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The dollar and Treasury yields are completely ignoring The Fed Minutes for now, but the machines saw something that prompted a mini momo ramp into the green for stocks for the day…
For now, stocks are the only thing moving… Gold, Bonds, and the Dollar are unch.
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The official numbers for opioid-related deaths in 2017, released by the U.S. Centers for Disease Control and Prevention today, demonstrate once again the folly of trying to tackle this problem by reducing access to prescription pain pills. The volume of opioids prescribed for American patients has been falling since 2010, while the upward trend in deaths involving opioids has accelerated, reaching a record number last year.
Of the 47,600 opioid-related deaths the CDC counted in 2017 (the black line on the chart below), 60 percent involved the drug category that consists mainly of illicitly manufactured fentanyl and its analogs (the red line). Just 30 percent involved the category that includes the most commonly prescribed pain medications (the blue line), and some of those deaths also involved fentanyl or heroin (the yellow line), which was implicated in one-third of the opioid fatalities. Last year’s 13 percent increase in opioid deaths was due almost entirely to a 47 percent increase in deaths involving fentanyl and its analogs, since deaths involving heroin and pain pills stayed about the same, while deaths involving methadone fell.
Allowing for deaths involving multiple opioids, the CDC’s numbers indicate that pain pills account for less than 30 percent of these deaths, and the actual number is probably considerably lower. A 2017 analysis of opioid-related fatalities in Massachusetts found that heroin or fentanyl was the deadliest drug in 85 percent of the cases.
The Trump administration nevertheless wants to reduce opioid prescriptions by a third during the next three years. But opioid prescriptions, measured by total morphine milligram equivalents (MME) sold, have already fallen by a third since 2010, as indicated by the green area in the chart (with units, in billions of MME, on the right axis). During that period, opioid-related deaths more than doubled. Does this seem like a winning strategy? 
Far from reducing deaths involving opioids, the crackdown on pain pills has pushed nonmedical users into the black market, where the drugs are much more dangerous because their potency is highly variable and unpredictable. “Synthetic drugs tend to be more deadly than prescription pills and heroin for two main reasons,” The New York Times notes. “They are usually more potent, meaning small errors in measurement can lead to an overdose. The blends of synthetic drugs also tend to change frequently, making it easy for drug users to underestimate the strength of the drug they are injecting. In some parts of the country, drugs sold as heroin are exclusively fentanyls now.”
Meanwhile, patients suffering from severe pain are finding it increasingly difficult to obtain the medication they need to make their lives bearable. Many people with severe chronic pain who have functioned well on opioids for years have seen their doses dramatically and arbitrarily cut as a result of government pressure, including the CDC’s own supposedly voluntary but increasingly mandatory prescribing guidelines.
Even people with agonizing terminal illnesses are not immune from the imperative to reduce opioid prescriptions. Barbara McAneny, the president of the American Medical Association, recently described a patient with metastatic prostate cancer who tried to kill himself after he was denied medication he was prescribed for his bone pain because a suspicious pharmacist called his insurer, which denied coverage. While “I share the nation’s concern that more than 100 people a day die of an overdose,” she said, “my patient nearly died of an underdose.”
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Around the world, governments attempt to limit subjects’ legal access to weapons—ostensibly to keep the peace, but in reality often done to minimize challenges to government power. And, around the world, those subjects defy such restrictions, notes J.D. Tuccille.
In fact, DIY firearms ranging in sophistication from muskets to grenade launchers exist in the millions across the planet, according to a new report that should (but won’t) finally demonstrate to government officials the futility of efforts to disarm people who insist on being free, Tuccille suggests.
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With Fed Chair Powell having blown his dovish wad yesterday, today’s FOMC Minutes (from a hawkish Fed statement) – as dated as they are – seem like a bit of non-event.
The main headline from the minutes is that almost all Fed officials saw another rate-hike “warranted fairly soon.”
But The Fed discussed modifying language on “Further Gradual” hikes.
Additional key highluight include:
Fed: IOER change may be needed soon, possibly before Dec. FOMC
Fed officials discussed need for ‘flexible’ approach on rates
Many fed officials: Statement needs more data-dependent focus
Almost all fed officials saw gradual hikes consistent with goals
Fed minutes: policy not pre-set, upsides and downsides weighed
Fed saw risks in trade, corporate debt, low inflation expectations
Fed noted upside risks of fiscal stimulus, strong consumers
Several fed officials concerned on non-bank corporate debt
Fed held broad discussion over need for abundant reserves
Fed discussed benefits of targeting rate other than fed funds
Fed officials saw above-trend growth slowing over medium term
Fed officials saw price gains consistent with sustained 2% goal
Specifically…
On data dependent:
Many participants indicated that it might be appropriate at some upcoming meetings to begin to transition to statement language that placed greater emphasis on the evaluation of incoming data in assessing the economic and policy outlook; such a change would help to convey the Committee’s flexible approach in responding to changing economic circumstances.
On further gradual language:
Almost all participants reaffirmed the view that further gradual increases in the target range for the federal funds rate would likely be consistent with sustaining the Committee’s objectives of maximum employment and price stability.
On fairly soon language:
Consistent with their judgment that a gradual approach to policy normalization remained appropriate, almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations.
* * *
The market had already given up on The Fed’s forecasts…
And expectations in the markets are now for less than one 25bps rate-hike next year…
Furthermore, it is worth noting that the US macro surprise index is at its weakest in over a year
* * * Full Minutes Below:
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Authored by Nick Cunningham via Oilprice.com,
Surging U.S. oil production in the Permian basin has helped crash oil prices. But the Permian is also home to skyrocketing natural gas production, and output is growing so fast that drillers are trying to give it away for free. When they can’t, they just burn it off into the atmosphere.
Unlike in the Marcellus shale, where natural gas is the main target, drilling in the Permian is focused entirely on crude oil. Natural gas is a nice bonus that comes along with the oil. But the drilling frenzy in West Texas and New Mexico has resulted in a glut of this associated natural gas. There is a pipeline bottleneck for crude oil, but there is also a shortage of pipeline space for natural gas.
The glut has become so bad that next-day prices for gas at the Waha hub in the Permian have plunged to a record low, falling to as low as 25 cents per MMBtu. In some instances, producers have actually sold some gas at negative prices. That means that a company is paying someone else to take the gas off of their hands. On Tuesday, the lowest price recorded was -25 cents/MMBtu (to be clear, that is negative 25 cents), according to Natural Gas Intelligence(NGI). It was the second consecutive day that prices were in negative territory.
“That’s right, someone was paid to buy gas in the Permian on Monday,” RBN Energy LLC analyst Jason Ferguson said, referring to NGI’s pricing data.
“While we’d like to tell you this was some sort of transient, one-off event that led to a day of dramatically low gas prices, that isn’t likely the truth of the matter.”
Ferguson went on to add that there is little prospect of a recovery until next year.
“The Permian gas market is flooded with associated gas and won’t see significant new takeaway capacity until the start-up of Kinder Morgan’s Gulf Coast Express pipeline in late 2019,” Ferguson said, according to NGI.
“The problem is here to stay, at least for a few months. Take a deep breath if you trade the Permian gas markets.”
The negative prices are down sharply from the average price this year at $2.16/MMBtu at the Waha hub.
The predicament also stands in sharp contrast to natural gas traded elsewhere. Nymex prices for December delivery are trading around $4.40/MMBtu, up sharply over the past month due to low inventories and cold weather.
Ironically, the inauguration of new oil pipelines is making the gas glut worse. According to RBN, the startup of the expansion of the Sunrise oil pipeline, owned by Plains All American Pipeline LP, added takeaway capacity for oil. That has allowed for more drilling and completions, which has led to more produced gas.
The supply glut has had other effects beyond low prices. Drillers often vent, flare or otherwise leak natural gas during their drilling operations, which has both environmental and fiscal consequences. A report from the Wilderness Society and Taxpayers for Common Sense, finds that between 2009 and 2015 drillers on public lands wasted 462 billion cubic feet (Bcf) of natural gas, or enough gas to meet the needs of 6.2 million households for a year. At an average price of $3.65/MMBtu over that time period, the wasted gas adds up to about $1.7 billion.
The federal government under President Obama tried to force drillers to capture this wasted gas. In 2016, the Bureau of Land Management (BLM) finalized regulations on venting, flaring and leaks at oil and gas facilities on public lands. However, BLM under Trump has rolled back these standards, relying instead on a patchwork of uneven regulations at the state level.
Some states do better than others on regulation. Colorado, for instance, “set the standard for reducing gas waste when it finalized first-in-the-nation methane capture requirements in 2014. The state has shown that there are easy and cost-effective ways to address methane pollution,” according to the report from the Wilderness Society and Taxpayers for Common Sense.
At the other end of the spectrum is New Mexico. New Mexico has wasted more natural gas than any other state, about 570,000 tons annually, according to the report. The state wastes about $182 to $244 million worth of gas each year, or enough gas to satisfy the needs of every resident in New Mexico each year. It is no surprise that New Mexico has some of the weakest standards on methane emissions, a problem now that BLM is removing the federal standards and leaving regulation up to the states.
Meanwhile, the problem is only getting worse with soaring production in the Permian. The rate of flaring in New Mexico climbed by 2,244 percent between 2009 and 2013.
Negative prices for natural gas offers very little incentive for drillers to capture that methane.
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Authored by Thorstein Polleit via The Mises Institute,
“I think we have much more of a Fed problem than we have a problem with anyone else”, said US President Donald J. Trump on 20 November 2018.
While the press, mainstream economists, and bankers cry wolf, the US President hits the nail on its head: The Fed is the source of significant economic and political trouble. By issuing US dollar out of thin air, it sets into motion unsustainable booms, which sooner or later turn into bust.
What is more, the Fed, expanding the US dollar quantity through credit expansion, nurtures the “deep state”: Providing it with the financial means to buy voter consent; to increase its impact on all walks of peoples’ lives; to make possible its aggressive military adventures on a world-wide scale; and to keep alive and kicking its monetary system – that couldn’t survive without an ever deeper state.
Viewed from this perspective, is it not good news that the Fed wants to tighten its policy further? Well, the truth is that Fed interest rate changes do not and cannot solve any problems caused by the Fed’s meddling with interest rates in the first place. By its very nature, monetary policy inevitably creates economic distortions – which appear in the build-up and bursting of speculative frenzies and the notorious boom and bust cycles.
By reviewing how the Fed has been setting interest rates in the past, you might get the impression that things have become ever more problematic. Just consider Figure 1, which shows annual US nominal GDP growth and the Federal Funds Rate in per cent. Eyeballing these two series suggests that the Fed has set its interest rates more or less in line with nominal GDP growth.
Mainstream economists would not find any fault with such an interest rate setting. They would argue that the central bank should, in principle, increase its interest rate if and when economic growth accelerates, and it should lower borrowing costs once GDP expansion loses steam. (A formalized version of this viewpoint has been made popular by the concept of “Taylor interest rate rules.”)
The really interesting finding, however, comes out in Figure 2: It shows the difference between annual nominal GDP growth and the Fed’s main interest rate in percentage points. Moreover, as we can see, this time series has been drifting upwards: from cycle to cycle, the Fed has allowed the gap between nominal GDP growth and its main refinancing rate to widen. In other words: It appears that the Fed’s policy has become increasingly expansionary.
In this context, we have to remind ourselves what artificial lowering of the market interest rate — and this is what the gap between nominal GDP growth and the Fed’s main refinancing rate represents — does to the economy. For instance, it inflates asset prices. In the case of stocks, expected future profits are discounted with a lower interest rate, thereby increasing their present value and thus stock prices.
Pretty much the same happens with real estate prices. As asset prices go up on the markets, their value as collateral in credit transactions also rises. Borrowing on the part of asset holders becomes economically more attractive. Lenders, encouraged by collateral gaining in value, ease their lending standards. As a result, rising asset prices set into motion a borrowing and lending spree.
Furthermore, artificially suppressed market interest rates encourage consumption at the expense of savings. The economy is then living beyond its means. Initially, output and employment increase. Sooner or later, however, it becomes evident that the “boom” is unsustainable, and that it (other things being equal) inevitably has to turn into “bust”.
To fend off the bust, the central bank prevents the artificially lowered interest rate from rising. In fact, to keep the boom going, the central bank has to push the market interest rate to ever lower levels. This is actually what the Fed has been doing for decades: It has set into motion a boom through pushing down market interest rates, and in times of crises, it has lowered borrowing costs even further.
Once the economy recovered, the Fed has raised interest rates, but only very hesitantly. This may explain why the gap between nominal GDP growth and the Fed’s key interest rate has grown so substantially over time. With the Federal Funds Rate currently standing in a band of between 2.00 and 2.25 per cent, Figure 1 b would suggest that the Fed’s rate hiking spree might be pretty close to an end.
But as noted earlier, this would by no means bring the problems caused by Fed monetary policy to an end. But what should and could be done? Let us conclude this article with what Murray N. Rothbard has to say about the Fed, the problems it creates, and how an economically sound solution would look like:
The American economy has suffered from chronic inflation, and from destructive booms and busts, because that inflation has been invariably generated by the Fed itself. That role, in fact, is the very purpose of its existence: to cartelize the private commercial banks, and to help them inflate money and credit together, pumping in reserves to the banks, and bailing them out if they get into trouble. When the Fed was imposed upon the public by the cartel of big banks and their hired economists, they told us that the Fed was needed to provide needed stability to the economic system. After the Fed was founded, during the 1920s, the Establishment economists and bankers proclaimed that the American economy was now in a marvelous New Era, an era in which the Fed, employing its modern scientific tools, would stabilize the monetary system and eliminate any future business cycles. The result: it is undeniable that, ever since the Fed was visited upon us in 1914, our inflations have been more intense, and our depressions far deeper, than ever before.
There is only one way to eliminate chronic inflation, as well as the booms and busts brought by that system of inflationary credit: and that is to eliminate the counterfeiting that constitutes and creates that inflation. And the only way to do that is to abolish legalized counterfeiting: that is, to abolish the Federal Reserve System, and return to the gold standard, to a monetary system where a market-produced metal, such as gold, serves as the standard money, and not paper tickets printed by the Federal Reserve.”
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For the past 15 years, Thomas and Kris Apruzzi have celebrated the holiday season with a spectacular Christmas lights display at their home in Old Bridge Township, New Jersey. Though the public can see the display for free, the Apruzzis have used the opportunity to raise more than $20,000 in donations for such good causes as Home for Our Troops and St. Jude Children’s Research Hospital.
This year, the local government decided to get involved. The couple was informed they’d “be required to pay at least $2,000-a-day in police [security] and you’re also going to have to pay for shuttle bus service for all of the people that are going to come to the display,” Thomas tells the New York Post. Thomas says officials implicitly threatened to shut down the display if he and his wife didn’t cooperate.
Township Mayor Owen Henry disputes that account of what happened. “We have not told Mr. Apruzzi to shut his light off. We have not and I will not,” he tells My Central Jersey, adding that officials “recommended” rather than required that the Apruzzis provide a shuttle service. But Henry does not deny he wants the family to pay up. “We have determined that that additional police resources is going to cost the township of Old Bridge—every taxpayer in Old Bridge—about $2,000 per night,” he says. “That is money that is not in our budget.”
Henry tells My Central Jersey it’s a question of “public safety.” The lights display attracts people from around the area—up to 1,000 per night, according to NJ.com—and the town plans to provide police officers to manage crowd control and direct traffic, as well as mobile light posts to light up the street.
Neighbors started complaining about the display after it was featured in 2014 on ABC’s The Great Christmas Light Fight, Thomas told New Jersey 101.5 last year. The town has used auxiliary cops in the past to ensure safety, but after more people started complaining last year (when the Apruzzis say they added new features to the display), officials decided to take additional action. Parking and vehicle access will be restricted in the area, and the town is setting up a walkway for pedestrians.
The Apruzzis have also made some compromises. From the start of December through New Year’s Day, the display will be on only from Thursdays through Sundays and only for four hours a night. Thomas does plan to put them on every night during the week of Christmas. “It’s 16 hours a week and they want to charge us $8,000 a week to direct people and tell them where to walk,” he tells My Central Jersey.
Once the holidays are over, the town council will decide whether or not the Apruzzis have to pay up. “We’ve never waived the fees for a private event; this is a private event,” Henry tells ABC News.
But surely that should count in the family’s favor, not the town’s. The Apruzzis aren’t using public property; they’re creating something incredible on their own land. It also doesn’t sound as though there have been serious safety issues in the past, which raises the question of why a police presence is necessary in the first place. And not that it should be any of the town’s business, but the Apruzzis aren’t doing this for the money. They’ve already spent almost $100,000 to create the display, and the money they do receive goes to charity. I certainly understand how the disruption can be annoying to the neighbors, and I’m sure the Apruzzis are imposing real costs here. But the town’s response seems excessively expensive and unusually harsh.
Thomas, meanwhile, tells the Post he can’t afford to pony up what could end up being tens of thousands of dollars to the township. As a result, the family has started a GoFundMe to raise money for any fees they might have to pay. But they plan to carry on with their yearly tradition no matter what. “This is my First Amendment right,” Thomas tells the Post. “I’m a Catholic. I’m very into Christmas. I love Christmas.”
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The Centers for Disease Control and Prevention reports that for the third consecutive year, average life expectancy has declined: After peaking at 78.9 years in 2014, it has dropping to 78.6 years in 2017. This follows decades of increases.
While a fiercer than usual outbreak of influenza contributed to the decline last year, the main causes are rising suicides rates and the increasing number of deaths from drug overdoses associated with opioids.
Overdose deaths in 2017 rose to 70,237, up from 63,632 the year before. But overdose deaths associated with legal opioids did not significantly change from 2016. The increase came almost entirely from street drugs.
And why was there a rise in the use of black market fentanyl and heroin? The biggest reason is most likely the drug war.
In 2010, the manufacturers of legal opioids agreed to reformulate their products so that they could no longer be easily crushed and inhaled. A 2012 study in the New England Journal of Medicine found that this reformulation was the primary reason that many painkiller addicts switched to heroin. “The most unexpected, and probably detrimental, effect of the abuse-deterrent formulation was that it contributed to a huge surge in the use of heroin, which is like OxyContin in that it also is inhaled or injected,” said the study’s principal investigator.
A fascinating 2018 National Bureau of Economic Research paper, “How the Reformulation of OxyContin Ignited the Heroin Epidemic,” finds that the rise in the use of heroin began the very month after legal opioids were reformulated. From the abstract:
We attribute the recent quadrupling of heroin death rates to the August, 2010 reformulation of an oft-abused prescription opioid, OxyContin. The new abuse-deterrent formulation led many consumers to substitute to an inexpensive alternative, heroin. Using structural break techniques and variation in substitution risk, we find that opioid consumption stops rising in August, 2010, heroin deaths begin climbing the following month, and growth in heroin deaths was greater in areas with greater pre-reformulation access to heroin and opioids. The reformulation did not generate a reduction in combined heroin and opioid mortality—each prevented opioid death was replaced with a heroin death.
Now cheaper and more deadly black market fentanyl is making the situation worse. As my Reason colleague Jacob Sullum writes, we can all “thank drug warriors for the escalating death toll from superpotent synthetic opioids.” And for a fall in average life expectancy too.
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Further evidence that The Guardian “entirely fabricated” a report that former Trump campaign chairman Paul Manafort visited Julian Assange in 2013, 2015 and the spring of 2016; his passports…
The Washington Times reports that Manafort’s three passports reveal just two visits to England in 2010 and 2012, which support his categorical denial of the “totally false and deliberately libelous” report in The Guardian, which said that Manafort visited Assange in the Ecuadorian Embassy – ostensibly to coordinate on the WikiLeaks release of Hillary Clinton’s emails.
The Times does note that Manafort could have conceivably entered the UK from another European country and not received a stamp – however a representative for Manafort insisted to the Times that Manafort has only made those two visits to England since 2008, and that a libel suit against the Guardian is under discussion.
While two of Manafort’s passports were entered as evidence at his tax evasion trial – something that The Guardian‘s Luke Harding and Dan Collyns could have easily looked up – the Times has obtained a copy of his third passport which confirms the two visits.
His attorney explained the passports this way: One was lost, one was used to submit to foreign embassies for visas, and one was used as a backup. Manafort later found the third passport. –Washington Times
WikiLeaks immediately fired back at The Guardian – betting the paper “a million dollars and its editor’s head that Manafort never met Assange.”
This is going to be one of the most infamous news disasters since Stern published the “Hitler Diaries”.
— WikiLeaks (@wikileaks) November 27, 2018
Manafort, meanwhile, issued a statement on Tuesday afternoon through a spokesman, saying: “This story is totally false and deliberately libelous. I have never met Julian Assange or anyone connected to him. I have never been contacted by anyone connected to Wikileaks, either directly or indirectly. I have never reached out to Assange or Wikileaks on any matter. We are considering all legal options against the Guardian who proceeded with this story even after being notified by my representatives that it was false.”
Blaming Russia
Following The Guardian‘s epic faceplant, an ex-CIA agent penned an article in Politico suggesting that Russia tricked The Guardian into writing the Manafort-Assange story.
Journalist and attorney Glenn Greenwald called them out in a scorching series of tweets – while dismantling The Guardian‘s original report the day before.
1/ Why do attacks on the US media – calling it “Fake News” – resonate so widely? Because of utterly fabricated and reckless articles like this one from @politico, by a former *CIA officer allowed to write under a “pen name”*. The whole thing is a fraud: https://t.co/kGRsiOXHHN
— Glenn Greenwald (@ggreenwald) November 28, 2018
As Greenwald notes of Politico‘s response, it looks like “the whole thing is a fraud.”
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Take a look over to your right at that Reason “r” filling up and you’ll see that earlier today we added a whopping $25,000 donation!
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