Copper Carnage: Someone Just Liquidated $300 Million In 3 Minutes

Dr. Copper was just clubbed like a baby seal as someone got a $300 million tap on the shoulder, reminding them that the metal with the economics PhD is forecasting trouble ahead…

Between 8:42 to 8:45 a.m. in New York, almost 5,000 contracts were traded, each covering 25,000 pounds of the red metal. That was 16 times the 100-day average for that time of day, a spike in volume that extended the metal’s losses on the Comex.

As Bloomberg points out, that is over $300 million notional value of Copper dumped in just three minutes and follows August’s collapse – the worst month for the forecasting commodity in over two years.

If Copper is right, DoubleLine’s Jeff Gundlach’s favorite bond indicator suggests 10Y Yields have a long way to fall to ‘growth’ expectations…

So is Dr.Copper right? And US Stocks wrong?

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“Sortie Condition Alpha”: Navy Evacuates 30 Warships Out Of Norfolk as Hurricane Bears Down

The US Navy is not taking any chances with Hurricane Florence.

US Fleet Forces Command Public Affairs released a statement that Navy officials ordered all warships in the Hampton Roads, a body of water in Virginia and the surrounding metropolitan region in Southeastern Virginia and Northeastern North Carolina, to set Sortie Condition Alpha.

According to the report, 30 warships are actively departing from Naval Station Norfolk and Joint Expeditionary Base Little Creek as Hurricane Florence is forecasted to bring Category 4 storm conditions to the Mid-Atlantic coast this week.

Officials have directed the vessels to regions of the Atlantic where they will evade the storm. The report did not mention where the ships were headed and indicated that not all warships were able to flee the naval ports.

 “Some units will not get underway due to maintenance status but will be taking extra precautions to avoid potential damage. Commanding officers have a number of options when staying in port, depending on the severity of the weather. Some of these options include adding additional mooring and storm lines, dropping the anchor, and disconnecting shore power cables,” said Fleet Forces Public Affairs.

Fleet Forces Commander Adm. Christopher Grady said, “Our ships can better weather storms of this magnitude when they are underway.”

 Additionally, the report stated all Navy installations in the Hampton Roads region are set Tropical Cyclone Condition of Readiness Three (III), meaning the Navy expects destructive winds of greater than 50 knots.

“Navy installations in Hampton Roads have begun to prepare for the storm. Some preparations include securing hazards throughout the installations, removing debris from drainage areas, designating alternate parking areas for flood prone areas, sand bagging flood prone areas, topping off fuel in generators and government vehicles and relocating dumpsters and equipment to more secure areas,” said Fleet Forces Public Affairs.

 Video: U.S. Navy Ships Sortie Out of Naval Station Norfolk Prior to Hurricane Florence

City officials in Norfolk held a press conference on Tuesday morning, asking residents to shelter in place for up to 72 hours when Hurricane Florence strikes and warned people do not rely on outside help.

City leaders and public safety officials said their weather models were expecting unprecedented storm surges and more than 10 inches of rain to dump on Norfolk later this week. 

Norfolk Mayor Kenny Alexander declared a local state of emergency Tuesday morning.

“There will be a point in the storm where we will not risk lives and send out public safety personnel to come get you,” City Manager Doug Smith said.

Officials advised residents to leave evacuation zones situated near the coastlines. 

At 11 a.m. Tuesday, the National Hurricane Center (NHC) released a report specifying Florence was about +900 miles east-southeast of Cape Fear, North Carolina, and moving west-northwest at 15 mph. Its center will be wedged between Nassau and Bermuda on Wednesday and approach the coastal area of the Carolinas and Virginia on late Wednesday into Thursday, as a possible Category 4/5 storm.

Not even the US Navy wants to stick around and find out what happens next.

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Jeff Sessions Tells Immigration Judges: Don’t Let ‘Sympathy’ Stop You From Kicking People Out of the Country

Attorney General Jeff Sessions doesn’t want America’s immigration judges to let “sympathy” for undocumented immigrants affect their rulings.

“When we depart from the law and create nebulous legal standards out of a sense of sympathy for the personal circumstances of a respondent in our immigration courts, we do violence to the rule of law and constitutional fabric that bind this great nation,” Sessions told the nation’s 44 newest immigration judges yesterday, according to BuzzFeed News. “Your job is to apply the law—even in tough cases,” he added.

Sessions warned that immigration lawyers will try to work around the law “like water seeping through an earthen dam” in order “to advance their clients’ interests.” But “theirs is not the duty to uphold the integrity of the [Immigration and Nationality Act],” he added. “That is our most serious duty.”

Sessions’ remarks were nothing more than a “political statement,” says Dana Marks, an immigration judge and spokesperson for the National Association of Immigration Judges (NAIJ). “It did appear to be a one-sided argument made by a prosecutor,” she tells BuzzFeed.

Since the immigration court system is run by the Justice Department, Sessions has final say on who gets to be an immigration judge and how the judges approach their cases. In June, for instance, Sessions broke with precedent by making it harder for victims of gangs or domestic violence to qualify for asylum. Victims must now “show that the government condoned the private actions or demonstrated an inability to protect the victims,” according to CNN.

That new policy is a “correct interpretation” of the law, Sessions said yesterday, claiming that immigrants would frequently abuse the system to in order to gain asylum. “We all know that a lot of those crossing our borders are leaving a difficult life,” he said. “Asylum was never meant to provide escape from all the problems people face every day around the world.”

NAIJ President Ashley Tabaddor tells BuzzFeed that the immigration court system should be independent of the Justice Department. “We cannot possibly be put in this bind of being accountable to someone who is so clearly committed to the prosecutorial role,” she says. Immigration cases are currently prosecuted by Department of Homeland Security attorneys, meaning both the lawyers and the judges essentially answer to the Trump administration.

Tabaddor is right. Judges are supposed to be impartial, but the Justice Department just wants them to mirror the Trump administration’s hardline stance.

And yes, obviously, it is judges’ job to apply the law. Sessions isn’t wrong about that. But the larger issue here is that America’s immigration system is broken—and that’s a problem Sessions shows little interest in fixing.

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Bill Bonner: America’s Oil Boom Is A Fraud

Authored by Bill Bonner via Bonner & Partners,

Fed policy always consists of the same three mistakes

1) Keeping interest rates too low for too long, resulting in too much debt;

2) Raising interest rates to try to gently deflate the debt bubble; and

3) Cutting rates in a panic when stocks fall and the economy goes into recession.

Well, here comes the Big Bang: Mistake #4 – rarely seen, but always regretted.

Mistake #4 is what the feds do when their backs are to the wall… when they’ve run out of Mistakes 1 through 3.

It’s a typical political trade-off. The future is sacrificed for the present. And the welfare of the public is tossed aside to buy money, power, and influence for the elite.

Apocalypse Now!

Every debt expansion ends in a debt contraction. Stocks crash. Jobs are lost. The economy goes into reverse, correcting the mistakes of the previous boom.

Investors see their money entombed. Householders await foreclosures. The authorities scream: Apocalypse Now!

The more the feds falsify price signals in the boom, the more mistakes there are to correct. For example, this week, a report in The New York Times described the big mistake in the shale oil boom.

You’ll recall that it turned America from a big importer of oil to a major exporter… and revived much of the heartland with big fracking projects in woebegone regions of Texas and North Dakota.

The shale oil boom was even credited with having scuttled the oil market, which dropped from a high of around $130 a barrel in mid-2008 to under $30 in late 2016, thanks to so much new supply.

But guess what? The whole boom was fake. It didn’t add to wealth; it subtracted from it. Accumulated losses over the last five years tote to more than $200 billion, with $36 billion lost in the Bakken shale fields in North Dakota alone.

Had credit been priced properly, it never would have happened. From The New York Times:

The 60 biggest exploration and production firms are not generating enough cash from their operations to cover their operating and capital expenses. In aggregate, from mid-2012 to mid-2017, they had negative free cash flow of $9 billion per quarter.

These companies have survived because, despite the skeptics, plenty of people on Wall Street are willing to keep feeding them capital and taking their fees. From 2001 to 2012, Chesapeake Energy, a pioneering fracking firm, sold $16.4 billion of stock and $15.5 billion of debt, and paid Wall Street more than $1.1 billion in fees, according to Thomson Reuters Deals Intelligence.

That’s what was public.

In less obvious ways, Chesapeake raised at least another $30 billion by selling assets and doing Enron-esque deals in which the company got what were, in effect, loans repaid with future sales of natural gas.

But Chesapeake bled cash. From 2002 to the end of 2012, Chesapeake never managed to report positive free cash flow, before asset sales.

Turkeys Fly

Of course, the same thing could be said of the trillion-dollar companies, Amazon and Apple, whose market capitalizations are largely the result of cheap credit.

And it could be said of the whole tech sector – with its outrageous inputs of capital into companies that have never made a dime.

Or it could be said of emerging markets, which have managed to suck up the loose change spilling out of the financial industry. They promised slightly higher yields, and now, they owe far more than they can pay.

It could also be said of Silicon Valley carmaker Tesla, which now has an estimated $10.5 billion in debt – despite never having made a profit…

Or of the entire stock market, where trillions of dollars in cheap capital have produced very little real return.

“When the wind blows hard enough,” say the old-timers, “even turkeys fly.”

The wind never blew as hard as it did from 2009 to 2018. And overhead now are so many plump, money-losing birds that we suggest you take cover.

Mistake #4

But that’s just the beginning… As the turkeys fall to Earth, the Fed’s reputation is called into doubt. Its manhood is questioned. Congress and the Trump administration, too, are roused to action!

The feds will make the rational choice (for them). They will go for broke.

That is, they will do things that cause you to go broke… while the insiders continue to get rich, following the tried-and-true remedy of Mistake #4 – the refuge of scoundrels and the last resort of jackasses from Zimbabwe to Venezuela.

The essence of Mistake #4 is “printing” money – lots of it – to cover soaring deficits, prop up failing enterprises, reflate markets, rescue sinking households, save the bankers, reward the cronies, and keep the zombies from running wild in the streets.

All this money-printing will spark inflation… which will soon be blazing-hot.

The Fed, of course, is duty-bound to keep prices “stable.” But in the end-of-the-world hysteria, we predict the Fed will “print”… and worry about price stability later.

“When someone is trapped in a house fire… you try to get them out,” the feds will say. “We’ll worry about the fire insurance later.”

Two-trillion-dollar deficits?

Maybe more.

A breathtaking infrastructure boondoggle. A “space force” so far out that it is quickly lost somewhere beyond Mars.

New trade wars to protect U.S. industries from fair competition. A “guaranteed income” for everyone.

Bailouts… Subsidies… Grants… Contracts… Spend, spend, spend. “It’s good for the economy!”

Oh… and new controls on banking and cash… and perhaps gold and even bitcoin… closing the doors to prevent people from escaping the burning building.

Our advice: Run, don’t walk, to the nearest exit now.

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Sen. Lindsey Graham Is the Imp Whispering ‘War’ in President Trump’s Ear

Sen. Lindsay GrahamLindsey Graham’s sole contribution to the discussion during his failed run for the Republicans’ 2016 presidential nomination was a fevered insistence that we need to ramp up our military actions overseas, engaging in more war in more places to fight terrorism and evil. The South Carolina senator’s monomania became comic in one debate, when his response to whatever he was asked, regardless of its relevance to the question, was to push for more foreign intervention.

He was soundly rejected—remember, he polled so poorly he never even made it to the “grown-up table” debates—and he then refused to support Donald Trump in the general election. But these facts have not stopped him from whispering “war” in Trump’s ear whenever possible.

According to Bob Woodward’s book Fear, as recounted over at The Daily Beast, Graham has been taking every opportunity he can as a Trump golfing buddy to encourage the president to take a “more aggressive military posture” overseas. He even told Trump the U.S. should try to encourage China to assassinate the North Korean dictator Kim Jong Un.

That obviously has not happened, but Graham is still playing Gríma Wormtongue, trying to convince Trump to fly with the hawks by appealing to his ego:

“Do you want on your résumé that you allowed Afghanistan to go back into the darkness and the second 9/11 came from the very place the first 9/11 did?” Graham asked the president, rhetorically, in an effort to encourage Trump to step up U.S. troop commitments there.

“Well, how does this end?” Woodward recounts Trump asking. “It never ends,” Graham replied, in rhetoric reminiscent of the Trump-maligned neoconservatism of George W. Bush. “It’s good versus evil. Good versus evil never ends.”

Some people are concerned that Graham is getting more and more of Trump’s ear. One unidentified GOP congressional aide told The Daily Beast, “We would be at war with half the world if Lindsey had it his way.” But another Trump golfing buddy and failed presidential candidate, Sen. Rand Paul (R-Ky.), has been the foreign policy angel on the shoulder opposite Lindsey Graham’s devil. The Daily Beast notes that Paul’s non-interventionist attitude has kept some of those hawkish impulses at bay.

The result: Our overseas involvements are holding steady in a stagnant status quo. Our troops are stuck in Syria, but we haven’t gotten into a full-on war with an attempt to assassinate President Bashar al-Assad.

Mind you, our military interventions themselves have gotten harsher, even if we aren’t sending more troops. Our drone strikes are deadlier than ever and likely killing even more innocent people, but we won’t know for sure because the Trump administration has apparently stopped bothering to calculate casualties.

In the context of Graham’s constant “There are Islamists hiding under the bed with knives!” fearmongering in Trump’s ear, perhaps Paul’s occasionally awkward attempts to curry Trump’s favor—encouraging him to use the junk-science polygraphs to track down leakers, say—makes a little more sense. If libertarians and libertarian-leaning conservatives prefer dialogue and negotiation rather than war against foreign nations, it does make sense to set a good example at home.

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China Charm Offensive Sparks Stock Gains As Trade Tensions Ease (For Now)

Following weakness overnight in Asia and Europe (not helped by reports from NYT last night that Trump was contemplating sanctions against Chinese officials for human rights violations), US futures were suddenly jolted from their dismal day by a headline from The Wall Street Journal suggesting Beijing backing off from the worst of the trade war rhetoric.

Chinese leaders are stepping up a charm offensive with U.S. multinationals and sheathing earlier threats of retaliation as Beijing changes tack to keep the trade fight with Washington from scaring off foreign investors.

Beijing is offering a reassuring message in its outreach to American companies. At a meeting last month, Liu He, President Xi Jinping’s economic-policy chief, told visiting American business representatives that U.S. companies’ China operations won’t be targeted in Beijing’s trade-brawl counterattacks.

“We won’t allow retribution against foreign companies,” Mr. Liu said, according to people briefed on the event.

And futures spiked (and extended the momentum gains through the US cash open)…

Whether or not China is shifting tactics is unknown as it becomes clear that it cannot continue to play tit-for-tat against America’s superior position. But one thing is for sure, the sudden move to being “nice mercantilist” will further position Trump as the “bad mercantilist” in the eyes of many… WSJ notes that more wooing is likely this weekend.

Vice President Wang Qishan is scheduled to meet with a group of Wall Street tycoons including senior executives from JPMorgan Chase & Co., Citigroup Inc. and Blackstone Group . His message, according to a Chinese official, will be it’s business as usual.

The tone is a marked shift from a few months ago when the Trump administration began ratcheting up threats of tariffs on tens of billions of dollars of Chinese products, and Beijing vowed to retaliate dollar for dollar. Back then, Vice President Wang warned U.S. business chieftains there would be corporate casualties. President Xi told others that Beijing would “punch back” at the U.S.

Now Chinese leaders are turning the cheek out of deepening concern that the spiraling trade battle could batter the economy and investment seen as critical to China’s future, according to other officials and government advisers.

It’s “logical that they wouldn’t kill the goose that lays the golden egg,” said William Zarit, a business consultant and chairman of the American Chamber of Commerce in China.

Offshore Yuan also bounced on the report…

 

However, Beijing isn’t abandoning retaliation. 

It has promised to impose tariffs on $60 billion in American goods if the Trump administration moves ahead in the coming weeks with penalties on $200 billion in Chinese goods on top of the $50 billion already being hit with 25% levies. China’s plans would bring the total amount of U.S. imports potentially subject to Chinese tariffs to $110 billion – or 85% of U.S. goods entering China last year.

“It doesn’t take a central government directive for a local official to sense which way the political winds are blowing,” said Jacob Parker, vice president of China operations at the U.S.-China Business Council.

As WSJ concludes,  China’s tit-for-tat strategy, originally devised to force Trump officials back to the negotiating table, so far has failed to pay off for the leadership.

Beijing is looking to U.S. companies to help it lobby the Trump administration for a negotiated settlement.

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He Turned $14,502 Into $800 Million: Now The World’s Biggest Crypto Hedge Fund Is Hurting

Olaf Carlson-Wee is hardly a household name in the pantheon of iconic hedge fund investors. And yet, after turning $14,502 into a $150 million personal fortune by going all-in on cryptocurrencies just before bitcoin became a household name, earning investors in his Polychain Capital such as heavyweight VC Andreessen Horowitz a staggering 2,303% return last year, eventually growing his hedge fund to $800 million… and then losing some 40% of it all before the age of 30, perhaps he  should be.

But the bigger question is with millions riding cryptocurrencies from rag to riches and then back to rags again, is Olaf just a one hit wonder?

Olaf Carlson-Wee, 29

That’s what the WSJ asks in its wide-ranging profile of the Silicon Valley (former?) star who wears neon tracksuits, has five earrings and routinely eats only a plate of refried beans, garlic and cheese for dinner. He is treated as an oracle by wannabe cryptocurrency moguls who mob him in public. He was treated similarly by his investors, until the losses started coming in.

Riding the crypto wave to its December 2017 all time highs, Polychain has since lost around 40% of the $800 million it made for clients last year “through a combination of investment losses and withdrawals by some of its earliest investors.” Some backers are unhappy that Carlson-Wee refuses to change tactics despite a broad pullback from crypto; he himself – like David Einhorn – is fine with his strategy, especially since he cashed out a big chunk of his personal haul in the fund months ago.

To be sure, 2018 has brought nothing but bad news for the one-time star investors:

Prominent venture-capital firm Union Square Ventures has yanked some of its money, while others have fallen out privately with the firm. One investor is suing, suspecting he was underpaid when he moved to redeem his investment. Attorneys for Polychain and Mr. Carlson-Wee deny that.

Worse, the crypto bubble has burst, with bitcoin sliding 55% this year, recently trading for $6,301, down from its peak of nearly $19,280 in December. Ethereum is even worse, down over 80% from its all time highs over $1,300 to below $200 and sliding every day.

“How much of it is luck, how much of it is skill and how much of it is luck disguised?” asks Fred Ehrsam, one of Polychain’s first investors, who is now starting his own fund.

Luck or skill, it is safe to say that Olaf is unorthodox.

The young man has “compared his relationship with cryptocurrency to romantic love, and likened the current investment opportunity to the early days of the internet.” A true bitcoin fanatic, he is not only a hodler, he is a BTFDer – and there have been many dips recently – and has continued buying on every single dip, particularly stakes in businesses tied to bitcoin rivals such as the cryptocurrency ether.

His “office” is what one would hardly describe as “midtown Madison avenue”: he manages Polychain’s roughly $650 million flagship fund—the world’s biggest in crypto—from an Apple laptop surrounded by vintage boom boxes in undisclosed, secret San Francisco warehouse offices.

His background is also unique: Olaf’s path to high-stakes investing began in Minnesota, in the suburbs of Fargo, N.D., where his parents were Lutheran pastors. In high school, Mr. Carlson-Wee wrote an SAT tutoring program in his spare time. He said he had few friends; his classmates voted him “most unique.” At Vassar College, he majored in sociology and against advice from his professors wrote a senior thesis on a virtually unknown digital currency named bitcoin.

After graduation in 2012, he found his calling early when he became the first employee at Coinbase, a cryptocurrency exchange that would soon become America’s largest.

And – unexpectedly for a multi-millionaire – until the morning of his WSJ interview, he owned only one pair of pants: jeans covered in sap from a short stint as a lumberjack. A shoestring acted as the belt. His $50,000 starting salary was paid in bitcoin.

And lucky that it was, because in July 2016, Carlson-Wee quit to start one of the first-ever crypto funds out of an apartment he shared with seven roommates in San Francisco’s gritty Mission district.

With a mullet, a wide collection of vintage windbreakers and a tendency to speak extemporaneously on esoteric topics, Mr. Carlson-Wee reminded some investors of the 1980s “Back to the Future” character Marty McFly.

The pitch worked and soon venture capitalists were lined up at the door (even though as the WSJ writes, Carlson-Wee reminded some investors of the 1980s “Back to the Future” character Marty McFly).

The pitch worked: In December 2016, Union Square Ventures agreed to invest in the fledgling firm at a $5 million valuation, a steep price considering its total assets under management were roughly the same.

Venture capitalist Ramtin Maimi took a stake in Polychain at the same time, and afterward took Mr. Carlson-Wee out to lunch. Over avocado toast, he asked the manager how large Polychain could grow.

“Fifty million dollars is a great target,” Mr. Carlson-Wee responded. A few months later, Mr. Maimi repeated the same question. “I think $400 million is really the right number,” Mr. Carlson-Wee said.

His timing was perfect: polychain grew exponentially at a time when cryptocurrency suddenly became mainstream. Hundreds if not thousands of startups were forming to use the blockchain.

As the money rolled in, Carlson-Wee spent hours each day at his computer, occasionally responding to strangers on Reddit, encouraging them to buy bitcoin and the like. More big names in Silicon Valley were beginning to invest in the fund including Sequoia Capital, Bain Capital Ventures and Peter Thiel’s Founders Fund, all eager to get access and insight into the crypto phenomenon.

Carlson-Wee at Polychain Capital’s offices in a converted warehouse

However, things started to turn sour after Richard Craib, one of Olaf’s friends who first invested with Polychain, was among the first those having second thoughts. He had invented his own coin, dubbed the Numeraire, which briefly made him wealthy on paper as investors including Polychain bid it up. But Polychain subsequently sold some Numeraire, depressing the value of Mr. Craib’s holdings. Mr. Craib shortly after redeemed his investment in Polychain funds, for what he says were unrelated reasons.

Union Square Ventures, one of Polychain’s earliest backers, was also debating its investment. Polychain was racking up millions in gains, but only on paper, and the digital currency was volatile.

None of these events would have taken place if bitcoin had continued to surge, but it was not meant to be.

So has the bitcoin crash affected the 29 year old? Not at all: according to the WSJ, Olaf isn’t bothered by bitcoin’s daily churns. On a recent weekday afternoon, he left his cellphone in his dusty, black Cadillac Escalade for a 90-minute, technology-free hike to the site of an ancient volcanic crater in the Oakland hills.

In between digressions on movie trailers (he won’t watch them, fearing spoilers) and capitalism (in a natural, but not imminent, decline), he talked about how he doesn’t consider himself a trader.

“One thing I want to emphasize is that as a trader, when something doubles, you sell half—or something like that,” he says, making air quotes over the word “trader.” At Polychain, he says, “We don’t trade. We shift around positions.”

Instead, Carlson-Wee describes his approach as “long-term, thesis-driven investing.” This philosophy, shared by blue-chip technology investors such as Andreessen Horowitz, is that cryptocurrency is only one branch of a larger upending of the digital world. Most existing online entities, from dating applications to enterprise cloud computing, will be replaced on a less-expensive, decentralized infrastructure, the blockchain. The question for evangelists is which of the hundreds of competing blockchain platforms will reach widespread adoption.

Last year, Mr. Carlson-Wee was largely placing a bet that his favored platform, Ethereum, would win out; more than one-quarter of Polychain’s main fund was invested in Ethereum, according to its most recent audit.

It proved to be a pinful but, as ethereum is down over 75% this year, while Polychain’s main portfolio is down by about 31% through the end of July, the latest figures available. In communications this year with investors, the firm defended its performance as better than the crypto market at large.

Investors in the fund credit a shift from assets such as Ethereum into less-liquid, more stable stakes in crypto companies internationally. That’s a less-volatile bet but one that’s harder to get out of in the case of an extended decline.

Whether he managed to beat his ethereum “benchmark” is irrelevant, as those investors who want to pull all of their money are now out of luck. Since the start of the year, Polychain has blocked investors from redeeming their money immediately, instead putting investments into a side pocket that now comprises more than half the fund. That means investors can’t cash out fully even if they want to.

But while his investors may be stuck, Carlson-Wee is rich. Unlike many firms that hold illiquid assets that are paid only when they sell investments, Polychain’s main fund takes its fees every year on paper gains. And while Carlson-Wee started last year with just $14,502 in the fund, turning that into $150 million of fees, he has since cashed out $60 million, a move that raised concerns among investors about his commitment to his own fund. “He says he set aside money for family, and subsequently invested more in the firm’s funds.”

What happens next is unclear.

Carlson-Wee now straddles the line between crypto kid and crypto king. He has pared back his time on online message boards to 15 minutes a day, from an hour or more in years’ past, to spend more time on the fund. He recently chopped off his mullet because being known for such an idiosyncrasy reminded him of “something a hedge-fund manager would do.”

He moved the firm to new offices in a converted warehouse. The San Francisco address listed on Polychain’s public filings is a fake, designed to fool would-be hackers and kidnappers who have targeted other crypto traders.

“This is going to be such an epic adventure either way,” Carlson-Wee said, smiling. “Like, if this whole thing collapsed, that would be crazy, you know?”

Others disagree: “This model will not last,” says Jing Sun, a Polychain investor. Polychain is now raising new funds that won’t charge fees until they realize gains.

Ultimately, the story of Olaf will be determined by whether believers in cryptocurrencies can reflate yet another bubble. “If cryptocurrencies go to zero, we go to zero,” Carson-Wee said. “I don’t think anyone is under any illusions that’s not the case.”

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Democrats Created a Birth-Control Banning Boogieman Out of Brett Kavanaugh. Called Out, Kamala Harris Doubled Down

California Sen. Kamala Harris and other prominent Democrats distorted Brett Kavanaugh’s statements on birth control in widely shared warnings that the Supreme Court nominee is a woman-hating religious extremist. Harris’ comments about Kavanaugh have been deemed whoppers by Washington Post fact-checker Glenn Kessler and ruled as false by the lie detectors at Politifact.

Harris, who is widely considered a 2020 Democratic presidential contender, accused Kavanaugh of signaling during Senate confirmation hearings last week that he would be “going after birth control.” The Republican nominee, she tweeted, had been specifically chosen for his willingness to snatch up “a woman’s constitutionally protected right to make her own health care decisions.”

“Make no mistake,” she warned, “this is about punishing women.”

But the clip Harris shared as confirmation of this secret plot was deceptively edited. Asked about a case involving religious objections to the Obamacare contraception mandate, the video showed Kavanaugh responding that “filling out the form would make [Priests for Life] complicit in the provision of the abortion-inducing drugs that they were, as a religious matter, objected to.”

Kavanaugh’s use of the phrase abortion-inducing drugs is what’s at issue here. The contraception mandate said that employer health-insurance plans must cover birth control, not abortion pills. Harris called Kavanaugh’s answer a “dog whistle” that showed he was against not just abortion but also birth control.

Other Democrats echoed her. “This is a red-alarm moment,” tweeted Oregon Sen. Jeff Merkley. “If you didn’t believe it before, believe it now – a woman’s constitutional right to abortion AND birth control are both 100% at stake.” U.S. House candidate Alexandria Ocasio-Cortez tweeted: “Brett Kavanaugh doesn’t even know what birth control IS. He doesn’t deserve to pass a 7th grade health class, let alone a Supreme Court confirmation…. We must #CancelKavanaugh.”

But here’s what Harris left off the start of the abortion-inducing drugs sentence in her video clip: They said. Kavanaugh’s full sentence has been that “they said filling out the form would make them complicit in the provision of the abortion-inducing drugs that they were, as a religious matter, objecting to.”

In other words, Kavanaugh was characterizing the positions of Priests for Life, plaintiffs in the lawsuit which he had specifically been asked about.

In 2015, Kavanaugh had dissented from other U.S. Court of Appeals for the District of Columbia Circuit judges, who had denied Priests for Life’s request for full-court hearing after a three-judge panel rejected their claims. In his dissent, Kavanaugh writes that the Supreme Court’s ruling in the Hobby Lobby case “strongly suggests that the Government has a compelling interest in facilitating access to contraception for the employees of these religious organizations.” However, “the Government need not—and therefore under RFRA [the Religious Freedom Restoration Act] may not—pursue its compelling interest in facilitating access to contraception by requiring religious nonprofit organizations to submit the form required by current federal regulations.”

“One final note for clarity,” Kavanaugh added:

The Government may of course continue to require the religious organizations’ insurers to provide contraceptive coverage to the religious organizations’ employees, even if the religious organizations object. As Judge Flaum correctly explained, “RFRA does not authorize religious organizations to dictate the independent actions of third-parties, even if the organization sincerely disagrees with them.”

When called out about the shortened clip, Harris pressed on with original criticism. “There’s no question that he uncritically used the term ‘abortion-inducing drugs,’ which is a dog whistle term used by extreme anti-choice groups to describe birth control,” she tweeted. This is a pattern with Harris—when called out on bad behavior, she doubles down. (For more Reason coverage of Harris, see here, here, here, here, and here.)

In any event, it looks like we’re gearing up for a full rehash of the “War on Women” rhetoric we saw in the late Obama years. And so far, it’s promising to be every bit as dumb.

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Mysterious Crack Pipe Vending Machines Baffle New York Authorities

Officials in Suffolk County, New York are baffled after at least three “crack pipe vending machines” appeared on Long Island – sparking concerns that there may be more. 

Residents of Brookhaven complained to authorities about the machines last weekend, while two have been removed and one was partially destroyed by the community, according to WABC-TV.

The blue and white vending machines, which featured the words “Sketch Pens” on the outside in black and red font, were mounted in cement into the ground and would dispense a small glass tube and a filter. Included was the top of a pen, which could be put into the glass tube to form a pen, along with an ink tube.

The “pens” cost $2 each, and the machines would accept the payment in the form of eight quarters. –WABC-TV

“You think you’ve heard of everything,” said Brookhaven Brookhaven Supervisor Ed Romaine. “I continue to be surprised by some of the audacity of those that would break the law in promoting drugs and drug paraphernalia.”

Local resident Scot Malz and a friend took a video of one of the vending machines on Saturday and posted it to Facebook. 

“I wanted the community to see what was going on and try to get rid of it as quick as possible,” he said. “Because that’s actually a bad area for drugs.”

Danielle Blom said one was located just outside her apartment complex on Route 112 in Medford. She said an angry community member smashed it to pieces.

“We’ve been here for three years,” she said. “We’ve never had any problems, and now this. So it’s pretty disgusting.” –WABC-TV

Local police will decide if the machines warrant criminal charges. 

“To sell a pipe is not illegal, but this is considered drug paraphernalia,” Town Councilman Michael Loguercio said. “And it also is being dispensed from a machine that was installed illegally per town code.”

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Miami Billionaire Charged By SEC For “Pump-And-Dump Schemes”

Miami billionaire Phillip Frost was one of ten individuals the Securities and Exchange Commission (SEC) charged on Friday, accused of participating in an extremely profitable “pump-and-dump schemes” for nearly five years in small capitalized publicly-traded biotech companies.

The SEC alleges that from 2013 to 2018, the Florida billionaire — who founded OPKO Health, a pharmaceutical and diagnostics firm, and nine other investors were involved in market manipulation of three companies’ stock prices.

Frost, Opko, and others were accused of profiting more than $27 million in the penny stock scheme by organizing stock buys and hiring investor relation teams — including penny stock promoters that would write misleading articles on popular financial websites — while failing to properly disclose their massive stakes.

The scheme left average investors “holding virtually worthless stock,” the SEC complaint read.

“[The group charged] engaged in brazen market manipulation that advanced their financial interests while fleecing innocent investors and undermining the integrity of our securities markets,” said Sanjay Wadhwa, senior associate director of the SEC’s Division of Enforcement. “They failed to appreciate, however, the SEC’s resolve to relentlessly pursue and punish participants in microcap fraud schemes.”

The SEC complaint in particular notes that Frost “enjoys a reputation as a successful biotech investor,” and was once touted the “Warren Buffet of biotech,” in a recent Forbes article.

According to the SEC, Barry Honig was the leader in organizing the pump in share prices of the three companies — identified by the Wall Street Journal as BioZone Pharmaceuticals, MGT Capital Investments and MabVax — paying various stock promoters that would then allocate funds for Seeking Alpha writers, massive email blasts, social media campaigns, and newsletters. It was a massive campaign to extract millions of dollars from broke Americans hoping that they could make it big in the stock market.

“Honig was the primary strategist, calling upon other Defendants to buy or sell stock, arrange for the issuance of shares, negotiate transactions, or engage in a promotional activity,” the SEC complaint said.

Florida investor Barry Honig, John Stetson, Michael Brauser, John R. O’Rourke III, Mark Groussman, Elliot Maza, Robert Ladd, Brian Keller, John H. Ford, Alpha Capital Anstalt, ATG Capital LLC, GRQ Consultants Inc., HS Contrarian Investments LLC, Grander Holdings Inc., Melechdavid Inc. and Stetson Capital Investments Inc. were also named in the SEC complaint.

In a statement published late Friday, Opko responded that Frost could have explained the situation if the SEC had followed the rules and notified him in advance of the charges that were being shaped against him. The charges, the company added, contain “serious factual inaccuracies.”

“Opko and Dr. Frost have always prided themselves on adhering to the highest standards of financial disclosure, and they are confident that once a proper investigation is completed and the facts of the case have been fully disclosed, the matter will be resolved favorably for them.”

And now we know why many Americans believe the stock market is rigged…

* * *

According to Forbes, here are 20 Frost-owned companies, nearly all publically traded, but most are penny stocks: 

  • OPKO HEALTH (OPK) Frost owns 34% of therapeutics and diagnostics company with $1.2 billion in sales.
  • TEVA PHARMACEUTICALS INDUSTRIES (TEVA) A $20 billion (revenue) Israel-based big pharma, specializing in generics. Frost owns 1.5% of the stock.
  • VECTOR GROUP (VGR) Founded by fellow Philadelphian Bennett LeBow; owns tobacco company Liggett Group and commercial realtor Douglas Elliman Realty. Frost is largest shareholder, with 15%.
  • LADENBURG THALMANN (LTS) Regional investment bank and financial advisory; 4,000 advisors and $132 billion in assets. Frost owns 36.5% and Vector Group owns 8.23%.
  • CASTLE BRANDS (ROX) Maker of premium liquor, including Jefferson’s whiskey and Goslings rum. Frost owns 33.5% and Vector 8%.
  • COCONUT GROVE BANKSHARES (Private) Miami-Dade’s oldest bank; Frost owns 24%.
  • COGINT (COGT) Formerly Tiger Media; a cloud-based data and analytics company focused on marketing and risk management. Frost owns 29%.
  • BIOCARDIA (Private, Owned by Opko) Formed by Frost’s Sorbonne roommate, Dr. Simon Stertzer. A clinical-stage company using stem cells to repair cardiac muscle after a heart attack. Frost owns 32.7%.
  • DRONE AVIATION (DRNE) Florida-based maker of drones for law enforcement and military. Frost owns 14%.
  • ARNO THERAPEUTICS (ARNI) Developing antiprogestins for breast, endometrial and prostate cancers. Opko owns 9%.
  • ZEBRA BIOLOGICS (Private, Owned by Opko) Attempting to make generic versions of antibody drugs–like the bestselling rheumatoid arthritis drug Humira–that could be better than the original. Opko owns 29%.
  • OAO PHARMSYNTHEZ (Private, Owned by Opko)  Russian developer and marketer of new drugs in Eastern Europe. Opko owns a 17% equity interest.
  • RXI PHARMACEUTICALS (RXII)  Ladenburg took it public in December. Developing an RNA interface to prevent skin scars. Opko has an 19% equity interest.
  • COCRYSTAL PHARMA (COCP) New antivirals (hepatitis C, flu, Norovirus); Frost and Opko own 23%.
  • SEVION THERAPEUTICS (SVON)  Developing antibodies against difficult targets; treating cancer and immunological diseases. Frost and Opko own 20%.
  • NEOVASC (NVCN) Canadian maker of specialized cardiology devices. Frost owns 22%.
  • CHROMADEX (CDXC) Maker of ingredients for nutritional supplements. Frost owns 14.6%.
  • VBI VACCINES (VBIV) Developing a technology platform to design vaccines for hepatitis B, Zika and brain tumors. Opko has a 25% equity interest.
  • MABVAX THERAPEUTICS (MBVX) Clinical-stage cancer immunotherapy. Frost and Opko have an estimated 5% interest.
  • MUSCLEPHARM (MSLP) Nutritional supplements. Frost owns less than 5%.

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