Con Ed not entitled to $1.3B property tax refund, judge rules

The utility had argued that it should have owed less from 2013 through 2016 because its income is limited by the state.....»»

Category: blogSource: crainsnewyorkNov 24th, 2022

Camber Energy: What If They Made a Whole Company Out of Red Flags? – Kerrisdale

Kerrisdale Capital is short shares of Camber Energy Inc (NYSEAMERICAN:CEI). Camber is a defunct oil producer that has failed to file financial statements with the SEC since September 2020, is in danger of having its stock delisted next month, and just fired its accounting firm in September. Its only real asset is a 73% stake […] Kerrisdale Capital is short shares of Camber Energy Inc (NYSEAMERICAN:CEI). Camber is a defunct oil producer that has failed to file financial statements with the SEC since September 2020, is in danger of having its stock delisted next month, and just fired its accounting firm in September. Its only real asset is a 73% stake in Viking Energy Group Inc (OTCMKTS:VKIN), an OTC-traded company with negative book value and a going-concern warning that recently violated the maximum-leverage covenant on one of its loans. (For a time, it also had a fake CFO – long story.) Nonetheless, Camber’s stock price has increased by 6x over the past month; last week, astonishingly, an average of $1.9 billion worth of Camber shares changed hands every day. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more Is there any logic to this bizarre frenzy? Camber pumpers have seized upon the notion that the company is now a play on carbon capture and clean energy, citing a license agreement recently entered into by Viking. But the “ESG Clean Energy” technology license is a joke. Not only is it tiny relative to Camber’s market cap (costing only $5 million and granting exclusivity only in Canada), but it has embroiled Camber in the long-running escapades of a western Massachusetts family that once claimed to have created a revolutionary new combustion engine, only to wind up being penalized by the SEC for raising $80 million in unregistered securities offerings, often to unaccredited investors, and spending much of it on themselves. But the most fascinating part of the CEI boondoggle actually has to do with something far more basic: how many shares are there, and why has dilution been spiraling out of control? We believe the market is badly mistaken about Camber’s share count and ignorant of its terrifying capital structure. In fact, we estimate its fully diluted share count is roughly triple the widely reported number, bringing its true, fully diluted market cap, absurdly, to nearly $900 million. Since Camber is delinquent on its financials, investors have failed to fully appreciate the impact of its ongoing issuance of an unusual, highly dilutive class of convertible preferred stock. As a result of this “death spiral” preferred, Camber has already seen its share count increase 50- million-fold from early 2016 to July 2021 – and we believe it isn’t over yet, as preferred holders can and will continue to convert their securities and sell the resulting common shares. Even at the much lower valuation that investors incorrectly think Camber trades for, it’s still overvalued. The core Viking assets are low-quality and dangerously levered, while any near- term benefits from higher commodity prices will be muted by hedges established in 2020. The recent clean-energy license is nearly worthless. It’s ridiculous to have to say this, but Camber isn’t worth $900 million. If it looks like a penny stock, and it acts like a penny stock, it is a penny stock. Camber has been a penny stock before – no more than a month ago, in fact – and we expect that it will be once again. Company Background Founded in 2004, Camber was originally called Lucas Energy Resources. It went public via a reverse merger in 2006 with the plan of “capitaliz[ing] on the increasing availability of opportunistic acquisitions in the energy sector.”1 But after years of bad investments and a nearly 100% decline in its stock price, the company, which renamed itself Camber in 2017, found itself with little economic value left; faced with the prospect of losing its NYSE American listing, it cast about for new acquisitions beginning in early 2019. That’s when Viking entered the picture. Jim Miller, a member of Camber’s board, had served on the board of a micro-cap company called Guardian 8 that was working on “a proprietary new class of enhanced non-lethal weapons”; Guardian 8’s CEO, Steve Cochennet, happened to also be part owner of a Kansas-based company that operated some of Viking’s oil and gas assets and knew that Viking, whose shares traded over the counter, was interested in moving up to a national exchange.2 (In case you’re wondering, under Miller and Cochennet’s watch, Guardian 8’s stock saw its price drop to ~$0; it was delisted in 2019.3) Viking itself also had a checkered past. Previously a shell company, it was repurposed by a corporate lawyer and investment banker named Tom Simeo to create SinoCubate, “an incubator of and investor in privately held companies mainly in P.R. China.” But this business model went nowhere. In 2012, SinoCubate changed its name to Viking Investments but continued to achieve little. In 2014, Simeo brought in James A. Doris, a Canadian lawyer, as a member of the board of directors and then as president and CEO, tasked with executing on Viking’s new strategy of “acquir[ing] income-producing assets throughout North America in various sectors, including energy and real estate.” In a series of transactions, Doris gradually built up a portfolio of oil wells and other energy assets in the United States, relying on large amounts of high-cost debt to get deals done. But Viking has never achieved consistent GAAP profitability; indeed, under Doris’s leadership, from 2015 to the first half of 2021, Viking’s cumulative net income has totaled negative $105 million, and its financial statements warn of “substantial doubt regarding the Company’s ability to continue as a going concern.”4 At first, despite the Guardian 8 crew’s match-making, Camber showed little interest in Viking and pursued another acquisition instead. But, when that deal fell apart, Camber re-engaged with Viking and, in February 2020, announced an all-stock acquisition – effectively a reverse merger in which Viking would end up as the surviving company but transfer some value to incumbent Camber shareholders in exchange for the national listing. For reasons that remain somewhat unclear, this original deal structure was beset with delays, and in December 2020 (after months of insisting that deal closing was just around the corner) Camber announced that it would instead directly purchase a 51% stake in Viking; at the same time, Doris, Viking’s CEO, officially took over Camber as well. Subsequent transactions through July 2021 have brough Camber’s Viking stake up to 69.9 million shares (73% of Viking’s total common shares), in exchange for consideration in the form of a mixture of cash, debt forgiveness,5 and debt assumption, valued in the aggregate by Viking at only $50.7 million: Camber and Viking announced a new merger agreement in February 2021, aiming to take out the remaining Viking shares not owned by Camber and thus fully combine the two companies, but that plan is on hold because Camber has failed to file its last 10-K (as well as two subsequent 10-Qs) and is thus in danger of being delisted unless it catches up by November. Today, then, Camber’s absurd equity valuation rests entirely on its majority stake in a small, unprofitable oil-and-gas roll-up cobbled together by a Canadian lawyer. An Opaque Capital Structure Has Concealed the True Insanity of Camber’s Valuation What actually is Camber’s equity valuation? It sounds like a simple question, and sources like Bloomberg and Yahoo Finance supply what looks like a simple answer: 104.2 million shares outstanding times a $3.09 closing price (as of October 4, 2021) equals a market cap of $322 million – absurd enough, given what Camber owns. But these figures only tell part of the story. We estimate that the correct fully diluted market cap is actually a staggering $882 million, including the impact of both Camber’s unusual, highly dilutive Series C convertible preferred stock and its convertible debt. Because Camber is delinquent on its SEC filings, it’s difficult to assemble an up-to-date picture of its balance sheet and capital structure. The widely used 104.2-million-share figure comes from an 8-K filed in July that states, in part: As of July 9, 2021, the Company had 104,195,295 shares of common stock issued and outstanding. The increase in our outstanding shares of common stock from the date of the Company’s February 23, 2021 increase in authorized shares of common stock (from 25 million shares to 250 million shares), is primarily due to conversions of shares of Series C Preferred Stock of the Company into common stock, and conversion premiums due thereon, which are payable in shares of common stock. This bland language belies the stunning magnitude of the dilution that has already taken place. Indeed, we estimate that, of the 104.2 million common shares outstanding on July 9th, 99.7% were created via the conversion of Series C preferred in the past few years – and there’s more where that came from. The terms of Camber’s preferreds are complex but boil down to the following: they accrue non- cash dividends at the sky-high rate of 24.95% per year for a notional seven years but can be converted into common shares at any time. The face value of the preferred shares converts into common shares at a fixed conversion price of $162.50 per share, far higher than the current trading price – so far, so good (from a Camber-shareholder perspective). The problem is the additional “conversion premium,” which is equal to the full seven years’ worth of dividends, or 7 x 24.95% ≈ 175% of face value, all at once, and is converted at a far lower conversion price that “will never be above approximately $0.3985 per share…regardless of the actual trading price of Camber’s common stock” (but could in principle go lower if the price crashes to new lows).6 The upshot of all this is that one share of Series C preferred is now convertible into ~43,885 shares of common stock.7 Historically, all of Camber’s Series C preferred was held by one investor: Discover Growth Fund. The terms of the preferred agreement cap Discover’s ownership of Camber’s common shares at 9.99% of the total, but nothing stops Discover from converting preferred into common up to that cap, selling off the resulting shares, converting additional preferred shares into common up to the cap, selling those common shares, etc., as Camber has stated explicitly (and as Discover has in fact done over the years) (emphasis added): Although Discover may not receive shares of common stock exceeding 9.99% of its outstanding shares of common stock immediately after affecting such conversion, this restriction does not prevent Discover from receiving shares up to the 9.99% limit, selling those shares, and then receiving the rest of the shares it is due, in one or more tranches, while still staying below the 9.99% limit. If Discover chooses to do this, it will cause substantial dilution to the then holders of its common stock. Additionally, the continued sale of shares issuable upon successive conversions will likely create significant downward pressure on the price of its common stock as Discover sells material amounts of Camber’s common stock over time and/or in a short period of time. This could place further downward pressure on the price of its common stock and in turn result in Discover receiving an ever increasing number of additional shares of common stock upon conversion of its securities, and adjustments thereof, which in turn will likely lead to further dilution, reductions in the exercise/conversion price of Discover’s securities and even more downward pressure on its common stock, which could lead to its common stock becoming devalued or worthless.8 In 2017, soon after Discover began to convert some of its first preferred shares, Camber’s then- management claimed to be shocked by the results and sued Discover for fraud, arguing that “[t]he catastrophic effect of the Discover Documents [i.e. the terms of the preferred] is so devastating that the Discover Documents are prima facie unconscionable” because “they will permit Discover to strip Camber of its value and business well beyond the simple repayment of its debt.” Camber called the documents “extremely difficult to understand” and insisted that they “were drafted in such a way as to obscure the true terms of such documents and the total number of shares of common stock that could be issuable by Camber thereunder. … Only after signing the documents did Camber and [its then CEO]…learn that Discover’s reading of the Discover Documents was that the terms that applied were the strictest and most Camber unfriendly interpretation possible.”9 But the judge wasn’t impressed, suggesting that it was Camber’s own fault for failing to read the fine print, and the case was dismissed. With no better options, Camber then repeatedly came crawling back to Discover for additional tranches of funding via preferred sales. While the recent spike in common share count to 104.2 million as of early July includes some of the impact of ongoing preferred conversion, we believe it fails to include all of it. In addition to Discover’s 2,093 shares of Series C preferred held as of February 2021, Camber issued additional shares to EMC Capital Partners, a creditor of Viking’s, as part of a January agreement to reduce Viking’s debt.10 Then, in July, Camber issued another block of preferred shares – also to Discover, we believe – to help fund Viking’s recent deals.11 We speculate that many of these preferred shares have already been converted into common shares that have subsequently been sold into a frenzied retail bid. Beyond the Series C preferred, there is one additional source of potential dilution: debt issued to Discover in three transactions from December 2020 to April 2021, totaling $20.5 million in face value, and amended in July to be convertible at a fixed price of $1.25 per share.12 We summarize our estimates of all of these sources of potential common share issuance below: Might we be wrong about this math? Absolutely – the mechanics of the Series C preferreds are so convoluted that prior Camber management sued Discover complaining that the legal documents governing them “were drafted in such a way as to obscure the true terms of such documents and the total number of shares of common stock that could be issuable by Camber thereunder.” Camber management could easily set the record straight by revealing the most up- to-date share count via an SEC filing, along with any additional clarifications about the expected future share count upon conversion of all outstanding convertible securities. But we're confident that the current share count reported in financial databases like Bloomberg and Yahoo Finance significantly understates the true, fully diluted figure. An additional indication that Camber expects massive future dilution relates to the total authorized shares of common stock under its official articles of incorporation. It was only a few months ago, in February, that Camber had to hold a special shareholder meeting to increase its maximum authorized share count from 25 million to 250 million in order to accommodate all the shares to be issued because of preferred conversions. But under Camber’s July agreement to sell additional preferred shares to Discover, the company (emphasis added) agreed to include proposals relating to the approval of the July 2021 Purchase Agreement and the issuance of the shares of common stock upon conversion of the Series C Preferred Stock sold pursuant to the July 2021 Purchase Agreement, as well as an increase in authorized common stock to fulfill our obligations to issue such shares, at the Company’s next Annual Meeting, the meeting held to approve the Merger or a separate meeting in the event the Merger is terminated prior to shareholder approval, and to use commercially reasonable best efforts to obtain such approvals as soon as possible and in any event prior to January 1, 2022.13 In other words, Camber can already see that 250 million shares will soon not be enough, consistent with our estimate of ~285 million fully diluted shares above. In sum, Camber’s true overvaluation is dramatically worse than it initially appears because of the massive number of common shares that its preferred and other securities can convert into, leading to a fully diluted share count that is nearly triple the figure found in standard information sources used by investors. This enormous latent dilution, impossible to discern without combing through numerous scattered filings made by a company with no up-to-date financial statements in the public domain, means that the market is – perhaps out of ignorance – attributing close to one billion dollars of value to a very weak business. Camber’s Stake in Viking Has Little Real Value In light of Camber’s gargantuan valuation, it’s worth dwelling on some basic facts about its sole meaningful asset, a 73% stake in Viking Energy. As of 6/30/21: Viking had negative $15 million in shareholder equity/book Its financial statements noted “substantial doubt regarding the Company’s ability to continue as a going ” Of its $101.3 million in outstanding debt (at face value), nearly half (48%) was scheduled to mature and come due over the following 12 months. Viking noted that it “does not currently maintain controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act are recorded, processed, summarized, and reported within the time periods specified by the Commission’s rules and forms.” Viking’s CEO “has concluded that these [disclosure] controls and procedures are not effective in providing reasonable assurance of compliance.” Viking disclosed that a key subsidiary, Elysium Energy, was “in default of the maximum leverage ratio covenant under the term loan agreement at June 30, 2021”; this covenant caps the entity’s total secured debt to EBITDA at 75 to 1.14 This is hardly a healthy operation. Indeed, even according to Viking’s own black-box estimates, the present value of its total proved reserves of oil and gas, using a 10% discount rate (likely generous given the company’s high debt costs), was $120 million as of 12/31/20,15 while its outstanding debt, as stated above, is $101 million – perhaps implying a sliver of residual economic value to equity holders, but not much. And while some market observers have recently gotten excited about how increases in commodity prices could benefit Camber/Viking, any near-term impact will be blunted by hedges put on by Viking in early 2020, which cover, with respect to its Elysium properties, “60% of the estimated production for 2021 and 50% of the estimated production for the period between January, 2022 to July, 2022. Theses hedges have a floor of $45 and a ceiling ranging from $52.70 to $56.00 for oil, and a floor of $2.00 and a ceiling of $2.425 for natural gas” – cutting into the benefit of any price spikes above those ceiling levels.16 Sharing our dreary view of Viking’s prospects is one of Viking’s own financial advisors, a firm called Scalar, LLC, that Viking hired to prepare a fairness opinion under the original all-stock merger agreement with Camber. Combining Viking’s own internal projections with data on comparable-company valuation multiples, Scalar concluded in October 2020 that Viking’s equity was worth somewhere between $0 and $20 million, depending on the methodology used, with the “purest” methodology – a true, full-blown DCF – yielding the lowest estimate of $0-1 million: Camber’s advisor, Mercer Capital, came to a similar conclusion: its “analysis indicated an implied equity value of Viking of $0 to $34.3 million.”17 It’s inconceivable that a majority stake in this company, deemed potentially worthless by multiple experts and clearly experiencing financial strains, could somehow justify a near-billion-dollar valuation. Instead of dwelling on the unpleasant realities of Viking’s oil and gas business, Camber has drawn investor attention to two recent transactions conducted by Viking with Camber funding: a license agreement with “ESG Clean Energy,” discussed in further detail below, and the acquisition of a 60.3% stake in Simson-Maxwell, described as “a leading manufacturer and supplier of industrial engines, power generation products, services and custom energy solutions.” But Viking paid just $8 million for its Simson-Maxwell shares,18 and the company has just 125 employees; it defies belief to think that this purchase was such a bargain as to make a material dent in Camber’s overvaluation. And what does Simson-Maxwell actually do? One of its key officers, Daryl Kruper (identified as its chairman in Camber’s press release), describes the company a bit less grandly and more concretely on his LinkedIn page: Simson Maxwell is a power systems specialist. The company assembles and sells generator sets, industrial engines, power control systems and switchgear. Simson Maxwell has service and parts facilities in Edmonton, Calgary, Prince George, Vancouver, Nanaimo and Terrace. The company has provided its western Canadian customers with exceptional service for over 70 years. In other words, Simson-Maxwell acts as a sort of distributor/consultant, packaging industrial- strength generators and engines manufactured by companies like GE and Mitsubishi into systems that can provide electrical power, often in remote areas in western Canada; Simson- Maxwell employees then drive around in vans maintaining and repairing these systems. There’s nothing obviously wrong with this business, but it’s small, regional (not just Canada – western Canada specifically), likely driven by an unpredictable flow of new large projects, and unlikely to garner a high standalone valuation. Indeed, buried in one of Viking’s agreements with Simson- Maxwell’s selling shareholders (see p. 23) are clauses giving Viking the right to purchase the rest of the company between July 2024 and July 2026 at a price of at least 8x trailing EBITDA and giving the selling shareholders the right to sell the rest of their shares during the same time frame at a price of at least 7x trailing EBITDA – the kind of multiples associated with sleepy industrial distributors, not fast-growing retail darlings. Since Simon-Maxwell has nothing to do with Viking’s pre-existing assets or (alleged) expertise in oil and gas, and Viking and Camber are hardly flush with cash, why did they make the purchase? We speculate that management is concerned about the combined company’s ability to maintain its listing on the NYSE American. For example, when describing its restruck merger agreement with Viking, Camber noted: Additional closing conditions to the Merger include that in the event the NYSE American determines that the Merger constitutes, or will constitute, a “back-door listing”/“reverse merger”, Camber (and its common stock) is required to qualify for initial listing on the NYSE American, pursuant to the applicable guidance and requirements of the NYSE as of the Effective Time. What does it take to qualify for initial listing on the NYSE American? There are several ways, but three require at least $4 million of positive stockholders’ equity, which Viking, the intended surviving company, doesn’t have today; another requires a market cap of greater than $75 million, which management might (quite reasonably) be concerned about achieving sustainably. That leaves a standard that requires a listed company to have $75 million in assets and revenue. With Viking running at only ~$40 million of annualized revenue, we believe management is attempting to buy up more via acquisition. In fact, if the goal is simply to “buy” GAAP revenue, the most efficient way to do it is by acquiring a stake in a low-margin, slow- growing business – little earnings power, hence a low purchase price, but plenty of revenue. And by buying a majority stake instead of the whole thing, the acquirer can further reduce the capital outlay while still being able to consolidate all of the operation’s revenue under GAAP accounting. Buying 60.3% of Simson-Maxwell seems to fit the bill, but it’s a placeholder, not a real value-creator. Camber’s Partners in the Laughable “ESG Clean Energy” Deal Have a Long History of Broken Promises and Alleged Securities Fraud The “catalyst” most commonly cited by Camber Energy bulls for the recent massive increase in the company’s stock price is an August 24th press release, “Camber Energy Secures Exclusive IP License for Patented Carbon-Capture System,” announcing that the company, via Viking, “entered into an Exclusive Intellectual Property License Agreement with ESG Clean Energy, LLC (‘ESG’) regarding ESG’s patent rights and know-how related to stationary electric power generation, including methods to utilize heat and capture carbon dioxide.” Our research suggests that the “intellectual property” in question amounts to very little: in essence, the concept of collecting the exhaust gases emitted by a natural-gas–fueled electric generator, cooling it down to distill out the water vapor, and isolating the remaining carbon dioxide. But what happens to the carbon dioxide then? The clearest answer ESG Clean Energy has given is that it “can be sold to…cannabis producers”19 to help their plants grow faster, though the vast majority of the carbon dioxide would still end up escaping into the atmosphere over time, and additional greenhouse gases would be generated in compressing and shipping this carbon dioxide to the cannabis producers, likely leading to a net worsening of carbon emissions.20 And what is Viking – which primarily extracts oil and gas from the ground, as opposed to running generators and selling electrical power – supposed to do with this technology anyway? The idea seems to be that the newly acquired Simson-Maxwell business will attempt to sell the “technology” as a value-add to customers who are buying generators in western Canada. Indeed, while Camber’s press-release headline emphasized the “exclusive” nature of the license, the license is only exclusive in Canada plus “up to twenty-five locations in the United States” – making the much vaunted deal even more trivial than it might first appear. Viking paid an upfront royalty of $1.5 million in cash in August, with additional installments of $1.5 and $2 million due by January and April 2022, respectively, for a total of $5 million. In addition, Viking “shall pay to ESG continuing royalties of not more than 15% of the net revenues of Viking generated using the Intellectual Property, with the continuing royalty percentage to be jointly determined by the parties collaboratively based on the parties’ development of realistic cashflow models resulting from initial projects utilizing the Intellectual Property, and with the parties utilizing mediation if they cannot jointly agree to the continuing royalty percentage”21 – a strangely open-ended, perhaps rushed, way of setting a royalty rate. Overall, then, Viking is paying $5 million for roughly 85% of the economics of a technology that might conceivably help “capture” CO2 emitted by electric generators in Canada (and up to 25 locations in the United States!) but then probably just re-emit it again. This is the great advance that has driven Camber to a nearly billion-dollar market cap. It’s with good reason that on ESG Clean Energy’s web site (as of early October), the list of “press releases that show that ESG Clean Energy is making waves in the distributive power industry” is blank: If the ESG Clean Energy license deal were just another trivial bit of vaporware hyped up by a promotional company and its over-eager shareholders, it would be problematic but unremarkable; things like that happen all the time. But it’s the nature and history of Camber/Viking’s counterparty in the ESG deal that truly makes the situation sublime. ESG Clean Energy is in fact an offshoot of the Scuderi Group, a family business in western Massachusetts created to develop the now deceased Carmelo Scuderi’s idea for a revolutionary new type of engine. (In a 2005 AP article entitled “Engine design draws skepticism,” an MIT professor “said the creation is almost certain to fail.”) Two of Carmelo’s children, Nick and Sal, appeared in a recent ESG Clean Energy video with Camber’s CEO, who called Sal “more of the brains behind the operation” but didn’t state his official role – interesting since documents associated with ESG Clean Energy’s recent small-scale capital raises don’t mention Sal at all. Buried in Viking’s contract with ESG Clean Energy is the following section, indicating that the patents and technology underlying the deal actually belong in the first instance to the Scuderi Group, Inc.: 2.6 Demonstration of ESG’s Exclusive License with Scuderi Group and Right to Grant Licenses in this Agreement. ESG shall provide necessary documentation to Viking which demonstrates ESG’s right to grant the licenses in this Section 2 of this Agreement. For the avoidance of doubt, ESG shall provide necessary documentation that verifies the terms and conditions of ESG’s exclusive license with the Scuderi Group, Inc., a Delaware USA corporation, having an address of 1111 Elm Street, Suite 33, West Springfield, MA 01089 USA (“Scuderi Group”), and that nothing within ESG’s exclusive license with the Scuderi Group is inconsistent with the terms of this Agreement. In fact, the ESG Clean Energy entity itself was originally called Scuderi Clean Energy but changed its name in 2019; its subsidiary ESG-H1, LLC, which presides over a long-delayed power-generation project in the small city of Holyoke, Massachusetts (discussed further below), used to be called Scuderi Holyoke Power LLC but also changed its name in 2019.22 The SEC provided a good summary of the Scuderi Group’s history in a 2013 cease-and-desist order that imposed a $100,000 civil money penalty on Sal Scuderi (emphasis added): Founded in 2002, Scuderi Group has been in the business of developing a new internal combustion engine design. Scuderi Group’s business plan is to develop, patent, and license its engine technology to automobile companies and other large engine manufacturers. Scuderi Group, which considers itself a development stage company, has not generated any revenue… …These proceedings arise out of unregistered, non-exempt stock offerings and misleading disclosures regarding the use of offering proceeds by Scuderi Group and Mr. Scuderi, the company’s president. Between 2004 and 2011, Scuderi Group sold more than $80 million worth of securities through offerings that were not registered with the Commission and did not qualify for any of the exemptions from the Securities Act’s registration requirement. The company’s private placement memoranda informed investors that Scuderi Group intended to use the proceeds from its offerings for “general corporate purposes, including working capital.” In fact, the company was making significant payments to Scuderi family members for non-corporate purposes, including, large, ad hoc bonus payments to Scuderi family employees to cover personal expenses; payments to family members who provided no services to Scuderi; loans to Scuderi family members that were undocumented, with no written interest and repayment terms; large loans to fund $20 million personal insurance policies for six of the Scuderi siblings for which the company has not been, and will not be, repaid; and personal estate planning services for the Scuderi family. Between 2008 and 2011, a period when Scuderi Group sold more than $75 million in securities despite not obtaining any revenue, Mr. Scuderi authorized more than $3.2 million in Scuderi Group spending on such purposes. …In connection with these offerings [of stock], Scuderi Group disseminated more than 3,000 PPMs [private placement memoranda] to potential investors, directly and through third parties. Scuderi Group found these potential investors by, among other things, conducting hundreds of roadshows across the U.S.; hiring a registered broker-dealer to find investors; and paying numerous intermediaries to encourage people to attend meetings that Scuderi Group arranged for potential investors. …Scuderi Group’s own documents reflect that, in total, over 90 of the company’s investors were non-accredited investors… The Scuderi Group and Sal Scuderi neither admitted nor denied the SEC’s findings but agreed to stop violating securities law. Contemporary local news coverage of the regulatory action added color to the SEC’s description of the Scuderis’ fund-raising tactics (emphasis added): Here on Long Island, folks like HVAC specialist Bill Constantine were early investors, hoping to earn a windfall from Scuderi licensing the idea to every engine manufacturer in the world. Constantine said he was familiar with the Scuderis because he worked at an Islandia company that distributed an oil-less compressor for a refrigerant recovery system designed by the family patriarch. Constantine told [Long Island Business News] he began investing in the engine in 2007, getting many of his friends and family to put their money in, too. The company held an invitation-only sales pitch at the Marriott in Islandia in February 2011. Commercial real estate broker George Tsunis said he was asked to recruit investors for the Scuderi Group, but declined after hearing the pitch. “They were talking about doing business with Volkswagen and Mercedes, but everything was on the come,” Tsunis said. “They were having a party and nobody came.” Hot on the heels of the SEC action, an individual investor who had purchased $197,000 of Scuderi Group preferred units sued the Scuderi Group as well as Sal, Nick, Deborah, Stephen, and Ruth Scuderi individually, alleging, among other things, securities fraud (e.g. “untrue statements of material fact” in offering memoranda). This case was settled out of court in 2016 after the judge reportedly “said from the bench that he was likely to grant summary judgement for [the] plaintiff. … That ruling would have clear the way for other investors in Scuderi to claim at least part of a monetary settlement.” (Two other investors filed a similar lawsuit in 2017 but had it dismissed in 2018 because they ran afoul of the statute of limitations.23) The Scuderi Group put on a brave face, saying publicly, “The company is very pleased to put the SEC matter behind it and return focus to its technology.” In fact, in December 2013, just months after the SEC news broke, the company entered into a “Cooperative Consortium Agreement” with Hino Motors, a Japanese manufacturer, creating an “engineering research group” to further develop the Scuderi engine concept. “Hino paid Scuderi an initial fee of $150,000 to join the Consortium Group, which was to be refunded if Scuderi was unable to raise the funding necessary to start the Project by the Commencement Date,” in the words of Hino’s later lawsuit.24 Sure enough, the Scuderi Group ended up canceling the project in early October 2014 “due to funding and participant issues” – but it didn’t pay back the $150,000. Hino’s lawsuit documents Stephen Scuderi’s long series of emailed excuses: 10/31/14: “I must apologize, but we are going to be a little late in our refund of the Consortium Fee of $150,000. I am sure you have been able to deduce that we have a fair amount of challenging financial problems that we are working through. I am counting on financing for our current backlog of Power Purchase Agreement (PPA) projects to provide the capital to refund the Consortium Fee. Though we are very optimistic that the financial package for our PPA projects will be completed successfully, the process is taking a little longer than I originally expected to complete (approximately 3 months longer).” 11/25/14: “I am confident that we can pay Hino back its refund by the end of January. … The reason I have been slow to respond is because I was waiting for feedback from a few large cornerstone investors that we have been negotiating with. The negotiations have been progressing very well and we are close to a comprehensive financing deal, but (as often happens) the back and forth of the negotiating process takes ” 1/12/15: “We have given a proposal to the potential high-end investors that is most interested in investing a large sum of money into Scuderi Group. That investor has done his due-diligence on our company and has communicated to us that he likes our proposal but wants to give us a counter ” 1/31/15: “The individual I spoke of last month is one of several high net worth individuals that are currently evaluating investing a significant amount of equity capital into our That particular individual has not yet responded with a counter proposal, because he wishes to complete a study on the power generation market as part of his due diligence effort first. Though we learned of the study only recently, we believe that his enthusiasm for investing in Scuderi Group remains as strong as ever and steady progress is being made with the other high net worth individuals as well. … I ask only that you be patient for a short while longer as we make every effort possible to raise the monies need[ed] to refund Hino its consortium fee.” Fed up, Hino sued instead of waiting for the next excuse – but ended up discovering that the Scuderi bank account to which it had wired the $150,000 now contained only about $64,000. Hino and the Scuderi Group then entered into a settlement in which that account balance was supposed to be immediately handed over to Hino, with the remainder plus interest to be paid back later – but Scuderi didn’t even comply with its own settlement, forcing Hino to re-initiate its lawsuit and obtain an official court judgment against Scuderi. Pursuant to that judgment, Hino formally requested an array of documents like tax returns and bank statements, but Scuderi simply ignored these requests, using the following brazen logic:25 Though as of this date, the execution has not been satisfied, Scuderi continues to operate in the ordinary course of business and reasonably expects to have money available to satisfy the execution in full in the near future. … Responding to the post- judgment discovery requests, as a practical matter, will not enable Scuderi to pay Hino any faster than can be achieved by Scuderi using all of its resources and efforts to conduct its day-to-day business operations and will only serve to impose additional and unnecessary costs on both parties. Scuderi has offered and is willing to make payments every 30 days to Hino in amounts not less than $10,000 until the execution is satisfied in full. Shortly thereafter, in March 2016, Hino dropped its case, perhaps having chosen to take the $10,000 per month rather than continue to tangle in court with the Scuderis (though we don’t know for sure). With its name tarnished by disgruntled investors and the SEC, and at least one of its bank accounts wiped out by Hino Motors, the Scuderi Group didn’t appear to have a bright future. But then, like a phoenix rising from the ashes, a new business was born: Scuderi Clean Energy, “a wholly owned subsidiary of Scuderi Group, Inc. … formed in October 2015 to market Scuderi Engine Technology to the power generation industry.” (Over time, references to the troubled “Scuderi Engine Technology” have faded away; today ESG Clean Energy is purportedly planning to use standard, off-the-shelf Caterpillar engines. And while an early press release described Scuderi Clean Energy as “a wholly owned subsidiary of Scuderi Group,” the current Scuderi/ESG Clean Energy, LLC, appears to have been created later as its own (nominally) independent entity, led by Nick Scuderi.) As the emailed excuses in the Hino dispute suggested, this pivot to “clean energy” and electric power generation had been in the works for some time, enabling Scuderi Clean Energy to hit the ground running by signing a deal with Holyoke Gas and Electric, a small utility company owned by the city of Holyoke, Massachusetts (population 38,238) in December 2015. The basic idea was that Scuderi Clean Energy would install a large natural-gas generator and associated equipment on a vacant lot and use it to supply Holyoke Gas and Electric with supplemental electric power, especially during “peak demand periods in the summer.”26 But it appears that, from day one, Holyoke had its doubts. In its 2015 annual report (p. 80), the company wrote (emphasis added): In December 2015, the Department contracted with Scuderi Clean Energy, LLC under a twenty (20) year [power purchase agreement] for a 4.375 MW [megawatt] natural gas generator. Uncertain if this project will move forward; however Department mitigated market and development risk by ensuring interconnection costs are born by other party and that rates under PPA are discounted to full wholesale energy and resulting load reduction cost savings (where and if applicable). Holyoke was right to be uncertain. Though its 2017 annual report optimistically said, “Expected Commercial Operation date is April 1, 2018” (p. 90), the 2018 annual report changed to “Expected Commercial Operation is unknown at this time” – language that had to be repeated verbatim in the 2019 and 2020 annual reports. Six years after the contract was signed, the Scuderi Clean Energy, now ESG Clean Energy, project still hasn’t produced one iota of power, let alone one dollar of revenue. What it has produced, however, is funding from retail investors, though perhaps not as much as the Scuderis could have hoped. Beginning in 2017, Scuderi Clean Energy managed to sell roughly $1.3 million27 in 5-year “TIGRcub” bonds (Top-Line Income Generation Rights Certificates) on the small online Entrex platform by advertising a 12% “minimum yield” and 16.72% “projected IRR” (based on 18.84% “revenue participation”) over a 5-year term. While we don’t know the exact terms of these bonds, we believe that, at least early on, interest payments were covered by some sort of prepaid insurance policy, while later payments depend on (so far nonexistent) revenue from the Holyoke project. But Scuderi Clean Energy had been aiming to raise $6 million to complete the project, not $1 million; indeed, this was only supposed to be the first component of a whole empire of “Scuderi power plants”28 that would require over $100 million to build but were supposedly already under contract.29 So far, however, nothing has come of these other projects, and, seemingly suffering from insufficient funding, the Holyoke effort languished. (Of course, it might have been more investor-friendly if Scuderi Clean Energy had only accepted funding on the condition that there was enough to actually complete construction.) Under the new ESG Clean Energy name, the Scuderis tried in 2019 to raise capital again, this time in the form of $5 million of preferred units marketed as a “5 year tax free Investment with 18% cash-on-cash return,” but, based on an SEC filing, it appears that the offering didn’t go well, raising just $150,000. With funding still limited and the Holyoke project far from finished, the clock is ticking: the $1.3 million of bonds will begin to mature in early 2022. It was thus fortunate that Viking came along when it did to pay ESG Clean Energy a $1.5 million upfront royalty for its incredible technology. Interestingly, ESG Clean Energy began in late 2020 to provide extremely detailed updates on its Holyoke construction progress, including items as prosaic as “Throughout the week, ESG had met with and continued to exchange numerous e-mails with our mechanical engineering firm.” With frequent references to the “very fluid environment,” the tone is unmistakably defensive. Consider the September update (emphasis not added): Reading between the lines, we believe the intended message is this: “We didn’t just take your money and run – honest! We’re working hard!” Nonetheless, someone appears to be unhappy, as indicated by the FINRA BrokerCheck report for one Eric Willer, a former employee of Fusion Analytics, which was listed as a recipient of sales compensation in connection with the Scuderi Clean Energy bond offerings. Willer may now be in hot water: a disclosure notice dated 3/31/2021 reads: “Wells Notice received as a preliminary determination to recommend disciplinary action of fraud, negligent misrepresentation, and recommendation without due diligence in the sale of bonds issued by Scuderi Holyoke,” with a further investigation still pending. We wait eagerly for additional updates. Why does the saga of the Scuderis matter? Many Camber investors seem to have convinced themselves that the ESG Clean Energy “carbon capture” IP licensed by Viking has enormous value and can plausibly justify hundreds of millions of dollars of incremental market cap. As we explained above, we find this thoroughly implausible even without getting into Scuderi family history: in the end, the “technology” will at best add a smidgen of value to some generators in Canada. But track records matter too, and the Scuderi track record of failed R&D, delays, excuses, and alleged misuse of funds is worth considering. These people have spent six years trying and failing to sell power to a single municipally owned utility company in a single small city in western Massachusetts. Are they really about to end climate change? The Case of the Fictitious CFO Since Camber is effectively a bet on Viking, and Viking, in its current form, has been assembled by James Doris, it’s important to assess Doris’s probity and good judgment. In that connection, it’s noteworthy that, from December 2014 to July 2016, at the very start of Doris’s reign as Viking’s CEO and president, the company’s CFO, Guangfang “Cecile” Yang, was apparently fictitious. (Covering the case in 2019, Dealbreaker used the headline “Possibly Imaginary CFO Grounds For Very Real Fraud Lawsuit.”) This strange situation was brought to light by an SEC lawsuit against Viking’s founder, Tom Simeo; just last month, a US district court granted summary judgment in favor of the SEC against Simeo, but Simeo’s penalties have yet to be determined.30 The court’s opinion provided a good overview of the facts (references omitted, emphasis added): In 2013, Simeo hired Yang, who lives in Shanghai, China, to be Viking’s CFO. Yang served in that position until she purportedly resigned in July 2016. When Yang joined the company, Simeo fabricated a standing resignation letter, in which Yang purported to “irrevocably” resign her position with Viking “at any time desired by the Company” and “[u]pon notification that the Company accepted [her] resignation”…Simeo forged Yang’s signature on this document. This letter allowed Simeo to remove Yang from the position of CFO whenever he pleased. Simeo also fabricated a power of attorney purportedly signed by Yang that allowed Simeo to “affix Yang’s signature to any and all documents,” including documents that Viking had to file with the SEC. Viking represented to the public that Yang was the company’s CFO and a member of its Board of Directors. But “Yang never actually functioned as Viking’s CFO.” She “was not involved in the financial and strategic decisions” of Viking during the Relevant Period. Nor did she play any role in “preparing Viking’s financial statements or public filings.” Indeed, at least as of April 3, 2015, Yang did not do “any work” on Viking’s financial statements and did not speak with anyone who was preparing them. She also did not “review or evaluate Viking’s internal controls over financial reporting.” Further, during most or all of the Relevant Period, Viking did not compensate Yang despite the fact that she was the company’s highest ranking financial employee. Nevertheless, Simeo says that he personally paid her in cash. Yang’s “sole point of contact” at Viking was Simeo. Indeed Simeo was “the only person at Viking who communicated with Yang.” Thus many people at Viking never interacted with Yang. Despite the fact that Doris has served as Viking’s CEO since December 2014, he “has never met or spoken to Yang either in person or through any other means, and he has never communicated with Yang in writing.” … To think Yang served as CFO during this time, but the CEO and other individuals involved with Viking’s SEC filings never once spoke with her, strains all logical credulity. It remains unclear whether Yang is even a real person. When the SEC asked Simeo directly (“Is it the case that you made up the existence of Ms. Yang?”) he responded by “invoking the Fifth Amendment.”31 While the SEC’s efforts thus far have focused on Simeo, the case clearly raises the question of what Doris knew and when he knew it. Indeed, though many of the required Sarbanes-Oxley certifications of Viking’s financial statements during the Yang period were signed by Simeo in his role as chairman, Doris did personally sign off on an amended 2015 10-K that refers to Yang as CFO through July 2016 and includes her complete, apparently fictitious, biography. Viking has also disclosed the following, which we believe pertains to the Yang affair (emphasis added): In April of 2019, the staff (the “Staff”) of the SEC’s Division of Enforcement notified the Company that the Staff had made a preliminary determination to recommend that the SEC file an enforcement action against the Company, as well as against its CEO and its CFO, for alleged violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder [laws that pertain to securities fraud] during the period from early 2014 through late 2016. The Staff’s notice is not a formal allegation or a finding of wrongdoing by the Company, and the Company has communicated with the Staff regarding its preliminary determination. The Company believes it has adequate defenses and intends to vigorously defend any enforcement action that may be initiated by the SEC.32 Perhaps the SEC has moved on from this matter and will let Doris and Viking off the hook, but the fact pattern is eyebrow-raising nonetheless. A similarly troubling incident came soon after the time of Yang’s “resignation,” when Viking’s auditing firm resigned, withdrew its recent audit report, and wrote a letter “advising the Company that it believed an illegal act may have occurred” – because of concerns that had nothing to do with Yang. First, Viking accounted for the timing of a grant of shares to a consultant in apparent contradiction of the terms of the written agreement with the consultant – a seemingly minor issue. But, under scrutiny from the auditor, Viking “produced a letter… (the version which was provided to us was unsigned), from the consultant stating that the Agreement was invalidated verbally.” Reading between the lines, the “uncomfortable” auditor suspected that this letter was a fake, created just to get him off Viking’s back. In another incident, the auditor “became aware that seven of the company’s loans…were due to be repaid” in August 2016 but hadn’t been, creating a default that would in turn “trigger[] a cross-default clause contained in 17 additional loans” – but Viking claimed it “had secured an oral extension to the loans from the broker-dealer representing the lenders by September 6, 2016” – after the loans’ maturity dates – “so the Company did not need to disclose ‘the defaults under these loans’ after such time since the loans were not in default.” It’s easy to see why an auditor would object to this attitude toward financial disclosure – no need to mention a default in August as long as you can secure a verbal agreement resolving it by September! Against this backdrop of disturbing behavior, the fact that Camber just dismissed its auditing firm three weeks ago on September 16th, even with delisting looming if the company can’t become current again with its SEC filings by November, seems even more unsettling. Have Camber and Viking management earned investors’ trust? Conclusion It’s not clear why, back in 2017, Lucas Energy changed its name to “Camber” specifically, but we’d like to think the inspiration was England’s Camber Castle. According to Atlas Obscura, the castle was supposed to help defend the English coast, but it took so long to build that its “advanced design was obsolete by the time of its completion,” and changes in the local environment meant that “the sea had receded so far that cannons fired from the fort would no longer be able to reach any invading ships.” Still, the useless castle was “manned and serviced” for nearly a century before being officially decommissioned. Today, Camber “lies derelict and almost unheard of.” But what’s in a name? Article by Kerrisdale Capital Management Updated on Oct 5, 2021, 12:06 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkOct 5th, 2021

Crossgates tax trial starting as Colonie Center loses appeal over its assessment

If the judge rules in favor of Pyramid Management, the town and Guilderland Central School District will have to refund a portion of the roughly $7 million in property taxes that were paid in each year at issue......»»

Category: topSource: bizjournalsNov 13th, 2022

Trump and his lawyers are offering conflicting explanations for why he had secret documents at Mar-a-Lago

Trump in a radio show Thursday was still insisting he had declassified the documents he took with him to Mar-a-Lago after leaving office. Former U.S. President Donald Trump leaves Trump Tower to meet with New York Attorney General Letitia James for a civil investigation on August 10, 2022 in New York City. (James Devaney/GC Images Trump has claimed he had declassified the official documents he took after leaving office.  But in a court appearance on Thursday his lawyers did not make that argument. Trump's defence in the wake of the Mar-a-Lago raid has shifted over time.  Donald Trump and his lawyers have made a range of arguments to explain why the former president was keeping hundreds of classified documents at his Ma-a-Lago resort after leaving office. But increasingly their explanations are diverging. In an interview Thursday, Trump repeated an argument he has been making for weeks – insisting he had declassified the information before leaving office under his sweeping presidential powers to to lift classification of government information. John Fredericks, a conservative radio host, asked Trump how the stashes of top secret documents had ended up at his Florida resort before being retrieved by the FBI in an August 8 search of his property.  Trump replied that one "accumulate[s] a lot of stuff" during a four-year term in the White House."There's nothing secret about it," he continued. "It didn't have to be anything secret, and it's all declassified".Only weeks ago, his attorneys were pushing the claim in media interviews. But in a Palm Beach courthouse Thursday, his lawyers were making a different case in arguing for a third party to be appointed to inspect the documents retrieved in the search, and for them ultimately to be returned. —Kyle Cheney (@kyledcheney) September 1, 2022 They focussed on arguments that Trump was entitled to keep the documents under executive privilege rules. This, they argued, allow presidents the right to designate as personal and hold back some government documents from the National Archives after leaving office, Politico reported. Notably absent was any claim the records had been broadly declassified by Trump, which they also did not mention in a legal filing earlier in the week. Experts have been critical of the defences mounted by Trump and his legal team so far.No evidence has emerged to substantiate Trump's claims he declassified the records found at Mar-a-Lago, with "classified" marking clearly visible on folders of documents the FBI pictured in the raid and included in a legal filing this week. In any case, the statutes the DOJ believes Trump may have violated don't require the records to be classified.Michael Stern, a former lead counsel for the US House of Representatives, told Insider this week that Trump's legal team was unlikely to be successful in arguing for the documents to be returned under privilege rules, as it would require a judge to rule that Trump has more right to the documents than the current administration, a claim for which there's no legal precedent. Stern also argued that privilege rules only apply to communications between a president and their close advisors, not to intelligence or government documents more broadly. Some of Trump's claims about the raid appear to be aimed at riling up his base. The former president baselessly claimed that the FBI may have planted evidence during its search, echoing the convictions of his supporters that a "deep state" of hostile officials has long been plotting against him. But they are claims notably not being repeated by his attorney in the courthouse.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 2nd, 2022

Greenwald: NBC News Uses Ex-FBI Official Frank Figliuzzi To Urge Assange"s Extradition, Hiding His Key Role

Greenwald: NBC News Uses Ex-FBI Official Frank Figliuzzi To Urge Assange's Extradition, Hiding His Key Role Authored by Glenn Greenwald via, Two of the television outlets on which American liberals rely most for their news — NBC News and CNN — have spent the last six years hiring a virtual army of former CIA operatives, FBI officials, NSA spies, Pentagon chiefs, and DOJ prosecutors to work in their newsrooms. The multiple ways in which journalism is fundamentally corrupted by this spectacle are all vividly illustrated by a new article from NBC News that urges the prosecution and extradition of Julian Assange, claiming that the WikiLeaks founder, once on U.S. soil, will finally provide the long-elusive proof that Trump criminally conspired with Russia. Twitter profile of former FBI Assistant Director Frank Figliuzzi, now of NBC News The NBC article is written by former FBI Assistant Director and current NBC News employee Frank Figliuzzi, who played a central role during the Obama years in the FBI's attempt to investigate and criminalize Assange: a rather relevant fact concealed by NBC when publishing this. But this is how U.S. security state agents now directly control corporate news outlets. During the Cold War and then in the decades following it, the U.S. security state constantly used clandestine measures to infiltrate U.S. corporate media outlets and shape U.S. media coverage in order to propagandize the domestic population. Indeed, intelligence agencies have a long, documented record of violating their charter by interfering in domestic politics through formal programs to manipulate U.S. media coverage. In 1974, The New York Times’ Seymour Hersh exposed that “the [CIA], directly violating its charter, conducted a massive, illegal domestic intelligence operation” which included “assembling domestic intelligence dossiers” and “recruiting informants to infiltrate some of the more militant dissident groups.” The Senate's Church Committee report in 1976 concluded that “intelligence excesses, at home and abroad, were not the 'product of any single party, administration, or man,”; rather, “Intelligence agencies have undermined the constitutional rights of citizens primarily because checks and balances designed by the framers of the Constitution to assure accountability have not been applied.” A 1977 Rolling Stone exposé by Carl Bernstein — entitled “The CIA and the Media” — revealed “more than 400 American journalists who in the past twenty-five years have secretly carried out assignments for the CIA" — including the most influential news executives in the country: William Paley of CBS, Henry Luce of Time Inc., Arthur Hays Sulzberger of the New York Times. Bernstein laid out how sweeping the CIA's commandeering of mainstream media outlets was: Some of these journalists' relationships with the Agency were tacit; some were explicit. There was cooperation, accommodation and overlap. Journalists provided a full range of clandestine services -- from simple intelligence gathering to serving as go-betweens with spies in Communist countries. Reporters shared their notebooks with the CIA. Editors shared their staffs. Some of the journalists were Pulitzer Prize winners, distinguished reporters who considered themselves ambassadors-without-portfolio for their country. Most were less exalted: foreign correspondents who found that their association with the Agency helped their work; stringers and freelancers who were as interested it the derring-do of the spy business as in filing articles, and, the smallest category, full-time CIA employees masquerading as journalists abroad. In many instances, CIA documents show, journalists were engaged to perform tasks for the CIA with the consent of the managements America's leading news organizations. The history of the CIA's involvement with the American press continues to be shrouded by an official policy of obfuscation and deception. . . . By far the most valuable of these associations, according to CIA officials, have been with The New York Times, CBS, and Time Inc. In 1996, the Senate Intelligence Committee issued a lengthy report entitled “CIA's Use of Journalists and Clergy in Intelligence Operations" after “the House of Representatives [took] a vote on the subject as to the prohibition of use of journalists and others by the CIA." In 2008, The New York Times’ David Barstow won a Pulitzer for exposing the Pentagon's secret plot to disseminate Defense Department talking points by placing former officials as “analysts" at each news network who, in secret, coordinated their claims. In 2014, The Intercept obtained the CIA's communications with journalists through a FOIA request and discovered that national security reporter Ken Dilanian routinely submitted his drafts about the CIA to agency officials before publication; his newspaper at the time, The Los Angeles Times, pronounced itself “disappointed” and said he may have violated the paper's rules, but he was promptly hired by the Associated Press and now covers the intelligence community for . . . NBC News. Revealingly, none of those multiple Congressional and media exposés deterred the CIA and related agencies from contaminating domestic media coverage. Over the last six years, the opposite happened: this tactic has accelerated greatly. U.S. security state services now not only shape but often control news coverage — not by clandestine tactics but right out in the open. Many of the top security state officials over the last two decades have been hired to deliver "news” for these two major corporate networks: former CIA Director John Brennan (NBC), former Homeland Security Secretary James Clapper (CNN), former Assistant FBI Director Frank Figliuzzi (NBC), former Homeland Security Advisor Fran Townsend (CNN), disgraced former FBI Deputy Director Andrew McCabe (CNN), former NSA and CIA Director Michael Hayden (CNN), and countless others. This career path from the Deep State to NBC/CNN is now so common that those who are fired in disgrace or resign immediately show up on their payroll. As but one illustrative example: on February 2, 2018, FBI official Josh Campbell wrote a self-serving op-ed in The New York Times flamboyantly announcing his resignation over alleged interference by Trump officials; two days later, CNN announced it had hired Campbell as a "law enforcement analyst,” where he continues to "report the news.” In 2018, the DOJ's Inspector General concluded that McCabe, while serving as former FBI Deputy Director, had lied to the Bureau about his role in the leaks; CNN then hired him. The reasons this is so dangerous are self-evident. Allowing the U.S. security state to shape the news converts media outlets into a form of state TV. As Politico's Jack Shafer wrote in 2018 under the headline "The Spies Who Came Into the TV Studio": Standard journalistic contributors—reporters, anchors, editors, producers—pursue the news wherever it goes without fear or favor, as the famous motto puts it. But almost to a one, the TV spooks still identify with their former employers at the CIA, FBI, DEA, DHS, or other security agencies and remain protective of their institutions. This makes nearly every word that comes out of their mouths suspect. These security state agencies were created to lie and spread disinformation; allowing them to place their top operatives at news outlets obliterates even the pretense that there is any separation between them and corporate journalism. Worse, it requires these media outlets to pretend they are adversarially reporting on agencies which their own colleagues recently helped run. And, worst of all, it creates a massive conflict of interest whereby news “analysts” are commenting on stories in which they played central roles in their prior, often-very-recent life as a security state operative — as happened repeatedly during Russiagate when people like John Brennan were “analyzing” investigations for NBC News which they helped launch or of which they are targets. The New York Times, Dec. 23, 2019 To call all of this a conflict of interest is to gravely understate the case. It is an all-but-explicit merger between the security state and the corporate media. This latest NBC News article on Assange by former FBI Assistant Director Figliuzzi features all of these corrupt dynamics. MSNBC has been repeatedly promoting it. That is remarkable on its own: a so-called "news outlet” is cheering — indeed, salivating over — the Biden administration's attempt to criminalize Assange under “espionage” laws for the sin of reporting genuine documents showing all sorts of improper conduct by the agencies whose former operatives now staff that network. Given that press freedom groups in the West have uniformly condemned the prosecution of Assange as a grave threat to a free press, it is stunning to watch a corporation that claims to be in the news business cheering rather than denouncing it. But for the U.S. media, that is just ordinary corruption and subservience to the CIA: it is hardly rare to find "journalists” giddy over the prospect of Assange's ongoing imprisonment. What makes this new article particularly notable is that the FBI — when Figliuzzi was a senior official there — was directly involved in the attempt to investigate, frame and prosecute Assange. Yet the article, while identifying its analyst as “the assistant director for counterintelligence at the FBI, where he served 25 years as a special agent and directed all espionage investigations across the government,” makes no mention of his direct personal interest in the Assange prosecution. The primary claim of this article is an unhinged conspiracy theory. Figliuzzi asserts that extraditing Assange onto U.S. soil could endanger Donald Trump. The former FBI official barely conceals his glee over the prospect that Assange could somehow offer up dirt on Trump in exchange for a promise of leniency from prosecutors: If the Department of Justice plays its cards right, it can make the case precisely about those Russian government hacks and WikiLeaks' dissemination of the content of those hacks by offering a deal to Assange in return for what he knows. That’s what should worry Trump and his allies. . . . Assange may be able to close the gap between collusion and criminal conspiracy. Assange got the Democratic National Committee data dump from an entity long suspected to be a front for the GRU, the Russian military intelligence service. . . Assange may be able to help the U.S. government in exchange for more lenient charges or a plea deal. Prosecutions can make for strange bedfellows. A trade that offers a deal to a thief who steals data, in return for him flipping on someone who tried to steal democracy sounds like a deal worth doing. So, DOJ, if you’re listening… That Assange "stole data” is an absolute lie — not even the U.S. Government claims this — but NBC News has previously shown that it has no qualms about disseminating that particular lie. As for Figliuzzi’s belief that Assange possesses secret information about Trump's collusion with Russia over the 2016 election: that is nothing short of madness. Robert Mueller did not even attempt to interview Assange, precisely because the Special Counsel (Figliuzzi's former boss) obviously recognized that Assange had no information that would assist Mueller's investigation to determine whether Trump or his associates criminally conspired with Russia. If Assange really has information showing Trump criminally worked with the Kremlin, how can Figliuzzi justify that Mueller, during eighteen months of investigating that question, never even sought to speak to Assange? Moreover, if — as Figliuzzi fantasizes — Assange were in possession of some sort of smoking gun that Mueller never found but which would finally prove Trump's guilt on various crimes, why did Trump not pardon Assange? After all, if this twisted fantasy that NBC News is promoting had any validity — namely, Trump will be in big trouble once the U.S. succeeds in extraditing Assange to the U.S. to stand trial — why was it the Trump administration that brought these charges against Assange in the first place, and why would Trump not have pardoned Assange in order to prevent such a deal from taking place? None of what Figliuzzi is claiming has any evidence to support it or even makes any minimal sense. But as usual, that is no bar to NBC News and MSNBC publishing and aggressively promoting it. As I will never tire of pointing out, it is the corporate media outlets that most vocally denounce disinformation which are the ones guilty of spreading it most frequently and destructively. What makes this NBC article by Figliuzzi worse than standard media disinformation is that the former FBI official is writing about events in which he had direct personal involvement, without any disclosure of this fact. In 2011, Iceland’s Minister of the Interior, Ogmundur Jonasson, discovered that FBI agents had been deployed to his country under false pretenses. The FBI's counterintelligence unit, led by Figliuzzi, had claimed they were there because they wanted to help the Icelandic government stop an “imminent attack” by hackers into Iceland's government databases. That was a lie. As The New York Times reported two years later, the FBI went to Iceland in order to dig up dirt on Assange and WikiLeaks that would enable their prosecution. At the time, Assange was spending significant time in Iceland; he concluded that the country's broad press freedom and privacy protections, as well as support from several politicians, enabled him to work there safely. The FBI unit under Figliuzzi focused its counterintelligence efforts in Iceland on recruiting a very young WikiLeaks insider with a history of criminality and mental illness, Sigurdur Ingi Thordarson, in order to provide incriminating information about Assange. When Jonasson, the Interior Minister, discovered the truth, he expelled the FBI from his country, as The Times recounted: But when “eight or nine” F.B.I. agents arrived in August, Mr. Jonasson said, he found that they were not investigating an imminent attack, but gathering material on WikiLeaks, the activist group that has been responsible for publishing millions of confidential documents over the past three years, and that has many operatives in Iceland. . . . The F.B.I.’s activities in Iceland provide perhaps the clearest view of the government’s interest in Mr. Assange. A young online activist, Sigurdur Ingi Thordarson (known as Siggi), told a closed session of Iceland’s Parliament this year that he had been cooperating with United States agents investigating WikiLeaks at the time of the F.B.I.’s visit in 2011. . . The F.B.I. efforts left WikiLeaks supporters in Iceland shaken. “The paranoia,” [Parliament member Birgitta] Jonsdottir said, “is going to kill us all.” The FBI's counterintelligence efforts under Figliuzzi in Iceland succeeded. Thordarson became a key witness for the FBI in its efforts to prosecute Assange. Indeed, the pending indictment against the WikiLeaks founder — which is the basis for the Biden DOJ's demand that he be extradited from the U.K. — heavily relies on accusations from Thordarson (the indictment refers to him as "Teenager” and to Iceland as "NATO Country-1"). Even a cursory review of the indictment shows how central to the case against Assange are the allegations which the FBI induced Thordarson to make: "In September 2010, ASSANGE directed Teenager to hack into the computer of an individual formerly associated with WikiLeaks and delete chat logs containing statements of ASSANGE.” But in June of this year, Thordarson recanted his allegations against Assange. Speaking to the Icelandic newspaper Stundin, Thordarson confessed how he had been caught stealing money from WikiLeaks by forging an email in Assange's name and directing WikiLeaks’ funds to be sent to his personal account. He “saw a way out” of the pending criminal problem by helping the FBI in its hunt against Assange. Thus, "on August 23d, [Thordarson] sent an email to the US Embassy in Iceland offering information in relation to a criminal investigation,” and he then became the FBI's star witness. Providing the FBI with false allegations against Assange helped the FBI but did not help Thordarson much: he was shortly thereafter convicted on charges of “massive fraud, forgeries and theft on the one hand and for sexual violations against underage boys he had tricked or forced into sexual acts on the other.” Yet “Thordarson was sentenced in 2013 and 2014 and received relatively lenient sentences” as the judge reviewed his cooperation activities as well as his formal psychiatric diagnosis that he is a sociopath. Even after that lenient punishment, Thordarson continued to commit crimes, piling up numerous other criminal charges. That was when the FBI, eager to indict Assange, again saw an opportunity in Thordarson: In May 2019 Thordarson was offered an immunity deal, signed by [U.S. Deputy Attorney General Kellen S.] Dwyer, that granted him immunity from prosecution based on any information on wrongdoing they had on him. The deal, seen in writing by Stundin, also guarantees that the DOJ would not share any such information to other prosecutorial or law enforcement agencies. That would include Icelandic ones, meaning that the Americans will not share information on crimes he might have committed threatening Icelandic security interests – and the Americans apparently had plenty of those but had over the years failed to share them with their Icelandic counterparts. With Assange now behind bars based on the indictment he helped the FBI secure, Thordarson decided to come clean. He had lied to the FBI and fed them false incriminating information against Assange because he knew that would help shield him from accountability for his own crimes. In other words, at the heart of the FBI's case against Assange — one compiled by the FBI's counterintelligence operations under Figliuzzi before he went to NBC News — is a chronic criminal with a history of fraud, sexual assault against minors, and serious psychiatric illness. And he has now recanted his claims. If NBC News were a legitimate news operation, it would obviously bar Figliuzzi from “reporting on” or “analyzing” a major press freedom case in which the FBI was so intricately involved, and implicated, during his tenure there. But the opposite is true. Figliuzzi is obsessed with Assange's prosecution and extradition, talking about it often both on his social media account and on NBC and MSNBC platforms. Beyond the issue of journalistic ethics — which nobody should expect of NBC and MSNBC at this point — something more sinister is going on here. The Biden administration's aggressive pursuit of Assange's extradition, along with its demand that he be kept imprisoned while the judicial process is pending, has been denounced with increasing fervor by press freedom and civil liberties groups that are usually allies of the Democrats. That even includes the ACLU. Leaders from around the world, including on the left, have been strongly condemning the Biden administration. Other countries are now frequently holding up Biden's assault on press freedom, along with the British government, as a reason why those two countries lack credibility to sermonize about press freedom. This new argument pushed by NBC News and its former FBI operative Frank Figliuzzi — liberals should cheer Assange's prosecution because we can squeeze him once he is here to turn on and implicate Trump — seems like a barely disguised political ploy to protect the Biden White House from criticism. NBC News knows that liberals crave Trump’s prosecution above all, so trying to convince them that Assange's extradition could advance that — as false as that obviously is — would likely benefit the White House which NBC serves, by fortifying support among Trump-obsessed liberals or at least diluting opposition. But taken on its own terms, the argument now being promoted by NBC to justify Assange's extradition is deeply disturbing. What they are essentially arguing is that the entire prosecution is a pretext. Though justified based on Assange's alleged lawbreaking in connection with the 2010 publication by WikiLeaks of the Iraq and Afghanistan war logs, the real benefit, according to NBC, is the opportunity to pressure Assange to turn on Trump in connection with the 2016 election. In other words, they are keeping Assange imprisoned for years, and working to bring him to the U.S., because they believe they can force him with promises of leniency to offer up information they can use against Trump — just as the FBI manipulated the young, mentally unwell Icelandic teenager to offer false accusations against Assange. And that would also create the added incentive to treat Assange as abusively as possible to turn the pressure as high up as possible for him to implicate Trump. Indeed, on the day Assange was arrested in London, a smiling Sen. Joe Manchin (D-WV) all but proclaimed this to be the real purpose of the extradition ("he'll be our property and we can get the truth and the facts from him"): That the U.S.'s corporate newsrooms are now filled with former agents of the U.S. security state on their payrolls is one of the most significant and disturbing media developments in recent years. It means that dirty, scheming operatives like Frank Figliuzzi can now do their dirty work not in the shadows or in agencies known to be guilty for decades of this sort of treachery and lies, but under the cover of “respectable” media outlets. When Figliuzzi speaks — or when John Brennan or James Clapper or Andrew McCabe do — the lips of these media outlets are moving but the CIA and the FBI and the DOJ are the ones actually speaking. That has been true for decades, but at least they had the decency to maintain the pretense. That security state agencies have now dispensed with the formalities and control these news outlets so directly reveals the utter impunity with which they now operate, particularly in establishment liberal circles. That an FBI official who played a key role in concocting false accusations against Assange now "reports” or “analyzes” that very same case under the logo of NBC News says more about the institutional corruption of these news outlets than thousands of articles could ever get close to. To support the independent journalism we are doing here, please subscribe, obtain a gift subscription for others and/or share the article Tyler Durden Sun, 01/02/2022 - 18:00.....»»

Category: worldSource: nytJan 2nd, 2022

Students Sue Columbia University Over Covid Shutdown, Win $12.5 Million

Students Sue Columbia U Over Covid Shutdown, Win $12.5 Million; Could Encourage More “Zoom U” Suits and Settlements of Existing Ones Q3 2021 hedge fund letters, conferences and more Students Sue Columbia University WASHINGTON, D.C. (November 27, 2021) – In still another David v. Goliath victory, students brought a putative class action law suit against […] Students Sue Columbia U Over Covid Shutdown, Win $12.5 Million; Could Encourage More “Zoom U” Suits and Settlements of Existing Ones if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more Students Sue Columbia University WASHINGTON, D.C. (November 27, 2021) - In still another David v. Goliath victory, students brought a putative class action law suit against Columbia University because of its coronavirus-spurred campus closures, and the Ivy League giant agreed to pay $12.5 million to settle the suit, says public interest law professor John Banzhaf, who predicts that this unexpected settlement will encourage more such law suits, and the settlement of many already filed. If Columbia, despite its renowned faculty and reputation, and with its vast legal and financial resources, was forced to settle this law suit and return all the fees the students have paid during the pandemic shutdown, many smaller universities and colleges may well decide that they can't do any better in court than Columbia, and likewise fork over the fees they pocketed for services which were never rendered, argues Banzhaf. He points out that $12.5 million is coincidentally the same amount his law students won in a law suit against McDonald's over the fat in its french fries, proving that with the right legal sling shot, tiny Davids can win law suits against mighty Goliaths, and that it can pay to "Sue The Bastards" when they disobey the law. In this case the judge allowed the students to sue for fees they paid for services never received during the campus shutdown, but not for a partial refund of tuition for having to take classes over the Internet. Students Forced Onto Zoom U Can Sue for Refunds But, as Banzhaf reported months ago in an analysis entitled "Students Forced Onto Zoom U Can Sue for Refunds" which followed from his encouragement of such class actions, many courts have handed down tuition rulings in favor of students forced to accept on-line instruction. As one judge put it in ruling for the students, "This is kind of like purchasing a Cadillac at full price and receiving an Oldsmobile. Although both are fine vehicles, surely it is no consolation to the Cadillac buyer that the 'Olds' can also go from Point A to Point B." Similar rulings were also handed down in cases involving, among others, Boston University, Barry University, Florida S. College, University of Michigan, Rochester Institute of Technology, Rensselaer Polytechnic Institute, Ohio State University, Western Michigan University, University of Michigan, Ball State University, University of Toledo, Kent State University, and Ohio University. Banzhaf's widely circulated report also suggested that some students were likely to sue when their universities tried to force them to pay to have their property, which they were forced to leave behind when they were summarily evicted from their dorms, returned to them. Shorty thereafter, his own George Washington University, and other universities, decided to drop such charges. Updated on Nov 29, 2021, 3:21 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 29th, 2021

Flood and Disaster Disclosures: Law, Precedent and Grades for All 50 States

As more and more climate change-fueled extreme weather events—from historic hurricanes to unexpected summer downpours—affect homes, one issue anyone selling or buying a home needs to be aware of is disclosure. While some states require a seller to expansively detail any history of flood damage, flood zone designation or other natural disaster threats, others have […] The post Flood and Disaster Disclosures: Law, Precedent and Grades for All 50 States appeared first on RISMedia. As more and more climate change-fueled extreme weather events—from historic hurricanes to unexpected summer downpours—affect homes, one issue anyone selling or buying a home needs to be aware of is disclosure. While some states require a seller to expansively detail any history of flood damage, flood zone designation or other natural disaster threats, others have little or no disclosure requirements or provide only vague guidelines on what needs to be disclosed A recent Federal Emergency Management Agency (FEMA) panel rated all 50 states on the transparency of their flood disclosure policies on a letter grade from “A” for very transparent to “F” for failing to provide adequate policies or guidance. With 21 states receiving an “F” grade, the FEMA panel recommended the creation of a nationwide database of flood events, flood insurance claims and disaster claims. Though most local REALTOR® associations offer a voluntary form which can be provided to clients—all of which include some flood or disaster disclosures—every real estate professional should be aware of the legal requirements and precedents around flood and disaster disclosure in their state. ALABAMA — GRADE: F Alabama has no statutory or regulatory requirements for disclosure of flood risk, federal flood insurance requirements or past flood damages. Sellers must disclose a “material defect or condition that affects health or safety [when] the defect is not known to or readily observable by the buyer,” and a jury found in the 2000 court case Cooper & Co. v. Lester that this applies to “misrepresentations and suppression of material facts” related to flooding. ALASKA — GRADE: C Sellers in Alaska must disclose the flood zone designation and any floods they are aware of on the property, as well as damage caused from “landslide, avalanche, high winds, fire, earthquake or other natural causes.” It also requires that sellers disclose water or leakage in the basement along with frozen pipes or drains. ARIZONA — GRADE: F Arizona state statute requires licensed real estate agents to notify buyers through a written affidavit whether or not the property is on a FEMA-designated floodplain. Arizona also offers a list of other items to disclose, including fissures and environmental hazards affecting, but this report is explicitly not mandatory. Licensed real estate agents must also disclose any water that is a “feature” of the property, and whether it fluctuates “substantially in size or volume.” The in the 2011 court case Barton v. Boesen ruled that a real estate agent and his brokerage could not be held responsible for selling a new house with a defective, regularly leaking foundation because the buyers could not prove he “knew or should have known any information about the construction of the home.” ARKANSAS — GRADE: F Arkansas’s real estate commission explicitly states that no state law requires disclosure of specific information about their property, including floods and natural disasters. However, licensed real estate agents have to make “reasonable efforts” to obtain and disclose information that is “material to the value or desirability” of the property. In the 2011 court case Worley v City of Jonesboro, buyers sued a seller and her brokerage for allegedly understating flooding issues ruled in favor of the seller, with a judge saying that sellers can only be held responsible for nondisclosure in “special circumstances” when they have knowledge a buyer is relying on incorrect or misleading information in a transaction. CALIFORNIA — GRADE: C California has a specific and detailed mandatory form that statutorily requires property sellers to disclose a variety of past damages or potential future hazards, including major flood damage, flood zones, historic forest fire risk and earthquake fault lines. Whether or not a property will require flood insurance does not need to be disclosed. Two new laws passed in 2021 also require sellers to disclose certain fire hazard risks, including any fire hazard zone the property is part of and specific mitigation steps taken to defend against wildfires—everything from ember-resistant roof vents to non-combustible landscaping buffer zones. COLORADO — GRADE: F Real estate brokers are required by the state Department of Regulatory Agencies (DRE) to use state-approved disclosure forms “when appropriate.” While certain disclosures are codified in state law, disaster disclosure—whether a property has been damaged by “hail, wind, fire, flood or other casualty”— is not. The DRE vaguely warns on its website that real estate brokers are “responsible to make all required disclosures to all parties under applicable laws, rules and regulations governing real estate brokers.” In Jehly v. Brown, a 2014 court case involving buyers who were not informed their newly constructed house was built in a floodplain, saw a judge rule in favor of the seller (who did not fill out the disaster disclosure form) despite the fact that the third-party builder of the home knew about the floodplain. CONNECTICUT — GRADE: D Connecticut requires by law that sellers disclose flood hazard and inland wetland designations along with fire and smoke damage, but does not mandate anything regarding past flooding events or damage, or whether flood insurance is required on that property. DELAWARE — GRADE: C Delaware has a mandatory seller disclosure form that includes flood damage, drainage problems and flood zone or wetland designations. Flood insurance, and the current annual premium cost, must also be disclosed when applicable. The state also requires sellers to disclose if the property owner is responsible for repairing nearby streets or sidewalks, and the estimated cost if they are. DISTRICT OF COLUMBIA — GRADE: C The district does have a mandatory disclosure form that asks if there are any exterior drainage problems or if there has been previous flood, fire or wind damage to a property. There are no requirements to disclose flood insurance or floodplain designations. FLORIDA — GRADE: F While Florida has no statutory requirements regarding flood or disaster disclosure, courts have sometimes found that sellers can be held liable for not disclosing “facts or conditions about the property that could have a substantial impact on its value or desirability.” In the 1985 court decision in Johnson v. Davis, a seller was held responsible for not disclosing that a window regularly “gushed” water during rainstorms after they had told the buyer leaking issues had been mitigated, with the judge saying that enough omissions or misrepresentations by sellers could “amount to fraud in the legal sense.” On the other hand, a 1997 decision in Nelson v. Wiggs ruled in favor of a seller who had not disclosed regular property flooding, faulting the buyers for not asking questions of the seller or doing their own research. GEORGIA — GRADE: F Georgia has no codified or statutory mandatory disclosures for flooding. A 2010 appeals court ruling in Shaw v. Robertson faulted a homebuyer and their agent after they discovered significant flooding on a newly-purchased property, saying they “failed to act diligently” by doing more research or observing land conditions before making an offer. HAWAII — GRADE: D Sellers in Hawaii must disclose if a property is in a flood hazard area, but not any flood damage or flood insurance requirements. A mandatory form also asks sellers to disclose “material facts” that “are within the knowledge or control of the seller” or “can be observed from visible, accessible areas,” though how and when this would include flood damage or other natural disaster concerns is not defined. IDAHO — GRADE: F Idaho does not have disclosures for flood damage, flood zones or flood insurance, though a mandatory form does ask if there are “specific problems” with drainage or basement water. That form also has a space requiring “legal, physical, or other” disclosures, though it is not clear if flooding would be included. A 1997 court ruling in Enright v. Jonassen held a seller partially responsible after he failed to disclose a floodplain designation after he was asked explicitly by the buyer about additional building restrictions on the property. ILLINOIS — GRADE: C Sellers must disclose in Illinois whether there has been flooding or leaking in a basement, or whether it is located in a flood plain or currently has flood insurance. Sellers must also disclose if the property has “earth stability defects.” Licensed real estate agents must also disclose “latent material adverse facts pertaining to the physical condition of the property that are actually known by the licensee and that could not be discovered by a reasonably diligent inspection,” but cannot be held liable for passing on false information from a client if they did not have “actual knowledge the information was false.” INDIANA — GRADE: C Sellers in Indiana must disclose if there is any damage to the property due to “wind, flood, termites or rodents,” along with floodplain designations and current flood insurance. That mandatory form also includes “hazardous conditions,” including mine shafts or radioactive material on site. IOWA — GRADE: C Iowa does have mandatory disclosures, though how they are presented can vary. A recommended form requires sellers to disclose past flooding, drainage, grading issues, or floodplain designations, along with “water or other problems” in the basement or foundation. Iowa law specifically allows sellers to draw up their own disclosure form as long as it “contain[s] at a minimum the information required by” the recommended form, and complies generally with state statutes. NAR guidance warns that “no particular language is required provided all mandatory items are included” in a disclosure. KANSAS — GRADE: F Kansas generally requires that a seller discloses “[a]ny environmental hazards affecting the property which are required by law to be disclosed.” This does not explicitly mention flooding or any other natural disaster, though according to the National Association of REALTORS® (NAR), courts have provided some precedent that sellers can be held responsible for certain material omissions, which might include flooding. In the 2013 court case Stechschulte v. Jennings, which involved a seller who had misrepresented repairs he made to windows—leaving behind a can of paint expressly designed to conceal water damage that buyers discovered—the court ruled the seller could be held liable. The seller’s real estate agent, who was also his fiance could be held liable as well, the court ruled, even though she did not live in the home at the time and claimed she had no direct knowledge of leaks or flooding. KENTUCKY — GRADE: C Kentucky requires mandatory disclosure of “draining, flooding, or grading,” as well as its flood hazard designation and flood insurance. It also requires sellers to disclose nearby bodies of water adjoining the property. Kentucky also sets specific sanctions against licensed real estate agents who do not disclose these things, including revoking licenses and levying fines of up to $1,000. LOUISIANA — GRADE: A As a state that has seen some of the worst flooding disasters in recent memory, Louisiana’s disclosures are extensive. The state’s mandatory disclosure form includes any past “flooding, water intrusion, accumulation or drainage problem” as well as its nature and frequency. This information must be provided for every structure on the property, and explicitly includes the time period before the seller owned the property. Flood designations and hazard zones must be disclosed, and the seller must also provide the source and date for these designations—FEMA flood maps, surveys or other third-party oversight. Whether the property is in a wetland, or even has a pending wetland designation, must also be included in the form. Apart from floods, sellers must also disclose “property damage, including, but not limited to, fire, wind, hail, lightning,” that occurred both before and during the seller’s ownership of the property. MAINE — GRADE: F Maine has no mandatory disclosure form, and state statute simply states that that sellers “shall disclose in a timely manner to a prospective buyer all material defects pertaining to the physical condition of the property of which the seller agent knew or, acting in a reasonable manner, should have known” without mentioning floods. Seller’s agents are “not obligated to discover latent defects in the property,” and cannot be held liable if they pass on false information that was provided by a client. The 1999 court case Kezer v. Mark Stimson Assocs. held that sellers and their agents could not be held liable for failing to disclose neighborhood environmental hazards that had not significantly affected the property in question. MARYLAND — GRADE: D While Maryland does have a mandatory disclosure form, the only flood-related item asks if the property is located in a “flood zone, conservation area, wetland area, [or] Chesapeake Bay critical area.” The form also asks for the disclosure of “material defects,” though whether that applies to flooding or flood damage is not explicit. MASSACHUSETTS — GRADE: F State statute requires that a seller “disclose known material defects in real property” but provides no other guidance on floods and no mandatory form. In 2008, the Massachusetts Supreme Court case Grossman v. Pouy saw a seller leave blank sections on a voluntary disclosure form related to roof and other structural deficiencies when the roof needed to be immediately replaced and walls were filled with mold and rodents. The court in this case found that failure to disclose serious defects that rose to the level of fraud could render sellers liable. MICHIGAN — GRADE: C Michigan does have mandatory disclosures, including for flood insurance, drainage or grading issues, and any “major damage to the property from fire, wind, floods or landslides.” Interestingly, the state explicitly allows counties or towns to add their own additional forms or disclosures, meaning some areas have potentially more stringent flood disclosure requirements for sellers or their agents. MINNESOTA — GRADE: D Though Minnesota does not have a mandatory disclosure form, state statute requires that a licensed real estate agent “disclose to a prospective purchaser all material facts of which the licensee is aware, which could adversely and significantly affect an ordinary purchaser’s use or enjoyment of the property, or any intended use of the property of which the licensee is aware.” According to NAR, this would include flooding or flood damage. Ghost hunters, however, will be disappointed to learn that Minnesota explicitly exempts sellers from disclosing if there was any “perceived paranormal activity” on the property. MISSISSIPPI — GRADE: A Boasting one of the most comprehensive mandatory flood disclosure laws alongside Louisiana, Oklahoma, and Texas, Mississippi requires sellers to detail, including dates and descriptions, of “damage to any portion of the physical structure resulting from fire, windstorm, hail, tornados, hurricane or any other natural disaster.” Additionally, the form asks for any “malfunction or defects” with windows or other infrastructure related to leaking. Flood plan hazard designations, including the FEMA map number must be disclosed, as well as current flood insurance and the price of the current premium. If the property has experienced standing water in the yard for more than 48 yards after a rain, that must also be disclosed. Sellers must also detail any water damage regardless of source or reason, as well as steps taken to remedy those issues. MISSOURI — GRADE: F There are no mandatory flood disclosures or required forms in Missouri. Though licensed real estate agents must “disclose to any customer all adverse material facts actually known or that should have been known by the licensee,” they also “owe no duty to conduct an independent inspection or discover any adverse material facts for the benefit of the customer.” In Keefhaver v. Kimbrell—a 2001 court case in which a buyer accused a seller of understating flood risk and basement leaks—the court ruled in favor of the buyer, even though she had only spent 30 minutes on the property before making an offer and waived her right to an inspection. The buyer was entitled to rely on the seller’s representations, the court ruled, due to their superior knowledge of facts that were “latent and…not easily ascertainable.” MONTANA — GRADE: F Though there are no mandatory forms or disclosures required of sellers, Montana state statute dictates that sellers must disclose “adverse material facts,” and defines those as “a fact that should be recognized by a broker or salesperson as being of enough significance as to affect a person’s decision to enter into a contract to buy or sell real property.” At the same time, a licensed real estate agent must “ascertain all pertinent facts concerning each property in any transaction…so that the licensee may fulfill the obligation to avoid error, exaggeration, misrepresentation or concealment of pertinent facts.” A 2015 court ruling in Rutterud v. Gilbraith stated that that a real estate agent could not be held liable for failing to investigate a mold problem caused by known flooding under that law. NEBRASKA — GRADE: C State law requires sellers to provide a written statement that “substantially” follows the format of a standard disclosure form, which includes whether the property is in a flood hazard zone, a “floodway,” or if there are any “flooding, drainage or grading problems.” The law also requires disclosure of “adverse material facts,” which NAR states would likely include other flood or natural disaster related issues. NEVADA — GRADE: C Nevada requires a mandatory disclosure form for sellers that includes “previous or current moisture conditions and/or water damage,” along with “drainage, flooding, water seepage or high-water table.” Sellers must also disclose floodplain designations, along with “earth stability” and other landslide or earthquake-related issues. NEW HAMPSHIRE — GRADE: F The “Live Free or Die” state unsurprisingly has minimal requirements for seller disclosures around flooding. Real estate agents must disclose “material physical, regulatory, mechanical or on-site environmental condition[s] affecting the subject property of which the licensee has actual knowledge,” but the law explicitly states that it “shall not create an affirmative obligation on the part of the licensee to investigate material defects.” Snierson v. Scruton, a 2000 court Supreme Court Case, ruled that a seller who used a voluntary disclosure form could still be held liable for fraud and negligent misrepresentation over septic tank leaching, even though that form “expressly warned that it did not constitute a warranty and was not a substitute for a buyer’s inspection.” The buyer still had to prove, however, that the seller demonstrated “conscious indifference to [the] truth with the intention to cause another to rely upon it.” NEW JERSEY — GRADE: F New Jersey’s code requires licensed real estate agents to provide a disclosure form that includes whether the property has flood or drainage problems or is located in a flood hazard. Agents are also specifically empowered to add or request more disclosures when appropriate, and are exempted from liability if they made a “reasonable and diligent inquiry” to discover if information given to them by a seller was false. There is no requirement that unlicensed sellers provide this disclosure. The 1974 court case Weintraub v. Krobatsch held a seller and their agent responsible for not disclosing a cockroach infestation, which the FEMA panel posited could also apply to non-disclosure of flooding. NEW MEXICO — GRADE: F New Mexico requires licensed agents and brokers to disclose “any adverse material facts actually known by the associate broker or qualifying broker about the property or the transaction,” but makes no mention of flood or disasters and has no mandatory forms. A 1984 court ruling in Gouveia v. Citicorp Person-to-Person Fin. Ctr., Inc. determined a broker could be held liable in a case where a property was listed as “All Top Shape” despite the fact that parts of the home had no foundation, could not be heated and had other major structural deficiencies. In this case, the broker had not even interacted directly with the buyer, but had simply provided a description of the property to an MLS. NEW YORK — GRADE: F New York’s mandatory flood disclosure law has an odd loophole: the penalty for not including the disclosure form is a paltry $500 credit due at closing. Both NAR and FEMA found that many attorneys have advised home sellers to simply pay this penalty rather than disclose potentially deal-sinking information about standing water on the property, historic flooding issues or floodplain designations. A bill currently stalled in the state legislature would repeal the $500 penalty system and add significant new flood disclosure requirements. Simply paying the penalty, however, does not exempt a seller or agent from being held liable for “active concealment of a defect,” according to the 2018 court case Pesce v. Leimsider, in which a seller allegedly concealed water damage during a sale and inspection. Another court case in 2005 (Gabberty v Pisarz) in which a seller withheld information about chronic basement flooding ruled that a buyer can be awarded damages when there is a “willful failure” to disclose these things. NORTH CAROLINA — GRADE: D North Carolina does have a mandatory disclosure form that asks narrowly if the property is “subject to a flood hazard or…located in a federally-designated flood hazard area.” It also asks about water seepage or standing water in the basement, but does not require any disclosures related to flood damage or historic flooding. NORTH DAKOTA — GRADE: C State statute in North Dakota requires significant disclosures around flooding, including whether it was ever damaged by a flood, has drainage issues or is in a flood zone. It also asks whether the property has been “damaged by fire, smoke, wind, floods, hail, snow, frozen pipes or broken water line…condensation or ice buildup,” and requires explanations for those issues. A 1985 court case (Holcomb v. Zinke) also explicitly exempted certain real estate transactions from the “buyer beware” doctrine of common law, ruling that “passive concealment” by a seller could constitute fraud. OHIO — GRADE: C A mandatory Ohio disclosure form asks if there are previous or current water leaks, rain gutter issues, water accumulation, moisture, or other material damage related to flooding or any other water intrusion. Fire or smoke damage is also included, and any mitigation or repairs over the last five years to address these things must also be divulged. It also requires disclosure of historic flooding, as well as if the property is in a designated floodplain or Lake Erie Coastal Erosion Zone. OKLAHOMA — GRADE: A Any seller who has occupied a property in Oklahoma must fill out a mandatory disclosure form and must disclose a variety of specific flood zone designations, flood insurance, historic flooding and interior leakage or drainage issues. They must also disclose “major fire, tornado, hail, earthquake or wind damage.” An additional stipulation requires licensed real estate agents to disclose property defects they know of that are not stated on the seller’s disclosure form, and they can be disciplined by the state if they fail to do so. OREGON — GRADE: C Oregon has a mandatory form that must be proactively delivered to each person that makes an offer on a property. That disclosure includes whether there has been “material damage to the property or any of the structure from fire, wind, floods, beach movements, earthquake, expansive soils or landslides.” There are also questions as to floodplain designation or “geologic hazard zone.” There is no requirement to disclose flood insurance mandates, though the form does advise buyers that any floodplain designation could result in the need for insurance. PENNSYLVANIA — GRADE: C A mandatory form in Pennsylvania asks sellers about leaky roofs, basement leakage or dampness or repairs to mitigate those issues. It also requires floodplain disclosure, as well as past or present flooding issues affecting the property generally. RHODE ISLAND — GRADE: D Rhode Island mandates certain disclosures without providing a form. Among the required information is the vague directive that sellers include “Basement (Seepage, Leaks, Cracks, etc.)” along with “Flood Plain (Flood Insurance)” and  “Fire,” without further defining what any of this means. Location of nearby wetlands, or if the property is on wetlands, must also be disclosed. . A 2003 court ruling in Stebbins v. Wells, involving undisclosed severe erosion on a coastal property, stated that sellers and their agents could be held liable for “passive concealment” in some circumstances and explicitly pushed back against the “buyer beware” doctrine. SOUTH CAROLINA — GRADE: C South Carolina’s mandatory disclosure form includes specific statutory language requiring sellers to report flood problems, flood hazards or designations, all FEMA claims and the dates they were filed, as well as current flood insurance. Fire, smoke or other water “problems” must be divulged as well. It also requires a real estate agent to disclose known “adverse facts” about the property even if the seller omitted them. South Carolina also explicitly allows waiving all these disclosure requirements as long as both parties agree to do so in writing. Certain time-sharing and vacation home plans are also exempt from disclosure. SOUTH DAKOTA — GRADE: C South Dakota has a mandatory disclosure form laid out in state statute that includes “water penetration” issues, standing water on the property, roof leaks and any water damage that was repaired or not repaired. Sellers must also disclose previous flood insurance claims made on the property. TENNESSEE — GRADE: B Tennessee offers a disclosure form that is technically not mandatory, but state statute warns that any real estate transaction must include all items and provisions laid out in that form. Those items and provisions include “flooding, drainage, or grading problems,” flood insurance requirements, and property damage from fire, earthquakes, floods or landslides, as well as if that damage has been repaired. Sellers must also disclose any recent surveys conducted of the property, which could include information about flooding or flood risk. TEXAS — GRADE: A A state that has seen more than its share of flooding and disasters, Texas’s disclosure laws require comprehensive declarations regarding flooding and other adverse natural events. Water damage, fire damage, flooding from a “controlled or emergency release” of a reservoir, or from natural flood event, and six specific floodplain designations must all be disclosed by law. Sellers must also divulge current flood insurance and past flood insurance claims. Additionally, the law explicitly allows a buyer to terminate a contract if the seller does not provide the mandatory disclosures when entering into a purchase agreement. UTAH — GRADE: F With no flood or mandatory disclosure rules, Utah only generally asks real estate agents to divulge “known material facts” regarding “a defect in the property.” A 2002 court case involving a real estate agent who was selling property owned by her husband found that the agent and her brokerage were liable for failing to disclose “chocolate pudding-like” mud that made the land untenable for development. VERMONT — GRADE: F There are no mandatory flood disclosure forms or requirements in Vermont. A state statute regarding “unprofessional conduct” by licensed real estate agents allows the state to discipline those who fail “to fully disclose…all material facts within the licensee’s knowledge concerning the property being sold.” A 1998 court case (Carter v. Gugliuzzi) held a seller’s brokerage responsible for failing to disclose regular dangerous wind on a property, even though the broker was only aware of this fact because he happened to live in the area. VIRGINIA — GRADE: F The FEMA panel excoriated Virginia’s flood disclosure laws as “the opposite of buyer friendly.” While the state does have a mandatory disclosure form, that form explicitly exonerates the seller from disclosing flood-related items and warns the buyer to “exercise whatever due diligence they deem necessary” to learn about flood risks, flooding or flood designations on the property. An update to the relevant statute scheduled to go into effect in 2022 will “make available” a flood information sheet to buyers that speaks generally about flooding and insurance requirements under federal law. In the 2015 court case Devine v. Buki, a seller was held liable for fraudulently lying about leaks and water damage in the foundation of a 200-year-old house, with a judge rescinding the sale and awarding the buyer $100,000 in attorney’s fees. WASHINGTON — GRADE: C Washington’s disclosure rules are applied differently to “improved” residential real estate—properties that have a structure or structures on them—and “unimproved” properties that do not. For both types of properties, sellers must disclose flooding events, material damage from “floods, beach movements, earthquake, expansive soils or landslides” and “shorelines, wetlands, floodplains or critical areas” on the property. “Improved” properties must also include basement flooding events, while “unimproved” properties must specifically disclose federal floodplain designations. WEST VIRGINIA — GRADE: F West Virginia does not even have a state law that generally governs real estate disclosures—though at least two have been introduced by the legislature since 1996. Thacker v. Tyree, a 1982 court case provided some precedent that “defects or conditions which substantially affect the value or habitability of the property” must be disclosed by a seller, and another court case (Darrisaw v. Old Colony Realty Co.) in 1997 applied that doctrine in part to a home with an undivulged “high water problem.” That ruling added that a misrepresentation like this must be proven a “substantial factor in inducing the purchaser to buy the property” in order to hold the seller liable. WISCONSIN — GRADE: D Wisconsin has two mandatory disclosure forms: one for vacant land containing no buildings, and one for property with dwelling units. The form dealing with inhabited structures only asks if the property is in a floodplain, wetland or shoreland zoning area, along with a specific question about basement defects which “may include items such as flooding.” The vacant land disclosure form includes the same floodplain disclosures, but additionally asks if the property has suffered “material damage from fire, wind, flood, earthquake, expansive soil, erosion or landslide,” or if there is “water diversion, water intrusion or other irritants emanating from neighboring property.” WYOMING —GRADE: F With no mandatory form or flood disclosures, licensed real estate agents must still disclose “adverse material facts actually known by the licensee” to buyers, including “material defects in the property and any environmental hazards.” In the 2006 court case Reed v. Cloninger the court stated that buyers could pursue legal claims against real estate agents “for misrepresenting the condition of the property, provided they knew or reasonably should have known of the defect.” Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas to The post Flood and Disaster Disclosures: Law, Precedent and Grades for All 50 States appeared first on RISMedia......»»

Category: realestateSource: rismediaSep 21st, 2021

Why FTX Account Holders Are Unlikely To Get Their Money Back 

Customers who trusted FTX’s platform are likely at the back of the queue for receiving whatever assets a bankruptcy judge can extract from the company. Roughly two weeks after the collapsed cryptocurrency exchange FTX filed for bankruptcy, its customers are losing hope they will ever see their money again. The latest blow to FTX account holders came on Tuesday at a bankruptcy hearing in U.S. federal court, when lawyers for FTX painted a grim picture of the Bahamas-based firm’s finances and disclosed that a “substantial amount of assets” from user accounts have either been stolen or are missing. They said FTX had faced cyber attacks on the day it filed for bankruptcy, referring to the hundreds of millions of dollars in FTX assets that were moved in unauthorized transactions. [time-brightcove not-tgx=”true”] FTX’s claim that it was hacked diminishes the likelihood that users will recover their money, legal and banking experts say. Without a clear understanding of how much cash FTX has left—and where it’s located—customers could be waiting years to recover their lost funds, and it’s possible none is returned. “I highly doubt users will get their money back,” says Darian Ibrahim, a professor at William & Mary Law School who specializes in securities law and cryptocurrencies. “They’re unsecured creditors like everyone else in a bankruptcy where there’s apparently an $8 billion shortfall. It’s a bizarre situation.” Court documents filed earlier this month show that the firm owes $102 million to customers and at least $3.1 billion to roughly 1 million creditors. Once the darling of the crypto world, FTX filed for bankruptcy in early November after a run on deposits caused a liquidity crisis. The firm’s collapse has sparked investigations by the Securities and Exchange Commission and the Justice Department in the U.S. and by authorities in the Bahamas. The inquiries largely center on whether FTX improperly moved customers’ assets to Alameda Research, a crypto hedge fund owned and run by FTX founder Sam Bankman-Fried, who resigned as CEO at the time of the bankruptcy filing. The Wall Street Journal reported that Bankman-Fried allegedly used $10 billion worth of FTX customer assets to fund risky bets at Alameda Research. “This company was run by inexperienced, unsophisticated and potentially personally compromised individuals,” said FTX’s own lawyer James Bromley, in a bankruptcy hearing on Nov. 22. “It is one of the most abrupt and difficult company collapses in the history of corporate America.” The cryptocurrency industry has faced a painful reckoning this year after seeing a surge in popularity during the pandemic. Crypto asset values were falling, even before FTX’s collapse which Ibrahim says is endemic of a “bad offshore bank” rather than a failure of the industry. The value of a single Bitcoin, for instance, has fallen precipitously, from roughly $68,000 a year ago to $17,000 now. But customers who trusted FTX’s platform are likely at the back of the queue for receiving whatever assets a bankruptcy judge can extract from the company. As the firm undergoes its bankruptcy proceedings, U.S. law allows the court to rearrange priorities based on equitable principles, meaning creditors will likely take first priority while investors in the company are second and account holders are last. Alan Rosenberg, a corporate bankruptcy attorney in Florida, says it’s “too early to tell” if customers will recover their funds, though a number of legal determinations in the coming months or years should make the outcome more clear. He says the first question that the courts will have to answer is what property the bankruptcy estate holds and whether FTX has “bare legal title” for the cryptocurrency traded on its platform, which would establish if FTX has any equity in those assets. The courts will also have to decide the different classes of creditors, which could include customers if a judge determines they are unsecured creditors. “What makes this worse is that Sam Bankman-Fried seems to suggest that the firm’s financial records are not reliable at all,” Rosenberg says. “That means it could be impossible to determine whose crypto was used, whose crypto was not used, and what’s remaining.” A litany of other legal issues could drag the case on for years, including avoidance litigation, fraudulent transfer litigation, preference litigation and insurance litigation, Rosenberg adds. “There appear to be assets,” he says, “but the question is: Who’s laying claim to them, what are the priority of those claims and what additional assets can be brought in through litigation?” Read More: The FTX Crash Will Have a Lasting Impact on the African Crypto Community The implosion of FTX has also put a spotlight on the unregulated world of cryptocurrencies, an industry that has intentionally operated outside traditional banking and finance rules. When a traditional U.S. bank fails, the government insures customer deposits, making them whole up to $250,000 via the Federal Deposit Insurance Corporation (FDIC). But, for now, no such mechanism exists for cryptocurrencies. “We have a growing asset class that’s largely unregulated at the global level,” says Eric Soufer, a partner at Tusk Strategies, where he leads the firm’s Crypto and FinTech practice group. “The FTX collapse raises calls for regulators to finally get into the game. We’ve had enough of the turf wars in Washington and finger pointing between the ultimate soup of agencies over who can do what and when.” An effective set of regulations would likely give investors more confidence to invest in the currency, crypto experts say, though policymakers in Washington are still struggling to make sense of the FTX implosion. Sen. Debbie Stabenow, a Democrat from Michigan, said FTX’s collapse “reinforces the urgent need for greater federal oversight of this industry” and continues to push a measure through Congress. Ibrahim, the securities law professor, has called on regulators to require that any digital asset come with both a whitepaper explaining how the native blockchain works and a “warning box” that discloses potentially harmful features of that asset, a protection that would have warned customers about FTX loaning client funds to Alameda. Of course, any movement on crypto regulation in the upcoming months won’t help to get FTX customers their funds back. The lack of good news is prompting some account holders to sign on to a class-action lawsuit filed last week against Bankman-Fried and the celebrities who endorsed FTX, such as Tom Brady and Stephen Curry, as another chance to recoup lost money. “If I’m trying to sue Tom Brady for my FTX losses, I might be saying he’s an underwriter and a securities offering,” Ibrahim says. “He’d be liable under the securities laws for that.”.....»»

Category: topSource: timeNov 25th, 2022

Judge rules against developer and in favor of L.A. on emergency eviction protections

A judge said L.A.'s emergency tenant protections promoted the "common good" and do not require that property owners be compensated for their losses.A judge said L.A.'s emergency tenant protections promoted the "common good" and do not require that property owners be compensated for their losses......»»

Category: topSource: latimesNov 24th, 2022

US Secret Service protection would follow Donald Trump to the slammer if he ever ended up there, former agents say

Former Secret Service officials are wondering exactly how agents would protect ex-President Donald Trump if he's ever sentenced to prison. Former President Donald Trump speaks to supporters during a rally on August 5, 2022 in Waukesha, Wisconsin.Scott Olson/Getty Images As Trump's legal problems mount, ex-Secret Service agents wonder who would protect him in prison.  Trump is running for president in 2024, and would likely retain a Secret Service detail if he's in state or federal custody.  The agents probably wouldn't share a cell with Trump, but they could be nearby.  Visit Insider's homepage for more stories. Former President Donald Trump would almost certainly have Secret Service agents charged with protecting him even if he winds up in prison, former agency officials told Insider. There's an important reason why these law enforcement veterans are saying this, too.Trump faces a tsunami of legal problems, with an FBI search of his Mar-a-Lago residence on August 8 providing yet another flashpoint in a summer full of them — most notably, the ongoing investigation of the US House's January 6 select committee.Trump, who announced a 2024 presidential run on November 15, could be mired in federal, state, and local investigations and lawsuits for years, and he lost his presidential immunity when he left office on January 20, 2021.Trump's legal troubles have spurred ex-Secret Service agents and former Obama administration officials to wonder how exactly agents would protect a president who's been convicted of a crime and serving prison time. "If Donald Trump gets sent to prison, what's the role of the Secret Service in that case?" said Douglas Smith, a former assistant secretary at the Department of Homeland Security during the Obama administration. Before Trump's presidency, "I don't think anybody ever contemplated having a president in jail and what impact that would have on the Secret Service," a former Secret Service official told Insider. The Secret Service has been in the headlines numerous times as it relates to Trump, with records revealing that nearly 900 agents contracted COVID-19 during the first year of the pandemic. Trump's critics accused him of flouting public health recommendations and putting agents at risk during his final year in office. More recently, the Secret Service itself has come under scrutiny for deleting agents' text messages that the January 6 select committee has requested.  Federal law entitles Trump and all other ex-presidents to Secret Service protections for life — although it didn't always. So unless Congress acts to change that, Trump or any other president who lands in jail would have some degree of security provided by the agency, former federal law enforcement officials and legal experts told Insider. What exactly that would look like is a topic that's gotten more attention as Trump's legal problems pile up, particularly given revelations about Trump's role ahead of and during the January 6, 2021, attack on the US Capitol that left five people dead. Trump isn't likely to face jail or prison cell anytime soon — or ever. More than 1 1/2 years after he left the White House, no federal, state, or local charges of any kind are publicly pending against the president, even as pressure on Trump is increasing. And even if Trump were charged with a crime, the chances are high he'd be processed and released on bond while awaiting trial. Only with a conviction would this become a live-wire question, albeit one that the people who have been charged with protecting past presidents say they're actively contemplating now."Is an agent going to be with him inside a cell? No," said the former Secret Service official, who guessed that Trump would wind up in a "country club-type place" if he's convicted. But there would likely be at least one agent on the property to protect the president, even if that person isn't "walking on his shoulder out in the yard." Such a job isn't likely to be a coveted assignment for any Secret Service agent, that person said, unless they're also studying to get their master's degree. "I would think you'd have a lot of time to do some reading." Secret Service officers could theoretically protect Trump within the confines of a prison, either physically near him or by maintaining a presence within a prison — in an administrative office, for example, said Michele Deitch, an expert on prison oversight at the University of Texas at Austin's LBJ School of Public Affairs.Former US presidents are entitled to Secret Service protection for life.James Devaney/GC Images'He would have a target on his back' Security experts don't expect Trump would be tossed into the fray with other prisoners. "He would certainly not be part of the general population," said Ken Gray, a retired FBI special agent who served 24 years in the bureau.The Federal Bureau of Prisons, which is part of the Department of Justice, and the Secret Service, which is part of the Department of Homeland Security, would almost certainly need to work together to coordinate Trump's protection, Gray said.Exactly where a federally convicted president would land would be at the discretion of a judge, with some input from the Bureau of Prisons, another former Secret Service agent told Insider. The Otisville security camp outside of New York City is an example of where some high-profile convicts ask to serve their time. It made a Forbes list of "America's 10 Cushiest Prisons" in 2009. The famous Ponzi schemer Bernie Madoff asked to be sent there, but he was assigned by the Bureau of Prisons to North Carolina instead. Michael Cohen started serving his 3-year prison sentence at Otisville too, but the former Trump lawyer got released to home confinement last spring due to concerns about the coronavirus.   A bit closer to Trump's Mar-a-Lago Club, there's a minimum-security federal prison camp in Pensacola, Florida. That prison also made Forbes' list of the cushiest locales. If Trump went to prison for a state crime, his placement would be determined by the state in which he was convicted, several experts said. New York, where Trump faces investigations into his business practices and taxes, and Georgia, where Trump pressured Secretary of State Brad Raffensperger to overturn the state's presidential election results, are two states in which Trump faces the most immediate legal peril.Trump could conceivably serve time in a minimum-security facility and would be kept separate from other prisoners, said the former agent. "You could almost put him in a separate little hut." But other legal experts expect that authorities would choose to house an imprisoned Trump in a much more secure facility, both for his own protection and the protection of the prison.Of particular concern would be Trump's "martyr status" among some of his most loyal — and potentially dangerous — supporters who might act on grand notions of attacking a prison and freeing Trump, said Mike Lawlor, a criminal justice professor at the University of New Haven and a former undersecretary for criminal justice policy and planning for the state of Connecticut.Tons of advance planning would go into Trump's security before he entered any sort of prison, according to law enforcement experts. Keeping an ex-president safe while in jail would be a major concern, and it's not something that security officials have had to plan for before. "Geez, the fact that we're thinking about him going to jail kind of scares me," said the former Secret Service official. "It's just awful to even think about." Prisons are, in general, very secure places, but authorities would find it uniquely challenging to keep someone of Trump's stature safe, said Deitch, who's also served as a court-appointed monitor on prison conditions. "Trump — he would have a target on his back," said Deitch.Trump would unquestionably be placed in what's known as "protective custody," an extremely secure — and extremely restrictive — situation that "doesn't look a whole lot different from a solitary confinement setting," she added. "It's not a setting you would wish on your worst enemy."President Richard Nixon declined Secret Service protection after he resigned from office.Bettmann/Getty ImagesCongress could strip Trump's securityEx-government officials have landed in prisons in the past, although none have been as high profile as a US president. President Richard Nixon's critics hoped to see him behind bars following the Watergate scandal, but his successor Gerald Ford issued Nixon a blanket pardon a month after Nixon's resignation in 1974. Before leaving office, Trump pardoned some of his former associates who were convicted as part of the FBI's probe into Russian interference in the 2016 presidential election. During the George W. Bush administration, then-Deputy Interior Secretary James Steven Griles was sentenced to prison time for obstructing a US Senate investigation into corruption allegations surrounding the lobbyist Jack Abramoff. He served in a low-security federal correctional institution in Petersburg, Virginia. Then-President Bush's 19-year-old twin daughters, Jenna and Barbara, were ticketed for alcohol violations in Texas during Bush's first year in office. Jenna Bush could have faced jail time for trying to use a false ID to purchase alcohol, The Washington Post reported in 2001, but she was instead ordered to get counseling and perform community service. While former presidents are entitled to Secret Service protection, they can opt to decline it — just as Nixon did after leaving office. Experts think Trump would want to keep the extra level of protection if he's indeed sentenced to any kind of prison time. Congress could also act to strip protections for former presidents. They did so under the Clinton administration, when a law was passed that would afford ex-presidents 10 years of Secret Service security, rather than lifetime protections. That law was changed back during the Obama administration to give former presidents and their wives lifetime protection. As for what Trump's legal future holds, experts say it's anyone's guess. "This," Gray said, "is uncharted territory."This article was originally published on March 12, 2021, and since updated to reflect new developments.Read the original article on Business Insider.....»»

Category: personnelSource: nytNov 15th, 2022

Teach The Constitution: Democrat Attorney Who Halted Hochul’s Quarantine Camp Regulation

Teach The Constitution: Democrat Attorney Who Halted Hochul’s Quarantine Camp Regulation Authored by Jan Jekielek and Masooma Haq via The Epoch Times (emphasis ours), Attorney Bobbie Anne Cox in New York on Nov. 5, 2022. (Justin Chiu/The Epoch Times) In what she has called a David versus Goliath battle, New York real estate lawyer Bobbie Anne Cox sued Governor Kathleen Hochul for issuing directives mandating quarantine for people exposed to or infected with highly contagious diseases such as COVID-19. The directives, dubbed “quarantine camp regulations,” have been compared to laws that relocated Japanese during World War II without due process. Cox won the lawsuit on the grounds that Hochul’s regulation was unconstitutional. In a recent interview on Epoch TV’s American Thought Leaders, Cox told host Jan Jekielek that it’s crucial Americans learn about the U.S. Constitution so that they can prevent similar acts by state and federal governments. “The constitution is not perfect, but it’s brilliant,” Cox said. Schools should require learning about the U.S. Constitution, “from the little kids all the way up through high school, into college. The constitution was written to keep the government in check. The constitution wasn’t written to keep the people in check.” Our founding fathers came to this continent fleeing tyranny, Cox said. “They wrote the constitution in such a manner that if it’s followed, there wouldn’t be tyranny on these shores, ever. Yet, here we are, 250 years later, and we’re fighting tyranny.” It is tyrannical for a government to take power to which it is not entitled, Cox explained. During the pandemic, state and federal governments gave themselves powers the constitution did not give them. State governors are part of the executive branch of government. As such, she said, “they’re supposed to enforce laws, and their agencies beneath them are supposed to help them enforce laws. They’re not supposed to make laws.” When a governor such as Hochul takes on powers that properly belong to the legislature, “that’s tyranny,” Cox reiterated. “The attitude is kind of like, ‘Well, we know we can’t do this, but we’re going to do it anyway.’ And then the theory is, ‘Catch me if you can.’” Incumbent New York governor Kathy Hochul participates in a debate against Republican candidate for governor Lee Zeldin, at Pace University, in New York, on Oct. 25, 2022. (Mary Altaffer/Pool via AP) Understanding Our Rights Unconstitutional mandates and regulations have been thrust upon the public, Cox said, because American citizens don’t know their rights. “I think if people understood what their rights are, they would say, ‘Hold on a second, you can’t do that.” “In the history of mankind, no government has ever taken power from the people, and then just voluntarily given it back.” Nonetheless, “the people have to demand it back,” Cox said. “The people won’t demand it back unless they know that they have the right to that power. So I think there needs to be an education process in the United States so that people understand, ‘Oh, these are my rights.'” The Executive Branch Cannot Legislate At the beginning of the pandemic lockdowns, former Governor Andrew Cuomo was given emergency powers by the New York legislature to implement “directives.” Those emergency powers, according to Cox, essentially gave him legislative powers. “The legislative branch can’t delegate their lawmaking power to another branch of government, but they did, and for a whole year, Cuomo had this power … He then passed it on to his commissioner of health,” said Cox. After Cuomo stepped down in August 2021 and Hochul became interim governor, she continued the regulations despite criticism that she was sidestepping the legislature. When Cox learned about this, she was impelled to sue in order to stop the government overreach. Andrew Cuomo, then New York Governor, speaks during a news conference in New York, on May 10, 2021. (Mary Altaffer-Pool/Getty Images) Quarantine Regulation Based on Rejected Bill Cox sees this type of control by the governor as tyrannical and “wholly unconstitutional” for many reasons, including the fact that the New York legislature rejected the quarantine rule in a bill years before. “It’s the story of a tyrannical governor and her department of health, doing something that they want to do, but the people don’t want them to do it. And the people’s representatives in the New York state senate and the assembly don’t want them to do it.” The quarantine camp regulation was based on a bill that was proposed in 2015 by New York state assemblyman Nick Perry (D-Brooklyn) during the Ebola outbreak. The regulation was rejected by the state legislature and withdrawn from consideration, said Cox. After Cuomo resigned, through a simple vote, Hochul and her advisors issued the directive that ultimately gave the governor and the New York Department of Health the power to lock up anyone they deemed contagious. “They could have locked you up in your home, or they could have removed you from your home and locked you into a facility of their choosing,” said Cox. There was no restriction on age, proof of sickness or exposure, or time limit to the quarantine. “There was nothing in the regulation that would allow you to try to negotiate your way out of this,” added Cox, and the regulation does not follow either state or U.S. constitutions because it does not lay out the rights of the person forced into quarantine. “In the judge’s decision, he actually said [that] this regulation gives lip service to due process,” said Cox. “‘You mention it, but you don’t actually have any due process built in there.'” “Involuntary detention is a severe deprivation of individual liberty, far more egregious than other health safety measures, such as requiring mask wearing at certain venues,” the court’s opinion read. “Involuntary quarantine may have far-reaching consequences such as loss of income [or employment] and isolation from family.” The governor’s regulation also conflicted with section 2120 of New York’s public health law, a longstanding regulation. “That tells you how you quarantine somebody if they’re a public health threat,” Cox said. However, the existing law contains multiple due process protections, beginning with a requirement to prove that the individual in question has the disease. People walk in Brooklyn, with lower Manhattan looming in the background, on March 28, 2020. (Photo by Spencer Platt/Getty Images) From Real Estate to Constitutional Law Having worked with clients in property cases against local and state governments, Cox recognized that the government’s mandates were illegal. She said she knew that two weeks of lockdown would not end there. “I also said to myself, this is completely unconstitutional. He can’t do this. He can’t force people to shut their businesses and stay home,” Cox said. She immediately started speaking out about the illegitimacy of the lockdowns. She was bombarded by business owners and landlords asking her if the forced closures and rent moratorium were legal, and what they could do to fight back. “We were seeing small businesses, landlords, people who were just getting decimated by the government.” Cox started a YouTube channel explaining the rights that the Constitution ensures, but the platform removed her videos. She then moved the channel to Rumble. Before moving forward with her lawsuit against Hochul, Cox wrestled with the decision to put her business and livelihood on hold. She took the case, convinced that the type of governmental overreach it hoped to stop would spread like “cancer” if not checked. Getting Ahead of Hochul’s Regulation Cox did not want to wait until the regulation went into effect and the public was injured by it, so she thought creatively about how to sue and prove the regulation was unconstitutional, she said. Cox considers herself a Democrat but worked with Republican lawmakers because she believes government overreach is not a partisan issue. “I’m actually a Democrat … In my mind, this is not a political thing. This is a human rights issue. This is a constitutional issue … This is about being an American, and something people have really forgotten. It’s not people’s fault. I think it’s because we just really don’t teach this in school anymore.” She asked Senator George Borrello, Assemblyman Chris Tague, and Assemblyman Mike Lawler to join the suit. “They said, ‘Absolutely. We believe in this; we’re going to do it.’” Ultimately, Cox proved the unconstitutionality of the quarantine camp regulation, but there were many challenges along the way. Read more here... Tyler Durden Tue, 11/15/2022 - 14:25.....»»

Category: worldSource: nytNov 15th, 2022

Donald Trump and his siblings can"t be sued by niece Mary Trump over inheritance money, judge rules

Mary Trump alleged the former president and his siblings maneuvered to swindle her out of her rightful share of the family real-estate company. Former President Donald Trump.Mandel Ngan/AFP/Getty Images A judge tossed Mary Trump's lawsuit against her uncle Donald Trump and two of his siblings. She alleged they swindled her out of rightful inheritance money. The ruling was based on a settlement she signed in 2001 barred her from suing. A New York judge ruled against Mary Trump in a lawsuit she brought against her uncle, former President Donald Trump, alleging she was swindled out of millions of dollars in inheritance money.Mary Trump's lawsuit, filed in September 2020, alleged the ex-president and his siblings Maryanne Trump Barry and Robert Trump (who died in August 2020) maneuvered to limit her rightful inheritance from the family business of family patriarch Fred C. Trump, who died in 1999.In a Monday decision, the judge overseeing the case ruled that she was barred from suing due to the terms of a settlement she entered in 2001. The settlement granted her millions of dollars in cash in exchange for her interest in various Trump properties — though Mary Trump said the sum was based on her aunt and uncles' fraudulent misrepresentations of the property values.Nonetheless, New York Supreme Court Justice Robert R. Reed ruled, Mary Trump could not overcome the strict language of the settlement agreement."Plaintiff's claims for fraudulent misrepresentation, fraudulent concealment, fraudulent inducement, negligent misrepresentation, civil conspiracy, breach of fiduciary duty, and aiding and abetting a breach of fiduciary duty all fall within the broad scope of the releases," Reed wrote.Roberta Kaplan, an attorney representing Mary Trump, said she would appeal the case."Yesterday's decision is both incorrect and disappointing," Kaplan said in a statement. "Given the age of the defendants, not to mention the fact that one of them intends to announce today that he is running again for President, we intend to seek an expedited appeal."The ruling is the second major legal victory this week ahead of former president Donald Trump's expected announcement Tuesday that he would seek the presidency a third time.Also on Monday evening, a federal judge dismissed a lawsuit Michael Cohen brought against Trump and the Justice Department over his treatment in prison while he worked on a book critical of his former boss. Alina Habba, an attorney representing Trump in the case, described Cohen's lawsuit as based on falsehoods."The Court saw through Cohen's frivolous lawsuit, which was legally deficient and, more importantly, based upon inflammatory allegations that are simply not true," Habba said in a statement. President Donald J. Trump will continue to fight for the truth and against innumerable falsehoods being perpetrated by his enemies."Neither Cohen nor his lawyer immediately provided a comment. Donald Trump has separately filed a lawsuit against Mary Trump and the New York Times, over the publication of his tax returns obtained through his niece, which remains pending.A representative for the former president didn't immediately respond to a request for comment on the litigation relating to Mary Trump.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 15th, 2022

Welltower Reports Third Quarter 2022 Results

TOLEDO, Ohio, Nov. 7, 2022 /PRNewswire/ -- Welltower Inc. (NYSE:WELL) today announced results for the quarter ended September 30, 2022. Recent Highlights Reported net loss attributable to common stockholders of $0.01 per diluted share Reported normalized FFO attributable to common stockholders of $0.84 per diluted share Reported normalized FFO growth attributable to common stockholders per diluted share of 5.0% over the prior year, and 6.2% on a constant currency basis excluding Provider Relief Funds Reported total portfolio year-over-year same store NOI ("SSNOI") growth of 7.2%, driven by SSNOI growth in our Seniors Housing Operating ("SHO") portfolio of 17.6% SHO portfolio year-over-year same store revenue increased 10.8% in the third quarter, driven by 390 basis points of year-over-year average occupancy growth and REVPOR growth of 5.3%. Same store REVPOR growth in the third quarter reached the highest level in our recorded history and is expected to accelerate further in the fourth quarter Completed $1.1 billion of pro rata gross investments during the third quarter including $850 million in acquisitions and loan funding and $203 million in development funding. Transactions during the period were funded, in part, through the issuance of Operating Partnership Units ("OP Units") Reduced variable rate debt by $817 million subsequent to quarter end; line of credit is fully available with $4.0 billion of capacity as of November 7, 2022 MSCI ESG rating upgraded to 'AAA' from 'AA' and received the GRESB Green Star designation due to strong governance practices and continued stakeholder engagement to reduce our environmental impact COVID-19 Update During the period, we recognized $2 million of Provider Relief Funds, as compared to guidance of approximately $7 million. As a result, third quarter 2022 net income attributable to common stockholders and normalized FFO was reduced by approximately $0.01 per diluted share relative to guidance. Our share of property-level expenses associated with the COVID-19 pandemic relating to our SHO portfolio totaled $7 million. Net of reimbursements including Provider Relief Funds and similar programs in the U.K. and Canada, our share of property-level expenses associated with the COVID-19 pandemic relating to our SHO portfolio totaled a benefit of approximately $0.3 million and $6.5 million for the three months and nine months ended September 30, 2022, respectively, as compared to a benefit of approximately $0.4 million and $24 million for the three months and nine months ended September 30, 2021, respectively. Such amounts had a favorable impact on net income attributable to common stockholders and normalized FFO per diluted share of less than $0.01 and $0.01 for the three months and nine months ended September 30, 2022, respectively, and a favorable impact of less than $0.01 and $0.05 per diluted share for the three months and nine months ended September 30, 2021, respectively. Capital Activity and Liquidity Inclusive of available borrowings under our line of credit, cash and cash equivalents, and restricted cash, as of September 30, 2022, we had $3.8 billion of near-term available liquidity and no material senior unsecured note maturities until 2024. During the three months ended September 30, 2022, we settled 9.1 million shares of common stock that were sold under our ATM program via forward sale agreements, resulting in $842 million of gross proceeds. Subsequent to quarter end, we reduced variable rate debt by $817 million, inclusive of borrowings under the line of credit as well as secured debt assumed and subsequently paid off post-quarter end. In addition, following the expiration of the our previous share repurchase program, the Board of Directors has authorized a share repurchase program whereby we may repurchase up to $3 billion of common stock. Under this authorization, we are not required to purchase shares, but may choose to do so in the open market or through private transactions at times and amounts based on our evaluation of market conditions and other factors. Investment and Disposition Activity In the third quarter, we completed $1.1 billion of pro rata gross investments including $850 million in acquisitions and loan funding, as well as $203 million in development funding. Transactions during this period were funded, in part, through the issuance of OP Units. We opened four development projects for an aggregate pro rata investment amount of $79 million. Additionally, during the quarter we completed pro rata property dispositions and loan payoffs of $8 million. Notable Investment Activity Completed During the Quarter Oakmont Management Group In July, we continued to expand our relationship with Oakmont through the acquisition of three newly-constructed rental communities and three stable entrance fee communities in high barrier-to-entry California markets for an aggregate purchase price of $312 million. The portfolio will be managed by Oakmont under a RIDEA 3.0 management contract. StoryPoint Senior Living As previously announced, we entered into an agreement to expand our relationship with StoryPoint Senior Living, a preeminent senior living operator based in Brighton, Michigan, through the acquisition of 33 communities throughout Michigan, Ohio and Tennessee under an aligned RIDEA 3.0 contract. During July, we closed on the second and third tranches through the acquisition of 23 communities located in Ohio and Michigan for a purchase price of $292 million. During October, we closed on an additional tranche of five properties in Ohio for a purchase price of $113 million. To date, we have acquired 30 properties with StoryPoint during 2022 for a pro rata purchase price of $470 million. Kisco Senior Living During the third quarter, we expanded our relationship with Kisco through the acquisition of a 187-unit seniors housing property in the San Francisco MSA for a pro rata purchase price of $114 million. Outpatient Medical Acquisitions During the quarter, we acquired a medical office building in La Jolla, California for $57 million. The property has approximately 99,000 rentable square feet and is currently 89% leased. Additionally, we acquired a medical office building in Towson, Maryland for $15 million. The property has approximately 54,000 rentable square feet and is fully leased. Other Transactions Additionally, during the third quarter, we disposed of one long-term post acute property for proceeds of $3 million.  Dividend On November 7, 2022, the Board of Directors declared a cash dividend for the quarter ended September 30, 2022 of $0.61 per share. This dividend, which will be paid on November 30, 2022 to stockholders of record as of November 18, 2022, will be our 206th consecutive quarterly cash dividend. The declaration and payment of future quarterly dividends remains subject to review and approval by the Board of Directors. Outlook for Fourth Quarter 2022 The degree to which the COVID-19 pandemic continues to impact our operations and those of our operators and tenants, including the variability in the timing of recovery, is dependent on a variety of factors and remains highly uncertain. Accordingly, we are only introducing earnings guidance for the quarter ended December 31, 2022 and expect to report net income attributable to common stockholders in a range of $0.08 to $0.13 per diluted share and normalized FFO attributable to common stockholders in a range of $0.80 to $0.85 per diluted share. In preparing our guidance, we have made the following assumptions: Same Store NOI: We expect average blended SSNOI growth of 8.5% to 10.5%, which is comprised of the following components: Seniors Housing Operating approximately 18.5% to 23.5% Seniors Housing Triple-net approximately 5% to 6% Outpatient Medical approximately 1.5% to 2.5% Health System approximately 2.75% Long-Term/Post-Acute Care approximately 2.5% to 3.5% Provider Relief Funds: Our fourth quarter guidance does not include the recognition of any Provider Relief Funds which may be received during the quarter. Impact of Interest Rates and Foreign Exchange Rates: Increased interest rates on floating rate debt and a strengthening U.S. Dollar relative to the British Pound and Canadian Dollar are expected to reduce fourth quarter 2022 normalized FFO attributable to common stockholders by approximately $0.03 per diluted share versus the third quarter 2022 and $0.06 per diluted share versus the fourth quarter 2021. General and Administrative Expenses: We anticipate fourth quarter general and administrative expenses to be approximately $34 million to $36 million and stock-based compensation expense to be approximately $6 million. Investments: Our earnings guidance includes only those acquisitions closed or announced to date. Furthermore, no transitions or restructures beyond those announced to date are included. Development: We anticipate funding approximately $263 million of development through the remainder of 2022 relating to projects underway on September 30, 2022. Dispositions: We expect pro rata disposition proceeds of $580 million at a blended yield of 4.6% in the next twelve months. This includes approximately $466 million of expected proceeds from property sales and $114 million of expected proceeds from loan repayments. Our guidance does not include any additional investments, dispositions or capital transactions beyond those we have announced, nor any other expenses, impairments, unanticipated additions to the loan loss reserve or other additional normalizing items. Please see the Supplemental Reporting Measures section for further discussion and our definition of normalized FFO and SSNOI and Exhibit 3 for a reconciliation of the outlook for net income available to common stockholders to normalized FFO attributable to common stockholders. We will provide additional detail regarding our fourth quarter outlook and assumptions on the third quarter 2022 conference call. Conference Call Information We have scheduled a conference call on Tuesday, November 8, 2022 at 9:00 a.m. Eastern Time to discuss our third quarter 2022 results, industry trends and portfolio performance. Telephone access will be available by dialing (888) 340-5024 or (646) 960-0135 (international). For those unable to listen to the call live, a taped rebroadcast will be available beginning two hours after completion of the call through November 15, 2022. To access the rebroadcast, dial (800) 770-2030 or (647) 362-9199 (international). The conference ID number is 8230248. To participate in the webcast, log on to 15 minutes before the call to download the necessary software. Replays will be available for 90 days. Supplemental Reporting Measures We believe that net income and net income attributable to common stockholders ("NICS"), as defined by U.S. generally accepted accounting principles ("U.S. GAAP"), are the most appropriate earnings measurements. However, we consider funds from operations ("FFO"), normalized FFO, NOI, SSNOI, REVPOR and SS REVPOR to be useful supplemental measures of our operating performance. These supplemental measures are disclosed on our pro rata ownership basis. Pro rata amounts are derived by reducing consolidated amounts for minority partners' noncontrolling ownership interests and adding our minority ownership share of unconsolidated amounts. We do not control unconsolidated investments. While we consider pro rata disclosures useful, they may not accurately depict the legal and economic implications of our joint venture arrangements and should be used with caution. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO attributable to common stockholders, as defined by NAREIT, means net income attributable to common stockholders, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairments of depreciable assets, plus real estate depreciation and amortization, and after adjustments for unconsolidated entities and noncontrolling interests. Normalized FFO attributable to common stockholders represents FFO attributable to common stockholders adjusted for certain items detailed in Exhibit 2. We believe that normalized FFO attributable to common stockholders is a useful supplemental measure of operating performance because investors and equity analysts may use this measure to compare the operating performance of the Company between periods or as compared to other REITs or other companies on a consistent basis without having to account for differences caused by unanticipated and/or incalculable items. In addition, we believe that presentation of constant currency normalized FFO exclusive of Provider Relief Funds provides enhanced comparability for investor evaluations of period-over-period results. We define NOI as total revenues, including tenant reimbursements, less property operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees paid to operators, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations or transaction costs. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. SSNOI is used to evaluate the operating performance of our properties using a consistent population which controls for changes in the composition of our portfolio. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the relevant year-over-year reporting periods. Acquisitions and development conversions are included in the same store amounts five full quarters after acquisition or being placed into service. Land parcels, loans and sub-leases, as well as any properties sold or classified as held for sale during the period, are excluded from the same store amounts. Redeveloped properties (including major refurbishments of a Seniors Housing Operating property where 20% or more of units are simultaneously taken out of commission for 30 days or more or Outpatient Medical properties undergoing a change in intended use) are excluded from the same store amounts until five full quarters post completion of the redevelopment. Properties undergoing operator transitions and/or segment transitions are also excluded from the same store amounts until five full quarters post completion of the operator transition or segment transition. In addition, properties significantly impacted by force majeure, acts of God or other extraordinary adverse events are excluded from same store amounts until five full quarters after the properties are placed back into service. SSNOI excludes non-cash NOI and includes adjustments to present consistent property ownership percentages and to translate Canadian properties and UK properties using a consistent exchange rate. Normalizers include adjustments that in management's opinion are appropriate in considering SSNOI, a supplemental, non-GAAP performance measure. None of these adjustments, which may increase or decrease SSNOI, are reflected in our financial statements prepared in accordance with U.S. GAAP. Significant normalizers (defined as any that individually exceed 0.50% of SSNOI growth per property type) are separately disclosed and explained. We believe NOI and SSNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSNOI to make decisions about resource allocations and to assess the property level performance of our properties. No reconciliation of the forecasted range for SSNOI on a combined basis or by property type is included in this release because we are unable to quantify certain amounts that would be required to be included in the comparable GAAP financial measure without unreasonable efforts, and we believe such reconciliation would imply a degree of precision that could be confusing or misleading to investors. REVPOR represents the average revenues generated per occupied room per month at our Seniors Housing Operating properties. It is calculated as our pro rata version of total resident fees and services revenues from the income statement divided by average monthly occupied room days. SS REVPOR is used to evaluate the REVPOR performance of our properties under a consistent population which eliminates changes in the composition of our portfolio. It is based on the same pool of properties used for SSNOI and includes any revenue normalizations used for SSNOI. We use REVPOR and SS REVPOR to evaluate the revenue-generating capacity and profit potential of our Seniors Housing Operating portfolio independent of fluctuating occupancy rates. They are also used in comparison against industry and competitor statistics, if known, to evaluate the quality of our Seniors Housing Operating portfolio. Our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and ratings agencies in the valuation, comparison, rating and investment recommendations of companies. Our management uses these financial measures to facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, the supplemental reporting measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see the exhibits for reconciliations of supplemental reporting measures and the supplemental information package for the quarter ended September 30, 2022, which is available on the Company's website (, for information and reconciliations of additional supplemental reporting measures. About Welltower Welltower Inc. (NYSE:WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people's wellness and overall health care experience. Welltower™, a real estate investment trust ("REIT"), owns interests in properties concentrated in major, high-growth markets in the United States, Canada and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. More information is available at We routinely post important information on our website at in the "Investors" section, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included on our website under the heading "Investors". Accordingly, investors should monitor such portion of our website in addition to following our press releases, public conference calls and filings with the Securities and Exchange Commission. The information on our website is not incorporated by reference in this press release, and our web address is included as an inactive textual reference only. Forward-Looking Statements and Risk Factors This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "pro forma," "estimate" or similar expressions that do not relate solely to historical matters, Welltower is making forward-looking statements. Forward-looking statements, including statements related to Funds From Operations guidance, are not guarantees of future performance and involve risks and uncertainties that may cause Welltower's actual results to differ materially from Welltower's expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to: the impact of the COVID-19 pandemic; uncertainty regarding the implementation and impact of the CARES Act and future stimulus or other COVID-19 relief legislation; the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators'/tenants' difficulty in cost effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and seniors housing industries; negative developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and repay loans; Welltower's ability to transition or sell properties with profitable results; the failure to make new investments or acquisitions as and when anticipated; natural disasters and other acts of God affecting Welltower's properties; Welltower's ability to re-lease space at similar rates as vacancies occur; Welltower's ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future investments or acquisitions; environmental laws affecting Welltower's properties; changes in rules or practices governing Welltower's financial reporting; the movement of U.S. and foreign currency exchange rates; Welltower's ability to maintain its qualification as a REIT; key management personnel recruitment and retention; and other risks described in Welltower's reports filed from time to time with the SEC. Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements. Welltower Inc.  Financial Exhibits Consolidated Balance Sheets (unaudited) (in thousands) September 30, 2022 2021 Assets Real estate investments: Land and land improvements $                      4,156,985 $                      3,698,858 Buildings and improvements 33,018,251 29,775,951 Acquired lease intangibles 1,920,803 1,653,415 Real property held for sale, net of accumulated depreciation 175,657 251,152 Construction in progress 1,012,202 562,487 Less accumulated depreciation and intangible amortization (7,687,077) (6,634,061) Net real property owned 32,596,821 29,307,802 Right of use assets, net 323,230 526,614 Real estate loans receivable, net of credit allowance 916,639 1,115,645 Net real estate investments 33,836,690 30,950,061 Other assets: Investments in unconsolidated entities 1,383,246 977,955 Goodwill 68,321 68,321 Cash and cash equivalents 343,446 303,982 Restricted cash 81,738 58,663 Straight-line rent receivable 430,173 346,159 Receivables and other assets 1,270,874 774,884 Total other assets 3,577,798 2,529,964 Total assets $                    37,414,488 $                    33,480,025 Liabilities and equity Liabilities: Unsecured credit facility and commercial paper $                         654,715 $                         290,996 Senior unsecured notes 12,324,601 11,116,067 Secured debt 2,121,628 2,262,345 Lease liabilities 410,415 544,547 Accrued expenses and other liabilities 1,445,479 1,093,959 Total liabilities 16,956,838 15,307,914 Redeemable noncontrolling interests 400,965 389,195 Equity: Common stock 473,930 436,640 Capital in excess of par value 25,289,432 22,148,859 Treasury stock (111,772) (108,478) Cumulative net income 8,808,678 8,605,064 Cumulative dividends (15,215,694) (14,115,705) Accumulated other comprehensive income (75,267) (103,177) Total Welltower Inc. stockholders' equity 19,169,307 16,863,203 Noncontrolling interests 887,378 919,713 Total equity 20,056,685 17,782,916 Total liabilities and equity $                    37,414,488.....»»

Category: earningsSource: benzingaNov 7th, 2022

Layoffs, tight deadlines, and working around the clock: Inside Elon Musk"s new culture at Twitter

Speaking with Insider, a Twitter employee said Elon Musk made the company "psychologically unsafe" ahead of mass layoffs. Hi, welcome back to Insider Weekly, a roundup of some of our top stories. I'm Matt Turner, the editor in chief of business at Insider.On the agenda today:Inside the culture war that Elon Musk has unleashed at Twitter.China is dragging down its own economy — and it could take the rest of the world with it.A small group of Goldman Sachs employees are about to get the call of a lifetime.Gen Z is refusing to put up with the toxic work culture that boomers created.But first: Daylight-saving time ended today — and clocks fell back an hour. But some doctors say it's time to abolish the practice once and for all. Below, our health correspondent Hilary Brueck takes us inside the debate.If this was forwarded to you, sign up here.  Download Insider's app here.The case against daylight-saving timeA tourist photographs the sunrise in Lisbon, Portugal, ranked as the top city in the world for remote workers.Marco Bottigelli/Getty ImagesIt's the November tradition everybody loves to hate, Insider's Hilary Brueck writes. Today, we're turning back the clocks, putting an end to daylight-saving time for the year. Evenings will get darker earlier, reminding us winter's almost here. Senators on both sides of the political aisle want to do away with this annual switch back to standard time — and make daylight-saving time permanent in the spring. Sleep experts, however, say that's the wrong way to go about ending clock switching. It turns out that standard time is great for our bodies. By losing a little light in the evening, we're gaining sunshine in the morning, properly aligning our devices with our biological clocks. Why doctors are ready to ditch daylight-saving time — for good.Now, on to this week's top stories.The conflict between Twitter's old guard and new ownerPatrick Pleul/Getty Images; Vicky Leta/InsiderLate Thursday, Elon Musk began his much-anticipated mass layoffs at Twitter. Staff flocked to social media to share the news that they'd been let go — including an eight-month-pregnant staffer who said she was locked out of her company laptop. The layoffs are part of a new culture that Musk has unleashed at the company.Speaking with Insider, one employee said that up until all the "drama" around the sale, "there was a staff hierarchy, to be sure, but the culture was quite democratic," with an emphasis on "genuine transparency." But now, this person said, the company's new workaholic culture is "psychologically unsafe" and has "Elon's stamp all over it."Go inside the culture war at Twitter.China is blowing up its own economyJu Peng/Xinhua via Getty Images; iStock; Rebecca Zisser/InsiderChina, as we knew it, is no more, Insider's Linette Lopez writes. And the new one is more dangerous than we've ever seen. The country with a fast-growing economy is gone, leaving behind a nation with withering wealth and an increasingly authoritarian government controlled by President Xi Jinping.China is witnessing a teetering property sector and an aging population, but these aren't just local threats — they could have significant ramifications for the rest of the world.How China could bring down the entire global economy.Wall Street's most exclusive club is about to get more members Michael Kovac/Getty ImagesGoldman Sachs is gearing up to invite a select group of employees to become partners. If you're one of the lucky few who get the phone call, you can look forward to a slew of perks, including a salary of about $1 million, a share of a special bonus pool, and access to fee-free investment funds.What happens when you're made a Goldman partner.Gen Z's had enoughMarianne Ayala/InsiderContrary to what the internet says, Gen Z workers aren't lazy, entitled, or looking to slack off — they're simply choosing to reject some of the practices that previous generations were forced to accept. Surveys have found that Gen Zers are less likely than their elders to go along with long hours, overbearing bosses, or a lack of boundaries between the personal and the professional. Put simply, they want something better than previous generations had and aren't afraid to seek it out.How Gen Z is shaping the workplace.This week's quote:"When I talk to these same patients after height-lengthening surgery, they feel like they're on the same playing field with everyone else. They're happier, they have a lot more confidence, and they feel like they're able to conquer a lot more than before."Shahab Mahboubian, an orthopedic surgeon who specializes in limb-lengthening surgeries. Read his story here.More of this week's top reads:Facebook has more of your contact information than you realize.Casey DeSantis is the secret force behind her husband's political rise.The real culprit behind the country's housing-affordability crisis.Some Northerners who flocked to the South are ready to pack up and leave.An Airbnb host shared the 10 tools that help him bring in $475,000 in revenue each month.Women in venture capital are writing the rules of maternity leave.Insider found the secret location of Kanye West's Donda Academy.Plus: Keep updated with the latest business news throughout your weekdays by checking out The Refresh from Insider, a dynamic audio news brief from the Insider newsroom. Listen here tomorrow.Curated by Matt Turner. Edited by Jordan Parker Erb, Hallam Bullock, and Lisa Ryan. Sign up for more Insider newsletters here.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 6th, 2022

Trump insisted on having a special master in the Mar-a-Lago case, but that call is increasingly backfiring

Trump pushed for weeks for a special master to review the documents seized from Mar-a-Lago, but the official has continued to erode his legal case. A court sketch of Judge Raymond Dearie in September 2022, at a hearing unrelated to the Trump case.Reuters The special master reviewing Mar-a-Lago docs again criticized Trump's arguments Tuesday. Judge Raymond Dearie accused Trump's lawyers of making contradictory claims. Trump pushed for Dearie to be appointed, but it's a decision that visibly backfired.  Former President Donald Trump pushed hard to have a so-called "special master" appointed in his legal fight over the documents seized by the FBI from Mar-a-Lago.But as the case continues, that decision is looking more and more like a mistake after the official — Judge Raymond Dearie — took repeated swipes that undermined Trump's case. The latest move came this week, when Dearie in a conference call needled Trump for offering a threadbare argument that some of the documents taken were covered by legal privilege and should be returned.Trump's supporters initially hailed Dearie's appointment as a major win that would add months of delay to the Department of Justice investigation into Trump's handling of the Mar-a-Lago documents.The reality has been different: in court appearances Dearie has undermined the legal arguments Trump's lawyers have put forward, and embarrassed them with challenges to justify some of Trump's bombast.On Tuesday, he expressed frustration at the lack of evidence Trump's lawyers presented provided for why some of the documents should be considered privileged, which would prevent the DOJ from scrutinizing them. "It's a little perplexing as I go through the log," Dearie said of the lack of facts offered by Trump's legal team, per The New York Times. "What's the expression? 'Where's the beef?' I need some beef."He later criticized an apparent contradiction in their argument, saying that there were claiming both that the records were private — and by definition not government property — and that they were covered by executive privilege, which only applies to government records. "There's a certain incongruity there," Dearie said. "Perhaps plaintiff's counsel will address that in a submission."The DOJ believes that Trump may have broken the law in retaining thousands of government documents, including classified information, after leaving office. Trump has rejected the claims, arguing without evidence that the FBI planted evidence, and also that he is allowed to keep the documents because he declassified them.His lawyers have focussed on the narrower claim that the documents are shielded under privilege rules. In earlier hearings, Dearie has pushed Trump's lawyers to provide evidence to back the claims Trump's made in public.Dearie in September questioned why they hadn't produced evidence in support of his claim he declassified documents before leaving office.In reply Trump's legal team shied away from answering, saying that presenting the evidence could imperil his defense in a potential trial.Dearie also pushed them to back the claim evidence was planted, but none was forthcoming.It highlighted the discrepancy between the claims Trump has made to his supporters in attacking the investigation, and those his lawyers are prepared to defend in court, where knowingly making false claims can incur legal penalties. Aileen Cannon, the main judge in the Mar-a-Lago case overruled Dearie when he pushed Trump's lawyers to provide the evidence by a specific deadline, shielding them from a further pitfall.But as Dearie continues to complicate life for Trump's lawyers, it is hard to see what they have gained from insisting that he be part of the high-stakes case.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 19th, 2022

Futures Fumble 1% Gain, Turn Sharply Lower As Yields, Dollar Soar

Futures Fumble 1% Gain, Turn Sharply Lower As Yields, Dollar Soar US stock futures erased overnight gains  of over 1% as worries about the impact of scorching inflation and a looming recession took the shine off a strong start to the corporate earnings season. Contracts on the S&P 500 dropped 0.4% in an extremely illiquid session at 7:15 a.m. in New York after earlier rising as much as 1.1%. Nasdaq 100 futures were also down 0.4%, despite a boost from a better-than-expected report from Netflix which sent the stock soaring 13% in premarket trading. Behind the sudden, violent slump is today's renewed surge in interest rates which pushed the 10Y Yield to 4.10%, the highest level since October 2008, potentially driven by news that the BOE would launch gilt sales on Nov 1. A surge in the dollar sparked by a plunge in sterling, which tumbled after soaring food prices drove UK inflation back into double digits in September, matching a 40-year high of 10.1% and intensifying pressure on the central bank and Liz Truss’s government to act. Gilts were broadly lower weighing on rates sensitive sectors like banks, property and construction and retail. The result is that UK equities dropped following four days of gains. In premarket trading, Netflix soared as much as 14% in premarket trading, set for its biggest jump since January 2021, after the video streaming company handily beat estimates for paid subscribers, signaling the worst of the slowdown is likely over. Shares of other video-streaming companies are rising after Netflix’s quarterly results reassured investors that its business was back on track. Walt Disney +2.8%, Roku +3.7%, Warner Bros Discovery +1.7%, fuboTV +3.4%.  Bank stocks are lower in thin premarket trading Wednesday, putting them on track to snap a two-day winning streak. In corporate news, Mitsubishi UFJ Financial Group is evaluating an acquisition of some loan portfolios from Credit Suisse to expand its business in the US. HSBC has been reprimanded by a UK watchdog for violating environmental advertising rules, after it sought to depict itself as a green bank in a set of posters. Here are other notable premarket movers: United Airlines shares jump 7.1% in US premarket trading Wednesday following earnings that beat estimates, with analysts saying results and outlook are impressive on strong demand, better costs. Here’s what they are saying: Lam Research leads fellow chip-tool makers higher in premarket trading after ASML said its fourth-quarter sales would likely be better than estimates, driven by strong demand for its advanced chip-making machines. Lam Research (LRCX US) +3.1%, Applied Materials (AMAT US) +1.7% and KLA (KLAC US) +2% Olaplex shares plummet 42% in premarket trading after the hair-care products company slashed full-year forecasts due to slowing sales and announced the departure of its COO Tiffany Walden. Evercore ISI cuts Best Buy, Lowe’s, Advance Auto and Petco Health & Wellness to in-line from outperform in note on Wednesday. All the stocks drop in premarket trading. Best Buy (BBY US) falls 1.6%, Lowe’s (LOW US) -1.1%, Advance Auto (AAP US) -1.1%, Petco (WOOF US) -3.2% Keep an eye on Polaris as the stock was cut to neutral from buy at Citi as the broker flags retail environment being “substantially worse than previously anticipated” after it made checks with the company’s off-road vehicle dealers. Intuitive Surgical shares jumped 7.4% in postmarket trading on Tuesday after the company posted revenues and adjusted earnings per share for the third quarter that were higher than consensus analyst estimates. Upbeat company results, cheaper valuations and UK policy reversals have helped buoy risk appetite in recent sessions. At the same time, investors are having to keep track of weakness in the global economy and the impact of persistent inflation on decisions by policymakers at the Federal Reserve and other central banks. Indeed, US stocks have had a roller-coaster October so far as investors swing between fears about a hawkish Federal Reserve and optimism over early third-quarter reports that have showed signs of resilience to higher prices. While a Bank of America survey showed full capitulation among stock investors, strategists have warned that the uncertain macroeconomic outlook could fuel further declines, according to Bloomberg. “While it looks like capitulation, we probably have not seen a bottom yet,” said Randeep Somel, a portfolio manager at M&G Investments. “Companies’ earnings are not reflecting wider macro economic expectations yet, and that isn’t likely to dissipate until around early next year once we got through what is likely to be a rough winter,” he said on Bloomberg TV. Quantitative strategists at Citigroup Inc. said US stocks were pricing in the highest odds of a recession than any other asset class, but still could be poised for more losses. “US equities have priced the most (but not enough) recession risk, and earnings estimates have further to adjust,” strategists including Alex Saunders wrote in a note dated Oct. 18 (he must be ignoring commodities, which are pricing in a global depression). “US equities have priced the most (but not enough) recession risk, and earnings estimates have further to adjust,” strategists including Alex Saunders wrote in a note. “US bonds have priced the least risk, but it will take some time before bonds react to recession risks given the hawkish Fed.” European stocks struggled to eke out a fifth day of gains as most sectors decline; real estate, retail and utilities drop, while tech and insurance outperform. Euro Stoxx 50 rises 0.2%, paring earlier gains; Stoxx 600 is down 0.2%. IBEX lags, dropping 1%. Utilities stocks fell, led by German names, after Handelsblatt reported that the German Economy Ministry is planning to cap electricity prices along the lines of the proposals made to cap gas prices. The sector is among the worst-performing groups on the broader gauge, down 1.1%, with Encavis, RWE and BKW all down at least 4.5%. In Germany’s plan, utilities will have to offer relief for consumers on a base contingent designed to encourage energy saving, according to the report   Earlier in the session, Asia stocks fell, with shares in Hong Kong dropping the most in the region as the maiden policy speech by the territory’s leader failed to ease concerns about China’s earnings outlook and rising mainland Covid cases. The MSCI Asia Pacific lost as much as 0.8%, erasing an earlier gain, as shares of technology companies such as Alibaba, Tencent and TSMC weighed.  A selloff in consumer stocks dragged down Hong Kong and China gauges as a plan unveiled by Chief Executive John Lee to woo back foreign talent and ease housing woes failed to offset concerns about earnings and Covid. Benchmarks in Japan and Australia rose in tandem with gains in Wall Street. Read: HK Developers Drop as Stamp Duty Rule Disappoints: Street Wrap Most Asia fund managers in a survey by Bank of America expect weaker corporate profits in the region during the next 12 months, with net 72% of the view that consensus estimates for earnings per share growth are too high.  It’s been almost a year since Bitcoin hit a record. Where do you see it going from here? Fill out our survey. “Global growth expectations are shrouded in pessimism but improving on the margin for China,” the survey report said. “However, investors are wary that the continued pursuit of a zero-Covid strategy could pour cold water on their fledgling hope for a China recovery.” China’s intermittent lockdowns continue to weigh on sentiment, with the ongoing party congress in China offering little hope to investors and traders assessing the impact on corporate profits in the latest results season. The MSCI Asia gauge is trading near April 2020 levels after dropping more than 28% this year Japanese stocks extended their advance to second day, driven by gains in information companies and machinery makers. The Topix rose 0.2% to 1,905.06 as of 3 p.m. close in Tokyo, while the Nikkei 225 advanced 0.4% to 27,257.38. SoftBank Group contributed the most to the Topix’s gain, increasing 3.7%. Out of 2,166 stocks in the index, 1,376 rose and 674 fell, while 116 were unchanged. Australian stocks edged higher, with the S&P/ASX 200 index rising 0.3% to close at 6,800.10 as investors digested quarterly output reports from commodity producers. All sectors gained except for energy and technology. Banks and industrials contributed the most to the gauge’s advance. In New Zealand, the S&P/NZX 50 index rose 0.6% to 10,916.65. Indian stocks indexes rose for the fourth straight session before giving away the majority of gains, dragged by the rupee’s slide against the dollar. The S&P BSE Sensex rose 0.3% to 59,107.19 in Mumbai, while the NSE Nifty 50 Index advanced 0.1%. The gauges rose as much as 0.7% before paring the advance in the last hour of trading. For the week, they are up about 2% each. The Indian rupee tumbled to a record, declining to 82.98 against the greenback in late trading, as the central bank was seen moving away from supplying dollars. The looming expiry of weekly derivative contracts also weighed on local shares. Ten of the 19 sector sub-gauges compiled by BSE Ltd. advanced today, led by energy companies, while utilities and power firms were the worst performers. “Domestic institutions have been strong buyers in the market over the last week, as 2QFY23 results have come in line or stronger than expected,” S Hariharan, head of institutional equity at Emkay Global Financial, said. In FX, the Bloomberg dollar spot index spiked 0.3% as the greenback rose against all of its Group-of-10 peers apart from the New Zealand dollar; the yen tumbled to a fresh 32 year low of 149.70 against the dollar while the pound slumped below $1.13. The euro slumped to almost $0.98. The shift in the euro’s volatility term structure shows that traders are following central banks into being more data dependent than before. Australian and New Zealand dollars trim intraday gains alongside similar moves in US futures. In Japan, authorities continued their jawboning of the yen, with Finance Minister Shunichi Suzuki saying he is increasing the frequency of monitoring foreign-exchange markets. The currency hovered above 149 per dollar. The 10-year government bond yield rose above the 0.25% upper limit of the central bank’s target range, a breach that’s likely to prompt the Bank of Japan to step up bond purchases to limit the advance. “The outlook for the UK is very, very difficult and certainly when focusing on our asset allocation it’s predominantly in the US where we have much higher conviction and certainty of outcome,” Grace Peters, JPMorgan Private Bank’s head of investment strategy, said on Bloomberg Television. In rates, Treasuries were cheaper across the curve with losses led by belly, cheapening 2s5s30s spread by 3bp into early US session. US yields cheaper by nearly 7bp across belly of the curve, flattening 5s30s spread by almost 3bp following three successive steepening sessions; 10-year around 4.09%, cheaper by ~8bp on the day. US coupon issuance resumes with $12b 20-year bond reopening; WI yield near 4.34% is above all auction stops since the May 2020 reintroduction of the tenor and ~52bp cheaper than September auction, which stopped through by 1.3bp Front-end bund yields rose by 12bps as the curve bear- flattened after Germany’s Finance Agency said it will increase the amount of securities it can lend to traders in the repo market by €54b, a move strategists say will help ease a collateral squeeze that has plagued the debt market in recent months. Bunds underperform gilts and USTs. German 10-year yield is up 7 bps to 2.35%, while gilts 10-year yield is up 3bps to below 4% and Treasuries 10-year yield climbs ~5bps to above 4%. Most UK bonds fell, while the pound dropped as much as 0.6% after data showed UK CPI rose 10.1% last month from 9.9% in August, exceeding economists expectations of 10% and adding to pressure on policy makers to lift the key rate significantly next month. The bank of England also confirmed that it will start selling down its portfolio of gilts. In commodities, oil rose amid concerns that the European Union’s latest sanctions on Russian fuel could exacerbate the market tightness that the US is trying to alleviate with additional sales. The Biden administration will announce Wednesday a plan to release 15 million barrels from US emergency oil reserves in an effort to ease high gasoline prices. WTI and Brent Dec futures are firmer intraday after yesterday’s decline, which saw Brent dip under USD 90/bbl but settle at the figure. LME metals are mostly softer amid the firmer Dollar and risk aversion, with 3M copper extending its losses under USD 7,500/t. US President Biden will lay out plans on Wednesday to continue using the SPR to gain more stability in gas prices and will reiterate that gasoline company profits are too high and should be returned to consumers, according to a senior administration official. Furthermore, the Biden administration agreed to make future oil purchases to refill reserves at prices at or below USD 67.00-72.00/bbl, while President Biden will announce 15mln additional barrels for delivery from SPR in December, extending the initial timeline and completing the 180mln commitment. Spot gold trades lower intraday and back under the USD 1,650/oz mark as the Dollar picks up in pace. Japan plans to further loosen crypto rules as soon as December "by making it easier to list virtual coins, potentially boosting the country’s allure for Binance and rival exchanges", according to Bloomberg. Looking to the day ahead now, data releases include the UK and Canadian CPI readings for September, along with US housing starts and building permits for September. From central banks, the Fed will release their Beige book, and we’ll also hear from the Fed’s Kashkari, Evans and Bullard, the ECB’s Centeno and Visco, and the BoE’s Cunliffe and Mann. Finally, earnings releases include Tesla, Procter & Gamble and Abbott Laboratories. Market Snapshot S&P 500 futures down 0.2% to 3,726.50 STOXX Europe 600 down 0.4% to 398.38 MXAP down 0.8% to 137.80 MXAPJ down 1.1% to 445.81 Nikkei up 0.4% to 27,257.38 Topix up 0.2% to 1,905.06 Hang Seng Index down 2.4% to 16,511.28 Shanghai Composite down 1.2% to 3,044.38 Sensex up 0.2% to 59,077.34 Australia S&P/ASX 200 up 0.3% to 6,800.06 Kospi down 0.6% to 2,237.44 German 10Y yield up 3% to 2.354 Euro down 0.3% to $0.9826 Brent Futures up 0.6% to 90.59 Gold spot down 0.7% to $1,640.03 U.S. Dollar Index up 0.25% to 112.42 Top Overnight News from Bloomberg Embattled UK Prime Minister Liz Truss faces a brewing parliamentary rebellion if she is forced to abandon a key Conservative manifesto commitment on pensions as part of a frantic austerity drive Record-low demand for German bonds at a government auction suggests investors are getting picky as countries ready a wall of sales and speculation mounts that the ECB will start reducing the bonds it’s amassed on its balance sheet over the years Bank of Japan Board Member Seiji Adachi reinforced the central bank’s message that it won’t adjust policy in response to the rapid weakening of the yen, pushing back against persistent market speculation The value of US Treasuries owned by Japanese investors slid by almost 3% in August to the lowest level in three years as a slump in global debt markets hammered down prices A number of hedge funds are starting to come around to the idea that it may be time to buy the beaten-up pound and gilts. Others say investors should remain cautious. Great Hill Capital in New York sees opportunities to go long sterling after the currency’s recent wild ride. Blue Edge Advisors Pte sees positives in longer- maturity gilts as global growth slows A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mixed following the choppy performance stateside where the major indices wobbled on news that Apple cut iPhone 14 Plus production less than two weeks after its debut, but then recovered heading into the close and with futures underpinned after-hours after strong earnings and subscriber additions from Netflix. ASX 200 gained with outperformance in defensive sectors although the upside was contained by a lacklustre mood in miners after BHP’s quarterly output update which included higher iron output but also a severe drop in coal production. Nikkei 225 was led higher by notable strength in blue-chip names including SoftBank and Fast Retailing and with firm gains also in utilities and power stocks, while the latest commentary from BoJ board member Adachi echoed the central bank’s dovish message as he warned against a shift towards tightening and pushed back on responding to short-term FX moves with monetary policy. Hang Seng and Shanghai Comp. remained pressured amid COVID concerns and data uncertainty, while Hong Kong Chief Executive John Lee’s first annual Policy Address failed to inspire a turnaround despite the announcement of measures to support property, tech start-ups and attract foreign talent. Top Asian News Hong Kong Chief Executive John Lee said in his first annual Policy Address that national sovereignty and security are top priorities, while he also noted Hong Kong faces a “new chapter” of development and warned Hong Kong faces risks from global turmoil and Covid. Lee added that they will allow overseas talent to refund extra stamp duty on home purchases and will introduce a bill this year to exempt the stamp duty payable for transactions conducted by dual-counter market makers. Lee also stated the HKEX will revise main board listing rules next year to facilitate fundraising of advanced tech enterprises that have yet to meet the profit and trading record requirements, according to Reuters. BoJ's Adachi said monetary policy does not directly control FX and there are times FX moves rapidly short-term, while he added that responding to short-term FX moves with monetary policy would heighten uncertainty over BoJ's guidance which is not good for the economy. Adachi also stated that inflation is starting to increase but he is not convinced yet that the BoJ's target will be achieved in a stable and sustained manner. Furthermore, he said they must be cautious about shifting toward monetary tightening as downside risks to the economy are increasing and a shift to monetary tightening would weaken demand and heighten the risk Japan will revert to deflation, while the best approach now is to maintain easy monetary policy. Coal Miner Left With Retiring Plants in Indonesia Green Push Taiwan Central Bank Sees Severe Economic Challenges Next Year Billionaire Ambani Splurges $163 Million on Priciest Dubai Villa Singapore’s COE Category B Bidding Rises to S$110,000 Equities in Europe trade mostly lower after initially opening modestly firmer across the board. Sectors overall are now mostly lower (vs a mixed open) with no overarching theme, with Tech, Banks, Media, and Insurance towards the top of the bunch whilst Real Estate, Utilities, Retail, and Basic Resources sit as the laggards. US equity futures are off best levels with the RTY lagging peers and the NQ slightly more cushioned following Netflix earnings. Click here and here for the Daily European Equity and Additional Opening News, which includes earnings from ASML & Nestle among others. Netflix Inc (NFLX) - Q3 2022 (USD): EPS 3.10 (exp. 2.13), Revenue 7.93bln (exp. 7.84bln). Q3 Net subscriber additions 2.41mln (exp. 1.07mln). Sees Q4 EPS USD 0.36 (exp. 1.20). Sees Q4 revenue USD 7.78bln (exp. 7.98bln). Sees Q4 streaming paid net change +4.5mln (exp. +3.9mln). Won't provide paid membership forecasts from Q4. (PR Newswire) Shares rose 14.3% after-market, +13.8% in the pre-market Top European News Daily Mail's Hodges understands UK PM Truss has been informed by Graham Brady the traditional threshold of letters for a leadership challenge has been breached. But he is insisting on a threshold of half the parliamentary party before acting. UK Tory rebels were reported to have asked opposition Labour Party MPs to help them oust UK PM Truss as Tory backbenchers grow increasingly frustrated with the PMs leadership, according to The Telegraph. Pensions could increase in line with earnings instead of inflation next year after UK PM Truss went back on her commitment to the pension triple lock, according to The Telegraph. UK Chancellor Hunt met with Chairman of the 1922 Committee Brady on Tuesday afternoon which prompted further questions about the future of UK PM Truss, according to Sky News. UK Chancellor is lining up taxes on energy companies and banks to fill a GBP 40bln UK fiscal hole, according to FT. Germany is planning an electricity price cap along the lines of a gas cap, according to Handelsblatt; German Economy Ministry Draft: cabinet should discuss power and gas price breaks on November 18th, via Reuters. FX Franc flounders as Dollar rebounds alongside bear-steepening in US Treasuries, USD/CHF probes parity as DXY tops 112.500. Sterling deflated irrespective of firmer than forecast UK inflation data on broader economic, fiscal and political concerns; Cable tests support around 1.1250 from a 1.1350+ peak. Euro fades against Greenback and edges closer to 0.9800, Yen slips further through 149.00 in the ongoing absence of actual Japanese intervention and the Loonie treads cautiously between 1.3700-1.3800 parameters into Canadian CPI. Antipodes fare better vs their US peer post-NZ inflation and pre-Aussie jobs as NZD/USD hovers near 0.5700 and AUD/USD just above 0.6300. Japanese PM Kishida says no comment on FX; need to take appropriate action against excess FX volatility. Japan's Finance Minister Suzuki says there is no change to the thinking on FX, in frequent communication with the MOF. Fixed Income Gilts dented post-CPI which topped 10%, though clawed back losses to mid-97.00; before further pressure on political updates and ahead of a later DMO outing. Bunds and USTs under pressure in sympathy, with Bunds tacking the laggard mantel in wake the German FinMin increasing the size of outstanding bonds; yield above 2.30% Stateside, USTs are moving in tandem with peers though magnitudes a touch more contained ahead of 20yr supply and Fed speak; curve mixed, overall. German Finance Ministry says increased the size of 18 outstanding bonds by EUR 3bln each (total of EUR 54bln), via Reuters; increase will provide flexibility to cover financing needs during the energy crisis. Commodities WTI and Brent Dec futures are firmer intraday after yesterday’s decline, which saw Brent dip under USD 90/bbl but settle at the figure. Spot gold trades lower intraday and back under the USD 1,650/oz mark as the Dollar picks up in pace. LME metals are mostly softer amid the firmer Dollar and risk aversion, with 3M copper extending its losses under USD 7,500/t. US Private Energy Inventory (bbls): Crude -1.3mln (exp. +1.4mln), Gasoline -2.2mln (exp. -1.1mln), Distillates -1.1mln (exp. -2.2mln), Cushing +0.9mln. US President Biden will lay out plans on Wednesday to continue using the SPR to gain more stability in gas prices and will reiterate that gasoline company profits are too high and should be returned to consumers, according to a senior administration official. Furthermore, the Biden administration agreed to make future oil purchases to refill reserves at prices at or below USD 67.00-72.00/bbl, while President Biden will announce 15mln additional barrels for delivery from SPR in December, extending the initial timeline and completing the 180mln commitment. Geopolitics Russia says it is preparing to evacuate civilians from Kherson which comes as Ukrainian troops push closer to the city as part of a successful counter-offensive, according to AFP News Agency Europe is planning to sanction a number of Iranian individuals and entities regarding arms sales to Russia, according to Politico citing diplomats/officials; adding, a list of sanctions has been prepared, aim is to be in agreement before Thursday/Friday US, Britain and France plan to raise Iran's arms transfers to Russia during closed-door UN security council meeting Wednesday, according to Reuters citing diplomats. North Korea said it fired artillery shells on Tuesday to send a warning against South Korea's military drills and it called on its 'enemies' to immediately stop causing military tensions, according to KCNA. US Event Calendar 07:00: Oct. MBA Mortgage Applications -4.5%, prior -2.0% 08:30: Sept. Building Permits, est. 1.53m, prior 1.52m, revised 1.54m Building Permits MoM, est. -0.8%, prior -10.0%, revised -8.5% 08:30: Sept. Housing Starts, est. 1.46m, prior 1.58m Housing Starts MoM, est. -7.2%, prior 12.2% 14:00: U.S. Federal Reserve Releases Beige Book DB's Jim Reid concludes the overnight wrap Our wayward but lovely dog Brontë doesn't get so much of a mention these days but I have to say that she was taken to the Vet yesterday and although she got a clean bill of health the report back from my wife shocked me. She's 8 in a couple of months and the Vet said we will soon have to move her to geriatric food portions. When my wife told me it actually made me quite upset. Firstly because it seems like only yesterday she was a puppy (maybe because she still acts like one), and secondly in dog years she's not much older than me. If anyone tries to put me on geriatric food portions soon they'll be trouble! There's been a bit of feast and famine in markets over the last 24 hours, with both equities and bond yields seeing sizeable intra-day swings without obvious catalysts. The S&P 500 fell from an intraday high of +2.31% just after the open to close “only” close +1.15% higher but was then buoyed after the bell by Netflix who reported that subscriber growth topped estimates, leading to $3.10 EPS versus $2.12 expectations. Their equity jumped in after-hours trading, ultimately settling around +14% higher, reversing the -1.73% decline in normal trading. This has helped S&P 500 and the Nasdaq 100 futures be +0.79% and +1.19% higher this morning as we go to print. Prior to this, equities generally had a positive day yesterday in spite of the volatility, with the S&P 500 posting a broad-based advance that saw more than 89% of the index move higher on the day, whilst Europe’s STOXX 600 (+0.34%) advanced for a 4th day running. Megacap tech stocks had lagged behind ahead of the Netflix report, with the FANG+ index just (+0.24%) after dipping into the red late in the New York afternoon. Netflix itself was one of the biggest decliners in the S&P and the biggest decliner in the FANG+ at -1.73% before their earnings. The after-hours Netflix news followed a number of other releases, including Goldman Sachs (+2.33%) where trading revenue of $6.2bn beat estimates, alongside Johnson & Johnson (-0.35%) who cut their sales forecast for the year. Today’s highlights include Tesla who’ll be reporting after the close. In fixed income the ranges were large even if closing levels weren't much different. 10yr Treasury yields saw an intraday surge of more than +10bps around the time of the US open, before closing essentially unchanged. In Asia, US 10yr yields are +1.5bps higher, trading just above 4%. Meanwhile in Europe, yields on 10yr bunds (+1.4bps), OATs (+0.8bps) and BTPs (+3.2bps) moved slightly higher but bunds traded it a 13.5bps range. One thing possibly helping risk was the fact that global energy prices moved decisively lower yesterday, which also saw inflation breakevens decline across the big economies. Brent crude (-1.74%) fell back beneath $90/bbl intraday for the first time in a couple of weeks before closing at $90.03, which followed a Bloomberg report that there’d be another 10-15m barrels of oil released from the Strategic Petroleum Reserve. Even more strikingly, European natural gas futures (-12.37%) fell to a 4-month low of €113 per megawatt-hour, which comes as the long-range forecasts have suggested that we won’t be seeing the worst-case scenario of a cold winter in Europe, which in turn will reduce demand for heating. That’s a big boost to Europe on multiple levels, as lower prices mean that any measures to subsidise gas prices wouldn’t be as expensive as feared, whilst lower demand would reduce the risk of energy rationing or blackouts. In terms of data, this is a big week for US housing and we got another glimpse yesterday of the continuing impact of rate hikes as mortgage rates have hit their highest level in over two decades. The US National Association of Home Builders’ market index fell to 38 in October (vs. 43 expected). That’s its lowest level in a decade with the exception of the pandemic months of April and May 2020, and continues its run of having fallen in every single month this year. Here in the UK, the political situation remained incredibly volatile following the mini-budget U-turn, with constant press briefings about when Prime Minister Truss might be removed from office. The opinion polling remains dire for the government, with a YouGov poll yesterday showing that Truss had a net favourability rating of -70, which for reference is well beneath the -53 score for Prime Minister Johnson at the time of his resignation in early July. Strikingly, even if you just looked at those who voted Conservative at the last election, her net favourability was still at -51, with ratings that are deeply negative among every category of voters. We should hear from Truss in the House of Commons later for Prime Minister’s Question Time, so one that plenty of observers will be watching. When it came to markets, the biggest story was an explicit pushback from the Bank of England on the FT’s report that the BoE were set to postpone the start of QT on October 31. We’d mentioned the report in yesterday’s edition, which saw equity futures move higher when it came out, but a BoE spokesperson said in the European morning that it was “inaccurate”. Gilt yields moved higher immediately afterwards, but by the close they’d moved lower, with the 10yr gilt yield down -2.2bps on the day. After Europe went home the BoE announced that QT/Gilt sales will commence from November 1st. So the earlier FT story proved to be inaccurate. In the meantime however, sterling returned to being the worst-performing G10 currency again, closing down -0.33% against the US Dollar. This morning, sterling (+0.11%) is rebounding a little, trading at $1.1331 as I type. Keep an eye out for the latest UK CPI print shortly after we go to press as well, which is the last one ahead of the BoE’s next meeting a fortnight tomorrow. Our UK economist sees that returning to double-digits with a +10.0% reading, and he doesn’t expect it to fall out of double-digits until March 2023. Asian equity markets are a little more mixed overnight. As I type, the Nikkei (+0.73%) and the Kospi (+0.18%) are trading in positive territory while the Hang Seng (-1.08%) is trading lower in early trade. Mainland Chinese stocks are also down with the CSI (-0.86%) and the Shanghai Composite (-0.51%) both in the red amid a lack of positive surprises from the 20th party congress. Early this morning, the Bank of Japan (BOJ) Governor Haruhiko Kuroda in his speech to the parliamentary committee stated that the recent depreciation in the Japanese yen was sharp and one-sided and doesn’t bode well for the nation’s economy as it makes difficult for businesses to plan ahead. In terms of yesterday’s other data, US industrial production came in on the upside with a +0.4% advance in September (vs. +0.1% expected), whilst the previous month’s contraction was also revised to a shallower -0.1% (vs. -0.2% previously). Separately in Germany, the ZEW survey’s current situation reading fell more than expected to -72.2 in October (vs. -68.5 expected), which is its lowest level since August 2020. However, the expectations component unexpectedly rose to -59.2 (vs. -66.5 expected), ending a run of 3 consecutive monthly declines. To the day ahead now, and data releases include the UK and Canadian CPI readings for September, along with US housing starts and building permits for September. From central banks, the Fed will release their Beige book, and we’ll also hear from the Fed’s Kashkari, Evans and Bullard, the ECB’s Centeno and Visco, and the BoE’s Cunliffe and Mann. Finally, earnings releases include Tesla, Procter & Gamble and Abbott Laboratories. Tyler Durden Wed, 10/19/2022 - 08:08.....»»

Category: dealsSource: nytOct 19th, 2022

DOJ asks appeals court to toss out a federal judge"s ruling appointing a special master in the Mar-a-Lago records case

The DOJ said US District Judge Aileen Cannon, a Trump appointee, "erred in requiring the government to submit any" Mar-a-Lago records "for the special-master review." Former President Donald Trump speaks at CPAC in Dallas, Tex., on August 6, 2022.Brandon Bell/Getty Images The DOJ asked a federal appeals court to reverse a ruling appoint a special master in the Mar-a-Lago case. Prosecutors said a lower court judge "erred in requiring the government to submit" to a special master review of seized records. "The court should now reverse the order in its entirety for multiple independent reasons," prosecutors said. The Justice Department on Friday asked a federal appeals court to end an independent arbiter's review of documents seized from Donald Trump's home and private club in South Florida, arguing that a judge should not have appointed a so-called special master as the former president confronts an investigation into his handling of sensitive national security information.In a 53-page brief, filed with the US Court of Appeals for the 11th Circuit, the Justice Department challenged a decision last month by Judge Aileen Cannon that blocked federal investigators from reviewing the thousands of records and appointed an outside arbiter to sift through the materials to determine if any are potentially covered by attorney-client or executive privilege.Former President Donald Trump's legal team requested the appointment of a special master after the FBI executed a search warrant at Mar-a-Lago, his home and private club in West Palm Beach. Cannon, a Trump appointee confirmed to the federal bench in 2020, granted the former president's request last month.But the DOJ quickly appealed the ruling and asked the 11th Circuit to issue a partial stay allowing the government to access roughly 100 classified records that had been seized from Mar-a-Lago — a request the appeals court granted."This court has already granted the government's motion to stay that unprecedented order insofar as it relates to the documents bearing classification markings," the Justice Department said in its Friday court filing. "The court should now reverse the order in its entirety for multiple independent reasons."Lawyers for the government went on to reiterate their argument that Trump cannot legitimately claim executive privilege over the records seized from Mar-a-Lago, or claim they were his "personal" records because they're government documents and are therefore the property of the United States.Prosecutors also noted that Trump is "not entitled to the return of evidence solely on the ground that the evidence belonged to him when it was seized.""If that were the case, evidence rooms nationwide would soon be emptied," the filing said. It added that by the time a district judge granted Trump's request for a special master in September, a government filter team had already reviewed the seized materials and sifted out records that may be protected by attorney-client privilege.And because Trump "did not demonstrate that the standard filter-team process is inadequate to protect his privileged attorney-client communications in the remaining materials, special-master review is unwarranted on that score as well," the filing said.This story is developing. Check back for updates.Read the original article on Business Insider.....»»

Category: worldSource: nytOct 14th, 2022

How Nation-States Will Use Bitcoin In The Power Projection Game

How Nation-States Will Use Bitcoin In The Power Projection Game Authored by Jaime Gutierrez via, Bitcoin miners are the next level of power projection as they reinforce an incorruptible network that cannot be usurped by a single entity... The military, today, is not considered an important element of society by the public. Why should it? It represents bloodshed and fights that seem pointless and have caused society a lot of pain. Similarly, studying Bitcoin as a property defense system is a misunderstood part of this asset and one that is biased by our own beliefs. How are they connected? Because both use brute force and physical power to defend property. As a Mexican-born citizen, I have always wondered why, given the abundance of natural resources like oil and lithium available in our country, Mexico hasn’t become a world economic leader. You might also have a similar point of view in your country of residence. Especially if you are in a developing nation in Latin America or Africa or if you live in a small country that has a lot of influence from superpowers like Russia, the U.S. or China. Throughout history, one of the reasons a country or empire has become a hegemonic power has been through what Jason Lowery calls the power projection game, which means the kinetic brute physical force of the military. This is important because if a nation doesn’t project power properly, how can it defend its natural resources and its sovereignty from another nation? And more importantly, as individuals, how can we defend our property from being stolen or confiscated by a corrupt agent? Here is where the role of The State arises. According to Robert Breedlove, the main purpose of a State is the defense and preservation of life, liberty, and property. “Property is the mutually acknowledged, exclusive relationship between an asset owner and any particular asset. As a relationship rather than any particular item, the essence of all property is informational.” “The right to life is the source of all rights — and the right to property is their own implementation. Without property rights, no other rights are possible. Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life.” — Ayn Rand If property means a list of “Who owns what?” and life is the source of all rights, then how can we defend ourselves from a tyrant or a person that wants to steal our property? We want to be assured that the product of our daily life efforts gained through sweat, tears and sacrificed time will be safe for ourselves and our bloodline. “Reliably storing, updating and communicating information in this list is property’s native application. And the limitation of this has been the need to trust (and pay) an authority to maintain this list and prevent falsification or duplication of its records.” — Robert Breedlove For centuries, this authority has been the government. The government is the entity that determines the rule of law in a community. It works through the federal courts and its three main powers — legislative, judicial and executive — to defend the property rights of its citizens. It needs the third one — an army — to guarantee compliance with these rules if the other powers fail in doing so. “The purpose of projecting power via the Militia is to preserve zero-trust and egalitarian control over what are fundamentally trust-based and inegalitarian rules of law. Our rules-based order only works insofar as we can project power to preserve our access to our rules-based order. And, the only physical signature of ‘ownership’ is the power projected to preserve one’s access to property.” — Jason Lowery When we look at history, the government has often ended up being the actor imposing new rules and thereby violating these same property rights. In the U.S. this right is protected from corruption by the Second Amendment, which allows the people to form militias to combat the government if it becomes a bad actor in society. Source: Congress This concerns the protection of property rights within a self-organized state, but the same dynamics are true between states. And this is where international conflicts come from and where the importance of the military arises to defend their rule of law from outsiders. Military development infrastructure. Source: Jason Lowery “Whenever a consensus as to property rights between states could not be reached through political means, conflict erupts.” — Robert Breedlove, 2021 “We forget how the state of ownership and chain of custody of virtually everything with mass, particularly the mass we monetize, is written in blood, not ink. This is the tragedy of good power projection and deterrence. The better we get at it, the less often we are reminded about why we need it.” — Jason Lowery Carl von Clausewitz, a Prussian general and military theorist of the 19th century stated: “War is merely the continuation of policy with other means.” So to understand the importance of the military having a hegemony we need to understand why wars happen. As one of the most important classical strategic thinkers of history, he examined the nature of war and defined it with this trinity: War is made of the same “blind natural forces” of “primordial violence” observed in nature. It contains “the play of chance and probability” that rewards “creative spirits.” It is a calculated instrument of national policy used to solve political disputes. This means that the survival of the fittest, the creative spirits that are in the search beyond something greater than them and with a clear purpose to achieve it, are the ones that translated into governments and have become the superpowers that are influencing everything around them because they have become the best at projecting power. “Moreover, winning this brute-force physical power game is not exclusively dependent on finding ways to amass larger quantities of power; it’s also about finding different strategies for projecting power in increasingly more creative ways. And when we can’t trust the judge because we don’t respect their judgment, war gives nations access to an independent courtroom with a perfectly impartial judge who cannot be manipulated by emotion or corrupted by false interpretations. War is the judge of last resort, delivering incorruptible judgment and a very decisive ruling based on brute-force physical power.” — Jason Lowery This is the judge in the rise and fall of civilizations and superpowers. And when new technology arises, the hegemony of the power that rejects it suffers the consequences and falls apart. Think of the Middle Ages, and one of the first things that probably leaps to mind for us is castles. Those immense, strongly fortified structures that were the power bases of their day. Gunpowder would change all of that, as the shattering of the walls of Constantinople demonstrated. Constantinople Harbor painting: Cobija/CC BY-SA 4.0/Public domain Picture yourself in Constantinople, which was seen at the time as the ultimate metropolis, the ultimate object of desire; and the Ottoman Turks were determined to capture it. It is the year 1452. Orban the engineer, an artillery expert, is working in Constantinople and goes to Emperor Constantine XI and his armies to offer them his newest invention; a dreaded weapon, a monster cannon using gunpowder to protect the city from outside invaders. But the Emperor ran out of money and couldn’t buy it from him. So Orban goes to the Turks, who couldn’t realistically reject it, and, at a better price, offers it to them. The monstrous cannon, constructed by Orban. Jumping ahead, it is now Easter Monday, April 2, 1453, a year later. The young Ottoman sultan, Mehmet II, and his armies are in Constantinople to begin the siege of the city. The monstrous cannon, constructed by Orban the engineer, had to be hauled more than a hundred miles to the besieged city. The largest cannon ever, 27 feet long with the ability to shoot a 1,500-pound stone ball at the defenses of the beleaguered city, is now in position. With deafening thunder, the cannon fired. This weapon pounded the walls of Constantinople and eventually broke them down, allowing the Ottoman army to breach the city. In addition to this monster, many other smaller cannons continued the bombardment. This was the sound of a military revolution, making stone walls, towers and battlements largely obsolete. It would devastate the certainties, traditions and way of life of the medieval age. The city of Constantinople fell on May 29, 1453, eight weeks after the first siege. And the key to the Ottoman Turks conquering Constantinople was the cannon constructed by Orban the engineer, a professional artillery master. “Keep your sword in front of you. Your swords and your shields are fully sufficient and will prove very effective in battle.” — What Emperor Constantine XI probably said during the final siege of Constantinople. Those last words would have been a lie because they couldn’t defend themselves from the cannons unless they would have bought them the year prior to the siege. This is an important history lesson because the last innovation in power projection was nuclear weapons. We saw what they are capable of in Hiroshima and Nagasaki. If used, the outcome is mutually assured destruction of humanity. And the countries that have them became the new world superpowers that no one wants to attack because the cost of it may be irreparable. These countries are China, Russia and the world superpower hegemon, the U.S.. We have some other exceptions with nuclear weapons like North Korea, but they don’t have the influence of these three countries throughout the world. Yet, another power projection technology arrived in 2009. Satoshi Nakamoto, inspired by Adam Back’s paper “Hashcash - A Denial Of Service Countermeasure”, built “Bitcoin: A peer-to-peer electronic cash system,” A network with a cost function that brings a challenge to its miners to be able to create tokens we call satoshis. By the proof-of-work mechanism, miners have to solve a challenge every 10 minutes to be able to validate Bitcoin transactions, and by doing so they receive bitcoin as a reward. Miners need to connect their specialized computers like Antminer’s S19 Pro in order to generate valid blocks. This cost function has also a mathematical succession to impose a cost if someone wants to attack the network: The Bitcoin halving formula. Fuente: When the Bitcoin network was released, miners started receiving 50 bitcoin per block, which was mined every 10 minutes. Every 210,000 blocks bitcoin rewards will be cut in half, which happens approximately every four years until we reach 32 halvings (”halving” is the term referring to the Bitcoin rewards cut by half), which is expected to happen in the year 2140. We are now in the third halving, during which miners are receiving 6.25 bitcoin per block. If someone wants to attack the Bitcoin network, he or she would need to have a 51% majority of the hash rate. If, despite major roadblocks preventing such an event, a person does have this majority, the Bitcoin full nodes around the world would then have to validate and accept these new attacker blocks, which they are not incentivized to do so. Not to mention, this 51% attempt to attack the Bitcoin network would take approximately $6.7 billion per year. The proof-of-work mechanism imposes a physical cost to any belligerent agent that wants to corrupt the network. Using electrical power via their computers, they are using electrical brute force physical power instead of kinetic one like the military’s gunpowder. This is a continuation of the power projection game but in cyberspace, now done by protecting our purely digital property and energy, which we call Bitcoin. Miners are a continuation of our military power. What are the implications of this? Jason Lowery expresses it as follows and is making a great thesis called “Softwar: Bitcoin And The Future Of Our National Strategic Defense.” Lowery illustrates here: “We cannot forget how history plays out. We cannot forget that power is everything if we want to defend what we hold valuable. Hopefully, we can convince the people who are in charge of policy making. This is the goal of my research. They should at least take Bitcoin mining seriously because we don’t want to be like the end of Constantinople. We want to be the superpower of the future. If this is the power projection play, cyber. If this is how you achieve zero trust egalitarian control over cyber property, we want to posture this country to continue to be a superpower.” The U.S. has become the world superpower through its military force and the use of its currency, the U.S. dollar, as the world reserve money in the world. They managed to secure this after getting out of the gold standard in 1971 and following that with the petrodollar system. Why is this important? After the U.S. sanctions against Russia removing them from the SWIFT system, now every country is asking themselves these questions: “Can I trust my savings in the banking system? ... If I go against the U.S., could I be thrown out of the SWIFT system as well? ... How can we protect our property and sovereignty from the influence of this superpower?” They do so by building their military kinetically and electrically so that they can impose a cost on any attacker that wants to inflict their rules. The power projection game is a natural law that has existed for millions of years and is now evolving. Now, the U.S. has to make a smart move if it wants to maintain its role as the most powerful nation in the world. Tyler Durden Thu, 10/06/2022 - 19:40.....»»

Category: worldSource: nytOct 6th, 2022

MacKenzie Scott likely had a prenup with her second husband, legal experts say. Here"s what could happen next with her divorce — and how it could affect the billions designated for charity.

Legal experts told Insider that Scott's second divorce will likely leave the majority of her $28 billion Amazon fortune untouched. Taylor Hill/FilmMagic via Getty Images; Taylor Borden/Business Insider MacKenzie Scott's divorce is unlikely to have a major impact on her $28 billion fortune. Legal experts agree that Scott likely had a prenuptial agreement that protects her Amazon stake.  Scott and her second husband, Dan Jewett, are divorcing after less than two years together.  MacKenzie Scott's divorce is unlikely to impact her multibillion-dollar charitable giving, experts say.Scott filed for divorce from her second husband, Dan Jewett, on Monday. The couple has been married for less than two years and had embarked on a philanthropic mission together, but recently, mentions of Jewett had disappeared from Scott's posts and online profiles. On Wednesday, The New York Times broke the news that they're splitting up. Scott was previously married to Amazon founder Jeff Bezos, and their divorce left her with a 3% stake in the e-commerce giant, a stake that has made her the world's 40th-richest person. But legal experts told Insider that Scott's second divorce will likely be vastly different from the first time around and will almost certainly leave the majority of her $28 billion fortune untouched. 'Shocked' if there is no prenuptial agreementWhen Scott's divorce from Bezos was finalized in 2019, she walked away with millions of Amazon shares worth, at that time, roughly $38 billion. Though she's been working to offload her immense wealth since then, she still entered the marriage to Jewett with assets that far outpaced most people on the planet, including her second husband.To that end, it's almost certain that the couple signed a prenuptial agreement, according to Eleanor Alter, a partner at New York law firm Alter, Wolff, & Foley who has handled high-profile divorce cases. "It's possible they didn't have a prenuptial agreement, but I'd be shocked," she said.Jennifer Brandt, chair of the family law group at Pennsylvania law firm Cozen O'Connor, agreed: "In most cases when you have high net worth people, they do want to get, and are advised to get, a prenuptial agreement." Brandt noted that prenups are especially common in cases where someone has been married before or comes into the marriage with significant wealth, which are both factors that apply to Scott.Couple already agreed to a contract that divides their assetsThough Scott's divorce petition doesn't mention a prenup, it does say that the couple signed a separation agreement, an interim agreement that sets some rules for the period of separation before a couple is divorced. Beyond divvying up a couple's finances, it can include issues like child or spousal support, though neither request was included in the divorce petition. "It could even dictate use of certain assets or use of properties," Brandt said. "If you have multiple properties, it may dictate where people live or what properties they may be using during an intervening period before the assets are distributed and maybe who pays for them." Oftentimes, those types of agreements are included in a prenup, according to Alter."A lot of prenuptial agreements provide that if you get divorced, this is the separation agreement. So there's no difference, there's nothing to negotiate," she said. "The terms of the prenuptial agreement become the terms of the separation agreement. In a short marriage, that's likely."While Scott's petition is publicly accessible, the separation agreement is sealed. Terry Price, a family law professor at the University of Washington, told GeekWire that details of that contract "will never see the light of day." Scott and Jewett have not commented publicly on their divorce plans.The divorce will likely be finalized quicklyWashington, where they live, is a community-property state, meaning that the assets a couple acquires while they're married belong to both of them and therefore will be divided equitably. But if one person comes to the marriage with property of their own, they're not required to split that with their spouse in the event of a divorce, according to state law. Which means that Scott's wealth — and her plans to donate at least half of it during her lifetime, which she's doing faster than any other living person, according to Puck — likely won't be significantly impacted by the divorce.Alter pointed out that divorce may affect Scott's tax situation, as married people can give more money away without paying taxes, but given the scale of Scott's donations and the machinery that's likely behind it, it's unclear how her taxes will be affected, if at all. Either way, the experts agree that Scott and Jewett will likely push for the divorce to become finalized as quickly and quietly as possible. Washington law says that the petition must be filed and served to the other spouse for at least 90 days before a judge will dissolve a marriage. Alter estimated that, given the likelihood of a prenup and the brevity of the marriage, Scott's divorce will take "a few months, at most" to complete.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 1st, 2022

Bounce In Futures Fizzles As Dollar Surge Returns

Bounce In Futures Fizzles As Dollar Surge Returns If yesterday markets made little sense, when the dollar and yields slumped yet stocks and other risk assets tumbled alongside them in a puzzling reversal of traditional risk relationships (a move which was likely precipitated by the plunge in AAPL and KMX), today things are a bit more logical with the dollar initially extending its slide helping futures rise to session highs just below 3,700, before the dollar surged just after 5am as sterling tumbled after Bloomberg reported that Prime Minister Liz Truss’s government signaled it was sticking with its plan for tax cuts after a meeting with the UK’s fiscal watchdog, dashing market expectations that a policy U-turn might be imminent which has pushed cable briefly above 1.12 overnight, wiping out a week's worth of losses. As a result, after rising as much as 0.8%, S&P futures were flat, up just 0.1%, the same as Nasdaq futures. Government bonds rallied across Europe and the US, as the dollar strengthened after reversing its earlier loss. In premarket trading, Nike shares fall 10% after the sportswear giant cut its margin outlook for the year while reporting surging inventory, fueling worries over consumers’ ability to spend as inflation takes a toll. Micron shares rose 3% in premarket trading, after analysts said the ongoing inventory correction was only a short-term hurdle and that the bottom is near, a potential relief for semiconductor stocks that have taken a beating this year. Amylyx Pharmaceuticals’s (AMLX US) shares soared as much as 13% in US premarket trading after winning FDA approval for its Relyvrio drug, for the treatment of amyotrophic lateral sclerosis (ALS) in adults. Analysts said they expected the drug to see a strong launch given demand from patients. Xos jumped 6.3% in extended trading after delivering 13 battery-electric vehicles to FedEx. Thursday's bruising session took the S&P 500 down 2% to the lowest in almost two years and the Nasdaq 100 tumbling almost 4%. The S&P 500 Index has dropped on seven of the past 8 days, and is headed for its third straight quarter of losses for the first time since 2008-2009 and the Nasdaq 100 Stock Index for the first time in 20 years. Fears of global recession are growing by the day as the threat of higher rates saps growth and as the Fed confirms with every speech that not even a recession will stop it. The case of the UK shows how faultlines between government and central bank policy on tackling inflation can erupt into a crisis. Hopes evaporated that the British government would succumb to pressure to back down from tax cuts that brought the pound to the edge of dollar parity. “Today, everything is just oversold so you are seeing a rebound,” said Esty Dwek, chief investment officer at Flowbank SA. “We are closer to bottoms and sentiment is so negative the downside is becoming more limited.” Elsewhere, Global equity funds garnered inflows of $7.6 billion in the week to Sept. 28, according to data compiled by EPFR Global. Bonds had $13.7 billion of outflows in the week, while $8.9 billion flowed into US stocks, the data showed. In Europe, the Stoxx 50 rose 0.9%. Real estate, energy and retailers are the strongest-performing sectors.  Here are some of the biggest European movers today: Krones shares rose as much as 2.7% to their highest intra-day level since Feb. 2022, after HSBC increased the German machinery and equipment company’s price target to EU102 Clariant shares rally by the most intraday since mid-May after Credit Suisse raises to outperform, partly as it expects Clariant’s new management team to boost performance ABN Amro jumped as much as 6.3% after Goldman Sachs raised the stock to buy from neutral, citing its gearing toward higher interest rates, increasing estimates on net interest income Zealand Pharma rise as much as 35%, the most on record, after the company announced positive data from its phase 3 trial of glepaglutide to treat patients with short bowel syndrome Sinch shares rise as much as 24% after SoftBank sold its entire stake in Sinch AB following a share price collapse of more than 90% in the Swedish cloud-based platform provider Adidas and Puma drop as their US peer Nike slumped in late trading Thursday after it said inventory buildup forced it to push through margin-busting discounts Hurricane Energy shares drop as much as 5.6% after 1H earnings; Canaccord Genuity notes the results did not surprise, and flags lack of regulatory reassurance on gas-management approvals Fingerprint Cards shares drop as much as 17% after saying it is raising fresh capital in order to strengthen the balance sheet and to address a forecasted covenant breach Earlier in the session, Asian stocks fell again, putting the regional benchmark on course for its worst monthly performance since 2008, as a selloff spurred by concerns over higher interest rates and a global recession deepened. The MSCI Asia Pacific Index slid 0.5% after earlier falling as much as 1% on Friday. Still down over 12% this month, the gauge has trailed global peers and is set to cap a seventh straight week of declines. That matches its losing streak from September 2015, which was the longest since 2011. Equities in Japan, which has the highest weight in the Asia index, were among the biggest losers on Friday, with the Topix falling 1.8%. Consumer discretionary and industrials were the worst sectors, while Chinese tech shares listed in Hong Kong also fell. READ: China Shares Plunge to Lowest Valuation on Record in Hong Kong Global funds have pulled almost $10 billion from Asian emerging-market stocks excluding China this month, as the dollar and Treasury yields climbed after Federal Reserve officials ramped up their rate-hike rhetoric. Taiwan’s tech-heavy market has suffered the bulk of the outflow from Asia. Its regulators tightened short selling rules as shares extended their slide.  “I think emerging markets as a whole are still going to have a pretty difficult six months until the Fed rate peaks,” Louis Lau, a fund manager at Brandes Investment Partners, said in an interview with Bloomberg TV. How much damage is a strong dollar causing? That’s the theme of this week’s MLIV Pulse survey. It’s brief and we don’t collect your name or any contact information. Please click here to share your views. The turmoil in the UK has been another source of market volatility for Asia investors, who continue to grapple with the fallout from strict lockdowns in China, the region’s biggest economy. “There’s been some correlation (between risk assets and sterling) recently,” said Takeo Kamai, head of execution services at CLSA. Overall, “the theme hasn’t changed. The scenario that the Fed will cut rates next year is breaking down. I think we could see further downside in stock prices towards November,” he said. Stocks in India gained after the central bank raised the benchmark rate by an expected 50 basis points. The MSCI Asia Pacific Index is down 4% this week and on course for its lowest close since April 2020 Japanese equities extended declines on Friday as a global market rout deepened, capping its worst month since the onset of the pandemic in 2020.    The Topix Index fell 1.8% to 1,835.94 as of market close Tokyo time, taking declines in September to 6.5%. The Nikkei declined 1.8% to 25,937.21. Toyota Motor Corp. contributed the most to the Topix Index decline, decreasing 4.2%. Out of 2,169 stocks in the index, 299 rose and 1,823 fell, while 47 were unchanged.  Federal Reserve officials reiterated Thursday that they will keep raising interest rates to rein in high inflation.  “There are concerns that the economy will slow from further rate hikes while inflation doesn’t stop,” said Kenji Ueno, a portfolio manager at Sompo Asset Management. In Australia, the S&P/ASX 200 index fell 1.2% to close at 6,474.20, dragged by banks and industrials, after another plunge on Wall Street as the prospect of higher interest rates and turmoil in Europe stoked fears of global recession. The benchmark notched its third-straight week of losses. In New Zealand, the S&P/NZX 50 index fell 1.2% to 11,065.71 Stocks in India outperformed Asian peers after the Reserve Bank of India raised borrowing costs and exuded confidence to tackle inflation without any major impact to its growth projections. The S&P BSE Sensex added 1.8% to 57,426.92, while the NSE Nifty 50 Index rose by 1.6% as the indexes posted their biggest single-day jump since Aug. 30. Despite the rally, the key gauges fell more than 1% each for the week and over 3% for the month, their biggest decline since June. India’s central bank raised its repurchase rate by 50 basis points to 5.90%, matching the expectations of most economists. The RBI trimmed the economic growth outlook for the financial year ending March to 7% while retaining it 6.7% forecast for inflation.  The increase in the benchmark interest rate “mainly supports stocks of financial companies, which have been seeing strong credit growth,” said Prashanth Tapse, an analyst at Mehta Securities.  In FX, the Bloomberg Dollar Spot Index rebounded after sliding initially, as cable tumbled when it emerged that Liz Truss is not backtracking on its massive fiscal easing. Iniitlally, the pound advanced a fourth day, to briefly trade above $1.12, fully reversing the moves since last Friday, however it then tumbled, wiping out all gains after Prime Minister Liz Truss’s government signaled it’s sticking with its plan for tax cuts after a meeting with the UK’s fiscal watchdog, dashing market expectations that a policy U-turn might be imminent. Notable data: U.K. 2Q final GDP rises 0.2% q/q versus preliminary -0.1%. The Aussie and kiwi crept higher, but are still set for their biggest monthly declines since April as rising Fed interest rates and fears of a global economic slowdown sap demand for risk assets In rates, Treasuries advanced, 10-year yield dropping 8bps while bunds 10-year yield drops 6bps to 2.11%. Treasury 10-year yields around 3.685%, richer by 10bp on the day -- largest moves seen in UK front-end where 2-year yields are richer by 25bp on the day as BOE tightening premium fades out of interest-rate swaps. Short-end UK bonds surged amid political pressure on the government to water down some of its budget proposals, while the pound regained its budget-shock losses. US session focus is on PCE data and host of Federal Reserve speakers while month end may add some support into long end of the curve.  Long end of the Treasuries curve may find additional month-end related buying support over the session; Bloomberg index projects 0.07yr Treasury extension for October. Gilts rallied, with short-end bonds leading gains as traders trimmed BOE tightening bets amid political pressure on the government to water down some of its budget proposals. Meanwhile in Japan, JGBs gained after the BOJ boosted purchases for maturities covering the benchmark 10-year zone. The Bank of Japan will buy more bonds with maturities of at least five years in the October-December period, according to a statement from the central bank In commodities, WTI trades within Thursday’s range, adding 1.3% to near $82.26. Spot gold rises roughly $10 to trade near $1,671/oz.  Bitcoin is essentially unchanged and in very tight ranges of circa. USD 400 and as such well within the week's existing parameters Looking to the day ahead now, and data releases include the flash Euro Area CPI release for September, as well as the Euro Area unemployment rate for August and German unemployment for September. In the US, we’ll also get August data on personal income and personal spending, the MNI Chicago PMI for September, and the University of Michigan’s final consumer sentiment index for September. Finally, central bank speakers include Fed Vice Chair Brainard, the Fed’s Barkin, Bowman and Williams, as well as the ECB’s Schnabel, Elderson and Visco. Market Snapshot S&P 500 futures up 0.9% to 3,686.00 STOXX Europe 600 up 1.3% to 387.83 MXAP down 0.5% to 139.25 MXAPJ little changed at 453.72 Nikkei down 1.8% to 25,937.21 Topix down 1.8% to 1,835.94 Hang Seng Index up 0.3% to 17,222.83 Shanghai Composite down 0.6% to 3,024.39 Sensex up 2.0% to 57,539.66 Australia S&P/ASX 200 down 1.2% to 6,474.20 Kospi down 0.7% to 2,155.49 Brent Futures up 1.2% to $89.55/bbl Gold spot up 0.7% to $1,671.56 U.S. Dollar Index down 0.52% to 111.67 German 10Y yield little changed at 2.10% Euro up 0.3% to $0.9840 Top Overnight News from Bloomberg Prime Minister Liz Truss is under pressure to cut spending on the same scale as George Osborne’s infamous austerity drive of 2010 in order to stabilize the UK public finances and win back the confidence of investors Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng are holding talks Friday with the UK government’s fiscal watchdog, amid intense criticism over their unfunded tax cuts that roiled markets A dash for cash among sterling investors after market turmoil sparked by pension fund margin calls is coming at a bad time, according to an M&G Investments executive The ECB shouldn’t let concerns about its profitability obstruct decision-making over monetary policy, according to Governing Council member Gediminas Simkus The SNB trimmed its foreign-exchange portfolio in the second quarter as the franc gyrated against the euro before rising above parity for the first time since 2015. The central bank sold 5 million francs ($5.1 million) worth of foreign currencies in the three months through June Norway’s central bank will increase its purchases of foreign currency to 4.3 billion kroner ($400 million) a day in October from 3.5 billion in September as it deposits energy revenues into the $1.1 trillion sovereign wealth fund. Japan’s factory output expanded by 2.7% in August from July, according to the economy ministry Friday, beating analysts’ 0.2% forecast. The output of semiconductor and flat-panel making equipment hit its highest level in data going back to 2003, as the effect of lockdowns in China abated Japanese Prime Minister Fumio Kishida instructed the government Friday to come up with an economic stimulus package by the end of October to help mitigate the impact of inflation, as economists warned against over-sized spending China’s factory activity continued to struggle in September, while services slowed, as the country’s economic recovery was challenged by lockdowns in major cities and an ongoing property market downturn. The official manufacturing purchasing managers index rose to 50.1 from 49.4 in August An organization formed by China’s biggest foreign- exchange traders asked banks to trade the currency at levels closer to the central bank’s fixing at the market open, according to people familiar with the matter A more detailed look at global markets courtesy of Newsquawk Asia-Pac stocks were mostly lower after the negative performance across global peers amid inflationary headwinds and with risk appetite subdued heading quarter-end, while the region also digested mixed Chinese PMI data. ASX 200 declined amid weakness across most sectors and with tech the notable underperformer after the recent upside in yields and with Meta the latest major industry player to announce a hiring freeze. Nikkei 225 was pressured and fell below the 26,000 level with better-than-expected Industrial Production and Retail Sales data releases overshadowed by the broad risk aversion. Hang Seng and Shanghai Comp were indecisive after the PBoC conducted its largest weekly cash injection in more than 32 months ahead of the week-long closure in the mainland, while participants also digested mixed PMI data in which Official Manufacturing PMI topped forecasts with a surprise return to expansion, but Non-Manufacturing and Composite PMIs slowed and Caixin Manufacturing PMI printed at a wider contraction. NIFTY eventually notched mild gains in the aftermath of the RBI rate decision in which it hiked the Repurchase Rate by 50bps to 5.90% as expected via 5-1 split and with the central bank refraining from any major hawkish surprises. Top Asian News Japan's Chief Cabinet Secretary Matsuno said they want to compile an extra budget swiftly after the economic package in late October, while they will consider further support for hard-hit consumers and businesses in view of higher energy and food prices, as well as consider steps to promote wage hikes, according to Reuters. Chinese Finance Ministry is to offer a tax refund for people who sell their homes and repurchases new ones by the end of 2023; additionally, China has told banks to provide USD 85bln in property funding by the end of the year, according to Bloomberg. Chinese NBS Manufacturing PMI (Sep) 50.1 vs. Exp. 49.6 (Prev. 49.4); Non-Manufacturing PMI (Sep) 50.6 vs Exp. 52.4 (Prev. 52.6) Chinese Composite PMI (Sep) 50.9 (Prev. 51.7) Chinese Caixin Manufacturing PMI Final (Sep) 48.1 vs. Exp. 49.5 (Prev. 49.5) Japanese Industrial Production MM SA (Aug P) 2.7% vs. Exp. 0.2% (Prev. 0.8%); Retail Sales YY (Aug) 4.1% vs. Exp. 2.8% (Prev. 2.4%) European equities are attempting to claw back some of yesterday’s downside on quarter and month end. Sectors are firmer across the board with Real Estate outperforming peers in what has been a tough week for the UK property market. Stateside, futures are also attempting to recover from yesterday’s losses which saw a tough session for the tech sector after Apple shed the best part of 5%. Top European News UK OBR Chair Hughes says a statement will be released today after the meeting with UK PM Truss and Chancellor Kwarteng. On this, the UK Treasury has not sought to accelerate watchdog's economic forecast, according to Bloomberg. Reminder, UK PM Truss to conduct emergency talks with the OBR on Friday after failing to calm markets, according to the Guardian. UK cross-party MPs in the Treasury Select Committee called for Chancellor Kwarteng to release a full economic forecast from the OBR by end of October, according to Sky News. UK PM Truss has confirmed she will attend next week's European Political Community summit, via BBC. Reports that technical level discussions between the UK and EU could resume as soon as next week, via BBC's Parker; writing, that there has been a 'warmer' tone in recent weeks, some believe pressure from the US on the UK has had influence. German VDMA, survey of members: majority expect nominal sales growth in 2022 and 2023. FX GBP's revival has continued ahead of a meeting between PM Truss and the OBR, with a statement expected, a move that has taken Cable above 1.12 but shy of mini-Budget levels. USD is firmer overall but continues to retreat from YTD peaks, though the DXY is seemingly drawn to the 112.00 area. Yuan derived further, fleeting, support from reports the FX body has asked banks to trade closer to the onshore fixing. Elsewhere, FX peers are under modest pressure but more contained vs USD; EUR unfased by a record EZ flash CPI print of 10.0%. Fixed Income Benchmarks bid but modestly off best levels with Bunds leading the charge, but well within recent ranges, amid potential month/quarter-end influence. Gilts lifted, but the 10yr yield remains above 4.0% ahead of the OBR statement. Stateside, USTs are equally buoyed ahead of a packed PM agenda include PCE Price Index and Fed speak. Commodities The broader commodity market is benefitting from a pullback in the USD coupled with a broader risk appetite. Metals are buoyed by the recent pullback in the Dollar with spot gold edging above its 10 DMA (USD 1,656.72/oz) and towards the USD 1,680/oz mark which coincides with the yellow metal’s 21DMA (USD 1,680.56/oz) and 200WMA (USD 1,680.20/oz). Base metals are also firmer across the board with 3M LME copper back above the USD 7,500/t mark, whilst nickel and aluminium outperform on the exchange. Central Banks China loosened FX restrictions in response to the Fed rate hike and the yuan's fall over the past week, according to people familiar with the matter cited by FT. China's FX body is reportedly asking banks to trade the Yuan closer to the PBoC fixing, according to Bloomberg. PBoC injected CNY 128bln via 7-day reverse repos with the rate kept at 2.00% and injected CNY 58bln via 14-day reverse repos with the rate kept at 2.15% for a CNY 184bln net daily injection and a net CNY 868bln weekly injection. RBI hiked Repurchase Rate by 50bps to 5.90%, as expected, via 5-1 vote and the Standing Deposit Facility was adjusted to 5.65%. RBI Governor Das said MPC is to remain focused on the withdrawal of accommodation and that the persistence of high inflation necessitates further calibrated withdrawal of monetary accommodation. However, Das noted that the Indian economy continues to be resilient with economic activity stable and overall monetary and liquidity conditions still remain accommodative, while Real GDP growth forecast for 2022/23 was revised lower to 7.0% from 7.2% and 2022/23 CPI was seen at 6.7%. RBI is reportedly encouraging state-run refiners to reduce USD buying in the spot market; asking to lean on USD 9bln credit line instead, according to Reuters sources. BoE was reportedly warned about a looming catastrophe in the pensions sector within the next 5 years before it was forced to intervene to prevent a market collapse, according to The Telegraph. Fed's Daly (2024 voter) said a downshift in economic activity and labour is needed to bring down inflation and additional rate increases are necessary and appropriate. Daly also stated that a myriad of risks narrows the path to a smooth landing but does not close it, while she added they have gotten rates to neutral and expect to raise rates further in coming meetings and early next year. Norges Bank will purchase FX equivalent to NOK 4.3bln/day in October (3.5bln in September); reflecting an increase in projected NOK revenues from petroleum activity. Geopolitics Russian President Putin signed decrees recognising occupied Ukrainian regions of Kherson and Zaporizhzhia as independent territories which is an intermediate step before the regions are formally incorporated into Russia, according to Reuters. ** Russia's Kremlin says strikes against the new territories incorporated into Russia will be considered an act of aggression against Russia**; says Ukraine has shown no willingness to negotiate, via Reuters. Russia's Spy Chief says they have material which show a Western role in Nord Stream incidents, via Ifx. Armenia's Foreign Ministry says their Ministers and Azerbaijani counterparts will meet in Geneva on October 2nd, via AJA Breaking. US Event Calendar 08:30: Aug. Personal Spending, est. 0.2%, prior 0.1% Aug. Real Personal Spending, est. 0.1%, prior 0.2% Aug. Personal Income, est. 0.3%, prior 0.2% Aug. PCE Deflator MoM, est. 0.1%, prior -0.1% Aug. PCE Core Deflator MoM, est. 0.5%, prior 0.1% Aug. PCE Core Deflator YoY, est. 4.7%, prior 4.6% Aug. PCE Deflator YoY, est. 6.0%, prior 6.3% 09:45: Sept. MNI Chicago PMI, est. 51.8, prior 52.2 10:00: Sept. U. of Mich. Current Conditions, est. 58.9, prior 58.9 U. of Mich. Sentiment, est. 59.5, prior 59.5 U. of Mich. Expectations, est. 59.9, prior 59.9 U. of Mich. 1 Yr Inflation, est. 4.6%, prior 4.6%; 5-10 Yr Inflation, est. 2.8%, prior 2.8% Central Bank Speakers 08:30: Fed’s Barkin Speaks at Chamber of Commerce Event 09:00: Fed’s Brainard Speaks at Fed Conference on Financial Stability 11:00: Fed’s Bowman Discusses Large Bank Supervision 12:30: Fed’s Barkin Discusses the Drivers of Inflation 16:15: Williams Speaks at Fed Conference on Financial Stability DB's Jim Reid concludes the overnight wrap As we arrive at the end of a tumultuous month in financial markets, there’s been little sign of respite for investors over the last 24 hours, with the S&P 500 (-2.11%) reversing the previous day’s gains to close at a 21-month low. There were a number of factors behind the latest selloff, but fears of further rate hikes were prominent after the US weekly initial jobless claims showed that the labour market was still in decent shape, whilst the PCE inflation readings for Q2 were revised higher as well. That came alongside fresh signals of inflationary pressures in Europe, where German inflation in September moved into double-digits for the first time in over 70 years. Thanks to some hawkish rhetoric from central bank officials on top of that, the result was that the synchronised selloff for equities and bonds continued. In fact, barring a massive turnaround today, both the S&P 500 and the STOXX 600 are on course for their third consecutive quarterly decline, which is the first time that’s happened to either index since the financial crisis. We’ll come to some of that below, but here in the UK there were signs that the market turmoil was beginning to stabilise slightly relative to earlier in the week. For instance, sterling (+2.09%) strengthened against the US Dollar for a third consecutive session, moving back above $1.10 for the first time since last Friday when the mini-budget was announced, and at a couple of points overnight was very briefly trading above $1.12. Indeed, it was the strongest-performing G10 currency on the day, so this wasn’t simply a case of dollar weakness. In the meantime, investors moved again to lower the chances of an emergency inter-meeting hike from the Bank of England, instead looking ahead to the next scheduled MPC meeting on November 3. That followed a speech from BoE Chief Economist Pill, in which he said “it is hard to avoid the conclusion that the fiscal easing announced last week will prompt a significant and necessary monetary policy response in November.” However, gilts continued to struggle yesterday following the massive Wednesday rally after the BoE’s intervention. Yields on 10yr gilts were up by +13.0bps by the close, a larger increase than for German bunds (+6.4bps) or French OATs (+8.0bps). Furthermore, the spread on the UK’s 5yr credit default swaps closed at its highest level since 2013, so there are still plenty of signs of investor jitters. That came as the government showed no signs of U-turning on their programme of tax cuts, with Prime Minister Truss saying “I’m very clear the government has done the right thing”. It’s also worth noting that one factor seen as supporting sterling overnight was growing speculation that Truss might come under political pressure to reverse course on the fiscal announcements, particularly after a YouGov poll gave the opposition Labour Party a 33-point lead, which is its largest in any poll since the late-1990s. We also heard from the Conservative chair of the Treasury Select Committee, who tweeted that Chancellor Kwarteng should bring forward the November 23 statement on his medium-term fiscal plan and publish the independent OBR forecast as soon as possible. Away from the UK, the broader selloff in financial markets resumed yesterday as investors priced in a more hawkish response from central banks over the months ahead. In the US, that followed a fresh round of data that was collectively seen as offering the Fed more space to keep hiking rates. First, the weekly initial jobless claims fell to a 5-month low of 193k over the week ending September 24. That was beneath the 215k reading expected, and the previous week was also revised down by -4k. Nor was this just a blip either, as the 4-week moving average is now at its lowest level since late May as well. In the meantime, we had an upward revision to core PCE in Q2, taking the rate up by three-tenths to an annualised +4.7%. Those data releases came alongside some pretty hawkish Fed rhetoric, with Cleveland Fed President Mester saying that a recession wouldn’t stop the Fed from raising rates. And in turn, that led markets to price in a more aggressive Fed reaction, with the terminal rate expected in March 2023 up by +3.0bps on the day. Incidentally, we saw yet further signs that the Fed’s tightening was having an effect on the real economy, with Freddie Mac’s mortgage market survey showing that the average 30-year fixed rate had risen to 6.70%, which is their highest level since 2007. The more hawkish developments were reflected in US Treasury yields too, particularly at the front end, with yields on 2yr Treasuries up +5.8bps to 4.19%, and those on 10yr Treasuries up +5.4bps to 3.79%. Overnight in Asia, yields on the 10yr USTs are fairly stable as we go press, seeing a small +0.3bps rise, whilst those on 2yr Treasuries are up +1.8bps to 4.21%. Europe got a fresh reminder about inflation as well yesterday, after the German CPI release for September came in well above expectations. Using the EU-harmonised measure, inflation rose to +10.9% (vs. +10.2% expected), which marks the first time since 1951 that German inflation has been running in double-digits. Earlier in the day, the German government separately announced that they’d be borrowing another €200bn to cap gas prices, with the previously planned consumer levy not going ahead. Looking forward, it’ll be worth looking out for the flash CPI release for the entire Euro Area today at 10am London time, where the consensus is expecting we’ll see the highest inflation since the formation of the single currency. That would keep the pressure on the ECB, and markets are continuing to price in another 75bps hike as the most likely outcome at the October meeting. With investors digesting the prospect of continued hawkishness from central banks, equities lost further ground over yesterday’s session. The S&P 500 fell -2.11%, meaning the index is now down by nearly a quarter (-24.10%) since its closing peak in early January. The declines were incredibly broad-based across sectors, but interest-sensitive tech stocks struggled in particular, with the NASDAQ (-2.84%) and the FANG+ index (-3.38%) seeing even larger losses. Those heightened levels of volatility were also reflected in the VIX index (+1.7pts), which closed at 31.8pts. For European equities it was much the same story, with the STOXX 600 (-1.67%) closing at a 22-month low. Adding to the tech woes, Meta (-3.67%) joined the growing list of firms announcing a hiring freeze, with the tech giant also issuing a warning of potential restructuring, so it’ll be important to see if this is echoed more broadly and what this means for the labour market. In overnight trading, equity futures are pointing to further losses today, with those on the S&P 500 (-0.25%) and NASDAQ 100 (-0.27%) both moving lower. As we arrive at the final day of the month, Asian equities are similarly retreating this morning, putting a number of indices on course for their worst monthly performance in years. For instance, the Nikkei is currently on track for its worst month since March 2020, and the Hang Seng is on track for its worst month since September 2011. In terms of today, the Nikkei (-1.67%) is leading losses in the region with the Shanghai Composite (-0.21%), the CSI (-0.14%), the Kospi (-0.11%) and the Hang Seng (-0.07%) following after that overnight sell-off on Wall Street. One source of better news came from the Chinese PMIs, with the official manufacturing PMI unexpectedly in positive territory in September with a 50.1 reading (vs. 49.7 expected), which is up from a contractionary 49.4 in August. The composite PMI was also in positive territory with a 50.9 reading. However, the Caixin manufacturing PMI unexpectedly deteriorated further to 48.1 in September, so not every indicator was positive. In the meantime, Japanese data showed that industrial production growth came in above expectations with a +2.7% reading (vs. +0.2% expected), as did retail sales with growth of +1.4% (vs. +0.2% expected). There wasn’t much in the way of other data yesterday. However, the European Commission’s economic sentiment indicator for the Euro Area fell for a 7th consecutive month to 93.7 in September (vs. 95.0 expected). To the day ahead now, and data releases include the flash Euro Area CPI release for September, as well as the Euro Area unemployment rate for August and German unemployment for September. In the US, we’ll also get August data on personal income and personal spending, the MNI Chicago PMI for September, and the University of Michigan’s final consumer sentiment index for September. Finally, central bank speakers include Fed Vice Chair Brainard, the Fed’s Barkin, Bowman and Williams, as well as the ECB’s Schnabel, Elderson and Visco. Tyler Durden Fri, 09/30/2022 - 08:10.....»»

Category: blogSource: zerohedgeSep 30th, 2022

Donald Trump will fight hard against Letitia James" lawsuit. Ex-AG insiders say these are his top 5 defenses.

Former NY AG prosecutors predict a slow-motion legal brawl where Trump will cry foul, claim ignorance, and delay, delay, delay. Donald Trump speaking at the NRA convention in Houston, TX, on May 27, 2022. New York Attorney General Letitia James, right, speaks in Washington, DC on Nov. 12, 2019.Left, Brandon Bell/Getty Images. Right, Chip Somodevilla/Getty Images Donald Trump has 5 ways to fight Letitia James' lawsuit, ex-NY AG prosecutors told Insider. Trump will play dumb, cry bias, and delay, delay, delay, they said. James filed a 220-page lawsuit against Trump, his family, and the Trump Organization on Wednesday. Donald Trump will try every legal tactic possible to save his Manhattan-based business empire from New York attorney general Letitia James' lawsuit, former office prosecutors said.It won't be pretty, and barring a settlement, it won't be fast, they said of the slow-motion legal brawl to come. But it will be heated, these New York AG veterans said of the battle over Wednesday's lawsuit and its potentially corporation-crippling penalties.James accused Trump of routinely lying about the value of his properties to secure hundreds of millions in bank loans and tax breaks; she wants a judge to order $250 million in penalties and to bar the Trump family from selling, buying, collecting rent, or borrowing money in New York. The outcome is by no means assured.Insider spoke to three defense lawyers who, before going into private practice, spent years prosecuting complex financial cases for the New York AG's office. Here are their picks for Trump's top 5 defenses.Trump Defense No. 1: She's out to get me"I never heard of her," Trump complained to Fox News host Sean Hannity on Wednesday, hours after the lawsuit dropped."But I saw this woman," he said of James' 2018 run for AG. "And she said, 'We're going to get him.'" "Her whole campaign was based on that," he added.It was not the first time Trump has raised the "She's out to get me" defense. He's cried "bias" repeatedly and unsuccessfully in fighting James' three-year investigation into the Trump Organization. In February he even compiled her history of anti-Trump statements into an 11-page spreadsheet. "They're definitely going to waste a lot of paper trying to make that argument again," in motions to dismiss filed in the coming weeks, predicted Tristan Snell, the lead prosecutor on the AG office's separate, successful investigation into Trump University."It will get them nowhere," except for "whipping up their own supporters," said Snell, who went on to found"It's certainly not going to fly with the judge," agreed another former NY AG prosecutor, attorney and author Kenneth McCallion.But another former AG's office prosecutor, Armen Morian, thought the bias defense could still have legs as an argument for dismissing the lawsuit. "It's not trivial that she was out there saying, 'I'm going to go after Trump,'" said Morian, who prosecuted complex financial frauds from 2006 to 2019 before founding Morian Law."It's a violation of her oath of office and a violation of his due process rights," Morian said.Defense No. 2: real estate valuations are subjectiveA property's worth is subjective, and Trump's side will certainly argue this in trying to beat James' lawsuit. But you can't simultaneously low-ball (for a tax break) and high-ball (to impress lenders) values for the same property, as James is alleging Trump did for years, the former prosecutors said. "They can't both be true" at the same time, said McCallion. "And you don't have to prove which one was true and which one was false" to show fraud.You also can't pull a valuation out of thin air. "There's subjective, and there's complete fantasyland," noted Snell.Fantasyland, as in Trump's objectively false 2015 claim that his Trump Tower triplex on Manhattan's Fifth Avenue spanned 33,000 square feet. It was actually 11,000 square feet, a whopper of an exaggeration first reported by Forbes.Tripling his square footage let Trump claim his triplex was worth $327 million in collateral for a bank loan.It's an "absurd" appraisal, James told reporters in unveiling the lawsuit, given that at the time, "only one apartment in New York City had ever sold for even $100 million."Morian countered, though, that it's common real estate practice for businesses to seek out and to use very different valuations, depending on whether you're trying to lower your taxes or impress a bank."So long as the valuation is based on some rationale, you are not required to use the same methodology" for every appraisal, Morian argued."The methodology could have been wrong. The methodology could have been optimistic. But that doesn't make a fraudulent statement," he said."You can't say your 3-year-old daughter's version of the Mona Lisa is worth the same as the Mona Lisa," Morian explained. "That would be ridiculous. And you can't say the Mona Lisa is worth $3. But basically, there's a broad range of discretion for how you value assets."Defense No. 3: I just signed whatever they gave meTrump has claimed he signed all the questionable paperwork without really looking at it. "If he wasn't a sophisticated, or purported sophisticated, investor and developer that might be true," said McCallion, who heads McCallion & Associates and is the author of "Profiles in Cowardice in the Trump Era.""But Trump was a very hands-on guy, for better or worse, in the Trump Organization world."It's also safe to assume, Snell said, that Trump was repeatedly asked in his August deposition whether, in fact, he blindly relied on his appraisers and accountants. But instead of answering, Trump repeatedly pleaded the Fifth. Should the suit go to trial, case law allows the judge to infer that Trump was hiding the truth."Answering 'I plead the Fifth' translates out to, 'No, it was me,'" standing behind all the funny math, Snell said.Still, the judge must at least weigh any "I just signed what they gave me" defense, Morian said. "Does that absolve him? Probably not," Morain said. "But it can be a very sound factual defense that the courts would have to consider."Defense No. 4: I never said you should trust me"We have a disclaimer, right on the front," Trump told Hannity of the financial statements James is suing over, the ones she says wildly exaggerated his worth."And it basically says, you know, get your own people. You're at your own risk ... so don't rely on the statement that you're getting," Trump said his disclaimers warn, "because it may not be accurate. It may be way off." Besides, Trump argued, the banks that loaned him money "have the best lawyers in the world." They should know better than to take him at his word."She's trying to defend banks that had unbelievable legal talent," Trump complained.Trump actually has a point, Morian argued."All you have to do is put in a tiny footnote" in a financial statement, putting the bank on notice to double-check the numbers, "and that can be enough" to avoid liability for fuzzy math, he said. "Because it's assumed that the reader of the financial statement is a sophisticated party," Morian added. Besides, "I bet you all these [banks] were applying a 'Trump haircut' — they were assuming he was exaggerating shit by, say, 30 percent, who knows." Defense No. 5: No victim, no harm, no foul"By the way," Trump also told Hannity, "I paid 'em back ... They didn't lose money ... the banks made a lot of money. She's trying to defend banks that got paid off." It's the no victim, no harm, no foul defense.Or, as Trump White House budget director Mitch Mulvaney tweeted Friday, "Seriously, who is the victim here? If the banks thought they had been defrauded, they could sue on their own."Morian sees their point, too."There's a yawning silence" from the banks Trump allegedly tricked into lending to him, he noted.And it's almost like James has filed what's known as a private claim, Morian added — "like the attorney general is suing on behalf of Deutsche Bank. She has no standing to do that.""That will be front and center in the motions to dismiss," agreed McCallion. "It will be her burden to show she has authority to bring this case."But James isn't calling the banks victims.The victims, she tweeted on Wednesday, are those she is sworn to protect, the people of New York state."Trump's crimes are not victimless," she told reporters."When the well-connected and powerful break the law to get more money than they're entitled to, it reduces resources available to working people, small businesses, and taxpayers." Read the original article on Business Insider.....»»

Category: worldSource: nytSep 24th, 2022