Decriminalization Is Only Feminist, Humane Response to Prostitution, Says Amnesty International

After nearly a year of contentious and high-profile debate from concerned parties, the worldwide human-rights organization Amnesty International has released its official policy paper on sex-worker rights, which calls for the global decriminalization of adult prostitution. The main focus of the document is identifying “the most prominent barriers to the realization of sex workers’ human rights and underlin[ing] states’ obligations to address them.” Among these obligations: 

  • Repeal existing laws and refrain from introducing new laws that criminalize or penalize directly or in practice the consensual exchange of sexual services between adults for remuneration;
  • Refrain from the discriminatory enforcement against sex workers of other laws, such as those on vagrancy, loitering, and immigration requirements;
  • Ensure the meaningful participation of sex workers in the development of law and policies that directly affect their lives and safety; 
  • Refocus laws away from catch-all offences that criminalize most or all aspects of sex work and towards laws and policies that protect sex workers’ health and safety and that oppose all acts of exploitation and trafficking in commercial sex (including of children); 
  • Ensure that there are effective frameworks and services that allow people to leave sex work if and when they choose; and 
  • Ensure that sex workers have equal access to justice, health care and other public services, and to equal protection under the law.

Read the whole policy here. It was “developed in recognition of the high rates of human rights abuses experienced globally by individuals who engage in sex work; a term that Amnesty International uses only in regard to consensual exchanges between adults,” states Amnesty at its start. And consent is emphasized throughout the document, with Amnesty pointing out that understandings of consent in the context of sex work must prioritize “the views, perspectives and experiences of individuals selling sex.” While that might not sound terribly radical, people engaged in prostitution have long been stereotyped by police, government agents, and clients as either “always consent[ing] to sex (because they may engage in sex frequently for their work) or, conversely, that sex workers can never consent to sex (because no one could rationally consent to selling sex).” 

Amnesty concludes that laws criminalizing commercial sex between consenting adults have “a foreseeably negative impact on a range of human rights,” including “the rights to life, liberty, autonomy and security of person; the right to equality and non-discrimination; the right to be free from torture or cruel, inhuman or degrading treatment or punishment; the right to privacy… [and] the right to freedom of opinion and expression.” Furthermore, criminalization “creates an environment where law enforcement officers and other officials can perpetrate violence, harassment and extortion against sex workers with impunity.” And because sex workers fear violence and arrest by police, they are leery of reporting crimes against themselves or others in their community, offering “impunity to perpetrators of violence and abuse.” 

The response in media and among activists has been predictably mixed (and heated). 

The group formerly known as Morality in Media put out a press release accusing Amnesty of “defending pimps and sex traffickers,” despite Amnesty’s strong condemnation of any forms of sex work that involve violence or non-consent. Socialist feminist Laurie Penny called Amnesty’s decision “great news,” but also complained that instead of focusing on sex work as a specific entity, we should be focusing on “the abolition of work in general.” Professor Allison Bass, author of the 2015 book Getting Screwed: Sex Workers and the Law, wrote at the Huffington Post that “my hat’s off to Amnesty for having the guts to stand up and shout the truth. I hope that some day the state and federal governments in this country will listen.” As for the word on Twitter… 

In addition to the policy reccomendation, Amnesty International released four location-specific sex work reports on Wednesday: 

The Norway report has been getting the most attention, due the fact that Norway’s model of punishing prostitution clients more harshly than those selling sex (also known as the Swedish model) has become popular far outside Scandinavia. Canada adopted a similar model in 2014, and perversions of the model have made their way to various parts of the U.S. as well. 

“The legal model adopted by the Norwegian government is promoted as one that encourages protection of people who sell sex, shields them from criminalization and instead shifts the criminal burden of blame to buyers of sex,” states the Amnesty report on Norway. But this isn’t how things work in practice found researchers after interviewing an array of Norwegian sex workers, lawyers, government officials, and social -ervices workers. In fact, human rights abuses against people who sell sex in Norway “are compounded by and, in some cases, directly caused by the legal framework” there. 

“The claims that individual sex workers are not criminalized or penalized under the ‘Nordic Model,'” are simply untrue, according to the organization’s research. “Oslo police have over the last decade adopted a ‘preventative policing’ approach to sex work which involves the enforcement of lower level offences as ‘stress methods’ to disrupt, destabilize and increase the pressure on those operating in the sex sector. One academic researcher describes how police sources ‘in Oslo often use terms like they are going to ‘crush’ or ‘choke’ the [prostitution] market, and unsettle, pressure and stress the people in the market’. Amnesty International has also found that many sex workers remain subject to a high level of surveillance by police,” in part so police can identify sex buyers in order to fine them.

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Is Bernie Sanders Really Going “Scorched Earth” on Hillary Clinton or Is She Just a Terrible Candidate?

P.U.M.A.The conventional wisdom among staunch Democrats and much of the elite liberal commentariat is that the once-lovable insurgent campaign run by Vermont’s most famous democratic socialist, Sen. Bernie Sanders, is well past its sell-by date, and that it’s time for him to embrace “party unity” and convince his supporters to vote for Hillary Clinton. 

The Washington Post‘s Eugene Robinson says he “shares much of Sanders’ political philosophy” but that by keeping his word to his supporters that he will stay in the race until the nomination is clinched by someone (which means until the Democratic National Convention in July, because superdelegates don’t cast their votes until then), Sanders is playing a “dangerous game.”

Like Robinson, Slate‘s Jamelle Bouie describes Sanders’ bucking of the establishment as a “scorched earth” endeavor. Also in the Post, Dana Milbank compares Sanders to that all-time Democratic boogeyman who had the audacity to challenge the two-party system: Ralph Nader.

The anxiety of mainstream Democrats will surely be exacerbated by Sanders’ full-court press in California, where he continues to draw huge crowds, and where a primary victory for Sanders still wouldn’t put him in reach of the nomination but would provide all the argument he needs to continue his efforts to radically transform the Democratic Party.

A recent article in the New York Times suggests that Sanders’ “newly resolute attitude” is “the cumulative result of months of anger at the national Democratic Party over a debate schedule that his campaign said favored Mrs. Clinton; a fund-raising arrangement between the party and the Clinton campaign; the appointment of fierce Clinton partisans as leaders of important convention committees,” among other things.

Sanders’ deliberately outside-the-party-mainstream campaign intends to wring every last drop of legitimacy it can squeeze out of the primary process. Which is why in Kentucky the secretary of state agreed to his campaign’s request for a recanvass of all the voting machines and absentee ballots in the state. In the best case scenario for Sanders, all this effort will net him is a single additional pledged delegate. 

It’s no secret that Sanders, his staff, and many of his supporters feel no sense of loyalty to a party he is only nominally (maybe?) a part of. Unsurprisingly, this makes party loyalists both angry and uncomfortable, because they need Sanders’ legion of voters to stay within the party’s tent and turn out on Election Day in November.

But what really makes Democrats nervous is that Sanders has revealed something they don’t want to admit: Hillary Clinton is bad at political campaigning. 

This is the fourth political campaign Clinton has run, but only the second time she’s faced a challenger backed by a significant constituency. In 2000, she ran for Senate against Rep. Rick Lazio, who had to scramble his bid together rather late in the process after then-New York City Mayor Rudy Giuliani aborted his prospective run due to prostate cancer. Former Yonkers Mayor John Spencer was the sacrificial lamb thrown to the wolves by the state Republican Party in 2006, when he lost to Clinton by 36 percentage points. And we all know how Clinton’s “inevitable” run for the presidential nomination went in 2008.

But at least in 2008 defeated Clinton supporters could comfort themselves in the knowledge that they lost to Barack Obama — a young, handsome, gifted orator with the chance to make history as the first African-American president. This time around, the fact that their candidate has had to vigorously compete with a gruff and unkempt protest politician — one with no record of success getting legislation passed, a history of praising communist dictators, and a disquieting lack of interest in foreign policy — is truly infuriating to Team Clinton. 

Recent polling puts Clinton’s unfavorables at near-Trump levels, and she was also perceived as not “honest and trustworthy” by 64 percent of those polled by CBS News and the Times. It’s really a stretch to pin those kind of numbers on Sanders, who has only been on the national scene for about a year. Clinton, on the other hand, has been a national figure for 25 years, and during that time she has made her own legacy, which most people clearly do not view with the same rose-colored glasses donned by her supporters.

Moreover, for all the recent rancor between the two Democratic candidates’ campaigns, Sanders hasn’t been especially hard on Clinton directly. He could have gone after her “damn emails,” but early on stated he wouldn’t and has kept that promise. A “scorched earth” candidate would surely make an issue out his opponent’s ongoing FBI investigation, and you can be sure Donald Trump will not be so deferential.

All the hand-wringing over a protracted primary fight that will supposedly damage the party’s prospects in the general election appears to be much ado about nothing. 

The Times‘ polling shows 72 percent of Sanders’ supporters say they’ll vote for Clinton if she’s the nominee, and that number that will almost certainly continue to rise once the bloodletting of the general election begins. The Times also reports, “fewer than half of Democratic voters say their party is divided, and eight in 10 are hopeful about its future. More than eight in 10 think Mrs. Clinton can unite the party after the primaries end next month.”

The political horserace often turns otherwise rational thinkers into superfans, and the civil wars of party primaries are almost always the bloodiest battles. But for all the bluster of the #ImWithHer and #BernieorBust crowds, it’s not a prolonged nomination process that’s likely to hurt the party in November, it’s the fact that Hillary Clinton’s biggest liability on the campaign trail is always Hillary Clinton.

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Brexit Bets Surge At Bookies Despite Cable Strength

Cable has strengthened notably in the last week or so as Cameron and Osborne unleashed phase 2 of "project fear" and 'some' Brexit polls suggested market fears of a 'leave' decision were overblown. However, the broad polls still show the decision is too close to call, which is why the news from Ladbrokes – Britain's largest bookmaker – that they have seen a sudden surge in Brexit bets in the last few days. Interestingly, sterling has started to leak lower today…

As WSJ reports, some analysts point out that political polls and betting have called British political events incorrectly before, and that sentiment in referendums can swing in the closing days of campaigning.

“In the early months of this year, there was a big selloff in Brexit-related stocks,“ said James Ross, who manages Henderson Global Investors’ U.K. Alpha Fund.

 

”But since around the turn of this month we’ve seen a rapid reversal, and complacency has reached a bit of a dangerous level.”

A few cherry-picked headline polls and Cable has surged 4 handles as confidence that Brexit will not happen lifts…

 

But while that has become the narrative for the mainstream, professionals have been hedging Sterling volatility at a record level…

As Bloomberg reports, investors are now paying a record premium to hedge against the pound’s fluctuations over the next month as risks surrounding the U.K. referendum on European Union membership persist. Sterling’s one-month implied volatility versus the dollar has surged to 7.83 percentage points relative to historical swings, from 2.56 yesterday.

 

Which is odd because the aggregate polls now have Brexit a higher probability than Bremain…

 

And as far as people putting their money where their mouth is – Ladbrokes not a huge increase in th eproportion of money being bet on Brexit…

Source: @LadPolitics

 

While we assume The Fed will be carefully watching the polls – desperate for another excuse to hold for one more month – we suspect the surge in cable of the last week was more squeeze than faith in Bremain, and as Automatic Earth's Raul Ilargi Meijer notes, the Euro is just 15 years old, but the EU goes back many decades. Strategic positions have long been taken in trenches that have long been dug. Is that the fight you want to fight? There’ll always be a Europe, but there’s nothing inevitable or incontrovertible about the EU, or about Brussels being its capital. All it takes is perhaps for one country to say “Thanks, but no, thanks.” The EU for all its bluster is very vulnerable.

So there’s your voting options. But it should be clear that the Brexit vote is headlined by the wrong people, for all the wrong reasons, and with all the wrong arguments. It can’t be exclusively about money, but it is. And if the Unholy Union falls apart sometime further down the line regardless, a vote for Remain on purely financial grounds will take on a whole different light: wasted energy, wasted money, wasted morals.

 

Besides, nobody knows what the -financial- effects of a Brexit will be, and any claims that are made to the contrary are just guesses based on whatever political -career- preferences the person or institution making them has. ‘Things’ ‘could’ crash on Trump victories and they could crash on Brexit, but any numbers attached to these potential events are 100% made up. It’s hilarious to see Treasurer George Osborne declare with a straight face that a Brexit would cause UK home prices to fall by 18%, but that’s all it is.

 

First question is: you sure it’s not 18.5%? What genius advisor came up with that number? Or did they have a committee of wise men in a week-long cigar-fueled brainstorming session that split their differences? Second question: do you guys realize that falling home prices are exactly what at least half of Britain is looking for? That distorting your real estate market to the extent that nobody can afford a home anymore is a dead-end street that kills cities and communities and people in the process?

 

I should stop here right? I can write a book about this, not because Brexit is such a huge subject (just see if anyone in Europe cares), but because the EU is such a yuuge disaster, and there will be many more opportunities to return to the topic. I have tons more little notes scribbled down, and a flood more crazy claims and comments will be made by various parties in the ‘fight’. Just wanted to say that this whole ‘debate’ -if you can call it that- has so far been very different from what it should have been.

Why would you want to belong to a team like the EU? I know that Cameron does, and so does Corbyn, but none of that is reason you should too. Nor should you want to ‘Leave’ because Boris Johnson wants to. You need to look out over the whole landscape. But that’s just me.

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ALL ETFs Are Complete Garbage (Video)

By EconMatters

 

We Review the relative short term performance of the USO ETF in tracking the Oil Futures market, and it fails miserably as a proxy for the oil market.

The existence of these failed class of instruments is enabled by the reluctance of brokerages to offer futures contracts to their clients. How long has Fidelity had their customers investing in these garbage proxies through the years because they had no other options within their brokerage services. It is about time regulation shuts these garbage instruments down.

If you are going to offer a product or service, basic competency is a must, especially as an investment vehicle as it is hard enough to just get the direction right of an asset, an investor doesn`t need the additional stress of having the investment instrument itself being flawed.

Especially when the SEC has had 10 years in the case of the USO to review the performance of this ETF, and close it down due to massive incompetence as an acceptable proxy for the oil market. This goes the same for all the other boatload of ETF offerings of the last 15 years, where have the regulators been in the review process?

The obvious takeaway is that investors can never count on regulators, exchanges, members of the investment community, etc. to protect their interests. Just assume that everyone out their is trying to scam you as an investor, distrust everything, Caveat Emptor – Let the Buyer Beware. Just assume that you are the mark at the investing table so to speak, and avoid being the sucker by being highly skeptical of every investment vehicle until proven otherwise.



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Donald Trump Unveils Energy Plan – Live Feed

Donald Trump will head to the heart of America’s oil and gas boom on Thursday to unveil details of his policies on energy and the environment. As NYTimes reports, speaking at an oil industry conference in Bismarck, N.D., Mr. Trump is expected to embrace standard Republican calls for more fossil fuel drilling and fewer environmental regulations, while possibly elaborating on his positions on climate change. Having vowed to "get those miners back to work," and "get rid of [EPA] in almost every form," this is the first time since becoming the presumptive nominee that Presidential candidate Trump has a platform for a policy speech… we are sure Clintonites will be listening intently.

 

Live Feed… (Trump is due to start at 1400ET)

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Are People Confused About What the Label ‘Transgender’ Signifies?

Rainbow flagExactly how many Americans identify as a different gender than the one they were labeled as at birth? In fact, no one knows.

Both government and private-sector researchers have been trying to improve their methods of measuring the number of gay, lesbian, bisexual, and transgender people—not to mention the increasing cadre of mostly young people who identify as something else altogether, like “genderfluid” or “non-binary.” But it’s tough, in part because the language isn’t always established enough to allow pollsters to craft a question that will clearly convey to survey respondents what is being asked.

GfK, a big German market research firm, has been working with its web survey platform, Knowledge Panel, to try to get at the answer, explained Frances M. Barlas a couple of weeks ago at the American Association of Public Opinion Research (AAPOR) annual conference in Austin. What GfK’s research team has found is that some people appear not to be clear on what the word transgender even means.

In 2010, the company conducted an online survey in which 1.1 percent of respondents answered that they were trans. That seemed high compared to previous estimates; the leading expert on measuring the GLBT community, UCLA’s Gary Gates, for example, guesses that trans people make up more like one-third of a percent of the population.

Indeed, Barlas’ colleagues found that when they followed up with the group who initially identified that way, just 30 percent re-confirmed their response. “That’s troubling,” she said during the panel: Generally, a confirmation rate of even 80 percent suggests a question isn’t doing a good job of measuring what it’s supposed to.

When the researchers dug further, asking the respondents who initially answered that they were transgender how they would define the term, quite a few of them gave answers that Barlas and her team deemed “incorrect.” Some knew, of course, that it signifies that a person’s gender identity differs from the sex on their original birth certificate. (That’s more or less right.) But a lot of the people who had initially said they were trans replied to the definition question by saying they didn’t know what the word meant. Still others conflated it with different concepts.

“A good number of folks thought it meant something along the lines of being straight or attracted to the opposite sex,” she said. “Some [said] bi-sexual or intersex. And then kind of a mix of other answers, like ‘someone who is content with their sex’ or ‘darned if I know but I assume it means my ability to work with both genders.'”

It’s just another reminder that trans issues aren’t just not a top priority for many Americans—in some cases, they’re not on the radar at all.

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Furious China Slams “Irrational” US Trade War, Warns “Will Take Steps”

The main reason stocks in the steel sector are on fire today is because overnight the Commerce Department escalated its trade war with China when it implemented the latest clampdown on a glut of steel imports, when it announced that corrosion-resistant steel from China will face final U.S. anti-dumping and anti-subsidy duties of up to 450%. The final U.S. anti-dumping duties on the Chinese products replace preliminary ones of 256% issued in December 2015.

The department also issued anti-dumping duties of 3 percent to 92 percent on producers of corrosion-resistant steel in Italy, India, South Korea and Taiwan.

The duty hit producers of the flat-rolled steel, which is coated or plated with zinc, aluminum or other metals to extend its service life, with anti-subsidy duties in China, South Korea, Italy and India. Taiwan was exempted.

This follow last week’s 522% duty imposed by the US on cold-rolled steel imports from China used in automobiles and other manufacturing, which led to the latest angry rebuke from Beijing: “There’s too much trade friction and it’s not good for the market,” Liu Zhenjiang, secretary general of the China Iron and Steel Association told Reuters when asked if China will appeal U.S. anti-dumping duties at the World Trade Organization. “High taxes are unfair …. China doesn’t have a large market share in the United States,” Zhang Dianbo, deputy general manager at Baosteel Group, said recently during a Singapore conference.

Fast forward to today when China escalated the war of words.

Cited by Reuters, China’s Commerce Ministry said it was extremely dissatisfied at what it called the “irrational” move by the United States, which it said would harm cooperation between the two countries.

China will take all necessary steps to strive for fair treatment and to protect the companies’ rights,” it said, without elaborating.

An employee talks on his mobile phone near stacks of rebar at
Shanxi Zhongsheng Iron and Steel in Fenyang, Shanxi Province

China has come under increasing fire from industrialized countries worldwide that have accused it of dumping steel at prices far below production costs to avoid cutting excess capacity in the sector, which faces slowing demand at home. 

Beijing has insisted that it would eliminate 100 million to 150 million tons of annual capacity and said last week it would persist with a steel tax rebate plan to support the sector’s restructuring; it has so far failed to do that and instead as a result of the recent credit deluge Chinese production and exports have soared. 

The increasingly more noisy steel trade war has grown into a major irritant as senior U.S. and Chinese officials prepare for bilateral economic and foreign policy meetings in Beijing in early June.

A laborer marks steel bars at a steel factory in Huai’an, Jiangsu province

What is more notable in this escalating war of both words and trade duties is that it comes at a time when none other than China has right of first refusal to hinder the Fed’s rate hiking intentions (if indeed such exist). As Deutsche Bank explained yesterday, a rate hike in June or July will be up to China: should the Yuan proceed to slide in a repeat of what happened in August and December, the Fed may be forced to postpone its rate hike once again.

* * *

Meanwhile, the US shows no relent in its trade war with China: the Commerce Department issued anti-dumping duties of 210% on all Chinese-produced corrosion resistant steel. Final anti-subsidy duties ranged from 39 % for many producers to 241% for some of the largest ones including Baosteel, Hebei Iron & Steel Group and Angang Group.

Life for China’s exporters is only going to get more difficult: the European Union launched its own investigation of Chinese steel exports two  weeks ago following protests by steelworkers. In Britain, Tata Steel cited low-cost Chinese competition when it announced plans last month to sell money-losing operations that employ 20,000 people.

And just to assure that this is nowhere near the end of the ongoing trade wars, China pushed back against its trading partners in April, announcing anti-dumping duties on steel from the European Union, Japan and South Korea.

Will China merge its ongoing trade war with the just as violent currency war which prevented the Fed from hiking rates so far in 2016, when the tumbling Yuan resulted in two separate S&P500 swoons? The answer will be made apparent with every CNY fixing over the next month and the PBOC’s subsequent intervention in the offshore CNY market. What makes this particular reaction by China especially interesting is that it comes in the aftermath of the Shanghai Accord: will the tentative agreement ironed out between the central banks to not create too much FX volatility be respected, or will China do what the US has been warning Japan against for the past month, and proceed by breaching the ongoing currency ceasfire?

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Does Title IX Prohibit Sexual Harassment in College, But Require It in Locker Rooms?

ShowerThe federal government is trying to have it both ways. Either Title IX—a federal statutes prohibiting sex discrimination in schools—requires educational institutional to prevent sexual harassment on a subjective basis, or it doesn’t. 

Here’s the problem: the Obama administration has issued guidance to schools asserting that they should accommodate the needs of transgender students, and that said accommodations are required by Title IX. Schools must allow kids to use the facilities that correspond with their gender identity—their stated gender preference—rather than their biological sex. 

This is an obviously strained interpretation of Title IX. For reference, here’s what the statute says: “No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.” 

Gender and sex are obviously not the same thing, so the fact the federal government is construing sex to mean gender strikes me as a straightforwardly incorrect interpretation of the statute. 

That’s not all. The government’s guidance on trans kids and bathrooms—which I would support, in some form, if the administration was not torturing the law to produce it—simply contradicts its guidance on sexual harassment. 

The Education Department has informed colleges that Title IX requires them to protect their students from sex-based discrimination, violence, and sexual harassment. It has also opined that harassment need not be objectionable to a reasonable person to qualify, and it need not be severe and pervasive. Harassment, the guidance suggests, is based on the subjective feelings of the victim. 

For example: sexually-suggestive jokes are routinely reported to college administrators as examples of sexual harassment. 

Here’s where the contradiction lies: If sexual jokes could be said to be a form of sexual harassment under Title IX, isn’t it obviously the case that forcing someone to share a locker room with a person of the opposite biological sex is also a form of sexual harassment? Remember, under the government’s guidance, harassment is in the eyes of harassed, even if it seems silly to an objective third-party. 

Harvard University Law Professor Jeannie Suk highlighted this inconsistency in a recent New Yorker piece: 

But there is also a growing sense that some females will not feel safe sharing bathrooms, shower rooms, or locker rooms with males. And if a female student claimed that a bathroom or locker room that her school had her share with male students caused her to feel sexually vulnerable and created a hostile environment, the complaint would be difficult to dismiss, particularly since the federal government has interpreted Title IX broadly and said that schools must try to prevent a hostile environment. This is not wholly hypothetical. Brandeis University found a male student responsible for sexual misconduct for looking at his boyfriend’s genitals while both were using a communal school shower. The disciplined student then sued the school for denying him basic fairness in its disciplinary process, and a federal court recently refused to dismiss the suit. 

Continuing to have segregated bathrooms could also put schools in a bind on Title IX compliance. According to the federal government, a transgender girl who is told to use the boys’ locker room, or even a separate and private stall, instead of the girls’ facility, has a claim that the school is violating Title IX. A non-transgender girl who’s told she must share a locker room with boys may also have a claim that the school is violating Title IX. But would she not have a similar claim about having to share with students who identify as girls but are biologically male? Well, not if her discomfort and “emotional strain” should be disregarded. But this week, in a letter, dozens of members of Congress asked the Attorney General and the Secretary of Education to explain why they should be disregarded. The federal government is putting schools in a position where they may be sued whichever route they choose. (Catherine Lhamon, the assistant secretary for Civil Rights at the Department of Education, declined to comment on this issue.) 

I covered the Brandeis case that Suk is referring to here. Like Suk, I’m concerned that the government is putting schools in the impossible position of having to accommodate the mutually exclusive needs of students. 

But this is what happens when the executive branch ignores the legislative process and instead broadens the scope of an existing law without any input from the public or Congress. 

As my colleague Scott Shackford reports, several states are now suing the feds for forcing them to follow a strained interpretation of Title IX. I have no doubt that much of this opposition to following the law stems from societal animosity to trans people, who fully deserve equal rights, equal treatment, and dignity. I’m generally in favor of letting trans kids use the locker room that makes them more comfortable, as long as schools retain the ability to prevent genuine disruptions and misuse of the policy. But the uncomfortable truth is that the states are right: the federal government’s Title IX guidance is reckless, inconsistent, and legally flawed. 

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“Buying Here Is Like Picking Pennies In Front Of A Steamroller” – 10 Reasons To Be Bearish From Credit Suisse

Just like the ongoing fascination with $50 oil, everyone wants to know if the S&P will rise above the psychological level of 2,100 (or hit Jeff Gundlach’s “all green” level of 2,200). To be sure, this comes at an awkward time for the big banks, many of whom, Goldman and JPM most notably, have recently warned that the market is either poised to drop, or that every rebound in the S&P should be actively sold (something both the smart money and retail investors have been doing aggressively and as buybacks have trickled down in recent weeks, many are wondering who is buying).

Today, JPM seems to relent modestly on its recent macro pessimism, and notes that for the very near-term, the debate may lean (very slightly) in the favor of bulls for two specific reasons: 1) China appears to be pursuing a strategy of relative CNH/CNY stability (i.e. very orderly and gradual weakening) and 2) investor sentiment remains bearish and skeptical. 

However, JPM adds, the latter tailwind has lessened (in fact many are beginning to think the SPX will continue squeezing to >2100) and China remains a risk (Chinese financial officials will apparently press their American counterparts on the Fed’s tightening schedule during the upcoming June 6-7 economic summit between the two countries).  Meanwhile, valuations can’t be ignored (they are stretched at present levels).  To justify a sustained move through 2100 one needs confidence in a $130+ EPS number for ’17 and clarity on the big outstanding macro issues (what fiscal and monetary policy levers does Japan pull?  Does the Fed hike in the summer?  Who wins the US presidency in Nov?) and neither is likely for the time being.

* * *

Then, to balance out JPM’s modest bullish tone, Credit Suisse chimed in with a handy list of 10 key reasons why investors and traders should be cautious. Here they are.

  1. Little margin for error.  Multiples are elevated and the economic/earnings cycle is aging – this means the margin for error is small and shrinking and thus chasing the SPX at 2100+ is akin to “picking up pennies in front of a steamroller”. 
  2. The Fed is a risk.  Expectations for a June or Jul hike have risen but there is still a lot of uncertainty about how FOMC policy will play out this year and the implications 1-2 tightening steps would have on FX, growth, equities, etc.
  3. Central banks are no longer helping.  Central banks have adopted the Hippocratic Oath when it comes to policy: “do no harm”.  But they no longer can provide material upside support as policy returns diminish (and policy mistakes are still possible, something evidenced by the BOJ NIRP decision on 1/29).  Thus while CBs can help forestall sharp sell-offs, they aren’t equipped right now to drive fresh highs. 
  4. Global growth likely won’t accelerate in the coming year.  US economic momentum looks better than the Q1 numbers suggested but GDP still can’t break sustainably above 2%.  Meanwhile, China growth trajectory appears to have lost some steam in Q2.    
  5. The US political outlook is very uncertain.  Early polls show Trump and Clinton running very close (and Clinton meanwhile is still battling a two-front war w/Sanders staying in the race while her email problems won’t go away).  The GOP majority in the House is likely safe but the Senate is very much up for grabs. 
  6. The US isn’t the only country to face political uncertainty thus year – potential Japanese snap elections, Brexit 6/23, Spanish elections 6/26, Australia election 7/2, Italy constitutional reform referendum in Oct, etc. 
  7. Valuations aren’t cheap.  2016 isn’t even half over and thus investors can’t simply shift to 2017 forecasts just yet and on estimates for this year valuations are stretched.  Meanwhile investors should be hesitant to take at face value the current ’17 consensus of ~$130+ (note that at this time last year the consensus called for $130 in ’16 EPS). 
  8. GAAP and non-GAAP differential is widening.  SEC officials have been growing more vocal about the bourgeoning chasm between GAAP and non-GAAP earnings and this will likely become a growing issue going forward.  Equity valuations become significantly more expensive on GAAP numbers. 
  9. Regulatory scrutiny could make mgmt. teams reticent to engage in large M&A.  Regulatory opposition has killed a number of big deals including TMUS/S, CMCSA/TWC, AMAT/Tokyo Electron, SYY/US Foods, GE/Electrolux, ODP/SPLS, HAL/BHI, PFE/AGN, and more. 
  10. Impaired liquidity conditions – this problem has been felt most acutely in HY but even the world’s most liquid markets (like Treasuries and FX) are suffering problems too.  

Just to be balanced, Credit Suisse also shared its reasons to be bullish, key among which was the following:

  • Valuations aren’t crazy (esp. on ’17 numbers).  On ’16 consensus EPS forecasts, multiples are rich (consensus range is ~$120-123 – at $123 the current PE is ~17x).  But on ’17 numbers valuations aren’t ridiculous.  Thomson is penciling in ~$130.70 in ’17 EPS while the Bloomberg estimate is higher at $133.  On $130 the current PE is 16x.

Well, yes, and here’s why on a 2017 basis valuations are not crazy: because somehow consensus is convinced that in 2017 earnings can soar by 14% – this would be the biggest rebound in non-GAAP EPS since the crisis.

Meanwhile, GAAP earnings are < $90 and at a level last seen in 2010, when the S&P was 500 points lower.

The other reason is far more realistic, even if it directly contradicts point #3 from the bearish list above:

  • Equities could become a larger component of BOJ and ECB policy.  The BOJ is already buying equities but will prob. ratchet higher its purchases at either the June or Jul meeting.  The ECB is on hold for now but could very well wade into stocks should inflation trends not pick up (this was discussed in a recent Reuters article http://goo.gl/otAk8y).      

Why of course: when it becomes a matter of overt policy (as opposed to “conspiracy theory”) that activist central banks are in the business of putting short sellers out of business, that will surely be the moment to go all in the “market.”

via http://ift.tt/1qM3nvz Tyler Durden