Month: August 2022

Lawsuit: Orlando Rent Control Proposal Is Illegal


close-up of Florida on map with a green pin stuck by Orlando

Sky-high rent increases have escaped expensive coastal metros to hit fast-growing, traditionally more-affordable metros in the Sunbelt. Spreading with those price hikes are new battles over rent control.

The latest flare-up is in Orlando, Florida, which has seen some of the fastest rental price increases since the start of the pandemic, growing 20 percent over the past year according to Apartment List’s latest rent report. Only Miami has seen faster rent growth.

In response, earlier this month, commissioners in Orange County placed an initiative on the coming November ballot that would limit rent increases to annual inflation, as measured by the consumer price index. The measure also authorizes fines of up to $15,000 for noncompliant landlords and gives tenants the right to sue over violations of the law.

“Corporate landlords, real estate investors and developers are raising prices and making record profits while hardworking Orange County residents are priced out of their communities,” said Stephanie Porta, a cofounder of the social justice group Florida Rising, last month during a commission meeting.

Less excited about the ballot initiative are property owners, who have filed a lawsuit arguing that the rent control initiative is illegal under Florida state law and should be taken off the ballot.

In a complaint filed last week, the Florida Apartment Association and the Florida Association of Realtors described the rent control ordinance “adverse and antagonistic to the public interest” and said they “face a likelihood of irreparable harm” if it remains on the ballot.

The lawsuit generally skips over the bigger constitutional questions of rent control and instead challenges the Orange County ordinance for violating the high bar state law sets for adopting the policy.

Florida intentionally makes it very difficult for local governments to impose rent control. Cities councils and county commissions must approve a rent control ordinance themselves and then put it on the ballot. The policy also sunsets after a year as well.

Most importantly for the lawsuit challenging Orange County’s measure, the local government must also declare that there’s a housing emergency “so grave as to constitute a serious menace to the general public and that such controls are necessary and proper to eliminate such grave housing emergency.”

As described in the complaint, Orange County commissioners received a lot of expert advice that the conditions in the county in 2022 failed to meet this strict definition of emergency.

A memo from the county attorney said that factors beyond an increase in rental prices and a shortage of rental housing were necessary to prove an emergency. Rather, it required rampant evictions and housing overcrowding so bad that it was resulting in disease and in sanitary conditions.

Another county-commissioned report also found that rent control would not solve the regional and national housing market trends driving higher rents. Nevertheless, the county commission voted in a close 4–3 decision to put the question to voters.

The plaintiffs are demanding in their lawsuit that rent control be removed from the ballot and that the court prevent the county from enforcing it if it does pass.

Rent control is having a revival right now as the housing affordability situation worsens across the nation. But despite some efforts by activists and commentators to rehabilitate the policy’s image, the results of rent control everywhere it has been tried suggest that it benefits a few incumbent tenants while permanently suppressing the housing supply it regulates.

There’s no reason to think Orange County will be any different.

The post Lawsuit: Orlando Rent Control Proposal Is Illegal appeared first on Reason.com.

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Ron DeSantis Touted the Arrest of 20 People for Illegally Voting. Some Say They Were Told They Were Eligible.


Ron DeSantis speaks in front of the Florida flag

Last Thursday, Florida Republican Gov. Ron DeSantis held a press conference announcing the arrest of 20 people for illegally voting, many of them for voting despite having a felony record for murder or sex offenses.

“They did not go through any process, they did not get their rights restored, and yet they went ahead and voted anyways,” DeSantis said. “That is against the law, and now they’re gonna pay the price for it.”

The announcement was a debut of sorts for the state’s new Office of Election Crimes and Security, created as part of a package of tighter voting laws passed by the Republican-controlled Legislature. However, multiple news outlets have reported that many of those arrested for illegally voting thought they were eligible or said they had been told they were eligible.

The Tampa Bay Times reported that Romona Oliver, one of the arrestees touted by DeSantis, was asked if she had a felony record when she filled out paperwork to register to vote at the county tax collector’s office. But Oliver, who had recently completed a 20-year sentence second-degree murder, was never asked if her right to vote had been restored. County officials don’t verify eligibility; they simply send the paperwork to the state.

Oliver voted for the first time in her life in the 2020 presidential election. “It was exciting for me because I felt like after all that time, I want to get out and try to do the right thing,” she told the newspaper. “Give back to the community.”

Instead, she is now facing a third-degree felony, which carries up to $5,000 in fines and five years in prison.

Five of those arrested told the Tampa Bay Times that “they believed they were able to vote and had faced no issue registering.”

Orlando outlet News 6 reported that three Orange County residents who were arrested for illegally voting all thought they were eligible. According to an arrest report for Jerry Foster, one of the men arrested for illegally voting, “Foster called the Orange County Sheriff’s Office resident deputy assigned to sexual offenders and inquired about voting and the deputy reportedly told him that he could vote.”

The confusion stems from Amendment 4, a constitutional amendment approved by Florida voters in 2018 to restore voting rights to those with felony records, except those convicted of murder or sex offenses. At the time, Florida was one of four states that imposed lifetime voting bans on felony offenders.

However, the implementation of Amendment 4 was bogged down in controversy. The amendment said that those with felony records would have their rights restored upon completion of “all terms” of their sentence, but it was unclear if this included court fines and fees. Republicans insisted that it did, while civil liberties groups and Democrats said that would amount to an illegal poll tax and bar many, if not most, felony offenders from getting their rights restored.

The Republican-controlled Legislature passed a bill requiring payment of fines and fees to restore one’s voting rights. A federal judge, ruling in a civil rights lawsuit challenging the new law, declared that parts of the law were unconstitutional, but that ruling was overturned by the 11th Circuit Court of Appeals.

What became clear during the trial was that state officials, much less county officials, didn’t have an easy way to check someone’s eligibility against their criminal record or see how much they still owed in fines. That leaves the onus, and the risk of arrest, on the individual.

Florida State Sen. Jeff Brandes (R–St. Petersburg), who shepherded the bill implementing Amendment 4, tweeted last week that the Legislature never intended it to be used so harshly against those who accidentally voted.

The Florida Rights Restoration Coalition, a grassroots advocacy group that worked to pass Amendment 4, said in a press release that the Amendment “is very clear on who is eligible and who is not eligible to vote. When someone registers to vote, it is the responsibility of the state to determine an individual’s eligibility prior to issuing a voter identification card.”

“If Floridians can not rely on the government to verify their eligibility,” the group asked, “who can they rely on?”

Such cases of harsh punishment for allegedly honest mistakes, or in some cases government mistakes, are not limited to Florida. Reason‘s Billy Binion wrote earlier this year about the case of Pamela Moses, a Tennessee woman who was sentenced to six years in prison for illegally registering to vote while on probation. Moses’ probation officer had incorrectly signed off on paperwork stating that she had finished her probation. And there’s the case of Crystal Mason, a Texas woman sentenced to five years in prison for voting while still on supervised release, a crime she says she was oblivious to.

The post Ron DeSantis Touted the Arrest of 20 People for Illegally Voting. Some Say They Were Told They Were Eligible. appeared first on Reason.com.

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Gavin Newsom Vetoes Bill Legalizing ‘Safe Consumption Sites’ in 3 California Cities


Gov. Gavin Newsom speaking, wearing a navy blue quarter-zip sweater

On Monday, Democratic California Gov. Gavin Newsom vetoed a bill legalizing “safe consumption sites” in Los Angeles, San Francisco, and Oakland. Safe consumption sites, also known as “safe injection sites,” are locations where individuals can use illegal drugs in a sanitary area with access to clean needles and staff who can administer drugs like naloxone, which can quickly treat an overdose. Proponents of the legislation argue that the sites are an important harm reduction tool, helping to prevent overdose deaths or the spread of certain diseases, like HIV, that can be spread through intravenous drug use.

“Safe injection sites aren’t intended to be some sort of magic solution to a chronic drug addiction crisis; they are intended to reduce the likelihood of users dying,” Reason’s Scott Shackford wrote after the bill’s passage in the state Legislature earlier this month.

Where safe consumption sites are legal, they have proved tremendously effective. As of 2019, one safe consumption site in Vancouver, Canada, has overseen more than 3.6 million instances of drug injection since its opening in 2003. At the site, staff responded to 6,440 overdoses with no deaths. A study examining the site’s operations from 2004 to 2008 predicted that, during that period, the site prevented up to 51 deaths. According to NPR, researchers also found no increase in drug usage in the surrounding area.

“Safe consumption sites have been in operation around the world for approximately 30 years, with great success and literally zero overdose deaths,” state Sen. Scott Wiener (D–San Francisco), who originally introduced the bill, told CBS Bay Area. “These sites are a proven strategy to reduce overdose deaths, pressure on emergency rooms, and public drug use, while expanding access to drug treatment”

However, Newsom seems unconvinced that safe consumption sites will help the state’s drug users. “I have long supported the cutting edge of harm reduction strategies,” Newsom wrote in a statement explaining his veto of the bill. “However, I am acutely concerned about the operations of safe injection sites without strong, engaged local leadership, and well-documented, vetted, and thoughtful operational and suitability plans.” Newsom further expressed concerns that the bill could lead to “a world of unintended consequences… worsening drug consumption challenges in [Los Angeles, San Francisco, and Oakland] is not a risk we can take.”

“It’s tremendously frustrating that safe injection sites have met continued resistance at the federal and state levels, including in supposedly liberal states like California,” Geoffroy Lawrence, the managing director of drug policy at Reason Foundation (the nonprofit that publishes this website), tells Reason. “While safe injection sites may sound counterintuitive to some people as an effective means to combat addiction, there’s no arguing with the data. Results from other countries have shown that safe injection sites lead to a reduction in overdose deaths and transmission rates of infectious disease and an increase in the number of individuals seeking addiction recovery.”

It is possible that Newsom’s veto of the bill has little to do with the efficacy of safe injection sites and instead is the result of his preparation for a possible presidential run in 2024. On July 4, he placed political ads on several Florida television stations, criticizing Republican Florida Gov. Ron DeSantis, also a possible presidential contender. With cities like San Francisco and Los Angeles gaining attention in national media for their homelessness crisis (which is associated with drug use), Newsom could be eager to present a more anti-drug, even “tough on crime” image.

Newsom’s presidential ambitions, or simply his desire to appear less soft on crime, might be getting in the way of a safe and effective public health strategy for preventing drug overdoses.

“The American approach to the drug war has historically been about restricting supply when changing demand was always the better approach,” said Lawrence. “That’s what so-called ‘harm reduction’ policies, including safe injection sites, are all about.”

The post Gavin Newsom Vetoes Bill Legalizing 'Safe Consumption Sites' in 3 California Cities appeared first on Reason.com.

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Lawsuit: Orlando Rent Control Proposal Is Illegal


close-up of Florida on map with a green pin stuck by Orlando

Sky-high rent increases have escaped expensive coastal metros to hit fast-growing, traditionally more-affordable metros in the Sunbelt. Spreading with those price hikes are new battles over rent control.

The latest flare-up is in Orlando, Florida, which has seen some of the fastest rental price increases since the start of the pandemic, growing 20 percent over the past year according to Apartment List’s latest rent report. Only Miami has seen faster rent growth.

In response, earlier this month, commissioners in Orange County placed an initiative on the coming November ballot that would limit rent increases to annual inflation, as measured by the consumer price index. The measure also authorizes fines of up to $15,000 for noncompliant landlords and gives tenants the right to sue over violations of the law.

“Corporate landlords, real estate investors and developers are raising prices and making record profits while hardworking Orange County residents are priced out of their communities,” said Stephanie Porta, a cofounder of the social justice group Florida Rising, last month during a commission meeting.

Less excited about the ballot initiative are property owners, who have filed a lawsuit arguing that the rent control initiative is illegal under Florida state law and should be taken off the ballot.

In a complaint filed last week, the Florida Apartment Association and the Florida Association of Realtors described the rent control ordinance “adverse and antagonistic to the public interest” and said they “face a likelihood of irreparable harm” if it remains on the ballot.

The lawsuit generally skips over the bigger constitutional questions of rent control and instead challenges the Orange County ordinance for violating the high bar state law sets for adopting the policy.

Florida intentionally makes it very difficult for local governments to impose rent control. Cities councils and county commissions must approve a rent control ordinance themselves and then put it on the ballot. The policy also sunsets after a year as well.

Most importantly for the lawsuit challenging Orange County’s measure, the local government must also declare that there’s a housing emergency “so grave as to constitute a serious menace to the general public and that such controls are necessary and proper to eliminate such grave housing emergency.”

As described in the complaint, Orange County commissioners received a lot of expert advice that the conditions in the county in 2022 failed to meet this strict definition of emergency.

A memo from the county attorney said that factors beyond an increase in rental prices and a shortage of rental housing were necessary to prove an emergency. Rather, it required rampant evictions and housing overcrowding so bad that it was resulting in disease and in sanitary conditions.

Another county-commissioned report also found that rent control would not solve the regional and national housing market trends driving higher rents. Nevertheless, the county commission voted in a close 4–3 decision to put the question to voters.

The plaintiffs are demanding in their lawsuit that rent control be removed from the ballot and that the court prevent the county from enforcing it if it does pass.

Rent control is having a revival right now as the housing affordability situation worsens across the nation. But despite some efforts by activists and commentators to rehabilitate the policy’s image, the results of rent control everywhere it has been tried suggest that it benefits a few incumbent tenants while permanently suppressing the housing supply it regulates.

There’s no reason to think Orange County will be any different.

The post Lawsuit: Orlando Rent Control Proposal Is Illegal appeared first on Reason.com.

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Bonds, Stocks, & The Dollar Sink As Hawkish Hedges Dominate ‘Dovish’ Dismal Data

Bonds, Stocks, & The Dollar Sink As Hawkish Hedges Dominate ‘Dovish’ Dismal Data

A lot of chaotic noise intraday for what looks on a close-to-close basis like a quiet continuation day for stocks and bonds.

Could be a lot worse though…

Ugly PMIs, crashing new home sales, and a dismal Richmond fed print sparked a big push back into the “Fed Pivot” – which sent rate-hike expectations tumbling. But the anxiety into Friday’s Powell speech dominated the “but the economy’s in the shitter narrative and The Fed must save us” narrative by the close with rate-hike expectations trending higher and rate-cut expectations shifting hawkishly…

Source: Bloomberg

The ‘bad news’ was good news for stocks initially but all those “The Fed will ease and BTFD” gains were erased by the close. The Dow was weakest on the day while Small Caps actually held on to some gains…

Bonds were also choppy but all but the 2Y yield ended the day higher (after tumbling lower on the weak macro). Note that yields surge back higher after the ugly 2Y auction..

Source: Bloomberg

The 10Y yield found support at 3.00% today after breaking above it yesterday…

Source: Bloomberg

The dollar puked on the ‘dovish’ dismal data but saw some bounceback. We do note that while stocks erased their shift and so did bonds, the dollar did not…

Source: Bloomberg

Bitcoin was higher on the day, finding support at $21,000 once again…

Source: Bloomberg

Gold and the dollar held on to most of their ‘dovish’ move while stocks and bonds gave it all back…

Source: Bloomberg

Oil prices spiked today after OPEC+ production cut headlines continued from yesterday

Gold rallied as the dollar dumped, with futures back above $1750…

US NatGas topped $10 for the first time since 2008 early on but then news of the delayed reopening of Freeport’s LNG terminal sparked a sell-off in Henry Hub….

But EU NatGas will be pushed higher once again on this – back near $500/barrel oil equiv…

Source: Bloomberg

“The catastrophe is already there,” Thierry Bros, a professor in international energy at Sciences Po in Paris, said.

“I think the major question is when EU leaders are going to wake up.”

High gas prices means high electricity prices – how high? For context, German one-year-ahead power is trading over $1000 on an oil-barrel-equiv basis…

Source: Bloomberg

Finally, as Julian Timmer noted in a tweet today, the rebound rally is at a crossroads:

“The S&P 500 has retraced 53% of its decline, and this is as far as bear market rallies go…

That means that if the market continues to climb, technically speaking there will be no historical basis for concluding that this is not a new cyclical bull market.”

RIP Julian Robertson.

Tyler Durden
Tue, 08/23/2022 – 16:00

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US Prepares $3BN More In Ukraine Defense Aid To “Fight For Years To Come”

US Prepares $3BN More In Ukraine Defense Aid To “Fight For Years To Come”

The Biden administration is set to roll out with another $3 billion in Ukraine defense aid, including funds to train and equip Ukrainian forces “to fight for years to come,” according to US officials cited in the Associated Press.

Also, higher energy prices for years to come? higher food prices? greater scarcity? It appears precisely this is what US policy-makers and Pentagon planners are settling in for: “As Russia’s war on Ukraine drags on, U.S. security assistance is shifting to a longer-term campaign that will likely keep more American military troops in Europe into the future, including imminent plans to announce an additional roughly $3 billion in aid to train and equip Ukrainian forces to fight for years to come, U.S. officials said,” according to the AP report.

Pallets of ammunition and weapons: US Air Force handout via AP

The package is expected to be officially announced Wednesday, which is exactly the day the war hits the six month mark – and on the occasion of Ukraine’s Independence Day, celebrating 31 years since Soviet rule ended there. 

Like prior pledged packages, now at 18 rounds and counting since Feb.24, the weapons systems may not see the battlefield for a long time, again underscoring this concept of preparations for a ‘long war’ – and America taking a “proxy” backseat with Ukrainians at the front lines. 

“The money will fund contracts for drones, weapons and other equipment that may not see the battlefront for a year or two, they said,” the AP continues, referencing defense officials.

As for the deepened US military footprint and presence in Europe in response to the Russian invasion of Ukraine, which opens the door for the eventuality of direct US-Russia confrontation, the Pentagon is preparing for an expanded, longer term presence. 

“Unlike most previous packages, the new funding is largely aimed at helping Ukraine secure its medium- to long-term defense posture, according to officials familiar with the matter.”

Reuters notes that “The package uses funds from the Ukraine Security Assistance Initiative (USAI) appropriated by Congress to allow the Biden administration to procure weapons from industry rather than taking weapons from existing U.S. weapons stocks.”

Former US Congressman Ron Paul summarized the state of things best in describing where foreign policy meets domestic, and the near future impact on every American: 

Last Friday the Pentagon announced that yet another $775 million would be sent to Ukraine. As Antiwar.com reported, it was the eighteenth weapons package to Ukraine in six months. Has there ever been a more idiotic US intervention in history?

Supporters of this proxy war may celebrate more aid to Ukraine, but the reality is that it is in no way aid to Ukraine. That’s not how the system works. It is money created out of thin air by the Fed and appropriated by Congress to be spent propping up the politically-connected military-industrial complex. It is a big check written by middle America to rich people who run Raytheon and Lockheed Martin.

It’s the same story going back especially to Iraq, Afghanistan, or even Syria, and every scenario of ‘endless’ conflict: “Americans watch their budget being stretched to the limit while the Beltway fat-cats loosen their belts to continue enjoying the gravy train,” Dr.Paul writes. 

Tyler Durden
Tue, 08/23/2022 – 15:41

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Here’s What Jerome Powell Will Say At Jackson Hole, According To Goldman

Here’s What Jerome Powell Will Say At Jackson Hole, According To Goldman

What was already a difficult task for J-Powell who leads off Friday’s J-Hole symposium with a closely watched speech at 10am (webcast here), became even more complex when in addition to red hot inflation, today’s data confirmed that the housing market is crashing faster than expected, while the US service economy remains mired in deep recession, leaving the Fed chairman trapped: does he come out as hawkish and warn of a 75bps hike, making the recession even worse, or does he stay the somewhat dovish FOMC course, which however would send stocks shooting higher and undo all the financial condition tightening observed in recent months, while boosting inflation further.

While nobody knows what the Fed chair will say, the one bank that probably has some clue is the one that has spawned more central bankers than any other place on earth: Goldman Sachs.

In a note published this afternoon (and available to pro subs) Goldman economists Jan Hatzus and David Mericle lay out not only what Powell’s Challenge is (slowing the pace without easing financial conditions), but also what the former lawyer could say. We excerpt from the full note (as usual, the entire report is available to professional subscribers):

Cutting to the chase, Goldman expects Powell to reiterate the case for slowing the pace of tightening laid out in his July press conference and the July minutes released last week, while also stressing that the FOMC remains committed to bringing inflation down and that policy decisions at upcoming meetings—including in September—will depend on incoming data. “This will require striking a delicate balance.”

Some more takes from the Goldman economists: :

Powell offered several reasons for slowing down in his press conference at the July FOMC meeting. He noted that 75bp hikes are unusually large, that the full effect of rate hikes has not yet been felt, and that the FOMC is aiming to rebalance supply and demand through below-potential growth, not a recession. The minutes to the July meeting that were released last week noted that many participants saw a risk of overtightening in a quickly changing economic environment. Our sense is that the Fed leadership feels strongly that it is appropriate to move at a slower pace going forward to reduce the risk of unintentionally causing a recession, and that Powell will want to repeat this message at Jackson Hole.

Powell will likely balance that message with more hawkish language that emphasizes the FOMC’s firm commitment to bring inflation down. He is also likely to provide a balanced assessment of progress to date on the FOMC’s efforts to lower inflation without a recession. This might include noting that job openings have fallen sharply but monthly hiring remains very strong, or that commodity prices have fallen and supply chain disruptions are diminishing, but underlying wage growth and inflation trends remain much too high. In short, that there are early signs of progress, but there is still a long way to go.

What about risks of a dovish flip? 

As the Goldman economists ask rhetorically, “would Powell really risk sending a dovish message that could reinforce the easing in financial conditions that followed the July FOMC meeting shown?” In keeping with what it said previously, Goldman suspects that the Fed leadership saw the recent easing as unhelpful to its task of keeping the economy on a below-potential growth trajectory, but not problematic enough to scrap its plan to slow the pace of tightening or even to refrain from discussing that plan at Jackson Hole. Much of the easing in financial conditions has reversed and its impact is now quite modest. Moreover, the easing has been driven entirely by a rally in the equity market that has occurred alongside a modest rise in interest rates, suggesting it is less a result of dovish Fed guidance than of premature reassurance about the inflation outlook in the equity market that Fed officials did nothing to encourage.

The economic data since the July meeting have also probably been good enough on balance to keep the original plan on track. While the July employment report was very strong, the softer-than-expected CPI and PPI reports have likely kept the leadership comfortable proceeding with the plan to slow down.

In conclusion, Goldman continues to expect the FOMC to slow the pace of rate hikes to 50bp in September and 25bp in November and December, consistent with Powell’s endorsement of the June dots in his July press conference. That said, there is upside risk to both the near-term pace and the bank’s terminal rate forecast of 3.25-3.5% from the recent easing in financial conditions, the robust pace of hiring, and signs of stickiness in wage growth and inflation. There is clearly a range of views on the FOMC, including support for a faster pace. If the FOMC decides to tighten more aggressively, the Fed leadership would prefer to deliver multiple 50bp rate hikes rather than another 75bp rate hike in September.

More in the full note available to pro subs.

Tyler Durden
Tue, 08/23/2022 – 15:20

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Here’s Why One Bank Is “Terrified” Into Friday

Here’s Why One Bank Is “Terrified” Into Friday

Aside from today’s dovish tilt (after this morning’s shitshow of data), the market has scrambling back into “hawkish” expressions over the last week…

This shift comes ahead of:

1) anticipated commentary from Jerome Powell at Jackson Hole…

…while also, 2) the world watches the European / UK Energy crisis spin further out of control…

…at the same time that 3) OPEC+ is now jawboning about reducing supply to reduce Oil volatility (LOL), sending Crude squeezing HIGHER…

…and all while reports are that 4) the Biden Administration is a pre-midterm vote popularity push is going to pursue Student Loan forgiveness – a sizeable economic “Stimulus” at an eye-raising time.

Hence, as Nomura’s Charlie McElligott notes, another blast of “hawkishness” due to concerns that various inflation overshoot impulses around the world remain “structurally sticky” and will, in-turn, see global Central Banks forced to run “restrictive / higher for longer,” versus the premature capitulation from some into the “growth slowdown >>> Fed pivot” misinterpretation from July

Within the STIRS space, the Nomura strategist points out that we are seeing outright destruction of those fake-news “Fed pivot” trades across the front half of 2023…

So now that we know where we stand – with a rather clear ‘hawkish’ setup into Jackson Hole, why is McElligott so terrified into Friday?

The Cross-Asset Strategist explains:

I’m scared of another Powell tilt in what may yet-again look like simply “stay the course” commentary on Jackson Hole, which will then be taken as “dovish” relative to increasingly EXTREME hawkish market expectations which are ratcheting aggressively higher, as per the aforementioned de-inversions in front 23 ED$ curves…because that’s the point: Powell rationally SHOULD BE “leaning-in” hawkishly now while Labor and Wage extremes are giving it to him, and work to tighten FCI again, in order to get the demand destruction he’s supposedly working to achieve.

But his M.O. in recent meetings or profile appearances has been a to come-off as “less hawkish” than the markets were anticipating / pricing into those meetings…where instead, his “balanced” tone has then led to a de facto “dovish impulse” which has (counter-productively) seen risk-assets rally and FCI ease

Not so tongue-in-cheek commentary:

 if Chair Powell were serious about slaying the demand-side feeding into the inflation beast (with Jobs and Wages too hot, too low Reals, too easy FCI), he would 1) go up there with a ticking Ethereum crypto chart on his screen and 2) talk about the potential for a Terminal Rate above current market pricing until it cratered and Real Yields were +25bps on the day—problem solved

BUT INSTEAD (yikes), here is Rob Dent et al’s Jackson Hole preview, which I think captures said “high risk” that I’m concerned of, where anything less than heavy-handed hawkishness is instead “de facto dovish,” especially because the world is anticipating the opposite:

  • We believe Powell’s speech at Jackson Hole at 10am on Friday morning may present an important opportunity for the Fed to evaluate the current inflation landscape via two perspectives: 1) a look back at recent inflation developments since Powell’s 2021 Jackson Hole speech, and 2) a longer review of the Fed’s history with tightening policy and inflation, potentially with a focus on the 1970s experience.

  • Separately, Powell may more clearly acknowledge the potential for “some pain” as a result of the Fed’s efforts to restore price stability. A number of recent notes from Federal Reserve staff have highlighted rising recession risk, and we continue to expect a mild recession to start later this year.

  • Without August CPI data in hand, we do not expect Powell to signal a strong preference for policy action at the September meeting. Moreover, his remarks may be light on forward guidance in general, considering the elevated uncertainty around the economic outlook. However, financial conditions have eased in recent months, and Fed participants may opt for refocusing market attention on the difficult task at hand.

If what Rob anticipates above – that Powell will acknowledge “some pain” and rising recession risk, versus being light on forward guidance / doesn’t address market pricing of the Terminal Rate – this is gonna be flames for consensus into the speech.

And the fact that Rates traders have repositioned so aggressively “hawkish” yet again in STIRs (outright “Shorts” in SOFR and ED$s at highs, Net positions in SOFR / ED$ at lows, de-inversions in the prior 1H23 “easing” priced-in, Reals galloping higher again) and with Equities “FCI tightening trades” back all the rage (Momentum, Low Risk, Quality, Defensive Value leadership from above, while the Junk rally reverses and Secular Growth “Duration” Nasdaq leads lower again)….this perversely becomes the perfect set-up for the dovish face-ripper Friday IF Powell does NOT deliver, yet again.

And so, McElligott suggests that tactical “Dovish” (Duration Equities & Bonds higher, USD downside) expressions via Options make sense here – because the market’s ability to seek and destroy consensus views for much of the year has been the one consistency.

Tyler Durden
Tue, 08/23/2022 – 15:00

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Ron DeSantis Touted the Arrest of 20 People for Illegally Voting. Some Say They Were Told They Were Eligible.


Ron DeSantis speaks in front of the Florida flag

Last Thursday, Florida Republican Gov. Ron DeSantis held a press conference announcing the arrest of 20 people for illegally voting, many of them for voting despite having a felony record for murder or sex offenses.

“They did not go through any process, they did not get their rights restored, and yet they went ahead and voted anyways,” DeSantis said. “That is against the law, and now they’re gonna pay the price for it.”

The announcement was a debut of sorts for the state’s new Office of Election Crimes and Security, created as part of a package of tighter voting laws passed by the Republican-controlled Legislature. However, multiple news outlets have reported that many of those arrested for illegally voting thought they were eligible or said they had been told they were eligible.

The Tampa Bay Times reported that Romona Oliver, one of the arrestees touted by DeSantis, was asked if she had a felony record when she filled out paperwork to register to vote at the county tax collector’s office. But Oliver, who had recently completed a 20-year sentence second-degree murder, was never asked if her right to vote had been restored. County officials don’t verify eligibility; they simply send the paperwork to the state.

Oliver voted for the first time in her life in the 2020 presidential election. “It was exciting for me because I felt like after all that time, I want to get out and try to do the right thing,” she told the newspaper. “Give back to the community.”

Instead, she is now facing a third-degree felony, which carries up to $5,000 in fines and five years in prison.

Five of those arrested told the Tampa Bay Times that “they believed they were able to vote and had faced no issue registering.”

Orlando outlet News 6 reported that three Orange County residents who were arrested for illegally voting all thought they were eligible. According to an arrest report for Jerry Foster, one of the men arrested for illegally voting, “Foster called the Orange County Sheriff’s Office resident deputy assigned to sexual offenders and inquired about voting and the deputy reportedly told him that he could vote.”

The confusion stems from Amendment 4, a constitutional amendment approved by Florida voters in 2018 to restore voting rights to those with felony records, except those convicted of murder or sex offenses. At the time, Florida was one of four states that imposed lifetime voting bans on felony offenders.

However, the implementation of Amendment 4 was bogged down in controversy. The amendment said that those with felony records would have their rights restored upon completion of “all terms” of their sentence, but it was unclear if this included court fines and fees. Republicans insisted that it did, while civil liberties groups and Democrats said that would amount to an illegal poll tax and bar many, if not most, felony offenders from getting their rights restored.

The Republican-controlled Legislature passed a bill requiring payment of fines and fees to restore one’s voting rights. A federal judge, ruling in a civil rights lawsuit challenging the new law, declared that parts of the law were unconstitutional, but that ruling was overturned by the 11th Circuit Court of Appeals.

What became clear during the trial was that state officials, much less county officials, didn’t have an easy way to check someone’s eligibility against their criminal record or see how much they still owed in fines. That leaves the onus, and the risk of arrest, on the individual.

Florida State Sen. Jeff Brandes (R–St. Petersburg), who shepherded the bill implementing Amendment 4, tweeted last week that the Legislature never intended it to be used so harshly against those who accidentally voted.

The Florida Rights Restoration Coalition, a grassroots advocacy group that worked to pass Amendment 4, said in a press release that the Amendment “is very clear on who is eligible and who is not eligible to vote. When someone registers to vote, it is the responsibility of the state to determine an individual’s eligibility prior to issuing a voter identification card.”

“If Floridians can not rely on the government to verify their eligibility,” the group asked, “who can they rely on?”

Such cases of harsh punishment for allegedly honest mistakes, or in some cases government mistakes, are not limited to Florida. Reason‘s Billy Binion wrote earlier this year about the case of Pamela Moses, a Tennessee woman who was sentenced to six years in prison for illegally registering to vote while on probation. Moses’ probation officer had incorrectly signed off on paperwork stating that she had finished her probation. And there’s the case of Crystal Mason, a Texas woman sentenced to five years in prison for voting while still on supervised release, a crime she says she was oblivious to.

The post Ron DeSantis Touted the Arrest of 20 People for Illegally Voting. Some Say They Were Told They Were Eligible. appeared first on Reason.com.

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Local Law Prevented an Alabama Town From Firing Two Cops. So They Dissolved the Police Department Instead.


Illustration, Lex Villena; Al.com

When officials in one Alabama town realized local law prevented them from firing two police officers, they dissolved their entire police department instead.

Last Thursday, the small town of Vincent—a hamlet outside Birmingham, Alabama, with a population of just under 2,000—decided to abolish its police department. The department, which employed three officers in total, was disbanded following a June incident that uncovered the exchange of racist text messages sent by at least one Vincent police officer.

In the messages, one officer, who remains unidentified by Vincent officials, asked an unidentified respondent “What do y’all call a pregnant slave?” to which the respondent replied with a string of question marks. “BOGO Buy one, get one free” texted the officer in response.

The messages, which were reported by Al.com on August 2, caused outrage throughout the small community. According to CNN, following the release of the messages, the City Council suspended the police chief and assistant police chief without pay, and the third officer resigned.

However, the City Council was unable to simply fire the officers. According to Vincent city law, police officers cannot be fired unless they receive two formal complaints and a verbal warning. With little other recourse, the Vincent City Council passed a resolution which temporarily dissolved the town’s small police department.

This incident isn’t the first time a small town has dissolved its police department for bad behavior. In particular, several small towns found to be engaging in illegal “speed trap” schemes have voted to disband their police departments.

In 2014, one Florida town, “only avoided the wrath of the state legislature by disbanding its police force, de-annexing the strip of highway, and accepting the resignation of every public official who held office when the [speed-trap] scandal broke,” wrote Reason‘s CJ Ciaramella. The particularly small town of Wilmer, Alabama, even disincorporated itself entirely after coming under fire for creating a speed trap.

Further, this story is the latest in a long string of incidents where cops have lost their jobs for bigoted text messages. While speech by government officials is generally protected by the First Amendment, it has a few important carve-outs. Speech by government employees is only protected when it is a matter of public concern, like an allegation of corruption, and when the public employee’s speech interests are more important than the employer’s ability to maintain order. 

“There’s no bright line here,” Popehat‘s Ken White notes. “But in general, an employee’s speech is most likely to be protected if it’s on the employee’s own time, on the employee’s own platform or a platform not run by the employer, involves policy issues rather than personal attacks on people in the government workplace, and the employer can’t show evidence of disruption of order or function.”

While it is unclear whether the officer’s text messages were sent while off-duty using their personal phones, Vincent officials regardless had interest in punishing the officers. In 2021, at least 85 criminal cases were thrown out after at least a dozen of Torrance, California, police officers were found to have exchanged racist, antisemitic, and homophobic text messages.

Even if public officials hadn’t been barred by a city statute from firing the two officers, it seems the First Amendment would have provided little protection for the officers’ racially charged jokes. In fact, their messages made them a legal liability.

The post Local Law Prevented an Alabama Town From Firing Two Cops. So They Dissolved the Police Department Instead. appeared first on Reason.com.

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