Krebs Daily Briefing 29 October 2015


Canada’s White House Is a Deathtrap, So Justin Trudeau Is Moving Into a ‘Cottage’

Prime minister-designate Justin Trudeau will not — like many of the millennials who voted for him — be moving back into his parent’s home. At least not yet. The newly-elected leader will be shacking up in the backyard of Governor General David Johnston at the Rideau Cottage, a stately two-story brick house that usually houses the governor general’s secretary. Trudeau has had to put off the move into 24 Sussex, which has been the official residence for Canada’s prime minister since 1951, because the crumbling structure could actually prove dangerous for its inhabitants. The 43 year-old prime minister-designate grew up in the building during the tenure of his father, Pierre Elliott Trudeau, who served as prime minister from 1968 until 1984 (except for a brief interruption in 1979). Renovations for the 147-year-old building have been put off for years, as outgoing Prime Minister Stephen Harper resisted moving his family out in order to allow the renovations to go forward. In 2008, Canada’s Auditor General wrote in 2008 that the windows in 24 Sussex were cracking, the electrical system was at a breaking point, and that the residence, “which functions as a reception area for distinguished national and international guests, does not have universal access for persons with reduced mobility” and cannot accommodate wheelchairs. “A number of the residence’s systems are reaching the end of their useful lives, are in poor condition, and will have to be replaced in the near future,” the report found. In assessing the residence, it found that the roofing was roughly “good” while every other aspect — the walls, windows, foundation and chimney — were somewhere between “fair” to “critical.” The National Capital Commission, which manages the estate, ranked 24 Sussex — as well as Rideau Hall, which is the Governor General’s residence — were most the most “high risk” properties under their control. While the commission says progress has been made, it notes that there is work to be done, including “upgrades to the windows, fire suppression system, plumbing, and heating and air conditioning system; the remainder of the electrical improvements; and the implementation of universal accessibility standards.” The building has not had any sort of renovations in 50 years. The cost, at least for the urgent renovations, will be somewhere in the ballpark of $10 million. A 2011 report estimated that the full upgrades, which will include efforts to “green” the space, could take 15 months — that is, once they get the money. In the meantime, Trudeau, his wife, and their three children will need to squat at the Rideau Cottage. But while its name may sound a bit small, the house — which sits on the massive 88-acre grounds that are partially open to the public — has 22 rooms and, according to a spokesperson for the grounds, “there is enough space for him to be living here and have his own private space with his family.”

Before Osama bin Laden Raid, Obama Administration’s Secret Legal Deliberations

WASHINGTON — Weeks before President Obama ordered the raid on Osama bin Laden’s compound in May 2011, four administration lawyers hammered out rationales intended to overcome any legal obstacles — and made it all but inevitable that Navy SEALs would kill the fugitive Qaeda leader, not capture him. Stretching sparse precedents, the lawyers worked in intense secrecy. Fearing leaks, the White House would not let them consult aides or even the administration’s top lawyer, Attorney General Eric H. Holder Jr. They did their own research, wrote memos on highly secure laptops and traded drafts hand-delivered by trusted couriers. Just days before the raid, the lawyers drafted five secret memos so that if pressed later, they could prove they were not inventing after-the-fact reasons for having blessed it. “We should memorialize our rationales because we may be called upon to explain our legal conclusions, particularly if the operation goes terribly badly,” said Stephen W. Preston, the C.I.A.’s general counsel, according to officials familiar with the internal deliberations. While the Bin Laden operation has been much scrutinized, the story of how a tiny team of government lawyers helped shape and justify Mr. Obama’s high-stakes decision has not been previously told. The group worked as military and intelligence officials conducted a parallel effort to explore options and prepare members of SEAL Team 6 for the possible mission. The legal analysis offered the administration wide flexibility to send ground forces onto Pakistani soil without the country’s consent, to explicitly authorize a lethal mission, to delay telling Congress until afterward, and to bury a wartime enemy at sea. By the end, one official said, the lawyers concluded that there was “clear and ample authority for the use of lethal force under U.S. and international law.” Some legal scholars later raised objections, but criticism was muted after the successful operation. The administration lawyers, however, did not know at the time how events would play out, and they faced the “unenviable task” of “resolving a cluster of sensitive legal issues without any consultation with colleagues,” said Robert M. Chesney, a law professor at the University of Texas at Austin who worked on a Justice Department detainee policy task force in 2009. “The proposed raid required answers to many hard legal questions, some of which were entirely novel despite a decade’s worth of conflict with Al Qaeda,” Mr. Chesney said. More:

Why the US sent a missile destroyer into Chinese-claimed waters

On Monday night, the American missile destroyer Lassen sailed within 12 miles of a Chinese-built artificial island called Subi Reef, in the South China Sea. The goal, according to the US, was to challenge China’s claims over what are generally understood to be international waters. China was furious. A spokesperson said the Lassen “illegally entered” the waters and “threatened China’s sovereignty and security interests.” On Tuesday, China sent two ships — the missile destroyer Lanzhou and patrol boat Taizhou — to the area and told the American ship to get out. The Americans ignored them. This tension isn’t going away: The US plans to send even more naval patrols into contested South China Sea waters in the coming days. “There have been naval operations in that region in recent days, and there will be more in the weeks and months to come,” Secretary of Defense Ash Carter said during a Tuesday Senate hearing. To understand why all this is happening and where it’s going, you need to understand the backdrop. China is claiming important chunks of territory in the South China Sea, making its neighbors really nervous. America is taking the neighbors’ side, but not just because it wants to side against China. More:

China to End One-Child Policy, Allowing Families Two Children

BEIJING — China will allow all couples to have two children, a Communist Party leadership meeting decided on Thursday, bringing an end to decades of restrictive policies that limited most urban families to one child. The announcement came after the party’s Central Committee concluded a four-day meeting in a heavily guarded hotel in western Beijing where it approved proposals for China’s next five-year development plan, which starts next year. The terse announcement from Xinhua, the state news agency, about the sharp shift in family planning policy gave no details. The Chinese government has already eased some restrictions in what has often been described as the “one-child policy,” and a party conference in 2013 approved allowing couples to have two children when one of the spouses was an only child. But many eligible couples failed to take up the chance to have a second child, citing the expense and pressures of raising children in a highly competitive society. A summary of the decision by Chinese radio news said that officials had decided to “improve the demographic development strategy, and to comprehensively implement a policy that couples can have two children, actively taking steps to counter the aging of the population.” More:

Deutsche Bank Is Expected to Settle Sanctions Violation Case for at Least $200 Million

Deutsche Bank, the German financial giant with a big presence on Wall Street, is close to settling one of the many government investigations it currently faces. In a deal that is expected to be announced as soon as next week, Deutsche Bank would pay at least $200 million to resolve investigations into its dealings with countries like Iran and Syria, according to officials briefed on the matter. The investigations, led by New York State’s financial regulator and the Federal Reserve, have centered on whether the bank’s New York branch processed transactions for clients in those countries in violation of United States sanctions laws. The people, who spoke on the condition of anonymity because they were not authorized to discuss the negotiations, cautioned that the deals were not yet final. The Fed, in particular, was still negotiating a penalty, and the final sum is not known. The settlement with the Fed and the New York State Department of Financial Services would not put to rest a parallel criminal investigation into the bank. The Manhattan district attorney’s office and the United States attorney’s office in Manhattan are expected to continue pursuing their own investigations into potential sanctions violations at Deutsche Bank. More:

Chevron, Oil Pollution, and the Case of the Tainted Witness

The marathon legal war over oil pollution in the jungle in Ecuador—now 22 years old—can outrage, but also exhaust, diligent observers. But here’s a new twist. Lately certain self-styled environmental advocates have claimed that a key witness in the case “recanted” his testimony on behalf of Chevron. That could hinder Chevron’s efforts to fend off enforcement of a multibillion-dollar judgment against it from 2011. The thing is, he never recanted. How did we get to this point? Texaco, later acquired by Chevron, despoiled the rain forest in Ecuador in the 1970s and 1980s. In 1993, American lawyers sued the company on behalf of indigent tribe members and farmers. U.S. courts dismissed the suit, saying it belonged, if anywhere, in Ecuador. The American lawyers restarted the litigation in Ecuador in 2003. By this time, the pollution evidence had become ambiguous, as Ecuador’s national oil company, Petroecuador, had layered on its own contamination for a decade. In 2011, an Ecuadorean trial court held Chevron liable for $19 billion in damages, a judgment upheld by higher Ecuadorean courts, although the amount was halved. Chevron refused to pay, arguing that any remaining pollution was Ecuador’s responsibility. Then it counterattacked the plaintiffs’ legal team, led by New York lawyer Steven Donziger. The oil company accused Donziger in a civil racketeering lawsuit in New York of turning the contamination case into a shakedown. Last year, a federal judge in Manhattan ruled for Chevron, concluding that Donziger had relied on fabricated evidence, coercion, and bribery to win the 2011 judgment. Donziger has appealed that ruling. So far, not one dime has changed hands. The litigation hasn’t cleaned up any oil. And Donziger isn’t done yet. Unable to enforce his judgment in Ecuador, because Chevron has no assets there, Donziger is seeking to seize company property in Canada, Argentina, and Brazil. Chevron is defending against enforcement efforts by citing the U.S. racketeering verdict. Meanwhile, it is pursuing an international arbitration case against the Republic of Ecuador, contending that the country, in effect, colluded with Donziger. Yes, it’s complicated. And here’s the latest shocker. More:


Who Won the Third Republican Presidential Debate?

Boulder might be the most relaxed city to host a presidential debate so far this in this campaign, but the stage at the Republican debate Wednesday night was anything but chill. Hosted by CNBC, the debate was billed as focusing on economic policy, but the most important thread running through it was rancor. Candidates yelled at moderators. Moderators yelled at candidates. Jim Cramer and John Kasich yelled at, well, everyone. There were interruptions, anger, and frustration. And from Jeb Bush, there was an offer of a “warm kiss.” Maybe you had to be there—though it didn’t make a great deal of sense at the time, either. The two candidates to thrive were a pair of senators who have been slowly but clearly gaining strength over the last few weeks: Marco Rubio and Ted Cruz. Rubio has emerged as something of a bettor’s favorite: Though he still lags in the polls, pundits who assume Donald Trump and Ben Carson can’t win have tabbed him as the man to benefit. He showed why his political abilities are so well regarded. The polished, poised Rubio repeatedly turned what might have been tough questions around on the questioner. More:

The third Republican presidential debate, explained

The third Republican debate featured a return to the feisty spirit of the first, but this time the most ferocious fights weren’t between the candidates, but between the candidates and the moderators. The main losers in that dynamic were once-upon-a-time front-runners Jeb Bush and Donald Trump who, for different reasons, were unable to feast at the table of anti-moderator zingers. It also lead to a rather formless debate in which the candidates scarcely addressed the actual topic at hand: which one of them ought to be the GOP nominee and what policy direction the party should take. Where inchoate grassroots conservative rage once found its voice in the form of Trump, in the third debate it simply seemed inchoate — reduced to argument that America’s main business news network is part of a vast liberal conspiracy and that asking for mathematically plausible tax policies is a form of bias. More:

Dennis Hastert pleads guilty in hush money case

Former House Speaker Dennis Hastert pleaded guilty Wednesday to a felony charge of evading federal bank reporting laws in connection with a scheme to pay hush money to a former associate. Hastert entered the plea in front of a federal judge in Chicago. The indictment in the case says only that the payments related to “past misconduct,” but press reports have said Hastert—a former high school teacher and wrestling coach–was trying to cover up and compensate for sexual contact with a student. The judge could sentence the 73-year-old Hastert to up to 5 years in prison and a $250,000 fine, but both sides in the case told the judge that federal sentencing guidelines call for a sentence of zero to six months in prison. Under a plea bargain with prosecutors, a charge Hastert faced of lying to the FBI will be dropped.

Which Presidents Have Been Best for the Economy?

GOP front-runner, real estate mogul and reality television star Donald Trump has vowed to be “the greatest jobs president that God ever created.” To do so, he’d need to unseat former Democratic President Bill Clinton, who averaged nearly 242,000 monthly job gains during his eight years in the White House. Trump’s Republican rival Jeb Bush has promised 4 percent annual gross domestic product growth if he’s elected to office. But four of the five presidents who have overseen the largest average economic expansions since World War II have been Democrats – John F. Kennedy, Lyndon B. Johnson, Clinton and Jimmy Carter. Over the last six decades or so, history has tended to favor Democratic presidents in terms of economic performance. The country’s unemployment rate has been lower at the end of every Democrat’s tenure since Kennedy took office in 1961. Ronald Reagan, meanwhile, is the only GOP president since Dwight Eisenhower took office in 1953 who can say the same. But how much do presidents actually impact the economy? Are Democratic policies actually better for domestic growth? Not necessarily, according to a study conducted last year by researchers at Princeton University. “Democrats would no doubt like to attribute the large [Democrat-Republican] growth gap to macroeconomic policy choices, but the data do not support such a claim,” the researchers wrote in a report aimed at determining why the economy tended to post better numbers under Democratic administrations. “If anything, and we would not make too much of small differences, both fiscal and monetary policy actions seem to be a bit more stabilizing when a Republican is president – even though Federal Reserve chairmen appointed by Democrats preside over faster growth than Federal Reserve chairmen appointed by Republicans by a wide margin.” The report looked over a variety of factors, including employment and gross domestic product growth, to figure out why Democrats seemed to oversee more thriving economies than their Republican counterparts. The study ultimately determined that differences in performance come down to “‘good luck,’ with perhaps a touch of ‘good policy.'” Democrats, for example, have been beneficiaries of a greater number of oil shocks which has helped control inflation and has put more disposable income into the hands of consumers. But when volatile energy and food components are stripped out of inflation calculations, prices in the U.S. don’t seem to rise and fall under particular administrations. More:

More Trouble in Coal Country: Health Care at Risk for 12,000 Retired Miners and Their Families


John R. Leach worked for Peabody Energy Corp. in western Kentucky for 23 years. When he retired, he and his wife Rhonda relied on his pension and health benefits not only for themselves but to care for two severely disabled adult children. So when Peabody notified them in 2007 that their benefits were now the responsibility of a spinoff called Patriot Coal, they had a worrisome premonition. “We said, ‘There’s something going on here that’s not right,’” Rhonda Leach said. The family’s worries were justified. When Patriot filed for bankruptcy two years ago, retiree benefits for thousands of mining families were put at risk. While Peabody eventually agreed to pay for some of those costs, Patriot is now back in financial trouble. This time around, Peabody is quietly seeking to get out of paying for any of its remaining agreed-upon obligations to its retirees. “All I could think is, you dirty, low-down rotten scoundrels. How could anyone with a conscience do something like this?” Rhonda Leach said. Peabody’s maneuver is perhaps the starkest example yet of how corporate engineering by coal companies under increasing economic duress is imperiling whatever security workers and retirees still possess after their years of work in frequently dangerous conditions. It dwarfs another attempt to undermine retired miners’ health benefits as part of the Patriot bankruptcy, which ProPublica wrote about earlier this month. In that instance, lawyers for Patriot were seeking to redirect for themselves and others involved in the bankruptcy case $18 million that was intended for the health benefits for about 200 retired miners in southern Indiana. After ProPublica reported on that proposal and both Hillary and Bill Clinton spoke out against it, the lawyers withdrew that plan from the Richmond, Va., court handling Patriot’s bankruptcy. What Peabody is now proposing represents a sum eight times as big — $145 million — and a pool of retirees far larger than the southern Indiana group. If Peabody prevails, it will mean that a fund that covers 12,000 retired miners, their dependents and widows — most of them in Kentucky and West Virginia — will run dry early next year, much sooner than expected. This will raise pressure in Congress to bail out the fund with taxpayer money.

Icahn Urges AIG to Split Into Three, Says ‘Time to Act Is Now’

Carl Icahn, the billionaire investor known for picking fights with corporate boards, disclosed a stake in American International Group Inc. and said it should split into three companies, one offering property-casualty coverage, another selling life insurance and a third backing mortgages. The stock rallied in New York trading. “There is no more need for procrastination,” Icahn said in a letter posted on his website Wednesday and addressed to AIG Chief Executive Officer Peter Hancock. “The time to act is now.” Icahn said on Twitter that he holds a “large stake” in AIG. While AIG climbed about 8.8 percent this year through Tuesday’s close, the insurer still trades for less than 80 percent of book value, a measure of assets minus liabilities. Travelers Cos., the lone property-casualty insurer in the Dow Jones Industrial Average, trades for more than 1.4 times book value. AIG jumped 3.2 percent to $62.88 at 9:56 a.m., the most intraday since August. Icahn, 79, said a split would help AIG limit regulation. The insurer has been deemed a non-bank systemically important financial institution by a U.S. panel because of its size. The designation brings increased Federal Reserve oversight. AIG Reorganization:  “You must acknowledge that enhanced regulation is intended to be a tax on size,” Icahn wrote in the letter. Hancock, 57, who took over as CEO last year, reorganized AIG into two main divisions with one focusing on commercial clients and the other on individual consumers. He said the arrangement responds to customer demand and makes more sense than the previous split, which had a life unit and a property-casualty operation. AIG also has been shedding assets to boost capital, exiting its stake in aircraft-lessor AerCap Holdings NV and selling shares of consumer-finance company Springleaf Holdings Inc. The insurer has “taken important and significant steps to reposition AIG by both simplifying and de-risking the company,” Hancock said in a separate statement. “We remain on course and are determined to continue and accelerate these efforts.” ‘Frankly Overdue’:  John Paulson, the billionaire hedge fund manager who is also an AIG investor, is quoted in the letter saying that the insurer could trade for $100 a share if it split into three, reduced expenses, repurchased stock and matched average industry returns. Paulson in 2012 urged Liam McGee, then the CEO of Hartford Financial Services Group Inc., to separate its life insurer from the property-casualty operation. McGee subsequently sold assets to simplify his company and won praise from Paulson. Travelers and life insurer Prudential Financial Inc. are among AIG rivals that sold units in prior years to narrow their focus. “AIG is frankly overdue in following in the footsteps of all other major multi-lines in breaking up life and P&C,” Paulson is quoted as saying in the letter. Hancock’s predecessor at AIG, Robert Benmosche, resisted calls in 2011 for a breakup, saying the insurer benefits from having a variety of businesses. Harvey Golub, the former AIG chairman, said that year that the company should be broken up eventually because its two main businesses have “no strategic fit between them.”

Goldman to Pay $50 Million Penalty Over Leak From Fed

When a former federal regulator applied to Goldman Sachs last year, the bank did what it could to woo him. A senior Goldman partner took the applicant, a former Federal Reserve Bank of New York employee, to lunch and dinner, regulatory records released on Wednesday show. The partner, among other executives, interviewed and called the applicant “several times,” hoping to hire the person “in large part for the regulatory experience and knowledge.” But what started with a friendly lunch has now ended with Goldman paying a $50 million penalty and the applicant facing prison time. New York State’s financial regulator announced an action against Goldman on Wednesday for the firm’s failure to supervise the former regulator, who after being hired obtained several confidential documents from a source inside the New York Fed. In addition to paying $50 million, Goldman took the rare step of admitting the failure and accepting a three-year ban on access to certain sensitive regulatory information, concluding an embarrassing episode that highlighted the blurred lines between the bank and its regulator. Banks and their regulators routinely swap employees. But the leak cast a harsh light on this so-called revolving door, offering ammunition to critics who fear that regulators and bankers, when intermingled, might cross ethical and legal lines. “This case underscores the critical need for financial institutions to put in place strong controls and policies for employee conflicts screening and the use of confidential regulatory information,” Anthony J. Albanese, the acting head of the New York State Department of Financial Services, said in a statement.

Pfizer said to be in talks with Allergan to forge $330 billion drugs giant

Pharmaceutical giant Pfizer Inc has held early talks with Botox-maker Allergan Plc to discuss what could be the biggest takeover deal this year, the Wall Street Journal and Financial Times reported. Shares in Allergan jumped 11 percent in premarket trade to $320 by 1120 GMT on the reports. The healthcare sector has seen an unprecedented wave of deals since early 2014, from large drugmakers buying up smaller rivals, to consolidation among makers of generic medicines and tie-ups between insurers. A bid for Allergan, which has a market value of $113 billion, would be Pfizer’s second recent attempt to acquire a big rival, following its unsuccessful courtship last year of Anglo-Swedish pharmaceuticals group AstraZeneca Plc. Combining Allergan and Pfizer, which is worth $219 billion, would create the world’s largest healthcare group with a market value of around $330 billion, ahead of Johnson & Johnson on $278 billion. A Pfizer spokesman said it “does not comment on market rumor and speculation”. Allergan also declined to comment. The potential for lowering Pfizer’s tax bill by switching its headquarters from the United States to the United Kingdom was touted by Chief Executive Officer Ian Read as a key reason for the proposed AstraZeneca deal. A takeover of Allergan could offer similar advantages given that the Botox-maker is based in lower-tax Dublin. A U.S. attempt to crack down on such tax avoidance deals led to the collapse of AbbVie Inc’s bid to buy Shire Plc, but it is unclear whether those rule changes would preclude potential tax advantages from a Pfizer-Allergan deal.

Dems roll out bill to close gun sale ‘loophole’

Senate Democrats rolled out legislation Wednesday aimed at blocking guns from being sold without a background check. The proposal, from Democratic Sens. Richard Blumenthal (Conn.), Chris Murphy (Conn.) and Dianne Feinstein (Calif.), would close a loophole that allows federally licensed gun retailers to sell a gun without a background check after 72 hours. It is referred to as the Charleston loophole after the South Carolina city where Dylann Roof allegedly killed nine people in a mass shooting. The FBI said earlier this year that Roof was able to buy a gun after the three-day wait time for a background check expired. Democrats on Wednesday urged their colleagues to back the legislation, saying it is a simple and “straightforward” measure. “The background check system is broken,” Sen. Elizabeth Warren (D-Mass.) said. “A bill that is this straightforward is a test for the United States Senate. It asks the fundamental question, ‘Who do you work for?’ … So long as we don’t act, we make it clear that this Congress works for the NRA [National Rifle Association].'” Blumenthal, separately, said that any “inconvenience” created by having to wait longer for a background check is outweighed by lives saved. “Waiting for a background check, even if longer than 72 hours, is a minor inconvenience far outweighed by the benefit of keeping lethal weapons out of the hands of dangerous people,” he added. The legislation already has a handful of Democratic backers, including Warren. However, it likely faces an uphill battle in the Senate where Republicans have shown little interest in moving forward with gun control legislation, instead focusing on mental health bills. Blumenthal’s office first announced that he would unveil the bill earlier this month. Separately, dozen of Senate Democrats unveiled a sweeping gun control push earlier this month, with Sen. Charles Schumer (D-N.Y.) suggesting they could try to introduce and move legislation later this year or early next year.

Justice Kennedy: Public officials can’t ignore Supreme Court rulings

Supreme Court Justice Anthony Kennedy has informally rejected the argument put forth by Rowan County, Kentucky Clerk Kim Davis as justification for her refusal to issue marriage licenses to same-sex couples. Kennedy, who authored and was the decisive vote in the Obergefell v. Hodges case that legalized marriage equality nationwide, was speaking to students at Harvard Law School when a first-year student asked him what his view was of federal or state officials who choose to act according to their own beliefs that might conflict with a Supreme Court decision. Without naming Davis specifically, Kennedy suggested that she should resign if she is unable to carry out her duties as clerk. “How many judges do you think resigned in the Third Reich?” Kennedy asked the audience in a response that has since been posted to YouTube. “Three. Great respect, it seems to me, has to be given to people who resign rather than do something they think is morally wrong in order to make a point. However, the rule of law is that, as a public official, in the course of performing your legal duties, you are bound to enforce the laws.” Kennedy added that individuals have to examine whether acting in accordance with their duties conflicts with their personal beliefs, an action that “requires considerable introspection.” “But certainly, in an offhand comment, it would be difficult for me to say that people are free to ignore a decision by the Supreme Court,” the Reagan-appointed justice said. The exchange was later picked up and reported by the San Francisco Chronicle, who went to Davis’ lawyers for comment in reaction to Kennedy’s remarks. “I think it’s a two-way street, that justices who don’t follow the Constitution ought to resign if they can’t do their job,” responded Mat Staver, the president of the conservative legal organization Liberty Counsel, which has been representing Davis and several county officials in Alabama who have balked at issuing same-sex marriage licenses. “I think the Supreme Court does not have unlimited authority and that five justices cannot say what they want to if it’s not based on the Constitution.” Staver also told the Chronicle that Chief Justice John Roberts, in the dissenting opinion on Obergefell, has argued that the Constitution “had nothing to do with” the newly declared right to same-sex marriage.

The Art of the Southern Obituary

New Orleans has always put some fun into its funerals. Jazz funerals are one of the city’s most well known send-off traditions. These music-filled memorials begin as dirges and end as celebrations, with drums and horns playing traditional hymns, gospel, or rock-and-roll—or sometimes all of the above, as in the 2008 funeral of Warren McDaniels, the fire chief whose processional song list transitioned from “Just a Closer Walk With Thee,” to “Big-Legged Woman.” In Big Easy posthumous parties, there is no such thing as overstatement. So it comes as no surprise that New Orleans also has a long history of memorable obituaries. And one writer, John Pope, has written more than just about anyone during his forty-four year career in journalism (most of those decades were at the New Orleans Times-Picayune). His new book, Getting Off at Elysian Fields, is a collection of more than one hundred of the best obituaries he wrote for the newspaper. The likes of Eudora Welty and Walker Percy are included, but some of the most fascinating eulogies remember the everyday locals that make New Orleans such an eclectic Southern city. Take the first few lines of the obit of William V. Garibaldi Jr., a postman:  For 30 years, residents of Carrollton, Mid-City and Gentilly knew William V. Garibaldi Jr. as the friendly man who delivered their letters and Christmas packages, swapped stories and asked about their families. But this mild, methodical man, who died Friday at age 84 at Memorial Medical Center, had a part of his life that he never discussed during his daily rounds. For nearly four years during World War II, Mr. Garibaldi was a spy, one of the few African-Americans in the Army’s Counterintelligence Corps. “Every cub reporter is given obits not only to have something to do on a slow day, but to learn how to organize information. But some obits can be as stale as day-old grits,” Pope says. As a young journalist in New Orleans in the 1970s, he studied the engaging work of The New York Times’ famous obituary writer, Alden Whitman. “I thought, I could do this, because heaven knows we have characters in New Orleans who are worthy of a resume obituary,” Pope says. “So my boss encouraged me.” More:

All-Male Fox News Panel Can’t Handle Women in Leggings

Tuesday morning was a fun one for Fox News guests Andrew SansoneArthur Aidala, and Willie Robertson: the trio was impaneled to judge three women who appeared on Fox & Friends dressed in leggings or yoga pants. The segment, framed as focusing on a father’s perspective of the topic, went about as horribly as one might expect. Host Steve Doocy’s leadoff question really set the tone: “Willie, are you comfortable with the women in your life parading around in leggings?” When a third model walked out wearing leggings and a tank top, Aidala told Doocy that they had “all taken our nitroglycerin pills before we came to the set.” So fragile is the constitution of a Fox News man: the sight of a woman in athletic attire can cause him to suffer heart attacks. “Obviously, her physique—God bless you, you’ve earned that,” Aidala continued. Robertson, a star of Duck Dynasty who might be the least fashionable person on the face of the planet, noted that while he wears “camouflage tights,” he believes the model needs “a little more coverage.” The entire segment was based on a viral video in which a Tennessee woman takes up the matter of whether leggings are acceptable as pants. The woman in the video concludes that they are not, in fact, acceptable. After judging the final woman’s outfit, Aidala seemed to suddenly realize that the segment might be airing somewhere beyond middle-school locker rooms. He quickly noted that similar rules “apply to boys, too.” “There’s a lot of dress code issues I see, with young men, especially when I’m around the courthouse,” the high-end criminal defense attorney said, dropping in the dose of dog whistle required in any cultural segment on the network. “That whole thing with the pants, and the buttocks being exposed.” Congratulations to these dads, for being brave enough to reveal how women’s clothing makes them feel.

Why Can’t America’s Biggest Retailer Learn from Its Halloween Mistakes?

It’s generally advisable to stay away from the Israeli-Palestinian conflict on holidays, whether at Thanksgiving dinner or on Halloween. Walmart never got the memo: the world’s largest brick-and-mortar retailer was selling an Israeli-soldier outfit as a children’s Halloween costume, until critics pounced. The listing for the costume, modeled after an Israeli Defense Force uniform, pictured a young boy holding a gun and dressed in a full green outfit with Hebrew script on the chest.  Needless to say, the costume sparked outrage on social media. Walmart has since removed the costume, which was on sale for $28 (reduced from an original $57), from its Web site. The company also took down its costume listing for a prosthetic “Sheik Fagin Nose,” which featured a stereotypically large nose on a man appearing to wear a Keffiyeh, after it drew its own social-media backlash. Walmart did not immediately respond to requests for comment on why it had taken down the costumes, or why it had listed them for sale in the first place. It’s unclear if these costumes are still being sold in stores. This is hardly the first time Walmart’s found itself in Halloween hot water. Just last month, it faced similar criticism, and a subsequent removal of a “Little Amigo” costume, also meant for children, which,Complex reported, came with a straw hat, mini-mustache, and striped serape shirt. Complex wrote that the costume’s description read, “Let the Fiesta begin for your little one,” before the retailer wiped it from its site, saying, according to Complex, it violated its “prohibited products policy.” The company bumped up against its own policy and faced Internet ire last Halloween, too, when it devoted an entire section to so-named “Fat Girl Costumes.” At the time, Jezebel reported that the section featured many of the same costumes as the Women’s Plus Size Adult section had. Walmart has yet to respond to questions about whether it’s put new measures into place to prevent this post-offensive-costume-then-remove-it-if-there’s-outrage cycle from spinning round again.



Governor: Solution coming to prevent federal lawsuit


MONTGOMERY, AL (WSFA) – Governor Robert Bentley said Wednesday that the state is working to comply with the 1993 Motor Voter Act. Last month, the State of Alabama got a letter from the Department of Justice notifying Alabama they were not complying with the Voter Registration act, specifically part of the Motor Voter act. The 1993 law said states would be required to make it easy for people getting or renewing their license to register to vote. The Department of Justice found many state offices did not offer easy voter registration, if they did so at all. Secretary of State John Merill and ALEA have been working together for the last couple of months to fix this issue. The Department of Justice has held off filing for a lawsuit, and hopes to solve the problem with as little litigation as possible. Alabama is not the first state to find itself on the wrong side of this law. The Feds have sued 14 other states for violating the motor voter act. “Actually, this is a problem that has been ongoing for a couple of months. We are working closely with ALEA and with the Secretary of State. We will work this out so that we get this situation resolved,” Bentley said. This potential lawsuit is a separate issue from the one congresswoman Terri Sewell called for after the closing of 31 driver license locations. The state received notice of it’s noncompliance before deciding to close those driver license locations.

Judge: Alabama must restore Planned Parenthood contract

In a 66-page decision, U.S. District Judge Myron Thompson wrote that the governor’s August letter terminating the contract with Planned Parenthood Southeast (PPSE) failed to state a reason for the cancellation. Bentley canceled the Medicaid provider contract with Planned Parenthood after a series of videos purporting to show officials of the organization trying to sell fetuses and fetal parts surfaced. Planned Parenthood says the officials discussed a fetal donation program, not sales, and that the videos were deceptively edited. The organization sued the governor in late August, saying his decision violated federal law. The U.S. Department of Health and Human Services previously warned Bentley that the cancellation could violate the law. The governor’s office has cited an ‘at-will’ provision for the cancelation of the contract. Thompson disagreed, writing that it “falls well outside the range of grounds germane to the purposes of the Medicaid Act.” “To conclude otherwise would not only strip the Medicaid Act’s free-choice-of-provider provision of all meaning, but also would contravene clear congressional intent to give Medicaid beneficiaries the right to receive covered services from any qualified and willing provider,” Thompson wrote. Bentley did not allude to the videos in his letter, but said in public statements and in social media that the videos led him to cancel the contract. Thompson wrote that was not an adequate form of notification. “Although the Governor made public statements via Twitter regarding his decision to terminate PPSE’s provider contract, ‘tweets’ are plainly not an acceptable form of notice,” Thompson wrote. A message seeking comment was left with the governor’s office Wednesday morning. Randall Marshall, an ACLU attorney representing the plaintiffs in the suit, praised the decision Wednesday. “Judge Thompson has recognized, as virtually every court has faced with this question, that the termination of Planned Parenthood from providing services to Medicaid recipients based on false and misleading videos violates federal law,” he said. “This is in fact a great victory for women in Alabama to go to the provider of their choice without regard to political choices by the governor.” PPSE did not participate in the fetal donation program. The state paid the group $4,453 in FY 2013 and 2014 for birth control services and cancer and STD screenings. The organization provides abortion services at its clinics in Birmingham and Mobile. Medicaid only pays for abortion in cases of rape or incest, or when a mother’s life is in danger. Thompson issued a preliminary injunction in the case, finding that PPSE and its clients were likely to succeed on the merits.

A look at the 2012 Nation’s Report Card for Alabama

According to the Associated Press, it’s a not-so rosy report card for the nation’s schoolchildren. The 2015 Nation’s Report Card came out overnight. The AP looked at the overall scores and found math scores slipped for fourth and eighth graders over the last two years, and reading grades were not much better. Those scores were flat for fourth graders and lower for eighth graders. The results of the National Assessment of Educational Progress exam suggest students have a ways to go to demonstrate a solid grasp or mastery in reading and math. Only about a third of the nation’s eighth-graders were at proficient or above in math and reading. Among fourth graders, the results were slightly better in reading and in math – about two in five scored proficient or above. The report also found a continuing achievement gap between white and black students.  Here are links to Alabama’s report cards for fourth and eighth graders in math and reading.

What to do with Alabama’s $1 billion BP oil settlement

Nearly $1 billion from 2010 Deepwater Horizon oil spill settlement will pour into Alabama’s general fund during the next 17 years. What’s in dispute is how the money will be spent as cash-strapped lawmakers statewide wrangle for control of the revenue stream. The money is the state of Alabama’s portion of the $20 billion settlement between the federal government, the five Gulf Coast states, and BP. Coastal lawmakers say that money should return to south Alabama. After all, the coastal region was slammed and slimed when more than 210 million gallons of oil leaked into the Gulf Mexico five years ago. But the way that the settlement is written, the money will go into the state’s coffers. Then, it’s up to the Legislature to determine where it will go. That could mean vast expenditures for new prisons, for example, or plugging the state’s $700 million budget hole. “I’m not sure that I like any part of it,” said state Rep. Joe Faust, R-Fairhope “I don’t want to start a civil war, but it’s not fair the way things are done.” State Rep. Margie Wilcox, R-Mobile, proposed legislation in the first and second special sessions earlier this year that would direct half of the money to Gulf Coast communities. Lawmakers from Mobile and Baldwin counties co-sponsored the bills, which went nowhere. Wilcox intends to reintroduce the legislation again in 2016. A deal to divert at least some of the BP windfall southward has a supporter in Senate President Pro Tem Del Marsh, R-Anniston. “I definitely agree that a portion and perhaps a large portion should go to the south coast,” Marsh said. “We need to go ahead and make a decision and get it on paper.” If there’s no decision, he said, the issue will arise in subsequent years. But Sen. Arthur Orr, the chairman of the Senate Budget Committee, is thinking in an opposite direction. In the first special session, Orr, R-Decatur, filed a bill that would apply the state’s BP proceeds to debt. It also went nowhere. “I think it’s the most fiscally responsible thing to do,” Orr said. Otherwise, he said, “When money gets put into the Legislature … the money gets spent as quickly as it hits Montgomery.”

Hubbard hearing on prosecutorial misconduct ends

Proceedings in the pretrial hearing Wednesday took place behind closed doors as Lee County Circuit Judge Jacob Walker heard testimony from grand jury witnesses. In a brief session of open court, lawyers for both sides dispensed with housekeeping matters. “We could not be more pleased with how the three days have gone,” Hubbard defense attorney Mark White said after the hearing. “We had a plan for what we wanted to accomplish this week . . . and we believe we have accomplished for the purposes of this week, 100 percent.” Hubbard faces 23 charges of using public office for private gain. Prosecutors accuse the speaker of using public positions to solicit jobs or investments in business; lobbying Gov. Robert Bentley and other state officials on behalf of clients and inserting language into and voting for a budget that would have benefitted one of his clients. The defense claims the prosecution is politically motivated, and focused almost from the start on Matt Hart, the lead prosecutor in the case. Hubbard’s attorneys accuse Hart of making inflammatory comments about Hubbard and former Gov. Bob Riley and improperly influencing the grand jury that indicted Hubbard. Hubbard’s team has leaned on memos from former Deputy Attorney General Sonny Reagan, whose testimony dominated most of the hearing. Reagan accused Hart of saying he wanted to “ruin” Hubbard politically; of making physical threats against the speaker and of misusing the grand jury. Prosecutors call the charges a fishing expedition and say the defense has no evidence of misconduct. The attorney general’s office repeatedly challenged the relevance of the testimony during the three-day hearing, and argued much of it was hearsay. Solicitor General Andrew Brasher suggested in cross-examination Monday that Reagan took “salty language” too literally, and challenged Reagan for sharing counsel with individuals under investigation by or connected with the grand jury that indicted Hubbard. Reagan resigned from the office in lieu of firing over the issue. Hubbard’s team wants to subpoena other employees in the attorney general’s office over the issue, and raised the possibility of subpoenaing Hart and acting attorney general W. Van Davis – which, if it took place, could disqualify them from pursuing the prosecution. Brasher objected to that Wednesday in open court, suggesting that was the ultimate goal of the defense. Walker scheduled two days in November to take depositions from the employees in the attorney general’s office. The judge still needs to rule on the relevance of the witnesses. “I think this will go on,” White said. “To a large extent, we are dealing with some unprecedented conduct and dealing with unprecedented circumstances. I don’t have a form or a model to lay across this to deal with any timeframe.” Hubbard attended Wednesday’s hearing with his wife Susan. White said they felt “vindicated” during the week. “They know this is a war, but they felt like this week they won a significant battle,” he said.

Statement from Deputy Attorney General Matt Hart

Statement from Deputy Attorney General Matt Hart on Speaker Mike Hubbard Criminal Ethics Case:
One year ago, the special grand jury comprised of 18 Lee County citizens indicted defendant Mike Hubbard on 23 felony counts. Since his indictment, Hubbard has promised to expose the State’s team as rogue, unethical prosecutors. In this week’s hearing, defendant Hubbard provided no credible evidence for his claims. While all defendants are presumed innocent until proven guilty, we look forward to addressing the real issue in this case, which is whether or not defendant Hubbard violated the Alabama Ethics Law 23 separate times.

The Private Schools That Receive Tax-Credit Scholarship Funds

Sometimes it takes seeing things on a map to get a clearer picture. So here’s a map showing where Alabama’s 62 “failing” public schools are and where the 137 private schools receiving scholarships under the Alabama Accountability Act (AAA) are. Hover over the markers for more information about the race and ethnicity of students attending these schools. Hover over the map portion until you see the map controls in the upper left corner of the map to zoom in to get more detail.

Birmingham officials want Uber operating in city by Christmas

Birmingham officials are in talks to adapt the city’s ordinances with hopes that ridesharing companies like Uber could be operating by Christmas. At a Wednesday committee meeting, the Birmingham City Council voted to solicit comments on a ridesharing section of the transportation ordinance through Nov. 13. They could reach a decision at a special called committee of the whole meeting Nov. 17. The city must modify the existing code to allow transportation network companies (TNCs) to operate. Those regulations govern not only ridesharing companies but also limousines, non-emergency medical vehicles, buses and any transportation options that operate on demand or pre-arranged in Birmingham. “The focus is on public safety and leveling the playing field,” said Councilwoman Kim Rafferty, head of the transportation committee. A representative from the city’s legal department said they reviewed similar ordinances in cities like Mobile and Chattanooga to prepare the section regulating TNCs. One of the largest remaining hurdles is the issue of how on-demand drivers are insured and licensed, he said. The transportation committee met this month to review updates before the transportation ordinance was released for a 120-day public comment period that started last week. Council President Johnathan Austin said Wednesday that he believes 120 days is excessive. “I’m 100 percent in support of bringing Uber here but I’m not in favor of giving them everything but the kitchen sink,” he said. “I think we can accomplish that in much less time.”


America will die old and broke: The systematic right-wing plot to ransack the middle-class nest egg

Through a quirk in state term limits combined with a terrible midterm election, the Nevada legislature has been taken over by amateurs and extremists. The legislature is now debating whether to dismantle the Nevada public employee pension system (PERS), a system that has gotten consistently high marks for transparency, responsibility and stewardship. This attack on retirement benefits follows a very familiar pattern of fabricating data to destroy retirements that work and that people really like. It’s the same nonsense and lies used to destroy private pensions two decades ago, but this time it’s being done as part of a partisan wet dream of “limited government.” It’s a strategy as American as fast food and crumbling infrastructure. This latest skirmish in the retirement wars perpetuates the biggest lie ever foisted on America—that we cannot afford retirement benefits. Private pensions have indeed been systematically destroyed in recent decades, and replaced by “defined contribution” 401k plans. The conventional wisdom is that pensions are “too expensive,” but this is the heart of the lie. A great many private pensions were once over-funded, but a change in law allowed companies to “invest” the “excess” funding in other parts of their business. Once businessmen could legally raid the pension fund, the idea of private pensions was over. Many books have been written about the great pension theft. I recommend, for one, reading “Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers.” Spoiler alert: you will feel rage. I’m no bystander in all this, because I’m a member of the Nevada pension system through my day job.  Even when I considered myself a Republican, I supported the pension system, just as my conservative friends and colleagues still do. But a lot has changed in a few years. Public pensions used to have bipartisan support, but the dysfunction and extremism that has turned Washington D.C .into a shit-show has spread to states like mine. The attacks on benefits are always underhanded and dishonest, an effort to keep critics quiet, and this latest attempt is no exception, because it only targets future members of the pension system. It’s the same tactic used in the constant assault on Social Security — just take it from people who don’t have it yet. My favorite visual is the conservative who collects Social Security month after month (after month after month) then votes for politicians who will destroy those very modest benefits for his children — all while reciting the false narrative of “not saddling” those same children with debt. A better idea (rather than stealing from our own children) would be to pay the reasonable levels of taxes necessary to fund the programs we all use. But “family values” conservatives are always delighted to burn the crops and salt the earth behind them, children be damned. More:

The Party Is Over

The tea party is over. Yesterday, Gallup released a poll showing only 17 percent of Americans support the tea party, a record low. Even among conservative Republicans, two-thirds of whom used to back the tea party, support has dropped by more than 20 points. Yet today the Republican Party is as troubled as ever: overrun by political neophytes and controlled by an ungovernable minority that is, unsurprisingly, unable to govern. The collapse of support for the tea party in the midst of all this makes clear two things. First, the tea party was never as novel as it appeared, comprised mostly of rebranded movement conservatives. And second, commentators have for too long used the “tea party” label to categorize rather than explain one of the most important developments in the conservative movement since the election of Ronald Reagan. In the season of Trump, it’s understandable why analysts would look for the roots of Republican ruin in the tea party’s television-ready, office-unready candidates. “The GOP’s dysfunction all started with Sarah Palin,” read the headline for an op-ed by former Obama chief of staff William Daley. Daley offered the standard genealogy of Republican devolution: Palin begat the tea party, which begat Christine O’Donnell, who begat Herman Cain, who begat Donald Trump. But this is too narrow a history, one that misses the structural changes that allowed these candidates to rise. For the roots of contemporary GOP dysfunction, we have to look to the 1990s. Two major developments in the 1990s created the dynamics now remaking the Republican Party. First, the party governed largely from Congress, led by an agenda-driven speaker backed by an unusually conservative caucus. Newt Gingrich’s Contract with America, containing only issues that had at least 60 percent public support, gave the Republican revolutionaries a working platform – one that ultimately didn’t work. Each agenda item that passed the House died in the Senate, was vetoed by President Bill Clinton or was ruled unconstitutional by the Supreme Court. That subversion of the contract had profound effects. Unable to enact their agenda, Republican representatives mastered the art of obstruction instead. They shut down the government, launched endless investigations and impeached the president. And they were rewarded with the White House and several chances to run Congress. No wonder they returned to those tactics when President Barack Obama entered office. The other major development of the 1990s was that conservative media climbed into the party’s driver’s seat. In 1988, Rush Limbaugh’s radio show went national. By 1992, he was considered so critical to conservative support that George H.W. Bush, in a desperate bid to shore up his base, invited Limbaugh to spend the night in the Lincoln Bedroom. Two years later, when Gingrich and co. swept into office, they made Limbaugh an honorary member of their caucus. And two years after that, Fox News went on air. More:


Morning Money

WALL STREET’S TAKE: BUY RUBIO; SELL BUSH — POLITICO’s Ben White: “When Wall Street wakes up Thursday morning, an already perceptible shift in establishment momentum toward Marco Rubio — and away from Jeb Bush — could become a torrent. The Florida senator shined in a contentious debate on CNBC that focused on the economy and allowed him to weave in his own personal story while focusing on problems plaguing the U.S., ranging from slow growth to stagnant wages.

“The big loser on the night was clearly Bush, the former Florida governor who needed a dynamic performance to quiet fears among donors and the GOP establishment that he has no path to breakout of his current single-digit standing. Even die-hard Bush supporters on Wall Street admired Rubio’s debate performance Wednesday night. ‘Rubio has been the most disciplined candidate in the campaign so far, and he’s the most disciplined tonight,’ one Bush supporter emailed during the debate. ‘He’s very sure of himself, too. And for the first time even had one or two lighter moments.’

“Another Wall Streeter who is friendly to Bush emailed his debate rankings: ‘Rubio, Fiorina, Cruz, Christie. Full stop. Everyone else … .zzzzzz.’ Early on, Bush himself seemed to acknowledge that he may not have the temperament for the current political moment. ‘I am by my nature impatient,’ Bush said at the outset of the debate. ‘And this is not an endeavor that rewards that. You gotta be patient. You gotta be — stick with it, and all that. But also, I can’t fake anger.’ Bush also seemed to swing and miss when he tried to take on Rubio skipping votes in the Senate”

TRUMP FADES — “The debate seemed to offer Trump a clear opportunity to tout his own job creation record and billionaire credentials. But the real-estate mogul at times seemed to vanish from the crowded stage and found himself defending bankruptcy filings and lacking specifics on how he would light a rocket under the economy in ways that would make it unnecessary to reform entitlement programs. ‘We are going to make a really dynamic economy from what he have right now which is not at all dynamic,” Trump said. ‘We are going to bring jobs back from Japan, we’re going bring jobs back from China. We are frankly going to bring back jobs from Mexico.’”

“But an exasperated Trump seemed to welcome the debate’s end and boasted of his ability to shorten the affair. ‘In about two minutes, I renegotiated it to two hours, so we can get the hell out of here,’ Trump said. Rubio’s approach was to consistently return to his own personal story as way to connect on the soft spots in the economy and contrast himself to the wealthy former governor with the famous last name”

CARSON — Was he even on stage?

TRUMP GETS KASICH’S LEHMAN ROLE WRONG — Via POLITCO’s Wrong-o-meter: “After Kasich touted his economic record, Trump went after his work at Lehman Brothers … Trump said Kasich was on the board, and Kasich correctly countered that he never was. He was a managing director in the investment banking division until the company’s collapse, however. In Ohio, Kasich’s opponents tried to blame him for disastrously tying up some state pension money with Lehman. Kasich said he made some introductions but they never led anywhere.”

CRUZ FLOATS FLAT TAX — POLITICO’s Mike Allen: “Ten minutes before show time, the Wall Street Journal posted a Ted Cruz op-ed outlining his tax plan: ‘A Simple Flat Tax for Economic Growth: A 10% income tax and a 16% business tax would put an end to the Eight Lean Years of Obama.’ The money bite: ‘Reagan did it in 1981, and we can do it again.’ The piece also invokes Tip O’Neill and Robert Bartley. If you have to ask, you’re not the target audience.” The op-ed:

WARREN UNPLUGGED — Thanks to everyone who turned out and packed the house in DC for our Morning Money Breakfast with Elizabeth Warren and Richard Cordray. Lots of newsy stuff. A couple of highlights below and links to stories by POLITICO’s Maggie Severns and Colin Wilhem.

Warren on what she would ask Donald Trump in a debate: “How exactly are you planning to rip 11 million people out of this country, people who are living with their friends, with their families, people who are part of the fabric of the lives of Americans? How exactly are you going to do that? Are you planning to do that at gunpoint?”

Warren on Hillary Clinton saying on Colbert that she’s prepared to let big banks fail as president: “I’m glad to see the Secretary moving in that direction. I think it’s important that she get the chance to continue to lay out her ideas here.”

Warren on whether Bernie Sanders has asked her to campaign for him: “No, he hasn’t. But, you know, Bernie’s out there speaking from the heart about the same set of issues that Bernie Sanders has been talking about for a very, very long time. And I think it is terrific that Bernie got into this race”

Cordray on whether CFPB should be a commission and whether a Republican president could defang the agency with a weak director: “Whether you could accomplish that by changing the director or accomplish that by changing the chair of a commission or the majority on a commission, that amounts to about the same thing.”

Cordray on Corinthian and the for-profit college sector: “There’s a much smaller number of students in the for-profit sector, maybe 10 percent of all students, but they’re responsible, a Brookings report showed, for about 50 percent of defaults. This sector is not working, and there’s an awful lot of American taxpayer money going into this sector, and it needs to be cleaned up. This is something that we will continue to be active on.

Warren on why she hasn’t endorsed for president: “I’m liking this debate. I think the debate is what it ought to be. I’m really–I’ve got to say I’m really proud of the Democrats. … I think we’ve heard some really terrific stuff from Bernie Sanders. We’ve heard Martin O’Malley out there, you know, trying to get his licks in on this. And Secretary Clinton has laid out a lot of ideas, and I think that happens in this process

Colin Wilhelm on Warren’s comments about Paul Ryan:

Maggie Severns on Corinthian:

And Maggie on Warren and Cordray on the robo-calling provision in the budget deal:

Full event:

FED STAYS ON HOLD — Pantheon’s Ian Shepherdson: “In one line: December still on, employment reports permitting. … In short, then, the Dec hike now hinges on the next two employment reports. Some combination of payrolls, unemployment and wages signaling continued improvement will be enough; we’re leaving Dec as our base case, though it is by no means a done deal.”

Mohamed A. El-Erian on Bloomberg View: “The Fed statement does very little, if anything, to help shift the market away from an obsession with the timing of the first rate hike and toward a focus on the bigger picture: what is likely to be the ‘loosest tightening’ in Fed history, particularly when it comes to the irregular pace of the hikes and the ending point of the rate-increase campaign.”

GOOD THURSDAY MORNING — M.M. will be on CNBC on 10:30 a.m. talking about the GOP debate. Email me on and follow me on Twitter @morningmoneyben

DRIVING THE DAY — Soul-searching in Miami for Team Jeb … Budget deal heads to the Senate for final passage (and there was much rejoicing). Rand Paul has promised a filibuster but he’s not going to be able to stop it … First estimate of Q3 GDP at 8:30 a.m. expected to show growth down to 1.5% … Pending Home Sales at 10:00 a.m. expected to rise 1.0% …

HOUSE CLEARS BUDGET DEAL — POLITICO’s Lauren French: “The House passed an $80 billion budget deal on Wednesday that increases spending caps for two years and raises the debt limit until March 2017. Republican leaders were able to rally enough GOP lawmakers, with a strong assist from Democrats, to pass the bill over the objections of hardline conservatives. … The Senate is expected to clear the measure, which would effectively draw to a close the era of budget battles that helped define President Barack Obama’s relationship with Congress.

“The deal also caps off the congressional career of Speaker John Boehner (R-Ohio) who was a key player in crafting the deal with Senate Republican leaders and the White House. Boehner is set to resign from Congress at the end of October. … Congress won’t have to deal with any high-stakes fiscal battles until after the coming election — a key goal for leaders in both parties. But GOP conservatives remained vehemently opposed to the deal, which they viewed as a capitulation to … Obama and another egregious expansion of the federal government”

DECEMBER ON THE TABLE FOR FIRST HIKE — WSJ’s Jon Hilsenrath: “Fed officials suggested they had become less concerned in recent weeks about turbulent financial markets and uncertain economic developments overseas. They also pointed specifically to the next meeting as a time when they would be assessing whether it was finally time to raise rates. ‘In determining whether it will be appropriate to raise the target [fed-funds interest rate] at its next meeting, the [Fed] will assess progress — both realized and expected — toward its objectives of maximum employment and 2 % inflation,” the Fed said in its statement.”

“The explicit reference to the next meeting effectively meant the Fed’s decisions about rates are now being made on a meeting-to-meeting basis, though Fed officials stopped short of committing to an immediate move. Officials struck from the statement a sentence introduced in September that pointed to market turbulence and global developments as potential restraints on U.S. economic activity. That reduces an impediment officials had stressed in September as standing in their way.”

THE RYAN ERA BEGINS — POLITICO’s Jake Sherman and John Bresnahan: “House Republicans selected Wisconsin Rep. Paul Ryan on Wednesday as their nominee for speaker of the House, the first step in ending a month-long saga over the party’s leadership after John Boehner’s surprise resignation. … Ryan defeated Florida Rep. Daniel Webster in a closed-door election of the House Republican Conference. Ryan received 200 votes, easily earning the support of the majority of the conference. Webster received 43 votes and Rep. Marsha Blackburn of Tennessee got one, as did Majority Leader Kevin McCarthy (R-Calif.).

“The full House is expected to ratify Ryan as speaker on Thursday. Boehner (R-Ohio) plans to leave Congress this week. Ryan, a 16-year veteran of Congress who was reluctantly lured into the race for speaker, has promised as speaker to empower committee chairmen and rank-and-file members, and to reform House rules. … ‘We’re going to move forward. We’re going to unify,’ Ryan said in some brief remarks to reporters after the Republican Conference vote. ‘We think the country is headed in the wrong direction. We have an obligation here, in the people’s House, to give this country a better way forward.’”

SUMMERS ON THE FED — Larry Summers blogs: “My friends Mike Spence and Kevin Warsh, writing in yesterday’s Wall Street Journal, have produced what seems to me the single most confused analysis of US monetary policy that I have read this year (Brad DeLong has expressed related views). Unless I am missing something — which is certainly possible — they make a variety of assertions that are usually exposed as fallacy in introductory economics classes. …

“My problem is not with their policy conclusion, though I do not share their highly negative view of QE. There are many harshly critical analyses of QE such as those of Martin Feldstein that are entirely coherent and consistent with the macroeconomics of the last 50 years. My differences are based on judgments about empirical magnitudes and relative risks not questions of basic logic.”

ICAHN TAKES ON AIG — WSJ’s Chelsey Dulaney, Leslie Scism and David Benoit: “Activist investor Carl Icahn said he has accumulated a ‘large stake’ in American International Group Inc. and called for the insurer to split into three public companies. In a letter to AIG Chief Executive Peter Hancock that Mr. Icahn posted on his website, he called for the global insurer to separate both its life and mortgage insurance units from its core property-and-casualty business, and embark on a ‘much needed cost control program.’ AIG shares climbed about 4% in afternoon trading and are up 12% this year.

“AIG has occasionally discussed a breakup internally, according to a person familiar with the matter. But the company sees its costs rising from a broad split in part because the way its sales force is structured, the person said. Splitting up into separate units could amount to hiring a second sales force, the person said. AIG executives also are worried about how ratings firms would react if the units were separated, and whether the company would be forced to hold significantly more capital”

DEUTSCHE BANK PREPARES $200M SETTLEMENT — NYT’s Ben Protess and Peter Eavis: “Deutsche Bank, the German financial giant with a big presence on Wall Street, is close to settling one of the many government investigations it currently faces. In a deal that is expected to be announced as soon as next week, Deutsche Bank would pay at least $200 million to resolve investigations into its dealings with countries like Iran and Syria …

“The investigations, led by New York State’s financial regulator and the Federal Reserve, have centered on whether the bank’s New York branch processed transactions for clients in those countries in violation of United States sanctions laws. The people, who spoke on the condition of anonymity because they were not authorized to discuss the negotiations, cautioned that the deals were not yet final. The Fed, in particular, was still negotiating a penalty, and the final sum is not known.”

POTUS Events

10:00 am || Receives the Presidential Daily Briefing
12:30 pm || Lunch with Biden
2:45 pm || Meets with Secretary of Defense Carter
7:25 pm || Holds a fundraiser for Congressional Democrats; McLean Virginia

All times Eastern except as noted
Live stream of White House briefing at 12:30 pm

Floor Action

The House is in at 9 a.m. On tap: electing the next speaker of the House of Representatives. The Senate is in at 10 a.m. for some great intervening day action.