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Incoming GOP Congressman Fears Democrats Will Downplay FTX Scandal, Calls for "Thorough" Investigation

Incoming GOP Congressman Fears Democrats Will Downplay FTX Scandal, Calls for 'Thorough' Investigation Authored by John Ransom via The Epoch Times (emphasis ours), A newly-elected GOP representative from New York said that he worries that Democrats will try to downplay potential campaign finance and securities law violations by former FTX CEO Sam Bankman-Fried using a lame-duck session of Congress before the new Congress is sworn in. Republican candidate for New York's 3rd Congressional District George Santos campaigns outside a Stop and Shop store, Saturday, in Glen Cove, N.Y., on Nov. 5, 2022. (AP Photo/Mary Altaffer) Republican George Santos, 34, who won New York’s 3rd Congressional District flipping the seat red, joined his congressional colleagues by calling for a “thorough investigation” when the new GOP Congress takes over next year. The spectacular collapse of FTX, a crypto-currency exchange that is headquartered in the Bahamas, which filed for bankruptcy on Nov. 11 has left around million customers and other investors facing total losses of billions of dollars. Since then, reports have emerged that Alameda Research, a crypto hedge fund established by Bankman-Fried, was trading billions of dollars from FTX accounts without clients’ knowledge. Samuel Bankman-Fried, founder and former CEO of FTX, testifies on Capitol Hill in Washington, on Feb. 9, 2022. (Saul Loeb/AFP via Getty Images) The House Financial Services Committee said last week it plans to hold a hearing in December to investigate the FTX collapse. It said it expects to hear from companies and individuals involved, including Bankman-Fried, FTX, and Alameda Research. Committee Chairwoman Maxine Waters (D-Calif.) said in a statement that the United States needs “legislative action to ensure that digital assets entities cannot operate in the shadows outside of robust federal oversight.” But Santos is not convinced the Democrat-led committee will take robust action. “Waters has signaled that she’s not going to investigate Bankman-Fried and FTX as a class. So I’m a little concerned that the Democrats right now as lame-ducks in Congress, will deflect the issue between now and the start of the new Congress,” Santos, who is attending leadership meetings for the GOP this week, told The Epoch Times. “That’s something I’m very interested in investigating,” he added. Santos, who worked as a financial advisor and has asked for a Financial Services Committee assignment, said that “accountability is mandatory and absolutely necessary.” “Nobody should get away with this with impunity,” he added. Santos made news last week when he called some planned investigations by the House GOP, such probes of the COVID-19 origins, Dr. Anthony Fauci’s handling of the pandemic, and Hunter Biden’s foreign business dealings, “hyperpartisan” issues. When speaking with the Epoch Times, Santos clarified his remarks, saying he was fine with any investigations, but that as a freshman legislator from New York with a background in financial services, he thought he could leave those decisions in the hands of party leadership. “I’m not opposed to investigating. I don’t think you’ll find someone more interested in investigating Hunter Biden and Anthony Fauci, than I am” said Santos. “But I’ll leave that to the senior members of Congress who know how to do those things better than I do,” he added. Santos said that for him these weren’t his main issues, because he felt better versed in financial and economic matters. The incoming congressman confirmed that he has asked for assignments in both the financial services committee and foreign affairs committee. “We don’t have the power to just pass legislation, but we also have the power to hold people accountable,” Santos said of the FTX scandal. Donations to Democrats The FTX matter has taken on added urgency given that Bankman-Fried was the second-largest Democratic donor for the 2021–22 election cycle, donating over $38 million to various Democrat-aligned PACs with another $990,000 going to individual members of Congress. Many of the donations came from foreign addresses in Nassau, capital of the Bahamas, and Hong Kong, according to an analysis by the Epoch Times. According to data by the Federal Election Commission (FEC), of the 182 donations made by Bankman-Fried this election cycle, two donations came with no address, 16 donations came from a Hong Kong address, 68 came from U.S. addresses and 96 came from two addresses in Nassau, Bahamas. It’s legal for American citizens to donate to campaigns from foreign accounts, said attorney John Zakhem, whose practice areas includes federal election law. “If he tells you that he’s a U.S. citizen living in the Bahamas, there’s no prohibition against him making a contribution,” Zakem told The Epoch Times, adding that once a campaign checks that box they only worry about the funds clearing the bank. There is also no prohibition against Bankman-Fried having donated money to those in Congress who regulate the financial services arena. The Washington Free Beacon reported this week, citing FEC records, that Bankman-Fried and his colleagues at FTX donated $300,351 to nine members of the House Financial Services Committee, with “[s]ome of the largest contributions [made] to Democrats on the committee’s Digital Assets Working Group, which worked on regulation of the crypto industry.” An Ethics Issue  It’s this nexus between Bankman-Fried and the committee members that makes Santos concerned that the Democrats might try to downplay the scandal in the upcoming investigation. Read more here... Tyler Durden Thu, 11/24/2022 - 13:20.....»»

Category: smallbizSource: nytNov 24th, 2022

Georgia Probe Expanding; Be First to Indict Trump?

Georgia Probe Expanding; Be First to Indict Trump? His Top Collaborators Subpoenaed, Now Going After “Bigger Fish” Prosecutors Are Getting Closer To Trump WASHINGTON, D.C. (July 7, 2022) – The special grand jury investigating former president Donald Trump and others regarding criminal interference in the 2020 elections has persuaded a judge to issue subpoenas to compel […] Georgia Probe Expanding; Be First to Indict Trump? His Top Collaborators Subpoenaed, Now Going After “Bigger Fish” Prosecutors Are Getting Closer To Trump WASHINGTON, D.C. (July 7, 2022) – The special grand jury investigating former president Donald Trump and others regarding criminal interference in the 2020 elections has persuaded a judge to issue subpoenas to compel the testimony under oath of many close collaborators in the alleged criminal schemes, indicating that prosecutors are getting closer to Trump and to his own criminal involvement, says public interest law professor John Banzhaf. 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 .af-body.af-standards 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 Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. This is still another indication that Fulton County, Georgia DA Fani Willis may be the first (and perhaps only) prosecutor to indict Trump, suggests Banzhaf, whose criminal complaint triggered her investigation, and who also played a role in obtaining special prosecutors for former president Richard Nixon, and finally bringing former Vice President Spiro Agnew to justice. Banzhaf notes that Willis has already officially reported that evidence gathered earlier, including that filed with her office by the law professor, indicated "a reasonable probability that the State of Georgia’s administration of elections in 2020, including the State’s election of the President of the United States, was subject to possible criminal disruptions." Previously Willis had promised that "anyone who violates the law will be prosecuted, no matter what their social status is. No matter what their economics are, no matter what their race or gender is. We are not going to treat anyone differently." She has also announced that the grant jury plans to issue additional subpoenas to people in Trump's "inner circle," and that she hasn't ruled out even issuing one to Trump. Banzhaf has just filed additional evidence and analysis with Willis which might help strengthen what appears to be an already strong criminal case against Trump. [Filing includes - link] The subpoenas, which had to be approved by Judge Robert McBurney because those being compelled to testify reside outside Georgia, include key members of Trump's legal team, including his personal lawyer Rudy Giuliani. [For a copy of the filing, see - link] Other subpoenaed key members of Trump's legal team, who advised him about how to get around the official election results, include John Eastman, Cleta Mitchell, Kenneth Chesebro, and Jenna Ellis. Georgia Subpoenaed Lindsey Graham In an unusual move, U.S. Senator Lindsey Graham was also subpoenaed to testify because he, like Trump, called Georgia's secretary of state and his staff at least twice “about reexamining certain absentee ballots cast in Georgia in order to explore the possibility of a more favorable outcome for former President Donald Trump,” his subpoena alleges. [For a copy of the filing, see - link] Graham's lawyer have announced that they will challenge his subpoena. It's customary, and usually the best practice, to interview and lock in the testimony of "smaller fish" in a criminal investigation before prosecutors work towards those higher ups who also participated, says Banzhaf. With this arrangement, prosecutors can offer immunity, in exchange for damaging testimony - and sometimes also incriminating documents - to people whose culpability is smaller, and also obtain important information to use when they finally force those who culpability is higher ["bigger fish"] to answer questions under oath. So moving on to Giuliani, Graham, and others very close to Trump strongly suggests that the investigation is about to come to an end, possible with an indictment of Trump, predicts Banzhaf. Others agree. For example, Laurence Tribe, professor emeritus of constitutional law at Harvard University, wrote "It wouldn't surprise me for Georgia to become the first jurisdiction to indict a former president on felony charges. And I think the charges will stick." "The most serious prospect of prosecution" that Trump faces is in Fulton County, Georgia, reported the New York Times recently in an Op-Ed by two experienced prosecutors (one Democrat and one Republican); a conclusion reinforcing an earlier 100-page analysis by seven legal experts who concluded that the former president faces a “substantial risk of possible state charges predicated on multiple crimes.” As the two former prosecutors concluded, DA Fani "Willis’s work may present the most serious prospect of prosecution that Mr. Trump and his enablers are facing. . . . She has a demonstrated record of courage and of conviction. She has taken on — and convicted — a politically powerful group, Atlanta’s teachers, as the lead prosecutor in the city’s teacher cheating scandal. And she is playing with a strong hand in this investigation. The evidentiary record of Mr. Trump’s post-election efforts in Georgia is compelling." The piece also noted that, important as congressional investigations are, Willis’s work may present the most serious prospect of prosecution that Trump and his enablers are facing. The recently begun investigation, by a special grand jury, of Trump's telephone call seeking to pressure Secretary of State Brad Raffensperger and others to change Georgia's presidential vote tallies, is especially important at this time because Manhattan District Attorney Alvin Bragg has seemingly folded, and will not pursue criminal charges against Trump, notes Banzhaf. The other remaining major investigation - of whether Trump can be criminally charged with inciting the January 6th riot - presents many legal and other problems, including a major Free Speech constitutional defense, which are not present if Willis proceeds with her promise to punish all those involved in attempting to corruptly change the result of the state's election returns. Indeed, she has a statute at her disposal seemingly meant for this very purpose and fitting these very facts. As the New York Times piece explains: "What’s more, Georgia criminal law is some of the most favorable in the country for getting at Mr. Trump’s alleged misconduct. For example, there is a Georgia law on the books expressly forbidding just what Mr. Trump apparently did in Ms. Willis’s jurisdiction: solicitation of election fraud. Under this statute [ GA Code § 21-2-604], a person commits criminal solicitation of election fraud when he or she intentionally 'solicits, requests, commands, importunes or otherwise attempts to cause' another person to engage in election fraud." Banzhaf's complaint to Willis also charged Trump with violating two additional criminal statutes: GA Code § 21-2-603 - Conspiracy to Commit Election Fraud, and also GA Code § 21-2-597 - Intentional Interference With Performance of Election Duties. The law professor suggests that the investigation by Willis is more likely to return an indictment against Trump than the other major investigation by the Department of Justice which is investigating whether it can and should indict him for his role in allegedly inciting a riot on January 6th. Here are four reasons why. Trump's January Speech FIRST, he says, the evidence in Georgia is clear and uncomplicated, unlike the words of Trump's January speech which many see as ambiguous, and where prosecutors might have to argue from possible inferences. In the Georgia case the language of Trump's telephone call to is very precise in its demands, the tone on the audio recording shows that Trump was not joking or speaking in generalities, others who listened to the call undoubtedly made notes and passed some of them to Trump, and there is ample supplemental evidence of Trump's criminal intent to affect the election results. The fact that Trump, in a position to direct the Department of Justice, specifically mentioned possible criminal penalties if his wishes were not granted, and had others in his camp place similar calls, provides overwhelming evidence of his criminal intent, concludes Banzhaf, who notes that many other criminal law experts, including several very familiar with Georgia law, have publicly announced that they have reached the same conclusion. SECOND, an indictment and trial in Georgia would not raise suspicion - and create very bad "optics" - of an incoming president seeking political retribution, and protection from competition in future elections, by trying to throw his opposition into prison. Incoming presidents jailing their predecessors is what we and others around the world associate with tin-horn dictators in third-world countries with corrupt governments, not the U.S., Banzhaf argues. Here it's even worse, because polls indicate that Trump would be the strongest opponent of Joe Biden or of any other Democrat in the 2024 presidential race. So indicting him, much less putting him behind bars during this election, would be seen by many as a politically motivated prosecution. Also, for many, it would seem unfair to invoke the full resources of the United States government against one person, even a rich and powerful one such as Trump. A prosecution by a county DA would avoid all of these problems and perceptions, notes Banzhaf, so it might even have a greater chance of success, and of avoiding juror nullification at a trial. THIRD, there is no free speech problem, as there would be in a criminal prosecution based upon Trump's speech at the rally. Under the Supreme Court's Brandenburg ruling, the government may criminally punish someone for making a political speech only if it is “directed to inciting or producing IMMINENT lawless action and is LIKELY to incite or produce such action” - in other words, it must create a clear and present danger. [emphasis added] But since considerable time elapsed between Trump's speech and the lawless actions by his followers - enough time, for example, for authorities to have taken preventive steps if seemingly warranted - it's not clear that the lawless action was "imminent" in the same sense of a hypothetical crowd being urged to "hang him now." More importantly, can it be said - much less proven beyond a reasonable doubt - that the statements were "likely" to provoke lawless action? For example, at the time of the speeches, why didn't various public and law enforcement officials issue clear warnings about possible lawlessness if his words were "likely to incite or produce violence"? If they didn't, this suggests that even professionals may not have believed that lawless action was "likely" - not just possible or conceivable. In this regard, hindsight may be questionable, suspect, and not very persuasive, argues Banzhaf. FINALLY, Willis plans to use Georgia's RICO - its Racketeer Influenced and Corrupt Organizations Act - in any prosecution of Trump. Banzhaf, who is familiar with the federal RICO statute since he produced the memo which led to the federal government's successful RICO prosecution against the major tobacco companies, points out that the Georgia RICO statute is even more powerful and far reaching than the federal one. Among other things, it defines racketeering more broadly than the federal law does, takes less to prove a pattern of racketeering activity, and does not always require the existence of an "enterprise" - especially an illegal or criminal enterprise - to constitute racketeering. Indeed, Willis successfully used RICO to prosecute a teacher-cheating case at a school. Also, notes Banzhaf, although RICO requires at least two independent illegal racketeering activities - "predicate acts" - to prove a pattern of corruption by Trump and his alleged co-conspirators, making false statements such as Trump and some of his allies are alleged to have made would more than satisfy Georgia's RICO law. Racketeering, which is a felony in Georgia, can carry penalties of up to 20 years in prison, a hefty fine, and disgorgements of ill-gotten gains. Most felons in Georgia convicted of racketeering offenses do serve time in prison. So, with Manhattan now out of the running, and persons very close to and closely involved with Trump finally being subpoenaed, everyone who feels that Trump must be prosecuted should keep a very sharp eye on Fani Willis in Georgia, counsels the law professor. Updated on Jul 7, 2022, 10:36 am (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; 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: valuewalkJul 7th, 2022

Trump’s “Most Serious Prospect Of Prosecution” Is In Georgia

Trump’s “Most Serious Prospect of Prosecution” is in Georgia – NYTimes; With Manhattan DA Folding, Georgia Case is “Compelling” Trump’s Most Serious Prospect of Prosecution WASHINGTON, D.C. (May 3, 2022) – “The most serious prospect of prosecution” that Trump faces is in Fulton County, Georgia, reports the New York Times in an Op-Ed by two experienced […] Trump’s “Most Serious Prospect of Prosecution” is in Georgia – NYTimes; With Manhattan DA Folding, Georgia Case is “Compelling” Trump’s Most Serious Prospect of Prosecution WASHINGTON, D.C. (May 3, 2022) – “The most serious prospect of prosecution” that Trump faces is in Fulton County, Georgia, reports the New York Times in an Op-Ed by two experienced prosecutors (one Democrat and one Republican); a conclusion reinforcing an earlier 100-page analysis by seven legal experts who concluded that the former president faces a “substantial risk of possible state charges predicated on multiple crimes.” 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 .af-body.af-standards 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 Our Activist Investing Case Study! Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below! (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q1 2022 hedge fund letters, conferences and more As the two former prosecutors concluded, DA Fani "Willis’s work may present the most serious prospect of prosecution that Mr. Trump and his enablers are facing. . . . She has a demonstrated record of courage and of conviction. She has taken on — and convicted — a politically powerful group, Atlanta’s teachers, as the lead prosecutor in the city’s teacher cheating scandal. And she is playing with a strong hand in this investigation. The evidentiary record of Mr. Trump’s postelection efforts in Georgia is compelling." The piece also noted that, important as congressional investigations are, Ms. Willis’s work may present the most serious prospect of prosecution that Mr. Trump and his enablers are facing. The newly begun investigation by a special grand jury, of Trump's telephone call seeking to pressure Secretary of State Brad Raffensperger and others to change Georgia's presidential vote tallies, is especially important at this time because Manhattan District Attorney Alvin Bragg has seemingly folded, and will not pursue criminal charges against Trump, suggests pubic interest law professor John Banzhaf, whose criminal complaint triggered the investigation in Georgia. The other remaining major investigation - of whether Trump can be criminally charged with inciting the January 6th riot - presents many legal and other problems, including a major Free Speech constitutional defense, which are not present if Willis proceeds with her promise to punish all those involved in attempting to corruptly change the result of the state's election returns. Georgia's Criminal Law Indeed, she has a statute at her disposal seemingly meant for this very purpose and fitting these very facts. As the Times piece explains: "What’s more, Georgia criminal law is some of the most favorable in the country for getting at Mr. Trump’s alleged misconduct. For example, there is a Georgia law on the books expressly forbidding just what Mr. Trump apparently did in Ms. Willis’s jurisdiction: solicitation of election fraud. Under this statute [ GA Code § 21-2-604], a person commits criminal solicitation of election fraud when he or she intentionally “solicits, requests, commands, importunes or otherwise attempts to cause” another person to engage in election fraud." Banzhaf's complaint to Willis also charged Trump with violating two additional criminal statutes: GA Code § 21-2-603 - Conspiracy to Commit Election Frau, and also GA Code § 21-2-597 - Intentional Interference With Performance of Election Duties. The law professor suggests that the investigation by Willis is more likely to return an indictment against Trump than the other major investigation by the Department of Justice which is investigating whether it can and should indict him for his role in allegedly inciting a riot on January 6th. Here are four reasons why. FIRST, he says, the evidence in Georgia is clear and uncomplicated, unlike the words of Trump's January speech which many see as ambiguous, and where prosecutors might have to argue from possible inferences. In the Georgia case the language of Trump's telephone call to is very precise in its demands, the tone on the audio recording shows that Trump was not joking or speaking in generalities, others who listened to the call undoubtedly made notes and passed some of them to Trump, and there is ample supplemental evidence of Trump's criminal intent to affect the election results. The fact that Trump, in a position to direct the Department of Justice, specifically mentioned possible criminal penalties if his wishes were not granted, and had others in his camp place similar calls, provides overwhelming evidence of his criminal intent, concludes Banzhaf, who notes that many other criminal law experts, including several very familiar with Georgia law, have publicly announced that they have reached the same conclusion. SECOND, an indictment and trial in Georgia would not raise suspicion - and create very bad "optics" - of an incoming president seeking political retribution, and protection from competition in future elections, by trying to throw his opposition into prison. Incoming presidents jailing their predecessors is what we and others around the world associate with tin-horn dictators in third-world countries with corrupt governments, not the U.S., Banzhaf argues. Here it's even worse, because polls indicate that Trump would clearly be the strongest opponent of Joe Biden or of any other Democrat in the 2024 presidential race. So indicting him, much less putting him behind bars during this election, would be seen by many as a politically motivated prosecution. Also, for many, it would seem unfair to invoke the fully resources of the United States government against one person, even a rich and powerful one such as Trump. A prosecution by a county DA would avoid all of these problems and perceptions, notes Banzhaf, so it might even have a greater chance of success, and of avoiding juror nullification at a trial. THIRD, there is no free speech problem, as there would be in a criminal prosecution based upon Trump's speech at the rally. Under the Supreme Court's Brandenburg ruling, the government may criminalize speech only if it is “directed to inciting or producing IMMINENT lawless action and is LIKELY to incite or produce such action” - in other words, it must create a clear and present danger. [emphasis added] But since considerable time elapsed between Trump's speech and the lawless actions by his followers - enough time, for example, for authorities to take preventive steps - it's not clear that the lawless action was "imminent" in the same sense of a hypothetical crowd being urged to "hang him now." More importantly, can it be said - much less proven beyond a reasonable doubt - that the statements were "likely" to provoke lawless action? For example, at the time of the speeches, why didn't various public and law enforcement officials issue clear warnings about possible lawlessness if his words were "likely to incite or produce violence"? If they didn't, this suggests that professionals may not have believed that lawless action was "likely" - not just possible or conceivable. In this regard, hindsight is questionable, suspect, and not very persuasive. Using RICO FINALLY, Willis plans to use Georgia's RICO - its Racketeer Influenced and Corrupt Organizations Act - in any prosecution of Trump. Banzhaf, who is familiar with the federal RICO statute since he produced the memo which led to the federal government's successful RICO prosecution against the major tobacco companies, points out that the Georgia RICO statute is even more powerful and far reaching than the federal one. Among other things, it defines racketeering more broadly than the federal law does, takes less to prove a pattern of racketeering activity, and does not always require the existence of an "enterprise" - especially an illegal or criminal enterprise - to constitute racketeering. Indeed, Willis has used RICO to prosecute a teacher-cheating case at a school. Also, notes Banzhaf, although RICO requires at least two independent illegal racketeering activities - "predicate acts" - to prove a pattern of corruption by Trump and his alleged co-conspirators, making false statements such as Trump and some of his allies are alleged to have made would more than satisfy Georgia's RICO law. Racketeering, which is a felony in Georgia, can carry penalties of up to 20 years in prison, a hefty fine, and disgorgements of ill-gotten gains. Most felons in Georgia convicted of racketeering offenses do serve time in prison. So, with Manhattan now out of the running, everyone who believes that Trump must be prosecuted should keep a very sharp eye on Fani Willis in Georgia, counsels the law professor. Updated on May 3, 2022, 5:07 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//mixi.media/data/js/95481.js"; 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: valuewalkMay 3rd, 2022

2021 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead

2021 Greatest Hits: The Most Popular Articles Of The Past Year And A Look Ahead One year ago, when looking at the 20 most popular stories of 2020, we said that the year would be a very tough act to follow as there "could not have been more regime shifts, volatility moments, and memes than 2020." And yet despite the exceedingly high bar for 2021, the year did not disappoint and proved to be a successful contender, and if judging by the sheer breadth of narratives, stories, surprises, plot twists and unexpected developments, 2021 was even more memorable and event-filled than 2020. Where does one start? While covid was the story of 2020, the pandemic that emerged out of a (Fauci-funded) genetic lab team in Wuhan, China dominated newsflow, politics and capital markets for the second year in a row. And while the biggest plot twist of 2020 was Biden's victory over Trump in the presidential election (it took the pandemic lockdowns and mail-in ballots to hand the outcome to Biden), largely thanks to Covid, Biden failed to hold to his biggest presidential promise of defeating covid, and not only did he admit in late 2021 that there is "no Federal solution" to covid waving a white flag of surrender less than a year into his presidency, but following the recent emergence of the Xi, pardon Omicron variant, the number of covid cases in the US has just shattered all records. The silver lining is not only that deaths and hospitalizations have failed to follow the number of cases, but that the scaremongering narrative itself is starting to melt in response to growing grassroots discontent with vaccine after vaccine and booster after booster, which by now it is clear, do nothing to contain the pandemic. And now that it is clear that omicron is about as mild as a moderate case of the flu, the hope has finally emerged that this latest strain will finally kill off the pandemic as it becomes the dominant, rapidly-spreading variant, leading to worldwide herd immunity thanks to the immune system's natural response. Yes, it may mean billions less in revenue for Pfizer and Moderna, but it will be a colossal victory for the entire world. The second biggest story of 2021 was undoubtedly the scourge of soaring inflation, which contrary to macrotourist predictions that it would prove "transitory", refused to do so and kept rising, and rising, and rising, until it hit levels not seen since the Volcker galloping inflation days of the 1980s. The only difference of course is that back then, the Fed Funds rate hit 20%. Now it is at 0%, and any attempts to hike aggressively will lead to a horrific market crash, something the Fed knows very well. Whether this was due to supply-chain blockages and a lack of goods and services pushing prices higher, or due to massive stimulus pushing demand for goods - and also prices - higher, or simply the result of a record injection of central bank liquidity into the system, is irrelevant but what does matter is that it got so bad that even Biden, facing a mauling for his Democratic party in next year's midterm elections, freaked out about soaring prices and pushed hard to lower the price of gasoline, ordering releases from the US Strategic Petroleum Reserve and vowing to punish energy companies that dare to make a profit, while ordering Powell to contain the surge in prices even if means the market is hit. Unfortunately for Biden, the market will be hit even as inflation still remain red hot for much of the coming year. And speaking of markets, while 2022 may be a year when the piper finally gets paid, 2021 was yet another blockbuster year for risk assets, largely on the back of the continued global response to the 2020 covid pandemic, when as we wrote last year, we saw "the official arrival of global Helicopter Money, tens of trillions in fiscal and monetary stimulus, an overhaul of the global economy punctuated by an unprecedented explosion in world debt, an Orwellian crackdown on civil liberties by governments everywhere, and ultimately set the scene for what even the World Economic Forum called simply "The Great Reset." Yes, the staggering liquidity injections that started in 2020, continued throughout 2021 and the final tally is that after $3 trillion in emergency liquidity injections in the immediate aftermath of the pandemic to stabilize the world, the Fed injected almost $2 trillion in the subsequent period, of which $1.5 trillion in 2021, a year where economists were "puzzled" why inflation was soaring. This, of course, excludes the tens of trillions of monetary stimulus injected by other central banks as well as the boundless fiscal stimulus that was greenlighted with the launch of helicopter money (i.e., MMT) in 2020. It's also why with inflation running red hot and real rates the lowest they have ever been, everyone was forced to rush into the "safety" of stocks (or stonks as they came to be known among GenZ), and why after last year's torrid stock market returns, the S&P rose another 27% in 2021 and up a staggering 114% from the March 2020 lows, in the process trouncing all previous mega-rallies (including those in 1929, 1938, 1974 and 2009)... ... making this the third consecutive year of double-digit returns. This reminds us of something we said last year: "it's almost as if the world's richest asset owners requested the covid pandemic." A year later, we got confirmation for this rhetorical statement, when we calculated that in the 18 months since the covid pandemic, the richest 1% of US society have seen their net worth increase by over $30 trillion. As a result, the US is now officially a banana republic where the middle 60% of US households by income - a measure economists use as a definition of the middle class - saw their combined assets drop from 26.7% to 26.6% of national wealth as of June, the lowest in Federal Reserve data, while for the first time the super rich had a bigger share, at 27%. Yes, the 1% now own more wealth than the entire US middle class, a definition traditionally reserve for kleptocracies and despotic African banana republics. It wasn't just the rich, however: politicians the world over would benefit from the transition from QE to outright helicopter money and MMT which made the over monetization of deficits widely accepted in the blink of an eye. The common theme here is simple: no matter what happens, capital markets can never again be allowed to drop, regardless of the cost or how much more debt has to be incurred. Indeed, as we look back at the news barrage over the past year, and past decade for that matter, the one thing that becomes especially clear amid the constant din of markets, of politics, of social upheaval and geopolitical strife - and now pandemics -  in fact a world that is so flooded with constant conflicting newsflow and changing storylines that many now say it has become virtually impossible to even try to predict the future, is that despite the people's desire for change, for something original and untried, the world's established forces will not allow it and will fight to preserve the broken status quo at any price - even global coordinated shutdowns - which is perhaps why it always boils down to one thing - capital markets, that bedrock of Western capitalism and the "modern way of life", where control, even if it means central planning the likes of which have not been seen since the days of the USSR, and an upward trajectory must be preserved at all costs, as the alternative is a global, socio-economic collapse. And since it is the daily gyrations of stocks that sway popular moods the interplay between capital markets and politics has never been more profound or more consequential. The more powerful message here is the implicit realization and admission by politicians, not just Trump who had a penchant of tweeting about the S&P every time it rose, but also his peers on both sides of the aisle, that the stock market is now seen as the consummate barometer of one's political achievements and approval. Which is also why capital markets are now, more than ever, a political tool whose purpose is no longer to distribute capital efficiently and discount the future, but to manipulate voter sentiments far more efficiently than any fake Russian election interference attempt ever could. Which brings us back to 2021 and the past decade, which was best summarized by a recent Bill Blain article who said that "the last 10-years has been a story of massive central banking distortion to address the 2008 crisis. Now central banks face the consequences and are trapped. The distortion can’t go uncorrected indefinitely." He is right: the distortion will eventually collapse especially if the Fed follows through with its attempt rate hikes some time in mid-2020, but so far the establishment and the "top 1%" have been successful - perhaps the correct word is lucky - in preserving the value of risk assets: on the back of the Fed's firehose of liquidity the S&P500 returned an impressive 27% in 2021, following a 15.5% return in 2020 and 28.50% in 2019. It did so by staging the greatest rally off all time from the March lows, surpassing all of the 4 greatest rallies off the lows of the past century (1929,1938, 1974, and 2009). Yet this continued can-kicking by the establishment - all of which was made possible by the covid pandemic and lockdowns which served as an all too convenient scapegoat for the unprecedented response that served to propel risk assets (and fiat alternatives such as gold and bitcoin) to all time highs - has come with a price... and an increasingly higher price in fact. As even Bank of America CIO Michael Hartnett admits, Fed's response to the the pandemic "worsened inequality" as the value of financial assets - Wall Street -  relative to economy - Main Street - hit all-time high of 6.3x. And while the Fed was the dynamo that has propelled markets higher ever since the Lehman collapse, last year certainly had its share of breakout moments. Here is a sampling. Gamestop and the emergence of meme stonks and the daytrading apes: In January markets were hypnotized by the massive trading volumes, rolling short squeezes and surging share prices of unremarkable established companies such as consoles retailer GameStop and cinema chain AMC and various other micro and midcap names. What began as a discussion on untapped value at GameStop on Reddit months earlier by Keith Gill, better known as Roaring Kitty, morphed into a hedge fund-orchestrated, crowdsourced effort to squeeze out the short position held by a hedge fund, Melvin Capital. The momentum flooded through the retail market, where daytraders shunned stocks and bought massive out of the money calls, sparking rampant "gamma squeezes" in the process forcing some brokers to curb trading. Robinhood, a popular broker for day traders and Citadel's most lucrative "subsidiary", required a cash injection to withstand the demands placed on it by its clearing house. The company IPOed later in the year only to see its shares collapse as it emerged its business model was disappointing hollow absent constant retail euphoria. Ultimately, the market received a crash course in the power of retail investors on a mission. Ultimately, "retail favorite" stocks ended the year on a subdued note as the trading frenzy from earlier in the year petered out, but despite underperforming the S&P500, retail traders still outperformed hedge funds by more than 100%. Failed seven-year Treasury auction:  Whereas auctions of seven-year US government debt generally spark interest only among specialists, on on February 25 2021, one such typically boring event sparked shockwaves across financial markets, as the weakest demand on record hit prices across the whole spectrum of Treasury bonds. The five-, seven- and 10-year notes all fell sharply in price. Researchers at the Federal Reserve called it a “flash event”; we called it a "catastrophic, tailing" auction, the closest thing the US has had to a failed Trasury auction. The flare-up, as the FT put it, reflects one of the most pressing investor concerns of the year: inflation. At the time, fund managers were just starting to realize that consumer price rises were back with a vengeance — a huge threat to the bond market which still remembers the dire days of the Volcker Fed when inflation was about as high as it is today but the 30Y was trading around 15%. The February auaction also illustrated that the world’s most important market was far less liquid and not as structurally robust as investors had hoped. It was an extreme example of a long-running issue: since the financial crisis the traditional providers of liquidity, a group of 24 Wall Street banks, have pulled back because of higher costs associated with post-2008 capital requirements, while leaving liquidity provision to the Fed. Those banks, in their reduced role, as well as the hedge funds and high-frequency traders that have stepped into their place, have tended to withdraw in moments of market volatility. Needless to say, with the Fed now tapering its record QE, we expect many more such "flash" episodes in the bond market in the year ahead. The arch ego of Archegos: In March 2021 several banks received a brutal reminder that some of family offices, which manage some $6 trillion in wealth of successful billionaires and entrepreneurs and which have minimal reporting requirements, take risks that would make the most serrated hedge fund manager wince, when Bill Hwang’s Archegos Capital Management imploded in spectacular style. As we learned in late March when several high-flying stocks suddenly collapsed, Hwang - a former protege of fabled hedge fund group Tiger Management - had built up a vast pile of leverage using opaque Total Return Swaps with a handful of banks to boost bets on a small number of stocks (the same banks were quite happy to help despite Hwang’s having been barred from US markets in 2013 over allegations of an insider-trading scheme, as he paid generously for the privilege of borrowing the banks' balance sheet). When one of Archegos more recent bets, ViacomCBS, suddenly tumbled it set off a liquidation cascade that left banks including Credit Suisse and Nomura with billions of dollars in losses. Conveniently, as the FT noted, the damage was contained to the banks rather than leaking across financial markets, but the episode sparked a rethink among banks over how to treat these clients and how much leverage to extend. The second coming of cryptos: After hitting an all time high in late 2017 and subsequently slumping into a "crypto winter", cryptocurrencies enjoyed a huge rebound in early 2021 which sent their prices soaring amid fears of galloping inflation (as shown below, and contrary to some financial speculation, the crypto space has traditionally been a hedge either to too much liquidity or a hedge to too much inflation). As a result, Bitcoin rose to a series of new record highs that culminated at just below $62,000, nearly three times higher than their previous all time high. But the smooth ride came to a halt in May when China’s crackdown on the cryptocurrency and its production, or “mining”, sparked the first serious crash of 2021. The price of bitcoin then collapsed as much as 30% on May 19, hitting a low of $30,000 amid a liquidation of levered positions in chaotic trading conditions following a warning from Chinese authorities of tighter curbs ahead. A public acceptance by Tesla chief and crypto cheerleader Elon Musk of the industry’s environmental impact added to the declines. However, as with all previous crypto crashes, this one too proved transitory, and prices resumed their upward trajectory in late September when investors started to price in the launch of futures-based bitcoin exchange traded funds in the US. The launch of these contracts subsequently pushed bitcoin to a new all-time high in early November before prices stumbled again in early December, this time due to a rise in institutional ownership when an overall drop in the market dragged down cryptos as well. That demonstrated the growing linkage between Wall Street and cryptocurrencies, due to the growing sway of large investors in digital markets. China's common prosperity crash: China’s education and tech sectors were one of the perennial Wall Street darlings. Companies such as New Oriental, TAL Education as well as Alibaba and Didi had come to be worth billions of dollars after highly publicized US stock market flotations. So when Beijing effectively outlawed swaths of the country’s for-profit education industry in July 2021, followed by draconian anti-trust regulations on the country's fintech names (where Xi Jinping also meant to teach the country's billionaire class a lesson who is truly in charge), the short-term market impact was brutal. Beijing’s initial measures emerged as part of a wider effort to make education more affordable as part of president Xi Jinping’s drive for "common prosperity" but that quickly raised questions over whether growth prospects across corporate China are countered by the capacity of the government to overhaul entire business models overnight. Sure enough, volatility stemming from the education sector was soon overshadowed by another set of government reforms related to common prosperity, a crackdown on leverage across the real estate sector where the biggest casualty was Evergrande, the world’s most indebted developer. The company, whose boss was not long ago China's 2nd richest man, was engulfed by a liquidity crisis in the summer that eventually resulted in a default in early December. Still, as the FT notes, China continues to draw in huge amounts of foreign capital, pushing the Chinese yuan to end 2021 at the strongest level since May 2018, a major hurdle to China's attempts to kickstart its slowing economy, and surely a precursor to even more monetary easing. Natgas hyperinflation: Natural gas supplanted crude oil as the world’s most important commodity in October and December as prices exploded to unprecedented levels and the world scrambled for scarce supplies amid the developed world's catastrophic transition to "green" energy. The crunch was particularly acute in Europe, which has become increasingly reliant on imports. Futures linked to TTF, the region’s wholesale gas price, hit a record €137 per megawatt hour in early October, rising more than 75%. In Asia, spot liquefied natural gas prices briefly passed the equivalent of more than $320 a barrel of oil in October. (At the time, Brent crude was trading at $80). A number of factors contributed, including rising demand as pandemic restrictions eased, supply disruptions in the LNG market and weather-induced shortfalls in renewable energy. In Europe, this was aggravated by plunging export volumes from Gazprom, Russia’s state-backed monopoly pipeline supplier, amid a bitter political fight over the launch of the Nordstream 2 pipeline. And with delays to the Nord Stream 2 gas pipeline from Russia to Germany, analysts say the European gas market - where storage is only 66% full - a cold snap or supply disruption away from another price spike Turkey's (latest) currency crisis:  As the FT's Jonathan Wheatley writes, Recep Tayyip Erdogan was once a source of strength for the Turkish lira, and in his first five years in power from 2003, the currency rallied from TL1.6 per US dollar to near parity at TL1.2. But those days are long gone, as Erdogan's bizarre fascination with unorthodox economics, namely the theory that lower rates lead to lower inflation also known as "Erdoganomics", has sparked a historic collapse in the: having traded at about TL7 to the dollar in February, it has since fallen beyond TL17, making it the worst performing currency of 2021. The lira’s defining moment in 2021 came on November 18 when the central bank, in spite of soaring inflation, cut its policy rate for the third time since September, at Erdogan’s behest (any central banker in Turkey who disagrees with "Erdoganomics" is promptly fired and replaced with an ideological puppet). The lira recovered some of its losses in late December when Erdogan came up with the "brilliant" idea of erecting the infamous "doom loop" which ties Turkey's balance sheet to its currency. It has worked for now (the lira surged from TL18 against the dollar to TL12, but this particular band aid solution will only last so long). The lira’s problems are not only Erdogan’s doing. A strengthening dollar, rising oil prices, the relentless covid pandemic and weak growth in developing economies have been bad for other emerging market currencies, too, but as long as Erdogan is in charge, shorting the lira remains the best trade entering 2022. While these, and many more, stories provided a diversion from the boring existence of centrally-planned markets, we are confident that the trends observed in recent years will continue: coming years will be marked by even bigger government (because only more government can "fix" problems created by government), higher stock prices and dollar debasement (because only more Fed intervention can "fix" the problems created by the Fed), and a policy flip from monetary and QE to fiscal & MMT, all of which will keep inflation at scorching levels, much to the persistent confusion of economists everywhere. Of course, we said much of this last year as well, but while we got most trends right, we were wrong about one thing: we were confident that China's aggressive roll out of the digital yuan would be a bang - or as we put it "it is very likely that while 2020 was an insane year, it may prove to be just an appetizer to the shockwaves that will be unleashed in 2021 when we see the first stage of the most historic overhaul of the fiat payment system in history" - however it turned out to be a whimper. A big reason for that was that the initial reception of the "revolutionary" currency was nothing short of disastrous, with Chinese admitting they were "not at all excited" about the prospect of yet one more surveillance mechanism for Beijing, because that's really what digital currencies are: a way for central banks everywhere to micromanage and scrutinize every single transaction, allowing the powers that be to demonetize any one person - or whole groups - with the flick of a switch. Then again, while digital money may not have made its triumphant arrival in 2021, we are confident that the launch date has merely been pushed back to 2022 when the rollout of the next monetary revolution is expected to begin in earnest. Here we should again note one thing: in a world undergoing historic transformations, any free press must be throttled and controlled, and over the past year we have seen unprecedented efforts by legacy media and its corporate owners, as well as the new "social media" overlords do everything in their power to stifle independent thought. For us it had been especially "personal" on more than one occasions. Last January, Twitter suspended our account because we dared to challenge the conventional narrative about the source of the Wuhan virus. It was only six months later that Twitter apologized, and set us free, admitting it had made a mistake. Yet barely had twitter readmitted us, when something even more unprecedented happened: for the first time ever (to our knowledge) Google - the world's largest online ad provider and monopoly - demonetized our website not because of any complaints about our writing but because of the contents of our comment section. It then held us hostage until we agreed to implement some prerequisite screening and moderation of the comments section. Google's action was followed by the likes of PayPal, Amazon, and many other financial and ad platforms, who rushed to demonetize and suspend us simply because they disagreed with what we had to say. This was a stark lesson in how quickly an ad-funded business can disintegrate in this world which resembles the dystopia of 1984 more and more each day, and we have since taken measures. One year ago, for the first time in our 13 year history, we launched a paid version of our website, which is entirely ad and moderation free, and offers readers a variety of premium content. It wasn't our intention to make this transformation but unfortunately we know which way the wind is blowing and it is only a matter of time before the gatekeepers of online ad spending block us again. As such, if we are to have any hope in continuing it will come directly from you, our readers. We will keep the free website running for as long as possible, but we are certain that it is only a matter of time before the hammer falls as the censorship bandwagon rolls out much more aggressively in the coming year. That said, whether the story of 2022, and the next decade for that matter, is one of helicopter or digital money, of (hyper)inflation or deflation: what is key, and what we learned in the past decade, is that the status quo will throw anything at the problem to kick the can, it will certainly not let any crisis go to waste... even the deadliest pandemic in over a century. And while many already knew that, the events of 2021 made it clear to a fault that not even a modest market correction can be tolerated going forward. After all, if central banks aim to punish all selling, then the logical outcome is to buy everything, and investors, traders and speculators did just that armed with the clearest backstop guarantee from the Fed, which in the deapths of the covid crash crossed the Rubicon when it formally nationalized the bond market as it started buying both investment grade bonds and junk bond ETFs in the open market. As such it is no longer even a debatable issue if the Fed will buy stocks after the next crash - the only question is when. Meanwhile, for all those lamenting the relentless coverage of politics in a financial blog, why finance appears to have taken a secondary role, and why the political "narrative" has taken a dominant role for financial analysts, the past year showed vividly why that is the case: in a world where markets gyrated, and "rotated" from value stocks to growth and vice versa, purely on speculation of how big the next stimulus out of Washington will be, the narrative over Biden's trillions proved to be one of the biggest market moving events for much of the year. And with the Biden stimulus plan off the table for now, the Fed will find it very difficult to tighten financial conditions, especially if it does so just as the economy is slowing. Here we like to remind readers of one of our favorite charts: every financial crisis is the result of Fed tightening. As for predictions about the future, as the past two years so vividly showed, when it comes to actual surprises and all true "black swans", it won't be what anyone had expected. And so while many themes, both in the political and financial realm, did get some accelerated closure courtesy of China's covid pandemic, dramatic changes in 2021 persisted, and will continue to manifest themselves in often violent and unexpected ways - from the ongoing record polarization in the US political arena, to "populist" upheavals around the developed world, to the gradual transition to a global Universal Basic (i.e., socialized) Income regime, to China's ongoing fight with preserving stability in its gargantuan financial system which is now two and a half times the size of the US. As always, we thank all of our readers for making this website - which has never seen one dollar of outside funding (and despite amusing recurring allegations, has certainly never seen a ruble from the KGB either, although now that the entire Russian hysteria episode is over, those allegations have finally quieted down), and has never spent one dollar on marketing - a small (or not so small) part of your daily routine. Which also brings us to another critical topic: that of fake news, and something we - and others who do not comply with the established narrative - have been accused of. While we find the narrative of fake news laughable, after all every single article in this website is backed by facts and links to outside sources, it is clearly a dangerous development, and a very slippery slope that the entire developed world is pushing for what is, when stripped of fancy jargon, internet censorship under the guise of protecting the average person from "dangerous, fake information." It's also why we are preparing for the next onslaught against independent thought and why we had no choice but to roll out a premium version of this website. In addition to the other themes noted above, we expect the crackdown on free speech to accelerate in the coming year when key midterm elections will be held, especially as the following list of Top 20 articles for 2021 reveals, many of the most popular articles in the past year were precisely those which the conventional media would not touch out of fear of repercussions, which in turn allowed the alternative media to continue to flourish in an orchestrated information vacuum and take significant market share from the established outlets by covering topics which the public relations arm of established media outlets refused to do, in the process earning itself the derogatory "fake news" condemnation. We are grateful that our readers - who hit a new record high in 2021 - have realized it is incumbent upon them to decide what is, and isn't "fake news." * * * And so, before we get into the details of what has now become an annual tradition for the last day of the year, those who wish to jog down memory lane, can refresh our most popular articles for every year during our no longer that brief, almost 11-year existence, starting with 2009 and continuing with 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and 2020. So without further ado, here are the articles that you, our readers, found to be the most engaging, interesting and popular based on the number of hits, during the past year. In 20th spot with 600,000 reads, was an article that touched on one of the most defining features of the market: the reflation theme the sparked a massive rally at the start of the year courtesy of the surprise outcome in the Georgia Senate race, where Democrats ended up wining both seats up for grabs, effectively giving the Dems a majority in both the House and the Senate, where despite the even, 50-seat split, Kamala Harris would cast the winning tie-breaker vote to pursue a historic fiscal stimulus. And sure enough, as we described in "Bitcoin Surges To Record High, Stocks & Bonds Battered As Dems Look Set To Take Both Georgia Senate Seats", with trillions in "stimmies" flooding both the economy and the market, not only did retail traders enjoy unprecedented returns when trading meme "stonks" and forcing short squeezes that crippled numerous hedge funds, but expectations of sharply higher inflation also helped push bitcoin and the entire crypto sector to new all time highs, which in turn legitimized the product across institutional investors and helped it reach a market cap north of $3 trillion.  In 19th spot, over 613,000 readers were thrilled to read at the start of September that "Biden Unveils Most Severe COVID Actions Yet: Mandates Vax For All Federal Workers, Contractors, & Large Private Companies." Of course, just a few weeks later much of Biden's mandate would be struck down in courts, where it is now headed to a decision by SCOTUS, while the constantly shifting "scientific" goal posts mean that just a few months later the latest set of CDC regulations have seen regulators and officials reverse the constant drone of fearmongering and are now even seeking to cut back on the duration of quarantine and other lockdown measures amid a public mood that is growing increasingly hostile to the government response. One of the defining political events of 2021 was the so-called "Jan 6 Insurrection", which the for America's conservatives was blown wildly out of proportion yet which the leftist media and Democrats in Congress have been periodically trying to push to the front pages in hopes of distracting from the growing list of failures of the Obama admin. Yet as we asked back in January, "Why Was Founder Of Far-Left BLM Group Filming Inside Capitol As Police Shot Protester?" No less than 614,000 readers found this question worthy of a response. Since then many more questions have emerged surrounding this event, many of which focus on what role the FBI had in organizing and encouraging this event, including the use of various informants and instigators. For now, a response will have to wait at least until the mid-term elections of 2022 when Republicans are expected to sweep one if not both chambers. Linked to the above, the 17th most read article of 2021 with 617,000 views, was an article we published on the very same day, which detailed that "Armed Protesters Begin To Arrive At State Capitols Around The Nation." At the end of the day, it was much ado about nothing and all protests concluded peacefully and without incident: perhaps the FBI was simply spread too thin? 2021 was a year defined by various waves of the covid pandemic which hammered poor Americans forced to hunker down at home and missing on pay, and crippled countless small mom and pop businesses. And yet, it was also a bonanza for a handful of pharma companies such as Pfizer and Moderna which made billions from the sale of "vaccines" which we now know do little if anything to halt the spread of the virus, and are instead now being pitched as palliatives, preventing a far worse clinical outcome. The same pharma companies also benefited from an unconditional indemnity, which surely would come in useful when the full side-effects of their mRNA-based therapies became apparent. One such condition to emerge was myocarditis among a subset of the vaxxed. And while the vaccines continue to be broadly rolled out across most developed nations, one place that said enough was Sweden. As over 620,000 readers found out in "Sweden Suspends Moderna Shot Indefinitely After Vaxxed Patients Develop Crippling Heart Condition", not every country was willing to use its citizens as experimental guniea pigs. This was enough to make the article the 16th most read on these pages, but perhaps in light of the (lack of) debate over the pros and cons of the covid vaccines, this should have been the most read article this year? Moving on to the 15th most popular article, 628,000 readers were shocked to learn that "Chase Bank Cancels General Mike Flynn's Credit Cards." The action, which was taken by the largest US bank due to "reputational risk" echoed a broad push by tech giants to deplatform and silence dissenting voices by literally freezing them out of the financial system. In the end, following widespread blowback from millions of Americans, JPMorgan reversed, and reactivated Flynn's cards saying the action was made in error, but unfortunately this is just one example of how those in power can lock out any dissenters with the flick of a switch. And while democrats cheer such deplatforming today, the political winds are fickle, and we doubt they will be as excited once they find themselves on the receiving end of such actions. And speaking of censorship and media blackouts, few terms sparked greater response from those in power than the term Ivermectin. Viewed by millions as a cheap, effective alternative to offerings from the pharmaceutical complex, social networks did everything in their power to silence any mention of a drug which the Journal of Antibiotics said in 2017 was an "enigmatic multifaceted ‘wonder’ drug which continues to surprise and exceed expectations." Nowhere was this more obvious than in the discussion of how widespread use of Ivermectin beat Covid in India, the topic of the 14th most popular article of 2021 "India's Ivermectin Blackout" which was read by over 653,000 readers. Unfortunately, while vaccines continue to fail upward and now some countries are now pushing with a 4th, 5th and even 6th vaccine, Ivermectin remains a dirty word. There was more covid coverage in the 13th most popular article of 2021, "Surprise Surprise - Fauci Lied Again": Rand Paul Reacts To Wuhan Bombshell" which was viewed no less than 725,000 times. Paul's reaction came following a report which revealed that Anthony Fauci's NIAID and its parent, the NIH, funded Gain-of-Function research in Wuhan, China, strongly hinting that the emergence of covid was the result of illicit US funding. Not that long ago, Fauci had called Paul a 'liar' for accusing him of funding the risky research, in which viruses are genetically modified or otherwise altered to make them more transmissible to humans. And while we could say that Paul got the last laugh, Fauci still remains Biden's top covid advisor, which may explain why one year after Biden vowed he would shut down the pandemic, the number of new cases just hit a new all time high. One hope we have for 2022 is that people will finally open their eyes... 2021 was not just about covid - soaring prices and relentless inflation were one of the most poignant topics. It got so bad that Biden's approval rating - and that of Democrats in general - tumbled toward the end of the year, putting their mid-term ambitions in jeopardy, as the public mood soured dramatically in response to the explosion in prices. And while one can debate whether it was due to supply-issues, such as the collapse in trans-pacific supply chains and the chronic lack of labor to grow the US infrastructure, or due to roaring demand sparked by trillions in fiscal stimulus, but when the "Big Short" Michael Burry warned that hyperinflation is coming, the people listened, and with over 731,000 reads, the 12th most popular article of 2021 was "Michael Burry Warns Weimar Hyperinflation Is Coming."  Of course, Burry did not say anything we haven't warned about for the past 12 years, but at least he got the people's attention, and even mainstream names such as Twitter founder Jack Dorsey agreed with him, predicting that bitcoin will be what is left after the dollar has collapsed. While hyperinflation may will be the endgame, the question remains: when. For the 11th most read article of 2021, we go back to a topic touched upon moments ago when we addressed the full-blown media campaign seeking to discredit Ivermectin, in this case via the D-grade liberal tabloid Rolling Stone (whose modern incarnation is sadly a pale shadow of the legend that house Hunter S. Thompson's unforgettable dispatches) which published the very definition of fake news when it called Ivermectin a "horse dewormer" and claimed that, according to a hospital employee, people were overdosing on it. Just a few hours later, the article was retracted as we explained in "Rolling Stone Issues 'Update' After Horse Dewormer Hit-Piece Debunked" and over 812,000 readers found out that pretty much everything had been a fabrication. But of course, by then it was too late, and the reputation of Ivermectin as a potential covid cure had been further tarnished, much to the relief of the pharma giants who had a carte blanche to sell their experimental wares. The 10th most popular article of 2021 brings us to another issue that had split America down the middle, namely the story surrounding Kyle Rittenhouse and the full-blown media campaign that declared the teenager guilty, even when eventually proven innocent. Just days before the dramatic acquittal, we learned that "FBI Sat On Bombshell Footage From Kyle Rittenhouse Shooting", which was read by over 822,000 readers. It was unfortunate to learn that once again the scandal-plagued FBI stood at the center of yet another attempt at mass misinformation, and we can only hope that one day this "deep state" agency will be overhauled from its core, or better yet, shut down completely. As for Kyle, he will have the last laugh: according to unconfirmed rumors, his numerous legal settlements with various media outlets will be in the tens if not hundreds of millions of dollars.  And from the great US social schism, we again go back to Covid for the 9th most popular article of 2021, which described the terrifying details of one of the most draconian responses to covid in the entire world: that of Australia. Over 900,000 readers were stunned to read that the "Australian Army Begins Transferring COVID-Positive Cases, Contacts To Quarantine Camps." Alas, the latest surge in Australian cases to nosebleed, record highs merely confirms that this unprecedented government lockdown - including masks and vaccines - is nothing more than an exercise in how far government can treat its population as a herd of sheep without provoking a violent response.  The 8th most popular article of 2021 looks at the market insanity of early 2021 when, at the end of January, we saw some of the most-shorted, "meme" stocks explode higher as the Reddit daytrading horde fixed their sights on a handful of hedge funds and spent billions in stimmies in an attempt to force unprecedented ramps. That was the case with "GME Soars 75% After-Hours, Erases Losses After Liquidity-Constrained Robinhood Lifts Trading Ban", which profiled the daytrading craze that gave an entire generation the feeling that it too could win in these manipulated capital markets. Then again, judging by the waning retail interest, it is possible that the excitement of the daytrading army is fading as rapidly as it first emerged, and that absent more "stimmies" markets will remain the playground of the rich and central banks. Kyle Rittenhouse may soon be a very rich man after the ordeal he went through, but the media's mission of further polarizing US society succeeded, and millions of Americans will never accept that the teenager was innocent. It's also why with just over 1 million reads, the 7th most read article on Zero Hedge this year was that "Portland Rittenhouse Protest Escalates Into Riot." Luckily, this is not a mid-term election year and there were no moneyed interests seeking to prolong this particular riot, unlike what happened in the summer of 2020... and what we are very much afraid will again happen next year when very critical elections are on deck.  With just over 1.03 million views, the 6th most popular post focused on a viral Twitter thread on Friday from Dr Robert Laone, which laid out a disturbing trend; the most-vaccinated countries in the world are experiencing  a surge in COVID-19 cases, while the least-vaccinated countries were not. As we originally discussed in ""This Is Worrying Me Quite A Bit": mRNA Vaccine Inventor Shares Viral Thread Showing COVID Surge In Most-Vaxxed Countries", this trend has only accelerated in recent weeks with the emergence of the Omicron strain. Unfortunately, instead of engaging in a constructive discussion to see why the science keeps failing again and again, Twitter's response was chilling: with just days left in 2021, it suspended the account of Dr. Malone, one of the inventors of mRNA technology. Which brings to mind something Aaron Rogers said: "If science can't be questioned it's not science anymore it's propaganda & that's the truth." In a year that was marked a flurry of domestic fiascoes by the Biden administration, it is easy to forget that the aged president was also responsible for the biggest US foreign policy disaster since Vietnam, when the botched evacuation of Afghanistan made the US laughing stock of the world after 12 US servicemembers were killed. So it's probably not surprising that over 1.1 million readers were stunned to watch what happened next, which we profiled in the 5th most popular post of 2021, where in response to the Afghan trajedy, "Biden Delivers Surreal Press Conference, Vows To Hunt Down Isis, Blames Trump." One person watching the Biden presser was Xi Jinping, who may have once harbored doubts about reclaiming Taiwan but certainly does not any more. The 4th most popular article of 2021 again has to do with with covid, and specifically the increasingly bizarre clinical response to the disease. As we detailed in "Something Really Strange Is Happening At Hospitals All Over America" while emergency rooms were overflowing, it certainly wasn't from covid cases. Even more curiously, one of the primary ailments leading to an onslaught on ERs across the nation was heart-related issues, whether arrhytmia, cardiac incidents or general heart conditions. We hope that one day there will be a candid discussion on this topic, but until then it remains one of the topics seen as taboo by the mainstream media and the deplatforming overlords, so we'll just leave it at that. We previously discussed the anti-Ivermectin narrative that dominated the mainstream press throughout 2021 and the 3rd most popular article of the year may hold clues as to why: in late September, pharma giant Pfizer and one of the two companies to peddle an mRNA based vaccine, announced that it's launching an accelerated Phase 2/3 trial for a COVID prophylactic pill designed to ward off COVID in those may have come in contact with the disease. And, as we described in "Pfizer Launches Final Study For COVID Drug That's Suspiciously Similar To 'Horse Paste'," 1.75 million readers learned that Pfizer's drug shared at least one mechanism of action as Ivermectin - an anti-parasitic used in humans for decades, which functions as a protease inhibitor against Covid-19, which researchers speculate "could be the biophysical basis behind its antiviral efficiency." Surely, this too was just another huge coincidence. In the second most popular article of 2021, almost 2 million readers discovered (to their "shock") that Fauci and the rest of Biden's COVID advisors were proven wrong about "the science" of COVID vaccines yet again. After telling Americans that vaccines offer better protection than natural infection, a new study out of Israel suggested the opposite is true: natural infection offers a much better shield against the delta variant than vaccines, something we profiled in "This Ends The Debate' - Israeli Study Shows Natural Immunity 13x More Effective Than Vaccines At Stopping Delta." We were right about one thing: anyone who dared to suggest that natural immunity was indeed more effective than vaccines was promptly canceled and censored, and all debate almost instantly ended. Since then we have had tens of millions of "breakout" cases where vaccinated people catch covid again, while any discussion why those with natural immunity do much better remains under lock and key. It may come as a surprise to many that the most read article of 2021 was not about covid, or Biden, or inflation, or China, or even the extremely polarized US congress (and/or society), but was about one of the most long-suffering topics on these pages: precious metals and their prices. Yes, back in February the retail mania briefly targeted silver and as millions of reddit daytraders piled in in hopes of squeezing the precious metal higher, the price of silver surged higher only to tumble just as quickly as it has risen as the seller(s) once again proved more powerful than the buyers. We described this in "Silver Futures Soar 8%, Rise Above $29 As Reddit Hordes Pile In", an article which some 2.4 million gold and silver bugs read with hope, only to see their favorite precious metals slump for much of the rest of the year. And yes, the fact that both gold and silver ended the year sharply lower than where they started even though inflation hit the highest level in 40 years, remains one of the great mysteries of 2021. With all that behind us, and as we wave goodbye to another bizarre, exciting, surreal year, what lies in store for 2022, and the next decade? We don't know: as frequent and not so frequent readers are aware, we do not pretend to be able to predict the future and we don't try despite endless allegations that we constantly predict the collapse of civilization: we leave the predicting to the "smartest people in the room" who year after year have been consistently wrong about everything, and never more so than in 2021 (even the Fed admitted it is clueless when Powell said it was time to retire the term "transitory"), which destroyed the reputation of central banks, of economists, of conventional media and the professional "polling" and "strategist" class forever, not to mention all those "scientists" who made a mockery of the "expertise class" with their bungled response to the covid pandemic. We merely observe, find what is unexpected, entertaining, amusing, surprising or grotesque in an increasingly bizarre, sad, and increasingly crazy world, and then just write about it. We do know, however, that after a record $30 trillion in stimulus was conjured out of thin air by the world's central banks and politicians in the past two years, the attempt to reverse this monetary and fiscal firehose in a world addicted to trillions in newly created liquidity now that central banks are freaking out after finally getting ot the inflation they were hoping to create for so long, will end in tears. We are confident, however, that in the end it will be the very final backstoppers of the status quo regime, the central banking emperors of the New Normal, who will eventually be revealed as fully naked. When that happens and what happens after is anyone's guess. But, as we have promised - and delivered - every year for the past 13, we will be there to document every aspect of it. Finally, and as always, we wish all our readers the best of luck in 2022, with much success in trading and every other avenue of life. We bid farewell to 2021 with our traditional and unwavering year-end promise: Zero Hedge will be there each and every day - usually with a cynical smile - helping readers expose, unravel and comprehend the fallacy, fiction, fraud and farce that defines every aspect of our increasingly broken system. Tyler Durden Sun, 01/02/2022 - 03:44.....»»

Category: personnelSource: nytJan 2nd, 2022

"I really tried": Huma Abedin on her relationship with Anthony Weiner, her personal life, and how Hillary Clinton saved her

In an interview, Abedin shares her faith and therapy helped her through her ex-husband's sexting scandal. Huma Abedin poses for a portrait at a park in New York to promote her memoir "Both/And: A Life in Many Worlds" on Wednesday, Oct. 27, 2021. Christopher Smith/Invision/AP Huma Abedin, longtime aide to Hillary Clinton, spoke with Insider about her new memoir. The book details her decades-long career serving Clinton and her marriage to former New York congressman Anthony Weiner. "I don't think I have any regrets," Abedin told Insider. In her new memoir, Huma Abedin writes that her longtime boss Hillary Clinton declared "without hesitation" that she'll never run for president again after she lost the 2008 Democratic primaries.Clinton did run, of course, in 2016, making history as the first female candidate to win a major party's nomination, before narrowly losing to her Republican rival Donald Trump.But Abedin told Insider in a new interview that she doesn't believe Clinton will launch another bid for the White House."There's nobody more than Hillary Clinton who knows how hard it is for a woman to be an executive in this country, forget the highest office in the land," Abedin, 45, said.Abedin pointed to the female Democratic candidates (an all-time record of six) who ran in 2020 but fell short. "It showed we're not ready for a woman executive," she said. "It's really hard. Actually, it's just proven how extraordinary my boss was."Her admiration for Clinton is on full display in her first book, "Both/And: A Life in Many Worlds," released Tuesday. Abedin spoke with Insider about her new memoir, in which she details everything from her decades-long career with Clinton to her marriage with disgraced former New York congressman Anthony Weiner.'I really tried' with WeinerAbedin landed her first gig at the White House as an intern for then-first lady Clinton in 1996, a year after fellow intern Monica Lewinsky got her job.When President Bill Clinton's affair with Lewinsky went public, Abedin witnessed the toll the scandal took on her boss, who ultimately decided to remain loyal to her husband."Everything I saw on TV as it related to impeachment, it felt like an alternative universe. That what I was doing was hard work, this horrible news breaks, and my goal was to protect her," Abedin said of Clinton. Former Congressman Anthony Weiner and longtime Clinton aide Huma Abedin. John Moore/Getty Images Fast forward to 2011 and Abedin's husband Weiner, then-a rising Democratic New York representative, created national headlines for sending explicit photos to multiple women. Abedin chose to stay with him and was met with public scrutiny."To me, it's total apples and oranges," Abedin said about comparisons between Clinton's marriage and hers. "When it happens to you, it's different.""I was deeply in love with my husband, not only did we have a great life, I thought we had a perfect life, and I was carrying his child," she continued.After the scandal ended his congressional career, Weiner started therapy and returned to politics with a New York City mayoral bid in 2013. But that soon crumbled when more sexually explicit photos, sent under his alias "Carlos Danger," surfaced.Abedin was criticized yet again for sticking by Weiner. This time, she thought her decision might have cost her her job and her social circle. "I'm not sure I've actually written this, but I've shared in other instances that, to some extent, both Hillary Clinton and Anna Wintour kind of saved me," Abedin said."If I had been let go in 2013, it would have been enormously difficult for me to rebalance myself, to figure out how I was going to pick up the pieces and move on professionally," Abedin said. "[Clinton] knew that. It was one of the reasons she did not let me go."While Abedin lost some friends in the fallout, she credits Wintour for introducing her to a "whole new community of people" who would go on to have her back. Wintour, the top Vogue editor, honored the pair's longtime friendship in a book party hosted at her home this week. In this Oct. 28, 2016 file photo, Democratic presidential candidate Hillary Clinton speaks with senior aide Huma Abedin aboard her campaign plane at Westchester County Airport in White Plains. AP Photo/Andrew Harnik The firestorm reignited in September 2016, when the FBI launched an investigation into Weiner after a Daily Mail report claimed he had sexted a minor. As part of its probe, the FBI seized Weiner's laptop, and found emails exchanged between Abedin and Clinton.The discovery triggered FBI Director James Comey to reopen an investigation into Clinton's emails just 11 days before the election. Comey closed the emails investigation right before Election Day, concluding that Clinton hadn't broken any laws. Abedin initially blamed herself and Weiner for Clinton's defeat, but she writes in her book that the fault rests with Comey. Weiner admitted and pleaded guilty in 2017 to sending explicit material to a 15-year-old. He was sentenced to 21 months in prison."I know many people have judgments, and certainly, many women have judgments. But I don't think anyone will have judgment on the fact that I tried. I really tried," Abedin told Insider.Weiner was released from federal custody in 2019, and though they aren't together, he is "always going to be the father of my child," Abedin said. "So we're always going to have a partnership."'One of the most difficult' periods of her lifeThe lingering trauma from her marriage, coupled with the 2016 election loss, plunged Abedin into a dark period, which she describes in her book as "one of the most difficult" of her life. For a brief instance in 2019, she contemplated "stepping off a subway platform."The fleeting suicidal thought startled Abedin, who sought therapy and turned to her Muslim faith for strength."'Wait, I need help,'" Abedin said she told herself at the time. "It was a combination of faith, but more than that, I got professional mental help." Huma Abedin, a senior aide for former Democratic presidential candidate Hillary Clinton walks to Clinton's campaign plane at Westchester County Airport in White Plains, N.Y., Tuesday, Sept. 27, 2016. (AP Photo/Matt Rourke An unwanted kiss from a senator that she kept secret from everyone, including ClintonOne bombshell Abedin dropped in her book takes place about 15 years ago, when a male senator invited her to his home and gave her an unwanted kiss.She kept the story secret for years, even from her own boss. The memory was "erased" from her mind until in 2018, when news hit about a professor named Christine Blasey Ford who was accused of "conveniently" remembering that then-Judge Brett Kavanaugh allegedly assaulted her decades ago, Abedin writes in her book.Abedin revealed to Insider that Clinton only learned of the incident when she read "the early version" of her book.Abedin and the senator, who she doesn't name, managed to "rebalance" their relationship, and there were no further inappropriate encounters, she said.When asked if she has a response to current lawmakers who say he should be held accountable, Abedin did not comment."The main reason I shared the story is I chose to tell my full truth in this book and I have done that," Abedin said.'I don't think I have any regrets'Abedin calls herself a workaholic in the book, regularly choosing her career over her personal life. When her uncle died, for example, no one in her family thought to tell her, Abedin said."I always picked work," she said. "I had to learn the lesson the hard way.""I don't think I have any regrets," Abedin added, "but I do think balance is important and I'm much better about it now." Senior aide Huma Abedin, right, stands nearby as Democratic presidential candidate Hillary Clinton, left, speaks to members of the media after a rally at the Zembo Shrine in Harrisburg, Pa., Tuesday, Oct. 4, 2016. AP Photo/Andrew Harnik But one moment from a couple years ago has stayed with her. An "attractive" and "very high-profile" man asked her out several times, but she rejected him, partly because he was famous and because she was still recovering from her past marriage, Abedin told Insider."I was still in such trauma. I was like, 'I can't. I can't. All I want is for the photographers to go,'" she said. "Normally, I would have said yes right away. And I said no.""Can I tell you, I really regret it. Now in 2021, I wish the 2019 version of me had said: 'Yes, you deserve this. You deserve a successful, brilliant, handsome, smart man,'" she said, adding that this man is now "very off the market."Abedin, who says she's "old-fashioned" in her dating life, told Insider she's not seeing anyone right now. "I really am that person who waits for somebody else to ask them," she said.But Abedin is marking a new chapter of her life, which she calls "my year of saying yes.""I stole this from Shonda Rhimes," Abedin said. "I'm open to new ideas and opportunities. What those are, are not clear to me yet."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 4th, 2021

Stocks Have "Considerably More Downside" & Commodities Have A "Brand New Tailwind" In 2023

Stocks Have "Considerably More Downside" & Commodities Have A "Brand New Tailwind" In 2023 Submitted by QTR's Fringe Finance Friend of Fringe Finance Mark B. Spiegel of Stanphyl Capital released his most recent investor letter last week, with his updated take on the market’s valuation and Tesla. Mark is a recurring guest on my podcast (and will be coming back on again soon hopefully) and definitely one of Wall Street’s iconoclasts. I read every letter he publishes and only recently thought it would be a great idea to share them with my readers. Like many of my friends/guests, he’s the type of voice that gets little coverage in the mainstream media, which, in my opinion, makes him someone worth listening to twice as closely. Photo: Real Vision Mark was kind enough to allow me to share his thoughts from his November 2022 investor letter. Mark’s Thoughts On Macro Despite the stock market’s recent rally (we were up a hell of a lot more this month before today!) we  continue to carry a large SPY short position, as I believe the major indexes—although not all individual  stocks—have considerably more downside to go, the inevitable hangover from the biggest asset bubble in U.S. history. For far too long, the Fed printed $120 billion a month and held short-term rates at zero while the government concurrently ran a record fiscal deficit. Now, thanks to the massive inflationary  hangover from those idiotic policies (November’s “not as bad as feared” data not withstanding), the Fed is reducing its balance sheet and raising interest rates, and although the current rate of high-7% year over-year inflation is unsustainable, the eventual end of China’s “zero-Covid policy” and its November reversal on bailing out its real estate industry combined with the end of Biden’s SPR drawdowns will give commodity prices a brand new tailwind in 2023. Longer term, the war on fossil fuel, expensive “onshoring,” fewer available workers and perpetual government budget deficits make a new baseline of  around 4% inflation (double the Fed’s 2% target) likely.  Even a 2023 Fed interest rate “pause” at 4.75% (and remember, a “pause” is not a “pivot”!) would,  combined with $90 billion a month in ongoing QT, make current stock market valuations unsustainable,  as stocks are still expensive. [QTR’s note: This echos Kenny Polcari’s sentiments & my sentiments of recent.] According to Standard & Poor’s, with 97% of companies having reported, Q3 S&P 500 GAAP earnings came in at around $44.79, which annualizes to $179.16. (And these were the sixth  highest quarterly earnings in history; i.e., they were not “trough.”) A 16x multiple on that—generous for  a rising rate, recessionary (or even just slow-growth) environment—would bring the S&P 500 down to 2867 vs. November’s close of 4080.11. And remember, just as in bull markets, PE multiples usually overshoot to the upside, in bear markets they often overshoot to the downside. A bottom formed at a  considerably lower multiple is not unfathomable.  Additionally, we can see from CurrentMarketValuation.com that the U.S. stock market’s valuation as a  percentage of GDP (the so-called “Buffett Indicator”) is still very high, and thus valuations have a long way  to go before reaching “normalcy”: Regarding sentiment, we can see from Ed Yardeni that in the Investors Intelligence poll the highest the “bear percentage” got so far in the current market was only around 45% (in the most recent poll it was just 31.5%), yet there were multiple times during the 1980s, 1990s and 2008 that it climbed much higher:  Also, we can see from this old academic paper that during the grinding bear market of 1973 to 1975, when  the S&P 500’s GAAP PE multiple dropped from 18x to 8x, the bears in the Investors Intelligence poll climbed to around 75% and went over 80% during the bear markets of the 1960s. So if you think that based on this bear market’s sentiment we’ve “seen the bottom,” I wish you luck! Meanwhile, interest costs on the Federal debt are already set to grow massively. Does anyone seriously think this Fed has the stomach to face the political firestorm of Congress having to slash Medicare, the  defense budget, etc. in order to pay the even higher interest cost that would be created by upping those rates to a level commensurate with crushing even just 4% inflation? Powell doesn’t have the guts for that, nor does anyone else in Washington; thus, this Fed will likely be behind the inflation curve for at least a  decade. And that’s why we remain long gold (via the GLD ETF).  Mark On His Fund’s Positions (Positions May Change At Any Time) We continue to own automaker Stellantis (STLA), which has a great balance sheet with plenty of net cash (and a 7% dividend yield!) and which—at a current price of $15.62/share—sells for only around 3x 2022 earnings estimates of $5.26/share. I believe Jeep alone (which in September announced a full  electrification strategy) could be worth more than what we paid for the entire company, which also  includes Dodge, Chrysler, Ram, Fiat, Citroen, Peugeot, Opel, Alfa Romeo, Vauxhall, Lancia and Maserati. And if current EV sales are your interest, Stellantis already has Europe’s best-selling mass-market model.  We continue to own Volkswagen AG (via its VWAPY ADR, which represent “preference shares” that are  identical to “ordinary” shares except they lack voting rights and thus sell at a discount). VW currently sells  for around 4.2x estimated 2022 earnings due to a combination of “recession fears” and short-term issues obtaining energy (until either the Ukraine war is over or alternative supplies are in place), but it controls a massive number of terrific brands including Porsche, of which it recently IPO’d a small percentage at  a $73 billion valuation, thus valuing the rest of the company at only around $10 billion; I believe Audi  alone is worth 4x that! And a Lamborghini IPO may be next. Additionally, VW will pay a January special  dividend of around $1.90 per VWAPY share in proceeds from Porsche’s IPO, and the regular yield is  currently over 5%! Meanwhile VW Group’s EVs (several of which are more technologically advanced than  any Tesla) combine to heavily outsell Tesla in Europe and by 2025 may outsell Tesla worldwide. We continue to own General Motors (GM), which currently sells for only around 6.5x the $6.26/share  midpoint of its 2022 GAAP EPS guidance (which was reiterated in November). GM is doing all the right  things in electric cars, autonomous driving (via its Cruise ownership) and software, yet it’s cheap because,  as with other established automakers, many investors have (for now) forsaken it in favor of “electric car  pure-plays,” a sector which has thus become the largest valuation bubble in history. Get 50% off: If you enjoy this article, would like to support my work, I would love to have you as a subscriber and can offer you 50% off for life: Get 50% off forever And regarding  “autonomy,” keep in mind that unlike Tesla, which sells a LiDAR-less fraud to rubes, Cruise is already  running a fleet of fully autonomous cars in San Francisco (and soon Phoenix and Austin); you can see many  videos of this on its YouTube channel. GM will also benefit more than any other manufacturer from the  proposed new EV tax credit, as it will soon have the largest variety of North American-made (a requirement of the credit) EV models fitting within the new price restrictions. Additionally, in August the  company reinstituted a modest dividend. I thus consider these positions (Stellantis, GM and VW) to be both “freestanding value stock buys” and “relative-value paired trades” against our Tesla short.One oft heard knock against “the autos” is a belief  that their recent earnings have been “peak,” but keep in mind that due to supply chain issues they all  sold around 20% fewer cars than they otherwise could have. Thus, I believe those recent earnings are more like “strong midcycle” and should likely have around a 10x run-rate PE, not the current 3x to 6x. Also, thanks to those same supply chain issues they’re much lighter on inventory than they’d normally  be heading into a recession. Therefore, I believe these stocks have considerable upside from here.  We continue to own Fuel Tech Inc. (FTEK), a seller of air and water pollution control technologies, which in November reported a solid Q2, with revenue up 6.1% year-over-year (although at a lower gross margin),  .01/share in GAAP earnings and around $600,000 in free cash flow. At a current price of $1.24/share with  30.3 million shares outstanding and $33.9 million in cash and Treasuries (and no debt), this is a 43% gross  margin business selling for an enterprise value of only around 0.14x 26.4 million in TTM revenue. This is  the kind of company that will either ignite growth and its stock will take off (its new “Dissolved Gas  Infusion” water treatment technology is a potential medium-term catalyst for that), or it’s so cheap that  it will make for a good strategic acquisition target, as removing the costs of being an independent public  company could make it instantly earnings-accretive while allowing the buyer to acquire a nice chunk of  revenue very cheaply. In short, I think it’s a good “value stock” in which to park some money and see what  happens.  And now, Tesla…  Despite big, margin-slashing price cuts in both China and Europe, Tesla delivery wait times worldwide  have declined substantially, down to just one week in China while in the U.S. (where Musk’s Twitter boondoggle is rapidly destroying the brand) Tesla is choking on Model 3 inventory and offers December Model Y delivery, while Europe’s backlog is expected to be completely gone by year-end. This means Tesla’s production capacity now outstrips its rate of incoming orders despite the new German and Texas  factories producing at only around 10% of capacity!  Meanwhile, combined deliveries for the last two quarters (Q2 & Q3 2022) were lower than those for  the previous two quarters (Q4 2021 & Q1 2022). As Tesla slashes prices it will undoubtedly sell more  cars (I expect Q4 deliveries to be in the range of around 400,000 vs. previous quarters in the 300,000s,  thanks to the cuts plus a rush to beat year-end expiring EV incentives in China, Germany and France), but any other car company can slash prices and do the same thing. (Welcome to the auto business,  which currently sells for around 5x earnings!) Tesla’s apparent market saturation rate of around 1.6 million cars/year worldwide (at least until it slashes prices yet again!) is massively below its current factories’ production capacity, much less the bulls’ absurd expectations of adding a new factory every six months for the next ten years! For some valuation perspective, BMW sells around 2 million cars a year with very high margins  (including the best electric SUV now on the market (the new iX), the best luxury EV( the new i7), and  among the best small luxury EVs (the new i4), and has a market cap of around $59 billion. If Tesla grew annual deliveries to the size of BMW’s and had BMW-level margins, at BMW's current market cap it  would sell for less than $19/share vs. this month's closing price in the $194s! (Remember: Tesla now  has 3.16 billion shares outstanding!)  Meanwhile, Elon Musk remains the most vile person ever to head a large-cap U.S. public company, and  we remain short Tesla, the biggest bubble-stock in modern market history, because:  1) It has a sliding share of the world’s EV market and a share of the overall auto market that’s less than 2%, yet a market cap almost as big the next 6 largest automakers (by market cap) combined.  2) It has no “moat” of any kind; i.e., nothing meaningfully proprietary in terms of its electric  car technology (which has now been equaled or surpassed by numerous competitors) and its previously proprietary Superchargers are being opened to everyone), while existing  automakers—unlike Tesla—have a decades-long “experience moat” of knowing how to  mass-produce, distribute and service high-quality cars consistently and profitably.  3) Excluding working capital benefits and sunsetting emission credit sales Tesla generates only  minimal free cash flow.  4) Growth in sequential demand for Tesla’s cars is at a crawl relative to expectations. 5) Elon Musk is a pathological liar.  In October Tesla claimed that it had Q3 GAAP earnings of around .87/share excluding sunsetting emission  credit sales. If you believe that after viewing this chart (courtesy of Twitter user @Keubiko), I have a bridge to sell you in Brooklyn: Orange is revenue, green is operating expenses Furthermore, Tesla’s minimal depreciation of its new factories appears fraudulently low, as does its  warranty reserve.  Even if you believe Tesla’s clearly nonsensical earnings number, it annualizes to only $3.48/share, which  based on November’s closing price of $194.70 = a run-rate PE ratio of around 56 for a now slow-growing (or growing-but-margin-slashing) car company in an industry with a current average PE of around 5.  Meanwhile, Tesla has objectively lost its “product edge,” with many competing cars now offering comparable or better real-world range, better interiors, similar or faster charging speeds and much better quality. (Tesla ranks near the bottom of Consumer Reports’ reliability survey while British consumer  organization Which? found it to be one of the least reliable cars in existence.) Thus, due to competitors’ temporary production constraints, waiting times are now longer for many of Tesla’s direct EV competitors than they are for a Tesla.   In fact, Tesla is likely now the second, third or fourth choice for many EV buyers, and only maintains its  volume lead though a short-lived edge in production capacity that will disappear over the next 12 to 36 months as competitors rapidly increase the ability to produce their superior EVs. Tesla’s poorly-built  Model Y faces current (or imminent) competition from the much better made (and often just better)  electric Hyundai Ioniq 5, Kia EV6, Ford Mustang Mach E, Cadillac Lyriq, Nissan Ariya, Audi Q4 e-tron, BMW  iX3, Mercedes EQB, Volvo XC40 Recharge, Chevrolet Blazer EV & $30,000 Equinox EV and Polestar 3. And  Tesla’s Model 3 now has terrific direct “sedan competition” from Volvo’s beautiful Polestar 2, the great  new BMW i4, the upcoming Hyundai Ioniq 6 and Volkswagen Aero, and multiple local competitors in  China.  And in the high-end electric car segment worldwide the Porsche Taycan (the base model of which is now  considerably less expensive than Tesla’s Model S) outsells the Model S, while the spectacular new BMW  i7, Mercedes EQS, Audi e-Tron GT and Lucid Air make it look like a fast Yugo, and the extremely well  reviewed new BMW iX, Mercedes EQS SUV and Audi Q8 eTron (as well as multiple new Chinese models)  do the same to the Model X.  Indeed, for years I’ve said “Tesla is Blackberry”—the maker of a first-generation version of a product  that—once the market was proven—would be supplanted into niche obscurity by newer, better versions;  now I can provide a much more recent analogy: Tesla is Netflix. For years Netflix had an absurd valuation  based on its pioneering position in streaming media, but once it proved that such a market existed myriad  competitors swarmed all over it, and this year the stock collapsed when we learned that not only is Netflix  no longer in “hypergrowth” mode but for the first time since 2011 (when it transitioned from physical  DVDs) it actually lost subscribers. I believe Musk knows that Tesla is “the next Netflix” (hence his recent  “Twitter buying distraction”), with VW, Hyundai/Kia, Ford, GM, Stellantis, BMW, Mercedes, BYD & other  Chinese competitors and, in a few years, Toyota & Honda, being the Disney, HBO Max, Amazon Prime, Peacock, Hulu, Paramount +, etc., of the electric car market, stealing Tesla’s share and eventually  pounding its stock price down 90% or so from today’s, into the valuation of “just another car company.” Despite this obvious “writing on the wall,” many Tesla bulls sincerely believe that ten years from now the  company will be twice the size of Volkswagen or Toyota, thereby selling around 20 million cars a year (up  from the anticipated Q4 annualized run-rate of around 1.6 million); in fact in May Musk himself even  raised this as a possibility. Setting aside the absurdity of selling that many cars into the limited market of Tesla’s high price points, the “logistical absurdity” of selling 20 million cars/year in ten years means that  in addition to 2.4 million cars a year of sold-out existing claimed production capacity (once the German  and Texas factories are fully operational), Tesla would have to add 35 more brand new 500,000 car/year  factories with sold out production; i.e., a new factory approximately every single quarter for the next ten years! Only a Teslemming could be dumb enough to believe this!  Meanwhile, in June the NHTSA announced that its investigation of Tesla’s deadly Autopilot has  expanded into “an engineering analysis,” the last required step before (finally!) demanding a full recall,  and in October it was reported that this deadly scam is being investigated by both the SEC and the DOJ.  The refund liability potential for Tesla for this is in the billions of dollars, and possibly even the tens of  billions if a class action lawsuit proves that the cars involved were purchased solely due to the  (fallacious) promise of “full self-driving.” And, of course, there will be a massive “valuation reappraisal”  for Tesla’s stock as the world wakes up to the fact that Tesla’s so-called “autonomy technology” is deadly, trailing-edge garbage. In fact, the NHTSA has reported a slew of Autopilot-related deaths just  since last year. For all Tesla deaths cited in the media—which is likely only a small fraction of those that  have occurred—see TeslaDeaths.com. And Tesla has sold this trashy software for over six years now:  …and still promotes it on its website via a completely fraudulent video! Another favorite Tesla hype story has been built around so-called “proprietary battery technology.” In fact  though, Tesla has nothing proprietary there—it doesn’t make them, it buys them from Panasonic, CATL and LG, and it’s the biggest liar in the industry regarding the real-world range of its cars. And if new-format 4680 cells enter the market some time in 2024 (as is now expected), even if Tesla makes some of its own,  other manufacturers will gladly sell them to anyone, and BMW has already announced it will buy them  from CATL and EVE.  And oh, the joke of a “pickup truck” Tesla previewed in 2019 (and still hasn’t shown in production-ready  form) won’t be much of “growth engine” either, as by the time it’s in mass-production in 2024 it will enter  a dogfight of a market; in fact, Ford’s terrific 2022 all-electric F-150 Lightning now has over 200,000 retail  reservations (plus many more fleet reservations), GM has introduced its fantastic 2023 electric Silverado which already has nearly 200,000 reservations, Rivian’s pick-up has gotten excellent early reviews, and  Ram will also be out with a great truck in 2024. About Mark Spiegel Mark manages Stanphyl Capital, established in 2011, a deep-value equity & macro long-short investing fund based in New York City. Mark can be reached at mark@stanphylcap.com or at @StanphylCap on Twitter. Disclaimer: This letter was not reproduced in full. I may own Tesla call and put options and may be long/short TSLA and or any names mentioned. You should assume I have positions in any names I publish about. I have no position in Mark’s funds. Mark is a subscriber to Fringe Finance via a comped subscription I gave him and has been on my podcast. The excerpts from Mark’s letter, above, shall not be construed as an offer to sell, or the solicitation of an offer to sell, any securities or services. Any such offering may only be made at the time a qualified investor receives formal materials describing an offering plus related subscription documentation. There is no guarantee the Fund’s investment strategy will be successful. Investing involves risk, and an investment in the Fund could lose money. Tyler Durden Sun, 12/04/2022 - 15:40.....»»

Category: blogSource: zerohedge9 hr. 44 min. ago

Futures Reverse Losses, Hit Session HIghs Alongside Oil Despite China Covid Curbs

Futures Reverse Losses, Hit Session HIghs Alongside Oil Despite China Covid Curbs After trading in the red for much of the overnight session, US futures inched higher shortly after the European open after a volatile session in Asia marked by rising Covid cases in China, while a Fed president turned dovish and showed openness to slowing the path of rate hikes. Futures on the S&P 500 traded near session highs, up 0.4% to 3,972 by 8:00 a.m. in New York, while Nasdaq 100 futures gained 0.1% after struggling for direction.  Stocks in Hong Kong and Mainland China slipped as China’s daily virus infections climbed to near the highest on record, although a bounce in Japanese stocks pushed overall Asian markets higher. Europe’s Stoxx 600 Index rose, led by energy shares. The dollar weakened against all major currencies and Treasury yields declined. Crude oil prices rose after Saudi Arabia pushed back against reports of a potential OPEC+ production increase. Bitcoin's gradual, methodic slide continued interrupted by occasional bouts of ungradual, unmethodic panic liquidations. In premarket trading, Zoom Video dropped after the firm reported its slowest quarterly sales growth on record and trimmed full-year revenue forecasts. Chinese stocks listed in US fell after a ramp-up in Covid restrictions to curb a spike in virus cases across China. Pinduoduo -2.4%, Trip.com -0.6%, Bilibili -2.8%, Nio -2.5%, Li Auto -3.9%. Here are some other notable premarket movers: Blackstone shares fall 2.5% in US premarket trading as Credit Suisse cut its rating to underperform from neutral and said that it is awaiting a better entry point for US alternative asset manager stocks. Alibaba shares pare losses in US premarket trading after Reuters reported that Chinese authorities are set to hand down a fine of over $1 billion for Jack Ma’s Ant Group, an event market watchers see as an end to Beijing’s prolonged investigation into the fintech firm and a first step to restarting its IPO. GameStop shares swing between slight gains and losses in US premarket trading, following a Bloomberg report that billionaire investor Carl Icahn was said to hold a large short position in the video-game retailer. Dell Technologies stock slipped 2% in postmarket trading on Monday as the computer company’s revenue forecasts for the current quarter missed estimates, as economic uncertainty begins to affect information technology customers. Keep an eye on Amazon.com after its price target was cut at Piper Sandler as AWS revenue decelerates along with an industry-wide slowdown at major cloud computing firms. The brokerage notes, however, that while “industry growth ticks down, AWS leadership remains.” Watch Activision Blizzard as Baird raised the recommendation on the stock to outperform from neutral, while downgrading Airbnb, Carvana and Vroom all to neutral since these companies are exposed to pullbacks in discretionary “high ticket” purchases. Keep an eye on software stocks, including Workday and Coupa Software as Morgan Stanley cuts price targets across the sector, with analyst saying that consensus estimates for 2023 are likely too high while customer IT budgets are set to be reduced. "Market sentiment remains toneless for the second trading day of the week as most investors are still struggling to assess the short- to mid-term outlook for risky assets," said Pierre Veyret, technical analyst at ActivTrades. “Despite the market starting to price in a potential slowing in rate hikes, some Fed officials have moved to temper these anticipations by reiterating their will to tackle inflation, and that this goal was far from being achieved.” Fed officials continued to highlight the need to curb inflation but hinted that a slower pace of hikes could be possible. On Monday, San Fran Fed President Mary Daly said officials need to be mindful of the lags with which monetary policy works, while repeating that she sees interest rates rising to at least 5%. Separately, Cleveland Fed President Loretta Mester said she has no problem with slowing down the central bank’s rapid rate increases when officials meet next month. “Markets get jittery whenever the Federal Reserve is due to speak or issue important information,” said Russ Mould, investment director at AJ Bell. “With the central bank set to publish the minutes from its November meeting tomorrow, equity investors need to brace themselves for the Fed to say it is likely to keep raising rates to tame inflation, even though October’s consumer prices figure was below expectations.” After this quarter’s 10% rally in the S&P 500, Goldman strategists expressed skepticism about US stocks returns next year, setting a 4000 points target for the benchmark by Dec. 2023 as earnings growth stalls. “Zero earnings growth will match zero appreciation in the S&P 500,” strategists led by David Kostin wrote in a note on Tuesday. Then again, the same David Kostin said excatly one year ago that the S&P would close 2022 at 5,100 so expect him to be dead wrong again. In Europe,  Stoxx Europe 600 Index climbed 0.2%, with energy stocks the best-performing sector as crude advanced after Saudi Arabia denied report of discussion about OPEC+ oil-output hike. BP rose 5.3% and Repsol was 6% higher after both stocks got analyst upgrades. Hong Kong stocks slid as China’s daily virus infections climbed to near the highest on record. Covid-control restrictions now affect a fifth of China’s economy. Still, the eventual easing by China of its curbs to counter the virus are likely to mean that European profits will hold up relatively well because of the benefits to luxury and mining companies, according to strategists at Goldman Sachs. Here are some of the notable European movers: AO World shares jumped as much as 17%, to the highest since early July, after the online appliances retailer raised its FY adjusted Ebitda forecast. Verbund rose as much as 8.2% after Stifel upgraded the utility company to buy from hold, saying conditions of Austria’s price cap are “much better” than had been anticipated. Allfunds shares fell as much as 11% after a discounted share offering by holders LHC3 and BNP Paribas in the mutual-fund distributor. Shares in digital price-tag maker SES- imagotag fell as much as 6%, before paring the drop, after majority shareholder BOE Smart Retail offered 1.5 million shares at a 7.3% discount to the last close. ThyssenKrupp declined as much as 5.9% after holder Cevian offered ~23.4m shares via UBS with price guidance of €5.15 apiece, representing a 4.7% discount to last close. Vodafone shares fell as much as 3.4% after the telecoms group was double-downgraded to underperform from outperform at Credit Suisse, which cited a growing risk to the dividend and elevated costs weighing on its outlook. Earlier in the session, Asian stocks advanced as the yen’s recent weakness boosted Japanese exporters, offsetting losses in Chinese tech shares. The MSCI Asia Pacific Index gained as much as 0.7%, with Japanese firms Toyota, Sony and Mitsubishi helping lift the gauge along with Taiwan’s TSMC. Up more than 10% this month, the MSCI Asian stock benchmark has outperformed its US or European peers in November thanks to China’s rally.  Among sectors, energy and industrials advanced the most, while communication services and consumer discretionary shares edged lower. Chinese stocks in Hong Kong fell for another day, as a worsening outbreak on the mainland raised doubts as to whether authorities can hold on to their softer Covid Zero stance. A rally this month fueled by reopening hopes has now come to a halt as investors come to terms with China’s Covid reality.  “As we’ve seen in the Covid issues in China, it’s going to be stop-go sort of news flow in terms of the lockdowns et cetera and that’s going to add volatility to markets,” Lorraine Tan, director of equity research at Morningstar, said in an interview with Bloomberg TV. Japan equities climbed as the yen’s retreat over the past four days supported exporters’ shares in the face of concerns over China’s Covid Zero policy and the Federal Reserve’s hawkish stance.   The Topix rose 1.1% to 1,994.75 as of the market close in Tokyo, while the Nikkei 225 advanced 0.6% to 28,115.74. Toyota Motor contributed the most to the Topix’s gain, increasing 2.3%. Out of 2,165 stocks in the index, 1,737 rose and 366 fell, while 62 were unchanged. “There is an impression that the market will be quiet with no major selloffs ahead of the Japanese and US holidays,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities. “In some aspects, it is difficult for the stock market to fall as investors find it hard to make a move.”  Stocks in Malaysia fell for a second day after Saturday’s election produced the country’s first-ever hung parliament. Australia’s equity benchmark rose to a five-month high buoyed by miners.The S&P/ASX 200 index rose 0.6% to close at 7,181.30, its highest since June 6, driven by a rebound in mining and energy shares.  In New Zealand, the S&P/NZX 50 index fell 0.2% to 11,420.42. New Zealand’s central bank is poised to raise interest rates by an unprecedented 75 basis points on Wednesday, accelerating its monetary tightening to get inflation under control. Elsewhere, markets were mixed with moderate gains or losses.  In FX, the Bloomberg Dollar Spot Index fell as the greenback fell against all of its Group-of-10 peers. Risk-sensitive Antipodean currencies and the Norwegian krone were the top performers. CFTC data showed that speculative and institutional traders turned their back to the dollar yet again last week as the currency stayed under pressure. At the same time, one-month risk reversals in the Bloomberg Dollar Spot Index rallied in favor of the topside. The euro rose versus the greenback but underperformed most of its major peers. Bunds slipped and Italian bonds inched lower. The pound rose against a broadly weaker dollar and was steady against the euro. Data showed UK government borrowing grew less than forecast in October, ahead of a testimony in Parliament by officials from the Office for Budget Responsibility. The yen rose for the first time in five days after remarks from some Federal Reserve officials solidified bets for smaller US rate hikes. Japan’s yield curve steepened a tad ahead of a local holiday. One-week risk reversals in dollar-yen traded earlier at 24 basis points in favor of the Japanese currency, which marked the least bearish sentiment for the greenback in more than a month. In rates, Treasuries ground higher leaving yields near session lows into the early US session with 10-year at around 3.79%. Bunds and gilts both lag Treasuries, trading slightly cheaper over early London session. US session focus is on Fed speakers and conclusion of this week’s auctions with a 7-year sale at 1pm.  Treasury 10-year yields outperforming bunds and gilts by ~5bp on the day. Long-end of the Treasuries curve underperforms, steepening 10s30s spread by 2.5bp on the day.  This week’s auctions conclude with $35b 7-year note sale at 1pm, follows Monday’s double auction of 2- and 5-year notes. In commodities, it has been a contained session for the crude complex after yesterday’s WSJ fake news-prompted rollercoaster, with benchmarks higher by around 1% amid further pushback to the production increase report. Kuwait Oil Minister has pushed back against reports of any discussions over OPEC+ raising production at its next meeting, according to the State news agency; Iraq's SOMO says no discussions have taken place over an increase at the next OPEC meeting. China has reportedly paused the purchase of some Russian oil, awaiting details of the price cap to see if it provides a better price. Spot gold and silver are firmer, with the yellow metal at session highs just below the USD 1750/oz mark as risk sentiment struggles to find firm direction and the USD continues to pullback. For reference, the current spot gold peak of USD 1748/oz is shy of the 10-DMA at USD 1755/oz and still some way from the 200-DMA at USD 1801/oz. Cryptocurrency prices were mixed, with investors braced for more ructions as further digital-asset sector bankruptcies loom following the demise of Sam Bankman-Fried’s FTX empire. Looking to the day ahead now, and central bank speakers include the Fed’s Mester, George and Bullard, along with the ECB’s Holzmann, Rehn and Nagel. Data releases include Euro Area consumer confidence for November, as well as the US Richmond Fed manufacturing index for November. Lastly, the OECD will be releasing their Economic Outlook. Market Snapshot S&P 500 futures up 0.2% to 3,964.00 STOXX Europe 600 up 0.6% to 435.56 MXAP up 0.4% to 151.12 MXAPJ down 0.1% to 486.08 Nikkei up 0.6% to 28,115.74 Topix up 1.1% to 1,994.75 Hang Seng Index down 1.3% to 17,424.41 Shanghai Composite up 0.1% to 3,088.94 Sensex up 0.4% to 61,380.15 Australia S&P/ASX 200 up 0.6% to 7,181.30 Kospi down 0.6% to 2,405.27 German 10Y yield little changed at 1.99% Euro up 0.3% to $1.0272 Brent Futures up 0.7% to $88.04/bbl Gold spot up 0.5% to $1,745.92 U.S. Dollar Index down 0.35% to 107.46 Top Overnight News from Bloomberg More than six years after voting to leave the EU, the UK is facing a prolonged recession, a deep cost-of-living crisis and a shortage of workers. Last week’s Autumn Statement heralded years of higher taxes and cuts to public spending The ECB needs to maintain the pace of rate increases at its next meeting on Dec. 15 to demonstrate policy makers are “serious” about taming inflation, Financial Times reports, citing an interview with Robert Holzmann, governor of the National Bank of Austria and member of the ECB’s governing council Germany will introduce a cap on gas and electricity prices for companies and households as Europe’s largest economy seeks to contain the fallout from Russia’s moves to slash energy supplies. Large parts of German industry will no longer be able to avoid production cuts if companies need to further reduce natural gas consumption, according to a survey Italy has signed off on a €35 billion ($36 billion) budget law for next year which will raise a windfall tax on energy companies in order to expand aid to families and businesses hit by higher prices Spain announced a series of steps to shield mortgage-holders on lower incomes from rising costs, stepping up efforts to cushion the economic blow from high inflation and surging interest rates The premium investors pay for German two-year bonds over equivalent swaps has dropped to levels last seen in July in recent days, down more than 40 basis points from a record high in September. It comes after the German finance agency and the European Central Bank took steps to increase the supply of debt available to borrow in repo markets An FTX Group bankruptcy filing showed that the fallen cryptocurrency exchange and a number of affiliates had a combined cash balance of $1.24 billion A new currency trading algorithm developed by a Dutch fund threatens to wrest away millions of euros of fees from investment banks if it gains traction in the pension industry China’s overnight repo rate plunged to its lowest level in nearly two years, an indication that a liquidity squeeze seen last week has eased following measures by the central bank A more detailed look at global markets courtesy of Nesquawk Asia-Pac stocks were mostly positive as the regional bourses attempted to recover from the recent China COVID woes but with price action contained amid quiet newsflow and a lack of fresh macro drivers. ASX 200 was positive amid strength in the commodity-related sectors in which energy led the advances after oil prices rebounded following Saudi’s denial that it was considering a production increase. Nikkei 225 higher and reclaimed the 28,000 level with early outperformance in Shionogi after its COVID-19 therapeutic drug was presumed effective by Japan’s PMDA. Hang Seng and Shanghai Comp traded mixed with Hong Kong pressured by weakness in the tech sector, while losses in the mainland were reversed after the latest policy support pledges by China including measures to sustain the recovery momentum of the industrial economy and with the PBoC to release CNY 200bln worth of loan support for commercial banks to ensure near-term delivery of homes. Top Asian News US Defence Secretary Austin met with Chinese Defence Minister Wei Fenghe in Cambodia, according to a US official cited by Reuters. US Defence Secretary Austin discussed the need for dialogue on reducing risk and improving communication with his Chinese counterpart, according to a Pentagon spokesperson. Furthermore, Austin raised concern about increasingly dangerous behaviour by Chinese aircraft which increases the risk of an accident and he reiterated that the US remains committed to the longstanding Once China Policy. Chinese Defence Ministry spokesman said the main reason for the current situation faced by China and the US is because the US made the wrong strategic judgement. In relevant news, Global Times' Hu Xijin tweeted that the meeting between the two defence ministers must be supported and that no matter how many frictions, China and the US cannot fight militarily which is the bottom line and the two sides’ due responsibility to the world. EU is poised to renew sanctions on Chinese officials accused of human rights violations in Xinjiang for an additional year, according to SCMP. RBA's Lowe say the Bank is not on a pre-set path and could return to 50bps increase or keep rates unchanged for a time. The Board expects to increase interest rates further over the period ahead. Understand that many people are finding the rise in interest rates difficult. It is necessary, though, to ensure that the current period of higher inflation is only temporary. Beijing City reports 634 (prev. 274) COVID infections on November 22nd as of 3pm, according to a health official, via Reuters. Subsequently, Beijing will tighten COVID testing requirements as of November 24th, according to an official; COVID tests within 48 hours will be required to enter public venues. European bourses are modestly firmer, Euro Stoxx 50 +0.2%, though fresh developments have been limited and the upside itself is tentative at best. Sectors are mixed with the likes of Energy outperforming after yesterday's noted pressure, no overarching bias present in the European morning. Stateside, US futures are near the unchanged mark but have, similar to European peers, been modestly firmer/softer throughout the morning, ES +0.1%. Samsung Electronics (005930 KS) is to jointly develop 3nm chips with five-six fabless clients for large quantity supply as soon as 2023, via Korea Economic Daily citing sources. Top European News ECB's Centeno sees conditions for rate hikes to be less than 75bps in December and said they "really have to reverse" the trend of rising inflation to have greater visibility on monetary policy, according to Bloomberg. ECB's Holzmann said he supports a 75bps hike in December and noted there are no signs that price pressures are easing, according to FT. ECB's Rehn says they will probably hike rates again, pace depends on how the economy develops. ECB's Nagel says a 50bp rate hike is "strong", rates are still "relatively far" from restrictive territory, via Reuters; calls for commencing a gradual APP unwind in Q1-2023. Italy approved a EUR 35bln budget law for next year which plans to increase an energy windfall tax, according to Bloomberg. FX Dollar loses recovery momentum as risk appetite picks up, DXY drifts between 107.810-300 bounds and retests a Fib retracement level just over 107.500 Kiwi rebounds to top 0.6150 vs Buck irrespective of worrying NZ trade data, as RBNZ looms amidst expectations of a larger 75bp hike in the OCR Aussie recovers alongside Yuan and amidst comments from RBA Governor Lowe reaffirming guidance for further tightening, AUD/USD eyes 0.6650 from around 0.6600 at the low Loonie regains poise in tandem with oil and probes 1.3400 against its US rival pre-Canadian data and remarks from BoC's Rogers Yen, Franc, Euro and Pound all take advantage of Greenback fade plus yield convergence to Treasuries as USD/JPY reverses from 142.00+ and USD/CHF from almost 0.9600, while EUR/USD eyes 1.0300 and Cable 1.1900 vs sub-1.0250 and 1.0825. Fixed Income Rangebound trade for core fixed income, though intraday boundaries have extended on both sides throughout the European morning as the complex struggles for firm direction. Bund unreactive to a well-received Bobl auction while USTs are a handful of ticks firmer ahead of the week's last US auction, with volumes currently fairly light. Note, final orders for the UK's 0.125% 2073 Gilt I/L exceed GBP 16.8bln, according to a bookrunner, with pricing set 20bp below the 2068 comparable. Commodities Comparably contained session for the crude complex after yesterday’s pronounced OPEC+ related price action; benchmarks currently firmer by around 0.5% amid further pushback to the production increase report. White House Press Secretary said President Biden is committed to further lowering gasoline prices. Kuwait Oil Minister has pushed back against reports of any discussions over OPEC+ raising production at its next meeting, according to the State news agency; Iraq's SOMO says no discussions have taken place over an increase at the next OPEC meeting. China has reportedly paused the purchase of some Russian oil, awaiting details of the price cap to see if it provides a better price, via Bloomberg citing sources. German gas price break will apply retroactively from January, via der Spiegel; reduction in gas and heat prices is not expected to take effect until March 1st. European Commission proposes to introduce a gas price correction mechanism for one-year from January 1st 2023, via Reuters citing draft legislation; proposal leaves the actual price cap blank for now. Diplomats say that EU gov'ts want the gas price cap at EUR 159-180/MWh, vs the much higher cap expected to be proposed by the Commission. UK officials visited Brazil in October to assess the regions beef standards, via Politico; a visit which has fuelled hopes in Brazil of a future trade deal. Spot gold and silver are firmer, with the yellow metal at session highs just below the USD 1750/oz mark as risk sentiment struggles to find firm direction and the USD continues to pullback For reference, the current spot gold peak of USD 1748/oz is shy of the 10-DMA at USD 1755/oz and still some way from the 200-DMA at USD 1801/oz. Geopolitics Moscow considers a search necessary for a peaceful solution to the Kurdish issue after Turkey's strikes in Syria and believes Turkey should restrain from the use of excessive military force, according to RIA citing Moscow's Syria envoy. N. Korea will take an ultra strong response to anyone that interferes with its sovereign rights, via KCNA; US will face a greater security crisis the more it insists on taking hostile actions. US Event Calendar 10am: U.S. Richmond Fed Index, Nov., est. -8, prior -10 Central bank speakers 11am: Fed’s Mester Discusses Wages and Inflation 11:45am: Bank of Canada’s Carolyn Rogers Speaks on Financial Stability 2:15pm: Fed’s George Takes Part in Policy Panel 2:45pm: Fed’s Bullard Discusses Heterogeneity in Macroeconomics DB's Jim Reid concludes the overnight wrap A decent slug of yesterday was spent debating whether England's 6-2 win at the World Cup was a performance to scare the world of football into submission or whether Iran's 20th spot in the FIFA World rankings may slightly flatter them. As ever, your opinions are welcome! Good luck to all your teams as the WC introduces a few big hitters today! I'm not sure if it was the World Cup but markets had a rather slow and lacklustre start to the week yesterday. The S&P 500 (-0.39%) fell back amidst concerns about rising Covid cases in China and ongoing fears about a US recession next year. The effects were evident across multiple asset classes, and WTI oil prices fell below their start of 2022 levels briefly intra-day (-6.24% on the day at the lows) as investors grappled with the prospect of lower Chinese demand alongside speculation about an OPEC+ output increase, which was eventually denied. WTI rallied back hard on a Saudi denial of the story to close just -0.44% lower, while Brent futures were -6.06% lower before closing down only -0.19%. In Asia trading, WTI prices (+0.74%) have climbed back above the start of week levels and are trading just above $80/bbl while Brent futures (+0.49%) are fractionally higher as we go to print. In terms of what’s coming out of China, there are growing concerns among investors that there’ll be a return to lockdowns following the weekend news that they’d had their first Covid death in six months. The overall rise in case numbers now makes this the third-largest outbreak of the pandemic so far, behind only the Shanghai lockdowns in Q2 and the Wuhan outbreak in early 2020. Beijing has increased its restrictions, and now requires arrivals to take three PCR tests within the first three days and to stay at home until they get a negative result. In the Haidian district of Beijing, schools have now switched to online learning as well. This has all served to dampen the speculation of recent weeks that China might be moving gradually away from its zero-Covid strategy, and the city of Shijiazhuang has even asked residents to stay at home for 5 days. China recorded 27,307 new local Covid cases nationally yesterday, almost close to the record high of 28k seen in March. The irony is that the China reopening story has been a big positive driver of China-related risk and overall markets over the last couple of weeks, so we are trading between feast and famine on this story. Both could of course be ultimately right. There might be many more restrictions in the near term but stronger more durable reopenings by the spring. Markets are struggling to price this at the moment though. For now, the effects were apparent among Chinese stocks listed in the US, with companies like Alibaba (-4.41%), JD.com (-6.37%) and Bilibili (-8.15%) underperforming the broader equity moves. The Chinese Yuan (-0.64%) also weakened against the US Dollar, although to be fair this was partly a function of dollar strength. Overnight in Asia, China risk has bounced a bit. The Shanghai Composite (+0.75%) and the CSI (+0.77%) are both up alongside the Nikkei (+0.72%). The Hang Seng (-0.39%) and KOSPI (-0.35%) are both lower. US equity futures are just above flat as we type. Staying with equities, the earlier plunge in oil prices was bad news for energy stocks, which were among the biggest sectoral underperformers on both sides of the Atlantic. By the close of trade, the S&P 500 was down -0.39%, with energy down -1.39%, rallying midday from -4.64% to beat out consumer discretionary shares which were -1.41% lower. A number of other cyclical industries underperformed as well, and the NASDAQ fell -1.09% on the day, whilst the small-cap Russell 2000 fell -0.57%. In Europe, the performance was marginally better, but that still wasn’t enough to stop the STOXX 600 posting a very marginal -0.06% decline, with energy (-3.02%) far and away the underperformer as shares closed near the nadir of Brent and WTI futures pricing. There clearly should be a bounce this morning. The more negative tone out of China yesterday has only added to existing fears about a US recession over the coming months, which the latest moves in the Treasury yield curve did little to dispel. The 2s10s yield curve flattened another -2.2bps to -73bps taking it beneath the 1982 low of -71.65bps to a level unseen since 1981. This came as the 10yr tracked intraday pricing in oil as well, having fallen as much as -7.1bps intraday before finishing the day more or less unchanged. This morning in Asia, 10yr UST yields (-1.12 bps) are slightly lower, trading at 3.82%. There have been a few Fed speakers over the last 24 hours to impact treasury pricing. SF Fed President Daly warned against the two-sided risks of over-tightening, but hinted that her estimate of terminal may have risen to around 5.1% since the November meeting. Meanwhile, Cleveland Fed President Mester supported downshifting to a 50bps hike in December, but noted the Fed was not “anywhere near to stopping”, echoing Chair Powell’s tone from the November FOMC presser. There's quite a bit of Fed speak today as you'll see in the day ahead at the end. Whilst it’s widely expected that the Fed will slow down the pace of hikes to 50bps in December, there’s somewhat more doubt about the ECB’s next move the following day, who it seems are still weighing up another 75bps hike or slowing down to 50bps. Yesterday, we heard from Austria’s Holzmann (a hawk), who said he’d only favour a 50bps hike if there was a “major reduction” in inflation this month. But Portugal’s Centeno (a dove) said that the conditions were in place for a hike beneath 75bps next month. Separately, Slovenia’s Vasle talked about the need for restrictive policy, saying that the ECB needs to “keep gradually raising rates, even into the territory where monetary policy won’t be just neutral, but will become more restrictive.” European sovereigns seemed unfazed by this debate, trading in line with the broader global moves. Yields on 10yr bunds (-2.1bps) and OATs (-1.8bps) moved lower, but there was an underperformance among southern European countries, with yields on Italian BTPs up +4.3bps. Interestingly, there was a notable downside surprise in the latest German PPI reading, which came in at +34.5% in October (vs. +42.1% expected). Now it’s worth noting that the decline was driven by energy, but at -4.2% on the month, that was the first monthly decline in the index since mid-2020. To the day ahead now, and central bank speakers include the Fed’s Mester, George and Bullard, along with the ECB’s Holzmann, Rehn and Nagel. Data releases include Euro Area consumer confidence for November, as well as the US Richmond Fed manufacturing index for November. Lastly, the OECD will be releasing their Economic Outlook. Tyler Durden Tue, 11/22/2022 - 08:02.....»»

Category: worldSource: nytNov 22nd, 2022

What Elephant? AP Denies that There Is Any Evidence That Joe Biden Discussed Hunter"s Business Dealings

What Elephant? AP Denies that There Is Any Evidence That Joe Biden Discussed Hunter's Business Dealings Authored by Jonathan Turley, For those of us who have written about the Hunter Biden scandal and the family’s influence-peddling operation for years, it is routine to read media stories denying the facts or dismissing calls to investigate the foreign dealings. However, this weekend, the Associated Press made a whopper of a claim that there is no evidence even suggesting that President Joe Biden ever spoke to his son about his foreign dealings. I previously discussed how the Bidens have succeeded in a Houdini-like trick in making this elephant of a scandal disappear from the public stage. They did so by enlisting the media in the illusion. However, this level of audience participation in the trick truly defies belief. The statement of the Associated Press at this stage of the scandal is breathtaking but telling: “Joe Biden has said he’s never spoken to his son about his foreign business, and nothing the Republicans have put forth suggests otherwise.” For years, the media has continued to report President Biden’s repeated claim that “I have never spoken to my son about his overseas business dealings.” At the outset, the media only had to suspend any disbelief that the president could fly to China as Vice President with his son on Air Force 2 without discussing his planned business dealings on the trip. Of course, the emails on the laptop quickly refuted this claim. However, the media buried the laptop story before the election or pushed the false claim that it was fake Russian disinformation. President Biden’s denials continued even after an audiotape surfaced showing President Biden leaving a message for Hunter specifically discussing coverage of those dealings. The call is specifically referring to these dealings: “Hey pal, it’s Dad. It’s 8:15 on Wednesday night. If you get a chance just give me a call. Nothing urgent. I just wanted to talk to you. I thought the article released online, it’s going to be printed tomorrow in the Times, was good. I think you’re clear. And anyway if you get a chance give me a call, I love you.” But who are you going to believe, the media or your own ears. Some of us have written for two years that Biden’s denial of knowledge is patently false. It was equally evident that the Biden family was selling influence and access. There are emails of Ukrainian and other foreign clients thanking Hunter Biden for arranging meetings with his father. There are photos from dinners and meetings that tie President Biden to these figures, including a 2015 dinner with a group of Hunter Biden’s Russian and Kazakh clients. People apparently were told to avoid directly referring to President Biden. In one email, Tony Bobulinski, then a business partner of Hunter’s, was instructed by Biden associate James Gilliar not to speak of the former veep’s connection to any transactions: “Don’t mention Joe being involved, it’s only when u [sic] are face to face, I know u [sic] know that but they are paranoid.” Instead, the emails apparently refer to President Biden with code names such as “Celtic” or “the big guy.” In one, “the big guy” is discussed as possibly receiving a 10 percent cut on a deal with a Chinese energy firm; other emails reportedly refer to Hunter Biden paying portions of his father’s expenses and taxes. Bobulinski has given multiple interviews that he met twice with Joe Biden to discuss a business deal in China with CEFC China Energy Co. That would seem obvious evidence. In addition, the New York Post reported on a key email that discussed “the proposed percentage distribution of equity in a company created for a joint venture with CEFC China Energy Co.” That was the email on March 13, 2017 that included references of “10 held by H for the big guy.” The Associated Press later revised the line after an outcry from some of us. It now ends “there is no indication that the federal investigation involves the president.”  The revision creates a new problem. Rather than simply stating the fact, AP seems to struggle to shield the President. There is every indication that “the federal investigation involves the president.” Not only is the President discussed in key emails under investigation, but the grand jury heard testimony that the “Big Guy” is Joe Biden. That brings us back to Houdini’s trick of making his 10,000 pound elephant Jennie disappear every night in New York’s Hippodrome. He succeeded night after night because the audience wanted the elephant to disappear even though it never left the stage. I previously wrote about how the key to the trick was involving the media so that reporters are invested in the illusion like calling audience members to the stage. Reporters have to insist that there was nothing to see or they have to admit to being part of the original deception. The media cannot see the elephant without the public seeing something about the media in its past efforts to conceal it. The media is now so heavily invested in the trick that they are sticking with the illusion even after “the reveal.” The Associated Press story shows that even pointing at the elephant — heck, even riding the elephant around the stage — will not dislodge these denials. This is no elephant because there cannot be an elephant. Poof! N.B.: This column was revised to add discussion of the AP revision of the line on the investigation. Tyler Durden Mon, 11/21/2022 - 19:40.....»»

Category: blogSource: zerohedgeNov 21st, 2022

FTX Post Mortem Part 1 Of 3: WTF Really Happened?

FTX Post Mortem Part 1 Of 3: WTF Really Happened? Authored by Scott Hill via BombThrower.com, The dust hasn't settled, but the smoke is beginning to clear, somewhat... Here's WTF just happened, and what happens next... On November 2nd Coindesk published a leaked balance sheet from FTX affiliated market maker Alameda Research. Ten days later the third largest Crypto exchange in the world was bankrupt and its founder was under international investigation for fraud. In this article I’ll go through how Crypto giant FTX fell apart. There is a lot of backstory to this situation which I’ll cover in a following article, discussing the beginnings of Alameda research and the story of how a sketchy hedge fund turned into a major exchange. As you’ve no doubt heard repeatedly this week, self custody of your Crypto is the safest approach until we know who is insolvent and the extent of the contagion. If you’re not confident with self custody, Coinbase and Kraken seem to be the safest Crypto exchanges, but that is still a counterparty risk that I’m not willing to take personally in these market conditions. The Balance Sheet Leak The exclusive scoop from Coindesk looked bad for Alameda Research. The firm, which performed market making on FTX as well as taking directional bets and venture capital investments, seemed insolvent on a realized value basis. Their balance showed $14.6 billion in assets held against $8 billion in liabilities. On paper solvent on a mark-to-market basis, but digging in there was no way that mark was reasonable. The most egregious example was $5.82 billion worth of FTT tokens on the asset side, around a third locked and the rest unlocked and available to trade. FTT is a token created by FTX, a sort of pseudo-equity token which represented some share of the exchange revenues. Kind of. FTX had been doing periodic buybacks of the token which were supposed to represent a distribution of exchange revenues to holders. Holding the token also entitled traders to a discount on trading fees. The token was at the time worth around $26. At its peak it was worth around $80. The main thing that FTT was used for though, was pledging as collateral by FTX and Alameda.  You read that right, a token which the exchange invented a little over 3 years ago was used as collateral for loans. We know for sure that it was acceptable collateral in various Solana DeFi protocols, which FTX had a significant amount of influence over; but reports are also surfacing that it may have been used to purchase real estate in the Bahamas and quite possibly with various institutional Crypto lending like Genesis which is now facing major problems. The problem with FTT There’s nothing inherently wrong with using Crypto tokens as collateral if there is a robust and deep market pricing them. If the loan goes bad, lenders can seize the collateral and sell it off, covering some of their loss. FTT didn’t have a deep and robust market. The “flywheel” scheme – via Dirty Bubble Media There was barely any volume. There was barely any liquidity. If a lender had to sell a large volume in a hurry there weren’t any buyers ready to step in. While Alameda was claiming to have $5.82 billion of its balance sheet held in FTT tokens, the entire available market cap was less than $4 billion. Read that again, Alameda’s balance sheet held more than the entire market cap of FTT.  So this wasn’t a situation where a lender might make a loss on selling the collateral, this was a situation where there were potentially billions in loans floating around in the Crypto ecosystem with essentially no collateral that could be liquidated without detonating the market. Just to top it off, some of this FTT was likely pledged to multiple lenders. Industry Reaction The initial reaction was general indifference. Alameda looked like it was playing with fire and had gone all in on the exchange token for its sister company FTX alongside various other FTX supported coins like Solana and Serum. It was an open secret in the industry that Alameda and FTX were more intertwined than they claimed, but if push came to shove it was assumed that Alameda would be allowed to fail and FTX would continue being the highly profitable exchange that everyone assumed it was. FTX was highly profitable, right? There were a few that were calling the bluff, but the main gripes were conflict of interest within FTX related companies and unsavory business practices by FTX, trading against customer positions and liquidating accounts improperly. The usual bucket shop tricks. No one seemed to be expecting a total insolvency across the FTX group of companies. But still something didn’t feel right. Caroline Ellison, the newly appointed CEO of Alameda Research tried to calm fears on Twitter, claiming that the leaked balance sheet was only a partial balance sheet, there were another $10 billion in assets elsewhere within the corporate structure, and they’ve paid down most of their loans. It was a strange and deeply unsettling response, shrugging the issue off as if the industry should just take her at her word. Enter the CZ Dragon Even CZ, the CEO of rival exchange Binance, didn’t seem to be suggesting that FTX was in trouble. Late on Sunday November 6 CZ announced that he would be liquidating the FTT held by Binance. All $500 million of it. Binance had been the sole investor in the seed round for FTX.  In 2021 they were bought out for $2.1 billion in cash and FTT tokens. This alone wasn’t enough to push markets into panic. CZ said he would do this over a number of months, carefully and slowly in an attempt to “minimize the market impact”. In a follow up tweet, CZ said that he was doing “post-exit risk management, learning from Luna” Everyone in Crypto knew what he meant by “learning from Luna” In May Luna detonated, dropping to zero. The protocol is now seen as a deeply flawed project in the best possible light and a blatant ponzi scheme in the more realistic assessment. Did CZ, the most powerful man in Crypto just call FTX a ponzi scheme? Panic Crypto industry figures were in disbelief. Surely FTX, the darling of the industry, was a highly profitable, solvent and legitimate business. But the reaction was off and deeply troubling. The CEO of Alameda Research quickly asked CZ if she could buy all of the FTT tokens off-market at a price of $22. The market smelled blood. Over the course of the next few hours FTT was aggressively shorted, Caroline had put a floor under it at $22 and traders were going to bleed Alameda dry defending that mark. Why did $22 matter? It’s only conjecture, but it seems likely that below $22 Alameda would be liquidated by its lenders and a cascade of FTT tokens would need to be sold into a market unwilling to buy them, flattening the firm. But traders only thought they were going after Alameda, the predatory market maker.  In hindsight it’s obvious, you shouldn’t short an exchange token to death on the exchange that issued it, but FTX was the main venue for the fight for $22. A huge amount of volume flowed through the order books and everyone was looking forward to getting paid as the token dropped, first to $18 and later to $6. While the traders were battling it out, regular users were getting out. FTX experienced massive outflows and on-chain analysis showed some deeply troubling signs. Alameda was pulling liquidity from everywhere. Every dollar that was deployed in DeFi got pulled. Weird tokens got dumped. But the liquidity wasn’t going into Alameda’s wallet, it was going into FTX wallets to pay customers. Surely FTX wasn’t funding customer withdrawals from Alameda’s DeFi degen positions? FTX was supposed to be a full reserve exchange. As an even higher bar, the terms of depositing with FTX were that customers retained title to their assets. Assets were held on trust, they weren’t supposed to be lent out or touched except as directed by the customer. SBF concedes On Sunday afternoon, Sam Bankman-Fried (SBF), the CEO of FTX said that the problems with the Alameda balance sheet were just “unfounded rumors”. He explained that FTX had processed billions of dollars in withdrawals and that they would continue to do so. He claimed that they were hitting node capacity, something that I’ve never heard of, and needed to slow down withdrawals. By Sunday night, withdrawals of some assets had stopped entirely, but there was no announcement from FTX. Radio silence from the team. We now know that during this period SBF was frantically going to investors to do an emergency fundraise of between $6-10 billion dollars. The terms which later leaked were insane. It was obvious that no lawyer had reviewed these documents. They seemed to be written by a child, imitating a businessman, who was in way over his head. Industry insiders at the time thought that FTX had likely lost some amount of user funds, would need to take a loan to cover them and could move on with rebuilding trust. We were shocked to wake up on Tuesday to the news that Binance had made an offer to buy out FTX entirely, subject to due diligence. This isn’t what a rescue package for a competently run business looks like. This was a fire sale of a dumpster fire. The previous day SBF had claimed his exchange was fully solvent, just having minor liquidity issues. The next day he was handing the keys to their main rival. Now that balance sheets have been leaked for FTX we know what Binance would have seen as soon as they started their diligence, a balance sheet crammed with dodgy tokens and full of holes, unaudited and put together in excel with no real supporting evidence. The rumored sale price was one dollar. CZ quickly walked away from the deal, citing misuse of customer funds and regulatory concerns; leaving SBF to fix his own mess. With the exchange still operational, but withdrawals closed, SBF posted yet another long thread trying to talk his way out of the problem, claiming to be trying to set everything straight and get emergency funding. While he had not yet admitted that it was all over, he did make a bizarre reference to CZ “well played; you won” As we came to learn later, for this sociopath that’s all it was, just a game to be won or lost. The Insanity Begins The rejection of the deal from Binance was the first mention of misuse of customer funds. Until then there was speculation that there was a minor balance sheet hole, remember, no one knew at that time that SBF had been seeking $6-10 billion in emergency funding. The next day the news started pouring in. Reuters reported that there was a secret back door in the accounting at FTX which allowed customer funds to be moved around without alerting anyone. It also claimed that $10 billion dollars worth of customer funds had been secretly moved to Alameda. SBF remained silent, but elsewhere there was chaos. Alameda funds were moving around frantically on chain, placing gigantic bets and actively trading. Was SBF trying to trade out of it? Tether put a stop to this later in the day, freezing Alameda’s funds on the request of law enforcement. On the exchange the chaos was even worse. Justin Sun the founder of Tron had shown up to offer to redeem Tron tokens trapped on FTX. Prices spiked as customers flocked to get cents on the dollar via this exit ramp. There was talk of taking complicated cross-platform trades to make a synthetic exit ramp. The Bahamas Loophole As the insanity deepened, FTX posted on Twitter that they were processing a small amount of withdrawals to customers in the Bahamas as requested by local authorities. A week later we found out this was a lie, there was no request, but even at the time it seemed likely to be a way for insiders to exit their funds before the inevitable bankruptcy. Suddenly, traders with stuck funds were desperately trying to obtain a fraudulent Bahamian passport and complete identity checks in the Bahamas. Some even managed to do it apparently and successfully withdrew funds. Black market prices on passports spiked and a secondary market for trapped funds emerged, with accounts trading for 15 cents on the dollar. NFTs were being traded for entire balances in order to move the funds to an account which could still withdraw. On the actual exchange things were just as chaotic. Traders with trapped funds were treating their accounts like paper money, trading nonsense on high leverage and dislocating markets. FTX was removed from pricing feeds to restore order elsewhere. This was the first time in the whole saga that it became clear, it was all over for FTX. FTX US halts withdrawals This entire time the story had been that FTX US was a separate entity. Their funds were firewalled off from FTX international. The exchange remained open for withdrawals and appeared to be functioning properly. This relative calm on the US side of the company instilled some faith. Surely, despite the havoc going on in the Bahamas, the US exchange was well regulated. Surely, the books were audited and no client funds could go missing in the US. On Thursday afternoon, FTX US halted withdrawals. Bankruptcy and the Hack On Friday morning SBF resurfaced and announced that FTX would be put into bankruptcy. The motion was filed in the US and included FTX US. It would later be revealed that SBF had stepped down as CEO and John J Ray III, a lawyer famous for taking over Enron post-collapse, would be similarly guiding FTX through bankruptcy. Everyone breathed a sigh of relief, it was finally done. But the fun and games weren’t over Shortly after the bankruptcy was announced funds started moving on-chain. A lot of funds. Over $600 million left FTX affiliated wallets, moving to fresh wallets. The speculation was that there was a hack, perhaps by an insider looking to get the last of what they could out of FTX. It quickly became clear that there were two teams working. One appeared to have simply moved worthless tokens into storage, a plausible move by a “white hat” or good guy team seeking to preserve user funds from a compromised system. The other team, the “black hat” team, took the vast majority of the $600 million and moved it all into Ethereum DeFi, trading other coins into Ethereum tokens and consolidating them all together. This consolidation took place across multiple blockchains and traded with reckless abandoning, losing gigantic sums on slippage along the way. Once the dust had settled, the hacker was one of the largest individual holders of Ethereum. We don’t quite have the full story on what happened here yet. The Bahamian authorities claim that they seized the assets, with many assuming that they are referring to the hacked funds. It seems far more likely that they are referring to the “white hat” funds only, as the “black hat” funds demonstrated much more sophistication in blockchain use that could be expected of a regulator. The funds have stopped moving for now. Sitting idle with more that 241,000 ETH, a little less than $300 million worth. No one really knows what will happen with these funds. Where are we now? After a week of complete mayhem as the exchange fell apart and another week for the adults to take over and begin the clean up we have two competing bankruptcy procedures. One taking place in the US, overseen by the lawyer who cleaned up after Enron collapsed. The other taking place in the Bahamas, overseen by two accountants from PriceWaterhouseCoopers and a senior local lawyer who has a decades long history of high level appearances in the Supreme Court of the island nation. It’s not entirely clear which action will take precedence, but they are opposed to each other. The US bankruptcy is seeking that all the companies be wound up together and users are compensated with whatever assets are left across the entire conglomerate. It turns out, FTX was made up of over 100 individual companies. The organization chart looks like the web a drunk spider would spin. It’s not the sort of corporate structure that would be constructed for anything other than hiding funds and playing shell games. The Bahamian action appears to be seeking to have the main FTX company dealt with separately, screwing US customers out of funds and leaving the bankruptcy in the hands of the Bahamian government which seems to have taken some pretty significant donations from FTX in the past. In filings made late this week FTX was referred to as a “disorganized mess”. There was a lack of proper accounting. The auditing was done by “the first accounting firm in the metaverse” that doesn’t appear to have a physical address. There appears to have been loans made to company executives in the hundreds of millions of dollars range. There was no corporate board. There was no human resources department. There was no accounting department. There was no real tracking of customer funds. The lawyer handling the FTX bankruptcy also conducted the Enron bankruptcy. He says this is far worse. Enough for now This is just the walkthrough of how everything fell apart in front of our eyes. The corruption, the lies and the scandal have all been uncovered in the wake of this collapse. In another article coming shortly I will cover the rise and fall of FTX and Alameda Research, delving into the backstory that allowed this fraud to grow under the cover of one of the most well regarded companies in the industry. *  *  * Today’s post is from contributing analyst Scott Hill. To receive further updates of this series and our overall investment thesis for digital assets (even in this climate), subscribe to the Bombthrower mailing list.  Tyler Durden Sat, 11/19/2022 - 21:30.....»»

Category: worldSource: nytNov 19th, 2022

The Winners And Losers In A Shift In Control Of Congress

The Winners And Losers In A Shift In Control Of Congress Authored by Jonathan Turley, Below is my column in the New York Post on why the self-described “giddy” White House might want to consider the impact of a loss of one or both houses of Congress. While many are still debating who will prevail in contested districts or states, the shift in power could produce its own “winners and losers.” Indeed, the President may find himself as giddy as all get out if he loses control of the House and possibly the Senate. Here is the column: The midterm elections proved captivating as one followed races district by district throughout the night. The true winners and losers, however, go beyond the individual officeholders. Legally, there are both individuals and institutions that could see significant changes with the new division of power in Washington. While the White House was reportedly “giddy and gleeful” with the results, Democrats likely lost the House and could still lose the Senate. Despite the rivaling predictions of red waves and blue walls, the night showed what was always abundantly clear: We are still a deeply divided country. Congress will reflect that division in terms of power distribution — and that may be a good thing. WINNERS Constitutionalism: The last two years have seen frontal assaults on constitutional values ranging from separation of powers to free speech. Democrats applauded, for example, as President Joe Biden unilaterally waived roughly $500 billion in loans owed to the American people. While courts repeatedly found Biden to have violated the Constitution, Congress remained conspicuously silent even as it joined the president in declaring Republicans threats to the Constitution. In an August New York Times column, “The Constitution Is Broken and Should Not Be Reclaimed,” law professors Ryan D. Doerfler of Harvard and Samuel Moyn of Yale called for our founding charter to be “radically altered” to “reclaim America from constitutionalism.” It’s safe to say voters effectively reclaimed constitutionalism from such extremist voices. Once again, voters preferred divided government with a Congress willing and able to challenge a president rather than remain a pure pedestrian in the exercise of governance. There’s now a moving part in Congress that’s been dormant for two years. As those institutional gears engage, checks and balances will again force greater accountability and exposure in the constitutional system. The Supreme Court: For two years, the left has targeted the nation’s highest court with calls for packing it. Polls have long showed this movement was contained almost entirely within the far left. Yet attacking the court and its justices was an article of faith for many Democrats, including Sen. Elizabeth Warren, who called for raw court packing. While the attacks are likely to continue, the shift in Congress will put an end to such radical proposals. LOSERS The media: Outlets, in framing the election, consistently echoed Democrats’ narratives — yet failed to deliver them victory. The media now face the prospect of inquiries that could further erode voter trust. Congressional investigations will likely drill down on the Hunter Biden influence-peddling scandal. The media played an active role in burying that scandal and will face questions of how they could turn a blind eye to globe-spanning corruption that involved millions of dollars from foreign political and intelligence figures. They may also see an investigation into backchannels political and government officials used to enlist surrogates in the media and social media for censorship. The Bidens: The election’s biggest loser could be the Biden family. After successfully avoiding any media or congressional scrutiny of their alleged influence peddling, time is up for the Bidens. Despite Attorney General Merrick Garland’s refusal to appoint a special counsel, they will face investigations launched with the full authority of the Oversight Committee. Garland will also confront demands to show the same aggressive prosecution of contempt of Congress when Biden associates are the subject of such referrals. All this will add to whatever emerges from Delaware in the long-standing investigation of tax and other allegations against Hunter Biden. With the midterms over, the Justice Department will no longer be bound to avoid filings that might influence the election. Hunter could easily find himself under indictment as Congress ramps up a broad investigation into his foreign dealings. There is one group that could be included on lists of both winners and losers: moderates. President Donald Trump pushed candidates that struggled or failed with voters who viewed them as too extreme. For moderates in the Democratic Party, the flipping of long-blue districts and other close races are evidence of a shift in independents and groups like Hispanics away from far-left policies. The problem is that so few true moderates remain in Congress. The result is that while the country remains moderate, Congress will again not reflect that broad center. The next two years will be anything but predictable. James Madison believed that if you want good government, “ambition must be made to counteract ambition.” If that’s true, the good news is there will be no shortage of ambition in the days ahead. But before the White House gets too “giddy” after losing one or both houses of Congress, it should contemplate the prospect of a house of Congress with very different ambitions from those of the president. Tyler Durden Fri, 11/11/2022 - 18:20.....»»

Category: blogSource: zerohedgeNov 11th, 2022

Georgia county removes 2 poll workers after social media posts emerge showing them at the January 6 attack on the US Capitol

"I stood up for what's right today in Washington DC. This election was a sham. Mike Pence is a traitor," one of the Facebook posts said. Pro-Trump protesters gather in front of the U.S. Capitol Building on January 6, 2021 in Washington, DC.Jon Cherry/Getty Images Two poll workers were removed from their duties in Georgia's largest county on Tuesday. Facebook posts surfaced showing the poll workers at the deadly January 6 riot at the US Capitol. One post, shared with the Washington Post, read: "Mike Pence is a traitor." Two Georgia poll workers in Fulton County were removed from their duties on Tuesday after Facebook posts were discovered showing them at the attack on the US Capitol on January 6, 2021, the Washington Post reported.The poll workers, a mother and son, were removed shortly before voting started.One of the Facebook posts shared with the Post echoed former President Donald Trump's false claims about the 2020 election. The post said: "I stood up for what's right today in Washington DC. This election was a sham. Mike Pence is a traitor. I was tear gassed FOUR times. I have pepper spray in my throat. I stormed the Capitol building. And my children have had the best learning experience of their lives."Gabriel Sterling, the chief operating officer in the office of the Georgia Secretary of State, confirmed to CNN that the poll workers were removed."I am aware that it occurred. That really is a Fulton County internal issue. They have to mitigate the risk the way they see fit given that information," Sterling said, adding, "I think it would have been better if they found out earlier potentially and worked with the people, but since it was so last minute and it came to light so late, I leave it to Fulton County. But yes, that did happen earlier this morning."Nadine Williams, Fulton County's director of registration and elections, said on Tuesday that the Facebook posts were under investigation.Fulton County, which is the state's largest county, has been at the center of an ongoing probe into Trump's efforts to overturn the 2020 election results. Georgia was key to President Joe Biden's victory in 2020. Two days before the fatal January 6 attack, Trump called Georgia secretary of state Brad Raffensperger and urged him to "find" thousands of additional votes to help overturn his loss in the state. Trump and his GOP allies have continued to spread false and misleading information about elections in the US, prompting fears of violence surrounding the midterms.Shannon Hiller, the head of the Bridging Divides Initiative at Princeton University, told Insider that she's confident US elections will remain safe and secure. But Hiller also added, "What I'm more concerned about is the post-election period, when these persistent, unfounded claims of election fraud and calls for violence could intersect to spur individuals to violent action."Read the original article on Business Insider.....»»

Category: smallbizSource: nytNov 8th, 2022

Victor Davis Hanson: The Pathetic Democratic Pantheon

Victor Davis Hanson: The Pathetic Democratic Pantheon Authored by Victor Davis Hanson via AmGreatness.com, Joe Biden, Hillary Clinton, Barack Obama, and Nancy Pelosi are of no use to the Left in the midterms because it is their radical ideology that was finally enacted and wrecked the country... Over the last few months the four icons of the Democratic Party—Joe Biden, Hillary Clinton, Barack Obama, and Nancy Pelosi—have hit the campaign trail.  They’ve weighed in on everything from “right-wing violence” and “election denialists” to the now tired “un-American” semi-fascist MAGA voter—and had nothing much to say about inflation, the border, crime, energy, or the Afghanistan debacle. In this, they remind us just how impoverished and calcified is this left-wing pantheon.  So why should we take anything they say seriously, given their own records—and especially given their mastery of projecting their own shortcomings upon others as some sort of private exculpation or preemptive political strategy? Still Hopin’ and Changin’?  Barack Obama this past week has assumed the role of surrogate president. He is storming the country, while Joe Biden mopes at home or visits shrinking blue enclaves so he can claim post facto, “At least I was out there stumping.”  Over the last six years, we have become accustomed to Obama’s periodic getaways from one of his three estates. It is always the same. From time to time, he reenters politics to remind us that he did not just cash in on his presidency to become a multi-millionaire. Instead, he is still the Chicago “community activist” of his youth. And so, Obama will not be overshadowed by the Biden crew that is enacting all the crazy things he as president had warned were a bit much even for him.  At the funeral of the late John Lewis, Obama turned his eulogy into a political rant. He weighed in on the “racist” filibuster, the “Jim Crow relic” that he desperately sought in vain to use to stop the appointment of Justice Samuel Alito.  At campaign stops, he deplores “divisions” that he, more than any modern figure, helped create. The entire left-wing vocabulary of disparagement for the white lower-working classes (e.g., deplorables, dregs, chumps, irredeemables, etc.) got its start with Obama’s putdown of Pennsylvania voters who rejected him in the 2008 primaries as “clingers.”  In interviews, Obama suddenly now blasts harsh rhetoric—this from the wannabe tough guy who stole the “The Untouchables” line about bringing a knife to a gun fight. Well before crazy Maxine Waters’ calls to arms, Obama advised his supporters “get in their faces.” Still, on the campaign trail, Obama appears not so much animated as stale. It is as if he has been suddenly stirred from a long coma that commenced in 2008. It’s the same old, same old—sleeves rolled up. He still resorts to the scripted outbursts of mock anger. And the nerdy prep school graduate still amateurishly modulates his patois—now policy wonk, now breaking into the Southern African-American pastor accent when an audience needs more preachy authenticity.  He still tries to rev up his crowds with the familiar attacks: Republican demons will cut Social Security, the MAGA semi-fascists are captives of Donald Trump (as if the Democrats have not ceded their souls to woke hysterics), the Republican fanatics will all but kill women by denying abortions, and extremists unlike himself are dividing the country.  On and on, Obama shouts about social justice. And then he wraps up and must decide to which of his mansions he will fly home (via private jet)—Kalorama, Martha’s Vineyard, Hyde Park, or soon the Waimanalo estate. Obama offers no solutions much less hints at his own culpability in his sermons. There is nothing about the open border he helped birth. Nothing about Biden’s failed energy policies now bankrupting the middle class that were simply a reification of his energy secretary Steven Chu’s perverse wishes for European-priced gas (“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”).  There is nothing about Obama’s old boasts about shutting down coal plants and skyrocketing electricity (“Under my plan . . . electricity rates would necessarily skyrocket.”).  Nothing is said about the Skip Gates psychodrama and his blanket stereotyped attack on police, the tossing of his own grandmother under the racial bus, the Trayvon Martin racial editorialization, the Ferguson mythologies, and all his efforts to create a binary nation of oppressors and oppressed, as Obama himself determined who is the victim, who the victimizer. Drew Angerer/Getty Images The Role Model Pelosi After the terrible attack on her husband, House Speaker Nancy Pelosi’s colleagues are rightly calling for an end to extremist rhetoric. If we are to follow the Democratic clarion call, what might Pelosi herself do to help us to lower the temperature? Here are a few modest suggestions.  Contrary to press reports, conservatives deplored the attack on Paul Pelosi. They want his attacker behind bars with no bail until his trial date. And if convicted they wish him to serve a long sentence before parole is even considered. Let us dish out a proper punishment to David DePape; one that can serve as a model to all such thugs who do his kind of devilish work daily against the innocent and weak—but unlike him, are usually exempt from punishment. Recall that DePape should never have been in the United States. He is an illegal alien who violated his visa and should have had a warrant out for deportation, especially given his prior history of lawlessness. Would that the illegal alien who murdered innocent San Franciscan Kate Steinle had been subject to the likely punishment that now is awaiting DePape. So yes, we all must lower the temperature. As speaker of the House, Pelosi can do her part in quieting passions, given half the country are her fellow Americans who do not live in the darkness of lies. She might ask Joe Biden to quit calling them semi-fascists and un-American.  Pelosi herself should never again tear up her copy of the state of the union address on national television. In that congressional forum she was attacking the presidency, not just Donald Trump. Half the voters feel as strongly about Joe Biden as she does about Donald Trump. If, as House speaker, Kevin McCarthy (R-Calif.) were to follow Pelosi’s precedent and rip up the next Biden State of the Union, would Pelosi find that continuation of her precedent conducive to healing the nation’s wounds? Pelosi herself should not use any more violent imagery in expressing her anger at a president of the opposite party, much less threaten to use physical violence.  When she was asked to clarify what she meant in screaming about Trump (“I hope he comes. I want to punch him out. . . . I’ve been waiting for this . . . I’m going to punch him out, and I’m going to go to jail, and I’m going to be happy.”), she scoffed that she could not follow up on her threat only because Trump would never come to Congress to give her the opportunity.  Whatever one thinks of Trump, Pelosi only lowers the bar when she boasts about feloniously striking a president of the United States.  That Joe Biden had boasted twice about taking Trump behind the gym to beat him up, and others such as actor Robert DeNiro have echoed such threats (“I’d like to punch him in the face”) was no excuse for her reckless talk. After 2016 it was hard to calibrate all the ways the leftists had shouted ways of slaying Donald Trump—by stabbing, shooting, incineration, or decapitation. Pelosi should never again delay legislation aimed at protecting Supreme Court justices from the sort of violence that occurred when Justice Brett Kavanaugh was run out of a restaurant, or anti-abortion protesters swarmed his home, or a would-be assassin showed up at his house.  Why was Pelosi so fearful about expediting such added security? Would prompt action have empowered the factual narrative that the chief threat to Supreme Court justices now arises from radical abortion protestors? Pelosi might have reminded Democrats to tone down their rhetoric after the near-fatal shooting of Rep. Steve Scalise (R-La.). After all, the shooter was a highly political, left-wing activist and former Bernie Sanders’ volunteer. But she did no such thing. She could have privately reprimanded her own daughter that it was not a funny thing to cheer on the violent attack against Senator Rand Paul (R-Ky.), who suffered broken ribs, a collapsed lung, pneumonia, and had to undergo pulmonary surgery.  When the younger Pelosi used her family name to gain traction by tweeting “Rand Paul’s neighbor was right,” (if she had used her married last name would anyone have read it?), it sent the message that there was a sort of happiness on the Left that a political opponent had been a target of violence. The Left is furious at Donald Trump, Jr. for crudely mocking the Pelosi assault, but he unfortunately followed a precedent long set by others. Kyle Mazza/Anadolu Agency via Getty Images She’s Back! Hillary Clinton is occasionally asked to weigh in on the midterm campaigns, but never in a swing state or hotly contested race. Her presence, like that of Joe Biden’s, would immediately lose the endorser a critical 1-2 points.  Clinton recently warned that the 2024 election likely will be illegitimate due to Republican instigated “voter fraud.”  Her outburst can be translated into something like, “The midterm left-wing wipeout may be just a preliminary to a 2024 Democratic disaster.” Hillary preempted Biden who, in his third and latest McCarthyite speech, warned that the “Mega Maga” people are planning devilry years in advance and so, like Hillary, he can now cast doubt on the legitimacy of future elections the Democrats will lose.  In truth, no one has done more in the last century to impugn the integrity of U.S. elections than Hillary Clinton. She has questioned the 2016, 2020, and 2024 elections, on the theory that any election Democrats might lose is an “attack on democracy.”  Her sins go way beyond feloniously destroying subpoenaed emails and devices or leveraging her New York senatorial run by Bill Clinton’s presidential pardons or using her office to enrich her family’s foundation as in the case of Uranium One.  When we return to sane times, historians will assess her 2016 efforts to destroy her opponent, his transition, and his presidency as the greatest election scandal in modern memory. She used three paywalls to hide her efforts to hire foreign national Christopher Steele (who was simultaneously working with the FBI).  On spec, she used her own contacts such as Charles Dolan to fabricate a phony hit dossier against her opponent and then to seed it within the media and the Obama bureaucracy to smear Trump. Not content with that failed and likely illegal effort, she then declared the duly elected president illegitimate and the 2016 election all but stolen.  Her Hollywood friends cut videos begging electors to renounce their constitutional duties, ignore their state tallies, and vote instead for Hillary. Had they gotten their way, the entire federal election system as we know it would have been destroyed. Then her surrogate, Green Party candidate Jill Stein, sued to overturn the election. Clinton bragged of joining #TheResistance in mock-heroic terms. As an arch-denialist, she urged Joe Biden under no circumstances to concede to Trump if he lost the 2020 vote.  And now she warns us of others who might emulate her own denialism?  What does Hillary fear in 2024? That a Trump or DeSantis will hire a Steele-like fraud to fabricate Democrat-Chinese collusion and smear a Democrat nominee? That the loser will not concede as she once urged, or the winner is illegitimate as she once insisted? Good Old Joe Is Just Old Joe Instead of a list of supposed communists, Joe Biden apparently has a roster of “election denialists” who he says are running for Senate and Congress and whom he fears will win next Tuesday. And he sets the example for others like House Majority Whip James Clyburn (D-S.C.)—himself a 2004-05 election denialist—who now smears his opponents as Nazis who, he fears, by democratically voting Democrats out of office nationwide will “destroy democracy.”  What will Biden not lie about? The death of his son, the circumstances in which his first wife died in a car wreck, the fantasy congressional vote on his student-loan forgiveness scheme? The number of states (Joe says, 54, Obama used to swear there are 57)? The very century we are now in? Where he went to college?  Joe, our own Walter Mitty, has variously been a semi-truck driver, an arrested South-African street protestor against apartheid, a surrogate Puerto-Rican child, a black college enrollee, a Ciceronian populist orator, a coal miner’s scion, an honors student, a blue-chip collegiate athlete, a defender against inner-city Corn Poppers, and absolutely ignorant about the Biden family syndicate. Recall that a non compos mentis Biden was nominated solely as the thin veneer to a hard Left agenda whose avatars were unelectable. Biden was to feign being the colorless, stand-in “moderate” who would “unify” the fractured country, tone down the Trump rhetoric, and let the Trump record sort of proceed on autopilot.  Then when he played out that part and won, the leftist minders in this Faustian bargain took over to push through, on a one-vote senatorial margin, the most radical left-wing agenda in U.S. history.  Biden, however, took his role too seriously. He reverted to the mean-spirited, pre-senile blowhard Joe—the obnoxious messenger thus now making the noxious message even more toxic.  A retiring, silenced, good old Joe from Scranton was the script, not a doddering, incoherent, ”get off my lawn” old man shouting for the need of socialist policies that were the exact opposite of his previously supposed convictions.  The Left got their Biden. And yes, he turned over the reins of government to them. And yes, they got their neo-socialism for two years. And yes, they are destroying America as we knew it. But in doing this, the people had the rare occasion to see fully and experience the nihilist Left. And they are now about to express their loathing for what the Left has wrought.  The problem with the ossified Democratic Pantheon is that they are of no use to the Left in the midterms because it is their own radical ideology over the past two years that was finally enacted and wrecked the country. And all the shrieks about abortion, semi-fascists, and democracy dying cannot put back together what they shattered. Tyler Durden Mon, 11/07/2022 - 23:45.....»»

Category: smallbizSource: nytNov 8th, 2022

US Futures Stabilize After Rollercoaster Session As Yuan, Chinese Stocks Crater

US Futures Stabilize After Rollercoaster Session As Yuan, Chinese Stocks Crater US stock futures steadied following a rollercoaster move earlier in the session and after Friday’s sharp rally as traders assessed moves by Chinese President Xi Jinping to tighten his grip on the nation’s leadership while keeping an eye on macro data now that the Fed is in a chatterbox blackout. Contracts on the S&P 500 edged 0.7% higher at 7:30a.m. in New York after earlier rising as much as 1.3% and dropping 0.7%, while the yield on the 10-year Treasury slipped for a second session. Nasdaq 100 futures were up 0.4% after bouncing between gains and losses earlier. Both underlying gauges are coming off their best week since June, and are entering the busiest week of the earnings season with 46% of the S&P 500’s market cap due to announce third-quarter results. A gauge of the dollar’s strength rose sharply unwinding some of Friday's losses, supported by a risk-off mood sparked by a rout across Chinese markets which saw the Hang Seng plunge 6.4%, the biggest one day drop since 2008! The offshore yen resumed its decline, tumbling by 1.3% - the biggest one-day slide since August 20019, to a record of 7.31, while the pound outperformed on bets for fiscal caution from the next UK prime minister. “Market sentiment could remain cautious near-term on China, on concerns of a shift of focus toward more state control versus a market-driven approach under the new leadership team,” said Xiaojia Zhi, the chief China economist at Credit Agricole CIB. “The exit path from zero-Covid is not yet clear.” Chinese economic data that was delayed last week and published Monday showed a mixed recovery, with unemployment rising and retail sales weakening despite a pickup in growth. Yet Xi’s Covid-zero campaign looks likely to continue to drag on the economy and there has been speculation that his “common prosperity” goal may even lead to property and inheritance taxes. “It’s clear demand is slowing but so far we’ve seen pockets of tech like software, cloud computing still being quite resilient,” said Laura Cooper, a senior investment strategist at BlackRock International Ltd., on Bloomberg TV. “We will be watching for any signs of cracks coming through that could put a dent to some of these earnings expectations.” In premarket trading, US-listed Chinese stocks tumbled, dragged lower by major internet and EV names including Alibaba, Baidu and Li Auto, which closed down more than 11%; search company Baidu was 12% lower while food delivery firm Meituan tanked more than 14%. The moves come after Chinese President Xi Jinping paved the way for an unprecedented third term as leader and packed the Politburo standing committee with loyalists. Tesla shares dropped after the company cut prices in China, reversing hikes imposed earlier this year.US stock futures steadied after Friday’s rally as traders assessed moves by Chinese President Xi Jinping to tighten his grip on the nation’s leadership. Other notable premarket movers: US-listed Macau casino stocks are also down, declining along with Chinese ADRs. Las Vegas Sands (LVS US) -7.9%, Wynn Resorts (WYNN US) -6.8%, Melco Resorts (MLCO US) -8.6% FedEx (FDX US) declines 1.9% in premarket trading after it was cut to equal-weight from overweight at Wells Fargo on concern that the revenue implications are not yet “fully captured” as the company pivots from growth and toward efficiency. Keep an eye on Williams-Sonoma (WSM US) stock as it was downgraded to underperform from hold at Jefferies, with broker saying it sees the home furnishing store operator underperforming ahead of a softer macroeconomic environment. Watch NXP Semiconductors (NXPI US) and Analog Devices (ADI US) shares as they were downgraded at Barclays, with the brokerage saying it expects cuts in the analog chip sector in the coming year and recommended “rotating out of the sub-sector sooner rather than later.” US investors have begun looking beyond the Federal Reserve’s ongoing tightening to a stage when it may begin to slow rate hikes. St. Louis Fed President James Bullard and his San Francisco counterpart Mary Daly made it clear they expect discussion at the November meeting to include debate on how high to raise rates and when to ease the pace. At the same time, Morgan Stanley’s Michael Wilson expects stocks to grind higher as markets transition to expectations of falling inflation and lower interest rates. The strategist, who correctly predicted this year’s slump, sees the S&P 500 Index bouncing as much as 15% if it breaches its 200-week moving average of 3,605 points, about 4% below Friday’s close. A similar view is held by Stifel Nicolaus & Co. strategists, who said in a separate note they see the benchmark rallying to 4,300 points in the next 6 months. "With the back end of the bond market offering real value for the first time since early 2021, rates are poised to come in," Wilson in a note on Monday. “Such a move could provide the necessary fuel for the next leg of the tactical rally in stocks until we get full capitulation on 2023 earnings estimates, something we think may take a few more months.” By contrast, Goldman Sachs Inc. strategists led by David Kostin are more cautious, seeing rising rates and slowing US growth hurting cyclicals and tech stocks. They recommend being overweight defensive sectors, as well as energy. In Europe, the Stoxx Europe 600 Index held an advance of about 1.3%. Media, utilities and travel are the strongest-performing sectors in Europe while miners and energy lag. IBEX outperforms peers, adding 0.9%, FTSE 100 lags, dropping 0.4% after Boris Johnson pulled out of the race to lead the UK’s ruling Conservative Party, placing Rishi Sunak closer to becoming the next prime minister.  A 12% slump in Prosus NV shares amid the China concerns pushed the technology sector into the red, while basic resources and energy stocks weighed on the benchmark amid lower commodity prices. Michelin shares rose as much as 3.7% in Paris trading and are the day’s top performers on the Stoxx 600 Automobiles & Parts Index, with the French tiremaker set to give a quarterly sales update on Tuesday. Here are the biggest European movers: Pearson shares jump as much as 7.8%, reaching the highest since January 2019, after the publishing and education company reported a 7% increase in underlying revenue in the first nine months of the year. Indivior gains as much as 7.6%, the most since February, after Morgan Stanley upgrades to overweight from equal-weight, describing the stock as a “value, growth and margin expansion story.” Auto Trader rises as much as 4.3% after announcing the disposal of Webzone Ltd. Peel Hunt upgrades to buy from hold, saying the sale shows the company’s “dedication to its key market.” Temenos climbs as much as 8.2%, the most intraday since mid-June, after Dealreporter reported that Goldman Sachs and Citi are sounding out interest in the buyout of the Swiss banking software developer. Prosus falls as much as 14% in Amsterdam and parent Naspers sinks as much as 14% in Johannesburg, with both declines the sharpest since March. Naspers holds a 28% stake in Tencent, which plunged in Hong Kong trading following President Xi Jinping’s move to stack his leadership ranks with loyalists. Galp drops as much as 6.1% after reporting third-quarter profit that missed the average analyst estimate. Philips falls as much as 4.5% to the lowest since 2011 after saying it would cut 4,000 jobs as part of a EU300 million cost-saving package, which analysts say may imply liquidity problems for the Dutch medical technology firm. Asian stocks fell, dragged by Chinese shares as President Xi Jinping’s move to tighten his leadership deepened investor worries, offsetting advances in Australia, South Korea and Japan. The MSCI Asia Pacific Index erased an earlier gain to drop as much as 1.2%, with Internet giants Tencent and Alibaba the biggest drags.  A selloff in Chinese stocks deepened in afternoon trading, as the Hang Seng plunged by more than 6%, its biggest drop since Lehman while the Hang Seng Tech Index crashed 9.7% to the lowest since February 2016, after Xi filled China’s most powerful bodies with close allies while securing a precedent-breaking third term. He installed six trusted associates alongside him on the Politburo’s supreme Standing Committee and put his former chief of staff Li Qiang in line for the premiership. Investors remained jittery as a leadership reshuffle highlighted Xi’s unquestioned grip over the ruling party, with allies set to take up key economic posts. An early loosening of Covid restrictions seemed less likely, while a set of long-delayed economic data showed a mixed recovery, further damping market sentiment. “The latest rally underlines our view that markets will remain volatile, and investors should prepare for large moves in both directions,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “Incremental improvements in inflation or labor market data, indications of economic resilience, any softening of language from the Fed, has the potential to drive a market bounce, as we have seen in recent days.” “Markets may be hoping now that the leadership transition is finalized, the focus will turn to the economy and mending the property sector,” said Marvin Chen, a strategist at Bloomberg Intelligence, adding that property investment is still a weak spot for the economy. “Still, these may take time. We may not see much change to Covid policies in the near term.” The declines in Chinese shares contrasted with the upbeat mood elsewhere in Asia, buoyed by declines in US Treasury yields and Federal Reserve officials’ indications of a potential slowing of rate hikes. Markets were closed for holidays in Singapore, India, Malaysia, Thailand and New Zealand In FX, the Bloomberg Dollar Spot Index rose, paring some of Friday’s losses and the greenback was steady or higher against all of its Group-of-10 peers. The pound jumped and gilts led Treasuries and European bonds higher as investors bet that Rishi Sunak would bring more stability to the country’s financial markets. Initial moves were however tempered, and the pound inched lower, sliding back under 1.13 after earlier rallying by as much as 0.9% to $1.1409. China’s offshore yuan led the decline in most emerging Asian currencies as traders assessed the impact of President Xi Jinping’s consolidation of power. Indonesia’s rupiah outperformed peers, supported by higher nickel prices. China’s onshore yuan weakened to a 14-year low while stocks headed for their biggest daily plunge in Hong Kong since the 2008 global financial crisis. Market setbacks following the reshuffle highlighted President Xi Jinping’s unquestioned grip over the ruling party and showed deep disappointment over a likely continuation of policies staked on Covid Zero and state- driven companies. The euro retreated after earlier rising to more than a two-week high of $0.9899. Eurozone composite PMI fell to 47.1 in October; economists had expected 47.6 The yen fell by more than 1%, to trade above 149 per dollar, after earlier surging to as much as 145.56 after suspected interventions by Japanese authorities Australian dollar declined against all of its G-10 peers after the Reserve Bank said it isn’t yet worried about the risk of imported inflation from a falling currency. Reports of fresh Covid restrictions in Guangzhou helped fuel a drop in China stocks and the yuan, pushing the Aussie even lower In rates, Treasuries trade off best levels of the session, although intermediate and long-end yields remain richer by 5bp-6bp. Gilts lead a global bond market rally, with front-end yields down nearly 40bp after Rishi Sunak emerged as the frontrunner to become new UK Prime Minister.  10-year TSY yields trade around 4.15%, richer by ~7bp on the day, trailing gilts by 18bp, bunds by 4bp in the sector; US 2s10s is ~5bp flatter on the day while gilt curve steepens. Treasuries extended their late-Friday rally during Monday’s Asia session, adding to a move sparked by comments from Fed’s Daly, who said policy makers should start planning for a reduction in the size of interest-rate increases, and a WSJ article predicting they will debate the size of future hikes in November. According to Bloomberg, dollar issuance slate includes OKB $1b 3Y and Cades 3Y; $20b of new bond sales are expected this week as companies emerge from earnings blackout periods; banks including JPMorgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. could all come to market soon. Commodities were clipped as the USD rebounded and recessionary concerns mount (again); crude benchmarks are hampered on such factors, though similarly to US equity futures have recently eased off lows. Specifically, WTI and Brent benchmarks post downside of circa. USD 1.00/bbl compared to losses just shy of USD 2.00/bbl at worst. Both precious and base metals are broadly speaking under pressure; currently, Gold is impaired by circa. USD 10/oz and has been pushed back below the 10-DMA at USD 1650/oz. QatarEnergy head said the Co. is open to discussing working with Shell (SHEL LN) in all energy sectors, via Reuters. Looking at today's calendar, we get the US October PMIs, and September Chicago Fed national activity index, we also get PMI updates from Japan, UK, Germany, France and the Eurozone. Market Snapshot S&P 500 futures up 0.7% to 3,792 STOXX Europe 600 up 0.5% to 398.32 MXAP down 1.1% to 134.36 MXAPJ down 2.0% to 431.12 Nikkei up 0.3% to 26,974.90 Topix up 0.3% to 1,887.19 Hang Seng Index down 6.4% to 15,180.69 Shanghai Composite down 2.0% to 2,977.56 Sensex up 0.2% to 59,307.15 Australia S&P/ASX 200 up 1.5% to 6,779.36 Kospi up 1.0% to 2,236.16 German 10Y yield down 0.2% at 2.41% Euro down 0.3% to $0.9831 Brent Futures down 1.8% to $91.86/bbl Gold spot down 0.6% to $1,647.67 U.S. Dollar Index up 0.25% to 112.29 Top Overnight News from Bloomberg A sense of exasperation swept across Chinese markets as President Xi Jinping moved to stack his leadership ranks with loyalists, with stocks capping their worst day in Hong Kong since the 2008 global financial crisis and the yuan weakening to a 14-year low The ECB is priming another hefty hike in interest rates this week as the attention increasingly switches to how high it will eventually push Japan’s government will set out its expectation that the central bank watches the impact of moves in financial markets while emphasizing the two sides’ cooperation on policy, according to a draft of an upcoming stimulus plan obtained by Bloomberg Most of Japan’s currency intervention, confirmed and suspected, took place outside of regular trading hours, with the exception of probable action Monday -- unlike moves in 2010 and 2011 to weaken the yen. In contrast to that period, the government has only stated it intervened once, with the reluctance to do so seen as an additional tool to deter speculators Much of continental Europe is poised for an unusually warm end to the month, with Paris seeing temperatures more common on a summer day than well into the heating season A more detailed look at global markets courtesy of Newsquawk Asia-Pacififc stocks traded mixed after the initial optimism from Wall Street on Friday began to fade. ASX 200 was boosted by its commodities sector as the rise in underlying metals supported mining names in the region. Nikkei 225 was also  firmer but lagged behind peers (ex-China) following the touted FX intervention on Friday and again on Monday. KOSPI was led by gains in its IT names, but the region felt some jitters following an exchange of fire between North and South Korea after a North Korean boat crossed the South Korean maritime border. Shanghai Comp. initially traded flat after Chinese President Xi secured an unprecedented third term as the party leader, as expected. Chinese President Xi also suggested China's economy has high resilience and sufficient potential. The index also saw some brief upside after China released a myriad of delayed economic data, with Q3 GDP Y/Y topping forecasts and Trade Balance printing a larger surplus than expected, whilst exports also increased more than forecast, although these gains pared back. Hang Seng buckled as Xi’s leadership overhaul could prove to result in prolonged oversight and less autonomy for Hong Kong, with the Hang Seng Tech Index slumping over 5% and Alibaba, Tencent, JD.com, Baidu and Meituan shedding as much as 7-10%. Asia Data Recap Chinese GDP (Q3) Y/Y 3.9% (Exp. 3.3%, Prev. 0.4%); Q/Q 3.9% (Exp. 3.5%, Prev. -2.6%) Chinese Trade Balance (Sep) (USD) Y/Y 84.7bln (Exp. 80.3bln, Prev. 79.39B); Exports +5.7% (Exp. +4.0%, Prev. 7.1%), Imports +0.3% (Exp. 1.0%, Prev. 0.3%) Chinese Retail Sales (Sep) Y/Y 2.5% (Exp. 3.0%, Prev. 5.4%); YTD Y/Y 0.7% (Exp. 0.9%, Prev. 0.5%) Chinese Industrial Output (Sep) Y/Y 6.3% (Exp. 4.8%, Prev. 4.2%); YTD Y/Y 3.9% (Exp. 3.7%, Prev. 3.6%) Chinese Fixed Investments (Jan-Sep) 5.9% (Exp. 6.0%) Australian Composite PMI (Oct) 49.6 (Prev. 50.9); Services PMI (Oct) 49.0 (Prev. 50.6); Manufacturing PMI (Oct) 52.8 (Prev. 53.5) Japanese Jibun Manufacturing PMI (Oct) 50.7 (Prev. 50.8); Services PMI (Oct) 53.0 (Prev. 52.2); Composite PMI (Oct) 51.7 (Prev. 51.0) Top Asian News China suspended in-person schooling and dining-in at restaurants in a district in Guangzhou, "stoking concerns about the potential for disruption in the southern Chinese manufacturing hub that’s home to about 19mln people", Bloomberg reported. PBoC injected CNY 10bln via 7-day reverse repos at a maintained rate 2.00% for a daily injection of CNY 8bln. Japan's Top Currency Diplomat Kanda will not comment on whether they intervened in FX markets and said there is no change in stance that "we are ready to take action 24/7" and will continue to take appropriate action, via Reuters. Japan's Top Currency Diplomat Kanda offered no comments on intervention on Monday morning. Japanese Finance Minister Suzuki said no comment on FX intervention; currently trying to confront speculators; monitoring FX with a high sense of urgency. USD/JPY drop on Monday likely due to intervention, according to market participants cited by Reuters. Japanese government urges the BoJ to remain vigilant to the impact of sharp market moves, according to a draft document cited by Reuters. The Japanese government and the BoJ decided to intervene in FX on Friday by buying the Yen and selling the Dollar, according to Nikkei sources citing sources. Japan's FX intervention on October 21st is estimated at JPY 5.4-5.5tln, according to market sources and calculations cited by Reuters. BoJ Governor Kuroda said CPI growth beyond next FY likely to fall below 2%, will continue to put all effort into achieving price target along with rise in wages. Japanese gov't expects the BoJ to watch the impact of market moves, via Bloomberg citing a document; to collaborate closely with the BoJ on the policy mix; Finance Minister will not comment on FX intervention. Japan is to ease rules in relation to brokerages offering investment advice, according to reports citing Nikkei. Japanese Economy Minister Yamagiwa is planning to step down, according to NHK. South Korea is to expand its corporate-bond buying program, according to the finance minister cited by Reuters. RBA's Kent reiterated the Board expects to increase interest rates further in the period ahead; size and timing of rate increases in Australia will depend on incoming data. European bourses are mixed, though are well off lows, as initial strength faded following the open amid renewed USD strength and as PMIs flash ongoing recessionary/inflationary concerns. Sectors are a touch mixed amid the above action, Energy remains the standout laggard amid the complex's broader price action. US futures have managed to make their way back to being essentially unchanged on the session, as the initial bout of underperformance eases as US participants enter the fray pre-PMIs. Top European News UK's Boris Johnson has pulled out of the Conservative Party leadership contest, according to The Times' Swinford. UK's Boris Johnson and Rishi Sunak failed to strike a deal in talks on Saturday, according to the Times. UK leadership candidate Rishi Sunak so far received support from 147 MPs vs 24 for Penny Mordaunt. The deadline to reach the 100 threshold is at 14:00BST/09:00EDT on Monday. UK leadership candidate Penny Mordaunt will stay in the race as she reportedly sees a route to 100 nominations now Boris Johnson is out, according to sources cited by Bloomberg's Wickham. UK Chancellor Hunt backs Rishi Sunak for PM, via The Telegraph. UK Chancellor Hunt is said to be mulling up to GBP 20bln of tax rises in the October 31st budget, according to The Telegraph. The October 31st fiscal statement could be delayed after PM Truss' resignation, according to the FT. UK Chancellor Hunt is expected to extend the current freeze in income tax and allowances into the next parliament, according to FT citing sources. BoE's Mann said bond purchases for financial stability were targeted and temporary, and the start of bond selling on Nov 1st shows the BoE does not feel like its hands are tied. Mann said it is the BoE's job to address financial stability risks. Moody's affirmed UK's rating at Aa3; revised outlook to "Negative" from "Stable. FX Dollar regroups after Friday's reversal on less hawkish Fed dynamic and reports of Japanese intervention, DXY above 112.500 at best vs 111.760 low. Sterling underpinned ahead of deadline in race to be next UK PM with Sunak hot favourite to succeed, Cable holding within 1.1400-1.1300 range. Yen reverses from peaks as official buying momentum wanes, USD/JPY up to 149.70 from sub-145.50 at one stage. Aussie underperforms ahead of Budget that is expected to see growth forecast downgraded, AUD/USD under 0.6300 and Kiwi down in sympathy on NZ Labour Day as NZD/USD declines through 0.5700. Offshore Yuan below 7.3000 vs Buck as China tightens COVID restrictions in key southern manufacturing hub. Euro fades from a fraction below 0.9900 towards 0.9800 after broadly weak PMIs and amidst heavy option expiry interest. PBoC set USD/CNY mid-point at 7.1230 vs exp. 7.1173 (prev. 7.1186); weakest fix since June 1st 2020. Commodities Commodities clipped as the USD regains poise and recessionary concerns mount; crude benchmarks are hampered on such factors, though similarly to US equity futures have recently eased off lows. Specifically, WTI and Brent benchmarks post downside of circa. USD 1.00/bbl compared to losses just shy of USD 2.00/bbl at worst. Both precious and base metals are broadly speaking under pressure; currently, Gold is impaired by circa. USD 10/oz and has been pushed back below the 10-DMA at USD 1650/oz. QatarEnergy head said the Co. is open to discussing working with Shell (SHEL LN) in all energy sectors, via Reuters. China sold 100% of wheat offered at auction of state reserves on Oct 19th, according to Reuters citing the traded centre; sold at an average price of CNY 2,829/t. CCP National Congress Chinese President Xi secured an unprecedented third term as Chinese Communist Party (CCP) leader, as expected. The CCP amended its constitution to include "two establishes" and "two safeguards" to "cement" Xi Jinping's status as the core of the party, according to Reuters. Chinese President Xi is to head the communist party's central commission for discipline inspection, according to state media. The new CCP Politburo Standing Committee includes Li Qang, Li Xi, Ding Xuexiang, Cai Qi, Zhao Leji, Wang Huning, according to state media. The new Central Committee (comprising of 171 alternate members) does not include Liu He, Han Zheng, Sun Chunlan, Yi Gang, Guo Shuoing, Chinese President Xi said China's economy has high resilience, sufficient potential and has room for manoeuvre. Xi said China will open its doors even wider. Xi said China must ensure the CCP continues to be the backbone people can lean on, according to state media. Geopolitics Russian Defence Minister held phone calls with the US Pentagon Chief, UK Defence Minister, and the French Armed Forces Minister, according to Interfax and Reuters. French Armed Forces Minister has confirmed Russian Defence Minister told him Russia fears that Ukraine may use a "dirty bomb" on Russian territory. Russia's Shoigu warns of 'uncontrolled escalation' in Ukraine conflict, via Reuters. Ukraine's Foreign Minister spoke with US Defence Secretary Blinken and said they both agreed the Russian rhetoric on "dirty bombs" is aimed at creating a pretext for a false flag operation. They also discussed further practical steps to boost Ukraine’s air defense. Russian forces continued to target Ukraine's energy and military infrastructure over the weekend, according to the Russia Defence Ministry cited by Interfax. Russian authorities said two pilots died in a military plane crash into a residential building in Irkutsk, Russia, according to Interfax. Russian Deputy Foreign Minister said Russia completely reject any demilitarized zones in the vicinity of the Zaporozhye station, Via Al Jazeera. Russia continues to use Iranian uncrewed aerial vehicles (UAVs) against targets throughout Ukraine, according to the UK Ministry of Defence. US Event Calendar 08:30: Sept. Chicago Fed Nat Activity Index, est. -0.10, prior 0 09:45: Oct. S&P Global US Manufacturing PM, est. 51.0, prior 52.0 09:45: Oct. S&P Global US Composite PMI, est. 49.2, prior 49.5 09:45: Oct. S&P Global US Services PMI, est. 49.5, prior 49.3 DB's Jim Reid concludes the overnight wrap Morning from the middle of a forest in Center Parcs. We’ve had a biblical amount of rain, flash flooding in the resort and a weekend of over excitable children. We’re off to a safari park today where monkeys jump on your car. Only 24 hours before I can escape on a plane to New York. As we start a new week where we’re now in the Fed blackout period ahead of next week’s FOMC, we’re perhaps starting the 6th attempt this year at the Fed pivot trade. This only started on Friday as well-connected Nick Timiraos (WSJ) suggested that while a 75bps hike at the Fed’s next meeting was set to go ahead, officials were also likely to discuss “whether and how to signal plans to approve a smaller increase in December.” Whether this gets any further than the previous failed attempts to reprice markets only time will tell but with markets pricing in a terminal rate of over 5% prior to this, at least this is the first one that starts from anything vaguely resembling a realistic starting point given where inflation is. San Fran Fed President Daly also said on Friday that the Fed should start planning for a shift down in the pace of hikes but added that they are not there yet. The news helped price -8.0bps less Fed tightening by year-end on Friday, whilst also triggering a significant one-day decline in the 2yr Treasury yield of -13.8bps (-16bps post Timiraos). In turn the S&P 500 completed its strongest weekly performance since June, advancing +4.74% (+2.37% Friday). Futures are +0.3% this morning. The longer end rallied 12bps off the highs but was only -1.2bps on Friday as the same article discussed how the Fed could also signal a higher dot plot for 2023. Net net this left the biggest curve steepening since the pandemic (-12.2bps) which given that its not a huge move shows how massively flatter the curve has been since then. This morning in Asia 2 and 10yr yields are -4.3bps and -6.7bps lower respectively and this continuing the momentum from Friday. In the cold light of day (and it’s cold and dark in the forests of Center Parcs this morning), these more dovish stories are all plausible but between next week’s FOMC and the December equivalent we have CPI and NFP twice. So plenty of cold or hot water to flow under the bridge before then. On balance there are few signs at the moment that core inflation is about to see a rapid about turn and the Fed will be data dependent so it'll be impossible to have high conviction on what they do next without a strong view on the data. Before we examine the week ahead we should note that overall the 10yr yield ended last week up by +19.8bps (-1.2bps Friday), which marked its 12th consecutive weekly rise, and is also its longest run since 1984 when Paul Volcker was Fed Chair. So we need to put things into some perspective. In light of all this maybe the most interesting data this week comes on Friday with the Q3 employment cost index (DB at +1.1% vs. +1.3% last month) and the September personal income (+0.1% vs. +0.3%) and consumption (+0.3% vs. +0.4%) report, including the core PCE deflator (+0.58% vs. +0.56%). With respect to core PCE, our economists expect the Fed's preferred measure of inflation to rise by 40bps to 5.3%. Our economists highlight that as the median forecast for 2022 core PCE inflation in the Fed's Summary of Economic Projections from the September 21st meeting was 4.5%, it’s going to be tough to signal a downshift in December. Elsewhere this week the main highlights are the ECB (Thursday) and the BoJ (Friday) decisions and a huge round of earnings with big Tech the highlight. We’ll also have a new UK Prime Minister by Friday with a possibility we may have one after today’s ultra compressed rounds of Parliamentary votes. After Boris Johnson pulled out late last night it is possible that only tactical voting will stop ex-Chancellor Sunak being declared PM tonight. We’ll also see US Q3 GDP (Thursday) and flash PMIs in the US and Europe (today) and October CPIs and GDP for many European countries (Friday). There are other data which are in the day by day guide at the end as usual for a Monday but let’s take a brief look at the highlights outside the already discussed PCE. The ECB's decision on Thursday will be a big event with our European economists expecting another +75bps hike (72.3bp priced in), followed by +75bps in December (c.62bps priced in), +50bps in February (c.38bps priced), and +25bps in March, reaching a terminal rate of 3%. The press conference as ever will be a focal point and there’ll be lots of attention on technical things surrounding TLTROs and excess reserves. For more on the options here see our fixed income strategists blog from Friday here. Staying with central banks, over in Japan, the BoJ announces its decision on Friday amidst continued downward pressure on the yen, which hit a 32-year low against the dollar of 151.95 on Friday before surging again to end the week at 147.65 - c.3.5% swing while the Japanese slept after Nikkei reported fresh intervention from the Japanese authorities. The Yen has again seen a wild session in Asia. After falling again to 149.67 it surged to 145.65 and now trades at 148.88 as we go to press with no clarity on if and what intervention has been done. For US Q3 GDP this week, our US economists expect real growth to rebound to +3.0% from Q2's -0.6%. Q3 GDP figures will also be out for European countries on Friday, including for Germany and France with the former likely to be slightly negative and the latter slightly positive. Overall it’s likely to be the start of growth grinding towards or below zero and then staying negative for a few quarters. On European CPI on Friday remember September readings saw Germany's CPI reaching 10% for the first time since 1950. Earnings will come thick and fast this week, featuring the big tech, oil majors and key automakers and staples. In tech alone we have Microsoft, Alphabet (tomorrow), Meta (Wednesday) and Apple and Amazon (Thursday). A huge slug (20% by market cap) of the S&P 500 in 48 hours. Other notable tech firms reporting results will include Intel, Twitter, SAP and Samsung. The other main reporters are in the day by day week ahead at the end. Asian markets are higher outside of China/HK this morning with the Nikkei (+0.62%) and the KOSPI (+0.87%) up but with the Hang Seng (-4.99%) and the Shanghai composite (-0.89%) lower as markets worry about the policy direction of travel after the ending of the 20th Party Congress. We've also finally seen the monthly data dump out of China and despite a beat on Q3 GDP (+3.9% vs +3.3% expected) and industrial production (+6.3% vs 4.8%), we saw weaker retail sales (+2.5% vs +3.0%) and jobless rate (5.5% vs 5.2%). Looking back to last week, we've already discussed the US rates and equities pricing at the top. Over in Europe, gilts outperformed other sovereign bonds over the week as a whole thanks to the government’s Monday U-turn on the mini-budget. However, they became a major underperformer again on Friday as investors contemplated the likelihood that former Prime Minister Johnson could return to office. All-in-all that left 10yr yields down -28.2bps over the week (+14.1bps Friday), and after the close we heard that Moody’s had affirmed the UK’s credit rating but cut the outlook to negative. Elsewhere in Europe though there was a similar pattern to Treasuries, with 10yr bund yields also rising for a 12th week in a row with a +7.0bps gain over the week (+1.4bps Friday). At the same time, the STOXX 600 put in its best week since July, with a +1.27% advance (-0.62% Friday). Finally last week, European natural gas futures fell -20.02% (-10.67% Friday) to €114 per megawatt-hour after EU leaders endorsed a plan to cap gas prices. Tyler Durden Mon, 10/24/2022 - 08:12.....»»

Category: smallbizSource: nytOct 24th, 2022

How a conviction in Trump Org"s upcoming trial could bar Trump from federal contracts, even for Secret Service

The Trump Organization tax-fraud trial starts Monday in Manhattan. A conviction could end Trump's right to do business with the federal government. Former President Donald Trump, left, and the exterior of Trump Tower, where the Trump Organization is headquartered.Justin Sullivan/Getty Images, left. Nicolas Economou/Getty Images, right. Jury selection begins Monday in the Trump Organization tax-fraud trial. Trump could be banned from doing business with the federal government if his company is convicted. A ban could end his 'exorbitant' billing of Secret Service agents who protect him at his resorts.  Donald Trump's real-estate and golf-resort empire goes on trial in Manhattan on Monday, kicking of proceedings in a low-level corporate fraud case with high financial stakes, including millions in potential fines and tax penalties.But there's another threatened cost, and it's something government spending watchdogs have been urging for years.Conviction could prompt the government to bar the Trump Organization from doing business as a federal contractor, including cutting off the spigot of Trump's lucrative — and critics say exorbitant — billing of Secret Service agents who stay at his properties while protecting the former president and his family.Trump is hardly the ideal government contractor as it is, watchdogs say, after his many brushes with fraud allegations and given federal regulations requiring "an impeccable standard of conduct."Those regulations also recommend "debarment," or blacklisting, of any company convicted of such business-related crimes as "forgery, bribery, falsification or destruction of records, making false statements [and] tax evasion."A conviction in this payroll tax-fraud trial would only increase calls to blacklist Trump, according to Steven L. Schooner, who teaches government procurement law at George Washington University Law School.Schooner has complained stridently over the years as the feds continued to do business with Trump despite two impeachments, an inauguration scandal, questions over his Trump International Hotel in DC, and the forced dissolution of Trump University and the Trump Foundation by the same New York attorney general's office now alleging he pocketed $250 million through financial fraud.Add to that the recent news that the Trump Organization had billed the Secret Service more than $ 1.4 million to stay at Trump properties during the former president's time in office.The Secret Service paid Trump as much as $1,185 per night for a single room at his DC hotel, and once signed a $179,000 contract for golf cart rentals at his golf resort in Bedminster, New Jersey."The rules that apply to typical government contractors have never applied to Trump Organization, and frankly, that's the most depressing and pernicious aspect of this pathetic saga," Schooner said."It's as mind-boggling as it is heart-breaking," he said of the government's apparent unwillingness to stop stuffing taxpayer dollars into Trump's pocket.His-and-hers MercedesThe jury that will be chosen in a downtown Manhattan courtroom starting Monday will determine if the Trump Organization defrauded tax authorities by paying executives some of their compensation off the books, in the form of untaxed perks like free apartments and cars.Former Trump CFO Allen Weisselberg will be the key prosecution witness against the company after pleading guilty to the tax-dodge scheme in August.Weisselberg admitted pocketing $1.7 million in tax-free perks over 15 years, including Mercedes-Benz luxury cars for him and his wife, free use of Trump-branded apartments on the Hudson River and tuition for his grandkids' private schools.At the Trump Organization headquarters in Trump Tower on Manhattan's Fifth Avenue, the cars, apartments and tuition were considered part of Weisselberg's $940,000-a-year income, prosecutors allege.The Trump Organization is charged with knowingly and repeatedly filing inaccurate tax documents to avoid payroll taxes on that extra compensation, saving money for the company and its executives.As part of his plea, Weisselberg, who remains on the company payroll as an adviser, must pay back $2 million and serve five months jail. The Trump Organization could face stiff tax penalties plus up to $1.6 million in fines, Reuters has calculated, if convicted of the three tax-fraud counts and six other counts in their indictment — all of them low-level felonies. Their lawyers have countered that the Manhattan District Attorney's office — for decades run by Democrats — is pursuing a penny-ante fringe benefits case out of political bias against Trump, an argument the trial judge, state Supreme Court Justice Juan Merchan, has barred the defense from raising at trial.A case for 'debarment' The recent Secret Service billing revelations and the trial starting in Manhattan have upped the ante for those calling for and end to Trump's government contracts."The Trump Organization was essentially gouging the federal government and federal taxpayers" said Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington."If there's a criminal conviction, it's hard to imagine how the federal government could at that point not debar them," he told Insider.Bookbinder and Schooner, the procurement law professor, formally wrote the government asking it to cut ties with Trump's company and its senior officers in October 2021.It was addressed to the federal General Services Administration, which oversees contracts, and government agencies that that have done business with Trump, including the Department of Homeland Security, which oversees the Secret Service."Our position hasn't changed," said Sean Moultin, senior policy analyst for the Project on Government Oversight, another ethics and accountability watchdog group that signed on to the letter."A conviction of the organization on any of the charges would make debarment a foregone conclusion," he told Insider.Reps for the Trump Organization and the GSA did not respond to Insider's requests for comment.A spokesperson for the Secret Service would not speculate on a potential Trump Organization debarment, saying only that the agency would be responding directly to the congressional investigation into Trump's billing.Secret Service a tough targetWatchdogs concede that Trump's Secret Service billing is a tough target.Under federal acquisition regulations, an agency can continue to use a blacklisted company by saying they have "compelling reasons justifying continued business dealings between that agency and the contractor."In the case of the Secret Service, that would mean saying there's no way to effectively protect Trump and his family without staying at whichever of his resorts he's currently living at — including his winter favorite, Mar-a-Lago in Palm Beach, Florida, and his summer favorite, the Trump National Golf Club in Bedminster, New Jersey."The agency can simply say they need the contractor," explained Schooner.   Barring the unlikelihood of a cash-free solution — Trump letting the Secret Service "stay at our properties for free," as Eric Trump once promised, or forgoing Secret Service protection voluntarily, as Richard Nixon did —  Trump's Secret Service spigot may well remain open, watchdogs acknowledge.Still, blacklisting Trump would prevent future self-dealing in other types of contracts.The Secret Service "may be able to make some sort of claim that they are in a unique situation," in needing to be close to the former president, said POGO's Moultin."But I still remember when Trump was pitching holding a G-7 conference at one of his properties, Moultin said. In 2019, acting White House chief of staff Mick Mulvaney announced the US would host the 2020 G-7 summit at the Trump National Doral golf resort in Miami, an idea quickly abandoned after critics accused the then-president of self-dealing and other ethics violations. That same year, then-Vice President Mike Pence stayed at a Trump hotel during a trip to Ireland that was located 180 miles from any of his official engagements, and Air Force crews enjoyed lodging at Trump's luxury golf resort in Scotland. "If there was a future Trump administration, or just a future Republican administration, that could raise this idea of holding official events at his properties," Moultin said."That's where I think a debarment would still come into play." Read the original article on Business Insider.....»»

Category: personnelSource: nytOct 23rd, 2022

Judge conducting special master review questions Trump"s claim of privilege over White House documents: "Where"s the beef?"

Judge Raymond J. Dearie, who is conducting the review, told Donald Trump's lawyers to provide more evidence that the documents are privileged. Former President Donald Trump speaks at a rally in Wilkes-Barre, Pa., Saturday, Sept. 3, 2022.Mary Altaffer/AP Trump's lawyers have claimed attorney-client or executive privilege over documents seized by FBI. A judge agreed to appoint a special master who can review documents to check for privileged info. The special master said there has been insufficient evidence of privileged information so far. A judge who was appointed special master to review thousands of White House documents seized from former President Donald Trump's Mar-a-Lago home in August challenged the former president's legal claim of privilege over certain records on Tuesday, according to The New York Times.Trump and his lawyers have claimed that the documents are protected by either attorney-client or executive privilege, therefore, blocking the Justice Department's access to certain documents for its criminal probe into Trump's handling of sensitive government records.But so far, Judge Raymond R. Drearie, the special master, said in a hearing that the batch of documents he reviewed lacked enough evidence to support the privilege claim, The Times reported. "It's a little perplexing as I go through the log," Dearie said, according to The Times. "What's the expression: 'Where's the beef?' I need some beef."Drearie's doubts revolved around a small batch of records that the DOJ already set aside from the larger trove of records that were seized from Trump's resort, according to The TimesIn one case, Drearie challenged how Trump's lawyers could claim that a document was Trump's personal property while also claiming that it's protected by executive privilege, which is only reserved for government records."Unless I'm wrong, and I've been wrong before, there's certainly an incongruity there," Dearie said in the hearing.The concern from Drearie is the latest roadblock in the documents scandal for Trump, who has hoped to undermine the DOJ's investigation and downplay the severity of taking classified records, some of which may have pertained to national security intelligence.In September, Drearie requested evidence that proved FBI agents planted documents in Mar-a-Lago or that the former president declassified records with highly sensitive information, as Trump claimed. Judge Aileen M. Cannon later overruled Drearie's request for the information.Trump's lawyers also raised issues with finding a vendor to digitize thousands of documents so that they can be reviewed by Drearie. They argued in a court filing that they can't find a vendor willing to do the job and that the deadlines for handing over the documents were too rigid.Judge Cannon extended the deadline to complete the special master review by December 16.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 18th, 2022

Durham Prosecutes FBI Informants, While Protecting Their Handlers: Sperry

Durham Prosecutes FBI Informants, While Protecting Their Handlers: Sperry Authored by Paul Sperry via RealClear Investigations, Since being named special counsel in October 2020, John Durham has investigated or indicted several unscrupulous anti-Trump informants. But he has spared the FBI agents who handled them, raising suspicions he's letting investigators off the hook in his waning investigation of misconduct in the Russiagate probe. In recent court filings, Durham has portrayed the G-men as naive recipients of bad information, tricked into opening improper investigations targeting Donald Trump and obtaining invalid warrants to spy on one of his advisers. But as the cases against the informants have gone to trial, defense lawyers have revealed evidence that cuts against that narrative. FBI investigators look less like guileless victims and more like willing partners in the fraudulent schemes Durham has brought to light. Notwithstanding his reputation as a tough, intrepid prosecutor, Durham has made excuses for the misconduct of FBI agents, providing them a ready-made defense against any possible future prosecution, according to legal experts.  "Durham was supposed to clean up the FBI cesspool, but it doesn't look like he's going to be doing that," said Paul Kamenar, counsel to the National Legal and Policy Center, a Washington watchdog group. "He started with a bang and is ending with a whimper." In the latest example, critics point to a flurry of pretrial motions in Durham's case against former FBI informant Igor Danchenko, the primary source for the false claims regarding Trump and Russia advanced by the opposition research paid for by Hillary Clinton's campaign known as the Steele dossier. Next month, Danchenko faces charges he lied to FBI investigators multiple times about the sourcing of the information in the dossier, which the bureau used to secure wiretap warrants to spy on a former Trump campaign adviser. Relying on Danchenko's reporting, the FBI claimed that the adviser, Carter Page, was a Russian agent at the center of "a well-developed conspiracy of cooperation" between Trump and the Kremlin to steal the 2016 presidential election. Igor Danchenko, dossier fabulist: Trial upcoming. "The defendant was providing them with false information" as part of "a concerted effort to deceive the FBI," Durham alleged in a recent filing with the U.S. District Court in Alexandria, Va., where the trial is scheduled to be held Oct. 11. Had agents known Danchenko made up the allegations, Durham asserted, they might have asked more questions about the dossier and not relied on it to swear out the ultra-invasive Foreign Intelligence Surveillance Act warrants to electronically monitor Page, a U.S. citizen who was never charged with a crime. But Danchenko's legal team points out that he turned over an email to the FBI during a January 2017 meeting with agents and analysts that indicated a key dossier subsource may have been fictionalized. Stuart Sears, one of Danchenko's attorneys, argued earlier this month in a motion to dismiss the charges that investigators "essentially ignored" any concerns they may have had about Danchenko's sourcing, because they continued to renew the FISA warrants based upon it. Therefore, he argued, any lies his client allegedly told them were inconsequential, making them un-prosecutable under federal statutes requiring such false statements to have a "material" impact on a federal proceeding. While Durham did not dispute the FBI's apparent complicity in the fraud, he waved it aside as immaterial to the case at hand. "The fact that the FBI apparently did not identify or address these inconsistencies is of no moment," he said in his filing. At the same time, Durham acknowledged agents allowed the fabrications to contaminate their wiretap warrants – noting they were "an important part of the FISA applications targeting Carter Page." But he stopped short of blaming the FBI, even for incompetence. According to Durham, the nation's premiere law enforcement agency was misled by a serial liar and con man. "He's painting it as though the FBI was duped when the FBI was more than willing to take the initiative and go after Trump," Kamenar said, adding that though Danchenko may have been a liar, he was a useful liar to FBI officials and others in the Justice Department who were pursuing Trump. The special prosecutor's indifference to the FBI's role in the scandal is more remarkable in light of what Danchenko admitted in his January 2017 interviews with the FBI. He told investigators that much of what he reported to Steele was "word-of-mouth and hearsay," while some was cooked up from "conversation that [he] had with friends over beers," according to a declassified FBI summary of the interviews, which took place over three days. He confessed the most salacious allegations were made in "jest." Still, the FBI continued to use Danchenko's claims of a "well-developed conspiracy of cooperation" between Russia and Trump to convince the FISA court to allow investigators to continue to surveil Page, whom the FBI accused of masterminding the conspiracy based on Danchenko's bogus rumors. Agents even swore in FISA court documents reviewed by RealClearInvestigations that Danchenko was "truthful and cooperative." Carter Page, junior Trump campaign aide: Spied on without justification. The combination of Danchenko reporting a "conspiracy" and the FBI vouching for his credibility persuaded the powerful FISA court to continue to authorize wiretapping Page as a suspected Russian agent for almost a year. In addition to collecting his emails and text messages in 2017, agents were able to sweep up all his prior communications with Trump officials from 2016. If the FBI were skeptical of Danchenko, it didn't show it. The next month, the bureau put him on its payroll as a confidential human source, or CHS, making him part of the bureau's untouchable "sources and methods" sanctum and thereby protecting him and any documents referencing him from congressional and other outside scrutiny. It made him a paid informant in spite of knowing Danchenko was a potential Russian spy threat who could be feeding federal agents disinformation. The FBI had previously opened a counterespionage probe of Danchenko from 2009 to 2011, and as his lawyers pointed out in a recent court filing, agents who were part of the case probing Trump/Russia ties, codenamed Crossfire Hurricane, "were well aware of the prior counterintelligence investigation" when they were supposedly conned by their informant. "It stretches credibility to suggest that anything else would have caused the FBI to be more suspicious of Mr. Danchenko's statements and his potential role in spreading disinformation than the very fact that he was previously investigated for possibly engaging in espionage on behalf of Russia," Sears said. "Armed with that knowledge, however, the FBI nevertheless persisted" in using him as a source – while never informing the FISA court of the prior investigation. The FBI didn't terminate Danchenko until October 2020, the month after the Senate declassified documents revealing the FBI had investigated him as a Russian agent. It also happened to be the same month Durham was appointed special counsel. On Oct. 19, 2020, then-Attorney General Bill Barr tapped Durham "to investigate whether any federal official, employee, or any other person or entity violated the law in connection with the intelligence, counter-intelligence, or law-enforcement activities directed at the 2016 presidential campaigns, individuals associated with those campaigns, and individuals associated with the administration of President Donald J. Trump, including but not limited to Crossfire Hurricane and the investigation of Special Counsel Robert S. Mueller, III."  So far, Durham has focused on the "any other person" part of his mandate. Federal officials and employees appear to be getting a pass. Kevin Clinesmith, FBI lawyer: Doctored exculpatory evidence. Though Durham prosecuted former FBI lawyer Kevin Clinesmith in August 2020, when he was acting as a U.S. attorney, he did not initiate the case. Rather, it was referred to him by Justice Department Inspector General Michael Horowitz, who first exposed how Clinesmith had doctored exculpatory evidence in the Page warrant process. Even though Clinesmith admitted forging a CIA email to make it look like Page never helped the agency monitor Russia, when in fact he did and clearly wasn't acting as a Russian agent, Durham failed to put him behind bars. Clinesmith was sentenced to 12 months' probation and 400 hours of community service, which as RCI first reported, the registered Democrat satisfied by researching and editing articles for his favorite liberal weekly newspaper in Washington.  Kamenar said the Clinesmith case was a "bad omen" for how Durham would handle dirty FBI agents. He pointed out that the prosecutor could have charged Clinesmith with the more serious crime of altering a CIA document, but instead negotiated a deal letting him plead to the lesser offense of lying to a government agency, which Kamenar called "a garden variety process crime." And "now he's got his law license back." Clinesmith worked closely on the case with FBI Supervisory Intelligence Analyst Brian Auten, who was singled out by Horowitz in a 2019 report for cutting a number of corners in the dossier verification process and even allowing information he knew to be incorrect slip into the FISA affidavits and mislead the court. Auten met with Danchenko at the bureau's Washington field office and helped debrief him about the dossier in January 2017. And he wrote the official FBI summary of those meetings, which noted Danchenko "contradicted" himself several times. Auten learned firsthand that the information Danchenko passed to Steele was nothing more than bar gossip, and that his "network of subsources" was really just a circle of drinking buddies. Also at those meetings, the analyst received an Aug. 24, 2016, email revealing that Danchenko never actually communicated with Sergei Millian, the Belarusian-born American businessman whom he had identified as his main source of Trump/Russia connections – the all-important, albeit apocryphal, "Source E" and "Source D" of the dossier. It turns out Danchenko attributed the critical "conspiracy of cooperation" allegation the FBI cited as probable cause for all four FISA warrants to this made-up source, meaning the cornerstone evidence of suspected Trump-Russia espionage was also made up. What's more, Auten learned that though Danchenko was born in Russia, he was not based there and had no access to Kremlin insiders. On the contrary, he confirmed that Danchenko had been living in Washington and had previously worked for the Brookings Institution, a Democratic Party think tank whose president at the time was tied to Clinton. Yet Auten and his Crossfire team led the FISA court to believe Danchenko was "Russian-based" – and therefore presumably more credible. They used this same description in all four FISA affidavits, including the two renewals that followed the January 2017 meetings with Danchenko. Internal FBI emails from two months later revealed that Auten knew that using the term "Russian-based" was deceptive. While tasked with helping review Crossfire documents requested by Congress, including FISA applications, he worried about the description and whether it should be corrected. He discussed the matter with Clinesmith. But the falsehood reappeared in subsequent FISA applications. It was also in January 2017 that Danchenko revealed to Auten and his FBI handlers that one of his subsources was his childhood friend Olga Galkina, whom he said supplied him the rumor that former Trump lawyer Michael Cohen traveled to Prague during the campaign to hatch a plot with Kremlin officials to hack Clinton campaign emails.  Michael Cohen, Trump lawyer: Baseless rumor victim. The FBI already knew from intelligence reports that Cohen had not, as the dossier claimed, traveled to Prague to conspire in the alleged Russian hacking of Democrats, or for any other reason. On Jan. 12, 2017, Auten and his Crossfire teammates received a CIA report that warned the Cohen rumor was likely part of a Russian disinformation campaign. The agency had discovered no such Prague meeting took place after querying foreign intelligence services, shooting a major hole in the dossier. The CIA report should have led the Crossfire team to treat any allegations sourced to Galkina with caution. But on the same day, the FBI got its FISA wiretap on Page renewed based on another groundless claim by Galkina – this one alleging the Trump aide secretly met with top Kremlin officials in Moscow to discuss removing U.S. sanctions. The falsehood showed up in two more FISA applications, which alleged "Russia's efforts to influence U.S. policy were likely being coordinated between the RIS [Russian Intelligence Services] and Page, and possibly others." Galkina also had a relationship with Charles Dolan, a Clinton adviser who figures prominently in the Danchenko case Durham is prosecuting. It turns out Dolan was one of the sources for the infamous "pee-tape" allegation about the Kremlin supposedly having blackmail evidence of Trump consorting with prostitutes at the Ritz-Carlton in Moscow, which has been debunked as another dossier hoax. But according to Durham, Danchenko tried to conceal Dolan's role in the dossier from the FBI. The special prosecutor argued that the deception deprived FBI agents and analysts information that would have helped them evaluate "the credibility, reliability and veracity" of the dossier. He said if they had known Dolan was a source, they might have, among other things, sought emails Dolan and Danchenko exchanged exposing their Ritz-Carlton hoax.  "Had the defendant truthfully told the FBI that Dolan played a role in providing certain information for the Steele reports the FBI might well have interviewed and/or collected such emails from Dolan," Durham speculated. In addition, the prosecutor said, investigators might have learned of Dolan's "involvement in Democratic politics" and "potential bias as a source for the Steele reports." Except that they already knew about Dolan and his politics – as well as his involvement in the dossier. It's also likely they already had his emails. In another interview with Danchenko about his dossier sources, which took place June 15, 2017, FBI agents asked Danchenko if he knew Dolan and whether he was "contributing" to the Steele reports. Though Danchenko acknowledged he knew Dolan, he denied he was a source. Agents didn't ask any follow-up questions. (They also never sought to charge him with making false statements to federal agents.) How did the FBI know to ask about Dolan? Because he was well-known to the bureau's Russia counterintelligence agents as a businessman who frequently traveled to Moscow and met with Kremlin insiders. But more importantly, his friend Galkina was under FISA surveillance as a suspected Russian spy at the time, according to declassified records. The FBI was collecting not only Galkina's emails, but also those of Dolan and Danchenko, all of whom regularly communicated in 2016 – which suggests that at the time the FBI asked Danchenko about Dolan, it had access to those emails and was reviewing them. This may explain why, as defense lawyer Sears noted, "the FBI never asked Mr. Danchenko about emails or any other written communications with Dolan" – and why it never interviewed Dolan. While Durham acknowledged that the FBI knew about Dolan's troubling ties at the time and neglected to dig deeper, he said he's not bothered by the oversight. "The fact that the FBI was aware that Dolan maintained some of these relationships and failed to interview Dolan is of no moment," he maintained dismissively in a court filing. All that matters, he suggested, is that the FBI was lied to. One of those emails was particularly alarming. In an Aug. 19, 2016, email to Dolan, Danchenko made it clear he was compiling dirt on Trump and his advisers and sought any rumor, no matter how baseless and scurrilous. He solicited Dolan, specifically, for "any thought, rumor, allegation" on former Trump campaign manager Paul Manafort. Such emails called into question the veracity of the whole dossier and further tainted the credibility of Danchenko's "network of subsources." But on June 29, 2017 – two weeks after the FBI asked about Dolan – the FBI renewed the FISA wiretap on Trump adviser Page based on, once again, the dubious dossier. From its wiretapping of Galkina, moreover, Auten and others at the FBI who sorted through such FISA collections would have seen communications showing her strong support for Hillary Clinton, and how Galkina was expecting political favors in exchange for spreading dirt on Trump. In an August 2016 email to a friend, Galkina expressed hopes that Dolan would help her score a State Department job if Clinton won election. It was a major red flag. But like all the others, the FBI blew right past it. Agents continued to vouch for Danchenko as "truthful" and his subsources as reliable, and continued to cite Galkina's fabrications in FISA renewals. Under FISA rules, the FBI had a duty to "immediately inform" the secret court of any misstatements or omissions, along with any "necessary corrections" of material facts sworn in affidavits for warrants. But the FBI failed to correct the record, even after it became obvious it had told the court falsehoods and hid exculpatory evidence. In August 2017, agents finally got around to interviewing Galkina, who confessed the dossier allegations attributed to her were "exaggerated," according to the Horowitz report.  Scammed by the Alfa Bank Scam? Last year, Durham also painted the FBI as a victim of the 2016 political machinations of two other anti-Trump informants – Michael Sussmann and Rodney Joffe, who conveyed to investigators false rumors about Trump allegedly setting up a secret hotline with the Kremlin through Russia-based Alfa Bank. Michael Sussmann, Clinton lawyer: Acquitted. Durham charged Sussmann, a Washington lawyer who represented the Democratic National Committee and the Clinton campaign, with lying to the FBI's top lawyer James Baker when he told him he was coming in with the tip – outlined in white papers and thumb drives – all on his own and not on behalf of Democrats and Clinton, whom he was billing for the Trump-Alfa "confidential project." "Sussmann's false statement misled the FBI general counsel and other FBI personnel concerning the political nature of his work and deprived the FBI of information that might have permitted it more fully to access and uncover the origins of the relevant data and technical analysis, including the identities and motivations of Sussmann's clients," Durham maintained in the indictment. But evidence emerged at the trial of Sussmann, who was acquitted, that bureau officials already knew the "political nature" of the tip and where the data came from, but withheld the information from field agents so they would continue investigating Trump through the election. For example, in a Sept. 22, 2016, email describing the "special project," an FBI official in Washington stated that "Counsel Baker provided [Supervisory Special Agent] Joe Pientka with 2 thumb drives and identified they were given to him by the DNC." "Everybody at the FBI actually thought the data came from a political party," Sussmann lawyer Sean Berkowitz argued, according to the trial transcript. "The (case) file is littered with references to the DNC." But Durham kept offering explanations for why FBI brass bit on the politically tainted tip, opening a full field investigation based on it.  "Had Sussmann truthfully disclosed that he was representing specific clients [the Clinton campaign], it might have prompted the FBI general counsel to ask Sussmann for the identity of such clients, which, in turn, might have prompted further questions," Durham argued. James Baker, top FBI lawyer: Close friend of Sussmann. "In addition, absent Sussmann's false statement, the FBI might have taken additional or more incremental steps before opening an investigation," he added. "The FBI also might have allocated its resources differently, or more efficiently, and uncovered more complete information about the reliability and provenance of the purported data at issue." Headquarters, however, did know the identity of the clients. Problem was, they blinded agents in Chicago, where a cyber unit was assigned to the case, to the fact that the source for the information was Sussmann and Joffe – a federal cyber-security contractor who was angling for a job in a Clinton administration. (A longtime FBI informant, Joffe was terminated last year after he was exposed as the ringleader of the Alfa Bank scam.) "You were not allowed to speak to either the source of the information, the author of the white paper, or the person who provided the source of the information and the data?" Berkowitz asked Chicago-based FBI agent Curtis Heide during the trial, according to transcripts. "Correct," Heide replied. Another Chicago investigator was led to believe the tip came into the bureau as a referral from the "U.S. Department of Justice." Rodney Joffe, cybersecurity contractor: "Remains a subject." Still, field agents were able to debunk it within two weeks. The FBI was not fooled by the hoax, yet nonetheless went along with it for the next four months. The case wasn't formally closed until Jan. 18, 2017, just two days before Trump was inaugurated. But then it was soon reopened after Clinton operatives again approached the FBI – as well as the CIA – with supposedly new evidence, which also proved false. "Comey and crew kept the hoax alive," former FBI counterintelligence lawyer Mark Wauck said, referring to then-FBI Director James Comey. They welcomed any predication that allowed them to open investigations on Trump, he added. Pientka testified that Comey was "fired up" about the tip, despite the fact nothing had been corroborated. Comey even held senior-level meetings on the Alfa investigation in his 7th floor office. (Pientka, who led the "close-hold" investigation from headquarters, also helped supervise the Crossfire Hurricane probe.) Ironically, no one knew better that Sussmann was a Democratic operative with an agenda than Baker – the official Durham claimed was the direct victim of the scam. Baker, a fellow Democrat, was a close friend of Sussmann, who had his own badge to get past security at the Hoover Building. Sussmann had Baker's personal cell number and Baker cleared his busy schedule to meet with him within hours of Sussmann calling to discuss his tip. Baker was well aware that Sussmann was representing the DNC, because Sussmann entered the building numerous times during the 2016 campaign to talk with top FBI officials about the alleged DNC hack by Russia. In fact, Sussmann had just visited headquarters with a delegation from the DNC on Aug. 12, 2016 – several weeks before he approached Baker with the bogus Alfa tip. They were there to pressure the FBI into concluding Russian intelligence was behind the "hacking" of DNC emails. "I understood he had been affiliated with the Democratic Party, but that he had come representing himself," Baker testified during the trial. Why didn't he tell investigators about Sussmann? "I didn't want to share his name because I didn't want to color the investigation," he said. "I didn't want to color it with politics." In his closing argument, Durham prosecutor Andrew DeFilippis told jurors the FBI's conduct was "not relevant." "Ladies and gentlemen, you've seen that the FBI didn't necessarily do everything right here. They missed opportunities. They made mistakes. They even kept information from themselves," he said. "That is not relevant to your evaluation of the defendant's lie." Judicial Watch President Tom Fitton complained Durham and his team have been acting more like apologists for the FBI than potential prosecutors of the FBI. "The FBI leadership knew full well the Clinton gang was behind the Alfa Bank-Russia smears of Trump," he said. "Durham tried to pretend (the) FBI was a victim (when) it was a co-conspirator." Wauck agreed. "The FBI-as-victim narrative was a bit of a legal fiction that Durham deployed for the purposes of the trial," he said. "The reality that emerged is that the FBI's top management was complicit in the Russia hoax that Sussmann was purveying." Folding Up His Tent Durham was first tasked with looking into the origins of the Russiagate probe in May 2019, before his formal appointment as special counsel in 2020. Trump and Republicans have expressed disappointment that after a total of more than three years of investigation, he has not prosecuted any top former FBI officials, including Comey and Andrew McCabe, who signed some of the FISA affidavits, or Peter Strzok, the biased leader of the Crossfire Hurricane probe who assured McCabe's lawyer in an August 2016 text that "we'll stop" Trump from becoming president. None has received a target letter. In recent months, McCabe and Strzok have gone on CNN, where they work as paid contributors, and smugly bashed Durham for running a "partisan" investigation, while at the same time gloating he's held the FBI up to be more of a victim than a culprit. "Comey and Strzok and McCabe have gotten a free ride out of all this," Kamenar said. James Comey, FBI director: Not prosecuted. Also, Durham went easy on Baker, another top FBI official, even after he held back key evidence from the special prosecutor before the Sussmann trial, a blatant lack of cooperation that may have cost Durham a conviction in the case. Comey's general counsel has received "favorable treatment," Wauck observed. Baker, who reviewed and OK'd the FISA applications, never told Durham about a damning text message he received from Sussmann on his cellphone. Durham had already indicted Sussmann for lying to Baker, and he could not use Sussmann's smoking-gun message – "I'm coming on my own – not on behalf of a client or company" – during the trial to convince jurors he was guilty of lying about representing the Clinton campaign. Legal analysts said it was slam-dunk evidence that would have sealed his case. Baker testified he didn't turn over the text to Durham because no one asked for it. He proved a reluctant witness on the stand against his old pal Sussmann.  Andrew McCabe, deputy director: Not prosecuted "I'm not out to get Michael and this is not my investigation. This is your investigation," he told DeFilippis during questioning. DeFilippis has since stepped down to take a job in the private sector. (Demonstrating the incestuous nature of the Beltway, Baker also happens to be an old friend of Bill Barr, who hired Durham. Barr hired Baker as his deputy when he ran Verizon's legal shop in 2008.) In another sign Durham has not lived up to his billing as an aggressive prosecutor, FBI Director Christopher Wray suggested in recent Senate testimony that Durham's team has not interviewed all of the Crossfire members still employed at the bureau. In lieu of face-to-face interviews, he said Durham's investigators have reviewed transcripts of interviews of the agents previously conducted by the Office of Professional Responsibility, the FBI's in-house disciplinary arm. Recent published reports say Durham is in the process of closing up shop and completing a final report on his findings by the end of the year. Republicans have promised to seize on the report if they win control of the House in November and take back the gavel to key oversight committees on the Hill, along with subpoena power. Peter Strzok, Crossfire Hurricane leader: Not prosecuted. Some former colleagues who have worked with Durham and are familiar with his inquiry blame COVID-19 for his relatively few prosecutions and lackluster record. They say pandemic-related shutdowns in 2020 and 2021 set back his investigation by limiting travel, interviews, and grand jury hearings. As a result, they say, the clock ran out on prosecuting a number of potential crimes. The last FISA warrant, which according to the court was illegally obtained, was approved June 29, 2017, which means the five-year federal statute of limitations for that crime expired months ago. Though Durham hinted in the Sussmann case about investigating a broader "conspiracy" or "joint venture," there are few signs pointing to such a massive undertaking. Bringing a "conspiracy to defraud the government" charge, naming multiple defendants, would require Durham adding staff and office space and beefing up his budget by millions of dollars, the former colleagues said. According to expenditure statements, Durham continues to operate on a shoestring budget with a skeletal staff compared with his predecessor Mueller's robust operation, which indicted 34 people. And one of the two grand juries Durham used to hear evidence has expired. It recently wrapped up work, apparently without handing down new indictments (though some could be under seal). "If Durham were building toward an overarching indictment alleging a corrupt conspiracy between the Clinton campaign and the FBI to deceive the court, he would not be charging people with lying to the FBI," former federal prosecutor Andrew McCarthy said. If there are any investigations still open after Durham retires, they could be handled by U.S. attorneys, the sources said. At least one of Durham's prosecutors works as a trial lawyer in the U.S. Attorney's Office in D.C. According to a court exhibit, Joffe "remains a subject" in the Sussmann-related investigation into alleged attempts by federal contractors to defraud the government with false claims about Trump and Russia. Joffe invoked his Fifth Amendment right not to testify after receiving a grand jury subpoena and has not cooperated with requests for documents. His lawyer did not return phone calls and emails. The Special Counsel's Office did not respond to requests for comment. The FBI declined comment for this article, but issued a statement last year saying it "has cooperated fully with Special Counsel Durham's review."  Tyler Durden Fri, 09/30/2022 - 21:15.....»»

Category: blogSource: zerohedgeSep 30th, 2022

What Meta’s Latest Takedown of Fake Foreign Accounts Could Mean for the U.S. Midterms

Facebook parent company Meta said it took down a network of fake accounts, originating in China, that was attempting to interfere in the U.S. midterms Facebook parent company Meta said it took down a network of fake accounts, originating in China, that it says was attempting to interfere in the U.S. midterms. The network’s posts were aimed at appealing to both Democrats and Republicans and posted about controversial issues like abortion and gun rights. Experts say the network’s existence speaks to larger concerns about political disinformation on social media, in the U.S. as well as worldwide. In a report published Tuesday, Meta detailed how it disrupted the network, which was the first known China-based operation targeting users in the United States with political content ahead of the Nov. 8 midterm elections. This operation was unique, it said in the report, because “Chinese influence operations that we’ve disrupted before typically focused on criticizing the United States to international audiences, rather than primarily targeting domestic audiences in the US.” [time-brightcove not-tgx=”true”] But, overall, countries using social media to interfere in each others’ elections is now familiar terrain, policy experts say. In the U.S. these worries were first triggered by reports of Russian meddling in the 2016 presidential election. While domestically produced and disseminated political disinformation has taken center stage in the U.S. in recent years, it’s important to remember that this is an issue of international scope, says Philip Napoli, a professor in Duke University’s Sanford School of Public Policy. “It’s a strategy that nations deploy against each other, and we’re not really seeing any variation from election to election in terms of how concerned we need to be about this kind of activity,” he says. “It’s a constant.” The network targeted people in the U.S. on both sides of the political spectrum by setting up fake accounts posing as Americans and attacking politicians from both parties. The report did not say whether the network was tied to the Chinese government or was merely based in China. The disrupted influence campaign was not particularly effective, Meta’s report noted, in part because the accounts posted during working hours in China, when U.S. users are likely to be less active. Still, the network’s existence, no matter its impact, raises the alarm about social media’s readiness for policing interference. “It’s an indicator that none of the defense mechanisms these platforms have put in place seem to discourage this kind of activity,” Napoli says. Meta did not immediately respond to TIME’s requests for comment. Read More: Meta, TikTok, and Twitter Hope to Fight Election Misinformation. Experts Say Their Plans Aren’t Enough The influence of fake accounts Meta said the China-based network set up fake accounts across multiple social media platforms, including Facebook, Instagram, and Twitter, from March to August 2022, but was small (only 81 Facebook accounts, eight Pages, one Group and two accounts on Instagram) and did not attract much of an audience. The company said its automated systems took down a number of related accounts and Facebook Pages for violating community standards during this time. Reports of this nature could heighten fears over Chinese influence operations impacting elections in the U.S., says Ho-Fung Hung, a professor of political economy in Johns Hopkins University’s department of sociology. “China is still at a fairly low level [of activity] compared to Russia in terms of interfering in discussion about U.S. issues,” he says. “At this time, I wouldn’t be too worried about direct Chinese intervention in U.S. domestic politics.” Hung also says it’s significant that Meta’s report doesn’t indicate that Chinese intelligence agencies were behind this network. “It’s not clear whether it’s related to the Chinese government or non-governmental people with their own initiative,” he says. However, the discovery of this operation does call into question whether others of its kind are out there, says Joshua Tucker, co-director of New York University’s Center for Social Media and Politics. “The question we don’t know the answer to is when Meta announces that it’s taken down a network, is that because Meta is really good at this and somebody tried one thing and got caught, or is it because there are 100 of these networks and this is just the one they caught?” he says. “Absent our own access to the data, it’s hard really to infer how successful Meta is at taking down these types of attacks.” Tucker says that as long as these social platforms exist, they’re likely going to be vulnerable to these kinds of campaigns. “One of the things we know about these kinds of operations, especially these little ones, is they’re easy for people to pull off,” he says. What we know about future elections Meta said in Tuesday’s report that it also took down a much larger Russian network that primarily targeted Germany, France, Italy, Ukraine, and the United Kingdom. The operation was centered on a network of over 60 websites impersonating legitimate news sites to push pro-Russia content and criticize Ukraine and Western sanctions. Meta said it was “the largest and most complex Russian-origin operation” that it had disrupted since the beginning of the war in Ukraine. This is not the first time social media platforms have been used by foreign powers to exploit political divisions. The Cambridge Analytica scandal, in which a political consulting firm used the data of tens of millions of Facebook users in its effort to elect Donald Trump president in 2016, became part of the larger investigation into possible collusion between the Trump campaign and Russia. Moreover, earlier this month, the New York Times reported on how organizations linked to the Russian government carried out a social media propaganda campaign aimed at inflaming tensions surrounding the 2017 Women’s March. Meta, TikTok and Twitter have all revised and updated their plans for addressing possible election misinformation, regardless of the source, ahead of the US midterms. However, many technology experts say these plans need to be updated and further strengthened. Napoli says the issue is widespread and will continue to be so. “Nations are still expanding the scope of their operations rather than scaling them back,” he says. “They seem to be continually emboldened.”.....»»

Category: topSource: timeSep 29th, 2022

These 5 former House candidates might"ve been the next AOC, but entrenched politicians blocked their path

Millennial and Gen Z political candidates eagerly seek a foothold in government, but establishment politicians aren't ready to let go of power. Anna Kim/Insider Insider talked to five former House candidates who lost primaries to more-experienced politicians. The younger candidates said they generally got little to no support from official party leaders. One candidate was told to "wait your turn." Another found consultants unwilling to help. Read more from Insider's "Red, White, and Gray" series. For young political candidates, the road to elective office is often turbulent.When Alexandria Ocasio-Cortez in 2018 decided to challenge Rep. Joe Crowley in a New York district anchored in the Bronx and Queens, scores of state and local officials lined up behind the longtime Democratic incumbent, who was seen as a likely House speaker-in-waiting.But Ocasio-Cortez wasn't discouraged, convinced that voters in the district were dissatisfied with the way issues like minimum wage and the climate crisis were being addressed.Fueled by grassroots energy from millennials and progressives, the then-28-year-old Ocasio-Cortez defeated Crowley by nearly 14 percentage points.Since then, Ocasio-Cortez has become the face of the younger side of Congress, a cohort that has come to include members such as the 27-year-old GOP Rep. Madison Cawthorn of North Carolina — who will exit the House in January after losing his party primary — and Democratic Sen. Jon Ossoff of Georgia, who at 35 is the youngest sitting member of the upper chamber.But for many millennial and Generation Z office seekers, simply trying to get local leaders on board with a candidacy can be a frustrating experience with minimal financial or party support.For every candidate like Ocasio-Cortez or Maxwell Alejandro Frost — the 25-year-old Democratic nominee to represent the Central Florida-anchored 10th congressional district and who is poised to be the House's first Gen Z lawmaker — there are dozens of enthusiastic young candidates who are willing to serve but are instead mired in institutional hurdles.Durham County Commissioner Nida Allam competed in this year's Democratic primary for North Carolina's 4th Congressional District.REUTERS/Jonathan Drake'I was told over and over again to wait my turn'Four months in the making, Insider's "Red, White, and Gray" series explores the costs, benefits, and dangers of life in a democracy helmed by those of advanced age, where issues of profound importance to the nation's youth and future — technology, civil rights, energy, the environment — are largely in the hands of those in the twilight of their careers.One former candidate who couldn't break through the establishment is Nida Allam, a 28-year-old Durham County commissioner who ran to represent North Carolina's 4th Congressional District. She was defeated by state Sen. Valerie Foushee, 66, who captured the Democratic nomination over Allam by 9 points, 46% to 37%, in this year's primary. Young leaders-in-waiting often can't help remaining engaged in public policy because they still want to be involved in their communities. But their experiences on the campaign trail reveal some of the obstacles built into the American political system.When Democratic Rep. David Price — who has served in Congress almost continuously since 1987 — announced last year that he was stepping down after the 2022 midterm elections, Allam reflected on the now-82-year-old congressman's legacy and her own future."He's someone that I've looked up to my entire life in the state," she told Insider. "I've been able to build a really great friendship and relationship with him. And I wanted to see this district be represented by a new generation of leadership and someone who could follow in his footsteps but also push our own state party and our leaders to look at issues in a different way."Allam is a progressive who was backed by Sens. Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts, along with several local elected officials and national groups like the Sanders-aligned Our Revolution and the climate-focused Sunrise Movement. She said she felt that it was important to give voters — and especially younger voters — a reason to cast ballots.But when she first sought a seat on the Durham County Board of Commissioners in 2020, Allam said, she wasn't exactly encouraged to run — a sentiment that extended to her House campaign."When I was running for the congressional seat, but even when I ran for county commission, I was told over and over again to wait my turn," she said. "We constantly hear young people being told that narrative as if these policy decisions aren't going to impact us. You can't just keep saying, 'Oh, we want to excite young voters,' but then you don't actually create an opportunity for them."Allam — the first Muslim woman elected to office in North Carolina — credited Republicans for building a farm team of elected officials that she said Democrats hadn't replicated."Here in North Carolina they recruit folks to run for local office," she said of the state GOP. "They build them up to run for the state legislature and then for statewide and federal offices. And we need to have an infrastructure like that on the Democratic Party side. And that means investing in young people."Living in a congressional district that includes Duke University and the University of North Carolina at Chapel Hill, where an issue like the climate crisis has strong resonance, Allam said some politicians had skirted around the subject, alienating younger voters."We have folks who are in elective office and climate change is not something that's going to impact them 50, 60 years down the road," she said. "They don't act with the sense of urgency that our generation does."Former House candidate John Isemann faced ex-state lawmaker Tom Kean Jr. in the Republican primary for New Jersey's 7th Congressional District.Caleb Isemann/Isemann Media'Don't tell anyone I answered this call'When John Isemann decided to run for Congress for the first time as a Republican in northern New Jersey's highly competitive 7th Congressional District, he knew he'd be taking on the scion of local GOP royalty: former state Sen. Tom Kean Jr.But Isemann, 28, told Insider he wasn't deterred."I didn't come from money, but I believed I had the skills to build the organization, movement, and brand and was fortunate to have supporters that also believed in that," he said.Kean, the 54-year-old son of the popular 1980s Republican Gov. Tom Kean, served in the state legislature for nearly 21 years. He also ran for Congress in 2000, was the Republican US Senate nominee in 2006, and launched a House bid in 2020. He announced in July 2021 that he would run for Congress against Democratic Rep. Tom Malinowski in a rematch of their 2020 contest, which he narrowly lost.Neither Kean Jr. nor Malinowski — who has been the subject of a congressional inquiry and failed to disclose numerous stock trades last year — brought a different kind of politics to the historically Republican district, which stretches from the suburbs of New York City to the Pennsylvania line, Isemann said."The incumbent now is under congressional investigation, for ethics reasons, which is still open," he said. "And then on the other side, you have someone who is a Mayflower, generational politician who's been running for this specific seat since I was 6 years old."When Isemann was mulling over entering the race, he said, one particular incident crystallized the roadblocks that he would face in challenging Kean."As soon as you go out to DC consultants and Jersey consultants and say, 'Hey, I'm going to run against Tom Kean Jr.,' I had people hang up the phone immediately and say, 'Don't tell anybody I answered this call,'" Isemann said. "I had other folks pitch me on, 'Hey, I could set you up for a congressional seat in California or North Carolina — just don't run in that race.'"Kean won the GOP primary in June, securing nearly 46% of the vote, followed by Phil Rizzo, a former pastor, with roughly 24% support. Isemann came in fifth place, receiving about 5% of the vote.Despite his defeat, Isemann said he was grateful to have focused on policy during his campaign, rejecting the sensationalism that he argued has become an all too common part of politics."It's going to take a sacrifice on behalf of Republicans and it's going to take a sacrifice on behalf of like-minded Democrats to get us out of this high pace of polarization that we're in," he said.Unlike Allam, he argued that Democrats had been more effective at cultivating political activism among younger voters."I think the challenging party does a very good job of bringing out youth — the rise of AOC in the blue wave," Isemann said. "But I think we have yet to see a true voice of conservatives and Democrats rise up from the millennial generation or Gen Z."J. Miles Coleman, the associate editor of Sabato's Crystal Ball at the University of Virginia Center for Politics, told Insider it's only a matter of time before younger voters "get more into the political bloodstream.""The earliest wave of Gen Z can start running for Congress this cycle, so I'm sure that some of the candidates who lost will have other chances in the future," he said.Ray Reed, who worked on the policy team of then-Missouri Gov. Jay Nixon, ran for the Democratic nomination in the suburban St. Louis-anchored Second Congressional District.Channa Steinmetz/Startland News'You got to go through them to get elected'Ray Reed also contends that Gen Z's time "isn't coming — it's here."Reed, who ran in Missouri's 2nd Congressional District, which draws in much of suburban St. Louis, said he didn't feel as though his current representative — GOP Rep. Ann Wagner — was fighting for his community.He also wasn't convinced that state Rep. Trish Gunby was the right choice to represent Democrats in a congressional district the party had been unable to flip over the past decade.So the 25-year-old Democrat — who served on the policy team of former Gov. Jay Nixon and also worked for the Missouri Democratic Party — decided to jump into the race himself."I felt that she would fit the same mold as candidates who had lost time and time again," Reed told Insider, referring to Gunby. "We knew that we'd get a lot of attention because I was 25 years old, and our job was to capitalize off that."But Reed said Gunby's status as a sitting state lawmaker gave her a major boost with voters."I think what ended up really hurting us was that I ran against someone who had already been elected to a state House seat and had a serious iron grip on the stakeholders in the district," he said. "You got to go through them to get elected."Reed continued: "I was running against an older, middle-aged white woman in my race. And here I am — this skinny 25-year-old Black kid talking about forgiving student loans and free healthcare."In the August Democratic primary, Gunby defeated Reed 85% to 15%.Despite the loss, Reed had a positive view of his campaign, which included his advocacy of gun control, reproductive rights, and an extension of the child-tax credit."We still got a lot of folks involved who normally would not have gotten involved, especially young people in the race," he said. "That's why I ran."Reed also spoke highly of Rep. Cori Bush, who was 44 when she defeated the longtime Rep. William Lacy Clay Jr. in a Democratic House primary two years ago. The 2020 contest was Bush's second try at unseating Clay, whose father had previously occupied the seat for decades.Bush, along with Ocasio-Cortez, is part of the Squad, a group of progressive lawmakers pushing for policies like "Medicare for All" and universal childcare."Lacy Clay didn't show up for the community in the way that Congresswoman Bush does," Reed said. "It matters what you do with your influence in Washington."Immigration attorney Jessica Cisneros ran against Democratic Rep. Henry Cuellar in 2020 and 2022.AP Photo/Eric Gay'People were just waiting for someone to step up'In 2020, an immigration attorney named Jessica Cisneros ran in a primary against Rep. Henry Cuellar, an anti-abortion Democrat, in the South Texas-based 28th Congressional District.Cisneros — a first-time candidate who in 2014 interned in Cuellar's Washington, DC, office — came up short in the intraparty contest, earning 48% of the vote to the congressman's 52%."Nobody had really been running against Cuellar and mounting a serious challenge for a very long time, really since he was elected," Cisneros told Insider. "And then, here comes a 26-year-old candidate, born and raised in the district and ready to put up a fight."While Cuellar had the support of House Speaker Nancy Pelosi, Cisneros did earn the backing of other Democrats, including Ocasio-Cortez, Sanders, Warren, and former Housing and Urban Development Secretary Julián Castro."It was a big leap of faith," Cisneros, now 29, said of her first campaign. "It felt incredibly validating to know that I wasn't alone. People were just waiting for someone to step up."Cisneros, who ran on enacting the Green New Deal and establishing a $15 federal minimum wage, was also critical of the 67-year-old Cuellar over his abortion stance. (Weeks after the May contest, the Supreme Court voted to overturn Roe v. Wade.)  When Cisneros ran against Cuellar for the second time, she held the congressman below 50% of the vote in the initial primary before narrowly losing the runoff election (49.7% to 50.3%).Cisneros said the results reflected a "really tough fight" but also presented an opportunity for the party to engage with newly eligible voters."We talk about the Democratic Party being a big-tent party," she said. "Like this is our chance, right? To show that is true, one thing that I really want to stress to people is not to alienate all of these voters but instead bring them into this conversation about what our priorities as the Democratic Party need to be."Attorney and professor Suraj Patel ran against veteran Reps. Carolyn Maloney and Jerry Nadler in the Democratic primary for New York's 12th Congressional District.AP Photo/Julia Nikhinson'Only one campaign in this race was talking about the future'Suraj Patel, a 38-year-old attorney and professor, ran for the Democratic nomination in a Manhattan-based congressional district in 2018, 2020, and 2022.When he announced his first campaign, he said, local and state Democrats "completely shunned" his campaign."You get phone calls not returned," Patel told Insider. "You get no sort of support in any manner."His campaign this year focused on housing, immigration, and the economy, among other issues.In all of his races, Patel faced Rep. Carolyn Maloney, winning 41% in his first campaign and 39% on his second try, when he came within 4 points of victory. In his third primary race, last month, he also faced Rep. Jerry Nadler, who ran in the new 12th District as a result of court-ordered redistricting. Patel earned 19% of the vote.Nadler, 75, ousted Maloney, 76, from office. The two lawmakers combined have nearly 60 years of experience on Capitol Hill.But where does that leave candidates like Patel who feel as if their major issues aren't being addressed?"Only one campaign in this race was talking about the future," Patel said of his efforts. "At the end of this race, two campaigns were talking about the bills from 1992 or 1994 or contributing to a problem in New York City that's a livability crisis, an inflation crisis, and a rent crisis, all of which stem from a 1990s worldview about development in this city.""If we don't have a new set of leaders with new perspectives on these things," he added, "we are not going to be able to govern this country much longer."Read the original article on Business Insider.....»»

Category: smallbizSource: nytSep 23rd, 2022

Meet Matt Krause, the man who critics say helped make Texas a national leader in book bans

Removals spiked in Texas after state Rep. Matt Krause sent out a list of 850 books that pertained to LGBTQ topics and race, an analysis found. Georgii Boronin/Getty; blackred/Getty; Studio Blond/Getty; LoveTheWind/Getty; Anna Kim/Insider One GOP lawmaker has led the push to ban books in Texas, a Houston Chronicle investigation found. In 2021, state Rep. Matt Krause asked school districts to review a list of 850 books. Texas now has the highest number of book bans in the US. Texas librarian Carolyn Foote began to notice a trend in the spring of 2021 as she began getting ready to retire — challenges to children's books in school libraries, specifically regarding race and sexuality, were on the rise.After leaving her post, she says what accelerated the bans considerably was a list of 850 books for districts to review sent in October 2021 to the Texas Education Agency."I was a librarian for 29 years and we had three book challenges," Foote, one of the founders of the #FReadomFighters movement, told Insider.Texas is now a leader in book bans, and one influential politician — along with pressure from the GOP — may have been the driving force, a Houston Chronicle investigation found.State Rep. Matt Krause — also chair of the General Investigating Committee, which conducts inquiries on matters of government — put forth the book query to assess how many school districts had books pertaining to topics that "contain material that might make students feel discomfort, guilt, anguish, or any other form of psychological distress," based on race or sex, according to a letter obtained by the Texas Tribune.The book reviews were optional (Krause didn't have the authority to make it mandatory), but after the list went out, Texas Gov. Greg Abbott got involved, pressuring schools to review books that contained "pornographic or obscene material."By April 2022, a PEN America analysis found that Texas had 713 bans, nearly half of all book bans in the US.'You know, we'd love to take credit if we could do that'Out of 2,080 books reviewed for removals at schools done by districts since 2018, two-thirds of reviews occurred after Krause sent out his list, the Chronicle analysis found.In an interview with Insider, Krause disagreed with the assertion that it all came down to one politician, and said parents in the state were the ones paying attention to the types of books that their children were reading."You know, we'd love to take credit if we could do that," Krause said. "But there's really no credit to be had. We actually just joined in what we had already heard from a bunch of parents around the state of being concerned over what books are in certain school districts."Many of the titles on Krause's book list were written by authors of color and LGBTQ authors. The Chronicle analysis found that this influenced the types of book reviews that dominated school districts: 1,334 book reviews considered stories on LGBTQ+ while 609 prominently featured people of color or discussed racial issues.Krause told Insider he could not specify whether or not his office generated the list due to "pending or potential investigations." He also told the Dallas Morning News in 2021 he did not believe he had read any of the books on his list.Krause told Insider the reason for his effort was to make sure that schools were complying with Texas state law on "race and sexuality" that had passed during the 2021 legislative session. Abbott signed a "critical race theory" law in June 2021, which banned material that would make students "feel discomfort, guilt, anguish, or any other form of psychological distress on account of the individual's race or sex" in social studies curricula. The law was replaced by the more comprehensive Senate Bill 3 in December.Krause voted yes on both HB 3979 and SB 3 in the House.Texas did not pass any LGBTQ-specific education laws during the last legislative session, but Texas Lt. Gov Dan Patrick announced this year that he would prioritize passing a law modeled after what critics call Florida's "Don't Say Gay" law."I do think it's good for students, and I think it's appropriate and healthy for students to be exposed to various viewpoints, diverse viewpoints, ideologies, beliefs, and things like that as we go through school, but I think you can do that in an age-appropriate, and in a reasonable and appropriate way," Krause said.The books "Gender Queer" and "Lawn Boy" are popular targets of book bans.Penguin Random House; Simon & Schuster.Krause told Insider that the only personally objectionable books that came to mind were "Gender Queer" by Maia Kobabe and "Lawn Boy" by Jonathan Evison. Both books deal with LGBTQ topics and contain some sexually explicit material.But Foote said that many of the books she came across on the list didn't contain explicit material and there was no academic rigor applied to the creation of the list."If this list were really intended to make sure schools were complying with the law, then I'm very uncertain how all those kinds of titles ended up on the list," Foote said. "It seemed much more targeted in terms of someone's belief systems."Ricardo Martinez, CEO of LGBTQ advocacy nonprofit Equality Texas, said the number of books with LGBTQ characters and authors on Krause's list was concerning, especially because of the large number of anti-LGBTQ bills introduced in the Texas legislature in 2021."It's disappointing that we are perceived as an easy punching bag," Martinez told Insider.Krause is known for being at odds with Texas' LGBTQ communityKrause represents District 93 in Tarrant County, which includes parts of Fort Worth and Arlington. He's served his district for five two-year terms.In 2022, he ran for district attorney but lost the primary. He also ran for state attorney general, but his name didn't appear on the ballot.Krause's legislative record, especially in regard to LGBTQ issues, has put him in the spotlight before: In 2013, Equality Texas named him the state's most homophobic legislator. He also sponsored and authored multiple anti-LGBTQ bills, such as 2017's HB 1923, which would have allowed businesses to refuse service to LGBTQ couples on the basis of religious beliefs. The bill never passed.Krause was an adjunct professor at Liberty University Online, an Evangelical college in Virginia that banned "statements and behaviors that are associated with LGBT states of mind" as well as pronouns that differ from one's sex assigned at birth, the Dallas Morning News reported in 2021.He also has connections to WallBuilders, a Christian organization that seeks to emphasize the "moral, religious, and constitutional foundation on which America was built," the Morning News reported.Krause is also anti-abortion and previously tried — and failed — to establish the anniversary of the Supreme Court's Roe v. Wade decision as a statewide "Day of Tears."He defended himself over the Dallas Morning News article, saying that although his faith "plays a role in everything that I do" it was not the reason why he started the inquiry.Krause is leaving office next year and won't be putting out another book inquiry, but he said Texans may continue to see book lists that review other pieces of legislation — it all depends on who's at the helm of the investigating committee.Some politicians and parent groups disagreed with the inquiryKrause denies any political motivations behind the book list, but critics disagree.For Foote, the book bans represent GOP political motivations, citing school board officials and lawmakers who have begun their own book challenges.Not all school districts complied with Krause's investigation, and many of the books remained in schools after reviews were done. San Antonio's North East ISD banned or partially banned 119 books listed on Krause's document, the most of any district, after pulling hundreds of books off shelves for reviews.In a statement to the Chronicle, a spokesperson for NEISD said the books were misplaced in an elementary library out of concerns of "age appropriateness." An NEISD spokesperson did not immediately respond to Insider's requests for comment.Krause's colleague on the Texas General Investigating Committee, Rep. Victoria Neave Criado, was against his calls for districts to review their reading material and previously called the book inquiry a "whitewashing" of history.—Victoria Neave Criado (@Victoria4Texas) October 28, 2021A representative for Criado did not immediately respond to Insider's request for comment.The new frontier of book bans: self-censorshipFoote, along with other groups in Texas, have made some strides in keeping books on the shelves.But now, Foote says, what's lurking behind the book bans is the self-censorship that librarians are now grappling with in anticipation of backlash from politicians or parent groups or fear of personal repercussions.A classroom library in Oklahoma that has been covered by a teacher who fears backlash over recent legislation that limits what can be taught in schools.Provided by a Norman Public School teacher"We don't know how many things aren't being bought now because the teachers are scared to have them in their classroom, because libraries are scared to have it... so there's a lot of sort of self-censorship and self-restraint that is happening because people are scared," Foote said.A School Library Journal survey of 720 US school libraries taken in May found that librarians were self-censoring. Nearly 30% of respondents said they had decided not to purchase books with LGBTQ characters.Foote said this results in a "chilling environment," both for librarians and students who end up finding themselves in the middle of these battles."The fact that by removing books or censoring books about LGBTQ characters or characters of color, we're basically telling them you don't belong in our library," Foote said. "Your history doesn't belong in our libraries, which means you don't belong here."Read the original article on Business Insider.....»»

Category: personnelSource: nytSep 18th, 2022

Sperry: Unpacking Apparent Trump-Hillary Double Standard

Sperry: Unpacking Apparent Trump-Hillary Double Standard Authored by Paul Sperry via RealClear Investigations, Former Attorney General Loretta Lynch obtained evidence that a computer contractor working under the direction of Hillary Clinton’s legal team destroyed subpoenaed records that the former secretary of state stored on a private email server she originally kept at her New York home, and then lied to investigators about it. Yet no charges were brought against Clinton, her lawyers, or her paid consultant. The leniency accorded to Clinton contrasts with recent moves by Attorney General Merrick Garland to aggressively investigate former President Trump and his lawyers for allegedly obstructing investigators’ efforts to locate subpoenaed records at his Florida home. Legal experts say the apparent double standard may provide a useful defense for Trump and his legal team. The treatment of Clinton included a deal with her defense team that required the FBI to, in effect, obstruct its own investigation. During its 2016 probe, the bureau agreed with her lawyers' demands to destroy two laptop hard drives containing subpoenaed evidence immediately after searching for files on them. They did so while the information was still being sought by congressional investigators and even though the lawyers had served under Clinton at the State Department and were subjects of the FBI’s investigation. In fact, the laptops were theirs.Long before it bowed to the request, the FBI suspected Clinton's lawyers played hide-and-seek with evidence, making the concession that much more baffling. The scandal first erupted on March 2, 2015, when news broke that Clinton had secretly set up a non-government email server in the basement of her Chappaqua, N.Y., mansion in the weeks before she started her job at Foggy Bottom in early 2009. She used the unauthorized and unsecured device to conduct official State Department business – including transmitting and storing classified information – which allowed her to bypass legally mandated archiving of her government records. The next day, the House Select Committee on Benghazi sent her attorney David Kendall a letter advising his client to preserve all electronic records created since January 2009 and specifically not to delete any emails on her private server. The panel then issued a subpoena for records related to the deadly terrorist attack on the U.S. consulate in Libya. Three weeks later, on March 25, Kendall and former Clinton chief of staff Cheryl Mills, who also acted as her personal attorney, asked a computer contractor with Platte River Networks, which hosted Clinton’s secret email server, to join a conference call with them, according to FBI documents. Over the next week, the contractor, Paul Combetta, deleted the entire email archive from Clinton's server using a software program called BleachBit, which digitally “shreds" files to prevent their recovery. All told, the paid Clinton agent scrubbed 31,830 emails from her server and backup files. In addition, he permanently removed duplicates of the emails from the laptops of Mills and another Clinton lawyer and aide, Heather Samuelson, where they also had been stored. According to  FBI records, Combetta knew the documents he destroyed were under subpoena.  In July 2015, the FBI counterintelligence division opened a criminal investigation, codenamed “Midyear Exam,” in response to a referral from the intelligence community inspector general concerning Clinton’s unsecure server. The FBI predicated the opening of the probe on the possible compromise of highly classified Sensitive Compartmented Information. Emails classified at the SCI level were later found on Clinton’s server.Some career FBI agents working on the case, which was tightly controlled within headquarters and deemed a “SIM,” or sensitive investigative matter, thought they had a slam-dunk case of obstruction, a key aggravating factor for prosecuting cases involving the mishandling of classified information or government records. All they had to do was get Combetta in a chair and pressure him to implicate the high-level Clinton surrogates who told him what they wanted done. Several investigators believed "that Combetta’s truthful testimony was essential for assessing criminal intent for Clinton and other individuals, because he would be able to tell them whether Clinton’s attorneys — Mills, Samuelson or Kendall — had instructed him to delete emails,” according to a 2018 report by the DOJ's inspector general. But during voluntary interviews with FBI agents, Combetta falsely denied he had “deleted or purged” Clinton’s emails from the server or back-ups, and insisted Clinton’s legal team never requested that he do so. Combetta refused to talk to investigators about the critical March 2015 conference call with Clinton's lawyers that preceded his purge of evidence, the only topic he refused to speak about. So investigators and prosecutors agreed to give him immunity and interview him again. Still, they never got his account of the conference call. A written FBI summary of the interview, known as an FD-302 report, does not reference the call, indicating that agents failed to follow up on a key line of questioning in the investigation. Investigators declined to pursue other aspects of the case as well. They obtained an email in which Combetta told a colleague he was part of a “Hilary[sic] coverup operation” and said he would elaborate later at a "party." Asked about it, Combetta claimed he was just joking; the FBI accepted his explanation and did not appear to follow up with the colleague to learn what they discussed at the party. The FBI also accepted another explanation for why Combetta, using the screen name “stonetear," sought technical assistance on the Reddit forum on how to "strip out" the email addresses of a “VERY VIP" client from a “a bunch of archived email,” in an apparent reference to Clinton. (After Internet sleuths revealed stonetear was a name Combetta used in other forums, he began scrubbing his posts from the web.) An FBI case supervisor told the inspector general that “he believed Combetta should have been charged with false statements for lying multiple times,” according to the IG report, but prosecutors refused to indict him. The FBI also obtained forensic evidence from the server that could establish that Combetta made the deletions, but prosecutors balked at charging him with obstruction. Then-FBI Director James Comey personally agreed with the DOJ decision to give Combetta immunity rather than sweating him in a grand jury box, which typically is done with subjects who are lying, to get them to tell the truth. Comey was forced to defend the deal in an October 2016 conference with FBI supervisors, who were hearing complaints from rank-and-file agents that headquarters handed out immunity deals “like candy” to Clinton witnesses. Comey explained the bureau wasn't interested in prosecuting a small fish like Combetta, and sought only to massage him for information to “make a case on Hillary Clinton,” even though internal FBI emails reveal Comey already had decided to let Clinton off the hook. He did not explain why the contractor hadn’t been pressured more with threats to bring charges against him for lying to agents, the traditional investigative method for getting such an uncooperative witness to turn. “With respect to Combetta, we found his actions in deleting Clinton’s emails in violation of a congressional subpoena and preservation order and then lying about it to the FBI to be particularly serious,” DOJ Inspector General Michael Horowitz said in his report. “We asked the prosecutors why they chose to grant him immunity instead of charging him with obstruction of justice.” One DOJ prosecutor told Horowitz’s investigators they wanted to make Combetta “feel comfortable enough” that he would eventually cooperate on his own. Another said they weren't interested in prosecuting a bit player for lying and that doing so would just bog down the investigation, which they were rushing to wrap up “well before” the November 2016 presidential election. "I was concerned that we would end up with obstruction cases against some poor schmuck on the down that had a crappy attorney who [was] hiding the ball,” the unidentified prosecutor said. "And so at the end of the day, I was like, look, let’s immunize him. We’ve got to get from Point A to Point B. Point B is to make a prosecution decision about Hillary Clinton and her senior staff well before the election if possible,” the prosecutor added. "And this guy with his dumb attorney doing some half-assed obstruction did not interest me. So I was totally in favor of giving him immunity." The prosecutors reported directly to then-DOJ counterespionage official David Laufman, who would later play a key role in the discredited Russiagate probe, including opening investigations on several Trump advisers and signing off on wiretap warrants targeting at least one Trump aide, even though he knew they were based on a fabricated dossier financed by the Clinton campaign. Prosecutors also gave Clinton aides Mills and Samuelson immunity deals, over the objections of some FBI investigators who wanted to bring them before a grand jury to explain their actions. A handful of agents also argued for issuing a search warrant to seize their personal laptops, which they used to upload all the emails from the Clinton server and cull away supposedly “personal” messages that they claimed were out of the reach of investigators. Instead, prosecutors opted to review the laptops through an unusual consent agreement, which restricted searches to certain files and specific dates – and nothing before or after Clinton’s tenure as secretary, which put any email exchanges with Combetta out of reach – and required the FBI to destroy the hard drives after conducting the limited search, according to documents outlining the agreement. “This is simply astonishing given the likelihood that evidence on the laptops would be of interest to congressional investigators,” former Senate Judiciary Chairman Chuck Grassley and three other GOP congressional leaders complained in a letter to DOJ at the time. In his talk at the FBI conference, Comey explained that he had to agree with prosecutors and defense lawyers to limit the search because of “huge concerns” that attorney-client privilege and attorney work product could be discovered on the laptops, a concern that apparently did not register in the broad, sweeping search of Trump’s records. Agents scooped up at least 520 pages of attorney-client privileged information during their raid of Mar-a-Lago, according to a federal judge who has ordered an independent inspector to review the seized records for privileged material. Mills and Samuelson, who agreed to answer only a narrow scope of questions to prevent investigators from soliciting privileged information, were later allowed to sit in on Clinton’s own interview, which the FBI conducted after Comey had already drafted a statement exonerating her of mishandling classified information and obstructing justice. The director famously delivered the statement in a July 5, 2016, press conference, proclaiming the FBI found “no evidence” that Clinton’s emails were “intentionally deleted in an effort to conceal them.” Trump Didn't Get 'the Same (Gentle) Treatment' Grassley says the FBI “pulled its punches” investigating Clinton in comparison to Trump, who he says is being harshly investigated and prosecuted for the same offenses. “Trump has not been provided the same (gentle) treatment given to Secretary Clinton and her associates,” Grassley asserted in a recent statement.    To be sure, the agency has used more intrusive methods probing Trump for similar allegations of mishandling classified information and concealing documents under subpoena. Unlike the Clinton probe, where investigators and prosecutors sought to obtain evidence by consent whenever possible, the department has used a federal grand jury to issue subpoenas to Trump for thousands of documents, as well as surveillance video footage, from his Palm Beach estate. They also obtained a search warrant to raid his private office and family bedrooms. In addition to seizing more than 11,000 documents, agents confiscated some 1,800 personal items, including gifts, photo albums, clothing, passports, and medical and tax records, according to court records. Clinton and her representatives were spared such heavy-handed tactics and indignities, the senator pointed out. “Even though Secretary Clinton and her attorneys did not hand over classified records in their possession, they were not subject to a raid similar to what occurred at Mar-a-Lago,” Grassley said. In the end, computer-forensics investigators and intelligence analysts were able to determine that at least 81 classified email chains were transmitted and stored on Clinton’s unclassified personal server. Their levels ranged from CONFIDENTIAL to TOP SECRET/SPECIAL ACCESS PROGRAM, a highly sensitive designation which makes access to certain information restricted even to Secret and Top Secret clearance-holders without a “need to know.” By comparison, the FBI recovered 100 documents with classified markings from its raid of Trump’s home. They range in level from CONFIDENTIAL to TOP SECRET. In a court filing last month, DOJ said it developed evidence that presidential records held in a basement storage room at Mar-a-Lago may have been concealed or removed prior to a June visit by FBI agents to pick up classified documents, suggesting possible attempts to obstruct investigators.Investigators issued a grand jury subpoena in May for the records and visited Mar-a-Lago on June 3 to pick them up. When they got there, the filing said, a Trump lawyer handed them a large envelope containing documents. Another lawyer acting as the official custodian of Trump’s records certified in a sworn statement that they conducted a “diligent” search for classified papers in response to the subpoena. Over the next two months however, officials “developed evidence that government records were likely concealed and removed from the storage room and that efforts were likely taken to obstruct the government’s investigation,” DOJ said in its filing, without specifying what it believes was removed from the room, or by whom. The affidavit explained that this suspicion is why it sent some 30 armed agents back to Mar-a-Lago early last month to conduct a massive search of the property. Prosecutors say the additional documents they found with classified markings cast doubt on claims by Trump’s lawyers that they were fully cooperative with the subpoena. They are said to be focusing their investigation on Trump lawyer Christina Bobb, in particular, who allegedly acted as the custodian who signed the certification. Bobb, who has not been charged with a crime, did not respond to requests for comment. Trump’s legal team has told the court that the DOJ “significantly mischaracterized” the June meeting with Bobb and another lawyer, but did not elaborate. Laufman, the top prosecutor in the Clinton case and a caustic critic of Trump in the media, believes Trump should also be worried and “has significant criminal exposure” to an obstruction rap. “Either [his lawyers] wittingly lied or they got that assurance from their client, in which case Trump has jeopardy,” Laufman, an Obama appointee and donor, told Politico. But at this point, investigators can only speculate that documents were intentionally moved or destroyed to avoid compliance with subpoenas, which would be a felony. Legal experts note that prosecutors were careful to say in their filing that documents were “likely” concealed and that efforts were “likely” taken to obstruct the investigation, indicating they still lack solid evidence. “It is not clear from the filing if the FBI has evidence of intentional acts of concealment as opposed to negligence,” George Washington University law professor Jonathan Turley said. By contrast, prosecutors had solid material evidence – including emails, phone calls, work tickets and computer forensics – that Clinton operatives conspired to not just conceal but actually destroy documents under subpoena in violation of Section 1519 of the federal criminal code, the same statute cited by the FBI in its warrant to search Mar-a-Lago. It bars the destruction or falsification of any documents or materials “with the intent to impede, obstruct or influence” an investigation.”"Did Hillary Clinton violate 18 USC 1519 when emails from her private email server were destroyed during government investigation? Possibly, yes,” said Donald Skupsky, a lawyer specializing in government records-retention procedures. "In December 2014, she did instruct her team to destroy remaining emails after 60 days. And ultimately, she never halted nor protested again any records destruction,” he added. "Under 18 USC 1519, Clinton may have concealed and covered up the destruction of records." Both the Trump and Clinton cases also invoke Section 2071, a federal statute which prohibits the willful concealment, removal, or destruction of federal records. But in investigating Clinton’s homebrew server scheme, prosecutors declined to pursue a Section 2071 charge because they argued the statute had “never been used to prosecute individuals for attempting to avoid Federal Records Act requirements by failing to ensure that government records are filed appropriately,” according to the IG report. Some legal experts say the same standard should apply to Trump, whom the DOJ said tried to avoid Presidential Records Act requirements. Trump lawyer Jim Trusty said Trump’s retention of allegedly classified papers is akin to “an overdue library book” and complained that Biden administration prosecutors are holding him “to a different standard than anyone else” because he is a Republican. U.S. District Judge Aileen Cannon earlier this month issued an injunction temporarily barring the Justice Department from using the seized material in its espionage investigation until a Special Master can review it for privileged and other information outside the scope of the probe. Despite the order, the obstruction part of DOJ's probe can move forward. Among other things, investigators can continue to interview witnesses about whether subpoenaed documents were moved or concealed. “DOJ is in the midst of an ongoing criminal investigation pertaining to potential violations of the Espionage Act, as well as obstruction of justice, 18 USC 1519, and unlawful concealment or removal of government records, 18 USC 2071,” DOJ chief counterintelligence prosecutor Jay Bratt stated in a recent court filing. Paul Sperry is an investigative reporter for RealClearInvestigations. He is also a longtime media fellow at Stanford’s Hoover Institution. Sperry was previously the Washington bureau chief for Investor’s Business Daily, and his work has appeared in the New York Post, Wall Street Journal, New York Times, and Houston Chronicle, among other major publications. Tyler Durden Sat, 09/17/2022 - 18:30.....»»

Category: blogSource: zerohedgeSep 17th, 2022

6 former members of Congress describe the moment they decided it was time to quit Capitol Hill — while in their prime

As former Sen. Trent Lott of Mississippi put it, lawmakers need to know "when to hold 'em and when to fold 'em" as they approach old age. Vicky Leta/Insider Insider spoke with six members of Congress about their decision to retire early. One compared the day-to-day in the 1990s to "a middle-school lunchroom fight." Others pointed to incentives that can make some members stick around too long. Read more from Insider's "Red, White, and Gray" series. Former Rep. Pat Schroeder of Colorado had just about seen it all through her dozen terms in Congress.But her strong feelings for Capitol Hill began to atrophy in the mid-1990s, making it impossible to stomach a 13th.She witnessed then-Sen. Strom Thurmond turn 100 while still in office — an aide constantly by his side, reminding him to whom he was speaking and what he was supposed to be doing. Former Rep. Pat Schroeder of Colorado at an event for the ratification of the Equal Rights Amendment.Denver Post via Getty ImagesSchroeder, the first woman elected to federal office from the Rocky Mountain State back in 1972, had also endured a range of sexist indignities throughout her career in Congress. The ones that stood out were when the chairman of the House Armed Services Committee, F. Edward Hébert, refused to give her a seat — he once remarked he would give her "half a seat" with the late Ron Dellums, who was Black — or when a local paper in Colorado referred to her as a "housewife" in the headline of a story about her historic victory.The ultimate decision to retire from Congress at age 56 in 1997, however, came down to one man: a brash congressman from Georgia whose US House speakership would permanently alter the tone and tenor of Washington. "I decided to call it quits after two years of Newt Gingrich," Schroeder, a Democrat, told Insider from her current home in Florida. "I kind of decided the place wasn't big enough for both of us, and I would come home at night and feel like I had been in a middle-school lunchroom fight all day."'I want to quit early enough to make some money'Four months in the making, Insider's "Red, White, and Gray" series explores the costs, benefits, and dangers of life in a democracy helmed by those of advanced age, where issues of profound importance to the nation's youth and future — technology, civil rights, energy, the environment — are largely in the hands of those whose primes have passed.Insider spoke with five former members of the US House, as well as one ex-senator, to understand why they decided to give up political power while in their prime.Rather than being ousted in a primary or general election — or even a scandal — these lawmakers decided on their own terms to quit serving on Capitol Hill. Both Republicans and Democrats agreed there's a dignified way to retire from Congress. But they warned that there are structural incentives for some lawmakers who arguably stay in Congress too long, from pensions and pay to more abstract considerations, such as whether they — or a new generation of leaders — should be driving the nation's legislative agenda.Former Rep. Barney Frank of Massachusetts said he set himself a hard retirement deadline of 75, realizing back in the 1980s that he wouldn't have to worry much about reelection for the foreseeable future, his district a safely Democratic one that stretched from the Bay State's South Coast region into Boston's suburbs."I just thought that I was likely to hit a point when age started to show, and I also decided that I wanted to retire — it's a cliché, but a valid one — that I wanted the question to be 'Why are you quitting?' not 'Why aren't you quitting?'" The congressman's timeline was slightly accelerated, as he left office in 2013 at the age of 73. Frank explained at the time that his newly drawn district would require him to meet scores of new voters, and he would only be representing a fraction of his previous constituents.In his interview with Insider, Frank added that his tenure as chairman of the House Financial Services Committee wore him down. This proved particularly true after his work on a bill that would bear his name — Dodd-Frank — which bolstered regulation of financial markets after the 2008 crash. Money also contributed to Frank's decision to retire. Former Rep. Barney Frank of Massachusetts announced his retirement in 2011.Darren McCollester/Getty ImagesAs the first congressman to voluntarily come out as gay, Frank had no plans of putting his money into his congressional pension plan, but once he realized he would marry his husband, Jim Ready, "then I began to think about, well — I want to quit early enough to make some money so that I leave Jim with something."Frank said he decided he wouldn't go into lobbying, but after doing some writing and paid speaking gigs, he was off to a relatively peaceful, and financially secure, retirement.'I was not optimizing revenue'Like other congressional retirees, former Democratic Rep. L.F. Payne of Virginia described making a considerable financial sacrifice while serving in Congress.Even though federal lawmakers generally earn $174,000 annually — hardly paupers' wages — many could easily make more as lawyers, lobbyists, consultants, and the like. However, as the president of the Association of Former Members of Congress, Payne said other incentives — including those that involve power and prestige — tend to make lawmakers stick around or eye the exits.Payne described a common feeling among lawmakers of being cash poor, with some sleeping in their offices or finding other more unusual arrangements to stave off the cost of frequent travel and maintaining a property both back in their home districts and Washington, DC."Each year I was in Congress, I was not optimizing revenue, but that wasn't the point," Payne said.Former Rep. L.F. Payne of Virginia.Robert A. Reeder/The The Washington Post via Getty Images The precipitating event ahead of his retirement wasn't a disdain for Congress or an external factor, such as redistricting. Rather, Payne thought he would be better suited for a more "executive"-type role, comparing legislatures to boards of a company.So Payne attempted a political career change. It didn't go as planned.Payne ran in — and lost — the 1997 Virginia lieutenant governor's race to Republican John H. Hager, who rode on the coattails of then Gov. Jim Gilmore in a landslide victory."Being a governor is much more like being a chief executive, so there's a real difference in what kind of impact you can have," he said. He eventually joined McGuireWoods Consulting after the loss, then took a seat on the FMC board in 2016.Felt like 'a whole lifetime'Even among the self-described "happy warriors," such as former Rep. Ileana Ros-Lehtinen of Florida, the mileage from consecutive terms catches up with them. Eventually.Ros-Lehtinen, a Republican, told Insider that while she loved serving just shy of 30 years in Congress, her service felt like "a whole lifetime."Ros-Lehtinen is now a lobbyist at Akin Gump Strauss Hauer & Feld. She calls the firm a "natural home for me" because of her work on foreign affairs and offers no apology for her career change.Former Rep. Ileana Ros-Lehtinen of Florida.Miami Herald/Tribune News Service via Getty ImagesWhile Ros-Lehtinen said she had a positive experience in Congress, the increase in partisan polarization and heated rhetoric has made serving on Capitol Hill more difficult."People are increasingly being driven out because of the toxicity in Congress," she said. "It just seems that everybody's grumpy. They don't like what they're doing. It doesn't give them a sense of real satisfaction."For Schroeder, that erosion of congressional decorum began with the arrival of Gingrich, whom she blamed for breaking up bipartisan working groups and portraying Democrats as enemies, not the loyal opposition.Former House Speaker Newt Gingrich.YURI GRIPAS/AFP via Getty Images"He just did not want any of that stuff, and if I would be talking to my friend Olympia Snowe or Connie Morella, somebody from other side would come over and tell them to get over on their side of the aisle," Schroeder said of her Republican colleagues.More money, more problemsFormer Rep. Steve Israel of New York said that political fundraising pressures can exhaust lawmakers, with members often dedicating hours of their days to "call time," where they pick up the phone and ask donors for cash.Israel got a hyper-dose of call time during his stint as chairman of the Democratic Congressional Campaign Committee, the House Democrats' main fundraising arm."Most of my days were spent getting on planes, getting off planes, and raising money," Israel told Insider. "And I made the decision that there are other things I could do with my life and fundamentally there came a time when you just need to give someone else a chance."'When to hold 'em and when to fold 'em'Israel noted that he likely could have kept winning elections for many years."A lot of members of Congress make the decision not to run because they face the possibility of a stinging defeat," Israel said. "My decision not to run was based on the fact that I knew I was going to win in a Democratic district, and decided that it was time to turn the page."Former Rep. Steve Israel of New York.Bill Clark/Roll Call via Getty Images.Israel, along with Frank, expressed opposition to hard term limits on members of Congress, pointing to the danger of unelected staff becoming more powerful than elected officials — particularly with the help of special interests — as the holders of institutional and procedural knowledge."I think, actually, term limits undermine long-term democracy," Israel said. "A typical member of Congress can spend three to five terms in office, but a K Street lobbyist can spend a lifetime."Frank pointed to the one mechanism that can't be changed as part of any effort to rejuvenate Congress: the voters."The major factor that people don't bring up is that it's the voters who decide," Frank told Insider. "You know, this is not the House of Lords, so the question apparently is, I would say this: that people in their late 70s and 80s still being in office is seen as a problem much more by commentators than voters."On the Republican side, former Sen. Trent Lott of Mississippi also spoke of making room for a new generation.Former Sen. Trent Lott of Mississippi, right, speaks with former Vice President Dick Cheney in 2001.David Hume Kennerly/Getty ImagesLott retired at 67 — which puzzled some of his contemporaries. "Some of my friends came to me and said, 'Why are you leaving? You're in position to maybe get back in as leader,'" he recalled. "I said, 'I've been doing this for 35 years. Plus four years as a staff member. So you got to know when to hold 'em and when to fold 'em. And my wife said it was time for me to get a real job before it was too late."Schroeder, now 82, went further. She said federal lawmakers should have to retire at age 70, recalling members joking about "oh, to be 80 again."When asked if she still feels it was worth it to retire at 56 — even while colleagues from her time in Congress continue to serve — Schroeder didn't miss a beat."Oh, absolutely."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 14th, 2022