Oct 242019
 
 October 24, 2019  Posted by at 8:38 am Finance Tagged with: , , , , , , , , , ,  11 Responses »


Rembrandt van Rijn Self portrait with Saskia 1636

 

UK Blocks Spanish Judge From Questioning Julian Assange (El Pais)
Former House Lawyer Says Pelosi’s Impeachment Inquiry ‘Is Illegal’ (WT)
Democrats Set December Impeachment Target, But Obstacles Abound (R.)
Republicans Storm Closed-Door Hearing To Protest Impeachment Inquiry (Hill)
Benghazi Coverup Discussed on Emails to Clinton’s Unsecured Server (ET)
Steele, State and the Alfa Bank Conspiracy Theory Exposed (Solomon)
Oprah Has ‘Begged’ Disney CEO Bob Iger To Run For President (Week)
Biden Allies Push For Super PAC After Lackluster Fundraising Quarter (CNN)
Burn, Neoliberalism, Burn (Escobar)
Kremlin Says US Betrayed Kurds In Syria (R.)
Amazon Rainforest ‘Close To Irreversible Tipping Point’ (G.)

 

 

“It is an automatic procedure, and requests can only be rejected in exceptional cases.”

The lawless are trying to run out the clock on the Spanish probe, because it’s bound to find the CIA’s involvement, and because if Julian, his lawyers and doctors were spied upon, the entire extradition thing may be null and void.

UK Blocks Spanish Judge From Questioning Julian Assange (El Pais)

The British justice system is blocking a Spanish judge’s request to question Julian Assange in London as a witness in a case exploring allegations that the Spanish security firm Undercover Global S.L. spied on the WikiLeaks founder while he was living in the Ecuadorian embassy in London. The British position, unprecedented in these types of requests for judicial collaboration, is being viewed by Spanish judicial bodies as a show of resistance against the consequences that the case could have on the process to extradite the Australian cyberactivist to the United States.

On September 25, Judge José de la Mata sent British authorities an European Investigation Order (EIO) requesting permission to question Assange by videoconference as a witness in the case opened by Spain’s High Court, the Audiencia Nacional, against the owner of UC Global S. L., David Morales, for alleged offenses involving violations of privacy and client-attorney privileges, as well as misappropriation, bribery, money laundering and criminal possession of weapons. Morales was arrested in September and released on bail. Documents and video footage revealed by EL PAÍS show that UC Global S. L. spied on Assange’s meetings with his lawyers, where his legal defense strategy was discussed. Morales allegedly offered recordings of these and other conversations to US intelligence services.

The EIO is a new tool that speeds up cooperation between judges in the EU and circumvents laborious rogatory letters based on instruments of international law. The mechanism came into effect in Spain in 2018. With an EIO, a legal authority from an EU member state can ask a legal authority from another EU country for assistance in obtaining evidence or means of evidence (witness statements, telephone taps, DNA tests and so on). It is an automatic procedure, and requests can only be rejected in exceptional cases.

[..] On October 14, De la Mata sent the British agency a written reply that EL PAÍS has had access to. In the document, the judge expressed his surprise and referred to the “previous cases” in which the UKCA accepted requests for interviews via videoconference. De la Mata also quoted international cooperation treaties that say that the only obstacle in these cases would be if the person being questioned was the accused. “In this case, Julian Assange is a witness, not an accused party,” wrote De la Mata.

In the document, De la Mata also denied that his initial request was unclear: “We have provided a clear context for our case, describing all the events and crimes under investigation.” On the issue of jurisdiction, he replied: “The Spanish judicial system has jurisdiction and is able to hear cases of crimes committed by Spanish citizens outside of the country as long as the event is a crime in the place where it was committed, the victim or the public prosecutor present a criminal complaint, and the suspect has not been sentenced or acquitted in another country.” De la Mata added that the suspect (David Morales) is Spanish, the victim (Assange) has filed a complaint, and the crimes (unlawful disclosure of secrets and bribery) are crimes in the UK.

Read more …

“Nancy Pelosi Democrats Produce More Subpoenas Than Laws…”

Former House Lawyer Says Pelosi’s Impeachment Inquiry ‘Is Illegal’ (WT)

Thanks to a flurry of Ukraine activity, House Speaker Nancy Pelosi and her Democratic majority have approved more subpoenas to investigate President Trump than they have written laws. The subpoena issued Tuesday morning to former Ambassador William Taylor marked the 56th that has been publicly acknowledged and aimed at Mr. Trump and his team. That is 10 more than the 46 House bills that have become law this year. It’s far from a subpoena record, but it is complicating Mrs. Pelosi’s attempt to portray her troops as focused on their agenda. Perhaps more worrying to Mrs. Pelosi’s cause is the conclusion of a former senior oversight attorney for the House, who said the spate of subpoenas issued this month as part of Democrats’ impeachment inquiry is illegal.

Samuel Dewey, a lawyer at McDermott Will & Emery who used to lead investigations for the House Financial Services Committee, said the House Permanent Select Committee on Intelligence, led by Rep. Adam B. Schiff of California, is not authorized under the rules to lead an impeachment probe. “Unless there’s a bunch of stuff that’s not public, which would in itself be extraordinary, there is no way he has jurisdiction to conduct an impeachment inquiry. I think his proceeding is illegal,” Mr. Dewey said. Mr. Schiff’s impeachment inquiry subpoenas have all centered around Mr. Trump’s attempts to rope Ukraine into investigating a potential political opponent, former Vice President Joseph R. Biden. The Washington Times counts 15 publicly acknowledged subpoenas issued on the Ukraine matter so far, including the one Tuesday to Mr. Taylor.

The House also has approved 22 subpoenas related to special counsel Robert Mueller’s investigation into Russian meddling and Trump campaign behavior in 2016, seven subpoenas dealing with the president’s finances, three concerning White House matters such as security clearances or the activities of Trump aide Kellyanne Conway, five subpoenas over immigration policy, three over Mr. Trump’s now-abandoned attempt to ask about citizenship on the 2020 census, and one subpoena to the State Department over U.S. policy in Afghanistan.

[..] Mr. Dewey said Democrats could face a legal challenge over any impeachment-related subpoenas because the House has yet to vote to authorize an inquiry. Mrs. Pelosi created an inquiry by proclamation, turning the reins over to Mr. Schiff. Mr. Nadler, meanwhile, has argued to the courts that he has been in the midst of an inquiry for months. Mr. Dewey said those arguments aren’t frivolous, but “I think they’re wrong.” “I do not think as a matter of law that the Judiciary Committee can exercise the impeachment power without a vote of the full House,” he said. “And I think independently of that, I do not think any other committee can exercise the impeachment power.”

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Two big problems:

1) Pelosi needs to solve the legitimacy issue.
2) Democrats are selectively leaking to the press they like, creating a picture that may not be realistic at all

Democrats Set December Impeachment Target, But Obstacles Abound (R.)

Democratic lawmakers hope to complete their impeachment inquiry into President Donald Trump by year’s end and are coalescing around two articles of impeachment – abuse of power and obstruction, lawmakers and aides told Reuters. But some Democrats fear that a costly distraction may be the looming battle between the Republican Trump and Congress over funding the government when money runs out for many federal operations on Nov. 21, Democratic aides said. Some Democratic lawmakers said they believed they already had gathered enough evidence from the testimony of current and former U.S. officials to impeach Trump for asking Ukraine to investigate a political rival, Joe Biden, a leading contender for the Democratic presidential nomination in 2020.


Other Democrats were more cautious and said more information was needed to solidify the case for impeachment and make it an easier sell to a deeply polarized American public. Only two U.S. presidents have been formally impeached by the House of Representatives, and both were later acquitted by the Senate. Val Demings, a Democratic lawmaker who sits on the House Intelligence and Judiciary committees, said congressional investigators should be able to wrap up their inquiry by December. “We need to be thorough, we need to be methodical, but we need to be timely,” she told Reuters. Three Democratic congressional sources said there had been talk among some Democrats about trying to wrap up hearings and hold an impeachment vote by the Nov. 28 Thanksgiving holiday, but this appeared highly unlikely as of Wednesday.

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Why turn the House into a circus?

Republicans Storm Closed-Door Hearing To Protest Impeachment Inquiry (Hill)

House Republicans stormed a closed-door hearing Wednesday to protest Democrats’ impeachment inquiry process, breaking up the deposition of a top Defense Department official who was testifying about President Trump’s dealings with Ukraine. “They crashed the party,” said Rep. Harley Rouda (D-Calif.), a member of the Oversight and Reform Committee, one of three House panels leading the impeachment probe. Dozens of Republicans, including some members of leadership like House Minority Whip Steve Scalise (R-La.), barged into the secure hearing room in the Capitol basement where Laura Cooper, the deputy assistant secretary of Defense for Russia, Ukraine and Eurasia, was set to provide private testimony.

The deposition got underway after a five-hour delay. Several lawmakers said that, in response to the Republican protest on Wednesday morning, House Intelligence Committee Chairman Adam Schiff (D-Calif.) left the room with Cooper and postponed her interview. “The fact that Adam Schiff won’t even let the press in — you can’t even go in and see what’s going on in that room,” Scalise told reporters outside the hearing room. “Voting members of Congress are being denied access from being able to see what’s happening behind these closed doors, where they’re trying to impeach the president of the United States with a one-sided set of rules, they call the witnesses.”

[..] Some Democrats were outraged by GOP lawmakers bringing cellphones and cameras into a secure room. “In short, they have compromised the security of the room. And they not only brought in their unauthorized devices, they may have brought in the Russian and Chinese with electronics in a secure space,” Rep. Eric Swalwell (D-Calif.) told reporters. Rep. Mark Meadows (R-N.C.), a member of the Oversight Committee and a key Trump supporter, suggested the concerns over the cellphones were overblown. “There’s no cameras or phones in the SCIF, so I think that those phones actually went in, just because everybody went in,” Meadows told reporters. “I can tell you I actually collected phones and brought them back out. You certainly want a secure environment but at the same time I think everybody wants to hear exactly what’s going on.”

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“one of the gravest modern offenses against government transparency.”

Benghazi Coverup Discussed on Emails to Clinton’s Unsecured Server (ET)

Judicial Watch made public on Oct. 21 a 2012 email chain showing multiple senior U.S. State Department executives used then-Secretary of State Hillary Clinton’s unsecured private email to discuss the most sensitive details of the Sept. 11, 2012, terrorist attack on the U.S. Consulate in Benghazi, Libya. Four Americans, including Ambassador Christopher Stevens, died in the assault, which within hours was attributed by the Obama White House to an internet video that critically portrayed Islam and its founder, Mohammed. While Judicial Watch first sought the emails released on Oct. 21 in a 2014 Freedom of Information Act (FOIA) request, they weren’t released to the nonprofit government watchdog until earlier in October by a federal court and only after the group threatened to expand its litigation in the case against the State Department.


It was this FOIA litigation that led to the public disclosure of Clinton’s use of the private email system, according to Judicial Watch. Hundreds of other State Department and White House documents sought in the 2014 suit were previously released, but only after years of litigation and discovery, which continues and may soon include deposing Clinton and Cheryl Mills, her former chief of staff. U.S. District Court Judge Royce C. Lamberth, who has heard much of the Judicial Watch litigation seeking the documents, has called Clinton’s private email system “one of the gravest modern offenses against government transparency.”

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Another ghost story.

Steele, State and the Alfa Bank Conspiracy Theory Exposed (Solomon)

When Russia investigation Special Counsel Robert Mueller finally testified this summer, one of the few substantive revelations he made about something not specifically addressed in his final report involved a long-pedaled allegation that Donald Trump and Vladimir Putin had a secret communications network through a computer server at Russia’s Alfa Bank. “I believe it’s not true,” Mueller testified when questioned by Republican Rep. Will Hurd of Texas, confirming in public what FBI officials had privately told me and other reporters going back to late 2016.


We now have strong evidence that one of the events that gave life to that conspiracy theory was an Oct. 11, 2016 visit by the British intelligence operative Christopher Steele to the State Department, where the author of the now infamous anti-Trump dossier met with Deputy Assistant Secretary of State Kathleen Kavalec. Just a few days after the visit, Kavalec forwarded a document to FBI official Stephen Laycock on Oct. 13, 2016 as a followup to her contact with Steele that offered significant detail about the Alfa Bank theory based on unexplained pings between a server at the bank and one used by the Trump organization on the East Coast.

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Would she settle for Hillary? Why doesn’t Oprah herself run?

Oprah Has ‘Begged’ Disney CEO Bob Iger To Run For President (Week)

The Democratic field isn’t sitting well with Oprah. Despite being enthralled with former Texas Rep. Beto O’Rourke and South Bend, Indiana, Mayor Pete Buttigieg early in the 2020 race, Oprah Winfrey is now reportedly dissatisfied with who’s running. And she’s not the only one — Hillary Clinton is still thinking about jumping into the race, The Washington Post reports. Oprah has made her presidential ambitions for Disney CEO Bob Iger well known, and has reportedly “repeatedly begged” him to run. She said in September she hoped to be “knocking on doors in Des Moines, wearing an ‘Iger 2020’ T-shirt.”


“Bob Iger’s guidance and decency is exactly what the country needs right now,” she continued. Clinton similarly “has not ruled out jumping in herself,” suggesting she’s also seeing “dissatisfaction” with the race’s current frontrunners, two people tell the Post. Party leaders have said they’re worried about former Vice President Joe Biden’s involvement in President Trump’s impeachment, and that the other top-tier candidates, Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), are “too liberal” to beat Trump.

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They might as well heat their villas with the money.

Biden Allies Push For Super PAC After Lackluster Fundraising Quarter (CNN)

A coalition of top Democratic strategists and donors are intensifying conversations about setting up an outside group to bolster Joe Biden’s presidential candidacy, people familiar with the matter tell CNN, aiming to create a super PAC designed to fight back against a barrage of well-funded attacks from President Donald Trump’s campaign. The idea of building an outside organization has been the subject of discussion for weeks by Biden allies, but the conversations intensified in the wake of a cash crunch for the former vice president’s campaign. He reported last week having less than $9 million in the bank, significantly less than his leading rivals.

Although he sits atop or near the top of recent polls, Biden’s lackluster financial performance has set off rounds of public hand-wringing among Democratic establishment figures about his ability to competitively fund his campaign through the battery of state primaries early next year. While Biden has previously spoken out against the creation of a super PAC, which would operate entirely separately from his campaign, several longtime allies say it’s clear that his presidential bid needs help. No final decision has been made about launching the outside group, but allies have started contacting potential vendors and lining up possible donors to fuel a super PAC, sources familiar with the efforts tell CNN. “They know they can use all the help they can get,” one Biden ally told CNN, speaking on condition of anonymity to discuss the group. “Trump is crushing him with spending.”

[..] Biden’s fundraising haul last quarter totaled nearly $15.7 million, but the candidate spent more than he raised, ending the quarter with $8.98 million cash on hand. Biden is outmatched in cash reserves by South Bend Mayor Pete Buttigieg, Sen. Kamala Harris of California, Sen. Elizabeth Warren of Massachusetts, and Sen. Bernie Sanders of Vermont, who has amassed a stockpile of $33.7 million. Biden’s allies are most concerned about combating the attacks coming from Trump. His reelection campaign, joint fundraising committees and the Republican National Committee ended the quarter with a combined $158 million cash on hand.

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Keyword: IMF.

Burn, Neoliberalism, Burn (Escobar)

Neoliberalism is – literally – burning. And from Ecuador to Chile, South America, once again, is showing the way. Against the vicious, one-size-fits-all IMF austerity prescription, which deploys weapons of mass economic destruction to smash national sovereignty and foster social inequality, South America finally seems poised to reclaim the power to forge its own history. Three presidential elections are in play. Bolivia’s seem to have been settled this past Sunday – even as the usual suspects are yelling “Fraud!” Argentina and Uruguay are on next Sunday. Blowback against what David Harvey has splendidly conceptualized as accumulation by dispossession is, and will continue to be, a bitch. It will eventually reach Brazil – which as it stands continues to be torn to pieces by Pinochetist ghosts.

Brazil, eventually, after immense pain, will rise up again. After all, the excluded and humiliated all across South America are finally discovering they carry a Joker inside themselves. The question posed by the Chilean street is stark: “What’s worse, to evade taxes or to invade the subway?” It’s all a matter of doing the class struggle math. Chile’s GDP grew 1,1% last year while the profits of the largest corporations grew ten times more. It’s not hard to find from where the huge gap was extracted. The Chilean street stresses how water, electricity, gas, health, medicine, transportation, education, the salar (salt flats) in Atacama, even the glaciers were privatized. That’s classic accumulation by dispossession, as the cost of living has become unbearable for the overwhelming majority of 19 million Chileans, whose average monthly income does not exceed $500.

[..] Evo Morales represents a project of sustainable, inclusive development, and crucially, autonomous from international finance. No wonder the whole Washington Consensus apparatus hates his guts. Economy Minister Luis Arce Catacora cut to the chase: “When Evo Morales won his first election in 2005, 65% of the population was low income, now 62% of the population has access to a medium income.” The opposition, without any project except wild privatizations, and no concern whatsoever for social policies, is left to yell “Fraud!”, but this could take a very nasty turn in the next few days. In the tony suburbs of southern La Paz, class hate against Evo Morales is the favorite sport: the President is referred to as “indio”, a “tyrant” and “ignorant”. Cholos of the Altiplano are routinely defined by white landowning elites in the plains as an “evil race”.

Read more …

Russia in control.

Kremlin Says US Betrayed Kurds In Syria (R.)

The Kremlin said on Wednesday that the United States had betrayed and abandoned the Syrian Kurds and advised the Kurds to withdraw from the Syrian border as per a deal between Moscow and Ankara or be mauled by the Turkish army. The comments by Kremlin spokesman Dmitry Peskov to Russian news agencies followed a deal agreed on Tuesday between Russia and Turkey that will see Syrian and Russian forces deploy to northeast Syria to remove Kurdish YPG fighters and their weapons from the border with Turkey.


Peskov, who was reported to be reacting to comments by U.S. President Donald Trump’s special envoy for Syria James Jeffrey, complained that it appeared that the United States was encouraging the Kurds to stay close to the Syrian border and fight the Turkish army. “The United States has been the Kurds’ closest ally in recent years. (But) in the end, it abandoned the Kurds and, in essence, betrayed them,” Peskov was cited as saying. “Now they (the Americans) prefer to leave the Kurds at the border (with Turkey) and almost force them to fight the Turks.” If the Kurds did not withdraw as per the deal between Moscow and Ankara, Peskov said that Syrian borders guards and Russian military police would have to withdraw, leaving the Kurds to be dealt with by the Turkish army.

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WHen you read the article, it appears perhaps not the best way to report this.

Amazon Rainforest ‘Close To Irreversible Tipping Point’ (G.)

Soaring deforestation coupled with the destructive policies of Brazil’s far-right president, Jair Bolsonaro, could push the Amazon rainforest dangerously to an irreversible “tipping point” within two years, a prominent economist has said. After this point the rainforest would stop producing enough rain to sustain itself and start slowly degrading into a drier savannah, releasing billions of tonnes of carbon into the atmosphere, which would exacerbate global heating and disrupt weather across South America. The warning came in a policy brief published this week by Monica de Bolle, a senior fellow at the Peterson Institute for International Economics in Washington DC.

The report sparked controversy among climate scientists. Some believe the tipping point is still 15 to 20 years away, while others say the warning accurately reflects the danger that Bolsonaro and global heating pose to the Amazon’s survival. “It’s a stock, so like any stock you run it down, run it down – then suddenly you don’t have any more of it,” said de Bolle, whose brief also recommended solutions to the current crisis. Bolsonaro has vowed to develop the Amazon, and his government plans to allow mining on protected indigenous reserves. Amazon farmers support his attacks on environmental protection agencies. His business-friendly environment minister, Ricardo Salles, has met loggers and wildcat miners, while deforestation and Amazon fires have soared since he assumed office in January.

The policy brief noted that Brazil’s space research institute, INPE, reported that deforestation in August was 222% higher than in August 2018. Maintaining the current rate of increase INPE reported between January and August this year would bring the Amazon “dangerously close to the estimated tipping point as soon as 2021 … beyond which the rainforest can no longer generate enough rain to sustain itself”, de Bolle wrote.

Read more …

 

 

“Hell is empty and all the devils are here.”


William Shakespeare

 

 

 

 

Jan 092018
 


Thomas Abercrombie Beirut 1957

 

Americans Wait For Tax Refunds Before Seeing A Doctor (BBG)
US Has The Worst Rate of Child Mortality Among 20 Rich Nations (CNBC)
Chapter 11 Bankruptcies Spike 107% from a Year Ago (WS)
The New Gilded Age: First Time Arrogance, the Second Time Vengeance (Rosen)
Retail Investors Are Finally True Believers with Record Exposure (WS)
iPhone Addiction May Be A Virtue, Not A Vice For Investors (R.)
‘It Can’t Be True.’ Inside the Semiconductor Industry’s Meltdown (BBG)
The Decline of Anti-Trumpism (David Brooks)
Cryptocurrencies Are Selling Off (BBG)
Fund Managers Say US Regulator Told Them To Suspend Bitcoin ETF Bids (R.)
US Energy Watchdog Terminates Plan To Subsidize Coal, Nuclear Sectors (AFP)
Fairy Tale (Jim Kunstler)
Theresa May’s Cabinet Reboot Descends Into Chaos (BBG)
Merkel, Coalition Negotiators Agree To Scrap 2020 Climate Target (R.)

 

 

A nation of expendables. To think how hard earlier generations fought for health care.

Americans Wait For Tax Refunds Before Seeing A Doctor (BBG)

As tax season approaches, some consumers are waiting for their refund checks to spend on a long-delayed purchase – a visit to the doctor or dentist. U.S. consumers boosted their out-of-pocket health spending by 60% in the week after they got a tax refund, according to new research from JPMorgan Chase, based on data from Chase customer accounts. Spending stayed high for about 2 1/2 months, with about two-thirds of the extra spending money going to in-person payments to doctors and dentists. Much of the rest was used to pay down past bills. Health insurers and employers have raised copays and deductibles for consumers, making them bear a larger portion of the cost of care when they go see a health-care provider.

As a result, patients sometimes lack the cash to get the care they may need, according to the report. “Cash-flow dynamics are a significant driver of out-of-pocket spending for health care,” the study found. “Even when consumers knew with near-certainty the size and source of a major cash infusion, they still waited until the infusion arrived before spending.” The researchers found that availability of cash had far less of an impact on health-spending decisions among those with credit cards, or who had higher bank-account balances.

Read more …

Until about 1970, the US had the lowest child mortality rates. Then something happened.

US Has The Worst Rate of Child Mortality Among 20 Rich Nations (CNBC)

The United States has the worst child mortality rate among a group of 20 wealthy democracies, an analysis released Monday found. And despite overall improvement in the child mortality rate in the U.S. and those 19 other countries, the U.S. has persistently outpaced those nations in that grim metric for decades, the Health Affairs report said. “From 2001 to 2010, the risk of death in the US was 76% greater for infants and 57% greater for children age 1-19,” the report said. And during the same decade, children between the ages of 15 and 19 were 82 times more likely to die from gun-related homicide in the U.S. than in the comparison countries.

The authors of the Health Affairs report said that in the full 50-year period their study looked at, the U.S. had more than “600,000 excess deaths” among kids because of the country’s lagging performance in curbing child mortality. Those excess deaths have occurred even as the U.S. spends more money on health care for kids than the other countries. Among the countries looked at, “there has never been a better time to be born in any of these 20 countries,” the Health Affairs report said. “Despite this generalized trend, children are less likely to survive and transition into adulthood in the US than in other [countries examined],” the report said. “Persistently high poverty rates, poor educational outcomes, and a relatively weak social safety net have made the US the most dangerous of wealthy nations for a child to be born into.”

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Due to the tax law.

Chapter 11 Bankruptcies Spike 107% from a Year Ago (WS)

New Chapter 11 bankruptcies in the US more than doubled in December 2017 from a year ago to 699 filings. That jump of 362 filings from December 2016 was the largest year-over-year jump since the Financial Crisis. This chart shows Chapter 11 filings back to 2011, based on data from the American Bankruptcy Institute. I marked the prior five Decembers with red dots. Note how they’re near the low point of the seasonal swings. That makes the spike in December 2017 even more spectacular. A spike like this in Chapter 11 filings in a month of December is unheard of in normal times. Normally, bankruptcies jump during tax season, the first four or five months of the year, but not at the end of the year. But these are not normal times.

In December, Chapter 11 filings soared 61% from November. This is also highly unusual, as over the prior five years, presumably the “normal times,” the number of filings from November to December has fallen by an average 8.7%. The chart below shows the year-over-year change in Chapter 11 filings. I marked the prior Decembers in yellow. I circled the oil bust and the brick-and-mortar meltdown. But December 2017 was special.

I think companies and their owners and creditors know one thing: They can write off losses in 2017 under the old corporate tax rates, at 35%, thus getting the government to pick up 35% of the tab of their losses via lower taxes. In 2018, the new tax law applies and all kinds of uncertainties have yet to be ironed out, and these companies – the owners and creditors – are thinking (I assume) that it’s better to try to recognize the loss in 2017, support it with a Chapter 11 filing, and pull the write-off into 2017 against a tax rate of 35%, rather than 21% in 2018. A tax-law change of this drastic nature motivates people jump through all kinds of hoops to save some money – including waiting in line for hours to pay property taxes early, a hitherto unthinkable strategy. And I think this is the likely suspect for the spike.

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Wonderful history lesson about the robber barons. Go read.

The New Gilded Age: First Time Arrogance, the Second Time Vengeance (Rosen)

The U.S. is now living through a second Gilded Age. Where once the robber barons were millionaires, today they’ve added a few zeros to their wealth and became billionaires. However, they act with no-less impunity, but a greater sense of entitlement. The Trump administration, together with the Republican-controlled Congress, are functional shills for the current generation of robber barons. As evident from the recently-passed tax bill, legislators jump when their big-money donors order them to deliver the goods — and they did. The U.S. economy has rebounded from the 2007-2009 “great recession,” with the stock market hitting new highs, unemployment the lowest in a generation and home prices recovering. But Americans still haven’t regained the wealth they lost, with incomes remaining stagnant and, on the whole, working Americans worse off than since the late-1990s.

The Federal Reserve’s most recent Survey of Consumer Finances finds that median net worth for all families (measured in 2016 dollars) dropped 8% since 1998. Most sobering, the poorer you are, the worst your fate – and this is compounded by race, education level, gender and age factors. America’s poorest, the bottom fifth, saw their net worth fall 22%; the broad working class, the second-lowest income tier, were the hardest hit with their net worth shrinking by more than a third (34%); and those dubbed “middle class,” with incomes from $43,501 to $69,500, were barely treading water, with their worth gaining a whopping 3.5%. Since 1998, the top 10% saw their worth rise 146%. The share of the nation’s wealth held by the top 1% rose to 38.6% while that portion controlled by the bottom 90% fell 22.8% (from 33.2% in ’89).

Looking at the nation’s income for the period of 2013 to 2016, the same phenomenon is evident: income going to the top 1% climbed to 23.8% (from 20.3%) while the share going to the bottom 90% slipped to about 50% (from 54%). And then there is debt, the lubricant of the U.S. post-WW-II “consumer revolution.” During the 2013 to 2016 period, those with the lowest income (below $25,300), saw their debt rise by 57%; for the lower-middle class (incomes between $25,301 and $43,500), debt increased 58%; and for the middle class (incomes from $43,501 to $69,500), debt rose by a modest 12.5%.

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What beaking points are made of.

Retail Investors Are Finally True Believers with Record Exposure (WS)

As far as the stock market is concerned, it took a while – in fact, it took eight years, but retail investors are finally all in, bristling with enthusiasm. TD Ameritrade’s Investor Movement Index rose to 8.59 in December, a new record. TDA’s clients were net buyers for the 11th month in a row, one of the longest buying streaks and ended up with more exposure to the stock market than ever before in the history of the index. This came after a blistering November, when the index had jumped 15%, “its largest single-month increase ever,” as TDA reported at the time, to 8.53, also a record:

Note how retail investors had been to varying degrees among the naysayers from the end of the Financial Crisis till the end of 2016, before they suddenly became true believers in February 2017. “I don’t think the investors who are engaging regularly are doing so in a dangerous fashion,” said TDA Chief Market Strategist JJ Kinahan in an interview. But he added, clients at the beginning of 2017 were “up to their knees in it and then up to their thighs, and now up to their chests.” The implication is that they could get in a little deeper before they’d drown. “As the year went on, people got more confident,” he said. And despite major geopolitical issues, “the market was never tested at all” last year. There was this “buy-the-dip mentality” every time the market dipped 1% or 2%.

But one of his “bigger fears” this year is this very buy-the-dip mentality, he said. People buy when the market goes down 1% or 2%, and “it goes down 5%, then it goes down 8% — and they turn into sellers, and then they get an exponential move to the downside.” In addition to some of the big names in the US – Amazon, Microsoft, Bank of America, etc. – TDA’s clients were “believers” in Chinese online retail and were big buyers of Alibaba and Tencent. But they were sellers of dividend stocks AT&T and Verizon as the yield of two-year Treasuries rose to nearly 2%, and offered a risk-free alternative at comparable yields. And he added, with an eye out for this year: “It’s hard to believe that the market can go up unchallenged.” This enthusiasm by retail investors confirms the surge in margin debt – a measure of stock market leverage and risk – which has been jumping from record to record, and hit a new high of $581 billion, up 16% from a year earlier.

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Duh!

iPhone Addiction May Be A Virtue, Not A Vice For Investors (R.)

Apple investors are shrugging off concerns raised by two shareholders about kids getting hooked on iPhones, saying that for now a little addiction might not be a bad thing for profits. Hedge fund JANA Partners and the California State Teachers’ Retirement System (CalSTRS) pension fund said on Saturday that iPhone overuse could be hurting children’s developing brains, an issue that may harm the company’s long-term market value. But some investors said the habit-forming nature of gadgets and social media are one reason why companies like Apple, Google parent Alphabet Inc and Facebook Inc added $630 billion to their market value in 2017. “We invest in things that are addictive,” said Apple shareholder Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management.

He also owns stock in coffee retailer Starbucks Corp, casino operator MGM Resorts International and alcohol maker Constellation Brands Inc. “Addictive things are very profitable,” Gerber said. Still, the investment community is increasingly holding companies to higher social standards, and there is some concern that market-leading tech companies could draw attention from regulators much like alcohol, tobacco and gambling companies have in the past. Alphabet and Facebook could not immediately be reached for comment on Monday. Facebook has said social media can be beneficial if used appropriately. In a statement to Reuters, Apple said it has offered a range of controls on iPhones since 2008 that allow parents to restrict content, including apps, movies, websites, songs and books, as well as cellular data, password settings and other features.

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This leaves many questions about what the industry knew and what they did not. Hard to believe they were all entirely ignorant for 20 years.

‘It Can’t Be True.’ Inside the Semiconductor Industry’s Meltdown (BBG)

It was late November and former Intel Corp. engineer Thomas Prescher was enjoying beers and burgers with friends in Dresden, Germany, when the conversation turned, ominously, to semiconductors. Months earlier, cybersecurity researcher Anders Fogh had posted a blog suggesting a possible way to hack into chips powering most of the world’s computers, and the friends spent part of the evening trying to make sense of it. The idea nagged at Prescher, so when he got home he fired up his desktop computer and set about putting the theory into practice. At 2 a.m., a breakthrough: he’d strung together code that reinforced Fogh’s idea and suggested there was something seriously wrong. “My immediate reaction was, ‘It can’t be true, it can’t be true,’” Prescher said.

Last week, his worst fears were proved right when Intel, one of the world’s largest chipmakers, said all modern processors can be attacked by techniques dubbed Meltdown and Spectre, exposing crucial data, such as passwords and encryption keys. The biggest technology companies, including Microsoft, Apple, Google and Amazon.com are rushing out fixes for PCs, smartphones and the servers that power the internet, and some have warned that their solutions may dent performance in some cases. Prescher was one of at least 10 researchers and engineers working around the globe – sometimes independently, sometimes together – who uncovered Meltdown and Spectre. Interviews with several of these experts reveal a chip industry that, while talking up efforts to secure computers, failed to spot that a common feature of their products had made machines so vulnerable.

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David Brooks exposes everything his paper -NYT- has done for well over a year: make it all up. A mea culpa between the lines.

The Decline of Anti-Trumpism (David Brooks)

Let me start with three inconvenient observations, based on dozens of conversations around Washington over the past year: First, people who go into the White House to have a meeting with President Trump usually leave pleasantly surprised. They find that Trump is not the raving madman they expected from his tweetstorms or the media coverage. They generally say that he is affable, if repetitive. He runs a normal, good meeting and seems well-informed enough to get by. Second, people who work in the Trump administration have wildly divergent views about their boss. Some think he is a deranged child, as Michael Wolff reported. But some think he is merely a distraction they can work around. Some think he is strange, but not impossible. Some genuinely admire Trump. Many filter out his crazy stuff and pretend it doesn’t exist.

My impression is that the Trump administration is an unhappy place to work, because there is a lot of infighting and often no direction from the top. But this is not an administration full of people itching to invoke the 25th Amendment. Third, the White House is getting more professional. Imagine if Trump didn’t tweet. The craziness of the past weeks would be out of the way, and we’d see a White House that is briskly pursuing its goals: the shift in our Pakistan policy, the shift in our offshore drilling policy, the fruition of our ISIS policy, the nomination for judgeships and the formation of policies on infrastructure, DACA, North Korea and trade. It’s almost as if there are two White Houses. There’s the Potemkin White House, which we tend to focus on: Trump berserk in front of the TV, the lawyers working the Russian investigation and the press operation.

Then there is the Invisible White House that you never hear about, which is getting more effective at managing around the distracted boss. I sometimes wonder if the Invisible White House has learned to use the Potemkin White House to deke us while it changes the country. I mention these inconvenient observations because the anti-Trump movement, of which I’m a proud member, seems to be getting dumber. It seems to be settling into a smug, fairy tale version of reality that filters out discordant information. More anti-Trumpers seem to be telling themselves a “Madness of King George” narrative: Trump is a semiliterate madman surrounded by sycophants who are morally, intellectually and psychologically inferior to people like us. I’d like to think it’s possible to be fervently anti-Trump while also not reducing everything to a fairy tale.

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Still up and down, but that will be a big problem at some point, not some quaint feature..

Cryptocurrencies Are Selling Off (BBG)

Bitcoin slumped, dragging down smaller rivals such as ether and litecoin, as concerns that regulators will tighten their grip on the market weigh on the the world’s largest cryptocurrency. Regulators in China and South Korea are increasing oversight on cryptocurrency trading and mining, while the U.S. Securities and Exchange Commission late last year started cracking down on some digital token sales, known as ICOs. Coinmarketcap.com’s decision to exclude Korean pricing data for coins helped create the appearance of a large drop in prices, which some traders attributed as playing a part in the selloff. “News on the regulatory front is dragging down cryptos,” said Gabor Gurbacs at VanEck Associates.

“South Korea and China tightening is weighing on bitcoin and in the ICO market, things started slowing down, with the SEC cracking down on illegal offerings.” Bitcoin slumped as much as 17% to $14,820, the most in more than two weeks. The rout in bitcoin is part of a broader selloff in the cryptocurrency realm, with all of the top 10 by market cap falling, and most tumbling by at least 10%, according to Coinmarketcap.com. Cardano fell 16%, while litecoin slumped as much as 16% to as low as $230. Bitcoin is little changed this year after surging about 1,400% in 2017.

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Liquidity concerns.

Fund Managers Say US Regulator Told Them To Suspend Bitcoin ETF Bids (R.)

Two U.S. companies shelved proposals to launch bitcoin exchange-traded funds, citing ongoing concerns by the Securities and Exchange Commission (SEC), filings showed on Monday. Staff at the regulatory agency “expressed concerns regarding the liquidity and valuation” of futures contracts based on the digital asset, according to one of the filings. The move adds a new hurdle to the bid by Wall Street firms to capitalize on investor interest in cryptocurrencies, and it opens a rare public divergence between two financial regulatory agencies over how to regulate them. Trusts controlled by Rafferty Asset Management and Exchange Traded Concepts each canceled plans to launch three bitcoin funds that could be traded by retail investors as easily as stocks. Neither firm could be reached for comment.

Fund managers thought the proposals had a chance at winning approval given the launch last month of futures contracts based on bitcoin on both the CME and the CBOE exchanges. Regulators have been scrambling to figure out how to deal with this relatively new asset, and no single one has control. The SEC has dominion over funds, while the Commodity Futures Trading Commission (CFTC) governs futures contracts. The CFTC has been under pressure to address concerns it did not fully assess the potential risks that bitcoin poses to the financial system. [..] The SEC’s decisions also face close scrutiny given its power to clear the way for products that could be among the more volatile traded in U.S. equity markets.

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It was always nonsense, and they know it.

US Energy Watchdog Terminates Plan To Subsidize Coal, Nuclear Sectors (AFP)

The US energy watchdog terminated Monday a key proposal by President Donald Trump’s administration to subsidize coal and nuclear plants, finding it neither justified nor reasonable. The decision by the Federal Energy Regulatory Commission (FERC) was handed down in a unanimous verdict by its five members, a majority of whom belong to the president’s Republican Party. Energy Secretary Rick Perry had in September proposed providing federal aid to nuclear and coal power plants with at least 90 days’ worth of production capacity, arguing the move was necessary to make the national grid more resilient in case of extreme events.

Both sectors have seen their share of the energy market diminish in recent years, losing out to oil, natural gas and renewables – which had all opposed Perry’s plan. There are currently only two nuclear reactors under construction in the US, in addition to the 99 in service. Coal is also facing a crisis, and Trump made reversing its decline a major campaign pledge. In announcing its decision, FERC cited an existing department study’s findings that “changes in the generation mix, including the retirement of coal and nuclear generators, have not diminished the grid’s reliability or otherwise posed a significant and immediate threat to the resilience of the electric grid.”

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Of the Oprah kind.

Fairy Tale (Jim Kunstler)

Oprah might be the Democratic Party’s last best hope before it collapses into the mausoleum of US political history, where the Whigs, Free Soilers, and Anti-Federalists lie a’moldering. Politics in this land has failed in its effort to become show business, while show business is succeeding wildly in its attempt to replace politics. All Washington can produce these days is a succession of tedious irresolvable soap operas. Hollywood is enacting a grand moral drama of clear-cut heroines and villains, victims and oppressors, sticking to archetypal story-line of our lifetime: the campaign for freedom, equality, and decency. Show business loves the desert sunshine; politics is mired in the Potomac swamp. Oprah even has better hair than the current occupant of 1600 Pennsylvania Avenue.

Oprah herself is an object lesson in the social and political themes that America dares not talk about: a person of humble origins who succeeded wildly in American life by signing onto a once-sturdy and now-fading common culture. In fact, Oprah probably embodies all that remains of American common culture, and the multitudes adore her for it. They are reassured to know that the binding verities still exist. She moves in a realm where blackness and whiteness are emphatically irrelevant — which is surely a relief to people of good will who are sick of race-hustling from all quarters. Though she has credibly acted plenty of sharecropper roles in the movies, Oprah speaks English beautifully and doesn’t apologize for moving up from the ghetto patois of her rough childhood. She may not write all her own material — such as Sunday’s Golden Globes speech that may live on like MLK’s I Have a Dream oration — but she delivers her message with conviction.

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Stumbling from failure to failure.

Theresa May’s Cabinet Reboot Descends Into Chaos (BBG)

U.K. Prime Minister Theresa May’s attempt to give her government a 2018 reboot was marred by a chaotic cabinet reshuffle as senior ministers refused to follow her orders. It’s a development that bodes ill for her ability to successfully navigate the next, even trickier stage of Brexit talks. May’s office flagged Monday’s events as “a refresh” of her top team. But instead of the usual parade of lawmakers arriving at her office in quick succession to accept their new roles, things went off script. First Health Secretary Jeremy Hunt, then Education Secretary Justine Greening were locked in discussions with her after rejecting proposed moves. Hunt eventually won his argument to stay on, but Greening, who spent more than two hours in 10 Downing Street, quit rather than accept another job.

May was said to be “disappointed” at losing Greening, who opposed Brexit, and could now vote with pro-European Union rebels in the House of Commons. It was not the restart she wanted. There were echoes of her botched decision to call an election in her announcement of a reshuffle she didn’t have to carry out. In both instances May seemed to dissipate any political goodwill she recouped. She had begun the new year in a position of relative strength, having concluded a problematic first phase of talks over Brexit – still the issue that will define her political legacy and will only get more complicated this year. “She can’t have the government she would choose and has to select from a small group of people,” said Matt Beech, director of the Centre for British Politics at the University of Hull. “Even with a majority she’d be facing tough decisions because her party’s completely divided on Brexit.”

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Want to know when you’re being had? Look no further. The reasoning here is that the German economy is doing so well that climate targets can’t be met. But that’s an impossible contradiction. Because it tries to make you believe that the investments needed to meet the targets will be made when the economy is not doing so well. But they won’t, because by then the story will be that the money is needed to support the economy.

Merkel, Coalition Negotiators Agree To Scrap 2020 Climate Target (R.)

Germany’s would-be coalition partners have agreed to drop plans to lower carbon dioxide emissions by 40% from 1990 levels by 2020, sources familiar with negotiations said on Monday – a potential embarrassment for Chancellor Angela Merkel. Due to strong economic growth and higher-than-expected immigration, Germany is likely to miss its national emissions target for 2020 without any additional measures. Negotiators for Merkel’s conservative bloc and the centre-left Social Democrats (SPD) told Reuters the parties had agreed in exploratory talks on forming a government that the targeted cut in emissions could no longer be achieved by 2020. Instead, they would aim to hit the 40% target in the early 2020s, the sources said, adding that both parties are still sticking to their goal of achieving a 55% cut in emissions by 2030.

The deal would represent something of a U-turn for Merkel, who has long presented herself as an advocate of climate protection policies on the international stage. Sources said both parties had also agreed that the share of renewable energy in Germany’s electricity consumption should rise to 65% by 2030 from roughly a third last year. Currently, the government plans to raise the renewable energy quota to between 45 and 55% by 2025. Negotiators also agreed to cut the tax on electricity in order to reduce energy costs, according to a document seen by Reuters. They also plan to tender an extra 4 gigawatts of solar energy as well as onshore and offshore wind-generating capacity.

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