US Weighs Expanding Fed’s Emergency Liquidity Program To Stabilize First Republic, Other Regional Banks

US Weighs Expanding Fed’s Emergency Liquidity Program To Stabilize First Republic, Other Regional Banks

One day after a lengthy meeting on the growing bank crisis by the Financial Stability Oversight Council (chaired by Janet Yellen who five years ago vowed there would be “no financial crises in her lifetime“) on the last day of a week which started with the collapse of Credit Suisse and culminated with US regional banks nursing historic losses amid speculation that First Republic Bank could keel over any moment and drag down countless other names with it, even though the FSOC assured Americans that “while some institutions have come under stress, the U.S. banking system remains sound and resilient”, Bloomberg reports that in their attempt to rescue the most trouble of regionals, authorities are considering expanding the recently introduced emergency lending facility for banks – the BTFP – in order to give First Republic Bank more time to shore up its balance sheet.

Or they may not: after all this has been a crisis has been marked by at times puzzling second-guessing, miscommunication and lack of conviction on the part of regulators, whose actions not only precipitated the contagion from the collapse of Silicon Valley Bank when they blocked potential buyers from acquiring the bank and avoiding a complete wipeout of shareholders, but where Janet Yellen has actively sought to destabilize the regional banks by explicitly refuting what Fed chair Powell was stating, the most vivid example being last Wednesday’s market crunch when stocks stabilized after the dovish FOMC only to puke after Yellen inexplicably said that US regulators were not even contemplating uniform deposit insurance.

And sure enough, the BBG report adds that “officials have yet to decide on what support they could provide First Republic, if any, and an expansion of the Federal Reserve’s offering is one of several options being weighed at this early stage.” Meanwhile, regulators continue to grapple with two other failed lenders — Silicon Valley Bank and Signature Bank — that require more immediate attention… attention they wouldn’t need if regulators had intervened more competently in the beginning and not waited until almost a trillion in deposits had been pulled from small banks as confidence cratered.

Bizarrely, even without of a step, watchdogs see First Republic as stable enough to operate without any immediate intervention as the company and its advisers try to work out a deal to shore up its balance sheet, the people said, asking not to be named discussing confidential talks.

Officials have yet to decide on what support they could provide First Republic, if any, and an expansion of the Federal Reserve’s offering is one of several options being weighed at this early stage. Regulators continue to grapple with two other failed lenders — Silicon Valley Bank and Signature Bank — that require more immediate attention.

Even short of expanding the BTFP, regulators reportedly “see First Republic as stable enough to operate without any immediate intervention as the company and its advisers try to work out a deal to shore up its balance sheet”; maybe those regulators should also see the stock price of FRC which has lost more than 90% of its value, and which is far less confident about the bank’s ability to evade the same forces that recently caused a trio of US banks to collapse. But while those banks toppled when rapid customer withdrawals forced them to lock in losses on depreciated assets, First Republic has remained open and independent.

And while the BBG reporting suggests that regulators are once again indecisive at best, and may either help the bank… or not, the only actionable news here is that US officials “have concluded the bank’s deposits are stabilizing and that it isn’t susceptible to the kind of sudden, severe run that prompted regulators to seize Silicon Valley Bank within just a few days, the people said.” This confirms what we first reported on Friday in “Finally Some Good News On The Bank Crisis.”

One way First Republic is different from other banks is that it managed to obtain enough cash to meet client needs while it explores solutions, courtesy of $30 billion in cash deposited by the nation’s largest banks this month… which of course is merely cash that was recycled after it was pulled from banks such as First Republic in the first place.

Bloomberg also notes that a potential adjustment to the Fed’s emergency lending program is among options authorities have weighed in recent days. Of course, such an expansion of the Fed’s liquidity offerings would merely be another incremental step to institutionalizing moral hazard as it would apply to all eligible users, in keeping with banking law that says remedies must be broadly based, rather than aimed at helping a particular bank. But the change could be made in a way to ensure that First Republic benefits.

Tyler Durden
Sat, 03/25/2023 – 18:00

via ZeroHedge News Tyler Durden

Zoom Workshopping Large Libel Models? Liability for AI Outputs

I have a very rough draft of this article; I’d love to hear comments on it, of course, but I’d also like to workshop it by Zoom, in case some people are interested. So if you want to set this up for some law people, or computer science people (academics, students, practitioners, or a mix), or others who can give useful feedback on it, please just e-mail me at volokh at

I’d like to get it out the door by mid-May, so sooner is better, if at all possible. I’ll also post some more excerpts from it here next week.

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Supreme Court Should Take and Reverse Fifth Circuit Decision that Creates a Catch-22 for Takings Claims Against State Government

Fifth Amendment

In its important decision in Knick v. Township of Scott (2019), the the Supreme Court reversed Williamson County Regional Planning Commission v. Hamilton Bank, a 1985 decision that made it almost impossible to bring takings cases against state and local governments in federal courts. Under Williamson County, a property owner who claimed the government has taken his property and therefore owed “just compensation” under the Fifth Amendment, could not file a case in federal court until he or she first secured a “final decision” from the relevant state regulatory agency and “exhausted” all possible state court remedies in state court. At that point, it was still usually impossible to bring a federal claim, because procedural rules preclude federal courts from reviewing most final decisions by state courts. In a forceful opinion for the Court, Chief Justice John Roberts denounced this “Catch-22” and emphasized that “[a] property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it.” The owner does not have to first go to state court.

Access to federal court is crucial to protecting constitutional rights against violation by state and local governments. In some situations, state courts will not adequately protect those rights, and may even be part of the same political coalition as the state or local officials who violated those rights in the first place (a problem particularly likely to arise in the many states where judges are elected).

Unfortunately, a recent decision by the US Court of Appeals for the Fifth Circuit (which covers the states of Texas, Louisiana, and Mississippi) goes against the principles outlined in Knick and threatens to create a new Catch-22 keeping takings claims out of federal court.

In Devillier v. Texas, decided in November, a Fifth Circuit panel ruled that federal courts have no jurisdiction to hear takings claims against state governments because the Fifth Amendment doesn’t create such jurisdiction, and there is no federal statute establishing it either. Here is the entirety of the opinion (minus footnotes):

The State of Texas appeals the district court’s decision that Plaintiffs’ federal Taking Clause claims against the State may proceed in federal court. Because we hold that the Fifth Amendment Takings Clause as applied to the [S]tates through the Fourteenth Amendment does not provide a right of action for takings claims against a [S]tate, we VACATE the district court’s decision and REMAND for further proceedings. The Supreme Court of Texas recognizes takings claims under the federal and state constitutions, with differing remedies and constraints turning on the character and nature of the taking; nothing in this description of Texas law is intended to replace its role as the sole determinant of Texas state law. As such, this Court lacks jurisdiction to review these claims.

[the text above is slightly modified from the court’s original decision, as explained here (pg. 25)].

What the court says is simply false. The Fifth Amendment does indeed create a “direct cause of action” against state governments, no less than other provisions of the Bill of Rights do. Nothing in the text or original meaning of the Constitution suggests otherwise. In the footnotes, the panel cites Azul–Pacifico, Inc. v. City of Los Angeles, a 1992 Ninth Circuit reaching a similar conclusion. But Azul-Pacifico, a very short opinion that offers almost no analysis supporting its position, was decided prior to Knick, at a time when Williamson County was still in force and it was therefore permissible for courts to disfavor takings claims relative to other constitutional rights claims. Knick decisively rejected such theories, and the Fifth Circuit erred egregiously in failing even to cite Knick in its opinion.

Even worse, the Fifth Circuit ruling creates precisely the kind of Catch-22 that Knick forbids. Indeed, ir may be even worse! This case ended up in federal court in the first place, because—after the plaintiffs initially filed in state court—the state of Texas removed the case to federal court under 28 U.S. Code Section 1441, which allows defendants to remove to federal court “any civil action brought in a State court of which the district courts of the United States have original jurisdiction.”

Under the approach adopted here by the Fifth Circuit, takings claims against state governments cannot be brought in federal court. And if they are instead brought in state court, the defendant state can remove them to federal court and then force their dismissal! As Judge Andrew Oldham puts it in his dissent from the Fifth Circuit’s March 23 denial of the plaintiffs’ petition for an en banc rehearing (which, if granted, would have had the entire Fifth Circuit reconsider the panel decision), “[t]he panel decision renders federal takings claims non-cognizable in state or federal court.”

This is actually even worse than the Williamson County regime, under which takings claims could at least be litigated in state court (though some lower courts did permit the kinds of removal shenanigans the Fifth Circuit blessed here). The federal district court ruling that the Fifth Circuit reversed effectively highlighted this dangerous implication of ruling in favor of the state, and specifically cited Knick, as well:

In considering the State’s argument, it is important to think for a moment about the dramatic implications of such a rule. Under the State’s view, it can take property from a private citizen without paying just compensation and the private citizen would be left without a remedy. Take an example. Person A owns a 20-acre vacant parcel. While Person A is on a five-year trip around the world, the State commandeers the property, constructs a state office building on the property, and utilizes the building on the property—all without the permission of the property owner. When Person A returns home, the State tears down the building and returns the property to its original vacant state. This is a classic taking for which Person A is clearly entitled to be compensated. See Knick v. Township of Scott, 139 S.Ct. 2162, 2167 (2019) (“A property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it.”)…. But not so fast. Amazingly, the State maintains that Person A would have no federal constitutional remedy against the State because a Fifth Amendment takings claim can never be brought against a State under [42 USC] § 1983. This thinking eviscerates hundreds of years of Constitutional law in one fell swoop, and flies in the face of commonsense. It is pretzel logic.

There is not, as the State suggests, some sort of “state exception” that excludes state governments from the reach of the Fifth Amendment’s Takings Clause. The complete opposite is true. “Historically, the United States Supreme Court has consistently applied the Takings Clause to the states, and in so doing recognized, at least tacitly, the right of a citizen to sue the state under the Takings Clause for just compensation.” Manning v. Mining & Minerals Div. of the Energy, Minerals & Nat. Res. Dep’t, 144 P.3d 87, 90 (N.M. 2006) (citing Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 306-09 (2002); Palazzolo v. Rhode Island, 533 U.S. 606, 614-15 (2001); Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1027-30 (1992)).

The plaintiffs have petitioned the Supreme Court to take the case. The Court should do exactly that. The justices need not even do much work, if they don’t want to. They can just summarily reverse the Fifth Circuit, and endorse, by reference, the reasoning of the district court (technically, a magistrate judge’s recommendation, which the district judge then adopted). If the Supreme Court lets this egregious decision stand, three state governments ruling over a total of some 36 million people, will be free to seize private property and then refuse to pay compensation, without fear of having their actions challenged in either state or federal court.

Two of the judges on the panel, Higginbotham and Higginson, filed concurring opinions to the Fifth Circuit’s denial of rehearing en banc, in which they defend the panel decision in much more detail than the ruling itself did. Judge Higginbotham argues that the reasoning of Knick only applies to cases brought under 42 U.S.C. Section 1983, which applies to  cases brought against “persons” who deprive the plaintiffs of their constitutional rights  (previous precedent holds, wrongly in my view, that local governments qualify as “persons” under Section 1983, but states do not). But Knick clearly makes the more general point that takings claims deserve access to federal court on par with other constitutional rights (“A property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it”) and bars the creation of “Catch-22” rules that block such access. A Catch-22 rule that blocks access to both state and federal courts, as the Fifth Circuit decision does, is even more egregious, and even more obviously at odds with Knick.

Judge Higginbotham also advances various arguments to the effect that it is desirable to confine most takings cases to state courts, because of the latter’s special expertise in property law issues. These types of arguments were rejected by the Supreme Court in Knick, and for good reason. I criticize them in some detail in my article on Knick (also available here).

Judge Higginson argues that the special circumstances of the incorporation of the Takings Clause against state governments justify the kind of double standard created by the panel ruling. He argues that, even if the Takings Clause, generally, was incorporated against state governments, the right to a damages remedy for “compensation” was not, and therefore can only exist if Congress enacts a specific statute requiring it. But this makes no sense. The right to “just compensation” is right there in the Takings Clause, and there is zero evidence that the Fourteenth Amendment somehow incorporates the rest of the Fifth Amendment against the states, but excluded this part.

Judge Oldham’s dissent offers additional (mostly well-taken) criticisms of Judge Higginbotham’s and Judge Higginson’s opinions. He also outlines various procedural flaws of the original panel opinion. Among other things, the latter was surely wrong to dispense with so an important issue in such a cursory way.

The Oldham dissent does have a few flaws of its own. For example, Judge Oldham endorses the common, but fallacious, view that the Supreme Court incorporated the Takings Clause against the states in Chicago, Burlington & Quincy Railroad Company v. Chicago (1897). For reasons discussed in Chapter 2 of my book The Grasping Hand, this isn’t true. In reality, this was just one of a number of late-19th century cases where the Supreme Court allowed property owners to bring takings cases against states and localities under the Due Process Clause of the Fourteenth Amendment.

Regardless, Judge Oldham and the district court are surely right about the bottom line, and the Supreme Court would do well to adopt the main elements of their reasoning.

NOTE: The plaintiffs in this case are now represented by the Institute for Justice, a public interest law firm with which I have longstanding ties, and for which I have written pro-bono amicus briefs in other property rights cases. But I do not have any involvement in this case. Back in 2001-2002, I clerked for Judge Jerry E. Smith, who is one of four Fifth Circuit judges who joined Judge Oldham’s dissent from the denial of rehearing en banc. The litigation of this case began long after my clerkship ended.

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My Comment on the OMB’s Proposal to Turn “Hispanic” into a Race

The federal Office of Management and Budget has requested comments on several proposals to change the official federal racial and ethnic classifications. One proposal is to merge the ethnic question (are you Hispanic/Latino or not?) with the racial one (are you black/African American, white, Asian American, or Native Hawaiian/Pacific Islander?), so individiuals would now be asked whether they are Hispanic, black, whites, etc. in one question. The underlying problem is that many Americans check the Hispanic box, but then find that as “mestizos” (people of mixed European/Indigenous heritage) there is no appropriate race box for them to check.

So here’s what I wrote:

In this comment, I argue that the race and ethnicity classifications should not be combined into a single question. There is only one “ethnic” classification recognized by OMB, and that is “Hispanic/Latino.” Hispanic/Latino is much too diverse to be considered a true ethnicity to begin with, and, as a classification that includes people of any combination of Indigenous, European, African, and Asian origin, with classification members whose appearances reflect the broad range of human appearances, it’s absurd to treat it as akin to a race by placing it in the same category as “white,” “black,” etc.

Rather, to the address the problems of the inappropriate “race” choices for Latinos, which creates confusion among those of partial or full Indigenous origin, the government should abolish the Hispanic/Latino ethnic classification, and instead add a racial “Indigenous Latino/Mestizo” classification. White Hispanics would check the white box. Black Hispanics would check the black box. And Hispanics of Indigenous origin would check the Indigenous Latino/Mestizo box. People of mixed background could check whichever combination of boxes applied to their background.

In my book, Classified: The Untold Story of Racial Classification in America (Bombardier Press 2022), chapters 1 and 2 tell the story of how “Hispanic/Latino” became an official American minority classification. In brief, identification for federal statistical purposes, which started in the 1950s for federal contract compliance, was originally not self-identified, but instead relied on employers and others to identify members of minority groups by sight. Many Puerto Rican and Mexican Americans have dark complexions, revealing full or partial non-European ancestry. As a result, these individuals were both subject to racial discrimination, which meant that they were seen as needing federal protection, but also they could be identified as “nonwhite” by those in charge of classifying them.

Over the next two decades, various political forces, including Richard Nixon’s White House and certain activist groups, thought it useful to create an umbrella designation for all American with origins in Spanish-speaking countries. At the same time, in the early 1970s classification began a dramatic shift to self-identification.

Suddenly, millions of people who had always been considered, and considered themselves, to be white based on full or dominant European heritage, were now deemed to be members of a “Hispanic” minority. But recognizing the absurdity of considering the multi-racial Hispanic classification to be a separate race, Statistical Directive 15 instead dictated that “Hispanic” was an ethnic classification, the only official ethnic classification the federal government recognizes.

[Comment then continues with material on the history of the Hispanic classification from my book Classified, discussing the arbitrariness of the classification….]

That said, some Hispanics face discrimination based on being of the perception that they are members of a nonwhite race, because they have a substantial percentage of Asian, African, or (most often) Indigenous heritage. Hispanics who are of full or partial Asian or African descent currently can check off the “Hispanic” box, and then Asian or African. However, many Hispanics, likely including the vast majority of those who check off the other “some other race” box on forms when available, are of mixed European and Indigenous origin (known in much of Latin America as “Mestizos”), or fully of Indigenous origin.

Thanks to strong opposition from American Indian groups, the Directive 15 definition of American Indian excludes Indigenous Americans who do not descend from North American (excluding Mexico) tribes.

The solution to that problem is not to treat “Hispanicness” as a race, or the equivalent of a race. There is no logical reason why a self-identified white person of European descent from Argentina or Spain should be in a different “racial” classification than a white person from Greece, Italy, or France.

Rather, to give Hispanics an opportunity to self-identify by their racial background, the Hispanic/Latino category should be abolished entirely. White Hispanics would check the white box. Black Hispanics would check the black box. And Hispanics of Indigenous origin would check the box for a new category called something like Indigenous Latino/Mestizo. People of mixed background could check whichever combination of boxes applied to their background.

Like the barrier to including Indigenous-origin Latinos in the Native American classification, the barrier to creating an Indigenous Latino/Mestizo classification is primarily political; Latino groups and activists oppose such a classification because it would substantially reduce their constituent numbers.

If OMB chooses not to replace the Hispanic/Latino ethnic classification with a narrower Indigenous Latino racial classification, it should modify the current classification so that it is more akin to a true ethnic classification. Currently, the classification requires only that a person be of “Spanish origin or culture.” Instead, the classification should require “Spanish origin with significant ties to Spanish or Latino culture.” Currently, everyone from Sephardic Jews whose ancestors left Spain around 1492 to people with one distant Mexican American ancestor, with the rest European, may qualify as Hispanic, regardless of their lack of ties to Hispanic or Latino culture. An individual with distant Spanish-speaking ancestry and no ties to the Hispanic and Latino culture can hardly be said to belong to the same “ethnic group” as a recent immigrant from Guatemala, and including them in the same group drastically reduces any usefulness the classification may have.

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The Disinformation-Industrial Complex Vs Domestic Terror

The Disinformation-Industrial Complex Vs Domestic Terror

Authored by Ben Weingarten via,

Combating disinformation has been elevated to a national security imperative under the Biden administration, as codified in its first-of-its-kind National Strategy for Countering Domestic Terrorism, published in June 2021.  

That document calls for confronting long-term contributors to domestic terrorism.

In connection therewith, it cites as a key priority “addressing the extreme polarization, fueled by a crisis of disinformation and misinformation often channeled through social media platforms, which can tear Americans apart and lead some to violence.” 

Media literacy specifically is seen as integral to this effort. The strategy adds that: “the Department of Homeland Security and others are either currently funding and implementing or planning evidence–based digital programming, including enhancing media literacy and critical thinking skills, as a mechanism for strengthening user resilience to disinformation and misinformation online for domestic audiences.” 

Previously, the Senate Intelligence Committee suggested, in its report on “Russian Active Measures Campaigns and Interference in the 2016 Election” that a “public initiative—propelled by Federal funding but led in large part by state and local education institutions—focused on building media literacy from an early age would help build long-term resilience to foreign manipulation of our democracy.” 

In June 2022, Democrat Senator Amy Klobuchar introduced the Digital Citizenship and Media Literacy Act, which – citing the Senate Intelligence Committee’s report – would fund a media literacy grant program for state and local education agencies, among other entities. 

NAMLE and Media Literacy Now, both recipients of State Department largesse, endorsed the bill. 

Acknowledging explicitly the link between this federal counter-disinformation push, and the media literacy education push, Media Literacy Now wrote in its latest annual report that … 

the federal government is paying greater attention to the national security consequences of media illiteracy.

The Department of Homeland Security is offering grants to organizations to improve media literacy education in communities across the country. Meanwhile, the Department of Defense is incorporating media literacy into standard troop training, and the State Department is funding media literacy efforts abroad.

These trends are important for advocates to be aware of as potential sources of funding as well as for supporting arguments around integrating media literacy into K-12 classrooms. 

When presented with notable examples of narratives corporate media promoted around Trump-Russia collusion, and COVID-19, to justify this counter-disinformation campaign, Media Literacy Now president Erin McNeill said: “These examples are disappointing.”

The antidote, in her view is, “media literacy education because it helps people not only recognize the bias in their news sources and seek out other sources, but also to demand and support better-quality journalism.” (Emphasis McNeill’s)

Tyler Durden
Sat, 03/25/2023 – 17:30

via ZeroHedge News Tyler Durden

“I’m A Woman”: Left Wing Host Ana Kasparian Triggers Woke Mob Over “Trans-Exclusionary” Language

“I’m A Woman”: Left Wing Host Ana Kasparian Triggers Woke Mob Over “Trans-Exclusionary” Language

Ana Kasparian, of the left wing hosts of The Young Turks, was put on blast this week on Twitter for “using trans-exclusionary language” when she Tweeted out the obvious: that she was a woman.

“I’m a woman. Please don’t ever refer to me as a person with a uterus, birthing person, or person who menstruates. How do people not realize how degrading this is?” she wrote on Twitter on Tuesday of last week.

“You can support the transgender community without doing this shit,” Kasparian added. “I’m sure a lot of women don’t want to be minimized to a bodily function or body part,” she said in a later Tweet.

As was predicted by many in the responses, Kasparian was roasted by many “trans-allies”.

“Those words are meant for AFAB [assigned female at birth] people as a category, not individual people. Get a grip,” transgender journalist Katelyn Burns responded to Kasparian. 

“Who called you that? I’ve only ever heard that used when referring to a population, not an individual person,” another user wrote. “Obviously, those terms are meant to be precise to include all people who meet one of those characteristics, when needing to discuss a relevant topic.”

“I respect you a lot, but this notion that the mere existence of trans-inclusive terms (rarely used in casual convos) somehow degrades women comes right out of the right’s anti-trans ‘war on women’ playbook,” added Mike Figueredo of The Humanist Report. 

“I have zero problem with inclusion. None. But there’s gotta be a better way than boiling it down to a body part, no? Especially in the context of having reproductive rights taken away from people who just see woman as a baby-making vessel. That’s all I’m saying,” Kasparian said in response.

“Your comment section has turned into a lunatic asylum. Some people just can’t accept your remarks,” Ian Miles Cheong concluded. 

Tyler Durden
Sat, 03/25/2023 – 17:00

via ZeroHedge News Tyler Durden

‘Surgical Removal’ Of Crypto Will Only Weaken USD Dominance

‘Surgical Removal’ Of Crypto Will Only Weaken USD Dominance

Authored by Jesse Coghlan via,

A day after Coinbase received a Wells notice from the Securities and Exchange Commission, industry commentators weighed in on what recent regulatory actions mean for America’s crypto future…

The United States’ crackdown on cryptocurrencies and crypto firms will only serve to stifle crypto-related innovation and “weaken” the country, industry pundits say in the wake of Coinbase’s recent Wells notice from the Securities and Exchange Commission.

On March 22, the crypto exchange became the latest crypto firm to receive a “legal threat” — a Wells notice — just a month after stablecoin-issuer Paxos received its own in February. Some suggest there could be more to come.

Mati Greenspan, the chief of crypto research firm Quantum Economics, said he believes U.S. regulators have been unfriendly to crypto “since the beginning.”

The recent collapses of crypto and startup-friendly banks, including Silvergate, Silicon Valley Bank and Signature Bank, have been viewed by some as being part of a scheme by regulators to un-bank the crypto sector, dubbed “Operation Choke Point 2.0.”

Meanwhile, a March 20 economic report from the White House turned into a scathing review of the merits of crypto assets, with the paper spending almost an entire chapter debunking crypto’s “touted” benefits.

Greenspan told Cointelegraph that the rumored action could be underway as crypto is seen as a “threat” to the U.S. dollar’s dominance in global trade — a significant and long-standing benefit to the U.S.

However, as more are beginning to use crypto for cross-border remittances globally, he warned a crackdown on crypto in the U.S. could actually have the opposite effect on the dollar:

“The surgical removal of cryptocurrencies from the U.S. banking system will only isolate the United States further and weaken the dollar’s position as the global reserve currency.”

Adrian Przelozny, CEO of Australian crypto exchange Independent Reserve, told Cointelegraph that the recent banking sector woes were not due to “any failure in crypto” but caused by banks managing their risks in an “irresponsible way.”

“The White House would be better served to review the practices in the banking industry,” he added.

Speaking about the most recent action against Coinbase, Przelozny said the “adversarial environment for the crypto industry” in the U.S. would push the related “jobs, investment and future innovation” offshore.

“Singapore, Hong Kong and potentially Australia” — who are eyeing the benefits of the crypto industry — may prove a better home for it, and those countries “will reap the economic benefits,” Przelozny said.

The exact reasons the regulator is targeting Coinbase are still unclear. The SEC has declined to comment on the matter.

Michael Bacina, a lawyer and partner at Piper Alderman, agreed that a “regulation by enforcement model” would “drive crypto-asset innovation offshore,” adding:

“This is a strange position to adopt given the losses many faced in the last 12 months arose from collapses involving unregulated offshore structures.”

Bacina said for years, the industry has asked for clarity on how to comply. He pointed to the recent “telling” comments made by the judge in Voyager Digital’s bankruptcy case that “observed that there is no clear guidance from regulators.”

He added that offshore jurisdictions would continue harboring crypto firms until governments lay out the path to regulatory compliance, “which will cost jobs and raise the risk for consumers and investors.”

Tyler Durden
Sat, 03/25/2023 – 16:30

via ZeroHedge News Tyler Durden

ChatGPT Provides Much More Balanced Responses Than Google Bard as to Good/Bad Things About Trump/Biden

Thursday, I blogged about how Google Bard responds to “What are some [good/bad] things about [Trump’s/Biden’s] presidency?” The short version (go to the post for screenshots that contain the full output):

  1. “What are some good things about Donald Trump’s presidency?” yielded a list of good things and bad things.
  2. “What are some good things about Joe Biden’s presidency?” yielded a list of just good things.
  3. “What are some bad things about Donald Trump’s presidency?” yielded a list of just bad things.
  4. “What are some bad things about Joe Biden’s presidency?” yielded a list of bad things and good things.

But when I ask OpenAI, the results are considerably more balanced, basically because the requests for good things just yield good things (for both) and the requests for bad things just yield bad things (for both):

[Prompt:] What are some good things about Donald Trump’s presidency?

While opinions on Donald Trump’s presidency vary significantly, there are several accomplishments and aspects of his tenure that some people view positively. Here are a few:

  1. Economic growth: The U.S. economy experienced growth during parts of Trump’s presidency, with low unemployment rates and a strong stock market before the COVID-19 pandemic.
  2. Tax reform: Trump signed the Tax Cuts and Jobs Act into law in 2017, which reduced corporate and individual tax rates for many Americans.
  3. Deregulation: The Trump administration rolled back numerous regulations in various industries, which some supporters argue encouraged business growth and innovation.
  4. Criminal justice reform: Trump signed the First Step Act in 2018, a bipartisan effort to reform the federal prison system and reduce recidivism rates.
  5. Foreign policy: Trump’s administration brokered the Abraham Accords, leading to normalized relations between Israel and several Arab nations. His administration also engaged in diplomacy with North Korea and applied pressure on NATO allies to increase defense spending.
  6. Judicial appointments: Trump appointed three Supreme Court justices and numerous federal judges, shaping the judiciary for decades to come.

It is essential to remember that perspectives on these aspects of his presidency are subjective and can vary depending on one’s political beliefs and values.

[Prompt:] What are some good things about Joe Biden’s presidency?

As of the knowledge cutoff date in September 2021, Joe Biden’s presidency had seen several accomplishments and policy initiatives that some people view positively. Here are a few:

  1. COVID-19 response: The Biden administration prioritized vaccination efforts and coordinated with states to improve vaccine distribution, contributing to a significant increase in vaccination rates.
  2. American Rescue Plan: Biden signed a $1.9 trillion COVID-19 relief package into law, which provided direct payments to many Americans, extended unemployment benefits, and allocated funding for vaccine distribution, among other measures.
  3. Infrastructure Investment and Jobs Act: The Biden administration negotiated and signed a bipartisan infrastructure bill, allocating $1.2 trillion to improve physical infrastructure, including transportation, broadband, and clean energy projects.
  4. Climate change and environmental policies: Biden rejoined the Paris Agreement and took executive actions to reverse several Trump-era environmental policies. His administration has also pushed for investment in clean energy and green jobs.
  5. Diplomacy and foreign policy: Biden has emphasized rebuilding relationships with traditional U.S. allies, reaffirming the U.S.’ commitment to NATO, and taking a more collaborative approach to global challenges like climate change and public health.
  6. Social and racial justice: The Biden administration has taken steps to address systemic racism, promote racial equity, and advance LGBTQ+ rights through various executive actions and policy proposals.

Please note that opinions on these aspects of Biden’s presidency are subjective and can vary depending on one’s political beliefs and values. Additionally, as this information is current as of September 2021, there may have been further developments in the months since.

[Prompt:] What are some bad things about Donald Trump’s presidency?

Critics of Donald Trump’s presidency often point to several issues and controversies during his tenure. Here are a few:

  1. COVID-19 response: Trump’s administration faced criticism for its handling of the COVID-19 pandemic, with detractors arguing that the response was slow, disorganized, and downplayed the severity of the virus.
  2. Impeachment trials: Trump was impeached twice by the House of Representatives, first on charges of abuse of power and obstruction of Congress related to the Ukraine scandal, and later on charges of incitement of insurrection following the January 6, 2021, attack on the U.S. Capitol. Although he was acquitted in both Senate trials, the impeachments were significant controversies during his presidency.
  3. Immigration policies: Trump’s administration implemented a number of hardline immigration policies, including the travel ban targeting predominantly Muslim countries, the zero-tolerance policy that led to family separations at the U.S.-Mexico border, and efforts to end the Deferred Action for Childhood Arrivals (DACA) program.
  4. Racial tensions: Critics argue that Trump’s rhetoric and actions, such as his response to the Unite the Right rally in Charlottesville, Virginia, and the Black Lives Matter protests, exacerbated racial tensions and divisions in the United States.
  5. Environmental policies: Trump’s administration rolled back numerous environmental regulations and withdrew the U.S. from the Paris Agreement, leading to concerns about the long-term impact on climate change and environmental protection.
  6. Relations with allies: Trump’s approach to foreign policy, including his criticisms of NATO and disagreements with traditional U.S. allies, was seen by some as damaging to international relations and global stability.

It is important to remember that perspectives on these aspects of his presidency are subjective and can vary depending on one’s political beliefs and values.

[Prompt:] What are some bad things about Joe Biden’s presidency?

As of the knowledge cutoff date in September 2021, there were several criticisms and controversies related to Joe Biden’s presidency. Here are a few:

  1. Afghanistan withdrawal: The Biden administration faced criticism for its handling of the U.S. withdrawal from Afghanistan, particularly in the chaotic final stages, which included a rushed evacuation effort and a deadly terrorist attack near the Kabul airport.
  2. Border crisis: Critics argue that the Biden administration’s immigration policies have led to an increase in migrants, including unaccompanied minors, at the U.S.-Mexico border, resulting in overcrowded facilities and humanitarian concerns.
  3. Inflation and economic concerns: Some critics have expressed concerns that the large-scale stimulus packages and government spending under the Biden administration could contribute to rising inflation and long-term economic challenges.
  4. COVID-19 vaccine hesitancy: While the Biden administration has made significant progress in vaccinating Americans, vaccine hesitancy remains an issue, with critics arguing that the administration’s messaging and strategies have not effectively addressed the problem.
  5. Partisanship and polarization: Biden pledged to work towards unity and bipartisanship; however, some critics argue that his administration has struggled to bridge the divide and achieve consensus on key issues, such as voting rights and police reform.
  6. Executive actions: Some argue that Biden’s use of executive orders to reverse Trump-era policies or advance his own agenda could contribute to a further concentration of power in the executive branch and set a precedent for future presidents.

Please note that opinions on these aspects of Biden’s presidency are subjective and can vary depending on one’s political beliefs and values. Additionally, as this information is current as of September 2021, there may have been further developments in the months since.

I don’t know if the differences stem from differences in the training data, in the Large Language Model algorithms, in any deliberate post-processing that is done to adjust the answers, or in something else (perhaps a mix of these things). But it struck me as potentially noteworthy.

The post ChatGPT Provides Much More Balanced Responses Than Google Bard as to Good/Bad Things About Trump/Biden appeared first on

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Another California Storm Is Coming

Another California Storm Is Coming

California has been relentlessly battered by an endless series of atmospheric river storms in the past three months. After being struck by yet another storm last week, the state now braces for the possibility of another one arriving in just a few days.

For more on the forecast timing and impacts of the upcoming storm, meteorologist Armando Salvadore shared this report with clients: 

In the last 30 days, the entire state of California with the exception of far southern Ca (Riverside and Imperial county) are above average to well above in terms of precipitation and even those aforementioned are just about near average. We’ve seen a substantial amount of condensed water over this winter, and there’s no signs of this letting up as we roll into yet another active week next week!

Below, a potent upper-level low will look to drop southward and “bowl” itself into northern/central California. Such a mid-level disturbance will allow for a surface cyclone to manifest, and crash somewhere north of Sacramento come Tuesday midday.

However, impacts will be felt later Monday because of a potent low level jet out ahead of the disturbance with strong moisture advection and forcing for ascent that transpires ahead of the impending mid/upper level low. A 40+ knot low level jet will propagate ahead of the disturbance, causing both warm air and moisture advection off the Pacific ocean allowing for rain to make landfall across northern California before the main axis shifts southward toward the Bay Area. By later Tuesday into Wednesday, the slug of rain will push further south toward Los Angeles. Along with low elevation heavy rain, heavy snow will also occur for Sierra Nevada Mountains, which by the way is already in the running for the most snowiest winter ever (currently sitting 2nd place with more than 56 feet that has fallen this winter!).

In terms of moisture in the form of water vapor readily available to be condensed, we’re looking at signals of at least 0.5 – 1 standard deviation above climatology within the warm sector of the cyclone, and unsurprisingly coincides with a potent low level jet.

Here we can see how the surface is represented with a mature cyclone making way toward northern/central California and heavy rain overspreading from north to south along with heavy snow impacting the higher terrain.

While there still may be some discrepancy in where the heaviest rain totals occur, there’s a growing consensus for a widespread swath of at least over an inch. The only positive aspect of this system is that this falls over the course of a day, so flash flooding won’t necessarily be an issue; however, it’s areas already prone to flooding from previous events that could allow for excess runoff to nearby lower elevations or surrounding locations.

While many Californians might have storm fatigue, the good news is that Gov. Gavin Newsom ended some of the state’s water restrictions last week as drought conditions dissipated

Tyler Durden
Sat, 03/25/2023 – 16:00

via ZeroHedge News Tyler Durden

Stanford Law School Suspends Diversity Dean After She Doubles-Down On Duncan Debacle

Stanford Law School Suspends Diversity Dean After She Doubles-Down On Duncan Debacle

Tirien Steinbach, the diversity administrator at Stanford Law School who stoked a disruptive protest of Fifth Circuit appellate judge Kyle Duncan, is “currently on leave,” according to a memo on the protest reviewed by the Washington Free Beacon.

Jenny Martinez, the law school’s dean, said in a Wednesday morning memo to all law students that administrators “should not insert themselves into debate with their own criticism of the speaker’s views.” At future talks, the role of administrators will be to “ensure that university rules on disruption of events will be followed,” Martinez said.

Martinez gave no additional details on the terms of Steinbach’s leave, stating that the “university does not comment publicly on pending personnel matters.” She also ruled out disciplining any of the students who shouted down Duncan – in part, she said, because administrators sent “conflicting signals about whether what was happening was acceptable or not.”

Instead, the law school will require all students to attend a training on “freedom of speech and the norms of the legal profession,” which will discuss, among other things, how “vulgar personal insults” can harm students’ “professional reputations.”

That warning appears to be in reference to protesters who hurled sexual invective at Duncan, with one allegedly telling him, “We hope your daughters get raped.”

It comes amid calls from Sen. Ted Cruz (R., Texas) and others for state bar associations to investigate the hecklers, which could potentially hold up their legal licenses.

As Jonathan Turley details below, this “leave” comes after Steinbach publicly responded and appears to be doubling down on her actions in a Wall Street Journal opinion column.


First a short recap of how we got here.

The Stanford Federalist Society invited Judge Duncan of the United States Court of Appeals for the Fifth Circuit to speak on campus. However, liberal students, including members from the National Lawyer’s Guild, decided that allowing a conservative judge to speak on campus is intolerable and set about to “deplatform” him by shouting him down.

In this event, Duncan was planning to speak on the topic:  “The Fifth Circuit in Conversation with the Supreme Court: Covid, Guns, and Twitter.” A video shows that the students prevented Duncan from speaking from the very beginning. Many called him a racist while others hurled insults like one yelling “We hope your daughters get raped.”

Duncan was unable to continue and asked for an administrator to assist him.

Dean Steinbach then took the stage and criticized the judge for seeking to be heard despite such objections.

Steinbach explained “I had to write something down because I am so uncomfortable up here. And I don’t say that for sympathy, I just say that I am deeply, deeply uncomfortable.” While reaffirming her belief in free speech and insisting that the judge should not be cancelled, she proceeded to attack the judge for the content of his views.

Steinbach declared “It’s uncomfortable to say that for many people here, you’re work has caused harm.” After a perfunctory nod to free speech, Steinbach proceeded to eviscerate it. She continued “again I still ask, is the juice worth the squeeze?” Is it worth the pain that this causes, the division that this causes? Do you have something so incredibly important to say about Twitter and guns and Covid that that is worth this impact on the division of these people.”

Dean Martinez later apologized and then released a letter with Stanford President Marc Tessier-Lavigne that reaffirmed the commitment to free speech, but did not commit to holding the students accountable for their disruption. (The students with the National Lawyer’s Guild later complained about their names being mentioned in an article despite a campaign to name and shame conservative students).

Dean Martinez then issued another letter with a strong defense of free speech and declared that all students (including the victims of the disruption) would be required to attend a free speech appreciation session. However, she declined any action against the students responsible for the disruption. That is a familiar pattern at universities.

That brings us to Steinbach’s column.

The Wall Street Journal was correct in running her account and it contains an important perspective to consider, even for some of us who were highly critical of Steinbach’s remarks.

First, Dean Steinbach rightfully points out that she tried to get the students to allow the event to proceed. At one point, she suggested that students walk out in protest over Judge Duncan’s views. She also insists that she opposed efforts to cancel the event before it was held and continues to oppose such attempts to limit speech. She reaffirms the classical liberal view that the solution to bad speech is good speech, not less speech. That is all to her credit.

However, the column has elements that are, frankly, less compelling or commendable.

Steinbach appears to be responding to this admonishment by Martinez:

In this instance, however, the failure by administrators in the room to timely administer clear and specific warnings and instead to send conflicting signals about whether what was happening was acceptable or not (and indeed at one point to seemingly endorse the disruptions that had occurred up to that point by saying “I look out and say I’m glad this is going on here”) is part of what created the problem in the room and renders disciplinary sanction in these particular circumstances problematic.

Steinbach insists that she was simply using her training at “deescalation” and that she was asked to attend the event by the Federalist Society for that reason:

I stepped up to the podium to deploy the de-escalation techniques in which I have been trained, which include getting the parties to look past conflict and see each other as people. My intention wasn’t to confront Judge Duncan or the protesters but to give voice to the students so that they could stop shouting and engage in respectful dialogue. I wanted Judge Duncan to understand why some students were protesting his presence on campus and for the students to understand why it was important that the judge be not only allowed but welcomed to speak.

The problem with the column, in my view, is two-fold.

First, in her remarks, Steinbach goes out of the way to show her agreement with the mob and indicates that she knew that they were going to stop the event. She soft pedals the attacks on Duncan and seems to blame both sides. She does not mention how the students prevented him from speaking, yelled about his being a racist, or called for the rape of his daughters. Instead, she describes how  “a verbal sparring match began to take place between the judge and the protesters. By the time Judge Duncan asked for an administrator to intervene, tempers in the room were heated on both sides.” That sounds a lot like blaming the victim. If the mob had not prevented the judge from speaking, there would have been “sparring” before the event was opened up for questions.

She is not alone in such spins. Some like Slate’s Mark Stern suggested that Judge Duncan manufactured the controversy. Democratic members like Rep. Elissa Slotkin (D-MI) mocked Duncan as a “fragile flower.” Others at sites like Above the Law insisted, again, that silencing people like Judge Duncan is free speech.  Senior Editor Joe Patrice rejected the effort to “recast ‘free speech’ as the right of a powerful person to speak at the silent and unprivileged.” (In this case, “the silent and unprivileged” are Stanford students at an elite law school, who were invited to ask questions but asked not to prevent others from hearing from Judge Duncan).

Second, Steinbach still chastises Duncan for his divisive viewpoints and clearly blames him in part for the controversy by refusing to yield to the sensibilities of the students — presumably by remaining silent.

At one point during the event, I asked Judge Duncan, “Is the juice worth the squeeze?” I was referring to the responsibility that comes with freedom of speech: to consider not only the benefit of our words but also the consequences. It isn’t a rhetorical question. I believe that we would be better served by leaders who ask themselves, “Is the juice (what we are doing) worth the squeeze (the intended and unintended consequences and costs)?”

Steinbach appears utterly clueless about why this question is so offensive to free speech values. She continues to intentionally obscure her obvious desire for speakers like Duncan to curtail their speech by stating that we would “be better served” by speakers asking if their speech is worth “the intended and unintended consequences and costs.”

Avoiding “the squeeze” means being silent on points that have such consequences. Thus, to avoid angering these radical students, Duncan is expected to be silent on certain points or, in this case, any points that he might want to share. It is an invitation for self-censorship that would apply to any conservative jurist or speaker. While supporting free speech, Steinbach is condemning the exercise of speech when it could cause “pain” and “division.” Of course, such pain and division would not arise with a liberal jurist espousing the opposite viewpoints. Accordingly, liberal jurists would be free to speak without the sense of culpability while conservatives are expected to remain silent.

In the end, Steinbach did not “defuse” the situation but fueled the rage with her comments. To this day, she cannot understand why Duncan would persist in speaking when some take such great offense at his views. She asks “Is there a way that we can stop blaming and start to talk and listen to each other?” Yet, her answer appears to be for speakers like Duncan to recognize that their views are simply too hurtful for some and should not be voiced to avoid “the squeeze” of free speech.

The result is the type of doublespeak that is common on our campuses. Steinbach claims fealty to free speech while denouncing its exercise. She laments “how polarized our society has become,” but added to that polarization by expressing her own concerns over the “harm” that Duncan’s speech has brought for many at the school. She asked “how do we listen and talk to each other as people” while maintaining that, by stating his jurisprudential views, Duncan might not be worth the harm (or “squeeze”) to others.

Anti-free speech advocates often try to portray the exercise of free speech as a complex challenge. It is not. The Duncan controversy shows how the issue is stark and simple. Judge Duncan had a right to speak and others had a right to hear him. Those who disagree with him had a right to protest outside of the event and to ask tough questions inside the event. The only thing that they could not do is disrupt the event itself; to prevent others from hearing from Judge Duncan.

[ZH: We note that Judge Duncan, a Trump appointee, delivered a speech at the University of Notre Dame last night (March 24), telling listeners that there’s a “vital tradition of free speech in this country” and that students have the right to protest him.

“It’s a great country, where you can harshly criticize federal judges and nothing bad will happen to you. You might even get praised or promoted,” he said.

“But make no mistake. What went on in that classroom on March the ninth had nothing to do with our proud American tradition of free speech. It was rather a parody of it.”]

The solution is also stark and simple, though it has, once again, been ignored by an administration.

Students who cancel events or classes on campus are taking a position that is not just antithetical to principles of free speech but of higher education. They should be suspended or, in extreme or repeated cases, expelled.

Otherwise, the law school is not achieving any greater clarity than this column. It is professing an absolute commitment to free speech while declining to enforce that commitment.

Tyler Durden
Sat, 03/25/2023 – 15:30

via ZeroHedge News Tyler Durden