Thursday, May 25, 2017

Unitary Executive Theory

FBI Director Voyles: Are you asking me to ignore a suspect, Mr President?
The President: If the press...gets wind of what you're after and starts digging, I'll be--we'll be crucified.
FBI Director Voyles: So you're asking me to back off?
The President: Back off and chase the real suspects. Ignore it for a few weeks, that's all.
--The Pelican Brief

In the context of allegations that Donald Trump obstructed justice by interfering in various DOJ and NSA investigations, Judge Nap discusses the concept of the unitary executive.

Unitary executive theory holds that the president is the chief executive officer of the federal government and, therefore, everyone in the executive branch works for him. Because the president is the only one in the executive branch that is accountable to voters, there can be no people in the branch who are not under the chief executive's authority. It this weren't so, then vast areas of governance would not be accountable to the people. This would violate the right of people to be governed by the consent of the governed.

Under unitary executive theory, the director of the FBI and other directors of various agencies in the executive branch serve at the pleasure of the president. They are obliged to follow all orders and requests of the president or resign. Upon resignation, they may reveal the reasons for the resignations.

In opposition to unitary executive theory is the argument that people who serve underneath the president have an ethical duty to pursue wrongdoing even if the president demands or requests that they 'back off.' This is especially the case if the president is suspected of being involved in the wrongdoing. This argument posits that the president does not need to intervene because he ultimately has the power of the pardon, and can constitutionally terminate sentences of those who may be convicted of crimes prosecuted by executive branch agencies.

Here is an informative give-and-take between the Judge and Juan Williams on the matter in the context of Trump's troubles.

Wednesday, May 24, 2017

Widespread Unmasking

Evey Hammond: Who are you?
V: Who? Who is but the form following the function of what and what I am is a man in a mask.
Evey Hammond: Well I can see that.
V: Of course you can. I'm not questioning your powers of observation. I'm merely remarking upon the paradox of asking a masked man who he is.
Evey Hammond: Oh. Right.
--V for Vendetta

Deranged media are using the escapades of Donald Trump as an excuse to ignore stories that truly hold blockbuster potential. One involves growing evidence that the NSA under the Obama administration illegally unmasked the identities of US citizens in their surveillance of digital communications. A newly released FISA court order finds that what amounts to illegal searches were 'widespread' and created a 'very serious Fourth Amendment issue.'

The FISA court findings were the outcome of a hearing dated October 26, 2016--just days before the presidential election. Why the findings were 'sealed' until now is not explained in the article and unclear to me.

The discoveries and their timing cast additional suspicion on previous administration's possible use of surveillance apparatus to gain information about political adversaries.

Grapevine journalists, of course, prefer to discount factual court documents in favor of rumor and innuendo.

Tuesday, May 23, 2017

Compassion by Gunpoint

Feed the babies
Who don't have enough to eat
Shoe the children
With no shoes on their feet
House the people
Livin' in the street
Oh, oh, there's a solution
--Steve Miller Band

Penn Jillette states it well. Pointing guns at people and forcing them to surrender wealth to help the poor is compulsion not compassion. Forced charity is an oxymoron.


Charity involves voluntarily helping people on one's own. This is true compassion.

When you stand accountable before God, it seems likely, as Jillette put it, that you'll "get no moral credit for forcing other people to do what you think is right."

Calling it compassion equates to rationalizing robbery. When you vote in favor of strong armed government agents to do your bidding, the voting booth becomes a lever of aggression.

And you become a principal of violence.

Monday, May 22, 2017

Political War and Markets II

"Goddammit, when is somebody going to go on the record in this story?"
--Ben Bradlee (All the President's Men)

Following up on last week's missive involving all-out political war and markets, Fleck had additional exchange with 'Mr Skin' about the issue. Mr Skin writes in big blocks of text, but I want to reprint the exchange once again as published in its entirety because I plan to reference some of it in future posts.

Mr Skin: I am not a special trump fan - (more of an extreme case of Hillary phobia) - but the witch hunt going on now is almost exactly the same "play book" they (media and Democrats) used against Nixon. Given that many of today's "pundits" or self-proclaimed "political analysts" plus biased media editors and reporters were in kindergarten or not even born when Nixon blew up, they have no context for pursuing this thing, regardless of substance. This "thing" will not go away. In fact, even without anything tangible to hang something on, "they" don't need anything. Just make something up, spin it well out of context, broadcast the "accusation", thus attempting to force a denial, that in turn will be spun, twisted, "inflamed-on-social-media" for all the idiots to absorb, leading to more "sponsorship" for the witch hunt. The progression of time, heading toward the off year elections, merely aggravates Trump's problem. The Grahams and McCains, plus several other "fearful" or outright leftie congressional Republicans (RINOs - Republicans in Name Only) render Trump's "New Reality" - "It-Ain't-Happening-Dude". When he was elected I figured he may have a few months of peace, probably not any sort of "honeymoon", but I never thought his political opponents would, in effect, deliberately try to sabotage his presidency from day one. The "Rachel Madow" media lunatics and the "Maxine Waters" political lunatics are understandable but it also seems that everyone has out the "long knives". When the Nixon "playbook" started, there were mostly mild suggestions that he might be vulnerable. It took a while for the momentum to build up to the point where everyone piled on. The media always had a "thing" about Nixon, from his days as Ike's VP back in 1956-60. He was perceived as "slick" or phony and had earned the title "Tricky Dick". BUT, their displeasure was nothing like the outright venom shown Trump. Nevertheless, "they" started after him right after he was inaugurated in 1973. The relentless barrage of negative "Nixon Stories", filled with innuendo and speculation, gained momentum into 1974. He resigned in late summer of 1974, whereupon a market already down more than 25%, simply went straight down into September. The big indices lost about 50% from day one of the "witch hunt" in early 1973 until the bottom in September 1974. Of course, there were economic problems along the way, such as an oil embargo, but the assault on the President was unprecedented in modern times and it scared the wits out of both domestic and foreign investors.

Great opportunities grew out of that bear market. And our little money management firm was lucky enough to be in the right place at the right time. Today's "players" have never seen values like those found in late 1974. For context, consider Polaroid - the greatest growth stock since RCA in the 1920s. It had a lock on instant photography (doomed by Texas Instrument's digital revolution a few years later). PRD traded at 149 at the top in early 1973. It bottomed at 13+ in late 1974. It had no debt, and the stock price was not only lower than its working capital per share but also lower than its NET CASH in the bank. In effect, you got paid to own it, and EPS was $1.50. The most absurd value was Boeing - whose market cap was LESS THAN the selling price of three 747 airliners. Of course, such "stone age" stories are forever irrelevant these days, given direct sponsorship of markets by CB bureaucrats, but if enough panic hits a market, similar stories will appear again.

Fleck: So, the bottom line is you think the die is cast, that now, this will be 4 years of hand to hand media/Trump combat nearly 24/7 and that will take its toll at some point? Do I have that right?

Mr Skin: Yep. I think the media will keep trying to outdo each other going after Trump and his enemies will never give up looking for a way to destroy his agenda. Reagan was wildly popular and "they" even tried to get him. When Woodward and Bernstein went after Nixon, and gained "fame" by running a President out of office, "journalism" became a career ambition for a whole generation of "giant killers". The big question is whether the underpinnings of the stock market can remain strong if the "witch hunt" theme keeps playing. Of course, we have grown a new crop of "players" over the last few years, including a Fed (Bullard, etc.) that seems to panic every time the market dips. In any case, I can't see any logical reason for investors to ignore the possible threat that "they" might actually do serious damage to the political process. The whole thing makes me want to puke.

Sunday, May 21, 2017

Grapevine Journalism

"If that's all you got, you got nothing."
--Detective Harlan Regis (Murder at 1600)

Mainstream media are largely engaging in grapevine journalism. Reporting rumors and heresay. Treating innuendo as fact. Reciting fictional narratives. Reporting stories before corroborating them.


Grapevine journalists trap words in order to promote political agendas. They traffic in empty claims.

Saturday, May 20, 2017

All-Out Political War and Markets

It ain't nothing but a heart breaker
Friend only to the undertaker
It's an enemy to all mankind
The point of war blows my mind
--Edwin Starr

Fleck avoids politics in his daily commentary except when he sees politics as influencing market movements. Recently on Ask Fleck, a well-regarded contributor affectionately known as 'Mr Skin' shared his assessment of the Washington turmoil and its potential effect on markets. In response to several reader comments about the the post, Fleck posted his own missive yesterday.

I want to reproduce it in its entirety because Fleck captures what he terms the 'all-out' political war and its prospective impact on markets well, I think.

"Several people commented on [Mr Skin's] views on the Trump witch hunt (most favorable, but some not). However, I'm only posting this one so that I can clarify what I think the big point is that Mr Skin was making, that being the all-out warfare now underway.

"First, Trump has flaws, plenty of them. That isn't new news. What is new is the near hysteria from the MSM (and many politicians) about virtually anything he does (e.g., many Democrats and Republicans said Comey should go, due to what he did during the election campaign, and now most of those same people are defending him because Trump canned him, in their mind, for the wrong reason). But, the fact is, it almost doesn't matter WHAT he does. This group of people is against it, period.

"Second, Trump is a thin-skinned egomaniac and that will continue to cause problems. BUT, even given his flaws, he should at least get a fair shake on news items. Yet he does NOT (which of course gets him even madder). People who hate him feel like he couldn't possibly have beaten Hillary without somehow 'cheating' (i.e., the Russians stole the election) and they are mad as hell and want revenge, when in fact he beat the Republicans, Hillary, and the MSM because the so-called silent majority was fed up with how the country has been run.

"Now, WHY this matters is because the market ran up to the moon on hopes he would accomplish things that he could never have achieved even if he were a saint (which he ain't), but the absolute hatred on the part of the Democrats, MSM, some Republicans and the GOVERNMENT BUREAUCRACY means that he will be lucky to get any meaningful legislation passed for quite some time, if ever. At some point, the market will have to adjust to reality (and it will tank) and then maybe some people will see that the economy sucks. Of course, Trump will lose it even more when he gets blamed for all of that, too.

"So, this bit of politics looks like it will matter to markets, potentially in a big way, which is why I am addressing it. This could become a very big deal, as an all-out war among these various groups, which is what is taking place, is not only NOT bullish, it is very bearish, period."

Friday, May 19, 2017

Idea Markets and Interference

"And where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission."
--V (V for Vendetta)

Ideas are fungible and, like goods, naturally trade on markets. When these markets are free and unhampered, ideas trade liberally between buyers and sellers seeking to mutually benefit from the exchange. Competing ideas are considered, discussed, revised. Some ideas win, others are rejected.

Those fearful that their ideas will be rejected may be tempted to interfere with free, uninhibited exchange of thought. They seek to regulate trade by restricting what can be said and by whom. They want to restrict access to venues for broadcasting ideas. They twist words, quote out of context, report events in incomplete or dishonest manners. They try to shout down speakers with differing viewpoints.

When ideas can't compete on their own merits, then the purveyors of those ideas will seek to shut down markets where competing designs are likely to be judged as superior.

Thursday, May 18, 2017

Exhausting Possibilities

Inspector Richard: You're not too tired?
Jessica Kamen: Oh yeah, for sure. I could probably sleep for a week.
--Kiss of the Dragon

Domestic stock markets lost a couple of percent yesterday. Popular cause assigned to the slippage was the turmoil in Washington.

While Trump and the hysteria that he sponsors might help ignite selling, the truth is that this is a market has been operating under its own manic brand for quite some time. When that mania exhausts itself, then any news can reverse the trend. And once the trend is reversed, all news will be seen as bad by market participants.


Whether yesterday constituted the 'this is it' moment remains to be seen. Note that a down day of similar magnitude back in mid-March fostered no material follow-on effect.

Technically, yesterday's decline did no significant damage, and markets are bouncing moderately this morning after opening slightly red. Bears, who have been in hibernation for months (years?), will need more than yesterday's action to crawl out of their caves in size.

no positions

Wednesday, May 17, 2017

Obamacare's Greatest Impact

Ever have that feeling
Almost broke in two
Said that you were leaving
Like you do, like you do
--ABC

Judge Nap suggests that the greatest impact of Obamacare may be that it convinced more Americans that healthcare is an entitlement to be provided by government (i.e., provided by forced labor of others). The Judge conceptualized Obamacare as a stool with four problematic legs.

Constitutional leg. The premise that the federal government has lawful power to regulate the delivery of healthcare.

Legal leg. The premise that the federal government is obligated to provide health insurance to everyone in America.

Economic leg. The requirement that everyone in the US purchase and maintain health insurance.

Orwellian leg. The requirement that all health care providers in the US shall retain all patient records in digital format and the the federal government shall have access to those records.


None of those legs were repaired/replaced by the recently passed GOP-led House healthcare bill. That same GOP-led House voted multiple times to repeal Obamacare when they knew that it had no chance of making it thru the process.

Such fecklessness occurs when politicians sense that voters think that the public treasury has become the public trough.

Tuesday, May 16, 2017

Defying State Sanctity

Step into a life of maybe
Love is hard to find
In the church of the poison mind
--Culture Club

Interesting piece by Jeff Tucker on the root cause of Trump Derangement Syndrome--the left's ceaseless hysteria over the the actions of Donald Trump and his administration. Tucker thinks that the left, and really statists of all stripes, sees Trump as a threat to the institution of government.

Government is the statists' preferred tool for achieving their aspirations. Statists have at least 100 years invested in building government's image not as a taker, but as a giver. The president is seen as a high priest of political process with a duty to reflect the sensibility of government as good.

Trump is an outsider who, since his early days on the campaign trail, made it clear that political correctness is not part of his M.O. Unlike his predecessor who carefully adhered to institutional protocol, Trump has done anything but. Among other things, observes Tucker,

"[Trump] overthrew the respective establishments of two parties, tore right into the legitimacy of the national press, humiliated every expert who predicted his demise, and is now stumbling around Washington like a bum in a jewelry store."

As Tucker notes, Trump has not cut back on the size of the state in any meaningful way, and many of his policies (e.g., healthcare, infrastructure spending) largely preserve or increase central government scope.

What Trump is doing is ruining the statist vision of how a president should act, thereby discrediting a sacred institution in the eyes of many. As institutional prestige associated with the federal government declines, so does the state's legitimacy in the eyes of many.

For many statists, this is simply unacceptable. Trump is a threat that must go. The conclusion that many disciples have reached is that saving the old faith requires that this president be removed from office. Thus, impeachment chants from the statist church grow louder by the day.