Tag: finance

Authored by Tom Luongo,

Those who have followed this blog for the past year know that I feel Presidents Trump and Putin are working towards a Middle East Peace Agreement.  Brick by brick, day by day, the foundation for this agreement is being built.

Last night’s nigh-historic statement by the South Korean National Security Adviser Chung Eui-yong is another piece of that foundation.  You can read the entire statement here, but I’ll highlight the important part:

“I told President Trump that in our meeting North Korean leader Kim Jong-un said he is committed to denuclearization. Kim pledged that North Korea will refrain from any further nuclear or missile tests; he understands that the routine joint military exercises between the Republic of Korea and the United States must continue.  And he expressed his eagerness to meet President Trump as soon as possible.”

“President Trump appreciated the briefing and said he would meet Kim Jong-un by May to achieve permanent denuclearization.”

This is the breakthrough that everyone was waiting for.  Once Trump gets involved in the negotiations, a deal will be made.  That’s his wheelhouse, making deals.  Everyone walks away a winner in their minds.

We can argue about the effectiveness of Trump’s sanctions until we are blue in the face. But the reality is that 1) Koreans no longer want separation and 2) North Korea is not the economic basket case we are constantly told it is in the media.

I remember meeting with Jim Rogers in 2015 at a conference and the two areas of the world he was most bullish on were Kazakhstan and North Korea.

Because North Korea, under Kim Jong-Un, is moving towards a more open society, not a closed one.  The sincere desire for reunification of the Korean peninsula, if only symbolically through a more open border, is the animating principle here.

And that only happens with a North Korea entering the modern world economy.

More Neocon Dreams Dashed

Neoconservative pipe dreams of encirclement of Russia and China to dominate and destroy them are ending.

Over the weekend chief Neocon “man-baby’ Lindsay Graham had his Madeline Albright moment saying that war with North Korea would be worth it to rid it of nuclear weapons.  The millions of dead Chinese, Japanese and Koreans that would result don’t matter because Americans wouldn’t die.

“All the damage that would come from a war would be worth it in terms of long-term stability and national security.” 

And they say Kim Jong-Un is crazy.

Now the good news is that Trump is far more rational than either Albright or Graham.

Solving North Korea’s drive towards nuclear weapons would be a major feather in Trump’s cap.  It would stop the braying of Democrats about his incompetence, or at least make their cries of such less resonant with rational people, i.e. most voters.

The neocons are waging global war against Russia, China and Iran, but primarily Russia.  Some believe it is the only way to secure Israel’s future.  Others are simply playing a bad game of RISK.

But, the reality is that Israel’s security is a secondary benefit (which is why it goes along with this) of the larger plan of global geopolitical and economic domination that begins and ends with subjugating Russia.

Peace in the Middle East that begins with ending a nuclear weapons threat from North Korea would get Israel’s attention. If Trump pulls this off, along with his firm commitment to Israel, Israel can calm down as it would feel far more secure.

Now you know why Trump is moving the U.S. embassy to Jerusalem.  The goal is to break deadlocks which are all open wounds designed to create future flashpoints.

The Iran/Israel Reality Show

But,  would also solve another problem. As I’ve talked about multiple times, North Korea’s nuclear program is also Iran’s nuclear program.

As is the case with Iran’s ballistic missile program.

We’re not the only country that engages in outsourcing, by the way.

This is why solving North Korea helps to solve the Middle East.  Israel simply wants a secure future.  It can’t have that with a nuclear-armed Iran.  But, Iran wants to survive as well.

And it can’t do so with American troops building bases all around it and U.S. ships patrolling its coasts.

Taking North Korea’s nukes off the table, takes them off of Iran’s table as well.  The neocons have been in charge of foreign policy for months and it has resulted in more troops in both Syria and Afghanistan.

As well, it has brought us into direct conflict with Russia on multiple occasions and only Putin’s prudence and patience has kept us out of a full-fledged shooting war with Russia.

This is something that no sane person wants.

So, first you solve North Korean nukes and, by extension, you solve Iran’s nukes.  Assad’s forces continue winning in Syria, ousting ISIS from eastern Ghouta and near Deir Ezzor.

The Turks are straining the U.S./Kurdish relationship in the northern part of Syria. And Putin has Netanyahu cowed thanks to Syria shooting down an F-16I.  Do the math.

The neocon rodeo is becoming a clown show.

Are We Agreement Capable?

I always come back to Putin and his Foreign Minister Sergei Lavrov who have said on multiple occasions that the U.S. is ‘not agreement capable.’  In diplomatic terms it means that negotiating with us is pointless because we do not keep to the agreements we sign.

And instead use the agreement as a stalling tactic to launch a new offensive in the near future.

By agreeing to talks with Kin Jong-Un Trump is doing what was always in the cards, backing off on direct conflict.  We were never going to attack North Korea.  Despite Lindsay Graham’s insanity, the cost would definitely outweigh the benefits.

The potential for war there to go global would be too high for any serious person to contemplate.  And Trump is no crazed war-monger.

Remember what Putin just unveiled at his State of the Union address.  Weapons that can nullify our military logistical superiority around the world.   The U.S. military power is in logistics.

So, don’t think for a moment that Trump is acting here out of strength.  Most of our military assets are, as of right now, sitting ducks.  Yes, they can do damage, but the risks of wipe out are incredibly high.

That’s the theatre part of this.  The reality is the neocon game is almost lost.

And humanity would be the winner.

Putin is happy to let Trump take the credit here, even though it is his hard work which brought us to this point.  By allowing Trump to take the lead Trump can firm up his domestic political support and marginalize the neocons in both parties.

But, that said, are we going to give up our drive to encircle China and Russia?  Does Trump have enough control over his intelligence and military command structure to abide by any agreement he signs?

Are the neocons on the run?  Or just playing ‘Possum?

Encirclement is why we still have troops in Japan and South Korea.  So, to be honest, I don’t know how far these talks go if the U.S. isn’t ready to pull the Seventh Fleet back from the South China Sea and/or remove our troops from the Korean Peninsula.

Because that’s exactly what Kim Jong-Un will want as a starting point for any discussions of giving up his nuclear weapons.

Given our recent history, if I was him I wouldn’t sign anything until I see troops packing up in the DMZ.  Then I’ll know Trump can deliver on whatever he promises.

*  *  *

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As we highlighted last night, China has threatened to respond to President Trump’s steel and aluminum tariffs with unspecified actions that Chinese officials said could “seriously hurt the international trade order.”

And as Axios warned in a piece published Friday, investors shouldn’t interpret their lack of details as a sign of an empty threat: Rather, China actually has far more leverage with which to retaliate against the Trump tariffs than it did when George W Bush briefly imposed tariffs on imported steel in the early aughts. Back then, Bush rescinded the tariffs, it’s widely believed, because the European Union threatened targeted sanctions that would hurt swing states like Michigan and Florida – states that Bush needed to carry during his 2004 campaign. Unsurprisingly, the EU is embracing a similar strategy this time around.

But today, China’s ability to retaliate now rivals that of the entire European Union – which means this could be the last time the US can “set the agenda” in terms of its relationship with its largest economic rival.

Back in 2002, China produced less than 200 million tons of steel. As of 2016, China could churn out 1 billion tons, forcing Beijing to pare back production or risk a destabilizing glut.

Given President Xi Jinping’s decision to abolish term limits, effectively clearing the way for him to serve as dictator for life, the country has the wherewithal and the political will to strike back. Mark Wu, a professor of international trade law at Harvard, said the country needs to do something – if only to save face.

“China has to do something [in response to Trump’s tariffs] just to signal its own resolve,” Wu said.

However, as Wu said, they likely won’t retaliate with the full brunt of their capability, as China would probably be content with watching the Westerners fight it out among themselves.

Ahead of Thursday’s announcement, Zhang Yesui, a top diplomat and former ambassador to the U.S., said:

“China does not want a trade war with the US … [But] we will not sit idly by and will take necessary measures if the US hurts China’s interests.”

Since the earliest days of his campaign, Trump has bashed China, citing the US’s massive trade deficit with China as a sign that naive leaders and the “free trade” globalist establishment were allowing the US to be ripped off…all to benefit the coffers of wealthy elites. Meanwhile, in a sign that the US could be softening its stance, the Trump administration has reportedly asked China for a plan to shave $100 billion off the US’s trade deficit with the No. 2 economy (also known as China’s trade surplus).

As Axios sees it, there are two routes China can take: 1) it could retaliate by acting against US projects in China, denying US companies permits to operate in China, essentially blocking US companies from one of the world’s most lucrative growth markets…2) it could engage in tit-for-tat retaliatory tariffs against specific US industries and products – much like the EU has threatened to do.

However, not everybody is convinced that China will follow through with a response beyond mere rhetoric: Nathan Chow, a strategist at DBS Group, wrote in a March 9 report that he doesn’t expect the US’s steel and aluminum tariffs to spark a “trade war” with China. Steel and aluminum account for only 3% of China’s total exports (though this figure masks the rampant trans-shipping whereby Chinese steel is dumped into other countries to mask its origins) and 0.6% of its GDP. Chow also argued that Chinese steel exports to the US are much smaller than the country’s top three steel export destinations: South Korea, Vietnam and the Philippines.

But one key difference between the Bush tariffs and the Trump tariffs is that Trump invoked Section 232 of the Trade Expansion Act – the so-called “national security” justification, which leaves the door open for other WTO members to use a similar argument to justify retaliatory tariffs that COULD escalate into a trade war…

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Authored by Carey Wedler via TheAntiMedia.org,

Amid the fallout from the February 14 school shooting in Parkland, FL, that left 17 dead, the FBI and local law enforcement received widespread criticism for their inability to prevent the shooting despite multiple warning signs and opportunities.

On Tuesday, the FBI admitted these failures to the House Judiciary Committee during a hearing focused on how the bureau handled tips about Nikolas Cruz prior to the massacre.

FBI Deputy Director David Bowdich met with members of the House Judiciary Committee and House Oversight and Government Reform Committee, acknowledging that, as the House Judiciary Committee’s press release put it, “opportunities were missed.”

That release summarized the takeaways, which have already been highlighted in media reports:

“In September 2017, the FBI received an Internet tip from a video blogger about a threatening comment posted to a YouTube video the blogger had posted. The comment stated, ‘I am going to be a professional school shooter,’ and was posted under the username ‘nikolas cruz.’”

According to the hearing, an FBI office in Mississippi received that tip, but after officials investigated it, they closed the case because “it lacked personal identifiable information on the user who posted the threatening comment” (the username “nikolas cruz” was evidently not enough for the agents to go on).

Apparently, however, the agents could have done more:

“The agents tasked with the case could have requested assistance from YouTube to attempt to identify the user who left the comment, but determined that the United States Attorney’s Office in that region was unlikely to agree to such a request.”

On another occasion, a friend of the Cruz family called the FBI tip line and, according to Bowdich, provided sufficient information for the bureau to follow up. But as the press release noted, “the call taker did not ask any standard investigative probing questions during the call” despite the caller saying she worried Cruz “going to explode” and that she feared him “getting into a school and just shooting the place up.”

The agent who took the call spoke to their supervisor, but that conversation was not documented. Worse, as the press release summarized:

“At the time, the call taker was able to connect information about Nikolas Cruz to the September 2017 tip about the threatening YouTube comment. Despite these connected dots, the call taker and supervisor decided to not pursue the matter further and the case was closed.”

They also declined to contact local authorities even though the caller told them Parkland police were also aware of the threat Cruz posed. “Better information sharing between federal and local law enforcement may have prevented the shooting at Marjory Stoneman Douglas High School,” the summary of the hearing noted.

Bowdich admitted “there were failures and that corrective actions will be taken,” including conducting separate reviews of the two above instances and providing better training for call takers working the tip line.

Though the FBI is often glorified in entertainment and has received increased support in recent months thanks to its its pursuit of potential corruption within the Trump administration, the government agency has a long history of nefariousness.

Though it is successful in using informants to instigate potential terror attacks, then foiling them and taking credit for keeping the public safe, it appears that despite its tip line, widespread surveillance methods, and immense manpower, the agency continues to fail to live up to its reputation.

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Ever since news broke that Trump lawyer Michael Cohen won an arbitration hearing meant to stop Stephanie Clifford – aka Stormy Daniels, the adult film star who reportedly had a brief affair with Donald Trump after meeting him at a golf tournament in 2006 – it’s been nonstop Daniels news, as the White House announced that President Trump has hired a lawyer exclusively to handle Daniels-related matters (like enforcing an NDA that she’s claiming is invalid because President Trump never signed it, even though his lawyer paid her the agreed-upon $130,000).

Daniels has also claimed that, by admitting to the payoff during public testimony, Trump lawyer Michael Cohen had violated the NDA, and that it is no longer binding.

CNN, meanwhile, has been all over the Daniels beat, with White House reporter Jim Acosta reporting that Trump is displeased with Press Secretary Sarah Huckabee Sanders’ handling of a reporter’s question during a Wednesday press conference where she acknowledged that Trump had won the arbitration proceeding against Daniels.

Indeed, it appears that, instead of fading away, like most scandals involving the White House, the Trump-Daniels affair is about as persistent as a case of herpes.

Case in point: Today, CNN is reporting that Daniels has filmed a segment for ’60 Minutes’ with CNN’s Anderson Cooper, who is also a regular contributor to ’60 Minutes.’

In January, Daniels appeared on Jimmy Kimmel live, where she shockingly appeared to deny sleeping with Trump, before later denying her denial.

As of Friday, the 60 Minutes feature didn’t have an air date for the segment, saying only that it’d be “soon.”

Cohen has said that “the payment to Ms. Clifford was lawful, and was not a campaign contribution or a campaign expenditure by anyone,” but several election watchdogs have filed complaints with the Federal Election Commission, arguing that the Daniels payment could constitute an unreported campaign expense.

Daniels has shared intimate details of her affair with Trump – which lasted roughly 18 months and ended after he failed to secure a spot on “The Apprentice” for the adult film actress (it was network TV, after all). During an interview with “In Touch”, she dished that the sex was “textbook generic” and that Trump once confided in her that he hates sharks, and would never donate to a charity that helps them.

Meanwhile, the president’s supporters in the evangelical community continue to have his back, arguing that whether or not Daniels’ allegations or true makes no difference to them, per the Hill…

“Evangelicals know they’re not compromising their beliefs in order to support this great president,” Pastor Robert Jeffress said on Fox News Thursday. “And let’s be clear, evangelicals still believe in the commandment ‘thou shalt not have sex with a porn star.’”

“However, whether this president violated that commandment or not is totally irrelevant to our support of him,” he continued.

Jeffress said evangelicals knew they “weren’t voting for an altar boy” when they voted for Trump and maintained they supported Trump for his “policies and strong leadership.”

The pastor, who runs the First Baptist Church in Dallas, reminded reporters that evangelicals understand “the concept of sin and forgiveness…”

…Oh, and let’s not forget their appreciation for his Supreme Court picks.

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Authored by Russell “Texas” Bentley,

To My Family and Friends, and All Good People of the USA,

You may not know it yet, but the world changed on March 1st, 2018, an old era was ended, and a new era begun. In very great part, the meaning of this new era is up to you.

On that historic day, Vladimir Putin revealed to the world that the US military is now obsolete, and no longer capable of “projecting power”, committing war crimes, or intimidating and destroying smaller nations around the world. That day has ended forever, one way or another.  The US military is still completely capable of the mission it needs and deserves to do, which is to defend the territory and people of the United States of America.  You are safe. There is no threat.  But the days of your government threatening and destroying other countries is over. I hope you understand this.

Putin’s revelation of Russia’s game-changing weapons, against which the US military is literally defenseless, is not a threat or a bluff. Only liars and fools speak of “Russian aggression”, and the stupidity of anyone who says or believes “Putin is bluffing” is beyond measure. Russia’s weapons are real, and the US military industrial complex (that Dwight Eisenhower warned about 57 years ago) has absolutely no defense against them. In spite of plundering and squandering literally trillions of dollars from the US treasury and the American People in the name of  “defense”, they are defenseless.

Russia’s new weapons present no threat to the American People, unless you allow the people who own and control your government to to start a world war and force the Russians to use them. But if you do allow that to happen, the American people will get exactly what the “good Germans” got in 1945. And you will deserve it, just as much as they did. For the exact same reasons.

Russia is not your enemy. We seek only cooperation for the mutual benefit of all Mankind. But since the fall of the Soviet Union in 1990, 28 years ago, the USA, NATO and the EU have sought to plunder and rule the world. They have been the enemies, the enslavers, the destroyers of the world. No reality based person can dispute that fact. There is no place that the US or NATO has gone into in the last 4 decades that is better off. Not one. In fact, there is no place that NATO or the US have intervened, (usually against international law) that hasn’t become a failed state, hell on Earth for the citizens, and a genuine danger to the surrounding regions and the world. It is the US government and NATO, and the people who own and control them, who are the threats and the enemies to the future of Humanity. But their days of disregarding international law and destroying weaker nations with impunity are now over, as of March 1st, 2018.

The good people of America now have a huge opportunity, and a huge challenge. Russia spends less than one tenth what the USA spends on military and defense, but their military and weapons are superior in every measurable way. The waste, corruption and abject venality of the US military industrial complex has wasted trillions on weapon systems that are now literally useless, and which have left the US military (and by extension the American people) defenseless before the power of Russia’s weapons, which are  designed and produced to be effective rather than profitable.  The opportunity is this – the USA can now reduce its military spending (the highest in the world) by 90% and still be safer than you are right now, spending almost a trillion dollars a year on useless weapons and a defenseless military.  Safer, because as soon as the American People take control of their government enough to reduce your spending to ONLY as much as Russia spends, Russia will stop having reason to see the USA as an existential threat. The less you spend, the safer you will be. The more you spend, the more likely World War Three, which will see you as the instigators and the losers. This gives the USA, starting as soon as you want, an extra $800 billion, per year, to spend on things that have actual worth, things you really need.  Health care, free college education, fixing the rotting economy and infrastructure that are daily becoming more of a threat to the American people than Russia has ever been.

Your challenge is that you must root out an entrenched  and ruthless kleptocracy, built on deceit and oppression, and which is bent on war, and will stop at nothing to cling to its power. It is a huge task, an historic task, but in it lies your only hope. These parasites must be stopped, and if the American People are not up to the challenge, if they fail in their historic mission, they will leave it to the armies of the world, led by Russia, who will no longer tolerate those who want to rule the world. Your rulers are leading you to a war you cannot win, a war from which you, your families and your nation, and perhaps the world, will never recover.  If the American People do not prevent their rulers from starting World War Three, there will be war.   Peace and prosperity or death and desolation. These are your only choices, and now is the time to make your choice and act accordingly.

An annual windfall of $800 billion is yours for the taking, if you have the wisdom, courage and determination to take it back from the charlatans and scammers who have been robbing and wasting your trillions for years.  Already these vermin claim the only possible solution is to give them even more money, as if those who fail when they out-spend their competitors ten to one might succeed by spending twenty to one.  At some point, the host must rid itself of its parasites, or risk being bled dry.

When the American People stand up to their oppressors, rid themselves of their parasites, the people of Russia and of the world will stand with you, will applaud and support you. All good people in the world are on the same side. Those who oppress and exploit you do the same to us. Your enemies are our enemies, and ours are yours. Stand up, as we have, throw off your chains and illusions, see for yourself who your real enemies are, and together let’s defeat them, before they destroy the world and all that is good in it. Only you can stop them without a global war. If you don’t, there will be war, and we will stop them. But those who live in the USA will suffer the fate of those who start and lose a world war. It is not a fate to be desired.

America, that time has now come for you. The choice is stark and clear, and you must make it soon.

Either bring your rulers to heel,  stop the war they are bent on starting, and reap the benefits of stopping the most egregious and wasteful scam in history, or do nothing, allow your parasites to consume you, and let them lead you and your children and your nation to Armageddon and a fiery death in a war that you now know you can never win. The choice is yours. And so is the responsibility.

*  *  *

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Journalism icon Bob Woodward says reporters on the left and right are becoming too emotionally invested in Donald Trump, telling Newsweek that “a number of reporters have at times become emotionally unhinged about it all, one way or the other.” 

In answer to a question about whether Woodward thinks the news media is “failing” the test when it comes to the Trump presidency, the former Washington Post investigative reporter said: 

First of all, journalists can always do better. Myself at the top of the list. I don’t think journalism is failing at all in the Trump era. But we have a lot of work to do. A number of reporters have at times become emotionally unhinged about it all, one way or the other.

Look at MSNBC or Fox News, and you will see those continually either denigrating Trump or praising him. I think the answer is in the middle, and in this class I talk about how it’s important to get your personal politics out.

It’s destructive to become too politicized. The emotion should be directed at doing more work, not some feeling or personal conclusion.

Case in point:

Last but not least – who could forget CNN’s Brooke Baldwin’s full stop when Trump advisor Boris Epshteyn told her on air that Hillary Clinton’s aides destroyed her BlackBerries with hammers. Maybe not “unhinged” per se, but a good reminder that Hillary Clinton’s BlackBerries were literally destroyed with hammers while she was under active investigation by the FBI.

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Authored by Scott Morefield via The Daily Caller,

When it comes to America’s response to gun crime, one Georgia town has been thinking outside the box since 1982, when its leaders passed a law requiring it citizens to own a firearm.

The Kennesaw, Georgia, law states that “every head of household residing in the city limits is required to maintain a firearm,” according to CNN, and was reportedly passed as a deterrent to crime.

“It was meant to be kind of a crime deterrent,” Kennesaw Police Lt. Craig Graydon, a 30-year law enforcement veteran, told CNN. “It was also more or less a political statement because the city of Morton Grove, Illinois, passed a city ordinance banning handguns from their city limits.”

As for would-be criminals looking for an easy mark, judging by the crime statistics it seems most have bypassed the Georgia town and moved on to easier targets. Even CNN was forced to admit that Kennesaw, populated by 33,000 people, has only had “one murder in the last six years and a violent crime rate of below 2%.”

“But,” writes CNN, “it’s unclear whether that has anything to do with the gun law.”

Kennesaw’s mayor sees it differently.

“If you’re going to commit a crime in Kennesaw and you’re the criminal — are you going to take a chance that that homeowner is a law-abiding citizen?” asked Mayor Derek Easterling.

“It gives me the ability to protect myself as opposed to being somewhere where you weren’t allowed to have a firearm or it was frowned upon,” said Wayne Arnold, a local resident who is a fan of the law.

With the gun issue being in the spotlight of late, town officials have been getting plenty of attention from all over the world about their law.

“We get a lot of calls, conversation, and it seems to keep crime control, gun safety, things like that on the minds of many of the residents, because people are constantly talking about the gun law,” Lt. Graydon told CNN. “So that’s been somewhat of a benefit to us.”

Arnold noted the expectation of a “Wild West” environment with everyone walking around “with a firearm strapped to their side.”

“And it’s not like that,” said Arnold. “It’s strictly a home defense system type of deal. There’s no shootouts down the street.”

And a lot less crime than your average American city.

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A former corporate-fraud lawyer for the Department of Justice has been sentenced to 30 months in prison for stealing over 40 whistleblower fraud cases in 2016 and trying to sell the information to companies under federal investigation, according to prosecutors.

Jeffrey Wertkin, 40, was arrested in an undercover sting after an attorney for a Sunnyvale, CA tech company contacted the FBI in January following Wertkin’s offer to sell them a sealed federal lawsuit for $310,000, according to court documents. As he was taken into custody wearing a wig and fake mustache at a Cupertino, CA hotel by FBI Special Agent William Scanlon, Wertkin reportedly said “My life is over.”  

Following his arrest, Wertkin engaged in an “obstruction binge” at his private law firm to destroy additional evidence of the scheme he had formulated for over a year, while also trying to frame a former colleague at the DOJ for the theft of the records. 

A far more extensive and calculated crime was revealed at Wertkin’s sentencing hearing – as the former DOJ prosecutor stole and copied dozens of files – some of which he swiped right off of his boss’s desk, copied, and then re-stapled before returning them. 

Wertkin “took grotesque advantage” of his position within the DOJ by “shaking down companies” and disclosing confidential information which “jeopardized the integrity of the civil justice system and unfairly cast a shadow over the work of the civil fraud section,” said Assistant U.S. Attorney Robin L. Harris, who added that Wertkin’s crime was “was breathtaking in its scope and is the most serious and egregious example of public corruption by a DOJ attorney in recent memory.“

Wertkin worked from December 2010 to April 2016 in the department section responsible for recovering $4.7 billion in misspent tax dollars in 2016 alone. Under the False Claims Act, whistleblowers can receive part of recovered funds for tipping off fraud in government services and contracts by filing what are known as qui tam lawsuits under seal to protect their identities while the United States investigates. –MSN

Imploring the court for leniency, Wertkin said he committed the crimes while on “a terrible path” of substance abuse involving alcohol and marijuana during “a period of heightened anxiety and depression, a sense of impending failure at work and a deteriorating marriage.” 

“I believe I somehow viewed selling the complaints as a way to escape my problems,’’ reads a statement from Wertkin included in a court filing. 

Path to destruction

Wertkin – who specialized in healthcare fraud, planned his brazen scheme as he was leaving his job of nearly six years as a DOJ fraud prosecutor in April 2016 to join the law firm Akin Gump, Strauss, Hauer & Feld as a $450,000 / year partner in Washington. He began copying files for over a month before leaving the agency – including dozens of federal cases that weren’t assigned to him, according to court records.

From his position at Akin Gump, Wertkin attempted to net potential clients by dangling the stolen information. When that tactic bore no fruit, he stepped up his efforts – reaching out to a targeted Alabama company for $50,000, a New York company for an undetermined price, and an Oregon company to which he mailed a redacted copy of the cover sheet in their federal case as bait. 

“I thought if I could quickly earn a substantial sum of money, I could provide the material benefits I promised my family upon moving to Akin Gump — a new house in a better neighborhood and private school’’ for his two children, wrote Wertkin, who lived near Dupont Circle.

Prosecutors said Wertkin’s crime was nothing more than “narcissism and greed,” before his 2 1/2 year sentence on two counts of obstructing justice and one count of interstate transport of stolen property was handed down in a Wednesday hearing in San Francisco. Wertkin’s counsel had requested a sentence of a year and a day. 

“Mr. Wertkin’s secret criminal life was not known to anyone at the firm. We were shocked when he was arrested and outraged when his bizarre, treacherous crimes were revealed,” said Akin Gump spokesman Benjamin J. Harris on Thursday.

In a letter to the court before Wertkin’s sentencing, the firm said it was a victim of his crime and defended its corporate culture.

The theft and misuse of government documents was a “reprehensible betrayal of Mr. Wertkin’s duties as a government lawyer” and of his ethical duties at Akin Gump, and were “harmful to the firm,” partner and general counsel Douglass B. Maynard wrote.

“Whatever drove Mr. Wertkin to his hidden criminal activity, it was not the culture of [sic] firm where he worked for nine months,” Maynard said. “The people he worked with at the firm saw him as a talented, well-liked young partner who appeared well on his way to a bright future.” –MSN

After Wertkin – a graduate of Georgetown Law, lost a $200 million case, he says he was left “devastated” and “a shell of a man,” according to his wife Erin Erlenborn. 

His defense attorney, Cristina C. “Cris” Arguedas said that Wertkin grew “increasingly irrational” and “truly believed he was at the end of his rope,” as he called the general counsel of a California firm to try and sell a lawsuit. 

Wertkin’s attorney called his actions truly aberrant in an otherwise “careful, diligent and unblemished life” and said it was “a testament to his previous standing in the legal community that so many attorneys and former government officials, including former DOJ attorneys” wrote letters to the sentencing judge on his behalf. –MSN

Wertkin has resigned from the bar. 

“I hope someday I will be able to understand how I could have abandoned my principles and my honor,” said Wertkin in a pre-sentencing statement. “I often lay awake at night and think about these actions, and I weep at the tragedy that I have brought on myself.”

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Authored by Gerald Hwang via Jirisan Capital,

Do you believe that taking riskier equity exposures should reward you with higher returns?

Most finance education is founded on the positive correlation between risk and reward. Taking incremental risk would not be worthwhile otherwise. Over the long run (past 10 and 20 years) global and regional equities have not fulfilled that expectation. In fact, the relationship between risk and realized reward appears to be the reverse of what was expected!

Riskier equities generated lower returns. This result is a two-handed slap in the face for anyone who still believes that markets are efficient. Despite the huge advantage of having excluded the perennial basket cases of Venezuela and Argentina (for most of the decade), the Latin American index rewarded investors with the highest volatility and negative annualized returns. A $100 investment in Latin America would have been whittled down to $87, after having suffered 28% annualized volatility and a worst drawdown of 61% that lasted 9 months.

Performance in EM equities and the Asia region was not much better. If you believe that long term equity returns should surpass that of Treasury bonds, you would have been extremely disappointed with equities as an asset class over the past decade.

Even the S&P 500’s 8.5% annualized return is cold comfort when you consider that the Barcap 20+ year U.S. Treasury Index had a total return of 6.6%. The S&P 500’s realized excess return of 1.9% (excluding tax effects) includes a worst drawdown period of 14 months when the index lost 48%. For those who might point to the superior drawdown management of active equity investors, many active managers performed even worse than that.

Maybe 10 years is too short a time period to consider buy-and-hold horizon returns. What does it look like over the past 20 years? This time, the news is better (but not good!) for the typical MBA curriculum – there is the barest hint that riskier markets generated slightly higher returns.

But the weakly positive slope here is not convincing. Although the next 10 to 20 year period may not have a similar outcome, the risk/return profile over the past 10 and 20 years should make the thoughtful investor rethink the relationship between risk and reward. Over the past 20 years, the realized equity risk premium for the S&P 500 was 0.20%. Yes, that’s right: 20 basis points. In addition to the -48% drawdown experience during the Great Financial Crisis of 2008, the S&P also lost 45% during the early 2000s. I wouldn’t fault anybody for thinking that buy-and-hold equity risk was not worth the heartache. Indeed, a retiree would have to have an almost religious faith that markets will rebound from such a loss. But after demonstrating such faith after the first 10% drawdown, then 20%, then 30%, at what point does faith dissolve in a pool of tears?

Changing our focus to markets operating in regions of highest economic growth, Asian equities returned 8.7% annualized over 20 years, only 1.5% better than the S&P 500, and 1.7% better than the Barcap 20+ year Treasury Index. During this period, Asian equities had two periods of horrendous drawdowns. The first occurred during the late 1990s, when the MSCI Asia ex-Japan Index incurred a 51% loss. During the Great Financial Crisis, it lost 61%.

And in case you wonder how risk vs. return looked over the past 5 years, here it is:

The negative correlation between risk and returns is extreme over the last 5 years. Adding insult to injury: the riskiest markets (Asia, EM, LatAm) benefitted from extreme outperformance in 2017. Asian equities gained 42%, EM gained 38%, and LatAm gained 24%. Such “lottery ticket” type gains may explain global investors’ continued interest in these markets as buy-and-hold investments despite their poor long term track record, extreme volatility, inferior drawdown characteristics, and sub-standard corporate governance.

Those who object that volatility is a poor proxy for risk are correct. Worst drawdowns (i.e. losses from a previous high) are more important for most asset allocators and retirees. Here’s a chart showing returns vs. risk, as quantified by worst drawdown. The strongly negative slope in the relationship between returns and risk should, again, cause long term investors to question what they’re getting per unit of “risk” in these markets, especially when they are on the buy-and-hold bandwagon.

These observations may be of little interest to investors who are locked into a single equity silo (e.g. long only EM equity managers). However, for those with the freedom to hold other asset classes, the material may provide food for thought. Even for die-hard fans of the buy-and-hold philosophy, a nod toward asset dynamism was made by none other than Warren Buffett. He clarified in the 2016 Berkshire Hathaway shareholders’ letter that he isn’t a buy-and-hold investor where public equities are concerned.

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Is the city of Oakland rejecting all forms of law enforcement? Just days after the mayor of the city forewarned the citizens of a looming ICE raid (and left 840 felonious illegal immigrants on the streets), it seems some of her citizens are taking her lead.

A barista at an employee-owned coffee shop in Oakland, Calif. ignited a controversy a few weeks ago when they asked a police officer to leave the shop because of a new policy that prohibits employees from serving police officers in uniform.

As NBC Bay Area reports, a lengthy instagram post written in Spanish titled “Talk to your neighbors, not the police” explains the coffee shop’s policy and provides some context for the employees’ decision to turn away a uniformed police officer on Feb. 16. The post very clearly states: “We have a policy of asking police to leave for the physical and emotional safety of our customers and ourselves.”

KTVU reported that the officer – who was not named by the media – said he traveled to the coffee shop to pick up a cup of coffee and to introduce himself.

 

Last Friday February 16th a police (OPD) entered our shop and was told by one of our worker-owners that “we have a policy of asking police to leave for the physical and emotional safety of our customers and ourselves.” Since then, cop supporters are trying to publicly shame us online with low reviews because this particular police visitor was Latino. He broadcasted to his network that he was “refused service” at a local business and now the rumblings are spreading. We know in our experience working on campaigns against police brutality that we are not alone saying that police presence compromises our feeling of physical & emotional safety.  There are those that do not share that sentiment – be it because they have a friend or relative who is a police, because they are white or have adopted the privileges whiteness affords, because they are home- or business- owning, or whatever the particular case may be. If they want to make claims about police being part of the community, or claims that race trumps the badge & gun when it comes to police, they must accept that the burden of proof for such a claim is on them. OPDs recent attempts to enlist officers of color and its short term touting of fewer officer involved shootings does not reverse or mend its history of corruption, mismanagement, and scandal, nor a legacy of blatant repression. The facts are that poc, women, and queer police are complicit in upholding the same law and order that routinely criminalizes and terrorizes black and brown and poor folks, especially youth, trans, and houseless folks. For these reasons and so many more, we need the support of the actual community to keep this place safe, not police.  Especially in an area faced by drug sales and abuse, homelessness, and toxic masculinity as we see here on this block. We want to put this out to our communities now, in case we end up facing backlash because as we know OPD, unlike the community, has tons of resources, many of which are poured into maintaining smooth public relations to uphold power. It will be no surprise if some of those resources are steered toward discrediting us for not inviting them in as part of the community.

A post shared by Hasta Muerte Coffee (@hastamuertecoffee) on Feb 22, 2018 at 7:47pm PST

In an effort to extend an olive branch to the community and assuage customers’ fears relating to the police, the Oakland Police Officers Association sent the shop a letter asking to open a dialogue about its policy.

The sergeant who was turned away said he was surprised by the request, but left without incident – and without any coffee (KTVU  joked that police officers are now “personae non java” at Hasta Muerte). The officer told NBC he’s looking forward to speaking with the employee-owners to build a better relationship with them.

Unsurprisingly, many area residents – including Latinos and people of color – said they felt the policy didn’t make sense.

“I don’t know what they got against them,” said Roberto Lopez.

Another resident, who wished only to be identified as “T,” agreed, saying, “I think it’s cold blooded. I don’t understand that.”

A third woman said the policy is silly: “If somebody is breaking in [to the coffee shop], who are they gonna call?”

The cafe hasn’t responded to the police union’s letter sent two weeks ago requesting an explanation. Cafe managers declined to comment to KTVU.

But Oakland City Council member Noel Gallo, who represents the Fruitvale District, said she spoke to the cafe managers on Thursday and confirmed that it’s still the shop’s unwritten policy not to serve men and women in uniform.

“My understanding is they’re not going to serve police officers,” Gallo said.

“I don’t agree with that, 100 percent,” Gallo added. “I think we need to work together, not against each other.”

The cafe opened several months ago at the corner of East 27th Street and Fruitvale Avenue.

As KTVU points out, the shop is a “worker-owned collective” with an anti-establishment bent that seeks to combat the militarization of police.

Still, one area resident said she supports the ban.

“I think that if a group of people don’t feel safe with a police officer currently on duty, coming into a space, they want people in this neighborhood to be able to feel safe, coming into their space. Then that is a choice they should be able to make,” said Tenaya Gunter Brown.

For now, police patrolling the Fruitvale neighborhood of Oakland will need to get their coffee fix at the Starbucks or Peet’s Coffee Shop up the street.

One wonders if, after the courts ruled against two Orgeon bakers who refused to make a wedding cake for a same-sex couple (due to their religious beliefs), can the cops file suit against the Oakland coffee shop for refusing to serve them (due to the barista’s feelings being hurt)? (of course, as we were reminded, those who ‘protect and serve’ are not a ‘protected’ class).

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