Month: January 2022

76% Of Americans Oppose Biden’s Pledge Only To Consider Black Women Forr Court Vacancy; ABC/Ipsos Poll

76% Of Americans Oppose Biden’s Pledge Only To Consider Black Women Forr Court Vacancy; ABC/Ipsos Poll

Authored by Jonathan Turley,

We have been discussing the controversial pledge of President Joe Biden two years ago that he would only consider black women for the first vacancy to the Supreme Court. While past presidents have said that they wanted to appoint nominees who were female or black, they all considered a diverse set of candidates and had “short lists” that included different races and genders. Biden has promised that he will not consider males or non-black candidates. Now, an ABC News/Ipsos poll shows that 76 percent of Americans reject such a threshold exclusionary rule based on race or gender.

During the primary, Biden wanted to garner support with black voters by saying that he would only consider black women for the next seat. He made the pledge after Rep. James Clyburn pushed him to do so during a break the presidential debate — Biden turned around and made the commitment when the debate resumed according to a new book. Clyburn later gave Biden his critical endorsement that many (including Biden) attribute his victory to in the key South Carolina primary.

As discussed previously, commentators have insisted that Ronald Reagan, Donald Trump, and George H.W. Bush made the same pledge. That is also false. While seeking to appoint women and African Americans, none of the three excluded other races or genders from consideration and had diverse short lists. Yet, even if they did, the question remains: should admission to the Court be based on an exclusionary threshold qualification that the Court has rejected as unconstitutional or unlawful for schools and businesses.

Notably, even 54 percent of Democrats agreed that Biden should consider all potential candidates.

“Just 23% want him to automatically follow through on his history-making commitment,” according to ABC News. Yet, Democratic senators have applauded Biden for his pledge.

That is roughly the same quarter of voters that seems to drive much of the policies in the Biden White House — an agenda that has politically marginalized the President with many voters.

As I have previously written, none of this was necessary. President Biden could have stated his intention to seek a black female nominee without closing consideration to any other race or gender.

The Biden Administration has repeatedly been called out for policies or programs with racial criteria. It is the same type of threshold use of race that resulted in federal programs in the Biden Administration being struck down as raw racial discrimination, including prioritizing black farmers for pandemic relief. Likewise, the Administration has been criticized for supporting the use of race to prioritize the receipt of scarce Covid treatments.

Tyler Durden
Mon, 01/31/2022 – 08:45

via ZeroHedge News https://ift.tt/APDSWVYyh Tyler Durden

Investors Drop Another $168 Million Into ARKK Last Week As Cathie Wood’s ETF Faces A “Loyalty Test”

Investors Drop Another $168 Million Into ARKK Last Week As Cathie Wood’s ETF Faces A “Loyalty Test”

There’s been no doubt that the last 3 months have not been friendly to Cathie Wood’s flagship ARK Innovation Fund (ARKK). We have covered the fund’s historic drawdown and noted at the beginning of this year that a lot of its success (or failure) in the new year will likely hinge on the performance of Tesla.

But so far – despite the fund falling more than 50% from its all-time highs and 27% this month – the ARKK “loyalty test”, as the Wall Street Journal called it this weekend, seems to still be working in favor of Wood. In the past week, investors have put about $168 million into the fund, boosting its net assets to $11.8 billion, the Journal wrote on Sunday.

As we have continually noted, ARKK’s components appears to be a “Who’s Who” list of overvalued stocks at the dead center of the crosshairs for the current market volatility. These include names like Zoom, Block, Teladoc, Roku and Spotify. 

“After correcting for nearly 11 months, innovation stocks seem to have entered deep value territory, their valuations a fraction of peak levels,” Wood wrote last month, defending her “strategy” in the face of unrelenting red days. Meanwhile, a lot of the $16 billion that flowed into ARK Innovation from the second quarter of 2020 is at risk of now being underwater. 

The WSJ pointed out Larry Carroll, a financial adviser at advisory firm Wealth Enhancement Group in Rock Hill, S.C., who has $18 million of his clients’ money in ARK funds after first buying shares in 2018. He commented: “The real question has been should we be buying more. I’ve resisted the urge mainly because I don’t think you’ll see ARK and the disruption stocks do well in this environment.”

Client-portfolio manager at ARK, Renato Leggi, said that “some investors have started to agree with Ms. Wood’s assessment over the past week and are buying shares”.

Yes, Renato; and some have been buying the inverse ARKK ETF (SARK) and have doubled their money in less than six months…

Klaus Derendorf, a 50-year-old business-development executive from Los Angeles told the WSJ he sold his shares in November after losing about 20%. He commented: “I gotta go back to real fundamentals.”

Joe Seid, a 58-year-old sales director from Chicago, said he bought ARK shares after seeing Wood on TV. He sold last year after losing 10% and told the WSJ: “For me, these were way too speculative. It didn’t really jibe with more core financial beliefs.”

Meanwhile, Cathie Wood has been under scrutiny for how she presents the performance of her hallmark fund. This month, Zero Hedge contributor Quoth the Raven wrote that Wood had changed how ARK’s website was displaying its returns for ARKK – from a YTD return period to a 5 year return period.

He also wrote back on December 21 that Wood had backtracked on estimates of returning 40% per year, for the next 5 years. She said in mid December that “innovation stocks” were in “deep value territory” and she estimated specifically that her “flagship strategy” could deliver “a 40% compound annual rate of return during the next five years”.

Then, she changed the language in her blog post and realigned her expectations from “40%” to “30-40%” and added a lot of qualifier language, not the least of which was directing the return expectation away from their “flagship strategy” and onto a vague benchmark of ARK Invest, in general.

“If the luster wears out for ARKK names or we see a tech wreck, as I have predicted might happen, there’s no doubt that Wood’s “Innovation Fund” will wind up facing more volatility, possibly disproportionately,” we wrote in December.

It looks like that is the case, at least for the start of 2022 thus far. Let’s see if her investors continue to hang tough…

Tyler Durden
Mon, 01/31/2022 – 08:30

via ZeroHedge News https://ift.tt/PT8JRDeEC Tyler Durden

The Right to Defy Criminal Demands: Expensive Duties to Protect

I’ve just finished up a rough draft of my The Right to Defy Criminal Demands article, and I thought I’d serialize it here, minus most of the footnotes (which you can see in the full PDF). I’d love to hear people’s reactions and recommendations, since there’s still plenty of time to edit it. You can also see previous posts (and any future posts, as they come up), here.

[* * *]

[A.] Duties to Protect Generally

So far we’ve discussed whether refusing to comply with a criminal demand should itself be tortious, be criminal, or nullify one’s right to self-defense. But sometimes the claim is that a criminal demand creates an obligation to take care to diminish the risk of the crime. To adapt scenario 2 from the Introduction,

  • Danielle’s abortion clinic has been firebombed in the past, by people who want it to go out of business or at least to leave town. The clinic is indeed attacked again, and visitors who are injured sue the clinic for negligently failing to take reasonable steps to prevent the attack, such as hiring armed security guards or installing armored doors.

The claimed negligent conduct, unlike in the initial scenario 2, isn’t keeping the clinic open—it’s keeping the clinic open without extra security. By imposing liability, the law wouldn’t be ordering law-abiding people to obey the bombers’ demands, and the bombers wouldn’t be directly getting just what they want. But practically speaking, legally requiring such security can indeed hand the bombers a victory: Their actions would have increased the clinic’s cost of operating, perhaps enough to lead the clinic to shut down.

This is close to the scenario in Rocky Mountain Planned Parenthood v. Wagner, decided in 2020 by the Colorado Supreme Court. The case arose from a 2015 mass shooting at a Planned Parenthood clinic. Injured visitors and survivors of a murdered visitor sued the clinic, claiming that the attack “was foreseeable, given the ‘long history of violent direct attacks, killings and threats’ against Planned Parenthood facilities,” and that the clinic should therefore have taken extra precautions: They should have had continuous armed security (rather than just “three days per week and only for about four hours each day”); should have “erect[ed] a perimeter fence”; and should have “replace[d the clinic’s] tempered glass entry door with a steel or otherwise bullet-resistant door.”

The four Justices in the majority held that the case could go forward:

On these facts, we cannot preclude, as a matter of law, the possibility that a reasonable jury could find PPRM’s allegedly insufficient security measures to have been a substantial factor in causing the plaintiffs’ injuries, even given the magnitude of Dear’s premeditated efforts to cause mass casualties without regard for his own survival or capture.

Perhaps, if pressed on it, the Justices might have said that a clinic could indeed say, “millions for defense, not one penny for tribute,” defying the demands of those who would make the clinic close—but then the clinic would indeed have to pay some money, if not millions, for defense. And they rejected the argument of the three-Justice dissent, which warned:

[T]he majority’s approach creates a perverse incentive: Knowing that women’s health clinics are more threat-prone than other public-facing businesses, and that such clinics may be found liable for their failure to mitigate or prevent mass shootings, abortion opponents can increase the frequency and severity of their threats of violence in order to force women’s health clinics to fortify their facilities to extreme levels. This, in turn, makes women’s health clinics both prohibitively expensive to operate and virtually impossible to insure….

Moreover, this risk is not one that will be faced only by women’s health clinics that provide abortion services. After today’s decision, antisemitic fanatics can impose additional costs on synagogues, and White supremacists can inflict the same on Black churches or businesses.

I don’t know how these concerns ought to play out in such situations. Perhaps the right to defiance should nonetheless carry with it a duty to take reasonable care to protect visitors or bystanders against the harms that may flow from such defiance, so long as that care simply involves reasonable expenditures rather than giving up one’s activities. Nonetheless, the practical concerns raised by the Planned Parenthood dissenters strike me as important, and as worth mentioning.

[B.] Duties to Warn of Danger

Courts could likewise demand that people who have been threatened by criminals issue a warning to neighbors, visitors, and others, as a special kind of precaution:

  • Danielle as been threatened with a crime by Craig if she does something (continues seeing a new lover, sells blasphemous books, performs abortion). She refuses to comply. Craig attacks her, and third parties—lovers, guests, neighbors, employees, coworkers, customers—get injured in his attack. They sue Danielle for failing to warn the injured parties of the danger, and giving them an opportunity to avoid the danger, including by shunning her.

I’ve tried to deal with that in some measure in my Tort Law vs. Privacy article, and just wanted to flag the issue here. But I do think that, though warnings are often seen as inexpensive precautions, mandatory warnings that one is being targeted by criminals pose unusually great costs. Ellen Bublick puts it well in praising a court decision that held a “woman had no duty to warn [her] date about her extremely jealous ex-boyfriend”—”[a] contrary view could let his violence control her life.” And the same would apply, I think, to bookstores, abortion clinics, and other politically controversial organizations as well.

The post The Right to Defy Criminal Demands: Expensive Duties to Protect appeared first on Reason.com.

from Latest – Reason.com https://ift.tt/2H8rZ6tnu
via IFTTT

The Reverse Spiderman Principle: With Great Responsibility Comes Great Power

An entity—a landlord, a manufacturer, a phone company, an Internet platform, a manufacturer of self-driving cars—is making money off its customers’ activities. Some of those customers are using the entity’s services in ways that are criminal or tortious. Should the entity be held responsible for the customers’ activities?

This is a broad question, and there might be no general answer. But in this essay, I’d like to focus on one downside of answering it “yes”: What I call the Reverse Spiderman Principle—with great responsibility comes great power. We should think whether we want to empower such entities to surveil, investigate, and police their customers’ behavior.

* * *

Let me begin by offering three examples of where courts have balked at imposing legal liability, because they didn’t want to require or encourage businesses to police their customers. The first came in the early 1900s, where some government officials demanded that telephone and telegraph companies block access to their services by people suspected of running illegal gambling operations. Prosecutors could have gone after the bookies, of course, and they did. But they also argued that the companies should have done the same—and indeed sometimes prosecuted the companies for allowing their lines to be used for such criminal purposes. No, held many courts; to quote one:

A railroad company has a right to refuse to carry a passenger who is disorderly, or whose conduct imperils the lives of his fellow passengers or the officers or the property of the company. It would have no right to refuse to carry a person who tendered or paid his fare simply because those in charge of the train believed that his purpose in going to a certain point was to commit an offense. A railroad company would have no right to refuse to carry persons because its officers were aware of the fact that they were going to visit the house of [the bookmaker], and thus make it possible for him and his associates to conduct a gambling house. Common carriers are not the censors of public or private morals. They cannot regulate the public and private conduct of those who ask service at their hands.[1]

If the telegraph or telephone company (or the railroad) were held responsible for the actions of its customers, then it would acquire power—as “censor[] of public or private morals”—that it ought not possess.

Now those companies were common carriers, denied such power (and therefore, the courts said, responsibility) by law. But consider a second example, Lunney v. Prodigy Services Co., a 1999 case in which the New York high court held that e-mail systems were immune from liability for allegedly defamatory material sent by their users.[2] E-mail systems aren’t common carriers, but the court nonetheless reasoned that they shouldn’t be held responsible for failing to block messages, even if they had the legal authority to block them: An e-mail system’s “role in transmitting e-mail is akin to that of a telephone company,” the court held, “which one neither wants nor expects to superintend the content of its subscribers’ conversations.”[3] Even if e-mail systems aren’t forbidden from being the censors of their users’ communications, the law shouldn’t pressure them into becoming such censors.

And here’s a third example: Castaneda v. Olsher, where a mobile home park tenant injured in a gang-related shootout involving another tenant sued the landlord, claiming it “had breached a duty not to rent to known gang members.” No, said the court:

[W]e are not persuaded that imposing a duty on landlords to withhold rental units from those they believe to be gang members is a fair or workable solution to [the] problem [of gang violence], or one consistent with our state’s public policy as a whole. . . .

If landlords regularly face liability for injuries gang members cause on the premises, they will tend to deny rental to anyone who might be a gang member or, even more broadly, to any family one of whose members might be in a gang.[4]

This would in turn tend to lead to “arbitrary discrimination on the basis of race, ethnicity, family composition, dress and appearance, or reputation,” which may itself be illegal (so the duty would put the landlord in a damned-if-you-do-damned-if-you-don’t position).

But even apart from such likely reactions by landlords being illegal, making landlords liable would jeopardize people’s housing options and undermine their freedom even if they aren’t gang members, putting them further in the power of their landlords: “families whose ethnicity, teenage children, or mode of dress or personal appearance could, to some, suggest a gang association would face an additional obstacle to finding housing.” Likewise, even if landlords respond only by legally and evenhandedly checking all tenants’ criminal histories, “refusing to rent to anyone with arrests or convictions for any crime that could have involved a gang” would “unfairly deprive many Californians of housing.” This “likely social cost” helped turn the court against recognizing such a responsibility on the part of landlords.

* * *

Now of course many such companies (setting aside the common carriers or similarly regulated monopolies) have great power over whom to deal with and what to allow on their property, even though they aren’t held responsible—by law or by public attitudes—for what happens on their property. In theory, for instance, Prodigy could have decided that it wanted to kick out users who they thought were using their e-mail for evil purposes (whether libel or, say, anti-capitalist advocacy).

But in practice, in the absence of responsibility (whether imposed by law or social norms), many companies will eschew such power, for several related reasons—even setting aside the (presumably minor) loss of business from the particular customers who are ejected:

  1. Policing customers takes time, effort, and money.
  2. Policing customers risks error and bad publicity associated with such error, which could alienate many more customers than the few who are actually denied service.
  3. Policing customers in particular risks allegation of discriminatory policing, which may itself be illegal and at least is especially likely to yield bad publicity.
  4. Policing some customers will often lead to public demands for broader policing: “You kicked group X, which we sort of like, off your platform; why aren’t you also kicking off group Y, whom we loathe and whom we view as similar to X?”
  5. Conversely, a policy of “we don’t police our customers”—buttressed by social norms that don’t require (or even affirmatively condemn) such policing—offers the company a simple response to all such demands.
  6. Policing customers creates tension even with customers who aren’t violating the company’s rules—people often don’t like even the prospect that some business is judging what they say, how they dress, or whom they associate with.
  7. Policing customers gives an edge to competitors who can sell their services as “our only job is to serve you, not to judge you or eject you.”

Imposing legal responsibility on such companies can therefore encourage them to exercise power even when they otherwise wouldn’t have. And that is in some measure so even if responsibility is accepted as a broad moral norm, enforced by public pressure, not just a legal norm. That norm would increase the countervailing costs of non-policing. And it would decrease the costs of policing: For instance, the norm and the corresponding pressure will likely act on all major competitors, so the normal competitive pressures encouraging a “the customer is always right” attitude will be sharply reduced.

Likewise, when people fault a company for errors or perceived discrimination, the company can use the norm as cover, for instance arguing that “regrettably, errors will happen, especially when one has to do policing at scale.” “After all, you’ve told us you want us to police, don’t you?”

Accepting such norms of responsibility can also change the culture and organization of the companies. It would habituate the companies to exercising such power. It would create bureaucracies within the companies staffed with people whose jobs rely on exercising the power—and which might be looking for more reasons to exercise that power.

And by making policing part of the companies’ official mission, it would subtly encourage employees to make sure that the policing is done effectively and comprehensively, and not just at the minimum that laws or existing social norms command. Modest initial policing missions, based on claims of responsibility for a narrow range of misuse, can thus creep into much more comprehensive use of such powers.

* * *

So far, there has been something of a constraint on calls for business “responsibility” for the actions of their customers: Such calls have generally involved ongoing business-customer relationships, for instance when Facebook can monitor what its users are posting (or at least respond to other users’ complaints).

Occasionally, there have been calls for businesses to simply not deal with certain people at the outset—consider Castaneda v. Olsher, where plaintiffs argued that defendants just shouldn’t have rented the mobile homes to likely gang members. But those have been rare. Few people, for instance, would think of arguing that car dealers should refuse to sell cars to suspected gang members who might use the cars for drive-by shootings or for crime getaways.[5] Presumably most people would agree that even gang members are entitled to buy and use cars in the many lawful ways that cars can be used, and that car dealers shouldn’t try to deny gang members access to cars. (If the legislature wants to impose such responsibilities, for instance by banning sales of guns to felons or of spray paint to minors, then presumably the legislature should create such narrow and clearly defined rules, which rely on objective criteria that don’t require seller judgment about which customers merely seem likely to be dangerous.)

But now more and more products involve constant interaction between the customer and the seller. Say, for instance, that I’m driving a self-driving Tesla that is in constant contact with the company. Recall how Airbnb refused to rent to people who it suspected were coming to Charlotteville for the “Unite the Right” rally.[6] If that is seen as proper—and indeed as mandated by corporate social responsibility principles—then one can imagine similar pressure on Tesla to stop Teslas from driving to the rally (or at least to stop such trips by Teslas of those people suspected of planning to participate in the rally).

To be sure, this might arouse some hostility, because it’s my car, not Tesla’s. But of course Airbnb was refusing to arrange bookings for other people’s properties, not its own. Its rationale was that it had a responsibility to stop its service from being used to promote a racist, violent event. But why wouldn’t Tesla then have a responsibility to stop its intellectual property and its computers (assuming they are in constant touch with my car) from being used the same way? To be sure, Tesla’s sale contract might be seen as implicitly assuring that its software will always try to get me to my destination. But that is just a matter of the contract—if companies are seen as responsible for the misuse of their services, why wouldn’t they have an obligation to draft contracts that allow them to fulfill that responsibility?

Now maybe some line might be drawn here: Perhaps, for instance, we might have a special rule for services that are ancillary to the sale of goods (Tesla, yes, Airbnb, no), under which the transfer of the goods carries with it the legal or moral obligation to keep providing the services even when one thinks the goods are likely to be used in illegal or immoral ways. (Though what if I lease my Tesla rather than buying it outright?) Or at least we might say there’s nothing irresponsible about a product seller refusing to police customers’ continuing use of the services that make those products work.

But that would just be a special case of the broader approach that I’m suggesting here: For at least some kinds of commercial relationships, a business should not be held responsible for what its customers do—because we don’t want it exercising power over its customers’ actions.

* * *

[Again, this is of course just a sketch of what concerns me here. I’ll be elaborating on this, and also discussing areas where businesses are indeed held responsible for the actions of others—certainly of their employees but also, sometimes, of tenants and other customers.[7] I’ll also discuss how responsibility to prevent crime on one’s property has led to pressure to institute more surveillance, for instance with many courts recognizing a duty to install cameras on commercial property. I’d love to hear any suggestions or reactions you folks might have, since I still have plenty of time to work on this.]

[1] Commonwealth v. Western Union Tel. Co., 67 S.W. 59, 60 (Ky. 1901); see also Pa. Publications v. Pa. Pub. Util. Comm’n, 36 A.2d 777, 781 (Pa. 1944) (cleaned up); People v. Brophy, 120 P.2d 946, 956 (Cal. App. 1942).

[2] The case turned on conduct that happened before the enactment of 47 U.S.C. § 230, which provided such immunity by statute. The court therefore addressed whether a libel claim was available in the first place, thus avoiding the need to determine whether § 230 was retroactive.

[3] Lunney v. Prodigy Servs. Co., 723 N.E.2d 539, 542 (N.Y. 1999).

[4] 162 P.3d 610 (Cal. 2007). On this point, the Justices were unanimous.

[5] But see Andrew Jay McClurg, The Tortious Marketing of Handguns: Strict Liability Is Dead, Long Live Negligence, 19 Seton Hall Legis. J. 777, 816 n.178 (1995) (quoting a proposal that gun sellers must, on pain of liability for negligence, “be especially alert to, and wary of, gun buyers who display certain behavioral characteristics such as … appear[ing] in unkempt clothing and hav[ing] a slovenly appearance”).

[6] https://ift.tt/mSMA0FQI1

[7] Cf. Morris v. Giant Four Corners, Inc., 498 P.3d 238 (N.M. 2021) (a rare case holding a gas station liable for selling gas to a drunk driver). Many courts reject such negligent entrustment claims when someone is selling goods, as opposed to merely lending them or renting them out.

The post The Reverse Spiderman Principle: With Great Responsibility Comes Great Power appeared first on Reason.com.

from Latest – Reason.com https://ift.tt/u9g0ICZhl
via IFTTT

Peter Schiff: Consumers Are Concerned, Investors Are Clueless

Peter Schiff: Consumers Are Concerned, Investors Are Clueless

Via SchiffGold.com,

Is bitcoin an inflation hedge?

Peter Schiff recently appeared on RT Boom Bust with Natalie Brunell of Coin Stories to discuss inflation and whether bitcoin is a hedge. Peter said bitcoin is not an inflation hedge. He called it a “speculative token” with its price driven by supply and demand.

But what about gold? It didn’t perform like an inflation hedge in 2021 despite the inflation freight train. Peter said the reason gold has had some problems is because the market wrongly believes the Fed.

They believe Powell when he says he’s going to do whatever it takes to bring inflation back down to 2%. He’s going to raise interest rates. He’s going to start shrinking the balance sheet. And the markets are believing Powell. But I think he’s just bluffing. And even if he follows through with the rate hikes he’s promised, that’s too little too late. It’s not going to be nearly enough to slow down inflation. And so, it’s not going to restrain gold.”

The type of rate hikes and balance sheet reduction necessary to get ahead of the inflation curve would be too much for the bubble economy to bear.

If Powell actually tried to fight inflation, he would destroy the bubble economy. The stock market would crash. We’d be in a massive recession. Lots of unemployment. A huge financial crisis. And we would force the government into insolvency. Once the markets come to terms with reality, they’re going to be buying gold.”

Natalie agreed that the Fed can’t fight inflation and will be forced to pivot back to providing liquidity to the market. She said that will send both stocks and bitcoin higher.

So where will consumers look to hedge? Will they turn to gold? Bitcoin? Or possibly other cryptocurrencies that are out there?

Peter said right now most investors aren’t even really worried about inflation.

They believe the Fed. So, they think that the inflation problem is going to be solved.”

But at some point, people will realize that it’s actually going to get worse. The Fed is ultimately forced to do an about-face because Powell actually thinks he can raise rates without hurting the economy.

He thinks we have this strong economy. We don’t. We have a gigantic bubble. And even the smallest of pins is going to prick it. In fact, just talking about raising rates, and this has already pricked the bubble. We’re already pretty much in a bear market now. And so, I think that sometime this year, whether it happens before the first rate hike or after, Powell’s going to cave and he’s going to go back to bigger QE and rates go back to zero. And that’s when the markets are finally going to understand the predicament that we’re in.”

Peter said the markets should realize it already. “But for some reason, they need a safe to drop on their head.”

And when that happens, then they’re going to be looking for inflation hedges. They’re not going to care about bitcoin. That’s for gamblers. They’re going to look for a real store of value and they’re going to be buying gold. They may be buying silver as well. And I think they’re going to be buying all sorts of real assets to get dollars.”

Peter emphasized that consumers are concerned about inflation. Consumer sentiment data bears this out. But Peter said investors are clueless.

Consumers are very concerned. And they should be. And unfortunately, it’s going to get much worse for consumers.”

Tyler Durden
Mon, 01/31/2022 – 08:15

via ZeroHedge News https://ift.tt/JLmXFGuUD Tyler Durden

The Right to Defy Criminal Demands: Expensive Duties to Protect

I’ve just finished up a rough draft of my The Right to Defy Criminal Demands article, and I thought I’d serialize it here, minus most of the footnotes (which you can see in the full PDF). I’d love to hear people’s reactions and recommendations, since there’s still plenty of time to edit it. You can also see previous posts (and any future posts, as they come up), here.

[* * *]

[A.] Duties to Protect Generally

So far we’ve discussed whether refusing to comply with a criminal demand should itself be tortious, be criminal, or nullify one’s right to self-defense. But sometimes the claim is that a criminal demand creates an obligation to take care to diminish the risk of the crime. To adapt scenario 2 from the Introduction,

  • Danielle’s abortion clinic has been firebombed in the past, by people who want it to go out of business or at least to leave town. The clinic is indeed attacked again, and visitors who are injured sue the clinic for negligently failing to take reasonable steps to prevent the attack, such as hiring armed security guards or installing armored doors.

The claimed negligent conduct, unlike in the initial scenario 2, isn’t keeping the clinic open—it’s keeping the clinic open without extra security. By imposing liability, the law wouldn’t be ordering law-abiding people to obey the bombers’ demands, and the bombers wouldn’t be directly getting just what they want. But practically speaking, legally requiring such security can indeed hand the bombers a victory: Their actions would have increased the clinic’s cost of operating, perhaps enough to lead the clinic to shut down.

This is close to the scenario in Rocky Mountain Planned Parenthood v. Wagner, decided in 2020 by the Colorado Supreme Court. The case arose from a 2015 mass shooting at a Planned Parenthood clinic. Injured visitors and survivors of a murdered visitor sued the clinic, claiming that the attack “was foreseeable, given the ‘long history of violent direct attacks, killings and threats’ against Planned Parenthood facilities,” and that the clinic should therefore have taken extra precautions: They should have had continuous armed security (rather than just “three days per week and only for about four hours each day”); should have “erect[ed] a perimeter fence”; and should have “replace[d the clinic’s] tempered glass entry door with a steel or otherwise bullet-resistant door.”

The four Justices in the majority held that the case could go forward:

On these facts, we cannot preclude, as a matter of law, the possibility that a reasonable jury could find PPRM’s allegedly insufficient security measures to have been a substantial factor in causing the plaintiffs’ injuries, even given the magnitude of Dear’s premeditated efforts to cause mass casualties without regard for his own survival or capture.

Perhaps, if pressed on it, the Justices might have said that a clinic could indeed say, “millions for defense, not one penny for tribute,” defying the demands of those who would make the clinic close—but then the clinic would indeed have to pay some money, if not millions, for defense. And they rejected the argument of the three-Justice dissent, which warned:

[T]he majority’s approach creates a perverse incentive: Knowing that women’s health clinics are more threat-prone than other public-facing businesses, and that such clinics may be found liable for their failure to mitigate or prevent mass shootings, abortion opponents can increase the frequency and severity of their threats of violence in order to force women’s health clinics to fortify their facilities to extreme levels. This, in turn, makes women’s health clinics both prohibitively expensive to operate and virtually impossible to insure….

Moreover, this risk is not one that will be faced only by women’s health clinics that provide abortion services. After today’s decision, antisemitic fanatics can impose additional costs on synagogues, and White supremacists can inflict the same on Black churches or businesses.

I don’t know how these concerns ought to play out in such situations. Perhaps the right to defiance should nonetheless carry with it a duty to take reasonable care to protect visitors or bystanders against the harms that may flow from such defiance, so long as that care simply involves reasonable expenditures rather than giving up one’s activities. Nonetheless, the practical concerns raised by the Planned Parenthood dissenters strike me as important, and as worth mentioning.

[B.] Duties to Warn of Danger

Courts could likewise demand that people who have been threatened by criminals issue a warning to neighbors, visitors, and others, as a special kind of precaution:

  • Danielle as been threatened with a crime by Craig if she does something (continues seeing a new lover, sells blasphemous books, performs abortion). She refuses to comply. Craig attacks her, and third parties—lovers, guests, neighbors, employees, coworkers, customers—get injured in his attack. They sue Danielle for failing to warn the injured parties of the danger, and giving them an opportunity to avoid the danger, including by shunning her.

I’ve tried to deal with that in some measure in my Tort Law vs. Privacy article, and just wanted to flag the issue here. But I do think that, though warnings are often seen as inexpensive precautions, mandatory warnings that one is being targeted by criminals pose unusually great costs. Ellen Bublick puts it well in praising a court decision that held a “woman had no duty to warn [her] date about her extremely jealous ex-boyfriend”—”[a] contrary view could let his violence control her life.” And the same would apply, I think, to bookstores, abortion clinics, and other politically controversial organizations as well.

The post The Right to Defy Criminal Demands: Expensive Duties to Protect appeared first on Reason.com.

from Latest – Reason.com https://ift.tt/2H8rZ6tnu
via IFTTT

The Reverse Spiderman Principle: With Great Responsibility Comes Great Power

An entity—a landlord, a manufacturer, a phone company, an Internet platform, a manufacturer of self-driving cars—is making money off its customers’ activities. Some of those customers are using the entity’s services in ways that are criminal or tortious. Should the entity be held responsible for the customers’ activities?

This is a broad question, and there might be no general answer. But in this essay, I’d like to focus on one downside of answering it “yes”: What I call the Reverse Spiderman Principle—with great responsibility comes great power. We should think whether we want to empower such entities to surveil, investigate, and police their customers’ behavior.

* * *

Let me begin by offering three examples of where courts have balked at imposing legal liability, because they didn’t want to require or encourage businesses to police their customers. The first came in the early 1900s, where some government officials demanded that telephone and telegraph companies block access to their services by people suspected of running illegal gambling operations. Prosecutors could have gone after the bookies, of course, and they did. But they also argued that the companies should have done the same—and indeed sometimes prosecuted the companies for allowing their lines to be used for such criminal purposes. No, held many courts; to quote one:

A railroad company has a right to refuse to carry a passenger who is disorderly, or whose conduct imperils the lives of his fellow passengers or the officers or the property of the company. It would have no right to refuse to carry a person who tendered or paid his fare simply because those in charge of the train believed that his purpose in going to a certain point was to commit an offense. A railroad company would have no right to refuse to carry persons because its officers were aware of the fact that they were going to visit the house of [the bookmaker], and thus make it possible for him and his associates to conduct a gambling house. Common carriers are not the censors of public or private morals. They cannot regulate the public and private conduct of those who ask service at their hands.[1]

If the telegraph or telephone company (or the railroad) were held responsible for the actions of its customers, then it would acquire power—as “censor[] of public or private morals”—that it ought not possess.

Now those companies were common carriers, denied such power (and therefore, the courts said, responsibility) by law. But consider a second example, Lunney v. Prodigy Services Co., a 1999 case in which the New York high court held that e-mail systems were immune from liability for allegedly defamatory material sent by their users.[2] E-mail systems aren’t common carriers, but the court nonetheless reasoned that they shouldn’t be held responsible for failing to block messages, even if they had the legal authority to block them: An e-mail system’s “role in transmitting e-mail is akin to that of a telephone company,” the court held, “which one neither wants nor expects to superintend the content of its subscribers’ conversations.”[3] Even if e-mail systems aren’t forbidden from being the censors of their users’ communications, the law shouldn’t pressure them into becoming such censors.

And here’s a third example: Castaneda v. Olsher, where a mobile home park tenant injured in a gang-related shootout involving another tenant sued the landlord, claiming it “had breached a duty not to rent to known gang members.” No, said the court:

[W]e are not persuaded that imposing a duty on landlords to withhold rental units from those they believe to be gang members is a fair or workable solution to [the] problem [of gang violence], or one consistent with our state’s public policy as a whole. . . .

If landlords regularly face liability for injuries gang members cause on the premises, they will tend to deny rental to anyone who might be a gang member or, even more broadly, to any family one of whose members might be in a gang.[4]

This would in turn tend to lead to “arbitrary discrimination on the basis of race, ethnicity, family composition, dress and appearance, or reputation,” which may itself be illegal (so the duty would put the landlord in a damned-if-you-do-damned-if-you-don’t position).

But even apart from such likely reactions by landlords being illegal, making landlords liable would jeopardize people’s housing options and undermine their freedom even if they aren’t gang members, putting them further in the power of their landlords: “families whose ethnicity, teenage children, or mode of dress or personal appearance could, to some, suggest a gang association would face an additional obstacle to finding housing.” Likewise, even if landlords respond only by legally and evenhandedly checking all tenants’ criminal histories, “refusing to rent to anyone with arrests or convictions for any crime that could have involved a gang” would “unfairly deprive many Californians of housing.” This “likely social cost” helped turn the court against recognizing such a responsibility on the part of landlords.

* * *

Now of course many such companies (setting aside the common carriers or similarly regulated monopolies) have great power over whom to deal with and what to allow on their property, even though they aren’t held responsible—by law or by public attitudes—for what happens on their property. In theory, for instance, Prodigy could have decided that it wanted to kick out users who they thought were using their e-mail for evil purposes (whether libel or, say, anti-capitalist advocacy).

But in practice, in the absence of responsibility (whether imposed by law or social norms), many companies will eschew such power, for several related reasons—even setting aside the (presumably minor) loss of business from the particular customers who are ejected:

  1. Policing customers takes time, effort, and money.
  2. Policing customers risks error and bad publicity associated with such error, which could alienate many more customers than the few who are actually denied service.
  3. Policing customers in particular risks allegation of discriminatory policing, which may itself be illegal and at least is especially likely to yield bad publicity.
  4. Policing some customers will often lead to public demands for broader policing: “You kicked group X, which we sort of like, off your platform; why aren’t you also kicking off group Y, whom we loathe and whom we view as similar to X?”
  5. Conversely, a policy of “we don’t police our customers”—buttressed by social norms that don’t require (or even affirmatively condemn) such policing—offers the company a simple response to all such demands.
  6. Policing customers creates tension even with customers who aren’t violating the company’s rules—people often don’t like even the prospect that some business is judging what they say, how they dress, or whom they associate with.
  7. Policing customers gives an edge to competitors who can sell their services as “our only job is to serve you, not to judge you or eject you.”

Imposing legal responsibility on such companies can therefore encourage them to exercise power even when they otherwise wouldn’t have. And that is in some measure so even if responsibility is accepted as a broad moral norm, enforced by public pressure, not just a legal norm. That norm would increase the countervailing costs of non-policing. And it would decrease the costs of policing: For instance, the norm and the corresponding pressure will likely act on all major competitors, so the normal competitive pressures encouraging a “the customer is always right” attitude will be sharply reduced.

Likewise, when people fault a company for errors or perceived discrimination, the company can use the norm as cover, for instance arguing that “regrettably, errors will happen, especially when one has to do policing at scale.” “After all, you’ve told us you want us to police, don’t you?”

Accepting such norms of responsibility can also change the culture and organization of the companies. It would habituate the companies to exercising such power. It would create bureaucracies within the companies staffed with people whose jobs rely on exercising the power—and which might be looking for more reasons to exercise that power.

And by making policing part of the companies’ official mission, it would subtly encourage employees to make sure that the policing is done effectively and comprehensively, and not just at the minimum that laws or existing social norms command. Modest initial policing missions, based on claims of responsibility for a narrow range of misuse, can thus creep into much more comprehensive use of such powers.

* * *

So far, there has been something of a constraint on calls for business “responsibility” for the actions of their customers: Such calls have generally involved ongoing business-customer relationships, for instance when Facebook can monitor what its users are posting (or at least respond to other users’ complaints).

Occasionally, there have been calls for businesses to simply not deal with certain people at the outset—consider Castaneda v. Olsher, where plaintiffs argued that defendants just shouldn’t have rented the mobile homes to likely gang members. But those have been rare. Few people, for instance, would think of arguing that car dealers should refuse to sell cars to suspected gang members who might use the cars for drive-by shootings or for crime getaways.[5] Presumably most people would agree that even gang members are entitled to buy and use cars in the many lawful ways that cars can be used, and that car dealers shouldn’t try to deny gang members access to cars. (If the legislature wants to impose such responsibilities, for instance by banning sales of guns to felons or of spray paint to minors, then presumably the legislature should create such narrow and clearly defined rules, which rely on objective criteria that don’t require seller judgment about which customers merely seem likely to be dangerous.)

But now more and more products involve constant interaction between the customer and the seller. Say, for instance, that I’m driving a self-driving Tesla that is in constant contact with the company. Recall how Airbnb refused to rent to people who it suspected were coming to Charlotteville for the “Unite the Right” rally.[6] If that is seen as proper—and indeed as mandated by corporate social responsibility principles—then one can imagine similar pressure on Tesla to stop Teslas from driving to the rally (or at least to stop such trips by Teslas of those people suspected of planning to participate in the rally).

To be sure, this might arouse some hostility, because it’s my car, not Tesla’s. But of course Airbnb was refusing to arrange bookings for other people’s properties, not its own. Its rationale was that it had a responsibility to stop its service from being used to promote a racist, violent event. But why wouldn’t Tesla then have a responsibility to stop its intellectual property and its computers (assuming they are in constant touch with my car) from being used the same way? To be sure, Tesla’s sale contract might be seen as implicitly assuring that its software will always try to get me to my destination. But that is just a matter of the contract—if companies are seen as responsible for the misuse of their services, why wouldn’t they have an obligation to draft contracts that allow them to fulfill that responsibility?

Now maybe some line might be drawn here: Perhaps, for instance, we might have a special rule for services that are ancillary to the sale of goods (Tesla, yes, Airbnb, no), under which the transfer of the goods carries with it the legal or moral obligation to keep providing the services even when one thinks the goods are likely to be used in illegal or immoral ways. (Though what if I lease my Tesla rather than buying it outright?) Or at least we might say there’s nothing irresponsible about a product seller refusing to police customers’ continuing use of the services that make those products work.

But that would just be a special case of the broader approach that I’m suggesting here: For at least some kinds of commercial relationships, a business should not be held responsible for what its customers do—because we don’t want it exercising power over its customers’ actions.

* * *

[Again, this is of course just a sketch of what concerns me here. I’ll be elaborating on this, and also discussing areas where businesses are indeed held responsible for the actions of others—certainly of their employees but also, sometimes, of tenants and other customers.[7] I’ll also discuss how responsibility to prevent crime on one’s property has led to pressure to institute more surveillance, for instance with many courts recognizing a duty to install cameras on commercial property. I’d love to hear any suggestions or reactions you folks might have, since I still have plenty of time to work on this.]

[1] Commonwealth v. Western Union Tel. Co., 67 S.W. 59, 60 (Ky. 1901); see also Pa. Publications v. Pa. Pub. Util. Comm’n, 36 A.2d 777, 781 (Pa. 1944) (cleaned up); People v. Brophy, 120 P.2d 946, 956 (Cal. App. 1942).

[2] The case turned on conduct that happened before the enactment of 47 U.S.C. § 230, which provided such immunity by statute. The court therefore addressed whether a libel claim was available in the first place, thus avoiding the need to determine whether § 230 was retroactive.

[3] Lunney v. Prodigy Servs. Co., 723 N.E.2d 539, 542 (N.Y. 1999).

[4] 162 P.3d 610 (Cal. 2007). On this point, the Justices were unanimous.

[5] But see Andrew Jay McClurg, The Tortious Marketing of Handguns: Strict Liability Is Dead, Long Live Negligence, 19 Seton Hall Legis. J. 777, 816 n.178 (1995) (quoting a proposal that gun sellers must, on pain of liability for negligence, “be especially alert to, and wary of, gun buyers who display certain behavioral characteristics such as … appear[ing] in unkempt clothing and hav[ing] a slovenly appearance”).

[6] https://ift.tt/mSMA0FQI1

[7] Cf. Morris v. Giant Four Corners, Inc., 498 P.3d 238 (N.M. 2021) (a rare case holding a gas station liable for selling gas to a drunk driver). Many courts reject such negligent entrustment claims when someone is selling goods, as opposed to merely lending them or renting them out.

The post The Reverse Spiderman Principle: With Great Responsibility Comes Great Power appeared first on Reason.com.

from Latest – Reason.com https://ift.tt/u9g0ICZhl
via IFTTT

US Futures Start The Week With More Wild Swing In Another Volatile, Illiquid Session

US Futures Start The Week With More Wild Swing In Another Volatile, Illiquid Session

After a rollercoaster week that ended just barely higher following a late meltup on Friday, overnight volatile US stock futures swung to start the week, with Nasdaq 100 futures leading gains after rallying on Friday, before turning red and threatening to fizzle a global equity rally amid persistent worries over the Federal Reserve’s plan to hike interest rates this year. Emini S&P futures were down 0.5% or 21 points to 4401, after rising as high as 4437 and dropping as low as 4395 in another extremely illiquid session where China being offline for the week due to Lunar New Year did not help; Nasdaq futures were down 0.1% while Dow futures were lower 0.7%. Technology stocks led gains on the Stoxx Europe 600. Meanwhile, the dollar fell and oil rallied.

As investors reconcile to a hawkish U.S. central bank coupled with strong earnings, the expensive parts of the U.S. stock market are undergoing a valuation re-rating along with the bond markets. However, traders do see opportunities in less expensive segments of the global markets, such as European and emerging-market stocks (especially China), as well as higher-yielding currencies where rate hikes have already happened. The only thing money managers are certain about for the year is greater volatility.

The equity selloff “marks a long overdue correction rather than the start of a bear market,” BCA Research Inc. analysts including Peter Berezin and Melanie Kermadjian wrote in a note. “Stocks often suffer a period of indigestion when bond yields rise suddenly, but usually bounce back as long as yields do not move into economically restrictive territory.”

“The sharp fall in many high-quality tech firms is already creating opportunities for longer-term investors to add exposure,” Mark Haefele, the ever bullish chief investment officer at UBS Global Wealth Management, wrote in a note. “Rather than giving up on tech in the face of near-term headwinds, we recommend a more selective approach.”

In premarket trading, major technology and internet names such as Netflix Inc. and Tesla Inc. rose, with the electric carmaker getting an upgrade to outperform at Credit Suisse. Citi raised its recommendation on Netflix (NFLX US) and Spotify (SPOT US) to buy from neutral after pressure on subscription-based stocks. Netflix rises 2.7% in premarket, Spotify +1.8%. Citrix fell 3.7% in early New York trading. Elliott Investment Management and Vista Equity Partners are said to be nearing an agreement to acquire software-maker for about $13 billion, marginally less than the company’s current market cap. Other notable pre-market movers:

  • Tesla (TSLA US) gains 2.4% in premarket trading after Credit Suisse upgrades the electric- vehicle maker to outperform following a sharp pullback and on “highly favorable” fundamentals.
  • Beyond Meat (BYND US) growth prospects in the U.S. foodservice channel and international segments aren’t properly reflected in the shares, according to Barclays, which upgrades to overweight from underweight. Shares +4.4% in premarket.
  • Alibaba (BABA US) and other Chinese tech firms were in focus as traders interpreted comments by China’s cyberspace regulator as positive toward the sector. Alibaba up 1.5% in premarket.
  • Pullback in Intuitive Surgical (ISRG US) shares creates a good entry point into a premier medtech name which has executed strongly during the pandemic, Piper Sandler writes in note as upgrades to overweight. Shares up 0.6% in premarket.

Meanwhile, the stellar run of profitability in US companies continues this quarter. Of the 169 S&P 500 companies that have posted results so far, 81% have met or exceeded expectations. Profits have come about 5% more than the levels predicted. Companies from Alphabet to Exxon report financial results this week in the U.S., while the European earnings calendar is also full, with the likes of UBS Group AG and Roche Holding AG publishing their figures (more in our weekly preview post).

As Bloomberg notes, healthy earnings may cushion the impact of a technology-led selloff in the U.S. as investors adjust to a higher interest-rate regime. That may also help to alleviate some of the concerns sparked by geopolitical tensions between the U.S. and Russia over Ukraine.

European equities were well bid, with the Stoxx 600 gauge advancing for a fourth time in five days and an index of global equities pared its biggest monthly drop since March 2020.  Euro Stoxx 50 rises as much as 1.6%, close to recouping last week’s losses, before drifting off best levels. Germany and Italy lead gains. Tech is the best performing Stoxx 600 sector, miners and travel underperform. Here are some of the biggest European movers today:

  • Electrolux shares rise as much as 6%, the most since July 2020 and the biggest gainer on the Stockholm large-cap OMXS30 index, after several brokers upgraded the shares or their target prices. Handelsbanken upgrades to buy, citing “pricing power hiding in plain sight.”
  • Vodafone shares rise as much as 4.5% after a Bloomberg report that activist investor Cevian Capital has built a stake in the firm. It highlights material “hidden value” in the U.K. telecoms operator, according to Andrew Lee, analyst at Goldman Sachs (buy).
  • Adva Optical Networking shares rise as much as 16%, the most intraday since August, after the approval threshold for Adtran Inc.’s voluntary offer was crossed at the end of the initial acceptance period on Jan. 26.
  • Aumann shares rise as much as 9% after the company reported margin guidance which Citi sees as positive indicator for ’22 profitability.
  • KPN shares rise as much as 2.7% to their highest level since March 2021 after results. Analysts are positive on the company’s buyback plans, while KBC said KPN’s results are “comforting.” KPN forecast adjusted Ebitda after leases for 2022 of about EU2.40 billion.
  • Saipem shares fall as much as 29% in Milan, the most intraday since 2013, after the Italian oil drilling specialist issued a warning on 2021 earnings and said it would hold discussions with creditors and shareholders for a financing package.

Monetary-policy decisions from the European Central Bank and Bank of England will help shape the market mood in the days ahead, while investors continue to watch for evidence of economic recovery from the pandemic effects. China’s economy continued to slow at the start of the year as manufacturing and services moderated.

Earlier in the session, equities in Asia Pacific climbed in a quiet trading day, paring a portion of their worst monthly decline since July amid continued investor concerns about the pace of tightening by the U.S. Federal Reserve. The MSCI Asia Pacific Index gained as much as 0.8%, reversing an early loss of 0.4%, as consumer discretionary and communication services shares climbed. Alibaba and Tencent were among the biggest contributors to gains as the Hang Seng Tech Index closed up 2.4%. Asian tech stocks followed their U.S. peers higher after bellwethers including Apple and Microsoft announced strong quarterly results and outlooks. Benchmarks in Japan, India and Hong Kong rose, with the latter in a shortened trading session at the start of Lunar New Year holidays. Markets in China, South Korea and Taiwan were closed. The Asian benchmark is on track for a decline of about 4.7% in January, as more traders price in five interest-rate hikes this year and after Raphael Bostic, president of the Fed’s Atlanta branch, told the Financial Times that a 50 basis-point rate increase is on the table. This comes while China’s economy continued to slow at the start of the year. “Powell’s current inflation-fighting mode makes it more likely that a new policy error will occur,” Citi Private Bank strategists led by David Bailin wrote in a note. Citi has increased its overweight on China on preparations for “greater macro easing and growth support,” they wrote

In rates, Treasury yields advanced while the curve flattened as bond markets braced for successive rate hikes by Fed starting March. Yields were cheaper by more than 3bp across front-end of the curve, flattening 2s10s spread by ~2bp on the day; 10-year yields around 1.79%, cheaper by more than 2bps vs Friday’s close with bunds lagging by additional 3bp.Treasuries remain cheaper across the curve after an opening gap higher in yields led by front-end, focused on expected path of Fed rate hikes this year. Long-end may draw support from month-end flows. US outperformed bunds, gilts and most euro-zone bond markets. S&P 500 futures are under slight pressure, near Friday’s high. Bund and gilt curves bear flatten with short-end Germany underperforming. Peripheral spreads tighten on the better risk on mood. Italy snaps tighter on the open as political uncertainties ease following Sergio Mattarella’s re-election as president over the weekend.

In FX, the Bloomberg Dollar Spot Index fell as the greenback weakened against all of its Group-of-10 peers apart from the Swiss franc and the yen. The Australian dollar led G-10 gains and rebounded from an 18-month low against the greenback as traders and local exporters hedged for a hawkish tilt from the nation’s central bank on Tuesday. Month-end flows were also supporting the currency. The euro crept higher, nearing $1.12, and Bunds sold off, led by the belly and underperforming Treasuries, while the yield premium to hold Italian government bonds over German securities narrowed. The pound rallied amid a broad risk-on tone in global currency trading, with U.K. focus on this week’s BOE meeting. Asset managers added to short bets against the currency for the first time in six weeks, according to Commodity Futures Trading Commission data for the week ended Jan. 25. Figures also showed leveraged funds added long contracts to become the most bullish since early November. Norway’s krone rallied amid supportive oil prices while it shrugged off the news that Norges Bank won’t conduct any foreign exchange transactions on behalf of the government in February. The central bank sold foreign exchange equivalent to NOK250m a day in January. Japan’s 10-year benchmark yield rose to a six-year high following the recent surge in Treasury equivalents. TRY leads gains in EMFX, strengthening just shy of 2% against the dollar before fading near 13.40/USD.

Crypto markets are subdued with Bitcoin slipping back beneath the 37,000 level overnight. BoE’s executive director for financial stability said cryptocurrency does not yet pose a risk to UK’s financial stability, according to The Times.

In commodities, crude futures are in the green but drift off Asia’s highs. WTI slips after a brief retest of $88 in late Asia; Brent tops $91. Oil markets headed for the biggest January gain in at least 30 years. Spot gold is range bound near $1,789/oz. Most base metals trade well with much of the complex up 0.6-0.8%. LME aluminum lags. 

Looking at today’s calendar, it’s a relatively quiet day, with Euro Area Q4 GDP, Italy Q4 GDP, Germany preliminary January CPI, US January MNI Chicago PMI, Dallas Fed manufacturing index, and Japan’s December jobless rate. The Fed’s Daly speaks. Looking at the week ahead, earnings are due from Alphabet, Amazon, Exxon Mobil, Ford Motor, Meta Platforms, Qualcomm, Sony, Spotify, UBS Group. Tomorrow we get the Reserve Bank of Australia rate decision, Manufacturing PMIs, including euro zone; OPEC+ meeting on output is on  Wednesday as is the latest Euro zone CPI. On Thursday, the Bank of England, European Central Bank rate decisions; also we get the Fed Board of Governors confirmation hearing and the U.S. factory orders, initial jobless claims, durable goods. Finally, on Friday, we get the payrolls report for January, while in China, winter Olympics kick off with Russia’s President Vladimir Putin due to attend opening ceremony.

Market Snapshot

  • S&P 500 futures up 0.2% to 4,431.50
  • STOXX Europe 600 up 1.0% to 470.31
  • German 10Y yield little changed at -0.03%
  • Euro up 0.2% to $1.1170
  • Brent Futures up 0.7% to $90.62/bbl
  • MXAP up 0.7% to 184.12
  • MXAPJ up 0.7% to 602.30
  • Nikkei up 1.1% to 27,001.98
  • Topix up 1.0% to 1,895.93
  • Hang Seng Index up 1.1% to 23,802.26
  • Shanghai Composite down 1.0% to 3,361.44
  • Sensex up 1.4% to 58,004.69
  • Australia S&P/ASX 200 down 0.2% to 6,971.63
  • Kospi up 1.9% to 2,663.34
  • Brent Futures up 0.7% to $90.62/bbl
  • Gold spot down 0.1% to $1,790.58
  • U.S. Dollar Index down 0.22% to 97.05

Top Overnight News from Bloomberg

  • U.S. senators are close to agreeing on a Russia sanctions bill that could include penalties even if President Vladimir Putin doesn’t send troops into Ukraine, Foreign Relations Committee Chair Bob Menendez said
  • Moscow further boosted troop levels around the Ukrainian border at the weekend, adding to President Vladimir Putin’s options should he decide on a military incursion, the Pentagon said.
  • The Federal Reserve could opt to raise its benchmark rate by 50 basis points if a more aggressive approach to taming inflation is needed, Raphael Bostic, president of the Fed’s Atlanta branch, told the Financial Times in an interview
  • The Federal Reserve’s shift toward a major reduction of its footprint in the U.S. bond market this year has upended expectations for sustained cutbacks to the Treasury’s quarterly sales of longer-term debt — forcing dealers to gird for bigger auction sizes down the road
  • The Reserve Bank of Australia is expected to announce the end of its bond purchases at its policy decision, setting the stage for an interest-rate hike in the third quarter
  • BOE policy makers led by Governor Andrew Bailey are expected to hike interest rates to 0.5% on Thursday, according to a survey of economists by Bloomberg. That would complete the first back-to-back increase since 2004 and open the question of whether more increases will follow
  • The ECB’s go-slow approach to monetary policy tightening is putting a wall around local bond markets against the global turmoil sparked by its U.S. counterpart
  • China’s official manufacturing PMI declined to 50.1, the National Bureau of Statistics said Sunday, just above the median estimate of 50. The non-manufacturing gauge, which measures activity in the construction and services sectors, fell to 51.1, also marginally above the consensus forecast. The 50-mark separates expansion from contraction
  • Investors are plowing money into hedge funds that don’t rely on the next macro genius or star stockpicker, but instead offer an army of traders who invest in an array of strategies. These behemoths secured pretty much all of the new money in the hedge fund industry last year, cementing a tectonic shift that’s accelerated since the pandemic
  • Sales of bonds with sustainable targets have jumped sevenfold in Europe this month, competing with green debt to become the dominant force in the ethical market.

A more detailed look at global markets courtesy of Newsquawk

Asian stocks were mostly positive but with conditions thinned due to closures on Chinese New Year’s Eve. ASX 200 (-0.2%) was subdued with mining names pressured by lower metal prices and weaker output updates. Nikkei 225 (+1.1%) reclaimed the 27,000 level with the index underpinned by a weaker currency. Hang Seng (+1.1%) finished the shortened trading day higher with the index unfazed by mixed Chinese PMI data, while there was also an absence of Stock Connect flows with participants in the mainland away for the Lunar New Year.

Top Asian News

  • Asian Stocks Climb With Tech Sector to Trim January Tumble
  • Sri Lanka’s Inflation Accelerates to Asia’s Fastest on FX Crunch
  • Sri Lanka Jan. Consumer Prices Rise 14.2% Y/y, Est. +13.2%
  • JPMorgan Strategists See Better Risk-Reward for China and EM

European bourse kicked off the week with gains across the board before momentum waned (Euro Stoxx 50 +0.4%; Stoxx 600 +0.6%). European sectors have reconfigured to a more defensive bias since the European cash open; Tech outperforms and Basic Resource lag. US equity futures have eased off best levels to conform to a mostly downward bias; NQ (+0.5%) remains the outperformer.

Top European News

  • U.K. Homebuilders ‘Deeply Undervalued,’ Have Spare Cash: HSBC
  • Virgin Media O2 Said to Open Fiber Joint Venture Funding Talks
  • Deliveroo Rises; Arete Cites Takeover Potential for Upgrade
  • Orban Says Top EU Court Will Likely Reject Rule-of-Law Challenge

In FX, the dollar drifts along with other safe haven currencies as risk appetite improves into month end, but rebalancing flows should help the Buck find a base. Aussie regains composure in time for RBA policy meeting and manufacturing PMIs, while Kiwi tags along in slipstream amidst calls for the RBNZ to lift OCR to 2.5% by November. Pound holds firm pending Gray report and Partygate statement from PM Johnson. Euro regroups as Italian President Matarella agrees to serve second term and Portuguese PM Costa wins snap election unexpectedly. Turkish President Erdogan said they will lower interest rates and that inflation will fall too, while he also commented that problems which stem from a volatile FX rate and inflation are temporary, according to Reuters.

In commodities, WTI Mar’ and Brent Apr’ have been somewhat choppy with eyes on Russia and the upcoming OPEC+ meeting; NatGas holds onto overnight gains. Spot gold trades sideways below USD 1,800/oz ahead of a risk-packed week. LME copper meanwhile has seen a mild rebound from the USD 9,500/t with the red metal lacklustre overnight amid the absence of Chinese participants ahead of the Lunar New Year. German Nord Stream 2 approval is not expected during H1 this year, according to FAZ. IEA said Chinese gas demand growth forecast is to slow to 8% this year from 12% growth in 2021, while European gas demand forecast is to fall by 4.5% this year on higher coal consumption in the power sector, according to Reuters.

US Event Calendar

  • 9:45am: Jan. MNI Chicago PMI, est. 61.8, prior 63.1, revised 64.3
  • 10:30am: Jan. Dallas Fed Manf. Activity, est. 8.5, prior 8.1
  • 11:30am: Fed’s Daly Speaks at Reuters Live Event

DB’s Jim Reid concludes the overnight wrap

It’s deja-vu all over again. I’m having yet more knee surgery today and will spend another 6 weeks on crutches with no weight bearing. Ironically I tore a hole in the cartilage while rehabbing the other knee. The fact that I can’t do squats and lunges without tearing my cartilage probably tells you the direction of travel for my knees. My surgeon wants to delay knee replacements as long as possible but I’ll be there eventually. Safe to say I’m unlikely to play tennis, squash, cricket and football etc, ever again. My opponents might suggest I didn’t really play them in the first place. So I exist to get my body back on the golf course asap.

Talking of football, if last week was a match it would have been one of the most exciting 0-0 draws in history. On the face of it, future historians might conclude that it must have been one of the dullest weeks in the NASDAQ’s history given that we closed the week +0.01% higher than the previous Friday, the fifth smallest % weekly move in the history of the index once we get down to the decimals. However beneath the surface there was extraordinary volatility as every day saw swings between 2.75% and 6%. Friday was seeing a recovery anyway but in the last 90 minutes the S&P 500 climbed c.2% and the NASDAQ over 2.5%. The S&P also ended the week higher (+0.77%), and saw the first positive week of the year. Until the market and the Fed stop leapfrogging each other in terms of interest rate expectations, the market will stay volatile. With such an extreme month, today’s month-end might see some position squaring so maybe there’ll be another late swing/surge/slump in the last 90 minutes.

Outside of stocktaking after a hectic month, what will this week hold in store for us? Well at least the Fed is out the way for now but central banks will continue to dominate the agenda as we move into February, with both the ECB and the Bank of England set to make their latest policy decisions on Thursday. Otherwise, there’ll be plenty of data to digest, including the all-important US jobs report on Friday, the final global PMIs tomorrow (manufacturing) and Thursday (services) and in the Euro Area there’s also the flash CPI reading for January (Wednesday) and the first look at GDP growth in Q4 (today). Earnings season will continue in full flow, with an additional 111 companies in the S&P 500 reporting, including Amazon (Thursday), Alphabet and Meta (both Wednesday). 56 report in the Stoxx 600.

China’s manufacturing PMI dipped to 50.1 on release yesterday, just above the 50 expected. The non-manufacturing slipped to 51.1, also marginally above consensus. Asian stock markets are trading higher this morning amid thin trading with markets in China and South Korea closed for the Lunar New Year holiday. The Nikkei (+1.39%) is up, erasing its opening losses while the Hang Seng (+1.07%) is also in positive territory.

In economic news, Japan’s factory output shrank (-1.0% m/m) in December, its first contraction in three months and weaker than market expectations of a -0.6% drop. It followed a +7.0% increase in November. Separately, retail sales (-1.0% m/m) in December unexpectedly declined (+0.3% expected) after witnessing an upwardly revised +1.3% gain in the previous month.

Moving ahead, stock futures in the US are edging up with contracts on the S&P 500 (+0.28%), Nasdaq (+0.44%) and Dow Jones (+0.23%) all higher as we type. US 2s10s is 2bps flatter again at 58.3bps as the 2yr note has climbed just over 3bps this morning. At one point this morning we priced 5 Fed hikes for the first time although this has settled to around 4.93 as I type.

Going through some of the main events this week in more details now. Starting with the ECB, our economists updated their call (link here) at the start of last week and are now expecting a policy rate liftoff in December 2022 of 25bps. They’re also anticipating a faster pace of tightening, with 25bp hikes in the deposit rate per quarter from December 2022, until rates reach +0.5% in September 2023. In terms of what it means for this February meeting, they write in their preview (link here) that they expect the slow, step-by-step pivot to exit will continue. Their view is that President Lagarde will reiterate the ECB’s capacity to act once the inflation criteria in the rates guidance are met, whilst at the same time differentiating the needs of the Euro Area from the US.

The other central bank decision that day is from the Bank of England, and our economist writes in his preview (link here) that he expects the BoE to follow up their December rate hike with another 25bps increase, taking the Bank Rate to 0.5%. Furthermore, he expects that the MPC should confirm that any APF reinvestments will cease from here on out, resulting in around £38bn falling out of the Bank’s balance sheet this year.

The data highlight in a busy week will be payrolls Friday. Our US economists are expecting nonfarm payrolls to have grown by a relatively subdued +150k in January (in line with consensus), with the unemployment rate remaining at a post-pandemic low of 3.9%. Clearly Omicron will impact this data, so it’ll be tough to get a clear read though but Fed Chair Powell has already said that his personal view is that labour market conditions were consistent with maximum employment, “in the sense of the highest level of employment that is consistent with price stability.” The JOLTS report tomorrow will also be a good indicator of the tightness of the labour market and one we’ve preferred to payrolls as a lead indicator during the pandemic.

Otherwise, Wednesday’s flash CPI reading from the Euro Area for January will be interesting. Our economists expect that year-on-year inflation will subside to +4.3% from its peak of +5.0% in December, which was also the fastest pace since the formation of the single currency.

On the earnings side, we’ll get an array of reports this week as the season continues in full flow, including 111 companies from the S&P 500 and a further 56 in the STOXX 600. Among the highlights: ExxonMobil, PayPal, UPS, Starbucks, General Motors and UBS tomorrow. Then on Wednesday we’ll hear from Alphabet, Meta, AbbVie, Novo Nordisk, Thermo Fisher Scientific, Novartis, Qualcomm, T-Mobile US, Santander, Sony and Spotify. On Thursday, releases include Amazon, Roche, Eli Lilly, Merck & Co., Shell, Honeywell and Ford. Finally on Friday, there’s reports from Bristol Myers Squibb, Sanofi and Aon.

Finally, there’ll be a continued focus on the trajectory of oil prices over the week ahead, particularly with the OPEC+ group meeting on Wednesday to discuss a March production increase. With inflation running at multi-decade highs in numerous countries and Brent Crude having surpassed $90/bbl at points in trading over the week just gone for the first time since 2014, oil prices are likely to remain a significant issue for policymakers over the coming months. For YoY comparisons, Oil was around $55 this time last year.

Turning back on the week that was now. The Fed kept policy unchanged at its meeting, but signaled liftoff was live in March. A common refrain from the Chair was that this cycle was very different – above-trend growth, inflation well-above target, and an historically-tight labour market that now allow and call for a much faster pace of tightening. The market took the signal, ending the week pricing a 119% chance of a 25bp rate hike at March, or a meaningful probability of a 50bp hike. The total amount of 25bp hikes through 2022 also increased, to 4.7 hikes from around 4 at the start of the week. This squares with our US econ team’s updated call of five hikes this year following the meeting (link here) .

In response, 2yr treasury yields increased +16.1bps last week (-2.6bps Friday), as investors priced in a steeper hiking cycle. The prospect of a Fed-induced slowdown along with bubbling geopolitical tensions ensured that 10yr yields didn’t follow and were only slightly higher (+1.1bps) over the week (-3.0bps Friday), driving the 2s10s yield curve to its flattest level in more than a year at +60.3bps but nearly 100bps flatter in 10 months.

German yields were more subdued, with 10yr bunds +2.0bps (+1.4bps Friday) and the 2yr tenor +1.3bps higher on the week (+0.5bps Friday). Gilts, meanwhile, sold off a bit more, with the 10yr +7.3bps higher this week (+1.5bp Friday).

In equities, as has been a habit this year, the S&P 500 made an about-face late in the US session on Friday, finishing the day +2.43% higher, driving the index to its first positive weekly performance (+0.77%) of the year. Unsurprisingly, the Vix index of volatility closed the week still near its highest levels over the last year at 27.66pts. The NASDAQ also benefitted from the late Friday rally, increasing +3.13% on the day, making the index broadly unchanged (+0.01%) after whipsawing all week. Last week brought releases from a few US mega-cap companies. Tesla warned about production constraints through the rest of 2022, which sent its shares -10.37% lower on the week (+2.04% Friday), to their lowest levels since October. Meanwhile, Apple posted its biggest quarterly revenues ever, even with broader supply chain issues, leaving the stock +4.88% higher on the week (+6.98% Friday).

European stocks fared worse, perhaps due to their closer proximity to simmering geopolitical tensions. The STOXX 600 was -1.87% lower (-1.02% Friday), the DAX declined -1.83% (-1.32% Friday), while the CAC fell -1.45% (-0.82% Friday).

The geopolitical tensions out of eastern Europe also helped drive oil prices higher, as Russia is one of the world’s largest exporters. Crude ended the week +3.02% higher (+1.34% Friday), closing above $90/bbl for the first time since 2014, while WTI increased +2.53% this week (+0.79% Friday) to $87.29/bbl. Even more directly impacted, European natural gas futures gained +16.9% this week (-0.01% Friday).

Finally in data, the US employment cost index, which has been specifically flagged by Chair Powell, increased +1.0% versus expectations of +1.2% in the fourth quarter, while University of Michigan sentiment data declined to 67.2, slightly below expectations.

 

 

d

Tyler Durden
Mon, 01/31/2022 – 08:03

via ZeroHedge News https://ift.tt/njYkSmatz Tyler Durden

San Jose’s Insurance Requirement Is Privatized Gun Control


maria-lysenko-XWC5q9_Xp0o-unsplash

Deputizing private parties to restrict liberty has become popular among politicians constrained by constitutional protections for individual rights. They get to target personal freedom without explicitly restricting anything, like a bratty kid waving his hands around a sibling’s face while chanting “I’m not touching you!” The latest such example is the San Jose, California, city government, which insists that it is “constitutionally compliant” in requiring gun owners to purchase liability insurance and to pay an “annual gun harm reduction fee” to exercise a right specifically protected by the Second Amendment.

“Tonight San José became the first city in the United States to enact an ordinance to require gun owners to purchase liability insurance, and to invest funds generated from fees paid by gun owners into evidence-based initiatives to reduce gun violence and gun harm,” San Jose Mayor Sam Liccardo boasted in a January 25 statement. “Thank you to my council colleagues who continue to show their commitment to reducing gun violence and its devastation in our community. I am deeply grateful also to our advocacy and legal partners with Cotchett, Pitre & McCarthy, LLP, EveryTown, Moms Demand Action, SAFE, the Gifford Law Alliance and many others who work tirelessly to help us craft a constitutionally compliant path to mitigate the unnecessary suffering from gun harm in our community. I look forward to supporting the efforts of others to replicate these initiatives across the nation.”

There’s a lot to unravel in that smug statement, including the assumption that firearms ownership imposes costs and not benefits, as well as the assertion that requiring people to carry liability insurance and pay fees to the government in order to exercise a right specifically enumerated in the Second Amendment is somehow constitutionally compliant. None of what Liccardo says is well-grounded in reality. But he’s especially sensitive to the idea that imposing costs on gun owners is an example of government overreach.

“This isn’t actually governmental regulation,” Liccardo insisted to NPR last week. “This is private sector regulation. This is insurance companies. Insurance companies have been regulating safety of automobiles for five decades, and as a result, we all have seen per mile deaths drop dramatically over the last five decades because we have air bags and anti-lock brakes and so forth that insurance companies incentivize drivers to go buy.”

That’s a common comparison for gun prohibitionists and it doesn’t improve with repetition. For starters “the right to bear arms” enjoys specific constitutional protections, unlike car ownership. Then there’s the fact that, like many places, California doesn’t require insurance and registration for vehicles used only on private property or transported by trailer. If the Second Amendment didn’t protect gun ownership, that might make car insurance and fee requirements comparable to burdens on people carrying concealed weapons, but not to those placed on people keeping guns in their homes and taking them to a range.

Even worse is that automobile regulation is an unfortunate example of how burdensome restrictions can become on activities that don’t enjoy specific protection. From tags and taxes we’ve moved on to inspections and fuel-economy requirements, and now politicians propose mandating interlock technology that prevents vehicles from starting if built-in sensors detect alcohol in our bodies. This isn’t a path to follow, it’s a warning of what might be in store.

That’s especially true when politicians coyly deputize private parties to impose restrictions that they are prevented from putting into law. The San Jose city government’s restrictionist agenda is obvious from the list of gun control organizations Liccardo thanks in his press release. The clear assumption is that imposing fees and insurance requirements will create new barriers to owning firearms. Insurance companies may be on-board with that mission, or the heavily regulated industry may just succumb to government pressure to cooperate. This wouldn’t be the first time the private sector has been put in that role.

“I am directing the Department of Financial Services to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities who often look to them for guidance and support,” then-New York Gov. Andrew Cuomo urged in a 2018 statement.

“The NRA alleges that Cuomo and top members of his administration abused their regulatory authority over financial institutions to threaten New York banks and insurers that associate with the NRA or other ‘gun promotion’ groups, and that those threats have jeopardized the NRA’s access to basic insurance and banking services in New York,” the ACLU responded. “In the ACLU’s view, targeting a nonprofit advocacy group and seeking to deny it financial services because it promotes a lawful activity (the use of guns) violates the First Amendment.”

Leaning on the private sector to lean on people you don’t like because politicians aren’t allowed to lean on them directly is “constitutionally compliant” only in a brat’s “I’m not touching you” sense. It’s an end-run around legal protections for the exercise of individual rights.

The problems with requiring people to pay fees and carry insurance to exercise their rights might be more obvious if the San Jose city government had imposed its rules on journalists and bloggers. Liability insurance and annual fees would be obvious infringements of First Amendment rights if smugly imposed as an effort to offset the supposed harms caused by alleged disinformation and misinformation. Then again, Liccardo and company might consider that a clever idea after all.

“In a new trend, many governments have sought to shift the burden of censorship to private companies and individuals by pressing them to remove content, often resorting to direct blocking only when those measures fail,” Freedom House warned in 2015. “Local companies are especially vulnerable to the whims of law enforcement agencies and a recent proliferation of repressive laws. But large, international companies like Google, Facebook, and Twitter have faced similar demands due to their significant popularity and reach.”

Since then, privatized authoritarianism has only proliferated. We now commonly see demands that companies boot disfavored speakers coming from sources as highly placed as the White House. Politicians who think it’s fine to conscript private businesses into muzzling their opponents were never going to balk at drafting those same firms into helping them to disarm the public. Rather than submit, people who care about liberty need to exercise it in defiance of out-sourced efforts at control.

The post San Jose's Insurance Requirement Is Privatized Gun Control appeared first on Reason.com.

from Latest – Reason.com https://ift.tt/SWz5nFUAt
via IFTTT