Emergency Orders Can’t Last Forever

Chief Justice Roberts issued an unusual concurring opinion last night to the Court’s denial of injunctive relief to churches objecting to California Governor Newsom’s public health orders. On the one hand, he emphasized that judges should not be too quick to intercede in the governmental response to a rapidly changing and devastating pandemic. On the other hand, he concluded his brief opinion by emphasizing that this was especially true when “a party seeks emergency relief in an interlocutory posture, while local officials are actively shaping their response to changing facts on the ground.”

State governors might breathe a sigh of relief that the chief justice did not join his conservative colleagues questioning the constitutionality of state restrictions on church services and cited some particularly deferential opinions from the past to support his vote. As Josh Blackman has pointed out, those citations seem fairly inapt to the situation at hand and seemed most designed to emphasize the importance of judicial deference broadly. Citing Harry Blackmun, as the chief justice did, is always a risky thing to do, but Roberts might be said to be following former Chief Justice William Rehnquist as much or more than Blackmun here.

Roberts clerked for Rehnquist, of course, and Rehnquist, like Roberts, was unquestionably a conservative jurist. But Rehnquist notably reflected a kind of post-New Deal conservative jurisprudence that emphasized the scope of the police powers and deemphasized the scope of individual liberty. It is easy to imagine Rehnquist urging the courts to defer to the discretionary power of state government officials in the context of a public health crisis, as he did in many other contexts. Rehnquist was a judicial hawk on federalism, but part of the point of federalism jurisprudence for him was pushing policymaking authority down to state and local elected officials. Federal officials, including federal judges, should be more hands off than the Warren and Burger Courts were inclined to be and let governors and state legislatures act in the public interest as they and their electorates understood it. Roberts’ quote from the Progressive Era Jacobson vaccination case would not have been out of place in a Rehnquist opinion.

Governors should be cautious not to read too much into Roberts’ vote, however. Roberts evinces concern that unelected judges not second-guess difficult public health policymaking, but he also emphasized that the Court should be particularly hesitant to act on such an emergency motion when government policy is in flux in response to rapidly changing events.

Roberts did not reveal his hand on how he would apply the most relevant doctrine to this particular case, the Rehnquist Court’s precedents on the free exercise of religion. That would require examining the particular question of how church services are being treated compared to similarly situated secular activities. Justice Kavanaugh’s three-justice dissent (which Alito did not join, despite dissenting from the Court’s order) does briefly take up that question and asks whether churches can be treated differently than grocery stores. I find that to be a singularly unpersuasive comparison, and I hope Kavanaugh and his colleagues do better when a similar case eventually reaches them for full argument. But Kavanaugh is raising real issues.

Governors will need to explain why their specific restrictions on churches are actually justifiable in light of the current state of the pandemic, and why churches should be subject to these particular restrictions given that California, for example, is now opening up hair salons. Attending church services might not be very comparable to grocery shopping, but governors will have a much harder time explaining why religious assemblies should be more restricted than businesses providing personal services or less tolerated than various kinds of secular public assemblies, such as public protests.

It appears that traditional religious services pose real dangers of transmitting this kind of respiratory infection, and thus are particular dangers to public health. If the only risk were to the congregants attending the services, then that would be one thing and we should generally let consenting adults assume whatever risks to their own personal health that they might be willing to tolerate. But that is not the situation. The risk is not merely borne by those who decide to assemble in closely packed environs, but by all those who come in contact with them in the subsequent days, and by all those who come into contact with those who have come into contact with the congregants, and so on. Individual liberty, including religious liberty, comes with limits.

The state has a real interest in preventing churches from becoming virus incubators, but it also has an obligation to impose regulations that are reasonable and to treat religious activities no differently than other, similarly situated activities. Public health officials needed, and received, particular deference in the early days of the pandemic as they struggled to respond to an uncertain but dangerous situation. But there are limits.

Judicial, and political, deference to public health officials should not be unbounded. We cannot live with emergency measures forever. The excuse that the virus in unknown and uncontrolled only works for so long. Governments had an obligation to use the time that was purchased by the lockdown to prepare for the inevitable reopening. It is not at all obvious that they used that time wisely or productively. Courts have an obligation to insure that governments not restrict liberty more than is necessary or for longer than is necessary, even in a pandemic.

Roberts gave California and other states more time to recalibrate their emergency orders, and they had better take advantage of it. They should not assume that five justices will continue to be willing to defer to sweeping restrictions on daily life indefinitely, or when another case reaches the Court in a better posture to support careful judicial deliberation of the merits.

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Emergency Orders Can’t Last Forever

Chief Justice Roberts issued an unusual concurring opinion last night to the Court’s denial of injunctive relief to churches objecting to California Governor Newsom’s public health orders. On the one hand, he emphasized that judges should not be too quick to intercede in the governmental response to a rapidly changing and devastating pandemic. On the other hand, he concluded his brief opinion by emphasizing that this was especially true when “a party seeks emergency relief in an interlocutory posture, while local officials are actively shaping their response to changing facts on the ground.”

State governors might breathe a sigh of relief that the chief justice did not join his conservative colleagues questioning the constitutionality of state restrictions on church services and cited some particularly deferential opinions from the past to support his vote. As Josh Blackman has pointed out, those citations seem fairly inapt to the situation at hand and seemed most designed to emphasize the importance of judicial deference broadly. Citing Harry Blackmun, as the chief justice did, is always a risky thing to do, but Roberts might be said to be following former Chief Justice William Rehnquist as much or more than Blackmun here.

Roberts clerked for Rehnquist, of course, and Rehnquist, like Roberts, was unquestionably a conservative jurist. But Rehnquist notably reflected a kind of post-New Deal conservative jurisprudence that emphasized the scope of the police powers and deemphasized the scope of individual liberty. It is easy to imagine Rehnquist urging the courts to defer to the discretionary power of state government officials in the context of a public health crisis, as he did in many other contexts. Rehnquist was a judicial hawk on federalism, but part of the point of federalism jurisprudence for him was pushing policymaking authority down to state and local elected officials. Federal officials, including federal judges, should be more hands off than the Warren and Burger Courts were inclined to be and let governors and state legislatures act in the public interest as they and their electorates understood it. Roberts’ quote from the Progressive Era Jacobson vaccination case would not have been out of place in a Rehnquist opinion.

Governors should be cautious not to read too much into Roberts’ vote, however. Roberts evinces concern that unelected judges not second-guess difficult public health policymaking, but he also emphasized that the Court should be particularly hesitant to act on such an emergency motion when government policy is in flux in response to rapidly changing events.

Roberts did not reveal his hand on how he would apply the most relevant doctrine to this particular case, the Rehnquist Court’s precedents on the free exercise of religion. That would require examining the particular question of how church services are being treated compared to similarly situated secular activities. Justice Kavanaugh’s three-justice dissent (which Alito did not join, despite dissenting from the Court’s order) does briefly take up that question and asks whether churches can be treated differently than grocery stores. I find that to be a singularly unpersuasive comparison, and I hope Kavanaugh and his colleagues do better when a similar case eventually reaches them for full argument. But Kavanaugh is raising real issues.

Governors will need to explain why their specific restrictions on churches are actually justifiable in light of the current state of the pandemic, and why churches should be subject to these particular restrictions given that California, for example, is now opening up hair salons. Attending church services might not be very comparable to grocery shopping, but governors will have a much harder time explaining why religious assemblies should be more restricted than businesses providing personal services or less tolerated than various kinds of secular public assemblies, such as public protests.

It appears that traditional religious services pose real dangers of transmitting this kind of respiratory infection, and thus are particular dangers to public health. If the only risk were to the congregants attending the services, then that would be one thing and we should generally let consenting adults assume whatever risks to their own personal health that they might be willing to tolerate. But that is not the situation. The risk is not merely borne by those who decide to assemble in closely packed environs, but by all those who come in contact with them in the subsequent days, and by all those who come into contact with those who have come into contact with the congregants, and so on. Individual liberty, including religious liberty, comes with limits.

The state has a real interest in preventing churches from becoming virus incubators, but it also has an obligation to impose regulations that are reasonable and to treat religious activities no differently than other, similarly situated activities. Public health officials needed, and received, particular deference in the early days of the pandemic as they struggled to respond to an uncertain but dangerous situation. But there are limits.

Judicial, and political, deference to public health officials should not be unbounded. We cannot live with emergency measures forever. The excuse that the virus in unknown and uncontrolled only works for so long. Governments had an obligation to use the time that was purchased by the lockdown to prepare for the inevitable reopening. It is not at all obvious that they used that time wisely or productively. Courts have an obligation to insure that governments not restrict liberty more than is necessary or for longer than is necessary, even in a pandemic.

Roberts gave California and other states more time to recalibrate their emergency orders, and they had better take advantage of it. They should not assume that five justices will continue to be willing to defer to sweeping restrictions on daily life indefinitely, or when another case reaches the Court in a better posture to support careful judicial deliberation of the merits.

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Pew: Democrats Represent 41 Of 44 Districts With Highest COVID-19 Death Tolls

Pew: Democrats Represent 41 Of 44 Districts With Highest COVID-19 Death Tolls

Tyler Durden

Sat, 05/30/2020 – 16:30

Authored by Sharyl Attkisson,

Pew Research Center is out with an analysis of coronavirus deaths. It shows they are overwhelmingly concentrated in Congressional districts represented by Democrats.

Democrats represent 41 of 44 districts with the highest number of Covid-19 deaths.

This lopsided distribution could help explain a partisan divide in the views regarding whether a national shutdown was the right move, and whether it’s time to end it.

From Pew:

The coronavirus outbreak has taken the lives of nearly 100,000 Americans. Yet since the start of the outbreak, the death toll has been concentrated in a just a few places – mostly large metropolitan areas, especially the New York City area.

The places hit hardest by the coronavirus outbreak – which have relatively large shares of ethnic and racial minorities and residents living in densely populated urban and suburban areas – are almost all represented by congressional Democrats.

A new Pew Research Center analysis of data on official reports of COVID-19 deaths, collected by the John Hopkins University Center for Systems Science and Engineering, finds that, as of last week, nearly a quarter of all the deaths in the United States attributed to the coronavirus have been in just 12 congressional districts – all located in New York City and represented by Democrats in Congress. Of the more than 92,000 Americans who had died of COVID-19 as of May 20 (the date that the data in this analysis was collected), nearly 75,000 were in Democratic congressional districts.

Of the 44 hardest-hit congressional districts – the top 10% in terms of deaths – 41 are represented by Democrats, while three are represented by Republicans. These include the New York-area districts, as well as those in the Boston, Detroit and New Orleans metropolitan areas. The average death toll in each of these hardest-hit districts was 1,122 as of May 20.

The next 100 hardest-hit districts, which represent the remainder of the top third of districts, with an average of 270 deaths, also are disproportionately represented by Democrats: 75 are represented by Democrats, 25 by Republicans.

About two-thirds (68%) of the 44 least affected districts – the bottom 10%, with an average 13 deaths in each district – are represented by Republicans in Congress.

Note: Pew finds there are differences in death rates in terms of race but not poverty level.

Read more here:  Coronavirus death toll is heavily concentrated in Democratic congressional districts

*  *  *

Order “Slanted: How the News Media Taught Us to Love Censorship and Hate Journalism” by Sharyl Attkisson at Harper CollinsAmazonBarnes & NobleBooks a MillionIndieBoundBookshop!

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“The Largest Ever Physical Transfer Of Gold”

“The Largest Ever Physical Transfer Of Gold”

Tyler Durden

Sat, 05/30/2020 – 16:00

Two months ago, when the market was in a state of near-total chaos as a result of a sudden collapse in global supply chains due to the hasty coronavirus lockdowns, one market that saw unprecedented turmoil was that of physical gold.

As we pointed out in late March, due to a sudden breakdown in physical gold supply as the world’s top gold refiners, those located in the southern Swiss town of Ticino, namely Valcambi, Pamp and Argor-Heraeus, suddenly stopped producing gold, the  result was a record divergence in the price of spot gold vs gold futures contracts…

… with gold futures decoupling and trading far above spot prices.

The resulting record divergence in gold futures vs spot (in some way analogous to what happened to the price of the prompt WTI contract in April, when the May WTI contract traded as low as ($40) as traders were willing to pay buyers to store oil in a world where there was suddenly no space for the physical commodity), unleashed a flood of physical gold into the US as a record scramble by traders rushing to take advantage of this arbitrage opportunity by shipping bullion to New York sparked what Bloomberg said “may be one of the largest ever physical transfers of the metal.

“The flows into New York are unprecedented,” Allan Finn, the global commodities director at logistics and security provider Malca-Amit told Bloomberg as his company’s teams in New York have been working 24 hours a day to cope with unprecedented demand for physical gold while navigating lockdowns, flight disruptions and social distancing.

Since late March, no less than 550 tons of gold – worth $30 billion at today’s price and roughly equal to global mine output in the period – have been added to Comex warehouse stockpiles; hundreds of tons of that was imported. On its own that amount of gold would represent the 11th largest sovereign holding, larger than the ECB’s official 504.8 tons of gold.

Traditionally, while tens of billions of dollars of gold change hands every day in financial markets, a much smaller amount tends to physically move between vaults in trading hubs like London, Zurich and New York. But that has not been the case in the past two months: it all started to change as the Covid-19 crisis affected the supply chain. As Bloomberg explains what we first highlighted two months ago:

“when planes were grounded and Swiss refineries closed in late March, traders were worried they wouldn’t be able to get gold to New York in time to deliver against futures contracts. That caused futures, which typically trade in lockstep with the London spot price, to soar to a premium of as much as $70 an ounce.

That created an opportunity for enterprising traders: buy gold somewhere in the world at the spot price, sell futures, and benefit from the difference by shipping the metal to New York.”

The scale of the trade has been revealed in exchange reports, import and export data and comments from some of the leading precious metals shipping and vaulting companies. It all came to a head on Thursday, when traders declared their intent to deliver a record 2.8 million ounces of gold against the June Comex contract, the largest daily delivery notice in exchange data going back to 1994.

The bulk of this gold came from Switzerland, as Swiss gold exports to the US surged, reaching 111.7 tons in April, the highest on record. Already in March gold imports topped $3 billion, according to the Census Bureau, the highest in at least a decade.

To meet the unprecedented demand for physical gold, refineries as far away as Australia have ramped up output of kilobars – the form typically delivered on the Comex – to ship to New York.

For Brink’s Managing Director Mark Woolley, the spike in demand to ship gold to New York has been unlike anything he’s seen in 20 years in the market.

“The amount of metal that we’ve successfully moved into New York is pretty significant,” he said Thursday on a webinar hosted by the London Bullion Market Association. “It’s probably not far off the total amount of metal that’s been mined in this period.”

As discussed previously, the CME Group which owns Comex, responded to the unprecedented market dislocation and the sudden lack of physical gold in New York by introducing a new contract allowing the delivery of 400-ounce bars, the type traded in London. Still, “other changes need to be at least considered,” according to LBMA Chairman Paul Fisher.

Valcambi 400 oz “Good Delivery” Gold bar.

With investor demand for physical off the charts, the enormous movement of gold has been a blessing for logistics companies but also a curse: not only have passenger flights – on which shipments are typically transported – been grounded, but New York City, where many Comex warehouses are located (recall JPM’s giant gold vault just happened to be located right next to the NY Fed’s), has also been a hotspot for the virus.

To deal with flows, Loomis International U.K. opened up additional vault capacity. Malca-Amit considered using airports in Boston and Philadelphia, but hasn’t needed to yet, Finn said.

That said, while large volumes and virus-related restrictions at vaults and airports caused some delivery delays, much of the spike in the premium for futures contracts in March – which left banks such as HSBC suffering hundreds of millions in losses – was driven by perception rather than reality, Finn said.

“My own personal opinion is that any assessment on the inability to get gold in was ill-informed at the time and was made on assumptions rather than fact,” he said.

Still, the bonanza for precious metals shippers may last a while. As we pointed out last week, large deliveries have seen June Comex futures drop to a discount to spot prices this week, but later dated futures are still at a premium. In fact, according to BofA, in a world in which central banks are flooding markets will trillions in freshly printed fiat and faith in the monetary system is quietly shrinking one day at a time, the one asset the “smart money” wants – as it dumps stocks – is, you guessed it, gold.

In fact, a simple correlation between the flood in the global money supply and the price of gold suggests the yellow metal has about $1000 of upside.

Meanwhile, as investor interest in other precious metals picked up, futures for silver and platinum have also traded at premiums to spot: “The guys in New York have done a great job,” said Brian Hayward, head of Loomis International U.K.

“We’re seeing a lot of silver head that way right now” Hayward said in what may be very good news for fans of silver, which recently hit record lows against gold…

… a move which may very soon reverse violently.

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Supreme Court Rules 5-4 To Uphold Pandemic Orders Limiting Church Service

Supreme Court Rules 5-4 To Uphold Pandemic Orders Limiting Church Service

Tyler Durden

Sat, 05/30/2020 – 15:35

Authored by Jonathan Turley,

Early on in the pandemic, I wrote about how governors can shutdown churches under the Constitution.  On Friday, the Supreme Court voted 5-4 along those lines to reject an emergency appeal from a California church over the imposition of limits on the size of attendance at services.  The church came close to prevailing. Chief Justice John Roberts joined his liberal colleagues in upholding what he said were limits that “appear consistent” with the First Amendment. The cost ruling is an indication of how courts are applying closer scrutiny to the treatment of churches as opposed to other institutions allowed to have greater numbers of people.

Last week, President Donald Trump has pledged that he will “override” state orders barring in-person religious services unless governors do so.  As I have previously noted, the President is claiming authority that is expressly denied to him in our system of federalism. While I have warned such deference given to the states wanes with time, any order to reopen churches in a given state will be based on the inherent authority of the courts, not the President.  The Administration can, and has promised, joined legal challenges to such state orders but it is not claiming the inherent authority of presidents to “override” state decisions.  The Justice Department has warned Newsom that his order is contravening constitutional rights.  However, now that the Supreme Court has ruled, any move by President Trump to “override” such orders would directly contravene the authority of the Supreme Court as the final arbiter of what the Constitution means in such conflicts.

Roberts wrote in a brief opinion that the state could restrict churches to 25% of their capacity, with no more than 100 worshipers at a time. The court also rejected an appeal from two churches in the Chicago area that objected to Gov. Jay Pritzker’s limit of 10 worshipers at religious services.

In his concurrence, Roberts wrote:

“The precise question of when restrictions on particular social activities should be lifted during the pandemic is a dynamic and fact-intensive matter subject to reasonable disagreement. Our Constitution principally entrusts “[t]he safety and the health of the people” to the politically accountable officials of the States “to guard and protect.” Jacobson v. Massachusetts, 197 U. S. 11, 38 (1905). When those officials “undertake[ ] to act in areas fraught with medical and scientific uncertainties,” their latitude “must be especially broad.” Marshall v. United States, 414 U. S. 417, 427 (1974). Where those broad limits are not exceeded, they should not be subject to second-guessing by an “unelected federal judiciary,” which lacks the background, competence, and expertise to assess public health and is not accountable to the people.”

The Roberts decision is striking in fairly cursory treatment of the other options for the state given the obligation of the state to must show that the limits are “justified by a compelling governmental interest” and “narrowly tailored to advance that interest.” The sharp division shows, as we discussed earlier, how such deference to the states in a pandemic tends to wane with time.

In his dissenting opinion, Justice Brett Kavanaugh wrote that the state had failed to satisfy the high standard for review in such limits on the free exercise of religion.

California has ample options that would allow it to combat the spread of COVID–19 without discriminating against religion. … But absent a compelling justification (which the State has not offered), the State may not take a looser approach with, say, supermarkets, restaurants, factories, and offices while imposing stricter requirements on places of worship. The State also has substantial room to draw lines, especially in an emergency. But as relevant here, the Constitution imposes one key restriction on that line-drawing: The State may not discriminate against religion.

In sum, California’s 25% occupancy cap on religious worship services indisputably discriminates against religion, and such discrimination violates the First Amendment. The Church would suffer irreparable harm from not being able to hold services on Pentecost Sunday in a way that comparable secular businesses and persons can conduct their activities. I would therefore grant the Church’s request for a temporary injunction.”

Here is the opinion: South Bay United Pentecostal Church v. Newsom

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NASA Astronauts Hitch a Ride With Elon Musk’s SpaceX

NASA is back in the business of carrying astronauts into space, and it’s relying on private enterprise to get the job done.

At 3:22 P.M. Eastern time today, NASA astronauts Doug Hurley and Bob Behnken were carried from Kennedy Space Center in Florida into low Earth orbit inside SpaceX’s Crew Dragon vehicle and propelled by the company’s Falcon 9 rocket. It marks the first time NASA astronauts have been launched into space from the U.S. since the last flight of the agency’s Space Shuttle program in 2011. It’s also the first time a privately-owned craft has carried humans into orbit.

“We are once again launching American astronauts on American rockets from American soil,” said NASA Administrator Jim Bridenstine in a Tuesday press conference. “This is a big moment in time. It’s been nine years since we’ve had this opportunity.”

The launch was originally scheduled for Wednesday, but was delayed because of weather.

The Dragon Crew vehicle will now carry the two astronauts to the International Space Station (ISS), where they will stay for anywhere from 30 days to four months.

Since the Shuttle program was axed nearly a decade ago, NASA has been paying the Russian government to carry its astronauts to space, which has cost as much as $86 million per seat, according to CNN.  Today’s mission relieves the U.S. of having to rely on a foreign government to get its astronauts into space. It also relieves NASA of having to rely on government-owned spacecraft.

The success of the Dragon Crew mission is a vindication of the space agency’s decade-and-a-half long transition to a commercial space model that has spurred private innovation and saves taxpayers money.

Technically, collaborations between NASA and private industry have gone back decades, with big private defense contractors like Boeing and Lockheed Martin helping to design the rockets and vehicles that carry cargo and crew into space. Those collaborations, however, were typically conducted through “cost-plus” contracts. These arrangements, as Ars Technica‘s Eric Berger describes in a detailed history of NASA’s move to commercial space, were a recipe for cost overruns:

“For big human spaceflight projects, NASA engineers had decided precisely what they needed, selected a contractor to build it, and then monitored every step with paperwork in triplicate. For this, the contractor got reimbursed for its costs, plus a generous fee. If a vehicle ran five years late and doubled its original budget, NASA was on the hook for cost overruns. This tended to not encourage on-time delivery, but eventually the government got what it wanted.”

The SpaceX launch that occurred today relied on a “fixed-price” model, where NASA would specify what service it wanted and the price it would pay for its development. Private companies would then compete for those contracts. As part of its “buy a ticket, not a vehicle” motto, NASA would effectively be a customer of these private companies, who would own and operate their craft.

This new approach got started in earnest back in 2005 when NASA announced it would award $500 million to two companies to develop cargo-carrying vehicles to low Earth orbit as part of its Commercial Orbital Transportation Services (COTS) program. Space X and Orbital Services eventually received the initial contracts under COTS.

In 2012, SpaceX—founded by former PayPal CEO Elon Musk—became the first private company to deliver supplies to the ISS as part of the COTS program.

The success of this program later led to the creation of the Commercial Crew Program (CCP), which would focus on developing systems for human space flight. In 2014, NASA awarded both SpaceX and Boeing contracts of $2.6 billion and $4.2 billion respectively to build and operate crew launch systems. That’s a screaming bargain compared to the cost of more directly government-managed space development programs. Berger, at Ars Technica, notes one 2009 estimate showing that it would cost the government $34.5 billion to develop the Ares I rocket and Orion crew-carrying spacecraft as part of NASA’s now cancelled-Constellation program.

“We were effectively doing what the Constellation Program was doing with about the same amount of money, total, that they were burning in a single month,” said one NASA engineer who was assigned to work with SpaceX on their Cargo Dragon project.

The Space Launch System NASA adopted to replace the Constellation Program, and which is being done on the traditional cost-plus contract model, has also suffered from missed deadlines and cost overruns.

While the free market futurist vision of private moon colonies is still probably a few decades away, the Crew Dragon launch is an important milestone and a useful example of how to successfully contract out government functions to private companies.

Also, check out Reason‘s interview with aerospace pioneer Burt Rutan on the dawn of private space travel:

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NASA Astronauts Hitch a Ride With Elon Musk’s SpaceX

NASA is back in the business of carrying astronauts into space, and it’s relying on private enterprise to get the job done.

At 3:22 P.M. Eastern time today, NASA astronauts Doug Hurley and Bob Behnken were carried from Kennedy Space Center in Florida into low Earth orbit inside SpaceX’s Crew Dragon vehicle and propelled by the company’s Falcon 9 rocket. It marks the first time NASA astronauts have been launched into space from the U.S. since the last flight of the agency’s Space Shuttle program in 2011. It’s also the first time a privately-owned craft has carried humans into orbit.

“We are once again launching American astronauts on American rockets from American soil,” said NASA Administrator Jim Bridenstine in a Tuesday press conference. “This is a big moment in time. It’s been nine years since we’ve had this opportunity.”

The launch was originally scheduled for Wednesday, but was delayed because of weather.

The Dragon Crew vehicle will now carry the two astronauts to the International Space Station (ISS), where they will stay for anywhere from 30 days to four months.

Since the Shuttle program was axed nearly a decade ago, NASA has been paying the Russian government to carry its astronauts to space, which has cost as much as $86 million per seat, according to CNN.  Today’s mission relieves the U.S. of having to rely on a foreign government to get its astronauts into space. It also relieves NASA of having to rely on government-owned spacecraft.

The success of the Dragon Crew mission is a vindication of the space agency’s decade-and-a-half long transition to a commercial space model that has spurred private innovation and saves taxpayers money.

Technically, collaborations between NASA and private industry have gone back decades, with big private defense contractors like Boeing and Lockheed Martin helping to design the rockets and vehicles that carry cargo and crew into space. Those collaborations, however, were typically conducted through “cost-plus” contracts. These arrangements, as Ars Technica‘s Eric Berger describes in a detailed history of NASA’s move to commercial space, were a recipe for cost overruns:

“For big human spaceflight projects, NASA engineers had decided precisely what they needed, selected a contractor to build it, and then monitored every step with paperwork in triplicate. For this, the contractor got reimbursed for its costs, plus a generous fee. If a vehicle ran five years late and doubled its original budget, NASA was on the hook for cost overruns. This tended to not encourage on-time delivery, but eventually the government got what it wanted.”

The SpaceX launch that occurred today relied on a “fixed-price” model, where NASA would specify what service it wanted and the price it would pay for its development. Private companies would then compete for those contracts. As part of its “buy a ticket, not a vehicle” motto, NASA would effectively be a customer of these private companies, who would own and operate their craft.

This new approach got started in earnest back in 2005 when NASA announced it would award $500 million to two companies to develop cargo-carrying vehicles to low Earth orbit as part of its Commercial Orbital Transportation Services (COTS) program. Space X and Orbital Services eventually received the initial contracts under COTS.

In 2012, SpaceX—founded by former PayPal CEO Elon Musk—became the first private company to deliver supplies to the ISS as part of the COTS program.

The success of this program later led to the creation of the Commercial Crew Program (CCP), which would focus on developing systems for human space flight. In 2014, NASA awarded both SpaceX and Boeing contracts of $2.6 billion and $4.2 billion respectively to build and operate crew launch systems. That’s a screaming bargain compared to the cost of more directly government-managed space development programs. Berger, at Ars Technica, notes one 2009 estimate showing that it would cost the government $34.5 billion to develop the Ares I rocket and Orion crew-carrying spacecraft as part of NASA’s now cancelled-Constellation program.

“We were effectively doing what the Constellation Program was doing with about the same amount of money, total, that they were burning in a single month,” said one NASA engineer who was assigned to work with SpaceX on their Cargo Dragon project.

The Space Launch System NASA adopted to replace the Constellation Program, and which is being done on the traditional cost-plus contract model, has also suffered from missed deadlines and cost overruns.

While the free market futurist vision of private moon colonies is still probably a few decades away, the Crew Dragon launch is an important milestone and a useful example of how to successfully contract out government functions to private companies.

Also, check out Reason‘s interview with aerospace pioneer Burt Rutan on the dawn of private space travel:

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SpaceX Manned Flight Successfully Launches From Cape Canaveral

SpaceX Manned Flight Successfully Launches From Cape Canaveral

Tyler Durden

Sat, 05/30/2020 – 15:10

Update: at precisely 3:24pm ET, SpaceX’s NASA Flight launched successfully from Cape Canaveral, marking the first NASA crew bound for orbit from the US in 9 years.

Trump and Pence were both present at the lift off.

NASA was live tweeting the launch:

* * *

Despite the threat of more thunderstorms, SpaceX and NASA are preparing for today’s historic attempt to launch astronauts into space, via a private company. This comes several days after NASA “scrubbed” the first attempt due to weather-related issues and one day after SpaceX’s Starship prototype blew up on a Texas launch pad. 

NASA officials say today’s Crew Dragon launch from Kennedy Space Center, located in Merritt Island, Florida, has around 50% odds for a 15:22 ET liftoff of a SpaceX Falcon 9 rocket: 

“We are moving forward with the launch today,” NASA Administrator Jim Bridenstine tweeted Saturday morning. “Weather challenges remain with a 50% chance of cancellation.”

SpaceX and NASA administrators are carefully monitoring today’s evolving weather situation around the launch site. As of 11:37 ET, there’s a weather disturbance off the coast and could arrive inland around 14:00 to 16:00 ET, right around the time of launch. 

weather radar at 11:37ET

At 7:51 ET, SpaceX tweeted “all systems go,” along with an up-close photo of the Crew Dragon atop the Falcon 9 rocket.

As per the Launch Mission Execution Forecast:

“On Sunday, the late season frontal boundary will provide some added cloudiness over the Spaceport early, but will likely push just south of the area by T-0. The primary weather concerns for launch are flight through precipitation, the thick cloud layer rule, and the cumulus cloud rule, associated with the frontal boundary,” NASA’s launch report said. 

The report went on to say Sunday’s launch window would be at 60% and 70% chance for Tuesday, suggesting more favorable odds of launching would be seen in the week ahead. 

NASA Launch Report 

Astronauts Doug Hurley and Bob Behnken will be on the Crew Dragon mission, which would be the first manned rocket launch from US soil since the space shuttle program ended in 2011. Both President Donald Trump and Vice President Mike Pence will be in attendance at today’s launch event. 

Bridenstine tweeted, “Best selfie ever!” as he stands in front of Hurley and Behnken.

NASA will stream the launch event live on YouTube

Today’s launch comes one day after SpaceX’s Starship SN4 prototype blew up on its test stand in Boca Chica, Texas. It doesn’t produce a vote of confidence for the Crew Dragon launch.

Last week, the morning before the first launch attempt, Elon Musk, the majority owner of SpaceX, holding about 54% of the private company, said: “I’m Chief Engineer of the thing. If it goes right, it’s a credit to the SpaceX/NASA team. Goes wrong, it’s my fault.” 

via ZeroHedge News https://ift.tt/2MdJCun Tyler Durden

Keep An Eye On The Yuan & Corporate Spreads

Keep An Eye On The Yuan & Corporate Spreads

Tyler Durden

Sat, 05/30/2020 – 14:45

Authored by Steven Vannelli via Knowledge Leaders Capital blog,

Since the March 23, 2020 low, when the Federal Reserve announced basically unlimited liquidity via a variety of programs, corporate spreads have narrowed, and the stock market has risen substantially. In the chart below, I overlay US investment grade spreads over the S&P 500 Index.

The funny thing is that the Fed really hasn’t put out all that much money into these new facilities. In the chart below, I capture the amount of money the Fed has spent on its facility designed to assist corporate bonds. All they’ve lent is about $1.2 billion. Clearly, the Fed’s verbal intervention has helped considerably.

With that said, there is a new risk on the horizon to keep an eye on—the depreciating Chinese Yuan. While the Fed is surely going to be more active in the corporate bond market, they may need to start actually lending some money here as other fundamental forces work against the narrowing of corporate spreads.

Very quietly, the Chinese Yuan – the offshore version that is more subject to market forces – has slowly been depreciating. This depreciation was associated with the dramatic widening of spreads we experienced earlier in the year.

We’re now at an interesting crossroad. News of the last 24 hours clearly suggests that China is “overtaking” Hong Kong and the international community is recognizing this. Part of the Phase 1 trade deal between he US and China included vague language about not using the currency to manipulate markets. Is it possible that with the “takeover” in Hong Kong and the currency depreciation, the US rips up the deal and the CNH soars?

Who knows?

What is clear is that investment grade credit spreads and US stocks are diverging.

Stocks are making new recovery highs as the CNH is on the precipice of breaking out. Since mid-April the divergence has become pronounced enough to call it out as a risk worth paying attention to.

via ZeroHedge News https://ift.tt/3cbJ9n2 Tyler Durden

Meet One Hedge Fund Manager Who Is Up 100% This Year, Despite The Pandemic

Meet One Hedge Fund Manager Who Is Up 100% This Year, Despite The Pandemic

Tyler Durden

Sat, 05/30/2020 – 14:20

While other hedge fund managers and investment businesses struggle (and, in the case of “Downtown” Josh Brown, even take out PPP loans for payroll purposes) amidst the virus-induced chaos, one hedge fund manager is having an epic start to the year. 

Alan Howard of Brevan Howard has returned about 100% so far this year, with most of that gain coming from March – the month that the pandemic began to grip the world’s financial markets. We’re guessing his fund doesn’t need to take out a PPP loan to make payroll.

His performance this year is a stark outlier not only for him personally, but for the investment industry over the last quarter, as volatile markets have rattled portfolio managers. Howard’s performance is the best of major macro hedge funds so far this year, according to Bloomberg. This year’s performance comes after “years of mediocre performance” from his firm, BBG notes.

The AH Master Fund was started in 2017 specifically with the purpose of making riskier bets in order to seek out high returns. It includes Howard’s own money, as well as a “handful” of outside investors. The fund is cloaked in secrecy, even to those who work at the firm. 

The company’s main hedge fund was up 18% in March and it’s “not clear” how the AH Master Fund was able to achieve such results, though some of the firm’s results were attributed to interest rate trading, according to the company’s April client letter.

While there have been some other notable outperformers during the pandemic – like Saba Capital Management’s 36% return in March and macro trader Said Haidar’s 25% performance – Howard’s fund stands near the top. He was bested by very few, but oil trader Pierre Andurand netted a 155% return in March, slightly beating out Howard.

The returns mark a much needed comeback for Howard: the fund’s assets have fallen to $8 billion this year from more than $40 billion in 2013. At the end of April, the firm’s AUM stood at $9.6 billion. 

via ZeroHedge News https://ift.tt/2Ar6ILb Tyler Durden