Fabrice “Fabulous Fab” Tourre to Teach Economics Class at University of Chicago

Just in case you thought for a second that the sorry discipline we call economics couldn’t stoop any further into the gutter of academic idiocy and irrelevance, think again. It’s now being reported that ex-Goldman Sachs trader Fabrice “Fabulous Fab” Tourre (recently convicted on six counts of securities fraud) will be teaching an honors economics class at the “prestigious” University of Chicago.

There’s nothing like an esteemed University setting the already culturally accepted example that ethics are for suckers. Stealing, cheating and corruption are the values most exalted in today’s world. It doesn’t matter how you achieve your wealth, as long as you attain it. After all, it’s not as if you’ll ever get in trouble for it as long as you work for a “Too Big to Jail” bank.

From the UK’s Independent:

Fabrice Tourre, the former Goldman Sachs trader convicted on six counts of securities fraud six months ago, will teach an honours class in economics at the University of Chicago this spring.

Mr Tourre’s weekly Thursday afternoon seminar, called “Elements of Economic Analysis”, is part of his studies for a PhD in economics, after he completed a masters in operations research at Stanford University.

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Turkish Lira Blows Out As Graft Scandal Comes Back With A Vengeance

Update as things just got worse: TURKISH POLICE CLOSE DOWN GEZI PARK IN ISTANBUL, CNN-TURK SAYS

As we reported previously, on Monday new revelations in the graft scandal surrounding Turkish PM Erdogan in the form of a leaked phone conversation between him and his son, Bilal, detailing plans how to hide huge sums of cash, by some estimates up to $1 billion, brought back the political crisis that has gripped the nation front and center, and led to renewed demands by the opposition party that the PM resign. It also sent the USDTRY surging to levels not seen in weeks. We said: “Somehow we doubt that Erdogan will resign, however, this latest confirmation that the graft scandal that is and will continue to dodge the Turkish Prime Minister is not going away, may just be the catalyst that pushes the TRY, and with it some of the other recently pacified EMs, back into volatile mode.” Today the crisis is fully back and so is the predicted volatility, with the Lira blowing out by another 400 pip to a level of 2.240, not seen since the first week of February when the Turkish central bank was scrambling to restore confidence in the imploding currency.

 

What prompted this latest risk flaring? Several things. As Turkish media outlet Hurriyet reported, Turkey’s main opposition took to the streets of Istanbul on Feb. 26 to throw away millions of fake bills, in protest against the latest leaked voice recordings incriminating Prime Minister Recep Tayyip Erdo?an and his son.

In the call, apparently made in the wake of the Dec. 17 graft investigation, the prime minister and his son can be heard desperately trying to hide considerable amounts of cash.

 

“Everywhere is bribery! Everywhere is corruption!” shouted the demonstrators, a chant coined following the graft scandal, in reference to the symbolic slogan of the Gezi Park protests, while urging the government to resign.

 

The Republican People Party’s (CHP) candidate for the Istanbul mayoralty Mustafa Sar?gül used harsh language targeting the government over the revelations.

 

All across Istanbul you can see billboards of the prime minister saying ‘strong will.’ Here is a test of your will. Either you prove [that you are not guilty] or you resign and go,” Sar?gül said, referring to the campaign launched by an NGO close to the government after the corruption scandal surfaced. Huge posters of Erdo?an with the motto “strong will” can be seen across Istanbul, plastered near main arteries, on construction buildings and even on stadiums.

 

The fresh tape, leaked onto the Internet late Feb. 24 and allegedly featuring four phone conversations, is significant for being the first source to implicate Erdo?an personally in the vast corruption scandal.

 

The recordings feature Erdo?an and his son discussing how to get rid of a sum of cash equivalent to 2.2 billion Turkish Liras, according to the opposition. In one part of the alleged recording, the son, Bilal Erdo?an, is heard saying that he still needs to dispose of 30 million euros.

 

In a clear reference to the tape, CHP officials handed out fake money amounting to 30 million euros during a demonstration near Taksim Square, throwing the paper banknotes in the air like confetti.

 

“We are ashamed of this situation. Those 30 million euros are only a small share of the amount of cash that the prime minister told [his son] to ‘clean’ on Dec. 17. There is also the mother share. Think about how huge that must be,” said the CHP’s Istanbul provincial head, O?uz Kaan Sal?c?.

 

Erdo?an has virulently rejected the voice recordings on Feb. 25, calling them “fake” and denouncing as a “montage.” CHP head Kemal K?l?çdaro?lu has claimed that they are “as authentic as the Mount Ararat.” The Ankara Prosecutor’s Office has launched an investigation into the tapes, following a request from the ruling Justice and Development Party (AKP).

As we said on Monday, “since Erdogan has already eliminated any judges that are not sympathetic to his regime, the question of how much justice will be revealed is irrelevant.” However, in an indication of how desperate the government is to redirect attention from this latest scandal, a follow up article from Anadolu news agency, reported that a Turkish attorney, Hudaverdi Yildirim, has filed a complaint to Istanbul Chief Prosecutor’s Office against Fethullah Gulen on Wednesday, asking him to be tried of crimes such as, “forming an organization”, ” an organized coup attempt” and “organized deceit”.

Yildirim claimed in his petition that national ‘economic secrets’ and the activities of National Intelligence Service (MIT) were disclosed and an illegal chase was launched.

 

Referring to the December 17 anti-graft operation, Yildirim said: “National secrets were disclosed at the end of the anti-graft operations, which were illegally conducted and the country’s economy was damaged by around US$ 200 billion.”

 

Crimes of treason, a coup against a legal government, qualified deceit, and abuse of power were committed at the same time and by the same people, alleged the petition, adding that Fethullah Gulen, “used his political and moral power on prosecutors, by which he becomes instigator of the prosecutors that target legal government”.

 

The attorney demanded Gulen and his allies be tried of crimes of “forming an organization”, “an organized coup attempt” and “organized deceit and abuse of power.”

 

An anti-graft operation was launched on December 17 in Turkey, which resulted in the detentions and arrests of high-profile bureaucrats, including the sons of three former cabinet ministers and businessmen.

 

Turkey’s government claim it is targeted by a group within the state that has international links. Prime Minister Recep Tayyip Erdogan and senior government officials have blamed the group for ‘attempting to run an agenda of its own with the December anti-graft operation’.

Recall that Gulen, a dissident who currently lives in Pennsylvania, was the person whom the government accused of staging the graft probe which revealed just how deep the government corruption rabbit hole truly goes. That the PM is willing to go all the way in this latest scapegoating persecution perhaps confirms just how concerned the administration is, even if for the time being nothing dramatically has changed except for ever bolder revelations of just how much theft and corruption the current Turkish regime has engaged in.

Finally, should indeed the central bank once again lose control of Turkish FX rates, and should the EM crisis once again return, perhaps the DE Shaw correlation algos will finally realize just how far ahead of themselves they have gotten by simply chasing various carry funding currency pairs as an indicator of “fundamental” value.


    



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FBI Launches Probe Into “Criminal Violations” By Mt.Gox

It does not appear that things are getting any better for the virtual currency exchange named after “Magic: The Gathering.”

  • *FBI SAID TO BE PROBING POSSIBLE CRIMINAL VIOLATIONS BY MT. GOX
  • *U.S. SAID TO REQUEST DOCUMENTS FROM BITCOIN SERVICE PROVIDERS
  • *MANHATTAN U.S. ATTORNEY SAID TO BE REVIEWING MT. GOX SHUTDOWN

No real reaction yet in price across Bitcoin exchanges.

 

As Bloomberg reports,

The office of Manhattan U.S. Attorney Preet Bharara and the Federal Bureau of Investigation are probing possible criminal violations tied to the shutdown of Tokyo-based Mt. Gox, once the world’s largest exchange for digital currency transactions, two people familiar with the matter said.

 

 

Bharara’s office has requested documents from businesses that provide Bitcoin services and the FBI is reviewing the matter, said the people, who requested anonymity because the matter isn’t public. One of the people said that the matter is in its preliminary stages and isn’t yet a formal investigation.

Bloomberg BusinessWeek summarizes “where did the bitcoins go?”

How did the once-largest Bitcoin exchange lose hundreds of millions of dollars’ worth of the digital currency?

Two words: transaction malleability. A hacker can tinker with the code that makes a Bitcoin transaction happen, so that it looks like it didn’t go through. The person who was supposed to receive a payment then asks again and, in Mt. Gox’s case, is paid again automatically. Mt. Gox has acknowledged this was happening. It seems that someone has been slowly bleeding it for months, leaving it without the funds to pay out legitimate withdrawals. But with the company being pretty tight-lipped about it for now, that’s only the best theory.

Was this a shot from the blue?
Not quite. Mt. Gox has been having problems for months, and people have been complaining about not being able to get their money out of the system since late last year. The company halted withdrawals altogether in early February. So while the number of lost Bitcoins is striking, many people have seen the failure of Mt. Gox as imminent for a while.

Where did the lost Bitcoins go?
In theory, Mt. Gox could begin to track their path by identifying the fraudulent transactions and searching for the wallets the coins ended up in. But no one is putting much faith in the accounting expertise over there at the moment. In any case, many of the tainted coins have likely moved beyond their initial destinations. If there really has been a slow leak from Mt. Gox for a long time, then the coins could have spread to the ends of the earth by now. One thing is certain: They are probably all over the place, just based on the sheer number of coins alleged to have been stolen. They’d amount to about 6 percent of the Bitcoins in existence.

Is this a security problem with Bitcoin itself?
When Mt. Gox described the issue as a bug in the Bitcoin protocol, people didn’t appreciate it. The technical issue at the root of Mt. Gox’s problem didn’t just crop up recently; it seems that Mt. Gox was left vulnerable because it didn’t protect itself against the issue.

Read more here…


    



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French Joblessness Surges To New Record High (Up 30 Of Last 32 Months)

It would appear French President Francois Hollande’s promise to bring jobs to the nation continues to fail dismally. Perhaps it was his recent trip to the US, but French Jobseekers rose more than expected for the 3rd month in a row to a new record high of 3.316 million. Joblessness has now risen for 30 of the last 32 months. The last 5 months have seen jobseekers reaccelerate – surging by 2.5% (the most in 6 months). So, in a nutshell, things are getting worse, faster for the 2nd largest economy in Europe (and 5th largest in the world).

 

 

Charts: Bloomberg


    



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Rand Paul: Some in GOP ‘Stuck in the Cold War Era’

The ongoing unrest in Ukraine has
highlighted another difference of opinion between Sen. Rand Paul
(R-Ky.) and some of his Republican colleagues when it comes to
foreign policy.

Paul, one of the Republican Party’s most prominent
non-interventionists, split with some in his party when he opposed
the Obama administration’s intervention
in Libya
and spoke out against strikes on the
Assad regime
.

While recently speaking on the situation in Ukraine, Paul warned
against Republicans who still have a Cold War mentality towards
Russia.

From
The Washington Post
:

“Some on our side are so stuck in the Cold War era that they
want to tweak Russia all the time and I don’t think that is a good
idea,” Paul said on Tuesday, in an interview with The Washington
Post.

Paul’s comments underscore the latest foreign-policy fissure in
the GOP, where the party’s libertarian wing and Republican hawks
have clashed over whether Putin is a threat and the future of
U.S.-Russia relations.

The Post goes on to say that Sen. John McCain (R-Ariz.)
has urged President Obama to push for Ukraine to be a member of the
North Atlantic Treaty Organization.

A recent
CBS News/New York Times
poll shows that Paul, who has not
announced whether he will run for president, and Jeb Bush are top
of Republicans’ 2016 wish list.

I recently
asked
if Paul’s positions on foreign policy will be heard by an
indifferent American public.

Read more from Reason.com on Ukraine here.

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Should We Thank Michelle Obama for Making Kids Thinner?

According to a study
published by The Journal of the American Medical
Association
 today, obesity fell by 40 percent among
2-to-5-year-olds between 2003 and 2012 while remaining steady in
other age groups. Data collected by the National Health and
Nutrition Examination Survey (NHNES) in 2011 and 2012 found that
8.4 percent of 2-to-5-year-olds were obese, compared to 13.9
percent in 2003-04. In the more recent survey, 16.9 percent of
2-to-19-year-olds and 34.9 percent of adults (20 or older) were
obese, compared to 17.1 percent and 34.9 percent, respectively, in
the earlier survey. Those changes were not statistically
significant.

The New York Times heralds
the drop in obesity among 2-to-5-year-olds as “the first broad
decline in an epidemic that often leads to lifelong struggles with
weight and higher risks for cancer, heart disease and stroke.”
Health reporter Sabrina Tavernise says “the trend came as a welcome
surprise to researchers,” especially since “new evidence has shown
that obesity takes hold young: Children who are
overweight or obese at 3 to 5 years old are five times as likely to
be overweight or obese as adults.” As for what caused the decline,
no one really knows, but some advocates of government intervention
in this area are eager to take credit.

The U.S. Centers for Disease Control and Prevention concedes
that “the precise reasons for the decline in obesity among 2 to 5
year olds are not clear.” CDC Director Thomas Frieden nevertheless
says the trend “confirms that at least for kids, we can turn the
tide and begin to reverse the obesity epidemic.” Who is “we”?
Michelle Obama, among others. “I am thrilled at the progress we’ve
made over the last few years in obesity rates among our youngest
Americans,” the first lady says in the CDC’s press release. “With
the participation of kids, parents, and communities in Let’s Move!
these last four years,  healthier habits are beginning to
become the new norm.”

Since Obama launched her “Let’s Move!” campaign in February
2010, years after the downward trend measured by NHNES began, even
her most ardent fans would have to admit something else must be
going on. What about former New York Mayor Michael Bloomberg, who
Tavernise says “made a major push to combat obesity”? Although
Bloomberg’s cap on soda servings was
overturned
by the courts, Tavernise notes that “the
city told restaurants to stop using artificial trans
fats in cooking and required chain restaurants to display
calorie information on their menus.” But the trans fat ban was
based on concerns about cholesterol, not obesity, and there is
little
evidence
that New York’s conspicuous calories counts have made
anyone thinner, let alone contributed to a nationwide drop in
obesity among preschoolers that began before the mandate.

“Many scientists doubt that anti-obesity programs actually
work,” Tavernise concedes, “but proponents of the programs say a
broad set of policies applied systematically over a period of time
can affect behavior.” In other words, each intervention has zero
measurable effect, but when you add up all those zeros, you somehow
get a 40 percent decline in obesity among little kids. Synergy!

Tavernise also mentions changes in the Supplemental Nutrition
Program for Women, Infants, and Children (WIC), which has “reduced
funding for fruit juices, cheese and eggs and increased it for
whole fruits and vegetables.” She notes that “children now
consume fewer calories from sugary beverages than they
did in 1999” and that “more women are breast-feeding, which
can lead to a healthier range of weight gain for young children.”
Yet while “federal researchers have also chronicled a drop in
overall calories for children in the past decade,” Tavernise
says, “health experts said those declines [7 percent for boys and 4
percent for girls] were too small to make much difference.” If so,
it is hard to see how changes in food subsidies or soda consumption
could have had much of an impact.

What about activity levels? If little kids are burning more
calories than they did a decade ago, it probably has little to do
with deliberate interventions like those advocated by Michelle
Obama. A 2012 BMJ meta-analysis of 30
studies found “strong evidence that physical activity interventions
have had only a small effect (approximately 4 minutes more walking
or running per day) on children’s overall activity levels.” The
researchers said “this finding may  explain, in part, why such
interventions have had limited success in reducing the body mass
index or body fat of children.”

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Calif. Police Officials Charged with Seizing Cars of Poor Latinos and Selling Them

So will the DA's office seize their property?King City, Calif., is a small
(population: 13,169) town in Monterey County with a population that
is 87 percent Hispanic or Latino, according to 2010 census figures.
The town’s crime rate is around or below the national average, but
the police there seem to have found ways to keep themselves busy.
According to the county, the highest ranking officers in King City
have been targeting their poorer Latino residents, seizing their
cars, and then selling them for a profit or keeping them for
themselves when their owners were unable to pay to get them back.
The Monterey Herald
reports
:

In what is likely the most widespread case of official
corruption in Monterey County history, six King City police
officers, including the former and acting chiefs of police, were
arrested on felony charges on Tuesday, four of them accused of
conspiracy, embezzlement and bribery. The owner of a local tow
truck company, the brother of the acting chief, was arrested in the
scheme, which involved impounding the cars of mostly unlicensed
drivers, then selling them when the cars’ owners were unable to pay
towing and storage fees.

Prosecutor Steve Somers, who is handling the case, said he
considered charging the officers with hate crimes because they
targeted disadvantaged Latino residents. He concluded their actions
targeted the victims because they were vulnerable, not out of
racial animus.

The district attorney’s office had been investigating the claims
for the past six months, but they’ve also been tracking allegations
about wrongdoing at the police department for at least four years,
according to the Herald. They were first alerted to this
scheme thanks to online comments posted on a video of a town hall
meeting in King City where citizens expressed their frustration
with the city’s police department.

Here’s how the towing company gamed the system to make it almost
impossible for victims’ to get their vehicles back:

Ana Vargas, co-chairwoman of the South County Outreach Efforts
and a King City resident, said community members have complained
for months in front of the City Council about Miller’s Towing and
the outrageous rules they had to follow to recover their cars. She
said Miller’s required owners of impounded cars to keep them there
for 30 days, with charges accruing. By the time drivers could pick
up their cars, they owed $2,000 to $3,000.

“The cars were not even worth that much,” Vargas said. Unable to
pay, drivers would just abandon their autos.

Two of the officers were arrested on crimes that had nothing to
do with the car scheme. The six of them comprise 35 percent of King
City’s police force.

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The U.S. Military Budget Is Bigger Than the 10 Next Biggest Military Budgets Combined

Next week, Defense Secretary Chuck Hagel is expected to
present
a military budget that will reduce the size of the Army
to pre-9-11 levels and end service on several elderly weapons
programs, including the A-10 and the U-2 spy plan. If enacted, the
plan would trim
military spending by about $75 billion over two years. Defense
Department officials are already suggesting that the budget
trimming is potentially risky, and the move is likely to
generate
pushback from hawkish Republicans. 

It’s important to put this in context. There’s simply no
international rival that spends even close to as much money on its
military as America does. As this
graph
from Peter G. Peterson Foundation for Internation
Economics shows, the U.S. already spends more on defense than the
next 10 countries combined:

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Christian Marijuana Dispensary Battling the IRS

Canna CareThe Lord works in mysterious ways. He told
Abraham to slaughter his son. He told Moses to go get those
commandments. And he told
Bryan Davies to open a pot shop
—or at least so says Davies,
who’s currently battling the Internal Revenue Service (IRS) over a
nearly $875,000 tax bill, according to Time

Davies, along with his wife Lanette, own a “Christian-based”
medical marijuana dispensary in Sacramento. In testimony before the
U.S. Tax Court in San Francisco this week, the Davies explained how
they were turned on to medical marijuana after Lanette’s daughter
began using it to ease symptoms of a bone disease. Bryan Davies
gave it a try and found it worked wonders for his arthritis. But it
was prayer that convinced them to go into the medical marijuana
business for themselves.

Trying to live on Social Security benefits and short on cash,
Davies says he asked God for guidance. “I got on my knees, and
I prayed to the Lord,” he told the court. “And God said … ‘Open up
a pot shop.’”

Being good Christians, they obeyed. Canna Care, opened in 2005,
is one part medical marijuana dispensary, one part community
fellowship. “A table offers pamphlets on using medical marijuana to
treat chronic pain next to bibles that are given away for
free,” Time notes.

The walls are a crowded tapestry of American flags, cannabis
leaves, eagles, crucifixes and the “Don’t Tread on Me” gear favored
by Tea Partiers (though Lanette says she’s a staunch Democrat and
Bryan calls himself a libertarian). … That work of selling dope,
the couple said in response to questioning from IRS lawyers, is
consistent with the dispensary’s broader mission to help and
heal.

Canna Care logoBut the reason the Davies are now staring down the
IRS stems not from religious freedom but an archaic bit of federal
tax code (280E) designed to thwart drug dealers. Under the 1982
law, taxpayers selling marijuana—be it on a street corner or in a
state-sanctioned marijuana dispensary—are forbidden from deducting
any business expenses on their tax returns. Since the federal
government still considers weed illegal, even those running
marijuana businesses in states where it’s legal are considered drug
traffickers by the IRS. 

Canna Care’s disputed tax bill comes from $2.6 million in
business expenses that the IRS has disallowed under that code.
Getting a ruling that 280E should be revisited and no longer
applied to medical marijuana dispensaries, as the Davies’ lawyer
argued, would be a landmark decision for the burgeoning marijuana
industry. But by the time testimony ended Feb. 25th, that appeared
unlikely.

Judge Diana Kroupa said she was aware marijuana legalization was
“a trend,” but “the law is the law.” Lanette Davies said the issue
is now “in God’s hands.” 

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John Stossel on Millennial-Induced Moral Panics

||| Tim Caynes/FoterIt’s true that today’s young people play violent
video games, text all the time, are more tolerant toward marijuana,
and have access to ample pornography. But the kids are okay, John
Stossel argues. In fact it’s older folks (such as perennial
fearmonger Bill O’Reilly) that we should perhaps be worried about.
Inevitably, the older generations misunderstand new ways young
people do things and get frightened by the risks while remaining
oblivious to the benefits. The danger is that the outrage and fear
undermine perspective, says Stossel. It creates a false impression
of how risky the present is, and it fuels unnecessary,
freedom-killing regulations.

View this article.

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