Dagny had a spill and wanted to try again. Blake is our new fashion plate.
Stella and her fashion eye-wear and Max, the pumpkin.
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Larry the Rant Writer back from Europe. (See 1 below.)
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Bibi could be indicted over cigars and free news time and Trump over hate and trumped up charges of everything
but what counts, ie. high crimes etc.
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From one of my dearest friends, a fellow memo reader and one of the brightest lawyers I know. (See 3 below.)
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Dick
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1) When in Europe I was able to watch BBC and other Euro channels every day. The issue on Brexit is N Ireland is part of the UK, and Ireland is in the EU. Northern Ireland wants no part of the EU, but everyone wants a totally open borer between the two Irelands. After Brexit, N Ireland will not be part of the EU, so there is an issue of customs at the land border and preventing goods from going across without duty. If there are no border stations and fences then that becomes a huge issue. That in essence is the problem on Brexit. So they spent very long days last week working out some sort of fix for this, but the N Ireland leaders have rejected it. Some rebels in Parliament want no Brexit ever, and are trying to torpedo any deal. The public is fed up and says -just do a deal, but it is not yet going to happen. Another delay will solve nothing at all at this point. Parliament voted for a delay, Johnson said no delay. Parliament is as bad as Congress. It is hard to know at the moment how this gets resolved as Johnson and the EU people tried very hard and worked in good faith to come to a deal, and it is not clear that there is any room left to compromise after last week. It is a mess.
Not much has changed in the capital markets in the last two weeks. The stock market has not moved materially. The ten year has risen about 20 basis points, but is still is very low. The yield curve is no longer inverted. It is not clear what that means since we now have the Fed buying at the short end and the China trade deal is impacting the ten year. It is likely the Fed will cut rates another 25BP this month. If things go well with the China deal, the Fed does cut, and if earnings continue to beat this reporting period, then it is unlikely there will be a recession in 2020. However, all is murky. Much of the rest of the markets are seemingly biding time. The Chinese vice premier has confirmed that a lot of good progress was made on a trade deal. None of us knows what that means yet, so whatever commentary you hear on TV, or online, is meaningless until we see the real agreement, and if it is signed when Xi and Trump meet. If it is, and if the Chinese have finally agreed to minimize IP theft, and other trade cheating, then maybe they will reach a total deal in 2020, and that will mean a booming stock market, capital expenditure will resume, and price increases due to tariffs will disappear. My gut says there will be a real deal at some point because I think the Chinese realize Trump will not back off, and their economy is slowing, and it is in their best interest to do a real deal. However, the whole impeachment circus is a big inhibitor to a successful deal and may cause the Chinese to hold off doing the deal. The Dems are causing huge harm to the whole world in the pursuit of Trump by adding a huge unknown to any negotiation with China, Iran, Turkey, N Korea, or whoever.
I recently read a theory related to interest rates which makes sense to me. Since WWII 74 years ago, there has not been a massive war taking tens of millions of lives. We no longer have pestilence, massive deaths from disease, nor death at middle age as a norm. As we saw with Ebola, the world now reacts very fast and effectively to any outbreak of a deadly disease. Sanitation in most of the world is now at least better than it had been as recently as ten or fifteen years ago. Medical science has solved many diseases that killed people only ten years ago, and it is moving quickly to do more wonderful gains against aging and death. Food has become far more available to may poverty stricken people around the world with the advent of GMO, especially for rice. In short, the health of the world is greatly improved. In the middle ages 25% of babies died within 7 days. Another 30% or so died by teenage. Most people died in their thirties or forties. Now around the world people live into their late seventies and eighties, or longer, and that is being pushed to later age in most countries. In 1980 there were 382 million people over 60. In 2017 it was 962 million. In 2050 it will be 2.1 billion. By 2030 there will be more people over 60 than under 10. So what has happened is that older people save more and spend less. As the economies of the world have prospered since WWII, people across the world are living longer and have more savings. Older people have a tendency to invest greater amounts in bonds the older they are. Money managers, and institutions, like pension funds, are gathering additional huge amounts of cash every year worldwide. They are required by regulation to invest a substantial sum into bonds. The mantra in money management is to put 40% into bonds with that amount increasing as you age. ( not a portfolio strategy that I agree with). The result of all of this, trillions have been invested into bonds over the past several years, and that amount has been increasing at a substantial rate as baby boomers around the world retire. As these trillions get invested into bonds, (estimated to be around an added $1 trillion per year by the IMF) especially government bonds, rates are driven lower. If we assume this trend will continue, and there will be no new world wars, and no new pestilence, the flood of cash into bonds will mean interest rates will remain low, and maybe ultra-low as we currently see in Europe and Japan where rates are negative. This is a long term trend. So if you accept this theory, then you need to make investment decisions that assume the ten year may not rise above 3.5% or so over the long term. That has huge implications for how people invest, how the governments, like the US, are able to handle increasing government deficits and bond issuance, and how the rates of return on real estate and other highly levered investments may fare over time. On the other hand, pension plans will not earn enough to meet liabilities, and that deficit will get much worse over time. That has major implications for taxes, as the local and state governments with huge teacher pension liabilities are unable to pay for that. Insurance companies will not be able to earn enough on their investments to meet their future liabilities. Capital will continue to flock to the US as a safe haven and where rates are still positive, and all of that depends on if you believe the above is a valid theory. I believe it may be correct.
The related issue is that the birth rate in much of the world is now flat to declining. That means there will not be enough money for supporting old people in 10-20 years. And it will just get worse as people live even longer and the birth rate continues to decline.
The companion theory is related to inflation. Core inflation has remained low over the past 15 years. There is now data to show that Amazon and Walmart, and all other online shopping, has materially reduced inflation by .5% or more, over time. With the ability of everyone around the world to access the internet, price has become easily transparent to everyone. Reviews help us pick the better products, or restaurants, or whatever. Stock commissions just went to zero, the cost of communication is at an all-time low due to new smart phones, and is going much lower due to 5G and the new satellites now circling the whole world. Result is, now it is harder to raise prices of anything. On the flip side, AI and other technology has made production far more efficient, and is lowering costs materially on all sorts of products. Worldwide logistics has made it easy, and low cost, to transport all types of products anywhere the customers may be. Huge container ships now move product at very low unit costs. Fracking has dramatically lowered the price of energy across the world, and that is not going to change as energy saving machines, power plants, buildings, and cars, become even more efficient. This trend is accelerating quickly. The combination of low energy costs, logistics efficiency and the internet for shopping, has meant inflation may not reach much above 2% in developed countries. There will always be situations like Argentina, Iran, and others where bad policies or geopolitics causes massive inflation, but those countries don't really matter when it comes to US or developed market inflation. Low inflation means low interest rates.
Moody's three election models all show Trump winning if there is strong Republican turnout. It seems likely the House will vote to impeach despite the Ukrainians and some of the US ambassadors saying there was no quid pro quo, and the focus of the ask of Ukraine was related mainly to the 2016 election. We will waste 3-4 months of Congress time while this nonsense plays out in the Senate.
You may have noticed that several billionaires have been saying they should pay more tax. To me that is just pandering as they know they are not going to pay more tax. I believe it is vastly better for these people to have the cash and then they use it to do philanthropic things in the private sector instead of giving it to the government to waste. They and the business round table are just trying to sound politically correct, but the reality is corporations are there to produce maximum profits for their owners- the shareholders. In the process of making profit it is better to treat you customers and workers well, and to have energy efficiency, and by doing those things, the corporation will likely be more successful, and will have a longer life. But maximizing profit is still the goal. By doing that they pay more taxes, higher wages which pays more taxes, and they pay more dividends-which generates even more taxes. So maximizing profit should always be the primary goal. Now we have Mark Benioff promoting his book and telling everyone that capitalism has to change to some airy fairy thing so inequality can be reduced. The current capitalist system is how all these guys got wealthy. Benioff is a total hypocrite and self-promoter. . FYI, he has a mansion in Hawaii that has a wall and if you get too close to the entry gate, a voice says you are getting to close. Isn't that egalitarian. In short, these billionaires need to shut up and stop with the I am a good guy routine.
Trump made a really bad decision on Syria. There is no going back from here. The damage will be with us for several more years. Just as he was getting ahead of the Dems impeachment, he does a dumb thing like that. Then he compounds it by sending out Mulvaney to make a damaging press conference. It seems Trump sometimes sticks his own foot in it just as he is getting the better of his rivals. It also handed the Dems another thing to beat him up with.
There is a new training course circulating at some universities. It's stated goal is to teach professors to grade less on merit and more on empathy for the "struggling student". Several schools are picking this up. It will be interesting to see what happens in the real world after graduation. We have to hope none of them gets admitted to med school based on those grades. Just imagine the damage they can then do. If you are not already outraged at what is going on in academia, this should get you motivated.
Travel: the Baltics are very nice, clean and safe, but if you go just allocate 1 ½ days to each. They are very clear they do not want to go back to Russian control, although there is a group of old people in Lithuania who still prefer Russia. Lithuania also has the best looking women in Europe. 95% of the young women have the same long blonde hair and are attractive. In Sweden you cannot spend cash if you try. Nobody takes it for anything. Stockholm is still nice, clean and safe, but do not take taxis unless they say Taxi Stockholm 150000. You will get badly ripped off otherwise.
If you want to know how Medicare for all works, in Lithuania if you need a non-emergency procedure you have two choices, wait 12-24 months, or bribe the doc to move you up on the wait list. That is how socialized healthcare works. In Sweden all things cost a lot because the taxes load down prices. They tried to tax waiter tips 35%, which is the minimum tax there. As soon as they started to try to collect the tax most waiters quit. They quickly repealed the tax. Lesson learned. You would think the Dems might look at Europe and learn some lessons.
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2)
Netanyahu, the media and the fate of Israeli democracy
By Caroline Glick
The ongoing criminal probes against Israel’s Prime Minister Benjamin Netanyhahu are reaching their climax. After conducting a marathon four-day pre-indictment hearing for Netanyahu earlier this month, Israel’s Attorney General Avichai Mandelblit reportedly intends to complete his review of the state prosecution’s cases and decide whether to indict Israel’s longest-serving prime minister by the end of next month. The main charges against Netanyahu relate to his associations with media owners.
For three years, illegal leaks from the investigations have dominated the news. The key question – indeed, just about the only question – that has been endlessly discussed is whether or not Mandelblit will end Netanyahu’s political career by indicting him on corruption charges.
The importance of this question is self-evident. On the one hand we have a democratically elected leader. On the other hand, we have unelected state prosecutors who wish to oust him from power by indicting him.
For nearly a year, Israeli politics have been in a state of chaos because of the criminal probes. The probes played a central role in the April Knesset elections and arguably were the primary reason that Netanyahu failed to form a coalition despite his electoral victory. Today the probes and Mandelblit’s deliberations are the primary reason that no one can form a government in the wake of last month’s repeat elections. If Israel holds a third election in the coming months, the probes will again be the central issue determining both the result and the ability of whoever wins to form a government. The center-left Blue and White party is using the probes as an excuse to refuse to join a coalition government with Netanyahu.
While the probes’ impact on Netanyahu’s political future is a key question, and on the composition of the next government is certainly a big deal, neither of these issues is the central matter than hangs in the balance as Mandelblit holds his deliberations.
If Israel’s Attorney General relies on these probes as a means to end Netanyahu’s career, he will do far more than overthrow a political leader. He will embrace a legal doctrine that rejects the very essence of democracy.
This truth has been largely ignored in both the popular and the legal discourse regarding the Netanyahu investigations. It was only sounded in a significant way during the final half hour of Netanyahu’s four-day, 15-hour a day hearing two weeks ago.
During the final half hour of Netanyahu’s hearing, Mandelblit approved his attorneys’ request to permit two senior American jurists – legendary litigator Nathan Lewin and Professor Avi Bell from University of San Diego and Bar Ilan University law schools address him. The two presented the main points raised in a brief they authored with their colleagues Prof. Alan Dershowitz and attorneys Richard Heideman and Joseph Tipograph. Netanyahu’s lawyers submitted their brief to Mandelblit the previous week.
Netanyahu’s lawyers asked that Mandelblit permit the jurists to address him orally at the outset of the premier’s hearing. But he refused. As the hearing’s final day drew to a close, Mandelblit changed his mind. Lewin and Bell were rushed into the hearing room just before it adjourned.
The American lawyers did not address the specific details of the probes against Netanyahu either in their oral or written arguments. Their brief focuses solely on the question at the heart of the two main investigations: Is it permissible to define the provision of positive news coverage to a politician by a news organization as a form of bribery?
Their answer is an unequivocal no. The American jurists warned that if Mandelblit chooses to bow to the position of his prosecutors and accepts that it is permissible to define the provision of positive coverage to a politician by a media organization as bribery, the Attorney General will bring about Israel’s legal isolation throughout the free world.
In their brief, the American legal scholars examined court judgments and legal studies from the United States, Britain, Australia and across Europe. The central issue in all of them was whether it is possible to limit – much less criminalize – relations between media agents and politicians. In all of the judgments and opinions, the answer was the same.
From Oslo to London to Sidney to Washington, the position of courts and senior jurists is that it is not permissible to criminalize, or even to set limits on such relations. This is true in cases where the relations are characterized by quid pro quos and in relations in which no give and take is present.
For instance, in 2010-2011, British Justice Sir Brian Leveson presided over a public inquiry into the practices of the British media in the wake of the News of the World hacking scandal. Among other things, Leveson investigated media mogul Rupert Murdoch’s ties to British prime ministers Margaret Thatcher and Tony Blair as well as to two Australian prime ministers.
The Leveson Report was published in 2012. It spans 2000 pages. As the American jurists noted, the Leveson Report documents instances in which political leaders in both countries agreed to grant regulatory breaks and adopt policies that advanced Murdoch’s interests in exchange for positive coverage during elections. The report, they note includes an “extensive legal analysis” of Murdoch’s relations with politicians.
And yet, the American jurists explained to Mandelblit, the report, “never suggests that Murdoch’s flattering and hostile coverage could be deemed a ‘bribe’” to the British leaders.
The same was the case in Australia.
“Nor have Australia’s prosecutors opened investigations of the relations” between Murdoch and Australian political leaders with whom Murdoch traded horses, the American lawyers wrote.
Bell, Lewin and their colleagues cautioned Mandelblit that the reason the idea of criminalizing ties between politicians and media owners has been rejected is because the action threatens the foundations of democratic societies.
“Prosecution of the Netanyahu case would signal to journalists and media executives that favorable or damaging publicity about a candidate may be investigated by the police and by prosecutors to determine whether the publicity was a quid exchanged for the quo of official action. If the police and prosecutors are empowered to probe the mixed motives of journalists and politicians, they can exercise arbitrary control over essential institutions of democracy,” they warned.
In Israel, and throughout the free world, all politicians and all media organs maintain ties with one another as a matter of course. If Mandelblit accepts State Prosecutor’s position and indicts Netanyahu, practically speaking, he will render all politicians and media outlets in Israel hostage to state prosecutors. At their pleasure, the prosecutors can criminalize their routine practice of politics and journalism. They can investigate anyone, at any time. They can destroy reputations, squeeze politicians and media outlets financially by saddling them with legal fees, and even send them to prison.
And at their pleasure, prosecutors can decide not to investigate politicians and media outlets, and so leave them free to attack their less fortunate colleagues as “criminal suspects,” and “alleged felons.”
Some observers in Israel and worldwide may respond to this state of affairs with a shrug of their shoulders. The prosecutors, after all, say they don’t intend to abuse the power they are seizing. The only thing that concerns them, the prosecutors insist, is protecting the public from politicians and media moguls who reach back room deals on the public’s back.
This attitude of faith in the good will and objectivity of prosecutors is riddled with both substantive and normative drawbacks. Substantively, in democratic societies, the public doesn’t need prosecutors to decide its interests. For that they have the ballot box. If politicians don’t advance their interests as the public defines them, the public elects other politicians to advance those interests.
At the core of the state prosecutors’ desire to arrogate the power to criminalize politics stands a rejection of the democratic principle that the public is the sovereign and the source of political power, and an ambition to replace the public as the sovereign.
The normative drawbacks of the prosecution’s claim to serve as a surrogate for the public have been evident throughout Netanyahu’s investigation. Prosecutors and police investigators have provided anti-Netanyahu reporters with a steady flow of prejudicial leaks from interrogation rooms and from the prosecutions’ internal deliberations.
As these leaks have been broadcast, the public has also been subjected to case after case in which other politicians have made deals with media owners that are substantively identical, and in some cases for more problematic than those Netanyahu is accused of having negotiated. But in all of these instances, police investigators and state prosecutors have stubbornly refused to open investigations.
One of the key claims that state prosecutors have raised throughout their investigations of Netanyahu has been the claim that media owners do not have a legal right to set editorial policy in their publications. In their view, if a media owner blocks the publication of articles that adversely affect their editorial line, the owner is wrongly constraining his writers’ freedom of expression.
The prosecution’s position, which has been rejected by Israeli labor courts, contradicts the right to own private property that stands at the heart of liberal democracy. Just as the owner of a shoe factory has the right to decide what sort of shoes his workers will make, so a media owner has the right to decide the editorial policy of his media outlet.
When Bell and Lewin noted this basic truth in the hearing, one of the prosecutors in the room was annoyed.
“That’s a capitalist position,” she said.
It is certainly legitimate to oppose free market economics. Many members of Israel’s elite look back with longing to the days when socialist and communist newspapers set the tone of the public discourse. But a person who longs for socialism in the name of equality is not more objective than someone who prefers capitalism in the name of freedom and liberty. The prosecutor who rejects the property rights of media owners is not more representative of the public’s interest than the politicians the public elects.
The Israeli establishment has long sought to destroy Netanyahu, the only political leader in Israeli history who was never a member of their club and never sought their approval. They haven’t been able to defeat him at the ballot box and now they have placed their hopes in the politicized state prosecution. If Mandelblit chooses to make their dream a reality, he will not merely get rid of Netanyahu. He will criminalize routine politics and so end Israeli democracy while replacing our political leaders with unelected prosecutors who have richly demonstrated their lack of objectivity and contempt for the public
2a)
Bennett: If Israeli justice system topples Netanyahu over cigars, it will be mortal blow to right-wing camp
Bennett came to the defense of Netanyahu on Facebook and warned of the dangers to the right-wing if the prime minister was driven from office.
By World Israel News Staff
Naftali Bennett, chairman of the New Right party, posted a lengthy warning on Facebook on Saturday night: “If the justice system succeeds in toppling Netanyahu because of cigars and articles on the Walla site, it will be a mortal blow to the entire national camp.”
Bennett referred to the corruption cases facing Prime Minister Benjamin Netanyahu in which he is accused of giving political favors in exchange for gifts, like cigars or favorable political coverage.
Bennett said, “A right-wing leader who will come after him will be castrated and frightened by the media and the justice system.”
Bennett, who is a rival of Netanyahu and has had run-ins with him in the past despite their both being in the nationalist camp, wrote:
“‘Why are you protecting Bibi?’ I’m asked this every day. My friends, I’m not only defending Netanyahu, but the whole national camp, and our State of Israel, against unfair legal and media persecution of Netanyahu, head of the right-wing camp and prime minister of Israel.”
“Netanyahu is not perfect. But he was a very good prime minister for the State of Israel and for its security,” he said.
Bennett didn’t hold back on criticism of Netanyahu in his post. He said Netanyahu criticized left-wing hegemony in Israel but did little to curb it.
He also noted that Netanyahu had voted in favor of the disengagement from the Gaza Strip, which then turned into a terrorist enclave. And that Netanyahu had declared in a 2009 speech at Bar-Ilan University that he was in favor of a Palestinian state.
But Bennett also credited Netanyahu for a strong economy and for maneuvering through eight years of a hostile American government under President Barack Obama.
Bennett also praised Netanyahu for blocking Iran in Syria and for delaying the Islamic Republic’s progress in developing nuclear weapons.
“In my estimation, he will be remembered in the chronicles of our people as a very good prime minister of Israel,” Bennett said.
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3)Dick:
Just a couple of thoughts.
1. Noonan is dead wrong today, and I say that with all humility. But there is at least one area where I think I have greater insight than she does. And that is with respect to what she calls the "foreign-policy professionals" who are sick of Trump and will testify that he is upsetting their shenanigans of the last 50 years. That is exactly what the American people are tired of. These are the self-same "foreign-policy professionals" who no longer understand the true nature of international law or, as our Constitution calls it, "the law of nations". (Remember the word "international" was not invented until 1789, the same year as the drafting of the Constitution, and then only used by Jeremy Bentham.) It has always been a mistake to use the term "international" as a modifier to the word "law," because it implies an international police force that can enforce it. Germany first agreed not to discriminate against Jews at the Congress of Berlin in 1878. Was that international law? If so, it sure seems to have been violated.
But our "foreign-policy professionals" -- who seem to be admired by Noonan today -- are working with the fiction that there is an "international law" because they want to be the ones to write the law, not Congress. They want to go to international conferences and write what they think the law should be. It does not matter to them that other countries, including China and Iran, will not abide by the "law" or will agree to cut carbon emissions or respect intellectual property rights or diplomats -- and then ignore the law they have agreed to. They subsume American policy interests to international trade treaties which have harmed domestic workers. They negotiate treaties like the Trans-Pacific Partnership which is the obverse of the national interest -- under the TPP, as negotiated by our "foreign-policy professionals," the US is subject to binding jurisdiction on labor and environmental matters, while the other Asian countries are only subject to negotiations and discussions on matters like intellectual property protection and competition law. Seems to me it should be the reverse. But it really seems to me that Congress, and not the "foreign-policy professionals" of Noonan's dreams, should be the ones making our labor laws, and our environmental laws, as well as our intellectual property laws and our competition laws.
We have now spent 50 years of these "foreign-policy professionals" writing their own laws for the American workers. At some point in time, the American people will vote against corruption -- they will have to decide next year whether Congress has Pelosied-itself with corruption or whether this Administration is more corrupt. A passing reference to Biden in a conversation on corruption is irrelevant in the scheme of things, and the American people know it. So the impeachment process -- whether it leads to impeachment or not -- will do nary a thing to stop Trump's re-election. And as corrupt as he seems to the mainstream media, the Democrats seem worse.
It is just so sad that Peggy Noonan lives in a world of "foreign-policy professionals" -- so much that she can't see them for the buffoons they are.
2. But the "foreign-policy professionals" only want to enforce the "international law" that supports their liberalism and licentiousness. So when Sweden legalized marijuana in 1965, and the re-crimininalized it in 1968 after it started destroying the underpinnings of Swedish society and policy, Sweden insisted that all countries of the world agree with them to ban marijuana and other psychotropic drugs. Marijuana is just too dangerous to be legalized for most people. See Alex Berenson's work, liberal, former pharmaceutical reporter for the NY Times, and convinced that marijuana is killing and leading to increasing violence.
Sweden led the world in the 1970 Convention on Psychotropic Drugs, to supplement the 1961 Narcotics Convention, both of which were strongly supported by Latin America -- Burma and Colombia could do nothing to limit drug supply unless the US was doing all it could to eliminate drug demand.
But these are all inconvenient facts for Noonan's "foreign-policy professionals" and the liberal elite in the Beltway -- including at the DoJ. Why should we enforce U.S. law against all these calm, nice, young potheads? They just seem, well, stoned.
Perhaps the answer to that question lies in the other part of your comments today -- because if we don't enforce our laws against pot in the short term, we should not be surprised when we can't find trainable workers in the long term. When our workforce is stoned, or their brains have become so addled they can't work, or when one-sixth of the users have become psychotic, and another large percentage have permanently lost IQ points as a result of use, we should not be surprised when we have ceased to become competitive for a generation or two. It took China multiple generation to come out from under the colonialism of the Opium Wars, and they will not take outside advice on Hong Kong today because they remember the 1841 treaties and how those drugs wrecked their society for generations.
But it is more comfortable for Noonan and her "foreign-policy professionals" to ignore the inconvenient truths of life.
All the best,
B--
Law Offices of R----- B-----PC
B--
Law Offices of R----- B-----PC
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