Most 2020 presidential candidates support government-mandated paid family leave. On the surface, that sounds like a good policy. Supporters are quick to point out that only the U.S. and Papua New Guinea don’t require businesses to provide time off with compensation for new parents.
Patrice Lee Onwuka, a senior policy analyst at Independent Women’s Forum, says this argument is “disingenuous.”
As she told John Stossel, most full-time American workers already receive paid leave.
“About 17 percent of workers have paid parental leave…but you jump to 60, 70, 80 percent when you consider people have sick time off, overtime, or all-encompassing personal time.”
These benefits are voluntarily provided even to lower-level employees.
“Why would CVS and Walmart provide this voluntarily?” Stossel asks.
“For an employer to attract…good talent or retain their talent, they need to offer benefits that really resonate with workers,”Onwuka explains. “Paid maternity and paternity leave is one of those benefits.”
“Politicians are so arrogant, Stossel said, “that they now tell people that mandating leave for all employees will be ‘good for business.’ Somehow they don’t know that business knows better what’s good for business.”
In truth, mandated leave turns out to be not only bad for business but bad for most women.
“If we look at how the rest of the world has provided very generous, mandated paid leave plans,” Onwuka says, “we see that it actually has a negative impact on women.”
Why would that be? Because mandatory leave makes companies fearful of hiring young women. “If an employer has a young woman in front of him of childbearing age,” says Onwuka, “he’s thinking, ‘OK, I have to provide paid time off. I have a potential other employee who’s a male.”
Comparing Europe to America, Onwuka explains, “American women are twice as likely to be in senior level positions, managerial positions, then women in Europe….It’s very much tied to these mandates around paid leave and paid time off.”
The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.
from Latest – Reason.com http://bit.ly/2WK360r
via IFTTT
Following its surprising bounce in factory orders in March, April was expected to see contraction (echoing the collapse in PMIs) and it did (dropping 0.8% MoM) and durable goods orders tumbling 2.1% MoM in their final April print.
Factory Orders were revised lower for March (from +1.9% to +1.3%) which prompted April’s 0.8% decline to look slightly better than the expected 1.0% decline.
Ex-Transports, factory orders rose just 0.3% MoM in April and new orders ex-defense for April fall 0.9% after rising 0.5% in March.
However, away from the noise and oscillation of the monthly data, year-over-year, US Factory Orders grew at just 1.0% – the slowest rate of growth since Trump was elected.
And judging by PMIs, this is about to get a lot worse.
via ZeroHedge News http://bit.ly/2ERM72d Tyler Durden
Most 2020 presidential candidates support government-mandated paid family leave. On the surface, that sounds like a good policy. Supporters are quick to point out that only the U.S. and Papua New Guinea don’t require businesses to provide time off with compensation for new parents.
Patrice Lee Onwuka, a senior policy analyst at Independent Women’s Forum, says this argument is “disingenuous.”
As she told John Stossel, most full-time American workers already receive paid leave.
“About 17 percent of workers have paid parental leave…but you jump to 60, 70, 80 percent when you consider people have sick time off, overtime, or all-encompassing personal time.”
These benefits are voluntarily provided even to lower-level employees.
“Why would CVS and Walmart provide this voluntarily?” Stossel asks.
“For an employer to attract…good talent or retain their talent, they need to offer benefits that really resonate with workers,”Onwuka explains. “Paid maternity and paternity leave is one of those benefits.”
“Politicians are so arrogant, Stossel said, “that they now tell people that mandating leave for all employees will be ‘good for business.’ Somehow they don’t know that business knows better what’s good for business.”
In truth, mandated leave turns out to be not only bad for business but bad for most women.
“If we look at how the rest of the world has provided very generous, mandated paid leave plans,” Onwuka says, “we see that it actually has a negative impact on women.”
Why would that be? Because mandatory leave makes companies fearful of hiring young women. “If an employer has a young woman in front of him of childbearing age,” says Onwuka, “he’s thinking, ‘OK, I have to provide paid time off. I have a potential other employee who’s a male.”
Comparing Europe to America, Onwuka explains, “American women are twice as likely to be in senior level positions, managerial positions, then women in Europe….It’s very much tied to these mandates around paid leave and paid time off.”
The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.
from Latest – Reason.com http://bit.ly/2WK360r
via IFTTT
Reality has begun to dawn across Wall Street’s Economists. This year isn’t going to go the way everyone thought. Even as late as last November and December, the optimism was still sharp about how what was taking place at that moment would be nothing more than a transitory soft patch. They still listened to Jay Powell.
Given a Fed that continues to tighten against the backdrop of increasing Treasury supply, J.P. Morgan forecasts 10-year yields will rise to 2.95% by the second quarter of 2019 and to 3.2% by the end of the year.
Incredibly, these projections were put together on December 20, 2018. Powell had just recently reiterated his strong economy view, the one requiring more rate hikes, the Fed pause still only whispers at that point. Curve collapse was a triviality, apparently, in the face of central bank backbone.
The same bank’s same strategists have now thrown in the towel. Not all the way, at least not yet. They are now calling for much lower rates on the “strength” of at least a couple rate cuts.
According to Bloomberg, the bank is now predicting the 10-year will be just 1.75% by the end of 2018 and 1.65% by next March. Pretty stark contrast compared to what JPM’s CEO was saying at this same time last year.
Even so, as the article notes, this isn’t something they think should be feared. Oh no, there’s a lot to be optimistic about, a lot still left in the tank because the Fed will be on the move!
Despite their new forecasts, JPMorgan’s strategists warned against jumping on the current Treasuries rally, saying that they maintain a neutral call for duration. “We are hesitant to initiate longs given the pace of the rally over the last two weeks and the substantial uncertainty that remains around the path forward for trade policy.”
For their part, JPMorgan equity strategists led by Mislav Matejka still see the potential for gains in global stocks before the next American recession, bolstered by policy support and, in the U.S., buybacks.
If you think trade wars and rate hikes are what led us to this point, then the prospects for a trade deal and rate cuts lend themselves an upside out. If enough can go right, still the soft patch. After all, according to this view, the economy would otherwise be booming.
This remains the background case for most Economists. One appearing on BloombergTV was far more direct in revealing himself this way:
“It’s just a mindless bond market rally — once it gets going, it gets going,” the chief financial economist at MUFG Union Bank said in a recent interview with Bloomberg TV. “I don’t know who’s trading these markets. It doesn’t feel like its [sic] trading completely logically here.”
This is the distilled wisdom of the mainstream view, this serious malpractice on the part of the media. All throughout the past few years, it has been reported as fact that the US economy was booming; and even more so why it was. QE had worked, therefore the monetary and financial system cannot be at anyone’s issue.
This view was reported as fact despite the fact that it was the contrary, minority position. This wasn’t how it was ever presented, of course, how it was only ever Economists and central bankers who held to it. The long end of the bond curve, indicating the thinking for the vast majority who matter, never once felt the economy was anywhere near the conditions necessary for taking off.
The various financial curves are treated as out-of-the-way niches, some mysterious triviality about which only a few cranks bother to keep track. Jay Powell is described as a towering figure, the man upon whose opinion everything else flows. It is entirely the other way around.
The bond market is what runs the world. Always has. Therefore, even in 2017 this idea the global economy was about to take off was never more than wishful thinking. If the bond market was against it, that skepticism was always the base case in reality. The bond market in addition to being much larger than stocks could ever hope of being, it is made up of agents whose actual practice (and survival) brings them in close contact to the real money of the real economy.
Economists never had any real market support for their view. Not at any point.
And this is why people have such a hard time understanding the way the world goes. When you are taught the backward, mainstream version, the bond market doesn’t make any sense. “It doesn’t feel like it’s trading completely logically here.” Except, the curves have been making the most sense, and have been most consistent in data therefore forecasting than any other place.
Curves are important notices for every economic situation, but you only hear about them when they are inverted. This isn’t some brand new disagreement. MUFG Union Bank’s Economist is of a blue line believer.
The bond market appreciates only too well what the dotted line has meant all along. Nothing has changed since August 2007. There was only ever a much higher likelihood something would go wrong before it could ever go right. In a nutshell, that’s just what May 29 represented – the very thing that went wrong and proved, all over again, how QE was at best an asset swap and at worst a harmful monetary head fake.
You can’t fix a broken monetary system with a head fake. You can try, but in the end you’d only confuse Economists.
With rate cuts becoming more and more the accepted base case even among these people, you really have to go back to the curves and see the last few years evolve exactly how they predicted. The Economists are already partway to admitting this as true. They’ve already gone from BOND ROUT!!! to rate cuts.
This was no trivial journey. BOND ROUT!!! always meant something specific, the inarguable case of recovery. It would’ve been the point at which central bankers had finally convinced the market the liftoff was more than emotional pleading. I wrote last March, with hysteria raging:
In my view, it’s perfectly clear today that to believe the paradigm is changing is to do so from the same blind position of monetary illiteracy. That’s why it’s been to this point nothing but hype.
To now see the mainstream shift toward rate cuts, it doesn’t matter that they will try to say these will help. By the very fact they have given up on the BOND ROUT!!! it shows the boom was only ever hype. Never happened.
There’s was never the majority position. The recovery was always, always the long shot. It was only presented the other way around by a financial media that does the public a tremendous disservice. The bond market never once climbed aboard the boom. And once you see that, you cannot help but appreciate the very real dangers of 2019.
via ZeroHedge News http://bit.ly/2HUJ6Qy Tyler Durden
A flurry of recent Supreme Court activity. With just about a month left in session, the U.S. Supreme Court has been handing down decisions and issuing case rejections at a rapid pace. The past week alone has seen a host of court actions concerning issues we watch carefully at Reason, including police conduct, speech regulation, immigration policy, Medicare, and more. Here’s a frills-free overview:
New Cases: Pirated Pirate Pics, Pot Sentencing, and Inflated IBM Stocks
The Court has agreed to take three new cases, including one that involves pirates—actual pirates, as in those of Blackbeard’s boat, the Queen Anne’s Revenge, and those who “pirate” copyrighted material—in a case that pits state legal liability against artist and creator rights.
In that case (Allen v. Cooper), “the justices will consider whether Congress had the power to repeal the states’ immunity from lawsuits for copyright infringement when it enacted the Copyright Remedy Clarification Act,” as law blogger Amy Howe explains. Lawyers for plaintiff Frederick Allen—who copyrighted photos and videos he took of the Queen Anne’s Revenge shipwreck and sued the state of North Carolina for allegedly violating that copyright—say that a decision in the state’s favor would mean “creators of original expression will be left without remedy when States trample their federal copyrights.”
The other cases SCOTUS just agreed to consider involve:
In the latter, plaintiffs allege that the fiduciaries of IBM’s stock-ownership plans were amiss in continuing to invest in IBM stock they knew was artificially inflated, thereby violating federal securities law. A lot of powerful interests, including the U.S. Chamber of Commerce, are urging justices to side with IBM.
Cases Rejected or Delayed: DACA, Death Row, and D.C. Metro Ads
The court denied a Trump administration request to speed up consideration of cases involving the Deferred Action for Childhood Arrivals (DACA) program for children of undocumented immigrants.
The court also declined to hear a case involving the District of Columbia’s right to ban issue-oriented ads on public transportation. The Washington Metropolitan Area Transit Authority (WMATA) ad ban was put in place in 2015, after Pamela Geller’s “American Freedom Defense Initiative” attempted to purchase space for anti-Muslim ads. Last year, the Court of Appeals for the D.C. Circuit ruled that the WMATA ban was not a violation of the First Amendment.
And it (again) declined to hear an appeal from an Alabama death row inmate, Christopher Price, who was found guilty of murder in 1991 and executed by the state last Thursday night. In a dissent, Justice Stephen Breyer wrote that Price’s case “demonstrates once again the unfortunate manner in which death sentences are often—perhaps inevitably—carried out in this country” and said the “Court should reconsider the constitutionality of the death penalty in an appropriate case.”
New Decisions
SCOTUS has issued new decisions recently in cases concerning Medicare, anti-discrimination lawsuits, pre-trial imprisonment, wrongful arrests, and debt collection.
Fort Bend County v. Davis In this unanimous June 2 ruling, the court ruled in favor of a former city employee from Fort Bend, Texas, who had sued over alleged discrimination. The employee said she was fired for reporting sexual harassment and out of anti-religious animosity. SCOTUS did not rule on the merit of her claims but disagreed with the city that the District Court lacked jurisdiction to hear the case. Full decision here.
Azar v. Allina Health Services: In this 7-1 ruling, the court struck a blow against an Obama Medicare rule. It held that a Medicare hospital reimbursement rule should be struck down because the Department of Health and Human Services had not properly followed the notice-and-comment rulemaking process. More here.
Nieves v. Bartlett: This case concerning a man alleging retaliatory arrest in Alaska has some folks worried about its implications for free speech, protest, and police brutality. With its May 28 ruling, the court “made it more difficult for people who say they were arrested for exercising their free speech rights to bring lawsuits against the officers who arrested them,” suggestsThe Root. “This could include behaviors like throwing insults or refusing to talk to officers, or protesting and filming the police.” Only Justice Sonia Sotomayor dissented on the outcome of the case.
Mont v. United States: In a 5-4 decision, the court held that “pretrial imprisonment on a new criminal charge puts a term of federal supervised release on hold,” as SCOTUSblog explains. This relatively in-the-weeds sentencing ruling is notable for the strange alliances it produced among justices, as Reason‘s Damon Root points out:
Here’s a fun 5-4 SCOTUS line-up. Thomas writes the majority opinion, joined by Roberts, Alito, Kavanaugh, and Ginsburg. Sotomayor dissents, joined by Breyer, Kagan, and Gorsuch. https://t.co/jJbkFnuLmk
The Mont lineup is interesting “on multiple levels,” suggests law professor Jonathan H. Adler. “At first the decision appears to have produced a traditional 5-4, conservative-liberal split, until one notices that Justice Ginsburg joined with the conservatives and Justice Neil Gorsuch joined the liberals. The resulting division is thus neither one we expect to see ideologically, nor is it readily explained on the basis of other common jurisprudential divisions, such as the formalist-pragmatist split we’ve often seen in other criminal justice contexts. Further, while we’ve seen Justice Gorsuch cross over to vote with the liberal justices in other cases, we have not seen this in a case in which one of the more liberal justices also ‘switched sides.'”
Taggart v. Lorenzon: In this case, the court unanimously held that “creditors could face civil penalties if their attempt to collect old debt that was canceled in bankruptcy is ‘objectively unreasonable,'” The Wall Street Journal explains. More here.
And if you’ve still got an appetite for legal conundrums:
If it wasn’t for Snowden, the American people would never have learned the NSA was collecting phone records and spying on Americans. As president, I will protect whistle-blowers who expose threats to our freedom and liberty. pic.twitter.com/AlQgC5dr0G
“Granting states some authority to mint visas to meet their specific labor market needs would help dry up demand for undocumented workers, stave off depopulation, keep businesses in place, and fill in fiscal gaps,” writes Will Wilkinson in The New York Times.
“The devil usually tells us we’re saving others’ souls when he’s trying to convince us to sell our own,” suggests Reason’s Stephanie Slade, weighing in on the First Things/theocracy versus David French/classical liberalism controversy.
Migrant children between the ages of 5 and 12 years old were left on a bus overnight (after what was supposed to be just a 30-minute ride) in a botched family reunification attempt.
What happens when you reclassify independent contractors as employees? Reason‘s Christian Britschgi explores.
Protecting and serving:
"Minutes later, police officers barged through the front door, and saw the young woman, naked holding a blanket wrapped around her body, and the man she had just been in bed with was walking toward them. He was an undercover police officer" @sfmistresshttps://t.co/jap2R3Swoe
— Dominating My Reality (@DominateREALITY) June 4, 2019
A flurry of recent Supreme Court activity. With just about a month left in session, the U.S. Supreme Court has been handing down decisions and issuing case rejections at a rapid pace. The past week alone has seen a host of court actions concerning issues we watch carefully at Reason, including police abuse, speech regulation, immigration policy, Medicare, and more. Here’s a frills-free overview:
New Cases: Pirated Pirate Pics, Pot Sentencing, and Inflated IBM Stocks
The Court has agreed to take three new cases, including one that involves pirates—actual pirates, as in those of Blackbeard’s boat, the Queen Anne’s Revenge, and those who “pirate” copyrighted material—in a case that pits state legal liability against artist and creator rights.
In that case (Allen v. Cooper), “the justices will consider whether Congress had the power to repeal the states’ immunity from lawsuits for copyright infringement when it enacted the Copyright Remedy Clarification Act,” as law blogger Amy Howe explains. Lawyers for plaintiff Frederick Allen—who copyrighted photos and videos he took of the Queen Anne’s Revenge shipwreck and sued the state of North Carolina for allegedly violating that copyright—say that a decision in the state’s favor would mean “creators of original expression will be left without remedy when States trample their federal copyrights.”
The other cases SCOTUS just agreed to consider involve:
In the latter, plaintiffs allege that the fiduciaries of IBM’s stock-ownership plans were amiss in continuing to invest in IBM stock they knew was artificially inflated, thereby violating federal securities law. A lot of powerful interests, including the U.S. Chamber of Commerce, are urging justices to side with IBM.
Cases Rejected or Delayed: DACA, Death Row, and D.C. Metro Ads
The court denied a Trump administration request to speed up consideration of cases involving the Deferred Action for Childhood Arrivals (DACA) program for children of undocumented immigrants.
The court also declined to hear a case involving the District of Columbia’s right to ban issue-oriented ads on public transportation. The Washington Metropolitan Area Transit Authority (WMATA) ad ban was put in place in 2015, after Pamela Geller’s “American Freedom Defense Initiative” attempted to purchase space for anti-Muslim ads. Last year, the Court of Appeals for the D.C. Circuit ruled that the WMATA ban was not a violation of the First Amendment.
And it (again) declined to hear an appeal from an Alabama death row inmate, Christopher Price, who was found guilty of murder in 1991 and executed by the state last Thursday night. In a dissent, Justice Stephen Breyer wrote that Price’s case “demonstrates once again the unfortunate manner in which death sentences are often—perhaps inevitably—carried out in this country” and said the “Court should reconsider the constitutionality of the death penalty in an appropriate case.”
New Decisions
SCOTUS has issued new decisions recently in cases concerning Medicare, anti-discrimination lawsuits, pre-trial imprisonment, wrongful arrests, and debt collection.
Fort Bend County v. Davis In this unanimous June 2 ruling, the court ruled in favor of a former city employee from Fort Bend, Texas, who had sued over alleged discrimination. The employee said she was fired for reporting sexual harassment and out of anti-religious animosity. SCOTUS did not rule on the merit of her claims but disagreed with the city that the District Court lacked jurisdiction to hear the case. Full decision here.
Azar v. Allina Health Services: In this 7-1 ruling, the court struck a blow against an Obama Medicare rule. It held that a Medicare hospital reimbursement rule should be struck down because the Department of Health and Human Services had not properly followed the notice-and-comment rulemaking process. More here.
Nieves v. Bartlett: This case concerning a man alleging retaliatory arrest in Alaska has some folks worried about its implications for free speech, protest, and police brutality. With its May 28 ruling, the court “made it more difficult for people who say they were arrested for exercising their free speech rights to bring lawsuits against the officers who arrested them,” suggestsThe Root. “This could include behaviors like throwing insults or refusing to talk to officers, or protesting and filming the police.” Only Justice Sonia Sotomayor dissented on the outcome of the case.
Mont v. United States: In a 5-4 decision, the court held that “pretrial imprisonment on a new criminal charge puts a term of federal supervised release on hold,” as SCOTUSblog explains. This relatively in-the-weeds sentencing ruling is notable for the strange alliances it produced among justices, as Reason‘s Damon Root points out:
Here’s a fun 5-4 SCOTUS line-up. Thomas writes the majority opinion, joined by Roberts, Alito, Kavanaugh, and Ginsburg. Sotomayor dissents, joined by Breyer, Kagan, and Gorsuch. https://t.co/jJbkFnuLmk
The Mont lineup is interesting “on multiple levels,” suggests law professor Jonathan H. Adler. “At first the decision appears to have produced a traditional 5-4, conservative-liberal split, until one notices that Justice Ginsburg joined with the conservatives and Justice Neil Gorsuch joined the liberals. The resulting division is thus neither one we expect to see ideologically, nor is it readily explained on the basis of other common jurisprudential divisions, such as the formalist-pragmatist split we’ve often seen in other criminal justice contexts. Further, while we’ve seen Justice Gorsuch cross over to vote with the liberal justices in other cases, we have not seen this in a case in which one of the more liberal justices also ‘switched sides.'”
Taggart v. Lorenzon: In this case, the court unanimously held that “creditors could face civil penalties if their attempt to collect old debt that was canceled in bankruptcy is ‘objectively unreasonable,'” The Wall Street Journal explains. More here.
And if you’ve still got an appetite for legal conundrums:
If it wasn’t for Snowden, the American people would never have learned the NSA was collecting phone records and spying on Americans. As president, I will protect whistle-blowers who expose threats to our freedom and liberty. pic.twitter.com/AlQgC5dr0G
“Granting states some authority to mint visas to meet their specific labor market needs would help dry up demand for undocumented workers, stave off depopulation, keep businesses in place, and fill in fiscal gaps,” writes Will Wilkinson in The New York Times.
“The devil usually tells us we’re saving others’ souls when he’s trying to convince us to sell our own,” suggests Reason’s Stephanie Slade, weighing in on the First Things/theocracy versus David French/classical liberalism controversy.
Migrant children between the ages of 5 and 12 years old were left on a bus overnight (after what was supposed to be just a 30-minute ride) in a botched family reunification attempt.
What happens when you reclassify independent contractors as employees? Reason‘s Christian Britschgi explores.
Protecting and serving:
"Minutes later, police officers barged through the front door, and saw the young woman, naked holding a blanket wrapped around her body, and the man she had just been in bed with was walking toward them. He was an undercover police officer" @sfmistresshttps://t.co/jap2R3Swoe
— Dominating My Reality (@DominateREALITY) June 4, 2019
A Washington DC district court judge tossed out a lawsuit brought by House Democrats seeking to halt President Trump’s reallocation of funds for a southern border wall.
Judge Trevor McFadden ruled that the matter is fundamentally political and Democrats have a lack of standing to make a legal case.
In February, Trump declared a national emergency over the flood of migrants at the southern border which have overwhelmed the US immigration system. Shortly after, House Speaker Nancy Pelosi (D-CA) and other House Democrats filed their lawsuit, claiming that Trump was “stealing from appropriated funds” and would be in violation of the Appropriations Clause of the Constitution. The politicians contended that this constituted an “institutional injury” to the separation of powers.
McFadden, a Trump appointee, disagreed – writing in his opinion: “This case presents a close question about the appropriate role of the Judiciary in resolving disputes between the other two branches of the Federal Government. To be clear, the court does not imply that Congress may never sue the Executive to protect its powers,” adding “The Court declines to take sides in this fight between the House and the President.“
“This is a case about whether one chamber of Congress has the “constitutional means” to conscript the Judiciary in a political turf war with the President over the implementation of legislation. … [W]hile the Constitution bestows upon Members of the House many powers, it does not grant them standing to hale the Executive Branch into court claiming a dilution of Congress’s legislative authority.The Court therefore lacks jurisdiction to hear the House’s claims and will deny its motion.”
— Judge Trevor McFadden
BREAKING: Judge REJECTS Democrat effort to stop Trump’s use of emergency powers for Wall
Attorney Will Chamberlain, co-founder of Human Events, suggested in January that Trump declare a national emergency at the southern border – and broke down why Democrats would lose a challenge over lack of standing.
— Will Chamberlain 🇺🇸 (@willchamberlain) June 4, 2019
McFadden began by focusing on two guiding Supreme Court cases he called “lodestars”— the 2015 case Arizona State Legislature v. Arizona Independent Redistricting Commission, and the 1997 case Raines v. Byrd.
“Read together, Raines and Arizona State Legislature create a spectrum of sorts,” McFadden wrote. “On one end, individual legislators lack standing to allege a generalized harm to Congress’s Article I power. On the other end, both chambers of a state legislature do have standing to challenge a nullification of their legislative authority brought about through a referendum.”
But, McFadden quickly distinguished the Arizona State Legislature case, which found institutional standing for legislators only in a limited instance. The Arizona case, the judge noted, “does not touch or concern the question whether Congress has standing to bring a suit against the President,” and the Supreme Court has found there was “no federal analogue to Arizona’s initiative power.” –Fox News
McFadden also noted that Democrats still have the power to modify or even repeal an appropriations law if they wish to “exempt future appropriations” from the Trump administration.
“Congress has several political arrows in its quiver to counter perceived threats to its sphere of power,” wrote McFadden. “These tools show that this lawsuit is not a last resort for the House. And this fact is also exemplified by the many other cases across the country challenging the administration’s planned construction of the border wall.”
“The House retains the institutional tools necessary to remedy any harm caused to this power by the Administration’s actions. Its Members can, with a two-thirds majority, override the President’s veto of the resolution voiding the National Emergency Declaration. They did not. It can amend appropriations laws to expressly restrict the transfer or spending of funds for a border wall under Sections 284 and 2808. Indeed, it appears to be doing so.”
As noted by Fox News, McFadden’s ruling contrasted with an injunction issued by Obama-appointed US District Court Judge Hawyood Gilliam last week, who blocked the Trump administration from using the reallocated funds for specific areas in Arizona and Texas.
via ZeroHedge News http://bit.ly/2Z9f8On Tyler Durden
It’s probably a coincidence but on the day we warned that the hedge fund “redemption rush” returned, just ahead of news that UK’s Neil Woodford has blocked redemptions from his £3.7bn equity income fund, that the broader L/S hedge fund community suffered what Nomura calculated was a beating on par with the worst day of 2019.
Specifically, as Charlie McElligott writes this morning, after an extended period of outperformance for long/short hedge funds, “thanks to grossed-up shorts having done their jobs–along with “low nets” that come with them”, yesterday’s below the hood behavior was “outright ugly”, and according to the Nomura strategist was “tied for the worst performance day YTD for his model Equities L/S HF (-1.7% on the session) in classic “gross-down” fashion”, as crowded cyclical shorts exploding higher on forced covers (Materials +3.4%, Energy +1.4%, Industrials +0.7%, Financials +0.7%) while crowded longs – recall our Sunday article “These “Most Crowded Stocks” Face The Greatest Risk Of Wipe Out” which again was published at just the right time – were destroyed (Cons Disc -1.2%, Tech -1.8%, Comm Services -2.8%, Software 8x’s EV/Sales -5.2%) — and as such, “it was rationally the worst day for 1Y Price Momentum factor (-2.3% on session) in nearly two months.“
A separate reason for yesterday’s meltdown in hedge fund favorite stocks was the “extreme gamma” positioning we discussed yesterday morning. As Nomura explains, yesterday’s overall Equities trade “was the exact chop-fest you should expect with the “extreme Gamma” market (sum of SPX / SPY $Gamma currently just 1.3%ile since 2013), featuring a 22 handle opening selloff, followed by a 26 handle rally, before a later 30 handle selloff, before another 20 handle rally, a 20 handle selloff, a 15 handle rally, a 25 handle selloff and a 15 handle rally into the cash session close.”
Meanwhile, another way of looking at yesterday’s massive rotation, is that as has been the case frequently in the past, “the big performance drawdown days for US Equities funds continue to come when chronically underweighted / structurally shorted “Value” factor squeezes / rallies against the enormous length crowded into “Growth” factor, which has been accumulated as a duration-sensitive alternative to traditional Defensives”, according to McElligott, and yesterday “was the largest “Value / Growth” ratio reversal higher since late Nov 2016…although nary just a micro-move relative to the decade-long “Growth over Value” phenomenon since the GFC and QE began.”
Said another way—“expensive” Growth stocks were purged (on the somewhat idiosyncratic anti-trust escalations) while “cheap” and heavily-shorted Value stocks were covered—which although only being one day’s worth of behavior IS notable, because it mimics pre-recessionary behavior where Value factor L/S sees signs of life, as Value Shorts (aka expensive Growth Longs) break down first, before Value Longs (aka Cyclicals) begin to outperform on sensitivity to perceived Fed easing / stimulus coming down-the-pipe
As McElligott shows in the chart below, yesterday was the partial unwind/gross down of much of May’s “slowflation” rally in which momentum soared (long growth and defensives, short cyclicals) while value was hit as a result of the trade war growth scare.
Going back to Monday’s hedge fund hammering, McElligott also notes that when the “Value/Momentum” reversal ratio spikes as it did yesterday, a sharp equities hedge fund performance drawdown follows, something which Neil Woodford is all too familiar with.
Discretionary funds aside, one final observation is what CTAs are doing and about to do. Following on our report from last night that CTAs are now shorting the Russell 2000, and it is only a matter of time before they turn short on the S&P 500, McElligott writes that his own CTA model has seen systematics also “flip short” the NASDAQ (if within range of cover), while CTAs on S&P are 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”
S&P 500, currently 67.7% long, [2749.6 close yesterday, spot currently 2760], more buying over 2791.31 (+1.52%) to get to 82% , max long over 2938.32 (+6.86%), selling under 2735.48 (-0.51%) to get to -16% , more selling under 2735.2 (-0.52%) to get to -100% , flip to short under 2735.48 (-0.51%), max short under 2735.2 (-0.52%)
And with the S&P now withing close proximity to both buy and sell trigger points for the CTA community, Nomura makes these final observations:
The positioning across Global Equities has tilted boldly “Short”
The Bonds/Front-End “Long” remains massively in-the-money
USD remains a “+100% Long” across all nearly all pairs
Commodities are off the extreme “-100% Short” of last month, with Metals tilting “Neutral to Long,” with Crude “Neutral” and Ag products generally still “Short”
And visually:
via ZeroHedge News http://bit.ly/2Z7KiGa Tyler Durden
Boris Johnson has basked in President Trump’s praise, touting Trump’s endorsement as yet another reason why he should succeed Theresa May as Britain’s next prime minister. But when the opportunity arose for Johnson to meet Trump, the former foreign secretary snubbed the leader of the free world, saying he was “too busy” to meet with him.
Over the weekend, Trump praised Johnson as a “friend” and as a “very talented” politician with whom the US might be able to negotiate a sweeping trade deal (Trump has repeatedly brought up the possibility of a trade deal during his trip, to the delight of Brexiteers who are pushing for a ‘no deal’ exit from the EU). Trump has also compared Johnson favorably to Theresa May (much, we imagine, to the prime minister’s chagrin).
But during a Tuesday morning phone call, Johnson reportedly turned down the opportunity for a one-on-one meeting with Trump because of a Conservative leadership hustings event, according to ITV reporter Robert Peston.
A spokesman for Johnson’s office told British media that the decision was intended to show just how seriously Johnson – who is far and away the favorite to win the Tory leadership contest – is taking the race.
.@BorisJohnson has had a 20 minute phone chat with @realDonaldTrump this morning but declined face-to-face meeting this evening because clashed with One Nation leadership hustings. See attached pic.twitter.com/3hk9yyY17w
The two spoke on the phone for 20 minutes, and Johnson told Trump he looked forward to meeting at a later date.
However, there’s reason to suspect that the snub was a calculated political maneuver. Polls show Trump isn’t particularly popular with British voters, though Johnson remains the most popular conservative in the country.
Instead of meeting with Johnson, Trump will now instead meet with one of his leading rivals, Environmental Secretary Michael Gove, who interviewed Trump in the days before his inauguration. At the time, Gove was working as a columnist for the Rupert Murdoch-owned Times of London.
Trump might also find time to meet with Nigel Farage, whom he recently recommended should be sent to Brussels to lead the next round of Brexit deal talks.
via ZeroHedge News http://bit.ly/2WpYcqf Tyler Durden
Last Thursday, President Trump tweeted he would impose a 5% tariff on all goods coming from Mexico starting next Monday [June 10] “until such time as illegal migrants coming through Mexico, and into our Country, STOP.” The tariff, if authorized by the White House, could make popular Mexican beer like Corona and Modelo, a whole lot more expensive for American consumers, reported CNBC.
On June 10th, the United States will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP. The Tariff will gradually increase until the Illegal Immigration problem is remedied,..
A statement published by the White House said tariffs on Mexican imports would surge to 25% if the immigration crisis at the border is not resolved immediately.
A senior Mexican delegation will start high-level immigration talks on Monday in Washington to hopefully resolve the issue and thwart tariffs.
The announcement of possible duties gaped down Constellation Brands’ stock 8% at one point last Friday.
According to Morgan Stanley, 75% of Constellation Brand’s beer portfolio is “entirely imported” from Mexico. MS said in a research note to investors that a 5% tariff would cut 4% rom the company’s bottom line. In the case of a 25% tariff rate, well, the company’s profits would collapse by 19%.
Jim McGreevy, president and CEO of the Beer Institute, spoke with the Chicago Tribune who said tariffs on Mexico would harm the American trucking industry and farmers along the supply chain if Mexican brewers see a decline in activity. US farmers exported $209 million in barley to Mexican beer producers last year, McGreevy said.
It’s likely that the importer on record will pass along the tariff in the form of higher prices to consumers. The beer industry has already been slapped with $349 million in additional costs thanks to President Trump’s steel and aluminum tariffs.
Chicago-based MillerCoors, which imports the Mexican beer Sol, would be another beer to see possible price hikes if the tariffs went through next week. Heineken, which imports Dos Equis and Tecate, are more beers that could see price hikes. Anheuser Busch InBev, which imports Mexican beer Estrella Jalisco, could also see increased prices.
To “Make America Great Again,” consumers will have to pay up for their favorite Mexican beers – at what point does the blue collar worker, living paycheck to paycheck, start noticing soaring prices thanks to President Trump’s trade war?
via ZeroHedge News http://bit.ly/2QHuzuk Tyler Durden
