The Impeachment End Game

The question of whether we will hear testimony from any of the people in Trump’s inner circle appears to have become the hinge on which the entire impeachment process is poised.

If you think about it, it is astonishing—bizarre, really—that we may well reach the end of this entire process without having heard from any of the people in a position to know the answer to the question: what was Trump doing, and why was he doing it?

There are two competing narratives regarding this question: the “Fighting Corruption” narrative and the “Digging Up Dirt” narrative.  In the former, he was doing what presidents often do: dangling a carrot or two (military assistance, a White House meeting) in front of a foreign leader in order to push that leader to take some steps that the president believes to be in the interest of the U.S. (fighting corruption, spending the money we give them judiciously). In the “Digging Up Dirt” narrative, he was dangling the carrots not to advance the interests of the U.S.—indeed, quite possibly in opposition to the national interest—but to inflict damage on his political opponents and thereby advance his own electoral prospects in 2020.

Most reasonable people, I think, would agree that Fighting Corruption is not an abuse of presidential power, but that Digging Up Dirt is. It follows that it is of exceeding importance that we find out which of the narratives is closer to the truth.

Now, let’s pretend that we really and truly want to know which narrative is closer to the truth. If we really and truly want to know what the President was up to and why, we would surely want to hear from those in a position to provide evidence about that, evidence gleaned from their first-hand knowledge of the President’s words and deeds. E.g., Messrs. Bolton, Pompeo, Mulvaney, and Giuliani. And, of course, from the President himself, under oath.

Yet here we are. If Mitch McConnell can hold the Senate Republicans together, we—and by “we” I mean the American people—will have heard from none of them, under oath, about any of this.

How we reached this ridiculous and sorry state of affairs goes something like this. The President publicly ordered his subordinates [here] “not to participate in [the House’s] partisan and unconstitutional inquiry.” Several senior Executive Branch officials publicly announced that they would obey that White House command, and that they would therefore not comply with any House requests (by subpoena or otherwise) for documents or live testimony, unless and until they were directed to do so by a final order of a federal court. House Democrats then made the decision not to take that question to the courts, on the stated ground that the process of obtaining a final judicial determination would take too long, and would push the hearings back into the midst of the 2020 election season.

I wasn’t at all sure, at the time, that this was the right decision—at least, if “the right decision” means “the decision most likely to help resolve the question of what Trump did and why he did it”—and I’m still not sure. I’m not convinced that the process of obtaining a prompt judicial determination on the question of the validity of a House subpoena would necessarily have been so prolonged.  The President’s legal position—that members of the Executive Branch are categorically immune from any compulsion to testify in an impeachment inquiry, at least whenever the President declares that proceeding “partisan and unconstitutional”—is very weak. It has virtually no support in the legal precedents (if you don’t believe me, go back and read White House Counsel Cippolone’s letter and find, if you can, the legal arguments contained therein); it is contrary to a number of Supreme Court precedents that, while not squarely on point, run in very much in spirit in the opposite direction; and it would, if accepted by the courts, effectively excise the impeachment remedy for presidential misconduct from the Constitution going forward, for without the ability to obtain testimony from those individuals carrying out a president’s orders, how will we ever be able to obtain evidence of presidential misdeeds? I don’t see why, in a case of great national importance where time is of the essence, the federal courts could not have disposed of the matter relatively quickly on an expedited basis without having to spend an inordinate amount of time resolving the question.

But that didn’t happen, and it is, at this point, water under the bridge. The House Democrats made the decision to base their case on the evidence provided by more subordinate officials, individuals who were not in a particularly strong position to say what the President’s involvement or motives might have been. That weakened, I think, the case against the President on Article I (though not Article II—see here). Without testimony from people interacting directly with the President on a daily basis, how can we possibly know what the President did and why he did it?  How can we choose between the two narratives? It’s true that no “smoking gun” has been produced—but is that because Trump was Fighting Corruption and there is no smoking gun, or is it because he was Digging Up Dirt but the only people who were in a position to know that have not told us yet what they know?

The ball now is apparently about to move into the Senate’s court. The Senate’s Rules, assuming they use the Rules adopted for the Clinton trial, will permit, though they will not require, calling witnesses to testify.

If you were a Senator, and you actually wanted to get to the bottom of what happened, what’s the argument for not seeking the testimony from Trump and those in his inner circle? Even if you currently believe the Fighting Corruption story—what reason would you have for not wanting to settle the matter and get the evidence that could well confirm that story and exculpate the President?

There is, I suppose, the “Nyah Nyah, you made your bed, now sleep in it” argument: “You, Democrats, had your chance, in the House hearings, to call all the witnesses you wanted to call, and you chose to build your impeachment case on the evidence you obtained thereby, and we’re going to stick entirely to what you have come up with.”

That’s not the kind of argument, though, that you would expect from someone who really and truly wanted to know—and who thought it was important that we all know—what actually happened. And it does make one suspicious that Senators who take that position during the upcoming trial don’t really and truly want to know what happened, does it not?

Moreover, circumstances have materially changed since the House hearings were held, so the “Nyah, Nyah” argument loses much of whatever force it may have had: John Bolton has announced that he has changed his position; whereas he had told the House that he would not comply with a House subpoena unless ordered by a court to do so, he is now “prepared to testify” if called before the Senate.

I want to hear what he has to say. Under oath, not just in his book.  I can’t imagine anyone who genuinely wants to know whether Trump abused his power not wanting to hear what he has to say, under oath.

Co-blogger Keith Whittington posted a thoughtful essay here on the meaning of the special oath that Senators will take before the trial convenes, swearing to “do impartial justice” in impeachment proceedings. The duty to do “impartial justice,” he writes,

… does not mean that Senators have to wait until the formal start of a trial to start assessing whether an officer has committed impeachable offenses or limit their deliberations to the specific evidence and arguments that the House managers and the counsel for the president might present on the Senate floor. It does not mean that they have to sit for the impeachment trial with an open mind and no prejudgments on the merits of the case. It does not mean that they have to refrain from making public statements about an officer’s conduct.

But, he goes on, doing impartial justice surely does mean that senators “have a duty to conduct a trial that provides both sides an adequate opportunity to present their case, [and] a duty to consider the evidence and the legal arguments that are relevant to determining whether the president has committed an impeachable offense.”  I know that justice is supposed to be blind, but it’s not supposed to be willfully blind as to what actually happened.

It will only take four Republican Senators to do the right thing here; we’ll see if they emerge from the Republican caucus. I hope they do.  Otherwise, a truly awful impeachment precedent will have been set, and it will come back to bite us in the ass in the future.  The President’s strategy of total stonewalling will have prevailed, and any future president engaging in misconduct will surely forbid his associates from testifying as to his actions, thereby crippling our ability to uncover and punish it. Presidential impeachment—which, while flawed in many ways, has helped to keep most of the people we have elected as Chief Executive from doing truly awful things with the power we have placed in their hands—will no longer function as a deterrent to presidential misconduct.  Whatever you may think of the current charges against our current president, I don’t think you should rejoice at that outcome.

 

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Neil Peart, Champion of Individualism

Neil Peart, the longtime drummer for the Canadian band Rush, died last week of brain cancer, leaving behind a legacy as one of rock’s most technically accomplished percussionists and perhaps its most articulate libertarian lyricist. The 67-year-old songwriter regularly championed individualism, choice, and freedom over soul-crushing conformity.

Early Rush songs are saturated with such messages. The song “Freewill,” released on 1980’s Permanent Waves album, puts self-determination at the root of the human experience: “If you choose not to decide, you still have made a choice.”

In “The Trees,” released two years earlier, Peart tells a fable about a forest where the maple trees demand to be made equal with the taller oaks. It doesn’t go well:

So the maples formed a union
and demanded equal rights.
“The oaks are just too greedy.
We will make them give us light.”
Now there’s no more oak oppression
for they passed a noble law.
And the trees are all kept equal
by hatchet, axe, and saw.

Sometimes Peart’s individualism could be compressed into a single line, as in Rush’s 1981 hit “Tom Sawyer”: “No, his mind is not for rent/to any god or government.”

Rush’s 1976 album 2112, which Peart dedicated to the “genius of Ayn Rand,” tells the story of a futuristic theocracy that outlaws individualism and creativity, including the electric guitar. Rand’s novel The Fountainhead had a particularly heavy influence on Peart, who described the affinity he felt for the book’s protagonist in a 1997 interview with Scott Bullock for Liberty magazine:

Howard Roark stood as a role model for me—as exactly the way I already was living. Even at that tender age [18] I already felt that. And it was intuitive or instinctive or inbred stubbornness or whatever; but I had already made those choices and suffered for them.

As Bullock notes, the driving force here wasn’t Rand’s full-throated endorsement of commerce; it was her defense of individual will and artistic integrity against corrupting conformity, whether the pressure to conform comes from the government or from soulless corporate executives.

As time went on Peart, distanced himself from Rand and some of her more radical policy notions. The Liberty profile mentions that Peart supports a government safety net. By 2015, he was telling Rolling Stone: “For a person of my sensibility, you’re only left with the Democratic Party….The whole health-care thing—denying mercy to suffering people? What? This is Christian?” Rush even sent libertarian-leaning Sen. Rand Paul (R–Ky.) a cease-and-desist letter in 2010 to get the then-candidate to stop using its songs at rallies and in videos, although the band’s lawyers insisted that this was a solely a copyright issue.

So went Peart’s ideological journey. Meanwhile, the music he made will continue to have a life of its own, inspiring people with its defense of individual freedom for decades to come.

Bonus link: Matt Kibbe on Peart and Rand.

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Cory Booker, Who Urged Democratic Unity, Drops Out of Presidential Race

Sen. Cory Booker (D–N.J.) announced Monday that he is withdrawing from the 2020 presidential race.

“Today I’m suspending my campaign for president with the same spirit with which it began,” Booker said in a video posted to his Twitter account. “It is my faith in us, my faith in us together as a nation that we share common pain and common problems that can only be solved with common purpose and a sense of common cause.” 

He will now pivot to campaigning for reelection to the Senate.

The tone of Booker’s video reflected the tenor of his campaign, which was defined by calls for Democratic unity. “It’s not going to be a referendum on who [President Trump] is,” Booker said in a speech excerpted in his farewell video. “It’s going to be a referendum on who we are, and who we are to each other and for each other.”

Though the senator warned against Democratic infighting, he was willing to rock the boat on a few notable occasions. He is one of few high-profile Democrats who is still sometimes willing to vouch for school choice, rightly pointing out that such options help the vulnerable minorities that progressives claim to stand for. In the July Democratic debate, he criticized former Vice President Joe Biden’s record on criminal justice issues, particularly as it pertains to his hardline record on harsh punishments for drug offenses. And in the November debate, he pushed back on the wealth tax proposed by Sen. Elizabeth Warren (D–Mass.), reminding viewers that several other European countries have attempted to implement the levy with failed results.

But Booker never could quite catch on in the polls, lingering around 2 percent for most of the race. He may have been hamstrung by his history of grandstanding in congressional hearings. While politicians on both sides of the aisle are no stranger to that type of thing, Booker never could quite execute such moments with the same verve: His “I am Spartacus“ moment during Associate Justice Brett Kavanaugh’s confirmation hearings was widely mocked as theatrical and disingenuous. 

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The Impeachment End Game

The question of whether we will hear testimony from any of the people in Trump’s inner circle appears to have become the hinge on which the entire impeachment process is poised.

If you think about it, it is astonishing—bizarre, really—that we may well reach the end of this entire process without having heard from any of the people in a position to know the answer to the question: what was Trump doing, and why was he doing it?

There are two competing narratives regarding this question: the “Fighting Corruption” narrative and the “Digging Up Dirt” narrative.  In the former, he was doing what presidents often do: dangling a carrot or two (military assistance, a White House meeting) in front of a foreign leader in order to push that leader to take some steps that the president believes to be in the interest of the U.S. (fighting corruption, spending the money we give them judiciously). In the “Digging Up Dirt” narrative, he was dangling the carrots not to advance the interests of the U.S.—indeed, quite possibly in opposition to the national interest—but to inflict damage on his political opponents and thereby advance his own electoral prospects in 2020.

Most reasonable people, I think, would agree that Fighting Corruption is not an abuse of presidential power, but that Digging Up Dirt is. It follows that it is of exceeding importance that we find out which of the narratives is closer to the truth.

Now, let’s pretend that we really and truly want to know which narrative is closer to the truth. If we really and truly want to know what the President was up to and why, we would surely want to hear from those in a position to provide evidence about that, evidence gleaned from their first-hand knowledge of the President’s words and deeds. E.g., Messrs. Bolton, Pompeo, Mulvaney, and Giuliani. And, of course, from the President himself, under oath.

Yet here we are. If Mitch McConnell can hold the Senate Republicans together, we—and by “we” I mean the American people—will have heard from none of them, under oath, about any of this.

How we reached this ridiculous and sorry state of affairs goes something like this. The President publicly ordered his subordinates [here] “not to participate in [the House’s] partisan and unconstitutional inquiry.” Several senior Executive Branch officials publicly announced that they would obey that White House command, and that they would therefore not comply with any House requests (by subpoena or otherwise) for documents or live testimony, unless and until they were directed to do so by a final order of a federal court. House Democrats then made the decision not to take that question to the courts, on the stated ground that the process of obtaining a final judicial determination would take too long, and would push the hearings back into the midst of the 2020 election season.

I wasn’t at all sure, at the time, that this was the right decision—at least, if “the right decision” means “the decision most likely to help resolve the question of what Trump did and why he did it”—and I’m still not sure. I’m not convinced that the process of obtaining a prompt judicial determination on the question of the validity of a House subpoena would necessarily have been so prolonged.  The President’s legal position—that members of the Executive Branch are categorically immune from any compulsion to testify in an impeachment inquiry, at least whenever the President declares that proceeding “partisan and unconstitutional”—is very weak. It has virtually no support in the legal precedents (if you don’t believe me, go back and read White House Counsel Cippolone’s letter and find, if you can, the legal arguments contained therein); it is contrary to a number of Supreme Court precedents that, while not squarely on point, run in very much in spirit in the opposite direction; and it would, if accepted by the courts, effectively excise the impeachment remedy for presidential misconduct from the Constitution going forward, for without the ability to obtain testimony from those individuals carrying out a president’s orders, how will we ever be able to obtain evidence of presidential misdeeds? I don’t see why, in a case of great national importance where time is of the essence, the federal courts could not have disposed of the matter relatively quickly on an expedited basis without having to spend an inordinate amount of time resolving the question.

But that didn’t happen, and it is, at this point, water under the bridge. The House Democrats made the decision to base their case on the evidence provided by more subordinate officials, individuals who were not in a particularly strong position to say what the President’s involvement or motives might have been. That weakened, I think, the case against the President on Article I (though not Article II—see here). Without testimony from people interacting directly with the President on a daily basis, how can we possibly know what the President did and why he did it?  How can we choose between the two narratives? It’s true that no “smoking gun” has been produced—but is that because Trump was Fighting Corruption and there is no smoking gun, or is it because he was Digging Up Dirt but the only people who were in a position to know that have not told us yet what they know?

The ball now is apparently about to move into the Senate’s court. The Senate’s Rules, assuming they use the Rules adopted for the Clinton trial, will permit, though they will not require, calling witnesses to testify.

If you were a Senator, and you actually wanted to get to the bottom of what happened, what’s the argument for not seeking the testimony from Trump and those in his inner circle? Even if you currently believe the Fighting Corruption story—what reason would you have for not wanting to settle the matter and get the evidence that could well confirm that story and exculpate the President?

There is, I suppose, the “Nyah Nyah, you made your bed, now sleep in it” argument: “You, Democrats, had your chance, in the House hearings, to call all the witnesses you wanted to call, and you chose to build your impeachment case on the evidence you obtained thereby, and we’re going to stick entirely to what you have come up with.”

That’s not the kind of argument, though, that you would expect from someone who really and truly wanted to know—and who thought it was important that we all know—what actually happened. And it does make one suspicious that Senators who take that position during the upcoming trial don’t really and truly want to know what happened, does it not?

Moreover, circumstances have materially changed since the House hearings were held, so the “Nyah, Nyah” argument loses much of whatever force it may have had: John Bolton has announced that he has changed his position; whereas he had told the House that he would not comply with a House subpoena unless ordered by a court to do so, he is now “prepared to testify” if called before the Senate.

I want to hear what he has to say. Under oath, not just in his book.  I can’t imagine anyone who genuinely wants to know whether Trump abused his power not wanting to hear what he has to say, under oath.

Co-blogger Keith Whittington posted a thoughtful essay here on the meaning of the special oath that Senators will take before the trial convenes, swearing to “do impartial justice” in impeachment proceedings. The duty to do “impartial justice,” he writes,

… does not mean that Senators have to wait until the formal start of a trial to start assessing whether an officer has committed impeachable offenses or limit their deliberations to the specific evidence and arguments that the House managers and the counsel for the president might present on the Senate floor. It does not mean that they have to sit for the impeachment trial with an open mind and no prejudgments on the merits of the case. It does not mean that they have to refrain from making public statements about an officer’s conduct.

But, he goes on, doing impartial justice surely does mean that senators “have a duty to conduct a trial that provides both sides an adequate opportunity to present their case, [and] a duty to consider the evidence and the legal arguments that are relevant to determining whether the president has committed an impeachable offense.”  I know that justice is supposed to be blind, but it’s not supposed to be willfully blind as to what actually happened.

It will only take four Republican Senators to do the right thing here; we’ll see if they emerge from the Republican caucus. I hope they do.  Otherwise, a truly awful impeachment precedent will have been set, and it will come back to bite us in the ass in the future.  The President’s strategy of total stonewalling will have prevailed, and any future president engaging in misconduct will surely forbid his associates from testifying as to his actions, thereby crippling our ability to uncover and punish it. Presidential impeachment—which, while flawed in many ways, has helped to keep most of the people we have elected as Chief Executive from doing truly awful things with the power we have placed in their hands—will no longer function as a deterrent to presidential misconduct.  Whatever you may think of the current charges against our current president, I don’t think you should rejoice at that outcome.

 

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Neil Peart, Champion of Individualism

Neil Peart, the longtime drummer for the Canadian band Rush, died last week of brain cancer, leaving behind a legacy as one of rock’s most technically accomplished percussionists and perhaps its most articulate libertarian lyricist. The 67-year-old songwriter regularly championed individualism, choice, and freedom over soul-crushing conformity.

Early Rush songs are saturated with such messages. The song “Freewill,” released on 1980’s Permanent Waves album, puts self-determination at the root of the human experience: “If you choose not to decide, you still have made a choice.”

In “The Trees,” released two years earlier, Peart tells a fable about a forest where the maple trees demand to be made equal with the taller oaks. It doesn’t go well:

So the maples formed a union
and demanded equal rights.
“The oaks are just too greedy.
We will make them give us light.”
Now there’s no more oak oppression
for they passed a noble law.
And the trees are all kept equal
by hatchet, axe, and saw.

Sometimes Peart’s individualism could be compressed into a single line, as in Rush’s 1981 hit “Tom Sawyer”: “No, his mind is not for rent/to any god or government.”

Rush’s 1976 album 2112, which Peart dedicated to the “genius of Ayn Rand,” tells the story of a futuristic theocracy that outlaws individualism and creativity, including the electric guitar. Rand’s novel The Fountainhead had a particularly heavy influence on Peart, who described the affinity he felt for the book’s protagonist in a 1997 interview with Scott Bullock for Liberty magazine:

Howard Roark stood as a role model for me—as exactly the way I already was living. Even at that tender age [18] I already felt that. And it was intuitive or instinctive or inbred stubbornness or whatever; but I had already made those choices and suffered for them.

As Bullock notes, the driving force here wasn’t Rand’s full-throated endorsement of commerce; it was her defense of individual will and artistic integrity against corrupting conformity, whether the pressure to conform comes from the government or from soulless corporate executives.

As time went on Peart, distanced himself from Rand and some of her more radical policy notions. The Liberty profile mentions that Peart supports a government safety net. By 2015, he was telling Rolling Stone: “For a person of my sensibility, you’re only left with the Democratic Party….The whole health-care thing—denying mercy to suffering people? What? This is Christian?” Rush even sent libertarian-leaning Sen. Rand Paul (R–Ky.) a cease-and-desist letter in 2010 to get the then-candidate to stop using its songs at rallies and in videos, although the band’s lawyers insisted that this was a solely a copyright issue.

So went Peart’s ideological journey. Meanwhile, the music he made will continue to have a life of its own, inspiring people with its defense of individual freedom for decades to come.

Bonus link: Matt Kibbe on Peart and Rand.

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12 Signs That The Economy Is Seriously Slowing Down As 2020 Begins

12 Signs That The Economy Is Seriously Slowing Down As 2020 Begins

Authored by Michael Snyder via TheMostImportantNews.com,

Lost in all of the headlines about Iran and impeachment is the fact that the U.S. economic slowdown which began during the latter stages of last year appears to be accelerating.  The final numbers which will tell us if we are officially in a recession at this moment won’t be released until months from now, but for millions upon millions of Americans it definitely feels like one has already started.  Yes, the stock market has been soaring, but at this point the stock market has become completely divorced from economic reality.  And as you will see later in this article, stock prices are now the most overvalued that they have ever been in all of American history.

But before we get to that, let’s talk about what is happening in the real economy.

The following are 12 signs that the economy is seriously slowing down as 2020 begins…

#1 The U.S. Manufacturing Purchasing Managers Index has been in contraction for 5 months in a row, and it is now at the lowest level we have seen since June 2009.

#2 Last month, manufacturing employment fell at the fastest pace we have seen since August 2009.

#3 Last month, new manufacturing orders fell at the fastest pace we have seen since April 2009.

#4 Chicago PMI has been contracting for 4 months in a row.

#5 European manufacturing PMI declined again in December.

#6 Borden Dairy, one of the largest dairy companies in the entire world, declared bankruptcy just a few days ago.

#7 Earlier this month, the Baltic Dry Index had its worst day in 6 years.

#8 Overall, the decline in the Baltic Dry Index this month is the largest that we have seen since 2008.

#9 The auto recession just continues to get even worse.  Thanks to the substantial slowdown we witnessed during the second half of 2019, the total number of cars and trucks sold in the United States during all of 2019 was actually below the level that we witnessed back in 2000 when our population was significantly smaller.

#10 Used heavy duty truck prices have fallen “as much as 50%“.

#11 Macy’s just announced that they will be closing 28 stores.

#12 To start the year, AT&T is laying off thousands of workers, and according to Robert Reich those being laid off “will have to train their foreign replacements“.

Of course many of the “experts” continue to assure us that everything will be just fine.

In fact, one panel of “experts” recently came to the conclusion that there is “almost no chance of a recession this year”.

That would be absolutely wonderful news if it was true.

Sadly, the numbers that I just shared with you tell a completely different story.  They tell the story of an economy that is most definitely heading for a recession.

And according to John Williams of shadowstats.com, if the government was using honest numbers they would show that we are actually in a recession right now.

But what about the stock market?

Shouldn’t the fact that stock prices have been soaring be seen as an optimistic sign?

Well, there have been a few other stock bubbles of this nature throughout our history, and all of them have ended very badly.

In 1929, stock prices were at an all-time record high and it seemed like the economic good times would never end.

But then the stock market crashed and we plummeted into the Great Depression of the 1930s.

In 2000, the dotcom bubble pushed stock prices to absolutely absurd heights, but then stock prices quickly collapsed when the bubble burst and the U.S. economy fell into a very painful recession.

During the years leading up to 2008, stock prices once again rose to dizzying levels and it seemed like the party would last indefinitely.

But then the financial crisis struck, and the Great Recession of 2008 and 2009 was the most excruciating economic downturn our nation has experienced since the 1930s.

Unfortunately, we are even more primed for a stock market crash now than we were in any of the previous examples that I just shared.

So how do I know this?

Well, for one thing P/E ratios have become ridiculously inflated.  The following comes from Marketwatch…

Indeed stocks are overvalued according to the popular measure of price-to-earnings (P/E) — which compares the price of one share of stock to one year of per-share earnings relative to recent history. The S&P 500 index SPX, -0.29% is trading at 18.6 times forward earnings, according to FactSet data, above the average ratio of 16.7 during the past five years and 14.9 over the past ten.

In addition, price-to-sales ratios for the S&P 500 are now at the highest level in all of U.S. history…

The above chart, from Ned Davis Research, shows that price relative to sales for the S&P 500 is at a record high, “well in excess of what they were in 2000 or 2007 at those peaks,” wrote Ned Davis in a Wednesday note to clients.

Other measures, like the median price to earnings ratio — which exclude the skewed effects of very profitable and very unprofitable companies — shows the S&P 500 overvalued by nearly 30% versus the typical valuation level seen since 1964.

In other words, in the entire history of the United States stock prices have never been more overvalued than they are at this moment.

And every other time we have seen stock price ratios get this high, an absolutely horrifying stock market crash has followed.

The optimists are insisting that things will somehow turn out differently this time.

They assure us that everything is under control and that very bright days are ahead.

You can believe them if you want, but every indicator is pointing in the opposite direction.


Tyler Durden

Mon, 01/13/2020 – 12:00

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Business Finance

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US To Remove China “Currency Manipulator” Designation Ahead Of Treade Deal; Yuan Jumps

US To Remove China “Currency Manipulator” Designation Ahead Of Treade Deal; Yuan Jumps

For anyone still seeking definitive confirmation that the Treasury’s “Currency Manipulator” designation is nothing more than a political tool, here it is: moments ago Bloomberg reported that just five months after the Treasury tagged China as a currency manipulator on August 5 – the first such designation in 25 years  – when the trade war between the two nations was near its apex, the US would lift said “manipulator” tag hours ahead of the Phase One trade deal which is now set to be announced to much fanfare on Jan 15.

According to the report, the Treasury Department will make the move in the latest semi-annual currency report, which is expected to be released ahead of Jan 15 after being delayed as the U.S. and China finalize a “phase one” trade pact.

As we reported at the time, On August 5 Treasury Secretary Steven Mnuchin formally labeled China a currency-manipulator for the first time since the days of the Clinton administration, a move that further escalated the trade war with Beijing after the country’s central bank allowed the yuan to fall in retaliation to new U.S. tariffs. The designation followed just hours after the Yuan tumbled below the critical level of 7 against the dollar for the first time ever.

And since it is now clear that this designation was merely a political ploy to push China, now that a deal is in sight, the designation is being lifted.

The administration had at one point considered maintaining the label and instead announcing it would monitor the yuan with the possibility of lifting the designation in August of this year, according to the people.

Mnuchin’s August 2019 announcement prompted authorities in Beijing to increase transparency around how they manage the yuan. Some of that data has provided support for Treasury’s view that the People’s Bank of China engages in competitive devaluations of its currency, the people said.

Ironically, when China branded a currency manipulator it was for devaluing its currency when in reality Beijing has been fighting tooth and nail to keep its currency stronger than it should be based on the shadow outflows from the country’s closed capital account; as a result economists slammed the August decision: the IMF said in September the yuan is fairly valued and that there’s no evidence of manipulation, noting that China’s weakening currency could also be attributed to a slowdown in growth.

More to the point, China also doesn’t meet the criteria outlined in a 2015 U.S. law for formally designating a country a currency-manipulator. Mnuchin instead relied on a 1988 trade law that has a looser definition of currency manipulation to justify the claim. He did so after the yuan broke the 7 per dollar level for the first time since 2008, drawing Trump’s ire.

As a reminder, the August announcement was made in a press release, outside the normal issuance of the report. That left currency strategists and policy experts without a full explanation for the decision. Treasury’s currency report examines 20 countries for possible currency manipulation, a number that was increased from 12 in May.

And, as Bloomberg discloses, “Trump was involved in drafting the press release, which on his direction refers to China as a “Currency Manipulator,” using capital letters.”

Hinting at what’s to come, last October Mnuchin said that if a trade deal with China were signed, he would consider removing the manipulator tag, saying that signing an agreement would be “a big step in the right direction.” And now that a deal is imminent, this is precisely what has happened. 

Following the bloomberg report, the Yuan rose to fresh session highs, with the USDCNH dropping to levels not seen since July.


Tyler Durden

Mon, 01/13/2020 – 11:44

Tags
Business Finance

via ZeroHedge News https://ift.tt/2uKY9Z2 Tyler Durden

JPMorgan Puts Veteran CDS Trader On Leave Over WhatsApp Use

JPMorgan Puts Veteran CDS Trader On Leave Over WhatsApp Use

Anyone who has traded CDS has inevitably transacted with JPMorgan’s Ed Koo, who most recently headed JPMorgan’s single name CDS desk and who over the the past two decades, due to his corporate cash bond coverage, was axed across the entire credit spectrum giving him a unique view over the IG market. It also made him a virtually assured counterparty to any buysider who bought or sold credit protection. But no longer.

According to Bloomberg, Koo was placed on leave “as the bank reviews whether he broke its policies by using WhatsApp group chats with colleagues” in discussions that included market chatter, suggesting he may have tried to circumvent or avoid the traditionally monitored communication venues such as Bloomberg chat. While so far the probe so far hasn’t indicated any improper activity, the bank hasn’t ruled out taking action against other members of the group, a Bloomberg source said.

Meanwhile, JPM’s decision to force someone of Koo’s standing off the trading floor while it looks into the matter “is indicative of the seriousness with which banks are grappling with the profusion of new communication platforms.” Unlike traditional chat platforms such as email or Bloomberg, WhatsApps messages are encrypted from start to finish, and can’t easily be monitored by a compliance department, a problem for firms that need to make sure their employees aren’t engaging in illegal activity like fraud or insider trading.

As a result, Bloomberg notes that “many firms are unsure of how to handle WhatsApp. Employees often use it for talking to friends and coordinating their social lives, which makes it hard for banks to outlaw altogether.” Of course, employees also use it to plot insider trading.

Koo was one of JPMorgan’s main traders of credit-default swaps tied to individual companies; his role expanded to cover the entire IG space following the 2011 departure of veteran Eric Pitt who ran JPM’s North American IG and derivatives trading. In recent years, Koo got a bigger role last year under investment-grade trading head Nicholas Adragna, and has also had oversight of JPM’s entire portfolio trading space.


Tyler Durden

Mon, 01/13/2020 – 11:35

Tags
Business Finance

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

Trump “Can Rest Easy Tonight” After Cory Booker Drops Out Of Dem Race

Trump “Can Rest Easy Tonight” After Cory Booker Drops Out Of Dem Race

Update: As is his custom, President Trump greeted news of Booker dropping out with a sardonic tweet claiming he will “rest easy tonight” knowing that the 0%-polling Dem is out of the running.

Meanwhile, elsewhere on twitter, users are joking about the prospect of Booker and Kamala Harris suing the DNC for racism.

* * *

Can we get a #Primarysowhite?

The 2020 Democratic Primary just got a little bit whiter, and a little bit less diverse.

Following his complaints about being excluded from the ‘all white’ Iowa debate stage, New Jersey Sen. Cory Booker is preparing to drop out of the race, NBC News reports.

Booker broke the news in an email to supporters, where he said he would “carry this fight forward – I just won’t be doing it as a candidate for president this year.”

Here’s what he said, according to NBC:

“Nearly one year ago, I got in the race for president because I believed to my core that the answer to the common pain Americans are feeling right now, the answer to Donald Trump’s hatred and division, is to reignite our spirit of common purpose to take on our biggest challenges and build a more just and fair country for everyone,” he said in an email to supporters obtained by NBC News. “I’ve always believed that. I still believe that. I’m proud I never compromised my faith in these principles during this campaign to score political points or tear down others.”

“And maybe I’m stubborn, but I’ll never abandon my faith in what we can accomplish when we join together,” he continued. “I will carry this fight forward – I just won’t be doing it as a candidate for president this year. Friend, it’s with a full heart that I share this news – I’ve made the decision to suspend my campaign for president.”

[…]

“It was a difficult decision to make, but I got in this race to win, and I’ve always said I wouldn’t continue if there was no longer a path to victory,” he told supporters. “Our campaign has reached the point where we need more money to scale up and continue building a campaign that can win – money we don’t have, and money that is harder to raise because I won’t be on the next debate stage and because the urgent business of impeachment will rightly be keeping me in Washington.”

Booker’s departure leaves former Mass Gov. Deval Patrick as the only black candidate in the race. Andrew Yang is the only Asian-American male, while Tulsi Gabbard remains the only remaining minority female candidate.

The frontrunners are still two white men, and one white woman, with the primaries just around the corner.


Tyler Durden

Mon, 01/13/2020 – 11:31

Tags
Politics

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

Beyond Meat Soars 40% In Days As Record Shorts Scramble To Cover… Again

Beyond Meat Soars 40% In Days As Record Shorts Scramble To Cover… Again

After it lost over two-thirds of its market cap since peaking in late July, fake meat company Beyond Meat was left for dead, trading at $75 for the past two months. Which is why some may have failed to notice that in the past week, BYND has staged another impressive surge, rising over 40% in just a few days, and hitting $106 today.

What is the reason for this impressive rebound? Some speculated that whereas investors had lost faith in the underlying narrative – and the tailwind behind meat alternative names – namely the transition away from meat to “fake meat”, over the weekend Panera Bread reminded the market just how strong of a secular shift this is, when it announced it would reduce the proportion of meat-based items on its menu by a third, as the US soups-to-sandwich chain anticipates that the rising demand for alternative ingredients will gather pace.

As the FT reported, the St Louis-based company which is owned by the food and consumer goods empire JAB Holdings, alongside Pret A Manger and Keurig, has drawn up plans to make the shift and introduce more plant-based options over about two years.

Yet while Panera reaffirmed the underlying industry trends, and fuelled demand for alternative proteins from providers such as Impossible Burger and Beyond Meat, Panera has no plans to introduce these products. At least not yet.

So while this story is certainly beneficial to the narrative, it is hardly the catalyst.

So what is?

The answer is likely the same one that allowed the stock to soar as high as $234.90 on July 26: a massive buildup of short in the name, which were getting crushed for much of the post-IPO period then took the upper hand after August when the stock finally buckled. The problem, however, is that as BYND tumbled, even more shorts piled on, and as of Dec 31, there were a record 10.1 million shorts, representing a quarter of the company’s float according to Bloomberg, and 36% of the float per S3’s Ihor Dusaniwski.

One big reason for the record pile up in shorts: the borrow rate has plunged to 2%…

… with some brokers offering the stock to short for as low as 0.5% after hitting an unprecedented 144% in late July. Which has made shorting the name far less painful from a theta, or bleed, perspective, but not less painful if and when a short squeeze is triggered… just like the one that appears to be taking place right now. 

Needless to say, the slow motion meltup will only accelerate if the jog to cover becomes a full-blown panic, and the borrow fee returns to where it was 6 months ago around 100%. In that case, expect the stock to quickly soar back to its all time highs (as described in “BYND Shorts Crucified As Borrow Fee Hit 144%“), as first the shorts, then the longs, and then the short again get pulverized.


Tyler Durden

Mon, 01/13/2020 – 11:08

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