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Trump Sold All His Stocks In June

Following today’s tweet and follow up suggesting that Trump is now targeting Boeing’s contract pricing practices, questions emerged whether the President-elect wasn’t engaging in a conflict of interest due to his numerous, existing shareholdings. However, according to Trump spokesman Jason Miller, Donald Trump sold all of his stockholdings in June, removing himself from positions in numerous U.S. companies.

Miller made the revelation during a phone call with reporters on Tuesday morning. He was asked about Mr. Trump’s past holdings in Boeing Co., a company the president-elect had criticized earlier in the day for what he alleged were high costs for the next Air Force One, the WSJ reported.

“The President-elect sold all of his stock back in June,” Miller said. He subsequently clarified he was referring broadly to all of Mr. Trump’s stock, not Boeing specifically.

As his publicly disclosed asset list reveals, Trump had at least two brokerage accounts that held roughly 150 separate corporate stock and bond investments, according to a filing he submitted to the U.S. Office of Government Ethics in May. These included investments in a wide range of well-known companies, including Amazon.com Inc., Apple Inc., Boeing and Visa Inc. Trump’s stock portfolio was worth roughly $40 million as of December 2015.

As a reminder, two months later, in early August, Trump said “it’s time to sell stocks” and warned of “very scary scenarios” for investors. We now know that at least he had followed his advice. As to whether it is a very scary time for investors, we look forward to an upcoming tweet, warning that the market is “yuugely overvalued.”

Trump has a number of investments, including real estate properties, around the world. Some critics have alleged that parts of his portfolio could pose conflicts of interest, based on policies pursued once in the White House or moves by companies or foreign governments to try to curry favor. Liquidating his stock portfolio could alleviate some of those concerns, but House Democrats have pressed for more information about how he will manage his real estate holdings.

As the WSJ notes, Trump is expected to talk more about his business investments at a Dec. 15 press conference. He has said he would be turning over the operations of the Trump Organization to his adult children, though he hasn’t provided more details about how this will work.

Trump’s holdings as of May are listed below.

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Pentagon Buries Study Revealing $125 Billion In Waste On “Bloated Bureaucracy”

The Pentagon’s goal was simple, empower the Defense Business Board (DBB), a federal advisory panel of corporate executives, to retain consultants to identify potential cost savings in the Department of Defense’s $580 billion budget. But, when the DBB study revealed a “clear path to saving over $125 billion,” a level of waste which spoke to the egregious mismanagement and incompetence of DoD leaders, it was clear something had to be done to bury the story. Now, according to the Washington Post, that is exactly what happened.

The Pentagon has buried an internal study that exposed $125 billion in administrative waste in its business operations amid fears Congress would use the findings as an excuse to slash the defense budget, according to interviews and confidential memos obtained by The Washington Post.

Pentagon leaders had requested the study to help make their enormous back-office bureaucracy more efficient and reinvest any savings in combat power. But after the project documented far more wasteful spending than expected, senior defense officials moved swiftly to kill it by discrediting and suppressing the results.

The report, issued in January 2015, identified “a clear path” for the Defense Department to save $125 billion over five years. The plan would not have required layoffs of civil servants or reductions in military personnel. Instead, it would have streamlined the bureaucracy through attrition and early retirements, curtailed high-priced contractors and made better use of information technology.

The study was produced last year by the Defense Business Board with help from consultants with McKinsey and Company. Their report revealed for the first time that the Pentagon was spending almost a quarter of its $580 billion budget on overhead and core business operations such as accounting, human resources, logistics and property management.

The data further showed that the Defense Department was paying a staggering number of people — 1,014,000 contractors, civilians and uniformed personnel — to fill back-office jobs far from the front lines. That workforce supports 1.3 million troops on active duty, the fewest since 1940.

Pentagon officials had hoped to use the cost-cutting report to identify opportunities to eliminate “waste” that could be converted to direct spending for troops and weapons. But when the report highlighted too much waste, senior officials grew concerned that Congress might attempt to reduce their budget instead. So, they did what any bloated, corrupt government organization would do when faced with the same choice…they made everyone sign confidentiality agreements promising to never speak of the study and removed all copies of the report from public websites.

For the military, the major allure of the study was that it called for reallocating the $125 billion for troops and weapons. Among other options, the savings could have paid a large portion of the bill to rebuild the nation’s aging nuclear arsenal, or the operating expenses for 50 Army brigades.

But some Pentagon leaders said they fretted that by spotlighting so much waste, the study would undermine their repeated public assertions that years of budget austerity had left the armed forces starved of funds. Instead of providing more money, they said, they worried Congress and the White House might decide to cut deeper.

So the plan was killed. The Pentagon imposed secrecy restrictions on the data making up the study, which ensured no one could replicate the findings. A 77-page summary report that had been made public was removed from a Pentagon website.

Now that the cat’s out of the bag, Pentagon officials have no choice but to discredit the study at all costs.

After the board finished its analysis, however, Work changed his position. In an interview with The Post, he did not dispute the board’s findings about the size or scope of the bureaucracy. But he dismissed the $125 billion savings proposal as “unrealistic” and said the business executives had failed to grasp basic obstacles to restructuring the public sector.

“There is this meme that we’re some bloated, giant organization,” he said. “Although there is a little bit of truth in that . . . I think it vastly overstates what’s really going on.”

“We will never be as efficient as a commercial organization,” Work said. “We’re the largest bureaucracy in the world. There’s going to be some inherent inefficiencies in that.”

Frank Kendall III, the Pentagon’s chief weapons-buyer, did the same saying the cost savings estimate was nothing more than “a ballpark, made-up number.”

“Are you trying to tell me we don’t know how to do our job?” he said, according to two participants in the meeting. He said he needed to hire 1,000 more people to work directly under him, not fewer.

“If you don’t believe me, call in an auditor,” replied Klepper, the board’s restructuring expert. “They’ll tell you it’s even worse than this.”

In an interview, Kendall acknowledged he was “very disappointed” by the board’s work, which he criticized as “shallow” and “very low on content.” He said the study had ignored efforts by his agencies to become more efficient, and he accused the board of plucking the $125 billion figure out of thin air.

“It was essentially a ballpark, made-up number,” he said.

Still, Kendall knew that lawmakers might view the study as credible. Alarmed, he said, he went to Work and warned that the findings could “be used as a weapon” against the Pentagon.

“If the impression that’s created is that we’ve got a bunch of money lying around and we’re being lazy and we’re not doing anything to save money, then it’s harder to justify getting budgets that we need,” Kendall said.

Of course, while every effort was made to hide this $125 billion in “made-up” cost savings, we suspect there may be some in the incoming administation that may like to dive a little deeper.

My contract with the American voter will restore honesty, accountability & CHANGE to Washington! #DrainTheSwamp http://pic.twitter.com/sbVwctT1Sj

— Donald J. Trump (@realDonaldTrump) October 25, 2016

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Pentagon May Receive Over $600 Billion Despite Hiding Additional $125 Billion ‘Waste’

Via The Daily Bell

House Pushes Ahead with $611 Billion Defense Policy Bill … The Republican-led House is pushing ahead with a $611 billion defense policy bill that prohibits closing the prison at Guantanamo Bay, Cuba, forbids the Pentagon from trimming the number of military bases and awards U.S. troops their largest pay raise in six years. -Business Insider

The Pentagon is about to reap a generous windfall of revenue of up to $600 billion or more (see above) even though it cannot adequately account for up to $8 trillion and just recently was exposed for hiding some $125 billion of “bureaucratic waste.

A Washington Post investigation reveals this waste, which was internally documented in a study by the Pentagon. That study itself showed the funds that were improperly distributed.

Here, from the Post story:

The Pentagon has buried an internal study that exposed $125 billion in administrative waste in its business operations amid fears Congress would use the findings as an excuse to slash the defense budget, according to interviews and confidential memos obtained by The Washington Post.

Pentagon leaders had requested the study to help make their enormous back-office bureaucracy more efficient and reinvest any savings in combat power. But after the project documented far more wasteful spending than expected, senior defense officials moved swiftly to kill it by discrediting and suppressing the results.

The report, issued in January 2015, identified “a clear path” for the Defense Department to save $125 billion over five years. The plan would not have required layoffs of civil servants or reductions in military personnel. Instead, it would have streamlined the bureaucracy through attrition and early retirements, curtailed high-priced contractors and made better use of information technology.

… Based on reams of personnel and cost data, their report revealed for the first time that the Pentagon was spending almost a quarter of its $580 billion budget on overhead and core business operations such as accounting, human resources, logistics and property management.

Despite this, House lawmakers will vote on Friday to authorize DOD and Pentagon military spending for the fiscal year that started Oct. 1.

The Republican chairman of the Armed Services Committee, Sen. John McCain of Arizona, said it’s the largest military pay increase since 2010. The White House Office of Management and Budget objected to the larger raise, telling lawmakers earlier this year that the lower amount would save $336 million this fiscal year and $2.2 billion through 2021.

The bill also forbids planned troop reductions and adds service members to the Air Force and Marine Corps. And there is this: “Lawmakers also inserted into the defense bill the $5.8 billion in additional war-related funding Obama requested last month.”

Back in August we reported on some $8 trillion that the Pentagon could not and cannot properly account for. You can see the article here.

In another article here, we mentioned Donald Trump’s intention to address military spending, which he called a “disaster.” We suggested that the Pentagon didn’t need more money but needed to figure out first how to administer what it had.

In fact, as the English-located Bureau of Investigative Journalism revealed in October, Pentagon funds again were directed toward questionable programs. The BIJ investigation found that the Pentagon had “paid a British PR firm $500 million for top secret Iraq propaganda.”

The most recent report can be seen here. The videos created fake documentaries of supposed Al Qaeda operations and explosions.

The Pentagon gave a controversial UK PR firm over half a billion dollars to run a top secret propaganda programme in Iraq, the Bureau of Investigative Journalism can reveal. Bell Pottinger’s output included short TV segments made in the style of Arabic news networks and fake insurgent videos which could be used to track the people who watched them, according to a former employee.

The agency’s staff worked alongside high-ranking US military officers in their Baghdad Camp Victory headquarters as the insurgency raged outside … Bell Pottinger reported to the Pentagon, the CIA and the National Security Council on its work in Iraq, he said.

… In the first media interview any Bell Pottinger employee has given about the work for the US military in Iraq, video editor Martin Wells – who no longer works for the company – told the Bureau his time in Camp Victory was “shocking, eye-opening, life-changing.”

The firm’s output was signed off by former General David Petraeus – then commander of the coalition forces in Iraq – and on occasion by the White House, Wells said.

The BIJ is a not-for-profit organization founded by David and Elaine Potter in 2010 with $2 million and dedicated to educating “the public about the realities of power in today’s world.”

From the website:

Since its foundation the Bureau has worked with BBC File On Four, BBC Panorama, BBC Newsnight, Channel 4 Dispatches, Channel 4 News, al Jazeera English, the Independent, the Financial Times, the Daily Telegraph, the Sunday Times, Le Monde, Mediapart, the Guardian, the Observer and the Daily Mirror.

The trouble with making up such reports with professional media values is that they travel far beyond the confines they were supposedly intended for. There’s nothing that stops them from traveling throughout the West and even to the US, and some apparently did. Anyone can then make use of them or report on them as if they are real.

This probably only touches on larger US military fakery. Here at the TDB we’ve been investigating questions about the Pentagon’s 70-year-old nuclear program and have concluded that much of what the Pentagon has stated publicly about the program is at least questionable – certainly in its beginnings. You can see articles here, here and here.

Conclusion: The Pentagon doesn’t need a bigger budget. It needs to be more accountable – and Congress certainly does too. Using Hollywood technology to create fake nuclear explosions or making videos about enemies that don’t exist amount to forms of domestic propaganda. And hiding billions and even trillions so spending is never properly attributed has little to do with how a functioning democracy is supposed to operate (let alone a republic).

Editor’s Note: The Daily Bell is giving away a silver coin and a silver “white paper” to subscribers. If you enjoy DB’s articles and want to stay up-to-date for free, please subscribe here.

Additional Thoughts on “Fake News,” The Washington Post, and the Absence of Real Journalism

screen-shot-2016-12-06-at-10-28-53-am

The European Commission looked into whether the tech giants were meeting a pledge to remove hate speech within 24 hours of it being reported.

Only 40% of reports of hate speech are being removed within a day, it found.

The pledge was made in May when the firms signed up to a “code of conduct” brokered by the Commission.

“The last weeks and months have shown that social media companies need to live up to their important role and take up their share of responsibility when it comes to phenomena like online radicalisation, illegal hate speech or fake news,” said Justice Commissioner Vera Jourova in a statement.

– From today’s BBC article: EU Criticizes Tech Firms for Slow Action on Hate Speech

On November 25, 2016, for the first time in my life, I became a part of the news as opposed to reporting on it. Of course, what I am referring to is the slanderous and amateurishly researched article published in The Washington Post claiming Russia used “fake news” websites to spew government propaganda during the U.S. Presidential election. The article was appropriately savaged by several of America’s leading political thinkers and writers, including Glenn Greenwald of The Intercept and Matt Taibbi of Rolling Stone.

To his credit, Glenn has been particularly relentless in his criticism, focusing on the mind-boggling fact that the paper refuses to publicly address any of the myriad concerns raised regarding this defamatory hit-piece. Here are just a few examples:

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The VIX FOMC Setup (Video)

By EconMatters

We discuss a VIX Trading Setup into the FOMC Meeting next week, with the option to rollover into the January contract as we expect a significant spike in the VIX over the next 6-8 weeks. Buy the VIX into the FOMC Rate Hike Meeting next week at these low levels!

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Time Urges 65 Million Americans Who Voted For Hillary Not To Pay Taxes

Under the twisted premise of losing the popular vote and "no taxation without representation", TIME's Mark Weston proclaims that the approximately 65 million Democrats who voted for Hillary Clinton should pledge "we won’t pay taxes to the federal government… until democracy is restored."

Because, It's just not fair?

Twice in the past 16 years, a Republican candidate who finished second in the popular vote has won the presidency. This year, Donald Trump won the electoral vote with about 46% of the popular vote, while Hillary Clinton received about 48%. If the parties stay this evenly divided, another electoral mishap is more likely than not in the next 20 years.

Most Republicans are quite content with this system. Appeals to fairness have not persuaded them of the need to amend the Constitution to establish direct presidential elections, preferably with a runoff if no one wins 50% of the vote. Nor does the real chance that a Democrat could win the presidency with fewer votes than a Republican alarm them. Even the taunt, “Are you afraid of a direct election? Can’t you win a straight-up vote?” doesn’t faze them. Democrats must, therefore, pester Republicans where it hurts: the pocketbook.

Is signing a pledge to not pay taxes legal? Yes, if no overt act of conspiracy is involved, and the pledge itself is hypothetical. No one knows when or if it would be carried out.

A national movement not to pay federal taxes in the future would put Republicans on notice: they do not have the right to impose a hard-right, second-place presidency on a moderate nation every dozen or so years. If the Republicans won’t help amend the Constitution so that America can resume being a democracy, then Democrats, lacking the representation that supporters of a future popular vote-winner ought to have in the executive branch, should not submit to paying taxes to the federal government.

How would the pledge work?

First, an online group such as MoveOn.org, Change.org or both, should circulate a petition. The pledge is not just a powerful protest; it is also effortless, requiring no legal or financial sacrifice at all for years, possibly decades.

Second, the pledge should only apply to federal taxes. We would still pay state, local, sales and property taxes. This is a protest against our 229-year-old system of electoral votes, not against taxation in general.

Third, if a Republican wins the election without winning the popular vote again, we should still pay what we owe in federal taxes—just not to the IRS. Instead, people would compute their federal taxes, file a Form 1040 and write a check to a national escrow account, preferably in a well-established Canadian or British bank that is beyond the reach of the U.S. Justice Department, because whoever opens this account probably will be in violation of U.S. law. In the check’s memo line, people should write, “Funds to be transferred to the IRS as soon as America resumes being a democracy.”

If the U.S. government wanted control over the trillions of dollars in this escrow account, it would have to replace our antiquated electoral system with a fairer way of electing presidents. Then, when 38 state legislatures have ratified an acceptable Constitutional amendment, the escrow officer could cheerfully transfer the account’s trillions of dollars to the IRS.

The beauty of a no-taxation pledge is that it almost certainly won’t have to be carried out. The mere threat could be enough to propel a Constitutional amendment. If millions sign now, Republicans will know that a third modern Republican runner-up presidency is impossible; Democrats will not be cooperative again.

The cry, “No Taxation Without Representation,” inspired America to declare its independence in 1776. It can also lead to a rebirth of democracy in our own time.

Sadly, it appears, Mr. Weston missed out on what form America's constitutional democracy means. As we noted previously, despite what the disaffected left now says about the "outdated" electoral college system, there was and still is solid reasoning behind it's existence. The power of the individual states weighed very heavily on the founding fathers who created the electoral college system specifically to avoid the mass centralization of power in high population density areas. And, while we certainly understand why the left would look to now discredit such a system, the fact is that there would be no United States of America without it as smaller states simply never would have opted in to the union.

Pop Map

Per the map above, absent the electoral college system, presidential elections would be almost entirely determined by a handful of cities including New York City, Boston, Chicago, Los Angeles and San Francisco. And while the left would prefer to ignore the opinions of those in the "fly-over" states, we would suggest that their representation in the electoral college is a vital underpinning of American democracy…without such representation we're not sure why the fly-over states would choose to remain a part of a union where they had no say.

* * *

Finally, we look forward to President-Elect Trump's tweet response to this seemingly treasonous sore-losership.

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Pentagon Buried Report Finding $125 Billion in Bureaucratic Waste

What's $125 billion in public money? The Department of Defense (DoD) learned the hard way to not ask for the truth if you don’t want to hear it.

Senior Pentagon officials commissioned a study from the Defense Business Board, titled “Transforming DoD’s Core Business Processes for Revolutionary Change,” which delivered its assessment of the department’s spending in January 2015. The very first words summarizing the report are “We are spending a lot more than we thought.”

But the report never saw the light of day, because its staggering finding of $125 billion in bureaucratic waste contradicted the Pentagon’s repeated complaints that the U.S. military was being deprived of necessary financing, according to the Washington Post.

The report found that the DoD was employing almost the same amount of people as active duty troops (1.3 million) as those working desk jobs (over one million), which include both civilians and uniformed military personnel.

The report stressed “every billion saved in 2016 is worth five billion” for the following five fiscal years because of “the compounding effect,” and recommended cutting back on the use of expensive and redundant contractors and career employees by offering up enticements for early retirements. But the report wasn’t exclusively about cutting spending, it also recommended “retention bonuses” for truly vital employees as a means of “retaining institutional knowledge” and also increasing spending to streamline and modernize the department’s technology.

Deputy Defense Secretary Robert O. Work ordered the study, but displeased with the recommendations which he called “unrealistic,” sought to discredit and conceal it from both the public and other government agencies after the fact.

According to the Post, Work believes “the board fundamentally misunderstood how difficult it is to eliminate federal civil service jobs — members of Congress, he added, love having them in their districts — or to renegotiate defense contracts.” As a result, the Pentagon ordered the data itself to be made secret so that no other agency could come to the same conclusions as the Defense Business Board had.

Some of the report’s highlights of Defense Department waste include:

The average administrative position received over $200,000 in compensation, including benefits.
Over 192,000 positions in “real property management” cost taxpayers a total of $22.6 billion.
Approximately 84,000 people worked in “human resources” positions.
Over half a million military contractors were earning compensation averaging between $170,000 and $189,000.

When it’s all said and done, about one-fourth of the Pentagon’s $580 billion budget was spent on “overhead…accounting, human resources, logistics, and property management,” according to the Post.

President-elect Donald Trump has promised a marked increase in military spending to substantially add troops and combat equipment, but he also promised to cut wasteful military spending. To do that, he’d need his chosen Pentagon leadership to be willing to do what their predecessors didn’t, which is to accept real data and act accordingly, even if it makes it harder to beg for an increase in taxpayer spending.

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Outrage over Children’s Book Parody Will Simply Feed Culture War Further

Book cover When I was in high school back in the 1980s the original “political correctness” and the “political incorrectness” backlash appeared to arrive nearly simultaneously. We had language policing (in a way that seems tame compared to what’s going on now), and in defiance, the likes of Andrew Dice Clay.

Bookstores openly carried collections of “politically incorrect” joke books about various ethnicities and cultural subgroups that were both terribly popular and based on offensive stereotypes. I remember reading one joke from a book a student had brought with him to class about Mexicans, only to be told by a fellow student (who was Mexican) that it was terribly racist. That was the end of my adventures with those books, but they persisted for a while as an open show of opposition to the leftist academic push for more cultural sensitivity.

It’s worth reminding that what’s going on culturally right now with politically correct language police is hardly new, nor is a defensive embrace of the deliberately offensive. Today there’s an outrage story about an offensive (to some) book, but it has some new millennium twists.

I have no idea how many people would have heard of Bad Little Children’s Books before it became the focus of the latest outrage. The “book” is a series of parodies of children’s book covers. They’re deliberately designed to be offensive. According to the publisher, Abrams, and the book’s author, under the pen name of the fictitious Arthur C. Gackley, the offensive covers were designed to mock “biases, stereotypes, and intolerance through the prism of questionable taste and dark humor.”

We can guess what happened when social media got their hands on it. Individual book covers were shared separately from the totality of the book, and whatever “goal” the author might have intended with the parodies was lost.

But without defending the outrage-o-holics, it is really, really, really, really easy to misconstrue this “satire” as Clay-style “politically incorrect” jokes. Here’s the parody cover that probably drew the most outrage:

book cover

It would not be so terribly unreasonable to look at that parody cover and assume that its creator was actually intending for the joke to pander in anti-Muslim stereotypes, not to mock them.

Abrams initially defended the book, but the author has decided to ask them to stop publishing the book. Abrams agreed.

In another time, this book would have simply wallowed and died in the highly oversaturated novelty market, all those little highly disposable “humor” books sold on the cheap. Frankly, it’s surprising that this Bad Little Children’s Book is a book at all and not just a Tumblr account.

But now is the time for being loudly, publicly angry at things that are stupid and so we have a “It’s Not Funny. It’s Racist,” from Kelly Jensen at BookRiot. That headline itself sounds like the punchline of a knock-knock joke designed to mock the politically correct crowd. Despite saying at the top that she finds “dark humor to be something wildly enjoyable,” her snarky responses to each cover illuminating her distaste (“Parental alcohol abuse is, indeed, a barrel of laughs. Especially for children impacted by it.”) suggests that, no, she doesn’t find dark humor enjoyable at all.

Mind you, I don’t find any of the covers funny either and agree with Jensen that this crap brings nothing new to the table, but I am not going to even feign clutching my pearls at the idea of finding humor in alcoholic mommies (and my mother was an actual addict). Once we veer into the ethnically insensitive stuff is when the outrage boils over:

It’d be easy for certain sectors of our culture to say that we’re too concerned about being PC; that humor like this is meant to be a satire on how wound up we all are about being correct and kind toward people. The reality is we’ve never been that culture and we’ll never be that culture — certainly, we’ll never be that culture with a xenophobic, racist, misogynist talking Cheeto in the White House who wants to begin a Muslim registry and who has incited violence, hatred, and bigotry to spread unabashedly throughout the USA.

What looks like “humor” here is the reality of how a big swath of our society views humans who are not white and/or are Muslim and/or are in any other way “Other” from the white, privileged, cis-het, penis-bearing norm.

This “humor” adds to the misinformation, adds to the hatred, and ultimately, makes living in this society more frustrating, difficult, and dangerous for so many. And this “humor” is the kind of garbage that needs to be eliminated at all levels, particularly in publishing.

So by talking about the book in these terms, Jensen is ironically enough, putting out a battle-cry to draw the attention to Donald Trump’s supporters and voters to defend the book, even though the book’s own creator says the point of it was to mock those people.

There is a great discussion possible here about how hard it is to use visual language for satire or parody purposes in a heavily fragmented, digitized society where imagery gets taken apart distributed piecemeal, misrepresented (sometimes deliberately), and appropriated in different ways.

But we can’t have a discussion like that when everybody is stuck in culture war signaling. Her demand that publishing bow to her views of what sort of humor should be in the world is particularly absurd. Right now just typing “politically incorrect jokes” at Amazon lands me eight pages of matches. And that’s traditional publishing. With social media and self-publishing, everybody’s a parodist.

Cultural outrage often encourages defensiveness, not analysis. Certainly the way Jensen has decided to describe American culture is absolutely not for the purposes of creating discussion or debate. The ultimate irony here is that she is helping create the audience for a type of work that she loathes. And ultimately she’s likely to see more of it from people who are doing it just to spite her and people like her.

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The Dramatic Impact Of Surging Rates On Housing And Refis In One Chart

To visualize the impact the recent spike in mortgage rates will have on the US housing market in general, and home refinancing activity in particular, look no further than this chart from the October Mortgage Monitor slidepack by Black Knight.

The chart profiles the sudden collapse of the refi market using October and November rates. As Black Knight writes, it looks at the – quite dramatic – effect the mortgage rate rise has had on the population of borrowers who could both likely qualify for and have interest rate incentive to refinance. It finds it was cut in half in just one month.

Some more details from the source:

The results of the U.S. presidential election triggered a treasury bond selloff, resulting in a corresponding rise in both 10-year treasury and 30-year mortgage interest rates
Mortgage rates have jumped 49 BPS in the 3 weeks following the election, cutting the population of refinanceable borrowers from 8.3 million immediately prior to the election to a total of just 4 million, matching a 24-month low set back in July 2015
Though there are still 2M borrowers who could save $200+/month by refinancing and a cumulative $1B/month in potential savings, this is less than half of the $2.1B/ month available just four weeks ago
The last time the refinanceable population was this small, refi volumes were 37 percent below Q3 2016 levels

Which is bad news not only for homeowners, but also for the banks, whose refi pipeline – a steady source of income and easy profit – is about to vaporize.

It’s not just refinancings, however, According to the report, as housing expert Mark Hanson notes, here is a summary of the adverse impact the spike in yields will also have on home purchases:

Overall purchase origination growth is slowing, from 23% in Q3’15 to 7% in Q3’16.
The highest degree of slowing – and currently the slowest growing segment of the market – is among high credit borrowers (740+ credit scores).
The 740+ segment has been mainly responsible for the overall recovery in purchase volumes and in fact, currently accounts for 2/3 of all purchase lending in the market today.
Since Q3’15 the growth rate in this segment has dropped from 27% annually to 5% in Q3’16. (NOTE, Q3/Q4’15 included TRID & interest rate volatility making it an easy comp).
This naturally raises the question of whether we are nearing full saturation of this market segment.
Low credit score growth is still relatively slow, and only accounts of 15% of all lending (as compared to 40% from 2000-2006), the lowest share of purchase originations for this group on record.
ITEM 2) The “Refi Capital Conveyor Belt” has ground to a halt, which will be felt across consumer spend. AND Rates are much higher now than in October when this sampling was done.

Source

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Ohio Legislature Set to Pass Civil Asset Forfeiture Reform This Week

The Ohio legislature could pass a bill this week overhauling the state’s civil asset forfeiture laws that allow police to seize property without convicting the owner of a crime.

As early as Tuesday, the Ohio senate is expected to vote to join a number of other states, most recently California, that have tightened asset forfeiture laws in response to bipartisan criticism from civil liberties groups that the practice lacks due process protections for property owners and creates perverse profit incentives for police.

The Ohio bill would require a criminal conviction for forfeitures under $25,000, a provision that the bill’s supporters say will keep innocent citizens and business owners from having their money seized, while still allowing police to go after large-scale drug traffickers. It would also limit coordination with federal drug task forces—a tactic that civil liberties groups say local police use to skirt stringent state rules—to cases that involve more than $100,000.

Criminal justice and civil liberties groups from both sides of the political aisle have been pressing the bill for the better part of 18 months. Earlier this year, the conservative advocacy group FreedomWorks said it drove 52,000 calls and messages from its members to the Ohio senate in favor of the bill.

The bill passed the Republican-controlled state house by a wide margin in May, but revisions to assuage concerns from law enforcement have delayed a senate vote. The new version of the bill would preserve police’s ability to keep unclaimed property, as well as property from deceased owners. This week could be the last week of the legislative session in Ohio, meaning if it is not voted on or fails, the bill would have to be reintroduced next year, starting the whole process over.

On a conference call with reporters in October, Democratic Ohio state senator Cecil Thomas said “as a former law enforcement officer, I understand the the spirit of the law was to focus on illicit drug activities,” but he agrees that due process protections are needed.

“Often times, I would hear from officers on the police force,” Thomas said. “They’d stop an individual with $150 in his pockets. If he couldn’t articulate clearly where he got the money, they’d assume it was drugs, so they’d bring in a drug dog. The dog alerts on money, the money is seized, and then it’s up to individual to prove where he got the dollars. I never thought that was the proper way to deal with the situation. This particular legislation will still try to address these problems and ensure every citizen is treated fairly.”

However, law enforcement groups have continued to oppose the legislation, even after the senate amended it. Ohio Prosecuting Attorneys Association executive director John Murphy told the Columbus Dispatch on Monday:

Ohio has a top-notch civil-forfeiture law, Murphy said, and the increases in reports of forfeiture abuses have come from other states or under federal law. He called the bill misguided.

Ohio’s law “is chock-full of due-process protections,” he said. “There is no evidence of substantial abuse of the forfeiture statute in Ohio.”

Police chiefs expressed concern about a handful of provisions, including new limits on how forfeited proceeds can be used.

The Institute for Justice, a libertarian-leaning public interest law firm that has filed lawsuits in several states challenging asset forfeiture laws, gives Ohio’s asset forfeiture laws a “D-” grade for its lax due process protections, lack of reporting requirements, and the high percentage of revenue from seizures—90 to 100 percent—that goes straight back into police and prosecutor budgets.

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