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Authored by Jonathan Turley,

Below is my column in the Hill on decisions issued by the Supreme Court in recent weeks and how they have served as a retort to those who are calling for court packing or major changes in the institution. As noted below, we expect to see more ideological divisions emerge this and next week in some of the outstanding “big ticket” decisions. However, the Court seems to have front-loaded a line of cases refuting the arguments that it is dysfunctionally and hopelessly divided along ideological lines.

Here is the column:

The Supreme Court this week continued to disappoint congressional Democrats and activists with a long line of embarrassingly unanimous, nonideological rulings. After all, the court is supposedly (to use President Biden’s words) “out of whack” due to its irreconcilable ideological divisions. Indeed, the court is allegedly so dysfunctionally divided that many, including Democratic leaders, have called for sweeping changes — from packing the court with new justices to changing its voting rules or even creating an alternative court.

That is why these weeks have so frustrated those who insist the court is a hopeless case of rigid ideologues. While next week could well bring some welcomed ideological divisions, the court is not making it easy on its critics.

Liberal Justice Stephen Breyer recently chafed at the claim that the court is “conservative” and condemned the calls to pack it with a liberal majority. A liberal group, “Demand Justice,” responded with billboard ads calling for Breyer’s resignation and warned him that he was risking his legacy. However, Breyer appears undeterred in ruling with his conservative colleagues when he considers that to be appropriate.

In the latest decision, Borden v. United States, the lineup of justices was strikingly nonideological. Justice Elena Kagan wrote the opinion for Justices Breyer, Sonia Sotomayor and Neil Gorsuch, with a concurrence from Justice Clarence Thomas — three liberal justices and two conservatives agreeing to limit the meaning of a “violent felony” for purposes of the Armed Career Criminal Act.

Last week, the decision in Van Buren v. United States was a majority of three liberals and three conservatives. In that case, the most senior justice was Breyer; he assigned it to his conservative colleague Justice Amy Coney Barrett, who wrote for Justices Breyer, Sotomayor, Gorsuch, Kagan and Brett Kavanaugh. Although he was on the other side in Van Buren, Justice Thomas joined his liberal colleagues in Borden.

These decisions follow a litany of unanimous decisions from the court, which seems to be sending a message in the timing of the release of its opinions: The justices do not rule on cases to send messages to Congress, but they do control what cases are accepted and when those decisions are released. It is hard not to view the last few weeks as a type of judicial “harrumph” to the continuing calls for court packing. While we expect more ideological splits in a few upcoming cases, these cases reaffirm that they are not so rigid or “hopelessly divided” as Democratic leaders and other critics have suggested.

In an op-ed for The New York Times, law professor Kent Greenfield argued that “the Supreme Court has become too partisan and unbalanced to trust it with deciding the most important issues of our day.” Greenfield calls for the establishment of a constitutional court that would strip the Supreme Court of the ability to rule on such questions because “the Supreme Court needs a breather.” That breather would last only 20 years — just enough time to shift the court’s majority.

That fate may still await the court. The call to pack today’s bench was never about reforming but about rigging the institution. House Judiciary Committee Chairman Jerry Nadler (D-N.Y.) said in 2020 that if Democrats gained control of Congress, “the incoming Senate should immediately move to expand the Supreme Court.” Former Rep. Joe Kennedy III (D-Mass.) once tweeted, “If [Mitch McConnell] holds a vote in 2020, we pack the court in 2021. It’s that simple.”

Harvard professor Michael Klarman and others have not been subtle about the need to pack the court to guarantee an immediate liberal majority. Klarman has said the court must be changed to enact the Democrats’ sweeping agenda — and Democrats shouldn’t worry about Republicans responding with their own court packing if they return to power. Indeed, he explained, the point of changing the system is to guarantee that Republicans “will never win another election.” Klarman conceded that “the Supreme Court could strike down everything I just described,” so the court must be packed in advance to allow the desired changes to occur.

The problem is the court is not cooperating. Instead, consensus has been breaking out on a court that is supposed to be “too partisan and unbalanced to trust.” Apparently, it still has life in it as a functioning, ethical body.

The justices will continue to divide on some cases along ideological lines, particularly on constitutional cases. That is because these are principled jurists who view core jurisprudential issues differently. Americans themselves are equally divided on issues ranging from abortion to gun rights to race-based college admissions. Yet although Democrats cry foul when five conservative justices vote as a bloc, they are entirely supportive of the liberal justices voting as a bloc on the other side of those decisions. One side is denounced as biased while the other is celebrated as enlightened.

Even so, there have been a number of major cases involving constitutional issues where justices have crossed the ideological line. Indeed, under Chief Justice John Roberts, unanimous opinions have continued to rise in number.

Of course, reality is rarely a barrier for politicians or pundits, particularly if news outlets distort the actual voting records of the justices. Moreover, President Biden has lacked the political courage or principle (that he once had as a senator) to stand up for the court against his own party. Instead, he has created a lopsided commission to appease the hard left. Yet even with the Democratic members and an obliging media, the Democrats are facing a public that continues to overwhelmingly oppose packing or changing the court. And the court is not making this easy by speaking inconveniently as one.

These politicians and pundits are in the same position as the coroner who was about to perform an autopsy a couple of years ago when the dead man began to snore. It is hard to ignore. Before we do an autopsy on a still living judicial body, the public may want to listen to the court rather than its critics.

An Illinois chemical plant is on fire Monday morning as a thick black column of smoke (possibly emitting dangerous chemicals into the atmosphere) prompted local authorities to evacuate residents within a one-mile radius of the facility. 

Chemtool, a manufacturer of fluids, lubricants, and grease, erupted in flames around 0700 local time Monday. Multiple fire departments were called to 1165 Prairie Hill Road in Rockton, Illinois, for reports of smoke coming from the plant. 

The company told local news WTVO, “We have confirmed all on site are safe and accounted for. Our concern right now is for the safety of all our employees and the surrounding community. As a precaution, authorities have evacuated residents in a one-mile radius of the site.

“We do not yet know what caused this incident, but we will be working with local authorities and with our own risk management team to determine what happened and identify any corrective actions. We will share more details as they are known.”

Around 1018ET, WTVO posted a video of a massive fireball ripping through the facility. 

MASSIVE EXPLOSION seen at Rockton, IL’s Chemtool plant. (Courtesy: WLS). LATEST: https://t.co/RGYxyJ8k2e pic.twitter.com/AtehTezor8

— Eyewitness News WTVO/WQRF (@MyStateline) June 14, 2021

According to EPA’s database, Chemtool has no compliance violations in the past three years as the origins of the fire remain a mystery. 

This is another blow to the global supply chain as fluids, lubricants, and grease, used in machinery, can no longer be made at the facility due to what appears to be heavy damage sustained from the explosion. 

Authored by Thomas Lifson via The American Thinker (emphasis ours)

The cover-up of the probability that COVID-19 was deliberately created in the Wuhan Institute of Virology (WIV) has had profound consequences for the entire world, preventing early detection and countermeasures, as well as derailing informed research.

One key element of that cover-up was the hiding of the fact that the Wuhan lab was working on bats, because the virus was a variant of an existing bat-borne virus.  The cover story, that a wet market led to the dispersal of COVID-19, would have looked awfully weak had it been known that the WIV was creating new viruses from bats.  Both the World Health Organization and Peter Daszak, who acted as an investigator for WHO, outright denied that the WIV had live bats in its research facility.

Australian journalist Sheri Markson has come into possession of stunning video from China uncovered by an underground research group that calls itself “Drastic” that shows live bats at the WIV and much, much more.  The newly uncovered video was produced by the Chinese Academy of Sciences in May 2017 commemorating the opening of WIV.

I have embedded Ms. Markson’s 16-minute video report for Sky News on the video discovery below, but for now, consider her tweet showing Daszak’s lie:

World Health Organisation investigator Peter Daszak initially denied there were bats at the WIV in this now deleted tweet. In another tweet he called it a conspiracy theory. pic.twitter.com/E0J9bmxrbT

— Sharri Markson (@SharriMarkson) June 13, 2021

She describes her findings:

An official Chinese Academy of Sciences video to mark the launch of the new biosafety level 4 laboratory in May 2017 speaks about the security precautions that are in place if “an accident” occurs and reveals there had been “intense clashes” with the French Government during the construction of the laboratory. The video shows bats being held in a cage at the Wuhan Institute of Virology, along with vision of a scientist feeding a bat with a worm. The 10 minute video is titled “The construction and research team of Wuhan P4 laboratory of Wuhan Institute of Virology, Chinese Academy of Sciences” and features interviews with its leading scientists. The World Health Organisation report investigating the origin of the pandemic failed to mention that any bats had been kept at the Wuhan Institute of Virology and only its annex referred to animals being housed there.

She notes that Daszak has now changed his tune — from his earlier absolute denial:

In one tweet dated December, 2020 he said: “No BATS were sent to Wuhan lab for genetic analysis of viruses collected in the field. That’s now how this science works. We collect bat samples, send them to the lab. We RELEASE bats where we catch them!” In another tweet, dated December 11, 2020, he said: “This is a widely circulated conspiracy theory. This piece describes work I’m the lead on and labs I’ve collaborated with for 15 years. They DO NOT have live or dead bats in them. There is no evidence anywhere that this happened. It’s an error I hope will be corrected.” This month, Daszak appeared to retract his earlier denials and admitted the Wuhan Institute of Virology may have housed bats but admitted he had not asked them.

Her report for Sky News also mentions the highly suspicious deleting of the WIV archives from the internet on the grounds of “hacking” and that WHO investigators never even asked to see them.

I rarely recommend readers watch such a long video, but this is an exception:

Ms. Markson is way ahead of the rest of the world’s journalists on this story — a story whose importance dwarfs that of other news, because the world has been turned upside-down, millions have died, countless businesses have been closed and lives upended by a virus whose origins have been deliberately obscured by people with, as Markson notes, serious conflicts of interest (to put it mildly).

Late Sunday evening, Washington Prime Group Inc., a mall owner with more than 100 shopping centers nationwide, filed for Chapter 11 bankruptcy protection, citing the virus pandemic paralyzed their business, according to a company press release. 

According to documents filed in the U.S. Bankruptcy Court for the Southern District of Texas, the Ohio-based mall operator was spun off from the largest mall operator, Simon Property Group, in 2014. The bankrupted company currently has 102 malls and strip centers across the country. 

Washington Prime’s Property Portfolio 

Washington Prime will continue to operate after striking a restructuring deal with creditors, led by SVPGlobal, that holds about 73% of the company’s secured corporate debt and 67% of the principal amount outstanding of the company’s unsecured notes. 

The company has assets at approximately $4 billion and debt of almost $3.5 billion, acquired a $100 million debtor-in-possession loan that will support operations in the intermediate term. 

“The COVID-19 pandemic has created significant challenges for many companies, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the Company’s outstanding indebtedness,” Washington Prime Group wrote in a press release.

Several retailers, such as Christopher & Banks, Guitar Center, New York & Company, J.C. Penney, Stein Mart, Sur La Table, Ascena Retail Group, and Tuesday Morning, have filed for bankruptcies over the past year and resulted in store closings were primarily tenants at some of the mall operator’s properties. 

Lou Conforti, CEO and director of Washington Prime Group, said, “The Company’s financial restructuring will enable WPG to right size its balance sheet and position the company for success going forward. During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure. The company expects operations to continue in the ordinary course for the benefit of our guests, tenants, vendors, stakeholders and colleagues.”

Malls were struggling well before the pandemic. Weeks ago, we reminded readers about our 2017 call, one of the first to bring the market’s attention to what has subsequently been dubbed “Big Short 2.0” as we reported that “Mega-Bears Smell Blood As Mall REITs Tumble.”

 “Wall Street speculators are zeroing in on the next U.S. credit crisis: the mall…. It’s no secret many mall complexes have been struggling for years as Americans do more of their shopping online. But now, they’re catching the eye of hedge-fund types who think some may soon buckle under their debts, much the way many homeowners did nearly a decade ago.”

Then in late 2019, none other than iconic investor Carl Icahn jumped into the big short 2.0, shorting America’s malls by going long default risk via CMBX, or otherwise shorting the CMBS.

… and despite the trillions in Fed liquidity to prop up every asset class in the world (especially credit), the CMBS market has failed to get excited. 

We reported weeks ago that a loan tied to a beleaguered mall outside of Las Vegas realized a loss of 120% after the shopping center sold for about the same price as a condo.

According to Bank of America Corp, the loan, which had a current balance of $62.2 million, was written entirely down after the Prizm Outlets were liquidated for just over $400,000. The Prizm Outlets had been valued as high as $28.2 million less than a year ago, and $125 million in 2012 when the loans were bundled into commercial mortgage-backed security.

When accounting for $11.5 million in fees and reimbursements owed to the master servicer for advances made, the total realized loss came to $74 million.

So maybe the onslaughter of malls has begun, the second one in weeks, as the Fed signals tapering its balance sheet is on the horizon. 

Authored by Steve Watson via Summit News,

During an interview with former Secretary of State Mike Pompeo, Fox News host Chris Wallace attempted to excuse the inaction of the Biden administration over the Wuhan lab leak by suggesting Trump and Pompeo did nothing for a year.

“You also criticized President [Joe] Biden for not pushing hard enough on China to look for the origins of the coronavirus,” Wallace charged, adding “But I want to again go back to your administration and the record there.”

Wallace continued, “President Trump and his team, including you, had almost a year after the COVID-19 first came on the scene to really press Beijing on what the origins were when the evidence was much fresher… What did President Trump and his administration, including the secretary of state, do to press China harder to get the evidence on where the COVID-19 virus came from because we still don’t know?”

A reminder that it was the Biden administration that SHUT DOWN an ongoing investigation initiated by Pompeo’s State Department, and it was the Biden administration that kept repeating there would be no more talk of any lab leak theory, until fresh intelligence, gleaned from Pompeo’s State Department investigation provided a new impetus to look harder at the Wuhan lab as the origin of the pandemic.

Pompeo, who has pushed for more extensive investigation into China’s cover-up since the get go, refused to go along with Wallace’s nonsense.

“Chris, the predicate of your question is all wrong,” he replied, adding “We have a really good idea what happened here. There is an enormous amount of evidence that there was a leak from the Wuhan Institute of Virology. There’s a pile of evidence 100 feet high. I have high confidence that that’s the case.”

“We pressed the Chinese communist party really hard,” Pompeo continued, adding “We withdrew from the WHO, which had become politicized. This administration chose to get back into that. I don’t know what tools they think they’re going to use. But we were serious in this endeavor. We made it clear that there would be real consequences for the Chinese Communist Party.”

“We got very close to being able to make a laydown case for what actually happened and how this virus came to kill millions of people around the world and destroy billions of dollars in wealth. We know enough now. The coverup continues and it’s time for accountability,” Pompeo urged.

Wallace directly asked “Do you that the virus came from a lab leak from the Wuhan Institute?”

“I do,” Pompeo replied.

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Paul Tudor Jones, the billionaire investor and founder of Tudor Investment Company, joined the hosts of CNBC’s Squawk Box for an early morning interview where he discussed the potential implications of whatever Fed Chairman Jerome Powell decides to tell the market on Wednesday, when he speaks after the central bank’s latest 2-day policy meeting.

Jones began by making his position on The Fed’s narrative very clear:

“The idea that inflation is transitory, to me … that one just doesn’t work the way I see the world.”

PTJ isn’t the only big-name investor who is skeptical of the Fed’s inflation narrative (a group that also notably includes Jeff Gundlach). At this point, whenever the Fed does decide to finally taper its stimulus measures, markets are poised to go “bat sh*t crazy”. That’s why this week’s Fed meeting is so important.

“I think this Fed meeting could be the most important Fed meeting in Jay Powell’s career.”

Most expect Powell will once again choose to dismiss signs of intensifying inflationary pressures and ignoring data like last week’s inflation print. If that’s the case, PTJ said he believes investors should keep going all in on the inflation trade.

“If they treat these numbers – which were material events, that were very material – with nonchalance, I think that’s a green light on the inflation trade,” Jones said in an interview on “Squawk Box”.

“I’d probably buy commodities, buy crypto, buy gold.”

But if the FOMC “course corrects,” something few expect at this week’s meeting, then markets could be in for a pumping ride.

“If they course correct, if they say, ‘We’ve got incoming data, we’ve accomplished our mission or we’re on the way very rapidly to accomplishing our mission on employment,’ then you’re going to get a taper tantrum,” Jones said.

“You’re going to get a sell-off in fixed income. You’re going to get a correction in stocks. That doesn’t necessarily mean it’s over.”

With so much confusion right now, exacerbated by the Fed’s refusal to meaningfully taper its post-COVID-19 stimulus,  PTJ said putting together a portfolio is no easy feat. As of now, he said he’s keeping 5% of his assets in bitcoin, 5% in gold, 5% in commodities, 5% in cash and, as for the rest, who knows?

Of course, the Fed can’t keep its accommodative measures forever. PTJ said he’s grateful he’s not a pension fund manager because right now between bonds and stocks “they are so overvalued, they are at 100 year highs. I would have as many inflation hedges on as I possibly could.”

At one point in the interview, PTJ reiterated his support for bitcoin, which he previously endorsed on CNBC back in October.

“I like bitcoin. Bitcoin is math. math has been around fro 2 thousand years 2 + 2 will equal four for the next 2k years…bitcoin has appealed to me because bitcoin is a way to invest….do i want to have faith in that same reliability and consistency of human nature…”

As for bitcoin’s environmental impact, PTJ acknowledged that this might be a problem:

“it costs more to mine gold than it does to mine bitcoin. clearly, I’m concerned about the effects of bitcoin mining…if I was king of the world I would ban bitcoin mining until we found a better way.”

“I have a lot of friends heavily invested in crypto. I have a defensive position for myself and for my family, but I don’t even look at it any more.”

Tudor also offered some skepticism about the Fed’s strategy, saying that over-inflated financial assets are making him nervous.

“I hope that we mean revert back to financial orthodoxy. I get nervous…

…you could argue that the Nasdaq is going to go up 20% if we stay at this pace in Treasury purchases…

I don’t know if that’s necessarily a good thing. I don’t know if continuing to increase valuations through monetization is the right course.”

Finally, CNBC’s Andrew Ross Sorkin finished off the interview with s simple question about taxing billionaires, which has been heavily in the news over a couple of weeks.

Watch the full interview below:

Authored by Mike Shedlock via MishTalk.com,

Who’s right? The Bond market or the massive herd screaming inflation?

As of the end of May, the Year-Over-Year CPI was a hot 5.0%. The yield on the 10-year Treasury note was only 1.62%.

The 10-year yield has since fallen to 1.46% causing alarm bells in some quarters. 

‘Shocking’ Inflation Numbers

The inflation numbers seem shocking but ‘Shocking’ inflation numbers will fall back to earth and hurt reopening trades, economist David Rosenberg predicts.

Economist David Rosenberg believes the bond market is getting inflation right and yields shouldn’t trade at higher levels.

His reasoning: Inflation as a temporary phenomenon caused by enormous pent-up demand and supply chain issues connected to the coronavirus pandemic.

“The numbers have been shocking to the upside, no doubt about it. But it’s pretty easily explainable,” the Rosenberg Research president told CNBC’s “Trading Nation” on Friday. “I don’t understand why people want to superimpose these last couple of months into the future.” 

So far, the bond market is shrugging off inflation. The benchmark 10-year Treasury Note yield hit its lowest level since March 3 on Friday and closed at 1.45%. The yield is off 7% over the last week and down almost 11% over the past month.

“There is just so much noise and distortion in the data,” said Rosenberg, who served as Merrill Lynch’s top North American economist from 2002 to 2009. “The most dangerous thing anybody can do is extrapolate what’s happening now.”

Refusal to Hyperventilate

Rosenberg  says he “refuses to hyperventilate over inflation” and that surging growth will fade in the second half of the year. 

I agree the bond market has the story correct (at least in terms of direction) and have stated that many times. 

On May 8, I commented Add David Rosenberg To List Of Those Who Believe Inflation Is Transitory

Others in that camp include Lacy Hunt at Hoisington Management. 

Real 3-Month Yield 

I commented above on direction. I believe the bond market has the direction in June correct (falling yields).

That said, the “real yield” is nearly -5% (CPI minus the 3-Month Treasury Yield). This fosters speculation in assets. 

We are in the midst of the third big bubble in just over 20 years. 

Extrapolating Conditions

It’s usually a big mistake to extrapolate current conditions far into the future. And that includes now.

Sure, there are huge wage pressures and the price of some commodities, especially lumber, went through the roof.

But where to from here is what’s important.

Despite Wage Increases, Real Hourly Pay Is Losing to Inflation

On June 11, I commented Despite Wage Increases, Real Hourly Pay Is Losing to Inflation

I also noted Huge Upward Wage Pressures for Both Skilled and Unskilled Labor

But Lacy Hunt is holding pat as well.

He pinged me in response to Explaining the Shortage of Skilled Workers and Why It Will Get Worse with these thoughts.

Mish,

Excellent analysis. I would add one point as a result of your conclusion. Older populations with declining birth rates and slower population, depress household, business and public investment. The contracting effect on investment is highly deflationary and overwhelms the impact of inflation due to the smaller labor force. This condition is plainly evident in Japan and Europe. Moreover, this pattern will be increasingly apparent in the US.

The Transitory Boat

The transitory boat is a small one. Powell and Yellen have to say that no matter what they believe.

Rosenberg, Hunt, and I are in the small boat. 

And if you want another reason to be in that boat with us, then think about what happens when asset bubbles burst. It won’t be inflationary, that’s for sure.

Meanwhile, “I just say buy the gold,” Rosenberg said. “Gold has 1/5 of the volatility that bitcoin has.”

For more on gold and real interest rates, please see my June 11 post Real Interest Rates Suggest It’s a Good Time to Buy and Hold Gold

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