Tuesday, August 23, 2016

Tuesday, August 23, Morning Global Market Roundup: Asia Stocks Edge Up Amid Fed Lull, Oil Slips

By Wayne Cole 
August 23, 2016

Asia shares inched up on Tuesday while oil fell for a second session as investors awaited clues on whether the Federal Reserve will raise U.S. interest rates this year.

European equities markets also looked set for a modest start, with Eurostoxx 50 futures STX1 ahead by 0.4 percent. EMini futures for the S&P 500 ESc1 were flat.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.3 percent in slow trade. South Korea .KS11, Australia and Shanghai .SSEC all gained.

Japan's Nikkei .N225 went the other way and eased 0.6 percent as the yen ground higher on the dollar.

A survey of Japanese manufacturing activity showed signs of steadying in August as output rose for the first time in six months, but the improvement was marginal and had little impact on stocks.

The IHS Market/Nikkei Japan Flash PMI rose to 49.6 in August from a final 49.3 in July. More flash surveys are due from Europe and the United States later in the day.

The whole world seems to have hushed ahead of comments from Fed Chair Janet Yellen at the central bank's annual meeting in Jackson Hole on Friday. Investors still doubt the stars will align for a hike anytime soon, so a hawkish tone from Yellen would challenge that equanimity.

"Ever so slowly, the market does seem to be reluctantly acknowledging the chorus of senior Fed speakers who have suggested recently that a 2016 rate hike is still quite probable and September is 'live'," wrote analysts at ANZ in a note.

"But in reality, the response has been very muted."

Indeed, U.S. Treasuries actually rallied on Monday, with 10-year yields US10YT=RR at 1.54 percent after falling 4 basis points overnight.

Fed fund futures imply around a 24 percent chance of an easing in September, rising to around 50 percent by December.

A quarter-point hike is not fully priced in until September 2017.

Oil Gives Ground

In commodity markets, oil remained under pressure after shedding 3 percent on Monday.

Prices retreated from two-month highs on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising U.S. oil rig count.

Brent crude LCOc1 lost 40 cents to $48.76 a barrel. It hit a two-month high of $51.22 on Friday. U.S. crude futures CLc1 fell 49 cents to $46.92, after the September contract expired on Monday at $47.05.

On Wall Street, the Dow .DJI had ended Monday down 0.12 percent, while the S&P 500 .SPX lost 0.06 percent and the Nasdaq .IXIC added 0.12 percent.

Biotech stocks received a boost from Pfizer's (PFE.N) $14 billion acquisition of cancer drug maker Medivation (MDVN.O), which jumped nearly 20 percent.

Of the 479 companies in the S&P 500 that have reported earnings, 71 percent have topped expectations, according to Thomson Reuters data. Earnings are currently showing a decline of 2.3 percent for the quarter.

In forex markets, the dollar slipped 0.15 percent to 94.381 against a basket of currencies .DXY. The index fell about 1.3 percent last week on what traders perceived as mixed signals from Fed officials.

The dollar drifted as low as 100.03 yen JPY= in early trade and spent much of the session hovering just above that psychological bulwark. The euro was a shade firmer at $1.1336 EUR=.

The New Zealand dollar blipped higher after the country's central bank forecast another 35 basis points in possible rate cuts, less than many investors had wagered on.

The kiwi dollar NZD=D4 rose around half a cent to $0.7323 in reaction.

Article Link To Reuters:

Persimmon Profit Up 29%; Confident On Returns

By Razak Musah
August 23, 2016

Persimmon PLC (PSN.LN) said Tuesday it is confident that its strategic focus will continue to deliver strong returns after recording half-year earnings growth.

The U.K. housebuilder's pretax profit for the six months ended June 30, rose 29% to 352.3 million pounds ($460.5 million) from GBP 272.8 million a year earlier, helped by a 12% rise in revenue during the period to GBP1.49 billion from GBP1.33 billion.

"Persimmon's robust trading performance in the first half of 2016 was driven by our continued focus on meeting market demand to deliver controlled sustainable growth," Group Chief Executive Jeff Fairburn said.

Persimmon said legal completions increased 6% to 7,238 new homes sold versus 6,855, adding that 7,108 plots of new land secured in the period brought consented land bank to 93,519 plots.

"While the result of the E.U. Referendum has created increased economic uncertainty, customer interest since then has been robust with visitor numbers to our sites around 20% ahead year on year," Mr. Fairburn said.

The company's private sale reservation rate since July 1 is currently 17% ahead of the same period last year. "The Group is now trading through the traditionally slower summer weeks but customer demand remains encouraging and we anticipate a good autumn sales season," Mr. Fairburn said.

"We are confident that our long term strategic focus will continue to deliver strong returns for our shareholders," he said.

Article Link To MarketWatch:

Did Students Win the Campus Culture Wars?

Last year, colleges erupted in protests at offensive monuments and trespassed-upon ‘safe spaces.’ What happened next may have changed campus life forever.

By Lizzie Crocker
The Daily Beast
August 23, 2016

Last year, college campuses roiled with student activism and protests, from hunger strikes to requests for trigger warnings on academic curricula, the likes of which the country hadn’t seen in decades.

Student groups across the country, many of them aligning themselves with national movements like Black Lives Matter, submitted demands for greater faculty and student diversity and a campus climate that is more inclusive and supportive of minority students.

As of December 2015, students at roughly 80 schools nationwide had submitted lists of demands to their universities: calls for new deans and presidents, more globalized curricula at liberal arts colleges, and school-endorsed “safe spaces” for minority groups, among other things.

Many universities and colleges have attempted to assuage students--and right the wrongs of history--by abandoning symbols and traditions with ties to racism, colonialism, and slavery.

Yale University, which was criticized for deciding not to rename Calhoun College at the end of last semester, has established a new naming committee to reconsider the issue as school reopens.

Indeed, a number of liberal arts schools have developed new diversity and inclusion initiatives in response to protests by the “Firebrand Generation”—a nickname, coined the New Yorker’s Nathan Heller, for today’s politically restive students.

As the new school year begins, it’s clear that universities are bending to student activists’ forcefully stated will.

These students have won many small and large battles against old-school institutions, sometimes refusing to eat until their vilified college leaders resigned. Do not expect students’ demands for change to die down anytime soon.

Here’s our guide to the most high-profile student protests over the last year—and how school administrations are heeding their calls for change.

“Masters” Abolished; Traditions, Symbols, And Songs Abandoned

Last year, students at schools across the country called on their respective universities to abandon traditions and symbols with ties to racism. Harvard’s residential “House masters” were officially renamed “Faculty Deans” in the spring semester, in response to complaints that the title “master” connoted slavery. Harvard Law School also retired its official coat of arms, which dated back to 1936, because of its link to a slave-owning benefactor.

The racially charged names of two student dormitories at Georgetown University were abandoned last year. Mulledy Hall and McSherry Hall, both named for university presidents who authorized the sale of 272 slaves in 1831, were respectively (and temporarily) renamed Freedom Hall and Remembrance Hall.

The University’s Working Group on Slavery, Memory and Reconciliation, established by Georgetown’s president in September, has been “thoughtfully developing a comprehensive range of actions for the university to consider to best acknowledge our historical ties to slavery,” a school spokesperson told The Daily Beast.

Comprised of Georgetown Jesuits, faculty, students, staff, and alumni, the group is responsible for considering “the renaming of buildings, identification of significant historical locations on campus, enabling research that advances understanding of the history, support for descendants, and convening events and opportunities for dialogue on these issues,” according to the spokesperson. 

Amherst College retired its unofficial mascot, a colonial-era military commander and the college’s namesake, Lord Jeffery Amherst.

Many students argued that “Lord Jeff,” who advocated to “inoculate” Native Americans by spread of germ warfare, symbolized white oppression. The school agreed to remove all “Lord Jeff” imagery and representation on campus.

Students at Princeton University orchestrated a 32-hour sit-in in President Christopher Eisgruber’s office, calling for the university to reconsider the impact of Woodrow Wilson’s “racist legacy” on campus. Last April, the university’s Board of Trustees voted to keep Wilson’s name on Princeton’s Woodrow Wilson School of International and Public Affairs, as well as on one of its residential colleges.

At Yale, a campaign to rename Calhoun College--a residential building named for the bigoted statesmen John C. Calhoun--was initially vetoed last spring by the Yale Corporation, the university’s governing body that includes President Peter Salovey.

The decision was widely condemned by alumni, professors, and students. This summer, dishwasher Corey Menafee protested Calhoun’s legacy by smashing one of the slavery-depicting stain glass windows in the residential college—and was welcomed back by the University after he resigned.

Yale has since announced that it will reconsider renaming the residential college, tasking an 11-member committee of alumni, students, staff, and faculty to arrive at a decision. The University also promised to remove all window panes depicting scenes from Calhoun’s life by the time students returned to school this semester.

Just last week, Vanderbilt Chancellor Nicholas Zeppos announced that the residential Confederate Memorial Hall will now be known as Memorial Hall.

The residential building “spoke to a past of racial segregation, slavery” and “looms over a present that continues to struggle to end the tragic effects of racial segregation and strife,” Zeppos wrote in a letter to the community noting that “many generations of students, faculty, and staff” have debated the name of this residential hall, but were all “blunted” in the past.

He stressed that the school was not trying to “rewrite history,” but to acknowledge their privilege as an institution to “teach, to learn, and, indeed, to make history.”

Beginning this semester, the University of Mississippi’s marching band will no longer play the Civil War-era song “Dixie” at football games and other athletic events, a tradition that dates back to 1948.

The school had already dropped its “Colonel Reb” mascot and other symbols of the “Old South.”

Safe Spaces, New Leaders, And Diversity “Task Forces”

You’ve likely seen the video of Mizzou student protesters linking arms in front of a “safe space” they’d formed in the quad, threatening to call the police if media—including student reporters—didn’t back away from the area.

Or the petition at Wesleyan University to cut funding for a school newspaper that ran an op-ed criticizing the Black Lives Matter movement. By publishing this critique, the paper “neglects to provide a safe space for the voices of students of color and we are doubtful that it will in the future,” petitioners wrote.

In both cases, “safe spaces” could be construed as a euphemism for segregation and censorship. But schools have been receptive to the concept of a “safe space” on campus as a supportive space, where people who have experienced racism or microaggressions can share those experiences without others invalidating them.

As of August, Ithaca College had revised a list of “action items to promote diversity, respect, and inclusion” in response to fervent student protests last year.

Among these items is the creation of a new safe space for its ALANA (African American, Latino, Asian American, Native American) students, which will open This fall in the Campus Center. The space will serve as “both a forum for open interaction and a retreat where they can reflect and refresh,” according to the action items list.

Professional and student staff within Ithaca’s Offices of Residential Life and Public Safety will also participate in a “shared trainings on diversity and inclusion” this fall, the document reads. The school has purchased “body cameras” for its Public Safety officers and is currently “working to define the policies and procedures for how the cameras and footage will be used to ensure adherence to legal requirements, best practices, and the privacy of our students.”

Ithaca President Tom Rochon will also step down from his leadership post in July 2017, acquiescing to student protests and a subsequent student-and-faculty vote calling for his resignation.

During family weekend last year, student protesters orchestrated a “solidarity walkout” demanding that the president step down and criticizing his “disregard for minority community members.”

Princeton also established a Special Task Force on Diversity, Equity and Inclusion at the end of 2015, which had outlined 41 recommendations to improve campus climate as of May 2016.

The University also created a Dean for Diversity and Inclusion position, appointing Dr. LaTanya Buck, founding director of the Center for Diversity and Inclusion at Washington University, to the job.

Buck officially began work in her new role at Princeton in August, which includes supervising the directors of the Carl A. Fields Center for Equality and Understanding; the LGBT Center; and the Women’s Center.

The Provost’s Office allocated $400,000 in funding to grow the Centers’ staff and increase their programming budgets.

Brown will continue to implement new policies as part of its Pathways to Diversity and Inclusion program, which was created last year in response to student protests.

In an email to The Daily Beast, a spokesperson for Brown called the initiative a “highly detailed action plan” which has outlined “a set of more than 50 concrete, achievable actions,” some of which are currently underway while others will take shape in the years ahead.

The University has invested $165 million in the initiative--money that will go towards growing the staff at the Brown Center for Students of Color, the Sarah Doyle Women’s Center, and the LGTBQ Center.

As part of the initiative, Brown has promised to double the number of its faculty members from diverse backgrounds by 2025.

New and returning students at Columbia University will be invited to participate in a “storytelling series” where they can share their experiences “à la The Moth,” Suzanne Goldberg, Executive Vice President for University Life, wrote in an email to The Daily Beast. The first of these storytelling series, “Identity,” will begin in late September.

It’s unclear whether Columbia professors will include trigger warnings on their syllabi, as students asked them to do last year.

Article Link To The Daily Beast:

Donald Trump’s Potemkin Campaign

Trump doesn’t consult campaign roadmaps. It is not even clear he knows how to read one.

By David Cay Johnston
The Daily Beast
August 23, 2016

We learned something extraordinarily valuable last week about Donald Trump’s qualifications to be president when, in the words of oh so many news reports, there was another shake up of his tiny campaign team. Sadly, most all of the breaking news reports and initial opinion columns missed it.

The gist of news reports concerned the firing of one campaign manager—who evidently had been an unregistered, deceptive and highly paid foreign agent for a Moscow-leaning Ukraine government—and the hiring of a new one, the overseer of a fringe website that makes up fantastical “news” reports which Trump regards as factual.

The widely reported significance: Trump was blowing off the Republican establishment and retaining inexperienced enablers who would, as the saying goes, let Trump be Trump.

That’s important news, but the focus on personalities, style and the inside baseball of the campaign missed the much bigger story, the one that matters to America and the rest of the world.

What the latest campaign staff changes made indisputable is that Donald Trump does not have a plan to win the White House. He never has.

Ponder that for a moment. A man who brags about his supposed business acumen seeks the most powerful job in the world by the seat of his pants. Trump has publicly lusted about occupying the Oval Office since 1985, yet he never put in the time to develop a strategy to win the presidency.

Politics reporters love to invoke the clichés “road to the White House” or “roadmap to victory.” Trump doesn’t consult campaign roadmaps. It is not even clear he knows how to read one, especially after spurning experienced campaign hands in choosing as his campaign CEO one Stephen Bannon, who was chairman of Brietbart.com, a pugnacious promoter of “news” created from whole cloth and a former Goldman Sachs-er. The last is especially curious given Trump’s insistence that something is amiss about his opponent’s getting paid for speeches before Goldman Sachs-ers.

A candidate with a plan would run from Bannon fast, in good part because Bannon wants voters to reject House Speaker Paul Ryan, described at Breitbart as a “double agent” in league with Hillary Clinton. Were Trump elected, none of his grand promises – that wall on the Mexican border, tariffs on Chinese goods, barring Muslims from entering the country – could have even a slim chance of becoming reality without the approval of the Speaker, who controls the flow of all legislation in Congress.

Presidents court Speakers regardless of what they think of them personally or politically. They certainly do not publicly attack them and embrace their foes.

The wrong lesson to draw from this would be that Trump doesn't really want to be president. He does. What Trump doesn't know is how to win the votes that would put him in the Oval Office just as, were he to be elected, he doesn't have a clue about the duties, limitations and responsibilities of the presidency as laid down in the Constitution.

Despite three decades of time to plan for a successful presidential campaign, all Trump offers is bluster, bullying and pure bull.

Keep in mind the presidential debates last December when Trump was asked about his nuclear triad priorities. His answer revealed a total ignorance about nuclear deterrence. Sen. Marco Rubio, something of an empty suit himself, then schooled Trump on America's ability to deliver nuclear weapons three ways – from submarine based missiles, land-based missiles or bombers.

Even more disturbing, as my book The Making of Donald Trump reveals, is that Trump was asked the same question four months earlier by the same questioner, the very smart right-wing radio talk show host Hugh Hewitt. Trump’s answer on the radio was the same kind of gibberish he delivered on television.

Hewitt, when I ran into him the other day, marveled that Trump did nothing in the intervening four months to learn about the nuclear triad.

Then there’s the campaign itself. Trump is running a Wag the Dog campaign, a reality-show version of an actual campaign that depends on lots of television coverage of his outlandish statements and long stretches where he retreats from public sight.

Every major party candidate for president in modern times has set up offices around the country to identify and cultivate voters who might be swayed, to reach out to donors and then to get supporters to the polls on election day. But as the political reporters covering the campaign keep pointing out, Trump has no significant ground game. His campaign is a mirage.

Compare Trump’s bumbling, fumbling and stumbling on the campaign trail to the unlikeliest president of modern times, Barack Obama. As a black freshman senator from Illinois, Obama had the audacity just two years into his first term to declare for the White House. Obama’s team had little money compared to the presumptive 2008 Democratic nominee, Hillary Clinton. Both Obama and Clinton, however, had well-developed plans to get their party's nomination.

Obama was for all practical purposes a political novice and yet he executed with precision a plan that won him the Democratic Party nomination in 2008 and the general election.

The Obama team understood the party rules in the primaries and the general election rules in the general election.They also knew how to use social media and rhetoric to win with grace and dignity. Trump has none of this.

Richard Nixon had ten fewer years than Trump to go from thinking he could be president to taking the oath of office. Nixon had a plan in 1960 that almost worked. In 1968 his much more thoroughly developed plan — unfortunately one built on deception and dirty money – put him in the White House.

In business and in the nonprofit world, competent executives plan for the future. To get from here to there, they study and think, gather data, assign subordinates to make studies, ask hard questions, write out plans and then change them as the facts and circumstances dictate. The smartest and most successful executives solicit contrary opinions and pay attention to warnings, just as military officers are trained to solicit options from their subordinates. Competent executives maintain focus on what is realistic.

The biggest job in the world is president of the United States yet the Republican nominee treats it as less worthy of preparation, planning and thoughtful execution than the development of a golf course.

Ask not what Trump can do for America, ask what you can do to ensure that in the future only well-prepared candidates get either major party's nomination for president.

Article Link To The Daily Beast:

Turns Out You Can’t Trust Russian Hackers Anymore

Moscow-linked cyberthieves aren’t just stealing and releasing emails anymore -- they’re altering them to smear one of Putin's most vocal opponents.

Foreign Policy
August 23, 2016

Often, in war, mistakes are made. Sometimes, in Russia’s information war against the West, mistakes are made and then published for all the world to see.

That seems to be what happened when two supposedly independent hacking groups, believed by security experts to have ties to the Kremlin, posted the same documents stolen from a philanthropy run by George Soros. But the hack included a twist: Some of the documents taken by one group were altered in a bid to try and link Soros to Russian anti-corruption activist Alexei Navalny, revealing how hackers likely working for Moscow are editing documents to smear their victims.

After hackers broke into a system for sharing documents at Soros’s Open Society Foundations, material describing the organization’s work in Russia appeared on two different sites: in November on the web platform of CyberBerkut, a pro-Russian hacking group that opposes Ukraine’s current government, and in June on DCLeaks.com, a website that hosts purloined documents and is believed by security researchers to be a Russian project.

Among the documents posted, at least three appear on both sites. The documents posted by CyberBerkut have been edited to try and show that Open Society provides significant financial support to Navalny.

CyberBerkut edited one budget document to include a line describing a grant to Navalny’s Foundation for Fighting Corruption to the tune of either $240,000 or $122,000 — CyberBerkut’s editors managed to put two different amounts on the same budget line. In another document titled, “Russia Project Strategy, 2014-2017,” Berkut added the name of Navalny’s foundation to a paragraph describing the lack in Russia of “institutions that focus analytically on issues of policy relevance.” By adding the Foundation for Fighting Corruption to that paragraph, Berkut falsely implied that Navalny’s group received financial support from Open Society. And Berkut edited a third document, which describes how Russian NGOs are complying with the country’s harsh laws governing civil society groups, to claim that Navalny receives support from Yandex, a Russian Internet services firm that competes with Google.

Navalny denies receiving funding from Soros and says he has had no support from Yandex. Laura Silber, a spokesperson for Open Society, said the foundation has never supported Navalny and that the edited documents posted by Cyber Berkut amounted to a libelous claim.

The Kremlin, Navalny wrote in an email to Foreign Policy, “really likes that type of tactics: posting fake documents among real hacked documents.” The goal, he wrote, is to create a mess for the opposition.

“At the end of the day everyone will understand — documents are fake, but it will be a two-week-long discussion: ‘Is [the] opposition and Navalny in particular using Soros’ money?’,” Navalny wrote.

The Kremlin hates George Soros because Open Society, his marquee philanthropy, focuses on boosting democracy in the former Soviet bloc and elsewhere. Silber says Open Society “supports human rights, democratic practice, and the rule of law in more than 100 countries around the world.”

Russian president Vladimir Putin, however, views Soros as a deep-pocketed troublemaker whose philanthropy has helped support governments in the former Soviet bloc with distinctly pro-Western leanings. The Russian leader and former KGB hand saw Soros’s hand behind the Color Revolutions in Ukraine in 2004 and in Georgia in 2003. When Russian authorities banned Open Society from Russia last year, they said the group constituted “a threat to the foundations of the constitutional system of the Russian Federation and the security of the state.”

By claiming that Navalny received financial support from Soros, hackers with apparent connections to Russian security services were attempting to tie Russia’s most outspoken and prominent dissident to one of the Kremlin’s biggest enemies. And by claiming that Open Society funds Navalny’s work, which has in recent weeks leveled explosive and well-documented corruption allegations at senior Kremlin officials, the hackers sought to smear Soros’s work, essentially accusing him of meddling in internal Russian politics.

The “focus of discussion is switched from ‘Putin’s corruption’ to ‘opposition and its shadow money,’” Navalny said.

Both DCLeaks.com and Cyber Berkut have links to Russian security services, but the exact extent of that relationship remains shrouded in mystery. CyberBerkut burst onto the scene following Ukraine’s 2014 revolution, which ousted the country’s pro-Russian president, Viktor Yanukovych, and is most famous for hacking into the computer system of Ukraine’s election authority during the May 2014 presidential elections, leaving breadcrumbs suggestive of ties to Russian military intelligence.

Security researchers argue that DCLeaks.com represents another Russian-backed influence operation. That website was used by the hacker calling himself Guccifer 2.0 to share documents with journalists. Guccifer 2.0 surfaced after the Democratic National Committee announced in June that it had been hacked and took credit for the operation. Security researchers and U.S. intelligence believe he is a creation of Russian intelligence to deflect attention from Moscow.

It could be that “DCLeaks and CyberBerkut are the same people or they have close connections to each other,” said Anton Cherepanov, a researcher for the Slovakian cybersecurity firm ESET, who discovered the overlap between the posted documents. It is certainly also possible, he said, that the two groups independently hacked Open Society and posted the same, but slightly different, documents.

Navalny, for one, was not surprised to be unfairly linked to Soros.

“Generally I believe that Putin really considers using hackers as a legit soft power. No one is dead, you are not using tanks or missiles, no one can 100% prove that he is involved,” Navalny wrote.

“No men in uniform are involved, just a few guys with thick glasses and reporters who want to write an interesting story.”

Article Link To Foreign Policy:

Uber Finds New Rival In Apple As Tech Company Courts Lyft

By James Covert
The New York Post
August 23, 2016

Uber boss Travis Kalanick may have a new nemesis: Apple boss Tim Cook.

Apple was recently in talks to take a stake in Lyft, the No. 2 ride-hailing app in the US, as part of a “strategic partnership” that could pose a fresh domestic threat to Uber, sources told The Post.

The size of Apple’s potential investment in Lyft couldn’t be learned, and it’s not clear whether the talks are still ongoing, according to sources briefed on the situation.

Discussions about the possible partnership with Apple were focused on forming a possible competitive and operational alliance, sources said.

The talks, the sources added, weren’t part of Lyft’s exploration of strategic alternatives this summer, a process that was led by investment bank Qatalyst Partners.

“M&A was not discussed at all,” a source close to the talks told The Post, adding, “There’s no interest from Apple or Lyft in an acquisition” of Lyft.

Apple’s talks with Lyft are the latest sign that the iPhone maker is escalating what could be a global battle with Uber as both companies expand into self-driving-car technology.

Qatalyst, led by hard-charging tech banker Frank Quattrone, “reached out” to Apple about a possible Lyft acquisition, one source noted, as it likewise brokered discussions with prospective acquirers including Google, Amazon and GM.

That process, which Lyft’s board initiated after it received an expression of interest from GM, didn’t result in any serious merger discussions, sources said.

Meanwhile, sources said the operational tie-up being discussed by Apple and Lyft was similar to the one Apple took in July with its $1 billion stake in Chinese ride-sharing giant Didi Chuxing.

The deal with Didi, which has been valued at $26 billion, was a key factor in Uber’s decision last month to give up its aspirations to compete as a stand-alone company in China and merge its operations there with Didi’s, according to some industry insiders.

Likewise, the prospect of Apple becoming a deep-pocketed backer of Lyft, which was valued at more than $5 billion in its most recent round of funding, could change the competitive equation for Uber in the US, sources said.

San Francisco-based Lyft has lately been battling speculation that it is looking to find a buyer, as the end of Uber’s fight with Didi in China has freed up cash for a possible showdown with Lyft in the US.

Lyft execs have countered that the company has $1.4 billion in cash, although it has disclosed it’s spending $600 million as it dangles incentives for drivers and passengers alike in an aggressive battle for market share against Uber.

“Lyft is not for sale, we are on a fully funded path to profitability,” a spokeswoman said Sunday.

On Monday, officials at Apple and Lyft declined to comment.

Article Link To The New York Post:

After 20 Years, Critics Are Still Lying About The Success Of Welfare Reform

By Post Editorial Board
The New York Post
August 23, 2016

Twenty years ago this week, President Bill Clinton signed welfare reform into law — the most revolutionary domestic political achievement in decades.

With the law, Uncle Sam took a giant step toward ending the decades-old cycle of long-term dependency that old-school welfare had caused. In its place came a new emphasis on moving welfare recipients into the workforce, giving them a real sense of self-respect and financial independence.

It’s been one of America’s great success stories — yet it remains under attack from leftists who insist it did more harm than good and want to restore the old down-spiraling cycle of open-ended cash handouts.

A new analysis by the Manhattan Institute’s Scott Winship shows just how successful welfare reform has been — and how wrong the critics were then and are now.

Far from creating more poverty, Winship shows, the new rules have left children — particularly in single-parent families — less likely to be poor today. Indeed, poverty rates for black children and single-parent families have dropped to historic lows.

And as people moved from welfare to work, employment rates for single mothers rose 15 percent, while teen pregnancy took a dramatic drop.

Indeed, with the growth of non-cash government aid — food stamps, housing aid, Medicaid, etc. — “there is little evidence that welfare reform caused an increase in hardship or extreme-cash poverty,” the report concludes.

Yes, some problems remain: The growth of those non-cash programs, for example, tends to undermine work requirements.

But the underlying principle has been proved: Most people on welfare don’t want to remain forever dependent on government handouts. And the best way to fight poverty is to help them join the workforce.

Article Link To The New York Post:

Emerging Markets May Enjoy Secular Stagnation

By James Saft
August 23, 2016

A low-growth world won’t be an easy one for emerging markets, but at least the Federal Reserve will keep the water in the bath warm.

That means returns to riskier assets like those from emerging markets could do relatively well in the near term, as the Fed is forced to recalibrate interest rate policy for a stubbornly less economically vibrant world. The longer term, with low demand from developed markets and a potentially protectionist upsurge, could be more difficult.

Stanley Fischer, Federal Reserve Vice Chair, performed a delicate balancing act in a speech on Sunday, both preparing the market for a rate increase, possibly in December after the U.S. presidential election, while also speaking frankly and not encouragingly about the productivity slowdown which lies at the heart of the phenomenon of slow growth and low inflation.

Fischer’s analysis leads to the conclusion that lower productivity, which has more or less halved from its post-war World War 2 norms in the last decade, is not amenable to lower interest rates but may be in itself a reason they stay in a historically low range.

If developed market central banks remain trapped at very low rates, and must become more forthright about the matter, we can expect emerging markets to get a material benefit. Yield-seeking investors will continue to pile into emerging market debt, as they have this year, desperate for a bit more compensation for the privilege of lending their money. Equity investors will come flocking too, attracted by lower valuations and less worried about a potential shock due to a rapid rise in interest rates.

All of this is quite new for emerging markets, just as it is for the rest of the world. As recently as the “taper tantrum” in 2013, emerging markets, especially those which need to attract a steady flow of capital, tended to be hurt quite badly when interest rates in developed markets, especially the U.S., looked poised to rise. Not only does tight money make it more difficult for them to attract capital, it also often goes hand in hand with an appreciating dollar, something that can leave dollar borrowers in emerging markets caught short.

A point worth noting is that since the 2008 crisis we have not had a proper emerging markets crisis, of the kind seen in Asia in the late 1990s, but rather distinct country-specific sell-offs, such as in Argentina after its default. The asset class, especially its financing ability, has been insulated by the generosity of developed market central banks.

Reaching For Yield, Or Jumping For It?

The real key will be for investors to become comfortable with the idea that the Fed buys into a secular stagnation argument and is prepared to make policy accordingly. In that respect Fed chief Janet Yellen’s speech this Friday at the Jackson Hole monetary policy conference may prove to be extremely important for emerging market assets.

If Yellen signals that rates may rise but will stay structurally lower than we previously thought likely, then emerging markets should rally, safe at least from a U.S. tightening.

And a secular stagnation argument, especially one that is based in part on demographics, has an immediate read-across for emerging markets, many of which, like China, are heading for their own demographic busts.

That may imply that the trend we’ve seen towards lower interest rates in the U.S., Europe and Japan will spread elsewhere.

“While the worry in developed markets is monetary policy exhaustion, most emerging market central banks have ample room to ease if needed as inflation is either below target or, where it is not, has peaked and is on its way down,” Joachim Fels, global economic advisor at fund manager PIMCO wrote in a note to clients.

“Most risky developed market assets are expensive, and investors have to come to grips with 'lower-for-longer' developed market rates. This, together with better emerging market fundamentals underway, suggests to me that the emerging market rally that started earlier this year has legs to run.”

Fund managers at Alliance Bernstein point out that the benchmark MSCI index of high-dividend emerging market stocks yields 5.6 percent annually and trades at nine times annual earnings. The equivalent developed market index has a yield of just 3.9 percent and trades at nearly 18 times annual earnings.

If we believe that U.S. and European stocks have gotten expensive due to low interest rates, then emerging markets may be next in line for the same somewhat artificial inflation.

None of this implies all will be easy for emerging market economies. Western demand for manufactured goods which allowed China, for example, to grow, will not be as strong, making the development of consumer-based domestic economies all the more important.

Still, if we have to face up to a low-growth, low-inflation future, emerging market assets will enjoy at least the first part of the journey.

Article Link To Reuters:

Evidence Points To Another Snowden At The NSA

By James Bamford
August 23, 2016

In the summer of 1972, state-of-the-art campaign spying consisted of amateur burglars, armed with duct tape and microphones, penetrating the headquarters of the Democratic National Committee. Today, amateur burglars have been replaced by cyberspies, who penetrated the DNC armed with computers and sophisticated hacking tools.

Where the Watergate burglars came away empty-handed and in handcuffs, the modern- day cyber thieves walked away with tens of thousands of sensitive political documents and are still unidentified.

Now, in the latest twist, hacking tools themselves, likely stolen from the National Security Agency, are on the digital auction block. Once again, the usual suspects start with Russia – though there seems little evidence backing up the accusation.

In addition, if Russia had stolen the hacking tools, it would be senseless to publicize the theft, let alone put them up for sale. It would be like a safecracker stealing the combination to a bank vault and putting it on Facebook. Once revealed, companies and governments would patch their firewalls, just as the bank would change its combination.

A more logical explanation could also be insider theft. If that’s the case, it’s one more reason to question the usefulness of an agency that secretly collects private information on millions of Americans but can’t keep its most valuable data from being stolen, or as it appears in this case, being used against us.

In what appeared more like a Saturday Night Live skit than an act of cybercrime, a group calling itself the Shadow Brokers put up for bid on the Internet what it called a “full state-sponsored toolset” of “cyberweapons.” “!!! Attention government sponsors of cyberwarfare and those who profit from it !!!! How much would you pay for enemies cyberweapons?” said the announcement.

The group said it was releasing some NSA files for “free” and promised “better” ones to the highest bidder. However, those with loosing bids “Lose Lose,” it said, because they would not receive their money back. And should the total sum of the bids, in bitcoins, reach the equivalent of half a billion dollars, the group would make the whole lot public.

While the “auction” seemed tongue in cheek, more like hacktivists than Russian high command, the sample documents were almost certainly real. The draft of a top-secret NSA manual for implanting offensive malware, released by Edward Snowden, contains code for a program codenamed SECONDDATE. That same 16-character string of numbers and characters is in the code released by the Shadow Brokers. The details from the manual were first released by The Intercept last Friday.

The authenticity of the NSA hacking tools were also confirmed by several ex-NSA officials who spoke to the media, including former members of the agency’s Tailored Access Operations (TAO) unit, the home of hacking specialists.

“Without a doubt, they’re the keys to the kingdom,” one former TAO employee told the Washington Post. “The stuff you’re talking about would undermine the security of a lot of major government and corporate networks both here and abroad.” Another added, “From what I saw, there was no doubt in my mind that it was legitimate.”

Like a bank robber’s tool kit for breaking into a vault, cyber exploitation tools, with code names like EPICBANANA and BUZZDIRECTION, are designed to break into computer systems and networks. Just as the bank robber hopes to find a crack in the vault that has never been discovered, hackers search for digital cracks, or “exploits,” in computer programs like Windows.

The most valuable are “zero day” exploits, meaning there have been zero days since Windows has discovered the “crack” in their programs. Through this crack, the hacker would be able to get into a system and exploit it, by stealing information, until the breach is eventually discovered and patched. According to the former NSA officials who viewed the Shadow Broker files, they contained a number of exploits, including zero-day exploits that the NSA often pays thousands of dollars for to private hacking groups.

The reasons given for laying the blame on Russia appear less convincing, however. “This is probably some Russian mind game, down to the bogus accent,” James A. Lewis, a computer expert at the Center for Strategic and International Studies, a Washington think tank, told the New York Times. Why the Russians would engage in such a mind game, he never explained.

Rather than the NSA hacking tools being snatched as a result of a sophisticated cyber operation by Russia or some other nation, it seems more likely that an employee stole them. Experts who have analyzed the files suspect that they date to October 2013, five months after Edward Snowden left his contractor position with the NSA and fled to Hong Kong carrying flash drives containing hundreds of thousands of pages of NSA documents.

So, if Snowden could not have stolen the hacking tools, there are indications that after he departed in May 2013, someone else did, possibly someone assigned to the agency’s highly sensitive Tailored Access Operations.

In December 2013, another highly secret NSA document quietly became public. It was a top secret TAO catalog of NSA hacking tools. Known as the Advanced Network Technology (ANT) catalog, it consisted of 50 pages of extensive pictures, diagrams and descriptions of tools for every kind of hack, mostly targeted at devices manufactured by U.S. companies, including Apple, Cisco, Dell and many others.

Like the hacking tools, the catalog used similar code names. Among the tools targeting Apple was one codenamed DROPOUTJEEP, which gives NSA total control of iPhones. "A software implant for the Apple iPhone,” says the ANT catalog, “includes the ability to remotely push/pull files from the device. SMS retrieval, contact-list retrieval, voicemail, geolocation, hot mic, camera capture, cell-tower location, etc.”

Another, codenamed IRATEMONK, is, “Technology that can infiltrate the firmware of hard drives manufactured by Maxtor, Samsung, Seagate and Western Digital.”

In 2014, I spent three days in Moscow with Snowden for a magazine assignment and a PBS documentary. During our on-the-record conversations, he would not talk about the ANT catalog, perhaps not wanting to bring attention to another possible NSA whistleblower.

I was, however, given unrestricted access to his cache of documents. These included both the entire British, or GCHQ, files and the entire NSA files.

But going through this archive using a sophisticated digital search tool, I could not find a single reference to the ANT catalog. This confirmed for me that it had likely been released by a second leaker. And if that person could have downloaded and removed the catalog of hacking tools, it’s also likely he or she could have also downloaded and removed the digital tools now being leaked.

In fact, a number of the same hacking implants and tools released by the Shadow Brokers are also in the ANT catalog, including those with codenames BANANAGLEE and JETPLOW. These can be used to create “a persistent back-door capability” into widely used Cisco firewalls, says the catalog.

Consisting of about 300 megabytes of code, the tools could easily and quickly be transferred to a flash drive. But unlike the catalog, the tools themselves – thousands of ones and zeros – would have been useless if leaked to a publication. This could be one reason why they have not emerged until now.

Enter WikiLeaks. Just two days after the first Shadow Brokers message, Julian Assange, the founder of WikiLeaks, sent out a Twitter message. “We had already obtained the archive of NSA cyberweapons released earlier today,” Assange wrote, “and will release our own pristine copy in due course.”

The month before, Assange was responsible for releasing the tens of thousands of hacked DNC emails that led to the resignation of the four top committee officials.

There also seems to be a link between Assange and the leaker who stole the ANT catalog, and the possible hacking tools. Among Assange’s close associates is Jacob Appelbaum, a celebrated hacktivist and the only publicly known WikiLeaks staffer in the United States – until he moved to Berlin in 2013 in what he called a “political exile” because of what he said was repeated harassment by U.S. law enforcement personnel. In 2010, a Rolling Stone magazine profile labeled him “the most dangerous man in cyberspace.”

In December 2013, Appelbaum was the first person to reveal the existence of the ANT catalog, at a conference in Berlin, without identifying the source. That same month he said he suspected the U.S. government of breaking into his Berlin apartment. He also co-wrote an article about the catalog in Der Spiegel. But again, he never named a source, which led many to assume, mistakenly, that it was Snowden.

In addition to WikiLeaks, for years Appelbaum worked for Tor, an organization focused on providing its customers anonymity on the Internet. But last May, he stepped down as a result of “serious, public allegations of sexual mistreatment” made by unnamed victims, according to a statement put out by Tor. Appelbaum has denied the charges.

Shortly thereafter, he turned his attention to Hillary Clinton. At a screening of a documentary about Assange in Cannes, France, Appelbaum accused her of having a grudge against him and Assange, and that if she were elected president, she would make their lives difficult. “It's a situation that will possibly get worse” if she is elected to the White House, he said, according to Yahoo News.

It was only a few months later that Assange released the 20,000 DNC emails. Intelligence agencies have again pointed the finger at Russia for hacking into these emails.

Yet there has been no explanation as to how Assange obtained them. He told NBC News, "There is no proof whatsoever" that he obtained the emails from Russian intelligence. Moscow has also denied involvement.

There are, of course, many sophisticated hackers in Russia, some with close government ties and some without. And planting false and misleading indicators in messages is an old trick. Now Assange has promised to release many more emails before the election, while apparently ignoring email involving Trump. (Trump opposition research was also stolen.)

In hacktivist style, and in what appears to be phony broken English, this new release of cyberweapons also seems to be targeting Clinton. It ends with a long and angry “final message” against “Wealthy Elites . . . breaking laws” but “Elites top friends announce, no law broken, no crime commit[ed]. . . Then Elites run for president. Why run for president when already control country like dictatorship?”

Then after what they call the “fun Cyber Weapons Auction” comes the real message, a serious threat. “We want make sure Wealthy Elite recognizes the danger [of] cyberweapons. Let us spell out for Elites. Your wealth and control depends on electronic data.” Now, they warned, they have control of the NSA’s cyber hacking tools that can take that wealth away. “You see attacks on banks and SWIFT [a worldwide network for financial services] in news. If electronic data go bye-bye where leave Wealthy Elites? Maybe with dumb cattle?”

Snowden’s leaks served a public good. He alerted Americans to illegal eavesdropping on their telephone records and other privacy violations, and Congress changed the law as a result. The DNC leaks exposed corrupt policies within the Democratic Party.

But we now have entered a period many have warned about, when NSA’s cyber weapons could be stolen like loose nukes and used against us. It opens the door to criminal hackers, cyber anarchists and hostile foreign governments that can use the tools to gain access to thousands of computers in order to steal data, plant malware and cause chaos.

It’s one more reason why NSA may prove to be one of Washington’s greatest liabilities rather than assets.

Article Link To Reuters:

Stephens: The New Dictators’ Club

An echo of the 1930s in the budding alliance of Russia, Iran, Turkey and China.

By Bret Stephens
The Wall Street Journal
August 23, 2016

In the fall of 1940 the governments of Japan, Italy and Germany—bitter enemies in World War I—signed the Tripartite Pact, pledging mutual support to “establish and maintain a new order of things” in Europe and Asia. Within five years, 70 million people would be killed in the effort to build, and then destroy, that new order.

The Pact was the culminating act in a series of nonaggression, friendship and neutrality treaties signed by the dictatorships of the day, sometimes to deceive anxious democracies but more often to divvy up the anticipated spoils of conquest. So it’s worth noting our new era of cooperation between dictatorships—and to think about where it could lead.

The era began in July 2015, when Iran’s Quds Force commander Qasem Soleimani paid a visit to Moscow to propose a plan to save Bashar Assad’s regime in Syria from collapse. Iran and Russia are not natural allies, even if they have a common client in Damascus. Iranians have bitter memories of the Soviet occupation of Afghanistan in the 1980s, and the Kremlin has never been fond of Islamists, even of the Shiite variety.

But what tipped the scales in favor of a joint operation was a shared desire to humiliate the U.S. and kick it out of the Middle East. “America’s long-term scheme for the region is detrimental to all nations and countries, particularly Iran and Russia, and it should be thwarted through vigilance and closer interaction,” Supreme Leader Ali Khamenei told Vladimir Putin during the Russian’s visit to Tehran last November.

Since then, Tehran has agreed to purchase $8 billion in top-shelf Russian weapons and is seeking Moscow’s help to build another 10 nuclear reactors—useful reminders of how the mullahs are spending their sanctions-relief windfall. The two countries have also conducted joint naval exercises in the Caspian Sea. Just last week Russia used Iranian air bases (a little too publicly for Tehran’s taste) to conduct bombing raids on Syria.

All this is happening as the nuclear deal was supposed to be nudging Iran in a more pro-American direction. It’s also happening as Moscow and Ankara are moving toward rapprochement and even a possible alliance, less than a year after the Turks shot down a Russian jet. Turkish Prime Minister Binali Yildirim allowed last week that Mr. Assad will remain in power for the foreseeable future, and Russian media outlets are touting the possibility that Russian jets might use the air base at Incirlik to bomb targets in Syria. That all but presumes U.S. withdrawal.

Would Turkish President Recep Tayyip Erdogan forfeit a U.S. alliance for the sake of a condominium with Russia, his country’s historic enemy? The real marvel is that it hasn’t happened already. Washington first proved useless to Ankara by failing to depose Mr. Assad. It’s again proving useless by failing to destroy Islamic State.

Barack Obama went out of his way to court Mr. Erdogan in his first term, but strongmen always have an instinctive contempt for feckless moralists. There’s a reason Turkish newspapers—all of them organs of the state—are whipping Turks into an anti-American frenzy with allegations that retired American generals were behind July’s failed coup. Mr. Erdogan is rapidly Iranianizing his regime on the Khomeini model. Turning the U.S. into a Great Satan is a necessary part of the process.

Then there’s China. On Monday, a Russian military spokesman announced that his country’s Pacific fleet would conduct joint operations with the Chinese navy in the South China Sea. This follows an apparently coordinated effort by the two navies in June to encroach Japanese territorial waters near the disputed Senkaku islands.

Mr. Putin’s relations with Beijing haven’t always been smooth—China is as adept at stealing Russian military technology as it is at hacking U.S. secrets, and the Russians don’t appreciate being treated as junior partners. But the drills in the South China Sea are another reminder that the Kremlin’s overriding foreign policy goal is to hobble and diminish the U.S. It’s a goal Beijing appears to share.

And why not? President Obama and his advisers continue to insist that the world has never been a better, safer, happier place than under their benign stewardship, meaning they no longer even register the continuous embarrassments of their foreign policy. The administration has become the Black Knight from “ Monty Python and the Holy Grail,” comically indifferent to his own dismemberment. Arms and legs all hacked off? “Tis but a scratch!”

Perhaps it’s in every strongman’s nature to seek and admire his political reflection wherever he finds it, whether it’s in a czar, an ayatollah, a sultan or a general secretary. Then again, what mainly unites the leaders of the new dictators’ club is the shared perception that they stand to lose very little in working against a country they detest and a president they contemn.

That’s a perception that is unlikely to change with the next U.S. administration. Readers searching for historical analogies with the present would be wrong to reach for the Tripartite Pact. But the ingredients from which that foul soup was made have now been laid on the table.

Article Link To The Wall Street Journal:

Millennials Aren’t Buying Homes. Good For Them.

By Catherine Rampell
The Washington Post
August 23, 2016

Millennial homeownership rates are way, way down. And believe it or not, that’s probably a good thing.

Across all age groups, the U.S. homeownership rate — at 62.9 percent — has now fallen to its lowest level in more than five decades. Among younger Americans only, things look especially paltry.

Homeownership rates among Americans under age 35 are barely more than half the national number, at just 34.1 percent. This too is a record low and about a fifth below its peak from the go-go years of the mid-2000s.

Young people, it seems, are finding themselves falling further and further away from the American dream of homeownership. As you’ve surely heard by now, not only are they not buying their own houses, but they’re also increasingly not even renting their own places. Instead, they’re returning to — or perhaps, never leaving — the nest.

Today about a third of 18-to-34-year-olds live with their parents. And for the first time since at least 1880, a greater share of this age group is bunking up with Mom and Dad than living in any other arrangement (such as dwelling alone, with a roommate, or with a spouse or romantic partner).

Things have gotten so dire that young adults have now replaced the elderly as the age group most likely to live in multigenerational households, according to the Pew Research Center.

Many colorful theories abound for millennials’ abandonment of homeownership. There are, for example, lots of think pieces about millennials’ purported love of the sharing economy and associated communitarian disavowal of all kinds of ownership — whether that be of houses, cars, bikes or even clothes.

But this explanation is wrong, at least when it comes to housing.

Recent survey data show that young people very much still aspire to buy a home, and moreover expect to do so one day. Among people ages 25 to 34 who rent, 93 percent say they are likely to buy a home someday, according to Fannie Mae’s National Housing Survey. That compares with just 81 percent of renters overall. The Demand Institute has found similar results.

So why are young people delaying getting that deed?

One, they’re putting off getting married, which many still see as a prerequisite to homeownership. (Though a large chunk of millennials, I should note, instead view homeownership as a prerequisite to marriage.)

Two — and this is part of the reason they’re delaying marriage, too — is that they’re poor.

Relative to earlier generations, today’s cohort of young people is making less money, given their levels of education; more indebted with student loans; more likely to be underemployedstruggling harder to sock away savings; and facing shallower income-growth trajectories.

In short: Millennials want to buy houses, but they simply can’t afford to.

And unlike during the mid-2000s, there’s no credit bubble to paper over their pathetic earnings so they can buy that humble bungalow or huge McMansion.

The reasons behind this homeownership slide are certainly nothing to celebrate. But the slide itself might be.

We as a society tend to overvalue homeownership, at least from a financial perspective. Were it not for the psychic and sentimental benefits of homeownership, it’s otherwise hard to imagine financial advisers counseling their clients to dump all their savings into a single, giant, highly illiquid asset.

Especially one that, on average, shows such meager returns.

Over the past century, home prices have risen an average of about 0.6 percent per year, according to data from economist and Nobel laureate Robert J. Shiller. Investing in an index fund has, on average, far higher returns than owning, even after you take into account the costs of renting and the tax subsidies for buying.

For millennials, a mass lifestyle shift away from owning and toward either renting or crashing with relatives could be especially advantageous. That’s because buying a house not only locks up your savings; it also locks you, the owner, into a specific geographic location.

For workers who are just figuring out their careers — and who, given the unlucky timing of their graduations, are more likely to have started out in low-paying positions — this seems especially wrongheaded. We want young workers to be mobile and to have as few frictions for job-hopping as possible. Changing jobs is, after all, the main way young people get raises and derail themselves from a poorly paying job track.

In other realms — such as health insurance — policymakers have been actively trying to reduce this so-called job lock. Millennials’ relative rootlessness, even if involuntary, may have the same effect, by making it easier for young workers to seize better job opportunities if and when they finally do arise.

Article Link To The Washington Post:

Hillary And Bill Clinton, Inc.

No other couple in American politics can offer what the Clintons have to sell.

By William McGurn
The Wall Street Journal
August 23, 2016

Many Clinton scandals ago, when Hillary Clinton was trying to explain how she’d parlayed a $1,000 stake in cattle futures into $100,000 in 10 months (by talking to other people and reading The Wall Street Journal) folks were skeptical. How, they asked, could a novice make so much money in so short a time in such a risky market?

Turns out Mrs. Clinton is a better learner than she’s given credit for, and the Clinton emails released by Judicial Watch on Monday prove it. The emails were pried out of the system by Freedom of Information Act lawsuits, and they suggest why the Clinton Foundation could be so attractive to the rich and mighty. When a donor had a problem that required the secretary of state’s attention, there was Doug Band—a Clinton Foundation exec—emailing Hillary’s top staffers at the State Department to ask a favor.

Take a June 23, 2009, email from Doug Band to Huma Abedin. In his email Mr. Band noted that the Crown Prince of Bahrain (a “good friend of ours”) was asking to see Mrs. Clinton. There are, of course, many ways to be a “good friend,” but one sure way would be to contribute between $50,000 and $100,000 to the Clinton Foundation, as the kingdom of Bahrain had done. Not to mention that the prince had also spent $32 million on a scholarship launched through the Clinton Global Initiative.

Ms. Abedin responded that the prince had sought a meeting through “normal” channels but had been shot down. Less than 48 hours after Mr. Band had asked her, Ms. Abedin reported that “we have reached out through official channels.” The meeting was on.

It isn’t the only favor Mr. Band requested. A month earlier, he had emailed Ms. Abedin to ask her help in getting an English soccer player a visa to the U.S. The player was supposed to come to Las Vegas for a team celebration, but he needed a special interview with the visa section at the American Embassy in London due to a “criminal charge” against him.

Because of this, the office of Sen. Barbara Boxer (D., Calif.) had refused to intervene. Mr. Band’s email made clear the request was on behalf of Casey Wasserman, a sports and entertainment exec who had contributed between $5 million and $10 million to the Clinton Foundation via the Wasserman Foundation.

These are only two of the many email exchanges in which Ms. Abedin was asked to intervene on behalf of some Clinton Foundation donor. These latest emails fit the same pattern as another batch released earlier this month, which showed Mr. Band asking Ms. Abedin and longtime Clinton aide Cheryl Mills for a meeting with a U.S. ambassador on behalf of a foreign businessman, as well as seeking a job for someone he described as “important to take care of.”

Judicial Watch President Tom Fitton sums it up this way: “It looks like the State Department was outsourcing its work to the Clinton Foundation.”

The model worked well for the Clintons, and some believe the Clinton Foundation will be copied by other pols, who will set up spouses or friends with foundations in hopes of attracting the big dollars that they can use to advance their brands, reward their friends and operate as a de facto permanent political campaign—all under the garb of charity.

No doubt some will try. But no one will be as successful as the Clintons have been.

The reason is simple. The Clintons are a business partnership with something that no other political couple has to sell. True, all ex-presidents hit the speaking circuit and have charities and foundations. Even so, the Clintons are unique in having an ex-president with a spouse in play, not only as secretary of state but as a possible president herself. If you are a foreign government or a wealthy businessmen, a donation to the Clinton Foundation might look like an excellent investment at just about any price.

Quid pro quo is notoriously hard to prove in such cases, and we will never know what (if anything) Mrs. Clinton or State delivered in return. We’re asked to believe that it was somehow an accident that so many of the millions former President Bill Clinton raked in from speaking fees would come from companies, countries or people who had business before a State Department run by his wife. The truth is, this was inevitable under the Clinton Foundation business model. And it beggars belief to think all these dollars were being given out without an expectation of something in return.

In the meantime we are back to a presidential campaign in which Donald Trump’s critics attack his business record by pointing out that the New York City real-estate mogul doesn’t even own many of the buildings that bear his name. What he’s selling is the Trump brand.

Then again, when it comes to dubious branding for profit, these latest emails make Mr. Trump look like a piker compared with Mrs. Clinton.

Article Link To The Wall Street Journal:

Clinton Says U.S. Presidential Election An 'Alternative Reality'

By Amanda Becker 
August 23, 2016

Democrat Hillary Clinton said on a late-night television show on Monday that sometimes she feels she is in an “alternative universe” in the U.S. presidential race against Republican Donald Trump.

“I do feel sometimes like this campaign has entered into an alternative universe,” Clinton said on ABC’s Jimmy Kimmel Live. “I have to step into the alternative reality, answer questions about am I alive, how much longer will I be alive.”

Clinton was for the first time responding to allegations made by Trump and some of his backers that she is suffering health problems that could be problematic in the White House should she win the Nov. 8 election.

Both Clinton and Trump have released notes from doctors declaring them physically fit for the presidency.

Kimmel asked Clinton to open a jar of pickles as a test of her strength. She did so successfully.

“This has become one of their themes. Take my pulse while I’m talking to you – make sure I’m alive,” Clinton said to Kimmel of the health rumors.

Clinton said that sometimes Trump’s remarks about her – such as a recent charge that President Barack Obama and Clinton co-founded the Islamic State, which he later said was sarcasm – go beyond personal attacks and become harmful to U.S. national security.

“There’s enough evidence now that when Trump talks the way he talks it actually helps the terrorists,” Clinton said. “I think it’s crazy, but I think it’s also harmful.”

Clinton said she had begun preparing for the three presidential debates scheduled in September and October.

“I want to take it seriously,” Clinton said. “But you’ve got to be prepared for, like wacky stuff that comes at you and I am drawing on my experience in elementary school.”

Clinton brushed off the possible release of an additional 14,900 emails that the FBI found when investigating her use of a private email server as secretary of state.

"My emails are so boring," Clinton said. "What's a few more?"

The U.S. State Department has already reviewed some 30,068 emails from her 2009-2013 tenure and released most of them, amounting to some 55,000 pages.

Article Link To Reuters:

It’s Colin Powell Vs. Hillary Clinton On Email

By Julian Hattem
The Hill
August 23, 2016

Republicans are seizing on reports of friction between Hillary Clinton and Colin Powell to bolster their case that the Democratic presidential nominee lied to the FBI about her handling of classified information.

Powell this weekend publicly reproached Clinton’s reported comments to the FBI naming him as the inspiration for her private email setup at the State Department.

“Her people have been trying to pin it on me,” Powell, who was secretary of State under President George W. Bush, told People at an event in the Hamptons this weekend. “The truth is she was using [her email setup] for a year before I sent her a memo telling her what I did.”

The episode raises “serious questions about whether she lied to the FBI” Republican National Committee Chairman Reince Priebus said in a statement on Monday.

“Clinton’s pattern of serial dishonesty is completely unacceptable for a candidate seeking the nation’s highest office, and her refusal to tell the truth and own up to her poor judgment is a preview of how she would conduct herself if elected president.”

According to The New York Times, Clinton told the FBI that Powell, who used a personal email account during his time at the State Department, had advised her to do the same early on in her tenure as President Obama's secretary of State. The account was reportedly contained in summaries of the 3 1/2-hour interview distributed to Congress last week. Allies of Clinton have feared that Republicans would selectively leak details of those summaries to paint an unflattering portrait of Clinton.

Author Joe Conason in a new book reports that Powell gave his advice to Clinton over dinner at the Washington home of another former secretary of State, Madeleine Albright, in June of 2009.

Powell’s office later claimed that he had no memory of the dinner, though aides acknowledged he did send Clinton a memo claiming that his email system had improved the State Department’s communications.

FBI Director James Comey testified before Congress last month that investigators had "no basis to conclude [Clinton] lied to the FBI.”

A bureau spokeswoman on Monday declined to comment further on the investigation.

Clinton’s campaign did not respond to an email request for comment.

For months, Clinton allies have pointed to the precedent set by Powell to explain her reliance on a private email server run out of her New York home. But neither Clinton nor her campaign has publicly credited him with inspiring her setup.

Getting into a public spat with Powell could hurt Clinton’s campaign.

Powell has yet to make an endorsement in the 2016 race, but people in his orbit, such as former Deputy Secretary of State Richard Armitage, have backed Clinton.

Powell, a registered Republican who has frequently been floated as a possible candidate for president, memorably endorsed Obama in both 2008 and 2012 and served as the chairman of the Joint Chiefs of Staff early in the term of Clinton’s husband, former President Bill Clinton.

He is one of the few high-profile national security figures to remain undecided in this year’s presidential contest, and has been conspicuous in not endorsing Clinton.

Republican presidential nominee Donald Trump ripped Clinton over the news, using it to bolster his case that voters should not trust her.

“Well, look, she's a liar,” Trump said on “Fox and Friends.”

“She lied about the email. She lied about Colin Powell. I saw that, he was not happy.”

“The whole thing is a scam with them,” he added. “Everything is a scam — like grifters.”

The line of attack is targeting a well-worn vulnerability of Clinton’s: that she is dishonest and untrustworthy. The Democratic nominee has persistently been troubled by claims that she is deceitful, which have only been exacerbated by repeated focus on her email setup.

That weakness was on display Monday amid revelations that the FBI had discovered roughly 15,000 previously undisclosed documents sent to or from Clinton while she was in office. Many of those messages and attachments are expected to be released to the public this fall, though it’s unclear how many will be revealed before Election Day.

Additionally, emails released by conservative watchdog Judicial Watch appeared to show the private email system being used to secure special access for people connected with the Clinton family’s charitable foundation.

Both Powell and Clinton used private email accounts during their times at the State Department, earning them stern reprimands from an inspector general earlier this year.

The two secretaries “used personal email accounts to conduct official business” without adequately preserving their records, the watchdog concluded in May, in violation of official policies.

Yet the two cases contain stark differences, as fact-checkers have pointed out.

In his State Department office, Powell used a personal AOL email account and a laptop operating on a private line to message his assistants and diplomats around the globe.

Clinton, meanwhile, erected a series of servers in the basement of her home, on which she operated a custom-built email system with the address clintonemail.com.

And four years had passed between Powell’s tenure and Clinton’s.

In the interim, the State Department had explicitly warned employees about the need to preserve email records.

It had also grown more aware of the cybersecurity risks of not using a government-sanctioned email account. Technology and digital security policies “were very fluid in Secretary Powell’s tenure,” the watchdog report said in May, and “the department was not aware at the time of the magnitude of the security risk associated with information technology.”

Article Link To The Hill:

The Politics Of Negative Interest Rates

By Yanis Varoufakis
Project Syndicate
August 23, 2016

Objects of desire come at a cost. Only bad things, like toxic waste, have a negative price, the equivalent of a fee payable to anyone willing to make them disappear. Does this mean that negative interest rates embody a new perspective on money – that it has gone “bad”?

In market economies, money is the measure of the value of goods and services. And the interest rate is the price of that metric – of money itself. When the price is zero, it makes no difference whether money is kept under a mattress or lent, because there is no cost to holding or borrowing cash.

But how can the price of money – which, after all, makes the world go round, or, as Karl Marx put it, “transforms all my incapacities into their contrary” – be zero? And how can it possibly ever become negative, as it now is in much of the global economy, with the world’s moneyed people “bribing” governments to borrow from them more than $5.5 trillion?

The answer can only be of a type that economists loathe: philosophical, political, and thus irreducible to neat positivist explanation. In other words, the answer must concern the essence of money.

In a farmers’ market, sellers with many unsold potatoes start dropping the price until a level is reached (possibly very low, but still positive) at which all of the potatoes are bought. In contrast, since the 2008 global financial crisis, every time the price of money has been reduced, demand for it falls and excess savings rise. Clearly, money is not like potatoes or any other well-defined “thing.”

To understand how money can be our societies’ supreme good while fetching a negative price, it helps to start with the realization that, unlike potatoes, money has no intrinsic private value. Its utility comes from what its holder can make others do. Money, to recall Lenin’s definition of politics, is about “who does what to whom.”

Imagine you are an entrepreneur with money in the bank, or have a bank eager to lend large sums to invest in your business. You spend sleepless nights wondering whether you should invest in a new product – that is, whether you should exploit your access to money to cause an array of others to work on your behalf. In our current Great Deflation, what worries you most is your customers’ future purchasing power and sentiment. Will they be able and willing to buy your new product at high enough prices and quantities?

Suppose that, sleep-deprived, you then switch on the radio or TV only to hear that US Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi are considering reducing interest rates further. Will you rejoice at the prospect that your financing costs will fall? Will you be motivated to invest your own money now that it earns lower (perhaps even negative) interest?

No and no. Your reaction is most likely to be one of alarm: “Oh, my God! If Janet and Mario are considering another interest-rate cut, they must have good reason to believe that demand will remain low!” So you abandon your investment plan. “Better to borrow money at almost no cost,” you think, “and buy back a few more of my company’s shares, boost their price, earn more on the stock exchange, and bank the profits for the rainy days that are coming.”

And so it is that the price of money falls, even as the supply of it burgeons. Central bankers who never predicted the Great Deflation are now busily trying to find a way out with economic and econometric models that could never explain it, let alone point to solutions. Unwilling to question the political dogma that central banks must be apolitical, they refuse to think of money as more than a “thing.” And so they continue the search for a technocratic fix to a problem crying out for a philosophically astute political solution.

It’s a futile quest. Once the price of money (interest rates) hit zero, central banks tried buying mountains of public and private debt from commercial banks to give them an incentive to lend freely. The ECB went so far as to pay banks to lend to business while, at the same time, punishing them for not lending (via negative interest rates for excess reserves).

But bankers and businesses, viewing these measures as desperate responses to self-fulfilling deflationary expectations, went on an investment strike, while using the central-bank money to inflate the prices of their own assets (stocks, art, real estate, and so forth). This did nothing to defeat the Great Deflation; it only made the rich richer, an outcome that somehow reinforced central bankers’ belief in central bank independence.

Not all central bankers, thankfully, are incapable of responding creatively to the Great Deflation. Andy Haldane, Chief Economist at the Bank of England, has courageously suggested that all money should become digital, which would permit real-time negative interest rates to be imposed on all of us, thus forcing everyone to spend at once. John Williams, President and CEO of the Federal Reserve Bank of San Francisco, recently argued that the Great Deflation could be beaten only by targeting the price level and nominal national income simultaneously – a New Deal-like approach featuring joint action by the Fed and the government.

What separates these central bankers from the herd is their readiness to jettison the myth of independent monetary policy, to accept that money is the most political of commodities, to challenge the sanctity of cash, and to concede that defeating the Great Deflation requires a progressive policy agenda.

Simone Weil once said, “If you want to know what a man is really like, take notice of how he acts when he loses money.” Likewise, if we want to know what our societies are really like, we must take notice of how they react to negative interest rates.

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Republicans Need To Shut Down Trump’s Election Fraud Claims

By Richard Cohen 
The Washington Post
August 23, 2016

At the time Germany signed the armistice ending World War I, no battles had been fought on its territory and no foreign army had invaded it. The German people suffered greatly — food shortages and the like — but defeat to many did not seem to come from the battlefield in front but from traitorous civilians behind. This came to be known as the “stab in the back” myth. The Kaiser believed it, Hitler used it, and now Donald Trump — not even waiting for defeat — has revived it. If he loses in November, it will be because the election was stolen from him.

Both Kaiser Wilhelm II and Adolf Hitler blamed the Jews for Germany’s defeat — even, apparently, those Jews who had fought and died for the Fatherland. Trump, no anti-Semite but otherwise deranged by the conspiracy bug, has been nowhere near as specific. He does know, though, that when and if he loses, it’s on account of the election — in the words of one of his campaign spots — being “rigged.”

“The only way we can lose, in my opinion...is if cheating goes on,” he said. He was speaking in Pennsylvania and referring to Pennsylvania, where he trails Hillary Clinton by an average of nine points in the polls. But those and, indeed, any polls showing Trump falling behind are now themselves being questioned — although when he was ahead, he adored them. Once again, the diabolical hand of the mainstream media and the Republican establishment is supposedly at work. The polls are skewed. Trump is actually ahead. Something about UFOs is bound to come up next.

As a presidential candidate, Trump is an aberration, with a background (TV show), personal characteristics (immense self-regard) and talents (a demagogic speaking style) that are unique to him. Yet, his pernicious claim that he can lose the election only if it is stolen from him builds on a general Republican obsession with election fraud. For years now, the GOP has used the specter of cheating at the polls to try to suppress the black vote. The courts, more conservative than the GOP when it comes to conserving constitutional rights, have usually intervened, but the insistent whisper campaign has done vast damage.

We are living now with the consequences of squalid decisions made years ago by opportunistic politicians — most notably Richard Nixon, whose Southern strategy welcomed racist pathogens into the Republican Party. They have taken hold. What was once the party of Lincoln has lost not only its bearings but also its very soul. Now it has a candidate who has denied the legitimacy of the nation’s first black president by promoting the racist birther movement and openly campaigns as a bigot — anti-Muslim and anti-immigrant. He has no policies, merely resentments.

It is serious business to question the legitimacy of elections. What happens at the polls is at the very heart of our political system. It is not, I grant you, a perfect system, but we know how to do elections and, when they are over, we abide by the results. Many Americans believed that Al Gore beat George W. Bush, but they — not to mention Gore himself — accepted the outcome.

Trump, like a kid playing with matches, can start a conflagration. The GOP has already done considerable damage to the faith Americans once had in their government. It is time for the party to say, “Enough!” Republicans who have been on the fence about Trump — party leaders such as the occasionally principled Reince Priebus — have got to call a halt to this nonsense. Their enduring concern is too narrow. They should worry more about their country and less about their party.

In Germany, the stab-in-the-back myth helped destabilize the postwar government. It became a right-wing trope, prominently advocated by the exiled emperor, who identified the culprit as “the tribe of Judah ” and who advocated that “these parasites [be] destroyed and exterminated from German soil!” Hitler, never slow on the uptake, did just that. In due course, he took over a government that never quite recovered from charges that it had sold out to Germany’s enemies.

Trump has identified no one and probably would rather run a media empire than the federal government. But his amorphous charges of cheating, of fraud, of rigged elections threaten to delegitimize not just a Clinton presidency but also a system that not only works, but works well. It is not Clinton or her supporters who are the culprits here, it is cowed Republicans instead. Their silence is the dagger.

Article Link To The Washington Post: