Krebs Daily Briefing 16 February 2016

International

Four U.S. journalists detained in Bahrain: journalists group

A U.S. journalist and three members of her camera crew were detained in Bahrain on Sunday, Reporters Without Borders said on Monday, urging Bahrain to release the four American citizens “rapidly and without harm.” In a statement, the group described Anna Day and her three colleagues as experienced journalists, who had most recently worked on virtual reality documentaries in Egypt and Gaza. Bahraini police said earlier they had detained four foreign nationals. Bahrain’s interior ministry said in a statement the four were “suspected of offences including entering Bahrain illegally having submitted false information to border staff, and participating in an unlawful gathering.” The U.S. State Department said it was aware of reports that U.S. citizens had been arrested but declined further comment. A representative for Day’s family rejected any suggestion that the four were involved in any illegal behavior or non-journalistic activities. The Arabic-language Mira’at al-Bahrain (Bahrain Mirror) said the four were detained in Sitra, a Shi’ite village east of Manama, on Sunday while covering clashes between local demonstrators and security forces. The demonstration was meant to mark the fifth anniversary of widespread Arab Spring protests in 2011 mainly by Shi’ite Muslims demanding reforms and a bigger share in government. Those protests were put down violently by Bahrain security units with help from security forces from Gulf Arab states, including Saudi Arabia. But the kingdom, where the U.S. Fifth Fleet is based, continues to see bouts of unrest, especially in villages where Shi’ites are a majority. More:

http://www.reuters.com/article/us-bahrain-security-journalists-idUSKCN0VO1QP?feedType=nl&feedName=usmorningdigest

Saudi Arabia, Russia to Freeze Oil Output Near Record Levels

Saudi Arabia and Russia agreed to freeze oil output at near-record levels, the first coordinated move by the world’s two largest producers to counter a slump that has pummeled economies, markets and companies. While the deal is preliminary and doesn’t include Iran, it’s the first significant cooperation between OPEC and non-OPEC producers in 15 years and Saudi Arabia said it’s open to further action. Oil pared gains after the accord was announced, signaling traders see no immediate end to the global supply glut. The deal to fix production at January levels, which includes Qatar and Venezuela, is the “beginning of a process” that could require “other steps to stabilize and improve the market,” Saudi Oil Minister Ali Al-Naimi said in Doha Tuesday after the talks with Russian Energy Minster Alexander Novak. Qatar and Venezuela also agreed to participate, he said. More:

http://www.bloomberg.com/news/articles/2016-02-16/saudi-arabia-and-russia-agree-oil-output-freeze-in-qatar-talks

Uganda Discovered the Zika Virus. And the Solution for It.

KAMPALA, Uganda — The Uganda Virus Research Institute (UVRI) is nestled in a series of rolling hills outside of Entebbe, the town on the banks of Lake Victoria that served as the seat of government during Uganda’s time as a British protectorate. At the institute’s main entrance hang maps from old studies and magnified images of some of the viruses that have been isolated or discovered here, including West Nile virus. But it’s the Zika virus — which has infected tens, if not hundreds, of thousands of people in the Americas in recent months and may be linked to a spate of children born with underdeveloped brains in Brazil — that’s now bringing Ugandan epidemiologists unexpected attention. UVRI scientists first discovered Zika in the blood of a rhesus monkey back in 1947. And while Uganda has never had an outbreak of the virus, the country’s unique approach to monitoring the spread of similar diseases could hold the key to stopping future epidemics in their tracks. Consider how Uganda dealt with the Ebola virus. Long before Ebola made its recent rampage across West Africa infecting more than 28,000 people, Uganda, in eastern Africa, had its own Ebola outbreak — two in fact, in 2012. Led by scientists at UVRI, however, the outbreaks were quickly identified and contained. Only 21 people died as a result — in contrast to more than 11,300 in West Africa in the past two years. “They were prepared for the outbreak,” said Michel Van Herp, an epidemiologist with the emergency medical group Doctors Without Borders. “They had had that kind of training before. They were not naive to those pathogens.” Uganda’s success in containing outbreaks is no accident. It is the product of a long history of cutting-edge infectious disease research, dating back to the founding of UVRI, then under a different name, by the U.S.-based Rockefeller Foundation in 1936 to stem the spread of yellow fever in East Africa. The institute passed into the hands of the East African Community in 1950 and then over to the Ugandan Ministry of Health in 1977, but it has continued to do groundbreaking work. Scientists here have discovered dozens of diseases and pioneered a viral surveillance system that has played a critical role in curbing potential epidemics.

http://foreignpolicy.com/2016/02/10/uganda-discovered-the-zika-virus-and-the-solution-for-it/?utm_content=bufferc9de9&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer

National

Gordon and Bud Did It. Did You? Insider Trading Gets a Rethink

Insider trading used to seem so simple. Pass a tip: “Blue Horseshoe loves Anacott Steel.” Make a killing: “It’s all about the bucks, kid.” And, just maybe, get busted: “At that moment, man finds his character.” That, anyway, is the Hollywood version, circa 1987, in “Wall Street.” On the real Wall Street, insider trading has rarely been that clear. And now, the prickly legal questions around it — questions that have been around since the days of Gordon and Bud — could get even thornier. Almost three decades after the film, and seven years after the start of another dragnet that ensnared dozens, the U.S. Supreme Court is poised to take up the issue in a case involving brothers-in-law. But before that happens, Judge Jed S. Rakoff — who wrote the opinion headed to the Supreme Court — is getting another chance to weigh in. This week, Rakoff, a Manhattan federal court judge, is set to preside over a case that highlights a question that has many traders on edge: Just what is insider trading anyway? The answer might seem simple, but it’s not and never has been. Part of insider trading requires that tippers, or people who pass inside information, get a “benefit.” After a pair of appeals court rulings since December 2014, it’s now unclear what counts as a benefit. Cash? Yes. Career advice. No. But say the tipper and the trader are just brothers-in-law and no money is exchanged. Or roommates who occasionally share secrets. Is that insider trading? That’s what this trial is about. More:

http://www.bloomberg.com/news/articles/2016-02-16/gordon-and-bud-did-it-did-you-insider-trading-gets-a-rethink

Hedge Fund Managers Spot an Opportunity Amid Market Volatility

Stock markets are plunging. The price of oil is in turmoil. And hedge funds just came off their worst year since the peak of the financial crisis in 2008. But Adam Sender, a well-known collector of contemporary art who shuttered his hedge fund two years ago, just got back into the game. He is bucking the trend at a time when the establishment of new hedge funds is sharply lower than a year ago, according to the data provider Preqin. It may seem like an odd time to be landing investments for new hedge funds, but a handful of big-name managers are hauling in money from investors. Scott Bessent recently left George Soros’s family office to start a $4.5 billion firm called Key Square Group. Eric Cole, a former trader for David Tepper’s Appaloosa Management, has raised about $1 billion for his new firm, Warlander Asset Management. Anil Prasad, a former Citigroup foreign exchange trader, raised nearly $300 million with a co-founder for Silver Ridge Asset Management, regulatory filings show. Even John Paulson, who posted losses in several portfolios in 2015, has raised $600 million for a new distressed fund. These new funds stand in contrast to the rising number of hedge funds — in particular those that made wrong bets on foreign currencies, central bank interest rate moves and the price of oil — that are closing their doors to investors and winding down. The pace of hedge fund liquidation picked up in the last quarter of 2015, especially among funds that loaded up on the oil and gas junk bonds that got slammed by the collapse in energy prices. More:

http://www.nytimes.com/2016/02/16/business/dealbook/in-a-turbulent-market-hedge-fund-managers-spot-an-opportunity.html?ref=dealbook&_r=0

Millennial Advice on How to Run a Bank

 

Leading a community bank, especially in the last decade, requires tremendous resilience and fortitude. Managing and motivating staff, ensuring regulatory compliance and boosting revenue and assets are undoubtedly a tough job. I admire CEOs who have preserved shareholder value, while also leading their banks through one of the toughest eras of American banking history. But now that we’re mostly out of the woods, it’s time for bank leaders to address three shortcomings in an industry that continues to change.

Millennials, like me, are well versed in changes in technology. From Nokia brick phones to iPhones, from cassette players to iPods, from slow, dial-up Internet to always having an instant connection to the Web, the world as we know it keeps shifting. We appreciate the never-ending innovation because we have experienced the related benefits time and time again. So as a millennial who champions change, I would like to shed light on three ways I would run your community bank differently.

 

http://www.americanbanker.com/bankthink/millennial-advice-on-how-to-run-a-bank-1079316-1.html?utm_medium=email&ET=americanbanker:e6113888:753823a:&utm_source=newsletter&utm_campaign=abla%20daily%20briefing-feb%2016%202016&st=email&eid=72eb05f9e8cb792e4d4b16a75f64bd0d

 

Technology stocks selloff may turn IPO chill into IPO freeze

This winter was supposed to be Nutanix’s time to shine. The high-tech computing and storage company filed for a hotly anticipated initial public offering in December, ready to woo investors early in the New Year. But so far, Nutanix hasn’t been able to shake the chill of what is shaping up to be a largely barren season for IPOs. And with the battering technology stocks have suffered in the past couple of weeks, and the dismal performance of technology IPOs in the past couple of years, any idea of a springtime busy with technology offerings may also be wishful thinking. Eric Jensen, an IPO attorney for Cooley LLP, said his firm has “a pretty significant pipeline of deals,” with about 32 companies that have filed with regulators for IPOs, either confidentially or publicly. But he said plans by the five or so technology firms with a $1 billion-plus valuation in that queue, “are all stalled out.” For a graphic showing the number and value of U.S. technology IPOs, see here The cratering in technology stocks has also helped to push down the valuations of private tech companies and interest in investing in them, say capital markets experts. Fewer options for capital raising means that high-flying companies may need to rein in spending, delay some ambitious expansion plans and even lay off staff, according to investors and tech consultants. IPO experts also say they expect more startups will get acquired cheaply, and go the way of Good Technology, a mobile security company once valued at $1 billion and last year sold to Blackberry for $425 million. It had planned an IPO but that never got off the ground. “A lot of these companies are going to have to rein in their costs in order to survive,” said Matt Brady, co-founder and chief operating officer of investment firm Militello Capital.

http://www.reuters.com/article/us-ipo-freeze-idUSKCN0VP0FD

Wait Two Years for That $65 Million Gulfstream Personal Jet

Gulfstream Aerospace Corp. says it’s unable to keep up with demand from the rich. Pay $65 million for the G650 or G650ER personal jets, and your wait to board them could be as long as two years, Scott Neal, Gulfstream’s senior vice president of worldwide sales and marketing, said in a Bloomberg TV interview Tuesday at the Singapore Air Show. The G650ER “has taken market share at the top end of the market. It’s really created a new market to itself,” Neal said. “The next available delivery for a new G650 or G650ER is a little over two years from now.” Savannah, Georgia-based Gulfstream is seeing such strong demand for its personal jets from corporations and chief executives that the General Dynamics Corp. unit is looking to increase production of planes in the G650 family, Neal said. Gulfstream is grabbing share from rivals with its flagship large-cabin aircraft as the market becomes more receptive to the usefulness of a private aircraft in running a business. More:

http://www.bloomberg.com/news/articles/2016-02-16/wait-two-years-for-that-65-million-gulfstream-personal-jet

 

Two-Thirds of the US Government Basically Won’t Work for the Next Year

 

Senate Majority Leader Mitch McConnell surprised a lot of people when, less than an hour after the death of Supreme Court Associate Justice Antonin Scalia was announced, he declared that his seat shouldn’t be filled until a new president is sworn in in 2017. That would leave one of the nine seats on the court vacant for a full year or more, assuming even a relatively rapid confirmation of someone nominated immediately by President Obama’s successor. Surprising as it was, McConnell’s willingness to subject the court to a year of frequent 4-4 deadlocks — which could necessitate a re-argument of a case — is just another symptom of the overall dysfunction that virtually guarantees Washington will accomplish little or nothing in the next 12 months. That’s because, of the three branches of the federal government, there are now two that appear likely to be be seriously hobbled until 2017. With the Judicial branch in limbo, Speaker of the House Paul Ryan appeared on Fox News Sunday afternoon and said, in effect, that the Legislative branch isn’t likely to get much done, either. He suggested that no progress is possible on issues including government spending, the national debt and the federal deficit while President Obama is in office. Ryan laid out a five-point GOP agenda that includes, among other things, tax reform, energy development, regulatory reform, entitlement reform, repealing the Affordable Care Act (of course) and strengthening national security. “We don’t think the nation’s heading in the right direction, and we believe we owe it to our fellow citizens to offer an alternative,” he said. “If we had a pro-growth economic policy, there is no doubt in my mind that we could get this economy growing faster, people could get better jobs and get a rise in wages, but for our government. That’s why we’re going to roll an agenda out there and give the country a choice.” Given the broad swathe of policy areas that Ryan wants to address, it’s inconceivable that there aren’t some areas of agreement, or at least principled compromise, where the White House and the Republican-controlled Congress could come together and strike a deal. But Ryan didn’t even suggest the possibility of seeking common ground. Instead, he jumped straight to 2017.

 

https://finance.yahoo.com/news/two-thirds-u-government-basically-140000005.html

Meet the man who can basically read President Obama’s mind

Outside the Oval Office is a small rectangular room with two side-by-side, nondescript wooden desks. In one sits President Obama’s personal secretary. In the other is Brian Mosteller, the man who sweats the small stuff so that the president doesn’t have to. Few have even heard of Mosteller, but if you look closely at photographs taken inside the White House, you can often glimpse him at the edge of the frame, omnipresent. From his chair, he is the only person in the White House with a direct view of the president at his desk. No one gets in the Oval Office without going past him. Mosteller’s official title is director of Oval Office operations, although a more apt name might be anticipator in chief. When Obama is in Washington, every move the president makes, every person he meets and every meeting he attends has been carefully orchestrated by Mosteller. He knows where Obama likes his water glass placed on the table at meetings and whom he’d want to sit beside. He knows how he prefers the height of a lectern. He researches a head of state’s favorite drink so that the president can offer it. He readies Obama’s remarks and sets them, open to the first page, wherever the president will be speaking. He tells Obama when a sock is bunched at his ankle or his shirt is wrinkled, before an interview. The president returned to Illinois last week to commemorate nine years since he announced his long-shot bid for the White House, a history-making moment of proportions few could have known then. There remain just a few people who were there in those early days. More:

https://www.washingtonpost.com/news/inspired-life/wp/2016/02/15/meet-the-man-president-obama-depends-on-to-get-through-his-day/?tid=sm_fb

 

Why Senate Republicans made a big mistake on the Scalia Supreme Court opening

 

Within hours of Supreme Court Justice Antonin Scalia’s death over the weekend, Senate Majority Leader Mitch McConnell drew a line in the sand: No new justice would be confirmed until after the presidential election. “The American people‎ should have a voice in the selection of their next Supreme Court Justice,” McConnell (R-Ky.) said in a statement. “Therefore, this vacancy should not be filled until we have a new president.” The reason for McConnell’s hard line isn’t tough to figure out. It’s the same reason everyone from Ted Cruz to Jeb Bush in the Republican presidential race called for the postponement of any nomination until a new president is elected in November: It’s what the GOP base wants. The Republican base felt very strongly about the importance of judicial nominations before these past few years. But the Supreme Court rulings legalizing same-sex marriage and upholding the Affordable Care Act have convinced conservatives that the court is out of control and needs to be reined in by a Republican president committed to core principles. Given that view, it would be political death for a Republican presidential candidate to advocate that President Obama be given the right to make a pick — and that pick be given a full and fair hearing in front of the Senate. Ditto McConnell, who is regarded as “too establishment” by some tea party types looking to make trouble for him in the Senate. So I get why McConnell said what he said. I just think the way he went about it was a mistake — especially for a party desperately in need of proving to the public that it can be more than the anti-Obama/pro-Donald Trump party. Saying publicly — and on the same day that Scalia died — that replacing the justice was a non-starter, Senate Republicans sent a clear message to the American voters: We aren’t even going to make a show of playing ball on this one. This exchange between “Meet the Press” host Chuck Todd and Cruz on Sunday is telling on that point:

 

https://www.washingtonpost.com/news/the-fix/wp/2016/02/15/why-senate-republicans-made-a-big-mistake-on-the-supreme-court-opening/

How Long Do High Court Vacancies Usually Last?

With a battle brewing between Senate Republicans and the White House, we looked back at past Supreme Court vacancy lengths. This year could be historic. See chart of the last 60 high court vacancies and the time it took to fill them:

 

http://blogs.rollcall.com/news/how-long-do-high-court-vacancies-usually-last/?dcz=

 

At Puerto Rico’s Power Company, a Recipe for Toxic Air, and Debt

 

As a lab director at Puerto Rico’s power authority, Abraham Ortiz uncovered what he suspected was a pattern of lawlessness in the authority’s purchasing department, a secretive place where officials controlled contracts to buy billions of dollars’ worth of oil. For years, he reported to his superiors, the authority bought cheap, residual oil that failed to meet federal clean-air standards, and faked tests to make it look like it had passed. Ledgers were falsified too, he said, to make it appear as though the authority had actually bought the higher-grade oil, which cost more. The higher price was then passed on to consumers. Giving some credence to Mr. Ortiz’s first complaints in the 1990s, the Environmental Protection Agency found that the oil being burned by the authority did, indeed, contain unacceptable levels of sulfur, which rained down in a toxic mix on neighborhoods near the power plants for years.

Where did the warnings get Mr. Ortiz? The utility closed his lab and sent him to work in another department, where he would not have oversight duties for the testing of oil. Now, about 25 years later, Mr. Ortiz is being heard. A committee of the Puerto Rico Senate has been pulling back the curtain on the mysterious purchasing department, the Fuel Procurement Office. And Mr. Ortiz, now retired, has been a star witness. “It was a scheme,” he told the senators last week, “and it went on for years.” The questions about the oil are part of a much larger mandate the Senate has taken on — determining how the authority became mired in more than $9 million in debt it says it cannot pay. The debt troubles could not be more pressing, as the legislature faces a deadline on Tuesday for a vote on the authority’s plan for renegotiating that debt. While it is clear that the authority’s financial downfall is complex and multifaceted, the question of whether it bought dirty oil while billing customers for clean oil stands out as one of the most charged issues it is facing. If true, the accusations would go beyond errors in judgment and amount to a decades-long fraud.

 

http://www.nytimes.com/2016/02/16/business/dealbook/at-puerto-ricos-power-company-a-recipe-for-toxic-air-and-debt.html?ref=dealbook&_r=0

Indian-American judge who could replace Scalia worked on controversial cases for business

One possible contender to replace Justice Antonin Scalia on the U.S. Supreme Court is an Indian-American appeals court judge, Sri Srinivasan, who has pro-business credentials and a stellar resume.

If he was nominated his background may make it more politically challenging for Republicans as they plan to block anyone put forward by President Barack Obama. Srinivasan, 48, has served on the U.S. Court of Appeals for the District of Columbia Circuit since he was confirmed on a 97-0 bipartisan vote in the U.S. Senate in May 2013. Republican senators who supported him then would likely be asked to justify why they couldn’t back him for the Supreme Court. Many names are likely under consideration and the White House has not tipped its hand, but recent Supreme Court appointments have tended to be appeals court judges and the appeals court in Washington on which Srinivasan serves has often been a springboard to the high court. Scalia himself served on the court, as did other Supreme Court members Chief Justice John Roberts, Justice Clarence Thomas and Justice Ruth Bader Ginsburg. The White House said on Sunday that Obama will wait until the U.S. Senate is back in session before making a nomination. The Senate returns from recess on Feb. 22. Republicans have called for Scalia’s seat to remain open so that the next president, who would take office in January 2017, can nominate a replacement. Other judges Obama could consider appointing include Paul Watford, a black man who serves on the 9th U.S. Circuit Court of Appeals, and Jacqueline Nguyen, a Vietnamese-American woman who serves on the same court as Watford. Little is known about Srinivasan’s views on divisive social issues like abortion and affirmative action. But as a senior Justice Department lawyer in 2013, he was part of the legal team that successfully urged the high court to strike down the Defense of Marriage Act, a law that restricted the definition of marriage to heterosexual couples for the purposes of federal benefits. The ruling helped pave the way for the court’s ruling in June 2015 that legalized gay marriage nationwide.

Srinivasan could not be reached for comment. In private practice, prior to his appointment to the appeals court, Srinivasan successfully represented former Enron Corp CEO Jeff Skilling in a Supreme Court case. The Supreme Court narrowed the reach of the so-called honest services fraud law, invalidating one theory used by prosecutors for Skilling’s conspiracy conviction and ordering further appeals court review. Despite the high court ruling, Skilling’s conviction was later upheld by an appeals court. Srinivasan also represented Exxon Mobil Corp in a lawsuit alleging human rights abuses in Indonesia, and mining giant Rio Tinto in a similar case about its activities in Papua New Guinea. Both cases concerned in part whether a law called the Alien Tort Statute allows such cases to be heard in U.S. courts. The Exxon case is still ongoing. The Rio Tinto lawsuit was dismissed. His work during two stints with the O’Melveny and Myers law firm prompted expressions of concern from liberal groups and unions that normally back Democratic judicial nominations when he was nominated to the appeals court in 2012. He has had a lengthy career in public service, serving in the Justice Department during both the Obama and George W. Bush administrations. Under Bush he had a junior role, while under Obama he was a political appointee serving as the top deputy to the solicitor general. Srinivasan was born in Chandigarh, India and grew up in Lawrence, Kansas, where his father was a professor at the University of Kansas. If appointed, he would be the first Indian-American to serve on the Supreme Court. More:

 

http://www.reuters.com/article/usa-scalia-nominee-indian-american-idUSKCN0VO03V

 

Republicans stand down for FBI investigation of Clinton server

Republicans are refusing to use the Benghazi playbook to go after Hillary Clinton’s private email server. Instead of launching formal investigations or propping up a new special committee to investigate the emails — as they did with the 2012 Libya terror attack — House Republicans have gone out of their way to avoid formal inquiries into allegations that classified information was mishandled on Clinton’s personal machine. “We have not had a pinpointed, targeted investigation of Hillary Clinton,” House Oversight Committee Chairman Jason Chaffetz (R-Utah) told The Hill this week. “The FBI’s got the lead on this.” Chaffetz’s comments came after The Hill and other media outlets reported on his committee’s investigation into federal recordkeeping, which is likely to touch on Clinton’s use of a “homebrew” email setup. But Chaffetz said that inquiry is only on the margins of the FBI’s investigation. “Some of the reporting’s kind of been on the extremes on this,” Chaffetz said. Separately, the House Science Committee had appeared to be moving toward in investigation into the private companies involved in the upkeep of Clinton’s server. But leaders of the committee backpedaled this month in response to a subtle public reprimand from the No. 2 House Republican, Rep. Kevin McCarthy (R-Calif.). The almost catholic avoidance of an investigation into the emails appears to be a direct result of the heated politics around Benghazi, and the perception — held by many — that House leadership has spent more than a year of official time to attack Clinton’s presidential prospects. On the campaign trail, Clinton derides any focus on the contentious “homebrew” email setup as a politically driven attack from Republicans. “Before it was emails, it was Benghazi, and the Republicans were stirring up so much controversy about that,” the former secretary of State said during a Democratic presidential debate last weekend. “That was all a political ploy.” Republicans gave Clinton ammunition for those attacks last year, when McCarthy and others publicly suggested that the Benghazi panel was created to tear down Clinton’s campaign. More:

http://thehill.com/policy/cybersecurity/269338-republicans-stand-down-for-fbi-investigation-of-clinton-server

Scalia’s death could doom McDonnell and hurt Menendez

Former Virginia Gov. Bob McDonnell could wind up one of the biggest losers as a result of Justice Antonin Scalia’s unexpected death and the potentially protracted battle shaping up over his replacement. The fall-out could also be felt in other public corruption cases making their way through the courts such as the one against Sen. Robert Menendez (D-N.J.) and in what cases prosecutors choose to bring in the future over politicians’ actions on behalf of their financial backers. The impact could be most acute for McDonnell, who was sentenced to two years in prison after a jury convicted him in 2014 on 11 corruption charges stemming from his and his wife’s relationship with businessman and dietary supplement promoter Jonnie Williams. Last August, McDonnell was perhaps weeks away from being required to report to prison when the Supreme Court stepped in, granting him a stay that remains in effect today. Just one month ago, the high court formally agreed to hear McDonnell’s appeal, which argues that his convictions relied — at least in part — on “routine political courtesies” too commonplace to be considered the kinds of official acts that could support a charge of receiving bribes. Scalia was considered among the most receptive justices to McDonnell’s argument that his conviction on corruption charges improperly relied on the kind of favors that are commonplace on the American political scene. “Scalia was one of the most concerned members of the court about criminalizing politics and the line between what’s allowed and what’s not allowed,” said Rick Hasen, a law professor he University of California at Irvine. “I think his voice would have been a very important one in the McDonnell case.” If the court can’t muster five votes in Scalia’s absence to overturn McDonnell’s conviction, the appeals court ruling upholding his sentence is likely to kick in, and he could be sent to prison. More:

http://www.politico.com/story/2016/02/mcdonnell-menendez-scalia-antonin-supreme-court-219305#ixzz40KsPV0VP

Eight years later, Bill Clinton is causing headaches for his wife again

FLORENCE, S.C. — Halfway through a 40-minute stump speech here, Bill Clinton arrived on the topic of Bernie Sanders’s proposal for single-payer health coverage — and became annoyed. “Every time we try to have a debate on this, they say: ‘You don’t understand. We’re creating a revolution. You’re getting in the way. You’re part of the establishment,’ ” Clinton drawled, with more than a hint of frustration in his voice. “God forbid we should have an honest discussion on it.” Then Clinton changed course again. “That’s not the point I want to make to you,” he said hastily, before refocusing on his principal assignment: delivering a positive message for his wife’s candidacy rather than attacking her opponent. In his post-White House years, Clinton has become a coveted Democratic surrogate. But when it comes to his wife’s campaigns, something else can happen: He seems to lose it. It was true in this crucial nominating state in 2008, where Hillary Clinton lost badly to Barack Obama. And it’s been true this month, when the former president has reemerged as a potent but unpredictable advocate who sometimes helps his wife’s cause — and sometimes doesn’t. More:

https://www.washingtonpost.com/politics/eight-years-later-bill-clinton-is-causing-headaches-for-his-wife-again/2016/02/15/0c01ecc8-d328-11e5-be55-2cc3c1e4b76b_story.html?hpid=hp_hp-top-table-main_billclinton245a%3Ahomepage%2Fstory

State/Local

 

U.S. OK’s Alabama-based factory in Cuba; first since revolution

 

The Obama administration has approved the first U.S. factory in Cuba in more than half a century, allowing a two-man company from Alabama to build a plant assembling as many as 1,000 small tractors a year for sale to private farmers in Cuba. The Treasury Department last week notified partners Horace Clemmons and Saul Berenthal that they can legally build tractors and other heavy equipment in a special economic zone started by the Cuban government to attract foreign investment. Cuban officials already have publicly and enthusiastically endorsed the project. The partners said they expect to be building tractors in Cuba by the first quarter of 2017. “Everybody wants to go to Cuba to sell something and that’s not what we’re trying to do. We’re looking at the problem and how do we help Cuba solve the problems that they consider are the most important problems for them to solve,” Clemmons said. “It’s our belief that in the long run we both win if we do things that are beneficial to both countries.” The $5 million to $10 million plant would be the first significant U.S. business investment on Cuban soil since Fidel Castro took power in 1959 and nationalized billions of dollars of U.S. corporate and private property. That confiscation provoked a U.S. embargo on Cuba that prohibited virtually all forms of commerce and fined non-U.S. companies millions of dollars for doing business with the island. Letting an American tractor company operate inside a Cuban government facility would have been unimaginable before Presidents Barack Obama and Raul Castro declared on Dec. 17, 2014, that they would restore diplomatic relations and move to normalize trade, travel and other aspects of the long-broken bilateral relationship. Since then, Obama has been carving exceptions into the embargo through a series of executive actions, and his administration now says they allow U.S. manufacturing at the Mariel port and special economic zone about 30 miles west of Havana. One exception allows U.S. companies to export products that benefit private and cooperative farmers in Cuba. Berenthal and Clemmons say they will sell only to the private sector. More:

 

http://altoday.com/archives/8671-u-s-oks-alabama-based-factory-in-cuba-first-since-revolution

Coleman’s Testimony Contradicts Affidavit Given to Hubbard

MONTGOMERY—In a hearing before Judge Jacob Walker on October 20, 2015, attorney and radio host Baron Coleman said, “Simply put, I know nothing about the Grand Jury.” He continued, “I didn’t testify in front of the Grand Jury. I didn’t — I have never spoken to a grand juror. I have never spoken to anyone who appeared in front the Grand Jury.” This statement and others were given by Coleman in an attempt to have his subpoena quashed, prior to the first evidentiary hearing on prosecutorial misconduct in the Speaker Mike Hubbard felony case. Later in his testimony, he once again told Judge Walker, “I don’t know anything about a Grand Jury.” SEE TRANSCRIPT In his testimony before the court, Coleman stated twice that he had no knowledge of the Lee County Special Jury, which indicted Hubbard on October 17, 2014, on 23 felony counts of public corruption. However, in an affidavit given to Hubbard’s legal defense team, Coleman claimed he had between 50 and 100 conversations with Matt Hart, Chief of the Special Prosecutions Unit. In his affidavit, Coleman stated, “These conversations were in reference to the Mike Hubbard investigation, and the Lee County Special Grand Jury.” During his testimony in October 2015, Coleman repeatedly told the trial judge that nothing he could tell the court would rise to the standard on prosecutorial misconduct under Nova Scotia. “…Nothing I can testify to is going to fall under the Bank of Nova Scotia standard under any circumstances.” More:

 

http://www.alreporter.com/colemans-testimony-contradicts-affidavit-given-to-hubbard/

 

RUMORS, RUMORS, RUMORS

 

It’s no coincidence that the Goat Hill rumor machine spun into high gear two weeks ago as lawmakers returned to the State House for the 2015 Regular Session of the Alabama Legislature. Needless to say, the ongoing drama involving the criminal case against House Speaker Mike Hubbard was fodder for two of the most interesting rumors churned out last week. The first rumor gained some traction after lawmakers decided to reschedule their traditional Spring Break from March 21 to March 28 – the date Hubbard’s trial is scheduled to begin in Lee County. In its first iteration, the rumor had it that lawmakers were going to try to pass both budgets as quickly as possible and then adjourn the session before March 28 and the start of the trial. Members of the House conceded there was some discussion of an early adjournment, but when members of the Senate were asked, they responded with derision and/or laughter.One senator told IAP that an early adjournment “doesn’t make us look good,” since lawmakers would knock-down their annual salaries in the $46,000 neighborhood, while only meeting for a month and a half. Believers in the early adjournment rumor, noted that the Senate had already begun to take up sunset bills on just the fourth legislative day, as evidence there was a push to early adjournment. Normally, sunset bills are taken up on the tenth legislative day, but as one observer explained, there’s not much else on the Senate calendar early in the session, so the leadership decided to deal with sunset legislation a little earlier than normal. As the rumor of an early adjournment began to die off, a second iteration popped up. It claimed that lawmakers may extend their Spring Break from one-week to three-weeks, beginning March 28, which would allow Speaker Hubbard to attend his trial in Opelika while giving him a break from his role as presiding officer in the House. We’ll wait and see. While members of the House may be more sympathetic to Hubbard’s dilemma, members of the Senate appear much less inclined to accommodate the embattled speaker. And then there’s the second big rumor of the week and it’s a whim-doozy. Multiple sources told IAP that a mock trial was staged in the Hubbard case last December, in an effort by the state to determine how strong its case is against the speaker.  Our sources said that former U.S. Attorney Redding Pitt, who died at his Montgomery home February 7, acted as the prosecutor in the December exercise. As the story goes, the jury in the mock trial took only two-hours to reach a verdict and that verdict was guilty on all 23 counts. We can’t help but to wonder whether or not Matt Hart and company took good notes on just how the late Mr. Pitt presented the case.

 

http://iapnews.com/inside-alabama-politics-volume-31-number-4-february-16-2016/

 

Alabama Legislative Agenda Preview:  Feb. 15-19, 2016

 

The Legislative Session will resume Tuesday, with the House convening at 1 p.m. and the Senate an hour later. Many of the bills which passed through committee last week will likely make it to the floor this week, including the “Uniform Wage and Right-to-Work Act,” which would prohibit cities from raising the minimum wage, and a billproviding for distilleries to sell their product for off-premise consumption.

Further, the House will renew its discussion of HB45, the legislation sponsored by Rep. April Weaver (R-Shelby) to outlaw the sale of fetal tissue, which did not come up for a vote last Thursday. Though a handful of committee meetings will be held prior to the start of session Tuesday, the majority will be held Wednesday. The House Committee on Economic Development and Tourism will meet to tackle a slew of alcohol-related bills, including HB176, which would allow Alabama brewpubs to sell for off-premise consumption. A public hearing on the bill will likely garner a wide array of input. The House Committee on Ethics and Campaign Finance will meet to consider HB68, a bill aimed at preventing “an agency of the Executive Department of the state,” which is funded via the General Fund or the Education Trust Fund, from lobbying or entering into agreements with outside lobbyists. The “Alabama Heritage Protection Act” will again be the topic of discussion when the Senate Governmental Affairs Committee meets on Tuesday to complete a round of public discussion which began last week. The committee will also look at SB184, a bill naming the Lane Cake the official state cake. The Judiciary Committee will meet to examine SB114, a Sen. Paul Sanford (R-Huntsville) sponsored bill aimed at regulating “fantasy contests,” and SB14, a bill from Sen. Gerald Allen (R-Tuscaloosa) stating that the lawful possession of a firearm doesn’t “in and of itself” constitute disorderly conduct.

 

http://altoday.com/archives/8688-alabama-legislative-agenda-preview-feb-15-feb-19-2016

 

Blogs/Opinions

 

Can the South’s Love Affair With a New York Yankee Last?
BATON ROUGE, La. — Some 10,000 fans waited at least an hour in line late last week to fill an arena here along the Mississippi River. And when the star attraction – Donald Trump – entered from behind a blue curtain, the roar was so piercing, the stomping so loud, you would have thought that a LSU player had just hit a game-winning basket. But Trump was here to talk about another kind of winning: his easy-to-grasp, sports-arena portrayal of an America that doesn’t “beat anybody anymore.” First stop, just south of the border. “Who’s going to pay for the wall?” he called out. “Mexico!” the crowd shouted as one.

Fresh off his huge win in New Hampshire, Trump is taking his angry populist message to the South, the next political battleground and a region where recent surveys have him leading by 10 or more points nearly everywhere. But Trump’s somewhat defensive performance in the rancorous GOP debate in South Carolina Saturday night—punctuated by the crowd’s boos, especially over his attacks on President George W. Bush, who is still popular there—could create an opening for his rivals in the South. Jeb Bush, who turned in perhaps his strongest performance yet, is certainly banking on that in the South Carolina primary on Feb. 20, and he can count on the history of that state supporting his father and brother going back 25 years. (“I’m sick and tired of [Trump] going after my family,” Bush said Saturday to cheers.)

Marco Rubio, the senator from Florida, is presenting himself as the candidate who has the foreign policy chops in a region that favors a strong military. John Kasich, the governor of Ohio, is appealing to moderates and is hoping that publicity following his second place finish in New Hampshire will bring the political oxygen his cash-starved campaign needs. Ted Cruz, the Texas senator, handily bested Trump in the Iowa caucuses with an impressive ground game that appeared to open daylight between Trump and the base followers he’s trying to win over—in particular the evangelicals and social conservatives who are so plentiful in the South. That’s why Tony Perkins, a former state legislator from Louisiana who heads the Family Research Council, believes that the Iowa Caucus results promise more of the same for Cruz throughout the South and in Texas, which holds its delegate-rich primary on March 1. Cruz has led polls in Texas. More:

 

http://www.politico.com/magazine/story/2016/02/south-love-affair-louisiana-letter-yankee-213632

 

The Sordidness of Hubbard’s Selfishness

The investigation and pretrial drama of the much-anticipated trial of Speaker Mike Hubbard has proven time and again that the gods of carnage are happily at play in this most operatic tale. One could dare find delight in watching these merry pranksters at work, were the consequences not so dire for our state. Many of the men and women who enabled Hubbard’s rise to power, will also be numbered among those who stirred chaos in an attempt to keep him from facing justice. But they should be aware that he will sacrifice any friend and coddle any foe to avoid trial. The butcher’s bill cannot yet be tallied with any accuracy, as the battle winnows the players with regularity. The slaughter is born forward by the machinations of Hubbard’s political and legal machine. At this moment, Alabama’s justice system itself is under siege, as Hubbard and his allies employ every imaginable argument, as to why his 23 indictments on felony public corruption should be dismissed. Hubbard, the man who promised his Republican colleagues and the citizens of our State, that he would end corruption in State government, has become the epitome of all that is evil in public life. He has manipulated the legislature for personal gain, and now seeks to pervert the legal process to serve his selfish needs. As the State recounted in its recent motion, “Hubbard has filed several motions to dismiss for 14 months now. His theories have ranged from improper Grand Jury empanelment to the Grand Jury exceeding its jurisdiction to the expiration of the Grand Jury’s term to selective prosecution to the unconstitutionality of the Alabama Ethics Act. This court has properly denied nearly all of Hubbard’s motions.” Hubbard’s renewal of his motion to dismiss on the grounds of prosecutorial misconduct and fraud, is based on an affidavit written by Baron Coleman. The prosecution stated, “Indeed, just hours after the Court entered an order denying three of Hubbard’s motions to dismiss, Hubbard filed his Renewed Motion to Dismiss for Prosecutorial Misconduct and Fraud…is based entirely on the allegations contained in the Coleman affidavit.” Coleman has said his affidavit did not accuse Deputy Attorney General Matt Hart of prosecutorial misconduct, and prosecutors agree. But it is written in such a manner as to leave the impression he had. Coleman has said he was forced to come forward, but he has yet to explain what force was weighing on him, at least not publicly. More:

http://www.alreporter.com/the-sordidness-of-hubbards-selfishness/

 

Morning Money

WEEKEND POLITICS WRAP — Quite an eventful weekend on the political front with the death of Supreme Court Justice Antonin Scalia and the reemergence of George W. Bush on the campaign trail for his brother in South Carolina. On the SCOTUS front, Republicans are taking a big gamble in saying they will absolutely not confirm — or even consider — any Obama nominee. It’s a no-brainer for 2016 candidates vying for staunch conservative primary voters.

But the GOP has a big pile of seats up in 2016 in states won at least once by Obama including Ohio, New Hampshire, Wisconsin, Illinois, Pennsylvania and Florida. If Obama puts up a consensus nominee, someone like Sri Srinivasan, and Republicans stonewall, things could get even tougher in those swing states and the GOP’s Senate majority could be even more at risk. The theory is that the hardline stance will drive up base voters in the GOP but it will pump up the opposition as well. Dicey play.

In South Carolina on Monday night, George W. Bush took repeated veiled shots at Donald Trump, arguing that the real estate mogul can’t win in November and can’t be trusted in the Oval Office: “We do not need someone in the Oval Office who mirrors and inflames our anger and frustration.”

Will Dubya drive his brother to a South Carolina victory? Probably not. Jeb Bush is at least 20 points behind Trump. But could he help push him up into the top three? Quite possibly. And if Bush trails only Trump and Cruz (who are beating the tar out of each other) he could legitimately argue that he is the establishment’s last best hope heading into Super Tuesday.

YET MORE TREASURY TALK — Nope. Still not over. Per a Wall Streeter on the subject of a Hillary Clinton Treasury Secretary: “On the subject of Laura Tyson — does it hurt her in any way that she has been on the Morgan Stanley Board for the better part of 20 years — including leading up to and during the Financial Crisis? Maybe not — but just asking … ”

LEFT STARTS A PETITION — Via the Progressive Change Campaign Committee, Revolving Door Project, Americans For Financial Reform, Rootstrikers, and Public Citizen’s Congress Watch: “Wall Street influence is a major issue in the 2016 election. One of the most consequential things a president can do is appoint people who have a record of challenging Wall Street power. … As Senator Elizabeth Warren says: Personnel is policy.

“Please give the public some specific examples of people you would consider for key posts that our nation relies on to challenge Wall Street power — including Treasury Secretary, Attorney General, and SEC Chair. And please be transparent about factors you will use when making appointments for these key positions.” http://bit.ly/1Tmo1yx

MORE NAMES — Via a former Treasury official: “Depending on where the economy is they might want a progressive economist – Alan Krueger. He knows Treasury, he knows the Clintons (was Chief Economist at the Dept. of Labor in Clinton Admin.), was CEA Chair and he has been confirmed by both the Finance Committee and the Banking Committee (Treasury Secretary only goes thru Finance). … I strongly agree that Sylvia Mathews Burwell, Sheryl Sandburg, Lael Brainard, Neal Wolin are all great short-listers, but I would add Krueger to the list as well.”

From Tyler Gellasch, of Myrtle Makena, LLC and a former senior Senate aide: “Doesn’t Gary Gensler have to be the clubhouse favorite? It’s hard to argue he’s not extremely qualified or confirmable. He’s had private sector experience, senior roles at Treasury (including undersecretary), and chaired the CFTC. Most progressives still love him from his work at the CFTC, while K Street and Wall Street types know he’s usually pretty reasonable.

“I wouldn’t expect much of a confirmation problem either. In his previous three confirmations, he’s sailed through the Senate twice on voice votes and lost only 6 votes on the third. Oh, and perhaps most importantly, he’s already working for Secretary Clinton’s campaign.”

2016 MADNESS ROCKING STOCK MARKET — WSJ’s Jerry Seib: “Financial markets are in a precarious state, while the underlying U.S. economy looks increasingly shaky. And the presidential campaign appears to be making things worse. Damage is being done on three fronts. The campaign is rewarding candidates who talk down the state of the economy, adding to both consumer and investor jitters.

“It has scared financial markets by making front-runners of the two contenders — Donald Trump and Sen. Bernie Sanders — who offer the most radical economic formulas. And a stilted campaign debate is providing only sketchy discussion of what any of the candidates actually would do on fiscal and tax policy if they win.” http://on.wsj.com/1StiUfD

HOT CLICK: BIG SHORT POD CAST — In this week’s “Off Message” podcast, Glenn Thrush chats with Adam McKay, director of “The Big Short,” nominated for five Oscars including best picture. McKay, the 47 year old best director and best adapted screenplay nominee, discusses the impact of the financial crisis on the 2016 presidential race with Thrush — and traces the candidacies of Donald Trump and Bernie Sanders back to what happened on Wall Street.

McKay weighs in on Sanders’ Democratic primary battle with Hillary Clinton, evaluates the Obama administration’s record on Wall Street prosecutions, and reveals how Elizabeth Warren reacted to the Big Short. Listen to the full interview and get every episode by subscribing to the podcast on iTunes: http://apple.co/20XmGCU Or Soundcloud: http://bit.ly/246tEEP Full story: http://politi.co/1LqLSFx

COULD BLOOMBERG ACTUALLY WIN? — NY mag’s Jonathan Chait: “One reason Bloomberg’s presidential ambitions have always been so comically detached from reality is that he fills a space on the political spectrum that is overserved (socially liberal, fiscally conservative) whereas the actual unmet political demand is just the opposite (socially conservative, fiscally liberal). … But if Trump and Sanders win their nominations, then the opposite would suddenly hold true. Instead of the socially liberal — fiscally conservative set having too much representation, it would suddenly have too little.

“A candidate who is neither a socialist nor a racist would have a large niche. Bloomberg faces a logistical challenge that is perhaps insurmountable: He would need to start getting his name on the ballot in early March, and he’s probably not going to know the major-party nominees by then. He would certainly need Sanders as the Democratic nominee, and probably Trump as the Republican nominee as well, to have a viable constituency. But if he did somehow find that combination awaiting him, the long-clogged lane he occupies in the center might suddenly break open for him.” http://nym.ag/1SQ0KW9

OBAMA SCOTUS SHORT LIST — POLITICO’s Edward-Isaac Dovere: “President Barack Obama has a proven formula for getting big, politically charged nominations through Republicans in the Senate — and close observers say that now points to Sri Srinivasan as his likeliest Supreme Court choice, with Loretta Lynch suddenly lighting up chatter as a potential sleeper candidate. … In thinking about Antonin Scalia’s possible replacement, they look at how Obama won previous confirmations, including the two that Republicans most wanted to stop: Lynch as attorney general and Sylvia Mathews Burwell as Health and Human Services secretary, who each glided through …

“With those and others, Obama picked a nominee who would be a historic first or hail from a politically charged demographic, promoted their work with or, better, for Republicans and pointed out that the Senate had already confirmed the individual for a previous job. … Srinivasan, a judge on the D.C. Circuit Court of Appeals, checks every box — which is why he’d already been considered a shoo-in for the high court if Ruth Bader Ginsburg had stepped down before the end of Obama’s term. But if Srinivasan doesn’t want to sign up for what could be a year in limbo or if Obama decides to go with the more politically potent choice, well-connected lawyers say Lynch makes almost as much sense” http://politi.co/1okHJ14

FEAR EASES — Reuters: “Asian shares extended their gains on Tuesday as a combination of stabilizing Chinese markets, a rebound in oil prices and solid U.S. consumption data drove investors to look for bargains after last week’s rout. … U.S. retail sales data published on Friday showing firm growth allayed fears – at least for now – that the U.S. economy could be dragged into recession as growth stumbles in many parts of the world. Sentiment on the U.S. currency also improved … Oil prices gained on news of a rare private meeting of top officials from the world’s biggest oil producers spurred speculation of an eventual deal to tackle a deep supply glut” http://reut.rs/1U4LUdk

GOLDMAN: SELL GOLD — Bloomberg: “Goldman Sachs Group Inc. says it’s time to bet against gold as bullion’s rally to the highest level in a year isn’t justified, backing the bearish call with a comment from a former U.S. leader in a report that was issued, appropriately enough, on Presidents’ Day. Prices tumbled. Gold will slump back to $1,100 an ounce in three months and $1,000 an ounce in 12 months, analysts including Jeffrey Currie and Max Layton wrote in the report that was dated Feb. 15 and received on Tuesday.

“It was headlined with a remark from former President Franklin D. Roosevelt. There’s ‘nothing to fear but fear itself,’ the analysts entitled the seven-page note, channeling comments from Roosevelt’s 1933 inauguration when the U.S. economy was being ravaged by the Great Depression. ‘It’s time to sell the fear barometer,’ the bank said, and recommended shorting gold.”

SCOTUS FIGHT WOULD LIGHT UP JUDICIARY — WSJ’s Siobhan Hughes: “Even if the Senate were to consider … Obama’s selection to succeed Antonin Scalia on the Supreme Court, the nominee would first have to confront the polarized politics of the Senate Judiciary Committee. Already the panel’s chairman, Republican Sen. Chuck Grassley of Iowa, has joined Senate Majority Leader Mitch McConnell (R., Ky.) in saying that the next president, not Mr. Obama, should have the right to fill the vacancy … Should Mr. Grassley decided to proceed with a confirmation hearing, the committee’s review would come with a partisan edge.

“The Judiciary Committee is divided over policies on immigration, guns, presidential power and criminal justice. Mr. Grassley, who has never yet held a hearing on a Supreme Court nominee, has an investigative bent, which can translate into prolonged and sometimes divisive requests for information. Many of the committee members are lawyers, and are unabashed about public fights over legal matters” http://on.wsj.com/1okIk2O

ECONOMISTS RIP SANDERS’ PLANS — NYT’s Jackie Calmes: “With his expansive plans to increase the size and role of government, Senator Bernie Sanders has provoked a debate not only with his Democratic rival for president, Hillary Clinton, but also with liberal-leaning economists who share his goals but question his numbers and political realism. The reviews of some of these economists, especially on Mr. Sanders’s health care plans, suggest that Mrs. Clinton could have been too conservative in their debate last week when she said that his agenda in total would increase the size of the federal government by 40 percent. …

“The increase could exceed 50 percent, some experts suggest, based on an analysis by a respected health economist that Mr. Sanders’s single-payer health plan could cost twice what the senator … asserts, and on critics’ belief that his economic assumptions are overly optimistic. … By the reckoning of the left-of-center economists, none of whom are working for Mrs. Clinton, the proposals would add $2 trillion to $3 trillion a year on average to federal spending … ‘The numbers don’t remotely add up,’ said Austan Goolsbee, formerly chairman of President Obama’s Council of Economic Advisers, now at the University of Chicago” http://nyti.ms/1RHvbMG

COMMODITIES POP — FT’s Henry Sanderson and David Sheppard: “Commodities from metals to oil rallied as the People’s Bank of China moved to ease concerns about the country’s currency, triggering a broad rally that lifted stock markets and raw materials. … Nickel, a metal used in stainless steel, rose 6.7 per cent to $8,260 a tonne on Monday on the London Metal Exchange, its biggest move in two months. Iron ore, the steelmaking ingredient, rose $2.40 to $45.60 a tonne. … The commodities bounce came as the renminbi rose the most against the dollar since 2005 following comments by Zhou Xiaochuan, PBoC governor, that ruled out a one-off devaluation. http://on.ft.com/1RHx3F3

TROUBLE FOR HILLARY IN NEVADA? — WP’s David Weigel and John Wagner: “Less than a week before the Nevada caucuses, Hillary Clinton’s political nightmare came to the Origin India restaurant near the Las Vegas Strip. More than 100 activists were packed between a curry buffet and a canvas sign for Bernie Sanders. They talked. They made caucus commitments. They cheered as a ‘multi-ethnic coalition’ of speakers asked them to dump the long-time Democratic presidential front-runner. …

“Until quite recently, Clinton’s campaign saw Nevada as a chance for a face-saving victory after an anticipated defeat in New Hampshire. But that defeat turned into a trouncing. Now, the Sanders campaign is trying to prove that she can be beaten anywhere. Nevada, where he is facing off against organized labor leaders and a Latino-heavy electorate, has become the first test. Clinton’s hopes rested on her overwhelming advantage among voters of color — part of a ‘firewall’ her aides have claimed in many states that follow overwhelmingly white Iowa and New Hampshire on the electoral calendar” http://wapo.st/1RHxgbh

POTUS Events

President Obama today continues to host a summit in Rancho Mirage, California with Southeast Asian leaders. He will hold a press conference at 4:35 PM ET, and I will live stream it on the website. In the evening, Obama will return to Washington.

Floor Action

The House will return on February 23rd. The Senate will return February 22nd.

Announcements

How to Determine if You Can Claim the Premium Tax Credit

The premium tax credit is a credit for certain people who enroll, or whose family member enrolls, in a qualified health plan offered through a Marketplace. Claiming the premium tax credit may increase your refund or lower the amount of tax that you would otherwise owe.

If you did not get advance credit payments in 2015, you can claim the full benefit of the premium tax credit that you are allowed when you file your tax return. You must file Form 8962 to claim the PTC on your tax return.

You can take the PTC for 2015 if you meet all of these conditions.

For at least one month of the year, all of the following were true:

  • An individual in your tax family was enrolled in a qualified health plan offered through the Marketplace.
  • The individual was not eligible for minimum essential coverage, other than coverage in the individual market.
  • The portion of the enrollment premiums for the month for which you are responsible was paid by the due date of your tax return.

To be an applicable taxpayer, you must meet all of the following requirements:

  • For 2015, your household income is at least 100 percent but no more than 400 percent of the Federal poverty line for your family size.
  • No one can claim you as a dependent on a tax return for 2015.
  • If you were married at the end of 2015, you must generally file a joint return. However, filing a separate return from your spouse will not disqualify you from being an applicable taxpayer if you meet certain requirements.

Individuals can use the Premium Tax Credit Flow Chart to determine if they are eligible for the credit. Answer the yes-or-no questions in the chart – or via the accessible text – and follow the arrows to find out if you may be eligible for the premium tax credit. You can also use our interactive tool, Am I eligible to claim the Premium Tax Credit? to find out if you are eligible.

For more information about eligibility requirements see Eligibility for the Premium Tax Credit and also the instructions for Form 8962, Premium Tax Credit on IRS.gov/aca.

If you received the benefit of advance credit payments in 2015, you must file a tax return to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit. You must file an income tax return for this purpose even if you are otherwise not required to file a return. You’ll file Form 8962, Premium Tax Credit, with your tax return to reconcile the credit.

Remember, that filing electronically is the easiest way to file a complete and accurate tax return as the software does the math and guides you through the filing process. Electronic filing options include: free Volunteer Assistance, IRS Free File, commercial software, and professional assistance.

Krebs Daily Briefing 15 February 2016

International

Francis Admonishes Bishops in Mexico to ‘Begin Anew’

MEXICO CITY — In a stinging rebuke to Mexico‘s church hierarchy, Pope Francis on Saturday told bishops that they had lost their way in “gossip” and “intrigue,” and challenged them to “begin anew” and tend to the church’s worshipers. Speaking before rows of solemn bishops in this city’s majestic Metropolitan Cathedral, Francis spared no words as he painted an almost biblical picture of a church seduced by power and money. “Be vigilant so that your vision will not be darkened by the gloomy mist of worldliness; do not allow yourselves to be corrupted by trivial materialism or by the seductive illusion of underhanded agreements; do not place your faith in the ‘chariots and horses’ of today’s pharaohs,” he said. Francis’s sharp criticism came on a morning filled with symbols of temporal and ecclesiastical power, marking a discordant note on the first full day of a trip to Mexico designed to demonstrate his devotion to the powerless. The morning began at the National Palace on the colonial Zócalo, the central square where President Enrique Peña Nieto and other dignitaries greeted Francis with full honors. But the pomp, laid on by politicians jostling for some reflected glory of the pope’s popularity, seemed at odds with a trip that Francis had described as a pilgrimage. More:

http://www.nytimes.com/2016/02/14/world/americas/francis-in-mexico-to-speak-for-the-powerless-is-greeted-with-pomp.html?emc=edit_th_20160214&nl=todaysheadlines&nlid=53476364&_r=0

Tension Simmers as Cubans Breeze Across U.S. Border

LAREDO, Tex. — They are crossing the border here by the hundreds each day, approved to enter the United States in a matter of hours. Part of a fast-rising influx of Cubans, they walk out to a Laredo street and are greeted by volunteers from Cubanos en Libertad, or Cubans in Freedom, who help them arrange travel to their American destination — often Miami — and start applying for work permits and federal benefits like food stamps and Medicaid, available by law to Cubans immediately after their arrival. The friendly reception given the Cubans, an artifact of hostile relations with the Castro government, is a stark contrast with the treatment of Central American families fleeing violence in their countries. And it is creating tensions in this predominantly Mexican-American city, where residents saw how Central American migrants, who came in an influx in 2014, were detained by the Border Patrol and ordered to appear in immigration courts. “The people here are starting to feel resentment,” said Representative Henry Cuellar, Democrat of Texas, whose congressional district includes the city. “They are asking, is it fair that the Cubans get to stay and the Central Americans are being deported?” More:

http://www.nytimes.com/2016/02/13/us/as-cubans-and-central-americans-enter-us-the-welcomes-vary.html?emc=edit_th_20160214&nl=todaysheadlines&nlid=53476364

The Week Ahead: Questions for the E.C.B. Leader, Fed Minutes and Walmart Earnings

The European Central Bank president is expected to answer questions about the eurozone economy. Mario Draghi, the president of the European Central Bank, is likely to face questions on Monday about his response to fears of a renewed banking crisis when he appears in Brussels at a hearing of the European Parliament’s Committee on Economic and Monetary Affairs. Investors will also be listening to Mr. Draghi’s remarks for clues about what steps the central bank may take at its March 10 meeting to further stimulate the slow-growing eurozone economyJack Ewing An attempt to reduce the European Union’s dependence on Russia for natural gas. European Union authorities on Tuesday are expected to make their latest proposals aimed at weakening the bloc’s dependence on Russia for about a third of its natural gas requirements. One of the measures would give the European Commission more scope to review gas supply contracts with foreign suppliers before they are signed. Officials hope that the measures will dissuade member countries like Germany from going ahead with projects like the expansion of the Nord Stream pipeline, which critics say will deepen reliance on Russia for energy. Weaning the bloc off Russian gas has been a priority for the European Commission for the last decade, and the regulator is taking several approaches, including an antitrust case against the Russian gas exporter Gazprom, which has not yet been resolved.—James Kanter More:

http://www.nytimes.com/2016/02/15/business/questions-for-the-ecb-leader-fed-minutes-and-walmart-earnings.html?emc=edit_th_20160215&nl=todaysheadlines&nlid=53476364&_r=0

Obama, Southeast Asia leaders eye China and trade at California summit

U.S. President Barack Obama will press leaders from Southeast Asia to boost trade and back a common stance on the South China Sea during a summit starting on Monday that the White House hopes will solidify U.S. influence in the region. Obama will also discuss efforts to curb North Korea and to fight Islamic State militants during the two-day meeting with Association of Southeast Asian Nations (ASEAN) at Sunnylands, a California resort. The meeting, at the same location where Obama once hosted Chinese President Xi Jinping, is designed to demonstrate Washington’s commitment both as a counterweight to Beijing and as an eager trading partner with ASEAN nations. It also helps cement a legacy issue for Obama, who has championed a trade and foreign policy pivot to Asia during his presidency and is determined to present the United States as a Pacific power. “We want to make very clear that the United States is going to be at the table and a part of setting the agenda in the Asia- Pacific in the decades to come,” White House deputy national security adviser Ben Rhodes told reporters last week. Goals of the two-day gathering include increasing commercial ties, which will be underscored by the presence of a handful of U.S. corporate executives; cooperating on counter-terrorism; and setting principles for maritime security in the region, the White House said. The first day of the summit, which is scheduled to kick off at 3:00 p.m. PST (2300 GMT), will focus on economic issues and trade, including discussion of the Trans-Pacific Partnership deal, which includes four of the ASEAN members: Vietnam, Singapore, Brunei and Malaysia. Others are interested in joining, and the White House wants to make sure the pact goes into effect. More:

http://www.reuters.com/article/us-usa-asean-idUSKCN0VO0GO?feedType=nl&feedName=businessNews

Australia Has Just Busted a Billion Dollars of Meth Hidden in Bra Inserts and Art Supplies

Australia today made one of the biggest drug busts in the country’s history — A$1.25 billion ($890.5 million) worth of liquid methamphetamine, or “ice,” which was hidden inside gel bra inserts and art equipment. Four Chinese nationals, three of them from Hong Kong, have been charged over their alleged role in the importation and manufacture of 720 liters (24,300 fl. oz.) of the drug. The narcotics were seized at several locations in Sydney, including a shipping container sent from Hong Kong, authorities said. “This is the largest seizure of liquid methamphetamine in Australia’s history and one of the largest drug seizures in our country’s history,” Justice Minister Michael Keenan told reporters in Sydney. “This has resulted in 3.6 million individual hits of ice being taken off our streets… This largest seizure of methamphetamine to date, is a result of organized criminals targeting the lucrative Australia ice market from offshore.”

https://news.vice.com/article/australia-has-just-busted-a-billion-dollars-of-meth-hidden-in-bra-inserts-and-art-supplies?utm_source=vicenewsfb

Exclusive: Samples confirm Islamic State used mustard gas in Iraq – diplomat

Islamic State militants attacked Kurdish forces in Iraq with mustard gas last year, the first known use of chemical weapons in Iraq since the fall of Saddam Hussein, a diplomat said, based on tests by the global chemical weapons watchdog. A source at the Organization for the Prohibition of Chemical Weapons (OPCW) confirmed that laboratory tests had come back positive for the sulfur mustard, after around 35 Kurdish troops were sickened on the battlefield last August. The OPCW will not identify who used the chemical agent. But the diplomat, speaking on condition of anonymity because the findings have not yet been released, said the result confirmed that chemical weapons had been used by Islamic State fighters. The samples were taken after the soldiers became ill during fighting against Islamic State militants southwest of Erbil, capital of Iraq’s autonomous Kurdish region. The OPCW already concluded in October that mustard gas was used last year in neighboring Syria. Islamic State has declared a “caliphate” in territory it controls in both Iraq and Syria and does not recognize the frontier. Experts believe that the sulfur mustard either originated from an undeclared Syrian chemical stockpile, or that militants have gained the basic know how to develop and conduct a crude chemical attack with rockets or mortars. Iraq’s chemical arsenal was mainly destroyed in the Saddam era, although U.S. troops encountered some old Saddam-era chemical munitions during the 2003-2011 U.S. occupation. More:

http://www.reuters.com/article/us-mideast-crisis-iraq-chemicalweapons-idUSKCN0VO1IC

National

If Republicans block Obama’s Supreme Court nomination, he wins anyway

After Justice Antonin Scalia’s death Saturday at 79, the Supreme Court is now evenly divided between four liberal justices and four conservatives, even with Anthony Kennedy’s occasional swings. What a moment for Scalia to depart: The court faces a wild array of closely divided decisions. It is an election year. And President Obama has stacked the lower circuit courts with Democrats. Obama has been chewing on his legacy for months. Fate has handed him the opportunity of any presidency — to swing the balance of the Supreme Court from conservative to liberal. Scalia weighed heavily on the conservative tilt of the current court, registering as more conservative even than other Republican justices in every field except on international and defense issues. There is no other justice whose replacement would more profoundly affect the court’s orientation. The court’s docket this term shows a clear intent to rule on some of the most contentious issues in the society: abortion, unionization, presidential power, affirmative action, political representation. Nothing in the presidential election in the fall matters more than the ability to shape the court. Now everyone should know that, including an incumbent who once taught constitutional law. Any nominee, of course, would have to be confirmed by the Republican-controlled Senate. Leaders there, and also most GOP presidential candidates, are already making clear that they intend to block Obama. But they may not realize that leaving Scalia’s seat vacant plays right into his hands. The court is not yet halfway through the 80 or 90 cases it deals with each term, but many of the most contentious have already been heard. Normally, justices meet the week a case is argued, and vote on the outcome. So they have most likely already voted on pending cases on apportionment and affirmative action, for example. But weeks or months can go by while the justice assigned the opinion circulates drafts. Any justice can change his or her vote at any point during that process, and often does. It’s all very hush-hush, so there is no way to tell how far along the cases Scalia heard are in the pipeline. There is no constitutional provision, no case law and no official policy about what the court should do with cases that have been argued and voted on when a justice dies. If the vote in a case that hasn’t yet been handed down was 5 to 4, as one might expect with these controversial rulings, can Scalia cast the deciding vote from beyond the grave to change the way America chooses every legislature in the land or integrates its public universities? A court that cares about its image and constitutional role will not rule in the name of a majority that counts on a dead justice, especially on the core issues of American social life. Such posthumous decisions are so unprecedented they would make Bush v. Gore look like responsible judicial behavior. Chief Justice John Roberts, who in matters entirely internal to the court like this wields some extra power, is known for his concern for institutional prestige, and he would be right to weigh in against issuing opinions based on what Scalia did in past conferences. More:

https://www.washingtonpost.com/posteverything/wp/2016/02/13/if-republicans-block-obamas-supreme-court-nomination-he-wins-anyway/?tid=sm_fb

At least 14 Supreme Court justices have been confirmed during election years

One of the biggest political arguments of 2016 will be whether the Senate should confirm President Obama’s nominee to the Supreme Court — or delay until 2017 so that the next president can fill the seat. Already, partisans on both sides are readying their arguments about why it would — or wouldn’t — be unprecedented for the Senate to run out the clock on Obama’s presidency. A key part of the conservative argument will be that it’s unprecedented for the president to nominate a candidate during an election year. “It’s been standard practice over the last 80 years to not confirm Supreme Court nominees during a presidential election year,” said Sen. Chuck Grassley (R-IA) on Saturday. Igor Volsky, a staffer at the liberal Center for American Progress, responded with a tweet listing justices who have been confirmed in election years:

http://www.vox.com/2016/2/13/10987692/14-supreme-court-confirmations

Statements from the Supreme Court on the death of Justice Scalia

Below are statements from current and retired Supreme Court justices on the death of Justice Antonin Scalia. Scalia died of a heart attack on Saturday at age 79 at Cibolo Creek Ranch in Texas. Appointed by President Ronald Reagan, he served on the high court for three decades:

http://www.usatoday.com/story/news/politics/2016/02/14/statements-supreme-court-death-justice-scalia/80375976/?csp=breakingnews

Official: Scalia died of heart attack

MARFA, Texas — The death certificate for U.S. Supreme Court Justice Antonin Scalia will list myocardial infarction — a heart attack — as the official cause of death, Presidio County Judge Cinderela Guevara told WFAA on Sunday. Guevara was shopping Saturday in the neighboring town of Alpine when county Sheriff Danny Dominguez called her on her cellphone after lunch. “He says, ‘Judge, I’m at Cibolo Creek Ranch, and a Supreme Court justice has just passed away, and I need someone here immediately. Both justices of the peace are out of town,’” Guevara recounted. “I said, ‘Sheriff, what did you say? Which Supreme Court Justice died at Cibolo Creek Ranch?’ And the phone went dead, because our connection was very bad,” she explained. Cell phone service is spotty in far West Texas. There’s no service at the ranch where Scalia passed away. Guevara said Dominguez called back repeatedly for 20 minutes, at the mercy of cell service. Guevara said she pronounced Scalia dead over the phone at 1:52 p.m. on Saturday. She planned to drive to the ranch — about 30 minutes south of Marfa — but returned when a U.S. Marshal told her by phone: “It’s not necessary for you to come, judge. If you’re asking for an autopsy, that’s what we need to clarify.” Guevara said she wanted to clarify details of Scalia’s death before deciding whether to order an autopsy. “As part of my investigation, one of the things I did ask the sheriff and the U.S. Marshal: ‘Were there any signs of foul play?’ And they said, ‘Absolutely not.’ At that time I still wanted to be careful, and asked them if (Scalia’s) physician would call me.” The justice’s personal doctor called her at 8 p.m. Saturday night. She said the physician told her that Scalia had a shoulder problem last week and underwent an MRI. Scalia also suffered several chronic ailments, Guevara said. “I felt comfortable what I knew was going on with him physically,” she said. More:

http://www.usatoday.com/story/news/nation/2016/02/14/official-scalia-died-heart-attack/80375798/?csp=breakingnews

Obama’s Supreme Court short list

The unexpected passing of Supreme Court Justice Antonin Scalia immediately set lawyers and politicians talking about who would get the nod from President Barack Obama to fill Scalia’s slot. However, Senate Majority Leader Mitch McConnell’s vow to not confirm any nominee during the remainder of Obama’s term creates an awkward dynamic around any potential pick. Whoever is nominated will have to consider the possibility of being in limbo for a year or more, if the Senate fails to act during the election year. However, that person might also have a leg up on being nominated by Hillary Clinton, if she wins the nomination and the general election in November. “It certainly is a lot for a person to take on to be the nominee in this heated political climate,” said Elizabeth Wydra of the liberal Constitutional Accountability Center. Here are a look at some of the leading possibilities to be Obama’s third nominee to the U.S. Supreme Court:

http://www.politico.com/story/2016/02/antonin-scalia-replacement-219271#ixzz40B6seaDw

Legendary duo takes different paths in high-frequency trading world

In the high-speed world of high-frequency trading change comes quick, too, as Wall Street struggles to find seasoned execs to lead the firms’ efforts. Two legends of the electronic marts are moving in opposite directions: one going out, the other right back in, and potentially for a shot at bond market glory. As Credit Suisse confirmed the resignation of trading boss Daniel Mathisson, 45, the cheers went up for comeback exec William O’Brien, 44. The former BATS Global Markets president departed the firm in July 2014, soon after his epic shouting match with upstart rival IEX on CNBC — and just months before O’Brien’s former employer paid a record fine to settle allegations with the Securities and Exchange Commission. (The charges stemmed from controversial “order types” at Direct Edge, which O’Brien ran prior to its acquisition by BATS.) O’Brien declined to discuss rumors he’s in talks to take a major executive role at a firm that has significant bond trading. “I am not ready to do that yet,” O’Brien told The Post. “I haven’t talked [publicly] for some time. I am not ready to talk about anything now, and when I am I will let you know,” he added. Meanwhile, at Credit Suisse’s regional headquarters in New York, colleagues were exchanging hugs with Mathisson. A beloved, mild-mannered math genius who ran all US stock trading as well as electronic trading, Mathisson officially departs late next month. He has told employees he’ll hit the beach and lay low for six months. Mathisson’s exit came as the Swiss bank announced plans to restructure its sprawling equity complex. As part of that, the bank appointed Nas Al-khudairi to a new post, head of electronic products. More:

http://nypost.com/2016/02/13/legendary-duo-takes-different-paths-in-high-frequency-trading-world/

Dividends, Wall Street’s Battered Status Symbol

Coca-Cola pays steady dividends. It has done so since 1920. In fact, it has increased dividends in each of the last 50 years. “Investors look at that record, and they count on it,” said Douglas J. Skinner, an accounting professor at the University of Chicago. “After a while, the dividend becomes sacrosanct.” Cut dividends? For Coca-Cola, that’s almost unthinkable. Investors would probably see a dividend cut as a sign of trouble — a clear indication that the company is short on cash. So it’s not surprising that despite a crimp in its cash flow in recent years, Coke hasn’t wavered on its dividend. Many other companies would love to say the same, but they can’t. Companies hate to cut dividends because they know that such an announcement would hurt their reputation with investors. Yet in a difficult financial environment, startlingly large numbers of corporations are slashing dividends anyway. That trend is disturbing. Look at the statistics: In 2015, 394 companies trimmed dividends, according to data provided by Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. That was a whopping 38 percent increase over the previous year, and it was 23 percent more than in 2008, an awful time for the stock market and for the economy.

http://www.nytimes.com/2016/02/14/your-money/dividends-wall-streets-battered-status-symbol.html?ref=dealbook&_r=0

Ruble Finds Love in an Alabama Startup Fund

Some of the biggest asset managers from New York to Paris have scaled back their wagers on the ruble as the Russian currency posts the world’s widest price swings. An Alabama startup investment firm sees it as one of the best ways to grow its fund. R-Squared Macro Management, which pulled out of Russian local-currency bonds earlier this year just as they went from being among the best performers in developing nations to near the worst, increased its position in the ruble this month to the equivalent of overweight from underweight. The currency has weakened 37 percent from last year’s high, a move Chief Investment Officer Ankur Patel deemed excessive. Now it’s poised to rebound as investors who pulled out begin to look for value when concern about global growth begins to ease, he said. R-Squared Macro Management forecasts that the ruble will trade at about 70 against dollar at the end of this year, up from its current level around 80. “You saw foreign investors unload the ruble at a very fast pace as they thought the risk was too high,” Patel said by phone from the firm’s Birmingham, Alabama, headquarters last week. “The Russian currency has a good value to offer, and now that investors don’t have too many attractive markets to invest in, they will go back bargain hunting once risk sentiment stabilizes.” More:

http://www.bloomberg.com/news/articles/2016-02-14/ruble-finds-love-in-alabama-as-startup-fund-sees-value-amid-rout

Banks Cutting Most-Experienced Bond Traders in Fixed-Income Cull

Banks are taking a hatchet to their bond-trading businesses and the biggest casualties are proving to be the people with the most experience. About 70 percent of credit traders cut in London last year at the 12 largest investment banks had worked in the financial industry for more than 10 years, according to data compiled by headhunters Michelangelo Search, which specializes in sales, trading and research roles. That’s increasingly leaving trading desks manned by more junior colleagues. Experienced, better-compensated staff are falling victim to banks’ efforts to reduce costs as they try to generate profit within constraints imposed by regulators and central banks since the global financial crisis. There’s more to come as banks from Bank of America Corp. to Goldman Sachs Group Inc. consider cuts as soon as this quarter. “I’ve been in the fixed income business for 35 years but most of my cohort is now missing in action,” said Tim Skeet, who has worked in bond-market roles since 1981, and is currently looking for a new position in the industry. “There’s a ‘juniorization’ of the workplace underway in London as banks focus more on costs than revenues.”

http://www.bloomberg.com/news/articles/2016-02-15/banks-cutting-most-experienced-bond-traders-in-fixed-income-cull

Oil extends rally on prospects OPEC could act to counter low prices

Oil prices rose on Monday, extending a rally triggered last week by speculation that OPEC might agree to cut production to reduce a supply glut that has pushed prices to the lowest in over a decade. Brent crude futures LCOc1, the global benchmark, were up 46 cents at $33.82 a barrel at 1232 GMT. U.S. futures CLc1 traded at $30.02 a barrel, up 58 cents on Friday’s close. Trade is likely to be thinner than usual on Monday due to the U.S. Presidents Day holiday. “Some traders still think about the chances of an OPEC plus Russia (production) cut and close their short positions,” said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg. The United Arab Emirates’ energy minister said the Organization of the Petroleum Exporting Countries was willing to cooperate on an output cut, the Wall Street Journal reported last week. And Nigeria’s oil minister told Reuters the mood inside OPEC was shifting to a growing consensus that a decision must be reached on how to prop up prices. More:

http://www.reuters.com/article/us-global-oil-idUSKCN0VO01K?feedType=nl&feedName=businessNews

New York police investigate woman’s claim of assault by Eliot Spitzer: source

Detectives in New York are investigating a woman’s claim that former Governor Eliot Spitzer assaulted her at a midtown hotel, a New York law enforcement source said. Lisa Linden, a spokeswoman for Spitzer, said there was no truth to the allegation. Manhattan police are attempting to determine whether Spitzer, who resigned from the governorship during a prostitution scandal in 2008, was involved in the incident, which allegedly occurred on Saturday, the law enforcement source said. The law enforcement source would not provide details on the nature of the alleged assault. The New York Post said the woman had accused Spitzer of choking her, but Reuters could not independently confirm that report. CNN reported that police went to the hotel Saturday after receiving a call about an emotionally disturbed person, citing an unnamed source.

http://www.reuters.com/article/us-new-york-spitzer-idUSKCN0VO0CC

Why the U.S. government doesn’t have a teacher discipline database

In 1997, West Virginia fifth-grade student Jeremy Bell died of what was believed to be a head injury while on a camping trip with the principal of his school, Edgar Friedrichs Jr. Nearly eight years later, investigators determined it was not a head injury. Bell had been sexually abused and killed by his principal, according to state criminal records and documents filed in a subsequent federal lawsuit. Probing deeper, officials realized Friedrichs had been dismissed by a Pennsylvania school for sexual misconduct allegations years earlier, but the school helped him get his job in West Virginia. The story of Jeremy Bell, and others like it, helped provide the impetus for federal changes proposed over the past decade that would mandate background checks for teachers, require states and districts to share data about disciplined teachers and prohibit school districts from facilitating the transfer of a teacher accused of sexual misconduct to another jurisdiction. Among the proposals have been efforts to require that names of teachers disciplined for sexual misconduct be reliably and consistently submitted to a national, government-run database, and to make the information more readily available to the public. More:

http://www.usatoday.com/story/news/2016/02/15/why-us-doesnt-have-government-database-disciplined-teachers/80220534/?csp=breakingnews

Kentucky lawmaker’s bill forces men to get note from wives before purchasing Viagra

Tired of what she considers the government inserting itself into women’s private lives, a Kentucky lawmaker has decided to return the favor. Rep. Mary Lou Marzian, a Louisville Democrat, has introduced a bill that would force men who want to use erectile dysfunction drugs to jump through a series of humiliating hoops beforehand, such as visiting a doctor twice and getting notes from their wives. “I want to protect these men from themselves,” Marzian, who is a nurse, told the Courier-Journal. “This is about family values,” she added. Mazian told Fox affiliate WDRB that House Bill 396 would also require that someone seeking Viagra, Cialis, Levitra or Avanafil “make a sworn statement with his hand on a Bible that he will only use a prescription for a drug for erectile dysfunction when having sexual relations with his current spouse.” “I started thinking, ‘How would this body of men feel if the government was injecting [itself] into their private medical decisions,’ ” she added. Marzian’s proposal arrives a week after Kentucky Gov. Matt Bevin (R) signed a bill requiring women to consult with a doctor at least 24 hours before an abortion, according to the Courier-Journal. The “informed consent” bill, as it was labeled, passed with 92 “yes” votes on Jan. 28, according to WDRB.  Marzian was one of three members of the Kentucky House to vote against the law, the station noted.

https://www.washingtonpost.com/news/morning-mix/wp/2016/02/14/kentucky-lawmakers-bill-forces-men-to-get-note-from-wives-before-purchasing-viagra/?hpid=hp_hp-more-top-stories_kentucky-viagra-510pm%3Ahomepage%2Fstory

State/Local

Measure addresses officials’ retirements

 

MONTGOMERY — One constitutional amendment is on the March 1 ballot, and supporters say it will save the state hundreds of millions of dollars in the next three decades. The amendment would change retirement plans for new Alabama Supreme Court, district, circuit and probate judges, and move circuit clerks and district attorneys out of the supernumerary system and into the Retirement Systems of Alabama. It is a result of 2015 legislation from state Sen. Arthur Orr, R-Decatur. Orr said the constitutional amendment isn’t creating from scratch retirement benefits for those who don’t have them, but changing existing systems to save money. Changes to judges’ retirement could save $120 million-$130 million during a 3-year period, Orr said. There’d be similar savings by doing away with the current supernumerary retirement systems for clerks and DAs, he said. “All in all, the number was $240 million to $300 million over 30 years,” Orr said last week. “(That is) considerable savings that would help the General Fund.” In 2012, the TimesDaily reported that about four dozen former DAs were each receiving about $112,000 a year from the state, but they also wanted to change the supernumerary system. Unlike many retirement plans, there is no spousal benefit for the former DAs. So if one dies the day after being appointed a supernumerary, a spouse receives nothing. In exchange for the salaries, which they don’t pay anything into, the supernumeraries are on call. Randy Hillman, director of the Alabama District Attorneys Association, said his group helped draft the bill last year. He describes a supernumerary DA as sitting on the bench, waiting for the governor or chief justice to call him into action to handle a case or group of cases the current DA can’t do. Meanwhile, the supernumerary can’t go into private practice. “The positive for the state is that it will be less burdensome for the state,” Hillman said last week. In this year’s General Fund budget, supernumerary DAs were allocated about $5.6 million for salaries and expenses. The salaries and travel for sitting DAs was budgeted at about $7.1 million. Clerks have a similar supernumerary system, paid for through the Alabama Administrative Office of Courts. Separately, clerks do pay into a RSA-managed spousal benefit program at the rate of 6 percent of their salary. The amendment puts the judges, clerks and DAs under the Retirement System of Alabama’s Judicial Retirement Fund. The retirements of district attorneys and clerks would be capped at 80 percent of their salaries. Judges’ retirements would be capped at 75 percent. Currently, judges can retire at any age if they have 24 years of service. Orr’s amendment would require judges, as well as clerks and DAs, to be 62 or older to collect retirement benefits. All would need at least 10 years of service to qualify.

The changes would apply only to officials elected after November 2016.

 

http://www.timesdaily.com/news/state-capital/measure-addresses-officials-retirements/article_c9fce5b5-b360-5553-9830-e70ac93e8115.html

 

Shelby to ‘adamantly oppose’ Obama filling Scalia vacancy

 

U.S. Sen. Richard Shelby, R-Ala., said Saturday he believes the decision to nominate a successor to the late U.S. Supreme Court Justice Antonin Scalia should not be taken by President Barack Obama, vowing to “adamantly oppose” an effort by Obama to fill the conservative justice’s vacancy on the court.

“This great loss brings on a great responsibility for the United States Senate.  Justice Scalia’s replacement should be considered carefully and thoughtfully because it is vital to our nation’s future that we confirm a justice who will continue his legacy,” Shelby said in a statement following Scalia’s death Saturday at age 79. “I will adamantly oppose any attempt by President Obama to fill this vacancy during the remainder of his term.” U.S. Sen. Jeff Sessions, R-Ala., who will play a vital role in Scalia’s successor as a member of the Senate Judiciary Committee, could not immediately be reached for comment on whether he shares Shelby’s view, but he later told CNN that he thinks the vacancy should be filled by the next president. “I think it’s too late to nominate someone now,” Sessions said. “The situation is so intense with the divided court. I think the proper thing to do is to let the presidential election go forward and let the next president nominate” a new justice. While Sessions said Obama has the right to nominate a successor to Scalia, the Senate equally has the right to confirm on not confirm Obama’s pick.

If Obama nominates a successor that is confirmed by the Senate, it would likely tip the balance of the court in favor of liberal issues.

 

http://www.al.com/news/index.ssf/2016/02/shelby_to_adamantly_oppose_oba.html#incart_river_home

State Moves to Quash Subpoenas, Hubbard Must Follow Rules

MONTGOMERY—The State filed a motion to quash subpoenas issued by the defense for Baron Coleman and Deputy Attorney General Matt Hart, who is leading the prosecution in Speaker Mike Hubbard’s felony criminal case. It also asked the court to order Hubbard to follow rule 17.3 of the Alabama Rules of Criminal Procedure. SEE MOTION TO QUASH The subpoenas are a result of Coleman delivering a three-page affidavit to Hubbard’s criminal lawyers, who used the information to renew its motion to dismiss the case on grounds of prosecutorial misconduct and fraud. Even though trial Judge Jacob Walker, III, stated in a December 2015 order, that prosecutorial misconduct must be viewed under the “standards set forth in Bank of Nova Scotia vs. U.S.1, which requires that the behavior of the prosecutor affect a grand jury’s decision to indict.” Hubbard’s defense attorneys are pushing this issue based on Coleman’s affidavit. The State asked Judge Walker to order Hubbard to follow the rule 17.3, because he has previously violated it in the past. In December 2015, Speaker Mike Hubbard had improperly handled a subpoena. On October 14, 2015, Hubbard had the Clerk issue a subpoena to Administrative Office of Courts (AOC) seeking the production of records identifying the AlaCourt users that accessed the publicly filed documents in the Hubbard case. This was without Judge Walker knowledge, and violated rule 17.3 because the product of the subpoena needed to first be viewed by the Judge to decide relevance. SEE STATE MOTION RULE 17.3 More:

 

http://www.alreporter.com/state-moves-to-quash-subpoenas-hubbard-must-follow-rules/

 

Bill Calls for Indicted Leaders Suspension

MONTGOMERY—A group of 10 State Representatives have sponsored House Bill 220, which would, “automatically suspend a member of the Legislature who holds a leadership position from serving in that leadership position if the member is indicted for a crime that is a felony.” The bill clarifies that the legislator would retain their position in the body as a member, but would forfeit any leadership roles. This is similar to the rules of the US House of Representatives, and other legislative bodies. The bill is sponsored by nine Republicans and one Democrat none are likely to appear on Speaker Mike Hubbard’s Christmas card list. They are Republican Representatives Allen Treadaway, Phil Williams, Allen Farley, Isaac Whorton, Tim Wadsworth, David Standridge, Jim Carns, Dickie Drake, Richie Whorton and Democrat Johnny Mack Morrow. Before the 2016 Session, Hubbard struck out at some of these men for daring to even mention challenging his leadership in the House. Hubbard demoted or removed from committees, Treadway, Williams, Carns, as well as, Mike Holmes and Ed Henry. The leadership positions are: President Pro Tempore of the Senate, Senate Majority Leader, Senate Minority Leader, chair of any Senate standing committee, Speaker of the House of Representatives, Speaker Pro Tempore, House Majority Leader, House Minority Leader, or chair of any House standing committee. There is no current Senate sponsor that has been identified. There is little belief that Hubbard would allow the bill to reach committee, much less the House floor. The only hope of this bill gaining attention is if a strong Senate leader were to emerge.

http://www.alreporter.com/bill-calls-for-indicted-leaders-suspension/

 

Blogs/Opinions

Read Justice Ginsburg’s moving tribute to her “best buddy” Justice Scalia

If you’ve ever believed that people can disagree passionately about politics and still respect and care for each other as friends, the friendship of Justice Antonin Scalia and Justice Ruth Bader Ginsburg was a comfort and an inspiration. He was the Supreme Court’s most outspoken conservative; she is its most outspoken liberal. But their friendship became famous, not just because of its odd-couple unexpectedness but because their mutual respect and affection for each other was obviously genuine. They and their families spent New Year’s Eve together every year. They rode together on an elephant in India (Scalia joked that Ginsburg betrayed her feminism by sitting behind him), and Scalia watched Ginsburg go parasailing in the south of France (“She’s so light, you would think she would never come down. I would not do that”). So it’s no surprise that of all the tributes to Justice Scalia, who died Saturday of an apparent heart attack at the age of 79, Justice Ginsburg’s is uniquely moving. It’s a tribute to Scalia as an interlocutor, a fellow opera lover — including a reference to the opera Scalia/Ginsburg: A (Gentle) Parody of Operatic Proportions, which debuted in 2015 — and a “best buddy.” See link below:

http://www.vox.com/2016/2/14/10990156/scalia-ginsburg-friends

 

Morning Money

 

Morning Money goes dark Monday to observe the President’s Day holiday, returning Tuesday, Feb. 16th
POTUS Events

 

No public schedule posted on White House site.

 

Floor Action

The House will return on February 23rd. The Senate will return February 22nd.

Announcements

Scam Calls and Emails Using IRS as Bait Persist

Scams using the IRS as a lure continue. They take many different forms. The most common scams are phone calls and emails from thieves who pretend to be from the IRS. They use the IRS name, logo or a fake website to try to steal your money. They may try to steal your identity too.

Be wary if you get an out-of-the-blue phone call or automated message from someone who claims to be from the IRS. Sometimes they say you owe money and must pay right away. Other times they say you are owed a refund and ask for your bank account information over the phone. Don’t fall for it. Here are several tips that will help you avoid becoming a scam victim.

The real IRS will NOT:

  • Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
  • Demand tax payment and not allow you to question or appeal the amount you owe.
  • Require that you pay your taxes a certain way. For example, demand that you pay with a prepaid debit card.
  • Ask for your credit or debit card numbers over the phone.
  • Threaten to bring in local police or other agencies to arrest you without paying.
  • Threaten you with a lawsuit.

If you don’t owe taxes or have no reason to think that you do:

  • Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
  • You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” to the comments of your report.

If you think you may owe taxes:

  • Ask for a call back number and an employee badge number.
  • Call the IRS at 800-829-1040. IRS employees can help you.

In most cases, an IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. They often use fake refunds, phony tax bills, or threats of an audit. Some emails link to sham websites that look real.  The scammers’ goal is to lure victims to give up their personal and financial information. If they get what they’re after, they use it to steal a victim’s money and their identity.

If you get a ‘phishing’ email, the IRS offers this advice:

  • Don’t reply to the message.
  • Don’t give out your personal or financial information.
  • Forward the email to phishing@irs.gov. Then delete it.
  • Don’t open any attachments or click on any links. They may have malicious code that will infect your computer.

More information on how to report phishing or phone scams is available on IRS.gov.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

Krebs Daily Briefing 12 February 2016

Thomas L. Krebs, Securities Litigation, Regulation and Compliance Attorney Lawyer (c)2014 Brandon L. Blankenship
Thomas L. Krebs
(205)401-2383

International

What The Heck Are Cocos and Why Is Everyone Freaking Out About Them?

The global market sell-off that continued Thursday in the United States can be blamed on a lot of things, including China’s economic slowdown, low oil prices, and uncertainty about the U.S. Federal Reserve’s monetary policy. But there’s one obscure investment instrument that’s also contributing to the panic, especially in Europe, that is spilling across the Atlantic: Coco bonds. Coco bonds are formally known as contingent convertible bonds. They were created in Europe by financial regulators as an insurance policy after the Great Recession to ensure taxpayers would not have to bail out banks if another crisis occurs and banks fall short on cash. Here’s how they work. Cocos are a type of debt, with a string attached. Banks issue these bonds to buyers to raise cash. If a pre-agreed event occurs — say a stock price drops to a certain level — then the holders of the debt get an equity stake in the bank. This is the contingent. They differ from normal bank bonds in that key way. If a bank — say Deutsche Bank, an institution whose health is at the center of Europe’s financial sector worries — is unable to pay off a normal bond, it would negotiate with the bond holder to pay off some of what it owes. This can be a long and complicated process. Cocos allow bondholders to skip this. If a bank is short on cash and can’t keep up interest payments, then the borrower gets an equity stake in the bank, as opposed to having to negotiate a pay back. That’s the convertible part — debt converts into equity. They were devised so that governments — and therefore taxpayers — wouldn’t have to step in to help struggling banks. If banks run low on cash and can’t keep up interest payments, the bonds convert. This solves two problems: the bank’s debt load lessens, and its capital supplies increase because it has a new equity holder. Bond holders may not get all of their money back — which is why Cocos are considered very risky investments — but they will get a an equity stake in the bank that issued the Coco. More:

http://foreignpolicy.com/2016/02/11/what-the-heck-are-cocos-and-why-is-everyone-freaking-out-about-them/

The latest rumor from North Korea: Another general executed

Yet another North Korean general is killed by the Pyongyang regime. That’s the story that’s been doing the rounds this week after a South Korean news agency quoted an anonymous South Korean official from an unnamed South Korean agency as saying that Ri Yong Gil, chief of the Korean People’s Army [KPA] general staff, had been executed for corruption. It fit with the pattern that has emerged since Kim Jong Un took over the leadership of North Korea from his father at the end of 2011: Aging member of the old guard dispatched by young upstart leader. After all, it happened with Hyon Yong Chol, the defense minister executed by anti-aircraft gun for insubordination and treason. And to Pyon In Son, head of operations in the army, said to have disagreed with Kim. The 33-year-old leader even had his uncle, Jang Song Thaek, shot for amassing too much power. This rumor about Ri may well be true. But as with almost everything related to North Korea, very little is clear. A memo from South Korea’s National Intelligence Service, obtained by the Washington Post, said that Ri was executed on Feb. 2 or 3 for factionalism and corruption charges. “Even though corruption and factionalism were given as reasons behind his execution, Ri had been considered a man on principle so it is more likely that these reasons were just given to justify his execution,” the memo said. “This is another sign of Kim Jong Un’s reign of terror,” it said. But the South’s spy agency has a history of being wrong about North Korea almost as often as it’s right, and the Daily NK, a Seoul-based news service with informants inside Norh Korea, Friday reported that Ri had been arrested rather than executed. Ri was “going against the Party’s monolithic teachings and monolithic military system” by “exercising privileges and partaking in factional bureaucracy,” a source told The Daily NK. He was arrested at a party meeting and dragged out in handcuffs, the site reported. More:

https://www.washingtonpost.com/news/worldviews/wp/2016/02/12/the-latest-rumor-from-north-korea-another-general-executed/?hpid=hp_hp-cards_hp-card-world%3Ahomepage%2Fcard

National

Morgan Stanley Will Pay $3.2 Billion For Contributing To Mortgage Crisis

Morgan Stanley has reached a $3.2 billion settlement with state and federal authorities, the New York attorney general’s office announced Thursday. In the deal, the investment bank acknowledges that it misrepresented the risks of mortgage-backed securities leading up to the 2008 housing and financial crisis. Morgan Stanley knew that it was selling securities backed by residential mortgages with “material defects” — such as loans that were “underwater,” where the loan was larger than the value of the house. Internal emails helped document that the company was fully aware of the high risks of the loans it was securitizing, the New York attorney general’s office writes:  “In a May 31, 2006 email, the head of Morgan Stanley’s team tasked with doing due diligence on the value of properties underlying the mortgage loans asked a colleague, ‘please do not mention the ‘slightly higher risk tolerance’ in these communications. We are running under the radar and do not want to document these types of things.’ “In another email on November 21, 2006, a member of the Morgan Stanley due diligence team forwarded a list of questionable loans, seeking review and approval to purchase them and adding ‘I assume you will want to do your ‘magic’ on this one?’ ” The settlement announced Thursday was negotiated by a working group including both federal and state authorities, led by New York Attorney General Eric Schneiderman. The $3.2 billion deal represents an increase from the $2.6 billion that Morgan Stanley agreed to pay last year. As NPR’s Yuki Noguchi reports, “The final terms now include a program to help struggling homeowners. For instance, New York state alone will receive more than half a billion dollars, the majority of which will go to support local housing programs.” That additional money will be used, among other things, to help residents avoid foreclosure and fund affordable housing development. The Associated Press helps put the value of the $3.2 billion in perspective:  “The New York-based investment bank reported a fourth-quarter profit of $908 million. It recorded $3.1 billion in legal expenses in 2014 for settlements with state and federal regulators over its role in the housing bubble and subsequent financial crisis.”

http://www.npr.org/sections/thetwo-way/2016/02/11/466399992/morgan-stanley-will-pay-3-2-billion-for-contributing-to-mortgage-crisis?sc=tw

Dimon Just Spent a Year’s Pay on JPMorgan Stock After Bank Rout

Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., spent $26.6 million to buy shares of his bank Thursday after they tumbled to the lowest price in more than two years. Dimon, 59, bought 500,000 shares, bringing his total holding to 6.75 million shares, according to a regulatory filing. He made the purchase because he believes the stock is cheap after a worldwide rout in equities, according to a person with knowledge of his thinking. JPMorgan, the largest U.S. lender by assets, fell 20 percent this year through the end of regular trading in New York. Other global banks including Citigroup Inc., Bank of America Corp., Credit Suisse Group AG and Deutsche Bank AG have all plunged more than 32 percent. JPMorgan climbed 3.6 percent to $55 at 7:48 a.m. in early trading on news of Dimon’s purchase and as equities rallied globally. Executives can sometimes shore up confidence in their firms after purchasing shares in the open market. Citigroup CEO Michael Corbat and Chairman Michael O’Neill each bought about $1 million of their bank’s shares on Jan. 22 after they fell to the lowest in more than three years, and the stock has tumbled 15 percent since. On Thursday, Citigroup Chief Financial Officer John Gerspach purchased 13,000 shares for about $489,000, according to a filing.

http://www.bloomberg.com/news/articles/2016-02-11/dimon-just-spent-a-year-s-pay-on-jpmorgan-stock-after-bank-rout

Warren, Cummings: Financial firms exaggerate harm from fiduciary rule

Financial firms are significantly exaggerating the harm they face from a contentious retirement investment rule, according to Sen. Elizabeth Warren (D-Mass.) and Rep. Elijah Cummings (D-Md.). The two argued in a letter Thursday that financial firm are all doom and gloom when pushing Washington policymakers on the rulemaking effort, but are much more optimistic when talking to investors about it. And that’s significant, according to the pair, since the firms are legally required to be forthright with investors about the challenges they face.  “Publicly traded companies are rarely held accountable for the assertions they make when lobbying in Washington, even if those assertions are untrue,” they wrote to Labor Secretary Thomas Perez. “But when communicating with investors, publicly traded companies are required by law to provide full and accurate information.” The letter marks the latest volley in an intense lobbying battle over a “fiduciary duty” initiative that would require retirement investment advisers to act solely for the benefit of their clients. Advocates of the rule, including President Obama, argue it will protect investors from being steered towards pricey but unnecessary financial products. The financial industry has fight the rulemaking effort tooth and nail, warning policymakers the rule would be unworkable and could kill off a raft of investment advice opportunities. But such dire warnings or nowhere to be found on quarterly earnings calls held by those firms, where they brief investors are the state of their finances. For example, Dennis Glass, president and CEO of Lincoln National, told the Labor Department in a July letter the rule would be “immensely burdensome” and “extremely intrusive,” and questioned whether firms would be even able to work with it. The head of the life insurance company had a different message for investors two months earlier.

http://thehill.com/policy/finance/269073-warren-cummings-financial-firms-exaggerate-harm-from-fiduciary-rule

 

Some Hedge Funds Want to Make Subprime Auto Loans Next Big Short

A group of hedge funds, convinced they have found the next Big Short, are looking to bet against bonds backed by subprime auto loans. Good luck finding a bank willing to do the trade. Money managers have looked at betting that subprime auto securities will tank for many of the same reasons that investors wagered against risky mortgage bonds in the run-up to the financial crisis: Loan volume has mushroomed in the last few years, lending terms have become looser and delinquencies are ticking higher. Mary Kane, an asset-backed securities analyst at Citigroup Inc., wrote in a note late last month that the bank has received “an explosion of calls” in recent weeks, after the movie “The Big Short” portrayed a group of traders that profited from the collapse of subprime home loans. The demand now is coming from hedge funds that trade everything from stocks to bonds, analysts said. But many banks, including Bank of America Corp. and Morgan Stanley, are not interested in making the bet happen for clients, according to representatives of the firms. Some said they fear that helping clients wager against car loans would be bad for their reputation, and that new capital rules and other post-crisis regulations would make the transactions difficult or even impossible to put together. “Most trading desks just don’t take that kind of risk now,” said Mike Edman, a former Morgan Stanley executive who helped invent credit derivatives that helped Wall Street banks bet against subprime mortgage bonds. More:

http://www.bloomberg.com/news/articles/2016-02-11/some-hedge-funds-want-to-make-subprime-auto-loans-next-big-short

The Bizarre Money Triangle at the Top of Viacom

On the morning of Friday, Jan. 29, Stephen Read, a geriatric psychiatrist, paid a visit to the Beverly Hills mansion of Sumner Redstone, the 92-year-old media mogul. Under a court order, Read had been granted up to one hour to test Redstone’s mental competency on behalf of a client, who was suing the billionaire. Days later, with the results of the psychiatric exam still under seal, Redstone resigned as executive chair of CBS and Viacom, the media conglomerates that he controls through his privately held company, National Amusements. For months, amid conflicting reports about his health, pressure had been mounting for Redstone to step down. The board of directors at CBS seemed well-prepared. On Feb. 3 it elected the company’s longtime chief executive officer, Leslie Moonves, to replace Redstone. The vote was unanimous. There was no drama. At Viacom, on the other hand, things exploded. The news of Redstone’s abdication touched off a fierce power struggle, pitting Redstone’s daughter, Shari, against Viacom’s CEO and—as of Feb. 4—chair, Philippe Dauman. At stake isn’t only control of Viacom—a $14 billion corporation that owns MTV, Comedy Central, Nickelodeon, and Paramount Pictures—but also Redstone’s legacy, not to mention his sizable personal fortune, valued at more than $5 billion. It promises to be one of the most tangled and protracted succession fights since the Jin dynasty’s War of the Eight Princes. Among the megafauna that roamed the executive suites and boardrooms at media conglomerates in the past half-century, Redstone had few equals. He was a masterful dealmaker, who over a quarter-century pulled off several improbable acquisitions, building a media superpower that spanned broadcasting, cable TV, and movies. He presided over a freewheeling creative environment that routinely cranked out zeitgeist-defining franchises—SpongeBob SquarePants, Beavis and Butt-head, The Real World, The Daily Show, South Park. The Redstone succession saga has been unfolding for decades. Questions about his health have come up at least since the 1990s, and his response has always been a variation on how he plans to live forever. This latest, if not final, chapter began on the morning of Nov. 13, 2014, when Redstone joined a routine conference call with the analysts who cover the company. At the start of the proceedings, he wished everyone good morning. His words were faint, slurred, barely audible. He sounded ill.

http://www.bloomberg.com/news/articles/2016-02-11/the-bizarre-money-triangle-at-the-top-of-viacom

What’s a Super Delegate, and Why Did Clinton Win Them?

Supporters of Bernie Sanders have much to be elated about after the Vermont senator thundered to a 22-point victory over Hillary Clinton in New Hampshire Tuesday night. But they may be bewildered when they look at the scoreboard. After the New Hampshire contest, NBC News allocated 15 delegates to Sanders. But NBC also allocated 14 delegates to Hillary Clinton, who lost the primary by an almost historic margin. Why are those two numbers so close even though Sanders walloped her in the state? The answer has to do with a quirk unique to the Democratic Party called superdelegates. They are delegates to the party convention — usually members of the DNC and other state and federal elected officials — who are allowed to endorse their own pick regardless of how their home state votes. And this cycle, at least at the moment, they are overwhelmingly behind Clinton’s White House bid. At the end of the New Hampshire tally Tuesday night, Sanders had amassed enough support from voters to earn 15 delegates, while Clinton grabbed just eight based on the ballot box. But New Hampshire also has eight superdelegates. Six of them have endorsed Clinton, while two aren’t committed to either candidate. That means that Clinton tacked an extra six delegates on to the end. In Iowa, the superdelegate picture was much the same. Clinton won by the narrowest of margins, but she snagged the support of six extra superdelegates. Sanders, who so far has only a dozen or so superdelegate endorsements in total compared to hundreds for Clinton, got none of those bonus points out of Iowa. (While Clinton has been endorsed by hundreds of super delegates, NBC News is only including in its total delegate count those superdelegates whose home states have already voted in the primary.) If you think that the superdelegate system gives Clinton a built-in advantage, at least at this moment in time, you’re right. The Cook Political Report estimated late last month that Clinton’s early advantage with superdelegates meant that she effectively started the race eight points above Sanders in the race to get enough delegates to secure the nomination. One thing worth keeping in mind: Superdelegates can switch their endorsements, so the numbers are not set in stone. But right now, when it comes to the scoreboard, Sanders will have to play aggressive offense to catch up.

http://www.nbcnews.com/politics/2016-election/why-sanders-new-hampshire-victory-wasn-t-so-huge-n516066

Wall St. Whistle-Blowers, Often Scorned, Get New Support

Becoming a whistle-blower by reporting wrongdoing on Wall Street or in a federal agency that regulates Wall Street takes lots of guts. And a strong argument can be made that whistle-blowers should be celebrated and rewarded for their courage. Incredibly, though, all too often the opposite occurs, and Wall Street whistle-blowers are shunned, ostracized and ignored. Often, they are fired from their jobs and blackballed from the industry. The wrongdoing they witnessed and reported gets covered up. This is a typical outcome, despite the promises from such prominent Wall Street regulators as Preet Bharara, the United States attorney in the Southern District of New York, and William C. Dudley, the president of the Federal Reserve Bank of New York, who have encouraged whistle-blowers to come forward and report wrongdoing, both because it is the right thing to do and because it will enable regulators to root out the bad behavior and prosecute those responsible for it. But the real world of Wall Street does not work that way.

http://www.nytimes.com/2016/02/12/business/dealbook/wall-st-whistle-blowers-often-scorned-get-new-support.html?ref=dealbook&_r=0

 

Debate Night Pits Judgment Against Experience

Who would have expected that the most hotly contested figure in a Democratic presidential debate in 2016 would be Henry Kissinger? The nonagenarian foreign-policy eminence was the subject of the biggest fireworks of Thursday night’s debate in Milwaukee, which came after some 75 minutes of a mostly earnest, dry debate. As Hillary Clinton and Bernie Sanders tangled over whether experience (she) or judgment (he, in not voting for the Iraq war) mattered more for a commander-in-chief, Sanders delivered a zinger. “I am proud to say that Henry Kissinger is not my friend,” Sanders declared, referring to Clinton’s praise for the former secretary of state during the last debate. Suddenly, all hell broke loose. In a surreal spectacle, Clinton—a child of the 1960s campus left and a leader of the nation’s liberal party—defended Kissinger, once a bogeyman to the Democratic Party. She tried to turn the argument back on Sanders, noting that he hadn’t managed to name who his own foreign-policy advisers are. He was ready: “It ain’t Henry Kissinger,” he replied. In a moment of peak, Sanders then attacked Kissinger for—of all things—backing free-trade agreements. (Alex Pareene wrote eloquently last week about why Kissinger is such a problem for Clinton.) More:

http://www.theatlantic.com/politics/archive/2016/02/live-coverage-of-the-democratic-debate/462540/

 

The First Children Who Led Sad Lives

In recent decades, most First Children have led charmed lives. Doted on by an adoring public, they have enjoyed opportunities that are rarely available to other Americans. Chelsea Clinton and Jenna Bush, for example, both parlayed their celebrity into cushy contracts with NBC News.  Clinton said to People magazine recently that she sees it as her duty to make sure that her daughter, Charlotte, “realizes how blessed she is—how blessed we [the members of our family] all are.” For the first century-and-a-half of the republic, however the sons and daughters of presidents often struggled. Historian Michael Beschloss has alluded to their collective misfortune as the “curse of the famous scion.” Several endured accidents or health crises that led to early death. As a group, they experienced much higher rates of alcoholism and mental illness than their peers. Destitution was not uncommon. In the 19th century, a few First Children did achieve success—Lincoln’s eldest son, Robert, eventually became the CEO of the Pullman Palace Car Company and Webb Hayes, the second son of Rutherford B. Hayes, helped to found the corporate behemoth, Union Carbide—but these cases were the exception rather than the rule.  In stark contrast to Clinton and Bush, Abigail (“Nabby”) Adams, the eldest child of John Adams, lived in abject poverty for most of her adult life. She suffered through a difficult marriage to William Smith, a mentally unstable former aide-de-camp to George Washington. Smith would repeatedly abandon her and their four children for months—sometimes even years—at a time. In the late 1790s, when a few of Smith’s speculative ventures went belly up, Nabby lived with her husband in a tiny cottage on the grounds of a debtors’ prison. “My dear sister’s destiny might have been better,” Adams’s second son, Thomas, wrote of Nabby, who died of cancer at 48. Nabby’s brother, Charles, Adams’s third son, met an even crueler fate. Though he passed the bar in 1792, the Harvard grad never could make a decent living in his chosen profession. A chronic alcoholic, who was also a serial adulterer, Charles often lived apart from his wife and two daughters. Weighed down by worry over the distress of both Nabby and Charles, John Adams confessed to his wife, Abigail, a couple of years into his administration, “My children give me more pain than all my enemies.” In the fall of 1799, Adams disowned Charles, whom he never spoke to again. A year later, the destitute Charles died of cirrhosis of the liver at the age of 30. More:

http://www.smithsonianmag.com/history/first-children-who-led-sad-lives-180958099/#sRV86CqdFAMQZL1b.99

 

State/Local

Obama appoints Judge Abdul Kallon to 11th Circuit

WASHINGTON — President Obama on Thursday nominated U.S. District Judge Abdul Kallon of Birmingham to fill the Alabama vacancy on the U.S. 11th Circuit Court of Appeals in Atlanta. “Judge Kallon has a long and impressive record of service and a history of handing down fair and judicious decisions,” Obama said. “He will be a thoughtful and distinguished addition to the 11th Circuit, and I am extremely pleased to put him forward.” If confirmed, Kallon would replace U.S. Circuit Judge Joel Dubina, who took senior status — a form of semi-retirement — in October 2013. But getting the U.S. Senate to confirm Kallon before Obama leaves office next January appears unlikely. Three other appellate court nominees are in line ahead of Kallon, and it’s not clear Alabama’s two Republican senators will allow Kallon’s confirmation to move through. Sen. Richard Shelby and Sen. Jeff Sessions issued a joint statement Thursday night indicating their opposition to Kallon’s nomination. “Throughout the process of meeting with the White House on filling judicial vacancies, we negotiated in good faith to find nominees that will serve our state well,” they said. “While we thought progress had been made, apparently the White House was never interested in good faith negotiations, and it is too late now.”

http://www.montgomeryadvertiser.com/story/news/2016/02/11/obama-appoints-judge-abdul-kallon-11th-circuit/80253358/

McConnell wrongly identifies Shelby donor as his own

WASHINGTON – One of Sen. Richard Shelby’s challengers in the March 1 Republican primary mistakenly claimed a longtime Shelby supporter and prominent Birmingham businessman as one of his own campaign contributors. Michael Thompson, CEO of Thompson Tractor Co., is listed as a $2,700 donor to Jonathan McConnell’s campaign, according to McConnell’s latest campaign finance disclosure.

But Thompson said Thursday he didn’t donate to McConnell’s campaign. “There are a lot of Michael Thompsons around, but I’m a little mad they put down Thompson Tractor,” Thompson said Thursday. “I don’t like it at all.” Campaign finance reports require a donor’s employer and occupation to be listed, and the Thompson on McConnell’s report is identified as CEO of Thompson Tractors. McConnell’s campaign spokeswoman, Liz BeShears, said a different Michael Thompson from Auburn donated to the campaign, and the incorrect employer information was a “data entry error.”

http://www.montgomeryadvertiser.com/story/news/2016/02/11/mcconnell-wrongly-identifies-shelby-donor-his-own/80255386/

 

Coleman Revealed as Confidential Informant, Gave Affidavit to Mike Hubbard

MONTGOMERY—Court filings state that, attorney and radio host, Baron Coleman gave his three-page affidavit to Speaker Mike Hubbard’s criminal lawyers, who used the information to renew its motion to dismiss Speaker Mike Hubbard’s felony case on prosecutorial misconduct and fraud. In the State’s motion, it is revealed Coleman served as a confidential informant to the Attorney General’s Special Prosecution Division since the fall 2012. According to the State, Coleman supplied information on Hubbard and other individuals. The State provided proof of Coleman’s status to the court ex parte, and in camera. The information provided to trial Judge Jacob Walker III, marked as Exhibit A, is under seal. Coleman’s business partner and radio co-host Jack Campbell provided the court with an affidavit that resolutely refutes accusations Coleman supplied to Hubbard against Matt Hart, the Special Prosecution Division Chief. SEE MOTION  In its filing, the State says, Coleman’s “affidavit is misleading because it omits the key fact that Coleman has been a confidential informant for the State since the fall of 2012, longer than he has been a daily radio show host or political consultant for Sandy Toomer.” As a consequence of this omission, the affidavit also fails to acknowledge that the conversations that Deputy Attorney General Matt Hart had with Coleman, “were all lawful and appropriate, because they were all conducted in the context of Coleman’s status as an informant.” More:

http://www.alreporter.com/coleman-revealed-as-confidential-informant-gave-affidavit-to-mike-hubbard/

 

State Claims Privilege Over Coleman Information

MONTGOMERY—On Thursday, the State filed a response to the Defense’s renewed motion to dismiss the case against Mike Hubbard, on grounds of prosecutorial misconduct and fraud. In conjunction, a motion for a protective order regarding Baron Coleman’s disclosure of information. Coleman, who filed an affidavit on Feb. 2, 2016, claimed that he concluded that Assistant Deputy Attorney Matt Hart relayed Grand Jury information to him, in violation of the Grand Jury Secrecy Act. He said in his affidavit that information was used in a “whisper campaign” for Sandy Toomer’s run for Hubbard’s House seat. SEE ORDER The Prosecution’s response states, that since Coleman revealed his contact with the Attorney General’s office, to the Court in the affidavit that it, “placed his status and activities as a confidential informant before the Court.” In response, Acting Attorney General Van Davis filed State’s Motion for Protective Order to Prevent Disclosure of Information from Former Confidential Informant, Baron Coleman. In the motion, the State moves for a protective order prohibiting any disclosure of information regarding the Coleman/Hart interactions. Hubbard, his attorneys, Coleman and anyone “acting in concert or participation” may not reveal and information “conveyed or received” from the State. The State claims that as a confidential informant, any communications between Coleman and the AG’s office, “is privileged and rightly protected from disclosure.” The motion reiterated that evidence had been submitted to Judge Jacob Walker, III, “for ex parte and in camera review,” proving Coleman’s status as a confidential informant.

http://www.alreporter.com/state-claims-privilege-over-coleman-information/

 

Blogs/Opinions

Alabama PSC President Twinkle Cavanaugh is the George Wallace of her generation (John Archibald)

History will tell the story of Alabama’s recalcitrance. Again. This time around, Public Service Commissioner Twinkle Andress Cavanaugh will play the role of George Wallace, standing defiantly in the Greenhouse door. It’s not about race this time. It’s about humanity. Wallace’s populist poison of “segregation now, segregation tomorrow, segregation forever” has given way to Cavanaugh’s “jobs, jobs, jobs.” The way she uses it, it’s just as toxic. Because Cavanaugh uses the genuine need for employment to feed the flames of willful ignorance. She dismisses those with fear for the air, or water, or the health of their children, as “environmental extremists.” She writes off genuine concerns for climate change as “the bogus science claim of global warming.” She — like Wallace — has become a symbol of the futility of denial. Jump on her bandwagon, if you really think Twinkle knows best. But when history plays out, you might come to look a lot like one of those white guys in T-shirts in those grainy photos outside Foster Auditorium, their faces screwed up in hatred, their fists in balls and their passion loaded up on the wrong side of right. If the history of Alabama has taught us anything – if history ever teaches Alabama anything — it is that what we do today matters tomorrow. Every time we ignore a changing world, each day we refuse to acknowledge facts or twist them to our own beliefs, we lose. And people get hurt. And now the head of our very own “public service” commission tells the people of Alabama to ignore science that doesn’t suit her political purposes. Believe instead in a science by political poll, a physics of denial. Trust in a science of fantasy, so we can continue to build public policy on the basis of how we wish things were. Cavanaugh, backed by those who profit from keeping things as they are, from burning whatever fossil fuels we can find whenever and however we want, feeds the notion that global warming is a myth, that scientists are split on the issue, that environmentalists wake up every morning hating coal because, I suppose, they were naughty kids who got their fill of it in Christmas morning stockings. Global warming is not a theory to be dismissed as bogus science. Not without risk, anyway. It is happening. And there is no great debate – outside of tell-you-what-you-want-to-hear news shows and political hack email chains — in the real scientific community about whether it is caused by humans. A recent study by a group of international researchers examined 11,944 climate abstracts – papers written by scientists on the issue of global warming. Among the scientists that took a position on the cause of global warming, 97.1 percent “endorsed the consensus position that humans are causing global warming.” So in Alabama – and across much of the world, of course – we allow the loudest political mouths, the biggest deniers, to cling to that 3 percent, to use scientific outliers as proof when they call the other 97 percent “bogus.” They cling to the past for their own benefit. And put our future at risk. George Wallace got a chance to change his mind. In the end he saw the price of his politics and – for all the good it did – apologized for the damage his own calculated words did. Twinkle Cavanaugh – and the many so very like her – may not get that chance. They will stand, instead, symbols of the planet’s greed, selfishness and futility.

http://www.al.com/opinion/index.ssf/2013/05/alabama_psc_president_twinkle.html

 

Morning Money

DEBATE WRAP: CLINTON’S CONUNDRUM — Strong showdown between Bernie Sanders and Hillary Clinton in Wisconsin last night. Clinton once again ripped Sanders for promising more than he could ever deliver on universal health care and wrapped herself in the banner of the president saying that before Obamacare existed it was a proposal called “Hillary-care.” The debate once again displayed the difficult challenge Clinton faces. She is the pragmatic realist running against a challenger promising free college, universal single-payer healthcare and parades of bankers in handcuffs.

Clinton promises an expansion of Obamacare, targeted efforts to attack student debt and Wall Street reform that focuses on risk more than size. Clinton’s approach is far more realistic, especially given the likely makeup of Congress in 2017. It’s also much harder to fit in a soundbite and fire up a leftward-moving Democratic Party. Clinton will likely win the nomination but she faces a very difficult job selling realism versus idealism. She probably had her strongest moment at the end when she said — in reference to Sanders’ corporate bashing — “I am not a single issue candidate and I do not believe we live in a single issue country.”

SAME PROBLEM IN THE GOP — Clinton’s dilemma is pretty neatly mirrored among the GOP candidates who have to somehow beat a man promising to build a giant wall with Mexico, beat the crap out of all our enemies and generally dominate everything in completely non-specific and non-possible ways. Beating fantasy with reality is just really hard. We all like super hero movies and fairytales. We don’t always like eating our vegetables and going to bed early.

SOUTH CAROLINA BLAST — Great POLITICO Caucus event in Charleston last night. Some tasty clips for you. AEI’s James Pethokoukis said GOP candidates are no longer bothering to try and pay for giant tax cuts: http://politi.co/1PQoiar

Gene Sperling riffed on how Donald Trump is catering to people’s worst instincts: http://politi.co/20YEOsB

IS THE MARKET HITTING BOTTOM? — Wells Capital’s Jim Paulsen: “The S&P 500 hit fresh new intra-day and closing lows for this correction … We certainly do not know where or when this stock market will finally bottom and would not be surprised if the S&P ultimately breaches the 1800 level before a sustaining rally commences … However, we do think a bottom is nearing. … [T]he character of a market bottom is forming. Values have been significantly cheapened, investor sentiment has turned decidedly more fearful and a potential positive catalyst of better economic news may be on the horizon.”

BMO’s Jack Ablin: “The market selloff has gotten pretty emotional, particularly among individual investors. Recent readings from the American Association of Individual Investors show that bullishness among small investors is at its lowest level since the ‘flash crash.’ Who can blame them? Since the beginning of the year the S&P 500 is off about 10 percent and the small cap Russell 2000 is more than 15 percent lower.

“Considering the lack of good news, it’s heartening to see favorable action in the Smart Money index, which tracks stock market action in the first half hour of trading and compares it to the last half hour. … For all the terrible headlines, it appears that market action before the closing bell is much more positive than morning activity, indicating that the pros are accumulating stocks.”

MAYBE NOT — Bloomberg: “The global equity bear market deepened in Asian trading, with Japanese stocks headed for their worst week since 2008 amid anxiety over central banks’ ability to revive the world economy. U.S. crude rose from a 12-year low. The Topix index slumped 4.1 percent in Tokyo as traders returned from holiday, pushing the regional Asian benchmark toward its steepest weekly drop since gyrations in Chinese assets at the start of the year.

“The index pared some of its losses as the yen weakened for the first time this week. U.S. index futures indicated gains after losses there helped the MSCI All-Country Index cap a 20 percent slide from its May record. … Japanese Finance Minister Taro Aso said regulators will respond to market volatility if necessary after a move to negative rates failed to assuage anxieties last month” http://bloom.bg/1SLaGQz

MORE TREASURY TEA LEAVES — OK, at some point we will pump the brakes on Clinton Treasury Secretary talk. But not yet.

One sage Washington hand emails: “I think MM is right that the odds of HRC picking someone directly from the financial industry are low. But also missing from the discussion is the diversity factor. Treasury has never been headed by a woman or minority. The historic nature of the first female president nominating the first woman, African Amer., Hispanic, etc. will be tempting.

“In addition to Sandberg and Burwell, which MM mentioned earlier, HRC would likely consider diverse, accomplished candidates w/ non-Wall Street ties like Sam’s Club CEO Rosalind Brewer, Rhode Island Governor (and former State Treasurer) Gina Raimondo, Brainard, Tyson, CFTC Commissioner Sharon Bowen. Former Fed Vice Chair and current TIAA-CREF CEO Roger Ferguson and Citibank Exec Ray McGuire could also make a short-list”

And yet another smart person: “Amazing to me that no one has stated the obvious regarding Laura Tyson, Bill Clinton’s Chair of the Council of Economic Advisers & currently at Berkeley (which is as far as you can get from Wall Street). She has a long & positive relationship with the Clintons, & would be the first woman to be named SecTreas.”

And one more! “So if you do another round of this(!), Lael Brainard and Laura D’Andrea Tyson would be good additions to the mix.”

Last one for the day! “I am sure you don’t need one more name — but if HRC does win this election it will be on the back of minority voters — she will have to do something historic in her appointments. We have never had a black or Asian Treas Sec so how about some of these folks: Ken Chenault of Amex; Ajay Bhanga of MasterCard; Punit Renjen of Deloitte; Roger Ferguson; Ursula Burns, Xerox”

EVEN THE GOP HATES WALL STREET! — Bloomberg Businessweek’s Josh Green in a piece up at 6 a.m.: “Republicans up and down the ballot are trying to harness voters’ anger by criticizing Wall Street donors. The Republican presidential candidates have turned on the financial giants that have been their biggest benefactors — and are attacking one another for being too close to the financial industry” http://bloom.bg/20YLEhW

COMING SOON: MOHAMED A. EL-ERIAN EVENT — Save March 10th on your calendar for a great America’s Fiscal Future event at Nasdaq with Mohamed A. El-Erian, chief economic adviser at Allianz and author of the must-read new book “The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.” http://bit.ly/20O4uf0

POLITICO’s Colin Wilhelm on the “Big Short” in DC: “Director Adam McKay … was up on stage before about 300 of his closest D.C. friends Tuesday night for a showing of his (Oscar-nominated) movie adaptation of Michael Lewis’ book of the same name. Sens. Sherrod Brown (D-Oh.), Johnny Isakson (R-Ga.), Jack Reed (D-R.I.), and Roger Wicker (R-Miss.) provided bipartisan Congressional sponsorship for the event and introduced McKay, who joked the that he would’ve preferred if his 2008 comedy ‘Step Brothers’ were shown to Congress instead.

“‘The main reason I wanted to do this was so we don’t forget,’ said Brown, ranking member on the Senate Banking Committee, who also added that his home zip code in Cleveland was the hardest hit in the country by foreclosures in 2007. … ‘If something looks too good to be true, it probably is,’ said Isakson, who also gave the most succinct yet thorough synopsis of the 2008 financial crisis your correspondent has heard.”

THINK THE DEBT CEILING IS OVER? THINK AGAIN!! — POLITICO’s Ben Weyl: “Thought you didn’t have to pay attention to the debt limit until next year? Think again. It’s true that last year’s budget deal inked by President Barack Obama and on-his-way-out Speaker John Boehner raised the debt ceiling until about March 2017. But House Republicans are still angry with how the administration has handled the issue and they want to spotlight the ballooning federal debt.

“So … the House passed legislation (H.R. 3442) to require the Treasury secretary to testify before Congress within 60 days of the federal debt limit being reached and to present a plan to curb government red ink. The bill was backed on a near-party-line vote, and it faces an uncertain road in the Senate.”

LANGONE GOES KASICH — POLITICO’s Daniel Strauss: “Ohio Gov. John Kasich has secured the support of Home Depot co-founder Ken Langone, a megadonor who previously backed New Jersey Gov. Chris Christie. Kasich’s campaign announced that they had brought over Langone on Thursday. Langone, a brash and outspoken moderate Republican who brings his own network of like-minded donors, has an estimated net worth of $2.8 billion, according to Forbes.

“It’s a major coup for Kasich who, like Christie, has been running in the establishment lane in the Republican primary and also devoted most of his campaign efforts to a strong showing in the New Hampshire Republican primary. Kasich ended up in second place behind only Donald Trump, while Christie placed a disappointing sixth.”

MARKET SEES U.S. RECESSION (AND MIGHT CAUSE ONE) — WSJ’s Greg Ip: “Is the U.S. headed for recession? The markets suggest so. With Thursday’s selloff, the Dow Jones Industrial Average is now down 14.5 percent from its all-time high last May. Yields on risky bonds continue to climb, while investors have sought safety in U.S. Treasurys, sending those yields lower. And oil has hit a nearly 12½-year low. Yet the economic data show no recession. Job growth in January was healthy, and employers are having trouble filling vacancies.

“This dichotomy is neatly captured by two indexes compiled by Cornerstone Macro. One, using financial indicators such as the stock market and corporate bond yields, puts the probability the U.S. is now in recession at 50 percent. The other, which adds in macroeconomic data such as loan delinquencies and inflation-adjusted income, puts the probability at just 28 percent. Of course markets often wrongly predict recessions. But in some circumstances they can help bring them about” http://on.wsj.com/1XmO5ZA

CENTRAL BANKS FAILING? — NYT’s Landon Thomas, Jr.: “What if the bazooka is shooting blanks? Since the financial crisis, it has been gospel for many investors that some combination of actions by central banks — bond buying, bold promises or flirtations with negative interest rates — would be enough to keep the global economy out of recession. But investors’ distress over the latest volley by a major central bank, the surprise decision on Thursday by the Swedish central bank to lower its short-term rate to minus 0.50 percent from minus 0.35 percent, has heightened fears that brazen actions by central bankers are now making things worse, not better.

“Global stock markets sank, the price of oil plunged to a 13-year low and investors fled to safe haven instruments like gold and United States Treasury bills. Markets generally embrace conviction and run away from indecision — which is what many see in the policy making of some of the large central banks these days. The Swedish central bank, the Riksbank, for example, has been criticized in the past for prematurely raising rates, and Thursday’s rate cut was opposed by two bank deputies.” http://nyti.ms/1mvVb0f

JAMIE DIMON MAKES BIG BUY — FT’s Ben McLannahan: “Jamie Dimon has tried to put out a fire in financials stocks, spending more than $26m to buy half a million shares in JPMorgan Chase, the bank he has run for a decade. The purchase — confirmed in a filing on Thursday evening — is the first big open-market purchase Mr Dimon has made since the “London Whale” scandal four years ago, when the bank’s shares were knocked by the disclosure that a trading desk had racked up billions of dollars of losses. It will be seen as a statement by Mr Dimon that the global sell-off in bank shares has been overdone.

“JPMorgan, the biggest US bank by assets, has been caught up in the maelstrom, losing 17 per cent of its market value since the turn of the year. Wall Street analysts have been urging clients to resist the urge to ditch their bank stocks, while elder statesmen of the banking industry such as Dick Kovacevich, former head of Wells Fargo, have appealed for calm. Even so, the sector has continued to drop amid fears over China, plunging oil and the Bank of Japan’s embrace of negative interest rates” http://on.ft.com/1PqiAuE

ALSO FOR YOUR RADAR

CLINTON MONEY BLITZ — IBT’s David Sirota and Andrew Perez: “Clinton’s campaign is launching a fundraising blitz that includes events with representatives of industries that have significant business interests before the federal government. An International Business Times review of fundraising invitations found that the Clinton campaign’s nationwide tour includes events with corporate officials from the food, investment and energy sectors — all of which have vested financial interests in the policies that the next presidential administration will decide” http://bit.ly/1Ru613T

CHAMBER ON THE FIDUCIARY RULE — Via the U.S. Chamber: “The U.S. Chamber of Commerce is up with a new episode of its podcast series, “The Business Impact,” which features U.S. Chamber Center for Capital Markets Competitiveness President and CEO David Hirschmann who discusses the proposed rule and the impact it will have on small businesses” http://bit.ly/1IGXBDy

BANKS RACE TO BEAT THE TROLLS — Bloomberg Businesweek’s Susan Decker and Elizabeth Dexheimer: “Banks and Silicon Valley are on a collision course, the future of finance may be at stake, and one side is brandishing its most dreaded weapon: the PowerPoint presentation” http://bloom.bg/1TbYKpi

AIG BOWS TO ACTIVISTS — FT’s Alistair Gray: “The activist investors who have called on AIG to break itself up have secured seats on the insurer’s board after directors struck a deal to avoid a damaging fight with shareholders. John Paulson, the hedge fund manager, and a representative of the billionaire Carl Icahn are to become directors from May, AIG said on Thursday … People close to AIG billed the arrangement with its rebel shareholders as a truce that lessens the immediate pressure on directors to split apart the company” http://on.ft.com/1KJBwFP

POTUS Events

Let four days of golf and relaxation begin!

10:45 am || Departs Los Angeles
11:40 am || Arrives in Palm Springs, California

Floor Action

House back for votes between 11 a.m. and noon. Senate has a 5:30 p.m. vote.
Announcements

Reporting Health Coverage on IRS Tax Forms

While most taxpayers will simply need to check a box on their tax return to indicate they had health coverage for all of 2015, there are a few forms and specific lines on Forms 1040, 1040A, and 1040EZ that relate to the health care law.

To help navigate health coverage reporting, you should consider filing your return electronically.Using tax preparation software is the best and simplest way to file a complete and accurate tax return as it guides you through the process and does all the math. There are a variety of electronic filing options, including free volunteer assistance, IRS Free File for taxpayers who qualify, commercial software, and professional assistance.

Here is information about reporting health coverage:

Form 8965, Health Coverage Exemptions

  • Complete this form if you need to claim a coverage exemption on your return or report a Marketplace-granted coverage exemption.
  • Use the worksheet in the Form 8965 Instructions if you need to calculate the shared responsibility payment.

Form 8962, Premium Tax Credit

  • Complete this form to claim this credit on your tax return, and to reconcile advance payments of the premium tax credit.

Form 1095, Health Care information Forms

  • If you enrolled in coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement, which will help complete Form 8962. Wait to file until you receive this form.
  • Your health coverage provider or your employer may furnish you with a Form 1095-B, Health Coverage, or Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. You do not have to wait to receive these forms before your file your tax return.
  • See our questions and answers for more information about how these forms affect your tax return.

Form 1040

  • Line 46: Enter advance payments of the premium tax credit that must be repaid
  • Line 61: Report health coverage or enter individual shared responsibility payment
  • Line 69: Report net premium tax credit if the allowed premium tax credit is more than advance credit payments paid on your behalf

Form 1040-A

  • Line 29: Enter advance payments of the premium tax credit that must be repaid
  • Line 38: Report health coverage or enter individual shared responsibility payment
  • Line 45: Report net premium tax credit if the allowed premium tax credit is more than advance credit payments paid on your behalf

Form 1040-EZ

  • Line 11: Report health coverage or enter individual shared responsibility payment
  • Form 1040EZ cannot be used to report advance payments or to claim the premium tax credit

For more information about the Affordable Care Act and filing your 2015 income tax return visit IRS.gov/aca. Visit IRS.gov for more information on this topic if you file Form 1040-NR or 1040-NR-EZ.