Saturday, October 1, 2016

Ryder Cup Update II

Well, as we said in the last post, momentum can swing quickly in the Ryder Cup. And in this afternoon's session, the US virtually locked up their first Ryder Cup victory on home soil since 2008 with a 3-1 victory. The US was led by Patrick Reed and J.B. Holmes who were both birdie machines today.

The Euro team of Rory McIlroy and Thomas Pieters got the Euros to even for the match with a 3 and 1 victory where they led all the way. McIlroy played like a man possessed all day and is clearly the fiery leader of the European team. Phil Mickelson and Matt Kuchar got ahead of Sergio Garcia and Martin Kaymer early and the Euros could never get back to all square as the Americans won 2 and 1 with Mickelson sinking the decisive putt on 17. Patrick Reed was just on fire as he rattled off 5 birdies in a row to win four consecutive holes and take command on the front nine.  But Justin Rose and Henrik Stenson hung in there and managed to cut their deficit to 1 down after 13. But Reed just shut the door, winning the next two holes and closing out the Euros 2 and 1. Jordan Spieth was pretty much a non-factor all match, which should be of some concern to the Americans. J.B. Holmes had seven birdies while his partner Ryan Moore just watched. But Danny Willett and Lee Westwood, who hit two long putts, and managed to hang with them and were 1 up after 10. The teams were all square going to 17 and it looked grim for the US when Holmes put it in the water. But Moore hit the ball to the back of the green. Westwood and Willett both just missed the green and had scruffy lies. Westwood left his chip about 3 feet short and Willett's was even shorter. Moore hit his putt stiff, so it was up to Willett and or Westwood to make the par putt for the halve. Willett missed and Westwood pushed another short putt to give the US a 1 up lead going to 18. Westwood looked like he had atoned for his poor putting when he put his second shot within three feet on 18. The US got up and down for their par and all Westwood had to do was knock in the 3-footer for an important half point for Europe. But, incredibly, he pushed it again and the US got the full point. Westwood, a Ryder Cup veteran, had sat Friday afternoon and Saturday morning because of his poor play on Friday morning. And this afternoon he missed four putts of about 3 feet or less that would have given his team a win or half on the hole. He was actually better from long range.

The 2 point win this afternoon give the US a 3 point lead, 9-1/2 to 6-1/2, going into singles play tomorrow, where their depth of experience should provide an advantage. But the European rookies, especially Thomas Pieters, Danny Willett, Matt Fitzpatrick, and even Rafa Cabrera-Bello, look like they were coping reasonably well with the Ryder Cup pressure. We'll see how they hold up tomorrow.

Ryder Cup Update I

The 41st Ryder Cup, the quintessential team golf event that pits the US against Europe, is being held this weekend at Hazeltine Golf Club just outside Minneapolis. The US has lost 8 out of the last 10 Ryder Cups, creating such distress that the USGA actually set up a committee on how to improve the US Ryder Cup performance. The pressure for a US win this year, especially as it's on home soil, is tremendous. And the US has its greatest advantage in years - not only because the US can set up the course with rough that is not penal and provides forgiveness to its erratic but long drivers but also because half of the European team, six players in all, are playing in their first Ryder Cup.

The Americans, with incredible crowd backing got off to a roaring start on Friday morning in the foursomes as they blitzed the Europeans with a barrage of birdies. Phil Mickelson and Ricky Fowler roared back from 2 down with 4 to play to win their match 1 up. At the end of the session, the US had won all four points, the first time that had happened since 1975. It looked like this Ryder Cup would be a rout.

Friday afternoon in four-ball, however, the tables turned. The Euros kept their composure and started to make some putts. In what turned out to be an afternoon of one-sided affairs, the Europeans walked away with 3 out of the four points, getting them back in the match. The clutch play of the Europeans in the afternoon should not be overlooked as it was possible for them almost be out of the event on Friday. It was an interesting day as virtually every match was a blowout - only one match made it to the 17th hole.

This morning looked to be following that blowout pattern as both Europe and the US took considerable leads in two matches each. Mickelson and Fowler rallied from 3 down with two wins but Rory McIlroy and rookie Thomas Pieters held their own and finished the match off with wins on 14, 15, and 16. Justin Rose and Chris Wood built a 3 up lead through 13 but Zach Johnson and Jimmy Walker clawed back two wins on 14 and 16 but were held off for a 1 down loss for the Americans. Brandt Snedeker and Brooks Koepka reeled off 3 wins on 13, 15, and 16 to break open a tie match and win the point for the Americans. That twosome showed how driving accuracy does not count for much on this course as they only hit three fairways all day in a 3 and 2 win. That left the final match of the morning to be decided with Americans Jordan Spieth and Patrick Reed facing Rafa Cabrera-Bello and Sergio Garcia. Patrick Reed thrives in the Ryder Cup pressure and Spieth is one of the great mid-distance putters, which is what you need in this competition. And they just rolled over the Europeans going 4 up after 11. It looked like it would be virtually all over on 12 but Cabrera-Bello sank a decent-length putt simply to halve the whole. The crowd, sensing a big win, started to get all over Sergio, with chants about his "no majors". It wasn't a good idea. The Spanish pair started to make some putts and the US team started to miss theirs by inches. A win on 13 got the Europeans some momentum and they went on to win 15, 16, and 17 to square the match. With both teams making par on 18, the match was halved.

That incredible comeback by the Spaniards allowed the Euros to win the session 2-1/2 to 1-1/2 and pick up another point. For the Americans, it was a bitter disappointment and it means they have virtually squandered that 4 point advantage from Friday. They still lead by a point, 6-1/2 to 5-1/2, but the momentum is all on Europe's side as we head in to Saturday afternoon. But, in this competition, momentum can turn on a dime.

Natural Weekends - Head In The Clouds

Friday, September 30, 2016

Besides Farenthold And Newsweek, Where Is The Rest Of The Media

Let's just recap the last two day's revelations about Donald Trump. He apparently violated the embargo against Cuba; his foundation does not have the requisite licenses to solicit donations of $25,000 or more; a 2001 fraud investigation by the toothless SEC found that Trump had mislead investors in a news release that made it seem as though Trump Hotels had met earnings expectations when it clearly had not. And all that is in just two the last two days.

David Farenthold at the Washington Post has been incredibly relentless with his reporting of the self-dealing and violations at the Trump Foundation. And Newsweek has had done some good reporting, such as the Cuba story. All this stuff was out there waiting to be uncovered by any diligent reporter. But where has the rest of the media been. The pathetic New York Times has, I think, spent more print on uncovering nothing untoward about the Clinton Foundation than it has on any of the Trump Foundations scandals. As Trump would say - SAD!

GDP Estimates Do Not Indicate Overheated Economy

Earlier this week, the third revision to second-quarter GDP came in at 1.4%, up from the prior estimate of 1.1%. At least that is headed into the right direction. The Atlanta Fed forecast for third-quarter was reduced from 2.9% to 2.8%, which is certainly good but hardly off the charts. The NY Fed forecast for third-quarter GDP is substantially less, currently at 2.3%. And their estimate for the fourth-quarter is a mere 1.2%.  That is especially disappointing as replenishing depleted inventories was supposed to be driving substantially better growth for the second half of this year. These are hardly the number of a overheating economy that needs to be reined in with an interest rate hike and, if these forecasts hold true, it will be interesting to see how the Fed will respond.

Trump Violated Embargo Against Cuba

It is hard to keep up with the ongoing scandals that keep emerging on a daily or even hourly basis for the Trump campaign. And that's not even including Trump's misogynist attacks on former Miss Universe Alicia Machado. Yesterday, Newsweek has reported that Trump violated the embargo against Cuba back in 1998. According to the article by Kurt Eichenwald, "Documents show that the Trump company spent a minimum of $68,000 for its 1998 foray into Cuba at a time when the corporate expenditure of even a penny in the Caribbean country was prohibited without U.S. government approval. But the company did not spend the money directly. Instead, with Trump’s knowledge, executives funneled the cash for the Cuba trip through an American consulting firm called Seven Arrows Investment and Development Corp. Once the business consultants traveled to the island and incurred the expenses for the venture, Seven Arrows instructed senior officers with Trump’s company—then called Trump Hotels & Casino Resorts—how to make it appear legal by linking it after the fact to a charitable effort". Back in 1998, Trump Hotels' stock had fallen off a cliff, losing 80% of its value from its highs. But, at the same time, there was pressure on President Clinton to lift the embargo on Cuba. That is why Trump was exploring opening a hotel and casino in Cuba and used Seven Arrows to investigate that possibility. But even that kind of exploratory trip violated the Cuban embargo. On the other hand, charity efforts were legal. Seven Arrows recognized the illegality of what was being done and when they billed over $68,000 in expenses to Trump, they told his to use the Caritas Cuba charity in order to hide what was going on. Trump campaign manager Kellyann Conway seemed to confirm the story by saying, "I think they paid money, as I understand from the story, they paid money in 1998...And then it turns out he decided not to invest there". Unfortunately, the law clearly did not allow even the exploratory trip, much less any investment. This is not going to go over well with Cuban-Americans, the one group of Hispanics that actually supports him. And in the critical swing state of Florida, the loss of that support could be decisive.

Deutsche Bank Liquidity Problems Grow

It looks like Deutsche Bank (DB) could be in the early stages of a death spiral and the implications for the world's financial system are, once again, enormous. The stock, which was already at 30-year lows, dropped 6.7% yesterday and at one point earlier this morning had fallen another 9% as concern about the bank's health grows. The reason for the most recent sell-off has to do with the concern that the company has too little cash on hand as well as the fact that customers have begun cutting back their exposure to the bank. At least one client has admitted he had stopped doing business with DB in anything but the most liquid securities because of concern about their liquidity and the company admitted that 10 hedge funds had removed their cash from the bank. If this trickle of counterparties and hedge funds starts growing, the lack of confidence in the bank will simply feed on itself, resulting in the loss of liquidity that has brought down banks in the past (see MF Global).

Another sign that the bank is feeling under pressure is that on Wednesday it agreed to sell its Abbey Life insurance business for $1 billion. Although the banks said the sale would simplify structure and improve returns, it also provides additional liquidity and capital to the bank.

The bank's stock has admittedly been effected by speculating short sellers who do not believe the bank will be allowed to fail. Despite Angela Merkel's insistence that the German government will not bail the bank out, it is hard to imagine that she would let the bank go bankrupt - it is just too important to the German economy and the ramifications as its failure rippled through the financial system is too enormous. There are a number of options that Merkel could employ before she has to decide on a bailout, should it come to that. She could force the bank to merge with another big German bank that the government does own a stake in, Commerzbank, or it could force DB to sell its prized asset management division in order to raise capital and increase liquidity.

In any case, regulators around the world must be getting a bit nervous as they see this unfold. If the bank is subject to a liquidity run, it will really be the first test of all the new rules put in place after the financial crash in order to deal with the collapse of a bank that is really too big to fail.

Stumpf's Days May Be Numbered At Wells Fargo

Things aren't getting any better for Wells Fargo and the pressure continues to build for CEO John Stumpf. Yesterday, Stumpf was grilled by the House Financial Services Committee and took heat from both sides of the aisle. Democrat Mike Capuano asked, "What's the difference between you and a bank robber?" while Republican Jeb Hensarling inquired whether Stumpf considered the more than $10 billion in fines the bank has paid over the last few years as simply "the cost of doing business".

And, even as Stumpf was getting grilled, the OCC announced Wells Fargo would be fined $20 million for violating rules on lending to military servicemen, including ignoring the rate cap for members on active duty. Separately, Wells announced an agreement with the Justice Department that would require a $4 million payment due to improperly seizing vehicles owned by servicemen who fell behind on their auto loans. As Democrat Maxine Waters noted, "It appears the company can't make it through even this congressional hearing without us learning more and more information about what is going on at Wells Fargo." It's never a good idea to be caught ripping off active service members. And the company's bland statement on these settlements won't do much to reduce the anger toward the bank. "In those instances where some service members did not receive the appropriate benefits and protections, we did not live up to our commitment and we apologize,” the company said.

Even more troubling for Stumpf was the announcement by the California's state treasurer that the state will cease using the bank as a broker, will not use the bank as an underwriter, and will not invest in the bank's securities for a period of one year. The California state treasurer is also on the board of the state's huge pension funds, the California Public Employees' Retirement System and the California State Teachers' Retirement System, and will push those funds to enforce their preference for the companies they invest in to separate the CEO and Chairman of the Board positions. Stumpf holds both positions at Wells. The pressure on him to resign is only increasing as his plan for damage control in the wake of the massive fraud at the bank is clearly not working. Eventually, it seems, he will have to fall on his sword.

Thursday, September 29, 2016

NY Times Has Severe Amnesia In Analysis Of Clinton Debate Win

In an analysis of the impact of the clear debate win by Hillary Clinton today, the New York Times seems to suffer some severe amnesia. The article describes how the Clinton campaign has the sense that any bump she might get from the debate could be fleeting. According to the Times, "After all, the solid bump Mrs. Clinton received after the Democratic National Convention in July evaporated after she emerged from an August packed with private fund-raisers. By September, national polling averages showed a marked narrowing of the race." So, apparently Clinton frittered away her post-nomination bump by spending her time fund-raising. My recollection is somewhat different. I remember the New York Times running multiple stories about the "clouds" hanging over the Clinton Foundation because of purported potential conflicts of interest that none of those articles could ever find. I also remember Hillary's health becoming a big issue when she basically collapsed at the 9/11 memorial service because she had pneumonia. I don't remember people or the press criticizing her for too many private fund-raisers. And the idea that her post-nomination bounce would evaporate is hardly surprising - they always do. In 2008, President Obama lost his bounce within two weeks - the convention ended August 27 and it had all gone by September 7. In fact, Hillary's bounce has lasted far, far longer than most and it hasn't entirely dissipated either.

The article continues, "Even Mrs. Clinton, who often says she always expected the race to be close, has appeared confounded by the tight polls. 'Why aren’t I 50 points ahead?' an animated Mrs. Clinton asked last week in a video address to the Laborers’ International Union of North America meeting in Las Vegas." I wasn't there but I'm pretty sure that is clearly a joke. Yet the article treats it in all seriousness. With reporting like this, it's pretty hard to take this article seriously.

Analysis Of Trump's Debate Answers On Trade And Jobs Shows Virtually No Detail

The general consensus on the first debate is that Donald Trump was taking it to Hillary Clinton on the trade issue until she baited him with a comment about the $14 million loan Trump got from his father to start his business. From then on, Trump went completely off the rails and was crushed by Clinton. But my impression was that certainly Trump came out of the gate with lots more emotion and passion but with hardly any answers. He seemed like the "security monitor" in the LifeLock ads - he could identify the problem but had no solution.

So I thought I'd go back and look at the transcript and see what specific proposals Trump provided in response to the trade issue. I've annotated Trump's statements to highlight his proposals.

TRUMP: Thank you, Lester. Our jobs are fleeing the country. They're going to many other countries. You look at what China is doing to our country in terms of making our product. They're devaluing their currency, and there's nobody in our government to fight them...You see that, their small car division leaving. Thousands of jobs leaving Michigan, leaving Ohio. They're all leaving. And we can't allow it to happen anymore...But we have to stop our jobs from being stolen from us. We have to stop our companies from leaving the United States...They're going to Mexico. So many hundreds and hundreds of companies are doing this. We cannot let it happen. Under my plan, I'll be reducing taxes tremendously, from 35 percent to 15 percent for companies, small and big businesses. That's going to be a job creator like we haven't seen since Ronald Reagan...Companies will come. They will build. They will expand. New companies will start. And I look very, very much forward to doing it. We have to renegotiate our trade deals, and we have to stop these countries from stealing our companies and our jobs.

TIDAL SOUNDINGS (TS): So Trump starts off by focusing on the jobs that have left the country. And I think everyone can agree with him that it is a serious problem. Heck, even I agree. But this is what globalization is all about and you are not going to roll it back. So the real question is what can we do about it. Trump's proposal is simply to cut taxes on businesses. I'm thinking they tried this kind of approach in the state of Kansas and it really hasn't worked out as Trump predicts. Most businesses move jobs overseas primarily due to labor costs and proximity to raw materials, not because of the tax rates they are paying here in the US. And moving the jobs overseas does nothing to avoid the tax, which still must be paid when the profits are repatriated. Now there is an issue with companies keeping their profits overseas and not repatriating them. And Trump does get to that later in the debate, as we will see. But please continue, Mr. Trump.

TRUMP: Our country's in deep trouble. We don't know what we're doing when it comes to devaluations and all of these countries all over the world, especially China. They're the best, the best ever at it. What they're doing to us is a very, very sad thing. So we have to do that. We have to renegotiate our trade deals. And, Lester, they're taking our jobs, they're giving incentives, they're doing things that, frankly, we don't do. Let me give you the example of Mexico. They have a VAT tax. We're on a different system. When we sell into Mexico, there's a tax. When they sell in -- automatic, 16 percent, approximately. When they sell into us, there's no tax. It's a defective agreement. It's been defective for a long time, many years, but the politicians haven't done anything about it.

TS: In actuality, China's currency has been appreciating for about the last five years despite what Trump says. But even assuming other countries are manipulating and devaluing their currencies, I'm not clear what the US can do about that other than jawboning those countries to be better. And Trump certainly doesn't offer any solutions to this. Trump then moves on to this ridiculous VAT argument that Krugman destroyed today. The VAT is essentially a sales tax and economists agree that it has zero effect on trade, despite what Trump says. But we'll let Trump continue.

TRUMP: Well, the first thing you do is don't let the jobs leave. The companies are leaving. I could name, I mean, there are thousands of them. They're leaving, and they're leaving in bigger numbers than ever. And what you do is you say, fine, you want to go to Mexico or some other country, good luck. We wish you a lot of luck. But if you think you're going to make your air conditioners or your cars or your cookies or whatever you make and bring them into our country without a tax, you're wrong. And once you say you're going to have to tax them coming in, and our politicians never do this, because they have special interests and the special interests want those companies to leave, because in many cases, they own the companies. So what I'm saying is, we can stop them from leaving. We have to stop them from leaving. And that's a big, big factor.

TS: He didn't really finish that last thought, but I'm sure his thinking goes along the line of higher costs for imports created by tariffs will make producing items domestically more competitive. And, for certain products and certain industries, that might actually be true. But, initially, all it does is raise the cost of all the cheap products like TVs, clothing, and such that we do import. In addition, many domestic industries rely on materials that are imported so their costs will rise. And you can bet that other countries would also raise tariffs on items they import from the US which would dramatically hurt US exports. Last but not least, these tariffs would break many treaties and trade agreements we have with other countries and organizations like the World Trade Organization. Trump offers nothing to deal with these concerns.

TRUMP: So I will tell you this. We have to do a much better job at keeping our jobs. And we have to do a much better job at giving companies incentives to build new companies or to expand, because they're not doing it. And all you have to do is look at Michigan and look at Ohio and look at all of these places where so many of their jobs and their companies are just leaving, they're gone. I will bring back jobs. You [Hillary Clinton] can't bring back jobs...You go to New England, you go to Ohio, Pennsylvania, you go anywhere you want, Secretary Clinton, and you will see devastation where manufacture is down 30, 40, sometimes 50 percent. NAFTA is the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country. And now you want to approve Trans-Pacific Partnership. You were totally in favor of it. Then you heard what I was saying, how bad it is, and you said, I can't win that debate. But you know that if you did win, you would approve that, and that will be almost as bad as NAFTA. Nothing will ever top NAFTA.

TS: There are no policies here, just a description of the problem as Trump sees it. And certainly there are towns and cities that have been decimated by the loss of manufacturing jobs, especially over the last 15 years.

But, as Hillary Clinton pointed out, manufacturing jobs actually increased during her husband's term. And the precipitous drop in manufacturing occurred between 2000 and 2004 before stabilizing and then dropping steeply again during the Great Recession. NAFTA came into force on January 1, 1994. The next five years actually saw a growth in US manufacturing jobs. On the other hand, China entered the World Trade Organization in 2001 which remarkably coincides with the dramatic fall in US manufacturing jobs. So Trump is wrong when he complains about NAFTA. But he is right when he says that we've lost a lot of manufacturing jobs to China. The question is what can we do about it, if anything. Or are those jobs gone forever and we need to focus elsewhere for increased employment. Trump provides no answers to that question.

TRUMP: And by the way, my tax cut is the biggest since Ronald Reagan. I'm very proud of it. It will create tremendous numbers of new jobs. But regulations, you are going to regulate these businesses out of existence. When I go around -- Lester, I tell you this, I've been all over. And when I go around, despite the tax cut, the thing -- the things that business as in people like the most is the fact that I'm cutting regulation. You have regulations on top of regulations, and new companies cannot form and old companies are going out of business. And you want to increase the regulations and make them even worse. I'm going to cut regulations. I'm going to cut taxes big league, and you're going to raise taxes big league, end of story.

TS: Again, there is no detail here, just cut taxes and cut regulation and everything will be great again. I think we've heard this tune for the last 30 years and it led to the greatest financial disaster since the Great Depression. By this time, the focus has shifted more towards taxes but we continue.

TRUMP: Well, I'm really calling for major jobs, because the wealthy are going create tremendous jobs. They're going to expand their companies. They're going to do a tremendous job. I'm getting rid of the carried interest provision. And if you really look, it's not a tax -- it's really not a great thing for the wealthy. It's a great thing for the middle class. It's a great thing for companies to expand. And when these people are going to put billions and billions of dollars into companies, and when they're going to bring $2.5 trillion back from overseas, where they can't bring the money back, because politicians like Secretary Clinton won't allow them to bring the money back, because the taxes are so onerous, and the bureaucratic red tape, so what -- is so bad. So what they're doing is they're leaving our country, and they're, believe it or not, leaving because taxes are too high and because some of them have lots of money outside of our country. And instead of bringing it back and putting the money to work, because they can't work out a deal to -- and everybody agrees it should be brought back. Instead of that, they're leaving our country to get their money, because they can't bring their money back into our country, because of bureaucratic red tape, because they can't get together. Because we have -- we have a president that can't sit them around a table and get them to approve something. And here's the thing. Republicans and Democrats agree that this should be done, $2.5 trillion. I happen to think it's double that. It's probably $5 trillion that we can't bring into our country, Lester. And with a little leadership, you'd get it in here very quickly, and it could be put to use on the inner cities and lots of other things, and it would be beautiful.

TS: OK, once again the wealthy are going to create tremendous jobs because apparently they aren't wealthy enough right now to do that. Then he talks about getting rid of the carried interest provision. The carried interest provision only applies to private equity and hedge funds and it allows the managers compensation to be taxed at a lower rate than regular income. It is hard to see how changing a tax on hedge and private equity fund managers will create any new jobs. And since removing the provision will actually increase taxes on these managers, it will reduce their wealth and apparently their capacity to create those tremendous jobs. It is also hard to see how this is such a great thing for the middle class. And Democrats, including Clinton, have pushed to eliminate this provision as well. At the end, Trump addresses the issue of the $2.4 trillion in profits held overseas that have not been repatriated. Of course, the $2.5 trillion he references (and there is no source that I've found for his $5 trillion number) is profits, so under Trump's own plan of a 15% tax rate , that would amount to around $375 million in revenue for the government to be put to use in the inner cities and other things. He assumes, I guess, that the rest we would be re-invested here in the US rather than just distributed back to shareholders in order to create other jobs. And, in a revised Trump tax plan, he calls for a one-time tax of 10% on repatriated profits which would bring in even less government revenue for the inner cities and other things and more corporate profits. Whatever the number, that is certainly real money and the problem of profits held overseas certainly needs to be addressed. Even President Obama has called for a one-time 14% tax on repatriated profits. But if we really want to help the inner cities, we should demand that these corporations pay the taxes that they owe rather than offering them a deal.

At this point we are off into Trump's own taxes and Clinton starts totally dominating the debate. So, in the entire debate section where Trump was supposedly doing well, he offered one concrete proposal - cutting the corporate tax rate to 15%.  He talks about currency manipulation but offers no solutions. He clearly does not understand that a VAT is a sales tax that has no effect on trade. He talks about raising tariffs but has no detail on how big those tariffs might be or how they might be legally implemented and why they wouldn't start a trade war. HE mentions renegotiating trade deals but doesn't say how. He points to NAFTA as the worst deal ever but it was China's entry into the WTO that decimated US manufacturing. He is going to cut regulation but provides no details. He talks about eliminating the carried interest loophole but all that would do is cut the profits of fund managers and Clinton agrees with him on that anyway. And, finally he talks about repatriation of profits but his statement makes it sound like they would be taxed at 100% and all the money would go toward rebuilding the country. He did do a good job of mentioning Michigan, Ohio, and Pennsylvania, however. It is hard to believe that people could look at this and think this is the part of the debate he "won".

Polls Show Clear Debate Victory For Clinton

The initial polls about who won the first debate are in and it shows a decisive and overwhelming victory for Hillary Clinton:

Those are pretty astounding numbers but entirely understandable if you watched the entire debate. But we still have to see if these numbers will be reflected in changing the election poll numbers. You can believe your candidate lost the debate but still be intent on voting for him/her.

Bill Allowing Suits Against Saudi Arabia Will Not End Well For U.S.

In an ill-advised move, the House and the Senate voted to override President Obama's veto of the bill that would allow 9/11 families to sue Saudi Arabia over its apparent links to the terrorists. The vote was overwhelming in both houses of Congress, making this a bipartisan error. Right now, countries that are designated state sponsors of terrorism do no have immunity from being sued in US courts. Countries not on that list do have that immunity. This bill would limit that immunity even further, excluding states that have alleged ties to terrorists, which now includes Saudi Arabia.

This will only come back to bite us in the end, as other countries will retaliate in a similar fashion. This will put US service members at risk in other countries around the world and probably trigger lots of legitimate and bogus suits against the US. It is a major breach of international law involving sovereign immunity. But, in typical fashion, Congress seems to think that we can constantly abrogate international law without any of the consequences of doing that blowing back at us.

Incredibly, after voting 97-1 (Harry Reid being the lone holdout) to override Obama's veto, 28 Senators sent a letter to the bill's sponsors raising a concern about the "unintended consequences" of the bill. Yes, this was the Senate, that bastion of learned deliberation.

Yes, I feel sympathy for the 9/11 families and I understand their belief that Saudi Arabia was linked to the attacks. But this will not end well for the US and some of its citizens. But it is clear that very few in Congress considered what will happen in the future; they just wanted to make sure they got the votes in November.

Government Shutdown Looks To Be Averted

It looks like the government shutdown will be averted thanks to Paul Ryan and Nancy Pelosi agreeing to add an amendment to a water bill that will ensure that there is some funding for the Flint water crisis. The Senate passed the continuing resolution by a vote of 72-26 yesterday that pretty much had everything Democrats had demanded - including Zika funding without any restrictions on Planned Parenthood and omitting provisions that would have blocked the US from turning over responsibility of internet domain name to an international organization and rolled back some environmental and trucking regulations. They were not able to remove the provision that blocks the SEC from revealing "dark money" campaign contributions.

The continuing resolution will now go over to the House for a vote later this afternoon. And even the usually recalcitrant Freedom Caucus seems to have caved in to the inevitable. So the expectation are that the bill will pass and everyone can get back to what they do best - raising money and campaigning. But it is the House, so you never really know until the voting closes.

Wednesday, September 28, 2016

Wells Fargo Claws Back Stock Compensation In Wake Of Fraud

Wells Fargo will actually claw back compensation from CEO John Stumpf and Carrie Tolstedt, the former head of the retail banking operation where the massive fraud in opening bogus accounts occurred. Claw back provisions have been implemented with increasing frequency since the financial crisis but have rarely been invoked. These provisions focus on stock grants rather than salary compensation. Stumpf will forego $41 million in stock which represents the entire amount of his stock awards that has not yet vested. Tolstedt will forfeit $19 million in unvested stock. Both will forfeit their bonuses for this year while Stumpf will also forego his nearly $3 million annual salary. But don't feel too bad for Stumpf as his nearly 5.5 million in already vested stock is worth around $250 million. I think he might be able to live on that in his retirement. And I'm sure Tolstedt will be OK too.

Of course, the prior salaries and non-stock bonuses given to Stumpf and Tolstedt will not be taken back.  And the stock claw back doesn't cost Wells Fargo anything as the stock had not yet vested. But since the stock has already been allocated, perhaps the bank might want to sell it in order to raise money to pay all those workers who were improperly fired for not making the ridiculous quotas and refusing to engage in the fraud to begin with.

These claw backs are all well and good and perhaps they will restrain some executives. But the only real way to crack down on these massive financial frauds is to finally send some of these executives to jail for some significant time.

Nexus Of Illegal Activity At Foundation And Refusal To Release Taxes Spells Big Trouble For Trump Campaign

It looks like we may finally be seeing a nexus between the scandals at the Donald J. Trump Foundation and Trump's continued refusal to release his tax returns. And that could mean even more trouble for the Trump campaign.

David Farenthold's report that outlines how Trump directed $2.3 million in fees that were owed to him or his businesses to be paid to his own Foundation, something that is illegal on its own, also raises the question of whether he paid income taxes on those fees as the law requires. So far, the Trump campaign, after first denying the transactions even took place, now says Trump did pay taxes on a $400,000 directed fee but refuses to answer the question about the other $1.9 million. Combine that with the clear self-dealing the Foundation engaged in, such as paying off Trump's own legal settlements with Foundation money and buying Trump portraits of himself, raises a clear question of income tax evasion. And that just raises even more questions about why Trump won't release his taxes.

I have to believe that now that the two issues have been linked, the media will really start to bore in on this. Up to now, it has all been pretty much up to Farenthold and the Washington Post to uncover what has been going on in the Trump Foundation. But you have to think that other organizations (hello, New York Times) are already starting to look at this connection. And pressure from liberal media watchdogs to balance out those stories about "clouds" hanging over the Clinton Foundation will be intense - can you imagine the wall-to-wall coverage Hillary Clinton would be getting if this happened with her.

But this is potentially more than a political and media story. It will also lead to some serious investigations. New York Attorney General Eric Schneiderman has already launched an inquiry into the Trump Foundation and that investigation will probably now spread to Trump's taxes as well. In addition, the IRS will probably be looking at whether the Trump Foundation actually deserves its tax-exempt status considering the illegal contribution to Florida Attorney General Pam Bondi, the other self-dealing uncover by Farenthold, and how little has actually gone to charity.

The Trump campaign insists that Trump will be harder on Clinton in the next debate, making sure to bring up her email scandal, the Clinton Foundation, Benghazi!, and even Bill Clinton's infidelities. But the reality is that Trump had his chance on those issues and he blew it. Subsequent debates will probably have a much smaller audience. Hillary has already admitted in this debate she made a mistake in setting up her own private email server so it's hard to score more points on that. Benghazi! has been flogged to death and Hillary can just point to the seven or eight investigations of the incident that cleared her completely. And if he goes after her on the Clinton Foundation, she can just respond that the only illegal acts in either of their foundations were his and then link that to his not releasing his tax returns, as well as being proud of paying no taxes, which is turning out to be a fairly big negative for Trump according to post-debate focus groups. As for Bill Clinton's infidelities, I double it is going to go over very well with swing suburban women to try to blame the wife for the husband's indiscretions. Trump really has no avenue for attack that's left. His answers on national security in this debate leave with almost no credibility in that area. The only thing he has going for him is attacking her on trade. But you can't go for a whole debate with just one issue. And that assumes Trump could go an entire debate without even more self-inflicted wounds.

Lawrence O'Donnell Eviscerates Donald Trump And His Enablers

Lawrence O'Donnell eviscerated Donald Trump on his show, the Last Word, last night in a nearly 20-minute diatribe. And he also went after all the professional political hacks that enable Trump in his egotistical and misogynistic campaign. And he ended up pointing out Trump's use of the words that every abuser uses, they "deserve it". Take a look at his rant here.

Ryan Tries To Move Stop-Gap Government Funding Bill Along

Paul Ryan is probably nervous enough already about having to ram through a stop-gap spending bill before the government shuts down on Friday night. He will have to jawbone certain GOP members to support whatever comes out of the Senate in order to pass the continuing resolution without relying on Democratic support, a move that cost John Boehner the job Ryan has now. And with the Senate unable to pass a bill without funding for the Flint water crisis due to Democratic objections, Ryan decided he needed to do something to move things along. The Senate had already passed a water resource bill by a vote of 94-3 that included $220 million in funding for Flint but Democrats had no assurance that the money would actually be allocated when the bill went into conference with the House. Ryan, in an agreement with Minority Leader Nancy Pelosi, will try to ease that concern by agreeing to a vote in the House that would add an amendment to the water bill allocating $170 million for Flint. This would guarantee that at least that amount would be available for Flint in the bill that comes out of the conference committee.

If this amendment passes, it removes one of the last major roadblocks in getting the government funded beyond Friday night. But there are still a few dissenters, even Republicans like Lindsey Graham, who may need to be assuaged in order to pass a bill in the Senate. Even more unclear is how many Republicans in the House, who hate the idea of a continuing resolution that would allow a gigantic budget compromise bill to be passed in the upcoming lame-duck session, will object. That is Ryan's nightmare as he will be desperate not to have to rely on Democrats to pass the stop-gap bill.

A majority of both Republicans and Democrats do not want a government shutdown and just want to get back to their states and districts in order to campaign. But Democrats believe that the GOP will be blamed for any shutdown as they control both houses of Congress. That allows Democrats in the Senate, where the minority has great power, to play a little hardball. In the House, there is a group of around 40-60 Republicans who can do the same. Ryan will essentially be calling their bluff to see if those GOP members really want to be responsible for shutting the government down. If they do, then his only choice is to turn to Democrats to pass the bill. I truly doubt it will come to that but you never know.

Tuesday, September 27, 2016

Procedural Vote On Stop-Gap Funding Fails; Shutdown Looms

It looks like we are headed for at least a temporary government shutdown as the procedural vote in the Senate on the stop-gap bill to keep the government funded failed with only 45 member supporting it. Indicating the kind of problems that Mitch McConnell will have in crafting another compromise option is the fact that 12 Republican Senators voted against this bill. So it is back to the drawing board once again. Democrats have insisted on funding for Flint's water crisis especially since McConnell included money for flood-stricken Louisiana. McConnell is now floating the idea of removing funding for Louisiana so neither Flint or Louisiana would get any relief. I'm not sure how well that will play on either side of the aisle. And now just the procedural hurdles of getting a bill out of the Senate before Friday night are difficult. Meanwhile, the House is just sitting there and waiting to see what the Senate will give them and there is no guarantee that they will pass whatever bill the Senate passes on to them. Just the latest example of a party that seems to be incapable of governing anymore.

Sinking Deutsche Bank Poses Dilemma For German Government

Deutsche Bank, the scandal-ridden German bank that is rumored to be the only Wall Street firm still willing to deal with Donald Trump, saw its stock sink to its lowest point in decades after a rumor surfaced that the German government has ruled any sort of bailout for the troubled firm. The bank's stock is trading at under 25% of its book value and the bank itself is facing a massive fine from the US Justice Department over its underwriting of mortgages leading up the financial crisis. The Justice Department is seeking $14 billion which is equivalent to the bank's current market value. And the bank's capital cushion is already thin to begin with.

This has put the German government in somewhat of a bind. Angela Merkel and her finance minister pushed through a new European rule that restricts state-sponsored bank bailouts and forces bondholders and potentially even depositors to put up money before the state can step in. This was largely a result of all the banking problems in southern Europe, especially Greece, in the wake of the financial crisis. But now they might be hoisted by their own petard if Deutsche Bank stock slides even further and it starts losing liquidity or needs another capital infusion. No one believes that the German government would let the bank fail as that would trigger another banking crisis. At the same time, a bail-in from bond holders and depositors is hardly more palatable. One option is to use a loophole in that European banking rule in order to allow the government to inject more capital. But that would look incredibly hypocritical for the Germans who have been imposing fiscal probity on the rest of Europe. Another option is for Deutsche Bank to merge with Commerzbank, a bank that the German government does own a substantial percentage of due to bailing the bank out during the financial crisis. The government could find a way to inject capital into the merged firm through its ownership stake, although that would probably also raise the criticism of hypocrisy. A more realistic option is to find some way to come to a much-reduced settlement with the Justice Department which would still leave the bank in a somewhat precarious place but with the possibility of recovery. The German government has said they have not lobbied the US on behalf of the bank and the bank insists it has not asked the German government for help. And you have to bet that the US is probably not interested in driving the German bank under, despite the political pressure for a significant settlement. The final option is probably the least palatable for all but also the most sensible and that is for the bank to divest its prized asset management unit. That would inject a large amount of capital but probably also leave the bank as a shell of its former self.

The irony of the Germans having to confront the possibility of bailing out one of its own giant banks is striking. And the sad part is that the German government is partly responsible for Deutsch Bank's problems. Investors realize that it is incredibly hard for the bank to make any money the way it is currently structured in this low interest rate environment. The reality is that the bank would be doing far better if interest rates were higher. But they are not and that is because of the German government's continued insistence at fiscal austerity in the rest of Europe and its unwillingness to allow any significant inflation in the German economy. A faster recovery in all of Europe would have probably meant that Deutsche Bank would not be in this position. But the German government has brought this on themselves.

Wildstein Testifies Christie Lied About Bridgegate

Another story that may have been lost in the all the debate hoopla yesterday and today was the testimony of David Wildstein in the Bridgegate scandal trial. Wildstein was a member of the Christie loyalists in the Port Authority (PA) and he testified that he came up with the lane closure scheme and reported the idea to his boss Bill Baroni, the top staff appointment of Governor Christie at the PA. He also reported the idea to Bill Stepien who was Christie's chief of staff at that time and repeated the idea to Bridget Ann Kelly when she replaced Stepien who left his position to run Christie's gubernatorial re-election campaign. It was nearly two years after his original idea was proposed that it was actually put into effect. Today, Wildstein testified that he and Baroni bragged to Governor Christie about the lane closures as they were occurring when they were all at a 9/11 memorial service. Wildstein said the target of the closures, the mayor of Fort Lee, was constantly calling the PA about the closures but those calls were met with silence. According to Wildstein, Christie commented in a sarcastic voice, "I imagine he wouldn’t get his calls returned".  Wildstein also testified that David Samson, the chairman of the PA, subsequently joined the conversation ad repeated to Christie that the mayor's calls were not being returned. In addition to Wildstein's testimony, the prosecution presented a video showing the meeting of all the men at the 9/11 service that Wildstein described.

Christie has continually denied that he knew about the lane closures either beforehand or as they were occurring and claims not to recall these conversations. That stance looks to be increasingly untenable as it is clear that his chief of staff, his campaign manager, and senior Port Authority executives knew about the plan in advance and Wildstein's testimony now shows that Christie was informed of what was going on as the closures were occurring by three of these people who were under the clear impression that Christie approved of the lane closures. And Christie did nothing that would make them or us think otherwise. Incredibly, Christie is still maintaining his denial even after this testimony, saying, "I had no knowledge, prior to or during these lane reassignments, I had no role in authorizing it, I had no knowledge of it, and there's never been any evidence put forward that I did". Actually, Wildstein's testimony under oath does count as evidence. It is only fitting that Christie is now an important part of the Trump campaign.

Saudi Wage Cuts And Youth Unemployment May Signal Future Unrest

It looks like Saudi Arabia could be headed for some domestic unrest in the not too distant future. On Monday, the government announced drastic cuts in salaries and perks for government employees. Government employees incredibly amount to over 60% of all employed workers in the country. The sustained drop in oil prices has blown a whole in the Saudi Arabian budget which ran a deficit of nearly $100 billion last year. In addition, the government is waging a war in Yemen which can only add to the budget difficulties. The demographics for the country are also a bit scary as 300,000 new workers are entering the labor market each year and the unemployment rate for 15-24 year olds stands at around 30%. The Saudi government maintains strict control over the population and a crackdown on internal dissent last year resulted in 47 people getting executed in just one month. But hundreds of thousands of unemployed young people and declining wages for those that are working is probably going to lead to some sort of unrest at some point, no matter how hard the government cracks down.

Farenthold Disputes Trump Claim About Foundation Lawyers

Following up on David Farenthold's report that Trump directed fees that were Trump's income to his charity, Trump was asked if his foundation followed all the applicable laws. Trump replied, "I hope so. I mean, my lawyers do it." Farenthold today said that he had reviewed the Foundation's returns for the last 14 years and apparently the Foundation has paid only $211 for legal services for that entire period. I'm pretty sure that equates to like 15 or 30 minutes of legal work over 14 years. That certainly doesn't sound like an organization that is trying to follow all the applicable laws.

Monday, September 26, 2016

Live Blogging The Debate

Ok. I'm going to try to do this. Here we go:

OMG - Hillary is wearing a pant suit!!

Producing jobs and raising income - Hillary lays out supporting workers - minimum wage, profit sharing, paid family leave, getting the rich to pay their fair share. Trump focuses on jobs leaving the country - that's about it.

Trump has the sniffles or something.

Trump interjects when Hillary points out that Trump wanted the housing market to collapse so he could pick up properties on the cheap, saying "that's business."

9:18 - Trump interrupts Hillary but she ignores him. We've got to do better at keeping our jobs by taxing imports is his answer.

9:20 - Trump goes after Clinton by saying Bill passed NAFTA which was the worst deal in history. Trump keeps on interrupting Hillary. His huge tax cut will create incredible number of jobs. He will cut regulations.

9:30 - Is Trump's constant interruptions actually playing well? Now he's going after the Federal Reserve. Lester Holt finally does something useful by asking about Trump's tax returns. He says he made $694 million and then he says how badly things are going in the country. If it's so bad, why is he doing so well. Holt presses and he then says he will release his returns when Hillary releases the 30,000 emails she deleted. Hillary goes after him on it, pointing out that the two years that were released showed he paid no taxes and he said, "that just make me smart".  Trump goes after Hillary on emails saying it was deliberate.

9:40 - Trump says the country is a mess - a third world country. Hillary counters that may be because Trump didn't pay his taxes. She then goes on to talk about all the workers that Trump has stiffed. He interjects, "maybe they didn't do a good job". Hillary goes into his bankruptcies. Trump then plugs his new DC hotel and says he simply is using the laws of the country.

9:45 - Race is the issue. Hillary talks about better police-community relations and reduction of gun violence. Trump goes "law and order". Now it's "stop and frisk". Holt points out that "stop and frisk" was unconstitutional. Trump says that isn't true, it would have been overturned on appeal. Hillary goes after the inherent racism in the justice system. Goes after for-profit prisons. Trump goes after Hillary for "super-predator" comment. Trump agrees with Hillary that people on the terrorism watch list should not buy guns - NRA might not like them. I think Trump just accused Democrats of controlling black population through drugs!

10:00 - Holt raises birther issue. Trump says Hillary started it and that he ended birther issue by getting Obama's birth certificate. Holt asks why Trump continued to press birther issue after certificate and Trump says "no one was really paying attention" whatever that means. Makes some comment on Hillary not being on the campaign trail. Hillary responds with the quote of the night, "I think Donald just criticized me for preparing for this debate. And yes I did. And you know what else I prepared for? I prepared to be president, and I think that’s a good thing." She then points out racial discrimination suit of Trump's father. Trump says many real-estate firms were sued by the federal government and Trump settled the case "with no admission of guilt". We all know how that works. He then goes on about opening a club in Palm Beach that doesn't discriminate.

10:05 - National Security - Holt starts it off with cybercrime. Hillary goes after Trump for encouraging Russia to hack Americans and Trump's praise of Putin.  Trump says no one knows for sure whether Russia hacked the DNC and manages to get in the fact that the hacked emails showed DNC supported Clinton over Sanders. Goes back to basic answer for everything - things are terrible and we've got to do better, but no description as to how. 

10:15 - Hillary says we've got to do better against ISIS but no real plan. Trump says is was Obama/Clinton who didn't leave troops in Iraq and didn't take the oil that created ISIS. Hillary counters that the deal to remove troops was actually made by Bush, Trump supported Iraq invasion and Libyan intervention. Trump attacks Hillary on Iran nuclear deal and then goes after NATO for not paying their fair share and not focusing on terror. He claims his criticism of NATO led them to focus on terrorism.

Holt asks that he supported the war in Iraq and Trump goes ballistic and says he never supported the war in Iraq, citing Hannity. Holt says he was referencing Trump's 2002 comment supporting the war and asked why his judgement was any better than Hillary's. Trump says of course he has better judgement and he has the right temperament.

Hillary defends Iran deal; questions his judgement when he said if he saw foreign fighters taunting US sailors, he would blow them out of the water. She then
Trump floats the idea of cutting off Japan from military protection or make them pay. The goes after Hillary for not getting the Iranians to do something about the North Korean nuclear problem in the Iran deal. Clinton responds that are mutual defense treaties will be endorsed.

10:33 - Trump says Hillary does not have the look or the stamina to be President. Goes back to us defending Japan and Saudi Arabia. Insists she doesn't have the stamina. Hillary says when he goes around the world or testifies for 11 hours in front of Congress, then Trump can talk about stamina.  Trump says Hillary has experience by bad experience and then goes into a rant about Rosie O'Donnell. Hillary goes back to start of answer when Trump said she didn't have the look and goes after Trump for his misogyny and sexism. Trump says Hillary is not nice and then says he is doing well in the polls.

It's over!

I did it - what a struggle. If Trump is not decimated after this performance, then I truly fear for our democracy. His single theme was essentially the country is a hellhole and I will fix it. But there was no indication of how he would actually do that through any specific policies. And his constant interjections certainly came across badly. His only strong point, if you could call it that, was hammering on the trade issue. Clinton was her usual detailed and controlled self, freely admitted error with regard to email server, and hit Trump on all the big points - taxes, bankruptcies, stiffing worker, and foreign policy.

Initial post-debate analysis says it's an almost total demolition of Trump by Clinton. Steve Schmidt called Trump's performance "national security incoherence". And now the MSNBC crew is focusing on Trump's sniffing, interrupting, facial expressions, and general fidgetiness - nothing like focusing on substance. But we'll see what the press says in a couple of days. I need a break - time to check the football game.

Late Update: Everyone in the press thinks Hillary crushed it but also think it apparently won't change anything in electorate. Full debate transcript here.

New Allegations Of Trump Using His Foundation Illegally To Evade Taxes

David Farenthold of the Washington Post has another blockbuster article on the Trump Foundation which again raises the possibility that Trump has been engaging in tax evasion. The article states that businesses that owed a combined $2.3 million to Donald Trump were instructed to donate those fees to the Trump Foundation instead. The $2.3 million came from two sources - an appearance fee from Comedy Central for $400,000 and $1.9 million from ticket scalper to the richest 1%, Richard Ebers.

According to tax experts, if those companies were instructed to donate, then Trump would still be liable for paying taxes on that income even though the money went to charity. The only way for Trump to avoid paying taxes on that income would be to renounce the fees and then suggest a donation be made to the charity of the other party's choice. Of course, if Trump actually did that, another option would be for the other party to simply keep the money if they chose not to donate to any charity at all. At first, the Trump campaign initially denied that the transactions took place. Then they said that Trump waived the fees and suggested the other party make a donation to the charity of their choice. When confronted with evidence suggesting the other parties had, in fact, been instructed to donate to the Trump Foundation, the campaign then said that Trump had paid taxes on the $400,000 Comedy Central donation but had no comment on the Ebers' donations other than saying, "To my knowledge, Mr. Trump has followed all applicable rules and regulations".

The $2.3 million is about half of the money donated to the Trump Foundation since Trump's last personal donation in 2008 and explains why people other than Trump have been contributing to the Trump Foundation since then. The article contains no conclusive proof that Trump has evaded taxes but Farenthold's sources are saying the payments were directed which contradicts what the Trump campaign is saying. And Lynne Patton, an executive at Eric Trump's charity, seemed to corroborate in an earlier statement what Farenthold's sources are also reporting, that Trump would direct the fees be paid to his charity. Of course, this could all be cleared up in one minute if Trump would release his taxes. I wonder why he hasn't.

To Watch Or Not

Decisions, decisions. Should I watch the debate and blog my thoughts and comments or should I just leave that in other more capable hands such as Kos or Kevin Drum and enjoy the evening watching football? What a dilemma! After all, it's the post-debate spin and media analysis that will determine the "narrative" going forward. Al Gore was clearly judged to have clobbered Bush in their first debate by the people who actually watched it. But the media decided his sighs were more important and within the week he had "lost" the debate, never to really recover. Perhaps with more media watchdogs these days, it will be harder to pull that trick. Anyway, I'm not sure my blood-pressure can handle it. We'll see.

Government Shutdown Looms Despite Everyone Thinking It Will Be Avoided

While everyone is focused on the first debate tonight, the fact that the government may shut down at the end of this week seems to have gone pretty much under the radar. Government funding ends on September 30th and right now there is no budget in place to keep it functioning beyond then. Mitch McConnell had originally planned to quickly pass a continuing resolution (CR) in the Senate and then get out of town, essentially letting Paul Ryan deal with recalcitrant Republicans who were loathe to pass the CR which would allow the lame-duck Congress to pass some massive budget resolution for next year. But somewhere along the way, that plan went awry. Negotiations seemed to be near a conclusion last week but eventually broke down over money for Flint's water crisis and restrictions on Planned Parenthood tied to Zika funding. McConnell then angered Democrats by offering what he described as a "clean" CR through December 9th that allocated money for the floods in Louisiana but had nothing for Flint's water crisis. This was especially galling as the Senate had already voted 95-3 to allocate money for Flint in a separate water bill. On the Republican side, there is hardly unanimity either. As mentioned, some House Republicans do not want a gigantic omnibus spending bill to be passed by the lame-duck Congress and want to make sure that certain conservative pet peeves like blocking Syrian refugees from entering the US and restricting Planned Parenthood from any Zika funding get enacted. In the Senate, Ted Cruz and others do not want to turn over management of internet domains to an international body while Lindsey Graham wants to lift the restrictions on the Export-Import Bank that limits deals to under $10 million. There will be a procedural vote tomorrow afternoon in the Senate and, if that fails, the chances of the Senate being able to pass a bill before Friday becomes quite slim. And, even if the Senate does pass a bill, it will still need to pass the House where, due to the timing, it is virtually a "take it or leave it" proposition. And there is a minority of GOP members there whose inclination would be to leave it. Whether there are enough of them to derail the bill is Paul Ryan's nightmare. The fact that things have reached this point is yet another reflection of the dysfunction in the Republican party. Despite controlling both houses of Congress, they are unable to perform the most basic function of funding the government. Not do they really seem to have a plan for doing so.

Democrats seem to feel that they have the upper hand and that failure to fund the government will fall on Republicans as they control both the House and the Senate. So it may be easier for Democrats to stick to their guns in these negotiations. But the reality is that pretty much all the members want to get this done and get back to their states or districts for the run-up to November, especially vulnerable Senate Republicans who are up for re-election. So the pressure for some kind of resolution is immense. But that doesn't mean it will actually happen.

Three Sad And Bittersweet Sports Endings

It was a sad end for three sports heroes yesterday. First, Miami Marlins pitcher Jose Fernandez tragically died in a boating accident early Sunday morning. Fernandez' story is truly remarkable, as he and his family made three attempts to flee Cuba before finally arriving here in the United States in 2008. He was drafted by the Marlins in 2011 and made his debut in the major leagues in 2013. In that rookie year, he was named to the All-Star team and came in third in the balloting for the Cy Young award as the league's best pitcher. Injuries sidelined him for most of the 2014 and 2015 season, but this year he was back in form, winning 16 games with a 2.86 ERA. In what sadly turned out to be his final game, he struck out 12 batters in a 1-0 win. But it was Fernandez' enthusiasm and joy for the game that was most striking.  With his incredible talent and positive personality, Fernandez could have been the face of the Marlins for the foreseeable future. Tragically, that will not happen.

Vin Scully, the voice of the Brooklyn and Los Angeles Dodgers for the last 67 years, called his final home game on Sunday afternoon. And the Dodgers made sure he went out in style. Corey Seager hit a home run in the bottom of the ninth to tie the game and then Charlie Culberson hit his first home run of the season in the bottom of the 10th inning to give the Dodgers a 4-3 win over the Colorado Rockies. The walk-off homer also clinched the National League West for Dodgers and they became the first team in history to win that division four consecutive years. Scully's laconic, almost subdued, style, his depth of knowledge, and his objectivity made him a fan favorite and a treasure.

Then, yesterday evening, it was announced that Arnold Palmer had died. Palmer's influence on golf was similar to Billie Jean King's influence on women's tennis, although with far less cultural significance. Palmer dominated the golf world just as television was coming of age and his fiery competitiveness alongside his off-course humility made him a fan favorite and "Arnie's Army" pronounced him "the King". Beyond his golfing prowess, Palmer was simply a good guy as well as a shrewd businessman. Even as he was dominating the tour, he was incredibly popular among the other players and he led the demand for changes at the PGA that essentially created the PGA Tour as we know it today. The massive prize money that players play for today can be attributed to Palmer's selfless insistence that all the players benefit from the tour, not just the winners. And he single-handedly created the Champions Tour where players over 50 can still play competitive golf for serious prize money. A legend and a great man who transcended his sport.

Corbyn Easily Wins Re-Election As Head Of Labour Party

Jeremy Corbyn easily won re-election as the head of the Labour party on Saturday, winning nearly 62% of the votes cast by over 500,000 party members. Corbyn alleviated fears among more centrist Labour members by offering an olive branch after the election, saying, "Let's wipe the late clean and get on with the work we have got to do as a party together". This will probably not satisfy many of the current Labour members in Parliament who do not believe that Corbyn will be able to lead them to an election victory and are skeptical of his left-wing policies such as re-nationalization. But Corbyn has expanded that party base and actually won this election by a larger margin than he won his first. And it was not like the centrist policies were winning many elections either as many blamed Ed Milliband's  and Labour's shocking rout at the hands of David Cameron in the last election on his "Conservative-lite" positions, especially those on the budget and the economy. And the reality is that Labour's complete disintegration in Scotland at the hands of the SNP has made winning any national election incredibly difficult for them.

The Brexit vote in the UK and the emergence of Donald Trump in the US just shows how disenchanted to voters have become with the established political order, largely as a result of its totally ineffective response to the Great Recession. People see that the big banks get bailed out and their executives still get paid ridiculous amounts of money but regular homeowners get no mortgage relief and find no jobs available - the system is just not working for them. Yet politicians in Westminster and Washington do not seem to comprehend that anger. That is why everyone was shocked by the Brexit vote and even Republicans in Washington cannot fathom the Trump phenomenon. The mood of these disenchanted voters seems to be that the system is so corrupt and sclerotic that is essentially needs to be blown up. They don't really have an idea of what should replace it but they certainly can't stand business as usual. In the UK, Nigel Farage tapped into that feeling to lead the emergence of UKIP. And Corbyn seems to at least realize that Labour can possibly attract voters with a real left-wing alternative to the status quo. Like the die-hard third-way Democrats in the US, the centrist element in the Labour party that prefers a Conservative-lite agenda does not realize that their time is over and done and more left-wing, progressive policies are ascendant.

Two Questions That Trump Must Be Asked Tonight

Tonight is the first of three Presidential debates. The moderators for these upcoming  debates have been under a lot of scrutiny lately and some of their ideas, such as Chris Wallace not feeling responsible for pointing out when a candidate blatantly lies, certainly deserve such scrutiny. And it doesn't help much that the director of the Commission on Presidential Debates feels, "I think, personally, when you get in to the fact-check, I'm not sure what is the big fact and what is the little fact", pretty much allowing a candidate to say anything without being challenged. That seems to fly in the face of the Commission's own stated goal of "provide the best possible information to viewers and listeners". But the first two questions that any moderator should be required to ask, at least in some form, of Trump is 1) Why do you continually lie? and 2) Why won't you release your taxes (and please don't tell us because they are under audit because you have the power to release them if you wish)?

The first question gets right to the character of Trump and avoids the problem that the press continually has of getting bogged down in the details of each individual Trump lie. With stories from the NY Times outlining at least 31 "whoppers" in one week and Politoco's analysis that within one week Trump managed one lie for every three minutes and fifteen seconds of the five hours he spoke, the frequency and depth of his lying clearly indicates a serious character flaw and it is imperative that Lester Holt pursue that tonight. The second question is an important defense of transparency in American democracy because, if Trump does not pay a heavy price for not releasing his taxes, we will probably never see another candidate's taxes again, unless Ron Wyden can ram through the bill requiring just that. If Trump replies that he is under audit, ask the question again with emphasis on the fact that he can release them anytime if he wishes. If he replies that his lawyer recommends not to do it, then use the old trick that is always used when you try to stand up for your constitutional rights - simply ask why he would need to rely on his lawyer's advice if he has nothing to hide. If the moderator refuses to ask these questions, then it is incumbent on Hillary Clinton to bring them up in her responses, especially the tax issue.

Hillary will have her own challenges with the email server and probably even with the Clinton foundation and the fact that, according to the polls, she is even less trusted than Trump. So you can be sure that there will be a "character" question for her. With regard to the emails, she should just readily admit that, despite the FBI not recommending any action against her, she freely admits that her use of a private email server was "extremely careless" as described by the FBI Director. Any type of legalese or lawyerly language will just do more damage. And if the follow-up question is whether people should be concerned about voting for her considering her carelessness, she should just respond that she is not perfect but will stand on her decades-long record in public service.

For Lester Holt, or any of the moderators, not to confront these issues will turn a process that the  Commission on Presidential Debates insists is designed to inform the American public into just another reality, or un-reality, TV show. And we all know that kind of show is where Trump is in his element.