Much of the American public might have been unaware that the United States is currently engaged in an artificial intelligence arms (AI) race with adversaries like China, but also with allies like Israel, until early this week President Trump issued the first-ever executive order prioritizing AI as a matter of national security. “Continued American leadership in Artificial Intelligence is of paramount importance to maintaining the economic and national security of the United States,” the president said in a statement posted to whitehouse.gov.
Following the executive order, The Jerusalem Post published a surprising report acknowledging an ongoing AI “arms race” between the US and Israel, which a key expert and ex-government agent cited in the report said is wrought with risks that include “crises even worse than 9/11”.
Image source: US Air Force
The top Israeli cybersecurity consultant who previously worked as a high level expert in the Israeli government, Amit Meltzer, explained in the report “that winning such a competition would not go well with careful oversight of negative consequences and potential abuses”— an observation also echoed by US Senate Vice Intelligence Committee Chairman Mark Warner (D-VA), who though praising some elements of the executive order, criticized the potential dangers of AI and lack of structures in place for oversight.
Warner warned that Trump’s order “reflects a laissez-faire approach to AI development that… will have the US repeating the mistakes it has made in treating digital technologies as inherently positive forces, with insufficient consideration paid to their misapplication,” according to Bloomberg.
Amit Meltzer backed these concerns in his interview with The Jerusalem Post:
Furthermore, he said that concerns that certain companies would quickly gain domination of the AI sector and abuse their standing economically were possible.
But, he said that it was nearly impossible to square “the national necessity for the US” or Israel to “strengthen and maintain leadership in the industry” with policies that encourage caution and that new technologies should only be rolled out after any danger was carefully examined.
However, he noted that Sen. Warner’s critique stopped short of getting to the heart of the issue. The true dangers of AI lie in the potential for an abuse to lead to a ripple effect across networks and industries with such a rapid pace as to create societal disaster before it’s even realized what’s happening.
President @realDonaldTrump is establishing American leadership, promoting innovation, and developing our workforce on the AI frontier! https://t.co/apHD2vbfu0
By raising the specter of a disaster the size of the stock market crash of 1987, he said that economic or social-psychological warfare influence campaigns that dwarf current threats would become possible.
Another nightmare scenario could be using an AI algorithm to make four million Toyota cars all crash at the same time worldwide, leaving countless dead and wounded in a tragedy “that would be worse than 9/11.”
Calling such attacks “infinitely easier” in an AI-dominated world, he noted that the industry is far outpacing the issue of civil liberties and protections necessary to prevent such disasters.
Perhaps the most cynical section of the interview is seen in the following, where Meltzer predicts how this would all unfold as a result of the current global AI race among advanced nations:
Despite these threats, he predicted that the US needs to keep up with China, Russia and Israel’s need to stay ahead of its adversaries, meaning that rapidly developing new capabilities would continue to be put before protecting civil liberties.
“Afterwards, they will fix things and ask forgiveness from the victims,” he said of moving ahead too fast without proper oversight.
Meltzer further noted that unlike the current trend in Washington, the Israeli government has left major AI development in the hands of the private tech industry, without weighing in as the Trump administration just did.
It should also be mentioned that Russia is claiming to be an up and coming mover in the field of AI. We commented previously that the geopolitical fallout of AI proliferation continues to be a major issue with regard to the world’s three major superpowers — the United States, China, and Russia. It has been termed a “Sputnik moment.” Military officials, including former Secretary of Defense Chuck Hagel in 2014, have said the AI arms race is known as “Third Offset Strategy” and is the next generation of warfare.
A key question that bears repeating is, should humans worry about their inept, bloodthirsty leaders handing over the reins of the war machine to… a war machine? Perhaps, but it’s never stopped us before.
via ZeroHedge News http://bit.ly/2SwBZVf Tyler Durden
Now the corporate lemmings have rushed into mobile advertising.
Given that corporations are run by people, and people are social animals that run in herds, it shouldn’t surprise us that corporations follow the herd, too.Take the herd move to forming conglomerates in the go-go late 1960s: corporations suddenly started buying companies in completely different sectors in businesses they knew nothing about, because the herd was forming conglomerates–not because it made any business sense but because it was the hot trend.
Oil companies bought Hollywood studios, and so on. (Ling-Temco-Vought was one of the conglomerates whose success inspired the herd.)
Few if any of the conglomerates hastily assembled in the 1960s survived the 1970s intact. Once the lemming-like frenzy to assemble conglomerates wore off, managers discovered the conglomerates were mostly financial disasters: rarely did the expected synergies or economies of scale emerge, and inexperienced, tone-deaf hubris-soaked corporate managers often destroyed the acquired companies through ill-advised strategies or acquisitions.
In many cases, success was ephemeral: once the economy slumped, growth reversed and debt-laden conglomerates were forced to liquidate, often at a loss.
The dissolution of the conglomerate herd mentality set up the early 1980s frenzy of leveraged buy-outs as predatory financiers staked out the remaining carcasses of flailing conglomerates, bought the conglomerate and profited by selling off its constituent companies piecemeal. The stripped entity was then loaded with debt and sold to the public as an initial public offering (IPO).
Fast-forward to the late 1990s and early 2000s, when the corporate herd was offshoring production to east Asia. On one of my trips to China in the early 2000s, I sat next to a youthful corporate manager in the semiconductor equipment sector. The flight being long (10-11 hours), we were able to have an in-depth conversation about his company’s dismal experience with offshoring production from the U.S. to China and other nascent manufacturing hubs in east Asia.
Since we had friends who worked in the industry, I knew enough to ask specific questions.
It turned out the offshoring had been pushed by top management over the objections of senior managers who actually knew what they were talking about. The herd was running, and top management wasn’t going to take no for an answer.
The offshoring was a disaster. The company lost control of quality, and the units shipped from Asia were chockful of defects, defects that were extremely expensive to fix after manufacture. The company’s intellectual property was stolen (“borrowed”?), triggering costly but useless legal actions against the thieves. Financially, the offshoring cost the company millions’ in direct costs and indirectly in loss of reputation and IP.
Top management buried the disaster, of course, so only insiders knew just how catastrophic the running-with-the-herd had been.
This is not an outlier: many companies experienced catastrophes in following the offshoring-is-great lemmings off the cliff. I have first-hand accounts of pharmaceutical companies closing their China operations due to pirating (worthless knockoff medications sold in packages that were perfect replicas of the company’s products), and of clothing manufacturers who left after entire runs of costly silk clothing lines were rejected for abysmal quality.
Nor was this experience limited to China; all sorts of similar disasters unfolded in SE Asia as the offshoring craze took hold.
Now the corporate lemmings have rushed into mobile/social media advertising. Never mind if the adverts work–we need a mobile presence now, and hang the cost!
The urgency was driven by the consumers’ mass shift to mobile devices, fueled by the rising global addiction to small screens.
Now that tens of billions of dollars have been poured into mobile/social media adverts and marketing, enriching the quasi-monopolies (Facebook, Google et al.), sober managers are starting to ask: but do they work? Did all this treasure poured into mobile/social media adverts actually increase sales and profits? Which campaigns worked and which ones didn’t? Nobody seems to know how much of their advert millions have been squandered on click fraud.
Is this any way to run a marketing division? Of course it isn’t. The lemmings rushed into mobile anything / everything, heedless of cost or value, and now as the lemmings race off the cliff, questions are being asked about the efficacy of the headlong rush into mobile/social media advertising.
What if it turns out a significant chunk of sales derive from SMS (text) messages between consumers, i.e. “word of mouth”? (Thank you, Mark G., for alerting me to this largely unexplored topic.) What if all this “behavioral advertising” turns our to be high-falutin hooey?
We’ve already read about some corporations trying the most basic experiment: withdrawing their mobile campaigns from the quasi-monopolies and monitoring the withdrawal’s effect on sales. All of this is of course a deep dark secret within HQ, because as we know, top managers will bury whatever reflects poorly on their lemming-like herd behavior, and the failure of mobile advertising is equally secret, amounting to a sort of marketing trade secret: let our competitors run off the cliff, wasting their marketing budgets on mobile/social media campaigns.
Reading the runes made public, it seems sales were unaffected by the withdrawal of huge chunks of mobile / search / social media adverts. Efforts to actually measure and track click fraud are turning up gigantic losses: advertisers’ money is being siphoned off by click fraud on an immense scale.
What happens when the corporate herd wakes up the failure of mobile and social media advertising? The herd will dissipate, and actually making a profit will matter more than establishing a mobile/social media presence.
NOTE: it seems lemmings don’t actually run off cliffs in herds, and so please note that I reference lemmings only as a popular cultural device, not as a reflection of biological fact. My abject apologies to any lemmings reading this essay.
Italy’s unpredictable political situation continues to throw up surprises with a controversial claim in national newspaper La Stampa this week that the country’s coalition government wants to sell part of Italy’s gold reserves to cover spending plans and so prevent the need to increase VAT in a forthcoming Italian budget.
While the claims by La Stampa are not really based on anything new, they still managed to cause an international media frenzy as they came a few days after Italy’s governing coalition launched verbal attacks on Italy’s central bankers and financial regulators.
Note that Italy claims to be the world’s third largest sovereign gold holder behind the US and Germany, with claimed monetary gold holdings of 2451.8 tonnes. Interestingly, unlike most countries where sovereign gold is owned by the State but managed by the country’s central bank, the Italian gold is officially owned by Italy’s central bank, Banca d’Italia (Bank of Italy), and not owned by the Italian State.
The Banca d’Italia furthermore claims that 1199.4 tonnes of the gold (or roughly half), is stored in the Bank’s gold vaults under it’s Palazzo Koch headquarters building in Rome, with most of the other half stored in the vaults of the Federal Reserve Bank of New York (FRBNY), and a small balance kept the Bank of England in London, and in an account of the Bank for International Settlements (BIS) in the vaults of the Swiss National Bank (SNB) in Berne, Switzerland. But without any documentary evidence or independent auditing or verification of any of its gold, especially the foreign held gold, these claims are impossible to verify.
Note also that the current Italian government is made up of a coalition of the right-wing League party (Lega), a party headed by Matteo Salvini, and the populist Five Star Movement (M5S), a party headed by Luigi Di Maio, but with the appointed Giuseppe Conte as prime minister (backed by Lega and M5S), and with Salvini and Di Maio as vice prime ministers.
Luigi Di Maio, head of M5S, and Matteo Salvini, head of the League
La Stampa stirs controversy with Grillo and Borghi
La Stampa, one of Italy’s most popular newspapers, bases its new gold sales claim on two political developments which it thinks are relevant, but neither of which are actually that new. Firstly, La Stampa says that back on 9 September last year, Beppe Grillo, founder of M5S, posted an article in his personal blog (written as a collaboration with a university professor Gabriele Gattozzi), pointing out that Italy had never sold any gold under previous Central Bank Gold Agreements (CBGA’s) but could now do so under the current round, with gold sales beginning as early as the 4th quarter 2019.
Secondly, La Stampa says that M5S’s coalition partner, the League, is also on board with gold sales plans given that the League’s economic spokesperson Claudio Borghi has submitted a bill to parliament seeking to place ownership of Italy’s gold directly under the Italian State.
Let’s briefly look at each of these two claims by La Stampa. It is true that on 9 September 2018, Beppe Grillo published an article in his personal blog in Italian, titled “Vendo Oro!” (Sell Gold!) which can be here, and in which he pitched the case for sales of part of Italy’s gold reserves. That article (which was also signed by Gabriele Gattozzi) began as follows:
“We often hear that the Italian Republic is almost always very low in the various international rankings concerning, for example, competitiveness, transparency, corruption, freedom of the press, etc, etc. But there is a classic case in which we are at the top, even on the podium, with a bronze medal. This is the world ranking of holders of gold reserves” (referring to Italy’s top 3 position as a gold holder)
Beppe Grillo’s blog post advocating Italian gold sales, dated 9 September 2018
Grillo then made an argument for selling between 500-600 tonnes of Italian gold, a situation he says would still leave Italy as the world’s 4th largest gold holder after such sales were completed:
“In a nutshell, it would be a potential variable ranging from 500 to 600 tonnes (no more or less than what France sold a few years ago) equal to revenues of 16 to 20 billion euros, spread over 4-5 years (ie 4-5 billion euros a year from now) in cash and readily available.
Furthermore, these sales would allow us to remain in any case among the top holders of gold reserves worldwide, moving from third to fourth place. Moreover, these quantities could easily be purchased by absorbing the demand of some countries such as China, India, Russia, Brazil, South Korea and other so-called emerging countries that have already expressed their intention to increase their gold reserves.”
Coincidentally or not, La Stampa points out that approximately €16-20 billion of revenues would be “a little less than what is needed to sterilize VAT”.
Grillo concluded his September blog article saying that any gold sales would be a one-off measure:
“This is obviously a one-off five-year measure, but that could allow us to take a breath and provide extra budget coverage – without breaking the stringent community parameters – to be allocated to urgent and non-transferable measures. But above all it would allow to finally put an end to this annoying litany on the fact that ‘there is no money’.”
Claudio Borghi’s Wishful Thinking
Next up, a quick look at the other development which La Stampa thinks is relevant, i.e. the League’s economic spokesman Claudio Borghi and his bill to parliament to try to set in legislation that Italy’s gold belongs to the Italian State and not the central bank.
If you believe the mainstream financial media, you would think that Borghi’s bill just hit the tape in February 2019, but that is not the case. There was extensive coverage of this bill in Italian media at the end of November 2018 (for example here “Claudio Borghi: a law to put the gold bars of Banca Italia under the control of the government”), and more importantly, the bill was actually introduced as a ‘law proposal’ to the Italian ‘Camera dei Deputati (House of representatives)’ way back on 6th August 2018. See bill text on the Italian Camera legislation website here and in pdf format here. An explanatory document about the motivation for bringing forward the bill can be read in Italian here.
Borghi titles his draft Act “Authentic interpretation of Article 4 of the Consolidated Law on currency matters, as per the Presidential Decree of 31 March 1988, n. 148, concerning the management of official reserves“.
Draft Act from the League’s Claudio Borghi to clarify that the Italian State owns the gold
The introduction to Borghi’s bill meanders through some wishful thinking about the Italian gold, even though it is a fact of Italian law that the gold belongs to the central bank:
“the issue of the ownership of national gold reserves, although irrefutable in the heart of every Italian citizen, from time to time appears in the parliamentary debate as a topic of debate.
…What is undoubted is the ownership of the gold that was and is of the Italian State…
…Given widespread debate and even misinterpretation, it is necessary to provide explanation and interpretation in national legislation..in a situation of certainty and clarity…
…The present legislative proposal seeks to ensure clarity of interpretation since the Bank of Italy provides for the management of official reserves, in compliance with the Statutes of the ESCB and ECB…
…(but) the provision relating to management activity does not appear to be sufficiently explicit in underlining the permanence of ownership of gold reserves to the Italian State, and so a specification on this point is necessary.
Borghi’s actual proposed law to clarify ownership of the Italian gold is quite short and is as follows:
“Art. 1. The second paragraph of Article 4 of the Consolidated Law on Currency, as per the Presidential Decree of 31 March 1988, n. 148, is interpreted as meaning that the Bank of Italy manages and holds, as an exclusive deposit, the gold reserves, without prejudice to the right of the Italian State to own such reserves, including those held abroad.“
The vast and impressive Chamber of Deputies in the Italian Parliament
Even though this bill was drafted on 6 August 2018, and even though Claudio Borghi has been tweeting about it for months, the mainstream financial media are only getting wind of this bill now, six months later. For example, Reuters has only now published an article, dated 11 February 2019, and titled “League drafts terms for possible sale of Italy’s gold reserves“.
According to this article, Borghi told Reuters that the bill has not yet been presented in parliament, and was “only a hypothesis”. Borghi also said that the bill does not signify a plan to sell Italian gold, but to “reassure people that the government had no plans to sell the reserves to fix its current public finance difficulties“.
“My bill only aims at making clear that the gold belongs to the state, not to the government…If there are doubts on our intentions, we can also pass another law saying none of the gold reserves can be sold unless there is a majority of two thirds or more of both houses of Parliament.”
Enter the Banca d’Italia
If Beppe Grillo and the M5S want to sell some Italian gold or if Claudio Borghi and the League want to clarify the ownership of Italian gold, their first problem, as usual, is going to be the Bank of Italy and Italy’s wily central bankers. Since officially, Italy’s gold is owned by Italy’s central bank, the Banca d’Italia, or at least that’s what the Banca d’Italia claims.
In a 2014 Banca d’Italia guide about the Italian gold reserves (which can be read in pdf format here), the central bank makes clear its view, even in the very first line of the guide where it states:
“La proprietà delle riserve ufficiali è assegnata per legge alla Banca d’Italia (The ownership of official reserves is assigned by law to the Bank of Italy)”
Furthermore, the Banca d’Italia is not owned by the Italian State. It’s owned by the Italian commercial banks, with the largest shareholdings being held by Intesa Sanpaolo and UniCredit. See here for a list of financial institution shareholders of the Bank of Italy. So the Bank of Italy owns the gold, and the Italian banks own the Bank of Italy.
First page from a 2014 guide to the gold reserves of the Bank of Italy, stating that the gold belongs to the Bank
The reasons the Bank of Italy, and not the Italian state, owns the Italian gold, are historical, and briefly are as follows, as explained in the September 2016 BullionStar article “From Gold Trains to Gold Loans – Banca d’Italia’s Mammoth Gold Reserves”:
“Until the 1960s, most, if not all of Italy’s official gold reserves were held not by the Banca d’Italia, but by an associated entity called l’Ufficio Italiano dei Cambi (UIC). In English, UIC translates as the “Italian Foreign Exchange Office”. The UIC was created in 1945. One of its tasks was the management of Italy’s foreign exchange reserves (also including gold).
Italian gold purchases in the 1950s and 1960s were conducted for the account of the UIC, not the Banca d’Italia. However, during the 1960s there were two huge transfers of gold from the UIC to the Banca d’Italia, one transfer in 1960 and the second in 1965. In total, these two transactions represented a transfer of 1,889 tonnes from the UIC to the Banca d’Italia. The UIC’s main function then became the management of the national currency and not the nation’s gold. The UIC then ceased to exist in January 2008 when all of its tasks and powers were transferred to the Banca d’Italia.”
Conclusion
As always, its amusing that when it comes to real money and financial crisis, that politicians, in this case Italy’s political establishment, beg to differ with the Wall Street Journal’s claim that gold is just a ‘Pet Rock’. It will be interesting to see how far Borghi’s bill goes through Italy’s parliament about clarifying the ownership of Italy’s gold. Deputy Prime Minister Salvini says that the Italian gold reserves are “the property of the Italian people, not of anyone else”. But the elitist central bankers of the Bank of Italy would beg to differ.
Besides, this time the central bankers have the law is on their side (as it is assigned in law that the Italian central bank owns the gold reserves). The Banca d’Italia will hardly want to even discuss the subject of Italian gold sales, let alone agree to gold sales.
It would be more productive in the first instance for Italian politicians to push for a full physical independent audit of all the Italian gold, both the 1200 tonnes of gold which is said to be stored under the Bank’s headquarter’s in Rome, as well as the ‘other half’ of the gold, which the Bank of Italy claims is mostly stored at the Federal Reserve vaults in New York (FRBNY), but which no one, including Italian politicians has ever seen.
This should also include publication of a full ‘weight list’ of all the Italian gold, including every refiner serial number of every gold bar claimed to be held. Because if you don’t have the gold, then you can’t sell it. And the first proof that you have the gold is a full independent physical audit.
The Italian gold in New York could be long gone. The last time there was proof that this gold was actually in the Fed vaults in New York was between 1974 and 1978 when about 542 tonnes of this gold was used as collateral in a series of US dollar loans provided by Germany’s Bundesbank. If Italian politicians want to harness the liquidity of the Italian gold, they could also push for a new international loan of some sort, with Italian gold again used as collateral. But that assumes that the Italians have the gold they claim to have, and there is no independent proof of this.
It is admittedly very odd that when many of the large gold holding countries were selling gold in the 1990s and 2000s such as the Netherlands, Belgium, the UK, France, Switzerland. Spain, Portugal, Canada, and Australia, that Italy sold “not one ounce” as Beppe Grillo highlighted. Perhaps the Bank of Italy did sell a lot of gold in the 1990s or 2000s but was too embarrassed to say so, and kept it a secret. Stranger things have happened, and in the world of scheming central bankers, anything is possible.
* * *
For more information on Italy’s gold reserves, see the following articles on the BullionStar website:
U.S. National Security Advisor John Bolton has warned countries and companies against buying crude oil from Venezuela, after the Latin American country’s Oil Minister Manuel Quevedo said during a surprise visit to India that Venezuela wants to sell more oil to the fast-growing Indian market.
In a tweet with a Bloomberg article on Venezuelan-Indian oil relations attached, Bolton wrote:
“Nations and firms that support Maduro’s theft of Venezuelan resources will not be forgotten. The United States will continue to use all of its powers to preserve the Venezuelan people’s assets and we encourage all nations to work together to do the same.”
Nations and firms that support Maduro’s theft of Venezuelan resources will not be forgotten. The United States will continue to use all of its powers to preserve the Venezuelan people’s assets and we encourage all nations to work together to do the same. https://t.co/4MmHyjFY8K
“We have a good relationship with India and we want to continue this relationship. The relationships with India will continue, the trade will continue and we will simply expand all the trade and relationship,” Indian outlet Business Today quoted the Venezuelan minister as saying on the sidelines of the Petrotech conference in India this week.
At the start of the Venezuelan political crisis last month, Indian media reported that the Asian country continues to be one of the main buyers of Venezuelan crude oil. Indian refiners keep buying more than 400,000 bpd of oil from the troubled Latin American country, which is sitting on the world’s largest crude oil resources.
In separate Venezuela-and-sanctions-related news, Bulgarian security officials said on Wednesday that they had blocked several bank accounts in a local bank that have received millions of euros from Venezuela’s state oil firm PDVSA, on which the U.S. slapped sweeping sanctions at the end of January.
Bulgaria’s security services and prosecutor’s office were tipped off by the U.S. about those money transfers and have blocked transfers out of the bank accounts.
“We have established that there were money transfers from Venezuela, namely from the state oil company of Venezuela to these accounts,” Reuters quoted Bulgaria’s chief prosecutor Sotir Tsatsarov as telling reporters.
The security officials will be looking into those accounts before deciding whether to press charges on money laundering, the prosecutor noted.
via ZeroHedge News http://bit.ly/2UXJp0y Tyler Durden
After Google-parent Alphabet more than doubled its capex spend in 2018, Google on Wednesday announced plans to spend $13 billion on data centers and office space in 14 states, including Nevada, Nebraska, Ohio, Texas, Oklahoma, South Carolina and Virginia.
The company will hire tens of thousands of employees to work at the new facilities, while the projects will enable the creation of 10,000 new construction jobs.
After the expansion is finished, Google will have infrastructure in 24 states, and data centers in 13 towns.
Today we’re announcing over $13 billion in investments throughout 2019 in data centers and offices across the U.S., with major expansions in 14 states. These new investments will give us the capacity to hire tens of thousands of employees, and enable the creation of more than 10,000 new construction jobs in Nebraska, Nevada, Ohio, Texas, Oklahoma, South Carolina and Virginia. With this new investment, Google will now have a home in 24 total states, including data centers in 13 communities. 2019 marks the second year in a row we’ll be growing faster outside of the Bay Area than in it.
This growth will allow us to invest in the communities where we operate, while we improve the products and services that help billions of people and businesses globally. Our new data center investments, in particular, will enhance our ability to provide the fastest and most reliable services for all our users and customers. As part of our commitment to our 100 percent renewable energy purchasing, we’re also making significant renewable energy investments in the U.S. as we grow. Our data centers make a significant economic contribution to local communities, as do the associated $5 billion in energy investments that our energy purchasing supports.
Here’s a breakdown of the new hires and projects:
Midwest
Expanded presence in Chicago
New data centers in Ohio and Nebraska
Moving Wisconsin office into larger space
Last November, Google opened new Detroit office in Little Caesar’s Arena
South
Virginia workforce will double
New offices will be built in Georgia (workforce will double there as well)
Data centers in South Carolina and Oklahoma will expand
New office and data center in Texas
Northeast
New office space in Massachusetts
NYC Hudson Square campus will expand
West
First data centers in Nevada
Washington office will expand
New investments in Bay Area
Redevelopment of the Westside Pavillion and the Spruce Goose Hangar in the Los Angeles area will continue
While Google’s recent development spending has been focused on diversifying the business away from advertising, the company’s intensive capex spending will likely continue being a concern for investors. Though only weeks ago Alphabet CFO Ruth Porat said the company’s spending would “moderate quite significantly this year”…which would suggest that there won’t be more announcements like this one coming in the near future.
via ZeroHedge News http://bit.ly/2S0ZvEK Tyler Durden
Irvine, California attorney Jason Frank claims that his ex-law partner, “creepy porn lawyer” Michael Avenatti, committed bankruptcy fraud – hiding millions of dollars from the court handling his law firm’s bankruptcy, while using much of the money for personal compensation, according to the Los Angeles Times, citing court records.
Avenatti’s firm, Eagan Avenatti, was required to file monthly reports on its income and spending beginning in March 2017 according to documents signed by Michael Avenatti, who is listed as the firm’s managing partner and majority owner.
The reports failed to disclose that Avenatti opened six bank accounts which received millions of dollars in legal fees during the bankruptcy, claims Frank in a Tuesday night court filing.
The reports also divulged nothing about the personal compensation to Avenatti, which would have required permission from the bankruptcy trustee, the court papers allege.
Avenatti used some of the money for personal expenses such as $14,236 in rent for his Century City apartment, a $3,640 payment on his Ferrari, $16,000 to Passport 420, an Avenatti company that owns a Honda jet, and tens of thousands of dollars in bills for his troubled coffee company, Global Baristas, the records show.
The court documents were filed by Jason Frank, a former lawyer at Eagan Avenatti who has been trying for eight months to collect a $10-million judgment that he won against the firm. Frank’s court papers allege that Avenatti’s bank maneuvers were an unlawful effort to dodge his firm’s creditors. –Los Angeles Times
“This includes brazen acts of bankruptcy fraud,” wrote Frank’s lawyer, Scott H. Simms in the court filing.
Avenatti has denied wrongdoing, telling the Times via email “Every dollar has been properly accounted for and reported as required and as previously set forth in numerous accountings,” adding “This is much to-do about nothing.”
The attorney best known for representing porn actress Stormy Daniels (real name Stephanie Clifford) in a hush-money scandal, says that he was not required to disclose all of his legal fees to be paid through Eagan Avenatti.
“There has never been any misdeeds or fraud — any claim to the contrary is politically motivated, completely bogus and driven by Jason’s own personal demons and vendetta,” said Avenatti, who is scheduled to appear in federal court on Thursday in Santa Ana for an interrogation by Frank’s lawyers on why the firm failed to pay the $10-million judgement.
Frank has asked U.S. District Judge Virginia A. Phillips to appoint a receive to seize Eagan Avenatti and prevent the firm from shedding assets. The firm was evicted recently from its Newport Beach offices after failing to pay rent.
Last month, Frank asked the judge to hold Avenatti and the firm in contempt of court for defying a subpoena for some of the firm’s financial records. He urged the judge to put Avenatti in jail to compel compliance. She has not yet scheduled a hearing on the request.
Through subpoenas to banks, Frank obtained records that detail millions of dollars in lawsuit settlement payments, legal fees and other funds that Avenatti collected during the bankruptcy but did not disclose to the trustee, the new court records show. –Los Angeles Times
Frank details one case in which Avenatti represented NFL ticket holders who sued the league in connection with seating screwups at the 2011 Super Bowl in Arlington, Texas. After the case closed, ” a Texas lawyer told Avenatti in a May 2017 email that he was ready to transfer $1.4 million to Eagan Avenatti,” according to The Times.
Avenatti responded with instructions to split the money, with $409,000 directed to a firm account that was disclosed to the bankruptcy trustee, and $953,000 to an undisclosed account controlled by Avenatti.
Avenatti removed nearly all of the $953,000 in seven transactions to another undisclosed account according to bank records provided to the court by Frank. It was then shifted again in seven transactions of nearly identical amounts to Avenatti & Associates, Michael Avenatti’s personal corporation.
Avenatti says he and his company were entitled to over $1 million in reimbursements for out-of-pocket expenses in the NFL litigation.
via ZeroHedge News http://bit.ly/2S4E8CQ Tyler Durden
Debt has become an issue of concern for those who care about their financial future. But with the government setting the terrible example of drastically spending more than they bring in, many in America are following suit and it is leading to a crisis and a red flag for the economy.
Just on the heels of the United States government’s debt surpassing $22 trillion comes the news that there are now a record number of Americans who are behind on their record high car payments.According to CNBC, more than 7 million Americans are at least 90 days behind on their auto loans, according to the New York Fed. This is a major concern, considering the average car payment in the U.S. is now $523.
“More and more people are buying too much car for what they can afford,” said Ed Mierzwinski, senior director of U.S. PIRG’s federal consumer program. Overall, auto debt accounts for about 9 percent of total U.S. consumer debt, up from 6 percent in late 2011, separate data from the Federal Reserve Bank of Kansas City show.
The amount of Americans currently in default of their car loans is higher than in 2010 when many were still reeling from the 2008 Great Recession, a statistic that is once again, showing that the U.S. economy may not be nearly as strong as the media’s talking heads present.
The “number of distressed borrowers suggests that not all Americans have benefited from the strong labor market and warrants continued monitoring and analysis of this sector,” Fed economists say.
Overall, household debt rose by $32 billion, or 0.2 percent, to $13.54 trillion in the fourth quarter. That’s $869 billion higher than the crisis peak of $12.68 trillion and is 21.4 percent above the post-crisis low point in the second quarter of 2013.
Student loan debt edged higher to $1.46 trillion while credit card balances rose to $870 billion, right around their crisis peak. –CNBC
These delinquencies also come as Americans grapple with record levels of consumer debt and student loan debt. In a report issued Wednesday, U.S. PIRG warns that the continuing rise in auto debt is putting many consumers in a financially vulnerable position, which could worsen during an economic downturn. Coupled with consumer and student loan debt, Americans are staring a crisis in the face.
In a direct rebuke of Trump’s foreign policy amid broader pushback over his defense of Saudi Arabia, the House on Wednesday passed a bill in a 248-177 vote that largely fell along party lines, which requires President Trump to withdraw U.S. military support from the Saudi Arabia-led coalition. The House sent the war powers resolution to the Senate, where it is also expected to pass and confront Trump with the possibility of issuing the first veto of his presidency.
“The only patriotic thing, if you care about our troops, if you care about American interests, if you care about the outrage that the Saudis are inflicting on Americans and on the world, then the only patriotic thing to do is to vote for this resolution,” California Democrat Ro Khanna, the resolution’s chief House sponsor, said ahead of the vote.
The resolution would direct the president to withdraw U.S. military forces in or “affecting” Yemen within 30 days unless they are fighting al Qaeda or associated forces, according to The Hill . The vote comes at a time when Congress’ anger at Saudi Arabia over last year’s killing of U.S.-based journalist and Saudi dissident Jamal Khashoggi is being reignited.
However, confirming what we said earlier, namely that the War Powers Act is a joke, Trump said in December he would veto the Senate resolution if it ever reached his desk, which now appears likely.
In December, the Senate passed a parallel resolution 56-41, but a blocked vote by House Republicans prevented it from ever reaching the floor of the House.It was the first time the Senate had ever used congressional authority handed to them in the War Powers Act of 1973.
* * *
For years, the United States has been providing logistics, intelligence sharing and arms sales to the Saudi-led coalition fighting Iran-backed Houthi rebels. The U.S. military also provided aerial refueling to coalition jets, but the administration suspended that support in November.
As The Hill notes, the Trump administration declined to follow a congressionally mandated deadline Friday to report on whether Saudi leadership, including Crown Prince Mohammed bin Salman, was responsible for Khashoggi’s slaying and should be sanctioned.
Previously, the Trump administration levied sanctions on some Saudi officials over the killing, but lawmakers have demanded stronger action. Trump, though, has resisted anything that could affect the U.S.-Saudi alliance.
Last year, searching for a way to punish the Saudis, the Senate passed a resolution similar to the one that passed the House on Wednesday to withdraw U.S. military support in Yemen. The measure did not advanced in the House, which was controlled by the GOP at the time.
But Democrats, upon taking control of the House, fulfilled their pledge to prioritize a vote on the war in Yemen, making it their first major foreign policy vote of the year.
In Wednesday’s votes, the House also approved 252-177 a Republican-offered amendment to the bill meant to ensure the United States can continue intelligence sharing with “any foreign country.”
The House also unanimously approved a Republican-offered amendment saying it is in the U.S. national security interest to combat anti-Semitism, which was offered amid an unrelated row over a tweet from Ilhan Omar that she has since apologized for.
As noted above, the White House has issued a veto threat against the Yemen resolution. The statement of administration policy called the resolution “flawed” because U.S. forces are not directly involved in hostilities in Yemen.
The White House also warned the bill would “harm bilateral relationships” by defining hostilities as including “defense cooperation” such as aerial refueling.
“Our continued cooperation with regional partner nations allows the United States to support diplomatic negotiations to end the conflict, promote humanitarian access, mitigate civilian casualties, enhance efforts to recover United States hostages in Yemen and defeat terrorists who seek to harm the United States,” the statement said.
via ZeroHedge News http://bit.ly/2DEz6aZ Tyler Durden
Almost everyone that goes out to visit one of our major cities on the west coast has a similar reaction.
Those that must live among the escalating decay are often numb to it, but most of those that are just in town for a visit are absolutely shocked by all of the trash, human defecation, crime and public drug use that they encounter. Once upon a time, our beautiful western cities were the envy of the rest of the world, but now they serve as shining examples of America’s accelerating decline. The worst parts of our major western cities literally look like post-apocalyptic wastelands, and the hordes of zombified homeless people that live in those areas are too drugged-out to care. The ironic thing is that these cities are not poor. In fact, San Francisco and Seattle are among the wealthiest cities in the entire nation. So if things are falling apart this dramatically now, how bad will things get when economic conditions really start to deteriorate?
Let’s start our discussion by looking at the rat epidemic in Los Angeles. Thanks to extremely poor public sanitation, rats are breeding like mad, and at this point they have even conquered Los Angeles City Hall…
Officials at Los Angeles’ City Hall are considering ripping all of the building’s carpets up, as rats and fleas are said to be running riot in its halls.
A motion was filed by Council President Herb Wesson on Wednesday to enact the much needed makeover amid a typhus outbreak in the downtown area.
Wesson said a city employee had contracted the deadly bacterial disease at work, and now he’s urging officials to investigate the ‘scope’ of the long-running pest problem at the council building.
People from all over the world are drawn to Los Angeles because of what they have seen on television, but it is truly a filthy, filthy place. The number of homeless has been rising about 20 percent a year, public drug use is seemingly everywhere, and there are mountains of trash all over the place. Needless to say, rats thrive in such an environment, and the epic battle that one L.A. journalist is having with rats was recently featured in the L.A. Times…
Eastside, Westside, north and south, they’re everywhere. If you’re a rat, the California housing crisis has not hit you yet and it never will.
At our house, it sounded like the rats were having relay races in the ceiling, and they don’t wear sneakers. Your eyes blink and your leg twitches as you drift off to sleep knowing that if the plague comes back, you are living at ground zero.
In our garden, they devoured entire heads of lettuce. They destroyed my squash just before it was ripe and ready to eat. They stole my tomatoes, cilantro and Anaheim chili peppers. Were they bottling their own salsa?
But let’s not be too hard on Los Angeles, because the same things that are going on there are happening in major cities all over the western portion of the country.
For example, a massive rat infestation recently forced authorities to close a shockingly filthy homeless encampment under a bridge in Salem, Oregon…
Amid the trash, human despair and anguish, one weeping woman prepared to leave the most recent place she knows as home without any real inkling of where she’ll go next.
Terry Balow, an outreach worker with the Salvation Army, has been here for the darker moments of living life under a bridge — anger, mental illness, drug use and human frustration boiling over at times everywhere one looks.
Yet it was a rat infestation and concern about human health that prompted the city of Salem to move the campers out.
“It just grew and grew and got worse,” Balow said. “It’s badder than people can imagine.”
Yes, there have always been homeless encampments in this country, but in modern times we have never faced anything on the scale that we are facing now.
More than half a million Americans are homeless right now, and that number continues to grow. And as it grows, communities will increasingly be forced to make some tough decisions.
I am quite eager to talk about San Francisco, but before we get to the City by the Bay, let’s take note of something that just happened in Denver.
If you are into public defecation, you will be very happy to learn that Denver just made it legal…
First, the obvious: The Denver City Council has voted unanimously to decriminalize a number of offenses, including defecating in public. Also, urinating in public. Camping on public or private land without permission. Panhandling. And lying across public rights-of-way, such as sidewalks.
Democrat Mayor Michael Hancock and city officials explained the new ordinances are designed to protect immigrants — legal and the other kind — from “unintended consequences.” These consequences were fines and longer jail terms, as has been customary in most places for violating the behavioral norms of civilized American society.
If only America’s founders could see us now.
They would be so proud.
Speaking of public defecation, San Francisco has become world famous for the piles of human poop that constantly litter their streets. During one seven day stretch last summer, a total of 16,000 official complaints were submitted to the city about human feces.
Blessed with such beautiful natural surroundings and so much wealth, San Francisco should be a great place to visit, but that definitely is not the case.
San Francisco is a pretty good place to “hang out with a sign.” People are rarely arrested for vagrancy, aggressive panhandling or going to the bathroom in front of people’s homes. In 2015, there were 60,491 complaints to police, but only 125 people were arrested.
Public drug use is generally ignored. One woman told us, “It’s nasty seeing people shoot up — right in front of you. Police don’t do anything about it! They’ll get somebody for drinking a beer but walk right past people using needles.”
In San Francisco they actually give out free syringes to drug addicts, and it is being reported that they handed out a total of 5.8 million free syringes in 2018.
There’s just one problem – well, more than one – despite spending an extra $1.8 million last year in an effort to retrieve needles,the San Francisco Chronicle reports that the department handed out about 2 million more syringes than it got back… many of which are now washing around the streets of one of the richest cities in America (along with the feces of their users).
And with so much public drug use going on, it should be no surprise that crime is completely and totally out of control. Here is more from John Stossel…
Each day in San Francisco, an average of 85 cars are broken into.
“Inside Edition” ran a test to see how long stereo equipment would last in a parked car. Their test car was quickly broken into. Then the camera crew discovered that their own car had been busted into as well.
It has been said that “as goes California, so goes the country”, and if this is where the rest of the nation is headed then we are in serious trouble.
I hope my American hosts will forgive me for raising this, but the squalor we saw in The City was frightful. San Francisco has always been one of favourite US cities, but the degree of homelessness, mental illness and drug abuse we saw on this trip was truly shocking. Walking round SF on a Sunday Morning and we saw sights we couldn’t believe. This must be one of the richest cities in the world – home to 4 of the 10 richest people on the planet according to Wiki. I asked friends about it, and they shrugged it off.. “The City has always attracted the homeless because of the mild weather,”.. “It’s a drug thing”.. “its too difficult”… “you get used to it..”
Well, I didn’t.
I found it quite shocking the number of folk sleeping rough on the sidewalks, the smell of weed and drug impedimenta everywhere, the filth, mental illness and degradation on view just a few meters from the financial centre driving Silicon Valley. It’s a city where the destitute seem to have become invisible to the Uber hailing elites. We found ourselves hopping on one of the beautiful F-Route Trolley Buses to find nearly every seat occupied by someone lugging around their worldly possessions around in a plastic bag. It was desperately sad.
San Francisco has a new mayor, and they are going to spend millions upon millions of dollars to try to clean up the streets.
But it won’t be easy to turn things around, because more drug users and homeless people are moving into the city every single day…
And San Francisco is generous. It offers street people food stamps, free shelter, train tickets and $70 a month in cash.
“They’re always offering resources,” one man dressed as Santa told us. “San Francisco’s just a good place to hang out.”
So, every week, new people arrive.
We like to think that we are setting a positive example to the rest of the world, but the truth is that they are laughing at us.
If we keep doing the same things we will keep getting the same results, and right now there are no signs that the overall direction of this nation will change any time soon.
via ZeroHedge News http://bit.ly/2BAtGNT Tyler Durden
During the middle of the day Wednesday the official verified twitter account for the Prime Minister of Israel stated that PM Benjamin Netanyahu was in Warsaw attending the US-led Middle East summit with an aim to “advance the common interest ofwar with Iran.”
Image source: Israel Ministry of Foreign Affairs
It was tweeted in a thread focused on Netanyahu’s meetings with Arab delegates at the US initiated conference which was originally touted as focused on the “Iran threat”. The AP also confirmed the Netanyahu tweet, which quickly generated multiple headlines focused on what appeared essentially a declaration of war.
The AP noted the statement was published just after the Israeli PM’s meeting with Oman’s foreign minister:
Israel’s prime minister says he plans on working with Arab countries at a U.S.-backed Mideast conference in Warsaw to focus on the “common interest of war with Iran.”
The full deleted tweet read as follows: “What is important about this meeting. and it is not in secret, because there are many of those – is that this is an open meeting with representatives of leading Arab countries, that are sitting down together with Israel in order to advance the common interest of war with Iran.”
After being up for about an hour the tweet was hastily deleted, and replaced with the same statement, but instead of “war with Iran” the new tweet was switched to “combating Iran”.
What is important about this meeting – and it is not in secret, because there are many of those – is that this is an open meeting with representatives of leading Arab countries, that are sitting down together with Israel in order to advance the common interest of combating Iran.
Though there wasn’t an immediate statement from Netanyahu’s office, Tablet Magazine’s Yair Rosenberg tried to paint it as an unintentional snafu.
The prime minister of Israel, ladies and gents. In his own words: Israel is sitting down with some Arab countries (hint hint) to ‘advance the common interest of war with Iran’.
“They posted a bad English translation to his Twitter account, and now his spokesman is correcting,” claimed Rosenberg.
But it appears news editors saw at the very least a crucial and very revealing Freudian slip, and the headlines ran with the original “war with Iran” statement.
Israel’s prime minister Benjamin Netanyahu says he plans on working with Arab countries to focus on the “common interest of war with Iran” https://t.co/z9WzjJDlH6
In perhaps the understatement of the day, the AP’s report concluded with the lines, “The U.S. has billed the conference as a gathering about regional peace and security. But Netanyahu and Gulf countries are eager to focus on Iran.”
Netanyahu’s now deleted tweet is a very dangerous sign of things to come, and while we wonder if Tehran’s is buying the claim that the thrust of Bibi’s message was merely “lost in translation”, we doubt it.
via ZeroHedge News http://bit.ly/2Go3tpH Tyler Durden
