Authored by Steven Kovac via The Epoch Times (emphasis ours),

A Michigan judge will soon decide if 73-year-old Ross Barranco can be denied a donated kidney because he won’t take the COVID-19 vaccine.

“I just don’t see the logic of it,” stated Barranco in an interview with The Epoch Times. “Everybody knows an organ transplant procedure requires the nearly complete suppression of a recipient’s immune system so the body won’t reject it.

“Then why do I need to be immunized against COVID before the operation?”

When asked if he thought the vaccine would make any difference in his prognosis, he replied, “Yeah, the vax can kill me.

“To qualify for a transplant both of my kidneys have to be functioning at 20 percent or less. What if the vax destroys the remaining function before the operation? If it does, I’m done.

“The jab does absolutely nothing beneficial for a transplant patient,” he said.

Given the current COVID-19 testing capability, it remains unclear why transplant patients cannot be tested for COVID-19 before the operation. A negative result could then green-light the procedure.

It is also unclear why, given the data showing numerous fully vaccinated people have come down with COVID-19 multiple times, the shot is still being regarded by some hospitals as an immunization.

Barranco’s legal team made reference to a 2021 survey of 200 transplant centers across the country.

Of the 140 that responded to the survey, only half required transplant candidates to take a COVID-19 vaccine regimen.

“The vax can hardly be deemed medically necessary if half of the responding transplant centers are not requiring it,” said Deborah Catalono of the Liberty Counsel, a researcher tracking hospital transplant policies and a lawyer familiar with many similar cases to that of Barranco and Shier.

The Liberty Counsel is a non-profit, litigation, education, and policy organization dedicated to upholding religious liberty and Christian values.

Medical questions and safety concerns aside, Barranco, a Roman Catholic, actually refused the vaccine on religious grounds.

He said his faith and conscience do not permit him to receive a shot that he is convinced was developed using body parts obtained from aborted babies and has fetal tissue in its ingredients.

Vax-up or Else

On Feb. 1, 2022, Barranco received what he perceived as an “ultimatum” from the University of Michigan Health System in Ann Arbor.

“There’s an active list and a holding list for patients awaiting a transplant. At the time, I was on the holding list.

“That’s when the hospital gave me three months to get three COVID shots, or they would throw me off the list entirely,” said Barranco.

“I refused, and they threw me off. That’s when I contacted an attorney.”

Mary Clare Fischer, a public relations representative with the University of Michigan Health Transplant Center in Ann Arbor, outlined the hospital’s position in an email to The Epoch Times.

“[Our] policy aims to protect transplant recipients from complications of COVID-19 infection, which has had devastating effects in our patient population.

“Immunocompromised solid organ transplant recipients have among the highest risk of severe illness or death from COVID-19 infection.

“At present, all of the nearly 1,000 adult patients active on our waiting list are vaccinated against COVID-19 infection.

“As is true of all of our Transplant Center policies and processes, this policy is a critical step in partnering with our patients to maximize the safety of our transplant recipients and provide them the best opportunity to regain their health and quality of life through the gift of transplantation,” she said.

Fischer stated that the transplant center is one of a “significant number” of American hospitals that require the COVID-19 vaccination for adult heart, lung, liver, pancreas, and kidney transplant patients on their active lists.

The University of Michigan Hospital policy exempts critically ill patients who may not have time to complete the three-phase vaccine protocol, as well as patients with prior vaccine allergies.

Why Not Katie?

Katie Shier, Barranco’s co-plaintiff in the case, is an unvaccinated 35-year-old mother of five who is a candidate for a heart transplant.

She is being kept alive by a ventricular assist device that has developed an infection, according to the plaintiffs’ attorney, David Peters of the Pacific Justice Institute.

The Pacific Justice Institute is a non-profit legal defense organization specializing in the defense of religious freedom, parental rights, and other civil liberties.

The Institute is representing Shier and Barannco free of charge.

Shier, a Roman Catholic, objects to taking the COVID-19 vaccination on religious grounds.

On June 29, 2021, Shier was granted placement on the transplant waiting list.

U of M Hospital’s subsequently adopted mandatory vaccination policy now precludes her from undergoing the heart transplant necessary to save her life.

Peters told The Epoch Times that, due to the low functioning of Shier’s heart, at any time she could slip into “imminent or immediate danger and be rushed to the hospital” and maybe qualify for a transplant under the hospital’s vaccination exemption for the critically ill.

“Sadly, it looks like that is something the court will have to order. We have emergency motions ready to go,” said Peters.

Shier told The Epoch Times in a phone interview on Jan. 27, 2023, “I’ve been so busy, I haven’t had much time to think about my situation.

“It is in God’s hands. All I want to do is do God’s will. After much prayer, the Lord led me not to give in, but to file the lawsuit.

“I’m fighting for three things.

“The doctors said I have an infection that can only be cured by a heart transplant.

“I believe it’s wrong to require someone to take a dangerous vaccine, so I want to see an end to the mandates.

“And, most importantly, I do not want to take any vaccine or medication that has been tainted by abortion.

“Two of the major pharmaceutical companies making the vaccine developed it from the HEK-293 fetal cell line.

“Some vaccines are known to have fetal tissue in them, and some tests are being conducted on still-living fetuses without anesthesia,” she alleged.

“I’m fighting for a person’s right to refuse any vaccine that is associated with abortion,” she added.

Peters told The Epoch Times that some people misconstrue the case as a medical malpractice suit against U of M Hospital.

“It is not about malpractice. It is about due process rights.

“Both Ross and Katie regard UMH as one of the best hospitals in the world.

“For that reason, Katie won’t go elsewhere. She wants her new heart to come from UMH.”

Barranco told The Epoch Times that he checked out another transplant center, but he prefers UMH.

A ‘Rollercoaster’ Ordeal

Barranco, a petroleum geological engineer for 46 six years, has battled high blood pressure and diabetes for decades—the things he says caused his kidney dysfunction.

In September 2020, he was told to start investigating the various types of dialysis.

“I began talking to U of M in 2021.

“Eventually, they called me in for an in-person exam. They found both of my kidneys were not working right.

“The doctors do not want to remove a partially functioning kidney while it is still contributing, so the plan was to add a third kidney.

“Soon, I was approved to be on their holding list,” Barranco said.

His hopes for relief plummeted when a blood test revealed he had contracted an autoimmune disease that attacked his lungs and kidneys.

His transplant was sidetracked, and Barranco was placed on chemotherapy.

The chemo worked, and he recovered.

“That happened before I could begin dialysis.

“My plan always has been to skip dialysis if I could, because when it fails, as it eventually always does, that’s the end of the line,” he said.

After his recovery, Barranco’s hopes soared again when U of M Hospital officially put him on its active list.

Concern for Others

When his kidneys amazingly began to improve in response to some lifestyle changes, Barranco requested that the hospital drop him back down to the holding list, “so others more in immediate need of a transplant could take my place on the active list,” he said.

He also insisted, against the hospital’s recommendation, that he wait for a cadaver donor rather than a living donor.

“I figured a living donor would be reduced to one good kidney. He or she could possibly die on the operating table or die from post-op complications. It is a risky operation.

“Or, what if later in life the living donor developed high blood pressure or diabetes with only one kidney?

“There I’d be, doing just fine, but the person that helped me would be suffering. What about him or her?” said Barranco.

Barranco told The Epoch Times his goal is to have no more COVID-19 vaccine mandates, “so that future patients won’t have to go through what I have gone through.”

Political or Medical?

President Joe Biden issued an order through the Occupational Health and Safety Administration in November 2021 that would eventually result in the denial of organ transplants to unvaccinated patients like Barranco and Shier.

The federal order mandating COVID-19 vaccinations for health care workers and those professionally associated with them was narrowly permitted to stand by the United States Supreme Court in late January 2022.

Just prior to that decision, on Jan. 13, 2022, the High Court struck down the Biden-ordered Occupational Safety and Health Administration Emergency Temporary Standard mandating that private employers with more than 100 employees require that their workers receive the COVID-19 vaccines.

It was that February that Barranco received notice from U of M Hospital that he had three months to get all three shots or be completely disqualified for a kidney transplant.

“We jumped through all their hoops, and the hospital changed the rules in the middle of the game. They threw us off the active list.

“For people like Katie Shier and me, the message was clear—get vaccinated or die,” said Barranco.

Read more here…

So far this year, winter has been very mild. Millions of Americans are scratching their heads, asking ‘where is the snow’? 

Last week, New York City was slated for snow but received rain instead. This led the metro area to break a half-century-old record of the longest period without accumulating snow. 

But not all areas of the Lower 48 are missing out on winter—more than a dozen mountainous ski resort areas tracked by Bank of America recorded above-average snowfall. 

BofA analyst Shaun Kelley wrote in a note to clients Monday that 16 Vail Resorts they track have snowfall that is +30% year-over-year for this time of year and 51% over a two-year average. 

“Snowfall is healthy across the board, led by Tahoe, Park City, and Colorado. Tahoe and Park City have already surpassed their full-season long-term historical snowfall average, and there are still 2+ months left in the season,” Kelley wrote. 

He pointed out that even in the Northeast, where resorts have lacked snowfall, Vermont resorts received much-needed 2 feet of powder last week, while Hunter Mountain received a foot. Whistler was the only resort that has so far recorded below-trend snowfall. 

This season’s snowfall for Vail resorts is well above last season’s and the long-term average. 

The good news for ski resorts is winter is roaring back in early February. 

“Dangerously cold temperatures and wind chills are forecasted across the Northern Plains and Upper Midwest through early this week,” the Climate Prediction Center said. Colder weather is great news for Vail Resorts. 

Authored by John Ransom via The Epoch Times (emphasis ours),

The Department of Justice and the FBI may have little room to move in their handling of the Biden classified documents case, according to experts and GOP figures, who were skeptical of the agencies’ ability to recapture the confidence of a sizeable segment of the population who had lost trust in them. 

With the appointment of special counsel Robert Hur to investigate the revelations that Biden kept classified documents in various locations including his Delaware home, the spotlight has also turned brighter on the treatment of former president Donald Trump by the U.S. government’s justice apparatus over Trump’s possession of classified documents, the experts said.

“The American people have lost trust in Joe Biden’s corrupt DOJ and FBI after witnessing these agencies fully weaponized against Joe Biden’s number one political enemy by raiding Donald Trump’s house, but continue to cover up for the Biden Crime family,” Rep. Elise Stefanik (R-NY) a member of the House Select Committee on Intelligence, told The Epoch Times.

The alleged cover-up Stefanik was referring to is the yearslong investigations into Hunter Biden by the DOJ that have reportedly yielded “voluminous evidence,” but produced neither indictments nor dismissals by the federal agency.

As such, it will be difficult for the DOJ to credibly prosecute Trump while exonerating Biden for similar actions, yet prosecuting both Biden and Trump would be terrible and painful for the country, the expert said. 

On the other hand, finding both men innocent of an actual crime would deal a big blow to the DOJ and the FBI, tending to suggest that the treatment of Trump was just a political stunt by overly-partisan federal law enforcement agencies, they said.

And each of the experts couldn’t conceive of investigations that would find Biden guilty of a crime, yet Trump innocent.

Justice ‘Boxed In’

“I think the framing of the [justice] establishment being boxed in is right,” Ilya Shapiro, a senior fellow and director of constitutional studies at the Manhattan Institute, a conservative think tank, told The Epoch Times.

“The reason that [U.S. Attorney General Merrick] Garland appointed a special prosecutor so quickly, was because it was readily apparent that given that he called for one with Trump, he had to with Biden,” added Shapiro.

In November, Garland appointed former career Justice Department prosecutor and former chief prosecutor for the special court in The Hague, Jack Smith, as special counsel in the investigation surrounding Trump’s handling of classified documents.

Shapiro said that while the outcomes of the two cases won’t be exactly similar, he doubts it will result in a conviction for either Trump or Biden. 

“Whatever that outcome is, it’s not going to be both of them sitting in the federal penitentiary,” said Shapiro.

“I don’t know if Biden is going to pardon Trump and then self-pardon? We had that debate over the self-pardoning power two years ago. Is that going to be a thing again? Or is there going to be some sort of slap on the wrist for both of them and fine of several tens of thousands of dollars? I don’t know. But I do think that the cases are going to run in parallel,” he added. 

A Lose-Lose Situation

But even the appointment of a special prosecutor meant to quell distrust in the case of Biden raises more questions now than it does settle doubt about the fairmindedness of the DOJ, according to Paul Kamenar, chief counsel of the National Legal and Policy Center (NLPC), a conservative watchdog group.

“While it appears that Special Counsel Robert Hur has the necessary credentials to be appointed by Merrick Garland, NLPC is seeking documents through the Freedom of Information Act (FOIA) on the vetting process that was used to ensure his impartiality,” Kamenar told The Epoch Times. 

The FOIA request from NLPC asked the DOJ to provide a release of all documents relating to the vetting of Robert Hur prior to the announcement of his appointment including any information regarding any conflicts of interest that Hur may have had in the case.

Under the federal Code of Regulation, NLPC requested the documents be produced in 10 days as a “matter of widespread and exceptional media interest in which there exist possible questions about the government’s integrity that affect public confidence.”

Former congressman Mo Brooks (R-Ala.) told The Epoch Times that as a former prosecutor, he thinks that the only way for people to really evaluate potential bias by either a Trump or Biden prosecutor is to look at their work product once the investigations are complete, which means waiting both lengthy investigations to finish.

“Equal justice for all means that no matter your wealth, social status, or political power, the Department of Justice should treat every suspect and defendant the same,” said Brooks.

“I pray the Department of Justice will do that in this matter. Evaluate the evidence and turn a blind eye to the politics,” he added.

The waiting game for the work to be completed is likely to exact a toll on the DOJ and FBI.

Read more here…

By Tsvetana Paraskova of OilPrice.com,

Oil and gas operators in Texas should be prepared for severe winter weather this week, the Railroad Commission of Texas (RRC) said on Sunday, as snow and ice conditions are expected in parts of the biggest U.S. oil-producing state, including in parts of the Permian basin.

The RRC advised all operators under its jurisdiction in areas of potential impact to heed all watches, warnings, and orders issued by local emergency officials, and secure all personnel, equipment, and facilities to prevent injury or damage. Operators were also advised to monitor and prepare operations for potential impacts, as safety permits.  

Severe winter weather with low temperatures could lead to freeze-offs of oil- and gas-producing equipment and frozen pipeline valves and other infrastructure.

Winter Weather Advisories and Winter Storm Watches are in effect across parts of Texas, Oklahoma, and Arkansas for winter weather and hazardous travel starting Monday, the National Weather Service said on Sunday.

The Midland chapter of the NWS said that a Winter Weather Advisory is in effect on Monday morning for the eastern Permian Basin, where a light glaze of ice is expected. On Tuesday and Wednesday, A Winter Storm Watch is in effect for the eastern Permian Basin for potential ice accumulations up to 0.25″.

Early on Monday, freezing drizzle continued to spread across the Permian Basin, with visibility lowered in Hobbs and Midland/Odessa.

The previous severe winter event occurred just before Christmas when Winter Storm Elliott exposed the vulnerability of the energy system as natural gas and power supplies were strained, wells froze off, and utilities vastly underestimated the power demand during the huge storm.

Back then, Texas managed to avoid rolling blackouts, but power providers in other states implemented planned interruptions to manage the surge in power demand during the storm. While the Texas power grid managed to avoid catastrophic failures during the storm, the Electric Reliability Council of Texas (ERCOT) underestimated the surge in power demand.  

From Politico to Vice to various news agencies, mainstream media is busy echoing the conspiracy theories and wild speculations of some Western officials – with the latest being based on allegations by Finland’s foreign minister…

“Finland’s foreign minister hinted that Russia may have been involved in last week’s Koran-burning protest that threatens to derail Sweden’s accession to NATO,” Bloomberg writes.

FM Pekka Haavisto said over the weekend that the episode “raises the question of whether some third party is seeking to stir the pot — for example Russia — or some other party opposing the NATO membership and looking to provoke to achieve that. This is unforgivable.”

Here’s what Politico also wrote on Saturday: “Unfortunately, various activists in Sweden, some Kremlin linked, then decided to exploit this highly fraught situation, and by aggravating Erdoğan and Turkey, they’ve now helped turn the country’s NATO accession from virtually guaranteed to one that’s now in serious jeopardy — and other countries should learn from this mess.”

Turkey has suspended all high-level talks with Sweden related to its NATO application, and more recently suggested that Finland could be accepted alone, without its Scandinavian partner.

President Erdogan and his top officials expressed outrage that the Quran-burning activist Rasmus Paludan, who is leader of Danish far-right political party Hard Line, has had police protection during what are at this point multiple Quran-burning demonstrations over the past week-and-a-half.

Finland has still voiced that it wants to stick by Sweden in their joint NATO bids, and hopes to receive approval to join the military alliance by July, according to Monday statements. Turkey has remained the big veto standing in the way.

One key and obvious problem in presenting Paludan’s latest Quran-burnings as part of some high level Kremlin sponsored plot to derail Sweden’s NATO bid is that he’s been well-known going back years as holding highly controversial, anti-Islam demonstrations featuring Koran-burnings.

This has actually happened in multiple northern European countries, to the point that some have imposed temporary bans on his entering their borders. In past decades, similar incidents have provoked fury and media attention in the United States as well, for example in the case of Florida pastor Terry Jones. This hugely controversial phenomenon, part of some fringe far-right movements, hardly needs ‘Russian influence’ for it to be a thing.

The Biden administration has halted the provision of licenses for US companies to export technology to Huawei, as it moves closer to imposing a total ban on the sale of American technology to the Chinese telecom equipment maker.

According to the Financial Times, the commerce department has sent notification to various companies to let them know that it would not longer grant export licenses to sell American technology to Huawei – which US national security officials believe helps China engage in espionage.

The move comes after the Trump administration imposed severe restrictions on exports to the Chinese telecom giant, placing it on the “entity list,” however the commerce department had still been granting licenses to various companies for products that were unrelated to 5G telecom networks.

The move comes as Washington steps up efforts to work with allies to slow China’s push to develop cutting-edge technology such semiconductors that are used in artificial intelligence and hypersonic weapons. The US last week reached a trilateral deal with Japan and the Netherlands that would impose restrictions on companies in those countries exporting certain chip-making equipment to China. -FT

In October, the Biden administration imposed unilateral restrictions on the export of semiconductor manufacturing tools. 

Developing…

Via SchiffGold.com,

There is a relentless push to raise the minimum wage, both at the state and national levels.

Minimum wage advocates somehow think that their wishful thinking can override basic economics. But no matter how much they tell you otherwise, supply and demand are a thing. Raising the cost of labor will mean less labor employed, all other things being equal.

But every so often, we get an economic study that claims basic economics has been overturned.

But as André Marques explains, no matter what these studies purport to show, the minimum wage creates unemployment and a lack of opportunity for people with little or no work experience or skills.

The following was originally published by the Mises Wire. The opinions expressed are the author’s and do not necessarily reflect those of Peter Schiff or SchiffGold.

The 2021 Nobel Prize in Economic Sciences was awarded to David Card, Joshua Angrist, and Guido Imbens. David Card received the award for his paper (coauthored with Alan Krueger) “Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania.” This was used by some as scientific proof that the minimum wage does not create unemployment and should be raised. However, this is untrue, and even Card and Krueger do not draw this conclusion.

Why the Minimum Wage Creates Unemployment

According to Austrian economic thinking, the scientific method (isolating variables and changing others to verify the possible relationships between them) is not applicable to economics, which is not a natural science.

Instead, Austrian economics relies upon praxeology, the study of human action, which is complex and not very predictable since one cannot use control variables in this context. It is only possible to carry out “pattern predictions” as F.A. Hayek explains and Jesús Huerta de Soto mentions in this book:

These predictions are of an exclusively qualitative and theoretical nature and refer to the prediction of mismatches and effects of lack of social coordination caused by institutional coercion (socialism and interventionism) that is exerted on the market.

Here are some examples:

1. The increase in the money supply tends to cause prices to increase, but it is not possible to know exactly what the level of price inflation will be. The government releases several price inflation indices, but for many reasons, they do not represent the actual price.

2. Taxes harm the economy because the government wastes resources in unnecessary and unsustainable ventures since the government does not operate under the profit/loss mechanism.

3. Artificially low interest rates create malinvestments that lead to business cycles. This prevents efficient resource allocation since interest rates do not represent real-time preferences.

The minimum wage is a barrier to entry for people with little or no work experience or skills. If the minimum wage is above the value that a person creates, there will be no incentive for the company to hire.

Thus, like other government interference in voluntary transactions between an employee and an employer, the minimum wage harms the weakest party of the transaction. The employee gets a lower salary (since the company must bear these costs) and consumers ultimately pay higher prices. The cost of any imposed law or of a voluntary transaction is always paid by the weakest party in the transaction.

The freer the market, the greater the degree of competition or potential competition. Companies must invest in productivity to lower their prices. The freer the market, the better the working conditions that companies must provide. After all, if there is a high degree of competition or potential competition, it is easy for another company to attract professionals by providing working conditions that are at least a little better.

All labor costs and regulations make hiring more expensive. Thus, the higher the salary (generally in jobs that require specific training), the higher the cost of the employee, and the lower the chance less experienced people will start a career. To offset the cost, companies will only hire the most experienced and skilled people.

It can be argued that the minimum wage in Germany is €10.50 per hour, and Germany has a lower unemployment rate than Portugal, which has a minimum wage of €4.75 per hour. However, the minimum wage is not the only government intervention in voluntary transactions. According to the Heritage Foundation, Portugal is less economically free than Germany. Portugal also has a higher public debt to gross domestic product ratio.

Germany is not much more economically free than Portugal, but Germany is free enough for the Germans to be more productive than the Portuguese. Thus, a minimum wage of €10.50 per hour in Germany does not do more damage than a minimum wage of €4.75 per hour in Portugal, which has a weaker economy.

Card and Krueger’s Case Study

Card and Krueger’s paper analyzes the effect of the minimum wage on the fast-food industry in Philadelphia (a city split between Pennsylvania and New Jersey). In April 1992, the minimum wage in New Jersey was raised from $4.25 per hour to $5.05 per hour. Pennsylvania’s minimum wage did not change at the time.

Therefore, Card and Krueger chose a “natural experiment” (mentioned in Joshua Angrist’s and Guido Imbens’s studies), a situation that occurs spontaneously but allows for an experiment. Two examples of natural experiments include the Cold War separation of East and West Germany and the separation of North and South Korea. Note that natural experiments, unlike experiments in the natural sciences, cannot be controlled. They are also neither spontaneous nor natural as they did not occur by individuals’ choices. But it is possible to observe some differences between each variable (the sides of each territory).

Card and Krueger’s study examined the side of Philadelphia with a minimum wage increase (New Jersey) and the side with an unchanged minimum wage (Pennsylvania). Normally, there should be an increase in unemployment on the New Jersey side, correct? The paper shows that, in fact, there was a small increase in employment. Why?

In the conclusion, Card and Krueger state that none of the existing models explain what happened: “Taken as a whole, these findings are difficult to explain with the standard competitive model or with models in which employers face supply constraints (e.g., monopsony or equilibrium search models).”

Card and Krueger also note that fast-food prices “increased in New Jersey relative to Pennsylvania, suggesting that much of the burden of the minimum-wage rise was passed on to consumers.” They mention later that no evidence was found to prove that “the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.”

The paper also shows that wages have increased to a median value within New Jersey’s wage range. Therefore, some businesses were already paying more than the new minimum wage, and the increase did not make much difference. But this happened specifically in the fast-food industry. There is no evidence that it did not cause unemployment in other sectors or long-term unemployment (including the fast-food industry since the study was limited to a single city using data from two years after the minimum wage increase).

The Consequences of the Minimum Wage Increase in New Jersey

In economics, consideration is given to that which is seen, and that which is not seen. Imagine that the government decides to build a bridge and it raises taxes to do so. We can see people who are employed in the construction and people using the bridge after it is finished. However, we do not see the people who became unemployed, did not get (or got smaller) raises, or the people that were unemployed and could not get jobs because of the tax increase (which forcibly diverted resources that would have been used voluntarily in other ventures).

In the case of the minimum wage increase in New Jersey, we see that there was no increase in unemployment in the fast-food industry, but there are two things we do not see:

1. The consumption that individuals had to cut due to the increase in fast food prices

2. The reduced revenues in other industries (since consumers had to pay more for fast food), which invested less in increasing productivity (i.e., because they had a harder time maintaining or lowering their prices) and hired fewer or even fired some people

Of course, these are extreme extrapolations. But given that consumers had lower disposable income, these consequences occurred at least to some degree.

Conclusion

The minimum wage creates unemployment and a lack of opportunity for people with little or no work experience or skills. Only if the minimum wage was set below the productivity of all individuals, would it not cause unemployment. This is unlikely since the minimum wage would have to be low enough that it would become irrelevant as a government voting tool.

It may come as a bit of a shock to those who have been following the creeping freeze in housing transactions as the bid-ask spread grows to monstrous proportions, leading to a record crash in pending home sales…

… and collapse in US home prices, especially on the West Coast…

… but even though mortgage rates ticked higher back to 6% in January, there is growing speculation that the housing market has bottomed. Why? Because as Goldman’s Rich Provorotsky notes, “bet you didn’t know there were housing price futures…they bottomed in Q4 and have been rallying.” Indeed, the Housing Composite Index traded on the CME is up decidedly in the past month after hitting a 16 month low in November.

Why this surprising bounce? A big reason for the unexpected rebound may be a recent report from real estate company Redfin which last Wednesday reported that “the housing market has begun to recover from a trough in the second week of November with buyers returning at a faster pace than sellers. The number of Redfin customers asking for first tours has improved by 17 percentage points from the November low, and the number of clients contacting.”

Furthermore, according to the report, Redfin agents to begin the home-buying process has improved by 13 points: “I’ve seen more homes go under contract this month than in the entire fourth quarter,” Angela Langone, a San Jose, California, agent, said in the report.

Among notable market moves, Redfin points to mortgage applications which are up 28% from early November as the average 30-year-fixed mortgage rate has dropped to 6.15% from its peak of 7.08% in November, the biggest decline since 2009. Pending home sales rose 3% in December from November.

Preliminary data on the share of Redfin agents’ offers facing bidding wars points to small upticks in the Seattle and Tampa markets this month (however, since this is an uneven trend, expect it to take some time before bidding wars nationally show an upward trend).

“Bidding wars are back in Seattle,” said local Redfin real estate agent Shoshana Godwin. “One of our Issaquah listings got 12 offers and is under contract for $155,000 over the $1.4 million list price. The buyer waived every contingency, handed over $300,000 of earnest money and is letting the seller stay for free for two months after closing. Another home in Seattle’s popular Ballard neighborhood was recently delisted after sitting on the market for over three months. The seller relisted it last week and it went pending in under a day.”

Eric Auciello, Redfin’s team manager in Tampa, has seen three modest single-family homes priced around $300,000 wind up in bidding wars in central Florida this month, with 16, 17 and 23 competing offers, respectively.

More in the full report here.

But while one can accuse Redfin of bias – after all the company recently laid off some 13% of its employees due to the housing market collapse so it is certainly interested in sparking some animal spirits in the sector – it is not alone in predicting a housing recovery. One week ago, Goldman’s Jan Hatzius published the bank’s Housing Outlook for 2023 in which he predicted that “home sales appear set to turn higher.” That’s because “mortgage purchase applications have averaged 9% above their October trough so far in January and survey-based measures of purchasing intentions have rebounded sharply” and while Goldman expects that existing home sales could decline slightly further “but will likely bottom in Q1 (GS forecast: Q1 average of 3.85mn saar vs. 4.02mn in December) before rebounding modestly by year-end (GS forecast: Q4 average of 4.1mn).”

Here are some more observations from the Goldman note (full report available to pro subs):

We forecast that housing starts will take longer to stabilize, declining to a trough pace of 1¼mn in 2023Q4 (vs. 1.4mn in 2022Q4) before recovering next year. We expect completions to total 1½mn this year, the most since 2007, which will help to clear the backlog of homes under construction and contribute to a modest increase in the homeowner vacancy rate (GS forecast of 1.2% in 2023Q4 vs. 0.9% now and 1.4% in 2019Q4).

We expect a peak-to-trough decline in national home prices of roughly 6% and for prices to stop declining around mid-year.

On a regional basis, we project larger declines across the Pacific Coast and Southwest regions—which have seen the largest increases in inventory on average—and more modest declines across the Mid-Atlantic and Midwest—which have maintained greater affordability over the past couple years.

Higher rates and lower home prices will increase the drag on GDP growth from negative wealth effects and declining mortgage equity withdrawal, but we believe that the aggregate drag on GDP growth from the housing sector peaked in 2022Q4 at 1.1pp and will moderate to just 0.25pp by 2023Q4.

If the housing price futures market – and Goldman – is right in pricing in a housing trough than the consequences could confound markets: on one hand, a stabilization in housing will likely make any coming recession less severe; on the other, since housing is the primary channel by which the Fed can slowdown the economy, any failure to cripple this key US asset, could mean that Powell will be stuck in a “higher for longer” mode for, well, longer than the market expects. As a reminder, as the following Morgan Stanley chart shows, consensus is that the Fed is about 8 months away from its first rate cut, which will be promptly followed by ~4.5 25bps rate cuts.

More in the full Goldman note available to pro subs.

Via ‘The Space Worm’ Substack,

Mainstream outlets perfectly content with shallow coverage as long as they can juxtapose “Elon” and “Fraud” in the same headline…

Am considering taking Tesla private at $420. Funding secured.

— Elon Musk (@elonmusk) August 7, 2018

This tweet spawned a potential billion-dollar lawsuit.

Before looking into the trial, I did not think it would be all that interesting but was surprised at how many relevant facts surrounding the case — from the lead plaintiff’s blatant lie on the stand to the glaringly illogical basis for the suit — were being omitted by mainstream coverage. So, I decided to describe the situation in more detail. Hope you enjoy…

Background of Lead Plaintiff

In 2018, Glenn Littleton was chosen as lead plaintiff — the representative of the class-action suit — among nine candidates who initially attempted to sue Mr. Musk over the above tweet. Six of the other vying plaintiffs were investment firms. Littleton himself is a veteran derivatives and commodities trader, and while he’s now 71, he hasn’t slowed down one bit. He traded over $10 million in Tesla options in Aug ‘18 with over 470 unique trades for the month, public court filings revealed. Several individual transactions exceeded $250,000 in value. In 1984, Littleton was fined by the Commodity Futures Trading Commission (CFTC) for “wash trading” — fake transactions that inflate an asset’s perceived trading activity. His license with the commission was briefly suspended as a result. In short, he’s been around the block and knew the risks he was taking on.

Taking the stand on the second day of the trial, Littleton said he viewed Musk’s “funding secured” tweet as “absolute,” then scrambled to unwind his options positions. Disclosed emails between Littleton and his stock broker at the time reveal this to be a complete lie.

“A lot of people thought it was a hoax… I saw so many red flags with Elon and Tesla,” Littleton wrote, not even four hours after the tweet was published. 

An earlier email further demonstrates Littleton’s attitude towards the tweet, calling it a “rumor” and saying, “I don’t think there is a chance in hell that the other shareholders would agree to that price.”

Littleton’s impression of the veracity of Elon Musk’s tweet could not be further from “absolute.”

Now for an analysis of the lead plaintiff’s derivatives trading and the losses he has claimed…

Littleton says the tweet has cost him $3.5 million. In a prior 2018 hearing, Calif. Judge Lucy Koh stipulated that Littleton’s “argument fails,” stating that “[Mr. Littleton] received more money from selling at fraudulently inflated prices than he spent purchasing.”

“Even if he lost money in all of his transactions, this amount was reduced by his Class Period sales when the prices were inflated,” the judge continued. Here, Class Period refers to Aug 7 – Aug 17, 2018 (which is the timeframe the plaintiffs are alleging was affected by Musk’s tweet).

We will get to whether prices were actually “inflated” shortly, but assuming they were (as the prosecution is alleging), this would be true. However, Littleton includes several trades outside the Class Period in his Profits & Losses statement to exacerbate his losses. To be fair to Littleton, there’s a case to be made that if one bought a derivative before the “funding secured” tweet and sold amid the panic, then those losses should be included too.

Let’s look at when Littleton entered into most of his contracts:

Littleton bought and sold a mixture of calls and puts but was overwhelmingly long Tesla and owned far more contracts than he had sold short. Given he exited these positions at relatively similar prices to when he entered, he lost money on nearly all of his pre-August contracts. Anyone who has traded options will tell you (and as someone who has lost a considerable amount of money trading them): IF SEVERAL MONTHS TRANSPIRE WITHOUT A SIGNIFICANT MOVE IN THE UNDERLYING STOCK PRICE, YOU ARE GOING TO LOSE MONEY OWNING OPTIONS.

There is no argument to be made that if he had held beyond the period afflicted by Elon’s tweet, that he would have been made whole. The stock price gyrated a bit thereafter, but by January of 2019 (when roughly half of his contracts expired), it’s hovering around Littleton’s entry points. In fact, it’s a bit lower, so assuming he remained long, his losses would have been far greater. 

Judge Koh was absolutely correct. If anything, Musk saved Littleton from even further degradation in the price of his options.

Logical Incoherence of Lawsuit

Now to assess the inflation allegation…

The entire basis for the lawsuit is — according to the presiding Judge Edward Chen — that “Mr. Musk’s statements led to a trading frenzy that drove up the value of Tesla’s shares.” Additionally, the jury is being asked to “determine the amount of artificial inflation” on Tesla’s share price “during the Class Period” (which remember is Aug 7 – Aug 17, 2018).

However, it is objectively NOT the case that the stock inflated (even relative to other tech stocks) during that time frame.

Yes, Tesla stock did rally 11 percent on the day of the tweet but moderated two days later to just 3.1 percent above pre-tweet levels. It fell further from there, down 10.7 percent for the period in question, a span during which the tech-centric Nasdaq Composite index increased by 1.2 percent.

Either reduce the Class Period to a span of three days or change the argument to say that Elon “manipulated” as opposed to “inflated” or “drove up” the stock price. The current structure of this case is completely incoherent.

Lastly, the computational tasks being asked of the jury are truly outlandish. If determining the degree to which Musk’s tweet affected the stock price wasn’t hard enough, try retroactively calculating the changes in implied volatility for 17 different options contracts assuming that Elon Musk did not publish his tweet. This is — no joke — what the jury will have to discern on Feb 3:

Explained in a different wording in the court document, the jury will be asked to calculate “what the implied volatilities for each Tesla stock option traded during each day of the Class Period would have been but for Mr. Musk’s tweets.”

The court is essentially saying to the jury: “Imagine, if you would, a world in which Elon Musk did not publish his $420 tweet. Now, how do you think the IV component of these option contracts would have fluctuated over the course of that week in August?” By the way, here is part of the equation involved in calculating an option’s implied volatility:

On what planet could anyone — let alone a random collection of San Franciscans — possibly know the answer to this?! And their answers have bearing on whether Musk must dole out billions of dollars…

Conclusion

I could see this class-action having merit if the people affected were long-term investors, not speculating options traders. To be eligible, one should have to prove they held equity (not a derivative) in Tesla for at least one year prior to the disputed tweet. The thing is, if those were the requirements this lawsuit would never have come to pass in the first place. What equity investor would sell at ~$370 when they can wait for a rumored buyout at $420? And Tesla investors who have held until today have nothing to complain about. Keep in mind, these are pre-stock split prices. The stock is currently worth over 6x what it was then.

This trial is ridiculous and I suspect much of the media coverage is intentionally shallow. That way, it’s easier to create a fantasy in which Elon has manipulated “the little(ton) guy” with his lies and irresponsible antics.

As for Elon’s tweet and whether the funding was truly “secured,” there is an argument that this was not technically true at the time it was made. I won’t go into the weeds here as it’s not relevant to the critiques contained in this article, but a text exchange between Musk and the top Saudi investor demonstrates that the deal was VERY serious and had expected to go through. That, and just two weeks later, internal documents reveal Tesla met with Goldman Sachs and Silver Lake representatives who assured Tesla’s board that “the funding was available from a variety of sources.”

So… if we are going to start policing the fringe cases of fraud that border on harmless exaggeration, I’ve got several restaurants in my neighborhood claiming to sell the “best burger in town” whom I’d like to sue.

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Authored by Daniel Lacalle,

Every time the United States reaches its debt limit, we read that it is important to reach an agreement to lift it. The narrative is that the debt ceiling must be raised, or the US economy will suffer a severe contraction. There is even an episode of a TV series, “Designated Survivor”, where the character played by Kiefer Sutherland places lifting the debt ceiling as the priority to get the U.S. economy on track. The debt ceiling is viewed as an evil and anachronistic burden on growth. It is not.

Analysts all over the world consider the debt ceiling a non-event because Congress always agrees to increase it. As such, markets do not even care. Congress has raised the debt ceiling on time on over eighty occasions since 1960, according to S&P Global. The rating agency points out that Congress has passed legislation to raise or suspend the debt ceiling seven times in the last twelve years (in 2011, 2013, 2017, 2018, 2019, and twice in 2021).

The U.S. Treasury has announced it will start implementing “extraordinary measures” to fulfill its legal obligations. These extraordinary measures would give the government the possibility of extending the deadline until early June. Analysts and commentators say that Congress faces two options: either raise the debt ceiling or suspend it. Really? No one seems to think of the urgent need to cut spending.

The problem of the United States’ debt is not one of receipts. It is created by the constant increase in mandatory spending. Governments continue to raise taxes, and when the economy grows, they spend more. However, when the economy stalls or declines, they spend even more. In fiscal year 2022, the government spent $6.27 trillion. In 2015, it was $4.7 trillion. There is no revenue measure that would cover an increase of such magnitude and maintain it every year.

Blaming the deficit on tax cuts makes no mathematical sense and assumes a confiscatory and extractive view of the economy, where the private sector must always provide rising revenues to a government that always spends more.

It is interesting to see how the debate has shifted to tax cuts, which did not reduce receipts, instead of spending that never generates the announced fiscal multiplier or reduces the deficit.

Those who say that the deficit would have been solved by eliminating the last tax cuts have a problem with mathematics. There is no way that any form of revenue measure could have covered a $1.6 trillion spending increase. Even if you believe in the idea that the government will always collect higher receipts from massive tax increases, which is false, only one year of mild recession would balloon the deficit and debt again.

The solution to the United States budget deficit is not more taxes. Even in the most optimistic receipt scenario, there is no tax hike program that would even start to address the structural deficit, estimated at one trillion dollars a year. Expenses are annual and consolidated, but receipts are cyclical and depend on the health of the economy. Therefore, revenue measures never reduce debt.

When governments say they will only tax the rich, they are treating citizens as if they were children. There is simply no way in which the government would collect every year between half a trillion to a trillion more only from a handful of rich people whose wealth is mostly in shares.

Deficits are always a spending problem. However, none of the parties want to address the ballooning levels of US debt by reducing expenditure. Therefore, they always agree on increasing public debt, which makes the economy weaker.

The solution for many is printing money and raising taxes. More taxes hurt the recovery, damage the job improvement potential, and reduce investment in the economy. More taxes mean less growth and no deficit improvement. More taxes and more printing mean that, added to those negatives, real wages decline, deposit savings evaporate, and the inflationary tax destroys the middle class.

Those that say deficits are reserves that the government creates for the private sector and that deficit spending is good for growth because a monetary sovereign country like the United States can spend and borrow as it pleases are simply lying. If deficit spending were a source of reserves that benefited the private sector, the United States’ productivity, growth, investment, and consumption in real terms would be off the charts, not sluggish, and real wages would be rising, not falling. The United Kingdom and Japan have proven that pushing the limit on debt, taxes, and spending only brings stagnation and declining real wages.

Printing and raising taxes are not social policies. It is profoundly anti-social, as it destroys the middle class and makes the economy weaker. Raising the debt ceiling is also extremely negative for the middle class because it means more taxes, lower purchasing power of the currency, and stagnation in the future.

There is plenty of room for efficiency in the United States budget. However, if there is an incentive to pass the imbalances to the next generation, governments and voters will agree to do it. There will be a point where the United States’ ability to disguise its massive imbalances using the currency and debt markets will evaporate as confidence in the economy and the government diminishes. If uncontrolled spending is not addressed, that moment may come sooner than many think.