Morning Report: ECB disappoints, sending bond yields higher 12/3/15

Stocks are flat after the ECB cut rates again and promised more stimulus. Bonds and MBS are down.

ECB President Mario Draghi announced more quantitative easing and a cut in rates. They maintained their main rate at 0.05% and cut the deposit rate to -.3%. Apparently it wasn’t enough as bond yields are up worldwide.

Janet Yellen will be speaking in front of Congress starting at 10:00 am.

The ISM Non-Manufacturing Index fell from 59.1 to 55.9 in November, coming in well below expectations. Note the ISM Manufacturing Index also missed estimates and came in below 50, which indicates deceleration in the manufacturing sector. The employment sub-index fell, and some business owners are blaming Obamacare for higher costs.

Factory Orders rose 1.5%, a bit better than expectations, while durable goods orders were revised downward to 2.9%. Capital Goods Orders ex-defense and aircraft (a proxy for business capital expenditures) rose 1.3%.

Job cut announcements fell 13.9% to 31,000, according to outplacement firm Challenger, Gray and Christmas. This is the lowest level in over a year.

Initial Jobless Claims rose 9k to 269k. Initial Jobless Claims are still at multi-decade lows, which is amazing when you take into account population growth.

The Bloomberg Consumer Comfort index fell again last week to the lowest level in a year. Consumers are becoming more pessimistic about the economy, with 31% having a positive view and 69% having a negative view. FWIW, November same store sales are coming in this morning from the retailers, and they look to be disappointing.

Bill Gross’s latest investment outlook is out. He is advising clients to gradually de-risk their portfolios during 2016. His thesis is that years of QE have essentially hollowed out real economies as it allows zombie corporations to continue to exist and it punishes savers and insurance companies / pension funds. Of course he is talking his own book to some extent. There is no doubt that the fear of the unintended long-term consequences of ZIRP and QE are coming into play with the Fed’s plan to raise interest rates in the US.

52 Responses

  1. I’m on a roll this week. . . frist!

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  2. In the New York Times today, Judge Richard Posner all but calls Anthony Scalia a doddering homophobe:

    This June, Justice Scalia’s prediction came true in Obergefell v. Hodges. He has vented even more than his usual anger over this decision. It has become apparent that his colleagues’ gay rights decisions have driven him to an extreme position concerning the role of the Supreme Court.

    In a recent speech to law students at Georgetown, he argued that there is no principled basis for distinguishing child molesters from homosexuals, since both are minorities and, further, that the protection of minorities should be the responsibility of legislatures, not courts. After all, he remarked sarcastically, child abusers are also a “deserving minority,” and added, “nobody loves them.”

    Not content with throwing minorities under the bus, Justice Scalia has declared that Obergefell marks the end of democracy in the United States, stating in his dissent that “a system of government that makes the People subordinate to a committee of nine unelected lawyers does not deserve to be called a democracy.”

    We have no 25th Amendment-like process to remove Supreme Court justices for dementia, not that Scalia has started drooling on the bench. Yet.

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    • yello:

      Judge Richard Posner all but calls Anthony Scalia a doddering homophobe:

      See this: http://thefederalist.com/2015/12/02/americas-most-cited-jurist-hates-words-and-history/

      If Posner’s approach to judging people is anything like his approach to judging the constitution (“I’m not particularly interested in the eighteenth century, nor am I particularly interested in the text of the Constitution”), I think his judgment of Scalia is as easily dismissed as an absurd ad hominem about Scalia having dementia.

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    • yello:

      BTW, shockingly Posner is totally dishonest about Scalia’s argument. Posner says:

      In a recent speech to law students at Georgetown, he argued that there is no principled basis for distinguishing child molesters from homosexuals, since both are minorities…

      No. Scalia argues that there is no constitutional basis for distinguishing between the two as minorities. Notably, although Posner snivels at what Scalia says, he doesn’t actually present a counterargument. If in fact there is a principled way in which judges could distinguish between the two based on the constitution, why doesn’t Posner explain how.

      Posner goes on to say:

      The logic of his position is that the Supreme Court should get out of the business of enforcing the Constitution altogether, for enforcing it overrides legislation, which is the product of elected officials, and hence of democracy.

      Wrong again. The logic of his position is that enforcing the constitution is the only legitimate reason SCOTUS has for overriding legislation. When SCOTUS begins overriding laws based on their own personal value judgments – as Posner advocates – rather than based on what the constitution actually says, that is when it undermines democracy. That this is even remotely controversial, or confusing to minds such as Posner is alleged to have, is baffling to me.

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  3. Scalia isn’t demented. You just don’t like his rulings.

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    • Scalia isn’t demented.

      I specifically said he wasn’t. Yet. And it was perhaps wrong to put the word “doddering” in Posner’s lips since that wasn’t the crux of his argument.

      Nobody seems to be debating whether or not Scalia is a homophobe. It’s pretty clear that he is. Rhetorically conflating gays with child molesters is part of that stock in trade.

      Much of the whisper campaign to push Ginsberg to retire is out of fear she won’t outlive the imminent Trump administration.

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      • yello:

        I specifically said he wasn’t. Yet.

        No you didn’t. You said he wasn’t drooling on the bench. Yet.

        Nobody seems to be debating whether or not Scalia is a homophobe.

        The word is largely a nonsense word, but based on your own offered definition some time ago:

        I would say that at the most basic level it is the opinion that gays and lesbians don’t merit the same legal rights as straight people.

        …I think it is very clear from his rulings that Scalia is obviously not a homophobe. He thinks that gays and lesbians should have exactly the same legal rights as straight people.

        Rhetorically conflating gays with child molesters is part of that stock in trade.

        Except that he did not conflate gays with child molestors. He drew an analogy between the constitutional status of each as “minorities”. To say that two things are similar or alike in one particular respect is not to say that they are similar or alike in all respects.

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  4. Nobody has any idea who Trump would nominate. It could be anyone on of us and it would make sense.

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  5. “Nobody seems to be debating whether or not Scalia is a homophobe. It’s pretty clear that he is.”

    He’s not afraid of gays. He just recognizes that there’s no Constitutional right to gay marriage or even to engage in homosexual conduct. He’s right on both counts.

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    • He’s not afraid of gays.

      Homophobia is not the fear of gays despite the unfortunate quasi-Latin roots like arachnophobia is a fear of spiders. The better definition is “Dislike of or prejudice against homosexual people.”

      See, I can define words when I want to.

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  6. Except that he did not conflate gays with child molestors. He drew an analogy between the constitutional status of each as “minorities”. To say that two things are similar or alike in one particular respect is not to say that they are similar or alike in all respects.

    Both you and I know what he’s doing here. If he wanted to use a benign analogy he could have said that gays are no more a protected minority than redheads.

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    • yello:

      Both you and I know what he’s doing here.

      Well I’m sure I do, yes.

      If he wanted to use a benign analogy he could have said that gays are no more a protected minority than redheads.

      Nope, because being a redhead is not defined by behavior. The whole question revolves around whether the constitution grants special protections to certain people to engage in certain kinds of behavior. Redheads would not be an apt analogy.

      Including the right to marry a member of the opposite sex of so inclined, right?

      Correct.

      The fact that homosexuals prefer not to exercise that right is no reason to extend it to members of the same sex.

      Ignoring your conflation of marriage as traditionally understood with something entirely different, one may or may not think that, but either way it is irrelevant to the question under discussion, ie whether, in the absence of SSM, homosexuals have equal rights under the law.

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      • Redheads would not be an apt analogy.

        Just because they were born that way doesn’t mean they can’t change. We have lots of good techniques for fixing that now.

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  7. In what way does he advocate for legal discrimination against homos?

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  8. This piece is illuminating, but not in the way that’s intended:

    “All of this combined makes communication with Republicans mostly hopeless. “There’s very little we can do to change the Republicans’ political situation because they are worried about a cohort of voters who disagree with most of what the president says,” Pfeiffer said. “We don’t have the ability to communicate with them—we can’t even break into the tight communication circles to convince them that climate change is real. They are talking to people who agree with them, they are listening to news outlets that reinforce that point of view, and the president is probably the person with the least ability to break into that because of the partisan bias there.””

    http://nymag.com/daily/intelligencer/2015/03/dan-pfeiffer-exit-interview.html

    So it’s not really about “communication” at all. It’s about the fact that Republican voters don’t want what Obama wants and the Republicans in Congress care more about the people who voted for them than President Obama.

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  9. He thinks that gays and lesbians should have exactly the same legal rights as straight people.

    Including the right to marry a member of the opposite sex of so inclined, right? The fact that homosexuals prefer not to exercise that right is no reason to extend it to members of the same sex. At least that is the reasoning of Michele and Marcus Bachmann.

    Or perhaps marriage is not a right at all and can be refused by the government for whatever reason government finds fit. After all, plenty of first cousins find marriage laws unduly arbitrary depending on what state they live in.

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  10. In what way does he advocate for legal discrimination against homos?

    It’s all in his dissent against Lawrence vs. Texas. He presciently predicted a slippery slope if homosexual conduct was ruled constitutional.

    State laws against bigamy, same-sex marriage, adult incest, prostitution, masturbation, adultery, fornication, bestiality, and obscenity are likewise sustainable only in light of Bowers’ validation of laws based on moral choices. Every single one of these laws is called into question by today’s decision; the Court makes no effort to cabin the scope of its decision to exclude them from its holding.
    {snip}
    No purpose to discriminate against men or women as a class can be gleaned from the Texas law, so rational-basis review applies. That review is readily satisfied here by the same rational basis that satisfied it in Bowers–society’s belief that certain forms of sexual behavior are “immoral and unacceptable,” 478 U.S., at 196. This is the same justification that supports many other laws regulating sexual behavior that make a distinction based upon the identity of the partner– for example, laws against adultery, fornication, and adult incest, and laws refusing to recognize homosexual marriage.
    {snip}
    Many Americans do not want persons who openly engage in homosexual conduct as partners in their business, as scoutmasters for their children, as teachers in their children’s schools, or as boarders in their home. They view this as protecting themselves and their families from a lifestyle that they believe to be immoral and destructive. The Court views it as “discrimination” which it is the function of our judgments to deter. So imbued is the Court with the law profession’s anti-anti-homosexual culture, that it is seemingly unaware that the attitudes of that culture are not obviously “mainstream”; that in most States what the Court calls “discrimination” against those who engage in homosexual acts is perfectly legal;

    He goes on to say that he has nothing personal against gays but that strikes me as a bit disingenuous.

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    • yello:

      It’s all in his dissent against Lawrence vs. Texas. He presciently predicted a slippery slope if homosexual conduct was ruled constitutional.

      You seem to be under the mistaken impression that to think that the Constitution allows certain laws to be implemented is, necessarily, to think that those laws should be implemented. Your confusion is somewhat understandable, given that even some justices on the Supreme Court seem think they are supposed to rule based on their own moral compass rather than the constitution. But it is a mistake to think that, nonetheless. The Constitution says what it says and means what it means regardless of what our own personal morality might tell us should be the case.

      So no, Scalia’s opinion in Lawrence does not at all suggests that he advocates for legal discrimination against homosexuals.

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  11. @yellokjkt: “We have no 25th Amendment-like process to remove Supreme Court justices for dementia, not that Scalia has started drooling on the bench. Yet.”

    Scalia is hardly the justice with the most divergent or constructionist opinions to sit the bench.

    Anyhoo, there will never be a process to remove Supreme Court justices for any reason (aside, one assumes, treason or some such) as it is the Golden Snitch of the Quidditch game that is DC politics. No matter how little success you have in accomplishing your goals via legislation or democratic election, if you can get the Supreme Court to go your way you win the game, no matter what else is going on on the rest of the field.

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  12. @yellojkt: “Or perhaps marriage is not a right at all”

    No, it is not.

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  13. Scalia is hardly the justice with the most divergent or constructionist opinions to sit the bench.

    No, but the left wing press (and some conservatives) have taken to concern trolling about the increasingly bizarre language in Scalia’s dissents. Which I guess is one of the privileges you get to exercise in the minority.

    I love the analogy of the Supreme Court being the Golden Snitch. I’ve always thought that Quidditch was about the stupidest game invented. Why would you bother doing anything other than chase the Snitch?

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  14. What’s the talk of removing a Justice you don’t like. what you do threaten to do is expand the court and just like that, wheat you grow for yourself is now interstate commerce. because FYTW

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  15. @yellojkt: “Nobody seems to be debating whether or not Scalia is a homophobe.”

    The modern definition of that word seems to me: “Currently not a homosexual and with no plans to become one, and no particular desire to experiment with homosexuality, or otherwise disagrees with the idea that homosexuality entitles the homosexual to special rights and privileges and accommodations.”

    With that definition, Scalia would be a homophobe, as pretty much everyone who is outside of lockstep agreement with (or even just shows insufficient enthusiasm for gay marriage, etc) appears to be homophobic.

    As a pedant, I object to the term, as it is inaccurate and wishes to describe people who, by and large, and not afraid of homosexuals or homosexuality. Disapproval or approbation neither equals nor requires “fear”. Thus putting homophobia in the same category as claustrophobia, which offends my pedantic lingual sensibilities, while also irking me that a large group of people believe they can color my perception with such obvious marketing. Too many folks on the left embrace Neuro Linguistic Programming, if you ask me.

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    • KW:

      …while also irking me that a large group of people believe they can color my perception with such obvious marketing.

      Unfortunately these linguistic manipulations actually work on a lot of people. “Marriage equality”, “women’s health”, etc…they do it because it works.

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  16. @yellojkt: “I love the analogy of the Supreme Court being the Golden Snitch. I’ve always thought that Quidditch was about the stupidest game invented. Why would you bother doing anything other than chase the Snitch?”

    There is some sort of overall point ranking system that can, in some circumstances, benefit you over the season, if the bludger and quaffle players all the rest are really good and do their job. In some circumstances, the team that gets the snitch can still lose the game, but it almost never happens because the snitch is worth so many points, and the game would have to go on forever for enough traditional points to be scored to outweigh the 100 point bonus of the snitch). But Quidditch exists to provide a team sport in which young Harry Potter could be precocious, and allow their to be a school wizarding sport that would ultimately be entirely focused on Harry, not the nonsense the rest of the team was engaged in. Also, only the Seeker can go after the Snitch, and that’s all the Seeker generally does in the game, is try to locate and then chase the snitch.

    In DC, the Seekers would be lawyers specializing on SCOTUS cases, I guess. 😉

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  17. @yellojkt: “No, but the left wing press (and some conservatives) have taken to concern trolling about the increasingly bizarre language in Scalia’s dissents.”

    He’s a grumpy old man. I’ve know employees who complain about the nature of the workplace and decisions of co-workers who say worse . . . and they could get fired! Scalia’s there until he decides to leave.

    Man, what a sweet job.

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  18. “homosexuality entitles the homosexual to special rights and privileges and accommodations.”

    Like what? Better tables at brunch?

    If anything, SSM marriage fixes the issue of companies which issued domestic partner benefits only to gay couples since straight unmarried cohabiting couples had the option of getting married.

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  19. @jnc4p: “He’s not afraid of gays. He just recognizes that there’s no Constitutional right to gay marriage or even to engage in homosexual conduct. He’s right on both counts.”

    It’s like you’re suggesting the correct remediation would have been for the congress to pass a law recognizing gay marriage. Are you trying to say the SCOTUS shouldn’t be passing laws? If not, then what the heck is it there for?!

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  20. @yellojkt: “Both you and I know what he’s doing here. If he wanted to use a benign analogy he could have said that gays are no more a protected minority than redheads.”

    And it would have been a better comparison, as child molestation has an inherent issue of “age of consent” that muddies the analogy. Or they are no more a protected minority that foot fetishists. That way, it’s about the sexual proclivities of both groups without muddying it up with age-of-consent issues.

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    • KW:

      And it would have been a better comparison, as child molestation has an inherent issue of “age of consent” that muddies the analogy.

      Not for the purposes of the point Scalia was making. He wasn’t suggesting that there is no reason to outlaw child molestation that wouldn’t also apply to homosexuality. He was pointing out that there is no principle to be found in the constitution that would distinguish homosexuals as a “minority” from child molesters as a “minority”, such that homosexual behavior must be protected but child molesting behavior is not. The italicized part is the key point.

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    • Or they are no more a protected minority that foot fetishists.

      In what way have foot fetishists ever been discriminated against? Actually, they have been well served by the women’s fashion industry which very much caters to their proclivities.

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  21. @yellojkt: ““homosexuality entitles the homosexual to special rights and privileges and accommodations.”

    “Like what? Better tables at brunch?”

    Exactly! And something needs to be done about it. That’s why I’m voting for Trump!

    “If anything, SSM marriage fixes the issue of companies which issued domestic partner benefits only to gay couples since straight unmarried cohabiting couples had the option of getting married.”

    While that’s something of a non sequitur regarding my pedantic point about how we define “homophobia” (and also the frequency with which it is applied to anyone who disagrees with something that would seen to be beneficial to homosexuals generally, or perhaps just objects to the general idea personally), I don’t disagree. I would have much preferred to see same sex marriage made legal through a law, but I understand they were in a hurry and SCOTUS is for when you absolutely, positively must have a new law overnight, and can’t wait for elections and the tedium of the legislative process that would probably not have brought us legalized gay marriage for another twenty years . . . but, eh, it is what it is. I will not lose sleep over it.

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  22. @Scottc1: “Unfortunately these linguistic manipulations actually work on a lot of people. “Marriage equality”, “women’s health”, etc…they do it because it works.”

    I know. I weep for the language!

    I’m am determined to make “cisgendered” fail. Also, I refuse to use new personal pronouns, or, frankly, let people pick their own. Outside of “he” and “she” and “hers” and “his”. I’m never calling someone a “xer” or whatever.

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  23. @jnc4p: “we can’t even break into the tight communication circles to convince them that climate change is real.”

    Yeah, that’s the problem.

    “They are talking to people who agree with them, they are listening to news outlets that reinforce that point of view, and the president is probably the person with the least ability to break into that because of the partisan bias there.”

    That biased conservative media! Dang. If only there was some kind of “fairness doctrine” . . .

    Change those things and incentives are such that the opposing party would have little incentive to cooperate with the president of the other party on almost anything, unless they were getting everything they wanted, every way they wanted it.

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  24. I don’t disagree. I would have much preferred to see same sex marriage made legal through a law, but I understand they were in a hurry and SCOTUS is for when you absolutely, positively must have a new law overnight,

    I always like to point out that Maryland did pass marriage equality through referendum, thank you very much. I always argued that marriage equality needed to come about through a Full Faith And Credit Clause argument. People don’t go from married to unmarried just by crossing a state line. Under that argument individual states could refuse to issue licenses but would have to honor ones made in other states. The problem there is that then marriage is a privilege reserved for couples who can afford to travel. Much like abortion will be some day.

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    • yello:

      People don’t go from married to unmarried just by crossing a state line. Under that argument individual states could refuse to issue licenses but would have to honor ones made in other states.

      Why? To take just one obvious example, people go from being licensed to practice law to unlicensed to practice law just by crossing state lines, and one state is not obliged to honor a license granted in another state.

      The problem there is that then marriage is a privilege…

      With regard to legal marriage, a privilege (or burden!) is precisely what it is.

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  25. Also, I refuse to use new personal pronouns, or, frankly, let people pick their own.

    I am actually very partial to the singular ‘they’ which is now allowed by the Washington Post stylebook in certain circumstances.

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  26. I’m am determined to make “cisgendered” fail.

    I wish you would, along with “trans” and “cis” marriage–two perfectly good scientifically defined terms that have been adopted in order to make the speaker/writer sound more edumacated.

    As for “homophobia” not being correct because the person isn’t afraid of homosexuals, you’re about 50 years too late. It is what it is, and it has been defined to include “aversion to or discrimination against homosexuality or homosexuals” now. You’ll have to argue with Messrs Merriam and Webster if you want to change it back.

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  27. @yellojkt: “Much like abortion will be some day.”

    I think you perceive a very static linear future where things where all trends will continue inevitably in the same direction with linear progression. Just as likely you’ll be able to get an abortion at any minor medical clinic (only it will be called a “uterine cleansing”), and paid for by the single payer women’s health insurance (men will still have to buy their insurance on the ACA exchanges, but no one will because it will be much cheaper just to pay the penalties).

    Or, we’ll all be robots and we won’t have to worry about all that!

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  28. @michigoose: ” It is what it is, and it has been defined to include “aversion to or discrimination against homosexuality or homosexuals” now. You’ll have to argue with Messrs Merriam and Webster if you want to change it back.”

    A good pedant isn’t above saying the dictionaries are wrong. 😉

    What I object to aesthetically is the presence of the “phobe” in these terms. I really wish they had another term, is the association to legitimate phobias (and, indeed, I mean: homophobia? It sounds like “gay-scaredness”, but then the dictionary says: “despite saying “gayfrightened”, it doesn’t mean “frightened”, but rather refers to bigotry or prejudice . . . But “frightened” is in the word! Come on, dictionary!) . . . if the use of “phobia” to designate fears was archaic, I would feel differently.

    Alas, that battle is already lost.

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    • KW:

      On the definition of “homophobe”, it is actually pretty interesting to think about. It is hard to define because, 1) it is used primarily as little more than a insult and 2) unlike most words, it isn’t used to really identify any particular thing about the object of the insult, but is instead actually used to identify something about the user himself. It is basically a declaration about one’s own bien pensant political leanings and presumed moral superiority regarding anything to do with homosexuality. This is why it is not commonly used, but is used only by a narrow range of people with certain political inclinations, and it is used to insult people not for any single, consistently identifiable characteristic, but for a myriad of them. A person can be declared a “homophobe” for his religious beliefs, for his political beliefs, even, as we have seen, merely for his belief in federalism and his understanding of the meaning of the constitution. But in every case, the one common thread is that the speaker passionately opposes whatever the object of the insult believes, and is implicitly declaring “Look at me, aren’t I the properly tolerant one!”

      It is also used, not coincidentally, to shut down rational debate and avoid addressing any political controversies or claims about homosexuality on the merits. Like accusations of “racist” or “sexist”, it is used basically as a rhetorical bullying tactic which says, essentially, “Nothing you say is worth listening to, considering, or countering. You are wrong by definition.”

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  29. @yellojkt: “I am actually very partial to the singular ‘they’ which is now allowed by the Washington Post stylebook in certain circumstances.”

    I’ve used “they” for uncertain genders or multiple genders since I was in high school. I got in an argument with it (good natured) with my English professor in college, who insisted it was grammatically incorrect. Which, though true, seemed preferably to all other options, include the s/he and “he or she, her or his” repeated constantly, or when talking about guys who are also or presently girls but still have guy parts or vice versa.

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  30. @scottc1: “With regard to legal marriage, a privilege (or burden!) is precisely what it is.”

    A burden masquerading as a privilege!

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  31. Singular they is an abomination. Use his which is gender neutral. And also I’m told fluid.

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  32. And also I’m told fluid.

    Not touching that one. . . nope!

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  33. Same Old Lions… I texted my Packer fan friend before the half and predicted they would win…

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    • Defense on that last play was horrible. How do they leave a guy standing all alone at the 2 yard line? I did, however, pick the Pack in my pool, so I’m happy about it.

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  34. I have come to expect this out of the Lions, unfortunately… It has a losing culture, and losing cultures do these sorts of things… You should have seen the reaction of Stafford and Calvin on the sidelines.

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  35. no-brainer… which is why he wasn’t out there… we are talking about the Lions..

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