Meet the Conservative Federal Judge Who May Force SCOTUS to Rule on Gay Marriage

Speaking last month at the University of Minnesota Law School,
Justice Ruth Bader Ginsburg told the audience that there was

“no urgency”
compelling the Supreme Court to rule on gay
marriage because the lower courts had not yet split over the issue.
Indeed, since the Supreme Court ruled against the Defense of
Marriage Act in 2013, no federal appeals court has voted to sustain
a state ban on same-sex unions.

But as University of Minnesota
law professor Dale Carpenter
explains at SCOTUSblog
, that unbroken streak may soon be coming
to an end thanks to a looming decision by the U.S. Court of Appeals
for the 6th Circuit, which is set to rule on gay marriage bans in
Ohio, Kentucky, Michigan, and Tennessee. “The judge sitting in the
middle of the Sixth Circuit panel on August 6 was Jeffrey Sutton, a
careful and smart conservative jurist appointed by President George
W. Bush and confirmed by the Senate in 2003. He is widely seen as
the swing vote on the panel, with one judge a likely vote to strike
down the state bans on same-sex marriage (Martha Craig Daughtrey)
and one judge likely to uphold them (Debra L. Cook).” Thus,
Carpenter notes, “the next step in the controversy over same-sex
marriage likely depends on Sutton.”

How might Judge Sutton vote? Carpenter argues that there is a
real chance he will lead the 6th Circuit in upholding the gay
marriage bans, thereby creating “a circuit split, practically
guaranteeing review in the Supreme Court.” Carpenter explains:

The Sixth Circuit could write a decision rebutting the numerous
constitutional grounds for same-sex marriage, including equal
protection and due process. It could try to explain why encouraging
opposite-sex couples to procreate responsibly depends on excluding
same-sex couples from marriage. It could try to clarify why
children are best raised in homes where their parents are married
while the parents of their best friends are not. It could hold that
despite a history of horrendous and invidious discrimination the
courts should not view anti-gay discrimination with any special
suspicion.

Sutton might also uphold the gay marriage bans as an act of
judicial deference, the legal philosophy which says that the courts
should give lawmakers the benefit of the doubt and therefore rarely
strike down democratically enacted statutes. After all, the last
time Sutton found himself at the center of a roiling national
debate over the wisdom of a controversial piece of legislation, he
voted to sustain the law in part on those very grounds.

What case was that? It was Sutton’s 2011 opinion in Thomas
More Law Center v. Obama
, in which the 6th Circuit upheld
the constitutionality of the Patient Protection and Affordable Care
Act, aka Obamacare. According to Sutton, the great legal battle
over President Obamas health care law is “just as
stirring, no less essential to the appropriate role of the National
Government and no less capable of political resolution” than the
debate over the constitutionality of the Second Bank of the United
States at issue in McCulloch v. Maryland (1819). And in
that foundational case, Sutton observed, “the Supreme Court erred
on the side of allowing the political branches to resolve the
conflict.” Similarly, he declared, the fate of Obamacare should be
decided by “the peoples’ political representatives, rather than
their judges.”

Many gay marriage advocates were surprised and disappointed this
week when the Supreme Court
refused
to take up any new gay marriage cases. Judge Sutton may
soon provide the circuit split that SCOTUS (and everyone else) is
waiting for.

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Energy Stocks Are Crashing As WTI Plunges Under $85

Just yesterday evening, the exuberance was palpable (in stocks)… today, with WTI collapsing (under $85) to 18-month lows, Energy stocks are being monkey-hammered across the board (S&P Energy sector -4% from yesterday highs)…

 

As oil prices collapse…

 

and the curve flattens drastically…

 

So Energy stocks are in freefall…

 

But but but the Shale Revolution!!??

 

Quick grab the cost curve charts…




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Goldman On Q3 Earnings: “Expect Disappointing Revenue Results And Negative EPS Guidance”

To everyone expecting material upside surprise in terms of company earnings, guidance, balance sheet improvement, and/or capital spending, Goldman has one word: don’t.

As Goldman’s Amanda Sneider says, expect disappointing revenue results and negative EPS guidance. The reason: weaker macro data and dollar  strengthening increase the likelihood of sales misses. Goldman also anticipates increased negative earnings guidance as companies quantify the FX headwind. The one positive offset, if not for energy companies, is that the net impact of oil changes on index-level EPS tends to be modest as firms benefit from lower input costs.

The key concerns according to the squid:

There are only two topics on the minds of investors as we enter the 3Q earnings season: the dollar and oil prices. The EUR/$ weakened 8% during 3Q 2014 following a weaker Euro area outlook and additional easing measures. Brent crude fell 16% during the quarter, with the average price in 3Q 2014 6% below the 2Q 2014 average. Analysts slashed energy EPS estimates, and weaker Euro area growth prompted estimate cuts in other sectors.

 

In the near term, we expect the stronger dollar will lead to a disappointing quarter for revenues and increased negative earnings guidance. The net impact of lower oil prices on index-level earnings tends to be modest as other sectors benefit from lower input costs even though Energy earnings decline.

 

Like this preview, we expect managements will address regional growth prospects, FX headwinds, and oil costs in 3Q 2014 earnings conference calls.

 

We believe domestic-facing stocks will be less likely to miss estimates relative to those with Western Europe revenue exposure. We recommend investors buy a portfolio of the most domestic-facing S&P 500 stocks (Bloomberg ticker: GSTHAINT) versus stocks with the most Western Europe revenue exposure (GSTHWEUR).

 

In the longer term, US and global growth are more important to our earnings model than currency or oil prices. Economic growth changes associated with moves in the dollar or oil prices will have a greater impact on our EPS estimates than the moves themselves.

 

The bottom-up consensus estimate for 3Q 2014 is now $29.02, implying 8% growth versus 2013. Ex-Financials and Utilities, sales are expected to grow 5% while trailing-fourquarter margins are expected to expand 6 bp to another new historical high of 9.1%. As the bottom-up consensus full-year 2014 EPS of $117 is slightly higher than our full-year EPS forecast of $116, we expect revisions of -2% to consensus 2H forecasts.

 

Why Goldman thinks that Dollar strengthening is prices into earnings but not revenues:

What is the impact of dollar strengthening on 3Q results and EPS in the longer term? This is the most popular question of the season, and it’s no wonder why. The EUR/$ weakened 8% during 3Q 2014 following a weaker Euro area outlook and additional easing measures. Our FX strategists believe the EUR will weaken further relative to the USD to reach parity by year-end 2017 (see FX Views: Revising down our EUR/$ forecast, August 29).

 

Foreign sales accounted for 33% of aggregate revenue for the S&P 500 in 2013. The median stock reported 29% of sales outside the US. Companies reported that 12% of revenues came from EMEA, with 7% directly attributable to Europe. Approximately 8% of revenues stem from the Asia Pacific region and just  7% of reported revenues were from non-US Americas (Canada and Latin America). The remaining 6% of revenues were foreign but unclassifiable.

 

 

During 3Q 2014, bottom-up consensus EPS estimates for 3Q 2014 fell 3% with estimates falling in every sector but Health Care. Earnings revisions were most negative in the Energy (8%), Consumer Staples (8%) and Consumer Discretionary (7%) sectors.

 

Revision patterns indicate analysts incorporated dollar strength and a weaker Euro area into their estimates. There is a loose correlation between sectors with higher EMEA sales exposure and the magnitude of earnings revisions.

 

While analysts reacted to growth and currency changes through earnings estimate revisions, aggregate revenue estimates are unchanged. Materials (-5.9%) and  Health Care (+1.6%) saw the largest revisions to 3Q sales estimates.

 

Bottom line:

We expect a disappointing quarter for revenues. Weaker macro data and dollar strengthening increase the likelihood of sales misses. We also anticipate increased negative earnings guidance as companies quantify the FX headwind.

And how Goldman wants to trade this:

We believe domestic-facing stocks will be less likely to miss estimates relative to those with Western Europe revenue exposure. We recommend investors buy a portfolio of the most domestic-facing S&P 500 stocks (Bloomberg ticker: GSTHAINT) versus stocks with the most Western Europe revenue exposure (GSTHWEUR).

Translation: do the opposite.




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Cops Pepper Spray Teen in Own Home After Neighbor Mistakes Him For an Intruder

DeShawn Currie18-year-old DeShawn Currie got home from school,
and a little while later he was being pepper sprayed by cops who
said the teen, a black foster child in a white home, didn’t belong
there. What happened? ABC 11 in
Raleigh reports:

Fuquay-Varina police said when a neighbor saw DeShawn walk in;
they called 911 to report a break-in. Soon, three officers were
inside the house, all to DeShawn’s surprise.

“They was like, ‘Put your hands on the door,'” said DeShawn. “I
was like, ‘For what? This is my house.’ I was like, ‘Why are y’all
in here?'”

DeShawn said he became angry when officers pointed out the
pictures of the Tyler’s three younger children on the mantle,
assuming he didn’t belong there. An argument ensued and DeShawn
said one of the officers pepper-sprayed him in the face.

By the time Stacy came home, EMS were treating DeShawn in the
driveway.

Police claim Currie threatened them and refused to obey orders,
and that criminal activity had recently taken place in the
neighborhood.

In the
police report
(PDF), a responding officer says he and two other
cops came into the house through an open door in the garage and
then “made contact” with Currie in the living room. According to
the police report, the first thing cops told Currie was to show
them his hands. After asking whether he lived there, they frisked
him. According to the report, after that police found Currie’s ID
(the report doesn’t say if they found it while frisking him or
asked him for it), which had a different address than the home.

The reporting officer claims Currie told another cop to stop
yelling at him or he would beat him up, and that he heard Currie
yelling for cops to get off him and when of the cop yelling
“spray!” while he was searching the upstairs of the home.

Currie’s foster parents reportedly met with the police captain
but no charges were filed one way or the other.

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Dow Dumps All Post-FOMC-Minutes Gains Following VIX ‘Fat Finger’

Who could have seen that coming?

VIX ‘fat-finger’-ed lower… but failed…

 

when that spike happened (dark pool puke?) – volume exploded in VXX

 

and then the selling began – Nikkei and Dow red post-FOMC now…

 

as the S&P catches down to HY credit and Treasuries…

 

 

Charts: Bloomberg




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European Inflation Expectations Collapse To New Record Lows

Despite all the ‘promises’, all the ‘whatever it takes’, all the jawboning… actions and words appear unable to shift the world away from its disinflationary spiral that Central Bankers are so afraid of… US forward inflation expectations have cratered in recent weeks (to levels that in the past have triggered money-printing largesse) but it is European forward inflation expectations that have collapsed to record lows leaving Draghi caught between a deflationary rock and a Bundesbank-bating, Treaty-busting sovereign QE hard place that he knows deep-down-inside (given the cleasr evidence from the US and The Fed) simply does not work how it is supposed to (in the textbooks). As Deutsche Bank warned, “QE in Europe will be ineffective, but it will happen anyway – it is the only tool the ECB has to protect its mandate.”

 

Presenting the death knell of the central banker…

 

Exposing Central Banker impotence this vividly should have some questioning exactly why we rallied the most in 3 years yesterday…

 

Charts: Bloomberg




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‘Helicopter Yellen’ Sends Stocks, Gold, Silver Soaring

‘Helicopter Yellen’ Sends Stocks, Gold, Silver Soaring

Gold, silver and stocks surged overnight and today after the Fed maintained their ultra dovish monetary policy stance. The risk to markets of an early hike in U.S. interest rates eased leading to a  fall in the dollar after the release of minutes of the last Federal Reserve policy meeting. 

‘Helicopter Janet’

World stock markets roared their approval of reassurances that the U.S. Federal Reserve will not raise interest rates any time soon. Capital came flooding back into almost every asset class and the dollar fell sharply.

Gold jumped over 1% to $1,224.30 – at a two-week high, while silver surged 2% on the Fed minutes. 

The dollar, jolted lower, while gold, silver and oil and commodity prices rose. The other precious metals also caught the updraft. Silver surged 2% to $17.646 an ounce, platinum was up 0.5% at $1,283.20 an ounce, and palladium was up 0.4% at $803.75 an ounce.


Gold in U.S. Dollars,  5 Days (Thomson Reuters) 

There were big gains on Wall Street and for Asia stocks, and European shares duly followed suit as Britain’s FTSE 100, Germany’s DAX  and France’s CAC 40 rose 0.7%, 1.2% and 0.8% respectively in early trading.

Market participants have interpreted the tone of the FOMC minutes as suggesting that U.S. interest rates could remain lower for longer than most expected, causing the dollar to weaken. 

Observers had been worried that the minutes from Chair Janet Yellen’s Fed could lead to market volatility and further sharp stock market falls. ‘Helicopter Janet’ is confirming the belief of some market participants that she will continue the ultra loose monetary policies of her predecessor ‘Helicopter Ben’ and of course Alan Greenspan before them.

Bond yields throughout the world, which have plunged during years of cheap funding from the Fed and the world’s other major central banks, hit new record lows. 

Ireland’s bond yield hit a record low of 1.63%, despite Ireland still having important structural issues that have yet to be addressed and significant debt challenges.

The minutes showed Fed officials were wary about the dual threats of a stronger dollar and recent wobbles in the world economy as they desperately seek an eventual exit from record low rates.

Currency debasement continues in the U.S. and with other central banks – banks, and indeed markets appear hooked on the cocaine of ultra loose monetary policies and cheap money.

A rise in U.S. interest rates will be bearish for stocks, bonds, property and the already struggling U.S economy. Stocks already appear overvalued and ripe for a serious correction. 

The U.S. recovery is exaggerated and the health of U.S. consumers and the fundamentals of the U.S. economy remain weak. An economy that has over 55 million or nearly 20% of the population on food stamps is by its nature very weak and vulnerable.


S&P 500 – Jan 1985 to Oct 8, 2014 (Thomson Reuters)

For more than 5 years now the Fed has been ‘jawboning’ markets and threatening to rise interest rates and return to more normal monetary policies. We have consistently warned that it is important to watch what central banks do, rather than what they say – as they frequently conflict.

Indeed, even what they say can conflict and it is often dissembling and some would say designed to confuse and mislead market participants. 

Copious amounts of monetary whiskey have been downed in the global economy and yet the recovery remains weak at best. The mother of all monetary hangovers awaits us all and will likely manifest in stagflation and sharply higher inflation.

 This underlines the vital importance of having an allocation to gold in a diversified portfolio. 

Gold will maintain its purchasing power in the coming years, as it has always done throughout history. 

RECEIVE BREAKING NEWS AND UPDATES HERE

GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,227.50, EUR 961.99 and GBP 757.67 per ounce.
Yesterday’s AM fix was USD 1,220.00, EUR  963.51 and GBP 758.38 per ounce.
        
Gold climbed $11.90 or 0.98% to $1,222.50 per ounce and silver rose $0.21 or 1.22% to $17.40 per ounce yesterday. 

Gold in Singapore eked out small gains from $1,223/oz to , before shaving gains to trade down 0.2 percent at $1,219.30 by 0036 GMT.


Silver in U.S. Dollars,  5 Days (Thomson Reuters) 

Yesterday, the U.S. Fed  released minutes of the Sept. 16-17 meeting, that highlighted fears that a rising dollar could impact the fragile U.S. recovery and noted the economic turmoil in Europe and Asia (see above).

More signs of the very difficult economic situation in Europe came out of Germany today where German exports slumped by 5.8% in August, their biggest fall since the height of the global financial crisis in January 2009, as the sanctions and tensions with Russia took their toll.

It is yet another sign that Europe’s largest economy is faltering amid broader euro zone weakness and crises abroad.

The Bank of England kept interest rates at a record low 0.5% today and kept printing money for bond purchases to the tune of £375 billion a year.

The risk of a new recession in the euro zone and caution from the US Federal Reserve suggested a first increase in UK borrowing costs might be delayed. 
The bank’s Monetary Policy Committee left its bank rate at 0.5%, the level at which it has sat since the worst of the financial crisis over five years ago. 

Record low interest rates in the UK and globally remain positive for gold. 

RECEIVE BREAKING NEWS AND UPDATES HERE

www.GoldCore.com




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“Stayin’ Alive” Bill Gross Speaks In His First Janus Interview: Live Webcast

Curious how Bill Gross feels in his new digs at Janus Capital (aka old digs in Newport Beach)? Curious how much money he is managing now or how he will manage it? Curious why he has a band aid under his right eye? All should be revealed in the Janus Capital live webcast going on now.

The highlights so far:

  • GROSS SAYS THE WORLD HAS TOO MUCH DEBT, A `STRUCTURAL PROBLEM’
  • GROSS SAYS IT’S NOT THE `OLD NORMAL’, IT IS THE `NEW NORMAL’
  • GROSS SAYS ANOTHER PROBLEM IS TECHNOLOGY DISPLACING WORKERS
  • GROSS SAYS GLOBAL ECONOMY IS SLOWING DOWN
  • GROSS SAYS ZERO INTEREST RATES DISTORT CAPITALISM

And:

For the rest watch below:




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Gun Range Moves in Next Door to School, Boundless Hysteria Ensues

Rancho CordovaRancho Cordova, California, students are up in
arms—so to speak—about a gun range moving in next door to their
high school. The range is indoor—no stray bullets will be pelting
classroom windows—but students, teachers, and administrators all
believe the mere presence of a gun club so close to a school is
inherently dangerous.

Why? I have no earthly idea.

The community’s explanation is an insistent it just
is!
 From
cbslocal.com
:

Students from George Washington Carver High protested what is
already on its way.

“Even though it’s legal, it’s still wrong. you shouldn’t mix
schools with guns,” said student Damon Kalerkorinos.

He helped organized the protest of students against the new
shooting range being developed just about 250 feet away from their
campus.

“It’s just not safe to have a gun club so close to a
school,” he said.

Principal Allegra Allesandri says a new gun club so close is
wrong, citing weapon-free zones designed to keep schools safe.

But weapons-free zones don’t make schools any
safer than they already are; people who intend to commit violence
in schools won’t be deterred by felony weapons charges. Instead,
Allesandri and Kalerkorinos must have some unfounded belief that
mere proximity to a gun causes otherwise healthy people to lose
their minds and resort to violence. There isn’t any merit to that
argument, either.

At least city authorities recognize that since the area is zoned
as an industrial district, the gun range has every right to set up
shop next to George Washington Carver High. Case closed? Not
quite:

While the project goes forward, protesters’ concerns haven’t
fallen on deaf ears as the city announced it will likely review its
planning codes.

“We’ll be looking at the gun-related uses as well as well as
other uses and compatibilities related to schools,” he said.

For the students and neighbors against the project, the hope is
that planning codes change statewide.

It looks like the city will consider restricting future gun
ranges, if not the one next to George Washington Carver High. The
local news story spins this as a beneficial lesson in participatory
democracy for the high schoolers. True enough, I suppose. If
nothing else, they learned that when it comes to politics and
governance, think-of-the-children paranoia trumps property rights
every single time.

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Several Cities—and the State of Colorado—Say No to the Border Police

A single tear runs down Sgt. Carter's cheek.When it comes to immigration
policy, the best-known clash between federal and lower levels of
government is the recent battle over Arizona’s infamous
SB 1070
, a law that intensified the border clampdown. And there
have been plenty of other times a state
or city has
tried to be more heavy-handed in its immigration enforcement than
the feds. But sometimes it’s the more local jurisdiction that’s
less eager to crack down, as Emily Badger
points out
in The Washington Post:

Chicago doesn’t cooperate.
Neither does
Philadelphia
. Nor Baltimore,
San
Diego
, Newark,

Milwaukee,

Miami-Dade
or Denver.

One by one, these cities—soon to be
joined by New York City
—have passed resolutions or enacted new
policies refusing to hand over immigrants detained by local police
to federal officials for deportation. The strategy, gaining
further momentum this year
 with a statewide
law in Colorado
, is one way local governments dismayed by a
broken federal immigration system have found to undermine it.

At issue are what are called “immigration detainers.” The
federal government relies on local law enforcement agencies to help
identify individuals for deportation. When local police come in
contact with suspected immigrants (for reasons
ranging from
serious offenses to traffic violations
), Immigration and
Customs Enforcement often issue a detainer, asking local jails and
prisons to hold them for 48 hours or more beyond their release to
give the feds time to decide if they want to collect and deport
them.

Badger mentions civil libertarian objections to the
imprisonments, and she also notes fears that these detentions will
undermine other sorts of police work. (People tend to be less
likely to help a homicide investigation if they’re afraid they’ll
be hauled in on immigration charges.) But the most important
incentive that she identifies might be financial: “The federal
government doesn’t reimburse local agencies for resources they
spend ‘holding’ suspected immigrants on ICE’s behalf.” Just as
governors with no ideological objection to regulation can suddenly
sound like fire-breathing libertarians when confronted with an
unfunded mandate, ICE’s orders can turn a moderate’s thoughts
toward defiance.

Bonus link: An earlier
example
of immigration-friendly federalism.

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