Why hearsay isn’t a problem for Congress in impeachment hearings
by ilene - November 20th, 2019 2:29 pm
Why hearsay isn't a problem for Congress in impeachment hearings
I heard him saying… ASDF_MEDIA/Shutterstock.com
Courtesy of James Steiner-Dillon, University of Dayton
Wednesday’s testimony by U.S. Ambassador to the European Union Gordon Sondland included the allegation that Sondland pushed Ukraine to investigate the Biden family in exchange for U.S. political support at the “express direction” of President Donald Trump.
Sondland’s version of events comes as others’ statements about the president’s involvement have been attacked by Republicans.
Trump’s defenders have suggested that the overall impeachment effort is illegitimate or somehow tainted because of Democrats’ reliance on what the GOP alleges is “hearsay.” As a professor of law, I know this claim is incorrect.
The legal concept of hearsay applies in trials and related proceedings in court. It doesn’t apply – and doesn’t make sense – in the congressional impeachment inquiry, nor in any potential impeachment trial in the Senate.
The complaint about hearsay is one example of how both political parties are trying to draw analogies between the impeachment process and a criminal trial – for political reasons, not legal ones.
What is hearsay?
There’s a book about all this. National Court Rules Committee
Legally speaking, what’s called the hearsay rule is one of several rules that govern what evidence can be introduced in a trial.
Essentially, the rule says that a witness cannot testify about something someone else said outside the courtroom as proof that the out-of-court statement was true. For example, if Deirdre is on trial for murdering Victor, Walter is not allowed to testify that “Esmerelda told me that she saw Deirdre shoot Victor” as proof that Deirdre actually shot Victor.
There are a few reasons not to allow this, but a significant one is that in a criminal trial, a defendant must be able to cross-examine the accusers. The only legal approach in this situation would be to call Esmerelda to testify herself about what, if anything, she saw Deirdre do. That would allow Deirdre’s attorney…
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Ukraine is taking a beating in the impeachment hearings – here’s what’s at stake
by ilene - November 20th, 2019 12:46 pm
Ukraine is taking a beating in the impeachment hearings – here's what's at stake
In Ukraine, President Zelenskiy has a new nickname – Monica. AP Photo/Efrem Lukatsky
Courtesy of Lena Surzhko-Harned, Pennsylvania State University
Is Ukraine a cesspool of corruption – or a helpless victim of Russian aggression?
Both of these simplistic narratives have been expressed during the ongoing impeachment hearings. As a political scientist who studies Ukrainian politics, I know both are damaging to Ukraine.
Since taking office in May 2019, Ukrainian President Volodymyr Zelenskiy has tried to invite potential foreign investors into the country. The narrative of Ukraine as corrupt will likely dampen these efforts to boost the economy.
The impression of Ukraine as overdependent on the U.S. will hurt it in its struggle with Russia by damaging the country’s standing as a sovereign nation. It plays into the hands of Russian President Vladimir Putin, who has long argued that Ukraine is “not a real country” and is controlled by Washington.
And while the Ukrainian government is opting to remain quiet and distance Zelenskiy from the impeachment hearings – a decision praised by many – the testimonies from Washington are also affecting Ukrainians’ opinion of the president they elected on April 21, 2019.
‘Loves your as-’
During his testimony in a closed-door hearing on Nov. 15, David Holmes, a political consultant in the U.S. embassy in Kyiv, recounted a telling phone conversation between Trump and Gordon Sondland, U.S. ambassador to the EU.
According to Holmes, in a July 26 call, Sondland told Trump that Zelenskiy will do anything that Trump wants him to do. That included opening an investigation into the energy company Burisma, where Joe Biden’s son Hunter served as a member of the advisory board from 2014 to 2019.
This willingness presumably was due to Zelenskiy’s admiration for Trump. According to Holmes, Sondland claimed that Zelenkiy “loves [Trump’s] as-”.
Indeed, in the July phone conversation between the two presidents, Zelenskiy praised Trump, saying he learned many lessons from Trump’s campaign.
The two presidents do have some things in common. Both…
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What the battle over control of PG&E means for US utility customers
by ilene - November 20th, 2019 12:05 pm
What the battle over control of PG&E means for US utility customers
PG&E is the largest U.S. utility. AP Photo/Jeff Chiu
Courtesy of Theodore J. Kury, University of Florida
There’s a battle raging over the ownership of PG&E Corp., one of the nation’s largest utilities, with cities, hedge fund managers and even customers all in the running.
Growing liabilities linked to its role in several deadly wildfires in California forced the company to file for bankruptcy in January. It hopes to soon reemerge with a stronger balance sheet. The state’s governor has threatened a government takeover if it doesn’t come up with a viable plan that not only keeps the company solvent but also improves safety from wildfire.
Meanwhile, a group of creditors have submitted their own plan to take control of the utility. And dozens of mayors and county leaders are behind an effort to turn PG&E into a customer-owned cooperative, driven by anger over how the company has managed the power grid – including the use of intentional blackouts in recent months to prevent wildfires. Another round of power cuts is likely to add pressure to the embattled utility.
PG&E’s troubles may be unique, but it isn’t the only U.S. utility facing challenges to a 20th-century business model that’s been buffeted by new technologies and changes in the ways that people consume electricity. Utilities in locations as diverse as Alaska, Florida, South Carolina and Texas are considering changing their ownership structure.
As the director of energy studies at the University of Florida’s Public Utility Research Center, I’ve had the opportunity to study the impacts of changes in utility ownership and what they mean for customers.
The possible paths of PG&E offer some clues.
Cleaning the balance sheet
The most likely scenario at this point is that PG&E – which serves some 16 million people from the forests of Northern California to the outskirts of Los Angeles – remains largely the same.
That’s what happened the last time the utility went through bankruptcy, in 2001, as a result of the…
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An economist’s guide to watching the Atlanta 2020 presidential debate: 3 essential reads
by ilene - November 20th, 2019 12:03 pm
An economist's guide to watching the Atlanta 2020 presidential debate: 3 essential reads
Media and others prepare the stage for the Democratic presidential debate in Atlanta. AP Photo/John Amis
Courtesy of Bryan Keogh, The Conversation and Nicole Zelniker, The Conversation
The top candidates vying to be the Democratic presidential nominee in 2020 will soon take the stage in Atlanta for their fifth televised debate.
With 10 people and only two hours to discuss dozens of complicated issues, viewers may have a hard time keeping up as candidates wade into the weeds of their pet policy proposals.
Fortunately, our scholars – who have written dozens of articles on the key issues of the 2020 Democratic primary campaign, as well as quite a few obscure ones – have you covered.
Here are three economic issues almost certain to come up in the Nov. 20 debate, along with a story from our archive that provides some context to help you evaluate what the candidates say.
Health care’s high price
Voters say health care is the top issue heading into 2020 – especially among Democrats. So it’s hardly a surprise that the topic has dominated the last four debates and will almost certainly be a hot topic tonight.
Several of the Democratic candidates, such as Senators Elizabeth Warren and Bernie Sanders, are proposing wholesale changes to the U.S. system of health care. How to pay for “Medicare for All” – without raising taxes on the middle class – has been a sticking point for the more ambitious plans.
Gerald Friedman, an economist at University of Massachusetts Amherst, has crunched the numbers on several different versions of a single-payer health care system and estimates a full-scale plan could cost as much as US$40 trillion over a decade.
But there’s an easier and cheaper way to get to Medicare for all, he argues: Simply expand the existing Medicare program to everyone.
Medicare’s “limited scope, skimpy benefits and cost-sharing keep costs low,” he writes, yet “it provides meaningful protection against the potentially crippling cost of accident or illness.”
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“It’s Not Sustainable:” PG&E Rolling Blackouts To Hit 181,000 Customers Wednesday
by Zero Hedge - November 20th, 2019 11:05 am
Courtesy of ZeroHedge
Seriously, every time the wind blows in California, it transforms into a third world country with rolling blackouts. And if you've ever been to let's say South America where this happens frequently, it's not a pleasant thing to experience.
So Californians will get another taste of what it's like to live in Venezuela or Argentina on Wednesday. Nearly 181,00 customers in Northern California on early Wednesday will see their power cutoff so that Pacific Gas and Electric Company (PG&E) can avoid sparking another deadly wildfire.
The National Weather Service (NWS) posted "red flag warnings" for parts of the Bay Area, Sacramento, Paradise, and even up to Redding.
Northly winds are expected to be in the 40-55 mph range, with some gusts over 55 mph, which could damage electric lines and spark wildfires, one of the main reasons why PG&E wants to cut power.
PG&E published a community resource map of certain facilities that residents can use for WiFi, bathrooms, and food during the rolling blackout.
PG&E has conducted several rolling blackouts since Sept., which at one point left millions of residents in the dark for days while the electric company shutdown large transmission lines to avoid electrical fires during a windstorm.
The bankrupted utility company has been extra careful about preventing blazes during windstorms since deadly fires in Northern California in 2017 and 2018 are expected to cost $30 billion.
"We all know it's not sustainable — it's not where we want to be," Andy Vesey, PG&E's chief of utility operations, said Tuesday. But at this point in time, it's the situation that we are faced with."
— PG&E (@PGE4Me) November 20, 2019
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Deutsche Bank To Replace 18,000 Workers With Robots
by Zero Hedge - November 20th, 2019 8:11 am
Courtesy of Mike Shedlock via MishTalk
Deutsche Bank plans 18,000 jobs cuts in robot strategy called "Operations 4.0".
Operations 4.0 Underway
Deutsche Bank says Operations 4.0 is already underway.
The plan is to Replace 18,000 Jobs With Robots.
Mark Matthews, head of operations for Deutsche's corporate and investment bank, told Financial News that machine learning algorithms "massively increased productivity" and "redistribute capacity."
The London-based news organization said that Deutsche is pushing to "automate large parts of its back-office" via a new strategy called "Operations 4.0," as part of its $6.6 billion savings initiative over the next three years.
Matthews told FN that the machine learning tools helped to save "680,000 hours of manual work" and that it "so far used bots to process 5 million transactions in its corporate bank and perform 3.4 million checks within its investment bank."
In what insiders called a surprising move, the bank this summer said it will keep the bulk of its equity research department despite eliminating the bulk of its stocks sales and trading division.
Why stop at 18,000? Please consider my 8 step proposal to get rid of everybody.
Just Fire Everybody
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Who needs proprietary equity traders? Fire them all. Machines do all the trading anyway.
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Who needs stock analysts? Let computers determine the "Strong Buys".
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Who needs credit analysts? Computers already do the scoring.
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Derivatives? What a mess. Unwind them all and stay away. Fire everyone involved.
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Real Estate Appraisals? That's what Zillow's for.
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Credit cards processing? Outsource 100% of it.
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Statement processing? Outsource that too.
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Loans? Let computers decide which loans to make. Then keep none of them. Instead, securitize 100% of them.
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These Are the Banks that Own the New York Fed and Its Money Button
by ilene - November 20th, 2019 8:04 am
Courtesy of Pam Martens
By Pam Martens and Russ Martens: November 20, 2019 ~
The New York Fed has now pumped out upwards of $3 trillion in a period of 63 days to unnamed trading houses on Wall Street to ease a liquidity crisis that has yet to be credibly explained. In addition, it has launched a new asset purchase program, buying up $60 billion each month in U.S. Treasury bills. Based on the continuing escalation of its plans, it appears to be testing the limits of what the public will tolerate. We thought it was time to answer the question: who exactly owns the New York Fed and its magical money spigot that can pump trillions of dollars into Wall Street at the press of a button.
The largest shareowners of the New York Fed are the following five Wall Street banks: JPMorgan Chase, Citigroup, Goldman Sachs, Morgan Stanley, and Bank of New York Mellon. Those five banks represent two-thirds of the eight Global Systemically Important Banks (G-SIBs) in the United States. The other three G-SIBs are Bank of America, a shareowner in the Richmond Fed; Wells Fargo, a shareowner of the San Francisco Fed; and State Street, a shareowner in the Boston Fed.
G-SIBs have the ability to inflict systemic contagion on the entire global banking system (as happened in 2008) and thus must be monitored closely for financial stability. JPMorgan Chase, Citigroup, Goldman Sachs, and Morgan Stanley are also four of the five largest holders of high-risk derivatives. (Bank of America is the fifth.)
The five mega banks that are the major shareowners of the New York Fed are also supervised by the New York Fed, despite participating in the election of two-thirds of its Board of Directors. James Gorman, Chairman and CEO of Morgan Stanley, currently sits on the New York Fed Board. Jamie Dimon, Chairman and CEO of JPMorgan Chase, previously served two three-year terms on the Board.
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Billionaires Are Licking Their Chops Over Distressed U.S. Oil And Gas Assets
by Zero Hedge - November 19th, 2019 7:38 pm
Courtesy of ZeroHedge
Like the vultures Elizabeth Warren claims they are, billionaires are now circling over the soon-to-be dead corpses of companies in the U.S. oil and gas patch, as they look to pick up assets on the cheap.
This comes at the same time that the volatility (read: decimation) of the oil and gas industry has scared off many other investors, according to Bloomberg.
Names like Sam Zell, Tom Barrack Jr., and Jerry Jones are all being tossed around as investors who are looking at distressed assets. Zell has teamed up with Barrack Jr. to look at oil assets in California, Colorado and Texas. Jones' company, Comstock Resources, is looking to acquire natural gas assets from Chesapeake Energy.
Companies are eager to sell at cheap prices to try and get ahead of an upcoming credit crunch.
Zell said on Bloomberg yesterday: “I compared it recently to the real estate industry in the early 1990s, where you had empty buildings all over the place, and nobody had cash to play. That’s very much what we’re seeing today."
The U.S. has become the world's largest oil producer due to the shale revolution, but the investors behind that drive have little to show for their efforts. Many companies have plowed through their cash while providing poor returns, as independent oil and gas drillers are down more than 40% since 2014.
Easy money enabled the boom, and we have noted here on Zero Hedge over the last several years how poor resource allocation, crowded wells and overly optimistic estimates have caused a turn for the worse for U.S. oil and gas investors. Now, its time to face the consequences.
With oil prices still low, the number of active drilling rigs in the U.S. has declined and some of the biggest players in the industry have lowered their growth plans.
Chesapeake, for instance, recently warned it may not be able to continue as a "going concern" if low oil prices persist.
This is where names like Zell and Jones come in.
“What we’re seeing are situations where companies are taking steps in anticipation of problems rather than responding to problems,” Zell said.
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Venezuela Is Using Invisible Oil Tankers To Skirt Sanctions
by Zero Hedge - November 19th, 2019 7:30 pm
Courtesy of Irina Slav via OilPrice.com
U.S. sanctions on Venezuela have been squeezing the life out of its economy in an attempt to remove the government of Nicolas Maduro from power, but so far those sanctions haven’t been entirely successful. The reason: Venezuela is still exporting oil.
So far in November, according to OilX data, Venezuela has exported an average of 530,000 bpd, up from 523,000 bpd in October.
Bloomberg reports, citing shipping data, that Venezuela had loaded almost 11 million barrels of crude in just the first 11 days of November, which is more than twice as much as it did in the same period last month. Most of the oil seems to have gone to India and China, with half of the vessels transporting it turning their transponders off to avoid detection.
This is the now-standard tactic used by Iran to export its oil amid U.S. sanctions, too. Turning off the geolocation device is what Iranian tankers do when they leave port—or in the open sea—and they only turn them off when they approach their port of destination. This and ship-to-ship transfers have helped Tehran continue taking in oil revenues despite the sanctions.
These same tactics are being used by Venezuela now as well.
Venezuela’s crude oil production in September averaged just 644,000 bpd, according to OPEC’s latest Monthly Oil Market Report. That’s down from 727,000 bpd in August and an average 975,000 bpd over the first half of the year.
In September 2018, Venezuela was pumping more than twice the October level, at 1.354 million bpd.
This goes to show that sanctions are working to curb oil production, but they have not been able to stifle Venezuela’s exports to zero. The country has oil-for-cash agreements with China and Russia, and although it struggles to repay this debt with its limited amount of oil, it is paying down some of it – apparently without violating any sanctions.
One vessel Bloomberg’s data detected recently was the Dragon – a Liberian-flagged Very Large Crude Carrier, whose last GPS signal came off the French coast. The tanker, however, turned out to be offshore Venezuela where it loaded 2 million barrels of local crude for Russia’s Rosneft, one of Caracas’s biggest creditors.
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Tesla’s business strategy is not chaotic – it’s brilliant
by ilene - November 19th, 2019 5:44 pm
Tesla's business strategy is not chaotic – it's brilliant
Courtesy of Nathan Furr, INSEAD
Few companies have attracted as much praise, derision, scepticism and enthusiasm as Telsa Motors and its founder Elon Musk. Having interviewed Elon Musk and the Tesla leadership as part of my research, one of the questions I’m asked most frequently is: how can you make sense of Tesla’s wild strategies? The latest example is the move to create a “Gigafactory” for car batteries just outside Berlin.
Tesla is building a new architecture. Pxhere
Part of the challenge in understanding Tesla’s strategy are the commentators. These range from short-selling to star worship. Many ask the wrong questions, such as why Tesla isn’t making any money – a question appropriate for a mature business, but not a growth one. While all businesses must be sustainable in the long run, Tesla is like most rapid growth companies that eat up more cash flow than they produce while in the early growth phase.
But the biggest part of the challenge may simply be understanding Tesla’s strategy. Why would a new company, already taking on the Herculean task of introducing an entirely new type of car to the market, also take on the incredible risk of building some of the world’s largest battery factories? Or for that matter, a dealership and repair network? Or a charging network? Or, even crazier, a solar power business?
On the surface, it makes no sense and there is no doubt that it introduces more risk to the company, increasing its chances of failure. But when viewed through the lens of the decades of research on technology strategy, Tesla’s approach takes on a different light.
Building a new architecture
The big challenge to understanding Tesla’s strategy is that most of us only look at it from one level of analysis. Namely, when we see Tesla, we see a company that produces cars. But when I teach executives how to invest in future technology, I encourage them to think at multiple levels of the technology stack: not just products, but also components and systems. So let’s take a closer look at Tesla.
At the level of the product, although a…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site