JNJ to pay $33M to 42 states (California's payout is the largest at $2.3M) after pleading from allegations the company endangered consumers by skipping control standards for popular medicines like including Tylenol and St. Joseph Aspirin.

“It is reprehensible that any company would manufacture medicine that could potentially harm children,” the attorney general wrote in a Twitter post. In a statement, Johnson & Johnson said its recalls of medicines, “were precautionary and not undertaken on the basis of any health or safety risks to consumers, and we remain committed to providing consumers with safe and effective over-the-counter medicines.”  @ SF Gate

Despite the above, see the house thoughts on JNJ, specifically their oncology pipeline. The most recent earnings call was forward looking and still bedrock despite this fine and the safety risks violated. Johnson and Johnson: Oncology Overview. @HCG Research Associates

More data from @FiercePharma

I should have started this many years ago - but from now on I am keeping a reading list which will be updated at the end of each month. 

This month I am reading:

American Nations by Colin Woodard

The New Industrial Age by JK Galbraith

The Politics of Industry by Walton Hamilton

Central Banking In Theory And Practice by Alan S. Blinder 

- Chad 

Last month’s new home sales were substantially lower than economists had been expecting. - WSJ

U.S. sales of new homes last month registered the biggest drop in more than two years. The Commerce Department said Tuesday that new-home sales skidded 11.4 percent in April to a seasonally adjusted annual rate of 569,000. It was the biggest monthly drop since March 2015. Economists had expected a more modest retreat from March sales of 642,000, which were the highest since October 2007. Sales in April were still up 0.5 percent from a year earlier. Economists were inclined to view the April reading as a one-month blip. Ian Shepherdson, chief economist at Pantheon Macroeconomics, called last month's drop "a correction from the March cycle high, not a warning sign ... We expect sales to rebound somewhat in May, and to return to the March high, at least, over the next few months." - From the AP

Many experts have attributed the recent Dow Jones Industrial Index (DJI) slide to centrist republicans losing faith in POTUS and discussing impeachment. While impeachment is a risk - there is a more sullen reality to why the US markets reacted: Washington cannot work under the circumstances. It is very clear, the gridlock everyone hoped had moved on is back in a political bottleneck with more and more scandals piling up everyday. The current administration is on-and-off crisis mode and openly running their administration with crisis communication tactics to cover the “shoot from the hip” presidency. It is worth noting that the market did recovery quickly, but the correction - or slide - was still the most significant since the election in November. Other factors are in play as well,
Soros and his hate for Trump and even the president’s market savvy money manager friends could look to influence numbers through complex trade positions and derivatives, discombobulating the ethical fabric of American economic data.

All of this invigorates newly created enemies inside the permanent government and that has affected the perceived political capital available. Without a doubt this is the barometer we can look to regarding market corrections for the current administration - despite volatility indexes still lagging. POTUS went after an Obamacare-AHCA takedown as quick as he could and it was a failure. That said a second vote was arranged and it passed. However the house has yet to send the act (AHCA) to the senate. Why? The house is waiting on its own bottleneck to clear as they have existing internal politics with each other and this one issue surrounds the nonpartisan Congressional Budget Office (CBO). There is a slow down and there is gridlock and it is largely from Trump’s personal drama involving his character before presidency, his Russian business ties and his ongoing obscuring - or covering up - of an investigation.

More at HuffPost

Case Update: Kindred Nursing Centers Limited Partnership v. Clark

Opinion analysis: Justices rebuff Kentucky rule invalidating arbitration agreements signed under power of attorney

I was expecting the opposite - Chad

For anybody who thought that the Supreme Court’s protective attitude toward arbitration agreements would differ in the absence of the late Justice Antonin Scalia, the decision this morning in Kindred Nursing Centers Limited Partnership v. Clark will come as a surprise. By a 7-1 margin, the court firmly rejected a Kentucky decision that adopted a clear-statement rule under which a general power of attorney, valid to authorize the execution of contracts generally, would not validly authorize execution of an arbitration agreement unless the power of attorney explicitly addressed that topic.

Resembling more than anything last term’s decision in DIRECTV, Inc. v. Imburgia, the opinion shows a Supreme Court bristling at the lack of candor shown by state courts that disagree with its favorable treatment of pre-dispute arbitration agreements. Doctrinally, the case is written as a routine application of the court’s existing rules holding that the Federal Arbitration Act obligates state courts to put arbitration agreements on an “equal footing” with other contracts and invalidates defenses that “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.”


To the extent there is any new law in this case, it comes in the opinion’s explanation of the last point in the previous paragraph. As demonstrated in today’s decision, the court is now forbidding not only a law “prohibiting outright the arbitration of a particular type of claim,” but also “any rule that covertly accomplishes the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.” In this case, the Kentucky Supreme Court adopted a rule for all contracts that waive the “divine God-given right” to a jury trial, requiring “an explicit statement before an attorney-in-fact … could relinquish that right on another’s behalf.” Applying the rule summarized above, the Supreme Court held that the Kentucky decision must fall because the state court “adopt[ed] a legal rule hinging on the primary characteristic of an arbitration agreement—namely, a waiver of the right to go to court and receive a jury trial.” As the opinion puts it, “[s]uch a rule is too tailor-made to arbitration agreements—subjecting them, by virtue of their defining trait, to uncommon barriers.”

The Supreme Court’s emphatic quotation of the Kentucky court’s description of the religious underpinnings of the jury-trial right is just one indication that the justices are skeptical about the state court’s sincerity. For example, the opinion quotes the suggestion of the Kentucky court that the rule applied here “could also apply when an agent endeavored to waive other ‘fundamental constitutional rights’ held by a principal.” Writing for the majority, Justice Elena Kagan responds sarcastically: “But what other rights, really? No Kentucky court, so far as we know, has ever before demanded that a power of attorney explicitly confer authority to enter into contracts implicating constitutional guarantees.” Kagan also points out that “[n]othing in the decision below (or elsewhere in Kentucky law) suggests that explicit authorization is needed” for other agreements “relinquishing the right to go to court,” such as “a settlement agreement or consent to a bench trial.” The opinion takes that as “yet another indication that the [Kentucky] court’s demand for specificity in powers of attorney arises from the suspect status of arbitration rather than the sacred status of jury trials.” In summary, the opinion concludes, the Kentucky court’s unpersuasive protestations that its rule was neutral toward arbitration “only makes clear the arbitration-specific character of the rule, much as if it were made applicable to arbitration agreements and black swans.”


For me, the 7-1 vote was the most salient thing about this decision. All of the participating justices agreed except for Justice Clarence Thomas, who could not endorse the outcome based on his longstanding view that the FAA does not apply in state courts. By contrast, the vote last year in the quite similar case of Imburgia was 6-3. Perhaps the justices were motivated here less by their views about the FAA than by their views about the proper response to insincere state supreme courts.

Ruling: https://www.supremecourt.gov/opinions/16pdf/16-32_o7jp.pdf

The Ethics in Government Act of 1978 is a United States federal law that came about during the Nixon scandals. Critics can knock down this law but it was upheld by SCOTUS in 1988 under the case Alexia Morrison, Independent Counsel v. Theodore Olson, et al. Scalia dissented (see Morrison v. Olson).

• "It created mandatory, public disclosure of financial and employment history of public officials and their immediate family" - Wikipedia

PDF of document from the US House: The Ethics in Government Act of 1978

Morrison v. Olson
Alexia Morrison, Independent Counsel v. Theodore Olson, et al. The case was upheld by SCOTUS. Scalia was the sole dissenter. A few words from Scalia on the case.

• "Probably the most wrenching was Morrison v. Olson, which involved the independent counsel. To take away the power to prosecute from the president and give it to somebody who’s not under his control is a terrible erosion of presidential power. And it was wrenching not only because it came out wrong—I was the sole dissenter—but because the opinion was written by Rehnquist, who had been head of the Office of Legal Counsel, before me, and who I thought would realize the importance of that power of the president to prosecute. And he not only wrote the opinion; he wrote it in a manner that was more extreme than I think Bill Brennan would have written it. That was wrenching. - New York Magazine

With the French elections in the clear America can sit tight. As you see it is May 10th and the news is already on South Korea and James Comey. Politics is ever moving and changing, and political turmoil takes adaptation, but the missed issue in France has set a tone for the rest of 2017. There is nothing wrong with the EU trade bloc. The UK has left the EU - that is clear. They are in the process of braking apart a long standing trade union but it will not dismantle the euro.

If we can take anything from Sunday's FX open (May 07, 2017) the euro gained but then subdued, no doubt from reality. France and the EU have a wild and interesting road ahead but they will emerge now with the extra drive and direction needed verses a multi-nation wrap up led by Le Pen's anti-intellectualism.