depression

Despite obvious evidence of an angry, post-lockdown/mandate society and economy in open decline, some folks still want to believe (bargain) in the iconic America and intuitively turn toward the public “experts” for a miracle solution.

But as I’ve warned with facts rather than invective: Please don’t trust the experts.

The squawking and headlines from our mental midgets in DC are clever diversions from current truths, but as my colleague, Egon von Greyerz, recently made factually clear, truth is as fatal to policy makers as garlic is to vampires.

This, again, IS depressing. And according to the current Zeitgeist (and clinical depression/anxiety data from big pharma), depressed is exactly where America sits today.

Finally: Stone Cold Acceptance

Now that we pass from denial, anger, bargaining and depression, it’s time to accept the recession which our leaders refuse to acknowledge.

Acceptance, at the very least, allows us to think and then act even in the worst of settings.

So then: What can we ACCEPT, EXPECT, and hence DO while our policy makers fight for votes like donkeys scurrying for hay?

Deflation, Inflation and a Neutered Dollar Ahead

The short answer is this: Brace yourselves for a deflation to inflation roller coaster followed by bond volatility and a currency-killing wave of fake money.

Why?

Because math and history still matter.

Whether admitted or hidden, recessions tend to clip the wings of tax receipts. But what does that have to do with markets, currencies and, well… each of us?

In fact, a heck of a lot.

Falling Tax Receipts + Rising Deficits = “Super QE”

In a recession, we can reasonably assume a potential tax receipt decline of 10% in 2024. This will come at the same time that Entitlement spending is rising by 10%.

That’s a double-whammy.

And if one were to then include (as Luke Gromen has done) an average 4% interest rate for 2024, then all of these recessionary percentage numbers add up to a stark piece of easy math but hard days ahead.

That is, we are looking down the barrel of a probable (rather than sensational) True Interest Expense on Uncle Sam’s public debt equal to 120% of US tax receipts.

Think about that.

This percentage is higher than what we saw during the COVID crash of 2020, which was followed by unthinkable trillions of fake money from our equally fake, but all too human, Federal Reserve.

Having thus done the math, Gromen foresees “Super QE” ahead, and I agree.

Relative Strength Is Still No Strength: Brace for Inflationary End-Game

For me at least, this means all the debating about the USD’s relative strength, is still missing the point of its ever-debasing (and hence declining) inherent strength in the face of an impending deluge of “easy money” to keep Uncle Sam on his clay feet.

In other words, get ready for lots and lots of inflationary and currency-debasing fake money in the months ahead once a deflationary recession and potential market massacre are followed by an inflationary fire hose of “accommodative” liquidity (and rate cuts).

No Good Options Left

If not, Uncle Sam’s only other option is to remain higher-for longer, whereby the USD spikes on the tailwind of higher rates as the rest of the world, beaten down by an expensive USD, falls flat on its face ala Japan.

But even in such a scenario, the end-game, which has been true for every debt-cornered nation, empire, kingdom or democracy in history (from ancient Rome to today) will be the same: Save a broken system by killing its currency.

This recession-based prognosis on the longer-term direction of the Fed, rates and the USD is no surprise to the bond jocks either.

Accepting Bond Market Reality

Having argued that history and math matter, let me repeat that bonds matter even more.

What are they telling us?

In recent weeks, investors have been dumping dollars and leaping into longer-duration bonds in anticipation of a recessionary “safe-haven.” This explains recent falls in UST yields.

In fact, investors are overweight bonds at levels not seen since 2009.

For retail investors, this flow toward bonds is based on the belief that inflation and yields will drop in 2024 thanks to Powell’s brilliant war on inflation having been won.

Eh-Hmmm.

But portfolio managers are jumping into bonds because they see a recession ahead and are positioning themselves to be early buyers of a rising (i.e., Fed-rescued) bond price.

Smart Money & Dumb Money: Both Wrong

What’s ironic, however, is that both the so-called “smart” and the “dumb” money may be wrong for totally different reasons, as they are each missing the longer-term forces at play—namely an over-supply flood of more USTs ahead.

This means falling bonds and rising yields—longer term.

Why do I take this view? Well, because recessions are not only easy to see, but easy to pattern.

Missing the Importance of UST Over-Supply

Recessions, for example, typically mean growing deficits, and growing deficits mean more USTs spitting out of Uncle Sam’s IOU box.

This looming rise in UST supply eventually means more downward rather than upward pressure on UST pricing longer term.

Thus, even if the USD spikes near term into 2024, foreigners pegged to that expensive Dollar will dump even more of their $7.6T worth of USTs to “milk-shake-suck” more needed USDs, adding even further downward pressure on UST pricing.

By natural math, and simple history, this decline in UST pricing due to massive UST over-supply will spur even higher yields, which in turn means higher rates, which in turn means Uncle Sam won’t be able to afford/pay his higher-rate IOUs without a lot of help from the inflationary money printers at the Eccles Building.

Short of a default or Bretton Woods 2.0, such mouse-clicked money is all Uncle Sam will have left to pay for his own and ever-increasing debt.

This is How Currencies Die

Again, this end-game is nothing new. In fact, it’s always the same choice: Save the bonds or kill the currency.

And you know where my bet (and history’s lesson) lies.

In the interim, be ready for a bumpy ride and more debating pundits splitting hairs on the Dollar, the UST, interest rates, M2 data, CPI correlations and FOMC tea leaves.

Toward this end, yes, the USD can rise, as can UST demand and price. And yes, deflation can, and will come as well—prior to much higher inflation.

This is because the longer play is as easy to see as the destiny of any debt-soaked nation: More and more IOUs paid for with a weaker and weaker currency.

Or stated more contemporaneously, get ready for rising and then falling USTs and falling and then rising yields “saved” by more fake Dollars to “accommodate” an already and inevitably over-supplied UST from an objectively broke America.

Milk-Shake Straws & Sponges Won’t Save the Dollar

To those who follow the milk-shake theory, there is the defensible view that enough national and global demand for USDs will act as a powerful sponge to soak up all the printed Dollars to come, keeping the DXY value of the USD forever (and relatively) safe, strong and victorious.

Hmmm…

But I lean on the view that even a super sponge (or global “straw”) of such magnitude will be unable to absorb the fire hose of milk-shake liquidity about to come pouring through it in the years ahead to “keep America on a respirator again.”

More importantly, and as alluded above, even if the USD’s relative strength survives on the power of that magical sponge (or straw) of eternal Dollar demand, when measured in real terms—i.e., in terms of constant purchasing power –that Dollar’s inherent purchasing power will get weaker and weaker as inevitable synthetic/fake liquidity rises higher and higher.

And this is why anyone who measures their wealth in this paper currency is …well: Screwed.

Your Dollar simply buys less and less, and though it may be relatively stronger than other fiat currencies, is it really any consolation to be betting on the best patient in the ICU, when all the patients are in fact fatally ill? 

What very few pundits and even fewer investors wish to fully accept is that once debt levels for a nation go from absurd to flat-out inconceivable (i.e., a debt/GDP ratio of 120%+), the only real option ahead is to inflate away that debt with debased money.

This means Powell’s “war on inflation” is a public ruse.

As I’ve argued, he NEEDS inflation, but has the added luxury of being able to openly lie about the current CPI scale, which grossly under-reports actual inflation.

Too Late for Austerity

As for the more sober approach of simply confessing to America’s debt nightmare and accepting the need for austerity, the FED, which was created by (and lives only for) Wall Street, knows that any such attempt at austerity sends the sovereign bond market into a liquidity crisis.

In the second quarter of 2022 and the 3rd quarter of 2023, brief attempts at governmental “austerity” resulted in immediate dysfunction in the UST market.

In short, it’s too late for austerity. Sovereign bonds can’t stomache the volatility which follows and which we are now seeing in real time.

America’s current debt/GDP ratio is too high for an austerity option as it would cripple credit markets, drive down GDP, further weaken tax receipts and hence make Uncle Sam’s IOUs even harder to pay.

Again, few investors wish to fully accept that America has “no way out.” The nation is too far in debt to “GDP its way” forward, which means it’s left with “inflating/printing its way backward.”

Gold Investors See What Few Are Willing to Accept

Or stated more simply: Your currency is about to lose even more of its already diluted purchasing power.

Gold investors, whether on Main Street, Wall Street or among a BRICS+ nations, of course, are not afraid to see (and ACCEPT) this.

Even Central Banks see this: They are net seller’s of USTs and buying physical gold at record levels.

In short, many have already replaced false hope and paper money with cold facts and real money to preserve their wealth.

What about you?

Tyler Durden
Tue, 12/05/2023 – 07:20

via ZeroHedge News https://ift.tt/HSf6R9r Tyler Durden

US Military ‘Revises’ Post-Vax Myocarditis Stats Lower

US Military ‘Revises’ Post-Vax Myocarditis Stats Lower

The U.S. Department of Defense has revised its figures related to heart inflammation cases following COVID-19 vaccination. This change marks yet another instance in the military’s ongoing efforts to navigate the complex landscape of vaccine side effects.

Ashish Vazirani, the acting under secretary of defense for personnel and readiness, cited an Oct. 11 report which says that the number of myocarditis and pericarditis cases post-vaccination among military personnel is now estimated between 80 and 90. This contrasts sharply with the previous count of 120 cases within 21 days of vaccination, a number that also excluded additional cases occurring beyond this time frame. The Pentagon’s silence in response to inquiries adds an air of mystery to this sudden recalibration.

This revision emerges as the latest in a series of actions perceived as downplaying the vaccine’s side effects. In 2021, amidst data indicating diminishing vaccine efficacy, the military continued to mandate vaccination for all members, regardless of their recovery from COVID-19 or the emerging evidence suggesting the superiority of natural immunity over vaccination. This mandate was only recently lifted under new legislation signed by President Joe Biden.

Myocarditis and pericarditis, both forms of heart inflammation, were recognized as adverse events shortly after the vaccine rollout. Notably, 2021 saw a significant rise in myocarditis cases within the military, which was openly acknowledged over the summer.

The recent disclosure by Mr. Vazirani in a letter to Senator Ron Johnson further complicates matters. He highlights the challenge in reporting precise adverse event numbers due to the complexities in establishing a direct causal link between vaccination and clinical diagnoses. This statement contradicts an earlier report to Representative Mike Rogers, which cited 326 cases of myocarditis, 351 cases of pericarditis, and 353 heart attacks among military personnel. These numbers, derived from the Defense Medical Surveillance System and the Theater Medical Data Store, reveal a stark discrepancy in reported figures.

Mr. Vazirani, in the follow-up missive, said that the military included members in the prior vaccination group who had a prior infection and members in the prior infection group who had a prior vaccination. He did not provide a breakdown of members with vaccination without prior infection or other subcategories.

In the report shared in September, the military said the incidence of myocarditis and pericarditis was higher in members within 45 days of infection compared to members without infection, while the incidence was also higher among members who received a vaccine dose within 21 days of myocarditis or pericarditis was higher than those who did not receive a vaccine. The results, though, showed that members were at higher risk following infection, though in absolute numbers, more members were recorded as suffering inflammation after vaccination than after infection. –Epoch Times

The inconsistency in reported numbers has raised questions and concerns. Senator Johnson has been actively seeking explanations for the observed surge in certain diagnoses during the pandemic. Whistleblowers have also played a crucial role, initially revealing a spike in myocarditis cases in 2021 through the Defense Medical Epidemiology Database. However, subsequent changes to these numbers, attributed to a “database maintenance process,” have only added to the confusion.

In 2023, another whistleblower reported further alterations in the recorded cases, with the Pentagon confirming 275 cases among members in 2021. This evolving narrative raises questions about the reliability and transparency of military health record-keeping.

The implications of these changes are significant, particularly when considering the potential long-term effects of post-vaccination myocarditis. Studies, including those by the CDC, have shown concerning findings in follow-up examinations of individuals who experienced myocarditis post-vaccination. Some patients, years after their initial diagnosis, report ongoing health issues, underscoring the need for continued research and vigilance in understanding and addressing vaccine-related complications.

Tyler Durden
Tue, 12/05/2023 – 06:55

via ZeroHedge News https://ift.tt/LiHG5cT Tyler Durden

Photo: The ‘My Boxes’ Theory of Trump’s Records Case


Boxes of documents taken from former President Donald Trump | Photo: Department of Justice

There have been several theories floated about why former President Donald Trump refused to hand records back to the National Archives, choosing instead to keep sensitive government documents at his Mar-a-Lago estate in what has become Palm Beach’s most famous bathroom. But the simplest and most durable explanation is the viral “my boxes” theory, which I initially hatched on Twitter: Trump likes boxes of stuff, and he wants to keep them. According to the federal indictment filed against Trump, he told one of his attorneys: “I don’t want anybody looking, I don’t want anybody looking through my boxes, I really don’t, I don’t want you looking through my boxes.”

The post Photo: The 'My Boxes' Theory of Trump's Records Case appeared first on Reason.com.

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