Month: July 2016

The reactions to the FBI’s shocking announcement in which it announced it would not seek charges against Hillary Clinton are coming in fast and furious, with House Speaker Paul Ryan announcing moments ago that, at least in his view, Trump was spot on when he tweeted over the holiday weekend that the system is rigged when he said that the FBI’s decision not to suggest the Department of Justice brings charges against former Secretary of State Hillary Clinton “defies explanation.”

While I respect the professionals at the FBI, this announcement defies explanation. No one should be above the law. http://pic.twitter.com/OqctxglquI

— Paul Ryan (@SpeakerRyan) July 5, 2016

“While I respect the law enforcement professionals at the FBI, this announcement defies explanation. No one should be above the law. But based upon the director’s own statement, it appears damage is being done to the rule of law,” Ryan said in a statement, adding that declining to prosecute Clinton for her handling of classified information “will set a terrible precedent.”

“The findings of this investigation also make clear that Secretary Clinton misled the American people when she was confronted with her criminal actions,” Ryan said in the statement.

Yes, but since no “reasonable judge” would prosecute Hillary (by which we assume he means no judge that has received quid-pro-quo from the Hillary foundation or affiliated and related parties),  and since the FBI “cannot find a case that would support bringing criminal charges on these facts” despite the FBI bringing criminal charges in precisely such a case less than a year ago, the “fix is in.”

Next, it was Judicial Watch’s turn to chime in: Judicial Watch President Tom Fitton made the following statement regarding the decision by Federal Bureau of Investigation Director James B. Comey that the Department of Justice not indict former Secretary of State Hillary Clinton for the disclosure of classified information on her non-state.gov email:

FBI Director James Comey detailed Hillary Clinton’s massive destruction of government records and grossly negligent handling of classified information.  Frankly, there’s a disconnect between Comey’s devastating findings and his weak recommendation not to prosecute Hillary Clinton.  Federal prosecutors, independent of politics, need to consider whether to pursue the potential violations of law confirmed by the FBI.

 

Judicial Watch helped break open the Clinton email scandal and, in the meantime, will independently continue its groundbreaking litigation and investigation.

Finally, none other than former presidential candidate and NYC mayor, Rudy Giuliani, opined when he told CBS that “No one should be above the law. Today Hillary Clinton was put way above the law.”

Rudy Giuliani: It’s “mind-boggling” @FBI didn’t recommend charges against @HillaryClinton https://t.co/VVNfSdX01O https://t.co/86O9GnC4aE

— CBS News (@CBSNews) July 5, 2016

He also spoke to CNBC when he said that he is “shocked” at Comey’s conclusions because he “clearly concluded that Hillary violated 18 US Code section 793 when he said she was extremely negligent” while on Hillary’s intent Giuliani said that the circumstances of extreme negligence “over and over and over again” is the best proof of intent, “also her destruction of 34,000 emails also proves intent.”

Former prosecutor & NYC mayor Rudy Giuliani: “Shocked” at FBI director Comey’s conclusion in Clinton e-mail probe http://pic.twitter.com/3HLxmkVjRD

— CNBC Now (@CNBCnow) July 5, 2016

Giliani’s conclusion: “This is an extremely hard conclusion to justify. People have been charged under these statues for far less than this”, but… when one is Hillary Clinton, the laws don’t exactly apply like they do for ordinary people.

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Submitted by Nick Cunningham via OilPrice.com,

A political breakthrough in Libya could potentially contribute to the return of some of the country’s disrupted oil production.

Libya has been torn apart by civil war, political gridlock, and the arrival of ISIS. Two rival governments have been at odds for several years, battling for control of the country and its oil production. But the standoff has resulted in a stalemate, and the North African OPEC member’s oil production has remained at a small fraction of its pre-war production levels.

But Libyan officials said over the weekend that two rival oil companies have decided to merge in what could be a major political breakthrough. The National Oil Company is based in Tripoli, under the control of the western government. The rival eastern government based in Tobruk tried to set up its own oil company and export oil on its own a few months ago. However, the international community took steps to block the move, and the failed attempt forced it to look to negotiate with the western government.

On July 2, the National Oil Company said in a press release that both sides have agreed to merge their operations. The head of the National Oil Company will lead the merged company with the chief of the eastern company set to become a board member. In addition, the newly merged company would relocate to Benghazi, a city in the eastern part of the country.

“We made a strategic choice to put our divisions behind us and to unify and integrate NOC,” the chairman of the National Oil Company Mustafa Sanalla said in the statement. "This agreement will send a very strong signal to the Libyan people and to the international community that the Presidency Council is able to deliver consensus and reconciliation."

(Click to enlarge)

A unified National Oil Company is a key building block of reconciliation. A nascent unity government will oversee the new entity. "There is only one NOC, and it serves all Libyans,” Sanalla’s statement read.

For now, revenues will be shared evenly between the central banks of east and west.

The matter is not only a concern for Libya’s stability and revenue base – the deal could lead to a return of some oil production and exports, with global effects. Libya’s oil output was down to around 300,000 barrels per day as of May, a little less than a fifth of the 1.6 million barrels per day the country produced in the Qaddafi era. It has hovered around those levels for several years.

But the country has made some small steps of progress more recently. Libya’s Petroleum Facilities Guard recaptured some towns from ISIS militants in June. Also, after the eastern oil company’s failed attempt to unilaterally export oil – which temporarily slowed production to just 200,000 barrels per day – the two governments reached an accord to allow some oil exports to resume from the port of Hariga in the east, allowing oil production to tick up to 350,000 barrels per day.

The latest agreement could have even larger consequences. A return of Libyan production could add several hundred thousand barrels per day of production in relatively short order. According to Reuters, Libyan officials believe that production could quickly double to 700,000 barrels per day if some stability to the country could be achieved. Reuters says that a unified National Oil Company “could also smooth negotiations to reopen the El Sharara and El Feel fields, which are closed due to disagreements with local groups.”

The return of some 300,000 to 400,000 barrels per day is a volume that the oil markets have not been counting on. Libya’s oil production has been disrupted for quite some time, and the instability in the country has led most energy analysts to believe that the chances of Libya ramping up output in any reasonable timeframe were slim. And to be sure, it will be an uphill battle for the competing factions to bring some order to the country and succeed in bringing some oil fields back online. But with a deal for the two oil companies to merge into one National Oil Company, Libya took a small step towards achieving that goal.

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The number of sexual assaults in Europe as a result of the refugee crisis has been something that we have covered extensively, most notably the "monstrous" attacks by men "of Arab or North African origin" that occurred on German women in Cologne during a New Year celebration (that led to the ministry actually trying to scrub the word "rape" from internal reports). However, there have been other instances, such as an assault by a "dark skinned" man on a 13 year old girl at a pool in the town of Mistelbach, Austria. Now we learn that a mob of "foreign youths" sexually assaulted 35 females as young as 12 years old at a Swedish music festival.

At least 35 females aged between 12 and 17 reported being attacked during the Party in the Park festival in Karlstad on Friday and Saturday night, and some of the alleged victims reported being 'kissed and groped' in a situation reminiscent of the Cologne New Year attacks the Daily Mail reports.

17 year old victim Alexandra Larsson waived her right to anonymity to describe in detail how an attacker targeted her while Larsson was watching the event. Larsson tells how boys that "were not from a Swedish background" started groping her, and threatening her by saying "you will die, b***h."

From The Daily Mail

'Everything was okay at the beginning of the evening. But things got out of hand during the last concert with John de Sohn that started at midnight.

 

'At first we were pushed right up against the stage by the massive crowd. Everyone around us behaved really badly and my friends told a couple of boys to quieten down.

 

They were then threatened by the boys who said “you will die, b***h”. But the verbal abuse was just beginning. It would become much worse.

 

'We managed to walk away from those boys after a while and started watching the concert. That was when I felt the first touch against my bottom.

 

'Then someone took the liberty of grabbing my butt really hard. I turned away and said to the group of boys behind us that this was not okay, but I did not know who had done it. After a while, I felt someone running his fingers between my legs touching my genitals. Luckily, I had jeans on me.'

 

After the harassment, she turned around and said to the group of young men standing next to her that they should stop what they were doing. But everyone around her claimed to be innocent. It then happened again, she said.

 

'I turned around and screamed right out that "whoever it was – you're a pig!" I told my friends what had just happened and they were all shocked. Me and my girlfriends decided to leave the concert, because we could not see who it was. It was just a sea of ??people.'

 

Ms Larsson described a feeling of powerlessness as the festival she and her friends had been looking forward to was completely destroyed.

 

'It was creepy. Someone stood around me and groped me and I had no idea who it was. It was sick. We had come there to have fun, but the festival only lasted 20 minutes for us because it was so uncomfortable.

 

'The groping was at first a bit innocent. Just a touch on the bottom. Something that you can do by mistake in a big crowd of people. But it became worse and worse after that. The one touching me was becoming more and more rough every time.

 

She said that the boys around them were about 17 or 18-years-old but 'those standing behind me were not from a Swedish background.'

 

'They were probably immigrants. I hate to say it. But it is the truth,' she said.

Larsson recalled seeing another friend crying from the audience, and by the time they left the concert she could see crying girls everywhere. Larsson believes that the attackers behave this way because they don't believe they'll get caught.

'I have reported this to the police, but it feels like a drop in the ocean. I saw girls that came crying from the audience, including an old childhood friend who is two years younger. She cried so much that it broke my heart.

 

'The same thing had happened to her in front of the stage. A bunch of teenagers hidden in the crowd had grabbed her bottom, breast and genitals.

 

'I think that at least hundreds were molested at the festival. There are probably loads of unrecorded incidents. Girls who have a low self esteem might think that it is their fault – that perhaps they did something wrong to provoke it. But they are wrong. Nobody gets to touch a woman without her own permission.

 

'I could see crying girls everywhere around me when I left the festival. I don't know if they all had been groped, but most of them probably had been violated in front of the stage.

 

Ms Larsson said that she was 'strong and could cope with it' but added: 'When a 14-year-old girl who is not as strong becomes a victim, she can be completely destroyed. That is what is so sick. It happens all the time but we can not do anything about it.

 

'I do not know what to think, it is so wrong. Everyone thinks it's wrong but nothing happens. There are large festivals with several thousand people and these mass incidents create a powerlessness for both the police, security guards and especially for visitors who become victims.

 

'The perpetrators will be so anonymous in the audience that they will get away with sex crimes. That is the main problem, that the perpetrators get away with it.

 

'It's not okay. I should be able to go to festivals and have fun like everyone else without being afraid. It is wrong, really wrong, but that's the feeling I have after yesterday. It's damn hard that ordinary people who just want to have fun should have to suffer just because someone thinks it's fun to violate.

 

She said that she believed the problem was spreading 'because attackers know they will not get caught'.

But she added that police took it 'really seriously' when she reported the incident and is hoping that this will lead to something.

 

'I will not visit the festival again. It was so uncomfortable, I do not want to risk that happening to me one more evening.

Police reported that the perpetrators linked to the assaults were "young men, who are foreigners", and two boys have been arrested, both living at a nearby asylum centre for unaccompanied refugee children.

As we reported yesterday, a Swedish police report released last month said that the country has the worst rates of sexual violence against women in all of Europe. The solution to that tragic statistic? "Don't Grope Me" wristbands… should do the trick when refugees wish to gang up and attack young females.

* * *

With Sweden's lack of ability to address the situation in any meaningful way other than a wristband, is it any wonder that Sweden leads the world in having the least amount of confidence in Donald Trump – someone who is clearly not afraid to speak his mind when it comes to these matters.

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In a scandalous announcement, FBI director James Comey moments ago said that “although there is evidence of potential violations of the statutes regarding the handling of classified information” and he gave extensive evidence of just that, “our judgment is that no reasonable prosecutor would bring such a case.” He added that “prosecutors necessarily weigh a number of factors before bringing charges. There are obvious considerations, like the strength of the evidence, especially regarding intent. Responsible decisions also consider the context of a person’s actions, and how similar situations have been handled in the past.”

What is shocking is that the FBI director was clearly ignoring the US code itself, where in Section 793, subsection (f),”Gathering, transmitting or losing defense information“, it makes it quite clear that intent is not a key consideration in a case like this when deciding to press charges, to wit:

Whoever, being entrusted with or having lawful possession or control of any document, writing, code book, signal book, sketch, photograph, photographic negative, blueprint, plan, map, model, instrument, appliance, note, or information, relating to the national defense, (1) through gross negligence permits the same to be removed from its proper place of custody or delivered to anyone in violation of his trust, or to be lost, stolen, abstracted, or destroyed, or (2) having knowledge that the same has been illegally removed from its proper place of custody or delivered to anyone in violation of its trust, or lost, or stolen, abstracted, or destroyed, and fails to make prompt report of such loss, theft, abstraction, or destruction to his superior officer— Shall be fined under this title or imprisoned not more than ten years, or both.

What is even more shocking is that the FBI itself, less than a year ago, charged one Bryan H. Nishimura, 50, of Folsom, who pleaded guilty to “unauthorized removal and retention of classified materials” without malicious intent, in other words precisely what the FBI alleges Hillary did (h/t @DavidSirota):

U.S. Magistrate Judge Kendall J. Newman immediately sentenced Nishimura to two years of probation, a $7,500 fine, and forfeiture of personal media containing classified materials. Nishimura was further ordered to surrender any currently held security clearance and to never again seek such a clearance.

 

According to court documents, Nishimura was a Naval reservist deployed in Afghanistan in 2007 and 2008. In his role as a Regional Engineer for the U.S. military in Afghanistan, Nishimura had access to classified briefings and digital records that could only be retained and viewed on authorized government computers. Nishimura, however, caused the materials to be downloaded and stored on his personal, unclassified electronic devices and storage media. He carried such classified materials on his unauthorized media when he traveled off-base in Afghanistan and, ultimately, carried those materials back to the United States at the end of his deployment. In the United States, Nishimura continued to maintain the information on unclassified systems in unauthorized locations, and copied the materials onto at least one additional unauthorized and unclassified system.

 

Nishimura’s actions came to light in early 2012, when he admitted to Naval personnel that he had handled classified materials inappropriately. Nishimura later admitted that, following his statement to Naval personnel, he destroyed a large quantity of classified materials he had maintained in his home. Despite that, when the Federal Bureau of Investigation searched Nishimura’s home in May 2012, agents recovered numerous classified materials in digital and hard copy forms. The investigation did not reveal evidence that Nishimura intended to distribute classified information to unauthorized personnel.

 

This case was the product of an investigation by the Naval Criminal Investigative Service (NCIS) and the Federal Bureau of Investigation. Assistant United States Attorney Jean M. Hobler prosecuted the case

It doesn’t end there.

Here is former FBI Assistant Director Chris Swecker who told CNBC moments ago, that in his view Comey should have brought charges as “he seemed to be building a case for that and he laid out what I thought were the elements under the gross negligence aspect of it, so I was very surprised at the end when he said that there was a recommendation of no prosecution and also given the fact-based nature of this and the statement that no reasonable prosecutor would entertain prosecution, I don’t think that’s the standard.”

His conclusion: “The facts are the facts, and in this case I think there are a lot of things that are very unusual about this.”

And then there is Ian Bremmer who said that “it’s very clear that in trying to make it go away actually lied, repeatedly, about whether or not these materials were classified at the time. And it’s the cover up frequently that gets people in trouble, it’s not the actual misdeed. This was very badly mishandled by Hillary all the way through.”

But then she got some much needed help from the FBI to complete the cover up.

In retrospect, perhaps former Attorney General Eric Holder said it best when he justified with the US DOJ simply refuses to bring up criminal cases against those it deems “too big to prosecute”: 

if you do bring a criminal charge it will have a negative impact on the national economy, perhaps world economy

And just like that, Hillary is now systemic.

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WTI Crude is down over 5% to $46.50 – its biggest daily drop since early September 2015…

With East Coast gas inventories at a record high…

Sparking selling in crude..

Crude dropped with equities on a gloomy outlook for the global economy and amid signs that oil stockpiles remain ample.

Nigerian oil output rose last month following repairs to infrastructure that had been damaged by militant attacks, a Bloomberg survey showed, while gasoline supplies on the U.S. East Coast reached a record, the government said. Gasoline futures dropped to the lowest price in more than two months.

 

“The path of least resistance is lower,” said Michael Wittner, the New York-based head of oil-market research at Societe Generale SA. “The long-term picture remains bullish but in the short-term, crude is coming back from the disruptions. We have a lot of crude to work off as well.”

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By EconMatters

The recent free agency period in the NBA is a sign of impending doom as Economics is about to lay its wrath of consequences for the massive scale of financial incompetence exhibited by the NBA Business Model.

The NBA needs to copy the NFL Business Model as the financial numbers just don`t add up, and the latest trend of two good teams with 15 unwatchable teams and 13 teams being complete garbage is going to lead to further declines in merchandising revenue, game attendance, food and beverage sales, and fan support going forward.

When you have the employees running the asylum is it no wonder that salaries are out of control relative to declining attendance and overall competiveness of the league as a whole. When you start paying role players who have injury issues to boot 20 million dollars per season for four year at the latter stage of their careers you know you have a breakdown in the fundamentals of finance.

Just like Boxing which through poor mismanagement killed their product, the NBA is headed in that direction because of a poorly negotiated union contract, a revenue model that doesn`t make sense, and unbalanced talent dispersion around the league.

I would estimate that at least 10 NBA franchises will declare bankruptcy in the next 7 years at this current pace of financial mismanagement by teams as their stadiums are ghost towns, their product is unwatchable, the game experience is deteriorating by the year, and the quality of management professionals is well below average in the business community.

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The British Pound is now down almost 14% from pre-Brexit spike highs at 1.5018, crashing to 1.3000 for the first time since June 1985…

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Due to the “new lower path for mortgage rates” Goldman is raising their estimate for 2016 MBS Issuance to $1.3 trillion from $1.2 trillion and raising their 2017 MBS issuance estimate to $1.3 trillion from $1.1 trillion. Goldman’s team cut their 10-Yr US TSY estimate to 2% from 2.4% ahead of an expected refinancing blitz.  

All of this follows “the decision” out of the UK and Goldman’s credit group fears the “burned-out” borrower (which consists of 65% of the whole borrower pool) and those borrowers who are “sensitive to a change in rates” will seek to refinance their mortgages as the Fed raises rates (though that action is debatable as Jeff Gundlach said in June).

Goldman expects refinancing volumes to increase as rates remain lower for longer in advance of an inevitable Fed rate hike:

A large fraction of outstanding conventional mortgage borrowers are on the cusp of refinancing, so a further decline in rates could elicit significant additional refi volumes. Exhibit 1 shows that over 65% of outstanding mortgage borrowers have note rates between 3.5% and 4.5%; these borrowers are the ones whose refi behavior is most sensitive to changes in rates. Prepayments on borrowers with high note rates (> 5.0%) are not very sensitive to changes in interest rates, as these borrowers are already far in-the-money to refi, and are burned-out. Borrowers with note rates below 3.25% are out-of-the-money to refi, and are also insensitive to small rate moves. The borrowers who are now slightly in-the-money are most sensitive to rate changes, and there are many such borrowers. Mortgage universe negative convexity is at -2.0, an 80th percentile level relative to 2000-2016 history, meaning that MBS portfolio durations can move significantly as rates change going forward.

The fear on Goldman’s desk stems from the spike in internet-based searches for mortgage refinancing, which hit a level unseen since Q3 2012::

One can only image what it must be like to be a borrower in San Francisco, where the PoppyLoan offered by the San Fran Credit Union appears to have done nothing to dampen the historic ramp in the Cash Shiller Index:

Deutsche Bank noted in April the slow start to home purchases…perhaps the declining 30-year rate will not only spur refinancing but also home purchases, lest we learn the economy real is not as strong as the Kool-Aid salesman want us to believe:

The only thing any of us can do is hope the “un-hedged” (and clearly un-hinged) Fed portfolio can be managed (pause for laughter).

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