Goldman Sachs and Venezuela

President Maduro blasted President Trump for all Venezuela’s problems.  Of course, the US caused none of the problems.  Now, for those looking for a scapegoat, they have Goldman Sachs and what is perceived to intervention by the US to support Maduro.  It isn’t.

Venezuela’s people are suffering from a lack of food and medicine.  The national oil company (PDVSA) is (or was) the lifeblood of the economy.  As the political situation deteriorated,  the bonds of PDVSA became worth less, because the possibility of non-payment (default) or partial payment on the bonds was very high.  If this were an American company,  and they defaulted on their bonds, the investors would seek relief through the bankruptcy courts.  Generally, when immediate liabilities exceed the assets of the company, the company is likely to collapse.  This is the situation with Venezuela with 17 billion in debts to pay in 2017 and only 10 billion dollars in reserves,   Something has to give.

Goldman Sachs entered the fray by buying 2.8 billion dollars of PDVSA bonds on the secondary market.      The bonds were bought at a huge discount (70%) to the market price.  Why?  Because the market wasn’t working, it was in free fall.  Nobody had confidence in PDVSA, and that’s why the bonds sold at the huge discount.     Investors always try to buy at the bottom, and sell at the top.  That’s capitalism, and the only way to stay in the game.

Julio Borges, the opposition lawmaker who heads the National Assembly, wrote the CEO of Goldman Sachs, accusing him of making “a quick buck off the suffering of Venezuelan people.”   Opposition leaders have threatened to cut off  payments on the bonds,  but this is likely just rhetoric.  The covenants with the bonds prevent the issuer from favoring one bondholder over another, so paying just Goldman or JP Morgan or another holder would set off lawsuits.    It would be like hanging from a cliff by a thread and then cutting the thread.   The institutions that sold the bonds, were part of the government, so there was a gain of hard currency in exchange for IOU’s from Maduro’s government.

There were protests yesterday at the Goldman Sachs headquarters in NYC, with signs saying Goldman Sachs supports  Maduro’s  dictatorship.    It is a dictatorship, and the people of Venezuela are suffering.   You can’t get rid of a political leader through destroying the financial system.  Without the flow of some hard currency, the country financial system either collapses, or PDVSA gets chopped up in small pieces and sold (by the way, this is not going to happen).

Stay tuned,

Dave

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I’ll see you in court – Part 2

The Taj Mahal story is not quite complete.  How Marvin Roffman got fired,  sued Donald Trump and his employer is only part of the story. The Taj Mahal turned out to be disaster, and fell into default on its bonds beginning with a missed payment in October 1990.  From MPA Magazine:

Roffman was awarded $750,000 by an NYSE arbitration panel, and settled with Trump for an undisclosed amount. But in the meantime, he couldn’t find work as an analyst. That’s when he started a new career as a financial advisor. That career took off; when he retired in 2007, Roffman’s firm managed more than $500 million.

Roffman is not bitter as he said the following in an interview:

“In a way, I owe Donald Trump a lot, because he forced me into a new career that turned out well,” Roffman told Barron’s. “…But that doesn’t excuse the hell he subjected me to in 1990, sliming my reputation so much that I got fired and couldn’t find another job as an analyst.”

The saga of the Taj Mahal is a long one, but it is clear the captain of the ship (Trump) did not go down with the ship, but found ways of making himself richer at the expense of the casino, and ultimately stiffed the contractors.  The New York Times story states:

But even as his companies did poorly, Mr. Trump did well. He put up little of his own money, shifted personal debts to the casinos and collected millions of dollars in salary, bonuses and other payments. The burden of his failures fell on investors and others who had bet on his business acumen.

Trump agrees, as he stated in an interview:

“Early on, I took a lot of money out of the casinos with the financings and the things we do,” he said in a recent interview. “Atlantic City was a very good cash cow for me for a long time.”

Trump used every legal and illegal trick in the book to keep the ship afloat, while simultaneously enriching himself. Case in point as stated in the NYT article:

By December 1990, when Mr. Trump needed to make an $18.4 million interest payment, his father, Fred C. Trump, sent a lawyer to the Castle to buy $3.3 million in chips, to provide him with an infusion of cash. The younger Mr. Trump made the payment, but the Casino Control Commission fined the Castle $65,000 for what had amounted to an illegal loan.

What kept the Taj Mahal afloat was not Trump’s business acumen, but his showmanship skills to get others to invest millions in terms of stock and junk bonds.  The Taj Mahal was close to bankruptcy, but was save in June 1995 through a  stock offering to  raise 140 million dollars.  Junk bonds yielding 15.5% brought in 155 million dollars.  The following year, approximately 1 billion dollars was raised by selling junk bonds.  Trump used the money to pay off his personal debts.

These investors eventually got burned.  However, I feel really sorry for all the contractors that Trump failed to pay as he defaulted on payments.  Per the NYT article:

“He put a number of local contractors and suppliers out of business when he didn’t pay them,” said Steven P. Perskie, who was New Jersey’s top casino regulator in the early 1990s. “So when he left Atlantic City, it wasn’t, ‘Sorry to see you go.’ It was, ‘How fast can you get the hell out of here?’”

The casino survived under various managements until October 2016.   The history of the Taj Mahal is documented on various sites.    Wikipedia reports:

During eighteen months after its April 2, 1990 opening,[21] when the Casino was on the verge of bankruptcy, it became the “preferred gambling spot for Russian mobsters living in Brooklyn, according to federal investigators who tracked organized crime in New York City.”[29]

Further in their website post, they state:

The 1992 U.S. Senate Subcommittee 218-page report entitled “Asian Organized Crime: the New International Criminal”, linked Trump’s businesses to Asian organized crime.[50]

IRS investigation documents obtained by CNN (see link below)  showed Trump violated anti-money laundering  rules 106 times, but settled with the IRS in 1998 for $477,000.  Money laundering continued from 2010 to 2012, however Trump is in the clear on these violations.   Trump’s involvement with the Taj Mahal was in name only. He had departed Atlantic City in 2009, maintaining a small stake in the casino’s parent company.

The Taj Mahal’s new owner is Carl Icahn.   The eighth wonder of the world, with 2100 rooms,  and all the glitz and glamour, built at an expense of 1 billion dollars,   has been shuttered up since October 2016 and has yet to change hands.   Icahn has denied that Hard Rock Cafe would be a possible buyer.

This blog began with Trump launching a brutal attack on a relatively unknown stock analyst, and the threat of  “you will be hearing from my lawyers.”   Now, Trump sits atop the Department of Justice, but is powerless to direct the investigation, unless he wants to fire the Attorney General, Deputy Attorney General, the Special Counsel Robert Mueller.

It makes sense how Donald Trump constantly lashes out against the New York Times and the Washington Post for their in-depth reporting.   They know Trump’s history.  The Wall Street Journal and Barron’s have also done an excellent job at reporting the facts.

Links:

Trump’s casino was a money laundering concern shortly after it opened

MPA Magazine:

http://www.mpamag.com/news/how-donald-trumps-wrath-led-to-riches-for-one-financial-advisor-29512.aspx

NY Times:

https://www.nytimes.com/2016/06/12/nyregion/donald-trump-atlantic-city.html?mcubz=0

Wikipedia- Taj Mahal

I first got wind of this story by reading Alan Abelson’s column “Up and Down Wall Street” column  in Barron’s. I can’t post his column as it is copyrighted by Barron’s.

Letters sent by Roffman and Trump’s reply

Stay tuned,

Dave

I’ll see you in court – Part 1

Trump never seems satisfied with replying to critics.   He denigrates  his critics, usually in pretty vicious terms. There’s none of the civility, diplomacy or basic politeness that we became accustomed to with Obama and other presidents.    And there’s always a threat of lawsuits.  And he loses sometimes. You can’t get the courts or intimidation to silence your critics.

My lawyers will be in contact with you- means you’ve pissed off  Trump.

Case in point- in 1990, Trump was promoting his latest casino, the Taj Mahal,  which he financed by selling bonds to investors.  “It’s truly going to be an incredible place,” he [Trump] told reporters. “We’re calling it the eighth wonder of the world. ”

Marvin Roffman at the time was a casino investment analyst, with Janney, Montgomery Scott, a small investment company in Philadelphia.  Roffman knew Trump was very overextended in the financing of the Taj.  Roffman had the audacity to write  that Atlantic City was an ugly and dreary place on March 20, 1990.  He certainly did not say anything disparaging about the Taj itself, but felt Trump couldn’t finance its debt during the winter months.     Obviously, for King Trump this was blasphemy of the highest order.  Roffman wrote in his WSJ piece:

When this property opens….he [Trump] will break every record in the book in April, June and July. But once the cold winds blow from October to February, it [the Taj] won’t make it…the market just isn’t there.

Trump was infuriated and demanded that Roffman apologize for the story or the investment firm should fire him.  The firm prepared a letter trying to make peace with Trump.  The apology letter wasn’t strong enough and Trump insisted Roffman revise it.  The original apology stated that Roffman had every  hope the Taj would be very successful, and the revision demanded by Trump was  he  had every  expectation  the Taj would be very successful.  This would have been seen to a positive recommendation and  encouraged people to buy bonds in the casino, contrary to what Roffman believed.

Instead of revising the letter, Roffman sent a personal letter to Trump retracting the previous apology.  To Trump,  the retraction was a declaration of war.  Trump responded to Roffman:

Only a fool, a highly unstable one at that, would send a letter such as your second one negating your original letter. You have proved by these strange and irrational actions to be a great liability to your firm,” he wrote to Roffman. “I look forward to seeing you and your firm in court.”

On March 23, 1990, Janney Montgomery Scott fired Roffman.   Roffman has done quite well since then.  In 1991, he sued his former employer and received a $750,000 judgment.  Roffman filed a defamation suit against Trump, and the suit was settled for 2 million dollars. He is a very wealthy investment adviser, who now can say he beat Trump.

Stay tuned,

Dave

Links:

New York Times:

Politico:

http://www.politico.com/magazine/story/2016/04/donald-trump-marvin-roffman-casino-lawsuit-213855

Minimum Mandatory Sentences

Can dedicated conservative Republican and liberal Democrats find common ground?

The answer is yes, and that is opposition to Attorney General Jeff Sessions’ memo, directing Federal prosecutors to pursue the most serious possible charges in all criminal cases regardless of the circumstances.  Research has shown that longer sentences in combating drug related crimes was ineffective, and more emphasis should be placed on rehabilitation. The announcement should have receive more notice, but the Russian probe was the headline story.

Sessions memo drew immediate opposition from  the ACLU,  Freedom Works,  Charles Koch (billionaire and strong conservative Republican),  Mike Lee, the conservative Republican senator from Utah and Rand Paul.   You just don’t see this unity often!

The timing of the release was a bit crazy. But it was not going to get as much attention given what else was going on.

I think Rand Paul’s comments are worth reading:

Session’s Sentencing Plan Would Ruin Lives

Stay tuned,

Dave

 

 

 

There will be no impeachment

I may end up eating my words (not the first time), but from what legal experts who really don’t like Trump (Jeff Toobin),  the actions of Trump don’t arise to the level of criminal activities.   Second, given the Republican control of both House and Senate,  the bar to impeach is going to be really  high.

A direct order to stop a criminal investigation would be obstruction of justice.  Trump apparently expressed the “hope” that Comey would not continue to investigate General Flynn connection to the Russians.   It is likely in  Trump’s opinion that the whole investigation is a lot to do with nothing.   Nobody knows what was said between Trump and Comey.   The Comey memo written to himself, is his version of events.  If an investigation is being impeded by President Trump,   I would think the Director would have the obligation to report it to the Department of Justice.

Second,  Trump has been accused of sharing top secret information to the Russians.   The source of this information is a White House insider.   According to Jeff Toobin,  the President is the final arbiter on what is classified or top secret information.  So, as crazy as it might seem,  Trump is in the clear.

Democrats should not be talking about what is or isn’t an impeachable action, because it just isn’t going to happen.

Stay tuned,

Dave

 

 

Trump’s Problems

It isn’t the media.  Every president has to deal with unfavorable commentary.  Obama had Fox News and a massive conservative radio and print media which hated him.

It isn’t leakers.    If the story inside the White House is very different from the public statements, this news gets out. People talk.

It isn’t the Democrats, now officially labeled the “obstructionists.”   They have the right to give an alternative viewpoint.   The give and take between Republicans and Democrats was necessary to pass many important laws.  This helps out government from being too liberal or conservative.

Trump’s scandals at the core are basically poor decisions.  Too much done spontaneously, because he believes he doesn’t need others.  And his ego is frightening.  It started with embarrassing comments made at the CIA Headquarters  on how big the crowd was at the inauguration,  then the disastrous travel ban leading to the firing of the Deputy Attorney General Sally Yates, then to the firing of Comey,  sharing to top secrets with the Russians and the General Flynn scandal.

Trump campaigned non-stop, smearing Hillary Clinton as a crook, for her mishandling of emails and the attack of the embassy in Benghazi.   Plus, everything one could find in the tabloid press.

And we are only about a third of the way of the first of four years. Kind of scary.

Stay tuned,

Dave

Thank you horrible, horrible people

All governments and businesses are inherently closed and dishonest organizations. This is not being negative, because  I’m not saying they are closed and dishonest all the time, in every aspect.  Just occasionally when something goes very wrong.   The public wants to know why VW manipulated their emission tests and how stupid the EPA could have been to accept these tests. Or how could  Wells Fargo opened up millions of fake accounts.   We want to know  the details of how VA  military  hospitals were able to cheated the system in reporting the time veterans had to wait for their urgent medical needs.  Or the IRS scandal where non=profit organizations  were systematically targeted if their  applications contained certain keywords, almost always related to conservative causes.  We want to know what was hit when the bombs dropped in Yemen missed their target under Trump.  Or when a Children’s hospital was bombed under Obama.    And we want to know how many times, Obama took vacations to go golfing.  Same with Trump.   And the same with the next president.

Another words, we want dirt.  It is our right.   Freedom of the press is how we keep our government and businesses honest.

Trump has been blasting  unfavorable media commentary to a new level.    Much of his problems stem from the way he portrays events.   The dishonesty of reasons behind Comey’s firing is a case in point, which I and others have covered enough. Commentary which blends the news with insight  is  either incredible, amazing, terrific or despicable, horrible, dishonest  or totally fake.   When the mother of all bombs was dropped on Afghanistan, CNN brought in a group of  military experts and  all were in full support of Trump’s action.  No problem with CNN.  But after Trump  said more had been done to defeat ISIS in Afghanistan in 8 weeks of his administration  than 8 years under Obama, one former military expert described that as a highly derogatory statement  to those serving in  armed forces.

He can’t be satisfied with his own accomplishments; he has to show he is better than Obama and Democrats.    His wild exaggerations are quickly picked up by dedicated  reporters.    Case in point, the Obama administration wiretapped the Trump towers.  Director Comey replied there is no evidence of this.   Should Comey have said, “No comment, it is under investigation” ? Would he have score some loyalty points?

Trump  stated in his latest interview with Judge Jeanine Pirro, that she is a fair and balanced reporter as she tossed a number of  softball questions at Trump.    I turned the channel at this point.  She is known for her non-stop rants against Hillary Clinton:

 Hillary, snap out of it,” Pirro said. “I’m tired of going through this with you. You’re a two-time loser who lost because you were a lousy candidate, you didn’t have a message, you lied every time you opened your mouth; you didn’t know what states to campaign in, you put our national security at risk with your amateur email setup, you were in a foundation that was nothing more than an organized criminal enterprise parading as a charity, four men died under your watch as you lied about a video, and there [were] a billion dollars missing from the State Department when you left. And I could go on and on, but I just don’t have the time. So, stop with the poor me nonsense. We’ve had it with you Clintons always claiming victimhood. The two of you haven’t followed the rules since the day you both showed up in your bell bottoms in Arkansas.”

Imagine if she said the same words to Trump, “You lied every time you opened your mouth,” Wow, end of interview, I sure. I watch Fox News for the news segments, not the commentary. I would not watch her show as too much tabloid gossip (Hillary steals a billion from the State Department).   Gee,  wouldn’t you think there would be an investigation?

Reporters are not going to get the straight story from government and inside information is fundamental to full reporting.    Piecing together the truth requires getting facts from people on the inside.   Leaking was given high praise by candidate Trump, and now widely condemned by President Trump.  Every person he fires from government can talk freely about their experiences.

Keep up the good work you horrible, horrible reporters from the mainstream media.    America needs you, for this president and all future presidents.

Stay tuned,

Dave

 

Day 3 after Comey’s Firing

Trump’s very short notice on the firing, left many thinking the Sessions/ Rosenstein letters from the Dept of Justice was the pretense, rather than the reason for Comey’s firing.

The leaks from the White House are taken far more seriously than Trump’s notice, because they make sense.  Comey wasn’t political.  He was excessively truthful, experienced  and articulate.  These were not redeeming qualities in the mind of the President.

Why are the two letters from the Department of Justice considerable laughable?   Deputy Attorney General Rosenstein’s letter states two reasons for firing Comey all stemming from his July 5, 2016 press conference.  First was that he usurped his authority by the public announcement clearing Clinton of criminal wrongdoing.   Didn’t stop Trump,  fellow Republicans in Congress, and a half dozen commentators on Fox News from slamming Clinton and calling her a crook for the next 5 months.  In fact, Trump was attacking AG Loretta Lynch for her meeting with Bill Clinton on her plane.  Trump  wanted   to show the American people, that both the FBI and  DOJ could not be trusted for a fair evaluation of the Clinton investigation.

Rosenstein did not say that Comey broke any rule or law, only a tradition not to comment on cases until there is a review by the Justice Department.  Comey told the Senate Committee that he decided to come public after there were very unique circumstances. His decision was  related to  concern for the public’s perception of the DOJ’s impartiality.

That public perception of FBI/DOJ  cover up  was created and promoted by  Trump, and many Republicans in Congress.   Many in Congress were calling for an independent Special Investigator which would delay the conclusions of the investigation for months.  FBI/DOJ cover up  went in high gear on June 30, 2016  with the chance meeting between Lynch and Bill Clinton, on a Lynch’s private plane.  Trump accused AG Loretta Lynch of lying when she said they just talked about golf, grandchildren and other pleasantries.  He said it was BS and it was really about the email investigation.

Clinton/ Lynch Chance Meeting /  CNN  Comments

 

Now,  the second of Rosenstein’s reasons is really an over the top, piece of absurdity, only a lawyer could make.   He attacks  Comey’s derogatory comments about Hillary Clinton.  Under a normal environment, the FBI must be very careful of what is said.    However, this was hardly a normal environment, as the public was being informed every time they turned on television, that Hillary was either completely innocent or totally guilty of criminal activity.

It was great to have the FBI Director Comey at the end of his investigation to publically state to the public what exactly the FBI had discovered and had not discovered.   To do less, would have been concealment of facts to the public.  Either Clinton or Trump was going to be President, and had Comey delayed what had been finally concluded, even for one day,  would have given the public the impression of a cover up.

Of course, the real benefactor of Attorney’s derogatory  comment, was candidate Trump, who for the next six months would lamblast Clinton for her extremely reckless handling of the emails.  It is laughable that Trump would fire an FBI Directory, who at least in this aspect, helped him immensely become elected.

Comey had two messages for the American public in July 5, 2016.  The first was that Clinton was wrong in setting up an independent server for her email, and second, this activity was not at the level  of wrong doing that would be considered criminal.   The Department of Justice could have overruled Comey’s conclusion.  In fact, the DOJ has the FBI file, and they could always press charges.

So, forget this Sessions/ Rosenstein letter.    Trump never made much of it.    Comey was too straight forward, too honest, too articulate and too accurate.  No marketing skills whatsoever.  That’s what I liked about Comey.

Now,  Trump is searching for that one individual with less integrity, and more loyalty, and will still be approved by the Senate as Director of the FBI.  Good luck!

The firing  was, and still is about the Russian investigation.

Stay tuned,

Dave

 

 

 

 

I Like Comey

Trump’s story doesn’t wash.   This isn’t about anything that happened in 2016.   It is the Russian  investigation and Trump’s involvement.  I’m pretty mad.

To get himself cleared,  Trump is likely going to put a patsy  in charge of the FBI.. Heard yesterday from the White House,  “Hey Kellyanne, you know anything about law enforcement.  I think I’ve got an opening.”

I am hoping the American voters finds this firing as offensive as I do.

You can search my prior blog on James Comey.

Stay tuned,

Dave

Links:

Official letters from the White House