Tag: news

Buttigieg Makes the Democratic Case for Cutting Debt

“It’s not fashionable in progressive circles to talk too much about the debt,” said Democratic presidential candidate Pete Buttigieg at a town hall in New Hampshire this weekend, blaming this on “the way it’s been used as an excuse against investment.

“But if we’re spending more and more on debt service now, it makes it harder to invest in infrastructure and health and safety net that we need right now,” continued Buttigieg, whose past résumé includes a stint as a management consultant in addition to his time in the U.S. military and as the mayor of South Bend, Indiana. “And also this expansion…isn’t going to go on forever.”

Buttigieg said it’s time for Democrats to “get a lot more comfortable owning this issue, because I see what’s happening under this president—a $1 trillion deficit—and his allies in Congress do not care. So we have to do something about it.”

It’s certainly rare for a prominent Democrat to talk about deflating America’s ever-ballooning deficit, especially this election cycle. And good on Buttigieg for calling out Republican hypocrisy on this issue too. (Welcome to the club.)

But Buttigieg offered no specifics on how he would manage to cut debt while still expanding “infrastructure and health and safety net.”

“Asked to back up Buttigieg’s claim to fiscal responsibility, a campaign aide pointed to a recent study by the Progressive Policy Institute that says the tax revenues Buttigieg has proposed to raise would narrowly exceed his new spending,” reports NBC’s Sahil Kapur.

Still, at this point, even a small nod to fiscal responsibility from the 2020 candidates feels like weekend. And Buttigieg is now a top-tier candidate.

Over the weekend, Iowa Democrats finally released concrete results from last week’s caucuses, showing Buttigieg with a 0.1 percent lead over Sen. Bernie Sanders (I–Vt.) in the number of state delegate equivalents earned. Voters in New Hampshire go to the primaries tomorrow.

Meanwhile, President Donald Trump’s proposed budget for fiscal year 2021—a $4.38 trillion package to be presented to Congress today—includes $740.5 billion in military spending, a 0.3 percent increase over this year. It also includes $590 billion for non-military spending, down 5 percent from 2020. “Trump’s budget has no chance of winning approval in Congress,” notes USA Today, “but it does reflect his priorities as he pursues re-election.”

FREE MINDS

Remembering Victoria Woodhull. “She was the first woman to run for president, the first to address a congressional committee, and the first to own a brokerage on Wall Street. She was also a con artist, a gold digger, and a scandal magnet,” writes John Strausbaugh in National Review:

When she ran for president in 1872, she sat out Election Day in a Manhattan jail, arrested on charges of obscenity. Victoria Woodhull was unquestionably a pioneer in women’s rights, yet her legacy is so messy and complicated that she remains an outlier in feminist history.

More here.

FREE MARKETS

More tough-on-tech posturing. Sen. Josh Hawley, endless font of bad ideas, wants to make the Federal Trade Commission (FTC) a part of the U.S. Justice Department. “The FTC isn’t working,” the Missouri Republican senator said in a statement. “Nobody is accountable for decisions.”

So far, so good. But,alas, Hawley’s complaint isn’t that the agency engages in too much meddling. He thinks it doesn’t do enough, at least when it comes to what he calls “Big Tech’s rampant abuses.” The FTC “lacks the ‘teeth’ to get after” them, he said, and “Congress needs to do something about it.”

“The FTC has been under fire from both Republicans and Democrats calling for tougher action on Big Tech,” notes Axios, which also offers more details on Hawley’s proposal. But “relocating the agency, created in 1914, to a branch of the Justice Department is a tall order and it’s unclear if Hawley’s idea will gain any support.”

QUICK HITS

  • “I like a lot of what [Tulsi Gabbard] has to say,” Gary Johnson tells Reason. But “my guy is Bill Weld.”
  • For the first time ever, a foreign-lanaguage film—in this case, Bong Joon-ho’s Parasite—won best picture at the Oscars. Bong also won best director. Renee Zellweger won back actress (for her role in Judy) and Joaquin Phoenix best actor (for Joker). See the full results here.

  • Sex work is dividing the National Organizaiton for Women (NOW). “Women’s organizations like NOW, founded at a time when many feminists considered prostitution inherently demeaning, continue to oppose it,” writes Emily Shugerman. “Internally, however, backlash is brewing.”
  • “Instead of removing Trump from power, remove power from the presidency.”
  • What Sinn Féin’s win in Ireland’s latest elections means.

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Buttigieg Makes the Democratic Case for Cutting Spending

“It’s not fashionable in progressive circles to talk too much about the debt,” said Democratic presidential candidate Pete Buttigieg at a town hall in New Hampshire this weekend, blaming this on “the way it’s been used as an excuse against investment.

“But if we’re spending more and more on debt service now, it makes it harder to invest in infrastructure and health and safety net that we need right now,” continued Buttigieg, whose past résumé includes a stint as a management consultant in addition to his time in the U.S. military and as the mayor of South Bend, Indiana. “And also this expansion…isn’t going to go on forever.”

Buttigieg said it’s time for Democrats to “get a lot more comfortable owning this issue, because I see what’s happening under this president—a $1 trillion deficit—and his allies in Congress do not care. So we have to do something about it.”

It’s certainly rare for a prominent Democrat to talk about deflating America’s ever-ballooning deficit, especially this election cycle. And good on Buttigieg for calling out Republican hypocrisy on this issue too. (Welcome to the club.)

But Buttigieg offered no specifics on how he would manage to cut debt while still expanding “infrastructure and health and safety net.”

“Asked to back up Buttigieg’s claim to fiscal responsibility, a campaign aide pointed to a recent study by the Progressive Policy Institute that says the tax revenues Buttigieg has proposed to raise would narrowly exceed his new spending,” reports NBC’s Sahil Kapur.

Still, at this point, even a small nod to fiscal responsibility from the 2020 candidates feels like weekend. And Buttigieg is now a top-tier candidate.

Over the weekend, Iowa Democrats finally released concrete results from last week’s caucuses, showing Buttigieg with a 0.1 percent lead over Sen. Bernie Sanders (I–Vt.) in the number of state delegate equivalents earned. Voters in New Hampshire go to the primaries tomorrow.

Meanwhile, President Donald Trump’s proposed budget for fiscal year 2021—a $4.38 trillion package to be presented to Congress today—includes $740.5 billion in military spending, a 0.3 percent increase over this year. It also includes $590 billion for non-military spending, down 5 percent from 2020. “Trump’s budget has no chance of winning approval in Congress,” notes USA Today, “but it does reflect his priorities as he pursues re-election.”

FREE MINDS

Remembering Victoria Woodhull. “She was the first woman to run for president, the first to address a congressional committee, and the first to own a brokerage on Wall Street. She was also a con artist, a gold digger, and a scandal magnet,” writes John Strausbaugh in National Review:

When she ran for president in 1872, she sat out Election Day in a Manhattan jail, arrested on charges of obscenity. Victoria Woodhull was unquestionably a pioneer in women’s rights, yet her legacy is so messy and complicated that she remains an outlier in feminist history.

More here.

FREE MARKETS

More tough-on-tech posturing. Sen. Josh Hawley, endless font of bad ideas, wants to make the Federal Trade Commission (FTC) a part of the U.S. Justice Department. “The FTC isn’t working,” the Missouri Republican senator said in a statement. “Nobody is accountable for decisions.”

So far, so good. But,alas, Hawley’s complaint isn’t that the agency engages in too much meddling. He thinks it doesn’t do enough, at least when it comes to what he calls “Big Tech’s rampant abuses.” The FTC “lacks the ‘teeth’ to get after” them, he said, and “Congress needs to do something about it.”

“The FTC has been under fire from both Republicans and Democrats calling for tougher action on Big Tech,” notes Axios, which also offers more details on Hawley’s proposal. But “relocating the agency, created in 1914, to a branch of the Justice Department is a tall order and it’s unclear if Hawley’s idea will gain any support.”

QUICK HITS

  • “I like a lot of what [Tulsi Gabbard] has to say,” Gary Johnson tells Reason. But “my guy is Bill Weld.”
  • For the first time ever, a foreign-lanaguage film—in this case, Bong Joon-ho’s Parasite—won best picture at the Oscars. Bong also won best director. Renee Zellweger won back actress (for her role in Judy) and Joaquin Phoenix best actor (for Joker). See the full results here.

  • Sex work is dividing the National Organizaiton for Women (NOW). “Women’s organizations like NOW, founded at a time when many feminists considered prostitution inherently demeaning, continue to oppose it,” writes Emily Shugerman. “Internally, however, backlash is brewing.”
  • “Instead of removing Trump from power, remove power from the presidency.”
  • What Sinn Féin’s win in Ireland’s latest elections means.

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

@UnsealieCourt, a New Twitter Feed for News About Public Access to Court Records

I’ve been researching this subject for several years now, and I’ve litigated about a dozen such cases, from California and Washington to Florida and Vermont (no Maine yet). I often blog about such matters, and now I’ve set up a special feed, @UnsealieCourt (pardon the pun, if it is pardonable), for news updates on the subject.

I hope to make this a practically useful and interesting resource, focused on noteworthy new developments (or fun older items that I had come across). I naturally have my opinions on the subject, which lean in favor of open access, but I expect the posts to be mostly about facts rather than opinions.

If you’re interested in this, perhaps because you’re a journalist or a blogger or a lawyer who deals with such matters, please follow, and please comment and respond!

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

Saxo Bank: Sanguine Approach To Virus Impact Is Misplaced

Saxo Bank: Sanguine Approach To Virus Impact Is Misplaced

Submitted by Eleanor Creagh of Saxo Bank

Summary: Despite the buy the dip mentality that returned to markets last week, Fridays risk off price action seems a more accurate reflection of the current state of affairs. Dip buyers likely jumped the gun last week as the reported coronavirus death toll surpassed the SARS total over the weekend and contagion fears mount following a series of outbreaks in Europe linked to a large business conference in Singapore and additional new cases confirmed on the Princess Dream cruise ship docked off the coast of Japan. We expect price action to remain volatile and continue to be highly susceptible to virus related headlines, jumping from one to the next.

* * *

Over the weekend, new cases dropped in China, both in Hubei and outside Hubei. In the meantime, the global death toll increased to 910. Markets remain nervous as confirmed coronavirus infections outside of China mount and we think that risk-off price action will resurface. Downside risks are underpriced, most obviously so in Asia. Assessing the impact of the virus outbreak on global growth is no easy task, and as the human impact increases, so does the response and the economic impact. Singapore has now raised its alert level to Orange, the second highest level (same as the SARS outbreak). Companies continue to warn about the impact of ongoing disruption that will impact both sales and supply chains as factories, offices and shops remain closed and air travel is suspended, hitting both demand and supply.

This impact via the supply chain shock is likely to get worse before it gets better and that risk is not priced into equity markets. As the economic disruption prevails, the potential downwards revisions to growth and economic activity have the capacity to outweigh tentative green shoots, particularly across Asia and the Eurozone (via trade linkages with China). The German auto industry is heavily exposed to China and reports have surfaced that the factory shutdowns are making it hard to source key parts, notwithstanding the hit to sales. China accounts for about 40% of VW’s global passenger vehicle sales, and about 30% at Daimler and BMW. Wuhan and the rest of Hubei province, which has been on extended lockdown, account for 9% of total Chinese auto production, according to S&P Global Ratings. General Motors, Nissan, Renault, Honda and Peugeot owner PSA Group all have large factories in Wuhan. However, the reach extends far beyond the auto sector, from clothing and consumer goods to chemicals and tech, at some level inputs from China are crucial to most to major manufacturing supply chains around the world.

Globalisation has profoundly entwined supply chains, therefore shutdowns and production delays have the capacity to cause unexpected bottlenecks across many production lines even if the virus spread peaks soon. Most consumer electronics are made in China or at least have some component that is made in China, most notably iPhones, consumer gadgets, crystal displays, gaming consoles and LCD screens used in TVs, phones and cars. This leads us to believe that the current risk reward set up for equities generally is unfavourable and we favor defensive positioning and haven plays (gold, US rates). 

The week ahead will be crucial for gauging how long it will be before production returns to full capacity, the longer term ramifications of the virus outbreak and the hit to supply chains. Critical markers will be how much of the lockdown across China’s industrial centres can be wound back and how quickly. And whether the contagion risks outside of China continue to escalate or whether the virus will be contained soon.

At this stage the hit to the US economy should be minimal, but China has been hit hard. Although in China the increases in the number of new “reported” cases is slowing, the impact on the economy will continue to grow as the knock on effects from extended shutdowns multiply. The direct effects on foregone sales and supply chains will hit many companies bottom lines, notwithstanding the secondary effects yet to trickle down via lower commodity prices and the like. 3 provinces and 60 cities, almost 400 million people, are now facing some level of lockdown as Beijing tries to contain the coronavirus outbreak. True GDP in Q1 is likely to be close to 0 and potentially negative depending on how protracted the shutdowns become, with risks to forecasts tilted to the downside as the virus still continues to spread along with knock on effects. This shock hits the Chinese economy at a particularly vulnerable period, when longer term structural pressures continue to weigh and activity levels were already precarious as the tariffs and hangover from the deleveraging drive have taken their toll on economic activity. Growth, already under pressure, now has to contend with an unprecedented impact which outweighs that of the 2003 SARS outbreak. China’s policy responses have been stepped up over the past week with liquidity injections helping to allay some investors’ fears and lend support to equity markets. However, these increased policy response signal the authorities anxiety levels are rising, despite the state media awash with proclamations to the contrary.

It is not just the hit to growth that comes at a bad time for China. The ongoing trade war between the US and China already had companies pulling production out of China, diversifying their supply chains and shifting to other countries in the Asian region. The present disruptions add to that conversation and the decision to reduce production dependence concentrated in one specific country and diversify supply chains outside of China.

Amidst these lingering concerns, the US remains well bid. With this USD strength comes an additional hit to growth as the strong USD tightens financial conditions globally, particularly in offshore funding markets. The strong dollar hinders reflationary pulses and curtails green shoots therefore cementing the path for weaker economic growth, adding to the haven bid for long term bond yields.

As ever, this laundry list of concerns is countered by the ongoing return of central bank largesse. Monetary policy, as always, remains a powerful determinant of asset prices, continued central bank liquidity injections lends underlying support to equity markets. With liquidity being pumped and low yields forcing risk seeking behaviour, dip buyers are there on the sidelines ready to step in as valuations correct. Also, as investors re-calibrate long term interest rate expectations at current levels, large amounts of capital is enticed up the risk spectrum into equity markets. Monetary policymakers have already exhibited their willingness to intervene with added stimulus measures in an attempt to extend the cycle, so, for as long as investors feel like central banks have their back and policy rates remain low the longer term tailwinds for equities remain. Though as outlined above, we caution that the current risk reward set up for equities generally is unfavourable and see the potential for risk-off dynamics to resurface.


Tyler Durden

Mon, 02/10/2020 – 09:25

Tags
Business Finance

via ZeroHedge News https://ift.tt/2tKn6DH Tyler Durden

Key Events In The Very Busy Week Ahead

Key Events In The Very Busy Week Ahead

While investor attention remains fixed on the latest coronavirus developments in China, the week after payrolls is often a bit light for macro events but as DB’s Jim Reid notes, the second Democratic primary in New Hampshire tomorrow will be an additional focus. Meanwhile, attention will also be on Fed Chair Powell, who’ll be testifying before congressional committees on Tuesday and Wednesday. Data highlights include the release of US CPI (Thursday), US retail sales (Friday), and Q4 GDP readings from Germany (Friday) and the UK (tomorrow). Earnings season slows a bit but will still be important.

Going into the New Hampshire primary tomorrow, the RealClearPolitics polling average puts Bernie Sanders in the lead on 26.6%, ahead of Pete Buttigieg on 21.3%. It’s worth remembering that Sanders actually won the New Hampshire primary in 2016 against Hillary Clinton, and it also neighbors his home state of Vermont, which he represents in the US Senate.

Nationally the latest poll of polls still have Biden narrowly ahead of Sanders in the race for the nomination but most of the polls are prior to the middle of last week. The last one from Wednesday had Sanders 1pp ahead. In betting markets (PredictIt) Sanders has odds of 46% against Biden who has collapsed to 13% – down over 20pp over the last week.

Staying with the US, the main central bank highlight this week will come from Federal Reserve Chair Powell, who’ll be appearing before the House Financial Services Committee tomorrow, and then the Senate Banking Committee on Wednesday. He’ll deliver the Fed’s semi-annual monetary policy report to Congress, so it’ll be interesting to hear his latest views on the outlook (and the fallout from the Coronavirus) even if they are unlikely to deviate much from the last FOMC. Another event to watch out for on Thursday will be the hearing held by the Senate Banking Committee regarding the nomination of Judy Shelton and Christopher Waller to be governors on the Federal Reserve Board.

Turning to data releases, they will all be a little backward looking given the Coronavirus but will show the direction of travel pre-outbreak. In the US a key highlight will be CPI on Thursday, which is expected to increase to +2.5%, up from +2.3% previously, to what would be its highest level since October 2018. However, the core reading is expected to fall slightly to +2.2%. Other important readings to watch out for include January’s retail sales and industrial production releases on Friday, as well as the preliminary reading of the University of Michigan consumer sentiment index, which rose to an 8-month high in January.

One of the main highlights from Europe will be the preliminary estimate of German GDP for Q4 on Friday. The consensus is expecting a +0.1% increase, following the +0.1% growth in Q3. However it comes against the backdrop of unexpectedly poor German data out this week on factory orders as well as industrial production for December, so an important release to keep an eye out for. In terms of other GDP releases from Europe, tomorrow sees the preliminary Q4 GDP reading from the UK, which is expected to show a flat reading following growth of +0.4% in Q3. Finally, there’ll be the second release of GDP for the Euro Area on Friday, though this is expected to be in line with the first estimate, which saw the region’s economy expand by +0.1%.

Earnings season slows down (148 S&P 500 and Stoxx 600 companies) but in terms of what to look out for this week, Daimler will be reporting tomorrow, then on Wednesday, we’ll hear from Cisco Systems, CVS Health and CME Group. It’s a busy day on Thursday, with companies reporting including Nestle, PepsiCo, Nvidia, Airbus, Linde, Zurich Insurance Group, AIG, Barclays, Credit Suisse and Nissan. Then on Friday, we’ll hear from AstraZeneca, Credit Agricole, Royal Bank of Scotland.

We are now 64% of the way through the S&P 500 Q4 earnings season. 71% of companies are beating estimates which is slightly below the five-year average of 75%. In aggregate, companies are currently beating by +4.6% above the estimates, above the longer-run historical average rate (+3.4%) but below the five year average (+5.4%). According to DB, the decline in margins has been led by the Energy and Materials sector. This is likely a reflection of lower commodity prices, but the trend has been broad based with margins down across all sectors.

A day by day summary of the week’s key events

Monday

  • Data: China January CPI, PPI, Bank of France January industry sentiment indicator, Italy December industrial production, Canada January housing starts, December building permits
  • Central Banks: Fed’s Bowman, Daly and Harker speak

Tuesday

  • Data: UK preliminary Q4 GDP, December industrial production, manufacturing production, trade balance, US January NFIB small business optimism index, December JOLTS job openings, Japan January M2 and M3 money stock
  • Central Banks: Fed’s Powell, Quarles, Daly, Bullard and Kashkari, ECB’s Schnabel, BoE’s Haskel speak
  • Earnings: Daimler
  • Politics: New Hampshire primary in US

Wednesday

  • Data: Japan preliminary January machine tool orders, Euro Area December industrial production, US weekly MBA mortgage applications, January monthly budget statement, Japan January PPI
  • Central Banks: Fed’s Powell and Harker speak, monetary policy decisions from the Reserve Bank of New Zealand and the Riskbank
  • Earnings: Cisco Systems, CVS Health, CME Group

Thursday

  • Data: France Q4 unemployment rate, Germany final January CPI, US January CPI, core CPI, weekly initial jobless claims
  • Central Banks: ECB’s Hernandez de Cos speaks, Senate Banking Committee holds hearing on the nomination of Judy Shelton and Christopher Waller to the Federal Reserve Board of Governors, Banco de Mexico policy decision
  • Earnings: Nestle, PepsiCo, Nvidia, Airbus, Linde, Zurich Insurance Group, AIG, Barclays, Credit Suisse, Nissan

Friday

  • Data: Japan December tertiary industry index, Germany preliminary Q4 GDP, Italy December trade balance, Euro Area December trade balance, preliminary Q4 GDP and employment, US January retail sales, industrial production, capacity utilisation, December business inventories, preliminary February University of Michigan sentiment, Canada January existing home sales
  • Central Banks: BoJ’s Amamiya and Fed’s Mester speak

Finally, here is Goldman previewing the  of key US economic data releases this week which are the CPI report on Thursday and retail sales on Friday. There are several speaking engagements from Fed officials this week. Chair Powell will deliver his semiannual monetary policy report to Congress this week, with the first testimony occurring Tuesday and the second testimony Wednesday. Fed Board nominees Shelton and Waller will have their nomination hearings on Thursday.

Monday, February 10

  • 08:15 AM Federal Reserve Governor Bowman (FOMC voter) speaks: Federal Reserve Governor Michelle Bowman will speak on community banking at an event in Orlando. Prepared text and audience Q&A are expected.
  • 01:45 PM San Francisco Fed President Daly (FOMC non-voter) speaks: San Francisco Fed President Mary Daly will give a speech in Dublin. Prepared text and audience Q&A are expected.
  • 03:15 PM Philadelphia Fed President Harker (FOMC voter) speaks: Philadelphia Fed President Patrick Harker will speak on the economic outlook at an event at the University of Delaware. Prepared text and audience Q&A are expected.

Tuesday, February 11

  • 06:00 AM NFIB small business optimism, January (last 102.7);
  • 06:00 AM San Francisco Fed President Daly (FOMC voter) speaks; San Francisco Fed President Mary Daly will participate in a moderated discussion at Trinity College, Dublin. Prepared text is not expected. Audience Q&A is expected.
  • 10:00 AM JOLTS Job Openings, December (last 6,800k)
  • 10:00 AM Federal Reserve Chairman Powell (FOMC voter) speaks; Federal Reserve Chairman Powell will give his semiannual monetary policy report to Congress in front of the House Financial Services Committee. Prepared text and questions from committee members are expected.
  • 12:15 PM Federal Reserve Vice Chair for Supervision Quarles (FOMC voter) speaks; Federal Reserve Vice Chair for Supervision Quarles will give a speech on bank regulation at an event at Yale University. Prepared text and audience Q&A are expected.
  • 01:30 PM St. Louis Fed President Bullard (FOMC non-voter) speaks; St. Louis Fed President James Bullard will speak on the economic and monetary policy outlook at an event in St. Louis. Prepared text and audience Q&A are expected.
  • 02:15 PM Minneapolis Fed President Kashkari (FOMC voter) speaks; Minneapolis Fed President Neel Kashkari will participate in a town hall event in Kalispell, Montana. Audience Q&A is expected.

Wednesday, February 12

  • 08:30 AM Philadelphia Fed President Harker (FOMC voter) speaks; Philadelphia Fed President Patrick Harker will speak on the economic outlook at an event in Malvern, Pennsylvania. Prepared text and audience Q&A are expected.
  • 10:00 AM Federal Reserve Chairman Powell (FOMC voter) speaks; Federal Reserve Chairman Powell will give his semiannual monetary policy report to Congress in front of the Senate Banking Committee. Prepared text is expected.

Thursday, February 13

  • 08:30 AM CPI (mom), January (GS +0.20%, consensus +0.2%, last +0.2%); Core CPI (mom), January (GS +0.24%, consensus +0.2%, last +0.1%); CPI (yoy), January (GS +2.50%, consensus +2.5%, last +2.3%); Core CPI (yoy), January (GS +2.26%, consensus +2.2%, last +2.3%): We estimate a 0.24% increase in January core CPI (mom sa), which would leave the year-on-year rate unchanged at 2.3%. Our monthly core inflation forecast reflects a post-holiday rebound in the household goods and personal care categories, a stabilization in used car prices, and a modest rebound in airfares and hotel lodging costs. We also expect a rebound in apparel prices reflecting residual seasonality. On the negative side, we look for softness in education inflation. We estimate a 0.20% increase in headline CPI (mom sa), reflecting lower energy prices but higher food prices.
  • 08:30 AM Initial jobless claims, week ended February 8 (GS 210k, consensus 210k, last 202k); Continuing jobless claims, week ended February 1 (consensus 1,748k, last 1,751k): We estimate jobless claims rebounded to 210k in the week that ended February 8. We expect a persistent winter seasonal bias to continue to exert upward pressure on the continuing claims measure through February.
  • 10:00 AM Federal Reserve Board nominees Shelton and Waller nomination hearings: Federal Reserve Board nominees Judy Shelton and Christopher Waller will give prepared testimony and answer questions from senators in a joint nomination hearing.
  • 05:30 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will participate in a moderated discussion at an event hosted by the New York Bankers Association. Prepared text is not expected.

Friday, February 14

  • 08:30 AM Retail sales, January (GS +0.3%, consensus +0.3%, last +0.3%); Retail sales ex-auto, January (GS +0.1%, consensus +0.3%, last +0.7%); Retail sales ex-auto & gas, January (GS +0.2%, consensus +0.3%, last +0.5%); Core retail sales, January (GS +0.1%, consensus +0.3%, last +0.1%): We estimate that core retail sales (ex-autos, gasoline, and building materials) edged higher by 0.1% in January (mom sa), reflecting softness in chain store sales and scope for normalization in eComerce sales following the holiday season. We also see a potential boost to food services from below-average snowfall. We estimate a 0.3% increase in the headline measure in this week’s report, reflecting a pullback in gas prices and a rebound in auto sales.
  • 08:30 AM Import price index, January (consensus -0.2%, last +0.3%)
  • 09:15 AM Industrial production, January (GS +0.1%, consensus -0.2%, last -0.3%); Manufacturing production, January (GS +0.3%, consensus flat, last +0.2%); Capacity utilization, January (GS 77.0%, consensus 76.8%, last 77.0%): We estimate industrial production rose modestly in January, reflecting a rebound in auto manufacturing but weakness in the utilities category. We estimate capacity utilization was flat in January at 77.0%.
  • 10:00 AM University of Michigan consumer sentiment, February preliminary (GS 100.0, consensus 99.2, last 99.8): We expect University of Michigan consumer sentiment increased to 100.0 in the preliminary February reading, reflecting increases in other confidence measures.
  • 10:00 AM Business inventories, December (consensus +0.1%, last -0.2%)
  • 11:45 AM Cleveland Fed President Mester (FOMC voter) speaks: Cleveland Fed President Loretta Mester will speak at a financial literacy event in Sarasota, Florida. Prepared text and audience Q&A are expected.

Source: DB, Goldman


Tyler Durden

Mon, 02/10/2020 – 09:14

Tags
Business Finance

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

@UnsealieCourt, a New Twitter Feed for News About Public Access to Court Records

I’ve been researching this subject for several years now, and I’ve litigated about a dozen such cases, from California and Washington to Florida and Vermont (no Maine yet). I often blog about such matters, and now I’ve set up a special feed, @UnsealieCourt (pardon the pun, if it is pardonable), for news updates on the subject.

I hope to make this a practically useful and interesting resource, focused on noteworthy new developments (or fun older items that I had come across). I naturally have my opinions on the subject, which lean in favor of open access, but I expect the posts to be mostly about facts rather than opinions.

If you’re interested in this, perhaps because you’re a journalist or a blogger or a lawyer who deals with such matters, please follow, and please comment and respond!

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

For Markets Just One Thing Matters: Did China Go Back To Work Today Or Not?

For Markets Just One Thing Matters: Did China Go Back To Work Today Or Not?

Submitted by Michael Every of Rabobank

“Hi-Ho!” Or “Uh-Hh!

So, Monday morning. February 10. And rather than worrying about Valentine’s Day plans, most people are still focused on coronavirus. (With the exception of those in America who are talking about the fact that the aptly-named ‘Parasite’ from South Korea won the coveted Best Picture Oscar. And, no, it doesn’t deal with viruses, rather the vast inequality in South Korean society.) Anyway, back to the virus, where the death total is now 910 vs. 3,352 recovered, so still one in four on that measure, which is fortunately going down slowly, albeit too high for comfort and now 40,536 cases.

Crucially for market quants who do not understand fat tail risks–as proven by their behaviour against this global backdrop–that means there is still no clear sign of a rapid drop-off in the total of new cases given that the last seven days reads as follows: 3,239; 3,927; 3,239; 3,163; 3,457; 2,676; 3,001 although in day-to-day percentage terms this does represent a slow-down. (Although also note that at this pace, just two-days’ worth of new cases are enough to fill a brand new hospital.) Not so much of a slowdown in being seen outside China, however, where we now have just shy of 400 cases, vs. virtually zero a few weeks ago. Yes, the numbers are low. Yes, the cases are milder. Yes, preparations are in place in many locations. However, that is close to an exponential trend, with 43 in Singapore, now on orange virus alert, 36 in Hong Kong, where panic buying and working from home are the norm, 15 in Australia, 14 in Germany, .12 in the US, and 11 in France, among others.

Underlining that this week is going to be crucial, Shanghai reported this weekend that they now assume the virus has aerosol transmission, meaning it is airborne, adding to food-borne, touch, and contact, and explain why it might be spreading through buildings in air-conditioning, etc. That remains unconfirmed, however. The WHO boss has also, for once, not been accentuating the positive, stating that what we have seen so far may be “the tip of the iceberg” given that we now have human-to-human transmission outside China. At the same time, the London School of Hygiene and Tropical Medicine, who might just know more about these kind of things than the average market analyst with their expertise on the suffering of “man flu”, models that at its peak later this month in China the coronavirus might infect 500,000 people in Wuhan alone. That is 5% of the population.

We have also seen at least one economist publicly state that China’s GDP growth will be 0% y/y in Q1, which seems optimistic to me if this is not resolved soon; and more concretely, an AmCham Shanghai Coronavirus survey reports the following: 87% of firms see a direct impact on them; 25% see revenues falling by 16% or more; 16% see China’s GDP falling more than 2% in 2020 as a result of the virus; 29% believe their corporate HQ does not sufficiently understand the full economic impact; and 60% are planning work-from-home policies.

Of course, for markets what matters most is one thing: did China go back to work today or not? Commodity markets, where force majeure is being called to cancel Chinese copper trades; bond markets, where we are still close to a Maginot Line of 1.50% in 10-year US Treasuries; equities, where we are obviously still close to (silly) record highs; and FX markets, will all be watching closely.

If it is truly “Hi-ho!” and off to work we go, as officially planned, then “all is well” – even if that means the virus might spread much faster and further. Yet if it doesn’t, then it is “Uh oh!” as the global supply-chain impact of a lack of key Chinese inputs is days or weeks away at most, with the pain varying by industry. So far the evidence is that has been more “Uh oh!” or “so so”. For example, there has been a particular fixation on whether the Foxconn factory that makes iPhones is able to open or not, with flip-flopping headlines. It seems that the latest news is that around 10% of workers returned today, perhaps enough to fool the algos, but not enough to mean much to supply chains.

Meanwhile, it is obviously also worth noting the “Hi-ho!” number from the US payrolls report on Friday, which was once again strong at 225K despite downward revisions to back data, and yet which saw the unemployment rate tick up to a still-low 3.6%. Asia is sneezing but the US is not *yet* catching a cold, even if we still believe it will go down with its own made-in-America flu later this year anyway. (At which point Asia will be relatively even more sickly, of course.)

In other data out today, China saw January PPI up 0.1% y/y, marking a bounce away from deflation just as the rest of the world appears headed for it. Moreover, it saw CPI spike to 5.4% y/y as food prices shot up over 20%. How does one see inflation moving in an economy where much of it is under lock and key, but where those parts that are in demand do not have enough supply? A very mixed, and ugly, picture of biting deflation AND inflation that economic models are not set up to assume. It certainly will not make the PBOC’s job any easier, even if it is clear that it will be throwing money at the economy ahead.


Tyler Durden

Mon, 02/10/2020 – 08:59

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Are Irish Eyes Smiling? Sinn Féin’s Sudden Surge In Support

Are Irish Eyes Smiling? Sinn Féin’s Sudden Surge In Support

The Republic of Ireland experienced a political earthquake during its general election on Saturday with Sinn Féin topping the polls with 24.5 percent of the vote as of 12:00 pm on Monday. That’s ahead Fianna Fáil who have 22.18 percent and Fine Gael who have 20.86 percent.

As Statista’s Niall McCarthy notes, the Irish political system has been traditionally dominated by the latter two parties with Sinn Féin remaining on the periphery, particularly due to its links with the IRA during the Troubles. It has slowly become more mainstream and its performance in Saturday’s election was a major surprise.

Infographic: Irish Election: Sinn Féin's Rise | Statista

You will find more infographics at Statista

Soaring rents, a major homeless crisis and long hospital waiting lists have resulted in voters opting for alternatives, fuelling its rise.

Fianna Fáil are still blamed for the financial crisis while Fianna Gael are being held accountable for current frustrations. Sinn Féin’s slow but steady rise can be seen clearly on the infographic above.

The republican-orientated party took 1.2 percent of the vote in the 1989 general election and by 2011 and 2016, it took 9.9 and 13.8 percent respectively. No party will win enough seats for an outright majority and Fine Gael and Fianna Fáil have both ruled out forming a coalition with Sinn Féin. Mary Lou McDonald, Sinn Féin’s leader, has said she is examining the possibility of forming a new government without Fine Gael and Fianna Fáil.


Tyler Durden

Mon, 02/10/2020 – 08:36

Tags
Politics

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Controlling The Narrative Is Not The Same As Controlling The Virus

Controlling The Narrative Is Not The Same As Controlling The Virus

Authored by Charles Hugh Smith via OfTwoMinds blog,

Are these claims even remotely plausible for a highly contagious virus that spreads easily between humans while carriers show no symptoms?

It’s clear that the narrative about the coronavirus is being carefully managed globally to minimize the impact on global sentiment and markets. Authorities are well aware of the global economy’s extreme fragility, and so Job One for authorities everywhere is to scrub the news flow of anything that doesn’t support the implicit official narrative:

1. The coronavirus is only an issue in China; it’s contained outside China.

2. The coronavirus will soon be contained in China, and global business will quickly return to normal.

In pushing this narrative, authorities around the world share the same goal: limit the damage to consumer confidence and markets, as the legitimacy of every regime from Beijing to Washington D.C. to Nairobi is based on maintaining these economic fictions:

1. Global growth will continue in an unbroken trend in the decades ahead.

2. This growth benefits everyone, not just elites.

As I’ve noted in previous posts, the critical dynamic here is consumer confidence: consumers cannot be allowed to become hesitant or afraid lest they stop borrowing, borrowing, borrowing, buying, buying, buying and speculating, speculating, speculating.

Authorities outside China have no more interest in accurate death totals being released than Chinese authorities, and so official agencies and the corporate media dutifully parrot the implausibly low Chinese statistics as if they reflected reality.

But controlling the narrative is not the same as controlling the virus. The narrative is intangible but the virus is real-world. Authorities are betting that controlling the narrative about the virus is equivalent to controlling the actual virus. If everyone believes only 800 people have died and the number of infected people is plummeting, they will obediently keep borrowing and buying and authorities will retain their legitimacy, power and wealth.

If controlling the narrative fails, elites’ legitimacy, power and wealth are at risk.

Thought experiment: cremating human corpses generates a chemical plume with a signature that’s measurable from low-orbit sensors. Rather than accept implausibly low Chinese claims about total deaths, why not use low-orbit assets to measure the chemical signatures of plumes above Wuhan and calculate an estimate of the total number of corpses being cremated daily?

Again, no one in authority anywhere on the planet wants the real death totals to become public: managed ignorance is bliss.

One of the key tactics in controlling the narrative is to withhold data. But– no data doesn’t mean no virus. Let’s think through the implicit narratives as a series of claims and test the plausibility of each claim.

Narrative #1: the coronavirus has been contained in North America. 

Let’s break this down into specific claims:

Only 19 people in all of North America have the virus, and authorities found every one of them before they infected a single other person.

Is this even remotely plausible? Tens of thousands of people traveled from China to North America in January, including numerous direct flights from Wuhan, Ground Zero of the pandemic, before authorities limited flights; yet miraculously, only 19 of these thousands of people had contracted the pathogen and even more miraculously, not a single one of these asymptomatic carriers unknowingly infected a single passerby before being quarantined.

Since U.S. citizens and green-card holders and their families are still allowed to fly from China to the U.S. and travel freely once they pass a simple temperature test for fever, the narrative also claims not a single one of these hundreds of people are asymptomatic carriers, and if any are carriers, they won’t infect a single other person while they travel freely around North America.

Are these claims even remotely plausible for a highly contagious virus that spreads easily between humans while carriers show no symptoms?

Let’s imagine a slightly more realistic scenario: a Chinese national who unknowingly carries the virus infects dozens of passersby in taxis, Uber vehicles, subway cars, restaurants, hotels, etc. before coming down with symptoms of the flu. Since the visitor is concerned about what authorities might do to him and his family if it were discovered he has the coronavirus, he monitors his symptoms and concludes that since they’re the same as a run-of-the-mill flu, he must not have the coronavirus. He recovers in 10 days, unaware that he had the coronavirus and unknowingly infected dozens of others.

Since roughly 80% of those who contract the coronavirus experience “mild symptoms” much like conventional flu, this is a reasonable assumption.

No data doesn’t mean no virus: this individual had the coronavirus and spread it to dozens of other people while asymptomatic, and authorities don’t know because he never went to a doctor or hospital and thus was never tested or quarantined.

Narrative #2: the coronavirus will soon be contained in China.

Millions of people left Wuhan prior to the lockdown, and since the lockdown was pre-announced, tens of thousands hurried out before the lockdown took effect. Meanwhile, the lockdown did not include flights leaving Wuhan’s airport, so hundreds of flights left for destinations in China and elsewhere in the days between the lockdown announcement and the time when flight restrictions took effect.

Some consequential percentage of these millions were asymptomatic carriers of coronavirus, and since these millions of people dispersed throughout China, they undoubtedly infected passersby who never went to Wuhan.

Tracking down everyone from Wuhan will not identify everyone unknowingly infected by a traveler from Wuhan.

Screening for fever with thermometers will not identify asymptomatic carriers of coronavirus, so screening is not going to stop the spread of the virus.

Since there appears to be a severe shortage of test kits, the likelihood that every clinic and hospital in rural China has ample test kits to confirm a diagnosis (up to three tests per patient, as follow-up test results can be positive or negative) is near-zero. Thus the likelihood that the healthcare system has an accurate count of carriers with symptoms in rural China is near-zero.

And since asymptomatic carriers have no reason to be tested, and authorities have no reason to test them, the chances that authorities can magically identify every asymptomatic carrier is also near-zero.

No data doesn’t mean no virus: is the claim that the coronavirus will soon be controlled in China even remotely plausible for a highly contagious virus that spreads easily between humans while carriers show no symptoms?

Controlling the narrative doesn’t mean you’re controlling the virus. The gulf between happy-story narratives and the real world is widening to the breaking point.

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Tyler Durden

Mon, 02/10/2020 – 08:15

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The Coronavirus and the Constitution

A reader asked me about the constitutionality of quarantines and similar measures; I haven’t studied the subject at all, but I thought I’d ask, Prof. Ed Richards, who is an expert in the field (both on the law side and on the public health side; he has an M.P.H. as well as a J.D.). Prof. Richards was kind enough to pass along the following:

The coronavirus is dominating the news. As with the SARS epidemic in the early 2000s, China has exacerbated the hysteria by withholding critical information about the spread of the disease. At this point in time, it is impossible to predict whether this coronavirus outbreak will become a major threat to the world’s health. For perspective, the CDC estimates that flu has infected 22,000,000 people in the US and 12,000 have died so far this flu season. Based on the experience of past novel virus outbreaks, it is likely that the final toll from coronavirus will be a tiny percentage of the usual toll from flu.

What drives the fear we are seeing is the 1918-1919 flu pandemic, which infected 500,000,000 people and killed at least 50,000,000 worldwide. It killed about 675,000 in the US, out of a population of around 100,000,000. Given the disruption caused by the relatively tiny number of cases and deaths we see from the coronavirus even now, a pandemic infecting hundreds of millions of people would disrupt world order and paralyze governments. It is this existential threat to the state that lies behind the Constitutional basis of public health law.

Much of our colonial population lived with a constant treat of contagious disease. The major cities were on rivers at or near the coast to have access to shipping and they were plagued with disease-carrying mosquitoes. Sewage ran in the streets and contaminated the drinking water wells. Shipping from foreign ports brought a constant threat of epidemic disease. The first comprehensive look at life expectancy in the U.S. was done in Boston and was published as the Shattuck Report in 1849. It found that the average life expectancy in cities was around 25 years and 35 years in the countryside. Most of those premature deaths were due to infectious diseases.

While there was a high background level of infectious diseases such as malaria, it was the periodic epidemics that threatened public order. Ten percent of the population of Philadelphia died of yellow fever between September and November, 1793. There were similar outbreaks throughout the colonial period of yellow fever, smallpox, cholera, and typhoid fever.

Colonial boards of health may have been the first administrative agencies in the US. They exercised Draconian powers that were rooted in English law. The English statutory and common law recognized the right of the state to quarantine and limit the movement of plague carriers. Blackstone observed that disobeying quarantine orders merited severe punishments, including death. The argument of counsel in Smith v. Turner, 48 U.S. 283, 340-41 (1849) described measures to control a yellow fever outbreak in Philadelphia:

For ten years prior, the yellow-fever had raged almost annually in the city, and annual laws were passed to resist it. The wit of man was exhausted, but in vain. Never did the pestilence rage more violently than in the summer of 1798. The State was in despair. The rising hopes of the metropolis began to fade. The opinion was gaining ground, that the cause of this annual disease was indigenous, and that all precautions against its importation were useless. But the leading spirits of that day were unwilling to give up the city without a final desperate effort. The havoc in the summer of 1798 is represented as terrific. The whole country was roused. A cordon sanitaire was thrown around the city. Governor Mifflin of Pennsylvania proclaimed a non- intercourse between New York and Philadelphia.

These powers are classic police powers, exercised by the states. While they were not at direct issue in Smith, the power to quarantine ships was upheld against commerce clause and foreign affairs challenges in Morgan’s Steamship Co. v. Louisiana Board of Health (1886). The power to establish cordons sanitaire was upheld in Compagnie Francaise de Navigation a Vapeur v. Board of Health of State of Louisiana (1902). The right of the state to require vaccination was upheld in Jacobson v. Massachusetts (1905).

There is no direct Supreme Court precedent on the due process rights of a person subject to quarantine or isolation, but there is state precedent that the constitutional requirement is provided by the writ of habeas corpus. There is state precedent that isolation or quarantine cannot be indefinite without triggering a periodic right to review of the need for the restriction, which is consistent with Supreme Court precedent on restrictions for mental health commitment and the restrictions for dangerous persons such as sexual predators. While some states have granted more extensive due process rights through statute, it is likely that the Supreme Court would not find these necessary as a US constitutional matter under the Matthews v. Eldridge (1976) test.

These cases represent more raw power than is obvious when looking at them from our modern frame of reference. If you were suspected of being exposed to smallpox, but were not infected, being put in the pest house was often a death sentence. This was known at the time, and damage suits for being subjected to the risk of infection were rejected by the courts.

Despite the belief of the anti-vaxers, modern vaccines are extremely safe. But the smallpox vaccine at issue in Jacobson was not safe. It was manufactured in an unsanitary process that risked contamination with dangerous bacteria and viruses. (Even modern smallpox vaccine is dangerous for some people. It is not made from smallpox, but it is a live virus that can cause severe illness or death in persons with immunosuppression secondary to HIV, cancer treatment, or organ transplantation.) Thus the court in Jacobson understood that in ruling that the state could force an individual to submit to smallpox vaccination, it was ruling that the person could be subjected to a real risk of injury or death.

The language in the public health cases parallels the language in the national security cases at the time. The Court saw epidemic disease as the same level of threat to the state as invasion by a hostile military force and one that was much more frequent. The founders were all personally familiar with the Draconian police powers exercised by states when they were drafting the Constitution. Most had lost family members to epidemics. From an original intent analysis, the power of the states to take decisive action to stop the spread of disease is clear. (It is not so clear how much they would see this power belonging to the Federal Government, but it is easily justified under the modern reading of the commerce clause.)

Power does not equate to wisdom. A cordon sanitaire for yellow fever makes no sense today when it is known that it is a mosquito-borne illness. The same applies for the many infectious diseases that are vector or water borne. The long-term control of infectious diseases that are spread in the environment was achieved through the sanitary movement that was begun with the recommendations in the Shattuck Report. These include strategies such as sewage and drinking water treatment, not the restriction of individuals. Conversely, in modern times some states found that their new statutory due process rights for disease carriers made it difficult to deal with outbreaks of drug-resistant tuberculosis.

During the current coronavirus outbreak, passengers are being quarantined on cruise ships. We know the difficulty of controlling norovirus outbreaks on cruise ships. Given that the crowded conditions on ships are ideal for spreading disease, it will be no surprise if there is a high incidence of coronavirus infection among the quarantined passengers.

The harder question is, how many of those persons were infected on the ship after the quarantine was imposed? A recent study from Wuhan, China found that 43% of early cases were caused by spread in the hospital. If it was necessary to quarantine the cruise ship passengers, could further transmission of the coronavirus have been prevented by quarantining the passengers in more appropriate facilities onshore? If the spread of the coronavirus on the ship results in a shipboard epidemic, will the quarantine ultimately increase the risk of spread of the virus into port cities?

The Constitution puts few limits on the legal power to protect the nation from epidemic disease. But power without expertise and resources means little. Once the traditional killers were controlled—smallpox, polio, cholera, etc.—public and political support for public health withered. The federal and state governments have cut staffing and resources for public health for decades.

Individuals refuse to get immunizations that are necessary to keep herd immunity intact. The lack of paid sick days for many employees, and the pressure to work sick in many workplaces, facilitates the spread of disease.

We do little to prevent the 15-60,000 deaths and the hundreds of thousands of hospitalizations due to the yearly flu pandemic. It is not surprising that we are unprepared for new threats when we cannot respond to effectively to existing threats. Public health infrastructure cannot be created on an emergency basis. It must be built over decades.

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