May 232019
 


Leonardo da Vinci The madonna of the carnation1478-80

 

Donald Trump, Nancy Pelosi Warfare Hits New Level (USA Today)
AG Barr Puts Former Intel Bosses Clapper, Brennan On Notice (Brock)
Trump To Declassify “Bucket 5” Russiagate Docs (ZH)
Avenatti Indicted For Defrauding Stormy Daniels, Extorting Nike (ABC)
Inside The Epic Fall Of Michael Avenatti (VF)
Credit-Card Charge-Offs Rise Across Banking System (WS)
The Corporate Maginot Line (Lebowitz)
The Truth About US Inequality (Colombo)
Xi Calls Trade War “New Long March” (R.)
Panasonic, Toshiba Join Firms Stepping Away From Huawei (AFP)
FAA Chief Has No Timetable For Boeing 737 MAX Approval (R.)
UK Government To Lodge Complaint Over UN’s Austerity Report (G.)
Facebook, Instagram and Twitter Are Parasites (Hawley)

 

 

Whoever you favor, it seems obvious that calling for impeaching Trump makes bipartisan work on issues impossible. Pelosi doesn’t do that, but most of her party does.

Donald Trump, Nancy Pelosi Warfare Hits New Level (USA Today)

President Donald Trump’s decision to storm out of an infrastructure meeting with Democrats left lawmakers scrambling to assess whether the fallout would reach other White House priorities, including a pending trade deal with Canada and Mexico that the president hopes will replace NAFTA. Fuming about longstanding Democratic investigations, Trump refused to shake hands with Democrats Wednesday and walked out of a meeting, prompting House Speaker Nancy Pelosi to accuse the president of throwing “a temper tantrum for us all to see.” Trump disputed the characterization in a tweet late Wednesday. “This is not true. I was purposely very polite and calm, much as I was minutes later with the press in the Rose Garden,” Trump wrote. “Can be easily proven. It is all such a lie!”


Trump has already indicated he’s prepared to push most of his legislative agenda off until after the 2020 election, a recognition that Democrats and Republicans were unlikely to reach consensus on much of anything as nearly two dozen Democratic presidential candidates barnstorm early primary states in the hunt for the nomination. Trump appeared to further close the door on bipartisan agreement with a hastily called statement Wednesday in the Rose Garden in which he indicated Washington could not be on an “investigations” track while also pursuing legislation. “Let them play their games. We’re going to go down one track at a time,” Trump said of Democrats. “Let them finish up. And we’ll be all set.”

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Kevin R. Brock, former assistant director of intelligence for the FBI, was an FBI special agent for 24 years and principal deputy director of the National Counterterrorism Center (NCTC).

AG Barr Puts Former Intel Bosses Clapper, Brennan On Notice (Brock)

Attorney General William Barr has signaled that his interest in examining the origins of the investigation into the Trump campaign extends beyond whether the FBI operated “by the book,” as former FBI Director James Comey asserts. Barr also wants to understand the role that the larger intelligence community, or IC, may have played in all of this. Barr has thrown punches that have left an interesting mix of characters with a standing eight count. Certain eyes around D.C. are a little glassy right now. Barr’s words and actions are telling. First, he raised the concern that the Trump campaign was “spied” upon. His use of the word “spying” appears more calculated than casual. The wailing and gnashing of teeth that followed is also telling.

“The FBI doesn’t spy” became the sputtering counter-refrain of those trying to mask their nervousness. It’s a fair point that’s beside the point. The FBI is charged with acting under strict legal restrictions and court orders. Spying is not a term traditionally associated with those activities. But it also misses the point Barr appears to be making. The IC does spy; that’s what they do. Barr may have been referring less to the FBI and more to the IC’s possible murky involvement. This seems to be validated by Barr’s second haymaker in as many weeks: his appointment of a surrogate investigator, U.S. Attorney John Durham.

Why would the attorney general add a third investigation to those under way by Department of Justice Inspector General Michael Horowitz and U.S. Attorney John Huber? Because those investigations are focused on the FBI. Durham’s assignment is not similarly constrained; his marching orders appear broader. Through Durham, Barr can start dusting for fingerprints across the government, not just the FBI. The squirming has begun.

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Wonder what will be kept secret.

Trump To Declassify “Bucket 5” Russiagate Docs (ZH)

As Congressional Democrats insist on conducting post-Mueller probes into President Trump and those around him, much of the recent infighting and backpedaling we’ve seen from former Obama intel chiefs is starting to make sense. Appearing with Fox News’s Sean Hannity Tuesday night, The Hill’s John Solomon revealed that according to his sources (and Hannity’s as well), President Trump will begin declassifying ‘Russiagate’ documents in the next 6-7 days. Among those will be the so-called “Bucket Five” – documents which were originally presented to the Gang of Eight in 2016, which included everything the FBI and DOJ used against Trump campaign aide Carter Page – including the FISA surveillance application and its underlying exculpatory intelligence documents which the FISA court may have never seen.

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The MSM’s favorite boy. What a story. He even forged Stormy Daniels’ signature. Tried to shake down Nike for $20 million. He could spend the rest of his life in jail.

Avenatti Indicted For Defrauding Stormy Daniels, Extorting Nike (ABC)

Federal prosecutors in New York charged Michael Avenatti with additional financial crimes Wednesday, including allegedly forging the signature of his former client Stormy Daniels and diverting nearly $300,000 owed to her for a book advance into his own account, according to court records filed on Wednesday. Prosecutors said that he then used money he took from Daniels to make monthly payments on his Ferrari, as well as to cover airfare, dry cleaning, hotels and restaurant bills, as well as payroll and insurance costs for his law firm’s employees. The new charges accuse Avenatti of misappropriating money that was supposed to be paid to Daniels when Avenatti was representing the adult film actress in her public battle against President Trump and his former attorney Michael Cohen.


“Avenatti used misrepresentations and a fraudulent document purporting to bear his client’s name and signature to convince his client’s literary agent to divert money owed to Avenatti’s client to an account controlled by Avenatti,” Manhattan U.S. Attorney Geoffrey Berman said in a statement. “Avenatti then spent the money principally for his own personal and business purposes.” Federal prosecutors in Manhattan – who have already accused Avenatti of extortion in a case involving Nike – also indicted him separately on extortion charges in the Nike case on Wednesday.

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Background at Vanity Fair.

Inside The Epic Fall Of Michael Avenatti (VF)

[..] federal prosecutors in Los Angeles filed a 197-page complaint accusing him of wire and bank fraud, in which the office detailed allegations of Avenatti misappropriating client settlement money for personal use (the receipts were gaudy: $216,720 to a Neiman Marcus, six figures to a Porsche dealership, and $68,500 at a luxury watch store). The complaint also claimed that Avenatti defrauded a bank by submitting false tax returns in order to obtain millions of dollars in loans. A few weeks later, on April 11, federal officials in California handed down a 36-count indictment, including 19 tax-related charges, 10 counts of wire fraud, 4 counts of bankruptcy fraud, and 2 bank-fraud charges. Avenatti had “[taken] money from one scheme and [used] it to lull clients, to string them along, to prevent them from going to authorities and [took] money from different pots as needed.”


One such client was a paraplegic man who had reached a $4 million agreement to settle a case related to his injuries but had not received the money. Avenatti allegedly deposited some of the settlement into a personal account associated with his car-racing team. Avenatti pleaded not guilty. He would not get into specifics about the case, but told me, “I look forward to all of the documents and all of the facts coming to light when it comes to the allegations set forth.” He noted: “The facts, in reality, are not as clear-cut as the government has made them out to be.”

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Are we about to see bank failures again?

Credit-Card Charge-Offs Rise Across Banking System (WS)

In the first quarter, the credit-card “charge-off” rate at the 4,650 or so smaller US commercial banks – all banks other than the largest 100 banks – ticked down to 7.37%, the sixth quarter in a row above 7%. During the peak of the Financial Crisis, the charge-off rate at these banks was above 7% only four quarters, but not in a row, topping out at 8.9%. These smaller banks have taken a lot of risk in their credit card strategies in recent years, going aggressively after subprime customers that had run out of luck at the largest banks. The credit-card charge off rate at the largest 100 banks rose to 3.78%, the highest since the first quarter of 2013. For all commercial banks combined, the charge-off rate rose to 3.83%, the highest since the fourth quarter 2012. The largest banks have learned a costly lesson during the Financial Crisis, when they got hammered with double-digit charge-off rates and have since focused on customers with lower risk profiles. And yet, slowly but surely, credit card charge-offs are rising across the board:

These data points that the Federal Reserve Board of Governors reported Tuesday afternoon are another warning in consumer land where serious auto-loan delinquencies, driven by subprime loans, have reached Q3 2009 levels. Credit cards have not yet reached this stage, but problems are beginning to pile up. A credit card loan is deemed “delinquent” when it is 30 days or more past due. Balances are removed from the delinquency basket when the customer cures the delinquency, or when the bank “charges off” the delinquent balance (net of whatever it was able to recover) against its loan loss reserves. The charge-off rate is figured as a percent of average credit-card balances, and is annualized.


The delinquency rate on credit-card loan balances at commercial banks other than the largest 100 banks declined to 5.43%, after having spiked to 6.2% in the third quarter. During peak-Financial Crisis, the delinquency rate at these smaller banks topped out at 5.9%. So these smaller banks got walloped last year, and they’re now scrambling to clean up, and tighten the lending standards.

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Remember AAA? Guess where your pension fund is invested today.

The Corporate Maginot Line (Lebowitz)

Since the post-financial crisis era began more than a decade ago, record low-interest rates and the Fed’s acquisition of $4 trillion of the highest quality fixed-income assets has led investors to scratch and claw for any asset, regardless of quality, offering returns above the rate of inflation. Financial media articles and Wall Street research discussing this dynamic are a dime-a-dozen. What we have not heard a peep about, however, are the inherent risks within the corporate bond market that have blossomed due to the way many corporate debt investors are managed and their somewhat unique strategies, objectives, and legal guidelines.

[..] Often overlooked, the bifurcation of investor limits and objectives makes an analysis of the corporate bond market different than that of the equity markets. The differences can be especially interesting if a large number of securities traverse the well-defined BBB-/BB+ “Maginot” line, a metaphor for expensive efforts offering a false line of security. The U.S. corporate bond market is approximately $6.4 trillion in size. Of that, over 80% is currently rated investment grade and 20% is junk-rated.This number does not include bank loans, derivatives, or other forms of debt on corporate balance sheets.

Since 2000, the corporate bond market has changed drastically in size and, importantly, in credit composition. Over this period, the corporate bond market has grown by 378%, greatly outstripping the 111% growth of GDP. The bar chart below shows how the credit composition of the corporate bond market shifted markedly with the surge in debt outstanding.

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Very long from my friend Jesse. Haven’t had time to read it yet, it’s a huge project. named Explaining Capitalism. Agree with most of what I have seen, but he has to be careful about terminology. Elizabeth Warren is not a far left politician for most people in the world, that’s at best a narrow US view.

Also: a 70% top-tax-rate is not by definition socialist; we know because the US in the 1950s-60s was not a socialist country.

As for wealth redistribution, I’m afraid you can’t escape it, because the whole edifice has gotten so out of whack. Even if you would turn back all the Fed’s failed policies today, you wouldn’t repair the consequences. Call that socialist if you want, but if you don’t do it, all hell will break loose.

The Truth About US Inequality (Colombo)

Rising economic inequality and how to address it has been one of the most important issues in the United States since the Great Recession ended in 2009. Rising inequality has spurred a powerful left-wing economic movement that kicked off with Occupy Wall Street in 2011, led to the 2016 presidential campaign of socialist Bernie Sanders (which was very popular with young Americans), and has now contributed to the rise and growing clout of far-left politicians including Elizabeth Warren and millennial socialist Alexandria Ocasio-Cortez, who are both calling for wealth redistribution policies. At the core of this left-wing economic movement is a growing disbelief and distrust in capitalism itself, as well as the belief that an excessive rich-poor gap is an inevitable outcome of capitalism.


As a result, young Americans now favor socialism over capitalism. Even 45% of Republican voters support Alexandria Ocasio-Cortez’s 70% top-tax-rate proposal, while “conservative” Fox News host Tucker Carlson threw in the towel on capitalism. The report you are reading – “The Truth About U.S. Inequality” – completely turns the conventional wisdom (i.e., the left-biased explanation) about growing U.S. wealth and income inequality on its head. Here’s the reality in a nutshell: growing U.S. economic inequality is not the fault of capitalism, but the byproduct of unbacked fiat (aka “paper”) currency, central banking/the Federal Reserve, and a massive wealth bubble that has been inflated by the Fed. Instituting free market capitalism and sound money is actually the only solution to America’s growing economic inequality.

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Still longing back to Mao.

Xi Calls Trade War “New Long March” (R.)

China must prepare for difficult times as the international situation is increasingly complex, President Xi Jinping said in comments carried by state media on Wednesday, as the U.S.-China trade war took a mounting toll on tech giant Huawei. The world’s two largest economies have escalated tariff increases on each other’s imports after talks broke down to resolve their dispute, and the acrimony has intensified since Washington last week blacklisted Chinese telecom equipment company Huawei. The listing, which curbs Huawei’s access to U.S.-made components, is a potentially devastating blow for the company that has rattled technology supply chains and investors, and saw several mobile carriers on Wednesday delay the launch of new Huawei smartphone handsets.


During a three-day trip this week to the southern province of Jiangxi, a cradle of China’s Communist revolution, Xi urged people to learn the lessons of the hardships of the past. “Today, on the new Long March, we must overcome various major risks and challenges from home and abroad,” state news agency Xinhua paraphrased Xi as saying, referring to the 1934-36 trek of Communist Party members fleeing a civil war to a remote rural base, from where they re-grouped and eventually took power in 1949. “Our country is still in a period of important strategic opportunities for development, but the international situation is increasingly complicated,” he said. “We must be conscious of the long-term and complex nature of various unfavorable factors at home and abroad, and appropriately prepare for various difficult situations.”

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Feels like this is going to take a long time.

Panasonic, Toshiba Join Firms Stepping Away From Huawei (AFP)

Japan’s Panasonic said Thursday it would stop supplying some components to Huawei, joining a growing list of firms distancing themselves from the Chinese telecoms giant after a US ban over security concerns. Japan’s Toshiba also announced it was temporarily halting shipments to Huawei to check whether US-made parts were involved, in order to comply with Washington’s new restrictions. The moves came a day after major Japanese and British mobile carriers said they would delay releasing new Huawei handsets, upping the pressure on the world’s second-largest smartphone manufacturer.


In an official statement emailed to AFP, Panasonic said it had announced in an “internal notification” that it would “suspend transactions with Huawei and its 68 affiliates that were banned by the US government”. It declined to comment on “other transactions that are not banned by the US”. Asked about its opinion about the news, Huawei pointed to a statement on Panasonic’s Chinese website that said the firm was supplying Huawei “normally” and doing so “strictly abiding by the relevant laws and regulations of countries and regions where Panasonic is present”.

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Loud calls for simulators. Which don’t exist. First one to be delivered by December. This ain’t over.

FAA Chief Has No Timetable For Boeing 737 MAX Approval (R.)

The acting head of the Federal Aviation Administration said on Wednesday he does not have a specific timetable to approve Boeing Co’s 737 MAX for flight after two fatal crashes since October prompted the plane to be grounded worldwide. The FAA is meeting with more than 30 international air regulators including China, the European Union, Brazil and Canada on Thursday to discuss a software fix and new pilot training that Boeing has been developing to ensure the jets are safe to fly. “It’s a constant give and take until it is exactly right,” Deputy FAA Administrator Dan Elwell told reporters of the discussions with Boeing. “It’s taking as long as it takes to be right,” he said, adding: “I’m not tied to a timetable.”

[..] Asked if it is realistic that the 737 MAX could be flying again by August, Elwell declined to be specific. “If you said October I wouldn’t even say that, only because we haven’t finished determining exactly what the training requirements will be,” Elwell said. “If it takes a year to find everything we need to give us the confidence to lift the (grounding) order so be it.” Elwell said he plans to share the FAA’s “safety analysis that will form the basis for our return to service decision process” on Thursday. But he said the agency is still waiting for Boeing to formally submit the software upgrade for approval, and emphasized the FAA has not decided on the revised training requirements, including whether to require simulator training.

Elwell rejected any idea that he was trying to win consensus with international regulators over the path to re-approving the MAX at the meeting. “We have to be the first to lift the order. We are the state of design,” he said. [..] Foreign regulators have signaled disagreements over measures to end the grounding, with Canadian Transport Minister Marc Garneau calling in April for pilots to receive simulator training for the MAX, rather than just computer courses. Canada and Europe said on Wednesday they would bring back the grounded aircraft on their own terms if their specific concerns are not addressed. “From our point of view, if we all work together and we all reach the same aim, fine. If we don’t, we’ll choose our own time to decide when the planes are safe to fly again,” Canada’s Garneau told Reuters in an interview.

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The Tories are set for historic losses in the EU elections this weekend. They feel the pressure. Getting rid of May won’t solve a thing.

UK Government To Lodge Complaint Over UN’s Austerity Report (G.)

The work and pensions secretary, Amber Rudd, plans to lodge a formal complaint with the UN about the damning report on austerity in Britain by its special rapporteur on extreme poverty, Philip Alston. Rudd will argue that Alston is politically biased and did not do enough research. The minister is seeking guidance from the Foreign Office on the best way to respond after Alston compared her department’s welfare policies to the creation of Victorian workhouses. Alston quoted the 17th-century philosopher Thomas Hobbes to warn that unless austerity was ended and welfare cuts were reversed, millions of poorer Britons faced lives that would be “solitary, poor, nasty, brutish and short”.

The 21-page report said the government appeared unwilling to debate the impact of its austerity policies since 2010, which it said were “in clear violation of the country’s human rights obligations”. Alston accused ministers of “window dressing to minimise political fallout” by insisting the country was enjoying record lows in absolute poverty, children in workless households and unemployment. The “endlessly repeated” mantra about rising employment overlooked that “close to 40% of children are predicted to be living in poverty two years from now, 16% of people over 65 live in relative poverty and millions of those who are in work are dependent upon various forms of charity to cope,” he said. The report will be formally presented to the UN Human Rights Council in Geneva on 27 June.

The government believes Alston, a New York-based human rights lawyer, could not credibly have reached his conclusions after only an 11-day trip to the UK. Last November he visited nine towns and cities in England, Scotland, Northern Ireland and Wales, holding town hall meetings and visiting poverty-related charities and organisations including food banks and youth programmes. Rudd is said to be particularly frustrated by Alston’s accusation that the government was responsible for the “systematic immiseration of a significant part of the British population”. She also believes Alston ventured off his beat by making criticisms about cuts to police numbers and legal aid. In a statement, the government said his report was “a barely believable documentation of Britain based on a tiny period of time spent here” and “a completely inaccurate picture of our approach to tackling poverty”.

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Sen. Josh Hawley, R-Missouri, is on the Judiciary Committee’s Subcommittee on Antitrust, Competition Policy and Consumer Rights. He wants Facebook, Instagram and Twitter to disappear completely.

Facebook, Instagram and Twitter Are Parasites (Hawley)

Social media consumers are getting wise to the joke that when the product is free, they’re the ones being sold. But despite the growing threat of consumer exploitation, Washington still shrinks from confronting our social media giants. Why? Because the social giants have convinced the chattering class that America simply can’t do without them. Confront the industry, we’re told, and you might accidentally kill it — and with it, all the innovation it has (supposedly) brought to our society. Maybe. But maybe social media’s innovations do our country more harm than good. Maybe social media is best understood as a parasite on productive investment, on meaningful relationships, on a healthy society.

Maybe we’d be better off if Facebook disappeared. Ask the social giants what it is that they produce for America and you’ll hear grand statements about new forms of human interaction. But ask where their money comes from and you’ll get the real truth. Advertising is what the social giants truly care about, and for an obvious reason. It’s how they turn a profit. And when it comes to making money, they’ve been great innovators. They’ve designed platforms that extract massive amounts of personal data without telling consumers, then sell that data without consumers’ permission.

And in order to guarantee an audience big enough to make their ads profitable, big tech has developed a business model designed to do one thing above all: addict. Facebook, Twitter, Instagram — they devote massive amounts of money and the best years of some of the nation’s brightest minds to developing new schemes to hijack their users’ neural circuitry. That’s because social media only works — to make money, anyway — if it consumes users’ time and attention, day after day. It needs to replace the various activities we enjoyed and did perfectly well before social media existed.

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