Three Market Factors Which Citi Says Are Worse Now Than In 2007

When it comes to the current state of the market, everyone knows – whether they admit it or not – that it is broken. And we aren’t talking HFT which while rigging price discovery, generally does so on a microburst momentum basis which at most lasts for the duration of the trading day. The real culprit of the broken market is the Fed, a Fed which as we have explained over the years, is simply seeking to compensate for the collapse in stock (and flow) from the unwind of shadow banking which was nearly crushed in the days after Lehman.

Citigroup’s Stephen Antczak admits as much: “QE has obviously created a huge distortion in the marketplace, pushing risk-free rates and risk premiums well through many “fair value” metrics. But that said, doesn’t every credit cycle seem to have distorting factors of some sort? For example, one can easily argue that back in the pre-Lehman era the shadow banking system was every bit as much of a distorting influence as QE is now. (Shadow banking is defined as forms of intermediation that create credit without being subject to regulatory oversight, i.e., unlisted derivatives, hedge funds, etc.)”

However, the silver lining at least to Citi, is that while massive Shadow Banking, peaking at over $20 trillion in 2008, was inherently unstable and subject to liquidity runs (which did in fact happen in September 2008 when first money markets, and then other shadow conduits, froze up), the Fed is far more stable. Antczak’s amusingly quips that “we are not going to see a BWIC from the Fed anytime soon.” Which to be sure is yet another “certainty” among the economist community – just like every economist saw the US economy picking up in 2014, and 67 out of 67 economists polled in April expected higher bond yields in 6 months. If there is one thing we know about a unanimous opinion share by economists is that it is always wrong. All we have to say here is: “subprime is contained“, and, “housing prices can not possibly ever go down.” Nuf said.

But let’s ignore the “improbable” end game unwind for the time being.

A more practical concern, and one which Citi’s credit guru Stephen Antczak focuses his attention on, are the factors that in 2014 are as bad as or worse than during the heyday of the last credit bubble in 2007.

Here they are:

1. Valuations

With regard to valuations, spreads are still north of the levels seen in ’07 in an absolute sense, but to a large extent the extra spread represents compensation for factors that have evolved since ’07. These factors include higher dollar prices (typical HG non-fin trades at $109 now vs. $103 in early ’07) and lower liquidity, among others. After adjusting for such factors, spreads in many parts of the market are more or less equivalent to ’07 levels.

In fact, it is not all that difficult to find names that now trade through ’07 levels. IBM on-the-run 10-years are trading at 76 bp, or 7 bp through ’07 levels (in OAS terms). And KO 10-year benchmarks are now at 65 bp, or 13 bp through ’07 levels (Figure 2).

But for those of you who worry that these examples may be the exception rather than the rule, we looked at the distribution of the spread change of name matched on-the-run 10-year bonds since Jan ’07 (Figure 3). It’s almost shocking that the proportion of credits that are tighter now than they were in ’07 is only a hair shy of the proportion of those that are wider. What this tells us is that it wasn’t really all that hard to find names like IBM and KO – pick out of a hat and 1 in every 2 are trading through ’07 spreads.

2. Liquidity

Liquidity, defined as the bid / ask for a given trade size, is far less ample now than it was in the pre-Lehman era. This is in part due to how dramatically dealer balance sheets have shrunk — back then dealer B/S totaled almost 4% of corporate bonds outstanding, relative to only 1% now (Figure 4).

But that said, it’s very easy to overlook how problematic liquidity was back then. The reason is because everyone seemed to take abundant liquidity as a given back then, and trading strategies were based on this expectation — negative basis trades, CPDOs, SIVs, leveraged loans in TRS form, etc. all fit this profile. But this is certainly not the case anymore. In fact, if investors assume anything about liquidity at this stage, it’s that it won’t be there when it’s needed, in our view. And investment strategies have been adjusted accordingly.

To illustrate in real world terms, consider the triple-A CLO market then vs. now. In early ’07 triple-A CLOs traded in a 1 to 2 cent market for sizes in the 10 mm to 20 mm range. Now the bid / ask is about 25 cents for the same size. So in this context the advantage obviously goes to ’07. But as we know, the ability to actually transfer risk in ’07 at these levels was fleeting.

Figure 5 shows that the typical triple-A fell over 30 pts when the banks prop books that owned the vast majority of this “liquid” paper had to unwind their positions and a new buyer had to be discovered. Conversely, the biggest downturn in recent years was approximately -$2.2 pts.

 

3. Rates

Treasury yields are low and the consensus expectation is that they will rise at some point. The problem is that mutual fund holdings of corporate bonds are higher now than they have ever been — 15% of the market (Figure 6) — and if outflows occur in response they could overwhelm dealer balance sheets.

We did not have this problem in ’07 for three reasons. First, rates were higher than they are now (they averaged 4.6% then vs. 2.7% now), so it wasn’t a given that yields would move higher. Second, mutual funds only accounted for 8% of the corporate market, about half as much as now. Third, as noted above, dealer balance sheets were much larger, providing more cushion for risk transfer activity.

But that said, how much pressure could we see as a result of a rates-induced selloff? We built a framework to estimate mutual fund flows given various Treasury yields, and we find that a yield of 3.5% by year-end would cause an  outflow of about $15 bn. Certainly not good, but potentially manageable, in our view.

* * *

Among the factors that Citi doesn’t think are as bad as they were in 2007 are corporate leverage (which is ironic because as we won’t tire of showing, corporate leverage has never been higher), Investor Leverage (before one agrees, take a quick look at this chart of Prime Broker-enabled hedge fund leverage), and Treasury Curves (considering the Fed is sitting on the front end, if only until the time of the “dots” arrives, we wouldn’t assign much value to yet another manipulated metric). 

But all of the above is completely meaningless in its own factual vacuum: at the end of the day all that matters is what traders and investors think and believe. And a perfect indicator of what said belief is, we paraphrase a statement a Portfolio Manager made to Citi:

“You’re picking up pennies on a train track. You are not getting paid much but you are sure that there will be a very negative surprise at some point. The risk / reward profile is as bad as ’07.”

Judging by recent comments by such hedge fund luminaries as David Tepper this is increasingly the norm. Which is why anyone expecting the same 30% return in 2014 as in 2013, will certainly be very disappointed on December 31 of this year.




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The FCC Issues its Proposal on Net Neutrality as Protesters Are Tossed from Hearing

As spring unfolds here in the Northern Hemisphere, the future of the free and open Internet hangs in the balance. As such, I strongly believe everyone should have at least some understanding of what is at stake. When most people hear or read the words “net neutrality” their eyes glaze over with a feeling of confusion and despair: “I can’t remember, am I supposed to be for or against this?” This is exactly how the lawyers and lobbyists in D.C. want it, but unless the citizenry is informed we could lose the most important weapon of free speech in the history of mankind.

Recognizing the convoluted nature of the subject, I did my best to lay out what “net neutrality” is and what is at stake with the current FCC rule-making process in my recent post: Say Goodbye to “Net Neutrality” – New FCC Proposal Will Permit Discrimination of Web Content.

Well the FCC voted on its proposal yesterday and it passed with a 3-2 vote. More on that later, first I want to share an article I recently read on The Verge, which is extremely important to understand before you form an opinion on what should be done.

The first buzzword you need to familiarize yourself with is “Title II regulation.” Title II refers to a key section of the Communications Act, which has to do with the classification of telephone providers as “common carriers,” and subjects them to increased regulation and oversight. When the Communications Act was updated in 1996, it appears that broadband providers would not be deemed “common carriers,” which would allow them to be largely unregulated. Yet, Verizon decided it wanted to be regulated under Title II when building out its broadband network. Why would it do this?

It turns out that building a huge broadband network isn’t cheap, and being more “regulated” actually gave Verizon a tremendous cost advantage. Verge notes that: “Title II designation gives carriers broad power to compel other utilities — power, water, and so on — to give them access to existing infrastructure for a federally controlled price, which makes it simpler and more cost-effective for cables to be run.

Here’s the really despicable thing. Now that Verizon has used Title II to build out much of its network, it now wants to turn around and play unregulated entity when it comes to pricing services that it built out under the guise of it being a heavily regulated business. You can’t make this stuff up. More from The Verge:

At issue is how (or if) the FCC will protect the internet’s openness, free of special treatment and data “fast lanes” offered to the highest bidders. And while Verizon, Comcast, AT&T, and others have been clamoring to prevent heavy regulation from being considered this week, it turns out that communications providers have actually been working the system for years, using exactly this kind of regulation to their advantage. In fact, strict FCC rules have helped Verizon build a largely unregulated network — a network that’s valued in the tens of billions of dollars.

Today New York’s Public Utility Law Project (PULP) published a report, authored by New Networks, which contains previously unseen documents. It demonstrates how Verizon deliberately moves back and forth between regulatory regimes, classifying its infrastructure either like a heavily regulated telephone network or a deregulated information service depending on its needs. The chicanery has allowed Verizon to raise telephone rates, all the while missing commitments for high-speed internet deployment.

continue reading

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Mapping The “Scalpel, Not A Meat Axe” Approach To US Sectoral Sanctions Against Russia

The threat of “sectoral” sanctions is the latest arrow in America’s quiver against Russia’s unwillingness to back off and, as the FT reports, the US is seeking support from Europe for these efforts. The problem, as we have discussed, is that energy binds Russia to the rest of the world in a codependent relationship. Consumers – especially in Europe – need Russian oil and gas as much as Russia needs the revenue they bring in. The US believes it can circumvent that obstacle as “the situation calls for a scalpel, not a meat axe… we need targeted asymmetric sanctions that hurt them more than they hurt us.”

As The FT explains, the plan is to block exports of oil and gas technology only for new projects run by state-controlled companies, with the objective of casting the long-term future of Russia’s energy industry into doubt, while safeguarding its short-term contribution to global fuel supplies. In other words, do you believe in miracles?

 

 

As the US looks for levers to exert influence over Russia, energy is an obvious choice. Oil and gas generate more than 50 per cent of Russian federal government revenues, and Rosneft and Gazprom, the country’s two largest energy companies, are both state controlled.

 

The problem is that energy binds Russia to the rest of the world in a codependent relationship. Consumers – especially in Europe – need Russian oil and gas as much as Russia needs the revenue they bring in.

 

The energy sanctions being proposed by the US are intended to circumvent that obstacle.

The plan is to block exports of oil and gas technology only for new projects run by state-controlled companies, with the objective of casting the long-term future of Russia’s energy industry into doubt, while safeguarding its short-term contribution to global fuel supplies.

 

“This situation calls for a scalpel, not a meat axe,” says Robin West of the Center for Strategic and International Studies. “We need targeted asymmetric sanctions that hurt them more than they hurt us.”

 

By allowing continued exports of oil and gas equipment and services to Russia’s existing oil and gasfields, the proposed sanctions should make very little difference to the country’s energy exports.

 

 

However, blocking exports of equipment and services for new projects could have a “very meaningful impact on Moscow”, according to Jason Bordoff of Columbia University’s Center on Global Energy Policy.

 

 

The sanctions would not send Russia’s oil and gas production into an immediate slump, but over time the natural decline of existing fields would depress the country’s output.

 

 

The uncertainty over Russia’s long-term prospects in oil and gas would probably also depress the share prices of Rosneft and Gazprom.

Which all sounds great in practice. But do they really think Putin will stand for this? And will the Europeans agree?

The US is seeking support from European countries for its plan, but that may not be necessary.

 

The tricky question will be what to do if the Ukraine crisis drags on. As time passes and the effect on Russia’s output grows, the strains on world energy markets will become more noticeable, potentially driving up prices for oil and gas.

As Mr Bordoff warns/concludes:

“In a global economy, each of these actions may also come at a cost to the countries imposing the sanctions that needs to be considered.”

Sure – what could go wrong?




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Spying Is Meant to Crush Citizens’ Dissent, Not Catch Terrorists

Preface: NSA Lied When It Said It Doesn’t Record Content

Last week, Washington Post reporter Barton Gellman –  who has reviewed many of the documents leaked by Ed Snowden – told PBS’ Frontline:

Who’s e-mailing whom? Who’s texting whom? Who’s doing Skype calls with whom? They’re collecting a lot of information, a lot of content of phone calls. They’re actually recording the voices— not for all of our calls, but for a lot of U.S. telephone calls.

Background.

Okay, now you're ready for the main story …

Spying Is Meant to Crush Citizens’ Dissent, Not Catch Terrorists

While many Americans understand why the NSA is conducting mass surveillance of U.S. citizens, some are still confused about what’s really going on.

In his new book, No Place to Hide, Glenn Greenwald writes:

The perception that invasive surveillance is confined only to a marginalised and deserving group of those “doing wrong” – the bad people – ensures that the majority acquiesces to the abuse of power or even cheers it on. But that view radically misunderstands what goals drive all institutions of authority. “Doing something wrong” in the eyes of such institutions encompasses far more than illegal acts, violent behaviour and terrorist plots. It typically extends to meaningful dissent and any genuine challenge. It is the nature of authority to equate dissent with wrongdoing, or at least with a threat.

 

The record is suffused with examples of groups and individuals being placed under government surveillance by virtue of their dissenting views and activism – Martin Luther King, the civil rights movement, anti-war activists, environmentalists. In the eyes of the government and J Edgar Hoover’s FBI, they were all “doing something wrong”: political activity that threatened the prevailing order.

 

The FBI’s domestic counterintelligence programme, Cointelpro, was first exposed by a group of anti-war activists who had become convinced that the anti-war movement had been infiltrated, placed under surveillance and targeted with all sorts of dirty tricks. Lacking documentary evidence to prove it and unsuccessful in convincing journalists to write about their suspicions, they broke into an FBI branch office in Pennsylvania in 1971 and carted off thousands of documents.

 

Files related to Cointelpro showed how the FBI had targeted political groups and individuals it deemed subversive and dangerous, including the National Association for the Advancement of Colored People, black nationalist movements, socialist and communist organizations, anti-war protesters and various rightwing groups. The bureau had infiltrated them with agents who, among other things, attempted to manipulate members into agreeing to commit criminal acts so that the FBI could arrest and prosecute them.

 

Those revelations led to the creation of the Senate Church Committee, which concluded: “[Over the course of 15 years] the bureau conducted a sophisticated vigilate operation aimed squarely at preventing the exercise of first amendment rights of speech and association, on the theory that preventing the growth of dangerous groups and the propagation of dangerous ideas would protect the national security and deter violence.”

 

These incidents were not aberrations of the era. During the Bush years, for example, documents obtained by the American Civil Liberties Union (ACLU) revealed, as the group put it in 2006, “new details of Pentagon surveillance of Americans opposed to the Iraq war, including Quakers and student groups“. The Pentagon was “keeping tabs on non-violent protesters by collecting information and storing it in a military anti-terrorism database”. The evidence shows that assurances that surveillance is only targeted at those who “have done something wrong” should provide little comfort, since a state will reflexively view any challenge to its power as wrongdoing.

 

The opportunity those in power have to characterise political opponents as “national security threats” or even “terrorists” has repeatedly proven irresistible. In the past decade, the government, in an echo of Hoover’s FBI, has formally so designated environmental activists, broad swaths of anti-government rightwing groups, anti-war activists, and associations organised around Palestinian rights. Some individuals within those broad categories may deserve the designation, but undoubtedly most do not, guilty only of holding opposing political views. Yet such groups are routinely targeted for surveillance by the NSA and its partners.

 

One document from the Snowden files, dated 3 October 2012, chillingly underscores the point. It revealed that the agency has been monitoring the online activities of individuals it believes express “radical” ideas and who have a “radicalising” influence on others.

 

***

 

The NSA explicitly states that none of the targeted individuals is a member of a terrorist organisation or involved in any terror plots. Instead, their crime is the views they express, which are deemed “radical“, a term that warrants pervasive surveillance and destructive campaigns to “exploit vulnerabilities”.

 

Among the information collected about the individuals, at least one of whom is a “US person”, are details of their online sex activities and “online promiscuity” – the porn sites they visit and surreptitious sex chats with women who are not their wives. The agency discusses ways to exploit this information to destroy their reputations and credibility.

 

The NSA’s treatment of Anonymous, as well as the vague category of people known as “hacktivists”, is especially troubling and extreme. That’s because Anonymous is not actually a structured group but a loosely organised affiliation of people around an idea: someone becomes affiliated with Anonymous by virtue of the positions they hold. Worse still, the category “hacktivists” has no fixed meaning: it can mean the use of programming skills to undermine the security and functioning of the internetbut can also refer to anyone who uses online tools to promote political ideals. That the NSA targets such broad categories of people is tantamount to allowing it to spy on anyone anywhere, including in the US, whose ideas the government finds threatening.

Greenwald told Democracy Now yesterday:

People are aware of J. Edgar Hoover’s abuses. The nature of that series of events is that the United States government looks at people who oppose what they do as being, quote-unquote, “threats.” That’s the nature of power, is to regard anybody who’s a threat to your power as a broad national security threat.

 

***

 

There has already been reporting that shows that—the document, for example, in the book that shows the NSA plotting about how to use information that it collected against people it considers, quote, “radicalizers.” These are people the NSA itself says are not terrorists, do not belong to terrorist organizations, do not plan terrorist attacks. They simply express ideas the NSA considers radical. The NSA has collected their online sexual activity, chats of a sexual nature that they’ve had, pornographic websites that they visit, and plans, in the document, on how to use this information publicly to destroy the reputations or credibility of those people to render them ineffective as advocates. There are other documents showing the monitoring of who visits the WikiLeaks website and the collection of data that can identify who they are. There’s information about how to use deception to undermine people who are affiliated with the online activism group Anonymous.

Recent stories show that Greenwald is right:

And it’s not just spying …

The government may treat anyone who challenges its policies as terrorists.  For example:

The indefinite detention law may be used against American dissenters. Specifically, the trial judge in the lawsuit challenging the law had asked the government attorneys 5 times whether journalists like Pulitzer prize-winning reporter Chris Hedges could be indefinitely detained simply for interviewing and then writing about bad guys.   The government refused to promise that journalists like Hedges won’t be thrown in a dungeon for the rest of their lives without any right to talk to a judge.

Constitutional attorney John W. Whitehead writes:

No matter what the Obama administration may say to the contrary, actions speak louder than words, and history shows that the U.S. government is not averse to locking up its own citizens for its own purposes. What the NDAA does is open the door for the government to detain as a threat to national security anyone viewed as a troublemaker. According to government guidelines for identifying domestic extremists—a word used interchangeably with terrorists, that technically applies to anyone exercising their First Amendment rights in order to criticize the government.

Daniel Ellsberg notes that Obama’s claim of power to indefinitely detain people without charges or access to a lawyer or the courts is a power that even King George – the guy we fought the Revolutionary War against – didn’t claim.  (And former judge and adjunct professor of constitutional law Andrew Napolitano points out that Obama’s claim that he can indefinitely detain prisoners even after they are acquitted of their crimes is a power that even Hitler and Stalin didn’t claim.)

And the former top NSA official who created NSA’s mass surveillance system says, “We are now in a police state“.

 




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Cop Arrests Man For Complaining About Speeding Without a Siren—Caught on Video

they're from the government and they're here to helpCops in St. Louis County,
Missouri, arrested a man apparently for complaining about the speed
they were driving in the subdivsion—50 to 60 miles per hour
according to one witness and without his siren on according to
two—in an incident caught on video. The St. Louis
Post-Dispatch

reports
:

 [James] Schrader said Tuesday that he has health
conditions and the officer roughed him up. “He had no business
touching me,” said Schrader, who was booked on suspicion of
interfering with a police officer in performance of his
duty. 

After he was handcuffed, Schrader was complaining of a health
condition, so the officer took him directly to a hospital after the
arrest. Schrader said he was concerned for his safety during that
ride because the officer was texting while driving to the hospital
and driving recklessly.

Police say they were called to the area by paramedics for a
“suspected overdose.” Of that suspected overdose, police told the
Post-Dispatch only that no one died. A neighbor said he
called the police on the officer who made the arrest as soon as he
got out of his car, saying he had an “attitude.”

Video of the incident via the Post-Dispatch, below:

h/t Mark Sletten

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Guest Post: Meet The Man Who Killed Keystone

Submitted by Wendy McElroy via Mises Canada,

On May 12, the United States Senate fell 5 votes short of the 60 required to invoke cloture. (Cloture is a way to close debate and cause an immediate vote on a bill.) The measure in question was the first energy bill to have hit that chamber since 2007. It was killed by the Keystone XL Pipeline project which would funnel Canadian crude oil from Alberta down to Texas refineries.

Republicans wanted to add an amendment to approve the project. Democrats wanted a stand-alone vote on it; with Democrats in the clear majority in the Senate, the project would have probably been defeated. But if Keystone had been approved, President Obama would have almost certainly vetoed it. The end result: no bill at all, with or without an amendment. Keystone is dead in the Senate, at least until 2015 when the November 2014 elections may have reversed the balance of power. Of course, there is always that veto waiting in the wings.

The stakes were especially high for about a half-dozen Democrats who do not tow the anti-Keystone line of fellow Democratic Senators. The dissidents come from states that are dependent on the oil or gas industry; they are nervously facing a tough re-election battle in November 2014. One of them is the influential new chairman of the Senate Energy and Natural Resources Committee, Mary Landrieu of Louisiana. As the new chairman, she’s been campaigning for re-election on the promise of “getting things done,” which is clearly not the case.

One man stands in her way. No, not President Obama, but the billionaire environmentalist Thomas Steyer. The leftwing Steyer undoubtedly is sincere in his green beliefs but sincerity on an issue is easier if you also stand to make a fortune from it. The conservative Daily Caller (Nov. 8, 2013) noted, “Most of Steyer’s $1.4 billion fortune came through investments in fossil fuels. In fact, Steyer’s biggest cash cow is Farallon Capital Management. Farallon has stakes in a number of oil, gas and pipeline companies, including a large investment in Kinder Morgan, an oil and gas pipeline outfit that plans to expand its own TransMountain pipeline to transport oil from Alberta to refineries and shipping terminals in the U.S. and Canada.” (Steyer actually founded Farallon with $15 million in start-up money.)

Keystone threatens Steyer’s profits in several ways. A glut of Canadian oil would drive down energy costs in America, and the new supplier would be a competitor. But more than anything else, the method of supply would also compete with Steyer’s self-interest.

The Business Insider (June 17, 2013) observed that, if TransMountain’s “expansion is approved, TransMountain will be the only available outlet for Alberta crude. If Keystone XL is killed, it will leave TransMountain as the only game in town for transporting oil directly from the oil sands to export terminals, up to 900,000 barrels a day. And most of that oil will be shipped west to China.”

No wonder Steyer has not breathed a word of criticism about TransMountain, which is functionally the same as Keystone. No wonder he lobbied against the Northern Gateway pipeline which would take oil from Edmonton to the west coast. It, too, would compete with TransMountain.

Steyer does not speak of his own profit, however. When the Washington Post (April 22, 2014) compared Steyer to the conservative billionaire Koch Brothers, who donate millions toward election campaign, he reportedly “chuckled.” Then, he replied “Their policies line up perfectly with their pocketbooks, and that’s not true for us,” he said. “What we are doing is we are trying to stand up for ideas and principles that we think are incredibly important but have nothing to do with our incomes or assets.”

But, then, Steyer is used to misrepresenting facts. The Washington Post Fact Checker awarded Steyer four Pinocchios – its highest ‘honor’ – for the depth of his inaccuracy about Keystone. The proximate cause of the award was a 90-second ad, which he both funded and starred in. There he stated, “[a] vote for Keystone is a vote to raise gas prices on Americans and send the profits to a foreign oil company” even though more oil and more competition would almost certainly lower gas prices.

A 90-second ad, of which Steyer is the funder and star, claims that Keystone would create only 35 permanent jobs. And, yet, a 2000-page State Department study reported, “Including direct, indirect, and induced effects, the proposed Project would potentially support approximately 42,100 average annual jobs across the United States over a 1-to 2- year construction period (of which, approximately 3,900 would be directly employed in construction activities).” The State Department is a critic, not an advocate of Keystone.

Steyer backs up his misrepresentations with cold cash. A lot of it. For example, he reportedly poured $8 million into Democratic Gov. Terry McAuliffe’s re-election campaign. He funded the Virginia campaign for one reason alone; the governor’s rival was a notorious skeptic on global warming who would have backed Keystone. For $8 million, Steyer eliminated an opponent, bought a politician and impressed the remaining Democrats with political muscle he could flex on their behalf.

For 2014, Steyer has announced plans to use his advocacy group, NextGen Political Action, to funnel about $100 million into the campaigns of Democratic congressional candidates. PACs, such as those founded by Steyer, are political action committees that can legally raise an unlimited amount of money from entities such as corporations and individuals; within loose restrictions, the money can then be directed to a specific party or candidate.

The Washington Post commented on Steyer: “He’s quickly emerged as a new and much-needed source of campaign money for Democrats eager to find ways to match the rise of conservative donors who are using new super PACs to spend millions of dollars attacking congressional Democrats on the airwaves …”

How desperate are the Democrats for money? They are willing to literally sell the Senate floor. From the evening of March 10th through to the next morning, about 30 Democratic senators held a 15 hour speechathon to address “climate change.” The event was planned at Steyer’s home with such influential Democrat Senators as Majority Leader Harry Reid.

How much did the Senate cost? With the dangled $100 million divided by 15 hours, the Senate was for sale at approximately $6 million an hour.

Political commentators are openly speculating on what Obama will cost. Keystone has strong bipartisan and public support; and even two environmental analyses by the State Department couldn’t point to any major negative impact of the project. Nevertheless, as the Sunshine State News (Fla., April 25, 2014) reported: “Never mind the Kochs. After assessing who did what bad to America lately, I nominate Tom Steyer for the top of the list. Last week the billionaire hedge fund manager from San Francisco bought off the White House to the tune of $100 million in order to delay the Keystone XL pipeline decision.” But, then, Keystone has nothing to do with “incomes or assets”; it is all about “ideas and principles.”




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Elizabeth Nolan Brown on Prosecuting Pregnant Drug Users

The “crack baby” panic may have gone the way of the cassette
tape, but America’s womb-based war on drugs is alive and kicking.
Fueled by a potent mix of drug war propaganda and fetal rights
advocacy, states have been charging pregnant women who use
drugs—however casually or legally—with everything from child
neglect and “chemical endangerment” to contributing to the
delinquency of a minor and felony assault. 

The National Association for Pregnant Women warns of “an
increasing trend toward viewing pregnancy as a proper subject of
the criminal law.” Elizabeth Nolan Brown looks at how this trend is
hurting women, babies, and families in states across America.
 

View this article.

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Ukraine’s Richest Man Mobilizes Private ‘Army’ After Assets Threatened

Rinat Akhmetov – Ukraine’s richest man with an estimated worth of $11.4 billion – has, as Reuters reports, acquired almost feudal status in the industrial hub of Donetsk in the past 20 years – but the separatist rebellions there have altered the dynamics of power. This is not acceptable to the billionaire and so he has demanded his miners and metalworkers join police on patrol on Mariupol. As pro-Russian rebels declaring independence seized public buildings across the steel and coal belt which is the basis of his colossal fortune, he issued repeated written statements in support of a united Ukraine… but the media-shy 47-year-old, who has a workforce of 300,000 people on his payroll in the Donbass, has to tread carefully around local sensitivities and has avoided specifically condemning the action of the separatists.

 

Bloomberg summarizes his wealth…

The majority of Akhmetov’s wealth is derived from his stake in System Capital Management (SCM), a holding company that owns several Ukraine-based businesses. The most valuable are Metinvest, Ukraine’s largest steel manufacturer, and DTEK, a coal and energy business. SCM reported $32 billion in group assets and $23.5 billion in revenue in 2012.

 

 

 

The value of Metinvest fell 44 percent in fiscal year 2012, based on SCM financial results that were released in August 2013, a reflection of the declines seen across the steel industry. DTEK revenue increased 108 percent to $10.3 billion in 2012, following the company’s purchase of former state energy assets in 2011 and 2012 for $600 million. DTEK added almost $1.4 billion in net debt in 2012, which it intends to use to fund plant upgrades.

 

Akhmetov holds agricultural land through HarvEast and Ukrainian commercial real estate through ESTA Group. SCM has about $400 million invested in Ukrainian telecommunications (Vega Telecom and Astelit), banking (First Ukrainian International Bank) and heavy machinery (Mining Machines Company). It acquired a 92.79 percent stake in publicly traded Ukrtelecom, the largest fixed-line operator in Ukraine, in June 2013.

 

He also controls a number of closely held Ukrainian industrial assets, including Lemtrans, its largest private railway company, Portinvest, one of the country’s largest private stevedoring companies, Ukrainian Retail, which operates 99 stores under the brand name “Brusnichka”, Parallel-M, a network of 117 gas stations, Bank Renaissance Capital, ASKA and ASKA-Life insurance companies, Media Group Ukraine and Segodnya Multimedia, and United Mineral group, a clay extracting company.

As Reuters reports, in their overalls and hard hats, the latest additions to the heady mix of security forces in Ukraine are the first tangible sign the rebel east’s richest son is entering the fray.

Multi-billionaire Rinat Akhmetov’s miners and metalworkers joined police on patrol on Mariupol on Wednesday, cleared barricades of tires and pallets with diggers and heavy loaders and swept the debris from the gutted City Hall, ending the turmoil unleashed by the armed takeover of much of the region.

Though largely symbolic, the scene showed the extent to which the crisis has come to threaten the interests of Ukraine’s richest man and the lengths he will go to protect them.

Akhmetov, whose fortune is estimated by Forbes magazine at $11.4 billion, has acquired almost feudal status in the industrial hub of Donetsk in the past 20 years – but the separatist rebellions there have altered the dynamics of power.

But the media-shy 47-year-old Akhmetov, who has a workforce of 300,000 people on his payroll in the Donbass, has to tread carefully around local sensitivities and has avoided specifically condemning the action of the separatists.

 “That’s more 300,000 employees and their families – that’s a huge army.”

It is an army both the pro-Russian rebels and the government in Kiev would be rash to ignore.

“He has understood that his tactic of passive neutrality no longer works. He will have to become an active intermediary between separatists and the government,” Fesenko said.

“At the beginning he tried to influence events to try to get it under control to strengthen his position, but then he lost all control.

“We favor a united, whole Ukraine, a strong Ukraine with Donetsk in it. Everyone agrees power needs to be decentralized. But I repeat, that must be within a united state.”

Yet Fesenko wondered if Akhmetov has missed his moment.

“He has become more active. For the first time he has spoken out more concretely in the past few days. But the question is: Is it too late?” the analyst said.

“It will be difficult for him to influence the situation given what has happened in the past two weeks.”




via Zero Hedge http://ift.tt/1oxLbCJ Tyler Durden

The Top 12 Things That Bother American Drivers The Most

With Memorial Day rapidly approaching and the onset of summer – and the inevitable spike in the number of drivers on the road, Expedia decided to poll American drivers to understand what really pisses them off the most. The 2014 Road Rage Report ranks “The Texter” as the most aggravating driving behavior beating out “The Tailgater”. Perhaps most interestingly, 7 in 10 Americans report having been “flipped off” by a fellow motorist (while only 17% admitted to the aggressive act) and the rudest drivers live in the largest cities (71% rank NYC as the rudest).

Via The Expedia 2014 Road Rage Report:

The full list of driving behaviors ranked as “most annoying or offensive” includes (percentage identifies behaviors ranked in the top five):

The Texter (drivers who text, email or talk on a phone while driving): 69%

 

The Tailgater (drivers who follow others far too closely): 60%

 

The Multi-tasker (applying makeup, eating, reading, etc.): 54%

 

The Drifter (either straddling two lanes or weaving between them): 43%

 

The Crawler (driving well below the speed limit): 39%

 

The Swerver (failing to signal before changing lanes or turning): 38%

 

The Left-Lane Hog (drivers who occupy the passing lane without moving): 32%

 

The Inconsiderate (those who do not let others merge): 30%

 

The Speeder (driving well past the speed limit at length): 27%

 

The Honker (drivers who slam the horn at will): 18%

 

The Unappreciative (drivers who do not give a wave or gesture of thanks): 13%

 

The Red Light Racer (drivers who inch ever closer to the light when red): 12%

 

Despite the fact that Americans identify texting as the most offensive driving violator, 55% of Americans do admit to using their mobile phone at least some of the time while driving.

In addition, 70% of Americans also admit to having been guilty of aggressive driving behavior, including speeding (58%), tailgating (28%) and yelling and/or swearing at fellow drivers (28%). Men are only slightly more likely to admit to aggressive driving than women (74% to 67%).
  
The rudest drivers are found in the largest cities. 33% of Americans name New York City as home to the least courteous/most rage-inducing drivers. 71% of Americans put New York among the top five rudest driving cities. Los Angeles (22%) ranked second, while Atlanta (9%) came in third. Only 5% of Americans believe Boston features the country’s rudest drivers, but 27% of Americans place Boston in the top five.

62% of Americans believe 16 is too young to drive

85% of American drivers are “always pleasantly surprised” to receive a wave of thanks from a fellow driver

Classic rock is the preferred road trip music for 40% of Americans, followed by:

  • Country (28%)
  • Golden Oldies (25%)
  • Top Hits (24%)
  • Pop (23%)
  • Easy Listening (22%)
  • Hip Hop (15%)
  • Heavy Metal (10%)




via Zero Hedge http://ift.tt/1qIKkB5 Tyler Durden