Wednesday, June 28, 2017

Wednesday, June 28, Morning Global Market Roundup: Asia Stocks Pressured As Wall St. Hit By Healthcare Vote Delay

By Lisa Twaronite
Reuters
June 28, 2017

Asian shares slumped on Wednesday after Wall Street was knocked hard in the wake of a delay to a U.S. healthcare reform vote, while the euro rallied after European Central Bank President Mario Draghi hinted that the ECB could trim its stimulus this year.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.4 percent, pulling further away from more than two-year highs probed earlier this week. On Monday, it touched its highest level since May 2015

"We've had a pretty good run," said Sean Darby, chief global equity strategist at Jefferies. "I suspect what people have owned has done very well, and they want to sell some of those positions."

Japan's Nikkei share average slipped 0.3 percent, facing headwinds from the dollar's reversal of its rise against the yen. But the banking and insurance sectors outperformed on expectations of higher rates.

The yield on U.S. Benchmark 10-year Treasury notes stood at 2.198 percent in Asian trading, flat from its U.S. close on Tuesday and above 2.14 percent late on Monday after Federal Reserve chief Janet Yellen said that it is appropriate to gradually raise rates.

"Yellen's comment is supporting Japanese financial stocks today, and for the long-term, Japanese stocks are on the rising trend supported by U.S.-led global economic recovery," said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

On Tuesday, the benchmark S&P 500 posted its biggest one-day drop in about six weeks and closed at its lowest point since May 31, after the U.S. Senate's move to delay voting on a healthcare reform bill rekindled worries on the timeline for President Donald Trump's business-friendly policies. [.N]

U.S. stocks accelerated their losses after Senate Republican leader Mitch McConnell decided to put off a planned vote on a bill to dismantle the Affordable Care Act until after the Senate's July 4 recess, to get more time to garner sufficient votes for its passage.

Against the perceived safe-haven yen, the dollar slipped 0.3 percent to 112.090 after rising as high as 112.285 yen, its highest since May 17.

The dollar index, which gauges the U.S. currency against a basket of six major counterparts, edged down slightly on the day to 96.365, well below its previous session high of 97.447.

The euro was up 0.4 percent at $1.13480 after rising to a 10-month high of $1.1356 after Draghi, speaking to a conference in Portugal, said the ECB could adjust its policy tools as economic prospects improve in Europe.

Some strategists said that once the dust settled from the impact of his comments, the euro could give back some of its gains.

"To me, it seems the change in policy will not be very substantial, so I think in the coming days, ECB officials will try to water down Draghi's comments," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

Crude oil futures steadied after their overnight surge. Prices rose nearly 2 percent on Tuesday on the weaker dollar, short-covering and expectations that U.S. crude inventories might decline for a third consecutive week. [O/R]

Brent crude futures edged up slightly on the day to$46.66 per barrel. U.S. crude futures were down 0.2 percent at $44.14.

The weaker dollar helped bolster spot gold, which was up 0.4 percent at 1,252.50 per ounce. [GOL/]


Article Link To Reuters:

Oil Prices Weighed Down As U.S. Inventory Gains Revive Glut Worries

By Henning Gloystein 
Reuters
June 28, 2017

Oil markets were steady to lower on Wednesday after a report of rising U.S. fuel and crude inventories underscored concerns that a three-year supply glut is far from over.

Brent crude futures LCOc1 were at $46.67 per barrel, close to their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were down 8 cents, or 0.2 percent, at $44.16 per barrel.

Oil had recovered some ground over the past week after falling nearly 20 percent since mid-May, but a report by the American Petroleum Institute (API) showed that U.S. crude inventories rose by 851,000 barrels in the week to June 23 to 509.5 million, compared with analysts' expectations for a decrease of 2.6 million barrels.

Gasoline stocks rose by 1.4 million barrels even though the U.S. summer driving season began a few weeks ago. [API/S]

The U.S. inventory gains show global supplies are still ample despite the effort by the Organization of the Petroleum Exporting Countries (OPEC) to cut output by 1.8 million barrels per day (bpd) between January 2017 and March 2018.

Ian Taylor, head of the world's largest independent oil trader Vitol, says Brent crude prices will stay in a range of $40-$55 a barrel for the next few quarters as higher U.S. production slows a rebalancing of the market.

"Everybody was positioned for a market rebalancing and a stocks draw to happen in the second quarter. And if you look at the macro analysis, that should start happening," Taylor said in an interview with Reuters.

"But so far it hasn't happened and everyone has made the same mistake. Nobody has distinguished themselves," he said.

Some analysts said that crude prices had likely bottomed out and would rise.

"We believe that the selloff in crude is overdone ... Brent is primed for a recovery," BMI Research said.


Article Link To Reuters:

Cheapest Fuel Since 2005 Brings U.S. Drivers `Christmas In July'

Prices hit 12-year seasonal low ahead of most-traveled weekend; American drivers to experience big differences in pump prices.


By Hailey Waller
Bloomberg
June 28, 2017

American drivers are preparing to hit the road this Fourth of July as seasonal gas prices plunge to their lowest in 12 years.

U.S. drivers will pay an average of $2.21 a gallon for gasoline over the holiday weekend, the lowest since 2005, according to Boston-based price tracker GasBuddy. For the first time in 17 years, gasoline prices are expected to be lower on July 4 than on New Year’s Day.

“It’s thrilling to see gas prices falling just in time for the most-traveled summer holiday,” Patrick DeHaan, GasBuddy senior petroleum analyst, said in an emailed statement. “Perhaps we can finally get rid of the myth that gas prices go up for the holiday.”



Over the last decade, the national average has been as much as $1.04 a gallon higher during the summer holiday compared with the beginning of the year. The average Independence Day price is 47 cents higher.

Heathrow, Florida-based automobile association AAA said last week that a record-breaking 44.2 million Americans will travel at least 50 miles away from home over the Fourth of July weekend.

The difference in gasoline prices in any given city on July 4 will reach historic highs, GasBuddy said. This means there is a higher chance consumers will overpay at the pump over the holiday weekend.

The spread between the nation’s lowest and highest priced gas stations stood at $1.29 a gallon on Wednesday, compared with the 10-year average of 98 cents a gallon for this time of year, according to GasBuddy. SUV drivers can save on average $11 per fill-up by stopping at the favorable end of the price spread. Smaller cars can save $6.

If you’re taking to the skies this holiday weekend, you’re in good company. Air travel is projected to rise 4.6 percent over the period that AAA defines as June 30 through July 4. With domestic airfares 10 percent lower this year, 3.44 million people are expected to fly. That’s up 4.6 percent from last year, with an average round trip domestic ticket landing at $186.

“Motorists are getting a well-deserved break at the pump after years of high summer gas prices,” DeHaan said. “This is like Christmas in July, instead of seeing fireworks at the pumps like we saw just a few short years ago.”


Article Link To Bloomberg:

OPEC, Have No Fear: The U.S. Oil-Shale Output Crash Is Here

Analyst says a crash in U.S. shale-oil production is ‘starting now’


By Myra P. Saefong
MarketWatch
June 28, 2017

Concerns over the ability for U.S. shale-oil production to offset efforts by other oil producers to rebalance the market have been greatly exaggerated.

The energy industry is already suffering from the impact of spending cuts over the past several years, said Phil Flynn, senior market analyst at Price Futures Group, in a webinar held Tuesday afternoon.

“We’re losing investment in the energy industry,” he said. “It’s taking its toll.”

Global energy exploration and production capital expenditures are expected to fall by 22%, or $740 billion, between 2015 and 2020, he said, citing a report from Wood Mackenzie issued last year. Including cuts to conventional exploration investment, Wood Mackenzie said that figure increases to just over $1 trillion.

Discovery of new oil fields has already “plunged” to its lowest level since 1947, as exploration companies cut back in the wake of the drop in oil prices, Flynn said. Year to date, West Texas Intermediate crude CLQ7, -0.32% and Brent crude LCOQ7, -0.13% prices have dropped by roughly 18%.



Shale-oil production is climbing, but that growth is slowing down, said Flynn. He pointed out that while the number of U.S. rigs drilling for oil has grown for 23 weeks in a row, based on Baker Hughes BHI, -0.61% data, new-well oil production per rig among the shale plays has slowed.

A crash in shale-oil production is “starting now,” Flynn told MarketWatch in an email. “It will become more clear in a few months.”

Oil production from seven major U.S. shale plays is expected to see a monthly rise of 127,000 barrels per day, to 5.475 million barrels a day in July, according to the Energy Information Administration. The EIA has forecast increases each month of this year so far.

But the latest data show a rise in the number of drilled-but-uncompleted shale wells — up by 176 to 5,946 in May from a month earlier, EIA data show.

The figures also show that new-well oil production per rig among the major U.S. oil plays was expected to rise by just 1 barrel per day, to 719 in July, from a month earlier.

The market is seeing signs that production for shale oil is slowing, and it may slow “a lot more dramatically” than people think, said Flynn.

With members of the Organization of the Petroleum Exporting Countries strongly sticking to their pledged production cuts and with record refining demand for oil in the U.S., the amount of oil in domestic storage is on track to drop by 100 million barrels by the end of September — ”regardless of shale,” said Flynn.

Given all of that, he expects that prices for oil during the second half of the year will “rebound and take out the 2017 highs.”

The year-to-date high for WTI was seen in February at $54.45 a barrel.


Article Link To MarketWatch:

Republicans Are Trying To Undo Obama’s Medicaid Disaster

By Betsy McCaughey
The New York Post
June 28, 2017 

Former President Barack Obama is joining the demagogic slugfest against the GOP’s latest bill to repeal and replace ObamaCare. He claims the GOP bill would “ruin Medicaid.”

He’s wrong. His health law ruined Medicaid.

Now, half of all women who give birth in the United States are on Medicaid, a staggering figure. The Republican bill, awaiting Senate action, will reform Medicaid, restoring its original mission and ensuring its future.

Medicaid was created in 1965 as a safety net for the poor. But ObamaCare distorted it, edging the US health-care system closer to a Medicaid-for-all or single-payer system. Swelling the Medicaid rolls — instead of making private insurance affordable — was the main trick ObamaCare used to boost the number of insured.

A whopping 75 million people are now enrolled on Medicaid, 20 million more than in Medicare, the program for the elderly. If the repeal bill doesn’t pass, Medicaid enrollment will soar to 86 million by 2026, according to a Congressional Budget Office analysis released Monday.

Who’s picking up the tab for this vast Medicaid expansion? You. Worse, you pay twice — once as a taxpayer, then again as an insurance consumer.

Families with private insurance pay $1,500 to $2,000 or more in added premiums yearly already to keep Medicaid afloat. The more Medicaid expands, the higher their premiums will go.

That’s because Medicaid shortchanges hospitals and doctors, paying less than the actual cost of care. They make up for it by shifting the costs onto privately insured patients. Ouch.

That cost-shifting only works until Medicaid enrollment grows too large. The Mayo Clinic warned three months ago that Medicaid enrollment has reached the tipping point. The renowned clinic announced it will have to turn away some Medicaid patients, or put them at the back of the line, behind patients with private insurance.

Years earlier, when ObamaCare was still being debated in Congress, the dean and CEO of Johns Hopkins Medicine, Edward Miller, had issued a similar warning: Allowing a vast expansion of Medicaid could have “catastrophic effects” at places like Hopkins.

His dire prediction came true. ObamaCare loosened Medicaid-eligibility rules, and urged states to enroll as many people as possible, with Uncle Sam paying 100 percent of the tab until 2016 and 90 percent or more thereafter.

Medicaid enrollment spiked in many states, including New York, where it skyrocketed to 6.3 million, up by a third. Blame the incentive to rake in federal dollars.

And waste money. Roughly 10 percent of Medicaid payments are in error. Any private-sector company with that record would be out of business.

The Republican bill reforms Medicaid in the nick of time. It will curb the explosive growth in enrollment, though no one currently on Medicaid will have their coverage ripped away. The repeal bill grandfathers them in.

Unless the enrollment explosion is halted, health-care institutions across the country will reach the same dire conclusion as Mayo, and begin turning away patients with government insurance.

Repeal would also slow the growth in federal Medicaid spending. Dems label that change “cuts” and predict doom, but in fact the bill promotes smarter spending.

States would receive a block grant or a fixed amount per Medicaid enrollee — ending the perverse incentive to spend more just to pull in federal dollars. The idea is to promote efficiency. Florida — hardly a backwater — currently spends half what New York spends per Medicaid recipient, proof it can be done.

Medicaid is the biggest item in most state budgets, diverting funds from school aid and other necessities. And in New York, burdening property tax payers as well. Families are forced to sell their homes because they can’t pay the taxes. (The repeal bill would bar New York from continuing to shift Medicaid costs to the counties.)

Sadly, Democratic Sen. Chuck Schumer labels the GOP repeal bill “heartless” and “mean.” Wrong, Senator. The GOP bill reforms Medicaid with no time to spare. It’s at the tipping point.


Article Link To The NY Post:

The GOP’s Schumer Option

The ‘bipartisanship’ to expect if Senate Republicans fail.


By Review & Outlook
The Wall Street Journal
June 28, 2017

Senate Republicans on Tuesday delayed a vote on their health-care bill until after the July 4 recess, and the timidity and opportunism of too many Senators suggest they may never get 50 GOP votes. We hope they understand that if they fail, Republicans will be entrusting their political health-care future to the brutal generosity of Democratic Leader Chuck Schumer.

The idea persists in some media and GOP ranks that if the Senate bill dies, this will produce a blossoming of bipartisanship. The left will have been repudiated by ObamaCare’s woes, and the right by the GOP Congress’s failure. Everyone can then sit down in the glorious middle and work out a compromise. It’s a lovely thought—like peace on Earth and the end of original sin. It is also a fantasy.

If Republicans fail, Democrats will have zero political incentive to cooperate except on their policy terms. Americans know that Republicans run Congress and the White House, and that they promised to do something about the problems of ObamaCare. Do Republicans really believe voters in 2018 will blame GOP failure on the President who left town two years ago? Democrats can tell you how well that strategy worked in 2010.

Then there’s who Republicans would negotiate with—and over what. Last week Governors John Kasich (R., Ohio) and John Hickenlooper (D., Colo.) offered a five-point bipartisan reform outline that was laughable in its lazy generalities: “Improve affordability . . . Restore stability to insurance markets.”

Well, sure, but how? Reaching these goals requires hard policy choices on which the parties are philosophically divided. Democrats want to stabilize markets with more taxpayer money and federal rules. Republicans want to deregulate markets and let insurers offer more plans that better suit the variety of insurance consumers. Democrats want to expand Medicaid to cover ever-more Americans. Republicans, or at least most of them, want to put Medicaid on a budget to provide better coverage to the neediest.

When Senate Republicans reached out to Heidi Heitkamp this spring to negotiate on health care, the North Dakota Democrat told Politico she had these demands: No per capita Medicaid block grants to the states and no rollback in ObamaCare’s Medicaid expansion. And that was merely “the price of admission for me sitting down.” Ms. Heitkamp is the second most conservative Senate Democrat after West Virginia’s Joe Manchin.

Ms. Heitkamp would never get a real chance to negotiate in any case. If their current effort fails, Republicans would then need 60 Senate votes to pass anything, and that gives Mr. Schumer the whip hand. His price for cooperating would include the Medicaid status quo; preserving the individual and employer mandates; tens of billions in higher subsidies to lure insurers back into the failing exchanges; and probably a limit on the policy flexibility the Trump Administration could allow states.

Does that sound like something Rand Paul might support? Or Mike Lee ? The more conservative Republicans who defect, the more Mr. Schumer would demand in return for more Democratic votes. Majority Leader Mitch McConnell would have to scramble to find even 15 Republicans to vote with Democrats as the GOP majority splinters.

This is the Senate reality, not some Kasich Kumbaya circle. Republicans can either set aside their narrow self-interest and fix ObamaCare on their terms, or they can collapse in disarray and bail it out on Mr. Schumer’s. In 2018 they can defend an accomplishment or try to explain away a failure. Americans will know the difference.


Article Link To The WSJ:

What Jeff Sessions Gets Wrong About Marijuana

Medical use of cannabis is officially accepted -- and is helping to limit opioid abuse.


By Ashley C. Bradford And W. David Bradford
The Bloomberg View
June 28, 2017

Drug abuse is devastating American society. Opioid overdose alone killed more than 33,000 people in 2015. But rather than address this public-health crisis, Attorney General Jeff Sessions has declared a new war on drugs. He has re-introduced mandatory minimum sentences for drug crimes and has asked Congress to let him spend money to prosecute people and businesses behaving in accordance with their states' medical marijuana laws.

Clearly, Sessions is out of step with the scientific consensus regarding the medical effectiveness of cannabis.

Because cannabis remains classified as a Schedule I drug under the Controlled Substances Act, all uses of it are illegal under federal law. People who use it to treat a variety of medical conditions risk arrest and prosecution. In light of the medical evidence this makes little sense.

Consider that drugs designated Schedule I are supposed to have “no currently accepted medical use.” Yet in January, a pathbreaking review by the National Academies of Sciences of more than 10,000 peer-reviewed studies found “conclusive” evidence that cannabis (whether it's the whole plant or an extract) is clinically effective at treating a number of illnesses, including chronic pain. The National Institute on Drug Abuse has likewise acknowledged the evidence for the drug's clinical efficacy.

What's more, the clinical use of cannabis stands to bring significant budgetary savings for government health insurance programs. Research that we've recently published in Health Affairs shows that if all 50 states allowed medical cannabis in 2014, Medicare and Medicaid would have saved more than $1.5 billion on prescription drugs.

The biggest savings would come from reduced prescriptions for pain medications -- a large share of which are opioids. This explains why states that have approved medical cannabis have experienced fewer opioid-related deaths. As NIDA noted, “medical marijuana products may have a role in reducing the use of opioids needed to control pain.”

Note that other preliminary but growing evidence suggests cannabis might also help patients with chronic pain who are already fighting an opiate addiction.

Such evidence appears to have affected many people's thinking. Ninety-four percent of Americans, according to the most recent Quinnipiac poll on the subject, support the medical use of cannabis -- including 90 percent of Republicans. It's no wonder that 29 states have looked beyond the federal law and approved the medical use of whole-plant cannabis (with another handful approving the use of cannabis oil).

Ultimately, a war on cannabis would hurt patients who are already hurting. Maintaining the scheduling of cannabis, increasing marijuana arrests and re-instituting minimum sentences for possession would stand in the way of their doctors' expertise and oversight. Even in the states that allow the use of medical marijuana, as long as cannabis remains Schedule I, doctors can only recommend that patients in pain try cannabis instead of opioids and hope for the best. Written or formal follow-up, assistance with dosing, or integration with other aspects of care may still leave the physician in federal jeopardy.

The Trump administration should instead remove marijuana from Schedule I, and turn medical decisions on the use of cannabis over to patients and their physicians.


Article Link To The Bloomberg View:

Obama Choked On Russia Long Before The 2016 Election

It's no wonder Putin thought he could meddle in the U.S. He had gotten away with everything else he tried.


By Eli Lake
The Bloomberg View
June 28, 2017

"I feel like we sort of choked." That is the killer quote in an extraordinary Washington Post investigation into how Barack Obama responded to intelligence last year that Russia was running a sophisticated influence operation against the 2016 elections.

It's attributed to a former senior Obama administration official, but it captures the view of many Democrats and now many opportunistic Republicans. President Donald Trump got in on the action on Monday morning when he tweeted: "The real story is that President Obama did NOTHING after being informed in August about Russian meddling."

It's tempting to grant Trump this point, despite Trump's own insistence during his campaign that there was no evidence Russia meddled in the election at all. Obama was the commander-in-chief when Moscow hatched this operation. It was his duty to defend our election.

But this isn't entirely fair. To start, by the time the CIA had gathered the intelligence in August about how President Vladimir Putin himself was trying to elect Trump over Hillary Clinton, the servers of the Democratic National Committee and other leading Democrats were already breached. Obama's government did inform state election officials about the prospect of hacking of voter rolls and helped make them more resilient. In the end, the Russians spread fake news and distributed the messages they hacked. They had the good fortune of a Republican candidate willing to amplify the pilfered emails. But there is no evidence that Russia changed the vote tallies or took voters off the registration rolls.

What's more, Trump himself had in the final weeks of the election suggested the vote itself would be rigged. Had Obama been more public in warning about the Russian influence operation, he would risk undermining the legitimacy of the election in the eyes of Trump's supporters, essentially aiding Russia's plan to undermine it before any votes were cast.

Rather than asking why Obama didn't do more to stop Russian meddling, the better question is why President Vladimir Putin thought he could get away with this interference in the first place. In every respect, the U.S. is more powerful than Russia. It has a much larger economy. Its military is superior. Its cyber capabilities are greater. Its diplomatic position is stronger. So why did Putin believe he could treat America like it was Estonia?

The answer is that Obama spent the first six years of his presidency turning a blind eye to Russian aggression. In his first term, Obama pursued a policy of "reset" with Moscow, even though he took office only five months after Russia had occupied two Georgian provinces in the summer of 2008. In the 2012 election, Obama mocked his Republican opponent, Mitt Romney, for saying Russia posed a significant threat to U.S. interests. Throughout his presidency, Obama's administration failed to respond to Russian cheating on arms-control agreements. His diplomacy to reach an agreement to temporarily suspend progress on Iran's nuclear program made the U.S. reliant on Russian cooperation for Obama's signature foreign policy achievement.

In the shadows, Russian spies targeted Americans abroad. As I reported in 2011 for the Washington Times, Russia's intelligence services had stepped up this campaign of harassment during the reset. This included breaking into the homes of NGO workers and diplomats. In one case, an official with the National Democratic Institute was framed in the Russian press on false rape charges. In 2013, when the Obama administration appointed Michael McFaul to be his ambassador in Moscow, the harassment got worse. McFaul complained he was tailed by cameramen from the state-owned media every time he left the Embassy for an appointment. He asked on Twitter how the network seemed to always know his private schedule.

The Washington Post reported that these incidents continued throughout the Obama administration. In June 2016, a CIA officer in Moscow was tackled and thrown to the ground by a uniformed guard with Russia's FSB, the successor agency of the KGB.

In 2011, the former Republican chairman of the Senate Select Committee on Intelligence, Christopher "Kit" Bond, told me: "It's not the intelligence committee that fails to understand the problem. It's the Obama administration.”

This lax approach to Russia was captured in the memoir of Obama's former defense secretary, Robert Gates. He wrote that Obama at first was angry at his FBI director, Robert Mueller, and his CIA director, Leon Panetta, for recommending the arrest in 2010 of a network of illegal Russian sleeper agents the FBI had been tracking for years.

"The president seemed as angry at Mueller for wanting to arrest the illegals and at Panetta for wanting to exfiltrate the source from Moscow as he was at the Russians," Gates wrote. He quoted Obama as saying: "Just as we're getting on track with the Russians, this? This is a throwback to the Cold War. This is right out of John le CarrĂ©. We put START, Iran, the whole relationship with Russia at risk for this kind of thing?” Gates recounts that the vice president wanted to ignore the entire issue because it threatened to disrupt an upcoming visit from Russia's president at the time, Dmitry Medvedev.

After some more convincing, Obama went along with a plan to kick the illegal spies out of the country in exchange for some Americans. But the insight into the thinking inside his Oval Office is telling.

Eventually, Obama responded to Russian aggression after its stealth invasion of Ukraine in 2014. He worked closely with European allies to impose sanctions on Russia for their violation of Ukraine's sovereignty. But he never agreed to sell the Ukrainians defensive weapons. In the final years of his presidency, as Wired magazine has recently reported, the Russians engaged in bold cyberattacks against Ukraine's electric grid. So far, the U.S. has not responded openly to that either.

Even after Russia's invasion of Ukraine, the Obama policy toward Russian aggression was inconsistent. As Foreign Policy magazine reported in May, Obama's State Department slow-rolled a proposal from the U.S. Mission to the United Nations to lay out a set of options to punish Russia's client Syria for its use of chlorine bombs against its own citizens in 2014. Russia and the U.S. forged the agreement in 2013 to remove chemical weapons from the country. In 2015, the Obama administration did nothing to deter Russia from establishing air bases inside Syria, preferring instead to support John Kerry's fruitless efforts to reach a cease-fire agreement with Russia in Syria. That inaction now haunts the U.S. as Russia declared its own no-fly zone this month in Syria, after U.S. forces shot down a Syrian jet.

All of this is the context of Putin's decision to boldly interfere in the 2016 U.S. elections. Perhaps Putin would have authorized the operation even if Obama had responded more robustly to Russia's earlier dirty tricks and foreign adventures. But it's easy to understand why Putin would believe he had a free shot. Russia probed American resolve for years. When Obama finally did respond, it was too late to save Ukraine and too late to protect our election.


Article Link To The Bloomberg View:

Expect A Coverup

Russia may have indeed affected the election, through the farcical Mr. Comey.


By Holman W. Jenkins, Jr.
The Wall Street Journal
June 28, 2017

In the Sunday Washington Post’s 7,000-word account of what President Obama knew about Russian election meddling and what he did about it, one absence is notable. Nowhere in the Post’s lengthy tick-tock is Mr. Obama presented with evidence of, or described as worried about, Trump collusion with Russia.

Moscow intervened in the election eight ways from Sunday, but it’s clearer than ever that what’s occupied Americans for the past six months are baseless accusations about the Trump campaign.

Among the evidence on Mr. Obama’s desk was proof that Vladimir Putin was personally directing the Russian espionage effort. For a variety of sensible reasons, though, the White House and U.S. intelligence also concluded that Russia’s meddling was “unlikely to materially affect the outcome of the election.”

President Obama made at least one inevitably political calculation: Hillary Clinton was going to win, so he would keep relatively mum on Russian interference to avoid provoking “escalation from Putin” or “potentially contaminating the expected Clinton triumph,” in the Post’s words.

Strangely missing from the Post account, however, is one Russian intervention, revealed by the paper’s own earlier reporting, that may really have, in farcical fashion, elected Donald Trump.

This was FBI Director James Comey’s ill-fated decision to clear Hillary Clinton publicly on intelligence-mishandling charges. His choice, it now appears, was partly shaped by a false intelligence document referring to a nonexistent Democratic email purporting to confirm that then-Attorney General Loretta Lynch had vowed to quash any Hillary charges.

On April 23, the New York Times first alluded to the document’s existence in an 8,000-word story about Mr. Comey’s intervention.

On May 24, the Post provided a detailed description of the document and revealed that many in the FBI considered it “bad intelligence,” possibly a Russian plant.

On May 26, CNN adumbrated that Mr. Comey “knew that a critical piece of information relating to the investigation into Hillary Clinton’s email was fake—created by Russian intelligence—but he feared that if it became public it would undermine the probe and the Justice Department itself.”

“In at least one classified session [before Congress],” CNN added, “Comey cited that intelligence as the primary reason he took the unusual step of publicly announcing the end of the Clinton email probe. . . . Comey did not even mention the other reason he gave in public testimony for acting independently of the Justice Department—that Lynch was compromised because Bill Clinton boarded her plane and spoke to her during the investigation.”

Why has this apparently well-documented, and eminently documentable, episode fallen down the memory hole, in favor of a theory for which there is no evidence, of collusion by the outsider Mr. Trump?

The alternative history is incalculable, but consider: If Mr. Comey had followed established practice, the Hillary investigation would have been closed without an announcement, or the conflicted Ms. Lynch or an underling would have cleared Mrs. Clinton. How would this have played with voters and the media? Would the investigation’s reopening in the race’s final days, with discovery of the Weiner laptop, have taken place? Would the reopening have become public knowledge?

The noisy, obnoxious ways Russia meddled amounted to nothing. The public was able to discount them. It was only through a bumptious act of our own law-enforcement community, in a way the public didn’t know at the time may have been influenced by planted Russian intelligence, that the Kremlin conceivably really may have affected an extraordinarily close race in the Electoral College.

What also emerges from the Post’s tick-tock, as well as from public testimony by U.S. intelligence chiefs, is that Russia did not seek to hide its meddling. The Russian goal was to sow confusion and bring disrepute on the U.S. leadership class. If so, any investigation of Russian meddling that fails to focus on the Comey actions will amount to a coverup.

Expect a coverup: The truth is absolutely unacceptable to the establishment that Special Counsel Robert Mueller represents. There is no appetite for the truth among Democrats: They cling to Mr. Comey’s legal exoneration of Mrs. Clinton in the server matter.

There is no appetite among Republicans: Messrs. Comey and Mueller are Republicans, promoted in their careers by Republican presidents. There is no appetite in the Trump White House, which doesn’t want its win tainted in history by a Russian dirty trick.

There is no appetite in the Kremlin: Mr. Putin knows that relations with the American superpower are slipping toward an all-out hostility that he can’t afford.

In the U.S., to acknowledge the truth would be to complete the task Russia set itself in discrediting the U.S. leadership class.

A coverup is the only way to go.


Article Link To The WSJ:

U.S. Tech Firms Feel The Heat In Europe

From Google to Apple, top American technology companies have been on the receiving end of tough EU decisions in recent years.


By Natalia Drozdiak and Jack Nicas
The Wall Street Journal
June 28, 2017

The European Union’s antitrust watchdog has handed down a string of big decisions in recent years against top U.S. technology firms, in what might look to U.S. companies and officials like a trend by Brussels to train investigations on large American companies.

EU officials deny any bias.

“We don’t go against Google because it’s an American company but because it’s a company abusing its dominant position in our market.… If it were in Brazil, we wouldn’t care,” a senior EU official said, referring to the EU’s €2.42 billion ($2.71 billion) fine Tuesday against Google for unfairly favoring its shopping ads in its search results.

EU competition officials are, to a large extent, constrained by antitrust rules and legal precedents when making decisions against any companies, be they American, European or otherwise. But unlike Washington, where U.S. enforcers need to prove their cases before a judge, the EU’s competition directorate acts as prosecutor, judge and jury in competition cases—and only needs to convince itself.

Experts say American tech companies are currently getting increased scrutiny because they happen to dominate the industry. This comes at a time when one of the top priorities for the European Commission, the bloc’s executive body, is to ensure the EU’s common market functions more efficiently online and across borders.

Asked Tuesday about the perception by some American officials and companies of an anti-U.S. bias in the bloc’s decisions, EU antitrust chief Margrethe Vestager said she had reviewed recent cases in different enforcement areas and consistently found that only a small number of the companies affected were American.

“I can find no facts to support any kind of bias,” Ms. Vestager said.

The EU’s decision on Tuesday to fine Alphabet Inc.’s GOOGL -2.47%Google follows other recent tough decisions against large tech firms.

The EU last August ordered Apple Inc.AAPL -1.43% to pay Ireland €13 billion in allegedly unpaid taxes and in May fined Facebook Inc. €110 million for providing incorrect information or misleading authorities over the acquisition of its messaging unit WhatsApp. A spokesman for Facebook, which didn’t appeal the decision, said at the time: “We’ve acted in good faith since our very first interactions with the commission and we’ve sought to provide accurate information at every turn.”

The series of decisions come at a time when European tech firms have fallen behind their U.S. counterparts. While Europe led the way in the global smartphone push, it hasn’t been able to foster its own Apple, Facebook or Google.

That backdrop has critics of the EU’s moves crying foul.

Apple said in December when it appealed the EU’s tax decision that regulators were unfairly targeting the company. “It’s been clear since the start of this case that there was a predetermined outcome,” an Apple spokeswoman said at the time.

Former U.S. President Barack Obama in 2015 said the EU’s investigations into U.S. tech companies like Google and Facebook were “more commercially driven than anything else.”

“Their service providers who, you know, can’t compete with ours—are essentially trying to set up some roadblocks for our companies to operate effectively there,” tech news website ReCode reported Mr. Obama as saying in an interview.

The European approach to regulating tech companies clashes with that of authorities in the U.S., which have recently used a more hands-off approach, experts say.

“The vast success of Silicon Valley has been fostered by a deregulated marketplace, but this causes problems when these businesses do business against the very different legal backdrop operating in Europe,” said Susan Hall, a Manchester, England-based partner at law firm Clarke Willmott LLP who specializes in intellectual property and information technology. Ms. Hall represents clients ranging from multinationals, government departments, universities to start-ups.

Particularly in cases involving tech firms’ handling of personal data, Europe’s more ingrained sensitivities about privacy have taken precedence over what, in the U.S., would be deference to the First Amendment in regard to the freedom of speech and press. For instance, French regulators have ordered Google and other search engines to comply when a European asks the companies to remove links in searches for their own name, if the information is old, irrelevant or infringes on their privacy.

In the U.S., the Federal Trade Commission closed its own probe into Google’s search practices in 2013, after the company agreed to voluntary changes. That decision came despite internal recommendations by the agency’s bureau of competition to bring a lawsuit challenging three Google practices. A separate report from the FTC’s economic bureau didn’t favor legal action.

The FTC appears unlikely to restart an investigation of Google soon, in part because the commission’s leadership remains uncertain and three of the five commissioner slots are vacant. Acting Chairwoman Maureen Ohlhausen, a Republican, voted to close much of the antitrust investigation into Google four years ago. An FTC spokesman declined to comment.

Still, Trump administration officials have considered Utah Attorney General Sean Reyes, a vocal Google critic, for the leadership post, and he has been backed by several firms opposing Google, including Yelp Inc., Oracle Corp. and News Corp , the owner of The Wall Street Journal and an interested third party in the shopping case, meaning it can participate in the investigation. News Corp has also formally complained to the EU about Google’s handling of news articles in search results. The EU doesn’t have an active case/probe of Google’s handling of news stories.

The nominee for the Justice Department’s antitrust chief, Makan Delrahim, has also pledged to make international antitrust issues a priority, but his nomination is one of many awaiting confirmation from the Senate.

Some U.S. senators have also been critical of Google in recent months. Sen. Richard Blumenthal, (D., Conn.) called on the FTC to investigate the tech giant. The EU action is the latest “evidence suggesting Google has repeatedly and consistently abused international competition law,” he said. “Here in the United States, the FTC must confront the mounting evidence that Google is manipulating search results in anticompetitive ways and possibly running afoul of our antitrust laws.”

Sen. Amy Klobuchar (D., Minn.) said Tuesday that dominant internet platforms increasingly affect users’ information and shopping choices and small businesses’ economic opportunities. She said she is committed to ensuring “the internet is an engine to increase economic opportunity and protect consumers in the 21st century economy.”

The beneficiary of the regulatory moves in Brussels often aren’t just European firms. Many of the complainants in the EU investigations into Google, for instance, are U.S. companies that have sought antitrust action in Europe after the FTC closed its investigation of Google.

Yelp, Oracle, News Corp, Expedia Inc. and TripAdvisor Inc. have all filed formal complaints in some of the EU’s cases against Google. And there are more unnamed U.S. companies lobbying European regulators for action, said Luther Lowe, Yelp’s head of public policy.

“The not-so-well-kept secret of this process is that U.S. companies have been doing the lion’s share of the work,” Mr. Lowe said in an interview. Yelp has complained that Google’s use of its own user reviews in its search results, instead of those of Yelp or other user-review sites, is bad for consumers.

Mr. Lowe said U.S. firms could push for action in their home country, making the case that European internet users enjoy better protections than American consumers. “Suddenly the FTC or state attorneys general must be asking themselves: Why don’t consumers in my state or country have those same protections?” he said.


Article Link To The WSJ:

Google Is Fighting A Losing Battle With The EU

Appealing the $2.7 billion fine won't pay off. Just ask Microsoft.


By Leonid Bershidsky
The Bloomberg View
June 28, 2017

The unexpectedly large fine the European Commission has slapped on Google -- 2.4 billion euros ($2.7 billion) -- is evidence that the search giant's relationship with European regulators is now a vicious circle of escalation. Google's reluctance to give up any revenue from its fastest-growing ad format may lead to significant, unpredictable losses in its biggest market outside the U.S.

The case in which Competition Commissioner Margrethe Vestager announced the fine on Tuesday is seven years old. It began when the U.K. shopping comparison engine Foundem complained to the commission that Google was promoting its own rival service, then called Google Product Search and later renamed Google Shopping, to the detriment of competitors. The case grew as other European and U.S. companies jumped on the bandwagon. Google thought its troubles were over in 2014 when it almost agreed on a settlement with Vestager's predecessor Joaquin Almunia -- but the complainants were acutely unhappy with the proposed document. They didn't want to buy ads that Google promised to place at the top of the search results page, insisting instead that Google display "organic" results.

One could argue whether such a thing as "organic" search is even possible with a proprietary algorithm, but that was moot -- the complainants were on the warpath, so Google decided to fight it out. Vestager apparently responded to the challenge by spending countless hours of her staff's time studying terabytes of evidence to make a solid case. In the process, the commission's investigation expanded with one case dealing with AdSense ads and another with the Android mobile operating system.

Google is nothing if not rational. It would have agreed to a compromise had the stakes been lower. But so-called product listing ads -- the kind displayed in the Google Shopping modules that appear to the right of search results if your query looks like you're trying to buy something -- have been growing faster in recent years than Google's traditional text ads. In the first quarter of this year, they accounted for more than half of retail search ad clicks, and advertiser spending on them rose 32 percent year-on-year. Making these ads less prominent or removing them from search results altogether would have resulted in a sharp revenue drop. Vestager is aware of that, and the size of the fine reflects her intention to drive home to Google that noncompliance won't be worth it.

If the commission deems that Google hasn't changed its behavior within 90 days, it will start charging an additional daily fine of up to 5 percent of Google's global daily revenue, currently about $12.5 million. Besides, Vestager said on Tuesday that Google's competitors were now liable to sue it in national courts using the commission's decision as justification for further rewards.

The economics of continuing the fight aren't really in Google's favor now. Its parent company, Alphabet, made $8.1 billion of revenue in Europe, the Middle East and Africa in the first quarter of the year. That's a third of its revenue and probably a higher share of net income, given that it barely pays any taxes in Europe (according to Google's 2016 annual report, the "foreign tax differential" reduced its effective tax rate by 11 percentage points). If Europe accounts for 40 percent of the company's net income, it delivered $2.2 billion to Alphabet in the first quarter. Vestager's fine alone eats up more than that. The maximum daily noncompliance fine would destroy almost two quarters' profit in a year. And then there are almost certain further penalties from national courts. It's worth losing some -- not all -- of the product listing ad revenue to avoid such an outcome.

Google has announced that it "respectfully disagrees" with the commission's decision and intends to look into appealing it. That's a difficult path to take -- just ask Microsoft, which fought the commission with all it could and lost all of its appeals in eight years of litigation. In fact, the commission has a strong record in abuse of monopoly position cases. From 2000 to 2011, the EU's General Court did not fully annul a single one of the 14 commission decisions that were appealed to it, though it canceled parts of four decisions. It has revised only two out of 11 fines. In subsequent years, not a single large fine has been overturned.

It's possible that Intel, hit with a 1.06 billion euro fine last year for offering rebates to computer makers for buying most of their chips from it, and not from competitor AMD, will shoot a hole in that record in 2018. After losing in the General Court, Intel appealed the commission's decision in the European Union's highest court, the Court of Justice. Last fall, one of that august body's Advocates General -- advisers whose briefs are mostly followed by the judges -- delivered an opinion in Intel's favor. This preliminary success is encouraging to Google. But then, the case against Intel appears weaker: It's harder to prove that its rebates hurt the competition or consumers than to demonstrate that Google's preferential display of its own product listings took traffic away from competitors.

Google's case isn't easy to argue. Its market position in Europe in unquestionably dominant. It has, and uses, the power to promote offerings from retailers who pay it. It hasn't seen fit to promote other comparison services.

As a consumer, I'm actually on Google's side: I've found that Google shopping works better than the competition. No one is really limited to using the service that is displayed the most prominently on the first search result page; I've gone to check out some others and was underwhelmed.

But from a risk-reward perspective, Google should probably stand down and agree a remedy with Vestager's office, in this and the other two cases. By playing nice for a change, Google can, among other things, reduce the likelihood of new investigations. Its tax arrangements in Europe are highly suspect. It promotes its own restaurant and travel listings over those of rivals. It's a big fat target, and the commission is unlikely to leave it alone if it plays the insolent American cowboy. Yes, there's always this element of anti-Americanism to punitive European rulings against big U.S. companies -- but then it's usually worth it to go local in large markets such as Europe and try to play by the rules, even if they don't always seem fair.


Article Link To The Bloomberg View:

Madoff Settlements Reach $12 Billion With New Accords

By Jonathan Stempel
Reuters
June 28, 2017

The trustee recouping money for Bernard Madoff's victims on Tuesday announced nearly $371 million of new settlements with two groups of offshore funds that invested with the imprisoned Ponzi schemer, boosting the total recovery to about $12 billion.

Irving Picard, the trustee, said Lagoon Investment Ltd agreed to repay $240.7 million from an account through which Hermes International Fund Ltd invested with Madoff, while Thema Fund Ltd and an affiliate agreed to repay $130.1 million.

Picard announced the settlements with British Virgin Islands-based Lagoon and Bermuda-based Thema one day after revealing more than $23 million of settlements with the estates of Madoff's late sons Andrew and Mark, and entities affiliated with the Madoff family.

Lagoon and Thema were among many feeder funds that sent customers' money, often without their knowledge, to Bernard L. Madoff Investment Securities LLC.

Picard said the recovered sums represent money withdrawn in the six years before Madoff's fraud was uncovered in December 2008.

Like many other former Madoff customers that settled with Picard, Lagoon and Thema will be entitled to share in distributions from the Madoff firm's liquidation.

Picard had previously recovered more than $11.6 billion for Madoff customers who he estimates lost $17.5 billion.

The trustee and Baker & Hostetler have been awarded more than $889 million of compensation for their work on Madoff matters through Nov. 30, 2016, according to an order signed by U.S. Bankruptcy Judge Stuart Bernstein, who oversees the process.

A hearing to consider approving the settlements with Lagoon, Thema and the Madoff sons' estates has been set for July 26.

Andrew Madoff died of cancer in September 2014 and Mark Madoff committed suicide in December 2010. Bernard Madoff, 79, is serving a 150-year prison term.

The case is Securities Investor Protection Corp v. Bernard L. Madoff Investment Securities LLC in the same court, No. 08-01789.


Article Link To Reuters:

Ransomware Becomes Go-To Hack As Bitcoin Rallies, NSA Tools Leak

Tuesday’s extortion hacks locked computers from Europe to U.S.; Ransomware demands rising as payouts top seven figures.


By Jordan Robertson
Bloomberg
June 28, 2017

A recent outbreak of ransomware attacks, from the WannaCry worm in May to Tuesday’s infection of thousands of computer systems around the globe, shows that digital stickups are becoming the go-to hack for cybercriminals, fueled by powerful leaked U.S. government exploits and the rise of bitcoin and other anonymous digital currencies.

Tuesday’s attack showed no signs of slowing down, as cybersecurity researchers had not found a kill switch similar to the one that allowed them to stop WannaCry after it had infected hundreds of thousands of computer in more than 150 countries, preventing it from becoming one of the worst attacks on record.

The new infections, which appeared concentrated in Ukraine before spreading globally, are a sign that ransomware is becoming a routine risk of doing business, as other forms of attacks get less profitable. Banks and retailers have strengthened their defenses, driving the price for stolen credit card numbers down to as little as 50 cents apiece, according to research from Symantec Corp., the biggest cybersecurity software maker. But ransomware demands are on the rise, nearly tripling from an average of about $300 per computer infected in 2015 to more than $1,000 each last year, Symantec said. Earlier this month, a South Korean web hosting company agreed to pay more than $1 million to unlock its servers in what’s believed to be the biggest ransomware payout on record.

"The new versions of ransomware are the perfect crime," said Jack Danahy, co-founder of Barkly Protects Inc., a Boston-based cybersecurity firm. "It’s super-easy to do -- monkeys could do it -- and the profits are remarkably high. And the third thing that makes it perfect is anonymity, because nobody wants to get caught. That’s why this thing is growing."

It’s possible that Tuesday’s outbreak may not spread as quickly or be as damaging as WannaCry, whose early victims included hospitals in the U.K. that had to shut some services while dealing with cleanup. The new malware uses an exploit called EternalBlue to spread by taking advantage of vulnerabilities in Microsoft Corp.’s Windows operating system, similar to WannaCry. But many of those weaknesses have been patched for months -- meaning that many computers already have protection against its key propagation mechanism.

The new malware does have additional capabilities that let it spread by other means through internal networks, so anyone who clicks on a malicious email attachment could put their entire organization at risk.

The rise of ransomware has coincided with two other major changes in the cyber black market. The first is the growing amount of leaked attack tools from the U.S. government available online. The second is the growing use of digital currencies, which give hackers an easy and potentially anonymous way to get paid. The malware unleashed Tuesday demands payment of $300 in bitcoin. The reason many ransomware operators ask for relatively small payments is that the amount needs to be low enough that enough people will pay, but high enough that it’s worth the effort to attack. Given the secretive nature of cryptocurrencies and the shadowy world in which cybercriminals operate, it’s virtually impossible to get an accurate read on exactly how much the hackers rake in.

Because there’s a glut of credit card and identity data for sale on the black market, it’s gotten harder for criminals to get paid, said Jeremiah Grossman, chief of security strategy for SentinelOne. But rather than try to sell data to a third party, attackers instead encrypt it -- demanding that the victim pay to get it back.

"Who better to value the data than the owner of the data?" Grossman said. "It’s market forces at work."

There are signs that hackers are shifting tactics in favor of ransomware. According to a study by IBM, the amount of spam containing ransomware surged to 40 percent by the end of 2016 from just 0.6 percent in 2015. While many ransomware attacks are blocked by security software, the number of infections getting through is growing. Symantec said it detected 463,000 ransomware infections in 2016, 36 percent higher than the year before.

But Tuesday’s attack contained some puzzling elements to security experts, raising concerns that it may not have been about payment at all.

Like WannaCry, which the U.S. government has reportedly linked to North Korea, the new attack does not have the usual characteristics associated with hackers who want to maintain control of the infected computers and facilitate payment and easy decryption of locked files. That the hardest hit country is Ukraine, whose power grid and other critical systems have been the target of repeated high-level hacking attacks blamed on the Russian government, raised suspicions among some researchers that another motive could be at play. Anton Gerashchenko, an aide to the Interior Ministry in Ukraine, wrote on Facebook that the goal appeared to be “the destabilization of the economic situation and in the civic consciousness of Ukraine” even though it was “disguised as an extortion attempt."

"There’s something weird about this one," added SentinelOne’s Grossman.


Article Link To Bloomberg:

Shkreli Loses Mistrial Bid And Retaliates Against Reporters

Defense lawyers cite negative press about jurors’ opinions; Shkreli buys internet domains in Post reporter’s name.


By Misyrlena Egkolfopoulou and Patricia Hurtado
Bloomberg
June 28, 2017

Martin Shkreli’s criminal fraud trial jury hasn’t been selected yet and already the brash pharmaceutical executive tried to get the case thrown out of court and lashed out at reporters covering his case.

Before court started, Shkreli announced early Tuesday on his Facebook page that he bought the Internet domain names www.emilysaul.com and www.megtirrell.com. Emily Saul is covering the trial for the New York Post while Meg Tirrell is a CNBC reporter.

Once in court, Shkreli’s lawyer Benjamin Brafman said the current jury pool was tainted, citing media coverage of the negative opinions prospective jurors expressed about his client during questioning on Monday. The New York Post’s front page carried the headline “Jury of his Jeers.”

While scores of people were dismissed from jury service Monday for various reasons, including work conflicts and vacations, about a dozen expressed bias against Shkreli. One young woman called him “an evil man,” another said he looked like a “snake” and a third said she knew he’d been labeled “the most hated man in America.”

Brafman asked U.S. District Judge Kiyo Matsumoto in Brooklyn, New York, to dismiss the current pool of jurors, saying they were tarnished by the bad publicity, and asked to restart the trial in a few weeks.

“I understand Mr. Shkreli, God bless him, has brought this notoriety upon himself,” Brafman told the judge. Nevertheless, Shkreli has the right to have jurors who aren’t biased, he said. “This jury has been unfairly tainted.” To buttress his argument, Brafman read from news accounts as Shkreli smiled, jutted out his jaw and hammed it up.

While Matsumoto rejected Brafman’s request, she later asked potential jurors if they’d seen those accounts. Four people said yes and were later excused.

The judge questioned more than 100 people, and at the end of court directed 47 prospective jurors to return Wednesday. She’s also ordered a new panel of about 150 to court to continue the selection process and said opening statements could begin Thursday morning.

By requesting a mistrial, Brafman is now free to raise the issue of a tainted jury on appeal, should Shkreli be convicted.

Shkreli, the 34-year-old founder of Retrophin Inc. and Turing Pharmaceuticals AG, is accused of defrauding investors in two hedge funds and using $11 million of Retrophin assets to pay them off.

He bought the domain names “to raise money for my debut album ‘God’s Gift: The Album,”’ he said in the Facebook post. “I bought these domains for $12 -- you can have them for $12,000.” He then typed “Tryna to get that Future feature doe.” It’s not clear what he meant by that.

In a pre-trial hearing last week, prosecutor Alixandra Smith noted that while Shkreli complained that he had no money, he was still buying up domain names of reporters who cover him.

Shkreli is notorious for having raised the price of a potentially life-saving drug by 5,000 percent. He’s also been an active on social media. He has live-streamed his daily activities and was an active user of Twitter until he was banned for harassing a female reporter.

During questioning of would-be jurors Tuesday, Shkreli’s life online was a recurrent theme. One young man in his 20s told the judge that he’d seen some of Shkreli’s comments on social media and was later dismissed. Outside of the man’s presence, Brafman complained to the judge that Shkreli’s Twitter commentary “is probably the most prejudicial part” of his client’s personae. “Unfortunately, this Twitter history is just horrific and would never be allowed into this courtroom.”

When Matsumoto finally encountered a woman in her 20s who said she hadn’t heard of Shkreli or his case, she seemed delighted.

“Oh, very good,” she said, allowing the woman to remain as a prospective juror.

The case is U.S. v. Shkreli, 15-cr-00637, U.S. District Court, Eastern District of New York (Brooklyn).


Article Link To Bloomberg:

'What's The Rush' On Interest Rate Hikes, Asks Fed's Kashkari

By Ann Saphir
Reuters
June 28, 2017

With inflation low and wages showing little sign of an upward surge, the U.S. Federal Reserve should not be raising interest rates, Minneapolis Fed President Neel Kashkari said on Tuesday.

"What's the rush?" Kashkari asked at an event at Michigan Technological University in Houghton, Michigan, adding that neither wage nor inflation data is giving any sign that the economy is about to overheat and indeed may suggest that there is still some slack in the labor market.

The Fed raised rates twice this year, including earlier this month, and Kashkari dissented both times.

He disagrees with Fed Chair Janet Yellen, who sees unemployment at a 16-year low and projects inflation will necessarily move toward the Fed's 2 percent target. Yellen says the Fed needs to keep raising rates to prevent inflation from overshooting.

Though Kashkari failed to persuade his colleagues in June that they should leave rates alone, he continues to make his case for it. On Tuesday, he repeated his view that with inflation weakening in recent months, "I don't see what we are so worried about."

"Why are we trying to cool down the economy, when there may still be some slack in the job market, and there is still some room to run on the inflation front?" he said. "We're not seeing wages climb very fast, and we're not seeing inflation. That tells me the economy is not on the verge of overheating."


Article Link To Reuters: