Category: zerohedge

One of the biggest false narratives pitched by the mainstream to mitigate concerns about a global recession, is that even as China’s massively overlevered manufacturing sector is careening into a hard landing, China’s “strong” consumer base will keep the country’s economy afloat (a narrative shared with the U.S.), even though as reported over the past weekend retail sales soundly disappointed expectations, while the latest proxy of China’s consumer strenth, namely “record” box office receipts, was recently uncovered to have been – like everything else in China – mostly fabricated.

There is one main problem with this: China’s consumer is neither strong, nor resilient, and is in fact getting weaker, and more angry by the day as China’s labor conditions continue to deteriorate: just yesterday we reported that “Enormous Crowds” Of Unemployed Chinese Miners Take To The Streets, Clash With Riot Police. Granted this is taking place in China’s industrial region, where massive overcapacity has led many local companies to the verge of bankruptcy, however the weakness has clearly spilled across to all other parts of the country.

An overnight report confirms as much: according to Reuters, “retailers in China are shedding staff, slowing expansion plans and seeing stocks pile up in warehouses as shoppers tighten their belts – a major headache for a country that has pinned its hopes on consumers to drive economic growth.”

Hardly supportive of the “strong Chinese consumer” narrative, Reuters adds that with that growth running at its slowest in a quarter of a century, China’s consumption patterns are changing, with wealthy middle-class households trading down from up-market to more affordable brands, and poorer families paring back on even basic purchases.

China’s top 50 retailers saw sales fall 6 percent at the start of the year, and sales of basic goods from noodles to detergent grew just 1.8 percent at the end of last year, down from over 9 percent just three years ago, according to Kantar Worldpanel data.

 

The weak sales of even cheap household goods underlines the challenge for China, desperate to get its 1.4 billion people to spend and give some fresh impetus to the economy.

Confirming that the Chinese consumer is anything by strong is Yang Shunjie, 28, a Shanghai-based client manager at a state-owned firm, who earns between 10,000-15,000 yuan ($1,500-$2,300) a month who said that “maybe before, if I wanted something I’d just go and buy it. Now I only buy things I really need.” He said he also shops more online where prices are cheaper and will wait for end-of-season discounts to buy new clothes.

And while the media narrative is desperately holding on to the lie, for many international names who have targeted Chinese consumers in sectors from retail to luxury and even fast-food, where they banked on continued growth, the truth has become a huge problem.

Procter & Gamble whose China products include Pampers diapers and Tide laundry detergent, said in January its sales were “significantly down” compared with 2014. Infant formula maker Mead Johnson Nutrition Co said price competition and a shift to smaller shops and online hit sales.

A customer looks at toothpaste products at a supermarket in
Shanghai, China, March 10, 2016.

“We are seeing shifts within retail. High-end luxury goods have had a very good few years, but that’s coming to an end. Tastes are changing,” said Mark Williams, chief Asia economist at Capital Economics in London.

Earlier today we got a stark warning about demand in China’s ultra luxury segment from none other than Patek Philippe Chairman Thierry Stern who said many watchmakers who relied too much on China aare cutting jobs, and added that “I strongly believe that we still have to wait a few years before mainland China is going to catch up.” Stern says, citing anti-corruption campaign. 

Third party measures confirm as much: Westpac’s most recent consumer survey showed sentiment at its lowest since October. “The February update points to continued weak conditions and elevated job-loss fears again weighing on the consumer mood,” said Senior Economist Matthew Hassan, adding that any loss of momentum for consumer demand could raise the risk that growth stays weaker for longer.

Nobody has been hit harder in China, however, than retailers: executives and consumer goods makers said China’s slow growth is punishing the sector and forcing many to cut back, focus on smaller, faster-growing cities and offer more discounts.

“We are struggling to adapt as sales move online or to small mom-and-pop stores,” said a senior sales executive at a major Western consumer goods firm. “At the moment, it’s carnage.”

What measures are retailers taking to deal with this “carnage”? Actully none, and just like in the U.S., they are merely stockpiling inventory in hopes that the current weakness will pass soon.

According to the sales executive quoted above, inventory levels at some clients had jumped to as much as nine months, from a normal average of around two weeks. For retailers and consumer goods brands alike, that means re-thinking their sales pitch. China-based advertising executives say some are adopting a two-tier marketing strategy: imported, premium ranges to target more affluent consumers, but also buying up popular and affordable local brands.

Just like with the U.S. oil market where inventory stockpiling is off the charts on hopes a price recovery is imminent, all this excess product will sooner or later hit the market, leading to liquidation dumping, massive price cuts, and another global wave deflation.

Meanwhile, going back to the truth behind China’s “strong consumer” lie, we find that the weak consumer demand has triggered a spike in profit warnings from China-focused consumer firms. Some examples:

Food group Tingyi, grocery chain Lianhua Supermarket (0980.HK), China Outfitters and Man Sang Jewellery are among those blaming poor sales on “weakening consumption” and an expectation of lower prices. Aka deflation.

“This year hasn’t been great, in fact up until now business has been slow,” said Chen Lu, a sales assistant at household goods chain Enjoy Easy in Shanghai. Chen added shoppers who spent 100-200 yuan ($15-$30) per visit last year on products from clothes hangers to sponges were spending a lot less. “Now each person might spend just a few dollars.”

Sun Art, China’s second-biggest hypermarket operator, said last month that 2016 would be a “challenging year” for retailers. Its 2015 profits declined 16 percent.

Most troubling is that the mainland weakness has now spilled across the border to Hong Kong: retail sales there had their biggest fall in 13 years in 2015, and the slump has continued this year.

“Most of our members saw double digit falls in sales (in February),” Thomson Cheng, chairman of the Hong Kong Retail Management Association, said on a conference call this month, adding many retailers were cutting staff to stay afloat.

“We are all very worried about the situation.”

Which, of course, is music to the market’s ears: the more worries, the more certain monetary (and fiscal) stimulus becomes; stimulus which as 8 years of “developed market” case history has shown, does little to boost the economy but does miracles for risk assets.

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Last September, in the aftermath of Sweden going full NIRP, we warned that “Sweden Goes Full Krugman, Gets Massive Housing Bubble“, in which we showed the unprecedented surge in Swedish home prices, which have been the one asset class to “benefit” the from the Riksbank’s ultra loose monetary policy hoping to stimulate inflation, even as overall inflation has failed to materialize.

Since then things have only gone more surreal, and the chart below shows what has happened to Swedish home prices in recent months.

 

Today, six months after our most recent observations on the state of the Swedish housing bubble, Moody’s chimes in and warns that as a result of NIRP, the country is most at risk of an “ultimately unsustainable asset bubble”:

… the unintended consequences of the ultra-loose monetary policy are becoming increasingly apparent — in the form of rapidly rising house prices and persistently strong growth in mortgage credit”, adds Ms Muehlbronner. In Moody’s view, these trends will likely continue as interest rates will remain low, raising the risk of a house price bubble, with potentially adverse effects on financial stability as and when house prices reverse trends. In all three countries, households are highly leveraged, and while they also have high levels of financial assets, returns on these assets will be under increasing pressure if the negative interest and yield environment persists.

And adds:

Moody’s believes that the Riksbank will find it difficult to achieve its objective of significantly pushing up consumer price inflation in a deflationary global environment, while the sustained and strong growth in mortgage lending and house prices risks leading to an (ultimately unsustainable) asset bubble.

We expect this latest warning to be soundly ignored because after all, what else can the central banks do in this global coordinated effort to stimulate economies with ever more debt, which by definition can only work if rates are not only at zero, but increasingly more negative.

* * *

Here is Moody’s with “Negative interest rates in Switzerland, Denmark, Sweden are having unintended consequences, with Sweden most at risk of asset bubble“

The central banks of Switzerland, Denmark and Sweden (all rated Aaa stable) have been among the first to push policy rates into negative territory. A year into this novel experience, Moody’s Investors Service concludes that, from among the three countries, Sweden is most at risk of an — ultimately unsustainable — asset bubble.

Moody’s report, entitled “Governments of Switzerland, Denmark & Sweden: Negative interest rates have unintended consequences, with Sweden most at risk of asset bubble,” is available on www.moodys.com. Moody’s subscribers can access this report via the link provided at the end of this press release. The rating agency’s report is an update to the markets and does not constitute a rating action.

The three countries’ central banks have lowered their key policy interest rates to the current -0.75% in Switzerland, -0.65% in Denmark and -0.5% in Sweden, albeit for different reasons. The Swiss and Danish central banks were aiming to reverse the intense appreciation pressure on their currencies as a result of the ECB’s introduction of its quantitative easing program. In Sweden, the central bank is focused on lifting persistently low inflation, in the context of the ongoing strong economic expansion.

“In Moody’s view, the Danish and Swiss central banks have achieved their main objective given that the appreciation pressure on their currencies has eased or, in the case of Denmark, even disappeared completely. But this is not the case for Sweden, where the Riksbank has not been successful in engineering higher inflation, while Sweden’s GDP growth continues to be among the strongest in the advanced economies,” says Kathrin Muehlbronner, a Senior Vice President at Moody’s.

“At the same time, the unintended consequences of the ultra-loose monetary policy are becoming increasingly apparent — in the form of rapidly rising house prices and persistently strong growth in mortgage credit”, adds Ms Muehlbronner. In Moody’s view, these trends will likely continue as interest rates will remain low, raising the risk of a house price bubble, with potentially adverse effects on financial stability as and when house prices reverse trends. In all three countries, households are highly leveraged, and while they also have high levels of financial assets, returns on these assets will be under increasing pressure if the negative interest and yield environment persists.

Moody’s is not overly concerned about Switzerland and Denmark as the rating agency considers these trends as “unavoidable” side effects of an otherwise successful policy. Mortgage lending also shows first signs of slowing in both countries, and Switzerland in particular has deployed several macro-prudential tools to reduce risks to financial stability.

However, Moody’s believes the situation is different in Sweden. It believes that the Riksbank will find it difficult to achieve its objective of significantly pushing up consumer price inflation in a deflationary global environment, while the sustained and strong growth in mortgage lending and house prices risks leading to an (ultimately unsustainable) asset bubble.

The Swedish authorities have imposed counter-cyclical capital buffers on their banks, and the country’s banking regulator has announced additional measures with effect from mid-2016 onwards. However, it remains to be seen how effective these measures will be in achieving a material slowdown in credit growth and house prices, while interest will likely remain at negative (or very low) levels.

* * *

The good news is that for now housing prices have nowhere to go but up; once the bubble bursts and prices crash, it will be a different story but we are confident that just like every time an asset bubble goes pop, we will get the usual excuses how  “nobody could have possibly seen it coming”, and so on.

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Submitted by Nick Cunningham via OilPrice.com,

Oil prices have shown signs of life over the past few weeks, as production declines in the U.S. raise expectations that the market is starting to adjust. As a result, Brent crude recently surpassed $40 per barrel for the first time in months.

A growling list of companies are capitulating, announcing production cuts for 2016. Continental Resources, for example, could see output fall by 10 percent. A range of other companies have made similar announcements in recent weeks. The energy world has been speculating about declines from U.S. shale, and the declines are finally starting to show up in the data.

Despite the newfound optimism that oil markets are balancing out, crude oil sitting in storage is at a record high in the United States. Energy investors may have preferred to focus U.S. production declines, or the fall in gasoline inventories in early March, but meanwhile crude oil stocks continue to signal that oversupply persists.

Crude stocks rose once again last week, hitting yet another record of 521 million barrels. Storage levels at Cushing, Oklahoma, an all-important hub where the WTI benchmark price is determined, have surpassed 90 percent of capacity. U.S. output may be starting to decline, but it is doing so at a painfully slow rate.

(Click to enlarge)

It isn’t just a U.S. problem. Crude oil storage levels continue to climb around the world. Commercial stocks in the OECD surpassed 3 billion barrels in 2015. The EIA sees oil storage in the OECD rising to 3.24 billion barrels by the end of this year. It doesn’t stop there. Storage levels rise a bit more next year, hitting 3.30 billion barrels by the end of 2017.

That is a staggering forecast that should scare any oil investor. It also suggests that the price rally over the past few weeks, which has pushed oil prices up around 40 percent since early February, could be fleeting. There is evidence that suggests the rally was driven by speculators closing out short bets on oil, after accruing net-short positions at multiyear highs in recent months. In early March, hedge funds and other major investors shed short positions at the fastest rate in almost a year. The rally, then, hinged on the sudden shift in sentiment from oil speculators.

The underlying fundamentals, however, have not appreciably changed in recent weeks. U.S. oil production is declining, but more or less at the same pace that it has for months.

On the other hand, rising inventories undercut the notion that the market is adjusting. As a result, as the short-covering rally reaches its limits, and the markets digest the fact that the world is still oversupplied with oil, prices could fall once again.

The problem, as mentioned above, is that inventories could continue to rise around the world through the rest of this year, if EIA data is anything to go by. Oil prices may have rallied in recent weeks, but the EIA was more pessimistic in March than it was in February. The EIA says that global storage levels could rise by 1.6 million barrels per day (million b/d) in 2016 and by another 0.6 million b/d in 2017. Those predictions are higher than the EIA’s February estimate.

“With large global oil inventory builds expected to continue in 2016, oil prices are expected to remain near current levels,” the EIA concluded in early March. The EIA lowered its price forecast for Brent by $3 per barrel, expecting it to average $34 for the year.

2017 does not look much better: the EIA sees Brent prices averaging just $40 per barrel next year, a whopping $10 lower than what the EIA predicted last month. That could mean prices stay below $50 per barrel through 2017.

Price forecasts are always wrong, and often wildly off the mark. While it is difficult, if not impossible, to accurately predict price movements, especially a year or two out, it is impossible to argue with the sky-high levels of oil sitting in storage. Even if U.S. oil production continues to decline, the greater than 500 million barrels of oil inventories – a record high – need to start declining in a substantial way before the oil markets will see a sustained rally.

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It seems as though Brazil can’t get through a single day without some piece of political news or economic data creating confusion and turmoil.

Last weekend, millions of Brazilians took to the streets to call for the ouster of President Dilma Rousseff whose political career and legacy hang in the balance.

An impeachment bid tied to allegations she cooked the fiscal books in 2014 looms large and when the ever-expanding car wash probe ensnared former President (and Rousseff mentor) Luiz Inácio Lula da Silva, some assumed it was just a matter of time before Dilma buckled under the pressure.

But Rousseff had other plans.

Just as a Sao Paulo state judge said a decision on Lula’s arrest should fall to federal judge Sergio Moro, Dilma offered Lula a ministry position. In his new position, he plans to revive the flagging economy with what the market assumes will be a series of leftist policies. That explains why the BRL retraced all of the gains it posted when Lula was first detained.

Of course Lula himself denies that he would pursue policies that may harm the country’s fiscal position. According to Valor, Lula’s plans wouldn’t include a shift to the left. Nor would they include expanding credit. Or rate cuts. Or tapping Brazil’s FX reserves. Or social security reform. In short, it isn’t exactly clear what they would include but whatever the case, “investors see risk of government resorting to an economic policy shift in a last-ditch attempt to save President Rousseff’s mandate,” Luciano Rostagno, chief strategist at Banco Mizuho do Brasil told Bloomberg in a phone interview.

And it’s not just investors that are unnerved.

BCB President Alexandre Tombini is reportedly “giving signs” that he may resign. “The possible nomination of Lula points to deep economic policy changes, with repercussions in monetary policy and FX policy,” Valor reported on Wednesday, explaining Tombini’s reservations about Lula’s new post. The BCB chief worries Lula may tap FX reserves and put pressure on Tombini to cut rates, Valor continues, without citing sources.

Needless to say, this is all weighing heavily on the BRL:

Meanwhile, Senator Delcídio do Amaral – whose arrest in November unnerved markets and suggested sitting lawmakers are not in fact immune from investigation –  copped a plea-bargain and gave testimony which indicates that Rousseff knew of and tried to cover up bribery at Petrobras.

“According to the plea documents released Tuesday, Ms. Rousseff was aware of all the details of the 2006 purchase of an oil refinery in Pasadena, Texas. Prosecutors suspect Petrobras used the refinery deal to generate funds it allegedly used to pay for millions of dollars of bribes and personally benefit some Petrobras executives, according to the documents,” WSJ recounts, adding that “Mr. do Amaral also alleged Ms. Rousseff pressured Justice Minister José Eduardo Cardozo to free jailed suspects caught up in the graft probe, according to the documents. Mr. Cardozo left his post in late February, saying he was weary of ‘political and personal pressure,’ without being more specific.”

Amaral also says Rousseff’s former chief of staff and current Education Minister, Aloizio Mercadante tried to pay for his silence, allegations which Brazilian weekly Veja says it can prove via tape recordings. Lula is also implicated in the testimony.

According to the latest, Lula is set to become Rousseff’s Chief of Staff.

As you can see, this is a veritable circus. Throw in the fact that Lower House Speaker Eduardo Cuhna, the ringleader of the bid to impeach Rousseff, is himself facing impeachment for hiding Swiss bank accounts, and you have a political dynamic that is just about as poisonous as one could possibly imagine. 

We wish Brazil’s beleaguered populace the best of luck in tossing the whole lot of them, because unless and until someone cleans house, the economic malaise is going to continue and the BRL will never have any lasting respite.

But not everyone is worried…

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Submitted by Mike Krieger via Liberty Blitzkrieg blog,

When it comes to raking in questionable dough via the abuse of political power, the Clintons are in a league all to themselves. In fact, their shamelessness is so rampant and sloppy, the only explanation is they simply thought no one would ever dare hold them to account.

Here’s the latest example, from Raw Story:

Let me guess, she did it because of 9/11, or because “it’s what they offered.” The only federal building this woman is fit to occupy is a penitentiary.

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One would think that as we approach the most important event of the week, and perhaps the month, namely the latest FOMC announcement due in just over three hours and one which is expected to confirm that rate hikes are back on the table, something which a few months ago unleashed another round of teeth crushing volatility, that the VIX would be higher.

Not only is it not higher, but instead as the chart below shows, the VIX has just tumbled by 6%, to fresh 2016 low, and a level not seen since mid-December.

 

We were looking for a catalyst… and then we stumbled on Gartman’s latest letter, released overnight, in which we read the following…

Concerning position taking, we have been equivocal this past week about share prices, but our equivocation is now shifting bearishly. We continue to find the fact that the rally of the past month and one half has been on decidedly lesser volume than was the volume on the downside. Note then the chart this page with the rising and falling mini-trends of volume in the S&P futures highlighted, noting that volume reaches its nadirs at market peaks, and reaches its peaks at interim market bottoms.

 

Volume should follow the trend and if that is the case then the market is exhibiting manifestly bearish tendencies and it is time to act upon those tendencies. Given the low level to which the VIX has fallen, we are buyers of the VIX this morning upon receipt of this commentary.

…

 

NEW RECOMMENDATION: As noted above, we are taking a “punt” on the short side of the equity market, but this time we shall do so by buying volatility; that is, we shall buy the VXX volatility index ETF listed on the NYSE and we shall do so upon receipt of this commentary and the market’s opening. We’ll have a stop in tomorrow’s TGL, but for now we do not wish to risk more than 5% on this trade… a rather large stop to be certain for our purposes in the past but we’ll tighten that up measurably over the course of the next day or two.

 

This is unusual action on our part ahead of an FOMC meeting given the historical tendency of equities to rise after these meetings; but call it trader’s intuition or call it what you will we think a “one unit” punt is warranted and reasonable.

We must admit that we pray that for once Gartman’s “trader intuition” is correct because we tend to agree: we have gotten to a point where complacency is fully back courtesy of the central bankers, where the market is substantially overvalued as even Goldman admits, where the earnings picture continues to deteriorate (Q1 EPS is expected to plunge by over 8%) and where none of the world’s problems have been “fixed” in the past few months yet where central banks have once again merely “kicked the can” with even more stimulus and more negative rates, while China’s debt bubble and proposed “debt for equity” swaps are now beyond rational comprehension.

Then again, it is Gartman…

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For the 7th week in a row, Cushing inventories saw a build (+545k) pushing to new record high stockpiles but that was offset by a smaller-than-expected build in overall crude (+1.3m vs +3.2m and less than API overnight). Smaller-than-expected draws in Gasoline and Distillates are helping to fade the early gains in crude.

DOE

• *CRUDE OIL INVENTORIES ROSE 1.32 MLN BARRELS, EIA SAYS (whisper +2m)
•  *CUSHING INVENTORIES ROSE 545,000 BARRELS, EIA SAYS (whsiper +497k)
•  *GASOLINE INVENTORIES FELL 747,000 BARRELS, EIA SAYS (whisper -1.6m)
•  *DISTILLATE INVENTORIES FELL 1.13 MLN BARRELS, EIA SAYS

9th weekly build in last 10 and 7th weekly build in Cushing…

 

Crude production saw a de minimus 0.11% drop WoW, led by a 0.2% drop in The Lower 48.

 

The kneejerk reaction was downward…

 

Although we are confident the algos will promptly find something which will ignite upward momentum and the gap will be filled within seconds.

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When one eliminates all the noise, the Valeant story was very simple and boiled down to two simple things: a debt-funded rollup which needed a constant influx of new acqusitions to grow non-GAAP earnings faster than the rate at which its debt was growing (while maintaining a low cost of debt low), and a sellside chorus of worshiping penguins screaming “buy, buy, buy” over each other, with ever higher price targets to keep the influx of new outside buyers pushing he stock to record highs, thus keeping the cost of new M&A low.

The first part changed when VRX stock imploded from nearly $300 to $31 in less than one year, ending the days of the Valeant rollup (the company spent more on M&A last year than its current stock price) as the dirty underbelly of Valeant was finally revealed yesterday in the most bizarre conference call in recent history.

And now, the “morning after”, we finally have the unwind of the sellside narrative.

Recall that as recently as yesterday,there were 11 buys, 10 holds, and just 2 sell recommendations, with an average 12 months price target of $131.

 

The myth is now over, and as of moments ago, the sellside revulsion has arrived, and suddenly the average price target is down by over $30.

 

To be sure, Bloomberg has not accounted for nearly half of the sellside coverage yet, all of whom are busy currently slashing their forecasts.

 

But nowhere is the humiliation greater than in the actual Valeant research reports, which we have screengrabbed below for embarrassing posterity, as follows:

JPM

 

Nomura

 

Morgan Stanley

 

Stifel

 

Rodman

 

Canaccord

 

Susquehanna

 

RBC

 

Or, in summary:

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Today at 11:00, President Obama will announce Merrick Garland as his nominee for the Supreme Court seat left vacant by the death of revered Justice Antonin Scalia.

The announcement comes at a precarious time.

It’s an election year, and Washington is deeply divided along partisan lines. Republicans fear ceding Scalia’s position to a liberal justice would imperil conservative values for decades to come, while the President insists that lawmakers are obligated to live up to their duties under the constitution and consider his pick.

“Obama will need to convince at least 14 Republican senators to join Democrats to break an inevitable filibuster and at least five Republican senators to vote with Democrats for confirmation — but first somehow convince Senate Majority Leader Mitch McConnell (R-Ky.) to back off from his absolutist position against even giving the nominee a hearing,” Politico notes. “So far, there are few signs that the Republican stand against any action on an Obama nominee is likely to crack [as] all 11 GOP members of the Senate Judiciary Committee signed what amounts to a written pledge that no nominee will be granted a hearing until after a new president is sworn in next January.”

If the Senate were to insist on waiting out Obama’s term it would be unprecedented. Lawmakers have never taken longer than 125 days to vote on a nominee. Over the last 116 years, Senators have confirmed 6 of 8 nominees in election years.

“Divisive Supreme Court decisions are more likely to be re-examined — and possibly overturned — when a court changes,” The New York Times writes, adding that “in the Roberts Court, 85 cases split 5 to 4 or 5 to 3 with Justice Scalia in the conservative majority, many with similar judicial themes.” Here’s a look at those cases broken down by theme:

Below, find Obama’s letter announcing…well…announcing his announcement.

*  *  *

Today, I will announce the person whom I believe is eminently qualified to sit on the Supreme Court.

As President, it is both my constitutional duty to nominate a Justice and one of the most important decisions that I — or any president — will make.

I’ve devoted a considerable amount of time and deliberation to this decision. I’ve consulted with legal experts and people across the political spectrum, both inside and outside government. And we’ve reached out to every member of the Senate, who each have a responsibility to do their job and take this nomination just as seriously.

Please join me in the Rose Garden at 11:00am Eastern for my announcement.

This is a responsibility I do not take lightly. In considering several candidates, I held each to three principles that reflect the role the Supreme Court plays in our democracy.

First, a Justice should possess an independent mind, unimpeachable credentials, and an unquestionable mastery of law. There is no doubt this person will face complex legal questions, so it is imperative that he or she possess a rigorous intellect that will help provide clear answers.

Second, a Justice should recognize the limits of the judiciary’s role. With a commitment to impartial justice rather than any particular ideology, the next Supreme Court Justice will understand that the job is to interpret the law, not make law.

However, I know there will be cases before the Supreme Court in which the law is not clear. In those cases, a Justice’s analysis will necessarily be shaped by his or her own perspective, ethics, and judgment.

Therefore, the third quality I looked for in a judge is a keen understanding that justice is not about abstract legal theory, nor some footnote in a dusty casebook. It’s the kind of life experience earned outside the classroom and the courtroom; experience that suggests he or she views the law not only as an intellectual exercise, but also grasps the way it affects the daily reality of people’s lives in a big, complicated democracy, and in rapidly-changing times. In my view, that’s an essential element for arriving at just decisions and fair outcomes.

Today at 11:00am Eastern, I’ll introduce you to the judge I believe meets all three of these standards.

I’m confident you’ll share my conviction that this American is not only eminently qualified to be a Supreme Court Justice, but deserves a fair hearing, and an up-or-down vote.

In putting forward a nominee today, I am fulfilling my constitutional duty. I’m doing my job. I hope that our Senators will do their jobs, and move quickly to consider my nominee. That is what the Constitution dictates, and that’s what the American people expect and deserve from their leaders.

President Barack Obama

*  *  * 

And here’s more on his nominee from ThinkProgress:

Garland is unquestionably qualified to sit on the Supreme Court. A 19 year veteran of the DC Circuit — a court that is widely viewed as the second-most powerful in the nation — Garland graduated with high honors from Harvard Law School. He clerked for Justice William Brennan, and spent a few years as a partner in the multinational law firm Arnold and Porter. He also held senior positions in the Justice Department, including a leadership role in the department’s criminal division and a stint as Principal Associate Deputy Attorney General.

At age 63, Garland is also the oldest person nominated to the Supreme Court since President Nixon named Justice Lewis Powell in 1971. Thus, if confirmed, Garland is unlikely to match — or even approach — Justice Scalia’s nearly 30 years on the Supreme Court.

Garland’s relatively advanced age may help explain why Hatch floated the DC Circuit chief judge as his ideal Obama nominee. Another factor that almost certainly played a role is Garland’sreputation for moderation. In 2003, for example, Garland joined an opinion holding that the federal judiciary lacks the authority “to assert habeas corpus jurisdiction at the behest of an alien held at a military base leased from another nation, a military base outside the sovereignty of the United States” — an opinion that effectively prohibited Guantanamo Bay detainees from seeking relief in civilian courts. A little over a year later, the Supreme Court reversed this decision in Rasul v. Bush. Although, in fairness, it should be noted that legal experts disagree about whether the decision Garland joined was mandated by existing precedents.

The former prosecutor also has a relatively conservative record on criminal justice. A 2010 examination of his decisions by SCOTUSBlog’s Tom Goldstein determined that “Judge Garland rarely votes in favor of criminal defendants’ appeals of their convictions.” Goldstein “identified only eight such published rulings,” in addition to seven where “he voted to reverse the defendant’s sentence in whole or in part, or to permit the defendant to raise a argument relating to sentencing on remand,” during the 13 years Garland had then spent on the DC Circuit.

To be clear, Garland’s record does not suggest that he would join the Court’s right flank if confirmed to the Supreme Court. He would likely vote much more often than not with the Supreme Court’s liberals, while occasionally casting a heterodox vote.

*  *  *

And more from his biography:

 

Merrick Garland was born on November 13, 1952 in Chicago, Illinois. He graduated from Harvard Law and became Special Assistant U.S. Attorney General for the U.S. Department of Justice. In private practice he supervised the prosecution of the Oklahoma City bombing and Unibomber cases. Garland currently serves on the U.S. Court of Appeals for the District of Columbia Circuit.

Born Merrick Brian Garland on November 13, 1952, in Chicago, Illinois, to parents Cyril and Shirley Garland. His father founded Garland Advertising in the city, while his mother became director of volunteer services at the Council for Jewish Elderly. Garland grew up in the upper middle-class suburb of Lincolnwood, Illinois, where he attended Niles West High School. Garland excelled academically, becoming a member of the Presidential Scholars Program and a National Merit Scholar before his graduation in 1970.

Garland attended Harvard College after high school, quickly rising to the top of his class and becoming an editor for The Harvard Law Review. In 1974 he was named valedictorian of his graduating class, and earned a bachelor’s degree in Social Studies. He then set his sights on law school, graduating with a Juris Doctor from Harvard Law in 1977.

Following his matriculation, Garland clerked for Judge Henry Friendly of the United States Court of Appeals for the Second Circuit and U.S. Supreme Court Justice William J. Brennan, Jr. In 1979, Garland was tapped for a position as Special Assistant U.S. Attorney General for the U.S. Department of Justice. He served in this capacity until 1981, then entered private practice at Arnold & Porter in Washington, D.C., where his responsibilities included the supervising the prosecution of the Oklahoma City bombing and UNABOM cases. For his efforts, he was named as a partner to the firm in 1985.

Garland left the private sector in 1989 to serve as an Assistant U.S. Attorney for the District of Columbia. After a brief return to Arnold & Porter in 1992, Garland was named as Deputy Assistant Attorney General in the Criminal Division of the U.S. Department of Justice. He was promoted to Principal Associate Deputy Attorney General, and served in this capacity until his appointment as U.S. Circuit Judge during the Clinton administration in 1997.

 

via Zero Hedge http://ift.tt/1SSGaDF Tyler Durden