Tag: news

Internet Buzzing After Julian Assange’s Mother Implicates Seth Rich In DNC Leak

The internet is buzzing with theories after Wikileaks Founder Julian Assange’s mother, Christine Assange, tweeted – and then deleted – what many believe to be an admission that murdered DNC staffer Seth Rich “leaked docs proving corruption.” 

In response to the question “why did Julian publish damning docs against Hillary at such a crucial time which gave Humpty Dumpty Trump the upper hand?” Christine Assange replied “Its the duty of media to inform citizens about corruption,” adding “a #DNC #Bernie supporter disgruntled with rigging leaked docs proving corruption.” 

“What should Wikileaks should have done? Hold on to them till after the election to advantage #Hillary?” she continued, adding “You are shooting the messenger!” 

Many have pointed out that Mrs. Assange’s the description fits that of Seth Rich, a Bernie Sanders supporter and DNC IT staffer who was slain on his way home from a local bar on July 10, 2016, five days after a forensics analysis indicated that the DNC emails were copied locally – which was the same day Romanian hacker “Guccifer 2.0” claims to have haced the DNC, per the Washington Post. 

12 days after Rich’s murder, on July 22, 2016, WikiLeaks released thousands of emails stolen from the Democratic National Committee revealing that Bernie Sanders’ campaign was undermined when the DNC and the Clinton campaign colluded to share questions before a debate. 

Of note, cybersecurity firm Crowdstrike reported on June 14, 2016 that Russia had infiltrated the DNC, after the DNC reported a suspected breach in April of that year. The DNC has received criticism for not allowing the FBI to analyze their servers for hacking, relying only on the Crowdstrike analysis performed by anti-Putin Russian expat – a senior fellow on the very anti-Russia Atlantic Council. 

Christine Assange’s supposed admission caused many on Twitter to note that her son, Julian Assange, “heavily implied” that Rich was the leaker in an August, 2016 interview on Dutch television when he brought up Assange in the context of WikiLeaks whistleblowers, and then nodded his head when asked directly if Rich was a source.

Deleted tweet

Christine Assange later deleted her controversial tweet, writing that people had wrongfully asserted “Julians mother confirms its #SethRich.” 

She then cited former UK Ambassador Craig Murray and the group Veteran Intelligence Professionals For Sanity, who all say the Russians did not hack the DNC. 

Meanwhile, Twitter users have been left scratching their heads at the entire thing: 

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New York Sets Up First Statewide Panel to Investigate Prosecutorial Misconduct

Gov. Andrew CuomoNew York will be the first state to establish an independent commission to investigate claims of misconduct by county-level prosecutors. Or rather, it will, unless the prosecutors use the courts to stop the law from taking effect.

On Monday, Democratic Gov. Andrew Cuomo signed a bill that would create a commission to investigate claims of misconduct by prosecutors within the state. The panel is based on a similar panel in the state used to evaluate judges. It would have the authority to investigate claims of improper behavior by the state’s 62 district attorneys (and their subordinates) and can censure them or even go so far as to recommend to the governor that the prosecutor be removed.

The timing of this bill connects well to the most recent report of exonerations in the United States. Last year, dozens of people were release from prison after misconduct by various government officials was uncovered. All but two out of 13 exonerations of prisoners in New York last year involved official misconduct in some capacity (this could include police and judges, not just prosecutors).

Prosecutors are rarely ever punished for misconduct when it’s caught. Matt Ferner at The Huffington Post tags a report from 2013 showing that less than two percent of prosecutors found to have engaged in misconduct have been sanctioned in any way for misbehavior between the years of 1963 to 2013. In New York, only three prosecutors have been punished in 151 cases of misconduct from 2004 to 2008.

District attorneys are nevertheless resistant and are planning to file suit. The District Attorneys Association of the State of New York is trying to stop it, saying the measure is unnecessary and unconstitutional and is telling prosecutors to resist appointment to the commission to try to keep it from actually operating (prosecutors will be assigned to four of the 11 seats). The association complains that only the governor can remove prosecutors. Cuomo’s signature on the bill comes with a condition that it be amended to fix any constitutional concerns before the commission actually gets to work.

The district attorneys also point to existing grievance committees in each appellate division to handle complaints. One such committee disbarred a former district attorney over the summer for misconduct. But opponents point to those stats Ferner mentioned. Prosecutors are rarely ever punished for misbehavior, even when it results in innocent people being imprisoned for years.

The Innocence Project praised Cuomo for signing the legislation. As Policy Director Rebecca Brown notes in a statement, “while most prosecutors respect their ethical obligations, far too many innocent people have been wrongly convicted as a result of prosecutorial misconduct, and until today there was no effective means for holding those who commit bad acts accountable. We hope other states will follow New York’s lead and address this serious problem plaguing the criminal justice system.”

Read the bill here.

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In the Feud Between Donald Trump and John Brennan, It’s a Shame They Can’t Both Lose

Last week, President Trump revoked former CIA Director John Brennan’s security clearance. It’s yet another presidential feud designed to force the public to take sides: Are you with Trump or against him? It’s a late-summer matchup that brings to mind the eternally useful tagline from another ugly showdown, Aliens vs. Predator: Whoever wins, we lose.

The decision to strip Brennan’s clearance prompted howls of outrage from the media. Brennan is one of Trump’s most prominent and aggressive critics; Trump’s move, the argument went, was intended to punish and silence him as political payback.

A White House spokesperson initially said that Brennan’s clearance was revoked for making “wild outbursts on the internet and television” about the current administration, but Trump himself later indicated that the decision was related to Brennan’s early role in the investigation into Russian interference in the 2016 election. In an interview with The Wall Street Journal about Brennan, Trump said, “I call it the rigged witch hunt, [it] is a sham. And these people led it! So I think it’s something that had to be done.”

Trump’s critics, in other words, had at least a partial point: The president himself all but confirmed that he targeted Brennan as an act of political retribution.

Defenders of the president’s move, in response, argued that security clearances for ex-government officials were profitable status markers, and that Brennan, in particular, was a loose cannon whose criticism of the president had grown increasingly erratic and over the top.

They, too, had a point: When criticizing the president, Brennan sometimes alluded to his security clearance, bolstering the impression that he was speaking with an insider’s knowledge. In a piece for The New York Times last week, for example, Brennan wrote, “While I had deep insight into Russian activities during the 2016 election, I now am aware—thanks to the reporting of an open and free press—of many more of the highly suspicious dalliances of some American citizens with people affiliated with the Russian intelligence services.” The clear intent of the line is to leave the impression that, because of special access, he knows more than he can say.

Yet by his own admission, Brennan’s accusations against the president were exaggerated. Following Trump’s appearance with Russian leader Vladimir Putin, Brennan called the the president’s actions “nothing short of treasonous.”

You might assume that when Brennan, a former high ranking intelligence community official, described a president’s behavior as “treasonous” he meant that it was treason. Not so. As Brennan awkwardly explained on Rachel Maddow last week, what he really meant was…something else.

…For Mr. Trump to so cavalierly so dismiss that, yes, sometimes my Irish comes out and in my tweets. And I did say that it rises to and exceeds the level of high crimes and misdemeanors and nothing short of treasonous, because he had the opportunity there to be able to say to the world that this is something that happened. And that’s why I said it was nothing short of treasonous. I didn’t mean that he committed treason.

It is possible to believe that President Trump targeted Brennan for political reasons, and also that Brennan is unhinged and unreliable, relying partly on his security clearance to bolster his credibility as a critic of the president. (As Reason’s Scott Shackford wrote last week, there is both good news and bad news in this story.)

But it is harder to see Trump’s gambit as, in Brennan’s words, “an attempt to scare into silence” others who might challenge the president. Or at the very least, if that’s what it is, it’s an attempt that isn’t likely to be very successful. As Bloomberg’s Eli Lake wrote, it’s better understood as a move to elevate Brennan into a useful foil. After all, following the loss of his clearance, Brennan made the argument that Trump was engaged in a silencing effort in The New York Times.

This is a typical play for Trump, who likes to single out individuals in order to turn them into enemies: Think of his relentless and polarizing Twitter attacks on Judge Gonzalo Curiel or Khizr Khan. Here his choice of antagonist is far less sympathetic, but it’s the same essential dynamic at work. Trump thrives on personal feuds and polarizing vendettas, especially those that entice critics into exaggerated attacks, which inspire greater devotion from loyalists in response, and so on and so forth. Trump has turned national politics into an unending series of petty tabloid feuds. He isn’t really interested in a nuanced debate about security clearance status markers or profiting off of working in government; he just wants to perpetuate the cycle of squabbling, forever forcing people to choose one side or the other. Are you Team Trump? Are you Team Resistance? Aliens or predator? In this case, it’s truly a shame they can’t both lose.

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Texas Exports More Oil Than It Imports For First Time Ever

Authored by Irina Slav via Oilprice.com,

The Texas Gulf Coast oil terminals sent abroad more crude than they received in April, the Energy Information Administration said this week. During that month, crude oil exports from the Houston-Galveston port district exceeded imports by 15,000 bpd. Over the next month, the advantage of exports over imports welled further, to an impressive 470,000 bpd.

Total U.S. oil exports in may hit a record of 2 million bpd, with Houston-Galveston’s share of the total at a record-breaking 70 percent, from an average of about 50 percent since the middle of 2017, the EIA said.

The bulk of crude oil exports from the Houston-Galveston area went to China, Canada, Italy, and the UK, with exports to China averaging 300,000 bpd in both June and July. This month, however, not a single crude oil cargo has been loaded for China, according to media reports, amid growing trade tensions between Washington and Beijing.

Meanwhile, however, Texas is on track to become the biggest oil producer after Russia and Saudi Arabia, according to production estimates by HSBC, quoted by CNN. If the estimates turn out to be correct, the Lone Star State will be pumping almost 6 million bpd in 2019.

RBC goes further, expecting production in Texas to boom to more than 6.5 million barrels daily over the next seven to ten years. Not everyone is so optimistic, however. Skeptics believe the shale oil boom in Texas led by the Permian Basin, will peak at much lower levels than 6 million bpd, not least because of the substantial debt loads of many shale drillers in the area.

Until this happens, oil production in the state is growing: over the 12 months to June it added 27 percent to 4.3 million bpd, according to the latest report from the Texas Alliance of Energy producers. This represented 40 percent of the U.S. total for that month.

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S&P Hits New Record High As Yield Curve Crashes To 11 Year Low

Almost exactly 7 months after it last hit a record high, the S&P 500 has surged off last week’s ‘Turkey crisis’ dip on China trade-talk headlines and broken to a new record high – despite collapsing yield curve and dismal economic data.

2872.87 was the previous high…How appropriate that we hit a new record high right as stocks reach the longest bull market in history.

Spot The Difference…

US Macro data has done nothing but disappoint in recent weeks, but don’t let that stop the buying panic…

The Treasury yield curve (2s10s), however, is trading at 22bps – its flattest since August 2007…

And the last three months have been led overwhelmingly by Defensives…

What happens when the China trade talks end with no result?

Believe…

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Fed’s Kaplan: Three Or Four More Rate Hikes Before Stopping To Assess

Dallas Fed President Robert Kaplan said that with the current fed funds rate at 1.75-2.00%, the Fed should continue raising interest rates until they hit their neutral level, which he said is about “three or four quarter-point rate increases away.”

“At that point, I would be inclined to step back and assess the outlook for the economy and look at a range of other factors—including the levels and shape of the Treasury yield curve—before deciding what further actions, if any, might be appropriate.” Even so, he admits that the shape of the yield curve, which yesterday dipped to a new post-crisis low of 22bps, “suggests to me we are ‘late’ in the economic cycle” although he mitigated the risk, saying “I do not discount the significance of an inverted yield curve.”

The Dallas Fed projects full-year GDP growth of about 3%, and notes that “2018 will be a strong year for economic growth in the U.S. Reasons include a strong consumer sector, improved prospects for business investment due to tax incentives, solid global growth and substantial fiscal stimulus due to recent tax legislation and budget agreements.”

However, echoing the analysis of his former employer Goldman, Kaplan cautions that “while 2018 will be strong, economic growth is likely to moderate in 2019 and 2020 as the impact of fiscal stimulus wanes and monetary policy approaches a more neutral stance. Their view has been that potential GDP growth in the U.S. is in the range of 1.75 to 2 percent and actual real GDP growth will likely reach this level by 2020 or 2021.”

Kaplan also expects unemployment rate to fall to 3.7% by year-end, and  expects “headline personal consumption expenditures (PCE) inflation will remain in the neighborhood of the Federal Reserve’s 2 percent target during the remainder of 2018.”

“While our economists are hopeful that a strong labor market might continue to draw in new entrants who are currently out of the workforce, it is our base-case view that the current rate of labor force growth is unlikely to continue.”

What are the key challenges facing the Fed according to Kaplan? He lays it out in the concluding section “where we go from here” in which he notes the following: “the challenge for the Fed is to raise the federal funds rate in a gradual manner calibrated to extend this expansion, but not so gradually as to get behind the curve so that we have to play catch-up and raise rates quickly. Having to raise rates quickly would likely increase the risk of recession.“

The full section is below.

When I joined the Fed in September of 2015, the federal funds rate was 0.0 to 0.25 percent. This rate had not been adjusted since late 2008. The Fed’s balance sheet stood at approximately $4.5 trillion.

Since that time, the Fed has been able to gradually remove accommodation and implement a plan to reduce the size of its balance sheet. Over this period, the unemployment rate has moved down substantially and inflation is now running at approximately 2 percent.

At this juncture, the challenge for the Fed is to raise the federal funds rate in a gradual manner calibrated to extend this expansion, but not so gradually as to get behind the curve so that we have to play catch-up and raise rates quickly. Having to raise rates quickly would likely increase the risk of recession.

As I judge the pace at which we should be raising the federal funds rate, I will be carefully watching the U.S. Treasury yield curve. Currently the one-year Treasury rate is 2.44 percent, the two-year is 2.61 percent and the 10-year is 2.87 percent.[21] My own view is that the short end of the Treasury curve is responding to Federal Reserve policy expectations. The longer end of the curve is telling me that, while there is substantial global liquidity and a search for safe assets, expectations for future growth are sluggish—and this is consistent with an expectation that U.S. growth will trend back down to potential. Overall, the shape of the curve suggests to me we are “late” in the economic cycle. I do not discount the significance of an inverted yield curve—I believe it is worth paying attention to given the high historical correlation between inversions and recession.

I will also be closely monitoring global financial and economic developments and their potential impact on domestic financial and economic conditions. As global financial markets and economies have become increasingly interconnected, the potential for spillovers to the U.S. is greater than in the past. That is, global economic and financial instability has the potential to transmit to domestic financial markets, potentially leading to a tightening of financial conditions which, if prolonged, could lead to a slowing in U.S. economic activity.

Based on these various factors, as well as the current strength of the U.S. economy and my outlook for economic conditions over the medium term, I believe it will be appropriate for the Fed to continue to gradually move toward a neutral monetary policy stance. I believe that this gradual approach to removing monetary policy accommodation will give us the best chance of managing against imbalances and further extending the current economic expansion in the U.S.

Source: Where We Stand: Assessment of Economic Conditions and Implications for Monetary Policy

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Hedge Funds Rocked By Relentless Short Squeeze

Yesterday we presented Nomura’s observations on the reasons why despite the market’s ascent back to new all time highs, the bank had witnessed a “multi-month performance disaster for US equity funds.” According to Nomura’s x-asset strategist Charlie McElligott, the reason behind the underperformance of equity funds was three-fold and involved sharp moves across various factor strategies:

  • A “Beta Grab” (HF L/S beta to SPX jumps to 89th %ile from 65th %ile the prior week)
  • A re-adding of exposure to “Momentum Longs” (L/S beta to Momentum Longs leaps to 32nd %ile from the recent puke down to 10th %ile)
  • All of this despite SPX sector-performance last week showing “pure de-risking”: Telcos / Staples / REITS / Utes / Healthcare as the five best sector returns, while the bottom-six sectors were Industrials / Financials / Tech / Consumer Discretionary / Materials / Energy

Today, in its latest quarterly hedge fund monitor report which is a compilation and analysis of the latest batch of hedge fund 13Fs, Goldman’s Ben Snider confirms as much, writing that “a difficult summer has reduced the YTD return for the average equity hedge fund to -1%” largely as a result of underperformance of some of the most popular hedge funds stocks. As a result, Goldman’s basket of the most popular hedge fund positions – where FaceBook is at the very top – has lagged the S&P 500 by 118 bp so far this year (6.7% vs. 7.9%).

And speaking of Facebook…

The plunge of Facebook (FB), entered 3Q as the most popular hedge fund stock. Before its disappointing earnings results, 230 hedge funds (28%) in our sample owned FB, making it the most popular position. The average portfolio weight for FB among those funds was 4%. Among the 642 funds with between 10 and 200 distinct equity positions, 98 held FB as a top 10 portfolio position, ranking it as the top stock in our Hedge Fund VIP list.

Visually, this is how a hedge fund hotel burns down:

In other words, for yet another year, one could have bought the SPY, avoided the “2 and 20”, and outperformed the vast majority of hedge funds.

What caused this dramatic underperformance of Wall Street’s “best and brightest”?

According to Goldman, the large performance swings in the broad market and the most popular stocks “created a difficult investing environment.” Which then begs the question: why are hedge fund managers paid tens of millions if they can’t navigate “performance swings” and why do they all gravitate to the same handful of “most popular stocks”?

It certainly is not to build conviction: Goldman found that one contributor to underwhelming fund performance has been declining hedge fund net exposure. Net long exposure calculated based on 13-F filings and publicly-available short interest data registered 55% at the start of 3Q, slightly lower than in 2Q.

Data from Goldman’s Prime Services division showed a similar picture, with net leverage declining steadily during recent months while the S&P 500 recovered to within 1% of its record high.

But whereas lack of conviction is to be expected in a market that has grown increasingly decoupled between the US and the rest of the world, merely reducing one’s exposure would simply lead to more muted gains. To explain the underperformance there has to be a different reason: and sure enough, Goldman highlights just that, echoing a theme was have discussed constantly in recent weeks, namely the challenge hedge fund face as a result of the sharp outperformance of the most concentrated short positions.

Because at the same time that the most popular longs among hedge funds underperformed the S&P, a basket of the 50 Russell 3000 stocks with market caps greater than $1 billion and the largest outstanding short interest as a share of float has outperformed the S&P 500 by 14 percentage points YTD (+21% vs. +7%), Goldman found adding that in recent months, the concentrated shorts have outperformed primarily in favorite hedge fund sectors including Info Tech.

Which is a delightful confirmation of what we said back in May, when in addition to listing the top 50 hedge fund longs, we also listed the top 50 shorts and said “for those who are convinced that it’s only a matter of time before a massive squeeze sends the most shorted names soaring, here is the list of the 50 stocks representing the largest short positions among hedge funds.”

Fast forward three months later when the relentless short squeeze continues to crush hedge fund performance.

So is it too late now to piggyback on this trade, and hope for further “squeeze” higher?

Goldman’s answer is that whereas across the broad market, short interest as a share of float sits close to its 10-year median, but Consumer Staples short interest has rarely been higher.

As a result, the performance of retail stocks has been a good indicator of what happens once a short squeeze gets going: because although the sector faces pressure from rising interest rates and declining margins, the performance of retail stocks during the past year highlights the potential energy contained by stocks with extreme levels of short interest, and why in this market doing the logical thing is guaranteed to lead to acute pain.

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Turkey: Lira Bulls & Bears Battle It Out On Twitter

Authored by Mike Shedlock via MishTalk,

Is there a bullish case for the Lira? One person thinks so. Most think otherwise.

Lira Plunge Resumes

Interest Rates top 20%

There was a rumor Germany would come to the aid of Turkey. That rumor seemingly died today.

Robin Brooks Thinks Lira is Undervalued

Current Account Surplus

Switched Position

Yesterday’s Story

Yes, But Liquidity in Short Supply

Bigger Crisis Possible

Rapid Loan Growth

Questions Abound

Setser commented “I find the balance sheet of Turkey’s banks fascinating.”

Framing Turkey’s Vulnerabilities

Brad Setser frames Turkey’s Vulnerabilities: Some Rhyme with the Asian Crisis, but Not a Repeat

There are a number of different ways of framing the cause of Turkey’s recent currency crisis.

I think the emphasis should be on Turkey’s banks, and their large stock of external debt. The banks are the main reason why Turkey’s currency crisis could morph into a funding crisis, one that leaves Turkey without sufficient reserves to avoid a major default.

While Asia offers the best parallels, the analogy to Asia is also just a bit off. Turkey has, rather miraculously, been able to use external foreign currency funding to support a domestic boom in lira lending to households… something Asian banks never did, to my knowledge.

The financial mystery in some sense isn’t how the banks’ lent foreign currency to domestic firms, it is how they used their external foreign currency borrowing to support domestic lira lending.

Turkey’s banks do hold a decent amount of regulatory capital. And they hold that capital in lira. Fair enough. A lot of folks think U.S. and European banks would be a lot healthier if they funded their lending with one dollar (or euro) of equity and six dollars (or euros) of deposits rather than funding their lending with a dollar of equity and close to twenty dollars of borrowed money. Equity isn’t “set aside” per se, it is invested alongside other sources of funding.

But by holding all of their equity in lira even though a large part of their funding and lending was in dollars, the banking system’s capital ratio falls as the lira falls

Turkey’s banks borrowed foreign currency in part to have dollars to swap into lira in the cross-currency swap market. A borrowed dollar or euro swapped into lira is effectively lira funding, not dollar funding—it just shows up as foreign currency borrowing in the external debt data. As far as financial alchemy goes, cross-currency swaps are pretty plain-vanilla.

It was also the fact that the swaps generally had a shorter-maturity than the underlying foreign currency borrowing. Five year bonds were issued to raise dollars. But then the dollars were swapped for lira on a 3 month contract.

The result is that Turkey’s banks have a maturity mismatch on their lira book. They will start taking losses quickly if domestic interest rates rise too high, as they have longer-dated lira loans and shorter-dated lira funding.

The banks also had the option of meeting their reserve requirement in gold. As a result, Turkey found a way to make gold deposits effectively available to support household lending (by letting the gold substitute for other forms of required reserves).

The net effect is that the banks have an extremely interesting—but rather complicated—foreign currency balance sheet, with an unusual mix of vulnerabilities.

So what’s my bottom line?

Simple—from a balance sheet point of view, the risk of a run on the banks’ foreign currency funding poses far larger vulnerabilities than the government’s funding need. The government, excluding the state banks, has almost $100 billion in external debt, but less than $10 billion coming due in the next year. The banks have just over $150 billion in external debt, but over $100 billion coming due over the next year.

The rise in Turkey external debt in 2017—which corresponded to a rise in Turkey’s current account deficit—now looks to be the straw that broke the camel’s back.

Bears Have It

There is much more in Setser’s post. For those interest in FX, It’s worth a read in entirety.

Setser concludes, and I agree, “I would bet that the dynamics in Turkey get worse before they get better—in most crises, creditors want to reduce their exposure, not just stop adding to it. The underlying risk of a severe crisis, one marked by systemic defaults not just an epic depreciation, remains.”

The bears have the far bigger case with liquidity issues, Trump sanctions, and timing considerations.

Old Story, New Complicated Method

The story is an old one “complicated borrow short and lend long derivations eventually blow up, especially with foreign financing.”

On July 10, I commented Spotlight Turkey: Hyperinflation and Mass-Migration Crisis Inevitable.

On July 14, I commented Hyperinflation Avoidance Advice for Turkish Citizens as Fitch Cuts Ratings.

On July 10, the Lira closed at 4.876. It is now 6.080. That a whopping 20% decline in just over a month, but it’s nowhere near hyperinflation material.

Hyperinflation is a political event, not a monetary one, and Erdogan is on that path.

The primary bull case is not the one Robin Brooks suggested. Rather, it is a potential for a huge Lira rally if Turkey heeds Trump’s demand and unconditionally releases US Christian pastor Andrew Brunson, absurdly held by Turkey on charges of terrorism.

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A New Report Details Pro-Trump Censorship of Liberty University’s Student Paper

|||YURI GRIPAS/REUTERS/NewscomA rift between the Liberty University president and an on-campus newspaper indicates that campus free speech battles are not solely an issue for liberal colleges. Jerry Falwell, Jr., the president of one of the largest Christian universities in America, is a very vocal supporter of Republicans and conservatives and that support has crossed over to his college’s identity. Earlier in the month, Falwell invoked his students to criticize Attorney General Jeff Sessions for not supporting President Trump enough, citing their low attendance at a 2016 event as proof that they did not back Sessions. Now World Magazine alleges that Falwell played a direct role in censoring the political views of Liberty’s Champion, the on-campus paper. The alleged censorship mostly applied to criticisms of Trump.

In one allegation, Falwell reportedly directed staffers in 2016 to state the presidential candidate for which they were voting. At another point, Falwell told another editor to not run former Sports Editor Joel Schmieg’s column disavowing Trump’s “locker room talk” controversy. Schmieg then attempted to share his thoughts on Facebook, but later resigned when a faculty adviser communicated to him that he should refrain from repeating the action in the future. According to World Magazine, Schmieg said, “I didn’t feel comfortable being told what I couldn’t write about by President Falwell.”

The other allegations follow a similar model of faculty members not only revising stories that were critical of Trump, but of staff, including Falwell himself, advising students not to cover certain events on campus. In April, Champion staff accused Falwell of telling them to not cover a controversial “Red Letter Revival.” The event was comprised of progressive evangelical Christians who sought to pray against a culture of “toxic evangelicalism.” The event featured a handful of Liberty student speakers. When former Assistant News Editor Erin Covey reached out to Falwell requesting a statement, he reportedly emailed her saying, “Let’s not run any articles about the event.” Covey later told Religious News Service, “I do think that currently the level of oversight we have does make it difficult to pursue the accurate journalism that we’re taught in classes.”

About a week after the event, Bruce Kirk, dean of the School of Communication and Digital Content, informed the students that they would be interviewed for staff positions for the following year, a first in Champion history. In a conference call with Falwell, Kirk, and the staff, Kirk advised the students to put “journalism aside for a second” to remind them that someone else “decides what you do and what you don’t say or do,” according to the World Magazine report. After the passing of another week, Kirk informed former Editor-in-Chief Jack Panyard that the paper would be doing away with his position, reorganizing its structure, and that Panyard would not be part of the operations any longer. Because of this, Panyard also lost the $3,000-per-semester scholarship that came with his position.

Champion staff are now reportedly required to go through a multi-stage approval process for their stories that requires input from the faculty adviser, a panel of faculty members, and Falwell.

This is not the first time Liberty students have found themselves at odds with the university. In 2015, Sen. Ted Cruz (R–Texas) announced his presidential bid at the school. As Reason reported, a number of students took issue with the setting as Cruz announced his campaign during a mandatory morning convocation for students. One student complained that the setting made it seem as though Cruz had the unanimous support of the nearly 10,000 people in the room. It also appeared that Falwell encouraged the students to stand in support, though he later asserted in a statement that students were “free to cheer or boo as they see fit.”

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Ready To Flip? Michael Cohen Exploring Possible Plea Deal With Prosecutors

Michael Cohen, Trump’s former personal attorney who we learned on Sunday is under federal investigation for bank fraud totaling “well over $20 million”, is discussing a possible guilty plea with Manhattan federal prosecutors in connection with tax fraud and banking related matters, according to NBC. While no deal has been reached, NBC’s sources say the potential deal could be reached as early as today.

A plea by Cohen would have significant implications for Trump, who has blasted Cohen ever since his former fixer and his attorney, old Clinton hand Lanny Davis, began signaling this summer that Cohen might cooperate with special counsel Robert Mueller’s investigation.

The Cohen probe is being led by the office of the U.S. Attorney for the Southern District of New York in Manhattan, but any cooperation agreement would likely extend to other federal investigations. As a reminder, in July Cohen, who once bragged he’d take a bullet for Trump, hinted that may have changed. “I put family and country first,” he told ABC.

In addition to bank and tax fraud questions arising from Cohen’s taxi business, federal prosecutors are looking into whether the hush-money payments Cohen arranged with women who claimed they had sexual encounters with Trump amount to violations of campaign finance law.

FBI agents raided Cohen’s office and hotel room in April and seized documents and electronics. According to people with knowledge of the search warrant, agents were looking for information related to a $130,000 transaction between Cohen and adult film star Stormy Daniels, who allegedly had an affair with Trump more than a decade ago, as well as information about a reported payment of $150,000 to former Playboy model Karen McDougal, who also says she had an affair with Trump, and information about the “Access Hollywood” tape in which Trump was heard making vulgar boasts about women.

The FBI has also monitored his phone calls with a pen register, meaning that the incoming and outgoing phone numbers were recorded but not the content of the calls.

In July, Davis released a phone conversation that Cohen secretly recorded in which Trump mentions “cash” in relation to a possible payment involving McDougal.

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