Month: October 2018

FBI Reportedly Done Tomorrow, Ford’s Lawyers Complain

Just minutes after reports stated that Ford’s lawyers have sent a letter to FBI Director Wray, inquiring “it has been five days and no interview yet?” The Wall Street Journal reports that GOP aides on the Hill and another person familiar with the process said they were expecting the bureau to conclude its report as soon as late Tuesday or early Wednesday.

Ford’s lawyers are dejected at The FBI’s lack of response:

But other reports already proclaimed that her testimony at the hearing was sufficient, which, as WSJ reports, means this may be over by tomorrow…

People familiar with the process said Tuesday that the FBI investigation into the allegations of sexual misconduct against Judge Kavanaugh could wrap up very soon, well ahead of the end-of week deadline.  

GOP aides on the Hill and another person familiar with the process said they were expecting the bureau to conclude its report as soon as late Tuesday or early Wednesday.

Agents had interviewed at least four key people as of Tuesday in its background investigation of Judge Kavanaugh. The White House had given the bureau until Friday to wrap up the probe.

Senators would then be shown the FBI’s findings, but it wasn’t clear if the public would get a look as well.

Senate Majority Leader Mitch McConnell (R., Ky.) said on Tuesday the report was expected “soon” and “will be made available to each senator and only senators will be allowed to look at it.”

And after that – the big debate will be whether it is made public…

Senate Judiciary Chairman Chuck Grassley (R., Iowa) said that in his 38 years on the Senate, “an FBI report, as far as I know, has never been made public” and that it could hurt the FBI in future investigations if the report was made public.

The top Democrat on the committee, Sen. Dianne Feinstein of California, said “it depends” and she thinks a report it “should be limited” to the committee. She said in her past experience that is what has been done, but she was not clear on the format the FBI would release the results of its investigation.

Or how quickly Feinstein will change her mind and get a head cold and accidentally leak selected parts of it…

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Trump’s New $1.5M Cadillac Limo, Called “The Beast,” Spotted in NYC

A tricked-out stretched version of a Cadillac XT6 sedan was added to the fleet of presidential limousines last week; it is one of a dozen that will be added to the fleet under a $15.8 million production contract, and designed to protect the commander in chief from any attack.

Dubbed “The Beast” once again, the full list of operational capabilities of the limo, is, of course, a mystery. The Secret Service did not spill the beans about the what the limo can withstand and do for obvious reasons. However, they said the new Cadillac continues its legacy of providing “state-of-the-art technology and performance to its protective mission.”

NBC News said the limo could survive most attacks. The exterior armor plating is the most advanced in the world, eight inches thick and the bulletproof windows are about five inches thick. The profile of the tires are massive, almost the size as those on a coach bus, can run for a significant distance even if they are blown out from an attack.

“Protecting a president is never easy, especially in a modern era when POTUS could face any manner of threat, from handguns to rocket-propelled grenades,” said NBC News.

Even the fuel tank is protected by a special foam that shields it in case of an improvised explosive device attack.

Some other high-tech features include a night vision system, door handles that shock unwanted guests, ability to fire tear gas or a smokescreen, and – in something straight out of an Inspector  Gadget cartoon – deploy oil slicks in a high-speed chase, NBC reports.

If President Trump was injured, there is a cornucopia of medical supplies on board, including a mini-refrigerator with his blood.

The general public got their first glimpse of The Beast as it rolled through NYC with President Trump to his United Nations speech last week.

Earlier in the week, the Secret Service tweeted a photo of the vehicle, and a second limo parked at the Wall Street heliport in lower Manhattan. The caption said: “The Secret Service is ready to roll into #UNGA 2018!”

Able to seat seven, the last line of defense are Secret Service members who ride inside, armed with light machine guns. The Beast is supported by a convoy of protective vehicles. But what may be most remarkable is that President Trump even has the ability to dispatch the nuclear codes to fire missiles at either Russia, China, and or Iran from inside the limo…

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Bezos’ Decision To Raise Wages Is Largely A Machiavellian Distraction

Authored by Mike Krieger via Liberty Blitzkrieg blog,

For the many low wage Amazon workers – both full time and temporary – set to receive a raise thanks to the just announced boost in minimum pay to $15/hour, the news is certainly a big plus. It should also be noted that had Amazon not been subject to intense scrutiny and criticism from the likes of Bernie Sanders and others, Jeff Bezos never would have responded with such an aggressive move. That said, if you think a little beyond the surface level about why he’s doing this now and what his real motives are, it becomes clear nobody should take this move at face value.

Stacy Mitchell, co-director at the Institute for Local Self-Reliance, is someone whose work on Amazon I’ve cited on various occasions. She tweeted out an important thread this morning that helps you take a step back and not miss the forest for the trees.

1. It’s nice to see Amazon workers get a raise today, and not just the regular hires, but the temps too.  What led to this?  Five things…

  • 2. First, it’s a very tight labor market and Amazon needs a bunch of people in its warehouses right now for the 4th quarter.

  • 3. Second, advocacy by @SenSanders & @RoKhanna, & groups like @jwjnational & @ilsr, compelled Amazon to act. Amazon almost never responds to critics. But Sanders and Khanna unnerved Amazon deeply, as I pointed out in an earlier thread:

  • 4. Third, Amazon is run by the world’s richest man  (net worth = $160 billion) and his recent attempt to make this unconscionable disparity seem okay with a $2B charity pledge just didn’t cut it. Bezos is the face of inequality. That’s still true after today.

  • 5. Fourth, Amazon has another way to cut labor costs: automation. It needs fewer workers today to sell & ship $100M worth of stuff than it did just a few years ago. That trend is only accelerating. Some e-commerce warehouses in China have a staff of 4 people. They fix the robots.

  • 6. Finally, and this is the big reason: Amazon fears an antitrust case to break it up. They’re right to be nervous. In the last week: @SenWarren called for it. The EU’s @vestager opened an antitrust probe. A former Amazon exec said competition depended on splitting Amazon in two.

7. To keep its grip, Amazon is going to try to buy off constituencies, one by one.

8. Workers getting a raise is a good thing. But what we need is so much bigger. No company should have this much power. Inevitably, it means that Amazon gets to set the rules, economically & politically. And those rules will always privilege Amazon’s interest over the public’s.

Bezos is naturally attempting to portray this as a come to Jesus moment, but you shouldn’t buy his spin for a second. Based on what we know of his business practices, the guy’s built the behemoth that is Amazon by operating in a Machiavellian fashion (see my recent post: Amazon is Far More Dangerous and Powerful Than You Want to Admit).

The real tell here is Bezos’ immediate emphasis on raising the national minimum wage to $15 an hour under the law. Pushing for a forced across the board wage hike everyone knows Amazon can cope with better than current or potential competition, makes his company look good while likely harming other business models in the process.

This is how Bezos rolls, he’s willing to take short-term losses to dominate a market. What sacrifice is a wage hike if he assumes everyone else will have to do it as well? He knows Amazon’s got the resources and capability to automate in a way others simply can’t. Bezos see this as a win-win if he can also get everyone to pay $15 an hour. He gets to look like a leader, while also positioning Amazon for even greater market dominance in the long-run. You really think Bezos is advocating for a national minimum wage increase because he’s suddenly a Bernie Sanders populist? Don’t be stupid.

Which brings us to the next point. While Bezos’ well documented piss poor treatment of low level employees is well documented, Amazon poses a much larger threat in other respects. It’s not just the company’s increased ties to the U.S. military and intelligence agencies, though that’s dangerous enough. The company’s largest threat resides in its desire to not just dominate the market, but to become the market itself. 

As Stacy Mitchell noted in her excellent 2017 article:

To describe Amazon as a retailer is to misunderstand what the company actually is, and to miss the depth of the threat that it poses to our liberty and the very idea of an open, competitive market.

It’s not just that Amazon does many things besides sell stuff—that it manufactures thousands of products, from dress shirts to baby wipes, produces hit movies and television shows, delivers restaurant orders, offers loans, and may soon dispense prescription drugs. Jeff Bezos is after something so much bigger than any of this. His vision is for Amazon to control the underlying infrastructure of the economy.Amazon’s website is already the dominant platform for digital commerce. Its Web Services division controls 44 percent of the world’s cloud computing capacity and is relied on by everyone from Netflix to the Central Intelligence Agency. And the company has recently built out a vast network of distribution infrastructure to handle package delivery for itself and others.

Jeff Bezos is a highly intelligent and cutthroat individual. He’s able to see multiple steps ahead of most people, and this move to raise wages is a perfect example. He figures he can look like the good guy in the near-term, while solidifying market dominance and monopoly power in the big picture. Bezos plays the long game and he plays it really well. Don’t take your eye off the ball or believe the hype for a minute.

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FBI Has No Plans To Interview Dr. Ford In Kavanaugh Probe: Reports

With Arizona Senator Jeff Flake waffling over whether he will ultimately vote to confirm Trump SCOTUS pick Brett Kavanaugh, NBC News – the news organization that Lindsey Graham has accused of colluding with Democrats to sabotage Kavanaugh’s nomination – has confirmed that the FBI will not interview Dr. Christine Blasey Ford as part of its expanded background-check probe into Kavanaugh.

Though many suspected this was the case when the bureau neglected to reach out to Ford over the weekend, the way NBC tells it, this fact could become ammunition for Democrats who are seeking a further delay of a confirmation vote.

Kav

Using phrasing which suggests that the White House is still working to constrain the Kavanaugh probe despite Trump repeatedly insisting that the opposite is true, NBC reported that the administration believes “Ford’s public testimony to the Senate Judiciary Committee was sufficient and the FBI would be wasting its time speaking to her again about allegations of sexual assault against Supreme Court nominee Brett Kavanaugh, said a source familiar with the Trump administration’s thinking.”

NBC also cited legal and law enforcement experts saying that interviewing Ford should be a crucial step in “thorough and serious” investigation. 

But legal and law enforcement experts say there is much to be learned from interviewing a witness in a private setting by professional investigators who have had the opportunity to ask other witnesses about the allegations.

Critics, including Senate Democrats, have accused the White House of hampering the FBI’s probe of the sexual assault allegation and additional sexual misconduct allegations against Kavanaugh in order to push through his confirmation.

“If the FBI is permitted to do a thorough, serious, and professional investigation – as it is certainly capable of doing – and if agents discover additional facts as a result of that investigation, those facts could help confirm or refute statements made by Dr. Ford or Judge Kavanaugh,” said Chuck Rosenberg, former FBI legal counsel and an NBC News analyst.

“Those facts would also be helpful if either is interviewed by the FBI, because additional information can help refresh memories or demonstrate inconsistencies. The more facts, the better, because more facts move you closer to the truth.”

They also pointed out that prosecutor Rachel Mitchell, who questioned Ford in front of the Senate Judiciary Committee last week, said that the five-minute increments for questioning Ford was not ideal.

In summary, expect Democrats to declare that this latest miscarriage of justice is an outrage that justifies another week-long delay of Kavanaugh’s confirmation. Or even that lawmakers should revisit the issue after the midterms.

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WTI Holds Gains After Cushing Stocks Build Most Since March

WTI held above $75 today but did not extend yesterday’s surge gains ahead of tonight’s API print. After last week’s surprise build, crude was expected to build again, and did but it was Cushing that surprised with the biggest rise in stocks since March.

“It shows that the market is not convinced about the ability of the producers’ group to replace Iranian barrels,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London.

API

  • Crude +907k (+1.5mm exp)

  • Cushing +2.018mm (+800k exp) [Genscape +600k]

  • Gasoline -1.703mm

  • Distillates -1.197mm

A second weekly build for crude and the biggest weekly rise in Cushing stocks since March…

 

WTI hovered just above $75 ahead of the API print, holding most of yesterday’s impressive gains, and thoroughly unimpressed at the crude builds from API…

“The market bounces around a lot,” Michael Lynch, president of Strategic Energy & Economic Research, said. “As of now, people are hedging on the side of fear rather than working the probabilities.”

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New Jersey Plans a Plastic-Banning Spree

New Jersey is mulling a sweeping plastics ban aimed at reducing litter and changing lives. Though billed as the toughest plastic prohibition in the country, the bill also includes a number of carve-outs and exemptions that weaken both its impact and the justification for legislative action.

“It requires New Jersey citizens to change their lifestyle,” said bill sponsor State Sen. Bob Smith (D–Middlesex) according to Northjersey.com.

Smith’s bill, SB 2776, would ban plastic bags, straws, and polystyrene foam food packaging in the state, and impose a ten-cent fee on replacement paper bags. First time violators would be hit with fines of $500, rising to $1,000 for a second offense, and $5,000 per offense from there on out.

As far as plastic bans go, Smith’s proposal is pretty onerous. Perhaps realizing that such a sweeping action will likely incur blowback, he and his colleagues have baked in a number of exceptions and waivers that lessen the impact of the ban.

Not all plastic bags will be completely banned by the bill, only the most visible type of plastic bags—the ones you’re currently given at the checkout counter. New Jersey’s bill still allows for smaller, “nonhandled” plastic bags of the kind found in the produce aisle of grocery stores, as well as larger plastic bags 10 mils or thicker.

So, in short, you can have a plastic bag, but only if it’s really small and thin, or large and thick. Anything in between is an impermissible environmental hazard. Oh, unless you’re a retail business with less than 1,000 feet of space. In that case, you can keep using the standard plastic bags.

It’s a similar story with the bill’s polystyrene ban, which would exempt business that gross less than $500,000 a year and lack access to a “reasonably affordable, commercially-available” substitute. Straws, too, are a no-no, unless you are a grocery store or other non-food service business. Restaurants could still hand out the straws, so long as the person asking for one has a disability or medical condition.

Obviously, all these provisions are included to lessen the cost, inconvenience, and irritation that will inevitably accompany the ban, should it pass. Yet, a consequence of this moderating approach is that a lot of plastic is left on the streets.

If the targeted items are really such an environmental threat that they need to be the subject of prohibition, then all these exemptions undermine the purpose of the bill. If plastic bags, straws, and foam containers are inconsequential enough to allow for wide exemptions, what’s the justification for strict bans and fees for any violation?

The logic of New Jersey’s plastics ban grows thinner, still, when one considers that the most commonly littered plastics won’t even be touched by it. According to the 2018 New Jersey Litter Survey (which looked at litter contents along roadways in the state), the most common sources of litter are tire scraps, which make up 11 percent of all litter.

The catch-all category “other paper” comes in second at 8.9 percent, with plastic shrink wrap as the third most commonly littered item at 4.9 percent. One has to get to item number 13 on the list (straws/wrappers) before anything prohibited under New Jersey’s plastics ban comes up.

Beach cleanup stats tell a similar story. New Jersey’s 2016 beach cleanup—part of the Ocean Conservancy’s international coastal clean up day—netted 4,300 plastic straws and stirrers and 2,410 plastic bags. That makes straws and bags 6 percent of all beach litter collected when measured by item. By weight (and using industry average weights of .42 grams per straw and 5.5 grams per bag) they’re even less.

Passing a bill outlawing plastic candy wrappers, or shrink wrap, would be more effective at cutting down on litter. Given how integral these plastic items are to numerous industries, that’s probably not very feasible.

In short, there’s a surface logic to New Jersey’s plastics ban that might appear compelling at first glance: plastic is a problem, these are items we can ban, but we’ll make a few exceptions so the ban isn’t felt to harshly. But once you consider the real drivers of litter, these categories start to look less like sensible compromises, and more like arbitrary selections that serve eco-politics moreso than ecological systems.

SB 2776 has passed out of the Senate Environment Committee and is currently being considered by the Senate Appropriations Committee. The full New Jersey Senate and Assembly must pass the bill for it to become law.

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D.C. Repeals a Minimum Wage Hike That Restaurant Workers Didn’t Want

When D.C. voters approved Initiative 77 in June, they thought they were giving the city’s bartenders and restaurant workers a boost in the bank account. But many of those workers didn’t want the law, which they didn’t think would work as advertised. Today the city council answered those employees’ appeals and voted 8–5 to consign Initiative 77 to the trash pile of bad policy.

Though it was served up as a progressive plan to hike wages, Initiative 77 would have actually cost many workers money. The proposal abolished the so-called “tipped minimum wage” of $3.50 cents per hour, replacing it with a $15 minimum wage for all food service workers in the city. But workers that I (and other reporters) talked to before the vote told me that they often make far more than $15 a hour, thanks to tips. Even if they don’t, D.C. law required restaurant workers to make at least $12.50 an hour, with employers mandated to top-up employees’ pay if they earn less than that much in tips.

Given the choice, many workers said they’d rather not earn $15 per hour at the cost of losing their tips. More than 8,000 of them sent comments to the city council urging them to repeal the measure. Mayor Muriel E. Bowser, a Democrat, has indicated she would sign the repeal.

Supporters of Initiative 77, such as the union-backed Restaurant Opportunity Center, have called the move to cancel the referendum’s result “flat-out voter suppression.”

Hardly. With its vote on Tuesday, the D.C. City Council did what elected officials in a representative democracy are supposed to do: act as a check. After Initiative 77 passed, one of the biggest questions was whether the Democrat-controlled city council or the Republican-controlled Congress (which has authority over policymaking in the nation’s capital) would be the first to strike it down. That should say something about the merits of the proposal, as should the fact that both management and employees were on the same side of the issue.

Julia Calomaris, a server at Bistrot Du Coin on Connecticut Avenue, told me in June how frustrating it was that so many people thought the initiative would be good for restaurant workers. The ballot initiative amounted to “giving help to people who aren’t asking for it,” said Calomaris, who has worked in the industry for 17 years.

There were also concerns about the unintended consequences of the new tipped minimum wage, which would have raised costs for restaurants and possibly forced cuts to staff. Ryan Aston, who tends bar at the Hamilton and who helped organize workers’ opposition to Initiative 77, has said he was worried about the loss of prep cooks, barbacks, and bussers.

“If the law is a bad law, it should be amended or repealed. It does not matter if the law was adopted by the council, the voters or Congress,” Mendelson tells The Washington Post. He’s right.

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Making Money Isn’t Supposed To Be Easy

Authored by Simon Black via SovereignMan.com,

I remember having a conversation with a woman during the peak of the housing bubble, probably 2005…

She was a psychologist based in Florida. And she was explaining to me how she was flipping condos that hadn’t even been built yet.

Back in the boom times, buyers would line up at condo sales offices and have to decide within minutes if they wanted to put down a deposit. The demand for these undeveloped units was so large, developers would raise prices, sometimes multiple times a day, to whip buyers into a frenzy.

The woman I was talking to would put down a deposit before the developer had broken ground. Then when the building just started construction, she’d sell the contract and make money.

She was literally cackling to me on the phone… “It’s just so easy,” she said before laughing.

This was a long time ago. And I didn’t have anywhere near the deal experience or financial know how that I have now.

Still, even then, I remember thinking that making money isn’t supposed to be that easy.

There’s supposed to be risk, hard work and effort involved with making money. And simply flipping contracts on yet-to-be-developed condos for huge profits didn’t make sense to me.

This woman was just one of the legions of people that were able to make quick profits in real estate because, at the time, there was an enormous amount of debt flowing into that sector.

Banks would issue mortgages to unqualified borrowers (often without a job or an income), the issuer would quickly sell that mortgage to a large bank, the bank would chop the mortgage into a mortgage-backed security, get the US government to stamp a guarantee and sell it to investors around the world.

Mortgage-backed securities and their many derivatives were the hottest investment in the world, with almost unlimited demand.

Eventually, of course, reality caught up with us. People realized that when you loan $1 million to an unemployed, former bus driver with a bad credit history… it’s probably not the best investment.

All of the condo flippers, and other leveraged players in the real estate space, got wiped out.

They say history doesn’t repeat itself, but it often rhymes.

And almost exactly 10 years since Lehman Brothers collapsed, we’re back where we started, with a twist…

Years of easy credit and low interest rates are blowing another bubble… But instead of lending money to unemployed, ex-bus drivers, investors are lending absurd amounts of money to companies with ZERO chance of paying those debts.

We discussed this in yesterday’s Notes about billionaire investor Howard Marks and his concerns about the economy today.

As of June, U.S. non-financial firms are sitting on a record $6.3 trillion in debt.

AT&T alone has an astounding $180 billion of debt, making it the most indebted non-government controlled and non-financial firm in history… and more indebted than many governments around the world.

And the quality of corporate debt is getting worse and worse.

More than 40% of US corporate bonds are rated BBB – just one notch above non-investment grade, or “junk” – an all-time record. The riskiest, “junk” borrowers, have a record $8 of debt for every $1 of cash on their books.

A full 14% of companies in the S&P 500 don’t even make enough money to cover the interest on their debt.

Within the corporate debt market, there’s also the fast-growing, $1 trillion “leveraged loan” market. That’s just a fancy name for loans made to companies that already carry lots of debt, making them even riskier.

And 77% of leveraged loans are what’s called “covenant lite,” meaning lenders are waiving their right to certain protections when lending to these incredibly risky companies.

You’d think with all of this bad debt floating around, investors would at least require a healthy interest rate for making these loans. Not the case… the extra yield lenders demand to make these riskier loans is near its lowest in history.

Remember, this behavior is taking place in a rising interest rate environment.

As a general principle, as the amount of debt increases, you should also see defaults increase. But today, while the level of corporate debt is exploding to record highs, defaults are plummeting toward record lows. And this widening divergence can’t continue forever.

Eventually those defaults will come, at a time when debt as a percentage of GDP has never been higher. And you’ll see a significant percentage of GDP that just disappears.

When you look back throughout economic history, almost every crisis happens because there’s too much debt… the Great Financial Crisis, the Savings & Loan crisis, the Asian crisis.

It’s the same ingredients every single time… we see lots of debt, followed by complicated financial instruments to encourage more debt. Eventually, market participants take it too far and something cracks.

Today we’ve got all the same ingredients. Can we honestly expect it to turn out any different?

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Dow Hits Record High, Small Caps Crushed, BTPs Battered, & Bullion Bid

Big Caps for the first two minutes… and then Small Caps…

 

China remains closed for Golden Week but offshore yuan was extremely active overnight, flash-crashing below key support and back…

 

And the China ETF was slammed down over 2% today…

 

Another odd day in Italian stocks – yesterday they were panic bid and slumped to unch, today panic sold and bid to unch..

 

But BTPs were blasted higher in yield to 4-year highs…

 

In the US, The Dow surged to a new record high today… but Small Caps collapsed. Powell spooked stocks very briefly at around 1245ET…rebounded, then faded… The Dow went out near HoD, Russell near LoD… (on the day, the S&P was unchanged, Dow up and the rest red)…

 

Another major divergence between big (Dow) and small (Russell 2000) stocks as the former soars relative to the latter and erases any relative performance YTD…

This is the biggest outperformance of Dow over Small Caps since Oct 2011.

Both are now up just over 8% on the year… (Trannies are worse. Nasdaq best)

This is the biggest Small Cap slump since July, and it broke below its 50- and 100-DMA…

 

Small Caps and Mid Caps have both rolled over hard, with only Big Caps holding on…

FANG Stocks are all lower today…

 

And while tech and financials were weak, the former’s relative outperformance has stalled…

 

And while all this uncertainty is swirling, the spread (risk) of US HY Corporates is at its tightest since July 2007…

 

Despite gain on the Dow, UST Bonds were also bid, with yields 1-3bps lower on the day… leaving them all lower on the week…

 

10T yields fell 3.5bps, but remain above 3.00%… (though this is the lowest yield close since 9/17 when yields were below 3.00%)

 

and the yield curve flattened…back below Fed rate hike levels…

 

The Dollar ended the day higher but sold off overnight gains into the European close before bouncing in the afternoon…

The Rand and Rupiah nudged lower on the day as Argentina’s Peso and Brazil’s Real both surged…

 

Cryptos drifted lower on the day with Ether and Ripple holding gains on the week…

 

WTI limped lower ahead of tonight’s API report, PMs and copper were higher on the day…

 

Silver briefly broke above its 50DMA and Gold broke above $1200… but notice that the moment Europe closed, the PMs were monkeyhammered lower…

 

Finally, we thought this might be interesting for some – it now costs the average worker 1164 hours work to buy The Dow (versus the average 225 hours that it costs from 1960to 1995…

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Harvard Students Filed Multiple Title IX Complaints Against Brett Kavanaugh To Get Him Fired

KavanaughOn Monday, Harvard University announced that embattled Supreme Court nominee Brett Kavanaugh would not be teaching his three-week Law School course this year. More than 800 alumni had signed a letter asking Harvard to cancel the class.

Additionally, student-activists had lobbied their classmates to file Title IX complaints against Kavanaugh. Nearly 50 students signed a petition indicating they had done so, though it’s not clear all of them actually did, according to The Harvard Crimson.

Title IX is the federal statute that mandates sex equality in education. The Obama-era Education Department had also required universities and colleges to adjudicate sexual misconduct in accordance with the federal government’s expansive view of Title IX. Education Secretary Betsy DeVos is currently revising this guidance.

One of the reasons Title IX reform has been so urgently necessary is that aggrieved students have weaponized the process in order to silence people—other students, invited speakers, faculty members—who offend them. Using Title IX to get rid of Kavanaugh, who is not accused of anything that would sustain a hostile educational environment charge, is a perfect example of this. As Harvard Law professors Jeannie Suk Gearson and Janet Halley told the Crimson, student-activists are abusing the process:

“Such an abuse of process would undermine the legitimacy and credibility of complaints that the Title IX process is intended to deal with, as well as of the Title IX office to focus on its duties,” Suk Gersen wrote in an email. “It might be effective in drawing further attention to some students’ objection to Kavanaugh’s teaching appointment, but I don’t expect him to be found to have violated Harvard University’s Sexual & Gender-Based Harassment Policy based on the currently known public allegations against him.”

Janet Halley, another Law School professor with a background in Title IX law, also called the students’ strategy of filing formal complaints unlikely to succeed.

“I urge the students to divert their energy from this implausible claim that he’s going to create a sexually hostile environment by teaching at the Law School to the really grand issue of whether he’s fit to be in his current judgeship or promoted to the Supreme Court,” Halley said.

Samanatha Harris, an attorney with the Foundation for Individual Rights in Education, agreed.

“This is such an absurd contortion of Title IX that I suspect even those filing the complaint know it’s unlikely to succeed as a matter of law, and are doing it more as a publicity stunt than anything else,” Harris wrote in an email to Reason. “While it is obviously their right to protest, they might consider whether forcing Harvard’s Title IX office to devote its time and resources to this particular claim would undermine the office’s ability to provide services to students in need.”

Jacqueline Kellogg, the student who organized the campaign to file Title IX complaints against Kavanaugh, told the Crimson that using the Title IX process in this manner gives them “power” and legitimizes their “right to our feeling of being safe.”

In an email to Reason, Kellogg defended her tactics.

“Using the Title IX process to file formal complaints against known abusers and harassers is exactly what the process is designed to do,” wrote Kellogg. “It is not an abuse of process and I am extremely disappointed that Jeannie Suk Gersen and Janet Halley made these comments that may inevitably discourage students from exercising their rights and reporting when it is appropriate.”

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