Chinese Auto Sales To Face “Big Downward Pressure” In 2020

Chinese Auto Sales To Face “Big Downward Pressure” In 2020

China’s Miao Wei, Minister of Industry and Information Technology, had some bad news for the Chinese auto industry on Monday.

Wei says that the industry still faces “big downward pressure” and he predicted sales of just 25 million units for the year, according to Bloomberg.

Recall, sales for 2019 totaled 25.769 million units. Sales of just 25 million units would mark a third straight year of declines for the world’s largest auto market, should Wei’s prediction come to fruition. 

Source: Marklines 2019 China Auto Data

The MIIT also said it would further study and review its NEV vehicle subsidies. Beijing backing away from these subsidies caused NEV sales to taper off toward the end of 2019, sullying what was an otherwise consistent silver lining for the country, even amidst the overall recession in autos. 

We noted in December that NEV sales plunged 42% in November when Beijing backed away. 

China has said it is going to “maintain support” for NEVs, without getting into too much detail. Miao also said he’s confident that the country will ensure “stable industrial production in 2020” while phasing out “zombie firms”. 

As we noted days ago, passenger car vehicle sales in China fell yet again in December, plunging 3.6% to 2.17 million units, according to the China Passenger Car Association. 

This marks the 18th drop in the past 19 months for the country, which feels to be single-handedly spearheading a global recession in the industry. For the full year, sales in China declined 7.5%, marking the second straight annual decline. 


Tyler Durden

Thu, 01/23/2020 – 13:00

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

World Economic Forum Debuts Framework For Central Bank Digital Currency

World Economic Forum Debuts Framework For Central Bank Digital Currency

Authored by Adrian Zmudzinksi via CoinTelegraph.com,

The World Economic Forum (WEF) – together with some of the world’s major central banks – has created a central bank digital currency (CBDC) policymaker toolkit.

image courtesy of CoinTelegraph

According to an announcement  on Jan. 22, the toolkit is the WEF’s attempt to help policy-makers understand whether deploying a CBDC would be advantageous and guide them through its design.

The WEF collaborated with regulators, central bank researchers, international organizations and experts from over 40 institutions to develop the framework. The head of blockchain and distributed ledger technology (DLT) at the World Economic Forum Sheila Warren explained:

“Given the critical roles central banks play in the global economy, any central bank digital currency implementation, including potentially with blockchain technology, will have a profound impact domestically and internationally.

[…]

It is imperative that central banks proceed cautiously, with a rigorous analysis of the opportunities and challenges posed.”

Bank of Thailand Governor Veerathai Santiprabhob said that the institution made good progress on its own CBDC implementation, called Project Inthanon. Recently, reports started circulating that Hong Kong and Thailand’s central banks have stepped closer to implementing a joint CBDC for cross-border payments. He explained how the toolkit is useful for the continued development of the bank’s digital currency:

“From our experience, we need to identify tradeoffs between benefits from the use cases and their associated risks across different dimensions. This is where the Policymaker Toolkit could usefully provide an actionable framework for CBDC deployment.”

Central Bank of Bahrain Governor Rasheed M. Al Maraj announced that the institution that he is guiding will pilot the WEF’s toolkit, saying, “We hope that it will be an opportunity to learn, grow and to adapt to the changes in the Fourth Industrial Revolution.”

The pros and cons of a digital currency

The framework recognizes that a CBDC — among other things — can improve the cost and speed efficiencies of cross-border interbank payments, as well as reduce settlement and counterparty risks. The WEF notes that a digital currency can also enhance financial data transmission and reporting, and improve traceability compared to physical cash.

The paper admits that, before considering a CBDC, other solutions to economic friction should be considered. A digital currency may not add value in domestic interbank payments where an efficient system is already present.

The toolkit also notes that digital currency implementation requires substantial investments in cybersecurity and system resilience, and that potential risks come along with it:

Generates substantial financial risks, including: 1) bank disintermediation risk, which could reduce bank profits and lending activity; 2) digital‐bank‐run risk as depositors may rapidly convert commercial bank deposits to CBDC.”

Toolkit distinguishes between different types of CBDCs

The WEF’s framework divides CBDCs into three categories: retail, wholesale and hybrid. The first category allows non-financial users to hold digital currency accounts, while the second is an electronic system granting access to the central bank reserve that could be used by commercial banks and other financial institutions for interbank and security transactions.

Hybrid CBDCs allow financial institutions that do not usually have access to a central bank deposit facility to hold reserves at it. This would enable stronger safeguards and monitoring of those organizations and improve interoperability between different payment systems, according to the WEF. 

The paper explains that in the case of a DLT-based CBDC, the central bank would preserve full control over the issuance of the digital currency:

“[The central bank] could delegate transaction approval to a more decentralized network, most likely consisting of regulated financial institutions. Transaction approval could follow a pre‐specified consensus process determined by the central bank, which could include privileges for the central bank such as transaction ‘veto’ powers or visibility. It is also possible to develop a DLT system in which the central bank remains the only validating node yet it benefits from other advantages related to DLT.”

The impact of stablecoins on CBDC development

Global efforts and discussions around CBDC development are increasingly common. Many believe that stablecoins — and Facebook’s Libra in particular — served as a wake-up call for central banks to realize that in the digital age the public expects cheap and instant digital payments.

Earlier this month, the president of the European Central Bank, Christine Lagarde, also said that she supports the bank’s active involvement in the development of a CBDC, particularly in addressing the demand for faster and cheaper cross-border payments.


Tyler Durden

Thu, 01/23/2020 – 09:50

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Pro Bono M.D. Pa. Local Counsel for a Fun First Amendment / Unsealing Case?

There’s an interesting First Amendment challenge to a state teacher complaint secrecy statute (see Doe v. Governor (3d Cir. 2019))—but the entire case in the Middle District of Pennsylvania is sealed, so people can’t monitor what’s happening in the challenge. (The Third Circuit decision I linked to gives a peek at what’s going on, as do some unsealed documents in the Third Circuit docket, but many past and all future filings in the District Court are inaccessible.)

My students and I plan on filing a motion to intervene and unseal, on behalf of the Pennsylvania Center for the First Amendment and perhaps a couple of other parties. I think we’re on top of both the legal arguments and the procedures for District Courts (I’ve filed in several District Courts throughout the country), but we need someone who is willing to act as pro bono local counsel. Anyone interested? If so, please let me know.

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Bill Miller’s Hedge Fund Returns 120% In 2019, Up 60% In Q4

Bill Miller’s Hedge Fund Returns 120% In 2019, Up 60% In Q4

Bill Miller’s reputation as the world’s most procyclical, beta-levered investor received a straight-to-the-heart injection of epinephrine after a stellar return in 2019, when his fund, Miller Value Partner 1, soared 120% according to an investor letter seen by Bloomberg News. This means that while Miller’s hedge fund uses one to three times leverage on its investments, in 2019 it cranked this up to about 4x (the S&P returned just shy of 30% last year); it explains why his fund nearly blew up in the aftermath of the Lehman crisis.

Predictably, about half of the returns was due entirely thanks to the Fed, with the Fund returning 60% in just the fourth quarter when the Fed resumed not only hundreds of billions of repo operations but also launched QE4 to boost stock prices fix the repo market. The top performers were ADT, Flexion Therapeutics and Teva.

Miller Opportunity Trust, a mutual fund with $1.7 billion in assets, was up about 34% last year. It rose about 19% in the fourth quarter​​.

In the first half of 2019, Miller returned 46%, thanks largely to Amazon and Bitcoin: his top positions are Amazon.com and ADT Inc., the security system company that plummeted in March on a weaker-than-expected earnings outlook. Bullish wagers on Bitcoin and Avon Products Inc. also led his gains through the first half. Miller has long been a fan of the cryptocurrency. It reached an 18-month high in June, surging above $13,000. In May, Avon agreed to be acquired by rival beauty-care company Natura Cosmeticos SA. It has returned 155% through June 30.

“In the 4th quarter, we did our favorite thing to do in markets: nothing,” Miller wrote in the letter, dated Jan. 15 according to Bloombnerg. “No new names and no elimination of holdings from the portfolio. This doesn’t happen as often as it probably should.”

Miller may have done nothing, but the Fed did “something”: it injected $100BN in liquidity every month, which was enough to send stocks 30% higher for 2019, a year when earnings declined and more than 100% of the upside was due to multiple expansion.

Looking ahead Miller sees stocks moving higher though not in a straight line even if the bull market continues “as I believe it will.” As of press time, the Fed has not responded to a request for comment if it will guarantee stocks continue to “move higher.”


Tyler Durden

Thu, 01/23/2020 – 12:26

via ZeroHedge News https://ift.tt/2NUTYk9 Tyler Durden

Is Impeaching Some “Normal” Politicians too High a Price to Pay for Getting Rid of Presidents who Abuse their Power?—A Rejoinder to Josh Blackman

In a thoughtful recent post, co-blogger Josh Blackman takes issue with part of my earlier post criticizing the “slippery slope” argument against impeaching presidents for abuse of power. In the original post, I made the point that:

In criminal cases, there is good reason to avoid conviction unless the charge against the accused is an offense clearly delineated by law, and guilt has been proven beyond a reasonable doubt. The reason why is that the defendant stands to lose her liberty or property—or even her life. By contrast, the risk facing an impeached president is removal from a position of enormous power.

Unlike unjust deprivation of life, liberty, or property, removal from power doesn’t violate anyone’s human rights. When real human rights are at stake, it may make sense to allow ten guilty people to go free, in order to save even one innocent from conviction. When it comes to positions of power, almost the opposite is true: Removing ten “normal” politicians is more than justified if that is the only way to get rid of one who engages in grave abuses of power.

Josh does not agree:

Ilya thinks it is justified to remove “ten ‘normal'” Presidents to “get rid of one who engages in grave abuses of power.” In more than two centuries, we have had only 44 Presidents (45 if you count Cleveland twice). If Ilya’s standard is correct, then it would have been appropriate to remove nearly a quarter of American Presidents. Every generation would have at least one convicted President. To get Trump, would it be worth it to remove the prior nine presidents:  Johnson, Nixon, Ford, Carter, Reagan, Bush, Clinton, Bush, and Obama (well, exclude Nixon, and perhaps Clinton)? Ilya’s “n guilty men” standard may make more sense for lower-ranking officials. Their removals do not alter the arc of history. But the President cannot be considered a “‘normal’ politician.” Indeed, removing any one of these Presidents would have altered the Republic in ways I cannot fully articulate. I do not agree with Ilya that such an over-inclusive approach would be justified. Such avulsive changes would tear at the fabric of our country on a quadrennial basis.

There are several problems with Josh’s argument. First, as he acknowledges, his approach has a “perverse consequence” in so far as “it would be easier to remove lower-level officers, whose powers may be relatively insignificant, but harder to remove the President, who personally wields ‘the executive power.'”

This asymmetry isn’t just perverse in consequentialist terms, it is also unconstitutional. The Impeachment Clause establishes a single  standard for removal for the “President, Vice President and all civil Officers of the United States.” All can be ousted from power for committing “Treason, Bribery, or other high Crimes and Misdemeanors.” Extensive historical evidence indicates that this standard covered serious noncriminal abuses of power, as well as violations of specific laws and statutes. For helpful summaries of the relevant evidence, see recent analyses by Gene Healy of the Cato Institute, prominent conservative legal scholar Michael Stokes Paulsen (here, here, and here), and Keith Whittington. The Framers could have easily created a special, separate standard to protect the President. But they obviously chose not do so.

Josh also ignores a crucial way in which removing presidents does not“alter the arc of history.” As I noted in my original post, a removed president will almost always be succeeded by his or her own hand-picked vice president, who is a member of the same party and likely to be committed to a similar policy agenda on most issues. Removing the abusive president will likely put an end to whatever abuses led to impeachment, but would not lead to significantly divergent policies across the board.

Josh further ignores the dynamic effects of a strong norm of impeachment and removal for abuses of power. As also noted in my post, in that world presidents will live in greater fear of impeachment than they do now, and will be more likely to shy away from actions that could be considered abuses. That strikes me as a valuable constraint on power, especially in a world where the president wields enormous discretionary authority and often has strong incentives to overreach in order to advance his political interests and push through his party’s agenda.

Of course, any such deterrent effect will be constrained by the fact that removal requires a 2/3 majority in the Senate, which will necessitate support from many senators from the president’s own party. In practice, that will rarely be achieved. Therefore, Josh’s fear that presidents are likely to be removed for “acting like a politician” is misplaced.

Indeed, the supermajority requirement often shields even presidents who have committed very serious abuses of power and violations of the law. But the threat of impeachment for abuse of power can still create a useful marginal deterrent effect, even if a modest one.

I do agree with Josh’s point that, under my approach, a good many past presidents deserved impeachment and removal. That strikes me as a feature, not a bug. All too many past presidents have gotten away with horrific illegality and abuses of power, such as FDR’s internment of Japanese-Americans in concentration camps, Woodrow Wilson’s massive violations of civil liberties, and—most recently—Obama’s starting two wars without congressional authorization, and Trump’s cruel family separation and travel ban policies. Establishing stronger deterrents against these sorts of abuses could indeed, as Josh puts it, lead to “avulsive changes.” Some normal politicians might also suffer in the process, if they too get impeached. If so, I say let the avulsion begin!

It is also worth noting that Josh is wrong to suggest that Trump’s actions amount to just “acting like a politician.” Jonathan Adler explains some of flaws in that characterization. In addition, Trump’s withholding of military aid from Ukraine in order to pressure them to help his reelection campaign also violated both the Constitution and federal criminal law. The Democrats would have done well to emphasize these points far more than they have, though the articles of impeachment against Trump are drafted broadly enough to include these points.

That said, I do not believe that impeachment can be the only or even the primary strategy for curbing abuses of presidential power. We need multiple safeguards.  They should include more forceful assertion of congressional prerogatives, a crackdown on unconstitutional delegation of power to the executive, and stronger and less deferential judicial review of executive action, including in the areas of immigration and national security policy, where both Trump and past presidents have committed some of their worst abuses.

The latter is actually another area where Josh and I differ. In addition to favoring a narrow view of appropriate grounds for impeachment, he also supports very broad deference judicial  to the president in a wide range of areas. Both of these positions are problematic. But, if adopted in combination, they are more dangerous than either would be alone, as the combination would simultaneously disable multiple constraints on presidential power, preventing one from picking up the slack left over from the erosion of the other.

Josh is a former student of mine, and one of the nation’s most impressive young legal scholars. Few legal academics have achieved so much so early in their careers. But he does, I think, sometimes go wrong on issues of executive power. Perhaps, as Mr. Miyagi  put it, there is “no such thing as bad student, only bad teacher.”  If so, the ultimate fault here is mine. Maybe this post will help remedy it!

 

 

 

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Not Ready For Economic Collapse: Only 41% Of Americans Have $1000 To Cover An Emergency

Not Ready For Economic Collapse: Only 41% Of Americans Have $1000 To Cover An Emergency

Authored by Michael Snyder via TheMostImportantNews.com,

We better hope that the U.S. economy holds together in 2020, because if there is any sort of major economic crisis much of the country is going to be broke almost immediately. Today, close to half of all Americans are living on the edge financially. For many, it is out of necessity, but for others it is a conscious choice. Way too many people out there see no need to build up a substantial financial cushion because they have a tremendous amount of faith in the system. They don’t think that things will ever get too bad in this country, and so there is no urgency to put funds away for a rainy day. But even if authorities could somehow prevent an economic downturn from ever happening again, individual emergencies are taking place all around us on a constant basis. Cars break down, people get sick, and accidents happen. Unfortunately, most Americans are completely unprepared for some sort of an emergency to strike.

In fact, a brand new survey has discovered that just 41 percent of Americans could cover a $1,000 emergency expense using their current savings…

Bankrate’s January Financial Security Index survey reveals that just four in 10 U.S. adults (41 percent) would cover the cost of a $1,000 car repair or emergency room visit using savings. The findings echo what previous Bankrate studies and others — including the Federal Reserve and the Pew Charitable Trusts — have found about Americans’ lack of rainy-day savings.

So where would everyone else get the money for an emergency?

Well, most of them would either borrow the money or get it from a relative.

And usually an emergency costs a lot more than $1,000. Here is more from the Bankrate survey

Emergencies often aren’t cheap. Among survey respondents who said they or their family members dealt with an unexpected expense in the past 12 months, the median amount of the largest expense was $1,750.

Three in 10 adults (29 percent) said they or their family members spent at least $5,000 in the past year to cover an unanticipated cost.

The bottom line is that most of the country is living paycheck to paycheck, and most Americans are just one small step away from financial disaster.

Back in 2008, millions of Americans suddenly lost their jobs, and because so many of them were living on the edge financially a lot of them suddenly couldn’t pay their mortgages.

You would think that we would have learned something from that very painful experience, but we didn’t.

So we better hope that the U.S. economy remains relatively stable, because a serious downturn would be very ugly.

Unfortunately, an increasing number of experts are warning that our luck is about to run out. In fact, the head of the IMF recently warned that we could potentially be facing another “Great Depression”

The head of the International Monetary Fund has warned that the global economy risks a return of the Great Depression, driven by inequality and financial sector instability.

Speaking at the Peterson Institute of International Economics in Washington, Kristalina Georgieva said new IMF research, which compares the current economy to the “roaring 1920s” that culminated in the great market crash of 1929, revealed that a similar trend was already under way.

That certainly doesn’t sound good at all.

Here in the United States, most people have been choosing to ignore all the signs that the economy is starting to really slow down.

But as stores and businesses continue to close down all over the nation, it is going to become very difficult to ignore all of the empty buildings.

For example, Macy’s just announced that they will be closing nearly 30 stores

Macy’s is closing roughly more than two dozen stores as troubles mount for the storied retailer.

The company confirmed to CNN Business that it’s shuttering 28 Macy’s locations and one Bloomingdale’s location in the coming months. Closures affect locations in several states, including Florida, California and Georgia, according to lists compiled from various media reports.

And one of the most prominent mall retailers in the entire country has just announced that they will be closing 91 stores

Fashion retailer Express plans to close 91 stores as part of a “fleet rationalization” after a sales slump during the holidays.

The move comes amid a rash of store closures following the holiday shopping season.

Of course I could go on and on all day. Here are just a couple more examples of major retailers that are closing down stores

Bed Bath & Beyond is closing 60 locations, with the list being revealed Tuesday. And Schurman Retail Group plans to close its Papyrus and American Greetings stores, totaling about 254 locations, within the next four to six weeks.

But despite all of the evidence to the contrary, the irrational optimists would still have us believe that America has entered a new era of tremendous economic prosperity.

I actually wish that was true.

Sadly, decades of exceedingly bad decisions are catching up with us in a major way, and instead of changing course we continue to steamroll toward a date with destiny.

Right now I am going to share with you the number one piece of advice that I give to everyone who asks about preparing for the great storm that is ahead.

Build up a financial cushion.

When things get bad, you are going to need money.

I know that sounds exceedingly simple, but obviously most of the country is choosing not to do this.

Instead, most of the country is surviving from month to month with barely any money in their bank accounts, and so when disaster strikes they are going to be looking for someone else to rescue them.

We have had more than a decade since the crisis of 2008 to prepare for the next one, but most people are acting as if the next one will never arrive.

Unfortunately, the truth is that the next crisis has already started, and businesses all over the nation are going bankrupt.

But most Americans won’t realize what is happening until things really start getting out of hand, and by then it will be far too late to make any sort of preparations.


Tyler Durden

Thu, 01/23/2020 – 12:04

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

Is Impeaching Some “Normal” Politicians too High a Price to Pay for Getting Rid of Presidents who Abuse their Power?—A Rejoinder to Josh Blackman

In a thoughtful recent post, co-blogger Josh Blackman takes issue with part of my earlier post criticizing the “slippery slope” argument against impeaching presidents for abuse of power. In the original post, I made the point that:

In criminal cases, there is good reason to avoid conviction unless the charge against the accused is an offense clearly delineated by law, and guilt has been proven beyond a reasonable doubt. The reason why is that the defendant stands to lose her liberty or property—or even her life. By contrast, the risk facing an impeached president is removal from a position of enormous power.

Unlike unjust deprivation of life, liberty, or property, removal from power doesn’t violate anyone’s human rights. When real human rights are at stake, it may make sense to allow ten guilty people to go free, in order to save even one innocent from conviction. When it comes to positions of power, almost the opposite is true: Removing ten “normal” politicians is more than justified if that is the only way to get rid of one who engages in grave abuses of power.

Josh does not agree:

Ilya thinks it is justified to remove “ten ‘normal'” Presidents to “get rid of one who engages in grave abuses of power.” In more than two centuries, we have had only 44 Presidents (45 if you count Cleveland twice). If Ilya’s standard is correct, then it would have been appropriate to remove nearly a quarter of American Presidents. Every generation would have at least one convicted President. To get Trump, would it be worth it to remove the prior nine presidents:  Johnson, Nixon, Ford, Carter, Reagan, Bush, Clinton, Bush, and Obama (well, exclude Nixon, and perhaps Clinton)? Ilya’s “n guilty men” standard may make more sense for lower-ranking officials. Their removals do not alter the arc of history. But the President cannot be considered a “‘normal’ politician.” Indeed, removing any one of these Presidents would have altered the Republic in ways I cannot fully articulate. I do not agree with Ilya that such an over-inclusive approach would be justified. Such avulsive changes would tear at the fabric of our country on a quadrennial basis.

There are several problems with Josh’s argument. First, as he acknowledges, his approach has a “perverse consequence” in so far as “it would be easier to remove lower-level officers, whose powers may be relatively insignificant, but harder to remove the President, who personally wields ‘the executive power.'”

This asymmetry isn’t just perverse in consequentialist terms, it is also unconstitutional. The Impeachment Clause establishes a single  standard for removal for the “President, Vice President and all civil Officers of the United States.” All can be ousted from power for committing “Treason, Bribery, or other high Crimes and Misdemeanors.” Extensive historical evidence indicates that this standard covered serious noncriminal abuses of power, as well as violations of specific laws and statutes. For helpful summaries of the relevant evidence, see recent analyses by Gene Healy of the Cato Institute, prominent conservative legal scholar Michael Stokes Paulsen (here, here, and here), and Keith Whittington. The Framers could have easily created a special, separate standard to protect the President. But they obviously chose not do so.

Josh also ignores a crucial way in which removing presidents does not“alter the arc of history.” As I noted in my original post, a removed president will almost always be succeeded by his or her own hand-picked vice president, who is a member of the same party and likely to be committed to a similar policy agenda on most issues.

He further ignores the dynamic effects of a strong norm of impeachment and removal for abuses of power. As also noted in my post, in that world presidents will live in greater fear of impeachment than they do now, and will be more likely to shy away from actions that could be considered abuses. That strikes me as a feature rather than a bug, especially in a world where the president wields enormous discretionary authority and often has strong incentives to overreach in order to advance his political interests and push through his party’s agenda.

Of course, any such deterrent effect will be constrained by the fact that removal requires a 2/3 majority in the Senate, which will necessitate support from many senators from the president’s own party. In practice, that will rarely be achieved. Therefore, Josh’s fear that presidents are likely to be removed for “acting like a politician” is misplaced.

Indeed, the supermajority requirement often shields even presidents who have committed very serious abuses of power and violations of the law. But the threat of impeachment for abuse of power can still create a useful marginal deterrent effect, even if a modest one.

I do agree with Josh’s point that, under my approach, a good many past presidents deserved impeachment and removal. That strikes me as a feature, not a bug. All too many past presidents have gotten away with horrific illegality and abuses of power, such as FDR’s internment of Japanese-Americans in concentration camps, Woodrow Wilson’s massive violations of civil liberties, and—most recently—Obama’s starting two wars without congressional authorization, and Trump’s cruel family separation and travel ban policies. Establishing stronger deterrents against these sorts of abuses could indeed, as Josh puts it, lead to “avulsive changes.” Some normal politicians might also suffer in the process, if they too get impeached. If so, I say let the avulsion begin!

It is also worth noting that Josh is wrong to suggest that Trump’s actions amount to just “acting like a politician.” Jonathan Adler explains some of flaws in that characterization. In addition, Trump’s withholding of military aid from Ukraine in order to pressure them to help his reelection campaign also violated both the Constitution and federal criminal law. The Democrats would have done well to emphasize these points far more than they have, though the articles of impeachment against Trump are drafted broadly enough to include these points.

That said, I do not believe that impeachment can be the only or even the primary strategy for reigning in abuses of presidential power. We need multiple safeguards.  They should include more forceful assertion of congressional prerogatives, and stronger and less deferential judicial review of executive action, including in the areas of immigration and national security policy, where both Trump and past presidents have committed some of their worst abuses.

This is actually another area where Josh and I differ. In addition to favoring a narrow view of appropriate grounds for impeachment, he also supports very broad deference judicial  to the president in a wide range of areas. Both of these positions are problematic. But, if adopted in combination, they are more dangerous than either would be alone, as the combination would simultaneously disable multiple constraints on presidential power, preventing one from picking up the slack left over from the erosion of the other.

Josh is a former student of mine, and one of the nation’s most impressive young legal scholars. Few legal academics have achieved so much so early in their careers. But he does, I think, tend to go wrong on issues of executive power. Perhaps, as Mr. Miyagi  put it, there is “no such thing as bad student, only bad teacher.”  If so, the ultimate fault here is mine. Maybe this post will help remedy it!

 

 

 

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Doomsday Clock Hits 100 Seconds To Midnight As Viral Pandemic Sweeps Globe

Doomsday Clock Hits 100 Seconds To Midnight As Viral Pandemic Sweeps Globe

Stocks may have bounced off their session lows as Beijing moves to quarantine virtually the entire province of Hubei. Of course, anybody who seriously believes that China has the latest coronavirus outbreak “under control” is about to be seriously disappointed, as public health experts around the world warn that it’s already too late.

In recognition of this disappointing but undeniable fact, the Bulletin of Atomic Scientists announced on Thursday that their infamous Doomsday Clock is now positioned at 100 seconds to midnight. This is tantamount to the clock’s most dire warning since 1953, during the depths of Cold War nuclear paranoia.

The head of the bulletin explained the organization’s decision during a press conference on Thursday, according to Fox.

“We argued that the global situation was abnormal,” Rachel Bronson, president and CEO of the Bulletin of Atomic Scientists, said during the press conference of the decision to keep last year’s Clock the same, but noted that nuclear and climate situations are “worsening.”

Astrophysicist Robert Rosner, who also sits on the organization’s board,  said “the fact that the clock is now a mere 100 seconds from midnight signals really bad news. What we said last year is now a disturbing reality in that things are not getting better.”

Despite all of the left’s hysterical complaints about the depredations of the Trump Administration, the clock remained at 2 minutes to midnight for all of 2019, though board members warned that this shouldn’t be taken as a sign of stability. Instead, it’s “a stark warning to leaders and citizens around the world,” Bronson said.

Given the hostilities with Iran and the latest global coronavirus outbreak, it’s hardly surprising that the board decided to adjust the clock’s position during its most recent meeting.

Echoing former President Obama and other liberals, Rosner complained that the public’s lack of discerning judgment when it comes to differentiating truth from falsehood has placed humanity in jeopardy.

“Past experience has taught us that even in the most dismal periods of the Cold War, we can come together. It is high time we do so again.”

The doomsday clock, which was designed to warn of impending disasters, particularly of the nuclear variety, it takes into account increases in tensions globally, as well as other factors like – shocker – climate change.


Tyler Durden

Thu, 01/23/2020 – 11:35

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

2019 Is 5th Consecutive Year With No Operating Profit Growth

2019 Is 5th Consecutive Year With No Operating Profit Growth

Submitted by Joe Carson, former Chief Economist & Director of Global Economic Research for Alliance Bernstein

2019 operating profits will show no growth for the 5th consecutive year. That would mark the longest stretch of no earnings growth since the late 1990s. Prospects for 2020-profit growth look slim as well given consensus GDP growth estimates of around 2%, slow global growth and rising costs pressure from labor.

Operating Profits

Q4 GDP and the full year 2019 operating profit numbers will not be released until March, but one can derive an early estimate based on available data.

For example, operating profits plus personal income are the counterpart on the income side to Nominal GDP. To be sure, the two sources of income consistently sum to total that almost matches Nominal GDP, with a residual of no more than 3% to 4% in recent years.

In Q4, published data on personal income data and GDP Now growth estimates from the Federal Reserve Banks provide enough information (two of the three key data points) to guesstimate a figure on operating profits.

Based on the available information, Q4 operating profits are estimated be $2,100 billion, up about 1% when measured against the Q3 2019 reported number of $2,078 billion and a bit less than 1% against the Q4 2018 profit figure of $2,086 billion.

Assuming the Q4 operating profits is close to the mark overall 2019 operating profits would come in at $2,065 billion, a little below the $2,075 level for 2018, and well below the cycle high 2014 profit figure of $2,120.

To be fair, these estimates are based on an early set of data, and a little more GDP growth or a small change in the personal income+profit-ratio to GDP could swing the final numbers Q4 profits higher or lower. It would take an additional $40 billion in Q4 profits—above the $2,100 billion estimate– for the calendar 2019 profits to match the level of 2018. That’s well within the potential range of estimates. However, it would take $300 billion more in Q4 profits for the calendar 2019 profits to match the 2014 profit level— that is far beyond the range of possible outcomes.

In the final analysis, 2019 will mark the 5th consecutive year that overall operating profits will show no growth from the prior year. Also, profit growth estimates for 2020—mid-single digits– look to be too high for the simple reason operating profit margins (already off 400-500 basis points from their highs) are being squeezed by rising labor costs and during the later stages of a business cycle operating profits tend to grow less than Nominal GDP.


Tyler Durden

Thu, 01/23/2020 – 11:18

via ZeroHedge News https://ift.tt/2vha0yi Tyler Durden

Congress Passed a New North American Trade Pact but Failed To Limit Trump’s Tariff Powers

The newly passed North American trade deal has some serious flaws, but the agreement’s passage through Congress is a welcome sign that there will be greater stability for companies doing business across the continent.

At least until President Donald Trump lashes out again.

In approving the new United States–Mexico–Canada Agreement (USMCA) last week, Congress missed an opportunity to put some much-needed limits on the president’s unilateral authority to issue tariffs for specious “national security” reasons. That’s despite the fact that prominent Senate Republicans repeatedly signaled their intention to use the USMCA as an opportunity to attach provisions that would prevent presidents from taking brash actions to raise trade barriers, as Trump did in March 2018 when he suddenly slapped new tariffs on imported steel and aluminum.

Those tariffs were imposed by invoking Section 232 of the Trade Expansion Act of 1962, which grants presidential authority to quickly impose tariffs on national security grounds. Pretty much everyone besides Ron Vara agrees that imported aluminum and steel are not threats to American national security, so Trump’s actions served mostly to highlight the vast powers presidents have to dictate the terms of trade.

“I’m certainly not confident that the USMCA prevents the president from taking other actions that could undermine the trading relationship with our two largest trading partners,” says Inu Manak, a research fellow for trade policy at the Cato Institute.

Start with what’s missing from the deal itself, Manak says in a recent episode of the Cato Daily Podcast. The deal does not grant Canada and Mexico an exemption from future Section 232 tariffs—though it did grant a partial exemption to the existing steel and aluminum tariffs. But Trump has repeatedly talked about imposing similar “national security” taxes on cars imported from Europe or Mexico, bringing the idea up again just this week while meeting with world leaders in Davos, Switzerland.

“So the president could technically still impose tariffs on Canada and Mexico on other issues that he thinks are a concern for national security,” Manak says. “At the end of the day, there’s still a lot of uncertainty left over, and a lot of leeway for the president to do what he wants.”

This issue goes beyond Trump. In the first 54 years that Section 232 was on the books, presidents had invoked its powers only six times. Trump’s repeated use of it to reshape global trade is effectively redefining the law’s powers away from concerns about national security and turning Section 232 into just another tool for presidents to make policy.

That’s one reason some members of Congress—mostly Republicans, but some Democrats too—have been wary about Trump’s unilateral tariffs. Even the ones who don’t disagree with what he’s doing worry about what might happen when someone else is in the White House.

For a long time, it looked like Sen. Chuck Grassley (R–Iowa) was willing to play hardball with Trump to limit presidential tariff power. Grassley chairs the Senate Finance Committee, which handles trade issues, and he threatened to block Trump’s USMCA deal unless the White House lifted the tariffs on steel and aluminum from Mexico and Canada. Trump backed down.

Grassley also said repeatedly that he was considering legislation to stop Trump’s abuse of Section 232. “Congress has delegated too much authority to the president of the United States,” Grassley told reporters in June. “This is not about Trump. It’s about the balancing of power.”

By late August, Grassley was saying the Senate Finance Committee would soon consider two bills to limit Trump’s Section 232 powers: the Bicameral Congressional Trade Authority Act, sponsored by Sens. Pat Toomey (R–Penn.) and Mark Warner (D–Va.), and the Trade Security Act, sponsored by Sens. Rob Portman (R–Ohio) and Doug Jones (D–Ala.).

The Toomey-Warner bill is the better of the two. It would give Congress the ability to block future tariffs imposed under Section 232, limit the the definition of “national security” in the law, and require the Pentagon to sign off on the tariff declaration—as opposed to the Commerce Department, which handles it now. Congress would have 60 days to review and vote on any proposed Section 232 tariffs.

The Portman-Jones bill would require Congress to pass a resolution disapproving of a tariff in order to revoke it, while Toomey-Warner would require congressional assent before tariffs could be imposed. This would essential force Congress to be part of the discussion, removing the possibility that a do-nothing legislature would allow a president to act unilaterally.

By November, it was becoming clear that Trump’s USMCA would pass through Congress without reforms to Section 232. Grassely, in remarks given on the Senate floor, said the reforms had been delayed by “stakeholders who are profiting from tariff protection” and colleagues who don’t want to upset Trump.

Earlier this month, Politico reported that Grassley still sees Section 232 reforms as a top priority for 2020. But in passing the USMCA without adding limits to Section 232, Congress may have given away its best leverage to force changes. After all, Trump can veto whatever bill might eventually pass—and if Grassley is having this much difficulty simply getting some reforms out of his committee, it’s unlikely there is enough support to override a presidential veto.

That is how presidential power expands. Congress delegates poorly. Presidents gradually ignore limits on how their power can be used. Then they pass along an aggrandized executive branch to the next guy (or girl) in line.

Congressional Republicans may regret their passive response to Trump’s Section 232 abuses when a President Sanders or Warren imposes tariffs for his or her own protectionist reasons—or to fight emissions, as some on the left are already suggesting. But they’ll only have themselves to blame.

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