- The state of Oregon makes a good Samaritan into a criminal…
- GDP numbers disappoint — again…
- A government shutdown avoided — at least until next Friday…
- Will Trump withdraw from NAFTA?…
- A reader wonders if Jim Rickards is part of the swamp…
Felix Dzerzhinsky — that’s “Iron Felix” — would be proud of the great state of Oregon.
Dzerzhinsky was the first head of the dreaded Soviet Cheka, forerunner to the KGB. He ring-led the great “Red Terror” against Lenin’s political opponents.
“Kill without investigation,” ordered Iron Felix — a dictate his functionaries executed with diabolical precision.
This much can be said for the state of Oregon: It hasn’t killed Mr. Mats Järlström. But its vindictive proceedings against him have written a new chapter in bureaucratic despotism…
Mr. Järlström is an electrical engineer — critical detail — who decamped for Beaverton, Oregon, from Sweden some 20 years ago.
After a red-light camera flagged his stoplight-running wife, Järlström spent the next year “looking into the timing of yellow lights and red-light camera statistics,” as Vice’s online resource Motherboard phrases it. More to the point, he learned “cameras were catching people who were running yellow lights.”
Järlström’s research led him to conclude that yellow-light timing — established in 1959 — was inadequate for modern purposes.
See, the timing didn’t account for turning lanes. Drivers decelerate when turning through the intersection. Which they should. The cameras don’t account for that deceleration. So the overly zealous cameras nab safe drivers executing safe turns, which perversely encourages them to speed recklessly through the light.
(You might want to use that defense if you get one of these red-light tickets.)
As an electrical engineer and civically minded citizen, Järlström drafted an advisory email to the state’s engineering board notifying them that the state’s yellow caution lights put “the public at risk.”
But no good deed goes unpunished, as they say. The poor fellow was about to get a severe lesson in bureaucratic justice…
Someone once wrote that the aforesaid Iron Felix was “ruthless, cold and clearheaded.”
Unfortunately for Järlström, one of these traits does not apply to the Oregon State Board of Examiners for Engineering and Land Surveying.
Upon receiving Mr. Järlström’s note, the Oregon nomenklatura responded after this fashion:
“ORS 672.020(1) prohibits the practice of engineering in Oregon without registration… at a minimum, your use of the title ‘electronics engineer’ and the statement ‘I’m an engineer’… create violations.”
Paging Dr. Dzerzhinsky?
“I’m not practicing engineering,” Järlström retorted, understandably ignorant of the niceties of bureaucratic jurisprudence. “I’m just using basic mathematics and physics, Newtonian laws of motion, to make calculations and talk about what I found.”
He might as well have been pleading before Iron Felix himself.
The state of Oregon fined good Samaritan Järlström — get ready — $500. He’d committed the unspeakable crime of “practicing engineering without being registered.”
Yes, you read that correctly.
With nothing but charity aforethought, Mr. Järlström volunteered his own time and expertise in the selfless hope that it might benefit his fellow humanity. He assumed — wrongly — that the officials charged with serving the public shared his concerns.
But no. The state of Oregon dunned him 500 bucks for “practicing engineering without being registered.”
“When I got the first letter,” Järlström demurred, “it was this feeling of being violated and shocked that someone can be treated like this in the USA for sharing their ideas.”
Well, Mr. Järlström, you’ve got a thing or two to learn about the Land of the Free.
Järlström’s suing the bastards for violating his First Amendment rights.
We hope he takes them for every red cent. And we do mean every red cent.
Off to a court of a different type… the markets.
First-quarter GDP came in today. It disappointed. Per Bloomberg, Wall Street’s sages and sagamores expected the economy to grow at an annualized 1% pace to open the year.
But it came in underweight at a slender 0.7% annualized rate.
Personal consumption — some 70% of GDP by conventional estimates — inched just 0.3% higher. Economists thought it would rise 0.9%. For what it’s worth, personal consumption expanded at a 3.5% pace in the fourth quarter of 2016.
How did markets take today’s news?
Not quite lying down. The Big Board was in green territory until midday or so. Then it took a bit of a fright. The Dow’s down 25 points at writing. The S&P’s down a few points, while the gravity-defying Nasdaq scratched out a two-point gain.
Neither oil nor gold caught much of a bid today. Crude’s essentially flat, while the yellow metal’s up about a buck 60.
Trump wants to Make America Great Again by forcing Americans to pay more for housing and anything else using softwood lumber.
Earlier this week, Team Trump announced it intends to slap a 20% tariff on Canadian softwood lumber imports.
The administration claims the Canadian government subsidizes the lumber industry, allowing Canadian lumbermen to sell their exports at cutthroat prices — the throats of American lumbermen.
“The U.S. has dealt with this issue for almost four decades,” Fortune informs us. “In the past three cases where [the Commerce Department] found subsidies, Canada agreed to restrict lumber exports to settle the matter. This could happen again. Needless to say, there are no guarantees, and it will likely take a while before the latest case is resolved.”
A knotty issue, to be sure.
Worth a mention: The bilateral U.S./Canadian trade relationship is the second largest in the world, after the U.S./Chinese relationship.
But if the U.S. goes ahead with the tariff, Canada would likely retaliate with a tariff of their own on American wares. Which would invite further retaliation… and more retaliation in turn. Next thing you know, everyone’s paying double for anything coming through the supply chain.
Sound like a good deal to you?
In related news, perhaps you’ve heard that Trump’s threatened to pull out of NAFTA.
Well, now 45’s apparently backtracking after a map suggested states that voted for him would be damaged by a withdrawal, according to today’s Wall Street Journal.
So Trump’s learning The Art of Electoral Politics.
We’ll eat these words — without salt — if Trump actually tries to back out of NAFTA.
Meanwhile, “the Canadian dollar is on the brink of a major rally against the U.S. dollar,” according to Jim Rickards.
“Just as the loonie (migratory bird and slang for Canadian dollar) flies north in the summer,” Jim continues, “the Canadian dollar is poised for liftoff in the weeks ahead. Investors who position now for this rally in the Canadian dollar stand to make huge profits.”
And according to Jim, it’s not so much the balance of trade or some such that will send the loonie north. It will be our own Federal Reserve:
“In today’s world, most of this classic theory is worthless as a guide for predicting exchange rates. Currency valuations are driven by capital flows, and capital flows are driven by interest rates. Hot money chases returns around the world. That’s almost all you need to know.”
Jim’s thesis: The Fed is tightening into weakness. It will likely raise rates once again at its June meeting, possibly triggering a recession. Only then will it discover its erring ways. Then Janet Yellen and co. will have to reverse course and open the monetary spigots once again. Then the dollar will fall. And the loonie will rise:
“A loose monetary policy in the U.S. produces a weaker U.S. dollar and stronger loonie. A tight monetary policy in the U.S. produces a stronger U.S. dollar and weaker loonie.”
Just like a seesaw.
Today the Canadian dollar is trading near its 10-year low. But not for long, if Jim’s right.
[Ed. note: Jim’s identified a simple way to make 100–200% gains this year as the loonie gains against the greenback.
Not only that… Jim’s also identified another way to take advantage of the discrepancy between the American and Canadian dollars. It’s powerful but low-risk strategy to “skim” potentially massive gains from the currency markets. It’s a strategy insiders use to make fortunes from the currency markets — without any of the risks that come from currency trading.
“Imagine,” he says, “a low-risk way to ‘skim’ the global currency markets for tens of thousands of dollars. That’s what the insiders have been doing for years. And you can now join them.”
Want in on a $477 billion operation? You could grab a $27,600 piece of it from the next big transaction, on May 10. Watch Jim’s latest interview right here.]
Government shutdown averted! Well, for a week at least…
At roughly 11:30 EDT this morning, the House overwhelmingly passed emergency legislation to avoid a government shutdown at midnight tonight.
The bill provides federal funding through May 5, giving our august legislators one extra week to secure a deal to keep the government in funds for the rest of the fiscal year ending Sept. 30.
The legislation now goes to the Senate. If it makes it over the hurdles, the bill goes to the desk of President Trump for signature.
Then it starts all over again next Friday.
All this comes one day after House Republicans once again punted on the latest Obamacare “repeal and replace” bill. “Tuesday Group” House moderates balked at provisions added to seduce the hard-line “Freedom Caucus.”
And so to bed.
On the health front, our science maven Ray Blanco says it’s springtime for biotech!
And Trump is partly to credit. Ray says Trump wants to make it easier for the FDA to approve new products. He also wants it to clear a backlog of some 4,000 generic drug applications. Clearing this backlog will introduce new competition and lower prices, Ray explains.
One of those companies that could take it in the mush if all this goes down is a company that produces something called the EpiPen. That’s a device used to deliver an emergency dose of epinephrine in cases of anaphylaxis… which, as Ray explains, is a potentially lethal rapid-onset allergic reaction
The company that produces the EpiPen, Mylan, raised its price 600% since 2007. Price gouging, Ray asks? Overpriced junk?
“Either way,” Ray adds, “the steep hikes, public scrutiny and embarrassing recalls raise the profile of the current market monopoly held by Mylan — and not in a good way.”
Enter the competition…
Ray’s following a tiny company in Agora Financial’s FDA Trader that could break Mylan’s EpiPen $1 billion-a-year monopoly. And it could mean huge profits for a small upstart competitor.
Just thought we’d let you know.
Off to the mailbag…
“Agora touts Jim Rickards as having deep contacts in government (and elsewhere),” begins one reader. “Based on his criticism of Trump’s tax proposal in Thursday’s 5, it seems he might have spent a little too much time around the swamp — and as a former attorney in the corporate world — and gone native to the government ways.
“And to be clear,” the reader emphasizes, “I do not own a red MAGA hat and did not vote for Trump. But I am curious about whether he can make any dent whatsoever in the ways of the Imperial City.”
The 5: Sometimes you have to wade into the swamp to know how the swamp creatures operate. And Mr. Rickards is a man of affairs with contacts in high places. But that doesn’t mean he likes what he finds. And his readers can benefit from his vast knowledge of “the swamp.”
For the record, we don’t own a MAGA hat, either. But if he “can make any dent whatsoever in the ways of the Imperial City,” we’ll gladly purchase one.
“The people here have volunteered for a cashless society,” writes a Canadian reader, picking up where a fellow Canadian left off earlier this week.
“They readily adopted debit cards early, and I would guess 95% of transactions are cashless.
“I started paying with cash a couple of years ago, partly due to a divorce that woke me up to how closely all my spending habits are tracked. I use almost all cash now. The cashiers just automatically assume that I am going to use the debit machine always. They tell me almost no one uses cash.
“I don’t think the people want or have any idea what is coming. They just did it for convenience.”
The 5: Enjoy your cash while you can, eh? Reuters reported this week that “34% of respondents in Europe and 38% in the U.S. said they’d be willing to go cash-free, according to a survey done by Ipsos for the ING bank website eZonomics. Those figures will only increase.”
Cash will probably die because it becomes too impractical rather than its being outlawed de jure.
Switching from grapes to cotton…
“Oh, but ‘economic growth’ will generate new tax revenue to overcome the deficits, we’re told. Treasury Secretary Steve Mnuchin was yammering about it again yesterday. What kind of economic growth do Mr. Mnuchin et al. foresee when they are gearing up to destroy jobs in the countries that America trades with? Jobs create money to buy goods… American goods… Do they not understand, or are grade 6 educations a prerequisite for running the swamp?”
“Love The 5.”
The 5: Good question.
for The 5 Min. Forecast
P.S. Now that the government has avoided a shutdown — at least for a week — maybe they’ll finally come to terms on a budget for the next five months.
If they do, we’re sure you’ll want to read about this.