February 2017 – Page 213

Firestorm Coming: Draft Of Trump Executive Order May Deny Services To Gay, Transgender People

In what may be the biggest firestorm set off by a Trump executive order to date, surpassing even the widespread angry response to the Trump immigration order, a draft of an executive order circulating in the Trump administration would dramatically expand the legal protections for individuals, organizations and employers on the grounds of their religious beliefs, and as the WSJ reports, would potentially allow the denial of services to gay and transgender people, and contraception coverage for employees.

The draft is titled “Establishing a Government-Wide Initiative to Respect Religious Freedom.” While it hasn’t been signed and may never make it to President Donald Trump’s desk, advocacy groups see the draft order as a broad statement of intent from a president who courted conservative Christian voters during the campaign by promising to expand the role of religion in public life. As the WSJ adds, the draft order lays out many of the proposals that conservative Christians have been requesting for years, including legal protections for organizations that claim religious objections to providing a wide range of services. It also directs federal agencies to “avoid potential violations of Religious Freedom”, instructing officials not to “coerce” religious entities or individuals into “participating in activities that violate their conscience.”

If this order or a similar one were signed, it would immediately plunge Mr. Trump into a debate over religious freedom, gay rights and reproductive rights, which has churned through states and courts for years—most recently with the disputes over transgender people’s use of bathrooms. Some religious groups have argued that they should not have to violate their beliefs in business, education or as civil servants. Corporations and sports leagues have largely sided with civil-rights groups and threatened to cancel events over legislation viewed as discriminatory.

Gay and transgender rights groups have already pounced on the draft order, calling it a “license to discriminate” that would effectively gut many existing protections for LGBT people by allowing those who claimed religious objections to ignore them. “If the White House did even a fraction of the things that are in this draft executive order, that would be an unprecedented rollback of LGBT equality and rights,” said David Stacy, director of government affairs for the Human Rights Campaign. “This would provide a blanket exemption for religious organizations not to have to follow any statute that they say violates their religious beliefs.”

Perhaps hinting at the order, while speaking at the National Prayer Breakfast on Thursday morning, Trump reiterated his commitment to expanding the role of faith in the public square, vowing to repeal a law known as the Johnson Amendment that bars churches from engaging in political activity. Those deemed in violation risk losing their tax-exempt status. “I will get rid of and totally destroy the Johnson Amendment and allow our representatives of faith to speak freely and without fear of retribution,” Mr. Trump said.

The WSJ adds that it wasn’t immediately clear on Thursday exactly what the effects of the order would be if it were enacted as written. But all sides agreed its implications would be far-reaching, affecting the health-care industry, employment regulation and policy about who could receive government grants and contracts.

Many of these subjects are currently being litigated, like whether Catholic hospitals are required to provide hormone therapy or hysterectomies to transgender people. Conservative groups argued that the order simply makes explicit protections for religious expression that are already enshrined in law and in the constitution, following an administration that they considered hostile to religion. “Many Americans voted for Donald Trump based on concerns about what the other candidate might do with regard to religious liberty,” said Greg Baylor, a lawyer with the Alliance Defending Freedom, a conservative legal organization. The draft order, he said, “reflects a very different attitude by the new administration toward respecting the conscience of religious organizations.”

As the WSJ points out, “the draft order reveals a political tension for Mr. Trump, who has tried to position himself as both a champion of religious freedom and a friend to gays and lesbians—two political constituencies who have frequently squared off in court in recent years.”

On Tuesday, the Trump administration announced that a 2014 Obama administration executive order, which established new workplace protections for gay, lesbian, bisexual and transgender people, would remain in place—prompting complaints from some Catholic and Protestant leaders. But Mr. Trump hardly won any plaudits from LGBT groups, which continued to castigate him through the week, assailing his executive orders on immigration and expressing doubts about his commitment to their causes. They said the draft order on Thursday better reflected the president’s priorities.

“Freedom of religion doesn’t mean private businesses and government officials providing public services have the right to turn people away because of who they are,” said Harper Jean Tobin, director of policy for the National Center for Transgender Equality. “That would really be out of step with some core values.”

Conservatives, naturally, saw things in a different light: “This is conceptually in keeping with what I anticipate from this administration,” Tony Perkins, founder of the Family Research Council, a conservative advocacy group, said of the draft order. “We’ve seen policies in the last eight years that have sought to marginalize and intimidate people of orthodox Christian faith. This simply says the government can’t bully you. The IRS can’t be used to silence you.”

In short: Trump continues to do what he vowed to do during his campaign and it is infuriating his opponents, although should this order pass, it would have the most profound social response yet from liberals around the nation. For now, the executive order remains in the trial balloon stage, but should enough grassroots support for it emerge, it is possible that Trump will ultimately sign it, in the process undoing a big part of Obama’s progressive agenda over the past 8 years, unleashing a social firestorm of angry protests.

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Read Neil Gorsuch’s Epic Dissent in a Case Where a 13-Year-Old Was Arrested for Burping in School

Gorsuch Neil Gorsuch, President Trump’s pick to replace the late Associate Justice Antonin Scalia on the Supreme Court, once dissented in a ridiculous 10th Circuit Court of Appeals case that involved the arrest of a 13-year-old for burping in school.

The majority upheld the school’s decision to call the cops and have the teenager arrested for making fake burping noises while in gym class. Gorsuch, however, was not persuaded that the law permitted the state to intervene in such a trivial disciplinary matter.

The case was A.M. v. Holmes. According to The Washington Post‘s summary of the case, a seventh grader “generated several fake burps, which made the other students laugh and hampered class proceedings.” The gym teacher called the school resource officer, who then arrested the teen. The teen’s mother sued the officer and school officials on grounds that her son had been unlawfully arrested. The court sided with the school, but Gorsuch dissented:

If a seventh grader starts trading fake burps for laughs in gym class, what’s a teacher to do? Order extra laps? Detention? A trip to the principal’s office? Maybe. But then again, maybe that’s too old school. Maybe today you call a police officer. And maybe today the officer decides that, instead of just escorting the now compliant thirteen year old to the principal’s office, an arrest would be a better idea. So out come the handcuffs and off goes the child to juvenile detention. My colleagues suggest the law permits exactly this option and they offer ninety-four pages explaining why they think that’s so. Respectfully, I remain unpersuaded…

Often enough the law can be “a ass — a idiot,” Charles Dickens, Oliver Twist 520 (Dodd, Mead & Co. 1941) (1838) — and there is little we judges can do about it, for it is (or should be) emphatically our job to apply, not rewrite, the law enacted by the people’s representatives. Indeed, a judge who likes every result he reaches is very likely a bad judge, reaching for results he prefers rather than those the law compels. So it is I admire my colleagues today, for no doubt they reach a result they dislike but believe the law demands — and in that I see the best of our profession and much to admire. It’s only that, in this particular case, I don’t believe the law happens to be quite as much of a ass [sic] as they do. I respectfully dissent.

Over-criminalization of inappropriate kid behavior in K-12 schools is actually a huge national problem, as Tyler Kotesky and I pointed out in our recent feature for the print edition of Reason magazine, “Why Are Cops Putting Kids in Cuffs?” Over the past several decades schools have increasingly hired school resource officers to enforce discipline, which has resulted in more and more misbehaving teens being sent to jail instead of the principal’s office. This is a problem, because kids are much less likely to finish school, go to college, and become productive members of society after exposure to the criminal justice system.

It’s a problem mostly in need of legislative solutions, so Gorsuch’s inclusion on the Supreme Court probably won’t make much of a difference. But it’s encouraging to know that if a school zero tolerance case came before the Court, Gorsuch would be more likely to defend teenagers’ rights and push back against creeping criminalization of normal kid behavior.

For more on Gorsuch, watch Reason TV’s interview with Georgetown University Law Professor Randy Barnett.

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3 Things: Fed Fubar, Feb Flop, & A Fifty-Percent Drop

Submitted by Lance Roberts via RealInvestmentAdvice.com,

February Bumps

With January now behind us, and as the luster of the election begins to fade, the question becomes what will the month of February bring. While it is impossible to predict outcomes with absolute certainly, we can look at historical precedents to discern the risk that we undertake as investors.

If we look at the month of February going back to 1960 we find that there is a slight bias to February ending positively 57% of the time.

Unfortunately, the declines in losing months have wiped out the gains in the positive months leaving the average return for February almost a draw (+.01%)

A look at daily price movements during the month, on average, reveal the 4th trading day of February through the 12th day provide the best opportunity to rebalance portfolio allocations and reduce overall portfolio risk.

Currently, bullish exuberance is once again pushing extremely high levels. As noted yesterday:

Historically, the combination of excessive exuberance, complacency and extensions have not worked out well for investors in the short-term.

Furthermore, Blake Morrow at Forex Analytix made an interesting point as well:

“We have been making higher highs and higher lows (the definition of an uptrend). However, the rate that the higher highs are happening is lower than that of the higher lows. From this, it follows that we may be developing an ascending wedge. Also, the apex is not as tight in price that I typically like for a reversal pattern.

The animal spirits of the Trump presidency cannot be denied, however, when price exceeds action, or perhaps when it lies way ahead of expectations, the risk for failure in price is quite high. In other words, has price exceeded expectations of the new US administration? Perhaps. Or perhaps the new administration’s risk of not meeting current (high) expectations of the market is also very high, which could allow for a pullback in the broad markets.”

There is sufficient evidence to warrant a continued review of portfolio positioning and reduce risk by:

Raising cash by reducing overall exposure, or

Adding positions that will hedge against a market decline, or

Some of both

Taking some action now will likely pay off in the not too distant future. If I am wrong, then you simply rebalance your portfolio, increase risk and enjoy the ride..

But if I am right, the reduction in the negative impact caused by capital destruction will be in your favor.

In either case, taking some action at your leisure now is far more advantageous than “panic-selling” when things go dramatically worse than you had planned.

The Fed Is Screwed

The Fed made a critical error yesterday by NOT raising rates.

Employment gains were up in the ADP report, sentiment and “soft survey” manufacturing data is hitting the highest levels in years, and the markets are near all-time highs.

If there was ever a time to lift rates, Wednesday was it.

While the FOMC has talked a narrative of normalizing interest rates and pointing to metrics such as the unemployment and inflation rates, the focus has remained maintaining the level of asset prices to support the wealth effect.

Whether it was the early 2016 plunge where Yellen jumped on the phone with BOE and ECB to make sure liquidity was available, the “Brexit” liquidity push or the perfectly timed “reinvestment” of bond proceeds following the Trump election, the Fed remains ever vigilant.

As I wrote previously, I think the Fed is making a major policy mistake.

“First, with the markets making new all-time highs, there is a ‘price’ cushion available for the markets to absorb a rate hike without breaking important downside support.

Secondly, with Central Banks globally flooding the markets with liquidity, a further ‘shock absorber’ is currently engaged in softening the impact of a rate hike.

Lastly, the economy is likely going to show a bit of ‘strength’ in upcoming reports, with slightly stronger inflationary pressures. This pickup in economic strength will be another inventory restocking cycle following several months of weakness. As has been in the past, it will be transient and that strength will evaporate as quickly as it came.

If I was Janet Yellen, I would hike interest rates by .50 bps immediately in a surprise announcement and use the price and Central Bank liquidity cushions to soften the blow. This would move the Fed towards its goal of reloading its primary policy tool while there is some ability to temporarily control the outcome of the rate hike.

But that is just me. She won’t do it.”

Technically, a correction due to a surprise rate hike might sting a bit but would likely remain well within the confines of a “bull market correction” as shown below. The previous two corrections, leading up to and following the last Fed hike, were between 10-11%. I have noted a correction potential from a rate hike to the bottom of the current Bollinger-band range which would be roughly 10%.

My point, as stated above, is the Fed is likely missing a significant opportunity to use the market’s current “exuberance” to achieve two goals.

Hike rates to catch up with LIBOR which is already tightening monetary policy, and;
Reduce some of the exuberance in the markets which the Fed is now concerned with.

“… during the discussion, several participants commented on a few developments, including potential overvaluation in the market for CRE, the elevated level of equity values relative to expected earnings, and the incentives for investors to reach for yield in an environment of continued low interest rates.”

They may regret not hiking rates this week.

A 50-70% Correction? Really?

As I was catching up on my reading this morning, two articles came across my email with readers frantically asking me how realistic these predictions could be.

The first was from John Hussman via Hussman Funds discussing valuation:

“On the basis of capitalization-weighted indices, historically-reliable valuation measures now approach those observed at the 2000 bubble peak. Yet even this comparison overlooks the fact that in 2000, the overvaluation featured a subset of very large-capitalization stocks that were breathtakingly overvalued, while most stocks were more reasonably valued. In many ways, the current speculative episode is worse, because it has extended to virtually all risk-assets.

To offer some idea of the precipice the market has reached, the chart below shows the median price/revenue ratio of individual S&P 500 component stocks. This median now stands just over 2.45, easily the highest level in history. The chart presents data since 1986. The longer-term norm for the S&P 500 price/revenue ratio is less than 1.0.

Even a retreat to 1.3, which we’ve observed at many points even in recent cycles, would take the stock market to nearly half of present levels.”

So, a 50% correction from current levels to reset valuations. Historically speaking that would be no worse than the last two bear markets.

But then there is Harry Dent with this:

“All four of the cycles I track point down now. One after the next has peaked in the last several years. All four point down into early 2020 or so. That’s only happened in the early to mid-’70s when we had the worst stock crashes back then, the OPEC embargo, etc — the worst set of crises since the 1930s.

The next three years are likely to be the worst we see in our lifetimes. It will be more like the early 1930s when stocks hit a debt bubble and financial asset bubbles crashed, which they only do once in a lifetime such as the early 1930s. Stocks will be down 70, 80, 90% –– that’s to be as expected in this stage of the cycle after such a bubble.

I went from being the most bullish economist in the ’80s and ’90s to now being of the most bearish because what goes up goes down. That’s what cycles do. At heart, I’m a cycle guy. Demographics just happens to be the most important cycle in this modern era since the middle class only formed recently — its only been since World War 2 that the everyday person mattered so much; because now they have $50,000-$60,000 in income and can buy homes over 30 years and borrow a lot of money. This was not the case before the Great Depression and World War 2.

And based on demographics, we predicted that the U.S. Baby Boom wouldn’t peak until 2007, and then our economy will weaken — as both did in 2008. We’ve lived off of QE every since.”

And you thought I was bearish.

How accurate are these views? I would suggest the reality lies somewhere between the two.

The problem, as always, remains the timing.

For now, bullish exuberance is in full swing. As is always the case in late-stage bull markets. However, there is very little that President Trump can do to change the tide of the structural and demographic shift that has overtaken the economy. The hopes of a return to 4% economic growth is just that – “hope.”

As John concludes:

“The problem our nation faces is a serious one. We have now paired a massive speculative bubble with an errant pin that has every prospect of creating disruption. A steep financial retreat was already baked in the cake prior to the election. My concern is that having reached this precipice, there are few policies that have the capacity to make the consequences substantially better, but many that could make the outcomes substantially worse.”

While much of the mainstream media continues to “poo-poo” active managers in favor of “passive indexing,” when the completion of the full-market cycle begins the value of having an astute advisor versus 1-800-Robo-Advisor will become readily apparent.

Just some things I am thinking about.

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Snapchat Parent Set To IPO For 8 Times What Facebook Offered 3 Years Ago

Having turned down $3 billion in 2014 from Facebook's Mark Zuckerberg, it appears Snapchat executives were spot-on as they are set to IPO on the NYSE with a valuation between $20 and $25 billion. This will likely be the biggest US tech listing since 2014.

Snap, the maker of the disappearing photo app Snapchat, filed publicly for an initial offering, the first U.S. social-media company to do so since Twitter more than three years ago.

As The Wall Street Journal reports, though Snap didn’t specify terms in the filing, the offering is expected to value the company at between $20 billion and $25 billion, people familiar with the matter have said. If the deal goes as planned, it would be the largest U.S.-listed technology IPO since Chinese e-commerce company Alibaba Group Holding Ltd. made its debut at a $168 billion valuation in 2014. Snap’s Thursday filing with the Securities and Exchange Commission gives potential investors their first detailed glimpse into the company’s finances ahead of the offering, which could come within weeks…

The company reported revenue of $404.5 million in 2016 and a loss of $514.6 million for 2016, compared with revenue of $57.7 million and a loss of $372.9 million a year earlier.

Snap said it had 158 million daily active users on average in the quarter ended in December, a 48% increase from the same quarter a year before.

If only the company had lost more money!!

Snapchat is expert at burning cash. Free cash flow was $678 million last year. THAT IS MORE THAN ITS REVENUE for the year.

Founded in 2011 by Evan Spiegel, Bobby Murphy and Reggie Brown while at Stanford University, Snap has raised a total of $2.4 billion from private investors. Its most recent funding round in May 2016 valued the company at $17.8 billion. Mr. Brown no longer works for Snap.
All that for a company that began as an ephemeral messaging app that allowed users to send photos that would disappear within 10 seconds. As the messaging service grew—with filters that allowed users to embellish their selfies with dog ears and clown faces—the app took off with millennials and especially teens, a notoriously difficult group for marketers to reach.

In 2013, Snap spurned an all-cash offer from Facebook for close to $3 billion because Mr. Spiegel was holding out in the belief that his company could get an even higher valuation. Snap was also being wooed by other investors and potential acquirers at the time.

Based in Venice, Calif.—and not in Silicon Valley—the company is positioning itself as a different kind of company—a hybrid of tech and entertainment with the 26-year-old Mr. Spiegel as its CEO.

In September, the company renamed itself Snap in a bid to show that its ambitions extend beyond Snapchat. As part of the change, it unveiled camera-equipped sunglasses, called Spectacles, that can record video in short bursts. The foray into hardware potentially gives Snap another source of revenue, but poses new challenges such as managing inventory.

So why is Spiegel taking his company public now? Recode has the answer…

One reason, people close to the company tell me, is that Spiegel thinks that running a private company isn’t ambitious enough. He thinks that running a public company is what you do if you want to be a real Titan of Industry, like Barry Diller.

And now we can see another reason: Spiegel’s investors have given him a huge incentive to public. Once Snap finishes its IPO, the company will give him another 3 percent of its shares.

So that's 750 Million reasons why now is the right time!

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Uber CEO Quits Trump’s Advisory Council As #DeleteUber Angst Grows

Following the liberal backlash of #DeleteUber after left-wing protesters claim that 'scab' Uber drivers broke the anti-Trump-immigration-policy strike at JFK last weekend, it appears Uber CEO Travis Kalanick has fallen on his social justice sword as Recode reports he is leaving President trump's advisory council.

As Recode's Kara Swisher reports, the Uber CEO had faced criticism from Silicon Valley insiders for working with the Trump administration, as well as for what some saw as a tepid response to the White House’s recent travel ban.

BREAKING: I am hearing that @Uber ceo @travisk has told employees in a memo that he has quit Trump's business advisory council. More TK.

— Kara Swisher (@karaswisher) February 2, 2017

As a reminder, we detailed the #DeleteUber debacle earlier in the week…

#DeleteUber is a social media protest against Uber. The protest surged following a New York City taxi impromptu strike at JFK airport following the Trump order banning air travel from seven nations.

Let’s dissect the stupidity and hypocrisy of the #DeleteUber movement because there is plenty of it going around.

MarketWatch explains: Consumers lash out at Uber and turn to Lyft after Uber’s immigration response.

Uber Technologies Inc. was in critics’ crosshairs while Lyft Inc. was winning support after the companies’ very different responses to President Donald Trump’s immigration order.

The backlash came as New York taxi drivers went on strike Saturday and joined a protest at New York’s John F. Kennedy International Airport against Trump’s order blocking entry to the U.S. by immigrants from select largely Muslim countries, while a tweet from Uber indicated the company had suspended surge pricing, causing some to view the company as seeking to undermine the strike.

Lyft largely stayed out of Saturday’s confrontation but sent an email to users Sunday saying that the company would be donating $1 million over the next four years to the American Civil Liberties Union.

The New York Taxi Workers Alliance, with a membership of 19,000 people, had called on all drivers, including those with Uber and Lyft, not to pick up passengers from JFK and to instead join the protest. The group said its membership is largely Muslim and made up of immigrants, and that it was “in defense of the oppressed,” as well as its own drivers, that it was speaking out against the ban.

Read more here…

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Of Course Libertarians Are Leading the Charge Against Trump’s Authoritarianism

The Guardian has pulled together five pieces from conservatives and libertarians who are critical of President Donald Trump’s authoritarian tendencies and policies. I’m happy to be represented in the mix (for my commentary about Trump’s awful, inhumane, and idiotic ban on refugees and travelers from seven countries tied to terrorism). It’s a good mix of people, including some conservative critics (The New York Time’s Ross Douthat, National Review’s David French, Commentary’s Noah Rothman) and Steve Horwitz of Bleeding Heart Libertarians along with yours truly. Here’s a snippet from my piece:

That’s certainly the case with Trump and his orders on sanctuary cities … and on immigration and refugee policy. The laws were not just poorly phrased and timed, they clearly will not work to address the basic issues they ostensibly are meant to ameliorate. As Anthony Fisher noted here earlier today, the US embassy in Iraq has said that Trump’s action is a recruitment tool for jihadists, as pro-American Middle Easterners realize they’re being hung out to dry. As for keeping America safe from terrorists entering the country as refugees, the fact is the country has an incredibly safe record.

Read the whole collection of pieces here.

Because no good deed or kind word can go unpunished, I’d like to add a bit of nuance to the way the writer, Jason Wilson, encapsulates his piece. Here’s the headline and subhed:

Burst your bubble: five conservative articles to read as Trump riles libertarians

Some libertarians are reacting with alarm to Donald Trump’s discriminatory executive orders, his authoritarian tendencies and international sabre-rattling

I think it’s accurate to call Douthat, French, and Rothman conservatives, but it’s clear that neither Horwitz or I have nothing to do with conservatism.

Yet the confusion is right there in headline: The “conservative articles” are the product of Trump “ril[ing] libertarians”? Wuh?

I just don’t get the slowness with which people are fully grokking that libertarianism is as distinct from conservativism as it is from progressivism or leftism. I’m not trying to be pedantic or coy here, but there’s a reason why libertarians (certainly those at Reason) were intensely critical of George W. Bush’s executive branch overreach and Barack Obama’s too, while conservatives and liberals generally stayed silent when their guy was doing the power grabbing. And so it makes total sense that libertarians are leading the attacks on Trump’s attempts to be a one-man (or at least one-branch) government. Libertarianism is nothing if not the antithesis of authoritarianism. Always has been, always will be. Be sure to check out Reason’s attitude toward whoever eventually replaces Trump. The minute he (or she) starts down an authoritarian road, we’ll be on the case.

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Victory for Third-Party Ballot Access in Georgia

Third parties have a reason to rejoice, at least in Georgia. The 11th U.S. Circuit Court of Appeals yesterday upheld a ruling that a portion of the Georgia ballot access law violated the U.S. Constitution. The Atlanta Journal-Constitution reports that a three-judge panel unanimously sided with U.S. District Judge Richard Story, who had previously lowered the number of signatures required for third-party candidates to get on the ballot from tens of thousands to 7,500.

Back in 2012, the Georgia Constitution Party and the Georgia Green Party sued the state, claiming that the requirement to obtain 1 percent of registered voters’ signatures was artificially high. The year they sued, the third parties would have needed at least 50,334 signatures to gain ballot access. Thanks to Story, that number was greatly reduced last year.

State officials decided to appeal his decision, arguing that parties must show a “modicum of support” or risk resulting in voter confusion and a crowded presidential ballot. But the panel of judges sided with the parties.

Laughlin McDonald, the Director-emeritus of the American Civil Liberties Union’s Voting Rights Project, praised the court’s ruling. “I think it’s a great decision,” McDonald told the AJC. “The state put up no evidence whatsoever as to voter confusion or ballot overcrowding.”

A spokesperson for Georgia Secretary of State Brian Kemp, who oversees elections, stated that he and his team are reviewing their options. According to the AJC, if the state does appeal, it will likely ask all 11 members of the 11th Circuit Court to review the decision.

Third parties have been gaining more mainstream pull lately, in part due to last year’s presidential election that saw two of the most disliked candidates of all time pitted against each other. Ballotpedia found that as of April 2016, the Libertarian Party is recognized by 33 states, while the Green Party is recognized by 21 and the Constitution Party by 15. Yet third parties still face arbitrary restrictions in many states. Ohio is just one place where third parties have continuously fought for ballot access with limited to no success.

As Reason Senior Editor Brian Doherty explained back in January, Ohio forced Gary Johnson, the Libertarian Party’s presidential candidate in 2016, to appear on the ballot as an independent rather than with his proper party title. “Johnson got 3.17 percent of the Ohio vote, which would normally, in Ohio law, qualify the party who got it for ballot access, and the ability to have a ballot primary, next time around,” he wrote. “However, according to an opinion from the Ohio Supreme Court last week, Johnson’s vote total doesn’t count for the L.P.’s future ballot access since the state wouldn’t let him on the ballot with his Party identification.”

In happier news, this week a federal judge ruled against the Federal Election Commission (FEC) in the case Level the Playing Field et al v. FEC. Judge Tanya S. Chutkan of the U.S. District Court in Washington, D.C., held that the rules that currently govern participation in the presidential election are unfair. See a deeper look at that case, also from Doherty, here.

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Trump Wants to Let Nonprofits Get Political, Senate Advances EPA Nom, About that Easing of Russian Sanctions … : P.M. Links

President Donald Trump said at the National Prayer Breakfast that he wants to get rid of the Johnson Amendment, the regulation that prohibits nonprofits—churches in particular—from getting involved in the campaigns of political candidates.
Senate Republicans again suspended committee rules in order to advance the nomination of Scott Pruitt to head the Environmental Protection Agency.
What went wrong with Trump’s first anti-terror raid, an attack in Yemen that killed civilians (including an 8-year-old American girl who was the daughter of terrorist Anwar al-Awlaki)? Almost everything.
Trump overreaction watch: The U.S. Treasury today scaled back sanctions against certain tech business transactions between American companies and Russia’s Federal Security Services. This is not some sort of payoff from Trump to Russia but a complicated correction of an unintended consequence under President Barack Obama’s administration. This nuance is, of course, obviously lost in social media.
Sen. John McCain wants Australia to know that America loves it a whole bunch and to please not be upset about Trump’s awful phone call.
Berkeley students say it was masked outside agitators who came in and disrupted what would have been a peaceful protest of a visit by Milo Yiannopoulos yesterday.

Follow us on Facebook and Twitter, and don’t forget to sign up for Reason’s daily updates for more content.

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Make The Pond Great Again

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Amazon Tumbles: Misses Revenues, AWS Disappoints, Guides Lower

Jeff Bezos magic may be running out, because one quarter after the stock plunged when the company missed earnings (with revenues in line) and guiding lower, moments ago AMZN did a twofer, and despite beating the bottom line, it posted a big miss on the top line. As a result, the reason why Amazon is tumbling some 4% after hours is because despite reporting Q4 EPS of $1.54, on expectations of $1.40, or a 55% increase in profit, is that Q4 revenue of $43.7 billion in its strongest quarter missed expectations of $44.9 billion, if 22.4% higher than a year ago.

Amazon’s operating income of $1.26 billion was just above the high end of its guidance of $1.25, and beat Wall Street estimates of $1.13 billion. Also troubling: Amazon’s “holy grail”, AWS, reported sales growth of 47%, however, it was not enough and led to $3.54 billon in high margin sales, below the $3.61bn in consensus estimates, suggesting that the cloud wrs are finally starting to impact Jeff Bezos too.

The guidance was also troubling, with the company now expecting Q1 operating income between $250 and $900 million, below the street’s expectation of $1.3 billion, on revenue of $33.3 to $35.8 billion, below the street’s consensus of $36 billion.

with the company now expecting Q4 operating income between $0 and $1.25 billion, below the street’s expectation of $1.7 billion, on revenue of $42 to $45.5 billion, roughly in line with consensus of $44.6 billion.

The full guidance:

Net sales are expected to be between $33.25 billion and $35.75 billion, or to grow between 14% and 23% compared with first quarter 2016. This guidance anticipates an unfavorable impact of approximately $730 million or 250 basis points from foreign exchange rates.
Operating income is expected to be between $250 million and $900 million, compared with $1.1 billion in first quarter 2016.

Digging into the number we find that while the all important AWS generated net sales of $3.54 billion, below the $3.61 billion expected by the street, with growth slowing again, printing at 47% in Q4, down from 58%Y/Y last quarter. In the quarter, AWS generated $1.1 bilion in profit, suggesting a 31.3% margin, below the 31.6% last quarter. AWS’ profit of $1.1 billion was far more than the rest of the entire business combined generated.

Another curious highlight is that Amazon expects to create 120,000 seasonal jobs in customer fulfillment and customer service this holiday season. We hope the BLS keeps track of this and adjusts accordingly for the surge in temp-workers.

Jeff Bezos was as usual optimistic:

“Our Prime team’s customer obsession kept them busy in 2016,” said Jeff Bezos, Amazon founder and CEO. “Prime members can now choose from over 50 million items with free two-day shipping — up 73% since 2015. Prime Video is now available in more than 200 countries and territories. Prime Now added 18 new cities, which means millions more members now get one and two hour delivery. New benefits were also added to the list, like Prime Reading, Audible Channels for Prime, Twitch Prime and more. And customers noticed — tens of millions of new paid members joined the program in just this past year.”

Amazon also announced that it will create more than 100,000 new, full-time jobs in the U.S. over the next 18 months, and will include positions across the country for all types of experience, education, and skill levels.

Despite the disappointing revenue, cash flow hit a record $9.7 billion in Q3.