Month: August 2022

Protecting People from Their Own Religious Communities: Subpoenas, Political Disclosures, Public Records

This new article of mine will be coming out next year in the Journal of Law and Religion, and I thought I’d serialize it here; there’s still plenty of time for editing, so I’d love to hear people’s feedback. Here’s the rest of Part I.

[* * *]

Let’s now turn to some other areas beyond pseudonymity of litigants.

[A.] Allowing Subpoenas Used to Identify Defendants

So far we have discussed people who want to call on the coercive power of the court system without having to name themselves as plaintiffs. But people may also want to stop coercive subpoenas aimed at uncovering their identities as potential defendants. Those people’s concerns are often just about being fired or professionally blacklisted if they are identified as having publicly criticized their employer, or about being retaliated against by the government if they are identified as having publicly criticized government officials.[1] But sometimes the defendants also argue that they would be ostracized by their religious communities.[2]

Some defendants in lawsuits claiming copyright infringement by viewers and sharers of pornographic films, for instance, have sought pseudonymity based in part on the argument that “having my name or identifying or personal information further associated with the [porn film] is embarrassing, damaging to my reputation in the community at large and in my religious community”[3] (though it’s not clear how much weight that argument had in the courts’ decisions). Likewise, a potential defendant in a copyright case brought by the Jehovah’s Witnesses sought anonymity in part because “if Watch Tower discovers his identity, the revelation of his identity would damage or destroy his relationships with friends and family who are active members of the Jehovah’s Witness community”—”he has been part of the Jehovah’s Witness community his whole life, and so the pain of social exclusion would be overwhelming.”[4] A similar argument was made by an Orthodox Jewish blogger (“Orthomom”) whose identity was being sought, as a potential libel defendant, via a subpoena directed to her blog hosting company.[5]

Courts will sometimes allow defendants to resist a subpoena even apart from the effects on the defendants in their religious communities, especially if the court concludes that the lawsuit is likely to be legally unfounded[6] and the lawsuit is over “political, religious, or literary speech.”[7] But the question remains: Should such threat of stigma specifically within a religious community be part of the analysis, as the defendants in the just-cited cases argued?[8]

Note that here, unlike with plaintiff-side anonymity, the defendants often do seek to hide their identities even from their litigation adversaries, and not just from the public. And if the court concludes that plaintiff has a viable legal claim, then it would presumably deny the defendant’s request for total anonymity, since the plaintiff must be entitled to identify the defendant to gather information needed to allow the plaintiff’s case to go forward—for instance, information needed to establish the defendant’s state of mind, or to eventually satisfy a judgment against the defendant. Nonetheless, the court could still order that the defendant’s identity be revealed only subject to a protective order thar bars the plaintiff from revealing the information to others[9] (or perhaps even bars the plaintiff’s lawyers from revealing the information to plaintiff[10]).

[B.] Disclosing Information About Political Contributions and Political Petition Signatures

Political contributions—either to candidates or to independent advocacy groups that seek to influence elections—often have to be disclosed under campaign finance laws, and are then made available to the public. The same is true in many states for petition signatures (whether for initiative, referendum, recall, or candidate qualification).[11]

The Supreme Court has held that donor or signer information could be treated as confidential if there is sufficient evidence of likely “harassment” or “reprisals” against donors,[12] including firing by employers.[13] It’s not clear just what might qualify as harassment or reprisals, but some donors or signers might argue that they face a risk of ostracism by their religious community or even excommunication if their identities become known. (Imagine, for instance, people who would like to donate to a pro-abortion-rights initiative, or to sign such a petition, but are afraid of being shunned by their or their family’s religious group, which believes abortion is murder.)

[C.] Public Records

The possible reactions of a person’s religious community can likewise potentially affect judgments about anonymity in public records.[14] This is especially so as to license applications: For instance, New York law requires a license to possess a firearm, and the licenses are public records unless (among other things) the licensing offer finds that “the applicant has reason to believe he or she may be subject to unwarranted harassment upon disclosure of such information.”[15] Applicants could presumably claim, by analogy to the pseudonymity cases, that they belong to a pacifist religious community that frowns on firearms (or at least handguns),[16] and that disclosing their applications might prompt “unwarranted harassment” from coreligionists.[17]

Likewise, some states treat liquor licenses as public records.[18] These applications may have to include the names of individual corporate officers and shareholders,[19] and even if they just have the names of the corporate or LLC owner, public record documents for those entities will generally include the name of corporate officers. Some people might be reluctant to have their connection to alcohol businesses publicized, because they might be afraid the publicity will lead them to be condemned by their coreligionists. Public records laws may leave room for government agencies to accommodate such desire for privacy, if the laws have exceptions for when disclosure would produce “unwarranted harassment”[20] or would be “a clearly unwarranted invasion of privacy,” judged by “the customs, mores, or ordinary views of the community.”[21]

Marriage licenses are also public records in many states.[22] Some applicants might want the records concealed on the grounds that many in their religious community would condemn their particular marriage (e.g., because community members condemn interfaith marriages, or reject divorces and view a remarriage as bigamous).

Finally, more generally, public records laws can be used to disclose a wide range of other contacts between people and the government (such as arrest reports). In some situations, these disclosures could similarly jeopardize people’s standing in their religious communities, and public agencies might argue that they should redact those people’s names when releasing information in response to public records requests.[23]

 

[1] See, e.g., In re Anonymous Online Speakers, 661 F.3d 1168, 1173 (9th Cir. 2011) (discussing the “fear of economic or official retaliation”)

[2] For an example of the threat of such ostracism, levied against the writer of anonymous letter, see Brief of Appellee Rabbi Jack Bieler, Hager-Katz v. Mevlin J. Berman Hebrew Academy, 2010 WL 4890009, *7 (Md. Ct. Spec. App. Oct. 8, 2010) (quoting the rabbi’s letter):

This past Shabbat I suggested that this incident should inspire all of us to be extremely careful about engaging in Lashon HaRa [i.e., derogatory speech]. But in the event that the author’s identity can be incontrovertibly established, we think it additionally appropriate that this individual be welcomed neither into our synagogue nor our homes until such a time that she can demonstrate to the community’s satisfaction that full repentance has been achieved.

[3] See, e.g., In re BitTorrent Adult Film Copyright Infringement Cases, 296 F.R.D. 80, 90 (E.D.N.Y.), report & recommendation adopted sub nom. Patrick Collins, Inc. v. Doe 1, 288 F.R.D. 233 (E.D.N.Y. 2012)

[4] In re DMCA Subpoena to Reddit, Inc., No. 3:19-mc-80005-SK, at 4 (N.D. Cal. May 17, 2019).

[5] See Memorandum of Law of Proposed Intervenor “Orthomom” in Opposition to Petitioner’s Application for Pre-Commencement Disclosure, Greenbaum v. Google, Inc., No. 102063/07, 2007 WL 4162535, at (N.Y. Sup. Ct. N.Y. Cty. Mar. 13, 2007), granted, 18 Misc. 3d 185 (N.Y. Sup. Ct. 2007) (granting motion on the grounds that Orthomom’s posts weren’t libelous as a matter of law, and not discussing the religious ostracism concerns):

[S]ignificant community norms in the Orthodox Jewish community disapprove of criticizing leaders, and particularly of making those criticisms in ways that bring Jews or Judaism into disrepute outside the community. Critics and their families can be shunned, even deprived of their livelihoods because many Orthodox Jews work for businesses that are run by fellow Orthodox Jews, or that depend on Orthodox customers. . . . Some of Orthomom’s readers have specifically taken her to task for spreading “lashon hara,” or evil talk. Thus, Orthomom faces a serious risk within her community if, as a result of Greenbaum’s petition for discovery, she is identified as the author of these criticisms of wrongdoing within the community.

[6] Doe v. Cahill, 884 A.2d 451, 460 (Del. 2005); Dendrite Int’l, Inc. v. Doe, 775 A.2d 756, 760–61 (N.J. Super. Ct. App. Div. 2001).

[7] Compare Obi Pharma, Inc., v. Does 1-20, No. 16CV2218 H (BGS), 2017 WL 1520085, *3 (S.D. Cal. Apr. 27, 2017) (“Cahill itself involved political speech and appears to be reserved for ‘political, religious, or literary speech.'”), with Ciabattoni v. Teamsters Loc. 326, No. N15C-04-059 VLM, 2018 WL 2418388, *3 (Del. Super. Ct. May 29, 2018) (“Plaintiff’s argument that Cahill only applies to political speech is without merit.”).

[8] See, e.g., Mobilisa, Inc. v. Doe, 170 P. 3d 712, 720 (Ariz. Ct. App. 2007) (concluding that, in consider whether to enforce a subpoena in such a case, courts should look beyond just the legal validity of the plaintiff’s claims and also engaging in a “a balancing step” in which they could consider, among other things, “the potential consequence of a discovery order to the speaker”); In re Indiana Newspapers Inc., 963 N.E.2d 534, 552 (Ind. Ct. App. 2012) (same).

[9] See, e.g., In re BitTorrent Adult Film Copyright Infringement Cases, 296 F.R.D. 80, 90 (E.D.N.Y.), report and recommendation adopted sub nom. Patrick Collins, Inc. v. Doe 1, 288 F.R.D. 233 (E.D.N.Y. 2012).

[10] See, e.g., Strike 3 Holdings, LLC v. Doe, No. 20CIV4501WFKVMS, 2021 WL 535218, *7 (E.D.N.Y. Feb. 12, 2021).

[11] See, e.g., Doe v. Reed, 561 U.S. 186 (2010).

[12] Id. at 200; Brown v. Socialist Workers ’74 Campaign Comm., 459 U.S. 87, 100 (1982).

[13] Brown, 459 U.S. at 99.

[14] I use “anonymity” and “pseudonymity” largely interchangeably here, as do the cases dealing with pseudonymity in litigation; whether it’s sealing a license application entirely (which would in effect provide for anonymous licensing), or replacing a litigant’s or applicant’s name with “Jane Doe” or initials or the like, the point is that the person’s name will be concealed from the public (though, in litigation, not from the adversary, see supra note 8).

[15] N.Y. Pen. L. 400.00(5)(b)(iii).

[16] See, e.g., Amish America, Do Amish Use Guns?, https://ift.tt/37p5XMB (“Amish will not bear arms against others, but they do use firearms for hunting and other purposes”).

[17] I set aside here the special case of when parental notification requirements for abortion can be overridden because a court is persuaded that such parental notification would be against the child’s best interests. Compare Planned Parenthood, Sioux Falls Clinic v. Miller, 63 F.3d 1452, 1460 (8th Cir. 1995) (holding that such exemptions from parental notification are constitutionally required), with Planned Parenthood of Blue Ridge v. Camblos, 155 F.3d 352, 367 (4th Cir. 1998) (holding the contrary). (Even if Roe v. Wade and Planned Parenthood v. Casey are overruled, such questions would likely still arise under many states’ abortion laws.) Presumably when there is such a best-interests override, the anticipated reactions of parents—and whether judges would see those reactions as excessive and therefore harmful to the child—would be considered, and that would include religiously motivated reactions. But this would presumably limited to the attitudes of the parents, whether religious or not, and wouldn’t focus on the reactions of their religious community more broadly.

[18] See, e.g., Wash. State Liquor & Cannabis Bd., On Premises, Licensees, https://ift.tt/6xo7fCk.

[19] See, e.g., Cal. Dep’t of Alcoholic Beverage Control, Individual Personal Affidavit, https://ift.tt/56PnejN.

[20] See, e.g., Freedom Watch, Inc. v. Mueller, 453 F. Supp. 3d 139, 157 (D.D.C. 2020) (applying “unwarranted harassment” test under FOIA), appeal dismissed, No. 20-5071, 2020 WL 4931696 (D.C. Cir. July 30, 2020)

[21] Michigan Fed’n of Teachers & Sch. Related Pers., AFT, AFL-CIO v. Univ. of Michigan, 481 Mich. 657, 662 (2008) (cleaned up).

[22] Compare, e.g., Vt. Stat. Ann. § 5132 (treating marriage licenses as public records) with Cal. Family Code §§ 500–511 (generally allowing for confidential marriages, so long as the parties have lived together before marriage).

[23] Cf. Holy Spirit Ass’n for Unification of World Christianity, Inc. v. U. S. Dep’t of State, 526 F. Supp. 1022, 1034 (S.D.N.Y. 1981) (withholding the names of people who had alleged misconduct on religious group’s part, because “[t]o disclose the names could subject these individuals to the fear of harassment and needless humiliation”).

The post Protecting People from Their Own Religious Communities: Subpoenas, Political Disclosures, Public Records appeared first on Reason.com.

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1st Cir. Ruling Promising for Pseudonymity in Title IX Cases Alleging Biased Sex Assault Investigations

From yesterday’s decision of the First Circuit in Doe v. MIT, by Judge Bruce Selya, joined by Judges Rogeriee Thompson and Gustavo Gelpi (note that I submitted an amicus brief in the case, in support of neither side):

[I.] The court reaffirms that there is a “strong presumption against the use of pseudonyms in civil litigation,” but declines to follow many other courts in saying that this stems directly from the Federal Rules of Civil Procedure, or to the right of access to court records involved in sealing decisions. Rather, the court reasons,

[F]ederal courts enforce the presumption against party pseudonyms in civil litigation under their inherent power to “formulate procedural rules not specifically required by the Constitution or the Congress.” This inherent power applies foursquare to the presumption against pseudonymity, which is a “polic[y] intrinsic to the litigation process.” Courts have distilled such a presumption from a brew of custom and principle, including the values underlying the right of public access to judicial proceedings and documents under the common law and First Amendment….

Judicial hostility to a party’s use of a pseudonym springs from our Nation’s tradition of doing justice out in the open, neither “in a corner nor in any covert manner.” In defending that tradition, we have explained that “[p]ublic access to judicial records and documents allows the citizenry to ‘monitor the functioning of our courts, thereby insuring quality, honesty and respect for our legal system.'” “Identifying the parties to the proceeding is an important dimension of publicness.” That is because—to a certain degree—letting a party hide behind a pseudonym dims the public’s perception of the matter and frustrates its oversight of judicial performance.

Lacking knowledge of the parties’ names, the public could learn virtually nothing about a case outside the facts and arguments in the record. The record, though, is not the alpha and omega of public concern. To take one example of important extra-record data, the real-world aftermath of a suit will sometimes bear upon the assessment of whether justice was done. Another example is the kind of institutional rot that is scrubbed from the record: judicial conflicts of interest, ex parte contacts, and the like. Anonymizing the parties lowers the odds that journalists, activists, or other interested members of the public would catch wind of such mischief. See Globe Newspaper Co. v. Pokaski (1st Cir. 1989) (acknowledging “the contribution to governance of investigative reporting” regarding such matters).

An even thornier issue involves protecting the appearance of fairness in judicial proceedings. “Litigating behind a curtain creates a shroud of mystery, giving the impression that something secret is going on.” Secrecy breeds suspicion. Some may believe that a party’s name was masked as a means of suppressing inconvenient facts and that the court was either asleep at the wheel or complicit in the cover up. It is no answer to dismiss such beliefs as conspiracy theories because “justice must satisfy the appearance of justice.” Distrust is toxic to the judiciary’s authority, which “depends in large measure on the public’s willingness to respect and follow its decisions.” A judicial system replete with Does and Roes invites cynicism and undermines public confidence in the courts’ work.

[II.] The court goes on to elaborate the following approach to when the presumption can be rebutted, which is quite different from the multi-factor balancing tests that many courts follow:

[D]istrict courts enjoy broad discretion to identify the relevant circumstances in each case and to strike the appropriate balance between the public and private interests…. Even so, … some general guidelines may be helpful to the district courts.

[A.] For a start, we are committed to the proposition that courts—in balancing the relevant interests—must not lose sight of the big picture. Litigation by pseudonym should occur only in “exceptional cases.” Lawsuits in federal courts frequently invade customary notions of privacy and—in the bargain—threaten parties’ reputations. The allegations are often serious (at least to the parties) and motivated adversaries do not lack for procedural weapons.

Facing the court of public opinion under these conditions is sometimes stressful—but that is the nature of adversarial litigation. If commonplace lawsuit-induced distress were enough to justify the use of a pseudonym, anonymity would be the order of the day: Does and Roes would predominate. We think it follows that a well-calibrated inquiry needs some workable methodology for sorting out the (relatively few) “exceptional cases” in which pseudonymity should be allowed.

{The party seeking pseudonymity bears the burden of rebutting the strong presumption against it. In most cases, the district court should require a declaration or affidavit either by the moving party or by someone with special knowledge who can speak to the need for anonymity in that case.} …

[B.] [W]e think it useful to sketch four general categories of exceptional cases in which party anonymity ordinarily will be warranted.

[1.] The first paradigm involves a would-be Doe who reasonably fears that coming out of the shadows will cause him unusually severe harm (either physical or psychological). See, e.g., Doe v. Ayers (9th Cir. 2015) (allowing use of pseudonym premised upon evidence that disclosure of plaintiff-inmate’s history of being sexually abused “would create a significant risk of severe harm at the hands of other inmates”); Advanced Textile (allowing use of pseudonym for plaintiffs who “fear[ed] extraordinary retaliation, such as deportation, arrest, and imprisonment”); Lauren B. v. Baxter Int’l Inc. & Subsidiaries Welfare Benefit Plan for Active Emps. (allowing anonymity when public disclosure would threaten plaintiff’s recovery from longstanding eating disorder).

[2.] The second paradigm involves cases in which identifying the would-be Doe would harm “innocent non-parties.”

[3.] The third paradigm involves cases in which anonymity is necessary to forestall a chilling effect on future litigants who may be similarly situated. Because “courts provide the mechanism for the peaceful resolution of disputes that might otherwise give rise to attempts at self-help,” they must be wary of “deter[ring] the legitimate exercise of the right to seek a peaceful redress of grievances through judicial means.” A deterrence concern typically arises in cases involving “intimate issues such as sexual activities, reproductive rights, bodily autonomy, medical concerns, or the identity of abused minors.” Also typical are cases in which a potential party may be implicated in “illegal conduct, thereby risking criminal prosecution,” and those in which “the injury litigated against would be incurred as a result of the disclosure of the [party’s] identity.”

[4.] The fourth paradigm involves suits that are bound up with a prior proceeding made confidential by law. This concern manifests itself when denying anonymity in the new suit would significantly undermine the interests served by that confidentiality. See, e.g., R.F.M. v. Nielsen (S.D.N.Y. 2019) (granting pseudonymity to non-minor plaintiffs challenging immigration authorities’ denial of “special immigrant juvenile” status due to family court adjudications, in part because “related records from the New York Family Courts are protected by law”); Doe v. Bates (S.D. Ill. Sept. 21, 2018) (granting pseudonym status to plaintiff bringing excessive force claim arising from juvenile detention because “revealing his identity would, in effect, unravel the protections afforded to his juvenile record”).

These paradigms are rough cuts, and it is possible that a party whose case for pseudonymity appears weak when each paradigm is analyzed separately may nonetheless make a persuasive showing when multiple paradigms are implicated. There may also be rare cases in which—although they fall within one or more of these paradigms—either the need for openness or the prospect of serious prejudice to other parties from a grant of pseudonymity overwhelms the movant’s privacy concerns….

[5.] {For the sake of completeness, we note that pseudonymity will never be justified when the public disclosure that the party seeks to forestall is already a fact. See, e.g., Kansky v. Coca-Cola Bottling Co. of New England (1st Cir. 2007) (denying motion to proceed by pseudonym when “district court opinion has already been made publicly available (apparently without objection), and all filings with this court have used the appellant’s real name”).}

[C.] A district court adjudicating a motion to proceed under a pseudonym should balance the interests asserted by the movant in favor of privacy against the public interest in transparency, taking all relevant circumstances into account. In most cases, the inquiry should focus upon the extent to which the facts align with one or more of the [above] paradigms…. Because these paradigms are framed in generalities, a court enjoys broad discretion to quantify the need for anonymity in the case before it….

[D.] District courts must be mindful that “the balance between a party’s need for anonymity and the interests weighing in favor of open judicial proceedings may change as the litigation progresses.” Consequently, an order granting pseudonymity should be periodically reevaluated if and when circumstances change.

[III.] The court then applied this framework to this case, which involved a challenge to an allegedly biased Title IX sexually assault investigation:

[1.] [T]he [district] court denied [John Doe]’s request because it found his alleged harm to be “speculative conjecture.” Even allowing John to proceed pseudonymously for now, the court added, would not “cure” his fears of “future reputational harm” because “the full facts of the case will emerge if the litigation proceeds to trial.”

Assuming for argument’s sake that the district court’s appraisal of John’s claim of severe harm as “speculative conjecture” is supportable—a matter on which we take no view—that appraisal alone cannot carry the weight of the district court’s denial of pseudonym status. The district court apparently thought that a party can never proceed by pseudonym without establishing a reasonable fear that he will suffer severe harm. But as our earlier discussion makes clear, that showing is necessary only under the first paradigm; the other paradigms involve somewhat different considerations….

[2.] John argued in the district court that disclosing his name could incidentally expose Jane’s identity, and he asked that her identity also be protected. Because Jane is not a party to this case, this argument tracks the second paradigm of exceptional cases that we have identified.

[3.] John also made arguments sounding in the third paradigm of exceptional cases—a paradigm under which anonymity is necessary to avoid deterring similarly situated litigants. Among other things, he stressed “the highly sensitive nature and privacy issues that could be involved with being identified as a perpetrator of sexual assault” and predicted that “any ultimate success in this matter would be negated by the disclosure of his name.”

[4.] We [also think] that the confidentiality of a Title IX disciplinary proceeding may sometimes—but not always—furnish grounds for finding an exceptional case warranting pseudonymity…. Confidentiality is an important aspect of [the Title IX scheme]. By enacting the Family Educational Rights and Privacy Act of 1974 (FERPA), Congress sought to prevent educational institutions from unilaterally disclosing “sensitive information about students,” subject to certain enumerated exceptions. Under FERPA, a university receiving federal funds generally may not disclose a student’s “education records.” Student disciplinary records typically fall under this protective carapace. [Further regulatory and statutory details omitted. -EV] …

We find persuasive the D.C. Circuit’s reasoning in the analogous context of a motion to unseal documents that a federal agency would otherwise be prohibited from disclosing by statute. That court explained that “[a]lthough [the statute] does not categorically protect the sealed information, it does represent a congressional judgment about the importance of maintaining the confidentiality of nonpublic information submitted to [the agency],” and therefore the statutory “confidentiality provision should weigh heavily in” the district court’s balancing. MetLife, Inc. v. Fin. Stability Oversight Council (D.C. Cir. 2017). The same is true of information made confidential by FERPA and Title IX.

In federal suits that amount to collateral attacks on Title IX proceedings, a full appreciation of the public’s interest in transparency must factor in the choice by Congress and the Department to inhibit a school’s disclosure of private information, such as the name of an accused student. After all, “[i]t makes little sense to lift the veil of pseudonymity that—for good reason—would otherwise cover these proceedings simply because the university erred and left the accused with no redress other than a resort to federal litigation.” …

[5.] {The district court’s additional reason for denying the motion—that John’s identity would perforce be revealed if the case goes to trial—was also misplaced. First, there is no per se rule barring the use of pseudonyms at trial. Second, the case may never go to trial. And even if the case does go to trial and John is compelled to self-identify then, that fact alone does not explain why he should not remain anonymous at earlier stages of the litigation….}

[IV.] And the court closed with these instructions about what the District Court should do on remand:

Exercising its informed discretion, paying due heed to the strong presumption against pseudonymity, considering any evidence adduced, and weighing the parties’ arguments, the court should evaluate whether this case is exceptional in light of the four paradigms we have identified. With respect to the fourth paradigm, the district court should consider any additional arguments by the parties as to whether the confidentiality requirements of FERPA and Title IX have weight with respect to John’s particular situation. If the court determines that FERPA or Title IX continue to protect John’s identity as a respondent in the underlying disciplinary proceedings, it should then balance all the relevant circumstances to determine whether compelling John to reveal his name in this case would undermine the federal confidentiality protections to the point of outweighing the public’s interest in transparency….

The post 1st Cir. Ruling Promising for Pseudonymity in Title IX Cases Alleging Biased Sex Assault Investigations appeared first on Reason.com.

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What’s Worse Than Inflation? Depression + Inflation

What’s Worse Than Inflation? Depression + Inflation

Authored by Charles Hugh Smith via OfTwoMinds blog,

If “markets” controlled by the rich are allowed to distribute essentials, the result will be civil disorder and the overthrow of regimes.

What’s worse than inflation? Depression + Inflation. And that’s where we’re heading. As I explained yesterday in The Fed Can’t Stop Supply-Side Inflation, central banks are trying to reduce inflation by crushing demand. This works in eras of abundance, but not in eras of scarcity in which supply constraints drive inflation.

If the FEW essentials–food, energy and fresh water–are supply-constrained, monetary tightening won’t reduce inflation. Jacking up interest rates to crush demand won’t increase supplies, it only exacerbates the destabilizing inequality of who gets their fill (the rich) and who doesn’t (everyone else).

Food shortages caused by drought and other extremes of weather don’t stop humans from getting hungry, and neither do central bank-created depressions.

And Depression is what we’ll get if central banks continue pursuing their fatal misdiagnosis of the cause and fix of inflation. Central banks can trigger a Depression by jacking up rates and tightening financial conditions, but this won’t put an end to humanity’s needs for the essentials soaring in price due to scarcity.

Central banks crushing demand won’t reduce wages, either, as workers need a living wage or there’s no point in even showing up.

After 45 years of losing ground, the worm has finally turned.

The highly unpopular (and misunderstood) solution to supply-constrained inflation is rationing so everyone gets enough to get by regardless of their wealth or income. Without rationing, the rich and powerful engorge themselves as usual, soaking up scarce supplies with their wealth. Those without wealth do without or are pushed into insolvency, generating civil instability that will eventually threaten the integrity of the entire system the wealthy control with such self-satisfaction.

Rather than cut off the water to the poor who are unable to pay soaring utility bills, it’s the wasteful rich who should be cut off and fined a couple hundred thousand dollars for squandering resources.

If central banks think causing a Depression will reduce supply-constrained inflation, they will be proven tragically wrong. Depletion and scarcity are not temporary and the central bank “solution”–impoverishing the already poor and laying waste to the economy to reduce demand–won’t actually fix supply constraints caused by forces beyond the reach of financial manipulations.

If “markets” controlled by the rich are allowed to distribute essentials, the result will be civil disorder and the overthrow of regimes by those left bereft while the wealthy squander resources because they have the financial means and political power to do so.

What’s worse than inflation? Depression + Inflation. What’s worse than Depression + Inflation? Depression + Inflation + civil disorder triggered by mass impoverishment and wealth inequality.

*  *  *

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Tyler Durden
Thu, 08/25/2022 – 08:21

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Futures Jump As China Adds Fresh 1 Trillion Yuan Stimulus; J-Hole Forum Begins

Futures Jump As China Adds Fresh 1 Trillion Yuan Stimulus; J-Hole Forum Begins

Futures jumped overnight after China revealed its latest massive stimulus (which however is still woefully insufficient to prop up the country’s crashing housing sector) steadied nerves in the anxious wait for Jerome Powell’s key speech at 8am tomorrow, where the only question is will it be even more hawkish than the market expects, or will it meet expectations, and send dollar and yields tumbling and stocks soaring.

Shortly after 2am ET, China stepped up its economic stimulus with a further 1 trillion yuan ($146 billion) of funding largely focused on infrastructure spending, support that analysts quickly agreed won’t go far enough to counter the damage from repeated Covid lockdowns and a property market slump.  The State Council, China’s Cabinet, outlined a 19-point policy package on Wednesday, including another 300 billion yuan that state policy banks can invest in infrastructure projects, on top of 300 billion yuan already announced at the end of June. Local governments will be allocated 500 billion yuan of special bonds from previously unused quotas. However, as has been the case for the past 2 years with Beijing’s drip-drip stimulus, economists were downbeat on the measures, while financial markets were muted. The yield on 10-year government bonds rose 2 basis points to 2.65%. China’s CSI 300 Index of stocks rose as much as 0.6% before paring gains to trade up 0.3% as of 2:28 p.m. local time. A similar reaction was observed in US futures which initially spiked by nearly 30 points, reaching a high of 4187.5 before fading most of the gains; emini futures traded +0.6%, or 25 points higher, at 7:30am  ET, while Nasdaq futures were up 0.85%.  Emerging-market stocks also rallied the most in two weeks on the Chinese stimulus news, only to see gains fade. Treasury yields and a dollar gauge dipped, while the crypto space rose on China’s stimulus.

The Chinese-inspired gains failed to stick as traders expect markets to remain volatile as they look to Powell’s comments due Friday at the Jackson Hole meeting for clues on the pace of US monetary tightening. Fed officials in the run-up to Jackson Hole have been clear they see more monetary tightening ahead, a message that’s eroded a bounce in stocks and bonds from mid-June troughs. The tension in markets is whether those assets will continue to head back toward the lows of the year.

“Powell is likely to push back on premature expectations of a dovish pivot, reiterating the focus on the fight against high inflation,” said Silvia Dall’Angelo, a senior economist at Federated Hermes Ltd. “Whether markets take him seriously amid an increasingly gloomy outlook for the global economy is yet to be seen.”

In premarket trading, Chinese stocks in the US rallied amid recent positivity over Beijing boosting stimulus with a further 1 trillion yuan of funding, and as the country takes measures to shore up its currency. Tesla shares rose 2% as the electric-vehicle maker’s 3-for-1 stock split takes effect, confirming US markets remain dominated by idiots. Snowflake shares soared ~17% in premarket trading after the infrastructure software company reported second-quarter revenue that beat expectations and raised its full-year forecast for product revenue. On the other end, Nvidia shares slide ~4% in premarket trading after the chipmaker, which preannounced a month ago and gave a dire forecast, did it again and gave a third- quarter revenue forecast that was below expectations as demand for chips used in gaming computers slipped. Other notable premarket movers:

  • Salesforce (CRM US) shares are down 6.6% in premarket trading after the application- software company reported second-quarter results that beat expectations but lowered its full-year forecast. Analysts note that the company’s forecast is being hit by FX headwinds and delays in closing large deals.
  • Teladoc Health (TDOC US) shares climb 5% in premarket trading after Amazon says it will close its primary care and telehealth service by the end of the year.
  • Bed Bath & Beyond (BBBY US) shares rose as much as 6% in US premarket trading before turning lower. The fluctuation follows a report that the home furnishings retailer is nearing a $375 million loan deal with Sixth Street Partners.
  • Kinetik (KNTK US) initiated with an equal-weight recommendation and Street-high price target at Morgan Stanley, which says the midstream services company offers an “attractively positioned set of Permian midstream assets run by a growth-oriented management team.”
  • NetApp (NTAP US) shares were up ~4% in extended trading after the computer hardware company reported first-quarter results that beat expectations and affirmed its forecast. Analysts note the company continues to see broad-based demand strength, despite supply challenges and FX headwinds.

In Europe, the Stoxx 50 rose 0.3%, paring an earlier advance amid mixed economic data from the region’s biggest economy. Energy and basic resources stocks were the biggest gainers, with retailers underperforming. Sovereign bonds across Europe gained led by short-end bonds. IBEX outperforms, adding 0.6%, FTSE MIB lags, adding 0.1%. In fixed income, short-end bonds lead the move. Here are some of the biggest European movers today:

  • Harbour Energy shares jump as much as 13%, the most since November 2020, as analysts applaud an increased buyback and strong cash flows. Jefferies says 1H results “beat on all metrics”
  • Ambu rises as much as 11% on its latest earnings, which were in-line with figures released on Aug. 3. Handelsbanken sees a “no drama” report and DNB highlights a positive free cash flow
  • Rentokil gains as much as 2.7% after JPMorgan put the pest control company on a positive catalyst watch as the closing date for the Terminix acquisition nears
  • Hunting rises as much as 19% after the company posted better-than-expected profitability, while the outlook for the rest of 2022 and 2023 is positive
  • Yara gains as much as 2.8% as Citi flags rising demand for fertilizers. Yara earlier said it would cut production, citing record gas prices
  • Tessenderlo climbs as much as 8.1% to a level last seen in April after the Belgian chemicals company raised annual guidance again and said it sees adjusted Ebitda for the year rising 15% to 20%
  • Komax rises as much as 5% after Credit Suisse raises the wire processing machines maker to outperform, seeing its recent merger with Schleuniger as highly- accretive
  • Elekta falls as much as 11%  after the firm presented its latest earnings. Jefferies noted a “disappointing” drop in order intake, while Handelsbanken flags a soft outlook
  • Baloise drops as much as 7.6%, hitting the lowest since March, after the Swiss financial services firm reported solid, “yet unspectacular” results, according to Vontobel
  • Daetwyler falls as much as 6.3%, the most since May, as Credit Suisse cut its price target on the rubber components and seals maker following its results in the prior session
  • Grafton declines as much as 5.4% after reporting 1H profit that missed expectations. The company said the weakness was due to hot weather in the UK and less construction activity

Earlier in the session, Asian stocks rebounded strongly after a five-day loss to head for their biggest advance since the end of May, boosted by a late surge in Hong Kong shares. The MSCI Asia Pacific Index climbed as much as 1.6% late in the Asian day, with Hong Kong-listed Chinese tech stocks like Alibaba and Tencent being the biggest contributors to its gain. The gauge’s increase earlier in the session was driven by export-heavy markets like Korea and Taiwan as the dollar weakened. The Hang Seng Index surged 3.6%, the most since April 29, leading the late regional rebound that some traders attributed to short-covering ahead of a key speech by Federal Reserve Chair Jerome Powell at the Jackson Hole conference. The morning trading session in Hong Kong was suspended due to a tropical storm warning. The amount of bearish bets against Hong Kong stocks rose to levels that could trigger a surge in share prices as traders rush to close out their positions, according to quantitative analysts at Morgan Stanley. A gauge of Chinese tech names listed in the financial hub soared 6%. It is still down about 25% this year. Markets have been edgy ahead of Powell’s speech, with the MSCI Asia gauge losing 3.1% in the last five sessions.

Thursday’s move looks like “pre-positioning,” said Justin Tang, the head of Asian research at United First Partners. “Investors are taking positions on expectations” of a less hawkish commentary from Powell, he said. Chinese stocks on the mainland also rose as the nation stepped up measures to bolster growth with a further 1 trillion yuan ($146 billion) of stimulus. South Korean shares gained on foreign buying even after the nation’s central bank raised its key interest rate by 25 basis points, while Taiwanese stocks also climbed. “It may be a combination of risk-on sentiment across the region heading into Jackson Hole and the China support measures,” said Marvin Chen, a strategist with Bloomberg Intelligence. “Growth, tech and offshore-listed China stocks are leading gains suggesting that Fed meeting may be playing a bigger role in the late-day move.”

Japanese equities advanced, with the Nikkei 225 posting its first gain in six sessions, as the market looked ahead to remarks Friday from Fed Chair Jerome Powell at the Jackson Hole meeting. The Nikkei rose 0.6% to close at 28,479.01, while the Topix added 0.5% to 1,976.60. Daiichi Sankyo Co. contributed the most to the Topix gain, increasing 4.6%. Out of 2,170 shares in the index, 1,445 rose and 597 fell, while 128 were unchanged. “Investors will continue to take a wait-and-see stance until after the speech by Chairman Powell scheduled for the 26th,” said Takashi Ito, a senior strategist at Nomura Securities. “After a round of buying, there is a possibility that there will be a small drop.” 

Australia,’s S&P/ASX 200 index rose 0.7% to close at 7,048.10, driven by gains in banks and mining shares. The materials sub-gauge rallied to its highest level since June 16, amid advances in iron ore prices.  Uranium company Paladin was the top performer, surging after Japan said it is planning a dramatic shift back to nuclear power more than a decade on from the Fukushima disaster. City Chic was the biggest decliner after it flagged an uncertain outlook.  In New Zealand, the S&P/NZX 50 index fell 0.2% to 11,627.14

In FX, the Bloomberg Dollar Spot Index fell as the greenback weakened against all of its Group-of-10 peers. The Aussie led G-10 gains, jumping as much as 1.1% against the greenback as traders turned more optimistic after China announced fresh economic stimulus with a further $146 billion of funding largely focused on infrastructure spending. Australia’s dollar outperformed the kiwi after New Zealand reported disappointing retail sales data. The euro rose to briefly trade above parity against the dollar. Germany’s economy proved more resilient than initially thought in the second quarter, growing 0.1% despite surging inflation and the war in Ukraine; the initial reading was 0%. Separately, German Aug. Ifo business confidence came in at 88.5 vs est. 86.8. The gauge of business expectations for the next six months inched down to 80.3 from 80.4, but better than forecast 79.0. Yen rose on flows-driven trade amid a decline in US yields and general dollar weakness during Asian hours

In rates, Treasury futures were off session highs into the early US session, although yields remained richer by 1bp-2bp across the curve, following wider gains across UK gilts where 10s rally as much as 7bp on the day. US 10-year yields around 3.09%, richer by ~1bp on the day with bunds and gilts outperforming by 2bp and 5bp in the sector; curves steady with gains seen across maturities. US auctions conclude with 7-year note sale at 1pm New York time. European bonds advanced in a rally that was led by Italian bonds. Gilts outperform USTs and bunds; gilts 2-year yields drop ~10bps to 2.81%. USTs push higher, led by the belly.  Bunds 2-year yield down about 5.5bps to 0.85%. Peripheral spreads tighten to Germany with 10y BTP/Bund narrowing 5.1bps to 225.7bps.  Benchmark 10-year JGB yield climbed to its highest in more than a month. The yield on China’s 10-year government bonds rises the most since June 27 after the State Council outlined a 19-point policy package to stimulate the economy. The 10-year yield advanced 3bps to 2.66% while the 30-year note yield gained 3bps to 3.14%.

Bitcoin is essentially unchanged but closer to the top-end of circa. USD 500 parameters that reside well within the USD 21k area.

WTI jerked drifts 0.4% higher to around $95 after the WSJ reported that the OPEC president is open to cutting oil production. Most base metals trade in the green; LME copper rises 1.4%, outperforming peers. Spot gold rises roughly $13 to trade near $1,764/oz.  Natural gas has surged to fresh highs, intensifying an energy crisis that threatens the euro-area economy and hence the global outlook.

Looking at the day ahead, data releases from the US include the weekly initial jobless claims, the second estimate of Q2 GDP and the Kansas City Fed’s manufacturing activity in index. In Germany there’s also the Ifo Institute’s business climate indicator for August. Otherwise from central banks, we’ll get the account of the ECB’s July meeting.

Market Snapshot

  • S&P 500 futures up 0.9% to 4,179.50
  • STOXX Europe 600 up 0.7% to 435.05
  • MXAP up 1.6% to 160.34
  • MXAPJ up 2.0% to 523.18
  • Nikkei up 0.6% to 28,479.01
  • Topix up 0.5% to 1,976.60
  • Hang Seng Index up 3.6% to 19,968.38
  • Shanghai Composite up 1.0% to 3,246.25
  • Sensex up 0.5% to 59,385.35
  • Australia S&P/ASX 200 up 0.7% to 7,048.13
  • Kospi up 1.2% to 2,477.26
  • German 10Y yield little changed at 1.35%
  • Euro up 0.4% to $1.0004
  • Gold spot up 0.8% to $1,765.17
  • U.S. Dollar Index down 0.45% to 108.18

Top overnight news from Bloomberg

  • China stepped up its economic stimulus with a further 1 trillion yuan ($146 billion) of funding largely focused on infrastructure spending, support that likely won’t go far enough to counter the damage from repeated Covid lockdowns and a property market slump
  • As the countdown to the Jackson Hole symposium begins, an abrupt shift has taken place in the options market. When trading got underway in Asia on Thursday, investors had to pay more for options which benefit when dollar-yen rises. Just a few hours later, the premium had shifted in favor of options that benefit when the currency pair falls
  • European natural gas extended its blistering rally as the worst supply crunch in decades boosts pressure on politicians to do more to rescue industries and households. Benchmark futures jumped as much as 8.1%, after closing at a record on Wednesday
  • The good news is that Ukraine’s crucial grain is leaving its ports again. The bad news is that farmland lost to the war and weak local prices are threatening its next wheat harvest
  • Climate change is having a “clear impact” on inflation in the euro area, ECB President Christine Lagarde said in an interview
  • The current state of the economy and prices doesn’t allow the Bank of Japan’s easing bias to be shifted to neutral, board member Toyoaki Nakamura tells reporters

A more detailed look at global markets courtesy of Newsquawk

Asia-Pacific stocks took impetus from the positive handover from Wall St but with gains capped as attention remained on the looming Jackson Hole Symposium. ASX 200 was led higher by commodity stocks after the recent upside in energy and precious metals. Nikkei 225 was underpinned as the government mulled a further loosening of COVID rules and is expected to extend local travel incentives through next month. Shanghai Comp was initially choppy amid the absence of Stock Connect flows after morning trade in Hong Kong was cancelled, although the mood gradually improved with Hong Kong opening for the afternoon session after the storm signal 8 was dropped and following the recent support pledges by China.

Top Asian News

  • Chinese Industry Ministry says will accelerate research and development of new types of batteries including sodium-ion batters and hydrogen energy storage batteries; will improve supply capabilities of key resources including lithium, nickel, cobalt and platinum.
  • Some of China’s sate-backed financial firms are said to be pushing back on calls to support the Chinese property sector amid the exposure risk on their balance sheets, according to sources cited by Reuters.
  • BoK hiked its base rate by 25bps to 2.50%, as expected, with the decision unanimous. BoK said inflation will remain high for the time being and export growth is to slow, while Governor Rhee said strong inflation could last longer than previously seen. Furthermore, Rhee noted that policies will continue to be inflation-focused for a while and said there will be no change in the 25bps rate increase stance for the foreseeable future.
  • China Human Resources Ministry official said they will focus on expanding jobs and will promote fiscal, monetary and industrial policies to support job market stabilisation, according to Reuters.

European bourses are essentially unchanged, Euro Stoxx 50 -0.1%, as an initial pronounced foray higher around the cash open that occurred without driver has dissipated since. Fresh drivers have been slim with the German Ifo release sparking a brief extension on initial gains of circa. 50 points in Euro Stoxx 50, for instance. Stateside, futures remain modestly firmer but are similarly off best levels, ES +0.5%, ahead of Jackson Hole beginning today (Powell on Friday).

Top European News

  • ECB’s Lagarde says “we can no longer rely exclusively on the projections provided by our models – they have repeatedly had to be revised upwards over these past two years.”.
  • Private Jet Shortage Hits English Football’s Pre-Match Prep
  • Veolia Must Sell 3 Businesses to Complete Suez Deal, UK Says
  • Germany Aug. IFO Business Confidence Index 88.5; Est. 86.8
  • London’s Stock Market Misery Grows as Delistings Add to IPO Woes

Commodities

  • WTI and Brent October contracts consolidated in the early hours following a session of gains yesterday.
  • Spot gold is edging higher in tandem with the decline in the Dollar, with the yellow metal approaching its 50 and 21 DMAs.
  • Base metal futures are mostly firmer amid the softer Dollar, with 3M LME copper making its way further above USD 8,000/t.
  • Caspian Pipeline Consortium says the SPM-3 inspection has completed, mooring point is fine to work, via Reuters.
  • Italian government to update emergency plan for gas next week; will not announce gas rationing plan for now, according to Reuters citing government sources; to include tougher measures in case of further cut or stop of Russian gas flows.
  • German Network Regulator VP says is on right track with gas storage but more must be done; will reach 85% storage by October 1st

Fixed Income

  • Core benchmarks have derived a pronounced upward bias, despite pronounced pressure alongside initial equity strength and post-Ifo.
  • Pressure which has dissipated and given way to modest across the board strength with Bunds eyeing 151.00, Gilts above 111.00 and USTs firmer by 4 ticks.
  • Yield dynamics are mixed and are modestly off earlier WTD peaks given the above action, US 7yr due,

Central Banks

  • ECB’s Lagarde says “we can no longer rely exclusively on the projections provided by our models – they have repeatedly had to be revised upwards over these past two years.”.
  • BoJ Board Member Nakamura says JPY has weakened significantly so far this year, high volatility has had big impact on Japan’s economy; premature to tweak the BoJ’s dovish guidance now, there are pros and cons to soft JPY, therefore will watch carefully but there is not much the BoJ can do as moves are driven by changes in US economy.
  • South Korean Presidential Office says closely monitoring forex markets, will take timely measures to stabilise the market.
  • Fed’s Bostic (2024 Voter) says he has not decided whether a 50bp or 75bp increase is appropriate in September, at this point it is a coin toss, via WSJ. Key employment and inflation reports are due prior to the meeting, if data remains strong and inflation clearly doesn’t soften then it may make the case for another 75bp move. Too soon to say the inflation surge has peaked, some hopeful signs. Cautioned that expectations the Fed could reverse course in short-order and reduce rates fairly soon is misguided. Upbeat on the economic outlook.

US Event Calendar

  • 08:30: 2Q GDP Annualized QoQ, est. -0.7%, prior -0.9%
    • Personal Consumption, est. 1.5%, prior 1.0%
    • GDP Price Index, est. 8.7%, prior 8.7%
    • PCE Core QoQ, est. 4.4%, prior 4.4%
  • 08:30: Aug. Initial Jobless Claims, est. 252,000, prior 250,000
    • Continuing Claims, est. 1.44m, prior 1.44m
  • 11:00: Aug. Kansas City Fed Manf. Activity, est. 10, prior 13

DB’s Jim Reid concludes the overnight wrap

It’s been an eventful 24 hours for markets, with sovereign bonds selling off again as investors keep ratcheting up their expectations for central bank rate hikes over the months ahead. Fed Chair Powell’s speech at Jackson Hole tomorrow could throw some more light on how far they’ll go, but the rise in yields has shown no sign of relenting ahead of that, not least since the energy situation in Europe keeps getting worse. In turn, that’s adding to fears that “peak inflation” might not actually have arrived yet for some countries, whilst policymakers are about to face some unenviable choices as they grapple with the worst stagflation we’ve seen in decades.

In terms of the specific moves yesterday, European natural gas futures (+8.59%) settled at another record high of €292 per megawatt-hour amidst growing supply concerns as we head towards the winter months. That wasn’t helped by the news after the European close the previous day, as Freeport LNG said that their natural gas terminal in Texas wouldn’t restart until early to mid-November, having previously been aiming for October. In addition, there’s also the usual Russian supply issues of late to contend with, and there are serious worries that flows through the Nord Stream pipeline might not resume at all following maintenance for three days from August 31. There wasn’t much respite to be found elsewhere either, as German power prices for next year hit a fresh record of their own at €643 per megawatt-hour.

With these supply shocks continuing to fester, investors moved to price in an increasingly aggressive response from central banks. In fact for the ECB, the hikes now priced in for 2022 are the most rapid we’ve seen to date, with an additional +133bps priced by year-end on top of the +50bps we already had in July. And looking further out, overnight index swaps are pricing in +194bps of hikes by June 2023 relative to today, which is up by +9.1bps on the day before. So it was little surprise that sovereign bonds lost ground across the continent, with yields on 10yr bunds (+5.2bps), OATs (+6.8bps) and BTPs (+3.5bps) all moving higher.

Here in the UK those moves were even more pronounced, with gilts underperforming European sovereigns for a 7th consecutive session. That continues a pattern we’ve seen since the release of the stronger-than-expected UK CPI print last week, as investors have also moved to price in faster rate hikes from the Bank of England. Unlike their continental counterparts however, gilt yields are now at multi-year highs once again, with the 10yr gilt yield (+12.2bps) closing at its highest level since 2014, at 2.69%. Furthermore, the 2s10s curve in the UK flattened a further -9.7bps, leaving it deeper in inversion territory than at any time since 2008.

Over in the US, all attention is on what Fed Chair Powell might say tomorrow at the Jackson Hole symposium in Wyoming. Nevertheless, the performance for Treasuries echoed what happened in Europe, with 10yr yields up +5.8bps on the day to 3.10%, which is their highest level since late June. They’ve remained fairly stable around those levels overnight too, coming down just -0.9bps. Given the US faces a more favourable situation on the energy side, the moves in central bank pricing weren’t as pronounced as in Europe yesterday. But the peak rate priced in by Fed funds futures for March 2023 still rose +3.5bps on the day as investors continued to adjust their policy expectations closer towards the more hawkish rhetoric from FOMC officials.

Equities weren’t too affected by those developments on the rates side yesterday, with the S&P 500 (+0.29%) paring back its initial losses to end a run of 3 consecutive declines. Tech stocks were a big outperformer, with the FANG+ index (+0.96%) of megacap tech stocks seeing sizeable gains, while the NASDAQ (+0.41%) also put in a decent performance. A number of European indices did lose ground on the day however, including the UK’s FTSE 100 (-0.22%) and Spain’s IBEX 35 (-0.35%), although the broader STOXX 600 did manage to advance +0.16%.

That trend from the US has continued in Asian markets overnight, where equities are broadly trading higher. One supportive factor has been a further package of measures from China’s State Council that includes 1 trillion yuan focused largely on infrastructure spending. That’s bolstered the Shanghai Composite (+0.41%) and the CSI (+0.13%), although both are lagging the Nikkei (+0.56%) and the Kospi (+0.89%). The latter has seen strong gains after the Bank of Korea only hiked rates by 25bps overnight, marking a step down from the 50bps hike at the July meeting, yet the South Korean Won has still strengthened +0.43% against the US Dollar this morning. The Bank of Korea also moved their forecasts in a stagflationary direction, raising their inflation projection for this year to 5.2%, and cutting their growth forecast to 2.6%. Looking forward, US and European equity futures are pointing towards additional gains today, with those on the S&P 500 up +0.35%.

Back on the energy scene, another notable trend over the last week has been a decent recovery in oil prices, with Brent Crude (+1.0%) closing at its highest level so far this month, at $101.22/bbl. And this morning it’s seen further gains as well, up +0.56% to $101.79/bbl. Bear in mind that early last week it had closed at $92.34/bbl, so that’s a recovery of just over +10% since that point. That echoes the recovery we’ve seen in commodities more broadly over recent weeks as well, with Bloomberg’s Commodity Spot Index (+0.67%) closing at a 2-month high yesterday.

Separately, we heard from President Biden yesterday, who announced student debt relief of up to $10,000 for those with an individual income of less than $125,000. For Pell Grant recipients, the relief would be up to $20,000. Furthermore, the current pause on federal student loan repayments is being extended again through the rest of 2022, taking that beyond the mid-term elections in November. Speaking of the midterms, there are signs that the Democrats’ political fortunes are continuing to rise after they won the special election for New York’s 19th congressional district, which had been a closely watched swing race. In addition, FiveThirtyEight’s forecast for the Senate now gives the Democrats a 64% chance of retaining control, their highest number to date. For the House, their model puts them at a 22% chance of retaining control.

On the data side yesterday we had a mixed set of releases from the US. On the positive side, the preliminary reading for core capital goods orders in July showed a +0.4% gain (vs. +0.3% expected), and the previous month also saw an upward revision of two-tenths to +0.9%. Durable goods orders were unchanged (vs. +0.8% expected), although excluding transportation they were up +0.3% (vs. +0.2% expected). Finally, pending home sales fell -1.0% to their lowest level since April 2020. That was better than the -2.6% decline expected, but if you exclude April 2020 during the lockdowns then you’ve got to go back to September 2011 to find a lower reading for that index, which echoes the decline in various housing indicators we’ve seen recently.

To the day ahead now, and data releases from the US include the weekly initial jobless claims, the second estimate of Q2 GDP and the Kansas City Fed’s manufacturing activity in index. In Germany there’s also the Ifo Institute’s business climate indicator for August. Otherwise from central banks, we’ll get the account of the ECB’s July meeting.

Tyler Durden
Thu, 08/25/2022 – 08:04

via ZeroHedge News https://ift.tt/cfg7346 Tyler Durden

Oil Spikes As OPEC President Hints At Possible Production Cuts

Oil Spikes As OPEC President Hints At Possible Production Cuts

For the 3rd day in a row, headlines in the energy complex are reiterating the possibility of an OPEC production cut in the face of the decoupling between (tight) physical crude markets and dropping futures prices.

OPEC’s rotating president told The Wall Street Journal that the Saudi energy minister’s proposal to consider a reduction in light of market volatility was “in line with our views and objectives.”

While the OPEC presidency doesn’t have decision-making power, the holder of the position often voices consensus emerging in the organization.

“We think the return of Iranian barrels would be a qualifying event for a collective strategy shift,” among OPEC members, said Helima Croft, the chief commodities strategist at Canadian broker RBC Capital Markets. She added that if an OPEC production cut reduced the oil-price benefits from the Iran agreement, that could erode the political gains for the Biden administration from the controversial deal.

Notably, the idea of a production cut appears to be gaining momentum as Azerbaijan, Libya, Algeria, and Congo all supported the idea in order to reduce volatility and add stability to the oil market.

Meanwhile Iran appears to be positioning itself as anti-Russia:

Iran’s state oil producer will try to win back customers in countries like Greece, Italy, Spain and Turkey in the event sanctions targeting its energy industry and economy are eased, according to people with knowledge of Iran’s strategy

WTI spiked back into the green on the news…

So all we need now is a competing “Iran Nuke Deal Is Imminent… Again” headline to take us back down… but as the OPEC leader said, that will merely trigger the production cuts – hence the ‘stabilizing’ threat.

Who could have seen this coming?

Tyler Durden
Thu, 08/25/2022 – 07:54

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

1st Cir. Ruling Promising for Pseudonymity in Title IX Cases Alleging Biased Sex Assault Investigations

From yesterday’s decision of the First Circuit in Doe v. MIT, by Judge Bruce Selya, joined by Judges Rogeriee Thompson and Gustavo Gelpi (note that I submitted an amicus brief in the case, in support of neither side):

[I.] The court reaffirms that there is a “strong presumption against the use of pseudonyms in civil litigation,” but declines to follow many other courts in saying that this stems directly from the Federal Rules of Civil Procedure, or to the right of access to court records involved in sealing decisions. Rather, the court reasons,

[F]ederal courts enforce the presumption against party pseudonyms in civil litigation under their inherent power to “formulate procedural rules not specifically required by the Constitution or the Congress.” This inherent power applies foursquare to the presumption against pseudonymity, which is a “polic[y] intrinsic to the litigation process.” Courts have distilled such a presumption from a brew of custom and principle, including the values underlying the right of public access to judicial proceedings and documents under the common law and First Amendment….

Judicial hostility to a party’s use of a pseudonym springs from our Nation’s tradition of doing justice out in the open, neither “in a corner nor in any covert manner.” In defending that tradition, we have explained that “[p]ublic access to judicial records and documents allows the citizenry to ‘monitor the functioning of our courts, thereby insuring quality, honesty and respect for our legal system.'” “Identifying the parties to the proceeding is an important dimension of publicness.” That is because—to a certain degree—letting a party hide behind a pseudonym dims the public’s perception of the matter and frustrates its oversight of judicial performance.

Lacking knowledge of the parties’ names, the public could learn virtually nothing about a case outside the facts and arguments in the record. The record, though, is not the alpha and omega of public concern. To take one example of important extra-record data, the real-world aftermath of a suit will sometimes bear upon the assessment of whether justice was done. Another example is the kind of institutional rot that is scrubbed from the record: judicial conflicts of interest, ex parte contacts, and the like. Anonymizing the parties lowers the odds that journalists, activists, or other interested members of the public would catch wind of such mischief. See Globe Newspaper Co. v. Pokaski (1st Cir. 1989) (acknowledging “the contribution to governance of investigative reporting” regarding such matters).

An even thornier issue involves protecting the appearance of fairness in judicial proceedings. “Litigating behind a curtain creates a shroud of mystery, giving the impression that something secret is going on.” Secrecy breeds suspicion. Some may believe that a party’s name was masked as a means of suppressing inconvenient facts and that the court was either asleep at the wheel or complicit in the cover up. It is no answer to dismiss such beliefs as conspiracy theories because “justice must satisfy the appearance of justice.” Distrust is toxic to the judiciary’s authority, which “depends in large measure on the public’s willingness to respect and follow its decisions.” A judicial system replete with Does and Roes invites cynicism and undermines public confidence in the courts’ work.

[II.] The court goes on to elaborate the following approach to when the presumption can be rebutted, which is quite different from the multi-factor balancing tests that many courts follow:

[D]istrict courts enjoy broad discretion to identify the relevant circumstances in each case and to strike the appropriate balance between the public and private interests…. Even so, … some general guidelines may be helpful to the district courts.

[A.] For a start, we are committed to the proposition that courts—in balancing the relevant interests—must not lose sight of the big picture. Litigation by pseudonym should occur only in “exceptional cases.” Lawsuits in federal courts frequently invade customary notions of privacy and—in the bargain—threaten parties’ reputations. The allegations are often serious (at least to the parties) and motivated adversaries do not lack for procedural weapons.

Facing the court of public opinion under these conditions is sometimes stressful—but that is the nature of adversarial litigation. If commonplace lawsuit-induced distress were enough to justify the use of a pseudonym, anonymity would be the order of the day: Does and Roes would predominate. We think it follows that a well-calibrated inquiry needs some workable methodology for sorting out the (relatively few) “exceptional cases” in which pseudonymity should be allowed.

{The party seeking pseudonymity bears the burden of rebutting the strong presumption against it. In most cases, the district court should require a declaration or affidavit either by the moving party or by someone with special knowledge who can speak to the need for anonymity in that case.} …

[B.] [W]e think it useful to sketch four general categories of exceptional cases in which party anonymity ordinarily will be warranted.

[1.] The first paradigm involves a would-be Doe who reasonably fears that coming out of the shadows will cause him unusually severe harm (either physical or psychological). See, e.g., Doe v. Ayers (9th Cir. 2015) (allowing use of pseudonym premised upon evidence that disclosure of plaintiff-inmate’s history of being sexually abused “would create a significant risk of severe harm at the hands of other inmates”); Advanced Textile (allowing use of pseudonym for plaintiffs who “fear[ed] extraordinary retaliation, such as deportation, arrest, and imprisonment”); Lauren B. v. Baxter Int’l Inc. & Subsidiaries Welfare Benefit Plan for Active Emps. (allowing anonymity when public disclosure would threaten plaintiff’s recovery from longstanding eating disorder).

[2.] The second paradigm involves cases in which identifying the would-be Doe would harm “innocent non-parties.”

[3.] The third paradigm involves cases in which anonymity is necessary to forestall a chilling effect on future litigants who may be similarly situated. Because “courts provide the mechanism for the peaceful resolution of disputes that might otherwise give rise to attempts at self-help,” they must be wary of “deter[ring] the legitimate exercise of the right to seek a peaceful redress of grievances through judicial means.” A deterrence concern typically arises in cases involving “intimate issues such as sexual activities, reproductive rights, bodily autonomy, medical concerns, or the identity of abused minors.” Also typical are cases in which a potential party may be implicated in “illegal conduct, thereby risking criminal prosecution,” and those in which “the injury litigated against would be incurred as a result of the disclosure of the [party’s] identity.”

[4.] The fourth paradigm involves suits that are bound up with a prior proceeding made confidential by law. This concern manifests itself when denying anonymity in the new suit would significantly undermine the interests served by that confidentiality. See, e.g., R.F.M. v. Nielsen (S.D.N.Y. 2019) (granting pseudonymity to non-minor plaintiffs challenging immigration authorities’ denial of “special immigrant juvenile” status due to family court adjudications, in part because “related records from the New York Family Courts are protected by law”); Doe v. Bates (S.D. Ill. Sept. 21, 2018) (granting pseudonym status to plaintiff bringing excessive force claim arising from juvenile detention because “revealing his identity would, in effect, unravel the protections afforded to his juvenile record”).

These paradigms are rough cuts, and it is possible that a party whose case for pseudonymity appears weak when each paradigm is analyzed separately may nonetheless make a persuasive showing when multiple paradigms are implicated. There may also be rare cases in which—although they fall within one or more of these paradigms—either the need for openness or the prospect of serious prejudice to other parties from a grant of pseudonymity overwhelms the movant’s privacy concerns….

[5.] {For the sake of completeness, we note that pseudonymity will never be justified when the public disclosure that the party seeks to forestall is already a fact. See, e.g., Kansky v. Coca-Cola Bottling Co. of New England (1st Cir. 2007) (denying motion to proceed by pseudonym when “district court opinion has already been made publicly available (apparently without objection), and all filings with this court have used the appellant’s real name”).}

[C.] A district court adjudicating a motion to proceed under a pseudonym should balance the interests asserted by the movant in favor of privacy against the public interest in transparency, taking all relevant circumstances into account. In most cases, the inquiry should focus upon the extent to which the facts align with one or more of the [above] paradigms…. Because these paradigms are framed in generalities, a court enjoys broad discretion to quantify the need for anonymity in the case before it….

[D.] District courts must be mindful that “the balance between a party’s need for anonymity and the interests weighing in favor of open judicial proceedings may change as the litigation progresses.” Consequently, an order granting pseudonymity should be periodically reevaluated if and when circumstances change.

[III.] The court then applied this framework to this case, which involved a challenge to an allegedly biased Title IX sexually assault investigation:

[1.] [T]he [district] court denied [John Doe]’s request because it found his alleged harm to be “speculative conjecture.” Even allowing John to proceed pseudonymously for now, the court added, would not “cure” his fears of “future reputational harm” because “the full facts of the case will emerge if the litigation proceeds to trial.”

Assuming for argument’s sake that the district court’s appraisal of John’s claim of severe harm as “speculative conjecture” is supportable—a matter on which we take no view—that appraisal alone cannot carry the weight of the district court’s denial of pseudonym status. The district court apparently thought that a party can never proceed by pseudonym without establishing a reasonable fear that he will suffer severe harm. But as our earlier discussion makes clear, that showing is necessary only under the first paradigm; the other paradigms involve somewhat different considerations….

[2.] John argued in the district court that disclosing his name could incidentally expose Jane’s identity, and he asked that her identity also be protected. Because Jane is not a party to this case, this argument tracks the second paradigm of exceptional cases that we have identified.

[3.] John also made arguments sounding in the third paradigm of exceptional cases—a paradigm under which anonymity is necessary to avoid deterring similarly situated litigants. Among other things, he stressed “the highly sensitive nature and privacy issues that could be involved with being identified as a perpetrator of sexual assault” and predicted that “any ultimate success in this matter would be negated by the disclosure of his name.”

[4.] We [also think] that the confidentiality of a Title IX disciplinary proceeding may sometimes—but not always—furnish grounds for finding an exceptional case warranting pseudonymity…. Confidentiality is an important aspect of [the Title IX scheme]. By enacting the Family Educational Rights and Privacy Act of 1974 (FERPA), Congress sought to prevent educational institutions from unilaterally disclosing “sensitive information about students,” subject to certain enumerated exceptions. Under FERPA, a university receiving federal funds generally may not disclose a student’s “education records.” Student disciplinary records typically fall under this protective carapace. [Further regulatory and statutory details omitted. -EV] …

We find persuasive the D.C. Circuit’s reasoning in the analogous context of a motion to unseal documents that a federal agency would otherwise be prohibited from disclosing by statute. That court explained that “[a]lthough [the statute] does not categorically protect the sealed information, it does represent a congressional judgment about the importance of maintaining the confidentiality of nonpublic information submitted to [the agency],” and therefore the statutory “confidentiality provision should weigh heavily in” the district court’s balancing. MetLife, Inc. v. Fin. Stability Oversight Council (D.C. Cir. 2017). The same is true of information made confidential by FERPA and Title IX.

In federal suits that amount to collateral attacks on Title IX proceedings, a full appreciation of the public’s interest in transparency must factor in the choice by Congress and the Department to inhibit a school’s disclosure of private information, such as the name of an accused student. After all, “[i]t makes little sense to lift the veil of pseudonymity that—for good reason—would otherwise cover these proceedings simply because the university erred and left the accused with no redress other than a resort to federal litigation.” …

[5.] {The district court’s additional reason for denying the motion—that John’s identity would perforce be revealed if the case goes to trial—was also misplaced. First, there is no per se rule barring the use of pseudonyms at trial. Second, the case may never go to trial. And even if the case does go to trial and John is compelled to self-identify then, that fact alone does not explain why he should not remain anonymous at earlier stages of the litigation….}

[IV.] And the court closed with these instructions about what the District Court should do on remand:

Exercising its informed discretion, paying due heed to the strong presumption against pseudonymity, considering any evidence adduced, and weighing the parties’ arguments, the court should evaluate whether this case is exceptional in light of the four paradigms we have identified. With respect to the fourth paradigm, the district court should consider any additional arguments by the parties as to whether the confidentiality requirements of FERPA and Title IX have weight with respect to John’s particular situation. If the court determines that FERPA or Title IX continue to protect John’s identity as a respondent in the underlying disciplinary proceedings, it should then balance all the relevant circumstances to determine whether compelling John to reveal his name in this case would undermine the federal confidentiality protections to the point of outweighing the public’s interest in transparency….

The post 1st Cir. Ruling Promising for Pseudonymity in Title IX Cases Alleging Biased Sex Assault Investigations appeared first on Reason.com.

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Into The Black Hole – Six Months Of War With No End In Sight

Into The Black Hole – Six Months Of War With No End In Sight

Authored by James Rickards cia DailyReckoning.com,

The war in Ukraine has been dragging on for six months with no end in sight.

Russia is slowly and systematically advancing, while the Ukrainian military is being ground down in the Donbas region of eastern Ukraine.

On balance, Russia is winning the war, although progress is slow.

Russia will next likely move to take Odesa, a strategically key Black Sea port. Russia has staged missile attacks on Odesa in recent days. If Russia ultimately takes Odesa, it removes Ukraine’s access to the sea, effectively rendering it completely landlocked.

But there don’t appear to be any plans for an imminent Russian attack on Odesa. At any rate, a negotiated peace settlement is nowhere in sight. Neither side will accept the other’s demands.

Meanwhile, a car bomb killed the daughter of “Putin’s brain” this past weekend near Moscow. Alexander Dugin is an ardent Russian nationalist whose thinking is said to have influenced Putin. His daughter was killed in the blast, although many suspect he was the intended target.

Russia blames Ukraine for the attack, which Ukraine denies. How Russia responds remains to be seen.

What’s the Endgame?

As the war drags on with no end in sight, there’s also no end in sight to the flow of U.S. aid to Ukraine. It’s an open-ended commitment with no clearly defined objective.

Both the Democratic and Republican parties support the spending, except for a minority who are vilified as Putin stooges and apologists.

Supporters talk about standing up for democracy, but Ukraine is a corrupt oligarchy that’s just about as corrupt as Russia. It’s far from a model democracy.

But the aid’s for a good cause, they say. We’re helping defeat aggression and assisting a weaker nation stand up against a much stronger attacker.

Well, that’s fine, but there’s little to no oversight to supervise the transfers. Where’s the U.S. aid to Ukraine going?

The aid is being stolen off the top or diverted to corrupt officials. Goods are often stolen and resold on the black market. Weapons are also sold on the black market. In all, very limited amounts of aid are actually going to the war effort.

Massive Corruption

One Ukrainian volunteer fighting in the Donbas has said:

In Ukraine, people cheat each other even in war. I’ve watched the medical supplies donated to us being taken away. The cars that drove us to our position were stolen. And we have not been replaced with new soldiers in three months, though we should have been relieved three times by now…

If I had known how much deception there was in this army, and how everything would be for us, I never would have joined. I want to go home, but if I flee, I face prison.

Here’s what a Ukrainian journalist has to say:

The corruption related to the war aid is shocking. The weapons are stolen, the humanitarian aid is stolen and we have no idea where the billions sent to this country have gone.

Of course, your tax money is paying for this swindle.

Wartime Sacrifice?

Here’s an idea of where at least some of the billions have gone. Last month, the Ukrainian parliament voted to give itself a 70% pay raise, while the army is collapsing and the Ukrainian people are suffering.

So much for wartime sacrifice. Moreover, Western admirers of Ukrainian president Zelenskyy have praised him as a modern Winston Churchill, defyingly resisting an evil aggressor.

But Zelenskyy is no Churchill.

He’s succeeded in presenting himself as a strong wartime leader, standing up to the big, bad Putin. But in reality, he’s a corrupt oligarch with millions of dollars hidden offshore. His acting skills have enhanced his propaganda efforts, but it doesn’t take much training to see how phony he is.

Innocent civilians, including women and children, are dying under his failed leadership and inability to come to terms with Putin before the invasion began.

The True U.S. Objective in Ukraine

But the same journalist who complained about the widespread corruption has figured out the real U.S. strategy in Ukraine:

It is obvious that the U.S. doesn’t want Ukraine to win the war. They only want to make Russia weak. No one will win this war, but the countries the U.S. is using like a playground will lose.

That’s exactly right. The U.S. has no vital interest in Ukraine worth going to war over. Its real aim is to weaken Russia through a protracted war in Ukraine. The longer it drags on, the better, no matter how many Ukrainians have to die in the process.

In other words, the U.S. is willing to fight Russia to the last Ukrainian.

That may sound overly cynical, but it really isn’t. It’s just an objective assessment based upon the facts on the ground. But don’t take my word for it.

As Defense Secretary Lloyd Austin has said, “We want to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine.”

Sanctions Are a Complete Failure

Meanwhile, the sanctions regime against Russia has proven to be a complete failure. Sanctions have had zero impact on Russian advances on the battlefield and Russian goals in Ukraine. In fact, Putin has run rings around the sanctions.

Instead of the ruble collapsing, it has strengthened in the face of Western sanctions. And boycotting Russian exports of oil and natural gas was pointless because Russia just sold the same energy to China and India instead of Europe. It’s a world market, after all.

European countries like Germany are so dependent on Russian energy that they’re facing severe shortages and a bleak winter without it. Germany faces a catastrophic winter in which factories will have to be closed, homes will have to reduce heat to 50 F and hot showers may be a thing of the past.

It’s all because Germany made a political decision to side with the climate alarmists and Greens

despite the lack of scientific evidence supporting their claims. They became utterly dependent on Russia as a result.

When reality collides with ideology, reality wins every time. Now Germany will pay the price. Meanwhile, global food shortages and possibly famine are real possibilities this winter because Ukrainian and Russian grain won’t be delivered.

The tragedy is that all of this could have been prevented had the U.S. and NATO guaranteed Russia that Ukraine would never be invited into the alliance. That’s not a defense of Putin’s invasion, by the way, which I condemn. It’s just reality.

Now the world is living with the results.

Tyler Durden
Thu, 08/25/2022 – 07:20

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“End Of Abundance”: Macron Warns Of “Major Tipping Point” And “Great Upheaval” As Difficult Winter Approaches

“End Of Abundance”: Macron Warns Of “Major Tipping Point” And “Great Upheaval” As Difficult Winter Approaches

With much of Europe facing a cold winter thanks to the war in Ukraine, various leaders have been sounding the alarm over the ‘sacrifices’ people are going to have to make in order to maintain opposition to Vladimir Putin – who’s betting on fracturing the EU due to Russia’s immense leverage over energy.

The equestrian statue of Frederick the Great on Unter den Linden Avenue in Berlin after the illumination was switched off on July 27. (Omer Messinger/Getty Images)

On Wednesday we reported that that both EU policy Chief Josep Borrell warned that “wary” EU populations would have to endure deep economic pain and a severe energy crunch – while calling on the citizenry to “bear the consequences” with continued resolve.

The same day, Belgian Prime Minister Alexander De Croo went much further – suggesting that “the next 5 to 10 winters will be difficult.”

“The development of the situation is very difficult throughout Europe,” De Croo told Belgium broadcaster VRT. 

“In a number of sectors, it is really difficult to deal with those high energy prices. We are monitoring this closely, but we must be transparent: the coming months will be difficult, the coming winters will be difficult,” he said. 

The prime minister’s comments suggest replacing Russian natural gas imports could take years, exerting further economic doom on the region’s economy in the form of energy hyperinflation.

And in yet another ominous warning in what must have been coordinated messaging, French President Emmanuel Macron on Wednesday went even further  – warning at his first cabinet meeting after the summer holidays that the French should expect to make deep sacrifices in what he called the “end of abundance.”

Speaking before ministers at the Élysée, Macron said that the country was at a “tipping point” as it faced a difficult winter and a new era of instability due to climate change and Russia’s invasion of Ukraine, according to The Guardian.

“What we are currently living through is a kind of major tipping point or a great upheaval … we are living the end of what could have seemed an era of abundance … the end of the abundance of products of technologies that seemed always available … the end of the abundance of land and materials including water,” he said, adding that France and the French felt that they’ve been living under a series of crises, “each worse than the last.”

“This overview that I’m giving, the end of abundance, the end of insouciance, the end of assumptions – it’s ultimately a tipping point that we are going through that can lead our citizens to feel a lot of anxiety. Faced with this, we have a duty, duties, the first of which is to speak frankly and clearly without doom-mongering,” Macron continued, adding that France, Europe and the world had possibly been too “insouciant” about threats to democracy and human rights – while warning of the “rise of illiberal regimes and strengthening of authoritarian regimes.”

Tone deaf?

According to the report, Philippe Martinez, the secretary general of the powerful CGT union criticized Macron’s comments as being “misplaced” – adding that many French citizens have never known abundance.

Philippe Martinez, pictured here in June 2022. Photograph: Luc Nobout/Zuma Press/Rex/Shutterstock

“When we talk about the end of abundance, I think of the millions of unemployed, the millions of those in a precarious situation. For many French people, times are already hard, sacrifices have already been made,” he said.

The president’s warnings came as it was revealed that the dividends paid out by major French companies reached a record €44bn in the second quarter of 2022, as a result of what were described as exceptional profits in 2021. The economic newspaper Les Echos said the dividend payout was almost 33% up on the previous year and was the result of a post-Covid economic catchup.

Macron, who was re-elected for a second five-year term in April but lost his parliamentary majority in the subsequent general election, and his government are facing a rocky rentrée, the traditional September return to work and school after the long summer break in France.

After months of successive election campaigns, his newly appointed government had little time to establish itself before the holidays, putting this year’s return to parliamentary business under particular scrutiny. -The Guardian

During a commemoration ceremony for the allied invasion of Provence in 1944, Macron warned that this autumn and winter would be a difficult one – with the risk of energy shortages and high prices due to Russia’s war on Ukraine – which he referred to as “the price to pay for freedom.”

Tyler Durden
Thu, 08/25/2022 – 06:55

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Half Of UK Households Will Be In Fuel-Poverty By January

Half Of UK Households Will Be In Fuel-Poverty By January

Authored by Irina Slav via Oilprice.com,

As many as half of British households may be facing fuel poverty because of the inexorable rise in energy prices, EDF, the French utility that also has business in the UK, has warned.

“When you look at the figures more than half of UK households will be in fuel poverty in January, meaning they will have to spend more than 10% of their disposable income on their energy bill,” Philippe Commaret, managing director of customers at EDF told a BBC TV program, as quoted by Energy Live news.

The UK’s energy market regulator Ofgem is set to announce the latest energy price cap this week, which will see electricity bills for millions of Britons rise considerably.

The price cap, aimed to protect households from excessively high bills by capping the price increases that providers can pass on to them, normally gets adjusted twice a year.

In April this year, the cap was raised by more than 50%, doubling the number of fuel-stressed households in the UK overnight. But the UK hasn’t seen the worst of its cost-of-living crisis as energy bills were expected to soar by another 42% in October when the energy regulator will raise the energy price cap again.  

The UK Misery Index is at its worst level since the start of John Major’s term as Prime Minister…

But the adjustment looks like it would be even higher than previously expected, with the latest forecasts seeing bills topping 6,500 pounds annually for millions of households next year, all because of higher natural gas prices. This is equivalent to about $7,600 per year.

The UK imports gas from Europe, which has made it vulnerable to the effects of EU political action despite Brexit.

“The impact has been exacerbated by high electricity prices in Europe, where drought conditions have affected hydro power plants and unplanned outages have reduced French nuclear output,” a senior VP from Moody’s told CNBC this week in comments on the UK’s energy situation.

Tyler Durden
Thu, 08/25/2022 – 06:30

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Grain Traders See Record Profits Amid Food Crisis, Prompting Calls For Windfall Tax

Grain Traders See Record Profits Amid Food Crisis, Prompting Calls For Windfall Tax

Major grain traders have drawn concerns over profiteering and speculation in global food markets, prompting calls for a windfall tax.

According to The Guardian, the world’s top four grain traders (Archer-Daniels-Midland, Bunge, Cargill and Louis Dreyfus, known collectively as ABCD) have seen record or near-record profits or sales, and are forecasting demand to outstrip supply until at least 2024 – likely leading to even higher sales and profits over that period. The four companies control between 70% and 90% of global grain trade.

Cargill reported a 23% jump in revenues to a record $165bn for the year ended May 31, while Archer-Daniels-Midland recorded the highest profits in company history during the second quarter of this year. Bunge saw sales spike 17% in Q2, while Louis Dreyfus reported an 80% jump in profits for 2021 vs. the previous year on revenues of $1.62bn, a jump of nearly 25%.

According to the UN Food and Agriculture Organization, food prices have spiked over 20% this year – while around 345 million people suffer from acute food insecurity according to the World Food Program, vs. 135 million people before the Covid-19 pandemic.

Olivier De Schutter, a co-chair of IPES-Food (the International Panel of Experts on Sustainable Food Systems) and UN special rapporteur on extreme poverty and human rights, said: “The fact that global commodity giants are making record profits at a time when hunger is rising is clearly unjust, and is a terrible indictment of our food systems. What’s even worse, these companies could have done more to prevent the hunger crisis in the first place.” -The Guardian

The rising price of grain has several causes – including the war in Ukraine, one of the largest producers of grain, sunflower oil, maize, and fertilizer. In addition, heatwaves in Europe, North America and India have affected production, while last year’s heatwaves in Canada hurt wheat crop yields. Ongoing high temperatures and wildfires this year will likely lead to further disruptions.

“Global grain markets are even more concentrated than energy markets and even less transparent, so there is a huge risk of profiteering” said De Schutter, who added that this year’s food price surge happened amid what was thought to be abundant global grain reserves. He says the ABCD companies weren’t transparent in revealing how much grain they hold, and there’s no way to force them to release stocks in a timely fashion.

“We need to be looking at the grain giants and asking what they could have done to avert the crisis, and what they could be doing now,” he said.

Not intentional?

Moody’s analyst John Rogers says it’s not surprising that supply constraints and a jump in demand led to higher grain prices and, therefore, higher profits.

“I don’t think they are colluding for outsize profits,” he said, adding that other companies have been taking an increasing share of global grain markets.

“I don’t think they are acting immorally – they’re not intentionally driving up prices.”

Between the Ukraine war and heatwaves, grain producers stand to benefit greatly – as demand for their product surges amid constrained supplies.

“Ultimately, we need to break up the monopolies that have a stranglehold on the food chain. A handful of companies control global seed and fertiliser markets, animal genetics, the global grain trade, and food retail. They are making huge profits at the cost of farmers, consumers and the environment,” said De Schutter.

Tyler Durden
Thu, 08/25/2022 – 05:45

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