All Things Being Equal…

Authored by Sven Henrich via NorthmanTrader.com,

All things being equal, the 2019 rally stinks. No really. Remember those new all time highs on $SPX and $NDX at the end of April? Fake. Why? Because on an equal weight basis the 2019 rally was the weakest of the last 3 rallies. By far.

Firstly, what is equal weight? Look no further than the $XVG, the value line geometric index.

$XVG tracks the median moves its components using the assumption that each stock has an equal amount (for example, $1,000) invested in them. The daily average moves of stocks are then calculated geometrically (rather than arithmetically). In basic terms, the Value Line Geometric Index eliminates an illusion created by cap-weighted index components. Heavily weighted stocks within a cap-weighted index can pull it higher even as the majority of the stocks within the index are not following along. For example, in a cap-weighted index like the S&P 500, it’s possible for the top 100 weighted stocks to carry the index higher while the remaining 400 stocks lose value. As an investor, it might be helpful to identify when this is happening.

Well it just happened in 2019 and in a big way.

Compare the $XVG readings in 2019 to the readings of 2018 when $SPX made its previous highs:

Didn’t even get close. Which implies that the broader market did not follow some of the big cap names to new highs, hence the recent headlines of new market highs were very deceiving.

And now that $SPX has fallen below the January 2018 highs again this broader market underperformance is very visible.

Big bull market? Where? Negative returns since the January 2018 highs, except select tech:

Why is all this potentially critically important? Well, simply because we’ve seen this movie before.

After all the market highs in the fall of 2007 came in a weakening $XVG:

New highs on weakening equal weight have been the hallmark of major previous tops before (see also 2000) as investors piled into the select winners and ignored the message of the larger market beneath.

But hey, maybe it’s different this time. All things being equal, they don’t appear to be.

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via ZeroHedge News http://bit.ly/2wbZPrS Tyler Durden

‘They Were Conned’: How Bankers Devastated Thousands Of New York City Taxi Medallion Owners

For the last several years, we reported an increase of suicides by taxi drivers in New York City was the result of insurmountable debts and financial stress of medallion owners. During the halving of medallion prices in the last four years, industry leaders and officials conveniently blamed ride-hailing companies such as Uber and Lyft.

But a New York Times report revealed much of financial stress could be linked to industry leaders who artificially drove up prices, creating a huge bubble that would eventually implode.

In the last 12 years, thousands of foreigners poured their life savings into scammy loans and had hundreds of millions of dollars extracted from them by financial institutions.

Bankers, brokers, lawyers, investors, fleet owners, and debt collectors generated huge profits from these business practices. These people became multimillionaires, Wall Street cheered, and medallion brokers bought yachts and waterfront properties.

These predatory practices robbed immigrant families of all their monies, overwhelmed drivers with large debt loads, and collapsed an industry that has been so iconic to New York for more than five decades.

The Times said 950 medallion owners have filed for bankruptcy and thousands more are on the verge of financial ruin.

The Times noted that lending practices were as fraudulent as the subprime mortgage industry pre-summer 2007, that eventually led to the 2008 global economic meltdown.

“The whole thing was like a Ponzi scheme because it totally depended on the value going up,” said Haywood Miller, a debt specialist who has consulted for both borrowers and lenders.

“The part that wasn’t fair was the guy who’s buying is an immigrant, maybe someone who couldn’t speak English. They were conned.

The combination of the Federal Reserve’s easy money and enthusiastic borrowers helped prices soar from 2002 to 2014. The money was so good that major financial institutions wanted in on the taxi industry after 2008.

The Times even said industry leaders were artificially bidding up medallions to keep the scheme from imploding, moving prices from $200,000 per medallion, to more than $1,000,000 in 2014. During this period of rapid price inflation, driver incomes hardly changed, while Wall Street speculated with thousands of people’s lives.

Almost 4,000 drivers bought medallions in those 12 years. These people, mostly foreigners, were excited to achieve the American dream, but the debt-fuelled Ponzi scheme of Wall Street, for the most part, left them all holding the bag.

“Much of the devastation can be traced to a handful of powerful industry leaders who steadily and artificially drove up the price of taxi medallions, creating a bubble that eventually burst. Over more than a decade, they channeled thousands of drivers into reckless loans and extracted hundreds of millions of dollars before the market collapsed.”

“The practices were strikingly similar to those behind the housing market crash that led to the 2008 global economic meltdown: Banks and loosely regulated private lenders wrote risky loans and encouraged frequent refinancing; drivers took on debt they could not afford, under terms they often did not understand…Some industry leaders fed the frenzy by purposefully overpaying for medallions in order to inflate prices, The Times discovered.

“As in the housing crash, government officials ignored warning signs and exempted lenders from regulations. The city Taxi and Limousine Commission went the furthest of all, turning into a cheerleader for medallion sales. It was tasked with regulating the industry, but as prices skyrocketed, it sold new medallions and began declaring they were “better than the stock market.” …At the market’s height, medallion buyers were typically earning about $5,000 a month and paying about $4,500 to their loans,” according to the report.

The implosion of the taxi medallion bubble was nothing more than a Ponzi scheme that enabled Wall Street bankers to extract hundreds of millions of dollars from low-income foreigners. The story about Uber and Lyft was just a cover for what really happened.

via ZeroHedge News http://bit.ly/2VO7ImC Tyler Durden

Holocaust Revisionism at Williams College

KC Johnson has an excellent piece at the Tablet about a recent controversy at Williams College involving the refusal of the student government to recognize a pro-Israel student group, and the College’s administration’s subsequent reaction. Perhaps the most striking part of Johnson’s piece is the following:

The Holocaust bit speaks for itself. The “genocide against Palestinians” trope, regarding a population which has had among the highest population growth rates in the world, whose standard of living improved dramatically during the Israeli occupation but before Oslo gave them (limited) self-rule, is a great example of people believing something because they want to believe it, regardless of the facts. I’ve challenged many folks on social media regarding this particular trope, and have concluded that this trope is essentially is evidence-proof, and can only really be explained by a pathological hostility to Israel that not surprisingly often has a strong antisemitic component.

This sort of ignorance mixed with malice reminds me of a prior post of mine about Oberlin College, involving leftist students who dismissed the Holocaust as merely an example of “white on white crime.”

from Latest – Reason.com http://bit.ly/2WTLts5
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NYC Schools Chief Accused Of Creating Environment “Hostile” To White People

Authored by Dave Huber via The College Fix,

The chancellor of the Big Apple’s schools stands accused of creating an atmosphere “which is hostile toward whites,” according to city Department of Education insiders.

A quartet of veteran DOE white female executives is set to sue the city due to Chancellor Richard Carranza’s “sweeping reorganization” which “pushed aside” Caucasians.

According to the New York Post, Carranza’s reforms allegedly favored less qualified minorities over experienced whites. A source told the Post that “There’s a toxic whiteness concept going on […] decisions are being made because DOE leadership believes that skin color plays a role in how to get equity — that white people can’t convey the message.”

Sources claim that under Carranza, whites have been told “they must give up power or lose responsibilities no matter how well they have performed.”

From the story:

More than a dozen high-ranking superintendents and deputies who had served under ex-Chancellor Carmen Fariña have been demoted — some with large pay cuts — or pushed into retirement, sources said. Others have lesser duties and new bosses.

“Since Carranza took office, he’s brought in a lot of new people. As a result, it’s been bureaucratic chaos and backbiting, with deputies and their subordinates seeking better perches in the pecking order,” said David Bloomfield, a Brooklyn College and CUNY Grad Center education professor.

“Racial tensions appear to be one manifestation of these internal battles.”

Meanwhile, the DOE has spent hundreds of thousands of dollars on consultants to coach supervisors on how to “disrupt the power structure and dismantle institutional racism,” a supervisor said.

“There’s been a lot of discussion of white supremacy and how it manifests in the workplace, conversations about race, and looking at how the white culture behaves,” said a white executive who received the training.

“White supremacy is characterized by perfectionism, a belief in meritocracy, and the Protestant work ethic,” the exec said, adding that whites who object when accused of deep-rooted bias are called “fragile” and “defensive.”

This should come as little surprise as one of the consultants hired by the city is Glenn Singleton, creator of the so-called “Courageous Conversations.” Among other things, Singleton posits that “’white talk is ‘verbal, intellectual and task-oriented,’ while ‘color commentary is ’emotional and personal.’”

Singleton’s company has thus far received over half a million dollars, and is contracted for a total of $775,000, according to the Post.

At the cost of an additional $175,000, the city also has hired “DEEP” — the Disruptive Equity Education Project. Company founder Darnisa Amante says her program works “to change mindsets around equity and [the] dismantling [of] systemic oppression and racism.”

One DOE insider says trainings like Singleton’s and Amante’s are anything but courageous, to use part of the title of the former’s program. “The intent is to create a shared understanding,” the insider said. “They believe this is positive and helpful. But it’s resulted in a hostile environment where whites are subject to being criticized, belittled and harassed.”

Indeed, how “courageous” is it when right off the bat you state that your conversations will deliberately exclude factors such as family structure and socioeconomic status when it comes to a children’s educations?

Earlier this year in response to complaints of student misbehavior in city schools, Carranza praised the drop in student suspension rates: “What we don’t want is to put students on a school to prison pipeline.”

City DOE spokesman Will Mantell denies any wrongdoing by the department:

“We hire the right people to get the job done for kids and families, and any claim of ‘reverse racism’ has no basis in fact. We’ll continue to foster a supportive environment for all our employees.”

Read the Post article.

h/t to Roxanne.

via ZeroHedge News http://bit.ly/2JuZrgQ Tyler Durden

Navy Busts Seamen For Ranking Female Crewmates, Creating “Rape List”

The US Navy ignored concerns over a sexually explicit “rape list” of female submariners circulating aboard the USS Florida – the second Navy submarine to integrate female crew members, according to records obtained by Military.com through a Freedom of Information Act (FOIA) request. 

The sexually explicit list describes various USS Florida females by appearances, characteristics and various sexual acts the creators of the list wish to perform with them,” though it is important to note that an investigation found that “the list describes aggressive sexual activity, but does not reference non-consensual acts.” 

According to the report, there were two lists in existence; the first ranked the 32 women onboard the sub’s 173-person crew by attractiveness using a star system. The second included sexually explicit comments next to each name which corresponded to the star rankings, according to a 74-page report detailing the misconduct. 

On June 3, 2018, a sailor aboard the Florida printed the first list with the names of every female Gold crewmember when the sub was at Naval Support Facility Diego Garcia in the Indian Ocean. The sailor gave the list to a female petty officer the following day. It included between one and four asterisks next to every woman’s name.

About 10 days later, that same sailor printed the second list and again gave it to the same female petty officer. The sailor told her the lists were housed on the submarine’s computer network, where they were updated every few weeks. Male crewmembers were going to vote again on them soon, the sailor told the petty officer. –Military.com

The report says female crewmembers were full of “fear, anger and disgust,” while men said they were “horrified, appalled, outraged and less trusting.” One woman said the lists made “her question all the males on the boat.” 

Capt. Gregory Kercher, commander of the submarine’s Gold Crew, was alerted to the list in June. Kercher reportedly ordered an investigation into the sub’s computer network to try and determine who had accessed the list, however he did not open a full investigation or notify his command

“Although he took some action in response to the list, there is no question that those minimal actions fell far short of expected standards and norms for an event of this magnitude,” Rear Adm. Jeff Jablon, former commander of Submarine Group 10, wrote to a superior. 

Kercher was subsequently removed from his post in August for a “loss of confidence in his ability to command.” 

“Only after being formally approached by a female petty officer … several weeks after the discovery of the list, did Capt. Kercher recognize that additional actions were warranted,” wrote Jablon in his letter recommending Kercher’s dismissal. 

The adviser, the chief of the boat, “took it straight to the CO,” according to the investigation. But Kercher declined to open an investigation because “they only had a piece of paper,” the report states.

“CO believed he needed to determine where it was generated and who generated the list before assigning an investigating officer,” investigators wrote.

At that point, the chief of the boat told investigators he was cut out of further talks about the lists. He was not present when Kercher discussed the list with sailors and suspects, he told investigators. At one point, Kercher told him to “slow down” because he was getting too involved, the investigation states. –Military.com

“Junior sailors do not feel safe knowing that the command has done ‘nothing’ to try to actively find out who has written or added to the list,” states the investigation. 

Of note, both Kercher and the Naval Criminal Investigative Service (NCIS) were unable to find the actual list(s) after a “thorough forensic search of the submarine’s computer networks and drives,” according to Cmdr. Sarah Self-Kyler, a spokeswoman for U.S. Submarine Forces.

As part of the investigation, two enlisted sailors were found to have displayed inappropriate conduct and were “administratively discharged from the navy.” 

All good?

Following a “thorough review of the force,” the top admiral overseeing all personnel says he believes the situation aboard the Florida was an isolated incident and “not at all reflective of the overall outstanding performance and behavior of our submariners force-wide.”

“While I cannot guarantee that an incident such as this will never happen again, I can guarantee that we will continue to enforce our high standards of conduct and character in the Force,” Vice Adm. Chas Richard, commander of U.S. Submarine Forces, said in a statement provided to Military.com. “I expect every submariner to treat one another with dignity and respect, and will hold our personnel accountable if they fall short of our standard.

via ZeroHedge News http://bit.ly/2HDUvmn Tyler Durden

Trump Loses Round One in Financial Record Fight

This afternoon, Judge Amit Mehta of the U.S. District Court of the District of Columbia rejected President Donald Trump’s attempt to block a congressional subpoena seeking financial records from Trump’s accountants.

Here is the introduction to Judge Mehta’s opinion in Trump v. Committee on Oversight and Reform:

I do, therefore, . . . solemnly protest against these proceedings of the House of Representatives, because they are in violation of the rights of the coordinate executive branch of the Government, and subversive of its constitutional independence; because they are calculated to foster a band of interested parasites and informers, ever ready, for their own advantage, to swear before ex parte committees to pretended private conversations between the President and themselves, incapable, from their nature, of being disproved; thus furnishing material for harassing him, degrading him in the eyes of the country . . .

– President James Buchanan

These words, written by President James Buchanan in March 1860, protested a resolution adopted by the U.S. House of Representatives to form a committee—known as the Covode Committee—to investigate whether the President or any other officer of  the Executive Branch had sought to influence the actions of Congress by improper means. . . . Buchanan “cheerfully admitted” that the House of Representatives had the authority to make inquiries “incident to their legislative duties,” as “necessary to enable them to discover and to provide the appropriate legislative remedies for any abuses which may be ascertained.” But he objected to the Covode Committee’s investigation of his conduct. He maintained that the House of Representatives possessed no general powers to investigate him, except when sitting as an impeaching body. Buchanan feared that, if the House were to exercise such authority, it “would establish a precedent dangerous and embarrassing to all my successors, to whatever
political party they might be attached.”

Some 160 years later, President Donald J. Trump has taken up the fight of his predecessor. On April 15, 2019, the Committee on Oversight and Reform of the House of Representatives issued a subpoena for records to Mazars USA LLP, a firm that has provided accounting services to President Trump. The subpoena called for Mazars to produce financial records and other documents relating to President Trump personally as well as various associated businesses and entities dating back to 2011—years before he declared his candidacy for office. The decision to issue the subpoena came about after the President’s former lawyer and confidant, Michael Cohen, testified before the House Oversight Committee that the President routinely would alter the estimated value of his assets and liabilities on financial statements, depending on the purpose for which a statement was needed. For instance, Cohen said that the President provided inflated financial statements to a bank to obtain a loan to purchase a National Football League franchise. But when it came time to calculate his real estate taxes, the President would deflate the value of certain assets. To support his accusations, Cohen produced financial statements from 2011, 2012, and 2013, at least two of which were prepared by Mazars.

Echoing the protests of President Buchanan, President Trump and his associated entities are before this court, claiming that the Oversight Committee’s subpoena to Mazars exceeds the Committee’s constitutional power to conduct investigations. The President argues that there is no legislative purpose for the subpoena. The Oversight Committee’s true motive, the President insists, is to collect personal information about him solely for political advantage. He asks the court to declare the Mazars subpoena invalid and unenforceable.

Courts have grappled for more than a century with the question of the scope of Congress’s investigative power. The binding principle that emerges from these judicial decisions is that courts must presume Congress is acting in furtherance of its constitutional responsibility to legislate and must defer to congressional judgments about what Congress needs to carry out that purpose. To be sure, there are limits on Congress’s investigative authority. But those limits do not substantially constrain Congress. So long as Congress investigates on a subject matter on which “legislation could be had,” Congress acts as contemplated by Article I of the Constitution.

Applying those principles here compels the conclusion that President Trump cannot block the subpoena to Mazars. According to the Oversight Committee, it believes that the requested records will aid its consideration of strengthening ethics and disclosure laws, as well as amending the penalties for violating such laws. The Committee also says that the records will assist in monitoring the President’s compliance with the Foreign Emoluments Clauses. These are facially valid legislative purposes, and it is not for the court to question whether the Committee’s actions are truly motivated by political considerations. Accordingly, the court will enter judgment in favor of the Oversight Committee.

 

No doubt this opinion will be appealed. Trump’s attorneys may succeed in obtaining a stay, or otherwise slowing down these proceedings, but I expect they will ultimately be unsuccessful.

Assuming Congress must be able to identify a legitimate legislative purpose when seeking such information, Judge Mehta is correct to conclude that that any such requirement is amply satisfied here. The President is not a private individual. His financial information is relevant to the legislature’s authority to determine whether foreign emoluments are to be permitted and under what conditions, as well as to whether presidential conduct implicates his oath of office or could justify an impeachment inquiry. Whether or not relevant legislation has been introduced or a formal impeachment inquiry has been opened is irrelevant, as Congress is not required to introduce legislation before investigating whether any such legislation is desirable, nor is Congress required to open a formal impeachment proceeding before looking into whether such a proceeding would be justified, and it would be a stark departure from traditional separation of powers norms for a court to conclude otherwise.

from Latest – Reason.com http://bit.ly/2VFM3YM
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5G Danger: 100s Of Respected Scientists Sound Alarm About Health Effects As 5G Networks Go Global

Authored by Michael Snyder via The End of The American Dream blog,

Even though many in the scientific community are loudly warning about the potential health effects that 5G technology could have on the general population, Verizon and AT&T are starting to put up their 5G networks in major cities all across the nation. 

Today, the total number of cell phones exceeds the entire population of the world, and the big cell phone companies are making a crazy amount of money providing service to all of those phones.  And now that the next generation of cell phone technology has arrived, millions of cell phone users are looking forward to better connections and faster speeds than ever before.  In fact, President Trump says that 5G networks will be up to 100 times faster than the current 4G networks that we are using right now…

5G will be as much as 100 times faster than the current 4G cellular networks. It will transform the way our citizens work, learn, communicate, and travel. It will make American farms more productive, American manufacturing more competitive, and American healthcare better and more accessible. Basically, it covers almost everything, when you get right down to it. Pretty amazing.

And just as 4G networks paved the way for smartphones and all of the exciting breakthroughs — they made possible so many things — this will be more secure and resilient. 5G networks will also create astonishing and really thrilling new opportunities for our people — opportunities that we’ve never even thought we had a possibility of looking at.

Sounds great, right?

But in order to achieve such vastly superior performance, 5G networks will use technology that is completely different from 4G networks.

5G waves are “ultra high frequency” and “ultra high intensity”, but they are also easily absorbed by objects such as buildings and trees.  So although cell towers will be much, much smaller, but they will also have to be much, much closer together than before.  According to CBS News, it is estimated that the big cell phone companies will be putting up at least 300,000 of these small towers, and it has been projected that it will cost hundreds of billions of dollars to fully set up the 5G network nationwide.

Needless to say, there is a tremendous amount of money at stake, and the big cell phone companies are trying very hard to assure everyone that 5G technology is completely safe.

But is it?

Today, there is a growing body of scientific evidence that indicates that the electromagnetic radiation that we are constantly being bombarded with is not good for us.  Hundreds of scientists that are engaged in research in this area have signed the “International EMF Scientist Appeal”, and this is how that document begins…

We are scientists engaged in the study of biological and health effects of non-ionizing electromagnetic fields (EMF). Based upon peer-reviewed, published research, we have serious concerns regarding the ubiquitous and increasing exposure to EMF generated by electric and wireless devices. These include–but are not limited to–radiofrequency radiation (RFR) emitting devices, such as cellular and cordless phones and their base stations, Wi-Fi, broadcast antennas, smart meters, and baby monitors as well as electric devices and infra-structures used in the delivery of electricity that generate extremely-low frequency electromagnetic field (ELF EMF).

In the next paragraph, we are told that “cancer risk”, “genetic damages”, “functional changes of the reproductive system”, and “neurological disorders” are some of the health risks that have been discovered by the scientific research that has been conducted so far…

Numerous recent scientific publications have shown that EMF affects living organisms at levels well below most international and national guidelines. Effects include increased cancer risk, cellular stress, increase in harmful free radicals, genetic damages, structural and functional changes of the reproductive system, learning and memory deficits, neurological disorders, and negative impacts on general well-being in humans. Damage goes well beyond the human race, as there is growing evidence of harmful effects to both plant and animal life.

And remember, 5G technology is going to take all of this to an entirely new level.

Because the 5G towers are going to be so powerful and so close together, it will essentially be like living in a closed radiation chamber 24 hours a day.

Over in Israel, one scientist has discovered that the surface of the human body actually draws in 5G radiation “like an antenna”

What’s further disturbing about 5G radiation is how the human body responds to and processes it. Dr. Ben-Ishai from The Hebrew University of Jerusalem discovered as part of a recent investigation that human skin acts as a type of receptor for 5G radiation, drawing it in like an antenna.

“This kind of technology, which is in many of our homes, actually interacts with human skin and eyes,” writes Arjun Walia for Collective Evolution about the study.

“… human sweat ducts act like a number of helical antennas when exposed to these wavelengths that are put out by the devices that employ 5G technology,” he adds.

In other words, our bodies are essentially magnets for 5G radiation.

So will it be worth it?

Will you be willing to risk your life in order to have better connections and faster speeds?

Sure, your phone will be more useful than ever before, but there is also the possibility that you could get cancer.  Even the American Cancer Societyacknowledges the risk…

A recent large study by the US National Toxicology Program (NTP) exposed large groups of lab rats and mice to RF energy over their entire bodies for about 9 hours a day, starting before birth and continuing for up to 2 years (which is the equivalent of about 70 years for humans, according to NTP scientists). The study found an increased risk of tumors called malignant schwannomas of the heart in male rats exposed to RF radiation, as well as possible increased risks of certain types of tumors in the brain and adrenal glands.

Of course all previous studies have been done on existing cell phone technology.

No studies have been done on the health effects of our new ultra-powerful 5G technology, and this has many scientists extremely concerned.

Dr. Martin Pall, a PhD and Professor Emeritus of Biochemistry and Basic Medical Sciences at Washington State University, says that rolling out 5G without any safety testing whatsoever “has got to be about the stupidest idea anyone has had in the history of the world”.

Unfortunately, there is no organized opposition and 5G networks are going up all over the country right now.

So it won’t be too long before you are being bombarded by “ultra high frequency” and “ultra high intensity” cell phone radiation wherever you go, and most people won’t even realize what is happening.

And if you do get sick, the cell phone companies sure aren’t going to pay the bill.

via ZeroHedge News http://bit.ly/2EleplA Tyler Durden

Trump Loses Round One in Financial Record Fight

This afternoon, Judge Amit Mehta of the U.S. District Court of the District of Columbia rejected President Donald Trump’s attempt to block a congressional subpoena seeking financial records from Trump’s accountants.

Here is the introduction to Judge Mehta’s opinion in Trump v. Committee on Oversight and Reform:

I do, therefore, . . . solemnly protest against these proceedings of the House of Representatives, because they are in violation of the rights of the coordinate executive branch of the Government, and subversive of its constitutional independence; because they are calculated to foster a band of interested parasites and informers, ever ready, for their own advantage, to swear before ex parte committees to pretended private conversations between the President and themselves, incapable, from their nature, of being disproved; thus furnishing material for harassing him, degrading him in the eyes of the country . . .

– President James Buchanan

These words, written by President James Buchanan in March 1860, protested a resolution adopted by the U.S. House of Representatives to form a committee—known as the Covode Committee—to investigate whether the President or any other officer of  the Executive Branch had sought to influence the actions of Congress by improper means. . . . Buchanan “cheerfully admitted” that the House of Representatives had the authority to make inquiries “incident to their legislative duties,” as “necessary to enable them to discover and to provide the appropriate legislative remedies for any abuses which may be ascertained.” But he objected to the Covode Committee’s investigation of his conduct. He maintained that the House of Representatives possessed no general powers to investigate him, except when sitting as an impeaching body. Buchanan feared that, if the House were to exercise such authority, it “would establish a precedent dangerous and embarrassing to all my successors, to whatever
political party they might be attached.”

Some 160 years later, President Donald J. Trump has taken up the fight of his predecessor. On April 15, 2019, the Committee on Oversight and Reform of the House of Representatives issued a subpoena for records to Mazars USA LLP, a firm that has provided accounting services to President Trump. The subpoena called for Mazars to produce financial records and other documents relating to President Trump personally as well as various associated businesses and entities dating back to 2011—years before he declared his candidacy for office. The decision to issue the subpoena came about after the President’s former lawyer and confidant, Michael Cohen, testified before the House Oversight Committee that the President routinely would alter the estimated value of his assets and liabilities on financial statements, depending on the purpose for which a statement was needed. For instance, Cohen said that the President provided inflated financial statements to a bank to obtain a loan to purchase a National Football League franchise. But when it came time to calculate his real estate taxes, the President would deflate the value of certain assets. To support his accusations, Cohen produced financial statements from 2011, 2012, and 2013, at least two of which were prepared by Mazars.

Echoing the protests of President Buchanan, President Trump and his associated entities are before this court, claiming that the Oversight Committee’s subpoena to Mazars exceeds the Committee’s constitutional power to conduct investigations. The President argues that there is no legislative purpose for the subpoena. The Oversight Committee’s true motive, the President insists, is to collect personal information about him solely for political advantage. He asks the court to declare the Mazars subpoena invalid and unenforceable.

Courts have grappled for more than a century with the question of the scope of Congress’s investigative power. The binding principle that emerges from these judicial decisions is that courts must presume Congress is acting in furtherance of its constitutional responsibility to legislate and must defer to congressional judgments about what Congress needs to carry out that purpose. To be sure, there are limits on Congress’s investigative authority. But those limits do not substantially constrain Congress. So long as Congress investigates on a subject matter on which “legislation could be had,” Congress acts as contemplated by Article I of the Constitution.

Applying those principles here compels the conclusion that President Trump cannot block the subpoena to Mazars. According to the Oversight Committee, it believes that the requested records will aid its consideration of strengthening ethics and disclosure laws, as well as amending the penalties for violating such laws. The Committee also says that the records will assist in monitoring the President’s compliance with the Foreign Emoluments Clauses. These are facially valid legislative purposes, and it is not for the court to question whether the Committee’s actions are truly motivated by political considerations. Accordingly, the court will enter judgment in favor of the Oversight Committee.

 

No doubt this opinion will be appealed. Trump’s attorneys may succeed in obtaining a stay, or otherwise slowing down these proceedings, but I expect they will ultimately be unsuccessful.

Assuming Congress must be able to identify a legitimate legislative purpose when seeking such information, Judge Mehta is correct to conclude that that any such requirement is amply satisfied here. The President is not a private individual. His financial information is relevant to the legislature’s authority to determine whether foreign emoluments are to be permitted and under what conditions, as well as to whether presidential conduct implicates his oath of office or could justify an impeachment inquiry. Whether or not relevant legislation has been introduced or a formal impeachment inquiry has been opened is irrelevant, as Congress is not required to introduce legislation before investigating whether any such legislation is desirable, nor is Congress required to open a formal impeachment proceeding before looking into whether such a proceeding would be justified, and it would be a stark departure from traditional separation of powers norms for a court to conclude otherwise.

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Unpacking the Supreme Court’s decision in Pepper v. Apple

We begin this episode with a quick tour of the 5-4 Apple antitrust decision that pitted two Trump appointees against each other. Matthew Heiman and I consider the differences in judging styles that produced the split—and the role that 25 years of living with Silicon Valley “platform billionaires” may have played in the decision.

Eric Emerson joins us for the first time to talk about the legal fallout from the latest tariff increases on Chinese products. Short version: companies have some short-term tactics to explore (country of origin, drawback, valuation), but large importers/resellers will have to grapple with larger and costlier strategies of supply chain diversification and localization.

Meanwhile, China has not been taking the trade war lying down. In addition to its own tariff increases, it now seems to be enforcing its demanding cybersecurity law more aggressively against foreign firms. I suggest that we may also be seeing retaliation in Chinese courts as well.

In related news, Nick Weaver and I debate the potentially sweeping new Executive Order on Securing the Information and Communications Technology and Services Supply Chain.

Maury Shenk explains the UK Supreme Court ruling that expands the court’s authority over the UK’s intelligence agencies—despite clear Parliamentary language to the contrary. Bottom line: Bad news for UK intelligence. Hidden good news for the US: Turns out that there is something worse than activist judges interpreting a written constitution – activist judges who can more or less make up the constitution they interpret.

It was a cybersecurity disaster week for some of the biggest names in tech. Nick helps me understand which bugs were worst, Cisco’s, Intel’s, or Microsoft’s. Then we review the equally bad week that the NSO Group and its WhatsApp exploit had.

Cleaning up in a lightning round:  We cover the order requiring the Chinese owner of Grindr to sell by mid-2020. We also cover Canada’s approach to social media, which spurs me to offer unwonted praise for France’s Macron and his moderation. The EU has a plan for sanctions on cyberattackers; Matthew and I doubt it will get much use. Is too much fuss being made over leak investigators using Web bugs to see if defense counsel at Guantanamo have been leaking; Nick and I disagree, at least a bit.

And the podcast closes with yet another installment in our long-running feature, “This Week in Internet Sex Toy Law.” Suffice it to say that the latest case can’t be understood without consulting both Orin Kerr and Jerry Seinfeld.

Download the 264th Episode (mp3).

You can subscribe to The Cyberlaw Podcast using iTunes, Google Play, Spotify, Pocket Casts, or our RSS feed!

As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with @stewartbaker on Twitter. Send your questions, comments, and suggestions for topics or interviewees to

CyberlawPodcast@steptoe.com. Remember: If your suggested guest appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

The views expressed in this podcast are those of the speakers and do not reflect their firms, clients, spouses, or families.

from Latest – Reason.com http://bit.ly/2JvO2NX
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Unpacking the Supreme Court’s decision in Pepper v. Apple

We begin this episode with a quick tour of the 5-4 Apple antitrust decision that pitted two Trump appointees against each other. Matthew Heiman and I consider the differences in judging styles that produced the split—and the role that 25 years of living with Silicon Valley “platform billionaires” may have played in the decision.

Eric Emerson joins us for the first time to talk about the legal fallout from the latest tariff increases on Chinese products. Short version: companies have some short-term tactics to explore (country of origin, drawback, valuation), but large importers/resellers will have to grapple with larger and costlier strategies of supply chain diversification and localization.

Meanwhile, China has not been taking the trade war lying down. In addition to its own tariff increases, it now seems to be enforcing its demanding cybersecurity law more aggressively against foreign firms. I suggest that we may also be seeing retaliation in Chinese courts as well.

In related news, Nick Weaver and I debate the potentially sweeping new Executive Order on Securing the Information and Communications Technology and Services Supply Chain.

Maury Shenk explains the UK Supreme Court ruling that expands the court’s authority over the UK’s intelligence agencies—despite clear Parliamentary language to the contrary. Bottom line: Bad news for UK intelligence. Hidden good news for the US: Turns out that there is something worse than activist judges interpreting a written constitution – activist judges who can more or less make up the constitution they interpret.

It was a cybersecurity disaster week for some of the biggest names in tech. Nick helps me understand which bugs were worst, Cisco’s, Intel’s, or Microsoft’s. Then we review the equally bad week that the NSO Group and its WhatsApp exploit had.

Cleaning up in a lightning round:  We cover the order requiring the Chinese owner of Grindr to sell by mid-2020. We also cover Canada’s approach to social media, which spurs me to offer unwonted praise for France’s Macron and his moderation. The EU has a plan for sanctions on cyberattackers; Matthew and I doubt it will get much use. Is too much fuss being made over leak investigators using Web bugs to see if defense counsel at Guantanamo have been leaking; Nick and I disagree, at least a bit.

And the podcast closes with yet another installment in our long-running feature, “This Week in Internet Sex Toy Law.” Suffice it to say that the latest case can’t be understood without consulting both Orin Kerr and Jerry Seinfeld.

Download the 264th Episode (mp3).

You can subscribe to The Cyberlaw Podcast using iTunes, Google Play, Spotify, Pocket Casts, or our RSS feed!

As always, The Cyberlaw Podcast is open to feedback. Be sure to engage with @stewartbaker on Twitter. Send your questions, comments, and suggestions for topics or interviewees to

CyberlawPodcast@steptoe.com. Remember: If your suggested guest appears on the show, we will send you a highly coveted Cyberlaw Podcast mug!

The views expressed in this podcast are those of the speakers and do not reflect their firms, clients, spouses, or families.

from Latest – Reason.com http://bit.ly/2JvO2NX
via IFTTT