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2018-12-10 08:20 by Karl Denninger
in Editorial , 146 references
[Comments enabled]  

The amazing thing is that he doesn't even realize he did so.

Federal criminal prosecution is not beanbag. The courts have ruled many times that prosecutors, FBI agents and police may lie, cheat, threaten, intimidate, coerce and deceive to extract cooperation and obtain evidence from witnesses. This is the dark side of the criminal justice system. It requires a strong stomach. It can be used against even the president.

And yet here is a man who claims to be a Judge, and who has not in fact set aside from that, discredited it, called for it to be reformed, those who do such things punished or in any way sanctioned.

In fact by his continued use of the title "Judge" he affirms, confirms and approves of such actions.

Lie, cheat, threaten, deceive, intimidate and coerce?

That is the legitimate toolbox to be employed by federal criminal prosecution?

The premise of civil society -- that is, the principle that if I think you've done something wrong to me that I will take such a complaint to the courts or police -- rests on the principle of fair play and Lady Justice with her blindfold and a balance beam on which the evidence is weighed.  Lose that belief within a society and someone with a beef has little reason to not take care of business themself -- including just shooting you immediately.

The gang-banger doesn't shoot his rival on a street corner over a drug territory dispute because he's an ass.  He does it because he can't take the other guy to court and there is no civil, reasonable way to resolve his differences in which everyone agrees on the rules of the contest and that they expect the outcome to be fair.

Courts can rule however they want.  But as soon as they, and the commentators cheering them on in the media start approving of, using and allowing lying, cheating, threats, deception and intimidation there is no set of scales being held by a blind woman any more.

"Lady Justice" has been replaced by a gangster with a Tommy Gun.

Faced with that do you let him stick it up your nose or do you shoot him before he knows you're there?  Remember -- he's got a machine gun and a hundred rounds in that drum.  What do you got?

Is this any way to run a nation or its justice system?  Obviously not.

Is the outcome of this sort of thuggery apparent, given enough time?  You bet it is.

Indeed, it is exactly this sort of tactic that led to Concord -- and all that came after it.

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2018-12-09 11:16 by Karl Denninger
in Editorial , 226 references
[Comments enabled]  

So now we have the "sentencing memo."

If you ever get busted for something "real" the prosecutor files this before sentence is handed up by the judge.  Said judge doesn't have to pay a lot of attention to it as that memo has no legally-binding consequence, but they always do -- after all, the judge heard the trial and the verdict, but he didn't have any of the backstory.  That memo gives it to him and it's very, very rare for it to be ignored.

What that memo makes clear is what we've all known as Americans for decades, but nobody cares: Everyone in power, especially in DC, breaks the law on a daily basis.  They don't break it a little, they break it a lot and in felony forms.

Is anyone surprised by any of this?  I'm not even a little surprised.  Hell, read this article for some context -- it's the truth, and you know it:

Welcome to America General Hospital! Seems you have an oozing head injury there. Let’s check your insurance. Okay, quick “heads up” — ha! — that your plan may not cover everything today. What’s that? You want a reasonable price quote, upfront, for our services? Sorry, let me explain a hospital to you: we give you medical care, then we charge whatever the hell we want for it.

If you don’t like that, go **** yourself and die.

Honestly, there’s no telling what you’ll pay today. Maybe $700. Maybe $70,000. It’s a fun surprise! Maybe you’ll go to the ER for five minutes, get no treatment, then we’ll charge you $5,000 for an ice pack and a bandage. Then your insurance company will be like, “This is nuts. We’re not paying this.” Who knows how hard you’ll get screwed? You will, in three months.

Fun story: This one time we charged two parents $18,000 for some baby formula. LOL! We pull that **** all the time. Don’t like it? Don’t bring a baby, *******.

May I note that all of this sort of crap, which goes on literally every single day thousands of times, is a felony?  Yes, it's a felony.  I've pointed it out including direct citation to 15 USC Chapter 1, which says in the header of the statute that it's felony.  How many indictments have been handed up to Hospital Administrators and doctors over the last 30 years of this crap?


So why wouldn't Cohen do this same sort of crap?  He's not going to jail -- right?

Oh wait -- this time he did.

Well, that what he gets for being Trump's attorney, not Hillary's, and for being a lawyer for the most-hated politician by a highly-politicized and flat-out illegitimate Stasi-style "Just-Us" department in history.  Ok, ok, not "in history" -- just since Hoover.

Then there's the fact (now known and in the public) that Hillary's campaign paid for the Steele dossier via a circuitous route with Fusion GPS.  That was not disclosed via her FEC filings and it was certainly intended to influence an election, which means that if a felony was committed by the Trump campaign in this regard the same law was violated by Hillary.  Where's the indictment?

Oh by the way, Obama did the same sort of crap during both of his Presidential runs.  No, it wasn't hush money to strippers.  It was, however, all sorts of other nefarious political spending to influence an election, all of which is illegal and which, I remind you, he got caught doing.  We know this for a fact because the FEC came after him and a huge fine was levied, which was paid, meaning he admitted it.  Roughly $2 million dollars worth in Obama's case.

Did he get indicted, or did anyone else get indicted?  No.

Then there's Clinton.  Remember the Chinese bundlers?  Very illegal.  Dateline 1996.  Well north of $100 million was involved, which makes Cohen look like a piker.  There was an arrest there -- of a Chinese national.  There was never anyone in the actual Clinton Administration, including of course the beneficiary of same, one Bill Clinton, who was indicted or imprisoned.

Yet Cohen is going to the big house.  For sure.

I was Treasurer for a US House run.  I insisted that every "I" be dotted and "T" crossed.  When I took over from the previous individual I filed restatements of the previous reports, as I wasn't comfortable with them.  I didn't find anything that had even a whiff of criminality with the previous person's work, but I did think it was sloppy enough that I wasn't happy with it and since in accounting all that you do carries forward from what was done previously I re-filed that which I wasn't happy with back to "time zero."  There was not one shave of a single law or rule that I permitted while holding that checkbook.  That was the deal I made when I took the job and that was what I did.  That campaign was allowed to be closed in record time, from what I've been told of others who have waited months or years beyond when we were permitted to close it out.  Yes, it was a losing bid and for a minority party.  So what?  I did it the right way and did not allow any cheating or "loosey-goosey" nonsense, not a single dime of it, because it's the right thing to do.  It had nothing to do with whether I thought I could get away with it; I simply didn't see the point in cheating or hiding anything and there certainly wasn't any direct benefit to me to be had by doing so.

But more to the point why wouldn't Cohen cheat while knowing full-well it's illegal?  After all Clinton did it (we know this factually), Bush probably did it, and Obama certainly did it (we know that factually too, since he paid the fine.)  Why wouldn't Cohen do it, especially considering that it appears there was direct benefit to him?

He thought he'd get away with it since all of the last three Presidents almost certainly did and two of them absolutely not only did it but got away with it.

Your local hospital does it every single ****ing day.

"Your" doctor does it every single day.

So does "your" local pharmacy.  All of them.

Now watch the heads explode.  

The major takeaway from the 40-page sentencing memorandum filed by federal prosecutors Friday for Michael Cohen, President Trump’s former personal attorney, is this: The president is very likely to be indicted on a charge of violating federal campaign finance laws.

Of course he is.

Well, maybe.

But what's a lot more certain is that the Democrats now are going to impeach him.  They pretty much have to, and this is the entire point of the "investigation."  But fraud and felony is a weapon to be used politically, not a matter of criminal sanction for something that nearly nobody does, and when you do it you get caught.

In fact it is the currency of the realm when it comes to both business and politics and we, the people are the ones who made it that way by sitting on our collective asses and, in many cases, cheering it on.

Witness Amazon and their "sales tax" schemes.  I remind you that intentional evasion of taxes (as opposed to "avoidance") is a crime.  Amazon set up "subsidiaries" in states to run their warehouses and then did not collect tax, claiming that these were "independent firms" and thus they had no Nexus. When challenged on this, eventually, they folded for items "sold and fulfilled by" Amazon.  There was not one time Bezos stuck his middle finger in the air at a state and said "go ahead and indict me, *******, you're wrong and I'm right and if you have the balls to take it to court I'll prove it."  May I add for context that I came up with a very similar idea in the 1990s while running my Internet company when we first expanded to Wisconsin, ran it past my outside corporate counsel and, well, let's just say I got the slant-eye in response.

Now maybe Amazon folded instead of fighting because it was a simple "business decision."  That's right, you're free to believe Amazon willingly collects and forks up 5, 6, 8, 10% of every sale of a product they sell and fulfill while at the same time turning those products "not sold and fulfilled by them", but by third parties, into the majority of what they handle and on which they don't collect tax, much of which is shipped in direct from China in e-Packets!

You're also free to demonstrate that you're so ****ing stupid you'd stick your mouth on your car's exhaust pipe and expect to enjoy the experience.

Take the "farmer", like the one in Iowa that employed the illegal who killed Molly.  He intentionally did not run E-Verify on his "employees."  He has admitted this; that instead of E-Verify he used a tool the Social Security administration provides that checks to see if the number provided was issued and is active.  This tool is specifically stated by the Social Security Administration as not being suitable for employment verification; it is intended solely to check for clerical errors by employers.  If he had run E-Verify instead he would have known that guy was an illegal invader.  That didn't happen, and he didn't get indicted even though at this point one of those "fine, upstanding citizens" stands accused of murder.  Breaking the law is a random, infrequent thing eh?  Suuuure it is.

Why would you run a business in this environment unless you're willing to be a crook and believe you can get away with it?  If you don't cheat you'll go out of business because everyone else does and their operation is 5, 6, 8, 10 or 15% less expensive to run than yours is.  Run a dairy farm and refuse to hire anyone who can't pass E-Verify and give the slant eye to everyone if they show up with what are facially-implausible credentials?  The farmer down the street doesn't care, his milk is 20 cents/gallon less expensive to produce than yours and pretty soon he owns all your land and cows because you go out of business due to him selling below your cost.

You, America, have sat on your ass and even cheered it on.  Half the nation did it with the Clintons and still does today, claiming Hillary was "robbed" of the Presidency despite the Clinton-era finance scam having the name "Hillblazers."  You love that smiley-face box that shows up on your doorstep too.

Worse, you cheer it on even when you get assraped within an inch of your life when you have a heart attack, stroke or have a gushing scalp wound at 3:00 AM.  Heh, it's only $25,000 for 10 stitches, right?  $2,500 a crack?  Who cares -- some insurance company will pay, or Medicaid will.


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2018-12-09 09:45 by Karl Denninger
in Editorial , 146 references
[Comments enabled]  

Here it comes folks....

China could 'take hostages' and is almost certain to retaliate against the United States, experts say, after the stunning arrest of a top Chinese tech executive for allegedly trying to skirt sanctions on Iran.

Huawei Technologies' chief financial officer Meng Wanzhou was arrested Saturday in Canada and faces extradition to the U.S. Meng was taken into custody on behalf of the U.S. while she was transferring flights in Vancouver, the tech company said.

So basically the threat is this: Either allow companies in China to break US sanctions "at-will" or shut down trade with these **********s entirely, including all tech trade.

That's the deal, when you read this for context.

Do you like that deal?  I don't.

But this is what you get when you allow a nation to play lawless with intellectual property and in virtually every other aspect of behavior for decades and get away with it.

They become emboldened and figure there's no price to pay.  Then, when you try to exact a price through legal process you get threats -- such as threats to detain or arrest people for non-existent reasons.

Let's not forget that just a short while ago there was another high-level Chinese executive who was arrested for allegedly raping a woman in our nation.  He was let out of jail and immediately fled the country.  Will he ever be back if formally charged and forced to face the music or does being a Chinese executive give you license to rape?

Still like these trade deals we've struck?  Still like buying Apple products do you?  Proudly carrying that thousand-dollar status symbol you whip out to show everyone how rich you are, eh?

What if what you're really whipping out is support for a rapist and a nation that violates sanctions against a murderous religious-based regime that would be perfectly happy to use that technology to nuke you to ash?

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2018-12-08 07:00 by Karl Denninger
in Monetary , 194 references
[Comments enabled]  

The latest line of garbage out of the central bank wonks is that the "neutral" rate of interest is "declining."

“The global decline in the neutral rate of interest over the past quarter century poses significant challenges to maintaining well-anchored inflation expectations in a standard inflation-targeting regime,” Mr. Williams said in the text of a speech to be delivered at a conference at his bank. In this environment, the problem central banks will need to solve “is the risk of inflation that is persistently too low, rather than too high.”

Mr. Williams should be indicted for this drivel as it is a knowing lie and a malicious one at that.

Last year's government deficit on a cash basis ("debt to the penny") was approximately 6.2%.  In other words if you simply held cash on a monetary basis you lost 6.2% because that's how much more money the federal government injected into the system by selling new (not-before issued rolled-over) Treasuries.

The "neutral" rate therefore was at least 6.2% plus any other unbacked credit emitted by anyone with a government backstop (student loans anyone?)

Second, as Tall Paul (Volcker) recently pointed out there is no legal justification for any inflation "target" above zero by the Fed, since the Federal Reserve's charter says stable prices.  It doesn't say "prices rising at 2% a year", it says stable.  Something is stable if it does not change, natch.

Who calls this out?  Nobody in the media, banking industry or politicians.

Gee, I wonder why?

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2018-12-07 08:51 by Karl Denninger
in Employment , 186 references
[Comments enabled]  


Total nonfarm payroll employment increased by 155,000 in November, and the unemployment rate remained unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, and in transportation and warehousing.

Well..... how are the internals of the household survey?


Ordinary, to be blunt.  The household survey says we added 63,000 jobs, not 155,000.  So much for "seasonal adjustment."

However, this isn't especially bad; November is usually a somewhat weak month.  So to get a mid double-digit number is ordinary and expected.

More interesting is that you had over 300,000 people leave the labor force this last month and annualized it's better than a half-million on a 12-month (y/o/y) basis.


Additionally jobs were flat across educational achievement, with no category putting up more than one tick in either direction.  One month does not make a trend but two is a warning and three is a problem.

Something else to consider - transportation employment, ex warehousing, was flat-to-down across the board.  That's an interesting anecdote that doesn't yet turn into an economic marker, but like the educational achievement change it bears watching in coming months.

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