Saturday, March 4, 2017

Today's Links

More proof Trump is setting the markets up for another Crash--

From the WSJ:  "Under federal law, investment advisers must put their clients’ interest ahead of their own financial gain....The acting head of the Securities and Exchange Commission, Michael Piwowar, blasted the “fiduciary” rule.. .saying “I think it is a terrible, horrible, no good, very bad rule.”

"The real issue is capitalism’s incessant search for profit that severely destabilizes both society and the environment. I think there is no longer any illusion, even among its defenders, that capitalism is prone to crises, and these days, these are crises that not only stem from the dynamics of production but from the dynamics of finance.

We need to work towards a post-capitalist system that aims at promoting equality, enhances instead of destroys the environment, is based on cooperation, and is engaged in planning to achieve short term, medium term, and long-term goals. In this scheme, finance would function to link savings to investment and savers to investors, instead of becoming an autonomous force whose dynamics destabilizes the real economy. A post-capitalist society does not mean the elimination of the market. But it does mean making use of the market to achieve democratically decided social goals rather than having the market drive society in an anarchic fashion."  An Interview with Walden Bello

"In summary: the Obama administration sought, and eventually obtained, authorization to eavesdrop on the Trump campaign; continued monitoring the Trump team even when no evidence of wrongdoing was found; then relaxed the NSA rules to allow evidence to be shared widely within the government, virtually ensuring that the information, including the conversations of private citizens, would be leaked to the media."  Sic semper Tyrannous-Comments section--Pundita

1--Trump Caves In-- Trump indicates he might halt Russia deal amid tension over alleged ties to Moscow

Facing a new wave of questions about his ties to Russia, President Donald Trump is telling advisers and allies that he may shelve — at least temporarily — his plan to pursue a deal with Moscow on the Islamic State group and other national security matters, according to administration officials and Western diplomats.

In conversations with diplomats and other officials, Trump and his aides have ascribed the new thinking to Moscow's recent provocations. But the reconsideration of a central tenet of the president's foreign policy underscores the growing political risks in forging closer relations with Russia, as long as the FBI investigates his campaign associates' connections to Moscow and congressional committees ramp up their probe of Russia's meddling in the 2016 election.

The controversy has already led to the firing of Trump's national security adviser, Michael Flynn, who misled officials about his contacts with the Russian ambassador, and to calls by Democrats for Attorney General Jeff Sessions to resign after he failed to disclose his own meetings with the envoy.

Trump's new skepticism about brokering a deal with Moscow also suggests the rising influence of a new crop of advisers who have taken a tougher stance on Russia, including Defense Secretary Jim Mattis and new national security adviser H.R. McMaster. During his first meeting with National Security Council staff, McMaster described Russia — as well as China — as a country that wants to upend the current world order, according to an administration official who attended the meeting.

2--Ireland's Dark Past--Children’s Remains Found at Irish Site of Former Home for Unwed Mothers

Discovery confirms suspicions of mass graves; Tests suggest remains date from 1925-1961

Investigators in Ireland said Friday they have discovered children’s remains at the site of a former home for unmarried mothers, a grim discovery that revives painful national memories of the harsh conditions at some institutions set up to care for the vulnerable.

Excavations in Tuam, some 120 miles from Dublin in western Ireland, uncovered the remains of fetuses and children, according to a commission established in 2015 to probe claims of deaths at state-sponsored mother-and-baby homes.

Katherine Zappone, the Irish government’s minister for children, said the find, while “sad and disturbing,” wasn’t unexpected as “strong suspicions” of mass graves at the site have swirled for years. A memorial garden to the home’s residents already exists nearby.

3--Wrong Man for the Job-- Trump’s Man for the SEC: Time to Ease Regulation

Jay Clayton’s legal work has dealt with some of the biggest challenges agency has faced

Mr. Clayton, a partner at Sullivan & Cromwell LLP who has represented Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc.,...

He “gets big corporations and the need for raising capital,” said Robert Evans III, a partner at Shearman & Sterling LLP who has known Mr. Clayton through legal circles. “It’s a welcome change from having somebody with an enforcement bent running the commission.”...

Mr. Clayton’s wife, Gretchen Butler Clayton, has worked at Goldman Sachs since February 2000, though she plans to resign if the Senate confirms her husband, according to a person familiar with the matter. A financial adviser to wealthy households and high net-worth individuals, she also plans to sell stock she owns in the firm if Mr. Clayton is confirmed, the person said.

A big question facing Mr. Clayton is his stance on the 2010 Dodd-Frank financial overhaul law that aimed to rein in bank risk-taking after the financial crisis. Even if Republicans in Congress don’t succeed in their goal of repealing major sections of Dodd-Frank, the deliberations would provide Mr. Clayton with enough political cover to pursue other priorities such as easing corporate disclosure requirements. The agency’s acting chairman, Republican Michael Piwowar, already has frozen action on unfinished Dodd-Frank rules.

Mr. Clayton worries that certain rules, including some from the congressional response to the Enron Inc. accounting scandal, have become too burdensome for small companies trying to raise capital, according to a person familiar with his thinking

4---Fox watching the henhouse-- SEC’s Piwowar: Obama-Era Retirement-Savings Rule Boon for Trial Lawyers -- Acting SEC head calls the rule ‘highly political’ and was ‘never about investor protection’

The acting head of the Securities and Exchange Commission blasted a regulation opposed by stockbrokers and the Trump administration, saying the rule was written to “increase profits” for trial lawyers.

Michael Piwowar Thursday added his voice to a strident debate over the future of the retirement-savings regulation known as the “fiduciary” rule. The Labor Department plans to delay the rule by 60 days, setting the stage for its repeal or considerable revision.

Mr. Piwowar said the rule was “highly political” and was “never about investor protection.”


The regulation, widely opposed by Republicans in Congress, would hold brokers to a higher standard when they advise investors saving for retirement. Under the rule, investors using individual retirement accounts would have a new right to sue brokers who don’t adhere to the best-interest standard. Wall Street groups have said the SEC should have written the rule because the agency oversees all of Wall Street, not only retirement accounts such as IRAs and 401Ks.

“I have a very nuanced view of the DOL fiduciary-duty rule,” Mr. Piwowar said at a conference sponsored by the Investment Adviser Association. “I think it is a terrible, horrible, no good, very bad rule.”...

Mr. Piwowar’s comments show how unlikely the SEC is to propose stricter standards for brokers even if the Labor Department’s effort is rescinded.

If the SEC were to draft its own version of the rule, the commission should focus its efforts much more narrowly, perhaps by restricting the practice of brokers holding themselves out as “financial advisers,” Mr. Piwowar said. The title may confuse investors who don’t understand that the person might be a broker, not an investment adviser, who is held to a higher standard under the law, he said.

“If someone calls themselves a financial adviser, that means absolutely nothing,” he said.

Under federal law, investment advisers must put their clients’ interest ahead of their own financial gain. Brokers are held to a lower standard of care, known as suitability, that says investment recommendations must fit a client’s goals or risk tolerance.

5--Yellen's plan to dampen the Trump stock surge-- Fed Officials Indicate Rate Increase Is Likely in March--Chairwoman Janet Yellen says ‘a further adjustment of the federal-funds rate would likely be appropriate’ at this month’s Fed meeting

The Fed’s preferred inflation measure in January rose 1.9% from a year earlier, putting the gauge closer to the central bank’s long-run objective of 2% than at any time since 2012.
The U.S. labor market has notched steady gains. Employers added 227,000 jobs in January, and the unemployment rate stood at 4.8%....

Spacing out rate increases could also tamp down the urgency to address the Fed’s $4.5 trillion holdings of bonds and other assets, or its balance sheet. While the meeting this month is likely to include discussions on how to manage the balance sheet, top officials have signaled they are nowhere near ready to begin winding it down....

She and other top officials have also doused the idea, floated recently by regional bank presidents, that shrinking the balance sheet could be used as a complementary tool for tightening monetary policy. The federal-funds rate “is our traditional tool,” she told lawmakers. “It’s the one that we have the most confidence in.”...

Fed officials don’t want to wait too long to move and risk letting the economy overheat, which could require them to raise rates more rapidly later, possibly causing a recession, Ms. Yellen said. She added that she didn’t see any evidence the bank was “behind the curve” or moving so slowly that it risked letting the economy overheat.

Fed officials in December nudged up the federal-funds rate by a quarter percentage point, to between 0.50% and 0.75%, and said they expected to raise rates this year by another 0.75 percentage point, likely in three quarter-point moves. Ms. Yellen on Friday described that projection as “consistent” with the bank’s expectation for a gradual pace of rate increases.

Since then, the economic outlook has unfolded largely in line with Fed expectations. “There is almost no economic indicator that has come in badly in the last three months,” Fed Vice Chairman Stanley Fischer said Friday at a conference in New York....

The Fed’s preferred inflation measure in January rose 1.9% from a year earlier, putting the gauge closer to the central bank’s long-run objective of 2% than at any time since 2012.
The U.S. labor market has notched steady gains. Employers added 227,000 jobs in January, and the unemployment rate stood at 4.8%.

6--President Trump could be on a collision course with the Fed

Trump is proposing spending programs that seem to imply the economy is weak and in desperate need of help.
But Yellen doesn't see it that way. The economy is clearly in a recovery mode, and she seems ambivalent about how much additional fiscal stimulus the economy might need.

What Yellen and company think about the Trump plan matters a lot. If Trump gets his way and suddenly we have a large tax cut — with additional spending hikes in the form of defense spending and infrastructure — it's likely the Fed will view that as a notable risk to their inflation outlook, just as it looks like they might finally be getting to that elusive 2 percent target.
That means it's far more likely the Fed will get much more aggressive raising rates—we could be talking about the possibility of four rate hikes this year.

7--“Most of the World is Just Collapsing in Laughter” on Claims that Russia Intervened in the US Election: An Interview with Noam Chomsky

8--An Interview with Walden Bello (Brilliant!)

What three things could have been done, “truer” to the spirit of Keynesianism, that would have reduced the recession?

A: First of all, there should have been a much bigger stimulus, one along the lines of Cristina Romer’s proposal of $1.8 trillion. Second, instead of focusing on saving the banks, the government should have devoted resources to assisting the millions of troubled homeowners, a move which would have raised effective demand. Third, the insolvent banks should have been taken over or nationalized and the billions spent on recapitalizing them or guaranteeing their borrowing should have been devoted to creating jobs to absorb the unemployed....

Q: What has been the legacy of the crisis on U.S. politics?--

A: One can say that the Obama administration’s failure to reinvigorate the economy after eight years and to reform the banks was the central factor that lost the elections for Hillary Clinton. If there’s one certainty that emerged in the 2016 elections, it was that Clinton’s unexpected defeat stemmed from her loss of four so-called “Rust Belt” states: Wisconsin, Michigan, and Pennsylvania, which had previously been Democratic strongholds, and Ohio, a swing state that had twice supported Barack Obama.

The 64 Electoral College votes of those states, most of which hadn’t even been considered battlegrounds, put Donald Trump over the top. Trump’s numbers, it is now clear, were produced by a combination of an enthusiastic turnout of the Republican base, his picking up significant numbers of traditionally Democratic voters, and large numbers of Democrats staying home.
But this wasn’t a defeat by default. On the economic issues that motivate many of these voters, Trump had a message: The economic recovery was a mirage, people were hurt by the Democrats’ policies, and they had more pain to look forward to should the Democrats retain control of the White House.

The problem for Clinton was that the opportunistic message of this demagogue rang true to the middle class and working class voters in these states, even if the messenger himself was quite flawed. These four states reflected, on the ground, the worst consequences of the interlocking problems of high unemployment and deindustrialization that had stalked the whole country for over two decades owing to the flight of industrial corporations to Asia and elsewhere. Combined with the financial collapse of 2007-2008 and the widespread foreclosure of the homes of millions of middle class and poor people who’d been enticed by the banks to go into massive indebtedness, the region was becoming a powder keg of resentment.

True, these working class voters going over to Trump or boycotting the polls were mainly white. But then these were the same people that placed their faith in Obama in 2008, when they favored him by large margin over John McCain. And they stuck with him in 2012, though his margins of victory were for the most part narrower. By 2016, however, they’d had enough, and they would no longer buy the Democrats’ blaming George W. Bush for the continuing stagnation of the economy.

Clinton bore the brunt of their backlash, since she made the strategic mistake of running on Obama’s legacy—which, to the voters, was one of failing to deliver the economic relief and return to prosperity that he had promised eight years earlier.

9--Obama Ordered Abuse Of Intelligence To Sabotage Trump Policies

In its last months the Obama administration ordered the intelligence agencies to collect and distribute information of contacts between the Trump campaign and Russia. This to prevent any change by the Trump administration of the hostile policy towards Russia that the Obama administration instituted. The intent was also gives the intelligence services blackmail material to prevent any changes in their undue, freewheeling independence.

10-- Obama illegally spies on Trump campaign--comments section--Pundita

October: FISA request. The Obama administration submits a new, narrow request to the FISA court, now focused on a computer server in Trump Tower suspected of links to Russian banks. No evidence is found — but the wiretaps continue, ostensibly for national security reasons, Andrew McCarthy at National Review later notes. The Obama administration is now monitoring an opposing presidential campaign using the high-tech surveillance powers of the federal intelligence services.

5. January 2017: Buzzfeed/CNN dossier. Buzzfeed releases, and CNN reports, a supposed intelligence “dossier” compiled by a foreign former spy. It purports to show continuous contact between Russia and the Trump campaign, and says that the Russians have compromising information about Trump. None of the allegations can be verified and some are proven false. Several media outlets claim that they had been aware of the dossier for months and that it had been circulating in Washington.

6. January: Obama expands NSA sharing. As Michael Walsh later notes, and as the New York Times reports, the outgoing Obama administration “expanded the power of the National Security Agency to share globally intercepted personal communications with the government’s 16 other intelligence agencies before applying privacy protections.” The new powers, and reduced protections, could make it easier for intelligence on private citizens to be circulated improperly or leaked.

7. January: Times report. The New York Times reports, on the eve of Inauguration Day, that several agencies — the Federal Bureau of Investigation (FBI), the Central Intelligence Agency (CIA), the National Security Agency (NSA) and the Treasury Department are monitoring several associates of the Trump campaign suspected of Russian ties. Other news outlets also report the existence of “a multiagency working group to coordinate investigations across the government,” though it is unclear how they found out, since the investigations would have been secret and involved classified information.

8. February: Mike Flynn scandal. Reports emerge that the FBI intercepted a conversation in 2016 between future National Security Adviser Michael Flynn — then a private citizen — and Russian Ambassador Sergey Kislyak. The intercept supposedly was part of routine spying on the ambassador, not monitoring of the Trump campaign. The FBI transcripts reportedly show the two discussing Obama’s newly-imposed sanctions on Russia, though Flynn earlier denied discussing them. Sally Yates, whom Trump would later fire as acting Attorney General for insubordination, is involved in the investigation. In the end, Flynn resigns over having misled Vice President Mike Pence (perhaps inadvertently) about the content of the conversation.

February: Times claims extensive Russian contacts. The New York Times cites “four current and former American officials” in reporting that the Trump campaign had “repeated contacts with senior Russian intelligence officials. The Trump campaign denies the claims — and the Times admits that there is “no evidence” of coordination between the campaign and the Russians. The White House and some congressional Republicans begin to raise questions about illegal intelligence leaks.

10. March: the Washington Post targets Jeff Sessions. The Washington Post reports that Attorney General Jeff Sessions had contact twice with the Russian ambassador during the campaign — once at a Heritage Foundation event and once at a meeting in Sessions’s Senate office. The Post suggests that the two meetings contradict Sessions’s testimony at his confirmation hearings that he had no contacts with the Russians, though in context (not presented by the Post) it was clear he meant in his capacity as a campaign surrogate, and that he was responding to claims in the “dossier” of ongoing contacts.

The New York Times, in covering the story, adds that the Obama White House “rushed to preserve” intelligence related to alleged Russian links with the Trump campaign. By “preserve” it really means “disseminate”: officials spread evidence throughout other government agencies “to leave a clear trail of intelligence for government investigators” and perhaps the media as well.

In summary: the Obama administration sought, and eventually obtained, authorization to eavesdrop on the Trump campaign; continued monitoring the Trump team even when no evidence of wrongdoing was found; then relaxed the NSA rules to allow evidence to be shared widely within the government, virtually ensuring that the information, including the conversations of private citizens, would be leaked to the media.

Levin called the effort a “silent coup” by the Obama administration and demanded that it be investigated.

In addition, Levin castigated Republicans in Congress for focusing their attention on Trump and Attorney General Sessions rather than Obama.
Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named one of the “most influential” people in news media in 2016. His new book, "How Trump Won: The Inside Story of a Revolution," is available from Regnery ...

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