Durham met predictable resistance from the same agencies that had committed the very acts being investigated.
The CIA, now headed by Gina Haspel, and the FBI, now headed by Christopher Wray, refused to turn over any
documents they weren’t forced to. Their resistance significantly slowed Durham’s work. So did the pandemic,
which prevented grand juries from meeting to consider the evidence he uncovered.
These delays are only half the story.
The other half is the inherent, unresolvable tensions between the political and criminal dimensions of this
investigation. Career prosecutors are obliged to be concerned only with assembling solid evidence to win
criminal convictions, however time-consuming that is. If one indictment is part of a broader picture and might
reveal information to other targets, prosecutors keep it secret as long as they can.
These procedures pose no problems in ordinary cases. In this case, however, they pose big problems since the
crimes being investigated were directed at political figures, had political consequences, and may have been
politically motivated. Citizens have a right to know -- right now, before another Election Day -- how the results of
the previous presidential election were undermined by the very agencies who are supposed to be the bulwarks
of American democracy. The targeting by the FBI and CIA of Donald Trump’s campaign, transition, and
presidency corrupts the very idea of free-and-fair elections, the peaceful transfer of power, and nonpartisan law enforcement. If that’s what happened, Americans must know who did it.
The Gordian Knot here is the unavoidable, unresolvable tension between the proper procedures used to
investigate complex, white-collar crimes and the inherently political nature of the crimes being investigated in
pulls on the other end. One demands secrecy; the other, openness. Both are completely legitimate. Because
they pull in opposite directions in this case, the knot keeps getting tighter. Secretive criminal investigations
proceed with a logic that is fundamentally different from that of free and open democratic elections. Each has its
own timetable, and the gap between them cannot be closed by Election Day 2020.
Durham has moved on a legal timetable, not a political one. That’s entirely appropriate. But it comes at a high
cost to voters and to the Trump White House. It leaves the attorney general with no way to inform citizens what
his department has discovered before they cast ballots. Although Barr could speak about the broad contours of
his findings, doing so would seem partisan and, in any case, would be hard to do without naming names. Those
names should only be revealed through criminal charges or court cases. Indict or shut up. Violating that cardinal
rule was the same mistake FBI Director James Comey made when he discussed Hillary Clinton’s emails and
server. Barr and Durham won’t repeat it.
So, how can citizens acquire the information they need between now and Nov. 3? How can they find out what
senior officials in the Obama administration did to surveil political opponents and cover it up when they lost the
What we have seen so far is a textbook example of bureaucrats covering their tracks, even if it harms the country
they were hired to serve. Although some redactions are necessary to protect national security and on-going
criminal investigations, many others were likely made to protect government agencies from humiliation or worse.
That self-protection is why the State Department, FBI, and CIA have refused to give up documents. Lower-level bureaucrats have an additional reason. They fear the disclosures will help Trump.
Now that Election Day is so imminent, these agencies have even more leverage to keep their secrets. Trump
cannot fire the Slow-Walkers-in-Chief, Christopher Wray and Gina Haspel, since doing so would ignite a political
firestorm, just as firing Comey did. Wray, Haspel, and their colleagues know that, so they try to wait out Trump
and hope for the best.
Still, the president does have some levers. John Ratcliffe, who is the director of national intelligence, outranks
Haspel and can overrule her. He should do so if he thinks she is stalling to protect her agency or her position.
She is vulnerable because she headed the CIA’s London station when Obama’s CIA ran so many anti-Trump
operations on her territory. As for Wray, he is Barr’s subordinate in the Justice Department. The AG should
override the FBI director unless disclosures would imperil a Durham prosecution. The practical danger is that
Wray would complain to the New York Times and Washington Post, just as Comey and his deputy, Andrew
McCabe, did. Those friendly publications would undoubtedly reprise their old headlines: “Sources say AG
As we peer through a glass darkly, we should remember who failed to inform us about these scandals for years,
leaving us with so few options now. It was the Democratic House of Representatives and the mainstream media.
On the Senate side, the Intelligence Committee was useless, and the two committees that did try to investigate,
Judiciary and Homeland Security, were stonewalled by the very bureaucracies they were probing. They are still
being stonewalled. The only breach in this cone of self-serving silence came thanks to the Freedom of
Information Act, used by Judicial Watch and a few others to obtain government information hidden from our
elected representatives.
The mainstream media has been an embarrassment. It so revered the Obama administration that, instead of
reporting on its officials’ malfeasance, it protected them. It is still protecting them, as well as Hillary Clinton and
her campaign. The country’s leading news organizations had zero interest in uncovering serious violations of
constitutional norms governing fair elections and unbiased law enforcement. Instead, they leaped head-first
down the “Trump-Russia collusion” rabbit hole. They emerged dirty but unbowed. One result is that about half the
American public now believes the media is a branch of the Democratic Party. Actually, everyone does, but only
half thinks it’s a bad thing.
Republican frustration with this coverup is palpable. After four years, they say, we still don’t have a full accounting
of how the Obama administration used the powerful tools of law enforcement and intelligence agencies against a
political opponent. We ought to know before the election, but we won’t. If the Democrats win and take back the
Justice Department, we may never know. Why would a Biden administration ever want to pursue that issue?
failed in their duties. Their failure left only federal prosecutors to investigate, and they couldn’t begin until Mueller
and Sessions were gone. Durham’s criminal investigation is necessarily secret, and properly so. It moves at its
own deliberate pace. For voters, that’s too slow. The alleged crimes are grave, those involved were high-ranking
officials plus the Democrats’ 2016 candidate. The party’s 2020 nominee ranked second only to Barack Obama
when the crimes were committed. The unhappy result is this whole nettle of serious crimes remains hidden from
voters who deserve to know.
Further to my last Rant, and the implications of the massive effort by central banks to
monetize the downturn in the world economy. Countries across the world have resorted
to massive fiscal spending programs to try to sustain their populations through the
shutdown of the world economy. Just as the US had the CARES Act, the EU and other
nations including Russia and China used similar funding to sustain their own economies. As with everything else, there is no free lunch. The world was over levered before the virus,
and now parts of the world are way over borrowed. The central banks, just as the Fed has
done, have printed money, and then bought the bonds of their governments since there
was not the capacity in the free markets to buy it all.
Now the entire world is in so deep, it is unlikely there is any way out. The world
economy simply cannot grow its way out. Here are recent statements by two Fed
presidents. Rosengren: If you want to follow a monetary policy that keeps rates low for a
long time, you must have a robust supervisory authority. Low rates for a long time are counterproductive. Kashkari: I know we can’t keep doing what we are doing. As soon as
there is risk everyone flees, and the Fed has to step in and bail out the markets.
In the EU, the banks were weak to start because they never fully took the all of the steps
the US banks took to clean up the mess from 2008-9. EU banks have relatively low
equity capital compared to the big US banks which are all in excellent shape, even after
the virus. Spanish banks are especially weak, as are the Italians. The old Deutschemark
was a bedrock of Europe, as was the Swiss Franc. There is no Deutschemark anymore.
That is now the Euro. As a result the northern nations have to carry the southern ones
who do not seem politically capable of solving their banking and fiscal problems.
Likewise, as you know, the US Congress is dysfunctional, and unable to deal with the
fiscal mess we are in. Many EU stocks trade below book value, so they are not able to
raise new equity capital at a price that makes sense. Large numbers of US stocks still sell
at prices below where they were in 2019. The Dow is flat for the year. The Nasdaq is up
3% and PE’s are too high at 33.6x. The S&P is up only 7.8% with a 35x TTM PE.
Ignoring 2009, that PE is almost at its all-time high. That is a big bet on future earnings.
So we are left with the central banks monetizing the huge deficits of the industrial
nations. This has several potential outcomes. The EU might decide to nationalize some
of its banks since the ECB is keeping some alive as it is.
There has to be a consolidation of EU banks, and new equity raised, or there will have to
be a government or ECB takeover. That would be really bad. At some point soon, the
northern nations might finally say no more bailouts to the southern countries like Italy
and Spain. They are very close to doing that. As the willingness of the market to invest
in the bonds of weak nations continues to disappear, rates will rise, and the ECB will
have to continue to be the buyer, or as is happening, it becomes the issuer of the bonds
as it is the only real credit left. At some point various nations might resort to currency
controls to try to protect their banks and currencies. This never works out well. As it gets
harder to market the bonds, rates rise, and the squeeze becomes worse. There could be a
point at which the EU devalues the Euro in order to compete with China and the US.
None of this is for sure, but any or all these things are possible in the new world of
pandemic which has completely upended the financial and currency markets.
Real interest rates are negative across the world, including the US now. In time, all of
this is bad news for bondholders. As currencies weaken, and possibly devalue, that
breeds inflation. That leads to higher rates eventually to attract buyers for their bonds.
Just look at Argentina . It just lurches from monetary crisis to crisis, and the people
become poorer. Bonds become worth even less. The US is not much better off for bonds.
We have negative real rates, and an inability for the private market to absorb all the
Treasury issuance. In time that will force rates higher and bond values lower. The 40
year bull market in bonds is ended, and it is most likely losses from here for most
bondholders.
The money managers keep telling you to own 40% or more in bonds, or ladders. That
worked for a few decades, but it no longer makes any sense. That strategy ended. Not
only do you get nil yield, but now you also have increased credit risk, and you now also
have major principal market risk. This is exactly what Biden’s proposed plan will bring
you. Huge deficits and, in time, higher rates, more Fed purchases, a weaker US dollar,
and inflation. When this occurs stocks and bonds also get hit badly.
The virus has changed the world, and not for the better. There is no way to predict when
the pandemic will really end. Luckily the US is in the best position of anyone to get out
of this with the vaccines having been fast tracked to be ready by year end. That will turn
out to be a massive great advantage for the US that the press does not understand at all.
They prefer to attack Trump over the virus instead of encouraging everyone to get the
shot. Guthrie thought it more important to demand to know which day he tested positive,
instead of asking when will the vaccine and therapeutics will be ready. The big issue is
to get everyone to take the shot.
Other countries will come second even though there are supposedly plans to have
worldwide distribution, and so the disruptions will continue longer in the EU, and parts
of Asia and the Mideast. That is not helpful to the US economy since we need tourists,
and we need to sell things to the rest of the world. This means the full world recovery is
years off. Many countries will be left in essentially insolvent shape. Poverty is rising
again. That means social disorder in more places. Technology will become essential as
work from home and order online become embedded. Again the US is in better position
than most with our tech industry being in the lead. Once 5G is fully in place, and
available throughout the country, and AI is embedded in many more functions, we will
be able to take another technology leap forward.
The EU will continue to get squeezed between China and the US, leading it to be even
weaker. It is why I have said for a long time, do not invest in Europe. It is possible the
EU could face deflation in the future as its economy remains weak. Now, with a major resurgence of Covid in the EU, it will simply exacerbate the recession in the region. The
big PE groups that raised EU distressed funds may find themselves in deep problems if
the US prospers and the EU sinks. China will continue to challenge us, and will make
further efforts to take over Taiwan which has chip technology China needs.
However, the rest of the world that took Chinese loans for infrastructure are turning
against China, as are many others as a result of their being the source of the pandemic,
the concentrations camps, and the seizure of Hong Kong, threats against Taiwan, and domination of the South China Sea. Xi may have gotten too aggressive, and the US may
be able to get much of the rest of the world on board with us as a result. Pompeo has
been working hard at this. If they do try to invade Taiwan, things could easily spin out of
control instantly. It is why we need a vastly superior military with a much bigger Navy
as soon as possible. One other outcome that is already happening is the end of
globalization. Trump has ended that, and the pandemic has crushed it.
Net office absorption is negative 29 million sq ft this year. The worst since 2001.
Vacancy is 13.8% and headed higher. There is increased supply completing construction
and coming on line with nil demand. Urban office has more down to go. Hotels in big
Dem run urban cities occ down 77% on average. In Republican Midwest down 38% +-.
That is the difference between political lockdowns and reopen
Offsetting this gloom was the Philadelphia Fed manufacturing indexes. The diffusion
current activity index for October was up 115% over September, new orders are up 67%
and most futures indexes are up. Employment however, was down 19% although 23%
of firms hired more and 10% reduced staff. If the new orders are so high, employment
will have to follow up this next few months. On the other hand the NY Fed indexes
slowed. So it is a mixed picture, and highly likely impacted by which region and state
reopened more or less. NY is way behind much of the rest of the country in reopening.
So where does all that leave us. Not in a good place as investors long term. It is why the
election is so critical. If the Dems get full control, the fiscal budget will explode, Taxes
will go so high it will kill the stock market and the economy. The Fed will have to
expend trillions more to monetize that debt. The actual tax rate on cap gains for very
high income investors, be it in stocks, real estate, or companies, or your second home,
will be confiscatory. It will be 60%, or higher, all in for NYC, CA, NJ, and an end to
step up on inheritance. Taxes will be levied in time on middle income workers as well to
cover all the spending, and the economy will pay a big price through lower wages, and
higher prices to cover the taxes. The stock market will crater. Bonds will crater as the
deficit rises and rates rise to sell all that debt. You get crushed.
The flight out of NYC, CA and NJ by big taxpayers will accelerate to a tsunami. So
what to do you ask. Great question. Maybe gold or gold mining stocks. Maybe cash.
Holding cash for a while might make sense. But better to vote for Trump and a
Republican Senate. Go vote. Everything depends on it. It is not that the fiscal debt does
not get larger, but it will do so much more slowly and your taxes will not rise. In the
short run equities may be the right thing, but I am very ambivalent. I have already
monetized a portion of my portfolio, and may sell some more. I prefer cash in hand to
get past Nov 4. Make your decision after the debate, and after much more is known
about the Hunter emails, a stimulus package, and more earnings this week.
This is all really ugly and depressing, but we must face reality of where the world really
is, and what could possibly happen. There are a lot of very expert voices now warning
loudly of what could, and likely will happen. I am not suggesting all this will happen, but
parts of it will, and so hunker down for the next few years. The big party in the stock
market is possibly over, or soon will be. My intent is to get you thinking about all these
things, and to then make more well thought out decisions. There is no magic answer,
and there is so much uncertainty and chaos, it is hard to make predictions.
Biden does not get you stability. He compounds the problems. The stock market may rise
for a while on the expectation of good earnings, big stimulus spending, and the vaccine
finally being released, but it does not mean the real structural issues laid out here will not
come into play. It is just a matter of time. This is a time to stay conservative with your investment dollars, and in easy to liquidate assets. Best to invest in solid US companies
with big liquid balance sheets, and good cash flow that have products or services that
benefit from the pandemic. The problem is, many of the growth companies have too high
PE multiples already. Even if Trump wins, the above monetary and world issues remain.
Based on Trump’s very aggressive efforts to rally voters, the high registration of new Republican voters, the massive door to door ground game being done by Republicans,
the strengthening of the economy-(maybe GDP up 33% in Q3), earnings are above
projection, the Hunter emails now seem to be real, Joe’s refusal to answer about packing
the court, and the coming of a vaccine, my gut guess is Trump wins. He has momentum
and Joe is hiding, which suggests he can’t answer about Hunter or he has to lie. The polls
are wrong again. But that is just gut. If Trump stays calm in the debate, and talks
economic policy, taxes, Hunter emails, packing the court, and China, and lets Joe talk
and bury himself, Trump will reverse the damage from the last one, and can possibly
win.
The Hunter emails are not a Russia disinformation program according to the FBI, CIA
and DOJ, and so they are the October surprise and will damage Joe. The Republicans
need to hold the Senate no matter what. There are now supposedly two more relevant
computers the FBI has seized belonging to other people involved, and that are on
different servers. DNI Ratcliffe gave an interview which said Schiff is lying again, and intelligence has no information to suggest the emails are Russian originated. The receipt
issued by the shop has Hunter’s signature, so the laptop is really his. Biden won’t discuss
it which suggests it is all real, or the campaign would have said it is fake. Nobody has
denied that was his computer, nor his emails. There are supposedly some pretty bad
things related to some type of sexual incidents or topics. We will know a lot more in a
few more days. If all of this is proved real, Biden is finished. We will see what is real or
. This could be a bigger scandal than the Russia hoax, and far worse than Watergate if it
is proven to be true. If true, Twitter and Facebook are in deep trouble. Pelosi needs to put
up or shut up now. This is the big week when it all happens.
Why is Joe hiding two weeks before the election:1. He needs time to memorize his
responses for Thursday, 2, he was too tired after traveling and campaigning and needs
rest, 3.the emails so far and more to come today and tomorrow are true and he has no
good explanation. Take your pick. It is one of them
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ This is what I meant when I wrote the memo about intimidation.
68% of Trump supporters won't put a Trump sign in their yard
64% of Trump supporters won't put a Trump bumper sticker on their car
So many "silent" Trump voters out there.
Liberals may gloat they have won the intimidation war but when the radicals attack them they will learn about
the boomerang effect but it will be too late..
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Every story has two sides except when Democrats, the mass media and technology behemoth's do not want you
to know:
Joe Biden Insists Son Never Profited Off Family Name;
Hunter And Ex-President Of Poland Say He Did
5 Ways Hunter Biden's Business Deals Empowered
China at Americas Expense
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