Month: June 2017

Authored by Joseph Jankowski via PlanetFreeWill.com,

Even after James O’Keefe and Project Veritas essentially blew the lid right off the fake ‘Russia hacked the election’ narrative, Hillary Clinton’s former campaign chairman, John Podesta, doubled down on the debunked narrative when challenged by Fox News’ Maria Bartiromo on his ties to a Kremlin-backed company.

Podesta met behind closed doors on Tuesday with the members of the House Intelligence Committee as part of the panel’s investigation into supposed Russian efforts to meddle in the presidential election.

When asked what he could tell the Thursday Fox audience about the House Intel meeting, Podesta explained that the panel wanted to know “what had happened to me and the effect on the campaign … the effect of the Russian interference in our democratic process.”

“They’re probing what actually happened, whether if there was collusion and what we’re going to do about,” Podesta told Bartiromo.

 

“They asked me not to get into specific questions that they asked me and my specific answers but in general terms, they’re taking a bipartisan look at this stage.”

Fox Host Maria Bartiromo then chimes in with a question that digs sharply into the skin of Podesta.

“Don’t you find it odd that there’s been so much attention on the Trump Campaign and the Trump associates and potential collusion with the Russians when in fact it’s really the Democrats who have deeper and stronger ties to Russia,” Bartiromo said.

 

“I mean John I have to ask your own situation..”

Bartiromo then goes on to break down how Podesta joined the board of the board of a small energy company in 2011 which later received $35 million from a Kremlin-funded entity. According to Bartiromo, Podesta also owns 75,000 shares in a Russian company and failed to disclose this to the Obama administration.

And this is where things got heated…

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Trump effectively owes his election to the promise of bringing factories and manufacturing jobs back to the United States.  His relentless, targeted attacks against the ‘Big 3’ U.S. auto manufacturers for outsourcing jobs to Mexico was undoubtedly a key reason that he was able to shock the world and win Michigan, Wisconsin, Ohio and Pennsylvania…an accomplishment which has eluded Republicans since Ronald Reagan.

Unfortunately, while factories may once again be making a comeback in the United States, after chasing low wages all around the globe for decades, they’re unlikely to bring the jobs with them.  As a new study from McKinsey highlights, if a new factory opens up in the United States you can bet it’s only because most of the jobs that used to be performed by humans have since been automated.  Per Bloomberg:

American manufacturing could be poised to rebound as technological disruption shakes up global production chains, but that will offer little relief to displaced factory workers, according to new research by the McKinsey Global Institute.

 

Now, McKinsey sees conditions changing in a way that could favor U.S. producers: automation is weakening the case for labor arbitrage as wages rise in emerging market economies and developing market residents are coalescing into a new consumer class, among other factors.

 

While the U.S. could seize on those manufacturing growth opportunities, especially if the government and companies invest to make production more competitive, there are catches. Importantly, production might bounce back without bringing a lot of jobs in tow.

 

“Even if we rebuild factories here and you build plants here, they’re just not going to employ thousands of people — that just doesn’t happen,” said report co-author and McKinsey Global Institute Director James Manyika. “Find a factory anywhere in the world built in the last 5 years — not many people work there.”

 

Not surprisingly, the biggest beneficiary of the decimation of the America’s manufacturing base has been China…which also means they have the most to lose as those jobs get automated.

 

Looking at the likelihood of automation by industry, McKinsey finds that factory employment ranks near the top of the list — behind accommodation and food services and just ahead of agriculture. Investment in re-training could help employees who are displaced, Manyika said, but it won’t happen overnight.

“It’s a bit of a heavy lift — in the skilling, the investment in the right places, the right skills — it’s not going to happen by itself.”

 

Of course, this wouldn’t be the first time that economists had prematurely predicted the demise of labor markets due to technological advances:

“We are being afflicted with a new disease of which some readers may not have heard the name, but of which they will hear a great deal in the years to come—namely, technological unemployment” – Keynes, 1930

 

“Labor will become less and less important. . . More and more workers will be replaced by machines. I do not see that new industries can employ everybody who wants a job” – Leontief, 1952

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Authored by Ryan McMaken via The Mises Institute

 

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After being tripped up by a series of embarrassing events this week, including a “fake news” story which resulted in the “resignation” of three CNN ‘journalists’ and two undercover videos from Project Veritas which reveal CNN insiders describing their own network’s ‘Russian collusion’ narrative as “mostly bullshit” and “a big nothing burger‘, the mainstream media has resorted to doing what liberals do best when they get caught…they’re playing the victim card. 

In case you haven’t been made aware, ‘progressives’ have never, ever been wrong…and if you disagree then you’re just a racist, misogynist hate-monger and you need to seek professional help.

In fact, here is a clip from CNN that we shared just yesterday in which grandstanding anchors, after recklessly pushing the fake ‘Russian collusion’ narrative for months, casually admitted “We can debate collusion. They’re right, there’s no evidence of that…” and then moments later pre-emptively blamed Trump for any and all future attacks on reporters: “We are going to see a reporter face physical harm because” of President Trump’s “declaration of war on the media.”

 

Which is ironic, because CNN’s “mostly bullshit” Russian collusion stories, and similar tactics by other networks, are likely what caused an unhinged liberal to open fire on a Republican baseball practice a few weeks ago, nearly killing Majority Whip Steve Scalise.

But famed investigative journalist Bob Woodward, the reporter who broke the Nixon Watergate scandal, isn’t buying the MSM’s ‘we’re just innocent little reporters trying to do our jobs’ shtick.  Instead, in remarks following a screening of “All The President’s Men” in Washington, D.C., Woodward blasted the media’s open bias toward President Trump and warned that they’re losing all credibility with the public.  Per the Daily Caller:

He pointed to a list of Trump’s “lies” compiled by The New York Times in which some of the president’s are misjudged as an example of overt bias, after he was asked about the media’s treatment of Trump in a Q&A session at Landmark E Street Cinema.

 

“[Number three on the list] was that Trump said he was on the cover of Time magazine 14 or 15 times when it was in fact 11 times,” Woodward said. “… That’s not a lie.” He likened Trump’s statement instead to someone getting pulled over for speeding and telling the police officer that they were driving the speed limit.

 

“Tone matters, and headlines matter, and you want people to [trust you],” he said.

 

“[It] really betrays the anti-Trump media bias,” Woodward added, regarding the media’s coverage of the investigation into Russian meddling in the election. “I think a kind of brief, deeply fair-mindedness is essential, but as essential or maybe more essential is a game plan for reporting this and going to Moscow and finding the bookkeeper.”

Woodward’s New York Times example came from an article entitled “Trump’s Lies” which included the following two ‘lies’ at the very top of the list:

JAN. 21 “I wasn’t a fan of Iraq. I didn’t want to go into Iraq.” (He was for an invasion before he was against it.)

 

JAN. 21 “A reporter for Time magazine — and I have been on their cover 14 or 15 times. I think we have the all-time record in the history of Time magazine.” (Trump was on the cover 11 times and Nixon appeared 55 times.)

Of course, in light of Trump’s most recent tweetstorm targeting MSNBC’s Mika Brzezinski, who was apparently “bleeding badly from a face-lift” when she visited his Mar-a-Lago hotel back in December, we suspect things are only gong to get worse from here.

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Via Priceonomics.com,

The theory of supply and demand teaches us that consumers will pay the same prices for the same goods in a competitive market.

In reality, however, markets are rarely perfect and prices fluctuate wildly, with people often paying different prices for a variety of reasons. This is especially true in "business to business" markets where pricing can be especially opaque.

One of our customers, Plate IQ, has a massive database detailing just how much restaurants pay for their ingredients. Just how often were restaurants paying different amounts for the same item? We wanted to understand just how common this form of price variation is, so we combined invoice data from thousands of restaurants to create a dataset of millions of individual items purchased over a 90-day period.

We analyzed instances where the same supplier sold the same item to different restaurants for different prices on the same day. There are several reasons that might explain some of this variance – vendors often change their pricing for restaurants based on overall purchase volume, restaurant location, or for a variety of contractual reasons. 

Nonetheless, we saw daily price variation for nearly two thirds of items in our dataset. While vendor prices typically varied by less than 25% for an individual item, these price discrepancies can add up quickly. 

***

We first wanted to see just how common supplier price variation is in the restaurant industry. We counted how many days in a 90-day period an item was sold by the same supplier to different restaurants in the same area for prices that differed by more than $0.50. 

We were only interested in times where a vendor sold an item at different prices on the same day, since prices for many food items fluctuate seasonally, even weekly, depending on a host of supply factors.

Data source: Plate IQ

More often than not, vendors were charging different prices for the same item on a given day. Only 36% of items in our dataset were always sold at the same price, so nearly two thirds of ingredients showed some same-day price variation in the 90-day period.

When vendors charge restaurants different prices for the same item on the same day, how large is the price difference? For all items that showed at least some price variation, we calculated the maximum same-day price difference observed over a 90-day period. The distribution of variation sizes is shown below.

Data source: Plate IQ

Roughly one third of items shifted in price by less than 10% of their average price. The remaining two thirds showed more dramatic price variations, with vendor prices varying up to 50% for the same item between different restaurants on the same day.

We next looked at which items vendors were most likely to sell for different prices on the same day. We divided the number of days on which we saw price variation by the total number of days that item was sold, and expressed the result as a percentage. The 25 items for which vendors’ prices shifted most dramatically in one day are ranked below.

Data source: Plate IQ

The products with the most variable prices were diverse, encompassing produce, dairy, meats, and dry goods. For the products above, vendors charged prices that varied on 87% or more of the days on which they were sold.

The items we ranked above represent a range of categories. Does that mean that price variation is roughly as common in one category as in the next? To find out, we looked at the percent of products in each category that varied in price at least some of the time. Categories are ranked accordingly below.

Data source: Plate IQ

Restaurants are most likely to encounter variation in vendor pricing when purchasing alcohol – nearly 60% of the items in this category showed some price variation. Similarly, in the produce and non-alcoholic beverage categories, vendors charged different prices for more than 50% of the items sold at least some of the time.

Even in the categories where price variation was least prevalent – kitchen supplies and prepared foods – 20% to 25% of products had shifting prices.

Next, we wanted to find the items for which vendors charged the most variable prices to different restaurants. We first filtered our dataset to items with prices that varied on at least 10 days. Then, we took the maximum same-day price variation for each product and expressed it as a percent of the average price. The 25 items with the greatest price variation are ranked below.

Data source: Plate IQ

Prices for these top 25 products swung up to 52% in a single day between different restaurants purchasing the exact same product from a given vendor. At the top of this ranking, for example, the cost of a chicken cutlet shifted by nearly a dollar within a single day. And some unlucky restaurateurs have paid up to $41.73 for Domino Dark Brown Sugar – ranked 8th on our list – while their neighbors paid just $28.73 from the same supplier.

We also wanted to summarize price fluctuation magnitude by category. We calculated the average price variation (as a percent of mean price) over all items within each category, and ranked the categories by this figure.

Data source: Plate IQ

Our analysis of the frequency of price variation above showed that kitchen supplies are among the items least likely to be sold for different prices. But this table shows that when prices do swing, they swing by a lot; the average kitchen supply varied in price by nearly 14%.

Seafood, prepared foods, and alcohol had the lowest average price variation, and perhaps thankfully so: because seafood and alcohol were among the top 3 most expensive categories overall, upward pricing shifts in these categories could have the greatest impact on restaurants’ margins.

Finally, we wondered if there was a straightforward explanation for all these price shifts. Could it be that restaurants are being quoted different prices from the same vendor simply because they’re buying different quantities of that item, and receiving volume discounts? To find out, we assessed whether an item’s price was positively, negatively, or not correlated with quantity purchased. We summarize the percent of items that fell into each category below.

Data source: Plate IQ

For about 50% of items, there was no relationship between price and volume purchased of that item. In other words, the price might have shifted, but not in a way that was correlated with purchase volume. Of the items that did show a relationship between price and quantity, we more often saw that high-volume purchases were priced lower – a trend that reflects bulk discounting. That said, 15% of the time the restaurant getting the best price was actually buying a lower quantity!

So does this mean volume discounting does not exist in the restaurant industry? Not exactly. More commonly, vendors will give a discount to restaurants based on the total amount purchased from a vendor for all items on the bill versus the amount of a single item.

***

So when are restaurateurs most likely to encounter different prices for the same item on the same day from the same vendor?

Most items show some price variation, typically on the order of a few dollars per unit (or within 20% of the average cost). Alcoholic and non-alcoholic beverages and produce items are most likely to swing in price, but kitchen supplies, produce, and dairy prices swing the most when they do vary in a given day.

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For about a week now, Benjamin Wittes, the Brookings Institution senior fellow and noted ally of former FBI Director James Comey, has been taunting the Trump administration with tweets suggesting that another ‘bombshell’ story, presumably related to the Russia investigation, was in the works and set to drop any minute (we covered it all here: “Tick, Tick, Tick” Comey Ally Scrambles To Explain Why “Next Trump Bombshell” Didn’t Arrive Today). 

Of course, people took notice of the warnings because Wittes posted similar tweets just before the New York Times published their now infamous story on Comey’s memos.

TICK TICK TICK TICK TICK TICK http://pic.twitter.com/yuL0o0TBbT

— Benjamin Wittes (@benjaminwittes) June 23, 2017

 

So what was the “bombshell” story?  It seems to have come in the form of a rather bizarre, and thoroughly difficult to follow, Wall Street Journal article entitled “GOP Operative Sought Clinton Emails From Hackers, Implied a Connection to Flynn.“

To summarize the ‘bombshell’, the story is about a long-time Republican opposition researcher, 81-year-old Peter W. Smith, who apparently set out on a mission to find Hillary’s 30,000 emails which the FBI confirmed had gone missing.  In his efforts to find those emails, he scoured hacking chat rooms looking for clues and/or hackers that might be able to help him.  The WSJ alleges that Smith may or may not have been working with Michael Flynn but, in the end, they found absolutely nothing.  To summarize even further, a guy tried to find Hillary’s missing emails and failed…HALT THE PRESSES!

Of course, the goal of the story is to paint some sinister plot that involved Smith and Michael Flynn enlisting the help of some Russians to hack the 2016 election…thus ‘proving’ the collusion angle. 

Unfortunately, the story seems to prove the exact opposite which is, if Flynn was really running around on some wild goose chase looking for Hillary’s missing 30,000 emails by chatting up hackers on a message board then we have to assume that means he wasn’t in any way connected to the original hack.

 

In any event, here is the Wall Street Journal’s take:

Before the 2016 presidential election, a longtime Republican opposition researcher mounted an independent campaign to obtain emails he believed were stolen from Hillary Clinton’s private server, likely by Russian hackers.

 

In conversations with members of his circle and with others he tried to recruit to help him, the GOP operative, Peter W. Smith, implied he was working with retired Lt. Gen. Mike Flynn, at the time a senior adviser to then-candidate Donald Trump.

 

“He said, ‘I’m talking to Michael Flynn about this—if you find anything, can you let me know?’” said Eric York, a computer-security expert from Atlanta who searched hacker forums on Mr. Smith’s behalf for people who might have access to the emails.

 

Emails written by Mr. Smith and one of his associates show that his small group considered Mr. Flynn and his consulting company, Flynn Intel Group, to be allies in their quest.

Of course, it’s only deeper in the story that the WSJ admits they have no idea if Flynn was even involved with Smith…but no one reads an entire article so it’s fairly irrelevant.

What role, if any, Mr. Flynn may have played in Mr. Smith’s project is unclear. In an interview with The Wall Street Journal, Mr. Smith said he knew Mr. Flynn, but he never stated that Mr. Flynn was involved.

And another irrelevant detail from the WSJ:

Mr. Smith said he worked independently and wasn’t part of the Trump campaign.

Finally, Smith apparently started his search for Hillary’s emails over the Labor Day Weekend in 2016.  His efforts to scour hacker forums ultimately yielded 5 groups who claimed to have the missing emails, 2 of which were Russian.  However, Smith seemingly doubted the authenticity of the intelligence he received and, as a result, never leaked their contents.

His project began over Labor Day weekend 2016 when Mr. Smith, a private-equity executive from Chicago active in Republican politics, said he assembled a group of technology experts, lawyers and a Russian-speaking investigator based in Europe to acquire emails the group theorized might have been stolen from the private server Mrs. Clinton used as secretary of state.

 

In the interview with the Journal, Mr. Smith said he and his colleagues found five groups of hackers who claimed to possess Mrs. Clinton’s deleted emails, including two groups he determined were Russians.

 

Mr. Smith said after vetting batches of emails offered to him by hacker groups last fall, he couldn’t be sure enough of their authenticity to leak them himself. “We told all the groups to give them to WikiLeaks,” he said. WikiLeaks has never published those emails or claimed to have them.

Meanwhile, the WSJ confirms that Smith died last month at the age of 81.

So there you have it…all the makings of another salacious, ‘bombshell’ story with multiple references to Russians, hackers, collusion, shady dealings with Michael Flynn, etc, etc, etc….yet still no evidence of pretty much anything.

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Authored by Darius Shahtahmasebi via TheAntiMedia.org,

Late last week, Saudi Arabia and other members of the Gulf Cooperation Council (GCC) that are involved in attempting to isolate Qatar sent the tiny Gulf nation a list of 13 demands. They are insisting that Qatar meet these demands within ten days or face unspecified further action.

The list of demands includes Qatar shutting down Al-Jazeera and its affiliate stations; shutting down other news outlets that Qatar funds, including Middle East Eye; curbing diplomatic ties with Iran and expelling members of Iran’s Revolutionary Guard; terminating the Turkish military presence in Qatar; consenting to monthly audits for the first year following acceptance of the demands, and aligning itself entirely with the other Gulf and Arab countries militarily, politically, socially, and economically – to name but a few.

The most ludicrous of the demands is that Qatar must end its interference in sovereign countries’ internal affairs. Qatar does interfere in a number of countries, including Libya and Syria, but as the German Foreign Minister explained, this list of demands directly challenges Qatar’s sovereignty. Who is interfering with whose sovereignty, exactly?

Unsurprisingly, Qatar has dismissed the list of demands as neither reasonable nor actionable. Surely, the Saudi-led anti-Qatar alliance is aware of this. It would be tantamount to asking Great Britain to shut down the BBC and expel American troops – it just wouldn’t happen. All of the world’s major newspapers are complicit in running state-sanctioned propaganda, and singling Al-Jazeera out is hardly fair or practical.

In that context, Saudi Arabia and its friends have given Qatar a list of demands they cannot conceivably meet and imposed a ten-day deadline to concede or face unspecified further action. Qatar was essentially doomed from the start of this rift, and it’s only just beginning. As Newsweek lamented, “the demands are designed to be impossible to comply with.”

The UAE has warned that Qatar is now facing indefinite isolation and that the economic and political sanctions are likely to become permanent. Taken together with the recent promotion of the Saudi King’s son, Mohammed bin Salman, now first in line to the throne, things are indeed heating up against Qatar. Prince Salman is widely regarded as one of the main proponents behind the Saudi-Qatar rift.

The ultimate agenda of the Saudi-led alliance is to deter Qatar from continuing its relationship with Iran, Saudi Arabia’s regional arch rival. But even the Guardian notes that “cutting ties to Iran would prove incredibly difficult,” as Iran and Qatar share a massive offshore natural gas field that supplies Qatar with much of its wealth. In fact, Iran immediately came to Qatar’s aid and began supplying the country with food after the Saudi-led sanctions created a shortage within the country. Shaking off Iran and Turkey —the two countries that have stood by Qatar’s side during this feud — is almost unthinkable. Qatar would be left without a single ally on either side of the Middle East region.

Qatar was initially among a handful of countries, including Turkey and Saudi Arabia, that wanted to install a natural gas pipeline through Syria and into Europe. Instead, the Syrian government turned to Iran and Iraq to run a pipeline eastward and cut out the formerly mentioned countries completely. This is precisely why Qatar, Saudi Arabia, and Turkey have been among some of the heaviest backers of the Syrian opposition fighters. This pipeline dispute pitted the Sunni Gulf States against the Shia-dominated bloc of Iran, Iraq, and Syria (Syria’s president is from a minority denomination of the Shia sect of Islam). Although Iran and Qatar shared this lucrative gas field, they were directly at odds in regard to how the field should have been utilized.

Not long after Bashar al-Assad’s proposed deal with Iran and Iraq was announced, foreign fighters began to flood the country. Syria was demonized at the outset, even though then-Secretary of State John Kerry dined with Assad two years before the conflict erupted. It should be clear that Washington’s issues with Assad are not rooted in human rights concerns considering the dictator had been in power for 11 years and was notorious for human rights abuses in the period before the so-called revolution began.

Though Qatar has been heavily involved in arming the Syrian opposition and calling for Assad’s departure (Assad being an integral Iranian ally), Qatar actually maintains an independent foreign policy agenda of its own. Over the past two years, Qatar has conducted over $86 billion worth of transactions in Chinese Yuan and has signed other agreements with China that encourage further economic cooperation.

This is incredibly important because Qatar shares its major natural gas reserve with Iran, and Iran also conducts its oil-related business deals with China in Yuan. Shortly after the nuclear accord reached in 2015, the Islamic Republic sought to capitalize on these economic opportunities by ramping up production on their share of the Iran-Qatari gas reserve. In November 2016, Iran signed a deal with France’s Total, a multinational integrated oil and gas company, to develop this project. Iran is expected to surpass Qatar’s gas production by next year, and Qatar was left with little choice but to join the venture. It lifted a self-imposed ban on developing the gas field in April of this year.

If Iran and Qatar continue down this path, the U.S.’ self-asserted hegemony over the world’s financial markets will directly come under attack, and rising economic and military powers like Russia and China will continue to reap the benefits.

Remember that Hillary Clinton’s leaked emails confirmed that the U.S. and France were so concerned with attacking Muammar Gaddafi in Libya not out of humanitarian concern, but rather, out of fear of his plan to unite Africa under a single gold-backed currency that would be used to buy and sell oil on the global markets.

Remember that in 2000, Saddam Hussein announced he would sell Iraqi oil in euros, and the Guardian reported in 2003 that Iraq had actually netted a handsome profit in doing so — at least until the U.S. invaded not long after and immediately switched the sale of oil back to U.S. dollars.

Perhaps it sounds like a conspiracy theory (even with Clinton’s leaked emails as evidence), but it’s important to ask why Saudi Arabia is so concerned with Qatar, if not for economic reasons? Because of Qatar’s support for terrorism? Hillary Clinton’s leaked emails also revealed that both Saudi Arabia and Qatar financially sponsored ISIS – making such a rationale hypocritical beyond belief.

Pot. Kettle. Black.

The push to oust Assad in Syria has almost all but failed, and Qatar, learning from its mistakes, is not relying on Assad’s departure to maintain its vast supply of wealth (though it would probably still welcome such a move). As Counterpunch explains:

“The failure of this insurgency, however, has spelled the death of this proposal, leaving Qatar bound to look East to Asia – already their biggest customers – for their LNG markets. But most of the existing Eastbound LNG pipeline infrastructure is controlled by Iran. For Qatar, then, cutting its Iran links would be cutting off its nose to spite its face. This is why the Saudis aim to demonstrate that the alternative is having their entire face cut off.”

How far in Saudi Arabia’s face-cutting agenda against Qatar these Gulf State adversaries will go is unclear, but Qatar has already seen some heavy-handed treatment in the early stages of this conflict. Further complicating the issue is the fact that Qatar hosts the largest U.S. military base in the region, with 11,000 troops currently stationed there.

Further, the U.S. just recently implemented a policy to target Iran for regime change. President Trump met with Saudi Arabia and the GCC nations earlier this year and sword-danced and sabre-rattled his way down a warpath with Iran. Trump’s military has been striking down Iranian drones and Iranian-backed troops in Syria, and the White House has just launched fresh accusations against the Syrian government regarding an attack that hasn’t even happened yet.

Clearly, Qatar cannot meet Saudi Arabia’s demands, and Saudi Arabia must be completely aware of this. As we have seen in Yemen and Syria, Saudi Arabia almost always resorts to outright brutality in order to bully non-compliant states into submission. As we have also seen in America’s treatment of Iraq and Libya, countries that depart from the U.S. dollar are not met kindly by the American military, either.

In this context, expect this rift to heat up on multiple fronts. We may very well be witnessing Qatar’s denigration into a Syrian or Yemeni-style battlefield in the months to come.

Let’s hope this is not the case.

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Prosecution called its first witness in the trial of former Turing Pharmaceutical CEO Martin Shkreli on Thursday. The witness, a former investor in one of Shkreli’s funds, alleged that Shkreli misled her about the fund’s performance, touting returns that were “too good to be true.”

The witness, Sarah Hassan, told jurors that she invested $300,000 with Shkreli in 2011 after being told he was “a rising star in the hedge fund world” who managed $40 million. She said she was thrilled when Shkreli reported she made nearly $60,000 that year alone, according to the Associated Press. However, she said those returns far overstated Shkreli’s performance; in fact, the fund lost money. A year later, Shkreli told her that he was using all the assets in the fund to start up Retrophin. When she tried to get her investment back, he stalled for months before forcing her into a settlement that included shares of Retrophin and $400,000 cash, she said.

 

Day 4 of #Shkreli trial underway. First witness, Sarah Hassan, 27-year-old daughter of Fred Hassan, just took the stand. Govt questioning

— Meg Tirrell (@megtirrell) June 29, 2017

 

Sarah Hassan tells prosecutor she invested $300k with #Shkreli in MSMB Capital in Jan 2011

— Meg Tirrell (@megtirrell) June 29, 2017

 

“To hear over a year later that the cash was gone, it was upsetting,” Sarah Hassan testified as the first witness at Shkreli’s securities fraud trial in federal court in Brooklyn. “I saw that as being my cash. It was just not right.”

"To be frank, I felt somewhat betrayed at this point," Hassan, 27, told jurors in Brooklyn, New York, federal court. "I was told I could get my cash from the fund months ago."

It’s unclear whether Hassan is the same government witness who was allegedly threatened by a member of Shkreli’s family, as Bloomberg reported last week.

The defense has countered that the federal government unnecessarily frightened three of the defense’s witnesses after FBI agents repeatedly tried to contact them.
***
The Shkreli trial is just getting started, but already there have been more than a few interesting twists. The trial was supposed to begin Monday, but, thanks to Shkreli’s reputation as “the most hated man in America,” the jury selection process consumed two full days as the defense meticulously interviewed 250 potential jurors, with many claiming they would be unable to issue a fair judgment thanks to Shkreli’s reputation as the “pharma bro” who hiked the price of lifesaving AIDS drug Daraprim by 5,000%.

* * *

MedCity, a pharma blog that's covering the trial, published a ranking of the top five excuses potential jurors used to get out of jury duty – one juror was excused for saying Shkreli "looks like a dick." Another said he couldn't be impartial because Shkreli "disrespected the Wu Tang Clan."

“In my head, I said, ‘That’s a snake,’” one woman told attorneys, perhaps the most iconic comment to date.

“Honestly? Because he kind of looks like a dick,” another juror said more bluntly, explaining his bias to the judge. The individual was reportedly familiar with Shkreli’s ownership of the sole copy of the Wu-Tang Clan album “Once Upon a Time in Shaolin,” purchased through an online auction in 2015 for $2 million.

“He disrespected the Wu-Tang Clan, so…” On a related note, CNBC reported that on day three a potential juror also brought up the issue and the aftermath, in which Shkreli leaked the record.

“In this particular case, the only thing I’d be impartial about is what prison he goes to” — another gem from day three.

And finally; “I am,” from the man Judge Matsumoto asked directly “Are you concerned for your safety?”

* * *

However, in a sign of hope for the embattled Shkreli – who is facing up to 20 years in prison if convicted – defense lawyer Benjamin Brafman has hit upon a novel defense strategy, according to the New York Times.

Brafman, a celebrity criminal defense lawyer known for representing Sean “P Diddy” Combs, Charles Kushner, and former Mafia boss Sammy the Bull Gravano, is claiming that much of the public’s hostility toward his client stems from Shkreli’s odd behavior, which he implied could be related to his client being mildly autistic – though it's unclear if a doctor has diagnosed him as such.

They’re calling it: The “Born This Way” defense, after the 2011 Lady Gaga hit single celebrating LGBTQ youth:

“An odd duck. Perhaps Autistic. Weird. Maybe with Asperger’s. A guy who shuffled around his office in bunny slippers with a stethoscope around his neck because he felt comfortable that way. This is how Martin Shkreli was portrayed on Wednesday for his trial on fraud charges – by Benjamin Brafman, his own lawyer.

 

“Is he strange? Yes,” Mr. Brafman said of his client. But he added, “every single government witness will concur that Martin Shkreli, despite his flaws and his personality, is brilliant beyond words.”

 

Brafman also pushed back against the defense’s claims, arguing that none of Shkreli’s investors lost money. In fact, Brafman told the jury they made money thanks to Shkreli’s financial prowess.

Shkreli is being tried on eight counts of securities fraud and wire fraud related to his time running two hedge funds, MSMB Capital and MSMB Healthcare, and a pharmaceutical company he founded called Retrophin.

In particular, Shkreli has been accused of falsifying investor statements, backdating documents and misleading investors about his record as a fund manager. He also allegedly misstated how much money was in the funds, according to prosecutor G. Karthik Srinivasan, who, in his opening statement, accused Shkreli of being a “con man” who managed to convince his investors that he was “a Wall Street genius.”

Prosecutors alleged that the string of events that led to Shkreli’s arrest began with a bad trade at his first hedge fund, MSMB Capital. Shkreli lost millions of dollars on a trade that put the fund in the red.

Around the same time, Shkreli founded MSMB Healthcare, a second fund, and Retrophin, a pharmaceutical company. Shkreli allegedly told his investors they could have their money back in cash or Retrophin stock, and when a couple of investors threatened to sue, Shkreli hired them as consultants at Retrophin.

“Retrophin owed these investors nothing – the defendant owed these debts,” Srinivasan said.

As Brafman noted, since Shkreli's departure, Retrophin has become enormously profitable – it's now worth about $700 million, and, Brafman said, the board is still "raping" the company. Brafman also argued that the board's treatment of Shkreli was unceasingly cruel, saying they mocked him and questioned his sexuality – all for being "different."

Investors may have made their money back, but Shkreli still committed fraud, the prosecution countered.

The trial is expected to last between four to six weeks.

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With Illinois facing a Friday night deadline by which it has to come up with its first fiscal budget in three years or face a downgrade to junk resulting in what a policymaker called a “death spiral“, another mini drama is taking place in Connecticut, which is also facing big budget problems as wealthy residents, hedge funds and major corporations flee the state’s high taxes and its fiscal future gets murkier by the day.

Just today, we reported that Aetna, the insurance giant founded in Hartford where it has been for the past 164 years, announced it would move its headquarters to New York City despite intensive lobbying efforts by Connecticut officials. The move, which followed a departure by GE of its Fairfield HQ of 40 years, is a blow to the company’s hometown, which is facing severe financial problems. Hartford’s problems are a representation of the troubles facing the entire state: while Illinois’ story is familiar, Connecticut has the distinction of the third-worst ratings in the country, only behind Illinois and New Jersey after S&P, Moody’s and Fitch all downgraded the state last month in what officials described as a “call to action” for state leaders.

“We’ve been downgraded by everybody in the last six months, and in the last year two or three times,” Senate Republican President Len Fasano said cited by Fox news. “If we don’t pass a budget, I think we will see a further downward spiral.”

And, just like Illinois (and 14 other states), Connecticut faces a Friday day of reckoning: the state has yet to pass a fiscal 2018 budget by the June 30 deadline.

“We must immediately take the necessary steps to mitigate the current year deficit and then balance the … budget with recurring measures to reduce spending and structural solutions to our long-term problems,” a spokesperson for the Connecticut Office of Policy and Management said in response to Moody’s downgrade.

It’s not just the rating, however.

Connecticut’s deficit has reached $5 billion, and according to an analysis by Pew, the state only has $240 million in its ‘rainy day fund’; just five states have a smaller cushion. Much of the financial troubles are tied to the state’s pension system, which two-term Democratic Gov. Daniel Malloy’s office is seeking to address with a new plan to save the state $24 billion in “coming years.” One solution offered by Malloy is to require new state employees to be covered under a new hybrid pension system. The agreement, which Malloy’s office made with the state union, is tentative and awaiting legislative approval.

“Connecticut can and will adopt a responsible, balanced budget for the coming biennium—the question is how best to handle our finances until that happens,” Malloy said. He offered a short-term “mini-budget” to allow “more time to negotiate a full budget, without making our current problems any worse and without further jeopardizing the state’s bond rating.”

But, like in Illinois, Republican Fasano told Fox News the governor’s budget is not seeing support on “either side of the aisle.” “His proposal decimates municipalities, social services and has no support, so we did our own budget,” Fasano said. “He has really shown the propensity of turning this state in a very negative direction.”

What makes things even more complicated is the even split in the State Senate:

Fasano serves as the State Senate’s Republican president in conjunction with the Democratic president. This is a special situation, as for the first time in decades, the State Senate is split evenly in the historically blue state.

 

“We are tied, 18-18, and that’s making it more difficult because the Democrats can no longer plow across the finish line a progressive agenda, fiscally speaking—so they can’t figure out what to do,” Fasano said. “Senate Republicans are the only ones with a line-by-line, detailed and balanced budget.”

Fasano claimed the budget put forth by Senate Republicans changes taxes and includes structural provisions that would help keep businesses in the state, although if Aetna is any indication, it’s not nearly enough.

“We are doing things to try to attract people to stay here as best we can, given the fact that we have a $5 billion deficit,” Fasano said. “If we do not pass a budget by June 30, we have sent a message, I think to everyone, that we have no idea what we’re doing, and that is not going to give [comfort] to people to buy or stay here.”

Those who have already left the state, mostly affluent hedge fund managers who have migrated to Florida, already got the message.

And while Aetna’s depature was a hit to the state, the state capital Hartford has been struggling with a financial quagmire of its own, even as we reported in early May, meeting last month to discuss the option of filing bankruptcy. “We know that now more than ever, we are in competition across all industries –not just with Massachusetts or New York state, but more specifically with Boston and New York City,” Malloy said last month.

Another problem is the fundamental deterioration in the state’s economy.

Connecticut’s unemployment rate rose to 4.9 percent in April, up from 4.5 percent in January. “Keeping those employees in Connecticut is far more important than where Aetna plants its corporate flag,” Malloy said. Malloy is looking to boost jobs with the approval this week to begin construction on the state’s third casino.

The Democratic governor remains optimistic, however, and his office told Fox News that companies like Xerox, Sikorsky, and Vineyard Vines, among others, have committed to the state over the last two years. But Fasano said he spoke with GE executives before they left and they cited state financial issues.

“They said Connecticut continues to tax at rates that make it unaffordable for businesses, people to stay here and didn’t see what Connecticut looked like seven or eight years from now,” he said. “… That’s the same analysis I’ve heard from a number of businesses as to why they’re leaving. The progressive agenda this governor put forth is now coming home to roost.”

* * *

So will CT pass a state budget? There was some 11th hour hope on Thursday, when AP reported that Connecticut House Democrats said they’ve come up with a two-year budget proposal that could be ready for a vote on July 18. The last minute $40 billion two-year plan would increase the state’s 6.35% sales tax to 6.99% to help maintain funding to cities and towns. It would also provide municipalities with additional ways to generate local revenue and restore the local property tax credit against the personal income tax.

The proposal was being offered up Thursday as lawmakers grappled over whether to pass Democratic Gov. Dannel P. Malloy’s three-month, stop-gap budget before the fiscal year ends on Friday. Malloy says it will be less draconian than having him run state government using his limited executive authority.

And, of course, there’s disagreement, about whether to vote on the mini budget. If the disagreement is not overcome by Friday, Connecticut could soon be in the same financial straits as Illinois.

Incidentally, the muni bond market – with its usual glacial delay – finally noticed that not all is well, and today yields on AAA-rated 10-year muni bonds rose 7 basis points to close at 1.95% , the biggest one day absolute increase since Dec. 15. There was a similar move for 5-year muni bonds which rose 5bps on the day to end at 1.34% now up 10 bps week-to-date, also the largest day-over-day move since December 15.

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