Oct 05

Today’s News 5th October 2016

  • Conflicts Of Interest

    Submitted by Duane via FMShooter.com,

    yellen

    Fed Governor Lael Brainard has donated to Clinton’s campaign and is widely viewed as a potential Clinton pick for Treasury secretary. Yellen hesitated and then demurred when Representative Scott Garrett of New Jersey asked whether Brainard would have a conflict of interest if she were indeed in talks with Democratic nominee Hillary Clinton’s campaign about a position. The election takes place Nov. 8.

     

    “I would have to consult my counsel, I’m not aware that that’s a conflict,” Yellen said in testimony to the House Financial Services Committee in Washington, while rejecting Garrett’s suggestion that the U.S. central bank has a political bias.

    Source:  Fed Politics in Spotlight as Yellen Cornered by Lawmaker  |  Bloomberg

    Imagine how higher management would feel about you reacting in the same situation.  Goldman has been known to lay off its employees for even donating to the Trump campaign.  So a similar situation would be you, an employee of a firm, donating to a political campaign, and later getting a promotion as a result of that donation.

    Of course, Lael Brainard herself has a long history of working in the executive branch to begin with.  She initially served in Bill Clinton’s administration, and was appointed Undersecretary of the Treasury for International Affairs early in Barack Obama’s presidency.  In 2014, she was nominated to the Federal Reserve Board of Governers, and it appears the majority of “conflicts of interest” and connections with her past employers were largely ignored during her confirmation.

    brainerd

    Again, this should only surprise you so much.  Brainard is married to Kurt Campbell, CEO of The Asia Group, and previously founded and was CEO of many other think tanks and businesses.  After a distinguished military career, he also has made a career of working in politics, serving as Deputy Assistant Secretary of Defense, and the Assistant Secretary of State for East Asian and Pacific Affairs.  It would make sense to look at his trading statements, to see how his portfolio could have benefited from inside information from within the government and Federal Reserve itself.  If Campbell is appointed to a position within the government, it will just be another example of the government / lobby “revolving door” hard at work.

    Then again, it would be fair to say that about a Brainard appointment to Treasury secretary in and of itself.   And while you can expect the argument to be put forward of her “vast qualifications” at a confirmation hearing, it seems the one thing that she has done remarkably well during her career was to grease the right wheels and make sure that high-level government employment is in the cards.

    Revolving Door Politics

    So, when Yellen is queried by a Congressman about a potential conflict of interest, of course she is unaware that it could be a possible conflict.  “Revolving door” and “conflict of interest” in regards to government appointments translates to “business as usual” for government officials.

     

  • FED Talk – Why rate hikes will not have a lasting impact on gold

    The full report can be accessed and downloaded as PDF here at goldmoney.com

     

    Today’s sell off in gold has led to concerns that the >20% year-to-date rally in gold prices could begin to reverse. In our view this is primarily the reaction to renewed expectations that the FED is indeed prepared to raise rates again, which has led to large sell orders and pushed gold below a key technical level at USD1302/ozt. However, the asymmetry in the gold price outlook remains clear. There is very little downside to prices from here even if the FED raises rates multiple times over the coming year or two. Indeed, we see several triggers that could push gold prices sharply higher from here over that time horizon.

    Gold sold off more than 3% intraday today. The sharp price decline came on the back of hawkish comments from Federal Reserve Bank of Richmond President Jeffrey Lacker today and Federal Reserve Bank of Cleveland President Loretta Mester yesterday. Mr. Lacker said today in Charleston, “While inflation pressures may seem a distant and theoretical concern right now, prudent preemptive action can help us avoid the hard-to-predict emergence of a situation that requires more drastic action after the fact,” thus urging the FED to raise rates before year-end. On Monday, Cleveland FED President Mester said in a Bloomberg TV interview that the economy is ripe for rate hike and highlighted that the November FED meeting should be considered a “live” meeting (although she added that she considers all meetings as “live”) and a November rate hike compelling, despite its close proximity to the US presidential elections. These comments have sent real-interest rate expectations as measured in 10-year TIPS sharply higher which pushed gold prices sharply lower (see Exhibit 1). Tuesday saw unusually high activity in the gold futures market. The hawkish FED talk triggered large sell orders, which pushed gold prices below the key technical levels of USD1300-1302/ozt, exacerbating the sell-off. This is something we have witnessed before.

     

     

    Since the beginning of the year, the FED has tried to appear hawkish while the actual policy outlook has in fact become ever more dovish. At the end of 2015 there were 4 rate hikes expected and telegraphed by the FED in the FED dot-plot. The FED dot-plot shows the forecasts of each of the 16 members of the FOMC. Each dot represents a member’s view of where interest rates should be at for various timeframes, including a “long run” projection which represents where members think interest rates will be at the end of a hiking cycle. For 2016 the FOMC members expected 4 hikes (not including the first hike at the end of 2015). So far there have been none, and the FED members have continuously revised down their projections not just for this and next year, but also for the terminal (long run) rate. But every time after markets were disappointed by another zero round, some FOMC members came out with hawkish statements, and sometimes the FED minutes suggested that the FOMC became more hawkish. Every time the market reacted the same way: It pushed real interest rates higher and gold lower, and every time so far it was only temporary. Gold moved gradually higher, reflecting weaker interest rate projections. 

     

     

    So what happens to gold when the FED actually raises rates? We think not much. The reason is that real-interest rates can’t really move much higher from here even if the FED raises rates. The FED’s own projection for terminal rates is now just 2.85%. The FED will most probably only raise rates if inflation reaches or exceeds its own target of 2%, which would imply that real-interest rates (currently at 0.04%) are capped at 0.85% over the long run. This upside limit on real interest rates sets the floor for gold prices and explains why its price outlook is skewed to the upside. Yes, if everything goes perfectly and the FED gets the chance to raise rates to its target over several years (without encountering any economic slowdown along the way) while maintaining a 2% inflation rate, then gold prices have a little bit more downside, but less than 10% (see Exhibit 4). 

     

     

    In fact, there are many more potential drivers to the upside. 

    1. The FED might increase its inflation target as already suggested by San Francisco Fed President John Williams. This means that real-interest rate expectations would become negative again even if the FED actually raises rates;

    2. We start to experience an acceleration in broad based inflation as opposed to FED induced asset price inflation, pushing real rates back deep into negative territory;

    3. The FED keeps delaying rate hikes and taking guidance for terminal rates even lower as it has done for years;

    4. Any hiccup in the economy and the FED is forced to take rates lower instead of higher. Historically the FED has lowered rates several percentage points to counter recessions. At 0.5%, that would require steep NIRP;

    5. Any renewed QE or new form of unconventional monetary policy such as ‘helicopter money’ would push gold prices sharply higher;

    6. A renewed surge in longer dated energy prices (which bottomed in 1Q16, and we don’t expect these levels to be retested) but is likely only to materialize in a few years.

    Importantly, for gold to go higher from here it doesn’t need any Malthusian thinking. None of the scenarios above require a renewed global meltdown of financial markets or an even bigger event, such as a full blown currency crisis. The FED itself has simply set the floor for gold prices by revising its own guidance for rates to a point where the most hawkish scenario is that real-interest rates can only move marginally higher from here.

  • "Interruptionfest" VP Debate Ends In Tie, Moderator Loss

    We suspect a few screens were broken after that debacle.

    Just when you thought Lester Holt had troughed moderator incompetence, Elaine Quijano steals the show. Not only did she interrupt Mike Pence immeasurably many times but she consistently allowed Tim Kaine to interrupt his competitor and have the last word.

    Perhaps this showed 'weakness' on Pence's behalf but polls and post-debate discussions appear to show a slight bias to his lead as Kaine's manner and repetitiveness seemed to rub many the wrong way.

     

     

     

    Fox notes – Kaine Interrupted Pence 39 time, Pence Interrupted Kaine 19 times.

    As MRCTV reports, CBS News' Elaine Quijano repeatedly attacked Gov. Mike Pence (R-Ind.) during the 2016 vice presidential debate in Farmville, Va., on Tuesday.

    The debate moderator criticized Pence for failing to answer questions when he was unable to get a word in with constant interruptions from Hillary Clinton’s running mate Sen. Tim Kaine (D-Va.).

    On the subject of immigration, in addition to her initial question, Quijano overstepped her role of moderator by pressing Pence on whether illegal immigrants would be “forcibly removed” under Trump’s plan.

    “Governor, how would these millions of undocumented immigrants leave? Would they forcibly be removed?” she asked.

    She appeared to support Sen. Kaine on his criticism of Trump, answering back to him, “right,” in agreement. 

    Kaine said, “This is important, Elaine. When a guy running for president will not support the troops, not support veterans, not support teachers…”

    “Right,” Quijano responded, before Kaine even finished his remark.

    Kaine went on to overrun the moderator, taking control of the debate by speaking over both Gov. Pence and Ms. Quijano.

    The debate quickly became one-sided:

    Quijano later stopped Pence short in his discussion of the Clinton Foundation even though Kaine had ample time to defend the charity and attack the Trump Foundation. 

     

     

     

    As CBS reports, a focus group being conducted by CBS News contributor Frank Luntz believes Democratic vice presidential nominee Tim Kaine is interrupting Republican nominee Mike Pence too much during the debate.

     

     

    Polls were mixed:

    FOX: Pence Wins

    Focus Group: Pence Win

     

    *  *  *

    What They Said

    Kaine said:

    • *KAINE SAYS HE'S RUNNING WITH `HISTORY-MAKING WOMAN'
    • *KAINE: CLINTON PICKED HIM BECAUSE HE CAN HELP DELIVER RESULTS
    • *KAINE SAYS THOUGHT OF TRUMP AS COMMANDER IN CHIEF IS SCARY
    • *KAINE SAYS CLINTON ALWAYS PUTS OTHERS FIRST, UNLIKE TRUMP
    • *PENCE: CLINTON, KAINE WOULD KNOW ABOUT `INSULT-DRIVEN CAMPAIGN'
    • *KAINE SAYS CLINTON HAS PLAN THAT'S A `YOU'RE HIRED' PLAN
    • *KAINE SAYS CLINTON WILL NEVER TRY TO PRIVATIZE SOCIAL SECURITY
    • *KAINE SAYS HE'S STRONG 2ND AMENDMENT SUPPORTER
    • *KAINE ON TRUMP: CAN'T HAVE PERSON AT THE TOP WHO DEMEANS PEOPLE
    • *KAINE: TERRORIST THREAT HAS DECREASED IN SOME WAYS
    • *KAINE SAYS CLINTON ONLY CANDIDATE WHO CAN BEAT TERRORISM
    • *KAINE SAYS CLINTON WOULD VET REFUGEES, NOT DISCRIMINATE
    • *KAINE COMPARES TRUMP TO `FOOL' OR `MANIAC' ON NUCLEAR WEAPONS
    • *KAINE: CLINTON CAN STAND UP TO RUSSIA IN WAY TRUMP CANNOT
    • *KAINE: PUTIN IS WHAT WENT WRONG WITH RUSSIA RESET
    • *KAINE: CLINTON FOUNDATION ONE OF HIGHEST-RATED CHARITIES
    • *KAINE: CLINTON AT STATE TOOK NO ACTION TO BENEFIT FOUNDATION
    • *KAINE: PRESIDENT NEEDS TO DEFEND AGAINST IMMINENT THREATS
    • *KAINE: U.S. MUST BE ABLE TO COOPERATE WITH CHINA ON NORTH KOREA
    • *KAINE SAYS WAS AGAINST DEATH PENALTY, YET UPHELD VA. LAW
    • *KAINE: CLINTON WOULDN'T PUNISH WOMEN FOR ABORTION, UNLIKE TRUMP
    • *KAINE SAYS HE AND CLINTON HAVE RELATIONSHIPS ACROSS THE AISLE

    Pence said:

    • *PENCE SAYS HE HAS `LIFETIME OF EXPERIENCE' TO BRING TO DC
    • *PENCE: CLINTON, KAINE WOULD KNOW ABOUT `INSULT-DRIVEN CAMPAIGN'
    • *PENCE CRITICIZES CLINTON FOR FOUNDATION DONORS, PRIVATE SERVER
    • *PENCE SAYS HE, TRUMP CAN GET ECONOMY MOVING AGAIN, LOWER TAXES
    • *PENCE SAYS U.S. ECONOMY HAS BEEN DRIVEN INTO THE DITCH
    • *PENCE: TRUMP USED TAX CODE `THE WAY IT'S SUPPOSED TO BE USED'
    • *PENCE: TRUMP FACED TOUGH TIMES IN BUSINESS 20 YEARS AGO
    • *PENCE SAYS HE, TRUMP WILL MEET OBLIGATIONS TO SENIORS
    • *PENCE SAYS HE AGREES ON NEED FOR COMMUNITY POLICING
    • *PENCE SAYS `IMPLICIT BIAS' COMMENTS DEMEAN LAW ENFORCEMENT
    • *PENCE: TRUMP COMMENTS NOTHING COMPARED WITH `DEPLORABLES' REMRK
    • *PENCE: `AMERICA IS LESS SAFE TODAY'
    • *PENCE CRITICIZES CLINTON REFUGEE PLAN AS POTENTIALLY DANGEROUS
    • *PENCE SAYS CLINTON'S PRIORITY WAS THE RESET WITH RUSSIA
    • *PENCE: U.S. SHOULD BE PREPARED TO USE MILITARY FORCE IN SYRIA
    • *PENCE: U.S. SHOULD DEPLOY DEFENSE SHIELD TO CZECH REP., POLAND
    • *PENCE: U.S. MUST REBUILD MILITARY TO HALT NUCLEAR THREAT
    • *PENCE SAYS TRUMP WOULD NEVER PUNISH WOMEN FOR ABORTION
    • *PENCE DEFENDS TRUMP COMMENTS, HE'S `NOT A POLISHED POLITICIAN'
    • *PENCE SAYS TRUMP'S BUSINESS SMARTS WILL HELP UNIFY U.S.

    *  *  *

    Trump's View of the Winner…

    And Hillary asked for money…

     

  • ALERT: Markets to implode, only FX will be left

    Warning to investors – traditional markets are flawed.  In one of many hypothetical futures, not so far in the future, FX may be the only game in town.  As we explain in Splitting Pennies – Understanding Forex – it’s FX that drives the world, not stocks, bonds, commodities, or real estate.  Let’s take a quick look at some of the cracks in traditional markets.

    HFT Market to collapse, or drastically change

    During the credit crisis HFT snuck in a huge business for themselves in the stock market via Reg NMS by manipulating ‘order types’ and ‘latency’.  Well, that’s all starting to unwind.  Top HFT firms are fearful that the SEC is about to ‘spill the beans’ according to Bloomberg:

    Some of the biggest electronic traders are complaining that a new test in the U.S. stock market will compromise their top-secret strategies, one of their most valuable assets.  Citadel Securities and KCG Holdings Inc. are among a chorus of brokers questioning elements of a U.S. Securities and Exchange Commission experiment, which began Monday, designed to whip up more trading in small companies. Their complaint is that the test will force firms to publicly expose detailed trading data with only the thinnest veil of anonymity, allowing competitors to reverse engineer how their prized trading algorithms work.  For high-speed trading firms, complex computer code is the secret weapon for profiting from the market. Some brokers say they fear that in their test, regulators won’t sufficiently mask their publicly reported trading data.  “It’s going to take someone exactly three seconds to figure out who’s who,” said Jamil Nazarali, head of execution services at Citadel Securities, which is the market-making arm of billionaire Ken Griffin’s Citadel LLC. Trading firms will “likely change their behavior to protect their intellectual property,” making the test’s results less meaningful, he added.

    And, IEX is set to blow a hole in the dark pools of Wall St.

    Big Banks collapsing – SOON

    Previously to the “DB Crisis” – Europe’s biggest bank, Douche Bank, is now probably insolvent at best, and at worst – will form a black hole so big that it will suck half of the worlds banks and assets into it when it implodes.  DB isn’t just a bank, it’s a financial powerhouse – a superbank.  For example, if you’ve ever bought a currency ETF, it was probably offered by DB:

    (Note the big black X in the background – good choice DB!)

    Hmm.. only 35 ETFs in the USA.  Anyway, creating an ETF isn’t easy.  DB is registered in almost every country in the world, yes even in Malta.  They are in thousands of businesses.  Unwinding this behemoth will take decades.  Unraveling all of their crimes, money laundering, scandals, and derivatives is practically impossible.  Just one example of a $10 Billion dollar liability, in this case, just money laundering:

    Almost every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkov called the equities desk of Deutsche Bank’s Moscow headquarters. Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented. Usually, the order was for about ten million dollars’ worth of the stock. In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself…Although the bank’s headquarters remained in Germany, power migrated from conservative Frankfurt to London, the investment-banking hub where the most lavish profits were generated. The assimilation of different banking cultures was not always successful. In the nineties, when hundreds of Americans went to work for Deutsche Bank in London, German managers had to place a sign in the entrance hall spelling out “Deutsche” phonetically, because many Americans called their employer “Douche Bank.”  

    On the other side of the pond, Wells Fargo – previously one of America’s ‘trusted’ banks, “Main St. bank” – is collapsing after the market learned that their great sales figures were based on a house of cards that was, well, fraudulent.  If you’re not aware or not following this crisis, checkout this article for a simple explanation.

    Real Estate Market Shaky, at best

    With a major hurricane likely to hit Florida and possibly a direct hit on Miami, which already has a problem with high tides, hot markets such as Miami are feeling multiple pressures.

    Manhattan apartment sales have plunged 20% – 

    There are a lot more apartments available for purchase these days in Manhattan. And fewer people are buying.  Sales of previously owned condominiums and co-ops fell 20 percent in the third quarter from a year earlier as potential buyers grew cautious amid more choices, according to a report Tuesday from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. There were 5,290 resale apartments on the market at the end of September, 53 percent more than the number available in late 2013, the lowest point for listings.

    The swelling inventory is providing an opportunity to New Yorkers shut out of a market in which construction has been dominated by ultra-luxury condos aimed at the wealthiest buyers. Resales, particularly those priced at less than $1 million, were in chronically short supply in recent years, and those that made it to the market sparked bidding wars. Now, more owners are listing apartments to profit from climbing values, and they’re finding lots of company.  “Rapidly rising prices over the years have pulled more sellers into the market hoping to cash out,” Jonathan Miller, president of Miller Samuel, said in an interview. “But buyers are more wary. There isn’t the same intensity of activity to burn through the new supply.”

    What’s next?  

    Hedge Funds, not capitalizing on the turmoil, and even losing

    Well, hedge funds are having their worst year EVER, with fewer than one in five beating a basic market benchmark:

    In fact, this has been the year investors wanted to do anything but try to pick stocks. Active fund managers had their worst first half ever, with fewer than one in five beating a basic market benchmark, according to data from Bank of America Merrill Lynch that go back to 2003.Stock pickers were done in by two major factors: following the crowd and an uneven pattern of correlations among stocks. The 10 most-crowded stocks lagged the 10 least-owned by a whopping 18 percentage points, which BofAML called “an atypically high spread.”

    So what’s left?

    Forex Markets to dominate the next 20 years

    There’s always Forex algorithms, which Wall St. simply afraid of, because they don’t ‘control’ the FX markets.  Some FX strategies perform month in and month out like clockwork, a pension fund’s dream – but why go with something that works when it’s politically correct to lose with hedge funds (it’s good for jobs, right?).

    The point is that, FX is a money market – and a super set of other markets.  If the stock market completely crashes like 50%, investors will still have trillions in cash.  It will even create a dollar shortage.  But that cash has to go somewhere.  Some, will go to Euros, Swiss Francs, and other ‘money’.  Bitcoin isn’t a percent of a percent of a percent, although certainly money will flow into Bitcoin.  Bitcoin isn’t viable alterantive to major FX currencies simply because of acceptability.  It’s not possible to pay for goods in foreign countries in Bitcoin – but many accept US Dollars.  Until that changes – or until the United States of America ceases to exist as a country (which is probably the only event that could really obliterate FX markets) – then, FX is going to be the only game left in town.  Why?  Because, the US Dollar is supported by bombs.  As long as the US Army has enough gas in their tanks, and munitions in their supply, you can bet dollar markets will function.  Other markets, like real estate, don’t have such protection.  But there’s a good reason for that.  Because all markets DEPEND on FX.  Without a dollar market, the stock market couldn’t exist.  If you want to be Wall St.’s next HFT firm, you first need to fund an account WITH DOLLARS.  

    So, although many markets teetering on the brink of implosion, FX looking stronger than ever, and until there’s a viable alternative (which considering alternatives, China, Russia, Bitcoin, etc… not a real solid candidate next 20 years) we can expect FX supremacy and US Dollar Hegemony for the long term.  So, if you’re still naive to the realities of FX – now’s a great time to start learning!

    If you don’t know Forex, checkout the book Splitting Pennies – Understanding Forex – or checkout Fortress Capital Trading Academy, who offers a great Introductory course.

  • DOJ Drops Charges Against Arms Dealer Who "Threatened To Expose" Hillary Arming Islamic Extremists

    In what would under other circumstances likely be a major media spectacle, Politico reported that the Obama administration is moving to dismiss charges against an arms dealer whom it had accused of selling weapons destined for Libyan rebels and who had threatened to expose Hillary Clinton’s talks about arming anti-Qaddafi rebels.

    According to a motion filed in federal court in Phoenix, the DOJ on Monday filed a motion to drop the case against the arms dealer, an American named Marc Turi. One potential reason for the surprising move is that as Politico writes, the deal averts a trial that threatened to cast additional scrutiny on Hillary Clinton’s private emails as Secretary of State, and to expose reported Central Intelligence Agency attempts to arm rebels fighting Libyan leader Moammar Qadhafi.


    Marc Turi

    Turi was indicted in 2014 on four felony counts: two of arms dealing in violation of the Arms Export Control Act and two of lying to the State Department in official applications. The charges accused Turi of claiming that the weapons involved were destined for Qatar and the United Arab Emirates, when the arms were actually intended to reach Libya. Turi’s lawyers argued that the shipments were part of a U.S. government-authorized effort to arm Libyan rebels. It’s unclear if any of the weapons made it to Libya, and there’s no evidence linking weapons provided by the U.S. government to the Benghazi attacks.

    According to Politico government lawyers were facing a Wednesday deadline to produce documents to Turi’s legal team, and the trial was officially set to begin on Election Day, although it likely would have been delayed by protracted disputes about classified information in the case. A Turi associate asserted that the government dropped the case because the proceedings could have embarrassed Clinton and President Barack Obama by calling attention to the reported role of their administration in supplying weapons that fell into the hands of Islamic extremist militants.

    Making matters worse, Turi’s case had delved into emails sent to and from the controversial private account that Clinton used as Secretary of State, which the defense planned to harness at any trial.

    “They don’t want this stuff to come out because it will look really bad for Obama and Clinton just before the election,” said the associate.

    Leery of admitting the actual truth, in the dismissal motion, prosecutors were vague saying that “discovery rulings” from U.S. District Court Judge David Campbell contributed to the decision to drop the case. The joint motion asks the judge to accept a confidential agreement to resolve the case through a civil settlement between the State Department and the arms broker.

    Additionally, Turi’s defense was pressing for more documents about the alleged rebel-arming effort and for testimony from officials who worked on the issue the State Department and the CIA. The defense said it planned to argue that Turi believed he had official permission to work on arms transfers to Libya. “If we armed the rebels, as publicly reported in many, many sources and as we strongly believe happened and as we believe at least one witness told the grand jury, then documents about that process relate to that effort,” Cabou told Campbell at the same hearing last year.

    And so, the best course of action for the DOJ was to shut the case down, or else risk drawing unwanted attention to Hillary at the most sensitive time for the presidential candidate.

    “Our position from the outset has been that this case never should have been brought and we’re glad it’s over,” said Jean-Jacques Cabou, a Perkins Coie partner serving as court-appointed defense counsel in the case. “Mr Turi didn’t break the law….We’re very glad the charges are being dismissed.”

     

    Under the deal, Turi admits no guilt in the transactions he participated in, but he agreed to refrain from U.S.-regulated arms dealing for four years. A $200,000 civil penalty will be waived if Turi abides by the agreement.

     

    A State Department official confirmed the outlines of the agreement.

    To be sure, the lawsuit devolved into a case of who said what.

    According to a government official who asked not to be named, “Mr. Turi cooperated with the Department’s Directorate of Defense Trade Controls in its review and proposed administrative settlement of the alleged violations. Based on a compliance review, DDTC alleged that Mr. Turi…engaged in brokering activities for the proposed transfer of defense articles to Libya, a proscribed destination under [arms trade regulations,] despite the Department’s denial of…requests for the required prior approval of such activities.”

    “The proposal did not result in an actual transfer of defense articles to Libya,” the State Department official told Politico on Tuesday.

    On the other hand, Turi adviser Robert Stryk of the government relations and consulting firm SPG accused the government of trying to scapegoat Turi to cover up Clinton’s mishandling of Libya. “The U.S. government spent millions of dollars, went all over the world to bankrupt him, and destroyed his life — all to protect Hillary Clinton’s crimes,” he said, alluding to the deadly Sept. 11, 2012 terrorist attack on the U.S. Consulate in Benghazi, Libya.

    At a court hearing in 2015, Cabou said emails between Clinton and her top aides indicated that efforts to arm the rebels were — at a minimum — under discussion at the highest levels of the government.

    “We’re entitled to tell the jury, ladies and gentlemen of the jury, the Secretary of State and her highest staff members were actively contemplating providing exactly the type of military assistance that Mr. Turi is here to answer for,” the defense attorney said, according to a transcript.

    Whatever the case, the overhang of another Libya snafu potentially muddying up the waters just before the election, was something the Clinton campaign could not afford as Republicans still hold Clinton responsible for mishandling the circumstances around that attack.

    It is unlikely that the story will remain hushed for long, however: Stryk said that Turi was now weighing book and movie deals to tell his story, and to weigh in on the Benghazi attack.

  • All The Ways You Can Comply (& Still Die) During An Encounter With Police

    Submitted by John Whitehead via The Rutherford Institute,

    How do you protect yourself from flying fists, choking hands, disabling electrified darts and killing bullets?

    How do you defend yourself against individuals who have been indoctrinated into believing that they are superior to you, that their word is law, and that they have the power to take your life?

    Most of all, how can you maintain the illusion of freedom when daily, Americans are being shot, stripped, searched, choked, beaten and tasered by police for little more than daring to frown, smile, question, challenge an order or just exist?

    The short answer: you can’t.

    Now for the long answer, which is far more complicated but still leaves us feeling hopeless, helpless and vulnerable to the fears, moods and misguided training of every cop on the beat.

    If you ask police and their enablers what Americans should do to stay alive during encounters with law enforcement, they will tell you to comply (or die).

    It doesn’t matter where you live—big city or small town—it’s the same scenario being played out over and over again in which Americans are being brainwashed into believing that anyone who wears a government uniform—soldier, police officer, prison guard—must be obeyed without question, while government agents, hyped up on their own authority and the power of their uniform, ride roughshod over the rights of the citizenry.

    The problem, of course, is what to do when compliance is not enough.

    I’m not talking about the number of individuals—especially young people—who are being shot and killed by police for having a look-alike gun in their possession, such as a BB gun. I’m not even talking about people who have been shot for brandishing weapons at police, such as scissors.

    I’m talking about the growing numbers of unarmed people are who being shot and killed for just standing a certain way, or moving a certain way, or holding something—anything—that police could misinterpret to be a gun, or igniting some trigger-centric fear in a police officer’s mind that has nothing to do with an actual threat to their safety.

    Killed for standing in a “shooting stance.” In California, police opened fire on and killed a mentally challenged—unarmed—black man allegedly because he removed a vape from his pocket and took a “shooting stance.”

     

    Killed for holding a cell phone. Police in Arizona shot a man who was running away from U.S. Marshals after he refused to drop an object that turned out to be a cellphone.

     

    Killed for holding a baseball bat. Chicago police shot and killed a 19-year-old college student who was carrying a baseball bat around the apartment where he and his father lived.

     

    Killed for opening the front door. Bettie Jones was fatally shot—accidentally—when she attempted to open the front door for police responding to a domestic disturbance call.

     

    Killed for being a child in a car pursued by police. Jeremy David Mardis, six years old and autistic, died after police opened fire on a car in which he was a passenger.

     

    Killed for attacking police with a metal spoon. In Alabama, police shot and killed a 50-year-old man who reportedly charged a police officer while holding “a large metal spoon in a threatening manner.”

     

    Killed for running in an aggressive manner holding a tree branch. Georgia police shot and killed a 47-year-old man wearing only shorts and tennis shoes who ran towards police holding a stick in an “aggressive manner.”

     

    Killed for crawling around naked. Atlanta police shot and killed an unarmed man who was reported to have been “acting deranged, knocking on doors, crawling around on the ground naked.” Police fired two shots at the man after he reportedly starting running towards them.

     

    Killed because a police officer accidentally pulled out his gun instead of his taser. An Oklahoma man suspected of trying to sell an illegal handgun was shot and killed after a 73-year-old reserve deputy inadvertently fired his gun instead of his taser.

     

    Killed for wearing dark pants and a basketball jersey. Donnell Thompson, a mentally disabled 27-year-old described as gentle and shy, was shot and killed after police—searching for a carjacking suspect reportedly wearing similar clothing—encountered him lying motionless in a neighborhood yard.

     

    Killed for telling police you lawfully own a firearm and have a conceal-and-carry permit. Philando Castile was shot and killed during a routine traffic stop allegedly over a broken tail light. As he was reaching for his license and registration, Castile explained to police that he had a  conceal-and-carry permit. That’s all it took for police to shoot Castile four times in the presence of his girlfriend and her 4-year-old daughter.

     

    Killed for leaving anywhere at all when a police officer pulls up. Deravis Caine Rogers was killed after starting to drive away from an apartment complex right around the same time as a police officer pulled up. Despite the fact that the police officer had no reason to believe Rogers was a threat or was suspected of any illegal activity, the officer fired into Rogers’ passenger side window.

     

    Killed for driving while deaf. In North Carolina, a state trooper shot and killed 29-year-old Daniel K. Harris—who was deaf—after Harris initially failed to pull over during a traffic stop.

     

    Killed for being homeless. Los Angeles police shot an unarmed homeless man after he failed to stop riding his bicycle and then proceeded to run from police.

     

    Killed for being old and brandishing a shoehorn. John Wrana, a 95-year-old World War II veteran, lived in an assisted living center, used a walker to get around, and was shot and killed by police who mistook the shoehorn in his hand for a 2-foot-long machete and fired multiple beanbag rounds from a shotgun at close range.

     

    Killed for having your car break down on the road. Terence Crutcher, unarmed and black, was shot and killed by Oklahoma police after his car broke down on the side of the road. Crutcher was shot in the back while walking towards his car with his hands up.

     

    Killed for holding a garden hose. California police were ordered to pay $6.5 million after they opened fire on a man holding a garden hose, believing it to be a gun. Douglas Zerby was shot 12 times and pronounced dead on the scene.

    Now you can make all kinds of excuses to justify these shootings, and in fact that’s exactly what you’ll hear from politicians, police unions, law enforcement officials and individuals who are more than happy to march in lockstep with the police. However, to suggest that a good citizen is a compliant citizen and that obedience will save us from the police state is not only recklessly irresponsible, but it is also deluded and out of touch with reality, because in the American police state, compliance is no longer enough.

    Frankly, as these incidents make clear, the only truly compliant, submissive and obedient citizen in a police state is a dead one.

    If you’re starting to feel somewhat overwhelmed, intimidated and fearful for your life and your property, you should be.

    As I point out in my book Battlefield America: The War on the American People, “we the people” are now at the mercy of law enforcement officers who have almost absolute discretion to decide who is a threat, what constitutes resistance, and how harshly they can deal with the citizens they were appointed to “serve and protect.”

    Sad, isn’t it, how quickly we have gone from a nation of laws—where the least among us had just as much right to be treated with dignity and respect as the next person (in principle, at least)—to a nation of law enforcers (revenue collectors with weapons) who treat us all like suspects and criminals?

  • University Distributes Seven-Page Speech Guide

    By Kate Hardiman, University of Notre Dame, via The College Fix

    Student leaders of this year’s freshman orientation at James Madison University were given a list of 35 things they should avoid saying, including phrases such as “you have such a pretty face,” “love the sinner, hate the sin,” “we’re all part of the human race,” “I treat all people the same,” “it was only a joke,” “I never owned slaves,” and “people just need to pick themselves up by their bootstraps,” among other expressions.

    Those phrases and others on the list “widen the diversity gap” and do not “create a safe and inclusive environment,” according to the seven-page handout, a copy of which was provided to The College Fix by a campus spokesman.

    Adapted from Dr. Maura Cullen’s book “35 Dumb Things Well-Intended People Say: Surprising Things We Say that Widen the Diversity Gap,” the list also classifies some compliments and encouraging words, such as calling someone “cute” or saying “I know exactly how you feel,” as a no-no.

    Many of the “dumb” statements also pertained to race. “I don’t see color,” “I’m colorblind” and “I don’t see difference. We’re all part of the same race, the human race” were all advised against. “If you are going to live in this country, learn to speak the language” also made the list.

    After each phrase, an explanation as to why it should be avoided was given. Expressions on race allegedly make people of color feel invisible and diminish their life experiences, the handout states. Statements of empathy supposedly “shuts the other person down,” it adds. Saying to LBGTQ people “what you do in the privacy of your own bedroom is your business” is “hurtful and annoying” because it does not acknowledge the quality and depth of their relationship outside the bedroom, the handout states.

    The last item on the list warns against labeling something as political correct, calling it “an attempt to shut the other person up.”

    James Madison University’s director of communications Bill Wyatt told The College Fix via email that “this was just an exercise, prior to orientation, to get our volunteers to understand how language affects others. The list was not distributed to our first-year students nor were the volunteers instructed not to use the phrases.”

    Yet page one of the handout, written by JMU, reads that orientation leaders should “use this handout as a resource” to help accomplish the goal of creating a “safe and inclusive environment for your first year students.”

    They were also called upon by the handout to “take some time to reflect on your prejudices and biases, and how that might affect your interactions with students.”

    The full list of 35 “dumb” expressions is:

    1. “Some of my best friends are …”
    2. “I know exactly how you feel.”
    3. “I don’t think of you as …”
    4. “The same thing happens to me too.”
    5. “It was only a joke! Don’t take things so seriously.”
    6. What do ‘your’ people think.”
    7. “What are you?” or “Where are you really from?”
    8. “I don’t see color” or “I’m color blind.”
    9. “You are so articulate.”
    10. “It is so much better than it used to be. Just be patient.”
    11. “You speak the language very well.”
    12. Asking black people about their hair or hygiene.
    13. Saying to LBGTQ people “what you do in the privacy of your own bedroom is your business.”
    14. “Yes, but you are a ‘good’ one.”
    15. “You have such a pretty face.”
    16. “I never owned slaves.”
    17. “If you are going to live in this country, learn to speak the language!”
    18. “She/he is a good person. She/he didn’t mean anything by it.”
    19. “When I’ve said the same thing to other people like you, they don’t mind.”
    20. Calling women “girls, honey, sweetie pie” or other familiar terms.
    21. When people of color say, “It is not the same thing.”
    22. When people of faith say, “Love the sinner, hate the sin.”
    23. When white men say, “We are the ones being discriminated against now!”
    24. Referring to older people as “cute.”
    25. Asking a transgender person, “What are you really? A man or a woman?”
    26. Referring to the significant other, partner, or spouse of a same gender couple as their “friend.”
    27. “Why do ‘they’ (fill in the blank) always have to sit together? They are always sticking together.”
    28. “People just need to pick themselves up by their bootstraps.”
    29. People with disabilities are “courageous.”
    30. “That’s so gay/queer. That’s so retarded.”
    31. “I don’t see difference. We are all part of the same race, the human race.”
    32. I don’t care if you are pink, purple or orange, I treat all people the same.”
    33. Asking a transgender person, “Have you had the operation.”
    34. Saying to a Jewish person, “You are so lucky to have ‘your’ Christmas spread over a week!”
    35. “Here’s another book on political correctness.”

    Click here to read the entire document.

  • Clinton Foundation Allegedly Hacked Exposing Thousands Of Donor Databases; "Pay To Play" Folder

    While the hack of the Clinton Foundation was foreshadowed two months ago, moments ago notorious hacker Gufficer 2.0, who previously was responsible for hacking the DNC and DNCC not to mention the resignation of Debbie Wasserman Shultz, announced that the moment “many of you have been waiting for” has come, by revealing that the Clinton Foundation has been hacked.

    This is what Guccifer 2.0, who has denied being affiliated with the Russian government claiming that like the original Guccifer he is from Romania, posted moments ago on his website:

    So, this is the moment. I hacked the Clinton Foundation server and downloaded hundreds of thousands of docs and donors’ databases.

     

    Hillary Clinton and her staff don’t even bother about the information security. It was just a matter of time to gain access to the Clinton Foundation server.

    The unknown hacker has allegedly exposed 1,000 of Hillary donors (a small list of master donors can be found here)…

    Guccifer

     

    …corporate donations made to various House representatives….

    Guccifer

     

     

    …as well as Wall Street bank donations, curiously cross-referenced to how much TARP funding they received.

    Guccifer

     

    As Guccifer notes,” It looks like big banks and corporations agreed to donate to the Democrats a certain percentage of the allocated TARP funds.“

    Guccifer 2.0 also posted a note to Julian Assange who was mocked on Tuesday morning after he failed to produce Clinton documents he has long claimed to have.

    “P.S. I’m pleased to congratulate Wikileaks on their 10th anniversary!!!,” Guccifer 2.0 writes. “Julian, you are really cool! Stay safe and sound!”

    * * *

    But the most interesting, and perhaps damning, finding is the following: a root directory snapshot revealing a folder which Hillary may have some trouble explaining: “Pay to Play“

    Guccifer

    The hacker also provides a link to the hundreds of thousands of other documents he has access to saying “I can’t post all databases here for they’re too large. I’m looking for a better way to release them now.”

    We will go through the files, with a focus on Pay to Play because this may be the clearest confirmation that after repeated accusations that the Clinton Foundation was primarily a conduit for rich donors to get access to privileged kickbacks, or well “pay to play”, this was indeed the case, although the fact that someone actually left a folder with that name in the foundation’s server makes us wonder if someone is really that stupid, or whether this hack is even real.

    To be sure, as The Hill notes, some of the files contained in the leaked data dump appear to originate not from the Foundation but from the DNCC:

    A sampling of the posted documents include a spreadsheet of big bank donations, a list of primarily California donors, an outdated spreadsheet of some Republican House members — and a screenshot of files he claimed to have obtained, one of which was titled “Pay to Play.”

     

    But there are a number of red flags that suggest the documents are in fact from a previous hack on the Democratic Congressional Campaign Committee (DCCC), not a new hack on the Clinton Foundation.

     

    A spot check of some of the people on the donor list against FEC filings found that they all lined up with DCCC contributions.

     

    The Clinton Foundation discloses its donors, and many of the alleged donors published by Guccifer 2.0 do not appear to have given to the organization.

    One spreadsheet was allegedly created by a Kevin C. McKeon at DCCC in 2009. There was a Kevin McKeon that worked at DCCC at that time.

    The Clinton Foundation has denied the hack, with president Donna Shalala saying that “none of the files or folders shown are ours.”

     

     

  • Gundlach: "Deutsche Bank Will Be Bailed Out But What About Credit Suisse"

    Last Thursday, when Deutsche Bank was flailing ahead of the now confirmed fake report of a reduced settlement with the DOJ, Reuters spoke to Jeff Gundlach about his thoughts regarding the German lender, his advice was simple: don’t touch it. “I would just stay away. It’s un-analyzable,” Gundlach said about Deutsche Bank shares and debt. “It’s too binary.” Gundlach said investors who are betting against shares in Deutsche Bank might find it futile. Maybe, but not if they cover their shorts before the max pain point, something which the market – where equity/CDS pair trades now allow a “go for default” strategy – will actively seek out.

    “The market is going to push down Deutsche Bank until there is some recognition of support. They will get assistance, if need be.”

    What happens then? “One day, Deutsche Bank shares will go up 40 percent. And it will be the day the government bails them out. That jump will happen in a minute,” Gundlach said. “It is about an event which is completely out of your control.”

    The very next day his forecast was proven largely accurate, when DB soared some 25% from its overnight lows on, if not a bailout, then a report of a potentiel reprieve, even if the report ultimately ended up being wrong.

    Then, earlier today, during the Grant’s Fall 2016 investment conference, Gundlach once again discussed the troubled German bank and said that “you cannot save your faltering economy by killing your financial system and one of the clear poster children for this is Deutsche Bank’s stock price,” Gundlach, 56, said at Grant’s Fall 2016 Investment Conference on Tuesday in New York. “If you keep these negative interest rate policies for a sufficient future period of time you are going to bankrupt these banks.”

    Europe’s banks have seen their value shrink by about $280 billion this year, with Deutsche Bank losing almost half its market value. Germany’s largest lender extended losses after the U.S. Department of Justice last month requested $14 billion to settle a probe into residential mortgage-backed securities, sparking concerns that it will have to raise capital.

    Repeating what he said one week ago, Gundlach added that while the Frankfurt-based bank would ultimately be rescued by the German government if needed, other banks in the region wouldn’t be able to count on such support, Gundlach said.

    “Deutsche Bank will be supported by Germany if push comes to shove,” he said. “But what about Credit Suisse, which has shown a similar decline in stock price? Who’s there to bail them out?”

    As Bloomberg notes, having been largely forgotten in the din surrounding DB, Credit Suisse has lost about 40 percent of its value this year. The Swiss bank raised about $6 billion of capital last year under new Chief Executive Officer Tidjane Thiam to help fund a restructuring plan.

    Joining the “other” bond king who earlier today railed against unorthodox monetary policies, Gundlach warned again that negative rates risk undermining the proper functioning of capital markets, and blamed European banking’s woes on the ECB’s policies.

    However, what is a trapped central bank to do: Gundlach pointed out that even the Federal Reserve, which has not cut rates below zero, is seeing signs that its policies aren’t working. Gundlach has said that interest rates bottomed in July and that the market is looking for signs of fiscal stimulus and accelerating inflation. He’s predicting that rates on the U.S. 10-year bond may surpass 2 percent by the end of 2016. Which may explain why Gundlach told the Grant’s confernce audience that for the first time in years, he favored TIPS, which he has in the CORE fund, over nominal Treasuries.

    “For the first time in years, I am long TIPS,” he said.

    In a separate interview with Reuters, Gundlach added: “Implied future inflation priced into TIPS is low, too low for the environment likely to unfold over the next decade. Nominal Treasuries are likely to underperform TIPs over an institutional investment horizon.”

    While his inflationary bet may be premature, investors don’t seem to think so: DoubleLine posted a net inflow of $444.4 million into its open-end mutual funds in September, marking the Los Angeles-based firm’s 32nd consecutive month of inflows, while the $61.8 billion DoubleLine Total Return Bond Fund, the largest fund by total assets of the DoubleLine Funds, had a net inflow of $190.9 million in September, for a year-to-date net inflow of $8.3 billion.

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