Trump Offers Ben Carson HUD Secretary Job

As was speculated yesterday in various media outlets, moments ago Bloomberg confirmed that Ben Carson, the man who ran for president then said he wouldn’t feel comfortable having a role in the Trump administration because he has no government experience, has been formally offered the position of secretary of the Department of Housing and Urban Development.

As AP adds, a person close to Carson, who was not authorized to discuss the offer publicly, told The Associated Press Carson would spend his Thanksgiving mulling over whether to accept the position. Earlier in the day, Donald Trump tweeted that he was “seriously considering” Carson as the head of HUD because he’s a “greatly talented person who loves people!” Carson was also being floated as potential secretary of education or health and human services, AP reports.

Carson’s business manager, Armstrong Williams, previously said the “last thing” Carson would want to do was “take a position that could cripple the presidency,” but he would be open to considering a role if Trump made it clear there was no one else for the job — this must mean the only option is having a retired neurosurgeon lead the government agency that strengthens the housing market to bolster the economy and protect consumers and utilizes housing as a platform for improving quality of life.

via http://ift.tt/2glxuqt Tyler Durden

Paid To Wait? Eli Lilly Crashes To 2 Year Lows, Erases 6 Years Of Dividends After Failed Drug Test

Following news that its Alzheimer’s drug has failed final stage trials, Eli Lilly stock is crashing this morning to 2 year lows. The ‘safe haven’, ‘paid-to-wait’ stock has tumbled almost 15% – erasing over 6 years of dividends, and sparking contagious selling across Biotech stocks.

As The FT reports, many analysts and investors had been expecting the medicine, Solanezumab, to show efficacy in patients suffering from mild dementia due to the disease, after previous trials showed it slowed the disease by roughly a third in early-stage patients, reports David Crow in New York.

However, the company said that while many of the results “directionally favoured the drug, the magnitudes of differences were small” and, as such, it has no plans to seek regulatory approval.

 

“The results of the Solanezumab trial were not what we had hoped for and we are disappointed for the millions of people waiting for a potential disease-modifying treatment for Alzheimer’s disease,” said John Lechleiter, chief executive officer, Lilly.

 

He added: “We will evaluate the impact of these results on the development plans for Solanezumab and our other Alzheimer’s pipeline assets.”

And thus the disappointment.

 

So much for that 2.68% dividend yield.

And other Biotech stocks are taking it on the chin, such as Biogen, which is also running trials on its own Alzheimer drug…

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Hundreds Of Veterans Heading To Standing Rock To Defend DAPL Protesters From Police

Submitted by Carey Wedler via TheAntiMedia.org,

As protesters continue to stand against the proposed Dakota Access Pipeline in North Dakota, facing off against heavily militarized police and their water cannons, rubber bullets, tear gas, and tasers, they have gained broad support. Celebrities and millions of social media users have raised awareness about the situation in North Dakota, and now, the “water protectors” have earned support from another group: veterans.

According to an article published by Business Insider that first appeared in Task and Purpose, a military-oriented news and culture site, two veterans are leading the charge in a show of dissent against the increasingly aggressive police. In the last several months, tensions have escalated as Natives and their allies have blocked the pipeline’s construction, citing fears surrounding water will be endangered and sacred burial sites will be destroyed (not to mention the fact their lands were forcibly stolen by the U.S. government over a century ago).

“This country is repressing our people,says Michael A. Wood Jr., a Marine Corps veteran who recently retired from the Baltimore police force to work toward reforming law enforcement. If we’re going to be heroes, if we’re really going to be those veterans that this country praises, well, then we need to do the things that we actually said we’re going to do when we took the oath to defend the Constitution from enemies foreign and domestic,” he asserted about his plans to go to Standing Rock.

Woods Jr. is joined by Wes Clark Jr. Clark Jr. is the son of General Wesley Clark, the famous military leader who once warned that shortly after 9/11, the government had its eyes on Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran. Clark would later attempt to distance himself from those statements but still managed to convince his son, a member of the Army at the time, to stay away from Iraq.

I was like, ‘I’m going back in. I’m going to go in there and fuck people up,’” Clark Jr. recalls of his desire to fight for the military after 9/11. He later changed his mind after his father warned him, as Task and Purpose summarized, “that as a soldier he would be fighting a war that had nothing to do with defeating al Qaeda.

Now, Wood Jr. and Clark Jr. are attempting to organize a mass, nonviolent protest against police action in North Dakota. Just this past weekend, a female protester was hit with a concussion grenade, causing severe damage to her arm and requiring surgery.

Other have been tear gassed, tased, beaten, and shot with rubber bullets. Anti-Media journalist Derrick Broze was tased by law enforcement immediately after he declared he was a member of the media. Another journalist was shot with a rubber bullet while standing away from a gathering of protesters as she interviewed an attendee.

Police have made over 470 arrests since August, and the Indigenous Environmental Network claims 167 people were injured just this past Sunday when police deployed water cannons in freezing weather.

Clark, a contributor to the Young Turks, explained that aside from the flagrant violations protesters are subject to in North Dakota, Natives are especially deserving of veteran support:

First Americans have served in the Unites States Military, defending the soil of our homelands, at a greater percentage than any other group of Americans. There is no other people more deserving of veteran support,” he said.

According to a Facebook event the two men created called “Veterans Stand for Standing Rock,” those who join the effort will arrive at the protest site on December 4, where they will stay until December 7.

The event description reads:

Come to Standing Rock Indian Reservation and hold the line with Wes Clark jr, Michael Wood Jr, Tulsi Gabbard and hundreds of other veterans in support of the Sioux nation against the DAPL pipeline. Bring Body armor, gas masks, earplugs AND shooting mufflers (we may be facing a sound cannon) but no drugs, alcohol or weapons.

Clark Jr. was clear he was not looking for violence and that the protest would be unarmed.

We’re not going out there to get in a fight with anyone,” he said. “They can feel free to beat us up, but we’re 100% nonviolence.”

As Task and Purpose explained:

With an eye toward the media, old military uniforms will be donned so that if the veterans are brutalized by the police, they are brutalized not as ordinary citizens, but as people who once served the government they are protesting against.

The event page makes it clear that the group will not tolerate “hate, violence or divisive behavior of any kind.”

We’re doing this to support our country,” they advise, “so let’s do it with honor, working together. We can stop this savage injustice being committed right here at home. If not us, who? If not now, when?

Over 250 veterans have already committed, but organizers hope to have a group of 500 or more by the time they head to Standing Rock.

Once there, the  veterans intend to engage in a traditional native healing ceremony with protesters, with whom they have been coordinating, according to the veterans. Then, protective gear like gas masks and body armor will be issued to anyone who needs it. The soldiers will march to bagpipes and Sioux war songs as they head to the banks of the Missouri River to meet police.

Then, the veterans and their allies — or at least the ones who are brave enough — will lock arms and cross the river in a ‘massive line’ for their ‘first encounter’ with the ‘opposing forces.’”

Though the veterans have adopted a strict policy of nonviolence, they refuse to back down and apparently hope to use their military status to spotlight the egregious behavior of the police.

We’ll have those people who will recognize that they’re not willing to take a bullet, and those who recognize that they are,” says Wood Jr. “It’s okay if some of them step back, but Wes and I have no intention of doing so.”

Veterans Stand for Standing Rock is accepting donations to cover food, transportation, and supplies for those who travel to North Dakota. You can donate here. You can also donate directly to the water protectors.

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Trump Names Former Political Opponent As UN Ambassador, Replacing Anti-Putin Samantha Power

In the first woman appointment to Trump’s administration, South Carolina Govenor Nikki Haley has accepted the president-elect’s offer to be his ambassador to the United Nations, NBC News reported this morning. The daughter of immigrants from India, Haley served three terms in South Carolina’s State House before winning the governorship in 2010 and again in 2014. A two-term governor, Haley, 44, initially backed Trump rivals Sen. Marco Rubio and then Sen. Ted Cruz during the GOP battle for a White House nominee.

She is the first woman in the state’s history to hold the role and only the nation’s second Asian-American governor.

If confirmed, Haley would succeed Samantha Power, who served as President Barack Obama’s U.N. ambassador since 2013, and who has been the most vocal opponent of the Russian regime’s overtures in the United Nations.

Haley has little direct foreign policy experience. She has spent time overseas negotiating trade deals for South Carolina businesses, but she has never served in a roll directly related to American foreign policy, or any other role in the federal government. As such, she is likely to draw scrutiny during Senate confirmation hearings for the Cabinet-level position. Haley would be the first ambassador since Madeleine Albright never to have served in any other role in the federal government before heading to Turtle Bay.

In what has been dubbed a “remarkable” shift in the president-elect’s mindset, Trump’s selection of Haley caps a dramatic year for their political relationship. They started 2016 with a fight and are ending it as allies in a nascent Trump administration, suggesting that far from bearing grudges Trump is willing to reconcile in the name of national interests.

The pair feuded in January after Haley’s Republican response to President Barack Obama’s State of the Union, during which she took a thinly-veiled swipe at Trump, warning against “the siren call of the angriest voices.”  Haley told Matt Lauer the following morning that then-candidate Trump “has definitely contributed to what I think is just irresponsible talk.”

“If we have citizens who are law-abiding, who love our traditions, who do everything to be productive citizens in America, they should feel welcome in this country,” Haley said. “The reason this country is so great is because the fabric of this country was made by immigrants, and its legal immigrants.”

In February, she called Trump “everything a governor doesn’t want in a president.” The following month Haley endorsed Rubio in the South Carolina primary. Following Rubio’s loss and subsequent withdrawal from the race, Haley said it was her “hope and prayer” tha Cruz would win the Republican nomination.

By the Republican National Convention in July, though, Haley had warmed enough to Trump to say she planned to vote for him in a tepid endorsement to MSNBC’s Jacob Soboroff.

“I would not be here if I didn’t want to make sure that Hillary [Clinton] was not going to be the next president,” Haley said in July.

Haley is married to a captain in the Army National Guard who served in Afghanistan, and has two teenage children, according to her biography on the state’s website.

As The Hill adds, back in South Carolina, Haley’s selection will have a significant impact on the race to replace her in 2018. If Haley becomes the next ambassador to the United Nations, she would be succeeded by Lt. Gov. Henry McMaster (R), who has had his own conversations with the incoming Trump administration. cMaster, the first major South Carolina politician to back Trump during the primaries, had considered running to replace Haley when term limits barred her from a third term in 2018. If Haley were to leave the state before her term expires, McMaster would likely get a leg up on a potentially crowded primary in 2018.

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Russia’s Gold Buying In October Largest In Millenium – Putin’s ‘Gift’ To Obama

Russia gold buying accelerated in October with the Russian central bank buying a very large 48 metric tonnes or 1.3 million ounces of gold bullion.

russia_gold_buying

This is the largest addition of gold to the Russian monetary reserves since 1998 and could be seen as a parting ‘gift’ by Prime Minister Putin to his rival ex-President Obama.

The Russian central bank gold purchase is the biggest monthly gold purchase of this millennium.

Concerns about systemic risk, currency wars and the devaluation of the dollar, euro and other major currencies has led to ongoing diversification into gold bullion purchases by large creditor nation central banks such as Russia and China.

Commerzbank went with the simple explanation:

“Clearly the central bank was taking advantage of the stronger ruble – which has made gold cheaper in local currency – to buy more gold.” 

“By contrast, the Chinese central bank bought only around four tons of gold last month – the second-lowest gold purchases since China began publishing monthly figures back in June 2015. The currency is likely to have played a role here, too – the yuan has been depreciating noticeably since the end of September.”

However, the Russian Central Bank has quietly been buying huge volumes of gold over the last 10 years. This diversification into gold accelerated since the financial crisis and since relations with the U.S. deteriorated in recent years. Russia bought gold systematically both when the ruble was strong and when it was weak.

In 2015, Russia added a record 208 tons of gold to her reserves compared with 172 tons for 2014.

According to the World Gold Council, only the central banks of the U.S., Germany, Italy, France and China currently hold larger gold reserves than Russia.

The Central Bank of Russia has outpaced the People’s Bank of China (PBOC) by nearly 150 tonnes in the last seven years, and has been the world’s largest central bank buyer of gold reserves for some time. This trend is expected to continue.

Total gold mining production globally is  around 3,200 metric tonnes per year.

Thus, Russia’s purchase of 48 metric tonnes is around 1.5% of total annual global gold production. This is a very large amount for one country to buy in just one month.

Some of the gold bought will have come from Russian gold production which is currently at about 26 metric tonnes per month. In 2014, Russia was the third largest gold miner in the world at 266.2 tonnes, just six tonnes short of Australia in second place and China in first place.

The Russian central bank is buying all of Russian gold production and sometimes buying gold on the international market.

This demand is solely from the Russian central bank. There is little data regarding investor, high net worth (HNW) and ultra high net worth (UHNW) individuals including family offices who are diversifying into gold in Russia.

Russia is an increasingly wealthy nation with thousands of millionaires and hundreds of billionaires including mega rich oligarchs. It seems likely that some of these Russian investors are also diversifying into gold.

Clearly, Russia puts great strategic importance on its gold reserves. Both Prime Minister Medvedev and President Putin  have been photographed on numerous occasions holding gold bars and coins. The Russian central bank declared in May 2015 that Russia views gold bullion as “100% guarantee from legal and political risks.”

Prudent investors are following Russia’s lead by diversifying and having an allocation to physical gold coins and bars.

Must-Read Guide: Gold and Silver Storage Must Haves

 

Gold and Silver Bullion – News and Commentary

Gold slips as equities, dollar rise (Reuters.com)

Platinum market deficit set to shrink in 2017 – WPIC (Reuters.com)

French man discovers gold bars worth €3.5m after inheriting home (Telegraph.co.uk)

SA to exhaust gold reserves in 38 years (Fin24.com)

Christmas tree made out of SOLID GOLD worth £1.45million is unveiled in Tokyo (Mirror.co.uk)

Why Gold Fell After Trump Election – Rickards (DailyReckoning.com)

Junk-Bond Market Heads Toward Deep Freeze (Bloomberg.com)

The Spreading Bondfire and the Rising Price of Gold (GoldSeek.com)

UK borrowing shrinks in October ahead of Autumn Statement as Dow Jones closes over 19,000 for first time (Telegraph.co.uk)

London property: expect further price falls (MoneyWeek.com)

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Gold Prices (LBMA AM)

23 Nov: USD 1,213.25, GBP 998.00 & EUR 1,143.00 per ounce
22 Nov: USD 1,217.55, GBP 997.89 & EUR 1,144.98 per ounce
21 Nov: USD 1,214.95, GBP 984.72 & EUR 1,143.39 per ounce
18 Nov: USD 1,206.10, GBP 971.15 & EUR 1,135.54 per ounce
17 Nov: USD 1,232.00, GBP 988.19 & EUR 1,148.10 per ounce
16 Nov: USD 1,225.70, GBP 984.36 & EUR 1,144.68 per ounce
15 Nov: USD 1,228.90, GBP 988.65 & EUR 1,138.70 per ounce
14 Nov: USD 1,222.60, GBP 978.08 & EUR 1,136.53 per ounce

Silver Prices (LBMA)

23 Nov: USD 16.56, GBP 13.36 & EUR 15.59 per ounce
22 Nov: USD 16.76, GBP 13.46 & EUR 15.77 per ounce
21 Nov: USD 16.68, GBP 13.47 & EUR 15.69 per ounce
18 Nov: USD 16.51, GBP 13.30 & EUR 15.54 per ounce
17 Nov: USD 17.04, GBP 13.65 & EUR 15.87 per ounce
16 Nov: USD 16.95, GBP 13.64 & EUR 15.85 per ounce
15 Nov: USD 17.00, GBP 13.68 & EUR 15.80 per ounce
14 Nov: USD 17.20, GBP 13.73 & EUR 15.95 per ounce


Recent Market Updates

– Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards
– Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”
– Gold Sell Off On Fed Noise – “Interesting Times” To “Support Gold”
– Islamic Gold – Vital New Dynamic In Physical Gold Market
– Peak Gold Globally – “Bullish For Gold”
– Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
– President Trump – Why Market Loves Him and Experts Wrong
– ‘Helicopter Money President’ Trump To Create Inflation and Gold Will Rise
– Central Bank Gold Demand continues in Q3
– Trump Victory Sends Gold Surging 5%
– An uncertain election outcome looks good for gold
– Ignore past elections, this one’s too uncertain
– Gold may be the only winner in US elections

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Alabama Bans Publishing of Prostitution Mugshots, Allows Cops to Hold Suspected Sex Workers for 72 Hours

Under a little-heralded new Alabama rule, it’s illegal to publish the mugshots of people arrested for prostitution. Alabama law now stipulates that these mugshots are “not a public record and may not be published in any printed or electronic media or provided to any person” without special permission from a district judge. “We’re trying to look at these women less as criminals and more as victims, and we don’t want to see them be revictimized,” said Rep. Jack Williams (R-Birmingham), who sponsored the legislation.

I’ve railed many times against the journalistic practice of publishing the mugshots of people arrested for prostitution or solicitation of prostitution. Considering the stigma surrounding prostitution, I think any “public interest” served in seeing the faces of those merely arrested for this misdemeanor offense is generally outweighed by the long-term damage it could do—especially in the Internet era—to the the lives and reputations of these individuals. But the decision whether to publish prostitution mugshots, or any mugshots, should be matter of journalistic ethics, not government mandate.

If Alabama lawmakers really believe that all people selling sex are victims, perhaps they should repeal laws that make selling sex a crime. But as long as prostitution is a crime in Alabama, there’s no justifying a categorical ban on publishing prostitution-arrest mugshots. As Alabama Press Association lawyer Dennis Bailey said, “It’s a very blatant form of prior restraint,” which is unconstitutional.

What’s especially strange here is that law passed the state legislature in May and took effect August 1, but newspaper editors say they are just hearing about the measure now. This seems like a pretty big oversight on both the part of state officials and Alabama journalists, who covered the legislation that the mugshot-ban was part of but apparently failed to notice that particular part. Meanwhile, officials failed to specify what, if any, punishment could come from violating the ban.

The main focus of the legislation, known as the Alabama Human Trafficking Safe-Harbor Act, was allowing law-enforcement to decline criminal charges for minors engaged in prostitution, and instead refer them to social services or state custody. Alabama police arrested three minors for prostitution in 2015, according to the Anniston Star, which reviewed statewide arrest data. “It’s unclear whether any of the children were actually charged with the crime,” the paper reported, “or whether police knew they were underage at the time of the arrest.”

Not charging juveniles for selling sex, whether on their own or under force or coercion, is certainly a positive step. But the legislation contains a lot of language that suggests, arrest or no arrest, these young people aren’t simply being seen as victims. For instance: “Once the sexually exploited child is adjudicated, the juvenile court shall retain jurisdiction over the sexually exploited child and may enforce prior orders requiring payment of court-ordered monies.”

Beyond that, the “Safe Harbor Act” is packed with worrying components unrelated to minors, in addition to the mugshot ban. Most alarmingly, it allows adults arrested for prostitution to be held for up to 72 hours so law-enforcement can screen them for mental-health issues, financial status, living arrangements, and who knows what else, before deciding whether to bring charges or send them to a pre-trial diversion program. Here’s the relevant passage:

For the safety and well-being of a person arrested for the crime of prostitution under Division 2, Article 3, Chapter 12, Title 13A, Code of Alabama 1975, he or she may be held in custody for up to 72 hours. The person shall be brought before a court of competent jurisdiction as soon as possible within a 48-hour period to conduct an inquiry into the person’s access to resources, such as, but not limited to, health care, shelter, mental health counseling, or financial aid. The court may issue an order to assist the person in obtaining the services and resources needed pursuant to the court’s inquiry.

In addition, all prostitution cases must now be heard in district, rather than muncipal, courts. And law-enforcement can choose to

The new law also requires any “business engaging in an escort business of companionship” to register with the Alabama secretary of state’s office, and sets a criminal penalty for failing to do so. The office is urging people to report any unregistered escort-services they know of to the the Alabama Law Enforcement Agency. What’s dangerous here is it may relieve police of the need to prove prostitution of individuals advertising as “escorts” before making an arrest.

Rep. Williams has described the bill his efforts as a first step toward “plant[ing] a flag that says you are not going to rape a child in Alabama.” The measure passed both the Alabama House and Senate unanimously.

The last major sections of Williams’ bill focus on prostitution clients, and civil asset forfeiture. It stipulates that anyone found guilty of soliciting prostitution or promoting it, among a few related offenses, must be tried in district rather than municipal court and assessed a mandatory fine of $500, “notwithstanding any other fines, restitution, court costs, or docket fees,” with the fine rising 50 percent for second through fourth convictions. The money will go to a “court-certified therapeutic counseling entity that provides education, treatment, and prevention counseling to adult persons convicted of prostitution offenses.” And courts may order those convicted of solicitation to “attend counseling or an educational training program designed to reduce recidivism rates.”

Alabama cops were also granted more to seize the assets of anyone suspected of soliciting prostitution. “We’ve added wording so it’s plain that if a john pulls up to a car, solicits a female, puts her in that car and drives off—that car can be forfeited, just like a drug dealer’s,” said state prosecutor Barry Matson, deputy director of the Alabama District Attorneys Association, at an Alabama Human Trafficking Task Force meeting in February. He illustrated this detail by noting that, “Right now in Alabama if I pull up on the road and shoot a deer… I’m going to lose my car and my gun. So I think if we can protect deer in that way we darn sure can protect people.”

The forfeiture expansion goes beyond cars and “johns,” however. Under the Safe Harbor Act, “any property, proceeds, or instrumentality of every kind, used or intended for use in the course of, derived from, or realized through the commission” of any misdemeanor or felony prostitution offense, or “attempt or conspiracy to commit such offenses,” is subject to civil forfeiture. This makes prostitution offenses the only misdemeanor crimes subject to this sort of broad forfeiture potential in Alabama.

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Frontrunning: November 23

  • S&P 500 Futures Signal Rally Ebbing; Bonds Decline in Europe (BBG)
  • Oil prices capped by doubts OPEC-led cut will end glut (Reuters)
  • Fed Minutes to Be Parsed for Insight on Inflation, Jobs (WSJ)
  • Trump keeping ‘open mind’ on pulling out of climate deal (Reuters)
  • Trump Raises Prospect of Keeping Ties to His Firms (WSJ)
  • Obama’s not-so-secret admirer: Donald Trump (Reuters)
  • Facebook’s Fake News Crackdown: It’s Complicated (BBG)
  • Iran warns of retaliation if U.S. breaches nuclear deal (Reuters)
  • U.S. retailers push deals early as Black Friday loses focus (Reuters)
  • For Department Stores, the Big Lure on Black Friday: $19.99 Boots (WSJ)
  • How Apple Lost China to Two Unknown Local Smartphone Makers (BBG)
  • Automakers seek to cut inventories with Black Friday, holiday promotions (Reuters)
  • Xerox Overcharged Student Debtors, State Prosecutor Says (BBG)
  • Wall Street’s Youngest Workers Not Worried About Robots (BBG)
  • Brady Dougan Gets Back in the Game With $3 Billion Investment (WSJ)
  • North Sea Oil Glut to Get Short-Term Relief as Flows Go East (BBG)

 

Overnight media Digest

WSJ

– Donald Trump indicated that he was unlikely to disentangle himself from his business empire as fully as he previously suggested, raising questions about potential conflicts of interest while president. on.wsj.com/2fDEkpZ

– The Dow Jones Industrial Average closed above 19000 for the first time, extending a stretch of milestones for major U.S. stock indexes. on.wsj.com/2gdNXiR

– A handful of doctors, many with close ties to John Kapoor’s Insys Therapeutics, are responsible for outsize levels of prescriptions for Subsys, a form of the opioid fentanyl. Officials in more than 15 jurisdictions are investigating Insys’ business practices. on.wsj.com/2gismTL

– As department stores gear up for the holiday shopping frenzy that unofficially gets underway this week, behind the scenes they have been locked in a battle with some big-name suppliers over rampant discounting. on.wsj.com/2gGBmGg

– President-elect Donald Trump is leaning toward asking former Massachusetts Gov. Mitt Romney to be his secretary of state, according to people familiar with the deliberations. on.wsj.com/2fCFDFI

– Former Credit Suisse Group AG Chief Executive Brady Dougan plans to launch a merchant bank in early 2017 and has lined up a $3 billion investment to seed the venture, according to people familiar with the matter. on.wsj.com/2f49ydK

– China is moving swiftly to capitalize in Asia on the apparent collapse of a landmark U.S.-backed Pacific trade agreement, saying it hopes now to conclude its own Asia-wide trade pact in a step to broaden its influence as priorities shift under a new administration in Washington. on.wsj.com/2gFYtkk

 

FT

* Britain’s finance minister will say on Wednesday that he is reducing a benefits squeeze for low-paid workers, but that fixing the public finances and improving productivity are the best ways to improve living standards.

* Companies would be given more breathing space to restructure their debts in times of crisis under a European Union draft law unveiled on Tuesday, inspired by U.S. insolvency rules and aimed at avoiding bankruptcies and saving jobs.

* Frank Field, the chair of the committee probing the collapse of BHS, has asked regulators whether it can see seize Philip Green’s assets including his yachts.

 

NYT

– President-elect Donald Trump said on Tuesday he had no intention of pressing for an investigation into Hillary Clinton’s use of a private email server or the financial operations of her family’s foundation. http://nyti.ms/2gA67M8

– Facebook has developed software to suppress posts from appearing in people’s news feeds in specific geographic areas, according to three current and former Facebook employees. The feature was created to help Facebook get into China, a market where the social network has been blocked. http://nyti.ms/2gA3iut

– A federal judge in Texas issued a nationwide injunction on Tuesday against an Obama administration regulation expanding by millions the number of workers who would be eligible for time-and-a-half overtime pay. The regulation was scheduled to take effect on Dec. 1. It would raise the salary limit below which workers automatically qualified for overtime pay to $47,476 from $23,660. http://nyti.ms/2gA5AKd

– George Soros says he will commit $10 million from his personal foundation to combat a rise in hate crimes that he linked to the “incendiary rhetoric” of President-elect Donald Trump’s campaign. He said he was “deeply troubled” by hundreds of reports of possible hate crimes since the election. http://nyti.ms/2gA6TJ6

 

Britain

The Times

Belgian industrial equipment supplier TVH Group NV launched a hostile bid for Lavendon Group Plc after its initial takeover approaches were rebuffed by the British company’s largest shareholder. http://bit.ly/2fPAL3c

There is “zero chance” of British Airways operating any new domestic flights from an expanded Heathrow, said the head of the airline’s parent company, International Consolidated Airlines Group SA. http://bit.ly/2fPEltT

The Guardian

Millions of families who are being charged hundreds of pounds by agencies to cover the supposed administrative costs of renting will be offered relief when the chancellor of the exchequer promises to ban letting fees. Philip Hammond will unveil the measure in the autumn statement on Wednesday alongside a 1.4 billion pounds ($1.74 billion) investment in affordable housing as he tries to deliver on Prime Minister Theresa May’s promise to help families who are “just about managing.” http://bit.ly/2g1guoY

Discount chains Aldi and Lidl have begun putting up the price of basic groceries, including milk and bananas, as the squeeze from the Brexit-driven fall in the value of the pound hits. http://bit.ly/2g1c9BU

The Telegraph

MPs have written to the Pensions Regulator to ask if assets owned by Philip Green, including his multi-million-pound super yacht, could be seized in order to pay the pensions of thousands of BHS workers. http://bit.ly/2fPAMDV

Hewden, the heavy machinery rental firm, has collapsed into administration after being hit by uncertainty following the EU referendum and after a desperate search for new funding failed. http://bit.ly/2g1fqRR

Sky News

Administrators to BHS have lodged a furious protest against a move to force them to begin liquidating the collapsed retailer within days, accusing its biggest creditor of jeopardising efforts to complete an orderly wind-down, according to a copy of a progress report obtained by Sky News. http://bit.ly/2g1czbH

The Independent

The UK government has reduced its stake in Lloyds Banking Group Plc to below 8 percent as it continues progress towards fully privatising the bailed-out lender. http://ind.pn/2g1cMM1

 

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How Much Credit Should Obama Get for Shrinking the Federal Prison Population?

President Obama’s latest batch of commutations puts his total above 1,000, as Scott Shackford noted yesterday. The New York Times used that milestone as a peg for a story about trends in the federal prison population that gives Obama too much credit and Richard Nixon too much blame. “President Obama is on pace to be the first president in a half-century to leave office with a federal prison population that is smaller than when he was sworn in,” says Times reporter Matt Apuzzo, who attributes that development to “eight years of liberal criminal justice policies, historically low crime rates and an aggressive use of presidential commutations.”

Commutations have played a small role in reducing the number of federal prisoners. After a slow start (just one commutation in his first term, just 20 in the first half of his second term), Obama is earnestly and admirably trying to make up for lost time. If he shortens as many sentences this month and the next two as he did in October, his total will be almost 1,500, which is more than his 12 most recent predecessors combined, from FDR through George W. Bush. But even 1,500 commutations would represent just 0.7 percent of federal prisoners, half of whom are drug offenders.

What about “eight years of liberal criminal justice policies”? The biggest factor has been the Fair Sentencing Act of 2010 (FSA), which reduced crack cocaine penalties, and the changes to federal sentencing guidelines that law prompted. According to a 2015 report from the U.S. Sentencing Commission (USSC), about 6,000 crack offenders received shorter prison terms as a direct result of the FSA from 2010 through 2014. The average reduction was nearly three years. Retroactive changes that the USSC made to its sentencing guidelines in light of the FSA reduced another 6,880 prison terms. That’s a total of nearly 13,000.

To his credit, Obama supported the FSA. But so did almost every member of Congress (including the “drug war dinosaur” Jeff Sessions). The bill was approved by unanimous consent in the Senate and by a voice vote in the House. Only one federal legislator—House Judiciary Committee Chairman Lamar Smith (R-Texas)—spoke against it. And when it came to retroactive application of the ensuing guideline changes, Obama’s attorney general, Eric Holder, urged the USSC to be more conservative than it decided to be. His recommendation would have reduced the number of prisoners who were allowed to seek resentencing from more than 12,000 to about 5,500.

A 2014 amendment to the sentencing guidelines, reducing the “base offense level” for drug offenders, resulted in more modest penalty changes but applies to a larger group. The USSC estimated that “approximately 70 percent of federal drug trafficking defendants would qualify for the change, with their sentences decreasing an average of 11 months, or 17 percent, from 62 to 51 months on average.” Retroactive application of that amendment made as many as 46,000 prisoners eligible for resentencing.

The Times also mentions guidelines that Holder issued in 2013, urging federal prosecutors to omit drug weights that trigger mandatory minimums when charging low-level, nonviolent offenders. “Prosecutors have responded by reducing the frequency of those charges by about 25 percent,” Apuzzo says, citing the Justice Department. According to an estimate by Paul Hofer, a policy analyst with Federal Public and Community Defenders, Holder’s charging guidelines, if fully implemented, might have helped about 500 of the 25,000 or so federal drug offenders sentenced each year, or 2 percent.

The year Obama was elected, there were 201,668 federal prisoners. After rising during the first five years of the Obama administration, that number fell from 219,298 in 2013 to 214,149 in 2014, a 2.4 percent drop. That encouraging development had almost nothing to do with Obama’s commutations, 98 percent of which were issued in 2015 and 2016, or Holder’s new charging policy, which was announced in mid-2013. Assuming the downward trend continues (data for 2015 are not available yet), the FSA and the USSC’s amendments will play a much bigger role than the “liberal criminal justice policies” that Obama and Holder implemented on their own authority. Apuzzo’s suggestion that “Mr. Obama’s criminal justice legacy” includes a substantially smaller federal prison population is therefore rather misleading.

Apuzzo also exaggerates Richard Nixon’s impact on the prison population. “President Lyndon B. Johnson was the last president to leave office with a smaller federal prison population than he inherited,” he writes. “His successor, Richard M. Nixon, declared war on drugs in 1971, and the prison population has since ballooned into the world’s largest, with about one in every 100 adults locked up in local, state or federal prisons or jails.” The number of federal prisoners rose by 37 percent between 1971 and 1977, then fell for three consecutive years before starting a steady climb that continued for more than three decades. The real explosion in the prison population began during the Reagan administration, when the number of federal prisoners more than doubled, from fewer than 25,000 in 1980 to more than 50,000 in 1988. It kept rising, peaking in 2013 at more than 219,000, nine times the 1980 number.

In this context, the 2014 drop looks puny but promising. Assuming it was a turning point, the fact that it happened while Obama was in the White House has less to do with his policies than Apuzzo implies. Given the importance of falling crime rates and sentencing reforms that had bipartisan support, the trend line probably would have looked very similar if voters had elected John McCain in 2008 or Mitt Romney in 2012. Although it is reasonable to assume that either of them would have been much less interested than Obama in using his clemency power to free drug offenders, commutations do not explain the reversal of the upward trend in the federal prison population.

As for the future, neither Donald Trump nor his pick for attorney general, Jeff Sessions, seems inclined to view shrinking the federal prison population as a worthwhile goal. Sessions “strongly opposed Mr. Obama’s liberal approach to criminal justice,” Apuzzo notes, favoring “vigorous enforcement of drug laws and the use of mandatory minimum sentences.” Trump probably will not make much use of his clemency power, and Sessions is apt to reverse Holder’s charging policy for low-level, nonviolent drug offenders. But as Apuzzo notes, the changes made by Congress and the sentencing commission will be harder to reverse, and they will continue to curtail the number of federal prisoners (as will crime rates, assuming they remain historically low). Unfortunately, the prospects for further sentencing reform look dimmer with a “law and order” Republican in the White House and a fan of mandatory minimums in charge of the Justice Department.

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Bunds Tumble On Report ECB May Lend Out More Bonds To “Unfreeze” Broken Repo Market

As we showed yesterday, while the rest of the European bond market has suffered from the some “trumpflation-linked” weakness in the long end as US Treasurys in the aftermath of the Trump election as inflation and new supply fears grow, short-dated German bund yields unexpectedly plunged to record lows…

 

… as a result of what appears to be a massive year-end collateral shortage (which has come in about a month early) with demand for German collateral soaring and reflected in repo funding levels as funds are now forced to pay up to 1.5% to borrow a 10-year Bund, up from some 0.40% a year ago, according to Icap data..

Today we saw more of the same in early trading, as the German 2Y continued to outperform on collateral shortage fears, which likely prompted Reuters to report that the ECB is looking for ways to lend out more of its huge pile of government debt to avert a freeze in the €5.5 trillion repo market that underpins the financial system, manifesting in the surge in short-term Bunds.

While the ECB has bought more than a trillion euros ($1.06 trillion) of euro zone government bonds in a bid to shore up economic growth and inflation in the euro zone, in doing so, it has taken away the key ingredient for repurchase agreements, or repos, whereby financial firms lend to each other against collateral, typically high-rated government bonds such as Germany’s. Repo, as covered here extensively over the years, is the core lubrication of debt capital markets, and is used by investment funds to finance trading and is regarded by the ECB as a key avenue to transmit its own monetary stimulus to the economy. More details:

A freeze in repo activity risks undoing some of the ECB’s stimulus by hampering lending between financial companies and leaving bond markets vulnerable to sharp selloffs.

 

To avert this, the ECB wants to make it easier for banks to borrow the bonds that it has bought so that they can be used as collateral for repo loans, the sources said.

 

Possible changes include reducing charges for firms which fail to return on time the bonds they have borrowed, accepting new types of collateral and extending the duration of loans.

 

“If liquidity dries up there are more fails and banks are more cautious when it comes to making the market,” one of the sources said. The sources added the issue will be discussed at the ECB’s Dec. 8 meeting, when rate setters will decide on whether to continue purchases beyond March and ensure they can still find enough bonds to buy.

 

Any decision on bond lending will depend on what other changes the ECB makes to its asset-purchase program and might not be finalised in December.

While Europe is not alone in its central bank dominating the repo market, with the Fed likewise having quietly become the biggest player in the US repo market as well, the problem appears to be most severe in Germany.

With the ECB now owning more than a quarter of all outstanding German bonds as it continued to slowly nationalize European debt, funds pay up to 1.5% to borrow a 10-year Bund, up from some 0.40 percent a year ago, according to Icap data.

This is putting a strain on investors as they face increasingly frequent demands to put up cash or liquid collateral against their derivative positions due to new regulation.

“If a pension fund can’t borrow a bond in time, it may have to sell its own cash bond, foregoing a potential return in the future to fulfill a short-term obligation,” Godfried DeVidts of the International Capital Market Association industry body said. “So basically the pension funds are getting poorer and the pensioners too.”

Any ECB decision how to remedy the “repo freeze” would meet further roadblocks as it would then have to be implemented by national central banks, which own the bulk of the debt bought by the ECB and bear the risk for their own bond-lending schemes. “This means the most radical proposals may run into resistance, the sources said.”

And while the actual remedy to be implemented by the ECB is yet to be determined, the concern that the ECB may inject more securities to unfreeze repo has quickly rippled through the bond market, and as a result Germany’s two-year bond yields rose: the two-year Schatz yield shot up 6 basis points from the day’s lows to minus 0.69 percent, having hit a record low earlier in the day. Other euro zone bond yields also rose, reversing earlier falls.

The most notable move was in 10Y bunds which jumped to 0.278% after hitting a session low of 0.21%. French 10Ys also rose over 7 bps, as did Italian bonds.

Bund futures slid to a session low of 160.78, losing as much as 62 ticks, following the Reuters report.

The best summary of the quandary the ECB has found itself in comes from David Schnautz, interest rate strategist at Commerzbank, who first pointed out the collateral shortage, and who said that “there is something going on with the repo markets and we can see that as soon as the ECB starts talking about tackling these problems we see a market reaction.

For now, despite the modest pick up in yields, the market is confident that the collateral shortage, something we have warned about since 2013, will be resolved although the specifics could lead to another major asset repricing, especially if it comes at a time when the ECB and BOJ are expected to provide the “cross-border” helicopter money to finance Trump’s stimulus plan, as reported yesterday.

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Speculators Are Finally Bailing Out Of Gold, And That’s A Good Thing

 

 

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Speculators Are Finally Bailing Out Of Gold, And That’s A Good Thing

Posted with permission and written by John Rubino

 

 

 

 

All this talk of massive new infrastructure spending financed with a tsunami of freshly-minted currency should be lighting a fire under gold. That it hasn’t is a testament to how out-of-whack the precious metals market had gotten during the first six months of this year.

 

As gold rose, the futures contract traders whose games tend to dictate near-term price action had set the metal up for a fall. Specifically, the speculators (who are always wrong at the extremes) were ridiculously long. With the suckers all-in, a big correction was needed to restore balance.

 

But it didn’t come. Several months passed with gold treading water, leading some to wonder if the paper market tail had finally stopped wagging the physical market dog.

 


 

Now the long-overdue correction seems to have arrived. Gold is down 11% from its recent high, and the speculators are bailing. Here’s the Commitment of Traders (COT) report (courtesy of GoldSeek) for the week ending Tuesday the 15th showing a 17% drop in large speculator long positions. That’s a huge move for a single week. And based on the price declines of the subsequent three days, it’s likely that the next report will show a similar drop.

 

Meanwhile the commercial traders – the guys who sucker the speculators into these unwise bets – cut their short positions by an also notable 9%.

 

 

Typically, a bottom occurs when both commercials and speculators are flat — that is, carrying more-or-less equal long and short positions. The latest report is still a long way from that kind of balance. But another few weeks like the last one and this indicator, at least, will be screaming “buy gold”.

 

 

 

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Speculators Are Finally Bailing Out Of Gold, And That’s A Good Thing

Posted with permission and written by John Rubino

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