Confucius Updated, the Volfefe Index, and the Noerr-Pennington Doctrine


Confucius Updated

In chapter 1, verse 1, of the Analects, Confucius is quoted as making this observation:  “有朋自遠方來、不亦樂乎.” “Having friends who come from afar, isn’t it a pleasure.”

In the new translation—The Confucian Analects Updated and Retranslated for Today’s Reader—the Master will be quoted as saying, “To exchange emails with friends from afar, what a pleasure that is!”

The Volfefe Index

I am indebted to old friend Vasari for this news:

CNBC, JP Morgan has created an index to track the effect of Trump’s tweets on financial markets: ‘Volfefe index’:

Donald Trump is tweeting more and it’s affecting the bond market.

In fact, the president’s market-moving tweets ballooned in August as he hammered China on trade and went after the Federal Reserve on interest rates.

In an attempt to quantify the impact of Trump’s tweets on the bond market, J.P. Morgan devised a “Volfefe Index” to analyze how the president’s tweets are influencing volatility in U.S. interest rates.

J.P. Morgan found that the index, named after Trump’s infamous and still mysterious “covfefe” tweet, explains a measurable fraction of the moves in implied rate volatility for 2-year and 5-year Treasurys.

“This makes rough sense as much of the president’s tweets have been focused on the Federal Reserve, and as trade tensions are broadly seen as, first and foremost, impactful on near-term economic performance and, likewise, the Fed’s reaction to such developments,” wrote the authors of the J.P. Morgan report.

The Noerr-Pennington Doctrine

I had a meaty email discussion with old friend Lobo Loup—who’s still practicing antitrust law—about my post on the bogus Antitrust Division investigation of several auto manufacturers. In the post, I called attention to this important legal principle:

Business firms, acting separately or together, have a constitutional right to free speech, to freedom of association, and to petition for redress of grievances. These constitutional rights imply that business firms, individually or jointly, may lobby any branch of government, and any level of government, to adopt laws or regulations or rules to the firms’ liking, or otherwise to do as the lobbyists request. These constitutional rights override anything to the contrary in the antitrust laws.

As long as the firms are lobbying, it does not matter if the outcome they seek could be called “anticompetitive” or “unwise” or “harmful” or “contrary to the public interest.” Nor is there an exception if the lobbying pricks the thin skin of Dear Leader.

Antitrust lawyers call this the Noerr-Pennington doctrine, and it’s a very robust and important principle of antitrust law.

The takeaway from the email discussion—my words, not Lobo’s—is that the Antitrust Division pretty clearly appears to be doing one of two things, or maybe both at the same time:

  • undertaking a legally doomed exercise, in bad faith, for the purpose of harassing some large corporations which have dared to take a position contrary to Trump, and/or
  • attempting to cut back drastically on the Noerr-Pennington doctrine.

Either possibility should cause the folks on the Business Roundtable to shit in their pants. Bigly.


And, speaking of friends from afar, greetings to today’s readers, who come from Australia, Austria, Canada, Germany, Kenya, Myanmar, Spain, the United Kingdom, and the United States.