Month: August 2014

The US dollar had looked like it was finally finding traction.  The euro was at its lowest level since last November.  Sterling, which had been a market darling, was pushed through its 100-day moving average for the first time since last August, falling about 2.25% since mid-July.  The dollar pushed through JPY103 to trade at its best level since April.  The Australian and Canadian dollars retreated to their lows from early June. 

 

A critical consideration behind the dollar’s advance was that the Fed’s mandate of full employment and price stability were being approached more rapidly than many, including Fed officials had anticipated.  The recent data prompted spurred speculation of a more hawkish Yellen at the Jackson Hole confab late this month and increased risk that that the first rate hike is delivered earlier (~Q1 15) rather than H2 15.  

 

However, the July employment data did not confirm an acceleration of the economy.   While overall job growth was in excess of 200k for the sixth month, it was flattered by government jobs.  The private sector added the least amount of jobs since January.  More telling for the Federal Reserve than the tick up in the unemployment rate was the fact that hourly earnings were flat.   In the FOMC statement, the Fed recognized the downside risks to inflation had been reduced, but still highlighted the “significant” slack in the labor market.  There seemed little in July employment report to change their minds.  

 

The July jobs data stopped the dollar’s rally in its tracks.  It now appears poised to consolidate its recent gains, and that consolidation phase will translate into a somewhat weaker greenback.  The Dollar Index rallied from 79.74 to 81.57 in July.  The RSI and Stochastics have turned down, though the MACDs haven’t.  The downside target is 80.60-80.95.  

 

The speculative market has amassed a large short euro position.  The euro fell from $1.37 at the start of July to just below $1.3370 on July 30.   The RSI has turned up, and the MACDs look poised to cross over the next couple of sessions.   The slow Stochastics are also about to turn higher.  Although the initial retracement objective comes in near $1.3470, we suspect the bottom of the old $1.35-$1.37 range is more significant.  A break of the $1.3365 area would signal a new leg down, with the initial target near $1.3230. 

 

In the second half of last week, the dollar traded a little above JPY103, which is the upper end of the greenback’s  three-month trading range.  It failed to close above that threshold and appears likely to consolidate, with initial support near JPY102.35 and then JPY102.00.  The yen did not appear to respond much to the equity market swoon, but does still seem to be responsive to US yields.  

 

The jump in the 10-year yield from 2.45% to above 2.60% supported the US dollar, but the dramatic loss on July 31, followed by the disappointing employment report saw US yields pullback to 2.50%.  The dollar-yen exchange rate followed suit.  Yields are likely to consolidate in the week ahead.  

 

Whereas the euro’s decline was characterized by the accumulation of shorts, sterling’s fall has been driven by long liquidation.  Short-covering of the euro against sterling prevented cable from finding much traction in the otherwise softer US dollar environment post-jobs and pre-weekend.  While the technical indicators show risk of additional losses, the  sterling finished the week below the lower Bollinger Band (~$1.6860, which corresponds to the 100-day moving average), warning the short-term market may be over-extended.   The $1.6910-30 area may cap upticks.  Given that the economic data appears to be moderating, and the approaching Scottish referendum, new buyers may be deterred.  A break of $1.68 could spur another cent decline initially.  

 

The dollar-bloc currencies stabilized before the weekend, but both the Australian and Canadian dollars were the poorest performers of the week, losing almost 1% against the US dollar.  The Reserve Bank of Australia meets in the week ahead, and while no change in policy is widely anticipated, given the weakness in building approvals and terms of trade (import/export prices), the risk is the RBA tries talking down the currency, which even is about the 100-day moving average on a trade-weighted basis.  

 

The RBA will have two such opportunities next week: The central bank meeting (Aug 5) and the monetary policy statement (Aug 7).  That said, it is an important week for Australian economic data.  The calendar includes retail sales, trade and employment.  Initial resistance is seen near $0.9350.   The bottom of the four-month trading range is $0.9200, which is just above the 200-day moving average (~$0.9185).  

 

There is no compelling technical sign that the US dollar has topped out against the Canadian dollar, though by trading through the upper Bollinger Band, it appears stretched.   The greenback approach the June highs near CAD1.0960.  A break of its signals CAD1.1030-50.    Initial support is pegged near CAD1.0870.  

 

The Mexican peso was the weakest currency last week, losing 2% against the US dollar.  The dollar though MXN12.26 briefly, which is the highest it has been since March.  Many had expected that the peso would have been more resilient given the number and depth of economic linkages.  The catalyst may have been market positioning.  

 

The dollar appears stretched against the peso as it traded roughly 3-standard deviations above the 20-day moving average (Bollinger Band is +/- 2 standard deviations).  Although this takes place more than normal distribution would imply, it is still a fairly rare event.  It is the second or third time this year.    Consolidation usually follows.  Initial dollar support is seen  near MXN13.15 and then MXN13.10. 

 

Last week we noted that after making record highs on July 23 (almost 1985), the S&P 500 gapped lower on July 24.  We identified this as an important gap.  The attempt to fill it at mid-week failed, sending the index down 2.3% in the final two days of the week.  This is the biggest two-day decline since April. It too traded beyond 3-standard deviations from its 20-day moving average.   The short-term market is over-sold, but the technical condition has deteriorated and the five-day moving average crossing below the 20-day for the first time since May.  Resistance is seen in the 1942-1950 area.  

 

 

Observations  from the speculative positioning in the futures market:

 

1.  As the currencies moved out of familiar ranges, speculative activity in the futures market picked-up.  There were two significant gross position (more than 10k contracts) adjustments in the Commitment of Traders report ending July 29.  The first is that the gross short euro position rose 17.7k contracts to 164.6k.  It grew by around 50% over the course of July to stand at a two-year high.  The second significant position adjustment was the 15k contract increase in the gross short yen position to almost 81k.  The gross short yen position had been trending lower, and before this reporting period, it had fallen to the lowest level since before Abe was elected Prime Minister of Japan.

 

2.  The speculative participants generally added to the short foreign currency futures positions in the most recent week.  There were two exceptions:  the Australian and Canadian dollars.  However, what was really happening there was that participants, both longs and shorts, moved to the sidelines.  Many observers who simply focus on the net figures will see that the net long position in both increased.  They will wrongly conclude the market got longer, but the increase in the net long position was a function of shorts being covered more than longs were liquidated.

 

3.  In a somewhat similar fashion, the net long sterling position fell (to 24.9k contracts from 27.5k), but the gross long position grew by 3.6k contract to 75.4k.  It is still larger than the gross long euro, yen and Swiss franc positions combined.

 

4.  The net short speculative position in the 10-year US Treasury note futures fell to 5.8k contracts from 38.2k.  This was largely a function of short covering.  The gross short position fell 26.5k contracts to a little more than 479k contracts.  The gross longs edged 5.8k higher to 473.3k contracts.

via Zero Hedge http://ift.tt/1sdP6Eq Marc To Market

A plane carrying Dr. Kent Brantly, the American doctor who contracted Ebola while treating patients in West Africa, landed at Dobbins Air Reserve Base in Marietta, Georgia, at around 11am this morning – the first ever case of Ebola on US soil. He is being escorted to Emory Hospital under police escort. His colleague Nancy Writebol will arrive later on a separate flight as the planes are equipped to deal with one quarantined patient at a time. As ABC reports, both are listed in "serious but stable condition." The CDC's director explained the infected patients pose little risk to others, adding "these are American citizens. American citizens have a right of return. I certainly hope people’s fear doesn’t trump their compassion." What is perhaps raising that fear among Americans (and frankly the world after yesterday's WHO warning of "high risks of spread to other countries") is the fact that, as Reuters reports, more than 100 health workers fighting Ebola have contracted it themselves.

Live Feed of arrival…

 

 

Here is a picture of the plane landing at @DobbinsARB. More information here: http://t.co/3bgiJroVl4 http://ift.tt/1ojyeLv

— WSB-TV (@wsbtv) August 2, 2014

 

Ambulance carrying first Ebola patient on US soil en-route to Atlanta hospital (via NBC11) http://ift.tt/1ojycDo

— PzFeed Top News (@PzFeed) August 2, 2014

News coverage looks OJ-esque as helicopter cameras follow white ambulance carrying #Ebola patient through Atlanta streets.

— T.J. Holmes (@tjholmes) August 2, 2014

 

As ABC reports, this is the first time the Emory Hospital unit will house patients who are truly infected with a dangerous disease.

Samaritan's Purse confirmed that Dr. Kent Brantly was the first American patient to be evacuated from Liberia aboard a private air ambulance. The flight landed about 11 a.m. Saturday.

 

 

Brantly and Nancy Writebol, an aid worker, will be treated at a specialized unit at Emory University in Atlanta.

 

Both Brantly and Writebol are listed in "serious but stable condition," according to Samaritan's Purse, the aid group Brantly for which worked. Writebol is expected to arrive in the U.S. early next week.

 

Brantly and Writebol worked at a hospital in Liberia. He's the first patient infected with Ebola to be on U.S. soil.

The NY Times explains the treatment…

“The reason we are bringing these patients back to our facility is because we feel they deserve to have the highest level of care offered for their treatment,” Dr. Bruce S. Ribner, an infectious disease specialist at Emory who will be involved in their care, said at a Friday afternoon news conference.

 

…

 

“We depend on the body’s defenses to control the virus,” he said. “We just have to keep the patient alive long enough in order for the body to control this infection.”

And precautions…

“From the time the air ambulance arrives in the metropolitan Atlanta area, up to and including being hospitalized at Emory University Hospital, we have taken every precaution that we know and that our colleagues at the C.D.C. know to ensure that there is no spread of this virus pathogen,” he said.

But fear remains…

The director of the disease centers, Dr. Thomas R. Frieden, agreed that the patients posed little risk to others. And he added: “These are American citizens. American citizens have a right of return. I certainly hope people’s fear doesn’t trump their compassion.”

And perhaps rightly so as Reuters reports up to 100 health workers have been infected while treating Ebola patients… As The American Dream's Michael Snyder notes, something is different this time…

This is the worst Ebola outbreak in recorded history, and this particular strain appears to be spreading much more easily than others have.  So far, 1,323 people have been infected in the nations of Guinea, Liberia, Nigeria, and Sierra Leone.  Of those 1,323 victims, a whopping 729 of them have died.  But a number that is even more alarming was buried in the middle of a Reuters report on Friday.  According to Reuters, “more than 100 health workers” that have been fighting Ebola in Africa have contracted the virus themselves.  Considering the extraordinary measures that these health workers take to keep from getting the disease, that is quite chilling.  We are not just talking about one or two “accidents”.  We are talking about more than 100 of them getting sick.  If Ebola is spreading this easily among medical professionals in biohazard body suits that keep any air from touching the skin, what chance are the rest of us going to have if this virus gets out into the general population?

In case you are tempted to think that this could not be possible and that I am just exaggerating, here is the relevant part of the Reuters article that I was talking about…

More than 100 health workers have been infected by the viral disease, which has no known cure, including two American medics working for charity Samaritan’s Purse. More than half of those have died, among them Sierra Leone’s leading doctor in the fight against Ebola, Sheik Umar Khan, a national hero.

This has the potential to be the greatest health crisis of our lifetimes.

But don’t just take my word for it.  The following is what the head of the World Health Organization, Dr. Margaret Chan, just told the press about the disease…

“If the situation continues to deteriorate, the consequences can be catastrophic in terms of lost lives but also severe socio-economic disruption and a high risk of spread to other countries.”

That certainly doesn’t sound good.

Remember, there is no vaccine for Ebola and there is no cure.

Most of the people that get it end up dying.

And right now even our most extreme containment procedures are failing to keep health workers from contracting the disease.

I put the following quote in an article the other day, but I think that it is worth repeating.  The health professionals that are on the front lines of the Ebola fight in Africa are going to extraordinary lengths to keep from getting the virus…

To minimise the risk of infection they have to wear thick rubber boots that come up to their knees, an impermeable body suit, gloves, a face mask, a hood and goggles to ensure no air at all can touch their skin.

 

Dr Spencer, 27, and her colleagues lose up to five litres of sweat during a shift treating victims and have to spend two hours rehydrating afterwards.

 

They are only allowed to work for between four and six weeks in the field because the conditions are so gruelling.

 

At their camp they go through multiple decontaminations which includes spraying chlorine on their shoes.

But those precautions are not working.

More than 100 of them have already gotten sick.

So why is this happening?

Nobody seems to know.

Like I said, something is different this time.

A top Liberian health official has already stated that this outbreak is “above the control of the national government” and that it could easily develop into a “global pandemic”.

It is absolutely imperative that this disease be contained until experts can figure out why it seems to be spreading so much more easily than before.

But instead, health officials are beginning to ship Ebola patients all over the planet.

In fact, two American health workers that have contracted Ebola are being shipped to a hospital in Atlanta…

Two American medical missionaries diagnosed with the deadly Ebola virus in Liberia could be back in the USA next week for treatment at a special medical isolation unit at Atlanta’s Emory University Hospital, the U.S. State Department said Friday.

The State Department did not name the two individuals, saying only that the Centers for Disease Control and Prevention was facilitating their transfer on a non-commercial flight and would “maintain strict isolation upon arrival in the United States.”

 

One is to arrive Monday in a small jet outfitted with a special, portable tent designed for transporting patients with highly infectious diseases. The second is to arrive a few days later, said doctors at Atlanta’s Emory University Hospital, where they will be treated.

Could this potentially spread the virus to our shores?

I am sure that they are taking as many precautions as they can.

However, even if those patients do not spread the disease to this country, the reality of the matter is that it will always be just a plane ride away.  All it takes is for one person carrying the virus to get on one plane.

And if Ebola does start spreading in the United States, it could change life in this nation almost overnight.

We could very easily see forced quarantines and draconian restrictions on travel.  For much more on this, please see my previous article entitled “This Is What Could Happen If Ebola Comes To The United States“.

*  *  *

Finally, since every crisis and tragedy has an opportunistic silver lining, and "can't be put to waste," those who prefer to see the Ebola epidemic as opening avenues of profitability are encouraged to read the following article on a Canadian company which just may be the next CYNK, especially if the Ebola crisis does indeed spread away from "only" Africa.

via Zero Hedge http://ift.tt/1AL4Y66 Tyler Durden

Submitted by Eric Margolis via David Stockman's Contra Corner blog,

The 100th anniversary of the beginning of World War I is upon us. Well we should mourn this cataclysmic event and continue to draw lessons from it.

As a former soldier and military historian, I’ve always felt that WWI was the most tragic conflict in modern history:  a totally avoidable madness that wrecked Europe’s glittering civilization and led directly to World War II, Hitler and Stalin.

This mournful anniversary has reopened fierce debate over who was responsible for the Great War.

On one side of the debate is historian Margaret MacMillan, whose new book “The War That Ended Peace,” lays primary blame on Germany’s military and commercial ambitions. MacMillan is a nice lady – I’ve debated her on TV – but her tedious new book is so steeped in traditional  British/Anglo-Saxon bias against Germany as to be of limited  value.

On the other is “The Sleepwalkers – How Europe Went to War in 1914” by Cambridge professor Christopher Clark. This brilliant book is the finest, most instructive, best balanced book ever written on the origins of the Great War.

I say this as holder of a degree in the diplomatic history of World War I, and as one who has walked most of the battlefields of the Western Front.

Prof. Clark deftly and elegantly weaves a tapestry of events that conclusively shows that Germany’s role in the conflict was no greater than the other belligerents, and perhaps less than commonly believed.  Starved into submission by Britain’s naval blockade, Germany was unfairly and foolishly saddled with total war guilt, and saw 10% of its territory and 7 million of its people torn away at Versailles by the war’s rapacious victors.

Adolf Hitler rose to power on his vow to return Germany’s lost lands and peoples who had been given to Poland, Czechoslovakia and Yugoslavia.  Stalin was determined to regain Russian territory lost at the 1918 Treaty of Brest-Litovsk.

Most of today’s Mideast’s problems flowed directly from the diplomatic lynching of Germany at Versailles led by France and Britain. Both of these imperial powers feared Germany’s  growing commercial and military power (just as the US today fears China’s rise).   Germany’s vibrant social democracy with its worker’s rights and concern for the poor  posed a threat to the capitalists of Britain and France.  Britain’s imperialists were deeply worried by the creation of a feeble little German Empire based in Africa.   At the time they controlled a quarter of the globe and all of its oceans.

Clark’s book  shows precisely how Serbia’s militarist-nationalist-religious cabal, known as the Black Hand, carefully planned and provoked the war by assassinating Austria-Hungary’s heir to the throne, Archduke Franz Ferdinand and his wife at Sarajevo, Bosnia, on 28 June, 1914.

The Serb ultra-nationalists objective was to annex Bosnia, Macedonia, Albanian Kosovo, and northern Albania to create a Greater Serbia. The Serb’s sought to provoke war between Russia and the decrepit Austro-Hungarian Empire in order to drive Vienna’s influence from the Balkans and allow the creation of Greater Serbia. The first two Balkan Wars, 1912 and 1913, expanded Serbia but failed to give it control of the entire Balkans and the strategic Albanian ports of Durres and Vlore on the Adriatic. Serbia remained landlocked.

In the late 1980’s, the Serb extremists, led by Slobodan Milosevic, who attempted ethnic cleansing of the Muslims of  Bosnia and Kosovo, were carbon copies of the Black Hand with the very same racist-nationalist geopolitical goals.

Austria-Hungary’s aggressive military chief, General Franz Conrad von Hotzendorf, rushed his ill-prepared army into war to punish Serbia. Russia mobilized to support old ally Serbia.

Germany, deeply fearing a two-front war made possible by the 1894 Franco-Russian Entente, had to mobilize before Russia’s armies could overrun East Prussia.  France, Russia’s ally, mobilized, burning for revenge for its humiliating defeat in the 1870 Franco-Prussian War and loss of Alsace and Lorraine.

A total conflagration could still have been averted if Great Britain, which had been playing neutral, had boldly demanded the rush to war cease. France would have been unlikely to go to war without Britain’s supporting its left flank in Flanders.

But Prof. Clark deftly portrays how a coterie of anti-German officials in Britain, led by the duplicitous  foreign secretary Sir Edward Grey and the ambitious, war-yearning imperialist, Winston Churchill, pushed the British Empire to war against Germany. They were joined by a cabal of German-haters in the French government.  British and French industrialists, fearful of German competition, and seeing huge profits to be made, backed the war party.

The British and French anti-German cliques played the same role as the pro-war American neoconservatives in the Bush administration, planting phony stories in the press and promoting pro-war allies into positions of power.

Clark also shows how almost 40 years of petty European rivalries, intrigues and power games – all contained while separate – finally ran disastrously together in 1914.

We see the same dangers today in the petty but growing conflict over Ukraine between the US and its European satraps and Russia.  Every week seems to bring the US and Russia closer to a collision as the Washington seeks to dominate Ukraine and use it as a weapon against Russia. Once again, neocons in Washington, allied to Ukraine’s hard right and neocons, are promoting the growing Russo-American conflict.

A conflict over a quasi-nation of absolutely no strategic interest to the United States. American neocons and their Congressional mouthpieces are now calling for NATO to take control of Moldova and Georgia. Conrad von Hotzendorf would have approved.

No one in the west is ready to die for Luhansk or Donetsk, but few in 1914 Europe were ready to die for Verdun or Ypres – but millions did.

via Zero Hedge http://ift.tt/1nX9UQ2 Tyler Durden

Last night, minutes before the most ineffectual Congress in US history took off for a well-deserved 5 week vacation, the republican-controlled House escalated the immigration duel with Obama, and passed border legislation late Friday which as Politico reported was “full of political red meat for their conservative base, including revisions to a 2008 anti-trafficking law and more money for the National Guard.” And just to make sure that immigration is a key divisive topic during the midterm elections, one which further splits the nation along predominantly ethnic lines, they also passed a bill to rein in Obama’s program to shield undocumented immigrants from deportations. 

The spending bill passed 223-189 late Friday, with only four Republicans voting “no” and one Democrat voting “yes.” The measure ending Obama’s deportation relief program passed 216-192, with 11 Republican “no” votes and four Democrats crossing party lines to vote in favor.  “It’s dealing with the issue that the American people care about more than any other, and that is stopping the invasion of illegal foreign nationals into our country,” said Rep. Michele Bachmann, R-Minn. “And we got to yes.”

The passed law would sending migrant youths, mostly those on the US-Mexico border, back home without hearings, winning over conservatives with a companion bill that could lead to deporting more than half a million immigrants whom the Obama administration granted temporary work permits.

This took place a day after GOP leaders pulled the border bill from the floor in a chaotic retreat, a topic which was mocked by Obama just hours earlier during his “we tortured some folks” speech, with tea party lawmakers enthusiastically on board with the new $694 million version and a companion measure that would shut off a program created by Obama granting work permits to immigrants brought here illegally as kids. The second bill also seemed designed to prevent the more than 700,000 people who’ve already gotten work permits under the program from renewing them, ultimately making them subject to deportation.

Why the last minute surge in activity by a Congress which has done virtually nothing in the past 6 years and punted everything to the Fed’s central-planning regime (recall “Get to work, Mr. Chairman”)? Because this is merely a retaliation to Obama’s announcement earlier in the week that he intends to unilaterally pass his own immigration proposal to deport fewer illegal immigrants.

For what it’s worth, Democrats were furious, and warned Republicans that they’d be alienating Latino voters for years to come. “This, in all honesty and candor, is one of the most mean-spirited and anti-immigrant pieces of legislation I’ve seen in all my years in the Congress,” said longtime Rep. John Conyers, D-Mich.

Not surprisingly, as AP reports, Obama quickly condemned the Republican action and said he’d act unilaterally, as best he could. “They’re not even trying to solve the problem,” the president said. “I’m going to have to act alone, because we do not have enough resources…. It won’t pass the Senate and if it did, I would veto it. They know that.”

Obama called it a “partisan message bill on party lines that won’t solve problems… It’s just so they can check a box before leaving town.”

Which is ironic, considering days earlier the House gave the GOP permission to begin a lawsuit (note: not impeachment) against Obama for being too despotic and making too many choices on his own.

Obama said he would reallocate resources where he could, while making clear his options were limited without congressional action. The administration already has taken steps including re-ordering immigration court dockets and boosting enforcement measures.

In other words, the latest theatrics by the House have zero chance of becoming law. Which is probably why the House actually passed them.

The moves in the House came on what was to have been the first day of lawmakers’ five-week summer recess, delayed by GOP leaders after their vote plans unexpectedly collapsed on Thursday. Senators had already left Washington after killing their own legislation on the border crisis, so there was no prospect of reaching a final deal. But three months before midterm elections, House Republicans were determined to show that they, at least, could take action to address the crisis involving tens of thousands of unaccompanied minors fleeing violence and poverty in Central America to cross illegally into South Texas.

 

“It would be irresponsible and unstatesmanlike to head home for the month without passing a bill to address this serious, present crisis on the border,” said Rep. Hal Rogers, R-Ky., chairman of the Appropriations Committee.

The law may be worthless, but it revealed just how much horse trading continues to take place within the splintered republican party:

To reach a deal, GOP leaders had to satisfy the demands of a group of a dozen or more conservative lawmakers who were meeting behind the scenes with Sens. Ted Cruz, R-Texas, and Jeff Sessions, R-Ala., and taking their cues from outside groups such as the Heritage Foundation that opposed earlier versions of the legislation.

 

These lawmakers objected to sending any more money to Obama without a strong stance against his two-year-old deportation relief program, which Republicans blame for causing the current border crisis by creating the perception that once here, young migrants would be allowed to stay — a point the administration disputes.

 

House GOP leaders agreed earlier in the week to hold a separate vote to prevent Obama from expanding the deportation relief program, as he’s signaled he plans to do, but that didn’t satisfy conservatives who held out for stronger steps.

 

Thursday night, those lawmakers huddled in the basement of the Capitol with new House Majority Whip Steve Scalise, R-La., until coming up with a deal ending funding for the deportation relief program as well as making changes to the border bill aimed at ensuring the faster removal of the Central American migrant youths.

 

Friday morning, as the full Republican caucus met in the Capitol, conservative lawmakers were declaring victory.

 

“I’m very satisfied,” said Rep. Steve King, R-Iowa, the leading immigration hardliner in the House.

Among the other provisions of the bill, it will add $35 million more for the National Guard, which would go to reimburse states for guard deployments. Like earlier versions, it would increase spending for overwhelmed border agencies, add more immigration judges and detention spaces, and alter a 2008 anti-trafficking law to permit Central American kids to be sent back home without deportation hearings. That process is currently permitted only for unaccompanied minors arriving from Mexico and Canada.

Finally, it bears repeating that since this bill will never become law, at least not with this Senate, it was all one big waste of time. Just like US politics in general.

via Zero Hedge http://ift.tt/1uThyjj Tyler Durden

Last night, minutes before the most ineffectual Congress in US history took off for a well-deserved 5 week vacation, the republican-controlled House escalated the immigration duel with Obama, and passed border legislation late Friday which as Politico reported was “full of political red meat for their conservative base, including revisions to a 2008 anti-trafficking law and more money for the National Guard.” And just to make sure that immigration is a key divisive topic during the midterm elections, one which further splits the nation along predominantly ethnic lines, they also passed a bill to rein in Obama’s program to shield undocumented immigrants from deportations. 

The spending bill passed 223-189 late Friday, with only four Republicans voting “no” and one Democrat voting “yes.” The measure ending Obama’s deportation relief program passed 216-192, with 11 Republican “no” votes and four Democrats crossing party lines to vote in favor.  “It’s dealing with the issue that the American people care about more than any other, and that is stopping the invasion of illegal foreign nationals into our country,” said Rep. Michele Bachmann, R-Minn. “And we got to yes.”

The passed law would sending migrant youths, mostly those on the US-Mexico border, back home without hearings, winning over conservatives with a companion bill that could lead to deporting more than half a million immigrants whom the Obama administration granted temporary work permits.

This took place a day after GOP leaders pulled the border bill from the floor in a chaotic retreat, a topic which was mocked by Obama just hours earlier during his “we tortured some folks” speech, with tea party lawmakers enthusiastically on board with the new $694 million version and a companion measure that would shut off a program created by Obama granting work permits to immigrants brought here illegally as kids. The second bill also seemed designed to prevent the more than 700,000 people who’ve already gotten work permits under the program from renewing them, ultimately making them subject to deportation.

Why the last minute surge in activity by a Congress which has done virtually nothing in the past 6 years and punted everything to the Fed’s central-planning regime (recall “Get to work, Mr. Chairman”)? Because this is merely a retaliation to Obama’s announcement earlier in the week that he intends to unilaterally pass his own immigration proposal to deport fewer illegal immigrants.

For what it’s worth, Democrats were furious, and warned Republicans that they’d be alienating Latino voters for years to come. “This, in all honesty and candor, is one of the most mean-spirited and anti-immigrant pieces of legislation I’ve seen in all my years in the Congress,” said longtime Rep. John Conyers, D-Mich.

Not surprisingly, as AP reports, Obama quickly condemned the Republican action and said he’d act unilaterally, as best he could. “They’re not even trying to solve the problem,” the president said. “I’m going to have to act alone, because we do not have enough resources…. It won’t pass the Senate and if it did, I would veto it. They know that.”

Obama called it a “partisan message bill on party lines that won’t solve problems… It’s just so they can check a box before leaving town.”

Which is ironic, considering days earlier the House gave the GOP permission to begin a lawsuit (note: not impeachment) against Obama for being too despotic and making too many choices on his own.

Obama said he would reallocate resources where he could, while making clear his options were limited without congressional action. The administration already has taken steps including re-ordering immigration court dockets and boosting enforcement measures.

In other words, the latest theatrics by the House have zero chance of becoming law. Which is probably why the House actually passed them.

The moves in the House came on what was to have been the first day of lawmakers’ five-week summer recess, delayed by GOP leaders after their vote plans unexpectedly collapsed on Thursday. Senators had already left Washington after killing their own legislation on the border crisis, so there was no prospect of reaching a final deal. But three months before midterm elections, House Republicans were determined to show that they, at least, could take action to address the crisis involving tens of thousands of unaccompanied minors fleeing violence and poverty in Central America to cross illegally into South Texas.

 

“It would be irresponsible and unstatesmanlike to head home for the month without passing a bill to address this serious, present crisis on the border,” said Rep. Hal Rogers, R-Ky., chairman of the Appropriations Committee.

The law may be worthless, but it revealed just how much horse trading continues to take place within the splintered republican party:

To reach a deal, GOP leaders had to satisfy the demands of a group of a dozen or more conservative lawmakers who were meeting behind the scenes with Sens. Ted Cruz, R-Texas, and Jeff Sessions, R-Ala., and taking their cues from outside groups such as the Heritage Foundation that opposed earlier versions of the legislation.

 

These lawmakers objected to sending any more money to Obama without a strong stance against his two-year-old deportation relief program, which Republicans blame for causing the current border crisis by creating the perception that once here, young migrants would be allowed to stay — a point the administration disputes.

 

House GOP leaders agreed earlier in the week to hold a separate vote to prevent Obama from expanding the deportation relief program, as he’s signaled he plans to do, but that didn’t satisfy conservatives who held out for stronger steps.

 

Thursday night, those lawmakers huddled in the basement of the Capitol with new House Majority Whip Steve Scalise, R-La., until coming up with a deal ending funding for the deportation relief program as well as making changes to the border bill aimed at ensuring the faster removal of the Central American migrant youths.

 

Friday morning, as the full Republican caucus met in the Capitol, conservative lawmakers were declaring victory.

 

“I’m very satisfied,” said Rep. Steve King, R-Iowa, the leading immigration hardliner in the House.

Among the other provisions of the bill, it will add $35 million more for the National Guard, which would go to reimburse states for guard deployments. Like earlier versions, it would increase spending for overwhelmed border agencies, add more immigration judges and detention spaces, and alter a 2008 anti-trafficking law to permit Central American kids to be sent back home without deportation hearings. That process is currently permitted only for unaccompanied minors arriving from Mexico and Canada.

Finally, it bears repeating that since this bill will never become law, at least not with this Senate, it was all one big waste of time. Just like US politics in general.

via Zero Hedge http://ift.tt/1uThyjj Tyler Durden