Tag: news

Authored by Lance Roberts via RealInvestmentAdvice.com,

Yesterday, saw a record surge in the markets (and another epic buying program today).

Such was not surprising given the extreme oversold condition in the market. More importantly, throughout market history, the biggest bull rallies have occurred during bear markets.

$SPX +5% or greater days since 2000. Big picture, bulls DON’T want to see this pic.twitter.com/nYwfperhKi

— Matt Thompson, CFA (@dynamicvol) December 26, 2018

The last two day’s relief rally was simply that.

As shown in the chart below, following the breakdown of the market from its consolidation pattern in October and November, the market plunged 20% from its previous all-time highs. Despite the massive surge in stocks yesterday, all the market managed to do was recoup 2-days of losses.

From the previous peak in early December, the market has yet to even achieve a 38.2% retracement of that decline. It would not be surprising to see this rally try and recoup a full 61.8% of the decline over the next several weeks.

However, that may not even be enough to solve the biggest risk to the market currently. 

In 2010, as Ben Bernanke was preparing to unleash the second round of “Quantitative Easing” upon the economy, he noted specifically the goal was to increase the “wealth effect” in order to assist the nascent economic recovery that was underway.

What exactly does that mean?

“The wealth effect is a theory suggesting that when the value of equity portfolios are on the rise because of accelerating stock prices, individuals feel more comfortable and confident about their wealth, which will cause them to spend more.” – Investopedia

This targeting of the “wealth effect” became known as the Fed’s “Third Mandate” which remains alive and well today as recently noted by Bill Dudley during a speech at the BIS Annual General Meeting:

“As I see it, financial conditions are a key transmission channel of monetary policy because they affect households’ and firms’ saving and investment plans and thus influence economic activity and the economic outlook.” 

Over the last decade, successive rounds of both monetary and fiscal policy in the U.S. has created an inflation of asset prices to historic levels.

The problem, as I have shown previously, is that it failed to translate across the broader economic spectrum as intended. Instead, it simply boosted the wealth of the wealthiest 10% of Americans.

This was also shown in a recent study by the World Economic Forum on negative wealth. To wit:

“With respect to assets, we ask respondents how much money is in their defined contribution plan(s)—including 401(k), 403(b), 457 or thrift savings plans—and Individual Retirement Arrangement accounts, which cover the most common channels through which Americans save for retirement. We also ask the respondents about their total savings and investments, such as money in their checking accounts, stocks, and other financial instruments they may possess. Homeowners are asked to self-appraise the current value of their home. Finally, we ask for self-appraised valuations of any additional land, businesses, vehicles, or other assets the respondent’s household may own. The measure of total assets is then the sum of financial wealth, retirement wealth, home value, and other assets.”

So, what did the results show after a decade of booming asset prices?

“The chart below displays, in the leftmost column, the average and median asset and debt levels for households with non-negative wealth. The next three columns display the same statistics separately for each tercile of negative-wealth households, for example, the second column illustrates the data for those with the least negative wealth and the final column reflects households with the most negative wealth. The very low median levels of assets for all negative-wealth households are readily apparent, as are the large average and median debt amounts among households with larger negative wealth.”

The lack of distribution of wealth across the economy explains why growth, outside the short-term impact of natural disasters and deficit spending, has remained so weak.

“More importantly, if we assume that inflation remains stagnant at 2%, as the Fed hopes, this would mean a real rate of return of just 0.5%.

Economic growth matters, and it matters a lot.

As an investor, it is important to remember that in the end corporate earnings and profits are a function of the economy and not the other way around. Historically, GDP growth and revenues have grown at roughly equivalent rates.”

Wealth Effect Runs In Reverse

Of course, the problem for the Fed, who are now in the process of reversing a decade of monetary stimulus, is when the “wealth effect” reverses. As noted by my friend Doug Kass:

“The prospects for economic and profit growth are waning in the face of the rapid drop in stock prices. 

According to Wilshire Associates, the U.S. stock market fell by $2.1 trillion last week.

That loss in value is more than 10% of the 2017 U.S. Gross Domestic Production (GDP) of $19.3 trillion. (Our domestic GDP represents approximately 31% of world GDP). The loss in value from the September 2018 market top is well in excess of $5 trillion, representing about 25% of projected 2018 U.S. GDP.

The fixed income’s message of slowing economic and profit growth has been resounding — and until recently has been dismissed by most who were intoxicated by rising equity prices and favorable (but lagging) economic data.

Given the steady drumbeat of disappointing high-frequency economic data that suggest consensus growth expectations are too optimistic and underscores the fragile state of the domestic economy, this is a particularly untimely period for stocks to crater.

The economy — from a rate of change standpoint — is now at a critical point. No doubt a lot of damage to forward 2019 economic growth has already occurred and will result in a reduction in consensus profit forecasts.”

Of course, Doug is absolutely correct and we have already been consistently warning about the downdraft in forward earnings expectations which still remain way too elevated. As shown below, the forward estimates for 2019 have already fallen by more than $13/share and will likely hit our target of $146 by early next year.

By the way, that decline will wipe out the entire benefit of the “tax cuts.”

But that decline in profitability should not be surprising given the decline in confidence among consumers. Our friends at Upfina recently penned an interesting piece on this point:

“The consumer expectations index minus the current situation index in the consumer confidence report is signaling a recession is coming. 

We are reviewing where consumer spending is headed by showing the differential between expectations and the current situation. As you can see from the chart below, the current differential is worse than the last cycle, but still higher than the 1990s cycle. Recessions come after this indicator bottoms, and there isn’t much room for it to fall further.”

The chart below is a slightly different variation of Upfina’s which shows the composite index of both University of Michigan and the Conference Board measures of confidence. However, the results are virtually the same with the difference between forward expectations and current conditions ringing in at levels that have normally preceded recessions.

Given that GDP is roughly 70% consumption, deterioration in economic confidence is a hugely important factor. Rising interest rates which bite into discretionary cash flows, falling house and stock prices, and job losses weigh heavily on spending decisions by consumers. Reductions in spending reduce corporate profitability which leads to lower asset prices, so forth, and so on, until the cycle is complete.

None of this should be surprising, of course, as we head into 2019. We saw record low levels of unemployment and jobless claims. Record high levels of sentiment on many different measures. However, as I wrote in August of this year:

“Record levels” of anything are “records for a reason.”

Remember:

• Bull markets END when everything is as “good as it can get.”

• Bear markets END when things simply can’t “get any worse.”

Currently, we are in the early stages of the transition from “bull” to “bear.” 

As investors begin to understand the magnitude of their losses in “dollar” terms, the impact to confidence will become an important headwind for the market. With higher rates already curtailing home and auto purchases, falling asset values will likely start to weigh more significantly on other purchasing decisions.

This was a point made by Bloomberg yesterday:

“The outlook [for additional rate hikes], however, is likely to be tempered by market volatility as falling stocks hurt consumption by reducing household wealth. Business confidence is damaged as volatility rises, the cost of capital increases, and uncertainty over government policies — be it a trade war or an assault on the Fed — forestalls investment.”

Confidence drives everything.

Which also continues to suggest the risk of a recessionary onset in 2019 has risen markedly in recent months.

In other words, it is quite likely the recent roar of the “bear” is not the last we are going to hear.

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After losing a series of high profile cases, the UK government has suffered yet another embarrassing failure in its efforts to hold white collar criminals accountable for financial fraud. But this time, instead of displaying a casual indifference toward crimes committed by the wealthy or an ineffectual prosecutorial strategy, the National Crime Agency (the UK’s equivalent of the FBI) has been tainted by allegations of corruption. The Wall Street Journal reported Thursday that the NCA is conducting an internal probe into allegations that one of its employees leaked information to members of a European insider trading ring that undermined its own probe – the latest black eye for the agency as it seeks to ramp up its prosecution of financial crimes.

The NCA’s internal corruption unit is looking into whether a government translator who had access to wiretap recordings tipped off the target of an investigation to try and disrupt the probe.

A spokesperson for the NCA, which was set up in 2013 to help bolster the government’s prosecution of financial crimes in the wake of the crisis, refused to confirm or deny whether the rumor was true. As we’ve noted in the recent past, the Financial Conduct Authority, one of the agencies tasked with bringing insider trading cases, has an abysmal record with putting criminals away. The FCA has opened 172 insider-trading cases since the 2014; only three have resulted in regulatory action. Even when the agency is successful, the cases typically take years to prosecute. A conviction won against two bankers in 2016 stemmed from trading activity that took place between 2006 and 2008.

Though the name of the translator was not released, the details behind the investigation sound like something ripped from a premium-cable crime drama. For example, the NCA was tipped off about the moles by one of suspects, who wrote himself a letter explaining how the insider trading ring had been aided by “three people working for him” from within the NCA.

One of the suspects in the alleged insider-trading ring wrote a letter to himself that he hid under a carpet in his home before his arrest. In the letter, reviewed by The Wall Street Journal, he described how another suspect told him of a joint NCA investigation with the FCA into their trading.

The other suspect told him he had “three people working for him at the agency,” according to the letter, referring to the NCA.

That suspect told him that a translator working with investigators contacted him through a party known to both of them, according to the letter and people familiar with the matter. The translator tipped him off about the investigation and subsequent discoveries by investigators, including what the other suspect was saying on the phone, the letter and people said.

The other suspect said that they could pay off NCA officers working on the case by transferring money to a bank account in Macau, according to the letter.

This embarrassment follows closely on the heels of the FCA’s latest failed insider-trading prosecution: Earlier this month, the trial of a former UBS compliance officer who fed information to a notorious day trader ended in a hung jury.

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The day after The Dow soars by the most points in history, and on the biggest reversal day in stocks since 2010, Michael Snyder provides a little context for what is really occurring…

When talking heads on mainstream news networks are using phrases such as “the worst is yet to come next year”, that is a clear indication that a new financial crisis has arrived.  And that is an extremely bold statement to make considering that this is already the worst quarter for the stock market in 10 years, this is the worst December for stock prices since 1931, and we just experienced the worst Christmas Eve that Wall Street has ever seen.  So when Mark Jolley made the following statement during a recent guest appearance on CNBC, it definitely raised some eyebrows…

“I would love to be more optimistic but i just don’t see too many positives out there. I think the worst is yet to come next year, we’re still in the first half of a global equity bear market with more to come next year,” Mark Jolley, global strategist at CCB International Securities, told CNBC’s “Squawk Box.”

At this point last year, nobody on Wall Street was talking like this.

In fact, nobody was talking like this even four or five months ago.

But after three extremely painful months the outlook has completely changed, and a lot of market participants are really starting to freak out.

And this is not just happening in the United States.  The truth is that most most markets around the world started to fall well before U.S. markets did, and at this point almost all of the big global indexes are in a bear market…

Bear markets — typically defined as 20 percent or more off a recent peak — are threatening investors worldwide. In the U.S., the Nasdaq Composite closed in a bear market on Friday and the S&P 500 entered one on Monday. Globally, Germany’s DAX, China’s Shanghai Composite and Japan’s Nikkei have also entered bear market levels.

This is the first global bear market that we have seen in a decade, and if central banks are going to try to stop the bleeding they will need to move very quickly.

But the Federal Reserve has already indicated that they do not plan to intervene.  In fact, they just told everyone that they plan to keep raising interest rates.

That is completely insane, but since they aren’t accountable to us they can literally do whatever they want.

So if the central banks don’t step in, who is going to come riding to the rescue?

Individual national governments could try to stimulate economic activity by spending more money, but most of them are already drowning in debt.

Just look at the mess that the U.S. government has created.  Since the beginning of the last financial crisis, we have been adding more than a trillion dollars a year to the national debt.  And over the last 12 months our debt problems have actually accelerated.  Between December 25th, 2017 and December 25th, 2018 we added almost 1.4 trillion dollars to the national debt.  The following comes from CNS News…

The federal government has added another $1,370,760,684,441.54 to the debt since last December 25, according to numbers published by the U.S. Treasury.

On Dec. 25, 2017, the federal debt was 20,492,874,492,282.58, according to the Treasury.

According to the latest numbers published by the Treasury, which show where the debt stood on Dec. 20, 2018, the federal debt was $21,863,635,176,724.12.

So the reality of the matter is that there is simply no room for more “stimulus spending”, because we have already been spending money like drunken sailors that think that they are likely to die tomorrow.

Right now the government is shut down as President Trump and Chuck Schumer square off over 5 billion dollars in border wall funding.  But nobody on Capitol Hill is even talking much about the 1.37 trillion dollars that we just added to the national debt, and that is really what everybody should be focusing on.

We are literally committing national suicide.  No matter what happens with border wall funding, the U.S. will continue to steamroll toward financial oblivion unless something is done about this horrific debt that we are accumulating.

As I wrap up this article, I would like to share something that Austin Murphy wrote that really struck a chord with me.  Over the course of a 33 year career in journalism, Murphy interviewed five presidents and wrote thousands of articles for Sports Illustrated.  But now he is delivering packages for Amazon…

Let’s face it, when you’re a college-educated 57-year-old slinging parcels for a living, something in your life has not gone according to plan. That said, my moments of chagrin are far outnumbered by the upsides of the job, which include windfall connections with grateful strangers. There’s a certain novelty, after decades at a legacy media company—Time Inc.—in playing for the team that’s winning big, that’s not considered a dinosaur, even if that team is paying me $17 an hour (plus OT!). It’s been healthy for me, a fair-haired Anglo-Saxon with a Roman numeral in my name (John Austin Murphy III), to be a minority in my workplace, and in some of the neighborhoods where I deliver. As Amazon reaches maximum ubiquity in our lives (“Alexa, play Led Zeppelin”), as online shopping turns malls into mausoleums, it’s been illuminating to see exactly how a package makes the final leg of its journey.

Like Murphy, America’s future is going to be far less bright than its past if we don’t get things turned around, and right now there is absolutely no indication that this is going to happen.

Our national problems are multiplying, the conditions for a perfect storm are rapidly coming together, and pessimism is quickly growing all across America.

Mark Jolley believes that “the worst is yet to come next year”, and in the end he may turn out to be exactly correct.

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A UC Irvine study has revealed that people who drink moderate amounts of alcohol or coffee, and people who are overweight in their 70s, live longer than their skinny teetotalling counterparts.  

Using data collected from 14,000 people in a 1981 Leisure World Cohort Study (LCWS), along with 1,600 participants who have enrolled in The 90+ Study launched in 2003, researchers from the UC Irvine Institute for Memory Impairments and Neurological Disorders set out to determine factors associated with longevity, such as; 

• What factors are common in people who live to age 90 and beyond?
• What types of food, activities or lifestyles are associated with longevity?
• How many people in their 90s or older have dementia or memory loss – and how does that affect the elderly?
• Do the brains of people in their 90s show evidence of memory loss and dementia – and can people change their risk of dementia through diet, exercise or supplements?

In addition to determining that overweight people in their 70s who drink moderate amounts of alcohol or coffee live longer, researchers also found that over 40% of people aged 90 and older suffer from dimentia, while nearly 80% have some type of disability.

Learn more about the study (or even participate in it) here.

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Authored by Mac Slavo via SHTFplan.com,

The Centers for Disease Control and Prevention is warning of a respiratory virus that is currently attacking both children and adults. The CDC says that everyone should watch out for Respiratory Syncytial Virus or “RSV.”

RSV may start out by noticeable symptoms that are very similar to those of the common cold and most people will recover in less than two weeks believing they only had a cold. Some symptoms are coughing, wheezing, loss of appetite, runny nose, and a fever.  Those symptoms are very similar to those of the common cold, and most people have actually had RSV before possibly believing it to be a cold.

RSV can spread when an infected person coughs or sneezes. You can get infected if you get droplets from a cough or sneeze in your eyes, nose, or mouth, or if you touch a surface that has the virus on it, like a doorknob, and then touch your face before washing your hands. Additionally, it can spread through direct contact with the virus, like kissing the face of a child with RSV. -CDC

However, the CDC says that RSV can be serious for infants and the elderly. As of now, the government agency says there is no vaccine to prevent the virus either. There is a medicine that can help protect some of the babies. This medicine (called palivizumab) is a series of monthly shots.

RSV is the most common cause of bronchiolitis (inflammation of the small airways in the lung) and pneumonia (infection of the lungs) in children younger than 1 year of age in the United States. It is also a significant cause of respiratory illness in older adults. But the virus is rather common. According to the CDC’s own website, almost all children will be infected with RSV by their second birthday, building natural immunities to the infection.

Should you be terrified of RSV? Probably not.  The CDC is well-known for the fearmongering to get people to take a flu shot every year (regardless of its efficacy) and often attempts to scare the public into accepting their notions that common illnesses are dangerous.

But, there are ways to help prevent RSV, and these will also help prevent common colds and the flu as well.

• Wash your hands often. Wash your hands often with soap and water for 20 seconds, and help young children do the same. If soap and water are not available, use an alcohol-based hand sanitizer that contains at least 60% alcohol. Washing your hands will help protect you from germs.

• Keep your hands off your face. Avoid touching your eyes, nose, and mouth with unwashed hands. Germs spread this way.

• Avoid close contact with sick people. Avoid close contact, such as kissing, and sharing cups or eating utensils with people who have cold-like symptoms.

• Cover your coughs and sneezes. Cover your mouth and nose with a tissue or upper shirt sleeve when coughing or sneezing. Throw the tissue in the trash afterward and wash your hands.

• Clean and disinfect surfaces. Clean and disinfect surfaces and objects that people frequently touch, such as toys and doorknobs. When people infected with RSV touch surfaces and objects, they can leave behind germs. Also, when they cough or sneeze, droplets containing germs can land on surfaces and objects.

• Stay home when you are sick. If possible, stay home from work, school, and public areas when you are sick. This will help protect others from catching your illness.

You could also consider naturally boosting your immune system to help give your body a leg up should you be exposed to the virus or actually come down with any “winter time” illness, such as a cold or the flu.

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On December 30, Tokyo will begin reducing tariffs and easing quotas on products sold by US’ largest agriculture competitors — including Australia, Canada, Chile, and New Zealand, as part of the new 11-member Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP), the Wall Street Journal reported.

President Trump had removed the US from the TPP last year, alleging it would have crippled American manufacturers by minimizing duties on US imports of automobiles.

Tokyo will slash duties to other countries on Feb 1 by implementing the European Union-Japan Economic Partnership Agreement (EPA) that would offer the 28-country bloc’s agricultural products to Japan, a move that could dramatically reduce US market share into the island nation in the Pacific Ocean. 

Japan, unlike China, is not playing the retaliatory tariff game with the Trump administration. Instead, they are accelerating a market-opening agenda with more than three dozen countries (ex. the US). 

The new free trade push by Japan “threatens to cut into US market share and depress profits for US agriculture exporters by granting preferential access to…internal competitors,” a May report by the Agriculture Departments warned.

At a recent public hearing, a coalition of US agriculture trade groups sounded a similar alarm.

“Japan is our largest, most reliable and valuable market,” buying about half its imported wheat from Americans, said Vince Peterson, head of US Wheat Associates. “But today we face imminent collapse,” he said, as competitors will start taking American market share and sell their products at an effective tariff rate nearly 10% below those facing US producers.

Peterson told government officials the US “has not sold one kernel of wheat” to China for several months because of the trade war. 

The US Meat Export Federation estimated that Japan’s new trade agreements (ex. the US) could severely damage American beef and pork exports, with expected losses of more than $1 billion within five years. 

The Trump administration has said they aim to correct that “emerging disparity by laying the groundwork to negotiate America’s own free-trade agreement with Japan,” the Journal reported, adding that a new deal would reopen markets for American farmers.

However, those negotiations with Tokyo are not scheduled to start until mid-January — after both the Pacific and Europe trade deals take effect. 

US producers have already reported steep declines in business as a result of Trump pulling out of the TPP as Japan explores new markets. 

Kevin Smith, a vice president at Seaboard Foods LP, a Kansas-based pork producer, said his business is  “already seeing a decline” as longtime Japanese customers “develop new supply chains so they can be fully prepared to take advantage of the tariff reduction opportunities.”

The Journal notes that US farmers are horrified about the loss of market share because Japan has been one of their largest export markets. 

American producers are the most significant food exporters to Japan, with at least 25% market share, ahead of the EU’s 13%. 

Japan imported $11.9 billion in American agricultural products in 2017, making it their fourth-largest foreign market, after China, Canada and Mexico.

And while president Trump has argued that, overall, TPP would have harmed the American economy, for now due to lack of proper deterrence and countermeasures in place, it appears that like pulling out of TPP has forced even more pain upon America’s struggling farmers who had export routes into Japan, and who may soon need another bailout from the administration. 

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Authored by Charles Hugh Smith via OfTwoMinds blog,

While wages have supposedly gone up 3.4% in 2018, taxes and fees are rising at much higher rates.

Here’s a list of tax and fee increases hitting residents of one of the counties I call home; the list includes taxes/fees raised in 2017 and 2018:

1. Property taxes: between 6.5% and 10%, depending on the property class

2. Gasoline tax (county), from 8.8 cents to 23 cents, phased in over 3 years

3. General excise tax, up 6.3%

4. Garbage fee (commercial): up 27%

5. Sewer fees: up 44%

6. Electricity (base rate): up 7.4%

7. Annual vehicle safety inspection fee (state): up $5.81

8. County water service: up 8%

9. Accommodation fee (a.k.a. hotel tax) (state): up 10%

I may have missed a few, but you get the idea: while wages have supposedly gone up 3.4% in 2018, taxes and fees are rising at much higher rates. (Given that the Consumer Price Index underweights increases in big-ticket costs such as healthcare and college, the 3.4% gain is suspect; those households exposed to giant leaps in expenses likely lost ground).

I understand local governments are caught in a vise: wages and benefits to their employees make up the majority of their expenses, and those costs are mandated by union contracts and/or state-level agreements.

Many local governments cut services in the Great Recession rather than raise fees and taxes, and so now that the economy has “recovered,” they’re rushing to raise revenues to restore services or deal with the backlog of projects set aside during the lean years.

But none of that makes it easier for households and enterprises getting hit by fast-rising fees and taxes. The above list is just the tip of the iceberg: how much does a simple parking ticket cost you now? In many locales, what once cost $15 is now north of $60.

How about the cost for a copy of an official document at the County Records office? In many locales, what was once a nominal fee is no longer nominal.

We all know public pensions are often underfunded, or dependent on outsized stock market gains, which means the increases in local government taxes and fees are just getting started.

*  *  *

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Yesterday, we reported that Russian President Vladimir Putin supervised the final test launch of a new hypersonic missile system that he alleges can evade US missile defenses will be deployed in 2019, as part of Russia’s military modernization effort. “This is a great success and a big victory. This is a wonderful, excellent gift for the country for the New Year,” Putin said.

“Russia was forced to develop the Avangard (hypersonic glider) after the US withdrew from the Anti-Ballistic Missile Treaty in 2002,” Putin explained, adding, “the Trump administration’s plan to scrap a treaty on medium-range missiles could lead to a new arms race.”

Putin had previously announced the hypersonic missile project back in March, when he first praised its abilities at the annual state of the nation speech to the Federal Assembly. At the time, he said the glider could travel at Mach 20. 

Besides that, not much information has been publicly released about the hypersonic glider, but Russia made it known Wednesday that the final test was completed and deployment was imminent for 2019.

Shortly after the test, Russia’s Deputy Prime Minister Yury Borisov told Rossiya 24 TV channel that the new glider could strike a target at 30,000 km/h or 19,000 mph, reported RT.  Borisov said the excellent mobility makes the Avangard one of the hardest targets to hit. He explained: “There’s almost no missile that can shoot it down at such speeds.”

It is tough for missile defense systems to predict the glider’s trajectory, which means the glider can penetrate Western missile shields without a problem. “Any missile defense becomes useless, it is very tough to detect and hit the projectile,” Borisov said.

During the Wedsenday test, the defense ministry said the Avangard glider was fired from the Dombarovsky site in southern Russia and struck a target at a missile range in the Kamchatka Peninsula. The weapon performed in-flight maneuvers and accurately hit its intended target.

A video was released by the ministry showing the first phase of the test, when the Avangard glider was launched. The missile’s job was to catapult the hypersonic glider into the atmosphere; the ministry did not release footage of the glider smashing into a target at Mach 20. 

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If President Trump needed an ulterior motive to keep his partial government shutdown alive for the foreseeable future, this is it. Since the shutdown began, Trump has argued that federal courts should not be exempt – which means the many legal challenges to Trump administration policies should be frozen for the time being.

But according to Bloomberg, federal judges are pushing back, arguing that some of the court challenges involve issues of public safety – or are otherwise finding excuses to keep the challenges moving forward in spite of the administration’s wishes.

In one case, a district judge is refusing the administration’s request to delay briefings in a challenge to Trump’s new asylum policy, which requires asylum applicants to present themselves at legal points of entry to have their claims heard.

“Government functions may continue” when they relate to “the safety of human life or the protection of property,” Moss wrote Thursday. The judge cited a government report indicating that a large proportion of the federal government’s immigration employees, including 91 percent of Customs and Border Protection workers, should continue working during shutdowns.

The government is also pushing to move ahead with a case filed in San Diego challenging its family separation policy.

“Although we greatly regret any disruption caused to the court and the other litigants, the government hereby moves for a stay of all deadlines” until funding resumes, the U.S. said in a typical request filed Dec. 26 in a suit in San Diego challenging the administration’s family separation policy.

A federal case involving the implementation of a federal monitor for the Baltimore Police Department is also moving ahead despite the adminstration’s attempt to shut it down.

But a high-profile Maryland lawsuit involving the implementation of a consent decree for civilian oversight of the Baltimore Police Department won’t stop. Chief U.S. District Judge James Bredar in Baltimore called the shutdown a “dispute internal to one party” and directed Justice Department attorneys “to find the means by which to continue their participation in this litigation on a timely basis regardless of their client’s internal issues.”

“Deeply serious matters involving the safety and well-being of the citizens of Baltimore are at issue in this case, and the court is determined that implementation of the previously entered consent decree will not be impaired or delayed by this sort of collateral issue,” Bredar wrote in a Dec. 26 order.

The administration had better luck in Washington and San Francisco. In SF, the administration’s appeal of a decision throwing out its asylum restrictions along the Mexican border will move ahead.

The government had better luck in Washington before U.S. District Judge Emmet Sullivan, who granted a request to put a case on hold in a two-sentence ruling on Dec. 26. The judge directed the Justice Department to notify the court “when appropriations are restored or if a continuing resolution is enacted.”

The U.S. is pressing ahead in at least one instance. The Trump administration on Dec. 26 filed a notice in an appeals court in San Francisco that it will seek to reverse a judge’s order blocking it from implementing asylum restrictions on the Mexico border.

State AGs are also pushing for a challenge to an administration policy that they say would undermine (recently gutted) ObamaCare (though appeals to a Texas judge’s ruling will need to wait).

A coalition of a dozen state attorneys general also opposed a government request to delay a Jan. 2 deadline for a crucial joint filing in an Obamacare-related lawsuit. The attorneys general challenged a Trump administration plan that would allow small businesses to join together to offer cheaper health-insurance plans — a move the states say undermines some of the protections required under Obamacare.

The states said there’s a “reasonable likelihood” that the “protection of property would be compromised” as a result of the financial harm the new rule will cause to their group and individual health insurance markets.

“Indeed, that disruption was both the anticipated and the intended purpose of defendants’ rule-making,” the states said. The Department of Labor, the defendant, “should not be delayed in moving forward with their litigation of this critical case,” they said.

Unfortunately for Trump, the DOJ has already declared that the shutdown won’t delay the Mueller probe.

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Homeland Security Secretary Kirstjen Nielsen says that the United States will take “extraordinary” protective measures when it comes to immigrant children in custody, after a second Guatemalan child died in custody. 

Neilsen will travel later this week to the US-Mexico border to observe medical screenings and conditions at Border Patrol stations, according to AFP. 

New from @DHSgov: Secretary Kirstjen M. Nielsen Statement on Passing of Eight Year Old Guatemalan Child pic.twitter.com/ft7RK1RpPR

— Sahil Kapur (@sahilkapur) December 26, 2018

“In response to the unprecedented surge of children into our custody, I have directed a series of extraordinary protective measures,” she said, following the “deeply concerning and heartbreaking” death of eight-year-old Felipe Gomez, who collapsed after running a high fever while traveling with his father Agustin Gomez from the Western Guatemalan indigenous Chuj Maya community near the Mexican border. 

Gomez was detained with his 47-year-old father at a crossing in El Paso, Texas, on December 18 and had been transferred to a New Mexico medical center showing signs of sickness on Monday, the CBP said.

Staff diagnosed him with a cold but later discovered a fever. He was discharged at midday, with prescriptions for ibuprofen and the antibiotic amoxicillin.

The boy was later sent back to the hospital suffering from nausea and vomiting. He died shortly before midnight on December 24. –AFP

Guatemala has called for an investigation into the boy’s death, the cause of which has not been determined. Customs and Border Patrol (CBP) says that they would “ensure an independent and thorough review of the circumstances.” 

The first death of a migrant child happened on December 8, when seven-year-old Jakelin Caal Maquin became sick on a bus traveling from a New Mexico port of entry to Lordsburg, New Mexico. Her father said he has “no complaints about how Border Patrol agents treated him and his daughter,” adding in a statement through his attorneys that he was “grateful for the many first responders that tried to save young Jakelin’s life in New Mexico and Texas.” 

Nielsen has asked experts from the Centers for Disease Control and Prevention to investigate “the uptick in sick children crossing our borders” and to identify what further steps border hospitals should take in preparation, her statement said.

Nielsen added that she has asked the US Coast Guard medical corps to assess and “make appropriate recommendations” about Border Patrol medical programs, and has sought additional medical professionals from the Department of Defense. –AFP

The United States is unable to cope with the thousands of migrant arrivals, US Customs and Border Protection Commissioner Kevin McAleenan said on Wednesday. “We need help from Congress. We need to budget for medical care and mental health care for children in our facilities,” he told CBS News. 

In the last two months, the Border Patrol has apprehended 139,817 people on the southwest US border, compared with 74,946 over the same period a year earlier, said Nielsen. Over 68,500 were “family units,” and approximately 14,000 others were unaccompanied minors, she said, adding that the system has been pushed to a “breaking point.” 

Guatemalan migrant Augusto Mendoza, who brought his one-year-old son on the journey to El Paso, told AFP that he would “never” consider making the journey again. 

“It’s been very, very hard. I would never think about doing it again, I regret it for my son,” said Mendoza – whose wife and children were separated from him at the border and released from detention on Christmas day. 

Medical challenges

DHS officials say that all children in border patrol custody will now be given comprehensive medical examinations, backing McAleenan’s commitment to “secondary medical checks,” with an emphasis on those under 10-years-old. 

“It is now clear that migrants, particularly children, are increasingly facing medical challenges and harboring illness caused by their long and dangerous journey,” said Nielsen. 

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