en Bankrupt Venezuela Is Demanding Oil From JV Partners Without Payment <p>Now that Venezuela, and its state-owned petroleum company PDVSA, were both officially declared in default on their debt by ISDA last Friday, analysts were closely watching what the insolvent Maduro government would do next, now that it is - at least on paper - isolated from most international capital markets (with the occasional loophole when it comes to Chinese and Russian funds). We didn't have long to wait, and as <a href="">Reuters reports</a>, <strong>a cash-strapped, and bankrupt, PDVSA has resorted to siphoning oil from its cash-paying joint ventures with foreign firms to feed its domestic refineries.</strong></p> <p>In one example, PDVSA asked its Petropiar joint venture with Chevron <strong>to turn over as much as 45% of the oil it planned to export in November without payment. </strong>While state-owned PDVSA predictably did not respond to a request for comment by <a href="">Reuters</a>, Chevron - which stands to lose far more - similarly declined to comment. Reduced exports of Petropiar’s crude is mainly having an impact on customers in the United States, according to one of the sources and Thomson Reuters trade flows data.</p> <p>“<strong>PDVSA started requesting some cargoes from Petrocedeno for the Paraguana Refining Center (CRP). Now it is asking Petropiar to relinquish almost half of its crude production</strong>,” the Reuters source said. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>From August through October, PDVSA took at least 1 million barrels per month of heavy crude from Petropiar after acquiring Zuata Sweet crude from Petrocedeno earlier this year. It is seeking 2 million barrels, or 45% of Petropiar’s total production for November.</p> </blockquote> <p>Venezuela's action is a bizarre form of self-cannibalization, as PDVSA's joint ventures export upgraded crude to buyers around the globe and as such, Maduro's diversion cuts into the main source of the government’s revenue. The likely reason why the government has resorted to such a drastic decision, one which will significantly cut into Venezuela's only source of dollar funding, is to deal with intermittent, and increasingly acute fuel shortages plaguing the nation because of the poor condition of its refineries, which in some cases are working at a third of capacity. <strong>&nbsp;</strong></p> <p>Reuters confirms as much, "the lack of these exports add to the nation’s cash crunch as President Nicolas Maduro tries to restructure some $60 billion in debt to bondholders" even as some of Venezuela’s oil exports are already under oil-for-loan agreements with Russia and China, <a href="">as we reported this summer</a>.&nbsp; </p> <p>In addition to the Petropiar joint venture with Chevron, PDVSA has this year taken oil for its domestic refineries from its Petrocedeno project with Total and Statoil. The diversions are adding new strains to the ventures’ cash flow. Foreign partners in several joint ventures also have been required since last year to pay for imported naphtha used to dilute the Orinoco Belt’s oil when upgraders are not operating or working at reduced capacity, further hurting their earnings.</p> <p>Worse, the cash grab impacts not only PDVSA, but the international partners: "The joint ventures are expected to be compensated for the diverted oil through dividends paid to the partners. <strong>However, some foreign oil firms operating in Venezuela have been unable to repatriate such payments to their parent companies.</strong>"</p> <p>Meanwhile, Venezuela's dometic oil industry is crashing as PDVSA’s finances are so weak it is struggling to find the funds to drill wells, maintain oilfields and keep pipelines and ports working, Reuters notes. For context, according to the latest OPEC numbers, Venezuela’s overall crude output declined in October to its lowest since 1989. </p> <p>Sanctions imposed by the United States on Venezuela and its state-run company PDVSA have not helped, and have also contributed to weaker exports this year as most offshore energy coutnerparts demand letters of credit, which however no banks will endorse due to fears of Venezuela's escalating sanctions. </p> <p>As a last ditch measure, Maduro’s government has increasingly turned to ally Russia for the cash and credit it needs to survive as China has not extended any more credit to Venezuela amid delays in oil shipments, Reuters reported in August.</p> <p>Meanwhile, PDVSA’s U.S. refining unit, Citgo Petroleum, in July started boosting its imports of Venezuelan upgraded crude from the joint ventures as a way of offsetting declining purchases from its parent company, which is struggling to cover oil-for-loan agreements to Russian and Chinese companies amid falling output.&nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Citgo has struggled to buy crude supplies directly from non-Venezuelan producers because of U.S. sanctions levied this year, according to trade sources.<strong> U.S. banks have been avoiding extending even short-term credit to PDVSA and its subsidiaries, which have affected Citgo’s oil purchases. Citgo has said it is not facing credit issues.</strong> </p> <p>&nbsp;</p> <p>But Citgo’s effort to compensate for PDVSA’s export problems might not last, one of the sources said, as the growing supply of the joint ventures’ crude to Venezuelan refineries is undermining its ability to purchase upgraded oil. </p> </blockquote> <p>And on Tuesday, Venezuela unveiled its latest "solution" to Citgo's problems: as Bloomberg reported this morning, Venezuela's Public Prosecutor, Tarek William Saab, said authorities arrested Citgo’s interim President Jose Pereira. Additionally, Citgo’s Tomeu Vadell, Alirio Zambrano, Jorge Toledo, Gustavo Cardenas y Jose Luis Zambrano were also detained. This latest radical "solution" will only accelerate Venezuela's gasoline fiasco, which coming from the nation with the largest petroleum reserves in the world, is the final - and most ironic yet - indiginity of the socialist state. </p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="624" height="333" alt="" src="" /> </div> </div> </div> Americas Business Capital Markets China Citgo Crude default Energy policy of Venezuela Maduro government Maduro’s government OPEC Organization of Petroleum-Exporting Countries Orinoco Belt Paraguana Refining Center PDVSA PDVSA Petroleum Reuters Saab Venezuela World oil market chronology Tue, 21 Nov 2017 18:58:03 +0000 Tyler Durden 607689 at Democrats Call For Ethics Investigation Into John Conyers <p><strong>Update:</strong> Despite one anonymous staffer&#39;s claim that Conyers is &quot;untouchable&quot; because of his longstanding status as a civil-rights icon who marched with Dr. Martin Luther King Jr., senior Democrats on the House Judiciary Committee are calling for an ethics probe into the Dean of the House following a report revealed that staffers have accused the senior lawmaker of sexual harassment.</p> <p>Reps. Jerry Nadler (D-N.Y.) and&nbsp; Zoe Lofgren (D-Calif.), the second and third most-senior Democrats on the powerful committee said early that the House Ethics Committee should investigate the validity of the BuzzFeed News report published late Monday night.</p> <p>&quot;The reports about Congressman Conyers are as serious as they get. The Committee on Ethics should take up this matter immediately with a goal of promptly assessing the validity of the news account. This reported behavior cannot be tolerated in the House of Representatives or anywhere else,&quot; Lofgren said in a statement Tuesday morning, the <a href="">Hill</a>.</p> <p>Nadler issued a statement around the same time calling the allegations against Conyers &quot;extremely serious and deeply troubling.&quot;</p> <p>&ldquo;Obviously, these allegations must be investigated promptly by the Ethics Committee. There can be no tolerance for behavior that subjects women to the kind of conduct alleged,&quot; Nadler said.</p> <p>Conyers continues to deny that the settlements happened.</p> <p>* * *</p> <p><strong>Update: </strong>Conyers has told The <a href="">Associated Press</a> that he hasn&#39;t settled any sexual harassment complaints with any staff members. Conyers, who answered the door at his Detroit home Tuesday morning, says he knows nothing about any claims of inappropriate touching and learned of the story just hours earlier. Referring to allegations of sexual harassment and assault being made against politicians and others, the veteran lawmaker says he&#39;s &quot;been looking at these things with amazement.&quot;</p> <p>Meanwhile, Paul Ryan - who Cernovich blamed for enabling Conyers&#39; settlement - called the settlement &ldquo;extremely troubling&rdquo; and vowed to continue reviewing House policy on sexual harassment in the workplace.</p> <p>&ldquo;People who work in the House deserve and are entitled to a workplace without harassment or discrimination,&rdquo; Ryan said, outlining the recent steps the House has made to combat sexual misconduct in Congress.</p> <p>As <a href="">Talking Points Memo</a> pointed out, last month the Committee on House Administration reviewed its procedures related to workplace harassment and discrimination, and last week that committee issued a new policy requiring &ldquo;mandatory training for all members and staff,&rdquo; he said.</p> <p>* * *</p> <p>Last week, we reported how Congress&rsquo;s Office of Compliance paid out $17 million for 264 settlements with federal employees over 20 years for various violations, including sexual harassment &ndash; information that was brought to light by California Rep. Jackie Speiers, who claimed that two men with a history of sexual harassment continued to serve in the House &ndash; one of whom was a Republican and one a Democrat.</p> <p>Now, thanks to <a href="">Buzzfeed </a>News, <strong>the mystery Democrat has been identified as Michigan Rep. John Conyers, the ranking member on the powerful House Judiciary Committee and the longest-serving member of the House of Representatives. In 2014, a former Conyers staffer filed a complaint claiming she was fired for refusing his sexual advances, and that she had been subsequently blackballed from working with Congress.</strong></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 233px;" /></a></p> <p>The woman received a $30,000 settlement, which was paid out of Conyers&rsquo;s taxpayer-funded office budget.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The woman who settled with Conyers launched the complaint with the Office of Compliance in 2014, alleging she was fired for refusing his sexual advances, and ended up facing a daunting process that ended with a confidentiality agreement in exchange for a settlement of more than $27,000. Her settlement, however, came from Conyers&rsquo; office budget rather than the designated fund for settlements.</p> <p>&nbsp;</p> <p><strong>Congress has no human resources department. Instead, congressional employees have 180 days to report a sexual harassment incident to the Office of Compliance, which then leads to a lengthy process that involves counseling and mediation, and requires the signing of a confidentiality agreement before a complaint can go forward.</strong></p> <p>&nbsp;</p> <p>After this an employee can choose to take the matter to federal district court, but another avenue is available: an administrative hearing, after which a negotiation and settlement may follow.</p> </blockquote> <p>A law clerk who represented the woman, who was not named by Buzzfeed and has never come forward with her story, said the settlement process was like &ldquo;being abused twice&rdquo; for the poor woman.&nbsp; In the settlement papers, other staffers in Conyers&rsquo; office discuss acting as couriers who transported women with who Conyers was allegedly having affairs.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The process was &ldquo;disgusting,&rdquo; said Matthew Peterson, who worked as a law clerk representing the complainant, and who listed as a signatory to some of the documents.</p> <p>&nbsp;</p> <p><strong>&ldquo;It is a designed cover-up,&rdquo; said Peterson, who declined to discuss details of the case but agreed to characterize it in general terms. &ldquo;You feel like they were betrayed by their government just for coming forward. It&rsquo;s like being abused twice.&quot;</strong></p> <p>&nbsp;</p> <p>Other lawyers named as representing the accuser could not be reached for comment. The Office of Compliance did not confirm or deny that it had dealt with the case.</p> </blockquote> <p>The documents were first provided to BuzzFeed News by Mike Cernovich, who said he gave the documents to BuzzFeed News for vetting and further reporting, and because he said if he published them himself, Democrats and congressional leaders would &ldquo;try to discredit the story by attacking the messenger.&rdquo; He provided them without conditions. BuzzFeed News independently confirmed the authenticity of the documents with four people directly involved with the case, including the accuser.</p> <p>In a series of tweets published last night, Cernovich explained why he leaked the story to Buzzfeed, and also blamed House Speaker Paul Ryan for covering up Conyers&rsquo; harassment.</p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Congressman John Conyers is a sexual predator, and Paul Ryan covered it all up <a href=""></a></p> <p>&mdash; Mike Cernovich ???????? (@Cernovich) <a href="">November 21, 2017</a></p></blockquote> <script async src="" charset="utf-8"></script><p>&nbsp;</p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p dir="ltr" lang="en">Twitter manually removed John Conyers name, which had 50K tweets (way more than other trends), from the trending section! They are literally covering up for a rapist.</p> <p>&mdash; Mike Cernovich ???????? (@Cernovich) <a href="">November 21, 2017</a></p></blockquote> <script async src="" charset="utf-8"></script><p>&nbsp;</p> <p>In her wrongful dismissal complaint, the former employee said Conyers repeatedly asked her for sexual favors and often asked her to join him in a hotel room. On one occasion, she alleges that Conyers asked her to work out of his room for the evening, but when she arrived the congressman started talking about his sexual desires. She alleged he then told her she needed to &ldquo;touch it,&rdquo; in reference to his penis, or find him a woman who would meet his sexual demands.</p> <p>As Buzzfeed pointed out, Congress has no human resources department. Instead, congressional employees have 180 days to report a sexual harassment incident to the Office of Compliance, which then leads to a lengthy process that involves counseling and mediation, and requires the signing of a confidentiality agreement before a complaint can go forward. <strong>After this, the complainant can choose to either pursue the matter in federal district court or seek a settlement through an administrative hearing.</strong></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 592px;" /></a></p> <p>In the complaint, which is available in full below, the woman alleges that Conyers sexually harassed her by asking her to touch his penis, or find another woman who would meet his sexual demands. Conyers also made her work nights, weekends and holidays on occasion to &ldquo;keep him company.&rdquo;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>In her complaint, the former employee said Conyers repeatedly asked her for sexual favors and often asked her to join him in a hotel room. On one occasion, she alleges that Conyers asked her to work out of his room for the evening, but when she arrived the congressman started talking about his sexual desires. <strong>She alleged he then told her she needed to &ldquo;touch it,&rdquo; in reference to his penis, or find him a woman who would meet his sexual demands. She alleged Conyers made her work nights, evenings, and holidays to keep him company.</strong></p> <p>&nbsp;</p> <p>In another incident, the former employee alleged the congressman insisted she stay in his room while they traveled together for a fundraising event. <strong>When she told him that she would not stay with him, she alleged he told her to &ldquo;just cuddle up with me and caress me before you go.&rdquo;</strong></p> <p>&nbsp;</p> <p>&ldquo;Rep. Conyers strongly postulated that the performing of personal service or favors would be looked upon favorably and lead to salary increases or promotions,&rdquo; the former employee said in the documents.</p> <p>Three other staff members provided affidavits submitted to the Office Of Compliance that outlined a pattern of behavior from Conyers that included touching the woman in a sexual manner and growing angry when she brought her husband around.</p> <p>&nbsp;</p> <p>One affidavit from a former female employee states that she was tasked with flying in women for the congressman. &ldquo;One of my duties while working for Rep. Conyers was to keep a list of women that I assumed he was having affairs with and call them at his request and, if necessary, have them flown in using Congressional resources,&rdquo; said her affidavit. (A second staffer alleged in an interview that Conyers used taxpayer resources to fly women to him.)</p> </blockquote> <p>One male employee who corroborated the victim&rsquo;s claims in an affidavit said he witnessed Conyers touch his staffers in an inappropriate, sexual manner. The women in his office said it was widely known that Conyers had sexual relationships with his staff, something the women felt undermined their credibility.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The employee said in her affidavit that Conyers also made sexual advances toward her: &ldquo;I was driving the Congressman in my personal car and was resting my hand on the stick shift. Rep. Conyers reached over and began to caress my hand in a sexual manner.&rdquo;</p> <p>&nbsp;</p> <p>The woman said she told Conyers she was married and not interested in pursuing a sexual relationship, according to the affidavit. <strong>She said she was told many times by constituents that it was well-known that Conyers had sexual relationships with his staff, and said she and other female staffers felt this undermined their credibility.</strong></p> <p>&nbsp;</p> <p><strong>&ldquo;I am personally aware of several women who have experienced the same or similar sexual advances made towards them by Rep[.] John Conyers,&rdquo; </strong>she said in her affidavit.</p> <p>&nbsp;</p> <p>A male employee wrote that he witnessed Rep. Conyers rub the legs and other body parts of the complainant &ldquo;in what appeared to be a sexual manner&rdquo; and saw the congressman rub and touch other women &ldquo;in an inappropriate manner.&rdquo; The employee said he confronted Conyers about this behavior.</p> <p>&nbsp;</p> <p>&ldquo;Rep. Conyers said he needed to be &lsquo;more careful&rsquo; because bad publicity would not be helpful as he runs for re-election. He ended the conversation with me by saying he would &lsquo;work on&rsquo; his behavior,&rdquo; the male staffer said in his affidavit.</p> </blockquote> <p>One reason Conyers&rsquo; staffers tolerated his behavior, as Buzzfeed points out, was the Congressman&rsquo;s status as a civil rights icon, something his staffers believed insulated him from criticism. He is also incredibly popular among his constituents in Detroir.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Conyers is a civil rights icon. He was lauded by Martin Luther King Jr. and is a founding member of the Congressional Black Caucus.</p> <p>&nbsp;</p> <p><u><strong>&ldquo;Your story won&rsquo;t do shit to him,&rdquo; </strong></u>said the staffer. &ldquo;He&rsquo;s untouchable.&rdquo;</p> </blockquote> <p>Representatives for Minority Leader Nancy Pelosi and former Speaker John Boehner said both lawmakers were unaware of the settlements because of the confidentiality agreements. Paul Ryan&rsquo;s office didn&rsquo;t return Buzzfeed&rsquo;s request for comment.</p> <p>To help rectify Congress&rsquo;s broken system, Rep. Speiers has introduced legislation to overhaul the complaint process, including requiring the Office of Compliance to publicly name the office of any member who enters into a settlement. The bill would also allow complainants to waive mediation and counseling, set up a victims&#39; counsel, and require all congressional offices to go through harassment training every year.</p> <p>In the meantime, we imagine this won&rsquo;t be the last bombshell disclosure implicating a high-ranking member of Congress. Indeed, if recent trends are any guide, it&rsquo;s only a matter of time, we believe, before the Republican whom Speiers alluded to is unmasked.</p> <p><u><strong>Read the complaint in its entirety below:</strong></u></p> <p>&nbsp;</p> <p style=" margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block;"><a href="" style="text-decoration: underline;" title="View 2017.11.21buzzfeed on Scribd">2017.11.21buzzfeed</a> by <a href="" style="text-decoration: underline;" title="View zerohedge's profile on Scribd">zerohedge</a> on Scribd</p> <p><iframe class="scribd_iframe_embed" data-aspect-ratio="0.7729220222793488" data-auto-height="false" frameborder="0" height="600" id="doc_61439" scrolling="no" src=";view_mode=scroll&amp;access_key=key-dP8XPG5w1rFPGXoCfphi&amp;show_recommendations=true" title="2017.11.21buzzfeed" width="100%"></iframe><br />&nbsp;</p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="463" height="216" alt="" src="" /> </div> </div> </div> Broken System BuzzFeed Committee on Ethics Committee on House Administration Congress Congress’s office of Compliance Conyers, Georgia Democrats Detroit Ethics Committee Feminism Harassment House Ethics Committee House of Representatives Human behavior Human sexuality John Conyers Judiciary Committee Law Michigan Nancy Pelosi Nixon's Enemies List Politics Sexual harassment United States House Committee on the Judiciary Workplace bullying Workplace harassment Tue, 21 Nov 2017 18:48:39 +0000 Tyler Durden 607657 at NYPost Publishes Photos Of Al Franken Groping Arianna Huffington <p>Al Frankenstein just can&rsquo;t catch a break.</p> <p>Yesterday, a <a href="">second woman came forward </a>to accuse the Democratic Minnesota senator of groping her at a state fair back in 2010. Several of her family members who were present when the incident occurred corroborated her story in interviews with CNN. Reporters from the cable news channel even found references to the assault on the victim&rsquo;s Facebook page.</p> <p>Now, the <a href="">New York Post</a> has published never-before-seen photos of Franken groping media entrepreneur Arianna Huffington.<strong> The photos were taken for an unnamed magazine back in 2000.</strong></p> <p>One photo shows Franken grabbing the media mogul&rsquo;s buttocks as they pose back to back&hellip;</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 757px;" /></a></p> <p>&hellip;<strong>An even more shocking photo shows Franken grabbing Huffington&rsquo;s breasts in a bear hug.</strong></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 266px;" /></a></p> <p>Witnesses told the Post that Franken couched his actions as just &quot;clowning around.&quot;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Franken was clowning around, but it really isn&rsquo;t funny,&rdquo; said a source from the shoot. &ldquo;That&rsquo;s his tactic, pretend like it&rsquo;s all a big joke. Arianna was pushing his hands away. He was groping her. There was some fun attached to it, but she wasn&rsquo;t enjoying it. She definitely told him to stop and pushed him away.&quot;</strong></p> </blockquote> <p>Still, Franken persisted, according to the witness.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Franken stood there with his hand on her bottom for a long time, because there are numerous frames, each taken seconds apart, and his hand was there the whole time &mdash; his hand wasn&rsquo;t just there for a quick moment,&rdquo; the source said.</p> </blockquote> <p>Huffington, for her part, defended Franken and said the groping was a nod to a sketch they&rsquo;d done in the mid-1990s called &ldquo;Strange Bedfellows.&quot;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;The notion that there was anything inappropriate in this photo shoot is truly absurd,&rdquo;</strong> she said in a statement to The Post.</p> <p>&nbsp;</p> <p>&ldquo;Al and I did a comedic sketch for Bill Maher&rsquo;s &lsquo;Politically Incorrect&rsquo; called &lsquo;Strange Bedfellows,&rsquo; in which the whole point, as the name makes clear, was that we were doing political commentary from bed. This shoot was looking back at the sketch, and we were obviously hamming it up for comedic effect.</p> </blockquote> <p>Huffington insisted that she, Franken and Franken&rsquo;s wife have been friends since before she founded the Huffington Post.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;I&rsquo;ve been great friends with Al and his wife Franni for over 20 years and there has never been anything remotely inappropriate in our interactions.&quot;</p> <p>&nbsp;</p> <p>In fact, Huffington &mdash; the co-founder of The Huffington Post and CEO of wellness company Thrive Global &mdash; has previously credited their in-bed interviews as having made her career.</p> <p>&nbsp;</p> <p>&ldquo;[Franken] once gave me a picture of himself that said, &lsquo;I made you,&rsquo; &mdash; and in many ways he did,&rdquo; she said during a 2014 book launch, The Hill reported at the time. &ldquo;The biggest thing I did in my career was in 1996, when I went to bed with [Franken] for a comedy bit called &lsquo;Strange Bedfellows.&rsquo;&thinsp;&quot;</p> <p>&nbsp;</p> <p>The segment featured both in pajamas. It once ended in a pillow fight.</p> <p>&nbsp;</p> <p><strong>&ldquo;Good evening. I&rsquo;m the beautiful but evil Arianna Huffington, in bed with the talented but smug Al Franken,&rdquo; she said introducing one conversation.</strong></p> </blockquote> <p>Of course, this wouldn&rsquo;t be the first time in recent memory where Huffington &ndash; an outspoken feminist &ndash; stood up for men accused of mistreating or demeaning women. Huffington famously joined Uber&rsquo;s board to oversee an investigation into its workplace culture and help rehabilitate former CEO Travis Kalanick&rsquo;s image.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Going forward there can be no room at Uber for brilliant jerks,&rdquo;</strong> the high-flying 67-year-old media exec was reported to have said in a recent conference call.</p> <p>&nbsp;</p> <p>But she has also been accused of turning a blind eye to sexual-harassment at The Huffington Post - by relocating one of her most trusted lieutenants to India in 2014, following allegations against him, according to a recent Gizmodo report.</p> <p>&nbsp;</p> <p>Huffington declined to comment to the tech blog.</p> </blockquote> <p>Franken is no longer the only high-profile Democrat to be accused of sexual harassment in recent weeks. Longtime Congressman John Conyers reportedly settled sexual harassment complaints with his staff with money from his office budget, Buzzfeed reported late last night.</p> <p>And of course, four more women have come forward to accuse former President Bill Clinton of sexual assault.</p> <p>Franken is now facing an ethics investigation.</p> <p><strong>But at least there&rsquo;s one group that still backs the former SNL writer...</strong></p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">36 women who worked with Al Franken on SNL have signed a letter of support...I would not be surprised if this has a chilling effect on women speaking out. It was shameful when Fox News hosts did this for Roger Ailes and this letter, at this time, is highly inappropriate. <a href=""></a></p> <p>&mdash; Yashar Ali ???? (@yashar) <a href="">November 21, 2017</a></p></blockquote> <script async src="" charset="utf-8"></script><p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="563" height="299" alt="" src="" /> </div> </div> </div> Al Franken American literature Arianna Huffington Bedfellows Fox News Franken Huffington HuffPost India New York Post Twitter Twitter United States Tue, 21 Nov 2017 18:43:52 +0000 Tyler Durden 607686 at SocGen: Asian Equities Are So Awesome, A China Minsky Moment Is "Manageable" <p>If we&rsquo;re going to discuss Asian equities in the context of &ldquo;awesome&rdquo;, we should begin with Tencent. Tencent, which has more than doubled this year, drove Asian stocks higher during Tuesday&rsquo;s trading session. Trading on the main board of the Hong Kong Stock Exchange hit a 28-month high of HK$157 billion with one fifth of it in only two stocks &ndash; Tencent (HK$21.7 billion) and Ping An Insurance (HK$9.4 billion). It was hardly surprising that shares in Hong Kong Exchanges &amp; Clearing also had a good day, rising 5.5%, the most in more than a year. Tencent&rsquo;s 2.4% rise pushed it market cap. above the illustrious $500 billion market, granting it membership of an exclusive tech-only club.</p> <p><img height="353" src="" width="600" /></p> <p>Just in case the frenzy in Hong Kong equities in general, and Tencent in particular, is making you a little nervous, <a href="">Bloomberg</a> reports that one of Asia&rsquo;s top performing portfolio managers believes that we can expect more of the same in 2018.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>One of the world&rsquo;s best-performing equity gauges is set for further gains in 2018 as tech giant Tencent Holdings Ltd. and consumer stocks drive it higher, according to Shanghai-based money manager Wang Menghai.</p> <p>&nbsp;</p> <p>The Hang Seng Index has led the charge among Asia&rsquo;s biggest markets this year, rising 36 percent. Tencent, which has now overtaken Facebook Inc. in market value, accounts for nearly one-third of that advance. Wang, who works for Fullgoal Fund Management Co., has seen his fund beat 92 percent of peers in 2017. He plans to stay loyal to Tencent and boost exposure to companies that may benefit from quickening inflation.</p> <p>&nbsp;</p> <p>&ldquo;The Hong Kong benchmark is very likely to perform well in 2018, though the index rally may not be as much as this year,&rdquo; Wang said in a phone interview. &ldquo;Some of this year&rsquo;s best performers are worth holding as long-term bulls.&rdquo;</p> </blockquote> <p>Wang&rsquo;s had 9.68% of his Fullgoal SH-SZ-HK Value Selected Flexible Allocation Mixed Fund invested in Tencent at the end of Q3 2017. Speaking to Bloomberg, Wang noted that he was interested in &ldquo;food and beverage companies and dairy and liquor producers&rdquo; going forward because they will raise selling prices in the face of higher rates of inflation. This piqued our interest because the highest profile (and largest) Chinese liquor stock right now is unquestionably Kweichow Moutai. Last Friday, we <a href="">discussed</a> the highly irregular move by China&rsquo;s Xinhua news agency which stated that Kweichow Moutai&rsquo;s share price.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;should rise at a slower pace&hellip;short-term speculation in Kweichow Moutai shares will hurt value investing and long-term investment will deliver best returns.</p> </blockquote> <p><img height="331" src="" width="600" /></p> <p>&nbsp;</p> <p>Perhaps investors like Wang don&rsquo;t want to listen&hellip;that&rsquo;s certainly the case of some mainland investors. After China announced the crackdown last Friday on shadow banking and its $15 trillion asset management products, <a href="">Bloomberg</a> reports that Chinese citizens don&rsquo;t believe that guaranteed returns which have underpinned the $4 trillion wealth management products (WMP) Ponzi sector will come to an end.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>But for Yolanda Yuan and other individual investors who&rsquo;ve piled into AMPs issued by banks, insurers and securities firms, the government&rsquo;s announcement was largely a non-event. The reason: they didn&rsquo;t believe it. &ldquo;I don&rsquo;t think any big banks will dare to take the risk of allowing defaults on AMPs, as that will lead to a flood of fund redemptions,&rdquo; said Yuan, a 29-year-old sales manager at a state-run financial company in Shanghai. She has about 100,000 yuan ($15,069) of personal savings in products covered by the new regulations.</p> <p>&nbsp;</p> <p>&ldquo;It&rsquo;s very hard,&rdquo; said David Loevinger, a former China specialist at the U.S. Treasury Department who now works as an analyst at TCW Group Inc. in Los Angeles. &ldquo;You have to show people that there are no longer guarantees. The only way to show it is to force investors to take losses. They have to see it to believe it.&rdquo; Chinese savers have come to depend on the stable returns promised by AMPs, most of which offer fixed rates and mature in less than a year. Bank-issued wealth management products, the biggest slice of the AMP pie, have proven remarkably reliable despite investing in volatile assets from corporate bonds to stocks and real estate. Among the more than 184,400 products that matured in 2016, just 88 suffered a loss, according to the government&rsquo;s annual WMP report.</p> </blockquote> <p>This is our favourite.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Yang Mo, a 30-year-old public relations professional in Beijing, says she has so much faith in implicit guarantees that she doesn&rsquo;t bother paying attention to who&rsquo;s managing her WMPs or what they&rsquo;re investing in. &ldquo;Backstage support will stay in place,&rdquo; said Yang, who has about 100,000 yuan in WMPs. &ldquo;I have never done much research into the WMPs I bought. I don&rsquo;t think they will default.&rdquo;</p> </blockquote> <p>Chinese regulators seem to realise that investors are so engaged in the bull market that they won&rsquo;t listening to warnings&hellip;so they&rsquo;ve just issued another warning. In an article &ldquo;China Fires New Broadside Against Stock Darling Kweichow Moutai&rdquo;, <a href="">Bloomberg</a> reports.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A Chinese campaign about the risks of investing in Kweichow Moutai Co. shares intensified on Monday, with reporting that the Shanghai exchange criticized a brokerage for being too bullish. Essence Securities Co. failed to conduct &ldquo;prudent analysis&rdquo; on Moutai and fully disclose related risks when the brokerage raised its price target on the liquor maker last week, news portal Sina reported late Monday, citing a notice from the bourse.</p> <p>&nbsp;</p> <p>A commentary in the state-run Xinhua News Agency on Thursday said the stock should rise at a slower pace, while the company itself issued a statement saying analysts&rsquo; share price targets and valuations in the market are &ldquo;overly high.&rdquo; Moutai has doubled this year, with Goldman Sachs Group Inc. raising its price estimate on the company 11 times, amid expectations the company could boost profit margins by increasing direct sales.</p> </blockquote> <p><img height="338" src="" width="600" /></p> <p>Which brings us to SocGen, who are very bullish on Asia, even if China is not one of their top picks. In its latest report, &ldquo;The intersection of growth and returns&rdquo;, the bank notes that &ldquo;Asian equities remain a bright spot in equity markets&rdquo; and Global growth continues to surprise on the upside and has reached its highest level since the Great Financial Crisis&rdquo;. Within this dizzy level of optimism, the analysts set out to &ldquo;challenge our bullish bias&rdquo; on Asian equities.&nbsp; However, they begin with a recap.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>We previously wrote that Asia equities had been climbing a wall of worries and were a bright spot in equities markets. We listed a strong dollar, the China Congress (would it be the end of the Xi put?) and rising tensions in the Korea Peninsula as the major risks to our bullish scenario. These risks remain, but we do not see any of these factors durably derailing the Asia equity rally.</p> </blockquote> <p>Mistakenly, in our opinion, SocGen remains sanguine about China and &ldquo;less concerned about regional risk&rdquo; across Asia in general. On China specifically, the analysts downplay the risk from deleveraging.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The 19th China National Congress has consolidated Xi Jinping&rsquo;s power and further defined his policy agenda. Hence the next five years are likely to be a continuity of the past five. This lends an element of predictability to the markets. The most destabilising economic theme in the wake of the Congress is the pursuit of financial deleveraging mostly through regulatory tightening and further macro-prudential measures.</p> <p>&nbsp;</p> <p>There are some specific country risks, however. We believe investor concerns relative to President Xi&rsquo;s ascent are that the Communist Party leads the economy. A command economy proved remarkably efficient in averting a currency crisis in 2016 but for equity investors it raises several concerns (including corporate governance and resource allocation issues). Our thesis is that China equities are unlikely to achieve the very strong returns of the last 12 months. But we do not expect the economy&rsquo;s trajectory to be a destabilising factor for Asia equity markets.</p> </blockquote> <p>What surprised us most is that SocGen believes that a &ldquo;Minsky moment&rdquo; in China would be &ldquo;manageable&rdquo;, when that is something that &quot;Minsky moments&quot; definitely are not.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A Minsky Moment? Excessive debt leading to a Minsky moment is the warning of Zhou Xiaochuan, governor of the PBoC to markets and the second risk that we identify. <strong>The financial pain should be manageable in our view</strong>. The cut in the Required Reserve Ratio to happen in 2018 signals the PBOC&#39;s readiness to mitigate downside risk. For SOEs, lower growth in debt coupled with surging profits has reduced the proportion of debt at risk.</p> </blockquote> <p>So, if we can navigate our way through a &ldquo;Minsky in the Middle Kingdom&rdquo;, what are the challenges to SocGen&rsquo;s bullish bias on Asian equities? The bank states that the biggest risk is US equities and bonds.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>We think the major risk to our bullish scenario on Asia equities does not lie in fundamentals (improving), liquidity (abundant) or politics (stable compared to other parts of the emerging world) but in a possible correction of US assets. Our equity strategy team&rsquo;s take on the S&amp;P 500 is a sideways market view. Although the Fed has removed unconventional monetary policy tools over the last four years, growth has not collapsed and financial assets have not deflated. Earnings have been recovering since the last quarter of 2016 and technology firms, unlike the end of the 1990s, are highly profitable.</p> <p>&nbsp;</p> <p>But history of equity market corrections teaches us that at this level of valuation (the Shiller CAPE is at 31.2x), even a not so remarkable event can trigger a sell-off. This is not only a story of expensive share prices, the US Treasury market is also in expensive territory, the Fed is in tightening mode, global growth is improving and the gap between FOMC median projections (seven hikes by 2019) and market expectations (two) remains quite wide.</p> <p>&nbsp;</p> <p>We therefore need to include US asset downside risks in our Asia investment strategy. If the S&amp;P enters a bear market, we believe Asia equities will not be the place to hide as correlation rises in falling markets.</p> </blockquote> <p>Okay, we agree, US equities and bonds are in a bubble, they could correct sharply at some point and Asian equities will likely underperform&hellip;but that&rsquo;s almost always the case. This is nothing new. To its credit, SocGen crunches some numbers for us on what happens when the S&amp;P 500 declines 20% or more during a 12-month period.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>To get a better sense of how equity markets would react in such an event, we have observed the past 30 years (since the inception of MSCI Asia AC ex Japan index). We look at the daily 1-year rolling returns of the S&amp;P, the Nikkei and MSCI AC Asia-ex Japan. Our observations prompt us to make the following three remarks:</p> <ul> <li>A 20% or more decline in the S&amp;P 500 over a 12-month period is rare. Over the last 30 years, it has only occurred 6.4% of the time.</li> <li>When it has happened, the S&amp;P has outperformed Asia (in 55% of the cases) and Japan (55%). Positive returns are rare in Asia (12% of cases) and have never occurred in Japan.</li> <li>There have been wide divergences between countries and sectors. In summary, Asia tends to outperform Japan and South-East Asia markets tend to outperform North East Asia.</li> </ul> </blockquote> <p><a href=""><img height="274" src="" width="600" /></a></p> <p>SocGen notes the wide divergences among the individual Asian markets.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>There have been wide divergences between countries and sectors. In summary, Asia tends to outperform Japan and South-East Asia markets tend to outperform North East Asia.</p> </blockquote> <p>SocGen&rsquo;s strongest case for Asian equities is probably valuation, where the CAPE ratio remains below average.</p> <p><a href=""><img height="314" src="" width="600" /></a></p> <p>However, the bank also pulls out four actionable themes for investors.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>We see four major themes emerging as a result of the combination of improving fundamentals in Asia and rising concerns over the sustainability of US asset prices.</p> <p>&nbsp;</p> <p><strong>Theme #1</strong>: Protect portfolios. A sharp correction in US equities would translate into an increase in correlation and greater vulnerability for Asia assets. Hence, one of the themes of this Asia Equity outlook is to protect against the re-correlation of markets. We are long ASEAN equities and we like defensive sectors such as HK utilities.</p> <p>&nbsp;</p> <p><strong>Theme #2:</strong> Asia remains a great consumer story. Recent research from Brookings Institution estimates that of the one billion new middle class entrants, 88% will live in Asia. The problem is that valuations in the consumer sector, notably in China have become very high. We look for more reasonably valued themes exposed to Asia consumers. We find them in Japan, Korea and India.</p> <p>&nbsp;</p> <p><strong>Theme #3:</strong> Reduce momentum exposure. Despite global growth recovering, the value style has underperformed momentum. As a result, the valuation gap between momentum and value strategies has widened considerably regardless of upward revisions to the global growth outlook. We reiterate our stance on value themes including China SOEs reforms.</p> <p>&nbsp;</p> <p><strong>Theme #4:</strong> Recovering capex. Investment growth remains a topical theme in Japan given increasingly acute labour shortage issues. In the rest of Asia, the technology cycle is not likely to fade, creating further investment opportunities in the equity space.</p> </blockquote> <p>What the SocGen report didn&rsquo;t focus on was the crucial test which Asian equities are facing as the MSCI Asia Pacific Index is poised to either form a double-top or surpass its previous all-time high in November 2007.</p> <p><a href=""><img height="338" src="" width="600" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1200" height="675" alt="" src="" /> </div> </div> </div> Asia AC Association of Southeast Asian Nations Bear Market Brookings Institution Business China China Congress China National Congress Communist Party Congress default East Asia Economy Equity Markets Finance Financial crisis of 2007–2008 Financial risk fixed goldman sachs Goldman Sachs Hang Seng 40 Hong Kong India Investment Investment strategy Japan Monetary Policy Money MSCI Asia Pacific Nanshan District, Shenzhen Nikkei Nikkei 225 North East Asia People's Bank of China Real estate S&P S&P 500 Shadow Banking SocGen state-run Xinhua News Agency Stock market Tencent Treasury Department U.S. Treasury U.S. TREASURY DEPARTMENT US Federal Reserve Value Investing Yuan Tue, 21 Nov 2017 18:25:48 +0000 Tyler Durden 607650 at Spitznagel Warns "Not All Risk Mitigation Is Created Equal" <p><a href=""><em>Authored by Mark Spitznagel via,</em></a></p> <p><strong>There is a movement today among pension funds toward systemic risk mitigation - or &quot;safe haven&quot; - strategies. </strong>This makes great sense as a potential solution to the widespread underfunding problem. Many pension funds still haven&#39;t fully recovered from the crash of 2008, and can&#39;t afford another. Moreover, truly effective risk mitigation must lead to an incrementally higher long run compound annual growth rate; and a higher CAGR is the way to raise a pension plan&#39;s funding level over time.</p> <p><strong>Just how does risk mitigation raise the CAGR? </strong>Well, it usually doesn&#39;t, on its own. Modern portfolio theory tells us to mitigate risk through diversification, but this tends to lower CAGRs (in the name of higher Sharpe ratios); one is then forced to apply leverage to raise the CAGR back up, which just adds back a different risk by magnifying the portfolio&#39;s sensitivity to errors in one&#39;s spurious correlation estimates. Diversification, unfortunately, is not &quot;the only free lunch in finance&quot; that it has been made out to be. So much risk mitigation is simply about moving from concentration (or typically beta) risk to levered model risk.</p> <p><strong>True risk mitigation shouldn&#39;t require financial engineering and leverage in order to both lower risk and raise CAGRs.</strong> After all, lower risk and higher CAGRs should go hand in hand! It is well known that steep portfolio losses crush long-run CAGRs. It just takes too long to recover from a much lower starting point: lose 50% and you need to make 100% to get back to even. I call this cost that transforms, in this case, a portfolio&#39;s +25% average arithmetic return into a 0% CAGR (and hence leaves the portfolio with zero profit)<u><em><strong> the &quot;volatility tax:&quot; it is a hidden, deceptive fee levied on investors by the negative compounding of the markets&#39; swings.</strong></em></u> (The destructiveness of the volatility tax to a portfolio explains in a nutshell Warren Buffett&#39;s cardinal rule &mdash; &quot;don&#39;t lose money.&quot;).</p> <p>Achieving higher sustained CAGRs through volatility tax savings is the name of the game in risk mitigation. All such strategies aim to do it, but not all are created equal.<strong> They all ultimately require a trade-off between the degree of loss protection provided vs. the degree of opportunity cost paid by the allocation of capital to that protection rather than to the rest of the portfolio.</strong> These are the two sides of the safe-haven coin, and we can only measure each side vis-à-vis the other. Evaluating the trade-off is tricky, and is fraught with mathematical mistakes, as the effect on the volatility tax is often indirect or invisible. The best risk mitigation solution can be a counterintuitive one.</p> <p>We will thus focus only on a straightforward criterion: higher portfolio-level compound annual growth rates from lower risk (or specifically from paying less volatility tax). <strong>We will use this criterion to evaluate cartoon versions of the three canonical prototypes of safe-haven strategies out there, where each exhibits a very distinct protection-cost trade-off.</strong> They are depicted in Figure 1.</p> <p><a href=""><img height="427" src="" width="600" /></a></p> <p>Each of the three prototypes has its simple dynamics bucketed by four corresponding ranges of annual total returns in the Standard &amp; Poor&#39;s 500 index (a natural proxy for the systemic risk we&#39;re trying to mitigate). Think of these as contractual contingent payouts, with no noise or counterparty risk.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The &quot;store-of-value&quot; safe haven on the left makes a fixed 2% real return (or annuity) each year, regardless of SPX returns; it provides great diversification, with a zero correlation in a crash. </strong>This might be short-term U.S. Treasuries (being very generous), or even the Swiss franc.</p> <p>&nbsp;</p> <p><strong>The &quot;alpha&quot; safe haven </strong>in the center makes a 20% nominal annual return in the crash bucket (when the SPX is down 15% or more for the year), 10% in the second bucket (when the SPX is down less than 15%), and 5% in the other two buckets; <strong>it provides a nice negative correlation in a crash, and is always positive-carry.</strong> This looks somewhat like the intended performance (and even the historical performance of the best of survivors, at least for a while) of systematic trend-following commodity trading adviser strategies, &quot;contrarian global macro&quot; and &quot;long volatility&quot; strategies (at least perhaps the very best-of survivors, minus their volatility), or even gold.</p> <p>&nbsp;</p> <p><strong>The &quot;insurance&quot; safe haven on the right makes an explosive profit of 900% in the crash bucket, and loses 100% in every other year (whenever the SPX isn&#39;t down by more than 15%); it is highly non-linear or &quot;convex&quot; to crashes (a &quot;9-to-1 longshot&quot;).</strong> This looks a lot like a tail -risk hedging strategy (at least when done right, though most such funds seek profiles much more like the alpha safe haven), and this extreme asymmetry is the touchstone for what I do as a practitioner.</p> </blockquote> <p>Over the past 20 calendar years (an arbitrarily selected round number), the stand-alone average arithmetic returns of this store-of-value, alpha, and insurance payoff profile have been about +4% and precisely +7% and 0%, respectively. (There are two years in the crash bucket, or 10% of the data &mdash; not exactly &quot;black swans.&quot;)</p> <p><u><em><strong>Which of these three strategies would have most effectively mitigated the systemic risk in a portfolio and thus improved its CAGR, historically? </strong></em></u>Let&#39;s see what the empirically correct answer is by testing three portfolios where each strategy was paired with an SPX position. We used a weighting of 90% SPX + 10% safe haven in the first two cases, and 97% SPX + 3% in the insurance case. Changing the 10% allocation sizes would not have materially changed the results, and the much smaller allocation size of the insurance safe haven is due to its extreme convexity. The higher a strategy&#39;s &quot;crash-bang&quot;-for-the-buck, the less capital it requires to move the needle and the more capital is available for the rest of the portfolio, in this case for the SPX. All are rebalanced annually, and of course the insurance allocation is replenished each year that the SPX isn&#39;t down more than 15%.</p> <p><strong><em>Figure 2 depicts historical performance profiles of each hypothetical portfolio over the past 20 calendar years, bucketed again by corresponding annual SPX total returns.</em></strong></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 556px;" /></a></p> <p>The blue bars are the average annual portfolio returns for that bucket, next to the SPX alone in gray, and the line plots are the ranges of annual returns.</p> <p><strong>The portfolio with the store-of-value safe haven showed some, but not much, risk mitigation in the crash bucket,</strong> though the portfolio CAGR was actually lower than SPX alone by 17 basis points.<strong> The opportunity cost of the safe haven versus owning more SPX shows itself quite clearly.</strong></p> <p>The<strong> obvious pick for most would have been the portfolio with the alpha safe haven,</strong> with its 7% average return and impressive negative correlation in the crash bucket. Adding it to the SPX portfolio lowered the arithmetic return of that portfolio, but in turn also raised the CAGR of that portfolio by 18 basis points. It created a modest cost savings on the volatility tax. But that savings was surprisingly low, and the portfolio still realized heavy 20%+ crash losses.</p> <p>How did the insurance safe haven compare, with its meager 0% average return? With only a 3% allocation, the crash bucket SPX losses were almost entirely offset and hence the portfolio CAGR outperformed that of the SPX alone by 67 basis points (almost four times the outperformance of the alpha portfolio). The portfolio saved much of the volatility tax. To put this in perspective, in order for a 3% allocation to a store-of-value strategy to similarly raise the portfolio&#39;s CAGR by 67 basis points, that store-of-value strategy would require a fixed almost 30% nominal annual return (which would of course attract all the capital in the world). <strong><em>Hard to believe that math, and it runs contrary to the common perception of this type of insurance protection as expensive. What at first appears to gratuitously lower the arithmetic return of the portfolio (and drag on the portfolio as a line item in 9 out of 10 years) turns out to be a CAGR boon.</em></strong></p> <p>We can crank up the alpha allocation size further, up to about 30%, and increase that portfolio&#39;s outperformance a bit, but it still never gets anywhere close to the 3% insurance allocation&#39;s level of outperformance. (Moreover, during this time period, the insurance portfolio outperformed both the HFRI hedge fund index and a 60%/40% portfolio of SPX/Treasuries &mdash; including over the past five years and, remarkably, over the majority of the years in frequency.)</p> <p><strong>Importantly, these results are extremely robust to the time period selected,</strong> as they don&#39;t materially change whether testing over the past 10, 20, or even all the way back over the past 100 years (though the alpha strategy&#39;s CAGR outperformance to the SPX completely disappears).</p> <p>A safe haven with zero expected return but very high crash convexity provided the highest incremental impact on the long run CAGR (of the SPX, in this case). <strong>This is the ultimate goal of risk mitigation, and effectively achieving this goal &mdash; through an effective savings in volatility tax &mdash; means achieving an optimal protection-cost trade-off. </strong>This trade-off seems to thus greatly favor maximal convexity. The implications for how pension funds might best approach underfunding problems through risk mitigation are huge.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="255" height="148" alt="" src="" /> </div> </div> </div> Alpha Black Swans Business Compound annual growth rate Convexity Diversification Finance Financial ratios Financial risk modeling fixed Hedge fund Investment Mark Spitznagel Mathematical finance Modern portfolio theory Money S&P 500 Swiss Franc Technical analysis Volatility Volatility Warren Buffett Tue, 21 Nov 2017 18:03:46 +0000 Tyler Durden 607668 at Journalist Sara Carter Slams DOJ Attempt To Discredit FBI Informant And Stonewall Uranium One Investigation <p><em>Submitted by <a href=""></a></em></p> <p>Several weeks ago a bombshell report by John Solomon and Alison Spann of&nbsp;<em><a href="" rel="noopener noreferrer" target="_blank">The Hill</a></em>&nbsp;revealed that an undercover FBI informant embedded deep within the Russian nuclear industry had uncovered evidence as early as the fall of 2009 of a massive&nbsp;plot by Russia to corner the American Uranium market. Evidence of the scheme was in the hands of the FBI an entire year before the Obama administration approved the sale of Uranium One to Russia&rsquo;s state-owned Energy giant, Rosatom &ndash; which has since <strong>been&nbsp;exporting &lsquo;yellowcake&rsquo; uranium to Canada, Europe and elsewhere&nbsp;<a href="" rel="noopener noreferrer" target="_blank">via a Kentuky&nbsp;trucking firm</a>.</strong></p> <p><a href=""><img height="135" src="" style="float: right; margin-left: 10px; margin-right: 10px;" width="225" /></a>Based on what the FBI knew &ndash; including evidence which purportedly includes a video of Russians preparing&nbsp;<em><a href="" rel="noopener noreferrer" target="_blank">briefcases of bribe money</a></em>&nbsp;&ndash;&nbsp;<strong>the deal never should have gone through. </strong>Moreover, both Robert Mueller and current deputy Attorney General Rod Rosenstein were directly involved &ndash; and current Attorney General Jeff Sessions and other Justice Department officials appear to be covering for them.</p> <p><u><strong>Mueller&rsquo;s FBI knew&hellip;</strong></u></p> <p>Key among the troubling revelations from&nbsp;The Hill&nbsp;is&nbsp;the undercover informant&rsquo;s claim that&nbsp;<strong>Obama&rsquo;s FBI, headed at the time by director&nbsp;<a href="">Robert Mueller</a>,&nbsp;knew that &ldquo;Russian nuclear officials had routed millions of dollars to the U.S. designed to benefit former President&nbsp;Bill Clinton&rsquo;s charitable foundation during the time Secretary of State&nbsp;Hillary Clinton&nbsp;served on a government body&nbsp;that provided a favorable decision to Moscow</strong>&rdquo;&nbsp;&ndash; a deal which would eventually grant the Kremlin control over&nbsp;<strong>20 percent of America&rsquo;s uranium supply</strong>,&nbsp;as detailed by author Peter Schweitzer&rsquo;s book&nbsp;<a href="" rel="noopener noreferrer" target="_blank">Clinton Cash</a>&nbsp;and the&nbsp;<a href="" rel="noopener noreferrer" target="_blank">New York Times</a>&nbsp;in 2015.</p> <p>The FBI mole&nbsp;also gathered extensive evidence that&nbsp;<strong>Moscow had compromised an American uranium trucking firm, Transport Logistics International (TLI) in violation of the Foreign Corrupt Practices Act&nbsp;</strong>&ndash; engaging in a scheme of bribes and kickbacks involving the company which would have&nbsp;transported the U.S. uranium sold to Russia in the &rsquo;20 percent&rsquo; deal.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;<strong>The Russians were compromising American contractors in the nuclear industry with kickbacks and extortion threats, all of which raised legitimate national security concerns.&nbsp;And&nbsp;none of that evidence got aired before the Obama administration made those decisions</strong>,&rdquo; a person who worked on the case told The Hill, speaking on condition of anonymity for fear of retribution by U.S. or Russian officials.&quot; </em>&ndash;<a href="" rel="noopener noreferrer" target="_blank">The Hill</a></p> </blockquote> <p>In short,&nbsp;<strong>the FBI had ample evidence of the Russian plot&nbsp;before&nbsp;the Obama administration approved the Uranium One deal.</strong></p> <p><u><strong>Iron-Clad Gag Order Lifted</strong></u></p> <p>The FBI informant &ndash; outed five days ago as energy consultant William Campbell&nbsp;-was &ldquo;<a href="" rel="noopener noreferrer" target="_blank">threatened</a>&rdquo; by Obama admin AG Loretta Lynch to keep quiet, according to his attorney &ndash; former Reagan Justice Dept. official and former Chief Counsel to the Senate Intelligence Committee Victoria Toensing. After Senate Judiciary Committee Chairman Chuck Grassley (R-VA) demanded Campbell be allowed to testify in front of Congress, the gag order was lifted.</p> <p><strong>Sessions And The DOJ are running Interference</strong></p> <p><a href=""><img height="151" src="" style="float: right; margin-left: 10px; margin-right: 10px;" width="227" /></a>In a move which can only be interpreted as an effort to protect the&nbsp;FBI, the Obama administration and the Clintons,&nbsp;<strong>AG Jeff Sessions and several Justice Dept. officials have been casting&nbsp;doubt on the value of Campbell&rsquo;s&nbsp;evidence, along with the need for a Special Counsel to investigate.</strong></p> <p>Via John Solomon of&nbsp;<em><a href="" rel="noopener noreferrer" target="_blank">The Hill</a>:&nbsp;</em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;both Attorney General&nbsp;Jeff Sessions&nbsp;in testimony last week and Deputy Attorney General Rod Rosenstein in a letter to the Senate last month&nbsp;tried to suggest there was no connection between Uranium One and the nuclear bribery case.Their argument was that the criminal charges weren&rsquo;t filed until 2014, while the Committee of Foreign Investment in the United States (CFIUS) approval of the Uranium One sale occurred in October 2010.&rdquo;</p> </blockquote> <p><strong>This is, allegedly, a lie which has rubbed several Congressional republicans the wrong way:</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>Attorney General Sessions seemed to say that the bribery, racketeering and money laundering offenses involving Tenex&rsquo;s Vadim Mikerin occurred after the approval of the Uranium One deal by the Obama administration. But we know that the FBI&rsquo;s confidential informant was actively compiling incriminating evidence as far back as 2009</strong>,&rdquo;&nbsp;Rep. Ron DeSantis, (R-Fla.) told The Hill.</p> <p>&nbsp;</p> <p>&ldquo;It is&nbsp;<strong>hard to fathom how such a transaction could have been approved without the existence of the underlying corruption being disclosed</strong>.&nbsp;I hope AG Sessions gets briefed about the CI and gives the Uranium One case the scrutiny it deserves,&rdquo; added DeSantis, whose House Oversight and Government Reform subcommittees is one of the investigating panels.</p> <p>&nbsp;</p> <p>Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) sent a similar rebuke last week to Rosenstein, saying the deputy attorney general&rsquo;s first response to the committee &ldquo;largely missed the point&rdquo; of the congressional investigations.</p> <p>&nbsp;</p> <p><strong>&ldquo;The essential question is whether the Obama Justice Department provided notice of the criminal activity of certain officials before the CFIUS approval of the Uranium One deal and other government decisions that enabled the Russians to trade nuclear materials in the U.S</strong>,&rdquo;&nbsp;Grassley scolded.&quot;</p> </blockquote> <p><strong><a href=""><img height="132" src="" style="float: right; margin-left: 10px; margin-right: 10px;" width="182" /></a>Meanwhile,</strong> John Solomon and journalist Sara Carter&nbsp;<strong>have copies of the FBI informant&rsquo;s evidence</strong>, and Carter just annihilated&nbsp;the DOJ in an&nbsp;<a href="" rel="noopener noreferrer" target="_blank">explosive report</a>&nbsp;laying out the players, the timeline, and the evidence at hand.</p> <p><strong>&ldquo;By the time the sale of Uranium One was approved by the Obama Administration, the FBI&rsquo;s investigators had already gathered substantial evidence and the bureau was also aware of Russia&rsquo;s intentions to enter the U.S. energy market and its desire to purchase a stake in American uranium,</strong>&rdquo; Carter writes.</p> <p><strong>Highlights:&nbsp;</strong></p> <ul> <li>FBI mole William Campbell was a highly valued FBI asset - paid $51,000 by FBI officials at a celebration dinner in Chrystal City, VA, where Campbell&#39;s attorney says they thanked him for his service.</li> <li>Campbell&nbsp;<strong>was required by the Russians, under threat, to launder large sums of money -&nbsp;which allowed the FBI to uncover a&nbsp;massive Russian &quot;nuclear money laundering apparatus</strong>&quot;</li> <li>Campbell collected over 5,000 documents and briefs over a six year period</li> <li>Campbell uncovered a Russian plot to penetrate the Obama administration and gain approval for the Uranium One sale, including a 2010 email which describes&nbsp;&quot;<strong>Russia&#39;s intent on expanding&nbsp;its Uranium&nbsp;expansion in the United States.&quot;&nbsp;</strong></li> </ul> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><div>&nbsp;</div> <p><em>&ldquo;The attached article is of interest as I believe it highlights the ongoing resolve in Russia to gradually and systematically acquire and control global energy resources,&rdquo; said Fisk,&nbsp;who titled the subject line of the email &lsquo;Russian uranium.&rsquo;&nbsp;&nbsp;The article attached to Fisk&rsquo;s email, was a Reuters report in June, 2010, titled&nbsp;&lsquo;Despite price falls, ARMZ confident of Uranium One shareholder approval. -<a href="" rel="noopener noreferrer" target="_blank">Sara Carter</a></em></p> </blockquote> <p>&ldquo;<strong>This is not just about bribery and kickbacks but about a U.S. company that was transporting yellow-cake for the Russians with our approval</strong>,&rdquo; an unnamed U.S. Intelligence official told Carter, adding &ldquo;<strong>This should raise serious questions</strong>.&nbsp;At the time everyone was concerned about Russia&rsquo;s ties to Iran, we still are. And of course, Russia&rsquo;s intentions and reach into the U.S. energy market.&rdquo;</p> <p><strong>And after all of that, </strong>Attorney General Jeff Sessions doesn&rsquo;t think there&nbsp;is&nbsp;&ldquo;enough basis&rdquo; to appoint a second Special Counsel to investigate the Uranium One deal.</p> <p>Moreover, Carter reports that &ldquo;<strong>several Justice Department officials, who formerly commended Campbell, have spoken on background to other news agencies disparaging Campbell and his work at that time&rdquo; </strong>&ndash; despite the FBI&rsquo;s glowing review and $51,000 check.</p> <p><strong>Carter writes:</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;In a story by Michael Isikoff, published on Yahoo,&nbsp;a <strong>DOJ official involved in the case stated that Campbell was a &ldquo;disaster&rdquo; as a potential witness and that &ldquo;there was no question that Campbell&rsquo;s credibility was such that the prosecutors had to restructure the case</strong>,&rdquo;&nbsp;the source said.&ldquo;He got cut out of the case entirely.&rdquo; It is important to note that Campbell was going through 35 intense radiation treatments after being diagnosed with cancer during his time with the FBI, according to hospital records.</p> <p>&nbsp;</p> <p>After years of effective reporting and working in harms way, the cancer diagnosis and treatment had a profound effect on Campbell&rsquo;s ability to interact with in the final stages prior to the indictments, &nbsp;said Toensing.</p> <p>&nbsp;</p> <p><strong>She said her client is ready to present Congress with all he knows and called the stories a &ldquo;smear job.&rdquo; </strong></p> <p>&nbsp;</p> <p><strong>&ldquo;This is what the left do-provide false talking points to compromised reporters who are willing to regurgitate whatever they are fed,&rdquo; </strong>said Toensing.&quot;</p> </blockquote> <p>Keep in mind &ndash;&nbsp;all it took for Rod Rosenstein to establish Mueller&rsquo;s Special Counsel on Russian influence was a&nbsp;<a href="" rel="noopener noreferrer" target="_blank">dubious</a>&nbsp;Russian hacking report by a discredited DNC-linked security firm and a hearsay memo from former FBI director James Comey, stating that President Trump asked him to go easy on former National Security Advisor Mike Flynn.</p> <p>If the DOJ continues to stonewall the Uranium One investigation and Campbell&rsquo;s testimony is given the runaround, one has to wonder if any of the 5,000 documents &ndash; or even the Russian bribe video &ndash; will mysteriously appear in the public domain for the world to see.</p> <p><em>Follow on Twitter @<a href="">ZeroPointNow</a></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="300" height="169" alt="" src="" /> </div> </div> </div> Committee of Foreign Investment Committee on Foreign Investment in the United States Congress Corruption Department of Justice DOJ FBI Federal Bureau of Investigation Federal Bureau of Investigation Iran Jeff Sessions Judiciary Committee national security New York Times None Obama Administration Obama administration Racketeering radiation Reuters Rod Rosenstein Rosatom Russian interference in the 2016 United States elections Senate Senate Intelligence Committee Testimony Twitter Twitter U.S. intelligence United States United States Department of Justice United States intelligence agencies Uranium Uranium Uranium One Tue, 21 Nov 2017 17:52:42 +0000 Tyler Durden 607654 at Charlie Rose Terminated By CBS News, Effective Immediately <p>CBS has terminated Charlie Rose, effective immediately, after eight women accused him of sexual misconduct. </p> <p>In a memo, CBS said that "Despite Charlie's important journalist contribution to our news division, there is absolutely nothing more important, in this or any organization, than ensuring a safe, professional workplace—a supportive environment where people feel they can do their best work. We need to be such a place." </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">BREAK: CBS has fired Charlie Rose. Memo that just went out to CBS News staffers <a href=""></a></p> <p>— John Koblin (@koblin) <a href="">November 21, 2017</a></p></blockquote> <script src=""></script><p>On Monday night, the Washington Post reported that eight woman accused Rose of sexual misconduct. </p> <p>The CBS “This Morning” co-host had been accused of making unwanted sexual advances that ranged from walking around naked in front of women who worked for him, making lewd suggestions during phone calls, and groping their breasts, butt or genital areas. </p> <p>Overnight Charlie Rose released a statement in which he apologized "deeply" and said he had learned a great deal as a result of these events, although he countered that he did not believe "all of the accusations were accurate."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">My statement in full. <a href=""></a></p> <p>— Charlie Rose (@charlierose) <a href="">November 20, 2017</a></p></blockquote> <script src=""></script><p>Some were surprised by Charlie Rose's sudden and dramatic fall from grace; some were not...</p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">Not sure why everyone is surprised by Charlie Rose, the man is a human roofie</p> <p>&mdash; David Burge (@iowahawkblog) <a href="">November 21, 2017</a></p></blockquote> <script async src="" charset="utf-8"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="300" height="168" alt="" src="" /> </div> </div> </div> CBS Charlie Charlie Rose Fuji News Network Rose Tyler Television Television in the United States Twitter Twitter Tue, 21 Nov 2017 17:43:42 +0000 Tyler Durden 607684 at US Airstrike In Somalia Kills More Than 100 al-Shabab Militants <p>More than 100 al-Shabaab militants were killed Tuesday in the latest US airstrike in Somalia the Pentagon announced, the latest in a series of strikes against the al Qaeda affiliated group and ISIS fighters in the war-torn country meant to support the local government. The strike occurred 125 miles northwest of the capital of Mogadishu, and was the 29th such strike since the start of 2017, and 7th since November 9.</p> <p>The Pentagon released the following statement commemorating the latest airstrike:&nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>U.S. Conducts Airstrike in Support of the Federal Government of Somalia</strong></p> <p>&nbsp;</p> <p>In coordination with the Federal Government of Somalia, U.S. forces conducted an airstrike in Somalia against an al-Shabaab camp on Tuesday, Nov. 21 at approximately 10:30 a.m. local Somalia time, killing more than 100 militants. The operation occurred 125 miles northwest of the capital, Mogadishu. </p> <p>&nbsp;</p> <p>Al-Shabaab has pledged allegiance to al-Qaeda and is dedicated to providing safe haven for terrorist attacks throughout the world. Al-Shabaab has publicly committed to planning and conducting attacks against the U.S. and our partners in the region. </p> <p>&nbsp;</p> <p>U.S. forces will continue to use all authorized and appropriate measures to protect Americans and to disable terrorist threats. This includes partnering with AMISOM and Somali National Security Forces (SNSF); targeting terrorists, their training camps and safe havens throughout Somalia, the region and around the world. </p> <p>&nbsp;</p> <p>Our political and security goals in Somalia are the same: a reconstituted Somali state at peace internally and able to address all threats within its territory.</p> </blockquote> <p>As we <a href="">reported yesterday</a>, the Defense Department has deployed more than 500 personnel in Somalia including military, civilians and contractors, more than double the 200 personnel that had been reported to be in Somalia in March 2017, according to US Africa Command which oversees US forces on the continent. The personnel are part of the effort to support African forces fighting al-Shabaab as well as ISIS forces there. While estimates have fluctuated over time, the US now estimates there are between 3,000 and 6,000 al-Shabaab fighters and less than 250 ISIS operatives in Somalia. </p> <p>US troops have primarily operated in Somalia to provide training and assistance for local forces, according to CNN, but US special operations forces also continue to rotate in and out of Somalia, conducting counter terrorism operations according to defense officials.</p> <p><strong>Early November saw a decided uptick in US airstrikes in Somalia. </strong>Africa Command and the Pentagon insist the series of airstrikes are simply due to the ability to identify targets and not as a direct result of a number of recent massive deadly suicide attacks in the Somali capital of Mogadishu, including a double truck bomb attack in October that killed hundreds. </p> <p>"We've always stressed the importance of putting pressure on the network," said Samantha Reho, an Africa Command spokesperson. "The opportunities presented themselves with the right conditions and are purely coincidence." </p> <p>The increase in strikes in Somalia as well as Libya and Yemen, is driven by the intelligence that is gathered, according to officials: "I think as we constantly assess the battle space, when targets present themselves that are actionable and within the law of armed conflict, we're going to strike those targets," Lt. Gen. Kenneth McKenzie, director of the Joint Staff told reporters. </p> <p><strong>There have been 29 strikes acknowledged by the Pentagon so far this year. Seven of those strikes took place between November 9 and 14.</strong> </p> <ul> <li>November 9, killing several militants, 100 miles west of the capital of Mogadishu.</li> <li>November 10 in the Lower Shabelle Region of Somalia, about 20 miles north of Mogadishu, killing several militants.</li> <li>November 11 near Gaduud, about 250 miles southwest of the capital, Mogadishu. Prior to the strike, US forces observed the al-Shabaab combatant participating in attacks on a U.S. and Somali convoy. US forces subsequently conducted the strike under collective self-defense authorities.</li> <li>November 12 there were two separate airstrikes against al-Shabaab and ISIS, killing several terrorists. The first was against al Shabaab in the Lower Shabelle region, the second against ISIS in Puntland.</li> <li>November 13, there was another airstrike 250 miles southwest of Mogadishu when al Shabaab fighters posed a threat to a Somali led counterterrorism operation.</li> <li>November 14 strike against al Shabaab about 60 miles northwest of Mogadishu.</li> </ul> <p>The strikes have been "made possible" by President Donald Trump's decision in April to grant new authorities to the commander of Africa Command. The new authorities gave the Africa Command commander the ability to carry out "precision airstrikes" in support of African Union and Somali troops fighting terrorists in Somalia. Previously, strikes could only be conducted in self-defense of US forces.</p> <p>Separately, the US military also carried out two drone strikes in Libya on Friday and Sunday, targeting ISIS fighters in near Fuqaha, Libya, multiple US officials told CNN.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="302" height="167" alt="" src="" /> </div> </div> </div> African Union African Union Mission to Somalia al-Qaeda Al-Shabaab al-Shabaab AMISOM Department of Defense Factions in the Somali Civil War federal government Federal Government of Somalia Irregular military ISIS Military national security Pentagon Politics Somali Armed Forces Somali National Security Forces Somalia Somalia Somalia including military U.S. Africa Command US military War War in Somalia War on Terror Tue, 21 Nov 2017 17:29:28 +0000 Tyler Durden 607682 at BTFGGC!? <p>Because nothing says BTFD like a good government crisis...</p> <p>The DAX is up almost 3% from the Sunday night post-coalition-fail lows...</p> <p><a href=""><img height="321" src="" width="600" /></a></p> <p>&nbsp;</p> <p>But EURUSD is at those lows...</p> <p><a href=""><img height="317" src="" width="600" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="957" height="506" alt="" src="" /> </div> </div> </div> Dax DAX 30 Politics Tue, 21 Nov 2017 17:28:38 +0000 Tyler Durden 607683 at FCC Unveils Plan To Roll Back Net Neutrality Rules <p>The Trump administration has just set in motion a plan to repeal virtually all of the U.S. government’s existing net neutrality rules — a move that could soon deliver a major deregulatory win to telecom/cable giants like AT&amp;T, Charter, Comcast and Verizon.&nbsp; Ironically, the move comes just as another Trump administration department, the DOJ, seems intent upon delivering a massive blow to AT&amp;T's efforts to acquire Time Warner. </p> <p>According to a <a href="">statement from FCC Chair Ajit Pai</a>, the move is intended to return the internet to the "light-touch regulatory approach established by President Clinton and a Republican Congress."</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>“For almost twenty years, the Internet thrived under the light-touch regulatory approach established by President Clinton and a Republican Congress.</strong> This bipartisan framework led the private sector to invest $1.5 trillion building communications networks throughout the United States. And it gave us an Internet economy that became the envy of the world."</p> <p>&nbsp;</p> <p><strong>“But in 2015, the prior FCC bowed to pressure from President Obama. On a party-line vote, it imposed heavy-handed, utility-style regulations upon the Internet. That decision was a mistake.</strong> It’s depressed investment in building and expanding broadband networks and deterred innovation."</p> <p>&nbsp;</p> <p>“Today, I have shared with my colleagues a draft order that would abandon this failed approach and return to the longstanding consensus that served consumers well for decades. Under my proposal, the federal government will stop micromanaging the Internet. Instead, the FCC would simply require Internet service providers to be transparent about their practices so that consumers can buy the service plan that’s best for them and entrepreneurs and other small businesses can have the technical information they need to innovate."</p> <p>&nbsp;</p> <p>“Additionally, as a result of my proposal, the Federal Trade Commission will once again be able to police ISPs, protect consumers, and promote competition, just as it did before 2015. Notably, my proposal will put the federal government’s most experienced privacy cop, the FTC, back on the beat to protect consumers’ online privacy."</p> </blockquote> <p><img src="" alt="Pai" width="600" height="340" /></p> <p>Of course, as <a href="">Recode </a>points out, Obama's net neutrality rules were celebrated by websites and content providers who could be subjected to throttling by telecom and cable companies who own distribution networks.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Adopted in 2015 under former President Barack Obama, the U.S. government’s current approach to net neutrality subjects the likes of AT&amp;T, Comcast, Charter and Verizon to utility-like regulation. <strong>That legal foundation prevents them from blocking or throttling web pages, while banning content-delivery deals known as paid prioritization</strong>. And it grants the FCC wide legal range to review virtually any online practice it deems harmful to consumers.</p> <p>&nbsp;</p> <p><strong>Such strong rules always have been popular in Silicon Valley, where startups in particular fear they could not compete without tough net neutrality safeguards.</strong> But they long have drawn sharp opposition from the telecom industry, which sued the FCC in 2015 in a bid to overturn them.</p> <p>&nbsp;</p> <p>Before that case could come to its conclusion, however, Trump entered the White House, ushering in a new era of Republican control at the nation’s telecom agency. And Pai, a fervent opponent of utility-like regulation of net neutrality, set about undoing the Obama-era rules almost as soon as he took over the FCC.</p> </blockquote> <p>Pai said his full proposal will be released for public review tomorrow and will be voted on by the FCC on December 14th.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="694" height="393" alt="" src="" /> </div> </div> </div> Ajit V. Pai Barack Obama Broadband broadband Comcast Comcast Communication Congress DOJ Economy of the United States Federal Communications Commission Federal Communications Commission federal government Federal Trade Commission Government Internet access Internet service provider Net neutrality Politics President Obama Technology Time Warner Trump Administration US government Verizon Verizon Communications Video on demand White House White House Tue, 21 Nov 2017 17:11:25 +0000 Tyler Durden 607680 at