Mike Gravel and His Online Teens Want Weed in the Constitution

Most people would be hard-pressed to remember every candidate who showed up at last month’s two-night Democratic presidential debate, must less the candidates who didn’t appear. But one contender who did not make the qualifying threshold was Mike Gravel, the 89-year-old former Alaskan senator. And all things considered, Gravel is pretty memorable: What he lacks in name recognition, he makes up for with an unorthodox and deliberately outrageous approach to politics. (His campaign, for example, is being run by two teenagers.)

Now the former senator is proposing a constitutional amendment to remove marijuana as a Schedule 1 drug, thus legalizing it recreationally on the federal level. It’s an unconventional approach to drug reform befitting of an unconventional presidential candidate, but Gravel argues that it would be the easiest way given the current congressional gridlock.

“Congress hasn’t done anything at this point in time, and it’s tough to realize whether we’re looking at another year, two years,” he tells Reason. “From my experience in the Congress, they could pretty well screw it up, and this is already unbelievably screwed up. We could immediately get a law passed in the next 30 days, but we’ve been waiting 30 days for the past three years.”

In times past, constitutional amendments have been implemented with a two-thirds vote of approval in both the House and the Senate, which then must be ratified by three-fourths of the states. But Gravel acknowledges that his plan would be a near-impossible sell if Republicans maintain control of the Senate. In that case, he says, he would take advantage of a second avenue—a constitutional convention—in which 34 states would need to gather on their own accord and agree to adopt the amendment. That route has never before been used.

Gravel compares the harmful effects of marijuana bans to the harmful effects of alcohol Prohibition. And Prohibition, he reminds us, was repealed by constitutional amendment—though only because it started with one. The 21st Amendment nullified the 18th.

“It’s an option is really what I’m saying,” says Gravel. The candidate doesn’t rule out the chance that Congress could act—in fact, he muses that the pressure of a convention could force lawmakers to come together. But he doubts that would happen. And even it if does, he worries about the poison bills and bargaining chips that could pollute the legislation.

However it pans out, Gravel sees federal action as a necessary way forward. The current state-by-state approach is a “mess,” he says, “promulgated by the fact that the federal Damocles hangs over” their heads. (When former Attorney General Jeff Sessions took office, he threatened to crack down on marijuana using federal jurisdiction, even in states that legalized it.) Gravel also rails against sky-high pot taxes, which he says have sometimes “been so horrendous that people have stayed with the underground supply rather than the legal supply.” Schedule 1 substances are subject to heavy federal income taxation, as the government prohibits (fully legal) state businesses of the weed variety from deducting a slew of business expenses. So his amendment also declares that the drug will be regulated like alcohol and tobacco.

While Gravel limits his proposed amendment to marijuana, he supports the decriminalization of all drugs. “We treat all of these drugs as criminal problems,” he explains. “They’re not. They’re public health problems.” He speaks fondly of the approach taken by Portugal, a fairly conservative country that in 2001 decriminalized all illicit substances, including heroin and cocaine. Drug trafficking there is still a criminal offense, but those caught with less than a 10-day supply get no more than a slap on wrist—a fine, for instance. The problem is otherwise considered a medical one, where individuals meet with a local commission to discuss possible treatment options. The method has been widely successful, with the nation seeing a decrease in overdoses, drug-related crime, HIV infections, and adolescent drug use.

Gravel hopes his amendment will help put the U.S. on track to something like the Portuguese model. “Once you see the success of cannabis and addressing that problem in society, then society matures with these experiences and reacts differently,” the former senator says. “If we were to succeed with this, then I think it would really lead to a legislative approach.”

Although the campaign recently announced that it might be coming to an end in the near future, it received new life with a fundraising plea made by Marianne Williamson—a fellow contender for the Democratic nomination—on Gravel’s behalf, putting him in striking distance of the 65,000-donor threshold required to make the July debates. (At the time of this writing, he is less than 3,000 short.) If it doesn’t happen, he concedes that he won’t be heartbroken. His campaign, he says, was less about ascending to the Oval Office and more about starting a conversation about the issues—something that only became a reality when David Oks and Henry Williams, the two teens at the heart of his effort, urged him to run.

“Do you realize how old I am?” he asked the boys when they approached him.

“Doesn’t make any difference,” they replied. “It’s the positions you have on the issues that are so vital to communicate.”

In addition to drug reform, Gravel wants to cut military spending in half. He also supports single-payer health care and calls for the abolition of private insurance companies.

The deadline to qualify for the next Democratic debate is July 16. If Gravel makes it, his debate appearance will represent a major shift in his campaign—and not just because he’ll have a big platform for an evening. Up until now, he has not left his house in the pursuit of his 2020 ambitions. And until the next debate, he plans to stay put.

“No party’s gonna carry me other than these kids,” he says, referring to Oks and Williams. “But I’m gonna have a patio campaign. I’m gonna sit on my patio, and see what happens.”

from Latest – Reason.com https://ift.tt/2l7jk2r
via IFTTT

House Votes To Block Trump From Iran War As Senate Showdown Looms

The Democrat-led House voted Friday to block President Trump from taking military actions against Iran without first seeking Congressional approval – a vote which had the support of more than two dozen Republicans, much to John Bolton’s chagrin.

According to the Washington Post, the vote will likely ensure a showdown with the GOP-controlled Senate over whether the restriction will be included in the final bill negotiated between the two chambers. Of note, the House version contains an exception for cases of self-defense. 

Republicans in both the House and Senate have argued that such language would embolden Tehran amid a ‘divided’ Congress. 

“Our national security is not a game. But that is exactly how Democrats are treating it,” said House Minority Leader Kevin McCarthy (R-CA) on Friday morning. 

House Armed Services Committee Chairman Rep. Adam Smith (D-WA) pushed back, saying that Republicans “can opposite it, that’s fine, but to say we don’t care about national security . . . is a baldfaced lie.” 

“In fact, our bill isn’t just good, it’s better than the ones that the Republican Party has put together, because we believe the Pentagon should be accountable,” added Smith. 

At the center of the Iran amendment is a dispute over how much money should be allocated to the Pentagon and military this year. While Trump and the Republicans want $750 billion, the House bill limits it to $733 billion – a figure Smith says military leaders have previously endorse. 

The Iran amendment is just one of several high-profile measures that lawmakers voted this week to include in the first defense authorization bill Democrats have steered through the House since taking over the majority earlier this year. Those measures, which range from ending U.S. participation in Saudi Arabia’s military campaign in Yemen to undoing President Trump’s ban on transgender troops, helped secure the support of liberal Democrats from the congressional Progressive Caucus, who had previously warned that they might vote against the defense bill. –Washington Post

Liberal Democrats, meanwhile say $733 billion is still too steep vs. the current fiscal year’s $717 billion allocation, and have proposed a $16.8 billion reduction to war funding – an effort which failed in the House. 

 

via ZeroHedge News https://ift.tt/2l5MAH4 Tyler Durden

Pre-emptive… Or Bubble-Making Monetary Policy

Submitted by Joseph Carson, Former Director of Global Economic Research, Alliance Bernstein.

Preemptive or Bubble-Making Monetary Policy

Preemptive actions is an important feature of monetary policy, but policymakers have never made a preemptive move when the economy’s actual performance has been so closely aligned with the Fed’s own expectations or when the financial markets were so robust. If the Federal Reserve lowers official rates at it’s July 30-31 Federal Open Market Committee meeting it would be done based on the view that a modest “preemptive” move now would obviate the need for larger actions later. Yet, the counterargument is that adding liquidity against a backdrop of overly accommodative financial conditions is precisely the tinder that ignites bubbles.

At the December 18-19 2018 Federal Open Market Committee meeting policymakers revealed their forecasts for 2019; 2.3% gain in real GDP, a 3.5% end of year unemployment rate and core inflation of 2%. And based on those economic and inflation forecasts policymakers had anticipated hiking official rates twice (in increments of 25 basis points) over the course of 2019.

During the first half of 2019 the real economy grew 2.3% annualized (averaging the 3.1% growth of Q1 with the 1.4% estimate for Q2 based on GDPNOW forecasting model of the Federal Reserve Bank of Atlanta), the unemployment rate sat at 3.7% in June and the core consumer price inflation increased at an annualized rate of 2.1%. Despite a near home run in all of its forecasts policymakers are now considering lowering official rates. What changed?

One of the arguments that has been advanced is that some policymakers are worried that the consistent undershoot of the 2% inflation target creates the potential for consumer inflation expectations to become unhinged, hindering the effectiveness of monetary policy.

The first problem with that argument is that monetary policy can influence the degree of liquidity in the system, but it cannot guide its direction. The fact that of the monetary liquidity is being channeled into the asset markets (which are not part of the targeted inflation index) does not mean policy is ineffective or that rates need to be lowered to hit an arbitrary inflation target. Given the complexity of the economy and the imprecision in price measurement hitting a 2% target would occur more by luck than by design.

The second problem with that argument is that either consumer’s are unaware of the Fed’s 2% target or that their actual experienced inflation consistently runs higher than reported inflation. Surveys of consumer inflation expectations have consistently shown that people expect more inflation than the 2% target, and only twice (for a very short spell) in the past 20 years did expectations dip below 2% mark and both of those occurred during a crisis (9/11 and Great Financial Recession).

Another argument advanced by the Fed Chairman Jerome Powell is that the economy is facing a lot of crosscurrents. Crosscurrent is another way of saying that some sectors and industries in the economy are growing and others are not. But that’s always true. The Bureau of Labor Statistics includes in its monthly employment report a diffusion index, measuring how many industries are hiring month over month. In normal times the diffusion index runs between 60% to 65% —-which implies an increase in hiring for a broad range of industries but also a large group that are not hiring as well. The June 2019 diffusion index reading stood at 60.7. Normal times?

* * *

Monetary policy is about to enter uncharted territory. Preemptive easing policy actions in the past have been taken when sharp sell-offs in equity markets or stress in the credit markets had the potential to generate adverse economic outcomes. None of those conditions exist today; if anything, financial conditions are too relaxed.

Preemptive policymaking requires a constant and broad assessment of economic and financial conditions so not to risk over doing it one way or the other. Equity prices should figure prominently in this monitoring process since equity prices offer signals on future growth but they are also a receptacle for excess liquidity. The sharp rise in equity prices over the first half of 2019 should tell policymakers that the problems the economy faces are non-monetary related and lowering official rates is not the appropriate policy response. The danger in promising more easy money is that equity prices rise to unsustainable levels creating bigger adjustment risks to the economy that presently exists in low inflation and crosscurrents.

via ZeroHedge News https://ift.tt/2jEv3W8 Tyler Durden

Donald Trump Doesn’t Think ‘the Mainstream Media Is Free Speech’

The threat of platform censorship took center stage Thursday at the White House’s “social media summit,” where President Donald Trump addressed a friendly crowd of conservative internet figures who are concerned about Big Tech policing their speech.

Whether private companies treat conservatives unfairly is not a free speech issue in the First Amendment sense, since only the government is constitutionally prohibited from engaging in censorship. Trump, on the other hand, made some remarks that were at least an implicit threat to freedom of speech. About 46 minutes after taking the podium, the president said this:

We don’t want to stifle anything. We certainly don’t want to stifle free speech, but that’s no longer free speech. I don’t think that the mainstream media is free speech, because it’s so crooked, it’s dishonest. Free speech is not when you see something good and then you purposely write bad, to me that’s very dangerous speech, and you become angry at it, but it’s not free speech.

The statement is not completely coherent, but Trump appears to be asserting that speech loses constitutional protection when it’s “crooked” or “dishonest.” Now, it’s true that objectively false and disparaging speech can in some cases be deemed libelous. But speech that merely strikes Trump as “bad” does not lose its First Amendment protection.

The false claim that “bad” speech is “dangerous” and thus unprotected by the Bill of Rights is not fundamentally different from the equally false claim that hate speech is not free speech. Conservatives—including many of the conservatives in the audience yesterday—often mock campus progressives for making the latter claim. For the sake of intellectual consistency, one might hope that they would also object to the former claim, and thus be willing to call out Trump. Trump, after all, is president of the United States, and in that capacity has much more power to violate the First Amendment than any social justice warriors or social media CEOs do.

For more on anti-speech trends on the left and the right, check out my new book, Panic Attack: Young Radicals in the Age of Trumpwhich was recently featured on The View‘s summer reading list episode.

from Latest – Reason.com https://ift.tt/2XHW3H4
via IFTTT

Donald Trump Doesn’t Think ‘the Mainstream Media Is Free Speech’

The threat of platform censorship took center stage Thursday at the White House’s “social media summit,” where President Donald Trump addressed a friendly crowd of conservative internet figures who are concerned about Big Tech policing their speech.

Whether private companies treat conservatives unfairly is not a free speech issue in the First Amendment sense, since only the government is constitutionally prohibited from engaging in censorship. Trump, on the other hand, made some remarks that were at least an implicit threat to freedom of speech. About 46 minutes after taking the podium, the president said this:

We don’t want to stifle anything. We certainly don’t want to stifle free speech, but that’s no longer free speech. I don’t think that the mainstream media is free speech, because it’s so crooked, it’s dishonest. Free speech is not when you see something good and then you purposely write bad, to me that’s very dangerous speech, and you become angry at it, but it’s not free speech.

The statement is not completely coherent, but Trump appears to be asserting that speech loses constitutional protection when it’s “crooked” or “dishonest.” Now, it’s true that objectively false and disparaging speech can in some cases be deemed libelous. But speech that merely strikes Trump as “bad” does not lose its First Amendment protection.

The false claim that “bad” speech is “dangerous” and thus unprotected by the Bill of Rights is not fundamentally different from the equally false claim that hate speech is not free speech. Conservatives—including many of the conservatives in the audience yesterday—often mock campus progressives for making the latter claim. For the sake of intellectual consistency, one might hope that they would also object to the former claim, and thus be willing to call out Trump. Trump, after all, is president of the United States, and in that capacity has much more power to violate the First Amendment than any social justice warriors or social media CEOs do.

For more on anti-speech trends on the left and the right, check out my new book, Panic Attack: Young Radicals in the Age of Trumpwhich was recently featured on The View‘s summer reading list episode.

from Latest – Reason.com https://ift.tt/2XHW3H4
via IFTTT

Not Just Alexa: Google Employees Eavesdropping On People Via ‘Smart Speakers’ 

In April we reported that thousands of Amazon contractors have been eavesdropping on customers who own the company’s Alexa devices. 

Now, thanks to a whistleblower, we find out that Google is doing it too via their Google Home smart speakers, despite repeatedly claiming that they don’t eavesdrop, according to Dutch broadcaster VRT – which notes that the recordings are happening whether or not the speakers are activated. 

VRT NWS was able to listen to more than a thousand excerpts recorded via Google Assistant. In these recordings we could clearly hear addresses and other sensitive information. This made it easy for us to find the people involved and confront them with the audio recordings. –VRT

This is undeniably my own voice,” said one man tracked down by VRT based on recordings obtained by the outlet. Another couple from Waasmunster, Belgium said they immediately recognized the voices of their son and grandchild. The recordings include conversations and quarrels between people, confidential business calls, conversations with children and ‘bedroom activities.

Speech recognition automatically generates a script of the recordings. Employees then have to double check to describe the excerpt as accurately as possible: is it a woman’s voice, a man’s voice or a child? What do they say? They write out every cough and every audible comma. These descriptions are constantly improving Google’s search engines, which results in better reactions to commands. One of our sources explains how this works. 

Most recordings made via Google Home smart speakers are very clear. Recordings made with Google Assistant, the smartphone app, are of telephone quality. But the sound is not distorted in any way. –VRT

Sex and violence

According to more than a thousand sound clips reviewed by VRT, 153 of them included conversations which should have never been recorded due to a clear lack of an activation command. Many of those include sex and violence according to the outlet’s sources. 

One of our three independent sources says he had to describe a recording where he heard a woman who was in definite distress. What are employees supposed to do with such information? We are told that there are no clear guidelines regarding such cases. It is, however, an important ethical matter. Employees only receive specific directions when it comes to account numbers and passwords. Those are marked as sensitive information. 

The recordings also strikingly confirm one of the Internet’s rules: men seem to look for porn a lot, even via smart speakers. –VRT

“This is shocking,” said cyber security expert Bavo Van den Heuvel, who pointed out that the recordings could be made anywhere – “in a doctor’s surgery, for example, or in a police or judicial context, where people are dealing with sensitive, private matters.”

Why is this happening? 

Google Home Speakers are normally activated when someone says “Hey, Google” or “OK, Google.” It also activates if someone says anything remotely similar. The recordings are then sent to Google subcontractors who manually review the clips. 

According to USA Today, Google reviews just 0.2% of audio recordings for manual transcription – while customers must opt-in to have their voice recordings stored to their account. According to the report, however, Google requires users to turn on voice recording in order to access all of Google Home’s features. 

“Your device will only send audio to Google if we detect that you or someone in your home is interacting with your Assistant …  or if you use a feature that needs it,” said the company, adding: “You can always turn the microphone off.”

via ZeroHedge News https://ift.tt/30uBvP3 Tyler Durden

“Well That Escalated Quickly”: Is Stagflation Coming?

Authored by Mark Orsley, PrismFP head of macro strategy

  • The non-fundamental flattening reverses as the case for steepeners moves into “goldilocks” territory
  • Powell makes watershed comments on the Dollar
  • Deficits are the main non-economic data driven reason why the Fed will cut

On Tuesday we discussed how the curve flattening in the US over the last week made very little fundamental sense and provided an attractive risk/reward entry point. As the great Ron Burgundy said, “well that escalated quickly.”

On Tuesday 2s10s was at the bottom of the range and on Friday we are back at the top of the range where you can actually think about booking profits. US 2s10s hit trend support and bounced firmly. Notice the higher lows being put into place after a broken downtrend. Short-term you can take some profits but the long-term bullish technical narrative is still firmly in place…

The case for the steepener has only strengthened since Tuesday. On the one hand, the data deterioration theme got solidified with another labor market indicator showing rate-of-change weakness (JOLTS), but on the other hand there was surprisingly good inflation data and better claims.

I am not trying to pour cold water on the CPI as it was firm in all aspects. You saw some payback of some of the “transitory” factors that were roundly expected to bounce with a bit of help from tariffs so it was a nice number. However, it is important to remember that the Fed’s preferred inflation metric is of course Core PCE. Ironically, that will arrive just before the July FOMC but do note that Core PCE remains below the Fed’s target.

Further, in the Fed’s newfangled mindset driven by the new core (the Average Inflation Targeting {AIT} clan of Williams, Clarida, Brainard, Evans), inflation on an average basis is still not where they would like it to be. If you look over the last five years, Core PCE has only been above the 2% target just 8 months out of 60 months.

Core PCE remains below the Fed’s target and has been below target in 52/60 months. This is the persistently low inflation you hear about from core FOMC voting members (red shaded below target, green shaded above target).

Importantly, Fed officials, with CPI data in hand, were roundly dovish so you need to consider what the Fed WILL DO not what you think they SHOULD DO. Bostic and Barkin had a couple dovish twist but neither are voting members so let’s focus on the voters:

  • Powell: “we’ve signaled that we’re open to accommodation; monetary policy hasn’t been as accommodative as thought”
  • Williams: “arguments for adding accommodation have strengthened”
  • Quarles: “there are significant risks out there (despite US economy being strong)”
  • Brainard: “supports softening the rate path due to risks and low inflation”
  • Evans: “a couple rate cuts could boost inflation; nervous about inflation”
  • FOMC Minutes: “MANY Fed officials saw strong rate cut case amid rising risks; MANY saw more accommodation warranted in the near-term”

The Brainard comment is exactly what we are talking about. So yes CPI was firm, but inflation as measured by the Fed’s preferred metric is still below and averaging well below the Fed’s target.

Getting back to the steepener, isn’t this a goldilocks scenario for further steepening?

  • Continued data deterioration which signals end of cycle
  • Firmer inflation data
  • Fed that is about to cut rates and possibly have two more additional doves added to the board

In other words stagflation that is likely driven by supply side considerations for you neo-Keynesians out there. The front end will be pegged lower by the Fed and a back end that can trade heavy due to the better inflation, and that is what has driven us back to the upper end of the range in steepeners.

It was also notable how poorly the 30yr bond auction went yesterday that saw weak bid-to-cover along with a plunging indirect bid (or lack thereof). Suddenly, foreign investors are shunning the long end.

US 30 Year Notes Bidder Participation for % of Indirect Bidders…

Why would you buy the long end when you can buy the front end where the Fed has your back? Also note per Quarles that when the Fed starts to buy Treasurys again via SOMA, the average maturity the Fed purchases will shift down more into the front end. Therefore, I am ok with taking partial profits and playing the range on the curve, but the long-term bull case for steepeners has only gotten better this week.

I wanted to highlight this one comment from Powell separately because I think it is vitally important. Chair Powell said:

“Do not assume the US Dollar status as a reserve currency is permanent.”

I mean….WOW! Does anyone recall a Fed chair outright talking down the Dollar like that? First I would say that is Gold bullish.

Gold is in the midst of forming a bull flag pattern. Depending on the breakout level of the flag, the target will be up around 1560ish…

Gold is in the midst of forming a bull flag pattern. Depending on the breakout level of the flag, the target will be up around 1560ish…

However let’s get to the heart of that statement. Powell was referring to the US fiscal deficit and what that would mean for the Dollar. The deficit has been increasingly coming up in Powell’s communication. He had it noted as a concern in his statement to Congress this week as well as in the Q&A.

“And I remain concerned about the longer-term effects of high and rising federal debt, which can restrain private investment and, in turn, reduce productivity and overall economic growth. The longer-run vitality of the U.S. economy would benefit from efforts to address these issues.”

This is the main point you should chew on this weekend; you may disagree with my data deterioration theme which gives the Fed reasons to cut, but do not miss this important point why the Fed will cut:

Rising deficits which causes increase treasury supply at a time when foreigners are losing their appetite to fund the US govt (as noted above in the bond auction) means the Fed needs to talk dovish/cut rates/provide accommodation/inject liquidity in order to keep yields from rising. We saw what happens when front end yields like 1y1y rise above 3% as it did in Q3 2018; the system breaks.

As I said in Tuesday’s note, we are seeing this issue play out in the FF/IOER spread whose widening is purely on the back of too much government debt sitting on bank balance sheets. The Fed is struggling to control front end rates and you cannot have rates rising or this whole economic cycle and market will fall apart.

The Fed has to ease, long-term economic trends show data deterioration, but there appears to be a bit of inflation creeping into the pipeline, i.e. stagflation. That all means steeper curves and now higher gold prices.

via ZeroHedge News https://ift.tt/32rdWbA Tyler Durden

Oracle Loses Critical Lawsuit Alleging Pentagon & Amazon Colluded Over $10B ‘War Cloud’ Contract

Oracle shares tumbled on Friday after the networking giant lost a critical court case against the Pentagon and Amazon. The loss will allow the DoD to proceed with awarding a $10 billion contract to one of the two finalists – a group that includes Amazon and Microsoft.

Ever since the Pentagon named Amazon a finalist for the contract, critics have accused Amazon and the Pentagon of conflicts of interest, claiming that Amazon effectively secured the extremely lucrative project before the bidding even began. Earlier this week, WSJ publicized new evidence showing that senior Amazon executives met with senior DoD officials, including then-Defense Secretary James Mattis, to discuss the project before the bidding even began.

Bezos

The Pentagon has already delayed its decision on who will get the contract to build the Pentagon’s new “war cloud” infrastructure, known as the Joint Enterprise Defense Infrastructure, or JEDI. And some suspected that the decision would be delayed yet again due to the court challenge.

Finishing JEDI is expected to take up to a year, making the winner of the contract a de facto long-term partner with the Pentagon and a major military contractor in their own right.

The computing project would store and process vast amounts of classified data, allowing the Pentagon to use artificial intelligence to speed up its war planning and fighting capabilities.

The court ruled in favor of the DoD and Amazon, saying Oracle had not met certain criteria when bids were due.

The JEDI decision is due next month, and the Pentagon confirmed that Microsoft and Amazon are the final two contenders.

At this point, if AWS gets the contract, the company and the DoD will be dogged by these suspicion, which could hurt Amazon’s chances. Despite Jeff Bezos’s highly visible feud with President Trump, it appears his company is still the front-runner to win the contract.

On May 24, Oracle filed an updated complaint with the US Court of Federal Claims alleging that the procurement process for JEDI had been rife with conflicts of interest.

Oracle alleged that at least two Amazon employees, Deap Ubhi (who was also briefly employed at the Pentagon before returning to Amazon) and Anthony DeMartino, improperly influenced the process to favor AWS at the expense of other competitors. Oracle claims these men helped influence the Pentagon’s decision to structure JEDI as a ‘winner-take-all’ contract, ensuring that Amazon, the cloud computing industry leader, would win the entire $10 billion. These claims have caught the attention of some lawmakers, who have started looking into the bidding.

At this point, it seems just as likely that the contract could go to Microsoft. That would be a major blow for AWS’s market leader status, and could impact the company’s revenue guidance and, ultimately, its share price. But Amazon is still the industry leader, and its lobbying efforts clearly ran pretty deep.

Bezos might still be able to pull it off, and in the process, gain access to the largest repository of classified defense-related intelligence this country has ever seen.

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

Trader: There’s No Silver Lining To The Cloud Over Sterling

Via Bloomberg macro strategist Mark Cudmore,

The UK Is Staring Into The Abyss Of A Currency Crisis

The pound is slumping and yet its fundamental outlook gets even gloomier by the day.

When any asset moves in an almost-straight line for more than two months, there’s a natural instinct to wonder when the pullback is due. When it comes to sterling, there’s little indication the ongoing decline is stretched. Any relief rallies will likely be weak and brief.

The Bloomberg Pound Index has fallen on 38 of the past 48 trading days. Currency weakness is usually a good release valve for economic pressure, but all the signs are that it needs to fall much further.

The collapse in PMIs raises the specter the country is heading for recession.

Worryingly, consensus forecasts for the current-account deficit are widening rapidly, now at 4.2% for 2019, from a 3.7% projection only one month ago and a 3.25% prediction six months ago. This is reminiscent of an EM currency.

It’s not just the economics that are reminiscent of an emerging market, but the politics too. The man who polls indicate is almost certain be to the next leader of the country, Boris Johnson, is openly considering suspending Parliament and the democratic process even before he takes the reins. Many market participants are even more worried by the economic consequences of the opposition party taking power at some point.

Pound traders all must fear the seemingly inevitable position squeeze. But the point is that there’s really no silver lining to the cloud over sterling.

The U.K. is a leveraged economy with a large and growing current-account deficit, deeply negative real yields and poor growth.

On a trade-weighted basis, sterling looks set for record lows in the months ahead and, despite the substantial weakness already seen, the vulnerable side for a sudden gapping move is definitely down. Much further down.

via ZeroHedge News https://ift.tt/2G8pTty Tyler Durden

Trump’s Census Surrender Hints at the Real Reason He Tried to Add a Citizenship Question

Donald Trump’s census surrender, which represents the third time the administration has changed its plans regarding a citizenship question since the Supreme Court ruled against it two weeks ago, was weird even by the standards of an erratic and mercurial president who governs by tweet, often surprising his own underlings. The reason that Attorney General William Barr gave for backing down (for real this time, maybe)—that the administration would ultimately prevail, but not in time to keep the census on schedule—is no more obvious today than it was on June 27. But Trump’s remarks did provide a clue to the real reason (as opposed to the “contrived” and “pretextual” one rejected by the Court) why Commerce Secretary Wilbur Ross decided, shortly after taking office in February 2017, that the 2020 census should ask U.S. residents about their legal status.

Trump said he was ordering the Census Bureau to mine citizenship data from other agencies’ administrative records—something the bureau was already doing, although Ross had officially deemed it an unsatisfactory alternative to directly asking about citizenship in the census. “Knowing this information is vital to formulating sound public policy, whether the issue is healthcare, education, civil rights, or immigration,” the president said. But later he added: “This information is also relevant to administering our elections. Some states may want to draw state and local legislative districts based upon the voter-eligible population.”

The 14th Amendment says “representatives shall be apportioned among the several states according to their respective numbers, counting the whole number of persons in each state, excluding Indians not taxed.” That rule, however, applies to Congress, not to state and local legislatures. The Supreme Court has not resolved the issue of whether drawing state and local legislative districts based on eligible voters rather than all residents is consistent with equal protection and the “one person, one vote” principle. But it arguably is, which is why the late Republican gerrymandering whiz Thomas Hofeller, who was in touch with Trump’s transition team, was so keen on the idea of obtaining better citizenship data.

As Matt Welch noted here in May, Hofeller concluded that redrawing Texas legislative districts based on voting-eligible population “would be advantageous to Republicans and non-Hispanic whites.” But that project required more-detailed data on citizenship. “Without a question on citizenship being included on the 2020 Decennial Census questionnaire,” Hofeller wrote, “the use of citizen voting age population is functionally unworkable.” Not surprisingly, the states challenging the citizenship question seized upon the recently uncovered evidence regarding Hofeller’s scheme as further reason to question the administration’s motives.

The other, more commonly recognized way in which a citizenship question could disadvantage Democrats is by discouraging responses from households that include unauthorized residents. Census Bureau staff estimated that the deterrent effect could result in an undercount of about 6.5 million people, which could mean less representation and federal funding for places where illegal immigrants are concentrated—places that tend to elect Democrats. “It is clear [Trump] simply wanted to sow fear in immigrant communities and turbocharge Republican gerrymandering efforts by diluting the political influence of Latino communities,” the ACLU’s Dale Ho, who argued the census case in the Supreme Court, told The New York Times.

That may well be true, but all the administration had to do if it wanted to ask about citizenship in the census was come up with one or more plausible, nonpartisan reasons for doing so early in the process—reasons like the ones to which Trump alluded yesterday. Given the commerce secretary’s broad discretion to determine census questions, even “we would like to have a better idea of how many illegal immigrants live in the United States” would have sufficed. Instead Ross made the decision for unstated reasons, then spent months scrambling for a rationale before settling on the Voting Rights Act cover story that the Court called a “distraction.”

“In my view,” Barr said, “the government has ample justification to inquire about citizenship status on the census, and could plainly provide rationales for doing so that would satisfy the Supreme Court.” If so, why didn’t it do that the first time around? Trump blamed “meritless litigation” for defeating his plan to add a citizenship question. But a more competent administration would have anticipated that litigation and beaten it back in time.

from Latest – Reason.com https://ift.tt/2XK8RI3
via IFTTT