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How Scalia’s Absence Could Protect the Exclusionary Rule

Although Antonin Scalia’s critics on the left tended to portray him as a law-and-order conservative who automatically sided with cops in search-and-seizure cases, the late justice frequently defended the Fourth Amendment, a point that becomes clear when you consider his mixed record in cases arising from the war on drugs. But Scalia was no fan of the exclusionary rule, which deters violations of the Fourth Amendment by making illegally obtained evidence inadmissible. A case the Supreme Court heard on Monday suggests how Scalia’s absence could help shore up that principle.

The case, Utah v. Strieff, began with a tip that the Salt Lake City Police Department received in December 2006. In response to a message from an anonymous caller who claimed “narcotics activity” was occurring at a house in South Salt Lake City, Officer Douglas Fackrell watched the place intermittently, for a total of three hours over the course of a week. He did not see much. Visits to the house were not “terribly frequent,” but they were frequent and short enough to arouse Fackrell’s suspicions. He decided to stop and question one of the visitors leaving the house so he “could find out what was going on” inside. That visitor happened to be Edward Strieff, who happened to have an outstanding warrant for a minor traffic offense, a fact that Fackrell discovered after asking for Strieff’s ID and running a record check. Based on the warrant, Fackrell arrested Strieff and searched him, finding a bag of methamphetamine and drug paraphernalia in his pockets.

Since Fackrell did not have reasonable grounds to suspect Strieff was involved in criminal activity before stopping him, the initial detention was clearly illegal. Strieff argued that the evidence against him should be thrown out, since he would not have been searched if he had not been arrested, and he would not have been arrested if he had not been illegally detained. The Utah Supreme Court agreed, rejecting the government’s claim that the intervening discovery of an outstanding warrant “attenuated” the connection between the Fourth Amendment violation and the search enough to make the evidence admissible.

Of the six justices who spoke during oral argument in the case yesterday, three seemed inclined to accept the attenuation argument, while the other three seemed likely to side with Strieff. George Washington University law professor Orin Kerr, a Fourth Amendment specialist, suggests that even split is likely to hold up when a vote is taken:

[Sonia] Sotomayor and Elena Kagan were clearly on the defense side, with Justice Ruth Bader Ginsburg probably there, too. Justice Samuel Alito and Chief Justice John Roberts seemed clearly on the government’s side, with Kennedy probably with them. Justice Clarence Thomas maintained his usual silence, and Justice Stephen Breyer also asked no questions. In the past, Thomas has generally been a vote against the exclusionary rule and Breyer has generally been a vote in its favor.

If the vote is 4 to 4, the Utah Supreme Court’s decision will stand, although the case will not set a national precedent. If Scalia were still on the Court, by contrast, the outcome might well have been yet another decision whittling away at the exclusionary rule.

Illustrating how such decisions encourage police abuses, Sotomayor noted that outstanding warrants for minor offenses are very common in some jurisdictions. According to the Justice Department’s 2015 report on law enforcement in Ferguson, Missouri, more than three-quarters of the city’s residents had outstanding warrants at the end of 2014. “There may be a very good incentive for just standing on the street corner in Ferguson and asking every citizen, ‘Give me your ID; let me see your name,'” Sotomayor said. “And let me hope, because I have an 80 percent hance that you’re going to have a warrant.”

Kagan drove home Sotomayor’s point. “There are a variety of circumstances in which police officers would really like to talk to somebody and really like to search them but don’t have reasonable suspicion,” she said. “And I think that the question that Justice Sotomayor is asking is if you’re policing a community where there is some significant percentage of people who have arrest warrants out on them, it really does increase your incentive to make that stop on the chance that there will be a warrant that will allow you to search and admit whatever evidence you gained in that search.”

In such a situation, cops would effectively be empowered to search many or most people at will, since a search is allowed following an arrest. Although police would be violating the Fourth Amendment by initiating such encounters, there would be no real consequences, since they could still use any evidence they found.

Alito’s response to that concern was revealing. “There’s a downside,” he said. “If the officer makes an illegal stop, the officer exposes himself or herself to all sorts of consequences.” In theory, yes. In practice, no. “Police rarely face consequences when they shoot innocent civilians,” Slate‘s Mark Joseph Stern notes. “Does Alito really think they’ll get in big trouble for detaining somebody unlawfully for a few minutes?”

Even in the unlikely event that the victim of an illegal stop files a lawsuit and either wins in court or obtains a settlement, the money will not come out of the officer’s pocket. Cops tempted to embark on illegal fishing expeditions will not be deterred by fines they will never feel, but they may very well be deterred by the knowledge that they will have to throw the fish back.

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Joy and Bad Laws: New at Reason

John Stossel is rooting for Jennifer Lawrence to win an Oscar for Joy:

Lawrence’s character is based on real-life entrepreneur Joy Mangano, who invented the self-wringing Miracle Mop and other “Ingenious Designs,” as her company is known. Now she hawks them and other products on the Home Shopping Network.

The film accurately depicts struggles businesses face. Joy goes deep into debt to finance her idea, overcomes manufacturing problems, persuades skeptical marketers and deals with such menaces as patent trolls.

View this article.

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Risk Off: US Equity Futures Tumble To 1,900 Support; Sterling Crashes, Gold Soars

While the prevailing dour (or perhaps sour) overnight mood was a continuation of the weak oil theme launched yesterday after Iran said the production freeze proposed by Saudi and Russia as “ridiculous”, while Saudi oil minister Al-Naimi said that high-cost producers should bear the burden of reducing the current surplus (as in go out of business), risk sentiment was further dented when BOJ Governor Kuroda says he won’t target FX rates or stocks, which is clearly nonsense, and further spooked Japanese asset prices (Nikkei -0.85), while sending JGB yields to fresh record lows as follows: 10-year at -0.055%, 20-year at 0.600%, 30-year at 0.915% and 40-year at 1.035%. 

As Bloomberg adds, with the introduction of negative-rate policy, investors particularly banks are investing excess cash in govt bonds yielding more than zero, says Hideo Suzuki, chief manager, forex and financial products trading at Mitsubishi UFJ Trust & Banking, in an interview; says there’s a sense among investors that unless they buy positive-yielding debt now, they won’t be able to purchase them. Well there are always positive yielding US Treasurys, though maybe not for much longer.

Going back to oil, it seems that finally the headline chasing algos have run out of steam: “the Saudi comments stating the obvious that the output deal was really not a deal” is weighing on prices, says Global Risk Management oil risk manager Michael Poulsen, with API also pulling prices lower. It’s “maybe an overreaction to things that were clear days ago, so might be some bargain hunters cashing in their chips.”

“Once again we are seeing lower oil prices halting the emerging confidence in global markets,” added Ole Hansen, head of commodity strategy at Saxo Bank A/S. “Lower oil prices continue to raise concerns about EM growth, a credit event among weak oil producers and selling from sovereign wealth funds.”

So with the marketwide short squeeze now officially over, global selling of stocks has resumed, dragging down everything from banks to commodity producers as well as emerging markets, while in the US S&P futures have tumbled back down to just above the psychological support level of 1900 (and below DeMark’s breach level) driven by another day of tumbling USDJPY, but also by the latest surge higher in gold – something which according to Goldman which has by now been stopped out of its gold “short” means systemic risk is once again rising.

 

Indeed, the bullish euphoria that had gripped markets as recently as Monday is all gone: “It will take some time before market sentiment does turn,” Kerry Craig, global market strategist at JPMorgan Asset Management, told Bloomberg TV in Melbourne. “It’s still very pessimistic. Most investors are very risk averse. You need catalysts or triggers such as an oil price stabilization, clarity about what the Fed is actually going to do and what we see happening with the Chinese currency and economic data.”

How much changes in just 48 hours based on nothing but HFT algo stop hunting price action and a confirmation of what everyone already knew: that there will be no oil production cuts.

While the rest of the risk moves have seen the now all too familiar correlations (Treasuries in Europe and US surging as stocks tumble), another notable plunge has taken place in cable which continues to sell on Brexit fears and overnight dropped below 1.3900. Effectively Boris Johnson has had a more favorable impact on the British currency than a few hundred billion in BOE QE – the local stock market should be cheering on Brexit.

 

Oh, we almost forgot the key event of the night: Trump’s juggernaut in Nevada virtually assures him the GOP presidential nomination barring some calamity. The market is desperately trying to infer if this is bullish or bearish for risk.

In summary: European shares dropped the most in two weeks and U.S. stock-index futures also sank. Crude fell through $31 a barrel in New York, after sliding last session, when Iran’s oil minister derided a plan forged by Saudi Arabia and Russia to lock production at January levels. The Russian ruble retreated with Malaysia’s ringgit and the pound weakened below $1.40 for the first time since 2009 on concern the U.K. may exit the European Union. The cost of insuring investment-grade corporate debt rose for the first time in three days, while Treasuries and the yen advanced.

Where markets stand now:

  • S&P 500 futures down 0.8% to 1900
  • Stoxx 600 down 2.2% to 320
  • FTSE 100 down 1.6% to 5867
  • DAX down 2.5% to 9182
  • German 10Yr yield down 4bps to 0.14%
  • Italian 10Yr yield down less than 1bp to 1.53%
  • MSCI Asia Pacific down 0.9% to 119
  • Nikkei 225 down 0.8% to 15916
  • Hang Seng down 1.1% to 19192
  • Shanghai Composite up 0.9% to 2929
  • US 10-yr yield down 3bps to 1.69%
  • Dollar Index up 0.22% to 97.7
  • WTI Crude futures down 3.1% to $30.89
  • Brent Futures down 2.2% to $32.55
  • Gold spot up 0.6% to $1,233
  • Silver spot down less than 0.1% to $15.29

Global Top News

  • Hong Kong Forecasts Slowing Economic Growth as Tourism Slumps: Economy may expand by 1% to 2% in 2016, slower than 2.4% gain last year
  • This Is Why Kyle Bass Is Wrong on China Collapse, Says CICC: China International Capital questions parallels between Japan in 1990, China now
  • Goldman’s Ex-Southeast Asia Chairman Leissner Leaves Firm: Tim Leissner helped build the investment bank’s Malaysia business
  • Asia Hedge Funds Top Rankings as Jiang Pounces in Panicky Market: Performance by Segantii, Sylebra, Greenwoods, Tybourne shows industry matured in Asia
  • Steven Cohen’s Point72 Said to Add Ai Yoshino as Trader in Asia: Yoshino most recently worked for Mitsubishi UFJ Securities as equity sales trader
  • Wanda to Announce ‘Major Deal’ This Week, Chairman Wang Says: Chinese conglomerate has been on an acquisition spree this year
  • Fortescue CFO Sees $1 Billion Firepower to Further Reduce Debt: Cutting debt remains company’s strategic focus, CFO Stephen Pearce says
  • Chinese Coal Miners Said to Lobby Government for Price Floor: A request to Premier Li Keqiang was made in January in Shanxi

Looking at regional markets, Asian equities traded lower following the negative close on Wall St. driven by the decline in oil prices after the Saudi Oil Minister dismissed a production cut, while the latest API figures showed a significant build of 7.1mIn bbls. ASX 200 (-2.16%) and Nikkei 225 (-0.85%) were pressured from the open with the latter back below 16000, while sentiment in Australia was further dampened by several poor earnings results from the likes of Fortescue, BHP and Wesfarmers. Chinese markets also conformed to the negative tone, with casino losses leading the declines in Hong Kong, while the Shanghai Comp (+0.88%) saw relatively subdued price action amid a lack of any significant catalyst and the PBoC remaining relatively neutral on the CNY reference rate. 10yr JGBs traded higher (10yr yield reached record low of -0.04%) amid weakness in riskier assets while the BoJ also entered the market for JPY 1.26tr1 of government debt.

Asian Top News

  • Hong Kong Forecasts Slowing Economic Growth as Tourism Slumps: Economy may expand by 1% to 2% in 2016, slower than 2.4% gain last year
  • This Is Why Kyle Bass Is Wrong on China Collapse, Says CICC: China International Capital questions parallels between Japan in 1990, China now
  • Goldman’s Ex-Southeast Asia Chairman Leissner Leaves Firm: Tim Leissner helped build the investment bank’s Malaysia business
  • Asia Hedge Funds Top Rankings as Jiang Pounces in Panicky Market: Performance by Segantii, Sylebra, Greenwoods, Tybourne shows industry matured in Asia
  • Steven Cohen’s Point72 Said to Add Ai Yoshino as Trader in Asia: Yoshino most recently worked for Mitsubishi UFJ Securities as equity sales trader
  • Wanda to Announce ‘Major Deal’ This Week, Chairman Wang Says: Chinese conglomerate has been on an acquisition spree this year
  • Fortescue CFO Sees $1 Billion Firepower to Further Reduce Debt: Cutting debt remains company’s strategic focus, CFO Stephen Pearce says
  • Chinese Coal Miners Said to Lobby Government for Price Floor: A request to Premier Li Keqiang was made in January in Shanxi

In Europe, equities can be seen suffering once again this morning, with Euro Stoxx drifting lower throughout the morning (-1.9%), taking the impetus from a lacklustre Asian session and with the usual suspects of energy, materials and financial sectors weighing on the indices. Given the aforementioned underperformance, high profile material names BHP Billiton (-7.2%), Glencore (-5.8%) and Anglo American (-6.1%) are all among the worst performers in Europe, while Standard Chartered (-5.2%) have also seen a continuation of weakness after yesterday’s earnings.

European Top News

  • Draghi Has Two Weeks to Map ECB Plan That Won’t Let You Down: When ECB policy makers meet from March 9-10, they’ll consider whether negative interest rates and EU60b a month of debt purchases is enough to revive consumer prices
  • Bayer Names Werner Baumann to Succeed Marijn Dekkers as CEO: Named chief strategy and portfolio officer Werner Baumann to succeed CEO Marijn Dekkers after April shareholders meeting
  • Airbus Profit Gains 1.6% on A350 Ramp-Up, Break-Even on A380: 2015 Ebit before one-offs EU4.1b, est. EU4.38b; figures held back by higher development spending; cranks up production after order rush for new jets; says 2016 earnings set to be stable
  • Peugeot Promises New Profit Plan With Restructuring Complete: To resume paying a dividend, 1st since 2011, from this year’s earnings, 5% oper. margin was more than double 2018 target
  • Delta Lloyd Shares Surge After Rights Offer Cut to $715m: Bowed to investor pressure and cut the size of a rights offer to EU650m; said in Nov. aimed to raise as much as EU1b
  • Man Group Declines After Profits Fall on Performance Fees Drop: FY adj. pretax fell to $400m vs $481m y/y, est. $455m
  • How Low Could Pound Go in a ‘Brexit’? Economists See 1985 Levels: 29 of 34 economists see drop to $1.35 or below on leave vote; GBP already at seven-year low as EU campaign heats up

In FX, it has been a busy morning and certainly so if you are GBP trader with a brief respite in Cable through 1.4000 quickly followed up by heavy selling, talking the pair down below 1.3900, the lowest level since the 2009 crisis. The focus is already on the 2009 lows just under 1.3500. EUR/GBP has been pushed higher, and we are nearing the .7900 level here despite moderate losses in EUR/USD, which has traded below the previous session lows — to just under 1.0975. More bids seen to 1.0950. USD/JPY is lower, but cross/JPY likely to be seeing more of the flow — the spot rate holding off the Tuesday base as yet. GBP/JPY is through 156.00, EUR/JPY 123.00. The oil related currencies are all softer along with WTI and Brent, but no panic moves like we saw earlier in the year. Even, so USD/CAD is back through 1.3800.

Lower crude prices dragged on the currencies of oil exporters Russia and Malaysia. The ruble dropped 2.5 percent and the ringgit fell 0.6 percent.  The Bloomberg Dollar Spot Index added 0.2 percent. Japan’s yen climbed versus all of its major counterparts, strengthening 0.3 percent to 111.81 per dollar.

China’s yuan fell for a fourth day as the People’s Bank of China set its reference rate at the lowest level in almost three weeks. Figures from the nation’s foreign-exchange regulator released Tuesday afternoon showed banks net sold overseas currencies to their clients for a seventh straight month in January. The yuan weakened 0.13 percent to 6.5359 against dollar, according to China Foreign Exchange Trade System prices. The central bank cut the reference rate by 0.04 percent to 6.5302 following a 0.17 percent reduction on Tuesday.

In commodities, it remains all about oil, as WTI futures slid as much as 3.3 percent in New York, below $31 once again this time on the April contract. Saudi Arabia’s proposal to cap output at January levels puts “unrealistic demands” on Iran, Oil Minister Bijan Namdar Zanganeh said Tuesday, according to the ministry’s news agency Shana. Ali Al-Naimi, his counterpart from Saudi Arabia, said at a conference in Houston that high-cost producers should bear the burden of reducing the current surplus and reaffirmed the kingdom’s commitment to last week’s accord.

Crude is down 17 percent this year on speculation a global glut will persist amid the outlook for increased shipments from Iran and brimming U.S. supplies, which are at the highest level in more than eight decades. The nation’s stockpiles expanded by 7.1 million barrels last week, the industry-funded American Petroleum Institute was said to report Tuesday.

Copper led losses in industrial metals on concerns that rising stockpiles in China signal continued weak demand in the world’s biggest consumer. Inventories in warehouses tracked by the Shanghai Futures Exchange have more than doubled to a record since the end of August, bourse data show. Copper for delivery in three months slid 1 percent in London.

On the US calendar there will be some focus on the flash services (expected to nudge up 0.3pts to 53.5) and composite PMI’s for February, while January new home sales data is also due out. The latest Fedspeakers due up will be Lacker who is set to talk on monetary policy and growth, as well as Kaplan later this evening who is due to talk on current economic conditions and monetary policy.

Bulletin Headline Summary from Bloomberg and RanSquawk

  • European equities take the impetus from the weak Asia lead with the usual suspects (Financial, Material and Energy) leading the region lower.
  • GBP yet again underperforms amid the continuous concerns surrounding a potential Brexit with GBP/USD printing fresh 7-yr lows.
  • Looking ahead highlights include US services PMI, DoE crude inventories reports as well as comments from Fed’s Lacker, Bullard, Kaplan and BoE’s Cunliffe
  • Treasuries higher overnight as global equity markets and commodities, ex-precious metals, resume selloff; U.S. auctions continue today with $34b 5Y notes, WI yield 1.17%, compares with 1.496% awarded in January.
  • A British exit from the European Union would be so devastating for the pound that 29 out of 34 economists in a Bloomberg survey see it sinking to $1.35 or below within a week of a vote to leave — levels last seen in 1985.
  • China scrapped limits on the amount of funds that foreign institutional investors can put into its interbank bond market, the latest step to lure capital from abroad as outflows weigh on the yuan
  • China International Capital Corp’s economists published a rebuttal of hedge-fund manager Bass’s assessment where he stated that China’s banking system may see losses of more than four times those suffered by U.S. lenders during the 2008 credit crisis
  • U.S. Treasury Secretary Jacob J. Lew downplayed expectations for an emergency response to global market turbulence when Group of 20 finance chiefs and central bankers meet this week in China
  • JPMorgan’s investment bank said revenue from sales and trading has tumbled about 20% this year, providing an early gauge of the pain inflicted on Wall Street’s biggest firms by the global market rout battering investors
  • Donald Trump’s dominating victory in the Nevada caucuses pushes him further out ahead of his nearest competitors for the Republican presidential nomination, giving his unorthodox candidacy a major boost heading into Super Tuesday contests next week
  • $11.15b IG corporates priced yesterday (YTD volume $255.4b) and $250m HY priced (YTD volume $11.375b)
  • Sovereign 10Y bond yields mostly steady; European, Asian markets drop; U.S. equity- index futures lower. Crude oil and copper fall, gold rises

US Event Calendar

  • 7:00am: MBA Mortgage Applications, Feb. 19 (prior 8.2%)
  • 8:00am: Fed’s Lacker speaks in Baltimore
  • 9:45am: Markit US Services PMI, Feb. P, est. 53.5 (prior 53.2); Markit US Composite PMI, Feb. P (prior 53.2)
  • 10:00am: New Home Sales, Jan., est. 520k (prior 544k)
  • 1:00pm: U.S. to sell $34b 5Y notes; New Home Sales m/m, Jan., est. -4.4% (prior 10.8%)
  • 1:15pm: Fed’s Kaplan speaks in Dallas
  • 7:00pm: Fed’s Bullard speaks in New York

 

DB’s Jim Reid concludes the overnight wrap

Markets have been soft over the last 24 hours not helped by China’s weaker Yuan fix yesterday and a 4.5% drop in oil. While the fix was little changed this morning (set 0.04% weaker) a further tumble for Oil overnight (now approaching $31/bbl) has kept risk assets firmly on the back foot in Asia this morning. The Nikkei (-1.36%), Hang Seng (-1.60%), ASX (-2.26%) and Shanghai Comp (-0.62%) in particular are all in the red, while credit indices are also a tad weaker. Not helping sentiment is the latest MNI consumer sentiment reading out of China, with the February reading declining 3.6pts to 111.3 and to a four-month low.

The latest twist in the Oil saga yesterday came about as headlines out of both Saudi Arabia and Iran hit the wires. The former’s Oil Minister, Ali al-Naimi, did initially say that freezing output at current levels is the beginning of a process and that high inventory levels will probably decline in due time if we can get all the major producers to agree to not add additional barrels. It was a follow up to this comment which appeared to spook the market however, with al-Naimi warning that ‘this is not the same as cutting production’ and that ‘that’s not going to happen’, while also suggesting that ‘there is less trust then normal’ between nations. Chatter from Iran’s Oil Minister Zanganeh didn’t help, saying that the Saudi-Russia freeze plan is ‘ridiculous’ and that the proposal puts ‘unrealistic demands’ on Iran. ConocoPhillips CEO seemingly summed up the confidence at a corporate level, saying that Oil companies ‘have to prepare for the worst case’ and that you ‘can’t count on a Saudi freeze working’.

Combined with the already dampened sentiment after the CNY fix, it was a broadly weaker day across equity markets yesterday. In Europe we saw the Stoxx 600 close -1.22%, DAX -1.64% and FTSE MIB -1.95%. A softish German IFO survey did little to help with the expectations component in particular down 3.5pts to 98.8 and the lowest since late 2012.

Across the pond the S&P 500 (-1.25%) finished near enough at its lows for the day with a rough session for financials following some bleak but perhaps unsurprising comments about difficult trading conditions so far this year from JP Morgan not helping. Credit markets appeared to largely ignore the intraday volatility in Oil with Main finishing half a basis point tighter and sub-fins also outperforming (5bps tighter). US credit did weaken slightly into the close with CDX IG finishing 2bps wider although a second consecutive high volume session in the primary market kept sentiment relatively upbeat.

Elsewhere, Treasury yields tracked the move lower with Oil with the closing level of 1.723% for the 10y (-3bps) masking what was a pretty big high-to-low swing after yields had crept up over 1.812% prior to the latest headlines. Gold (+1.51%) and the Yen (+0.73%) were the beneficiaries from the broader risk selloff, while Sterling was another sharp leg lower against both the Dollar (-0.90% to $1.402) and Euro (-0.82% to €1.273) and has in fact dipped below $1.40 during the Asia session this morning. Moves have also come following comments from the BoE’s Carney yesterday who said that the BoE has ‘considerable room’ should additional stimulus be required.

Away from the focus on Oil markets yesterday, the US data was something of a sideshow although the fall in consumer confidence did turn a few heads. The February print declined a fairly sharp 5.6pts to 92.2 (vs. 97.2 expected) which was the lowest since July last year with the expectations component down 6.4pts and to the lowest since February 2014. Elsewhere the Richmond Fed manufacturing index reading unexpectedly declined 6pts this month to -4 after the consensus had been for no change. Existing home sales were up in January by +0.4% mom (vs. -2.5% expected) while the S&P/Case-Shiller home price index was a smidgen behind market at +0.80% mom for December (vs. +0.85% expected).

Yesterday’s Fedspeak offered some interesting contrasting comments. Kansas City Fed President George argued that a potential March move ‘absolutely should be on the table’ and that ‘at this point I would not say that the data have suggested there has been a fundamental shift in the outlook’. Dallas Fed President Kaplan was a lot more dovish in his comments to the FT saying that ‘in order to reach our inflation objective we may need to be more patient than we previously might have thought’ and that ‘if that means we take an extended period of time where we stop and don’t move, that may also be necessary’. Speaking overnight meanwhile, Fed Vice-Chair Fischer probably sat somewhere in the middle of his colleague’s comments, saying that ‘if the recent financial market developments lead to a sustained tightening of financial conditions, they could signal a slowing in the global economy that could affect growth and inflation in the US’. At the same time however, Fischer also opined that ‘we have seen similar periods of volatility in recent years…that have left little visible imprint on the economy, and it is still early to judge the ramifications’.

Running over today’s calendar, this morning in Europe the only data of note is out of France where we’ll receive the latest consumer confidence print and the UK where CBI reported sales data is due. In the US this afternoon there will be some focus on the flash services (expected to nudge up 0.3pts to 53.5) and composite PMI’s for February, while January new home sales data is also due out. The latest Fedspeakers due up will be Lacker (at 1pm GMT) who is set to talk on monetary policy and growth, as well as Kaplan later this evening (at 6.15pm GMT) who is due to talk on current economic conditions and monetary policy. Away from this the EC’s Tusk and Juncker are due to speak in EU Parliament this afternoon on the outcome of the EU summit with Brexit expected to be a hot topic. The BoE’s Cunliffe is also due to speak tonight.


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Trump Wins Nevada Caucus

Donald Trump is projected to have won the chaotic Nevada Republican caucuses, according to the Associated Press, with Rubio poised for second place.

There have been 133 delegates contested so far—Donald Trump has about 79 of them. The next Republican contests are on Super Tuesday, when 11 states and 566 delegates are up for grabs. A candidate needs 1,237 out of 2,369 delegates to secure the nomination.

The largest share of delegates on Super Tuesday comes from Texas, which has 155. All 11 states allocate their delegates proportionally, though most also award all their delegates to one candidate if that candidate reaches a certain threshold. In Texas, that threshold is 50 percent. The RealClearPolitics average of polls from Texas has Texas Sen. Ted Cruz at 37.3 percent and Donald Trump at 28 percent.

The second biggest state voting on Super Tuesday is Georgia, with 76 delegates and a 50 percent threshold to win all the delegates. Trump is averaging 35 percent there.

The other states are Alabama, Alaska, Arkansas, Massachusetts, Minnesota, Oklahoma, Tennessee, Vermont, and Virginia. Wyoming Republicans are also caucusing on Super Tuesday, but their process does not include a preference poll.

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Trump Takes Nevada By A Landslide; Rubio/Cruz All Tied Up – Live Feed

And the juggernaut rolls on…

 

Most major news wires have already called the Nevada GOP Caucus for Donald Trump (despite only 3% reporting) making it 3 in a row:

  • Trump 42%
  • Cruz 22.8%
  • Rubio 21.8%

Marking Rubio's 4th loss to Trump in a row.

Preliminary entrance polls taken of Republican caucus-goers show that nearly 6 in 10 are angry at the way the government is working, and about half of them supported the billionaire businessman.

Trump was also supported by about 6 in 10 of those who said they care most about immigration, and nearly half of those who said they care most about the economy.

Nevada caucuses winner Donald Trump was supported by 7 in 10 of those who preferred an outsider, according to early results of the entrance poll conducted for the Associated Press and television networks.

And now the speech:

The establishment is gonna need some more huff and puff…

 


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Oil Market Analysis Feb. 23, 2016 (Video)

 

By EconMatters

After short covering Monday, Tuesday pushed the oil market down with no help from OPEC and a Risk Off mode in financial markets. With a bad API report after hours look for weakness ahead of the Department of Energy Report on Wednesday morning.

 

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Multiple Reports of Chaos, Confusion, Possible Fraud in Tonight’s Nevada GOP Caucuses

Donald Trump looks poised to win another victory in Nevada’s GOP caucus, which is beind held this evening. But multiple reports suggest that the vote, which is still ongoing, has been disorganized and chaotic, with some observers suggesting that fraud and foul-play may be involved. The implication is that Donald Trump’s supporters are behind it. 

For example, National Review reporter Eliana Plott has relayed reports that a vote collector at one site has been looking at ballots before stuffing in them in the to-be-counted envelope, holding some ballots in a separate stack.

Plott also tweeted a photo of a vote collector wearing Trump gearing, saying that this is not allowed. 

Other reports have indicated that volunteers are allowed to wear gear showing support for a candidate.

Emily Cahn of Mashable tweeted a report of someone voting twice for Trump. 

And then there’s this: 

Actual Trump supporters? Anti-Trump activists trying to make him look bad? Who knows! 

In any case, Jon Ralston, arguably the most respected reporter in the state, reports that the GOP is looking into it. 

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No Debtors Prison in America–Technically, At Least

Rex Iverson, 45 years old, died after being placed in jail in Box Elder County, Utah, last month.

What had he done, ultimately, that had him facing his last moments on earth in a cage? He had not paid a $2,377 ambulance bill debt from 2013.

He neglected to show up in court regarding a court judgment on the debt, and thus Box Elder County deputy’s took him in to jail last month, where he was found unresponsive in a holding cell that same day and was reported by the Ogden, Utah, Standard Examiner as having died in jail, though the Salt Lake Tribune says he wasn’t declared dead until after he was taken to a local hospital.

His death is still being investigated, but there are no initial foul play suspicions.

The ACLU commented to Ugden, Utah’s, Standard-Examiner today:

“From a procedural point of view, it appears to have been carried out properly in this case,” said John Mejia, ACLU Utah legal director. “But I think we do have concerns there is a larger problem of thousands of these orders issuing from district and justice courts in a process of debt collection in Utah.”….

Statewide in 2015, 3,872 civil bench warrants were issued by Utah district court judges and 1,610 by justice court judges, according to state courts system data.

Each of those warrants could result in a jailing such as that experienced by Iverson, although most civil cases don’t go that far.

As the government’s own Consumer Financial Protection Bureau website explains:

Collections agencies don’t have the legal authority to issue arrest warrants or have you put in jail.

Warning: If a collector has obtained a judgment against you and you ignore an order to appear in court, a judge may issue a warrant for your arrest.

Tip: You should never ignore a court order. If you get a court order to appear, you should go to court and provide any required information. You may want to consult with an attorney to help you with your court appearance.

Heavy.com paints a wider picture of Mr. Iverson’s life, including his parents’ tragic death in car accident, and the fact he apparently had no wages to garnish to pay the debt.

In a Standard-Examiner story from last week, the sheriff didn’t seem thrilled this had happened:

“We go to great lengths to never arrest anybody on these warrants,” Box Elder County Chief Deputy Sheriff Dale Ward said. “But we make every effort to resolve the issues without making an arrest on a civil bench warrant. The reason we do that is we don’t want to run a debtors’ prison. There is no reason for someone to be rotting in jail on a bad debt.”

But the law mandates sheriff’s offices must serve bench warrants issued by the courts, Ward said. Civil warrants are lumped in with all other warrants, including those from criminal cases, as deputies work through to serve them.

A somewhat similar story, not involving a death, circulated last week in which Texas man Paul Aker was alarmed to find armed U.S. Marshals show up at his home because he didn’t show up in court over a very old initially $1,500 unpaid student loan debt. Business Insider has a detailed account, including the Marshals insisting Aker threatened them and a Texas U.S. congressman Gene Green lamenting this practice

I saw people in social network debates up in arms at the implication that debt was what caused the armed Marshal assault. No, failing to obey a court order was the crime.

But it’s like some radical libertarians like to ask as a thought experiment: what’s the penalty for a parking ticket? Why, death. Because failing to pay a parking ticket can set in motion a chain of events where, if you don’t start obeying, people will come with armed force to take you away, and use whatever force might be necessary to make you obey if you resist

I guess it’s up to you where in the chain of causation you decide to lay the blame. You could say Rex Iverson’s death in jail had nothing to do, really, with not paying a debt.

Still, it should give pause to consider how serious the consequences of throwing someone bodily in a cage can be, and wonder about the reasons we have to do it.

I wrote back in 2014 on how the enforcement of petty laws can escalate, especially for the poor, into life-destroying situations. Which can include, as Mr. Iverson learned, death in a cell.

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The Age Of Authoritarianism: Government Of The Politicians, By The Military, For The Corporations

Submitted by John Whitehead via The Rutherford Institute,

“I was astonished, bewildered. This was America, a country where, whatever its faults, people could speak, write, assemble, demonstrate without fear. It was in the Constitution, the Bill of Rights. We were a democracy… But I knew it wasn't a dream; there was a painful lump on the side of my head… The state and its police were not neutral referees in a society of contending interests. They were on the side of the rich and powerful. Free speech? Try it and the police will be there with their horses, their clubs, their guns, to stop you. From that moment on, I was no longer a liberal, a believer in the self-correcting character of American democracy. I was a radical, believing that something fundamental was wrong in this country—not just the existence of poverty amidst great wealth, not just the horrible treatment of black people, but something rotten at the root. The situation required not just a new president or new laws, but an uprooting of the old order, the introduction of a new kind of society—cooperative, peaceful, egalitarian.” ? Historian Howard Zinn

America is at a crossroads.

History may show that from this point forward, we will have left behind any semblance of constitutional government and entered into a militaristic state where all citizens are suspects and security trumps freedom.

Certainly, this is a time when government officials operate off their own inscrutable, self-serving playbook with little in the way of checks and balances, while American citizens are subjected to all manner of indignities and violations with little hope of defending themselves.

As I make clear in my book Battlefield America: The War on the American People, we have moved beyond the era of representative government and entered a new age—the age of authoritarianism. Even with its constantly shifting terrain, this topsy-turvy travesty of law and government has become America’s new normal.

Don’t believe me?

Let me take you on a brief guided tour, but prepare yourself. The landscape is particularly disheartening to anyone who remembers what America used to be.

The Executive Branch: Whether it’s the Obama administration’s war on whistleblowers, the systematic surveillance of journalists and regular citizens, the continued operation of Guantanamo Bay, or the occupation of Afghanistan, Barack Obama has surpassed his predecessors in terms of his abuse of the Constitution and the rule of law. President Obama, like many of his predecessors, has routinely disregarded the Constitution when it has suited his purposes, operating largely above the law and behind a veil of secrecy, executive orders and specious legal justifications. Rest assured that no matter who wins this next presidential election, very little will change. The policies of the American police state will continue.

 

The Legislative Branch:  It is not overstating matters to say that Congress may well be the most self-serving, semi-corrupt institution in America. Abuses of office run the gamut from elected representatives neglecting their constituencies to engaging in self-serving practices, including the misuse of eminent domain, earmarking hundreds of millions of dollars in federal contracting in return for personal gain and campaign contributions, having inappropriate ties to lobbyist groups and incorrectly or incompletely disclosing financial information. Pork barrel spending, hastily passed legislation, partisan bickering, a skewed work ethic, graft and moral turpitude have all contributed to the public’s increasing dissatisfaction with congressional leadership. No wonder 86 percent of Americans disapprove of the job Congress is doing.

 

The Judicial Branch: The Supreme Court was intended to be an institution established to intervene and protect the people against the government and its agents when they overstep their bounds. Yet through their deference to police power, preference for security over freedom, and evisceration of our most basic rights for the sake of order and expediency, the justices of the United States Supreme Court have become the guardians of the American police state in which we now live. As a result, sound judgment and justice have largely taken a back seat to legalism, statism and elitism, while preserving the rights of the people has been deprioritized and made to play second fiddle to both governmental and corporate interests.

 

Shadow Government: America’s next president will inherit more than a bitterly divided nation teetering on the brink of financial catastrophe when he or she assumes office. He or she will also inherit a shadow government, one that is fully operational and staffed by unelected officials who are, in essence, running the country. Referred to as the Deep State, this shadow government is comprised of unelected government bureaucrats, corporations, contractors, paper-pushers, and button-pushers who are actually calling the shots behind the scenes right now.

 

Law Enforcement: By and large the term “law enforcement” encompasses all agents within a militarized police state, including the military, local police, and the various agencies such as the Secret Service, FBI, CIA, NSA, etc. Having been given the green light to probe, poke, pinch, taser, search, seize, strip and generally manhandle anyone they see fit in almost any circumstance, all with the general blessing of the courts, America’s law enforcement officials, no longer mere servants of the people entrusted with keeping the peace but now extensions of the military, are part of an elite ruling class dependent on keeping the masses corralled, under control, and treated like suspects and enemies rather than citizens. In the latest move to insulate police from charges of misconduct, Virginia lawmakers are considering legislation to keep police officers’ names secret, ostensibly creating secret police forces.

 

A Suspect Surveillance Society: Every dystopian sci-fi film we’ve ever seen is suddenly converging into this present moment in a dangerous trifecta between science, technology and a government that wants to be all-seeing, all-knowing and all-powerful. By tapping into your phone lines and cell phone communications, the government knows what you say. By uploading all of your emails, opening your mail, and reading your Facebook posts and text messages, the government knows what you write. By monitoring your movements with the use of license plate readers, surveillance cameras and other tracking devices, the government knows where you go. By churning through all of the detritus of your life—what you read, where you go, what you say—the government can predict what you will do. By mapping the synapses in your brain, scientists—and in turn, the government—will soon know what you remember. And by accessing your DNA, the government will soon know everything else about you that they don’t already know: your family chart, your ancestry, what you look like, your health history, your inclination to follow orders or chart your own course, etc. Consequently, in the face of DNA evidence that places us at the scene of a crime, behavior sensing technology that interprets our body temperature and facial tics as suspicious, and government surveillance devices that cross-check our biometrics, license plates and DNA against a growing database of unsolved crimes and potential criminals, we are no longer “innocent until proven guilty.”

 

Military Empire: America’s endless global wars and burgeoning military empire—funded by taxpayer dollars—have depleted our resources, over-extended our military and increased our similarities to the Roman Empire and its eventual demise. The U.S. now operates approximately 800 military bases in foreign countries around the globe at an annual cost of at least $156 billion. The consequences of financing a global military presence are dire. In fact, David Walker, former comptroller general of the U.S., believes there are “striking similarities” between America’s current situation and the factors that contributed to the fall of Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government.”

I haven’t even touched on the corporate state, the military industrial complex, SWAT team raids, invasive surveillance technology, zero tolerance policies in the schools, overcriminalization, or privatized prisons, to name just a few, but what I have touched on should be enough to show that the landscape of our freedoms has already changed dramatically from what it once was and will no doubt continue to deteriorate unless Americans can find a way to wrest back control of their government and reclaim their freedoms.

That brings me to the final and most important factor in bringing about America’s shift into authoritarianism: “we the people.” We are the government. Thus, if the government has become a tyrannical agency, it is because we have allowed it to happen, either through our inaction or our blind trust.

Essentially, there are four camps of thought among the citizenry when it comes to holding the government accountable. Which camp you fall into says a lot about your view of government—or, at least, your view of whichever administration happens to be in power at the time.

In the first camp are those who trust the government to do the right thing, despite the government’s repeated failures in this department.

 

In the second camp are those who not only don’t trust the government but think the government is out to get them.

 

In the third camp are those who see government neither as an angel nor a devil, but merely as an entity that needs to be controlled, or as Thomas Jefferson phrased it, bound “down from mischief with the chains of the Constitution.”

 

Then there’s the fourth camp, comprised of individuals who pay little to no attention to the workings of government, so much so that they barely vote, let alone know who’s in office. Easily entertained, easily distracted, easily led, these are the ones who make the government’s job far easier than it should be.

It is easy to be diverted, distracted and amused by the antics of the presidential candidates, the pomp and circumstance of awards shows, athletic events, and entertainment news, and the feel-good evangelism that passes for religion today. What is far more difficult to face up to is the reality of life in America, where unemployment, poverty, inequality, injustice and violence by government agents are increasingly norms.

The powers-that-be want us to remain divided, alienated from each other based on our politics, our bank accounts, our religion, our race and our value systems. Yet as George Orwell observed, “The real division is not between conservatives and revolutionaries but between authoritarians and libertarians.”

The only distinction that matters anymore is where you stand in the American police state. In other words, you’re either part of the problem or part of the solution.


via Zero Hedge http://ift.tt/21euh03 Tyler Durden