Jan 29

Today’s News 29th January 2019

  • Paul Craig Roberts: The Delegitimization Of The White Male

    Authored by Paul Craig Roberts,

    We know that the white male has been delegitimized. Women’s studies, black studies, Latino studies, and Identity Politics have been demonizing, and teaching hatered of, white males since the 1980s. But where did these hate-filled special interest groups get their power? The answer is that effete white males handed it to them.

    It was white male university administrators who created the anti-white male propaganda degrees called women’s studies and black studies. It is the white males in the Democratic Party who endorse Identity Politics, an ideology that puts responsibility for all the evil in the world on white males.

    The latest white male collapse is that of the president of Notre Dame University. Catholics, themselves formerly a marginalized people in the United States and Great Britain, are guilty, according to Rev. John Jenkins, Notre Dame’s president, of displaying in Notre Dame’s main building a wall mural painted by Luis Gregori in 1880. In the Identity Politics that now rules even Catholic universities, the 1880 painting is viewed in the 21st century as depicting native Americans in stereotypical submissive poses before white European explorers.

    I would bet that most Americans would not read the painting in this way. But in American everything is determined by the few.

    Notre Dame’s president has decided that the solution to this “offense” is for the university to cover the mural.

    Apparently the only intelligent person present at Notre Dame university is a law student, Grant Strobl, who said that “if we adopt the standard of judging previous generations by current standards, we may reach a point where there are no longer accomplishments to celebrate.”

    This is a good point, but I would go farther. Luis Gregori’s painting was not intended to depict the submission of native Americans to the white man. Here we have another case of real history replaced by fake history with the connivance of the president of Notre Dame University.

    Think about this for a moment. Is Luis Gregori’s painting the only painting, the only piece of art that can be construed, or misconstrued, as giving offense?

    What about, for example, the iconic photograph of the raising of the flag on Iwo Jima? Isn’t this celebration of American triumph over the Japanese insensitive and offensive to Japanese?

    How many military memorials are there that cannot be construed as giving offense to someone? How many paintings of martial and religious events are there that Identity Politics or some protected group cannot find offensive? What happens to history and to literature when we have to pretend that things did not happen because they are offensive to someone?

    Are all of the cowboy and Indian movies destined for the Memory Hole?

    How many songs can survive the scrutiny given to “Baby Its Cold Outside”? What about the Rolling Stones “Let’s Spend the Night Together,” or the Beatles “Why Don’t We Do It In the Road?”

    What about rapper songs? As blacks rank higher in the “preferred minority” category than white women, why isn’t it racist for a white female to resist the sexual advances of a black male?

    You get the idea. It is endless. Many of those pushing Identity Politics will be surprised when it turns on them.

    Western Civilization is under attack for giving offense. Collapse is everywhere visible. Not even America’s most prestigeous Catholic university can defend an historic mural. Will Jesus be next? Jesus chased Jewish money-changers out of the temple. Doesn’t that make him an anti-semite or a self-hating Jew?

    The categories that are used today with so much authority make no sense. There is no such thing as white and black races. There are many different white nationalities and ethnicities. There are Germans, Italians, French, Scandinavians, Slavs, Dutch, Greeks, English, Irish, Scots, and so forth. Similarly for blacks. A Maasai is not a Zulu. A Tutsi is not a Hutu.

    There is no doubt that European nationalities have committed many atrocities, mainly against one another, as have black tribes. As recently as 1994 the Hutus killed one million Tutsis–70 percent of the Tutsi population–in the Rwanda Genocide.

    Just as it is not anti-American to criticize the United States, it is not anti-semetic to criticize Israel or sexist to criticize a woman or racist to criticize a black.

    Slavery is not a black/white issue. Over the course of history more whites have been enslaved than blacks. As Karl Polanyi documented in his book, Dahomey and the Slave Trade, black slavery originated in the slave wars of the black kings of Dahomey. Europeans purchased slaves from the black kingdom of Dahomey.

    Identity politics has turned Western civilization against itself. Those claiming victim status have acquired many privileges that violate equality under law. They are granted quotas in university admissions and appointments and in business employment and promotions. They can bring charges against those of European descent for insensitivity and racism by misconstruing language, expressions, body language, facial expressions, art works and scientific theories as racist. Females have acquired similar power over men. Black studies and women studies rewrite history in order to present the white male as a more hateful figure.

    Feminists and racial minorities can make inflammatory statements calling for the death of white males without suffering any consequence.

    Statements such as those by Texas State University student Rudy Martinez – “white is an abomination,” “I hate you because you shouldn’t exist,” “white death will mean liberation for all”

    …by Lisa Anderson-Levy, a dean at Beloit College – “whiteness poses an existential threat to social, political and economic life in the US”

    …and by Georgetown University professor Christine Fair who most certainly intended to offend the Senate Judiciary Committee and Kavanaugh – “Look at this chorus of entitled white men justifying a serial rapist’s arrogated entitlement. All of them deserve miserable deaths while feminists laugh as they take their last gasps. Bonus: we castrate their corpses and feed them to swine? Yes”

    …do not foster amiable race and gender relations.

    Moreover, these statements demonstrate the privileged position women and “preferred minorities” have achieved over white males. Any white male student, dean or professor who made such statements about blacks and women would be dismissed and made unemployable. Remember the senior engineer at Google who was fired for saying that men and women have different traits and are good at different tasks. Simply stating an obvious truth has become a firing offense.

    The United States was a unique country in which traditional European enemies became assimilated as Americans. But assimilation is no longer emphasized or even permitted. The celebration of diversity and multiculturalism has split the population into victimizer and victimized groups, with hatred of the former taught to the latter. In place of unity, disunity has been created. The American future is not promising.

  • Watch Russian Fighter Jet Intercept US Spy Plane Over Baltic Sea

    Following reports about a tense standoff between Russian bombers and Canadian military aircraft in the Canadian Air Identification Zone last week, RT has published video of a similar encounter between US and Russian fighter aircraft that took place in the skies above the Baltic Sea.

    Though the report didn’t cite timing of the incident, RT reported that a Russian Su-27 fighter jet intercepted a US P-8а Poseidon reconnaissance plane which had been rapidly approaching approaching the Russian maritime border in the Baltic Sea, according to the Russian Defense Ministry.

    Russian radar picked up the approaching jet, and a Su-27 was scrambled in response. As the Russian jet closed in on the target, which it swiftly identified as a US Air Force reconnaissance plane, the US aircraft pulled away. The Russian jet then returned to base.

    Incidents like this one have become increasingly common since the annexation of Crimea in 2014, according to the Russian Defense Ministry.

    Back in November, the US complained about an “unsafe” intercept of another plane by an Su-27. As video of that incident showed, the Su-27 made a pass directly in front of the mission aircraft. Moscow insisted that the pass was, indeed, safe.

    The intercept of the US aircraft follows a similar incident last week involving a Swedish surveillance aircraft that had been flying over the Baltic Sea.

    The P-8 Poseidon is a modified version of a Boeing 737 that was developed for use by the Navy. It first entered service in 2013. The P-8 doesn’t only patrol and perform reconnaissance missions – it can also carry torpedoes and other weapons. Meanwhile, the Su-27 is a fourth generation fighter jet that was introduced by the Soviets in 1985. It is equipped with a 30mm gun and air-to-air missiles.

  • Venezuela – A Case Of Socialist-Organized Theft

    Authored by Daniel Lacalle via DLacalle.com,

    Much has been written about the economic disaster perpetrated by the Maduro-Chavez regime in Venezuela. The magnitude of it is simply difficult to match. A sad global example of how to destroy a rich country.

    The mistake that many make is to think that this wreck has been caused by a combination of incompetence and folly. And they are wrong. The Venezuelan socialist regime has carried out the largest organized robbery in history and has done so with a perfectly designed plan.

    The plan was always to expropriate the wealth of the whole country for the benefit of a few political leaders through plundering, destruction of currency and decapitalizacón of the state oil company

    What has happened to Venezuela is not a disaster or a coincidence, it is socialism.

    It is important to start by debunking the lies of the regime propaganda:

    The nonexistent blockade. The United States is one of Venezuela’s largest trading partners. Trade between the United States and Venezuela in 2018 grew by more than 9%. Venezuela has bilateral trade agreements with more than 70 countries. Chavismo, like the Castro regime in Cuba, manipulates its followers by calling the sanctions against members of the regime and the fraudulent use of the country’s funds a “blockade”. The only blockade suffered by Venezuela is that of Chavismo against its citizens.

    The nonexistent excuse of oil prices. Venezuela is the only OPEC country in economic depression and hyperinflation. All the oil-producing countries have adapted their economies without falling into the economic destruction and generalized poverty created by Chavismo in Venezuela. Chávez used to say “put the price of oil at zero and Venezuela will not enter into crisis”. It was not necessary. Venezuela squandered the oil revenues received during the first decade with Chavez when crude oil prices rose exponentially and destroyed any hint of wealth later.

    The real coup d’état. The only coup is the one that Maduro perpetrated when he manipulated an election whose result was not recognized by the majority of Western countries, with a totalitarian constituent process whose result is not recognized even by the company in charge of the voting system (Smartmatic). Chavismo has used seemingly democratic instruments to silence and destroy the National Assembly and perpetuate Maduro in power through fraudulent elections.

    “It is not real socialism”. Many say that Venezuela is not true socialism. If anything has characterized the Venezuelan regime is that it has applied the socialist recommendations and policies by the book: Systematic attack against property rights and nationalization of means of production as established in the National Socialist Plan 2007-2013: expropriate companies, use the box of state companies to political purposes, impose intervened prices and print money massively.

    The Venezuelan economic wreck is the biggest organized robbery in history:

    First robbery: Expropriation. The Center for the Dissemination of Economic Knowledge (Cedice) estimates that more than 2,500 companies have been expropriated by the Chavez-Maduro regime. Of these companies, the vast majority are now bankrupt and have been devastated by socialist management. The NGO Transparencia Venezuela, in its report Property Owned by the State in Venezuela, describes as “terrible” the management of expropriated companies using ideological and political criteria: “Instead of increasing production, it has decreased.”

    Second robbery: the decapitalization of PdVSA. In 1998, PdVSA produced 3.5 million barrels per day, today it does not reach 1.3 million. Meanwhile, the government multiplied the number of employees, firing many excellent Venezuelan engineers and filling the company with crony political supporters, going from 25,000 employees in 1998 to 140,000 in 2017.

    PdVSA went from being one of the most efficient and important oil companies in the world to a disaster on the verge of bankruptcy. From their financial statements, it appears that the government drained up to 12 billion US dollars in some years to finance political spending, destroying the cash-flow, balance sheet and the future of the company. These funds have disappeared in a network of clientelistic interests and offshore accounts of regime leaders. Brutal cost increases, spectacular worsening of production and plundering of the cash flow to pay for political spending led the company to increase debt to more than 34 billion dollars, after having been one of the most profitable and with the best balance sheets in the world.

    Third robbery: Savings and wages. Inflation, the tax of the poor.  The Chavez regime economic advisers repeated, “printing money for the people does not cause inflation”… Money supply has been increasing exponentially, by 3,000% in a single year, 2018, destroying the purchasing power of the currency.

    The strategy is simple, and it is textbook socialism: The government massively increases spending, subsidies and public employment printing local currency thinking that the dollars come from heaven because the Government says so. Then, it destroys its economy by expropriating companies, sinking the private initiative and imposing prices that do not cover the cost of production due to the destruction of the purchasing power of the currency. As such, the economy enters into a downward spiral, so the government continues to spend even more in nominal terms and finances it by printing more worthless paper notes while its foreign exchange reserves plummet. The currency becomes worthless and the government generates hyperinflation and poverty.

    Venezuela is today the most unequal country in Latin America (ENCOVI, 2017) and one of the poorest. In 2014, extreme poverty was 23.6% and in 2017 it was 61.2%. Total poverty exceeded 87% in 2017 (according to a study by the Central University of Venezuela and the Simón Bolívar University). Venezuela’s economic freedom score according to the Economic Freedom Index of the Heritage Foundation is 25.9, making its economy the 179th in terms of freedom in the 2019 Index. One of the least free economies in the world. According to the Index “monetization of large public deficits, coupled with mismanagement of the state-dominated oil industry, has led to hyperinflation and shortages of foreign currency, basic goods, and industrial inputs. An economic plan launched in August 2018 included the removal of five zeroes from the currency, a massive devaluation, and another large increase in the minimum wage amid persistent ad hoc policy interventionism, heavy state control of the economy, and blatant disregard for the rule of law”.

    During the dictatorship of Maduro inflation has reached one million percent and the IMF estimates that it will be 10,000,000% by 2019. Ricardo Hausmann, a professor at Harvard University, perfectly explained the destruction via printing of currency: “When Chávez came to power, the dollar was at 0.547 bolivares (547 of the old). When Maduro arrived it was 26 bolivars: 48 times more expensive. Now Maduro devalued to 6,000,000, 231,000 times more expensive than he found it and 11,000,000 times more expensive than when Chávez arrived. ” Thus, after several increases in the minimum wage on paperless paper, that minimum wage has been at less than $ 17 per month. “Printing money for the people.”

    The result of this organized robbery? More than 300 billion US dollars stolen, according to the National Assembly, a devastated economy and massive poverty. Textbook socialism, same results as always.

  • Barclays Execs Accepted "Dodgy" Qatar Deal Because They Were "Paranoid" About Gov't Takeover

    More than ten years have passed since Lehman Brothers filed for bankruptcy, ushering in the most acute phase of the financial crisis. And while the punishing affects of the crisis have permanently harmed the finances of middle-class Americans and citizens of other Western nations – savings rates remain at post-crisis lows and fewer adult Americans own stocks than at any point in recent memory – no bank executives have faced criminal penalties – that is, until very recently.

    The first trial of a group of banking executives pertaining to fraud that occurred during the crisis began earlier this month in a London courthouse. And while it has nothing to do with sales of the toxic mortgage backed securities and subprime loans that nearly brought down the financial system and forced millions of consumers out of their homes, it might be the closest thing to closure that the UK’s Serious Fraud Office can offer.

    As we reported a few weeks back, four Barclays executives, including former CEO John Varley, are on trial for fraud related to two emergency capital raises undertaken in 2008. To try and stave off nationalization (which would have devastated shareholders and, more importantly, placed the executives’ bonuses at risk) the bank turned to a group of Qatari investors who pumped a total of roughly 12 billion pounds (nearly $16 billion) into the bank. In exchange for the emergency loans, Barclays paid 322 million pounds ($423 million) in “fees” – which were, in reality, “dodgy” payoffs to the Qatari sheikh who arranged the financing. To ensure that the deal went through, the executives allegedly conspired to conceal these payments from their investors, the British state and – most importantly – the press.

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    John Varley

    Now that the jury has been selected and the trial begun in earnest, some more juicy details about the prosecution’s case are beginning to leak to the media. To that end, Bloomberg reported that the SFO has produced emails, phone calls and transcripts of conversations to demonstrate to the jury that the four men conspired to mislead investors by entering into fake advisory deals with Qatar to conceal the side payments, and making up a “misleading audit trail” to mask the fact that the money was sent directly to Virgin Islands-based company called “Challenger” that was controlled by the family of then-Prime Minister Sheikh Hamad bin Khalifa Al Thani.

    Advisors to Varney reportedly were surprised that he had agreed to go along with the “dodgy” deal.

    After lengthy discussions in June 2008, Sheikh Hamad agreed to declare his interest in Challenger, but Varley’s willingness to allow him to be paid a commission structured as an advisory fee still surprised Jenkins, the point man on dealing with the Qataris. He described Sheikh Hamad’s demands as “dodgy” and “wrong,” according to phone transcripts.

    The discussions presented on Friday related to the first capital raising, in which the Barclays executives agreed to pay the Qataris a 3.25 percent investment commission – more than double the rate other investors were getting. They agreed to make the extra payments via a deal in which the Qataris would purportedly deliver advice to the bank in the Middle East.

    […]

    “I’m very surprised that John Varley, given his ethics, is doing this,” former Middle East head Roger Jenkins told colleague Richard Boath in a phone call that was played to the jury. “It’s like having the president of the United States advise JP Morgan, you just can’t have it.”

    In correspondence between the four men and other Barclays employees, European Financial Institutions Head Richard Boath, one of the four executives charged with fraud, joked that he wouldn’t wind up in the dock if the deal were uncovered because he owns a home in Brazil, which doesn’t have an extradition treaty with the UK.

    The executives said they were seeking advice from their lawyers on the matter, according to transcripts of the conversations. At one point, Boath asked Barclays lawyer Judith Shepherd whether they would have to demonstrate that the Qataris actually provided services. Shepherd said that they would if there were challenges from investors, the regulator or criminal authorities.

    “I’m already feeling sick,” Boath responded. “I wouldn’t have agreed to it, but there you go.”

    “Well big dog will be in the dock first,” Shepherd said, referring to Jenkins. “We’re not playing a game here.”

    When Barclays presented a draft advisory agreement to the Qataris, it was roundly rejected, Boath said in another call with Shepherd.

    “I could hear the spit landing on the telephone,” he said.

    “I do know what he’s getting at but he’s got to grow up,” Shepherd said. “He is going to have to give the services in exchange, otherwise you are going to end up in front of the Fraud Squad explaining why.”

    “No, I’ve got a house in Brazil, there’s no extradition treaty,” Boath joked. “I’m off.”

    In another phone call, Roger Jenkins, the bank’s former Middle East head who helped arrange the deal, chided his colleagues to stop worrying about what might happen if authorities caught wind of their scheme and just “get on with it.”

    In a phone call with Kalaris, Boath raised the possibility of their plan being discovered, prosecutor Brown said, and played a recording of the conversation.

    “There’s obviously the jeopardy that we’re rumbled and people say well that was bulls–t, you know, this is just a fee in the backdoor,” Boath said.

    “My guess is that we will be completely protected if we disclose that we had an arrangement, right?” Kalaris responded, with Boath then saying that “everyone will have a view on this.”

    As Barclays hesitated about the fees, fearing the investment may be blocked by regulators, Jenkins grew impatient.

    “F–king stop messing around you stupid people,” Jenkins said in a phone call with Boath, which was played to the jury. “We want their money, so take the f–king risk. Just put it in the prospectus, let’s just move on for f–k’s sake.”

    During the crisis, the ever-present fear that the government could turn up at their front door and nationalize the bank led to “paranoia” among top executives, including Investment Banking head Bob Diamond, who went on to become CEO of Barclays (before being toppled in the aftermath of the Libor scandal). He hasn’t been charged in the case.

    “John is scared to death that the government turn up tomorrow morning,” Jenkins said in the recording. “And Bob is f—ing paranoid.” Diamond was also worried about losing his job, he added.

    Despite the brazenness of these comments, the SFO still has its work cut out for it: prosecutors already botched a criminal case against the bank itself. And due to a shakeup in the people running the probe, many are worried that the SFO might miss what could be its best shot at punishing banking executives for misdeeds committed during the crisis.

  • Massachusetts AG: Family Behind Oxycontin Is Responsible For Opioid Epidemic

    Authored by Mac Slavo via SHTFplan.com,

    The Massachusetts attorney general has declared that the family behind the drug Oxycontin is responsible for the opioid epidemic ravaging the United States.  Purdue Pharma and eight members of the Sackler family who own the company, are being accused of personally starting the opioid crisis by deceptively selling Oxycontin.

    According to CBS News, MA attorney general, Maura Healey alleges the Sackler family hired “hundreds of workers to carry out their wishes.” Those wishes included pushing doctors to get “more patients on opioids, at higher doses, for longer, than ever before” all while paying “themselves billions of dollars.” In her lawsuit, Healey names eight members of the family that own Purdue Pharma, alleging they “micromanaged” a “deceptive sales campaign.” In the conclusion to the complaint, Healey said the Sackler family used the power at their disposal to engineer an opioid crisis.

    About 400,000 people died from opioid overdoses between 1999 and 2017, according to the Centers for Disease Control and Prevention. The opioid epidemic is also being blamed for the drop in life expectancy in the United States that has been falling since its peak in 2014. On average, about 130 Americans die every day from an opioid overdose.

    “They don’t want to accept blame for this. They blame doctors, they blame prescribers and worst of all, they blame patients,” Healey said.

    Purdue Pharma, on the other hand, called the accusations “a rush to vilify” the drugmaker.

    Healey also said that Purdue Pharma and the Sackler family are “one and the same.”

    There’s a lot in the lawsuit that’s still redacted, and lawyers for Purdue plan to argue on Friday that it should stay that way, reported CBS News.

    In a statement, Purdue Pharma said the lawsuit “distorts critical facts” and “cherry-picked from among tens of millions of emails and other business documents.” In one such alleged instance, then-president Richard Sackler devised what Healey describes as Sackler’s “solution to the overwhelming evidence of overdose and death,” writing in a confidential email, “we have to hammer on the abusers in every way possible. They are the culprits and the problem.”

    “Massachusetts’ amended complaint irresponsibly and counterproductively casts every prescription of OxyContin as dangerous and illegitimate, substituting its lawyers’ sensational allegations for the expert scientific determinations of the Food and Drug Administration (FDA) and completely ignoring the millions of patients who are prescribed Purdue Pharma’s medicines for the management of their severe chronic pain.

    In a rush to vilify a single manufacturer whose medicines represent less than 2 percent of opioid pain prescriptions rather than doing the hard work of trying to solve a complex public health crisis, the complaint distorts critical facts and cynically conflates prescription opioid medications with illegal heroin and fentanyl, which are the leading cause of overdose deaths in Massachusetts. Throughout the complaint, the Commonwealth disregards basic facts about Purdue’s prescription opioid medications…”

    – Purdue Pharma to CBS News in a statement

    Massachusetts is one of 36 states now suing Purdue Pharma. The states are accusing the company of deception in downplaying the dangers of OxyContin. In a 2007 federal settlement, the company admitted to falsely selling the drug as “less addictive” than rival products and were therefore forced to pay $630 million in fines.

    Because of the highly addictive properties of opioids, CBD oil is fast becoming a replacement for expensive and dangerous drugs like Oxycontin.  Studies have found that CBD oil is effective for treating neuropathic pain, arthritis pain, anxiety, sleep disorders, and depression.

    “I’ve had some patients that have been able to get off some of those pain medications, which they hated taking,” said pharmacist Ira Katz. “It has no addictive properties and far less side effects than do a lot of the prescription pain medications.”

    And you get the added bonus of staying out of the increasing drama between government and Big Pharma regarding the blame game for the opioid epidemic.

  • UAE Gender Equality Awards Go To All Male Recipients

    For those not holding their breath, the results are in from the United Arab Emirates’ gender equality awards. Perhaps to be expected when a foremost Sunni Gulf autocratic oil and gas state that mimics a medieval feudal monarchy decides to showcase its “progress” in the area of gender equality in the workplace, we have something that sounds straight out of The Onion, but is all too real.

    As The Guardian reports, social media exploded in laughter and ridicule “after it emerged that all of the winners of an initiative designed to foster gender equality in the workplace were men.”

    Indeed the “awards ceremony” photo op was classic, featuring an all-male cast of honorees receiving awards in the following categories: Best Personality for Supporting Gender Balance, Best Federal Entity for Supporting Gender Balance, and the Best Initiative for Supporting Gender Balance.

    UAE Vice President and ruler of Dubai, Sheik Mohammed bin Rashid al-Maktoum, bestowed the certificates and medals in a ceremony on Sunday on the male winners representing various government ministries, including the finance ministry, the federal competitiveness and statistics authority and ministry of human resources respectively.

    Thus the additional absurd element is that the UAE government was essentially handing out government “gender equality” recognition awards to itself. This included top ranking generals given that the deputy prime minister and minister of the interior, Lt Gen Sheikh Saif bin Zayed al-Nahyan, received the “best personality supporting gender balance” — supposedly for his tireless efforts implementing maternity leave in the UAE’s military.

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    “We are proud of the success of Emirati women and their role is central to shaping the future of the country,” a tweet from the official Dubai media office announced. “Gender balance has become a pillar in our government institutions.”

    Of course, the internet had a good laugh over the UAE’s self-congratulatory progress in  “gender balance”…

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    And the Dubai Media Office’s follow-up tweet dug a deeper hole, after perhaps realizing that a few token women needed to be thrown into the group photo op and media statement. It said: “We are proud of the success of Emirati women and their role is central to shaping the future of the country.” 

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    Don’t forget to add a few women in the group shot…

    See you next year men for the “Gender Balance Index 2019” awards show…

  • PG&E To File Bankruptcy Within Hours; Joins Lehman And WorldCom In Tragic Trifecta

    Confirming earlier reports that distressed California utility PG&E had rejected a proposal by some of the world’s most prominent investors that would keep it out of bankruptcy, moments ago Bloomberg reported that the board of the embattled utility which is facing $30 billion in wildfire liabilities, voted late Monday to file for bankruptcy protection as soon as midnight.

    In pursuing a Chapter 11 bankruptcy filing, PG&E is declining a proposal by an investing group led by Paul Singer’s Elliott Management that would’ve been backed by $4 billion in bonds and given the company enough cash to stay avoid bankruptcy while working through its liabilities. A second group of investors including Ken Griffin’s Citadel and Leon Black’s Apollo who had pitched a rival plan, were also rebuffed.

    By rejecting the last minute rescue bids, PG&E – which was rated investment grade as recently as a few weeks ago by both S&P and Moody’s- is set to file one of the biggest U.S. utility bankruptcies of all time, with over $30 billion in debt about to be in default. The company  which serves 16 million customers, said a Chapter 11 filing is the only way it can handle the crippling costs of 2017 and 2018 wildfires that its equipment has been blamed for igniting. Since November, when California was hit by the deadliest fire in its history, the company has seen its shares plunge by 75 percent and its credit rating cut to junk.

    By going from investment grade to bankruptcy within one year, PG&E will be what BofA recently dubbed not a “fallen angel” but a “failing angel”, representing a singular event: when it files for bankruptcy some time in the next 12 hours, PG&E will become the third largest IG default since 1999, behind Lehman and Worldcom, with $17.5bn of index eligible debt.

    The chart below lists all US index defaults since 1999 that occurred within one year of being included in ICE BofAML benchmark US high grade index. The three largest defaults in terms of index notional were Lehman ($34.9bn), WorldCom ($22.9bn) and CIT Group ($12.4bn).

    By filing before the end of the month, PG&E joins an exclusive group of formerly-IG companies, including Enron, Lehman and MF Global, that defaulted directly out of IG, before making it into the HY index first as Fallen Angels.

    The last minute investor proposals to provide PG&E with emergency funding were spurred by last week’s surprising finding that PG&E wasn’t responsible for 2017’s Tubbs Fire, the deadliest of the Wine Country blazes that tore through Northern California. The goal was to buy PG&E more time to seek relief from wildfire claims, perhaps through an act by state legislature, according to the people.

    In the end, however, it was not enough.

    The PG&E board vote followed a decision by California utility regulators to approve a waiver allowing PG&E to access $5.5 billion of debtor-in-possession financing, which is necessary to allow the company to operate under Chapter 11 protection. Bankers have been seeking to offer parts of that financing to investors, and after meeting resistance from some potential lenders, were still poised to sell the debt, Bloomberg reported.

    And while it is unclear how many bonds PG&E’s various investment consortiums own, one clear loser is BlueMountain Capital, which similar to Baupost, bought PG&E shares right before the stock collapsed, and challenged the California power giant’s plans to seek bankruptcy protection. In an open letter to PG&E’s board, it said there is “overwhelming evidence” that the utility holding company is solvent — and that a bankruptcy filing is “damaging, avoidable and unnecessary.”

    In retrospect, it may have also been inevitable, and the result will be tens of millions in losses for BTFDers like BlueMountain.

    In a regulatory filing, BlueMountain also cited a PG&E form 8-K earlier this month in which the company said it could shore up liquidity by using its assets to secure more capital, or access alternative capital. A spokesman for BlueMountain declined to comment on whether the firm is working with either of the rival financing groups.

    Meanwhile, oblivious to the demands of its vocal shareholders, PG&E is already preparing for life under bankruptcy protection with Reuters reporting that the company is set to hire turnaround specialist James Mesterharm as its chief restructuring officer to help the company navigate bankruptcy proceedings.

    Mesterharm, a managing director at AlixPartners, previously served as restructuring chief at Eastman Kodak during its bankruptcy proceedings, and also advised General Growth Properties and Zenith Electronics during their Chapter 11s. He has advised PG&E in the weeks leading up to its anticipated bankruptcy filing, Reuters said.

  • Bank Of England Urged To Hand Over Venezuela's Gold To Guaidó

    Just hours after The Bank of England refused to hand over $1.2 billion of Venezuela’s gold from its custody vaults (stored there after the completion of a gold-swap transcation with Deutsche Bank) to President Maduro (after heavy lobbying from US officials), The Guardian reports that a UK foreign office minister is now urging the same Bank of England to transfer the bullion to the self-proclaimed interim leader Juan Guaidó.

    In a statement to British MPs, Sir Alan Duncan said the decision was a matter for the Bank and its governor, Mark Carney, and not the government. But he added:

    “It is they who have to make a decision on this, but no doubt when they do so they will take into account there are now a large number of countries across the world questioning the legitimacy of Nicolás Maduro and recognising that of Juan Guaidó.”

    Guaidó has already written to Theresa May asking for the funds to be sent to him.

    The former chair of the foreign affairs select committee Crispin Blunt said the current Venezuelan central bank president was not legitimate, since he had not been appointed by the country’s national assembly.

    Blunt has sent letters to the foreign secretary, Jeremy Hunt, and to the chancellor, Philip Hammond, urging a decision.

    Notably, the reason the BoE initially gave for its initial refusal to release was due to its insistence that standard measures to prevent money-laundering be taken – “including clarification of the Venezuelan government’s intentions for the gold.”

    “There are concerns that Mr. Maduro may seize the gold, which is owned by the state, and sell it for personal gain,” the newspaper said.

    Separately, as we reported previously an official told Reuters that the repatriation plan has been held up for nearly two months due to difficulty in obtaining insurance for the shipment, needed to move a large gold cargo:

    “They are still trying to find insurance coverage, because the costs are high,” an official told Reuters.

    All of which appears to have suddenly been swept under the carpet now Guaidó has been installed.

    Duncan said Hunt would be discussing the next steps in the European Union’s efforts to support Guaidó in Bucharest on Thursday.

    However, it’s not a done deal yet as  shadow foreign secretary, Emily Thornberry, cautioned against a rush to oust Maduro:

    “Judging by its record in recent years, the Maduro government fits none of those descriptions, but I would also believe that it is a mistake in situations like this simply to think that changing the leader will automatically solve every problem, let alone the kind of US-led intervention being threatened by Donald Trump and [the US national security adviser] John Bolton.”

    Nevertheless, with much of the Western world now backing Guaidó in his coup, it seems the gold bullion will be winging its way to The Assembly’s coffers very soon.

  • Chinese Tech Stocks Plunge After Huawei Headlines, Nasdaq Slides

    Following the US prosecutors decision to charge Huawei with financial fraud, Chinese tech stocks are tumbling on concerns the trade war will hit corporate profits.

    Bloomberg notes that shares of Huawei suppliers are also impacted after the U.S. accused Huawei of stealing trade secrets and defrauding banks.

    • In Taipei, TSMC -3.1%, Largan -1.5%, MediaTek -1.4%

    • In Hong Kong, ZTE Corp. -1%; China Telecom -1.4%; China Unicom -1.3%; Sunny Optical -4.1%; Q Technology -2.3%; Chinasoft International -4.8%

    • In China, Zhejiang Crystal-Optech -3.6%; O-film Tech -6.5%; Shenzhen Everwin Precision -2.6%; Sunwoda Electronic -3%; Shenzhen Sunyes Electronic Manufacturing -1.5%; Shenzhen Sunway Communication -3.5%; Fiberhome Telecom Technologies -2%.

    US tech companies are also under further pressure overnight as Nasdaq futures slide to the day-session lows…

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