Month: April 2022

Trump Was Right: Putin’s Gas Strategy Gives Germany Only Bad & Worse Choices

Trump Was Right: Putin’s Gas Strategy Gives Germany Only Bad & Worse Choices

Remember this?

Trump claimed, during a testy breakfast meeting in 2018 with NATO’s Stoltenberg, that Germany’s dependence for its energy needs made it “totally controlled” by and “captive to Russia.”

It turns out – much to the chagrin of everyone who mock-horrored at the time – that Trump was right and as Bloomberg’s Javier Blas explains in detail below, Germany faces only bad, or worse, choices as Putin’s gas strategy becomes clear…

Chancellor Olaf Scholz must either pay for Russian gas on Vladimir Putin’s terms or face the painful economic fallout of a cutoff.

In 2018, German government officials war-gamed  a massive natural-gas shortage. With the real thing looming, the lessons are sobering. Some hospitals, nursing homes and jails were forced to close; companies shut; livestock was left to die; hundreds of thousands of jobs vanished; rationing for households was imposed, according to the official account of the crisis-management exercise.

In just a few weeks, Germany will face the same dilemma that Poland and Bulgaria encountered a few days ago: pay for Russian gas on Vladimir Putin’s terms, effectively breaching European sanctions, or see the Kremlin close the valves.

Going “cold turkey” on Russian gas sounds like a brilliant political slogan, but the reality is untold economic damage for Germany. Let’s not sugarcoat it: The recession will be brutal. Reading the lessons of 2018 and talking to those who participated in it, I would not want to be in Chancellor Olaf Scholz’s shoes.

Falling short on the battlefield, Putin is still playing a brilliant hand in the energy market, exploiting the weaknesses of years of myopic European policy. Right now, Germany only has bad options – and worse options.

Both Berlin and Moscow are wielding the gas weapon – just at different speeds. Germany intends to stop buying Russian gas over time, perhaps by 2024, and in the meantime find extra supplies and build infrastructure to import liquefied natural gas from the U.S. and the Middle East. Russia is doing the opposite: wielding the weapon now.

By now, Putin has essentially written off its gas business with Germany. Either in four weeks or in 24 months, Russia knows that it will not sell energy to Berlin. So the Kremlin is forcing Scholz into some painful choices, with Putin turning some of the economic weapons deployed against his regime on his favor.

The Kremlin has told its European gas customers that if they want to continue receiving Russian gas, they have to pay for it via an account at Gazprombank, a state-controlled lender. The payment involves a two-step process with two accounts, one in euros, and one in rubles. The first step is a payment in euros; the second is its conversion into rubles for the client’s account. Only after that conversion, which technically touches the Russian central bank, is completed, the payment is considered fulfilled. 

Germany – and France and Italy — never intended to impose an embargo on Russian gas now. The sanctions on the central bank were about stopping Putin accessing billions of dollars in hard-currency reserves, not about stopping gas payments. But Putin has turned the table: he’s using the EU sanctions now against them by forcing them to do business with the central bank in rubles.

If Berlin, Paris and Rome allow the payments to continue, they would be showing their own hypocrisy, opening a crack that would advance the Kremlin’s divide-and-conquer political strategy. They will also show that the EU is prepared to continue paying billions of euros each week to Russia, supporting the ruble — and subsidizing his military — in the process. Worse, it won’t be the last concession. Putin will exploit the gas weakness for more. Now is ruble payments; tomorrow may be about rolling back sanctions or military aid to Ukraine.

If Berlin and other capitals follow the letter of their own sanctions, payments can’t continue. But that means accepting gas sanctions they didn’t intend to impose – at least, not yet. It will mean enormous economic and social costs and could cause European public support for Ukraine to wilt. On Thursday, Scholz said Germany was ready for a halt supplies. “You have to prepare for it, and we already started this before the war broke out. We know what we have to do.”

It’s not just a short-term problem, either. If Germany manages over time to find replacements for the gas, it will be at a much higher price. The era of cheap-Russian gas fueling the German economy is over. German energy-intensive companies, like its chemical giants, could not compete in the global market. Germany will face painful choices about the future of its industrial economy.

In targeting first Poland and Bulgaria this week, Putin showed he’s not bluffing. Warsaw and Sofia don’t buy much Russian gas. Of the roughly 155 billion cubic meters the EU bought last year from Russia, Poland accounted for about 10 bcm, and Bulgaria for 3 bcm. The shutdown costs Russia very little in terms of revenue loss. But it sends a clear message to Germany.

Scholz faces a terrible dilemma. I have argued that European gas imports are hypocritical, financing the Kremlin military machine, and unsustainable, leaving the EU at the mercy of Moscow. But I’m writing these lines from Washington, where gas in plentiful and cheap, and it’s easy to take the high moral ground. Still, I don’t see how Scholz has any other option but to stop payments in late May and face the consequences. Time is up.

Tyler Durden
Fri, 04/29/2022 – 09:45

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AOC Defends Due Process as Colleagues Greenlight Asset Seizure Bill


rollcallpix144112

The bill asks Biden “to violate the 4th Amendment,” says congresswoman. An unlikely coalition of congressional Democrats and Republicans joined together in opposing the “Asset Seizure for Ukraine Reconstruction Act.”

But it wasn’t enough to stop the House from passing the bill, which authorizes the president to “seize assets belonging to a foreign person whose wealth is derived in part through political support for or corruption linked to Russian President Vladimir Putin,” per a congressional summary. Funds from the assets may only be used to supply weapons to Ukraine, support post-conflict reconstruction there, or provide humanitarian aid to Ukrainians and Russians.

The bill does not suggest that those whose assets are seized must be linked to—let alone convicted of—any crime. Rather, it states that the Biden administration shall “determine the constitutional mechanisms through which the President can take steps to seize and confiscate assets under the jurisdiction of the United States” of any foreign person on whom the president has imposed sanctions due to their links to Putin’s regime.

Nor does it require that sanctions and asset seizure be linked to corruption; political “support for” the Putin administration is enough.

Of course, in a country like Russia, where dissidence can be punished gravely, support may be a matter of (economic and sometimes literal) survival. Is it really fair for the U.S. to punish people for this?

Alas, a lot of legislators think so. The Asset Seizure for Ukraine Reconstruction Act passed the House by a vote of 417–8 on Thursday.

Rep. Alexandria Ocasio-Cortez (D–N.Y.) was one of just eight “no” votes on the measure.

“This vote asked President Biden to violate the 4th Amendment, seize private property, and determine where it would go – all without due process,” AOC said in a statement. “This sets a risky new precedent in the event of future Presidents who may seek to abuse that expansion of power, especially with so many of our communities already fighting civil asset forfeiture.”

It’s a very valid concern—and the kind all too rare among lawmakers and among political partisans more broadly.

It often seems like libertarians are the only ones warning against expansions of power that will last long beyond whatever particular circumstances spawned them. So it’s nice to see Ocasio-Cortez—someone whom libertarians seldom agree with—make this point and act accordingly.

AOC was joined in her opposition to the bill by a motley crew of representatives representing the right and left poles of Congress. Other “no” votes from the left included AOC’s fellow “squad” members Reps. Rashida Tlaib (D–Mich.) and Ilhan Omar (D–Minn.), as well as Rep. Cori Bush (D–Mo.).

The four “no” votes from the right came from Reps. Madison Cawthorn (R–N.C.), Marjorie Taylor Greene (R–Ga.), Thomas Massie (R–Ky.), and Chip Roy (R–Texas).

FREE MINDS

“Never bring something to a fight you don’t want shoved up your ass later.” David C. Lowery, founder of bands Camper Van Beethoven and Cracker, has some words of wisdom for folks supporting the Biden administration’s creepy new disinformation board, which will be a part of the Department of Homeland Security (DHS).

“One of my older cousins gave me some good advice when I was twelve: never bring something to a fight you don’t want shoved up your ass later,” tweeted Lowery yesterday. “When the DHS is in the hands of the Republicans this gets turned on dems who currently think this is a good idea. Just saying.”

The new Disinformation Governance Board will be headed by Nina Jankowicz, author of How to Lose the Information War and How to Be a Woman Online. Jankowicz claimed on Twitter that “one of the key reasons the Board was established, is to maintain the Dept’s commitment to protecting free speech, privacy, civil rights, & civil liberties.” But just last week, she was quoted in NPR warning against “free speech absolutists.”

 FREE MARKETS

The U.S. Food and Drug Administration (FDA) has formally proposed a ban on menthol cigarette and flavored cigar sales. Supporters of the ban have portrayed it as “a racial justice issue.”

“They are right about that, but not in the way they mean,” writes Reason‘s Jacob Sullum:

What they mean is that 85 percent of black smokers prefer menthol cigarettes, compared to 30 percent of white smokers.…As the menthol ban’s proponents see it, even the choice to start smoking is not really a choice, because consumers—in this case, black consumers in particular—are no match for Big Tobacco’s persuasive wiles. Gardiner cites the industry’s history of “predatory marketing,” while the anti-smoking Truth Initiative condemns “relentless profiling of Black Americans and vulnerable populations” by brands like Kool, Salem, and Newport.

That’s one way of looking at it. Here is another: The federal government is targeting the kind of cigarettes that black smokers overwhelmingly prefer, precisely because black smokers overwhelmingly prefer them. The FDA also worries that menthol cigarettes appeal to teenagers, another “vulnerable population.” Public health officials are thus treating African Americans like children in the sense that they don’t trust either to make their own decisions….

In addition to condescending assumptions, the FDA is displaying remarkable shortsightedness regarding the practical impact of its policy on the community it supposedly is trying to help. “Policies that amount to prohibition for adults will have serious racial justice implications,” the American Civil Liberties Union (ACLU), the Drug Policy Alliance, the Sentencing Project, and 24 other organizations warned in an April 2021 letter to Becerra and Acting FDA Commissioner Janet Woodcock. “Such a ban will trigger criminal penalties, which will disproportionately impact people of color, as well as prioritize criminalization over public health and harm reduction. A ban will also lead to unconstitutional policing and other negative interactions with local law enforcement.”

The FDA also claims that menthols are more addictive than nonmenthol cigarettes. “But that’s hard to square with the existing data,” points out Reason Foundation’s Guy Bentley.

QUICK HITS

• Can someone tell The Wall Street Journal there is no “winning” a nuclear war?

• Time is running out for South Carolina’s over-the-counter birth control bill.

• Elon Musk says he “strongly supported Obama for President, but today’s Democratic Party has been hijacked by extremists.”

• Some Republicans have tried to portray Florida’s stripping of Disney’s special district status as a blow against crony capitalism. Veronique de Rugy throws cold water on that claim. “The state has 1,288 independent special districts. But we aren’t hearing significant GOP complaints about anyone’s but Disney’s,” she points out.

• What’s driving “the new Republican statism“?

• Europe escalates the threat to online free speech.

The post AOC Defends Due Process as Colleagues Greenlight Asset Seizure Bill appeared first on Reason.com.

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AOC Defends Due Process as Colleagues Greenlight Asset Seizure Bill


rollcallpix144112

The bill asks Biden “to violate the 4th Amendment,” says congresswoman. An unlikely coalition of congressional Democrats and Republicans joined together in opposing the “Asset Seizure for Ukraine Reconstruction Act.”

But it wasn’t enough to stop the House from passing the bill, which authorizes the president to “seize assets belonging to a foreign person whose wealth is derived in part through political support for or corruption linked to Russian President Vladimir Putin,” per a congressional summary. Funds from the assets may only be used to supply weapons to Ukraine, support post-conflict reconstruction there, or provide humanitarian aid to Ukrainians and Russians.

The bill does not suggest that those whose assets are seized must be linked to—let alone convicted of—any crime. Rather, it states that the Biden administration shall “determine the constitutional mechanisms through which the President can take steps to seize and confiscate assets under the jurisdiction of the United States” of any foreign person on whom the president has imposed sanctions due to their links to Putin’s regime.

Nor does it require that sanctions and asset seizure be linked to corruption; political “support for” the Putin administration is enough.

Of course, in a country like Russia, where dissidence can be punished gravely, support may be a matter of (economic and sometimes literal) survival. Is it really fair for the U.S. to punish people for this?

Alas, a lot of legislators think so. The Asset Seizure for Ukraine Reconstruction Act passed the House by a vote of 417–8 on Thursday.

Rep. Alexandria Ocasio-Cortez (D–N.Y.) was one of just eight “no” votes on the measure.

“This vote asked President Biden to violate the 4th Amendment, seize private property, and determine where it would go – all without due process,” AOC said in a statement. “This sets a risky new precedent in the event of future Presidents who may seek to abuse that expansion of power, especially with so many of our communities already fighting civil asset forfeiture.”

It’s a very valid concern—and the kind all too rare among lawmakers and among political partisans more broadly.

It often seems like libertarians are the only ones warning against expansions of power that will last long beyond whatever particular circumstances spawned them. So it’s nice to see Ocasio-Cortez—someone whom libertarians seldom agree with—make this point and act accordingly.

AOC was joined in her opposition to the bill by a motley crew of representatives representing the right and left poles of Congress. Other “no” votes from the left included AOC’s fellow “squad” members Reps. Rashida Tlaib (D–Mich.) and Ilhan Omar (D–Minn.), as well as Rep. Cori Bush (D–Mo.).

The four “no” votes from the right came from Reps. Madison Cawthorn (R–N.C.), Marjorie Taylor Greene (R–Ga.), Thomas Massie (R–Ky.), and Chip Roy (R–Texas).

FREE MINDS

“Never bring something to a fight you don’t want shoved up your ass later.” David C. Lowery, founder of bands Camper Van Beethoven and Cracker, has some words of wisdom for folks supporting the Biden administration’s creepy new disinformation board, which will be a part of the Department of Homeland Security (DHS).

“One of my older cousins gave me some good advice when I was twelve: never bring something to a fight you don’t want shoved up your ass later,” tweeted Lowery yesterday. “When the DHS is in the hands of the Republicans this gets turned on dems who currently think this is a good idea. Just saying.”

The new Disinformation Governance Board will be headed by Nina Jankowicz, author of How to Lose the Information War and How to Be a Woman Online. Jankowicz claimed on Twitter that “one of the key reasons the Board was established, is to maintain the Dept’s commitment to protecting free speech, privacy, civil rights, & civil liberties.” But just last week, she was quoted in NPR warning against “free speech absolutists.”

 FREE MARKETS

The U.S. Food and Drug Administration (FDA) has formally proposed a ban on menthol cigarette and flavored cigar sales. Supporters of the ban have portrayed it as “a racial justice issue.”

“They are right about that, but not in the way they mean,” writes Reason‘s Jacob Sullum:

What they mean is that 85 percent of black smokers prefer menthol cigarettes, compared to 30 percent of white smokers.…As the menthol ban’s proponents see it, even the choice to start smoking is not really a choice, because consumers—in this case, black consumers in particular—are no match for Big Tobacco’s persuasive wiles. Gardiner cites the industry’s history of “predatory marketing,” while the anti-smoking Truth Initiative condemns “relentless profiling of Black Americans and vulnerable populations” by brands like Kool, Salem, and Newport.

That’s one way of looking at it. Here is another: The federal government is targeting the kind of cigarettes that black smokers overwhelmingly prefer, precisely because black smokers overwhelmingly prefer them. The FDA also worries that menthol cigarettes appeal to teenagers, another “vulnerable population.” Public health officials are thus treating African Americans like children in the sense that they don’t trust either to make their own decisions….

In addition to condescending assumptions, the FDA is displaying remarkable shortsightedness regarding the practical impact of its policy on the community it supposedly is trying to help. “Policies that amount to prohibition for adults will have serious racial justice implications,” the American Civil Liberties Union (ACLU), the Drug Policy Alliance, the Sentencing Project, and 24 other organizations warned in an April 2021 letter to Becerra and Acting FDA Commissioner Janet Woodcock. “Such a ban will trigger criminal penalties, which will disproportionately impact people of color, as well as prioritize criminalization over public health and harm reduction. A ban will also lead to unconstitutional policing and other negative interactions with local law enforcement.”

The FDA also claims that menthols are more addictive than nonmenthol cigarettes. “But that’s hard to square with the existing data,” points out Reason Foundation’s Guy Bentley.

QUICK HITS

• Can someone tell The Wall Street Journal there is no “winning” a nuclear war?

• Time is running out for South Carolina’s over-the-counter birth control bill.

• Elon Musk says he “strongly supported Obama for President, but today’s Democratic Party has been hijacked by extremists.”

• Some Republicans have tried to portray Florida’s stripping of Disney’s special district status as a blow against crony capitalism. Veronique de Rugy throws cold water on that claim. “The state has 1,288 independent special districts. But we aren’t hearing significant GOP complaints about anyone’s but Disney’s,” she points out.

• What’s driving “the new Republican statism“?

• Europe escalates the threat to online free speech.

The post AOC Defends Due Process as Colleagues Greenlight Asset Seizure Bill appeared first on Reason.com.

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‘Short Gamma Runs Both Ways’: 4270 Is Today’s ‘Line In The Sand’ For The S&P

‘Short Gamma Runs Both Ways’: 4270 Is Today’s ‘Line In The Sand’ For The S&P

As we noted yesterday, options positioning was extreme and provided a lot of fodder for a short-squeeze (which we saw in yesterday’s panic-bid in US equities). However, AAPL and AMZN stole the jam out of that donut overnight and as Nomura’s Charlie McElligott notes, the pivot level which folks will be watching is ES 4270, where the Street is short 9100x Put at that strike that expires today (as part of a customer’s monthly Put Spread Collar program – where they are long 9100 SPX 29Apr 3600 / 4270 PS vs short the 4695 calls, a ~$4B hedge), which obviously lost Delta into yesterday’s booming rally and was clearly a large part of the “Short Gamma” scramble and hedging-squeeze higher in the market yesterday (the 4270 Put went from an 80 Delta put at 10am to a 46 Delta put, so Dealers had to buy ~$1.25B in futures to remain neutral).

But as we all know, “Short Gamma” goes two ways, so as the Put has now gone from a 46 Delta to a 57 Delta with the move overnight, this has created ~$600mm+ of Incremental selling pressure as well; FWIW, the customer tends to roll to a similar Put Spread Collar in June month-end around 11am (h/t J Pierce and H Homes)

Broad US Equities Index / ETF Options positioning accordingly remains “Short Gamma, Extreme Short Delta,” off lows of yday obviously, but remaining directionally the same for Dealers despite the violent Spot rally Thursday—and note, large amount of $Gamma rolls-off for today’s expiration

  • SPX / SPY consolidated shows $Gamma -$6.3B (10.7%ile), ~$6.5B per 1% move, 21.5% total $Gamma expires today, “flips” above 4400; $Delta -$372.5B (3.5%ile), “flips” above 4424

  • QQQ $Gamma -$55.1mm (31.4%ile), ~$400mm per 1% move, 38.5% total $Gamma expires today, “flips” above $341.09; $Delta -$34.2B (1.1%ile), “flips” above $347.66

  • IWM -$283.2mm (9.7%ile), ~$260mm per 1% move, 25.5% total $Gamma expires today, “flips” above $205.61; $Delta -15.6B (1.0%ile), “flips” above $207.59

The Spot rally has CTA Trend signals across many Equities futs nearing “buy / cover” triggers, most proximate today in SPX, Russell, NDX, Eurostoxx, FTSE100 and Kospi 200, coming after a substantial “buy to cover” in NKY overnight…

…although with this morning’s pullback around Earnings and Expiration, we have slipped a bit from said levels.

Zooming out, SpotGamma notes that the game of “ping pong” continues, largely as anticipated.

As we’ve outlined, volatility and put positioning appears maxed out <=4200 (see “lower bound”), but we cannot have a release of IV lower until the 5/4 events pass (FOMC + Russian default). Therefore equity rallies are framed as short covering, and subject to quick and violent reversals.

Tyler Durden
Fri, 04/29/2022 – 09:25

via ZeroHedge News https://ift.tt/ZH82Yu6 Tyler Durden

“The Unresolved Threshold Issues in the Emoluments Clauses Litigation” – Now Published in the Georgetown JLPP

The Georgetown Journal of Law & Public Policy has published the new article I co-authored with Seth Barrett Tillman: “The Unresolved Threshold Issues in the Emoluments Clauses Litigation: The President Has Three Bodies and There Is No Cause of Action for Ultra Vires Conduct.”

The federal courts never fully settled the nature of suits brought against the President based on the Foreign Emoluments Clause. Moreover, the federal courts still have not fully settled whether a cause of action exists to challenge ultra vires conduct–and no, it is not enough to just say “equity!” Our piece should have relevance for future litigation against presidents.

Here is the abstract:

Shortly after President Trump’s January 2017 inauguration, he was sued for violating the Foreign and Domestic Emoluments Clauses. The plaintiffs alleged that Trump’s acceptance of profits from foreign and U.S. state governments violated these once-obscure provisions of the Constitution. We filed amicus briefs in these cases, and made two arguments that had implications for separation of powers jurisprudence.

First, the Plaintiffs erred by suing President Trump in his “official capacity.” Under settled case law, a government officer violates the Constitution in his official capacity if—and only if—a government policy or custom must have played a part in the violation of federal law. Still, the Plaintiffs never alleged that President Trump acted pursuant to any government policy or custom. Nor did the Plaintiffs allege that Trump acted “under the color of law”—a precondition for pleading an individual-capacity claim. Rather, the case concerned alleged conduct that President Trump took personally. With respect to the Emoluments Clauses, the President has three bodies and can be sued in three distinct fashions: [1] an official-capacity claim involves a government policy or custom; [2] an individual-capacity claim involves action taken by a government officer under the color or law; and [3] a personal claim involves private conduct, absent state action.

We identified a second jurisdictional problem. The Plaintiffs argued that the federal courts had equitable jurisdiction to halt ultra vires action by a government officer. To support this argument, the Plaintiffs contended that federal district courts could issue an injunction—an equitable remedy—against the President. This argument conflated equitable jurisdiction and equitable relief. A plaintiff cannot establish equitable jurisdiction merely by seeking equitable relief. Rather, the plaintiffs must invoke a traditional equitable cause of action that was judicially recognized by 1789, or a cause of action that was created by Congress or the courts. The Supreme Court has not recognized a free-floating equitable cause of action to challenge ultra vires conduct by government officers.

Ultimately, the Supreme Court did not settle these issues, or any others presented by the Emoluments Clauses litigation. After President Biden’s inauguration, the Supreme Court vacated the lower-court judgments that ran against the President, and ordered the courts of appeals to dismiss the cases as moot.

As the Emoluments Clauses litigation fades in the rear-view mirror, this Article offers a retrospective of these two unresolved threshold issues. Our article also provides some guidance on how to litigate future allegations that the President personally violated the Constitution.

The post "The Unresolved Threshold Issues in the Emoluments Clauses Litigation" – Now Published in the Georgetown JLPP appeared first on Reason.com.

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At Least 42 Injured As Violent Clashes In Jerusalem Mark End Of Ramadan

At Least 42 Injured As Violent Clashes In Jerusalem Mark End Of Ramadan

Violence has erupted for the second Friday in a row at Jerusalem’s al-Aqsa Mosque which sits atop Temple Mount. At least 42 Palestinians have been reported injured after severe clashes with Israeli police, after reports of youths hurling rocks and fireworks at Jewish worshippers gathered at the Western Wall below.

Tensions were already high throughout this month given the overlap of Ramadan and the Jewish celebration of Passover this year, which meant huge throngs of Jews and Muslims converging on the walled old city at the same time.

Via picture alliance/DW

Israeli media says at least 160,000 people attended Friday’s Ramadan prayer at al-Aqsa, which is considered Islam’s third holiest site after Mecca and Medina. 

Haaretz writes of the fresh violence that “Hundreds of young Palestinians fired fireworks and threw rocks within the compound, with some also hurling rocks towards the Western Wall and Mughrabi Bridge. One fell in the Western Wall plaza, though no one was reported injured.”

Israeli police responded with stun grenades and rubber bullets, and following this, “The rioters reportedly barricaded themselves in the mosque, leading police to try to break down the doors. Police said they arrested two people, and that the riots simmered down ahead of the midday prayers.”

Tensions and anger were already on edge following last week’s entry of Israeli police into Aqsa, where they tackled and arrested Muslim worshippers following clashes on the outside square. Israeli police said in a statement: “We will continue to act decisively against rioters and outlaws for public safety and security.”

The past week has witnessed scenes like the below, where Israeli police deliver tear gas canisters via small drones over Palestinian crowds:

Due to Ramadan and the infux of Muslim pilgrims into the tight corridors of the old city, Israel has reportedly deployed thousands of additional officers to monitor activities. 

Last weekend also included tens of thousands of more people present due to Orthodox Christian Easter. Controversy erupted after Israeli authorities said they would severely restrict numbers of visitors to the Church of the Holy Sepulchre in the days leading up to it, which reportedly prevented thousands of Palestinian Christians from accessing celebrations.

Tyler Durden
Fri, 04/29/2022 – 09:05

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

“The Unresolved Threshold Issues in the Emoluments Clauses Litigation” – Now Published in the Georgetown JLPP

The Georgetown Journal of Law & Public Policy has published the new article I co-authored with Seth Barrett Tillman: “The Unresolved Threshold Issues in the Emoluments Clauses Litigation: The President Has Three Bodies and There Is No Cause of Action for Ultra Vires Conduct.”

The federal courts never fully settled the nature of suits brought against the President based on the Foreign Emoluments Clause. Moreover, the federal courts still have not fully settled whether a cause of action exists to challenge ultra vires conduct–and no, it is not enough to just say “equity!” Our piece should have relevance for future litigation against presidents.

Here is the abstract:

Shortly after President Trump’s January 2017 inauguration, he was sued for violating the Foreign and Domestic Emoluments Clauses. The plaintiffs alleged that Trump’s acceptance of profits from foreign and U.S. state governments violated these once-obscure provisions of the Constitution. We filed amicus briefs in these cases, and made two arguments that had implications for separation of powers jurisprudence.

First, the Plaintiffs erred by suing President Trump in his “official capacity.” Under settled case law, a government officer violates the Constitution in his official capacity if—and only if—a government policy or custom must have played a part in the violation of federal law. Still, the Plaintiffs never alleged that President Trump acted pursuant to any government policy or custom. Nor did the Plaintiffs allege that Trump acted “under the color of law”—a precondition for pleading an individual-capacity claim. Rather, the case concerned alleged conduct that President Trump took personally. With respect to the Emoluments Clauses, the President has three bodies and can be sued in three distinct fashions: [1] an official-capacity claim involves a government policy or custom; [2] an individual-capacity claim involves action taken by a government officer under the color or law; and [3] a personal claim involves private conduct, absent state action.

We identified a second jurisdictional problem. The Plaintiffs argued that the federal courts had equitable jurisdiction to halt ultra vires action by a government officer. To support this argument, the Plaintiffs contended that federal district courts could issue an injunction—an equitable remedy—against the President. This argument conflated equitable jurisdiction and equitable relief. A plaintiff cannot establish equitable jurisdiction merely by seeking equitable relief. Rather, the plaintiffs must invoke a traditional equitable cause of action that was judicially recognized by 1789, or a cause of action that was created by Congress or the courts. The Supreme Court has not recognized a free-floating equitable cause of action to challenge ultra vires conduct by government officers.

Ultimately, the Supreme Court did not settle these issues, or any others presented by the Emoluments Clauses litigation. After President Biden’s inauguration, the Supreme Court vacated the lower-court judgments that ran against the President, and ordered the courts of appeals to dismiss the cases as moot.

As the Emoluments Clauses litigation fades in the rear-view mirror, this Article offers a retrospective of these two unresolved threshold issues. Our article also provides some guidance on how to litigate future allegations that the President personally violated the Constitution.

The post "The Unresolved Threshold Issues in the Emoluments Clauses Litigation" – Now Published in the Georgetown JLPP appeared first on Reason.com.

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First Shipment Of Russian Coal Paid In Yuan On Its Way To China

First Shipment Of Russian Coal Paid In Yuan On Its Way To China

By Kathleen Li of The Epoch Times

The first shipments of Russian coal and crude oil, paid for in yuan, will arrive in China in April and May, respectively. Chinese state media used the opportunity to denigrate the United States, claiming that the international status of the U.S. dollar is “at risk.” However, financial expert Albert Song believes that it will not affect the U.S. dollar’s status as the leading global reserve currency.

Fenwei Energy Information Service Co., China’s leading information and service provider to the coal and coke industries, revealed that several Chinese companies purchased Russian coal in Chinese currency in March, and the first shipment would be made in April. This is also the first shipment of Russian commodities paid in yuan to arrive in China after Russia was sanctioned by Western countries.

Fenwei did not specify on which date the shipment was expected to arrive.

In addition to coal, Chinese buyers also used yuan to purchase Russian crude oil. The first ESPO (Eastern Siberia Pacific Ocean) crude oil will be delivered in May, according to a commentary published in early April on Cngold.org, a Chinese online media outlet about investing.

Citing the purchases from Fenwei, the article stated that payments in U.S. dollars will become less popular.

“Russia announced that it would only accept payments in rubles for Russian oil and natural gas, which turned the United States and European countries from those who impose sanctions to those who are subjected to sanctions,” the commentary said. “Chinese yuan seized the opportunity and began to reveal its potential in global trade payments. Now that coal and oil paid for in yuan will arrive in China, the international community [will] become green-eyed [at our success].”

On April 23, Albert Song, a researcher at Tianjun, a politics and economics think tank, told The Epoch Times that the recent Chinese purchases of Russian commodities in yuan will not affect the international status of the U.S. dollar, “because these are only bilateral trades between China and Russia, not multilateral trades involving other countries. ”

Song has 27 years of professional experience in China’s financial industry, focusing on research in China’s politics and economics.

According to data released by China’s General Administration of Customs in mid-April, the quantity of imported coal and lignite to China dropped 39.9 percent year-on-year in March and 24.2 percent year-on-year in the first quarter. However, Russian imports not only retained the top spot in China’s coking coal imports in March, the quantity more than doubled year-on-year.

China’s total imports from Russia are also growing significantly. The latest mid-April report from the General Administration of Customs showed that in the first quarter of 2022, its total imports from Russia increased to $21.73 billion, a jump of 31 percent year-on-year, ranking second only to Indonesia’s 31.4 percent.

When touting the growing influence of Chinese currency, the article on Cngold.org also revealed that the Chinese regime is currently negotiating with Saudi Arabia, planning to use renminbi to price crude oil, in part.

Song disagrees with the commentary’s conclusion that Chinese yuan is an emerging star on the international market.

“The most important thing is that a country’s sovereign currency is recognized by many countries. Although the Chinese Communist Party claims that the renminbi is on the path of internationalization, the share of renminbi’s international payments over the years has only been 3.2 percent because it is a government-controlled currency and cannot be freely exchanged. It is therefore a currency with poor credit to begin with,” Song commented.

China Wary of Sanctions

On April 7, the European Union announced the fifth round of sanctions against Russia, including a ban on coal imports from Russia.

The toughest sanction so far is to cut Russian banks from the global financial system. After Visa and Mastercard suspended services in Russia, Russian banks indicated that they planned to issue cards using China’s UnionPay system.

As China’s largest credit card brand, Unionpay cards are issued in over 70 countries and regions.

However, Russian news agency RBC reported on April 20 that China’s UnionPay refused to cooperate with Russian banks for fear of being sanctioned, leaving Russia with fewer options for a credit card provider for its global business.

“China UnionPay chooses not to cooperate with Russian banks, for fear that itself will get implicated in the sanctions. The CCP needs the New York Clearing House interbank payments system to obtain dollars. Sanctions against China will block it from earning foreign exchanges through exports,” Song explained.

He further elaborated that there are three driving forces for China’s economic growth—foreign trade, investment, and consumption.

“All three are in decline. If additional sanctions are imposed on China, it will be an unbearable situation for China’s economy,” he said.

Tyler Durden
Fri, 04/29/2022 – 08:46

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Fed’s Favorite Inflation Signal Hits 40 Year High As Savings-Rate Crashes

Fed’s Favorite Inflation Signal Hits 40 Year High As Savings-Rate Crashes

Both incomes and spending were expected to rise MoM in March and they did with spending rising 1.1% MoM (almost double the 0.6% rise expected) and outpacing the 0.5% MoM rise in incomes. This is the 6th straight month of rising incomes and 3rd straight month of rising spending…

Source: Bloomberg

For the 3rd straight month, the increases in spending outpaced the rise in incomes pushing the savings rate to its lowest since Dec 2013

Source: Bloomberg

Finally, The Fed’s favorite inflation rate – the PCE Deflator – rose by 6.6% YoY (slightly less than the 6.7% YoY expected) but still the highest since Jan 1982 (while the core PCE deflator fell back very modestly from multi-decade highs)…

Source: Bloomberg

No breathing room for The Fed here.

Tyler Durden
Fri, 04/29/2022 – 08:39

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Exxon Triples Buyback To $30 Billion As Energy Giant Prints Billions In Free Cash Flow

Exxon Triples Buyback To $30 Billion As Energy Giant Prints Billions In Free Cash Flow

With the rest of corporate America shaking at the prospects of a stagflationary recession and/or rising interest rates and an uber hawkish Fed, one sector is printing money hand over fist, the best performing market sector of 2022 by a giant margin: energy.

This morning, the two integrated US energy giants, Exxon and Chevron both reported earnings, and with a few cosmetic exceptions, the results were blowout. And while Buffett energy darling Chevron posted the highest quarterly earnings in almost a decade, here will will focus on the bigger of the two, Exxon, whose profit surged after Russia’s invasion of Ukraine accelerated rallies in energy prices around the world.

Exxon’s earned $2.07 a share in the period, missing the $2.24 consensus estimate, driven almost fully by one-time items; CEO Darren Woods blamed the miss on a dip in output from oil and natural gas wells stemming from adverse weather and other factors. Exxon. The company also reported a Russia-linked multi-billion dollar charge. More importantly, the higher than expected $90.5 billion in revenue resulted in adjusted net income of $8.8 billion was more than double the year-earlier figure.

The oil giant took a $3.4 billion writedown due to its planned exit from its Sakhalin-1 operation in Russia, compared with a previously announced estimate of as much as $4 billion. The company declared force majeure at the venture earlier this week and curtailed crude production (we are confident there is already a line of Chinese and Indian companies willing to replace Exxon in the key LNG joint venture).

Similar to TotalEnergies, which reported earlier and announced that the French oil titan would buyback as much as $3 billion in shares before the end of June, Exxon announced that it would triple its share-buyback program to as much as $30 billion after the company generated a massive $14.8 billion in cash flow from operations…

… which translates into $10.8 billion in Free Cash Flow…

… of which it distributed $5.8 billion to shareholders (2/3 dividends, 1/3 buyback).

The repurchases will be made through the end of next year, the company said on Friday. Here are some more details from the quarter:

  • Chemical prime product sales 6,737 kt, +4.5% y/y, estimate 6,744
  • Downstream petroleum product sales 5,158 kbd, +5.7% y/y, estimate 5,160
  • Production 3,675 KOEBD, -3% y/y, estimate 3,804
  • Crude oil, NGL, bitumen and synthetic oil production 2,266 KBD, estimate 2,391
  • Natural gas production 8,452 MCFD, estimate 8,697
  • Refinery throughput 3,983 KBD
  • Total revenues & other income $90.50 billion, estimate $89.57 billion

Some more details from the quarter courtesy of Bloomberg:

  • Company is progressing plans to increase its global offer of certified circular polymer with capacity to process up to 500 metric tons of plastic waste per year by 2026
  • Permian Crude Venture remains on track for phased expansion in 2023 and 2024
  • Permian Basin continued to improve efficiency and grow production, reaching production of 560,000 barrels per day at the end of the quarter. The company remains on track to deliver a production increase of 25% this year versus full-year 2021, and to eliminate routine flaring by year end
  • Corporation formed ExxonMobil Product Solutions, combining Downstream and Chemical businesses, and centralized Technology & Engineering and Operations & Sustainability groups; move is effective April
  • “Earnings increased modestly, as strong margin improvement and underlying growth was offset by weather and timing impacts.”
  • Exxon shares fall about 1.24% in pre market trading

As Bloomberg notes, Big Oil’s stellar profits come as consumers feel the pinch of surging energy prices, prompting some politicians to demand explorers invest more in new wells to counter Russia’s growing isolation. So far, oil executives are funneling cash to shareholders through dividends and buybacks, fueling calls from some quarters for the imposition of windfall profit taxes, and keeping capex to a minimum.

The surge in oil prices has come at just the right time for Exxon. As a reminder, in 2020, the Western world’s biggest oil company increased debt by 45%, or nearly $21 billion as oil cratered to record low; but the recent boom enabled it to repay the entire sum, as well as ramping up returns to shareholders. The stock is up about 40% this year, exceeding the return in the S&P 500 Energy Index.

Shareholders may be disappointed that Exxon failed to increase dividends this week as some analysts had been expecting, but that’ probably to avoid more political heat from cartoonish democrats who blame the surge in oil on oil firms instead of their own catastrophic policies; we expect the firm will significantly likely its dividend payout later this year or else it will just repurchase more stock.

CEO Woods said he is focused on boosting uickening production in two key areas: U.S. shale and Guyana, where it made the world’s largest oil discovery of the past decade. The oil giant plans to boost production from the Permian Basin this year and its Guyanese Liza Phase 1 operation is currently producing 10,000 barrels a day above nameplate capacity. Exxon’s third Guyana project, Payara, is running five months ahead of schedule and is due to come online before the end of next year, the company this week.

Such increases will not only help stabilize Exxon’s long-term production decline, but they’re also highly profitable barrels. About 90% of its investment dollars are expected to make double-digit returns even were oil to fall to $35 a barrel, the company said in March. Brent last traded at about $109.

In response to the modest earnings miss, XOM stock traded 2% lower although we expect this will be promptly reversed and XOM will be trading above $100 in the next few weeks as the Wall Street penguin parade begins and analyst after analyst boosts their price target on one of the few truly outperforming companies in this pre-recessionary environment.

The company’s full earnings presentation is below (pdf link).

Tyler Durden
Fri, 04/29/2022 – 08:28

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