admin – Page 12897

A Phoenix Cop Allegedly Showed Up to a Woman’s Apartment, Grabbed His Genitals, and Pretended To Shoot Her

The Phoenix Police Department is down another police officer after a woman filed a lawsuit alleging stalking and harassment while acting under the color of law.

According to the lawsuit, Maricopa County resident Marcela de Jesus Guzman Estrada was driving to the grocery store after church in August 2018 when officer Marcos Rodriguez pulled onto the road abruptly in his police cruiser. He was on his cellphone. Guzman swerved to avoid being hit. Down the road, Rodriguez pulled up beside her vehicle, signaled for her to lower the window, and apologized for his driving.

When she attempted to drive away, Rodriguez indicated that he wanted her to pull over, but did not engage his cruiser’s lights. He then pulled up to Guzman’s car facing the opposite direction and extended his apology to an invitation to coffee.

The lawsuit says that Rodriguez informed Guzman he had an emergency call, but that he continued to pester her for coffee. Guzman declined his offer several times during the exchange, at one point using the priority of an emergency call as justification. Guzman says in the lawsuit that she gave Rodriguez her business card and he drove away.

Later, Rodriguez allegedly texted Guzman at her business card cell number. He then showed up to her apartment dressed in his uniform and holding his department laptop. The lawsuit says that Guzman was “uncomfortable” considering she never gave Rodriguez her address. Still, she says in the lawsuit that she let him inside under the belief that he was there to conduct a report about the driving incident.

Setting up his laptop at her dining table, Rodriguez allegedly began to make comments on them becoming friends. He suggested that Guzman needed him in her life because she lived alone. The conversation turned sexual when Rodriguez asked Guzman, who he seated at the table, if she wanted to be kissed. Guzman noted a wedding band on his finger and further rebuked his advances. Rodriguez allegedly replied by calling his wife “boring” and his marriage “dead.”

During the exchange, Rodriguez stood up, grabbed his genitals, and asked Guzman if she was interested in “some of this.” Rodriguez hovered his pelvic area over Guzman, who then attempted to get him out of her apartment by saying she had to go to the movies.

Rodriguez continued, describing his desire to have anal sex. Guzman continued to deny him and asked him to stop making sexual advances. According to the lawsuit, Rodriguez told her that he was an officer and had the authority to do as he pleased.

The lawsuit says that Rodriguez demonstrated on Guzman what he would do if someone were to disarm him on the street. Guzman alleges that Rodriguez wrapped his arm around her neck and pointed his gun at her face. He then moved the gun to her ribs before leaving the apartment.

Rodriguez continued to text Guzman. His texts ranged from telling her that she needed a man for protection to sharing deeply personal details about his broken childhood. Guzman was forced to abandon her apartment very quickly out of fear for her safety. Because of the abruptness, Guzman lost many of her possessions.

The lawsuit also names three other detectives as defendants: Hunnicutt (whose first name is not listed in the lawsuit), Brandon Warner, and Carmina Theriault. Guzman says in her lawsuit that Hunnicutt and Warner took Guzman’s information at the police station but did not follow up with her. Theriault also heard Guzman’s story, but then rudely screamed that she watched too many movies and was merely seeking money from the police department.

Last month, the Phoenix City Council approved a $125,000 settlement to Guzman. Phoenix Police Department Spokesperson Sgt. Tommy Thompson confirmed to Reason that Rodriguez was terminated on October 16, but he was “unable to provide more information at this time, because the appellate process is still ongoing.”

The Phoenix New Times reports that Rodriguez is the fifth officer since August to be fired from the department for major and disturbing misconduct.

from Latest – Reason.com https://ift.tt/2NoTYce
via IFTTT

Netflix To Spend $15 Billion On Content Amid Escalating Streaming Wars

Last month, Netflix confirmed competition among other streaming services is heating up as it expects to add fewer subscribers in the quarters ahead. To combat these trends, Netflix intends to spend a whopping $15 billion on programming this year, outsizing its competition by a longshot, reported Bloomberg.

The streaming wars between Netflix, Disney+, Apple Tv, Amazon Prime, Hulu, and YouTube are gaining momentum into the late year and will heat up through 2020.

Netflix CEO Reed Hastings told an audience at the DealBook conference Wednesday that the streaming company must outspend its competitors to win the streaming war.

“We plan on taking spend up quite a bit,” Hastings said at the NYC event. “We’re growing and investing around the world. We’ve been strong in series. Now we’re getting really strong in movies.”

Hastings’ comments come at a time when the company recently delivered a mixed earnings report that showed a beat on earnings, but a disturbing trend in the slowdown of subscribers.

Earlier this year, Netflix raised prices on its HD streaming plan from $10.99 to $12.99 per month. It blamed the price increase on a slowdown in subscribers.

“Since our US price increase earlier this year, retention has not yet fully returned on a sustained basis to pre-price-change levels, which has led to slower US membership growth,” Netflix wrote in a letter to shareholders last month.

Netflix remains the top streaming service in the world, partly because it’s addicted to debt.

The company’s ballooning debt pile, coupled with a slowdown in subscribers, is a significant issue since it doesn’t expect to be cash-flow positive for several years.

The ongoing cash burn and large debt issuances have made the company’s stock unattractive to investors this year, mainly because of the rotation from growth into value stocks. Investors are searching for companies with stable cash flows amid the increasing threat a recession could arrive late next year.

Tyler Durden

Thu, 11/07/2019 – 14:35

Tags

Business Finance

via ZeroHedge News https://ift.tt/34G56r4 Tyler Durden

Growth ‘Bankruptcies’: Exposing The Grime Behind The Glitter Of Wall Street’s Bell-Ringing Darlings

Authored by Nick Schmitz via Verdad Capital

Let’s play “Would You Rather.” Would you rather invest in the latest high-growth tech IPO or in a long-established firm with a decent amount of debt whose best days are behind it? Human experience tells us that retirees have shorter life expectancies than teenagers. This intuition might lead investors to be more worried about the risk of permanent capital loss in old, indebted businesses than young, high-growth new issues.

But is this correct? Are investors more likely to lose money betting on an aging company that owes the banks money or in today’s bell-ringing darlings of Wall Street? We decided to run the numbers and see.

Our conclusion is that, by far, we believe the easiest way to lose nearly all of your money is IPOs, and the more exciting the IPO, the more the catastrophic the base rates. For those watching the recent near-death experience of WeWork as it limps along at about one fifth of the value it was about to IPO at just last month, or the slew of disappointing results from high-growth high-expectation IPOs like BlueApron, you would be right to ask how extraordinary these “shockingly” bad outcomes really are.

Of the last 3,700 US IPOs since the late 1980s for which we have data, the median IPO lost about 31% of its value from day-one close price to three years later and 41% to five years later. But what is most astounding is just how frequently investors lost a lot more than that. Below we’ve highlighted not just the percentage of time investors would have lost money, but the percentage of time investors would incurred bankruptcy-level losses of more than 75% of their capital.

Figure 1: IPO Five-year Buy-and-Hold Price Return Base Rates by Sector

*Source: Capital IQ, all IPOs since the late 1980s with transaction data available. From day-one close price to five-year hold or delisting.*

Buying and holding IPO stocks, you would have lost about half of your wealth half of the time and 75% or more of your wealth in one out of three or four IPOs. And according to the data, the most toxic of these growth-bankruptcy-prone IPOs have been the seemingly most exciting technology and communications stocks, where you would have lost about 60–70% of your wealth half of the time (like SnapChat within its first two years) and 90% or more of your wealth in almost 25% of IPOs (like BlueApron within its first two years).

And it’s not just the trendy industries that were correlated with bankruptcy-level losses. All measures of excitement and optimism were correlated with long-term loss of capital. Below we show how much the market traded up new IPOs at open on the first day of trading (from offer to close price) compared to their subsequent long-term median price return. We also compare the first-day valuation multiple of IPOs to their subsequent long-term median price return.

Figure 2: IPO Returns by Day-1 Stock Performance and Day-1 Valuation Multiple

*Source: Capital IQ, all IPOs since the late 1980s with transaction data available.*

And these aggregate results are not that dramatically skewed by the tech bubble.

Professor Jay Ritter, the country’s leading academic on IPO stats, found essentially the same failure rates when measuring all 8,000 or so IPOs dating back to the 1970s—almost half of IPOs lost more than half of their wealth over five years, as depicted in the chart below.

Unlike actual bankruptcies, most of these firms don’t blow it for investors through explicit reorganization or liquidation. According to the Kauffman Foundation’s look at about 1,500 IPOs, only about 10.5% of them “fail” explicitly, with a third of them getting acquired after five years and half of them continuing operations beyond five years.

But this 11% explicit failure rate masks the high probability of catastrophic outcomes in the base rates above. The base rates above suggest the most probable outcome for betting the boat on an IPO is extreme disappointment and investor insolvency, whereas only about 1/100 are the kind of 10x or more fat pitches that would help make up for the catastrophic losses you’re taking on the typical investment.

So let’s go back to our game of “Would You Rather.” Even knowing what we know now about catastrophic losses on IPOs, older firms with debt on their balance sheet today and low growth rates still sound pretty scary.

But what are the rates of doom? According to Standard & Poor’s, under 1% of global investment-grade corporate debt and about 4% of speculative-grade corporate debt defaults each year. The annual rate changes with economic cycles, but over time, the five-year default rates are pretty stable when sorted by credit quality.

Figure 3: Standard & Poor’s Default Rates

But most firms that default don’t immediately go through bankruptcy, and many go on to thrive. This is not unlike the fact that most people who miss a mortgage payment don’t automatically go into foreclosure. For example, according to Standard & Poor’s, in 2018 only 28% of firms that defaulted subsequently ended up in Chapter 11.

We analyzed the last 885 corporate defaults over 11 years recorded by Moody’s going back to 2007 and found that only about one third of defaults went into bankruptcy court, one third just missed an interest or principal payment without going into bankruptcy, and one third settled the dispute between lenders and borrowers outside of the court system through what are called “distressed exchanges.”

If we assume Moody’s data on corporate defaults is accurate¹, the base rates for the probability of encountering various event outcomes in levered equities would look something like the estimates in Figure 4 below:

Figure 4: Corporate Default Rates and Estimated Post-Default Event Occurrence¹

You can see that it makes a huge difference if you are invested in companies with 3–4x EBITDA of debt around the BBB-BB range or if you are at or above the 5x levels that the private equity industry borrows at today (5.8x “adjusted EBITDA” according to Pitchbook which is “highly aggressive” by ratings agency standards).

But what do these outcome probabilities mean for actual investors in the stock of the companies? While “loss-given-default” and recovery rates for debt investors are commonly tracked, loss-given-default for equity investors is seldomly tracked or calculated in the literature (see here and here for bankruptcy). But for the roughly two thirds of post-default events that don’t end in formal bankruptcy court, we can’t find much data at all. One older study comparing distressed exchanges to bankruptcy found significantly higher recovery rates and about 4x less dilution for equity owners settling their defaults out of court in distressed exchanges.

While we can assume, based on the data, that a stock investor loses 100% in a chapter-seven liquidation and ~90% in chapter-eleven reorganization, the literature suggests distressed exchanges seem more forgiving for equity holders. And the third of defaults that don’t result in any of those outcomes shouldn’t lose much more than the market over the next five years in theory. So what we would expect is about one third of defaults to result in a 95% loss (formal bankruptcy), one third to lose about 70–80% (out-of-court settlement), and one third to do about what the market does.

To check, we tested the price return of the worst possible investment methodology ever devised: we picked 100% of all companies at year start that did in fact default during the next year and held the stock of those defaulters for five years or to delisting. We compared the default results side-by-side with the results of all IPOs and tech IPOs. Like all tech IPOs ever, about a third of defaults were catastrophic, a third were ugly, and a third kind of looked like the market, plus some lottery winners. And this is comparing only the vast minority of the worst-possible levered equities to your run-of-the-mill IPOs!

Figure 5: IPO vs. Only Default 5-Year Price Return Distributions²

We estimate that, if you consider the ~90% of levered equities in a hypothetical AAA through CCC/C diversified portfolio that don’t default over a five-year horizon, you would need about an ~85% cumulative default rate in your levered equities to make the base rates for levered equities look as scary as tech IPOs. BBB- and BB-rated firms have only defaulted at 2% and 8% respectively through the credit cycles since 1981 according to Standard & Poor’s.

Based on our analysis, it’s hard to make the case that the long-term base rates for bad outcomes in levered equity investing are anywhere near as scary as the IPO base rates. IPO stock prices suffer from the harsh bigotry of high expectations. By contrast, levered value firms benefit from the soft bigotry of low expectations combined with statistically low default rates outside of junk debt.

But 2019 is the first time since the tech bubble that IPOs have been selling above 10x revenue on average with only about 15% of the stocks being profitable. This seems to be largely a consequence of the overcrowding of IPO markets with VC- and PE-backed public offerings that used to only be about 30% of IPOs but are now about 80% of offerings, as depicted in Figure 6 below.

Figure 6: % of IPOs by Backing (Left) and Tech IPO Profitability and Valuation Statistics (Right)

*Source: Recreated from* *Jay Ritter’s data.*

And you’ve got to wonder, if WeWork, SnapChat, and BlueApron are the all-stars of these VC firms and still failed spectacularly in their IPOs, what makes up the rest of these private portfolios? So we’ll give the Halloween scare trophy to today’s VC-backed tech IPOs. Paying 10x revenue for companies that haven’t produced a dollar is statistically about as scary as an 85% likelihood of default in levered equites over the long haul — which they don’t have a credit rating for.

* * *

Methodology:
1. Source: Moody’s for equivalent-ratings leverage levels. Standard & Poor’s for cumulative default rates.
For other points of reference: S&P estimated that “Distressed exchanges accounted for the largest share of defaults (among publicly rated companies) in 2018, with 38%, followed by missed interest or principal payments (32%) and Chapter 11 filings (23%).” While Moody’s estimated 44% of defaults in the 2015 high-yield crisis went through distressed exchanges, not formal bankruptcy, and only about 30% of companies that go through distressed exchanges end up back in court over the long haul.
2. Source: Capital IQ, all IPOs since the late 1980s with transaction data available. Levered equities are all Moody’s and Standard & Poor’s defaults since 2002 with associated stock and pricing data. Returns are price returns from 30 December of the year prior to default until 5 years later or the price on the last market day the stock traded before delisting. 11.6% default rate is the average of all credit ratings’ 5-year cumulative default rate from 1981 to 2018 according to Standard & Poor’s.

Tyler Durden

Thu, 11/07/2019 – 14:22

Tags

Business Finance

via ZeroHedge News https://ift.tt/2CpaZN0 Tyler Durden

Rand Paul Proposes Expanding Whistleblower Protections While Publicly Exposing Whistleblowers

Sen. Rand Paul (R–Ky.) has proposed legislation that would protect whistleblowers from retaliation but that would also likely expose their identities in criminal and presidential impeachment proceedings.

Paul caused a stir Monday at a rally for President Donald Trump by calling for the media to reveal the identity of a whistleblower who passed along information he or she believed implicated Trump in withholding aid to Ukraine unless the country opened an investigation into alleged corruption by Joe Biden’s son Hunter. The next day, Paul said that he himself might reveal the whistleblower’s name.

On Wednesday, Democrats in the Senate asked for unanimous consent to pass a resolution showing general support for whistleblowers. The resolution does not actually do anything—it’s just a public acknowledgement that the Senate, in general, supports whistleblowers and encourages the executive branch to protect them from retaliation for any wrongdoing they might reveal.

Paul, however, objected to the resolution and wants to replace it with his own bill, “The Whistleblower Protection Act of 2019.” The bill would expand whistleblower protections to government contractors, not just government employees, and would be retroactive if passed, meaning that Snowden might potentially be able to include himself in current whistleblower protections as a defense against charges of espionage.

If that’s all Paul’s bill did, that would be awesome. But there’s more. Appended at the end is this section:

Congress reaffirms that, in the case of criminal prosecutions and impeachments arising from the disclosures of whistleblowers, the accused has the right to confront his or her accuser in such proceedings and that right is not superseded by the whistleblower protections.

In a companion piece over at The Hill, Paul explains this inclusion protects Trump’s Sixth Amendment rights:

The “whistleblower’s” revelation, however, has resulted in an impeachment proceeding, essentially a trial of the president. If convicted, the impeachment trial could lead to criminal penalties after the president’s term in office.

Anonymity is not an option when your accusations trigger criminal penalties. The Sixth Amendment guarantees the right to confront one’s accusers. The witness must both face his accuser and face questions regarding his own knowledge and activities.

The Ukraine investigation has not yet “resulted in an impeachment proceeding,” and the House of Representatives has not yet voted to impeach Trump. Paul will know when that happens because he will essentially serve as a juror as a member of the Senate. What’s more, impeachment is not a criminal prosecution. The only “penalty” that will directly come from impeachment would be Trump’s removal from office.

Trump could face prosecution for his alleged actions following his departure from office. If the information from the Ukraine whistleblower were to be used as evidence in a criminal trial, Trump would be protected by the Sixth Amendment’s right to confront and defend himself against his accusers. He doesn’t need Paul’s bill to exercise that right.

It’s even reasonable to expect that Trump should be allowed to face the whistleblower if his impeachment proceeds to the Senate and the whistleblower’s testimony is used as evidence. If the whistleblower won’t come forward, Paul can use that as justification for declining to remove Trump from office.

But the way Paul is talking about revealing the whistleblower now—during the investigation itself—is akin to the police revealing the names of witnesses to a suspect long before that suspect has been charged with any crime. Imagine, for instance, what would happen if police were investigating a member of a violent street gang for shooting up somebody’s house, and the police told the alleged shooter the names of eyewitnesses they had talked to before ever charging him. The Sixth Amendment does not require the naming of witnesses in an investigation, nor should it. The Sixth Amendment, as it is written, applies to “criminal prosecution.” Leaving aside the question of whether impeachment proceedings fall under the category of a “criminal prosecution,” Trump is merely being investigated at the moment.

What’s more, Paul’s efforts to publicly identify the whistleblower, were they occurring in an actual criminal investigation rather than an impeachment investigation, would look a lot like witness intimidation.

Paul may want to protect whistleblowers from a narrow set of government sanctions, but he’ll also expose them any number of destructive consequences for speaking out against powerful and connected elected officials.

Naturally, some other lawmakers are making political hay out of this by running in the opposite direction in ways that are even more bad, stupid, and unconstitutional:

In the future, you will go to jail if you out a whistleblower. Legislation coming.

— Rep. Eric Swalwell (@RepSwalwell) November 7, 2019

Will this debate get dumber? You can count on it.

from Latest – Reason.com https://ift.tt/2PWV1lu
via IFTTT

Iranians Detain Nuclear Inspector In Bizarre Incident At Natanz Enrichment Facility

The United States has condemned an unusual incident which resulted in Iran stripping a UN nuclear watchdog inspector of accreditation while briefly detaining the official.

The US envoy to the International Atomic Agency (IAEA) called the incident an “outrageous provocation” while the EU representative said it was “deeply concerned by the incident concerning one IAEA inspector”.

It began last week, when the UN nuclear inspector was halted before entering the Natanz uranium enrichment facility. According to Iran’s national atomic agency, she was stopped “due to concerns over carrying suspicious materials”.

According to the terms of UN inspections under the 2015 JCPOA, IAEA officials possess immediate access authorization to declared nuclear sites across Iran, including daily access the sprawling nuclear enrichment facilities at Natanz and Fordow.

Iran claims the inspector set off a “security control machine” after which she allegedly tested positive for explosive nitrates, according to allegations by Iran’s representative to the IAEA, Kazem Gharibabadi.

Authorities then stripped her of accreditation and access and even briefly confiscated her travel documents, after which she was forced to leave the country Wednesday, no longer able to carry out her inspection mission.

The EU issued a statement Thursday underscoring “full confidence in the inspectorate’s professionalism and impartiality” and further called upon Iran “to ensure that IAEA inspectors can perform their duties in line with its legally binding safeguards agreement”.

*Natanz nuclear facility in central Iran, via the AP.*

US ambassador to the IAEA Jackie Wolcott issued a more scathing statement, however:

“The detention of an IAEA inspector in Iran is an outrageous provocation. All board members need to make clear now and going forward that such actions are completely unacceptable, will not be tolerated, and must have consequences,” Wolcott said.

Crucially, the almost unprecedented incident occurred just days before Tehran declared it is doubling the number of its advanced centrifuges, further rolling back prior commitments under the 2015 nuclear deal.

It should further be noted that given it’s not unheard of for western intelligence agencies to use international UN-connected institutions to conduct infiltration and spying operations, it’s likely the Iranians are ultra-cautious and suspicious against the potential for American or Israeli spies accessing the country’s most sensitive facilities.

Tyler Durden

Thu, 11/07/2019 – 14:05

Tags

Politics

via ZeroHedge News https://ift.tt/2NSNYau Tyler Durden

Rand Paul Proposes Expanding Whistleblower Protections While Publicly Exposing Whistleblowers

If that’s all Paul’s bill did, that would be awesome. But there’s more. Appended at the end is this section:

Congress reaffirms that, in the case of criminal prosecutions and impeachments arising from the disclosures of whistleblowers, the accused has the right to confront his or her accuser in such proceedings and that right is not superseded by the whistleblower protections.

In a companion piece over at The Hill, Paul explains this inclusion protects Trump’s Sixth Amendment rights:

The “whistleblower’s” revelation, however, has resulted in an impeachment proceeding, essentially a trial of the president. If convicted, the impeachment trial could lead to criminal penalties after the president’s term in office.

Anonymity is not an option when your accusations trigger criminal penalties. The Sixth Amendment guarantees the right to confront one’s accusers. The witness must both face his accuser and face questions regarding his own knowledge and activities.

Naturally, some other lawmakers are making political hay out of this by running in the opposite direction in ways that are even more bad, stupid, and unconstitutional:

In the future, you will go to jail if you out a whistleblower. Legislation coming.

— Rep. Eric Swalwell (@RepSwalwell) November 7, 2019

Will this debate get dumber? You can count on it.

from Latest – Reason.com https://ift.tt/2PWV1lu
via IFTTT

Is the “Faithless Elector” Coming to the Supreme Court?

A cert petition (available here) has been filed with the Supreme Court in the latest case involving “faithless electors,” Chiafalo et al. v. State of Washington. [Historian Michael Rosin and I have submitted an amicus brief, available here, in support of the petition.] I’m betting that the Court will grant the petition and finally give us its views on a fascinating, and very thorny, question of constitutional law: to what extent may States control the behavior of presidential electors in the performance of their electoral duties?

The Chiafelo case involves three of Washington State’s presidential electors in the 2016 election. Each had been included in a “slate” of potential electors submitted by the WA Democratic Party to the WA Secretary of State. When Hillary Clinton won the Washington popular vote, the WA Secretary of State, in accordance with WA law, appointed the members of the Democratic slate to be the State’s presidential electors.

WA law requires the electors to vote in accordance with their direction from the Party which nominated them, and backs that up with punishment if they act otherwise:

“Any elector who votes for a person or persons not nominated by the party of which he or she is an elector is subject to a civil penalty of up to one thousand dollars.” RCW 29A-56-340.

But when the State’s electors convened in Olympia in December, 2016, the three petitioners in this case, instead of voting for Hillary Clinton, cast their ballots for Colin Powell. They were subsequently fined $1000 each for having so.

The question presented is whether whether the Constitution permits a State to mandate for whom presidential electors must vote, and to enforce that mandate via ex post punishment, or, conversely, whether the right of electors to use discretion in deciding who to vote for is a federally-guaranteed one that is protected against State interference.

The Washington Supreme Court upheld the imposition of the fines (opinion available here), on the grounds that Article II Sec. 1 of the Constitution “gives to the states absolute authority in the manner of appointing electors [and that] it is thus within a state’s authority to impose a fine on electors for failing to uphold their pledge.”

My prediction that the Court will grant the petition and hear the case is based not only on the fact that this is a pretty important question of constitutional law, but on the existence of a clear split of authority on the matter. As some of you may recall, several months ago the 10th Circuit invalidated a Colorado statute similar in purpose and effect to Washington’s (see my blog posting about this case here), and regardless of one’s views on the merits, it is clearly intolerable to have different interpretations of core constitutional provisions in different parts of the country. Moreover, as we stress in our amicus brief, this question could well recur in the context of a dispute over the outcome of a presidential election, and the Court is surely better able to assess and weigh the complicated constitutional arguments on both sides without the intense time pressure (see Bush v. Gore) such a dispute would invariably involve.

One of the things that makes this such a fascinating constitutional question—at least, in my eyes—is the disparity between our long-standing practice regarding the operation of the “Electoral College” and the original constitutional scheme. While we have come to regard the electors as performing a purely formal function—a “kabuki democracy”-style ceremonial ratification the results of the presidential election—it is hard to deny that the Framers had something very different in mind. As Justice Jackson put it some time ago:

“No one faithful to our history can deny that the plan originally contemplated, what is implicit in its text, is that electors would be free agents, to exercise an independent and nonpartisan judgment as to the [individuals] best qualified for the Nation’s highest offices.” Ray v. Blair, 343 US 214, 232 (1952).

Or as Chief Justice Fuller put it in 1892:

“Doubtless it was supposed that the electors would exercise a reasonable independence and fair judgment in the selection of the chief executive, but … in relation to the independence of the electors, the original expectation may be said to have been frustrated. Macpherson v. Blacker, 146 US 1, 36 (1892).

Hamilton’s Federalist No. 68 is the primary, though hardly the only, support for this view of the “original expectation” of the Framers. Hamilton stressed the importance of having the president elected by “men most capable of analyzing the qualities adapted to the station,” noting that a “small number of persons, selected by their fellow citizens from the general mass, will be most likely to possess the information and discernment requisite to so complicated an investigation.”

As we put it in our amicus brief:

From the framing and ratification of the Constitution through the early elections, the ratification of the Twelfth Amendment, the adoption of the Twenty-Third Amendment, and Congress’s consistent acceptance and counting of anomalous electoral votes, historical evidence shows that the Framers and every Congress to consider the question understood the Constitution as empowering electors to “vote according to their best judgment and discernment.”

It was expected, in short, that these electors would actually elect a president—not merely ratify the results of an election by others. This was part of the Constitution’s remarkable, and remarkably ingenious, method of diffracting the power to appoint officers of the new federal government by distributing that power to different bodies of electors. The “People of the several States” would choose Members of the House of Representatives, Art. I Sec. 2; the members of the State legislatures would choose Senators, Art. I Sec. 3**; and a third body, composed of presidential electors who would be appointed by each State “in such Manner as the Legislature thereof may direct,” would choose the President and Vice-President. Art. II Sec. 1 and Amend. XII.

**The method of Senatorial appointment has, of course, been modified by the 17th Amendment, providing for popular election. No such modification, however, has changed the terms of the presidential election scheme.

It hasn’t functioned that way in a long time, because the States have all chosen to use their power and authority over elector appointment in a more-or-less uniform manner**: all States appoint electors named by the political party of the candidate receiving the highest number of votes in the State, winner-take-all. The political parties, in turn, can be relied upon to name individuals who will—and almost always do—cast their ballot for their party’s nominee.

**Maine and Nebraska have slight variations on this scheme, irrelevant to the issues raised in this suit.]

Nobody questions the constitutional authority of the States to appoint electors in this fashion. The question, though, is whether States can require electors, once they have been appointed, to cast their ballot in any particular way by subjecting them to punishment if they act otherwise.

Personally, I think the 10th Circuit got this one right, and the Washington Supreme Court got it wrong: the electors are performing a federal function, and the seminal case of McCullough v. Maryland stands for the proposition that the Supremacy Clause disables the States from interfering with their performance of those federal functions. The States’ (undisputed) power to appoint electors, in other words, does not give States the power to control their activity once they have been appointed and have begun to perform their federal function as electors.

Another interesting feature of this case is the way that the petitioners’ position could garner support from Justices who take different approaches to constitutional interpretation. Strict originalists may be persuaded that the Framers clearly intended for electors to retain a discretionary role at odds with Washington’s actions here; at the same time, Justices who are perhaps more comfortable with Justice Marshall’s view of the need for broader protection for the instrumentalities of federal power against State encroachment may also not want to countenance Washington’s interference with an institution—the Electoral College—so central to the function and composition of the federal government.

And if the Court were to follow the 10th Circuit’s lead (and mine!) and invalidate Washington’s actions on Supremacy Clause grounds, what then?

That’s hard to say. In the short term, there may be little effect on the presidential election process, inasmuch as the States will continue to rely on the political parties to nominate electors, and those electors will likely continue to act in accordance with party directives, not because they’re afraid of being fined were they to do otherwise but because they support their party’s nominee and were chosen by the party precisely on that basis.

But over the longer term, a decision in petitioner’s favor could have deeper and more long-lasting implications. We could, perhaps, find ourselves with something more closely resembling the Framers original scheme, where electors actually take it upon themselves to choose the person best fit for the office of president.

On the other hand, Harvard law professor Lawrence Lessig, who is representing the petitioners in this case, points to other possible outcomes. In an interview with Adam Liptak in the NY Times, Lessig said that:

“… a decision in [petitioners’] favor could help focus public attention on the shortcomings of the Electoral College in reflecting the popular will. One response, Lessig said, is the National Popular Vote plan, under which states agree to grant their electoral votes to the candidate who gets the most votes nationwide…. It could also convince both sides that it is finally time to step up and modify the Constitution to address this underlying problem. One possibility, he said, is a constitutional amendment requiring a proportional allocation of electoral votes at the state level.”

Either way, it’s a pretty consequential change in our electoral system.

And, though it is not relevant to the disposition of this case, I must say that I think we’d be a lot better off with Colin Powell as our Chief Executive than the one we actually have.

from Latest – Reason.com https://ift.tt/2Cm1TRf
via IFTTT

Schiff: The Stock Market Is Ignoring Chilly Economic, Political Winds

Via SchiffGold.com,

Stock markets made new highs on Wednesday, but as Peter Schiff explained in his latest podcast, there are a lot of cracks under the surface. The markets are surging forward even as they overlook bad economic data and chilly political winds.

While stock markets are generally trending up, only about 10% of the individual stocks are actually making new highs. And a lot of the darlings of the market are tanking. Take Uber, for instance, a company that just announced a big loss. That stock is down something in the neighborhood of 40% since its IPO. Peter also mentioned Shake Shack’s losses and the political defeat for Airbnb in New Jersey.

Not only are the regulators and the brick-and-mortar competitors cracking down, now the investors are losing their appetite for these money-losing companies, which has a significant meaning for the deflation of this bubble economy.”

There is also a lot of bad data out there that is being ignored. The Chicago PMI fell to a nearly four-year low in October, and the general trend looks even worse. If you go back over the last 8 months, we haven’t seen this kind of drop in the Chicago PMI in 30 years.

And yet you still have the president touting how great the economy is.”

In fact, Trump was bragging about the great stock market in a tweet on Wednesday morning.

This is the same Donald Trump who talked about the big, fat, ugly, bubble. Now he’s claiming credit for the stock market and asking everybody to thank him for making this big, fat, ugly bubble even bigger.”

The Q3 productivity number just came out. Analysts were expecting a 1% increase. Instead, we got a 0.3 drop. A big reason for the drop in productivity was a big increase in labor costs.

Why is it that labor costs are going up? One reason is inflation. The Fed is creating inflation and that is pushing up prices, including the price of labor. But also you have a lot of regulations, minimum wage, other things that are artificially making it more expensive to hire people.”

And just because labor costs are increasing, it doesn’t necessarily mean workers are even better off. It could be other expenses besides wages driving up labor costs.

But the bottom line is when you see falling productivity, that is a sign that the economy is weak. It is less efficient. Productivity is the holy grail of economics. That’s what leads to more output. That’s what leads to higher real incomes, not nominal incomes. That’s what makes living standards go up.”

Peter noted that the GDP trend is also down. The Atlanta Fed has dropped its Q4 growth estimate down to 1%. And year-over-year, GDP growth is just 2%.

We haven’t had that since before Trump was elected, where we have year-over-year GDP growth that low.”

And the overall trend is downward.

So, the stock market is overlooking bad economic data, bad political data. And you still have this narrow group of stocks leading the markets higher. You have all of this complacency, but there is a lot of risk in this market. There’s a lot of risk in this economy.”

[ZH: Graphically, it’s clear that equity risk expectations remain minimal as extreme risk (SKEW) fears soar, political uncertainty soars, and economic data surprises disappoint…]

Source: Bloomberg

Peter also talked about comments made by the new European Central Bank President Christine Lagarde. She claimed the ECB’s negative interest rate policy and quantitative easing have been a success because it saved and created jobs. She said Europeans should be more concerned about jobs than the value of their savings. Basically, she’s saying we shouldn’t worry about savings. It’s all about jobs.

As if you create jobs by destroying savings. Lagarde has it completely backward. Jobs come from savings. In order for somebody to create jobs, you need capital. Workers need tools. And where does capital equipment come from? It comes from savings. It comes from under-consumption. When people don’t spend money and they save it, those are the savings that fund capital investment. Entrepreneurs can then borrow the savings and make the investments necessary to employ more people. So, if you actually deliberately destroy your savings, you’re going to destroy jobs.”

This is the way central bankers think. But in the long run, this kind of policy isn’t going to create jobs. It’s going to create demand for gold.

What Lagarde is telling Europeans is you better get out of euros, because we’re going to sacrifice the value of your euros on this Keynesian altar of economic stimulus … You want to keep your good money in gold … There your money is safe. There your money is protected. If you keep them in the bank, if you keep them in euros or again if you keep them in dollars or yen or any of these currencies, because all of these central banks have bought into the same nonsense.”

Tyler Durden

Thu, 11/07/2019 – 13:51

Tags

Business Finance

via ZeroHedge News https://ift.tt/36S9o0q Tyler Durden

Is the “Faithless Elector” Coming to the Supreme Court?

WA law requires the electors to vote in accordance with their direction from the Party which nominated them, and backs that up with punishment if they act otherwise:

“Any elector who votes for a person or persons not nominated by the party of which he or she is an elector is subject to a civil penalty of up to one thousand dollars.” RCW 29A-56-340.

“No one faithful to our history can deny that the plan originally contemplated, what is implicit in its text, is that electors would be free agents, to exercise an independent and nonpartisan judgment as to the [individuals] best qualified for the Nation’s highest offices.” Ray v. Blair, 343 US 214, 232 (1952).

Or as Chief Justice Fuller put it in 1892:

“Doubtless it was supposed that the electors would exercise a reasonable independence and fair judgment in the selection of the chief executive, but … in relation to the independence of the electors, the original expectation may be said to have been frustrated. Macpherson v. Blacker, 146 US 1, 36 (1892).

As we put it in our amicus brief:

From the framing and ratification of the Constitution through the early elections, the ratification of the Twelfth Amendment, the adoption of the Twenty-Third Amendment, and Congress’s consistent acceptance and counting of anomalous electoral votes, historical evidence shows that the Framers and every Congress to consider the question understood the Constitution as empowering electors to “vote according to their best judgment and discernment.”

**The method of Senatorial appointment has, of course, been modified by the 17th Amendment, providing for popular election. No such modification, however, has changed the terms of the presidential election scheme.

**Maine and Nebraska have slight variations on this scheme, irrelevant to the issues raised in this suit.]

And if the Court were to follow the 10th Circuit’s lead (and mine!) and invalidate Washington’s actions on Supremacy Clause grounds, what then?

“… a decision in [petitioners’] favor could help focus public attention on the shortcomings of the Electoral College in reflecting the popular will. One response, Lessig said, is the National Popular Vote plan, under which states agree to grant their electoral votes to the candidate who gets the most votes nationwide…. It could also convince both sides that it is finally time to step up and modify the Constitution to address this underlying problem. One possibility, he said, is a constitutional amendment requiring a proportional allocation of electoral votes at the state level.”

Either way, it’s a pretty consequential change in our electoral system.

And, though it is not relevant to the disposition of this case, I must say that I think we’d be a lot better off with Colin Powell as our Chief Executive than the one we actually have.

from Latest – Reason.com https://ift.tt/2Cm1TRf
via IFTTT

Gun Stocks Soar After Trump Admin Passes New Rule To Ease Exports

Gun stocks are zooming higher in late session Thursday after the Trump administration passed a crucial milestone in a long-delayed rule change that would make it easier for gun companies to export firearms around the world, sources told Reuters.

American Outdoor Brands soared as much as 4% on the news.