January 2017 – Page 3

NPR Explains How School Choice Might Look Under Betsy DeVos

The nomination of Betsy Devos to head the Department of Education passed the relevant Senate committee on a party line 12-11 vote, after a brief delay when Democrats objected to Sen. Orrin Hatch (R-Utah) voting by proxy.

NPR has a piece today explaining “how school choice might work” under DeVos, drawing from a ranking by the school choice advocacy group Americans for Children (AFC) which DeVos chaired. The group ranked Florida’s school choice program number one in the country, although NPR noted the group only ranked states were students were explicitly allowed to choose religious schools. Later, it explains that according to Florida’s school choice scholarship organization, students benefiting from the program are overwhelmingly African-American and Hispanic, and more than 70 percent of scholarship money goes toward religious, predominantly Christian, schools. Denying students such a choice severely limits their opportunities for little discernable reason other than a distaste for religious-run institutions, many of whom serve as important providers in marginalized communities.

Religious schools, Christian and otherwise, have a long history in the United States, including being looked at with suspicion about disloyalty during the xenophobic period surrounding World War I. More importantly, such schools have track-records in the communities that they serve. Comprehensive school choice ought to give parents the opportunity to access a wide array of educational options, including public schools and private schools, magnet schools and charter schools, or even homeschooling.

The competitive pressures all the different educational providers face in an environment of increased choice improves the quality of services and the outcomes across the board. It doesn’t mean charter schools, let alone private schools, religious or otherwise, are against public schools, and, despite posturing by teachers’ unions, the reverse shouldn’t apply either.

Florida’s program was ranked number one, NPR reports, because of its “broad eligibility, reaching families with incomes of up to 200 percent of the federal poverty level; for the generosity of the tax break to donors, a dollar-for-dollar match with a cap that increases automatically each year; and for the large size of scholarships, nearly $6,000.”

The scholarship program is set up as tax credits and matching programs that permits corporations, other organizations, and individuals to choose to fund private scholarships, thus largely bypassing concerns about “public money” going for religious purposes (although the vast majority of so-called “religious schools,” once known as parochial schools, have largely secular curriculums, with components aimed at the religious life of the student that are usually sensitive to children of different faith or even none at all). The objection to religious schools, like the objection to homeschooling, is based on an inaccurate biased belief that these modes of education are somehow inferior or intellectually lacking, as well as an irrational fear of religious organizations and motivations, despite both private schools and homeschooling becoming more popular in large part due to failing local schools.

Opponents of Florida’s school choice program, notably, do not specifically claim that the schools at which students use the state scholarship’s money are somehow subpar. Instead, when the teachers union and other interest groups sued, they argued the state constitution required “uniform education.”

A spokesman for the Florida Education Association (FEA) told NPR that non-public schools Florida students can go to thanks to state scholarship funds “don’t have to follow the state curriculum, don’t have to participate in testing, don’t have to hire certified teachers. They don’t have to follow the same rules.”

In other words, students are not trapped in the cartel run by the teachers unions and its friends. Students in more states should be so lucky, and NPR is certainly right about looking to Florida as a model. As an expert they spoke to noted, there’s little “fungible” money in the federal education budget; Florida’s model offers an opportunity to make funds available for school choice despite that challenge—likely DeVos is considering it, but if not perhaps NPR gave her a good idea!

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Divergence Between Dumb And Smart Money Confidence Is Approaching Record Levels

Not to be confused with Bloomberg’s Smart Money index, one of the more popular proprietary indicators is Sentiment Trader’s Smart Money/Dumb Money confidence index. For those unfamiliar, this is how ST explains this useful market timing metric.

The Smart Money Confidence and Dumb Money Confidence indices are a unique innovation that allows subscribers to see, in one quick glance, what the ‘good’ market timers are doing with their money compared to what ‘bad’ market timers are doing.

Our Confidence indices use mostly real-money gauges – there are few opinions involved here.

The Confidence Spread subtracts the Dumb Money from the Smart Money. So when the Spread is very high (above 0.25), that means the Smart Money is looking for a rally, and the Dumb Money is looking for a decline; we should expect stocks to rise after those conditions.

When the Spread is very low (below -0.25) then the Smart Money is anticipating a decline and the Dumb Money a rally; we should expect stocks to decline after that.

While using a backtested model with these two signals provides some interesting result, the one more notable observation from the creators is that “Dumb Money being more optimistic tends to highlight moves lower in the market.” And, as one would expect, vice versa.

So where are the two confidence indicators currently? As the following chart demonstrates, the spread between the “smart” and “dumb” money confidence is about as wide as it has ever been, and perhaps just as notable, the “Smart Money” is at or near the lowest level of “confidence” in recent history despite, or perhaps due to, the S&P just several days ago hitting new all time highs.

To be sure, maybe the recent swoon lower in risk is just a temporary event, and the “Dumb Money” will have the last laugh after all.

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Ron Paul Warns: “Second Financial Bubble Going To Burst Soon… Even Trump Can’t Stop It”

By all appearances notes SHTFPlan.com's Mac Slavo, President Trump is doing his damnedest to turn around the economy, revitalize jobs and bring back prosperity. But the larger trends are already in place; the cycle is turning, and the bust cannot be put off forever.

Federal Reserve policy has literally set the country up for collapse, and though the central bank has been very creative in making the impossible work, and putting off disaster, nothing can hold back the flood forever.

Unfortunately, it looks like Trump may be blamed for a financial crisis that he didn’t cause. Analysts, including notably Brandon Smith, may be correct in pinpointing the attempt to use the new and highly controversial president as a scapegoat for the dirty work of the bankers.

The conditions are there, and the consequences were built in when the bubble was still being pumped up. Someday it will burst. When, how, and how bad remains to be seen.

Ron Paul: Economic Collapse Imminent – Trump will Get the Blame Instead of the FED

Authored by Jack Burns via The Free Thought Project blog,

If former Rep. Ron Paul (R-TX) is correct, an Economic Doomsday is here. The second financial bubble is going to soon burst, and there’s nothing anyone can do about it. That’s because, as Paul stated, the Federal Reserve has set up the American economy for financial collapse for printing trillions of dollars back in 2008 and 2009.

“The Federal Reserve’s policies of printing trillions of dollars back in ’08-09 have locked into place a serious financial crisis at some point in our future,” Paul stated. Going so far as to intimate the financial collapse will occur at least some time in the next two years Paul wrote, “It’s unavoidable, and even Donald Trump can’t stop it.”

Paul said Trump will be the patsy for the supposed impending financial ruin. Just like everyone blamed Obama for the financial collapse in 2009, this time, “Trump will unfairly get the blame,” the former Texas representative wrote. Paul bases his comments on reports he says he’s read which concludes that within the next 18-24 months, the collapse will happen.

The former congressman further explained he’s still holding out hope for Trump to make changes which can help to protect America’s future, but pointed out some of Trump’s staff has direct connections to Wall Street. He’s also concerned Trump’s war against radical Islam is a war Trump cannot win because it’s a war against an ideology, much like America’s failed attempt at defeating communism.

Paul believes Trump’s moving in the right direction to protect America’s interests by canceling America’s involvement in the Trans-Pacific Partnership (TPP) trade agreement with Asia. Paul also hopes Trump will pull American troops out of the at least 7 countries in which it is currently deployed and engaged in military conflict. “I say just come home,” Paul said when addressing having our military presence overseas. “Just get out of there and let the local people sort (the conflict) this out,” Paul said in response to how America should deal with hot spots like the Ukraine and Syria.

Paul believes the former administration’s posturing and threatening of China was misguided and stated we’d be better of trading goods with China, and all of Asia, rather than trading threats. However, as the Free Thought Project pointed out, Trump is already carrying on this dangerous posture — and China is responding.

Paul warns there’s going to be an acceleration of black ops operations by the CIA and Special Forces missions such as the joint special operations command (JSOC) which, as The Free Thought Project has reported, answers directly to the President of the United States.

Paul, who has never supported Trump is concerned about Trump’s ego, wondering if he’s going to act on his impulses to go after the ideology of radical Islam. Paul reminded his viewers that the way to create more jihadists is to keep on provoking the moderate Muslims into becoming radicalized by reacting to U.S. military actions overseas — the exact same thing Trump is doing right now.

Paul praised President Obama’s actions to normalize relations with Cuba and he hopes that with all of the policy decisions the Trump administration is making, that Trump will maintain the policy Obama implemented with Cuba and continue to keep the negotiations open with our closest Southern Caribbean neighbor.

Paul noted that he thinks U.S. policy has created a “failed system” in the country. “All empires end and we’re the empire. It’s going to end and it’s going to be for economic reasons…we’re going to fail because we’re working within a failed system…this is a monetary problem…a spending problem…it’s going to be financial,” Paul emphatically claimed, once again stating the collapse of America is imminent. “We have something arriving worse than 2008, 2009, much worse…It was the fault of the Federal Reserve,” Paul said, adding, the Keynesian economic model contributed greatly to the first bubble burst. Paul said the left will blame Trump for it like the right did to Obama, but he says it’s bigger than the office of the president, and blames the federal reserve and the previous 17 years of governmental spending.

If you think Ron Paul’s comments hold no water, think again. As the Free Thought Project reported last year, even the former chairmen of the Federal Reserve is predicting this crisis.

We are in very early days of a crisis which has got a way to go,” asserted Alan Greenspan to Bloomberg last year. “This is the worst period, I recall since I’ve been in public service. There’s nothing like it, including the crisis — remember October 19th, 1987, when the Dow went down by a record amount 23 percent? That I thought was the bottom of all potential problems. This has a corrosive effect that will not go away. I’d love to find something positive to say…..I don’t know how it’s going to resolve, but there’s going to be a crisis.”

When the man who used to run the very central bank Ron Paul says is responsible for the collapse, also says there’s going to be a collapse – it’s time to pay attention.

* * *

Full interview:

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French Presidential Election Crisis: Party Leaders Consider “Plan B” After Police Search Fillon Office

It is looking increasingly likely, that Francois Fillon who until recently was considered the favorite for the French presidential election in the April/May presidential election, may drop out leaving the frontrunner challenger spot to Marine Le Pen in limbo.

Shortly after news broke that the presidential candidate may have paid out as much as 1 million euros to his wife and children – more than initially alleged – in an ever growing graft scandal, French police searched Francois Fillon’s office in parliament as an inquiry into alleged fake work by his wife threatened his campaign and party leaders began to consider a ‘Plan B’ without him. Fillon had been favorite to win the presidency for the conservative Republicans party until a week ago, when it was reported that his wife Penelope had drawn hundreds of thousands of euros in pay from state funds without doing any work.

Fillon on Tuesday declared that he was a victim of a ‘professional’ plot aimed at derailing his bid to become France’s next president. He only failed to mention Vladimir Putin and the farce would have been complete.

“To my knowledge, in the history of the Fifth Republic, this situation has never occurred” he during a conference in Paris. “Never with less than three months to go before a presidential election has an operation of such magnitude and this professional been staged with the aim of getting rid of a candidate.”

According to Reuters citing the latest opinion poll conducted on Tuesday, 76% of voters were not convinced of his professed innocence. With the inquiry gathering pace, party officials began to wonder whether, and how, they might replace him.

“The way things are going, I think we might have to quickly trigger a plan B,” one lawmaker on condition of anonymity told Reuters.

“Plan B. Lots of people are thinking, reflecting and working on it but no one will speak openly about it,” said another influential Republicans member of parliament.

Allegations of pay for fake work, published in satirical weekly Le Canard Enchaine, have cast a doubt on the squeaky-clean image that helped Fillon win his party’s primary election over rivals who had faced legal issues in the past. In an amusing tangent, Reuters writes that “the inquiry into whether the hundreds of thousands of euros his wife received in salary was a misuse of taxpayer’s money also highlights a key plank of his campaign – that the state spends too much and half a million public sector jobs should go.” Almost as if a politician was… hypocritical.

“This will sicken people who are on the minimum wage or not much more,” the second lawmaker said. The biggest fear in the party, he said, was that Fillon would be damaged enough to lose the election, but not enough to pull out.

What Reuters failed to add is that those “sickened” by Fillon’s conduct may just end up voting for Le Pen, whose election would most likely be the final nail in the Eurozone’s coffin.

Meanwhile, even though Fillon has said he would step down as presidential candidate should he be put under formal investigation, it is unclear how The Republicans would find a replacement for him. He was chosen last November in the party’s first ever primary contest, so there is no precedent to look to if he quits with less than three months to go until the election. The scandal has coincided with the Socialist Party’s choice last weekend of a hard-left figure, Benoit Hamon, as its presidential candidate – a move also seen as helping Macron.

A group of right-leaning Socialist lawmakers wrote in Le Monde newspaper on Tuesday that they could not back Hamon, the clearest sign yet that his appointment could tear the party apart, with some tempted to join the Macron camp.

Ironically, even Marine Le Pen is currently facing her own battle with authorities over use of public funds. From midnight, the National Front (FN) leader faces a pay cut of some 7,000 euros a month as punishment from the EU parliament for using money earmarked for a parliamentary assistant to pay one of her own party officials.

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Donald Trump May Try To Stifle Freedom of Expression but His FCC Head Ajit Pai Will Defend a “Free and Open Internet”

Ajit Pai, Donald Trump’s pick to head the Federal Communications Commission (FCC), is a critic of the Net Neutrality rules the agency passed two years ago. As an FCC commissioner, Pai voted against the agency’s 2015 open internet order, whose defenders said was necessary “to protect free expression and innovation on the Internet and promote investment in the nation’s broadband networks.” After losing court battles to regulate the Internet directly, then-FCC head Tom Wheeler said the agency had the right to regulate the Internet under Title II rules originally designed to control telecommunications utilities. That the FCC could point to essentially no cases of providers throttling competitors’ data or blocking particular websites didn’t matter much. As long as the possibility existed, say Net Neutrality supporters, the FCC must be empowered to regulate data on the Internet.

Does this mean that, as a Buzzfeed article fret, “The Fate of Net Neutrality Is Still Up in the Air in the Trump-Era FCC”? If you’re concerned about the FCC regulating the Internet using decades-old Title II rules, yes, absolutely. If you’re worried about whether or the Internet will be a place of unparalleled free expression and constant innovation, absolutely not. As Pai says, “I favor a free and open internet and I oppose Title II.” That’s not a contradiction at all.

It’s upbeat phrasing aside, Net Neutrality has never been about increasing freedom of expression online. It actually represents an attempt by the government to regulate various aspects of the online world in the name of saving us from a phantom menace of cable monsters and ISPs who are supposedly blocking or throttling traffic from unwanted competitors. I have no love for cable companies, cell phone providers, or anyone else who gives me access to the ‘net. I also know that products and services continue to get better, faster, and ultimately, cheaper.

Here’s how Clemson University economist Tom Hazlett defined Net Neutrality from a libertarian perspective:

Hazlett, author of The Fallacy of Net Neutrality, argued that net neutrality is best defined as “a set of rules…regulating the business model of your local ISP.” Thinking about it that way clarifies what’s really going on.

By seeking to ban differential pricing and services among different ISPs, net neutrality backers are trying to maintain the status quo that’s worked for them so well (many of the strongest proponents for net neutrality represent bandwidth-hogging companies and services such as Netflix, YouTube, and Skype that ISPs would likely hit up for extra fees).

Of course Netflix, say, doesn’t want to have to pay Comcast or Verizon or whomever for special treatment. But if Netflix is increasing demand for bandwidth and it wants to ensure that its users’ experience is fast, reliable, and glitch-free, why shouldn’t an ISP tap them for extra money to build more capacity or help in managing it? (As a matter of fact, Comcast and Netflix have already done exactly this via an arrangement known as “peering,” that elides most strict concerns about net neutrality.)

As Hazlett argues, “The [FCC] argues that [net neutrality] rules are necessary, as the Internet was designed to bar ‘gatekeepers.’ The view is faulty, both in it engineering claims and its economic conclusions. Networks routinely manage traffic and often bundle content with data transport precisely because such coordination produces superior service. When ‘walled gardens’ emerge, including AOL in 1995, Japan’s DoCoMo iMode in 1999, or Apple’s iPhone in 2007, they often disrupt old business models, thrilling consumers, providing golden opportunities for application developers, advancing Internet growth. In some cases these gardens have dropped their walls; others remain vibrant.”

Hazlett’s insight has proven prescient. Net Neutrality supporters spend a good chunk of their time attacking customer-friendly programs such as T-Mobile’s Binge On, which allows users to stream unlimited amounts of data from certain providers, as dread threats to freedom. To confuse such offerings with censorship is idiotic, especially as other providers such as Sprint are moving toward flat rates for unlimited data packages.

More to the point, Pai told Reason in 2015 that Net Neutrality is “a solution that won’t work to a problem that doesn’t exist”:

reason: So you’re simply saying the Internet is not broken.

Pai: I don’t think it is. I think by and large, people are able to access the lawful content of their choice. While competition isn’t where we want it to be—we can always have more choices, better speeds, lower prices, etc.—nonetheless, if you look at the metrics compared to, say, Europe, which has a utility-style regulatory approach, I think we’re going pretty well.

reason: The FCC recently redefined broadband, but using standards from the last roundup of where we were in terms of the number and variety of Internet connections. One of the things that people say is, “Well, we need to regulate the Internet because local ISPs like Time Warner or Comcast have an effective local monopoly on service.” Is that accurate, and would that be enough of a reason to say, “Hey, we gotta do something”?

Pai: I certainly think there are a lot of markets where consumers want and could use more competition. That’s why since I’ve become the commissioner, I’ve focused on getting rid of some of the regulatory underbrush that stands in the way of some upstart competitors providing that alternative—streamlining local permit rules, getting more wireless infrastructure out there to give a mobile alternative, making sure we have enough spectrum in the commercial marketplace—but these kind of Title II common carrier regulations ironically will be completely counterproductive. It’s going to sweep a lot of these smaller providers away who simply don’t have the ability to comply with all these regulations, and moreover it’s going to deter investment in broadband networks, so ironically enough, this hypothetical problem that people worry about is going to become worse because of the lack of competition.

reason: But you’re also saying it doesn’t exist. So do most people in America have a choice in broadband carriers, and do they have more choice than they did five years ago, and is there reason to believe they’ll have more choice in another five years?

Pai: I think there are hiccups any given consumer might experience in any given market. Nonetheless, if you look on the aggregate, Americans are much better off than they were five years ago, ten years ago. Speeds are increasing; the amount of choice is increasing. Something like 76 percent of Americans have access to three or more facilities-based providers. Over 80 percent of Americans have access to 25 mbps speeds. In terms of the mobile part of equation, there’s no question that America has made tremendous strides. Eighty-six percent of Americans have access to 4G LTE. We have 50 percent of the world’s LTE subscribers and only 4 percent of the population.

Pai’s selection as FCC chair is interesting for any number of reasons. First and foremost, it means that a person who is both dedicated to a truly free, open, and competitive Internet and who understands markets will be running the FCC for a change. Second, it means the Internet is likely to remain a fortress of freedom during a Trump administration that may well attempt to beat down the press both from the bully pulpit and in courts. Recall that during the election season, Trump vowed to “open up” the country’s libel laws to make it easier to sue publications such as The New York Times. He also called out by name Amazon’s Jeff Bezos, who also owns the Washington Post (Bezos is also a supporter of Reason Foundation, the nonprofit that publishes this website). That Bezos is reportedly working against Trump’s executive order on immigration and refugees only makes it more likely that the president might actually try to muzzle the press. In December 2015, both Trump and Hillary Clinton in a 24-hour period argued in similar language that parts of the Internet should be shuttered to make it more difficult for jihadists to recruit:

“We’re losing a lot of people because of the internet,” Trump said. “We have to see Bill Gates and a lot of different people that really understand what’s happening. We have to talk to them about, maybe in certain areas, closing that internet up in some ways. Somebody will say, ‘Oh freedom of speech, freedom of speech.’ These are foolish people.”

In less than two weeks, Trump has shown a willingness to follow through on what he promised on the campaign trail. So he may well try to screw down freedom of the press, and of expression.

That’s disturbing in the extreme and it needs to be beaten back. The good news? Trump’s pick for the FCC is certainly the type of person who will refuse to play along with the president. If he stays true to his word, Ajit Pai will protect the Internet from censorship—by refusing to treat it as a public utility the government has a right to control.

Here’s Reason TV’s interview with Pai. Transcript here.

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Donald Trump Are We In A Bubble? (Video)

By EconMatters

In this video we discuss Donald Trump`s interesting take on Financial Markets, pre-election results, and now that he is President. Everyone knows we are in a Stock Market Bubble!

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Leaked Executive Order Reveals Trump Crackdown On Immigrant Welfare

Seemingly following the proposals of Bill Clinton (and Ron Paul), The Washington Post reports that a leaked document shows the Trump administration is planning to crackdown on current, and would-be, immigrants who are likely to require public assistance.

After Bill Clinton received a standing ovation for suggesting crackdown on immigrant welfare…

"We are a nation of immigrants.. but we are a nation of laws"

"Our nation is rightly disturbed by the large numbers of illegal aliens entering our country…

Illegal immigrants take jobs from citizens or legal immigrants, they impose burdens on our taxpayers…

That is why we are doubling the number of border guards, deporting more illegal immigrants than ever before, cracking down on illegal hiring, barring benefits to illegal aliens, and we will do more to speed the deportation of illegal immigrants arrest for crimes…

It is wrong and ultimately self-defeating for a nation of immigrants to permit the kind of abuse of our immigration laws that has occurred in the last few years.. and we must do more to stop it."

And following Ron Paul's advice this week that the solution to really addressing the problem of illegal immigration, drug smuggling, and the threat of cross-border terrorism is clear:

Remove the welfare magnet that attracts so many to cross the border illegally, stop the 25 year US war in the Middle East, and end the drug war that incentivizes smugglers to cross the border.

The various taxpayer-funded programs that benefit illegal immigrants in the United States, such as direct financial transfers, medical benefits, food assistance, and education, cost an estimated $100 billion dollars per year. That is a significant burden on citizens and legal residents. The promise of free money, free food, free education, and free medical care if you cross the border illegally is a powerful incentive for people to do so. It especially makes no sense for the United States government to provide these services to those who are not in the US legally.

The Washington Post reports that The Trump administration is considering a plan to weed out would-be immigrants who are likely to require public assistance, as well as to deport — when possible — immigrants already living in the United States who depend on taxpayer help, according to a draft executive order obtained by The Washington Post.

A second draft order under consideration calls for a substantial shake up in the system through which the United States administers immigrant and nonimmigrant visas overall, with the aim of tightly controlling who enters the country, and who can enter the workforce, and to reduce the social services burden on U.S. taxpayers.

The drafts are circulating among administration officials, and it is unclear whether President Trump has decided to move forward with them or when he might sign them if he does decide to put them in place.

While Trump’s immigration ban last week focused on national security and preventing terrorism, the new draft orders would be focused on Trump’s campaign promises to protect American workers and to create jobs, immediately restricting the flow of immigrants and temporary laborers into the U.S. workforce.

The administration has blamed immigrants who end up receiving U.S. social services for eating up federal resources, and it has said immigrant workers contribute to unemployment among Americans who were born in the United States.

“Our country’s immigration laws are designed to protect American taxpayers and promote immigrant self sufficiency. Yet households headed by aliens are much more likely than those headed by citizens to use Federal means-tested public benefits,” reads one draft order obtained by The Post, titled “Executive Order on Protecting Taxpayer Resources by Ensuring Our Immigration Laws Promote Accountability and Responsibility.” The draft order provides no evidence to support the claim that immigrant households are more likely to use welfare benefits, and there is no consensus among experts about immigration’s impact on such benefits or American jobs.

WaPo goes on to note that the administration would be seeking to “deny admission to any alien who is likely to become a public charge” and develop standards for “determining” whether an immigrant can be deported after five years if that person receives a certain amount of public assistance, including Food Stamps, Temporary Assistance for Needy Families (TANF) and Medicaid.

The second order, titled “Executive Order on Protecting American Jobs and Workers by Strengthening the Integrity of Foreign Worker Visa Programs” calls for “eliminating” the “jobs magnet” that is driving illegal immigration to the United States, according to a copy obtained by The Post.

The order would rescind any work visa provisions for foreign nationals found not to be in “the national interest” or in violation of U.S. immigration laws.

Economists are divided on the extent to which illegal immigration impacts wages, but generally find that immigration is good for the economy, including the immigration of low-skilled workers.

“The unlawful employment of aliens has had a devastating impact on the wages and jobs of American workers, especially low-skilled, teenage, and African American and Hispanic workers," the draft order says.

But the CATO Institute claims "when you compare poor immigrants to poor natives, poor immigrants are less likely to use welfare, and when they do, the dollar value of the benefits they use is lower," and The Migration Policy Institute claims that "refugee men are employed at a higher rate than their U.S.-born peers."

Bear in ind this is WaPo unsubstantiated reports and The White House would not confirm or deny the authenticity of the orders, and White House officials did not respond to requests for comment about the drafts on Monday and Tuesday.

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Senate Democrats Stall Another Vote, This Time For Attorney General

Having already succeeded in delaying the confirmation of Tom Price and Steven Mnuchin, when Democrats boycotted a committee vote which had a minimum quorum requirement, moments ago Senate Democrats succeeded in stalling – if only temporarily – another confirmation when they used a procedural move on Tuesday afternoon to stall committee vote, this time on Jeff Sessions’ nomination to become US Attorney General amid last night’s controversy in which Trump fired the acting Attorney General Sally Yates for insubordination.

The announcement came after the committee took a break to allow members to vote on the floor confirmation of Elaine Chao as Transportation Secretary. When it reconvened, Sen. Mazie Hirono told Grassley that Minority Leader Chuck Schumer intended to invoke the two-hour rule against holding committee meetings beyond the first two hours of the Senate’s day, the Hill reported. As a result the Senate Judiciary Committee will reconvene at 10:30 a.m. on Wednesday to vote on Sessions’s nomination, Chairman Chuck Grassley said.

While Sessions has already faced an uphill climb in his confirmation, it got more complicated on Monday night when Trump fired acting Attorney General Sally Yates, who deemed the president’s order illegal and said she would not have Justice attorneys defend it. Trump quickly replaced Yates with Dana Boente, the U.S. attorney for the Eastern District of Virginia. He rescinded the Yates order and said Justice will defend the executive order.

While Democrats have praised Yates as a “martyr, Republicans slammed the spectacle. Senate Majority Whip John Cornyn noted that the Office of Legal Counsel reviewed the legality of Trump’s order before it was issued. “Her job was to do her job or resign,” he said. “I believe Trump was entirely in his rights to fire her.”

In any case, absent some major surprise, tomorrow shortly before noon, the US should have its new, and permanent, Attorney General.

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Will Record Short VIX Position Backfire On Speculators?

Via Dana Lyons' Tumblr,

Speculators (a.k.a., “dumb money”?) are holding their largest net-short position in the history of the VIX futures contract.

Every week, the CFTC releases their Commitment Of Traders (COT) report on the collective positioning among major futures players. Like most market data, the majority of the time, we do not find the COT report on a particular contract to be of much use. However, we do make it a habit to note any extremes in trader positioning as the data can be quite enlightening at such junctures. For example, this morning we released our Chart Of The Day on Twitter and Stocktwits noting the record net-short position among Speculators in VIX futures. This can be helpful since these Speculators are notoriously off-sides at extremes.

As a reminder, “Speculators” (e.g., hedge funds, commodity funds, etc.) typically exhibit trend-following behavior, i.e., they build positions in the direction of prices. Thus, in a trending market, they can be on the right side for an extended period. However, where they earned their “dumb money” moniker is at key inflections and turning points. Again, that is because they’re often wrongly positioned at such times, and to an extreme.

In today’s example, we see these speculators held a collective net-short position of more than 134,000 VIX (S&P 500 1-month Volatility Index) contracts. That is a record amount going back to the inception of VIX futures in 2007. Therefore, it’s safe to say that speculators are fairly confident that stock volatility will remain low in the foreseeable future. Any time we see their confidence, and investment positioning, at an extreme, it raises our antenna.

Note that the Speculators’ previous record net-short position in VIX futures occurred in early September 2016, just days before the S&P 500 broke out of a historic trading range by dropping more than 2½% in a day – and the VIX soared by 70%. Again, these extremes can always get more extreme, and these speculators do not always receive their comeuppance in such short order. But it typically does come, eventually.

You might also note on the chart the massive expansion in interest in this contract around 2012. This was no doubt spurred by the proliferation in VIX-based exchange traded products. We must concede that the environment now may certainly be different in character and behavior than it was prior to the emerging popularity of these ETP’s. However, our anecdotal evidence is that the contrarian signals generated by extremes in VIX futures positioning have been more effective in recent years.

Speculators had better hope that’s not the case.

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More from Dana Lyons, JLFMI and My401kPro.

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Google’s Eric Schmidt: Trump Admin Will Do “Evil Things”

As we reported earlier, thousands of Google employees staged protests on Monday over Trump’s executive order on immigration with Bloomberg noting that more than two thousand Google employees participated across several offices.

What we did not report, however, is what Google executive chairman and staunch Hillary supporter – recall the leaked Podesta email which revealed Google’s strategic plan to help Democrats win the election – Eric Schmidt told an earlier audience of Google employees. Quoting BuzzFeed, the CEO of one of the world’s biggest and most influential companies said that the “Trump administration is “going to do these evil things as they’ve done in the immigration area and perhaps some others.”

For a company whose original motto was “don’t be evil“, but was changed to “do the right thing” when Google became Alphabet, one would expect Google to be an expert in such matters, and yet questions remain.

Schmidt’s opposition to Trump’s immigration policy is noteworthy, according to the website, “because Schmidt has at least twice traveled to Trump Tower to meet with the president and his advisers, but has struggled to gain a foothold in Trump’s circle.” As reported extensively here, Schmidt had close ties to the Obama administration and supported Hillary Clinton’s campaign for president, facts not lost on Trump’s advisers. More recently, Google hired the infamous Eric Braverman, the former Clinton Foundation CEO, to “oversee the non-investment side of the family office of Alphabet Inc. Executive Chairman Eric Schmidt and his wife, Wendy.”

Schmidt’s full transcript per Buzzfeed:

“I can tell you that the tone of this government is very much economic growth,” Schmidt told employees, according to the transcript provided by a source. “And so I think at the end of the day, they are going to do these evil things as they’ve done in the immigration area and perhaps some others, but the core focus is going to be to get the growth rate in the country — which is roughly one and a half to two percent — up another point by simply pushing through increases in federal spending and overcoming the tea party.”

In short, it is clear why there is bad blood between Schmidt and Trump, and it will only get worse should Trump put limits on Google’s H1-B hiring ambitions.

It also appears that any negotiations between Trump and Google are now over, and if Trump feels particularly vindictive, he could do some serious damage to Google’s infamous offshore tax avoidance structures.

In the past, Google had justified its meetings with Trump by arguing that it was better to work behind the scenes than make public statements that could alienate people the company needs to work with. “But meeting with Trump was a public statement,” one Google employee told BuzzFeed News on Monday. Referring to a “summit” meeting of tech leaders at Trump Tower, the employee continued, “Eric meeting privately with Trump after the summit was a public statement because that was reported on. So they have made public statements, just not ones — before this weekend — that resist the immigration [order].”

In this particular case, the statement may have also meant fully burning down any bridge connecting the company to the White House.

According to an earlier report by Vice about the same meeting, Schmidt told employees that he had tried to fight the immigration order. “These prejudicial actions are discriminatory and anti-globalization, and I did everything I could to cause a different outcome,” he said. “There are limits to what we can do, there’s no question if the company is asked to do something that’s counter to our values, we would oppose it and actively fight it.”

According to a previous report by the NYT, in early January just as Congress began its new session, Google threw a “swanky” party for 600 people in Washington, DC, celebrating Republican lawmakers. The NYT said that Schmidt’s “East Coast charm offensive” with Republican political leaders is part of Google’s effort to dispel the idea that it is a bastion for Democrats. It appears to have failed in this endeavor.

via http://ift.tt/2jzz3kl Tyler Durden