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S&P Gives Up Vaccine Gains, Tech Is Tumbling As Momo Meltdown Accelerates

S&P Gives Up Vaccine Gains, Tech Is Tumbling As Momo Meltdown Accelerates

Tyler Durden

Tue, 11/10/2020 – 10:45

Well that all de-escalated quickly.

After the exuberance yesterday, the afternoon weakness is continuing today with the S&P now underwater from the Pfizer headlines and Nasdaq down over 6%…

The tech wreck is being accelerated by the record-breaking collapse in momentum…

And for now, the recent surge in yields is stalling at recent highs, ignoring the momo/value pair’s collapse…

…we ‘re gonna need another vaccine!

via ZeroHedge News https://ift.tt/36jS3Ow Tyler Durden

Brokers’ “Biden Trade” May Be Misguided

Brokers’ “Biden Trade” May Be Misguided

Tyler Durden

Tue, 11/10/2020 – 10:40

Authored by Daniel Lacalle,

Many financial experts have rushed to make what has been regarded as “Biden trade” calls based on the projections by The Associated Press, NBC News and other news outlets of a Joe Biden presidency. The “Biden trade” is a synonym of a recommendation to invest in assets that may benefit from a Democratic presidency judging by the main policies announced throughout the campaign.

The first risk for investors is to make significant bets on radical changes of policy when the balance of power in the House and Senate may inhibit many of the headline-grabbing policy changes. We already have reports, for example, that show how the tax hikes may be halted due to a combination of a divided government and the negotiations of a new stimulus package.

The second risk for investors is to follow apparently well-argued bets based on a political outcome which end up creating the opposite effect. In 2017, Nobel laureate Paul Krugman wrote about the stock market after a Trump victory: “If the question is when markets will recover, a first-pass answer is never”. The S&P 500 broke new all-time records in the following three years. The Trump presidency saw a surge in stocks, an all-time low yield in US debt and record levels of employment, rising real wages and strong growth before the pandemic. A similar situation happened with the Obama administration. Many investors and experts predicted a surge in renewable stocks and a collapse in the US dollar and large American corporations and none of it happened as expected.

What are the most-called “Biden trades”? Essentially, we can summarize the following: A weaker dollar based on the aggressive fiscal plans and deficit spending of the Biden-Harris team, an overweight Europe and China based on an expected end of tariffs and trade measures as well as weaker corporate profit for US corporates due to more regulation and higher taxes. What surprises me is that many colleagues in the finance world and analyst community defend a weak dollar and surging debt as well as a poorer outlook for investment and business. These are outcomes that hurt consumers, taxpayers and job creation.

However, we must alert to the so-called “Biden trades” judging by experience. We know from the Obama-Biden tenure that making aggressive policy-related bets may be a noticeably big mistake.

Despite consensus calls for a weaker US dollar, between the 20th of January of 2009 and the 20t January 2017, when Obama and Biden were in power, the US Dollar Index (DXY) rose 16.8%, the trade-weighted dollar index rose 15.9%, the dollar strengthened vs the euro by 20.6% and also strengthened compared to the yuan.

The idea that Biden will end tariffs and so-called protectionism is also denied by history. According to the Geopolitical Intelligence Service the United States implemented more protectionist measures than any other country in the world during the Obama administration, more than 600 measures limiting free trade including tariffs on solar panels and trade barriers on capital and imported products.

We must also remember that the fracking revolution in the United States and the biggest increase in domestic oil production happened during the Obama-Biden tenure, while solar bankruptcies soared to all-time highs between 2010 and 2017 as prices plummeted and debt became unpayable. The call to invest in the Clean Energy space based on a change of policy generated a massive underperformance relative to the S&P 500 and the Nasdaq. Good and solid renewable companies did relatively well as technology leaders strengthened, but the broad-based call yielded a mere 2% return of the Clean Energy Index (NEX) relative to a 182% rise in the S&P 500 and a whopping 285% of the Nasdaq.

Calls for an outperformance of China and Europe may also be misguided judging by the past. European stocks (Stoxx 600) underperformed the S&P 500 in the Obama-Biden tenure delivering almost half the return, currency adjusted, than the US broad index. A similar pattern happened with Chinese stocks, with the broad China index delivering a third of the performance of the US index, and Emerging Markets, also massively underperforming the S&P 500 and the Nasdaq.

Other calls assume a massive spending spree but are surprisingly benign with the deficit and debt outcome. According to the Committee for a Responsible Federal Budget, Biden’s proposals will increase the US deficit from 2021 to 2030 by 5.6 trillion US dollars and up to 8.3 trillion. As such, calls for a massive Keynesian effect of spending plans is likely to be -again-wrong, as growth estimates undershoot expectations and debt balloons.

Investors may want to believe in the magic wand of a president, but the reality is that the United States level of state independence, the system of checks and balances, the control of the Senate and the diversification and innovation of US entrepreneurs make it almost impossible to believe that the radical policies announced will be implemented as planned, let alone generate the consensus estimates.

If we can learn anything from the past is that the United States economy proves to be far more resilient than what analysts predict and that betting against America is a bad idea, even if the administration tries to advance anti-business proposals. The “blue wave” calls were wrong, and the likely outcome of these elections may show that we need to pay more attention to the reality of the US economy and its small and medium businesses than to headline-grabbing politics.

Betting on Keynesian and interventionist policies to work is bad for the economy and worse for investors.

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What happens if Puerto Rico became a state?

In late 2018, after more than seven fantastic years of living in Chile, I decided to move to Puerto Rico to take advantage of the island’s incredible tax incentives.

By moving to Puerto Rico, I traded my right to vote in US federal elections for a 4% tax rate. And I’m pretty confident I got the better end of that deal.

I’ve written about this quite extensively– but stick with me, because there’s a new twist to the story.

As we’ve covered before, Puerto Rico is a territory of the United States.

This means that the island falls under the jurisdiction of the US government for certain matters, like immigration and national defense.

But it operates independently in other matters– like taxes.

In fact, taxes is probably the most important one: Puerto Rico has its own tax system that’s completely independent from the United States.

So residents of Puerto Rico can disconnect entirely from the US tax system, as long as their income is generated from Puerto Rican sources.

This is a critical point: what constitutes Puerto Rican income?

According to the tax code, this includes dividends paid by a Puerto Rican business, as well as capital gains from certain investments like stocks and bonds.

So if you live in Puerto Rico and make most of your money from your Puerto Rican business, or you trade stocks, commodities, crypto, etc., then in most cases your income would be considered Puerto Rican in origin.

If that’s the case, you are generally no longer required to pay US federal taxes on that income. In fact you might not even have to file a federal tax return at all.

Instead, you would pay Puerto Rican taxes. And that’s where the incentives come in.

Several years ago the Puerto Rican government established a number of extraordinary tax incentives, specifically targeted at those two cases–

Traders, whose primary source of income is capital gains from their financial investments, literally pay ZERO tax.

And entrepreneurs with qualifying businesses are only required to pay a 4% corporate tax rate (plus a tiny municipal rate that’s just a fraction of a percent, depending on which city you live in.)

Plus, any dividends that your company pays to you are tax free as long as you live in Puerto Rico.

This is an enormous benefit.

If you live in the US mainland and operate an LLC, you’d pay, say, a 25% to 40% average tax rate on business income, not counting self-employment tax.

If you run your business through a corporation, you’d pay 21% corporate profits tax, plus an additional 15% to 20% dividend tax, plus the 3.8% Obamacare surtax, plus state and local tax.

In Puerto Rico it’s just 4%. Call it 4.5% to account for the local municipal tax. But that’s it. No extra dividend tax. No Obamacare surtax.

You put more than 95% of your earnings in your pocket.

This isn’t some obscure loophole or shady tax shelter. It’s the law.

Section 933 of the United States federal tax code specifically exempts US citizens from federal tax on their Puerto Rican sourced income, as long as they are bona fide Puerto Rico residents .

(Note that if you have US-sourced income, or income from foreign countries, that income would still be taxable by the IRS. Section 933 only excludes Puerto Rican income from US federal tax.)

And in Puerto Rico, the incentives are also codified by law.

In fact, once your tax incentive application is approved, you actually sign a contract with the government and are issued an individual tax decree.

So even if they change the law later, you’d still be grandfathered in under the old rules, and continue to enjoy your current tax benefits.

Now, here’s the twist: there are very, very few events that could trigger a problem with your tax incentives. But one of them just became more likely:

Puerto Rico is currently a US territory. But there’s been a movement for quite some time for Puerto Rico to become a state… similar to how there’s a statehood movement for Washington DC.

Just like DC, Puerto Rico tends to skew quite liberal politically. So the blue party in the US is very much in favor of Puerto Rico and DC becoming states.

(I hate breaking down the world into red and blue, but in this case, it’s relevant.)

It means they would likely pick up 2 more senate seats for each one, nearly guaranteeing the Democrats control of the United States Senate.

Several months ago, in fact, the House of Representatives passed a bill authorizing DC to become the 51st state. It was killed in the Senate.

But it shows the movement is real.

Last week, Puerto Ricans had their own election. And statehood was on the ballot.

The final tally showed that a majority of Puerto Ricans want to become a state. The Democratic party wants them to become a state.

And if that happens, the benefits would go away. Sure, your company would still be subject to a 4% tax rate in Puerto Rico. But then you’d have to pay US federal income tax on top of that.

So statehood pretty much kills the deal.

But does last week’s vote mean that Puerto Rico will become a state?

No, not necessarily.

Statehood would require approval by the US House of Representatives. Then the Senate would have to approve it.

And in order for that to happen, the Democrats would need to take control of the Senate AND agree to eliminate the filibuster.

Then the President would need to sign it into law.

So, it’s possible this could happen, but it’s not especially likely.

And even if it did happen, there would still be several years of a transition process.

So, bottom line, the tax incentives in Puerto Rico are still valid and extremely valuable.

And even if they only exist for another 3-5 years, they’re still definitely worth considering.

Source

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Live Blogging California v. Texas (Updating)

Today the Supreme Court hears oral argument in California v. Texas. In this post I am live blogging the oral argument, identifying questions and responses that are interesting or potentially important. My last case preview and prior posts on this litigation are available in this post from last night.

First up is California Solicitor General Michael Mongan, on behalf of the intervenor states seeking to defend the ACA, stressing that the individual mandate does not operate as a mandate, but rather offers a choice, as the Court had concluded in NFIB v. Sebelius.

Chief Justice opens questioning with standing: Does someone who fails to purchase insurance violate the law? No, says Mongan. What if they later apply for a job and are asked whether they have ever violated the law? No one has made such a claim of injury here, notes that relevant precedent requires a prospect of enforcement. Standing is on the Chief’s mind (as it appears to be on the minds of others).

Justice Thomas follows up on standing questions, wondering whether opprobrium from failing to follow the law might be sufficient to establish standing. As Mongan notes, no such claim was alleged here. No such harm has been asserted. Justice Thomas also raises question of how standing, statutory interpretation, and severability should interact.

Justice Breyer asks about the Department of Justice’s theory of standing. Mongan notes this is a “novel” theory of standing that would enable all sorts of litigants to use the alleged infirmity of the mandate to challenge any other part of the law they don’t like, e.g., restaurants could use this theory to challenge the calorie count disclosure requirements.

Justice Alito turns to state theory of standing, asking whether they could seek a declaratory judgment. As Mongan notes, the provision Texas cites as its alleged injury is a separate provision of the statute, not the mandate, so does not establish standing to challenge the mandate. Justice Alito pushes back a little, but Mongan holds to his position, nothing that Texas has not alleged any argument about why the provisions that allegedly harm Texas are themselves unconstitutional.

Justice Sotomayor helps Mongan underline the point, and then asks for best argument that the mandate, Section 5000A, is not a command. Mongan obliges, and they have a back and forth on whether 5000A actually mandates than anybody does anything. Mongan further notes Texas offered no evidence that amendment to Section 5000A imposes any additional costs on Texas, as is required of parties claiming standing at summary judgment.

Justice Kagan keeps the discussion on standing—the Court really seems to care about this. She asks whether Texas can assert standing on the basis that more people may enroll in other programs as a result of the mandate, even if it is not enforced. While Justice Kagan is a near-certain vote against the plaintiffs, it is not clear she wants the Court to decide the case on standing grounds. If there are two or three votes to dispatch this case on standing grounds, this will present an interesting conundrum for the more liberal justices, who like more permissive standing rules, but clearly want this case to fail.

Justice Gorsuch asks whether the United States could bring a civil enforcement action to enforce the mandate. Mongan rejects this claim because NFIB said there was no legal consequence from failing to comply with a mandate other than paying the tax penalty. But what if? Justice Gorsuch asks. Mongan responds noting that the Court’s standing cases claim that there still needs to be a reasonable prospect of enforcement for there to be jurisdiction, but also notes that the state intervenors are happy to press their claims on the merits. Justice Gorsuch asks additional questions about Texas’ claims, including the implications of the CBO report indicating that some people may acquire insurance because of the mandate despite the lack of a penalty.

Justice Kavanaugh returns to individual standing, asks whether someone could challenge a law declaring that every homeowner should fly an American flag in front of their house, if the law lacked any enforcement provision. Mongan says there might be plausible claims, perhaps raising First Amendment claims, but no such arguments were made here. Justice Kavanaugh asks whether there are any other provisions of federal law imposing a mandate without penalty. Mongan says no. Turning to the merits, Kavanaugh asks whether 5000A can still be read as a tax if it does not raise revenue.

Justice Barrett asks whether it is relevant that the mandate was not repealed. Mongan responds that Congress understood 5000A offered a choice (as the Court had said in NFIB) and merely altered the consequences of the choice. On the standing front, Barrett asks whether the analysis would be different if the government maintained a record of whether or not individuals were complying with the mandate. Mongan notes that’s not at issue here, and then pivots to note that even if plaintiffs have standing, declaring that the mandate is not enforceable against them would fully redress their injuries.

[. . . developing . . .]

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Job Openings Increase Again As Pace Of Hiring Slows

Job Openings Increase Again As Pace Of Hiring Slows

Tyler Durden

Tue, 11/10/2020 – 10:29

One month after the October JOLTs report showed the first monthly drop in job openings since the March covid crash, moments ago the BLS reported that in September job openings in the US increased again, rising by 6.436MM, up from the 6.352MM downward revised October print (originally 6.493MM), if missing the 6.5MM consensus estimate.

According to the BLS, job openings decreased mostly in federal government (-20,000), and was little changed in all four regions.

Separately, we already knew that the series of 24 consecutive months in which there were more job openings than unemployed workers ended with a thud in March, in April it was an absolute doozy with 18 million more unemployed workers than there are job openings, the biggest gap on record. Since then the the gap has closed somewhat, and in September, there were 6.1 million more unemployed than available job openings (after 7.2 million in August).

As a result, there were just under 2 unemployed workers for every job opening, down from 4.6 at the peak crisis moment in April.

Meanwhile, after a flattish month for hiring in August (which followed the sudden and unexplained plunge in hiring in July, when the total number of job hires dropped by a 1.1 million to just 5.9 million) in September hiring once again slowed down, rising by 5.871MM in September, a decline of 81K from the 5.952MM in August, which is well below the record hiring pace set in May with 7.2MM.

Hires decreased in federal government (-256,000), largely due to a drop in demand for temporary 2020 Census workers. Hires also decreased in retail trade (-105,000) and educational services (-23,000). The number of hires increased in accommodation and food services (+137,000), wholesale trade (+73,000), and transportation, warehousing, and utilities (+46,000).

With hiring more or less flat in September, the number of total separations was also little changed at 4.7 million. The total separations level increased in other services (+77,000). Total separations also increased in federal government (+31,000), largely the result of temporary 2020 Census workers.

Of these, the number and rate of layoffs and discharges decreased to 1.3 million (-200,000) and 0.9 percent, respectively in September. The layoffs and discharges level decreased in construction (-102,000) and wholesale trade (-40,000). The number of layoffs and discharges increased in federal government (+37,000), largely due to the release of temporary 2020 Census workers. Layoffs and discharges were little changed in all four regions.

Finally, after the record surge in the number of American quitting their jobs reported back in June, the number of quits moderated and declined in August for the first time since April but has now rebounded again, and in September, an additional 179K people quit their job, bringing the total to 3.018MM. Quits increased in other services (+65,000), construction (+39,000), and arts,
entertainment, and recreation (+17,000).

via ZeroHedge News https://ift.tt/3n4tjQS Tyler Durden

Live Blogging California v. Texas (Updating)

[. . . developing . . .]

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Paris Health Official Urges “Cancel Christmas & New Year’s” As Virus Ravages Europe

Paris Health Official Urges “Cancel Christmas & New Year’s” As Virus Ravages Europe

Tyler Durden

Tue, 11/10/2020 – 10:05

France and the UK are in the midst of their second month-long lockdowns after rising numbers of COVID-19 cases while headed into the winter months. Both are enforcing tight new restrictions on their populations including closures of pubs, restaurants and other businesses deemed “non-essential”.

And now some health officials are even talking “canceling Christmas” as absurd as that sounds. An influential health official in Paris has called for Christmas and New Year’s celebrations to be cancelled across the country in statements Tuesday.

Fearing another virus resurgence that will overwhelm medical facilities, Paris hospital director Julien Lenglet told RMC Radio on Tuesday that “without any hesitation, that we ought to cancel Christmas and Saint-Sylvestre” — the latter being a reference to traditional New Year’s Eve parties.

Lenglet, who specifically oversees Antony Hospital, said the risk is centered on “giant, intergenerational cluster that could be at the origins of a potential new third wave” of the coronavirus, according to Reuters.

“I would say, without any hesitation, that we ought to cancel Christmas and Saint-Sylvestre,” emphasized Paris area hospital director Julien Lenglet.

This current lockdown in France which began on Oct.30 is geared in part toward drastically reducing case numbers and mitigating the spread of the virus in hopes that the country can open back up for a ‘normal’ Christmas season.

Currently France has over 1.8 million confirmed cases, making it the fourth most infected country in the world. And as the New York Times reported Monday, the virus is once again ravaging Europe:

France reported a record 60,486 new cases on Friday and 40,439 on Saturday. While the daily average there has risen by 57 percent over the past two weeks, deaths have increased by 170 percent in the same period.

Regardless, even if French authorities move to ban gatherings over the holidays, we highly doubt the vast majority will adhere to this.

Just before the second lockdown took effect at the end of last month, there appeared to be a mass exodus from major cities to the countryside:

Incredible traffic jam in Paris as people try to leave the city before 9 pm curfew and before confinement begins at midnight. Traffic is barely moving in every direction as far as the eye can see. Lots of honking and frustrated drivers. pic.twitter.com/6Zn2HCxuPl

— Michael E. Webber (@MichaelEWebber) October 29, 2020

Instead it would more likely simply result in mass protests and a flood of people into the streets to flout the very rules meant to curtail the virus spread.

And as has already been the observed trend, people would simply flee the cities for villages and the countryside, where it would be easier to celebrate the holidays publicly and in peace.

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Barr Authorizes Election Fraud Investigations. Why Not?

Attorney General Bill Barr instructed U.S. prosecutors to look into any credible claims of election irregularities in their districts. A Monday letter from Barr is spawning a lot of worries that the Department of Justice (DOJ) backs President Donald Trump’s spurious allegations of voter fraud or is at least attempting to lend credence to them. And yesterday’s protest resignation of Richard Pilger, head of the DOJ branch that oversees election crimes, only added to that effect.

But Barr’s letter doesn’t give the impression that he’s trying to help Trump hijack the election. Rather, he seems to be trying to walk a very fine line and perhaps even stamp out his boss’s conspiracy claims.

There’s no simply ignoring them at this point; not just Trump but other prominent Republicans have backed these claims of fraud, despite the total lack of evidence and the sheer scale that would’ve had to take place for it to have affected the election outcome. (Three states would have to be wrong, by a lot; this isn’t a difference of a few hundred votes in one small area of one state, as with Florida in 2000.) Some listeners may never be convinced otherwise—but if anyone is to be, an inquiry blessed by Trump’s top cop finding no evidence for Trump’s claims is probably about the best there is to offer.

Provided these fraud claims are as bunk as they seem, then this is the best way to put them to rest.

Note that Barr isn’t ordering a needle-in-a-haystack search, nor does his letter suggest that the DOJ expects to find anything. Addressed to U.S. attorneys, the assistant attorneys general of DOJ’s criminal, civil rights, and national security division, and the director of the FBI, the letter authorizes inquiries into “substantial allegations of voting and vote tabulation irregularities prior to the certification of elections in your jurisdiction in certain cases.”

That substantial there seems to be giving people the creeps, with its potential to imply endorsement of the allegations. But substantial does not mean substantiated, and there have been a substantial number of allegations from the president and his allies, claiming a substantial interference effort in the U.S. election that would have substantial implications. It’s a weaselly word, perhaps, but not exactly wrong.

Combined with the rest of Barr’s letter, I see no reason to read too much into it. His next sentence tells U.S. prosecutors to conduct inquiries “if”—if—”there are clear and apparently-credible allegations of irregularities that, if true, could potentially impact the outcome of a federal election in an individual State.”

“While it is imperative that credible allegations be addressed in a timely and effective manner,” Barr continues, “it is equally imperative that Department personnel exercise appropriate caution and maintain the Department’s absolute commitment to fairness, neutrality and non-partisanship.”

A bit down the page Barr stresses again that “while serious allegations should be handled with great care, specious, speculative, fanciful or far-fetched claims should not be a basis for initiating federal inquiries.”

And “nothing here should be taken as any indication that the Department has concluded that voting irregularities have impacted the outcome of any election,” Barr writes. He says he is offering this “authority and guidance to emphasize the need to timely and appropriately address allegations of voting irregularities so that all of the American people … can have full confidence in the results of our elections.”

Isn’t that what we want? Trump’s claims can’t be unheard by the many people who have heard them. Many people seem to believe them. No amount of media reporting otherwise—even by Fox News—is going to change their minds. Some amount of official attention to this is going to have to happen, and Barr’s response seems measured and proportionate.

Fox News just cut away from @PressSec, saying the network could not in good conscience continue to air her false claims, for which she has provided no supporting evidence.

— Ashley Parker (@AshleyRParker) November 9, 2020

Even Trump’s people are dissatisfied…

“This is not what some of us wanted. This is not what I wanted,” a senior Trump campaign official told The Daily Beast. “This will give the president [and others] something to play with for a while, but until Bill Barr actually puts up or shuts up, we’re still where we [have been].”

FREE MINDS

The Supreme Court is considering Brownback v. King, a case involving qualified immunity for police officers. Here’s how it started:

Twenty-one-year-old college student James King was walking between his summer jobs one afternoon. On his walk, he was approached by two plain-clothes officers, Douglas Brownback and Todd Allen, who were assigned to an FBI fugitive task force in Grand Rapids, Michigan. Brownback and Allen were on the lookout for a home invasion suspect. They did not have a clear or recent picture of the suspect, but they knew he was a 26-year-old white male, between 5-feet-10-inches and 6-feet-3-inches tall, who wore glasses, and apparently bought soda from the same gas station around the same time every day. Unfortunately for King, he fit the general description and was walking near the gas station, so Brownback and Allen decided to stop him.

While King at first acquiesced to the stop after spying badges hanging around the officers’ necks, when the officers took his wallet from his pocket, King asked if he was being mugged and tried to run away. The officers tackled him to the ground, and when King put up a struggle, they choked him and punched him repeatedly in the head, causing one onlooker to tell the 911 operator that the officers were “gonna kill this man.” As it turns out, King wasn’t the suspect. And when the state of Michigan nevertheless prosecuted King for resisting arrest, a jury acquitted him of all charges.

Read more about the case at SCOTUSBlog, or check out the Cato Institute’s amicus brief.

“While the issues raised by Brownback v. King may seem abstruse, the implications for King are clear: If the Court decides the 6th Circuit got it wrong, he will not be allowed even to try holding Allen and Brownback accountable for appalling conduct—conduct that the appeals court said a jury could reasonably decide violated his Fourth Amendment rights,” explains Reason‘s Jacob Sullum. “According to the government, that is the outcome demanded by a law Congress passed to help victims of government abuse.”

FREE MARKETS

SCOTUS today will hear oral arguments in California v. Texas, a case challenging the Affordable Care Act (ACA). The case turns on three questions, including a question of whether plaintiffs even have standing to challenge the ACA’s individual mandate—which penalized people for not having health insurance—now that there’s no financial penalty for refusing to comply. From Jonathan Adler at The Volokh Conspiracy:

A threshold issue in California v. Texas, the Affordable Care Act case to be argued on Tuesday, is whether any of the plaintiffs have standing to challenge the so-called “individual mandate.” This is a serious question because in 2017 Congress eliminated the financial penalty that had been used to enforce the mandate. As originally enacted in 2010, the ACA instructed Americans to obtain qualifying health insurance, and threatened to impose a tax penalty on those who failed to comply. Now, however, the instruction remains in the U.S. Code, but the financial penalty for noncompliance is gone.

Ordinarily, plaintiffs who seek to challenge a governmental action must allege that they will suffer a cognizable injury from the government imposition. So, for instance, an oil refinery challenging an environmental regulation would allege that they must spend money installing mandated pollution control equipment or face enforcement actions, backed by fines and other penalties. This injury requirement is rooted in Article III of the Constitution. As such, the Supreme Court has held, if a plaintiff cannot allege a sufficient injury, federal courts have no power to hear their case.

The lack of a penalty to enforce the individual mandate would seem to defeat any claim of standing on behalf of the plaintiffs. Yet the lower courts (and the Department of Justice) have acquiesced to their standing claims.

QUICK HITS

• In the latest Reason Roundtable podcast, Nick Gillespie, Katherine Mangu-Ward, Peter Suderman, and Matt Welch discuss whether the election outcome was good for libertarians.

• “The Trump White House on Monday instructed senior government leaders to block cooperation with President-elect Joe Biden’s transition team, escalating a standoff that threatens to impede the transfer of power and prompting the Biden team to consider legal action,” The Washington Post reports.

• The Justice Department will let Uber acquire Postmates.

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Obama Security Adviser Admits Biden Is Already Talking With Foreign Leaders; A Breach Of The Logan Act

Obama Security Adviser Admits Biden Is Already Talking With Foreign Leaders; A Breach Of The Logan Act

Tyler Durden

Tue, 11/10/2020 – 09:45

Authored by Steve Watson via Summit News,

Former Obama deputy national security adviser Ben Rhodes admitted Monday that Joe Biden is already speaking with foreign leaders as if he is the next President, a move that some believe to be a breach of the Logan Act, the same law that President Trump’s former national security adviser Gen. Mike Flynn was prosecuted under.

Rhodes made the comments during an MSNBC interview in which he slammed Trump for contesting the election:

“We’re going to have the pageantry already of the president-elect announcing his advisory board. He’s going to start announcing cabinet secretaries. The center of political gravity in this country and the world is shifting to Joe Biden. Foreign leaders are already having phone calls with Joe Biden, talking about the agenda they’re going to pursue January 20th,” said Rhodes.

.@brhodes: Biden is already “having phone calls” with foreign leaders about “the agenda they’re going to pursue January 20th” pic.twitter.com/ynHspaEDxE

— Tom Elliott (@tomselliott) November 9, 2020

This is the exact same scenario that Obama advisers accused Gen. Flynn of being in prior to Trump’s inauguration, when the former national security advisor was purportedly communicating with foreign officials, including the then Russian Ambassador Sergey Kislyak.

Flynn was forced to resign after his conversation was exposed by the FBI, which was monitoring Trump campaign officials’ communications at the behest of the Obama administration.

In addition, notes made by former FBI Special Agent Peter Strzok, which were later made public by the Justice Department, suggested that it was Joe Biden himself who suggested using the Logan Act against Flynn, although the claim was denied by former FBI head James Comey.

After initially pleading guilty to making false statements to the FBI, Flynn retracted the plea in January of this year after claiming that the terms of his plea deal had been violated by government officials.

The case is still ongoing, and under review after documents pertaining to it were discovered to have been altered.

If indeed Biden is speaking off the record with foreign leaders, it adds to the charges stemming from the Hunter Biden laptop case, which allegedly proves that Joe Biden was involved in dodgy foreign business deals with Chinese and Russian government agents.

via ZeroHedge News https://ift.tt/36lZPr9 Tyler Durden

Carnival Announces $1.5Bn Offering One Day After Biggest Stock Jump On Record

Carnival Announces $1.5Bn Offering One Day After Biggest Stock Jump On Record

Tyler Durden

Tue, 11/10/2020 – 09:36

Easy come, easy go to market.

One day after Carnival stock soared by the most on record, jumping over 39% following the Pfizer vaccine news which gave its shareholders hope that cruises just may return one day…

… the company has rushed to lock in the gains and raise some much needed liquidity by announcing a new $1.5 billion “at the market” stock offering, similar to the one recently completed by Tesla and attempted by Hertz. The news sent the stock sharply lower after rising as high as $21.1 pre-market.

From the press release:

Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announce that following the completion on October 30, 2020 of the sale of 67.1million shares of Carnival Corporation common stock under its previous $1 billion “at-the-market” equity offering program, Carnival Corporation has filed a prospectus supplement with the U.S. Securities and Exchange Commission (the “Commission”). Under the prospectus supplement, Carnival Corporation may offer and sell shares of its common stock, through any of its Sales Agents (the “Shares”), having an aggregate offering price of up to $1.5 billion from time to time through an “at-the-market” equity offering program (the “New ATM Offering”). Carnival Corporation expects to use the net proceeds from sales of Shares under the New ATM Offering for general corporate purposes. The timing of any sales will depend on a variety of factors. J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC (the “Sales Agents”) are acting as sales agents under the New ATM Offering. PJT Partners is serving as independent financial advisor to Carnival Corporation.

The New ATM Offering was registered under the U.S. Securities Act of 1933, as amended, pursuant to a registration statement on Form S-3 (File Nos. 333-322555 and 333-332555-01) (the “Registration Statement”) filed by Carnival Corporation and Carnival plc with the Commission on March 9, 2018. The terms of the New ATM Offering are described in the prospectus dated March 9, 2018, as supplemented by the prospectus supplement dated November 10, 2020.

In connection with the New ATM Offering, on November 10, 2020, Carnival Corporation and Carnival plc entered into an equity distribution agreement (the “Equity Distribution Agreement”) with the Sales Agents. The Equity Distribution Agreement contains customary representations, covenants and indemnification provisions. A copy of the Equity Distribution Agreement is as Exhibit 1.1 to the Current Report on Form 8-K filed by Carnival Corporation and Carnival with the Commission on November 10, 2020, and the descriptions of the material terms of the Equity Distribution Agreement therein are qualified in their entirety by reference to such Exhibit, which is incorporated by reference into this Current Report on Form 8-K and the Registration Statement.

We expect many more “deep value” stocks which were hammered by covid and whose stocks jumped in the aftermath of the pfizer news will do the same and rush to come to market with similar at the market offerings, taking advantage of the still lingering market euphoria.

via ZeroHedge News https://ift.tt/3eISkOJ Tyler Durden