Category: zerohedge

Authored by James Rickards via The Daily Reckoning,

As you know by now, the Federal Reserve raised interest rates again this week, its eighth increase since the rate hike cycle began in 2015.

In his post-announcement press conference, Jerome Powell cited a strong economy, low unemployment, solid growth, etc. He said that “It’s a particularly bright moment” for the economy.

Barring significant developments, the Fed may raise rates again in December and perhaps three times next year.

Meanwhile, the Commerce Department announced that second quarter U.S. GDP expanded at a 4.2% annualized rate, confirming the earlier estimate.

On the surface it might look everything is great, that it is a particularly bright moment for the economy. But if you take a hard look behind the numbers, a different picture emerges.

A lot of the cheerleaders say Trump’s programs of tax cuts and deregulation will produce persistent trend growth of 3–4% or higher.

Such growth would break decisively with the weak growth of the Obama years. It would also make the U.S. debt burden, currently at 105% of GDP, more sustainable if GDP were to grow faster than the national debt.

There’s one problem with the happy talk about 3–4% growth. We’ve seen it all before.

• In 2009, almost every economic forecaster and commentator was talking about “green shoots.”

• In 2010, then-Secretary of the Treasury Tim Geithner forecast the “recovery summer.”

• In 2017, the global monetary elites were praising the arrival (at last) of “synchronized global growth.”

None of this wishful thinking panned out. The green shoots turned brown, the recovery summer never came and the synchronized global growth was over almost as soon as it began.

Any signs of trend growth have been strictly temporary (basically moving growth from one quarter to another through inventory and accounting quirks) and are quickly followed by weaker growth. In the first quarter of 2015, growth was 3.2%, but by the fourth quarter that year growth had fallen to a near-recession level of 0.5%.

In the third quarter of 2016 growth was 2.8%, but it fell quickly to 1.2% by the first quarter of 2017. In the third quarter of 2017 growth was 3.2% but then returned to 2.0% by the first quarter of 2018, about the average for the past nine years.

This pattern of temporarily strong growth followed by weak growth has been characteristic of the entire recovery that began in June 2009 and entered its 10th year a few months ago. In fact, we’ve seen even more extreme reversals in the recent past.

In the third quarter of 2013, growth was 4.5%. But by the first quarter of 2014, just six months later, growth was actually negative, -2.1%, comparable to some of the worst quarters in recent recessions.

Growth was 5.0% in the third quarter of 2014, but then fell off a cliff and was barely positive, 0.2%, in the first quarter of 2015.

You get the point. Strong quarters have been followed by much weaker quarters within six months on six separate occasions in the past nine years. There’s no reason to believe this trend will end now.

The longer-term view of the entire recovery is more revealing. The recovery is currently 109 months old, the second-longest since the end of the Second World War. The average recovery since 1980 (a period of longer-than-average expansions) is 83 months.

So this expansion has been extraordinarily long — far longer than average — indicating that a recession should be expected sooner rather than later.

But the current expansion has also been the weakest recovery on record. Average annual growth during this expansion is 2.14%, compared with average annual growth for all expansions since 1980 of 3.21%. That 3.21% figure is what economists mean by “trend” growth.

Even with the latest GDP numbers, the current expansion does not even come close to that trend. The “wealth gap” (the difference between 3.2% trend growth and 2.1% actual growth) is now over $4 trillion. That’s how much poorer the U.S. economy is due to its inability to achieve sustainable trend growth.

As for the Trump bump, growth in the first quarter of 2018 was 2.0%, slightly below the average since June 2009. Growth for all of 2017, Trump’s first year in office, was 2.6%, slightly above the 2.14% average in this recovery but not close to the 3.5% growth proclaimed by Trump’s supporters.

In short, growth under Trump looks a lot like growth under Obama, with no reason to expect that to change anytime soon. In fact, the head winds caused by the strong dollar, the trade wars and out-of-control deficit spending may slow the economy and bring future growth down below the average of the Obama years.

I’ve said repeatedly that the Fed is tightening into weakness. But it’s more than the rate hikes. The Fed is also winding down its balance sheet, and the pace is scheduled to accelerate next year.

Far from printing money, the Fed is destroying base money at a rapid pace. The Fed is basically burning money. They’re doing this by not rolling over maturing Treasury and mortgage securities they hold on their balance sheet. That’s a “double whammy” of tightening.

When a security held by the Fed matures and the issuer pays it off, the money sent to the Fed just disappears. It’s called quantitative tightening, or QT.

When the Fed started QT in late 2017, they urged market participants to ignore it. They said the QT plan was on autopilot, the Fed was not going to use it as an instrument of policy and the money burning would “run on background” just like a computer program that’s open but not in use at the moment.

It’s fine for the Fed to say that, but markets have another view. Analysts estimate that QT is the equivalent of two–four rate hikes per year over and above the explicit rate hikes.

Bearing in mind that monetary policy works with a 12–18-month lag, this extraordinary tightening policy in a weak economy is almost certainly a recipe for a recession.

And expected results are beginning to show up in the markets. Mortgage interest rates are up, mortgage refis are sinking like a stone and housing affordability is suffering.

This will eventually result in fewer new home purchases, slower household formation and a weakening economy. The Fed will have to reverse course and cut rates, or at least “pause” in raising rates much sooner than they think.

The Fed knows a recession will happen sooner rather than later and is desperate to acquire some dry powder (in the form of higher rates and a reduced balance sheet) so it can use it when the time comes.

The problem, of course, is that by pursuing these policies, the Fed will cause the recession it is preparing to cure.

The single most important factor in my analysis is that when the Fed realizes its mistake of tightening into economic weakness, it will have to turn on a dime and shift to an easing policy.

Easing will come first through forward guidance and pauses in the rate hike tempo, then possibly actual rate cuts back to zero and finally reversing their balance sheet reductions by expanding the balance sheet through QE4 if needed.

Jay Powell seems determined to continue rate hikes on an aggressive path and possibly to accelerate the hikes. But he might be in for a severe case of whiplash when he has to make a hard pivot to easing.

But by then, the damage will have been done.

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A professor at the University of Toronto’s Scarborough Campus accidentally played a porno to a lecture hall filled with approximately 500 students last week, according to multiple reports. 

On September 24, a video surfaced that appears to show UTSC psychology professor Steve Joordens playing a pornographic video on the projector screen by accident.

The incident, which apparently took place at the start of the lecture, was recorded by one of the students in the class via a Snapchat video and subsequently posted onto Reddit, where, along with many memes made about the event, it instantly went viral.

…

The class, which was reportedly PSYA01: Introduction to Biological and Cognitive Psychology, had about 500 students in the lecture hall. As seen in the video posted by the student, many students in the class were laughing, though others could be seen walking out of the room.

…

“When I saw the [pornographic] video, I was surprised,” the original poster, a first-year student studying Philosophy, wrote. –The Varsity

“I was not expecting that especially this early in the morning… I found the whole situation funny and he made a lot of people laugh,” said the student. 

Professor Steve Joordens – who joined UTSC in 1995, responded to the incident – telling The Varsity: “With respect to the event that happened prior to my class on Monday the 24th, I want to be clear that what happened was completely unintentional and I feel absolutely terrible about it,” adding “I have apologized to my class and now I want to move on. Thanks to my students, colleagues and my amazing family for their support and understanding.”

Surprisingly, the professor didn’t cancel the lecture or really do anything apart from taking the video down and, according to students, said “well that was awkward” and resumed teaching. At face value, it seemed that was the end of the story. Though many students are convinced it’s actually a part of something bigger. –Narcity

“Everyone makes mistakes so I can’t blame him,” said the student who posted the video. “I hope nothing bad happens in the future and this can just be a thing to laugh about, I hope his job isn’t affected or anything in his personal life either.”

That said, not everybody think the porn was an accident… 

One Reddit user who claims they were a student of the professor’s back in 2008 believes the whole thing was staged. This is because a similar odd instance had happened in their own class with the professor, that had been part of a skit meant to enhance the lesson that was being taught that day: 

Surprisingly enough, it turns out that using pornography as lecture material isn’t a foreign concept. It’s actually been used as educational material in Psychology, Sociology, Gender Studies and sexuality-based courses. But, when you start including that kind of media in your lecture, it is common practice to give students the option not to participate. –Narcity

pic.twitter.com/yDClteBWbg

— zz👳🏽‍♀️ (@zshaikh20) September 25, 2018

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Authored by Jeffrey Snider via Alhambra Investment Partners,

It’s that time of year. September, the leaves start to turn and the air grows crisp. Autumn smells arrive; the Chinese prepare for their nationalist Golden Week. Ever since 2014 and the dollar’s rise, that is, eurodollar tightening especially in Asia, these holiday bottlenecks are never boring. To be shut down for an entire week in early October, the banking system in China builds up a liquidity stockpile in September.

There were actually three Golden Weeks up until 2007. The middle one, surrounding Communists’ infatuation with May Day, was quietly dismissed on the recommendation of the Chinese People’s Political Consultative Conference (CPPCC). These long holiday breaks were being viewed as disruptive to economic flow.

In September 1999, the State Council devised the original Golden Week holiday system as a way to standardize vacation time (Communists’ infatuation with sameness, which is very different from equality). It was also intended to boost tourism and economic activity. Economists are the same whether Communist or Western; they all think they can increase spending by changing the most arbitrary factors.

The biggest factor in the December 2007 elimination of the third week was obvious interruption. Cai Jiming, the project leader for the CPPCC in 2007, told government officials that (translated):

There are data showing that since the implementation of the Golden Week Vacation system, the pulling effect on consumption has not been great, but it has brought a series of negative effects, such as increasing short-term costs for businesses, declining service quality, and increasing government public management costs.

China’s National Tourism Administration agreed, so on December 16, 2007, the Chinese Central Government announced a revised Regulation on Public Holidays for National Annual Festivals and Memorial Days. There would now be just the pair in China, two economic disturbances better than three.

The banking system felt them as much as the real economy, but adjusted well enough. When money was plentiful, no big deal. But as things have really tightened the last four years, the Golden Weeks have become eventful. China’s weeklong New Year every January has tended to be the greater of the two, but October’s celebration of the Communist takeover has contributed its share of interesting behaviors.

These haven’t been limited to mainland China. Tightening and volatility ahead of the October festival has been witnessed in Hong Kong, too. It’s one of the most obvious changes to the interconnection between CNY and eurodollars.

September 2018 has taken it one step further still.

The overnight HIBOR rate, the cost of borrowing Hong Kong dollars unsecured by collateral, spiked higher nearly two weeks ago – right on schedule. On September 13, it was almost 2% and remained at that elevated level through yesterday. Today, the overnight rate fixed at nearly double that, 3.85%.

The Hong Kong Monetary Authority, the city’s currency board, which has acted as a de facto central bank this year given what’s happened with HKD, refused to comment publicly. They would only note privately, in emails obtained by several local media outlets, that “market participants” were watching “elevated interbank rates.”

They would have to given what’s happened to the currency:

A reverse from the bottom range of the allowed band should be a welcome sign to Hong Kong’s beleaguered monetary officials. The HKMA has really struggled this year in ways it wasn’t expecting.

But a surge all at once isn’t what anyone in Hong Kong wants to see. Volatility is always and everywhere the real killer for anything in the banking system. It doesn’t discriminate. Risk perceptions were already challenged by HKD’s sharp decline earlier this year.

As a technical matter, the dearth of liquidity in the city has apparently brought a rush of funds into the area to take advantage of the surge in rates – HIBOR though unsecured being viewed universally as still at least a low risk if not as before completely risk-free. Near 7.85, sure. But all the way to 7.80?

The real question is where those funds are coming from. There haven’t been any similar moves in any major currency partners, especially CNY. The closest thing has been the euro’s rebound, though it began back in mid-August (with CNY’s stabilizing).

Instead, we are left to suspect China’s latest approaching Golden Week. Banks in the hoarding stage can only become more desperate if hoarding is hard to accomplish.

These holidays have always been disruptive, but the last few years they are really pushing it.

“They.”

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Almost half of all US residents in the top five largest cities, or 48%, do not speak English at home according to the latest Census Bureau data. 

The Washington Examiner reports that the new report, conducted by the Center for Immigration Studies (CIS), also reveals that “As a share of the population, 21.8 percent of U.S. residents speak a foreign language at home — roughly double the 11 percent in 1980.” Overall, roughly 67 million residents don’t speak English at home. 

In New York City and Houston it is 49 percent; in Los Angeles it is 59 percent; in Chicago it is 36 percent; and in Phoenix it is 38 percent. –CIS

In terms of population, Spanish is the most commonly spoken language at home at 41 million residents in 2017, up from 37 million in 2010. Chinese is the next most common language at 3.4 million using it primarily at home. 

In terms of the fastest growing non-English languages spoken at home, Telugu experienced the most rapid growth, followed by Bengali, Tamil, Arabic, Hindi, Urdu and Punjabi.

Ranking non-English speakers by state, California leads the pack, followed by Texas, New Mexico, New Jersey, Nevada and New York.

In terms of percentage growth by state, Washington D.C. experienced the largest percent growth in non-English speaking homes between 2010 and 2017, followed by Wyoming, North Dakota, Utah, Delaware, Nevada, Maryland and Nebraska. 

The study comes amid several reports of altercations over the use of English, such as last week’s report about a couple who was refused service at a Florida Taco Bell because they did not have any English speaking employees. 

In another case last May, a New York man threatened to call immigration police if customers and employees didn’t stop speaking English in a restaurant. 

Among the top findings from the CIS report: 

• In 2017, a record 66.6 million U.S. residents (native-born, legal immigrants, and illegal immigrants) ages five and older spoke a language other than English at home. The number has more than doubled since 1990, and almost tripled since 1980.

• As a share of the population, 21.8 percent of U.S. residents speak a foreign language at home — roughly double the 11 percent in 1980.

• In America’s five largest cities, 48 percent of residents now speak a language other than English at home. In New York City and Houston it is 49 percent; in Los Angeles it is 59 percent; in Chicago it is 36 percent; and in Phoenix it is 38 percent.

• In 2017, there were 85 cities and Census Designated Places (CDP) in which a majority of residents spoke a foreign language at home. These include Hialeah, Fla. (95 percent); Laredo, Texas (92 percent); and East Los Angeles, Calif. (90 percent). Perhaps more surprisingly, it also includes places like Elizabeth, N.J. (76 percent); Skokie, Ill. (56 percent); and Germantown, Md., and Bridgeport, Conn. (each 51 percent).

• Nearly one in five U.S. residents now lives in a city or CDP in which one-third of the population speaks a foreign language at home. This includes Dale City, Va. (43 percent); Norwalk, Conn., and New Rochelle, N.Y. (each 42 percent); and Aurora, Colo., and Troy, Mich. (each 35 percent).

• In contrast to many of the nation’s cities, in rural areas outside of metropolitan areas just 8 percent speak a language other than English at home.

• The data released thus far indicates that nationally nearly one in four public school students now speaks a language other than English at home. In California, 44 percent of school-age (5-17) children speak a foreign language at home, and it’s roughly one-third in Texas, Nevada, New Jersey, New York, and Florida.

• Of school-age children (5-17) who speak a foreign language at home, 85 percent were born in the United States. Even among adults 18 and older, more than one-third of those who speak a foreign language at home are U.S.-born.

• Of those who speak a foreign language at home, 25.9 million (39 percent) told the Census Bureau that they speak English less than very well. This figure is entirely based on the opinion of the respondent; the Census Bureau does not measure language skills.

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Authored by Ethan Huff via NaturalNews.com,

Transhumanism is well on its way to becoming a reality in the United States military, as the Pentagon has announced that it’s working on a new “neural interface” technology that would connect human brains directly to machines as a way to control them.

The Defense Advanced Research Projects Agency, also known as DARPA, says the technology, known as Next-Generation Non-Surgical Neurotechnology, or N3, will allow troops to connect to special military control systems using just their brainwaves. The technology will allow for humans to not only control military machines with their minds, but also the inverse – military machines would be able to transmit information to users’ brains as well.

The goal is to combine “the speed and processing power of computers with humans’ ability to adapt to complex situations,” according to DARPA. It will allow people to “control, feel and interact with a remote machine as though it were a part of their own body.”

“From the first time a human carved a rock into a blade or formed a spear, humans have been creating tools to help them interact with the world around them,” says Al Emondi, the program manager at DARPA’s Biological Technologies Office.

“The tools we use have grown more sophisticated over time … but these still require some form of physical control interface – touch, motion or voice. What neural interfaces promise is a richer, more powerful and more natural experience in which our brains effectively become the tool.”

Mark of the beast: melding humans with machines

DARPA claims that the technology is completely innocent, as similar iterations of it for disabled veterans are already in use. “Revolutionizing Prosthetics,” as it’s called, is a program by DARPA that implants electrodes into disabled veterans’ brains, allowing them to control prosthetic limbs simply by thinking about it.

But isn’t that always how egregious new forms of transhumanism typically start? Positive anecdotes about how invasive technologies are “helping people” almost always functions as the gateway to more government control over humans – in this case, military servicemen who are being told that implantable technologies stand to benefit humanity.

DARPA’s rhetoric would have us all believe that combining man with machine is somehow beneficial and even “natural,” even though its true implications are more “mark of the beast” than they are revolutionary breakthrough.

Consider that with N3, able-bodied members of the military would need to ingest “different chemical compounds,” according to reports, in order to activate external sensors that both read and write information to the brain. This technology has to be “bidirectional,” claims DARPA, though the agency has not fully revealed precisely why this is the case.

It’s the type of thing one might expect to see in a sci-fi movie, except it’s now happening in real life. In the future, as openly admitted by DARPA, members of the military will be able to control attack drones with their brains, or deploy robot warriors using just brain motor signals and thoughts.

The technology is even being designed to provide real-time feedback about events happening in the world, such as cyber attacks. Users will purportedly be able to “feel” these events inside their bodies through “sensations.”

“We don’t think about N3 technology as simply a new way to fly a plane or to talk to a computer, but as a  tool for actual human-machine teaming,” Emondi admits.

“As we approach a future in which increasingly autonomous systems will play a greater role in military operations, neural interface technology can help warfighters build a more intuitive interaction with these systems.”

For more information about the agenda of the military-industrial complex to combine man with machine, be sure to see Transhumanism.news.

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Less than 24 hours after President Trump bowed to pressure from Senate Republicans and ordered the FBI to conduct a one-week long “supplemental background investigation” into allegations of sexual misconduct facing SCOTUS nominee Brett Kavanaugh, the federal judge’s second accuser, Deborah Ramirez, who attended Yale with Kavanaugh in the early 1980s, has already agreed to cooperate with the probe after being contacted by the bureau, the Washington Post reported. 

The FBI is also investigating allegations by Christine Blasey Ford, the psychology professor at Palo Alto University in California, whose tearful dramatic testimony before the Senate Judiciary Committee this week nearly derailed Kavanaugh’s nomination – that is, until he stepped up and delivered an impassioned denial that satisfied President Trump and Senate Republicans. Ford claims that Kavanaugh sexually assaulted her in the early 1980s when they were in high school in Maryland. Ramirez told the New Yorker that Kavanaugh pulled out his penis and shoved it in her face during a drunken dorm room party during their freshman year at Yale.

Ramirez’s lawyer confirmed that she would cooperate with the investigation, but declined to comment further.

“We can confirm the FBI has reached out to interview Ms. Ramirez and she has agreed to cooperate with their investigation,” the attorney, John Clune, said in a statement. “Out of respect for the integrity of the process, we will have no further comment at this time.”

In addition to at least two of Kavanaugh’s named accusers (two women more women have anonymously accused him of misconduct though their claims are widely viewed as not credible), several of the alleged witnesses whom Ford said also attended the party where the assault allegedly occurred have agreed to cooperate.

But already, two potentially crucial witnesses have said they will cooperate with the FBI, raising the possibility that at least more statements and recollections will be added to the record, even if they’re not ultimately definitive.  

An attorney for Leland Keyser, a friend of Ford’s who Ford says was at the party, said Keyser also was willing to cooperate with the FBI investigation. But the attorney emphasized that Keyser has no recollection of the party where Ford alleges Kavanaugh assaulted her.

“Notably, Ms. Keyser does not refute Dr. Ford’s account, and she has already told the press that she believes Dr. Ford’s account,” the attorney, Howard J. Walsh III, wrote in an email to the Senate Judiciary Committee. “However, the simple and unchangeable truth is that she is unable to corroborate it because she has no recollection of the incident in question.”

Judge, the high school friend of Kavanaugh who Ford says was in the room during the alleged assault, has also agreed to cooperate with the FBI. His account has been particularly sought after because, unlike Kavanaugh, Judge has not denied Ford’s allegations but has said he has no memory that such an assault occurred.

Ford told the Judiciary Committee that some weeks after the alleged assault, she ran into Judge at a local grocery store where he was working for the summer.

As WaPo reminds us, the FBI’s investigation is merely a background check, not a criminal probe. Notably, sex crime prosecutor Rachel Mitchell, who questioned both Kavanaugh and Ford on Thursday, said she wouldn’t be able to pursue an investigation or even request a search warrant given Ford’s testimony.

A background investigation is, by its nature, more limited than a criminal probe, and FBI agents will not be able to obtain search warrants or issue subpoenas to compel testimony from potential witnesses. The FBI’s interviews, which will take a few days to conduct, won’t turn into a sprawling inquest of everyone Kavanaugh went to a party with in high school, said a person familiar with the investigation.

The paper also reminded readers, perhaps with a dash of tongue-in-cheek irony, that the results of the investigation would only be shared with a small group of senators and would not become public (though we imagine they will almost inevitably leak).

The FBI’s findings will not necessarily become public. When investigators have completed their work, anything they’ve discovered will be turned over to the White House as an update to Kavanaugh’s background check file. The White House would then likely share the material with the Senate committee.

At that point, all senators, as well as a very small group of aides, would have access to it.

The White House or the Senate would decide what, if anything, should be released publicly. The bureau’s work will likely consist mostly of reports of interviews with witnesses and accusers. The bureau will not come to a conclusion on whether the accusations are credible and will not make a recommendation on what should become of Kavanaugh’s nomination.

While Democrats heralded the probe as an unmitigated win for their stalling strategy, there’s still a solid chance that it could backfire. As Bloomberg’s Jennifer Jacobs revealed, high school friends of Ford and Kavanaugh say the investigation could uncover some “fairly unpleasant things” about Ford’s behavior.

A person who knew both Kavanaugh and Ford in high school tells me:

“This FBI mini investigation is going to uncover some fairly unpleasant things about the witnesses. I hope that stuff stays private.”

Friends from back then aren’t talking with one another about it — too toxic. https://t.co/mkEIJXPVfw

— Jennifer Jacobs (@JenniferJJacobs) September 29, 2018

Despite the dramatic footage teased to the media by Showtime, which recorded an interview with Michael Avenatti client Julie Swetnick, the third woman to publicly accuse Kavanaugh of sexual misconduct (she claimed that Kavanaugh and Judge participated in the “gang rapes” of disoriented young women at parties back in high school), NBC News and the Wall Street Journal reported Saturday afternoon that the White House has limited the FBI investigation to Ramirez and Ford, and has not permitted the FBI to interview Swetnick. While some accused the White House of “micromanaging” the FBI probe, and a spokesperson for the White House said the parameters of the investigation were actually set by the Senate, which said it wanted to limit the probe to only “credible” accusers, NBC reported that it isn’t unusual for the White House to set these types of boundaries for background-check investigations, since the FBI is conducting the investigation on behalf of the White House.

Avenatti was, understandably, less than pleased.

“I don’t know how this investigation could be called complete if they don’t contact her,” Avenatti said.

Here’s the teaser of the Swetnick interview, which is set to air Sunday night:

Regardless of what Ramirez tells the FBI – whether it’s stunningly revelatory or utterly mundane – we imagine it will leak to WaPo or the New York Times by mid-week.

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Just one day after the SEC sued Elon Musk for securities fraud, in a move that shocked many who were skeptical the US regulator would do anything more than slap a few wrists – an action which it took only after it emerged that Musk had turned down a settlement offer from the SEC in the last minute – Musk, having seen TSLA stock tank the most in three years on Friday, changed his mind once again, and agreed to settle the case.

According to a settlement filing posted on the case docket on September 29, the SEC settlement is on almost identical terms to the deal he had rejected as recently as Thursday morning: it will require Musk to step down for 3 years as Chairman (up from two years in the 1st deal), pay a $20 million fine, comply with Tesla’s mandatory procedures for how to tweet going forward, however it means he will be able to continue as the company’s CEO and return as Chairman after 3 short years.

As part of the deal, Musk will also neither admit nor deny guilt, effectively confirming that all those who were skeptical of the SEC’s regulatory interests, were correct after all as the settlement now makes any potential criminal case far more complicated.

In short: securities fraud will get most ordinary people thrown in prison, but if you can afford $20 million and temporarily losing a token title in your resume, you get away scott-free.

Here are the key sections in the settlement filing that hit the SEC vs Musk docket late on Saturday afternoon:

Without admitting or denying the allegations of the complaint (except as provided herein in paragraph 13 and except as to personal jurisdiction as to this matter only and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other things:

(a) permanently restrains and enjoins Defendant from violation of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];

(b) orders Defendant to pay a civil penalty in the amount of $20,000,000 under Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]; and

(c) requires Defendant to comply with the undertaking set forth in this Consent and incorporated in the Final Judgment

Here is what Musk will have to do next:

Defendant undertakes to:

(a) resign from his role as Chairman of the Board of Directors of Tesla, Inc. (“Chairman”) within forty-five (45) days of the filing of this Consent and agree not to seek reelection or to accept an appointment as Chairman for a period of three years thereafter. Upon request by Defendant, the Commission staff may grant in its sole discretion an extension to the deadline set forth above;

(b) comply with all mandatory procedures implemented by Tesla, Inc. (the “Company”) regarding (i) the oversight of communications relating to the Company made in any format, including, but not limited to, posts on social media (e.g., Twitter), the Company’s website (e.g., the Company’s blog), press releases, and investor calls, and (ii) the pre-approval of any such written communications that contain, or reasonably could contain, information material to the Company or its shareholders; and

News of the settlement could prompt another vicious round of short covering on Monday as the threat of Musk losing his CEO role at the company now appears to be gone.

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After a month of tense negotiations and with one day to go until the Sept. 30th deadline, the US and Canada are poised to announce a deal on Nafta in the last minute, ending the impasse that has jeopardized $500 billion in annual trade between the two North American neighbors, Bloomberg reports citing people familiar with the talks.

The reason for the scramble – which also includes a “heavily involved” Justin Trudeau as well as Jared Kushner – to announce a deal by Sunday is so that it can be signed by Mexican President Enrique Pena Nieto before he leaves office, one month after the U.S. and Mexico reached their own bilateral agreement, triggering talks between the U.S. and Canada, which are being held around the clock this weekend. Under U.S. trade law, an agreement must be published for 60 days before it can be signed by leaders of any of the participant countries, putting negotiators on the clock to reach a deal that can be signed by Nov. 30, Pena Nieto’s final day in office.

So who “bent the knee?”

While the final document has yet to be published, the Globe and Mail reports that the Trump administration was ready to concede to Canada’s wish to keep Chapter 19′s dispute-settlement mechanism in place in exchange for greater access for U.S. dairy products.

Canada is prepared to allow U.S. dairy into Canada at rates that are higher than the 3.2 per cent under the eleven country Trans-Pacific partnership, sources said. Ottawa also made concessions on section 7, which is part of the country’s milk classification system that is used to set prices for skim milk, whole milk powder and protein concentrates. Canada was also ready to agree to the same arrangement as Mexico to raise its duty-free limit to $100, according to a source. Canada’s duty free is currently $20.

A senior Canadian official involved in the talks said there is no final written sign-off on Chapter 19 or dairy access but the insider said the two sides are close to a deal.

The talks had taken on a frenetic pace over the last 24 hours with Jared Kushner, the son-in-law of President Donald Trump, pushing for a deal before Sunday’s deadline to start a 60-day countdown to a final revamped pact being signed by the end of November.

While the two sides held off a plan to public the legal text of the agreement on Friday, the U.S. and Canada, which is the main export partner for the vast majority of US states, have reportedly solved, or made progress on the major outstanding issues, with sources saying that “at this stage no issue seems too large to overcome.”

“Most of the big issues are solved with Canada”, Trump trade adviser Peter Navarro said Saturday in an interview with Fox News. “It’s a great deal for all three countries in that it would make this hemisphere strong again from a manufacturing point of view.”

Meanwhile, at least one Canadian government official familiar with the talks, poured some cold water on the rising enthusiasm and said the nations had been at this stage before, and that nothing is final. Specifically, Canada’s demands for protection from U.S. tariff measures is one of the last sticking points in negotiations.

Some of the major outstanding hurdles that have blocked a deal, include:

• So-called Chapter 19 dispute panels, which the U.S. wants to eliminate from Nafta and which Canada wants to preserve
• An exemption for cultural sectors which Canada wants to preserve
• The use of Section 232 investigations to apply tariffs to steel, aluminum, and potentially autos. Canada is seeking some kind of exemption or protection from those
• Canada’s dairy sector, which the U.S. wants greater tariff-free access to
• Intellectual property and certain pharmaceutical patents, each of which the U.S. wants to extend

Of the above, The globe reports that the key item is U.S. negotiators’ unwillingness to remove 25% tariffs imposed on Canadian steel and aluminum.

A failure to real a deal in the next 24 hours could also jeopardize the already concluded deal between the US and Mexico, as any bilateral deal without Canada would face delays in Congress, where key lawmakers have called for the three-nation format to continue.

Meanwhile, the existing Nafta remains in effect, and any country can quit on six months’ notice; no country has given such notice.

Ultimately, the failure to reach a deal raises the prospect of what some call a zombie Nafta – a bilateral deal advancing to update a trilateral pact, even while the old agreement remains in place. A former senior Canadian trade adviser warned that the auto tariff threat, which would be “devastating” to the Canadian economy, outweighs anything else.

“The threats to Canada are much bigger than a potential zombie Nafta; the threats come in the form of auto tariffs that would be very devastating to our economy,” said Meredith Lilly, trade adviser to Canada’s former prime minister, Stephen Harper, and now Simon Reisman Chair in International Affairs at Carleton University in Ottawa. “The risk of auto tariffs shouldn’t be underestimated.”

Trump has repeatedly threatened to slap Canada with auto tariffs if Ottawa refuses to negotiate. If a Nafta deal is reached, the U.S. government would see little reason to impose auto tariffs on Canada, but it was unclear whether there would be any hard exemption granted. Of course, if over the next 24 hours a deal is announced, all of the above would be moot and Trump’s unorthodox negotiating style will have successfully resolved yet another major trade milestone.

The globe reports that there are tentative plans for Trudeau and Foreign Affairs Minister Chrystia Freeland to hold a news conference announcing a deal either Sunday night or Monday morning if there is a successful conclusion, but an “insider” cautioned the talks are still ongoing and Kushner and Robert Lighthizer still have to get sign off from President Trump; that in itself, can be “problematic.”

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Former Trump strategist Steve Bannon said on Friday that attorney Michael Avenatti could become the Democratic nominee for president in 2020. 

Speaking with Bill Maher about the state of the Democratic party, Bannon agreed with the HBO host that Avenatti – lawyer to porn star Stormy Daniels and Judge Brett Kavanaugh’s “gang rape” accuser – can capture the left with his bravado and plain spoken language.

“The guy who’s the outsider, who like blows through the regular politician because he looks different and he’s got balls,” said Maher – to which Bannon replied: “If Bernie Sanders had an ounce of Avenatti’s fearlessness, he would have been the Democratic nominee and we would have had a much tougher time beating him.” 

“Bernie doesn’t have fearlessness?” asked Maher.

“Not like Avenatti,” Bannon replied. “I’ve not done any due diligence on this guy, but I tell you he’s got a fearlessness and he’s a fighter. I think he’ll go through a lot of this field if he decides to stick with it.“

“I don’t happen to think a professional politician is going to be there at the end of the day. I’ve always said it’s going to be an Oprah or an Avenatti — somebody who’s more media savvy,” said Bannon. 

“You’re gonna have Trump on the right, a politician, maybe a Kamala Harris or somebody on the left, and I think you’ll have a Bloomberg or a Romney or somebody in the center,” Bannon concluded. “I think it will be a three-way race.”

Watch: 

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Authored by Whitney Webb via Mint Press News

The transparency organization WikiLeaks just released a new document that sheds light on the corruption behind a lucrative French-German arms deal with the United Arab Emirates (UAE), weapons that are currently being used to wage a disastrous and genocidal war against the people of Yemen.

The document details a court case from the International Chamber of Commerce (ICC) International Court of Arbitration regarding a dispute over a “commission payment” made to Abbas Ibrahim Yousef Al-Yousef, an Emirati businessman, as part of a $3.6 billion arms deal between France’s state-owned weapons company Nexter Systems (then GIAT Industries SA) and the UAE. Per the deal, which was signed in 1993 and set to conclude in 2008, the UAE purchased 388 Leclerc combat tanks, 46 armored vehicles, 2 training tanks, and spare parts, as well as ammunition.

Those weapons have been an important part of the UAE and Saudi coalition’s war in Yemen since it began in 2015. The war has killed over ten thousand civilians, largely the result of the Saudi/UAE bombing campaign, which has targeted and crippled the country’s civilian infrastructure. The result of those bombings, as well as of the UAE/Saudi blockade of Yemen, has been over 17 million people near starvation – including 5.2 million children – and preventable disease epidemics that have claimed tens of thousands of additional lives.

The court case described in the leaked document resulted from a claim made by Al-Yousef that Nexter Systems had failed to honor its commitment to pay him a 6.5 percent commission fee on the arms deal, amounting to a $235 million dollars. Nexter Systems made payments regularly for a period of time to the Emirati businessman, totalling over $195 million, through Al-Yousef’s company, Kenoza Consulting & Management Inc. Al-Yousef demanded that the company pay him the nearly $40 million that remained outstanding.

However, subsequent arguments from Nexter Systems’ lawyers asserted that payments stopped because of French anti-corruption legislation enacted in 2000, and that Al-Yousef’s business “intended to commit and indeed committed corruption acts.” Nexter Systems effectively claimed in court that the exorbitant “commission fee” given to Al-Yousef was for the use of bribing government officials of the UAE and apparently other countries so that Nexter Systems could secure the $3.6 billion weapons contract. However, the ICC tribunal did not rule on this point, as they claimed that Nexter’s proof for this allegation lacked sufficient evidence.

Yet, the tribunal did seek to determine why Al-Yousef had been able to justify the excessive commission fee, especially considering that he did not play an important role in the development of the Leclerc tanks. In investigating this point, the tribunal found that Al-Yousef had convinced German officials to waive Germany’s then-ban on providing German-made weapons to Middle Eastern nations like the UAE — a necessary step, as the Leclerc tanks were fitted with German engines.

RELEASE. Dealmaker: Secret ruling by ICC arbitration court on alleged corruption linked to $3.6 billion French/German/UAE arms deal. https://t.co/GLQTyaZBdV pic.twitter.com/cfoP80LN8t

— WikiLeaks (@wikileaks) September 28, 2018

According to Al-Yousef’s witness statements, the way in which he obtained this waiver “involved decision-makers at the highest levels, both in France and Germany,” though Al-Yousef failed to remember the names of the German officials and claimed to have not met them directly.

The tribunal ultimately determined that there was no good reason for Al-Yousef’s exorbitant commission fee. Yet, the arguments from Nexter Systems as well as the statements from Al-Yousef himself regarding his “lobbying” of anonymous German officials, suggest that the approximate payment of $190 million was indeed used to commit “corruption acts.”

That was then, that is also now

Though the corruption detailed in the newly leaked document took place decades ago, it highlights how lucrative arms deals are often enough incentive for governments and private companies to bend the rules in order to ensure that weapons and payments for weapons continue to flow unimpeded.

France today – despite the gravity of the Yemen conflict and the clear involvement of the UAE and Saudi Arabia in committing war crimes – continues to supply the UAE/Saudi coalition with weapons, even though doing so violates its own laws. Indeed, a recent report published by French law firm Ancile Avocat asserted that France’s continued sale of weapons to the two Gulf countries responsible for the carnage and chaos in Yemen was a violation of France’s status as a signatory of the International Arms Trade Treaty, ratified in 2014.

Since the conflict in Yemen began, France’s government has argued that the UAE and the Saudis are using those weapons for “defensive purposes,” despite clear evidence to the contrary, suggesting that the French government is willing to turn a blind eye to the atrocities in Yemen in order to keep the weapons — and cash – flowing.

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