Krebs Daily Briefing 25 January 2016

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


Iran‘s President Is in Europe to Sign Some Million-Dollar Deals, Despite Rights Concerns

Iran’s President Hassan Rouhani arrived in Europe on Monday to make the case for his country as a potential investment bonanza, after the lifting of financial sanctions brought the nation back into the world of global commerce. Campaigners and analysts have warned, however, that the nation’s dire human rights record — it executes more people per capita than any other country in the world — and its militarized industrial sector lacking in labor rights should not be ignored as the world scrambles to get a piece of the new desirable market in the Middle East. Accompanied by Iranian entrepreneurs, Rouhani will meet Italian Prime Minister Matteo Renzi, Pope Francis, and French President Francois Hollande, in the first visit to Europe by an Iranian president in 16 years. Senior Iranian officials have said the country is aiming to sign a deal with Airbus to buy 114 planes, while an Italian government official said Rouhani may sign as many as 12 deals worth $18 billion with different companies. Iran also plans to eventually buy up to 100 planes from Boeing, Deputy Transport Minister Asghar Fakhrieh Kashan said at an aviation conference on the eve of the visit. “Important contracts will probably be signed on this trip including with Peugeot and Renault,” Rouhani told reporters at Tehran’s Mehrabad Airport before setting off, reported AFP. News agency Tasnim reported on Sunday that Iran Khodro, the biggest car manufacturer in the Middle East, and French car maker Peugeot, had signed an initial agreement worth $545 million to jointly produce cars.

U.S. Relies Heavily on Saudi Money to Support Syrian Rebels

WASHINGTON — When President Obama secretly authorized the Central Intelligence Agency to begin arming Syria’s embattled rebels in 2013, the spy agency knew it would have a willing partner to help pay for the covert operation. It was the same partner the C.I.A. has relied on for decades for money and discretion in far-off conflicts: the Kingdom of Saudi Arabia. Since then, the C.I.A. and its Saudi counterpart have maintained an unusual arrangement for the rebel-training mission, which the Americans have code-named Timber Sycamore. Under the deal, current and former administration officials said, the Saudis contribute both weapons and large sums of money, and the C.I.A takes the lead in training the rebels on AK-47 assault rifles and tank-destroying missiles. The support for the Syrian rebels is only the latest chapter in the decadeslong relationship between the spy services of Saudi Arabia and the United States, an alliance that has endured through the Iran-contra scandal, support for the mujahedeen against the Soviets in Afghanistan and proxy fights in Africa. Sometimes, as in Syria, the two countries have worked in concert. In others, Saudi Arabia has simply written checks underwriting American covert activities. The joint arming and training program, which other Middle East nations contribute money to, continues as America’s relations with Saudi Arabia — and the kingdom’s place in the region — are in flux. The old ties of cheap oil and geopolitics that have long bound the countries together have loosened as America’s dependence on foreign oil declines and the Obama administration tiptoes toward a diplomatic rapprochement with Iran. More:

Gold Is Back in Fashion After a $15 Trillion Global Selloff

The $15 trillion rout in global equity markets since May is reawakening the lure of gold for investors seeking safety. Hedge funds more than doubled their net-long position in bullion last week, just three weeks after they were the most-bearish ever. Investor holdings of gold through exchange-traded products are expanding at the fastest pace in a year, and the value of the ETPs has jumped by $3 billion in 2016. Bullion has seen a revival of its appeal as a haven after being mainly ignored last year in the face of the Paris terror attacks in November and the Greek bailout negotiations in July. This time around, concerns about global markets will support the metal, Citigroup Inc. analysts led by Ed Morse said last week as they raised their 2016 price forecast. “People have become complacent about risks, whether it’s macroeconomic and geopolitical,” said George Milling-Stanley, the Boston-based head of gold investments at State Street Global Advisors, which oversees $2.4 trillion. “What’s out of fashion may be coming back. That atmosphere of people feeling completely calm and untroubled, I think, is starting to go away. Gold is a very good risk-off trade, and I think people are starting to look very, very carefully at the risky positions that they have on a number of other markets.” More:

Crossing the Mexican-American Border, Every Day

EL PASO, Texas—She leaves university around 5 p.m., just as the sun is falling behind the dark mountains to the south, and steers her white Honda Civic down the hill toward the border. It’s a short drive, maybe 10 minutes, past the fast-food restaurants and strip malls of El Paso and over the I-10, where Texans sit in traffic to head home to the suburbs, then alongside the two fences—electric and brown metal—that divide Texas from Mexico. Then, she waits. Valeria Padilla is accustomed to waiting—for four years she has commuted from the home she shares with her mother and grandmother in Ciudad Juarez to the campus of the University of Texas-El Paso, where she, like many other Mexican nationals, qualifies for in-state tuition. But the wait used to be to get into the United States. Now, she waits to get out, too. “It’s horrible right now. It’s like, ‘no, no, no to crossing,’” she tells me, as she sits in the long line of cars waiting to get out of the United States. Wait-times to get into Mexico have become longer after U.S. Customs and Border Protection began requiring Mexican agents to check cars entering Mexico for guns and money, according to Tony Payan, the director of the Mexico Institute at Rice University. More:



Supreme Court backs electricity-saving rule

The Supreme Court today rescued an administration-supported rule that promotes electricity conservation, handing a big victory to environmentalists and President Barack Obama.

The 6-2 decision overturned a federal appeals panel ruling and affirmed the Federal Energy Regulatory Commission’s authority to incentivize programs that reduce power consumption during peak demand periods by paying large users to curb their demand. Although states could opt out of FERC’s regulation, the lower court argued that the agency had overstepped its powers. Those “demand response” programs help grid operators avoid blackouts and keep consumer costs down, reducing the need for generators to turn on older, dirtier power plants.


What Donald Rumsfeld Knew We Didn’t Know About Iraq

On September 9, 2002, as the George W. Bush administration was launching its campaign to invade Iraq, a classified report landed on the desk of the chairman of the Joint Chiefs of Staff. It came from Defense Secretary Donald Rumsfeld, and it carried an ominous note. “Please take a look at this material as to what we don’t know about WMD,” Rumsfeld wrote to Air Force General Richard Myers. “It is big.”

The report was an inventory of what U.S. intelligence knew—or more importantly didn’t know—about Iraqi weapons of mass destruction. Its assessment was blunt: “We’ve struggled to estimate the unknowns. … We range from 0% to about 75% knowledge on various aspects of their program.” Myers already knew about the report. The Joint Staff’s director for intelligence had prepared it, but Rumsfeld’s urgent tone said a great deal about how seriously the head of the Defense Department viewed the report’s potential to undermine the Bush administration’s case for war. But he never shared the eight-page report with key members of the administration such as then-Secretary of State Colin Powell or top officials at the CIA, according to multiple sources at the State Department, White House and CIA who agreed to speak on condition of anonymity. Instead, the report disappeared, and with it a potentially powerful counter-narrative to the administration’s argument that Saddam Hussein’s nuclear, chemical and biological weapons posed a grave threat to the U.S. and its allies, which was beginning to gain traction in major news outlets, led by The New York Times. While the threat posed by a nuclear-armed Iraq was at the heart of the administration’s case for war, the JCS report conceded: “Our knowledge of the Iraqi (nuclear) weapons program is based largely—perhaps 90%—on analysis of imprecise intelligence.” More:


Bloomberg, Sensing an Opening, Revisits a Potential White House Run

Michael R. Bloomberg has instructed advisers to draw up plans for a potential independent campaign in this year’s presidential race. His advisers and associates said he was galled by Donald J. Trump’sdominance of the Republican field, and troubled by Hillary Clinton’s stumbles and the rise of Senator Bernie Sanders of Vermont on the Democratic side. Mr. Bloomberg, the billionaire former mayor of New York City, has in the past contemplated running for the White House on a third-party ticket, but always concluded he could not win. A confluence of unlikely events in the 2016 election, however, has given new impetus to his presidential aspirations. Mr. Bloomberg, 73, has already taken concrete steps toward a possible campaign, and has indicated to friends and allies that he would be willing to spend at least $1 billion of his fortune on it, according to people briefed on his deliberations who spoke on the condition of anonymity because they were not authorized to discuss his plans. He has set a deadline for making a final decision in early March, the latest point at which advisers believe Mr. Bloomberg could enter the race and still qualify to appear as an independent candidate on the ballot in all 50 states. He has retained a consultant to help him explore getting his name on those ballots, and his aides have done a detailed study of past third-party bids. Mr. Bloomberg commissioned a poll in December to see how he might fare against Mr. Trump and Mrs. Clinton, and he intends to conduct another round of polling after the New Hampshire primary on Feb. 9 to gauge whether there is indeed an opening for him, according to two people familiar with his intentions. More:

Shelby Wants Obama to Fill Fed Slot Before Ex-Im Board Action

Senate Banking Chairman Richard Shelby said Thursday he’ll keep pushing for the White House to nominate a vice chairman at the Federal Reserve before taking action on nominees to serve on the U.S. Export-Import Bank’s board of directors. Shelby said he is unhappy that the White House has never filled a new position for a Federal Reserve vice chairman for supervision created by the 2010 Dodd-Frank financial overhaul law. If Shelby does hold up nominees for Ex-Im’s board, he would be effectively limiting the scale of new transactions that the bank can approve. The bank, which helps U.S. companies such as Boeing Co. and Caterpillar Inc. sell products overseas, was reauthorized by Congress last month, but it still can’t approve transactions valued at more than $10 million because three of its five spots on the board of directors are vacant. “I’ve said all along they should do what they ought to do under Dodd-Frank, and that’s nominate a vice chairman of the Federal Reserve,” Shelby, an Alabama Republican, said in an interview Thursday. “It’s the law and it’s been five years — five years, not six months or 8 months — it’s been languishing.” The lack of scheduled hearings on nominees to Ex-Im’s board of directors is “about that, among some other things,” Shelby said. Obama administration officials “seem not to want to” fill the Fed vice chairman position, he said. “I said when you do this, let’s talk,” Shelby said. The Banking Committee has yet to schedule a hearing on J. Mark McWatters, President Barack Obama’s choice for the bank’s board of directors who has previously worked for House Financial Services Chairman Jeb Hensarling, a Texas Republican. The White House announced Obama’s intent to nominate McWatters on Jan. 11. “We haven’t scheduled anything,” Shelby said. “We’ll see what we’re going to do.” Obama nominated former Ex-Im board member Patricia Loui-Schmicker to another term last March, but she never received a nomination hearing and the White House withdrew her nomination on Jan. 11.

Trump has ‘compromised’ Bergdahl’s right to a fair trial, lawyer says

Bowe Bergdahl’s defense lawyer on Friday said his client’s right to a fair trial had been “irreparably compromised” by Donald Trump, and said he might call the billionaire presidential candidate to the witness stand. “There’s been a pattern here that is so extensive that it has certainly raised in the mind of the defense team whether Sgt. Berghdal’s right to a fair trial has been irreparably compromised by Mr. Trump’s comments,” defense lawyer Eugene Fidell said to CNN’s Brooke Baldwin on Friday. “We have to have proof and Mr. Trump…may well be part of the proof that we will offer.” Fidell said that Bergdahl’s defense team has “been monitoring Mr. Trump’s statements for some time” and the comments Trump has made in public are “appalling,” similar to a “lynch mob,” but cautioned he wasn’t commenting on Trump’s candidacy in the 2016 election. He said that Trump, who often calls Bergdahl a “no-good traitor” during campaign events and has called for his execution, was allowed to say what he wanted under the First Amendment but that he could face a defamation case in the future. Bergdahl’s defense team argued the same point in a court filing on October, as first reported by Bloomberg View’s Josh Rogin. “The First Amendment rules out any effort to prevent Mr. Trump from making these defamatory remarks,” the filing said. “The fact remains, however, that his pattern of doing so, with the full glare of public attention before mass audiences around the country, materially threatens SGT Bergdahl’s right to fair consideration by the convening authority as well as in a court-martial.” The Trump campaign did not immediately respond to request for comment.

U.S. blizzard to cause multi-billion dollar losses: report

Massive blizzards that paralyzed much of the U.S. East Coast in the past few days are likely to cause “multi-billion” dollar economic losses in one of the worst storms in the region in over a century, reinsurance broker Aon Benfield said on Monday. The monster weather system unofficially dubbed Winter Storm Jonas left at least 20 dead in several states, with most of the fatalities the result of traffic accidents.”Given the physical damage to homes, businesses and other structures and automobiles, plus the high costs incurred due to business interruption, it is expected that this will end up being a multi-billion-dollar economic cost,” Aon Benfield said in a note. The storm would likely be rated as one of the top 15 winter storms in the Northeast and Mid-Atlantic since 1900, it added. It was too soon to calculate insured losses, Aon Benfield said, adding a similar storm system in January 1996 caused an estimated economic loss of $4.6 billion and insured loss of $920 million in current dollar terms.

Why do the Iowa caucuses matter? Because everyone thinks they do.

Donald Trump has dominated the GOP presidential race for seven months. Nothing €— not his many offensive comments, not his mediocre debate performances, and not the once-feared GOP establishment €— has been able to stop his rise. But on February 1, all that could change when Trump faces by far his biggest challenge yet: the Iowa caucuses. The results in Iowa — the first time a state’s actual voters weigh in in the presidential nomination contest — can make the national contest turn on a dime. Barack Obama won Iowa in 2008, and he suddenly shot up to become competitive with Hillary Clinton in national polls. John Kerry came out of nowhere to win Iowa in 2004, and the presumed leader Howard Dean collapsed with astonishing speed. And Trump looks vulnerable in Iowa. Recent polling has been mixed about whether he or Ted Cruz is leading, but there have been anecdotal reports suggesting that Trump’s ground game — crucial in the low-turnout caucuses — is laughably inferior to Cruz’s. So in the first contest that really counts, Trump could end up a loser. Yet if he manages to pull off a win — watch out. But let’s step back for a minute, and ask: why do the quirky Iowa caucuses have this tremendous impact on the race, anyway? “What is the difference between first place and third place in Iowa going to be? 4,000 votes? It’s like a student body election.” More:

GOP senator calls out Donald Trump’s affair in lengthy tweetstorm

Exactly one week out from the Iowa caucuses, the Republican establishment is starting to believe — and accept — that Donald Trump could very well be their nominee. Some members of the tea party wing of the party appear to be coming to terms with that as well. But, if the tweets that follow are any indication, they’re not going to be happy about it. Sen. Ben Sasse (R-Neb.) (it’s pronounced “SASS”) apparently spent his Sunday evening watching football and doing that time-honored thing politicians do to try to draw attention these days: Tweet up a storm on a subject. The subject was, of course, GOP front-runner Trump. The topic: Asking Trump policy questions. The point: Trump may well be the party’s most likely nominee, but many of his views are anathema to the GOP. And it got personal. Sasse even brought up Trump’s well-documented affair with actress Marla Maples. See tweets:

S.E.C. Is Criticized for Lax Enforcement of Climate Risk Disclosure

As recently as 2011, shares in Peabody Energy, the world’s biggest private sector coal company, traded at the equivalent of $1,000. Today, they hover around $4 each. Over that time, investors who held the stock lost millions. Peabody, like other coal companies, has been hammered as cheap natural gas erodes the demand for coal. But concerns about climate change are also an issue for the company as customers and investors turn away from fossil fuels. Peabody saw this coming. Even as the company privately projected that coal demand would slump and prices would fall, it withheld this information from investors. Instead, Peabody said in filings with the Securities and Exchange Commission that it was not possible to know how changing attitudes toward climate change would affect its business. Peabody’s double talk was revealed as part of a two-year investigation by the New York attorney general. In a settlement in November, Peabody agreed that it would disclose more about climate change risks in its regular filings with the S.E.C. In theory, however, Peabody should have been making such disclosures all along. In 2010, the S.E.C. told companies how it expected them to address the risks posed by climate change in their regular securities filings. Wall Street’s top regulator was not issuing a new rule. Rather, this was “interpretive guidance” on existing disclosure requirements. The S.E.C. chairwoman at the time, Mary Schapiro, noted then that the S.E.C. was “not opining on whether the world’s climate is changing, at what pace it might be changing, or due to what causes,” but asking companies to take stock of the risks to their businesses. Among the factors companies should address, the S.E.C. said, were legislation and regulation related to climate change, international treaties on the issue, and the physical impacts of climate change, like flood or drought.

Louisiana Embraces Obamacare

While he was running for governor of Louisiana, Democrat John Bel Edwards pledged to expand Medicaid on his first day in office under the Affordable Care Act. Earlier this month, he followed through, and told voters in his inaugural address that their tax dollars “should not be going to one of the 30 other states that have expanded Medicaid, when we are one of the states that expansion will help the most.” Now, state officials are getting to work, ramping up plans to set up the infrastructure and outreach necessary to get citizens signed up. But with a bottomless deficit to contend with and cultural shifts in the health-care field still necessary, they’ve got their hands full. Louisiana’s new Department of Health and Hospitals secretary, Rebekah Gee, calls her home “an island in a sea of Southern states,” whose only neighbor with Medicaid expansion is Arkansas. (There, like in Kentucky, the governor is seeking approval from the federal government to make changes to the state’s program.) Before Edwards’s executive order, roughly 1.4 million Louisianans were covered through Medicaid, and the state anticipates an additional 300,000 will be enrolled come July 1 under the expansion. There are two other “populations” that could register as well, the state’s interim Medicaid director, Jen Steele, notes: Those who already have insurance but fall within the qualifying income and age range under Medicaid expansion—they could choose to switch—and the so-called woodwork population, who have long been qualified to receive funds but haven’t yet signed up. Gee said health-care challenges in Louisiana go beyond enrolling more people, whose coverage costs the federal government will pay this year. She described those problems with urgency in her voice: one northern city with a facility whose infant-mortality rate is “double many developing countries”; a statewide high HIV rate; high syphilis and STI rates; infants with neonatal abstinence syndrome, also known as neonatal withdrawal; and drug use. She paints a picture of Louisiana as a state rich with cultural tradition, but cripplingly poor, and she’s putting out a “call to arms” for “nontraditional partners and stakeholders,” like foundations, to help combat the state’s health-care troubles.

This unlikely new solitaire app is a Donald Rumsfeld-Winston Churchill collaboration

Donald Rumsfeld has an app. No, it’s not called “Angry Kurds,” or “Find My WMD” (although wouldn’t that be something?). It is a game called “Churchill Solitaire.” It is free, and it is not easy. “No, it’s not — it’s challenging! It’s strategic,” the former secretary of Defense said on the phone Sunday, while hustling to Union Station for a train to New York, where on Monday he hawked the app on the “Today” show and talked current events: ISIS (“It’s gonna take many, many years to deal with that problem”), if he would be okay with Donald Trump as commander-in-chief (“you bet”), and George H.W. Bush’s criticism of his “arrogant” manner (“we were never close”). Rumsfeld’s evolution from Eagle Scout to app developer took root longer ago than you’d expect, in 1973, when he was U.S. ambassador to NATO. In Brussels, Rumsfeld met fellow envoy André de Staercke, who had become friendly with Winston Churchill during World War II. The British prime minister taught the Belgian diplomat his rules of solitaire, which involved two decks of cards and a diabolical modification called “the devil’s six.” De Staercke in turn taught Rumsfeld, who has been playing this complicated version ever since. He likes it for the same reason Churchill did. Churchill “enjoyed it as a distraction from the many weighty things he was constantly considering,” Rumsfeld said. The fact that “it’s so much more complex than any card game I know of makes it a particularly interesting diversion.”


Uber banned in Gulf Shores, Orange Beach

Gulf Shores and Orange Beach have been vocally against the ride-sharing service Uber, and as of Jan. 22, the Uber app will be inaccessible to residents of both cities. “Since Uber came to the Gulf Coast in June, we have been welcomed by riders like you who rely on safe transportation our driver-partners provide. But the mayors and city councils of Orange Beach and Gulf Shores have ordered Uber to cease operations and to no longer provide safe, reliable rides to Alabama Gulf Coast residents and visitors,” Uber released in a statement. “As a result, you will no longer be able to use the Uber app in Gulf Shores or Orange Beach beginning Jan. 22 at midnight.” A post from the Gulf Shores police department back in July hinted at conflict with Uber. “UBER is NOT licensed to operate in Gulf Shores,” the post read. “‪#‎GSPD will take appropriate police action towards anyone found in violation! UBER will be treated as an unlicensed taxi service. This type of ‘service’ is highly dangerous and getting into a vehicle with someone you do not know can result in a serious crime against you!” Uber disagreed. “All driver-partners wanting to use the Uber platform are required to undergo an extensive background check, which is performed on our behalf by a third party accredited by the National Association of Professional Background Screeners and use a process for Uber that is similar to that provided to other companies such as, Starbucks, WalMart, Nike, FedEx, UPS, and Amazon,” Uber told Mobilian Patrick Dungan voiced his displeasure with the decision. “I was really looking forward to using Uber at Hangout Fest this year. I guess Gulf Shores and Orange Beach would rather have drunks on the road than insured, sober, background-checked Uber drivers,” said Dungan. Uber also asked that those who want Uber back in Orange Beach and Gulf Shores call their city leaders and advocate for the ride-sharing service.

Report: Two Alabama counties among highest lead poisonings in the country

Two Alabama counties have lead poisoning among the worst in the country and much higher than Flint, Michigan, including one where a majority of children tested had lead poisoning. According to CDC data compiled by, Houston County has the highest reported level of lead poisoning in the country, with seven of 12 children tested there having lead levels high enough to qualify as lead poisoning.

That’s in contrast to Flint, where about 4 percent of children have tested positive for lead poisoning.

Meanwhile, in Dallas County, more than one in three children tested positive for lead poisoning.

The CDC defines lead poisoning as having 5 micrograms or more of lead per deciliter of blood, although no level of lead is considered safe or harmless. You can read the rest of’s report here .

Sen. Del Marsh bill would end tenure system for future teachers

The leader of the Alabama Senate is working on legislation that would end the tenure system for future teachers and replace it with a plan that ties employment and pay more closely to student performance. Senate President Pro Tem Del Marsh, R-Anniston, has circulated a bill called the RAISE Act (Rewarding Achievement in Instruction and Student Excellence). Marsh has not introduced the bill and said the latest draft, which he said was not yet available, includes significant changes. An earlier version would have allowed teachers hired in May 2017 and after to work in a grandfathered tenure system or in a new performance salary system. Marsh said the updated bill would not offer the tenure option to the future teachers. Teachers already in the tenure system could remain in it, but new teachers would work under contracts with new evaluation standards. Evaluations would be based partly on student scores on standardized tests — the ACT Aspire or its successor — according to the earlier version of the bill. Marsh said taxpayers need to know that the Legislature will hold educators accountable for results. “We are going to require that student performance over time be achieved,” Marsh said. “It’s hard to do that with the tenure system.” Other factors in evaluations would include classroom observations by principals and other trained evaluators and surveys of parents and students. Marsh’s bill calls for the state Department of Education to define the elements of evaluation and standards of effectiveness. Teachers would receive annual evaluations rating them at one of five different levels, from significantly below expectations to significantly exceeding expectations, according to the earlier draft of the bill. School boards would base  decisions on significant pay differentials, promotions, transfers and retention primarily on the evaluations. Teachers could be paid more for teaching high-demand subjects or taking hard-to-staff assignments. Marsh said he has met with the Alabama Education Association, Alabama Association of School Boards and School Superintendents of Alabama, as well as with state Superintendent Tommy Bice and Community College Chancellor Mark Heinrich to get their input on the proposal. Eric Mackey, head of School Superintendents of Alabama, said he has talked to more than half of the state’s 138 superintendents about the bill. Mackey said they were nearly unanimous in opposing a plan that ties teacher pay and employment to standardized test scores. More:

Republicans hoping to oust Mike Hubbard ask Democrats for help and strike out

The effort by some Republicans to oust House Speaker Mike Hubbard has them crossing party lines seeking the votes of Democrats and offering their old political rivals incentives to help them unseat one of the most influential Republicans in the state. Rep. Phil Williams, R-Monrovia, announced last fall he would challenge Hubbard, R-Auburn, when the Legislature convenes its regular session on Feb. 2. In an interview at the time of his announcement Williams said he had the votes to win. Longtime political observers doubt Williams has the votes to win. Whatever momentum his candidacy had in the fall has stalled, said observers. They believe he has a dozen to a dozen-and-a-half GOP votes to unseat Hubbard. If that is true, Williams and his allies would need virtually every vote of Democratic lawmakers to have any chance to beat Hubbard and they are making the effort to get them, according to key Democrats. “Yeah. Some of us have talked to Phil’s (Williams) people and they are pushing us hard to give Phil our votes for speaker,” said Rep. John Rogers, D-Birmingham, one of the House’s longest serving members and a power in the Black Democratic Caucus. “It’s pretty clear they don’t have anywhere near enough votes in the Republican Caucus to dump Mike and they need Democrats.” Rogers laughed at the irony. “The Republicans have a super majority and for five years have run this place like Democrats have no say,” said Rogers. “Now some of those same Republicans are begging us for our votes. …These guys love to talk about not doing anything they think might hurt the ‘Republican Brand’ like expanding gambling, expanding Medicaid, giving teachers a pay raise. But apparently the Republican Brand will be just fine if they use the votes of Democrats to dump their Republican leader. It makes me laugh.” Rogers said one key Williams supporter who talked to him said Williams as speaker would be willing to do more to share power with the Democrats. Asked for specifics, Rogers said there was a conversation about reopening legislative committee assignments up and letting Democrats take their pick of the committees they wanted. Rogers said he did not want to name the person who represented Williams in the negotiations. But other Democrats said it was Rep. Ed Henry, R-Hartselle. Henry has been a vocal critic of Hubbard and Gov. Robert Bentley over a number of issues, including supporting tax increases. Henry also is a member of the state Republican Party Steering Committee which governs the party. More:

Kingpins of the Gulf make millions off red snapper harvest without ever going fishing

A little-known federal program has turned dozens of Gulf of Mexico fishermen into the lords of the sea — able to earn millions annually without even going fishing — and transformed dozens more into modern-day serfs who must pay the lords for the right to harvest red snapper. A four-month probe by has found that roughly $60 million has been earned since 2007 by this small number of fishermen whose boats never left port. That money was collected from the labor of fishermen who have no choice but to hand over more than half of the price that their catch brings at the dock. As it stands today, the right to catch 77 percent of the annual red snapper harvest is controlled by just 55 people, according to an analysis of hundreds of pages of federal documents, reports and websites. The lion’s share of the commercial harvest was concentrated in the hands of a very few in 2007 when a federal program known as the Individual Fishing Quota system, or IFQ, was established. The National Marine Fisheries Service divided up the Gulf’s snapper harvest like a pie, with the largest pieces going to the fishermen who landed the most fish in the preceding years. A handful of snapper fishermen got shares as large as 5 or 6 percent of the Gulf’s total harvest, while others received shares as small as a ten thousandth of a percent, which granted the right to catch about a dozen fish a year. “I sold my first snapper when I was 16 or 17,” said Ricky Wilson, a welder who lives in a small cottage on Mobile Bay. Commercial snapper fishing provided part of his income for 20 years. When the IFQ portions were handed out, his share amounted to about 430 pounds, which would have taken him one or two days to catch and brought less than $1,000 at the dock. More:

Alabama Supreme Court denies challenge to constitutionality of grandparent visitation law

On Friday, the Alabama Supreme Court declined a request by Alabama Attorney General Luther Strangeto revisit a ruling by a lower appeals court declaring the Alabama Grandparent Visitation Actunconstitutional. The act, which became law in 2010, provided grandparents with the ability to seek “limited visitation rights” in cases where parents refused to allow grandparents access to grandchildren. The law was first declared unconstitutional just one year after its inception because it infringes on the rights of parents to decide what’s best for their children, including who those children are allowed to see. Though the Alabama Legislature attempted to alter the law to address those concerns, the Alabama Civil Court of Appeals ruled in October that even the amended law was unconstitutional. The appeals court used an Autauga County case, where the plaintiff was only identified by the initials E.R.G., to strike down the amended bill when a grandmother sought access to two of her grandchildren despite the parents’ objections. The original act passed the Alabama House of Representatives by a 99 to 0 vote and was eventually cleared by the state senate as well. Though justices did not issue an opinion today, with the Alabama Supreme Court website only noting that Strange’s request was denied, Justice Greg Shaw wrote: “The attorney general, in his certiorari petition, contends that various writings by the Justices in E.R.G., including my writing, indicated that a presumption in favor of the parent’s decision was required for the GVA to be constitutional. Because the 2011 amendments to the GVA provide such a presumption in favor of the parent’s decision, the attorney general contends that the GVA as amended in 2011 is now constitutionally sufficient.” “I regret that the Supreme Court denied (my) certiorari,” Strange said in an email. “The Legislature could have benefited from the Court’s guidance on how to craft a statute that passes constitutional muster.”



Carl Hiaasen: Trump’s conversation with God

An absolutely true news item: In an interview with CNN, Donald Trump said, “I have a very great relationship with God.” God responds: What relationship? I haven’t heard from you in, like, 40 years. Look, I’ve been busy becoming fabulously successful. Making business deals, banking billions of dollars, hosting my top-rated reality show, buying and selling beauty pageants, marrying and divorcing amazingly gorgeous women. My life’s fantastic, almost as good as Yours! God: And now you’re running for president of the United States. That’s right, and I’m totally killing it in the polls! Everybody loves me, especially the evangelicals. God: You have got to be kidding. Don’t act so shocked. Who else could these people vote for? Huckabee’s a total zero, Cruz is a nasty Canadian, Jeb is a low-energy loser, and Rubio’s a punk. They’re pathetic, and I say that with all due respect. God: And this is how you think a devout Christian talks? Hey, I’m a great, great Christian. Got a Bible and everything! God: Yeah, I heard. The one your mother supposedly gave you. I carry it everywhere. Actually, somebody on my staff carries it for me. But it’s an unbelievably great, great Bible. I spend all my spare time on the jet reading it. God: I saw the YouTube clip from Liberty University. ‘Two Corinthians’? Really? Two Corinthians, Second Corinthians, what’s the big deal? Those kids knew what I meant. God: They were laughing, Donald. Sure, because they love me. Everybody loves me. Have you seen the crowds at my rallies? Unbelievable! Ten thousand people showed up in Pensacola! God: Ten thousand white people. I was there. Look, we ran out of tickets for the others. It happens. That doesn’t mean African-Americans don’t love me. Hispanics love me, too. Even Muslims love me, and by that I mean the good Muslims, which I assume some of them are. God: I’m just curious. Are you remotely familiar with the concept of tolerance? Compassion? Humility? That’s the problem. We’re too nice. Why do you think America is such a disaster? We’ve gotta stop being so nice. The rest of the world thinks we’re weak. Your son Jesus, with all due respect — he was way too nice. God: Excuse me? In one of those gospel blogs, I forget which, they quote Jesus saying, “You shall love your neighbor as yourself.” Seriously? Because, frankly, my neighbors in Palm Beach are a pain in the ass. And, even if they weren’t, I couldn’t love anybody as much as I love myself. God: That was Matthew, FYI. McConaughey? Where? He’s amazing. Did you see The Dallas Buyer’s Club? God: No, I’m talking about the disciple Matthew. That’s the gospel you were citing. He was one of the original evangelicals. I knew that. Everybody knows that. Matthew was a great, great disciple. He would have been absolutely fantastic on The Apprentice. God: Know what? We’re done here. What I was saying before? Don’t get me wrong, I’m a huge, huge fan of Jesus. An incredible guy, and a helluva carpenter. If he ever comes back, I’d hire him in a heartbeat. Tell him I said so. God: I’m sure he’ll be thrilled. But, frankly, all that stuff he preached about turning the other cheek, not hating your enemies — it didn’t work out so great for him, did it? That’s my point. Being nice doesn’t cut it. Being nice gets you crucified. God: Do me a favor, Donald — quit dropping my name in your speeches and interviews. Just knock it off. I will, I will. Right after the South Carolina primary. God: No, stop it right now. But what about Iowa? And New Hampshire? Please, Lord — can I call you Lord? — I really need that Christian vote. God: I still can’t believe they’re buying this lame act. Oh, they’re totally eating it up. Amazing, right? God: The Bible’s not supposed to be a political prop. Put it away. Oh, come on. You know how long it took my staff to even find that thing? How many of my warehouses they had to search? I’ll make you a deal — if You let me keep using the Bible in my campaign appearances, just for a few more weeks, I promise not to quote from it.  No more Corinthians. No more McConaugheys. God (sighing): See you in church, Donald. You can Google the directions.


Morning Money

FEELING THE BER … .G? WALL STREET WEIGHS IN ON BLOOMBERG RUN — POLITICO’s Ben White surveyed a half dozen senior Wall Street executives for their views on the likelihood that Michael Bloomberg would run for president as an independent and his prospects should the former New York City mayor jump in the race. The general consensus is that Bloomberg is indeed looking at a race more closely but would likely only get in if Bernie Sanders gets the Democratic nomination and Donald Trump or Ted Cruz gets the GOP nod. There is a slight chance Bloomberg would get in even if Hillary Clinton gets the nomination if she is significantly weakened by Sanders and lurches hard to the left.

The consensus is also that Bloomberg has little to no chance of winning and would do more damage to Clinton than Trump or Cruz if both the former New York mayor and former secretary of state are in the race. Bloomberg was nominally a Republican as mayor and has moderate stances on fiscal issues but his views on abortion, guns and the environment all line up squarely with the Democratic Party. No surprise that Trump welcomed the idea of a Bloomberg independent candidacy.

One top Wall Streeter at a private equity firm cited the behind-the scenes-machinations of Bloomberg’s top political advisor Kevin Sheekey: “Simultaneous stories on a snowy Saturday in the WSJ, NYT and Politico. Classic Sheekey move and no mention of Sheekey’s name. Tells me that he orchestrated the whole thing. And after getting smacked by Mike for getting out over his skis on this issue the last time, there is no way he did this without Mike’s tacit blessing … Sat next to Bill Ackman at a dinner a few months ago and he was convinced Mike was going to enter the race.

“Bill is very smart and I have to assume that billionaires are close to each other and there is no way Bill just made this up … Real issue is what are his chances. I can recite for you all the conventional reasons why Mike can never win. But if there was ever an election in which the conventional wisdom is being upended it is this one. The cost of running for Mike is for him like spending the spare change on his dresser. And this is probably the last time the stars line up for him for even a long-shot. Why wouldn’t he?”

Another senior Wall Street executive at a large investment bank described the scenario for a Bloomberg run: “My sense is the only shot for him is if it’s Bernie-Trump or Bernie-Cruz. That’s what’s changed his calculations recently. If you have Hillary in there as close enough to the establishment there is less of a viable path. That’s why the March deadline makes sense because by then we will know if Bernie is going to take it away from her. Even in that situation it’s still a very thin needle to thread.”

Another senior executive at a large bank, who supports Clinton, said Bloomberg is “befuddled that Trump has gotten so far and thinks maybe he should have tried earlier.” This person added that “unlike his fellow New York plutocrat, [Bloomberg] is out of touch with the populist mood of the country, and his policies aren’t a comfortable fit with either party. He might be a pretty good president but it ain’t going to happen.”

ICYMI THANKS TO ‘JONAS’ — Here’s how POLITICO’s Glenn Thrush and Annie Karni covered the story of Bloomberg’s mulled run: The news was first reported here in the New York Times by POLITICO alumni Alex Burns and Maggie Haberman:

FIRST-TIME WRITER, LONG-TIME READER — Bloomberg rumor rundown aside, Ben White is off until Friday, so I’m the first of your guest writers. No word on whether Ben’s earning some extra cash shoveling out his neighbors’ post-Jonas driveways. Send tips, feedback, or funny snow videos to Financial Services Pro editor Clea Benson (

MARKETS OPEN, CONGRESS DECLARES SNOW DAYS — In New York, the markets are scheduled to get back to business as usual, but Washington is slower to recover. The House of Representatives has postponed session this week in light of the near-record snow D.C. received. This means House committee hearings on Puerto Rico’s fiscal crisis and terror finance-related money laundering will be delayed, and Senate votes have been pushed back to Wednesday. A federal judge will be considered for confirmation.

DRIVING THE WEEK — The Federal Open Markets Committee meets Tuesday and announces its decision Wednesday … no rate change expected … Case-Schiller home prices Tuesday at 10 a.m … . Pending home sales Thursday at 10 a.m., expected 1 percent increase. 4th Quarter GDP due out Friday at 8:30 a.m. expected to rise 0.7 percent … .

THE POLITICAL WORLD’S BLOOMBERG REACTION — Rubio calls the former NYC mayor, “just a private citizen that owns a big company” … Trump says he’d “love” a Bloomberg third party run … .Republicans laugh off Bloomberg trial balloon.

HILLARY CLINTON told Chuck Todd on ‘Meet the Press that Bloomberg’s, “a good friend of mine. And I’m going to do the best I can to make sure that I get the nomination and we’ll go from there.” (More on their relationship here:

Clinton also managed to drop a carried interest mention and defended against a question about receiving speaking fees from banks in her post-secretary of state years. As far as the presidential race goes now, “it is very personal.”

IN NON-BLOOMBERG NEWS — Sen. Bernie Sanders (D-Vt.) walked back comments that momentum behind his campaign has shaken financial markets. From ABC News:

“Stephen Schwarzman who is the CEO of Blackstone, one of the major financial institutions in this country, says that markets are unsettled because of geopolitical risks, the slowdown in China and because Bernie Sanders is a viable candidate,” Sanders told a crowd of supporters in Davenport, Iowa [on Saturday]. “It appears that we have Wall Street a little bit nervous and that’s a good thing. And then we got the entire political establishment heading to Iowa this week. And it seems to me that some of my friends in the political establishment are afraid.”

“I fully admit to having a big ego, like many other politicians, but the idea that Bernie Sanders’ candidacy because it has growing support all over this country is unsettling world markets is absolutely absurd,” Sanders told ABC’s “This Week” on Sunday.

More here:

GARRETT DONATES TO NRCC RECOUNT FUND — Campaign filings due at the end of January will show that New Jersey Republican Scott Garrett donated to the recount fund of the National Republican Congressional Committee at the end of 2015. Garrett even went on a fundraising trip to New York with House Financial Services Committee Chairman Jeb Hensarling, multiple sources told POLITICO. Garrett, who chairs the Financial Services subcommittee on capital markets and government sponsored enterprises, has seen donors drop ever since POLITICO reported in July that he had not paid dues to the NRCC’s general campaign fund because of its support for gay candidates. Garrett’s stance cost him corporate donors ranging from Goldman Sachs to Capital One, and donors from longtime supporter Elliott Management, have defected to his Democratic challenger Josh Gottheimer. A recent Bloomberg story even suggested Hensarling even banned Garrett from a European junket over the flap. Yet sources said fundraising disclosures to be filed Jan. 31 will show Garrett’s making good on his promise to donate to the NRCC’s non-campaign arms. The issue doesn’t appear to have hurt his relationship with Hensarling either …

AIG TO PUSH BACK ON ICAHN AND PAULSON — Look for American International Group executives to push back against Carl Icahn and John Paulson’s push for a breakup, Alistair Gray of the Financial Times reports: . During a scheduled strategic update on Tuesday CEO Peter Hancock may instead propose segregating troubled assets as well as cutting costs and selling assets, the FT says. Icahn and Paulson have been seeking a breakup in part because Washington regulators have decided the insurance giant is systemically important and subject to tougher oversight.

TECH INVESTORS FEELING CHILLY … and it’s not due to snow. From the WSJ: “For years, the tech sector was going nowhere but up. Fast-spreading connectivity promised a massive potential market for large Internet firms. Artificial intelligence and new data-analytics tools would help companies and governments gain orders of magnitude in efficiency. Davos organizers themed this year’s meeting around harnessing the massive transformation that technology can offer, dubbing it the fourth industrial revolution. The chill blew in over the summer. Investors had long been suspicious of valuations that were pushed as much by public appearance as by fundamentals. Then the late August shock over surprisingly slow growth in China tanked the public markets — and spooked private ones, executives say.” More here:

FINALLY: TIP YOUR DELIVERYPEOPLE — Quartz used data from online food delivery service Seamless to chart how New Yorkers tipped during snowstorm periods in 2014 and 2015 and the answer is … well, better but not by a whole lot, even during nor’easters.

POTUS Events

11:00 am || Recieves the Presidential Daily Briefing
3:10 pm || Visits with wounded warriors; Walter Reed National Military Medical Center; Bethesda, Maryland

All Times Eastern

Floor Action

House declares snow week.  Will reconvene February 1. The Senate will return Wednesday for votes at 5:30 pm.



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