Tag: finance

Authored by Mike Shedlock via MishTalk,

The Fed’s proposal marks one of the most significant rollbacks of bank regulations since Trump took office…

The Wall Street Journal reports Fed Proposes Looser Rules for Large U.S. Banks

The Federal Reserve announced one of the most significant rollbacks of bank rules since President Trump took office with a proposal for looser capital and liquidity requirements for large U.S. lenders.

The changes would affect large U.S. lenders including U.S. Bancorp , Capital One Financial Corp. , and more than a dozen others. The largest U.S. banks, including JPMorgan Chase & Co., wouldn’t see any significant rule changes, and some in the industry thought the proposal didn’t go far enough.

The draft proposal, approved by a 3-1 vote at a Wednesday meeting of the Fed’s governing board, would divide big banks into four categories based on their size and other risk factors. Regional lenders would be either entirely released from certain capital and liquidity requirements, or see those requirements reduced. They could also, in some cases, be subject to less frequent stress tests.

The proposals received a mixed reaction from banks. While some trade groups praised it, Greg Baer—president of the Bank Policy Institute, which represents large banks—said the proposal “does not do enough to tailor regulations.” He said, for instance, the plan doesn’t include changes to the Fed’s primary stress tests for big banks or to rules affecting foreign-owned banks with U.S. footprints. Fed officials said they were planning future proposal in those areas.

The plan divided the Fed, with Trump-appointed regulators and the Fed’s lone Obama-appointed official taking opposite sides. Fed Chairman Jerome Powell said the proposal would cut the regulatory burden “while maintaining the most stringent requirements for firms that pose the greatest risks.”

Fed governor Lael Brainard dissented. The Obama appointee said the policy changes “weaken the buffers that are core to the resilience of our system” and raise “the risk that American taxpayers again will be on the hook.”

Less Regulation Needed

My “Just in Time Stimulus” headline was meant as sarcasm, in case anyone missed it.

Yet, I am all in favor of less regulation. This is what we need.

1. End the Fed

2. End fractional reserve lending

3. End the bailouts

4. End deposit insurance

5. Let the free market select what is money

Failure of Regulation

All five points above are failures of regulation, not failures to regulate.

If we are to enact my plan, by all means let banks lend however the hell they want. The free market will take care of what’s needed.

If banks make poor lending choices, they will fail. And that’s a good thing.

As it sits, looser lending standards coupled with the current credit bubble, housing bubble, equity bubbles, and a junk bond bubble is not the best thing to do right now.

Lowering capital standards is downright idiotic in light of the need for point number two above.

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After the furious move in the market in the past two days, numerous theories have already sprung up seeking to explain the sharp reversal in the downward risk pressure observed through most of October, with some speculating that the macro data is finally turning, that China is getting more aggressive in backstopping its capital markets, that underwater hedge funds are scrambling to load up on high beta names in a last-minute rush to catch up with the market, or that the selling pressure has simply been exhausted.

While all those may have some validity, they all try to goalseek the price action with some grand unifying narrative.

As to what is really happening, we go to Morgan Stanley’s Equity Derivatives team, which in a note released moments ago provides a startling answer: yesterday’s move was nothing but another furious short squeeze, to wit:

Worryingly the strength in US markets appears to be driven by a squeeze in the shorts, rather than a true “risk on” redeployment of capital. My colleagues in the US noting today that their basket (MSXXSHRT) outperformed meaningfully again today, the second largest one day relative move since 2016 – the largest move was Tuesday!

That’s for the US; there was some better news out of Europe where the move appears to have been more organic:

We just published an update on the short covering we are seeing in Europe and our recommendations for our baskets (MSSTHISI, MSSTARSI). In a nutshell the short covering we already saw throughout Jun-Aug, coupled with the comfortable p&l cushion, has ensured that short-covering is NOT driving European markets.

The lack of a squeeze also explains Europe’s modest bounce today:

After the October we just survived, I suppose it comes as no surprise that November kicked off with more of a whimper than a bang, as Eurostoxx50 closed up a mere 20bps. Despite this almost zero realised day, intraday gamma continues to offer staggering value (10d hi-lo realised sits ~26v, still around the Feb highs). This is in part driven by the “aimless” type trading on light volumes we see in our early morning sessions, as traders hold out to take our direction from US earnings and investor behaviour. It’s also certainly impacted by this incredibly distracting headline tennis on the potential escalation or de-escalation of trade wars.

Finally, Morgan Stanley’s quants have an interesting trade idea:

another fantastic update note from Rob & team looking at our favourite “End of QE” trade – short/long puts on MSSTWKBS Index. Ask us for a call.

• All stocks rated BBB or worse, massive debt roll-over in next 3Y, issuance of credit expanding + quality of credit deteriorating.
• The HF long book is unwinding, the short book can rise.
• Theme outperformed in sell-off so great opportunity for shorts to re-engage in preparation for QE ending.

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Three weeks ago, just as Q3 earnings season was about to begin and ahead of a historic rout in the S&P, we showed a BofA screen of the top 20 longs and shorts held by hedge funds, which as we explained at the time is relevant because as we first discussed 5 years ago, the best performing strategy in the market has been also the simplest one: buying the most underweight stocks by large cap active funds and selling the most overweight stocks by large cap active funds has consistently generated alpha (although 2017 was the only year when this trend was bucked).

We left readers with a specific trade suggestion:

with earnings season about to start, traders may put the above data to good use as positioning risks are particularly acute during quarter-end rebalancing: the 10 most neglected stocks have outperformed the 10 most crowded stocks by an annualized spread of 85ppt on average during the first 15 days of each quarter since 2012. In other words, buying the 10 most underweight stocks and shorting the 10 most overweight remains the best source of alpha this decade.

Today, with almost two thirds of earnings reports behind us, Bank of America provides an update of not only how hedge fund portfolios have shifted in the past month, but also how this “strategy” has performed.

In short, anyone who followed our advice to short the top 10 most widely held stocks while going long the 10 most hated names would have generated a stunning 81% annualized return so far this earnings season, the highest since th 292% return in Q4 2015.

Solid returns aside for those who bet that hedge funds would once again stumble all over each other on the way to the exits as they ran away from names, mostly in the tech and growth sectors, that were priced to perfection, Bank of America also found that in its latest update of large cap fund holdings, where two-thirds of the assets are current as of end of 3Q, large cap active managers have made the biggest rotation from cyclical sectors to defensive sectors in data history since 2008 just ahead of earnings.

In particular, managers’ relative exposures to Consumer Discretionary, Industrials and Materials have fallen to more than one standard deviation below historical averages, and Discretionary (1.08x) and Industrials (0.91x) are now at record low levels of positioning.

At the same time as managers fled “sicklical” stocks they flooded into defensives, as managers’ overweight in Health Care has risen to its highest level of positioning in more than two years (1.08x to 1.13x), now more crowded than Discretionary and second only to Communication Services (1.28x). Staples positioning also rebounded from its record low level (0.68x) to a one-year high (0.72x). At the same time, utilities positioning jumped to its highest level in more than two years at 0.46x, and Real Estate is now at its record high levels of positioning at 0.44x. According to BofA, “this rotation couldn’t have been more timely, as the S&P 500 index almost saw a 10% correction in October and cyclicals/high risk stocks were hit the hardest, while the defensive/bond-proxy sectors outperformed.”

Unfortunately, this pre-emptive rotation was not enough, as stocks still overowned by active managers continued to suffer during the sell-off, as the top 25 crowded stocks underperformed the equal-weighted S&P 500 between Sept 20 and Oct 29 (peak-to-trough) by 3.5%, while the 25 least owned stocks outperformed the index by 5.3 ppt.

In other words, anyone who was long the 25 biggest hedge fund longs and short the 25 biggest shorts, generated a nearly 9% absolute return in the past month!

And, as noted above, positioning risk has been particularly acute following quarter ends, with the average annualized 15-day return spread post-quarter-end between the top vs. bottom 10 by relative weight since 2008 has been a remarkable 84ppt.

Finally, for those who missed the last boat but are hoping to profit from the increasing confusion among the “smart money”, BofA again screened for stocks with the most (Table 4) and the least (Table 5) short interest (as a % of float), where the most (~85%) short interest in stocks is from hedge funds. What the analysis found is that the most hated, or shorted, stocks are the following:

1. Under Armour
2. Discovery
3. Campbell Soup
4. Kohl’s Corporation
5. Mattell
6. Nordstrom
7. Coty
8. TripAdvisor
9. Mircochip Technology
10. Macy’s

Meanwhile, the least shorted names are, not surprisingly, the blue chips:

1. JPMorgan
2. Wells Fargo
3. Johnson & Johnson
4. UnitedHealth Group
5. Microsoft
6. PNC Financial
7. Medtronic
8. Berkshire Hathaway
9. Coca-Cola
10. Alphabet

The full list is below:

And to complete the hedge fund exposure picture, BofA also performed a screen of 1) stocks which are most overweight by hedge funds based on their net relative weight in the stocks vs. its weight in the S&P 500 and 2) a screen of stocks which have the largest net short positioning by hedge funds relative to the stocks’ weight in the S&P 500.

According to BofA, these are the 10 stocks where hedge funds have the most net relative exposure:

1. Twenty-First Century Fox Class A
2. IQVIA Holdings
3. Incyte
4. Arconic
5. TransDigm
6. NRG Energy
7. Twenty-First Century Fox Class B
8. Alliance Data Systems
9. United Continental Holdings
10. Xerox

While the 10 most net short names relative to net exposure are the following 10 companies:

1. Mattell
2. Hormel Foods
3. Microchip Technology
4. Albermarle
5. Coty
6. Discovery
7. Nordstrom
8. Under Armor
9. Omnicom
10. Iron Mountain

And summarized:

So when in doubt what trades to put on (and the latest Gartman reco is not available), the answer is simple:

Over the last several years, buying the most underweight stocks by large cap active funds and selling the most overweight stocks by large cap active funds has consistently generated alpha.

In other words, just keep doing the opposite of what the smart money has done: as the data repeatedly shows, in a world that is allegedly devoid of alpha, taking the other side of the “smart money” crowd has been the winning trade for 7 of the past 8 years.

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Via DataTrekResearch.com,

How much are exchange traded funds to blame for October’s US equity market volatility, and what can capital flows here tell us about current investment trends? As the old supermarket tabloid tagline went, “Enquiring minds want to know…”

Let’s start with a little myth-busting: contrary to popular opinion, ETFs do not own sizable chunks of headline names like the FAANG stocks. Total ETF ownership of Facebook, Apple, Amazon, Netflix and Google averages just 6.1% of shares outstanding according to data from industry source www.xtf.com. While ETFs are only a portion of total “passive” invested capital, their specific impact on both stock valuations and intraday volatility is arithmetically small.

Now, if you want to see where ETFs make more of a difference to US stock prices, dig past the top 1,000 names by market cap and look at the Russell 2000 or the S&P 600. The largest name in the Russell (teen retailer Five Below) is 12.3% owned by ETFs. The largest weighting in the 600 (defense/commercial IT company CACI Intl) is 17.8% owned by ETFs. Now we’re talking about real money…

That’s a good segue to a discussion of October ETF money flows, because US equity small cap ETFs saw sizable redemptions this month relative to large caps. The numbers:

• For October-to-date, ETF investors sold down a net $1.2 billion of small cap US equity products. Over the same period, they actually added $1.1 billion of capital to US large cap ETFs.

• This reversed the Q1 – Q3 trend of outsized inflows into US small cap ETFs, which averaged +$2.5 billion/month. Those inflows were, until this month, basically equal to the +$2.7 billion/month for US large caps but obviously on a much smaller base of market cap.

Key takeaway: if you’ve wondered why US small caps rolled over so hard in October, look no further than ETF money flows. We noted yesterday that US small caps have underperformed the S&P 500 by a 2-standard deviation differential in the last 90 days. We like them here, but their near term action seems to be in the hands of ETF asset allocators.

Moving on quickly to 5 other important points on ETF money flows:

#1. ETF investors turned positive on US stocks in the last week. Total US equity money flows are actually positive month-to-date by $814 million, but only because of +$7.3 billion of inflows in just the last week. That means prior to the last 5 days, ETF investors were large net sellers. Still… They are back, at least for now.

#2. ETF investor bias in US equities is now solidly in the “Value” camp.Month-to-date, Value-style ETFs have received $2.0 billion in fresh capital, as compared to $756 million of outflows for Growth funds. Over half ($1.3 billion) of that Value money came in just the last 5 days.

#3. October’s volatility pushed ETF investors offshore and into developed economy equities. Month-to-date inflows here total +$3.3 billion, well above the $814 million for US stocks noted above. This slowed in the last week, however.

#4. Japanese equities saw the largest chunk of these non-US flows in October, with $2.3 billion of fresh capital. This reversed a trend towards redemptions of Japanese equities in the first three quarters of 2018.

#5. The single weirdest thing about this month’s ETF money flows: fixed income products saw redemptions, even in a macro “risk off” environment.A few data points here:

• Month-to-date bond fund outflows total -$2.5 billion, as compared to +$7.6 billion/month of inflows for Q1 – Q3.

• Corporate debt ETFs took the hit, seeing $5.0 billion in redemptions this month-to-date.

• That capital went right into sovereign debt funds, with $4.4 billion of inflows MTD.

• ETF investors also reduced duration risk in October, adding $7.4 billion to short term (less than 3 year) funds while selling down $4.0 billion of explicitly long-dated bond products.

Summing up with one top-of-the-house observation: October’s volatility significantly chilled the environment for ETF flows.

• From an average $23 billion/month from January-September, October will likely come in closer to $4-5 billion (it was $3.3 billion through yesterday).

• The money flows sloshing around this $3.5 trillion pool of capital during October gravitated to de-risking in both bonds (shorter durations, higher quality) and equities (out of small cap/into large, Value over Growth).

All this sets up a November-December US equity market where either volatility rapidly declines (reigniting animal spirits and fresh inflows) or October’s churn is the new normal (more bond de-risking/Value/Growth rotation). At present, we are in the latter camp. October was a wake-up call for US investors, as the ETF flow data clearly shows. We remain positive on US equities, but expect more volatility in the coming weeks before things finally settle out. Psychology doesn’t change just because the calendar does.

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One of the latest allegations of sexual assault to emerge against disgraced Hollywood producer (and Clinton and Obama power-donor) Harvey Weinstein is one of the most sickening yet. According to court documents cited by the BBC and New York Post, a former model and actress identified only as Jane Doe is alleging that Weinstein sexually assaulted her when she was a 16-year-old virgin who had just moved to the US from Poland.

Doe, the tenth Weinstein victim to join a class-action lawsuit against the former mogul, alleged in her complaint that Weinstein invited her for what she thought would be a business lunch back in 2004, but instead he took her to his apartment in SoHo, where he angrily demanded that she sleep with him, even going so far as to pull off his pants and force the young woman to stroke his exposed penis. Terrified, she says she refused his demands that she have sex with him. He initially wouldn’t let her leave his apartment, but eventually relented. The woman had met Weinstein only three days earlier at a party hosted by her modeling agency, Next.

During the encounter, Weinstein allegedly boasted that he had ‘made’ the careers of actresses like Penelope Cruz and Gwyneth Paltrow.

“…Weinstein wasted no time in aggressively and threateningly demanding sex,” the suit alleges. He told the distraught starlet that if she wanted to be an actress she had to give in to his perverted desires.

“Weinstein threatened and pressured Jane Doe, saying that he had ‘made’ the careers of Penelope Cruz and Gwyneth Paltrow, and that neither would be working without him,” the suit alleges.

“He then took off his pants and forcibly held Jane Doe while taking her hand and making her touch and massage his penis,” the filing states.

Weinstein continued to pursue the model for the next decade, even getting her a small part in “The Nanny Diaries” even as she continued to refuse his demands for sex. Eventually, Weinstein let it be known that she shouldn’t be hired and “ensured that she never received work.”

The complaint also includes lewd details about sexually aggressive comments made by Weinstein, who once remarked that he’d like to “f**k that P***y” in front of Doe after seeing a video of Christina Aguilera. He then unzipped his pants and started pleasuring himself.

In a 2008 after-hours meeting in his Greenwich Street office to arrange for her to sign with the modeling agency Marilyn, Weinstein spotted Christina Aguilera on a nearby TV and allegedly said, “‘Wow, I’d really like to f—k that p—-y’ then unzipped his pants and began touching his penis,” the filing states. Jane Doe fled the room.

The claim represents the first time that the woman has come forward with allegations against Weinstein, who has been accused of rape of sexual assault or harassment by more than 80 women. Weinstein’s lawyer called the accusations “preposterous”. The class action suit formed when a federal judge ordered three women (Melissa Thompson, Caitlin Dulany and Larissa Gomez, to combine their suit with six other plaintiffs including Louisette Geiss, Katherine Kendall, Zoe Brock, Sarah Ann Thomas, Melissa Sagemiller and Nannett Klatt. The women are suing Weinstein and his former production company, the Weinstein Co., Weinstein was indicted in New York earlier this year on charges of rape and criminal sexual acts. Even if he escapes prison, which is looking increasingly unlikely after the successful conviction of Bill Cosby, it’s likely that the scandal will leave Weinstein bankrupt.

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In the latest move to pressure Venezuela’s president Nicolas Maduro, Donald Trump signed an executive order enabling new sanctions on Venezuela’s gold sector, in a bid to disrupt trade with Turkey which U.S. officials believe is undermining efforts to cripple Venezuela’s economy and force Maduro and members of his government out of office.

“I hereby report that I have issued an Executive Order with respect to Venezuela that takes additional steps with respect to the national emergency declared in Executive Order 13692 of March 8, 2015,” Trump wrote in his letter to the leaders of the House of Representatives and Senate.

According to Bloomberg, the order which was signed by Trump on Wednesday and will be announced at a speech Thursday by National Security Adviser John Bolton, targets those “operating corruptly within the gold sector” and will have a “fairly significant” effect on the country’s economy.

New US sanctions on #Venezuela target gold exports. pic.twitter.com/U0OsKGYgBU

— Steve Herman (@W7VOA) November 1, 2018

“The new sanctions will target networks operating within corrupt Venezuelan economic sectors and deny them access to stolen wealth,” Bolton will say, according to an advanced copy of his speech seen by Bloomberg. “Most immediately, the new sanctions will prevent U.S. persons from engaging with actors and networks complicit in corrupt or deceptive transactions in the Venezuelan gold.”

While it was not initially clear what form the sanctions will take, the Treasury Department is will announce details of how the latest sanctions will be implemented later on Thursday. And while the initial effort will focus on Venezuela’s gold sector, whose exports Venezuela allegedly uses to circumvent financial sanctions, Trump’s order gives the State and Treasury departments authority to target additional industries in the future.

Bolton, speaking at Freedom Tower, the symbolic building where the federal government received many refugees fleeing Fidel Castro’s Cuba, framed the plans as part of a broader effort by the U.S. to promote democracy in the Americas.

Venezuela’s gold reserves have declined sharply in the past four years, and according to the IMF were just above 5MM troy oz most recently, down from a recent peak just below 12 million. Much of this decline is due to what some have speculated has been payment for imports in gold, and is what the US is hoping to curb going forward.

The sanctions are likely to have a particular effect on trade with Turkey, with tons of gold sent there annually for refinement and processing. Officials have also voiced concern that some of the gold may be making its way to Iran in violation of sanctions on the Islamic Republic.

Venezuela’s gold industry has been under scrutiny by U.S. officials in recent weeks, with the Treasury Department noting that many mines are run by criminal gangs.

Separately, Bolton will also suggest that the U.S. is preparing sanctions against the government of Nicaragua after the violent political crisis sparked earlier this year by President Daniel Ortega’s announced changes to the country’s social security program. The U.S. wants free and fair elections in the country, the Trump administration official said.

“This Troika of Tyranny, this triangle of terror stretching from Havana to Caracas to Managua, is the cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere,” Bolton will say. “Under President Trump, the United States is taking direct action against all three regimes to defend the rule of law, liberty, and basic human decency in our region.”

As Bloomberg adds, Bolton’s Thursday speech in Miami is not expected to announce any changes in the U.S. posture toward Central American countries that have recently drawn the ire of Trump after the formation of a pair of migrant caravans joined by thousands of individuals who say they are traveling to seek refugee status in the U.S.

While Trump has repeatedly threatened to cut aid to the caravan’s origin countries – Guatemala, Honduras, and El Salvador – the official said the U.S. has had a productive dialogue with those governments since the formation of the migrant groups.

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So much for all that US-China trade truce talk.

Just hours after a presidential tweet expressing optimism about US-China trade talks helped save US stocks from turning red on the first trading day of the month (with an assist from Chinese President Xi Jinping, who later told Chinese media that he would be “willing” to meet with Trump at the G-20 summit later this month), the DOJ has unveiled an indictment filed in California against a Chinese state-owned company and three Taiwanese nationals for allegedly stealing trade secrets from Micron Technologies.

• *U.S. SAYS CHINA STATE-OWNED CO. STOLE MICRON TRADE SECRETS
• *U.S. CRIMINAL COMPLAINT ALSO NAMES THREE TAIWAN NATIONALS
• *UNITED MICROELECTRONICS, FUJIAN JINHUA INDICTED IN U.S.

Allegations about the alleged theft of chip designs from Micron were first detailed in legal documents filed in the US and Taiwan, which were cited by the New York Times in an investigation published back in June detailing  China’s efforts to acquire by either legitimate – or, failing that, illegitimate – means trade secrets that the Chinese government saw as vital to its Made in China 2025 initiative.

Micron has been the subject of punitive measures, including an investigation in China, one of its biggest foreign markets, since spurning a $23 billion takeover offer from a Chinese company. Fujian Jinhua Integrated Circuit Company, one of the companies facing indictment, was accused by the NYT of being behind the elaborate technology theft, while Taiwan-based UMC reportedly helped Fujian carry out the heist, claims that both companies denied. The indictment will almost certainly escalate tensions between the US and China, which has been enraged by President Trump’s demands that the Chinese government roll back its support for initiatives tied to Made in China 2025.

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Authored by Tsvetana Paraskova via Oilprice.com,

Tesla has shelved plans to open a store in Turkey after orders for the U.S. company’s electric vehicles have come to a halt following hefty tariff hikes for American imports in Turkey, local newspaper Dünya reports.

In May this year, Tesla chief executive Elon Musk said on Twitter, replying to a follower, “Btw, planning to launch Tesla in Turkey later this year. Love your country & will be there in person for the launch.”

However, at the height of the U.S.-Turkish diplomatic and trade row this summer over the detention of U.S. pastor Andrew Brunson, Turkey slapped steep import tariffs on American goods, including on cars. The pastor was released earlier this month, but in August Turkey had raised the import tariffs on U.S. cars to 120 percent a week after the U.S. imposed additional tariffs on Turkish steel imports.  

New orders for Tesla in Turkey have come to a halt in light of the additional customs tax, Ferhat Albayrak, General Manager of luxury car sales market leader S&S Motors, told the Turkish Dünya newspaper.

Last November, Musk met with Turkish President Recep Tayyip Erdogan and discussed cooperation between Tesla and SpaceX and Turkish companies.

But Tesla and Musk’s affair with Turkey took a negative turn early this September, after the EV maker’s CEO appeared on live podcast and smoked marijuana.

Following the viral podcast, a Turkish municipality that was planning to work with Tesla on electric buses and charging infrastructure scrapped those plans. Mehmet Gürbüz, board chairman at the municipal transportation company in the western Bal?kesir province, told Turkish media after Musk’s podcast:

“We would be signing a serious deal for Tesla too as it would involve charging stations and infrastructure conversion. However, we find that Elon Musk’s behavior live on air would serve as a negative example for the youth, unacceptable for the fight against drugs. That’s why we give up on our goal to work with Tesla, and we retract our invitation to Elon Musk.”

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Democratic lawmakers are licking their chops for the opportunity to settle a few scores and ensure that “Russiagate” follows President Trump into the 2020 election. 

California Democratic Rep. Maxine Waters told a group of constituents last week what she would do after the November 6th election, which she said “may be the most important one that you’ve ever had to experience.”

The 80-year-old Rep. will chair the Financial Services Committee if Democrats regain control of the House. 

“I will be the first African-American, the first woman to chair the powerful Financial Services Committee,” Waters said. “That’s all of Wall Street. That’s all the insurance companies, that’s all the banks. And so, of course, the CEOs of the banks now are saying, ‘What can we do to stop Maxine Waters because if she gets in she’s going to give us a bad time?'” 

She then threatened Republicans: 

“I have people who are homeless who have never gotten back into a home. What am I going to do to you? What I am going to do to you is fair. I’m going to do to you what you did to us,” Waters vowed. 

Adam Schiff and Russia, Russia, Russia

Another California Democrat, Adam Schiff, told CNN‘s Wolf Blitzer last week that if Democrats take back the house he will instigate investigations into Russian money laundering as well as President Trump’s businesses. 

Schiff, the top Democrat on the intelligence panel, told CNN’s Wolf Blitzer on “The Situation Room” that Russian money laundering is one area he wants to probe tied to Russia’s 2016 election interference. Schiff said it’s one issue where he didn’t know whether special counsel Robert Mueller had been given authority to look into the matter. –CNN

“The question, though, that I don’t know whether Mueller has been able to answer — because I don’t know whether he’s been given the license to look into it — is were the Russians laundering money through the Trump Organization?” said Schiff. 

“And that will be a very high priority to get an answer to. For the reason that if they were doing this, it’s not only a crime, but it’s something provable,” Schiff continued, suggesting that the Russians had found an issue they “could hold over the head” of Trump, and that they “that might be influencing US policy in a way that is against our national interest.”

Schiff added that while the “Republicans walked away from the investigation, the Democratic minority has continued” their investigative efforts, adding “And that work won’t stop when we take the majority.”

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