Morning Report: Inflation falls

Vital Statistics:

 

Last Change
S&P futures 2928 3.1
Oil (WTI) 25.59 0.29
10 year government bond yield 0.71%
30 year fixed rate mortgage 3.36%

 

Stocks are higher this morning on no real news. Bonds and MBS are down.

 

Inflation at the consumer level fell in April, which was the biggest drop since 2008. The headline index fell 0.8% MOM and rose 0.3% YOY. This was primarily due to energy and airline flights. Ex-food and energy it fell 0.4% MOM and rose 1.4% YOY. Energy was the dominant trend, however food prices increased due to supply chain issues.

 

food prices

 

Small business optimism fell in April according to the NFIB. “The impact from this pandemic, including government stay-at-home orders and mandated non-essential business closures has had a devasting impact on the small business economy,” said NFIB Chief Economist William Dunkelberg. “Owners are starting to benefit from the PPP and EIDL small business loan programs as they try to reopen and keep employees on staff. Small business owners need more flexibility, though, in using the PPP loan to support business operations and liability protection so that all these efforts to support small businesses are not ultimately lost in costly litigation.”

 

Homebuilders are beginning to offer incentives to entice buyers. FWIW, D.R. Horton noted in its first quarter earnings that it hasn’t had to resort to price cutting. For the most part, the builders went into the crisis without a ton of inventory, so we shouldn’t see big price drops.

35 Responses

  1. We’ve gone from hoax hate crimes to hoax supporting hate crimes!

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  2. This was pretty good covering the Elon Musk leaving California kerfuffle:

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  3. The American mentality on display:

    “Inmates tried to infect themselves with the coronavirus to get early release, Los Angeles County sheriff says”

    https://www.washingtonpost.com/nation/2020/05/12/inmates-coronavirus-infect-los-angeles/

    Liked by 1 person

  4. A reminder of the nature of the Islamic State (remember them?):

    “Mothers, newborns among 16 dead after gunmen storm Kabul maternity ward

    An Afghan security officer carries a baby after gunmen attacked a maternity ward in Kabul on Tuesday.

    By Sharif Hassan and Susannah George
    May 12, 2020 at 12:27 p.m. EDT”

    https://www.washingtonpost.com/world/asia_pacific/gunmen-storm-kabul-maternity-ward-killing-13-including-2-newborns/2020/05/12/416a9174-9428-11ea-87a3-22d324235636_story.html

    Liked by 1 person

    • As long as moderate Islam and everybody whose not actively a terrorist turns a blind eye to, or gives a tacit endorsement, to the tactics of terrorism . . . thus will it always be.

      It’s frustrating that the progressive West gives them such carte blanche overall, but ultimately even if the West was united in holding Islam accountable for sexism, homophobia, and their extremists embrace of terrorism–I don’t think much would change until they get roundly rejected by moderate Islamic folks.

      I know they are rejected by liberal Islam–but those folks seem to be in a minority and often come off as straight apostates.

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  5. Goddamn.

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  6. My predictions on the tax cases outcomes follow/

    For the House cases – I think all will deny complete Presidential immunity, varying rules of thumb will be offered in separate opinions, and Roberts will say it is a political question and try to duck entirely. Thus I have no idea what the consensus judgment will be.

    I think NY will get to continue its investigation but be subjected to judicial oversight every time Trump while in office claims he is being impaired in doing his job. So it will be a slog until he leaves. On this case I think Thomas votes with NY State, maybe without reservation.

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    • What is the legal rationale for demanding tax records? Attached to some potential criminal investigation? I haven’t been paying that close attention, but it’s sounded to me like a fishing expedition to find embarrassing things in Trump’s taxes.

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      • Different rationales for the three cases and there will be a fourth rationale for the remaining case.

        1] Intel wants to know if Trump is potentially compromised by foreign entanglements and they do not have to take his word for it. Just as they did not have to take HRC’s word for Bengazi. Of course there is always a political motivation. The real question is not about political motivation but about the extent of the oversight power. It is not for another branch to determine “motivation”.

        2] NY State has credible allegations that the Trump org laundered money and evaded NY taxes, but how much they don’t know without the org’s books and records, and there are probably lots of other players who are not POTUS involved and the statute of limitations is hanging over the State’s head if they don’t get moving. This involves Trump as a private citizen.

        3] Financial Services claims this is part and parcel of the continuing Deutsche Bank investigation and of other related matters, FWIW.

        The fourth case, the one for what used to be the Ways and Means Committee has not yet been heard, but it is simply a demand to comply with the statutory authority of the Committee to look at ANYONE’s tax returns, and it will test the “Nixon” case that POTUS must reveal his tax returns – to the Committee with taxation oversight – because Nixon refused to, and when he did under subpoena it was found he underreported maybe $200K, IIRC. I think that one should be easy. The only issue I see there is that I think the returns and records must go to the Committee securely and not be available to the public. The Committee gets to tell IRS to collect the fucking tax, as it did with Nixon, but I don’t think much was revealed beyond that, IIRC.

        I don’t think any member of this Court will say in any of these cases that a President can hide whatever he wants from Congress, but they could say it is a political question, and duck. I think the CJ signaled that. I also think Roberts will try to fashion a decision most can agree to without impeding either the President or the Congress, if he cannot get a majority to say “political question.”

        Personally I think the NY state case should be a slam dunk for NY state, except for allowing the POTUS enough room to “govern”, as under Jones v. Clinton.

        If I were on the Court I would give the Intel Committee what it wants, as I cannot recall the Intel committee ever having been thwarted by the Supremes before.

        I might make Finance show a trial court that the Trump Org was one of the big players at Deutsche Bank during the years for which DB has already pleaded guilty to money laundering before I allowed a specific subpoena to it focused on Trump. That kind of showing would be a perfect real predicate for a focused subpoena. Or I might say Trump has no standing to fight a subpoena to Deutsche Bank. IDK. There are probably half a dozen ways that could go.

        Liked by 1 person

        • Mark:

          The only issue I see there is that I think the returns and records must go to the Committee securely and not be available to the public.

          And for anyone who thinks they won’t get publicly leaked, or even that that isn’t precisely the plan – I have a bridge on offer at a really cheap price.

          Liked by 1 person

        • I have a bridge on offer at a really cheap price.

          That is a real problem, I agree. Used to be – maybe as near as 20 years ago – that some committees were air tight, but it has not been so for a pretty long time. I think anyone voting for the first time would not recall a committee keeping secure testimony secure.

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        • Thanks for that. I think there should be some sort of protections for POTUS for civil litigation or even criminal prosecution for crimes occurring before assuming/running for office–especially if the investigation only began once they became a credible candidate for office. At the same time, statue of limitations for the crime would have to pause and resume after the president leaves office.

          Otherwise, I feel the incentive to go fishing for pre-election crimes and get the POTUS is too great. I think this was demonstrated with Whitewater and Ken Starr, myself.

          At the same time I’d be very surprised if Trump wasn’t guilty of some chicanery in New York State. So I get why they want them. Just everything about it while he’s president becomes political . . . which I think we should generally avoid, if possible.

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  7. Mark:

    Have you ever been involved in, or heard about, a criminal trial in which the judge invited amicus briefs?

    I read federal Rule 29 which regulates amicus filings in federal courts, and while there is no explicit prohibition on amicus filings in a trial court, it appears that the rules simply assume that amicus briefs can only occur as a part of the appeals process. The rules fall under the section “Federal Rules of Appellate Procedure”. They lay out circumstances under which a “court of appeals” may prohibit or reject an amicus filing. They refer to the parties in the case as “appellant” and “petitioner”. And they require that any amicus filing must indicate whether it supports “affirmance” or “reversal”.

    So it looks to me like the use of amicus briefs in a criminal trial is something that the federal rules don’t even contemplate.

    https://www.law.cornell.edu/rules/frap/rule_29

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    • This same Judge invited amicus briefs in another high profile case before him not too many years ago – Sen. Ted Stevens. He even asked for an outside former fed prosecutor to look at procedure in that case, IIRC. Actually, I just found that story:

      https://www.nacdl.org/Content/ProsecutionofSenatorTedStevens

      Addendum: It should not be assumed that Sullivan is going after Barr, as some of the press assume. Like Stevens, this is a high profile case where publicly known weirdness occurred, and Sullivan wants the entire picture from a third view before he overturns or affirms a guilty plea entered in his Courtroom. This may end in a contempt hearing for any number of persons involved either on the former or the current team. Sullivan will not assume by assumption that anyone has told him the whole story, or even the truth, at this point.

      I saw the practice widespread in trial courts on cutting edge civil rights cases in the late 60s, even the early 70s. Otherwise, no, but the power of a US District Judge is very great.

      Amusing story, c1978: federal criminal docket call. I am there on a court appointment – at the time there was no defender system and if you maintained a license to practice in the Austin Division of the Western District of Texas you had to accept court appointments. Anyway, a case gets called and the young Defendant pleads not guilty. The Judge says to him “Are you ready for trial?” The AUSA, Jerry Handy, interrupts and says his office is not ready to try the case that day as it was not scheduled. Judge Roberts says “You have had him in custody 14 months on a case with a 2 year sentencing recommendation and you aren’t ready?” “I set the schedule. I am ready.” The kid says “I don’t have a lawyer!”
      Judge Roberts says “Every lawyer in this room is ready to represent you right now if i say so and I am appointing you the best lawyer in Austin, Sam Houston Clinton. Sam, go represent this boy”. Jerry Handy splutters about jury selection. Judge Roberts loudly tells his bailiff to pick the first 35 people who walk by the Courthouse and escort them to the jury box where they will be instructed on jury selection. Handy yells “I represent the US Attorney’s Office and you can’t do this!” Judge Roberts says “I am the United States District Judge, I can, and I am doing this, and no matter what the jury says this boy will not be sentenced to more than time served and he will be free at the end of the day.” Handy gets a short recess, to call his boss, and then comes back and dismisses the case with prejudice. Judge Roberts explains to the assembled lawyers at docket call that the Justice Department has been losing first offender drug cases in the system, apparently on purpose, and he and all the Judges were tired of it. He sends the boy on his way and calls “Next!”

      To put it succinctly, very few acts of a District Judge that punish a prosecutor are ever found to be abuses of discretion.

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      • Mark:

        It should not be assumed that Sullivan is going after Barr, as some of the press assume…

        i actually assume he is going after Flynn.

        Like Stevens, this is a high profile case where publicly known weirdness occurred, and Sullivan wants the entire picture from a third view before he overturns or affirms a guilty plea entered in his Courtroom.

        His choice at the moment is not to overturn or affirm a guilty plea. It is to accept or reject prosecution dismissal of the case.

        I saw the practice widespread in trial courts on cutting edge civil rights cases in the late 60s, even the early 70s.

        Criminal trials or civil trials?

        To put it succinctly, very few acts of a District Judge that punish a prosecutor are ever found to be abuses of discretion.

        That makes some sense to me, but in the case at hand, Sullivan is punishing the defendant, not the prosecutor. (He ought to be punishing the prosecutors but so far he has not done so.)

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        • Sullivan is punishing the defendant
          That would be incidental.

          I don’t see how Flynn’s guilty plea can be withdrawn at this stage as he already failed on these same theories in December.

          Click to access 144.flynn.brady.denial.opinion.12.16.2019.pdf

          So I think all that is left is which prosecutorial team is going to be held in contempt, and whether Flynn has to serve a sentence. If it is the first team that is blasted, then the dismissal will be accepted, and Flynn will never serve any time. But I think he will remain “guilty”.

          I haven’t been familiar with Fed R Crim Proc in a long time so my guess on this is hardly better than anyone else’s. And I really think the point of the Dismissal [assuming good faith because of the recognized unfairness] was to keep Flynn from serving time, rather than to “exonerate” him

          On the other hand, if Sullivan permitted the withdrawal of the guilty plea he would not have abused his discretion because there is no one who could complain of it.

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        • Mark:

          That would be incidental.

          You are assuming motive that I do not assume.

          I don’t see how Flynn’s guilty plea can be withdrawn at this stage as he already failed on these same theories in December.

          The question at this point is not whether Flynn’s plea can be withdrawn by him, but whether the prosecution can dismiss the charges. I don’t see how the prosecution, having determined that the original charges were not defensible in court, would be prevented from doing so.

          So I think all that is left is which prosecutorial team is going to be held in contempt…

          I think that members of the original team ought to be held in contempt for, at the very least, violating its Brady obligations, but I doubt very much that it will happen. The judge already knows what they’ve done, and hasn’t held them in contempt yet. So I will bet you $10 that no one gets charged with contempt.

          But I think he will remain “guilty”.

          I will bet you another $10 that Flynn will ultimately not be deemed legally guilty, either because Sullivan finally allows the prosecution to withdraw the charge, or because Sullivan is eventually overturned on appeal.

          And I really think the point of the Dismissal [assuming good faith because of the recognized unfairness] was to keep Flynn from serving time, rather than to “exonerate” him

          I think the point of the dismissal is to begin the process of cleansing the DOJ of the corruption of the Russia collusion hoax.

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        • I say Russian Collusion delusion. More than a few people were hoaxing but this caught fire because so many people were deluded into hallucinating it was true and made sense.

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        • McWing:

          Good Andrew McCarthy piece on the Sullivan/Flynn thing.

          It was very good. We have watched for years as the leftist judiciary has routinely attempted to expand its power to encompass the legislative function. If Sullivan is any indication, I guess we should prepare for yet more attempts to expand it into executive functions.

          BTW, I thought this was worth noting:

          Without a hint of irony, Sullivan’s blatantly political directive is designed to frame the Justice Department as politicized.

          Isn’t this pretty much what leftists always do….hide their own sins by projecting them onto their opponents?

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        • There’s a big hole in the Andrew McCarthy piece:

          “Regardless of what the DNC and CNN have to say on the matter, Flynn is supposed to be presumed innocent as far as Judge Sullivan is concerned.”

          No, not after he pleads guilty he’s not.

          As noted elsewhere, he’s either guilty of what he originally plead to, or he perjured himself in the plea allocutions.

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        • jnc:

          There’s a big hole in the Andrew McCarthy piece:

          Yeah, I noticed that too, although I wouldn’t call it a “big” hole. A presumption of innocence isn’t the only obligation a judge has towards a defendant, and those other obligations don’t end just because someone has plead guilty, especially if they seek to withdraw that plea, and even moreso if the prosecution wishes to drop the charges.

          As noted elsewhere, he’s either guilty of what he originally plead to, or he perjured himself in the plea allocutions.

          Sure, but the perjury in the latter case would be to have claimed that he wasn’t coerced into the plea, when asked. And to me that is just a stupid pro forma question with no meaning. If you have been coerced into pleading guilty, announcing during the plea that you have been coerced into it has the same effect as simply not pleading guilty in the first place. In other words, if you are pleading guilty in order to avoid a threatened consequence, then you have equally been coerced into not acknowledging the threat. That is why I think it is a pro forma, meaningless question to ask defendants.

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        • It also seems to me that everybody knows guilty pleas are entered as part of plea deals or implied coercion when the defendant either is innocent or simply wouldn’t plead guilty without having cut a deal or been coerced. Ergo, and a general understanding that pleading guilty does not mean that the defendant is guilty or at the very least believes himself or herself to be guilty.

          And if you accept the logic that entering a guilty please when you are innocent is perjury, then all sorts of plea deals involve the government instructing if not coercing defendants to perjure themselves.

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        • Sure it’s pro forma, but it still matters as it’s not just a guilty/not guilty plea, but also the specific facts that were in the allocution.

          I don’t think it’s unreasonable for the judge at this point to question the farce that was perpetrated in his courtroom before wrapping things up.

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        • jnc:

          I don’t think it’s unreasonable for the judge at this point to question the farce that was perpetrated in his courtroom before wrapping things up.

          I definitely agree. But I don’t know why he’d need to solicit amicus briefs to do that. I would bet thatg he is planning something other than having a go at the prosecutors who perpetrated this farce. As I said, he’s already had plenty of opportunity to do that, and has refrained.

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    • sounds like the judge is just another partisan tool making it up as he goes along

      Liked by 1 person

      • I’ll wait for the actual ruling before assuming that. As Mark notes, he also tried the Ted Stevens case and went hard at the prosecution for their malfeasance then.

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        • jnc:

          I’ll wait for the actual ruling before assuming that. As Mark notes, he also tried the Ted Stevens case and went hard at the prosecution for their malfeasance then.

          Hopefully he does again, but I wouldn’t bet on it. He’s had plenty of opportunity to do so leading up to this point, and he hasn’t. And it wasn’t their malfeasance that led to his call for amicus briefs. It was their bosses in the DOJ putting an end to it that did so.

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      • This is some good snark on Flynn & progressives:

        Like

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