Month: May 2018

Dr. Jennifer Pena, Vice President Mike Pence’s physician, has resigned following reports that she was among those who detailed claims of professional misconduct against President Trump’s VA Secretary nomination Ronny Jackson to senators considering his nomination.

“The Vice President’s office was informed today by the White House Medical Unit of the resignation.

Physicians assigned to the Vice President report to the White House Medical Unit and thus any resignation would go entirely through the Medical Unit, not the Vice President’s office,” Pence spokeswoman Alyssa Farah said in a statement.

As we noted previously, Sen. Tester even admitted that he reviewed the FBI files and there was no derogatory information in there about Jackson but he still spread malicious rumors,” said a current Administration official.

 “Certainly we would never nominate anybody who had derogatory information. Pena has had a long-standing feud with doctor Jackson…

…she’s very jealous that he’s been consistently promoted. This isn’t about being a whistleblower – there are other procedures for that. She went up to the hill and she spoke with approximately twenty-five Democrats…

…she’s a holdover in the White House and didn’t want Jackson to be nominated.”

As a reminder, Jackson – who served under three Presidents, withdrew himself from consideration for the VA role on Thursday following bombshell allegations of being intoxicated while on the clock and improperly dispensing medication – reportedly passing out Ambien, Provigil and other prescription drugs “like they were candy.” 

President Trump responded to the allegations, telling reporters that Jackson was “one of the finest people that I have ever met.”

While Jackson has denied the claims as “completely false and fabricated,” he said he was withdrawing his name from consideration because he had become a distraction for Trump and his agenda. 

via RSS https://ift.tt/2JSawod Tyler Durden

While most hedge fund managers and investors were skeptical about the direction of the stock market after Trump’s shocking election victory, a few bet it all on green. One was Carl Icahn, another was Dan Loeb, and with the S&P surging by over 30% since the Trump victory, investors in Dan Loeb’s Third Point reaped the profits of his conviction. However, after a quarter in which his fund posted an uncharacteristic drop and after an April which merely brought Third Point back to unchanged for the year…

… Dan Loeb writes in his latest investors letter that “a shift in markets occurred in Q1” which he describes as follows:

After a two-year period where growth surprised positively and inflation was benign, we began to see volatility in each of these areas.

Loeb’s take on this “market shift” also explains why despite the best earnings season in decades, the S&P has been unable to turn green for the year: in a nutshell the recent surge in volatility has “increased uncertainty around  appropriate multiples” mostly as a result of confusion over what the new benchmark interest rate is and because “there is finally an alternative to equities in the form of relatively riskless two-year money.” According to Loeb, this “riskless” 2-Year money which manifests itself in the form of a 2.5% Yield on the 2Y Treasury, has been observed in “money market flows where $400 billion has flooded in so far this year versus a total $80 billion of inflows in 2017.”

There is another concern: according to Loeb, a major risk factor is how late in the credit/business cycle the US currently find itself:

“as manufacturing indices (PMI’s) cool from elevated levels, there is a real question about just which inning of the late cycle we are in. While we don’t believe a recession is close, there is definitely a concern that it is getting closer.

The bottom line: while earnings are stellar, there are growing questions about the other part of valuation, namely multiples:

Each of these considerations is weighing on multiples. For investors, this means the S&P is effectively range-bound and so, to generate profits, investors will need to adjust exposures more aggressively and successfully choose winners and losers across sectors.”

And while talk is usually cheap, especially when it comes from hedge funds, Loeb is in fact following up on his growing skepticism with action:

We have responded to this regime shift in several ways. First, we have reduced net exposure by over 20% this year. We have taken about 15% exposure out of our long book and boosted shorts to about 25% of fund AUM. Last year’s focus on short selling after several years away from the strategy was a return to our early success as short sellers. We intend to further increase exposure to fundamental single names and quant-derived baskets in 2018 and rely less on market hedges to dampen volatility and reduce net exposure.

The billionaire hedge fund manager also had some observations on the relative valuation of equities vs credit:

“we are spending more time evaluating opportunities in risk arbitrage. While credit strategies performed well in Q1, we find most corporate credit markets are too richly valued relative to equities and so we have modest exposure to the asset class. As we discuss below in our structured credit update, we have been finding fewer opportunities in RMBS after selling most of our portfolio at a profit and are currently focusing on marketplace lending deals instead.

The rest of Loeb’s letter was mostly laying out his rationale behind his new position in United Technologies, and an update of his bigger positions.

Loeb concludes conclusion shows that even the formerly bullish Loeb is turning increasingly concerned about the market:

Market shifts are inherently difficult to anticipate and when they happen, they do not ring a bell but they do blow a dog whistle, as we have said in the past. Our job is to listen carefully and to take decisive action when we suspect change is afoot. We believe that the increase in our short book and our reduced net and gross reflect what we are hearing.

Full letter below

via RSS https://ift.tt/2HQlnyE Tyler Durden

Authored by Simon Black via SovereignMan.com,

It was just a month and a half ago that Tesla approved an eye-popping long-term pay package, worth as much as $50 BILLION to founder and CEO Elon Musk.

And on Wednesday afternoon, Tesla held its first corporate earnings call since then.

You’d think that Elon would have been gracious and professional, anxious to demonstrate that the shareholders’ trust in him has been well-placed.

Instead the call was filled with contempt and disrespect, with Elon outright refusing to answer questions that he deemed ‘boring’.

Bear in mind, Tesla’s financial results were gruesome; the company burned through yet another $1.1 billion in cash last quarter. That’s 70% worse than in the same period last year.

Even more problematic, Tesla is losing money at such an unexpectedly fast rate that they’ll likely run out within the next several months.

According to the Wall Street Journal’s analysis, Tesla doesn’t have enough cash to cover its basic debt payments and capital leases due within the next six months.

Needless to say, investors are worried.

The shareholders and analysts on the call kept pressing Elon to explain how the company was going to survive, and how he would turn around Tesla’s notorious production challenges.

But Elon completely dismissed any such questions as “boring”, “bonehead”, and “not cool”.

Pretty amazing.

I mean, this guy was given a potentially $50 billion compensation package just six weeks ago.

So the LEAST he could do was answer his investors’ completely reasonable questions.

But he didn’t. It’s almost as if he deliberately wanted to show as much disrespect as possible to the trust and confidence that shareholders have placed in him.

This is a pretty despicable attitude for any executive to have.

Yet this whole situation is emblematic of what I call ‘the new rules of capitalism.’

And New Rule #1 is: Businesses no longer need to make money.

Tesla is just one of a multitude of high-flying, hot-shot companies whose entire business models are based on burning through cash, managed by executives who don’t care.

WeWork, as we’ve often discussed, is an even more absurd example.

WeWork provides short-term office space to companies around the world, with a whole bunch of interesting perks (including free tequila).

For customers, it’s great. But WeWork loses tons of money providing all those great perks to its customers… which means that investors are ultimately footing the bill.

In other words, the suckers who invested in WeWork are essentially buying tequila shots for the office tenants.

Similarly, Uber continues to lose money; according to the company’s leaked financial statements, Uber lost a whopping $4.5 billion in 2017.

To put it another way, every time you take an Uber somewhere, the company is losing money… which means that the suckers who invested in Uber are subsidizing your ride.

Netflix is another perennial loser, having burned through more than $2 billion of its shareholders’ money last year in order to produce original content.

Remember that the next time you binge watch Stranger Things— Netflix investors are heavily subsidizing your evening’s entertainment.

I read an article in the Wall Street Journal last weekend about young people in San Francisco who receive oodles of free goodies from VC-funded startups.

One guy was able to buy a small car because a car-sharing startup offered him thousands of dollars in CASH just to sign up and use the service.

Others talked about eating dozens of gourmet meals for free, courtesy of the various meal delivery startups in San Francisco who offer free meals to new customers.

Ultimately this means that the suckers who invested in those startups are buying meals, clothes, cars, and just about everything else, for freeloading consumers.

There are so many more examples– Dropbox, Snapchat, etc.– of companies whose sucker investors are footing the bill for consumers.

Each of these companies loses money. And it’s becoming an epidemic.

In fact, more than 20% of the companies which comprise the Russell 2000 index, and nearly 10% of companies in the S&P 500 index, burn through so much cash that they have to BORROW money just to pay INTEREST on their debts.

But under the new rules of capitalism, these losses don’t matter… because there are countless investors, funds, and bankers delighted to have the opportunity to put more capital into the business.

This isn’t normal– it goes against the most basic laws of finance: businesses are supposed to make money for their investors, not the other way around.

Yet investors keep throwing capital into these bottomless pits… while (and this is REALLY bizarre) simultaneously showering the founders with blind admiration.

It’s incredible how much praise and esteem is hurled upon company founders who burn through their investors’ capital like a deranged financial sociopath.

Instead of being fired for incompetence, however, they’re hailed as ‘visionaries’.

These people are completely out of touch– both the founders who treat their shareholders with such contempt, as well as the sucker investors who continue enabling this abuse.

You don’t have to be Nostradamus to recognize that some day this stupidity will end suddenly and painfully.

And to continue learning how to safely grow your wealth, I encourage you to download our free Perfect Plan B Guide.

via RSS https://ift.tt/2js6GHh Tyler Durden

The Trump State Department has frozen funding to the controversial Syrian aid group known as the White Hemlets, a non-governmental organization (NGO) which provided the sole evidence that Syrian President Bashar al-Assad reportedly used chemical weapons on his own people in an April 7 attack on the city of Douma, according to CBS News.

Having not received U.S. funding in recent weeks, White Helmets are questioning what this means for the future. They have received no formal declaration from the U.S. government that the monetary assistance has come to a full halt, but the group’s people on the ground in Syria report that their funds have been cut off. –CBS News

The evidence provided by the White Helmets of the alleged chemical attack was used by the West to justify several airstrikes on Syrian scientific and military facilities throughout April – the first one conducted on Syria’s T4 airbase by Israel 48 hours after the White Helmets’ report. Many Douma residents, meanwhile – including Hospital personnel, say the chemical attack never happened.

The White Helmets are a 3,000 member NGO formally known as the Syrian Civil Defense. Established in “late 2012 – early 2013” after a group of 20 Syrians were trained and organized by former British army officer James Le Mesurier. The group then received funding from Le Mesurier’s Netherlands-based non-profit group, Mayday Rescue – which is in turn funded by grants from the Dutch, British, Danish and German governments. 

The US has provided at least $32 million to the group – around 1/3 of their total funding – through a USAID scheme orchestrated by the Obama State Department and funneled to the White Helmets using a Washington D.C. contractor participating in USAID’s Syria regional program, Chemonics. 

According to their website, the White Helmets have been directly funded by Mayday Rescue, and a company called Chemonics, since 2014.

Yet there’s evidence that both of those organizations started supporting the White Helmets back in early 2013, right around the time the White Helmets claim to have formed as self-organized groups.

Mayday Rescue, as we said, is funded by the Dutch, British, Danish and German governments. And Chemonics?

They are a Washington, D.C. based contractor that was awarded $128.5 million in January 2013 to support “a peaceful transition to a democratic and stable Syria” as part of USAID’s Syria regional program. At least $32 million has been given directly to the White Helmets as of February 2018. –TruthInMedia

So the US, Dutch, British, Danish and German governments have been funding the White Helmets, a non-governmental organization, through proxies for around five years.

Shut It Down

Perhaps fueled by troubling reports that the White Helmets have been accused of staging incidents, the Trump administration has now frozen funding to the group, and has placed support under “active review.” 

Now they are not getting any U.S funding as the State Department says the support is “under active review.” The U.S had accounted for about a third of the group’s overall funding.

An internal State Department document said that its Near East Bureau needed confirmation from the administration to green light funding for the White Helmets in Syria by April 15th or the department would initiate “shut-down procedures on a rolling basis.” –CBS News

“This is a very worrisome development,” an official with the White Helmets told CBS. “Ultimately, this will negatively impact the humanitarian workers ability to save lives.”

Or not, depending on how one feels about the White Helmets… 

Questions over authenticity

Last week, Russian officials brought fifteen people to The Hague from the city of Douma, Syria said to have been present during the alleged April 7 chemical attack, including 11-year-old Hassan Diab who was seen in a widely-distributed White Helmets video receiving “emergency treatment” in a local hospital after the alleged incident. 

“We were at the basement and we heard people shouting that we needed to go to a hospital. We went through a tunnel. At the hospital they started pouring cold water on me,” said Diab, who was featured in the video which Russia’s ambassador to the Netherlands says was staged.

The boy and his family have spoken to various media outlets, who say there was no attack. 

The 11yo Syrian boy Hassan Diab, filmed by the #WhiteHelmets in their staged #DoumaProvocation video, together with 17 other witnesses is in the Hague, participated in today’s joint Russia-Syria briefing at the #OPCW pic.twitter.com/W9t9IhC7oA

— maytham (@maytham956) April 26, 2018

Others present during the filming of Diab’s hospital “cleanup” by the White Helmets include hospital administrator Ahmad Kashoi, who runs the emergency ward. 

“There were people unknown to us who were filming the emergency care, they were filming the chaos taking place inside, and were filming people being doused with water. The instruments they used to douse them with water were originally used to clean the floors actually,” Ahmad Kashoi, an administrator of the emergency ward, recalled. “That happened for about an hour, we provided help to them and sent them home. No one has died. No one suffered from chemical exposure.” –RT

Also speaking at The Hague was Halil al-Jaish, an emergency worker who treated people at the Douma hospital the day of the attack – who said that while some patients did come in for respiratory problems, they were attributed to heavy dust, present in the air after recent airstrikes, but that nobody showed signs of chemical warfare poisoning.

The White Helmets have previously come under fire for allegations of fabricating evidence and staging bodies. Several of their members have been pictured with, or bear an uncanny resemblance to fighters from the various anti-Assad terrorist groups operating in the region.

Photographic and video evidence gathered over social media and elsewhere depicting White Helmets who appear to be affiliated with terrorist groups can be found here.

And Donald Trump just yanked 1/3 of their funding… 

 

via RSS https://ift.tt/2HWiPz7 Tyler Durden

Via Dana Lyons’ Tumblr,

There is some evidence to suggest that stock investors would be well served by selling in May and going away this year.

One of the most famous of all of Wall Street’s trading bromides is “Sell In May & Go Away”. Of course, the saying refers to the tendency of stocks to perform worse during the 6 months from May through October than they do from November through April. Perhaps the reason why it is still so popular is that, unlike some of Wall Street’s other sayings, there is actually solid historical evidence to back it up, including recent history.

Specifically, here are the average returns in the Dow Jones Industrial Average during the 2 periods since 1900:

• November-April: +5.45%
• May-October: +1.61%

Not only does the average return for the May-October period lag badly, but the consistency of positive returns has been less reliable:

• November-April: 69% Positive Returns
• May-October: 61% Positive Returns

Plus, as mentioned, unlike many seasonal tendencies that lose their effectiveness over time as the edge gets arbitraged away, the Sell In May pattern has held true even as of late. For example, 7 of the last 8 years, 11 of the last 13 years and 19 of the last 24 years saw the Dow stronger from November-April than from May-October.

So is there any thing that bulls can hang their hat on during the forthcoming 6 months? Well, first of all, despite the fact that May-October has generally lagged its 6-month counterpart, the historical average return for the period is still positive. So it’s not like the whole period has been a disaster, though there have certainly been some of those.

In parsing the data, however, we have found one historical trend that may suggest that the “Sell In May…” advice may be better served this year than most. It is based on the (also relatively consistent) 4-year Presidential Cycle. Naturally, the average Sell In May returns are not uniform across all years. And specifically, we see dispersion, and a wide one at that, among the 4 years within the Presidential Cycle. For example, during “Year 4’s”, the May-October average returns actually exceed those of the November-April period.

It is a different story in “Year 2’s”, however. In fact, at +0.00%, the average May-October return during Year 2’s is the worst of any of the 4 years.

We will say that this seasonal tendency is far down on the list of decision-makers for us as it pertains to these upcoming 6 months. We have our models and indicators that we track which, as always, will guide our investment posture. That said, to the extent that the Presidential Cycle does exert influence on the “Sell In May…” pattern this year, there is evidence to suggest that investors may be well served to follow the advice.

*  *  *

If you’re interested in the “all-access” version of our charts and research, please check out our new site, The Lyons Share. You can follow our investment process and posture every day — including insights into what we’re looking to buy and sell and when. Thanks for reading!

via RSS https://ift.tt/2rkl9tc Tyler Durden

Like most motions to dismiss, Paul Manafort’s was initially viewed as a long-shot bid to win the political operative his freedom and get out from under the thumb of Special Counsel Robert Mueller.

But after today’s hearing on a motion to dismiss filed by Manafort’s lawyers, it’s looking increasingly likely that Manafort could escape his charges – and finally be free of his ankle bracelets – as judge Amy Berman Jackson questioned Mueller’s “unfettered power” to prosecute over charges that have nothing to do with collusion between the Trump campaign and the Russians.

Berman said she’s concerned Mueller is only pursuing charges against Manafort to pressure him to turn on his former boss, and said the charges against Manafort didn’t stem from Mueller’s collusion probe, but a preexisting case that was nearly brought by the FBI years ago before it was eventually dropped.

Berman has given prosecutors two weeks to show what evidence they have that Manafort was complicit in colluding with the Russians. If they can’t come up with any, she will presumably dismiss the case. She said she would also like to see the letter signed by Deputy AG Rod Rosenstein outlining the scope of the Mueller probe.

Of course, such a dismissal would be nothing short of groundbreaking. It would potentially make it much harder for Mueller to turn witnesses against the president.

Uh-oh precedence if this gets dismissed…. The Judge may single handedly end the cat and mouse games by the special council and would make it much harder for Muller to turn any other parties to his side (because all charges are unrelated to Russia so far)….

— Rob Lee (@WRRob) May 4, 2018

 

via RSS https://ift.tt/2JVd7xZ Tyler Durden

The Columbia law professor used by former FBI Director James Comey as an intermediary to leak the details of now-classified memos worked as a “special government employee” at the FBI for over a year, serving “at the pleasure of Director [Comey], according to Fox News.

Records reviewed by Fox News now show he [Richman] signed the agreement as early as June 30, 2015. The former director previously told Fox News that Richman left the FBI in February 2017, meaning he served there for well over a year.

Sources familiar with Richman’s FBI status said he was assigned to “special projects” by Comey, and had a security clearance as well as badge access to the building. Richman told Fox News in an email last week that he was working as an SGE on an unpaid basis. –Fox News

Richman’s allegedly unpaid work included “defending Comey’s handling of the Clinton email case, including the controversial decision to reopen the probe shortly before the presidential election.”

FBI records show that as a special government employee, Richman would “serve at the pleasure of the Director [Comey],” with an initial term of one year. Richman’s stated responsibilities included the use of encryption by terror suspects — known as “Going Dark.” In August 2015, his projects were expanded to include “an examination of the implications of federal investigations being brought to state and local prosecutors.” –Fox News

So – not only did Richman serve as the conduit for Comey’s leak three months after he left the FBI, Richman defended Comey to the media while serving at Comey’s pleasure as a “special government employee.” He was typically identified as a law professor by the media, and sometimes as a policy adviser to Comey, reports Fox. 

Richman was sent talking points about the Clinton investigation according to government transcripts, which compared Clinton’s use of an unsecured private server to that of retired Gen. David Petraeus, who shared classified information with his mistress and biographer, Paula Broadwell. The talking points also mentioned Sandy Berger, Bill Clinton’s former national security adviser who pleaded guilty to the unauthorized removal and retention of classified material from the National Archives. 

In other words, Richman was a shill for the FBI – which is quite a departure from what James Comey originally described him as. In January, Comey told Congressional investigators that Richman was merely a good friend – failing to mention that he was also his direct report at the FBI for over a year. 

After controversy erupted over whether the memos were classified or not when he wrote them, Richman then said he was Comey’s lawyer – theoretically keeping their communications off-limits to investigators under Attorney-client privilege. 

Since Richman’s time at the bureau, Republican lawmakers have taken interest in his role – specifically in helping Comey leak the contents of at least one memo documenting his private discussions with President Trump to the media, after Richman left the bureau. Richman first emerged last year during Senate testimony as the former FBI director’s contact for getting that information out to the media, to kick-start the Russia special counsel investigation. –Fox News

When in a recent interview asked why he didn’t reveal this under questioning, Comey said “it wasn’t relevant” since Richman left the FBI in February 2017.

Meanwhile, House Judiciary Committee Chairman Bob Goodlatte, R-Va., and House Oversight and Government Reform Committee Chairman Trey Gowdy, R-S.C., have requested that the Department of Justice turn over documents pertaining to Richman’s stint at the FBI and his handling of the memos, via a letter addressed to Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein.

To recap: Comey’s “good friend” and then “lawyer,” Daniel Richman – was also a FBI employee for 17 months serving at his pleasure. Three months after Richman left the FBI, Comey then used Richman to leak the details of his memo to the New York Times within a week of Comey’s firing, in the hopes of sparking the special counsel.

Maybe this was one of the “six ways from Sunday” Chuck Schumer (D-NY) famously threatened President Trump with if he crosses the swamp, as it seems Richman served at Comey’s pleasure even after his unpaid stint at the agency. What a guy!

via RSS https://ift.tt/2Ky3030 Tyler Durden