Comparing Law Professors With Doctorates to Those Without Doctorates

Sarah Lawsky’s valuable report about this year’s entry-level law professor hires is out. And I was interested to see a trend: Both this year and last year, about half of the entry-level law professor hires have doctorate degrees.   The shift toward candidates with doctorates is not new, of course.  And it has been written about before, most memorably in Lynn LoPuck’s article Dawn of the Discipline-Based Law Faculty.

Reading over Sarah’s report, it occurred to me that someone should study a question that I don’t think has yet been answered: Is the scholarly trajectory of U.S. law professors with doctorates different from that of U.S. law professors without doctorates?  And if so, how?

Here’s my thinking.  In the current entry-level market, having a doctorate gives candidates a significant advantage.  Among the reasons for this, I think, is that law schools tend to have high tenure rates.  This makes hiring committees relatively risk-averse.  When hiring an entry-level candidate, schools want clear and objective evidence that the candidate is going to become and stay a productive scholar.  They want evidence that a candidate has scholarly discipline, an interest in ideas, and a methodology that seems likely to bear scholarly fruit.

A doctorate degree can help make that case.  Imagine you’re an appointments committee chair going through a large pile of entry-level resumes.  You see a lot of smart and accomplished junior lawyers.  But who is going to be a committed scholar?  A candidate with a doctorate will seem more likely to have the qualities you’re looking for than one without. Getting the degree shows scholarly discipline.  The subject-matter training teaches a methodology.  And the candidate’s dissertation shows the interest in ideas and (hopefully) produces the fruit.  If you’re looking for a proxy that plausibly tracks future scholarly productivity and impact, a doctorate degree can seem like a decent bet.  And I think that’s a significant part of the reason why the entry-level market favors candidates with doctorates.

The particularly interesting part of this, in my view, is that I think we now have enough professors both with and without doctorates to test whether our intuitions are correct.  The question is, has the market accurately assessed the value of doctorates?  Does having a doctorate signal what we think it signals about future productivity and impact?  And more broadly, is the scholarly trajectory of U.S. law professors with doctorates different from that of U.S. law professors without doctorates?

There would be various ways to try to measure this, of course.  Perhaps you could try to measure scholarly impact, such as by counting citations on Westlaw or on HeinOnline.  Or maybe instead you could compare scholarly output, such as by counting publications of various kinds. I don’t have any particular ideas about what approach (or combination of approaches) is the least flawed.  But it seems like something that could be a really interesting empirical study that could also shed light on a very important trend in legal academia.

 

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We’re All Gonna Die: Climate Change Apocalypse by 2050

Man-made climate change (now dubbed “climate crisis” by The Guardian’s editors) poses potentially serious risks for humanity in this century. But acknowledging the hazard is not enough for a growing claque of meteorological apocalypse porn peddlers who insist that if their prescriptions for solving the problem are not followed then civilization will momentarily come to an end.

Recent hawkers of fast approaching climate doom include David Wallace-Wells in his book The Uninhabitable Earth: Life After Warming, Cumbria University professor Jem Bendell’sDeep Adaptation” paper, and environmental activist Bill McKibben’s Falter: Has the Human Game Begun to Play Itself Out? (my review is forthcoming).

Now comes a policy paper, Existential climate-related security risk: A scenario approach, from an Australian climate action advocacy group the Breakthrough National Centre for Climate Restoration. The headline over at Vice says it all: “New Report Suggests ‘High Likelihood of Human Civilization Coming to an End’ in 2050.”

In his foreword to the 8-page sketch of purported climate calamity, retired Australian admiral Chris Barrie asserts that it lays “bare the unvarnished truth about the desperate situation humans, and our planet, are in, painting a disturbing picture of the real possibility that human life on earth may be on the way to extinction, in the most horrible way.”

To justify their alarm, the authors of the paper, David Spratt and Ian Dunlop, are basically channeling Harvard economist Martin Weitzman’s dismal theorem. In deriving his dismal theorem, Weitzman probed what it would mean if equilibrium climate sensitivity (ECS)—conventionally defined as global average surface warming following a doubling of carbon dioxide concentrations—exceeded the likely range of 1.5–4.5°C.

Weitzman outlined a low probability-high consequence scenario in which ECS could be as high as 10°C. Such a case would indeed be catastrophic considering that the temperature difference between now and the last ice age is about 5°C and it took several thousand years for that increase to occur.

So just how likely is such an extremely high ECS? In its Fifth Assessment Report, the United Nations Intergovernmental Panel on Climate Change (IPCC) noted that the “equilibrium climate sensitivity (ECS) is likely in the range 1.5°C to 4.5°C, extremely unlikely less than 1°C, and very unlikely greater than 6°C.” More reassuringly, a 2018 article in Climate Dynamics calculated a relatively low climate sensitivity range of between 1.1°C and 4.05°C (median 1.87°C).

The Breakthrough Centre paper rejects conventional cost-benefit analysis in favor of sketching out a “hothouse earth” scenario that relies on projections in a 2017 Proceedings of the National Academy of Sciences article that average global temperature will exceed 3°C by 2050. They devise their scenario with the aim of alerting policymakers to the idea that climate change could turn out to be worse than current climate model projections suggest.

In their scenario, sea level rises by about 20 inches by 2050 and by 6 to 10 feet by 2100. Fifty-five percent of the world’s population is subjected annually to more than 20 days of heat “beyond the threshold of human survivability.” Wildfire, heatwaves, drought, and inundating storms proliferate. Ecosystems collapse including the Amazon rainforest, coral reefs, and the Arctic. Global crop production falls by at least 20 percent. Unbearable heat, along with food and water shortages would force billions of people to migrate. The result of this “hothouse earth” scenario would be “a high likelihood of human civilization coming to an end.”

On the basis of their scenario, the authors assert that only thing that can protect human civilization is “a massive global mobilization of resources is needed in the coming decade to build a zero-emissions industrial system and set in train the restoration of a safe climate. This would be akin in scale to the World War II emergency mobilization.”

Before racing to embrace their scenario, let’s consider what is known about the current rate of climate change. According to relatively uncontroversial data, average global surface temperatures have increased by 0.9°C since 1880. Getting to an increase of 3°C above the pre-industrial level by 2050 would mean that temperatures would have to increase at the rate of about 0.7°C per decade from now on.

The State of the Climate in 2017 report issued last year by the American Meteorological Society cites weather balloon and satellite datasets indicating that, since 1979, the increase of global average temperature in the lower troposphere is proceeding at the rate of between 0.13°C and 0.19°C per decade. According to NASA’s Earth Observatory, the rate of temperature increase since 1975 as measured by thermometers at the surface is roughly 0.15–0.20°C per decade. Basically, the rate of global temperature increase would have to triple in order to destroy civilization in the Breakthrough Centre scenario.

The flaw with constructing scenarios is that they enable our easy propensity to imagine disaster to run rampant. Scenario building, with the goal of advising policymakers and the public on how to govern the globe in the context of environmental and economic policy, has failed its practitioners spectacularly.

Probably the best example of scenario building gone badly awry is Stanford biologist Paul Ehrlich’s 1968 The Population Bomb: Population Control or Race to Oblivion?. Ehrlich sketched out three dismal scenarios in which hundreds of millions of people died in the 1970s from pandemic disease, thermonuclear war, and massive cancer epidemics sparked by exposure to synthetic pesticides. In his most hopeful scenario, the “major die-back” of hundreds of millions of people starving to death in India, China, Latin America, and Africa would end by 1985. Thereafter, the world population would be being managed downward by the remaining enlightened countries to just 2 billion by 2025 and 1.5 billion by 2100. “Our only choices are a lower birth rate or a bigger death rate,” Ehrlich declared.

Much like the Breakthrough Centre policy researchers, Ehrlich proposed sweeping plans to solve what he viewed as a desperate global problem. At home, he recommended that “a federal Department of Population and Environment (DPE) should be set up with the power to take whatever steps are necessary to establish a reasonable population size in the United States and to put an end to the steady deterioration of our environment.” Although Ehrlich acknowledged that it would be politically impossible at the time when he wrote, he noted that “many of my colleagues feel that some sort of compulsory birth regulation would be necessary to achieve such control. One plan often mentioned involves the addition of temporary sterilants to water supplies or staple food. Doses of the antidote would be carefully rationed by the government to produce the desired population size.”

Outside our borders, the United States and other developed countries would have to practice “triage.” Food exports and aid must be denied to hopelessly overpopulated countries such as India since that would only delay and worsen the famines that must eventually pare back their excess citizenry.

Fifty years after Ehrlich outlined his gloomy scenarios, world population is at 7.7 billion and global average life expectancy has increased from 57 years to over 72 years now. Ehrlich totally missed the scenario that actually unfolded which lowers fertility and limits population growth—the prosperity that results from the spread of economic freedom and the rule of law turns out to function as a kind of invisible hand of population control.

Nevertheless, despite the wrongheadedness of trying to use worst-case scenarios to guide policy, I have also noted that the projections of the climate and econometric models could be way underestimated.

The future trajectory of man-made climate change is not certain. Consequently, hedge fund manager Bob Litterman sensibly argues that climate change is an undiversifiable risk that would command a higher risk premium. Litterman likens climate change risk to the systemic risk that investors face in the stock market. It is hard to hedge when unknown unknowns can cause the prices of all assets to decline at once. Litterman’s analysis suggests that some policies—perhaps a revenue-neutral carbon tax—could help mitigate climate risk.

More fantasy than fact, the Breakthrough Centre scenario fails to persuade that an impending climate apocalypse threatens human extinction. Worst-case scenarios mislead far more than they enlighten. Given what is known about the rate of global temperature increase, my best judgment is that it is not yet time to panic about the imminent end of civilization.

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American as a Social Movement

When I was thirteen years old I won an essay contest, “What the United Nations Means to Me,” with Eleanor Roosevelt serving as a judge. She noted the similarity in our names. I was Eleanor Roeloffs, and getting singled out in that way by a former First Lady lauded for her human rights work made a big impression on me. I didn’t know much about politics then, but I knew enough to understand that she was a driving force behind what the United Nations stood for and that I wanted to be on her side.

I learned to define my politics and values by identifying heroes to look up to and follow. I think a country does the same thing. The people we choose to elevate and remember over time signify the American narrative. In my own life, the social justice movements that shaped me individually and America as a country, which despite our problems remains the envy of the world, are the civil rights movement, the fight for women’s liberation, and the mobilization against the Vietnam War.

These social movements are America’s story, and they’re my story as a woman born in the middle of the last century whose life was made measurably better amid these broad strokes of history.

Young people coming of age today are shaped by Black Lives Matter, the Me Too and Time’s Up movements, and the advocacy for LGBTQ rights, which led to the Supreme Court legalizing same-sex marriage in a landmark ruling on 26 June 2015. The progress in this area has been remarkably swift in sweeping away political opposition once thought intractable.

For those who despair about our current state of extreme partisanship, I would urge them to turn away from partisan politics and celebrate the progress of the disability rights movement as an analogue of the gay rights and civil rights movements in freeing people to be fully productive citizens. I am also watching with enormous pride the emergence of the next generation of activists, born out of horror at mass shootings and determined to assert their right to be safe from military-style weapons.

Set in motion by Parkland, Florida, high school students who survived a school shooting that killed seventeen of their classmates, people of all ages rallied on 24 March 2018 in Washington and cities all over the country, and indeed the world, in solidarity against a permissive gun culture that sanctions military-grade weaponry in the hands of civilians claiming the protection of the Second Amendment.

Social movements take a long time. They don’t make change overnight. If you ask people who waited sometimes for decades to marry the person they love whether the Supreme Court ruling in 2015 legalizing same-sex marriage happened quickly, they would likely say no, it was a long time coming. They’re right, of course, but when we consider how fast things moved once the groundwork was laid, and the courts got involved, and constitutional protections were put in place, it’s possible the same shift in thinking could happen around gun safety and commonsense gun laws.

I always thought that if I weren’t a reporter covering Hillary Clinton that we would be friends. I admired her intelligence and her fortitude in the face of personal challenges and stinging political defeats, and I hope she finds some comfort in the fact that she has inspired more people, especially women, to get involved in politics because she lost a race she was supposed to win than if she had actually won. They say history is written by the winners, and the record hundreds of thousands of people who participated in the Women’s March the day after President Trump’s inauguration are winners too, and they will be writing the next chapters in the American narrative.

The women’s movement popularized the phrase that the personal is political, and thanks to the internet and social media, more people have the tools to tell their stories and guide the history yet to be lived.

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WTI Extends Losses After Large Inventory Builds Across The Board

Oil prices tumbled overnight on signs that U.S. crude inventories jumped last week (API reported a big build), worrying investors that supplies are swelling at the same time a trade war is threatening demand.

“Selling pressures are returning to the fore,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd. in London. “Swelling U.S. oil inventories represent a major headache for those of a bullish disposition.”

API

  • Crude +3.55mm (-1.8mm exp)

  • Cushing +1.408mm (-800k exp)

  • Gasoline +2.696mm (+500k exp)

  • Distillates +6.314mm (+600k exp)

DOE

  • Crude +6.771mm (-2.0mm exp)

  • Cushing +1.791mm (-800k exp)

  • Gasoline +3.205mm (+500k exp)

  • Distillates +4.572mm (+600k exp) – biggest build since Jan

The API data also showed a combined 9 million barrel increase in distillates and gasoline stockpiles and crude shocked, but last week’s vast difference between EIA and API data should not be ignored. After last week’s de minimus draws in crude (and at Cushing), expectations were for a crude draw but EIA reported a shocking surge in inventories across the board…

US Crude inventories are at their highest since Aug 2017 (well above the 5-year average).

Additionally, Bloomberg notes that effects from the Midwest and Great Plains flooding are likely to hit Cushing after a key outbound pipeline was forced to shut, while a number of refiners cut runs (refineries have been running below normal for this time of year and at the lowest since 2016).

US crude production pushed to new record highs despite the ongoing (slow) decline in rig counts…

Some crazy high-frequency moves in oil prices this morning, well down from last night’s surprise build reported by API, traded below $53 ahead of the EIA data (although algos were pushing it h9igher before the print, which sent prices tumbling)…

A 22 million barrel total build in stocks! Not pretty!

via ZeroHedge News http://bit.ly/2WrwnO8 Tyler Durden

Comparing Law Professors With Doctorates to Those Without Doctorates

Sarah Lawsky’s valuable report about this year’s entry-level law professor hires is out. And I was interested to see a trend: Both this year and last year, about half of the entry-level law professor hires have doctorate degrees.   The shift toward candidates with doctorates is not new, of course.  And it has been written about before, most memorably in Lynn LoPuck’s article Dawn of the Discipline-Based Law Faculty.

Reading over Sarah’s report, it occurred to me that someone should study a question that I don’t think has yet been answered: Is the scholarly trajectory of U.S. law professors with doctorates different from that of U.S. law professors without doctorates?  And if so, how?

Here’s my thinking.  In the current entry-level market, having a doctorate gives candidates a significant advantage.  Among the reasons for this, I think, is that law schools tend to have high tenure rates.  This makes hiring committees relatively risk-averse.  When hiring an entry-level candidate, schools want clear and objective evidence that the candidate is going to become and stay a productive scholar.  They want evidence that a candidate has scholarly discipline, an interest in ideas, and a methodology that seems likely to bear scholarly fruit.

A doctorate degree can help make that case.  Imagine you’re an appointments committee chair going through a large pile of entry-level resumes.  You see a lot of smart and accomplished junior lawyers.  But who is going to be a committed scholar?  A candidate with a doctorate will seem more likely to have the qualities you’re looking for than one without. Getting the degree shows scholarly discipline.  The subject-matter training teaches a methodology.  And the candidate’s dissertation shows the interest in ideas and (hopefully) produces the fruit.  If you’re looking for a proxy that plausibly tracks future scholarly productivity and impact, a doctorate degree can seem like a decent bet.  And I think that’s a significant part of the reason why the entry-level market favors candidates with doctorates.

The particularly interesting part of this, in my view, is that I think we now have enough professors both with and without doctorates to test whether our intuitions are correct.  The question is, has the market accurately assessed the value of doctorates?  Does having a doctorate signal what we think it signals about future productivity and impact?  And more broadly, is the scholarly trajectory of U.S. law professors with doctorates different from that of U.S. law professors without doctorates?

There would be various ways to try to measure this, of course.  Perhaps you could try to measure scholarly impact, such as by counting citations on Westlaw or on HeinOnline.  Or maybe instead you could compare scholarly output, such as by counting publications of various kinds. I don’t have any particular ideas about what approach (or combination of approaches) is the least flawed.  But it seems like something that could be a really interesting empirical study that could also shed light on a very important trend in legal academia.

 

from Latest – Reason.com http://bit.ly/2HY8ZiC
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We’re All Gonna Die: Climate Change Apocalypse by 2050

Man-made climate change (now dubbed “climate crisis” by The Guardian’s editors) poses potentially serious risks for humanity in this century. But acknowledging the hazard is not enough for a growing claque of meteorological apocalypse porn peddlers who insist that if their prescriptions for solving the problem are not followed then civilization will momentarily come to an end.

Recent hawkers of fast approaching climate doom include David Wallace-Wells in his book The Uninhabitable Earth: Life After Warming, Cumbria University professor Jem Bendell’sDeep Adaptation” paper, and environmental activist Bill McKibben’s Falter: Has the Human Game Begun to Play Itself Out? (my review is forthcoming).

Now comes a policy paper, Existential climate-related security risk: A scenario approach, from an Australian climate action advocacy group the Breakthrough National Centre for Climate Restoration. The headline over at Vice says it all: “New Report Suggests ‘High Likelihood of Human Civilization Coming to an End’ in 2050.”

In his foreword to the 8-page sketch of purported climate calamity, retired Australian admiral Chris Barrie asserts that it lays “bare the unvarnished truth about the desperate situation humans, and our planet, are in, painting a disturbing picture of the real possibility that human life on earth may be on the way to extinction, in the most horrible way.”

To justify their alarm, the authors of the paper, David Spratt and Ian Dunlop, are basically channeling Harvard economist Martin Weitzman’s dismal theorem. In deriving his dismal theorem, Weitzman probed what it would mean if equilibrium climate sensitivity (ECS)—conventionally defined as global average surface warming following a doubling of carbon dioxide concentrations—exceeded the likely range of 1.5–4.5°C.

Weitzman outlined a low probability-high consequence scenario in which ECS could be as high as 10°C. Such a case would indeed be catastrophic considering that the temperature difference between now and the last ice age is about 5°C and it took several thousand years for that increase to occur.

So just how likely is such an extremely high ECS? In its Fifth Assessment Report, the United Nations Intergovernmental Panel on Climate Change (IPCC) noted that the “equilibrium climate sensitivity (ECS) is likely in the range 1.5°C to 4.5°C, extremely unlikely less than 1°C, and very unlikely greater than 6°C.” More reassuringly, a 2018 article in Climate Dynamics calculated a relatively low climate sensitivity range of between 1.1°C and 4.05°C (median 1.87°C).

The Breakthrough Centre paper rejects conventional cost-benefit analysis in favor of sketching out a “hothouse earth” scenario that relies on projections in a 2017 Proceedings of the National Academy of Sciences article that average global temperature will exceed 3°C by 2050. They devise their scenario with the aim of alerting policymakers to the idea that climate change could turn out to be worse than current climate model projections suggest.

In their scenario, sea level rises by about 20 inches by 2050 and by 6 to 10 feet by 2100. Fifty-five percent of the world’s population is subjected annually to more than 20 days of heat “beyond the threshold of human survivability.” Wildfire, heatwaves, drought, and inundating storms proliferate. Ecosystems collapse including the Amazon rainforest, coral reefs, and the Arctic. Global crop production falls by at least 20 percent. Unbearable heat, along with food and water shortages would force billions of people to migrate. The result of this “hothouse earth” scenario would be “a high likelihood of human civilization coming to an end.”

On the basis of their scenario, the authors assert that only thing that can protect human civilization is “a massive global mobilization of resources is needed in the coming decade to build a zero-emissions industrial system and set in train the restoration of a safe climate. This would be akin in scale to the World War II emergency mobilization.”

Before racing to embrace their scenario, let’s consider what is known about the current rate of climate change. According to relatively uncontroversial data, average global surface temperatures have increased by 0.9°C since 1880. Getting to an increase of 3°C above the pre-industrial level by 2050 would mean that temperatures would have to increase at the rate of about 0.7°C per decade from now on.

The State of the Climate in 2017 report issued last year by the American Meteorological Society cites weather balloon and satellite datasets indicating that, since 1979, the increase of global average temperature in the lower troposphere is proceeding at the rate of between 0.13°C and 0.19°C per decade. According to NASA’s Earth Observatory, the rate of temperature increase since 1975 as measured by thermometers at the surface is roughly 0.15–0.20°C per decade. Basically, the rate of global temperature increase would have to triple in order to destroy civilization in the Breakthrough Centre scenario.

The flaw with constructing scenarios is that they enable our easy propensity to imagine disaster to run rampant. Scenario building, with the goal of advising policymakers and the public on how to govern the globe in the context of environmental and economic policy, has failed its practitioners spectacularly.

Probably the best example of scenario building gone badly awry is Stanford biologist Paul Ehrlich’s 1968 The Population Bomb: Population Control or Race to Oblivion?. Ehrlich sketched out three dismal scenarios in which hundreds of millions of people died in the 1970s from pandemic disease, thermonuclear war, and massive cancer epidemics sparked by exposure to synthetic pesticides. In his most hopeful scenario, the “major die-back” of hundreds of millions of people starving to death in India, China, Latin America, and Africa would end by 1985. Thereafter, the world population would be being managed downward by the remaining enlightened countries to just 2 billion by 2025 and 1.5 billion by 2100. “Our only choices are a lower birth rate or a bigger death rate,” Ehrlich declared.

Much like the Breakthrough Centre policy researchers, Ehrlich proposed sweeping plans to solve what he viewed as a desperate global problem. At home, he recommended that “a federal Department of Population and Environment (DPE) should be set up with the power to take whatever steps are necessary to establish a reasonable population size in the United States and to put an end to the steady deterioration of our environment.” Although Ehrlich acknowledged that it would be politically impossible at the time when he wrote, he noted that “many of my colleagues feel that some sort of compulsory birth regulation would be necessary to achieve such control. One plan often mentioned involves the addition of temporary sterilants to water supplies or staple food. Doses of the antidote would be carefully rationed by the government to produce the desired population size.”

Outside our borders, the United States and other developed countries would have to practice “triage.” Food exports and aid must be denied to hopelessly overpopulated countries such as India since that would only delay and worsen the famines that must eventually pare back their excess citizenry.

Fifty years after Ehrlich outlined his gloomy scenarios, world population is at 7.7 billion and global average life expectancy has increased from 57 years to over 72 years now. Ehrlich totally missed the scenario that actually unfolded which lowers fertility and limits population growth—the prosperity that results from the spread of economic freedom and the rule of law turns out to function as a kind of invisible hand of population control.

Nevertheless, despite the wrongheadedness of trying to use worst-case scenarios to guide policy, I have also noted that the projections of the climate and econometric models could be way underestimated.

The future trajectory of man-made climate change is not certain. Consequently, hedge fund manager Bob Litterman sensibly argues that climate change is an undiversifiable risk that would command a higher risk premium. Litterman likens climate change risk to the systemic risk that investors face in the stock market. It is hard to hedge when unknown unknowns can cause the prices of all assets to decline at once. Litterman’s analysis suggests that some policies—perhaps a revenue-neutral carbon tax—could help mitigate climate risk.

More fantasy than fact, the Breakthrough Centre scenario fails to persuade that an impending climate apocalypse threatens human extinction. Worst-case scenarios mislead far more than they enlighten. Given what is known about the rate of global temperature increase, my best judgment is that it is not yet time to panic about the imminent end of civilization.

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CTAs Hammered: Flip From “-100% Short” To “+97% Long”

When we commented yesterday on the latest positioning among the systematic community, we paraphrased Nomura’s Charlie McElligott, who wrote that his CTA model had seen systematics “flip fully short the NASDAQ while CTAs on S&P were in no man’s land: 30 points below re-leveraging levels (2,791 to get to 82% net long), and 25 handles above the 2,735 de-leveraging level to -100% Short.”

Well, what a difference a day makes: with CTAs all beared up after the US was reportedly set for an anti-trust crackdown against Amazon, Facebook, Apple and Google, Tuesday’s violent short-covering reversal, has left all the algos, which as we said yesterday were in no man’s land, scrambling, and as McElligott updates today, CTAs have completely reversed their bearish dip, and are now “+97% Long” after being “-100% Short” yesterday.

More details from McElligott who notes today that the Nomura QIS CTA model “showed SIGNFICANT $ buying/covering yesterday across key SPX- (re-leveraging the “Long”) and NDX- (quickly covering the prior day’s “Short”) Futures positions with both now posting a “+97% Long” signal”:

  • SPX model estimates nearly $21B Futures to BUY after clearing the 2791 trigger—the signal is now all the way back to “+97% Long” as the 3m window “flips” Long again
  • Perhaps just as important was that the prior day’s Nasdaq Futures “-100% Short” was immediately “stopped-out” after clearing 7133 yesterday and also trigger a “flip” in the 3m window, with an estimated ~$20B of Futures buying—the Nasdaq model signal now too stands at “+97% Long”

So what are the latest CTA trigger levels according to Nomura? Here is the full breakdown:

  • NASDAQ 100, currently 97.0% long, [7179.25], more buying over 7761.01 (+8.10%) to get to 99% , max long over 7761.73 (+8.11%), selling under 7167.04 (-0.17%) to get to 82% , more selling under 7152.29 (-0.38%) to get to -100% , flip to short under 7153.01 (-0.37%), max short under 7152.29 (-0.38%)
  • S&P 500, currently 97.0% long, [2804.9], more buying over 2926.26 (+4.33%) to get to 99% , max long over 2926.54 (+4.34%), selling under 2790.93 (-0.50%) to get to 82% , more selling under 2755.08 (-1.78%) to get to -16% , flip to short under 2755.08 (-1.78%), max short under 2754.8 (-1.79%)

What is most interesting is, just like yesterday, how narrow – less than 40 points – the range between the Max Short (2,754) and 97% Long (2,791) on the S&P is. This explains why the market will likely whipsaw violently any time it drops inside this corridor. 

The full CTA trigger breakdown below:

via ZeroHedge News http://bit.ly/2IjGhaU Tyler Durden

Colorado’s Jared Polis Is the Latest Governor to Embrace Licensing Reform

The idea that the managers of Colorado’s more than 8,000 homeowners associations (HOA) will no longer be regulated by the state is sending some state lawmakers into a tizzy.

“We have no consumer protections at all for HOAs, no licensing, no complaint process, no background checks—none of what was in place requiring transparency and requiring them to look out for the consumer,” Rep. Monica Duran (D–Denver) told The Colorado Sun.

Duran is unhappy with Gov. Jared Polis, the libertarian-leaning Democrat who earlier this week vetoed legislation that would have continued requiring a state-issued license for homeowners association managers. But if Duran had looked more closely at the numbers, she would have seen that Polis was right to question why that particular license was necessary in the first place. In 2017, for example, state regulators only denied one license and revoked one other, while also issuing seven fines, totaling a mere $5,750. In other words, there were no real dangers that consumers needed to be protected against.

In a letter attached to his veto of the HOA manager licensing bill, Polis wrote that “high HOA costs and a lack of transparency” can make home ownership more difficult and less affordable. He also signaled his support for further reforming Colorado’s occupational licensing laws, arguing for “removing existing or outdated or counterproductive licenses.” At the same time, Polis also vetoed new occupational licensing requirements for sports agents and genetic counselors.

Occupational licensing laws have expanded greatly since the 1950s, when only roughly 5 percent of American workers needed a license to do their jobs. Today, between 25 and 29 percent of the workforce needs an occupational license. Such requirements have numerous negative consequences.

By requiring hundreds of dollars in fees and years of training, these regulations create barriers to entry for workers looking for new opportunities. Furthermore, there’s little evidence that such licenses improve safety or service quality for consumers or workers. And by forcing people to comply with these unnecessary regulations instead of providing services on the market, such laws reduce the U.S. gross domestic product by $203 billion annually.

Colorado is no exception. The Institute for Justice, a public interest law firm, published an analysis from University of Minnesota economist Morris Kleiner that found that occupational licensing laws cost the state of Colorado over 57,000 jobs and over $5.6 billion dollars in economic growth. Occupational licensing reform would unlock a lot of economic benefits for the state.  

As another Institute for Justice-backed study pointed out, Colorado makes aspiring barbers and cosmetologists complete 1,500 and 1,800 hours of education, respectively. The state also imposes licensing fees on those professions of over $100. By contrast, Colorado grants a license for an emergency medical technician after just 150 hours of education, two exams, and a $98 fee. There’s a lot of evidence that cosmetologist and barber licenses have few benefits, so they would be a good place for Polis to look if he wants to bring additional reforms to the state.

Colorado is not the only state currently pushing occupational licensing reform: Minnesota, Idaho, Oklahoma, and Pennsylvania are just a few of the other states rolling back these sorts of excessive and burdensome regulations. What is more, half of those states, including Colorado, have Democratic governors. This demonstrates that occupational licensing reform isn’t a partisan issue.

 

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Colorado’s Jared Polis Is the Latest Governor to Embrace Licensing Reform

The idea that the managers of Colorado’s more than 8,000 homeowners associations (HOA) will no longer be regulated by the state is sending some state lawmakers into a tizzy.

“We have no consumer protections at all for HOAs, no licensing, no complaint process, no background checks—none of what was in place requiring transparency and requiring them to look out for the consumer,” Rep. Monica Duran (D–Denver) told The Colorado Sun.

Duran is unhappy with Gov. Jared Polis, the libertarian-leaning Democrat who earlier this week vetoed legislation that would have continued requiring a state-issued license for homeowners association managers. But if Duran had looked more closely at the numbers, she would have seen that Polis was right to question why that particular license was necessary in the first place. In 2017, for example, state regulators only denied one license and revoked one other, while also issuing seven fines, totaling a mere $5,750. In other words, there were no real dangers that consumers needed to be protected against.

In a letter attached to his veto of the HOA manager licensing bill, Polis wrote that “high HOA costs and a lack of transparency” can make home ownership more difficult and less affordable. He also signaled his support for further reforming Colorado’s occupational licensing laws, arguing for “removing existing or outdated or counterproductive licenses.” At the same time, Polis also vetoed new occupational licensing requirements for sports agents and genetic counselors.

Occupational licensing laws have expanded greatly since the 1950s, when only roughly 5 percent of American workers needed a license to do their jobs. Today, between 25 and 29 percent of the workforce needs an occupational license. Such requirements have numerous negative consequences.

By requiring hundreds of dollars in fees and years of training, these regulations create barriers to entry for workers looking for new opportunities. Furthermore, there’s little evidence that such licenses improve safety or service quality for consumers or workers. And by forcing people to comply with these unnecessary regulations instead of providing services on the market, such laws reduce the U.S. gross domestic product by $203 billion annually.

Colorado is no exception. The Institute for Justice, a public interest law firm, published an analysis from University of Minnesota economist Morris Kleiner that found that occupational licensing laws cost the state of Colorado over 57,000 jobs and over $5.6 billion dollars in economic growth. Occupational licensing reform would unlock a lot of economic benefits for the state.  

As another Institute for Justice-backed study pointed out, Colorado makes aspiring barbers and cosmetologists complete 1,500 and 1,800 hours of education, respectively. The state also imposes licensing fees on those professions of over $100. By contrast, Colorado grants a license for an emergency medical technician after just 150 hours of education, two exams, and a $98 fee. There’s a lot of evidence that cosmetologist and barber licenses have few benefits, so they would be a good place for Polis to look if he wants to bring additional reforms to the state.

Colorado is not the only state currently pushing occupational licensing reform: Minnesota, Idaho, Oklahoma, and Pennsylvania are just a few of the other states rolling back these sorts of excessive and burdensome regulations. What is more, half of those states, including Colorado, have Democratic governors. This demonstrates that occupational licensing reform isn’t a partisan issue.

 

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US Services Growth Weakest Since Feb 2016, Flashes “Worrying Signs For Economy”

Following the collapse in both PMI and ISM surveys for US Manufacturing, Services surveys for May were expected to slide (tracking the rest of the world’s give-up of the Services sector outperformance overnight) but as is so typical, the surveys are entirely opposite of one another!!

  • US Services PMI survey dropped to 50.9 – the weakest since February 2016

  • US Services ISM survey jumped to 56.9 – highest since February 2019

Spot The Odd One Out!!

Even more ridiculous is that PMI reports that business expectations are at their lowest level since June 2016, but ISM’s Service employment index rose to 58.1 vs 53.7 – the largest monthly increase in employment index in two years.

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

The final PMI data for May add to worrying signs about the health of the US economy. With the exception of February 2016, business reported the weakest expansion for five and a half years as a tradeled slowdown continued to widen from manufacturing to services.

Inflows of new business showed the second-smallest rise seen this side of the global financial crisis as the steepest fall in demand for manufactured goods since 2009 was accompanied by a further marked slowdown in orders for services.

Employment growth has come off the boil in line with weaker than expected sales and gloomier prospects for the year ahead, albeit still showing some resilience. The survey data are running at a level broadly consistent with around 150,000 jobs being added in May.

The slowdown has also seen inflationary pressures fade rapidly. Despite upward pressure on prices from tariffs, the rate of increase of average prices charged for goods and services barely rose in May, in marked contrast to the strong rises seen earlier in the year, as increasing numbers of companies competed on price amid weak demand.

“As with manufacturing, the biggest change in recent months has been a sharp deterioration in growth of orders and output at larger companies, linked in part to worsening export trends, trade war worries and rising geopolitical uncertainty.”

Finally, Williamson notes that “The survey data indicate a deterioration of annualised GDP growth to just 1.2% in May, down from 1.9% in April, putting the second quarter on course for a 1.5% rise.”

Will this bad news be good news for markets?

via ZeroHedge News http://bit.ly/2KsyrOJ Tyler Durden