Many Americans Are Now Planning To “Bug Out” Ahead Of Election Day As Authorities Brace For Chaos

Many Americans Are Now Planning To “Bug Out” Ahead Of Election Day As Authorities Brace For Chaos

Tyler Durden

Mon, 10/19/2020 – 17:01

Authored by Michael Snyder via The Economic Collapse blog,

Will you be safe where you currently are if the election results cause chaos to erupt in the streets of our major cities?  A lot of Americans are becoming deeply concerned about their personal safety as we approach November 3rd, because they can see what is coming.  It is going to take a lot of extra time to count all of the votes because tens of millions of Americans are voting by mail this time around, and both sides have recruited armies of lawyers and are prepared to contest the results of the election to the bitter end.  No matter who ends up being declared the winner when it is all over, there will be millions upon millions of very angry voters out there that are likely to feel as though the election was stolen from them, and that is a recipe for widespread societal unrest. 

I truly wish that we could go back and do things differently so that we would not be facing this sort of scenario, but it is too late for that now.  More than 27 million Americans have already voted, and more are voting every day.  Any attempts to fix the process will have to wait for future elections, and without a doubt it definitely needs to be fixed.

It is still difficult for me to believe that I am actually writing about the possibility of violence after a U.S. presidential election, but this is where we are at as a society.

In fact, there is violence in the streets right now.

This should break all of our hearts, because violence is not going to solve anything.

Unfortunately, an increasing number of people are not listening to voices of reason, and we are seeing anger and frustration rise to levels that we have never seen before.

At this point, most Americans are expecting the worst.  To be more specific, one recent survey found that 55 percent of all registered voters expect a rise in violence following the election…

In the YouGov survey, about 55 percent of registered voters said they thought violence would increase in the U.S. following the Nov. 3 presidential election.

Just under 11 percent of respondents said they didn’t expect a rise in violence to occur after the election, while 33 percent of voters were unsure.

Even more alarming, a different survey found that more than 40 percent of Republicans and more than 40 percent of Democrats believe that violence would be at least “a little” justified if their party ends up losing…

In September, 44 percent of Republicans and 41 percent of Democrats said there would be at least “a little” justification for violence if the other party’s nominee wins the election.

I truly wish that those numbers were not real, but they are.

As Election Day draws near, many Americans have decided that “bugging out” is the best thing to do.  For example, one 31-year-old New York resident is going to be staying with her parents on Election day because she believes “the city will be on fire” if Trump wins…

Flatiron resident Andrea, 31, also decided to pack up before Nov. 3. “I went to my parents in New Jersey for about two weeks when the BLM protests got bad and the looting started. So I definitely want to get out of here the week of the election,” said the public-relations specialist, a Republican who asked that her last name not be used. “I’m thinking if Trump wins, it’s going to be a disaster — the city will be on fire. People are going to go nuts.”

And 42-year-old Ooana Trien is planning to spend Election Day out of the city because she is concerned that “protesters will try and burn down Trump Tower”

The Trump supporter, who is mailing in her ballot, plans to open up her doors to others looking to escape. “I told my friends that whoever wanted to get out of the city was welcome here. One friend who lives in Washington Heights is going to vote in the morning [on Nov. 3] and come straight up to the beach,” she said. “My mother thinks that whether [Trump] wins or loses, protesters will try and burn down Trump Tower.”

Law enforcement authorities all over the nation are also deeply concerned about the potential for violence.

For example, in New Jersey officials have warned that we could potentially see “civil unrest resulting in riots, violent acts, and fatalities”

“Election result delays and recounts could result in protests and attempts to occupy election offices,” officials with the New Jersey Department of Homeland Security and Preparedness warned in a threat assessment issued in late September.

“Incidents of civil unrest resulting in riots, violent acts, and fatalities will converge with election uncertainty, producing confrontations between protesters and counter-demonstrators challenging election outcomes,” it noted.

Yes, you read that correctly.

They actually used the word “fatalities”.

In New York, residents were rattled by a leaked NYPD memo that warned of violent protests from October 25th through the early portion of 2021

New Yorkers are on edge after a leaked NYPD memo, obtained by The Post, revealed this week that police are preparing for protests to begin as early as Oct. 25 and grow in intensity through next year. The department decreed officers should “be prepared for deployment,” adding: “This November 3rd will be one of the most highly contested presidential elections in the modern era. There is also a strong likelihood that the winner of the presidential election may not be decided for several weeks.”

In Arizona, the information security officer for Maricopa County is encouraging people to have law enforcement authorities on speed dial just in case something happens

“Make sure that you’re reaching out to your law enforcement and say, on and around Election Day, what is our plan?” he said. “Do you have an emergency contact list? Do you have your police department, your sheriff, whoever, on speed dial ready to get them to respond to any kind of threat?”

Election Day is now just a little over two weeks away, and emotions are running really high.

Most Democrats fully expect Joe Biden to win, and many of them are still anticipating a landslide.

Of course most Republicans believe that the national polls are completely wrong again and that President Trump will ultimately emerge victorious.

In the end, one side will be proven wrong and the disappointment that they will feel will be very, very bitter.

We all remember the rioting that we witnessed earlier this year, and many believe that what is ahead could be far, far worse.

In 2020, gun sales have soared to levels that we have never seen before, and many Americans find themselves purchasing guns for the very first time.  One of those first time buyers is a 44-year-old single mother named Andreyah Garland

Andreyah Garland, a 44-year-old single mother of three daughters, bought a shotgun in May for protection in the quaint middle-class town of Fishkill, New York. She joined a new and fast-growing local gun club to learn how to shoot.

According to Reuters, a “potentially contested election that many fear could spark violence” played a role in her decision to purchase a firearm…

Like legions of other first-time buyers who are contributing to record sales for the U.S. gun industry this year, Garland’s decision to take up arms is driven in part by disturbing news about the coronavirus pandemic, social unrest over police killings of Black people and a potentially contested election that many fear could spark violence.

“With everything going on around us,” she said, “you see a need.”

If you could go back 50 years ago and tell Americans what conditions would be like in 2020, most of them would not believe you.

Our society is literally melting down right in front of our eyes, and I don’t think that anyone is going to be able to stop it from happening.

Of course this election will come and go, but the social instability that we are witnessing will remain, and at this point everyone should be able to see that America is heading into a very dark future.

via ZeroHedge News https://ift.tt/3m50pzQ Tyler Durden

IBM Reports Lowest Revenue This Century, Slowdown In Cloud, And Another Grotesque EPS Fudge

IBM Reports Lowest Revenue This Century, Slowdown In Cloud, And Another Grotesque EPS Fudge

Tyler Durden

Mon, 10/19/2020 – 16:48

There was some hope last year that IBM was finally turning things around: after all, after 5 consecutive quarters of declining revenues, the company had just managed to grow its top-line for the first time since Q2 2018, and only for the 4th time in the past 8 years. Alas it was not meant to be, and moments ago IBM revealed that revenue declined in Q3, dropping for the third consecutive quarter, sliding another 2.6%, and while Red Hat sales boosted cloud and cognitive sales by 7% to $5.55BN Y/Y the number was an ominous slowdown in cloud sales of $5.748BN reported last quarter, with total Y/Y cloud growth also slowing from 30% in Q2 to just 19% last quarter.

Then again “boosted” may be using the term loosely: at $17.560BN in total revenue, and just shy of consensus expectations of a $17.6BN print, IBM’s Q3 2020 was its worst quarter for sales this century, below even the Q1 “covid quarter” revenue of $17.571 billion.

Some more Q3 revenue details, which beat across the key categories:

  • Cloud and cognitive software revenue $5.55 billion, estimate $5.41 billion
  • Global business services revenue $3.97 billion, estimate $3.93 billion
  • Global technology services revenue $6.46 billion, estimate $6.33 billion
  • Systems revenue $1.26 billion, estimate $1.46 billion
  • Global Financing revenue $273 million, estimate $280.6 million

And while IBM’s EPS of $2.58 came inline with expectations, and down 4% Y/Y, as usual this was the product of lots of “artificial intelligence” and aggressive accounting magic because the unadjusted EPS was $1.89, or 27% below the adjusted number. The GAAP to non-GAAP bridge was, as usual, ridiculous and a continuation of an “one-time, non-recurring” addback trend that started so many years ago we can’t even remember when, but one thing is certain: none of IBM’s multiple-time, recurring charges are either one-time, or non-recurring.

And here is the actual “beat” in context:

“The strong performance of our cloud business, led by Red Hat, underscores the growing client adoption of our open hybrid cloud platform,” said IBM CEO Arvind Krishna. “Separating the managed infrastructure services business creates a market-leading standalone company and further sharpens our focus on IBM’s open hybrid cloud platform and AI capabilities. This will accelerate our growth strategy and better position IBM to seize the $1 trillion hybrid cloud opportunity.”

To be sure, while IBM was clear to delineate this $1 trillion TAM, just like the past two quarters, IBM did not have enough visibility into the future to give any guidance, yet it was confident enough that no matter what happens it will keep handing almost every penny it makes to its shareholders, and then some: in Q3, when IBM’s free cash flow was just $1.1 billion, the company returned all of that and more to shareholders in dividends: some $1.5 billion.

Naturally, that’s not how CFO James Kavanaugh saw it: “In the third quarter we continued to deliver strong gross profit margin expansion, generated solid free cash flow and maintained a sound capital structure with ample liquidity. We have the necessary financial flexibility to increase our investments in hybrid cloud and AI technology innovation and skills, while remaining committed to our long-standing dividend policy.”

And speaking of cash flow, IBM ended the second quarter with $15.6 billion of cash on hand which includes marketable securities, up $1.3 billion from Q2. Debt, including Global Financing debt of $20.9 billion, totaled $65.4, up from $64.7 billion. 

So while IBM’s core business remains a melting ice cube, the bigger concern was the slowdown in Cloud growth, which led to another century-low revenue, and after algos read through the boilerplate, was enough to send IBM stock down by about 1%.

via ZeroHedge News https://ift.tt/2Hh8lP9 Tyler Durden

Senate Republicans Sour on Trump as They Try To Save Their Majority

sfphotosfour761074

Earlier this year, Senate Republicans saved Donald Trump’s presidency from a premature end. Now some of those same senators are acting like they don’t think Trump will be around much longer.

“The best check on a Biden presidency is for Republicans to have a majority in the Senate,” Sen. Thom Tillis (R–N.C.) told Politico recently. And now two Senate Republicans are explicitly criticizing the president.

In an interview with the Fort Worth Star-Telegram, Sen. John Cornyn (R–Texas) claimed to have differed with Trump on several issues, including trade, the debt and deficit, and using military funds to build the border wall. Cornyn described his relationship with Trump as an almost strained one.

Similarly, Sen. Ben Sasse (R–Nebr.), in comments leaked to the Washington Examiner, described Trump as someone who “kisses dictators’ butts” and “sells out our allies.” Sasse went out to say that Trump “mocks evangelicals behind closed doors. His family has treated the presidency like a business opportunity. He’s flirted with white supremacists.” And he thinks young people may “become permanent Democrats because they’ve just been repulsed by the obsessive nature of our politics or if women who were willing to still vote with the Republican Party in 2016 decide that they need to turn away from this party permanently in the future.”

These aren’t the only Senate Republicans to speak negatively about the man in the White House. Senate Majority Leader Mitch McConnell (R–Ky.) recently criticized the president’s COVID-19 response, saying at an event in Kentucky that Trump was not “approaching protections from this illness in the same way that I thought was appropriate.”

Unsurprisingly, Trump’s response has been heated. On Twitter, he called “Little Ben Sasse” “stupid and obnoxious” and a “liability to the Republican Party” and urged the senator to “gracefully ‘RETIRE.'”

Tillis, Sasse, Cornyn, and McConnell seem to be expecting a Trump loss, and thus may be preparing to stand as a more traditionally conservative opposition to a Biden administration. And Cornyn and Sasse may be trying preemptively to rehabilitate themselves from Trumpism. Both senators face reelection races, and the latter may have presidential ambitions of his own. While both Cornyn and Sasse are likely to win their elections, the fact that they feel the need to emphasize this message is telling.

There is only so much that words can do here. Both Cornyn and Sasse voted against bringing more witnesses to impeachment. Cornyn claims that he was opposed to using a national emergency declaration to fund Trump’s border wall, but voted against a bill that would have stopped just that.

But even empty rhetoric can have political ramifications. Sasse and Cornyn’s comments could be an early sign of a larger Senate trend.

from Latest – Reason.com https://ift.tt/2H74G73
via IFTTT

CNN, New Yorker Suspend Jeffrey Toobin For Showing His Dick In A Zoom Call

CNN, New Yorker Suspend Jeffrey Toobin For Showing His Dick In A Zoom Call

Tyler Durden

Mon, 10/19/2020 – 16:39

From the “Not, The Onion” file (which is becoming far too regular in this farcical new normal), legal analyst Jeffrey Toobin has been suspended by CNN and The New Yorker after he exposed himself during a Zoom call last week between members of the New Yorker and WNYC radio.

“I made an embarrassingly stupid mistake, believing I was off-camera,” Mr. Toobin said in a statement to Vice, which reported the incident and the magazine’s investigation.

“I apologize to my wife, family, friends and co-workers.”

“I believed I was not visible on Zoom,” Mr. Toobin said of the call, which Vice, citing unnamed sources, said took place last week.

“I thought no one on the Zoom call could see me. I thought I had muted the Zoom video.” Mr. Toobin could not be immediately reached on Monday afternoon.

Natalie Raabe, a spokesperson for the New Yorker, confirmed that “Toobin has been suspended while we investigate the matter,” Vice reported. 

“Generously”, CNN has “granted” Toobin some time off too

It appears Mr. Toobin is popular among Canadian Twitterati…

 

via ZeroHedge News https://ift.tt/37pFbZ8 Tyler Durden

Will The Stock Market Be Dragged To The Guillotine?

Will The Stock Market Be Dragged To The Guillotine?

Tyler Durden

Mon, 10/19/2020 – 16:20

Authored by Charles Hugh Smith via OfTwoMinds blog,

The Fed’s rigged-casino stock market will be dragged to the guillotine by one route or another.

The belief that the Federal Reserve and its rigged-casino stock market are permanent and forever is touchingly naive. Never mind the existential crises just ahead; the financial “industry” (heh) projects unending returns of 7% per year, or is it 14% per year? Never mind the details, the Fed has our back and since the Fed is forever, so too will be the gains for everyone playing the rigged games in the Fed’s casino.

What makes this presumption so childishly naive is the tides of history are about to sweep away the era of central banks, their fiat currencies and their rigged casino markets. That the global citizenry might realize these are all forms of financial tyranny doesn’t occur to to the Financial Aristocracy, which has luxuriated in the neofeudal dominance of finance–the modern-era equivalent of Monarchy and the rights of royalty.

Under the guidance of the Financial Aristocracy, so-called democratic governance has mutated into totalitarian democracy, that is, a “democracy” in name only, a carefully managed simulacrum that props up a facade of “democracy” that is pure PR.

The Fed is busy planning a pivot to becoming “the people’s source of free money forever” to save itself from oblivion. The pivot is called FedNow, an instant-payment system which bypasses both the traditional private banking sector and Congressional control of distributing money.

With FedNow, the Fed will be able to create trillions of dollars out of thin air and distribute the trillions directly into household accounts at the Fed. The idea here is that an economy that is no longer financially viable can be propped up indefinitely by Fed free money; all we need to do is bypass the obsolete private banking sector (sorry about that, buckos) and the equally obsolete shards of totalitarian democracy (Congress, the presidency, etc.) and stave off the revolt with endless free money.

That endless free money stripped of the last vestiges of discipline will stoke an inflationary death spiral–well, we’ll worry about that tomorrow. The irony here is the Fed is only accelerating the demise of central banking, fiat currency and its rigged-casino stock market with its FedNow scheme to maintain its financial tyranny.

Alas, tyranny is still tyranny, feudalism is still feudalism, and history remains unkind to totalitarian regimes–even those which have morphed into a clever totalitarian democracy.

The Fed’s rigged-casino stock market will be dragged to the guillotine by one route or another: either a populist reform that dismantles the neofeudal financial tyranny of central banks and their soon-to-be-worthless fiat currencies, or the implosion of the entire corrupt neofeudal financial system of central banking, fiat currencies and rigged casino markets, all of which are nothing more than engines of inequality.

*  *  *

My recent books:

A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook coming soon) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.
 

via ZeroHedge News https://ift.tt/3o9mrmP Tyler Durden

Black-ish Monday: Stimulus Stumble Sparks Big-Tech’s Worst Streak In 14 Months

Black-ish Monday: Stimulus Stumble Sparks Big-Tech’s Worst Streak In 14 Months

Tyler Durden

Mon, 10/19/2020 – 16:00

The entire market is now playing a game of deal, or no deal and today’s “no deal” headlines sent stocks reeling…

Nasdaq was down for the 5th straight day, its longest losing streak since Aug 2019…

Interesting the drop starte to accelerate around 1430ET – margin call time.

This drops Nasdaq to 10-day lows, erasing ‘Nasdaq Whale’ gains…

And erases most of last week’s (early) relative outperformance of Nasdaq vs Small Caps…

As we detailed earlier, it would seem the short-squeeze ammunition in Nasdaq futs has run out…

Source: Bloomberg

And escalated quickly today…

Source: Bloomberg

But what was remarkable was the near record surge between the Oct 6 net short of -75K and the subsequent week’s net long position of +17.8K. This was the biggest 3-week surge in NQ contracts in more than 15 years, and the second highest increase on record.

Source: Bloomberg

FANG Stocks sank further…

Source: Bloomberg

And Financials floundered…

Source: Bloomberg

VIX jumped back above 29 today…

Source: Bloomberg

Treasury yields were marginally higher on the day, despite equity weakness (but all the TSY selling was around the European open)…

Source: Bloomberg

And note that the overnight selling in 10Y pushed yields up to unch from the previous Friday before reversing…

Source: Bloomberg

The dollar ended the day lower but erased a lot of its losses as stocks began to dump in the afternoon…

Source: Bloomberg

Crypto was higher today with Bitcoin spiking back above $11,800, breaking put of its recent tight range…

Source: Bloomberg

Gold had a big roundtrip on the day, ending unch…

Silver followed a similar path, with futs topping $25 briefly…

WTI slipped back below $41 as demand fears drifted back…

 

Finally, as we noted earlier, today is the 33rd anniversary of Black Monday (of course, it’s different this time)…

Source: Bloomberg

Now that would be an ‘October Surprise’…

Excerpted from Art Cashin’s reminisces of that day in 1987 (rings a lot of bells for 2020)…

The first two-thirds of 1987 on Wall Street was nothing short of spectacular… Fear seemed to disappear, and junior traders laughed at their cautious elders. The brash youngsters told each other to “buy strength” rather than sell it, as each buying wave was soon followed by another.

[ZH: Robinhooders?]

One thing that helped banish fear was a new process called “portfolio insurance.” It involved use of the newly expanded S&P futures. Somewhat counterintuitively, it involved selling when prices turned down.

[ZH: Nasdaq Whale buying calls, driving dealer gamma to extremes]

The rally topped out about Aug. 25, with the hitting 2,722 (less than a tenth of its current numerical value). Interest rates had begun creeping up amid concerns of early signs of inflation.

[ZH: Rally topped a week after that in 2020]

On Wednesday, Oct. 14, there were widely discussed rumors of a new punitive tax on takeover profits.

[ZH: Worries over Biden’s tax plan?]

Friday the 16th was an option expiration day… selling intensified into the close.

[ZH: Today is op-ex day.. and selling intensified into the close]

The weekend was a rumormonger’s delight.

[ZH: Well there is sure a lot of discussion about potentially shocking videos of Hunter Biden…]

And don’t forget that we had margin increases across most of the major retail brokerages last week.

via ZeroHedge News https://ift.tt/34d2gw5 Tyler Durden

Supreme Court Decides to Take a Border Wall Case

Border Wall 2

Earlier today, as Jonathan Adler notes, the Supreme Court decided to hear Trump v. Sierra Club, one of several cases involving challenges to President Trump’s diversion of various funds to build his border wall. The Ninth Circuit court decision in this particular case addresses Trump’s efforts to Section 8005 of the 2019 Department of Defense Appropriations Act to use some $2.5 billion in military construction funds to build parts of the wall. It should not be confused with a similar case (also decided by the Ninth Circuit, and involving most of the same parties), which ruled against Trump’s efforts to divert military construction funds by using 10 USC Section 2808, one of a number of powers triggered by Trump’s declaration of a “national emergency” at the southern border.  Unlike the Section 2808 case, the current case does not involve the crucial issue of the scope of presidential “emergency” powers.

As a general rule, a Supreme Court decision to hear a case is not good news for whichever party prevailed in the lower courts (in this case the plaintiffs opposing the border wall). It is certainly possible that the conservative majority in the Supreme Court decided to take the case because they want to overrule the Ninth Circuit on the merits—i.e.  conclude that Trump had the authority to use Section 8005 to divert the funds. But other scenarios are also possible.

In both this case and an earlier, preliminary, Ninth Circuit ruling on the same subject, the lower-court dissenters focused mainly on the procedural argument that the plaintiffs in the case lacked a proper “cause of action” to challenge the funding diversion. This is in fact one of the questions the Supreme Court chose to consider. If they overturn the Ninth Circuit on procedural grounds, that leaves open the possibility that other parties can still challenge the funding diversion and secure a ruling on the merits against it. For example, the US Court of Appeals for the DC Circuit—in a decision written by prominent conservative Judge David Sentelle—recently ruled that the Democratic-controlled House of Representatives has standing to pursue a claim based on constitutional separation of powers grounds.

A ruling on the merits in favor of the administration would be an important victory for Trump. But it could still leave open the possibility that he can transfer funds using Section 8005, but not Section 2808, thereby denying him access to some of the pots of money he wants to use.

Finally, it is possible that the Court took the case because a majority of justices would like to rule against the administration on the merits. In this scenario, the justices might wantto send a strong signal that presidents are not allowed to play fast and loose with the spending power, which properly belongs to Congress.

Many observers seem to assume that this issue will necessarily divide the justices along ideological lines. If so, the plaintiffs are going to lose. But not all the lower court rulings have split in that way. The dissenters in various Ninth Circuit cases on the wall diversion have both been conservative Republican appointees, Judge Daniel Collins in this case and the Section 2808 case, and Judge N. Randy Smith in the preliminary injunction ruling on the current case. On the other hand, the majority in the latter decision included Judge Richard Clifton, a George W. Bush appointee. And, as already noted, prominent conservative Judge David Sentelle authored the recent DC Circuit ruling against the administration in the case  brought by the House of Representatives. Assuming, as is likely, that the three liberal justices will probably vote with the plaintiffs, the latter will need only two conservative “defectors” to prevail.

It is also possible that the whole case will be mooted out before the Supreme Court has a chance to decide it. If Joe Biden wins the presidential election, he is likely to simply terminate the entire funding diversion effort, as he has promised to do.

Otherwise, the Court will have to make some sort of ruling. If they reach the merits, it could set a major precedent on separation of powers and Congress’ authority over federal spending. The stakes in the case go far beyond the specific issue of wall construction. If Trump has nearly limitless authority to divert various  types of construction funds to wall building, future presidents can use the same power to fund all sorts of other projects.

I discussed the broader issues at stake in the wall litigation in greater detail here, here, and here. Some of them are not directly in play in the Section 8005 case. For example, the Section 8005 case does not address the questions of whether Trump can use the power of eminent domain to seize property for the border wall, and whether his declaration of a “national emergency” is legal.

 

from Latest – Reason.com https://ift.tt/3dGck3P
via IFTTT

Supreme Court Decides to Take a Border Wall Case

Border Wall 2

Earlier today, as Jonathan Adler notes, the Supreme Court decided to hear Trump v. Sierra Club, one of several cases involving challenges to President Trump’s diversion of various funds to build his border wall. The Ninth Circuit court decision in this particular case addresses Trump’s efforts to Section 8005 of the 2019 Department of Defense Appropriations Act to use some $2.5 billion in military construction funds to build parts of the wall. It should not be confused with a similar case (also decided by the Ninth Circuit, and involving most of the same parties), which ruled against Trump’s efforts to divert military construction funds by using 10 USC Section 2808, one of a number of powers triggered by Trump’s declaration of a “national emergency” at the southern border.  Unlike the Section 2808 case, the current case does not involve the crucial issue of the scope of presidential “emergency” powers.

As a general rule, a Supreme Court decision to hear a case is not good news for whichever party prevailed in the lower courts (in this case the plaintiffs opposing the border wall). It is certainly possible that the conservative majority in the Supreme Court decided to take the case because they want to overrule the Ninth Circuit on the merits—i.e.  conclude that Trump had the authority to use Section 8005 to divert the funds. But other scenarios are also possible.

In both this case and an earlier, preliminary, Ninth Circuit ruling on the same subject, the lower-court dissenters focused mainly on the procedural argument that the plaintiffs in the case lacked a proper “cause of action” to challenge the funding diversion. This is in fact one of the questions the Supreme Court chose to consider. If they overturn the Ninth Circuit on procedural grounds, that leaves open the possibility that other parties can still challenge the funding diversion and secure a ruling on the merits against it. For example, the US Court of Appeals for the DC Circuit—in a decision written by prominent conservative Judge David Sentelle—recently ruled that the Democratic-controlled House of Representatives has standing to pursue a claim based on constitutional separation of powers grounds.

A ruling on the merits in favor of the administration would be an important victory for Trump. But it could still leave open the possibility that he can transfer funds using Section 8005, but not Section 2808, thereby denying him access to some of the pots of money he wants to use.

Finally, it is possible that the Court took the case because a majority of justices would like to rule against the administration on the merits. Many observers seem to assume that this issue will necessarily split the justices along ideological lines. If so, the plaintiffs are going to lose. But not all the lower court rulings have split in that way.

The dissenters in various Ninth Circuit cases on the wall diversion have both been conservative Republican appointees, Judge Daniel Collins in this case and the Section 2808 case, and Judge N. Randy Smith in the preliminary injunction ruling on the current case. On the other hand, the majority in the latter decision included Judge Richard Clifton, a George W. Bush appointee. And, as already noted, prominent conservative Judge David Sentelle authored the recent DC Circuit ruling against the administration in the case  brought by the House of Representatives. Assuming, as is likely, that the three liberal justices will probably vote with the plaintiffs, the latter will need only two conservative “defectors” to prevail.

It is also possible that the whole case will be mooted out before the Supreme Court has a chance to decide it. If Joe Biden wins the presidential election, he is likely to simply terminate the entire funding diversion effort, as he has promised to do.

Otherwise, the Court will have to make some sort of ruling. If they reach the merits, it could set a major precedent on separation of powers and Congress’ authority over federal spending. The stakes in the case go far beyond the specific issue of wall construction. If Trump has nearly limitless authority to divert various  types of construction funds to wall building, future presidents can use the same power to fund all sorts of other projects.

I discussed the broader issues at stake in the wall litigation in greater detail here, here, and here. Some of them are not directly in play in the Section 8005 case. For example, the Section 8005 case does not address the questions of whether Trump can use the power of eminent domain to seize property for the border wall, and whether his declaration of a “national emergency” is legal.

 

from Latest – Reason.com https://ift.tt/3dGck3P
via IFTTT

Morgan Stanley: 10% Correction Coming After Failure To Breach 30 Year Resistance

Morgan Stanley: 10% Correction Coming After Failure To Breach 30 Year Resistance

Tyler Durden

Mon, 10/19/2020 – 15:49

Back on September 2, when stocks hit an all time high, we asked if it “could be this simple” when showing the long-term resistance of the S&P:

Well, at least so far, the answer appears to be yes and is also the reason why in his weekly focus note, Morgan Stanley’s chief equity strategist Michael Wilson writes that last week’s failure to break through technical resistance for second time “suggests the correction isn’t over.”

To that point, last month and shortly after our initial observation, Wilson laid out his view that long-term resistance in the S&P500 around the 3550 level would be very difficult to surpass prior to the outcome of the US election and passage of CARES 2. As he explains “this view was based on very strong long-term technical resistance going back to the late 1980s.”

Then, just days later, the index quickly retreated for its first 10% correction in this new bull market, and while last Monday the index once again staged a valiant effort to break through, it was thwarted once again. Of concern to Wilson is that this second attempt occurred on less momentum, “suggesting the correction that began in September is likely not complete.”

Furthermore, the Morgan Stanley strategist also highlights the lack of a fiscal stimulus deal, election outcome/timing of final results, and second wave of the virus “as the primary headwinds to higher prices in the near term.”

So with both fundamentals drivers and technicals limiting stock upside limited, with so many uncertainties over the next month Wilson says that “another 10% correction from Monday’s highs is the most likely outcome in the near term before this bull market can resume, at least at the index level.”

Next, to quantify the potential downside, Wilson says that he continues to view the 200-day moving average for formidable support from a technical standpoint, which today is at 3123.

Then, from a valuation perspective, Wilson refers to one of his preferred market indicators, the Equity Risk Premium, which he says “looks too low” given the near-term uncertainties and upside risk to long-term rates we see. As such, he would be more comfortable with a buffer of 50 bps to add risk here. Such an adjustment implies an ERP of ~425bps rather than the 375bps indicated by current level of realized vol and is shown in the next chart.

It’s also how he gets the 10% downside estimate: at 380 bps and with a 10-year Treasury yield at 0.75%, the current S&P 500 P/E multiple is ~22x. If one add the 50bps buffer noted above to the implied ERP from Exhibit 3 while holding the 10-year yield constant, we get a 2 multiple drop in the P/E to 20x, which implies 10% downside. Coincidentally, this also lines up with the 200-day moving average noted above.

Bottom line, Morgan Stanley urges investors to remain “disciplined” on new money entry points, favoring the low end of our 3100-3550 range we established back in August.

Finally, to avoid any bearish labels, Wilson as usual concludes on a bullish note, writing that the recovery and new bull market “remain on track to resume next year. More importantly, we think the average stock will outperform the major average (SPX), which is now highly concentrated to the top 20 largest stocks.” He believes that the best way to express this view is by owning an equal weighted S&P 500 relative to the market cap weighed S&P or by skewing one’s portfolio to smaller capitalization stocks that can deliver better operating leverage and earnings growth next year.

via ZeroHedge News https://ift.tt/37lNNjn Tyler Durden

TSA Passenger Traffic Tops One Million Sunday As Return To Normalcy Continues 

TSA Passenger Traffic Tops One Million Sunday As Return To Normalcy Continues 

Tyler Durden

Mon, 10/19/2020 – 15:35

Shares of US airlines lifted off Monday morning after data this past weekend showed passenger numbers hit seven-month highs as air travelers take advantage of super low-cost airfare despite the reemergence of COVID-19.

TSA published a press release early Monday saying it “screened over 1 million passengers Sunday, representing the highest number of passengers screened at TSA checkpoints since March 17, 2020.” 

The release continued: “In addition to screening one million passengers in a single day, TSA screened 6.1 million passengers at checkpoints nationwide during the week (Mon., October 12 through Sun., October 18). That weekly volume also represents the highest weekly volume for TSA since the start of the COVID-19 pandemic.”

h/t Reuters

According to TSA spokesperson Lisa Farbstein, airport security checkpoints nationwide screened 1,031,505 people on Sunday – this is still 60% lower than one year ago. 

TSA numbers this month show a return to normalcy, about eight months since the virus pandemic began. So far, the numbers this month show a rapid increase in travelers: 

  • Oct. 18 – 1,031,505 people screened
  • October 14 – 717,940 people screened
  • October 7 – 668,519 people screened

Readers may recall the lowest number of people screened at US airports was 87,534 on April 14, during lockdowns, where much of the airline and travel and tourism industry ground to a halt. 

The increase in air travel has occurred as US virus cases topped 70,000 last Friday, the highest level since July. Single-day caseload records were seen in Wyoming, Minnesota, Wisconsin, West Virginia, North Dakota, Indiana, New Mexico, Utah, and Colorado. 

As we’ve pointed out to our millennial readership, roundtrip airfare has never been cheaper – and with the virus mainly affecting the older segments of the population – now could be the time to travel. 

Goldman Sach’s Jan Hatzius compiled travel and tourism high-frequency data that suggests US air travel is steadily increasing from the April-May trough. US international passenger arrivals at the top five airports are also rising. Global air travel has rebounded as well. 

Another proxy of the travel and tourism rebound is Airbnb searches, which rebounded and recovered back to the February baseline but have since slumped into fall. 

Robinhood traders have spent the last seven months panic buying JETS ETF, with hopes the airline industry will recover in a “V-shaped” fashion.

The question traders have on their mind: How long will it take for the airline industry to recover?

With a full recovery not expected anytime soon, the latest air travel increase could come to an abrupt end this fall/winter as virus cases are expected to continue to rise. Nevertheless, there’s no proven or commercialized COVID-19 vaccine available – deterring many from flying. Is this as good as it gets?

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