Month: March 2017

Authored by Mike Krieger via Liberty Blitzkrieg,

Open the Books is back in the spotlight today with another deep-dive report, this time looking into U.S. taxpayer subsidies, tax breaks and federal payments into Ivy League colleges.

Below are a few key findings from the report, titled: Ivy League, Inc.

1. Ivy League payments and entitlements cost taxpayers $41.59 billion over a six-year period (FY2010-FY2015). This is equivalent to $120,000 in government monies, subsidies, & special tax treatment per undergraduate student, or $6.93 billion per year.
 
2. The Ivy League was the recipient of $25.73 billion worth of federal payments during this period: contracts ($1.37 billion), grants ($23.9 billion) and direct payments – student assistance ($460 million).
 
3. In monetary terms, the ‘government contracting’ business of the Ivy League ($25.27 billion – federal contracts and grants) exceeded their educational mission ($22 billion in student tuition) FY2010-FY2015.

 4. The eight colleges of the Ivy League received more money ($4.31 billion) – on average – annually from the federal government than sixteen states: see report.
 
5. The Ivy League endowment funds (2015) exceeded $119 billion, which is equivalent to nearly $2 million per undergraduate student.

 

6. As a non-profit, educational institution, the Ivy League pays no tax on investment gains. Between FY2011-FY2015, the Ivy League schools received a $9.6 billion tax break on the $27.3 billion growth of their endowment funds. In FY2014, the tax-free subsidy on endowment gains amounted to $3.4 billion, or nearly $60,000 per student.

 

7. With continued gifts at present rates, the $119 billion endowment fund provides free tuition to the entire student body in perpetuity. Without new gifts, the endowment is equivalent to a full-ride scholarship for all Ivy League undergraduate students for 51-years, or until 2068.

 

8. In FY2014, the balance sheet for all Ivy League colleges showed $194,332,115,120 in accumulated gross assets. This is equivalent to $3.35 million per undergraduate student.
 
9. The Ivy League employs 47 administrators who each earn more than $1 million per year. Two executives each earned $20 million between 2010-2014. Ivy League employees earned $62 billion in compensation.
 
10. In a five-year period (2010-2014) the Ivy League spent $17.8 million on lobbying, which included issues mostly related to their endowment, federal contracting, immigration and student aid.

Nice gig if you can get it.

Read the entire report here.

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Now that the CrowdStrike DNC election hacking report is looking more and more like a ham-handed scheme orchestrated by anti-Russia, anti-Trump factions – which include Atlantic Council co-chairs Evelyn Farkas and CrowdStrike’s Dmitri Alperovitch, it appears the “Muh Russia” contingency is just haphazardly throwing their remaining cards on the table. The men in wood paneled rooms have apparently let the lunatics run the asylum.

While the House Intelligence Committee is hard at work sifting through revelations that the Obama administration spied on Trump and his team, Senate Intelligence Committee chair Mark Werner (D-VA) has dribbled forth completely unsupported claims that Russia influenced the election by employing a ShareBlue-esque army of “Internet Trolls” to post Fake News stories in swing states!

Mr Warner said: “We know about the hacking, and selective leaks, but what really concerns me as a former tech guy is at least some reports – and we’ve got to get to the bottom of this – that there were upwards of a thousand internet trolls working out of a facility in Russia, in effect taking over a series of computers which are then called botnets, that can then generate news down to specific areas. –Independent.co.uk

I’ll give you a second to recover…

What’s “Nerd Virgin” in Russian?

Sorry folks from Wisconsin, Michigan, and Pennsylvania – you’ve been had! Victimized! Fake News’d by the Russians! Your puny brains were no match for neckbearded Putin puppets who used the latest in mind control to rock the voteski.

“It’s been reported to me, and we’ve got to find this out, whether they were able to affect specific areas in Wisconsin, Michigan, Pennsylvania, where you would not have been receiving off of whoever your vendor might have been, Trump versus Clinton, during the waning days of the election, but instead, ‘Clinton is sick’, or ‘Clinton is taking money from whoever for some source’ … fake news

Funny enough, the United States does exactly this. It’s called SOCKPUPPETING! Very original Werner…

Perhaps the Senate Intel Committee is afraid to release specific examples of alleged “Russian Trolling” because they’re afraid 4chan and Reddit’s “The_Donald” community – the other groups they tried to blame for Hillary’s loss – will tear it to shreds within hours?

Give it up Neocons. You ran an out of touch candidate who cheated against Bernie Sanders – a guy who may have actually beaten Trump, and white hats within US Intelligence community gave the emails to Julian Assange in order to reveal how corrupt she is. She also fainted on 9/11/2016 and was chucked into a van like a side of beef, which couldn’t have helped.

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Gizmodo did some digging into comments by James Comey, who said he had secret Instagram and Twitter accounts, with great success.
The writer, Ashley Feinberg, surmised that his Twitter account had to be @projectexile7.

Project Exile happens to be a federal program that James Comey helped develop when he was a U.S. attorney living in Richmond. And then, of course, there are the follows.
 
ProjectExile7 follows 27 other accounts, the majority of which are either reporters, news outlets, or official government and law enforcement accounts. The New York Times’ Adam Goldman and David Sanger and the Washington Post’s Ellen Nakashima and David Ignatius, all of whom have been aggressively covering the FBI investigation into Trump’s contacts with Russian agents, made the list, as did Wittes and former Bush Administration colleague Jack Goldsmith. Donald Trump is on there, too, but @projectexile7 seems to have begun following him relatively recently (its first follow was @nytimes).
 
There are two outliers: William & Mary News (where Comey attended undergrad) and our colleagues at The Onion (everyone deserves to have fun).

 
Let’s assume Ms. Feinberg nailed Comey and his secret Twitter account. What can we learn from his activity? He hasn’t tweeted, so there’s nothing to judge there. His list of follows, as mentioned above, includes both media and political accounts. He follows a sundry of law enforcement accounts, such as the CIA, NYPD Counter-terrorism, Office of the DNI, FBI NY,  elitist publication The Atlantic, and main stream publications like Washpo, NY Times and Politico.

Of the 39 articles he ‘liked’, 8 were about him. Here are some other noteworthy ones.

Pedo-related

Republican Scott Walker attacking MUH college professors

Pro-Kasich article

He doesn’t follow Breitbart, but liked this anyway. Perhaps he was amused by it?

He liked a marxist propaganda piece by Washpo.

EPA shilling.

Russian conspiracies.

Our FBI director gets all of his news from main stream media fake news outlets and seems to favor a lot of liberal shilling in his twitter feed. Is it something? Probably not. But it’s interesting to see how self-absorbed he is with the way media perceives him — with 20% of his ‘likes’ being articles that talked about him.

Content originally generated at iBankCoin.com

 

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This morning we noted that a civil war within the Republican party looked all but inevitable after Trump threatened to fight Freedom Caucus members in the 2018 mid-term elections for holding up his healthcare legislation in the House.  Apparently they took offense to the threat as several conservative members of the House, including Idaho Congressman Raul Labrador and former Chairman of the House Freedom Caucus Jim Jordan, quickly followed up with return fire over twitter and Fox News.

Now, it appears as though Trump is prepared to go nuclear against members of his own party with his latest tweet calling out individual congressmen by name.

“If @RepMarkMeadows, @Jim_Jordan and @Raul_Labrador would get on board we would have both great healthcare and massive tax cuts & reform.”

If @RepMarkMeadows, @Jim_Jordan and @Raul_Labrador would get on board we would have both great healthcare and massive tax cuts & reform.

— Donald J. Trump (@realDonaldTrump) March 30, 2017

 

Something tells us that those continued healthcare discussions aren’t going as well as certain members of the House would like for us to believe.

* * *

For those who missed it, below is our coverage of the twitter war that started this morning and has developed throughout the day.

Update: Idaho Congressman Raul Labrador has just chimed in with his own tweet advising Trump to “remember who your real friends are…we’re trying to help you succeed.”

@realDonaldTrump Freedom Caucus stood with u when others ran. Remember who your real friends are. We’re trying to help u succeed.

— Raúl R. Labrador (@Raul_Labrador) March 30, 2017

* * *

After Trump drew ‘first blood’ this morning with a tweet threatening to fight Freedom Caucus members in the 2018 mid-term elections, a pair of House representatives have fired back with aggressive tweets of their own implying that Trump’s healthcare plan was evidence that he had “succumb to the D.C. Establishment.”

“It didn’t take long for the swamp to drain @realDonaldTrump. No shame, Mr. President. Almost everyone succumbs to the D.C. Establishment.”

 

“.@realDonaldTrump it’s a swamp not a hot tub. We both came here to drain it. #SwampCare polls 17%. Sad!”

It didn’t take long for the swamp to drain @realDonaldTrump. No shame, Mr. President. Almost everyone succumbs to the D.C. Establishment. https://t.co/9bDo8yzH7I

— Justin Amash (@justinamash) March 30, 2017

.@realDonaldTrump it’s a swamp not a hot tub. We both came here to drain it. #SwampCare polls 17%. Sad! https://t.co/4kjygV2tdS

— Thomas Massie (@RepThomasMassie) March 30, 2017

 

Ohio Representative Jim Jordan, the former chairman of the House Freedom Caucus, also defended conservative lawmakers earlier today on Fox News.  Per The Hill:

“The Freedom Caucus is trying to change Washington, this bill keeps Washington the same, plain and simple,” Jordan said Thursday on Fox News’ “America’s Newsroom.”

 

“We appreciate the president, we are trying to help the president. But the fact is, you have to look at the legislation. It doesn’t do what we told the voters we were going to do, and the American people understand that. That’s why only 17 percent of the population supports this legislation.”

 

Jordan wouldn’t comment on the threat regarding the 2018 midterms, instead characterizing the scuttled healthcare vote as just a “postponement” and arguing that Republicans will succeed if they deliver on their promises to voters.

 

“Lets forget the blame and what may happen in the future, lets just do what we said. That’s what the Freedom Caucus and what Republicans are committed to,” he said.

Of course these latest tweets come after Trump took to twitter earlier this morning, saying “The Freedom Caucus will hurt the entire Republican agenda if they don’t get on the team, & fast. We must fight them, & Dems, in 2018!“

The Freedom Caucus will hurt the entire Republican agenda if they don’t get on the team, & fast. We must fight them, & Dems, in 2018!

— Donald J. Trump (@realDonaldTrump) March 30, 2017

So, Republican civil war it is…Ultimate winner:  Democrats.

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The drama surrounding South Africa’s finance minister appear to be over, and as many had expected, it concluded with president Jacob Zuma firing his finance minister.

As The Mail & Guardian reports, Zuma is set to announce a major reshuffle of his cabinet. The president has contacted affected cabinet ministers individually ahead of the formal announcement. Several reports indicate that nine ministers, including Finance Minister Pravin Gordhan, and six deputy ministers will be affected. On Thursday evening, Zuma called a special meeting of the ANC’s top six officials Cyril Ramaphosa‚ Baleka Mbete‚ Gwede Mantashe‚ Jessie Duarte and Zweli Mkhize, at his the presidential home, Mahlambandlopfu.

Besides the key finance ministry, he is expected to announce changes to several ministerial positions.

Earlier on Thursday, the SACP confirmed that Zuma had told its members that he planned to replace Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas in a Cabinet reshuffle. Gordhan will reportedly be replacted by Malusi Gigaba, the South African minister of public enterprises.

He is expected to announce changes to several ministerial positions.

“The SACP wish to state that as the norm, the president informed us of his intention to effect a Cabinet reshuffle,  replacing both the minister and the deputy minister of finance,” SACP deputy secretary general Solly Mapaila said.

Zuma, however, is expected to experience severe backlash to any changes to the cabinet. In this week’s M&G, the president’s detractors in the party warned that they would make Zuma’s life “unbearable” going as far as forcing him to step down if his plan to remove Finance Minister Pravin Gordhan from his position comes to pass.

The anti-Zuma faction has also warned they would join forces with opposition parties in Parliament and vote for a motion of no confidence against him. This comes as the Economic Freedom Fighters and the Democratic Alliance on Thursday announced their plans to have Zuma removed as president.

In other words, South Africa may be facing a full blown political crisis in the coming days, something increasingly reflected in the ongoing drop in the South African rand.

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Authored by Mike Shedlock via Mish Talk,

The Wall Street Journal reports Margin Debt Hit an All-Time High in February. Given that Margin debt has a history of peaking right before financial collapses this seems like a warning to me but analysts say it’s different this time.

Margin debt climbed to a record high in February, a fresh sign of bullishness for flummoxed investors trying to navigate the political and economic crosscurrents driving markets.

 

The amount investors borrowed against their brokerage accounts climbed to $528.2 billion in February, according to the most recent data available from the New York Stock Exchange, released Wednesday. That is up 2.9% from $513.3 billion in January, which had been the first margin debt record in nearly two years.

 

Before January, the previous record high for margin debt was $505 billion in the spring of 2015. Margin debt then started falling, months ahead of a summer swoon that sent major indexes down more than 10%.

Analysts Say Don’t Worry

MarketWatch reports Record Margin Debt May Be a Red Flag, but Analysts Say Don’t Worry.

The latest warning sign — following underperformance by small-cap stocks, record inflows into exchange-traded funds and high levels of political uncertainty — is margin debt, which is seen as a measure of speculation and just broke a record that has stood for nearly two years.

 

Don’t worry.

 

According to the most recent data available from NYSE, margin debt hit a record of $513.28 billion at the end of January, topping a previous record of $507.15 billion that had held since April 2015. Margin debt refers to the money that investors borrow to buy stocks, and high levels of it, in periods of market volatility, and can lead to sharper declines. Records preceded both the dot-com market crash and the financial crisis.

 

However, expecting a similar correction because debt is at a record now would be “naïve,” said Jeff Mortimer, director of investment strategy for BNY Mellon Wealth Management.

 

“This isn’t a signal to me that markets are reaching an exuberant level like they did in the 1920s or 1990s, when speculation was rampant,” he said. “What our clients are doing is borrowing against the portfolios because interest rates are so low. They’re not leveraging up because they see the market exploding to the upside; they’re using leverage because they can pay it off at any time.”

Borrowing Against Portfolios

Don’t worry, clients are just borrowing against their portfolios because rates are low. Allegedly, they can pay this back anytime.

Excuse me for asking, but what if they spent the money?

Consumer Confidence a Leading Indicator of Market Tops?

In response to Consumer Confidence Strongest Since December 2000: A Strong Contrarian Indicator? I received an interesting chart from Doug Short at Advisor Perspectives.

 

Once again, here is a chart from John Hussman to which I added vertical bars.

 

For now, I am sticking with consumer sentiment as a coincident, not leading indicator unless the markets make a fresh set of highs.

Hussman Tweeted, and I strongly agree, “Multi-year highs in consumer confidence are less a sign of forthcoming consumer spending as a sign of forthcoming investor losses.”

Here is margin debt in real terms for those who wanted it. http://pic.twitter.com/DCz0Q3pwZ4

— Jonathan Tepper (@jtepper2) March 30, 2017

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In case there was still any doubt as to what the “data-dependent” Federal Reserve reacts to, it was once again removed today when speaking in remarks at the University of South Florida in Sarasota, Florida, NY Fed president Bill Dudley said that “it is important not to overreact to every short-term wiggle in financial markets.” Which confirms that the Fed has traditionally overreacted to every short-term wiggle in financial markets, and which contradicts what both Kocherlakota and what Rosengren said previously, namely that the market is “not a driving force” for the Fed’s outlook.

Of course, we appreciate Dudley’s wry humor in stating that the Fed should not unleash the Bullard every time there is an even 5% S&P correction with threats of QE4, although with the elections now far in the past, we can see why the Federal Reserve would not mind a “modest correction” something both Evans and Rosengren warned yesterday could happen as the market is now clearly “frothy.”

That said, don’t assume the Fed will allow a full blown crash: because as Dudley also said in his speech,while the Fed is “not removing the punch bowl yet” – his words – it is “just adding a bit more fruit juice.” To wit:

“prior to the March FOMC meeting, financial conditions were generally easing rather than becoming tighter, even as the FOMC raised its policy rate in December and market participants increasingly expected further policy tightening in the coming year.  Between the December and March FOMC meetings, U.S. equity prices rose by about 4 percent, and credit spreads, such as those for high-yield bonds, narrowed.  Long-term yields and the trade-weighted dollar were little changed over this period.

 

William McChesney Martin, the ninth chair of the FOMC, once famously opined that the Federal Reserve is “in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.”  I don’t think we are removing the punch bowl, yet.  We’re just adding a bit more fruit juice. 

Maybe not removing the punch bowl yet, but by stating clearly that it is being diluted, Dudley confirmed what Goldman said two weeks ago, when the bank warned that the market has misread the Fed’s recent hike, which was not dovish, but was meant to be a hawkish, if modest, tightening of financial conditions.

* * *

In addition to the above comments, Dudley also said that tapering of the Fed’s balance-sheet reinvestments may be “a better course” than an earlier, abrupt end.

Among his other statements:

• Any announcement of changes to reinvestment policy is likely to tighten financial conditions, push up long-term rates.
• Fed will need to take into account the impact of any changes to reinvestment policy in its rate decisions
• Reducing balance sheet and raising short-term rates are “two different, yet related, ways of removing” accommodation
• Fed funds target range of 0.75%-1% is still unusually low; seems appropriate to scale back accommodation gradually
• Risks for growth, inflation may be shifting to upside; seems likely that fiscal policy will become more stimulative
• Economic outlook abroad appears to have brightened; risks from overseas seem significantly lower than a year ago; Now more confident that inflation will stabilize ~2% in medium term
• “Financial conditions need to be carefully considered” in conduct of monetary policy’’
• “What we care about is not financial conditions themselves, but rather their influence on economic activity”
• No simple answer to when FOMC should take changes in financial conditions into consideration in its decisions
• While financial conditions influence economic outlook, “so do many other factors”

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The leader of Venezuela’s coalition of opposition forces and the president of the National Assembly, Julio Borges, said President Nicolas Maduro had staged a coup and called for a military intervention.

Borges remarks followed a decision by the Supreme Court to take over legislative powers from the National Assembly for being in contempt of court. As the BBC reports, the charge stems from alleged electoral irregularities by three opposition lawmakers in the country’s elections 2015. The power struggle between President Maduro and the main opposition coalition (MUD) has been ongoing since the government lost its majority in the National Assembly in 2015. Since then, the top court which is allied with Maduro, has annulled many of the assembly’s decisions. But it had not directly taken over the assembly’s functions.

That changed on Wednesday when the court gave President Maduro the authority to create joint oil ventures without congressional approval, by-passing the assembly.

The government-stacked Supreme Court argued that the Congress is in contempt of court for swearing in three – opposition – lawmakers from the state of Amazonas who have been accused of electoral fraud. The court said it will take over all “parliamentary capacities” until the conflict is resolved.

“As long as the National Assembly’s contempt of court and invalidity persist, parliamentary powers shall be exercised directly by (the Supreme Court’s) constitutional chamber or by the body it stipulates to safeguard the rule of law,” the high court said in the ruling.

And, in what has been called a point of no return, Wednesday night’s ruling effectively shuts down the opposition-controlled Congress or National Assembly, as it is called in Venezuela.

The reaction from the opposition was swift, with Borges appealing to the public that “we have to call on the National Armed Forces (FAN), they cannot remain silent, they cannot remain silent in the face of the violation of the Constitution.”

Quoted by El Nacional, Borges said that “we know that FAN officers are also going through drama caused by the high cost of life. We want to make a call on them to be the first guardians of democracy and the Venezuelan Constitution and that they become part of the solution,” Borges said in a press conference.

Borges also called on the international community to “sound the alarms” and help pressure the socialist government of Nicolas Maduro to respect the Constitution and call for elections.

“This is a dictatorship and the world has to help Venezuelans to sound all the alarms,” Borges said. “We need the solidarity of all countries to continue the pressure (…) to carry out this year, as it is mandated by law and by the Constitution, elections for governors, mayors and also a general election,” he said.

Borges also called for a national protest this weekend and urged Venezuelans to raise their voice. “We know there is fear, there is repression, but it is time to stand up,” he said at a press conference.

Borges was joined by assembly’s Vice President Freddy Guevara who said earlier the ruling “marks a point of no return for the dictatorship.” Many are comparing it with the so-called “Fujimorazo” of April 1992, when Peruvian President Alberto Fujimori shut down Congress.

“It is no longer just a question of annulling everything that the National Assembly does,” Guevara said, “but of usurping all its powers, allowing them to approve new ‘sentencing laws’ that give more power to the dictator to continue hurting the people.”

Maduro has jailed scores of opponents ever since the opposition swept congressional elections by a landslide in 2015 and immediately set out to remove the socialist leader from office through a recall referendum. The high court a year ago issued an order automatically nullifying all legislation coming out of Congress, and earlier this week it moved to limit lawmakers’ immunity from prosecution.

Most recently, President Maduro accused opposition lawmakers of treason, after they asked the Organization of American States to consider suspending Venezuela for violating democratic norms.

But foreign governments are increasingly decrying the shift toward authoritarian, one-party rule. Earlier this week, diplomats from the hemisphere gathered at the Organization of American States in Washington to debate whether to punish Maduro for breaking the democratic order and rule of law.

Meanwhile, the Venezuela hyperinflating economy continues to disintegrate, and as reported yesterday the country with the world’s largest proven petroleum reserves ran out of gasoline for its citizens, ahead of billions in upcoming bond payments to be made by the state-owned PDVSA energy company, which instead of providing supplies is saving every dollar to avoid a default.

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