Krebs Daily Briefing 23 November 2015


Soldiers patrol Brussels, guard EU buildings, as five held in raids

Soldiers patrolled the streets of Brussels and police detained five more people on the third day of a security lockdown on Monday, as Belgium hunted a suspected Islamist militant who has been on the run since the attacks in Paris. Authorities are still warning of possible imminent attacks like those in the French capital this month, in which 130 people were killed, and hunting Brussels barkeeper Salah Abdeslam, who returned to the city from Paris hours after the Nov. 13 attacks. Police did not find Abdeslam, whose brother blew himself up in Paris, in 22 raids late on Sunday when 16 people were detained. Five more people were arrested during searches of seven houses in the Brussels and Liege regions early on Monday. Police have given no details of those held. No weapons were found on Sunday but 26,000 euros in cash, found at a single site, was seized by prosecutors. The metro, museums, most cinemas and many shops will stay shut on Monday in the usually bustling EU capital where many staff have opted to work from home. There was also no school or university for almost 300,000 students. On the Grand Place, a historic central square that usually draws crowds of tourists, an armored military vehicle was parked under an illuminated Christmas tree. NATO, which had raised its alert level since the Paris attacks, said its headquarters in the city were open, but some of its 1,000 staff had been asked to work from home and external visits had been canceled. EU institutions, which employ some 21,000 people in Brussels, were also open with the soldiers patrolling outside.

Brussels on Lockdown

The city of Brussels and its suburbs remain on high alert as police searched for suspects in the Paris terrorist attacks. Belgian Prime Minister Charles Michel said Sunday that the area would stay at the highest terror alert level—level 4, which means a terrorist threat is “imminent and close by”—for now, according to Belgium’s national Crisis Center. Schools and universities in the Brussels region will be closed on Monday. Belgian authorities issued the alert on Sunday. They dispatched heavily armed soldiers to patrol the region and advised citizens to stay away from shops, train stations, airports, and other public spaces. They also closed the Brussels metro, which will not reopen Monday. The Brussels region has a population of about 1 million. The rest of Belgium will remain at a threat level of 3 (“possible and likely”). Officials had raised the countrywide alert from level 2 to level 3 several days after terrorists killed 130 people at a concert hall, outside a stadium, and in busy streets in the French capital on November 13. Belgian and French police have carried out dozens of raids in Brussels, Paris, and elsewhere in search of suspects in the deadly siege, the worst violence on French soil since World War II. They are looking for Salah Abdeslam, a 26-year-old Brussels resident who was last seen headed for the Belgian border hours after the siege in Paris. The suspected organizer of the attacks, Abdelhamid Abaaoud, a Belgian citizen, was killed during a French police raid Wednesday in the Paris suburb of St. Denis. Seven assailants died in the Paris attacks, including Abdeslam’s brother, Brahim, who detonated his suicide belt outside of a cafe. The threat alert is “unfortunately not” limited to Abdeslam, said Belgian Interior Minister Jan Jambon on Sunday. More:

Paris Attacks and Other Assaults Seen as Evidence of a Shift by ISIS

WASHINGTON — The recent attacks in Paris and Beirut and the downing of a Russian airliner in Egypt were the first results of a centrally planned terrorism campaign by a wing of the Islamic State leadership that oversees “external” targets, according to American and European intelligence officials. The Islamic State’s overseas operations planning cell offers strategic guidance, training and funding for actions aimed at inflicting the maximum possible civilian casualties, but leaves the task of picking the time, place and manner of the attacks largely to trusted operatives on the ground, the officials said. Carrying out attacks far from the Islamic State’s base in Iraq and Syria represents an evolution of the group’s previous model of exhorting followers to take up arms wherever they live — but without significant help from the group. And it upends the view held by the United States and its allies of the Islamic State as a regional threat, with a new assessment that the group poses a whole new set of risks. More:

Creditors Signal Potential Support for Overhauling Puerto Rico Debt

Some of Puerto Rico’s most influential creditors are for the first time signaling support for the broad outline of a government proposal to overhaul the island’s crushing debts. The San Juan government, squeezed by $72 billion in debt and a stagnant local economy, has been weighing whether to keep paying bondholders or defaulting, a move that could trigger dozens of lawsuits by creditors and drag out Puerto Rico’s fiscal problems for years. A $354 million payment is due on Dec. 1. Seeking to avoid protracted legal skirmishes, Puerto Rico officials have been trying to engage various creditors in deals that would avert default. In meetings with advisers to creditor groups on Friday, the government’s chief adviser, Jim Millstein, presented a proposal to exchange the island’s existing bonds for new debt that would be less burdensome to Puerto Rico. The proposal — at least in theory — was met favorably by holders of billions of dollars of general obligation bonds, according to people with direct knowledge of the group’s position who were not authorized to speak publicly. However, the government still needs to win over many other creditors, making a deal far from certain. General obligation bonds carry a guarantee in the Puerto Rico constitution stipulating that debt must be repaid before just about any other expense. Given that guarantee, general obligation holders have been expected to be among the creditors least likely to agree to a restructuring that might reduce the value of their bonds. But over the weekend, a group of about half a dozen hedge funds and other investment firms that own general obligation bonds signaled support for the concept of the government’s debt exchange, these people said. Among that group are Monarch Alternative Capital, Fundamental Credit Opportunities and Autonomy Capital.


 Going Soft on White-Collar Crime

On Wednesday, the House Judiciary Committee passed a measure that would severely weaken laws intended to punish – and deter – white-collar crime. Tucked into the bipartisan criminal justice overhaul package, the language could hamper federal prosecutors’ deployment of statutes that have been used for more than a century against fraudsters from Charles Ponzi to Bernard L. Madoff. The provision was rushed through before legal experts could provide meaningful insight on the impact these changes could have. Vocal opponents have already asserted that, if enacted, the law would undermine public health and safety and encourage business executives to remain willfully blind to criminal conduct and deliberately ignorant of the law. Protecting elite offenders seems incongruous with efforts to strengthen the criminal justice system that have drawn attention to staggering racial inequalities in our system and focused on addressing mass incarceration of those with the least societal power, an overhaul that includes reducing penalties for low-level, nonviolent drug offenses and expunging criminal records for juvenile offenders. The move also seems at odds with the prevailing excuse – the difficulty in proving intentional conduct – for not holding any high-level bankers criminally accountable in connection with the financial crisis. So who helped transform an honorable fight against structural racism into a “me too” moment for managerial miscreants? Apparently, the proponents include the right-leaning Heritage Foundation and other allies who are trying to leverage “sentencing reform” to achieve what they call “mens rea” reform. They have argued that droves of “morally blameless” individuals are imprisoned when they “unwittingly” commit acts that later turn out to be criminal. More:

Pfizer and Allergan Reach $150 Billion Merger Deal

Pfizer has clinched a blockbuster merger with a fellow drug maker, one worth more than $150 billion, that can best be described in superlatives. When it is announced — most likely on Monday, people briefed on the matter said — the deal to buy Allergan, the maker of Botox, would be one of the biggest ever takeovers in the health care industry. And it would be the largest acquisition yet in a banner year for mergers. Perhaps most important, it would be the biggest transaction aimed at helping an American company shed its United States corporate citizenship in an effort to lower its tax bill, in this case by billions of dollars. And it could become a flash point as the presidential race heats up. A deal would come as the Obama administration is trying to crack down on these kinds of deals, known on Wall Street and in Washington as corporate inversions. Last week, the Treasury Department and the Internal Revenue Service announced new rules meant to further clamp down on the benefits of such mergers. The government has already lost billions of dollars in corporate tax revenue from inversions, particularly over the last couple of years. New rules introduced earlier this year deterred some companies determined to pursue inversions, including AbbVie, a drug maker thatcalled off its planned $54 billion takeover of an Irish counterpart, Shire. Still, Treasury officials said as recently as last week that only Congress can halt inversions. Pfizer and Allergan are taking steps to sidestep the current rules altogether. Though Pfizer is significantly bigger, with a market value of $199 billion to Allergan’s $123 billion, it is Allergan that would technically be the buyer, according to the people briefed on the matter. Because Allergan already has its headquarters in Dublin — even though the bulk of its operations are based in Parsippany, N.J. — the planned transaction could avoid the Treasury rules, which apply to American companies that buy foreign companies.

Intel Lawsuit Questions Place of Hedge Funds in Retirement Plans

“We push the boundaries.” That’s how Intel Corporation, the respected Silicon Valley computing giant, describes its role as an innovator and creator of value for shareholders, customers and society. But pushing boundaries in another area — oversight of its $14.6 billion employee retirement plans — is bringing Intelunwanted scrutiny. Big bets on hedge funds and private equity in those plans drew alawsuit late last month from a former employee, Christopher M. Sulyma. He contends that these investments have increased risks and costs in the retirement portfolios, hurting plan participants. The lawsuit against Intel and members of its board who oversee the plan’s operation and investments is the latest in an increasingly successful line of actions brought against companies offering 401(k) plans to their workers. These cases have argued that the retirement plans were being run in a manner inconsistent with fiduciary requirements. While each lawsuit against a 401(k) plan sponsor varies, most involve high and often hidden fees levied on participants. The case against Intel has a different twist. At its heart is this question: Should hedge funds, private equity portfolios and commodities be anywhere near a 401(k) plan? More:

States Lead Effort to Let Pharmacists Prescribe Birth Control

Groundbreaking laws in two Western states will soon make access to birth control easier for millions of women by allowing them to obtain contraceptives from pharmacists without a doctor’s prescription. Even as the Supreme Court prepares to consider another divisive caseinvolving access to contraception, public health advocates hope these arrangements could spread across the country, as states grappling with persistently high rates of unintended pregnancy seek to increase access to birth control with measures that so far have been unavailable under federal law. Most Western countries require a doctor’s prescription for hormonal contraceptives like pills, patches and rings, but starting sometime in the next few months, women in California and Oregon will be able to obtain these types of birth control by getting a prescription directly from the pharmacist who dispenses them, a more convenient and potentially less expensive option than going to the doctor. Pharmacists will be authorized to prescribe contraceptives after a quick screening process in which women fill out a questionnaire about their health and medical histories. The contraceptives will be covered by insurance, as they are now. More:

The Accounting Rules That Bankrupt Cities

In November 2014, a Michigan bankruptcy judge confirmed a plan that allowed Detroit’s government to shed $7 billion in liabilities, averting a total financial collapse. One year later, however, many in Detroit are still dealing with the fallout of the massive debt reorganization. Among the many shortchanged by the city’s bankruptcy, Detroit’s retired municipal workers have gotten a particularly raw deal. The plan imposed deep cuts in future pension and health-care benefits. Perhaps more galling, it also required retirees to pay back a decade of interest they earned on city-sponsored retirement savings accounts. These so-called clawbacks averaged nearly $50,000 per retiree. In one circumstance, a retiree returned $96,000. These losses for retirees seem unusual, but many more like them could follow. The same accounting strategy that led Detroit to make unfulfilled promises is widely used by state and city legislators throughout the country. By using an accounting method known as cash-basis accounting, legislators project future spending without having to consider billions of dollars of long-term financial commitments, leaving many budgets balanced in name only. It may be easiest to think in terms of personal finance. Imagine you purchase a car for $20,000 in 2015, but under a special promotion no payments are due on your bill until 2018. In what year did you incur the $20,000 bill? Most people would say 2015, the year you acquired the car. That’s the answer mandated under accrual accounting, a method of financial reporting required of all public companies by the Financial Accounting Standards Board. But many state and city legislatures disagree. They operate with the conviction that a bill is not incurred until the money leaves your bank account to pay it. So if you choose not to pay the bill for your car until 2018, for accounting purposes the bill will only appear that year.

Edwards beats Vitter in Louisiana governor’s race

Democrat John Bel Edwards will be Louisiana’s next governor, bulldozing through scandal-tarred GOP Sen. David Vitter in Saturday’s election after a campaign dominated by Vitter’s 2007 prostitution scandal. The Associated Press called the contest as Edwards, a state representative, led Vitter 55 percent to 45 percent, with 57 percent of precincts reporting. Edwards’ victory shattered an unprecedented losing streak for his party in the Deep South, where a new statewide Democratic officeholder had not been elected since President Barack Obama was inaugurated in 2009. “God bless you; I am eternally grateful. I won’t let you down,” Edwards said at his victory party. “The people of Louisiana have chosen to believe that we can do better, and that as a result, we will be better.” Edwards, a West Point graduate who supports gun rights and opposes abortion rights, coupled a tailor-made biography and a perfect foil to hold off those long-term political tides, despite Republican attacks connecting him to Obama. Edwards and Democratic allies savaged Vitter’s credibility with repeated attacks on his character, including TV ads in which a narrator painted the election as a choice between “John Bel Edwards, who answered our country’s call and served as [an Army] Ranger … or David Vitter, who answered a prostitute’s call.” Vitter responded to the voters’ rebuke by announcing that he will retire from the Senate rather than seek reelection in 2016. “I’ve lost one political campaign in my life,” Vitter said. “And ironically, it’s the campaign that I’m most proud of, particularly the last few weeks fighting shoulder to shoulder with all of you.” “I’m eager to refocus on the important work of the United States Senate,” Vitter continued. “I’m only going to be doing that for one more year, through the end of this term.”


Protester gets punched at Trump rally. Trump: “Maybe he deserved to get roughed up”

 Yesterday, at a Donald Trump rally in Birmingham, AL, a local activist named Mercutio Southall Jr. started shouting “Black Lives Matter!” as Donald Trump spoke. What followed was a physical altercation between Southall and Trump supporters, captured on camera by a CNN reporter in the crowd. The video makes it a little hard to tell how the fight started, but by the Washington Post’s account “a white man punched and attempted to choke” Southall. On Sunday morning, Fox News host Ed Henry asked Trump about the incident: “of an African-American protester from Black Lives Matter who appears to have gotten roughed up.” At first, Trump appeared to be ambivalent about the term “roughed up,” but then he warmed up to it:“Maybe he should have been roughed up.” Here’s a transcript of the relevant part of Trump’s response, via Media Matters:  I will tell you that the man that was — was I don’t know you say roughed up, he was so obnoxious and so loud, he was screaming. I had 10,000 people in the room yesterday, 10,000 people, and this guy started screaming by himself and they — I don’t know, rough up, he should have been — maybe he should have been roughed up because it was absolutely disgusting what he was doing. This was not handled the way Bernie Sanders handled his problem, I will tell you, but I have a lot of fans and they were not happy about it. And this was a very obnoxious guy, who was a troublemaker, was looking to make trouble, but I didn’t get to see the event. Trump supporters have a history of “roughing” people up — and Trump has a history of excusing it. See video:


After 2012, the GOP Set Out to Be More Inclusive. What Happened?

Poor Reince Priebus. After Mitt Romney’s loss to Barack Obama in 2012, Priebus, the head of the Republican National Committee, touted his shiny new 100-page report on reinventing the GOP at the National Press Club in March 2013. It was called the “Growth and Opportunity Project.” Priebus’ message was earnest and direct: The GOP needed to practice inclusion, not exclusion, if it was to have any chance of winning the presidency. “We need to campaign among Hispanic, black, Asian, and gay Americans and demonstrate we care about them, too,” the report said. “We must recruit more candidates who come from minority communities. But it is not just tone that counts. Policy always matters.” That was then. In the meantime, the GOP’s leading presidential contenders have serially and successfully thumbed their collective noses at the party establishment. Already Donald Trump and Ben Carson have upended the race with stands like castigating illegal immigrants. But amid widespread fear of terrorism triggered by the horrific terrorist attacks in Paris, the GOP is now mired in its ugliest intra-party debate yet—about whether Muslims living in the United States constitute a potential Fifth Column. More:



Alabama Considers a Step Back From Prosecuting Pregnant Drug Users

A health task force appointed by Alabama’s Republican governor is weighing proposals that could dramatically reform the nation’s harshest law against drug use during pregnancy, with a draft bill expected by the beginning of the February 2016 legislative session. ProPublica wrote about problems with the state’s chemical endangerment law in September in partnership with The law makes it a felony to “knowingly, recklessly, or intentionally” expose a child to controlled substances or drug-making chemicals. Sentences are tough: up to 10 years in prison if a child is unharmed and 99 years if a child dies. The 2006 statute was initially aimed at parents who exposed children to methamphetamine labs, then was reinterpreted by prosecutors and courts to target women who used drugs during pregnancy. That shift, combined with a lack of law-enforcement guidelines, has led to wide disparities in how the law is used, including instances of overreach and abuse. Nearly 500 women have been arrested for pregnancy-related drug use since 2006, many turned over by hospitals that conducted legally dubious drug tests. Some have faced bails of $100,000 to $500,000, even when they had no prior record and their babies were fine. Because chemical endangerment is considered a form of child abuse, accused mothers have lost custody of their newborns and other children. Women can even be charged if they take controlled substances such as opiate painkillers and methadone prescribed by a doctor. Civil rights groups and public health experts have blasted the law, saying it does nothing to address the underlying problems of poverty and addiction. They say it discourages women most in need of prenatal care from getting it and burdens families with crushing fees and fines that increase economic stress and make recovery more difficult. The proposals under discussion by a subcommittee of the Governor’s Health Care Improvement Task Force take aim at some of those issues. At a meeting of the task force Wednesday, Dr. Darlene Traffanstedt, a Birmingham-area internist who heads the subcommittee on quality of care, said her group is considering three proposals. More:

Macon County sheriff’s lawyer rips AG Luther Strange for VictoryLand appeal

A lawyer for Macon County Sheriff Andre Brunson said today that Attorney General Luther Strange’s appeal in the VictoryLand electronic bingo case has no merit and is a waste of taxpayer money. “Macon County is tired of Attorney General Luther Strange causing the residents of Macon County and east Alabama to suffer by destroying their livelihoods in his political pursuit of VictoryLand,” lawyer James Anderson said in a statement. Anderson, who lost to Strange in the 2010 race for attorney general, said the constitutional amendment passed by Macon County voters made the sheriff the authority for determining the legality of different forms of bingo, including electronic. VictoryLand owner Milton McGregor also released a statement, saying Circuit Judge William Shashy’s ruling was “crystal clear.” “The attorney general’s effort to push his political agenda at taxpayers’ expense is unfortunate, but it will not have any effect on the work we’re doing to put people back to work very soon,” McGregor said. McGregor said VictoryLand has taken more than 4,000 job applications and will soon be hiring. The attorney general’s office declined comment today, other than to say that its appeal speaks for itself and that the Alabama Supreme Court would have the final say. Shashy ordered the state to return 1,615 machines and $263,105 seized from the casino in February 2013. The order is on hold pending the state’s appeal. Shashy, a Montgomery County judge appointed by the Supreme Court to handle the case, found that the seized machines were legal under a constitutional amendment approved by Macon County voters in 2003. The state contends the devices are slot machines, which are illegal in Alabama. The state says the seized machines don’t meet a six-point legal test for bingo. The Supreme Court established the test in a 2009 decision in a Lowndes County case, Barber v. Cornerstone Community Outreach, Inc. The test essentially allows traditional bingo, with competing players listening for numbers drawn at random, marking their cards and announcing when they have won. The machines seized from VictoryLand, which look similar to slot machines, only require players to press a button and watch spinning reels or similar displays while the machines determine whether there’s a winning pattern on a small bingo grid. The games “do not remotely resemble the traditional game of bingo,” the state argued. But Anderson said the Macon County amendment, which is Amendment 744 to the state Constitution, makes the sheriff the authority and the Cornerstone test does not apply. The amendment says, “The sheriff shall promulgate rules and regulations for the licensing and operation of bingo games within the county.” Former Macon County Sheriff David Warren wrote those rules, last revised in 2012. The rules define bingo as a game played with a five-by-five grid for marking randomly drawn numbers or symbols, with a predetermined pattern needed to win. It can be any form of bingo legal under federal law, including electronic, the rules say. Spinning reels and other graphics are permitted but must not affect the outcome. Players must compete against other players, so the machines have to be linked. “So it’s up to the sheriff to come up with what the rules and regulations for those games are,” Anderson said. In its appeal, the state argued that the “common, ordinary meaning” of bingo, which fits the six-point test, must apply in every county with an amendment. Amendment 744 does not mention electronic bingo. Lawmakers could have added electronic bingo to the amendment if the intent was to make it legal, the state argued. Shashy, in ruling against the state, also determined that the state was “cherry-picking” its enforcement because, according to evidence heard in court, about 1,800 of the same machines were in operation at facilities in Lowndes and Greene counties as of July. Shashy noted that the state had earlier allowed a Houston County facility and two in Greene County to use the same machines for about three years each and that VictoryLand was shut down for most of that time. The state disputes the claim of unequal enforcement because it has raided and closed casinos in those counties, only to later see them reopen. Three casinos operated by the Poarch Band of Creek Indians in Alabama use electronic bingo machines similar to VictoryLand’s. Strange sued the tribe in federal court, but the courts ruled the tribe had sovereign immunity from the state’s claims, and the case was dismissed. VictoryLand expects to file its response to the state’s appeal by about Dec. 17. The state would then have 14 days to file a response. The court could order oral arguments, although the state did not request them.

ALEA Secretary sides with governor on refugees, says Alabama faces no threats currently

Secretary of Law Enforcement Spencer Collier defended the governor’s positions on Syrian refugees on Friday. It’s a popular saying in home land security and its true. “They only have to be right once, we only have to be wrong once,” Collier said. One week after the attacks in Paris left more than 100 people dead, Governor Bentley called for increased security at college football games on Friday. Collier said the key to the state’s security might be the Alabama Fusion Center. The center, which is under ALEA, is a communication hub that consolidates the information from local, state and federal officials. “So we are sharing information with our partners at the federal level or with our partners at the local level and the opposite is true as well,“ Collier said. Collier says communication is key, and the Fusion Center works to make sure everyone is on the same page. Each state has at least one Fusion center, with states like New York and California having multiple centers. Secretary Collier said the the biggest concern for the country is people who have become self radicalized on the internet, who take it a step farther to attack soft targets. Collier said he supports the governor’s choice to not allow Syrian Refugees into Alabama, although Collier said it may be hard to tell if one enters the state. “There is no requirement for any of these organizations that have taken refugees to notify local law enforcement or state law enforcement, so that part is concerning,” Collier said. “Our national interest, is our national interest. It’s the homeland.” Many Syrians are fleeing their country under the threat of ISIS or an oppressive regime. In order to come to the United States, they need to go through a multi-tiered vetting process, first by the UN, and then by various US agencies. The process usually takes 18-24 months with many not qualifying. Of the 1,800 Syrian Refugees taken since the beginning of the civil war, around two percent have been males deemed in the “fighting age.” President Obama said he wanted to accept 10,000 refugees, and some are concerned about the ability to properly vet that many people. However, Collier realizes coming up with a balance between social responsibility and public safety is hard. Currently there are no Syrian refugees in the state.



Nation with Crumbling Bridges and Roads Excited to Build Giant Wall

 WASHINGTON (The Borowitz Report)—As America’s bridges, roads, and other infrastructure dangerously deteriorate from decades of neglect, there is a mounting sense of urgency that it is time to build a giant wall. Across the U.S., whose rail system is a rickety antique plagued by deadly accidents, Americans are increasingly recognizing that building a wall with Mexico, and possibly another one with Canada, should be the country’s top priority. Harland Dorrinson, the executive director of a Washington-based think tank called the Center for Responsible Immigration, believes that most Americans favor the building of border walls over extravagant pet projects like structurally sound freeway overpasses.

“The estimated cost of a border wall with Mexico is five billion dollars,” he said. “We could easily blow the same amount of money on infrastructure repairs and have nothing to show for it but functioning highways.” Congress has dragged its feet on infrastructure spending in recent years, but Dorrinson senses growing support in Washington for building a giant border wall. “Even if for some reason we don’t get the Mexicans to pay for it, five billion is a steal,” he said. While some think that America’s declining infrastructure is a national-security threat, Dorrinson strongly disagrees. “If immigrants somehow get over the wall, the condition of our bridges and roads will keep them from getting very far,” he said.


Trump isn’t the craziest Alabama’s seen, but he might be the meanest

Back when Larry Langford was still mayor of Birmingham, I had a little game I played with my coworkers. Call it Leapin’ Larry’s Believe It or Not. Each time I’d return from City Hall, I’d bring back some new zany new plan Langford had come up with that day, and they’d have to guess whether I was making it up. An aquarium, complete with Beluga whales just like Atlanta’s aquarium! Or … Our very own Pentagon — an actual five-sided fortress — for the police, fire department and public works!  Or … Our own Trevi Fountain in Linn Park! But the joke was that I never made anything up. No matter how whacky or whacked-out the new plan was, it was always real, at least in Leapin’ Larry’s mind. But then things began to get weird. One evening, I ran into one of my media pals at Lou’s Pub. If anyone is going to top Trump’s crazy, somebody has to spring Larry Langford from prison. “Did you hear Larry Langford is going to bring the Olympics to Birmingham?” he said. I thought it was a joke, but the script had been flipped. It was my turn to play the game. “Heck,” I said, “They could put the Olympic torch in Vulcan’s hand.” The next day, Langford went on Finebaum to make his case for the 2020 Olympics. He had an answer for every question, even where they’d put the torch — in Vulcan’s hand. You see, you couldn’t make it up. If you tried, Larry would catch up with you, then lap you twice to make sure you never got in front of his crazy again. Somewhere in his twisted mind, Langford believed he’d run for president someday, and now I can’t help but imagine if it hadn’t been for his legal troubles, he might have had a chance. Because if there was one person in the world who could out-crazy the current GOP crop of candidates, it would have been Langford. Ignore for a moment the Rolex watch bought by his investment banker pal Bill Blount. Don’t get distracted by the alligator shoes. No matter if he helped drive a county into a record-setting Chapter 9 municipal bankruptcy, Larry’s brand of crazy was unstoppable. However, it was kinder and gentler than what sells in the public square today. Yes, I’m talking about Donald Trump. It’s the same kind of patent leather shysterism that Langford sold, but meaner, more vile. Where Langford needled voters’ insecurity and played their hopes against them, Trump goes deeper down into darker places. And again it seems like we’re playing the Believe It or Not Game. Did you hear that Donald Trump said Megyn Kelly laid into him because she was on her period? Or … Did you hear Trump say that vaccines cause autism? Or … Did you hear Trump promise to build a Great Wall of Mexico and make the Mexicans pay for it?  Or … Did you hear Trump call POW’s like John McCain losers?  Or … Did you hear Trump say he’d make Muslims register with the government?  It makes you wonder what’s next. Making them wear little crescent moon patches on their lapels? But don’t go there, because this man cannot be parodied. His absurdity cannot be topped. Any attempt to do so only seeds the ground with new ideas. Like with Leapin’ Larry, what’s a joke today might well be a campaign promise tomorrow. But this time, it’s not a game, and I don’t want to play anymore.

Morning Money

TRUMP’S WEEKEND — In case you somehow missed it, Donald Trump this weekend suggested it was A-OK that attendees at one of his events in Alabama “roughed up” a Black Lives Matter protester, cleared up any controversy by saying he would absolutely consider making all Muslims in the U.S. register in a database, retweeted grossly inaccurate statistics on the racial breakdown of murders in the United States and again said (completely erroneously) that thousands of Muslims in New Jersey cheered for 9/11. Will any of these things hurt his poll numbers? Probably not.

But every time Trump strides deeper into the darker corners of the American electorate the harder it will be for him to ever galvanize the entire Republican party and actually win the nomination, not to mention the White House. Keep your eye on Ted Cruz who has surged into second place in Iowa according to the latest CBS News poll. Marco Rubio comes in third and could still eventually find himself in a one-on-one fight with Cruz if he can get his fundraising together. Speaking of that …

… BUSH VS RUBIO IN NYC — A source sent M.M. two photographs of recent NYC events, one for Marco Rubio and one for Jeb Bush. The source said Bush raised $300,00 at his and Rubio $100,000 at his. A Rubio source says the number was actually higher but declined to provide a figure. The photos … Bush: / Rubio:

BELGIUM REMAINS ON HIGH ALERT — POLITICO Europe’s Giulia Paravicini and Craig Winneker: “Brussels will remain on high alert on Monday, with schools and the metro system closed, because of an ‘imminent and high’ risk of terrorist attack as security services continue the hunt for Salah Abdeslam, who is suspected of links to the Paris attacks. … Belgian Prime Minister Charles Michel said late Sunday that the decision to extend the state of alert, first imposed in the early hours of Saturday, had been taken because of the continued threat of an ‘attack similar to the one which took place in Paris, with attacks that could be launched simultaneously in several places.’

“Heavily-armed soldiers and police, backed up by armored cars, have been patrolling the streets of Brussels since Saturday morning, when the city was put on the highest state of terror alert — level 4. Large shopping areas and stores were closed, public events and concerts were canceled, and many shops and restaurants also shut their doors to business. Brussels residents have been advised to avoid large crowds and places like airports and train stations, and to exercise caution throughout the city”

SHOULD WE FREAK OUT ABOUT INFLATION? — Pantheon’s Ian Shepherdson: “Should you be feeling in the mood to panic over inflation risks … consider the following scenario. First, assume that the uptick in wages reported in October really does mark the start of the long-awaited sustained acceleration promised by a 5% unemployment rate and employers’ difficulty in finding people to hire.

“Second, assume that the rental property market remains extremely tight. Third, assume that the abrupt upturn in medical costs in the October CPI is a harbinger of things to come. And finally, assume that the Fed hawks are right in their view that the initial increase in interest rates will — to quote the September FOMC minutes — ‘ … spur, rather than restrain economic activity’. Under these conditions, what happens to inflation? The short answer is that it rockets next year”

PFIZER/ALLERGAN CLOSE IN ON GIANT INVERSION — WSJ’s Jonathan D. Rockoff and Dana Mattioli: “Pfizer Inc. and Allergan PLC are on the cusp of striking a merger deal worth more than $150 billion that would create the world’s biggest drug maker by sales … The final terms of the deal include 11.3 Pfizer shares for every Allergan share … The deal also contains a small cash component … The boards of each company are expected to approve the agreement Sunday and it could be announced Monday.

“The takeover would be the largest so-called inversion ever. Such deals enable a U.S. company to move abroad and take advantage of a lower corporate tax rate elsewhere, and have remained popular in the face of U.S. efforts to curb them. To help secure that lower tax rate, the deal will be technically structured as a reverse merger, with Dublin-based Allergan buying New York-based Pfizer … Pfizer Chief Executive Ian Read will lead the combined company with Allergan CEO Brent Saunders serving as his No. 2 … Other Allergan executives are expected to join the firm too.”

TRUMP STILL LEADS — WP’s Dan Balz and Scott Clement: “For the fourth consecutive month, businessman Donald Trump leads the contest for the Republican presidential nomination, with his candidacy fueled by a powerful anti-Washington mood among GOP voters, according to a new national poll by The Washington Post and ABC News. After a tumultuous period that has included terrorist attacks in Paris, calls for stepped-up efforts to combat Islamic State militants, a backlash against accepting refugees from Syria, and two Republican debates, the race looks on the surface very much as it did in a Post-ABC survey a month ago.

“Trump runs ahead of the large field with 32 percent support among registered Republicans and Republican-leaning independents. Running second is retired neurosurgeon Ben Carson at 22 percent. Both figures are identical to last month. Sen. Marco Rubio (Fla.) is the only other Republican in double digits, inching up from 10 to 11 percent over the past month. Sen. Ted Cruz (Tex.) runs fourth, with 8 percent, up from 6 percent in October. Former Florida governor Jeb Bush is fifth, with 6 percent

GOOD MONDAY MORNING — Welcome to a shortened Thanksgiving week. We’ll be dark Thursday and Friday. Email me on and follow me on Twitter @morningmoneyben.

BIG WEEK FOR HOLLANDE — Bloomberg: “French President Francois Hollande faces the challenge of knitting together a coherent coalition with a durable strategy for tackling the Islamic State in meetings this week with the leaders of France’s closest allies as well as Russia’s Vladimir Putin. Ten days after terrorists killed 130 people in and around Paris, Hollande hosts British Prime Minister David Cameron for a working breakfast in the French capital Monday, before seeing President Barack Obama Tuesday in Washington and German Chancellor Angela Merkel in Paris on Wednesday. He meets Putin in Moscow Thursday.

“With the U.S. refusing military cooperation with Russia, Hollande faces no simple task. While the Islamic State controls large parts of Syria and Iraq and is attributed as the force behind the Paris attacks and possibly the downing of a Russian airliner in Egypt’s Sinai dessert, Obama said Putin needs to make a ;fundamental shift’ in his support for Syrian President Bashar al-Assad before joint action can be considered.”

MACRI WINS IN ARGENTINA — FT Benedict Mander in Buenos Aires: “Mauricio Macri, the centre-right mayor of Buenos Aires who has vowed to bring change to Argentina, won presidential elections on Sunday, marking the beginning of a new political era for South America’s second-largest economy. … The 56-year-old son of an Italian construction magnate won 51.6 per cent of the vote, leaving Daniel Scioli, the government-backed governor of the province of Buenos Aires, on 48.3 per cent, with more than 97 per cent of the vote counted. …

“The victory for the former president of Boca Juniors, one of Argentina’s most popular football clubs, brings an end to 12 years of populist rule by the outgoing leftist president, Cristina Fernández, and her late husband and predecessor, Néstor Kirchner, who took power in 2003 in the wake of a devastating economic crisis. The shift to the right in Argentina comes as many leftwing leaders in Latin America, especially in Brazil and Venezuela, are suffering plunging popularity ratings and tanking economies as the resource-rich region adjusts to the end of a decade-long economic boom spurred by high commodity prices”

THE COMING POPULATION CRUNCH — WSJ’s Greg Ip: “Ever since the global financial crisis, economists have groped for reasons to explain why growth in the U.S. and abroad has repeatedly disappointed, citing everything from fiscal austerity to the euro meltdown. They are now coming to realize that one of the stiffest headwinds is also one of the hardest to overcome: demographics. … Next year, the world’s advanced economies will reach a critical milestone. For the first time since 1950, their combined working-age population will decline, according to United Nations projections, and by 2050 it will shrink 5%.

“The ranks of workers will also fall in key emerging markets, such as China and Russia. At the same time the share of these countries’ population over 65 will skyrocket. Previous generations fretted about the world having too many people. Today’s problem is too few. This reflects two long-established trends: lengthening lifespans and declining fertility. Yet many of the economic consequences are only now apparent. Simply put, companies are running out of workers, customers or both. In either case, economic growth suffers. As a population ages, what people buy also changes, shifting more demand toward services such as health care and away from durable goods such as cars.”

MORE ON THE IMPACT OF PARIS — Mohamed A. El-Erian in Business Insider: “In its first full week since the horrible Paris tragedy, the Dow Jones equity index registered one of its better weekly gains in four years. Meanwhile, some parts of the bond market are expressing greater concerns about corporate and general economic prospects, as is the commodity segment. The explanation for this divergence lies in two factors that have consistently been major price setters since the global financial crisis: corporate cash and central banks.

“The immediate economic impact of last Friday’s Paris atrocities is to lower French GDP growth, to place some pressure on the budget, and to increase the deflationary threat to Europe. Having said that, most of these short-term outcomes are expected to be both temporary and reversible.”

HEDGE FUNDS POACH FROM SILICON VALLEY — FT’s Robin Wigglesworth: “Hedge funds and asset managers are scrambling to poach talent from Silicon Valley and attract computer scientists fresh from college to capitalise on the investment industry’s hottest frontier. So-called quantitative financiers, or quants, have for years come up with innovative, complex ways to analyse and trade on company earnings or economic releases. But thanks to huge gains in computing power and algorithmic research, they are now pushing into ‘unstructured data’ such as internet searches, social media, satellite images, earnings calls or weather patterns to find market signals and overlooked trading opportunities.

“To do so they need to deploy innovative, increasingly powerful quasi-artificial intelligence algorithms, ratcheting up demand for computer scientists to do coding that is beyond mathematicians and physicists. … Two Sigma, a $28bn hedge fund, and BlackRock, the world’s biggest asset manager, earlier this year snapped up two former Google engineers, underscoring the mounting demand for computer scientists to help gain a digital edge in the cut-throat money management industry”

CREDITORS COULD BACK PUERTO RICO DEAL — NYT’s Michael Corkery: “Some of Puerto Rico’s most influential creditors are for the first time signaling support for the broad outline of a government proposal to overhaul the island’s crushing debts. The San Juan government, squeezed by $72 billion in debt and a stagnant local economy, has been weighing whether to keep paying bondholders or defaulting, a move that could trigger dozens of lawsuits by creditors and drag out Puerto Rico’s fiscal problems for years. A $354 million payment is due on Dec. 1.

“Seeking to avoid protracted legal skirmishes, Puerto Rico officials have been trying to engage various creditors in deals that would avert default. In meetings with advisers to creditor groups on Friday, the government’s chief adviser, Jim Millstein, presented a proposal to exchange the island’s existing bonds for new debt that would be less burdensome to Puerto Rico. … The proposal — at least in theory — was met favorably by holders of billions of dollars of general obligation bonds, according to people with direct knowledge of the group’s position who were not authorized to speak publicly. However, the government still needs to win over many other creditors, making a deal far from certain.”

POTUS Events

12:15 am || Arrives at the White House from his trip to Asia

All times Eastern
Live stream of White House briefing at 12:45 pm

Floor Action

Congress out for Thanksgiving break.