Ketanji Brown Jackson To Become 104th Associate Justice Thursday At Noon

Tomorrow is not only the last day of the Supreme Court term and Justice Breyer’s final day on the Court. It will also be Ketanji Brown Jackson’s first day as a part of the Court.

A press release from the Supreme Court reads:

The Honorable Ketanji Brown Jackson will be sworn in as the 104th Associate Justice of the Supreme Court on Thursday, June 30, at noon at the Supreme Court of the United States. Chief Justice John G. Roberts, Jr., will administer the Constitutional Oath and Associate Justice Stephen G. Breyer will administer the Judicial Oath in a ceremony in the West Conference Room before a small gathering of Judge Jackson’s family.

The ceremony will be streamed live on the homepage of the Court’s website, www.supremecourt.gov.

A formal investiture ceremony will take place at a special sitting of the Court in the Courtroom at a later date.

Although President signed the commission for Jackson’s appointment shortly after her confirmation vote, she had not been sworn in as Justice Breyer had yet to retire. With Justice Breyer’s announcement that he is retiring tomorrow at noon, however, Justice Jackson can be sworn in — and she will be. Welcome Justice Jackson!

The post Ketanji Brown Jackson To Become 104th Associate Justice Thursday At Noon appeared first on Reason.com.

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Montana Constitution Lets Board of Regents Regulate Gun Carrying at Universities, Independent of Legislature

Today’s decision of the Montana Supreme Court in Bd. of Regents v. State, written by Justice Laurie McKinnon, holds that

  1. the Montana Constitution gives the Montana Board of Regents of Higher Education authority over the Montana University System, independent in many ways of the Legislature, and
  2. it was therefore unconstitutional for the Legislature (in a statute called HB 102) to preempt the Board’s general ban on gun carrying on Montana public university campuses (Board Policy 1006):

The intent of the Framers controls our interpretation of a constitutional provision. We must discern the Framers’ intent from the plain meaning of the language used and may resort to extrinsic aids only if the express language is vague or ambiguous. Even in the context of clear and unambiguous language, however, we determine constitutional intent not only from the plain language, but also by considering the circumstances under which the Constitution was drafted, the nature of the subject matter the Framers faced, and the objective they sought to achieve….

The 1972 Constitution removed the [1889 Constitution’s] language subjecting the Board’s powers and duties to legislative control and instead vested the Board with the “full power, responsibility, and authority to supervise, coordinate, manage and control the [MUS] and … supervise and coordinate other public educational institutions assigned by law.” By the plain language of Mont. Const. art. X, § 9, the Board retains full independence over the MUS. However, the Board remains subject to the legislative powers to appropriate and audit, legislatively determined terms of office, and the oversight of additional educational institutions as prescribed by law. Legislative oversight likewise remained the case for the constitutionally created Board of Public Education.

The 1972 Constitutional Convention’s debate over Mont. Const. art. X, § 9, further helps determine the Framers’ intent regarding the Board’s constitutional authority. The debate reveals the Framers intended to place the MUS outside the reach of political changes of fortune and instead in the hands of a Board which remained directly responsible and accountable to Montanans. Indeed, the Framers recognized the importance of independent and unfettered academic freedom:

[A] more subtle kind of coercion has made its appearance, and it is of the sort which is likely to become an even greater threat to the integrity of higher education in the future. This is the growing power of the centralized, bureaucratic state. Without overtly intending to curtail freedoms, the modern state has absorbed an increasing amount of power and control in the name of efficiency. [Montana Constitutional Convention, Committee Proposals.]

The contemporary understanding at the time of the Constitution’s ratification was “that the convention intended that the [Board] should be a quasi-independent state department subject only to indirect legislative control through appropriation, audit, confirmation of gubernatorial appointments and assignment of other educational institutions for their supervision.” …

The State asserts the Board’s constitutional authority is limited to academic, financial, and administrative matters and that HB 102 revoked any previously delegated power to regulate firearms…. [But t]he Board and the Legislature derive their respective power from the same authority—the Montana Constitution. The Constitution defines the powers of each and imposes limitations upon those powers. Absent language to the contrary, a direct power conferred upon one necessarily excludes the existence of such power in the other. This fundamental premise lies at the very root of the constitutional system of government.

The Board, and MUS, are not mentioned in Mont. Const. art. V, which imparts the legislative power, and corresponding limitations, upon the Legislature. However, nor is the Legislature mentioned in Mont. Const. art. X, § 9(2), which entrusts the Board with the full governance and control of the MUS. No reasonable rule of construction permits either body to encroach upon or exercise the powers constitutionally conferred upon the other.

Application of HB 102 to MUS, and the Board, would give the Legislature control and supervision over MUS campuses and render the Board ministerial officers with no true authority other than to effectuate the Legislature’s will. Such application directly contradicts the constitutionally granted powers of the Board and undermines the Board’s ability to govern the MUS, while expanding the Legislature’s power in contravention of the express constitutional language of Mont. Const. art. X, § 9(2). Montana’s Constitution serves as a limitation on the Legislature, not a grant of power. Exercise of the legislative power to undermine the constitutional powers of the Board cannot stand.

The State … argue[s] the Board’s authority remains limited to academic, administrative, and financial matters concerning the MUS. The Board’s constitutional authority includes those matters. However, contrary to the State’s argument, Board Policy 1006 relates directly to the academic and administrative operations of the MUS. Applying, as it does, solely to individuals while they are on MUS campuses or properties, Board Policy 1006 reflects the Board’s judgment on an issue undoubtedly within the scope of its constitutional authority under Mont. Const. art. X, § 9(2)(a)—the appropriate means by which to maintain a safe, secure, and orderly educational environment in its classrooms and on its campuses and properties.

While the mission of the MUS remains teaching, research, and public service, the Board has determined through Board Policy 1006 that the presence of firearms on MUS campuses presents an unacceptable risk to a safe and secure educational environment, thus undermining these goals. The Board manages instructional facilities, laboratories, recreational facilities, student residential housing, food services, and a host of other operations. Students, faculty, and support personnel rely on the Board to assess security risks and make decisions that will enhance the safety, security, and stability of the educational environment as a whole, consistent with the MUS mission. Thus, maintaining a safe and secure educational environment falls squarely within the Board’s constitutional authority under Mont. Const. art. X, § 9(2)(a), affording the Board the power to protect MUS campuses so that the educational and administrative goals of the MUS are realized.

Board Policy 1006 arises from this necessity and reflects the Board’s assessment that firearms threaten the safety and security of the educational environment it strives to obtain. In addition to limiting the carrying of firearms on MUS campuses, Board Policy 1006 delegates the control and direction of campus police and security departments to the presidents of each MUS campus. It is particularly germane and necessary to the Board’s constitutional authority that it can manage MUS campuses by implementing policies it believes will minimize the loss of life and thereby strengthen its educational environment. While the mission of the Board is education, the reality is that campus safety and security is an integral responsibility of the Board and its mission….

Conversely, with limited exceptions, HB 102 prohibits the Board from regulating the possession, transportation, or storage of firearms on MUS campuses. By expressly proscribing the Board from regulating firearms on MUS campuses, HB 102 functions as a legislative directive of MUS policy and undermines the management and control exercised by the Board to set its own policies and determine its own priorities. The Board, not the Legislature, is constitutionally vested with full authority to determine the priorities of the MUS. See Judge, 168 Mont. at 454, 543 P.2d at 1335. HB 102 sought to undermine this constitutional authority and thus cannot be applied to the Board and MUS properties.

Our holding does not, as the State contends, elevate the Board and MUS to a fourth branch of government or provide the Board veto power over state laws it disagrees with. Rather, we conclude that, where legislative action infringes upon the constitutionally granted powers of the Board to supervise, coordinate, manage, and control the MUS, the legislative power must yield….

The Board is constitutionally vested with full responsibility to supervise, coordinate, manage, and control the MUS and its properties. The regulation of firearms on MUS campuses falls squarely within this authority….

Naturally, this is a matter of state law, and would only be persuasive authority in states that have similar state constitutional provisions. The court didn’t discuss the Montana Constitution’s right to bear arms provision, presumably because the parties didn’t argue about it; that provision reads,

The right of any person to keep or bear arms in defense of his own home, person, and property, or in aid of the civil power when thereto legally summoned, shall not be called in question, but nothing herein contained shall be held to permit the carrying of concealed weapons.

The post Montana Constitution Lets Board of Regents Regulate Gun Carrying at Universities, Independent of Legislature appeared first on Reason.com.

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The Dirty Pictures That Revolutionized Art


dreamstime_xxl_145447798

Starting in the 1960s, a maverick band of young cartoonists like Robert Crumb, Art Spiegelman, Trina Robbins, and Gilbert Shelton starting churning out comic books the likes of which had never seen before. These “undergound” works definitely weren’t aimed at kids and they didn’t follow the exploits of costumed do-gooders or anodyne high schoolers like Riverdale High’s Archie, Betty, and Veronica.

Drawing inspiration from Mad magazine and horror comics that had been subjected to congressional scrutiny in the 1950s, the new “comix” were filled with sex, drugs, and violence; ruthlessly satirized mass culture; and drew the ire of crusaders against obscenity and cultural decline. Yet within a decade, underground comix had become recognized as a vital artistic force in America whose influence is still massive and growing in art, music, movies, design, and more.

Brian Doherty’s Dirty Pictures: How an Underground Network of Nerds, Feminists, Misfits, Geniuses, Bikers, Potheads, Printers, Intellectuals, and Art School Rebels Revolutionized Art and Invented Comix, is the definitive history of this vital yet underappreciated aspect of American popular culture. The artists Doherty writes about—many of whom whom went on to win Pulitzer Prizes, MacArthur “genius” grants, and both mass and critical acclaim—shook up popular culture and the high art world while fighting for radical, creative expression in an age of censorship. The lessons from their struggles are particularly prescient for a contemporary world beseiged by cancel culture and all manner of attempts to shut down speech deemed offensive, triggering, or morally suspect.

Doherty is a Reason senior editor and the author of books such as the This Is Burning Man: The Rise of a New American Underground, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement, and Ron Paul’s rEVOLution: The Man and the Movement He Inspired. Nick Gillespie interviews him about comix, their enduring relevance, and the surprising connections between alternative art and political movements such as libertarianism.

This interview was taped live on Monday, June 20, 2022, as part of the Reason Speakeasy series, held monthly in New York City. Go here for podcast and video versions of past events.

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Transportation Secretary Warns: “There Are Going To Be Challenges” With Flights On Fourth Of July Weekend

Transportation Secretary Warns: “There Are Going To Be Challenges” With Flights On Fourth Of July Weekend

Since Memorial Day weekend, airlines have canceled 20,000 flights and delayed more than 173,000, resulting in one of the worst travel periods for Americans.

In a matter of days, travel demand is set to soar as 3.55 million people are expected to fly over the Fourth of July holiday weekend. Concerns are already mounting as persistent pilot and crew shortages and understaffing among the Federal Aviation Administration (FAA) are expected to create another perfect storm of flight disruptions. 

On Tuesday evening, Transportation Secretary Pete Buttigieg spoke with NBC Nightly News’ Lester Holt about the travel mess and offered no reassurance about an immediate resolution to chronic flight delays and cancellations plaguing airports across the country. 

Holt asked Buttigieg, “Is the July 4 holiday a recipe for disaster given the issues with the system right now?”

Buttigieg answered, “There are going to be challenges, but we’re watching it closely and we’re talking to the airlines every day about their responsibility to make sure that they can accommodate any issues that weather or other curveballs might throw at them. A lot of people, including me, are expecting to get to loved ones over this holiday weekend, and we need a system that is resilient enough to get them there, plus good customer service when an issue does come up.”

Holt responded, “The airlines got a lot of money, over $50 billion. A lot of that, the idea was that you wouldn’t have to lay off people, that you could keep people employed.”

Buttigieg said, “So, the point of this taxpayer funding was to keep people in their jobs. And one of the best things about the Rescue Plan, for example, was the news that airline employees were told to tear up their furlough notices when it came through. But we also saw that a lot of people, including pilots, were nudged into early retirement by the airlines. That certainly is something that reduced the labor force that, right now, we’re really counting on. Often, we’re hearing the lack of a pilot ready to go cited as an issue or a problem that’s contributing to a delay or a cancellation.”

Buttigieg added that some of these issues are “long term”… 

United Airlines CEO Scott Kirby recently pointed out the industry is short 12,000 pilots, and “there’s no quick fix.” 

United, American Airlines, Southwest Airlines, Delta Air Lines, JetBlue Airways, Alaska Airlines, and Spirit Airlines have all reduced flights this summer to alleviate congestion. 

Last Friday, airline industry group Airlines for America, which represents the country’s largest airlines (American Airlines, Delta, United, Southwest, JetBlue, and Alaska Airlines, as well as shippers FedEx and UPS), blamed the FAA’s own understaffing is “crippling” East Coast air traffic.

While the weather could certainly be an issue, the crux of the problem is a pilot shortage and possibly understaffed FAA air traffic controllers. 

Buttigieg recently warned airlines that they faced federal government action—presumably including fines—over mounting flight cancellations and delays. 

Tyler Durden
Wed, 06/29/2022 – 15:45

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Ketanji Brown Jackson To Become 104th Associate Justice Thursday At Noon

Tomorrow is not only the last day of the Supreme Court term and Justice Breyer’s final day on the Court. It will also be Ketanji Brown Jackson’s first day as a part of the Court.

A press release from the Supreme Court reads:

The Honorable Ketanji Brown Jackson will be sworn in as the 104th Associate Justice of the Supreme Court on Thursday, June 30, at noon at the Supreme Court of the United States. Chief Justice John G. Roberts, Jr., will administer the Constitutional Oath and Associate Justice Stephen G. Breyer will administer the Judicial Oath in a ceremony in the West Conference Room before a small gathering of Judge Jackson’s family.

The ceremony will be streamed live on the homepage of the Court’s website, www.supremecourt.gov.

A formal investiture ceremony will take place at a special sitting of the Court in the Courtroom at a later date.

Although President signed the commission for Jackson’s appointment shortly after her confirmation vote, she had not been sworn in as Justice Breyer had yet to retire. With Justice Breyer’s announcement that he is retiring tomorrow at noon, however, Justice Jackson can be sworn in — and she will be. Welcome Justice Jackson!

The post Ketanji Brown Jackson To Become 104th Associate Justice Thursday At Noon appeared first on Reason.com.

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Montana Const. Empowers Board of Regents to Regulate Gun Carrying at Universities, Independent of Legislature

Today’s decision of the Montana Supreme Court in Bd. of Regents v. State, written by Justice Laurie McKinnon, holds that

  1. the Montana Constitution gives the Montana Board of Regents of Higher Education authority over the Montana University System, independent in many ways of the Legislature, and
  2. it was therefore unconstitutional for the Legislature (in a statute called HB 102) to preempt the Board’s general ban on gun carrying on Montana public university campuses (Board Policy 1006):

The intent of the Framers controls our interpretation of a constitutional provision. We must discern the Framers’ intent from the plain meaning of the language used and may resort to extrinsic aids only if the express language is vague or ambiguous. Even in the context of clear and unambiguous language, however, we determine constitutional intent not only from the plain language, but also by considering the circumstances under which the Constitution was drafted, the nature of the subject matter the Framers faced, and the objective they sought to achieve….

The 1972 Constitution removed the [1889 Constitution’s] language subjecting the Board’s powers and duties to legislative control and instead vested the Board with the “full power, responsibility, and authority to supervise, coordinate, manage and control the [MUS] and … supervise and coordinate other public educational institutions assigned by law.” By the plain language of Mont. Const. art. X, § 9, the Board retains full independence over the MUS. However, the Board remains subject to the legislative powers to appropriate and audit, legislatively determined terms of office, and the oversight of additional educational institutions as prescribed by law. Legislative oversight likewise remained the case for the constitutionally created Board of Public Education.

The 1972 Constitutional Convention’s debate over Mont. Const. art. X, § 9, further helps determine the Framers’ intent regarding the Board’s constitutional authority. The debate reveals the Framers intended to place the MUS outside the reach of political changes of fortune and instead in the hands of a Board which remained directly responsible and accountable to Montanans. Indeed, the Framers recognized the importance of independent and unfettered academic freedom:

[A] more subtle kind of coercion has made its appearance, and it is of the sort which is likely to become an even greater threat to the integrity of higher education in the future. This is the growing power of the centralized, bureaucratic state. Without overtly intending to curtail freedoms, the modern state has absorbed an increasing amount of power and control in the name of efficiency. [Montana Constitutional Convention, Committee Proposals.]

The contemporary understanding at the time of the Constitution’s ratification was “that the convention intended that the [Board] should be a quasi-independent state department subject only to indirect legislative control through appropriation, audit, confirmation of gubernatorial appointments and assignment of other educational institutions for their supervision.” …

The State asserts the Board’s constitutional authority is limited to academic, financial, and administrative matters and that HB 102 revoked any previously delegated power to regulate firearms…. [But t]he Board and the Legislature derive their respective power from the same authority—the Montana Constitution. The Constitution defines the powers of each and imposes limitations upon those powers. Absent language to the contrary, a direct power conferred upon one necessarily excludes the existence of such power in the other. This fundamental premise lies at the very root of the constitutional system of government.

The Board, and MUS, are not mentioned in Mont. Const. art. V, which imparts the legislative power, and corresponding limitations, upon the Legislature. However, nor is the Legislature mentioned in Mont. Const. art. X, § 9(2), which entrusts the Board with the full governance and control of the MUS. No reasonable rule of construction permits either body to encroach upon or exercise the powers constitutionally conferred upon the other.

Application of HB 102 to MUS, and the Board, would give the Legislature control and supervision over MUS campuses and render the Board ministerial officers with no true authority other than to effectuate the Legislature’s will. Such application directly contradicts the constitutionally granted powers of the Board and undermines the Board’s ability to govern the MUS, while expanding the Legislature’s power in contravention of the express constitutional language of Mont. Const. art. X, § 9(2). Montana’s Constitution serves as a limitation on the Legislature, not a grant of power. Exercise of the legislative power to undermine the constitutional powers of the Board cannot stand.

The State … argue[s] the Board’s authority remains limited to academic, administrative, and financial matters concerning the MUS. The Board’s constitutional authority includes those matters. However, contrary to the State’s argument, Board Policy 1006 relates directly to the academic and administrative operations of the MUS. Applying, as it does, solely to individuals while they are on MUS campuses or properties, Board Policy 1006 reflects the Board’s judgment on an issue undoubtedly within the scope of its constitutional authority under Mont. Const. art. X, § 9(2)(a)—the appropriate means by which to maintain a safe, secure, and orderly educational environment in its classrooms and on its campuses and properties.

While the mission of the MUS remains teaching, research, and public service, the Board has determined through Board Policy 1006 that the presence of firearms on MUS campuses presents an unacceptable risk to a safe and secure educational environment, thus undermining these goals. The Board manages instructional facilities, laboratories, recreational facilities, student residential housing, food services, and a host of other operations. Students, faculty, and support personnel rely on the Board to assess security risks and make decisions that will enhance the safety, security, and stability of the educational environment as a whole, consistent with the MUS mission. Thus, maintaining a safe and secure educational environment falls squarely within the Board’s constitutional authority under Mont. Const. art. X, § 9(2)(a), affording the Board the power to protect MUS campuses so that the educational and administrative goals of the MUS are realized.

Board Policy 1006 arises from this necessity and reflects the Board’s assessment that firearms threaten the safety and security of the educational environment it strives to obtain. In addition to limiting the carrying of firearms on MUS campuses, Board Policy 1006 delegates the control and direction of campus police and security departments to the presidents of each MUS campus. It is particularly germane and necessary to the Board’s constitutional authority that it can manage MUS campuses by implementing policies it believes will minimize the loss of life and thereby strengthen its educational environment. While the mission of the Board is education, the reality is that campus safety and security is an integral responsibility of the Board and its mission….

Conversely, with limited exceptions, HB 102 prohibits the Board from regulating the possession, transportation, or storage of firearms on MUS campuses. By expressly proscribing the Board from regulating firearms on MUS campuses, HB 102 functions as a legislative directive of MUS policy and undermines the management and control exercised by the Board to set its own policies and determine its own priorities. The Board, not the Legislature, is constitutionally vested with full authority to determine the priorities of the MUS. See Judge, 168 Mont. at 454, 543 P.2d at 1335. HB 102 sought to undermine this constitutional authority and thus cannot be applied to the Board and MUS properties.

Our holding does not, as the State contends, elevate the Board and MUS to a fourth branch of government or provide the Board veto power over state laws it disagrees with. Rather, we conclude that, where legislative action infringes upon the constitutionally granted powers of the Board to supervise, coordinate, manage, and control the MUS, the legislative power must yield….

The Board is constitutionally vested with full responsibility to supervise, coordinate, manage, and control the MUS and its properties. The regulation of firearms on MUS campuses falls squarely within this authority….

Naturally, this is a matter of state law, and would only be persuasive authority in states that have similar state constitutional provisions. The court didn’t discuss the Montana Constitution’s right to bear arms provision, presumably because the parties didn’t argue about it; that provision reads,

The right of any person to keep or bear arms in defense of his own home, person, and property, or in aid of the civil power when thereto legally summoned, shall not be called in question, but nothing herein contained shall be held to permit the carrying of concealed weapons.

The post Montana Const. Empowers Board of Regents to Regulate Gun Carrying at Universities, Independent of Legislature appeared first on Reason.com.

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The Dirty Pictures That Revolutionized Art


dreamstime_xxl_145447798

Starting in the 1960s, a maverick band of young cartoonists like Robert Crumb, Art Spiegelman, Trina Robbins, and Gilbert Shelton starting churning out comic books the likes of which had never seen before. These “undergound” works definitely weren’t aimed at kids and they didn’t follow the exploits of costumed do-gooders or anodyne high schoolers like Riverdale High’s Archie, Betty, and Veronica.

Drawing inspiration from Mad magazine and horror comics that had been subjected to congressional scrutiny in the 1950s, the new “comix” were filled with sex, drugs, and violence; ruthlessly satirized mass culture; and drew the ire of crusaders against obscenity and cultural decline. Yet within a decade, underground comix had become recognized as a vital artistic force in America whose influence is still massive and growing in art, music, movies, design, and more.

Brian Doherty’s Dirty Pictures: How an Underground Network of Nerds, Feminists, Misfits, Geniuses, Bikers, Potheads, Printers, Intellectuals, and Art School Rebels Revolutionized Art and Invented Comix, is the definitive history of this vital yet underappreciated aspect of American popular culture. The artists Doherty writes about—many of whom whom went on to win Pulitzer Prizes, MacArthur “genius” grants, and both mass and critical acclaim—shook up popular culture and the high art world while fighting for radical, creative expression in an age of censorship. The lessons from their struggles are particularly prescient for a contemporary world beseiged by cancel culture and all manner of attempts to shut down speech deemed offensive, triggering, or morally suspect.

Doherty is a Reason senior editor and the author of books such as the This Is Burning Man: The Rise of a New American Underground, Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement, and Ron Paul’s rEVOLution: The Man and the Movement He Inspired. Nick Gillespie interviews him about comix, their enduring relevance, and the surprising connections between alternative art and political movements such as libertarianism.

This interview was taped live on Monday, June 20, 2022, as part of the Reason Speakeasy series, held monthly in New York City. Go here for podcast and video versions of past events.

The post The Dirty Pictures That Revolutionized Art appeared first on Reason.com.

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What Will It Take To End Rampant Home-Price Inflation?

What Will It Take To End Rampant Home-Price Inflation?

Authored by Ryan McMaken via The Mises Institute,

Real wages are falling, inflation is at a 40-year high, and the Atlanta Fed predicts we’ll find GDP growth at zero for the second quarter. Meanwhile, both the yield curve and money-supply growth point to recession.

But when it comes to the latest data on home prices, there’s still no sign of any deflation or even moderation.

For example, the latest Case-Shiller home price data shows home prices surged above 20 percent year-over-year in April, marking yet another month of historic highs in home price growth. It’s now abundantly clear that a decade of easy money, followed by two-years of covid-induced helicopter money, has pushed home price growth to levels that dwarf even the pre-2008 housing bubble. This continues to make housing less affordable for potential first-time home buyers and for renters. Unfortunately, the options for “doing something” are limited, and probably require a recession. 

But in the meantime, those who are already lucky enough to be property owners continue to see some big gains. According to the latest Case-Shiller home price report, released Tuesday:

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 20.4% annual gain in April, down from 20.6% in the previous month. The 10-City Composite annual increase came in at 19.7%, up from 19.5% in the previous month. The 20-City Composite posted a 21.2% year-over-year gain, up from 21.1% in the previous month.

Tampa, Miami, and Phoenix reported the highest year-over-year gains among the 20 cities in April. Tampa led the way with a 35.8% year-over-year price increase, followed by Miami with a 33.3% increase, and Phoenix with a 31.3% increase. Nine of the 20 cities reported higher price increases in the year ending April 2022 versus the year ending March 2022…

In April, all 20 cities reported increases before and after seasonal adjustments.

According to the index, year-over-year changes have exceeded 18 percent for each month since June 2021, a rate well in excess of the growth rates experienced during the housing bubble leading up to the financial crisis of 2008. This growth is also reflected in month-over-month growth which has not fallen below 1 percent in 21 months. In other words, as of April, there was still no sign at all that price inflation and declining real wages was doing much to dampen demand for home purchases. 

The reader may remember that price inflation began to surge well above the Fed’s target 2% rate as early as April 2021. Price inflation hit 40-year highs of more than 8% during early 2022. Moreover, April of this year was the thirteenth month in a row during which price inflation was outpacing growth in average earnings

Housing Is Less Affordable, But There Are Plenty of Buyers

People are getting poorer in real terms, so it’s not surprising that April data also shows historic imbalances between disposable income and home prices. As of April this year, the Census Bureau’s estimate for the average sales price of new houses sold reached 10.3 times the size of disposable personal income per capita. The average home sale price has been more than nine times disposable income for the past six months of available data. In recent decades, home prices have only been this unaffordable in periods leading up to recessions and financial crises—i.e., 1980, 1991, and 2007. April’s home-price-to-income ratio is higher than in any other period in more than 45 years. 

One reason we have yet to see any sign of declining home prices in April data is that employment data—a lagging economic indicator—still showed a relatively strong job market in April. Although total non-farm employment remains below 2019 pre-covid levels, job growth has been strong enough to combine with monetary inflation and fuel big growth in prices. Moreover, as of April, mortgage rates had not yet climbed out of very-low-rate territory. The average 30-year fixed rate did not even reach 5 percent until mid April. This, combined with continued job growth, helped to keep demand high.(As of mid-June, however, the average 30-yar fixed rate is now 5.8 percent, a 13-year high.) 

So what will it take before we begin to see any real reductions in home prices? 

Unfortunately, the only real way out is probably a recession. This is thanks to a mixture of the regime’s fiscal and monetary policies. After so many months of reckless monetary inflation fueling out-of-control demand, all that newly-created money continues to chase relatively stagnant supply. Supply has been hobbled by lockdown-induced logistical bottlenecks, US sanctions on Russia, and rising energy prices due to the regime’s war on fossil fuels. Thus, consumers can’t benefit from the sort of supply-driven disinflationary forces that helped keep price inflation at manageable levels during many periods in the past. Now, we’re just left with surging demand fueled by new money, but without the market freedom necessary to provide breathing room through growth in supply. 

Will the Fed Tighten Enough?

Fed Chairman Jerome Powell denied at this month’s FOMC meeting that the Fed is trying to bring about a recession to rein in price growth. But whether or not that is the intent, even the Fed’s very mild tightening has already accelerated the US economy’s slide toward recession—or at least toward job losses. For instance, there is growing evidence of sporadic mass layoff events. JP Morgan announced last week “that it was laying off hundreds of employees due to rising mortgage rates amid a troubling housing market plagued by inflation.” Redfin last week announced layoffs for 470 workersHiring freezes and mass layoffs are a growing area of concern in Silicon Valley. 

If the US is indeed headed toward job losses and recession, the danger now is of the Fed not backing off monetary inflation long enough and hard enough to actually allow the economy to clean out the malinvestments and bubbles created by the monetary inflation of the past decade. The danger of too-weak tightening has been evident before. For example, the Fed moderately reined in monetary inflation during from 1972 to 1974. But these measures proved to be too little to really end the inflationary boom. Thus, much malinvestment and price inflation piled up until more tightening had to be done during the early 1980s to finally bring inflation under control. 

So the question now is this: will the Fed pull its foot off the easy-money accelerator only long enough to get a few flat months in price inflation and then return to the same old inflationary stimulus policies? That could win a brief reprieve for first-time home buyers and renters in terms of housing prices. But more than a brief reprieve is greatly needed. Of course, what the Fed should do is completely sell off its portfolio and stop manipulating interest rates altogether. But failing that, it needs to at least allow interest rates to rise enough—and shrink its portfolio enough—to allow for some real modicum of “normalization” in the financial sector. 

In any case, real deflation – both monetary inflation and price inflation – is necessary, and that can only be accomplished if the Fed can resist the temptation to keep doing what it’s been doing since 2008 with “non-traditional monetary policy” including quantitative easing, financial repression, and bubble creation. 

Tyler Durden
Wed, 06/29/2022 – 15:27

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Why Is The VIX So Low? A Surprising Answer Emerges In The Market’s Microstructure

Why Is The VIX So Low? A Surprising Answer Emerges In The Market’s Microstructure

One of the most frequent questions tossed around Wall Street trading desks (and strip clubs), and which was duly covered by Bloomberg recently in “Fear Has Gone Missing in Wall Street’s Slow-Motion Bear Market“, is why despite the crushing bear market and the coming recession, does the VIX refuse to rise sustainably above 30, or in other words, why is the VIX so low?

As Goldman’s Rocky Fishman wrote in a recent note “Option Markets Take the SPX Bear Market in Stride” (available to professional subs), “one of the most popular questions we have received is why the VIX hasn’t surpassed its March peak (36) despite the SPX being lower than it was in March and realized vol being higher than it was in March.”

Here, Fishman notes that implied volatility was unusually high in March, and the current VIX level (29) is only slightly low for the current level of realized vol. Furthermore, a VIX around 30 typically happens with the 5Y CDX HY spread above 600, and although it has risen steadily it’s currently in the mid 500’s.

Meanwhile, even as the VIX has fallen moderately since late April, both vol risk premium and skew have both fallen dramatically.

Picking up on this quandary, overnight JMorgan also joined the discussion with its analyst Peng Cheng laying out his own thoughts on why the VIX remains so low (note is also available to professional subs), and similar to Goldman notes that the current bear market, despite being deeper in magnitude, has produced VIX levels well below the peak observed during previous market sell-offs:

However, unlike Goldman which mostly analyzes the VIX in the context of a macro framework, JPM’s Cheng offers observations based on his analysis of market microstructure in both equity and options markets.

Cheng starts with the previously noted low realized volatility: as the JPM strategist writes, YTD, the SPX realized vol, measured on a close to close basis, is only 25.5, which means that delta-hedged put options would have lost money in the gamma component. From a technical perspective, JPM believes that return volatility is dampened by a lack of intraday price momentum and increasingly frequent occurrences of intraday price reversal. As seen in the next chart, intraday reversal has only started to become noticeable in the last two years. Prior to that, intraday momentum was the dominant market behavior.

This diminishing intraday price momentum has had a non-trivial impact on realized volatility, according to JPM which estimates that if the intraday return correlation remained the same as pre-pandemic, YTD volatility would be close to 28.8, or 3.3 vol points higher than realized.

As an aside, those asking for the reason behind this change in intraday patterns in the last couple of years, Cheng notes that “this is a complex topic” but in short, his view is that it is a result of 1) crowding in intraday momentum trading strategies and 2) a potential shift in option gamma dynamics as discussed below.

Supply/demand of S&P 500 options: Although the estimation of market level option gamma profile is highly dependent on many factors, including assumptions on open interest, OTC options, and leveraged ETFs, etc., in a report published earlier this year, JPM’s quants presented a more dynamic estimation of the gamma profile by using tick level data. Specifically, they assigned directions to SPX and SPY option trades based on their distance to the best bid/offer at the tick level, rather than the constant assumption of investors being outright long puts and short calls. The updated results are shown below.

Tha chart shows that starting in 2020, the put gamma imbalance has fallen meaningfully. This is the result of investors’ changing preference from buying outright puts to put spreads for protection, in JPM’s view. And year to date, the decline in gamma demand has not improved. Moreover, and echoing what we have said on several recent occasions, JPM notes that judging from the outright negative put gamma imbalance in early 2022, it appears that investors have been monetizing hedges that had been held since 2021 – note the consistently positive and relatively elevated put gamma imbalance throughout 2021, which suggests that protections were put on during this period.

More in the full note available to pro subs

Tyler Durden
Wed, 06/29/2022 – 15:05

via ZeroHedge News https://ift.tt/vkjs1NW Tyler Durden

Did Cassidy Hutchinson’s Testimony Clinch the Incitement Case Against Trump?


President Trump speaking behind a podium on January 6, 2021 at the Save America Rally

There is no question that Donald Trump’s rhetoric and inaction before and during the 2021 Capitol riot were reckless—so reckless that they easily justified his second impeachment. But as I have argued before, that does not mean he is guilty of incitement, a criminal charge that requires proof of intent. Does yesterday’s congressional testimony by Cassidy Hutchinson, a top aide to then–White House Chief of Staff Mark Meadows, make that charge more plausible?

Columbia law professor Daniel C. Richman is skeptical. “This is a dramatic last piece that enriches the story,” he told The New York Times. “But it’s not clear that it changes the fundamental question of criminal liability.”

By contrast, The Dispatch‘s David French, a conservative lawyer and former president of what is now the Foundation for Individual Rights and Expression, thinks “the case for prosecuting Trump is stronger than it’s ever been before” in light of Hutchinson’s testimony before the Select Committee to Investigate the January 6th Attack on the United States Capitol. Given French’s long record as a defender of the First Amendment, his take cannot be readily dismissed. But I still think the evidence falls well short of what would be required to convict Trump of incitement while respecting the freedom of speech guaranteed by the First Amendment.

French focuses on Hutchinson’s report that Trump knew some of the supporters who showed up for the pre-riot rally at the Ellipse were armed but nevertheless told the Secret Service to stop screening them with metal detectors. Hutchinson said she heard Trump say something like this: “You know, I don’t effing care that they have weapons. They’re not here to hurt me. Take the effing mags [magnetometers] away. Let my people in. They can march to the Capitol from here. Let the people in. Take the effing mags away.”

Some Trump supporters were carrying flagpoles that would later be weaponized against police. Rep. Liz Cheney (R–Wyo.), vice chair of the January 6 committee, yesterday noted that some protesters also had “pepper spray, knives, brass knuckles, tasers, body armor, gas masks, batons, [and] blunt weapons.” She added that the committee “has obtained police radio transmissions identifying individuals with firearms, including AR-15s, near the Ellipse on the morning of January 6th.”

Hutchinson says Deputy Chief of Staff Tony Ornato told Meadows about the weapons on the morning of January 6. The committee yesterday played a video of Hutchinson’s private testimony to that effect. “I remember Tony mentioning knives, guns in the form of pistols and rifles, bear spray, body armor, spears, and flagpoles,” she said. “Tony had related to me something to the effect of ‘These effing people are fastening spears onto the ends of flagpoles.'” When they shared this information with Meadows, Hutchinson said, he asked Ornato if the president was aware of it, and Ornato said he was.

Trump’s lack of concern about the weapons, which he viewed as unimportant because they would never be used against him, is further evidence of his reckless self-absorption. But it does not necessarily indicate that he expected or wanted his followers to breach the Capitol, vandalize the building, or attack police officers.

Trump’s main concern at that point seems to have been maximizing the audience for the incendiary speech in which he reiterated his fantasy of a stolen election, warned that American democracy and the republic itself would be destroyed if Joe Biden was allowed to take office, and urged his supporters to “fight like hell.” He did not want the Secret Service to turn away people who were carrying weapons because that would have made the crowd smaller.

The absurd vanity of Trump’s obsession with the crowd’s size—which harked back to the “alternative facts” he offered regarding the turnout at his inauguration—was obvious in the opening lines of his January 6 speech. “The media will not show the magnitude of this crowd,” he said. “Even I, when I turned on [the TV] today, I looked, and I saw thousands of people here, but you don’t see hundreds of thousands of people behind you because they don’t want to show that. We have hundreds of thousands of people here, and I just want them to be recognized by the fake news media. Turn your cameras, please, and show what’s really happening out here, because these people are not going to take it any longer. They’re not going to take it any longer. Go ahead. Turn your cameras, please. Would you show?”

French also notes Hutchinson’s testimony that Trump initially intended to join his supporters at the Capitol, which is about two miles from the Ellipse. That much also was apparent from the speech. “I know that everyone here will soon be marching over to the Capitol building to peacefully and patriotically make your voices heard,” Trump said. “We’re going to walk down Pennsylvania Avenue…and we’re going to the Capitol.”

Hutchinson testified that the danger posed by that plan was clear to Meadows four days before the riot. On January 2, she said, Trump lawyer Rudy Giuliani, who would also speak at the rally, told her about the planned march, and she described that conversation to Meadows. “I remember leaning against the doorway and saying, ‘I just had an interesting conversation with Rudy, Mark,'” she said. “‘It sounds like we’re going to go to the Capitol.’ He didn’t look up from his phone and said something to the effect of ‘There’s a lot going on, Cass, but I don’t know. Things might get real, real bad on January 6th.'”

On the morning of January 6, Hutchinson said, White House Counsel Pat Cipollone was determined to stop Trump from going to the Capitol because he was worried about potential criminal liability. “Mr. Cipollone said something to the effect of ‘Please make sure we don’t go up to the Capitol, Cassidy,'” she testified. “‘Keep in touch with me. We’re going to get charged with every crime imaginable if we make that movement happen.'”

Hutchinson also testified that Trump was enraged when the Secret Service told him, after his speech, that they were returning to the White House rather than driving to the Capitol. The Secret Service has disputed her secondhand account that Trump tried to grab the steering wheel of the SUV in which he was traveling and “lunge[d] towards” Secret Service agent Bobby Engel, “motion[ing] towards his clavicles [sic].” Citing “Secret Service officials who requested anonymity,” The New York Times reports that both Engel, the head of Trump’s protective detail, and the driver “were prepared to state under oath that neither man was assaulted by the former president and that he did not reach for the wheel.” But the Times adds that “the two men would not dispute the allegation that Mr. Trump wanted to go to the Capitol.”

In fact, Engel’s previous, private testimony confirms that Trump was frustrated by the Secret Service’s insistence that he return to the White House. “Engel told Jan. 6 select committee investigators that the two men discussed Trump’s desire to go to the Capitol and took different views on the topic,” Politico reported earlier this month, citing ” a person familiar with the agent’s congressional testimony.”

Trump’s desire to join his supporters at the Capitol underlines the point that he was heedless of the risks posed by moving the protest to the grounds of the building where Congress was about to certify Biden’s victory. Given the circumstances, violence was predictable. But that does not necessarily mean Trump anticipated it, let alone that he intended to incite it. Obviously, Trump should have anticipated violence. But if he did not, it would be consistent with his long record of failing to act as a decent, sensible, reasonably prudent person would.

Trump’s appalling irresponsibility was on display again after the riot started. Rather than try to stop the violence, he egged on his supporters, tweeting that Vice President Mike Pence, by refusing to unilaterally and illegally reject electoral votes for Biden, showed that he “didn’t have the courage to do what was necessary.” As French notes, video shows that the crowd outside the Capitol “surged” in response to that tweet. When Cipollone told Meadows that the protesters were “literally calling for the vice president to be effing hung,” Hutchinson testified, Meadows “responded something to the effect of ‘You heard him, Pat. He thinks Mike deserves it.'”

It has long been clear that Trump was, as French puts it, “morally and politically responsible” for the riot, which is why he was impeached. “There’s no credible argument that a mob would have stormed the Capitol if he had the basic decency to concede a race he clearly lost,” French notes.

For months, Trump ceaselessly promoted the “Stop the Steal” narrative, demanding that his supporters live in an alternative universe where he won reelection. He urged them to attend the “Save America” rally, which he predicted would be “wild” and portrayed as a last-ditch effort to stop the installation of an illegitimate president. His speech at the rally aimed to rile up fans who shared his fantasy, which he hoped would exert pressure on “weak” Republican legislators who did not. His behavior after the protest predictably turned violent was inexcusable.

But none of that necessarily means Trump was criminally responsible for the riot, a question that hinges on his intent. Under federal law, “to incite a riot” means “to organize, promote, encourage, participate in, or carry on a riot.” The crime, which is a felony punishable by up to five years in prison, “includes, but is not limited to, urging or instigating other persons to riot, but shall not be deemed to mean the mere oral or written (1) advocacy of ideas or (2) expression of belief, not involving advocacy of any act or acts of violence or assertion of the rightness of, or the right to commit, any such act or acts.”

Even advocacy of illegal behavior, the Supreme Court ruled in the 1969 case Brandenburg v. Ohio, is constitutionally protected speech unless it is both  “likely” to incite “imminent lawless action” and “directed” at that outcome. In Trump’s case, it surely was likely that at least some of his supporters would do more than “peacefully and patriotically make [their] voices heard.” But the fact remains that Trump—unlike the Ku Klux Klan leader charged with advocating violence in Brandenburg, whose conviction was nevertheless overturned—did not urge his supporters to break the law. Nor is it clear that he wanted them to do so, even if he was strikingly unconcerned when they did.

As French sees it, Hutchinson’s testimony reinforces the argument that “the attack on the Capitol was unfolding as he intended.” But that testimony is also consistent with what we knew about Trump long before the riot: He is a vain, reckless, petty, impulsive man who elevates his own interests above everything else. It is perfectly plausible that Trump either did not consider or did not care about the danger of violence that day. But the Brandenburg standard, which aims to protect freedom of speech by making it difficult to hold people criminally liable for the actions of listeners inspired by their words, requires more than that.

“The First Amendment is broadly protective even of political speech that outright advocates violence,” French notes. “There is (rightly) a very high constitutional barrier to criminally prosecuting any person for allegedly inciting violence. After all, the primary responsibility for a riot rests with the rioters—in the absence of direct command authority (like a general commands his troops), nobody can make a person riot.”

That principle barred the prosecution of an odious bigot in Brandenburg. It should not be sacrificed for the satisfaction of seeing a delusional demagogue get his comeuppance.

The post Did Cassidy Hutchinson's Testimony Clinch the Incitement Case Against Trump? appeared first on Reason.com.

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