Month: August 2022

What We Know About the FBI’s Latest National ‘Human Trafficking’ Sting


FBI agent questions young woman in Operation Cross Country

Operation Cross Country, the FBI’s annual vice squad bonanza disguised as a human-trafficking rescue mission, is back. This year’s operation was conducted throughout the first two weeks of August, involving more than 200 federal, state, and local law enforcement agencies across the U.S.

The FBI reports that Operation Cross Country 2022 located 37 missing minors, identified “more than 200 victims,” and led to the “identification or arrest” of 85 suspects. But it gives us little information beyond these broad statistics.

An array of videos and press releases about the initiative are long on generalized talk about how horrible human trafficking crimes are and how good it is to help victims—things few people would dispute. But they offer very few details about what this year’s Operation Cross Country actually entailed, or about the alleged perpetrators, the charges they face, or those they purportedly victimized.

This lack of concrete information suggests we may be dealing with highly propagandized spin on some—at best—run-of-the-mill work. If there’s one thing law enforcement agents are not, it’s modest. So if the FBI and its partners had actually arrested a bunch of sex traffickers or busted up some major human trafficking rings, they would surely tell us that in no uncertain terms.

Operation Cross Country arrests

But the FBI press release mentions only three federal cases, none involving sex trafficking or labor trafficking. The cases mentioned include one person failing to register as a sex offender and two “suspects who may have been involved with child sexual abuse material production or enticement violations.”

That doesn’t rule out further charges forthcoming, of course. But if past Operation Cross Country initiatives are any guide, you probably shouldn’t hold your breath.

Reason did a deep dive into Operation Cross Country a few years back, showcasing how the program largely cracked down on sex workers and their customers, along with other people suspected of petty offenses (like drug possession or driving without a license). Though the FBI, Homeland Security, and other federal agencies team up with local and state police, very few people are charged with federal crimes and even fewer with sex trafficking. But by lumping all the arrests together, the FBI generates large numbers and then blasts these out in misleading statements, touting the hundreds of arrests made during its sex trafficking sting. This splashy framing then gets lots of sensationalist media attention, leaving many readers with the impression that hundreds of sex traffickers were thwarted instead of hundreds of adults just trying to engage in consensual sex with other adults.

FBI agents during Operation Cross Country XIII

The FBI has sometimes listed the number of prostitution and solicitation arrests made during Operation Cross Country, as well as the number of arrests related to other charges. This year, however, it provided no such information.

Nor does it provide much information about the victims that were allegedly helped.

The FBI’s national press office says only that the operation led to “the location” of 141 adult and 84 minor “victims of human trafficking and related crimes.” It gives no information on how many were victims of human trafficking versus “related crimes,” nor any indication what these related crimes might be—leaving open the possibility that this might include prostitution even if no “trafficker” was involved. (It’s not uncommon for law enforcement to refer to prostitution generally as “sex trafficking” or human trafficking,” and to label adult sex workers as “victims” of it.) The feds don’t even give the average age of the minors found this year, merely telling us that one child—who may have been missing, a runaway, or a victim of sexual exploitation—was 11 years old and that “the average age of victims located in similar operations is approximately 15.5 years old.”

Statements from some field offices use even more vague language, stating that minors were either located or just “identified” and that the minors were not necessarily being victimized but merely “identified as high risk for exploitation.” Language from some field offices is also more tentative about the victim status of the adults. For instance, FBI Jacksonville said they “identified six adult potential human trafficking victims”—which, again, may simply mean they found and/or arrested six adult sex workers.

FBI agent rifling through a woman's purse

Historically, police partaking in Operation Cross Country—which launched in 2008—have even been known to arrest those described as victims, including minors. Law enforcement seems to be moving away from this, although it’s possible the backlash they faced over it has simply made them quieter about it.

Even without arrest, the treatment of those “rescued” can still be suspect. Teenage runaways found selling sex—who counted as sex trafficking victims even if there is no trafficker—may simply be returned to the places they ran away from, with little inquiry. Adults “rescued” may be given nothing more than a bag of toiletries and referrals to local shelters or charities.

Locating runaway children is, of course, a good thing. It is, however, a very different thing than busting up child trafficking rings. Yet everything about the FBI’s presentation of Operation Cross Country is designed to give the impression it’s doing the latter—and to get good publicity for it. It even provides TV-news-ready video footage for anyone’s use.

FREE MINDS

Texas school district pulls Bible, Diary of Anne Frank from library shelves amid challenges. The Texas school district of Keller has pulled 41 books—including an illustrated version of Anne Frank’s diary and the Bible—from its library as it reviews challenges to their inclusion on school shelves. “This includes [books] that were flagged but later approved by a committee to remain in libraries and classrooms,” reports The Dallas Morning News:

District spokesman Bryce Nieman said Keller school trustees recently approved a new policy that requires every book that was previously challenged to be reconsidered.

He said he is unsure of the timeline for when the re-review process will be completed.

Later in the day Tuesday, an email went out to Keller principals and librarians, acknowledging that many people had questions about the decision to remove books.

“Books that meet the new guidelines will be returned to the libraries as soon as it is confirmed they comply with the new policy,” associate superintendent John Allison wrote. “We hope to be able to expedite the process and return eligible books into circulation as soon as possible.”

The decision comes after Keller’s school district was investigated by the Texas Education Agency amid a wave of complaints from conservatives about books involving gender and sexuality. “For months, Keller parents, community members and staff met behind closed doors to review the challenged books and determine whether they should remain in classrooms or libraries. The debate is so heated members of the district’s Book Challenge Committees were asked to sign confidentiality agreements,” notes the paper. “Keller officials argued that the district kept its book challenge committee deliberations secret in part because of fear of retribution from Gov. Greg Abbott’s office.”

FREE MARKETS

Is nutrition advice free speech? The public interest law firm Institute for Justice and health coach Heather Kokesch Del Castillo have been fighting over that question in Florida for years after the state came after Del Castillo for giving (paid) nutrition advice without a license. “She argued that the First Amendment protected her right to be paid to give diet advice to willing customers,” notes Reason‘s Scott Shackford:

If she were to write a book providing diet advice, the state could not demand she be licensed as a dietician in Florida in order to sell the book in stores. That would be a clear First Amendment violation. Why would giving advice person-to-person be any different?

The U.S. Court of Appeals for the 11th Circuit did not agree. Now Del Castillo and Institute for Justice are asking the U.S. Supreme Court to intervene.

“This case illustrates that occupational-licensing boards are America’s newest censors,” said Senior Attorney Paul Sherman in a statement. “In cases across the country, boards charged with regulating everything from engineers to psychologists to dieticians have decided that the power to license an occupation gives them the right to tell ordinary Americans to shut up. It is time for the Supreme Court to make clear that it gives them no such thing.”

QUICK HITS

• Hearing aids can be sold over-the-counter, the Food and Drug Administration (FDA) says.

• Scientists are trying to bring back a tiger that has been extinct for nearly a century.

• A Florida appeals court has ruled that a 16-year-old girl is not mature enough to get a first-trimester abortion.

• Surprising no one except perhaps government regulators, a host of flavored disposable vapes have filled in the market gap left by an FDA crackdown on flavored cartridge-based vaping devices and Juul stopping flavored pod sales (a move that ultimately failed to placate the FDA). A Reuters analysis found that “flavored disposable vaping devices account for one-third of U.S. e-cigarette sales, up from less than 2% three years ago.”

• Arizona’s governor has signed new school choice legislation into law. The state is also expanding its right-to-try laws.

• Notoriously anti-Trump Republican Rep. Liz Cheney lost her primary race for Wyoming’s sole seat in the U.S. House of Representatives. “Despite solid conservative credentials and name recognition as the daughter of a former vice president, Cheney was opposed by a solid majority of her party due to her criticism” of former President Donald Trump,” notes Reason‘s Joe Lancaster. “Attorney Harriet Hageman will be the party’s nominee in November.”

• Trump wants to take American elections back to the 1960s, argues Ed Kilgore for Intelligencer.

• Has Tennessee’s sex offender registry “gone too far”? asks NewsChannel 5 Nashville.

The post What We Know About the FBI's Latest National 'Human Trafficking' Sting appeared first on Reason.com.

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The Increasingly Dangerous Variants of the “Most-Favored-Nation” Theory of Religious Liberty, Part III: Misconstruing the State Interest

Here I will consider how the MFN theory was expanded to its present bloated proportions. Recently members of the Court, and sometimes a majority, have developed variants of MFN that are far more far-reaching and skeptical than the modest heightened scrutiny suggested by Lukumi.

The key innovation, pioneered by Justice Gorsuch in his concurrence in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission (a case that did not mention MFN at all) and pursued further in his opinions on Covid vaccination, attributes to the challenged law a different purpose than it actually has, and then declares that the state has discriminated by carving out a secular but not a religious exception to that purpose. Call this MFN-2.

Masterpiece Cakeshop involved a challenge to an antidiscrimination statute by Jack Phillips, a baker who refused to make a cake for a same-sex wedding. Gorsuch thought that religious bias was revealed by a second set of cases that arose at about the same time.

William Jack requested cakes displaying antigay inscriptions. When bakers refused, he sued them for religious discrimination. The Colorado courts rejected his claims, because the bakers would not sell such cakes to anyone. Gorsuch however thought the cases were alike. Phillips is happy to sell his products to gay people. He just won’t engage in conduct that endorses same-sex weddings. A “cake celebrating same-sex marriage” is part of an event in which he is unwilling to participate. Gorsuch thought that, because Phillips and the bakers who refused Jack’s order were alike declining to send messages, their different treatment revealed discrimination against Phillips’s religion.

That claim was not confined to Gorsuch’s concurrence. Justice Kennedy’s majority opinion summarily declared an “indication of hostility [in] the difference in treatment between Phillips’ case and the cases of other bakers who objected to a requested cake on the basis of conscience and prevailed before the Commission.” This summary statement is, perhaps, an early embrace of MFN-2 by the Court. If so, it is so conclusory that we must look to Gorsuch for an account of the reasoning.

Justice Kagan responded that what Phillips refused to sell “was simply a wedding cake—one that (like other standard wedding cakes) is suitable for use at same-sex and opposite-sex weddings.” Jack’s case is different, because the bakers would not have sold the cake he requested to anyone. Those cakes manifested his religious views, but there is no obligation to sell products that manifest religious views. A vendor of hats is permitted to omit yarmulkes from its inventory. The actions of the bakers in Jack’s case were not excused by exceptions to the statute. They were outside its coverage.

Gorsuch’s reasoning overlooks the level of generality at which Colorado law actually operates. The state explained in its brief: “If a retail bakery will sell a cake of a particular design to some customers, it has no constitutional right to withhold that same cake from others because of their race, sex, faith, or sexual orientation.” The bakers Jack approached would not have sold the cakes he requested to anyone. The state’s brief continues:

But businesses do not violate public accommodations laws when, relying upon general terms of service, they decline to sell products with particular designs to all of their customers. Businesses trigger those laws only when they refuse to sell a product to customers because of their protected characteristics, despite selling the same product to others.

Phillips would have sold the identical cakes to heterosexual couples.

Gorsuch also deploys MFN-2 in Dr. A. v. Hochul, in which a state allowed medical but not religious exemptions from a vaccine requirement for health care workers. He takes the pertinent state interest to be getting people vaccinated in order to achieve herd immunity. But the state asserted a different interest: promoting public health. That end is not promoted by vaccinating people for whom it is medically counterindicated. It is promoted by vaccinating the religious. It is thus not true that the secular exemption “undermines the govern­ment’s asserted interests in a similar way.” He can reach that conclusion only by mischaracterizing the government interests.

A judge who feels free to do this is absolutely unconstrained. He can find religious discrimination in any law he likes, by deeming any boundary to a statute’s scope—and all statutes are bounded; none regulate all of human conduct – to be an exception to the purpose of the statute.

Note that MFN-2 is merely a triggering right that generates strict scrutiny. It does not say anything about how a court should proceed when it applies that scrutiny. Because MFN-2 misconceives the state interest, however, it makes it likely that the strict scrutiny analysis will be botched, because the court is already committed to misunderstanding the interest that the state is promoting. This, we shall see, is precisely what happens in MFN-6.

The post The Increasingly Dangerous Variants of the "Most-Favored-Nation" Theory of Religious Liberty, Part III: Misconstruing the State Interest appeared first on Reason.com.

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The Increasingly Dangerous Variants of the “Most-Favored-Nation” Theory of Religious Liberty, Part III: Misconstruing the State Interest

Here I will consider how the MFN theory was expanded to its present bloated proportions. Recently members of the Court, and sometimes a majority, have developed variants of MFN that are far more far-reaching and skeptical than the modest heightened scrutiny suggested by Lukumi.

The key innovation, pioneered by Justice Gorsuch in his concurrence in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission (a case that did not mention MFN at all) and pursued further in his opinions on Covid vaccination, attributes to the challenged law a different purpose than it actually has, and then declares that the state has discriminated by carving out a secular but not a religious exception to that purpose. Call this MFN-2.

Masterpiece Cakeshop involved a challenge to an antidiscrimination statute by Jack Phillips, a baker who refused to make a cake for a same-sex wedding. Gorsuch thought that religious bias was revealed by a second set of cases that arose at about the same time.

William Jack requested cakes displaying antigay inscriptions. When bakers refused, he sued them for religious discrimination. The Colorado courts rejected his claims, because the bakers would not sell such cakes to anyone. Gorsuch however thought the cases were alike. Phillips is happy to sell his products to gay people. He just won’t engage in conduct that endorses same-sex weddings. A “cake celebrating same-sex marriage” is part of an event in which he is unwilling to participate. Gorsuch thought that, because Phillips and the bakers who refused Jack’s order were alike declining to send messages, their different treatment revealed discrimination against Phillips’s religion.

That claim was not confined to Gorsuch’s concurrence. Justice Kennedy’s majority opinion summarily declared an “indication of hostility [in] the difference in treatment between Phillips’ case and the cases of other bakers who objected to a requested cake on the basis of conscience and prevailed before the Commission.” This summary statement is, perhaps, an early embrace of MFN-2 by the Court. If so, it is so conclusory that we must look to Gorsuch for an account of the reasoning.

Justice Kagan responded that what Phillips refused to sell “was simply a wedding cake—one that (like other standard wedding cakes) is suitable for use at same-sex and opposite-sex weddings.” Jack’s case is different, because the bakers would not have sold the cake he requested to anyone. Those cakes manifested his religious views, but there is no obligation to sell products that manifest religious views. A vendor of hats is permitted to omit yarmulkes from its inventory. The actions of the bakers in Jack’s case were not excused by exceptions to the statute. They were outside its coverage.

Gorsuch’s reasoning overlooks the level of generality at which Colorado law actually operates. The state explained in its brief: “If a retail bakery will sell a cake of a particular design to some customers, it has no constitutional right to withhold that same cake from others because of their race, sex, faith, or sexual orientation.” The bakers Jack approached would not have sold the cakes he requested to anyone. The state’s brief continues:

But businesses do not violate public accommodations laws when, relying upon general terms of service, they decline to sell products with particular designs to all of their customers. Businesses trigger those laws only when they refuse to sell a product to customers because of their protected characteristics, despite selling the same product to others.

Phillips would have sold the identical cakes to heterosexual couples.

Gorsuch also deploys MFN-2 in Dr. A. v. Hochul, in which a state allowed medical but not religious exemptions from a vaccine requirement for health care workers. He takes the pertinent state interest to be getting people vaccinated in order to achieve herd immunity. But the state asserted a different interest: promoting public health. That end is not promoted by vaccinating people for whom it is medically counterindicated. It is promoted by vaccinating the religious. It is thus not true that the secular exemption “undermines the govern­ment’s asserted interests in a similar way.” He can reach that conclusion only by mischaracterizing the government interests.

A judge who feels free to do this is absolutely unconstrained. He can find religious discrimination in any law he likes, by deeming any boundary to a statute’s scope—and all statutes are bounded; none regulate all of human conduct – to be an exception to the purpose of the statute.

Note that MFN-2 is merely a triggering right that generates strict scrutiny. It does not say anything about how a court should proceed when it applies that scrutiny. Because MFN-2 misconceives the state interest, however, it makes it likely that the strict scrutiny analysis will be botched, because the court is already committed to misunderstanding the interest that the state is promoting. This, we shall see, is precisely what happens in MFN-6.

The post The Increasingly Dangerous Variants of the "Most-Favored-Nation" Theory of Religious Liberty, Part III: Misconstruing the State Interest appeared first on Reason.com.

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S&P 3500 By Year End If QT Continues

S&P 3500 By Year End If QT Continues

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

“Don’t Fight the Fed” echoes through the financial media, Wall Street, and in the minds of retail and institutional investors. The phrasing pertaining to Fed-generated liquidity is often the sole basis for investors to chase bull markets when the Fed employs easy monetary policy. Unfortunately, some investors forget the phrase is equally meaningful when the Fed is not friendly to markets. As we share in this article, we have developed a model to track Fed liquidity, allowing us to quantify the Fed’s influence on the S&P 500.

Before unveiling our liquidity formula and its forecast for the S&P 500, it’s essential to discuss the three primary drivers by which the Fed is influencing liquidity: Reverse Repurchase (RRP), Treasury General Account (TGA), and the Fed’s balance sheet.

Reverse Repurchase Agreements (RRP)

The New York Fed uses numerous repo programs to manage the supply of cash in the banking system, thereby maintaining the Fed Funds rates within the FOMC’s target range. Currently, they are employing its RRP program to accomplish this task. In an RRP transaction, the Fed sells securities to a counterparty and simultaneously agrees to repurchase them at a future date. The duration is often overnight. The transaction temporarily reduces the supply of money from the banking system. Increasing daily RRP balances results in less system liquidity, and a declining balance reduces liquidity.

As shown below, RRP has been around for 20 years but was scarcely used until early 2021. The various pandemic-related rounds of fiscal stimulus and massive Fed liquidity efforts left banks and money market funds with excessive levels of cash. The excess liquidity would have pushed the Fed Funds rate lower than the target rate without the RRP program. As such, RRP sucks up liquidity, making Fed Funds easier for the Fed to manage.

The Fed has other repo tools, such as repurchase agreements and the standing repo facility, which can dampen money market rates by providing the banking system with liquidity.

The RRP facility has been increasing rapidly and now sits at over $2 trillion daily. Rising RRP balances are a drain on liquidity.

As money market yields rise with Fed Funds and asset markets perform poorly, investors tend to prefer higher cash balances. Such should keep RRP levels elevated for the time being.

Treasury General Account (TGA)

The Treasury General Account is the U.S. Treasury Department’s checking account. The account is held at the Federal Reserve Bank of New York. Like your checking account, the TGA receives deposits (tax receipts and proceeds from debt issuance) and makes payments.

The Fed doesn’t manage the TGA balances, but the surplus cash balance held at the Fed affects banking system liquidity. Fed liabilities (bank reserves) must equal its assets. Bank reserves are fodder allowing banks to make loans and, by default, print money. When the TGA account increases, bank reserves must fall, reducing banking system liquidity. Conversely, a shrinking TGA account adds reserves and liquidity to the banking system.

The graph below shows that TGA balances are elevated versus the pre-pandemic years but have fallen as the banking system normalizes from the massive fiscal cash injections. It will likely drop a bit more, but the TGA will not significantly impact liquidity, barring unusual circumstances.

Fed Balance Sheet

The Fed’s assets, mainly Treasury bonds and Mortgage-Backed Securities (MBS), are the liquidity elephant in the room. Its assets currently account for 75% of total Fed-sponsored liquidity and historically average over 90%.

When the Fed does Quantitative Easing (QE), they remove securities from the bond markets and, in their place, leaves reserves with the banks. Again, bank reserves can lead to loan creation which is the creation of new money. Ergo, QE adds to the system’s liquidity. Conversely, Quantitative Tightening (QT) removes liquidity and reserves from the system and increases the amount of securities in the market.

For this reason, QE tends to be bullish for stocks, and QT is bearish.

Liquidity and Stock Prices

With an understanding of the three key factors driving banking system liquidity, we can create a Fed liquidity model. The size of the Fed’s assets less the sum of the TGA and RRP equals the amount of Fed-generated liquidity in the system. Recent changes in net liquidity shed light on how the S&P 500 trends.

The two graphs below compare the liquidity measure and the S&P 500. The first graph shows how the S&P 500 rose in line with liquidity through 2021, and both reversed simultaneously to start 2022. The dotted lines are quarterly moving averages to help smooth out the data. The moving averages track each other almost perfectly this year. The green dashed line forecasts liquidity based solely on the Fed’s plan to reduce its balance sheet by $95 billion a month. The S&P 500 could be close to 3500 by year-end if they follow through with their QT plans and the correlation holds up.

The second graph shares the same data but in scatter plot form. The correlation between liquidity and the S&P 500 is statistically significant, with an R-squared of 0.57. The orange dot shows the S&P 500 is about 3% overpriced based on liquidity.

The model does have an important caveat. Other factors become the predominant driver of market returns when the Fed is inactive and liquidity is relatively stable. 

Summary

The Fed is not the only game in town, but they are the biggest game in town. While many other factors account for stock price performance, liquidity may be the most important to grasp.

To drive home this point, recall March 2020, when covid struck the economy. Global economies were shutting down worldwide. Unemployment was soaring, and the economy was careening toward a depression. Despite zero clarity on the economic future, stocks began to rally strongly in late March. Why? Liquidity via fiscal stimulus and a surge in Fed QE purchases drove markets higher. The economic situation was awful, and earnings outlooks were crumbling, but liquidity trumped fundamentals. 

By accepting what the Fed does, right or wrong, and closely following its actions, we can quantify how liquidity will steer markets. On top of fundamental and technical analysis, this additional layer of research helps us better navigate the market’s twists, turns, and trends when the Fed is active.

Tyler Durden
Wed, 08/17/2022 – 08:10

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Futures Tumble After UK Double-Digit Inflation Shock Sparks Surge In Yields

Futures Tumble After UK Double-Digit Inflation Shock Sparks Surge In Yields

Futures were grinding gingerly higher, perhaps celebrating the end of the Cheney family’s presence in Congress, and looked set to re-test Michael Hartnett bearish target of 4,328 on the S&P (which marked the peak of yesterday’s meltup before a waterfall slide lower when spoos got to within half a point of the bogey), when algos and the few remaining carbon-based traders got a stark reminder that central banks will keep hammering risk assets after the UK reported a blistering CPI print, which at a double digit 10.1% was not only higher than the highest forecast, but was the highest in 40 years.

The print appeared to shock markets out of their month-long levitating complacency, and yields – both in the UK and the US – spiked…

… and with yields surging, futures had no choice but to notice and after trading at session highs just before the UK CPI print, they have since tumbled more than 40 points and were last down 0.85% or 37 points to 4,271.

Nasdaq 100 futures retreated 0.9% signaling a selloff in technology names will continue. The dollar rose as investors awaited the minutes of the Fed’s last policy meeting for clues on policy makers’ sensitivity to weaker economic data.

In US premarket trading, retail giant Target slumped 4% after reporting earnings that missed expectations despite still predicting a rebound. Applied Materials and PayPal dropped at least 1.3%. Tech stocks are the forefront of the growing pessimism over equity valuations on the back of Fed rate increases. The S&P 500 had posted a small gain on Tuesday, aided by earnings reports from retailers Walmart Inc. and Home Depot. Here are some of the other biggest U.S. movers today:

  • Manchester United (MANU US) rises as much as 17% in US premarket trading before trimming most of the gains, after Tesla CEO Elon Musk said he was buying the English football club but later added that he was joking.
  • Hill International (HIL US) shares rise 61% in premarket trading hours after it announced Global Infrastructure Solutions will commence an all-cash tender offer for $2.85/share in cash, representing a premium of 63% to the last closing price.
  • BioNTech (BNTX US) was initiated with a market perform recommendation at Cowen, which expects demand for Covid-19 vaccines to mirror annual flu trends as the pandemic enters its endemic phase.
  • Bed Bath & Beyond (BBBY US) shares surge 20% in premarket trading, putting the stock on track for its sixth day of gains. The home-goods company has helped reinvigorate a wave of meme stock buying
  • Agilent (A US) saw its price target boosted at brokers as analysts say the scientific testing equipment maker’s results were strong thanks to growth in biopharma and a recovery in China, while the company’s guidance was on the conservative side. Shares rose .
  • Jefferies initiated coverage of Waldencast Plc (WALD US) class A with a buy recommendation as analyst Stephanie Wissink sees 29% upside potential.
  • Sea Ltd. (SE US) ADRs slipped as much as 2.1% in US premarket trading, extending Tuesday’s declines, as Morgan Stanley cut its PT on expectations of slowing growth at the Shopee owner’s e-commerce business in the third quarter.
  • Weber (WEBR US) downgraded to sell from neutral at Citi, which says there are too many concerns to remain on the sidelines, including a decline in point-of-sale traffic and macro factors like inflation weighing on consumer demand

In the past two months, US stocks rallied on signs of peaking inflation and an earnings-reporting season that saw four out of five companies meeting or beating estimates. Boosted by relentless systematic (CTA) buying and retail-driven short squeezes, as well as a surge in buybacks, stocks recovered more than 50% of the bear market retracement. Yet, continuing rate hikes and the likelihood of a recession in the world’s largest economy are weighing on sentiment. Meanwhile, concern is growing that Fed rate setters will remain focused on the fight against inflation rather than supporting growth.

“We expect the FOMC minutes to have a hawkish tilt,” Carol Kong, strategist at Commonwealth Bank of Australia Ltd., wrote in a note. “We would not be surprised if the minutes show the FOMC considered a 100 basis-point increase in July.”

In Europe, the Stoxx 600 fell after a strong start amid signs the continent’s energy crisis is worsening. Benchmark natural-gas futures jumped as much as 5.1% on expectations the hot weather will boost demand for cooling. In the UK, consumer-price growth jumped to 10.1%, sending gilts tumbling. Real estate, retailers and miners are the worst performing sectors. The Stoxx 600 Real Estate Index declined 2%, making it the worst-performing sector in the wider European market, as focus turned to UK inflation that soared to double digits for the first time in four decades and also to today’s FOMC minutes. German and Swedish names almost exclusively account for the 10 biggest decliners. TAG Immobilien drops 5.4%, Wallenstam is down 4.7%, Castellum falls 4% and LEG Immobilien declines 3.3%. The sector tumbles on rising bond yields, with 10y Bund yield up 11bps, and dwindling demand for Swedish real estate amid rising rates.

Earlier on Wednesday, stocks rose in Asia amid speculation that China may deploy more stimulus to shore up its ailing economy while Japanese exporters were boosted by a weaker yen. After a string of weak data driven by a property-sector slump and Covid curbs, China’s Premier Li Keqiang asked local officials from six key provinces that account for 40% of the economy to bolster pro-growth measures. The MSCI Asia Pacific Index advanced as much as 0.8%, with consumer-discretionary and industrial stocks such as Japanese automakers Toyota and Honda among the leaders on Wednesday. The benchmark Topix erased its year-to-date loss. Chinese food-delivery platform Meituan also rebounded after dropping more than 9% in the previous session on a Reuters report that Tencent may divest its stake in the firm. Chinese stocks erased declines early in the day, as investors hoped for more economic stimulus after a surprise rate cut on Monday failed to excite the market. Premier Li Keqiang has asked local officials from six key provinces that account for about 40% of the country’s economy to bolster pro-growth measures.

“I believe policymakers have the tools to prevent a hard landing if needed,” Kristina Hooper, chief global market strategist at Invesco, said in a note. “I find investors are overly pessimistic about Chinese stocks — which means there is the potential for positive surprise.” Asia’s stock benchmark is trading at mid-June levels as traders attempt to determine the trajectory of interest-rate hikes and economic growth globally — as well as the impact of China’s property crisis and Covid policies. Meanwhile, minutes of the US Federal Reserve’s July policy meeting, out later Wednesday, will be carefully parsed. New Zealand stocks closed little changed as the country’s central bank raised interest rates by a half percentage point for a fourth-straight meeting. Australia’s S&P/ASX 200 index rose 0.3% to close at 7,127.70, supported by materials and consumer discretionary stocks. South Korea’s benchmark missed out on the rally across Asian equities, as losses by large-cap exporters weighed on the measure

In FX, the Bloomberg Dollar Spot Index rose as the dollar gained versus most of its Group-of-10 peers. The pound was the best G-10 performer while gilts slumped, led by the short end and sending 2-year yields to their highest level since 2008, after UK inflation accelerated more than expected in July. The yield curve inverted the most since the financial crisis as traders ratcheted up bets on BOE rate hikes in money markets, wagering on 200 more basis points of hikes by May. The euro traded in a narrow range against the dollar while the region’s bonds slumped, led by the front end. Scandinavian currencies recovered some early European session losses while the aussie, kiwi and yen extended their slide in thin trading. EUR/NOK one-day volatility touched a 15.12% high before paring ahead of Norges Bank’s meeting Thursday where it may have to raise rates by a bigger margin than indicated in June given Norway’s inflation exceeded forecasts for a fourth straight month, hitting a new 34-year high. Consumer sentiment in Norway fell to the lowest level since data began in 1992, according to Finance Norway. New Zealand’s dollar and bond yields both rose in response to the Reserve Bank hiking rates by 50bps, while flagging concern about labor market pressures and consequent wage inflation; the currency subsequently gave up gains in early European trading. The Aussie slumped after data showing the nation’s wages advanced at less than half the pace of inflation in the three months through June, backing the Reserve Bank’s move to give itself more flexibility on interest rates.

In rates, treasuries held losses incurred during European morning as gilt yields climbed after UK inflation rose more than forecast. US 10-year around 2.87% is 6.5bp cheaper on the day vs ~13bp for UK 10-year; UK curve aggressively bear-flattened following inflation data, with long-end yields rising about 10bp. Front-end UK yields remain cheaper by ~20bp, off session highs, leading a global government bond selloff. US yields are higher on the day by by 4bp-7bp; focal points of US session are 20-year bond auction and FOMC minutes release an hour later. Treasury auctions resume with $15b 20-year bond sale at 1pm ET; WI 20-year yield at around 3.35% is ~7bp richer than July’s sale, which stopped 2.7bp through the WI level.

In commodities, oil fluctuated between gains and losses, and was in sight of a more than six-month low — reflecting lingering worries about a tough economic outlook amid high inflation and tightening monetary policy.  Spot gold is little changed at $1,774/oz

Looking at the day ahead, the FOMC minutes from July will be the main highlight, and the other central bank speaker will be Fed Governor Bowman. Otherwise, earnings releases include Target, Lowe’s and Cisco Systems, and data releases include US retail sales and UK CPI for July.

Market Snapshot

  • S&P 500 futures down 0.3% to 4,293.00
  • STOXX Europe 600 little changed at 443.30
  • MXAP up 0.5% to 163.48
  • MXAPJ up 0.2% to 530.38
  • Nikkei up 1.2% to 29,222.77
  • Topix up 1.3% to 2,006.99
  • Hang Seng Index up 0.5% to 19,922.45
  • Shanghai Composite up 0.4% to 3,292.53
  • Sensex up 0.5% to 60,168.83
  • Australia S&P/ASX 200 up 0.3% to 7,127.68
  • Kospi down 0.7% to 2,516.47
  • German 10Y yield little changed at 1.06%
  • Euro little changed at $1.0178
  • Gold spot down 0.0% to $1,775.21
  • U.S. Dollar Index little changed at 106.50

Top Overnight News from Bloomberg

  • More market prognosticators are alighting on the idea of benchmark Treasury yields sliding to 2% if the US succumbs to a recession. That’s an out-of-consensus call, compared with Bloomberg estimates of about a 3% level by the end of this year and similar levels through 2023. But it’s a sign of how growth worries are forcing a rethink in some quarters
  • The euro-area economy grew slightly less than initially estimated in the second quarter as signs continue to emerge that momentum is unraveling. Output rose 0.6% from the previous three months between April and June, compared with a preliminary reading of 0.7%, Eurostat said Wednesday
  • Egypt became a prime destination for hot money by tethering its currency and boasting the world’s highest interest rates when adjusted for inflation
  • Norway’s $1.3 trillion sovereign wealth fund, the world’s largest, posted its biggest loss since the pandemic as rate hikes, surging inflation and Russia’s invasion of Ukraine spurred volatility. It lost an equivalent of $174 billion in the six months through June, or 14.4%

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks just about shrugged off the choppy lead from the US where markets were tentative amid mixed data signals and strong retailer earnings, but with gains capped overnight ahead of the FOMC Minutes and as participants digested another 50bps rate hike by the RBNZ. ASX 200 swung between gains and losses with the index indecisive amid a slew of earnings and with strength in the consumer sectors offset by underperformance in tech, energy and healthcare. Nikkei 225 climbed above the 29,000 level with the index unfazed by mixed data releases in which Machinery Orders disappointed although both Exports and Imports topped forecasts. Hang Seng and Shanghai Comp were somewhat varied with Hong Kong led higher by tech amid plenty of attention on Meituan after reports its largest shareholder Tencent could reduce all or the bulk of its shares in the Co. which a Tencent executive later refuted, while the mainland was less decisive amid headwinds from the ongoing COVID situation and with power restrictions disrupting activity in Sichuan, although reports also noted that Chinese Premier Li told top provincial officials that they must have a sense of urgency to consolidate the economic recovery and reiterated to step up macro policies.

Top Asian News

  • RBNZ hiked the OCR by 50bps to 3.00%, as expected, while it stated that conditions need to continue to tighten and they agreed that maintaining the current pace of tightening remains the best means. RBNZ also agreed that further increases in the OCR were required to meet the remit objective and that domestic inflationary pressures had increased since May. Furthermore, the RBNZ raised its projections for the OCR and inflation with the OCR seen at 3.69% in Dec. 2022 (prev. 3.41%) and at 4.1% for both Sept. 2023 and Dec. 2023 (prev. 3.95%), while it sees annual CPI at 4.1% by Sept. 2023 (prev. 3.0%).
  • RBNZ Governor Orr stated at the press conference that they are not forecasting a recession but expected below-potential growth amid subdued consumer spending. Governor Orr also stated that they did not discuss a 75bps rate hike today and that 50bps moves have been orderly and sufficient, while he added that getting rates to 4% would buy comfort for the policy committee and that a Cash Rate of around 4% is unambiguously above neutral and sufficient to meet the inflation mandate.
  • Chongqing, China is to curb power use for eight days for industry.
  • China’s Infrastructure Boom Gets Swamped by Property Woes
  • Tencent 2Q Revenue Misses Estimates
  • Hong Kong Denies Democracy Advocates Security Law Jury Trial
  • UN Expert Says Xinjiang Forced Labor Claims ‘Reasonable’
  • Singapore’s COE Category B Bidding Hits New Record
  • Delayed Deals Add to Floundering Singapore IPO Market: ECM Watch

European bourses have dipped from initial mixed/flat performance and are modestly into negative territory, Euro Stoxx 50 -0.5%. Stateside, futures are under similar pressure awaiting fresh corporate updates and the July FOMC Minutes, ES -0.6%. Fresh drivers relatively limited throughout the session with known themes in play and focus on upcoming risk events; stocks also suffering on further hawkish yield action. Lowe’s Companies Inc (LOW) Q1 2023 (USD): EPS 4.68 (exp. 4.58), Revenue 27.47 (exp. 28.12bln); expect FY22 total & comp. sales at bottom-end of outlook range, Operating Income and Diluted EPS at top-end. Target Corp (TGT) Q1 2023 (USD): EPS 0.39 (exp. 0.72), Revenue 26.0bln (exp. 26.04bln); current trends support prior guidance.

Top European News

  • German Gas to Last Less Than 3 Months if Russia Cuts Supply
  • European Gas Surges Again as Higher Demand Compounds Supply Pain
  • Entain Falls; Citi Views Fine Negatively but Notes Steps by Firm
  • UK Inflation Hits Double Digits for the First Time in 40 Years
  • Crypto.com Receives Registration as UK Cryptoasset Provider

FX

  • Greenback underpinned ahead of US retail sales data and FOMC minutes, DXY holds tight around 106.500.
  • Pound pegged back after spike in wake of stronger than expected UK inflation metrics, Cable hovers circa 1.2100 after fade into 1.2150.
  • Kiwi retreats following knee jerk rise on the back of hawkish RBNZ hike, NZD/USD near 0.6300 from 0.6380+ overnight peak.
  • Aussie undermined by marginally softer than anticipated wage prices and lower RBA tightening bets in response, AUD/USD well under 0.7000 vs 0.7026 at one stage.
  • Yen weaker as yield differentials widen again, but Euro cushioned by more pronounced EGB reversal vs USTs, USD/JPY probes 21 DMA just below 135.00, EUR/USD bounces from around 1.0150 towards 1.0200.
  • Loonie and Nokkie soft amidst latest slippage in oil, USD/CAD closer to 1.2900 than 1.2800, EUR/NOK nudging 9.8600 within 9.8215-9.8740 range.

Fixed Income

  • Debt retracement ongoing and gathering pace ahead of Wednesday’s key risk events.
  • Bunds now closer to 154.00 than 156.00 and 157.00 only yesterday, Gilts not far from 114.50 vs almost 116.00 and 117.00+ earlier this week and T-note sub-119-00 vs 119-31 at best on Monday.
  • Sonia strip hit hardest as markets price in aggressive BoE hikes in response to UK inflation data toppy already elevated expectations.

Commodities

  • Crude benchmarks are currently little changed overall, having recovered from a bout of initial pressure; newsflow thin awaiting fresh JCPOA developments
  • Spot gold is little changed overall but with a slight negative bias as the USD remains resilient and outpaces the yellow metal as the haven of choice.
  • Aluminium is the clear outperformer amid updates from Norsk Hydro that they are shutting production at their Slovalco site (175k/T year) by end-September, due to elevated energy prices.
  • OPEC Sec Gen says he sees a likelihood of an oil-supply squeeze this year, open for dialogue with the US. Still bullish on oil demand for 2022. Too soon to call the outcome of the September 5th gathering. Spare capacity at around the 2-3mln BPD mark, “running on thin ice”.
  • US Private Inventory Data (bbls): Crude -0.4mln (exp. -0.3mln), Cushing +0.3mln, Gasoline -4.5mln (exp. -1.1mln), Distillates -0.8mln (exp. +0.4mln).
  • Shell (SHEL LN) announced it is to shut its Gulf of Mexico Odyssey and Delta crude pipelines for two weeks in September for maintenance, according to Reuters.
  • Uniper (UN01 GY) says the energy supply situation in Europe is far from easing and gas supply in winter remains “extremely challenging”.
  • China sets the second batch of the 2022 rare earth mining output quota at 109.2k/T, via Industry Ministry; smelting/separation quota 104.8k/T.

Geopolitics

  • China’s military is to partake in a military exercise in Russia, their participation has nothing to do with the international situation.
  • Taiwan’s Defence Ministry says they have detected 21 Chinese aircraft and five ships around Taiwan on Wednesday, via Reuters.
  • Iran is calling on the US to free jailed Iranian’s, says they are prepared for prisoner swaps, via Fars.

US Event Calendar

  • 07:00: Aug. MBA Mortgage Applications, prior 0.2%
  • 08:30: July Retail Sales Advance MoM, est. 0.1%, prior 1.0%
  • 08:30: July Retail Sales Ex Auto MoM, est. -0.1%, prior 1.0%
  • 08:30: July Retail Sales Control Group, est. 0.6%, prior 0.8%
  • 10:00: June Business Inventories, est. 1.4%, prior 1.4%
  • 14:00: July FOMC Meeting Minutes

DB’s Tim Wessel concludes the overnight wrap

Starting in Europe, where the looming energy crisis remains at the forefront. An update from our team, who just published the fourth edition of their indispensable gas monitor (link here), where they note the surprisingly fast rebuild of German gas storage, driven by reductions in industrial activity, reduces the risk that rationing may become reality this winter. Many more insights within, so do read the full piece for analysis spanning scenarios. Keep in mind, that while gas may be available, it is set to come at a higher clearing price, which manifest itself in markets yesterday where European natural gas futures rose a further +2.64% to €226 per megawatt-hour, just shy of their closing record at €227 in March. But, that’s still well beneath their intraday high from March, where at one point they traded at €345. Further, one-year German power futures increased +6.30%, breaching €500 for the first time, closing at €507. Germany is weighing consumer relief measures in light of climbing consumer prices and also announced that planned nuclear facility closures would be “temporarily” postponed.

The upward energy price pressure and attenuated (albeit, not eliminated) risk of rationing pushed European sovereign yields higher. 10yr German bunds climbed +7.1bps to 0.97%, while 10yr OATs kept the pace, increasing +7.4bps. 10yr BTPs increased +15.9bps, widening sovereign spreads, while high yield crossover spreads widened +10.2bps in the credit space.

Equities were resilient, however, with the STOXX 600 posting a +0.16% gain after flitting around a narrow range all day. Regional indices were also robust to climbing energy prices, with the DAX up +0.68% and the CAC +0.34% higher. In the States the S&P 500 registered a modest +0.19% gain, with the NASDAQ mirroring the index, falling -0.19%. Retail shares drove the S&P on the day, with the two consumer sectors both gaining more than +1%, following strong earnings reports from Wal Mart and Home Depot.

Treasury yields also climbed, but the story was the further flattening in the curve. 2yr yields were +7.5bps higher while 10yr yields managed to increase just +1.6bps, leaving 2s10s at its second most negative close of the cycle at -46bps. 10yr yields are another basis point higher this morning. A hodgepodge of data painted a mixed picture. Housing permits beat expectations (+1674k vs. +1640k) while starts (+1446k vs. +1527k) fell to their slowest pace since February 2021. However, under the hood, even permits weren’t necessarily as strong as first glance, as single family permits fell -4.3% with gains in multifamily pushing the aggregate higher. Indeed, year-over-year, single family permits have now fallen -11.7% while multifamily permits are +23.5% higher. So the single family housing market continues to feel the impact of Fed tightening. Meanwhile, industrial production climbed +0.6% month-over-month (vs. +0.3%), with capacity utilization hitting its highest level since 2008 at 80.3%.

Drifting north of the border, Canadian inflation slowed to 7.6% YoY in July in line with estimates, while the average of core measures climbed to a record 5.3%. Bank of Canada Governor Macklem penned an opinion piece saying that while it looks like inflation may have peaked, “the bad news is that inflation will likely remain too high for some time.” In turn, Canadian OIS rates by December climbed +16.2bps.

In other data, the expectations component of the German ZEW survey fell to -55.3, its lowest level since October 2008 at the depths of the GFC. In the UK, regular pay (excluding bonuses) fell by -3.0% in real terms over the year to April-June 2022, its fastest decline on record.

On the Iranian nuclear deal, EU negotiators reportedly found Iran’s response constructive, though Iran still had some concerns. Notably, Iran is looking for guarantees that if a future US administration withdraws from the JCPOA the US will “have to pay a price”, seeking insulation from the vagaries of representative democracy.

Asian equity markets are trading higher after Wall Street’s solid performance overnight. The Nikkei (+0.76%) is leading gains across the region with the Hang Seng (+0.57%), the Shanghai Composite (+0.23%) and the CSI (+0.51%) all rebounding from its opening losses this morning. US futures are struggling to gain traction this morning with the S&P 500 (-0.02%) and NASDAQ 100 (-0.09%) trading just below flat.

The Reserve Bank of New Zealand lifted its official cash rate (OCR) for the fourth consecutive time by an expected +50bps to 3%, a seven-year high, while bringing forward the estimate of future rate increases. The central bank expects the OCR will reach 3.69% at the end of this year and expects it to peak at 4.1% in March 2023, higher and sooner than previously forecast.

Early morning data coming out from Japan showed that exports rose +19.0% y/y in July (v/s +17.6% expected) posting 17 straight months of gains while imports advanced +47.2% (v/s +45.5% expected) driven by global fuel inflation and a weakening yen. With the imports outweighing exports, the nation reported trade deficit for the 14th consecutive month, swelling to -2.13 trillion yen in July (v/s -1.91 trillion yen expected) compared to a revised deficit of -1.95 trillion yen in June.

In terms of the day ahead, the FOMC minutes from July will be the main highlight, and the other central bank speaker will be Fed Governor Bowman. Otherwise, earnings releases include Target, Lowe’s and Cisco Systems, and data releases include US retail sales and UK CPI for July.

Tyler Durden
Wed, 08/17/2022 – 07:55

via ZeroHedge News https://ift.tt/NxrPJu9 Tyler Durden

Peter Schiff Pans Joe Biden’s Unwarranted Inflation Victory Lap

Peter Schiff Pans Joe Biden’s Unwarranted Inflation Victory Lap

Via SchiffGold.com,

Peter Schiff appeared on the Newsmax Saturday Report along with former Rep. Peter King (R-NY) to talk about President Joe Biden’s unwarranted inflation victory lap.

The CPI for July came in slightly cooler than June’s sizzling 9.1%. But even at 8.5%, CPI remains near 40-year highs. But Biden focused on the unchanged month-on-month CPI to declare victory over inflation and claimed he’s building “an economy that works for everyone.”

Host Rita Cosby kicked off the interview by asking Rep. King his views on funding for 87,000 IRS agents in the “Inflation Reduction Act.” King said the spending in the bill will be bad enough and that it will cause “long-term consequences,” but the beefed-up IRS will cause even more damage. He warned the agency will be weaponized to go after political opponents.

Peter Schiff went a step further and said he doesn’t even think the US should have an income tax.

I think the government should fund itself with excise taxes. I don’t think subjecting Americans to these types of audits is the type of country that the founding fathers envisioned when they created this republic.”

Schiff also said he doesn’t think the IRS will use its new manpower to go after billionaires and millionaires.

They can avoid taxes legally. It’s the middle class, it’s small business owners, it’s people who are self-employed — that’s who’s in the IRS crosshairs. And their going to be hit not only with huge tax bills, but interest and penalties that will actually exceed what they owed in taxes.”

CBO analysis of the “Inflation Reduction Act” found that it would collect some $20 billion from people making under $400,000 per year. That breaks a Democrat promise not to raise taxes on people making less than $400K. But Schiff said it’s worse than that.

The inflation tax hits hardest those who earn the least. The fact that Biden is doing a victory dance, I want to throw a flag for taunting.”

Schiff pointed out that while gasoline prices fell last month, driving CPI lower, food prices went up, along with costs in a lot of other categories.

So, it wasn’t a good month. It was another bad month for consumers. It was just masked by a temporary drop in gasoline prices for one month.”

Rep. King wrapped up the interview, saying Biden is “going against reality.” He also pointed out that even though the president can’t control everything in the economy, “the wounds we suffered today are all self-inflicted by Joe Biden.”

Tyler Durden
Wed, 08/17/2022 – 07:20

via ZeroHedge News https://ift.tt/PU0nBfq Tyler Durden

Today in Supreme Court History: August 17, 1988

8/17/1988: Republican party nominates George H.W. Bush for President. He would appoint David Souter and Clarence Thomas to the Supreme Court.

President George H.W. Bush’s appointees to the Supreme Court

 

 

The post Today in Supreme Court History: August 17, 1988 appeared first on Reason.com.

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Arizona Expands the Right To Try New Medical Treatments


packs of pills

Arizona has made headlines for school choice and occupational licensing reform, but it’s also a leader in allowing terminal patients access to promising treatments that have yet to be approved by the Food and Drug Administration (FDA).

Such Right-to-Try laws are now in place in about half of all states, but they don’t address advances in medical technology creating treatments that can’t pass through traditional regulatory channels because they’re tailored for specific patients. Last week, Arizona Gov. Doug Ducey signed legislation expanding the right to try to include personalized medicine.

“The governor signed S.B. 1163, which will help Arizonans get the care they need sooner,” Ducey’s office announced on August 9. “The legislation builds on ‘Right to Try’—a historic, national policy that was developed in Arizona at the Goldwater Institute. The policy ensures that individuals with terminal illnesses are able to seek out investigational medication when their approved treatment options have been exhausted.”

The original Right-to-Try legislation was and is groundbreaking, giving desperate patients hope of help from treatments that are still working their way through the FDA’s interminable clinical trials.

“Right-to-try laws are state-level reforms that aim to allow terminally ill patients to gain access to experimental drugs without the permission of the Food and Drug Administration (FDA). Under the current model, access to experimental drugs is controlled by the FDA, which must give its approval after it receives an application from a patient’s physician,” notes BallotPedia. “Right-to-try laws allow patients and physicians to approach a drug manufacturer directly to ask for access to the drug.”

Right to Try was adopted by 27 states by mid-2016, adds BallotPedia. Counterpart federal legislation became law in 2018. The legislation doesn’t guarantee patients access to treatments, but it partially gets the government out of the way of patients and physicians seeking to try medications that have passed Phase I clinical trials.

But medical technology is taking an increasingly customized approach, seeking to address ailments as they appear in individual patients and not across populations. The legacy regulatory system isn’t really set up to deal with customized modern medicine.

“Rapid medical innovations have made it possible to take an individual’s genetic information and create a treatment for that individual person,” notes the Right-to-Try website, sponsored by the Goldwater Institute. “More patients, especially those with rare and ultra-rare illnesses, will pursue these treatments when they have exhausted other options. Unfortunately, the FDA’s current regulatory scheme is not designed to handle these kinds of individual treatments, and that will keep life-saving medication out of the hands of patients unless reforms are adopted.”

Goldwater highlights the Riley family of Ahwatukee, Arizona, two of whose daughters, Olivia and Keira, were diagnosed with Metachromatic Leukodystrophy, a rare and degenerative brain disease that robs victims of their abilities before taking their lives. The condition of Olivia, now three, was rapidly progressing and beyond the reach of even experimental treatments. However, newborn Keira was still asymptomatic and could potentially benefit from newly developed gene therapy. But that personalized treatment doesn’t qualify for the FDA’s usual approval process or for the original Right-to-Try shortcut. That left the family scrambling.

“This treatment for gene therapy is only available in Milan, Italy, because it wasn’t yet FDA approved,” Kendra Riley, the girls’ mother, comments in a video about their plight. “Unfortunately, we had to gather the community to help us and raise hundreds of thousands of dollars to move to Italy for six months during the global pandemic.”

Not every experimental treatment works, of course. But when you’re out of options and trying to rescue your children from a terminal illness, you do what you can.

“They literally took her as an individual, looked at her DNA and how they could help change it and modify it to make it better so that her body would then function as it should have to begin with,” Kendra adds.

Now back home in Arizona, the Riley family reports that Keira is developing normally, having apparently benefitted from the therapy. Her older sister, Olivia, unfortunately, is not expected to survive childhood.

While Right to Try 2.0 expands patients’ options, it’s far from perfect. Both the original legislation and the updated version are limited carve-outs from a vast regulatory apparatus that slows the approval of medical treatments to a crawl, with the cost measured not only in money, but in lives.

“Drug lag costs lives because people suffer and die from disease that might be treatable, if only there were more investment in finding a cure,” argued Jessica Flanigan, an associate professor at the University of Richmond, in her 2017 book, Pharmaceutical Freedom: Why Patients Have a Right to Self-Medicate. “Requirements that raise the cost of development make it less likely that they will succeed. Premarket testing conditions also cost lives because patients with conditions that could be treated or cured by unapproved drugs suffer and die while they are waiting for approval.”

Like others, Flanigan recommends restricting the FDA and other regulatory agencies, if they are permitted to have any role at all, to informational certification. Patients and physicians could follow or disregard such guidance as they please.

But that’s a major reform for another day, though not too far in the future, we can hope. In the meantime, we’re limited to nibbling away at barriers regulators place in the way of desperate patients seeking treatments for intractable illnesses. Right-to-Try laws, both versions 1.0 and 2.0, are part of that effort to give patients just a little more leeway. So are efforts by Sens. Cory Booker (D–N.J.) and Rand Paul (R–Ky.) to allow patients limited access to Schedule 1 drugs, including MDMA and psilocybin, that have been through Phase 1 trials.

“As a physician, I know how important Right to Try is for patients facing a life-threatening condition.” comments Paul. “Unfortunately, the federal bureaucracy continues to block patients seeking to use Schedule I drugs under Right to Try.”

The federal bureaucracy continues to block hopeful patients from doing a lot of things they would do if free to exercise their discretion. Right to Try 2.0 is only a small improvement. But a small improvement is better than none, and the Riley family is strong evidence that such reforms are worth the effort.

The post Arizona Expands the Right To Try New Medical Treatments appeared first on Reason.com.

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Today in Supreme Court History: August 17, 1988

8/17/1988: Republican party nominates George H.W. Bush for President. He would appoint David Souter and Clarence Thomas to the Supreme Court.

President George H.W. Bush’s appointees to the Supreme Court

 

 

The post Today in Supreme Court History: August 17, 1988 appeared first on Reason.com.

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Arizona Expands the Right To Try New Medical Treatments


packs of pills

Arizona has made headlines for school choice and occupational licensing reform, but it’s also a leader in allowing terminal patients access to promising treatments that have yet to be approved by the Food and Drug Administration (FDA).

Such Right-to-Try laws are now in place in about half of all states, but they don’t address advances in medical technology creating treatments that can’t pass through traditional regulatory channels because they’re tailored for specific patients. Last week, Arizona Gov. Doug Ducey signed legislation expanding the right to try to include personalized medicine.

“The governor signed S.B. 1163, which will help Arizonans get the care they need sooner,” Ducey’s office announced on August 9. “The legislation builds on ‘Right to Try’—a historic, national policy that was developed in Arizona at the Goldwater Institute. The policy ensures that individuals with terminal illnesses are able to seek out investigational medication when their approved treatment options have been exhausted.”

The original Right-to-Try legislation was and is groundbreaking, giving desperate patients hope of help from treatments that are still working their way through the FDA’s interminable clinical trials.

“Right-to-try laws are state-level reforms that aim to allow terminally ill patients to gain access to experimental drugs without the permission of the Food and Drug Administration (FDA). Under the current model, access to experimental drugs is controlled by the FDA, which must give its approval after it receives an application from a patient’s physician,” notes BallotPedia. “Right-to-try laws allow patients and physicians to approach a drug manufacturer directly to ask for access to the drug.”

Right to Try was adopted by 27 states by mid-2016, adds BallotPedia. Counterpart federal legislation became law in 2018. The legislation doesn’t guarantee patients access to treatments, but it partially gets the government out of the way of patients and physicians seeking to try medications that have passed Phase I clinical trials.

But medical technology is taking an increasingly customized approach, seeking to address ailments as they appear in individual patients and not across populations. The legacy regulatory system isn’t really set up to deal with customized modern medicine.

“Rapid medical innovations have made it possible to take an individual’s genetic information and create a treatment for that individual person,” notes the Right-to-Try website, sponsored by the Goldwater Institute. “More patients, especially those with rare and ultra-rare illnesses, will pursue these treatments when they have exhausted other options. Unfortunately, the FDA’s current regulatory scheme is not designed to handle these kinds of individual treatments, and that will keep life-saving medication out of the hands of patients unless reforms are adopted.”

Goldwater highlights the Riley family of Ahwatukee, Arizona, two of whose daughters, Olivia and Keira, were diagnosed with Metachromatic Leukodystrophy, a rare and degenerative brain disease that robs victims of their abilities before taking their lives. The condition of Olivia, now three, was rapidly progressing and beyond the reach of even experimental treatments. However, newborn Keira was still asymptomatic and could potentially benefit from newly developed gene therapy. But that personalized treatment doesn’t qualify for the FDA’s usual approval process or for the original Right-to-Try shortcut. That left the family scrambling.

“This treatment for gene therapy is only available in Milan, Italy, because it wasn’t yet FDA approved,” Kendra Riley, the girls’ mother, comments in a video about their plight. “Unfortunately, we had to gather the community to help us and raise hundreds of thousands of dollars to move to Italy for six months during the global pandemic.”

Not every experimental treatment works, of course. But when you’re out of options and trying to rescue your children from a terminal illness, you do what you can.

“They literally took her as an individual, looked at her DNA and how they could help change it and modify it to make it better so that her body would then function as it should have to begin with,” Kendra adds.

Now back home in Arizona, the Riley family reports that Keira is developing normally, having apparently benefitted from the therapy. Her older sister, Olivia, unfortunately, is not expected to survive childhood.

While Right to Try 2.0 expands patients’ options, it’s far from perfect. Both the original legislation and the updated version are limited carve-outs from a vast regulatory apparatus that slows the approval of medical treatments to a crawl, with the cost measured not only in money, but in lives.

“Drug lag costs lives because people suffer and die from disease that might be treatable, if only there were more investment in finding a cure,” argued Jessica Flanigan, an associate professor at the University of Richmond, in her 2017 book, Pharmaceutical Freedom: Why Patients Have a Right to Self-Medicate. “Requirements that raise the cost of development make it less likely that they will succeed. Premarket testing conditions also cost lives because patients with conditions that could be treated or cured by unapproved drugs suffer and die while they are waiting for approval.”

Like others, Flanigan recommends restricting the FDA and other regulatory agencies, if they are permitted to have any role at all, to informational certification. Patients and physicians could follow or disregard such guidance as they please.

But that’s a major reform for another day, though not too far in the future, we can hope. In the meantime, we’re limited to nibbling away at barriers regulators place in the way of desperate patients seeking treatments for intractable illnesses. Right-to-Try laws, both versions 1.0 and 2.0, are part of that effort to give patients just a little more leeway. So are efforts by Sens. Cory Booker (D–N.J.) and Rand Paul (R–Ky.) to allow patients limited access to Schedule 1 drugs, including MDMA and psilocybin, that have been through Phase 1 trials.

“As a physician, I know how important Right to Try is for patients facing a life-threatening condition.” comments Paul. “Unfortunately, the federal bureaucracy continues to block patients seeking to use Schedule I drugs under Right to Try.”

The federal bureaucracy continues to block hopeful patients from doing a lot of things they would do if free to exercise their discretion. Right to Try 2.0 is only a small improvement. But a small improvement is better than none, and the Riley family is strong evidence that such reforms are worth the effort.

The post Arizona Expands the Right To Try New Medical Treatments appeared first on Reason.com.

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