Maduro Relying On “Planeloads Of Cash” From Russia To Skirt US Sanctions

Maduro Relying On “Planeloads Of Cash” From Russia To Skirt US Sanctions

A new investigative report by Bloomberg this week has uncovered a sanctions-skirting sizable cash pipeline into sanctions hit Venezuela, demonstrating one of the “complex logistical feats” President Nicolas Maduro has utilized to survive US-imposed isolation from the international financial system. 

“Hundreds of millions of dollars in cash has been shipped from Russia to Venezuela, providing a lifeline to the South American country as U.S. sanctions limit its access to the global financial system,” Bloomberg found. 

Illustrative file image.

Citing records obtained from a customs monitoring research group, the report details a significant “total of $315 million of U.S. dollar and euro notes” shipped in up to six deliveries on flights from Moscow to Caracas, spanning May 2018 to April 2019. The illicit funds reportedly went to the socialist country’s development bank. 

This included single shipments of $113 million worth of 100-euro bills in one instance, and $50 million in U.S. dollar bills just days later in January of this year. 

The source of the money includes Moscow-based bank Evrofinance Mosnarbank and Russian state-controlled lender Gazprombank — the former established as a joint venture with Venezuela’s Bandes, an alleged recipient of the cash transfers.

Illustrative file image.

Bandes was sanctioned months ago by Washington given it’s believed Maduro uses it as a sanctions-evading vehicle for significant amounts of money kept abroad (full name, Banco de Desarrollo Economico y Social de Venezuela). 

Among other methods Caracas relies on to access cash include secret gold sales and cryptocurrencies, according to the report. The Maduro government is also reportedly studying ways to expand its utilization of cryptocurrencies, also as it considers an ‘alternative’ Russia-run global payment system.

While the report hasn’t received confirmation from either the Russian or Venezuelan governments, one anonymous Venezuelan official “confirmed the country had received cash shipments tied to Evrofinance but declined further comment.” Meanwhile, Russia remains among Caracas’ largest debtors, with a debt of $3.15 billion.

 


Tyler Durden

Wed, 11/06/2019 – 11:05

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Sandworm and the GRU’s global intifada

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Sandworm and the GRU’s global intifada

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Three Examples Of How Chaos Theory Affects Financial Markets

Three Examples Of How Chaos Theory Affects Financial Markets

Submitted by Nick Colas of DataTrek Research

Chaos Theory – the idea that a butterfly in Thailand could cause a US hurricane – can actually create positive outcomes as well as mayhem. Consider that European banks, German long-term bunds and the offshore yuan are essentially the butterflies making for pleasant investment conditions just now. All have turned sharply in the last 2 months after previous discounting disaster. And all have more room to run.

Chaos Theory gets a bum wrap, and I think the reason is bad branding. The most common explanation of the phenomenon is the classic “a butterfly flapping its wings in Thailand can cause a hurricane in the Gulf of Mexico”. Initial conditions, in other words, can have outsized effects in complex systems like weather patterns. Fair enough, but one usually associates Chaos Theory with bad outcomes like cyclones and stock market crashes.

What about when initial conditions push their way through to create unexpectedly good outcomes? That’s Chaos Theory as well, but no one talks about the mayhem created by a lovely day… Bad branding, that, or at least misleading packaging…

Turning to the current sunny spell in global risk markets, three examples of why Chaos Theory can work to investors’ benefit as well as harm.

Exhibit #1: European Bank Stocks:

  • In early August, the EURO STOXX Banks Index looked like it was about to implode. At 77, it had not been lower since the 1990s. We wrote about it, highlighting that several market bears thought the group was destined to go into chaotic (there’s that word again) free-fall.
  • But then the group found its footing as Eurozone long-term interest rates bottomed (more on that in a minute).
  • From August 15th to now, the index is up 20%. Disaster averted, at least for now.
  • The group’s move has lit a fire under global bank stocks. US large cap Financials are up 12% since mid August. Small caps are +8% and Japanese banks are +14%.

Here is a 5-year chart of the index to give you some historical perspective:

Bottom line: European banks are the Lake Victoria of the current rally in global financials and therefore also the source waters for the ongoing lift in value stocks.

Exhibit #2: German 30-year sovereign bonds:

  • Since the German government runs a balanced budget, long-term bunds are in perennial short supply relative to US Treasuries.
  • Along with that, the long duration of German 30-years makes this asset singularly twitchy to market sentiment about Eurozone economic growth.
  • At the end of August, when US-China trade talks were at their nadir, the market for 30-year bunds was signaling the real risk of a deep European recession. Yields got as low as -0.27%.
  • Now, the yield on 30-year bunds is positive again to the tune of 0.16%. Ok, not great but also not (quite) staring into the abyss. Treasuries have followed along, assuaging concerns created by a previously inverted yield curve.

Here is a 5-year yield chart for this paper:

Bottom line: the lift in long-term German yields since late August was the spark that reignited the global market’s animal spirits in September and October. Europe may be teetering on the edge of recession, but lessening US-China trade tensions may save it from falling into too deep a hole.

Exhibit #3: The offshore yuan/dollar exchange rate:

  • When the offshore yuan blew through the old “line in the sand” level of 7/$ in early August, you knew markets were worried US-China trade talks were sputtering.
  • These reached their peak in early September, at 7.19/$.
  • Since then, the yuan has crawled its way back to (almost) 7.0, closing today at 7.03.

Here is a 1-year chart for the offshore yuan:

Bottom line: even if US-China trade talks seem unpredictable, yuan traders are expressing confidence that they remain on the right track. That feeds into global capital markets’ bullish tone just now.

In summary, these are the 3 butterflies of the current global equity rally, each flapping their wings on distant shores but in aggregate creating something productive rather than “chaos”. A look at the chart for each shows they all have room to run. As such, they are the 3 indicators we’ll be watching most closely. For now, however, this is one example of Chaos Theory that is working in investors’ favor.


Tyler Durden

Wed, 11/06/2019 – 10:45

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WTI Erases Early Gains After Large Crude Build, Record Production

WTI Erases Early Gains After Large Crude Build, Record Production

A bigger than expected crude build reported by API overnight sparked selling in oil prices but since the US equity market opened, WTI has been panic-bid presumably on yet another round of optimism that trade tensions between the U.S. and China are easing, potentially alleviating downward pressure on the global economy.

API

  • Crude +4.26mm (+2mm exp)

  • Cushing +1.3mm

  • Gasoline -4.0mm

  • Distillates -1.6mm

DOE

  • Crude +7.929mm (+2mm exp)

  • Cushing +1.714mm

  • Gasoline -2.828mm

  • Distillates -622k

For the second week in a row, crude inventories rose significantly (along with stocks at Cushing) as product inventories dropped for the 6th straight week…

Source: Bloomberg

US crude production hovered near record highs despite the rapid decline in US oil rig counts…

Source: Bloomberg

WTI traded around $57.60 ahead of the DOE data but tumbled on the big build…

Bloomberg Intelligence’s Senior Energy Analyst Vince Piazza has some words of warning:

Optimism on trade, economic growth and decelerating supply is supporting crude benchmarks, but we believe that enthusiasm is premature to say the least. WTI remains mired below $60, and efficiency gains combined with cost deflation could keep U.S. output elevated without requiring additional spending by E&Ps.”

Finally, as a reminder, the U.S. registered its first petroleum trade surplus in over four decades in September as production surged to a record.

Source: Bloomberg

Better keep those rates low Mr.Powell to keep the shale dream alive.


Tyler Durden

Wed, 11/06/2019 – 10:34

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Trader Warns “Fear Of Being Underweight” Is Not A Compelling Narrative

Trader Warns “Fear Of Being Underweight” Is Not A Compelling Narrative

Authored by Richard Breslow via Bloomberg,

Go away for a day and all of a sudden more and more people in the international arena are trying to make nice.

  • The latest installment came today when German Finance Minister Olaf Scholz contemplated publicly what a joint European bank deposit facility might look like. Don’t hold your breath, but it is a step in the right direction.

  • Numbers are perking up, including a strong beat for German factory orders.

  • Progress on the trade dispute is apparently being made…

  • …, along with a hiatus from the global fixation with Brexit.

  • And the realization that China isn’t as hamstrung in providing succor to its economy as the stagflation crowd insisted.

They’re all contributing to the mood. We should enjoy it all while it lasts.

You know that the perception of things is looking up — just look at the increase in the number of central bankers who are willing to question the efficacy of negative rates. That’s an optimistic sign of less panic over the global economy and, if it persists, will likely find its way into dot plots, summaries of economic projections, speeches, and the like.

It’s not that they are making the horrible mistake of declaring “Mission Accomplished.” Rather, it’s acknowledging that many of our woes are unnecessarily self-inflicted or can better heal themselves given time and some better decisions, not with outlandish monetary policy. Take the good when you can get it.

Sometimes, optimism can be self-reinforcing. Other times, it’s just wishful thinking and things head right back into the sewer. Luck counts, too. Something the world hasn’t had a lot of. And it’s a mistake to discount the influence of political expediency, which is finally beginning to weigh on politicians everywhere. They don’t always respond with the best long-term solutions, but markets don’t mind can-kicking.

Nevertheless, upbeat is the moment’s cautious mood. Good for a trade, if nothing else.

It’s worth asking whether it will affect traders’ behavior. And it just might.

Throughout the quantitative easing and slow global growth period we’ve become accustomed to aggressively buying bonds and duration in order to sell them. There was the, correct, assumption that someone would always come along to take them from you at a better price. Negative yields weren’t an impediment to anything. Nutsy, but profitable.

In the current environment, this could get flipped and bonds sold on rallies on the expectation they can be bought back at better levels. Without overstating the case this early in the game, the absolute level of yields will begin to have some relevance in traders’ calculations.

I don’t know anyone who is extrapolating higher yields to truly “normal” levels. Far from it. And even if investors are willing to be underweight duration they still recognize the need and prudence of having fixed income figure prominently in their portfolios. But unless and until this better news period proves to be merely a temporary lull in the gloom, the bid side of the market will slowly be recognized as the soft one.

It makes perfect sense that equities have been in demand. But until you see capital investment intentions changing, it’s a gutsy thing to dismiss the influence of low yields on the portfolio allocation equation. I wonder if the mindset will begin to be more about selling the big rallies, rather than always plotting to buy the dip. They may end up looking similar on charts, but lightening up at what seem like opportune extremes might start to feel like a good idea, rather than always looking to add at better levels. Fear of being underweight may not be as compelling a narrative. Central bankers might not let slip their concern for asset bubbles, but investor flows could have more lasting effect.

As for the dollar, the real question might not yet be its absolute direction. It hasn’t exhibited the sort of impulsive behavior often shown when it is clearly on the move. It’s letting you in, no matter your bias. The issue that needs consideration is what currencies will perform best in risk-on and risk-off moments. That remains curiously ambiguous. Or, it might mean currency traders just haven’t fully signed onto the rosy scenario.


Tyler Durden

Wed, 11/06/2019 – 10:19

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Rand Paul: ‘Subpoena Whistleblower, He May Be Involved In Corrupt Ukraine Dealings’

Rand Paul: ‘Subpoena Whistleblower, He May Be Involved In Corrupt Ukraine Dealings’

Sen. Rand Paul (R-KY) has called on Congressional Republicans to subpoena the anti-Trump whistleblower, suggesting he may be involved in corrupt business dealings in Ukraine.

In a Tuesday interview, Paul said that the whistleblower – reported to be CIA officer Eric Ciaramella – “is a material witness to the possible corruption of Hunter Biden and Joe Biden,” and that Congress should investigate the whistleblower’s ties to the Biden family and Burisma holdings, the Ukrainian gas company that paid Hunter Biden to sit on its board, according to BuzzFeed.

[The whistleblower] might have traveled with Joe Biden to Ukraine for all we know. We should look at his writings. We should know all of this stuff to see whether or not he has any intersection with Burisma and with Hunter Biden,” said Paul.

The president’s most ardent supporters in Congress have long insisted the real corruption in Ukraine was done by former vice president Joe Biden and his family rather than by President Donald Trump. Many have also called for outing the anonymous intelligence official who filed a whistleblower complaint alleging Trump demanded a political quid pro quo from the Ukrainian government — an investigation into the Biden family in exchange for hundreds of millions of dollars in military aid. But, until now, they had not brought those two lines of attack together. –BuzzFeed

When asked if he has any evidence for his suppositions, Paul said “We don’t know unless we ask.

Senate Judiciary Committee Chair Lindsey Graham (R-SC) was surprised at Paul’s comments, saying “He needs to tell us. You can’t ask a judge. You can’t ask members [of Congress], ‘Do you want to subpoena this guy?‘ He might be this, he might be that.”

Both Graham and Paul do agree, however, that the whistleblower’s identity should be officially made public, with Paul telling reporters that he “probably will” disclose his name. 

“I’m more than willing to, and I probably will at some point. … There is no law preventing anybody from saying the name,” said Paul.

Other lawmakers such as Sen. Mitt Romney, Roy Blunt, John Cornyn and Lisa Murkowski say he should remain anonymous.

The whistleblower’s attorney, Mark Zaid, said that Paul and others are using disinformation to distract from the substance of the allegations.

“I imagine at some point soon our client will be accused of masterminding JFK’s assassination as well,” he said. “Any Member of Congress who pushes to expose the whistleblower will not only undermine the integrity of the system but will be disgracing their office and betraying the interests of the Constitution and the American people.”


Tyler Durden

Wed, 11/06/2019 – 10:00

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OPEC Braces For Drastic Drop In Oil Demand

OPEC Braces For Drastic Drop In Oil Demand

Authored by Nick Cunningham via OilPrice.com,

OPEC admitted that demand for its oil over the next few years could be drastically weaker than it previously thought, due to a combination of a weakening economy, rising supply elsewhere, and pressure from climate activists.

In its World Oil Outlook, OPEC said that demand for its oil may only reach 32.8 million barrels per day (mb/d) by 2024, a figure that is substantially lower than the 35 mb/d from last year’s estimate. Demand is still expected to grow in non-OECD countries going forward, but OPEC admitted that demand may peak in the OECD in 2020.

Slower economic growth also factored into the lower medium- and long-term estimates.

“Given recent signs of stress in the global economy, and the outlook for global growth, at least in the short- and medium-term, the outlook for global oil demand has been lowered slightly this year to 110.6 mb/d by 2040,” OPEC’s Secretary-General Mohammad Barkindo said in the report.

OPEC said that non-OPEC production continues to rise, particularly from U.S. shale, although not exclusively. The cartel has had to restrain production for several years to keep prices from crashing, even in the face of relentless shale growth. U.S. shale is growing, but is now slowing dramatically. At the same time, countries such as Norway, Brazil, Canada and Guyana are expected to continue to add supplies in the next few years. Steady supply increases puts OPEC in a bind.

Meanwhile, the attention paid to the risks of demand destruction in the OPEC report is notable. The phrase “climate change” appears nearly 50 times in the report and the cartel acknowledged that electric vehicles are “gaining momentum.”

OPEC said it was “fully engaged and supportive of the Paris Agreement,” and that there is “no Planet B.” The group reiterated the urgent need for oil-exporting countries to diversify their economies, even as there is relatively scant evidence that OPEC member countries are actually doing so.

Indeed, OPEC is not exactly preparing for the end of the oil era. It still sees demand growing by around 12 mb/d over the next two decades, a scenario that would be utterly at odds with any viable chance to head off the climate crisis.

In fact, despite all of the climate risks, all of the urges to diversify economies, the possibility of weakening demand and the competition from non-OPEC supply, the cartel still seems unbowed, at least outwardly.

As if to refute any pending doom for oil-producers, Barkindo said that while renewables lead the way in growth going forward, “oil and gas are still forecast to meet more than 50% of the world’s energy needs” in 2040. Even though the growth in consumption is slowing, “demand expands in every five-year period to the end of the timeframe,” Barkindo emphasized.

He said that the global upstream, midstream and downstream oil sectors “need” $10.6 trillion in investment between now and 2040. “OPEC Member Countries are fully committed to making the necessary investments to keep consumers well supplied,” Barkindo said.

Still, in the next paragraph, he admitted the risk at hand.

“The industry is now concerned about policies that may detrimentally impact investments; for example, those related to climate-related financial disclosures.”

Just a few months ago, Barkindo said that the greatest threat to the global oil industry came from climate activists. “There is a growing mass mobilisation of world opinion… against oil,” Barkindo said. In response, 16-year-old Swedish climate activists Greta Thunberg tweeted “Thank you! Our biggest compliment yet!”

Recently, Kuwait said that it might lower its oil production targets because of climate change. Instead of aiming to produce 4.75 mb/d by 2040, the country may only target 4 mb/d, sources told Bloomberg.

Even the partial IPO of Saudi Aramco could be viewed in the context of questions about peak demand. With consumption growth in doubt, and climate pressure escalating, Riyadh is hoping to cash in some chips today.


Tyler Durden

Wed, 11/06/2019 – 09:40

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Election Day 2019 Was Bad for Republicans. But Is It Really All Trump’s Fault?

Libertarians “happy to split the vote” in Kentucky governor race. “We are always happy to split the vote in a way that causes delicious tears,” the Libertarian Party (LP) of Kentucky posted to Facebook on Tuesday. “Tonight there are plenty of delicious tears from [Republican Gov. Matt] Bevin supporters.”

While off-year elections are always a bit underwhelming, there was still some drama—and a little good news—to come out of Election Day 2019. The biggest story has been from Kentucky, where Democratic gubernatorial candidate Andy Beshear appears to have unseated incumbent Gov. Bevin.

The loss may not stick—Bevin was just 5,189 votes shy of Beshear with all precincts reporting, and is currently refusing to concede the race even after Beshear declared victory.

The Libertarian Party (LP) candidate for governor, John Hicks, received 28,426 votes—far exceeding the margin of difference between the other two candidates.

Bevin was enthusiastically backed by the national GOP and President Donald Trump (who held a big rally in Lexington, Kentucky, on Monday). That he lost anyway has been greeted by many in national news and punditry as an ominous sign for Trump and Trump-style Republicans.

But Gov. Bevin was strongly disliked by Kentuckians, as many from the area have pointed out. (Read, for instance, the Kentucky LP’s thoughts on Bevin here.) And polls showed a pretty even split for Bevin and Beshear before the impeachment investigation into Trump even began.

“The Kentucky gov results are almost entirely self-inflicted,” suggests the Cato Institute’s Caleb Brown, who lives in Kentucky. “That Trump couldn’t fix it (despite his popularity in Kentucky) is the (mostly local) story.”

Despite the spin from national Republicans and Democrats alike, Kentucky’s gubernatorial race results can likely be explained by a controversial and disliked local leader, rather than some sort of downstream referendum on Trump, his administration, or the House impeachment inquiry.

Across the state, Kentucky Republicans did OK: Daniel Cameron won the race for attorney general, Michael Adams was elected secretary of state, and Ryan Quarles was elected state agriculture commissioner.

A few more notable results from yesterday’s voting:

New York City residents approve ranked-choice voting. “The new system, which passed with overwhelming support, will let people rank up to five candidates in order of preference, rather than picking just one to support,” reports the Associated Press. “Other places, including Maine and San Francisco, already use ranked-choice voting systems, but New York City would be employing the system on a far larger scale, with millions more votes to count.” The new system is supposed to start in select races in 2021.

Virginia goes (even more) blue. With yesterday’s wins, Democrats will now control both houses of Virginia’s General Assembly. “Democrats flipped at least two seats in the state Senate and at least five in the House of Delegates to take majorities in both,” reports The Washington Post. Currently, the governor, lieutenant governor, and attorney general of Virginia—a reliably red state from midcentury until the Obama era—are all Democrats, as are both U.S. senators from Virginia and a majority of Virginians in the U.S. House of Representatives.

Philadelphia City Council gets its first third-party member:

In Seattle, left-leaning candidates lost out to more markets-friendly folks:

Danica Roem (D–13th District) was reelected to the Virginia House of Delegates: 

Airbnb screwed over again. New Jersey approved increasing restrictions on Airbnb and other short-term rentals.

Sports betting ballot measure outcome unclear. The final vote tally is still too close to call on a Colorado measure to legalize sports betting. Colorado voters rejected a measure that would have let the state keep leftover tax revenue.


FREE MINDS

Twitter wavers on political issue ad ban. Following complaints from Sen. Elizabeth Warren (D–Mass.) and other politicians about Facebook’s decision on political videos, Twitter CEO Jack Dorsey announced last week that his company would ban both paid advertising by political candidates and ads addressing political issues. A lot of progressives cheered. But now, Warren and some of her acolytes have realized that this crackdown would also ensnare ads about issues they like. And just like that, Dorsey suggested that actually, the issue ad ban wasn’t a done deal at all.

If Dorsey’s comment signals hesitation about the issue ad ban altogether, good. But the fact that his comments come in direct response to Warren’s complaints (and those echoing her) isn’t the most reassuring sign.

In any event, it will be interesting to see how Dorsey’s team deals with defining political issues. Doing it in a way that somehow gives progressive causes a pass is obviously no solution, but anything short of that seems unlikely to appease certain Democratic contingents, who—like their counterparts on the right, but with different threats—wield the specter of regulation and criminal investigation against social media platforms that fail to do their bidding.


FOLLOW UP

No, the president’s constitutional rights aren’t being denied. Julian Sanchez of the Cato Institute throws some reality on the Trump talking point about how the president’s lawyers should be able to confront the whistleblower directly and be present during House impeachment inquiry interviews or else the proceedings are unfair and unconstitutional.

Meanwhile, Gordon D. Sondland, U.S. ambassador to the European Union, has updated his testimony about President Donald Trump’s discussions with Ukrainian President Volodymyr Zelenskiy. In the additional four pages of testimony, released Tuesday, Sondland recalled that, in fact, he did directly tell a high-level Ukrainian official that U.S. aid could be contingent on public commitment to the investigation sought by Trump.

And former Trump lackey Kurt Volker apparently texted this script for Zelenskiy to read:


JUSTICE FOR ALL?

Execution date set for Ray Cromartie. A new execution warrant was issued last Friday for Georgia death row prisoner Ray Cromartie. Cromartie was convicted in the 1994 shooting death of store clerk Richard Slysz, but maintains that he did not fire the fatal shots. Physical evidence that could absolve him of the crime has never been DNA tested. His new execution date is Wednesday, November 13, 2019.

Cromartie’s lawyers, Slysz’s own daughter, and members of their community have released separate statements asking that the state test the evidence before Cromartie is killed. Shawn Nolan, Cromartie’s lawyer, provided Reason with the following statement after the new execution date was set:

The fact is, no one actually knows who the shooter was in the tragic crime for which Ray Cromartie has been sentenced to die. And the identity of the shooter matters; the jury sentenced him to death on the belief that he shot the victims. The state has abundant, viable DNA evidence that could be tested tomorrow to resolve who shot the victims. Among other items, the state has a knit cap and hooded sweatshirt that prosecutors argued at trial were worn by the shooter. The public always has a strong interest in finding the truth, and they do in Mr. Cromartie’s case. DNA testing is essential to ensure that an innocent man is not executed for a murder he did not commit. The State’s rush to execute Mr. Cromartie without DNA testing is tragic for him, and should be troubling for us all.

This section of today’s Reason Roundup comes from Zuri Davis, who has been covering Cromartie’s case. Read more about it here.


QUICK HITS

  • Read an excerpt from Edward Snowden’s new book, Permanent Record, here.
  • FYI:

  • The new HuffPost will be less centered on political news and more focused on service journalism.
  • Ugh: Folks are trying to do to “religious liberty” what they’ve been trying to “free speech” (that is, portray any concern for it as a racist right-wing plot).

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Election Day 2019 Was Bad for Republicans. But Is It Really All Trump’s Fault?

Libertarians “happy to split the vote” in Kentucky governor race. “We are always happy to split the vote in a way that causes delicious tears,” the Libertarian Party (LP) of Kentucky posted to Facebook on Tuesday. “Tonight there are plenty of delicious tears from [Republican Gov. Matt] Bevin supporters.”

While off-year elections are always a bit underwhelming, there was still some drama—and a little good news—to come out of Election Day 2019. The biggest story has been from Kentucky, where Democratic gubernatorial candidate Andy Beshear appears to have unseated incumbent Gov. Bevin.

The loss may not stick—Bevin was just 5,189 votes shy of Beshear with all precincts reporting, and is currently refusing to concede the race even after Beshear declared victory.

The Libertarian Party (LP) candidate for governor, John Hicks, received 28,426 votes—far exceeding the margin of difference between the other two candidates.

Bevin was enthusiastically backed by the national GOP and President Donald Trump (who held a big rally in Lexington, Kentucky, on Monday). That he lost anyway has been greeted by many in national news and punditry as an ominous sign for Trump and Trump-style Republicans.

But Gov. Bevin was strongly disliked by Kentuckians, as many from the area have pointed out. (Read, for instance, the Kentucky LP’s thoughts on Bevin here.) And polls showed a pretty even split for Bevin and Beshear before the impeachment investigation into Trump even began.

“The Kentucky gov results are almost entirely self-inflicted,” suggests the Cato Institute’s Caleb Brown, who lives in Kentucky. “That Trump couldn’t fix it (despite his popularity in Kentucky) is the (mostly local) story.”

Despite the spin from national Republicans and Democrats alike, Kentucky’s gubernatorial race results can likely be explained by a controversial and disliked local leader, rather than some sort of downstream referendum on Trump, his administration, or the House impeachment inquiry.

Across the state, Kentucky Republicans did OK: Daniel Cameron won the race for attorney general, Michael Adams was elected secretary of state, and Ryan Quarles was elected state agriculture commissioner.

A few more notable results from yesterday’s voting:

New York City residents approve ranked-choice voting. “The new system, which passed with overwhelming support, will let people rank up to five candidates in order of preference, rather than picking just one to support,” reports the Associated Press. “Other places, including Maine and San Francisco, already use ranked-choice voting systems, but New York City would be employing the system on a far larger scale, with millions more votes to count.” The new system is supposed to start in select races in 2021.

Virginia goes (even more) blue. With yesterday’s wins, Democrats will now control both houses of Virginia’s General Assembly. “Democrats flipped at least two seats in the state Senate and at least five in the House of Delegates to take majorities in both,” reports The Washington Post. Currently, the governor, lieutenant governor, and attorney general of Virginia—a reliably red state from midcentury until the Obama era—are all Democrats, as are both U.S. senators from Virginia and a majority of Virginians in the U.S. House of Representatives.

Philadelphia City Council gets its first third-party member:

In Seattle, left-leaning candidates lost out to more markets-friendly folks:

Danica Roem (D–13th District) was reelected to the Virginia House of Delegates: 

Airbnb screwed over again. New Jersey approved increasing restrictions on Airbnb and other short-term rentals.

Sports betting ballot measure outcome unclear. The final vote tally is still too close to call on a Colorado measure to legalize sports betting. Colorado voters rejected a measure that would have let the state keep leftover tax revenue.


FREE MINDS

Twitter wavers on political issue ad ban. Following complaints from Sen. Elizabeth Warren (D–Mass.) and other politicians about Facebook’s decision on political videos, Twitter CEO Jack Dorsey announced last week that his company would ban both paid advertising by political candidates and ads addressing political issues. A lot of progressives cheered. But now, Warren and some of her acolytes have realized that this crackdown would also ensnare ads about issues they like. And just like that, Dorsey suggested that actually, the issue ad ban wasn’t a done deal at all.

If Dorsey’s comment signals hesitation about the issue ad ban altogether, good. But the fact that his comments come in direct response to Warren’s complaints (and those echoing her) isn’t the most reassuring sign.

In any event, it will be interesting to see how Dorsey’s team deals with defining political issues. Doing it in a way that somehow gives progressive causes a pass is obviously no solution, but anything short of that seems unlikely to appease certain Democratic contingents, who—like their counterparts on the right, but with different threats—wield the specter of regulation and criminal investigation against social media platforms that fail to do their bidding.


FOLLOW UP

No, the president’s constitutional rights aren’t being denied. Julian Sanchez of the Cato Institute throws some reality on the Trump talking point about how the president’s lawyers should be able to confront the whistleblower directly and be present during House impeachment inquiry interviews or else the proceedings are unfair and unconstitutional.

Meanwhile, Gordon D. Sondland, U.S. ambassador to the European Union, has updated his testimony about President Donald Trump’s discussions with Ukrainian President Volodymyr Zelenskiy. In the additional four pages of testimony, released Tuesday, Sondland recalled that, in fact, he did directly tell a high-level Ukrainian official that U.S. aid could be contingent on public commitment to the investigation sought by Trump.

And former Trump lackey Kurt Volker apparently texted this script for Zelenskiy to read:


JUSTICE FOR ALL?

Execution date set for Ray Cromartie. A new execution warrant was issued last Friday for Georgia death row prisoner Ray Cromartie. Cromartie was convicted in the 1994 shooting death of store clerk Richard Slysz, but maintains that he did not fire the fatal shots. Physical evidence that could absolve him of the crime has never been DNA tested. His new execution date is Wednesday, November 13, 2019.

Cromartie’s lawyers, Slysz’s own daughter, and members of their community have released separate statements asking that the state test the evidence before Cromartie is killed. Shawn Nolan, Cromartie’s lawyer, provided Reason with the following statement after the new execution date was set:

The fact is, no one actually knows who the shooter was in the tragic crime for which Ray Cromartie has been sentenced to die. And the identity of the shooter matters; the jury sentenced him to death on the belief that he shot the victims. The state has abundant, viable DNA evidence that could be tested tomorrow to resolve who shot the victims. Among other items, the state has a knit cap and hooded sweatshirt that prosecutors argued at trial were worn by the shooter. The public always has a strong interest in finding the truth, and they do in Mr. Cromartie’s case. DNA testing is essential to ensure that an innocent man is not executed for a murder he did not commit. The State’s rush to execute Mr. Cromartie without DNA testing is tragic for him, and should be troubling for us all.

This section of today’s Reason Roundup comes from Zuri Davis, who has been covering Cromartie’s case. Read more about it here.


QUICK HITS

  • Read an excerpt from Edward Snowden’s new book, Permanent Record, here.
  • FYI:

  • The new HuffPost will be less centered on political news and more focused on service journalism.
  • Ugh: Folks are trying to do to “religious liberty” what they’ve been trying to “free speech” (that is, portray any concern for it as a racist right-wing plot).

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