Friday, May 19, 2017

Futures Point To A Higher Open As Wall Street Takes A Breather From Trump Worries

By Silvia Amaro
May 19, 2017

U.S. stock index futures pointed to a higher open on Friday morning as concerns over the stability of the U.S. administration ease.

The Dow Jones industrial average recovered on Thursday from its worst day of 2017, gaining around 55 points.

On the earnings front, Campbell Soup, Deere and Foot Locker are scheduled to report before the bell.

In Europe, the pan-European Stoxx-600 index was around 0.36 percent higher on Friday morning. In Asia, the Shanghai Composite in China closed 0.03 percent higher, while the Nikkei in Japan closed 0.19 percent higher.

In oil markets, Brent crude traded at around $53.18 a barrel on Friday morning, up 1.3 percent, while U.S. crude was around $49.99 a barrel, also up 1.3 percent.

Article Link To CNBC:

OPEC Panel Looking At Deepening, Extending Oil Cuts

By Alex Lawler and Rania El Gamal
May 19, 2017

An OPEC panel reviewing scenarios for next week's policy-setting meeting is looking at the option of deepening and extending an OPEC-led deal to reduce oil output, OPEC sources said on Friday.

OPEC's national representatives - officials representing the 13 member countries - plus officials from OPEC's Vienna secretariat met on Wednesday and Thursday to discuss the market.

The meeting of the Economic Commission Board was scheduled to finish on Thursday but will conclude later on Friday, two OPEC sources said.

"We have not agreed on final scenarios," said one of the sources.

A second source said a deeper cut in output was an option depending on estimated growth in supply from non-OPEC producers and U.S. shale oil.

OPEC kingpin Saudi Arabia and non-member Russia, the world's top two oil producers, have agreed on the need to keep the current cut in place until March 2018.

The meeting precedes a policy-setting gathering of OPEC and non-OPEC oil ministers on May 25 to decide whether to extend beyond June 30 their deal to reduce output.

The Organization of the Petroleum Exporting Countries, Russia and other producers originally agreed to cut production by 1.8 million barrels per day for six months from Jan. 1 to support the market.

Oil prices, trading at around $53 a barrel, have gained support from reduced output but high inventories and rising supply from producers not participating in the accord have limited the rally, pressing the case for extending the curbs.

A technical meeting on Friday of OPEC and non-OPEC countries participating in the supply cut was not expected to result in any decision.

"Today's meeting is just informative, nothing major," an OPEC source said.

Brent crude was up 63 cents at $53.14 per barrel, after climbing to $53.20, its highest since April 21. U.S. benchmark crude was up 61 cents at $49.96 a barrel.

Article Link To Reuters:

Putin's Ex-Wife Linked To Multi-Million-Dollar Property Business

May 19, 2017

The former wife of Russian president Vladimir Putin helped create and now supports a foundation that owns a historic Moscow property generating millions of dollars from tenants, a Reuters examination of property records has found.

The building was renovated with help from associates of Putin, and the rental income is paid to a private company owned by a person whose name is the same as the maiden name of Putin's former wife, corporate records show.

The rent comes from Volkonsky House in central Moscow, which was an aristocrat's home in pre-Soviet times and is now owned by The Center for the Development of Inter-personal Communications (CDIC). Lyudmila Putina helped set up the non-commercial foundation, according to a report in state newspaper Rossiiskaya Gazeta and two sources who worked with the center. Lyudmila was Putin's wife from 1983 until their divorce, which was announced in 2013.

The foundation was created in 2002, and in September 2006 Rossiiskaya Gazeta described Lyudmila as a "trustee" of the organization. In an interview with the newspaper that year, she used the term "we" when discussing the foundation, and three sources currently familiar with the foundation's work said Lyudmila supports a literary prize and publishing arm that the foundation runs.

The CDIC has offices in Volkonsky House, but most of the building is let out to tenants, including two big state banks, documents show.

The tenants pay rent to a company called Meridian, which is 99 per cent owned by a company called Intererservis, corporate and property records reviewed by Reuters in early May showed. Intererservis, according to a state register of corporate entities, has been wholly owned since 2014 by a woman called Lyudmila Alexandrovna Shkrebnyova – which is the maiden name of Putin's former wife.

Reuters was unable to find documents confirming that Shkrebnyova and Putin's ex-wife are the same person. But other connections, besides the name, point to the former first lady and the owner of Intererservis being the same person. A previous general director of Intererversis was Olga Alexandrovna Tsomayeva. Several Russian media reports refer to her as the sister of Putin's former wife. Tsomayeva could not be reached for comment.

In addition, the other 1 percent of Meridian is owned by Tatiana Shestakova, who was the wife of Vasily Shestakov, an old friend and judo sparring partner of Putin, until the Shestakovs divorced in 2013. Shestakova, who also helped create the CDIC, according to the state registry of corporate entities, could not be reached for comment.

The Kremlin property department supervised the renovation work on the Volkonsky House in Moscow's Vozdvizhenka Street, according to rental documents reviewed by Reuters, even though the building no longer belonged to the state at the time.

A source involved in the renovation said Lyudmila Putina, then still the president's wife, visited Volkonsky House to inspect the work. "We all knew that the (Kremlin property) department was constantly overseeing the process," said the source, who spoke to Reuters on condition of anonymity. "When Mrs Putin made an inspection visit, they immediately closed down the whole of Vozdvizhenka Street."

The Russian bank VTB, one of the current tenants in Volkonsky House, alone pays more than $2 million in annual rent, according to a tender document posted on a government website in 2015.

Reuters was unable to establish the total income Meridian receives from renting out space in the Moscow property or what it pays to the CDIC foundation. The company's accounts for 2015 show revenues of 225 million rubles ($3.89 million), but do not disclose where the money goes.

Reuters sought comment from Meridian and the CDIC, via letters, telephone calls and visits, but received no reply. The Kremlin press service did not respond to questions about the president's former wife.

The arrangements appear to fit a pattern in Putin's Russia, whereby people close to the president benefit from contracts, loans, grants or assets from state enterprises or entities closely linked to the Kremlin. Reuters has previously reported how Putin's son-in-law, Kirill Shamalov, became a billionaire after marrying a daughter of the president by acquiring a large stake in a leading Russian gas and petrochemicals company. Reuters also reported how Shamalov acquired a substantial property in Biarritz, France, from a close associate of Putin.

Artur Ocheretny, described in Russian media as Shkrebnyova's new husband since 2015, is the chairman of the management board of the CDIC. In 2014, after a low-profile career running a seafood business and an event-organizing company, he too became the owner of an Art Deco villa in a suburb of Biarritz, according to local sources. His villa is estimated by estate agents to be worth about 6 million euros.

Ocheretny did not respond to a request for comment passed to him via the CDIC.

Helpful Friends

The building at 9 Vozdvizhenka Street is known as the Volkonsky House after its former owner General Nikolai Volkonsky, the grandfather of author Leo Tolstoy. In the 20th century, Sergei Yesenin, a popular poet, wrote some of his works there.

This historic site was later owned by the Russian Foreign Ministry, according to a 1992 presidential decree signed by Putin's predecessor. By 2005, property records show, it had passed to a body called the Center for the Development of the Russian Language, which later changed its name to the Center for the Development of Inter-personal Communications.

Reuters was unable to establish on what terms the language center acquired the building. The agency that handles state property, Rosimushchestvo, did not respond to Reuters questions about the building.

The property was in need of renovation, and around 2005 major refurbishment was carried out. The president's allies stepped in to help. The Konstantinovsky Foundation, which was set up soon after Putin became president to restore the Konstantinovsky Palace near Putin's native St Petersburg, provided financial help, according to its website. The president often uses the palace to host foreign leaders.

Vladimir Kozhin, who from 2000 until 2014 was head of the Kremlin property department, was on the board of the Konstaninovsky Foundation at the time the renovation work was carried out on Volkonsky House. Kozhin remains on the board, which has at least one other associate of Putin on it. Neither the Konstantinovsky Foundation nor Kozhin, who is now a presidential aide, responded to requests for comment.

Yelena Krylova, a spokeswoman for the Kremlin property department, said she had no information about the department having been involved in the renovation.

The first phase of work was completed by 2005, according to property documents, and later an extra floor was added. Natalia Samover, a historian who campaigned against the addition, told Reuters: "The building has lost its historical appearance. We no longer have the Volkonsky House, we have an eyesore half a kilometer from the Kremlin."

Volkonsky House now has 5,288 square meters of floor space available for rent, according to the state property register – an area slightly larger than the White House in Washington D.C.

Valuable Tenants

Foundations such as the CDIC can be created for "social, charitable, cultural, educational, scientific and management objectives," according to the Russian Justice Ministry. They can carry out entrepreneurial activity so long as it serves the purpose for which a foundation was created.

For an undisclosed amount, the CDIC lets most of Volkonsky House to Meridian, which sublets out space in the property. VTB, one of Russia's largest banks, rents 3,011 square meters, according to the 2015 tender document posted on the state procurement website. That document gives the value of the contract as 584 million rubles over a five year period, or $2.02 million per year.

Asked to comment, VTB said in a statement: "We rent these premises for the needs of the retail and corporate businesses of VTB group."

Other tenants include state lender Sberbank; the Severstroygroup construction company, which has won defense ministry contracts; a travel agency; a sushi restaurant; and a Burger King outlet. Sberbank said it had rented space at market rates as part of its branch strategy; Severstroygroup did not respond to requests for comment.

Knight Frank, an agency that specializes in high-end real estate, said that current market rates in the building were about $600 per square meter per year. If all the leasable space in the building were let at that rate, it would generate annual revenue of $3.18 million.

Meridian's income does not appear to go to its main owner, Intererservis, which reported revenues in 2015 of just 2.4 million rubles ($41,478) and a net profit of 1.76 million rubles ($30,417).

The CDIC's most recent available accounts show that in 2015 its income from all sources was 343,350,000 rubles ($5.93 million). It was not clear what all those sources were.

In 2015 the CDIC spent 262,317,000 rubles ($4.53 million), according to the accounts, of which 3.4 percent was spent on social and charitable help, 6.5 percent on holding conferences and seminars, 22 percent on administrative costs and 29 percent on "other activities." The remaining 39 percent was spent on acquiring fixed assets, stock and other property, and on "miscellaneous" items.

The CDIC did not respond to questions about the sources of its income and how it spent its money.

The Justice Ministry said the foundation had not made annual reports on its activities – as opposed to its financial accounts – publicly available, despite being required to do so by law. The ministry said the foundation had therefore been issued with a warning.

Article Link To Reuters:

Oil Prices Climb On Hopes Output Cuts Will Be Extended

By Aaron Sheldrick and Henning Gloystein 
May 19, 2017

Oil futures rose on Friday to the highest in nearly a month on growing optimism that big producing countries will extend output cuts to curb a persistent glut in crude, with key benchmarks heading for a second week of gains.

Brent crude LCOc1 was up 28 cents, or 0.5 percent, at $52.79. The contract earlier rose to the highest since April 21 and is on track for a nearly 4 percent climb this week, its second week of gains.

U.S. crude oil CLc1 was up 29 cents, or 0.6 percent, at $49.64 a barrel, highest since April 26. The contract is also heading for a weekly increase of almost 4 percent.

Since the beginning of March, crude prices have swung from over $56 a barrel to under $47 as market participants were divided over the impact of rising output from the United States versus production cuts by the Organization of Petroleum Exporting Countries (OPEC) and other oil producers, including Russia.

But market watchers are growing more confident that OPEC, Russia and other big producers will extend cuts of almost 1.8 million barrels per day (bpd) until the end of March 2018. U.S. producers are not party to any agreements capping production.

As with other markets, concerns about U.S. President Donald Trump's agenda amidst investigations in Washington faded into the background.

"With the political turmoil easing in the U.S. overnight, the market will return to the fundamental drivers," ANZ said in a research note.

"This should see oil prices remain well bid, as OPEC continues to talk up a continuation of the production cut agreement," it said.

On May 25, leaders from OPEC and other producing countries will meet in Vienna to decide on output policy.

Rosneft, the largest oil producer in Russia, will meet agreements with OPEC on oil output reductions, the company's chief executive told reporters in Berlin on Thursday.

Still, there are signs that Saudi Arabia, OPEC's largest producer, is keeping markets well supplied.

Crude oil exports from Saudi Arabia rose by 275,000 barrels a day in March from February and stockpiles rose, official data showed late on Thursday.

"The battle between bulls and bears is raging on oil," said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader.

"On the one hand, you have traders who worry about the efficacy of OPEC's oil cuts on inventory levels. On the other, there are those who are focused on the real drawdowns that have started to occur in U.S. oil stocks over the past month or so."

Article Link To Reuters:

Full Tanks And Tankers: A Stubborn Oil Glut Despite OPEC Cuts

By Catherine Ngai 
May 19, 2017

After the first OPEC oil production cut in eight years took effect in January, oil traders from Houston to Singapore started emptying millions of barrels of crude from storage tanks.

Investors hailed the drawdowns as the beginning of the end of a two-year supply glut - raising hopes for steadily rising per-barrel prices.

It hasn't worked out that way.

Now, many of those same storage tanks are filling back up or draining more slowly than investors and oil firms had expected, according to global inventory estimates and more than a dozen oil traders and shipping sources who told Reuters about storage in facilities that do not make their oil volumes public.

The stalled drawdowns shed light on the broader challenge facing OPEC - the Organization of the Petroleum Exporting Countries - as it struggles to steer the industry out of the downturn caused by oversupply. With U.S. shale oil production surging, inventories remain stubbornly high and prices appear stuck in the low-$50s per-barrel range.

The market has not strengthened enough to drain many major storage facilities around the globe - which OPEC oil ministers had hoped would be a first step toward rebalancing what has been a buyer's market since late 2014.

Estimated inventories in industrialized nations totaled 3.025 billion barrels at the end of March - about 300 million barrels above the five-year average, according to the International Energy Agency’s latest monthly report.

Preliminary April data indicated stocks would rise further, the IEA said. Crude stocks stood at a record 1.235 billion barrels.

OPEC and other non-OPEC nations - most notably Russia - are now widely expected to extend production cuts for another nine months, through March 2018.

The ongoing struggle to thin supplies has forced economists to cut their oil price forecasts. Bank of America, for instance, last week lowered its 2017 target for Brent crude LCOc1 by $7 a barrel to $54.

During the two-year price war started by OPEC, about half a billion barrels of crude and refined products flowed into storage facilities as oil prices hit lows of less than $30 a barrel in early 2016.

Much of the inventory build-up came as traders started using storage to make easy money on the widening spread between rock-bottom spot oil prices and substantially higher prices for contracts to deliver the oil in future months.

That price spread - a market structure known as contango - allowed traders to profit even after they paid for expensive storage in facilities such as the Louisiana Offshore Oil Port (LOOP) - the only deep-water U.S. oil port and a major conduit for crude imports - or supertankers parked offshore in Singapore.

Although the storage trade has been less profitable since the OPEC production cuts, much of that oil remains in tanks, said Chris Bake, an executive committee member at Vitol, the world's largest independent trader, during an industry conference last week in London.

"This 550 million barrel-plus inventory build of crude and products that started in 2014 is still very much there," he said. "How much is going to come out? That is an ongoing debate among all of us."

"Clogged With Oil"

From the Malacca Straits in Asia to the ports of Northern Europe and the Gulf of Mexico, drawdowns of global inventories have slowed or even reversed.

In the Amsterdam-Rotterdam-Antwerp (ARA) region – one of the most expensive areas in Europe to store oil and the benchmark pricing point for fuel - crude is starting to flow back into storage because refiners are "clogged" with oil, an industry source handling deals in that region told Reuters.

Refined fuel inventories have also jumped suddenly, with gasoil in tanks in the ARA hub rising to an eight-month high earlier this month, according to Dutch consultancy PJK International. Gasoil includes jet fuel, diesel and heating oil.

At one of the world's largest oil storage facilities - on the shores of Saldanha Bay in South Africa - millions of barrels were sold in recent months, traders told Reuters.

But more cargoes are flowing right back into its tanks, which can hold 45 million barrels, as sellers struggle to find refiners to buy freshly loaded oil, the traders said.

In the Houston region, stored oil stocks touched record levels at the end of March, according to energy information provider Genscape.

The state of inventories appears more mixed in Asia.

In China, the world's second-largest oil consumer behind the United States, commercial crude stocks hit their lowest level in four years in March, according to the government-controlled Xinhua News Agency. But in nearby South Korea, inventories were near a record, according to the Korea National Oil Corp.

Slow Progress

While global inventories remain bloated, there are some signs that the OPEC cuts have dented supplies.

Recent data from the U.S. Energy Information Administration showed that nationwide stocks started draining in April this year - the first decrease for that month since 1999.

Declining costs for storage is another indication that traders and oil companies are putting less oil in storage than at the height of the price war.

At the largest U.S. storage facility at Cushing, Oklahoma, storage tanks costs about 35 cents a barrel per month, traders say, compared nearly 50 cents a year ago.

Parking oil in a supertanker off the shore of Singapore, Asia's refining hub, costs anywhere from 30 to 40 cents a barrel per month, down from 50 to 80 cents just a few months ago.

The futures contract LOSc1 for oil storage at the LOOP, off Louisiana's coast, dropped to about 24 cents per barrel recently, one of the lowest prices this year.

Still, the patchy evidence of draining storage has fallen far short of what investors expected after OPEC and non-OPEC nations agreed on production cuts last November.

"People were impatient and thought we'd start drawing 10 million barrels a day since the first week of January," said Amrita Sen, chief oil analyst at Energy Aspects. "We're still in excess, and there's lots of inventory around."

Article Link To Reuters:

Americans Die When They Have To Work At Being Healthy

Diseases treatable by vaccines aren’t the threat they once were, but diabetes, hypertension, and even having a baby are still dangerous.

By Deena Shanker
May 19, 2017

All over the world, people are dying from common diseases with well-known treatments.

The newly created Healthcare Access and Quality Index shows how well countries use their healthcare systems to stop preventable deaths. The inaugural version of the index finds huge disparities both between countries, and within them. Access to quality healthcare, the study shows definitively, is often the difference between life or death. For Americans, the results aren’t heartening.

“What we have found about health care access and quality is disturbing,” said Dr. Christopher Murray, director of the Institute for Health Metrics and Evaluation at the University of Washington and senior author of the study, published in The Lancet. “Having a strong economy does not guarantee good healthcare.”

At the top of the list for countries with high socio-demographic indicators, Andorra—that tiny little principality wedged between France and Spain—scored a 95 out of 100. Nordic countries—Iceland (94), Sweden (90), and Norway (90)—also scored high on the list. Australia, a country with publicly funded and universal healthcare recently praised by U.S. President Donald Trump, also scored a 90. America, meanwhile, scored only 81, putting it behind countries such as France, Canada, and the UK, but ahead of Saudi Arabia and Russia. 

“America’s ranking is an embarrassment, especially considering the U.S. spends more than $9,000 per person on health care annually, more than any other country,” Murray said. “Anyone with a stake in the current health care debate, including elected officials at the federal, state, and local levels, should take a look at where the U.S. is falling short.”

Not all diseases kill Americans with equal power, however. Despite recent skepticism about the efficacy of vaccines, diseases that they prevent—like tetanus and measles—kill significantly fewer Americans than those that require ongoing prevention and care, like hypertension and diabetes (both of which kill far fewer people in Andorra). Meanwhile, maternal and neonatal disorders are also much more likely to kill Americans than people elsewhere. 

Scores were assessed on a scale of 1-100. Researchers chose 32 causes of death preventable through access to high-quality healthcare listed by co-authors Professor Martin McKee and Dr. Ellen Nolte, and then mapped those against data from the Global Burden of Diseases, Injuries, and Risk Factors Study. The GBD, as it’s called, is a widely cited, worldwide observational epidemiological study that’s been examining mortality trends from 1990 to the present.

The researchers then adjusted their analysis to account for variations in death rates not easily attributable to lack of personal healthcare, and measures of personal healthcare access and quality. The rankings were separated to draw comparisons between countries of similar socio-demographic make-ups.

The study, funded by the Bill & Melinda Gates Foundation, lists a number of limitations, including any that are applicable to the larger GBD study, and that not all countries have reliable statistics. They note that “achieving 100 does not mean that additional improvement is not possible.”

Article Link To Bloomberg:

Investors Think Twice About Deals With Trumps And Kushners

“They’re so worried about the appearance of influence.”

By Caleb Melby
Bloomberg Businessweek
May 19, 2017

Four weeks after President Trump took office, his sons held a red-carpet event for their Trump International Golf Club in Dubai. Guests munched on quail eggs, tuna tartare, and spring rolls as a string orchestra played Vivaldi. Meanwhile, the Trump International Hotel in Washington was doing brisk business with foreign diplomats, and Trump’s Mar-a-Lago Club in Florida doubled its membership fee. “The stars have all aligned,” Eric Trump told the New York Times, ignoring concerns over conflicts of interest. “I think our brand is the hottest it has ever been.”

But in the four months since the deal-seeking Trumps took over the White House, another narrative has become evident. Rather than jumping at the chance to do deals with the Trumps, many officials and private businesses are avoiding partnering with them precisely because of the scrutiny produced by their position. “Everyone was so worried about influence,” says David Scott Sloan, co-chair of Holland & Knight LLP’s national private wealth practice. “Now they’re so worried about the appearance of influence that they’re not doing business.”

Among the list of lost deals is the Trump Organization’s plan for a Dallas hotel that fell apart amid revelations that its proposed partner, Mike Sarimsakci, has a controversial history and Middle Eastern investors. Previous Trump partners have had questionable track records, but the fallout tended to come after contracts were signed. Deutsche Bank AG has had trouble restructuring more than $300 million in debt personally guaranteed by the president. In the past three months, the real estate company of the family of Jared Kushner, Trump’s son-in-law, has seen talks for three major projects quashed amid media scrutiny.

In May, Kushner’s sister Nicole Meyer began a four-city tour of investment conferences in China hoping to raise tens of millions of dollars for a Jersey City project. Journalists highlighted the entanglement risks, prompting Kushner Cos. to apologize and then withdraw its employees from the tour, though third parties continued without them. So far, no one in China has invested in the project.

Earlier, the Kushners’ plans to redevelop their troubled Manhattan office tower at 666 Fifth Ave. with China’s Anbang Insurance Group Co. fell apart amid reports that a refinancing agreement included unusually favorable terms for the family. Deals in liberal-leaning Jersey City have been complicated as Charles Kushner, Jared’s ex-convict father and chairman of Kushner Cos., has seen his goodwill eroded by Trump’s anti-immigrant politics. “From the standpoint of risk management, this is an administration leaping from one scandal to the next, and they tend to be getting worse,” says James Cox, who teaches corporate and securities law at Duke University. As the chaotic first months of the administration have unfolded, Cox says the incentive to do business with the families has diminished. “You think, Maybe there’s just not enough money in it for us. You wonder what this guy will do in his next tweet that could actually jeopardize you.”

Jersey City Mayor Steven Fulop was once a Kushner family ally. But he recently announced his opposition to their public financing request for the luxury tower that Meyer pitched to Chinese investors, One Journal Square. In 2015 state and local officials lined up more than $90 million in tax breaks and bonds for the family for that same project. Most of those are gone now. The Kushners also suddenly quit their pursuit of a 95-acre development site in Jersey City called Bayfront.

Brigid Harrison, a professor of political science and law at Montclair State University, says it’s a political reaction to an unpopular president. “From Charlie Kushner’s perspective, this is a business that he developed well before Mr. Trump had any intention of running for office,” she says. “In some ways, I sympathize with him. He didn’t ask to be the father of the first son-in-law.”

Some argue the families have only themselves to blame. Ethics groups have widely complained that the way the Trumps and Kushners distanced themselves from their businesses is inadequate and is precisely what’s causing the problems. Trump put his two grown sons in charge of the businesses, and Eric has said he plans to update his father regularly on how things are going. Walter Shaub Jr., director of the U.S. Office of Government Ethics, describes the arrangement as “meaningless from a conflicts-of-interest perspective.”

Jared divested many of his assets into trusts for the tightknit Kushner family. Critics feared businesses would jump at the chance to cut deals with the Trumps and the Kushners, two of the most powerful families in the U.S. But many appear uncertain. “This is uncharted waters, where you have a businessperson who is still in business, and his name is on the business, and he’s sitting in the Oval Office,” says Sloan of Holland & Knight. “Nobody knows what to do with that.”

Of course, there have been successes, and in the end they may outweigh any failures. Chinese and Mexican regulators have approved Trump trademarks, and the U.S. General Services Administration has said Trump’s D.C. hotel lease is valid despite a ban on elected officials from holding the lease to a federal building.

Larry Noble, general counsel of the Campaign Legal Center, a nonprofit that advocates for strong enforcement of campaign finance laws, cautions against reading too much into the recent spate of failed deals. Because both the Trump and Kushner family businesses are privately held, it’s impossible to know the true extent of influence-peddling taking place. “We’re all dealing on anecdotal evidence. None of this is public,” Noble says. “Are these projects falling apart because of concerns about the appearance of dealing with the family and potential ethics issues? Or are they falling apart because they’re just not good projects?”

The bottom line: Investors are beginning to avoid partnering with Trump family businesses because of the added scrutiny.

Article Link To Bloomberg Businessweek:

Here's The ECB's `Strong Logic' For Ending QE Before Rates Rise

Chief economist Praet has pushed to keep current sequencing; One argument to raise rates sooner is that banks are hurting. 

By Carolynn Look
May 19, 2017

The European Central Bank’s debate over the so-called sequencing of its exit from unconventional policy looks set to rumble gently on.

Executive Board member Peter Praet has led the defense of the plan to end quantitative easing first and only start raising interest rates later, saying the strategy is based on “strong logic.” As chief economist and the person responsible for presenting the board’s monetary-policy proposal to the Governing Council, his view carries enough weight to largely quash the idea that rates might rise before QE stops.

But the possibility hasn’t gone away, with at least two policy makers saying that there are situations which would justify raising the deposit rate, currently at minus 0.4 percent. So here’s a look at the arguments.

1. What is the current plan for exiting stimulus?

Beyond the ECB’s forward guidance, there isn’t one yet. The Governing Council intends to buy 60 billion euros ($66 billion) a month of debt until the end of 2017. What happens after that, such as whether and how asset purchases will be reduced, hasn’t been formally discussed. The ECB expects interest rates, which have been on a downward trajectory for more than nine years, to “remain at present or lower levels for an extended period of time, and well past” the end of QE.

2. How did the idea of a possible sequencing change come up?

The question of whether rates could rise before bond-buying comes to an end was raised briefly in the Governing Council’s March 9 meeting. That news, reported by Bloomberg the next day, pushed up the euro and bond yields. They were sent even higher a week later, when Austria’s Ewald Nowotny told a German newspaper that the ECB will need to discuss whether the Fed model “can be transferred to Europe one-to-one,” implying that rates could rise before the end of QE.

3. That market response can’t have gone down well?

It didn’t. Within hours of Nowotny’s remarks being published, Praet told Bloomberg that the ECB’s forward guidance on sequencing is “very clear” and that it has a “strong logical basis.” At a conference in early April, he reiterated that message and ECB President Mario Draghi tried to put a lid on the discussion by saying inflation is too subdued to start discussing any shift in the policy stance.

4. So what’s the ‘strong logic’ behind ending QE first?

Praet argues that the ECB should allow the yield curve to steepen by ending asset purchases before lifting it in its entirety via higher benchmark rates. He spelled that out in an interview with Trends magazine published on May 11:

“Look, there is a very strong chain of logic behind the decision to first scale back QE, raising the term premium included in long-term rates, and only then hiking short-term rates. We have to scale back our policy in an orderly fashion if we don’t want to undo the benefits of what we’ve been doing for the past few years.”

5. That seems, well, logical. Any other arguments?

Certainly. QE is an extraordinary measure introduced in 2015 as policy makers faced a critical threat of deflation, and after Draghi fought down numerous practical and political objections. German officials in particular have always said the program wasn’t necessary, and the ECB still attracts occasional accusations that it breached European Union rules prohibiting it from financing governments. Governing Council members critical of QE are likely to push a lot harder for it to end than for raising interest rates while bond-buying continues.

6. So what are the arguments for changing the sequencing?

Probably the strongest case would be if the negative deposit rate squeezes banks’ margins to the point of damaging monetary-policy transmission. Banks generally can’t pass the ECB’s charge for holding overnight funds onto customers, and while the central bank says it has no obligation to support lenders’ profit, it does care about the financial system’s ability to offer credit.

That scenario has been put forward by Executive Board member Benoit Coeure -- who is about as influential as Praet -- and acknowledged by Lithuanian Governor Vitas Vasiliauskas. Still, both men said they would need to see evidence of that risk manifesting, and so far they don’t.

Another argument is that changing the sequencing might give the ECB the flexibility to use all its policy tools for longer. For example, it could slowly tighten policy with a combination of small rate increase and a reduction in the monthly pace of bond purchases.

And there is an academic argument as well. Executive Board member Yves Mersch recently cited a Bank for International Settlements study that found nominal rates affect monetary-policy transmission independently of real rates. Keeping them persistently low might damp spending.

7. When will this be settled?

The Governing Council’s next policy meeting is on June 8 in Tallinn, where Praet is likely to urge his colleagues to fall in line or risk unsettling markets again. But unless the risk outlined by Coeure disappears, there’s no reason to drop that caveat. This isn’t the ECB’s biggest debate, so it doesn’t necessarily need to be resolved right away. But as the pressure for a full exit strategy mounts, investors may well be calling for more clarity.

Article Link To Bloomberg:

Security Experts Find Clues To Ransomware Worm's Lingering Risks

By Eric Auchard
May 19, 2017

wo-thirds of those caught up in the past week's global ransomware attack were running Microsoft's Windows 7 operating system without the latest security updates, a survey for Reuters by security ratings firm BitSight found.

Researchers are struggling to try to find early traces of WannaCry, which remains an active threat in hardest-hit China and Russia, believing that identifying "patient zero" could help catch its criminal authors.

They are having more luck dissecting flaws that limited its spread.

Security experts warn that while computers at more than 300,000 internet addresses were hit by the ransomware strain, further attacks that fix weaknesses in WannaCry will follow that hit larger numbers of users, with more devastating consequences.

"Some organizations just aren't aware of the risks; some don't want to risk interrupting important business processes; sometimes they are short-staffed," said Ziv Mador, vice president of security research at Trustwave’s Israeli SpiderLabs unit.

"There are plenty of reasons people wait to patch and none of them are good," said Mador, a former long-time security researcher for Microsoft.

WannaCry's worm-like capacity to infect other computers on the same network with no human intervention appear tailored to Windows 7, said Paul Pratley, head of investigations & incident response at UK consulting firm MWR InfoSecurity.

Data from BitSight covering 160,000 internet-connected computers hit by WannaCry, shows that Windows 7 accounts for 67 percent of infections, although it represents less than half of the global distribution of Windows PC users.

Computers running older versions, such as Windows XP used in Britain's NHS health system, while individually vulnerable to attack, appear incapable of spreading infections and played a far smaller role in the global attack than initially reported.

In laboratory testing, researchers at MWR and Kyptos say they have found Windows XP crashes before the virus can spread.

Windows 10, the latest version of Microsoft's flagship operating system franchise, accounts for another 15 percent, while older versions of Windows including 8.1, 8, XP and Vista, account for the remainder, BitSight estimated.

Computer Basics

Any organization which heeded strongly worded warnings from Microsoft to urgently install a security patch it labeled “critical” when it was released on March 14 on all computers on their networks are immune, experts agree.

Those hit by WannaCry also failed to heed warnings last year from Microsoft to disable a file sharing feature in Windows known as SMB, which a covert hacker group calling itself Shadow Brokers had claimed was used by NSA intelligence operatives to sneak into Windows PCs.

"Clearly people who run supported versions of Windows and patched quickly were not affected", Trustwave's Mador said.

Microsoft has faced criticism since 2014 for withdrawing support for older versions of Windows software such as 16-year-old Windows XP and requiring users to pay hefty annual fees instead. The British government canceled a nationwide NHS support contract with Microsoft after a year, leaving upgrades to local trusts.

Seeking to head off further criticism in the wake of the WannaCry outbreak, the U.S. software giant last weekend released a free patch for Windows XP and other older Windows versions that it previously only offered to paying customers.(

Microsoft declined to comment for this story.

On Sunday, the U.S. software giant called on intelligence services to strike a better balance between their desire to keep software flaws secret - in order to conduct espionage and cyber warfare - and sharing those flaws with technology companies to better secure the internet (

Half of all internet addresses corrupted globally by WannaCry are located in China and Russia, with 30 and 20 percent respectively. Infection levels spiked again in both countries this week and remained high through Thursday, according to data supplied to Reuters by threat intelligence firm Kryptos Logic.

By contrast, the United States accounts for 7 percent of WannaCry infections while Britain, France and Germany each represent just 2 percent of worldwide attacks, Kryptos said.(

Dumb And Sophisticated

The ransomware mixes copycat software loaded with amateur coding mistakes and recently leaked spy tools widely believed to have been stolen from the U.S. National Security Agency, creating a vastly potent class of crimeware.

"What really makes the magnitude of this attack so much greater than any other is that the intent has changed from information stealing to business disruption", said Samil Neino, 32, chief executive of Los Angeles-based Kryptos Logic.

Last Friday, the company's British-based 22-year-old data breach research chief, Marcus Hutchins, created a "kill-switch", which security experts have widely hailed as the decisive step in halting the ransomware's rapid spread around the globe.

WannaCry appears to target mainly enterprises rather than consumers: Once it infects one machine, it silently proliferates across internal networks which can connect hundreds or thousands of machines in large firms, unlike individual consumers at home.

An unknown number of computers sit behind the 300,000 infected internet connections identified by Kryptos.

Because of the way WannaCry spreads sneakily inside organization networks, a far larger total of ransomed computers sitting behind company firewalls may be hit, possibly numbering upward of a million machines. The company is crunching data to arrive at a firmer estimate it aims to release later Thursday.

Liran Eshel, chief executive of cloud storage provider CTERA Networks, said: "The attack shows how sophisticated ransomware has become, forcing even unaffected organizations to rethink strategies."

Escape Route

Researchers from a variety of security firms say they have so far failed to find a way to decrypt files locked up by WannaCry and say chances are low anyone will succeed.

However, a bug in WannaCry code means the attackers cannot use unique bitcoin addresses to track payments, security researchers at Symantec found this week. The result: "Users unlikely to get files restored", the company's Security Response team tweeted.

The rapid recovery by many organizations with unpatched computers caught out by the attack may largely be attributed to back-up and retrieval procedures they had in place, enabling technicians to re-image infected machines, experts said.

While encrypting individual computers it infects, WannaCry code does not attack network data-backup systems, as more sophisticated ransomware packages typically do, security experts who have studied WannaCry code agree.

These factors help explain the mystery of why such a tiny number of victims appear to have paid ransoms into the three bitcoin accounts to which WannaCry directs victims.

Less than 300 payments worth around $83,000 had been paid into WannaCry blackmail accounts by Thursday (1800 GMT), six days after the attack began and one day before the ransomware threatens to start locking up victim computers forever. (Reuters graphic: [

The Verizon 2017 Data Breach Investigations Report, the most comprehensive annual survey of security breakdowns, found that it takes three months before at least half of organizations install major new software security patches.

WannaCry landed nine weeks after Microsoft's patch arrived.

"The same things are causing the same problems. That's what the data shows," MWR research head Pratley said.

"We haven't seen many organizations fall over and that's because they did some of the security basics," he said.

Article Link To Reuters:

TPP Trade Deal Members Seek To Move Ahead Without United States

By Mai Nguyen and Kaori Kaneko
May 19, 2017

Remaining members of the Trans Pacific Partnership (TPP) free trade agreement are working on a statement to reaffirm their commitment to it despite the withdrawal of the United States, sources close to the discussions said.

Talks are happening on the sidelines of an Asia-Pacific Economic Cooperation (APEC) meeting, the biggest trade gathering since U.S. President Donald Trump upended the world order with his "America First" policy.

The competing visions are evident at this weekend's APEC meeting of ministers from countries that account for well over 40 percent of world trade.

While new U.S. Trade Representative Robert Lighthizer will hold bilateral talks with key countries, China will be pushing its favored Asian trade agreement as it puts itself forward as a global free trade champion.

Meanwhile, Japan is leading the countries that still want to go ahead with a much more comprehensive TPP agreement, a deal Trump ditched in one of his first acts in office and which does not include China.

Sources close to the discussions said the so-called TPP-11 states - the 11 members left after the United States withdrew - were planning a statement for Sunday that would say they were committed to moving ahead with TPP.

"There will be two main points: 1. To aim for an early entry into force of the TPP-11, 2. To bear in mind an environment where a signatory country can return," said one source close to the discussions who was not authorized to speak to the media.

The agreement is due to come into force next year.


Among the challenges is keeping on board Vietnam and Malaysia, who would have been big beneficiaries from the agreement if it included the United States.

Vietnam would want to renegotiate requirements in areas like labor reform and intellectual property rights if it were to continue without U.S. participation, said one Vietnamese official who declined to be identified.

Japan is still hopeful that the United States can be brought back to the agreement.

But renegotiating the existing North America Free Trade Agreement (NAFTA) is a bigger immediate priority for Washington.

In Hanoi, Lighthizer is due to hold bilateral meetings to start making official contact with key trade officials.

Nearly all the other 20 members of APEC had requested bilateral meetings, U.S. officials said.

Main countries are China, Japan and South Korea, with which Trump wants to renegotiate a free trade deal. Canada and Mexico will be at the Asia-Pacific meetings and are also in the North American trade area.

In other talks on the sidelines, China will be driving for progress on its favored trade deal for Asia: the Regional Comprehensive Economic Partnership.

The free trade agreement doesn't cover as many areas as the TPP deal or demand tough conditions for members on issues such as protecting intellectual property, labor rights or the environment.

Doubts over TPP have given greater impetus to discussions which members hope to complete by the end of the year.

But officials said there remained significant points of disagreement in the talks between Southeast Asian countries, China, India, Australia, New Zealand, Japan and South Korea. The United States has never been part of those discussions.

Article Link To Reuters:

Dealmakers Aplenty, SoftBank's Son Looks For Wonk

By Liana B. Baker and Greg Roumeliotis
May 19, 2017

Deep Nishar spends more time roaming university hallways than he does corporate boardrooms.

A former electrical engineer who helped develop Google's mobile phone business and grow LinkedIn's users from 30 million to half a billion, Nishar is exactly the sort of industry specialist that SoftBank Group Corp CEO (9984.T) Masayoshi Son wants for his new $100 billion technology investment vehicle.

Son, Japan's richest man, is expected to announce on Saturday the close of the first fundraising round for what will be the world's biggest private equity fund. Its backers, including Saudi Arabia's sovereign wealth fund and Apple Inc (AAPL.O), expect technology investments that will match or beat the 44 percent internal rate of return that SoftBank says Son has delivered by investing in internet companies in the last 18 years.

With pitfalls aplenty among the valuation-rich, profit-poor start-ups of Silicon Valley, Son is seeking to hire dealmakers who can spot the most commercially disruptive technologies, according to people close to him.

As he builds up the Vision Fund, Son has hired a roster of investment bankers, including Alex Clavel, a longtime telecommunications banker at Morgan Stanley (MS.N), and technology banker Ervin Tu of Goldman Sachs Group Inc (GS.N).

Son is looking for industry wonks to complement those hires and find potentially game-changing investments in areas ranging from genomics and artificial intelligence to robots and the internet-of-things.

The sources asked not to be identified ahead of the conclusion of the fundraising.

Nishar, 47, is the most senior industry expert working for SoftBank, which he joined in 2015. He sits on SoftBank's investment committee, which includes Son, SoftBank chief financial officer Alok Sama, SoftBank board director Ronald Fisher, and head of the Vision Fund, Rajeev Misra. SoftBank has yet to finalize the investment committee for the Vision Fund, which it will manage.

Even when he was working at LinkedIn and Google, Nishar had an interest in investing. The Indian-born engineer spent five years tracking the business of pre-cancer detection startup Guardant Health. He visited researchers in universities and even showed up in doctors' offices to see which tests they prescribed to detect cancer.

When Guardant sought to raise money in 2016, Nishar had an inside track. He arranged a meeting between Guardant's founders and Son at SoftBank's San Carlos office near San Francisco. Last week, SoftBank said it would lead a $360 million fundraising round for Guardant, with Son praising it as a potential "Rosetta Stone" of cancer.

Guardant co-founder and CEO Helmy Eltoukhy said Nishar's business experience and technical expertise made him stand out from other investment professionals.

"This kind of experience, from the engineering side as well as business side, is hard to come by," he said.

Frontier Technologies

Nishar has four people on his team, which focuses on so-called frontier technologies, such as computational biology. He is looking to double that by the end of the year, according to people familiar with the plans. SoftBank also wants experts in other sectors, including enterprise software, artificial intelligence, robotics, digital media and financial technology, according to the sources. Other sector specialists working for SoftBank include David Thevenon, a former Google executive who handles ride-sharing investments for SoftBank, such as Didi in China, Ola in India, and Grab in Southeast Asia, and Kabir Misra, an e-commerce specialist who is helping put together the merger of Flipkart and Snapdeal in India.

Son is building his team as technology investing has become increasingly competitive. Google and other technology companies are looking to invest in the areas SoftBank is focusing on, as are private equity and venture capital funds.

The dealmaking team SoftBank is building will also be pivotal for 59-year-old Son's own legacy and eventual transition, after Nikesh Arora, a former Google executive he had named as his successor, resigned last year.

A graduate of the University of California, Berkeley, Son does not subscribe to the traditional Japanese business culture of pecking order and hierarchy, leaving plenty of scope for people in this team to pitch investment ideas to him. "Son is not terribly hierarchical. If you know something more than him on a particular topic, you will get air time, he will listen to you," said Raine Group LLC co-founder Jeff Sine, Son's most trusted investment banking adviser, who has participated in most of his deals.

Son is the only individual listed as "key man" for the Vision Fund, meaning that, no matter how many dealmakers he hires, he is responsible for all the investment decisions, and the fund could be dissolved in his absence.

Many of the hirings happen through personal connections; Nishar, for example, was recruited by Arora, based on their ties going back to Google.

With so much in-house dealmaking expertise, investment bankers who have been trying to cultivate Son's lieutenants are fretting over whether they will be hired to work on any of the Vision Fund's deals. People close to Son say he will meet with all major investment banks, such as Goldman Sachs and JPMorgan Chase & Co (JPM.N), but will only hire them if they bring expertise he does not already have. "As an investment banker, you need deep expertise in the specific set of skills Son has hired you for to be useful, because his team is extremely smart," said Robey Warshaw LLP co-founder Simon Robey, an investment banker who helped SoftBank navigate British takeover rules to clinch a $32 billion deal to acquire chip designer ARM Holdings.

Article Link To Reuters:

The Lessons Of Amazon

A case of disruption creating wealth, but government aided its e-book dominance.

By Review & Outlook
The Wall Street Journal
May 19, 2017

Amazon marks 20 years as a public company this week, and if you got in on the ground floor you have a lot to celebrate. A $100 investment in the initial public offering of the three-year-old Internet company in 1997 is worth more than $49,000 today.

Even by the standards of successful Silicon Valley start-ups, that’s hitting the jackpot. Wealth creation is the business of democratic capitalism, and by taking its market capitalization to $460 billion from $660 million in two decades, Amazon has delivered. It’s worth a moment to consider some business and policy lessons.

The beauty of the free market is that entrepreneurs seeking to get rich have to make their customers better off at the same time. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” Adam Smith wrote in the 18th century.

On a visit to the Journal some years ago, founder Jeff Bezos said Amazon employees focus relentlessly on what its customers need—even if they don’t know they need it. That might explain how a company that started out as an online bookstore has become the most popular U.S. supplier of consumer goods.

Mr. Bezos has overturned the traditional world of retailing by acting both as a merchant and logistics company. Millions of consumers now enjoy shopping from the comfort of the sofa, and buying “with one click” at any hour. Though that has punished bricks-and-mortar competitors, Amazon’s success shows that capitalist innovation is still alive in the U.S.

The problem is that there are fewer Amazons than there used to be. The Journal reported this week that today there are some 157 companies backed by venture capital that are worth more than $1 billion, up from 61 three years ago. That’s because fewer are going public on exchanges where non-rich Americans can invest in them.

President Trump’s new chairman of the Securities and Exchange Commission, Jay Clayton, noted this slowdown in IPOs in his March testimony. In 2016 some 128 companies went public in the U.S. compared to 845 in 1996. The number of publicly listed companies trading on U.S. exchanges today is down 37% since Amazon’s IPO.

This is partly explained by the large pools of venture capital available to start-ups. But it is exacerbated by the heavy regulatory and filing burdens that companies face in going public due to Sarbanes-Oxley and other political brainstorms. As Mr. Clayton put it, “it is clear that our public capital markets are less attractive to business than in the past” and this limits “opportunities for Main Street investors.”

Politicians like to complain that in today’s economy only the rich get richer. But when the rest of America can’t become equity investors in the fastest-growing companies, the wealth gap will widen. Mr. Clayton says that one of his priorities will be trying to revive the public capital markets—an admirable project.

The success of tech giants like Amazon and Google is raising new questions about antitrust policy, but the irony of Amazon is that it has benefited from overzealous enforcement. When Apple launched a platform that allowed publishers to set their own retail prices on the iPad in 2010, Amazon accused the company of fixing digital book prices, though Amazon had 90% of the e-book market. Yet average e-book prices trended down with Apple’s innovation.

The Obama Justice Department took Amazon’s side and sued Apple and five major publishers (including our sister company HarperCollins) charging a restraint of trade that harmed consumers. Last year the Supreme Court declined to hear Apple’s appeal, and Amazon remains by far the dominant player in e-books. The Trump Antitrust Division may want to take another look at Amazon’s monopoly power.

Corporate giants often gain outsize political muscle, and Mr. Bezos’s Amazon is no different. But it’s worth remembering that the company grew up when an entrepreneur could still access capital from a wide swath of investors and innovate without getting sued for shaking up the competition.

Article Link To The Wall Street Journal:

Colin Kaepernick Is A Victim Of His Own Supporters

What team owner would risk being vilified as racist if things don’t go well for the quarterback?

By Jason Whitlock
The Wall Street Journal
May 19, 2017

Quarterback Colin Kaepernick became a hero to progressive activists—and a polarizing figure among National Football League fans—when he began kneeling during the national anthem last season. His protest of police misconduct won him plaudits from the sports media, but he has been jobless since parting ways with the San Francisco 49ers earlier this year. Progressives believe Mr. Kaepernick is a victim, and I agree. The question is who made him one.

The sports press wants you to believe Mr. Kaepernick, who recently received interest from the Seattle Seahawks, remains unemployed thanks to the racist collusion of 32 conservative billionaire team owners. ESPN commentator Bomani Jones demands the media “stop hiding behind code” and address this “visible potential case of discrimination.” The normally measured Tim Kawakami wrote in a rambling column that a lesser quarterback already signing with an NFL team proved Mr. Kaepernick was being blackballed.

In reality, the 29-year-old has struggled to find work because his supporters inflated the risk of signing him, and his skills don’t compensate for the uncertainty he brings. An owner, general manager or coach runs the risk of being publicly vilified as racist depending on how his team uses the mixed-race quarterback.

The same risk does not exist if an NFL decision maker mishandles rookies like Mitchell Trubisky and Deshaun Watson, or veterans such as Blaine Gabbert and Geno Smith. A coach knows he can bench or cut any NFL quarterback, except Mr. Kaepernick, without having his personal integrity questioned. This explains why former Kaepernick backup Mr. Gabbert has already signed a one-year contract with the Arizona Cardinals. Critics of the Gabbert acquisition can question Arizona head coach Bruce Arians’s football acumen without politics becoming an issue. Mr. Gabbert is in that way an ideal backup: somewhere between invisible and boring.

Former quarterback Tim Tebow’s rabid, irrational supporters undermined his NFL opportunities in much the same fashion as Mr. Kaepernick’s. In 2011 he started 11 games for the Denver Broncos and led them to a come-from-behind playoff victory over the Pittsburgh Steelers. In celebration of big plays and touchdowns, Mr. Tebow knelt in prayer and became a polarizing religious symbol. He was also a below-average passer. The Broncos, and several other teams, discarded the fervent Christian when it became clear his production didn’t justify the controversy associated with his presence.

Mr. Kaepernick’s kneeling is an even riskier proposition. The social-justice warrior has cultivated media alliances far more aggressively than the pious Mr. Tebow. Mr. Kaepernick is also closely aligned with Black Lives Matter media activists. No NFL owner, executive or coach—regardless of race—wants his football decisions second-guessed in the tendentious way BLM activists Monday-morning-quarterback police officers.

Above all, talent drives NFL decisions. The proof can be seen in the Cincinnati Bengals’ choice of 20-year-old running back Joe Mixon in the second round of last month’s draft. Mr. Mixon enters the league after the release of year-old video showing the young African-American breaking a white woman’s jaw. Mr. Mixon reached an out-of-court settlement with the victim and apologized publicly.

In the NFL meritocracy, Mr. Mixon’s talent dictates that he be given an opportunity to redeem himself as a man while playing professional football. In the minds of Bengals head coach Marvin Lewis and owner Mike Brown, Mr. Mixon’s talents justify dealing with the controversy and baggage that accompany his employment. These same factors allowed former NFL star quarterback Michael Vick, who is also black, to land a job with the Philadelphia Eagles after spending time in prison for running a dogfighting operation.

The old white bigots running the NFL apparently control one of the few industries that grants black ex-cons a path to re-enter the workforce and excel economically. Given the felony-conviction rate, poverty and fatherlessness associated with young black men, you would think progressives would celebrate the league’s owners. Their patriotic league lives out the principles the U.S. ought to represent.

But for some reason progressive elites prefer the Hollywood version of America, where old liberal white men decide who gets a role on the team. It’s odd, though. The old white conservatives operate a sports league that enriches and champions African-Americans. The old white liberals control an industry that rightly is criticized for its neglect and tokenization of minority actors.

Article Link To The Wall Street Journal:

Noonan: Democracy Is Not Your Plaything

When the circus comes to Washington, it consumes everything, absorbs all energy.

By Peggy Noonan
The Wall Street Journal
May 19, 2017

This will be unpleasantly earnest, but having witnessed the atmospherics the past 10 days it’s what I think needs saying:

Everyone, get serious.

Democracy is not your plaything.

This is not a game.

Make clear you want to work with Trump on policy but don’t defend his bad behavior.

The president of the United States has produced a building crisis that is unprecedented in our history. The question, at bottom, is whether Donald Trump has demonstrated, in his first four months, that he is unfit for the presidency—wholly unsuited in terms of judgment, knowledge, mental capacity, personal stability. That epic question is then broken down into discrete and specific questions: Did he improperly attempt to interfere with an FBI criminal investigation, did his presidential campaign collude with a foreign government, etc.

But the epic question underlies all. It couldn’t be more consequential and will take time to resolve. The sheer gravity of the drama will demand the best from all of us. Are we up to it?

Mr. Trump’s longtime foes, especially Democrats and progressives, are in the throes of a kind of obsessive delight. Every new blunder, every suggestion of an illegality, gives them pleasure. “He’ll be gone by autumn.”

But he was duly and legally elected by tens of millions of Americans who had legitimate reasons to support him, who knew they were throwing the long ball, and who, polls suggest, continue to support him. They believe the press is trying to kill him. “He’s new, not a politician, give him a chance.” What would it do to them, what would it say to them, to have him brusquely removed by his enemies after so little time? Would it tell them democracy is a con, the swamp always wins, you nobodies can make your little choices but we’re in control? What will that do to their faith in our institutions, in democracy itself?

These are wrenching questions.

But if Mr. Trump is truly unfit—if he has demonstrated already, so quickly, that he cannot competently perform the role, and that his drama will only get more dangerous and chaotic, how much time should pass to let him prove it? And how dangerous will the proving get?

Again, wrenching questions. So this is no time for blood lust and delight. Because democracy is not your plaything.

The president’s staffers seem to spend most of their time on the phone, leaking and seeking advantage, trying not to be named in the next White House Shake-Up story. A reliable anonymous source who gives good quote will be protected—for a while. The president spends his time tweeting his inane, bizarre messages—he’s the victim of a “witch hunt”—from his bed, with his iPad. And giving speeches, as he did this week at the Coast Guard Academy: “No politician in history, and I say this with great surety, has been treated worse or more unfairly.” Actually Lincoln got secession, civil war and a daily pounding from an abolitionist press that thought he didn’t go far enough and moderates who slammed his brutalist pursuit of victory. Then someone shot him in the head. So he had his challenges.

Journalists on fire with the great story of their lives—the most bizarre presidency in U.S. history and the breaking news of its daily missteps—cheer when their scoop that could bring down a president gets more hits then the previous record holder, the scoop that could bring down the candidate.

Stop leaking, tweeting, cheering. Democracy is not your plaything.

There’s a sense nobody’s in charge, that there’s no power center that’s holding, that in Washington they’re all randomly slamming into each other.

Which is not good in a crisis.

For Capitol Hill Democrats the crisis appears to be primarily a chance to showboat. Republicans are evolving, some starting to use the word “unfit” and some, as a congressman told me, “talking like they’re in a shelter for abused women. ‘He didn’t mean to throw me down the stairs.’ ‘He promised not to punch me again.’ ”

We’re chasing so many rabbits, we can’t keep track—Comey, FBI, memoranda; Russia, Flynn, the Trump campaign; Lavrov, indiscretions with intelligence. It’s become a blur.

But there’s an emerging sense of tragedy, isn’t there? Crucially needed reforms in taxing, regulation and infrastructure—changes the country needs!—are thwarted, all momentum killed. Markets are nervous.

The world sees the U.S. political system once again as a circus. Once the circus comes to town, it consumes everything, absorbs all energy.

I asked the ambassador to the U.S. from one of our greatest allies: “What does Europe say now when America leaves the room?” You’re still great, he said, but “we think you’re having a nervous breakdown.”

It is absurd to think the president can solve his problems by firing his staff. They are not the problem. He is the problem. They’re not the A-Team, they’re not the counselors you’d want, experienced and wise. They’re the island of misfit toys. But they could function adequately if he could lead adequately. For months he’s told friends he’s about to make big changes, and doesn’t. Why? Maybe because talented people on the outside don’t want to enter a poisonous staff environment just for the joy of committing career suicide. So he’s stuck, surrounded by people who increasingly resent him, who fear his unpredictably and pique and will surely one day begin to speak on the record.

A mystery: Why is the president never careful? He doesn’t act as if he’s picking his way through a minefield every day, which he is. He acts like he’s gamboling through safe terrain. Thus he indulges himself with strange claims, statements, tweets. He comports himself as if he has a buffer of deep support. He doesn’t. Nationally his approval numbers are in the mid to high 30s.

His position is not secure. And yet he gambols on, both paranoid and oblivious.

History is going to judge us by how we comported ourselves in this murky time. It will see who cared first for the country and who didn’t, who kept his head and did not, who remained true and calm and played it straight.

Now there will be a special prosecutor. In the short term this buys the White House time.

Here’s an idea.

It would be good if top Hill Republicans went en masse to the president and said: “Stop it. Clean up your act. Shut your mouth. Do your job. Stop tweeting. Stop seething. Stop wasting time. You lost the thread and don’t even know what you were elected to do anymore. Get a grip. Grow up and look at the terrain, see it for what it is. We have limited time. Every day you undercut yourself, you undercut us. More important, you keep from happening the good policy things we could have done together. If you don’t grow up fast, you’ll wind up abandoned and alone. Act like a president or leave the presidency.”

Could it help? For a minute. But it would be constructive—not just carping, leaking, posing, cheering and tweeting but actually trying to lead.

The president needs to be told: Democracy is not your plaything.

Article Link To The Wall Street Journal:

Krauthammer: The Guardrails Of American Democracy Can’t Contain Trump

But that doesn’t mean he should be removed via the 25th Amendment.

By Charles Krauthammer
The National Review
May 19, 2017

The pleasant surprise of the first 100 days is over. The action was hectic, heated, often confused, but well within the bounds of normalcy. Policy (e.g., health care) was being hashed out, a Supreme Court nominee confirmed, foreign-policy challenges (e.g., North Korea) addressed.

Donald Trump’s character — volatile, impulsive, often self-destructive — had not changed since the campaign. But it seemed as if the guardrails of our democracy — Congress, the courts, the states, the media, the cabinet — were keeping things within bounds.

Then came the last ten days. The country is now caught in the internal maelstrom that is the mind of Donald Trump. We are in the realm of the id. Chaos reigns. No guardrails can hold.

Normal activity disappears. North Korea’s launch of an alarming new missile and a problematic visit from the president of Turkey (locus of our most complicated and tortured allied relationship) barely evoke notice. Nothing can escape the black hole of a three-part presidential meltdown.

— First, the firing of James Comey. Trump, consumed by the perceived threat of the Russia probe to his legitimacy, executes a mindlessly impulsive dismissal of the FBI director. He then surrounds it with a bodyguard of lies — attributing the dismissal to a Justice Department recommendation — which his staff goes out and parrots. Only to be undermined and humiliated when the boss contradicts them within 48 hours.

Result? Layers of falsehoods giving the impression of an elaborate cover-up — in the absence of a crime. At least Nixon was trying to quash a third-rate burglary and associated felonies. Here we don’t even have a body, let alone a smoking gun. Trump insists there’s no “there” there, but acts as if the “there” is everywhere.

— Second, Trump’s divulging classified information to the Russians. A stupid, needless mistake. But despite the media hysteria, hardly an irreparable national-security calamity.

The Israelis, whose asset might have been jeopardized, are no doubt upset, but the notion that this will cause a great rupture to their (and others’) intelligence relationship with the U.S. is nonsense. These kinds of things happen all the time. When the Obama administration spilled secrets of the anti-Iranian Stuxnet virus or blew the cover of a double agent in Yemen, there was none of the garment-rending that followed Trump’s disclosure.

The country is now caught in the internal maelstrom that is the mind of Donald Trump. We are in the realm of the id. Chaos reigns.

Once again, however, the cover-up far exceeded the crime. Trump had three top officials come out and declare the disclosure story false. The next morning, Trump tweeted he was entirely within his rights to reveal what he revealed, thereby verifying the truth of the story. His national-security adviser, H. R. McMaster, floundered his way through a news conference, trying to reconcile his initial denial with Trump’s subsequent contradiction. It was a sorry sight.

— Is it any wonder, therefore, that when the third crisis hit on Tuesday night — the Comey memo claiming that Trump tried to get him to call off the FBI investigation of Michael Flynn — Republicans hid under their beds rather than come out to defend the president? The White House hurriedly issued a statement denying the story. The statement was unsigned. You want your name on a statement that your boss could peremptorily contradict in a Twitter-second?

Republicans are beginning to panic. One sign is the notion now circulating that, perhaps to fend off ultimate impeachment, Trump be dumped by way of the 25th Amendment.

That’s the post-Kennedy assassination measure that provides for removing an incapacitated president on the decision of the vice president and a majority of the cabinet.

This is the worst idea since Leno at 10 p.m. It perverts the very intent of the amendment. It was meant for a stroke, not stupidity; for Alzheimer’s, not narcissism. Otherwise, what it authorizes is a coup — willful overthrow by the leader’s own closest associates.

I thought we had progressed beyond the Tudors and the Stuarts. Moreover, this would be seen by millions as an establishment usurpation to get rid of a disruptive outsider. It would be the most destabilizing event in American political history — the gratuitous overthrow of an essential constant in American politics, namely the fixedness of the presidential term (save for high crimes and misdemeanors).

Trump’s behavior is deeply disturbing but hardly surprising. His mercurial nature is not the product of a post-inaugural adder sting at Mar-a-Lago. It’s been there all along. And the American electorate chose him nonetheless.

What to do? Strengthen the guardrails. Redouble oversight of this errant president. Follow the facts, especially the Comey memos. And let the chips fall where they may.

But no tricks, constitutional or otherwise.

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