Treasury Official Arrested, Charged With Leaking Confidential Info On Ex-Trump Advisers; BuzzFeed Implicated

In the latest indication of the Trump administration’s efforts to root out alleged leakers, a senior Treasury Department official working in the Financial Crimes Enforcement Network (FINCEN), Natalie Mayflower Sours Edwards, has been charged with leaking confidential financial reports to the media concerning former Trump campaign advisers Paul Manafort and Richard Gates, according to The Hill

Prosecutors say that Natalie Mayflower Sours Edwards, a senior adviser to FinCEN, photographed what are called suspicious activity reports, or SARs, and other sensitive government files and sent them to an unnamed reporter, in violation of U.S. law. –The Hill

Suspicious Activity Reports are filed by banks in order to confidentially notify law enforcement of potentially illegal financial transactions. The documents leaked by the Treasury official, which began last October, are reported to have been used as the basis for 12 news articles published by an unnamed organization. 

While the news organization was not named in the complaint, it lists the headlines and other details of six BuzzFeed articles published between October 2017 to as recently as Monday which they allege were based on the leaks. 

BuzzFeed reporters Jason Leopold and Anthony Cormier are commonly listed on several of the articles referenced in the government’s complaint. (examples here, here and here). 

Edwards has been charged with one count of unauthorized disclosures of SAR reports and one count of conspiracy to make unauthorized disclousres of SARs. She will be tried in the Southern District of New York, and faces up to 10 years in prison if convicted on both charges. 

When she was arrested, Edwards was in possession of a flash drive which was allegedly used to save the unlawfully disclosed SARs, as well as a cell phone containing numerous communications over an encrypted application in which she transmitted SARs and other sensitive government information to Reporter-1.”

“We hope today’s charges remind those in positions of trust within government agencies that the unlawful sharing of sensitive documents will not be tolerated and will be met with swift justice by this Office,” said US Attorney Geoffrey Berman in a statement. 

According to the criminal complaint, agents in the Treasury inspector general’s office detected “a pattern” of unauthorized media disclosures of the sensitive financial files beginning in October 2017 and continuing for a year. The disclosures were related to matters being investigated either by special counsel Robert Mueller, the U.S. Attorney’s Office for the Southern District of New York or the Justice Department’s National Security Division.

They included leaks about suspicious transactions made by Manafort, Trump’s former campaign chairman, and Gates, Manafort’s longtime business partner who also served on the Trump campaign and the transition team. Both individuals were charged in connection with Mueller’s Russia investigation last October with crimes stemming from their foreign lobbying activity. Both have since decided to plead guilty and cooperate with Mueller’s probe. –The Hill

Could Manafort now make the case that unauthorized media leaks saturating national headlines baised the jury against him? 

Edwards is also accused of leaking sensitive financial information regarding Russian national, Maria Butina, who was charged with acting as an unregistered agent of the Russian government. 

The alleged leak announced Wednesday would be the second major suspected breach at FinCEN reported this year, after a federal law enforcement official told The New Yorker in May that he leaked SARs on a shell company set up by Michael Cohen, Trump’s former attorney, after two similar bank records appeared to be missing from the FinCEN database. –The Hill

Edwards is also accused of sending the reproter internal FinCEN emails, investigative memos and intelligence assessments. 

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Florida Judge Sentences Corrupt Cops to Prison, Slams Prosecution for “Slap on the Wrist”

|||Jay Weaver/TNS/NewscomIn an effort to boost his department’s standing in the local community, a Florida police chief found a way to solve every robbery case in his town. Former Biscayne Park Police Chief Raimundo Atesiano enlisted the help of two officers, Charlie Dayoub and Raul Fernandez, to arrest innocent black men for robberies that occurred in the area in 2013 and 2014.

In July, the U.S. Department of Justice charged all three men with conspiracy to violate civil rights. When it came time for Dayoub and Fernandez to face their actions in court, however, a judge criticized prosecutors for being too lenient.

U.S. District Judge K. Michael Moore sentenced both Dayoub and Fernandez to one year in prison for making false arrests. The men were hoping to avoid prison time by helping prosecutors make their case against Atesiano, who pleaded guilty to civil rights conspiracy last month. Judge Moore reportedly told Assistant U.S. Attorney Harry Wallace that allowing the former cops to avoid jail time would have sent a terrible message to minorities, was “insulting” to others in law enforcement, and would have amounted to a “slap on the wrist.”

Department of Justice attorneys recommended eight months of home confinement for Dayoub and one year probation for Fernandez. Moore said the prosecution’s recommendations were “sentencing manipulation.”

The Biscayne Park Police’s arrest conspiracy affected residents as young as 16. The unnamed teenager was arrested for four previously unsolved burglaries without evidence. In another arrest, the department pinned five separate vehicle burglaries on a 35-year-old; the charges were eventually dropped when the department did not provide sufficient evidence to prosecutors.

Officer Anthony De La Torre reportedly told an internal affairs investigator that officers instructed to collar any black person with “somewhat of a record,” and charge them with the burglaries.

From 2013 to 2014, the department boasted a 100% clearance rate for 30 burglary cases. In 2015, the year after Atesiano stepped down as chief, not a single one of 19 burglary cases was cleared.

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Stocks Sink On Hawkish Minutes, Dollar Gains

In an odd reversal from normal, it is the US equity market that is reacting and bond and FX markets that are ignoring the extreme hawkishness of the Fed Minutes…

Stocks are down across all indices..

The dollar is up modestly extending earlier gains…

and bonds are going nowhere…

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FOMC Minutes Signal ‘Hawkish’ Fed Ready To Hike Above Neutral

After Powell’s ‘reassuring’ hawkish speech, following the briefly dovishly-interpreted Fed statement, all eyes are back on the FOMC Minutes today to see just how assuredly The Fed will stick to its 25bps-per-quarter trajectory, come hell (stock crash) or high water (inflation).

The labor market (judged by the unemployment rate) has rarely been lower and inflation is right at The Fed’s mandated goal so the biggest focus will be on any neutral rate discussions (see chart below on Fed rate trajectory) and any discussions of the potential for inverting the yield curve.

As Bloomberg Chief U.S. Economist Carl Riccadonnanoted

“The Sept. 25-26 FOMC meeting predated much of the recent volatility in financial markets. At the meeting, the broad majority of officials signaled a preference for an additional rate increase in December. Fed watchers will scrutinize the minutes for sources of vulnerability regarding policy makers’ collective conviction — the extent of inflation weakness or tightening of financial conditions — that could lead them to consider either a near-term pause or a slow trajectory of hikes next year.”

If Powell’s PR is anything to go by, the Minutes should be pitched hawkish…and it appeared to do so:

*FED: NUMBER OF OFFICIALS SAW NEED TO HIKE ABOVE LONG-RUN LEVEL

A few participants expected that policy would need to become modestly restrictive for a time and a number judged that it would be necessary to temporarily raise the federal funds rate above their assessments of its longer-run level.”

The Fed is worried about asset bubbles…

“Some participants commented about the continued growth in leveraged loans, the loosening of terms and standards on these loans, or the growth of this activity in the nonbank sector as reasons to remain mindful of vulnerabilities and possible risks to financial stability.”

FOMC Minutes confirm Powell’s implicit “hike until you break something” approach.

Here are the Key Takeaways from the Fed minutes:

  • To be restrictive, or not to be: that was the debate in these minutes, with some important semantics to dissect

    • HAWK “A few participants expected that policy would need to become modestly restrictive for a time”

    • HAWK “A number judged that it would be necessary to temporarily raise the federal funds rate above their assessments of its longer-run level in order to reduce the risk of a sustained overshooting of the Committee’s 2 percent inflation objective or the risk posed by significant financial imbalances”

    • DOVE “A couple of participants indicated that they would not favor adopting a restrictive policy stance in the absence of clear signs of an overheating economy and rising inflation”

    • HAWK “All participants expressed the view that it would be appropriate for the Committee to continue its gradual approach to policy firming by raising the target range for the federal funds rate 25 basis points at this meeting.”

  • Why gradual hikes? To balance the risk of going too fast or too slow

    • “Economic activity rose at a strong rate,” household spending and business fixed investment “grew strongly,” and a few participants saw recent data reflecting a stronger economy than they expected

  • Meanwhile, inflation remained near the 2 percent target and inflation expectations — which Powell says he’s closely watching — “were little changed on balance”; inflation is on track to stay near symmetric 2 percent on “sustained basis”

  • On Yield curve inversion:

    • “A few participants offered perspectives on the term structure of interest rates and what a potential inversion of the yield curve might signal about economic prospects in light of the historical regularity that an inverted yield curve has often preceded the onset of recessions in the United States.”

*  *  *

Since The Fed hiked rates in September, only gold has managed positive returns with the dollar and bonds modestly lower and stocks battered…

Additionally, the odds of a December rate hike remain around 75-80% (notice the volatility introduced briefly by Powell’s hawkish speech)…

 

Meanwhile, the market remains adamant that The Fed is wrong, implying rate cuts through 2019 (as opposed to the Fed’s hikes) despite Powell’s promises…

*  *  *
Full FOMC Minutes:

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Forget Trump. The 2018 Midterm Election Is A Fight About Obamacare’s Pre-Existing Conditions Rules

On the surface, the run-up to the 2018 midterms looks a lot like a circus, with Donald Trump as the ringmaster.

From the furors over Michael Avenatti and Stormy Daniels, to bizarre controversies over dehumanizing internet memes, to silly debates about Elizabeth Warren’s DNA, to the tiffs between Melania Trump and rapper T.I. or Ben Sasse and Sean Hannity, to the latest round of foreign policy horrors, to most every word uttered or tweeted by Trump himself, the news, for those who keep up, often resembles a particularly anarchic variety show, in which every performer looks determined to make a fool of himself. Viewed this way, politics in 2018 resembles most everything else in 2018: weird, bad, and Extremely Online.

But outside of Twitter and cable news chyrons, the midterm itself looks a lot more conventional, a contest about classic kitchen table issues, especially health care, and protections for pre-existing conditions in particular. And in this fight, you can see the shape of health policy debates for years to come.

Although Democrats have been running health care-focused ads all year, the pre-existing conditions argument came to the fore with the nomination of Brett Kavanaugh to the Supreme Court. Prior to the sexual assault allegations against him, one of the most frequent attacks against Kavanaugh was that he would provide a fifth vote to overturn Obamacare’s pre-existing conditions rules, should a lawsuit by conservative state attorneys general reach the High Court.

This was an implausible argument for a variety of reasons—the case is weak, Kavanaugh authored an opinion that offered a legal rationale for upholding the regulations, and even if he did vote against the health law, there would probably still be five votes to keep it in place. But it offered an early preview of the Democrats’ midterm election strategy, which is focused on making the case that Republicans wouldn’t maintain legal protections for people who are or have been sick.

You can see that argument play out, among other places, in Nevada, where Republican Senate candidate Martha McSally has fended off attacks from her Democratic opponent, Kyrsten Sinema, that she doesn’t support protections for people with pre-existing conditions. “That’s a lie,” she told a questioner at a campaign event recently. Instead, McSally has argued that she favors keeping those rules in place.

“I voted to protect people with pre-existing conditions,” McSally said during a debate this week. “We cannot go back to where we were before Obamacare, where people were one diagnosis away from going bankrupt, because they could not get access to health care.” Republicans in a number of races have begun to run ads insisting that they favor pre-existing conditions rules; in Texas, GOP Sen. Ted Cruz closed out a debate with Beto O’Rourke by saying that he wants to preserve those rules.

Liberal pundits have argued that Republicans health care promises are misleading, if not outright lies. I wouldn’t go quite that far, but it’s fair to say that much of what Republicans have said about pre-existing conditions this year is designed to obscure rather than illuminate.

McSally did, for example, vote to preserve some of Obamacare’s pre-existing conditions rules, but only as part of a bill that would have repealed and rewritten the health law, provided less funding for coverage, and allowed insurers to charge sick people more than under existing law. Other Republicans have pointed to their support for legislation that would have required insurers to cover people with pre-existing conditions—but would allow insurers to decline to cover care related to the conditions themselves.

One can perhaps justify these positions on the merits, as attempts to strike a balance between protections for the sick and the actuarial realities of offering similarly priced coverage to everyone, regardless of health status. And it would certainly be possible to make an explicit case that the health law’s pre-existing conditions rules are among the primary drivers of health insurance costs.

But that is not, for the most part, what Republicans are doing. Instead, they are pretending to support Obamacare’s regulations as they exist under Obamacare. They are saying that Obamacare got it right.

You can understand why Republicans might choose to obfuscate.
Voters trust Democrats more on health care, Obamacare has become more popular since Republicans tried and failed to repeal it last year, and the pre-existing conditions regulations almost always poll well. The presence of Obamacare has altered the politics around pre-existing conditions rules.

But even here the story is more complex: Yes, surveys that ask about standalone support for pre-existing conditions show that they are popular, but polls that ask respondents to consider the costs of those rules show the opposite. Yes, Obamacare has become more popular under Trump (moreso than the GOP tax law), but the rise in popularity has occurred as Republicans have made a series of changes to the program that Democrats charged amounted to a policy of coordinated sabotage—cutting promotional funding, allowing for cheaper insurance subject to fewer regulations, ending a line of insurance subsidies a court had ruled illegal, and zeroing out the individual mandate penalty.

Yet the charge of “sabotage” has become harder to sustain as the results of GOP changes have become clear. Under Trump, enrollment in Obamacare’s insurance exchanges has fallen only slightly, the overall uninsured rate has stayed basically the same, and after years of steady hikes, health care premiums have leveled off or even fallen in some states, while insurers who fled the exchanges are returning—all of which offers a potential explanation for why the health law’s popularity is increasing.

What the polling suggests, then, is that the public prefers the version of Obamacare we have now, with stable rates and insurer participation, along with access to a wider variety of plans. The popular version of Obamacare is the one remodeled, but not repealed, by Republicans.

But that, of course, is an argument that neither party is willing to make, at least at the moment. So instead we are witnessing a strange sort of argument, in which Democrats pretend that Republicans have undermined Obamacare, even as the results suggest that little if any serious damage has been done so far, while Republicans pretend they support the law’s pre-existing conditions regulations as they exist today, even as the policies they favor would change them.

The odd shape of this debate is a result of both Obamacare’s flaws, which were visible throughout the Obama administration, as well as its relative stability, in which it has stubbornly refused to collapse under its own weight. It is also a product of the natural dynamic between the two parties when it comes to health policy, in which activist Democrats press for greater government involvement, while Republicans, despite some reformist gestures, back roughly the status quo. And it points toward the equilibrium that is likely to come, in which Republicans end up defending something like Obamacare, while Democrats end up pressing for something like single-payer.

This would be a notable shift from the health policy arguments that have defined the last decade, but it would also mark yet another way in which, even amidst the freakshow weirdness of the Trump era, American politics has retained a core of conventionality: For anyone who prefers an alternative that would reduce and restructure government involvement in health care, it leaves much to be desired.

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Why Is WaPo Suddenly Promoting Trump As “Most Honest President Ever” Ahead Of Midterms?

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

Chill!

They can’t help themselves even as they hurt themselves. Look guys, chill! I saw someone imply on Twitter that Donald Trump is an accomplice in a murder cover-up. This person knows as well as all the ones who liked the tweet that they all just don’t know. They don’t know exactly what Trump knows about the chilling Khashoggi execution.

Just like they don’t know exactly what happened in the consulate. Information from anonymous Turkish sources is dripping through drop by drop, and it looks terrible -and terribly graphic-, but the conclusion that Trump wants to cover up a murder is multiple tokes over the line.

The Saudi attempt at labeling the execution a kidnapping gone wrong is out the window if only a tenth of the Turkish sources’ claims is true. What emerges is a picture of premeditated torture and murder. And one that was ordered by someone in the royal family. Which can really only be one of two people: the King or his son, MbS, and the latter seems more suspect. But what any of it has to do with Trump remains to be seen,

He’s not liking the whole thing one bit, that’s for sure. If only because whatever America does vis a vis the Saudi’s is now ultimately his call. While the strong link between the two countries was established decades ago, and would be very hard to untangle, if it comes to that. See, I can write Ban Saudi Oil, as I did last week, but I also realize how extensive the consequences for the US economy would be if such a thing were considered.

Not a decision you take lightly. Trump for instance knows full well what would happen to his standing and popularity if gas prices were to double or triple overnight. Is that a reason to let the Saudi’s get away with murder? No, but it is a reason to be circumspect, and to demand solid evidence. Doing that doesn’t make anyone an accomplice to a murder cover-up.

Moreover, the dependence on Saudi oil and the petrodollar arrangement is just one facet of what has driven US Middle East policy since WWII -and arguably before-, shaped by governments from both parties in Washington, and driven by very powerful intelligence agencies -both American and foreign- as well as the military-industrial complex.

You can’t blame that all on one man. Not Khashoggi, nor the ‘war’ in Yemen, or any of the bloodshed that has occurred before he became president. And you can’t expect him to end it all on a rainy afternoon either. If he would be inclined to do so. Since no president before him has been, you’d only be criticizing him for continuing established policy.

Every US president for many years has been an accomplice to murder, not just a cover-up, in Saudi Arabia, where women and gays and everyone else the House of Saud didn’t like end up without their heads attached to their torso. It’s how we get cheap oil, how we have built our societies and communities into what they are at present. Good design? Hell no. But it is what it is.

Still, allegations like the murder cover-up one keep coming. The reason is, as I’ve written many times now, that it makes the media money. Being anti-Trump sells. It has given us the Russiagate narrative, the Mueller investigation and tons of other stories that don’t go anywhere. Because it doesn’t matter if they are true, what counts is that they sell newspapers and TV commercials.

And there are some in the media, and certainly many in the anti-Trump echochamber, who still dream of impeaching him. But, as I said before, that doesn’t include the owners of papers and TV channels. They’ve never had a single person bring in sales like this, and it has saved many of their assets. All they need to do is twist everything that happens into something Trump can be blamed for.

That the Democratic Party is the main victim of this doesn’t seem to occur to anyone, really. Or maybe only Trump himself. Three weeks before the midterms, his detractors handed him another two main victories, free of charge. And one can’t help thinking: don’t you guys see what you’re doing?

A lawsuit filed by Michael Avenatti on behalf of Stormy Daniels, about a Trump tweet no less, was thrown out by a judge. The Senate a few weeks back refused to even talk to Avenatti’s other client, Julie Swetnick, in the Kavanaugh hearings, who had come up with a story about coordinated gang rape.

Avenatti has proven incredibly toxic to the Democrats, and they don’t appear to realize it. But he’s nothing compared to Elizabeth Warren, who all but folded her political career this week, after media -reluctantly- reported that the DNA test she wanted Trump to pay a million bucks over, showed she’s less Cherokee than 90-odd percent of white Americans. Liz, why, how, what were you thinking?

Guys, chill! You have elections coming up. Don’t hand it to the guy on a platter, let him at least exert some effort. The Democrats apparently still think they’re going to win the elections, that their echochamber tactics will turn people against Trump. In reality, they’re only talking, shouting, to themselves, and to people who already see things the same way they do anyway.

How many Democrats have you seen declaring that the US should stop selling weapons to the Saudi’s, should tell them to stop starving millions of Yemeni children, should cut off all communication until the truth about Khashoggi is revealed? Me neither. Their identity is no different from Trump, other than on minor issues, the only identity they have is they’re against him. And that’s the same as having none.

While there are so many issues that people should really go after Trump for, all that we see are fake narratives about Russian collusion, which, as I’ve explained, we now know are false because Mueller hasn’t reported anything, and if he had any proof he would have to reveal it because he couldn’t sit on evidence about a president colluding with a foreign power for even one day.

Which is perhaps why, though the timing is strange with the midterms in less than three weeks, two of the strongest anti-Trump media, the Washington Post and the BBC, came out with pieces in the past 24 hours that hesitantly say a few positive things about Trump, albeit clad in inevitable smears and accusations.

The WaPo:

Trump Could Be The Most Honest President In Modern US History

Donald Trump may be remembered as the most honest president in modern American history. Don’t get me wrong, Trump lies all the time. He said that he “enacted the biggest tax cuts and reforms in American history” (actually they are the eighth largest) and that “our economy is the strongest it’s ever been in the history of our country” (which may one day be true, but not yet).

In part, it’s a New York thing – everything is the biggest and the best. But when it comes to the real barometer of presidential truthfulness – keeping his promises – Trump is a paragon of honesty. For better or worse, since taking office Trump has done exactly what he promised he would do.

And the BBC:

Is This The Most Successful Month Of The Trump Presidency?

These days there seems to be even more of a swagger as Donald Trump strides across the South Lawn to board his green-liveried helicopter, Marine One. Those campaign-style rallies, which have become such a marked feature of his presidency, have even more of a celebratory charge. The president seems more willing to answer reporters’ questions, partly because there is a better story to tell.

Last week he also sat for the first 60 Minutes interview of his presidency, which aired on Sunday night. The veteran CBS presenter Lesley Stahl, who conducted this cross-examination, was struck by his self-assurance. “Right now,” she said afterwards, “he’s so much more confident. He is truly president. And you felt it. I felt it in this interview.”

If you didn’t know better, you’d think they’re trying to boost the guy ahead of the elections. Me, I’m wondering why such media don’t harp every single day on the ongoing issue of family separation. And keep at it till every American -and Brit- talks about it. Instead, their biggest story this week has been that Pocahontas was of 1/1024th Native American descent. Or something in that vein.

As for Khashoggi, that story appears to have taken on a life of its own, drip-fed by Erdogan at first, but it seems to have reached a point where even if Erdogan gets what he wanted and cuts the drip, it won’t stop. It’s been a weird dynamic, how one man’s fate is more important than that of millions of others.

Where did that come from? Someone powerful seeing an opportunity to get rid of MbS? Still find it hard to gauge. It doesn’t look as if MbS can be maintained in his position by his father. Too much bad publicity, too much at risk financially. And it would be convenient if Trump and King Salman would agree to push him aside, put all the blame on him, and see if that satisfies the media and public.

But the King may still try and go for broke. And his son may also have usurped too much power for the dad to order him gone. But that would mean a major headache for Trump. How about if either the king or the prince decide to gamble and threaten to end the petrodollar? What would the echochamber suggest Trump does then?

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An email I received today shows us the future of Netflix

Shares of Netflix soared today on news the company lost a record $859 million in cash in the third quarter.

Why are investors applauding this egregious destruction of capital?

Well, it’s because investors only look at one number when Netflix reports earnings – subscriber growth.

And on that metric, the company outperformed, adding 6.96 million subscribers, bringing the global total to more than 137 million.

At 137 million subscribers, Netflix has about 2% of the global population as customers.

There are still around 90 million traditional TV accounts in the US (and about 36% of those also have a streaming account).

So there’s definitely room for Netflix to grow in the US and abroad (where the majority of growth is coming today).

But there’s a lot of competition for those new subscribers.

Netflix is up against YouTube (Google), Facebook, Amazon, Apple, Disney, AT&T, Fox… and all of the traditional cable companies that are fighting to maintain subscribers (and testing new offerings to compete with NFLX).

These are companies with DEEP pockets. They also have hundreds of millions of existing subscribers (in Facebook’s case, billions) to market to.

At the very least, all of the other companies in the space are going to drive the cost for programming way up… bringing margins way down.

But let’s not forget the price Netflix is currently paying for that growth…

The company has burned $1.7 billion in cash this year through the third quarter.

So every new subscriber comes at a giant loss.

And Netflix is making up for those losses with debt.

The company has $8.3 billion in long-term debt, up from $6.5 billion at the end of 2017. And it’s paid $291 million in interest so far this year.

With interest rates rising, that interest expense is only going up.

The company has also spent $6.9 billion on content this year (meaning it should surpass its estimates of $7-8 billion). And it’s on the hook to pay out another $18.6 billion for content in the future. 

 Still, the market values this money-losing, debt-laden and fiscally irresponsible company at $156 billion today.

That’s almost as much as Disney (at $174 billion), a beloved company with a nearly 100-year history that makes billions of dollars in cash every year and, gasp… pays a dividend.

All of the popular companies that are losing money today (Netflix, Uber, Tesla, etc.) are simply a transfer of wealth from investors to customers… because the companies don’t charge enough for their product.

Uber has never turned a profit. But it’s about to go public at $120 billion.

And Tesla is worth more than Honda, despite losing money, missing production deadlines and having a borderline psychotic founder.

I got an email from a company called TransferWise – a tech company that provides low-cost international transfers.

It explained the company has been losing money on every single transaction it makes.

They clearly said they can’t continue providing this service at a loss… and that prices are going up.

They even thanked their customers for hanging in there while they “learn from [their] mistakes.”

Who’d of thunk it?

When you deliberately sell something for less than what it costs you to provide the service, it’s not sustainable.

What a revelation.

It’s as if these companies don’t realize the fact going in… you can’t lose money forever.

TransferWise understands now… all these other companies won’t be that far behind.

But for now, the madness continues…

Uber’s about to go public at $120 billion.

Tesla is worth more than Honda.

Netflix is worth almost as much as Disney.

Lyft, another rideshare service, is also looking at an IPO. But it’s only expected to fetch $15 billion – about one-tenth of Uber.

If Lyft could figure out how to lose more money, then maybe it would have a real business.

These companies are run so poorly, you’d think they were managed by the US Congress.

On the topic, it’s a similar mentality with people still believing the US is the wealthiest country in the world.

It’s got $21 trillion in debt, debt-to-GDP is at 106% and the country is running $1 trillion annual deficits.

Yep, other than that, it’s the wealthiest country in the world.

Source

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San Diego Straight-Up Bans Styrofoam in City-Owned Parks, Beaches, Libraries

San Diego is getting in on the plastic-banning craze sweeping the nation with a new law prohibiting the use of polystyrene foam products a.k.a Styrofoam.

On Monday, the San Diego City Council voted 5-3 to ban the distribution or use of egg cartons, food trays, or any other “food service ware” containing polystyrene foam. Any polystyrene ice chests, beach toys, or dock floats used in the city would need to be completely encased in a non-polystyrene material.

The law also cracks down on plastic utensils and straws, requiring customer to explicitly request one before a restaurant can give them out.

Opponents of the measure included local restaurants who fretted that a ban on cheap polystyrene foam packaging would increase costs, and even put their whole businesses at risk.

“We’re not huge. It’s a small business and we’re just trying to make ends meet,” said Danny Haisha, owner of a local pizzeria and opponent of the ban, at Monday’s city council meeting. “I’m going to have to raise my pricing, and possibly fire more people just to cover the costs [of the Styrofoam ban]. It’s difficult for a small business to truly handle.”

The California Restaurant Association noted that the replacement materials made of paper or other plastics businesses would now have to use cost as much as 145 percent more than traditional polystyrene foam packaging.

The ban’s proponents waved away these concerns, saying that whatever costs the restaurant industry bear would be made up for by the positive economic impact of pristine, stryrofoam-free beaches.

“The aesthetic degradation of our beaches from EPS litter can have a much greater impact on tourism, a $10 billion industry, than the overstated dangers to the restaurant industry,” reads one letter of support from a coalition of environmental groups, including local chapters of Greenpeace and the Sierra Club.

“I feel we need to move forward with this to protect our oceans, marine life and ourselves,” said Councilwoman Lorie Zapf, another ban proponent. “We just have to do something.”

Unlike many polystyrene or straw bans—which typically target just distribution by businesses—San Diego’s ban also prohibits simple use in certain circumstances. The bill’s text would prohibit anyone using polystyrene on city-owned or operated properties or vehicles.

That means anyone carrying a carrying a foam cup of coffee into one of San Diego’s many parks, libraries, police stations, fire stations, airports, stadiums, transitional housing projects, cemeteries, or public beaches would be in violation of this new ban.

What exactly the penalties might be for these scofflaw Styrofoam sippers is hard to tell. The text of the ban says that a first-time offender will earn only a written warning. Repeat violators would, however, be subject to any penalties found in the city’s municipal code, meaning anything from administrative citations and fines to possibly even arrest.

So in addition to the extra costs restaurants and cafes will have to cope with, the San Diego City Council is giving these business owners exceedingly little idea of what sanctions they might face if they do violate the new law.

And while the stated goals of San Diego’s Styrofoam ban won’t do much of anything to advance them. The world’s oceans are indeed filling up with trash, but the vast majority of that trash comes from coastal countries within Africa and Asia, which lack developed waste management systems.

It’s understandable that a coastal city like San Diego would also want to keep its beaches free from trash, polystyrene foam or not. Fortunately, there are already laws on the books against littering which addresses the problem in a far more direct way.

The law will go into effect in January 2019.

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The Heirs to Ammunition Reloaders: New at Reason

To the disappointment of control freaks, DIY gunmaking is rolling along strong despite the arrest of Defense Distributed’s Cody Wilson. But not only that, what is perhaps the biggest DIY weapons community—that of ammunition reloaders—is surging along, as well.

With roots dating back to black powder shooters casting bullets by the campfire, and spurred by ammunition shortages and regulations, people who make their own ammunition quietly demonstrate a desire to place themselves beyond the reach of the state, writes J.D. Tuccille. That ethos should ring a bell with anybody who has ever contemplated purchasing a 3D printer, just in case.

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FOMC Minutes Preview: The Risk Is Of A “Less Hawkish” Tilt

The FOMC September meeting minutes will be published on 17 October 2018 at 2pm ET, when the Fed hiked by 25bps and removed the “accommodative” language, which was initially seen as dovish, but subsequent hawkish comments by Fed Chair Powell, according to which the Fed could “overshoot” the neutral rate, which is still “far away” spooked interest rates and prompted a spike in the 10Y yield. As such, Nomura’s Darren Shames believes that “…the risk is that the minutes give a less “hawkish” impression than some of Powell’s (and several other Fed members) recent remarks.”

Here’s what else to expect in today’s minutes, courtesy of RanSquawk

RATE/NEUTRAL RATE: FOMC hiked rates by 25bps at its September meeting, as was expected, and removed the reference in its statement that policy is ‘accommodative’. Forecasts were little changed, though the central bank’s new dot sees rates at between 3.25-3.50% in 2021, matching the level of its 2020 projection, hinting that the FOMC has put a soft end-date to its hiking cycle. Additionally, it appears that the FOMC does not intend to raise rates above its estimate of neutral (the broadest estimate of the Fed’s neutral rate range, determined from FOMC speakers over the past few months, is between 2.50-3.50%). In his press conference, Powell endorsed a gradual approach, and noted that some participants saw a moderate overshoot of neutral rate.

FED INDEPENDENCE: On the central bank’s independence, he claimed the Fed does not consider political factors when deciding policy as it focuses on the mandate, following the recent criticisms of US President Trump. Some argued that the Fed’s chair Powell tilted hawkish in a recent moderated discussion as a shot across Trump’s bow, a defiant move to signal the Fed’s independence. (Powell said “interest rates are still accommodative, but we’re gradually moving to a place where they’ll be neutral,” and added that “[the FOMC] may go past neutral. But we’re a long way from neutral at this point, probably” – comments which were taken as hawkish by rates traders). However, SGH Macro are dismissive of this view: “We do not think his remarks were meant as a hardening per se of a hawkish messaging on the Fed’s already presumed base rate path. He was instead delivering pretty much the same message but speaking to a more lay audience,” SGH says, adding “Powell in fact has made a point of not only speaking in plain English but also reaching to a wider public than the markets or any particular tweeters.

FORWARD GUIDANCE: Related to the neutral rate and staff economic projections, UBS says there will likely be discussion of its intention of dialing back forward guidance, “that theme has come out in Powell’s speeches, but may increasingly show up more broadly,” UBS says.

US ECONOMY: At his press conference, Powell sounded upbeat about US economic prospects, defining this as a particularly bright moment for the US economy. Powell noted dropping the ‘accommodative’ language was a sign that monetary policy is proceeding in line with the Fed’s expectations, and does not signal a change of the rate path. He however noted that if inflation surprised to the upside, the Fed would have to move quicker, but stressed he did not see that happening; similarly, a slowing down in the economy or in the financial conditions is something the Fed would react to, Powell said.

TRADE WARS: Powell said trade was a downside risk, though the effects of trade tensions have been relatively small so far. The Fed chair referred to the recent Beige Book, which contained many references to difficulties agents were facing on the back of trade relations. In terms of the inflationary impact, Powell said tariffs might provide a basis to companies to raise prices, while noting the uncertainty that trade still represents.

BALANCE SHEET: HSBC will be keeping an eye on comments relating to balance sheet policy after the FOMC’s August meeting minutes stated that the central bank will begin discussions on its balance sheet policy in the fall. “A drift upward in the federal funds rate within the FOMC’s target range suggests that bank reserves are becoming less abundant, raising questions about how long the Fed can go on reducing its balance sheet,” HSBC said.

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