Florence and the 4th Amendment

Posted on April 10, 2012 by Mike

I promised Mark I’d post some thoughts on Florence v. Board of Freeholders, the recent 4th Amendment case from SCOTUS. Since this post isn’t a scholarly document, I’m not going to provide extensive references or links.  My sources are the opinions from the various cases, which can be found at various sites on the web.

First, a brief summary of the case from Lyle Denniston at SCOTUSblog:

Insisting that it has no expertise in how to run a jail or prison, the Supreme Court divided 5-4 Monday in ruling that every person arrested and held temporarily can be subjected to a routine strip search, so long as it involves only a visual inspection without touching or abusive gestures.  The prisoner, however, may be told to manipulate some part of the body.  Some difference of emphasis among the five Justices in the majority made it appear that the decision might be more limited than at first glance.

The ruling, it appeared, did not authorize jail officials to conduct a strip search unless the prisoner was to be placed among other prisoners at the facility.  Two Justices wrote separately in an effort to stress that aspect of the ruling, and their votes were essential to the 5-4 result.

The decision was a clear defeat for challengers to strip searches as a general policy.  The Court explicitly refused to limit the authority to use strip searches only to situations in which a specific individual gave officers a reason to consider that prisoner to be dangerous or likely to be carrying a concealed weapon or drugs.   The same kind of visual inspection of an arrestee’s naked body, the Court declared, can be applied to anyone placed in the general population of a jail or prison, even if only temporarily.

If you’re still interested, then there is more below.

Continue reading →

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Morning Report

Posted on April 10, 2012 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1377.0 2.1 0.15%
Eurostoxx Index 2359.4 -33.1 -1.38%
Oil (WTI) 102.05 -0.4 -0.40%
LIBOR 0.4692 0.000
0.00%
US Dollar Index (DXY) 79.863 0.130 0.16%
10 Year Govt Bond Yield 2.05% 0.00%
RPX Composite Real Estate Index 170.57 0.0
Markets are generally weaker as Europe plays catch-up with the US markets. US bonds and MBS are flat. Spanish yields are 17 basis points higher on no major economic news. An unexpected drop in imports pushed the Chinese trade balance into a surplus and is flashing warning signs about Chinese domestic demand.
With Greece temporarily off the front pages, all eyes turn to Spain. The new Spanish government is determined to implement austerity measures and reduce the budget deficit by almost 2/3 in 2013. Spain had a massive property bubble, which has weakened their banking system considerably. The banks are thought to be marking their real estate portfolios and mortgage bonds at unrealistic levels.
One powerful method of clearing the excess housing inventory is the short sale, and often times it is a lengthy, painful process as banks and other creditors drag their feet, hoping for better prices. Senator Sherrod Brown (D-OH) has introduced legislation to force banks to make a decision within 75 days of a request from a homeowner.
Bloomberg has been tracking a story about J.P. Morgan’s massive credit default swap positions in their Treasury department, which is raising questions about Dodd-Frank and proprietary trading versus hedging. The trader, Bruno Iksil, has been selling protection on an index of investment-grade bonds (Markit CDX North America Investment Grade Series 9) and is thought to have sold $100 billion worth of protection on the index. This is the trade that blew up AIG and I cannot imagine what it possibly could be hedging. As a bank, JP Morgan generally makes loans so it makes money if US corporations generally do well, and poorly when US corporations don’t do well. Selling protection is the exact same bet. The article goes on to speculate that this may be part of a spread trade, but even then a spread trade is a speculative position, not a hedge. Anyway, regulators and politicians seem to be lining up against this trade, and if JP Morgan is forced out, they will undoubtedly pay dearly to exit.
Chart: Spanish 10-year government bond yields

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