Florida Mayor Accused of Requesting Sex in Exchange for Speed Bumps

David Stewart’s tenure as mayor of Lantana, Florida, has hit a speed bump.

In 2015, Catherine Padilla asked the city government to install safety speed bumps after cars in her neighborhood hit a poodle, a cat, and a young girl. Padilla claims Stewart said he’d make sure the speed bumps were installed—if she had sex with him.

According to an ethics panel, there’s “probable cause” to think she’s telling the truth.

Padilla says that after having lunch with the mayor one day, he drove her to a local motel and said he wanted to “occupy” a room together, The Palm Beach Post reports.

“He pulled into this motel and got out of his van and I just kept motioning no, no I’m not interested,” Padilla told WPTV in February.

She has also said that before the Lantana Town Council voted on the speed bumps, the mayor told her he’d make sure they were approved if she slept with him. Once more, she refused.

The council approved the speed bumps anyway, but Padilla says that Stewart threatened to have them removed.

In January of this year, Padilla filed a complaint about Stewart with the Florida Commission on Ethics. Stewart, who’s been mayor of Lantana since 2000, has denied the allegations. “In the 18 years I’ve been mayor there has never been a quid pro quo or anything asked for or given in favor of me voting in a special or certain direction,” he told WPTV in February.

Stewart says he didn’t go to lunch with Padilla or drive her to a motel. But a local pastor, Michael DeBehnke, told the commission he saw the two at lunch together.

On October 24, the commission announced in a press release there was “probable cause” to believe Stewart acted inappropriately:

The Commission found probable cause to believe that Lantana Mayor DAVID STEWART misused his position to attempt to obtain a sexual benefit for himself. Probable cause also was found to believe he solicited sex from a constituent based on an understanding his vote, official action, or judgment would be influenced.

Stewart subsequently told the Palm Beach Post it would be “inappropriate to comment at this time.”

Commission spokesperson Kerrie Stillman tells the Post that Stewart can either settle the case or go before an administrative law judge. If he chooses the second option and is found guilty, he could be fined, suspended, or kicked out of office.

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Stocks Jump After Trump Says He Spoke To President Xi “On Trade”, Discussions “Moving Along Nicely”

Moments after stocks stumbled after the latest disappointing, and rather stagflationary Manufacturing ISM print, the S&P spiked higher following a Trump tweet in which the president said he just had a “very good” conversation with Chinese’ president Xi, in which the emphasis was on trade and added that “discussions are moving along nicely.”

The optimistic tweet reversed much of the early morning pessimism, which had nearly brought the Dow to the unchanged line, and sent the Dow Jones to session highs, up as much as 150 points, as sentiment once again shifts on trade, this time with markets now expecting a favorable outcome from the G-20 meeting between the two presidents.

The Chinese Yuan also spiked to session highs following Trump’s tweet:

Ironically, the news comes at the very same time that AG Jeff Sessions is said to announce a new initiative in response to China’s economic espionage, according to a U.S. official. The Initiative will be led by agency’s National Security Division Head John Demers and will increase the use of DOJ tools to counter China’s activities.

According to Bloomberg, Sessions is ordering the FBI and NSD to step up enforcement, and DOJ will select five U.S. attorneys to be part of the initiative. The announcement will be coupled with unsealing today of a criminal case by the U.S. Attorney for the Northern District of California that involves a Chinese co. that stole trade secrets from a U.S. company.

However, as shown above, stocks are ignoring the DOJ news and focusing solely on Trump’s tweet as the market’s bipolar nature once again emerges to the surface.

 

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Elizabeth Warren Challenges Trump’s Protectionist Tariffs for Not Being Protectionist Enough

Artificially hiking the price of steel and aluminum is bad enough, but one of the really galling parts of the Trump administration’s tariff policy is the Commerce Department’s process for determining which businesses are exempt from paying these import taxes. As I’ve written before, the so-called “tariff exclusion process” is opaque, confusing, completely lacking in due process, and infested with cronyism.

It’s good to see some members of Congress calling out the administration for this mess. That’s what Sen. Elizabeth Warren (D–Mass.) does in a letter sent Wednesday to Commerce Secretary Wilbur Ross, the guy who is supposed to be overseeing the tariff exemptions.

Unfortunately, a significant part of Warren’s letter makes the argument that what’s needed is more protectionism, not less.

“You appear to be implementing the tariff exemption program in a way that undermines American steel producers—by allowing large tariff-free imports of foreign steel—and harms American-owned steel-dependent companies instead of improving their competitive advantage over companies headquartered in China and other foreign countries,” Warren writes. Specifically, she says granting tariff exemptions to Chinese- and Japanese-owned companies with U.S. subsidiaries constitutes “a major loophole.”

When the steel and aluminum tariffs were implemented in March, Ross promised that the department would operate a “fair and transparent process” to determine which businesses should be exempt from the tariffs. According to the government’s websites outlining the tariff exclusion process for steel and aluminum, the exemptions would be granted for businesses that could demonstrate that there was not adequate domestic supply of the type of steel or aluminum they needed. There is virtually no information about who is deciding which exemptions get granted, or why, or how. It leaves the impression that the department is trying to make a high-stakes game that’s full of political influence look like a rote bureaucratic operation.

Problems with the process emerged almost immediately. Businesses have complained to congressional committees about a lack of transparency from the Commerce Department, about the inability to appeal the Commerce Department’s decisions, and about the influence exerted by American steelmakers on the outcome of exemption applications.

“No forum is provided for interaction with those determining the merits of either the petitioners’ or the objectors’ arguments,” Willie Chiang—vice president of Plains All American GP, a Texas-based pipeline company that’s been on the losing end of the exemption process—told the House Ways and Means Committee in July. “In addition, there is no opportunity to respond to objections—even if the objections contain incorrect information.”

Some Republican lawmakers, including House Ways and Means Committee chairman Kevin Brady (R-Texas), and Sen. Ron Johnson (R-Wis.) have criticized the exemption process and called for changes, seemingly to no avail.

As of mid-October, the Commerce Department had received more than 30,000 steel tariff exclusion requests, and approved about 11,000 of them. Warren’s staff analyzed the first 909 decisions posted, and found that 81 percent of the exemptions granted were awarded to companies headquartered outside the United States. More than half of those exemptions were awarded to Japanese-based businesses and more than 80 percent to Chinese- and Japanese-owned businesses, she says in the letter to Ross.

“How is this outcome,” she asked, “consistent with President Trump’s claims that the tariffs and the tariff exemption process were designed to help American steel producers and users?”

Let’s be clear: The exemption process is a horror show. It’s fundamentally unfair to have government officials in Washington, D.C., deciding that one company has to pay an additional 25 percent for imported steel while some of its competitors are able to avoid those added taxes. The fact that those decisions are made without any recourse or due process is more infuriating still.

But the problem isn’t that the majority of the exemptions are going to foreign-based firms. At most, that’s a symptom of the issues created by the tariffs and the tariff exemption process. If the majority of the exemptions were granted to American firm, the process would be just as broken.

Warren’s letter leaves the impression that she thinks the Commerce Department is being too lenient about granting exemptions. But short of repealing the tariffs entirely, the best possible outcome would be for Congress to instruct the department to approve all exemption applications, regardless of whether they come from American-owned or foreign companies. Her complaint that the Trump administration is not doing enough to favor American firms over foreign competitors is not a criticism of the tariffs themselves; it’s an indication that Warren would have no qualms with the president wielding those same powers as long as they were applied in a slightly different way.

Politically, this is an attempt to beat the Trump administration at its own game. That might be politically useful for Democrats who want to wrestle blue-collar voters away from Trump. Indeed, one way to look at Warren’s letter is as a trial balloon for how to attack Trump’s tariffs in 2020. But it ends up being an argument for more protectionism, and it essentially turns the tariff debate into a question of which side can promise to erect more barriers to foreign imports. That’s a debate in which America loses, no matter which party wins.

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US Manufacturing Slumps As Prices Jump, Export Orders Dump, Financial Conditions Tighten

Despite drastically tightening financial conditions, ‘soft’ survey data on US Manufacturing was expected to rise in October, but – as always – it was mixed:

  • Markit’s Manufacturing PMI printed higher at 55.7 (marginally higher than September’s 55.6 but below the October flash print of 55.9)

  • ISM Manufacturing Printed dramatically lower at 57.7 (well below expectations of 59.0 and down from September’s 59.8)

It appears ISM is catching down to reality as ‘hard’ economic data continues to creep lower and disappoint:

ISM Manufacturing is at its weakest since April 2018 (as new orders drop to lowest since April 2017)

While Markit’s Prices Paid index is soaring, ISM’s has been falling recently but prices bounced in October as Export Orders collapsed to weakest since Nov 2016…

So while ISM is a terribly dismal print, Markit is ebullient…

Chris Williamson, Chief Business Economist at IHS Markit said:

“The manufacturing sector saw a strong start to the closing quarter of 2018, with new order inflows rising sharply and business optimism spiking higher in an encouraging sign that firms expect the good times to continue into 2019.

“The increasingly bullish mood was also reflected in one of the largest monthly increases in factory payroll numbers seen over the past seven years as firms grew capacity to meet rising workloads.

“The key area of concern remained tariffs, which were widely reported to have contributed to another month of stalled export sales and a steep rise in prices for many inputs. Average input prices rose at one of the sharpest rates seen over the past six years in October.

“In a clear sign that inflationary pressures are continuing to build, strong customer demand meant firms were often able to push cost increases through to selling prices.

Average prices charged for goods leaving the factory gate consequently jumped to one of the greatest extents seen since mid-2011.”

We suspect ISM is right on this one!!

When does the soft survey data catch down to tightening financial conditions?

Or the ‘hard’ economic data?

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Does This Bounce Mean The Sell-Off Is Over?

Authored by Jesse Colombo via RealInvestmentAdvice.com,

The Dow was up 241 points yesterday and the Bubble Heads already think it’s “back to the races again.” I’m still cautioning “not so fast!,” however. Nothing has changed technically since last week’s major technical breakdown that caused the bellwether S&P 500 to close below a very important uptrend line that started in early-2016. The “Godfather” of chart analysis Ralph Acampora feels the same way as me and said that the “damage done to the stock market is much, much worse” than anyone is talking about.

According to the chart below, the S&P 500 is still below its uptrend line, which means that the breakdown is still intact. The uptrend line is now an overhead resistance level. All of the movement that occurs between this line and the 2,550 to 2,600 support zone (the early-2018 lows) is basically randomness or “noise,” not “signal.” The S&P 500 would need to break back above its former uptrend line in a convincing manner in order to negate the breakdown. As I’ve been saying, the S&P 500 is likely to continue testing its 2,550 to 2,600 support zone before its able to stage a decent bounce. If the index closes below this zone, it would likely signal further declines ahead.

Despite the bounce of the past two days, the Nasdaq Composite index is still below its uptrend line that it broke last week, which means that the breakdown is still intact:

As I explained yesterday, I am watching if a bearish head and shoulders pattern is forming in the S&P 500 and other major U.S. stock indices. If we are actually following this pattern, the left shoulder was the late-2017 surge and early-2018 plunge, the head was the summer surge and October plunge, the S&P 500 would have further to drop in order to test its neckline, and a final “dead cat bounce” would be ahead as the right shoulder forms. 

I am not predicting or guaranteeing that the market is forming a head and shoulders topping pattern. I am simply curious to see if we are forming this pattern, so I am taking a “wait and see” approach. Importantly, technical analysis is not a guarantee of future outcomes. It is the analysis of previous price trends in order to apply probabilities to our portfolio management. What this analysis clearly suggests is an environment of mounting risks in the markets which our entire portfolio management team at Real Investment Advice and Clarity Financial have been keenly focused on.

As portfolio managers, we are aware of the damage sudden and unexpected downdrafts in markets can have on invested capital. Our team produces commentary each week which discusses the near term trends of the market and how we are navigating the increasingly dangerous waters of an overvalued, late cycle, bull market. If you tired of being told to just “ride it out,” and are concerned about growing your wealth, and protecting your financial future, click here to ask me a question to find out more.

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In Europe and in Pakistan, Two Women Are Condemned for Insulting Muhammad: New at Reason

|||Georgerudy/Dreamstime.com

Insulting Muhammad is a risky business these days. Not only in Muslim-majority nations with stiff blasphemy laws, but also in supposedly enlightened Europe. Yes, even on a continent that loves to trumpet its commitment to freedom of speech, mocking Muhammad can land you in hot water.

Consider the recent trials of two women who committed the speech crime of insulting the Prophet, one in Pakistan and the other in Austria.

In Pakistan, Asia Bibi, a Christian, has finally had her death sentence for blasphemy overturned.

Bibi was found guilty of blasphemy in 2010 after she got into a row with neighbours during which they insulted her Christian faith and she fired back with a swipe at Muhammad. (She has always denied doing this.)

Under Pakistan’s cruel, archaic blasphemy laws—first introduced by the British Raj in 1860 and strengthened under the military rule of General Muhammad Zia-ul-Haq in the 1980s—it is a crime to insult religious beliefs, willfully desecrate the Koran, or insult the Prophet.

The price for destroying a Koran? Life in prison. For mocking Muhammad? Death, writes Brendan O’Neill in his latest piece for Reason.

View this article.

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Alabama Abortion Fight Could Come to the Supreme Court: Reason Roundup

Abortion, politics, and the law. In Alabama, a 2016 law banned abortion by “dilation and extraction” (D&E), the most common procedure used to perform abortions after the first trimester. The law was rejected by a federal judge, in a decision upheld in August by the 11th Circuit U.S. Court of Appeals. Now Alabama Attorney General Steve Marshall’s office is hoping to take the case to the Supreme Court.

On Tuesday, the office indicated that it would file a petition for the Court to review the case but needed additional time to file. “The constitutionality of a state ban on dismemberment abortion is an important question of national significance,” wrote Alabama lawyers in their motion.

Reproductive freedom has taken a backseat to immigration and other cultural flashpoints in the Trump era, but legal battles and political drama surrounding abortion have still been raging in some states. For instance, California’s “FACT Act”—deemed unconstitutional by the Supreme Court in June—just got a final blow from the lower court that it was sent back to. The federal district court order permanently bans enforcement of the law, which would have required anti-abortion pregnancy centers to post signs advertising state aid for abortion.

And next week’s midterm elections feature some states voting on referenda directly related to abortion and others where the issue has become a major sparring theme between gubernatorial candidates.

  • West Virginians will be asked to vote on a measure (Amendment 1) saying nothing in the state constitution “protects a right to abortion or requires the funding of abortion.”
  • Voters in Alabama will consider a similar initiative (Amendment 2).
  • In Oregon, Measure 106 would ban the use of public funds for abortions unless they are deemed medically necessary by a doctor.

Abortion “has consistently animated Republican voters more than Democrats,” points out Daniel Cox today at FiveThirtyEight. “Two new surveys, however, reveal a remarkable shift in how important the issue of abortion is to Democrats and Republicans ahead of the 2018 midterm election.”

A PRRI survey found 47 percent of Democrats say abortion is a critically important issue to them, compared to 40 percent of Republicans. Meanwhile, Pew found that “abortion is a far more central voting concern for Democrats today than it has been at any point in the last decade,” notes Cox.

Ten years ago, just 38 percent of Democratic voters said abortion was very important to their voting decisions that year. In the most recent survey, 61 percent of Democratic voters said it was very important.

FREE MINDS

No talking about diet without a license? New Jersey is considering new rules for nutritionists and anyone offering healthy eating advice.

FREE MARKETS

Lawsuit offers new details on Operation Choke Point.

“New documents introduced into a lawsuit stemming from the Obama administration’s ‘Operation Choke Point’…show that powerful bank regulatory agencies engaged in an effort of intimidation and threats to put legal industries they dislike out of business by denying them access to the banking system,” reports John Berlau at Forbes. More:

While I am often outraged about things the government does, now I am truly scared and frightened about the ability of government bureaucrats to shut down arbitrarily whole classes of businesses they deem to be “politically incorrect.” As one who champions the FinTech sector and the benefits it can bring, I also worry that such powers may be uses to shut down innovative new industries, such as cryptocurrency, that carry some perceived or real risks.

Choke Point was a multi-agency operation in which several entities engaged in a campaign of threats and intimidation to get the banks that they regulate cut off financial services—from providing credit to maintaining deposit accounts—to certain industries regulators deemed harmful a bank’s “reputation management.” The newly released documents—introduced in two court filings in a lawsuit against Choke Point—show that the genesis of Choke Point actually predated Barack Obama’s presidency, and began when President George W. Bush was in power.

For Reason‘s previous coverage of Operation Choke Point, see:

FOLLOW-UP

U.S.-Mexico border could see up to 15,000 U.S. troops. President Donald Trump’s demonization of the Central American migrant caravan continues, as do his pledges to send ever-more-ridiculous numbers of troops to America’s southern border.

Yesterday, Trump shared an anti-Democrat, anti-refugee video that’s being widely panned as racist and irresponsible.

QUICK HITS

  • When considering whom to vote for, the question isn’t just “what their stated positions are, but whom are they willing to recognize and listen to?”
  • Vice finds that “just about anyone can buy an ad identified as ‘Paid for by’ by a major U.S. politician.”
  • The existence of intersex people doesn’t mean sex is a spectrum, argues Debra Soh. “Certainly, research has shown that as many as 1 percent of the population is intersex, a medical condition denoting that an individual possesses anatomy characteristic of both sexes, such as a combination of vulvar and testicular tissue. Statistically speaking, however, this means that the vast majority of us fall into one category of sex or the other.”
  • A city ordinance let officers harass strippers as part of a licensing inspection process. A judge ruled it unconstitutional, and now cops must pay $1.5 million.

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Nomura: Who Is The Source Of “Short Gamma” Moving The Market Higher?

After two days of torrid moves higher in the market – a two-day rally into month end of +2.67% which was the biggest since February and the third biggest since June 2016 – and one which appears set to continue today, some are wondering if there is an unknown source of short-gamma who is “forced” to chase stocks higher – i.e., a short who is forced to cover exposure, and caught in a “negative convexity” trap, is pushing the market sharply higher – Nomura’s Charlie McElligott confirms that the US stock market continues to trade “like there’s an implicit & incremental source of “short gamma” in the market” and suggests that said “short gamma” would likely be contained within the “fundamental” universe (both hedge and mutual funds), who are not actually short option delta but are increasingly likely to act as “forced buyers” the higher stocks rise.

The rip higher is taking place after last month’s 1) “mass de-gross/cutting of nets” and 2) enormous reduction of “market” factor risk exposure which crippled relative hedge fund exposure, especially among long/short equity funds (here, McElligott observes that “Beta” market-neutral was -10.9% in Oct despite including yday’s +2.9% rally — the sixth worst month for the factor since 2010 — as crowded portfolio positioning “long high beta / short low beta” was liquidated).

Framing the dynamic in terms of a “gamma short” or continued “forced” chasing is important, as many doubt the ability for funds to “play offense” following the extreme performance-pain suffered over the past few months; however, as the Nomura strategist writes they are de facto “getting short-er” the higher the market moves in their absence – thus to McElligott, they are “dynamically hedging” with spastic trading in Spooz (as opposed to options due to their “richness” right now).

Meanwhile, the systematic funds have already jumped on board, and according to Nomura calculations the equity “gap higher” (S&P minis +4.8% since Monday night’s low-tick) has forced incremental Systematic fund releveraging as well in U.S. Equities: as a result, the Nomura Trend CTA model shows SPX positioning now “+60% Long” from “+31% Long” two days ago; Russell to “+60% Long” from “-100% Max Short” last week; and Nasdaq to “+60% Long” from just “+31% Long” yesterday.

This would also suggest that if stocks again reverse direction lower, the now familiar late day selling burst which is largely the result of quant deleveraging, could once again result in near record low TICK prints, and send the market tumbling once more.

Meanwhile, the macro sentiment appears to be shifting to bullish again, as per the following observations from the Nomura cross-asset strategist:

  • With ISM, PMIs and tomorrow’s NFP (with some estimates now higher post the ADP leap), we have further macro potential for resumption of status-quo “bearish USTs / bullish Equities” to reverse October pain for this consensual view, as it was the best 1m performance of the Bloomberg Barclays U.S. Treasury Index relative to S&P 500 Total Return since January 2016
  • Between the better data and the U.S. Equities relief, STIRs are again re-pricing as the Fed gains “breathing room” to maintain normalization: EDZ8Z9 is at 46bps of hikes in ’19, and EDZ9Z0 is now again positive, i.e. NO longer implying a modest Fed easing in 2020
  • Another risk-asset catalyst: the first day of the new month sees the U.S. Dollar suffering its worst day in over three weeks despite weaker Asian Manu PMIs (confirmed ‘trade war’ bleed), as the rest of G10 explodes higher on idiosyncratic drivers (GBP and EUR higher on “reported” Brexit deal with EU on financial services industry; Antipodeans on stronger Aussie trade surplus data) with EM and Metals bouncing as well
  • More Chinese stimulus planned to help spur domestic consumption, with Vice Premier Zou Jiayi saying the country is planning more tax cuts, with too we are seeing a report from Reuters stating that the PBoC held a meeting with commercial banks on Wednesday to “encourage” issuance of bonds to provide additional sources of liquidity for corporates

Of course, a reversal in the recent negative macro data is ultimately bearish for risk assets – it will reinforce Powell’s thinking that the neutral rate is well higher, and needs an overshoot.

The irony is that with the “data-driven” Fed having a lot of new info to digest over the next few days, even as U.S. financial conditions are “tightening” further at this moment, McElligott concludes that “markets show an asymmetric bias to “good data” perversely sowing the seeds for our next inevitable risk-asset tantrum, especially with the “QT impulse” accelerating again following yesterday’s big SOMA run-off and the upcoming on Nov 21st.

In this regard, a big “tell” will be the ISM Manufacturing Index, which has historically been highly correlated with US financial conditions. After the near record prints in recent months, one can argue that a sharp move lower is now inevitable.

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Activist Fund Takes 3% Stake In Deutsche Bank As China Bails

October was a rocky month for stocks and banking shares were no exception, with analysts pointing out that shares crashed hard, mimicking a pattern that surfaced in the immediate run-up to the financial collapse ten years ago.

GBP

And as the banking sector emerged as one of the worst performers during a brutal month, as they often do, Deutsche Bank shares stood out as one of the worst performers as shares tumbled to all-time lows for the first time in roughly two years following a disappointing earnings report, reigniting perennial fears that the bank would need to be broken up or bailed out, even as rumors about a possible merger with Commerzbank continued to circulate. Making a bad situation that much worse, what was formerly one of the bank’s largest shareholder, Chinese conglomerate HNA, has been dumping its shares amid a spate of government-ordered deleveraging. 

DB

But as HNA dumped, it appears another institutional investor has stepped up to take the other side of the trade, sensing that, under a layer of dysfunctional management, there is hidden value there, particularly in DB’s retail and trade-finance operations. As the Wall Street Journal reported, Hudson Executive Capital LP, led by former JP Morgan Chase & Co. finance chief Douglas Braunstein, has taken a 3% stake in the German lender – effectively taking the other side of the trade from HNA – cementing the activist fund’s status as a top-five shareholder.

Braunstein told WSJ that his trust in DB’s turnaround plan stems from his confidence in the bank’s new chief executive, Christian Sewing, a longtime employee who was brought in to replace John Cryan earlier this year. Since Sewing has taken over, the bank has failed a Federal Reserve stress test and paid a more than $500 million fine over its involvement in a $10 billion Russian money laundering scandal. But that hasn’t dampened investors’ hopes that the bank’s turnaround man du jour might finally be able to produce some tangible results. As he told WSJ, the activist investor believes DB is taking “the right steps” to facilitate the badly needed turnaround.

Hudson Executive Capital LP, led by former JPMorgan Chase & Co. finance chief Douglas Braunstein, said it has built about a 3.1% stake in Deutsche Bank common shares.

The investment, Hudson’s biggest so far, was made in recent months as Deutsche Bank shares plumbed all-time lows. The roughly $620 million stake makes Hudson a top-five shareholder, and the first new one of size since the bank’s latest restructuring and CEO change in April.

In an interview, Mr. Braunstein called Deutsche Bank “misunderstood and undervalued,” a conclusion he drew during almost a year of talking to current and former executives and other finance contacts. His initial impression in late 2017 was that the management team at the time was “as dysfunctional as you could basically find.” Current executives seem unified in efforts to cut costs and boost revenues, he said.

In Braunstein’s estimation, Sewing, who is refocusing the bank on its European roots, is “the man for the job.”

He called transaction banking a “crown-jewel asset” that helps provide affordable funding, easing one of the lender’s big problems – its higher-than-average funding costs.

Mr. Sewing, a career Deutsche Bank employee who became CEO when the supervisory board fired his predecessor, has said he is refocusing on the lender’s roots serving European companies and making its German retail banking more efficient. He wants it to be less dependent on trading businesses that historically have driven profits but have become more volatile.

Mr. Braunstein praised Mr. Sewing. “We would not have made the investment but for the fact that we think he’s the right guy for the job,” Mr. Braunstein said.

The fact that DB has hired Cerberus Capital to help guide the turnaround helped cement Braunstein’s confidence.

He added that a move by private-equity firm Cerberus Capital Management LP and its president, Matt Zames, to formally advise Deutsche Bank on cost-cutting and operational challenges was “a very significant positive.” Cerberus in November 2017 disclosed a roughly 3% position in the bank. Earlier this year, in an unorthodox move, Cerberus also became a paid adviser to Deutsche Bank. Messrs. Braunstein and Zames had worked together closely in senior JPMorgan roles. Mr. Zames was JPMorgan’s chief operating officer before leaving the bank last year.

The activist taking a share in a major investment bank isn’t without precedent. Some might remember that analysts, including CLSA’s Mike Mayo, praised ValueAct for its decision to take a 2% “activist” stake in Morgan Stanley two years ago, with Mayo proclaiming that this level of accountability was “what the banking sector needs.” He went on to explain that while Morgan Stanley has “an excellent franchise,” its “execution has fallen short.”

For his part, Sewing praised Braunstein and and thanked him for the vote of confidence. “We appreciate Hudson Executive’s confidence in our ability to execute on our strategic objectives,” Deutsche Bank CEO Christian Sewing says in e-mailed statement.

For Deutsche Bank, the first statement doesn’t really apply – the German lending giant is still struggling to shake off the trappings of the financial crisis – while the second is an exercise in understatement. Amid legal settlements related to DBs reckless sales of toxic mortgage-backed securities, massive unchecked derivatives exposure and floundering trading and investment banking businesses, Deutsche is a shambles. 

And while Braunstein’s confidence in Sewing might be a comfort to board members by affirming that, for now at least, it appears they have bet on a horse with real potential, Sewing wouldn’t be the first DB CEO in recent years who was heralded as a savior, only to leave the job exhausted and defeated. But, then again, if he could demonstrate even a minor improvement in earnings and fiscal accountability, there’s definitely a lot of upside baked into DB’s shares.

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Did The Saudi Hit Squad Dissolve Jamal Khashoggi’s Body In Acid?

Friday will mark one month since Jamal Khashoggi waltzed into the Saudi consulate in Istanbul, planning to pick up paperwork that would allow him to legally marry his Turkish girlfriend, and was never heard from or seen again. And despite repeated demands from Turkish authorities that the Saudi government reveal the location of Khashoggi’s remains, or at least identify the “local collaborator” who is said to have disposed of the body, the kingdom has repeatedly refused.

The Saudi prosecutor’s inexplicable refusal to help with the recovery of Khashoggi’s remains has apparently led the Turks to conclude that one of the particularly gruesome rumors about the circumstances of Khashoggi’s demise just might have been true. That is, after he was strangled and dismembered inside the consulate, Khashoggi’s remains were dissolved in a vat of acid, then dumped either in a well on the property of the consul general, or somewhere on the consulate grounds, according to Washington Post

Khashoggi

Initially, Turkish investigators focused their search for Khashoggi’s body on two wooded areas outside of Istanbul, partly inspired by surveillance footage that Turkish authorities said showed Saudi diplomatic vehicles apparently scouting Belgrad Forest the night before the journalist was killed.

Last week, investigators suspended the search, focusing instead on the consulate’s grounds and the consul general’s residence. The search focused in particular on a well on consular property, where The Turks believe the assailants may have disposed of Khashoggi’s dissolved remains. According to WaPo, biological evidence uncovered during the search of the consul’s residence suggests that Khashoggi’s remains were disposed of near where he was dismembered. 

A senior Turkish official said in an interview that Turkish authorities are pursuing a theory that Khashoggi’s dismembered body was destroyed in acid on the grounds of the Saudi Consulate or at the nearby residence of the Saudi consul general. Biological evidence discovered in the consulate garden supports the theory that Khashoggi’s body was disposed of close to where he was killed and dismembered, the official said.

“Khashoggi’s body was not in need of burying,” said the official, who spoke on the condition of anonymity to discuss a sensitive investigation.

Turkish prosecutor Irfan Fidan issued a public statement on Wednesday detailing the killing in the most explicitly overt terms since the investigation began. The statement followed the departure of Saudi prosecutor Saud al-Mojeb, whom the Turks have accused of stymieing the probe. As US lawmakers’ calls to suspend a US-Saudi civil nuclear agreement grow louder, any confirmation that Khashoggi’s body was, in fact ,dissolved in acid could reignite the international outcry over the brutal extradition kingdom, and renew calls that members of the Saudi leadership, particularly Crown Prince Mohammad, be made to face consequences for what appears to have been an act of unmitigated brutality. 

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