Rabobank: The Key Question Is Why China Decided To Jump-Start Its Stocks Now?

Rabobank: The Key Question Is Why China Decided To Jump-Start Its Stocks Now?

Tyler Durden

Tue, 07/07/2020 – 10:44

Submitted by Rabobank’s Michael Every

At time of writing the Shanghai stock exchange was up merely 1.8% on the day, quite disappointing after the 5.8% leap yesterday, but still meaning it has gained nearly 14% in just a few of sessions. That’s the best performance since late 2014, just before the same market went on its dizzying 2015 run. The same dizzying run that was overtly and blatantly a state-led bubble: and one that ended in a disastrous crash with all manner of nasty recriminations, including ‘don’t sell!’ off-the-record instructions, and apparent threats of arrest for those short-selling, or even writing negative research reports.

One wonders what the decision-makers at MSCI, who in the total absence of any comprehensive reforms in Chinese stock regulation post-2015 nonetheless decided to increase the country’s global portfolio weighting, are thinking right now. More so with hawkish US politicians already talking about the dangers of US capital being pumped into Chinese markets – and that US rhetoric is not going to get any less hawkish as Hong Kong CEO Carrie Lam introduces sweeping new police powers including warrant-less searches, property seizures, online surveillance, and not allowing people to leave the territory. That as Trump tweeted: “China has caused great damage to the United States and the rest of the world!” yesterday, and as a White House aide stated an executive order on China is apparently imminent.

While this is not an equity-focused, nor specifically China-focused Daily, this scale of market move needs some examination. What is going on? Let’s run through the options quickly:

  • Is it led by Chinese demand? The data say no. We aren’t even back to the pre-Covid trend, and that would not justify a 14% gain.

  • Is it led by Chinese supply? Much more likely – but is there any global demand for that supply? Not at the moment, and increasingly less so going forwards if you listen to the talk about shifts in supply chains out of China. So it’s stock-piling or product-dumping ahead, perhaps.

  • Is it led by lower interest rates? No. There hasn’t been any major easing in China to generate the same lower rates/higher stocks knee-jerk response seen elsewhere. It isn’t able to ease so overtly because it needs to stop capital outflows.

  • Is it led by QE? No. Yet even though Bloomberg today says China isn’t doing QE, look at a country with a 10-12% consolidated fiscal deficit pre-Covid, and perhaps nearer 20% at the moment; ask how it’s being funded (by the PBOC), and how much of that deficit spending flows into infrastructure; and consider that what one sees is quasi-MMT. Which is why China cannot afford to run a current-account deficit without losing control of its quasi-currency peg, or at least needs a net inflow of USD.

  • Has this been a net-inflow/foreign-capital driven rally? No. This is a domestic story…so far – and one that seems engineered in the hope that it will become a foreign-driven rally. In all fairness, it’s not as if other major markets are not seeing blatant ramping from authorities one way or another –Trump uses Twitter to the same effect– or fundamentals-defying trends.

Yet the key question is why China has decided to jump-start its stocks now? Why, when locals will act accordingly and listen to the authorities when they tell them where they are about to get their “guaranteed” minimum 20% annual return; and they follow that smooth, paved path through the financial jungle;…until it all ends in 2015 chaos again. Moreover, why given bond yields are spiking as a result, which a debt-laden economy cannot afford? Why, as punters walk away from Wealth Management Products, pulling the funding rug out from under the feet of many property projects as a result?

Perhaps to jump-start consumption? Yet property is more widely-held than stocks. Perhaps to stop the property bubble getting out of control? If so, stocks are hardly a less dangerous tiger to ride. Perhaps to swap debt for equity? Except bond yields are rising, which hurts most borrowers more than some can gain through stocks. Perhaps to encourage firms to tap unlimited CNY equity capital and not (soon to be limited?) offshore USD debt? Perhaps to help push CNY back to 7.01 to try to ease some of the looming US political pressure on China in that USD regard? Or, as suggested yesterday, if pressure can’t be eased, perhaps to allow for an immediate signal-sending 2.5% fall in CNY without taking it into a range that would suggest to the world that China is no longer master of its own destiny? (And on USD/CNY it isn’t: not while the US holds the sanctions trump card.) Perhaps simply to try to get those USD capital inflows by hook or by crook to keep the game going: “Look, you can’t miss out on this!”?

One might notice that none of the above analysis involves traditional market metrics. That is because we do not have traditional markets, or metrics, and there is nothing market-based about what is happening in this “market”. The far better form of analysis, as above, is to try to play market ‘Cluedo’ (‘Clue’ in the US). “So was it the stock bull-market in China with the quasi-MMT?” Who did it? Who benefits? And who ends up being done in by the lead pipe?

Meanwhile, the RBA today held rates and its yield curve targets, as fully expected, but underlined that FISCAL and monetary support will be needed for some time. What is another term for fiscal and monetary support? It starts with M and ends in T. And there is another M. The RBA also pledged to scale up its bond buying if needed. This implies the massive increase in the Aussie defence budget just pledged will be de facto covered by the RBA. Throw another submarine on the barbie, mate. The RBA will meanwhile “do whatever it takes” to keep the bond market functional: presumably this just means yields staying low, because the Japanese example clearly shows that if you issue lots of public debt, and the central bank buys it, then the central bank eventually becomes the market; so the RBA is saying it is going to keep itself functional.

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“This Is the Real John Roberts”

What is up with Chief Justice Roberts? Is he moving left? Cowing to political pressure? Trading off liberal and conservative votes? Perhaps it is none-of-the-above, as I explain in this New York Times op-ed. From the beginning:

The chief justice has sided with the Supreme Court’s liberal justices on some of the biggest cases of the term, like decisions to invalidate the Trump administration’s effort to rescind the DACA program and Louisiana’s abortion-provider regulations. In others, he has stuck with the conservatives.

Chief Justice Roberts’s voting pattern certainly fails to conform to a predictable ideological pattern. But there is a pattern nonetheless. He is a conservative justice, but more than anything else, he is a judicial minimalist who seeks to avoid sweeping decisions with disruptive effects.

This has been the hallmark of his jurisprudence since he joined the court in 2005. And while there are significant exceptions (most notably, Shelby County v. Holder, which invalidated a major component of the Voting Rights Act), Chief Justice Roberts’s anti-disruption jurisprudence has become more pronounced the longer he has been on the court.

The article draws and builds upon my analysis of the Chief Justice’s “anti-disruption” approach to statutory interpretation. It is also consistent with some of the themes that emerge from Business and the Roberts Court (Oxford 2016). I will also be expanding on this analysis in a forthcoming essay for the University of Chicago Law Review Online.

I should stress that the aim of this piece is to describe John Roberts’ jurisprudence, not to defend it. There are many reasons one might like or dislike his approach, both as a general matter as well as how it cashes out in particular cases.

My piece concludes:

In his confirmation hearing, Judge Roberts got attention for saying that “judges are like umpires” because they “don’t make the rules, they apply them.” Most commentators dwelled on his suggestion that deciding cases was like calling balls and strikes, but perhaps they missed the real point: “Nobody ever went to a ballgame to see the umpire,” he explained.

In much the same way, Chief Justice Roberts does not like the focus to be on the courts. He would prefer it if the major issues of the day were resolved in Congress or at the ballot box.

This is a noble sentiment, but it may also be a bit outdated and naïve. “There is hardly any political question in the United States that sooner or later does not turn into a judicial question,” observed Alexis de Tocqueville in 1835. This is only more true today. Whether Chief Justice Roberts likes it or not, hard calls in high profile controversies keep coming his way.

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Part III: Barr v. AAPC and Stare Decisis

I have published two posts on Barr v. AAPC. The first considered judicial departmentalism. The second focused on content-based restrictions. Here, I will tease out the discussions of stare decisis.

First, Justice Kavanaugh faults Justice Breyer’s “scholarly separate opinion.” The plurality argues that Justice Breyer in fact seeks to overrule “longstanding” First Amendment precedent:

In his scholarly separate opinion, JUSTICE BREYER explains how he would apply freedom of speech principles. But the Court’s longstanding precedents, which we carefully follow here, have not adopted that ap­proach. In essence, therefore, JUSTICE BREYER argues for overruling sev­eral of the Court’s First Amendment cases, including the recent 2015 de­cision in Reed v. Town of Gilbert (2015). Before overruling precedent, the Court usually requires that a party ask for overruling, or at least obtains briefing on the overruling question, and then the Court carefully evaluates the traditional stare decisis factors. Here, no party has asked for overruling, and JUSTICE BREYER’s opinion does not analyze the usual stare decisis factors. JUSTICE BREYER’s opinion therefore dis­counts both the Court’s precedent and the Court’s precedent on prece­dent.

Justice Breyer countered that the precedent is far from settled:

Moreover, it is no answer to claim that this Court’s precedents categorically require such an analysis. Our First Amendment jurisprudence has always been contextual and has defied straightforward reduction to unyielding categorical rules. The idea that broad language in any one case (even Reed) has categorically determined how content discrimination should be applied in every single context is both wrong and reflects an oversimplification and over-reading of our precedent. The diversity of approaches in this very case underscores the point that the law here is far from settled.

If I read Breyer correctly, the Court’s First Amendment’s jurisprudence is so context-specific that we do not actually have any First Amendment jurisprudence. Instead, Breyer argues, we should look to First Amendment “values.” OK. Justice Kagan, who has made stare decisis her defining cause, must have had some trouble joining this paragraph. Maybe the Chief can identify substantive due process “values.” That analysis will make post-June cases far easier to decide.

Justice Kavanaugh also wields stare decisis to critique Justice Gorsuch’s separate opinion. Justices Gorsuch wrote:

Respectfully, if this is what modern “severability doctrine” has become, it seems to me all the more reason to reconsider our course.

The plurality says Gorsuch is wrong to reconsider long-standing precedent concerning severability. Why? Because John Marshall.

JUSTICE GORSUCH suggests more broadly that severability doctrine may need to be reconsidered. But when and how? As the saying goes, John Marshall is not walking through that door.

Huh? I’ve never heard that saying. I googled “John Marshall is not walking through that door.” There are zero results before today. Instead, I think Justice Kavanaugh is alluding to an infamous 2000 press conference with Rick Pitino, who briefly served as coach of the Boston Celtics::

“Larry Bird is not walking through that door, fans. Kevin McHale is not walking through that door, and Robert Parish is not walking through that door,” Pitino said of the Big Three that won three NBA titles in the 1980s. “And if you expect them to walk through that door, they’re going to be gray and old. What we are is young, exciting, hardworking and going to improve. People don’t realize that. And as soon as they realize that those three guys are not coming through that door, the better this town will be for all of us.

Comparing John Marshall to Larry Legend? Give me a break. Justice Kavanaugh is trying way too hard here. The line failed. Regrettably, judges are going to cite that statement as if it were an actual saying about stare decisis, without any knowledge of its context.

Kavanaugh continues.

And this Court, in this and other recent decisions, has clarified and refined severability doctrine by emphasizing firm adherence to the text of severability clauses, and underscoring the strong presumption of severability. The doctrine as so refined is constitutionally well-rooted, see, e.g., Marbury v. Madison, 1 Cranch 137 (Marshall, C. J.), and can be predictably applied. True, there is no magic solution to severability that solves every conundrum, especially in equal-treatment cases, but the Court’s current approach as reflected in recent cases such as Free Enterprise Fund and Seila Law is constitutional, stable, predictable, and commonsensical.

Give me a bigger break. Marbury did not establish modern severability doctrine. Sure, Marshall did not strike down the entire Judiciary Act of 1789. But so what? The Court found that it lacked authority to issue the requested remedy (mandamus), because Congress could not expand its original jurisdiction. What we would today call “severability analysis” was irrelevant in Marbury. Seriously. As a general matter, if you need to cite Marbury to support your argument, your argument lacks sufficient support.

The entire notion of “invalidation” is a modern construct–one that Kavanaugh only partially rejects. And severability doctrine does not lead to “predictable” and “stable” results. The purposivist inquiry is a total crapshoot. I’ll address severability in the fourth installment. But here Kavanaugh overreached.

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Narcissists, Psychopaths, and Manipulators Are More Likely To Engage in ‘Virtuous Victim Signaling,’ Says Study

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New study links virtue signaling to “Dark Triad” traits. Being accused of “virtue signaling” might sound nice to the uninitiated, but spend much time on social media and you know that it’s actually an accusation of insincerity. Virtue signalers are, essentially, phonies and showoffs—folks who adopt opinions and postures solely to garner praise and sympathy or whose good deeds are tainted by their need for everyone to see just how good they are. Combined with a culture that says only victimhood confers a right to comment on certain issues, it’s a big factor in online pile-ons and one that certainly contributes to social media platforms being such a bummer sometimes.

So: Here’s some fun new research looking at “the consequences and predictors of emitting signals of victimhood and virtue,” published in the Journal of Personality and Social Psychology. The paper—from University of British Columbia researchers Ekin Ok, Yi Qian, Brendan Strejcek, and Karl Aquino—details multiple studies the authors conducted on the subject.

Their conclusion? Psychopathic, manipulative, and narcissistic people are more frequent signalers of “virtuous victimhood.”

The so-called “dark triad” personality traits—Machiavellianism, narcissism, and psychopathy—lead to characteristics like “self-promotion, emotional callousness, duplicity, and tendency to take advantage of others,” the paper explains.

And “treated as a composite, the Dark Triad traits were significant predictors of virtuous victim signaling.”

This held true “even when controlling for factors that may make people vulnerable to being mistreated or disadvantaged in society (i.e., demographic and socioeconomic characteristics) as well as the importance they place on being a virtuous individual as part of their self-concept,” the researchers note.

They point out that virtue signaling is defined as “the conspicuous expression of moral values, done primarily with the intent of enhancing one’s standing within a social group.”

Meanwhile, victim signaling “may be used as a social influence tactic that can motivate recipients of the signal to voluntarily transfer resources to the signaler,” they explain. More from the paper’s theoretical background section:

An emerging literature on competitive victimhood documents the prevalence of victim signaling by various social groups and provides evidence for its functionality as a resource extraction strategy. For instance, victim signaling justifies victim groups seeking retribution against alleged oppressors. Retribution often takes the form of demanding compensation through some kind of resource transfer from nonvictims to the alleged victim. Claiming victim status can also facilitate resource transfer by conferring moral immunity upon the claimant. Moral immunity shields the alleged victim from criticism about the means they might use to satisfy their demands. In other words, victim status can morally justify the use of deceit, intimidation, or even violence by alleged victims to achieve their goals. Relatedly, claiming victim status can lead observers to hold a person less blameworthy, excusing transgressions, such as the appropriation of private property or the infliction of pain upon others, that might otherwise bring condemnation or rebuke. Finally, claiming victim status elevates the claimant’s psychological standing, defined as a subjective sense of legitimacy or entitlement to speak up. A person who has the psychological standing can reject or ignore any objections by nonvictims to the unreasonableness of their demands. In contrast to victim signalers, people who do not publicly disclose their misfortune or disadvantage are less likely to reap the benefits of retributive compensation, moral immunity, deflection of blame, or psychological standing and would therefore find it difficult to initiate resource transfers.

The effectiveness of victim signaling as a resource transfer strategy follows the basic principles of signaling theory. Signaling theory posits that the transmission of information from one individual (the sender) to another (the receiver) can influence the behavior of the receiver. Signals can refer to any physical or behavioral trait of the sender, and are used by the senders to alter the behaviors of others to their own advantage.

Their results suggest that:

  • “a perceived victim signal can lead others to transfer resources to a victim, but that the motivation to do so is amplified when the victim signal is paired with a virtue signal” and “people high in the Dark Triad traits emit the dual signal more frequently.”
  • “a positive correlation between the Dark Triad scores and the frequency of emitting the virtuous victim signal.”
  • “evidence of how these signals … can predict a person’s willingness to engage in and endorse ethically questionable behaviors …. frequent virtuous victim signalers are more willing to purchase counterfeit products and judge counterfeiters as less immoral compared with less frequent signalers, a pattern that was also observed when using participants’ Dark Triad scores instead of their signaling score,” and “frequent virtuous victim signalers were more likely to cheat and lie to earn extra monetary reward in [a] coin flip game.”
  • “that a dimension referred to as amoral manipulation was the most reliable predictor of virtuous victim signaling.”
  • “frequent virtuous victim signalers were more likely to make inflated claims to justify receiving restitution for an alleged and ambiguous norm violation in an organizational context.”

The authors stress that they “do not refute the claim that there are individuals who emit the virtuous victim signal because they experience legitimate harm and also conduct themselves in decent and laudable ways.”

FREE MINDS

Female protesters sue over alleged abuse, mistreatment by arresting officers.
Two women arrested after a May 31 protest in Indianapolis are suing local police in federal court for allegedly excessive force. The pair were arrested for supposedly resisting law enforcement, but the charges were dropped. Video of the incident shows officers pushing one of the women to the ground and hitting another one with a baton.

In California, a gender-nonconforming woman arrested by Los Angeles Police Department (LAPD) officers following a recent protest there is also suing over her treatment, alleging that the officers referred to her as “it” and groped one of her breasts.

“Josh Rubenstein, an LAPD spokesman, said at least three complaints have been formally submitted to police about ‘inappropriate touching during a pat-down’ amid curfew arrests, and all are under investigation,” reports the Los Angeles Times.

FREE MARKETS

New ruling on robocalls. To fix an unconstitutional provisional in a federal law regulating robocalls, Supreme Court justices decided to ban the bad part rather than strike down the whole law. “The bottom line of Barr v. American Association of Political Consultants: The consultants ‘still may not make political robocalls to cell phones,'” reports The Washington Post. “Also banned as a result of Monday’s decision are previously allowed automated calls made to collect debts owed to or guaranteed by the federal government, such as student loan and mortgage debts.”

QUICK HITS

• Three percent of American adults have moved since the start of the COVID-19 pandemic.

• Amy Cooper—a white woman who called the cops on a black man in Central Park and made a false report that he was threatening her—has been arrested. Writer and advocate Josie Duffy Rice, president of The Appeal, has a good thread on why cheering on her arrest is wrong:

• Conservatives “long insisted that they weren’t anti-immigration, they were just anti-illegal immigration,” writes Reason‘s Shikha Dalmia. “Now the Trump administration is reaching a point where it wants to kick out immigrants for no reason except that they are immigrants.”

• Decriminalizing psychedelic mushrooms and plants may be on the ballot in D.C. this November.

• Here’s another case of federal agents ensuring the security of our homeland by helping secure misdemeanor (state) prostitution charges against Asian women working at massage parlors. (See also: “Robert Kraft and Florida Massage Workers Are Still Fighting Unconstitutional Surveillance Video.”)

• Family members of Isak Aden, a young Somali American man killed by police in Minnesota last July, filed a “lawsuit … in federal court on Thursday, the one-year anniversary of Aden’s death. It seeks $20 million in combined damages from the cities of Bloomington, Burnsville, Eagan and Edina,” notes KSTP.com

• Good news on occupational licensing reform in Pennsylvania.

• “This clause” in the user agreement for new-ish social media app Parler “should make Ted Cruz and every other Parler user huge supporters of Section 230,” writes Mike Masnick at Techdirt.

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3.9 Unemployed Workers For Every Job Opening Despite Record Hiring Surge: JOLTS

3.9 Unemployed Workers For Every Job Opening Despite Record Hiring Surge: JOLTS

Tyler Durden

Tue, 07/07/2020 – 10:30

With the BLS’s JOLTs, or job openings and labor turnover survey, coming in with an extra month delay, we already knew that the May jobs data would be the strongest on record (if only after the catastrophic April loss of 20MM jobs), and sure enough that’s what the BLS confirmed moments ago when it revealed that in May the number of job openings jumped from a revised 4.996 million to 5.397 million, beating the expectation for a continued drop to 4.5 million (after plunging from 6 million to just 5 million in April, a level last seen in 2014).

Job openings rose in accommodation and food services (+196,000), retail trade (+147,000), and construction (+118,000); they declined in information (-55,000), federal government (-37,000), and educational services (-27,000). The number of job openings increased in the South region.

While we already knew that the series of 24 consecutive months in which there were more job openings than unemployed workers ended with a thud in March, in April it was an absolute doozy with 18 million more unemployed workers than there are job openings, the biggest gap on record. In May the gap closed somewhat, with 15.6 million more unemployed than available job openings. As a result, there were about 3.9 unemployed workers for every job opening.

There was a silver lining in the number of hires which after plunging to a decade-low 4 million in April, soared by 1.5 million in May to a record high 6.487MM. Hires increased in a number of industries, with the greatest rise in accommodation and food services (+763,000), followed by health care and social assistance (+479,000), and construction (+427,000).

Additionally, as hires soared in May, separations tumbled from 10 million to just 4.1 million. Of these, the number of layoffs collapsed to just 1.8 million in May from 7.7 million in April, and a record 11.5 million in March.The number of layoffs and discharges decreased in May to 1.8 million (-5,912,000) and 1.4 percent, respectively. The rate, which had reached a series high of 7.6 percent in March, is now much closer to the pre-pandemic rate of 1.2 percent in February. The number of layoffs and discharges decreased for total private to 1.7 million (-5,809,000) and for government to 124,000 (-103,000). The layoffs and discharges level decreased in all but one industry. The largest declines occurred in accommodation and food services (-1,251,000), followed by retail trade (-758,000), and other services (-698,000). Layoffs and discharges increased in federal government (+16,000).

And, with far fewer people getting fired, there was a modest increase in the number of people quitting their jobs, which rose to 2.1 million (+190,000). Quits rose to 2.0 million (+228,000) for total private and fell to 108,000 (-38,000) for government.  Quits increased in accommodation and food services (+88,000), durable goods manufacturing (+38,000), and transportation, warehousing, and utilities (+27,000). Quits decreased in state and local government education (-26,000), state and local government, excluding education (-25,000), and educational services (-22,000).

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Gold Spikes Back Above $1800 After Bostic’s Downbeat Comments

Gold Spikes Back Above $1800 After Bostic’s Downbeat Comments

Tyler Durden

Tue, 07/07/2020 – 10:11

Is ‘bad’ news, good news for precious metals?

Raphael Bostic diverged from Powell’s more optimistic outlook, warning this morning that he is seeing signs of a “levelling off” of the US economy’s recovery.

The Atlanta Fed chief told the Financial Times:

“There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise.”

Bostic added that he was “trying to figure out whether this levelling off is something that is a more sustained pattern, or just a pause.”

“Given that possibility, to start thinking about what the next relief package should look like.”

His comments appeared to line up with a renewed bid for gold, sending futures quickly back above $1800 as perhaps this means a renewed easing effort by The Fed (whose balance sheet has also leveled out in recent weeks)…

Gold futures hit $1809.70 as we publish – a new cycle high.

Silver is also spiking…

As Ron Paul recently wrote, with lending facilities providing to the Federal Reserve the ability to give money directly to businesses and governments, the Fed is now just one step away from implementing Ben Bernanke’s infamous suggestion that, if all else fails, the Fed can drop money from a helicopter. These interventions will not save the economy. Instead, they will make the inevitable crash more painful.

The next crash can bring about the end of the fiat monetary system. The question is not if the current monetary system ends, but when. The only way Congress can avoid the Fed causing another great depression is to begin transitioning to a free-market monetary system by auditing, then ending, the Fed.

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Behind Tesla’s Mindblowing Rally: A Flood Of Daytrading Robinhooders

Behind Tesla’s Mindblowing Rally: A Flood Of Daytrading Robinhooders

Tyler Durden

Tue, 07/07/2020 – 10:01

The tremendous Tesla rally continued this morning when the stock surged another $50 in early trading, adding another $9BN in value or roughly the market cap of Halliburton, on absolutely no news. In fact over the past week TSLA is now up 50% on absolutely no news.

The early ramp pushed TSLA market cap to a record $265 billion, making it the same size as Home Depot and, as noted yesterday, bigger than Intel, Netflix, Walt Disney, AT&T, Bank of America and almost all other S&P 500 companies.

So what is behind this ramp? Why the usual retail investor flood of course: according to RobinTrack TSLA – which is already the 12th most popular stock on Robinhood – was the most aggressively bought stock on the retail-heavy exchange in the past 24 hours…

… as retail investors just can’t get enough.

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President Jair Bolsonaro Tests Positive For COVID-19: Brazilian Media

President Jair Bolsonaro Tests Positive For COVID-19: Brazilian Media

Tyler Durden

Tue, 07/07/2020 – 09:45

Brazilian media is reporting early Tuesday that President Jair Bolsonaro has tested positive for coronavirus, but the country and local media are still awaiting official confirmation.

CNBC reports Tuesday morning that “Brazilian news sources, including an affiliate of CNN — report that Bolsonaro has tested positive for the virus, but this has not been verified by CNBC or officially confirmed.”

The prior day Bolsonaro had been feeling unwell and running a high temperature, his office said. The 65-year old leader was described by CNN as having a fever over 100 degrees, and reportedly began taking the anti-malaria pill hydroxychloroquine to help treat the virus. 

He went to the hospital Monday night for a lung scan and said he would get tested for conoronavirus, results of which are expected back this morning.

As recently as this weekend he was photographed enjoying festivities with cabinet members at a July 4th gathering at the American ambassador’s residence, where as is typical for Bolsonaro and his entourage, no one was wearing a mask.

The Brazilian president was siting next to US Ambassador to Brazil, Todd Chapman, during the party, raising concern. The New York Times reports the potential exposure has prompted Chapman to get tested:

Also on Monday night, the U.S. embassy signaled concern that the ambassador might have been exposed to the virus, saying that Mr. Chapman does not have any symptoms but intends to get tested and “is taking the proper precautions,” including following contact tracing protocols established by the Centers for Disease Control.

All of this comes after early in the pandemic crisis multiple aides of the Bolsonaro tested positive after a trip to meet with President Trump at his Mar-a-Lago estate.

Since then the Brazilian president has tested negative for COVID-19 three times. He’s also come under intense criticism locally and internationally for a seemingly cavalier approach to the virus.

According to CNBC this instance, and with symptoms present, is enough to prompt prompt cancelling all presidential events: “Local media reported Bolsonaro has canceled all his official activities until he gets the results of his test for Covid-19.”

Brazil still ranks second in the world behind the United States in both confirmed COVID-19 cases and deaths. 

developing…

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Part III: Barr v. AAPC and Stare Decisis

I have published two posts on Barr v. AAPC. The first considered judicial departmentalism. The second focused on content-based restrictions. Here, I will tease out the discussions of stare decisis.

First, Justice Kavanaugh faults Justice Breyer’s “scholarly separate opinion.” The plurality argues that Justice Breyer in fact seeks to overrule “longstanding” First Amendment precedent:

In his scholarly separate opinion, JUSTICE BREYER explains how he would apply freedom of speech principles. But the Court’s longstanding precedents, which we carefully follow here, have not adopted that ap­proach. In essence, therefore, JUSTICE BREYER argues for overruling sev­eral of the Court’s First Amendment cases, including the recent 2015 de­cision in Reed v. Town of Gilbert (2015). Before overruling precedent, the Court usually requires that a party ask for overruling, or at least obtains briefing on the overruling question, and then the Court carefully evaluates the traditional stare decisis factors. Here, no party has asked for overruling, and JUSTICE BREYER’s opinion does not analyze the usual stare decisis factors. JUSTICE BREYER’s opinion therefore dis­counts both the Court’s precedent and the Court’s precedent on prece­dent.

Justice Breyer countered that the precedent is far from settled:

Moreover, it is no answer to claim that this Court’s precedents categorically require such an analysis. Our First Amendment jurisprudence has always been contextual and has defied straightforward reduction to unyielding categorical rules. The idea that broad language in any one case (even Reed) has categorically determined how content discrimination should be applied in every single context is both wrong and reflects an oversimplification and over-reading of our precedent. The diversity of approaches in this very case underscores the point that the law here is far from settled.

If I read Breyer correctly, the Court’s First Amendment’s jurisprudence is so context-specific that we do not actually have any First Amendment jurisprudence. Instead, Breyer argues, we should look to First Amendment “values.” OK. Justice Kagan, who has made stare decisis her defining cause, must have had some trouble joining this paragraph. Maybe the Chief can identify substantive due process “values.” That analysis will make post-June cases far easier to decide.

Justice Kavanaugh also wields stare decisis to critique Justice Gorsuch’s separate opinion. Justices Gorsuch wrote:

Respectfully, if this is what modern “severability doctrine” has become, it seems to me all the more reason to reconsider our course.

The plurality says Gorsuch is wrong to reconsider long-standing precedent concerning severability. Why? Because John Marshall.

JUSTICE GORSUCH suggests more broadly that severability doctrine may need to be reconsidered. But when and how? As the saying goes, John Marshall is not walking through that door.

Huh? I’ve never heard that saying. I googled “John Marshall is not walking through that door.” There are zero results before today. Instead, I think Justice Kavanaugh is alluding to an infamous 2000 press conference with Rick Pitino, who briefly served as coach of the Boston Celtics::

“Larry Bird is not walking through that door, fans. Kevin McHale is not walking through that door, and Robert Parish is not walking through that door,” Pitino said of the Big Three that won three NBA titles in the 1980s. “And if you expect them to walk through that door, they’re going to be gray and old. What we are is young, exciting, hardworking and going to improve. People don’t realize that. And as soon as they realize that those three guys are not coming through that door, the better this town will be for all of us.

Comparing John Marshall to Larry Legend? Give me a break. Justice Kavanaugh is trying way too hard here. The line failed. Regrettably, judges are going to cite that statement as if it were an actual saying about stare decisis, without any knowledge of its context.

Kavanaugh continues.

And this Court, in this and other recent decisions, has clarified and refined severability doctrine by emphasizing firm adherence to the text of severability clauses, and underscoring the strong presumption of severability. The doctrine as so refined is constitutionally well-rooted, see, e.g., Marbury v. Madison, 1 Cranch 137 (Marshall, C. J.), and can be predictably applied. True, there is no magic solution to severability that solves every conundrum, especially in equal-treatment cases, but the Court’s current approach as reflected in recent cases such as Free Enterprise Fund and Seila Law is constitutional, stable, predictable, and commonsensical.

Give me a bigger break. Marbury did not establish modern severability doctrine. Sure, Marshall did not strike down the entire Judiciary Act of 1789. But so what? The Court found that it lacked authority to issue the requested remedy (mandamus), because Congress could not expand its original jurisdiction. What we would today call “severability analysis” was irrelevant in Marbury. Seriously. As a general matter, if you need to cite Marbury to support your argument, your argument lacks sufficient support.

The entire notion of “invalidation” is a modern construct–one that Kavanaugh only partially rejects. And severability doctrine does not lead to “predictable” and “stable” results. The purposivist inquiry is a total crapshoot. I’ll address severability in the fourth installment. But here Kavanaugh overreached.

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