Congress Demands DOJ Turn Over Evidence Related To Obama-Hezbollah Drug Trafficking

Congress has demanded that the Department of Justice turn over all documents related to a disturbing report from POLITICO that the Obama administration quashed a massive DEA investigation into a $200 million per month drug trafficking and money laundering scheme on U.S. soil which was directly funding Hezbollah"s various terror campaigns around the world. 

"Add this to the long list of concessions the Obama administration made in pursuit of the nuclear agreement with Iran," said the source, who was not authorized to speak on the record about the matter. "The difference here is that this wasn"t just bad policy—it was potentially criminal. Congress absolutely has a responsibility to get to the bottom of this."

The letter follows a commitment made by congressional leaders to open an investigation into the explosive claims of what is being described as a "potentially criminal" enterprise described to the Free Beacon by a congressional source as an offshoot of Obama"s nuclear agreement with Iran which saw $1.7 billion dollars of euros, Swiss francs and other currencies shipped directly to Tehran on wooden pallets.

In early 2016, French police smashed a Hezbollah cell accused of trafficking cocaine for one of the world"s most ruthless drug cartels in order to fund the militant group"s operations in Syria. The Telegraph reported at the time: 

The agents, arrested in France, allegedly masterminded a massive global drug ring which raised millions of dollars to arm Hizbollah gunmen fighting for Bashar al-Assad, the Syrian president, in Syria. Two years ago, one of the outfit’s sicarios, or hitmen, was arrested in Spain on suspicion of having ordered up to 400 murders worldwide. The Hizbollah agents detained by French police include alleged leaders of the group"s European cell, including 45-year-old businessman Mohamad Noureddine. The DEA, which has classified him as a “specially-designated global terrorist”, accuses him of being a Lebanese money launderer for Hizbollah"s financial arm.

 

A DEA statement said: "These proceeds are used to purchase weapons for Hizbollah for its activities in Syria. This ongoing investigation…once again highlights the dangerous global nexus between drug trafficking and terrorism."

Despite the active and ongoing DEA investigations into Hezbollah"s global operations, the Obama administration "threw an increasingly insurmountable series of roadblocks in its way" according to Politico. 

In a Thursday letter from Reps. Jim Jordan (R-OH) and Ron DeSantis (R-FL) and obtained by the Washington Free Beacon, Congress demanded all communications and documents related to the DEA"s "Project Cassandra" campaign which targeted "a global Hizbollah network responsible for the movement of large quantities of cocaine in the United States and Europe," along with information on operations "Titan" and "Perseus," as well as the Lebanese Canadian Bank, The Iran-Hezbollah Super Facilitator Initiative, and several named individuals. 

Also sought are "all documents and communications referring or relating to the potential designation of Hezbollah as a Transnational Criminal Organization," along with "all documents referring or relating to efforts to prosecute targets related to Hezbolah" via the RICO act. 

"We have a responsibility to evaluate whether these allegations are true, and if so, did the administration undermine U.S. law enforcement and compromise U.S. national security," the lawmakers wrote to Attorney General Jeff Sessions Sessions. 

As the Free Beacon reported yesterday:

U.S. drug enforcement agents who spoke to Politico about the matter accused the Obama administration of intentionally derailing an investigation into Hezbollah"s drug trafficking and money laundering efforts that began in 2008 under the Bush administration.

 

The investigation centered on Hezbollah and Iranian-backed militants who allegedly participated in the illicit drug network, which was subject to U.S. wiretaps and undercover operations.

 

Hezbollah is believed to have been laundering at least $200 million a month just in the United States, according to the report.

 

When U.S. authorities were ready to make the case against Hezbollah"s most senior leadership, Obama administration officials allegedly "threw an increasingly insurmountable series of roadblocks in its way," according inside sources who spoke to Politico about the situation

 

The Obama-led effort to block the investigation was "a policy decision, it was a systematic decision," one source said. "They serially ripped apart this entire effort that was very well supported and resourced, and it was done from the top down."

As we reported yesterday, Representative Peter Roskam (R-IL), a chief national security voice in the House who fought against the nuclear accord, mimicked the views of DeSantis saying that Congress must investigate the Obama administration"s actions and work to increase pressure on Hezbollah.

"The report alleging the Obama Administration turned a blind eye and allowed Hezbollah to pump drugs into the United States to fund its terror campaigns in the Middle East is not surprising," Roskam said. "Hampering the DEA"s investigation of Hezbollah would be emblematic of the previous administration"s fixation to strike a nuclear accord with Iran at any costs."

 

"This blind eye imperiled our efforts to combat Iran and its proxies" malign behavior and left us with a cash-flush Iran on the warpath across the Middle East with a nuclear program legitimized by the JCPOA," Roskam said, using the acronym for the nuclear deal"s official name, the Joint Comprehensive Plan of Action. "Congress needs to investigate this report and do what the Obama Administration refused to do, severely increase pressure on Hezbollah and hold the terrorist group, and its benefactor Iran, accountable for their crimes."

Congress is especially interested to learn whether key Obama Administration officials, such as National Security Council staffer Ben Rhodes, were involved in quashing the DEA investigation in an effort to preserve diplomatic relations with Iran surrounding the nuclear deal. U.S. DEA agents who spoke to POLITICO accused the Obama administration into derailing an investigation launched during the Bush administration into drug trafficking and money laundering by Hezbollah. The derailed DEA investigation centered on Hezbollah and Iranian-backed militants, which used wiretaps and undercover operations to gather evidence.

House, Senate Republicans Reach Tax Deal: Here Are The Initial Details

One day after we reported that "Congressional Republicans reached a tentative tax agreement", the news of which sparked another risk surge into the close of trading, moments ago we got the second tax deal in 24 hours - if only for algo consumption - when the AP reported that House and Senate GOP leaders have reached a "tentative deal" on tax overhaul "in principle."

The AP quoted a "person familiar with the conversations who asked not to be named because the discussions are private" and who is certainly long stocks, as the replica headline was enough to send the S&P to new all time highs. 

The agreement "in principle" paves the way for final votes next week to slash taxes for businesses and give most people tax cuts starting next year. Top GOP aides say the deal was reached on Wednesday. They spoke on condition of anonymity because they were not authorized to speak publicly about the deal. Details still need to be drafted and assessed by congressional scorekeepers but the final House-Senate compromise is on track to be unveiled this week. 

The details, virtually identical to what we reported yesterday: the top individual tax rate would be lowered to 37% as and set the corporate tax rate at 21%, slightly higher than the 20% initially favored by President Trump. The mortgage interest deduction would be capped at $750,000, a mid-point compromise between the Senate and House bills.

The deduction for pass-through companies will be set at 20 percent, somewhat lower than the 23 percent included in the Senate-passed bill. That will be offset by lowering the top individual income rate to 37%. It is now 39.6%.

* * *

Still, lawmakers will need to get a cost analysis of their agreement, so it’s not yet definite, "the person" said, who clearly gets around and was this time quoted by Bloomberg.

And since lawmakers still need to get a cost analysis of their agreement, not only is today"s "tentative deal" not yet definite, but it will almost surely be unwound when someone actually brings a calculator into the room.

Curiously, after jumping higher, stocks have since faded the kneejerk reaction higher, perhaps realizing that the more fiscal stimulus that is injected, the more tightening the Fed will have to unleash in the coming months as inflation become red hot.

Treasury Forecasts Tax Reform Will Lead To Longest Period Without Recession In History

One week ago, in its latest assessment of the current state of tax reform in the aftermath of the Senate"s passage of the tax bill, Goldman analysts calculated that while growth impact from tax reform had increased fractionally to around 0.3% in 2018 and 2019 "reflecting the slightly larger amount of tax cuts in the Senate plan following revisions, and our expectations regarding the eventual compromise", it expected a very modest - if any - boost to US economic growth from tax reform.

Today, in a report prepared by the US Treasury - which as reminder is run by former Goldmanite Steven Mnuchin - and which was meant to bolster the case for the economic growth to be unleashed by the Trump tax cuts, and distract from the spike in deficit funding, the Treasury’s Office of Tax Policy (OTP) calculated that - somehow - the Senate"s version of tax cuts will result in 2.9% real GDP growth rate over 10 years.

This 2.9% GDP growth scenario compares to a baseline of previous Treasury projections of 2.2% GDP growth. Treasury "expects approximately half of this 0.7% increase in growth to come from changes to corporate taxation, while the other half is expected to come from changes to pass-through taxation and individual tax reform, as well as from a combination of regulatory reform, infrastructure development, and welfare reform as proposed in the Administration’s Fiscal Year 2018 budget."

This Treasury also claims that this 0.7% increase in growth results in an increase in tax revenues during the 10- year period of approximately $1.8 trillion.

And this is where the magic of fairy-tale forecasts comes in because adding this $1.8 trillion of incremental revenue to the static current law score of -$1.5 trillion results in total receipts over the 10-year window increasing by $300 billion.  In other words, the Trump tax cuts will not only not add to the deficit but will reduce debt by $300 billion, according to the Treasury.

Conveniently, the Treasury caveats that "these increased receipts are primarily collected in the last five years, as full expensing creates growth in early years but results in a deferral of collection of taxes."

It is unclear what is more ridiculous: that the propose gift to corporations will not only pay for itself but lead to a perpetual engine of trickle-down economic growth, one which has been refuted in every single instance in history, or that the Treasury expects the US economy to continue for another decade without a recession, which in 2027 result in an 18 year period of continuous growth since the last official recession ended in 2009, the longest period without a recession in history.

Of course, when the next recession hits no later than 2019 when the yield curve will be steeply negative and crushing the financial sector, government tax revenues will plunge leading to a blowout in government borrowing, forcing the Fed to launch QE4 as its monetization of the surging deficit will be critical in a world in which every other central bank will be dealing with its own issues at home.

As parting humor, the OTP notes the following:

We acknowledge that some economists predict different growth rates. OTP projects that at approximately 0.35% of incremental annual GDP growth, Treasury tax receipts would generate approximately $1 trillion of incremental revenue. Neither JCT nor Treasury has released a score showing increased tax receipts from the House plan, though we would not expect the results to be materially different.

We will be happy to revert to this post some time in 2027 when total US government debt is between $35 and $45 trillion, and when as the CBO correctly predicted, total US debt/GDP will be in its exponential phase.

The Treasury"s 1 page "analysis" is below (link):

SEC Associate Director And Wife Of Fired Anti-Trump FBI Agent Appears To Scrub Facebook Page Of Obama-Clinton Likes

Content originally published at iBankCoin.com

The cheated-on wife of FBI agent Peter Strzok, who was booted off Robert Mueller"s Special Counsel for sending his mistress anti-Trump text messages, appears to have scrubbed her Facebook page of pro-Hillary and pro-Obama "likes" after her husband"s embarassing dismissal and relegation to the HR department.

Reddit userBREXITGOD notes that Strzok"s wife, Melissa Hodgman, was promoted to Associate Director in the SEC"s enforcement division by the Obama administration on October 14, 2016 - 14 days before the second Hillary Clinton email investigation. Of note, the FBI knew about the emails for "weeks" before launching the second investigation which Peter Strzok oversaw.

Daily Caller reporter Chuck Ross pointed out Strzok"s wife"s apparent support for liberal causes on Sunday:

Strzok"s wife, a gov"t agency lawyer, appears to have strong pro-Clinton bias. We found that she"s member of a "We Voted for Hillary" and "Democrats for a Blue America" Facebook groups. https://t.co/QxKSXfZTbj

— Chuck Ross (@ChuckRossDC) December 4, 2017

A Facebook account that appears to be operated by Melissa Hodgman, a top lawyer at the Securities and Exchange Commission who married Strzok in 1994, shows membership in several pro-Clinton and pro-Obama Facebook groups.

 

“Democrats for a Blue America” and “Thank You Obama” are two of the groups Hodgman supports. She is also a follower of a page called “We Voted for Hillary.”

 

Hodgman did not respond to emails from The Daily Caller seeking comment about her involvement with the groups.

And yesterday, Reddit user BREXITGOD discovered that Hodgman has scrubbed her Facebook "likes" of any and all references to Obama, Hillary Clinton, Chelsea Clinton, Huffington Post and "Democrats for a Blue America."

Before: 

After: 

When reached for comment as to how he determined that the Facebook account in question belongs to Hodgman, user BREXITGOD provided publicly available evidence to make the connection.

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The Delays Begin: Release Of Republican Tax Bill Postponed Until Thursday

In our comprehensive review of the GOP tax bill which was scheduled to be unveiled tomorrow, we noted the following key caveat  "There are a lot of unknowns in this process, the biggest of which - of course - is whether the bill will be delayed from its scheduled Wednesday appearance." In retrospect, and in light of the conflicting reports about what may be contained in the final draft of the bill, this has proved prophetic because moments ago, Axios reported that week"s 2nd biggest events - after Trump"s announcement of Jay Powell as the next Fed chair - the release of the Republican tax bill is being postponed by at least one day, from Wednesday to Thursday.

The delay of the scheduled release, by the House Ways and Means Committee, reveals the difficulties the team has had in resolving how to raise enough money to pay for the massive corporate tax cuts. Political hot button issues — like the treatment of 401k savings — are still in flux. The delay shouldn"t affect the timing for the mark-up, which is expected to happen Monday.

Separately, the Hill adds that the GOP now says the bill will be released on Thursday as lawmakers scramble to reach a consensus on how to restructure the nation’s tax laws.

Fights over possible changes to the tax status of 401(k) retirement plans and the state and local taxes deduction are at the center of the delay. Lobbyists chattered throughout the day over whether Wednesday’s big unveiling of the GOP tax package would have to be delayed as it became clear that lawmakers were differing over various reductions.

 

Hours before the decision was made to punt the release for a day, Ways and Means Committee Chairman Kevin Brady (R-Texas) told reporters that he intended to release text of a bill Wednesday — but that it would not be a chairman’s mark. This would allow Brady to make changes to the text through the weekend ahead of a planned markup on Monday in the Ways and Means Committee.

 

President Trump had sought to quash any changes to 401(k) plans last week, but it has become clear that Republicans have not stopped talking about shifting the tax status of the plans as they seek to ensure their bill does not add to the deficit after its first 10 years. Republicans have discussed lowering the amount people can put into their retirement plans before taxes, which could increase the amount of revenue initially hit by taxes. 

 

Brady appears to be moving toward a compromise that would allow a deduction for local property taxes — a concession that could win at least some support from the blue-state Republicans. “I think we"re moving in the right direction,” Rep. Leonard Lance (R-N.J.) said on CNN Tuesday.

 

The bill"s unveiling would launch the GOP"s blitzkrieg effort to try to pass legislation by Thanksgiving and trigger a lobbying bonanza from both supporters and opponents. Any delay in the bill’s introduction is not helpful giving the time pressures, though the delay of one day would not affect the planned Monday markup.

Meanwhile, earlier on Tuesday Bloomberg reported that Republican tax writers were planning to keep the top individual income tax rate unchanged at 39.6%. 

The top rate may apply to taxpayers with adjusted gross incomes of about $1 million and higher, said the people who asked not to be named because the discussions are private. Currently, the 39.6 percent rate kicks in at $418,400 of taxable income for single filers and $470,700 for married couples filing jointly.

 

The White House and GOP leaders’ tax framework released last month called for reducing the current seven income brackets to three -- 12 percent, 25 percent and 35 percent, with the flexibility for the tax-writing committees to add a possible fourth bracket for top earners.

The delay itself is not surprising as the final bill is expected to somehow reconcile numerous other, often conflicting items among which:

• Are middle-class cuts from the budget framework (like doubling the standard deduction and expanded child tax credits) included?

• Is the SALT deduction included (or capped in some way)?


• What level is the corporate tax rate (over/under Trump’s 20% target)


• Is there a fourth tax bracket (rumblings suggest incomes above 1mm USD would be affected)


• Is the tax cut retroactive to Jan. 1, 2017?


• Is there a repatriation deal for money kept overseas?


• Does it add to the deficit?  If so, how much?


• Will extraneous issues be slipped into the draft to entice specific voters?
  
  • Minimum wage hike
  
  
  • Border wall funding
  
  
  • Debt ceiling compromise
  
  
  • Planned parenthood funding
  
  

And much more. In light of this, the biggest surprise would be if the GOP actually manages to have a just one day delay.

This means that for markets Thursday is now shaping up as an especially painful day, with announcements due on not only the next Fed chair, but also the layout of the tax bill. The good news is that no matter what the "news" actually is, the market will hit new all time highs.

Senate Passes 2018 Budget Paving Way For $1.5 Trillion In Tax Cuts, Sending Yields, Dollar Sharply Higher

Senate republicans took a major, if relatively easy, step toward passing Trump"s tax plan on Thursday night with the critical passage of a budget blueprint that would protect a $1.5 trillion tax cut from a Democratic filibuster. Senators narrowly voted 51-49 to pass the fiscal year 2018 budget after a several hour-long marathon on the Senate floor. The budget resolution could also pave the way for opening up the Arctic National Wildlife Refuge in Alaska to oil exploration by ensuring that drilling legislation can pass with only Republican votes according to the NYT.

With a 52-seat majority, Mitch McConnell had a narrow path to getting the 50 votes needed to clear the budget through the upper chamber. But GOP leadership caught a break this week when Sen. John McCain, a holdout over defense spending, announced he would vote yes, and Sen. Thad Cochran, recovering from health issues, returned early to Washington.

The budget’s passage could keep Republicans on track to pass a tax package late this year or early in 2018. That said, there are still plenty of possible complications, not least of all bickering within the GOP over the final shape of the tax package - where the fate of state and local tax exemptions has still to be decided - as the following Goldman flowchart shows: the steps that were successfully passed tonight are shown in green.

The House could pick up the Senate-passed budget as early as next week and give final approval to parliamentary language protecting the Republicans’ coveted tax effort. If House Republicans instead insist on negotiating a compromise that melds the Senate and House budget plans, tax legislation could be delayed.

“Passing this budget is critical to getting tax reform done, so we can strengthen our economy after years of stagnation under the previous administration,” said Senate Majority Leader Mitch McConnell (R-Ky.).

The Senate gave its approval to the budget blueprint on Thursday night after considering a flurry of amendments, a tedious process that gives the minority party an opportunity to force the majority to endure politically difficult votes. One Democratic amendment that was rejected sought to stop tax cuts from going to the top 1 percent; another would have restored cuts to Medicare.

The Senate approved the budget after the previously discussed so-called vote-a-rama, a legislative whirlwind in which amendments are considered one after another

Giving tonight events an aura of fatalistic determinism, Senator Lindsey Graham, and a member of the Budget Committee, said "this is the last, best chance we will have to cut taxes,” and warned that the consequences would be ruinous if the party failed. “That will be the end of us as a party,” he said, “because if you’re a Republican and you don’t want to simplify the tax code and cut taxes, what good are you to anybody?”

Where things get laughable is when one considers the context of what just happened: In Congress, the annual budget resolution provides an outline of federal spending and revenues. The Senate’s blueprint, for the 2018 fiscal year that began Oct. 1, claims to achieve a balanced budget within a decade, assuming greater economic growth and using an accounting method that excludes Social Security. In order to erase projected deficits, it calls for trillions of dollars in spending cuts over the coming decade.But the cuts exist only on paper, without legislation to achieve them.

And as the GOP predicts that by 2028 US government spending will equal revenues, here is what will really happen:

 

Meanwhile, as Republicans played with excel"s "goalseek" function, Democrats sounded the alarm, warning that the aspirational cuts in the budget plan called for slicing more than $1 trillion from Medicaid and about $470 billion from Medicare over a decade. Unfortunately for Democrats, they have exactly zero say in the matter: Though Democrats have pleaded to have more say in the tax overhaul, parliamentary language in the budget resolution would allow Republicans to pass a tax bill without any cooperation from the minority party.

“Passing this budget is not a requirement for passing tax reform,” said Senator Gary Peters, Democrat of Michigan. “Passing this budget is only a requirement to pass a tax bill with as few votes as possible, without input or buy-in from members of the minority.”

For Republicans, the budget debate provided a moment to showcase their main goal in the coming months, which according to the NYT is approving an overhaul of the tax code for the first time in decades, which they hope will lead to greater economic growth. But before they can move ahead with a tax bill, the House and Senate need to agree on the same budget resolution. The House approved its budget resolution, which had long been stalled, on Oct. 5. The House budget also lays the groundwork for a tax bill, but, unlike the Senate’s approach, it calls for the legislation to not add to the deficit.

The House budget resolution also seeks more concrete action when it comes to cutting spending, instructing committees to come up with legislation that would produce at least about $200 billion in savings.

However, according to The Hill, a House GOP source says the amendment seems sufficient to avoid a conference committee between the two chambers, and allow the House to simply pass the Senate resolution.

Ultimately, however, the only reason why the vote passed so easily is because as the Hill explained, it doesn"t matter, and was merely viewed as a mere vehicle for passing tax reform

"This is the biggest hoax cast upon the American people ever that this budget process even exists. The only thing about this that matters is in preparation for tax reform," said Sen. Bob Corker (R-Tenn.), who voted for the budget.  Corker noted bluntly that he believes the budget doesn"t have a real-world impact and if he was chairman of the Budget Committee he would disband it. When a staffer told him he was about to miss an amendment vote, he shot back: "yeah, on a vote that doesn"t matter."

McCain, explaining why he would support the budget, added: “At the end of the day, we all know that the Senate budget resolution will not impact final appropriations.”

Then again, all of these nuances were lost on the shotgun headline scanning algos, which read that Trump"s tax plan is one step closer to passage and sent both the USDJPY...

... and 10Y yields surging...

 

With gold lower...

 

With Dow Futs up over 100 points...

... and the Fed cursing their fate, because as Dudley explained yesterday, the last thing the feed needs right now as it is desperate to avoid tightening fast, is a burst of wage inflation, something which Trump"s tax proposal, if it passes, will promptly lead to, crushing the Fed"s carefully laid plan to take years and years in unwinding it balance sheet and rising rates.

House Passes Budget, Jumps First (Smallest) Hurdle Towards Tax Reform

The House passed its 2018 budget resolution Thursday (with 18 Reps voting against) crossing the first threshold toward its goal of sending tax reform legislation to President Trump.

As WaPo reports, the House budget resolution includes major spending cuts demanded by the party"s conservative wing, but the party"s focus is now on passing a tax bill that could add as much as $1.5 trillion to the budget deficit. Special procedures set out in the legislation would ultimately allow Republicans to pass the bill over a potential Democratic filibuster in the Senate.

"Our budget specifically paves the way for pro-growth tax reform that will reduce taxes for middle class Americans and free up American businesses to grow and hire," House Budget Committee Chairman Diane Black (R-Tenn.) said during floor debate.

In a 219-206 vote, The Hill reports lawmakers approved a budget resolution for 2018 that sets up a process for shielding the GOP tax bill from a filibuster in the Senate.

A total of 18 Republicans voted against the resolution, along with all the Democrats, but GOP lawmakers hailed the vote as meaningful because of the tax measure.

“We haven’t reformed this tax system since 1986. We need to pass this budget so we can help bring more jobs, fairer taxes, and bigger paychecks for people across this country,” Speaker Paul Ryan (R-Wis.) said during House floor debate.

Ironically, Democrats lambasted it for the same reason.

“This budget isn’t about conservative policy or reducing the size of our debt and deficits. It’s not even about American families. This budget is about one thing – using budget reconciliation to ram through giant tax giveaways to the wealthy and big corporations - and to do it without bipartisan support,” said Rep. John Yarmuth (D-Ky.), the ranking member of the House Budget Committee.

The Senate is proceeding on a separate track toward passing its own budget, which will have to be reconciled with the House version in the coming weeks.

Yet, as The Hill notes, there are already signs of trouble, with some Republicans questioning whether the tax proposal would add too much to the deficit, and others balking at plans to eliminate a deduction for state and local taxes. The tax plan is now estimated to add $1.5 trillion to the deficit over a decade, but that figure would grow if the state and local tax deduction is not eliminated.

Stocks Sink After Trump Tax Plan Leak - Here's What Wall Street Thinks

US equity markets ran up overnight but appeared to hit a "sell the news" moment as President Trump"s tax plan was leaked.

For now, it seems like the takeaway is that Trump wants Corporate/Small Business cuts at all costs and is willing to stick it to rich people with "at least as progressive" actions, if that"s what it takes to get the cuts. As Wall Street analysts generally agree for now, the devil is very much in the details... and those are yet to come.

Via Bloomberg,

COWEN (Chris Krueger)

• Offers initial takeaways: "The low bar was met" but the devil’s in the details, with no explicitly detailed offsets and no revenue/deficit number


• Creates way more questions than answers although progress has been made as 9 pages tops the 5-paragraph precis released earlier this year


• No revenue number makes the rest "almost an academic exercise"; highlights there was nothing on Obamacare taxes or capital gains, no Roth-ification, bank tax or border adjustment


• Still believes nothing will pass on taxes this year or next

GOLDMAN (Jan Hatzius)

• Prior to release, had written that proposal seemed likely to reduce revenues by ~$4t over 10 years; by contrast, debate in Congress has ranged from revenue-neutral tax reform to recent proposal allowing for $1.5t tax cut over 10 years


• Sees proposal as having to be scaled substantially to fit within fiscal constraints Congress is likely to impose


• Even so, tax reform is "finally starting to move," recent developments suggest rising probability tax legislation will be enacted by early 2018

KBW (Brian Gardner)

• Reminds investors outline was expected to be more of a wish list than a final document; tax rates in plan are subject to change, may rise once Congress actually writes legislation; sees corporate rate as likely to be higher than 20%


• Had expected most of details of other tax policy issues (deductions, exemptions, etc.) would be left out, since policymakers didn’t want to give interest groups targets to shoot at this early in the process

BMO (Aaron Kohli, Ian Lyngen)

• Prior to release, had "plenty of open questions," including the Senate reaction, whether there’s enough support within GOP rank- and-file to push reforms through in the House, and how cuts will be accounted for in offsetting revenue


• Expects debate on eliminating state/local tax deductions; also worries proposal is simply a "more exacting" version of Trump’s tax reform wish list; "it’s always folly to presume that precision implies accuracy and we fear that’s what the markets are currently trading"


• BMO on board with notion that a sizable cut will boost inflation over the next few years; not as certain anything more than minor cut will pass

HEIGHT SECURITIES (Stefanie Miller)

• Suggests investors "take a step back and evaluate" why Big Six are releasing tax framework; the blueprint’s purpose isn’t to set final policy details, but rather to advance the process and give Freedom Caucus Members cover


• Also provides tax writers opportunity to offer opening salvo ahead of more serious negotiations down the road


• No matter what’s in the blueprint, still puts 75% odds on Congress passing measure that cuts corporate rate to at least 25%

Pennsylvania Will Run Out Of Cash Tonight, Leaving $860MM Of Bills Unpaid

As equity markets spike to all new highs with each passing day, the number of fiscal crises springing up within local and state governments around the country are reaching somewhat alarming levels, even if they"re being completely ignored by investors.  As Reuters notes this morning, the state of Pennsylvania may become the latest example government failure when it runs out of cash later tonight leaving some $860 million worth of bills unpaid.

Pennsylvania could run out of cash on Friday, leaving $860 million of bill payments up in the air as lawmakers continue to argue over a revenue package that is more than two months overdue.

The state legislature passed a $32.5 billion spending plan on June 30, the end of the fiscal year and the deadline for the current year’s budget.

But it failed to agree on a revenue package to pay for those expenses, and the state has been borrowing money from its own short-term investment pool.

Treasurer Joe Torsella has said he will not issue more such loans and that the state’s general fund will likely run down to zero on Friday.

While Pennsylvania will be able to make some payments - including nearly $102 million of debt service costs due on Friday - it will not be able to pay all the bills that are due, said Treasury spokesman Mike Connolly.

An estimated $860 million of payments for various items, possibly including schools and Medicaid, could be delayed until the legislature fully funds the budget.

Not surprisingly, Pennsylvania"s funding crisis has only been exacerbated by a political dispute over whether the state"s budget gap should be filled with extra taxes and/or expense cuts.

On Wednesday night the state House of Representatives narrowly approved a revenue package, but the Senate appeared likely to reject it unless a compromise can be reached over the weekend.

“We plan to take a few days to review the House plan. At this point, we will return Monday,” said Jennifer Kocher, a spokeswoman for Senate Republicans.

The Senate had passed its own plan in July, proposing to close a $2.3 billion budget gap with borrowing and two new taxes: a first-ever severance tax on natural gas and a gross receipts tax on consumer utility bills.

But tax-averse Republicans in the House balked and did not pass their own bill until Wednesday night. It proposes no new taxes but would raise about $1 billion by selling a portion of the funding stream from the 1998 tobacco settlement, in which tobacco companies agreed to pay U.S. states for tobacco-related healthcare costs.

All of which should serve to comfort Pennsylvania public employees that their jobs, and 56% funding pensions, are "money good."

T-Bill Tantrum: Yields Spike As Debt-Ceiling Anxiety Begins To Show

US default risk has flatllined for weeks, market risk has leaked to record lows, and Treasury Bills have "behaved"... until now. The last two days have seen a sudden aggressive spike in the yields of T-Bills around mid-October, inverting the yirld curve as debt-ceiling anxiety starts to build quietly away from NFLX and AMZN shares.

And the yield curve has inverted as analysts start to consider the chances of a two-week government shutdown as a base-case...

For now there is no perturbation in the VIX curve for the same period.

This move should not be a total surprise to readers as the CBO warned recently that Treasury will run out of cash in mid-October.

With Trump tax reform far on the backburner, the CBO reminded that in just 3 months a more material threat is facing the US: according to the latest CBO calculations, the Treasury will "most likely" run out of cash in early to mid-October, unless the most polarized Congress in history raises the debt ceiling.

This is what the CBO just said in its latest report on the "Federal Debt and the Statutory Limit", released moments ago.

If the debt limit is not increased above the amount that was established on March 16, 2017, the Treasury will not be authorized to issue additional debt that increases the amount outstanding. (It will be able to issue additional debt only in the amount of maturing debt or the amounts cleared by taking extraordinary measures.) That restriction would ultimately lead to delays of payments for government programs and activities, a default on the government’s debt obligations, or both. CBO estimates that without an increase in the debt limit, the Treasury, by using all available extraordinary measures, would most likely be able to continue borrowing and have sufficient cash to make its usual payments  until early to mid-October of this year.

In recent weeks, Treasury Secretary Mnuchin has urged Congress to lift the debt limit before its August recess (with others calling to abolish it altogether) although he also conceded that the nation can likely pay its bills if action waited until September, which is all lawmakers needed to know they don"t have to rush until the very last minute.

He has also warned that the closer the U.S. gets to breaching the debt ceiling in mid-October, the more likely financial markets are to react unfavorably, although that warning appears to have been negated by his first one. On Thursday following the release of the CBO report, he again urged Congress to take action.

“For the benefit of everybody, the sooner that they do this the better,” he said at a White House briefing, although he once again diluted his case by adding that "we have contingency plans" if Congress doesn’t raise debt ceiling by a certain date, so the market “shouldn’t be concerned.” Which is all the market needed to know to keep rising until some time in early October, when it freaks out again.

Furthermore, as Cowen"s Chris Krueger wrote today, a government shutdown is now more likely than tax relief.

Cowen doesn’t agree with conventional wisdom that tax changes are now easier because GOP self-preservation will kick in, and no longer has tax cuts next year in its base case.

Two-week October shutdown now part of base case; recalls Donald Trump’s animosity about media reporting on "bad" April govt funding deal and Democratic cheering; expects much tougher White House negotiating perspective on core issues, including Mexico border wall, Planned Parenthood, EPA and defense spending.

Health care may reappear post-Labor Day, with expiration of 5-year funding authorization of SCHIP program for children, pregnant women on Sept. 30; may become vehicle for some type of ObamaCare repair operation.

Of course, don"t tell the equity markets, we would not want them getting all worried about the world"s reserve currency"s status...

Obama Ordered Cyberweapons Implanted Into Russia's Infrastructure

Authored by Jason Ditz via AntiWar.com,

A new report from the Washington Post today quoted a series of Obama Administration officials reiterating their official narrative on Russia’s accused hacking of the 2016 election. While most of the article is simply rehashes and calls for sanctions, they also revealed a secret order by President Obama in the course of “retaliation” for the alleged hacking.

This previously secret order involved having US intelligence design and implant a series of cyberweapons into Russia’s infrastructure systems, with officials saying they are meant to be activated remotely to hit the most important networks in Russia and are designed to “cause them pain and discomfort.”

The implants, developed by the NSA, are designed to hit Russian networks deemed “important to the adversary and that would cause them pain and discomfort if they were disrupted,” a former U.S. official told the Post.

They could be activated in the event that Russia attacked a U.S. power grid or interfered in a future U.S. presidential race.

The US has, of course, repeatedly threatened “retaliatory” cyberattacks against Russia, and promised to knock out broad parts of their economy in doing so. These appear to be the first specific plans to have actually infiltrate Russian networks and plant such weapons to do so.

Despite the long-standing nature of the threats, by the end of Obama’s last term in office this was all still in the “planning” phases. It’s not totally clear where this effort has gone from there, but officials say that the intelligence community, once given Obama’s permission, did not need further approval from Trump to continue on with it, and he’d have actually had to issue a countermanding order, something they say he hasn’t.

"U.S. intelligence agencies do not need further approval from (President) Trump, and officials said that he would have to issue a countermanding order to stop it," the Post reported.

"The officials said that they have seen no indication that Trump has done so."

The details are actually pretty scant on how far along the effort is, but the goal is said to be for the US to have the ability to retaliate at a moment’s notice the next time they have a cyberattack they intend to blame on Russia.

Unspoken in this lengthy report, which quotes unnamed former Obama Administration officials substantially, advocating the effort, is that in having reported that such a program exists, they’ve tipped off Russia about the threat.

This is, however, reflective of the priority of the former administration, which is to continuing hyping allegations that Russia got President Trump elected, a priority that’s high enough to sacrifice what was supposed to be a highly secretive cyberattack operation.

Top Republican Warns: "Government Shut Down Is A Real Possibility, And Wall Street Is Unprepared"

In all the spirited rhetoric over the Republicans" failure to pass Obamacare repeal and confusion over what lies ahead, many pundits and market watchers seem to have forgotten that a far more imminent threat, one due exactly one month from today, is that the US government may shut down. As Axios pointed noted, citing a top Republican, after the GOP failure on healthcare, a government shutdown which looms when the continuing resolution runs out April 28 and coincides with Day 100 of the Trump presidency, is "more likely than not... Wall Street is not expecting a shutdown and the markets are unprepared."

Axios further notes that the message CEOs took from Friday"s fiasco, according to an executive at a money-center bank, was "Holy crap! We may be facing the same crap on a shutdown threat, and on the debt ceiling. Holy crap! We may not get tax reform, or a repatriation bill, or infrastructure spend, or substantial changes to regulations."

However, while we agree with the quoted republican that by and large markets are unprepared, they are starting to realize that a government shut down is becoming an all too real possibility, as the following just released note from BMO"s strategists Ian Lyngen and Aaron Kohli reveals.

The BMO duo note that they have been "fielding questions about ‘what’s next’ for the administration in terms of legislative proposals – tax reforms? An infrastructure program to ‘Repave America’?"

Here is their response:

While Trump would surely like the tax issue to be front and center, we’re starting to hear growing concerns that a government shutdown at the end of April may be a real possibility given the rise of the Freedom Caucus. Moreover, with the Democrats emboldened by their success in averting the repeal of Obamacare (at least for now), there is clearly less incentive to ‘play nice’ with the rest of Congress. In short, rather than clearing the way for tax reforms to take center stage, the healthcare bill mistakes might have more damaging implications for the effectiveness of the new administration than the Trump camp wants to admit.

In considering the market impact from the healthcare bill, perhaps the question shouldn’t be ‘what happens when tax reforms and infrastructure gets passed?’ and rather ‘what happens when the government enters a partial-shutdown on April 28th?’ To the latter question, that would certainly be a bullish event for the Treasury market and risk-off more broadly. The most straightforward implications are that the gridlock and relative strength of the opposition in Washington will simply slow pro-business reforms so significantly that markets will effectively price them out. After all, if Congress cannot keep the lights on in the Capitol building, how much confidence will the market have in their ability tackle the weightier issues of tax and infrastructure spending.

We’ll be the first to admit that we came into this year expecting that the debt ceiling debate would be a complete non-issue given what (at the time) appeared to be a unified Republican government. We were clearly a bit too optimistic, or politically naïve, and what’s currently playing out triggers flashbacks of the summer of 2011 when the US was downgraded by S&P as a polarized Congress wasn’t able to raise the debt ceiling quickly enough. While one might intuitively think that the risk of a downgrade would increase the cost to the borrower (i.e. higher yields), during the period of April 18, 2011 when S&P put the US on “negative outlook” to August 5, 2011 when the downgrade occurred, 10-year yields dropped from 3.40% to 2.56%.

There were certainly a number of other more tangible drivers at play behind the rally as well; slowing economic growth, the Fed’s quantitative-easing program, falling inflation expectations, etc. – but our broader point is that the market’s reaction to another ‘head-to-head’ debt-ceiling debate will be bullish for the Treasury market. If for no other reason than what it suggests will ultimately be delivered in terms of other reforms.

To be sure, traders have demonstrated an amazing ability to reallign the bullish narrative with any change in the underlying facts, so it is quite possible that we are just one month away from the market surging back to all time highs because a shut government is spun as positive for risk assets, the same Trump"s healthcare bill failure has resulted in rising stock prices.

This Is The Only Chart Americans Should Be Worrying About Right Now

In 2015, President Obama and Republican congressional leaders agreed to suspend the federal debt ceiling until March 15, 2017. After that date – less then two weeks from now – the Treasury will surpass its cumulative $20 trillion borrowing authority.

And while the stock market (and VIX) signal utter calm, signs of stress are very clear in America"s money markets. Swap spreads are suggesting traders are getting nervous that any hiccup in efforts to remove the burden could trigger a shortage on short-term government securities.

And even more notably, investors are willing to pay more for bills maturing in four weeks instead of five.

That’s because they don’t want to be caught empty handed while the Treasury slows debt sales to push its cash balance lower as part of the 2015 pact to suspend the debt ceiling. The spread between the March 9 and March 16 bills may get a “a little more noticeable” as Treasury cuts issuance and provides a “clearer sense of how long bill supply is going to be lower than normal” going into the March 15 deadline, Jefferies economist Thomas Simons said in a phone interview.

So, with two weeks left until the debt ceiling suspension expires, Treasury"s cash balance plummeted to $109 billion this week as of Thursday... making this the most important chart in the world right now...

Once it hits zero, as FiscalTimes notes, newly ensconced Treasury Secretary Steven Mnuchin is expected to order “emergency measures” to effectively buy more time for the government to pay its creditors and cover revenue shortfalls to keep the government operating. The stakes couldn"t be higher: Failure to raise the debt ceiling would do irreversible damage to the U.S. credit rating, trigger an uproar in U.S. and global markets, drive up the future cost of borrowing, postpone Social Security payments and tax returns, and force layoffs of non-essential government workers.

Deutsche Bank points out, there was a large withdrawal of cash last week as the IRS began sending out tax refunds. Despite a change of law last year which delays the refunds for early filers, the pace of refunds are similar to previous years. Between now and March 15, the Treasury can expect roughly another $40 billion of cash drawdown from refund activities. The Treasury cut its 4-week bill auction again this week to $18 billion, which is down from $35 billion last week and $45 billion two weeks ago. It also cut the 3-month and 6-month bill auctions by $4 billion each for next week. In the near term, the driver of bill supply is still the debt ceiling. But later in the year, the Fed’s balance sheet policy will have a major influence on supply outlook. If the debt ceiling is raised by late summer, a September Fed balance sheet unwind could potentially bring a flood of supply to the market and drastically cheapen the front end.

Not everyone is ignoring the potential risks ahead, David Stockman dropped this reality bomb last week:

“I think what people are missing is this date, March 15^th 2017.  That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.  That holiday expires.  The debt ceiling will freeze in at $20 trillion.  It will then be law.  It will be a hard stop.  The Treasury will have roughly $200 billion in cash.  We are burning cash at a $75 billion a month rate.  By summer, they will be out of cash. 

Then we will be in the mother of all debt ceiling crises.  Everything will grind to a halt.  I think we will have a government shutdown.  There will not be Obama Care repeal and replace.  There will be no tax cut.  There will be no infrastructure stimulus.  There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

Stockman predicts very positive price moves for gold and silver as a result of the coming budget calamity.

Evercore ISI: "Trump Budget Not Happening"

In a note by Evercore ISI"s Terry Haines and Ernie Tedeschi, the analyst duo pours cold water on Trumps" budget proposal before it has been even formalized and confidently predicts that "Trump budget not happening" adding that the most likely outcome is that "Congress will modestly hike defense and non-defense spending."

Below is a summary of their thinking:

President Trump"s budget will not be submitted to Congress for a couple of weeks but already the speculation about it has begun with press stories about deep cuts to domestic spending used to fund increases in defense spending. Investors should understand that any president"s budget submission is inherently a political document; that Congress is not bound to follow it; and that this Congress will not follow it. We continue to see the likely result of the federal budget process as a continuation of the modest increases in both defense and nondefense discretionary spending agreed to on a bipartisan basis over the past four years. Any increase in defense spending is likely to be small and matched by similar small increases in nondefense spending.

Presidents are bound by law to submit an annual budget request. This is supposed to come in early February but new presidents always are given leeway. The Trump budget will come in a couple of weeks: the current and usual step in the process is to provide draft budget numbers to federal departments and agencies for views and pushback. When the budget is submitted, Congress holds hearings, develops its own budget numbers, and ultimately agrees on a budget by approving a budget resolution. This budget resolution guides Congress in its appropriations process and in the reconciling of changes in law to the budget (in the FY 2018 case, tax reform). Importantly, the president does not sign the budget resolution as it is not a law.

Moreover, what we know about the president"s proposal is merely a 30,000 foot target: an increase in defense funding of $54 billion this year (about 10 per cent), entirely offset by an equivalent cut to nondefense discretionary (that is, non-entitlement) funding. From a macro perspective, that means there will be no net stimulus from this defense hike. There is little to no detail about how either the defense hike or the nondefense cuts would be distributed across departments and programs because very likely those decisions have not been finalized yet. Over the next couple weeks, the details will be fleshed out internally at the White House before the budget"s release. Administration officials have pointed to foreign aid and the EPA as the targets of cuts, but neither spends enough money to shoulder the entire burden of the proposal.

And some follow up thoughts on the substance, what little there is, of the proposal:

• The president"s budget is a couple of weeks away from being finalized and submitted; during that time, department heads will have an opportunity to respond internally to the budget ideas and develop specific ideas for meeting the targets.


• The proposed $54 billion increase in defense spending in FY2018 is equivalent to a 10 per cent hike in the cap on defense spending that current applies. This would be only slightly higher on a per-year basis than the defense hikes that resulted from the last two-year budget deals in 2013 and 2015 (the Ryan - Murray-style deals) but not dramatically. Some congressional Republicans such as Sen. McCain (R-AZ) are pushing for even larger increases in defense spending.


• Since the $54 billion is a topline goal, there is no detail yet about how within the DoD the president is proposing distributing the funding (e.g., between procurement, operations & maintenance, etc.)


• The $54 billion surge in FY2018 defense spending is to "budget authority" (funding). This translates to "outlays" (money spent out) on a lag; generally, only about half of an increase in defense funding is actually spent out the first year.


• Because of this lag in actual spending, and because it is offset by countervailing cuts, this proposal would likely have negligible macroeconomic impact.


• The White House has promised not to touch entitlements such as Social Security and Medicare, so the defense hike is being paid for entirely by cuts to nondefense discretionary spending. The $54 billion is equivalent to a 10.5 per cent across-the-board reduction in nondefense discretionary spending, though it is not likely being applied evenly across the board.


• The White House has mentioned two specific targets of cuts: foreign assistance and the EPA. Note that all foreign aid spending, including military aid and including to allies like Israel, only comes to $42.4 billion. EPA"s funding in FY2017 is expected to be about $8.3 billion.

Trump To Revoke Obama's Transgender Bathroom Rule

"He, she, and ze" will be not be happy. The Trump administration is set to revoke President Obama"s controversial transgender bathroom rules.

In yet another leak, a draft of a letter to the nation"s schools obtained by The Washington Post, administration officials plan to say they are withdrawing guidance issued by the Obama administration that found that denying transgender students the right to use the bathroom of their choice violates federal prohibitions against sex discrimination.

“This interpretation has given rise to significant litigation,” states the two-page draft, which indicates that the Education and Justice departments plan to issue it jointly. The draft says administrators, parents and students have “struggled to understand and apply the statements of policy” in the Obama-era guidance.

As a result, the departments “have decided to withdraw and rescind the above-referenced guidance documents in order to further consider the legal issues involved.”

The letter makes clear that schools must protect all students and that the withdrawal of the guidance “does not diminish the protections from bullying and harassment that are available to all students. Schools must ensure that transgender students, like all students, are able to learn in a safe environment.”

A final version of the letter is slated to be issued Wednesday, according to a Republican operative with knowledge of the conversations within the Trump administration on the issue. The administration is expected to release the letter despite objections from Education Secretary Betsy DeVos, who did not want to rescind the guidance, the operative said. Officials with the Education and Justice departments did not immediately respond to requests for comment late Tuesday night.

Notably, Betsy DeVos, the new education secretary, wanted to keep Obama"s guidance intact, according to WaPo"s sources.

Full leaked letter (via Reuters)

Dear Colleague:

The purpose of this guidance is to inform you that the Department of Education and the Department of Justice are withdrawing the statements of policy and guidance reflected in:

• Letter to Emily Prince from James A, tvkCacI1L,..ria, Acting Deputy Assistant Secretary for Policy, Office for Civil Rights at the Department of Education (OCR) dated January 7, 2015; and,


• Dear Colleague Letter on Transgender Students jointly issued by the Civil Rights Division of the Department of Justice ("DOJ") and OCR dated May 13,2016.

These guidance documents take the position that the prohibitions on discrimination "on the basis of sex" in Title IX of the Education Amendments of 1972 ("Title IX"), 20 U.S.C. § 1681 et seq., and its implementing regulations, see, e.g., 34 C.F.R. § 106.33, require access to sex-segregated facilities based on gender identity rather than biological sex.

This interpretation has given rise to significant litigation regarding school restrooms and locker rooms. The U.S. Court of Appeals for the Fourth Circuit concluded that the term "sex"s in the regulations is ambiguous and deferred to what the court characterized as the "novel" interpretation advanced in the guidance. That case is currently pending before the Supreme Court. By contrast, a federal district court in Texas held that the term "sex" unambiguously refers to biological sex and that, in any event, because the guidance was "legislative and substantive," formal rulemaking should have occurred prior to the adoption of any such policy. The Texas court preliminarily enjoined enforcement of the interpretation, and that injunction currently remains in effect.

In addition, over the past two years, school administrators, parents, and students have expressed varying views on the legal issues arising in this setting. They have also struggled to understand and apply the statements of policy and guidance in the two documents identified above.

In these circumstances, OCR and DO] have decided to withdraw and rescind the above-referenced guidance documents in order to further consider the legal issues involved, The Departments thus will not rely on the views expressed within them.

Please note that the withdrawal of these guidance documents does not diminish the protections from bullying and harassment that are available to all students. Schools must ensure that transgender students, like allstudents, are able to learn in a safe environment.

This guidance does not add requirements to applicabFe law, but provides information about how OCR and DOJ will proceed in developing the appropriate approach for determining whether covered entities are complying with their legal obligations in this context. If you have questions or are interested in commenting on this guidance, please contact OCR at ocr@ ed.gov or B00-421-3481 (TDD 800-877-8339); or DOJ at education @usdoj.gov or 877-292-3804 (ITV: 800-514-0383).

Without federal guidance, the issue will be resolved on a state-by-state basis, as White House spokesperson Sean Spicer most recently confirmed...

Obama "Housing Recovery" Crushes "Blacks, Young Adults" As Homeownership Rates Crash

The Obama administration has a tendency to conflate the strong performance of Fed-induced "assets bubbles" with "strong economic growth."  Unfortunately, as is often the case these days, the "hard data" paints a slightly different picture than the "narrative" being pushed by Obama and his staff.

Per a new report from the Pew Research Center, and as our readers are undoubtedly aware, home prices have indeed recovered to pre-recession levels with a little help from Janet Yellen and crew.

That said, the Obama narrative breaks down from there as further research readily reveals that home prices have recovered despite a massive drop in overall homeownership rates. 

Moreover, the folks that seem to have been hit the hardest are the ones that were the biggest supporters of Obama"s "Hope & Change" agenda.  Per the table below, homeownership rates among "Young Adults" and "Blacks" are down 18% and 16%, respectively, since the peak in 2004.  And while that"s definitely a big "Change," its somewhat lacking on the "Hope."

But if "mainstreet" Americans didn"t drive Obama"s housing recovery then who did?  Perhaps the following Bloomberg headline can help answer that question:

Yes, the benefits of Obama"s "housing recovery" accrued to none other than his "archenemy," Wall Street, which poured $100"s of millions into single-family houses on a weekly basis and $10"s of billions over the past couple of years.

Adding insult to injury, this massive pace of investment has re-inflated the housing price bubble, making it, once again, nearly impossible for "Young Adults" and "Blacks" to afford homes.  And, unlike in 2007 when subprime lending basically erased the need for down payments, homebuyers today are forced to "have some skin in the game" before banks will blindly give them $100,000"s of dollars. 

But, with the average American having about $3,000 in "financial assets," we"re not sure that"s feasible.

But, as we always say, who needs facts when narratives are so much more fun.