When Ted Cruz pandered to South Carolina conservatives by attacking Donald Trump’s “New York values,” he probably was not thinking about the moment, a few months later, when he would be pandering to New Yorkers. But that moment is upon him, and the much-mocked phrase has come back to haunt him. With the New York primary less than two weeks away, the Associated Press reports that “Cruz’s use of that phrase as a putdown in a GOP debate in January has hung around his neck like an anchor, particularly in New York City, where’s he’s been skewered in the tabloids and repeatedly heckled at campaign events.”
During that January 14 GOP debate, Cruz said “everyone understands that the values in New York City are socially liberal or pro-abortion or pro-gay marriage, focus around money and the media.” During a recent campaign stop in the Bronx, he tried again: “They are the values of the liberal Democratic politicians like Andrew Cuomo, like Anthony Weiner, like Elliot Spitzer, like Charlie Rangel—all of whom Donald Trump has supported. If you want to know what liberal democratic values are, follow Donald Trump’s checkbook.”
So now Cruz is against liberal democratic values? What happened to his reverence for the Constitution, the rule of law, freedom of speech, and freedom of religion? A.P. says “fewer than 100 people showed up at the event at a restaurant, and several of them were there solely to jeer Cruz.”
John Kasich’s performance sounds only slightly less embarrassing:
“We love New York values,” Kasich, who is running a distant third in the delegate race, said during a campaign stop at a Bronx deli. “It means innovation, neighborhoods, great food, great people. It means everything.”
Except for afforable housing. My wife and lived in New York (Manhattan and the Bronx) for seven years and might still be there if the rents were lower. I miss the pickles. Abortions you can get anywhere.
The second part of a two-hour Libertarian Party presidential debate will air on Stossel on Fox Business tonight at 9:00p.m. ET. The debate, hosted by John Stossel, features 2012 Libertarian presidential candidate and former Republican New Mexico Governor Gary Johnson, software guru John McAfee, and Austin Petersen, who founded LibertarianRepublic.com (I worked alongside Petersen on Fox Business’ FreedomWatch with Judge Napolitano from November 2010 until its cancellation in February 2012; see more below). The three finished at the top of a poll commissioned by the Libertarian Party.
Last time around, Johnson scored 1 percent of the vote in the general election, with more than 1.2 million votes, the best showing for a Libertarian presidential candidate since Ed Clark received nearly 1 million votes and north of 1 percent of the vote in 1980. There are at least a dozen candidates running for the Libertarian party altogether, but only Johnson has any prior political experience.
In an election season defined largely by “anti-establishment” feeling and where Donald Trump is the Republican front runner, that’s not necessarily as much of a bonus as it might have been previously.Yet Johnson rejected the Republican Party an entire presidential election cycle before it found itself in its current mess, something that ought to earn him some credibility.
Johnson is, to say the least, an imperfect candidate in an imperfect Libertarian field.
Petersen, for example, has been told told by Stossel that he acts like he’s 12 years old and Matt Welch has described the candidateas a “hustler.” McAfee, meanwhile, was a person of interest in the murder of his neighbor and living in Belize.
And yet the field nonetheless offers something refreshing this election cycle. That’s because libertarianism, capital-L or not, isn’t about individual politicians but individual liberties.
Libertarians can offer a compelling narrative to an electorate on the verge of facing two major party candidates—Trump and Hillary Clinton—who both have unfavorable ratings north of 50 percent. The unlikeability of the Democratic and Republican nominee could make voters, and maybe even millions of horrified non-voters, more receptive to looking to third parties for articulate ideas and not just cults of personality.
From police and criminal justice reform to education, immigration, and foreign policy, libertarian ideas offer a path outside of often intractable, and always insufferable, partisan scuffles. Trump and Clinton represent the culmination of a years-long atrophy of both parties, fueled by cronyism, an aversion to critical thinking and, above all, an unquestioning belief that government can work given the correct agenda and helmed by the correct people, even as the outcomes tend to expose the ridiculousness of that belief.
So libertarians have a chance this election cycle to make their ideas matter. It’s unfortunate that there aren’t more high profile Libertarian politicians, but also unsurprising. After all, the ideology is averse to government as a desirable career path. If the candidates focus on educating voters about the ideas behind libertarianism and the role government plays in the social ills driving their fears, rather than triangulating (or incoherently rambling) on issues like gay wedding cakes and Sharia law or creating a cult of personality-like sideshow, perhaps they can be successful in contributing to the momentum of libertarian ideas on the policy and cultural front even absent electoral success.
Disclosure: On a personal note, I considered Austin a friend of mine while we worked together and we kept in touch for some time after that. My main point about his candidacy would be that it’s a shame he didn’t try to run for something like governor of Missouri first.
You can make a similar point about Johnson, who perhaps could’ve run for the Senate from New Mexico in 2012, positioning himself better in front of an electorate that, given the popularity of the major party candidates, looks potentially primed for a third party candidate.
More Libertarian campaigns on local and state levels would also work to expose more voters to the idea that government plays a large role in many of the problems it claims to be able to fix. In general, more Libertarians in elected office would be the most direct way to inject policies that limit government into government itself, especially the more that the Republican Party might reject the strain of libertarianism that could be the cure to its terminal statism.
Following a period of relative mass shooting calm over the past few weeks, moments ago reports indicate that there is an active shooter situation unfolding at Lackland Air Force Base in San Antonio, Texas which is on Lockdown. According to News4SA, there are reports that two people were shot and they are dead, although it has since clarified that according to The Bexar County Sheriff’s Office reports the victims condition was not immediately known.
According to News4 San Antonio, the initial calls made to police came in at around 8:45 a.m. local time, and law enforcement from both the San Antonio Police Department and the Post of San Antonio were responding.
Initial reports were unclear, but an officer said the shooting happened at an area known as the Medina Annex and someone may have been shot.
KFDN News out of Beaumont, Texas indicated moments ago that one person may have been shot. The Bexar Country Sheriff also took to Twitter immediately to comment, though did not offer any confirmation or details about the rapidly unfolding situation
There was one thing keeping US GDP growing in recent months: rising inventory. Well, no more. Moments ago the Dept of Commerce reported the latest inventory data and following major historical revisions, not only was last month’s inventory print slashes from 0.3% to -0.2%, but the February Inventory number was a dramatic -0.5% drop, far below the -0.2% expected.
This was the biggest sequential drop since the spring of 2013.
It wasn’t just inventories: wholesale sales also declined by 0.2%. The ongoing declines refuse to paint a pretty picture of the US economy.
Worse, the nominal dollar spread between wholesale inventories and sales remains at record highs suggesting that the long overdue inventory liquidation has nowhere near begun yet.
There was some good news: the inventories/sales ratio was 1.36, a modest decline from the January print. While perhaps hinting of some long overdue renormalization, this would mean that should inventory selling commence, the US GDP is about to lose as much as 1.5% in annualized growth, potentially pushing 2016 GDP growth to 1% or lower.
And now we wait for the Altanta Fed to update its Q1 GDP model with a negative print.
It is no secret that one of the core support groups behind Hillary’s presidential campaign are black voters. Which is why it came as a surprise when none other than Bill Clinton faced down protesters angry at the impact his 1994 crime reforms have had on black Americans and defended the record of his wife, Hillary Clinton, who is relying on the support of black voters in her quest for the presidency.
As Reuters reports, the former president spent more than 10 minutes confronting the protesters at a campaign rally in Philadelphia for his wife over criticisms that the crime bill he approved while president led to a surge in the imprisonment of black people. Clinton’s speech devolved into confusion when several protesters heckled the former president mid-speech and held up signs, including one that read: “CLINTON Crime Bill Destroyed Our Communities.”
Bill Clinton’s remarks on Thursday drew criticism online. Some saw him as dismissive of the Black Lives Matter movement, a national outgrowth of anger over a string of encounters in which police officers killed unarmed black people. Johnetta Elzie, a civil rights activist, wrote online that Clinton “can’t handle being confronted by his own record.”
“This is like watching a robot malfunction,” she wrote. She was referring to Bill, not Hillary.
Ahead of Clinton’s speech activists in the Black Lives Matter protest movement circulated video footage of Hillary Clinton defending Bill’s reforms in 1994. In the footage, she calls young people in gangs “super-predators” who need to “be brought to heel.” Hillary Clinton, 68, who also has faced protesters upset by her remarks, said in February she regretted her language.
To be sure, Bill Clinton defended her 1994 remarks, which protesters say were racially insensitive, and suggested the protesters’ anger was misplaced.
“I don’t know how you would characterize the gang leaders who got 13-year-old kids hopped on crack and sent them out on the street to murder other African-American children,” he said, shaking his finger at a heckler as Clinton supporters cheered, according to video of the event. “Maybe you thought they were good citizens. She (Hillary Clinton) didn’t.“
The question whether they are good citizens aside, the bigger problem is that absolutely nothing has been done to even address a problem of gang violence which has resulted in a record surge in gun homicides in cities such as Obama’s own Chicago, as we reported last week.
That said, Clinton was right: “You are defending the people who kill the lives you say matter,” he told a protester. “Tell the truth.” Many have criticized the Black Lives Matter activists for actively attacking white people, while openly ignoring the problems within their own society.
One thing is clear, however: whether as a result of Clinton’s crime bill or not, the United States has more people in prison than any other country. According to the Bureau of Justice Statistics, 1.05 million prisoners were held in federal or state facilities in 1994. By 2014, it was 1.56 million. That year, 6 percent of all black men in their 30s were in prison, a rate six times higher than that of white men of the same age.
On Thursday confusion ensued over whether or not Clinton defended his legislation: the former president said last year that he regretted signing the Violent Crime Control and Law Enforcement Act into law because it contributed to the high incarceration rate of black people for nonviolent crimes. On Thursday, he did not explicitly recant those regrets, but appeared to be angry at any suggestion the bill was wholly bad.
The legislation imposed tougher sentences, put thousands more police on the streets and helped fund the building of extra prisons. It was known for its federal “three strikes” provision that sent violent offenders to prison for life. The bill was backed by congressional Republicans and hailed at the time as a success for Clinton.
Hillary Clinton promised to end “mass incarceration” in the first major speech of her campaign last year. She has won the support of the majority of black voters in every state nominating contest so far, often by a landslide.
And while many attack Trump on flipflopping on many issues, this is becoming one particular topic that may have a lasting impact on Hillary’s core support group if left unresolved. During Hillary Clinton’s failed 2008 presidential bid, civil rights leaders and high-ranking Democrats in Congress criticized the former president for statements he made during a heated campaign against then-U.S. Senator Barack Obama.
Bill Clinton said Obama’s campaign had “played the race card.” Obama became the first U.S. black president in November that year.
While big banks blame the collapse in Q1 GDP on “residual seasonality” (more on that later), with BofA recently slashing its Q1 estimate from as much as 2.7% to just 0.2%, the reality is that something is not well with the US consumer. The latest proof of this comes from the most recent Bank of America credit and debt card spending data, which reveals that sales were once again down 0.1% yoy.
And unlike on previous occasions, one can’t blame it on gas at the pump, as gasoline prices have increased. Still, on a trailing basis, headline sales have been depressed by less spending at the pump due to lower prices. On a three month moving average, retail sales ex-autos are down 0.2% mom SA while retail sales ex-autos and gasoline are up a more moderate 0.3% mom SA.
The chart below shows the seasonally adjusted retail sales ex-autos measure from the BAC aggregate card data was unchanged SA in March, leaving the 3-month moving average to decline 0.2%. While a part of this weakness owes to a continued decline in gasoline prices. We find that retail sales ex-autos and gasoline was up 0.3% mom SA, which continues to be in a downward trend.
This confirms the downward revision to the Census Bureau data in January which made government data more consistent with the BAC internal data. According to Bank of America, “we therefore also look for only a slight improvement in March Census Bureau sales, in a similar pattern as the BAC internal data” which means that Q1 GDP is weak for a very specific reason: consumer spending remains anemic.
Bank of America then proceedds to look at spending trends for different income groups. It creates a proxy for the two ends of the income distribution using average income by zip codes. After ranking the zip codes by average income, it takes the top 3% of zip codes to capture the high-end consumer and the bottom 3% of zip codes to represent the lower end. BofA finds that the spending among the high-end has outpaced the lower-end consumer post-crisis through early 2014.
Since then spending has accelerated for the low-end, particularly in the summer of 2014 along with the drop in gasoline prices. The lower-end consumer is more budget constrained and therefore has a greater propensity to spend out of gas savings. Meanwhile higher-end consumer spending has slowed, particularly at the end of last year, which could reflect the uncertainty in the financial markets. In the past few months, spending for the low-end consumer has slowed, falling back below the growth rate of the high-end cohort.
In the chart below, BofA sees a similar pattern with the upper and lower income households, but not as obvious as the zip-code based proxies.
What do household spend on? BofA looks at the composition of spending for each income cohort, dividing spending on each sector by retail sales ex-autos. Food & beverages was the biggest spending category across all income groups in March. Health & personal care was the second biggest category. Conversely, households spent the least on electronics and furniture, which are more big-ticket purchases. As income increases, the average household spends a lower share on basic necessities like food and clothing. Instead, consumers will allocate a relatively greater share of spending on hobbies and furniture.
Finally, and perhaps most troubling, is the sharp dropoff in services in the past year, while spending on goods is barely positive on the year. BofA defines services as the combination of spending on restaurants, hotels and airlines. This is only a portion of actual services spending – notably, housing and healthcare are not captured. BofA finds that The gap between services and goods widened over last year, but in the past few months, it has narrowed back as spending on services has slowed.
Public school officials in Princeton, New Jersey, are upset about a photo making the rounds on social media that shows the setup for a variation on beer pong played by students at Princeton High School. The complaints have less to do with underage alcohol consumption than with the way the cups are arranged: a swastika on one side and a six-pointed star on the other. The game, known as Alcoholocaust, pits Jews against Nazis, but with a much happier ending than the last time that played out. Here are the rules, according to a post on Twitter:
It’s 3-on-3, 30 cups per team. The Nazis shape their 30 cups into a swastika, and the Jews set up their 30 cups as the Star of David. The cups are re-racked to a smaller swastika and a smaller star when 18 cups remain on either team. The Nazis start of the game with a “blitzkrieg,” and each player on the Nazis shoots until they miss, but this is only allowed for the first volley. The Jews have the “Anne Frank Cup,” and this ability allows them to pick any one of their cups and hide it anywhere in the room, but it has to be shootable, obviously. The Jews can only do that once per game and [it] can be used only during their turn. To equalize this slight advantage, the Nazis also have another ability called “Auschwitz”…The Nazis can pick can player on the Jews team and they have to sit out of the game until the other two players on the Jews team each make a cup. After that happens the 3rd player on the Jews team can play again. Also, throughout the game you are supposed to talk a lot of shit and say as many racist things as possible to make it more enjoyable.
School officials discovered the game thanks to a student who saw a photo of it on SnapChat (not the one above) and blogged about it. (She did not approve.) NJ.com reports that “Princeton schools Superintendent Steve Cochrane said the district is talking to the students and their families about the photo and it’s raised several concerns.” Chief among them: “As an individual and as the superintendent of the Princeton Public Schools,” Cochrane says, “I am deeply upset that some of our students chose to engage in a drinking game with clearly anti-Semitic overtones and to broadcast their behavior over social media.”
I remain undecided about anti-Zionism, but I am pretty sure this game is not anti-Semitic. For what it’s worth, the guy who posted the rules on Twitter says, “My Jewish friends actually love this game.”
Then again, Cochrane may be on to something. I’m no beer pong expert, but it seems to me the Nazis have an inherent advantage (again!). The Nazi cups are more spread out and therefore harder to hit, while the Jewish cups are grouped together, so that if you miss the one you’re aiming for the ball is more likely to fall into an adjacent cup.
Shocking Photo: Nearly 30 Oil Tankers in Traffic Jam Off Iraqi Coast
Oil tankers are caught in a traffic jam near the Iraqi port of Basra, causing delays in loading. According to Reuters, around 30 very large crude carriers (VLCCs) are sitting in the Persian Gulf, and the backlog could cost ship owners more than $75,000 per day. Some could be waiting for weeks to reach the port.
The culprit is high oil production in Iraq. The port at Basra is struggling to load up all the oil tankers fast enough, forcing some to sit and wait. Iraq exported about 3.26 million barrels per day (mb/d) in March from its southern coast, which is up from just 2.5 mb/d in 2010.
And the line of tankers appears to be growing. The gridlock is forcing up the cost of renting an oil tanker. That, combined with the shrinking capacity of available storage in China is pushing up tanker rates in Asia as well. Shipping data shows that VLCC rates have doubled from $37,250 per day to $74,700 per day.
As of now, Reuters calculates that there are 27 VLCCs sitting in the Gulf near Basra, holding about 43 million barrels of oil, double the typical backlog. Some have been waiting for weeks. The current waiting time is 18 to 19 days, which is two to three times the normal wait of 5 to 10 days.
Reuters contacted a captain of one oil tanker, who said that he wasn’t sure when he would be able to load up at the port. “We’ve been given no details,” he said, declining to be identified.
Meanwhile, onshore, Iraq is struggling with a bit of rising instability in the country’s south, which is far from the battlefields with ISIS and has been one of the few refuges of stability. However, militias have a growing presence there, raising concerns for the international oil companies operating in Basra.
With the Yen soaring (and USDJPY plunging) some 10% in 2016, in the process crushing the tightly correlated Nikkei and leading to such outcomes as the largest Asian clothes retailer slashing profits by a third in just 4 months due to the strong currency, everyone has been wondering i) why is the BOJ waiting to intervene when it had no problems unleashing NIRP when the USDJPY was about 1000 pips higher and ii) when will it intervene again?
According to a poll by Bloomberg, Japanese authorities may intervene in the currency market if USD/JPY falls below 100 based on the median estimate of 14 analysts compiled by Bloomberg News.
Estimates range from 95 to 110.
As we reported earlier, the USDJPY hit a 17-month low – the lowest since BOJ’s QE expansion in Oct. 2014) before rebounding 0.5% today to 108.73 on warnings from Japanese Finance Minister Aso that abrupt yen movements are most undesirable.
Additionally, Japan Chief Cabinet Secretary Suga warned several times this week that the authorities are closely watching the FX mkt and will act appropriately if necessary as there have been one-sided moves in FX mkts.
Curiously, LDP lawmakers, who form the ruling party, are less eager for intervention Bloomberg writes. LDP policy chief Tomomi Inada said today now isn’t the time for FX intervention, echoing Keiichiro Tachibana earlier this week. Begs the question if the G-20 “Shanghai Accord” was mostly coordinated and precleared with political figure, and not so much with central banks?
In any event, an intervention by the BOJ is indeed just a matter of time, the only question is at what level in the USDJPY and how long before the determined shorts push the Yen as high as it will need for Kuroda to demand mercy.
Here are some analyst views:
“At the moment, there is no international support for intervention anywhere near current levels, particularly considering the yen is actually historically quite weak here,” says Ray Attrill, global co-head of FX strategy at National Australia Bank
Decline in USD/JPY below 100 “would mark the confirmation that psychology around the currency has completely changed,” says Gareth Berry, an FX strategist at Macquarie Bank.
“Chance for intervention at this level is quite low,” says Sim Moh Siong, an FX strategist at Bank of Singapore; cites G-7 meeting next month (the meeeting will take place May 26-27)
Here is a summary of what Wall Street thinks is the USDJPY level at which Kuroda will intervene
In a week overflowing with Fed speakers, moments ago NY Fed’s Bill Dudley – who recently flipped from hawkish to dovish once again – took the podium in Bridgeport Connecticut to lay out his latest thoughts. Here is a summary of what he said in a speech titled “The National and Local Economic Outlook: An Update“, courtesy of Bloomberg
Caution is called for because of Fed’s limited ability to reduce policy rate, Federal Reserve Bank of New York President William Dudley says, Dudley comments in text of speech in Bridgeport, Conn.
“Although the downside risks have diminished since earlier in the year, I still judge the balance of risks to my inflation and growth outlooks to be tilted slightly to the downside”
Fed can use forward guidance, balance-sheet policies to provide more accommodation if warranted
While recent data show “some firming” of inflation expectations, “there is still cause for concern” because many measures still quite low
“The recent rise in inflation and in measures of inflation expectations have increased my confidence around this outlook compared to earlier in the year, but it is still possible that the return of inflation to our objective could take longer than I anticipate.“
“There is significant uncertainty about economic growth prospects abroad and how this will affect the U.S. economic outlook”
Despite recent financial-market volatility and economic data, “recent developments have not led me to make a fundamental change in my outlook for the U.S. economy”
Expects real GDP growth of about 2% in 2016, above potential; jobless rate likely to drop to around 4.75%
Several sectors showing signs of softness, including consumer spending, home sales, business investment
Labor market has remained healthy, but long-term unemployment still higher than prior cyclical peak in 2003
“Measures of aggregate wage growth have remained quite subdued, which suggests there is still some slack in the labor market”
On this latest cautious pessimism about the US economy futures naturally spike to intraday highs.
That said, we can’t blame him for being cautious. One look at the following chart from @Not_Jim_Cramer and you would be too. In fact, you may even ask what was the Fed thinking when it hiked rates last month.