U.S. state attorneys general likely to bring antitrust lawsuits against Google: source

A group of state attorneys general led by Texas are likely to -file an antitrust lawsuit against Alphabet Inc's Google and are working on potential litigation for later this year, a person familiar with the situation said on Friday......»»

Category: topSource: reutersMay 15th, 2020

Walmart to pay $3.1 billion to settle opioid lawsuits

Walmart joins CVS and Walgreens in paying more than $13 billion to communities to fight opioid addiction A Walmart store.Bruce Bennett/Getty Images Walmart is agreeing to pay more than $3 billion to settle lawsuits stemming from the opioid crisis. The deal is part of a landmark settlement with a group of state attorneys general. The group accused Walmart of failing to implement appropriate controls around opioid prescriptions. Walmart is agreeing to pay more than $3 billion to settle opioid lawsuits.The deal is part of a landmark settlement with a group of state attorneys general who've accused Walmart of failing to implement appropriate policies, procedures, and controls around prescriptions for opioids.The settlement needs to be approved by 43 states before it's final. Walmart's joining CVS and Walgreens in the settlement - those two chains have agreed to pay more than $5 billion each.The money will be distributed to communities to fight opioid addiction.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 15th, 2022

Vertiv Holdings – The Trifecta Of Trouble: Cash-Strapped, Low-Margin And Fraud-Prone

Vertiv Holdings Co (NYSE:VRT) Rating UNDERPERFORM Price (14-November-22): $14.93 Target price: $3.55 52-week price range: $7.76 – $27.97 Market capitalization: $5.6B Enterprise value: $8.8B Summary: Vertiv designs, manufacturers and services critical digital infrastructure for corporate customers, data centers, and hyperscale customers like Google, Microsoft and Twitter. VRT has booked almost $3B of unprofitable business in […] Vertiv Holdings Co (NYSE:VRT) Rating UNDERPERFORM Price (14-November-22): $14.93 Target price: $3.55 52-week price range: $7.76 – $27.97 Market capitalization: $5.6B Enterprise value: $8.8B Summary: Vertiv designs, manufacturers and services critical digital infrastructure for corporate customers, data centers, and hyperscale customers like Google, Microsoft and Twitter. VRT has booked almost $3B of unprofitable business in the last two years to project the optics of growth. .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2022 hedge fund letters, conferences and more   Leverage has been increased aggressively to the point of financial distress due to lack of cashflow. There is documented evidence that management deliberately misled investors in order to help the PE owner reduce its stake in the company. VRT missed 4Q21 earnings on February 23, 2022 by an unprecedented amount for an industrial company. The stock was down 37% on the day. Management increased guidance repeatedly prior to the event. It has since announced “corrective” measures, lowered guidance several times for 2022, but provided a very optimistic outlook for 2023. The CEO resigned on October 3, 2022. Nothing has fundamentally changed. VRT’s structurally weak business model is caught on the wrong side of inflation with limited pricing power to customers while facing escalating input costs. VRT will likely have to announce a capital raise in the near-term, and should discuss the allegations detailed in the amended class action lawsuit filed on September 16, 2022, which have yet to be addressed publicly. A depleted product mix, excess leverage and management problems make us skeptical of the long-term viability of the business. There are three key issues with the company: 1) Lack of cashflow and overleverage, 2) Credible allegations of fraud and 3) Structural problems with the business model. Legal Disclaimer After extensive research, we have taken a short position in shares of Vertiv Holdings Co. (NYSE:VRT). This report represents the summation of our opinions. In no way should this report be taken as investment advice or constitute responsibility for investment gains or losses. The information in this report should not be relied upon for investment decisions. All investors must conduct their own due diligence and consult their own investment advisors in making trading decisions. Investors seeking investment guidance on VRT should consult resources with professionals licensed to provide investment advice. The investment banks Cowen & Co., Goldman Sachs, Deutsche Bank and JP Morgan are all listed as having securities analysts that cover VRT. These institutions have significantly greater resources than Dalrymple Finance and the banks’ opinions may differ greatly from ours. We strongly encourage investors to consult these professionals for advice. This is not a solicitation to transact in any of the securities mentioned. The data herein has been obtained from public sources we believe to be reliable. However, the information is presented on an ‘as is’ basis and we make no warranty of any kind as to the accuracy, timeliness and/or completeness of any material contained in this opinion piece. Employee Reviews Meltdown Oct 10, 2022 - Supply Chain Manager in Columbus, OH Pros I would say the people, but many of the good ones have left or are in the process of trying to leave Cons Seems like senior leadership was forced to bring all employees back to the office by the board chair. This strategy is slowly backfiring on them, however they continue to double down. I've never worked in a place where trust is so low towards senior leadership. I knew it was time to go when part of my job required me to track badge swipes. No thank you. - Underlying data integrity and overall integration of past acquisitions is SO messy. Very difficult to run a business on multiple ERPs when nobody can agree on what the source of truth is. Leadership strategy was quite confusing during my time there. Hopefully a new CEO in 2023 can turn the ship around ... or stop it from sinking entirely and becoming a business case study of what not to do. Absolute Dumpster Fire Aug 22, 2022 - Anonymous Employee Pros Some of the people that work there, but honestly not much. Cons Complete mismanagement by the executive chairman and CEO, terrible insurance, poor PTO policy, Johnson family in positions they’re not qualified for. Ethics Are Laughable Aug 3, 2022 - Senior Engineer Cons Unfortunately, those leaders will most likely never recognize their potential at Vertiv. Decisions are made in the company in a complete knee-jerk vacuum. They have an ethics policy that only applies to the pee-ons since family members in senior leadership positions report to each other. I wonder how they square that up with the things they wrote in the "company handbook". The company has a philosophy of just buying stuff and not investing in people. They have millions of dollars in software licenses and hardware devices sitting on shelves for years, but you can't get a backfill for someone who leaves because they are working 75 hours a week because they took over the duties of the last person that left. Advice to Management Get rid of the CEO, CFO, and their family members and start making decisions in the organization's best interest instead of a tiny nepotic circle. Vertiv: The Trifecta of Trouble: Cash-strapped, Low-margin and Fraud Prone Vertiv (VRT) sells power, cooling and racking hardware to data centers. It was taken public via a SPAC in early 2020 as a turn-around play in a growing sector where a legendary industrials manager, David Cote of Honeywell, would increase depressed margins driving profits and cash flows. The reality is quite different. VRT is a cash strapped, low margin business operated by a conflicted management team currently working under the dark cloud of credible claims of fraud. In 2021, management repeatedly provided detailed assurances to investors it was mitigating inflationary pressures with price increases that would create margin and drive cash flow later in the year. Instead, the company reported a catastrophic earnings miss in 4Q21. Lawsuit allegations that management mislead investors to artificially inflate the stock price are corroborated by management’s own subsequent comments together with testimony from high-ranking former executives. We believe nothing has changed in 2022. After lowering guidance several times, the stock is being held up by the prospect of a financial turnaround in 4Q22 and 60% operating profit growth in 2023. The company is unlikely to meet either, in our view. Prior to reality hitting the stock, we expect management to conduct an equity offering to avoid a cash crisis. The offering, and a 4Q miss will kill faith in the 2023 narrative and catalyze stock’s ~70% decline to fair value of ~$3.50. Key issues include: Management problems, credible allegations of fraud The conflicted management team is heavily weighted with appointees from Platinum Equity, the PE sponsor, and the CEO’s family members. Numerous former executives have provided convincing testimony supporting allegations that management misled investors and omitted material facts. The damning evidence is an ‘elephant in the room’ that needs to be publicly addressed. Financial distress and cash shortages A $408M cash burn thus far in 2022, low cash balances, little credit availability and a distressed debt/EBITDA multiple of 8.3x make the company vulnerable to a cash crisis. Distress is evident in VRT being put on “credit hold” - vendors refusing to fill orders - for non-payment of outstanding balances. We believe management will front-run the expected 4Q miss and avert a cash crisis with an equity offering. Post LBO structural issues Asset sales to fund dividends and product discontinuances have left the company’s mix dominated with good quality, but lower margin products. This combined with large hyperscale buyers flexing their market power by pressuring prices lower and payment terms longer, create a structurally sub-par business. We are skeptical of VRT’s long-term viability. A combined primary and secondary share offering Platinum still owns 38M shares and the lock-up recently expired on 23M of insider shares from the acquired E&I Engineering. We expect an imminent offering of ~20M primary and ~40M secondary shares for a total of 60M, increasing the float ~20%. Investment Thesis and Valuation VRT is a broken business. It was a low margin division of its former corporate parent, Emerson Electric (EMR), and profitability eroded further after it was purchased in late 2016 in a $4B LBO by Platinum Equity. Platinum sold VRT’s most profitable division and discontinued two well-regarded software lines to fund a $1B cash-out dividend in 2017. The LBO and subsequent mismanagement of the company left VRT with a depleted product mix of good, but low margin lines, and excessive levels of debt and weak cash flow. The diminished and levered company was taken public in recapitalization transaction in early 2020 via a SPAC at a $5B valuation after failing to get support for a traditional IPO. VRT was sold to investors as a turnaround story. Legendary industrials manager David Cote, credited with turning around Honeywell, was behind the SPAC. It was said, he would turn his skills to VRT, increasing margins to drive profitability and cash flow. Platinum exited the transaction with 118M shares of VRT and an allowance of two registrations per year. The de-SPAC’ed stock did well through 3Q21 even though the margin growth promised did not materialize. Between August 2020 and November 2021, the strong stock allowed Platinum to sell 80M shares at prices ranging from $15 to $25 for total proceeds of $1.55B. Including the earlier dividend and a cash payment received on the IPO, Platinum had collected approximately $2.4B in cash proceeds from its original $1.2B investment, and still has 38M shares remaining. The handicapped business is made worse by a conflicted and ethically compromised management team. Senior management is dominated by Platinum appointees and family members of the CEO, who recently announced his retirement for health reasons. The board of directors contains two Platinum appointees. Although the stock held well in in 2021, margins and profits did not materialize as promised. The stock was driven largely by management’s continued assurances to investors on conference calls, at industry conferences and in media that the company had taken pricing action and was making progress on improving margins. Increasing profits and cash flow would follow late in the year. The stock fell apart on reporting a significant earnings miss in 4Q21, declining -37%, an unprecedented amount for typically staid reports of industrial companies. On the call, management admitted to being “behind the inflation curve all year” seeming to accept responsibility, while simultaneously pinning the failure on sales people for giving discounts. The truth about the gap between management set expectations and actual results was revealed in an amended class action lawsuit filed in September 2022. The testimony presents credible evidence of fraud committed by management, detailing how they wove a public narrative of taking pricing actions and reducing discounts to improve margins while touting a large and growing backlog. In reality management took no pricing actions, directly approved discounts, and the backlog was “off the charts unprofitable” and would stay that way contrary to management statements, because, the company was contractually prohibited from raising prices on large orders. The lawsuit alleges that management mislead investors and omitted material facts to artificially inflate the stock price. The testimony convincingly corroborates the allegations. We do not think anything has changed in 2022. Management continues to over-promise and under-deliver. The two key metrics are adjusted operating profit (AOP), which is operating income plus intangibles, and free cashflow. Near-term AOP guidance has been lowered significantly, while full-year expectations have come down less. Free cash flow guidance started at $150M and was lowered to $0 in August. In early October as part of the announcement of CEO Robert Johnson’s retirement, the company lowered full-year AOP guidance to approximately $460M from $480M. Free cash flow expectations were not addressed, but management proffered an exceptionally optimistic long-range guidance of 60% AOP growth to $740M for 2023. The strong forward guidance softened the blow of another near-term disappointment. Just 3-weeks later on the 3Q22 call, free cash flow guidance was cut from $0 to ($125M). Management offered an explanation for the weak cash flow on the 3Q call. In our estimation, a management team keenly focused on driving free cash flow would have been aware of the problem earlier. Changes in the contour of 2022 guidance mean 50% of annual AOP is now expected in 4Q22, and the large negative YTD free cash flow of ($408M) is to be mitigated by $283M of free cash flow generation in the quarter. It is an unprecedented turnaround in financial fortunes we believe the company is unlikely to achieve. We think it’s questionable whether VRT can meet either 4Q22 or 2023 forecasts. Management guidance making 2022 results entirely dependent on an unprecedented 4Q turnaround paving the way to 60% profit growth in 2023 carries a sense déjà vu. In our view, it is not credible. The resurgent stock price is likely the result of investor focus on 2023 guidance, which creates the illusion of a cheap stock, and the recently announced 7% stake taken by an activist investor. We don’t expect the enthusiasm for the stock to remain. VRT is still an excessively levered, cash-strapped, low margin business. The high cash burn and inadequate liquidity make the company vulnerable to a cash crisis if 4Q22 free cash flow forecasts are not met or exceeded. We think it is highly likely that the company misses 4Q free cash flow guidance. We don’t believe management will risk a cash crisis in this environment. More likely, in our view, is that they take advantage of the current stock price by conducting an equity offering while investors await strong 4Q22 results and anticipate a robust 2023. We expect a combination primary and secondary offering and another 4Q profit miss to catalyze a steep decline in the stock. Valuation Platinum purchased Vertiv from Emerson Electric (EMR) in November 2016 at an enterprise value of $4B when the company generated $572M in EBITDA. In 2021, after 5-years of Platinum ownership, VRT produced $497M in EBITDA. Despite the poor performance during the Great Data Center Boom, VRT currently trades at an EV of over $8B, twice the debt-free valuation at which it was purchased. VRT’s stock got a boost recently when activist fund Starboard Value announced it took a 7% position in the company. The fund appears to be buying into the same margin expansion story management has been selling since the original SPAC presentation in 2019. Starboard also maintains that VRT is undervalued relative to peers. That might be the case if using management’s forward guidance. Using actual financial performance shows the company to be the most highly valued among peers by most metrics. Starboard was the SPAC sponsor of another discredited data center story – Cyxtera Technologies (CYXT), which we wrote about. A version is available on ValueWalk. In the table below we show VRT’s comparative valuation with peers based on trailing 12-month performance. VRT trades at an EV/EBITDA multiple of 24x compared to an average of 15x for the group. VRT is the only company in the group that has negative CFO for the period. The long history of sub-par financial performance, the inability to generate cash, management’s high forecasting error, and financial distress lead us to conclude that the stock should trade at a discount to the group. Using a multiple range of 10-14x TTM EBITDA, we arrive at an average target price range of $3.55, ~76% below current prices. TABLE OF CONTENTS Low Margins, Cash Shortages and Leverage 2022: 9-months of disappointing results and more to come Profit margin compression A long history of cash shortages The evolution of debt A Broken Business Goes Public Platinum Equity’s monetization: A failed IPO and successful SPAC The 2021 Catastrophe Management Problems and Legal Consequences: Allegations of Fraud The legal fallout: testimony implicating management 2022 and 2023: Continued (Mis)Guidance Appendix Timeline of events including the stock price Platinum Equity’s Vertiv investment Long-term financial statements Low Margins, Cash Shortages and Leverage Vertiv was sold to investors in 2019 as a turnaround story. It was a company with strong sales, but weak margins. Large competitors such as Schneider Electric (SU: Paris) and Legrand (LR: Paris) have average gross margins of 40% and 50%, respectively; and operating margins of 17% and 20%, respectively. This compares to 27-33% gross margins and 1.5-5.2% operating margins for VRT. Problems with margins have been persistent since the company came public in 2020. We believe VRT has not been able to improve margins to industry levels partly due to the mismanagement detailed in the lawsuit as well as structural issues with the business. Below we detail the current state of finances followed by a summary of VRT’s long history of sub-par performance. Our exhibits show summary results. Detailed models can be found in the Appendix 2022: 9-Months of Disappointing Results and More to Come 2022 has been a financial disappointment thus far. Guidance for adjusted operating profit (AOP), defined as operating income plus amortization of intangibles, was reduced to ~$460M from $525M. The 3Q22 financial report revised free cash flow guidance to ($125M) from $0 in august and an original $150M. AOP and FCF expectations for 2022 are both below the disastrous 2021 results. The table below shows summary financial performance on a year-to-date basis along with estimates of results required to meet management’s latest guidance. Key indicators including gross margins and free cash flow have been very weak thus far. Management guidance assumes material improvements in both in 4Q. VRT has burned ($334M) in CFO and ($408M) FCF thus far in 2022. Working capital accounts absorbed $448M in cash with inventory and accounts receivable accounting for roughly 50% each. On the 3Q22 conference call, management explained poor cash flow citing elevated levels of inventory necessary for high 4Q sales and delayed cash collections, including advanced payments on large orders. We find it inconceivable that management was unaware of the impact of inventory and collections on cash flows until the 3Q call, begging the question as to why they did not cut FCF guidance on the October 3rd business update? Additionally, management’s explanation of the weak cash flow indicates VRT is being forced to finance customer purchases. It is yet another instance of the hyperscale data center operators flexing their buying power muscle at the expense of supplier margins. In discussing pricing changes, management said it has clauses built into “some” contracts. These are pricing bands that can go up and down with changes in underlying materials pricing. This means that some price gain can be clawed back under certain circumstances. In our view, the terms suggest a continued long-term lack of pricing power. Part of VRT’s profitability issues stem from the underperformance of E&I Engineering, which was acquired in 3Q21 for $1.8B and a hefty estimated 4.4x EV/revenue. Discussion on the 3Q conference call indicate E&I’s current profit contribution is only ~ 20% of original expectations. In our view, E&I’s underperformance raises the possibility of a year-end impairment charge. VRT’s total debt rose $273M to $3.3B since 4Q21. VRT negotiated an increase in the ABL facility by $115M on September 20, 2022, but the term of March 2025 was NOT extended, signaling an unwillingness of lenders to commit to longer-term funding even on the most secure level. ABL debt rose from $0 in 4Q21 to $280 in 3Q22. The cash balance as of 3Q22 was $258M; the remaining $270M in ABL credit brings total liquidity to $528M. However, fully drawing all credit would represent a clear sign of distress, so practical liquidity is likely only ~$400M. That is not adequate cash and total liquidity for a company with nearly $6B in sales and $4B in annual cost of goods. The company had more than twice the cash balance in 2020 when sales and COGS were 23% and 29% below expected 2022 levels, respectively. An equity offering is necessary. 20M primary shares at current prices would raise almost $300M for the company. Additionally, Platinum still has 38M shares to sell and the lock-up on E&I insiders for 23M shares ended on November 1, 2022. We think there is a high probability that the company does a combination of primary and secondary shares for a total of 50-80M shares. Assuming 20M primary and 40M secondary, total shares outstanding and the float would increase ~5% and 20%, respectively. Profit margin compression As part of Emerson, VRT had ~$4.3B in sales with EBITDA margins of 10-13%. The financial profile deteriorated under Platinum Equity’s stewardship with declining sales, profits, and increasing leverage ratios, as shown below. The trajectory of the P&L after 2016 reflects declining profitability associated with Platinum’s monetization through the sale of ASCO, the most profitable line in VRT’s portfolio, and focus on top-line growth rather than profitability. The 8.3x EV/TTM EBITDA ratio signals distress. It declined briefly when debt was paid down with the recapitalization, but has reverted quickly due to the lack of profitability. Gross margins for the 9-months of 2022 of 27.4% are 1000 bps below the average margin generated when the business was owned by EMR. Part of the margin issue stems from the $3B unprofitable backlog the company built during 2021. In public forums, management asserted they were taking corrective pricing actions to improve margins in the face of raw materials inflation, but in actuality nothing was done. Lawsuit testimony revealed that the company was contractually prohibited from raising prices on large orders. Financial distress compounded margin issues. Lawsuit testimony notes VRT gave 2-3% discounts in exchange for up-front payment at least up to the “big miss” reported in February 2022. Supply chain issues were a significant problem in 2021 and linger today. Management frequently cited supply chain issues as the reason for making “spot” or “grey market” purchases of materials and higher prices. This was only partially true. Lawsuit testimony states that vendors were ‘decommitting’ to orders and putting the company on “credit hold” because VRT was not current on its payments. Thus, the company’s problems were to some extent the result of financial distress and mismanagement. VRT’s low profitability, inability to develop margin, and high leverage are particularly poor relative to peers. Legrand and Schneider navigated 2021 without losing margin and although Hubbell lost 200 basis points of margin in 2021, it built it back in 2022. In contrast, in the 9-months of 2022, VRT’s gross margins 630 basis points below 2020 levels. A long history of cash shortages Overall profitability problems evident on the P&L are shown in VRT’s long-term inability to generate cash flow, as shown below. In the almost 5-year period shown, VRT has generated a aggregate of ($78M) in cash flow from operations and ($523M) in negative free cash flow. The company has raised a total of $1.8B largely from the SPAC recapitalization to fund the deficits. 2021 FCF of $158M looks merely lackluster in the financial context of the disappointing ($408M) thus far in 2022 and $163M for 2020. However, in the context of both the industry and management’s guidance, 2021 was a disaster. VRT’s 2021 cash flow margin of 4% is significantly below industry averages. Companies such as Schneider Electric (SU:PA), Legrand (LR:PA), and Hubbell Inc. (HUBB: NYSE) had depressed CFO margins averaging 13.7% in 2021, down from an average of 17.7% in 2020. Management’s original FCF guidance of $300M, which was valid through the 9/8/21 reduction, roughly $353M of CFO for the year. The actual result was 30% below at $211M. The magnitude of the cash flow miss in 4Q21 from recent guidance is highly unusual in the typically staid reporting conventions of industrial companies. It shocked investors. The Evolution of Debt Platinum put $3B of debt on VRT’s balance sheet when the LBO transaction took place, increasing to $3.5B, declining to $2.2B with the SPAC recapitalization transaction. In 2021, the company increased debt by approximately $1B largely to cover the cost of the E&I Engineering acquisition. In 3Q22, the company increased the ABL facility by $115M to $550M and drew a total of $280M. The interest rate on the ABL facility increases with utilization. At the current utilization rate of 49%, we estimate VRT pays 4% annually. If borrowing increases ~$88M to $368M, the interest rate will increase to 4.5%. Interest expense is increasing along with debt levels and overall rates. In 3Q22, interest expense increased $5.4M or 16% sequentially to $38.8M; it increased 75% or $16.6M y/y from $22.4M. We interpret the companies minor increase and rapid utilization of the ABL as another sign of distress. The lack of operational cash has forced the company to fund working capital needs with debt, leaving only $270M of available credit. A Broken Business Goes Public When Emerson put its Network Power division up for sale in 2016, the company first tried to find a strategic buyer at a $4B price tag and steep 18x EV/EBIT valuation. It was not an easy sale. Revenues at the business had declined 28% from 2011 to 2014, and was one of Emerson’s least profitable lines. Dave Farr, EMR’s CEO at the time and responsible for building Network Power, noted that “he would not want that put on his tombstone”. When interested strategics balked at the price and walked away, EMR filed a form 10-12B with the SEC for a spin-off to shareholders. The spin-off never took place. Private equity intervened. Platinum Equity purchased Network Power, now Vertiv, in a $4B LBO financed with $1.2B of debt and $3B of company level debt. The company had numerous good product lines including ASCO, the Automatic Transfer Switch (ATS) company, Liebert’s power and colling products, and two well-regarded software line. However, following the LPO, key products have been sold and neglected. In November 2017, one year after purchasing the company, Platinum sold the ASCO Power division to Schneider Electric. ATS switches automatically transfer between base and back-up power sources. In the case of data centers, it is between the utilities and UPSs. It is a core power technology that ensures facilities remain online. ASCO was critical part of VRT’s product portfolio. According to VRT’s original presentation, the whole company generated $3.865B in revenue in 2016 with $472M of EBITDA and a margin of 12%. According to this article, in 2016, ASCO generated $468M of revenue with $107M of EBITDA and a margin of 23%. ASCO was VRT’s most profitable business, generating 12% of the revenue but 23% of EBITDA. The ASCO technology and strong market share in the U.S. catapulted Schneider to leadership position in key data center power chain. The division was sold for $1.25B or 11.7x EBITDA. While Platinum presented the sale as a “step forward in their evolution as the premier provider of digital critical infrastructure solutions”, we believe it was a known strategic error, a sacrifice made to private equity IRRs. According to VRT filings, the company paid Platinum a $1.024B dividend in 2017, leaving the business burdened with the same debt, little equity and short the most profitable product line. Platinum followed the ASCO sale with several small acquisitions. In December 2017, VRT acquired the private thermal management company Energy Labs for $149.5M. Two weeks later in January 2018, the company acquired data center equipment provider Geist. Geist provided Power Distribution Units (PDUs), which control and distribute electrical power in data centers. As noted in this article, the acquisitions appeared to signal VRT’s new direction. The purchases gave VRT access to reams of data that could be incorporated into the company’s data center infrastructure management product (DCIM), Trellis, which was an industry leader. That was not to be. Vertiv’s leadership in software completely eroded when Platinum took over. The company’s popular Aperture Asset Management software was discontinued in 2017, and Trellis became an unwieldy behemoth of an application. It, too, was discontinued. DCIM software has been a challenge and is in the process of evolving. That said, VRT management willingly gave up its market leadership position in the segment. The absence of a solution means customers will go elsewhere, and perhaps they will bring their hardware orders along with them. Key competitor Schneider Electric has advanced where VRT has retreated. Schneider has continued to invest despite challenges in the data center software space. In June 2022, the company announced DCIM 3.0, a complete overhaul of their system. Networks are becoming larger and more distributed, making them more complex and difficult to manage. This combined with the trend to automate data centers means that VRT abandoned key software products (and related R&D spending) at a time when automation will drive the toward increased reliance on software. Customers operating large, distributed networks will need monitoring tools for asset tracking and predictive maintenance. As this article notes, management’s decision to discontinue its product lines leaves the company “under-invested in software”. We think the company’s current product portfolio is wanting. Power products focused on Liebert’s uninterruptable power supplies (UPS) has been augmented with the recently acquired higher-margin E&I Engineering’s switchgear, but ASCO’s ATS line was a key pillar of the segment. Liebert and Geist’s thermal lines are competitive as well. However, despite being well regarded in services, we believe the discontinued software products diminish the effectiveness of the portfolio as a whole. Under Platinum’s stewardship, VRT’s most profitable, industry-leading division was sold to fund a dividend; important software products were discontinued, likely to cut costs in effort to cover the cost of leverage. The long-term cost of product portfolio neglect, is the erosion of competitive positioning, margins and earnings power. We believe this is evident in the continued lack of pricing power. As noted in the lawsuit “no one would pay list price”. In the table below we show VRT’s performance under EMR and the pre-IPO performance following Platinum’s acquisition. As is evident in the numbers, VRT did not recover from the sale of ASCO, and despite the discontinuance of the software lines, and associated R&D, VRT’s financial performance never recovered to the modestly profitable levels when managed by EMR. Platinum’s Monetization: A Failed IPO and Successful SPAC Just two years after purchasing VRT in 2H18, Platinum approached Goldman Sachs looking for strategic alternatives for Vertiv, including a potential IPO or sale. Moody’s rated the company’s debt Caa1 and Caa2, one notch above ‘default imminent’. During the period, the company acquired the maintenance business of MEMS Power for an undisclosed sum. We assume that Goldman could not offer Platinum an attractive alternative, as according to the proxy associated with VRT’s IPO, the discussions were soon ended. Goldman soon found a suitable opportunity for Platinum’s exit. In March 2019, introduced Vertiv/Platinum to GS Acquisition Holdings Corp. (GSAH) a Goldman Sachs affiliated SPAC with David Cote, former CEO of Honeywell. On December 9, 2019, GSAH’s board had approved the acquisition of VRT. The initial investor presentation noted that “renowned diversified industrial executive” David Cote, would take the role of Executive Chairman. At the helm of CEO would be Rob Johnson, an industry veteran brought in by Platinum in 2016 from venture capital firm Kleiner Perkins. The investment thesis on Vertiv was the management would improve margins and drive profitability and cash flow to industry levels. The proposed transaction was for total SPAC and PIPE equity of $1.93B. The public SPAC holders were to hold 20% of the equity, the sponsors 5%, PIPE investors 37% and Platinum 38%. Including net debt of $1.94B the total enterprise value of VRT was expected to be $5.3B. Upon consummation of the merger, Platinum received $342M in cash consideration allowing with the 118M shares. At the time of the IPO Platinum had already extracted $1.34B in cash and held a stock position with $1.54B. Platinum had the right to register shares twice a year. The firm began selling immediately following the expiration of the 180-day lockup. In August 2020, Platinum sold 23M shares for $350M in proceeds; in November 2020, it sold 18M shares for $301M in proceeds. 2020 was a forgiving year. Overall, sales were down modestly, but EBITDA margins registered a slight increase. Most importantly, the stock price increased from the IPO merger price of $10 to $18 despite the lackluster results. 2021 would be quite different. The 2021 Catastrophe The first three months of 2021 was business as usual. The company reported 4Q20 and full-year results in February, characterizing them as ‘strong” despite widely missing the mark on adjusted operating profit and free cash flow projections shown in the initial SPAC presentation. Management boasted of the growing backlog and Executive Chairman David Cote noted that there were “sales growth and margin rate expansion opportunities abound”. Further, guidance was promising with mid-single-digit sales growth, but 68% y/y growth in AOP. The company expected $575M in AOP and $285M of free cash flow in 2021. Three business days following the call, Platinum sold a large block of stock - 17.4M shares at new highs of $20.14, netting the PE firm $350M in cash. Things began to change with the 1Q21 call in April. The company beat AOP guidance for the quarter, but there was a great deal of uncertainty in the industry. Inflation and supply chain problems were challenging margins of the industry as a whole. This was particularly concerning for VRT, the investment thesis for which was centered on margin expansion. Despite the uncertainties, the company raised guidance for the year. When an analyst questioned the company’s ability to raise prices, CEO Rob Johnson said we have “a good process to drive prices through with our customers on a global scale”. Regarding the $2B backlog, Chief Business Officer Gary Niederpruem stated that “we’re not saying there is nothing we can do there.” “We are taking action there as well.” VRT beat AOP guidance once again in 2Q21 reported on July 28th. The company also raised guidance for the second time. AOP guidance was raised to $595M and free cash flow to $300M for the year. Despite the positive results and increased guidance, on the 2Q conference call, analysts continued to question management on pricing power. On the call, management assured investors that pricing actions would positively impact full-year results contributing $65M to profits. The lawsuit notes that management claimed they were raising full-year AOP guidance to $600M because of “additional pricing action” and “pricing programs” that were “already underway”. The narrative defined by rising profitability and cash flows began to fray only 5 weeks later. On September 9th, VRT announced the acquisition of E&I Engineering for $1.8B, including $1.2B of cash and $600M of stock. Management reduced 2H21 expectations in an update on business conditions as part of the release. Guidance for 3Q21 AOP was lowered -19% to a mid-point of $130, while annual AOP was lowered -10% to $540 from $600M. FCF guidance for the full-year was lowered -31% to $205M from $300M. The stock wavered and declined from the upper $20s to the lower $20s, but swiftly recovered as the 3Q21 reporting date of October 27th approached. The company met lowered guidance for 3Q21. On the conference call, management reiterated that they were making good progress on mitigation inflationary pressures. Analysts noted that the tone of the call was much better than that only 3-weeks earlier. Management stated that 3Q would represent the inflationary peak and re-raised AOP guidance modestly from $540M to $553M. Annual free cash flow guidance which was lowered to $220M from $300M in September was maintained. The stock held well and three days after the call, Platinum sold 21.9M shares at $24.83 for total proceeds of $544M. Management’s narrative completely unwound on February 23, 2022 when the company announced a massive earnings miss, which we show below. The company missed quarterly AOP guidance by 47% and free cash flow by 89%. The conference call was a combination of a seeming mea culpa and acceptance of responsibility for being behind the inflationary curve the entire year, and blame game, pinning the lack of margin in discounts given by sales people. The stock closed at $13.20, down from $20.47 the previous day. Nigel Coe of Wolfe Research, who had queried management on pricing issues frequently and in detail stated “management’s credibility is completely shot” and “in our 17 years of covering industrials we can’t recall a drawdown of this magnitude.” Management Problems and Legal Consequences: Allegations of Fraud CEO Robert Johnson, CFO David Fallon and Chief Marketing Officer Rainer Stiller are all Platinum approved appointments having joined VRT in 2016 and 2017. Additionally, Platinum currently has two board members. The firm’s right to appointments will cease when ownership declines below 10%. Platinum currently owns just over 10%. The Platinum selected management team has been augmented with Mr. Johnson’s family members. Problems associated with the CEO’s family members as managers are a recurrent theme in Glassdoor reviews, as evidenced here and here. The company’s proxy indicates that Mr. Johnson’s brother, Patrick, was hired in 2017 and currently serves as an Executive Vice President of Integrated Rack Solutions. Patrick’s total compensation was ~$1M in 2021 including stock grants, down from $3M in the prior year. Another brother to Rob Johnson, Richard Johnson, was hired in 2018 and currently serves as Director of Global Strategic Clients. Richard’s total compensation was ~$500,00 including grants in 2021, up from $413,000 in 2020. Two of Rob Johnson’s sons work at VRT. Alexander Johnson joined the company as Manager of Channel Accounts CDW in 2018. Alexander received total compensation in 2021 of $320,000 including stock grants, up from $232,000 the prior year. Michael Johnson serves as National Account Manager and received total compensation of $140,000 in 2021. In our view, the concentration of allegiances to insider factions lends itself to the ethical lapses alleged and evidenced in the lawsuit testimony. On October 3, 2022, VRT announced the that Robert Johnson was stepping down from his role as CEO for health reasons. Giordano Albertazzi, President of Americas was appointed CEO. Mr. Albertazzi was formerly President of EMEA. He was likely behind the acquisition of the Irish firm E&I Engineering in 3Q21, which has been a material disappointment, adding $0.02 per share in profit when $0.10 was expected. The Legal Fallout: Testimony Implicating Management In the wake of disastrous 2021, VRT suffered two class action lawsuits, the first of which was voluntarily dismissed in May 2022. It was likely settled. The 2Q22 10-Q cites a legal settlement payment of $8.7M, which we assume to be for the lawsuit. We suspect settlement of the second lawsuit will not be so easy. The complaint alleges that management committed fraud and “made false and materially misleading statements in a scheme to deceive investors” and “artificially inflate the stock price”. The plaintiffs amended the complaint on September 16, 2022. The allegations and testimony details severe mis-governance and grave lapses of ethical behavior. Here is a link to the case. VRT’s 3Q22 10-Q addresses the lawsuit, noting that the plaintiff’s filed an amended suit claiming the company made materially false and/or misleading statements. It states that “while the company believes it has meritorious defenses against the plaintiff’s claims, the company is unable to predict the outcome of this dispute or the amount of any cost associated with the resolution”. We consider this a material disclosure. Most times, companies note that they consider the case ”without merit”. The Public Company Accounting Oversight Board (PCAOB) notes that “without merit” and “meritorious defenses” have specific meanings in the context of accounting documents. “Without merit” means that the likelihood of an unfavorable outcome is remote. The ability to provide “meritorious defenses” merely indicates that counsel believes that the company’s defense will not be summarily dismissed by the court. It does not necessarily indicate counsel’s opinion that the company will prevail. It also implies that the possibility of a negative outcome is not remote. Testimony focuses on several key points that management emphasized throughout the year: Emphasis of the large and growing backlog Continually assuring investors that price actions had been taken and would soon be evident on the P&L Frequent raising of guidance Supply chain issues, while persistent, had been effectively reworked Raw materials inflation, supply chain problems and product pricing were key issues across the industry in 2021. All competitors discussed the problems on quarterly conference calls. VRT management comments were no different in topic, but very different in substance and outcome. The narrative management wove throughout 2021 was that inflationary and supply chain issues were being dealt with effectively through both planning – sophisticated AI-driven order management software – and retroactively by working with customers to pass through price increases. Management clung to the narrative throughout the year, even, as testimony indicates, they knew it was not going to happen. It was an elaborately constructed and well maintained narrative that had little if any basis in reality. Mr. Johnson exemplified the position when he appeared on a DataCenterKnowledge podcast on July 21 and an associated article, a week before the company’s 2Q21 earnings release. In the interview, Johnson touted the company’s “sophistication” on pricing tools. The system could tell sales people “at that price you will lose the order, at this price you are too cheap” The article quoted Johnson as saying “we’re just trying to recover what our costs are – that are going up – so we can take care of our share owners”, continuing, “our customers and partners are pretty good at understanding what’s happening on the market”. The lawsuit shows a different reality. The CPQ or order system was a “disaster” and it was so bad there were “all hands meetings to calm the crowd”. One former sales person noted “CPQ stopped commerce.” Testimony shows that Mr. Johnson’s on-the-record comments, in company conference calls and media appearances were categorically false. The AI, algorithms, sophisticated pricing models – were all non-existent from a practical business standpoint. The large and growing backlog was cited in press releases and on conference calls as evidence of the company’s selling success. It was, in fact, a large backlog of unprofitable business. Sales people were encouraged to target the large orders of hyperscale data center operators, such as Google, Amazon and Microsoft. “It was all slash and burn to get the stock price up as high as you can. That is why they targeted the large customers.” It appears as if the point was to build a large backlog and reap the benefit of the optics, not book profitable business. An employee testified that orders were very competitive with “very strict RFPs with the prices they are paying”. In other words, the hyperscale data centers dictate pricing. In addition to pursuing unprofitable contracts, in order to make the sale VRT gave customers significant discounts despite the inflationary environment. Management is on the record in numerous forums discussing how they were taking “pricing actions around list prices, multipliers and discounts” and “controlling discounts that our own sales people are able to have”. Mr. Johnson said changes were being made to ensure “not just discounting to build backlog”. Yet that is exactly what they did. Numerous former employees testified that management knew and approved of discounts. “the pressure to sell was so great that we had an inability to transfer those price costs to our clients”. With respect to discounting, “Rob Johnson agreed to these deals without price increases. These exceptions were being approved and their recent quarterly miss was all self-inflicted” The result of pursing unprofitable contracts and excessive discounting was a large unprofitable backlog. One former employee testified that the company was saddled with “an off the charts unprofitable” backlog. Management touted the backlog to investors as a point of strength when they knew it was packed with contract terms that “were not good for Vertiv”. Management also claimed that they were increasing pricing on booked orders to account for inflationary pressures. Chief Business Officer, Gary Niederpruem stated “we have other mechanisms…clauses in large contracts”. This was patently false according to testimony. VRT’s contracts had no mechanism to increase pricing. The contracts locked in the discounted prices. One former employee testified “there was no mechanism to increase prices in those contracts, you had to eat it.” All throughout 2021, management talked of the pricing actions they had taken, which would result in margin expansion in future quarters. Management even quantified the pricing actions, providing a slide in quarterly presentations with margin evolution. Former employees testified that management never took any pricing actions: “Vertiv was not raising their prices like everyone else was”. According to another employee: “they were not issuing price increases in 2021.” 2022 and 2023: Continued (Mis)Guidance VRT’s 3Q22 results reported on 10/26 were sub-par despite lowering guidance in earlier in the month. Adjusted operating profit of $134.2M for the quarter was barely above the bottom of the $130M-$150M range. 2022 is the year management was supposed to rebuild the financial and ethical lapses that were exposed in 2021. It what appears to have been an attempt to rebuild trust and credibility on the conference call, numerous members of management noted that the results and discussion were “consistent” with what they have been telling investors from the beginning of the year. The problem is that it has not been consistent and clear lapses associated with guidance, a key issue in 2021, remain. In the table below, we show management’s AOP guidance for 3Q22 throughout the year and the final reported figure. The 4Q22 figures in 2/23 and 4/27 are estimates. Source: Company filings and estimates. As is clear from the chart, guidance for the quarter was steadily reduced throughout the year, converging on the actual reported number of $134M, 33% below managements estimates from earlier in the year. In contrast, reductions in 4Q22 guidance have been much smaller, declining only 10%. 50% of guided AOP for the year is expected in 4Q22. 2023 guidance is not credible Management’s inability to explain how and why the company will increase AOP from ~$460M in 2022 to $740M in 2023 leads us to conclude it is not credible and should be discounted. Management provides quarter to quarter bridges showing the contribution of various factors to explain the changes in profitability. On the 3Q22 conference call, VRT CFO Dave Fallon reconfirmed the 2023 $730-750M AOP guidance up from $450-470M in 2021. However, when an analyst queried as to how that significant gap from $460M to $740M would be bridged, Mr. Fallon said “as it relates to kind of filling in the details, it’s probably too soon. And we’ll provide a more robust bridge from ’22 to ’23 in February”. Let’s put this in context. On October 3, 2022 with the year nearly over, management allegedly did not know that FCF guidance for 2022 needed be cut from $0 to ($125M), though they confidently put out guidance for 60% AOP growth to $740M for 2023. On October 27th, with 1/3rd of the quarter behind, they cut FCF guidance. However, the high-growth 2023 AOP guidance is reaffirmed, but management cannot explain how it will be achieved. We find the incongruity in behavior deeply problematic. Were TS Eliot an equity analyst, he might say it takes a willing suspension of disbelief to take management’s guidance seriously. APPENDIX Vertiv Timeline of Events with Stock Prices Date Action Comment Guidance Stock Price Oct 31, 2022 Files form 10-Qs Implies a negative outcome from the amended lawsuit is not remote; states that the company has ample liquidity for 12-months   $14.31 Oct 27, 2022 Reports 3Q22 financial results Free cash flow forecasts are slashed only 3-weeks after lowering the 2022 outlook, 2023 AOP guidance reaffirmed Slashes annual free cash flow guidance to ($125M) from $0, but reaffirms 2023 Adj. Operating Profit $730-$750 $14.79 Oct 20, 2022 Starboard Value Fund takes a 7.4% position in VRT In a public presentation Starboard said mgmt “lacked a sense of urgency” and “operational focus” in 2021.   $12.37 Oct 3, 2022 CEO Robert Johnson announces his retirement for health reasons Lawsuit not mentioned Mr. Giordano Albertazzi now CEO Lowers guidance end of Q3 and Q4 Much higher 2023 Adj. Operating Profit $730-$750 $11.25 September 20, 2022 Increased but NOT extended ABL facility by $115M to $570M, FILO, Swingline Severe cash problems due to the WC accounts; only $175M left before extension   $12.20 September 16, 2022 Amended class action lawsuit filed alleging fraud Multiple high level employee depositions detailing management’s knowledge of pushing unprofitable business while touting pricing realizations to investors Quite a read $12.33 August 5, 2022 Jason Forcier, COO & EVP Infrastructure and Solutions quits       August 3, 2022 Q2 Report inline Have to burn through low pricing on backlog; we’ll pull the pricing lever Lowers guidance $11.99 June 15, 2022 Pays Platinum $12.5M under Tax receivable agreement Amends schedule to pay them the rest $82.5M by Nov 30, 2022   $9.69 May 5, 2022 Second Lawsuit Filed Class action for violation of securities laws   $12.75 May 2, 2022 / April 27 Q1 Report beats First lawsuit disclosed but not settled till May 13, 4 days before pretrial conference Maintains guidance, despite beat $12.61 March 24, 2022 First Lawsuit filed Class action for violation of security laws   $12.78 March 14, 2022 John Hewitt president Americas Mr. John departing the Company effective immediately to pursue other interests Mr. Giordano Albertazzi as the Company’s President, Americas,   $11.13 March 1, 2022 10K filed     $12.59 February 23, 2022 Q4 2021 Report 85% MISS 0.04 vs 0.28 estimate, AOI -38% $72M vs lower guidance $166M Stock sells off 37% Pricing and supply chain management are problems Analysts “we don’t recall a drawdown of this magnitude in 17 years covering industrials” $19.57 to $12.38 -37% January 28, 2022 Prospectus 23M Shares resale relating to the E&I acquisition     $20.05 November 4, 2021 Secondary sale underwriting agreement for 20M Shares @ 24.83 Sold by Platinum Equity, the PE sponsor to mostly pension funds $544M proceeds $26.95 November 1, 2021 E& I deal closes $1.8B EV including $630M in shares, 90 day lock up   $26.05 October 27, 2021 Q3 Report beats inflation actions will provide a tailwind for full year 2022 Increases guidance on M&A and price AOI from $540 to $553 $24.69 October 22, 2021 $850M Notes @ 4.125%, 2028 To fund the E&I acquisition   $24.07 September 8, 2021 Announced E & I acquisition Updates business conditions; blames supply chain conditions Lowers guidance 10% AOI from $600M to $ 540M $25.99 July 28, 2021 Q2 Report beats Record backlog Increases guidance AOI $590 - $610 $27.61 April 28, 2021 Q1 Report beats Record backlog Increases guidance AOI from $585 to $605 $22.99 March 1, 2021 10K, 144, 424B3 sale of 17.38M shares Platinum Equity Sells 17.4M @ $20.14 for $344M $20.14 February 24, 2021 Q4 Report beats Very strong results, CFO “getting sophisticated with price, using AI” Increases guidance 68% to $565-$585M adj operating profit $20.80 November 13, 2020 Secondary, 18M shares Platinum Equity   $17.99 November 5, 2020 Q3 Report beats   Increases guidance $17.28 October 1, 2020 Scott Cripps, New Chief Accounting Officer EBITDA guidance is replaced with Adj. operating profit   $17.90 August 11, 2020 Secondary, 20M shares Platinum Equity   $16.77 August 5, 2020 Q2 report     $16.90 May 7, 2020 Q1 report beats   Maintains guidance $10.87 March 13, 2020 10K beats   Maintains guidance $8.90 March 3, 2020 Term Loan Negotiated $2.2B Liboer +3% (ABL facility retired) Moody’s upgrades 3 levels to B1 from Caa1, S&P from 1 level to B+   $11.14 February 19, 2020 Andre Klaus resigns as Chief Accounting Officer 3 years with the company   $13.46 February 7, 2020 SPAC transaction closes $1.8B total PIPEs are $1.24M $342M paid to Platinum upon closing; owns 38% $12.88 January 31, 2020 Vertiv announces plans to refinance the ABL term facility       Platinum Equity’s Vertiv Investment Platinum purchased Vertiv for just over $4B in a transaction that included $1.2B of equity and $2.958B of debt. Thus far, Platinum has made an estimated $1.7B from its Vertiv investment and an estimated IRR of 41%, excluding the value of the 37M shares it retains. Financial Models.....»»

Category: blogSource: valuewalkNov 15th, 2022

Google will pay $391.5 million to a settle a lawsuit on accusations of misleading users on its location-tracking practices

The $391.5 million settlement marks an end to a four-year investigation into allegations of misleading data collection practices. Sundar Pichai, the CEO of GoogleBrandon Wade/Reuters Google agreed to pay $391.5 million settle accusations of misleading location tracking practices, reported the New York Times.  The settlement marks the end of a four-year investigation into Google's violation of consumer protection laws. The decision comes after Google announced that it will limit Android's ad-tracking practices. Google will pay $391.5 million to a settle a lawsuit that accused the company of collecting user location data after the search engine allegedly deceived users into thinking their data was no longer collected when they turned off its location-tracking services, the New York Times reported on Monday.The settlement reportedly claimed that Google didn't make it clear that it continued to track location data on services like search, maps and apps that require Wi-Fi connection and cell phone towers to sell targeted ads, highlighting concerns over how big tech companies are using data to surveil users for profit. Google has not admitted wrongdoing as part of the settlement. The agreement was the largest internet privacy settlement among US states, a group of attorneys general involved in the 40-state case told the Times, ending a four-year investigation into the search engine's alleged violation of consumer protection laws across the country. The investigation started after the Associated Press published a story in 2018 on Google's deceptive location-tracking methods, sparking lawsuits in states like Indiana, Texas and Washington state. This decision comes just months after Google announced that will introduce privacy changes to Android's ad tracking practices which the VP of Android product management Anthony Chavez wrote would "limit sharing of user data with third parties and operate without cross-app identifiers," Insider reported. The accusations also comes in the wake of an ongoing debate between Democrats and Republicans on how far federal privacy laws should go to limit businesses like Google from collecting personal user data. Google, in particular, collects user geolocation data and uses it to sell targeted ads which can be beneficial for retailers to sell their products. But even though companies like Google have said that the data collected is anonymized, privacy groups worry that geolocation tracking can reveal the personal identity of users, reported the Times. In October, Google settled a similar $85 million lawsuit with the state of Arizona. In 2019, Google and Youtube were hit with a $170 million settlement after the Federal Trade Commission and the New York Attorney General sued the companies on allegations of illegally collecting data from children on their video watching habits without asking their parents for permission. Google didn't respond to Insider's request for comment ahead of publication. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 14th, 2022

Decisions On Wisconsin Election Integrity Lawsuits Revealed As Election Day Nears

Decisions On Wisconsin Election Integrity Lawsuits Revealed As Election Day Nears Authored by Jeff Louderback via The Epoch Times (emphasis ours), With frequent comments about the topic from gubernatorial and Senate candidates, and multiple legal rulings announced this week, election integrity remains front and center in Wisconsin as the Nov. 8 election day draws closer. Wisconsin Sen. Ron Johnson talks to reporters after a campaign stop in Waukesha, Wisconsin on Oct. 25, 2022. (Jeff Louderback/Epoch Times) Wisconsin Republican gubernatorial candidate Tim Michels drew attention earlier this week when he told a group of supporters at a campaign stop that “Republicans will never lose another election in Wisconsin after I’m elected governor.” American Bridge 21st Century, a left-leaning political action committee, released an audio clip of Michels making that statement, according to Business Insider. Tim Michels and his family greet supporters after winning the August 9 Wisconsin GOP gubernatorial primary. (Courtesy of Tim Michels for Congress) Michels, who is endorsed by former President Donald Trump, is running against incumbent Democratic Gov. Tony Evers. On Twitter, Evers responded to the audio clip by saying, “Tim Michels is a danger to our democracy.” Evers spokesperson Sam Roecker released a statement claiming that “Tim Michels has made it clear he will do anything in his power to make it harder for Wisconsinites to vote and could even overturn the fair results of our elections if he doesn’t like the outcome.” The Michels campaign said that the comment had nothing to do with election integrity and that Michels would generate support for Republican candidates by incorporating “lower taxes, better schools, uniform election laws, and safer communities.” “While revving up supporters to get out and vote, Tim was referring to winning and leading and then being rewarded by voters for doing a good job,” Michels spokesperson Brian Fraley said in a statement. “Any attempt to make more out of that quip shows just how pathetic and desperate Tony Evers and his supporters are getting as we approach election day. They want to talk about anything other than his four years of failure.” Multiple lawsuits have been filed in Wisconsin focused on which absentee ballots can be counted or rejected. As of Oct. 25, more than 503,000 absentee ballots in Wisconsin had been returned or cast in person, according to the Wisconsin Elections Commission (WEC). On Nov. 2, Dane County Circuit Judge Juan Colas denied an organization’s request that local election clerks accept absentee ballots that contain partial addresses of witnesses. In his order, Colas wrote that Wisconsin elections have been conducted and absentee ballots have been counted for 56 years without a legally binding definition of a witness address on a ballot. “Since then, until the present, clerks have been legally free to interpret the term,” Colas said. “They presumably have done so in good faith, in keeping with their oaths of office, and drawing on the non-binding guidance issued by the WEC and its predecessors, and perhaps also on advice from their jurisdictions’ attorneys.” Current guidance from the WEC stipulates that an address is defined as having three components: a street number, street name, and municipality. Rise, Inc., a group with locations in Minnesota and Wisconsin, argued that Wisconsin election clerks are not consistently applying that definition. The organization sought an order that would require an address only to have enough information to determine the location of the witness. Colas ruled it was inappropriate to issue an order that changes the status quo. In another case, the 1st District Court of Appeals on Nov. 1 declined to hear an appeal of Dane County Circuit Judge Nia Trammell’s ruling rejecting a request from the League of Women Voters of Wisconsin that an address can only be missing when the entire field is left blank. The case was not heard because it did not meet the criteria for granting an appeal, according to the appeals court. Similar to what Colas ruled, Trammell said that loosening the witness address requirement “would upend the status quo and not preserve it” and “frustrate the electoral process by causing confusion.” In an unrelated matter, a Wisconsin judge on Nov. 2 granted the Republican National Committee’s request for a temporary injunction ordering Green Bay County Clerk Celestine Jeffreys to not violate state laws that permit the public to watch the election and voting process, including in-person absentee voting. According to the lawsuit, Jeffreys has allegedly been prohibiting members of the public “from observing all aspects of the in-person absentee voting process” that started on Oct. 25 at the city clerk’s office. “In less than 24 hours, the RNC successfully sued and won in Green Bay to ensure the city’s Democrat election officials follow the law on the books in Wisconsin,” RNC chairwoman Ronna McDaniel said in a statement. “Bipartisan poll watching is a constitutional right in Wisconsin, and now the Green Bay Clerk will have to let them in the room to observe.” In July, the Wisconsin Supreme Court banned the use of absentee ballot drop boxes in the state. Only the voter can return a ballot in person, the conservative-led body determined. A federal judge later ruled that voters with disabilities are allowed to obtain third-party assistance for mailing ballots or delivering them to a clerk. Last week, the Wisconsin 2nd District Court of Appeals decided not to hear an appeal of a Waukesha County circuit court judge’s ruling on Oct. 5 that prohibits voters who already cast a ballot from voiding it and voting again. The decision applies to voters who cast absentee ballots and vote early at precincts. The practice, which is known as ballot spoiling, had been permitted for numerous election cycles in the state. On Oct. 5, Waukesha County Circuit Judge Brad Schimel ruled that Wisconsin voters can’t cancel their ballot and cast a new one once a vote has been cast. Schimel granted a request for a temporary injunction against the practice, which was encouraged by the WEC at offices throughout the state. Wisconsin voter Nancy Kormanik sued the WEC over its guidance that states that clerks can give completed and submitted absentee ballots to voters. Doing so violates a Wisconsin law that states that the clerk “shall not return the ballot to the elector” once submitted, according to the lawsuit. The guidance was issued after multiple candidates dropped out of high-profile races, including Democratic candidates for the U.S. Senate. A Republican and former Wisconsin attorney general, Schimel sided with Kormanik and ordered an injunction effective Oct. 7. At an emergency meeting last week, the WEC unanimously voted to rescind their previous guidance and no longer allow ballot spoiling. Wisconsin Democratic U.S. Senate candidate Mandela Barnes casts his ballot in Milwaukee on Oct. 25, 2022. (Jeff Louderback/Epoch Times) As Wisconsin voters head to the polls in the final days of early voting—and on Election Day—election integrity is a concern for many residents. A Sept. 22 poll from Marquette University Law School in Wisconsin illustrates the division over the topic between the two parties. Among likely voters surveyed, 86 percent of Democrats and 12 percent of Republicans are “very confident” that votes in Wisconsin were accurately cast and counted in the 2020 presidential election. Those figures include independent voters who lean Democratic or Republican. The poll also revealed that 62 percent of Republicans weren’t too confident or weren’t confident at all in the results of the 2020 presidential election in the state while 6 percent of Democrats feel that way. When early voting started in Wisconsin on Oct. 25, Democratic U.S. Senate candidate Mandela Barnes cast his ballot at a community center in Milwaukee. After leaving the precinct, he stood outside with supporters on a rain-soaked morning and talked about the importance of heading to the polls. “One of the reasons I decided to come out here and vote early is to make sure that people have trust and faith in the process,” Barnes said. “You know, we’re gonna make sure all the ballots are counted. Make sure that this is a safe and secure process. “I trust the process. I voted early in at least three of the last five elections,” Barnes added. “I know people like to show up on Election Day. It’s sort of ritualistic in many ways. But sometimes we have obligations—things come up—and so it’s good for folks to get out there get it done early, and then use the additional time to encourage other people to vote to win.” Johnson encouraged early voting at a campaign stop in Waukesha the same day that Barnes cast his vote in Milwaukee. During a town hall last week, he told supporters, “I would recommend early voting if you have a Republican election clerk. I’m not sure I would recommend a Republican go vote in Milwaukee. I don’t know about the bipartisan observation of those early votes. It might be possible.” The comments were light-hearted humor, a Johnson spokesperson said. “Obviously the senator meant that as a tongue-in-cheek comment,” Alexa Henning said. “The senator was just in Waukesha Tuesday where he encouraged early voting. We are confident we have Republican observers and poll workers in place. Wisconsinites should turn out and vote everywhere, including Milwaukee.” Tyler Durden Sun, 11/06/2022 - 12:30.....»»

Category: blogSource: zerohedgeNov 6th, 2022

Can A Republican Become California’s Top Cop?

Can A Republican Become California’s Top Cop? Authored by Susan Crabtree via RealClear Wire, In an attack ad blasting California Attorney General Rob Bonta, a woman named Rachel describes her deep frustration over the five-month probation sentence for the juvenile driver who slammed into her and her 8-month-old child in Los Angeles last year. The disturbing incident was caught on tape and quickly went viral on social media, cited by countless critics as yet more evidence of a spike in brazen and violent crime across the state. Rachel, a Democrat, says she will vote for Nathan Hochman, the GOP candidate for attorney general. Even though she and Bonta share other political beliefs, she said the Democratic attorney general isn't doing enough to stop the surge in violent crime across the state. She's particularly angry that Bonta has declined to take over her case from embattled Los Angeles District Attorney George Gascón. “The kid tried to murder me and my child, and the state couldn’t have cared less, and they proved that by only giving him five months of probation,” she says. “California Attorney General Rob Bonta has the ability to step in and take over from district attorneys like George Gascón, but Bonta chooses not to. It’s about voting for the right candidate, and the right candidate is Nathan Hochman.” The ad is part of a soft-on-crime barrage Republicans are deploying across the country to skewer Democrats’ public safety records. Too many Democratic officials have pushed liberal policies that emboldened criminals, critics argue. Top policy targets include cashless bail, early release for tens of thousands of prisoners, and reduced punishment for many convicted of theft and other nonviolent offenses. Over the last three months, worries about rising crime have helped power New York Rep. Lee Zeldin to within striking distance of incumbent Gov. Kathy Hochul. And growing anxiety over public safety ranks among the top three to five issues in many urban areas across the country. In California, rising violent crime has been a flash-point all year, before and after San Francisco District Attorney Chesa Boudin, who was accused of coddling criminals and neglecting rampant drug use on city streets, was recalled in early June. In Los Angeles, critics of Gascón, who is known as the “godfather of progressive prosecutors” and preceded Boudin as San Francisco DA, claimed to have collected 715,000 signatures to launch a recall of him. County officials, however, invalidated 200,000 of the signatures, preventing a recall but prompting an ongoing legal fight. A Harvard/Harris poll released Oct. 14 found that 68% of respondents considered crime to be “very important” and are more likely to vote Republican than Democratic in the upcoming midterm election because of that concern. Earlier this year, two-thirds of registered voters in California said crime had risen in their neighborhoods, according to a UC Berkeley Institute of Governmental Studies poll co-sponsored by the Los Angeles Times. Just more than half of voters surveyed said California Gov. Gavin Newsom was doing a poor job on crime and public safety, up 16 percentage points from 2020. Hochman, a federal prosecutor with 30 years of experience, is running to replace Bonta, a former state assemblyman for Oakland who previously served as the deputy city attorney for San Francisco. Newsom appointed Bonta to replace Xavier Becerra when he stepped down to become President Biden’s secretary of Health and Human Services.  Hochman says he’s running because Bonta has failed to intervene in counties where crime has risen sharply, and policies he’s championed, including cashless bail, have placed the interests of criminals above victims. Bonta has countered that he’s “strong, effective, and smart on crime” and can make the criminal justice system fairer without compromising public safety. Over the last week, Hochman has been touring the state on a bus emblazoned with his promise to “stop the spiral of lawlessness.” Along the way, he's touted his endorsements from across the political spectrum – from Death Row Records founder Michael “Harry-O” Harris and Hollywood A-lister Gwyneth Paltrow to former Republican Gov. Arnold Schwarzenegger and Democratic Los Angeles Sheriff Alex Villanueva. Two dozen district attorneys from across the state and Female Business Leaders, a Democratic-leaning group in Los Angeles have also endorsed him. In late September, Hochman received the backing of the San Diego Union-Tribune, which said both candidates are strong, but Hochman has a “better plan for responding to growing crime.” In numerous interviews and a recent ad, Hochman has hammered Bonta as “missing in action” when it comes to the state’s fentanyl crisis. Fentanyl is responsible for 5,722 California deaths in 2021, including 224 between the ages of 15 and 19, according to the California Department of Public Health. In mid-October, Bonta appeared to respond, arguing that the state is “all-in when it comes to protecting California families from the dangers of fentanyl” and issuing an update to the state Department of Justice’s work to address the crisis.   Both MSNBC and Fox News in recent days have dubbed the race one of the most competitive in the country. RealClearPolitics talked to Hochman about his chances on Election Day and the current political mood in California. Here are excerpts from that interview: Q: The district of attorney recall efforts in several cities, including San Francisco, shows that many California voters, including Democrats and independents, are looking for new leadership. Still, no Republican has won statewide in California since 2006. How can you overcome that big hurdle? Hochman: I would classify myself as a moderate Republican and [someone] who has the best chance in a generation to win this office. Here's why: The first is a change in conditions on the ground. 2014 was considered one of California's safest years in the last 30. [This year] public safety has risen to a top-three issue in polling for the first time in a generation. When people are afraid to send themselves, their kids, their parents out at night in their neighborhoods … when you have what I’ve described as a ‘spiral of lawlessness’ that starts with one or two people going into a small business and stealing just under $950 and not being prosecuted because it's now a misdemeanor and the prosecutors aren’t doing their jobs … and that turns into three people running out of Walgreens and people running out of Nordstroms in smash-and-grab robberies, home robberies, train robberies and a double-digit rise in homicides … That's a wake-up call for not just Republicans, but Democrats and independents. I believe California voters are going to look to the one statewide position that's identified with safety and security, and that's the attorney general position. The kind of conditions on the ground are ripe for change – people are crying out for change. The Boudin recall and the issues that arose there show that a Republican can win. Chesa Boudin was recalled 55% to 45%. Republicans make up only 8% of the vote in the city of San Francisco, and roughly three-quarters of the votes to recall Boudin came from Democrats and independents. Secondly, in the last 20 years, you had Jerry Brown, Kamala Harris, and Javier Becerra serving as attorney general. Those are fairly unbeatable candidates with great statewide name recognition and some level of law enforcement background. They were also presiding over a time when safety and security was much more under control. Rob Bonta was appointed by Gov. Newsom, and shockingly, he had zero law enforcement experience before he took the job. Gavin Newsom appointed an Oakland assemblymember –basically a politician – to be your chief law enforcement officer, someone who's never argued a criminal case or conducted a criminal investigation, dealt with victims or [handled] criminal sentencing and dealt with judges. He is absolutely inexperienced and unqualified to hold that position. Coupled with that, he also has brought along a criminal justice agenda that I believe is too far to the left. I believe it's very pro-criminal. Q: But aren’t the laws that California voters approved a few years ago the problem, and your job would be enforcing them? Proposition 47 was passed by voters. It reclassified felony drug and theft offenses as misdemeanors and raised from $400 to $950 the amount for which theft can be prosecuted as a felony. Two years later, voters approved another proposition that allowed prisoners to be released earlier. Hochman: They call [the attorney general] the top cop in the state for good reason, because under the California constitution, the chief law enforcement officer has the power to go into any one of the 58 counties and take over any case, if you believe it's not being properly prosecuted. It's an enormous power that’s somewhat unique to California, and I wouldn’t hesitate to use it. [Bonta’s] opened up the middle ground. That’s where I exist. In contrast to his zero years of criminal-justice experience, I was a judge's clerk. I was then an assistant U.S. attorney, a federal prosecutor for seven years in Los Angeles where I went after narcotics traffickers, gang members, international money launderers, tax evaders, public corruption cases, dirty sheriffs. I ran the environmental crimes unit. Then [I served as] assistant attorney general running the U.S. Department of Justice's tax division. We had 350 lawyers and a $100 million budget to go after tax cheats across country. I've also been a defense attorney. Thirty years of experience gives me the perspective to figure out the true public safety threats to our society – who should and shouldn’t be in jail. It requires an individualized analysis of three things: the level of crime that’s committed, the defendant’s criminal history, which is often overlooked, as well as the impact on the victim. Q: What specifically can a state attorney general do to stop fentanyl overdoses? Fentanyl is coming across the border, and most Republicans argue it’s a border security issue that the Biden administration needs to fix. Hochman: The fact that Rob Bonta since he took over the position has not been a central figure, front-and-center, leading the task force to go after all the fentanyl dealers that are bringing millions of counterfeit tablets in, spiking marijuana, cocaine and other drugs with fentanyl, is a dereliction of duty. We’re talking about people who are poisoning Californians. It would be like if there were a sniper killing 17 people a day in San Francisco or Los Angeles with a high-powered rifle, and it’s not front-page news in California. As attorney general, you have the power to educate. You can hold press conferences, you can go into high-school communities … you can do your own PR campaign in connection with all the other state and federal government agencies. By leading an enforcement and an education effort, you could really make a difference. You could save lives tomorrow. Q: After the Supreme Court reversed Roe v. Wade earlier this summer, Newsom pledged to make California an abortion sanctuary state and signed several new laws strengthening abortion access. What is your position on abortion, and how would you carry out these news laws? Hochman: I am pro-choice and will fully enforce all the laws on the books in protecting a woman’s reproductive rights. Full stop. Q: What do you think of Brooke Jenkins, the interim district attorney appointed following the recall of Chesa Boudin – her effort so far to reverse Boudin’s record? She has decided to try some juveniles who committed heinous crimes as adults and has overturned some of Boudin’s plea deals. Hochman: Anyone from any part of the political spectrum that has safety and security as one of their top goals, and actually enacts policies to do that – I think that’s great. Safety and security and justice should not be political issues. If Jenkins is reversing policies and doing her best to bring safety and security back to San Francisco, I applaud that. Tyler Durden Mon, 10/31/2022 - 22:25.....»»

Category: blogSource: zerohedgeOct 31st, 2022

Spooky Torts: The 2022 List Of Litigation Horrors

Spooky Torts: The 2022 List Of Litigation Horrors Authored by Jonathan Turley, Here is my annual list of Halloween torts and crimes. Halloween of course remains a holiday seemingly designed for personal injury lawyers around the world and this year’s additions show why. Halloween has everything for a torts-filled holiday: battery, trespass, defamation, nuisance, product liability and more. Particularly with the recent tragedy in South Korea, our annual listing is not intended to belittle the serious losses that can occur on this and other holidays. However, my students and I often discuss the remarkably wide range of torts that comes with All Hallow’s Eve. So, with no further ado, here is this year’s updated list of actual cases related to Halloween. In October 2021, Danielle Thomas, former exotic dancer known as “Pole Assassin” (and the girlfriend of Texas special teams coach Jeff Banks), found herself embroiled in a Halloween tort after the monkey previously used in her act bit a wandering child at the house of horror she created for Halloween. Thomas considers the monkey Gia to be her “emotional support animal.” Thomas goes all out for the holiday and converted her home into a house of horrors, including a maze. She said that the area with Gia was closed off and, as for petting, “no one is allowed to touch her!”  She publicly insisted “No one was viciously attack this a lie, a whole lie! She was not apart of any haunted house, the kid did not have permission to be on the other side of my property!” She even posted a walk-through video of the scene to show the steps that a child would have to take to get to the monkey. Don’t worry folks I got the #MonkeyGate video — Christian Sykes (@ctsykes13) November 2, 2021 She insists in the video that she knows all of the governing legal rules and shows the path in detail. It is not helpful on the defense side: it is not a long path and easy to see how a child might get lost. She later deleted her account (likely after her attorney regained consciousness). The case raises an array of torts including animal liability, licensee liability, negligence, and attractive nuisance claims. In 2022, we often added conversion to the usual torts where multiple versions of the new giant skeleton were stolen, including one particularly ham-handed effort in Austin, Texas caught on video tape: * * * In Berea, Ohio, the promoters of the 7 Floors of Hell haunted house at the Cuyahoga County Fairgrounds appreciate realism but one employee took it a bit too far. An actor brandished this real bowie knife as a prop while pretending to stab an 11-year-old boy’s foot. He then stabbed him. The accident occurred when the actor, 22, approached the boy and stabbed at the ground as a scare tactic. He got too close and accidentally cut through the child’s shoe, piercing a toe. The injury was not serious since the boy was treated at the scene and continued through the haunted house. The case raises an interesting question of “respondeat superior” for the negligent acts by employees in the course of employment. The question is what is in the scope of employment.  The question is often whether an employee was on a “detour” or “frolic.”  A detour can be outside of an employer’s policies or guidelines but will be the basis for liability as sufficiently related to the employment.  A frolic is a more serious deviation where the employee is acting in his own capacity or for his own interests. In this case, the actor was clearly within his scope of employment in trying to scare the visitors. However, he admitted that he bought the knife in his personal capacity and agreed it “was not a good idea” to use it at the haunted house, according to FOX 8. That still does not negate the negligence — both direct and vicarious liability. There was a failure to monitor employees and safeguard the scene. His negligence is also likely attributable to the employer. Finally, this would constitute battery as a reckless, though unintended, act. * * * In 2020, parents in Indiana were given a warning in a Facebook post that the Indiana State Police seized holiday edibles featuring packaging that resembles that of actual name brands — but with the word “medicated” printed on the wrapper along with cannabis symbols. The packaging makes it easy for homeowners to confuse packages and give out drugged candy.  Indeed, last year, two children were given THC-infused gummies while trick-or-treating, according to police in Waterford, Conn.. Such candies include the main active ingredient linked to the psychedelic effects of cannabis – the plant from which marijuana is derived. Even an accidental distribution of such infused candies would constitute child endangerment and be subject to both negligence and strict liability actions in torts. * * * I previously have written how the fear of razor blades in apples appears an urban legend. Well, give it enough time and someone will prove you wrong. That is the allegation of Waterbury, Connecticut police who say that Jason A. Racz, 37, put razor blades in candy bags of at least two trick-or-treaters. Racz’ razor defense may not be particularly convincing to the average juror. According to police, “Racz explained that the razor blades were accidentally spilled or put into the candy bowl he used to hand out candy from.” However, police noted that he “provided no explanation as to how the razor blades were handed out to the children along with the candy.” The charge was brought soon after Halloween in 2019. Racz is now charged with risk of injury to a minor, reckless endangerment and interfering with a police officer. He could also be charged with battery and intentional infliction of emotional distress, but it is not clear if any children were injured. *  *  * Steven Novak, an artist from Dallas, Texas, believes that Halloween should be a bit more than a traditional plastic pumpkin and a smiling ghost.  Police were called to his home in Texas over a possible murder. They found a dummy impaled on a chainsaw with fake blood; another dummy hanging from his roof; a wheelbarrow full of fake dismembered body parts and other gory scenes.  Neighbors called the display too traumatizing.  Police responded by taking pictures for their families. A tort action for intentional infliction of emotional distress is likely to fail. There must be not just outrageous conduct but conduct intended to cause severe emotional distress. Courts regularly exclude injuries associated with the exercise of free speech or artistic expression . . . even when accompanied by buckets of fake blood. *  *  * The Dorney Park and Wildwater Kingdom in Pennsylvania tells customers that, if they come to their Halloween Haunt, “Fear is waiting for you.” In 2019, a new case was filed by Shannon Sacco and her daughter over injuries sustained from “unreasonable scaring.” They are seeking $150,000. The Allentown Morning Call reported that “M.S.” went with friends to the amusement park and was immediately approached by costumed characters. She said that she told them that she did not want to be scared and backed away. A little further on into the park however a costumed employee allegedly ran up behind her and shouted loudly. The startled girl fell forward and suffered what were serious but unspecified injuries. She alleges ongoing medical issues and inability to return to fully functioning activities. The lawsuit also alleges that the park failed to inform Sacco or her daughter that they could buy a glow-in-the-dark “No Boo” necklace to ward off costumed employees. The obvious issue beyond the alleged negligence of the Park is the plaintiffs’ own conduct. Pennsylvania is a comparative negligence state so contributory negligence by the plaintiffs would not be a bar to recovery. See Pennsylvania General Assembly Statute §7102. However, it is a modified comparative negligence state so they must show that they are 50 percent or less at fault. If they are found 51 percent at fault, they are barred entirely from recovery. Even if they can recover, their damages are reduced by the percentage of their own fault in going to a park during a Halloween-themed event. *  *  * In 2019, there is a rare public petition to shutdown a haunted house that has been declared to be a “torture chamber.” The move to “shut down McKamey Manor” that has been signed by thousands who believe Russ McKamey, the owner of McKamey Manor, has made his house so scary that it constitutes torture, including an allegation of waterboarding of visitors. The haunted house requires participants to get a doctor’s note and sign a 40-page waiver before they enter. People are seeking the closure of the houses located in Summertown, Tennessee and Huntsville, Alabama. McKamey insists that it is just a “crazy haunted house” and stops well short of the legal-definition of torture. The question is whether consent vitiates any extreme frights or contacts. He is also clear in both the waiver and the website that the house is an “extreme haunted attraction” for legal adults who “must be in GREAT HEALTH to participate.” Not only do people enter with full knowledge but there is no charge. McKamey owns five dogs and only requires a bag of dog food for entry. Presumably the food is cursed. *  *  * An earlier case was recently made public from an accident on October 15, 2011 in San Diego. Scott Griffin and friends went to the Haunted Trail in San Diego. The ticket warns of “high-impact scares” along a mile path with actors brandishing weapons and scary items. Griffen, 44, and his friends went on the trail and were going out of what they thought was an exit. Suddenly an actor jumped out as part of what the attraction called “the Carrie effect” of a last minute scare. While Griffen said that he tried to back away, the actor followed him with a running chain saw. He fell backwards and injured his wrists. The 2013 lawsuit against the Haunted Hotel, Inc., in the Superior Court of California, County of San Diego, alleged negligence and assault. However, Superior Court Judge Katherine Bacal granted a motion to dismiss based on assumption of the risk. She noted that Griffin “was still within the scare experience that he purchased.” After all, “Who would want to go to a haunted house that is not scary?” Griffen then appealed and the attorney for the Haunted Hotel quoted Hunter S. Thompson: “Buy the ticket, take the ride.” Again, the court agreed. In upholding the lower court, Justice Gilbert Nares wrote, “Being chased within the physical confines of the Haunted Trail by a chain saw–carrying maniac is a fundamental part and inherent risk of this amusement. Griffin voluntarily paid money to experience it.” *  *  * In 2018, a case emerged in Madison, Tennessee from the Nashville Nightmare Haunted House.   James “Jay” Yochim and three of his pals went to the attraction composed of  four separate haunted houses, an escape room, carnival games and food vendors.  In the attraction, people are chased by characters with chainsaws and other weapons.  They were not surprised therefore when a man believed to be an employee in a Halloween costume handed Tawnya Greenfield a knife and told her to stab Yochim.  She did and thought it was all pretend until blood started to pour from Yochim’s arm. The knife was real and the man was heard apologizing “I didn’t know my knife was that sharp.” It is not clear how even stabbing with a dull knife would be considered safe. The attraction issued a statement: “As we have continued to review the information, we believe that an employee was involved in some way, and he has been placed on leave until we can determine his involvement. We are going over all of our safety protocols with all of our staff again, as the safety and security of all of our patrons is always our main concern. We have not been contacted by the police, but we will cooperate fully with any official investigation.” The next scary moment is likely to be in the form of a torts complaint.  Negligence against the company under respondeat superior is an obvious start. There is also a novel battery charge where he could claim that he was stabbed by trickery or deceit of a third person. There are also premises liability issues for invitees.  As for Greenfield, she claims to have lacked consent due to a misrepresentation.  She could be charged with negligence or a recklessness-based theory of battery, though that seems less likely.  Finally, there is an interesting possible claim of negligent infliction of emotional distress in being tricked or misled into stabbing an individual. *  *  * Last year, a 21-year-old man surnamed Cheung was killed by a moving coffin in a haunted house in Hong Kong’s Ocean Park.   The attraction is called “Buried Alive” and involves hopping into coffins for a downward slide into a dark and scary space. The ride promises to provide people with the “experience of being buried alive alone, before fighting their way out of their dark and eerie grave.” Cheung took a wrong turn and went backstage — only to be hit by one of the metal coffins.  The hit in the head killed Cheung who was found later in the haunted house. While there is no word of a tort lawsuit (and tort actions are rarer in Hong Kong), the case is typical of Halloween torts involving haunted houses.  The decor often emphasizes spooky and dark environs which both encourage terror and torts among the participants.  In this case, an obvious claim could be made that it is negligence to allow such easy access to the operational area of the coffin ride — particularly in a dark space.  As a business invitee, Cheung would have a strong case in the United States. *  *  * A previous addition to the Spooky torts was the odd case of Assistant Prosecutor Chris White. White clearly does not like spiders, even fake ones. That much was clear given his response to finding fake spiders scattered around the West Virginia office for Halloween. White pulled a gun and threatened to shoot the fake spiders, explaining that he is “deathly afraid of spiders.” It appears that his arachnophobia (fear of spiders) was not matched by a hoplophobia (fear of firearms). The other employees were reportedly shaken up and Logan County Prosecuting Attorney John Bennett later suspended White. Bennett said “He said they had spiders everyplace and he said he told them it wasn’t funny, and he couldn’t stand them, and he did indeed get a gun out. It had no clip in it, of course they wouldn’t know that, I wouldn’t either if I looked at it, to tell you the truth.” It is not clear how White thought threatening the decorative spiders would keep them at bay or whether he was trying to deter those who sought to deck out the office in a Halloween theme. He was not charged by his colleagues with a crime but was suspended for his conduct. This is not our first interaction with White. He was the prosecutor in the controversial (and in my view groundless) prosecution of Jared Marcum, who was arrested after wearing a NRA tee shirt to school. *  *  * Another new case from the last year involves a murder. Donnie Cochenour Jr., 27, got a seasonal break (at least temporarily) on detecting his alleged murder of Rebecca J. Cade, 31. Cade’s body was left hanging on a fence and was mistaken by neighbors as a Halloween decoration. The “decoration” was found by a man walking his dog and reported by construction workers. A large rock was found with blood on it nearby. Donnie Cochenour Jr., 27, was later arrested and ordered held on $2 million bond after he pleaded not guilty to murder. Cade apparently had known Cochenour since he was a child — a relationship going back 20 years. Cochenour reportedly admitted that they had a physical altercation in the field. Police found a blood trail that indicates that Cade was running from Cochenour and tried to climb the fence in an attempt to get away. She was found hanging from her sleeve and is believed to have died on the fence from blunt force trauma to the head and neck. Her body exhibited “defensive wounds.” When police arrested Cochenour, they found blood on is clothing. *  *  * In 2015, federal and state governments were cracking down on cosmetic contact lenses to give people spooky eyes. Owners and operators of 10 Southern California businesses were criminally charged in federal court with illegally selling cosmetic contact lenses without prescriptions. Some of the products that were purchased in connection with this investigation were contaminated with dangerous pathogens that can cause eye injury, blindness and loss of the eye. The products are likely to result in a slew of product liability actions. *  *  * Another 2015 case reflects that the scariest part of shopping for Halloween costumes or decorations may be the trip to the Party Store. Shanisha L. Saulsberry sued U.S. Toy Company, Inc. after she was injured shopping for Halloween costumes and a store rack fell on her. The jury awarded Saulsberry $7,216.00 for economic damages. She appealed the damages after evidence of her injuries were kept out of the trial by the court. However, the Missouri appellate court affirmed the ruling. *  *  * The case of Castiglione v. James F. Q., 115 A.D.3d 696, shows a classic Halloween tort. The lawsuit alleged that, on Halloween 2007, the defendant’s son threw an egg which hit the plaintiff’s daughter in the eye, causing her injuries. The plaintiff also brought criminal charges against the defendant’s son arising from this incident and the defendant’s son pleaded guilty to assault in the third degree (Penal Law § 120.00 [2]). However, at his deposition, the defendant’s son denied throwing the egg which allegedly struck the plaintiff’s daughter. Because of the age of the accused, the case turned on the youthful offender statute (CPL art 720) that provides special measures for persons found to be youthful offenders which provides “Except where specifically required or permitted by statute or upon specific authorization of the court, all official records and papers, whether on file with the court, a police agency or the division of criminal justice services, relating to a case involving a youth who has been adjudicated a youthful offender, are confidential and may not be made available to any person or public or private agency [with certain exceptions not relevant here]” (CPL 720.35 [2]). This covers both the physical documents constituting the official record and the information contained within those documents. Thus, in relation to the Halloween egging, the boy was protected from having to disclose information or answer questions regarding the facts underlying the adjudication *  *  * We discussed the perils of pranks and “jump frights,” particularly with people who do not necessarily consent. In the case of Christian Faith Benge, there appears to have been consent in visiting a haunted house. The sophomore from New Miami High School in Ohio died from a prior medical condition at the at Land of Illusion haunted house. She was halfway through the house with about 100 friends and family members when she collapsed. She had an enlarged heart four times its normal size. She also was born with congenital diaphragmatic hernia, which prevents the lungs from developing normally. This added stress to the heart. In such a case, consent and comparative negligence issues effectively bar recovery in most cases. It is a terrible loss of a wonderful young lady. However, some fatalities do not always come with liability and this appears such a case. Source: Journal News *  *  * As discussed earlier, In Franklin County, Tennessee, children may want to avoid the house of Dale Bryant Farris, 65, this Halloween . . . or houses near him. Bryant was arrested after shooting a 15-year-old boy who was with kids toilet-papering their principal’s front yard. Bryant came out of his house a couple of houses down from the home of Principal Ken Bishop and allegedly fired at least two blasts — one hitting a 15-year-old boy in the right foot, inner left knee, right palm, right thigh and right side of his torso above the waistline. Tennessee is a Castle Doctrine state and we have seen past cases like the notorious Tom Horn case in Texas where homeowners claimed the right to shoot intruders on the property of their neighbors. It is not clear if Bryant will argue that he was trying to stop intruders under the law, but it does not appear a good fit with the purpose or language of the law. Farris faces a charge of aggravated assault and another of reckless endangerment. He could also face civil liability from the boy’s family. This would include assault and battery. There is a privilege of both self-defense and defense of others. This privilege included reasonable mistaken self-defense or defense of others. This would not fit such a claim since he effectively pursued the boys by going to a neighbor’s property and there was no appearance of a threat or weapon since they were only armed with toilet paper. The good news is that Farris can now discard the need for a costume. He can go as himself at Halloween . . . as soon as he is out of jail. *  *  * As shown below, Halloween nooses have a bad record at parties. In 2012, a club called Pink Punters had a decorative noose that it had used for a number of years that allowed party goers to take pictures as a hanging victim on Halloween. Of course, you guessed it. A 25-year old man was found hanging from the noose in an accidental self-lynching at the nightclub in England. The case would appear easy to defend in light of the assumption of the risk and patent danger. The noose did not actually tighten around necks. Moreover, this is England where tort claims can be more challenging. In the United States, however, there would remain the question of a foreseeable accident in light of the fact that patrons are drinking heavily and drugs are often present at nightclubs. Since patrons are known to put their heads in the noose, the combination is intoxication and a noose is not a particularly good mix. *  *  * Grant v. Grant. A potential criminal and tort case comes to us from Pennsylvania where, at a family Halloween bonfire, Janet Grant spotted a skunk and told her son Thomas Grant to fetch a shotgun and shoot it. When he returned, Janet Grant shined a flashlight on the animal while her son shot it. It was only then that they discovered that Thomas Grant had just shot his eight-year-old cousin in her black and white Halloween costume. What is amazing is that authorities say that they are considering possible animal gaming charges. Fortunately, the little girl survived with a wound to the shoulder and abdomen. The police in Beaver County have not brought charges and alcohol does not appear to have been a factor. Putting aside the family connection (which presumably makes the likelihood of a lawsuit unlikely), there is a basis for both battery and negligence in such a wounding. With children in the area, the discharge of the firearm would seem pretty unreasonable even with the effort to illuminate “the animal.” Moreover, this would have to have been a pretty large skunk to be the size of an eight-year-old child. Just for the record, the average weight of a standard spotted skunk in that area is a little over 1 pound. The biggest skunk is a hog-nosed skunk that can reach up to 18 pounds. *  *  * We also have a potential duel case out of Aiken, South Carolina from one year ago. A 10-year-old Aiken trick-or-treater pulled a gun on a woman who joked that she wanted take his candy on Halloween. Police found that his brother, also ten, had his own weapon. The 28-year-old woman said that she merely joked with a group of 10 or so kids that she wanted their candy when the ten-year-old pulled out a 9 mm handgun and said “no you’re not.” While the magazine was not in the gun, he had a fully loaded magazine in his possession. His brother had the second gun. Both appear to have belonged to their grandfather. The children were released to their parents and surprisingly there is no mention of charges against the grandfather. While the guns appear to have been taken without his permission, it shows great negligence in the handling and storage of the guns. What would be interesting is a torts lawsuit by the woman for assault against the grandfather. The actions of third parties often cut off liability as a matter of proximate causation, though courts have held that you can be liable for creating circumstances where crimes or intentional torts are foreseeable. For example, a landlord was held liable in for crimes committed in his building in Kline v. 1500 Massachusetts Avenue. Here the grandfather’s negligence led to the use of the guns by these children. While a lawsuit is unlikely, it would certainly be an interesting — and not unwarranted — claim. *  *  * Tauton High School District The Massachusetts case of Smith v. Taunton High School involves a Halloween prank gone bad. A teacher at Taunton High School asked a 15-year-old student to answer a knock on the classroom door. The boy was startled when he came face to face with a man in a mask and carrying what appeared to be a running chainsaw. The student fell back, tripped and fractured a kneecap. His family is now suing though the state cap on such lawsuits is $100,000. Dussault said the family is preparing a lawsuit, but is exploring ways to avoid a trial and do better than the $100,000 cap when suing city employees. This could make for an interesting case, but would be better for the Plaintiffs as a bench versus a jury trial. Many jurors are likely to view this as simply an attempt at good fun by the teacher and an unforeseeable accident. Source: CBS *  *  * In Florida, a woman has sued for defamation, harassment and emotional distress after her neighbor set up decorations that included an insane asylum sign that pointed to her yard and a fake tombstone with an inscription she viewed as a reference to her single status. It read, “At 48 she had no mate no date/ It’s no debate she looks 88.” This could be a wonderful example of an opinion defense to defamation. As for emotional distress, I think the cause of the distress pre-dates Halloween. *  *  * Pieczonka v. Great America (2012) A family is suing Great America for a tort in 2011 at Great Falls. Father Marian Pieczonka alleged in his complaint that his young daughter Natalie was at the park in Gurnee, Illinois for the Halloween-themed Fright Fest when a park employee dressed in costume jumped out of a port-a-potty and shot her with a squirt gun. He then reported chased the screaming girl until she fell and suffered injuries involving scrapes and bruises. The lawsuit alleges negligence in encouraging employees to chase patrons given the tripping hazards. They are asking $30,000 in the one count complaint but could face assumption or comparative negligence questions, particularly in knowingly attending an event called “Fright Fest” where employees were known to jump out at patrons. *  *  * A lawsuit appears inevitable after a tragic accident in St. Louis where a 17-year-old girl is in a critical condition after she became tangled in a noose at a Halloween haunted house called Creepyworld. The girl was working as an actress at the attraction and was found unconscious. What is particularly chilling is that people appeared to have walked by her hanging in the house and thought she was a realistic prop. Notably, the attraction had people walk through to check on the well-being of actors and she was discovered but not for some time after the accident. She is in critical condition. Creepyworld employs 100 people and can expect a negligence lawsuit. *  *  * Rabindranath v. Wallace (2010) Peter Wallace, 24, was returning on a train with fellow Hiberinian soccer fans in England — many dressed in costumes (which the English call “fancy dress.”) One man was dressed as a sheep and Wallace thought it was funny to constantly flick his lighter near the cotton balls covering his body — until he burst into flames. Friends then made the matter worse by trying to douse the flames but throwing alcohol on the flaming man-sheep. Even worse, the victim Arjuna Rabindranath, 24, is an Aberdeen soccer fan. Rabindranath’s costume was composed of a white tracksuit and cotton wool. Outcome: Wallace is the heir to a large farm estate and agreed to pay damages to the victim, who experienced extensive burns. What is fascinating is the causation issue. Here, Wallace clearly caused the initial injury which was then made worse by the world’s most dim-witted rescue attempt in the use of alcohol to douse a fire. In the United States, the original tortfeasor is liable for such injuries caused by negligent rescues. Indeed, he is liable for injured rescuers. The rescuers can also be sued in most states. However, many areas of Europe have good Samaritan laws protecting such rescuers. Notably, Wallace had a previous football-related conviction which was dealt with by a fine. In this latest case, he agreed to pay 25,000 in compensation. The case is obviously similar to one of our prior Halloween winners below: Ferlito v. Johnson & Johnson *  *  * Perper v. Forum Novelties (2010) Sherri Perper, 56, of Queens, New York has filed a personal injury lawsuit due to defective shoes allegedly acquired from Forum Novelties. The shoes were over-sized clown shoes that she was wearing as part of her Halloween costume in 2008. She tripped and fell. She is reportedly claiming that the shoes were dangerous. While “open and obvious” is no longer an absolute defense in such products cases, such arguments may still be made to counter claims of defective products. In most jurisdictions, you must show that the product is more dangerous than the expectations of the ordinary consumer. It is hard to see how Perper could be surprised that it is a bit difficult to walk in over-sized shoes. Then there is the problem of assumption of the risk. *  *  * Dickson v. Hustonville Haunted House and Greg Walker (2009) Glenda Dickson, 51, broke four vertebrae in her back when she fell out of a second story window left open at the Hustonville Haunted House, owned by Greg Walker. Dickson was in a room called “The Crying Lady in the Bed” when one of the actors came up behind the group and started screaming. Everyone jumped in fright and Dickson jumped back through an open window that was covered with a sheet — a remarkably negligent act by the haunted house operator. She landed on a fire escape and then fell down some stairs. *  *  * Maryland v. Janik (2009) Sgt. Eric Janik, 37, went to a haunted house called the House of Screams with friends and when confronted by a character dressed as Leatherface with a chainsaw (sans the chain, of course), Janik pulled out his service weapon and pointed it at the man, who immediately dropped character, dropped the chainsaw, and ran like a bat out of Halloween Hell. Outcome: Janik is charged with assault and reckless endangerment for his actions. Charges pending. *  *  * Patrick v. South Carolina (2009) Quentin Patrick, 22, an ex-convict in Sumter, South Carolina shot and killed a trick-or-treater T.J. Darrisaw who came to his home on Halloween — spraying nearly 30 rounds with an assault rifle from inside his home after hearing a knock on the door. T.J.’s 9-year- old brother, Ahmadre Darrisaw, and their father, Freddie Grinnell, were injured but were released after being treated at a hospital. Patrick left his porch light on — a general signal for kids that the house was open for trick and treating. The boy’s mother and toddler sibling were in the car. Patrick emptied the AK-47 — shooting at least 29 times through his front door, walls and windows after hearing the knock. He said that he had been previously robbed. That may be so, but it is unclear what an ex-con was doing with a gun, let alone an AK-47. OUTCOME: Charges pending for murder. *  *  * Kentucky v. Watkins (2008) As a Halloween prank, restaurant manager Joe Watkins of the Chicken Ranch in Paris, Kentucky thought it was funny to lie in a pool of blood on the floor. After seeing Watkins on the floor, the woman went screaming from the restaurant to report the murder. Watkins said that the prank was for another employee and that he tried to call the woman back on her cell phone. OUTCOME: Under Kentucky law, a person can be charged with a false police report, even if he is not the one who filed it. The police charged Watkins for causing the woman to file the report — a highly questionable charge. *  *  * Mays v. Gretna Athletic Boosters␣95-717 (La.App. 5 Cir. 01/17/96) “Defendant operated a haunted house at Mel Ott Playground in Gretna to raise money for athletic programs. The haunted house was constructed of 2×4s and black visqueen. There were numerous cubbyholes where “scary” exhibits were displayed. One booster club member was stationed at the entrance and one at the exit. Approximately eighteen people participated in the haunted house by working the exhibits inside. Near and along the entrance of the haunted house was a bathroom building constructed of cinder blocks. Black visqueen covered this wall. Plaintiff and her daughter’s friend, about 10 years old, entered the haunted house on October 29, 1988. It was nighttime and was dark inside. Plaintiff testified someone jumped out and hollered, scaring the child into running. Plaintiff was also frightened and began to run. She ran directly into the visqueen-covered cinder block wall. There was no lighting in that part of the haunted house. Plaintiff hit the wall face first and began bleeding profusely from her nose. She testified two surgeries were required to repair her nose.” OUTCOME: In order to get the proper effect, haunted houses are dark and contain scary and/or shocking exhibits. Patrons in a Halloween haunted house are expected to be surprised, startled and scared by the exhibits but the operator does not have a duty to guard against patrons reacting in bizarre, frightened and unpredictable ways. Operators are duty bound to protect patrons only from unreasonably dangerous conditions, not from every conceivable danger. As found by the Trial Court, defendant met this duty by constructing the haunted house with rooms of adequate size and providing adequate personnel and supervision for patrons entering the house. Defendant’s duty did not extend to protecting plaintiff from running in a dark room into a wall. Our review of the entire record herein does not reveal manifest error committed by the Trial Court or that the Trial Court’s decision was clearly wrong. Plaintiff has not shown the haunted house was unreasonably dangerous or that defendant’s actions were unreasonable. Thus, the Trial Court judgment must be affirmed. *  *  * Powell v. Jacor Communications␣ UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT 320 F.3d 599 (6th Cir.2003) “On October 15, 1999, Powell visited a Halloween season haunted house in Lexington, Kentucky that was owned and operated by Jacor. She was allegedly hit in the head with an unidentified object by a person she claims was dressed as a ghost. Powell was knocked unconscious and injured. She contends that she suffered a concussion and was put on bed rest and given medications by emergency-room physicians. Powell further claims that she now suffers from several neuropsychological disorders as a result of the incident.” OUTCOME: Reversed dismissal on the basis of tolling of statute of limitations. *  *  * Kansas City Light & Power Company v. Trimble␣ 315 Mo. 32; 285 S.W. 455 (1926) Excerpt: “A shapely pole to which, twenty-two feet from the ground is attached a non-insulated electric wire . . Upon a shapely pole were standard steps eighteen inches apart; about seventeen feet from the ground were telephone wires, and five feet above them was a non-insulated electric light wire. On Halloween, about nine o’clock, a bright fourteen-year-old boy and two companions met close to the pole, and some girls dressed as clowns came down the street. As they came near the boy, saying, “Who dares me to walk the wire?” began climbing the pole, using the steps, and ascended to the telephone cables, and thereupon his companions warned him about the live wire and told him to come down. He crawled upon the telephone cables to a distance of about ten feet from the pole, and when he reached that point a companion again warned him of the live wire over his head, and threatened to throw a rock at him and knock him off if he did not come down. Whereupon he turned about and crawled back to the pole, and there raised himself to a standing position, and then his foot slipped, and involuntarily he threw up his arm, his hand clutched the live wire, and he was shocked to death.” OUTCOME: Frankly, I am not sure why the pole was so “shapely” but the result was disappointing for the plaintiffs. Kansas City Light & Power Company v. Trimble: The court held that the appellate court extended the attractive nuisance doctrine beyond the court’s ruling decisions. The court held that appellate court’s opinion on the contributory negligence doctrine conflicted with the court’s ruling decisions. The court held that the administrator’s case should never have been submitted to the jury. The court quashed the appellate opinion. “To my mind it is inconceivable that a bright, intelligent boy, doing well in school, past fourteen years of age and living in the city, would not understand and appreciate the fact that it would be dangerous to come in contact with an electric wire, and that he was undertaking a dangerous feat in climbing up the pole; but even if it may be said that men might differ on that proposition, still in this case he was warned of the wire and of the danger on account of the wire and that, too, before he had reached a situation where there was any occasion or necessity of clutching the wire to avoid a fall. Not only was he twice warned but he was repeatedly told and urged to come down.” *  *  * Purtell v. Mason␣ 2006 U.S. Dist. LEXIS 49064 (E.D. Ill. 2006) “The Purtells filed the present lawsuit against Defendant Village of Bloomingdale Police Officer Bruce Mason after he requested that they remove certain Halloween tombstone “decorations” from their property. Evidence presented at trial revealed that the Purtells placed the tombstones referring to their neighbors in their front yard facing the street. The tombstones specifically referred to their neighbors, who saw the language on the tombstones. For instance, the tombstone that referred to the Purtells’ neighbor James Garbarz stated: Here Lies Jimmy, The OlDe Towne IdioT MeAn As sin even withouT his Gin No LonGer Does He wear That sTupiD Old Grin . . . Oh no, noT where they’ve sent Him! The tombstone referring to the Purtells’ neighbor Betty Garbarz read: BeTTe wAsN’T ReADy, BuT here she Lies Ever since that night she DieD. 12 feet Deep in this trench . . . Still wasn’T Deep enough For that wenches Stench! In addition, the Purtells placed a Halloween tombstone in their yard concerning their neighbor Diane Lesner stating: Dyean was Known for Lying So She was fried. Now underneath these daises is where she goes crazy!! Moreover, the jury heard testimony that Diane Lesner, James Garbarz, and Betty Garbarz were upset because their names appeared on the tombstones. Betty Garbarz testified that she was so upset by the language on the tombstones that she contacted the Village of Bloomingdale Police Department. She further testified that she never had any doubt that the “Bette” tombstone referred to her. After seeing the tombstones, she stated that she was ashamed and humiliated, but did not talk to Jeffrey Purtell about them because she was afraid of him. Defense counsel also presented evidence that the neighbors thought the language on the tombstones constituted threats and that they were alarmed and disturbed by their names being on the tombstones. James Garbarz testified that he interpreted the “Jimmy” tombstone as a threat and told the police that he felt threatened by the tombstone. He also testified that he had concerns about his safety and what Jeffrey Purtell might do to him.” OUTCOME: The court denied the homeowners’ post-trial motion for judgment as a matter of law pursuant to and motion for a new trial. Viewing the evidence and all reasonable inferences in a light most favorable to Officer Mason, a rational jury could conclude that the language on the tombstones constituted threats, that the neighbors were afraid of Jeffrey Purtell, and that they feared for their safety. As such the Court will not disturb the jury’s conclusion that the tombstones constituted fighting words — “those which by their very utterance inflict injury or tend to incite an immediate breach of the peace.” *  *  * Goodwin v. Walmart 2001 Ark. App. LEXIS 78 “On October 12, 1993, Randall Goodwin went to a Wal-Mart store located on 6th Street in Fayetteville, Arkansas. He entered through the front door and walked toward the sporting goods department. In route, he turned down an aisle known as the seasonal aisle. At that time, it was stocked with items for Halloween. This aisle could be observed from the cash registers. Mr. Goodwin took only a few steps down the aisle when he allegedly stepped on a wig and fell, landing on his right hip. As a result of the fall, Mr. Goodwin suffered severe physical injury to his back, including a ruptured disk. Kelly Evans, an employee for appellee, was standing at the end of her check-out stand when Mr. Goodwin approached her and informed her that he had fallen on an item in the seasonal aisle. She stated that she “saw what he was talking about.” OUTCOME: Judgment affirmed because the pleadings, depositions, and related summary judgment evidence did not show that there was any genuine issue of material fact as appellant customer did not establish a plastic bag containing the Halloween wig which allegedly caused him to slip and fall was on the floor as the result of appellee’s negligence or it had been on the floor for such a period of time that appellee knew or should have known about it. *  *  * Eversole v. Wasson␣ 80 Ill. App. 3d 94 (Ill. 1980) Excerpt: “The following allegations of count I, directed against defendant Wasson, were incorporated in count II against the school district: (1) plaintiff was a student at Villa Grove High School which was controlled and administered by the defendant school district, (2) defendant Wasson was employed by the school district as a teacher at the high school, (3) on November 1, 1978, at approximately 12:30 p.m., Wasson was at the high school in his regular capacity as a teacher and plaintiff was attending a regularly scheduled class, (4) Wasson sought and received permission from another teacher to take plaintiff from that teacher’s class and talk to him in the hallway, (5) once in the hallway, Wasson accused plaintiff of being one of several students he believed had smashed Wasson’s Halloween pumpkin at Wasson’s home, (6) without provocation from plaintiff, Wasson berated plaintiff, called him vile names, and threatened him with physical violence while shaking his fist in plaintiff’s face which placed plaintiff in fear of bodily injury, (7) Wasson then struck plaintiff about the head and face with both an open hand and a closed fist and shook and shoved him violently, (8) as a result, plaintiff was bruised about the head, neck, and shoulders; experienced pain and suffering in his head, body, and limbs; and became emotionally distraught causing his school performance and participation to be adversely affected . . .” OUTCOME: The court affirmed that portion of the lower court’s order that dismissed the count against the school district and reversed that portion of the lower court’s order that entered a judgment in bar of action as to this count. The court remanded the case to the lower court with directions to allow the student to replead his count against the school district. *  *  * Holman v. Illinois 47 Ill. Ct. Cl. 372 (1995) “The Claimant was attending a Halloween party at the Illinois State Museum with her grandson on October 26, 1990. The party had been advertised locally in the newspaper and through flier advertisements. The advertisement requested that children be accompanied by an adult, to come in costume and to bring a flashlight. The museum had set up different display rooms to hand out candy to the children and give the appearance of a “haunted house.” The Claimant entered the Discovery Room with her grandson. Under normal conditions the room is arranged with tables and low-seated benches for children to use in the museum’s regular displays. These tables and benches had been moved into the upper-right-hand corner of the Discovery Room next to the wall. In the middle of the room, there was a “slime pot” display where the children received the Halloween treat. The overhead fluorescent lights were turned off; however, the track lights on the left side of the room were turned on and dim. The track lights on the right side of the room near the tables and benches were not lit. The room was dark enough that the children’s flashlights could be clearly seen. There were approximately 40-50 people in the room at the time of the accident. The Claimant entered the room with her grandson. They proceeded in the direction of the pot in the middle of the room to see what was going in the pot. Her grandson then ran around the pot to the right corner toward the wall. As the Claimant followed, she tripped over the corner of a bench stored in that section of the room. She fell, making contact with the left corner of the bench. She experienced great pain in her upper left arm. The staff helped her to her feet. Her father was called and she went to the emergency room. Claimant has testified that she did not see the low-seating bench because it was so dimly lit in the Discovery Room. The Claimant was treated at the emergency room, where she was diagnosed with a fracture of the proximal humeral head of her left arm as a result of the fall. Claimant returned home, but was unable to work for 12 to 13 weeks.” OUTCOME: “The Claimant has met her burden of proof. She has shown by a preponderance of the evidence that the State acted negligently in placing furnishings in a dimly-lit room where visitors could not know of their location. The State did not exercise its duty of reasonable care. For the foregoing reasons, the Claimant is granted an award of $20,000.” *  *  * Ferlito v. Johnson & Johnson 771 F. Supp. 196 “Plaintiffs Susan and Frank Ferlito, husband and wife, attended a Halloween party in 1984 dressed as Mary (Mrs. Ferlito) and her little lamb (Mr. Ferlito). Mrs. Ferlito had constructed a lamb costume for her husband by gluing cotton batting manufactured by defendant Johnson & Johnson Products (“JJP”) to a suit of long underwear. She had also used defendant’s product to fashion a headpiece, complete with ears. The costume covered Mr. Ferlito from his head to his ankles, except for his face and hands, which were blackened with Halloween paint. At the party Mr. Ferlito attempted to light his cigarette by using a butane lighter. The flame passed close to his left arm, and the cotton batting on his left sleeve ignited. Plaintiffs sued defendant for injuries they suffered from burns which covered approximately one-third of Mr. Ferlito’s body.” OUTCOME: Ferlito v. Johnson & Johnson: Plaintiffs repeatedly stated in their response brief that plaintiff Susan Ferlito testified that “she would never again use cotton batting to make a costume.” Plaintiffs’ Answer to Defendant JJP’s Motion for J.N.O.V., pp. 1, 3, 4, 5. However, a review of the trial transcript reveals that plaintiff Susan Ferlito never testified that she would never again use cotton batting to make a costume. More importantly, the transcript contains no statement by plaintiff Susan Ferlito that a flammability warning on defendant JJP’s product would have dissuaded her from using the cotton batting to construct the costume in the first place. At oral argument counsel for plaintiffs conceded that there was no testimony during the trial that either plaintiff Susan Ferlito or her husband, plaintiff Frank J. Ferlito, would  have acted any different if there had been a flammability warning on the product’s package. The absence of such testimony is fatal to plaintiffs’ case; for without it, plaintiffs have failed to prove proximate cause, one of the essential elements of their negligence claim. In addition, both plaintiffs testified that they knew that cotton batting burns when it is exposed to flame. Susan Ferlito testified that she knew at the time she purchased the cotton batting that it would burn if exposed to an open flame. Frank Ferlito testified that he knew at the time he appeared at the Halloween party that cotton batting would burn if exposed to an open flame. His additional testimony that he would not have intentionally put a flame to the cotton batting shows that he recognized the risk of injury of which he claims JJP should have warned. Because both plaintiffs were already aware of the danger, a warning by JJP would have been superfluous. Therefore, a reasonable jury could not have found that JJP’s failure to provide a warning was a proximate cause of plaintiffs’ injuries. The evidence in this case clearly demonstrated that neither the use to which plaintiffs put JJP’s product nor the injuries arising from that use were foreseeable. But in Trivino v. Jamesway Corporation, the following result: The mother purchased cosmetic puffs and pajamas from the retailer. The mother glued the puffs onto the pajamas to create a costume for her child. While wearing the costume, the child leaned over the electric stove. The costume caught on fire, injuring the child. Plaintiffs brought a personal injury action against the retailer. The retailer filed a third party complaint against the manufacturer of the puffs, and the puff manufacturer filed a fourth party complaint against the manufacturer of the fibers used in the puffs. The retailer filed a motion for partial summary judgment as to plaintiffs’ cause of action for failure to warn. The trial court granted the motion and dismissed the actions against the manufacturers. On appeal, the court modified the judgment, holding that the mother’s use of the puffs was not unforeseeable as a matter of law and was a question for the jury. The court held that because the puffs were not made of cotton, as thought by the mother, there were fact issues as to the puffs’ flammability and defendants’ duty to warn. The court held that there was no prejudice to the retailer in permitting plaintiffs to amend their bill of particulars. OUTCOME: The court modified the trial court’s judgment to grant plaintiffs’ motion to amend their bill of particulars, deny the retailer’s motion for summary judgment, and reinstate the third party actions against the manufacturers. Tyler Durden Mon, 10/31/2022 - 19:05.....»»

Category: blogSource: zerohedgeOct 31st, 2022

"Woke" Businesses, Meet The New Republican Congress

'Woke' Businesses, Meet The New Republican Congress Authored by Ron Bonjean & Steve Rochlin via RealClear Wire, In a nation bitterly divided between political partisans, corporations face fraught choices. The staying power of the new “woke” will likely face its greatest test if Republicans, as expected, capture a majority in the House of Representatives after the November elections. For example, CPAC’s Matt Schlapp recently sent a letter to House Republicans warning that his organization won’t endorse any candidate for a leadership race unless they vow to reject meetings with “woke” corporations. “Pledge you will not meet with these CEOs or their leadership teams, especially their Government Affairs staff, who have been hostile to policies that help all Americans, until they change their ways.”  Companies increasingly find themselves caught between two intractable forces: a majority of their customers, fueled by social media activism, who expect them to take a stand on issues that are important to them, and a growing backlash from conservatives who say consumer products have no business dictating social and environmental policy.  Just look at J.P. Morgan CEO Jamie Dimon’s notable pivot at a hearing on Capitol Hill when he said his bank would not refrain from making new investments in major oil and gas development projects, telling House Democratic members, “Absolutely not, and that would be the road to hell for America.” The shift is a harbinger of broader political expectations: an emboldened Republican majority with more populists in its ranks itching to take on companies for a variety of perceived transgressions, including statements and policies that are seen as nods to political correctness, as well as “socially responsible” and environmental investment policies. One only has to look at the recent past. When Major League Baseball moved the 2021 All-Star Game from Atlanta to protest Georgia’s voter law, a handful of Republican lawmakers moved to strip the league of its antitrust protections. Governor Ron DeSantis signed a law to abolish Disney World’s self-governing district. He signed another law dubbed the “Stop WOKE Act” to restrict how race is discussed in schools, colleges, and workplaces. Additionally, 19 Republican state attorneys general are calling on BlackRock to justify its ESG policies. With risks jumping out from every corner, what’s a conscientious brand leader to do? With decades of experience supporting business decisions and communications related to social impact, we can point to a few answers. Our research with Penn State University found that 76% of voters feel that companies should be held accountable for making a positive impact on the communities in which they operate – with the sentiment shared almost equally among Democrats and Republicans. Yet only 37% of companies think they are doing a good job and, what’s worse, the gap between voters’ preferences and political rhetoric seems to be growing.  There’s no one-size-fits-all approach for businesses and other brands to turn the ship. The C-suite must identify social risks that may require a response because of their impact on employees, customers, or other key stakeholders – and this requires a self-assessment  Specifically, self-assessments to understand a company’s unique position in the marketplace from not only the product perspective but also a reputational one are critical. Paired with an analysis of internal and external stakeholders, as well as a review of the relationship between business lines and relevant external issues, this kind of audit prepares companies to build a framework for response that is cross-functional, aligned to priorities, and authentic. Finally, companies should be prepared to pressure-test their system for responding to external issues to ensure they have considered all potential landmines.  These recommendations may seem easier said than done, but for those companies seeking a measured approach that allows them to both act on their values and maintain key relationships with policymakers, avoiding the preparation for a Republican Congress now all but ensures crisis down the road. By assessing the connection between business and brand values and creating structure around their decision-making frameworks, modern brand leaders, too, can emerge from the very different challenges of today with renewed bonds with policymakers, customers, and their communities. Tyler Durden Tue, 10/25/2022 - 18:45.....»»

Category: smallbizSource: nytOct 25th, 2022

Nike lifts Covid mandate, igniting harsh criticism from employees on both sides of the vaccine debate

Current employees worry about workplace exposure and former employees question why they lost their jobs over a policy that no longer exists. Nike's world headquartersCourtesy Nike Nike last week said employees no longer need to be vaccinated against Covid-19. Nike's Covid mandate was well supported by employees, according to an internal survey.  As companies rescind mandates, some have been challenged in court.  Nike's decision to drop its Covid-vaccine mandate has some current and former employees up in arms.The reversal, first reported by The Oregonian, is being criticized by employees who supported the original mandate as well as those who lost their jobs just months ago for failing to comply. "It feels clear to me that Nike doesn't value their disabled workforce and doesn't care to take responsibility for creating an inclusive work environment," said a current employee who is worried about workplace exposure.In an internal email explaining the decision, Joe Marsico, Nike's vice president of resilience and chief security officer, said, "At this stage in the pandemic, the CDC and other public health authorities have acknowledged that community spread is possible even when people are fully vaccinated." "When our vaccination policy was implemented, vaccination was critical in preventing community spread," he added. Nike employees were overwhelmingly in favor of the vaccine mandate. About 78% of Nike workers who responded to a late 2021 company survey said they were "proud" of Nike's position on vaccines. The mandate reversal comes as companies balance the needs of various employees with a "new normal" where  Americans learn to live with Covid. Nike still "strongly" encourages employees to get vaccinated, according to Marisco's email. More companies, including archrival Adidas, are also starting to ease mandates. Nike did not respond to requests for comment on this story. Employees interviewed chose to remain anonymous for fear of retribution or not being allowed to speak with the media. Their identities are known to Insider. 'Not sure where this leaves those of us who were fired only months ago'It's unclear how many people Nike terminated for not complying with its vaccine mandate. While some employees were given exemptions by Nike for religious and other reasons, others are upset about being fired over a policy that no longer exists. "Having been denied accommodation and ultimately terminated due to the vaccine mandate, it's disappointing to see they abruptly rescinded their mandate now after letting good and loyal employees like me go without any severance or insurance support," said a former employee who worked at Nike more than 15 years. "In the end, I'm not sure where this leaves those of us who were fired only months ago due to a mandate that is now fully reversed."Some US corporations are being sued over vaccine mandates. A group called the Health Freedom Defense Fund is suing Disney over its vaccine mandate, which like Nike's, required vaccination as a condition of employment. Nike has already been challenged in Oregon state court by a remote worker who was terminated and denied unemployment benefits for not complying with the policy. In August, an administrative law judge ruled in favor of the former employee. The judge overturned a decision by the Oregon Employment Department after Nike didn't send a representative to a hearing."For them to rescind the mandate was great," said another former employee who was terminated earlier this year. "But they're not acknowledging they did anything wrong. No apologies. No nothing. No severance. That letter doesn't even acknowledge the people they've hurt."Companies have the broad authority to mandate vaccines in their workplace, according to Dorit Rubinstein Reiss, a UC Hastings law professor, and vaccine policy expert. Legal challenges to date over Covid-vaccine mandates haven't been widely successful. "Very few of the lawsuits went anywhere," she said in an email to Insider. "And I expect this to continue: I expect courts to continue to support business general authority in requiring vaccines, but they may — as they have in the past — allow lawsuits for bad faith (or legal errors) in relation to religious accommodation or accommodations for people with disabilities." Do you work at Nike or have insight to share? Contact reporter Matthew Kish via the encrypted messaging app Signal (+1-971-319-3830) or email ( Check out Insider's source guide for other tips on sharing information securely.Read the original article on Business Insider.....»»

Category: worldSource: nytOct 24th, 2022

The US never banned asbestos. These workers are paying the price.

As other countries outlawed asbestos, workers in a New York plant were "swimming" in it. Now, in a fight against the chemical industry, the United States may finally ban the potent carcinogen. But help may come too late. A Hornblower Niagara Cruises catamaran sails back to its Canadian dock as passengers in blue ponchos line up at the American dock in Niagara Falls, New York, to board the Maid of the Mist, on May 15, 2014.Carolyn Thompson/AP At OxyChem's now-closed plant in Niagara Falls, New York, former workers told ProPublica that asbestos dust hung in the air and rolled across the floor in clumps, like tumbleweeds. Inhaled asbestos fibers can get trapped deep in the lungs. This can lead to inflammation and scarring and can result in chronic coughing, chest pain and a lung disease called asbestosis. The Environmental Protection Agency tried to ban asbestos in the 1980s. But the US crumpled in the face of pressure from OxyChem and its peers in the chlorine industry.   Now, in a fight against the chemical industry, the US may finally ban the potent carcinogen. But help may come too late. Co-published with NPR NewsProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.Henry Saenz remembers when he first learned what even the tiniest bit of asbestos could do to his body. He was working at a chemical plant where employees used the mineral to make chlorine, and his coworkers warned him about what could happen each time he took a breath: Tiny fibers, invisible to the eye, could enter his nose and mouth and settle into his lungs, his abdomen, the lining of his heart. They could linger there for decades. Then, one day, he might develop asbestosis, a chronic disease that makes the lungs harden, or mesothelioma, a vicious cancer that ends the lives of most who have it within a few years.By then, in the early 1990s, the dangers of asbestos were already irrefutable. The United States had prohibited its use in pipe insulation and branded it so risky that remediators had to wear hazmat suits to remove it. But unlike dozens of other countries that banned the potent carcinogen outright, the United States never did. To this day, the U.S. allows hundreds of tons of asbestos to flow in each year from Brazil, primarily for the benefit of two major chemical companies, OxyChem and Olin Corp. The companies say asbestos is integral to chlorine production at several aging plants and have made a compelling argument to keep it legal: Unlike in the horrific tales of the past, their current protocols for handling asbestos are so stringent that workers face little threat of exposure.But at OxyChem's plant in Niagara Falls, New York, where Saenz worked for nearly three decades, the reality was far different, more than a dozen former workers told ProPublica. There, they said, asbestos dust hung in the air, collected on the beams and light fixtures and built up until it was inches thick. Workers tramped in and out of it all day, often without protective suits or masks, and carried it around on their coveralls and boots. They implored the plant's managers to address the conditions, they said, but the dangers remained until the plant closed in late 2021 for unrelated reasons.It was hard for Saenz to reconcile the science that he understood — and that he believed OxyChem and government leaders understood — with what he saw at the plant every day. He did his best not to inhale the asbestos, but after a short time, he came to believe there was no way the killer substance was not already inside him, waiting, perhaps 30 or 40 or even 50 years, to strike.Now, too late for Saenz, the Environmental Protection Agency appears poised to finally outlaw asbestos in a test case with huge implications. If the agency fails to ban a substance so widely established as harmful, scientists and public health experts argue, it would raise serious doubts about the EPA's ability to protect the public from any toxic chemicals.To fight the proposed ban, the chemical companies have returned to a well-worn strategy and marshaled political heavyweights, including the attorneys general of 12 Republican-led states who say it would place a "heavy and unreasonable burden" on industry.Lost in the battle is the story of what happened in the decades during which the U.S. failed to act. It's not just a tale of workers in hardscrabble company towns who were sacrificed to the bottom line of industry, but one of federal agencies cowed again and again by the well-financed lawyers and lobbyists of the companies they are supposed to oversee.It's the quintessential story of American chemical regulation.The headquarters of Occidental Petroleum, which owns OxyChem, in Los Angeles, California, on January 29, 2010.Reed Saxon/APFor decades, the EPA and Congress accepted the chlorine companies' argument that asbestos workers were safe enough, and regulators left the carcinogen on the list of dangerous chemicals that other countries ban but the U.S. still allows. The Occupational Safety and Health Administration even let OxyChem and Olin into a special program that limited the frequency of inspections at many of their plants. Along the way, the two companies proved that they didn't need asbestos to make chlorine: They built some modern facilities elsewhere that didn't use it. But they balked at the cost of upgrading the older facilities where it was still in use — even as they earned billions of dollars from chemical sales and raked in record profits this year.OxyChem, owned by one of the country's largest energy companies, Occidental Petroleum, declined requests for an interview. After ProPublica sent a summary of its reporting, company officials said the accounts from the Niagara Falls plant were "inaccurate" but declined to say what specifically was incorrect. In a statement, the company said it complies with federal regulations on asbestos and that workers who handle it are "trained, work in restricted areas of our plant, protected by personal protective equipment and are offered annual medical examinations." The company also said it authorizes employees to stop work if they feel unsafe. "The health and safety of every plant worker and the people in our surrounding communities is our top priority," the company said.Olin did not respond to calls and emails sent over the course of a month.It has been easy to minimize the toll asbestos takes on workers. Workers' compensation cases are often confidential, and employees may fear speaking out and jeopardizing their livelihood. ProPublica reporters, however, found a unique opportunity to explore what it was really like to work at an asbestos-reliant plant after America's longest-standing facility, the one run by OxyChem in Niagara Falls, shuttered last November. With their jobs no longer on the line, Saenz and 17 other former workers, some with institutional knowledge dating back to the 1960s and others with memories less than a year old, said they felt free to talk. They agreed to hours of interviews and dug through their homes for documentation to reconstruct their work lives in the decades they spent at the plant.What they recounted — ever-present asbestos dust with scant protection — stunned six experts in industrial hygiene and occupational health who were consulted by ProPublica."Totally unacceptable," said Rachael Jones, professor and chair of the Environmental Health Sciences Department at the University of California, Los Angeles."Fraught with danger," said Dr. Philip Landrigan, a public health physician trained in occupational medicine and epidemiology who leads Boston College's program for Global Public Health and the Common Good."It sounds like something that maybe would happen in the 1940s or the 1950s," said Celeste Monforton, a lecturer in public health at Texas State University who studies occupational health and safety practices."It's just so counter to everything that they put in the record about using [asbestos] safely," Monforton said.For more than a century, OxyChem's plant on the Niagara River, just 3 miles upstream from the world-renowned falls, was a small city unto itself. It buzzed with workers day and night, and, in its heyday, had its own cafeteria, credit union and health clinic. A job there carried a certain cachet. Workers could make six figures, even without college degrees. But the plant had a dark legacy. Its previous owner, Hooker Chemical, had buried toxic waste in an unfinished aqueduct called Love Canal, then turned the property over to the city for development in the 1950s. After contaminated groundwater sickened the people who lived there, it became known as one of the worst environmental disasters in U.S. history.A fence and a sign cordon off a contaminated toxic waste dump site in the Love Canal neighborhood of Niagara Falls, New York, on August 2, 1978. The crisis led to federal Superfund legislation to clean up the nation's abandoned waste sites.APUnlike many of the other workers who grew up in the shadow of the plant, following their fathers and uncles into jobs there, Saenz was originally from Northern California. But he fell in love with a woman from Niagara Falls and moved there to start a family with her, working at a hotel, delivering flowers and tending bar — anything to put food on the table, he said — before deciding OxyChem was the job he wanted to stay in.He was hired in 1989 and soon after got a crash course in chemistry. A jolt of electricity, he learned, could turn a tank of salt water into three substances: chlorine, caustic soda and hydrogen. The chlorine could be sold for disinfecting water, the caustic soda for making paper, soap and aspirin. There was, however, a real danger: If the chemicals mixed, the tank could turn into a bomb. So each tank had a thick, metal screen inside to keep the chemicals apart.The screen was coated with a layer of impenetrable asbestos. OxyChem used chrysotile, or white asbestos, the most common type. It showed up on trains in oversized bags that looked like pillows stuffed with down feathers. At OxyChem, there were about 200 tanks, called cells, each the size of a dining room table and containing a metal screen. When a screen needed to be recoated, a special team of workers removed it and brought it to the cavernous cell-maintenance building. There, they blasted it with a high-pressure water cannon until the old asbestos fell off. Then, they dipped the clean screen into a wet mixture containing new asbestos and cooked it in an oven until the asbestos hardened. They worked on one or two screens each day.The asbestos job was one of the most hazardous at the plant, requiring special training. But it also provided a rare benefit. Unlike most positions, which forced workers to take afternoon and midnight shifts, the asbestos job was days only. Saenz, who initially worked in a different department, waited years for an opening on the team, eager to spend more time with his growing family. After his fourth child was born, a spot opened up.The team was a small fraternity of eight or so men who ate lunch together in a special trailer. Some days, when their shift ended at 2 p.m., they would meet at JD's, a dive bar near the plant. Other days, it was the wing joint down the street or the bar in Terry Cheetham's basement. Cheetham was the big brother of the group; the guys called him Soupie. Reserved and shaggy-haired, garrulous only with a beer in hand, he'd dropped out of high school after his father's death and gone to work for OxyChem. He wanted to help his mom support their family. Soon after Saenz joined the team, Cheetham tapped him on the shoulder. "We're going for a ride after work," he said. Later, they pulled up outside the local liquor store. As the new guy, Saenz had to carry the keg.The guys raised their kids together, helped each other's families through difficult times. At the plant, they always had each other's backs. Certain hazards, like fires, were hard to miss. Others, like chlorine leaks, were more subtle. Then, there was the asbestos. As Saenz spent more time on the job, he began noticing just how much of it surrounded him.Federal workplace safety standards require keeping asbestos fibers wet to prevent them from going airborne, having workers wear protective equipment and containing the asbestos inside certain areas. OxyChem had rules in place to meet those standards. But protocols failed to match reality at the Niagara Falls plant, according to more than a dozen workers.Water-blasting the screens was like washing a car with a high-powered hose. Asbestos splattered everywhere. It wasn't a problem when the asbestos was wet. But it would dry overnight, and the next morning, it would be stuck to the ceiling and the walls. Clumps would roll across the floor like tiny tumbleweeds. Floating particles would catch the light when the sun poured in. There was so much asbestos in the cell-maintenance building that it was impossible to keep it all wet, said Robert Cheff, who worked at the plant from 1981 to 2007. "We were constantly swimming in this stuff."Hand-specimen of asbestiform serpentine ore, also known as chrysotile, one of six minerals currently regulated as asbestos.asbestorama/Getty imagesWorkers wore protective gear for certain tasks, like pressure washing and screen dipping. But they went into the building to carry out other tasks without special suits or anything protecting their faces, despite company requirements. One worker said managers enforced those rules. But a dozen others interviewed by ProPublica recalled that the bosses looked the other way. Suiting up was impractical, those workers said. It took time away from the tasks that needed to get done and was uncomfortable, especially on hot days, when the temperature inside could reach 100 degrees.In the summer, the windows and doors were left open to keep the workers from overheating, allowing asbestos to escape outside. Wet asbestos splashed on their uniforms, coats, helmets and boots. One guy seemed to always have some on his mustache. It would dry and flake off their clothes wherever they went, they said. Saenz remembered walking into safety meetings in the administrative building with asbestos drying on his coveralls. The guys carried so much asbestos into the trailer where they ate lunch and took breaks that it needed to be replaced, former union leaders said.Their uniforms sat in the laundry, caked with dry asbestos. When the union raised the problem in 2010, managers responded by giving the team its own hamper with a lid to contain the asbestos, said longtime union officer Mike Spacone. Only after union leaders threatened to call federal authorities did the company give the team its own laundry facilities, Spacone said.On occasion, workers who handled asbestos would leave without showering in the plant's locker room or wear their work clothes home. "My kids played sports," recalled Dave Helbig, an employee from 1980 through 2021. "Sometimes I had to leave to get to their games."The company would have known employees were being exposed; workers with a high risk of exposure sometimes clipped a small monitor to their bodies to measure the amount of asbestos in the air around them. At least five times in 2001 and 2002, the levels around team member Patrick Nowak exceeded OSHA's exposure limit, his company records show. "I failed so many times, they quit testing me," he said. The records do not indicate if Nowak was wearing a protective mask known as a respirator, as some other employees' records do.Tony Garfalo wore a monitor seven times in 2001, and, on four occasions, the results exceeded OSHA's limit, his records show. Once, the asbestos level was more than five times the allowable limit. The records say he was wearing a half-face respirator. Garfalo said his bosses promised to address the situation, but "nothing changed."He and the others knew all too well the damage asbestos could cause. Garfalo said his father, who worked the asbestos job at the plant, developed asbestosis. Employees in other departments got sick from a type of asbestos-containing pipe covering that once insulated the plant, longtime employees said and court records show. Cheff said his uncle died from asbestosis at 59. A millwright named Teddy Skiba was diagnosed with mesothelioma and later died.In addition to those signature diseases, which are rare even among asbestos workers, the tiny strands can harm the body in other ways. They can put people at increased risk of heart disease by scarring the lungs, forcing the heart to work harder to pump blood through them to pick up oxygen. Some scientific evidence suggests an association between asbestos exposure and stroke. And battling all kinds of illnesses with damaged lungs can weaken the body's ability to fight them; that damage can mean the difference between life and death.One retired member of the team, Umberto Bernardone, died from an aneurysm in 2004 at age 77. He had long had trouble breathing, said his son, Mario, who also worked at the plant. X-rays showed that asbestosis had scarred his lungs. "The asbestos was with him all the time," Mario said.Not long after, another retired team member, Salvatore "Buddy" Vilardo, died from a blood clot, his son said. He was 62.Cheetham, the group's big brother, had just retired when he fell ill in 2004. A doctor in Buffalo said it was cancer. Cheetham told his daughter Keri that he was certain the asbestos was responsible and asked her to consult a lawyer after he died. When the guys found out he was sick, they showed up at his house. They found their friend in a bed in his living room, under the care of a hospice nurse, struggling to breathe.Cheetham died five months before his 56th birthday. His autopsy surprised his family — it wasn't asbestos after all; an aggressive form of skin cancer had killed him. His former co-workers weren't told about the autopsy. For years, they believed his cancer had been brought on by asbestos exposure. The memory of Cheetham's last gasps haunted the guys like a ghost, a harbinger of what their own futures might hold.Elsewhere in the world, governments were taking action to protect their people. Saudi Arabia banned asbestos in 1998, Chile and Argentina did so in 2001, Australia in 2003. By 2005, asbestos was outlawed across the European Union. "It was a no-brainer," said Tatiana Santos, head of chemical policy at the European Environmental Bureau, a network of environmental citizens' groups.America's EPA could have banned asbestos. Congress could have banned it. But over and over, they crumpled in the face of pressure from OxyChem and its peers in the chlorine industry.The EPA tried to enact a ban in the late 1980s, but the companies got ahead of it. Records from the time show corporations testified that removing asbestos from chlorine plants would not yield significant health benefits because workers were only minimally exposed; they also argued it would require "scrapping large amounts of capital equipment" and thus would "not be economically feasible."Under federal law at the time, the EPA was obligated to regulate asbestos in the way that was "least burdensome" to industry. That forced the EPA to make a cold calculation: Banning asbestos in chlorine plants would prevent "relatively few cancer cases" but increase the companies' costs. So when the agency enacted an asbestos ban in 1989, it carved out an exemption for the mineral's use in the chlorine industry.The EPA made it clear that the companies should begin using alternatives to asbestos screens; in fact, according to company records made public through litigation and published as part of Columbia University and the City University of New York's Toxic Docs project, OxyChem had already developed screens that didn't need an asbestos coating. Still, the companies celebrated their immunity from regulation."WE HAVE A WIN," a lobbyist declared in an internal communication included in the Toxic Docs project.In the end, asbestos was never banned. The asbestos industry challenged the ban in court, and in 1991, a panel of federal judges deemed the rule too onerous and overturned it. The decision was a stinging blow to the EPA, several current and former employees told ProPublica. "I still remember the shock on the managers' faces," said Greg Schweer, an EPA veteran who ran its new-chemicals management branch before he retired in 2020. The office "was full of energized people wanting to make their mark. But things changed after that." The agency shelved efforts to regulate other dangerous substances and wouldn't attempt a similar chemical ban for 28 years.Most industries stopped using asbestos anyway, a phenomenon experts largely attribute to a wave of lawsuits from people with asbestos-related diseases. But the chlorine industry kept using its asbestos screens. It continued importing hundreds of tons of the substance every year, more than the weight of the Statue of Liberty.In 2002, Sen. Patty Murray a Democrat from Washington, tried to get a ban through Congress. She tried again in 2003 and again in 2007. That year, with Democrats in control of the Senate and House, her effort found some traction. OxyChem was keenly aware how much an asbestos ban would hurt its bottom line. Chlorine and caustic soda were the focus of its chemical operation, financial statements show, driving more than $4 billion in annual sales. Most of OxyChem's plants still used asbestos; if they had to close, production would tumble.Occidental Petroleum, OxyChem's owner, was a force on Capitol Hill, with lobbyists that spent millions influencing policy and a political action committee that pumped hundreds of thousands of dollars into campaigns each election cycle. OxyChem was also a member of the American Chemistry Council, an influential trade organization that made campaign contributions of its own.The industry had an ally in then-Sen. David Vitter of Louisiana; at the time, at least a quarter of the 16 asbestos-dependent plants in the country were located in the Republican senator's home state, records show. At a hearing in June 2007, Vitter echoed the chlorine industry's standby talking point, that its manufacturing process involved "minimal to no release of asbestos and absolutely no worker exposure.""Now, if this were harming people or potentially killing people, that would be the end of the argument, we should outlaw it," he added. "But there is no known case of asbestos-related disease from the chlor-alkali industry using this technology."Then-Sen. Barbara Boxer, a California Democrat in favor of the ban, pushed back, saying the chlorine manufacturing process was "not as clean as one would think." But to build support for the bill, proponents ultimately agreed to exclude products that might contain trace levels of asbestos, such as crushed stone, as well as the asbestos used in the chlorine industry.The bill passed out of the Senate on a unanimous vote. But many of the public health advocates who championed the initial measure opposed the watered-down version, saying it had been practically gutted, and it failed to find support in the House. Vitter, who later went on to lobby for the American Chemistry Council, did not respond to requests for an interview.In the 15 years that followed, congressional attempts to ban asbestos would continue to fall short.The Environmental Protection Agency headquarters in Washington, DC, on January 19, 2020.Lucy Nicholson/ReutersYet another federal entity had the power to protect the OxyChem workers. There was once a time when OSHA inspectors visited the Niagara Falls plant about every year. That ended in 1996, when the plant won coveted admission into an OSHA program that exempted it from such scrutiny.The Star Program, created during the Reagan administration as part of OSHA's Voluntary Protection Programs, allows plants that can prove they are model facilities to avoid random inspections. The theory behind the program is that motivating companies to adhere to best practices on their own is more effective than having underfunded government inspectors punish them.At the Niagara Falls plant, former union leaders believed the program would protect jobs and make the facility safer, they told ProPublica. They worked with management on the application — a monthslong process that entailed updating the plant's safety practices and submitting to a rigorous inspection. But what actually changed, the union leaders said, was that OSHA inspectors came far less frequently and announced their visits well in advance. When OSHA came to re-evaluate the plant, usually every three to five years, management spent months preparing, said Spacone, the union officer. "They would clean the hell out of the place. Everything would be spotless." Work in certain areas came to a halt. Plant representatives tried to limit what the evaluators saw.Even still, in 2011, evaluators found asbestos "scattered in certain areas of the floor" and covering much of the mechanical equipment, records show. "This contamination can spread easily when dry," they wrote in a report. "Appropriate clean up procedures must be instituted to prevent airborne asbestos." The evaluators did not give the plant an official citation. In the end, they applauded the plant's "commitment to safety and health" and recommended it for continued participation in the program.Three years later, evaluators identified another issue related to hygiene: Although the plant tested the air for hazards like asbestos, it wasn't using the data to spot problems. What's more, the person in charge of the program wasn't properly trained. OSHA let the plant remain in the program on the condition that it fixed the problems within a year. The plant updated its software and the department leader took a 56-hour course, records show.Apart from the re-evaluation visits, OSHA made just two other trips to the plant between 1996 and 2021, records show. Only one included a full inspection. On that visit, inspectors cited the plant for failing to protect workers from falls. The other visit did not result in any citations.With OSHA largely out of the picture, the plant's managers became more lax about safety, Spacone said. "I started thinking [that joining the Star Program] was a mistake," he said. Debbie Berkowitz, a former chief of staff and senior policy adviser at OSHA during the Obama administration, said that, in her experience, it was possible for plants to stay in the program long after their commitment to safety had lapsed. "Once they're in, they're in," she said. "In most cases, it is a total ruse."OSHA declined to make an official available for an on-the-record interview or comment on ProPublica's findings at the Niagara Falls plant. A Department of Labor spokesperson said that plants can be terminated from the program and that unions can withdraw their support.In the absence of government intervention, union leaders tried to tackle the asbestos problem themselves, four former union presidents told ProPublica. The union repeatedly asked management to expand the asbestos team and have certain people dedicated to cleaning. Plant leaders refused, they said. "It was a never-ending battle," said Vincent Ferlito, one of the former presidents. "It always came back to the same thing: money."Fed up with the mess, Garfalo grabbed a roll of red caution tape one day in 2007 and wrapped it around the asbestos-soiled building where his team worked, to the amazement of his colleagues. He barricaded each doorway, then hung as many danger signs as he could find. The protest prompted his managers to hire professionals for a one-time clean, but they also warned him to never do it again, he said.By 2011, a year after he'd retired, Garfalo couldn't ignore a lingering cough that would occasionally startle him out of sleep. His doctor couldn't tell whether his breathing difficulties were caused by asbestos or his smoking habit, but said that smokers who are exposed to the substance have an even higher risk of serious illness. Garfalo's mind traveled back to a day, a dozen years earlier, when he climbed atop the cell-maintenance building to fix a fan, only to discover that the entire roof was coated in asbestos. Train cars parked beside the building were covered, too. He thought about the homes less than a half-mile away and wondered how far the fibers had traveled.Federal Triangle buildings, including the Environmental Protection Agency's headquarters in Washington, DC, on July 7, 2022.Patrick Semansky/APIn August 2021, OxyChem announced it was closing the Niagara Falls plant, blaming "unfavorable regional market conditions" and rising rail costs in New York state. Over time, its workforce had dwindled from more than 1,300 to about 150. OxyChem's chlorine operation was now mostly in Gulf Coast states with lower taxes and less regulation.And a law that had once protected it from "burdensome" environmental rules had changed.In 2016, Congress had updated the Toxic Substances Control Act, removing the requirement that the EPA choose regulations that burdened industry as little as possible. Though the change gave the agency another chance to ban asbestos, it wasn't going to happen during the Trump administration; the former president once alleged that the movement against asbestos was "led by the mob" and had his face featured on the packaging of Russian-produced asbestos. Under the Biden administration, however, the EPA determined that all workers in asbestos-dependent chlorine plants faced an "unreasonable risk" of getting sick from it, citing a review of the companies' own exposure-monitoring data. This April, EPA Administrator Michael Regan proposed a ban for the first time in more than three decades.It could be eight months or more before the rule is finalized. Two trade associations, the American Chemistry Council and the Chlorine Institute, are imploring the EPA to reconsider. They are once again arguing that the companies use asbestos safely — and they've turned to industry-friendly scientists and consulting firms to accuse the EPA of overestimating the risk to workers.When given a summary of ProPublica's reporting on the Niagara Falls plant and asked to respond, Chlorine Institute Vice President Robyn Brooks said her organization had no knowledge of the situation and referred reporters to OxyChem. The American Chemistry Council pointed to the plant's participation in the Star program as proof of its "record of performance."The industry groups have also made the case that a ban would jeopardize the country's supply of chlorine and could even create a drinking water shortage. But the EPA and public health advocates contest those claims. They point out that only a small fraction of the chlorine produced by asbestos-dependent plants is used to clean drinking water and that OxyChem and Olin have voluntarily closed or reduced capacity at several of those plants in recent years without catastrophically disrupting the supply chain. In fact, OxyChem told investors in August that its plans to upgrade the asbestos-reliant technology at its largest chlorine facility next year would have "no impact on customers," a transcript shows. For at least eight years, the company has been slowly upgrading some plants to a newer technology that uses a polymer membrane to separate the chemicals; it built a completely asbestos-free plant in 2014.The U.S. Chamber of Commerce has come to the companies' defense, saying asbestos is "tightly regulated" and "used safely every day" in the chlor-alkali industry. So have 12 Republican attorneys general, including Ken Paxton of Texas and Jeff Landry of Louisiana. In a letter, they questioned whether the EPA has the authority to pursue a ban, signaling a readiness to take the agency to court like the asbestos industry did in 1989. (The Chamber and most of the attorneys general declined to comment or did not respond to inquiries from ProPublica. A spokesperson for Nebraska Attorney General Doug Peterson called the situation at the Niagara Falls plant "very concerning" and said that it would be "completely misleading" to suggest that the letter implied approval of such circumstances.)Industry leaders are confident they will prevail. "We've been engaged in this activity for quite a while and have pushed back on it," Olin CEO Scott Sutton told shareholders on a July 29 earnings call. "I think you're not likely to see a final rule come out that is as proposed."Michal Freedhoff, the EPA's top chemical regulator, said she could not comment on what the final rule-making decision would be. But she said the agency was not backing down on the science and that ProPublica's reporting underscores the need for decisive action.Given the potential for litigation, lawmakers are renewing their effort to pass a law banning asbestos, which would be more difficult to challenge in court. "It is a brutal and painful fight," said Linda Reinstein, a leading advocate who co-founded the Asbestos Disease Awareness Organization after her husband, Alan, died of mesothelioma in 2006. "We're not going away."Hanging in the balance is the health of hundreds of workers at the eight remaining asbestos-dependent chlorine plants in Louisiana, Texas, Alabama and Kansas. ProPublica reached out to current and former employees at those facilities. At the OxyChem plant in Wichita, union president Keith Peacock said he was comfortable with the way asbestos was handled. "I don't know of anyone who sees this as a health issue," he said. "There are rules in place for it and everyone adheres to those safety guidelines." But Chris Murphy, a former union president at Olin's plant in Alabama, said the conditions there mirrored the ones described by the workers in Niagara Falls. He said he himself had seen asbestos caked on beams and cranes in recent years and been told to remove it with a putty knife. "There ain't nothing to it," he remembered his managers saying. "You'll be all right. It ain't that bad." He wasn't told to wear protective gear, he said, so he didn't.The former OxyChem workers who still live in Niagara Falls gather once a month to reminisce over Buffalo wings and beef piled high on salty kummelweck rolls. They can only wait and see if they develop symptoms as they enter the post-exposure time frame in which asbestos-related disease is commonly diagnosed.Saenz left the plant with a bad back in 2016. Now a 64-year-old grandfather of two, he's been having lung trouble and considering X-rays to see if there are signs of asbestos-related damage. "I'm wondering if I'm not headed down that road," he said.He sees the burden he now carries as a tradeoff for the lifestyle he was once afforded. "It was a great place to work. I was able to raise four children and buy a house and live the American dream." He even gave his son Henry Jr. his blessing to start a job at OxyChem in 2013, so long as he stayed far away from asbestos. Saenz now wonders how much more time he has left with his family."It's a nightmare," he said. "It's a price you pay, I guess."Read the original article on Business Insider.....»»

Category: smallbizSource: nytOct 23rd, 2022

19 States To Investigate Banks For ESG-Style Commitment To UN Alliance

19 States To Investigate Banks For ESG-Style Commitment To UN Alliance Authored by Nathan Worcester via The Epoch Times (emphasis ours), The war between states and banks over environmental, social, and governance (ESG) investing and similar practices has reached the doorstep of the U.N. A total of 19 state attorneys general have launched investigations of major financial institutions’ commitment to the U.N.-convened Net-Zero Banking Alliance. The United Nations headquarters building in New York is seen from inside the General Assembly hall on Sept. 21, 2021. (Eduardo Munoz/Pool Photo via AP) The alliance’s website states that its members control roughly 40 percent of the world’s banking assets and are “committed to aligning their lending and investment portfolios with net-zero emissions by 2050.” “The Net-Zero Banking Alliance is a massive worldwide agreement by major banking institutions, overseen by the U.N., to starve companies engaged in fossil fuel-related activities of credit on national and international markets,” Missouri Attorney General Eric Schmitt said in a statement regarding the investigations. A May statement from the alliance states that it “does not support the financing of fossil fuel expansion” but notes that it “believes that immediate divestment from existing fossil fuel positions will not necessarily bring about the required real economy decarbonization that the world needs.” “We are leading a coalition investigating banks for ceding authority to the U.N., which will only result in the killing of American companies that don’t subscribe to the woke climate agenda. These banks are accountable to American laws–we don’t let international bodies set the standards for our businesses,” Schmitt said. Arizona, Arkansas, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Montana, Nebraska, Oklahoma, Tennessee, Texas, and Virginia are among the states now investigating the banks through a powerful tool known as a civil investigative demand. One demand encompasses the following requests: “Describe Your involvement in each Global Climate Initiative in which You participate, including the date You first began participating; any promises, pledges, or other commitments You made to the Global Climate Initiative; or any actions You made or took pursuant to, or consistent with, such commitments, or Your initial or on-going participation, and the employee(s) responsible for managing Your relationship with each Global Climate Initiative.” Schmitt’s announcement is the latest salvo in a long-running conflict between major financial institutions and individual U.S. states regarding ESG. State treasurers, such as West Virginia’s Riley Moore, have sought to move their state’s money from financial institutions that follow ESG principles. Read more here... Tyler Durden Sun, 10/23/2022 - 07:00.....»»

Category: blogSource: zerohedgeOct 23rd, 2022

The FBI Paid Danchenko Over $200K: Day 3 Trial Summary

The FBI Paid Danchenko Over $200K: Day 3 Trial Summary Authored by Techno Fog via The Reactionary (emphasis ours), Day 3 of the Igor Danchenko false statements trial started with the testimony of Democrat activist and Clinton ally Charles Dolan. For background, Dolan has historic ties to the Democrat party, was a state chairman of Bill Clinton’s 1992 and 1996 presidential campaigns, and was an advisor to Hillary Clinton’s 2008 presidential campaign. And he was also a source for the Steele dossier. Dolan’s connections to Russia began from his consulting work, where he served to attract foreign investments into Russia in the 2000s. As part of that job, he would have regular conference calls with the spokesman for Russian President Vladimir Putin and had occasional meetings with other Russian officials. Other work, such as assisting Disney in obtaining a broadcast license, would keep him connected to Russia.   Dolan was introduced to Igor Danchenko through Fiona Hill in the spring of 2016. I’ll let Dolan explain: That friend Danchenko was trying to assist was a woman by the name Olga Galkina. Dolan would eventually meet with her in Cyprus in March of 2016. Galkina would eventually become relevant to the Dossier story. Danchenko and Dolan kept in touch, meeting from time to time. Part of the reason they stayed connected was because of the “potential opportunities” Dolan’s firm (kgobal) and Danchenko’s employer, Orbis, might pursue. (The business opportunities never presented themselves.) In May 2016, Dolan reached out to Danchenko because he would be traveling to Moscow to attend a conference at The Ritz-Carlton. Dolan eventually traveled to Moscow in June 2016. At that time, Danchenko was already in Moscow and the two met in that city. Dolan returned to the US and he and Danchenko remained in occasional contact. All this background information was necessary to help establish the Dolan-Danchenko relationship. From there, Special Counsel Michael Keilty produced an e-mail where Danchenko reached-out about the Trump campaign: Dolan responded to Danchenko, stating: “Let me dig around on Manafort. Pretty sure the new team wanted him gone ASAP and used today's New York Times story to drive a stake in his heart.” He followed-up with another e-mail to Danchenko, where he said: "I had drink with a GOP friend of mine who knows some of the players and got some of what is in this article, which provides even more detail. She also told me that Corey Lewandowski, who hates Manafort and still speaks to Trump regularly played a role. He is said to be doing a happy dance over it. "I think the bottom line is that in addition to Ukraine revelations, a number of people wanted Manafort gone. It is a very sharp elbows crowd." This information turned out to be false. Dolan admitted upon questioning from Keilty that he never had a drink with a “GOP friend.” He got the information from cable news. Danchenko would again request information from Dolan, saying “It's an important project for me, and our goals clearly coincide.” Dolan figured Danchenko said this because “he knew I would be a supporter of the Clinton campaign.” Special Counsel Keilty then showed Dolan parts of the Steele Dossier and compared them to the information Dolan provided Danchenko. He asked Dolan if the information he provided Danchenko was “substantially similar” to what was in the Steele Dossier. Dolan’s response: “Yes.” Fast forward to January 2017. Buzzfeed released the Steele Dossier and a client of Dolan’s was mentioned in the document. Dolan had a suspicion about Orbis and Danchenko’s involvement, so he reached out. Danchenko hedged on the matter and then disappeared, never getting back to Dolan: Cross-Examination of Dolan I’ll be brief on this part. Dolan conceded that at the time he first saw the Steele Dossier, he didn’t recognize the information he provided Danchenko. Instead, Dolan recalled he may have realized he was a source of the Dossier information during an interview with the Special Counsel in September 2021. Then there was this key exchange: Q         And I think you have already testified to this, but even knowing everything that the government has done to look into you, it's still your testimony today that you've never talked to Mr. Danchenko about anything that ended up in the dossier, correct? A         Correct. Re-direct of Dolan That exchange we cited above seems to contradict Dolans’s statement during direct examination that the information he gave Danchenko was “substantially similar” to the Dossier allegations. Keilty cleaned it up with this exchange: The Testimony of FBI Special Agent Kevin Helson (Washington Field Office) Agent Helson was Danchenko’s handler once he became a confidential human source (CHS) in March 2017. He wasn’t a part of Crossfire Hurricane. But he was approached by members of the Crossfire Hurricane team – Steve Somma and Brian Auten – to help manage their new source. “I was approached most likely -- I think it was around the end of January 2017 -- by two members of the Crossfire Hurricane team who had identified an individual that they had just conducted a three-day interview. It was in the course of that three-day interview they had learned that there was potential for more information relative to the programs that I was working.” The Danchenko CHS task was assigned to Agent Helson by his Washington Field Office supervisor. Helson was to “meet with and eventually open Mr. Danchenko as a CHS, to get him to report on stuff that was of interest to us.” His interest in Danchenko was primarily “Russian counterintelligence,” as opposed to Auten and Somma’s interest in the Dossier. Helson had been managing Danchenko by the time Mueller was appointed Special Counsel. Here’s how the interactions went: “The general understanding that I had with Crossfire Hurricane and ultimately what became the Mueller Investigation was if you want questions asked related to the dossier, I will ask them, but it's going to be incumbent upon them to give those to me.” Helson was asked about whether Danchenko was able to corroborate any of the Dossier allegations: Interestingly, Danchenko appeared to have been given favorable treatment – even for a paid CHS. Helson said it’s typically standard practice that the monetary compensation is “based on the type of information” the source gives. Danchenko, however, was paid thousands just to sit down and talk to the FBI. Helson would eventually take part in interviews with Danchenko that were recorded without Danchenko’s knowledge. Some of the questions were presented from Auten, such as Auten’s instructions to “Readdress the Sergei Millian matter. We have discrepancies.” The Millian matter would be readdressed – with Helson first admitting he didn’t know Millian had a formal relationship with the FBI until trial prep. In fact, Helson was kept in the dark by Auten and Somma, not seeing any correspondence between Danchenko and Millian (and not seeing correspondence between Dolan and Danchenko). Helson stated he was “very confident” Danchenko told him he spoke with Millian a couple times. From there, a good deal of questions related to the Crossfire Hurricane/Mueller Team not providing Helson with Danchenko’s communications: Q. With respect to this email [from Dolan to Danchenko], would that be something that you would have been interested in on June 15th of 2017? A. Yes. Q. But you didn't have -- did you have it or not? A. No. Q. Did you ever get that other than recently? A. No. … Q. Do you know, sir -- or at the time, did you know whether or not there was any information that then appeared in any of the dossier reports relating in some way to these emails? A. Not until you showed me. There was also a long series of questions and answers on Dolan, the interviews, and Olga Galkina. Then Durham asked Helson about the Dossier being used in the Carter Page FISA warrant, and Helson’s 2017 conclusion that it was bunk: Q.        And who is it that is saying in there (As read): "Right, because it's not others, no legally -- there's no attorney that's ever going to put that on as evidence anyway."? A.        Yeah, that was me. Q.        But do you know, sir, now, whether or not the uncorroborated information concerning a well coordinated conspiracy of cooperation portion out of 95, was that used in a legal document? A.        I understand that it -- I think it was used or cited in a FISA application. Q.        And that was against an American citizen, correct? A.        I believe that was -- yes. Q.        And it was completely unvetted? A.        Yes.   Cross-Examination of Helson Briefly, here are some highlights of the cross-examination of Helson by Danchenko’s attorneys: Helson came to trust Danchenko. Their relationship lasted from March 2017 through October 2020. Early on, Danchenko demanded more money from the FBI, purportedly because he was “at risk.” The Crossfire Hurricane/Mueller Team “never raised any real concerns” about the information Danchenko provided. The Crossfire Hurricane team never asked Helson to image Danchenko’s cell phone or obtain his e-mails. Helson told Danchenko, as a CHS, that “he should scrub his phone” to mask “his connection to Steele and any connection” to the FBI. Helson sought approval to pay Danchenko $10,900 at one point. Another request was for $10,000. Helson was “upset” that Danchenko’s January 2017 was released to the public. After Danchenko was ended as a source, Helson requested Danchenko receive a lump sum payment of $346,000. This would have brought the total payments to Danchenko to $565,000. The $346,000 payment was not approved. (Overall, Danchenko was paid over $200,000….) Re-Direct of Helson To close, we’ll provide key excerpts of the conclusion of Helson’s testimony. Our friend Fool Nelson was in attendance and said Durham lit Helson up. Understandably so, as Helson defended and criticized the closure of Danchenko as a CHS. Specifically, Durham caught Helson in a falsehood about the paperwork used to open Danchenko as a CHS: Q.        Let me ask you again, with respect to the opening of Mr. Danchenko as a confidential human source, you filled out paperwork, correct? A.        Correct. Q.        And in that paperwork, one of the important questions is: Is there any derogatory information about this person, correct? A.        Correct. Q.        And you wrote, there is no derogatory information? A.        Yeah, based on my search. Q.        And that is untrue? A.        It was there was a case on him. Q.        And what was the -- what was the nature of the case? A.        It was a counterintelligence investigation out of a different field office. Q.        It's a 65-day file, correct? A.        Correct. Q.        Is that counterintelligence? A.        Yes. Q.        Of a particular type? A.        Yes, an espionage case. An espionage case. Durham raked Helson over the coals on this issue, pointing out that Helson never corrected his falsehood after learning of this derogatory information” Durham also brought up the issue of Danchenko committing fraud in connection with his immigration. As you can see, Helson tried to explain-away the mistakes. Q.        Yeah. In fact, it's to determine whether or not there was fraud committed in connection with his immigration, correct? A.        Correct. Q.        Did you do that? A.        No. He went -- he had went to – Q.        Well, that's not my question. A.        Okay. Q.        Did you do that? A.        No, no. Q.        To your knowledge, did anybody that's working on Crossfire Hurricane, Mr. Mueller's group or otherwise, ever run that to ground and do what had been recommended? A.        No. Durham also brought up Helson’s failure to check Danchenko’s statements against his past travel records, and how Helson didn’t follow recommendations to assess Danchenko’s “actual motives”: Q.        All right. Well, what about looking at what he had said as compared to what the records showed? Did you do that going backward? A.        Not going backwards, no. Q.        Did they make a specific recommendation to you that the Bureau behavioral assessment group conduct an examination to determine what Mr. Danchenko's actual motives, allegiances and vulnerabilities were? A.        Yes. Q.        And did you do that? A.        No. Helson’s failures kept on being pointed out: Q.        Were you -- was it recommended that you do an assessment or to look at the financial nature of Mr. Danchenko's employment because of the concern that he may be prone to shopping around his information in search of work and pre-composing reporting containing unsolicited material, which may indicate the FBI is not the primary audience for his information? A.        Yeah, I saw that in the report. Q.        Did you do that? A.        No. Q.        Was it recommended that the Washington Field Office determine whether Mr. Danchenko committed any unauthorized illegal activity for the apparent falsehoods and inaccuracies contained in his visa and immigration documents? A.        Yes, they recommended that. Q.        Did you do that? A.        No. Then Durham asked Helson about the Washington Field Office recommendation to polygraph Danchenko, apparently concerned with Danchenko’s loyalties: Q.        Did they specifically recommend to the Washington Field Office and you that you considered administering a polygraph of Mr. Danchenko to determine if he has ever been tasked by a foreign individual, entity or government to collect information or to perform actions adverse to the U.S. interest? A.        They recommended that, yes. Q.        Did you do that? A.        No. There was one final point of contention between Durham and Helson which will spill over into tomorrow morning. Helson had disagreed with the recommendation to look further into Danchenko’s ties to Russian intelligence. This recommendation came from an analyst who spent 19 years as an army counterintelligence officer in Europe. With that in mind, today ended with this question/answer: Q.        Do you recall, sir, whether or not you or any of your colleagues who were looking at the dossier and trying to corroborate the information there, did you or anybody to your knowledge in the FBI attempt to run to ground and complete or conclude, resolve that case that had to be closed because the FBI mistakenly thought he had left the country? Anybody do anything to resolve that? A.        No. Other matters… It looks like Danchenko will not testify. Not a surprise. We might see closings on Monday. Probably followed by a verdict that same day, if not by Tuesday. We’ll see. This is the second day in a row that Durham has basically treated the FBI Agents/Analysts as hostile witnesses. First it was Auten, now it was Helson. It’s just not about the incompetence and their basic investigative failures. It’s also that these FBI Agents and Analysts come across as arrogant, at least from my reading of the transcripts, and continue to hold themselves essentially blameless. All the while, they have at times defended Igor Danchenko, the witness who didn’t tell them the truth. It’s not a good look for the Bureau. Tyler Durden Fri, 10/14/2022 - 12:05.....»»

Category: smallbizSource: nytOct 14th, 2022

Gaslighting On Gas Prices

Gaslighting On Gas Prices Authored by Michael Shellenberger via Substack, How do politicians get away with blaming others for the consequences of their policies? In response to $6 per gallon gasoline prices, which are nearly 70% higher than the $3.81 national average, California Governor Gavin Newsom will convene a special session of the state legislature in December to enact a “windfall profits tax” on oil companies that he said are price gouging. “Crude oil prices are down but oil and gas companies have jacked up prices at the pump in California,” said Newsom. “This doesn’t add up. We’re not going to stand by while greedy oil companies fleece Californians.” But there is no evidence of illegal price setting, and a new tax on oil companies would increase prices further. Last week, a federal judge in San Diego issued a 103-page ruling dismissing a class-action lawsuit that claimed traders at oil companies had colluded to keep prices high. The scope of the case was massive and spanned seven years of litigation. As for a new tax, a 2006 report by the nonpartisan Congressional Research Service found that a new windfall profit tax on oil companies, which had been in place in the 1980s, would have “adverse economic effects,” including higher prices, lower domestic production, and increased foreign imports. The San Diego judge did find that oil companies had coordinated refinery operations, and it may be appropriate for governments to impose a tax on a company when it is engaged in monopolistic or cartel behavior. But the San Diego judge found no evidence that oil refiners deliberately create shortages to raise prices. “Antitrust wrongdoing consists of concerted action pursuant to an illegal agreement, not independent profit-maximizing actions based on market conditions,” she wrote. And anti-trust regulations are well-enforced. “They definitely cannot talk to each other about their production time,” said UC Berkeley energy economist, Severin Borenstein. “That would be a pretty clear antitrust violation.” The underlying problem is that California has reduced the capacity of its oil refineries as part of its push to phase out internal combustion engines. “California policymakers have knowingly adopted policies with the expressed intent of eliminating the refinery sector,” wrote the vice president of California refinery, Valero, in a letter [pdf] to the California Energy Commission. Independent experts agree. “We’re operating now in a ... tight market,” said Shon Hiatt, a University of Southern California associate professor of business. “So if one refinery goes off to do maintenance, the prices are going to jump, because we don’t have much slack.” Indeed, those experts have been warning California policymakers for decades that the state lacked refinery capacity. A 2000 report by the state’s attorney general pointed to constraints on supply for California’s “unique clean-burning gasoline,” and higher taxes as the reason for the state’s higher prices. “The way we're doing it now is you just let the fuel costs go up and then we leave poor people with no ability to get anywhere,” said Tufts energy expert, Amy Myers Jaffe. “And then [California leaders] grandstand against the oil companies — that's not a solution." If Newsom and other politicians really wanted to lower gasoline prices, economists say, they would expand refinery production and cut taxes. “If the goal is to help Californians hit specifically by high gas prices,” noted Borenstein, “nothing will be nearly as well targeted as a gas tax holiday.” And increasing oil production in the U.S. would lower prices, just as it did over the last decade, after the shale fracking revolution. But neither Newsom nor anyone one else in his party, which holds a super-majority in the state legislature, is proposing to expand refinery capacity, cut taxes, or expand production. On the contrary. They are phasing out oil and gas production. In April and October 2021, Newsom ordered new regulations to end fracking in 2024 and restrict oil drilling. In August and September of this year, Newsom’s Air Resources Board announced a ban on internal combustion engine vehicles by 2035 and a ban on natural gas furnaces and water heaters by 2030. Newsom’s actions are mirrored at the federal level. In May, President Joe Biden’s EPA shut down a large oil refinery in the U.S. Virgin Islands that investors had wanted to upgrade to make less polluting. Biden has leased less federal land and off-shore areas than any president since World War II. And he and his cabinet officials have repeatedly said their goal is to “end fossil fuel.” At the same time, Biden, his cabinet, and his spokespersons have turned around and blamed gas station owners, refineries, and oil producers, for high gasoline prices. In June, Biden accused oil refiners of price gouging even though they were operating at 94% of their capacity. And he said, “This idea that [the oil and gas firms] don’t have oil to drill and to bring up is simply not true.” But it was true. Then, before the July 4 weekend, Biden blamed the owners of gas stations, a competitive retail industry, for high prices. And administration officials said they killed a large Alaska oil and gas lease due to “lack of industry interest,” which was also not true, as Alaska’s senior senator pointed out. This has been going on for decades. In 2006, Congressional Democrats killed federal legislation to increase refinery capacity and then turned around and blamed the industry for restricting supplies. "They thrive in an environment where markets are tight," said Rep. Ed Markey (D-MA), who is today a Senator. The same year, Senate Democrats killed legislation to expand oil production. "We need lower gas prices and energy independence," said the late Senator Harry Reid. "Republican leaders have proposed the same old solution: drill, drill, drill. But drill, drill, drill is not going to deliver the results we need." In fact, it was drill, drill, drill (and frack, frack, frack) that resulted in the US becoming the world’s largest oil producer in 2018. Republicans tried again to expand refinery capacity in 2008, only to face the now-familiar argument from Democrats that oil companies were manipulating supply to keep prices high. “It's been more than 30 years since America built its last new refinery,” said then-President George W. Bush. Responded Senator Dick Durbin (D-IL). “Don't buy this agreement that it's about refineries. They have more capacity that they're holding back, so that they can keep their product dear and limited and short, and so that the consumers will ultimately pay more.” In other words, Newsom, Biden, Markey, Reid, Durbin, and countless other politicians have been, for decades, gaslighting the American people. They have restricted oil production and refining capacity and then turned around and claimed it is the oil industry, not them, that is restricting capacity and refusing to produce, in order to keep oil prices high. Their claims are belied by reality. The oil and gas industry eagerly expanded production between 2010 and 2020 by fracking so much shale that many of them went bankrupt because prices were so low for so long. And the oil and gas industry has long sought to expand refinery production and been thwarted by opposition at the local, state, and federal levels. Half the time, the gaslighting doesn’t make any sense. Markey in 2006 accused the oil companies, which were seeking to expand refining capacity, of trying to restrict supply. Reid the same year said that increasing supply would not lower prices. In both cases, politicians have effectively told the public not to believe their lying eyes. The question is not why Democrats gaslight on gas prices but why it works. Democrats have, for decades, made clear that they want to shut down the oil and gas industry. Biden promised it repeatedly on the campaign trail. His cabinet secretaries, most recently Treasury Secretary Janet Yellen, regularly emphasize their goal to phase out fossil fuels. But then, when prices rise, they are still able to convince a significant number of voters that it’s the fault of the oil companies. Why is that? Subscribers can read more here... Tyler Durden Thu, 10/13/2022 - 16:20.....»»

Category: personnelSource: nytOct 13th, 2022

Futures Tumble, Briefly Drop Below 3,600, Despite Latest Panic Pivot By Bank of England

Futures Tumble, Briefly Drop Below 3,600, Despite Latest Panic Pivot By Bank of England Another day, another rout, only this time there was an even more ominous twist. It's shaping up as another risk off day on Wall Street, and around the world, as stocks fell... again... as usual... pressured by the relentless rout in the chip sector (following Friday's decision by the Biden administration to put fresh curbs on China’s access to US semiconductor technology) which sent chip giant Taiwan Semi conductor plunging 8.3%, its biggest drop on record, and wiped out $240 billion in market cap from the global semiconductor sector, while US futures extended their Monday slump amid general amid fears of persistently high inflation two days ahead of the CPI report, and signs that company earnings were set to disappoint. A gauge of the dollar climbed to the highest this month before reversing.  But the ominous twist today is that for the second time in two weeks, the BOE stepped in the market, this time boosting its "temporary" QE to add linker bonds to its usual array of gilt purchases to tackle what it called “fire-sale dynamics.”  While this helped lift gilts and cable (if only briefly), its effect on futures was truly transitory, with the Emini dumping as much as 1% to a low of 3584, falling below the key level of 3,600, before stabilizing uneasily just above 3,600. It was down 0.6% at last check, while Nasdaq future were 0.5% lower as of 7:45am ET. In US premarket trading, Meta Platforms slipped after it was cut to neutral from overweight by Atlantic Equities, which sees the social media giant’s growth outlook increasingly challenged by the strengthening macro headwinds and growing competition for advertising dollars; it was also added by Russia to a list of terrorist and extremist organizations. Here are some other notable premarket movers: Zoom shares decline 3% in premarket trading as Morgan Stanley cut the recommendation on the stock to equal-weight from overweight, saying the company’s online business needs to normalize post Covid for the firm to unlock the “tremendous value” in its enterprise platform. Roblox falls as much as 3.8% in premarket trading after Barclays initiates coverage with an underweight rating, saying the gaming platform’s daily users are “fairly saturated” and growth is decelerating post Covid. Amgen shares rise 1.7% in premarket trading after being upgraded to overweight from equal-weight by Morgan Stanley, which highlighted the “unappreciated upside” in the biopharma’s mid-term pipeline. Lululemon shares rise 1.3% in premarket trading after Piper Sandler upgraded the athletic apparel brand to overweight from neutral, noting the company’s momentum in the broker’s Spring 2022 Taking Stock With Teens survey. Elastic drops 2.4% in US premarket trading as Wells Fargo initiates at underweight, giving the application software company its only negative analyst rating. Leggett & Platt shares fell 8.6% in postmarket trading on Monday after the company lowered sales guidance for the full-year. Piper Sandler reduced the price target to a Street low, noting that the company’s speciality foam business is not only losing share but has been “disproportionately impacted” by weakness in the bed-in-a-box part of the market. The mood remains extremely fragile ahead of Thursday’s US inflation data, with the case for another 75 basis-point rate hike likely to be strong if the reading comes in higher than than forecast. Fed officials until now show little sign they are in a mood to pause the rate-hiking cycle despite the potential hit to economic growth. “We have not seen the impact of tightening,” Michael Kelly, head of the multi-asset team at PineBridge Investments told Bloomberg TV. “That lies ahead and when we see that, it’s another leg down for risk assets.” Meanwhile, Russian President Vladimir Putin threatened further missile attacks on Ukraine after hitting Kyiv and other cities in the most intense barrage of strikes since the first days of its invasion. “It’s little wonder investors enter the week in a dreary mood, especially with headlines from Ukraine signaling a further escalation in geopolitical tensions,” said Christopher Smart, chief global strategist at Barings. European stocks also declined with the Euro Stoxx 50 falling 0.9%. Energy, chemicals and miners are the worst performing sectors. IBEX outperforms peers, dropping 0.7%, FTSE MIB lags, dropping 1.4%. Here are the biggest premarket movers: Qiagen shares rise as much as 7.2%, the most intraday since November 2021, after a Dow Jones report that Bio-Rad Laboratories is in talks to combine with the German diagnostics firm. Airbus shares rise as much as 1.3% after September deliveries of 55 aircraft seen as “an encouraging data point,” compatible with the jetmaker reaching its target of 700 deliveries this year, Deutsche Bank analysts write in a note. Dustin shares rise as much as 10%, the most since January, after the Swedish computer and technology retail company reported 4Q results which Handelsbanken said included “solid” organic growth helped by its corporate and public sector unit. Boozt rises as much as 9%, the most since August, after Danske Bank upgraded the Swedish online fashion retailer to buy from hold, seeing an attractive share after recent weak performance despite a “more resilient business model than before.” Mining and energy stocks decline more than the broader European market on Tuesday as metals and crude slide amid concerns over weaker demand due to global economy slowdown and strengthening dollar. BP dropped as much as 3.4%, and Shell -2.4% European semiconductor stocks fall for a third day, following a rout in shares of Asian chip powerhouses including Samsung and TSMC. ASML declined as much as -2.8% Givaudan shares are down as much as 8.3%, reaching the lowest value since March 2020, after the company reported weaker-than-expected 3Q sales. Analysts are worried about soft growth in North America and a miss by the taste and wellbeing division amid a weakening consumer backdrop. Ferrexpo shares decline as much as 11% in early trading on Tuesday, most in three weeks, after the iron- ore maker said production has been temporarily suspended at group’s operations in Ukraine due to limited power supply. Asian equities headed for a third day of declines amid a continued selloff in semiconductor shares, with markets in Taiwan, South Korea and Japan declining as trading resumed after holidays. The MSCI Asia Pacific Index dropped as much as 2.2%, with a technology sub-gauge falling more than 4%. Chip-related stocks in the region declined in the wake of fresh curbs on China’s access to US technology. The Hang Seng Tech Index also fell more than 3% amid the geopolitical tensions. Read: Chipmaker Rout Engulfs TSMC, Samsung With $240 Billion Wiped Out Hong Kong’s benchmark gauge slipped after a state-owned newspaper endorsed China’s Covid-Zero policy for the second day in a row, quashing investors’ hopes for a relaxation around the upcoming Communist Party congress. Chinese shares edged higher. Rising geopolitical risks are also weighing on sentiment, after Russia bombarded Kyiv and other Ukrainian cities. Meanwhile, investors remain on edge amid the prospect of more aggressive monetary tightening ahead of the release of US consumer-inflation data on Thursday. “Thin volumes, high volatility and uncertainty, and a bearish sentiment globally means investors will overreact on the downside to any negative news,” Olivier d’Assier, head of APAC applied research at Qontigo, wrote in a note. Several data releases this week, as well as a further escalation in the war in Ukraine, may trigger further selling, he added. The MSCI’s Asian stock benchmark is once again approaching the lowest level since April 2020, having fallen more than 4% over a three-day period. Japanese stocks fell, dragged by losses in technology shares amid concerns on earnings and the impact of new US curbs on chip-related exports to China. The Topix fell 1.9% to close at 1,871.24, while the Nikkei declined 2.6% to 26,401.25. Out of 2,168 stocks in the Topix, 285 rose and 1,833 fell, while 50 were unchanged. The market was closed for a holiday Monday. Tokyo Electron slid more than 5% after the Biden administration put fresh curbs on Chinese access to US chip technology. Tech sentiment was also hurt by a forecast cut at Yaskawa Electric, while Fast Retailing dropped more than 3% ahead of its earnings report this week.  “With around 30% of Japanese tool makers’ orders coming from China, we think we are now likely to see cancelations hurting backlogs just when the chip market is facing a major oversupply,” said Amir Anvarzadeh, a strategist at Asymmetric Advisors Ltd., adding that Tokyo Electron would be among the hardest hit. In FX, the Bloomberg Dollar Spot Index rose for fifth day as commodity currencies fell versus the greenback. Aussie and loonie were the worst G-10 performers as global growth concerns prompted traders to seek haven in the dollar; China signaled it may retain its strict Covid Zero policy, hitting stocks and commodities including iron ore The euro halted a four-day decline. German bonds advanced while Italy’s yield premium over Germany rose, paring some of Monday’s sharp drop amid doubts about Germany’s support for joint EU debt issuance. UK bonds edged higher in a bull-steepening move after the Bank of England expanded its financial stability operations, adding inflation-linked debt to its purchases, while pausing the sale of corporate bonds. The focus is on the result of the BOE’s daily bond-buying operation, a sale of 2051 linkers by the government and Governor Andrew Bailey’s comments later. The pound traded weaker versus the euro and was little changed against the dollar. Options traders are adding downside exposure in the pound again as cable retreats toward the $1.10 handle. The yen traded in a narrow range amid caution the authorities will step in to prevent further currency losses. Government bonds fell in tandem with overseas peers. In rates, Treasuries pared a decline and the curve bear steepened after the panicking BOE expanded its QE operation. The 10-year yields pated Monday’s gilt-led losses led by gains in UK bond market, after earlier touching 4%, while the 30-year yield hit its highest level since 2014; yields on two-year Treasuries rose to the highest since 2007. US cash market, closed Monday’s for bank holiday, remains cheaper vs Friday’s close by as much as 6bp at long end. US 10-year yield is higher by ~4bp at 3.92%, steepening 2s10s by ~5bp vs Friday’s close, with 5s30s also ~5bp wider on the day; gilts bull-steepen with UK 2-year yields richer by 11bp on the day. As reported earlier, Monday’s record slide in gilts was arrested after BOE said inflation-linked notes will be included in this week’s remaining buybacks. US auctions resume at 1pm New York time with $40b 3-year note sale, followed by 10- and 30-year sales Wednesday and Thursday In commodities, WTI drifts 2.6% lower to trade near $88.74. Spot gold falls roughly $3 to trade near $1,665/oz. Most base metals are in the red.  Bitcoin hovers around the USD 19,000 mark whilst Ethereum remains under 1,300. Looking to the day ahead now, it's another quiet event calendar with just the NFIB’s small business optimism index from the US for September out today (92.1, above 91.6 expected). From central banks, we’ll hear from BoE Governor Bailey and Deputy Governor Cunliffe, the ECB’s Lane and Villeroy, as well the Fed’s Mester. Finally, the IMF will be publishing their latest World Economic Outlook. Market Snapshot S&P 500 futures down 0.7% to 3,599.25 STOXX Europe 600 down 0.9% to 386.58 MXAP down 2.0% to 137.94 MXAPJ down 2.1% to 445.19 Nikkei down 2.6% to 26,401.25 Topix down 1.9% to 1,871.24 Hang Seng Index down 2.2% to 16,832.36 Shanghai Composite up 0.2% to 2,979.79 Sensex down 0.7% to 57,610.70 Australia S&P/ASX 200 down 0.3% to 6,644.99 Kospi down 1.8% to 2,192.07 Brent Futures down 1.5% to $94.71/bbl Gold spot down 0.1% to $1,667.26 U.S. Dollar Index little changed at 113.21 German 10Y yield little changed at 2.30% Euro little changed at $0.9708 Top Overnight News from Bloomberg Record inflation and the danger of winter energy shortages are sinking confidence in the euro-zone economy. As the hard data gradually worsen, the hawks who currently steer ECB policy have only a limited opportunity to deliver more big hikes UK unemployment fell unexpectedly to the lowest since 1974 as people dropped out of the workforce at a record rate. The government said 3.5% of adults were looking for work in the three months through August, down from 3.6% the month before. Economists had expected no change From Japanese pensions and life insurers to foreign governments and US commercial banks, where once they were lining up to get their hands on US government debt, most have now stepped away. And then there’s the Federal Reserve, which a few weeks ago upped the pace that it plans to offload Treasuries from its balance sheet to $60 billion a month Credit Suisse Group AG is the last of 16 banks to face a US class-action lawsuit accusing it of conspiring with others to rig the foreign exchange market A more detailed breakdown courtesy of RanSquawk APAC stocks traded with a negative bias as several markets returned from the long weekend and reacted to the recent bearish themes with tech stocks hit due to the US’s chip tech curbs on China and with global sentiment not helped by the heightened geopolitical concerns after Russia’s missile assault on Ukrainian cities. ASX 200 was indecisive after mixed data and with the index subdued by underperformance in tech and energy. Nikkei 225 declined with the reopening of Japan’s borders overshadowed by tech sector woes which also saw heavy selling pressure on South Korean and Taiwanese chipmakers. Hang Seng and Shanghai Comp. were mixed with notable losses in tech and casino stocks in which the latter suffered after domestic trips in China during the National Day Golden Week holiday fell by 18% Y/Y, while sentiment was also dampened by increased lockdown concerns as China tightened COVID controls ahead of the Communist Party congress including the rollout of mandatory biweekly mass testing in Shanghai. Top Asian News China Securities Daily suggested that China may cut RRR in Q4. People's Daily said China must stick to zero-COVID policy which is sustainable and key to stabilising the economy. China's Xi'an announced on Tuesday to suspend onsite classes for some students amid the COVID-19 flare-ups, other areas including culture venues, tourist attractions and cinemas also suspended services on Tuesday, according to Global Times. PBoC set USD/CNY mid-point at 7.1075 vs exp. 7.1038 (prev. 7.0992) Japanese PM Kishida said the BoJ needed to maintain policy until wages increase, while he urged companies that increase prices to raise pay also and said the government will prepare measures to help companies raise salaries, according to FT. Japanese Finance Minister Suzuki said they are closely watching FX moves with a strong sense of urgency and will respond to excess FX moves, according to Reuters. Japan's MOF top currency official Kanda said they are always ready to take necessary steps against FX volatility and said he can make a decision on FX intervention anywhere even from an aeroplane, according to TBS. Japanese Chief Cabinet Secretary Matsuno said they are closely watching FX moves with a high sense of urgency; to take appropriate steps on excess FX moves, via Reuters. Japan is to draw up economic measures before the end of October, according to NHK. RBI likely sold USD in spot and received forwards via state-run banks, according to traders cited by Reuters. RBNZ Governor Orr said in the Annual Report that there is more work to do and increasing the OCR is the most effective way we can reduce inflation and support maximum sustainable employment over the coming years, consistent with our monetary policy remit. European bourses are once again underwater as the selling pressure from yesterday has bled through into today’s session. Sectors in Europe are mostly softer but Retail is the standout outperformer. Stateside, US futures are also on the backfoot with the e-mini S&P Dec contract dipping below 3600 in a continuation of yesterday’s losses. Top European News Barclaycard UK consumer spending rose 1.8% Y/Y in September which was the slowest pace since February 2021. Germany's government rejected the report about Chancellor Scholz backing joint EU debt for loans to ease the energy crisis and said "such plans are not known in the government", according to a source cited by Reuters. German Chancellor Scholz said Germany will discuss inflation reduction act with the US; there must be no customs war, via Reuters. EU trade commissioner said it is working on a new temporary state aid framework which will allow countries to support firms hit by high energy bills; adds that decoupling from China is not an option for EU companies, via Reuters. UK Chancellor Kwarteng will need to plug a GBP 60bln hole in the public finances with either spending reductions or a tax raid, according to the IFS via the Telegraph. BoE said it intends to purchase index-linked Gilts, effective from Oct 11-14, and announced a temporary pause to corporate bond sales. Linker purchases will act as a backstop to restore order; purchases are time limited. Many pension funds feel that the BoE intervention in gilts market should be extended to October 31st "and possibly beyond", according to the Pension Fund Trade Body cited by Reuters. Brookfield, DigitalBridge Said to Weigh Vantage Stake Bid European Gas Rises on Supply Risks as Russia Escalates War Apollo Makes Quick Gains on CLOs Dumped by UK Pension Funds Credit Suisse Is Final Holdout in FX Rigging Case Going to Trial Discounted Fuel, Grains Make Taliban Boost Trade With Russia FX DXY is firmer on the day with a current intraday high of 113.50 (vs a 112.95 low) G10s are mixed vs the USD with the CAD and AUD the laggards, in-fitting with losses across oil and base metals respectively. USD/JPY held within a 145.86-50 range (vs YTD high of 145.90) following more jawboning from Japanese Chief Cabinet Secretary Matsuno. Fixed Income Schatz and Bund futures both retreated to new intraday lows and the latter is just under Monday’s 135.83 session base, at 135.81. The 10yr UK debt future also recoiled to a deeper Liffe low (92.06) before bouncing and thereby remaining ‘comfortably’ off yesterday’s 91.46 trough. US Treasuries are narrowly mixed and side-lined awaiting the return of cash traders, more Fed speakers and USD 40bln 3 year issuance. Commodities WTI and Brent front-month futures are weaker intraday amid several factors including technicals, a firmer Dollar, alongside further bearish COVID-related headlines emanating from China. Spot gold is relatively flat despite the firmer Dollar, but remains under its 21 DMA (1,674/oz) as the clock ticks down to US CPI on Thursday. LME metals meanwhile are mostly lower with 3M copper softer on the day amid the stronger Buck, sullied risk tone, and with the Chinese COVID restrictions an ongoing tail risk with the metal moving on either side of USD 7,500/t. Iranian State News Agency denied reports of worker strikes at Abadan refinery, according to Reuters. Geopolitics US President Biden and G7 leaders will hold a virtual meeting today to discuss their commitment to support Ukraine, according to the White House. US Democrat Senator Menendez threatened to block US cooperation with Saudi amid its deepening ties with Russia, while he ripped into the decision to cut oil output and effectively accused Saudi of fuelling Russia's war machine, according to Business Insider. Russian Deputy Foreign Minister Ryabkov said direct conflict with the US and NATO is not in Moscow's interests but noted that Russia will take adequate countermeasures in response to the West's growing involvement in the Ukraine conflict, according to RIA. Russian Deputy Foreign Minister said Russia does not threaten anyone with the use of nuclear weapons, via Al Jazeera US Event Calendar 06:00: Sept. SMALL BUSINESS OPTIMISM, 92.1, est. 91.5, prior 91.8 Central Banks 12:00: Fed’s Mester Speaks to Economics Club of New York DB's Jim Reid concludes the overnight wrap It's been another rough 24 hours for markets, with a major European bond selloff after Bloomberg reported that German Chancellor Scholz would support issuing joint EU debt to deal with the energy crisis. At this stage it’s just a report without formal confirmation and we’ll have to see how it might be executed, so we shouldn’t get ahead of ourselves. However, the details from the story suggested that Scholz had signalled an openness to common borrowing at last week’s EU summit in Prague, so long as the money was distributed in the form of loans rather than grants. So perhaps the common borrowing announced during the pandemic will prove to have been the first of many rather than a one-off. If the last decade was all about how Europe/Germany could get away with as little fiscal spending as they could, this decade seems to be all about spending. This continues to change the macro dynamics of the continent completely from where it was, especially with regards bond yields and the depo rate. We should note however, that after Europe closed, Reuters suggested that a German government source rejected the story that Berlin backed such joint EU debt for this purpose. So we'll see if there is any retracement in yields this morning as the initial market reaction was substantial. Yields on 10yr bunds surged +14.3bps on the day (+11bps after the story hit) to close at 2.33%, thus leaving them at their highest closing level since 2011. There were similar moves across the continent, with yields on 10yr OATs up +11.5bps to a post-2012 high of 2.91%. However, the big outperformer were Italian BTPs where yields actually fell on the day following the news, with the spread between 10yr BTPs over bunds down by -21.3bps to 230bps. That was a big change from earlier in the session, when the Italian spread had been on track to close at its widest level since April 2020 as nerves built ahead of Italian draft budget proposals. However it was a case of anything Europe could do, the UK could do worse, as the 10yr Gilt yield soared by +23.6bps on the day to 4.46% after the BoE announced fresh measures (see below) which seemed to scare investors of what might be out there rather than reassured them. The moves were eerily reminiscent of the late-September turmoil after the mini-budget, with rises in yields taking place across all maturities, with the 30yr yield up by an even-larger +28.8bps. It’s clear that LDI trades are still creating some tension in the market. If nominal yield moves weren’t enough for you, the movements in real yields were even more astonishing, with the 10yr real yield up by +64.1bps on the day to close at 1.23%, which is its highest closing level since 2009. In the meantime, sterling (-0.28%) lost ground against the US Dollar for a 4th consecutive session, closing at $1.1055, and implied sterling-dollar volatility over the next month has also been creeping back up to near its levels shortly after the mini-budget. Those movements for gilts came in spite of numerous announcements from UK policymakers yesterday as they sought to deal with the mini-budget’s legacy. First, the Bank of England said that as part of their ongoing intervention to purchase long-dated government gilts, they would increase the maximum auction sizes for this week, which comes ahead of the planned end to the operation on Friday. In addition, they announced the launch of a “Temporary Expanded Collateral Repo Facility”, which is designed to help ease pressures on liability driven investment funds. Second, we heard that the government were bringing forward the Medium-Term Fiscal Plan to October 31 from November 23, which will be published alongside a forecast from the independent OBR. And finally, it was confirmed that James Bowler would be the new Permanent Secretary to the Treasury (the most senior civil servant in the department). Bowler is currently Permanent Secretary at the Department for International Trade but has over 20 years’ experience working in the Treasury, and the appointment was widely reported as a U-turn by PM Truss to reassure markets. That’s because Truss had pledged when running for PM that she would combat the “Treasury orthodoxy”, but has instead opted for someone with lengthy experience in the department. Over in the US, Treasury markets weren’t actually open given the Columbus Day holiday, but Fed funds futures showed that investors were continuing to price out the pivot speculation from early last week, with the rate priced in by December 2023 up by a further +6bps to 4.46% over the last 24 hours and up from 4% at the pivot lows a week ago. In Asia, yields on the 30-year UST (+10.38 bps) rose to 3.95%, the highest since 2014, whereas the 10yr yield (+11bps) has broken through the 4.0% threshold as we go to press. This all follows a fresh set of comments from Fed officials, including Chicago Fed President Evans, who said that “I see the nominal funds rate rising to a bit above 4.5% early next year and then remaining at this level for some time while we assess how our policy adjustments are affecting the economy”. Vice Chair Brainard spoke late in the session but didn't really move the needle too much but her comment that the Fed should be cautious seemed to lean a little dovish even though she covered both sides of the argument. Henry in my team wrote about the five "Fed pivot" trades that markets have tried to encourage in the last few months in his weekly "Mapping Markets" yesterday. See here for more. Whilst bonds were having another bad day, there wasn’t much respite for equities either, with the S&P 500 (-0.75%) moving lower for a 4th consecutive session, which leaves it less than 1% away from its closing low for the year at end-September. The 6% rally in the first 2 and a bit days of the quarter seems a lifetime away rather than 3 business days ago. The more interest-sensitive tech stocks bore the brunt of the declines, with the NASDAQ down -1.04% to close at its lowest level since July 2020, whilst the FANG+ index (-1.17%) of megacap tech stocks has now shed around -43% since its all-time peak back in November 2021. Backin Europe the tone was also a fairly negative one, with the STOXX 600 (-0.40%) losing ground for a 4th day in a row as well. Asian equity markets are mostly trading lower this morning as concerns continue about the Fed’s tightening cycle alongside Washington’s semiconductor export controls on China. As I type, the Nikkei (-2.34%) and the Kospi (-2.29%) are sharply lower after resuming trading following a holiday with the Hang Seng (-1.43%) also sliding. Bucking the trend are Chinese equities with the Shanghai Composite (+0.40%) and the CSI (+0.49%) both moving higher. However, concerns over rising Covid-19 cases in China are still hovering in the background. In overnight trading, US stock futures point to further losses with contracts tied to the S&P 500 (-0.45%) and NASDAQ 100 (-0.40%) both trading in negative territory. Early morning data showed that Japan’s current account surplus (+58.9 billion yen) shrank to its smallest amount on record for the month of August as import prices surged compared to July’s surplus of +229.0 billion yen. In geopolitical news, the G-7 nations have called for an emergency meeting (videoconference) today to discuss the escalating war in Ukraine in the wake of Russia's revenge attacks over the last 24 hours. In addition to this, the G7 will also discuss energy issues in an attempt to bring down gas prices by creating a buyer’s alliance. To the day ahead now, and data releases include UK labour market data for August and September, Italy’s industrial production for August, as well as the NFIB’s small business optimism index from the US for September. From central banks, we’ll hear from BoE Governor Bailey and Deputy Governor Cunliffe, the ECB’s Lane and Villeroy, as well the Fed’s Mester. Finally, the IMF will be publishing their latest World Economic Outlook. Tyler Durden Tue, 10/11/2022 - 08:07.....»»

Category: worldSource: nytOct 11th, 2022

A student-loan company that took over public servants" accounts is involved in one of the first major lawsuits against Biden"s debt cancellation

Six Republican-led states filed a lawsuit against Biden's student-debt cancellation in Missouri, which houses loan company MOHELA. President Joe BidenDrew Angerer/Getty Images Six GOP-led states filed a Missouri-based lawsuit against Biden's student-loan forgiveness. Missouri houses student-loan company MOHELA, which recently took over some federal borrowers' accounts. The lawsuit argued MOHELA faces a loss of revenue due to the debt relief.  As a student-loan company works to take over millions of new borrower accounts, it's also playing a role in suing President Joe Biden's recently announced student-loan forgiveness.Last week, six GOP-led states filed a lawsuit in Missouri against Biden's up to $20,000 in federal debt cancellation announcement — a state that houses student-loan company MOHELA. Long before Biden announced any broad debt relief, the student-loan industry was facing a shakeup as three loan companies announced they would be ending their federal contracts, and that required the transfer of millions of accounts over to new entities that would service the loans.FedLoan Servicing, which previously held loans within the Public Service Loan Forgiveness (PSLF) program, was one of the companies ending its federal servicing, and those accounts were transferred over to MOHELA — which appears to be the focus of the GOP-led lawsuit. Per the filing, the states argued that the loan servicer is facing a "number of ongoing financial harms" to its business, referring specifically to the Federal Family Education Loan (FFEL) program which is a privately-held loan guaranteed by the government and would not qualify for Biden's debt relief without consolidation into the direct loan program.The lawsuit argued that pushing FFEL borrowers to consolidate would result in a loss of revenue for MOHELA. In response to those claims, Biden later decided that borrowers within that program would not be able to qualify for his one-time student-loan forgiveness. While that decision did make it more difficult for the GOP attorneys general to prevail, they also argued in the suit that canceling direct student loans — federal loans that qualify for Biden's relief plan — will also harm MOHELA's business operations. "MOHELA faces the imminent loss of revenue in its role as a servicer of DLP (Direct Loan Program) loans," the lawsuit said. "MOHELA's revenue as a servicer of DLP loans is a function of the number of accounts it services. So when student loan balances go to zero, as they will en masse under the Mass Debt Cancellation, MOHELA will lose the revenue from servicing those loans."Leading up to Biden's announcement, there was speculation regarding the entities, or individuals, that would pursue legal action on the debt relief. Jack Remondi, the CEO of major student-loan company Navient, said last month that he wouldn't sue the administration even though his company "clearly has standing." And Abby Shafroth, staff attorney at the National Consumer Law Center, told Insider that it would be difficult for loan companies to sue given they make their money through contracts with the federal government.For now, the lawsuit is set for a hearing in front of a federal judge this month to determine next steps — but advocates and Democratic lawmakers are confident nothing will come of it."This suit is just the latest chapter in a long history of student loan companies like MOHELA and their Republican allies cheating people with student debt out of their rights," Mike Pierce, executive director of advocacy group Student Borrower Protection Center, said in a statement."Governments have given billions of dollars to companies like MOHELA since they were created by state legislatures decades ago," Pierce added. "This must end now. As President Biden cancels student debt for tens of millions, state governments need to pull the plug on their failed experiments with student lending and unwind student loan companies like MOHELA."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 4th, 2022

Google Glass — which aimed to revolutionize wearable tech — was a "carnival of failure" according to the author of a dishy new book on the early 2010s non-phenom

A new book on Google Glass chronicles the development of the wearable device that revolutionized AR technology, tracking its meteoric rise and fizzling end. Cracked and broken glasses in front of the google company logo.Thomas Trutschel/Photothek via Getty Images A new book, "Google Glass: Remember the Internet no. 3" chronicles the development of the wearable device. Author Quinn Myers described Google Glass' debut as a "carnival of failure." Despite significant hype from developers and fans, Google Glass never made it to the commercial market. Google Glass, the early 2010s would-be phenom that never made it to market, made a lasting impact on augmented reality technology — and its public perception — despite the device's lackluster launch and eventual discontinuation.The wearable, computerized glasses aimed to revolutionize personal tech and replace cell phones, but its public debut was a "carnival of failure," according to Quinn Myers, author of "Google Glass: Remember the Internet no. 3."Released on September 20, the book chronicles the creation of the wearable device through a series of interviews with its developers, fans, and critics, tracking its meteoric rise and fizzling end. While the devices have been largely relegated to punchlines of jokes about tech bros, Myers argues the Google Glass legacy offers lessons on privacy, AR technology, and corporate responsibility."Dunking on Glass is not just fun and easy: it's our only hope if we want a future where corporations can still feel shame and where our tech overlords can still be persuaded to help solve our most dire problems instead of creating new ones that destroy us all," Myers writes in the conclusion his book. Though Myers condemns the attempt Google made to "reprogram the entire human race" using Glass, he argues the devices may have succeeded were it not for key flaws — not just in the technology and design, which have been mercilessly mocked for years — but because of poor marketing that exacerbated the divide between the 'haves' and 'have nots.'Google did not respond to Insider's request for comment.Headaches, both literal and figurativeAnnounced on April 4, 2012, the ambitious project aimed to allow users to stay connected "through notifications about what's going on in the digital world, and being able to socially share your experiences," Sebastian Thrun, who founded the Google X research lab responsible for Google Glass and other projects like self-driving cars, said in an interview for Myers' book. A team of Google engineers sought to develop the technology needed to achieve that by utilizing augmented reality to project information through the lenses of glasses, allowing users to gesture and speak to control the device. Early iterations, some so large they had to be stored in backpacks, suffered from issues like overheating and short battery life. Even as the tech advanced, Glass users reported headaches, dizziness, and eye strain because they were forced to look toward unnatural angles to use the device. Brin wearing Google Glass in 2013.Jeff Chiu/AP"When we started, I was always excited about augmented reality, and a lot of the vision that we had for it involved that," Babak Parviz, a director at Google X who formerly lead the Glass team and is credited with creating the headset, said in an interview for Myers' book, "But very quickly it became clear that the state of the technology was not there for us to do it."Technology constraints also contributed to Glass' clunky look, which, despite bringing in a design specialist to help streamline the specs, remained unfashionable. Engineering problems around head shape, the eye box, and optics factories left it impossible to improve at the time, Myers wrote. While the early-development technology limited the utility for Google Glass upon its debut — it could perform basic searches, display map directions, send and receive messages, take pictures and record short video clips — the avid fanbase behind Google's device may have carried it through the early years of debugging and troubleshooting if Glass had not also faced tremendous public backlash and what ultimately proved to be an insurmountable marketing problem. From "Explorers" to "Glassholes"In its initial announcement about the prototype device, Google released a video titled "One Day" which teased what users may be able to do while wearing Glass — showing a man scheduling his day, responding to messages, and navigating his errands using his glasses. The video immediately attracted viral attention from excited would-be consumers.Two months later, at the June Google I/O conference in 2012, the Project Glass team demonstrated the power of Glass by livestreaming the view a parachuter had while jumping out of a blimp. The devices were featured on the runway of New York Fashion Week in September 2012. That October, TIME named Glass its "Invention of the Year." Google co-founder Sergey Brin and designers Diane Von Furstenberg and Yvan Mispelaere walk the runway at the Diane Von Furstenberg show during Spring 2013 Mercedes-Benz Fashion Week at The Theatre at Lincoln Center on September 9, 2012 in New York City.Jason Kempin/WireImageGlass was wildly anticipated from the moment it was announced and inspired fervor for its futuristic feeling interface, promising an integrated user experience that would be a major advancement in the next generation of wearable technology — two years before the Apple Watch ushered in a wave of people who prefer their accessories computerized.That anticipation kept Glass in the headlines through its public release. In early 2013, Google hosted a Twitter competition encouraging users to submit what they'd do #IfIHadGlass in hopes of winning a chance to buy a pair of Glass for a $1,500 pricetag, plus travel expenses to pick it up and be trained to use the device in Los Angeles, San Francisco, or New York.The hefty expense, coupled with an early adopter audience that consisted largely of tech developers and select celebrities, began to shift the public perception of Glass from an exciting innovation for the masses to one which underscored a class divide."I believe [Glass] became a reference point of wealth, of being special, and I could feel that— because I would wear it every day and bring it to meetings, or go dancing, go to a party," Thrun said in Myers' book. "I was celebrated like a rock star because of it, [which] was shocking in the sense that I'm a geek. I'm in the dork category myself...but it had this effect on people."As more people began to explore the world wearing their Glass devices, spotting a pair in the wild became a bit of a digital game. The Tumblr blog "White Men Wearing Google Glass" became popular, documenting "in the wild" encounters with Glass users, and the portmanteau "Glasshole" was popularized to describe users more engaged with their device than reality."Glasshole" quickly eclipsed Google's preferred label of "Explorers" for users of the Glass technology, further damaging its reputation. US blogger Robert Scoble presents the Google Glass on April 24, 2013 at the "NEXT Berlin" conference in Berlin.Ole Spata/DPA/AFP via Getty ImagesAlready most heavily adopted by engineers and computer scientists, the image of the Glass user got progressively less cool — with a viral image taken from inside a shower by a Glass user exemplifying the product's image problem. "The whole episode was such a carnival of failure that it's honestly hard to say, but I think you could argue the leading reason Glass failed was Google's marketing," Myers wrote in a Reddit thread discussing his book. The device would have been better marketed as a sport-utility camera like a Go-Pro, Myers wrote, which developers realized too late."Instead, Google tried to market Glass as a piece of high fashion. Their argument was that if they wanted people to wear it all day, they had to convince the public that ~cool and hot people~ wear Glass," Myers wrote. "So they strapped it onto runway models, celebs, and slapped an exorbitant price tag on it to make it seem exclusive. Unfortunately, the only people who took the bait were rich white dudes, and everything else came crashing down when people started realizing Glass couldn't actually do what Google promised it could do in their now-infamous "One Day" YouTube video."Government surveillance and anti-Glass "hate crimes"Even if Google had been able to overcome some of the concerns around its Glass audience — either by lowering the price point or making them widely available to a broader consumer audience — another blow to its public perception was dealt in June 2013.  That summer, National Security Agency contractor Edward Snowden revealed — through a series of whistleblowing leaks — that the government accessed and collected data from Google and other tech companies such as Facebook with a program called PRISM. While there had been some rumblings about privacy worries among non-Glass users prior to the PRISM revelations, Snowden's information brought to a head the concerns about covert recordings made by users and whether the government may be able to access views seen through Glass devices. Police departments eyed the technology and the device's potential as a surveillance tool became more obvious and worrying to the public."If PRISM hadn't happened, maybe the privacy issues may have passed," Myers told Insider. "I always come back to Google Home and Alexa and when those first came out people were skeptical and didn't trust it, but now everyone has Ring doorbells and smart speakers." Non-Glass users began targeting those wearing the devices in public, shaming and sometimes attacking them for wearing the potentially privacy-violating glasses in public. Glass users, who had already developed a reputation for being out of touch, lamented the "discrimination" they faced for wearing their gadgets in public.One woman, in a segment on The Daily Show, described her experience as a "hate crime." "We hadn't fully scoped out the very strong backlash to the camera in private spaces," Thrun said in Myers' book. "It was kind of funny because internally, our conversation about privacy was that the microphone is much worse than the camera. If there's one thing you want to hide it's what you say rather than how you look, but the public was very concerned about the camera."The general harassment and bombardment of questions from strangers further diminished the Glass experience for Explorers once passionate about their glasses. Combined with the existing technical issues and limited functionality, many stopped wearing them entirely."A good number of Explorers stopped wearing [Glass] in 2013/4-ish when it became too much of a hassle to go out in public with them, or because it became clear they weren't going to catch on," Myers wrote. "A lot of them just realized they paid $1500 for Glass and then continued having to do beta-testing work for Google (sending bug reports, etc.) for free, which irked them to the point of quitting on the tech.""We must never stop dunking on Google Glass"Ultimately, Glass in its earliest iterations could not overcome its technical and marketing problems and the device stopped being available to the public in 2015. In 2020, Google Glass Explorer Edition ceased to be supported by new software updates.Though the gadget wasn't yet ready for widespread commercial adoption at the time of its launch, Glass pioneered "OK Google" voice commands, which have since become commonplace — as well as influencing the development of augmented reality technology and popularizing wearable tech. The year Glass stopped being available for public purchase, Snapchat launched video-capturing sunglasses to be used with its social app. Microsoft launched its mixed-reality headset HoloLens in 2016 and two years later, the US Army chose the HoloLens technology for a $480 million contract to create headsets for its troops."A lot of what's happening with AR now would not be around were it not for the major, major breakthroughs made by the Glass team," Myers told Insider. "A lot of what's around now, from a computing power standpoint and such a small camera you can wear on your face — a lot of those little things that've been figured out, Glass paved the way for a lot of that." An attendee wearing Google Glass works on a computer during Google I/O Developers Conference at Moscone Center West on June 25, 2014 in San Francisco, California.Stephen Lam/Getty ImagesAs augmented reality technology becomes mainstream, dissecting the original concerns surrounding Glass is more important than ever, Myers argued, because it was the public backlash that prevented the potentially dangerous unfinished technology from being unleashed.Glass, Myers told Insider, had an insidious way of influencing social interactions that developers simply "didn't consider" when creating the tech that he thinks could have caused permanent changes to people's interactions, had the tech caught on the way Google intended."Imagine if everyone wore cameras all the time, everyone would just tense up," Myers told Insider, adding that Glass was extremely disruptive of existing social norms, like when people gather to take a picture together, even with very few users. "There'd be less natural human interaction. If there were facial recognition — which may be a weird tech nightmare we should pay attention to — you'd immediately know everything about someone instead of having the magic and mystery of finding all that out."With companies like Meta pioneering even more AR and VR advancements, Myers told Insider it's important to remind companies of the public derision faced by Glass to keep the corporations in line and influence them to help solve social problems instead of creating new ones."We must never stop dunking on Google Glass," Myers writes at the end of his book. "We must never forget the most spectacular public failure of one of America's most trusted and respected tech titans. We must never stop telling the story of how Google thought they could reprogram the entire human race using dorky goggles, skydivers, and a fashion show."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 1st, 2022

The White House calls a lawsuit to block student loan forgiveness "baseless" because anyone can opt out of relief

"The lawsuit that was announced today was a teed up, opportunistic challenge against the student debt cancellation plan," one expert said. President Joe Biden delivered remarks from Wilkes Barre, Pennsylvania on Tuesday promoting his Safer America Plan.AP Photo/Evan Vucci A conservative legal organization sued the Education Department over Biden's debt relief plan.  The White House said that suit's claims are "baseless" in a statement to Insider.  The suit likely has no standing, experts told Insider, because the plaintiff can opt out of relief. A conservative group is challenging the legality of President Biden's impending cancellation of student debt for millions of borrowers, and the White House categorically denied all of its claims.   The Pacific Legal Foundation, a conservative nonprofit legal organization, announced on Tuesday that it had filed a suit against the Department of Education because of Biden's relief plan, a move that comes after rumblings from conservative business groups and attorneys general that they would do so. It's the first major lawsuit against the Biden administration's announcement that it would forgive up to $20,000 in student debt for federal borrowers making under $125,000.The lawsuit claims that the executive branch lacks the authority to create a forgiveness policy, saying that it is solely within Congress's power to create laws. The White House came out strongly against the Pacific Legal Foundation's assertions. "The claim is baseless for a simple reason: No one will be forced to get debt relief. Anyone who does not want debt relief can choose to opt out," Abdullah Hassan, White House assistant press secretary, said in a statement to Insider. "Why would this group bring this baseless claim? Because opponents of the debt relief plan are trying anything they can to stop this program that will provide needed relief to working families."The White House has said that over 40 million people are likely to be eligible for forgiveness under Biden's plan, and the first cancellations are expected to take place before the end of the year. The plan will cancel up to $10,000 in debt for federal borrowers who earn less than $125,000 annually, and up to $20,000 for Pell Grant recipients. Republican politicians have long opposed any relief plan from Biden, with attorney generals from states like Texas, Missouri, and Arizona confirming recently that they're considering attempts to block Biden's plan. Congressional Republicans are upset too. The Pacific Legal Foundation's plaintiff, Frank Garrison, isn't pleased with the relief either. Garrison, a public interest attorney at the legal organization, is currently paying off his loan debt through the Public Service Loan Forgiveness (PSLF) program. He expects to see full forgiveness in about four years.However, Garrison is now claiming that because he qualifies for $20,000 in relief, he will be facing a new tax burden from his home state of Indiana."The lawsuit that was announced today was a teed up, opportunistic challenge against the student debt cancellation plan, where they attempted to find the needle in the haystack," Abby Shafroth, a staff attorney at the National Consumer Law Center, told Insider. "They tried to find the one person who might actually be harmed by the student debt cancellation plan that promises to deliver relief to up to 43 million working and middle class Americans."Luke Herrine, an assistant professor of law at the University of Alabama who focuses on the legality of debt cancellation, told Insider in an email that Garrison "likely does not have standing to sue." That's because the basis of the argument — the new tax bill — hasn't happened and may not happen, especially if Garrison can opt out."The big problem with his whole claim that cuts to the heart of it is the federal government is gonna have an opt out process, so that no one who wants to leave their student debt in place, will have to have it canceled," Shafroth said.Read the original article on Business Insider.....»»

Category: personnelSource: nytSep 27th, 2022

Multipolar World Order – Part 1

Multipolar World Order – Part 1 Authored by Iain Davis via, Russia’s war with Ukraine is first and foremost a tragedy for the people of both countries, especially those who live—and die—in the battle zones. The priority for humanity, though apparently not for the political class, is to encourage Moscow and Kyiv to stop killing men, women and children and negotiate a peace deal. Beyond the immediate confines of the conflict, the war is also seen by some as representative of an alleged clash between great powers and, perhaps, between civilisations. All wars are momentous, but the ramifications of Ukrainian war are already global. Consequently, there is a perception that it is the focal point of a confrontation between two distinct models of global governance. The NATO-led alliance of the Western nations continues to push the unipolar, G7, international rules-based order (IRBO). It is opposed, some say, by the Russian and Chinese-led BRICS and the G20-based multipolar world order. In this 3 part series we will explore these issues and consider if it is tenable to place our faith in the emerging multipolar world order. There are very few redeeming features of the unipolar world order, that’s for sure. It is a system that overwhelmingly serves capital and few people other than a “parasite class” of stakeholder capitalist eugenicists. This has led many disaffected Westerners to invest their hopes in the promise of the multipolar world order: Many have increasingly come to terms with the reality that today’s multipolar system led by Russia and China has premised itself upon the defense of international law and national sovereignty as outlined in the UN Charter. [. . .] Putin and Xi Jinping have [. . .] made their choice to stand for win-win cooperation over Hobbesian Zero Sum thinking. [. . .] [T]heir entire strategy is premised upon the UN Charter. If only that were so! Unfortunately, it doesn’t appear to be the case. But even if it were true, Putin and Xi Jinping basing “their entire strategy” upon the UN Charter, would be cause for concern, not relief. For the globalist forces that see nation-states as squares on the grand chessboard and that regard leaders like Putin, Biden and Xi Jinping as accomplices, the multipolar world order is manna from heaven. They have spent more than a century trying to centralise global power. The power of individual nation-states at least presents the possibility of some decentralisation. The multipolar world order finally ends all national sovereignty and delivers true global governance. World Order We need to distinguish between the ideological concept of “world order” and the reality. This will help us identify where “world order” is an artificially imposed construct. Authoritarian power, wielded over populations, territory and resources, restricted by physical and political geography, dictates the “world order.” The present order is largely the product of hard-nosed geopolitics, but it also reflects the various attempts to impose a global order. The struggle to manage and mitigate the consequences of geopolitics is evident in the history of international relations. For nearly 500 years nation-states have sought to co-exist as sovereign entities. Numerous systems have been devised to seize control of what would otherwise be anarchy. It is very much to the detriment of humanity that anarchy has not been allowed to flourish. In 1648, the two bilateral treaties that formed the Peace of Westphalia concluded the 30 Years War (or Wars). Those negotiated settlements arguably established the precept of the territorial sovereignty within the borders of the nation-state. This reduced, but did not end, the centralised authoritarian power of the Holy Roman Empire (HRE). Britannica notes: The Peace of Westphalia recognized the full territorial sovereignty of the member states of the empire. This isn’t entirely accurate. That so-called “full territorial sovereignty” delineated regional power within Europe and the HRE, but full sovereignty wasn’t established. The Westphalian treaties created hundreds of principalities that were formerly controlled by the central legislature of the HRE, the Diet. These new, effectively federalised principalities still paid taxes to the emperor and, crucially, religious observance remained a matter for the empire to decide. The treaties also consolidated the regional power of the Danish, Swedish, and French states but the Empire itself remained intact and dominant. It is more accurate to say that the Peace of Westphalia somewhat curtailed the authoritarian power of the HRE and defined the physical borders of some nation states. During the 20th century, this led to the popular interpretation of the nation-state as a bulwark against international hegemonic power, despite that never having been entirely true. Consequently, the so-called “Westphalian model” is largely based upon a myth. It represents an idealised version of the world order, suggesting how it could operate rather than describing how it does. Signing of the Peace of Westphalia, in Münster 1648, painting by Gerard Ter Borch If nation-states really were sovereign and if their territorial integrity were genuinely respected, then the Westphalian world order would be pure anarchy. This is the ideal upon which the UN is supposedly founded because, contrary to another ubiquitous popular myth, anarchy does not mean “chaos.” Quite the opposite. Anarchy is exemplified by Article 2.1 of the UN Charter: The Organization is based on the principle of the sovereign equality of all its Members. The word “anarchy” is an abstraction of the classical Greek “anarkhos,” meaning “rulerless.” This is derived from the privative prefix “an” (without) in conjunction with “arkhos” (leader or ruler). Literally translated, “anarchy” means “without rulers”—what the UN calls “sovereign equality.” A Westphalian world order of sovereign nation-states, each observing the “equality” of all others while adhering to the non-aggression principle, is a system of global, political anarchy. Unfortunately, that is not the way the current UN “world order” functions, nor has there ever been any attempt to impose such an order. What a shame. Within the League of Nations and subsequent UN system of practical “world order,”—a world order allegedly built upon the sovereignty of nations—equality exists in theory only. Through empire, colonialism, neocolonialism—that is, through economic, military, financial and monetary conquest, coupled with the debt obligations imposed upon targeted nations—global powers have always been able to dominate and control lesser ones. National governments, if defined in purely political terms, have never been the only source of authority behind the efforts to construct world order. As revealed by Antony C. Sutton and others, private corporate power has aided national governments in shaping “world order.” Neither Hitler’s rise to power nor the Bolshevik Revolution would have occurred as they did, if at all, without the guidance of the Wall Street financiers. The bankers’ global financial institutions and extensive international espionage networks were instrumental in shifting global political power. These private-sector “partners” of government are the “stakeholders” we constantly hear about today. The most powerful among them are fully engaged in “the game” described by Zbigniew Brzezinski in The Grand Chessboard. Brzezinski recognised that the continental landmass of Eurasia was the key to genuine global hegemony: This huge, oddly shaped Eurasian chess board—extending from Lisbon to Vladivostok—provides the setting for “the game.” [. . .] [I]f the middle space rebuffs the West, becomes an assertive single entity [. . .] then America’s primacy in Eurasia shrinks dramatically. [. . .] That mega-continent is just too large, too populous, culturally too varied, and composed of too many historically ambitious and politically energetic states to be compliant toward even the most economically successful and politically pre-eminent global power. [. . .] Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire. [. . .] [I]t would then become a predominantly Asian imperial state. The “unipolar world order” favoured by the Western powers, often referred to as the “international rules-based order” or the “international rules-based system,” is another attempt to impose order. This “unipolar” model enables the US and its European partners to exploit the UN system to claim legitimacy for their games of empire. Through it, the transatlantic alliance has used its economic, military and financial power to try to establish global hegemony. In 2016, Stewart Patrick, writing for the US Council on Foreign Relations (CFR), a foreign policy think tank, published World Order: What, Exactly, are the Rules? He described the post-WWII “international rules-based order” (IRBO): What sets the post-1945 Western order apart is that it was shaped overwhelmingly by a single power [a unipolarity], the United States. Operating within the broader context of strategic bipolarity, it constructed, managed, and defended the regimes of the capitalist world economy. [. . .] In the trade sphere, the hegemon presses for liberalization and maintains an open market; in the monetary sphere, it supplies a freely convertible international currency, manages exchange rates, provides liquidity, and serves as a lender of last resort; and in the financial sphere, it serves as a source of international investment and development. The idea that the aggressive market acquisition of crony capitalism somehow represents the “open markets” of the “capitalist world economy” is risible. It is about as far removed from free market capitalism as it is possible to be. Under crony capitalism, the US dollar, as the preferred global reserve currency, is not “freely convertible.” Exchange rates are manipulated and liquidity is debt for nearly everyone except the lender. “Investment and development” by the hegemon means more profits and control for the hegemon. The notion that a political leader, or anyone for that matter, is entirely bad or good, is puerile. The same consideration can be given to nation-states, political systems or even models of world order. The character of a human being, a nation or a system of global governance is better judged by their or its totality of actions. Whatever we consider to be the source of “good” and “evil,” it exists in all of us at either ends of a spectrum. Some people exhibit extreme levels of psychopathy, which can lead them to commit acts that are judged to be “evil.” But even Hitler, for example, showed physical courage, devotion, compassion for some, and other qualities we might consider “good.” Nation-states and global governance structures, though immensely complex, are formed and led by people. They are influenced by a multitude of forces. Given the added complications of chance and unforeseen events, it is unrealistic to expect any form of “order” to be either entirely good or entirely bad. That being said, if that “order” is iniquitous and causes appreciable harm to people, then it is important to identify to whom that “order” provides advantage. Their potential individual and collective guilt should be investigated. This does not imply that those who benefit are automatically culpable, nor that they are “bad” or “evil,” though they may be, only that they have a conflict of interests in maintaining their “order” despite the harm it causes. Equally, where systemic harm is evident, it is irrational to absolve the actions of the people who lead and benefit from that system without first ruling out their possible guilt. Since WWII, millions of innocents have been murdered by the US, its international allies and its corporate partners, all of whom have thrown their military, economic and financial weight around the world. The Western “parasite class” has sought to assert its IRBO by any means necessary— sanctions, debt slavery or outright slavery, physical, economic or psychological warfare. The grasping desire for more power and control has exposed the very worst of human nature. Repeatedly and ad nauseam. Of course, resistance to this kind of global tyranny is understandable. The question is: Does imposition of the multipolar model offer anything different? Signing the UN Charter – 1948 Oligarchy Most recently, the “unipolar world order” has been embodied by the World Economic Forum’s inappropriately named Great Reset. It is so malignant and forbidding that some consider the emerging “multipolar world order” salvation. They have even heaped praise upon the likely leaders of the new multipolar world: It is [. . .] strength of purpose and character that has defined Putin’s two decades in power. [. . .] Russia is committed to the process of finding solutions to all people benefiting from the future, not just a few thousand holier-than-thou oligarchs. [. . .] Together [Russia and China] told the WEF to stuff the Great Reset back into the hole in which it was conceived. [. . .] Putin told Klaus Schwab and the WEF that their entire idea of the Great Reset is not only doomed to failure but runs counter to everything modern leadership should be pursuing. Sadly, it seems this hope is also misplaced. While Putin did much to rid Russia of the CIA-run, Western-backed oligarchs who were systematically destroying the Russian Federation during the 1990s, they have subsequently been replaced by another band of oligarchs with closer links to the current Russian government. Something we will explore in Part 3. Yes, it is certainly true that the Russian government, led by Putin and his power bloc, has improved the incomes and life opportunities for the majority of Russians. Putin’s government has also significantly reduced chronic poverty in Russia over the last two decades. Wealth in Russia, measured as the market value of financial and non-financial assets, has remained concentrated in the hands of the top 1% of the population. This pooling of wealth among the top percentile is itself stratified and is overwhelmingly held by the top 1% of the 1%. For example, in 2017, 56% of Russian wealth was controlled by 1% of the population. The pseudopandemic of 2020–2022 particularly benefitted Russian billionnaires—as it did the billionaires of every other developed economy. According to the Credit Suisse Global Wealth Report 2021, wealth inequality in Russia, measured using the Gini coefficient, was 87.8 in 2020. The only other major economy with a greater disparity between the wealthy and the rest of the population was Brazil. Just behind Brazil and Russia on the wealth inequality scale was the US, whose Gini coefficient stood at 85. In terms of wealth concentration however, the situation in Russia was the worst by a considerable margin. In 2020 the top 1% owned 58.2% of Russia’s wealth. This was more than 8 percentage points higher than Brazil’s wealth concentration, and significantly worse than wealth concentration in the US, which stood at 35.2% in 2020. Such disproportionate wealth distribution is conducive to creating and empowering oligarchs. But wealth alone doesn’t determine whether one is an oligarch. Wealth needs to be converted into political power for the term “oligarch” to be applicable. An oligarchy is defined as “a form of government in which supreme power is vested in a small exclusive class.” Members of this dominant class are installed through a variety of mechanisms. The British establishment, and particularly its political class, is dominated by men and women who were educated at Eton, Roedean, Harrow and St. Pauls, etc. This “small exclusive class” arguably constitutes a British oligarchy. The UK’s new Prime Minister, Liz Truss, has been heralded by some because she is not a graduate of one of these select public schools. Educational privilege aside, though, the use of the word “oligarch” in the West more commonly refers to an internationalist class of globalists whose individual wealth sets them apart and who use that wealth to influence policy decisions. Bill Gates is a prime example of an oligarch. The former advisor to the UK Prime Minister, Dominic Cummings, said as much during his testimony to a parliamentary committee on May 2021 (go to 14:02:35). As Cummings put it, Bill Gates and “that kind of network” had directed the UK government’s response to the supposed COVID-19 pandemic. Gates’ immense wealth has bought him direct access to political power beyond national borders. He has no public mandate in either the US or the UK. He is an oligarch—one of the more well known but far from the only one. CFR member David Rothkopf described these people as a “Superclass” with the ability to “influence the lives of millions across borders on a regular basis.” They do this, he said, by using their globalist “networks.” Those networks, as described by Antony C. Sutton, Dominic Cummings and others, act as “the force multiplier in any kind of power structure.” This “small exclusive class” use their wealth to control resources and thus policy. Political decisions, policy, court rulings and more are made at their behest. This point was highlighted in the joint letter sent by the Attorneys General (AGs) of 19 US states to BlackRock CEO Larry Fink. The AGs observed that BlackRock was essentially using its investment strategy to pursue a political agenda: The Senators elected by the citizens of this country determine which international agreements have the force of law, not BlackRock. Their letter describes the theoretical model of representative democracy. Representative democracy is not a true democracy—which decentralises political power to the individual citizen—but is rather a system designed to centralise political control and authority. Inevitably, “representative democracy” leads to the consolidation of power in the hands of the so-called “Superclass” described by Rothkopf. There is nothing “super” about them. They are ordinary people who have acquired wealth primarily through conquest, usury, market rigging, political manipulation and slavery. “Parasite class” is a more befitting description. Not only do global investment firms like BlackRock, Vanguard and State Street use their immense resources to steer public policy, but their major shareholders include the very oligarchs who, via their contribution to various think tanks, create the global political agendas that determine policy in the first place. There is no space in this system of alleged “world order” for any genuine democratic oversight. As we shall see in Part 3, the levers of control are exerted to achieve exactly the same effect in Russia and China. Both countries have a gaggle of oligarchs whose objectives are firmly aligned with the WEF’s Great Reset agenda. They too work with their national government “partners” to ensure that they all arrive at the “right” policy decisions. US President Joe Biden, left, and CFR President Richard N. Haass, right. The United Nations’ Model of National Sovereignty Any bloc of nations that bids for dominance within the United Nations is seeking global hegemony. The UN enables global governance and centralises global political power and authority. In so doing, the UN empowers the international oligarchy. As noted previously, Article 2 of the United Nations Charter declares that the UN is “based on the principle of the sovereign equality of all its Members.” The Charter then goes on to list the numerous ways in which nation-states are not equal. It also clarifies how they are all subservient to the UN Security Council. Despite all the UN’s claims of lofty principles—respect for national sovereignty and for alleged human rights—Article 2 declares that no nation-state can receive any assistance from another as long as the UN Security Council is forcing that nation-state to comply with its edicts. Even non-member states must abide by the Charter, whether they like it or not, by decree of the United Nations. The UN Charter is a paradox. Article 2.7 asserts that “nothing in the Charter” permits the UN to infringe the sovereignty of a nation-state—except when it does so through UN “enforcement measures.” The Charter states, apparently without reason, that all nation-states are “equal.” However, some nation-states are empowered by the Charter to be far more equal than others. While the UN’s General Assembly is supposedly a decision-making forum comprised of “equal” sovereign nations, Article 11 affords the General Assembly only the power to discuss “the general principles of co-operation.” In other words, it has no power to make any significant decisions. Article 12 dictates that the General Assembly can only resolve disputes if instructed to do so by the Security Council. The most important function of the UN, “the maintenance of international peace and security,” can only be dealt with by the Security Council. What the other members of the General Assembly think about the Security Council’s global “security” decisions is a practical irrelevance. Article 23 lays out which nation-states form the Security Council: The Security Council shall consist of fifteen Members of the United Nations. The Republic of China, France, the Union of Soviet Socialist Republics [Russian Federation], the United Kingdom of Great Britain and Northern Ireland, and the United States of America shall be permanent members of the Security Council. The General Assembly shall elect ten other Members of the United Nations to be non-permanent members of the Security Council. [. . .] The non-permanent members of the Security Council shall be elected for a term of two years. The General Assembly is allowed to elect “non-permanent” members to the Security Council based upon criteria stipulated by the Security Council. Currently the “non-permanent” members are Albania, Brazil, Gabon, Ghana, India, Ireland, Kenya, Mexico, Norway and the United Arab Emirates. Article 24 proclaims that the Security Council has “primary responsibility for the maintenance of international peace and security” and that all other nations agree that “the Security Council acts on their behalf.” The Security Council investigates and defines all alleged threats and recommends the procedures and adjustments for the supposed remedy. The Security Council dictates what further action, such as sanctions or the use of military force, shall be taken against any nation-state it considers to be a problem. Article 27 decrees that at least 9 of the 15 member states must be in agreement for a Security Council resolution to be enforced. All of the 5 permanent members must concur, and each has the power of veto. Any Security Council member, including permanent members, shall be excluded from the vote or use of its veto if they are party to the dispute in question. UN member states, by virtue of agreeing to the Charter, must provide armed forces at the Security Council’s request. In accordance with Article 47, military planning and operational objectives are the sole remit of the permanent Security Council members through their exclusive Military Staff Committee. If the permanent members are interested in the opinion of any other “sovereign” nation, they’ll ask it to provide one. The inequality inherent in the Charter could not be clearer. Article 44 notes that “when the Security Council has decided to use force” its only consultative obligation to the wider UN is to discuss the use of another member state’s armed forces where the Security Council has ordered that nation to fight. For a country that is a current member of the Security Council, use of its armed forces by the Military Staff Committee is a prerequisite for Council membership. The UN Secretary-General, identified as the “chief administrative officer” in the Charter, oversees the UN Secretariat. The Secretariat commissions, investigates and produces the reports that allegedly inform UN decision-making. The Secretariat staff members are appointed by the Secretary-General. The Secretary-General is “appointed by the General Assembly upon the recommendation of the Security Council.” Under the UN Charter, then, the Security Council is made king. This arrangement affords the governments of its permanent members—China, France, Russia, the UK and the US—considerable additional authority. There is nothing egalitarian about the UN Charter. The suggestion that the UN Charter constitutes a “defence” of “national sovereignty” is ridiculous. The UN Charter is the embodiment of the centralisation of global power and authority. UN Headquarters New York – Land Donated by the Rockefellers The United Nations’ Global Public-Private Partnership The UN was created, in no small measure, through the efforts of the private sector Rockefeller Foundation (RF). In particular, the RF’s comprehensive financial and operational support for the Economic, Financial and Transit Department (EFTD) of the League of Nations (LoN), and its considerable influence upon the United Nations Relief and Rehabilitation Administration (UNRRA), made the RF the key player in the transformation of the LoN into the UN. The UN came into being as a result of public-private partnership. Since then, especially with regard to defence, financing, global health care and sustainable development, public-private partnerships have become dominant within the UN system. The UN is no longer an intergovernmental organisation, if it ever was one. It is a global collaboration between governments and a multinational infra-governmental network of private “stakeholders.” In 1998, then-UN Secretary-General Kofi Annan told the World Economic Forum’s Davos symposium that a “quiet revolution” had occurred in the UN during the 1990s: [T]he United Nations has been transformed since we last met here in Davos. The Organization has undergone a complete overhaul that I have described as a “quiet revolution”. [. . .] [W]e are in a stronger position to work with business and industry. [. . .] The business of the United Nations involves the businesses of the world. [. . .] We also promote private sector development and foreign direct investment. We help countries to join the international trading system and enact business-friendly legislation. In 2005, the World Health Organisation (WHO), a specialised agency of the UN, published a report on the use of information and communication technology (ICT) in healthcare titled Connecting for Health. Speaking about how “stakeholders” could introduce ICT healthcare solutions globally, the WHO noted: Governments can create an enabling environment, and invest in equity, access and innovation. The 2015, Adis Ababa Action Agenda conference on “financing for development” clarified the nature of an “enabling environment.” National governments from 193 UN nation-states committed their respective populations to funding public-private partnerships for sustainable development by collectively agreeing to create “an enabling environment at all levels for sustainable development;” and “to further strengthen the framework to finance sustainable development.” In 2017, UN General Assembly Resolution 70/224 (A/Res/70/224) compelled UN member states to implement “concrete policies” that “enable” sustainable development. A/Res/70/224 added that the UN: [. . .] reaffirms the strong political commitment to address the challenge of financing and creating an enabling environment at all levels for sustainable development [—] particularly with regard to developing partnerships through the provision of greater opportunities to the private sector, non-governmental organizations and civil society in general. In short, the “enabling environment” is a government, and therefore taxpayer, funding commitment to create markets for the private sector. Over the last few decades, successive Secretary-Generals have overseen the UN’s formal transition into a global public-private partnership (G3P). Nation-states do not have sovereignty over public-private partnerships. Sustainable development formally relegates government to the role of an “enabling” partner within a global network comprised of multinational corporations, non-governmental organisations (NGOs), civil society organisations and other actors. The “other actors” are predominantly the philanthropic foundations of individual billionaires and immensely wealthy family dynasties—that is, oligarchs. Effectively, then, the UN serves the interests of capital. Not only is it a mechanism for the centralisation of global political authority, it is committed to the development of global policy agendas that are “business-friendly.” That means Big Business-friendly. Such agendas may happen to coincide with the best interests of humanity, but where they don’t—which is largely the case—well, that’s just too bad for humanity. Kofi Annan (8 April 1938 – 18 August 2018) Global Governance On the 4th February 2022, a little less then three weeks prior to Russia launching its “special military operation” in Ukraine, Presidents Vladimir Putin and Xi Jinping issued an important joint statement: The sides [Russian Federation and Chinese People’s Republic] strongly support the development of international cooperation and exchanges [. . .], actively participating in the relevant global governance process, [. . .] to ensure sustainable global development. [. . .] The international community should actively engage in global governance[.] [. . .] The sides reaffirmed their intention to strengthen foreign policy coordination, pursue true multilateralism, strengthen cooperation on multilateral platforms, defend common interests, support the international and regional balance of power, and improve global governance. [. . .] The sides call on all States [. . .] to protect the United Nations-driven international architecture and the international law-based world order, seek genuine multipolarity with the United Nations and its Security Council playing a central and coordinating role, promote more democratic international relations, and ensure peace, stability and sustainable development across the world. The United Nations Department of Economic and Social Affairs (UN-DESA) defined “global governance” in its 2014 publication Global Governance and the Global Rules For Development in the Post 2015 Era: Global governance encompasses the totality of institutions, policies, norms, procedures and initiatives through which States and their citizens try to bring more predictability, stability and order to their responses to transnational challenges. Global governance centralises control over the entire sphere of international relations. It inevitably erodes a nation’s ability to set foreign policy. As a theoretical protection against global instability, this isn’t necessarily a bad idea, but in practice it neither enhances nor “protects” national sovereignty. Domination of the global governance system by one group of powerful nation-states represents possibly the most dangerous and destabilising force of all. It allows those nations to act with impunity, regardless of any pretensions about honouring alleged “international law.” Global governance also significantly curtails the independence of a nation-state’s domestic policy. For example, the UN’s Sustainable Development Agenda 21, with the near-time Agenda 2030 serving as a waypoint, impacts nearly all national domestic policy—even setting the course for most domestic policy—in every country. National electorates’ oversight of this “totality” of UN policies is weak to nonexistent. Global governance renders so-called “representative democracy” little more than a vacuous sound-bite. As the UN is a global public-private partnership (UN-G3P), global governance allows the “multi-stakeholder partnership”—and therefore oligarchs—significant influence over member nation-states’ domestic and foreign policy. Set in this context, the UN-DESA report (see above) provides a frank appraisal of the true nature of UN-G3P global governance: Current approaches to global governance and global rules have led to a greater shrinking of policy space for national Governments [. . . ]; this also impedes the reduction of inequalities within countries. [. . .] Global governance has become a domain with many different players including: multilateral organizations; [. . .] elite multilateral groupings such as the Group of Eight (G8) and the Group of Twenty (G20) [and] different coalitions relevant to specific policy subjects[.] [. . .] Also included are activities of the private sector (e.g., the Global Compact) non-governmental organizations (NGOs) and large philanthropic foundations (e.g., Bill and Melinda Gates Foundation, Turner Foundation) and associated global funds to address particular issues[.] [. . .] The representativeness, opportunities for participation, and transparency of many of the main actors are open to question. [. . .] NGOs [. . .] often have governance structures that are not subject to open and democratic accountability. The lack of representativeness, accountability and transparency of corporations is even more important as corporations have more power and are currently promoting multi-stakeholder governance with a leading role for the private sector. [. . .] Currently, it seems that the United Nations has not been able to provide direction in the solution of global governance problems—perhaps lacking appropriate resources or authority, or both. United Nations bodies, with the exception of the Security Council, cannot make binding decisions. A/Res/73/254 declares that the UN Global Compact Office plays a vital role in “strengthening the capacity of the United Nations to partner strategically with the private sector.” It adds: The 2030 Agenda for Sustainable Development acknowledges that the implementation of sustainable development will depend on the active engagement of both the public and private sectors[.] While the Attorneys General of 19 states might rail against BlackRock for usurping the political authority of US senators, BlackRock is simply exercising its power as valued a “public-private partner” of the US government. Such is the nature of global governance. Given that this system has been constructed over the last 80 years, it’s a bit too late for 19 state AGs to complain about it now. What have they been doing for the last eight decades? The governmental “partners” of the UN-G3P lack “authority” because the UN was created, largely by the Rockefellers, as a public-private partnership. The intergovernmental structure is the partner of the infra-governmental network of private stakeholders. In terms of resources, the power of the private sector “partners” dwarfs that of their government counterparts. Corporate fiefdoms are not limited by national borders. BlackRock alone currently holds $8.5 trillion of assets under management. This is nearly five times the size of the total GDP of UN Security Council permanent member Russia and more than three times the GDP of the UK. So-called sovereign countries are not sovereign over their own central banks nor are they “sovereign” over international financial institutions like the IMF, the New Development Bank (NDB), the World Bank or the Bank for International Settlements. The notion that any nation state or intergovernmental organisation is capable of bringing the global network of private capital to heel is farcical. At the COP26 Conference in Glasgow in 2021, King Charles III—then Prince Charles—prepared the conference to endorse the forthcoming announcement of the Glasgow Financial Alliance for Net Zero (GFANZ). He made it abundantly clear who was in charge and, in keeping with UN objectives, clarified national governments role as “enabling partners”: The scale and scope of the threat we face call for a global systems level solution based on radically transforming our current fossil fuel based economy. [. . .] So ladies and gentleman, my plea today is for countries to come together to create the environment that enables every sector of industry to take the action required. We know this will take trillions, not billions of dollars. [. . .] [W]e need a vast military style campaign to marshal the strength of the global private sector, with trillions at [its] disposal far beyond global GDP, and with the greatest respect, beyond even the governments of the world’s leaders. It offers the only real prospect of achieving fundamental economic transition. Unless Putin and Xi Jinping intend to completely restructure the United Nations, including all of its institutions and specialised agencies, their objective of protecting “the United Nations-driven international architecture” appears to be nothing more than a bid to cement their status as the nominal leaders of the UN-G3P. As pointed out by UN-DESA, through the UN-G3P, that claim to political authority is extremely limited. Global corporations dominate and are currently further consolidating their global power through “multi-stakeholder governance.” Whether unipolar or multipolar, the so-called “world order” is the system of global governance led by the private sector—the oligarchs. Nation-states, including Russia and China, have already agreed to follow global priorities determined at the global governance level. The question is not which model of the global public-private “world order” we should accept, but rather why we would ever accept any such “world order” at all. This, then, is the context within which we can explore the alleged advantages of a “multipolar world order” led by China, Russia and increasingly India. Is it an attempt, as claimed by some, to reinvigorate the United Nations and create a more just and equitable system of global governance? Or is it merely the next phase in the construction of what many refer to as the “New World Order”? Tyler Durden Sat, 09/24/2022 - 19:40.....»»

Category: blogSource: zerohedgeSep 24th, 2022

Transcript: Albert Wenger

     The transcript from this week’s, MiB: Albert Wenger, Union Square Ventures, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in… Read More The post Transcript: Albert Wenger appeared first on The Big Picture.      The transcript from this week’s, MiB: Albert Wenger, Union Square Ventures, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, what can I say, I have yet another extra special guest, Albert Wenger, managing partner at Union Square Ventures. He has a fascinating background in technology and software, and is interested in all sorts of interesting things, ranging from climate change to humanism, to the huge transitions that humans have gone through as a species and what it means to society, investing, scarcity and just the quality of life that we will enjoy as a species. I found this conversation to be really intriguing. If you’re interested in venture capital, in technology, in how to think about early stage investing, well, strap yourself in, this is a great one. With no further ado, my conversation with Union Square Ventures’ Albert Wenger. You have quite a fascinating history. Let’s delve into that, starting with your background. You won a national German competition in computer science in high school. Tell us about that and where that led you. ALBERT WENGER, MANAGING DIRECTOR, UNION SQUARE VENTURES: Well, I fell in love with computers very early on when I was a young teenager. And my parents were super indulgent of this at a time when that was very unusual, and they bought me an early Apple II computer, one of the earliest Apple IIs to be sold in Europe, actually. And I’ve stuck with that, my entire life. I’ve studied computer science as an undergrad and as a graduate student. And I’ve been investing in a lot of computer companies over the years. So it’s been a central to what I do and who I am. RITHOLTZ: So let’s talk about the timing of school. You graduate Harvard in 1990, with an Economics and Computer Science degree, perfect for the explosion of the Internet; a PhD from MIT and Information Technology in ‘96. So when you were leaving school, were you interested in the Internet, or was it more hardware and software? WENGER: No. The web was really exploding while I was at MIT. And I actually finished my PhD in ’99, but I started a company in late ‘96, early ‘97. And I was kind of doing the company and the thesis at the same time, which wasn’t great for either, and also wasn’t great for our marriage. We kind of managed to get through that. But I was really fascinated with the web from when I first discovered it, which was in a computer lab at MIT where I’m trying to do my stats homework. So — RITHOLTZ: So let’s talk a little bit about some of the other companies you either founded or run, the most famous is probably, which ended up getting picked up by Yahoo. Tell us a little bit about — WENGER: It was an early Web 2.0 darling, Joshua Schachter had started. He was working at Morgan Stanley actually full time. He had started this as a side project. And it was kind of this idea that you would share your bookmarks with others, because bookmarks were kind of an indication of something that was actually interesting on the Internet. And Joshua added tags to that, and so you could browse things by tags. And at that time, Union Square Ventures’ Fred and Brad had started the firm, they had just raised the first fund. I had just finished another project I was been working on. And they were like, “Hey, we’re talking to this guy, Joshua, what do you think?” So I met up with Joshua, and they wound up investing, and I wound up to become the president. RITHOLTZ: So you’re president of, you see it through in order to be acquired by Yahoo in the early 2000s. Tell us a little bit about that experience. WENGER: The team was tiny. It was sub 10 people, basically. RITHOLTZ: Wow. WENGER: And it was a very rapidly growing service. I made myself sufficiently unpopular during the acquisition because I insisted on certain things, I’m like, “We’re not doing this. We’re not doing this. We’re not doing this.” At they at the end, they were like, “We want all of you except for this Wenger guy. We don’t want him,” which was perfect for me, mind you, because I didn’t want to relocate out to the West Coast. So I got to just take my marbles and start making angel investments. RITHOLTZ: So is that what led you to Etsy and Tumblr was the acquisition? WENGER: Yeah, exactly. I had a little bit of money and I met Rob Kalin, the founder of Etsy. He had just come back from the West Coast. He had tried to raise money on the West Coast, was unsuccessful with that. And so I wrote an angel check here, and then I brought Union Square Ventures in as the first Series A investor. RITHOLTZ: Is that what led to your transition from entrepreneur to venture capital? WENGER: Well, I was basically hanging out at the USV offices after the sale of and — RITHOLTZ: Just because you had no place else to go. WENGER: Because I knew both Brad and Fred really well, and so it was kind of a natural thing to do. I did these angel investments. I led the Union Square Ventures investment in Etsy, I became a venture partner for that, and then became a GP in the 2008 fund. RITHOLTZ: So Etsy, also Tumblr was another one. And if memory serves, were they acquired by Yahoo? WENGER: They were also acquired by Yahoo. Yes. RITHOLTZ: Okay. So you’re working at a contact list. What was that experience like now not as a president, but as an outside investor? WENGER: It was a very, very lucky landing for Tumblr, because Yahoo really was the only bidder and they were bidding against themselves, but they didn’t really know that. RITHOLTZ: So what eventually led you to say, “You know, I think I could do this venture stuff full time. Let me hang my hat at Union Square Ventures and focus solely on something else.” WENGER: Yeah, that had really been my goal since my own first startup in ’96, ‘97, which was a company called W3Health that ultimately failed. From that experience, I realized that I really loved startups, but then I was never going to be good operator, but I thought I could maybe be a decent investor. RITHOLTZ: Let me make a digression here, and since you’re in front of me, I have to ask this question. So I deal with traders, investors, fund managers, economists down the list, there is no group of people that seem to be prouder of their failures than venture capitalists. Why is that? WENGER: Because it’s an integral part of the business. And if you can’t deal with failure, you can’t be a VOICE, because many of the startups you invest in fail. RITHOLTZ: Statistically, that’s your expectation? WENGER: Yes, absolutely. RITHOLTZ: So it just seems like the healthiest way to think about what is unavoidable, yet so many people within the world of finance, kind of dance around it, try not to deal with it. There’s a little bit of denial. It’s almost like an object of pride, “Look, here are all the companies we invested in that didn’t make it. Look, here are all the great companies we passed on.” It’s almost like a point of pride, this sort of self-awareness. WENGER: Well, it’s also important too, how the venture capital model works overall, right? So the most you can ever lose in venture capital is the amount of equity you’ve put in. RITHOLTZ: Right. WENGER: But the upside is nearly limitless. I mean, it’s what Nassim Taleb calls convex tinkering, right? It’s the perfect example of that. You take many small, relatively small positions, and any one of them can become very, very large. But you also learn a lot from the things that don’t work. You know, sometimes you learn a lot more from that than you learn from the ones that do succeed. RITHOLTZ: Sure. You tend to learn more from losers than winners usually. And then I have to ask the same question, so Union Square Ventures, by definition Union Square is here in New York City. What’s it like being a venture investor on this side of the country, as opposed to what seems to be, you know, the gravitational black hole of venture out in Silicon Valley in California? WENGER: Well, first of all, it’s no longer that. So you know, Sequoia just opened a New York City office. Andreessen Horowitz has people on the ground here. So New York City is now, today, one of the epicenters. When we started, that wasn’t the case. When we started, people were like, “Oh, there’s been no tech company in New York City. There’s been no IPO.” Of course, you know, we were involved with two of the major IPOs. We led the Series A in Etsy. I also led the Series A — we — Union Square Ventures led the Series A in MongoDB, the big New York City-based success story. So it was incredibly healthy, though, because we were never caught up in the “Oh my God FOMO” of we have to have one of these and one of those, and everybody else is investing in the sector. It was always a “Let’s form our own thesis. Let’s figure out what we believe, and then let’s find companies that fit with that.” And we’ve always been extremely competitive in winning deals in the West Coast. In Twilio, I led the Series A, for Union Square Ventures, and there was a, you know, San Francisco-based company. So — RITHOLTZ: Last question on this topic, how different is venture in New York versus California, or is there really no big difference? WENGER: There used to be a noticeable difference between East Coast and West Coast. Today, I think that’s completely erased. RITHOLTZ: Quite interesting. So let’s talk about the thesis-driven venture capital firm, which is how USV describes itself. Tell us what these theses are and how do they drive your investment? WENGER: Yeah. So there’s been an evolution over time. I would say, you know, what we call Thesis 1.0 was that we invest in large networks of engaged users, differentiated by user experience, and those were investments like Twitter and Tumblr. And then we started to focus on companies that had less obvious network effects, so more data behind the scenes, companies like Sift, for example. And then we added to our thesis sort of infrastructure, and infrastructure investments included Twilio and MongoDB, Cloudflare. Stripe. There’s a whole bunch of infrastructure investments, infrastructures for building digital businesses. Our current iteration, what we call Thesis 3.0 is about broadening access to knowledge, capital and well-being by leveraging existing networks and protocols, and building trusted brands. And each part of that thesis actually means something very concrete. So let me just pick one of them, building trusted brands. For us, a lot today is about is your business model fundamentally aligned with your customer or not? The advertising model, as we have learned is not aligned with customers’ interests, right? If you’re YouTube, you want to serve the most engaging video so that you can show more ads. You don’t want to serve the most appropriate video, right? But if you have a subscription model, let’s say like Netflix, you want to show something that somebody actually really truly deeply is going to relate to, so that they stay as subscriber long term. So each part of this thesis means something and we use the sort of high level thesis to then look for very concrete things. So for example, I said broadening access to capital, so we’ve done a lot in lending, like, how can we do better underwriting, better, cheaper, faster loans, for instance, to small businesses, investment, like a company like Funding Circle, or to individuals, like a company like Upgrade, in a way that actually helps people, so where you’re not dragging them into like a debt hole, but you’re actually helping them build up their credit score while you’re giving them — extending their credit. RITHOLTZ: So 3.0 sounds a lot like World After Capital, I’m hearing some very similar themes. WENGER: Absolutely. There’s a strong relationship between some of the ideas in the book and some of the ideas that inform our investing. RITHOLTZ: We’ll circle back to the book in a little bit. Let’s talk about a couple of companies you invested in because I’m picking up a theme there, Meatable, Terra, Living Carbon, Marvel Fusion, Legendary Food, climate sustainability impact investing. WENGER: Yeah. So those are all personal investments, not Union Square Ventures investments. But I made those investments in the run up to us forming a climate thesis, and now a Climate Fund. So those are all investments that go back a few years, when I sort of became really interested in what kind of opportunities come out of the climate crisis. The climate crisis, if we don’t get on top of it, none of the other stuff will matter. None of the money we’ve made will matter. It’s so big. It’s so much bigger than COVID, for example, in ways that I think people still don’t appreciate. And so I made some personal investments first, and then we started talking to our LPs about it. And then during COVID, we raised the first Climate Fund, $160 million Climate Fund. We’re almost done investing that. And so the climate thesis is very simple. We want to invest in companies that either reduce emissions, draw down existing emissions, or help with adaptation. So I’ll give an example of an adaptation investment. We invested in a company out of Australia called FloodMapp. And what they do is they predict where things are going to flood. They also measure the actual flooding. Floods are one of the biggest problems coming out of the climate crisis, and they’re here today. This is not some future problem. And mega floods in Pakistan, a third of Pakistan is underwater as we speak. I don’t think people understand how horrific the devastation there is. RITHOLTZ: It’s the other side of the droughts that are everywhere. It’s what’s dry gets drier, what’s wet gets wetter. WENGER: Absolutely. Talking about emissions reductions, we’ve made investments, for example, in our first ever investment in Africa, in a company called Shift EV. What Shift EV does is it takes existing delivery vans and retrofits them in a space of a couple of hours, from internal combustion engine to electric. RITHOLTZ: A couple of hours? WENGER: A couple of hours. Yes. RITHOLTZ: Because if you want to take an old 911 and convert it to EV, it will take you about a year, assuming if you can get on the list. It’s that backed up for that shift itself. WENGER: So they have completely industrialized this process. RITHOLTZ: That’s amazing. WENGER: You drive a minivan in and a couple of hours later, drives out as an EV. RITHOLTZ: Wow. What do they do with the internal combustion engine and — WENGER: That’s a great question. I need to ask Ellie what they do with that. I don’t know. RITHOLTZ: I mean, it seems like that’s a lot of hardware to just throw away. WENGER: I don’t know. Great question. RITHOLTZ: Really interesting. WENGER: And then I’ll talk about one of the drawdown investments. We’ve invested in a company called Brilliant Planet out of the U.K. What they do is they build ponds in the desert and they pump seawater in, and then they grow algae very, very rapidly, continues algae bloom, and it takes a huge amount of carbon out of the atmosphere. RITHOLTZ: Algae in ponds — WENGER: In the desert. RITHOLTZ: — can move the needle? WENGER: Yes. Absolutely. RITHOLTZ: That’s quite fascinating. Two questions come out of this, one is structural and one is fund based. Let’s do the fund one first. So John Doerr had a climate fund started about 10 years ago at Kleiner Perkins. Some people have said it kind of lagged other similar era venture funds. Was he just early? How do you look at this in terms of not just having a positive impact on the planet but generating a return on investment? WENGER: Yeah. The early green tech funds, they were too early in one sense. But in another sense, they were actually crucial to our having a shot at overcoming the climate crisis. Because if it hadn’t been for the investments, we wouldn’t have gotten on the cost curve, for instance, for solar PV, right? So the reason we have really cheap PV today, the reason we have really relatively cheap batteries today is because of some of the investments that were made back there. And there’s this pattern in the world where every big technological shift starts with a bubble, right? RITHOLTZ: Right. WENGER: So when we had ships, we had the South Sea bubble, right? And when we had railroads, we had the railroad bubble. There was an automotive bubble. There was dot-com bubble, multiple bubbles in crypto. There was a green tech bubble. But, now, it’s a decade-plus later and all the things that they were rightly concerned about are all coming true. And we are now reaping some of the benefit, but we’re also now building on — we’re sort of standing on the shoulders of giants, as it were. RITHOLTZ: And to clarify, I believe that fund doubled over 7 or 10 years, not like it was a sinkhole, but compared to what it could have done, had that money been invested elsewhere, it might have seen better returns. But it wasn’t — I don’t want to make it sound like it was total loss. So the second question is, you’re making seed investments, how does that work if you want to bring one of those seeds to your firm, to Union Square Ventures? And from a public market, that sounds like it’s a compliance and conflict nightmare. You guys approach it differently. WENGER: In our LPA, we can write checks up to $100,000. So we can’t make massive investments in startups. So all of the companies you mentioned have a sub $100,000 investment. And then the only one where I’ve invested more is Marvel Fusion. We can invest more once the fund has passed on something. So if the fund says we’re not doing this, then we can invest. RITHOLTZ: Got it. Interesting. So along those lines, there are some venture firms that don’t really seem to care a lot about valuations and others seem to focus on a little bit. How do you fall in that spectrum? Is valuation significant, or is it, hey, we’re going to make 100 investments and if two or three workout, the valuations are irrelevant? WENGER: No, we’ve definitely always been disciplined on valuation, and we’ve let a number of things go. Sometimes we let them go and they do great, like, “Well, we could have made money if we had invested.” And sometimes you’re very happy at that. Our approach is we’ve always kept our fund sizes small, so we don’t need to be in everything that’s out there. Our latest funds are — our core fund is $250 million. So these aren’t big funds in the scheme of things when you have other firms that raised $3 billion. $8 billion, $15 billion per fund. And as a result, if we think the price is too high, we can just find something else. RITHOLTZ: So let’s talk a little bit about some of those bigger funds, and I guess we’ll hold Softbank off to the side because that was really aberrational. But do you end up when you have lots of $10 billion and $20 billion venture funds, with too much capital chasing to a few good deals? How does this impact the whole ecosystem that’s out there? WENGER: Largely, it’s great for us because we’re early stage investors. So it means there’s lots of money to come in and fund later rounds of the companies we’ve invested in. So we haven’t really spent much of our time worrying about it. And then every once in a while, these firms go. We’re going to go really early and some of them do spread money early. But we find, because we’re thesis-driven and because we are opinionated, on deals that we’re really interested in, we can win those deals. Sometimes they’ll take a small check from somebody else along for the ride, but they know that we work with early stage companies that we roll our sleeves up, that we’re involved, and that we have a thesis. And you know, we take the approach we’d rather disagree with the founder and then not invest than sort of like — be like, “Oh, well, whatever it is you want to do.” Like, we have a thesis as to why we think this is interesting. Let’s talk about this. If it’s aligned, great. And obviously things may change after we’ve invested. We’re not like stubborn, you know. But let’s talk about why we are excited. And if that aligns with you, that’s great. If it doesn’t, let’s go separate ways, right? So we take a kind of — I call it a high alpha approach investing. We’d rather have really upfront conversations about what we like and don’t like than sort of get married as it were. And actually, it’s harder to get rid of VC than it is to get a divorce. So like we think it’s good to have these conversations up front, right? RITHOLTZ: What about follow-up rounds, or some firms that will do a seed round, and then participate in an A or B round? Is that something that Union Square does? WENGER: Well, we reserve a lot of funds for follow-on, and we have a very sort of, I think, sophisticated reserves methodology that we’ve honed over many funds cycles now, where we actually built kind of a Monte Carlo analysis of the portfolio to see how much money we think we need to keep in reserve. But eventually, when the valuations get too high, the rounds get too large, we don’t follow on. We have a separate vehicle called the Opportunity Fund, where we sometimes write bigger checks into late-stage rounds in some of our portfolio companies, but not always. RITHOLTZ: So let’s talk a little bit about this book, “The World After Capital,” starting with what is technological nonlinearity? I liked that phrase. WENGER: The basic idea is that every once in a while in humanity’s history, we invent things that radically change what we, as society, have as a binding constraint on us. So let me make that very concrete. For hundreds of thousands of years, our ancestors were foragers. They were hunter-gatherers. They would go out and find things, and eat berries and kill little squirrels. And then roughly 10,000 years ago, we had a bunch of inventions. We figured out that you could plant seeds, that you could irrigate them, that you could domesticate animals, that you could use the dung from the animals too as a fertilizer. We figured all those things out and we got agriculture. And the constraint shifted from how much food can you find to how much land — arable land do you have. And when that constraint shifted, we changed just about everything, about how humanity lives. Like, we went from being migratory to being sedentary. We went from very flat tribal societies to very hierarchical agrarian societies. We went from being, clearly, like polygamous, polyamorous, whatever you want to call it, to being monogamous-ish. We went from having religions where, you know, everything was a spirit, a tree, a rock, everything had a spirit, and then we went from that to theistic religions where there was some different number of gods. Then fast forward to a couple 100 years ago, we had sort of the enlightenment. With the enlightenment, we had sort of big scientific breakthroughs and we figured out how to dig up stuff out of the ground and burn it and create energy, and make heat and electricity and all those things. And the constraint of it again shifted from, you know, how much land do you have to how much physical capital can you create? How many machines can you build? How many buildings, roads, railroads, et cetera? RITHOLTZ: That’s really interesting. WENGER: And we changed everything yet again. And so now the point of the book is, guess what? We have to change everything yet again, because capitalism, this is why the book is called “The World After Capital,” capital is no longer the binding constraint. Instead, it’s human attention. RITHOLTZ: Human attention, so that’s the third great shift is. So we went from agricultural scarcity to having enough food. WENGER: We went from forager to agrarian, so from food scarcity to land scarcity, then we went from land scarcity to capital scarcity. And now, we’re going from capital scarcity to attentional scarcity. RITHOLTZ: Capital is no longer scarce. So now attention is the new scarcity, which there’s a line in the book that really caught my eye, attention is time plus intentionality. Explain that. WENGER: Yeah. So speed just tells you how fast you’re going. Velocity tells you how fast you’re going towards something, towards some destination. RITHOLTZ: Speed plus direction. WENGER: Speed plus direction is velocity. And the same is true for attention. Time just tells you how much time has elapsed, you know, two hours. Attention is what was your mind and your body doing during those two hours. Were you, you know, just scrolling Twitter, or were you like working on a solution to the climate crisis? RITHOLTZ: So you say something about these transitions that really jarred me. Previous transitions like agriculture emerged over thousands of years and was incredibly violent. Industrial Age lasted over hundreds of years, and also involved lots of violence and bloody revolutions, and two World Wars, which raises the obvious question, what sort of violence is the next transition based on attention scarcity potentially going to involve? WENGER: Well, at the moment, the leading candidate is the climate crisis. We have known about it for literally hundreds of years, actually, and we have refused to do enough about it. And so now, we have entered the state where we’re getting extreme heat events. We’re getting extreme drought events. The food supply is definitely in question. Something that we have taken for granted for many years now. We’ve taken for granted that you can go to the store and buy food. Unless we really course correct very hard, very dramatically, and by dramatically, I mean, the level of government activation that we had in World War II. In World War II, we spend roughly 50% of GDP on the war effort. We need to spend roughly 50% of GDP on the climate crisis for several years sustained in order to actually avert it. RITHOLTZ: So that suggests that you don’t think there’s going to be some technological magic bullet going to appear out of nowhere? WENGER: Well, if you look at World War II, the government went to Ford and said, “We need you to build airplanes, not cars.” And actually, there’s a chart in my book that shows that output of cars dropped. We need to get to a similar point where we’ll say there’s certain things we’re just not going to do for a while because we need to do these other things. There are great technologies. We don’t need to invent some magic bullet that doesn’t exist. We just need to build a lot of what we already know how to build. Like, we need to build a lot of nuclear power plants. We need to build a lot of these ponds in the desert that can draw down carbon. There’s 1001 different things that we need to build. We just need to take our physical capital and point it at that. And when you do that at that scale, incredible things become possible. So, during World War II, Ford Motor Company built a plant, it was called the Willow Run facility. And in Willow Run, they built the B-17 Liberator bomber. Now, that’s a four-engine bomber, with lots of gun turrets to defend against fires. At peak production, they finished — they finished one of these every hour. RITHOLTZ: Amazing. WENGER: They finished a complete airplane every hour. And my point is once we decide to take our attention, and allocate our attention to what the real problem is, we can redirect our physical capital. We have plenty of physical capital. People say, “Oh, you can’t build nuclear power plants fast enough.” That’s if you built them in peacetime mode. If you built them in wartime mode, you could build them very rapidly. RITHOLTZ: So when you say this requires a substantial commitment of capital, let’s put a dollar amount on that. Are you talking — WENGER: Half of GDP. I’m saying half of GDP. RITHOLTZ: So you’re saying $10 trillion? WENGER: Yeah. RITHOLTZ: Just in the U.S. alone? WENGER: Yeah. RITHOLTZ: Now, we just passed a climate bill, arguably, that was a couple of billion dollars, $100 billion maybe over 10 years. And it was like pulling teeth, it was a miracle it just managed to skate through. And that’s a fraction of a trillion dollars. How you’re going to get 10x or 100x? Do things have to get much worse before they get much better? WENGER: Yeah. I mean, there’s a book about the climate crisis called “Ministry for the Future,” by Kim Stanley Robinson. And the book starts with a devastating heat event in India, where tens of millions of people die. I don’t know what it takes. But I can tell you, it’s only going to get worse, it’s going to get a lot worse. And at some point, hopefully, people — enough people will wake up and say, “No, no, we really actually have to get into a wartime footing. RITHOLTZ: So up till now, a huge swath of the population has been asked my grandkids problems, what wakes them up? Is that sort of events? I mean, you see what’s happening in California. You see what’s going on in lots of the United States with droughts. It seems like people are starting to pay attention. WENGER: Oh, absolutely. Yale does an incredible survey of climate attitudes. And it is very clear that even in the U.S., which has been lagging on this, a significant majority of people believe that the climate crisis is real, that is caused by humans, and the government should do something about it. So I actually believe this is going from a kind of a losing proposition for politicians to a winning proposition. And I think politicians need to be much more into it. Most of them still aren’t willing to acknowledge the full extent of this crisis. And the physics of this crisis are extraordinary. So because of all the CO2 we’ve put in the atmosphere, the amount of heat that we’re now trapping that used to radiate out into space, do you know how much heat it is? It is four Hiroshima-sized nuclear bombs every second. RITHOLTZ: It’s insane. I read that in your book and I was like, no, no, he must mean every week. Every second? WENGER: Every second. Now, imagine for a moment you had alien spaceships above Earth, throwing four Hiroshima-sized nuclear bombs into our atmosphere every second. RITHOLTZ: That would put us on a wartime footing? WENGER: And what will we do? Yeah. We would drop everything, right? We would be like, “They’re trying to kill us. We have to get rid of them.” I mean, we made a movie about it called Independence Day. RITHOLTZ: Four nuclear bombs every second? WENGER: Yeah. RITHOLTZ: And it’s just — WENGER: Of every minute of every hour of every day, it’s a mind-boggling amount of heat. RITHOLTZ: So there’s a couple of other things in the book I wanted to touch on. You mentioned alien visitors. We’ll hold off on the Fermi paradox discussion because nobody wants to hear me babble about that. But one of the things I thought was kind of interesting is the transition of the nature of scarcity. You’re right, it changes the way we measure human effort. It makes it more difficult, and we need increasingly more sophisticated ways of providing incentives to sustain unnecessary level of effort. Flash that out a little more. WENGER: So if you think of hunter-gatherers, right, I mean, you can see the results of effort immediately. RITHOLTZ: Right. WENGER: Like, you go to the forest, you either come back with something or not. RITHOLTZ: Right. WENGER: So it’s very easy to create incentives. Like, if you don’t find something, go back hunting and come back with something. RITHOLTZ: Or you’ll go hungry. Right. WENGER: When you go to agriculture, you have these, you need to see, you need to take care of it, and you don’t know how big a harvest you’re going to get. So you need a little more sophisticated incentive, and a lot of those incentives were often provided by a religion. Religion is sort of saying you have to apply yourself to this backbreaking work. This is the work of the Lord, et cetera. And then when we went over to capital, now it gets even more complicated because you might not see results of some effort for many, many years. I actually think when I say more sophisticated incentives, in the book, I talked a lot about just freeing up humans to pursue their interests, to make it so that you can freely allocate attention. And I’m always very inspired by mathematics. Like, you can’t get rich as a working mathematician, basically. I mean, yes, if you wind up going to Wall Street, you can. But if you actually keep working as a mathematician, that’s not a — you know, there’s also no patents. And you know, the only thing math works on recognition by peers, and there’s some prizes. There’s like the famous Fields Medal, and there’s some other prizes. And yet, the amount of math that’s been produced over the last, you know, few decades is just mind-blowing extraordinary. And I believe we need to bring that type of model to many, many more parts of the economy and parts of activity. So in a way, what all of “The World After Capital” is about is how can we shrink all the explicitly incentivized economic activity, where there’s an explicit, okay, you go to work and you get paid a wage kind of thing. And here’s a market transaction, how can we shrink that and make room for things that are super, super important, but cannot have prices, cannot be economically incentivized? Let me give concrete examples of that. Obviously, we’ve talked about the climate crisis. But let’s talk about death from above. Like, every million years or so, the earth gets hit by something very large out of space. That’s very, very bad when it happens. But there’s no market for allocating resources to that. There’s no supply and demand for it. So we, as humanity, need to decide that this is a real problem and we ought to be working on it. RITHOLTZ: Now, aren’t we tracking various large observed asteroids and doing some stuff? WENGER: We are, but the amount of effort we’re putting into this relative to the size of the problem is minuscule. The number of people who sort of truly globally work full time on this is a tiny fraction of the people we actually should have. And we’re also not working sufficiently on like what will we do if we detected one that’s clearly headed for us, right? RITHOLTZ: Well, you send Bruce Willis up and — WENGER: Exactly. Yes. RITHOLTZ: — he takes it, right? WENGER: Yeah, he does. RITHOLTZ: I mean, it’s not unknown. We know the regular major extinction events. There’s a real interesting theory that as the sun goes around the galaxy and passes over and above the galactic plane, that affects the asteroid belt and — WENGER: The famous Oort cloud is where a lot of these objects — yeah. RITHOLTZ: Right, which is full 360 around the — WENGER: Yes. So we know all of this. And here’s the interesting thing. When we went from the agrarian age to the industrial age, we didn’t get rid of agriculture. This agriculture today, right, we all eat food that’s grown in agriculture. But what we did is we shrunk how much human attention is required to do agriculture, and we took it from being like 80% of human attention to like sub 10%. RITHOLTZ: It’s less than 2% in United States. It’s tiny. WENGER: So what I want to do is, let’s do the same with the rest of the economic sphere. I’m not an anti-capitalist. I’m not a degrowth. Person. I’m not suggesting we should get rid of markets. I’m just saying we should compress market-based activity from absorbing much of human attention to absorbing maybe 30% of human attention, and we should free the rest up to work on these incredibly important thing. Some of them are threats, and some of them are opportunities, right, opportunity to cure cancer, opportunity to create incredible wildlife habitats, restore those wildlife habitats, opportunity to travel to space. I mean, all these opportunities that we’re not paying attention to because they’re not — again, they’re not really market price based and can’t be market price based. There’s just no prices for them. RITHOLTZ: So the conclusion of the book had a list of action goals, which was not what I was expecting in a book on venture capital and “The World After Capital;” mindfulness, climate crisis, democracy, decentralization, improving learning, and humanism. Address whichever those you feel like. WENGER: Well, these are all core components of how to have a — hopefully, a transition that’s not a violent transition, right? These are all about how could we get out of the industrial age into the knowledge age without some cataclysmic event, without a world war, without killing billions of people through the climate crisis, right? They’re also all components of what a knowledge age society might look like. Right? So let’s talk about mindfulness for a second. We’re constantly assaulted with new information now. You know, our brains evolved in an environment where when you saw a cat, there was an actual cat. Now, there’s an infinity of cat pictures. So if you don’t work on how you — how much you are in control of your mind, external sources will control your mind. So mindfulness, which is a much abused word, but it has become much more important in a world where we’re constantly assaulted by information flows, right? Let’s talk about humanism for a moment. Humanism is about recognizing that humans are the prime movers on this planet. We are the ones who have brought about the climate crisis. We are the ones who put a theory to solve it, or wind up getting wiped out by it. And it’s about this idea that, you know, with great power comes great responsibility. And so, we are responsible for the whales, not the whales for us. There is — at the moment, because we’re in this transition period already, and because things are going so poorly for so many people in this transition, there’s no a flight back to religion, there’s a flight to populism. And a big part of the book is about, no, there is a secular alternative way of thinking about society that embraces science, that embraces progress, that embraces humans and all types of humans, and that recognizes that we are first and foremost human, and only secondarily are we American, or Russian, or male or female or something else. You know, these are all secondarily. But primarily, we’re humans, and humans are fundamentally different from all the other species on the planet. RITHOLTZ: Quite fascinating. So let’s talk about the current state of the world for venture capitalists. We’ve seen valuations come way down for public companies. They’re pretty reasonably priced these days, about 16 times for the S&P 500. That’s historically, more or less, average. Where do you see the state of the world in early stage valuations? How are they holding up? A year ago, late stage valuations had gone just bonkers. Tell us a little bit about what’s going on today. WENGER: The correction always, basically, is a trickle-down type of correction. It happens very rapidly in the public markets. Then you still get some high-priced private rounds that either were in the works, or they have a lot of structure. In the later stage markets, you know, there’s a headline number. But then nobody talks about all the war in coverage that’s behind the scenes. And then the early stage valuations tend to sort of lag behind all of that. But we’re seeing early stage valuations come down. And as a firm, we’ve always been disciplined on valuations. So we just let a lot of things go where we just thought it was — RITHOLTZ: Are they down off the peak, or are they cheap and attractive? WENGER: The down of the peak, whether they’re cheap or attractive, I think, you know, time will tell. But we are back in a situation where, you know, there are seed deals getting done that’s below $10 million, certainly below $20 million, and you know, seed rounds that have a reasonable size. So you know, for a while we were seeing these $10 million, $20 million, $30 million seed rounds. RITHOLTZ: It sounds pricey. WENGER: Yeah. And that’s not happening anymore. But at Union Square Ventures, we’ve also always tried to basically be at the next era, at the next thesis and evolve our thesis before everybody else gets there. And once everybody else gets there, try and evolve our thesis. And so, for example, in the Climate Fund, we’ve made any number of reasonably priced investments, very reasonably priced. RITHOLTZ: So I always assumed it was tied to the public markets. But sometimes you just don’t realize, when you have a good couple of years in a row in the public markets, like we saw in the 2010, pretty much straight up through 2021, you see that impact and what people are looking for, what sort of deals get done, and valuations generally. WENGER: I always find it relatively surprising how much private early stage valuations are tied to public markets because our holding — RITHOLTZ: That’s the exit, right? WENGER: But our holding periods are 5, 8, 10 years. And so, like, what’s the current public — RITHOLTZ: Right. WENGER: And so there’s a couple of different explanations. One, obviously, is just investor sentiment, right? RITHOLTZ: Right. WENGER: You know, when investors are like bearish because of what they’re seeing in the public markets, they take a bearish attitude towards their own investing. We try — at Union Square Ventures, we try to have a pretty steady pace as one way of contracting our own sort of — you know, whatever our own emotions may be about the public markets. There is, however, another effect that sometimes is underestimated, which is that the people who give money into venture funds, so these are pension funds and endowments, and so forth, they have a certain whip from the public markets, because when they’re feeling flashed on the public markets then their private allocation, you know, as a percentage of their overall portfolio, they have a certain target in mind. Then when the public markets come down a lot, all of a sudden, they’re overallocated, so they want to pull back. So there is a mechanism by which the current public markets transmit into the private markets. There’s a real financial mechanism. There’s a psychological mechanism and a real financial mechanism by which some transmission, some contagion basically happens from the public market into private market. But it doesn’t make very much sense. Like, if people were sort of more cognizant of both that emotional reaction and this mechanism, they’d be like, “Well, yeah, but innovation is happening at some pace. In some area, there’s some innovation and we should be funding that innovation.” RITHOLTZ: So I’m just making notes, investors are irrational. WENGER: Deep and profound insight right here. RITHOLTZ: Right. There you go. WENGER: You’ve never heard this one before. RITHOLTZ: So to put that into a little context, 2020, 2021, very founder-friendly deals. Now, it seems like a little more investor-friendly, a fair assessment or not quite there yet? WENGER: Well, when it comes to founder-friendly versus investor-friendly, there’s a lot more to deal than valuation. There’s all the other terms. And while I believe we will see a correction on valuation that’s pretty significant, I don’t think we’re going to go back to where venture capital was 20 or 30 years ago, that had all these super draconian terms. Certainly, even at the early stage, even at the early stage, there were all these like — there were redemption provisions in the early stage deals. I don’t think that’s going to come back. We are not fans of structure in latest stage deals. Like, just to give a good example, when I was still on the board of Twilio, Twilio had the option of doing a totally clean, no structure round and call it $1,000,000,001. In a highly structured round with like — you know, we’re going to have a full ratchet into an IPO at a $1,000,000,005. And I was — you know, some of the other investors at the table really wanted the $1,000,000,005 number because it’s a big headline number. And I talked to Jeff and I said, “It doesn’t make any sense.” RITHOLTZ: Right. WENGER: You don’t actually know what your deal is until many years. Like, just take the deal where you know what the deal is today and you know what the deal is a year from now, and two years from now, because it’s not going to change based on circumstances. RITHOLTZ: Right. WENGER: And so Jeff took the clean deal, and that enabled Twilio to go public when the IPO window reopened. Whereas at the $1,000,000,005 deal, they wouldn’t have been able to go public. And that worked incredibly well for Twilio to become a public company. RITHOLTZ: Really interesting. So since we’re comparing early stage investments to the public world, lately, everybody has been looking at different sectors the past year. Energy has done well, technology not so much. Within venture, do you see that same sort of segmentation, different sectors have different — WENGER: Well, we were basically the first sort of venture firm to have a dedicated climate fund. And now, many of the venture firms are following suit, either adding a climate pocket to their existing funds, or a climate thesis or, you know, some people call it sustainability fund. Ours is very focused on climate. So for instance, we don’t deal with water waste. It’s strictly about atmospheric carbon. So there’s a lot money rotating into that sector. There’s still healthy sort of activity around Web3. So you know, Web3, there’s still — RITHOLTZ: Crypto, blockchain, all that? WENGER: Yeah. There’s still healthy sort of activity. I do think that certain kind of software companies that had found it very easy to raise money, I think they’re finding it a lot harder, just because people have looked at it and said, “Wow, I think we’ve reached some stage of normalization in this market.” You know, like, not everything in this market is going to be a $50 billion outcome. There’s going to be many, much smaller outcomes, and so we need to adjust accordingly. And also, many of these markets had just too many companies raised venture capital doing basically more or less the same thing. RITHOLTZ: So it was easy to raise money for a fund today, a little more challenging, even if you’re a pretty decent sized VC with a 10, 20-year history. Are they having difficulty going back to their clients saying, “Hey, we’re doing another billion dollars?” WENGER: You know, I think that we will only see a year from now, or two years from now. There were a lot of funds that have put out a lot of money very, very rapidly, and we’ll see just how big the hangover is. But we won’t know that for some time. RITHOLTZ: So some of the folks who give advice to founders like Chamath and Jason, and the crew with the All-In Podcast, they’ve been talking about — preaching really about cutting costs and reducing your burn rate, and get ready for a tough year or two. How do you see this environment? Is that good advice, or do you really have to, you know, go all out and get more funding as opposed to trying to make a more modest burn rate last longer? WENGER: There’s very little one size fits all advice that makes sense. RITHOLTZ: Fair. WENGER: Nonetheless, we held a call early this year for all of our portfolio companies. And we said this really is a big adjustment and it’s not a one or two months’ blip. This is a long-term adjustment. And it was great because we had some CEOs in our portfolio who had managed through the implosion of dot-com bubble, and they spoke about just how difficult the funding environment can get. So generally speaking, we did a lot in ’21 because we saw this coming. To me, the biggest sign of the bubble really was — that we really were reaching the tail end, was all these incubation efforts that were being raised. And I knew this because I had raised money into an incubator in ‘99, towards the end of the dot-com bubble. And I think when investors think, “Oh, I don’t even need the entrepreneur, I can just start the company myself,” that’s kind of when you know that it’s gotten too easy, right? And that’s not going to lie. So in ‘21, we took a lot of liquidity. We sold a lot of things that we were able to sell. And we told all of our portfolio companies to raise money. And so — RITHOLTZ: Last year, this is — WENGER: ‘21. Yeah. Well, it’s best to do things before. RITHOLTZ: Sure. Sure. WENGER: Right? So as a result, we have very few companies in our portfolio that need to raise. We have some, but we have very few. And then, you know, at the beginning of this year, we told everybody who had raised successfully, “You got to make this money lasts much longer than you thought when you raised it.” And so, yes, absolutely. You know, companies were operating with very inefficient growth. Because it was easy to fund inefficient growth, you could be burning $1 million, $2 million, $3 million, $4 million a month. And you know, if you were growing 405%, 50%, 60%, that was good enough. That’s not going to be the case. So you’re either growing very fast, or you have something very compelling, in which case you can raise money, or you are growing, you know, 20%, 30%, but you are growing very, very efficiently, right? So being in the sort of 50% growth, but you’re super inefficient, that’s going to be a really tough place to be. RITHOLTZ: All right, so before I get to my favorite questions, I have two questions I’ve been sitting on sort of from the book and some from your blog continuations that I want to hear where you go with this. And the first one is a quote from the book, “Malthus could not foresee the scientific breakthrough that enabled the Industrial Revolution.” I think you let him off the hook a little too easy. It’s just an abject failure of imagination. And you are in the imagination business. The Malthusians, weren’t these folks just unable to imagine any sort of progress or technological development? WENGER: Well, we have had more progress and more technological development than people were able to imagine. I think, conversely, we’re now in the opposite trap. We can’t imagine that things could get really, really bad. We can’t imagine that the climate crisis could disrupt our food supply to the point where billion people starved. We simply can’t wrap our head around this idea. So I think we’re in the opposite trap at the moment. We’ve been so used to the success of progress, and we’ve so neglected the engines that produce progress, that I think we’re in the opposite trap at the moment. RITHOLTZ: What are the other engines? Is it early stage investing from governments when the project has a 10 and 20-year ROI that the private sector won’t do it? WENGER: It’s foundational research. We’ve not had a true breakthrough in science since quantum mechanics. It’s a hundred years ago. So general relativity and quantum mechanics are hundred years ago. Now, we’ve made some progress in biology. Biology, we’ve had some really good progress. But you know — RITHOLTZ: You’re talking fundamental science not technology. WENGER: Fundamental science. RITHOLTZ: Like, I immediately think of semiconductors was a giant — WENGER: Oh, no, incredible progress. But fundamental science, we’ve not had a true big unlock in a hundred years. Now, I think when we talk about engine of progress, this is also how hard is it to start a business? How many regulations do you have to comply with? How expensive is it to comply with those regulations? We’re also talking about — we’re still subsidizing oil and gas globally, to the tune of trillions of dollars. RITHOLTZ: Yes. Yes. WENGER: Subsidizing oil and gas, it’s crazy. RITHOLTZ: Which by the way, helps to explain why so many people have an incentive to either question the impact, the source or the reality of climate change. WENGER: Yes. RITHOLTZ: There’s forces that work there. WENGER: And so, I believe we’re in this sort of opposite trap today. And you know, people like to make fun of Greta Thunberg. But young kids, young activists understand the severity of the climate crisis in a way — RITHOLTZ: Right. WENGER: — in a way that most adults don’t seem to be willing to accept. RITHOLTZ: Right. I don’t think climate change is going to impact my life. You know, I’m 60. I’m going to run out the clock. WENGER: You’re not. RITHOLTZ: Someone your age — WENGER: The reality is you’re not. You’re not going to escape. You and I are not going to escape this. It’s here, it’s now and it’s only going to get worse. RITHOLTZ: I don’t doubt that for a second, but — WENGER: And here’s the thing, I think — RITHOLTZ: I challenge — WENGER: We could live in this amazing, incredible future. Like, wouldn’t you rather live in a city that has mostly electric or all electric cars in it? Like, the air would be so much better. Wouldn’t you rather live in a world that has huge — like, think of all the Midwest, instead of growing corn to feed cows — RITHOLTZ: Right. WENGER: — super inefficient. If we can grow the meat of the cows in the vast instead, we could have like incredible forests. We could have incredible wildlife areas. Like, we could have this amazing, incredible future. We could have energy reserve. If we build more nuclear power, electricity could basically be almost free. So we have this amazing thing we can go. Instead, we’re headed for this complete disaster and we’re mostly like, “eh.” RITHOLTZ: I think that’s a fair assessment. I think you definitely have that. And I certainly see people my generation, absolutely think it’s not going to impact them or minimum impact, it’s really the grandkids’ problem. WENGER: Yeah. And it’s just — that’s totally, utterly wrong. RITHOLTZ: All right, one other curveball I have to ask you about, which involves Yuval Noah Harari, who says in Sapiens, “All value systems are based on equally valid, subjective narratives, and humans have no privileged position as a species.” You say he’s wrong. Explain. WENGER: Not just wrong, it’s completely dangerous because it opens the door to absolute moral relativism. It’s sort of like, well, if you believe that, then, you know, the ISIS narrative is just as valid, you know, and I just think that’s wrong. And I do think there’s an objective thing, which is humans have knowledge. And by knowledge, I mean, I can read a book today that somebody else wrote in some other part of the world a thousand years ago, right? No other species on the planet has this. I mean, other species have amazing things about them, but none of them has knowledge. And that puts us in a privileged position. By the way, privilege comes with obligation. That’s usually what it used to mean. Today, we think of privilege just it lets you do whatever you want. But it used to mean that you had real obligations, right? And I believe because we have the power of knowledge, we have real obligations to other species. Other species don’t have much of an obligation to us, but we have an obligation to them. RITHOLTZ: And the interesting thing about what you said is not only does no other species have the ability to access anything, anybody has written, anytime in history, pretty much this is the first generation that had access in that way, across — pretty much across the whole board. WENGER: Well, this is the amazing thing about digital technology, right? We could use it to make all the world’s knowledge accessible to everybody in the world. And great things could come from that, right? So there’s some people like Elon Musk and others who are like, “Oh, my God, the population is going to, you know, decrease a lot and that will be bad.” I’m like, no, we have 8 billion people at the moment, peak population. The present trajectory might be 11 billion, although if we don’t get on top of the climate crisis, it will decrease actually rapidly. But we’re making such poor use of it. Why? Because so many people don’t have access to knowledge, don’t have a shot. I always love the story of Ramanujan, the famous mathematician, who used to send a letter to Hardy. And Hardy was like, “We should bring this guy over to England and he would have been a very productive mathematician.” There are Einsteins, and Ramanujans, and Elinor Ostrom, and Marie Curies all around the world today, and we’re not giving them — so we’re vastly undertapping human potential. And we can use digital technology to change that and to give everybody access. And that’s one of the things, one of the great opportunities that we have in this transition to the knowledge age. RITHOLTZ: Quite, quite fascinating. So let me jump to my favorite questions that I ask all of my guests, starting with, tell us what kept you entertained over the past couple of years. What have you been watching or listening to? WENGER: I really don’t watch much. At the moment, the only thing I watch with any kind of regularity Sabine Hossenfelder’s YouTube series called Science Without the Gobbledygook. RITHOLTZ: I’ll take a look at that. I’m a giant fan of YouTube Premium, and I’m always astonished that people I know who are YouTube junkies won’t spring for the 8 bucks a month to pull out commercials and distractions. But YouTube is just an endless rabbit hole. WENGER: Well, YouTube is an example of the best and the worst of the Internet all in one place, right? There’s so much amazing knowledge like Sabine’s videos, Veritasium. I mean, you could learn almost anything from how to fix your dishwasher to how — you know, the theory of general relativity works. At the same time, YouTube is also this place where tons of people, you know, become radicalized or redpilled, or whatever it is, because the algorithm — the algorithm has the wrong objective function, right? Its objective function is engagement. It’s not lifting people up. RITHOLTZ: Tell us about some of your mentors who helped shape your career. WENGER: I was super, super fortunate when I was an early teenager. We talked about this, when I first fell in love with computers. I lived in a relatively small village in Germany. And there was one computer science student there who was maybe 10 years older than I was. And he just spent time with me, and he gave me his books, and he gave me his floppy disks with software, and he helped me sort of understand all this. And I’m forever grateful to (Anstur Guenther), wherever you are in the world. RITHOLTZ: That’s really interesting. Have you spoken to him anytime recently? WENGER: No, because I haven’t been able to find him. Basically, he seems to have disappeared. RITHOLTZ: Well, if you’re listening, reach out to Albert. Tell us — we mentioned a number of books. Tell us about some of your favorite and what you’re reading right now. WENGER: Favorites, I would say David Deutsch, “The Beginning of Infinity” is definitely one of my favorites. RITHOLTZ: I just ordered that because of you. WENGER: I’m reading at the moment, a book by Ada Palmer called “Perhaps the Stars.” It’s the fourth book in a series called the Terra Ignota Series. She’s a professor at the University of Chicago. RITHOLTZ: What sort of advice would you give to a recent college grad who is interested in a career in either entrepreneurship or venture capital? WENGER: Develop a mindfulness practice, you know, whatever works for you, whether that’s yoga, running, for me, it’s conscious breathing. I just think it’s such a superpower not to get hijacked by your emotions. It’s a true superpower. And the more humans can cultivate it, the more we can achieve. RITHOLTZ: That’s really, really intriguing. And our final question, what do you know about the world of venture today that you wish you knew 30 or so years ago when you were first getting started? WENGER: There will always be another bubble. RITHOLTZ: There will always be another bubble. That’s amazing. Just human nature can’t be avoided. WENGER: It can’t be avoided. RITHOLTZ: And what should we do in anticipation of during and after bubbles? WENGER: We should acknowledge that they will come, that they’re part of how we operate, that you can make money before, during and after. RITHOLTZ: There you go. Really, really fascinating stuff. We have been speaking with Albert Wenger. He is managing partner at Union Square Ventures. If you enjoy this conversation, well, be sure to check out any of our previous 400 or so discussions we’ve had over the past eight years. You can find those at iTunes, Spotify, or wherever you get your favorite podcasts from. We love your comments, feedback and suggestions. Write to us at Sign up for my daily reading list at Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack staff that helps put these conversations together each week. Sarah Livesey is my audio engineer. Sean Russo is my head of Research. Paris Wald is my producer. Atika Valbrun is our project manager. I’m Barry Ritholtz. You’ve been listening to Masters in Business on Bloomberg Radio. END   ~~~   The post Transcript: Albert Wenger appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureSep 20th, 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

Anthony Fauci: From AIDS To COVID-19, A Pharma Love Story

Anthony Fauci: From AIDS To COVID-19, A Pharma Love Story Opinion authored by Lorenzo Puertas via The Epoch Times (emphasis ours), After forty-eight years of leading the U.S. government’s responses to infectious diseases, Dr. Anthony Fauci recently announced his plans to retire at the end of the year. His story warrants a closer look for what it tells us about American politics, business, and health care. For decades before his recent fame, Fauci has been a medical researcher credited with important new understandings of the human immune response, particularly in HIV and AIDS. He also helped develop therapies for several previously fatal diseases, including a treatment of vasculitis which turned a 98 percent mortality rate into a 93 percent survival rate. For most of his career, he has been the world’s most-cited researcher on AIDS and infectious diseases. He has received many awards, including the Presidential Medal of Freedom. Ironically, Fauci has also presided over a decades-long decline in the overall health of American citizens. During his time in public health, a great number of chronic illnesses have become commonplace. Food allergies, autoimmune diseases, and cancer now affect more than half of American children. Autism, once rare, now affects 1 in 44 children. National Institute of Allergy and Infectious Diseases Director Dr. Anthony Fauci testifies during a Senate Appropriations Subcommittee on Labor, Health, and Human Services, Education, and Related Agencies hearing, on Capitol Hill in Washington on May 17, 2022. (Shawn Thew/Pool/AFP via Getty Images) A Lifetime in Public Health Anthony Fauci was born in Brooklyn in 1940, the son of a pharmacist. Pharmacy was the family business, and both his mother and sister worked in his father’s shop beneath their apartment. As a young man, Fauci studied medicine at Cornell University, graduating first in his class. After his residency in 1966, he took a research job at the National Institutes of Health (NIH), and he has worked for the U.S. government ever since. In his five decades in public health, Fauci has advised every President since Ronald Reagan. Since 1984 he has been the head of the National Institute for Allergies and Infectious Disease (NIAID), one of 27 institutes within the NIH, given the mission of researching and preventing infectious, immunologic, and allergic diseases. For many Americans, Fauci has been the trusted face of the U.S. government response to the pandemic. It was his confident explanations, both to the public and to policymakers, which led to the use of lockdowns, business closures, masking, and vaccines as the response to the virus. His many critics see a different Anthony Fauci—a bureaucrat who seems to have made a career of putting politics and corporate profits above public health. “Dr. Fauci has shaped the American medical world,” said Mary Holland, President of Children’s Health Defense, in an interview with The Epoch Times. “He’s moved American health institutions, NIH in particular, to a very intertwined relationship with the pharmaceutical industry.” Holland’s nonprofit organization, chaired by Robert F. Kennedy, Jr., has been a prominent critic of Dr. Fauci’s policies—particularly the mass vaccination of American citizens. Censorship and Control “Dr. Fauci and his NIAID have played a very dark role in COVID,” Holland said. “The level of propaganda we have lived through in the last two years is unprecedented in my lifetime. I lived in the Soviet Union after law school, fighting for human rights and working against government propaganda and censorship. And now we are living through that in the United States.” According to Holland, Fauci is the key player in the U.S. government’s efforts to control all information relating to the pandemic and the virus. “The documents are coming out that show that the government has been censoring us, suppressing factual information that relate to this virus and the pandemic.” Even criticism of Fauci has been censored, says Holland. “Robert Kennedy’s new book, ‘The Real Anthony Fauci’ has been suppressed at every turn,” she said. The 2021 book takes a hard look at Fauci’s career and his handling of the COVID-19 pandemic. Kennedy has found it almost impossible to promote his book. “No major publication in the country would review the book,” said Holland. “The New York Times would not include it on their bestseller list, and he [Kennedy] was not invited on any major media platform, except for Tucker Carlson and The Epoch Times. The level of censorship has been astonishing.” Kennedy isn’t the only one censored. For two years, mainstream media outlets have ignored the scientists who have questioned Fauci’s views. These scientists have seen their ideas rejected (or later retracted) by medical journals, denounced by government officials, and censored by social media platforms. Fauci has been candid about his suppression of dissent. “Attacks on me, quite frankly, are attacks on science,” Fauci told CNBC in a June 2021 interview. In May, the attorneys general for Missouri and Louisiana filed a lawsuit against President Joe Biden and other White House officials, accusing them of violating the First Amendment by colluding with social media giants to suppress information about the pandemic. According to recently released court documents, the Biden administration worked so closely with social media that Facebook head Mark Zuckerberg gave Fauci his personal phone number when the crackdown on COVID-19 information began. But why this need for control? What information needed to be covered up? According to Holland, it’s the role that Fauci may have played in creating, and prolonging, this pandemic. The P4 laboratory (L) on the campus of the Wuhan Institute of Virology in Wuhan, Hubei Province, China, on May 27, 2020. (Hector Retamal/AFP via Getty Images) “By all appearances they have tried to cover up their role in funding lethal gain of function research in China,” said Holland. “They have also suppressed the use of lifesaving early treatments like ivermectin and hydroxycholoroquine, and they have suppressed valuable research into preventive measures that could have saved countless lives.” The result, says Holland and other critics, is a dark period in American history. Fauci’s Pandemic? Starting in early 2020, Americans faced unprecedented government intrusion in their lives. Business and school closures, lockdowns, mask mandates—and the man behind these government policies has been Anthony Fauci. In countless interviews and press conferences, Fauci positioned himself as the one true source of correct COVID-19 information and guidance. Emergency orders at the federal, state, and local levels were based on Fauci’s opinions. Fauci himself took credit for the policy of lockdowns, saying in October 2020, “I recommended to the president that we shut the country down. That was a very difficult decision because I knew it would have very serious economic consequences.” “Anthony Fauci is clearly at the very center of all things COVID,” Holland said. “And he has been in charge of controlling the information about the pandemic.” “From the very beginning, when many scientists were pointing to a lab origin for this virus,” said Holland, “Anthony Fauci put a stop to that important debate.” Despite the discovery of NIAID’s funding of gain-of-function research on coronaviruses at the Wuhan Institute of Virology, Fauci continues to say that the virus likely has a natural origin. A similar thing happened with scientific opposition to Fauci’s policies. The Great Barrington Declaration, written in October 2020 and signed by over 60,000 doctors and scientists, opposed lockdowns and advocated a new policy of protecting only the most vulnerable populations while allowing the rest to live freely and develop natural immunity. Fauci called the Declaration “ridiculous” and “very dangerous,” and led a campaign to attack the authors and signatories, instead of their ideas. “It has been remarkable,” Holland said, “to see one of the most influential figures in American life purposely suppressing truthful information—about a lab leak, about scientists who said there should be no lockdowns, about the value of masks and the risks of vaccines.” “In the COVID response we saw extraordinary corruption,” said Holland. “The origin of the virus was covered up. Important treatments were suppressed. And vaccines were authorized, and mandated, on inadequate science.” Ivermectin tablets packaged for human use. (Natasha Holt/The Epoch Times) Suppression of Cures One of the most astonishing aspects of Fauci’s leadership during the pandemic has been his strong opposition to any potential treatment. In two years, neither Fauci nor any U.S. government agency has published a single treatment protocol for COVID-19 patients. In contrast, China had a treatment protocol online by mid-March of 2020. The result of an organized collection of data from hundreds of hospitals treating thousands of patients, the Chinese protocol included simple solutions like saline nasal lavage and antiseptic mouthwash to reduce viral loads, and cheap drugs like zinc, Pepcid, chloroquine, and antibiotics. As of this writing, the United States still has no official treatment protocol. And no protocols have been proposed by any major American university or research hospital. Yet every American doctor who has tried to publish one has been quickly censored and ridiculed. Dr. Peter McCullough knows this firsthand. The author of the protocol that became the most downloaded medical paper of 2020, McCullough was among the first American doctors to develop, test, and publish a successful treatment protocol, resulting in an 85 percent reduction in hospitalizations and death among his patients. A medical doctor and author of over 600 peer-reviewed research articles, McCullough at first had no thought of developing his own treatment plan. But he soon became alarmed at the government’s failure to provide treatment advice to America’s doctors. By May 2020, McCullough began taking action. He quickly set up a network of doctors to share information about effective treatments—something Fauci never did. For his efforts, he found himself sued by Baylor University, had his Wikipedia page re-written to label him a source of “COVID misinformation”, and had his reputation attacked in print and online. All while major medical institutions did nothing to find a treatment. “They didn’t even try,” McCullough is quoted as saying in “The Real Anthony Fauci.” “Harvard, John Hopkins, Duke, you name it. There wasn’t an ounce of original research coming out of America to fight COVID—other than vaccines.” Across the country, Dr. Pierre Kory was fighting the same battle. The co-founder of the Front Line COVID-19 Critical Care Alliance (FLCCC), Kory and a team of doctors were quickly developing their own protocol and putting it online. Like McCullough, Kory had discovered the effectiveness of ivermectin, hydroxycholoroquine, and a number of other inexpensive and easily available drugs. Kory testified twice to the U.S. Senate explaining the success of his treatment protocol. He also submitted a formal paper to the NIH, which quickly dismissed the results as “insufficient data” lacking proper clinical trials. Another research paper explaining the protocol was retracted by the journal Frontiers in Pharmacology due to “unsupported claims”. “The efficacy of some of these drugs… is almost miraculous. We could have stopped the pandemic in its tracks in the Spring of 2020,” said Kory. “Yet Dr. Fauci refused to promote any of these interventions. It’s not just that he made no effort to find effective off-the-shelf cures—he aggressively suppressed them.” “You had Birx, Fauci, and Redfield doing press conferences every day,” Kory said in an interview. “And not one of them ever treated a COVID patient or worked in an emergency room or ICU. They knew nothing.” “Dr. Fauci’s suppression of early treatments,” said Kory, “will go down in history as having caused the death of half a million Americans.” But why would Anthony Fauci suppress effective treatments? Why attack doctors trying to find a solution? According to Robert Kennedy, it might be because safe and effective treatments for COVID-19 would make the new vaccines unnecessary. Successful treatments aren’t just a marketing challenge for the vaccine manufacturers—they’re a legal obstacle, too. Once a successful treatment for COVID-19 is established, it becomes much less likely that the FDA will grant Emergency Use Authorization (EUA) to new vaccines and new drugs. Under federal law, there must be no approved alternative way of treating or preventing a disease before authorizing an EUA. The EUA under which the experimental vaccines were given to millions of Americans would never have been granted if COVID-19 was known to be an easily treatable disease. In “The Real Anthony Fauci”, Robert Kennedy writes, “His bizarre and inexplicable actions give credence to the suspicions held by many Americans that Dr. Fauci is working to prolong the epidemic in order to impose expensive patented drugs and vaccines on a captive population.” AIDS COVID-19 isn’t the first time that Anthony Fauci has been accused of using public policy to benefit big pharma corporations. Forty years ago, at the height of the AIDS crisis in America, many AIDS activists called Anthony Fauci a sellout to the drug companies. “You are responsible for all government funded AIDS treatment research,” said activist Larry Kramer in an open letter to Fauci in the San Francsico Examiner in 1988. “You are part of a government bureaucracy that values thriving pharmaceutical company entrepreneurism over the health of people with HIV.” Kramer’s criticism: instead of focusing on improving patients’ health, Fauci’s only answer to AIDS was the development of new drugs. “How long will it take you to start focusing on the immune system, how to boost it and how to prevent the opportunistic infections that are killing people with AIDS? Still, you give your blessing to clinical trials of highly profitable toxins…” “You are a pill-pushing pimp that cooperates with drug companies in forcing dangerous concoctions down the throats of a desperate community,” wrote Kramer. “AIDS drugs are not sold to help people, they are sold to make a profit.” White House Chief Medical Adviser on Covid-19 Dr. Anthony Fauci at the National Institutes of Health (NIH) in Bethesda, Md., on Feb. 11, 2021. (Saul Loeb/AFP via Getty Images) Conflicts of Interest Despite the criticism Fauci endured, the AIDS crisis produced the most important opportunity of his career: using NIAID to develop, and profit from, new drugs. His collaboration with pharmaceutical companies quickly grew into a billion-dollar business. The 1980 Bayh-Dole Act allowed NIAID and government scientists like Fauci to directly profit from drug development. Under the law, NIAID was now allowed to file patents on the new drugs that their research was creating, and then license those drug patents back to pharmaceutical companies. Individual government scientists could also put their names on patents and collect royalties. This created a new income stream for Anthony Fauci: royalties on the sales of all drugs developed through NIAID-funded research. Drug development very quickly became the focus of Fauci’s NIAID, and millions of dollars in royalties started to pour in. According to a 2006 investigation by the Associated Press, NIH and NIAID were concealing millions of dollars in royalties paid not just to the agencies, but to individual officials including Fauci, with little regard for the ethical and legal conflicts of interest. This information was not made public until the Associated Press obtained the information under the Freedom of Information Act. In early 2022,, a government watchdog nonprofit, reported over 22,0000 royalty payments totaling nearly $134 million in royalty payments from pharma companies to the NIH and directly to over 1,600 NIH scientists. These payments occurred between 2009 and 2014. Data from 2015 onward is not yet available. As a co-owner of drug and vaccine patents, Fauci himself receives royalty payments, including from the development of the Moderna COVID-19 vaccine. The amount of these payments has not been made public. It is perhaps no coincidence then, that the Biden administration’s COVID-19 plan, “The Path out of the Pandemic”, consists of only one strategy: more government vaccination mandates. “Think about it,” said Children’s Health Defense president Mary Holland. “NIAID is a joint venture partner with Moderna! How can the government be a joint venture partner with a for-profit corporation? And then set public policy to force the use of that product? The conflict of interest is astounding.” Experiments in New York Drug development for AIDS created a little-known episode in Fauci’s career. Starting in 1985, the NIAID provided funding for clinical drug trials on HIV-positive children, studies which included children in the New York foster care system. According to a 2009 report by the Vera Institute of Justice, 25 of the children involved in these experiments died, though there is no evidence that they died as a direct result of the experiments. “NIAID under Fauci exploited the most vulnerable in our society to develop new drugs,” said Holland. “These were poor children, without parents, many of whom were already very sick. Episodes like this, make one genuinely recall other medical atrocities in history, experiments conducted on vulnerable people without proper informed consent.” Experiments in Africa Experimentation on humans has been a key part of Fauci’s role in new drug and vaccine development, especially in Africa in the search for a solution to AIDS. Since the mid-1990s Fauci has been the chief promoter of the quest for an HIV vaccine. Under Fauci’s advice, every American president since Clinton has pledged billions of taxpayer dollars to this project—foreign aid diverted away from food and infrastructure to vaccine manufacturers and their research projects, in the name of eradicating AIDS in Africa. In early 2000, Fauci and Bill Gates formed a unique partnership to control this flow of money. By leveraging the research funding available through Fauci’s NIAID, Bill Gates’ celebrity philanthropy, the tragedy of AIDS, and the massive wealth of pharmaceutical companies, Fauci and Gates acquired tremendous influence over health policy around the world. This Fauci-Gates partnership is detailed in a 2008 report in the Journal of European Molecular Biology, provocatively titled “The Gates Foundation: How Sixty Billion Dollars and One Famous Person Can Affect Spending and Research Focus of Public Agencies”. As many human rights organizations have pointed out, Fauci and Gates have spent decades profiting from the use of Africans as test subjects for experimental drugs that often do great harm. And there still is no vaccine for HIV. Read more here... Tyler Durden Wed, 09/14/2022 - 20:20.....»»

Category: smallbizSource: nytSep 14th, 2022