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Authored by Ryan McMaken via The Mises Institute,

The governor of Colorado, Jared Polis, signed new legislation on Friday, which immediately puts into effect a wide variety of new reforms regulating the state’s police agencies. These include a number of provisions related to the use of force, body-cam recordings, and qualified immunity for police officers.

Specifically, the bill states:

• All local and state police officers must wear body cameras by 2023.

• Body camera footage must be made public (with the exception of footage the violates the privacy of victims and other non-police officers shown in footage.)

• Chokeholds are prohibited.

• Shooting at fleeing suspects is prohibited.

• Deadly force can only be used if a person’s life is in imminent danger

• Police must report every instance in which they stop someone who they suspect of a crime; they must also include that person’s race, gender, and ethnicity. Police reports must also include information on if the officer’s weapon is unholstered or discharged.

• Police must report other officers for wrongdoing

• Officers can be held personally liable for damages up to $25,000 if they are found guilty of violating an individual’s civil rights

• Officers convicted of unlawful physical force shall has his “peace officer certification” permanently revoked which “shall not under any circumstances” be reinstated. An officer who fails to intervene to end or prevent unlawful use of force shall also have his certification revoked.

Perhaps most significant is the section of the legislation eliminating qualified immunity as a defense for police officers accused of violating an alleged victim’s human rights. (Writers here at the Mises Institute have called for the abolition of qualified immunity, among other reforms, as an critical means of reining in runaway government police power.)

Specifically, if a police officer “causes…the deprivation” of another person’s rights under the Colorado Bill of Rights, then the police officer is “liable to the injured party for legal of equitable relief of any other appropriate relief. Moreover, “qualified immunity is not a defense to liability ….”

Creating an Alternative to the Federal Courts

What is also of special interest here is how the state legislature sought to do an end run around the federal court system. This new reform works to decentralize legal methods of suing police officers for abuse outside the usual federal “civil rights” system.

This was necessary because nearly forty years ago federal judges intervened to hand law enforcement officers far greater protections in federal court than had previously been the case. As Christ Calton has noted:

Prior to the case Harlow v. Gitzgerald in 1982, qualified immunity was essentially “good faith” immunity; as long as officials believed “in good faith” that their actions were legal, they were protected from lawsuits. Harlow rejected the good-faith clause—which depended on the subjective evaluation of the officer—so that the only “qualification” for qualified immunity was that no “clearly established” law was violated. At face value, the subjectivity of the good-faith clause appears to provide an open-ended defense for police abuses, but by eliminating this condition, police officers actually gained even more immunity from liability.

In practice this meant police officers were immune from liability in nearly all cases. Federal courts have ruled that it is almost never “clearly established” that a police officer is being abuse at any given time.

As is so often the case, the US Supreme Court invented this new principle out thin air based apparently on little more than the personal whims of the court’s voting majority. Congress had never provided such sweeping protections to police officers, and it’s unlikely any state legislature did either. However, the court’s ruling made it clear that from then on, it would become exceptionally difficult to establish a police officer’s personal liability in abuse cases in federal court.

The Colorado reform sidesteps all of this by creating a means for suing police officers in state court based on the standards of the Colorado bill of rights rather than the federal one.

Like most state constitutions, the Colorado constitution includes language very similar to the US Bill of Rights, including a recognition of “the right of [the people in] enjoying and defending their lives and liberties; of acquiring, possessing and protecting property; and of seeking and obtaining their safety and happiness” and the right of the people to “be secure in their persons, papers, homes and effects, from unreasonable searches and seizures.”

The Colorado legislature’s method isn’t fool proof. Federal judges — many of whom, like Chief Justice John Roberts, are apparently just making things up as they go along — could still rule that state bill of rights are and state law are superseded by the invented federal notions of qualified immunity.

State laws such as the new Colorado reform, however, make this less likely, and it will then be up to abusive police officers who have lost their cases to appeal up the line to the Supreme Court and then hope the justices overturn state law so as to favor law enforcement officers yet again.

The only definitive answer to this problem – short of aggressive nullification of federal law on the part of state governments – is a repeal of federal qualified immunity by Congress. A majority of the Supreme Court has made it clear it has no intention of overturning its earlier decisions on qualified immunity. Only an act of Congress will end this judge-invented privilege for government employees.

Fortunately, legislation to this effect has already been introduced by Michigan House member Justin Amash. If this bill makes it to committee or to a floor vote, however, expect furious opposition from police unions and other organizations that have repeatedly opposed any new measures that would increase accountability for government law enforcement.

Indeed, many provisions that are now in effect through the Colorado reform bill have been blocked for years by police organizations in many states. Mandates around police body cams, and “peace officer certification” and other measures have long been opposed on the grounds that their passage would mean police officers would be constantly under suspicion and too constrained in their jobs. In this, we need merely remind the police of the phrase they’ve often used to harangue the taxpayers and other citizens who have protested ever more police power and privacy violations:  “If you’re not doing anything wrong, you have nothing to be afraid of.”

As public health officials argue about whether the US will see the coronavirus death rate return to its deadliest peak back in late April/early May, the CDC just issued a warning claiming that the number of Americans infected with the coronavirus is probably 10x higher than we know.

If accurate, that would mean the total number of cases in the US alone is closer to 20 million. These numbers are based on the results of a few rounds of surveillance testing using antibody-detection tests. While the CDC stands by the numbers, some experts have raised questions about antibody tests and their susceptibility to false positives. However, some rounds of surveillance testing in NY and NYC have found that as many as 1/5 people tested (in NYC) tested positive for antibodies.

Here’s more from Reuters:

Government experts believe more than 20 million Americans could have contracted the coronavirus, 10 times more than official counts, indicating many people without symptoms have or have had the disease, senior administration officials said.

The estimate, from the Centers for Disease Control and Prevention, is based on serology testing used to determine the presence of antibodies that show whether an individual has had the disease, the officials said.

The officials, speaking to a small group of reporters on Wednesday night, said the estimate was based on the number of known cases, between 2.3 million and 2.4 million, multiplied by the average rate of antibodies seen from the serology tests, about an average of 10 to 1.

“If you multiply the cases by that ratio, that’s where you get that 20 million figure,” said one official.

If true, the estimate would suggest the percentage of U.S. deaths from the disease is lower than thought. More than 120,000 Americans have died from the disease since the pandemic erupted earlier this year.

With 20 million infected, the mortality rate in the US of just 0.6%. That would also explain why deaths have continued to plateau, or even trend lower, even as new infections are being diagnosed.  One widely quoted epidemiologist from Harvard, Dr. Eric Feigl-Ding, said he felt the numbers were ‘reasonable’ given his experience with serology testing.

Wow- 10x more #COVID19 than expected: many new cases are showing up in young people who do not exhibit symptoms and may not know they have it.

young people with no symptoms, but in regular contact with vulnerable population, should proactively get tested! https://t.co/fwRwRnVX82

— Eric Feigl-Ding (@DrEricDing) June 25, 2020

2) “We have heard from Florida and Texas that roughly half of the new cases that are reporting are people under the age of 35, and many of them are asymptomatic,” one official said.”

— Eric Feigl-Ding (@DrEricDing) June 25, 2020

3) 10x estimate was based on the number of known cases, between 2.3 million and 2.4 million, multiplied by the average rate of antibodies seen from the serology tests, an average of 10 to 1.

“If you multiply the cases by that ratio, that’s where you get that 20 million figure”

— Eric Feigl-Ding (@DrEricDing) June 25, 2020

4) Though 20-25 million would still be just 6-7.5% of total US population. Nothing suggesting anything approaching the 60% minimum and 75-80% optimal needed for herd. So don’t use this to suggest herd immunity!

— Eric Feigl-Ding (@DrEricDing) June 25, 2020

5) I think this estimate is reasonable. We use serology to estimate flu epidemic as well since we rarely have good testing for flu, but rather serology. It’s not bad news per se. most importantly is the new testing recs for young people regardless of symptoms!

— Eric Feigl-Ding (@DrEricDing) June 25, 2020

Still, as Dr. Feigl-Ding pointed out, these data shouldn’t be used to support the notion that the US has developed high enough levels of ‘herd immunity’ to move forward without a vaccine. As Sweden’s top epidemiologist pointed out just the other week, herd immunity for COVID-19 is something that takes a surprisingly long time to develop. Especially since we don’t know yet whether mutations in the virus will render these anti-bodies, or any forthcoming vaccine, obsolete.

Authored by Charles Hugh Smith via OfTwoMinds blog,

Once you allow your economy to become dependent on extremes of debt, leverage, inequality, legalized looting, monopoly, pay-to-play politics and speculative asset bubbles, a depression is inevitable.

The pandemic lockdown will be blamed for the Greater Depression, but the lockdown only toppled all the dominoes that were already lined up. The lockdown would have been survivable if the economy hadn’t been over-indebted, over-leveraged, burdened by insanely high costs, stripmined by greedy monopolies, dependent on stock market fraud, destabilized by extreme inequality, corrupted by political pay-to-play and addicted to speculation.

The apologists always blame depressions on central banks not printing money fast enough, while overlooking the real drivers: debt, high costs and dependence on speculative bubbles. As noted here many times, revenues and income can quickly slide lower, but debt must be serviced regardless of revenues and income.

Once debt payments dominate expenses, any wobble in revenues / income / cash flow triggers default.

Regarding unbearably high costs that only go higher, year after year: as noted here many times, Sickcare Will Bankrupt the Nation all by itself, never mind soaring higher education / student loan debt serfdom, skyrocketing rents, junk fees, taxes, etc.

U.S. Lifestyle + “Healthcare” = Bankruptcy (June 19, 2008)

How Healthcare Is Dooming the U.S. Economy (Three Charts) (May 2015)

The truth is the cost of living is unaffordable but we can’t even acknowledge this obvious fact because even acknowledging it would threaten the entire house of cards. So instead we play-act as if we believe the bogus “inflation is dead” narratives.

The top 5% technocrat/managerial class have done very well for themselves in the speculative run-up of destabilizing inequality, and since they run the narrative machines, we’re swamped with happy stories about the economy, all of which boil down to this absurd fantasy: since I’m doing so well, everyone else must be doing well, too.

Since the top 5% own the lion’s share of the nation’s productive assets–stocks, bonds, business equity, investment real estate, etc.– the enormous asset bubbles have greatly boosted their wealth and income. This has enabled the wealthy to service their debt or pay it off. The bottom 95% aren’t quite so well-placed to survive a decline in income.

Everyone who was barely keeping their head above water in making their debt payments is already in default or will soon be in default. Since the banks and shadow-banking lenders have gorged on the profits skimmed by loaning huge sums to marginal borrowers, now that these marginal borrowers are defaulting en masse the banks and lenders are about to be crushed by one wave of catastrophic losses after another.

Student loans–already in mass default. Credit cards–the wave is rolling in as we speak. Auto loans–looking like Waimea Bay on a big day. Mortgages–better not to look.

Corporate debt has exploded to unprecedented levels, and this is what will break the financial system. Zombie corporations are rushing to borrow billions of dollars (thanks to the Federal Reserve) but increasing their debt is only doing more of what created their fragility in the first place.

Being able to borrow more to service your old debts is not solvency, it’s merely the semblance of solvency. We’re in the eye of the hurricane right now, as everyone holds their breath and hopes some sort of magic will make all the debt that has to be serviced every month vanish.

It’s worth recalling that every dollar of debt is someone else’s asset and the source of their income. So when the defaults and bankruptcies sweep through the financial system, they’ll obliterate all the “wealth” of those holding bundled student and auto loan securities, mortgage backed securities, corporate bonds, and destroy the income streams these trillions in debt generated.

All the linked fragilities and dependencies of our economy are like lines of dominoes: one default topples the entire line of dominoes of debt, leverage, derivatives, counterparty risk, credit default swaps and most devastating of all, any certainty that borrowers won’t default in the future.

If banks and lenders can’t lend with a high degree of certainty, lending dries up and profits collapse, along with the consumer spending that was enabled by the borrowing.

Despite their high incomes and net worth, some consequential percentage of top 5% households bringing in $300,000 a year are one layoff away from default: never mind their pristine 830 credit score; that was last month. Next month,next quarter, next year–all bets are off.

Once you allow your economy to become dependent on extremes of debt, leverage, inequality, legalized looting, monopoly, pay-to-play politics and speculative asset bubbles, a depression is inevitable. The only question is “when,” and that’s been answered, though nobody wants to hear it: 2020 and beyond.

It didn’t have to end this way. If our leadership / Power Elites had acted to reduce all these painfully obvious speculative extremes, dependencies and fragilities and made even modest efforts to limit the exploitation of predatory parasites that generated unprecedented inequality and corruption over the past 12 years, the economy would have been much less brittle / fragile.

Unfortunately, the pandemic chart I composed on February 2, 2020 is still playing out, increasing uncertainty.

What’s the price of systemic fragility and uncertainty? I fear it will be steeper than we’re prepared to pay.

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A Bronx precinct commander is quitting over the NYPD’s handling of police reform.

NYPD Deputy Inspector Richard Brea, a nearly three-decade veteran of the force, says his bosses have not provided sufficient guidance on how to rid the streets of guns and drugs since the department has disbanded and reassigned its anti-crime unit, according to the New York Post.

Brea’s last day will be Friday.

Guardian Angels leader Curtis Sliwa confirmed Brea’s retirement to The Post Thursday after speaking with the inspector, who leads the Bronx’s 46th Precinct.

On Wednesday, the Captains Endowment Association, which represents Brea, sent a letter saying CompStat should be abolished because it pressured commanders to drum up arrests — or answer to angry bosses at monthly CompStat meetings.

Sliwa says Brea, who was due to present his numbers Thursday, told him: “I’ll be more than happy to come to CompStat and get a beatdown but I’m not getting guidance.” –New York Post

“How am I supposed to lead?” asked Brea, according to Silva. “I’m doing this and others may be following in my footsteps.”

Meanwhile, gun violence has spiked in NYC, according to the New York Times.

The city logged 125 shootings in the first three weeks of the month, more than double the number recorded over the same period last year, police data show. Gunmen opened fire during house parties, barbecues and dice games, and carried out coldly calculated street executions. –NYT

The NYPD has relied on plainclothes “anti-crime units” to patrol for people believed to be carrying illegal firearms on the streets – however they were disbanded by Commissioner Dermot F. Shea last week over complaints and a spate of police shootings.

On Monday, Mayor Bill deBlasio declared “We’re not going back to the bad old days when there was so much violence in the city,” adding “nor are we going back to the bad old days where policing was done the wrong way and, in too many cases, police and community could never connect and find that mutual respect.”

DeBlasio’s comments largely fell on deaf ears after 38 people were shot over a 72-hour period. According to police, there were 166 murders through June 21, up from 134 during the same period last year.

“I have been studying this for a long time. I have never seen that much of an increase ever,” said John Jay College professor Christopher Herrmann, who once analyzed crime stats for the NYPD, and thinks that the increase in shootings is the result of a “combination of warmer weather, Covid cabin fever and the traditional gun violence that we see in June, July and August.”

Bank stocks surged today ahead of what analyst Mike Mayo called “the most high-profile stress test since the financial crisis” thanks to handout on Volcker Rule and swap margin easings and hope for tonight’s Fed release of a data avalanche showing how the top 34 banks would fare in a hypothetical crash (including, for the first time, a pandemic scenario) and whether they will be allowed to execute their dividend plans.

The market is pricing in a modest dividend cut and then flat for the next 12 months…

As The FT reports, ahead of the results, US policymakers, led by Mr Quarles, have gone against the grain in their messaging on dividends, speaking publicly of the importance of continuing payments. European supervisors, by contrast, ordered their banks to halt distributions while economies are ravaged by the pandemic. 

So far, US banks have only voluntarily suspended share buybacks.

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So what did the results say?

The Fed said in a release that big banks will be required to suspend share buybacks and cap dividend payments at their current level for the third quarter of this year. The regulator also said that it would only allow dividends to be paid based on a formula tied to a bank’s recent earnings.

Furthermore, the industry will be subject to ongoing scrutiny: For the first time in the decade-long history of the stress test, banks will have to resubmit their payout plans again later this year.

“While I expect banks will continue to manage their capital actions and liquidity risk prudently, and in support of the real economy, there is material uncertainty about the trajectory for the economic recovery,” Fed Vice Chair Randall Quarles said in a statement.

“As a result, the Board is taking action to assess banks’ conditions more intensively and to require the largest banks to adopt prudent measures to preserve capital in the coming months.”

Bank stocks are not happy…

Wells Fargo and BofA are the worst hit after hours…

Ally Financial and BMO had the lowest common equity tier 1 ratio in the severely adverse scenario:

Discover, Capital One, Barclays, and Amex face the biggest loan losses…

Credit Suisse is the most exposed to losses from Commercial Real Estate…

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Full release

The Federal Reserve Board on Thursday released the results of its stress tests for 2020 and additional sensitivity analyses that the Board conducted in light of the coronavirus event.

“The banking system has been a source of strength during this crisis,” Vice Chair Randal K. Quarles said, “and the results of our sensitivity analyses show that our banks can remain strong in the face of even the harshest shocks.”

In addition to its normal stress test, the Board conducted a sensitivity analysis to assess the resiliency of large banks under three hypothetical recessions, or downside scenarios, which could result from the coronavirus event. The scenarios included a V-shaped recession and recovery; a slower, U-shaped recession and recovery; and a W-shaped, double-dip recession.

In the three downside scenarios, the unemployment rate peaked at between 15.6 percent and 19.5 percent, which is significantly more stringent than any of the Board’s pre-coronavirus stress test scenarios. The scenarios are not predictions or forecasts of the likely path of the economy or financial markets.

In aggregate, loan losses for the 34 banks ranged from $560 billion to $700 billion in the sensitivity analysis and aggregate capital ratios declined from 12.0 percent in the fourth quarter of 2019 to between 9.5 percent and 7.7 percent under the hypothetical downside scenarios. Under the U- and W-shaped scenarios, most firms remain well capitalized but several would approach minimum capital levels. The sensitivity analysis does not incorporate the potential effects of government stimulus payments and expanded unemployment insurance.

In light of these results, the Board took several actions following its stress tests to ensure large banks remain resilient despite the economic uncertainty from the coronavirus event. For the third quarter of this year, the Board is requiring large banks to preserve capital by suspending share repurchases, capping dividend payments, and allowing dividends according to a formula based on recent income. The Board is also requiring banks to re-evaluate their longer-term capital plans.

All large banks will be required to resubmit and update their capital plans later this year to reflect current stresses, which will help firms re-assess their capital needs and maintain strong capital planning practices during this period of uncertainty. The Board will conduct additional analysis each quarter to determine if adjustments to this response are appropriate.

During the third quarter, no share repurchases will be permitted. In recent years, share repurchases have represented approximately 70 percent of shareholder payouts from large banks. The Board is also capping dividend payments to the amount paid in the second quarter and is further limiting them to an amount based on recent earnings. As a result, a bank cannot increase its dividend and can pay dividends if it has earned sufficient income.

The Board also released the results of its full stress test designed before the coronavirus. The results from that test are comparable to the V-shaped downside scenario in the sensitivity analysis, in aggregate, and show that all large banks remain strongly capitalized. The Board will use the results of this test to set the new stress capital buffer requirement for these firms, which will take effect, as planned, in the fourth quarter. Additionally, the Board will not be objecting to five foreign banks whose capital planning practices were evaluated as part of the stress tests.

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Full Results below:

2020-dfast-results-20200625 by Zerohedge on Scribd