Showing posts with label Testimony. Show all posts
Showing posts with label Testimony. Show all posts

Saturday, December 23, 2017

If Libs Were Smart They Would Push For Mueller Firing Himself Now

Authored by Tom Luongo,


The desperation of U.S. liberals to find some truth in the claims that Donald Trump’s campaign staff colluded with Russian state actors is approaching infinity. 



FBI Deputy Director Andrew McCabe’s testimony to the House Intelligence Committee all but confirms that the only ‘proof’ the FBI and Special Counsel Robert Mueller have of collusion is the discredited “Trump Dossier.”


This dossier was compiled by Christopher Steele and sold to the Clinton Campaign as opposition research by Fusion GPS.  McCabe stonewalled the HIC on this matter but couldn’t point to anything in the dossier that the FBI verified to be true other than publicly-known knowledge of Carter Page visiting Moscow in 2016.


And the last time I checked (as least for now) visiting Moscow is not a crime.


Neither is what Michael Flynn did a crime either, but let’s not bring facts in to dash the hope of the terminally insane.


McCabe has to stonewall on this issue otherwise he and the rest of the FBI are guilty of acting on behalf of Hillary Clinton to assist in spying on her political opponent.  Because that’s where all of this leads if people would take their ideological blinders off for five seconds and look at what we actually know as opposed to what we ‘just know to be true.’


Everyone involved in this sordid affair should be tried for espionage and treason.


Those prominent liberals running around protesting the mere thought of Donald Trump shutting down the Mueller investigation to ‘protect the sanctity of our elections’ are a bunch of simpering morons.


And I’m sick to death of the blatant and rank hypocrisy when it comes to election fraud in this country.


For this reason alone, the Mueller investigation should be shut down.


The Stupid Show


Look, anyone taking the rumor seriously that Donald Trump was close to shutting Mueller’s investigation down should have their head examined.  This was a blatant plant by the Washington  Post (and the CIA, let’s get real) to create exactly the kind of response from the Wil Wheatons of our world.


These people are simply ab-reacting noradrenaline junkies living in their amygdalas 24/7 while the world moves on without them.




If this isn’t the picture of someone in serious need of psychotherapy then …


In the same week we also get this little ditty by Newsweek. You don’t think these things aren’t coordinated to evoke this kind of response in ‘soy-boy’ Wheaton?


Painter, who worked under former president George W. Bush, appeared on MSNBC to discuss the widely criticized Fox News segment that suggested the FBI’s investigation into the Trump campaign could be considered a coup.


 


“The commander in chief is Donald Trump,” Painter said. “There is a risk of him using that power to destroy our democracy, whether you call it a coup or anything else. It’s not from the critics of Donald Trump that the danger is posed, it’s the fact that the man who is commander in chief of our military is engaged in obstruction of justice.”


 


The salient point here is why would Trump shut down Mueller?



Mueller has nothing on him. The longer this goes on the worse it looks for everyone involved and Trump comes out looking like the victim of a political witch-hunt.


Trump knows and has known from the beginning that there was nothing to investigate.


The only question has been whether Mueller could invent something through nigh-onto-illegal pressuring of people like Flynn, caught in the usual FBI web of procedural dishonesty, to turn on Trump and perjure themselves to avoid a prison sentence.


Trump v. Mueller


In fact, the more I think about the sequence of events, the more I think the meeting between Trump and Mueller the evening before Mueller was appointed as Special Counsel involved Trump telling Mueller, “Good luck finding anything, Bob, I’ll hang you by your own rope when this is all over.”


If I were in Trump’s position I would have done exactly that. I would have goaded Mueller into this, knowing full well that Uranium One was out there. This would have lit a fire under Mueller to cast a wide net, turn over every rock looking for any kind of dirt. Doing so would expose the whole rotten mess and Mueller looks like a guy running around investigating himself in the end.


Remember, Trump is the one that brought up Uranium One in the first place on the campaign trail.


In response, Hillary, as she always does, then accused Trump of that which she was actually guilty of – colluding with the Russians and using her position for personal gain.


The people who want to believe in Russia-Gate are missing this in their zeal to rid the world of Trump to validate their own failing world-view.


The longer this investigation goes on the more it will uncover the truth about what happened. In my mind, all the Mueller is doing now is compiling the actual case to exonerate himself over Uranium One and throw the rest of the FBI under the bus.


Given what we already know, I’d say Bob’s done a good job of this and it’s time for him to step aside and let this play out.









Friday, December 15, 2017

Trial Of Shkreli Lawyer Interrupted By "Potentially Career-Ending" Allegations About Prosecutor

The ongoing legal drama of former pharmaceutical CEO Martin Shkreli and his one-time lawyer (and alleged co-conspirator) just keeps getting weirder.


On Thursday, CNBC reported that the trial of Evan Greebel, a lawyer accused of helping Shkreli loot his pharmaceutical company Retrophin, has been temporarily put on hold after “potentially career-ending allegations” about a government official involved in both Shkreli’s and Greebel’s prosecution reportedly were raised by Greebel’s attorneys.


The allegations, first reported by the online legal publication Law 360, were raised Wednesday in Brooklyn, New York, federal court, where Greebel is on trial. Shkreli was convicted of three out of eight fraud counts in a separate trial over the summer.



Law 360 reported that Greebel"s trial "came to a screeching halt" Wednesday during testimony by Steven Rosenfeld, an investor in both Retrophin and one of Shkreli"s hedge funds and one of the people who was purportedly offered a fraudulent consulting agreement as a form of compensation for his losses in Shkreli’s hedge fund.


It’s unclear exactly what Rosenfeld said. Here’s how events unfolded, according to CNBC.


Law 360 reported that Greebel"s trial "came to a screeching halt" Wednesday during testimony by Steven Rosenfeld, an investor in both Retrophin and one of Shkreli"s hedge funds.


 


Rosenfeld, a non-practicing doctor called to the witness stand by Greebel"s lawyer, was reportedly being asked about what happened in 2015 when FBI agents visited his home to ask about a consulting agreement he had with Retrophin.


 


Shkreli and Greebel were accused of using bogus consulting agreements by Retrophin with investors in Shkreli"s hedge fund to repay them for their losses — but Rosenfeld claims he did actual work under the agreement.


 


According to Law 360, Rosenfeld testified he asked the FBI if he could call his attorney. A prosecutor then objected to that line of questioning.


 


That objection led to a lengthy discussion with prosecutors, defense lawyers and Judge Kiyo Matsumoto out of the earshot of jurors and observers in the courtroom.


 


Another long sidebar conference followed after Greebel"s lawyer Randy Mastro asked Rosenfeld who had attended a subsequent meeting he had with government officials, Law 360 reported.


 


Matsumoto reportedly sent jurors home for the day early. She then ordered prosecutors and defense lawyers to file sealed legal briefs "on what she described as "potentially career-ending allegations" made by the defense," according to Law 360.


 


Matsumoto said the briefs should address the question of whether statements made by federal prosecutors outside a courtroom are admissible as evidence in a case.



Assistant US Attorney David Pitluck, one of the prosecutors in Greebel"s case, said in court that the allegations raised by the defense are "very serious,” but there still haven’t been any clues as to exactly what those allegations are.
Greebel"s lawyers, in a letter to the judge filed Wednesday, wrote that statements made to Rosenfeld by government officials should be allowed into evidence "to show why Dr. Rosenfeld would have felt motivated to cooperate with the government and to provide context for what he knew in subsequent meetings."


Shkreli, who was found guilty over the summer, is awaiting sentencing at a federal jail in Brooklyn that is also home to Mexican drug lord El Chapo. His bail was revoked – while his $2 million bail was withheld – following a Facebook post offering a reward for a strand of Hillary Clinton’s hair that prosecutors successfully argued was essentially a threat. It’s unclear whether these allegations could also help Shkreli secure his freedom. He is to be sentenced in January.
 









Thursday, December 14, 2017

PodCast: Dear Betrayed Citizens, Angry Moderates, and Frustrated Voters

If you are  a libertarian, a gold person, a blockchain/ bitcoin person, a middle  class  person who feels betrayed by his government, a tea-party person how sees that his ideals have been co-opted by the GOP for votes and then cast aside, then you may want to give this a listen. If you do, I thank you in advance


This verbal post is something that had to be gotten out of my system before I prepare for a 3pm interview on Gold with Daniela Cambone on Kitco. Otherwise, the visceral feeling in my gut will not permit me to focus on the more erudite Daniela"s questions. There are enough loons with tinfoil hats out there. I do not seek to be one, or worse, one pretending to be a Libertarian hawking survivalist products to scared and frustrated Americans who have been sold out by their government. Or some carpetbagger riding a wave of crypto mania (prices, not ideas) which will end badly for many people soon. I"d like  people to wake up, not unlike the message  of fight club, but not in a nihilistic way. We don"t have  to blow up  the credit data centers to level  the playing field as they did. We just have to wake up, myself included.


Pictured: One opiate of the masses.


People should be spoken it as if they had brains, and not sold with dumbed down rhetoric and hot button nonsense. There is no angry moderate voice. An infuriated voice of reason, if you will. There should be. Some wars are just. Who am I? I am no-one of consequence who"d like to give voice to the people too busy working subsidizing others" prosperity and blindly hoping things will be ok. They won"t be in this generation.  Not when Paul Ryan claims he is a fan of  anarcho-communist bands  like Rage Against the Machine to get votes and then sells those voters out. Losing misplaced hope that someone will save you in this earthly realm is the first step in obtaining the freedom to help yourself.



Over the last few days, I"ve been lucky enough to have met some brilliant people in banking, technology, the military, and entrepreneurs who are acting to make the USA and the world a place where the pursuit of success and  happiness is a inalienable right. 


This search for knowledge was rooted in understanding better the guts of Blockchain tech and what it can do. But it ended where I started; believing again that change is coming. Try as globalist monetary incumbents  might to stop it, the zeitgeist has changed. 


The tech is merely a tool to make scalable what our founding fathers intended. I am not saying you are entitled to success. Like our fathers, I am saying  you are entitled  to pursue that success unimpeded. But we are now very impeded by the incumbency of those  who are "above us"


For me, this is about a better society and government fulfilling its duty properly to protect  its citizenry. That means no power abuse. And  that means decentralization in the monetary system, our circulatory system in business, will bring those  changes  to bear. I am no marketer, no salesman, and rarely a  self promoter for money. Money is easy to make if  that is all you want to do with your life. I have seen the middle class destroyed including my grandfather"s business as the  pursuit of money became  the first priority, replacing the providing of a valuable service in our society. I have been on bot  hsides of every situation spoken of in these issues of asymetry, unfair market structure and unethical practices. And I"m telling you capitalism as originally created  and in the democratic republic our  founding fathers  created, is dead. It is a husk of an idea., an empty shell of its former glory.


But something new is coming. in fact, it is already here. And it cannot be stopped. It can be slowed by incumbent, status quo, unelected globalist leaders; but it cannot  be stopped. It is the revolutionary event that is always a part of our evolution. And G-d willing, it will be a bloodless one this time. 


Power must be used and self-obviating. Not perpetual when nothing needs to be done. Decentralization helps make this happen.  If you have the patience to listen to this, these points will be made more clear.  


If you are  a libertarian, a gold person, a blockchain/ bitcoin person, a middle  class  person who feels betrayed by his government, a teaparty person how sees that his ideals have been co-opted by the GOP for votes adnthen cast aside, then you may want to give this a listen.


Good Luck


vbl


About the author:Vince Lanci has 27 years’ experience trading Commodity Derivatives. Retired from active trading in 2008 after netting $90MM in an Energy arbitrage strategy he devised for a NY hedge fund; Vince now manages personal investments through his Echobay entity and advises natural resource firms on market risk. Over the years, his expertise and testimony have been requested in energy, precious metals, and derivative fraud cases. Lanci is known for his passion in identifying unfairness in market structure and uneven playing fields going back to his first anonymous Zerohedge post on Silver. He remains a contributor to Kitco, Zerohedge, and Marketslant on such topics. Vince contributes to Bloomberg and Reuters finance articles as well. He continues to lead the Soren K. Group of writers on Marketslant. 









Sunday, December 10, 2017

Pentagon To Undergo First Ever Audit After Decades Of Sloppy Accounting And Missing Trillions

After decades of waste, overpayments, trillions of missing or improperly accounted for dollars, and most recently losing track of 44,000 US soldiers, the Pentagon is about to undergo its first audit in history conducted by 2,400 auditors from independent public accounting firms to conduct reviews across the Army, Navy, Air Force and more - followed by annual audits going forward. 



Secretary of Defense Jim Mattis speaks with DoD Comptroller David L. Norquist, June 15, 2017


The announcement follows a May commitment by Pentagon comptroller David Norquist, who previously served as the CFO at the Department of Homeland Security when the agency performed its audit. "Starting an audit is a matter of driving change inside a bureaucracy that may resist it," Norquist told members of the Armed Services Committee at the time when pressed over whether or not he could get the job done at the DHS. 


According to the DoD release








The audit is massive. It will examine every aspect of the department from personnel to real property to weapons to supplies to bases. Some 2,400 auditors will fan out across the department to conduct it, Pentagon officials said.


 


"It is important that the Congress and the American people have confidence in DoD"s management of every taxpayer dollar," Norquist said. -defense.gov



The Pentagon is no stranger to criticism over serious waste and purposefully sloppy accounting.  A DoD Inspector General"s report from 2016 - which appears to be unavailable on the DoD website (but fortunately WAS archived)- found that in 2015 alone a staggering $6.5 trillion in funds was unaccounted for out of the Army"s budget, with $2.8 trillion in "wrongful adjustments" occurring in just one quarter.


In 2015, the Pentagon denied trying to shelve a study detailing $125 billion in waste created by a bloated employee counts for noncombat related work such as human resources, finance, health care management and property management. The report concluded that $125 billion could be saved by making those operations more efficient. 


On September 10th, 2001, Secretary of Defense Donald Rumsfeld announced that "According to some estimates we cannot track $2.3 trillion in transactions," after a Pentagon whistleblower set off a probe. A day later, the September 11th attacks happened and the accounting scandal was quickly forgotten.


And twenty years before that, DoD analyst Franklin C. Spinney exposed what he called "accounting games," saying "Those numbers are pie in the sky. The books are cooked routinely year after year." In a 2002 testimony before the House Committee on Government Reform, Spinney laid out the DoD"s accounting quagmire of un-auditable books and budget projections which don"t match reality. 



Franklin Spinney, 2002


Finally, those of us old enough to remember the 80"s, let"s not forget the bombshell report on overpayments the Pentagon made for simple items, such as $37 screws, $7,622 coffee makers, and $640 toilet seats which Sen. William Roth Jr (R-DE) was able to whittle down to $200


The announcement of the audit comes amid a looming government shutdown battle which was given a two-week extension last week until December 22. If this occurs, military personnel would report to work as usual, but the DoD would not pay them until the shutdown ends. 


 "I cannot emphasize too much how destructive a shutdown is," Norquist said. "We"ve talked before about the importance of maintenance on weapons systems and others, but if it"s not an excepted activity, there"ll be work stoppage on many of those maintenance functions."


With both parties standing to lose more than gain from a shutdown, that is unlikely to happen. Meanwhile, with decades of lost confidence in the Pentagon"s accounting practices, we eagerly await the results of this "massive" audit to see exactly how much dirt - and where - previous administrations have swept under the rug.









Saturday, October 28, 2017

Two Key Findings that Show Us CIA Redacted Potential Smoking Gun from JFK Files

redactedThe latest release of the government"s records on the assassination of President Kennedy give clues as to what may have been withheld from the public.

"$100,000 Bought Me The Mayor": Shocking Testimony Of De Blasio Donor Revealed

You don"t have to look around too hard to realize that the "political swamp" in America stretches from sea to shining sea and from the highest offices in Washington D.C. to the lowliest of city halls on Main Streets all across the country. 


The latest evidence of such comes to us from New York City where a Mayor Bill de Blasio donor-turned-felon testified in extraordinary detail yesterday that he and his businessman pals wrote the book on city corruption — buying off the Mayor’s Office and the Police Department using brazen pay-to-play tactics.  As the New York Post details today, 34-year-old Jona Rechnitz went into staggering detail in his testimony about political favors he received from City Hall for a small $100,000 donation.








“We’re going to become significant contributors, but we want access,” Jona Rechnitz, 34, testified telling de Blasio fundraiser Ross Offinger after Hizzoner clinched the Democratic nod for mayor in 2013.


 


De Blasio soon paid Rechnitz a visit in his office, the disgraced businessman told jurors in Manhattan federal court.


 


De Blasio — who last year called his relationship with Rechnitz “not a particularly close’’ one — handed the wheeler-dealer his private cellphone number and email address, the witness said.


 


The pair then began chatting “at least” once a week about “different issues in the city” — as Rechnitz funneled about $160,000 to de Blasio’s campaign and pet political projects, said the government witness.



De Blasio


Rechnitz appeared as the star witness in the bribery trial of former city corrections union chief Norman Seabrook. He is accused of bribing Seabrook to get him to invest $20 million in union pension money in a pal’s ailing hedge fund.  But testimony quickly veered toward de Blasio, as Rechnitz was questioned about his ties to the ­administration.


Rechnitz said he had high hopes for the kinds of favors he could potentially receive.








“My mind was limitless,” he said.


 


Business pal “Jeremy [Reichberg] had told me in the days of Giuliani, people made a fortune.


 


“I was focused on making money, getting my name out there, becoming a big player in town. So I figured maybe I’ll buy an office building, and I’ll get the city as a tenant. Maybe I’ll need to get special permits to make residential developments.”


 


Rechnitz and Borough Park businessman Reichberg initially targeted the NYPD in their pay-to-play scheme, doling out gifts and cash to cops in return for favors. Then they set their sights on City Hall, Rechnitz said. “We had the police going for us — and now it was time to get into politics,’’ he testified.


 


Rechnitz started calling Offinger every time he needed a favor — including one involving a friend’s massive water bill and violations Rechnitz faced for a tenant subletting a residence on Airbnb.



Rechnitz even admitted to using "straw donors" to circumvent caps on individual political contributions, a scam which he says De Blasio"s fundraisers were privy to.








In 2014, Rechnitz donated another $102,300 toward a failed effort led by de Blasio to help Democrats wrest control of the state Senate.


 


Rechnitz said some of the dough was from straw donors, which is illegal.


 


“A couple of people in my office, I had them write checks, because I wasn’t allowed to give more than $4,950. And I reimbursed them for those donations,’’ Rechnitz said.


 


Rechnitz said he promised Offinger to hit target donations — and the fundraiser would stop by his office to check on the fundraising.
“I had a lot of pressure from him to bring that amount in,” Rechnitz said of the pledged amount.



But it wasn"t just De Blasio"s office where Rechnitz attempted to buy political favors as he admitted that his pay-to-play scams stretched north to the affluent suburbs of Westchester County and involved County Executive Rob Astorino. 








During his hourlong testimony, Rechnitz said the corruption even extended beyond the Big Apple.


 


Westchester County Executive Rob Astorino gave him and Reich­berg positions as police chaplains in exchange for their ­financial contributions — even though neither of them is a rabbi or a priest, Rechnitz said.


 


“It meant that I got my parking placard,” said Rechnitz, whose firm JSR Capital donated $15,000 to ­Astorino’s campaign in June 2013.


 


He said Astorino once approached him with a picture of a Rolex watch and asked for help in procuring it.


 


“I told him I’m happy to give it to him; he doesn’t have to buy it,” Rechnitz testified.


 


“He told me that he couldn’t take it as a gift. He had to pay something because that wouldn’t be allowed. It was a $7,000 to $10,000 watch, if I remember correctly.”


 


In the end, Astorino agreed to pay $1,000 to $2,000 — and Rechnitz covered the rest, he said.



Not surprisingly, De Blasio"s office dismissed Rechnitz" testimony saying "the administration has never and will never make government decisions based on campaign contributions"...clearly just more attempts to "criminalize behavior that is normal."









Friday, October 27, 2017

Federal Prosecutors Are Investigating Wells Fargo"s FX Business

Last week, WSJ stoked fears that the Feds might be ramping up another probe into abuse and manipulation in the foreign exchange market when it reported that Wells Fargo had abruptly terminated four bankers from its FX business and transferred another. Now, Wall Street’s paper of record is reporting that Federal prosecutors are investigating Wells for abuses in its FX shop - but the scope of the investigated is limited to one disputed trade.


According to WSJ, prosecutors have subpoenaed information from Wells and from the recently fired bankers as they investigate a trade and ensuing dispute between Wells and one of its clients, Restaurant Brands International Inc.


RBI owns several fast-food franchises, including Burger King, Tim Hortons and Popeyes Louisiana Kitchen. In an amusing twist, both companies count Warren Buffett’s Berkshire Hathaway as one of their largest shareholders.



In a statement, Wells Fargo said it “learned of an issue associated with a foreign exchange transaction for a single client. The matter was reviewed, the client was promptly notified regarding the issue, and Wells Fargo leadership took steps to hold accountable the individuals who were involved. Wells Fargo remains committed to our foreign exchange business, meeting our clients’ financial needs in an ethical way, and ensuring ongoing review of this and all business operations.”


The foreign-exchange issue revolves around a trade made within the past three years that included positions running into the billions of dollars, the people said. The trade resulted in a loss to Restaurant Brands, the people added, which led to a dispute between it and the bank. WSJ pointed out that the investigation into Wells Fargo’s foreign-exchange business, which is housed within its investment bank, are separate from sales-practices issues that rocked the bank more than a year ago. Wells Fargo is planning to refund Restaurant Brands hundreds of thousands of dollars related to the trading loss, WSJ"s sources said.  The Federal Reserve is also looking into the issue. Specifically, Federal prosecutors are looking into the sequencing of the trade in question and whether it could have involved so-called front-running, some of the people familiar with the matter said. That should send a chill down the spine of the fired bankers, as earlier this week a US jury found a former HSBC currency trader guilty of fraud related to front-running a large trade that netted the bank some $8 million in profits. The US is also in the process of extraditing another UK-based FX trader to face front-running related charges in the US.


Last year, a wide-ranging investigation into abuse and front-running in the global foreign-exchange market led to a rash of settlements worth billions of dollars involving Barclays and a handful of other global banks. 


While probes like this are never convenient, the investigation comes at a particularly trying time for the bank and its management. Earlier this month, WFC CEO Tim Sloan received a widely publicized tounge lashing from Massachusetts Senator Elizabeth Warren during Congressional testimony (Sloan became the second straight Wells CEO whom Warren said should resign during a public hearing). He has also participated in a handful of media interviews lately as he tries to burnish the bank"s once-wholesome reputation and bolster its lagging share price, which has never quite recovered from last year"s cross-selling scandal.


However, as WSJ explains, front-running is often difficult to gauge given the ambiguity around pre-hedging strategies in currency trading. Typically a bank must purchase currency as part of a trade and price it differently than it would price a stock. Wells Fargo’s investment-banking, securities and markets division, known as Wells Fargo Securities, is a fraction of the size of its U.S. big-bank peers, as is its foreign-exchange business. The bank doesn’t break out financial results or metrics for that group or its foreign-exchange business.


And while the investigation is the latest embarassment for the bank, which over the summer disclosed that it had overcharged mortgage and auto-loan borrowers, there is, at least, one mitigating factor: Unlike the retail banking scandal, which stoked widespread public outrage, few Americans understand how the foreign-exchange market works - indeed, many don"t even realize that such a market exists. This means that even in the worst-case scenario, Wells"s brand should remain untarnished from this latest scandal.


The US Attorney’s Office for the Northern District of California is leading the investigation.









Wednesday, October 18, 2017

Carney Reveals Europe's Potential Achilles Heel in Brexit Talks

This morning, BoE Governor Mark Carney discussed the risks of a hard Brexit during his testimony to the UK Parliamentary Treasury Committee. There was renewed weakness in Sterling during his testimony.



Ironically, given the fall in Sterling, Carney explained why Europe’s financial sector is more at risk than the UK from a “hard” or “no-deal” Brexit. We wonder whether Juncker and Barnier appreciate the threat that a “no-deal” Brexit poses for the EU’s already fragile financial system?


When asked does the European Council “get it” in terms of potential shocks to financial stability, Carney diplomatically commented that “a learning process is underway.” Having sounded alarm bells about clearing in his last Mansion House speech, he noted “These costs of fragmenting clearing, particularly clearing of interest rate swaps, would be born principally by the European real economy and they are considerable.”


Calling into question the continuity of tens of thousands of derivative contracts, he stated that it was “pretty clear they will no longer be valid”, that this “could only be solved by both sides” and has been “underappreciated” by Europe. Moving on to the possibility that there might not be a transition period, Carney had a snipe at Europe for its lack of preparation “We are prepared as we should be for the possibility of a hard exit without any transition…there has been much less of that done in the European Union.”


Maybe it’s Europe, not the UK, that needs the transition period most.


In Carneys view “It’s in the interest of the EU 27 to have a transition agreement. Also, in my judgement given the scale of the issues as they affect the EU 27, that there will ultimately be a transition agreement. There is a very limited amount of time between now and the end of March 2019 to transition large, complex institutions and activities…If one thinks about the implementation of Basel III, we are alone in the current members of the EU in having extensive experience of managing the transition for individual firms of various derivative and risk activities from one jurisdiction back into the UK. That tends to take 2-4 years. Depending on the agreement, we are talking about a substantial amount of activity.”


Returning to the theme of financial stability, he stated “As a general thing, in an uncooperative outcome, at least initially, the UK will be long financial services. We will have more capacity, capital, individuals, collateral in the UK. The EU will be short of financial services because not all of that capacity will be able to go across. The entire economic impacts are greater for the UK but, from a financial stability perspective, they are greater for the EU.”


On further questioning, Carney outlined the other two major issues, along with derivatives and wholesale banking, which would be affected, i.e. cross-border provision of insurance (UK domiciled entities would be unable to pay out) and data protection and transfer (there is more data in the UK which is relevant to the EU than vice versa).


Summing up, Carney stated “These issues are bigger for Europe than they are for us, but they’re material for us.” That comment prompted the following question “In which case we have much more leverage in order to get a deal?” The diplomatic reply was “I wouldn’t want to use financial stability issues as leverage. I wouldn’t want them to be addressed in a bloodless technocratic way in the interests of all the citizens.” Didn’t he just describe Juncker’s modus operandi.

Friday, August 18, 2017

"He's A Greedy Little Man" And A "Snake" - Transcripts Of Shkreli Jury Hearings Emerge

Martin Shkreli’s lawyers reportedly had to interview more than 250 prospective jurors before agreeing on 12. At the time, media reports hinted at some of the funnier reasons given by prospective jurors to get out of serving (one individual said he was biased against Shkreli because he had “disrespected the Wu Tang Clan"). Ultimately, the jury found the former hedge fund manager and pharmaceutical company CEO guilty on three out of eight counts of fraud.


Now, Harper’s Magazine has published transcripts from the Voir Dire hearings. The transcripts offer insight into how the trial of "the most hated man in America" came together. In most cases, the prospective juror offers some version of "he"s terrible" and is promptly excused.


When asked if he was aware of the defendant, one juror said yes and “I hate him,” before calling Shkreli “a greedy little man.”





“The court: The purpose of jury selection is to ensure fairness and impartiality in this case. If you think that you could not be fair and impartial, it is your duty to tell me. All right. Juror Number 1.



Juror no. 1: I’m aware of the defendant and I hate him.



Benjamin Brafman: I’m sorry.



Juror no. 1: I think he’s a greedy little man.



The court: Jurors are obligated to decide the case based only on the evidence. Do you agree?



Juror no. 1: I don’t know if I could. I wouldn’t want me on this jury.



The court: Juror Number 1 is excused. Juror Number 18.”



One guy said he felt biased against Shkreli as soon as he saw his face.






“Juror no. 40: I’m taking prescription medication. I would be upset if it went up by a thousand percent. I saw the testimony on TV to Congress and I saw his face on the news last night. By the time I came in and sat down and he turned around, I felt immediately I was biased.



The court: Sir, we are going to excuse you. Juror Number 47, please come up.”



Another juror equated Shkreli with Bernie Madoff who, let’s remember, stole $70 billion from his clients.





“Juror no. 47: He’s the most hated man in America. In my opinion, he equates with Bernie Madoff with the drugs for pregnant women going from $15 to $750. My parents are in their eighties. They’re struggling to pay for their medication. My mother was telling me yesterday how my father’s cancer drug is $9,000 a month.



The court: The case is going to come before you on evidence that you must consider fairly and with an open mind.



Juror no. 47: I would find that difficult.



The court: And that’s based on your parents’ experience with medication?



Juror no. 47: It’s based on people working very hard for their money. He defrauded his company and his investors, and that’s not right.



The court: Ma’am, we’re going to excuse you. Juror Number 52, how are you?”



One guy said he didn’t know who Shkreli was, but after taking one look at him said he looks like a "snake."





“Juror no. 52: When I walked in here today I looked at him, and in my head, that’s a snake — not knowing who he was. I just walked in and looked right at him and that’s a snake.



Brafman: So much for the presumption of innocence.



The court: We will excuse Juror Number 52. Juror Number 67?”



One prospective juror said he’d “never be able to forget” how Shkreli raised the price of Daraprim.





"Juror no. 67: The fact that he raised the price of that AIDS medication, like, such an amount of money disgusts me. I don’t think I’ll ever be able to forget that. Who does that, puts profit and self-interest ahead of anything else? So it’s not a far stretch that he could do what he’s accused of.



The court: Please go to the jury room and tell them you have been excused. Juror Number 70.”



One person described Shkreli as “the face of corporate greed in America," and that he"d need to be convinced of his innocence because he assumes Shkreli is guilty.





“Juror no. 77: From everything I’ve seen on the news, everything I’ve read, I believe the defendant is the face of corporate greed in America.



Brafman: We would object.



Juror no. 77: You’d have to convince me he was innocent rather than guilty.



The court: I will excuse this juror. Hello, Juror Number 125.”



Juror number 144 said Shkreli “looks like a dick.”





“Juror no. 144: I heard through the news of how the defendant changed the price of a pill by up-selling it. I heard he bought an album from the Wu-Tang Clan for a million dollars.



The court: The question is, have you heard anything that would affect your ability to decide this case with an open mind. Can you do that?



Juror no. 144: I don’t think I can because he kind of looks like a dick.



The court: You are Juror Number 144 and we will excuse you. Come forward, Juror Number 155.”



One juror said he couldn’t understand whether Shkreli was stupid, or just greedy.





“Juror no. 28: I don’t like this person at all. I just can’t understand why he would be so stupid as to take an antibiotic which H.I.V. people need and jack it up five thousand percent. I would honestly, like, seriously like to go over there.



The court: Sir, thank you.



Juror no. 28: Is he stupid or greedy? I can’t understand.



The court: We will excuse you. Juror 41, are you coming up?”



Shkreli is totally guilty, another juror said…and he disrespected the Wu Tang Clan.





“Juror no. 59: Your Honor, totally he is guilty and in no way can I let him slide out of anything because...



The court: All right. We are going to excuse you, sir.



Juror no. 59: And he disrespected the Wu-Tang Clan.”



While no date has been set, Shkreli is expected to be sentenced by federal judge Kiya Matsumoto some time during the coming months. Though Shkreli said on one of his post-trial livestreams that he expects to only serve a few months, possibly under house arrest. But legal experts believe that the sentencing is when Shkreli’s past demons will come back to haunt him in the form of a lengthy stay in federal prison. He could also be on the hook for millions of dollars in fines. After all, Shkreli has mocked not only the Brooklyn prosecutors who tried him, but members of Congress. It wouldn’t exactly look like a prosecutorial victory if they just let him walk away.
 

Saturday, August 5, 2017

How The CIA Came To Doubt The Official Story Of JFK’s Murder

By Philip Shenon and Larry Sabato via Politico Magazine,


After the assassination of President John F. Kennedy in November 1963, the CIA appeared eager, even desperate, to embrace the version of events being offered by the FBI, the Secret Service and other parts of the government. The official story: that a delusional misfit and self-proclaimed Marxist named Lee Harvey Oswald killed the president in Dallas with his $21 mail-order rifle and there was no evidence of a conspiracy, foreign or domestic. Certainly, the CIA’s leaders told the Warren Commission, the independent panel that investigated the murder, there was no evidence of a conspiracy that the spy agency could have foiled.


But thousands of pages of long-secret, assassination-related documents released by the National Archives last week show that, within a few years of Kennedy’s murder, some in the CIA began to worry internally that the official story was wrong—an alarm the agency never sounded publicly.


Specifically, key CIA officials were concerned by the mid-1970s that the agency, the FBI, the Secret Service and the White House commission led by Chief Justice Earl Warren had never followed up on important clues about Oswald’s contact with foreign agents, including diplomats and spies for the Communist governments of Cuba and the Soviet Union, who might have been aware of his plans to kill Kennedy and even encouraged the plot. (There is no credible evidence cited in the documents released so far that Cuban leader Fidel Castro or other foreign leaders had any personal role in ordering Kennedy’s murder.)


The CIA documents also offer tantalizing speculation about the chain of events in late 1963 that explained Oswald’s motives for killing Kennedy, which have previously never been established with certainty—how he may have become enraged after reading a detailed article in his hometown newspaper in New Orleans in September suggesting that his hero Castro had been targeted for assassination by the Kennedy administration. According to that theory, Oswald, who had rifle training in the Marine Corps, then set out to seek vengeance on Castro’s behalf—to kill Kennedy before the American president managed to kill the Cuban leader.


If that proved true, it would have raised a terrible question for the CIA: Was it possible that JFK’s assassination was, directly or indirectly, blowback for the spy agency’s plots to kill Castro? It would eventually be acknowledged the CIA had, in fact, repeatedly tried to assassinate Castro, sometimes in collusion with the Mafia, throughout Kennedy’s presidency. The CIA’s arsenal of weapons against Castro included a fungus-infected scuba suit, a poison-filled hypodermic needle hidden in a pen—and even an exploding cigar. The Warren Commission, never told about the CIA’s Castro plots, mostly ducked the question of Oswald’s motives, other than saying in its final report that he had expressed a “hatred for American society.”


JFK historians and the nation’s large army of private assassination researchers are still scrambling to make sense of the latest batch of tens of thousands of pages of previously secret CIA and FBI documents that were unsealed last week by the National Archives. The documents—441 files that had previously been withheld entirely, along with 3,369 other documents that had been previously released only in part—were made public under terms of a 1992 law that requires the unsealing of all JFK assassination-related documents by October, the law’s 25-year deadline.


Since the release last week, researchers do not appear to have identified any single document that could be labeled a bombshell or that rewrites the history of the assassination in any significant way. Many of the documents, which were made public only online, are duplicates of files that had been released years earlier. Other documents are totally illegible or refer to CIA and FBI code names and pseudonyms that even experienced researchers will take months to decipher. Several documents are written in foreign languages.


JFK


Still, the newly released documents may offer an intriguing glimpse of what comes next. The National Archives is required to unseal a final batch of about 3,100 never-before-seen JFK-assassination files by the October deadline, assuming the move is not blocked by President Donald Trump. Under the 1992 Kennedy Assassination Records Collection Act, the president is the only person empowered to stop the release. (Congressional and other government officials have told us in confidence that at least two federal agencies—likely the CIA and FBI—are expected to appeal to Trump to block the unsealing of at least some of the documents. Even after 54 years, some government officials apparently still want to keep secrets about this seminal event in U.S. history. The CIA and FBI acknowledged earlier this year they are conducting a final review of the documents, but have been unwilling to say if they will ask the president to block some from being released.)


None of the files released last week undermines the Warren Commission’s finding that Oswald killed Kennedy with shots fired from his perch on the sixth floor of the Texas School Book Depository in Dallas’ Dealey Plaza—a conclusion supported by 21st century forensic analysis—and that there was no credible evidence of a second gunman.


But the new documents do revive the question of why the CIA, so skeptical internally of many of the commission’s other findings by the 1970s, never acknowledged those suspicions to later government investigators—or to the public. Documents released decades ago show that CIA and FBI officials repeatedly misled—and often lied outright—to Chief Justice Warren and his commission, probably to hide evidence of the agencies’ bungling in their surveillance of Oswald before the president’s murder. The CIA appears also to have been determined to block the commission from stumbling on to evidence that might reveal the agency’s assassination plots against Castro and other foreign leaders.


In 2013, the CIA’s in-house historian concluded that the spy agency had conducted a “benign cover-up” during the Warren Commission’s investigation in 1963 and 1964 in hopes of keeping the commission focused on “what the Agency believed was the ‘best truth’ — that Lee Harvey Oswald, for as yet undetermined motives, had acted alone in killing John Kennedy.”



But what if the “best truth” was wrong? According to documents made public last week, the CIA was alarmed by the mid-1970s to realize that no one had properly followed up on clues about an especially mysterious chapter in Oswald’s life—a six-day, apparently self-financed trip to Mexico City beginning in late September 1963, two months before the assassination. The reason for the trip has never been determined with certainty, although he told his wife, Marina, that he went there to obtain a visa that would allow him to defect to Cuba, much as he had once attempted to defect to the Soviet Union.


The CIA acknowledged long ago that the agency’s Mexico City station had Oswald under surveillance during the trip, and that he met there with Cuban and Soviet diplomats and spies. The CIA station chief said later he was convinced that Oswald had a brief sexual relationship with a Mexican woman who worked in the Cuban consulate. Although there is no credible evidence of Soviet involvement in the assassination, Oswald’s other contacts in Mexico included—shockingly enough—a KGB assassinations expert who doubled as an accredited Soviet diplomat. A top-secret June 1964 FBI report, made public in the 1990s but apparently never seen by key investigators for the Warren Commission, suggests that Oswald was overheard threatening to kill Kennedy during his visits to the Cuban diplomatic compound in Mexico.



The files released last week also show that the CIA and other agencies failed to pursue clues that Oswald, who publicly championed Castro’s revolution even while serving in the Marine Corps, had been in contact with Cuban diplomats years before the Mexico trip—possibly as early as 1959, when he was deployed to a military base in Southern California. The information initially came to the FBI and the Warren Commission from a fellow Marine who recalled how Oswald boasted about his contacts with Cuban diplomats in Los Angeles, where Castro’s government then had an office.


The account from the fellow Marine was of “a lot more possible operational significance” than was realized in the months after the assassination but was never “run down or developed by investigation,” according to a 1975 CIA internal memo released last week. “The record of the beginning of OSWALD’s relationship with the Cubans starts with a question mark.”


That 27-page memo, which does not identify its author, is among the most intriguing of the documents in last week’s batch unsealed by the National Archives. Copies of the document were found inside larger CIA files released last week, including thick agency files labeled HELMS HEARING DUPLICATE. That seems to suggest the memo was given to former Director of Central Intelligence Richard Helms, who led the agency from 1966 to 1973, when he was later summoned to testify secretly to Congress about his involvement in the CIA assassination plots against Castro and other foreign leaders. Similar documents about the Kennedy assassination and Oswald were written in the 1970s by a senior CIA counterintelligence official, Raymond Rocca, who had served as the agency’s chief liaison to the Warren Commission.


Labeled “SECRET” and stamped “REPRODUCTION PROHIBITED” on each page, the 1975 memo lists several important clues about Oswald that went unexplored in the months and years after Kennedy’s death. (Versions of the same CIA memo were part of the flood of millions of pages of documents released after the 1992 law, although it has never attracted detailed attention outside a small circle of assassination researchers. Brian Latell, a respected former CIA analyst on Cuban intelligence, cited a version of the document in his 2012 book Castro’s Secrets, which suggested much closer links between Oswald and Cuba than had previously been known.)


The 1975 document noted the failure of the CIA, FBI and the Warren Commission to interview a key witness in Mexico City—Silvia Duran, the Mexican woman who worked in the Cuban consulate and was reported to have had the affair with Oswald. She is the “sole live witness on the record regarding Oswald’s activities,” yet her testimony “was taken and presented, solely, by the Mexican governmental authorities,” the CIA memo said. Duran, who is still alive, has repeatedly insisted she had no sexual relationship with Oswald, although she readily acknowledges that she helped him with his unsuccessful visa application for Cuba.



It was that same CIA memo that offered a detailed theory of the chain of events that led Oswald to kill Kennedy—how Oswald, who lived in his hometown of New Orleans for much of 1963, may have been inspired to assassinate the president if, as seemed probable, he read an article on Monday, September 9, in the local newspaper, that suggested Castro was targeted for murder by the United States.


The article, written by a reporter for The Associated Press in Havana and then published prominently in the Times-Picayune, was an account of an AP interview with Castro two days earlier, in which the Cuban strongman angrily warned the Kennedy administration that he was aware of U.S. assassination plots aimed at Cuban leaders, presumably including him, and was prepared to retaliate. The article quoted Castro as saying: “U.S. leaders would be in danger if they helped in any attempt to do away with leaders of Cuba.”


The CIA memo suggested that if Oswald, who was known to be an “avid reader” of the Times-Picayune, saw the article, it might have put the idea in his head to kill Kennedy as retaliation for the threat the United States posed to Castro—an idea that would have been in his mind as he left for his trip to Mexico that month. The possibility that Oswald read the article “must be considered of great significance in light of the pathological evolution of Oswald’s passive/aggressive makeup” and “his identification with Fidel Castro and the Cuban revolution,” the CIA memo said.


Immediately after the assassination, the CIA’s Mexico City station warned CIA headquarters that the AP article might contain a vital clue about Oswald’s motives for killing Kennedy—and even about possible Cuban involvement. But according to the 1975 analysis, “There is no evidence in the files on the Kennedy assassination that the Castro interview was considered in following up leads or in dealing with the Warren Commission, although Mexico Station specifically directed headquarters to the AP story very shortly after the Dallas killing.”


Previously released internal documents from the Warren Commission show that one of the commission’s most aggressive staff lawyers believed that Castro’s remarks to the AP—and the possibility that Oswald read the article—might be of great significance in explaining Oswald’s motives. But the internal files show that more senior staff members decided against any reference to the AP article in the commission’s final report for fear of feeding conspiracy theories about a possible Cuban link to Kennedy’s death. It does not reflect well on the legacy of either the CIA or the commission that, half a century after those gunshots rang out in Dealey Plaza, the newly released documents suggest that at least some of those conspiracy theories might be true.


Castro

Tuesday, August 1, 2017

How Can America Afford A Universal Basic Income? Simple: "Tax The Robots"

By replacing low-wage cashiers and other retail workers with robots, the retail sector’s struggling companies can engineer a potentially life-saving boost in profits. But as advances in artificial intelligence continue to accelerate, according to the World Economic Forum, large swaths of laborers are going to lose their jobs, leading to unprecedented levels of unemployment.


How to distribute the profits that will accrue to corporations thanks to this paradigmatic shift in labor-market conditions has been the subject of intense debate, as it has the capacity to create a sharp drop in living standards across developed economies.


So how can governments ameliorate this diminution of the American workforce? The WEF has an idea: Tax the robots and use the proceeds to fund a universal basic income for all Americans. As the paper notes, the once-controversial UBI has never been more poplar, thanks to tech luminaries like Mark Zuckerberg, Elon Musk and Bill Gates – all of whom have spoken in glowing tones about the policy’s potential to save America from dystopia. Yet, for all this talk, Zuckerberg & Co. have glossed over a crucial question: How, exactly, will taxpayers afford this?


The WEF says it looked to the private sector for answers, and came up with this simple conclusion: Tax the robots.


“Companies will profit significantly from workforce automation,” WEF writes. “So the private sector will be able to afford shouldering this burden, while at the same time still making greater profits.”



The WEF cites a small, yet successful, experiment that was conducted in the UK, and Ontario, as justification for its plan, which it fleshes out in greater detail below:





“As the robots take over, people will begin to lose their jobs, but companies will be fine. More likely than that - they’ll thrive. The profits generated from automation could be used to pay a basic wage to those displaced by robots. To use the welder example from before, a company could slash the cost of their production by at least a third in a short period of time, and would continue to see greater profits as efficiencies increase and the price for parts drops. If that company eventually arrives at the $2 an hour mark that BCG predicts, the company’s bottom line would have been improved by 1250%.



Given all of the savings and massive profits companies are going to reap from these new technologies, they should be responsible for using part of this monetary kick-back to help the workers they’ve displaced. Legislators might consider a sliding-scale automation tax, where a company qualifying itself as using an automated workforce would be taxed depending on how many human workers they have performing tasks compared to how many tasks are performed by automated workers that a human could rightly do. This money could then be put into a UBI fund that is then distributed by the government to citizens affected by automation—or to the entire population.”



While startup costs associated with building a robotic workforce might appear daunting, the WEF notes that they’ve fallen sharply in recent years, and will likely continue to decline as advances in AI technology sharpen robots’ ability to work side-by side with humans.



Some of the largest some of the largest food-service and retail companies have announced initiatives centered around providing customers with a more seamless shopping experience. Cowen"s Andrew Charles, the analyst calculates the jump in sales at McDonald’s as a result of the company"s new Experience of the Future strategy which anticipates that digital ordering kiosks (shown above) will replace cashiers in at least 2,500 restaurants by the end of 2017 and another 3,000 over 2018.


This trend will only continue to accelerate. McDonald’s, an early pioneer of automation, is already replacing human workers with automated kiosks. They expect a 5% to 9% return on investment in just the first year; in 2019 they expect this return to balloon to double digits. And this is only one sector: PricewaterhouseCoopers estimates that 38% of US jobs will be in danger of being replaced by automation by 2030.


To this, WEF adds that Micky D’s expects a 5% to 9% return on investment in just the first year; in 2019 they expect this return to balloon to double digits.



Amazon.com’s nearly $14 billion acquisition of Whole Foods Market has spurred (long overdue) calls from a handful of Congressional Democrats for an investigation into Amazon’s business practices on anti-trust grounds. Over the past few years, the company’s push for speedier delivery times (it offers same day delivery in certain markets through its Amazon Prime service) and an increasingly expansive away of products is devastating smaller retails and brands.


Some smaller retailers, having ascertained the existential threat Bezo’s blatantly monopolistic business practices pose, have started to push back, setting the stage for a full-scale battle between Amazon and its smaller rivals. In an email sent to authorized retailers, the CEO of Birkenstock USA threatened to cut off any retailers who violate the company’s strict policies surrounding reselling by turning over their stock to Amazon. The e-commerce giant has allegedly been reaching out to individual Birkenstock retailers, offering to buy out their entire stock at full price. Amazon has denied these claims. Already, retail bankruptcies have surged 110% in the first half of this year, according to a report by Fitch as retail surpasses battered energy as the most distressed industry in the US.


Unfortunately, US officials aren’t treating the problem of creeping automation with the deference that the WEF says it deserves. Case in point:





“At the exponential rate of robotization, there isn’t a lot of time for legislators to figure out the intricacies of a solution - but they don’t seem to be in too much of a rush. Steven Mnuchin, the US’s treasury secretary, is already completely ignoring this issue, for example.”



Fed Chairwoman Janet Yellen acknowledged the severity of the problem during her Congressional testimony following questions from two Republican senators. To be sure, the Fed doesn’t have the authority to raise taxes (though it could easily choose to monetize these handouts by agreeing to buy more government bonds). Stagnant wages, worsening labor-force participation and expanding deflationary prices have been linked by economists to increasing automation. In a recent study, PricewaterhouseCoopers estimates that 38% of US jobs will be in danger of being replaced by automation by 2030.
 

Thursday, July 20, 2017

Judge Halts Shkreli Trial

The trial of former Turing Pharmaceuticals CEO Martin Shkreli has been temporarily halted by Judge Kiyo Matsumoto after Shkreli’s lawyer objected emphatically as the prosecution planned to show jurors documents it claims are evidence of fraud committed by Shkreli, without calling witnesses to back them up, according to CNBC.


The documents allegedly detail payments that Shkreli"s drug company made to investors in two hedge funds he ran, as well as supposedly bogus consulting agreements he signed with some of his former investors entitling them to a salary and shares in Retrophin, a pharmaceutical company he co-founded and briefly led, according to CNBC. Jurors were given the rest of Wednesday off, as well as Thursday, to allow both the defense and prosecution time to file legal briefs on their arguments for and against requiring witnesses for the relevant documents. Testimony is expected to resume Friday, CNBC reported.
Benjamin Brafman, the celebrity defense attorney representing Shkreli, said denying him the opportunity to cross examine people involved with the documents would be tantamount to denying Shkreli his constitutional right to confront witnesses against him.



The documents included settlement agreements that Shkreli reached with investors at two of his hedge funds, as well as consulting agreements with some of those investors. Among the settlement agreements in dispute Wednesday included the terms of what investors received from Retrophin in exchange for dropping any claims against Shkreli and his hedge funds.


Shkreli is facing eight counts of wire and securities fraud stemming from his brief stint as a hedge-fund manager. Specifically, the prosecution is examining communications between Shkreli and several former investors in his fund for evidence Shkreli misled them about his qualifications, investment returns and other details like his investing track record and the amount of money he managed.  The prosecution also alleges that Shkreli falsified documents and backdated payments to corroborate his lies. Finally, prosecutors claim Shkreli defrauded Retrophin, which he founded in late 2012 just as his career as a money manager, CNBC reported.


Many of the witnesses called by the prosecution so far have described feeling betrayed by Shkreli. Some described Shkreli’s repeated evasions – he allegedly told one witness that he was “too busy” to give him his money back after starting Retrophin. Judging by the witnesses who’ve testified so far, it appears that many of Shkreli’s investors were small business owners who had invested between $100,000 and $300,000. After several investors threatened to sue, Shkreli allegedly offered to repay them using Retrophin’s resources. In addition to criticizing Shkreli for his dishonesty and strange behavior, many of the witnesses also admitted that they ultimately made money investing with Shkreli.


Matsumoto, the judge, indicated that she was sympathetic to the defense"s argument that settlement and consulting agreements should only be shown to jurors if a person who received those agreements takes the witness stand.


"I do think the fundamental right to confront the witnesses and question the witnesses is important," Matsumoto said.


If prosecutors are allowed to introduce the documents to jurors without calling related witnesses, they could rest their case soon. The trial began late last month, and is expected to last as long as six weeks. But if Matsumoto bars that method, prosecutors could be forced to call additional witness stand, meaning they would be unlikely to rest their case until next week sometime.

Thursday, July 13, 2017

Shkreli Told Investors He Had Millions Under Management When His Fund Was Broke

The prosecution has continued to call witnesses and show evidence in the trial of Martin Shkreli, providing the jury with documents to prove that Shkreli mislead investors by telling them he was managing $100 million when his fund had a balance of negative 33 cents in its prime brokerage account.


Another witness and former Shkreli investor told the jury how couldn’t tell if Shkreli’s flirts were genuine, or if the “Pharma Bro” really did have feelings for him.


According to the New York Daily News, Steven Richardson — a man who told Brooklyn federal jurors he’s had a domestic partner for 25 years — testified Tuesday he wondered if Shkreli’s quips about hookups and sex were just ploys to strike a rapport with the 63-year-old investor.



It got to the point that Richardson had to have a March 2010 talk with Shkreli, 34. After cocktails at Richardson’s Chelsea apartment, he said he sat Shkreli down on his bed. “I said, ‘Do you have any physical feelings for me?’ He took a second he said, ‘No, I like you a lot but I don’t.’”


Prosecutors also called Dr. Lindsay Rosenwald as a witness to discuss how his $100,000 investment with Shkreli turned out. Rosenwald ended up with Retrophin stock that he ended up selling for between $400,000 and $600,000. He also told a story about when Shkreli awkwardly hit him up about a dating lead. Shkreli allegedly asked Rosenwald if a certain woman was single. He then said he wanted it to be known “there is a handsome young hedge fund millionaire she should be dating.”


Meanwhile, a government accountant called by the prosecution went through bank-account records to try and corroborate the government’s argument. A bank account maintained by one of Martin Shkreli"s hedge funds in July 2011 had a balance of "negative 33 cents" in it, at the same time he was telling investors his funds had tens of millions of dollars under management, an accountant testified Tuesday, according to CNBC.


That accountant also said that an analysis of one of Shkreli"s funds, MSMB Capital Management, showed that it never at any one point had a total of more than $1.2 million in its bank account and brokerage account combined. And the combined balance of a brokerage account and several bank accounts maintained by his other fund, MSMB Healthcare, never topped $1.6 million, Wendy Spaulding, the accountant, testified in Brooklyn, New York, federal court.


The accountant revealed Tuesday that Retrophin, a drug company founded by Shkreli, paid $10,000 for Jay-Z concert tickets at a time when the company had just tens of thousands of dollars in its own bank accounts.


And the accountant testified that records showed more than $1.3 million from Retrophin being transferred to Shkreli"s personal bank account, and another $26,000 being transferred into that account from MSMB Capital.


Spaulding’s testimony could be damning for Shkreli, CNBC noted, because several witnesses have already testified that he told them he was managing between $30 million and $50 million.


Prosecutors also accuse Shkreli of looting Retrophin of money and stock to pay off investors in his hedge funds once they began demanding their money back.


Those investors also have said that Shkreli told them his hedge funds had a balance of long and short positions in publicly traded stocks, and that the funds as a rule did not have more than 10 percent of their investments in any single company.
 

Thursday, July 6, 2017

Witness In Shkreli Trial Says "Most Hated Man In America" Made Him Millions

Benjamin Brafman, attorney for former Turing Pharmaceuticals CEO Martin Shkreli has based Shkreli"s defense on the notion that, while his client may have misled investors in hedge funds and pharmaceutical companies that he controlled, most of them made money thanks to Shkreli"s business acument and investing prowess.


Even Sarah Hassan, a witness for the prosecution, admitted as much when she testified that Shkreli paid her back with $400,000 in cash, plus shares in Retrophin, a biotech company founded by Shkreli – though Shkreli’s repeated evasions felt like “a betrayal.”



And on Wednesday, testimony from another witness supported Brafman’s assertion: Darren Blanton, a Dallas-based biotechnology investor, told the jury that, although Shkreli lied to him repeatedly about his investing track record and the amount of capital he managed, the former pharma entrepreneur helped him make millions in profits.


Here’s Reuters:





Darren Blanton, a Dallas-based biotechnology investor who appeared in Brooklyn federal court as a witness for U.S. prosecutors, told jurors he invested in Shkreli"s hedge fund MSMB Capital after being told the fund was managing $35 million in assets and had an independent auditor.



He said he later learned both of those claims were false and found Shkreli evasive when he tried to get some of his money back. Blanton said he eventually filed a whistleblower complaint with the U.S. Securities and Exchange Commission.



Under cross-examination by Shkreli"s lawyer, Benjamin Brafman, Blanton conceded that despite his misgivings, his $1.25 million investment with Shkreli paid off, largely through an agreement in which Shkreli gave him shares in his drug company Retrophin Inc.”



Blanton said he still holds 150,000 shares of Retrophin, a biotech company that Shkreli co-founded ad briefly ran before being pushed out by the board. Blanton’s stake is worth nearly $3 million at Wednesday"s closing price of $19.83 per share.


And – in an admission that’s sure to tug at the jury’s heartstrings - Blanton said Shkreli founded Retrophin after learning that a friend of Blanton"s had lost a son to a rare disease, myotubular myopathy, and vowed to find a cure. Brafman"s cross-examination is expected to continue Thursday.


Shkreli, 34, gained notoriety in 2015 when he raised the price of a life-saving drug by 5,000 percent as CEO of Turing Pharmaceuticals, sparking outrage among patients and US lawmakers and leading the press to brand him "the most hated man in America." Shkreli has since embraced the role of provocateur, reveling in the negative publicity. His Twitter harassment of freelance journalist Lauren Duca led to him being banned from the social media platform, according to Reuters.


Federal prosecutors on Monday asked judge Kiyo Matsumoto for a gag order to prevent Shkreli from speaking with the press, claiming that he risks tainting jurors’ opinions by waging his own publicity campaign independent of the advice of his defense counsel. The request came after Shkreli lambasted the prosecution as incompetent and "junior varisty" during an impromptu conference with reporters.


The prosecution is alleging that, though Shkreli went to great lengths to ensure that all the investors in his fund were made whole, he still committed fraud by looting money from Retrophin to pay them back. Shkreli’s trial is expected to last between four and six weeks.

Thursday, June 15, 2017

CNN Commentator Calls Republicans Racist And Sexist For Interrupting Kamala Harris

Below is a perfect example of why civilized political discourse is no longer possible in the United States. 


Twice in the past two weeks, first with deputy Attorney General Rod Rosenstein and then again yesterday with Attorney General Jeff Sessions, the freshman Senator from California, Kamala Harris, chose to pursue an aggressive series of questions that many have interpreted simply as an effort to patronize, mock and/or embarrass witnesses before the Senate Intelligence Committee. 


But the questions asked by Harris, are not the real issue.  She has the right, and frankly the obligation, to ask tough and probing questions. 


The issue is that after asking those tough/probing questions Harris seems to have forgotten that witnesses are supposed to be given an opportunity to respond.  Moreover, when witnesses are not allowed to respond, it"s the duty of the committee chair, who happens to be Senator Richard Burr (R-NC) in the case of the Senate Intelligence Committee, to maintain order and assure that "questioning" of a witness doesn"t morph into "badgering" of a witness.


And that is exactly what happened yesterday when Harris once again decided to interrupt Jeff Sessions nearly 20 times in just over 6 minutes of testimony.  Here"s the full interview with a convenient "interruption counter":




Of course, as soon as Chairman Burr interrupted to remind Harris of the rules of the Senate Intelligence Committee and her obligation to allow witnesses an opportunity to respond, something he"s also done with other colleagues as well, the Twittersphere erupted with accusations of racism and misogyny.  Perhaps the most egregious, irresponsible accusation came from none other than CNN"s very own political commentator Keith Boykin.




But CNN wasn"t the only one to blast Burr"s interruption as sexist and/or racist...here are just a couple of other examples:







Of course, Harris has had a distinguished legal career going back to 1990 when she served as the Deputy District Attorney in Alameda County, California and culminating with two terms as California"s Attorney General before being elected to the Senate last year.  Given that, perhaps someone could explain why it"s not supremely insulting and condescending to suggest that Kamala Harris should be given special treatment and exempted from committee rules simply because of her race and/or sex...that suggestion would seem to be more racist and/or sexist.

Wednesday, June 14, 2017

Gundlach: "You Should Be Raising Cash Literally Today"

While there was nothing markedly new from Jeff Gundlach in his latest monthly webcast, it appeared that the DoubleLine CEO either had just read or otherwise agreed completely with JPM"s Marko Kolanovic, who as we noted earlier, warned that even a modest spike in vol coupled with a plunge in liquidity, could lead to "catastrophic losses" for the year"s best performing strategy: short convexity, or otherwise selling volatility. Recall what JPM said.





May 17th and similar events bring substantial risk for short volatility strategies. Given the low starting point of the VIX, these strategies are at risk of catastrophic losses. For some strategies, this would happen if the VIX increases from ~10 to only ~20 (not far from the historical average level for VIX). While historically such an increase never happened, we think that this time may be different and sudden increases of that magnitude are possible. One scenario would be of e.g. VIX increasing from ~10 to ~15, followed by a collapse in liquidity given the market’s knowledge that certain structures need to cover short positions.



A few hours later, in not so many words, Gundlach made the same warning during the webcast, in which he - like Gandalf - warned that "we"re on increasing watch for volatility," Gundlach said, pointing out that "there is a massive amount of money that is being short VIX."




"It"s a trade that"s made a lot of money and its very very crowded, which suggests to me the days of low volatility are numbered," he said. We "probably won"t see it continue through year end."




What does the above mean in trading terms? "If you"re a trader or a speculator I think you should be raising cash today literally today. If you"re an investor you can easily sit through a seasonally weak period," Gundlach repeated that while he does not expect a recession any time soon, he does anticipate a summer correction in S&P.


Aside from an imminent vol spike, Gundlach also went off on a political tangent and summarized his views on the ongoing drama in DC, saying "the establishment: in Washington is trying to undermine Trump by running out the clock on his administration. “They’re really just trying to wait Trump out, trying to obstruct his agenda as much as possible,” Gundlach said quoted by Bloomberg. “Small change is what they’re looking for.”


Speaking during the Sessions testimony, he called the political charade taking place in DC “a sideshow or entertainment" and said the US political conflict is “rope-a-dope,” after the strategy used by Muhammad Ali to wear out opponents. It remains to be seen if the Democrats, or Trump, win this particular boxing match.


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Finally for those who missed it, here is Gundlach"s full slideshow