Month: December 2016

Authored by Jesse Eisinger, originally posted at ProPublica.org,

Steven Mnuchin has made a career out of being lucky.

The former Goldman Sachs banker nominated to become Donald Trump’s treasury secretary had the perspicacity to purchase a collapsed subprime mortgage lender soon after the financial crisis, getting a sweet deal from the Federal Deposit Insurance Corporation. Now, if he’s confirmed, he will likely be able to take advantage of a tax perk given to government officials.

Mnuchin was born into a family of Wall Street royalty. His father was an investment banker at Goldman Sachs for 30 years, serving in top management. He and his brother landed at the powerful firm, too. After making millions in mortgage trading, Mnuchin struck out on his own, creating a hedge fund and building a record of smart and well-timed investment moves.

He dodged disaster when he inherited his mother’s portfolio. She was a longtime investor with Bernie Madoff, the largest Ponzi schemer in American history. After she died in early 2005, Mnuchin and his brother quickly liquidated her investments, making $3.2 million. The Madoff trustee, Irving Picard, sued to retrieve the money from the Mnuchins, as he did from other Ponzi scheme winners, contending that they were fake gains. A court ruled that Picard could only claw back money from those who had cashed out within two years before the collapse. The Mnuchins, having pulled out roughly three years before, got to keep their Madoff money. That something was dodgy about Madoff was an open secret on Wall Street.

After the financial crisis, the FDIC seized IndyMac, whose irresponsible mortgage loans failed as the housing bubble burst. Desperate to offload the bank, the FDIC subsidized the takeover by sheltering Mnuchin and his team of investors, including hedge fund managers John Paulson and George Soros, from losses. The investors injected $1.55 billion into the bank in 2009. They changed the name to OneWest and five years later, sold it to lender CIT for more than $3 billion, doubling their investment.

Mnuchin also benefited from what may have been a nice fluke a little later. He served as the co-chair of Relativity Media, a film and entertainment company, for about eight months until May 2015. Relativity filed for Chapter 11 bankruptcy in July 2015. Just before it collapsed, Relativity paid off a $50 million loan to Mnuchin’s bank, OneWest, in full.

Paying off one creditor in full just before filing for bankruptcy looks questionable, especially when there is the appearance that such a deal isn’t at arm’s length. One Relativity investor cried fraud and sued in 2015, contending that Relativity used its loans for improper purposes, including to make payments to OneWest. Mnuchin’s lawyer called the claims preposterous and the suit was initially thrown out. A lawyer for the investor, a film financing company, told the Los Angeles Times that it planned to refile.

Mnuchin was blessed again when the Obama administration did not crack down harder on foreclosure abuses. OneWest got a reputation among activists and borrowers as one of the more feckless banks, accused of throwing borrowers out of their homes, denying mortgage modifications, and targeting the elderly with reverse mortgages. The Office of the Comptroller of the Currency settled with OneWest, and over a dozen other banks and mortgage servicers, over its robosigning practices in 2011. That regulatory settlement, called the Independent Foreclosure Review, was an utter debacle, as ProPublica has detailed. Regulators set up a process for consultants to review how the servicers had handled modification reviews, which meant in effect that the banks were monitoring themselves. The regulators did not punish any top financial executives over foreclosure mistreatment. In a happy circumstance for Mnuchin, the Department of Justice and state attorneys general did not include OneWest in their subsequent and more punitive settlement over foreclosure bad behavior.

Mnuchin was fortunate once more to pick the right candidate, Trump, early; most of Wall Street assumed that Hillary Clinton would win and bet accordingly with its political donations.

What good happenstance, then, that Trump didn’t mean what he said about Wall Street on the campaign trail.

On the stump, Trump said, “We will never be able to fix a rigged system by counting on the people who rigged it in the first place.” He attacked Goldman Sachs by name, saying that the bank “owns” Ted Cruz, whose wife worked at the firm. “I know the guys at Goldman Sachs,” he said, “They have total, total control over [Cruz]. Just like they have total control over Hillary Clinton.” Trump put an image of Goldman CEO and chairman Lloyd Blankfein, along with other Jewish figures in finance like George Soros and Janet Yellen, in a commercial late in the campaign that was widely decried as anti-Semitic.

Trump did not feel such a strong antipathy for Goldman that he passed over a firm veteran to be his treasury secretary.

Mnuchin still owned $97 million of CIT stock as of last February. The Treasury Department will likely require him to sell those shares, since it poses a conflict of interest for the treasury secretary to own a stake in a financial institution. But therein lies a final good break for Mnuchin: According to a provision of the tax code, he can defer taxes, as long as he complies with certain conditions. That benefit, available to all officials who are required to sell investments upon taking a government job, could be worth millions to Mnuchin.

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A series of stronger than expected data in recent days pushed Goldman Sachs to up their payrolls growth expectation to 200k (above the 180k expectations), but they note that while the unemployment rate is likely to drop (to 4.8%), average hourly earnings may disappoint. Of course, they add, any non-narrative-confirming misses on the data can likely be explained away by "weather effects and residual seasonality."

As Goldman details, we forecast that nonfarm payroll growth increased to 200k in November, after an increase of 161k in October. We have revised up our forecast from 180k previously reflecting stronger data this week. Labor market indicators were stronger on balance last month, including improvements in reported job availability, the ADP report, and the employment components of service-sector surveys. In addition, we see a likely boost from positive weather effects and possible residual seasonality.

Arguing for a stronger report:

Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—rose to +5.2, reversing a small decline in October. This measure has risen by about ten points over the last year.

 

Service sector surveys. The employment components of service sector surveys mostly improved in November. The Richmond Fed (+7pt to +13), Dallas Fed (+6.5pt to +9.2), and New York Fed (+2.2pt to +10.9, after our seasonal adjustment) measures of service sector employment all strengthened. The Philly Fed non-manufacturing employment index edged down (-0.7pt to +15.6) but remains at levels consistent with expansion. Service sector employment increased 142k in October and has increased 161k on average over the last six months.

 

ADP. The payroll processing firm ADP reported a 216k gain in private payroll employment in November, up from a downwardly revised 119k increase in October. While this is a significant beat, the new methodology ADP introduced last month creates some additional uncertainty around the translation of this upside ADP surprise into the outlook for tomorrow’s nonfarm payroll report.

 

Some rebound from Hurricane-related weakness. In October, employment in the three sectors that we find are most sensitive to weather-related swings – retail, construction, and leisure and hospitality – increased by 20k, which is a smaller gain than the 6-month (33k) and 12-month (73k) average changes through September. Among East Coast states, employment in these sectors declined by a total of 16k in October, relative to an average monthly increase of 15k over the prior six months (Exhibit 1). Some of the biggest declines were in Florida and South Carolina, the states most impacted by Hurricane Matthew.

 

Seasonals. Since the recession, November payroll growth has surprised consensus expectations roughly 2/3 of the time, with an average surprise of +27k.

 

Exhibit 1: Some Potential Upside from East Coast States Impacted by Hurricane-related Weakness

Source: Department of Labor, Goldman Sachs Global Investment Research

Neutral Factors:

Temporary election-related hiring. Election-related hiring typically shows up to some degree in the government and marketing research and opinion polling categories in the non-seasonally adjusted payroll data. However, the BLS makes a special adjustment to these changes to remove the effects of the election and in prior election years those categories did not spike on a seasonally adjusted basis in November. Therefore, it is unlikely we will see any direct election effect in the seasonally adjusted series.

 

Jobless claims: Initial claims for unemployment insurance benefits moved slightly higher, with the four-week moving average edging up to 253k in the November survey week. Initial claims were affected by technical factors including temporary auto plant shutdowns and weather-related effects from Hurricane Matthew, but we do not detect a significant change in the underlying trend which continues to show low layoff activity in the economy.

 

Job cuts: Announced layoffs reported by Challenger, Gray & Christmas after our seasonal adjustment increased by 4k to 32k in November, but remain close to cycle-lows.

Arguing for a weaker report:

Online job ads. The Conference Board’s Help Wanted Online (HWOL) report reversed last month’s gains, and stands 15% lower than levels last year. However, we put limited weight on this indicator at the moment in light of research by Fed economists that argued that the HWOL ad count has been depressed by higher prices for online job ads.

 

Manufacturing sector surveys. The employment components of manufacturing surveys were mixed in November. The ISM manufacturing (-0.6pt to 52.3), Chicago PMI, Empire State (-6.2pt to -10.9), and Kansas City Fed (-6pt to +1) employment indexes all declined, while the Dallas Fed (+4.3pt to +4.5), Richmond Fed (+2pt to +5), and Philly Fed (+1.4pt to -2.4) measures edged up. Manufacturing employment declined by 9k in the October report, and has declined by 7k on average over the last six months.

We expect the unemployment rate to edge down to 4.8% in the November report from an unrounded 4.876% in October. Last month, the household survey showed a 43k decline in employment but the unemployment rate edged down to 4.9% due to a decline in labor force participation. The broader U6 unemployment rate dropped to a new post-crisis low of 9.5% as the number of involuntary part-time and marginally attached workers both declined.

We expect average hourly earnings to increase 0.1% month-over-month, or 2.7% from a year ago, after rising to a new cycle high of 2.8% year-on-year in October. A modest retracement of last month’s gains and negative calendar effects are likely to contribute to a softer number. Our wage tracker, which captures the broader trend in wage growth across four major indicators, stands at 2.6% year-over-year as of Q3.

*  *  *

Finally, we look forward to seeing The White House spokesperson basking in the afterglow of their track record compared to president-elect Trump's likely tweeted response.

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According to Bloomberg, world equity markets gained $635b in market cap, while bonds lost $1.7t — leaving a deficit of more than $1 trillion since the election. Much of those losses were absorbed by foreign governments, the cucks participating in never ending QE schemes. The balance sheets of the ECB and Federal Reserve are looking much worse now than just one month ago.

source: Bloomberg

“The market has moved with remarkable swiftness to price in the anticipated reflationary impact of a Trump administration,” said Matthew Cairns, a strategist at Rabobank International in London. “This has, in turn, prompted a notable rotation out of fixed income and into equities.”

Still, Cairns cautioned the moves are “remarkable given the distinct lack of clarity as regards what policies the president-elect will actually pursue.”

November’s rout wiped a record $1.7 trillion from the global index’s value in a month that saw world equity markets’ capitalization climb $635 billion.

The yield on 10-year U.S. notes rose 56 basis points in November, the biggest jump since 2009, and was at 2.44 percent as of about 4 p.m. in New York, after reaching the highest since June 2015.

The average yield on the Bloomberg Barclays Global gauge climbed to 1.61 percent on Nov. 23, after touching a record low of 1.07 percent on July 5.

“A lot of people are beginning to think that it is the end of the bull rally,” said Roger Bridges, chief global strategist for interest rates and currencies in Sydney at Nikko Asset Management’s Australia unit, which oversees $14 billion. U.S. 10-year yields may rise to 2.7 percent in January, Bridges said.

I think it’s important to remind people that the stock market has been soaring on the hopes of rapid GDP growth under Trump — who promised to build all sorts of stuff — walls, tunnels, bridges etc. What people don’t seem to grasp, unfortunately, is that in order to fund these projects the government needs to tap the bond markets.

The 10yr bond yield has risen from 1.75% to 2.44% over the past month. The cost to service the national debt has skyrocketed — making it increasingly difficult to enact ambitious fiscal stimulus. Couple that with the break-neck gains in the dollar, especially against our chief trading rivals (+14% v yen over the past month), and one can easily paint a picture that all of the recent grandeur in equity markets has only served to ingratiate the wealthiest in the country and have hampered the specter of any real fundamental change, via fiscal stimulus, promised by Trump — which is central to his platform.

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Via Priceonomics.com,

Living at home with your parents isn't just for little kids anymore. Young adults are now more likely to live with their parents than in any other living arrangement, according to a recent report by the Pew Research Center. Recent college grads aren’t alone; adults in the 25-29 and 30-34 age brackets are also moving home in record numbers.

What forces are steering people into their parents’ basements? We wanted to find out, so we analyzed data from Earnest , a Priceonomics customer. We analyzed a dataset of more than 60,000 user responses to questions about their living situations to understand how it's influenced by factors like gender, age, location, and education.

In our sample, 15% of the adults live with their parents. But that figure is higher in parts of the country with a high cost of living, underscoring the fact that income is a key determinant of living situation. Accordingly, people who have greater earning potential—as a result of earning a graduate degree or specializing in science, technology, engineering, or math (the STEM fields)—are the most likely to live independently.

***

We first wanted to look at the impact of gender on living arrangement. The chart below shows the proportion of males and females in our sample who live with their parents.

Data source: Earnest

Men have gotten press lately for earning degrees at lower rates than women and entering the workplace in decreasing numbers. But we found that males and females are virtually even when it comes to living at home.

We next considered age. Is it fair to characterize people who live at home mostly as recent college grads? We broke our sample into eight age groups and charted the percentage of each group that lives with their parents below. 

Data source:  Earnest

Indeed, younger adults are far more likely than older ones to live with their parents. In our sample, the average age of a person living at home was 27. The average renter and owner were 31 and 37, respectively. 

At the tail end of this graph, we see a small number of older adults reporting to live with their parents. This could represent a group that lives with elderly parents to provide care.

We wanted to know where these multigenerational households are located. Are they equally common across the country, or are there hotspots where adults are more likely to live at home? We calculated the percentage of the population that lives at home in each state for which we had at least 10 responses. 

Data source:  Earnest

Likelihood of living at home varies by location. More adults live with their parents in places like Hawaii and the New York metropolitan area—areas where the cost of living, and thus the bar one must clear to live independently, is high. 

Conversely, states in the middle of the country are associated with both a lower cost of living and a larger proportion of independent adults. Indeed, our map resembles maps that  show the cost of living across the United States.

If cost of living influences living arrangements, people are likely living at home out of financial necessity. We would then expect income to be low among people who live with their parents. Is it? 

For each of four income brackets, we calculated the percentage of adults living at home, considering only the respondents who specified an income. Users who left this field blank were not included.

Data source:  Earnest

Our data suggest that people who live at home do so because they can’t afford to live independently. This group makes an average annual income of around $6,000. That’s not enough to pay the rent, no matter which state you live in.

Yet, some people who live at home make a wage that should allow them to live independently. Like the older groups in our age analysis, these high earners could be older adults in established households who live with elderly parents to provide, not receive, support.

A person’s income is strongly influenced by their education. Are those who live at home less educated than their independent counterparts? We grouped our data based on highest degree attained, then calculated the percentage of each group that lives with their parents.

Data source:  Earnest

In general, having more education means it’s less likely you’ll live at home: just 3% of PhDs live with their parents, versus a quarter of those with only a high school diploma.

Surprisingly, a two-year associate’s degree grants more independence than a bachelor’s: 18% of associate’s degree-holders live with their parents, compared to 20% of bachelor’s-holders. This could be owing to the greater student loan burden faced by the latter group.

Even within one of these categories, not all degrees are created equal. A bachelor’s degree in a STEM discipline may offer access to more lucrative jobs than one in the humanities. Does it also affect living situation? 

We grouped our sample based on self-reported major and charted the percentage of each group that lives at home below.

Data source:  Earnest

Just 8.2 percentage points separate all majors we considered, except law. Compare this to the 22-point spread between PhD-holders and high school grads in our degree analysis above. What you study matters less than the level of education you attain. 

That said, students of the hard sciences, plus law and education, are more likely to live away from home, whereas students of the humanities and “soft” sciences like psychology have more trouble leaving the nest.

But a person’s independence is likely determined by a combination of what they study and the level of education they attain. Entry level jobs in STEM may pay as well as jobs held by PhDs in non-STEM fields. Does that translate to more independence in living situation?

To find out, we grouped our sample by highest degree attained and major (classified simply as STEM or non-STEM). The percentage of each group living at home is displayed below.

Data source:  Earnest

Having a graduate degree in any discipline matters more than having it in any particular one: individuals with master’s degrees—in STEM or not—live at home in the lowest numbers.

But for bachelor’s and associate’s degree-seekers, major matters. For both degrees, STEM students are less likely to live at home than are non-STEM majors. Associate’s degree-holders in STEM are also more independent than holders of STEM or non-STEM bachelor’s degrees. Again, this may be due to the higher student loan burden faced by graduates of 4-year schools.

***

So what should you do if you’d like to live independently? Our data indicate that it’s all about income.

First, live in an affordable state. Avoiding the coasts, and certainly the New York metropolitan area, would be a good idea.

Seeking education should also be a priority. Earning a bachelor’s or associate’s degree will reduce your chances of living at home, and signing up for a graduate degree will further increase your independence.

Finally, studying STEM will also help boost you out of the nest. In every degree program we considered, STEM majors lived at home less often than did students of non-STEM disciplines.

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We’ve written several times over the past couple of months about the epic meltdown of the the Dallas Police and Firefighters Pension (DPFP) (see here, here and here for background).  It all started when the Pension Board discovered that one of their real estate managers had been consistently overmarking illiquid real estate investments.  That discovery resulted in an FBI investigation of the manager and a $1BN write down for the DPFP.  In the wake of the writedowns, Dallas policemen and firefighters rushed for the exits and withdrew over $500mm in assets. 

Fearing a “run on the bank” that could push the whole city of Dallas into bankruptcy, Mayor Mike Rawlings has just sent a scathing letter to the DPFP Pension Board demanded that withdrawals be halted immediately until the “solvency and actuarial soundness of the Pension System is restored.”

As the Board is well aware, at the beginning of this year, the actuarial value of assets under your supervision and control were reset to market value, resulting in a $1 billion valuation loss.  This significant markdown was the result of years of mismanagement and abuse. 

 

Critically the Pension System’s actuary warned that the Pension System would become insolvent even sooner if Deferred Retirement Option Plan (“DROP”) funds are drawn down in less than a ten-year period.

 

Despite this clear warning, you have inexplicably paid out nearly $500 million in lump-sum DROP withdrawals over a matter of mere months – notwithstanding your power to unilaterally restrict or limit DROP withdrawals.  In doing so, you have knowingly allowed DROP funds to be withdrawn at record levels, cognizant that doing so is irreparably harming the Pensions System’s solvency and liquidity.

 

Already, as a result of your actions, the Pension System’s ability to pay its members’ future benefits has been irreparably reduced from a period of 15 years to 10 years.  Further, both the City of Dallas and the Pension System have projected that DROP withdrawals, if unabated, will lead to a liquidity crisis in the Pension System with the next 90 days, causing a forced sale of illiquid assets.  Your Board Chairman summed it up best when referring to the payment of DROP withdrawals: “- the continuation of this practice would be financial suicide.”  And yet the practice continues. 

 

Given the urgency of this matter, I request a response within 48 hours as to whether the Board will immediately cease DROP payments until such time as the solvency and actuarial soundness of the Pension System is restored.

 

As the Dallas Morning News points out, the DPFP’s previous management refused to believe that a “run on the bank” was possible and feared any efforts to limit withdrawals would have just resulted in “backlash from police and firefighters when the restrictions were lifted.”  Instead of limiting withdrawals, in fact, the Pension Board proposed a $1BN, taxpayer funded bailout. 

The previous administration didn’t believe the run on the bank would ever happen. When The Dallas Morning News asked then-administrator Richard Tettamant about the possibility in 2012, he replied that it wouldn’t happen.

 

“This could happen to Bank of America or Fidelity Investments as well, but as with them, there would be no reason for people to do that,” Tettamant said in an email. “The pension system has sufficient liquid assets to cover all DROP distribution requests.”

 

More than $500 million has been withdrawn from the $1.5 billion fund this year. Most of it came after Aug. 11, when the pension fund proposed benefit cuts to help save it from insolvency caused by overvalued and risky real estate investments made by the previous administration.

 

Still, the current pension board, which includes four City Council members, unanimously decided not to restrict DROP withdrawals this year after  hours of deliberations and legal advice given behind closed doors.

 

Pension board members believed they couldn’t restrict the withdrawals forever and feared the backlash from police and firefighters when the restrictions were lifted. And they hoped that keeping DROP open would boost confidence in the fund.

Meanwhile, Rawlings didn’t earn any new friends among police or firefighters with his letter, as the President of the Dallas Fire Fighters Association lashed out at the Mayor for throwing “gasoline on the fire.”

Dallas Fire Fighters Association President Jim McDade also blasted the mayor for the letter. He said the city needs to step up instead of throwing “gasoline on the fire.”

 

“If the mayor believes that his letter will stop the ‘run on the bank’ he is wrong,” McDade said in a written statement. “He just created a SPRINT to the bank.”

Alas, while Dallas police and fire fighters may ultimately endure some short-term pain if redemptions are temporarily halted, we suspect that the real long-term losers, as per the usual, will be taxpayers who will be forced to pony up whatever amount of money is required to keep the whole farce going just a little longer.

 

Here is the full letter from Dallas Mayor Mike Rawlings:

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Submitted by Joseph Jankowski via PlanetFreeWeill.com,

Writing for Yahoo News, National Political Columnist Matt Bai provides a suggestion to combat the so-called “fake news” epidemic that has become a major talking point of the mainstream media since Donald Trump’s victory in the presidential election. According to Bai, we should be “teaching our kids how to consume” information in an age where the internet has provided a press to anyone with a computer and a router.

Within his article, titled “The real problem behind fake news“, Bai calls fake news a “searing hot topic these days” and mentions the infamous WaPo article which cites a shadowy, anonymous organization known as PropOrNot (Propaganda or Not) that smears many legitimate conservative and libertarian news sources like Zero Hedge, Infowars, Breitbart, World Net Daily and The Ron Paul Institute as Russian propaganda.

That WaPo article highlighted what was the second blacklist of websites to make its rounds in the mainstream press last month. The first list was put together by a nobody liberal professor from Merrimack College (let me tell you how worthy of circulation that is).

Bai writes:

The emergence of “fake news” is a searing hot topic these days, as you’ve probably heard — a new, truth-free media to go with our new, truth-free politics. The Washington Post reports that a lot of these phony stories, some of which probably influenced the election in at least a tangential way, originate with Russian “bots” programmed to confuse American readers. (Payback, I guess, for all those years when Voice of America did the same thing.)

 

Under enormous pressure, Facebook and Google have now promised to do a better job of curating the content that populates their sites. Which is all very comforting, if you really want software engineers assuming the role of civic arbiter that has traditionally fallen to journalists. I don’t.

 

And the problem with cracking down on social media sites is that it’s a little like the war on drugs. You can try to stamp out the supply of garbage news, but the Web is a vast place, and as long as someone can make money off misinformation, it will always find a crack through which to seep.

Aside from citing the WaPo hit piece on basically all effective news outlets outside the MSM realm, Bai is being reasonable. Most will agree, it is better not to have Facebook and Google taking on the role of civic arbiter and information gatekeeper. And the promoting of a crackdown on social media could lead to the very slippery slope of censorship.

The Yahoo News journalist goes on to writes:

No, the long-term solution here is about stemming the demand. The answer doesn’t lie in hectoring tech companies into policing content, but rather in teaching our kids how to consume it.

Bai says that “navigating the news media isn’t intuitive anymore” and compares it to flying a plane rather than driving a car.

“A Big Bang at the genesis of the Internet age” has fractured the entire (Media) industry and its audience into a million pieces,” he says.

“The proliferation of social media and the rise of mindless aggregation” is also causing this problem of “fake news” reaching the masses, Bia writes.

My kids will spend months of their young lives studying the Revolution and the Civil War and the advent of mass production, which is fine. In grade school, they spend some part of every year revisiting the social movements of the ’60s, which is noble and important.

 

But what’s called “media literacy” in the education world — the ability to consume torrents of information with some level of competence and sophistication — is still an outlier in social studies curricula, despite having been discussed now for decades. Even when it’s taught, it’s crammed into a high school unit, by which time today’s grade-schoolers will have been surfing YouTube for half their lives.

It seems like a great idea, teach kids how to objectively analyze the media. But, if we are to take the mainstream media’s labeling of “fake news” seriously, we will find ourselves telling our children that only big networks like CNN and MSNBC are trustworthy sources.

The real problem with the entire fake news narrative is that “fake news”, by PropOrNot’s definition, is really not a problem at all.

The mainstream media is telling everyone that since Google’s algorithm made a mistake by linking to a false news report, individuals now must surrender their ability to look at things objectively and only trust the big news networks.

Just look at PropOrNot.com’s blacklist, it is full of alternative news sites that now have large enough audiences to bang heads with the corporate controlled press. And considering that the trust in the mainline news is equal to that of trust in congress, this can only be seen as a way to discredit the grassroots news organizations that are threatening the old media’s reign.

The labeling of fake news should be left up the internet user who might stumble across some wrong information or even some disinformation.

It would be foolish to allow the mainstream press, an unknown organization that hides its identity and a leftist professor that teaches feminist media studies, to provide what is real and what is not.

I would also not be too enthusiastic on the public school system, that runs off federal funding, embracing the rise of alternative voices in media that are usually critical of government (the way it is suppose to be).

Matt Bai ends his piece for Yahoo with a very laughable thought.

Here’s a radical thought: If President Trump is looking for a bold and useful education initiative that might serve the incidental purpose of redeeming what’s left of his soul, media literacy would be a pretty good place to start. Getting behind a nationwide push in K-through-12 classrooms could be an important and unifying priority for the incoming education secretary, Betsy DeVos.

 

Willingly or not, Trump has done more than anyone else to expose the problem. The least he can do is begin to address it.

HA!

You mean the Donald Trump that absolutely ridiculed the mainstream media during a meeting last month over their blatant bias coverage of the election and misrepresentations?

Hate to break it to you Matt, but if Trump were to do that many of the websites on the PropOrNot list cited by WaPo would be presented as “real news” to our children. CNN and ABC would be identified as the establishment government lapdogs that they are.

I hope Trump takes your advice.

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Two years ago the Obama administration sought out to tackle a “crisis” that involved minors seeking out “human smugglers” to help with transportation across the U.S. – Mexico border.  So, with a swipe of the pen, Obama signed an executive order allowing minors of certain Central American countries to flee to the U.S. under a “refugee/parole program.” 

Two years later, there’s just one problem: 70% of the people admitted under the program are actually adults.  According to MRC TV, official data from the State Department indicates that of the 1,600 aliens that have traveled to the U.S. under the CAM program to date, only 480 of them are actually under the age of 18. 

Now, under the CAM program, the State Department told MRCTV in an email Wednesday that of the 1,600 aliens who have traveled to the United States to date, only 480 of them – just 30 percent – are children under the age of 18.

 

Conversely, a full 70 percent of those aliens who’ve been allowed into the United States under the president’s program for “minors” are adults.

The controversial initiative was launched in December 2014 as part of President Obama’s executive actions on immigrants, and was touted as a way to bring illegal alien children from certain Central American countries into the United States to be reunited with their families, who are often here illegally themselves.  The move was allegedly designed to keep underage children from relying on dangerous human smugglers to bring them across the U.S. –Mexico border illegally.  Per the State Department:

The United States is establishing an in-country refugee/parole program in El Salvador, Guatemala, and Honduras to provide a safe, legal, and orderly alternative to the dangerous journey that some children are currently undertaking to the United States. This program will allow certain parents who are lawfully present in the United States to request access to the U.S. Refugee Admissions Program for their children still in one of these three countries. Children who are found ineligible for refugee admission but still at risk of harm may be considered for parole on a case-by-case basis. The refugee/parole program will not be a pathway for undocumented parents to bring their children to the United States, but instead, the program will provide certain vulnerable, at-risk children an opportunity to be reunited with parents lawfully resident in the United States.

 

And, like many government initiatives, the CAM program has been completely ineffective in slowing the number of children crossing the U.S.-Mexico border.  In fact, as MRC points out, U.S. Customs and Border Protection recently reported that it apprehended 97% more unaccompanied illegal minors at the border this October than last year. 

On top of failing to provide much help to many child “refugees,” the CAM program hasn’t made a notable impact on the number of unaccompanied children and families who’ve elected to come into the United States illegally via the Mexican border – which is the very problem the initiative was supposedly created to alleviate.

 

U.S. Customs and Border Protection reports it apprehended another 4,973 unaccompanied illegal alien children (UACs) at the U.S.-Mexico border in October, up 97 percent from the 2,519 UACs that border agents apprehended in October of last year. That same month, the Obama administration released more than 6,000 illegal alien children to sponsors living in the United States.

 

CBP also caught another 6,029 family units crossing the Southwest U.S. border illegally during the month of October, a total 179 percent higher than the 2,162 family units the agency caught in October of last year. The border surge has increased so much, in fact, that officials are now warning the wave is already threatening to overwhelm their resources.

 

In fact, CBP data shows that since President Obama launched the costly CAM program in December 2014, nearly 100,000 unaccompanied alien children and more than 123,000 family units have been apprehended at the U.S.-Mexico border.

But don’t worry, even though the CAM program has been proven completely ineffective, it only cost taxpayers ~$1BN in 2016 so no big deal.

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'Winter is coming' in North Dakota but as over 2000 veterans arrive to provide a human shield for the 'water protestors', president-elect Donald Trump said for the first time that he supports completion of the pipeline project near a North Dakota Indian reservation. Reassuringly his team confirmed that his support "has nothing to do with his personal investments" in Energy Transfer Partners – the company building the pipeline.

 

As we noted yesterday, US military veterans continued to arrive at the Indian reservation, braving snow and freezing temperatures to support the protesters… (as Reuters reports)

Matthew Crane, a 32-year-old Navy veteran who arrived three days ago, said the veterans joining the protest were "standing on the shoulders of Martin Luther King Jr and Gandhi" with the their plans to shield protesters.

 

 

"I bought a one-way ticket," he told Reuters as he worked to build a wooden shelter at the main camp. "Hopefully we can shut this down before Christmas."

However, not all veterans were supportive of these actions…

Several members of the North Dakota Veterans Coordinating Council, which represents five veterans organizations in the state, held a news conference to decry the involvement of veterans in a protest that has damaged property and asked veterans not to participate in the demonstration.

 

"We agree that it is our constitutional right to assemble and to peacefully protest," council President Russ Stabler told reporters at the West Fargo VFW Post 7564 building. "However, protests over the last 100-plus days in North Dakota have been less than peaceful.

 

"Participating in this kind of assembly even as a peaceful bystander or participant will only mar the image of the North Dakota veterans and the veterans of our nation," he added as he stood surrounded by about a dozen veterans from the region.

Additionally, North Dakota Governor Jack Dalrymple on Wednesday told reporters it was "probably not feasible" to reroute the pipeline, but he would try to rebuild a relationship with Standing Rock Sioux leaders, and U.S. President-elect Donald Trump on Thursday said for the first time that he supports the completion of the pipeline, and as Reuters noted, Trump's transition team also said Trump supported peaceful protests.

"We respect all Americans’ first amendment right to peacefully protest, and we hope that local and federal officials continue to give support to local law enforcement so they are able to continue to protect these protesters," said the Trump transition team's daily note sent to campaign supporters and congressional staff.

But, a communications briefing from Trump's transition team said despite media reports that Trump owns a stake in Energy Transfer Partners (ETP.N), the company building the pipeline…

Trump's support of the pipeline "has nothing to do with his personal investments and everything to do with promoting policies that benefit all Americans."

 

"Those making such a claim are only attempting to distract from the fact that President-elect Trump has put forth serious policy proposals he plans to set in motion on Day One," said the daily briefing note sent to campaign supporters and congressional staff.

Republican North Dakota Senator John Hoeven said he met with Trump's transition team to discuss the delayed pipeline.

"Today, Mr. Trump expressed his support for the Dakota Access Pipeline, which has met or exceeded all environmental standards set forth by four states and the Army Corps of Engineers," Hoeven said in a statement.

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Submitted by Michael McDonald via OilPrice.com,

It is no secret that the coal industry has faced hard times for the last few years. Environmental concerns led President Obama to institute more stringent regulatory requirements, while cheap natural gas created intense competition. Against that backdrop, many coal industry participants and investors hoped that President Trump would be able to reverse those fortunes.

President Trump will undoubtedly do his best to help the industry, but recent events have shown that may be harder than it appears. Canada recently announced for instance that it would begin phasing out coal faster than it had previously planned due to increased environmental concerns. That’s a significant development because Canada is the fifth largest buyer of U.S. coal traditionally.

There is very little Trump or anyone else can do to make Canada buy more coal. Moreover, coal purchases by the Netherlands and India, the first and second largest buyers of U.S. coal respectively, are down on a year over year basis as well.

The Indian drop is particularly significant because India is really the last best hope for U.S. coal to recover. China has already put in place enough power generation capacity for its current needs. Moreover, with China’s economic profile weakening and likely to keep waning due to demographic issues, it is not likely that the country is going to become a big coal importer from the U.S. in the future.

In contrast, the Indian electrical grid is still extremely subpar, and massive investments are needed there. While India is building new coal-fired power plants, they are no guarantee that demand for U.S. coal will increase. India’s demand for coal has been mixed in recent years, with some years being better than others. A large but unreliable India as a buyer is not enough to save the U.S. coal industry.

U.S. coal exports fell 24 percent overall in 2015 and have fallen another 32 percent through the first half of 2016. Against this backdrop, it is little wonder that roughly half of U.S. coal production has entered bankruptcy in the last few years.

President Trump has vowed to help bring back the industry by rolling back environmental regulations, offering tax breaks to invest in infrastructure and ending a moratorium on mining on federal land enforced by President Obama. While the new President can certainly help reduce industry costs by, among other things, canceling Obama's Clean Energy Plan, which would force power plants to capture more greenhouse gases, it is not clear if this will be enough.

Fundamentally coal is losing enormous amounts of market share domestically and abroad to other forms of power. Renewables have played a role in this decline, but the actual villain in the coal story is natural gas. The glut of U.S. natural gas has created a tremendous amount of downward price pressure and led U.S. power plants to convert from coal to natural gas.

(Click to enlarge)

President Trump can help the coal industry. Rolling back power plant regulations on coal and rolling back coal mining regulations should reduce both the cost to use coal and the cost to mine it. That will help to stave off further power plant changeovers, and will enable more coal mines to operate profitably. All of that is good, but it is unlikely to be enough to revive the industry to its former glory.

The IEA is also skeptical of the marginal impact on coal mine profitability from Trump’s proposals. Market equilibrium for the U.S. coal industry will require further industry consolidation and more mine closures according to the group. U.S. coal won’t disappear completely, but the industry will keep shrinking through the early 2020’s in the IEA’s view.

Overall, the only coal mines that are likely to survive in the long run are those where both mining and transport coal is cheap. Reducing regulatory costs will help, but it is not a panacea by any means.

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