Oil Spikes After Saudi Prince Hints At Shift In OPEC+ Strategy

Oil Spikes After Saudi Prince Hints At Shift In OPEC+ Strategy

For almost two months we have been highlighting the dramatic (and growing) disconnect between physical and paper (futures) markets in the oil sector.

It appears that Saudi Arabian Oil Minister Prince Abdulaziz bin Salman has finally recognized this as an issue.

The implicit leader of OPEC said “extreme” volatility and lack of liquidity in the futures market are disconnecting prices from fundamentals and may force OPEC+ to act.

“The paper and physical markets have become increasingly more disconnected,” he said in response to written questions from Bloomberg News.

While futures prices are tumbling, in the physical realm, inventories of energy and metals continue to fall from already uncomfortably low levels as demand remains above supply in all cyclical commodities, except iron ore. Timespreads, the single most accurate measure of underlying fundamentals, trade at unprecedented levels of backwardation, irrespective of the price sell-off.

Prince Abdulaziz said futures prices don’t reflect the underlying fundamentals of supply and demand, which may require the group to tighten production when it meets next month to consider output targets.

“Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve,” he said.

These headlines sent the front-month WTI future rebounding from the ‘Iran deal imminent’ plunge…

As we noted previously, Goldman was all over this disconnect and has been buying every barrel of oil it can find…

“this latest commodity sell-off is completely delinked from physical fundamentals and driven by financial liquidation.”

In a response to questions from Bloomberg, Prince Abdulaziz responded in writing:

Will OPEC+ have to respond?

In OPEC+ we have experienced a much more challenging environment in the past and we have emerged stronger and more cohesive than ever. OPEC+ has the commitment, the flexibility, and the means within the existing mechanisms of the Declaration of Cooperation to deal with such challenges and provide guidance including cutting production at any time and in different forms as has been clearly and repeatedly demonstrated in 2020 and 2021.

Soon we will start working on a new agreement beyond 2022 which will build on our previous experiences, achievements, and successes. We are determined to make the new agreement more effective than before. Witnessing this recent harmful volatility disturb the basic functions of the market and undermine the stability of oil markets will only strengthen our resolve.

Who could have seen that coming?

But what about the fist-bump?

Tyler Durden
Mon, 08/22/2022 – 11:35

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Fauci Stepping Down In December

Fauci Stepping Down In December

Dr. Anthony Fauci announced on Monday that he will be stepping down from his positions as director of NIAID and Chief of the NIAID laboratory of immunoregulation.

The 81-year-old Fauci leave government service in December after more than 50 years.

He will also be stepping down from his position of chief medical adviser to President Biden.

“I am moving from my current positions, I am not retiring,” Fauci said in a statement.

In a Sunday evening interview, Fauci said he was “not retiring in the classic sense,” and would devote himself to a (undoubtedly profitable) circuit of traveling, writing and encouraging young people to enter government service.

“So long as I’m healthy, which I am, and I’m energetic, which I am, and I’m passionate, which I am, I want to do some things outside of the realm of the federal government,” he told the NY Times. He’s also got a memoir in the works.

While he has been working on a memoir, Dr. Fauci said he did not yet have a publisher. In an interview last year, he said he was precluded from contracting with a publisher while he was still employed by the government.

In a Monday statement, President Biden thanked Fauci, who he called a “dedicated public servant and a steady hand with wisdom and insight,” adding “Because of Dr. Fauci’s many contributions to public health, lives here in the United States and around the world have been saved.”

News of Fauci’s retirement comes as the US Covid response comes under harsh scrutiny from GOP lawmakers, who have vowed to ramp up probes if they regain the house and/or Senate in November’s Midterm elections.

Notably, as the head of the National Institute of Allergy and Infectious Diseases, he funded risky gain-of-function research at a Chinese lab aimed at making bat coronavirus transmissible to humans.

According to Sen. Rand Paul (R-KY), if the GOP wins and he’s once again elected, “I will be chairman of a committee in the Senate. We will use the subpoena power to bring forth all the records.”

“Right now they send us records. If we ask about their discussions, covering up where the virus came from, its origins in the lab, they white it all out,” Paul continued, referring to Democrats in power.

They redact all the information and send us a blank piece of paper and they won’t tell us about their conversations,” the Senator further urged, adding that if power transfers back to Republicans, “We’ll get to the root of everything.”

The Senator predicted that Fauci would ‘immediately’ retire if midterms benefit Republicans, which he said would be the “best thing right there for the country because he’s been so damaging.”

“All these blue state governors listen to him and think that it’s science to close a restaurant at 10 o’clock at night or to say that we have to have 25 percent of patrons,” The Senator explained, adding “There’s no evidence that any of the mitigation, any of the rules, and mandates changed the trajectory of the virus at all.”

Paul has also warned that thousands of Americans are dying from COVID every month because Fauci is obsessed with pushing vaccines in place of therapeutic treatments that are effective in treating the virus.

More recently, Fauci was booed by crowds while throwing out the first pitch at a Seattle Mariners game in the far-left city.

He was also criticized by doctors for saying COVID vaccines induce “only temporary” menstrual irregularities, and has of course come under fire for his involvement in funding Covid experiments.

Related:

Tyler Durden
Mon, 08/22/2022 – 11:06

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Nasdaq Tanks As “Gamma Unclench” Arrives – Here Are The Levels To Sell (Or Buy)

Nasdaq Tanks As “Gamma Unclench” Arrives – Here Are The Levels To Sell (Or Buy)

US equity markets are under pressure this morning with Nasdaq leading the charge lower (having been dumped at the Asia open, the European open, and the US open)…

The Dow, S&P, and Russell 2000 all reversed at their 200DMAs and look set to test the 100DMA (Nasdaq never made it back to its 200DMA)…

As Nomura’s Charlie McElligott notes, one major reason for this sudden volatility is the anticipated post Op-Ex “Gamma Unchlench” arrives and is allowing US Equities a larger trading distribution, with several key technical levels in play(or broken):

  • Most critically after Friday’s heavy expiration activity, we now see Dealers in “Negative Gamma vs Spot” location below 4219 flip-line for SPX / SPY consolidated options (Note: QQQ, IWM and HYG all now in “Negative Gamma vs Spot” territory as well)

  • ES1 through the 4215 “50% high / low” retrace

  • Through 4202 sees a break below the bottom of the mid-July bull channel

Nasdaq stands out as the most obvious pivot back into “negative gamma” territory, with the ensuing ‘delta purge’…

So what happens next?

As McElligott notes, from a “flows” perspective on the now two month Equities rally, we have focused on:

  • 1) Systematic strategy buying-to-cover from CTA Trend (+$78.6B of Global Equities buying off the June net exposure low / peak of aggregated “Short” positioning);

  • …as well as 2) Vol Control re-allocation to add back exposure (+$35B off the May exposure lows), which only then accelerated the destruction of downside hedges AND forced grabbing into upside…

  • …hence 3) massive Mechanical “Positive $Delta” flows from the Options space, which at one-point were > +$900B of implied $Delta off the June low

NOW, however, we see those Systematic and Mechanical “buy” flows either largely spent, or at risk of actually becoming supply a few weeks out, IF Vol was to reset higher here for a sustained period of time

1. CTA Trend now sits in “no man’s land.”

Well-below releveraging buy-triggers overhead in US Equities futures… but

Above de-leveraging / flip back “Short” sell-triggers…

For the S&P, 3989 is key for a big purge (with 4094 the next support to watch at 100DMA), but for the Nasdaq 100 the ‘level to sell’ is close at 12,587.

2. Vol Control is the local tie-breaker, and it’s nuanced as-ever

Vol Control in the NEAR-TERM (next two weeks) would require sustained 2.0% daily chg type days in-order to see a pivot back towards de-allocation (2% daily chg = -$4.7B over the next two weeks)—or, as an alternative, larger 1d absolute Vol shocks (e.g. a 3.0% SPX change today would see -$2.3B of VC de-allocation selling)

3. From a Vol mkt perspective, Spot lower / Vol higher and resumption of downside hedging demand

(Skew actually performed on Friday) will see NEGATIVE $Delta flows picking back-up.

For the Nomura strategist, the key for this nascent selloff to hold is going to be the willingness then of ACTIVE / DISCRETIONARY traders to again “lean into” the market and resume “Shorting” HERE AND NOW while the post Op-Ex “window for Vol expansion” is open, and / or take down “Nets” again ahead of a rough seasonal for Equities, coming after what’s been a vicious two month covering explosion across previously “grossed-UP” Shorts in “worst of” themes…

…so there is some scar tissue to sort out.

Tyler Durden
Mon, 08/22/2022 – 11:00

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Shares, Corporate Bonds Seen Decoupling After Rise

Shares, Corporate Bonds Seen Decoupling After Rise

By Sagarika Jaisinghani and Tasos Vossos, Bloomberg Markets Live commentators and reporters

Resilient earnings and bets of peaking inflation have helped stocks and corporate bonds rally alike over the past couple of months, but with recession fears still lurking, the two asset classes could soon start taking different paths.

European stocks have gained about 9% since a low in early July, while corporate bonds are up 4.4% since bottoming in mid-June.

With Federal Reserve officials indicating they’ll keep monetary policy tight until they’re sure that inflation won’t flare up again, even at the cost of some economic pain, debt from safer firms may benefit from a potential flight-to-safety. But for stocks, it’s a risk to earnings that many investors may be unwilling to bear.

“What we’ve seen at this juncture is a bear market rally and we don’t want to chase it,” says Wei Li, global chief investment strategist at BlackRock, speaking of the rebound in equities. “I don’t think we’re out of the woods with one month of inflation cooling. Bets of a dovish Fed pivot are premature and earnings don’t reflect the real risk of a US recession next year.”

The second-quarter earnings season did much to restore faith in the health of Europe Inc. as companies largely proved demand was robust enough for them to pass on higher costs to consumers. But economists forecast a slowdown in business activity from here on, while Citigroup strategist Beata Manthey says she expects regional earnings to fall 2% this year and 5% in 2023.

And while investors in Bank of America’s latest global fund manager survey have turned less pessimistic about global growth, sentiment is still bearish. European stock funds saw outflows of $2.2 billion in the week to Aug. 17 — a 27th straight week of redemptions, according to a BofA note that cited EPFR Global data.

Strategists now expect the Stoxx 600 to end the year at 447 points — about 2% above current levels, according to the average of 15 estimates in Bloomberg’s monthly survey. BofA’s European strategists remain negative on the region’s equities as well as cyclicals versus defensives.

In the bond world, the layers that make up a company’s borrowing costs look set to play into investors’ hands. Corporate yields comprise the rate paid on similar government debt and a premium to compensate for threats like a borrower going bust.

When the economy falters, these building blocks tend to move in opposite directions. While a recession will raise concerns about firms’ ability to repay their debt and widen the spread over safe bonds, the flight-to-quality in such a scenario will cushion the blow.

To be sure, the summer rebound has made entry points in corporate bonds somewhat less appealing. George Bory, head of fixed income strategy at Allspring Global Investments, has turned more cautious on bond valuations, but remains bullish on them overall. “The world was becoming more bond friendly place and that should continue in the second half of the year,” he says.

Tyler Durden
Mon, 08/22/2022 – 10:45

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Oil Slumps As EU’s Borrell Teases Iran Deal Wrap-Up “This Week”

Oil Slumps As EU’s Borrell Teases Iran Deal Wrap-Up “This Week”

On Sunday the White House confirmed President Joe Biden is in serious discussions with Western leaders which have been involved in Vienna negotiations, as they are said to be weighing how to respond Tehran’s position on the finalized nuclear deal draft. However Tehran on Monday criticized Washington’s “procrastination” – in a new foreign ministry statement. It’s been one week since Iran issued its official response to a “final text”. 

Strongly signaling a final decision is imminent, after Iran on Thursday suggested the ball is now in Washington’s court if it wants to get a restored JCPOA done, Biden spoke with heads of state representing signatories of the original deal, including French President Emmanuel Macron, UK Prime Minister Boris Johnson, German Chancellor Olaf Scholz (additional to these, Russia and China were also signatories). 

Josep Borrell Fontelles in Iran, via ECFR

The quartet of partner nations mulled the status of “ongoing negotiations” toward a deal and emphasized “the need to strengthen support for partners in the Middle East region,” according to the call summary, at a moment many fear regional allies like Israel and Saudi Arabia will see their concerns ignored and their security weakened as a result of restoring the JCPOA.

And the chief worry among Washington hawks continues to be that Biden is ready to compromise and throw close strategic allies under the bus. The administration is said to be busy seeking to calm Israel’s rising alarm.

Iran for its part, complained Monday that it’s still awaiting a response after issuing its approval for the text earlier submitted by EU foreign policy chief Josep Borell:

“What matters so far is procrastination from the American side on offering a response,” foreign ministry spokesman Nasser Kanani told reporters on Monday.

“We acted in time and we’ve always shown that we’ve acted responsibly” in the nuclear talks, he said.

Borrell told reporters Monday that, following a full week having passed since Iran gave its approval (with specific requests) to a finalized text, Tehran’s response was “reasonable”. He then said a final meeting could come within days

“A meeting was scheduled to take place in Vienna at the end of last week, but it was not possible. It is possible that it could take place this week.”

This is perhaps the catalyst for Monday morning’s sudden slump in oil prices….

Crude quickly fell not long after the start of US trading as all eyes continue to be on a possibly ‘imminent’ restored Iran nuclear deal. 

BRENT CRUDE FUTURES FALL OVER $4 TO SESSION LOW OF $92.55/BBL

Day-to-day unusually drastic price swings continue amid daily contradictory Iran headlines and back-and-forth with the West. Commenting on extreme price fluctuation, OilPrice.com observes: “It appears, then, that volatility is only a good thing up to a point, and this point seems to be a daily price range five times the usual one. According to the Reuters analysis, between February 24 and August 15 this year, Brent crude’s daily range averaged $5.64 per barrel. This compared with $1.99 per barrel last year.”

…and the waiting game continues.

Tyler Durden
Mon, 08/22/2022 – 10:24

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EV Names Dip In Early Trade As Chinese Vehicle Registration Data Falls

EV Names Dip In Early Trade As Chinese Vehicle Registration Data Falls

Despite countless new billions in government subsidies heading their way and paid for by the U.S. taxpayer, EV companies still find themselves falling in early trading on Monday.

Tesla CEO Elon Musk announced over the weekend that the company’s full self driving feature would rise in price to $15,000 in North America, prompting one short seller to remind Musk…

Despite the price hikes, Tesla continues to face an ongoing investigation related to its full-self driving and Autopilot by the NHTSA. It has also been called into question by several politicians, including Ralph Nader, who claimed it “malfunctions every eight minutes”. 

Also contributing to the pre-market dip lower in EV names was poor EV registration data coming out of China. China is widely considered to be one of the leaders in EV adoption, and so a slowdown in registrations there could telegraph saturation for the EV market globally. 

The China Automotive Technology and Research Center said that EV registrations were down 15.9% sequentially in July. Demonstrating the robust nature of China’s EV market competition, Tesla was 13th on the list, with 8,933 new registrations. 

Companies like Rivian, Nikola and Workhorse were all down between 2% and 3% in early trading, Bloomberg noted in a wrap up Monday morning.

Recall we wrote just days ago that high prices and range anxiety were still preventing some EV adoption in the U.S. According to a recent survey conducted by AAA, one quarter of Americans say that they would be likely to buy an electric vehicle (excluding hybrids) as their next car. That leaves three quarters who don’t see themselves plugging in instead of filling up just yet.

And the reasons for that hesitancy are mainly threefold. As the following chart shows, it all comes down to three factors: high prices, range anxiety and charging challenges.

Infographic: High Prices, Range Anxiety Holding Back EV Adoption | Statista

Tyler Durden
Mon, 08/22/2022 – 10:13

via ZeroHedge News https://ift.tt/mph5ySU Tyler Durden

Number of American Mass Murders Relatively Steady Since 2006


handgun and bullets

It’s become commonplace to talk of an “epidemic” of mass shootings. But new data suggests the “only epidemic is in fear levels,” as Northeastern University criminologist James Alan Fox puts it.

The data come from USA Today, Northeastern University, and the Associated Press, which tracked mass murders in which four or more people (excluding the killer) were killed in a 24-hour period. Fox oversees this database, which goes back to 2006. It includes not just mass shootings but other sorts of mass murder, such as arsons and vehicular homicides.

“The number of mass killings in 2022 is about average compared with previous years despite recent shootings that captured public attention,” USA Today reports. “The number of victims is somewhat higher than average but still below previous highs.”

“Cases in which someone shoots strangers in a public place usually get the most attention,” the newspaper adds. “But fatal public shootings are a small fraction of all mass killings.”

Needless to say, murders of any kind are tragic. But the database challenges the conventional wisdom about mass murders, showing that their frequency has held relatively steady since 2006.

In 2006, there were 38 mass killings—the second highest number in the database. The year with the highest number was 2019, with 45 incidents (including 8 public shootings, 25 non-public shootings, and 12 non-shooting incidents). In 2008, there were 36 mass killings and 35 in 2021. On the lower end, there were 22 mass killings in 2012; there were 25 each in 2013, 2014, and 2018; and there were 26 in 2007. There have been 19 incidents so far in 2022.

Public mass killings occurred on average six times per year, notes Fox. The most in any one year was 10, in 2018.

Since 2006, the number of victims killed in mass murders of any sort—public and non-public, shootings or otherwise—was highest in 2019 (229 victims), 2017 (226), and 2016 (196). Before this, the highest years were 2006 (183), 2009 (172), 2021 (172), and 2008 (171).

The years with the least victims were 2020 (114), 2014 (113), 2013 (116), 2010 (121), and 2018 (140).

So far in 2022, there have been 108 people killed in mass murders—42 in public mass shootings and 66 in non-public mass shootings.

“A guy who kills his wife and children and sometimes kills himself is the most common type of mass killing,” Fox told USA Today. “Mass killings take place far more often in private homes than in schools, markets or churches.”

From 2006 to now, the data show 349 mass killings in some sort of residence or private shelter and 155 in public places, including 50 in commercial, retail, or entertainment establishments, 32 in open spaces, 12 at schools or colleges, and seven in churches. Regardless of location, the killers were overwhelmingly men.

Mass killings “take place across the country in towns of all sizes,” the newspaper notes. “Homicides with fewer than four victims are more common in larger cities, but mass killings with higher death tolls often take place in smaller towns or rural settings.”


FREE MINDS

Female voter registrations surge following abortion ruling. New data from the political data firm TargetSmart suggests that in the wake of the Supreme Court’s ruling in Dobbs v. Jackson Women’s Health Organization, some states have been seeing a surge of women registering to vote. “This isn’t just a blue state phenomena. In fact, it is more pronounced in states where choice is more at risk, or has been eliminated by the decision,” TargetSmart CEO Tom Bonier pointed out on Twitter.

The largest gender gap in new voter registrations was seen in Kansas, where voters at the beginning of August rejected an anti-abortion ballot measure. “70% of Kansans who registered to vote after the Dobbs decision was released were women,” TargetSmart reported on August 3.

Double-digit gender gaps in new voter registrations are also seen in Idaho (18 percent), Wisconsin (17 percent), Louisiana (13 percent), Pennsylvania (12 percent), Ohio (11 percent), Missouri (10 percent), and Colorado (10 percent), per TargetSmart’s data. Voter registration gender gaps ranging from 5 to 7 percent were seen in North Carolina, Connecticut, New Mexico, Alabama, Maine, Georgia, Indiana, South Dakota, Illinois, and Florida.

Drilling down a bit in some states, TargetSmart found that registrations have been heavily concentrated among younger women and Democrats. For instance, in Pennsylvania women account for more than 56 percent of post-Dobbs voter registrations. (“For reference, among all registrants in PA, women outnumber men by only a 4 pt margin,” tweeted Bonier.) More than half of these new women voters were under age 25. And 62 percent registered as Democrats, compared to just 15 percent as Republicans. New male registrants in Pennsylvania also trended young and Democratic, but by smaller margins (41 percent under age 25, 43 percent Democrat, and 28 percent Republican).

Meanwhile, “in states like New York or Rhode Island, where the right to choose is protected by state law and reinforced by state officials, the motivation amongst women to register to vote is much lower and the numbers aren’t telling the same story,” suggests TargetSmart. The gender gap among new New York voters was less than 3 percent, and in Rhode Island it was nearly equal.


FREE MARKETS

The North Carolina Department of Transportation (NCDOT) is seizing a bunch of homes so the land can be used for a auto factory. The agency plans to use eminent domain powers to make for VinFast, a Vietnamese automobile company, and for a highway project to accommodate it. Altogether, NCDOT estimates it will need to take 27 homes and five businesses and move Merry Oaks Baptist Church,” reports The News & Observer:

“They’re going to mess up a good home place,” said Lena Stone, who stands to lose four houses—hers and three rental properties where NCDOT plans to widen Pea Ridge Road. Stone has lived there since 1973, and the property has long been a family gathering place, said her daughter, Rhonda Mitchell….

It often takes many years for NCDOT to plan big highway projects like this. But the timeline here is set by VinFast and the state’s desire to see it begin producing electric SUVs at the plant in 2024. Chatham County and the state offered the company $1.25 billion in tax and other incentives to locate here, including about $250 million for road and rail improvements in and around the site.


QUICK HITS

• Onlooker video shows police officers in Crawford County, Arkansas, beating up a man they pinned down outside a convenience store. Two of the deputies involved “have been suspended” pending the outcome of an investigation, the Crawford County Sheriff’s Office said.

• A partial hand recount of Kansas votes on an anti-abortion ballot measure confirms that the measure failed. “Nine of the state’s 105 counties recounted their votes at the request of Melissa Leavitt, who has pushed for tighter election laws,” reports the A.P. “After the recounts, ‘no’ votes lost 87 votes and ‘yes’ gained 6 votes.”

• A federal court has ruled against key parts of Florida’s “Stop WOKE Act.”

• Vietnam’s government has declared homosexuality “not a disease,” and Singapore is repealing a law that bans gay sex.

Hugo Chavez and socialism are being “erased from the Caracas skyline,” says Bloomberg. In their place: ads for makeup, phones, and jeans.

• A Florida sheriff’s deputy has resigned after bodycam video showed him telling a speeding car “pull the vehicle over or I’ll put you into the ground” and then pulling a gun on the driver of the car, who was a pregnant woman with kids in the backseat. “Rather than immediately pull over, [the woman] turned on her emergency lights and kept driving in order to find a well-lit area,” the New York Post reports.

• Teachers in Columbus, Ohio, are going on strike.

The post Number of American Mass Murders Relatively Steady Since 2006 appeared first on Reason.com.

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Short Circuit: A Roundup of Recent Federal Court Decisions

Please enjoy the latest edition of Short Circuit, a weekly feature written by a bunch of people at the Institute for Justice.

Friends, do you like tacos? What about late at night, perhaps after an adult beverage? If so, you should be just as hopping mad as we are about the city of Denver’s recent ban on food trucks in Lower Downtown. Though ostensibly enacted with the goal of reducing crime, a 2012 IJ study found that the presence of food trucks actually reduces crime by providing extra eyes on the street. Smells like protectionism for brick-and-mortar restaurants to us. While a letter from IJ convinced the city to partially repeal the ban, IJ won’t rest until the senseless ban is totally repealed. Click here to learn more. 

  • Pro tip from the D.C. Circuit: If you’re trying to intervene in a case on the grounds that an existing party doesn’t adequately represent your interests and the appellate court invites you to show up at oral argument to represent your own interests, you say yes. 
  • Can the government forbid employees of the Administrative Office of the United States Courts from engaging in off-hours partisan activity in order to preserve the judiciary’s reputation for impartiality? D.C. Circuit (over a dissent): The only way for Administrative Office employees’ activities to affect the judiciary’s reputation would be if the public knew the Administrative Office existed in the first place, which is . . . contestable. 
  • Maine officials: The dormant Commerce Clause doesn’t apply to marijuana because Congress has outlawed interstate commerce in marijuana. First Circuit (over a dissent): I don’t know if you guys have noticed, but there’s a pretty big interstate market in marijuana anyway, so the doctrine still applies. 
  • Second Circuit: For a job applicant to be entitled to an ADA-mandated accommodation on an employment exam, the applicant must show he’s qualified to do the job he’s applying for, not just that he’s qualified to take the exam. 
  • Bribe-danglers worldwide beware! As this Second Circuit opinion illustrates, if you, as a non-citizen based wholly outside of the U.S., orchestrate the bribing of foreign officials, also outside the U.S., the United States may nonetheless bring you to trial some 15 years later, after which only slightly more than half of your convictions will be thrown out on appeal. 
  • Pennsylvania woman shops for pet stairs from an online gift company. Unbeknownst to her, the company is allowing a third-party marketer to snoop on her shopping activity. Yikes! She says that’s illegal wiretapping. District Court: Give me a break, case dismissed. Third Circuit: Not so fast. The Pennsylvania statute may indeed be broad enough to reach this case. Remanded for more factfinding. 
  • Jersey City passes an ordinance encouraging short-term rentals, and investors take up the city’s invitation by buying properties to rent out short-term. But when the hotel industry gets upset and the mayor’s relationship with Airbnb sours, the city changes course and significantly restricts short-term rentals. The investors cry foul and say the about-face violates several constitutional provisions, including the Takings Clause. Third Circuit: Courts aren’t in the business of second-guessing zoning laws, so all your claims fail. Concurrence: Modern “regulatory-takings doctrine is a mess,” and rather than using a fuzzy multifactor test courts should just ask whether the government has “taken a property right and pressed it into public use.” 
  • Delaware and Hoboken, NJ sue oil companies, alleging they committed various state-law torts for their role in causing climate change. Oil companies: Whoa, these are claims with national and global ramifications, and they belong in federal court. Third Circuit: We agree with our sister circuits that, although climate-change suits are a big deal, these are still just state-law claims, so to state court they shall go. 
  • Trans woman housed in a Fairfax County, Va. prison alleges she was mistreated and denied proper hormone treatments. She sues, principally claiming the prison violated the Americans with Disabilities Act by failing to accommodate her disability arising from gender dysphoria. District Court: Gender dysphoria isn’t a disability under the ADA, which excludes “gender identity disorders not resulting from physical impairments.” Fourth Circuit: The contemporary medical understanding of gender dysphoria isn’t a “gender identity disorder,” especially because excluding gender dysphoria from the ADA would likely be unconstitutional discrimination against trans people. So the claim can go forward. Dissent: “My view here is not in any way a value judgment on . . . those with gender dysphoria,” but it is clearly a condition Congress meant to exclude from the ADA in 1990. 
  • Emmitsburg, Md. postal employee is fired and then brings discrimination claims against USPS. District Court: All claims dismissed and case closed. But wait! One claim is dismissed without prejudice, yet the court is silent about whether the plaintiff can amend the complaint. Fourth Circuit: Before we get to the merits, we need to take this en banc to decide whether this odd duck is a final judgment that can even be appealed. We unanimously reject our old case-by-case finality standard and adopt a bright-line rule that a dismissal of all claims is final unless the district court expressly grants leave to amend. Even so, a reminder to district courts and lawyers: you really should “clarify the finality of an order before” anyone “knock[s] on this Court’s door.” 
  • Supervising a 50-year-old school desegregation order, the Fifth Circuit concludes that the district court correctly found that the Saint Martin Parish, La. school board has done a pretty lousy job by just about any metric of remedying de jure segregation. But the district court nevertheless exceeded its discretion when it ordered the closure of a predominantly white elementary school as a remedy. 
  • In which the Fifth Circuit determines that Sealed Appellee was not a John Doe. Tough luck, Sealed Appellant. 
  • Last November, the Fifth Circuit denied qualified immunity in a case involving the unconstitutional arrest of a journalist for the “crime” of asking public officials questions about things that had not yet been made public. At the time, a forthcoming dissent was promised. At long last, it has arrived, and Judge Ho, concurring in his original panel opinion, is singularly unimpressed. (IJ filed an amicus brief in this case.) 
  • This week, courtesy of the Fifth Circuit, your editor learned the difference between a collision (an impact with a moving object) and an allision (an impact with a stationary object).  
  • Accomplished high-schooler in Cleveland, Miss. is on track to graduate second in her class. Salutatorian! But in the lead-up to her senior year, a federal judge enforces a 50-year-old desegregation consent decree and orders Cleveland’s two high schools to consolidate. Following the consolidation (and much back-and-forth about credits on transcript), the would-be salutatorian ends up ranked third in her class, not second. A due process violation? Fifth Circuit: No. Students lack a due process interest in their class rank. 
  • A Play in One Act 

Institute for Justice Employee 1: “Hey colleague, do you have time to summarize some cases for tomorrow’s Short Circuit?”  

IJ Employee 2: “Greetings friend. I’m on the road today, but I could do one or two in the morning.”  

IJ Employee 1: “Well, technically, this 104-page series of opinions from the en banc Fifth Circuit counts as ‘one case,’ so . . .” [chortles] 

IJ Employee 2: “Don’t be an energy vampire, Paul. But I’ll grant you this: Judge Elrod’s deep-dive dissent on whether the Fifth Amendment’s Due Process Clause has anything to do with personal jurisdiction? Looks like an interesting read.”  

(Ed.: Sam is just being a big baby, but he’s right about the Elrod dissent.) 

  • Friends, sometimes a super-cool decision comes down on a Friday after this humble newsletter has been sent off for proofreading. So it is with this super-cool decision from last Friday, in which the Sixth Circuit holds that a federal employee’s use of false testimony and forged documents to secure an indictment from a state grand jury does not fall into the “discretionary-function exception” to the Federal Tort Claims Act. We regret that friend of IJ @danielahorwitz was unjustly denied a week’s worth of forwarding this newsletter to friends and family. 
  • In which the Seventh Circuit reminds the owners of a Southern Illinois coal mine that uncaptured methane gas may be vacuum-siphoned off from adjoining land under the well-known doctrine of “I drink your milkshake.” 
  • Under an 1854 treaty, Indian lands within four Ojibwe Indian reservations in Wisconsin are immune from property taxes. But wait! Does the treaty still apply to lands which, though owned today by Ojibwe tribal members, were sold by past tribal owners to non-Indians before coming back into tribal ownership? Seventh Circuit: It surely does. 
  • Kansas City, Mo.’s affirmative action program for minority- and woman-owned businesses encourages their participation in city contracts and subcontracts. The City added a personal-net-worth limitation in 2018, limiting participation to those businesses whose owners’ net worth is $1.32 mil and below. Eighth Circuit: The program, as a whole, is probably constitutional, so the City needn’t provide separate evidence for the personal-net-worth limitation. 
  • When Arkansas uses the power of the state to kill people, it proceeds in several steps. First, it administers a sedative called midazolam. Then it checks to see if the person is conscious. If so, more sedative. Next, it paralyzes them with a drug called vecuronium bromide. Finally, it administers potassium chloride to stop the heart. Inmates scheduled to die: The sedative doesn’t suppress pain for a vast majority of people, meaning that remaining drugs the state uses to kill us will cause severe pain. Eighth Circuit: Scientists differ, so who are we to say whether the drugs violate the Eighth Amendment? Concurrence: The decision is correct under our precedent, but it’s an impossible bar. Prisoners must show a scientific consensus about the effect of drug dosages that will never ethically be tested on humans.  
  • Vermonter visiting California pulls up to a DUI checkpoint where he’s asked for his license. He declines and is arrested, despite his offer to take a breathalyzer. Ninth Circuit: The officers’ demand to see his license did not render the checkpoint unconstitutional.  
  • Ninth Circuit: Longtime green-card holder cannot be deported for dissuading his victims from reporting his crimes. Dissent: “My colleagues in the majority should be embarrassed. Perhaps not for their wrong decision today—to err is human, after all, even for those in robes. But they should be troubled by our court’s jaw-dropping, always-increasing, epic collection of immigration gaffes. The fact that they are not, but rather charge on heedlessly in this case, is itself perhaps a clue as to why the trainwreck continues.”  
  • Tenth Circuit: The plain-view exception is not a plain-feel exception. DEA agent conducted an illegal search when he felt around in a Greyhound passenger’s open backpack in an “exploratory manner.” The resulting “bundle” of meth should be suppressed, unless the district court finds on remand that defendant’s incriminating statements removed the taint of the illegal search. 
  • Can an arrestee (separate from a pre-trial detainee) bring an excessive force claim under the Fourteenth Amendment? Tenth Circuit: Sorry, he can’t. The Fourteenth Amendment just incorporated the Fourth Amendment. He needed to expressly bring his claim under the Fourth. Dissent: His complaint “needed only to plead factual allegations that would create a constitutional violation,” which he did. 
  • The Attorney General may allow otherwise-removable aliens to stay in the county if they’ve been in the U.S. for at least 10 years. Government: Right now, only two things can stop the clock on accruing those 10 years. Please add a third. Tenth Circuit: No. The statute is clear, and we won’t pretend it’s not. 
  • Oglethorpe County, Ga. man is taken hostage and forced, at gunpoint, to drive his loaded logging truck into a sea of seven officers. The officers opened fire, some with rifles, knowing the man was a hostage. The man sued. Eleventh Circuit: The officers reasonably believed they were at risk, and there’s no clearly established law saying officers can never shoot an innocent person. Qualified immunity granted. 
  • To be clear, in the Eleventh Circuit, murder and attempted murder are crimes of violence. 
  • While the government cannot keep you from divulging information learned before testifying at a grand jury, it can, without violating the Free Speech Clause, prohibit you from disclosing information you learned by virtue of being a grand jury witness. Or so says the Eleventh Circuit.  
  • And in en banc news, the Fifth Circuit will not reconsider its earlier ruling granting a preliminary injunction against a United Airlines policy that required all employees to either be vaccinated against COVID-19 or placed on indefinite unpaid leave. Judge Jerry Smith dissents from denial, raising concerns that the original panel issued its original opinion unpublished specifically to reduce the chances of an en banc grant. 

When Chasidy Decker found herself priced out of the roaring traditional real estate market in Boise, Idaho, she found a way to continue living in the area she calls home: She bought a beautiful tiny home she arranged to park on Meridian homeowner Robert Calacal’s private property for modest rent. But something unexpected got in the way of what should have been a win for everybody: the government. Meridian code enforcement threatened Chasidy and Robert with fines and jail time if she didn’t leave her only home. This week, Chasidy and Robert, represented by IJ, are challenging Meridian’s irrational and arbitrary ban on tiny homes on wheels for violating the Idaho Constitution. Click here to learn more. 

The post Short Circuit: A Roundup of Recent Federal Court Decisions appeared first on Reason.com.

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Surging Dollar And The Jackson Jitters

Surging Dollar And The Jackson Jitters

By Jane Foley, head of FX strategy at Rabobank

When the July US CPI inflation report posted a softer than expected reading in August 10, the market took that as a signal that US inflation may have peaked and that it may have over-estimated the number of Fed rate hikes that was priced in.  This refreshed enthusiasm for US stocks and simultaneously knocked the USD lower.  Last week, sentiment reversed.  Stock market indices struggled, and the Bloomberg dollar index rose to a 1 month high, having climbed over 2% on the week.  

The better tone in the USD was driven by several hawkish comments from Fed officials. This signalled that The Fed’s Jackson Hole Symposium at the end of this week may underpin a similar message.

Another driver of the dollar in recent sessions has been safe haven flow.  This was sparked at the beginning of last week by a round of softer than expected Chinese July economic data. By Friday the CNY had slumped to its weakest levels in nearly two years vs. the USD encouraged by an unexpected rate cut by the PBoC for one-year medium-term lending facility loans to some financial institutions. CNY weakness vs. the USD continued this morning on the back of further support from Chinese policymakers. The PBoC has lowered the five-year loan prime rate by 15 bps to 4.30% and its one-year loan rate by 5 bps to 3.65%. This should bring down the cost of mortgages and has supported the shares of several Chinese property developers this morning. That said, falling house prices has impacted demand for loans.

Additionally, the market is cognisant that further lockdowns are possible in China which would undermine the outlook for broad economic growth.  Weakness in the second largest economy is clearly not good news for global growth.  Also, since China is the largest consumer of commodities in the world, news that its economy slowed in July was a worrying signal for producers of raw materials such as iron ore, copper, base metals and lumber, many of whom are emerging markets. These economies have already been strained this year by factors such as higher food and energy prices and by USD strength.

Given that this backdrop is set against mounting concerns about recessionary risks for the Eurozone, it is little wonder that the appeal of the safe haven USD is strong.  European natural gas prices have extended gains again today on concerns about flows through Nord Stream 1.  This morning, most Asian equity indices, except for China’s CSI 300, are in the red.  European and US stock market futures are also trading lower. 

Week ahead

While the Jackson hole symposium is the dominant market event this week, there are plenty of other factors that will also attract attention.  It is already clear that the Eurozone economy could teeter into recession this winter dependent on whether energy stockpiles can last through the coldest months.  Tomorrow’s round of August PMI data will provide a snapshot as to how the Eurozone economy is has been holding up recently.  Germany’s July manufacturing PMI reading registered a 2-year low, signalling the acuteness of the headwinds already being felt.  The release of Germany’s IFO survey later in the week is also expected to reflect further deterioration in business sentiment.  Despite this, the ECB is expected to retain a hawkish tone in the face of strong price pressures.  Although ECB President Lagarde will not be travelling to Jackson Hole this week, several members of the Governing Council will reportedly be there.  Their remarks are likely to set the tone for the ECB’s forthcoming September 8 policy meeting.

Fed Chair Powell’s speech on Friday is expected to be the most watched of the symposium.  A string of hawkish comments from various Fed officials last week has strengthened the perception that the FOMC, like almost all other G10 central bankers, is adamant that inflation must be forced back in its cage irrespective of the risks to growth.  While the strength of the USD last week suggests that this is a popular market view, there are whispers that Powell will be more cognisant of the impact of USD strength on other economies and may therefore chose not to project an overly hawkish view.  There will be a few interesting US data releases this week, which may colour the tone that Powell takes this week.  These include August US PMI, July new homes sales, durable goods orders, a Q2 GDP revision and some inflation data.  The Bloomberg market consensus sees little scope for an alteration from the shockingly soft Q2 GDP plunge of -0.9% q/q saar.  The Fed’s favoured measure of inflation, the PCE deflator, is expected to show some moderation in price pressures.  The market median stands at 6.4% y/y, down from a June figure of 6.8% y/y.

A notable event for the UK on Friday will be the announcement from Ofgem regarding how much average household energy bills are set to rise in October.  In recent weeks, estimates have only been headed one way and are currently pointing to annual bills rising to around GBP3,600, with more increases to follow next year.  Given the stark reality that energy bills will simply be unaffordable for some households this winter, Liz Truss, the favoured contender for the Tory party leadership, is now indicating that additional support could be at hand.  Earlier this month she had announced that she did not believe in “giving out handouts”.  On the back of the surge in the cost of living in the UK, workers at the port of Felixstowe, the biggest container facility in the country, have commenced an eight day walk out over pay.  The impact is likely to enhance supply side issues for businesses around the country.  Additionally, UK barristers are voting on proposals for an all-out strike next month as part of an ongoing dispute with government over pay and cuts to legal aid.  Having broken below the GBP/USD1.20 level last week, cable is holding well clear of that level this morning. 

Wednesday will mark 6 months of war between Russia and the Ukraine.  The FT is reporting this morning that Moscow sees no possibility of a diplomatic solution to the end of the conflict, according to Russia’s permanent representative to the UN in Geneva.  These comments are a blow to hopes that the recent agreement to allow grain exports from Ukraine’s Black Sea ports could have formed the basis for a broader solution. 

Tyler Durden
Mon, 08/22/2022 – 09:51

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US NatGas Hits 14-Year-High, EU Benchmarks Explode Higher

US NatGas Hits 14-Year-High, EU Benchmarks Explode Higher

US natural gas futures surged to a new 14-year high this morning as European prices spiked on Russia’s move to shut a major pipeline (for “planned maintenance”), sparking increased fears that demand for American exports of the heating and power-plant fuel will soar when Freeport’s LNG Terminal comes back online in October.

Additionally, the next few months of the US NatGas curve are in contango with November 2022, December 2022, and January 2023 all traded above $10 this morning…

In Europe, benchmark gas futures rose as much as 20% to new record highs…

…driving electricity prices to fresh records, topping EUR700/mWh for the first time ever…

As Bloomberg reports, the key Nord Stream pipeline will stop for three days of maintenance on Aug. 31, again raising concerns that the conduit won’t restart as planned after the work.

“Whether the reasoning is true or not, the outcome drives a European gas market that tightens further, and one that is left reliant on demand curtailments to find itself in balance,” said Biraj Borkhataria, an analyst at RBC Capital Markets.

“The market may disregard Gazprom’s comments and start to consider whether the pipeline may not return to service, or at the very least may be delayed for any given reason.”

European authorities have repeatedly warned of the possibility of a total shutdown of Russia supplies as Moscow retaliates for sanctions imposed because of its invasion of Ukraine.

“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.”

Finally, some context for what all this means.

EU NatGas is trading at an oil equivalent price of $500 per barrel and while EU NatGas is at 14 year highs (around $167 per barrel equiv), Europe’s cost is triple that!!

Both of which would suggest a very significant pressure for producers to transition from gas to crude as source. For now, oil prices are down on more Iran ‘deal’ headlines.

Tyler Durden
Mon, 08/22/2022 – 09:37

via ZeroHedge News https://ift.tt/UfYL1xE Tyler Durden