John Bolton Confirms Willingness To Testify In Senate If Subpoenaed
Aftercongratulating those involved in the assassination of Iranian General Qasem Soleimani over the weekend:
“Long in the making, this was a decisive blow against Iran’s malign Quds Force activities worldwide,” he tweeted of the strike.
“Hope this is the first step to regime change in Tehran.”
Former national security advisor and uber-neocon John Bolton has issued a statement clarifying his intent to testify during the impeachment process if The Senate subpoenas him.
During the present impeachment controversy, I have tried to meet my obligations both as a citizen and as former National Security Advisor. My colleague, Dr. Charles Kupperman, faced with a House committee subpoena on the one hand, and a Presidential directive not to testify on the other, sought final resolution of this Constitutional conflict from the Federal judiciary. After my counsel informed the House committee that I too would seek judicial resolution of these Constitutional issues, the committee chose not to subpoena me. Nevertheless, I publicly resolved to be guided by the outcome of Dr. Kupperman’s case.
But both the President and the House of Representatives opposed his effort on jurisdictional grounds, and each other on the merits. The House committee went so far as to withdraw its subpoena to Dr. Kupperman in a deliberate attempt to moot the case and deprive the court of jurisdiction. Judge Richard Leon, in a carefully reasoned opinion on December 30, held Dr. Kupperman’s case to be moot, and therefore did not reach the separation-of-powers issues.
The House has concluded its Constitutional responsibility by adopting Articles of Impeachment related to the Ukraine matter. It now falls to the Senate to fulfill its Constitutional obligation to try impeachments, and it does not appear possible that a final judicial resolution of the still-unanswered Constitutional questions can be obtained before the Senate acts.
Accordingly, since my testimony is once again at issue, I have had to resolve the serious competing issues as best I could, based on careful consideration and study. I have concluded that, if the Senate issues a subpoena for my testimony, I am prepared to testify.
This noteworthy since, as Axios reports, “Bolton was a voracious note-taker, in every meeting,” said a source who attended numerous meetings with him. While others sat and listened in meetings with Trump, Bolton distinguished himself by filling legal pads with contemporaneous notes on what was said in the room.
Of course, the chances of The Senate subpoena-ing him are de minimus, but we are sure this will lead the news cycle now with Democratic talking points proclaiming, why would the Republicans not want him to speak if Trump was ‘clean’… Guilty!!
Legal action may be taken against the University of California-Berkeley after it released a document showing that mandatory diversity statements may have led to discrimination in hiring.
The six-page document analyzes the taxpayer-funded institution’s new focus on hiring job candidates based on “knowledge, past contributions, and/or future plans for advancing diversity, equity, and inclusion.” If candidates didn’t meet UC-Berkeley’s standards in this area, they weren’t hired.
The 2018-2019 summary report for the “Initiative to Advance Faculty Diversity, Equity and Inclusion in the Life Sciences” was written by two science professors, Mary Wildermuth and Rebecca Heald, who is also regional associate dean. They are co-chairs for the Life Sciences Initiative Committee.
Daniel Ortner, an attorney at the Pacific Legal Foundation, toldtwo academic blogs that he is “looking to challenge the University of California Policy.”
He wants anyone who was required to submit a mandatory diversity statement and not hired to contact him.
The policy has “several serious constitutional problems,” Ortner told The College Fix in an email.
He started looking into it when “[s]ome concerned UC professors” contacted him: “[T]he more I’ve looked into it the worse UC’s actions appear.”
When applicants are required to submit a diversity statement on their own experience, university reviewers would likely be able to tell the applicants’ race and gender, “allowing those factors to be taken into account,” Ortner said.
That is “contrary to California Proposition 209,” the 23-year-old ballot initiative that amended the state constitution, “and potentially the Equal Protection Clause” of the U.S. Constitution.
The Fix emailed and called Heald multiple times asking what hiring officials were looking for in diversity statements and what they meant by “past contributions” to diversity. She did not respond. Wildermuth did not respond to emails, and her office phone was disconnected.
Hispanic applicants were the big winners
The document says six Life Sciences departments in three colleges agreed to this initiative and will “incorporate interventions in all future faculty recruitments.”
Some departments have “met resistance by a small number of senior faculty members” to the initiative, Heald and Wildermuth noted. They did not list any names of such senior faculty members or respond to The Fix when asked to identify them.
“A Life Sciences Initiative (LSI) Committee was formed early in the fall of 2018 to implement the initiative and serve as the search committee for our joint open-field faculty recruitment,” the document states.
The committee met 19 times over the school year and was made up of 22 faculty and staff members from all departments. It discussed and implemented four interventions: building a critical mass, strengthening applicant pools, improving candidate evaluation processes, and institutional change.
Heald and Wildermuth included tables that show the percentage of each ethnicity and gender represented in the three hiring stages, from the full applicant pool to the intermediate “Longlist” and the final “Shortlist.”
University of Chicago biologist Jerry Coyne, whose blog often criticizes perceived attacks on academic freedom, shared his analysis of both tables.
In one of them, the “cluster search” across Life Sciences departments, Coyne observed that “the proportion of minorities increased” on both the long and short lists, except for Asian and Native Americans:
White males, who are supposed to be eliminated by this kind of search, were also significantly whittled away. In contrast, Hispanics and African Americans were considerably enriched, with the proportions on the final shortlist (interviewees) enriched by 4.5-fold and 3.25-fold respectively.
The cluster search first reviewed candidates for five full-time equivalent positions “based solely on contributions to diversity, equity and inclusion,” removing the names to reduce “unconscious bias in the evaluation processes.” Less than a quarter of nearly 900 applicants who met basic qualifications made it past this first review.
The cluster table showed whites were the narrow majority of the applicant pool but less than 14 percent of the short list. Men plummeted from an even larger majority of the applicant pool to a little over a third of the short list.
The only minorities to not substantially improve by the short list were Native Americans, of whom only three applied, and Asians, who fell slightly between long and short lists. Hispanics represented an even larger majority of the short list than whites had in the full applicant pool.
‘No matter how good your scholarship … you were toast’
“Limiting the first review to contributions in DE&I [diversity, equity and inclusion] is itself a dramatic change of emphasis in the typical evaluation process which generally focuses on primarily on research accomplishments,” the document says.
Heald and Wildermuth wrote that this was “one of the most successful interventions of the initiative.” They did not respond to The Fix when asked if there was a certain threshold for white candidates they would not go above, regardless of qualification.
Of eight department-specific searches, only the Environmental Science, Policy and Management department went through a similar process in hiring as the pan-department cluster search.
The ESPM demographics table shows every minority represented on the short list. Whites were nearly three in five applicants in the pool as well as a majority of the long list, but none made the short list. Men also dropped to a minority on the short list.
To “strengthen” applicant pools, participating departments specifically mentioned commitments to diversity in their ads for candidates and encouraged specific potential candidates to apply. Finalists were required to meet with department equity advisors “and/or with a student panel” in on-campus interviews, in another change. Among “institutional changes,” additional funding has been set aside for incoming faculty “to support their DE&I efforts.”
By imposing “a cutoff for diversity from the outset,” the hiring practices showed that diversity was “actually the most important criterion for a search to proceed further,” the University of Chicago’s Coyne wrote on this blog. “No matter how good your scholarship, if you didn’t pass the diversity cutoff … you were toast.”
Philosopher Brian Leiter, a colleague of Coyne’s at the University of Chicago, also promoted lawyer Ortner’s search for rejected UC-Berkeley candidates to challenge the policy in court.
Leiter compared the mandatory diversity statements to “McCarthy-era loyalty oaths” and said “not just any means are acceptable for promoting worthy ends.” For example, an explicit ban on hiring whites would also be a “diversity-promoting hiring practice.”
Forced ideology over treating students fairly
The university’s practices lead to “viewpoint discrimination by saying that any applicant who expresses views critical of affirmative action and diversity programs will receive a low score on their contribution to diversity statement,” the Pacific Legal Foundation’s Ortner told The Fix.
Another problem is that “research interests are being scrutinized,” meaning that research pertaining to diversity will automatically get a better score. “[I]t will be difficult for a professor expressing more conservative economic or social policies to be hired,” he said.
“Mandated diversity statements impose ideological conformity on the faculty,” Ortner wrote in a Daily Caller essay.
They weed out prospective hires who do not share “the university’s orthodoxy surrounding diversity and inclusion,” even if they treat “all students fairly.”
Coyne agrees with Ortner that the professed “blind” evaluation of job candidates likely did not apply to minority candidates, because their identities “would have been clear, I suspect, from the diversity statements alone.”
This initiative is “chilling” as a “specific form of social engineering” that privileges race and sex over other forms of diversity, such as class and political viewpoint, the biologist said. It goes far beyond affirmative action, which he supports, and into the realm of “ideology”:
By hiring large numbers of deans and administrators whose job is to promote initiatives like the above, colleges like Berkeley have guaranteed that this kind of process will only get more onerous and more invidious.
The price of gold is up nearly $100 since Christmas, reaching around $1,575 per troy ounce as I write this letter.
This most recent price bump is due to the panic over Iran. But the gold price is up nearly 20% over the last year, so there have obviously been plenty of other factors driving the price higher before the Middle East started flaring up again.
And there will be plenty more after these tensions cool down.
Trade wars, economic crisis in China, Bolshevik nonsense in the US, Brexit woes… the world is definitely not lacking in major issues that could continue to drive gold prices higher.
Throughout history there have always been periods of relative calm and stability, followed by periods of chaos and uncertainty.
The 1960s were incredibly chaotic, for example. Riots, assassinations, war, etc. were the dominant stories of the time.
By comparison, the 1990s were relatively calm. Peace and prosperity reigned. And life was so easy that the biggest problem of the decade was Bill Clinton’s love stain.
We seem to be sliding head-first into another period of turmoil (though I would argue that we’ve been there for a few years).
Stability is gone. Trade wars, shooting wars, terror attacks… pretty much everything is back on the table now.
Bolshevik politicians are taking hold all over the world, even in places like the United States, where, only a few years ago, it would have been considered preposterous for a socialist candidate to run for President.
Now there’s more than a dozen.
Most of all, the Social Contract is breaking down; people everywhere are becoming angry and unglued. We’ve seen it in the streets in places like Hong Kong, Spain, Chile, Lebanon, France, etc. And we see it every single day in social media.
People are demanding change and revolution in everything from our basic system of economics, down to the very words we can and cannot use.
This is all part of a level of conflict and turmoil we haven’t seen in decades, and it’s possible we’re just in the early stages.
I somehow doubt that all of these woke social justice warriors will suddenly capitulate their war on gender pronouns, or that Bolshevik presidential candidates will abandon their Marxist ideology and embrace the free market.
Now, don’t get me wrong… I’m not suggesting this is the winter of our discontent. I’m incredibly optimistic about the world and it’s opportunities.
But I sure am glad that I own some gold.
It’s not the fact that the gold price is up $100 in a month, or that precious metals have performed very well as an asset class. (Silver is up 21% in the last six months alone.)
The investment benefits are a nice bonus. But the real value of gold is that it’s one of the best things to own in times of turmoil and uncertainty.
Gold is a global asset with a 5,000+ year history of value and marketability. It’s a hedge… an asset you can rely on when you can rely on little else.
In many respects it’s like a life insurance policy… with the added cherry-on-top that you don’t have to be dead to benefit from it. And your gold dealer is probably not going to give you prostate exam first.
I know this is the time of year where people make all sorts of predictions about what’s going to happen in the year ahead.
Frankly I don’t think anyone can credibly say that they have any idea what’s going to happen in the world in 2020. And that’s why I own gold.
US Slams Russia, China For Blocking UN Statement On Baghdad Embassy Attack
More international fall out after the US targeted assassination of Gen. Qasem Soleimani— and in a worrisome for Washington — China and Russia once again find themselves allies in thwarting US plans.
On Monday the United States slammed Russia and China for blocking a United Nations Security council statement condemning the Dec. 31 mob attack on the US embassy in Baghdad— an event which precipitated the Trump administration’s order to take out Soleimani days later, accusing the IRGC Quds Force leader of plotting more attacks on Americans.
The US advanced the UN statement “underscoring the inviolability of diplomatic and consular premises” — but to pass in needs agreement of the 15-member Security Council by consensus.
The walls of the US Embassy compound in Baghdad’s Green Zone came under attack by pro-Iranian protesters last week, via CNN.
Reuters quoted the US mission to the UN as saying that while 27 countries spoke out against the attack on the Baghdad embassy, Russia and China blocked a formal statement.
US officials said the majority stood with Washington “in stark contrast to the United Nations Security Council’s silence due to two permanent members – Russia and China – not allowing a statement to proceed.”
This after Russian Foreign Minister Sergei Lavrov told Secretary of State Mike Pompeo a day after Soleimani’s death that the US had launched an “illegal power” move which should instead be based on dialogue with Tehran.
Forbes characterized Russian objections within the context of the UN further:
He [Lavrov] said that the actions of a UN member state to eliminate officials of another UN member state on the territory of a third sovereign state “flagrantly violate the principles of international law and deserve condemnation.”
Similarly China has stood against Washington’s unilateral military action, with Chinese Foreign Minister Wang Yi saying the US must not “abuse force” and instead pursue mutual dialogue.
UN security council file image, via Irish Times.
“The dangerous US military operation violates the basic norms of international relations and will aggravate regional tensions and turbulence,” Wang told Javad Zarif in a phone call days ago.
Diplomatically speaking, the US faces an uphill battle on the UN National Security Council, considering its already provoked the ire of two of its formidable members, who increasingly find themselves in close cooperation blocking US initiatives.
It’s not news that most judges balk at the prospect of jury nullification—the right and power of juries to bring “not guilty” verdicts when defendants violate laws that jurors consider unjust or wrongly applied. It is news when judges take a high-profile slap at a colleague who endorsed jury nullification in his own courtroom. And it’s an even bigger deal when they barely assemble a majority to join in the public shaming.
That’s exactly what happened last month when a divided three-judge panel of the U.S. Second Circuit Court of Appeals rebuked U.S. District Judge Stefan Underhill, who presided over what he called “a shocking case” in his court “that calls for jury nullification.”
The prosecution that shocked Underhill was a dubious federal “child pornography” case growing out of a state statutory rape case. It was summarized by the feds themselves in a U.S. Attorney’s Office press release, which alleges that defendant Yehudi Manzano “sexually assaulted a 15-year-old female victim in Connecticut, video recorded the assault with his cell phone, and uploaded the video to his Google account.”
“The only people who ever saw it were the guy who made it, the girl who was in it, and the federal agents,” Norman Pattis, Manzano’s attorney, told me about the video.
How did the feds get jurisdiction in what would normally be a state criminal case?
The feds chose to pile on a questionable prosecution for acts already being addressed in the state courts. “Apparently, the mere fact that the recording equipment was manufactured outside Connecticut is sufficient to meet the interstate commerce requirement of the [child pornography] statute,” as Judge Underhill marveled.
You would think a federal judge would have learned by now that the mere invocation of “interstate commerce” is the legal equivalent of muttering “Beetlejuice” three times, causing federal lawyers in ill-fitting suits to materialize amidst clouds of sulfurous smoke.
And materialize they did, with high stakes for the defendant.
“The charge of production of child pornography carries a mandatory minimum term of imprisonment of 15 years and a maximum term of imprisonment of 30 years, and the charge of transportation of child pornography carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years,” the U.S. Attorney’s press release notes.
Such a sentence would be in addition to the one to 20 years in prison faced by Manzano for sexual assault in the second degree, a class B felony in Connecticut, for sex with a 15-year-old who was legally incapable of consenting to the relationship.
Manzano’s attorneys argued that the feds were overreaching and that their client should be allowed to inform the jury of the potential sentence and argue for jury nullification. Judge Underhill agreed.
“This is a shocking case,” Underhill wrote. “This is a case that calls for jury nullification. … I am absolutely stunned that this case, with a 15‐year mandatory minimum, has been brought by the government. … I am going to be allowed no discretion at sentencing to consider the seriousness of this conduct or the lack or seriousness of this conduct, and it is extremely unfortunate that the power of the government has been used in this way, to what end I’m not sure.”
Prosecutors promptly filed an emergency motion seeking a writ of mandamus—an order from a higher court that would bar Judge Underhill from permitting the defense to inform the jury of the potential sentence and to argue in favor of jury nullification.
Given the judicial system’s strong aversion to loosening the puppet strings judges and prosecutors routinely fasten on jurors, it’s no surprise that two of the three appeals court judges hearing the case sided with the prosecution.
“Our case law is clear: ‘it is not the proper role of courts to encourage nullification,'” Judge Richard J. Sullivan wrote in a ruling joined by Judge Denny Chin “As a practical matter, there is no meaningful difference between a court’s knowing failure to remove a juror intent on nullification, a court’s instruction to the jury that encourages nullification, and a court’s ruling that affirmatively permits counsel to argue nullification.”
The appeals court did not agree to bar Underhill from allowing sentencing information to be presented to the jury, since there are potentially grounds other than nullification that could justify its introduction.
More surprising is that the decision was close, with Judge Barrington D. Parker opposing writs of mandamus regarding both sentencing and jury nullification.
“An especially unsettling aspect of this case is that the record the prosecution presented to the District Court and to this Court is barren of anything that would explain, much less justify, the prosecutors’ decision to file the most serious child pornography charges available to them against a man who made a single video which no one else ever saw and which he then attempted to erase,” Judge Parker argued in his dissent.
“Faced with the Government’s charging decision, Judge Underhill could, I suppose, have acquiesced in whatever the prosecutors wanted,” Parker continued. “But he is not a piece of Steuben glass. Instead, witnessing what he perceived to be abuse, he pushed back. I believe that most conscientious jurists would have done the same. I have no difficulty concluding that Judge Underhill was right to do so. … I respectfully dissent from the majority’s grant of a writ directing the District Court to allow no arguments for jury nullification.”
Those are strong words. But, since they’re on the losing side, Manzano won’t be allowed to argue in his defense in favor of jury nullification. His trial will feature jurors informed that they must abide by the federal government’s legal-contortionist interpretation of the law—though they may be told about the draconian potential sentences in the case.
But Judge Parker’s dissent, following Judge Underhill’s willingness to entertain jury nullification arguments in his court, have provided dramatic fodder for headlines. A public pissing match between federal prosecutors and judges features in news stories exposing the public to judges’ doubts about the wisdom and humanity of the criminal justice system.
An appeals court decision allowing Manzano to argue in favor of jury nullification would have been a better outcome in this case—short of the feds entirely leaving the matter to the state. But despite the loss, we’re getting an eyeful of how the system works, and how responsible jurors can bring otherwise-lacking judgment and mercy to courtrooms.
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I have previously criticized psychiatrists who have regularly appeared on the air to identify a variety of mental illness that they have observed in President Donald Trump from afar. As I discussed in a prior column on the demise of the Goldwater rule, this is diagnosis without examination and often seems mixed with strong political judgments about Trump’s political positions. Bandy X. Lee, a professor of psychiatry at the Yale University School of Medicine, has been one of the most outspoken and last week urged House Speaker Nancy Pelosi to demand some ill-defined “hold” on the president pending psychiatric examination. Her position latest position is utterly bizarre but has been treated as a serious discussion point by some media like Salon magazine.
Lee’s most recent call for some form of intervention by Pelosi seems utterly disconnected from the constitutional process. She bizarrely treated this as an office intervention. Lee told Salon that “As a co-worker, she has the right to have him submit to an involuntary evaluation, but she has not. I am beginning to believe that a mental health hold, which we have tried to avoid, will become inevitable.”
I am at a loss on this one. Does Lee think that Pelosi can “as a co-worker” force the President into an involuntary evaluation? The only provision from incapacity of a president is found in the 25th Amendment and it omits such a workplace evaluation process. As I previously discussed, Section 4 has, essentially, two avenues for dragging a president from the Oval Office. First, there is the mutiny option. A vice president and a majority of the Cabinet can agree that the president is “unable to discharge the powers and duties of his office” and notify Congress that the vice president intends to take over. If Vice President Pence could get eight Cabinet officers to sign a letter to that effect, he would immediately become the “Acting President.” But if the president then declares to Congress that “no inability exists,” Trump could resume his powers.
Pence and the rebellious Cabinet would then have to send another declaration within four days to the President pro tempore of the Senate and the Speaker of the House that says, more or less, don’t believe a word, he’s unfit. Once Congress had the second declaration, if not already in session, it would have 48 hours to assemble to debate the issue. It would then have 21 days to vote on the president’s fitness. To remove the president, two-thirds of both houses would have to agree. If Congress did not vote within 21 days, the president would get his power back.
Notably, Lee again seems triggered by policies or actions with which she disagrees. This latest call for co-worker intervention was due to the killing of Iranian Maj. Gen. Qassem Soleimani. I also raised concerns over this action as a possible assassination in violation of U.S. law and an act of war under international law. However, Trump is not the first president to attack individuals on foreign soil whether it was Osama Bin Laden or the attempt on former Libyan President Muammar el-Qaddafi.
Lee’s medical diagnosis is hard to untangle from her political judgment. She insists that this is “exactly what someone who lacks mental capacity would do.”:
“This is exactly the kind of dangerous event we foresaw as Donald Trump’s response to the impeachment proceedings, just as his pulling troops from northern Syria was a direct response to the announcement of an impeachment inquiry…
In other words, he is extremely drawn to actions that would help him appear as if he has mental capacity, such as a ‘presidential strike’ against an enemy, while avoiding the proper procedures, such as briefing with Congress, that might expose his lack of capacity…
What we do not expect from someone who lacks mental capacity is rational, reality-based decision making that is non-impulsive, non-reckless, and cognizant of consequences.”
She adds that his attacks on President Obama must also be treated as a reflection of his mental illness:
“Since he is incapable of putting himself in another person’s shoes, he projects his own thoughts entirely onto others. Hence, we can deduce that what he has said about Mr. Obama has nothing to do with the former president but has only to do with the way he himself thinks.”
At points, Lee seems herself a bit adrift. When asked about the widespread criticism of her claims of mental illness, Lee responded “My critics do not have an argument. There are many situations where I hoped that my formulation would be wrong — but now that my hypotheses have been tested so many times to 100 percent precision.”
Really? She is 100 percent right without ever actually personally examining the subject.
Then the interview gets downright batty when the 25th Amendment is raised:
“Yes. In this country, no one is above the law, and as far as mental health laws and the president are concerned, there is no Office of Legal Counsel memo, no exceptions and at this time not even confidentiality, since he has yet to be a patient. Before it is a political matter involving impeachment or the 25th Amendment, it is a medical matter. The physical danger due to psychological impairment needs to be removed, and we are bound by our own professional code not to abandon persons or the public in danger. We are even legally bound to take steps to protect potential victims if warning is insufficient and security staff will not act. If the personal physician is unavailable or too conflicted to do so, any physician can.
A 72-hour hold does not require court intervention and is enough for a solid evaluation. There is no shortage of mental health professionals willing to put their names to commitment papers, and multiple legal groups have offered to file for a court order for security staff to cooperate. All we need are auspices so as to show it is not a coup or something nefarious — although, at this point, we may need to proceed anyway because the populace is growing too sick to see any intervention as legitimate unless it is illegitimate. This is common in mental health settings, and we apply the proper treatment according to standard anyway with the hope that patients will improve enough to see that you have helped them — which happens most of the time. It is this nature of mental disease that has allowed for civil commitment laws to be possible in a country that protects civil liberties.”
Could you imagine the future of our system if a Speaker of the House could have a president civilly committed for involuntary examination? Some Republicans would no doubt have asked Pelosi’s GOP predecessor for the same civil confinement of President Obama. We would need a regular presidential suite at St. Elizabeth’s. Lee herself shows the potential for securing favorable rulings from doctors who believe no sane person could hold certain political views or take certain actions.
Gold Or Oil: Which Is A Better Iran Crisis Hedge? Here Is Goldman’s Answer
Now that Dennis Gartman’s daily recos can no longer be faded, algos are feeling just a little confused: after all, with no 100% guaranteed way to make money, some risk has to be taken and that just won’t stand. So what is a good alternative to the “Gartman Letter”? Here Goldman’s sellside recos certainly come to mind. And while nobody can ever come close to the uncanny Gartmanity of Goldman’s former FX strategist, Thomas Stolper, Goldman’s research desk does have a peculiar habit of advising its clients to do precisely the opposite of what Goldman’s own prop desks are doing at any one moment.
Which is why we have some bad news for gold longs, who have enjoyed a tremendous surge in the price of pet rock in the past year, and which is now up about 40% higher than when some WSJ hack decided to mock gold back in July 2015…
… for the simple reason that overnight, Goldman decided to present its “thoughts” on what it thought was a better hedge to geopolitical crises such as Iran – gold or oil – and the answer is…
Of course, this is the kiss of death for gold, and it means that Goldman’s own traders are now seeking clients to dump their gold holdings to. This is how Goldman laid out its bullish case:
We found that spikes in geopolitical tensions lead to higher gold prices when they are severe enough to cause currency debasement. This most often happens during wars or military escalations. Accordingly, we found that gold performed well, even controlling for real rates and dollar weakness, during the beginning of both Gulf wars and during the events of September 11, 2001. Therefore, additional escalation in US-Iranian tensions could further boost gold prices. All in all, we stick with our 3, 6 and 12m forecast of $1,600/toz but see upside risks if geopolitical tensions worsen.
Translation: while gold will inevitably soar since it is just a matter of time before central banks and governments launch helicopter money, the next short-term move in gold is most likely lower as Goldman now dumps inventory.
Or maybe not: perhaps we are being too cynical and maybe gold is set to hit $2k next. For the benefit of more naive, innocent and gullible readers, here is Goldman’s take on why it urges its clients to buy more gold (from Goldman), while selling oil (to Goldman):
Fears around rising US-Iran tensions and potential for retaliation from Iran pushed oil and gold prices sharply higher on Friday, January 3. This is on top of a strong macro-driven end-of-year finish that pushed all commodities higher. While tensions in the Middle East have undeniably escalated with Iran reportedly committing to retaliating, we believe that the current risk premium embedded in Brent prices (through timespreads) is already elevated, with an actual supply disruption now necessary to sustain oil prices near current levels of $69/bbl. Although the rally in oil suggests the market attaches a significant probability to current tensions leading to an oil supply disruption, we would argue that assessing such specific consequences is difficult at this time. The range of potential scenarios is very large; spanning oil supply shocks or even oil demand destruction — which would be negative to oil prices. In contrast, history shows that under most outcomes gold will likely rally to well beyond current levels. This is consistent with our previous research which shows that being long gold is a better hedge to such geopolitical risks.
Fears of a potential Iran retaliation on oil assets pushed oil prices to their highest levels since the attack on Saudi Arabia’s Abqaiq facility last September. Absent a major supply disruption, we therefore believe that price risks are skewed to the downside in coming weeks, with oil prices already trading above our fundamental fair value of $63/bbl ahead of the recent events, buoyed by an over-enthusiastic December risk-on rally in the face of limited evidence of a material acceleration in global growth. A similar pre-emptive – and ultimately unsustainable – move occurred ahead of both the expected loss of Iran supplies in October 2018 as well as in the immediate aftermath of the Abqaiq attack.
Specifically, Friday’s move higher in prices was nearly entirely driven by a steepening backwardation with spot prices outperforming long-dated prices by $2.6/bbl. Based on our pricing model, which leverages the historical link between such relative moves and shifts in oil fundamentals, this move can be interpreted as the market immediately and pre-emptively pricing in an outage of 800 kb/d for three months or a 30% chance of a much larger 2.7 mb/d outage for three months. Therefore, this move already reflects a large risk premium with, for example, total Iraq exports from the Southern port of Basra being only 3.2 mb/d in December. Further, it is not a given that any potential retaliation by Iran would target oil producing assets; the recent incident at the US embassy in Iraq occurred while there was no disruption to neighboring oil fields. We note that the US is becoming less sensitive to oil disruptions and price spikes, as the country became a net petroleum exporter in September for the first time in modern history.
The precedent set by the Abqaiq attack showed that the oil market has significant supply flexibility starting when Brent is at $70/bbl, even before shale production needs to ramp up, suggesting only moderate upside from here, should an attack on oil assets actually occur. As we argued following the Abqaiq attack: (1) there is significant OPEC product spare capacity of nearly 2.0 mb/d immediately available, which was successfully deployed in the fall of 2018, (2) EM crude inventories are much higher than they have been historically, especially in Saudi and China, with both countries already demonstrating their willingness to use these to stabilize supply and prices in the past two years, (3) global oil demand has become more elastic to prices given the steady decline in EM subsidies with current weak global economic growth particularly sensitive to higher prices, and (4) DM strategic stockpiles remain very large – especially in the US – with governments showing a willingness to use these when prices reached $75/bbl. Finally, even if US shale producers have become more disciplined, WTI prices at $70/bbl would allow them to both deliver strong returns to shareholders and increase production as well.
Over the past month gold has rallied by $100, reaching $1,550/toz, which is almost at our 3-month target of $1,600/toz. The initial part of the rally occurred alongside a weakening USD and rising inflation expectations combined with still weak economic growth, signaled by our economists’ December US CAI running at 1% yoy. A weaker dollar boosts gold through the “wealth effect”, raising the dollar purchasing power of main gold consumers, as well as through gold speculative positions which are highly sensitive to trends in the US Dollar Index (DXY). Higher breakeven inflation and weak growth data also likely helped gold, as they add to concerns of a potential late cycle inflation overshoot. As we have argued before, such an overshoot is the economic environment in which gold historically does best as investors become concerned over debasement risks. The final leg of the rally on Friday was triggered by a negative surprise in the US manufacturing ISM and escalation in the US-Iranian geopolitical tensions.
We found that spikes in geopolitical tensions lead to higher gold prices when they are severe enough to cause currency debasement. This most often happens during wars or military escalations. Accordingly, we found that gold performed well, even controlling for real rates and dollar weakness, during the beginning of both Gulf wars and during the events of September 11, 2001. Therefore, additional escalation in US-Iranian tensions could further boost gold prices. All in all, we stick with our 3, 6 and 12m forecast of $1,600/toz but see upside risks if geopolitical tensions worsen.
Base metals rallied strongly into year-end, helped by slightly better China PMI data, monetary policy loosening in China, de-escalation of trade tensions and weak Chinese supply in copper and aluminium. Most recently they were hit by the escalation in US-Iran tensions and subsequent market risk-off. For copper, signs that physical copper demand in China returned to positive growth in Q3, on improving property completions, has likely further boosted sentiment and led to a reduction in short spec positions. Going into 2020 we continue to expect the old economy recovery to be lacklustre, which was recently reaffirmed by a weak US manufacturing ISM. This means that supply differentiation and micro demand drivers will be key to each metal’s performance. Therefore, we remain bullish copper, where smelters suffer from depressed margins, and nickel, where supply uncertainty from the Indonesian ore ban remains high for 2021, and bearish aluminium and zinc where smelters enjoy very healthy margins. On the demand side, copper and nickel also benefit from positive exposure to EVs and renewable energy, which have picked up momentum recently, particularly in Europe. Still, we acknowledge that further escalation of geopolitical tensions has the potential to dampen economic activity and weaken base metals demand.
It’s not news that most judges balk at the prospect of jury nullification—the right and power of juries to bring “not guilty” verdicts when defendants violate laws that jurors consider unjust or wrongly applied. It is news when judges take a high-profile slap at a colleague who endorsed jury nullification in his own courtroom. And it’s an even bigger deal when they barely assemble a majority to join in the public shaming.
That’s exactly what happened last month when a divided three-judge panel of the U.S. Second Circuit Court of Appeals rebuked U.S. District Judge Stefan Underhill, who presided over what he called “a shocking case” in his court “that calls for jury nullification.”
The prosecution that shocked Underhill was a dubious federal “child pornography” case growing out of a state statutory rape case. It was summarized by the feds themselves in a U.S. Attorney’s Office press release, which alleges that defendant Yehudi Manzano “sexually assaulted a 15-year-old female victim in Connecticut, video recorded the assault with his cell phone, and uploaded the video to his Google account.”
“The only people who ever saw it were the guy who made it, the girl who was in it, and the federal agents,” Norman Pattis, Manzano’s attorney, told me about the video.
How did the feds get jurisdiction in what would normally be a state criminal case?
The feds chose to pile on a questionable prosecution for acts already being addressed in the state courts. “Apparently, the mere fact that the recording equipment was manufactured outside Connecticut is sufficient to meet the interstate commerce requirement of the [child pornography] statute,” as Judge Underhill marveled.
You would think a federal judge would have learned by now that the mere invocation of “interstate commerce” is the legal equivalent of muttering “Beetlejuice” three times, causing federal lawyers in ill-fitting suits to materialize amidst clouds of sulfurous smoke.
And materialize they did, with high stakes for the defendant.
“The charge of production of child pornography carries a mandatory minimum term of imprisonment of 15 years and a maximum term of imprisonment of 30 years, and the charge of transportation of child pornography carries a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years,” the U.S. Attorney’s press release notes.
Such a sentence would be in addition to the one to 20 years in prison faced by Manzano for sexual assault in the second degree, a class B felony in Connecticut, for sex with a 15-year-old who was legally incapable of consenting to the relationship.
Manzano’s attorneys argued that the feds were overreaching and that their client should be allowed to inform the jury of the potential sentence and argue for jury nullification. Judge Underhill agreed.
“This is a shocking case,” Underhill wrote. “This is a case that calls for jury nullification. … I am absolutely stunned that this case, with a 15‐year mandatory minimum, has been brought by the government. … I am going to be allowed no discretion at sentencing to consider the seriousness of this conduct or the lack or seriousness of this conduct, and it is extremely unfortunate that the power of the government has been used in this way, to what end I’m not sure.”
Prosecutors promptly filed an emergency motion seeking a writ of mandamus—an order from a higher court that would bar Judge Underhill from permitting the defense to inform the jury of the potential sentence and to argue in favor of jury nullification.
Given the judicial system’s strong aversion to loosening the puppet strings judges and prosecutors routinely fasten on jurors, it’s no surprise that two of the three appeals court judges hearing the case sided with the prosecution.
“Our case law is clear: ‘it is not the proper role of courts to encourage nullification,'” Judge Richard J. Sullivan wrote in a ruling joined by Judge Denny Chin “As a practical matter, there is no meaningful difference between a court’s knowing failure to remove a juror intent on nullification, a court’s instruction to the jury that encourages nullification, and a court’s ruling that affirmatively permits counsel to argue nullification.”
The appeals court did not agree to bar Underhill from allowing sentencing information to be presented to the jury, since there are potentially grounds other than nullification that could justify its introduction.
More surprising is that the decision was close, with Judge Barrington D. Parker opposing writs of mandamus regarding both sentencing and jury nullification.
“An especially unsettling aspect of this case is that the record the prosecution presented to the District Court and to this Court is barren of anything that would explain, much less justify, the prosecutors’ decision to file the most serious child pornography charges available to them against a man who made a single video which no one else ever saw and which he then attempted to erase,” Judge Parker argued in his dissent.
“Faced with the Government’s charging decision, Judge Underhill could, I suppose, have acquiesced in whatever the prosecutors wanted,” Parker continued. “But he is not a piece of Steuben glass. Instead, witnessing what he perceived to be abuse, he pushed back. I believe that most conscientious jurists would have done the same. I have no difficulty concluding that Judge Underhill was right to do so. … I respectfully dissent from the majority’s grant of a writ directing the District Court to allow no arguments for jury nullification.”
Those are strong words. But, since they’re on the losing side, Manzano won’t be allowed to argue in his defense in favor of jury nullification. His trial will feature jurors informed that they must abide by the federal government’s legal-contortionist interpretation of the law—though they may be told about the draconian potential sentences in the case.
But Judge Parker’s dissent, following Judge Underhill’s willingness to entertain jury nullification arguments in his court, have provided dramatic fodder for headlines. A public pissing match between federal prosecutors and judges features in news stories exposing the public to judges’ doubts about the wisdom and humanity of the criminal justice system.
An appeals court decision allowing Manzano to argue in favor of jury nullification would have been a better outcome in this case—short of the feds entirely leaving the matter to the state. But despite the loss, we’re getting an eyeful of how the system works, and how responsible jurors can bring otherwise-lacking judgment and mercy to courtrooms.
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Bruce Ohr Covered Up Anti-Trump Crusade To Distribute Steele Dossier
Still-employed DOJ official Bruce Ohr says he was simply doing his “duty as a citizen” when he distributed the infamous Steele dossier through “numerous meetings, phone calls and emails” while acting “as a link between the FBI and Hillary Clinton forces” to take down Donald Trump, according to the Washington Times.
All this, while he was the #4 official at the Department of Justice – associate deputy attorney general, and in charge of the agency’s Organized Crime Drug Enforcement Task Force, titles Ohr was stripped of by Deputy AG Rod Rosenstein after his crusade to take Trump down was uncovered by DOJ Inspector General Michael Horowitz in November, 2017.
And while Ohr was swapping anti-Trump research with his wife Nellie – a Fusion GPS employee with CIA ties – he hid his efforts between the summer of 2016 and Trump’s election from his bosses.
Recall that both Bruce and Nellie Ohr had ongoing communications with Christopher Steele, the dossier’s author, even having breakfast with him on July 30, 2016 at the Mayflower Hotel in downtown Washington D.C. – one day before the FBI launched operation Crossfire Hurricane, and one week after Steele had given installments of his Clinton-funded anti-Trump research to the FBI.
Mr. Horowitz’s 434-page report on FBI abuse of wiretap laws to target Trump campaign associate Carter Page includes scores of pages on Mr. Ohr and his one-man Washington operation. The inspector general concluded that Mr. Ohr had committed “consequential errors in judgment” and “lapses in judgment.”
Mr. Ohr’s self-appointed operation started with an alliance with Glenn R. Simpson, the Fusion GPS co-founder who employed Mr. Ohr’s wife, Nellie, as a Trump-Russia investigator. Mr. Ohr then began communications with Christopher Steele. Mr. Simpson paid and controlled the former British spy as he wrote and distributed 17 dossier memos accusing Mr. Trump and aides of various felonies. –Washington Times
Following the Ohrs’ breakfast with Steele, Bruce immediately phoned the FBI and met with Deputy Director Andrew McCabe and Lisa Page, a high-ranking FBI lawyer who was banging the head of counterintelligence – Peter Strzok – as they swapped anti-Trump text messages, while investigating Trump (yet no bias). Ohr later met with Strzok as well.
Clearly the lines between Ohr’s personal crusade and his position as a top DOJ official had blurred, resulting in his demotions.
“The idea that he actually had some role in this Russia investigation was shocking to me,” Rosenstein told the inspector general. “We had been fending off these congressional inquiries. And they were asking for all sorts of stuff, 302s [FBI reports] and things, and … I had no idea that somebody on my staff had actually been involved in … an operational way in the investigation.”
Nellie Ohr, meanwhile, also appears to have gone on a mysterious personal crusade – becoming a late-life Ham radio enthusiast, which some suspect is how she covertly communicated with others about the Trump-Russia investigation.
Dossier breaks down
According to the Times, Christopher Steele’s FBI handler warned Ohr that “Steele could not be trusted.”
Mr. Steele doubted his own source network. “Reporting of Kremlin activities ‘may be exaggerated or conspiracy theory talk,’ so Steele cannot know whether all the reporting is true,” the notes say.
Mr. Ohr assured those around the table that Mr. Steele was not fabricating information.
The next month, Mr. Ohr asked for more information from Mr. Simpson and received it in the form of a thumb drive that he delivered to the FBI supervisory agent with whom he had met in November. –Washington Times
On November 21, 2016, Ohr met with Assistant Secretary of State Kathleen Kavalec, who he told the dossier was “kind of crazy … kind of wild … quite a tale.” Later in the day, Bruce went to FBI headquarters for “his most high-powered meeting,” just one month after the FBI had executed its first warrant to electronically and physically surveil Carter Page after they were finally granted a FISA warrant by the surveillance court.
According to those who were in the meeting, Ohr made clear that there was a link between Steele and the Clinton campaign, which had paid Fusion GPS through law firm Perkins Coie. Fusion owner Glenn Simpson was “hired by a lawyer who does opposition research and the dossier was being fed to the campaign,” according to the IG report.
According to Ohr, Steele was “desperate” to sink Trump.
The FBI, however, never disclosed Ohr’s revelation that the Steele Dossier had partisan funding in three subsequent wiretap applications – which was among 17 instances that Horowitz found the agency misled the FISA court.
Ohr delivers to an underling
After the Steele dossier made its way from Fusion GPS’s Simpson to John McCain associate David Kramer – who gave it to former FBI Director James Comey (who already had most of the dossier already), Kramer gave it to BuzzFeed and other media outlets, which published it on January 10, 2017.
Ohr, meanwhile, passed the dossier to a DOJ underling.
“Ohr’s colleague said that Ohr told her that Steele provided information that the Trump campaign had been corrupted by the Russians,” reads the IG report. “The colleague told us that she asked Ohr if the allegations went ‘all the way to the President’ and that Ohr responded ‘yes.’”
Ohr had effectively become an ‘off-the-books’ investigator, which he failed to tell then-Deputy AG Sally Yates out of fear that she would prevent him from further contacts with Steele.
“He further stated that he did not want to stop talking to Steele because he was alarmed by the information he was receiving and believed he needed to get it to the FBI,” reads the Horowitz report.
“None of the FBI witnesses we interviewed,” the report continues “recalled anyone tasking Ohr to gather information from Steele or to act as an intermediary between the FBI and Steele.”
In other words, Ohr was on a personal – or at least officially disavowed mission to help take down Donald Trump.
