We have seen much commentary that if US 10y yields go back to 2.5% or 3.0%, then equity markets suffer. We prefer a different way to looking at the problem. The key is what inflation is doing alongside any move in nominal yields. The below chart shows the % of the US yield curve trading below inflation. We highlight in green the periods when more than 50% of the yield curve is trading below inflation (as is the case today).
Typically, negative real yields are very stimulative for equities. It is only when most of the yield curve is trading above inflation (white bars in right chart above) that equity markets start to face persistent headwinds.
Equity investors do need to worry about rising yields in terms of sector rotation. Duration is a basic concept for fixed income investors, but for equity investors, it is a less common method to look at portfolio exposures.
We have built a duration calculator for equities, using a combination of a 15-year DCF (consensus earnings forecasts, 2% terminal growth rate, individual cost of equity) and a terminal value duration component. This allows us to see which equities are most sensitive to a move in yields.
For the stocks in the Russell 1000, we calculate the duration of each name and aggregate to find the duration for different sectors. Financials, energy and consumer staples look like relative safe-havens. Info tech, healthcare and consumer discretionaries have the highest durations and are more vulnerable to yield moves.
California, with its relatively large tax burden compared to other states, has seen a taxpayer exodus in recent years and, along with it, billions in taxable gross income.
State-to-state migration data recently released by the Internal Revenue Service (IRS) shows that California lost an estimated net 70,534 households—or 165,355 taxpayers and their dependents—in the years 2017-2018, with those fleeing taking around $8.8 billion in net adjusted gross income with them.
Interstate migration flows are influenced by a number of factors, including retirement, job opportunities, and housing costs. Brandon Ristoff, a policy analyst with the California Policy Center, told Center Square that the flight of billions of dollars from California is driven by the state’s “bad policies on the economy, education and more.”
“California used to be a place where everyone wanted to live, but now California has become a place where people want to leave,” he told the outlet.
The top three beneficiaries of the California exodus were Texas, Arizona, and Nevada. The bulk of the departing Californians filed their taxes in Texas, with the Republican-led state seeing a net inflow of 72,306 taxpayers and their dependents, and a gross income boost of some $3.4 billion.
An estimated 53,476 Californians relocated to Arizona, bringing with them around $2.2 billion in gross income. Nevada welcomed 49,745 California taxpayers and their dependents, along with a gross income of $2.3 billion.
There is little agreement among experts as to how large a role taxes play in state-to-state migration.
A routine Census Bureau survey asks people who move any distance the main reason for their decision to relocate, including employment, housing, going away for college, crime, or to join a significant other. The most popular choices in 2019-2020 (xls), ranked according to popularity, were “wanted newer/better/larger house or apartment,” followed by “new job or job transfer,” “to establish own household,” “other family reason,” “wanted to own home, not rent,” and “wanted cheaper housing.”
The least popular were “natural disaster,” “change of climate,” and “foreclosure or eviction.”
But while taxes were not part of the Census Bureau survey, a 2018 analysis by the Cato Institute argued that taxes do influence migration, and said tax-related motivations could be inferred from some of the Census Bureau survey’s responses.
“The Census Bureau does not ask movers about taxes. But some of the 19 choices may reflect the influence of taxes. For example, people moving for housing reasons may consider the level of property taxes since those taxes are a standard item listed on housing sale notices. Similarly, people moving for new jobs may consider the effect of income taxes if they are, for example, moving between a high-tax state such as California and a state with no income tax such as Nevada,” the institute wrote in the analysis.
California, with its state-local effective tax rate of 11.5 percent, ranked eighth highest in terms of the state-local tax burden for 2019, according to a Tax Foundation analysis. Texas, by contrast, with a state-local effective tax rate of 8 percent, ranked 47th. Arizona, with a state-local effective tax rate of 8.7 percent, ranked 45th, while Nevada, at 9.7 percent, came in at 29th.
According to the Tax Foundation’s 2021 State Business Tax Climate Index, California’s ranking was even more grim, second only to New Jersey, which the foundation labeled as least tax-friendly.
“Shot Heard Around The World” – El Salvador President Pushes Bill To Adopt Bitcoin As Legal Tender
In a pre-recorded video, El Salvador President Nayib Bukele made a somewhat shocking announcement in the final hours of the Bitcoin 2021 conference in Miami on Saturday afternoon.
Bukele said Saturday he will send a bill to the Central American country’s Congress next week to make bitcoin legal tender.
#Bitcoin has a market cap of $680 billion dollars.
If 1% of it is invested in El Salvador, that would increase our GDP by 25%.
On the other side, #Bitcoin will have 10 million potential new users and the fastest growing way to transfer 6 billion dollars a year in remittances.
If the legislation is passed by lawmakers (Bukele does have a majority of votes in El Salvador’s congress), El Salvador would become the first country to formally adopt the digital currency.
“In the short term this will generate jobs and help provide financial inclusion to thousands outside the formal economy,” Bukele said.
Mallers said on stage that he had lived in El Salvador for three months and discovered that some 70% of the population there does not have a bank account, and 20% of the country’s GDP comes from remittances sent by migrants to family members.
Strike launched in El Salvador in March, and Mallers said the app has been “onboarding” 20,000 El Salvadorans per day.
He framed Bukele’s forthcoming legislation as the next step in a partnership between Strike, which will open an office in El Salvador, and the local government there.
Mallers called the announcement a “shot heard ’round the world for Bitcoin.”
“What’s transformative here is that bitcoin is both the greatest reserve asset ever created and a superior monetary network.”
VC and Bitcoin flag-waver Tim Draper praised it as a “brilliant government move” and said “entrepreneurs and investors will be on the next flights to El Salvador.”
Caitlin Long of Avanti Bank & Trust in Wyoming called it a “historic day in Bitcoin” but also predicted a “knockdown fight” to get approval because recognizing Bitcoin as legal tender would likely give it the same status as foreign currencies by banks, a level of legitimacy for the top cryptocurrency that many do not want to see granted.
We hope that this decision will be just the beginning in providing a space where some of the leading innovators can reimagine the future of finance, potentially helping billions around the world.
Bitcoin advocates see the move as both an important precedent for developing nations and a breakthrough for cryptocurrency, which many countries have fought.
“There is not a dry eye on bitcoin Twitter tonight,”podcast host Daniel Prince said.
“El Salvador adopting bitcoin as legal tender in order to escape the tyranny of central banks to rescue their people is what this is all about.”
There is not a dry eye on #Bitcoin Twitter tonight.#ElSalvador adopting #Bitcoin as legal tender in order to escape the tyranny of central banks to rescue their people is what this is all about.@JackMallers
Bukele didn’t go into details on how the policy would work. But he said it would be used alongside the U.S. dollar, which the nation has used as its official unit of currency since 2001.
Hedge Fund CIO: We’ve Lost Faith In Media, Politicians And Scientists; We Still Have Absolute Trust In The Fed
By Eric Peters of One River Asset Management
“Drift. Apathy. Distrust,” barked Biggie Too, feeling it, already in a groove. “Frustration. Irritation. Uneasy anticipation,” continued the chief global strategist for one of Wall Street’s Too-Big-To-Fail affairs.
“Biggie got this deep dark feeling he’s way too early,” whispered Too, lips pursed, right at home in 3rd person. “We lost our faith in politicians and the media. Institutions. Now we’re losing trust in science, our scientists, Biggie sees them cracks spreading,” said Biggie, pointing to his bank of screens, Fauci getting Fox’d.
“And yet, through it all we still have absolute trust in the Fed,” said Biggie, squinting. “Guess this thing goes and goes until our central bankers get humiliated too. When we discover inflation ain’t transitory.”
Overall:
“Our current market prices reflect market and trading dynamics unrelated to our underlying business,” wrote AMC’s management to the SEC, seeking approval to issue more shares, of which he controls an unlimited supply. The meme stock had jumped nearly 100% in a single day, extending gains this year to +2,850%. At nearly 8-times its pre-pandemic high, AMC’s price has diverged far from reality if there is even such a thing.
Oil prices jumped yet again, extending this year’s rally to over 40%. OPEC responded by increasing output, over which it has an outsized influence, trying to roughly match supply to our reopening reality. Unlike equity, which can be created as easily as fiat currency in infinite quantities at the click of a mouse, the production of commodities is a far more difficult affair. Capital intensive. With varying lead and lag times that reflect real world realities. And this makes their prices especially sensitive to both the quantity and velocity of fiat.
Now into our second year of 15% federal deficits, funded for free by newly created dollars, those things which are hardest to produce are generally rising faster than others. So far this year, consumer prices have leapt at a +6.2% annualized pace. With the Federal Reserve able to buy as many bonds as needed to hold 2-year yields at 0.15%, a level wildly disconnected from reality, real interest rates are now deeply negative.
National housing prices are rising at the fastest pace in recorded history: +20% from this time last year, with sales surging +35%. Over that one-year span, the S&P 500 has risen +40%. In 2021, it is rising at a +30% annualized pace (+12.6% year-to-date).
Such is the magic of money illusion.
And this, of course, is the unstated aim of the latest stage in our experiment. But its success relies on wages outpacing these various metrics, if the system is to trend back toward equilibrium. But year to date, average hourly earnings have risen at a +3.4% annualized pace.
New Ideas Party:
“Next week I will send to congress a bill that will make bitcoin a legal tender,” announced El Salvador’s President Bukele. There are 195 countries on the planet. El Salvador ranks 103rd in GDP. 20% comes from remittances, most of which cost recipients 10% in fees. About 1/3 of the nation lives below the poverty line. 70% have neither a bank account nor credit card. El Salvador leads in nothing really. But the President and his New Ideas Party just made it the first nation on earth to accept bitcoin as legal tender. It won’t be the last.
GameStop And AMC Could Soon Be In The Russell 1000 Index
If you had said during the beginning of the pandemic we’d be talking about whether or not retailer GameStop and dying movie chain AMC would be moved from the Russell 2000 up to the large cap Russell 1000 – instead of being dropped from the index altogether – people would have assumed you were joking.
But now that question is legitimately on the table thanks to the astronomical run in both names and the upcoming Russell Reconstitution, according to Bloomberg.
The reconstitution, which takes place on June 25, is going to affect more than $10 trillion in investors’ assets and exchange volumes are usually “among the heaviest of the year” around the time it happens.
The cutoff for the Russell 1000 from the Russell 2000 is $5.2 billion. GameStop currently sports a market cap of $18.4 billion and AMC sports a market cap of $24.6 billion.
“The market capitalization breakpoint which separates companies in the U.S. large-cap Russell 1000 Index and companies in the U.S. small-cap Russell 2000 Index increased by 73% from $3.0 billion in 2020 to $5.2 billion for 2021.”
“The closely-watched final index membership lists, with breakouts for the Russell 1000 Index, the Russell 2000 Index and the Russell Midcap Index, will be published on Monday, June 28 when the Russell Reconstitution takes effect and the newly reconstituted indexes begin to operate.”
Catherine Yoshimoto, FTSE Russell Director of Product Management, said: “In 2020, overall capitalization for the US equity market stayed fairly flat, decreasing by 1%. However, we’ve seen a surge in growth in the first half of 2021 with the total market cap in the Russell 1000 reaching $44.1 trillion. We have also seen a resurgence in market capitalizations of small cap companies in the Russell 2000 reflecting the overall bounce back of US equity markets following the COVID-19 recession in early 2020.”
Any inclusion for shares of GME and AMC could have a profound effect not only on trading volume for the day, but also on morale amongst the retail crowd that touts the names, as they may see inclusion as a reason to rally and run up shares.
Approximately $17.9 trillion is currently benchmarked to FTSE Russell indexes, the release notes. You can view the preliminary estimates for the reconstitution here.
Loudoun County, Virginia, has become “ground zero” in the fight against critical race theory-based indoctrination in schools nationwide, according to the co-founder of a parents’ group taking on the local education establishment.
Critical race theory (CRT) must be uprooted because it “seeks to view everything through the lens of race and believes all institutions, traditions, language, and history of this country are systemically racist,” said Ian Prior, a parent who helped to found and is executive director of Fight for Schools, which is registered in Virginia as a political action committee.
Prior was principal deputy director of public affairs at the Justice Department in the Trump administration. He is now CEO of his own political consulting firm, Headwaters Media, and co-founder of the website The Daily Malarkey.
CRT proponents believe the nation’s supposedly racist nature can only be remedied by “viewing everything through the lens of race and discriminating in order to end what they believe is systemic racism,” he told The Epoch Times in an interview.
“And it ignores the individual in favor of identity groups, which means it is harmful to people of all races that believe in the concepts of Western liberalism, meritocracy, and equal opportunity for all.”
But Loudoun County, Prior said, is “ground zero in a movement by parents to retake control over what happens in the schools that they drop their kids off to every day.”
This is happening “primarily because of distance learning where we’ve received tips from hundreds of parents, walking by, during a class that they hear online and saying, ‘what is that?’ Or a screenshot or something where they’re able to observe it, where they normally would not have been able to,” he said.
“Parents have a lot more insight over the past year as to what’s going on, and I think that is really what’s driven the accountability and the spotlight on all of this.”
The current problems in Loudoun, the wealthiest county in the United States, according to Forbes, began February 2019 when students at Madison’s Trust Elementary School in Ashburn were directed to make-believe that they were slaves.
“Some educators argue that eliciting intense emotions from students, which simulations are generally designed to do, can be a starting point for inquiry,” according to Education Week. But other radical education activists reject such games, saying they hurt black children.
Youngsters played a game in which as runaway slaves they had to move through an obstacle course meant to represent the Underground Railroad, which was a covert network of routes and safe houses in the antebellum United States that slaves used to escape to free states.
Michelle Thomas, president of Loudoun County NAACP, denounced this “runaway slave game” as “sickening and racist” and demanded race and bias training.
LCPS apologized and promised to hire outside experts for “an equity audit,” requiring all teachers to receive “cultural competence and implicit bias training,” and creating a new post related to “equity and cultural competence.”
In April 2019, LCPS hired Equity Collaborative, a California consulting firm specializing in critical race theory, for $422,000 to run focus groups, train teachers, and generate an “equity assessment.” The firm says it uncovers “personal and institutional biases that prevent all people, and especially people of color, from reaching their fullest potential.” It focuses on “oppression analysis, learning theory, and coaching for change.”
Attorney General Investigates
An investigation followed by Virginia Attorney General Mark Herring, a Democrat, into allegations that LCPS, among other things, denied students an equal opportunity to participate in elementary school gifted and talented programs based on their race.
Herring came out in favor of critical race theory last year when he urged then-President Donald Trump to rescind Executive Order 13950, which banned teaching CRT to government contractors. Trump said the ideology was “divisive and harmful” and “like a cancer.” President Joe Biden, a CRT supporter, promptly rescinded the order after he was inaugurated.
Leftists counter CRT is needed to promote racial equality by highlighting the supposed damage white people have done to others in society. Herring said Trump’s order “could undo years of important work implementing implicit bias and diversity training.”
Herring’s investigation determined in November 2020 that LCPS’s “policies and practices resulted in a discriminatory impact on Black/African-American and Latinx/Hispanic students.”
The school district settled the case with Herring’s office in February 2021, agreeing to reform its policies, focus on minority outreach, and submit to third-party monitoring. The agreement runs through June 30, 2024.
The plans required training staff in CRT, changing discipline policy to supposedly reduce racial disparities by going easier on students who engage in “disrespect, defiance, and classroom/campus disruption,” apologizing for fighting racial integration efforts six decades ago, creating safe spaces for LCPS staffers of color, and moving away from merit-based admission at elite county schools to give black and Hispanic students a better chance at admission.
Enemies List
Around the same time, radical activists began plotting to undermine anti-CRT parents.
The Daily Wire reported in March that Loudoun County descended into “a moral panic” as the school system “seemed to slide from serving taxpayers to targeting them.”
Members of a 624-member private Facebook group called “Anti-Racist Parents of Loudoun County,” including school staff and school board members, reportedly compiled a long enemies list of parents thought to oppose LCPS policies including CRT teachings. The members said they wanted to “infiltrate,” use “hackers” to silence parents’ communications, and “expose these people publicly.”
“I’m losing any hope that remaining civil towards these people changes anything,” wrote one pro-CRT group member. “Avoiding these people isn’t enough to stop the spread of their evil rhetoric.”
“Anyone know any hackers?” she wrote.
Petition Drive
In May, Fight for Schools launched a petition drive to oust 6 radical members of the 9-member school district board—Denise Corbo, Beth Barts, Brenda Sheridan, Atoosa Reaser, Ian Serotkin, and Leslee King, all of whom are Democrats.
Legally speaking, the petition is based on the fact that “they had a quorum of school board members in a private Facebook group discussing school-related issues,” Prior said, adding that such behavior violates the state’s open meetings law, as well as their own bylaws and code of conduct.
After Prior and others gather the required number of petition signatures, they are then filed in court. The Commonwealth’s Attorney is then supposed to present the case against the school board members for removal from office.
It is a problem, Prior said, that the Commonwealth’s Attorney in the area is Buta Biberaj, a pro-CRT Democrat who participated in the secret Facebook group. “As of April 30, she was still part of the group and commenting on posts about investigating or finding kids’ TikTok videos that could be racist,” he said.
In 2019, Biberaj beat incumbent prosecutor Nicole Wittmann, a Republican, 51-49 percent, after a George Soros-funded political action committee expended $845,000 to get her elected. Wittmann raised $113,000, The Daily Wire reported. On Twitter, Biberaj praises big-city, anti-police, anti-incarceration district attorneys such as Chesa Boudin of San Francisco.
Before becoming prosecutor, Biberaj was an official with the local NAACP, the media outlet reported. As prosecutor, she went after a Trump supporter for assault for exhaling on anti-Trump protesters while unmasked. She resolved the case by strong-arming the man into donating $3,000 to the local scholarship fund of the NAACP, which had no connection to the incident, in exchange for dropping the charges.
After Fox News pundit Tucker Carlson commented on CRT-related acrimony in the county, Biberaj called him an “unhappy white male.”
“We think there is at least an appearance of conflict, if not an actual conflict, that would make it impossible for her or her office to adequately prosecute the case in court,” Prior told The Epoch Times.
Prior said the other side is in trouble.
“I think that they underestimate our movement. They underestimate the national interest in this, and they’re far too focused on their social media echo chamber and their base of support than they are on the parents, the students, and the taxpayers that are now learning all that’s been going on in this school system over the past two years, and people are not happy about it.”
The Epoch Times reached out to Loudoun County Public Schools for comment. Wayde B. Byard, Public Information Officer for LCPS, said via email that the district declined to comment.
The War Is On: Anonymous Targets “Narcissistic” Elon Musk, Calls Him “Desperate For Attention”
The Anonymous movement – famous for taking on such “untouchable” targets at the Church of Scientology – may now be directing its ire toward Elon Musk.
In what could be a PR nightmare on steroids, the collective of anonymous activists have officially “called for war” against Musk for “manipulating cryptocurrencies, among other alleged sins,” RT reported on Sunday.
On a Twitter feed with over 5.8 million followers, the @YourAnonCentral account, which has been used for Anonymous news in the past, told Elon Musk in a video: “You may think you are the smartest person in the room, but now you have met your match.”
The video says: “Millions of retail investors were really counting on their crypto gains to improve their lives. This is something that you will never understand because you were born into the stolen wealth of a South African apartheid emerald mine and have no clue what struggle is like for most of the working people in the world.”
It continued: “As hardworking people have their dreams liquidated over your public temper tantrums, you continue to mock them with memes from one of your million-dollar mansions.”
“You have enjoyed one of the most favorable reputations of anyone in the billionaire class because you have tapped into the desire that many of us have to live in a world with electric cars and space exploration. But recently, your carefully created public image is being exposed, and people are beginning to see you as nothing more than another narcissistic rich dude who is desperate for attention,” it continued.
The video had nearly 850,000 views on Twitter and about 66,200 views as of 1100EST on Sunday.
The group’s exception with Musk appears to come after the Tesla CEO once again put a dent in the price of bitcoin, Tweeting out a heart breaking emoji on Friday with a bitcoin meme that caused the price of the crypto to dip more than 5% at one point.
“We are Anonymous! We are legion. Expect us,” the video says.
In a Tweet some consider to be a response from Musk, he tweeted: “Don’t kill what you hate, Save what you love.”
While Musk likely scrambles to change most of his online passwords and thinks about how to “smooth things over” with Anonymous similar to how he is trying to do with China, there has also been speculation to the origins of the Anonymous video. Given the fact that the group is a decentralized collective, not unlike bitcoin itself, it could be tough to pin down.
But at this point, now that it has reached millions, it may not matter.
A lot of confusion over whether or not the Anonymous video was fake. This Anonymous group is sharing it. Others deny it came from them. Remember, this is a decentralized movement with multiple chapters — so one denying doesn’t mean the other chapters aren’t involved & vis versa. https://t.co/wX9mx8TzO0
Morgan Stanley: “We Are Getting A Lot Of Client Pushback On Our Call For A 15% Drop”
By Michael Wilson, chief equity strategist of Morgan Stanley
Over the past few weeks, we’ve been spending a lot of time with investors discussing and debating our mid-year outlook. Here are the highlights:
First, investors are definitely more receptive to the mid-cycle transition narrative that we introduced a few months ago. There’s an acknowledgement that something has changed in the market, because more investors are struggling to make money consistently as leadership flip-flops day to day. This is consistent with the typical mid-cycle transition as the market struggles to find the next consensus trade.
Second, while investors are warming up to our mid-cycle transition thesis, they don’t agree that US equity valuations need to fall by another 15%, as we suggest. Though this view is based on historical mid-cycle transitions, many we speak with think that this time is different because the Fed and other central banks are committed to staying dovish for longer than normal. We don’t doubt the Fed’s resolve but believe that a more dovish Fed today means it will need to tighten faster later. We also think the equity market understands this and will discount it by proactively taking valuations lower through the equity risk premium channel, rather than waiting for cues from the bond market. More importantly, it’s already happened in the most expensive and lower-quality parts of the equity market, and we think this de-rating will eventually reach the S&P 500 (Exhibit 1).
Third, many investors believe we are too conservative on earnings growth for next year. Since we were the first to call for a V-shaped recovery and extraordinary operating leverage last year, we’re taking this particular pushback with a grain of salt. Instead, we remain concerned that after the most positive earnings revisions quarter on record, next year’s consensus forecasts are now above what our analysis suggests is achievable for the first time since the recovery began. More specifically, we think margin assumptions are too high given headwinds from inflation and taxes that have not been baked into estimates. The market should start to factor them in via lower valuations.
Fourth, many of our favored trades are also receiving pushback. To start with our downgrade of industrials, many investors ask, why now given the push for greater infrastructure spending? We think much of this spending has been appropriately priced and such projects generally take much longer to come to fruition than the majority of investors appreciate. Furthermore, many industrial companies will suffer the most from the developing inflationary headwinds in supply chains and labor shortages. Instead, we continue to prefer financials and materials stocks as ways to capture rising inflation while avoiding reopening risks. Although our preference for healthcare over technology is also out of favor, we sense that investors are looking more actively at healthcare for new ideas. Our preference stems from cheaper valuations and greater pent-up demand for healthcare services than technology goods, where there is a risk of payback from last year’s surge.
Finally, the greatest pushback continues to be on our call for consumer staples to do better than consumer discretionary stocks in the mid-cycle transition. Here, investors believe excess savings will translate into better-than-expected growth for consumer discretionary businesses. However, our analysis suggests that overconsumption last year relative to longer-term trends will curtail some of this spending as the economy reopens. In addition, consumer discretionary stocks are classic early-cycle winners and tend to underperform in the mid-cycle stage.
Bottom line, we’re out of consensus with our mid-cycle transition call. The fact that it’s receiving a healthy amount of pushback is a good sign it’s not yet discounted.
This suggests that further consolidation or an outright correction in the S&P 500 is likely, and the best way to make money will be via relative value trades. Our favorites remain staples over discretionary, healthcare over tech, and materials over industrials. We also continue to favor banks as the best way to play inflation and recommend avoiding early-cycle plays like semiconductors, many retailers, and homebuilders/improvement stocks. Finally, moving up the quality curve remains a good strategy across one’s entire portfolio, with the caveat that you can’t overpay for it – i.e., look for quality at a reasonable price.
Democrat Manchin Sides With ‘The People’, Will Vote Against “Democracy-Binds Weakening” Election Reform Bill
We have written extensively in the past few months (here, here, here, and here) discussing the costs (both fiscally and to freedom) and consequences (both intended and unintended) of the so-called “For The People” Act, it appears at least one Democrat politician has decided that the power grab is too much.
In a sweeping op-ed in the Charleston Gazette-Mail, Sen. Joe Manchin (D-W.Va.) explained why he will vote against the sweeping election reform overhaul bill, putting the fate of the legislation in jeopardy in the evenly split Senate.
“I believe that partisan voting legislation will destroy the already weakening binds of our democracy, and for that reason, I will vote against the For The People Act,” Manchin wrote.
As a reminder, the 791-page bill includes all of the greatest hits of 2020: Mandatory mail ballots, ballots without postmarks, late ballots and voting in precincts where you don’t live. It includes so many bad ideas that no publication has satisfactory space to cover all of them.
Democrats claim the bill is aimed at maximizing voter participation and ending corruption in our election systems, but the truth is that the legislation would do neither. Instead, it will only serve to open up our states’ elections to fraud and public mistrust at a time when we need to bolster voter confidence.
Further, the bill rearranges the relationship between the states and the federal government. The Constitution presumes that states regulate their own elections, but the Constitution has a big “but” in what is called the Elections Clause. The Constitution says, “but the Congress may at any time by Law make or alter such Regulations.” For over 200 years, Congress rarely used this power. After all, the power was put in the Constitution only to prevent the states from suffocating the federal government out of existence by never holding federal elections.
The House in March passed The For The People Act in a 220 to 210 vote. No House Republicans supported the measure, and one Democrat voted against the legislation; and that appears to be the crux of Manchin’s decision – to urge some level of bipartisanship.
“The truth, I would argue, is that voting and election reform that is done in a partisan manner will all but ensure partisan divisions continue to deepen,” he wrote.
Manchin also said he “will not vote to weaken or eliminate the filibuster,” which a number of leading Democrats have suggested in order to pass election reform.
He added that he will “seek bipartisan compromise no matter how difficult and to develop the political bonds that end divisions and help unite the country we love.”
Without Manchin’s support for the bill and his opposition to nixing the filibuster, the likelihood of it passing through the Senate and landing on President Biden’s desk has all but vanished.
The legislation appears unlikely to attract the bipartisan 60 votes needed to overcome a filibuster, or the 50 votes necessary to pass if the party decides to use the nuclear option.
Manchin – the most conservative of the Democratic Senators – took a modest shot at the power-hungry partisan progressives in his party…
“Of course, some in my party have argued that now is the time to discard such bipartisan voting reforms and embrace election reforms and policies solely supported by one party. Respectfully, I do not agree.“
…but, concluded on a hopeful note:
“American democracy is something special, it is bigger than one party, or the tweet-filled partisan attack politics of the moment. It is my sincere hope that all of us, especially those who are privileged to serve, remember our responsibility to do more to unite this country before it is too late.”
Which we suspect is more aimed at the extreme left progressive wing of the party, who will likely now paint the moderate as a treasonous traitor, ready to destroy democracy…
Human smugglers along the southern border are openly advertising their services on Facebook and the social media company has fallen short on removing such content.
A plethora of user accounts have posted offers to facilitate illegal border crossings on the platform. Some even directly advertise how much they charge for the service. Rep. Kat Cammack (R-Fla.), who took office in January, repeatedly alerted Facebook to the issue in general and to a number of specific posts of this kind, but most of them haven’t been removed, she said.
Facebook has so far failed to accommodate Cammack’s request for an in-person meeting to discuss the issue, she told The Epoch Times.
Given that some of the posts in question were paid advertisements, it raises the question of whether Facebook has been taking money, at least indirectly, from criminal cartels, which are known to control the human smuggling operations, Cammack said.
The Epoch Times alerted Facebook to about dozen posts and groups that appeared connected with the issue. Most, but not all of them, were subsequently removed.
“We prohibit content that offers or assists with human smuggling and remove it from our platform whenever we find it,” a Facebook spokesperson told The Epoch Times via email.
Illegal border crossings skyrocketed this year, after dying down during the CCP (Chinese Communist Party) virus pandemic last year.
Information from Border Patrol and illegal immigrants themselves indicates that smugglers are tuned in to the American immigration policy climate and have used the Biden administration’s softer approach and rhetoric as an advertising tool. Specifically, the administration’s move to no longer turn back minors caught crossing illegally has been linked to a surge of unaccompanied minors taking the dangerous track to and across the border, often with disastrous consequences.
“I have witnessed some of the most horrific horrors, really, crimes against humanity that you can imagine,” Cammack said. “It is not just a national security crisis. This is a humanitarian crisis.”
Drug cartels control the Mexican side of the border so tightly that nobody gets illegally across without paying them, she learned from Border Patrol agents during her two trips to the border this year, she said.
“This is not in any shape, way, or form a humanitarian mission that the cartels are undertaking. This is about dollars and they don’t care about the value of a human life. They care about making money and they do it through the most brutal, authoritarian means possible,” she said.
While the posts on Facebook present human smuggling operations as trustworthy and safe, the reality is just the opposite.
“I have personally spoken to a 9-year-old girl who could barely tell me her name because her vocal cords had given out while screaming while being gang-raped by cartel members,” Cammack said, noting that the majority of girls are sexually assaulted or abused on their way to the border.
Most of the Facebook groups that appear connected with the human smuggling activity are private, but there’s plenty of posts that offer the illicit service publicly.
“Good morning, my people. I offer safe crossing to the U.S. Send [me a message to] my inbox for more information,” said one post translated by The Epoch Times.
“We have crossings through Lomas de Arena, Chihuahua. We offer camouflage, backpack with food. I’m currently in Chihuahua. Send me [a message to my] inbox or call me at [redacted by The Epoch Times],” another post said.
One video post said, “Ready for the adventure? In name of God,” showing footage from the border.
“I offer my foot crossing through Tamaulipas and through the [border] line. Only people truly interested, send me [a message to my] inbox. Foot crossing with 3 shots at crossing and crossing through the [border] line, but it’s 100% safe,” yet another post said.
“People, don’t miss your chance to travel to the U.S. through asylum applications guarantee, adults with minors. For more information, [send a message to my] inbox or call [redacted],” one offer said.
“The American Dream. Cross the border 100% safe by city–don’t waste your time through foot crossing overnight–I’ll get you directly to your destination. For more information send a WhatsApp to [redacted],” one user advertised.
“We are still offering border crossing to the U.S. from any country. If you’re from another country, you can pay first upon arrival to Mexico. We also offer services to fix your arrival with or without a migration alert,” another post said.
“I have 5 spots for Oxnard, California. The paperwork is not free as you cross through the [border] line. Send me a message to [redacted] for more information. Only people truly interested,” another said.
“Travel safely to the U.S. guided by God. We have the best people–responsible and righteous. Schedule your travel date. Click this WhatsApp link [redacted]. Our cars are new and drivers with years of experience, full comfort, and friendly behavior,” yet another said, claiming, “We cover all routes inside the U.S.”
Cammack acknowledged that it’s not easy to completely get rid of such posts, given the ability of the smugglers to keep adding more.
But that doesn’t absolve Facebook of its responsibilities in her view.
“They want to play in the public square and be the new public square? They have to assume the responsibility that goes with it. And so if they allow this type of activity on their platform they need to be held to account for it,” she said.
At the very least, the company should promptly take down all the posts it’s been made aware of and adjust its algorithms so it no longer shows this kind of content to users as recommendations when they search for related keywords or just randomly stumble upon it, she said.
Honduras’s ambassador met with Cammack, she said, and asked her to help interface with WhatsApp, a messaging app owned by Facebook, “because the narco-terrorists are using WhatsApp as their primary means of communication to engage in activity that is murdering people, destroying communities, and really undermining the rule of law in Honduras.”
“When you have a foreign government that’s asking for our help in communicating and working with these social media platforms, that’s a sign that they have far too much power and it’s really time for a discussion about the public square and the role of big tech in our everyday life and society and how it’s used for good and for bad,” she said.
Cammack hasn’t spared the White House either.
“It is truly incredible the level of sheer incompetence that this administration has displayed with their handling of the border crisis,” she said.
The administration has said it’s focusing on the “root causes” of illegal immigration in the Central American countries where most illegal immigrants have been coming from in recent years. Some of the illegal aliens are fleeing gang violence in their home countries, many are coming for better paid jobs.
It’s not clear how the administration plans to fix the long-festering crime problems as well as the sizable economic development gap that makes seeking life and employment in the United States attractive. The United States has been sending billions in economic aid to the countries, but the problems continue seemingly unabated. President Donald Trump managed to force the countries to curb the flow of migrants on their end by threatening to withdraw aid. The Biden administration has shown no sympathy for such an approach.
