The president sees paying other countries for goods and then receiving those goods as a sucker's deal and granting him the power to make unilateral decisions on U.S. trade has roiled the markets over the last few months.  Seeking some serenity with the dealmaker-in-chief upending decades-long understandings and agreements, Wall Street has found its zen in a truism: Trump will always back down before anything too horrible happens. 

This maxim has been abbreviated to TACO, which stands for Trump Always Chickens Out. It's a market-oriented spin on the Zoomer-beloved "Nothing ever happens" meme and one that Trump was blissfully unaware of before Wednesday. While taking questions from reporters, Trump was pressed on the idea that all his monetary sabre-rattling leads to nothing.

Trump to a reporter who asked him about his tariff waffling: "Don't ever say what you said. That's a nasty question." pic.twitter.com/ryL67WkSLa

— Aaron Rupar (@atrupar) May 28, 2025

Trump took offense at the term, calling the question "nasty" and saying he's merely working through the art of the deal. Where others might see Trump balking from his initial global tariff regime, the president said he's merely coming in with a strong starting position and working toward something more realistic. 

“I’ve never heard that. You mean because I reduced China from 145 percent that I set down to 100, and then down to another number, and I said you have to open up your whole country?” Trump said. "You call that chickening out?" 

"It's called negotiation, you set a number," he continued. "I set a ridiculous high number, and I go down a little bit."

Trump went on to say that the U.S. was a "dead country" before his tariff scheme, pushing the idea that former President Joe Biden was getting ripped off by the country's long-standing trade deficit. 

The president has repeatedly pushed back the implementation date of his planned tariffs on important trading partners, citing trade deals in the works that rarely seem to materialize. Still, he bristled at the idea that he would ever back down from his stated goals. 

"Don't ever say what you said," he admonished reporters.

The post “You call that chickening out?”: Trump bristles at Wall Street’s TACO talk over tariffs appeared first on Salon.com.

Fifty-seven countries and the rest of the world had waited, and Trump caved, a grand total of seven days after stock markets around the world crashed and the dread “R” word, recession, began being uttered by cable news hosts and hitting newspaper headlines.  

It took only 30 more days for Trump to cave on his China tariffs. On Monday morning, Treasury Secretary Scott Bessent announced that the U.S. and China would be suspending the reciprocal tariffs of 125 percent the two nations had imposed on one another. The original 10 percent U.S. tariff would remain, with China maintaining its 10 percent tariff that had been imposed in answer to Trump’s “Liberation Day” tariff.  The U.S. is maintaining some kind of 20 percent “fentanyl” tariff on China, but that one is likely not long for this world, either.

What happened in the intervening month? China just waited. Reports of empty shipping berths at ports all along the West Coast began appearing. Talk of “empty shelves” started to hit the airwaves. Trump, pressed on what kind of Christmas American kids were going to have with all shipping from China at a standstill, began babbling about girls having to settle for “two” dolls rather than “thirty,” and “five” pencils instead of “250.”  Where the hell he came up with dolls and pencils and those specific numbers was never explained.

Over in China, in Xi Jinping’s office, no explanation was necessary. Trump was panicking. So Xi and his trade representatives sat by the phone. Last week, it rang. Who knows what Trump’s trade representative said, but it had to be some version of “can we talk, please?” 

I’ll give you two guesses who had the upper hand in Geneva.  I take that back:  one guess.  The answer should give you a hint why it took only two days for an agreement to be reached.  Let’s allow U.S. Trade Representative Jamieson Greer to explain: “It’s important to understand how quickly we were able to come to an agreement, which reflects that perhaps the differences were not so large as maybe thought,” he explained on Monday. 

Differences? There weren’t any differences before Donald Trump decided it was time to accuse China of “ripping us off” again. He used the same charge the first time he was in the Oval Office. China was ripping us off, so Trump made a new “deal” with them, which of course he later accused Joe Biden of screwing up. Let’s just listen to master-negotiator Trump describe what happened back then. “We had a deal where they opened up their country to trade with the United States, and they took that away at the last moment," Trump told reporters at the White House on Monday.

Just a brief note: China “opened up their country” to trade with the U.S., signing a bi-lateral trade deal in 1979, and trade has remained open since then.

“And then I canceled the whole thing,” Trump claimed, apparently forgetting that he had just accused China of canceling the deal “at the last moment.” He continued: “And then six months later, we ended up doing a smaller deal. But it was a big deal. It was $50 billion worth of product that they were going to purchase from our farmers, etc, and we agreed to that."

Trump wasn’t finished explaining the big trade deal he did in his first term:

People thought it was 15 because they were doing 15. We made it 50 because I misunderstood the 15. I thought they said — I said, you got to get 50 because when I asked — if you remember the story — when I asked, what are we doing with them? My secretary of agriculture at the time, Sonny Perdue, said, uh, sir, it's about $15 billion and we're asking for 15. And I thought he said 50. So, I said — so they came back with the deal at 15 and I said, no way, I want 50 because you said 50. They said, sir, we didn't say that. Anyway. Bottom line, I said, go back and ask for 50. And they gave us 50, and they were honoring the deal, and we would call them up a lot for the corn and for the wheat and for everything.

Do you see why Xi Jinping just sat in his office for 30 days and waited? He knew exactly who was on the other end of the negotiation, who had told one of his flunkies to call up and ask for a meeting in Geneva. He didn’t have to do anything more than wait.

Waiting will get you a lot when you’re dealing with Donald Trump. Just ask Vladimir Putin. Trump flapped his jaws for months on the campaign trail saying he would end the war in Ukraine on “day one.” Near the end of the campaign, he started saying he would end it before he was inaugurated. 

More than 10,000 Ukrainian civilians have been killed by Russian airstrikes, missiles and drone attacks over the last three years. On April 24, Russia launched an 11-hour missile attack on Kyiv, killing 12 people and wounding 90. After the attack, Trump declared himself “not happy” with the Russian assault on Kyiv. He was sufficiently disturbed that he went on Truth Social and posted, “Not necessary, and very bad timing. Vladimir, STOP!” Trump wrote on his Truth Social media platform, adding “Lets get the Peace Deal DONE!”

On Sunday, Russia answered that plea by sending more than 100 drones into Ukraine in a nighttime attack after rejecting calls for an unconditional 30-day ceasefire from Ukraine and members of the European Union.

Trump has not responded to Putin’s latest attack on Ukraine, but last week, Trump told a gathering of top donors at Mar-a-Lago that his attempts to end the war in Ukraine were “keeping him up at night,” according to a report in the Wall Street Journal. Trump said the problem he had with Putin was that he wants “the whole thing.”  The Journal reported that Trump was referring to Putin’s ambition to take all of Ukraine with his war.

Trump has admitted to having spoken to Putin on the phone several times since being elected last year.  Putin launched his war in February of 2022. The war has passed its third year since Trump took office in January. Putin’s forces have continued to make small gains in Eastern Ukraine and have pushed Ukrainian forces into a tiny defensive perimeter in the Kursk region of Russia, which Ukraine invaded and has occupied for months.  The war has turned into a bloody stalemate. Both sides have suffered a steady drumbeat of casualties with neither side making decisive gains against the other.

Trump’s efforts to broker a peace in Gaza have failed to produce movement as well. After telling the world that the U.S. would take over Gaza and turn it into a kind of Mar-a-Lago on the Mediterranean, last week, it was reported that Trump is frustrated with Israeli Prime Minister Benjamin Netanyahu. Trump began a four-day trip to the Middle East on Monday with no plans for a stop in Israel, which has been read as a signal of Trump’s displeasure with Netanyahu. Netanyahu has been waiting Trump out. So Hamas has taken to talking directly with the U.S., brokering the release of the last living American hostage on Monday in a deal that “largely circumvented the Israeli government,” according to the New York Times. But there is still no deal, as Israel announces a plan to take to Gaza with bulldozers, flattening the place even more than they had with bombing, while food aid to the war ravished region remains blocked.

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Trump has not even had luck with his campaign against the Houthis. Last week, he kinda-sorta declared victory, announcing that the U.S. was stopping its bombing of the Houthis because they had agreed to stop attacking U.S. warships in the Red Sea. Trump had declared at the start of his campaign against the Houthis that they would be “annihilated.” The Houthis knew better. They waited him out.

The Trump bombing campaign cost more than $1 billion. All the Houthis did was dig their weapons emplacements deeper into hills and mountainsides and wait for pauses in U.S. bombardment. Then they continued their attacks. It was reported last week that the U.S. had expended so much expensive munitions that senior American military commanders feared it was cutting into their munitions stockpiles intended for potential conflicts in Asia.

The Houthis fired one of their missiles at Israel on Friday, despite the putative ceasefire announced by Trump.  The U.S. lost two F-18 Super Hornet fighter jets of the type used to attack Houthi positions in Yemen, not to enemy fire, but because they accidentally slipped off an aircraft carrier. The F-18 jets cost $67 million each.

The Houthis, supported largely by Iran, just sat waiting in their fortified bunkers watching as “Signalgate” unfolded, exposing the use of an insecure communications app to discuss one of the top-secret F-18 attacks.  Not long afterwards, Trump declared victory and let the Houthis off. They were too expensive, and they took too long for the impatient American president. He wanted the Houthis taken care of in 30 days. It didn’t work. They outlasted the Prince of Impatience, and he moved on. 

After all, Ukraine, and Gaza, and the dregs of his trade war with China and the rest of the world await.

The post The art of spoiling Trump’s deal: Sit back and wait appeared first on Salon.com.

The S&P 500 ended the week with a loss of 9.1% after it fell again on Friday. It was the sharpest weekly drop since March 2020, The New York Times reported.

Investors had already pulled $25 billion out of the market in the two weeks before Trump announced the tariffs on Wednesday, according to The Times.

Financial experts typically advise patience amid the turbulence. The S&P 500 has recovered from previous downturns, including after the Great Depression, the dot-com bust and COVID, The Associated Press reported. 

No one knows how long it could take the market to recover this time, but experts recommend investors begin thinking about how to reduce risk by diversifying their portfolios.

"It's hard to roll with the punches when some days you feel like your portfolio is getting pummeled," Brian Jacobson, chief economist at Annex Wealth Management, told The Associated Press. "But those moments should pass. A diversified strategy that is thoughtfully adapting to changing circumstances can't prevent the punches, but it can soften the blows."

Older investors or retirees often can't afford to wait on a long recovery. They may need to consider reducing their spending or moving cash into more stable investments like money market funds and short-term Treasury securities, The New York Times reported. 

But a strategy of bailing out now and jumping back in when things improve isn't wise, experts said. And this sudden drop may be the worst time for investors to follow their impulses, they said.

“It is dangerous for you — unless you can read what is going to happen next in the political world, in the economic world — to make a decision,” Meir Statman, a professor of finance at Santa Clara University, told CNBC. 

The post Think before bailing out of the stock market, experts say appeared first on Salon.com.

Josephs, 29, a serial entrepreneur who has been trading stocks since he was 17 years old, saw lawmakers in Congress investing in the market while voting on legislation that could benefit stocks.

"Initially, it seemed kind of funny," he said. "But once I started diving a little bit more into it, I started realizing .. they're making a lot of money on it."

The "Pelosi Tracker" account he created on X in 2022 went viral, gaining over a million followers. Named after former House Speaker Nancy Pelosi, the account shows trades made by her husband Paul, an investor who owns and operates Financial Leasing Services, Inc., a real estate and venture capital firm. Pelosi's spokesman has said she doesn't own any stocks and isn't involved in her husband's portfolio. 

The stated goal of the account — "to get [politicians] banned from trading" — hasn't worked so far. Trading individual stocks is legal for members of Congress, and it's difficult to prove they're trading on insider information, which is illegal. 

So Josephs has taken an "If you can't beat 'em, join 'em" approach. In January 2023, he and his team developed Autopilot, an investment app that allows users to track and mimic the trades of notable politicians and high-profile investors. 

“What we have now is creators and other financial professionals can go and launch their own portfolios on Autopilot,” Josephs said. “So Autopilot is now becoming a marketplace to go in and have their money managed.“

How does it work?

After downloading the Autopilot app, users can select and follow a number of portfolios, including those of congressional lawmakers, hedge fund managers and other financial influencers. 

The app links users to their brokerages and allows them to choose an amount to invest. Once the portfolio trade activity of the accounts they're following is made public, their brokerage will update to reflect some of the same holdings, according to Autopilot's website. "When they buy, you buy; when they sell, you sell," according to the website. The app has a $99 annual subscription fee.

One of the strongest performers on Autopilot is a portfolio called "Inverse Cramer." It bets against TV personality Jim Cramer’s picks and is up 46% in the past year, followed by the "Pelosi Tracker," up 42% for the year. The "Burry Tracker," which follows the trades of Michael Burry, the hedge fund manager who famously foresaw the 2008 financial crisis, is up 49% for the year.

The reviews are in

Opinions are mixed on Reddit, with some users saying they've made gains by following and replicating the "Pelosi Tracker." Other users said they had no luck after six months. 

Because the app relies heavily on public disclosures, trade activity could be delayed. Members of Congress have 45 days to report trades made by them or their families, creating a lag time that could affect outcomes. 

And while the political portfolios are eye-catching, they are "strictly for entertainment purposes and should not be considered investment advice," according to a review by Spartan Trading, a Canadian-based online consultant. 

Pelosi is far from the only member of Congress associated with stock market trading. A 2024 review of the portfolios of 34 Republican and Democratic members puts her (or her husband) at the bottom of the top 10.

Josephs said he thinks the publicity will make politicians more cautious, but not everyone agrees. Mark Hays, senior policy analyst at Americans for Financial Reform, said the laws that restrict them from capitalizing on insider policy information are already in place, although "they may need to be strengthened."

"With that in mind, I worry creating a tool to track politician's stock trades for investment purposes is at best opportunistic, and at worst, cynical — doubling down on the speculative, zero-sum gamification of both finance and politics that seems to have infected every corner," Hays said.

Even if they are eventually banned from trading, Autopilot has a broader vision, Josephs said. It will probably look like other robo-advisers and social investing apps like eToro that allow people to follow different investors and mimic their trades, Josephs said. 

“In 2027 the way that the product would look ideally is people come in and they put some of their money around Inverse Cramer’s, alongside some of their favorite creators,” he said. “But they also have a bulk of their retirement, their real money, not following these fancy Pelosi portfolios but connected with trusted and transparent, actual professional, certified money managers.”

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Making money moves can have major impacts. Some are easier than others — buying groceries and paying your bills seem like a given. But what about thinking about your future self, now?

Methodical, logical, long-term investing might feel scary, but you might already be doing it. Regardless of your risk level, here’s where you can start investing so you’re not scared of it anymore.

For the very scared: savings

If you need a place to put extra cash and you don’t want to chance losing it, take a no-risk option with a savings account, like a Certificate of Deposit (CD) or a high-yield savings account (HYSA). 

A CD is a type of savings account where you put in a lump sum of cash for a set amount of time without touching it and lock in a set interest rate. Most banks or credit unions charge an early withdrawal fee if you take money out before your terms are up. Terms vary by institution, but some are as short as three months and some as long as five years. If you lock in a high interest rate, that rate is good for the whole term, regardless of market conditions.

A savings account gives you access to your money whenever you’d like, earning regular interest on that savings. Many banks offer traditional savings accounts, while some offer HYSAs. Higher yields mean earning more interest and you’ll have access to it when you need it. But with variable interest rates, you risk a drop in earnings if those rates dip.

Savings accounts up to $250,000 are FDIC-insured or NCUA-insured (if you have an account at a credit union), which means if the institution declares bankruptcy, you get your money back up to that amount. If you have more than that to invest, consider opening many savings accounts to cover the full amount.

For the ultra newbie: exchange-traded funds

When you’re new to investing, putting money into something with the expectation that you may not get something back feels a little scary. Kevin Matthews II, founder of BuildingBread, a wealth education company, is also a former financial adviser. Money is personal, and it’s important to figure out your investing goals both now and in the long run. 

“How long [do you] plan on investing this way?” he said. “Is this for retirement or something just to get started? For someone with a basic understanding of the stock market, an ETF that tracks the S&P 500 can be a decent place to start.”

ETFs are exchange-traded funds, or an investment fund that holds a bunch of securities that can be bought and sold on an exchange like the S&P 500. Because ETFs hold multiple assets, they are low-risk investments and instantly diversify your portfolio. Depending on your investment setup, you can buy them through traditional brokerages or robo-advisers.

“Between 1980 and 2024, we have only had 10 years with negative returns,” Matthews said. “It doesn't guarantee the future, but it might help ease someone's fear.”

There’s a chance you’re already investing

You might be investing right now without even realizing it. 

“There are a lot of people who contribute to their 401(k) at work but don't consider themselves investors, but they are,” Matthews said.

According to the Bureau of Labor Statistics, nearly 3 in 4 Americans had access to retirement benefits as of 2023, and 56% participated in those plans.

Employer-sponsored retirement plans can take many different forms, such as a 401(k), 403(b) or profit-sharing plan. They all have differences, but they usually involve taxes and payout options. Many of these plans allow company workers to tailor investments to individual preferences. 

If you aren’t participating in your company’s plan, you might miss out on a company match. This is when your employer contributes to your retirement plan up to a certain amount, which is essentially free money for your future. That’s extra money to put toward your investments. Don’t be afraid to ask if you are unsure what your company offers. It’s better late than never.

“You can expand your knowledge and habits by adding one short 10-15 minute podcast or YouTube video to your regular social media diet during the day,” Matthews said. “Just like compounding interest, your knowledge and skills will build up.”

Recognize red flags

Rather than jump into the deep end, take your time by walking down the steps in the shallow end. Make sure you can hold your breath underwater before moving into more complicated investments. 

“Avoid cryptocurrency if your risk-averse history has shown that it might not be the best place for you at the moment,” Matthews said. He also recommends avoiding penny stocks — shares of small public companies that trade for less than $5 per share. They are often associated with startups and companies in niche markets. 

Some places are better for beginners than others, and not every investment type is right for every investor. 

Grow when you’re ready

If you’re unsure whether to take the next step, think about how far you’ve come. There was once a time when you didn’t feel like you could start investing, and now you’re here. It’s OK to work on your own time. 

The best way to know when you’re ready is to make sure your basics are covered, “like budgeting and having your emergency fund in a good place,” Matthews said. “After that, it's just a matter of personal comfort and confidence.”

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Agreements were reached with Mexico and Canada to pause a 25% tariff for one month, as well as a 10% tariff on Canadian energy products, officials said. A 10% tariff on China was still in place. 

The dollar strengthened, oil prices rose and major stock indexes in the U.S. fell at the start of trading on Monday before the tariffs were delayed, The New York Times reported. Markets in Asia and Europe also fell.

The S&P 500 and Nasdaq regained some losses after Mexico's president, Claudia Sheinbaum, said the tariffs would be paused while border patrols are boosted. The peso and Canadian dollar also recovered.

Later on Monday, it was announced that tariffs on Canada would be delayed by 30 days so a border deal could be negotiated. Trump has said the three countries aren't doing enough to curtail undocumented immigrants and fentanyl coming into the U.S. 

Shares of companies in the auto, industrial, retail and beverage industries with international supply chains were hit particularly hard on Monday, CNBC reported. Silicon Valley chip company Nvidia, Apple and other major tech companies also fell, per The Times. 

"The uncertainty at this stage is tremendous — not only of how these eventual negotiations will play out, but worries about how this is only the tip of the iceberg and more tariffs are on the horizon," Yung-Yu Ma, chief investment strategist for BMO Wealth Management, told The Times.

Leaders in Canada and Mexico had said they planned to retaliate with tariffs on U.S. goods, raising the prospect of an all-out trade war that investors fear could cause rising inflation. China planned to file a complaint with the World Trade Organization over the tariffs and consider retaliatory action, The Times reported.

Economists say tariffs could lead to rising costs on a wide range of items the U.S. receives from the three nations: vehicles, gas, fruits and vegetables, computers, children's toys, household appliances and more. Companies that pay the tariffs often pass them on to consumers.

Trump has said he "can't guarantee" tariffs won't raise prices for Americans, and he doubled down on that sentiment on Sunday.

"WILL THERE BE SOME PAIN?" he posted on social media. "YES, MAYBE (AND MAYBE NOT!) BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID."

Trump told the BBC on Sunday that tariffs "will definitely happen with the European Union" … "pretty soon." Other nations threatened with tariffs in recent weeks include Russia, Denmark and Colombia.

The post Trump’s erratic tariffs are taking markets on a bumpy ride appeared first on Salon.com.

But the day after American Airlines Flight 5342 collided with a U.S. Army helicopter in Washington, D.C., killing all 67 people onboard, shares of the company were trading just 2.5% lower. The decline grew four days later, with shares trading 4.5% lower than the day before the crash.

Do deadly crashes hurt airlines, or are they too isolated to affect them financially? Analysts don't expect long-term consequences for American. They point to the most recent major U.S. air disaster, in 2009, when a plane operated by the regional airline Colgan Air crashed shortly after takeoff outside Buffalo, New York, killing 49 people onboard. 

"Similar to the Colgan (operating as United Express) crash on Feb. 12, 2009, we suspect there will not be a long-term impact on U.S. air travel demand and American shares," Savanthi Syth, an analyst at Raymond James, said, according to MarketWatch.

It remains to be seen whether the D.C. crash could add uncertainty to the weak outlook American Airlines has predicted for 2025. It forecast profit below Wall Street expectations due to higher costs stemming from labor contracts signed last year, Reuters reported. The outlook, released Jan. 23, caused shares of the company to tumble 9%, CNBC reported.

Following the crash, the company sought to reassure investors and passengers — a move that could relieve further pressure. 

"Nothing is more important than safety in our business,” CEO Robert Isom said in a statement. “It’s a responsibility that every American Airlines team member — and aviation professional — takes very seriously. American has thousands of flights in the air today, and more than ever, the professionalism that distinguishes our team on the ground and in the air is on display."

The financial cost of crashes

Data on the financial impacts of plane crashes on airlines isn’t widely available, mostly due to a steady reduction in accidents. Commercial air travel has been safer each decade since the 1970s, with the risk of fatality for the average passenger falling to 1 per 13.7 million boardings between 2018 and 2022. Also, airlines have sometimes kept financial details of crashes private, citing legal or privacy concerns. 

Even when accidents weren't as rare, U.S.-based airlines weren't likely to financially suffer. A study from 2004 that examined more than 783 accidents found that between 2% and 3% were "serious enough to cause financial pain."

The stock dip that American Airlines recorded on Thursday tracks with another study, this one in 2020, that examined the financial fallout from air disasters. The study, which analyzed 138 accidents involving U.S. airlines from 1962 through 2003, found the companies can expect their stock price to fall around 2.8% during the first full business day after a major crash. Airline stock prices can dip more dramatically "as the degree of fatality increases," a 2013 study in Economics Letters stated.

Airlines are more likely to be affected by insurance liabilities, the costs of repairing or replacing equipment and a loss of consumer confidence, according to the 2020 report.

They also face payments to victims’ families that can range between $2.4 million and $4.1 million per passenger, suggesting a total cost to insurers of between $700 million and nearly $1.3 billion, according to the Insurance Information Institute. 

In 2015, the airline Lufthansa reportedly set aside $300 million for liabilities following the Germanwings Airbus A320 crash that year, in which a co-pilot deliberately crashed in the French Alps, killing all 150 onboard. 

Since 2001, two regional airlines have shut down in the years following major crashes. They include Colgan Air, which closed three years after the 2009 crash in New York. Another was Comair, a regional airline whose Bombardier jet overran its runway during takeoff in Lexington, Kentucky, in 2006, killing 49 of the 50 people aboard.

But broader factors were at play in both closures. Their owners, Delta Air Lines and Continental Airlines, had been struggling financially before the crashes, with record-high fuel costs in 2005 and the 2007-8 recession slamming the industry. 

American Airlines seems to be on firmer financial footing. After losing $28 billion in the first year of the pandemic, the company reported revenues of $54 billion in 2024 — nearly $10 billion more than in 2019.

The company spent much of 2024 trying to reverse the fallout from a business travel sales strategy that pushed for direct bookings instead of travel agencies, CNBC reported. Its competitors, United and Delta, have issued rosier outlooks for 2025 after benefiting from improved pricing and strong winter demand. 

The post An American Airlines jet crashed, but the company’s stock didn’t appeared first on Salon.com.

Similarly, the practice of investing in the stock market has its own set of tried-and-true practices. Your portfolio should reflect your age and circumstances — you’ll take more risks when you’re younger because you have time to recover in a dip, but as you get older your investment mix should be weighted in more conservative products.

You might go up and down, but historically, folks who have stayed in the market have done leagues better than those who pulled their chips and walked away. They followed the established rules, and one of the most common investing regrets is pulling out in reaction to a downturn, which, when compounded among thousands of shareholders, causes the markets to spiral even more.

But unlike blackjack, global markets are affected by all kinds of forces — climate change, politics and policies and pandemics are a few. And now that there’s a wild card in the White House in the form of Donald Trump, plus the infinite hot takes of what’s going to happen to the markets, investors might be nervous enough to pull out altogether. It’s certainly understandable, but not a solid strategy.

When words don’t count, and when they do

"Everybody's got plenty of risk tolerance when the market is going up, and as soon as it goes down, people realize, oh, they don't have such a risk tolerance, after all," said Bankrate’s chief financial analyst, Greg McBride, who advised folks to be realistic about their goals and capacity for uncertainty when setting up investment accounts to avoid making panic-driven decisions during a boom-bust cycle.

"Whether you're sitting down with a human money manager or you're using a managed system, you've got to truly assess what your risk tolerance is," McBride said. "Ask yourself what would you do if the market fell 10%? Would you go run and hide under your bed, or would you buy more?”

McBride maintains that if you have a solid strategy in place, you’ll be fine. Stay strapped in and you’ll coast to safety eventually.

Monica Guerra, head of U.S. policy at Morgan Stanley Wealth Management, takes a more nuanced approach and looks to the political climate for clues as to what will affect markets in the short, medium and long-term. Trump likes AI, for example. "So if you're a stock picker, that would be something you would look at. It's those types of dynamics that are going to become clear, and that helps for a sweeter market," Guerra said. (Her comments came before AI stocks fell and bumped this week when investors learned of the inexpensive and less data-hungry DeepSeek AI assistant from China.)

Some investors will feel safer shifting to more fixed-income products, even though they’re facing smaller returns that more aggressive approaches would bring. U.S. Treasury bonds, for example, pay more when the interest rates are high. "They're the gold standard of safe-haven assets," Guerra said.

Guerra noted that a unified Congress means that debt-ceiling decisions are more likely to pass and bills will be paid on time — essentially keeping the country’s credit score high.

"This is not just a U.S. monetary and fiscal dynamic around interest rates, but it's also that from a global perspective, global investors are liking Treasury [bonds] because they can also get a little extra yield and the asset is still considered sound."

What makes it tricky is the current president makes promises that may or may not pan out depending on how he can actually wield his power. "From a market perspective, that means the first half of the year could be a little bumpy," Guerra said. "And where we do see the potential for a more positive, less bumpy, smoother ride is in the second half of the year, and that's because you're going to have more policy certainty."

"We're looking to Congress to see whether or not they can make good on Trump's policy promises. What does that mean from a market perspective?" Guerra said. She used the example of his "drill, baby, drill" rallying cry.

"On a relative basis, if you're looking at clean energy versus traditional energy, in my opinion, I think that clean energy actually is an outlier and it is likely to outperform traditional energy," she said. When Trump talks about producing more oil without a demand for it, that actually causes oil prices to fall. Nobody likes oversupply.

"People are expecting a continuation of symbolic and actual draconian policy around clean energy, but what they're not accounting for is that, for example, with the Inflation Reduction Act, 80% of that money has already been spent." She added that the concentration is in Trump-supporting red states where they’re expecting a boost to the economy and a slew of new, good jobs.

"We think that there's less of a willingness for the actual legislators to claw back that money. … Trump can say whatever he wants. Actions speak louder than words, at least from a Congressional perspective, so we don't expect significant fallback in funding," she said. One of Trump’s first executive orders was to freeze all remaining funding to the states under the Act.

Stay the course

It’s rare to find an investment professional who will tell you to cash out completely. "There wouldn't be an environment where we would do that," Guerra said.

McBride likens it to switching jockeys mid-race. "I would caution against massive overhauls based on short-term volatility," he said.

But using another vehicle to generate cash, such as a reverse mortgage that draws from the equity of your home, might make sense.

"That reverse mortgage might be a way to keep your hands off your portfolio for a few years, too," he said.

The post Stock market strategies for nervous investors appeared first on Salon.com.

The first bank to do so was Goldman Sachs, which exactly one month ago announced it was leaving the NZBA because their institution had supposedly “made significant progress in recent years on the firm's net zero goals and we look forward to making further progress.” They were swiftly followed by Wells Fargo, Citi, Bank of America and Morgan Stanley. Only JPMorgan remains among the Big Six U.S. banks.

The NZBA committed the Big Six banks to zero out greenhouse gas emissions by 2050. The overwhelming majority of scientists agree that climate change is caused by burning fossil fuels and other activities that emit greenhouse gases. When present in excessive quantities in the atmosphere, gases like methane and carbon dioxide trap heat, eventually leading to global heating, which in turns causes droughts and heat waves to become more frequent and more intense, sea levels to rise and hurricanes to become more extreme.

Despite the alarm of climate scientists, Reuters reports the Big Six banks are reacting to pressure from Republican politicians who oppose taking climate action on principle. They have argued that the NZBA could be in breach of antitrust laws if they reduced financing to fossil fuel companies. Instead, these same institutions may feel incentivized to move away from environmentally-friendly investment policies.

The banks publicly insist that they remain committed to their environmental goals. A Bank of America spokesperson said the financial institution would “continue to work with clients on this issue and meet their needs,” while Morgan Stanley said its “commitment to net-zero remains unchanged.”

Because large banks provide fossil fuel companies with the investments they need to do business, climate activists often point to large banks as main culprits in climate change. Speaking with Salon in June, the Sierra Club's Fossil-Free Finance senior campaign strategist Adèle Shraiman explained that “banks can play a key role in driving the climate crisis through their financing activities.”

She added, “Many of the world’s largest banks, including the top banks on Wall Street, lend billions of dollars to fossil fuel companies, enabling the buildout of the deadly and destructive industry that is most responsible for the greenhouse gas emissions causing climate change."

The post Wall Street bails on climate change coalition after Republican pressure appeared first on Salon.com.

To the average person, the SEC's policies may seem obscure or irrelevant. But even if you don't work in finance, the agency can have a significant impact on your life. 

Anyone who invests in securities such as stocks or bonds — the majority of Americans, especially when accounting for retirement investments — arguably benefits from the SEC's rules and enforcement. Born out of the Great Depression, the SEC's mission includes ensuring fair and orderly financial markets.

If companies try to manipulate investors with false information, for example, the SEC can put an end to this practice and punish bad actors. The SEC's mission also extends to areas such as facilitating capital formation by startups and other businesses — such as through initial public offerings (IPOs) — which ultimately can help create jobs and economic growth.

While opinions differ on how the SEC should regulate financial markets, in general most agree that having some level of regulation promotes investor and business confidence in the system. However, under the Trump administration, the scales could tilt toward lighter oversight.

"What you'd likely get with almost any kind of more conservative or Republican-leaning administration is less of a grip of regulation enforcement," said Jonathan E. Groth, partner at DGIM Law.

Initially, that could bring down costs and enable more widespread investment — especially for crypto and other digital assets. But in the long run, deregulation arguably increases risk throughout the financial system — such as what was seen leading up to the Great Recession — and leaves individuals more on their own to figure out what's a legitimate investment.

A crypto-friendly SEC

In early December, Trump tapped Paul Atkins for SEC chair to replace outgoing Biden nominee Gary Gensler. Atkins, an SEC commissioner under President George W. Bush's administration whose current roles include being co-chair of the Token Alliance, is expected to embrace more crypto-friendly practices as opposed to Gensler's emphasis on cracking down on crypto fraud. 

Crypto falls into sort of a gray area in terms of how the SEC can regulate it, as it's not a traditional security like stocks. It remains to be seen how friendly the SEC will be if Congress passes legislation that gives the agency clearer authority over these assets.

"Right now, with a lack of a stronger regulatory framework with respect to digital assets, really what you're relying on is a mishmash of rulings from U.S. district courts throughout the country," Groth said. "That opens a book for potentially conflicting rulings from different courts. And it's hard to kind of grasp what direction you can take."

The SEC could provide "a framework so that for businesses and groups that are trying to bring more tokens and more coins to the market, or are trying to allow for wider adoption and use of digital assets, it makes it easier for them to understand what's expected of them," Groth said.

This could bring confidence to these companies that if they're offering digital assets in compliance with a clear regulatory framework. "They're not going to be subject to enforcement actions or subject to lawsuits for potential fraud, which we see a lot of right now," he added.

That's not to say the SEC will stop prosecuting crypto scams like pump-and-dump schemes, but the number of enforcements might lower, in part because of regulatory clarity and rules that give more leeway to issuers. 

Any new regulatory framework will be likely to include some form of investor and consumer protection, but "as digital assets and cryptocurrencies proliferate under this administration, it's important to be smart. It's important to not just hitch your wagon to this train that's coming into the station without being as educated as you possibly can," Groth said.

Lighter disclosure

In addition to taking a more crypto-friendly stance, the SEC will also likely take a lighter approach to disclosure requirements for public companies, financial advisers and others that fall under the agency's purview.

"At minimum, I do think we're going to see a rollback on active rulemaking, in particular with respect to ESG (environmental, social and governance)-related issues," said Jennifer Lee, partner at Jenner & Block and a former assistant director in the SEC's Division of Enforcement.

In March 2024, for example, the SEC adopted rules that would require public companies to make climate-related disclosures, but these might not come to fruition. Well before Trump's reelection, the SEC issued a stay, meaning these rules were put on pause until further judicial review.

"I expect those to either be not enforced or rolled back entirely," Lee said.

Other areas like cybersecurity and artificial intelligence could also face less active rulemaking and enforcement than during the Biden administration. 

In some ways, lighter disclosure requirements could be free up time and money for corporate activities beyond compliance. For example, the SEC's climate disclosure rules are estimated to cost registrants $628 million per year.

For investors, however, not having standardized disclosures — such as how companies are addressing cybersecurity risks — makes it "harder to do an apples-to-apples comparison," Lee said.

Overall, public companies and others regulated by the SEC will likely have more leeway under Trump. A relaxed regulatory environment "can be very good for the market," Groth said. "People can see their portfolios grow more quickly and more substantially."

However, that can mean people are on their own to understand risks and ensure they're choosing reputable financial products and service providers. 

"That's not to say that they're stripping away all consumer protection efforts by any means, but naturally, a higher focus on free markets and relaxing regulation certainly means it's got to come at the cost of somewhere. And that generally will likely mean consumer protection measures," Groth said.

The post Under Trump, expect a crypto, corporate-friendly SEC — with costs appeared first on Salon.com.

Not counting the fundraising from candidate-affiliated PACs or joint-fundraising committees, Ballotpedia informs us that through May 2024 Joe Biden raised nearly $190,000,000 and Donald Trump a little over $120,000,000. According to Open Secrets, including the other sources of Biden fundraising, that total comes to $306,014,008. As for Trump, Open Secrets reports that his total comes to $243,952,385. By the time of the fall presidential election these numbers will in all likelihood exceed several billion dollars each.

More generally, political spending on federal elections has ballooned since 2000, whencongressional races spent a combined $2.9 billion. By 2020 that number had risen to $9.9 billion. Federal and state spending on the 2022 midterms were the most expensive in history, topping $16.7 billion to break the previous record of $13.7 billion. ASince the Supreme Court decided Citizens United v. Federal Election Commission in 2010 total super PAC spending has precipitously risen Barred from formally coordinating with candidates, and fueled by dark money donations from deep-pocketed contributors, these PACs informally act as surrogates.

Before Citizens, super PACs spent $63 million to influence federal elections in 2010. Afterwards, the number rose as follows: $345 million in 2014, $822 million in 2018, and $1.3 billion in 2022. 

As Paul Waldman, columnist for The American Prospect, has written globally about campaign finance systems:

Everyone must weigh two competing considerations. The first

         is the desire for elections that retain a reasonable amount of

         integrity, and are conducted in a manner that is, for lack of a

         better term, civilized. And the second is the principle of free

         speech, that a candidate for office should be able to say what he

         wants, as often as he wants, and spend as much as he wants doing

         it, even at the risk of corruption. In most other countries, they’ve 

         decided that the first consideration is more important. In the U.S.,

         [a Supreme Court conservative majority] decided that the second 

            consideration is the one that matters.

Nearly two-thirds of the donations to U.S. Senate candidates in the 2022 midterms came from out of state contributors, reflecting an intense political tribalism in which the control of Congress has usurped the priority of local issues. A Bloomberg News analysis of the Federal Election Committee showed that “Senate candidates got 64.8% of their donations from givers outside their home states from January 2021 through Sept. 30, 2022, up from 53.6% over the same period in the run-up to the 2018 midterms.” During the same period the House campaigns “saw outside money increase to 43.5% of their hauls, up from 36.8%.”

According to Waldman, the “100 largest donors” in the United States “collectively spent 60 percent more than every small donor” defined by those who gave $200 or less combined. Before Citizens, “small donors collectively outspent the 100 largest donors by a margin of more than three to one during the 2010 midterms.” By the 2022 federal midterms, billionaires had provided 15 percent of the funding.

Big money not only talks on television, where it facilitates falsehoods and misrepresentations, but it has also involved billion-dollar advertisement campaign efforts embracing highly targeted audiences and a nearly rule-free digital world employing “grainy black and white” portrayals of candidates with “edgy horror movie soundtracks.” When it came to telling truths, falsehoods, and disinformation during the 2022 midterm elections with respect to the issues of defunding the police and abortion, for example, both parties often omitted opposing candidates’ stated positions.

Republicans have used “a variety of dishonest tactics to create the inaccurate impression that the Democratic candidates they are targeting support defunding police.” This type of deception was made easier by the different meanings given to “defund the police.” Democrats are more about half-truths and distortions that have been misleading. “Many of the Democratic ads accurately describe their Republican targets’ strict anti-abortion positions. But some others employ slippery phrasing and the power of insinuation to promote the impression that certain Republican candidates have taken more aggressive anti-abortion stands than these candidates have.”

Possible Political Reforms Should Trump Lose

If we are to ever have unfettered free and fair elections not dependent primarily on money, money, and more money, then there are several constitutional and legislative reforms that are called for. These reforms include but are not limited to abolishing the Electoral College, amending the constitutional amendment process, expanding the number and establishing term limits for Supreme Court justices, and rejecting the decision of the 2010 Citizens United..

At the same time, we will need to pass federal and state laws to prohibit all private and corporate-funded elections and adopt some type of mandatory system of publicly-funded elections. 

By law these elections should last no longer than 90 days; Thirty to secure a party’s nomination and 60 for the general election. Around the democratic world, elections typically last between two weeks and five months. Unlike in the U.S. where they typically last between 12 and 18 months or longer as when Trump announced his 2024 candidacy in November of 2022.

Back then, the now-convicted criminal, announced earlier than any other candidate in history to stave off his forthcoming criminal indictments for election interference in 2016 and again in 2020. 

While that ploy failed, Trump has still been able to flip the narrative or invert reality. By falsely claiming that his indictments were all about the “deep state” or Joe Biden’s weaponization of justice to interfere with his running for president in 2024. These lies about our democratic institutions and the rule of law combined with campaign disinformation are at the heart of Trump’s third bid for the presidency. 

However, the day after Trump was criminally convicted on 34 felony counts by a jury of his peers for election interference in 2016, an ABC/IPSOS poll found that among voters who stated that they disliked both of the candidates, 67% said that Trump should withdraw his candidacy. 

Offsetting this good news is the bad news that post-conviction plutocrats are rallying behind Trump. This even smaller demographic cohort has an outsize role to play in the election outcomes. 

Most people refer to plutocrats as the super-rich or in this case as ultra-wealthy Republican donors like Shaun Maguire from Silicon Valley’s Sequoia Capital, Las Vegas casino owner Miriam Adelson, Pershing Square Capital Management hedge fund manager Bill Ackman, fracking pioneer and founder of Continental Resources Harold Hamm, and Blackstone Group CEO Steve Schwarzman.

Fortunately, Trump’s meeting with CEOs from the Business Roundtable last Thursday was a big bust. His disjointed and non-linear conversation promising tax cuts for the wealthy and corporations, more tariffs, and de-regulation was not well received. Nor was his disregard for bringing back more inflation based on these reckless policies in the context of a humming U.S. economy with a massive gross federal debt of $34 trillion.

Not forgetting that Trump’s previous tax cuts for the wealthy added an additional two trillion dollars to that deficit. The largest debt increase of any U.S. president in history.

These are among the reasons that  MSNBC opinion writer and editor Zeeshan Aleem has argued that the best way to keep the convicted felon from the Oval Office this coming January is for the Democrats to craft a better message, out-fundraise, out-organize, and out-mobilize the Republicans. Importantly, the Democrats' message needs to speak to the American people about “kitchen table” issues and to remind them how Biden has delivered and how he has a plan to continue with this agenda if re-elected. They also need to remind the American people not only about how the wannabe dictator under-delivered on his promises as president, but also how he has no plans whatsoever to do anything about improving the lives of ordinary people should he regain control of the White House. 

Last but not least of all, the reactionary nature of the Supreme Court majority buttressed by Trump’s three appointments who have been busy reverting backward and stripping individual rights from the American people should be underscored. As in both the 2023 striking down of the 2003 affirmative race-conscious college admissions programs and the overturning of women’s right to an abortion and reproductive freedom after nearly 50 years.

Should the insurrectionist be returned to the Oval Office in 2025, while the plutocrats are – and the CEOs from the Business Roundtable are probably not  – all in with Trump’s desire to establish an “imperial presidency” as well as his commitment to do many things that would be costly to our economy and destructive to our democratic society. 

These were summarized from Trump’s spring interviews with Time magazine, If He Wins, published April 30th in a Raw Story commentary by the editor of The Editorial Board, John Stoehr:

·  “build migrant detention camps and deploy the US military, both at the border and inland.”

·  “let red states monitor women’s pregnancies and prosecute those who violate abortion bans.”

·  “withhold funds appropriated by Congress.”

·  “fire a US Attorney who doesn’t carry out his order to prosecute someone.”

·  “[give] pardons for every one of his supporters accused of attacking the U.S. Capitol on Jan.    6, 2021, more than 800 of whom have pleaded guilty or been convicted by a jury."

·  “might not come to the aid of an attacked ally in Europe or Asia if he felt that country wasn’t paying enough for its own defense."

·  “gut the US civil service.”

·  “deploy the National Guard to American cities as he sees fit.”

·  “close the White House pandemic-preparedness office.”

·  “Staff his administration with acolytes who back his false assertion that the 2020 election was stolen.”

Unfortunately, overcoming the identity crises of Trump’s supporters rooted in their economic anxiety as well as in the racial and gender resentment of his voters who are primarily white, not college educated, evangelical and middle-class is exceedingly difficult. Also, because they ascribe to the false belief that the 2020 election was stolen and that Trump is a persecuted victim rather than a convicted felon. 

In a twisted way, it is like Trump represents the “red badge of courage” to his followers. Or as Salon’s Amanda Marcotte writes, “This is not really about convincing anyone” that Trump or his villainous allies “are innocent.” Rather, “it’s about celebrating their criminality” for being righteous outlaws or patriotic revolutionaries. 

Basically, we’re talking about justifying criminal means for obtaining political ends by using and abusing governmental power and by exploiting those allegedly forsaken “real” Americans. As a consequence, the Trumpian mindset makes it even harder to persuade Trumpists with factual realities as contrasted with fictional irrealities or distorted varieties of truth-telling. Nothing exemplifies this more than the mythical battle between the fictional Biden “crime family” versus Trump’s nonfictional criminal organization. To be more explicit, we are actually talking about a criminal enterprise and gangster politicians using as little violence and as much intimidation as necessary to accomplish their objectives.

For example, one month after the premiere of “The Apprentice,” a film about Trump in the 1980s, was well-received at the Cannes Film Festival, it is still seeking a distributor in the United States even though globally it is being viewed by audiences in Canada, Japan, Germany, France, and so on. This is because the Trump troops have been calling the film “pure fiction” and have been threatening to “file a lawsuit against any major studio or streaming service “to address the blatantly false assertions from these pretend filmmakers.”

As Michelle Goldberg has written in The New York Times, “the possibility that American audiences won’t be able to see” the film “isn’t just frustrating,” it also “suggests that Trump and his supporters have already intimidated some media companies, which seem to be pre-emptively capitulating to him.” This is just a preview of the kind of censorship that might come under a Trump regime.

Similarly, the National Review, without referring to any criminal behavior, has discussed those realities about how totally “unfit Trump is for office.” For example, Trump has been suffering from dementia according to numerous psychiatrists including Dr. Lance Dodes, a supervising analyst emeritus of the Boston Psychoanalytic Society and Institute and retired Harvard Medical School professor.  

 Sadly, for the most part, the mainstream media as well as Fox and Sinclair led by the Wall Street Journal have also been giving the former president a free pass on these issues as they prefer to dwell instead on the old age of a highly competent – whether you agree or not with his policies – President Biden.   

Boss Trump and his Criminal Enterprise Campaigning Against the Rule of Law

Trump’s pre-sentencing interview on June 10th with the New York probation department occurred “virtually from Mar-a-Lago, instead of in-person at the courthouse,” where he was accompanied by his defense attorney. It only lasted 30 minutes when it could have lasted a few hours. These highly irregular practices once again reflect the privileged treatment that Trump has received throughout his lifetime of lawlessness and unaccountability. And even now after becoming a convicted felon facing three other criminal indictments, he’s still being treated like a person who is above the law. Last Thursday, Trump came to the Capitol for the first time since January 6 to meet with Republican congresspeople who all bent the knee and kissed the ring or cheek of the Insurrectionist-in-chief.

All of this has been made worse because of our inadequate and flawed campaign laws. These have allowed Boss Trump’s fundraising to spend an estimated $100 million on his legal defenses. Otherwise, Trump may have had to drop out of the presidential race, admit to his ubiquitous lawlessness, cut several sentencing deals and plead guilty to many, if not, all of his criminal charges.

Instead, running for the 2024 presidency while delaying his criminal trials from coming to fruition before the fall election – with the duplicity of the Supreme Court and others like federal judge Aileen Cannon – has already trumped any kind of bargain-justice he would have received as a way of keeping his derriere out of prison. 

And if elected in 2024, not only would the first Criminal-in-Chief be able to skate on his remaining 44 federal felony counts, but there is also a good chance that the 47th president would find a way to escape accountability for his remaining 10 felony RICO counts, including that of criminal conspiracy to interfere with the Georgia presidential election in 2020. 

The current campaign laws and their lack of enforcement have also enabled the former president to expand the operation of the Trump Organization and its various criminal enterprises that now include the former Republican Party and the corrupt majority of the Supreme Court who are both eagerly obstructing and weaponizing justice on behalf of Trump’s organized criminality.

If this were not enough, the Trump team has also found a way to circumvent federal campaign laws. According to Marc Caputo writing for The Bulwark, Trump is outsourcing his ground game. The campaign will spend at least $100 million on it and will pay at least 3,000 canvassers to get out the vote. This will all “be financed with unlimited corporate dollars and untraceable dark money from political nonprofits that are otherwise off-limits to a federal campaign.”

Presently, the wannabe dictator and presumptive GOP nominee is running his third campaign for the nation’s most powerful office on a combination of imaginary stolen elections and “rigged” criminal indictments, judicial prosecutions, and jury convictions. Not to mention his tangible promises of vengeance and retribution against anyone or any entity that opposes him.

In a nutshell, the 2024 Trump campaign can be reduced to little more than the politics of revenge where “Republican elected officials, reactionary intellectuals, and rightwing activists demand retaliation – against the system, the Libs, the Left” and “the array of ‘Un-American’ forces they define as the enemy within.” All of which reflects the extent to which Trump has already normalized autocracy and subjugated the Republican Party to ritualistic control and humiliation.

What We Could Have for the Better, Keeping What We Already Have, or What We Could Have for the Worst 

Most, if not all, of the proposed legal changes mentioned so far in this essay seem like “pipe dreams” not because they are unreasonable or impractical but simply because they threaten the interests of powerful politicians on both sides of the political aisle. 

As Matt Lewis has explained in Filthy Rich Politicians, Americans could achieve political accountability from their elected leaders by way of common sense reforms. Unfortunately, many of the “ruling-class elites'' from both parties “have a vested interest in rejecting” these reforms because as the richer candidates get re-elected the richer they become and the longer they stay in office. 

And the longer they stay in the office the more powerful they become. One way to prevent this vicious cycle from recurring would be to establish congressional term limits in both the House and the Senate.

As I’ve argued in much greater depth in my second Trump book published two months ago,in combination these proposed legal changes and reforms would enable a new and improved multiculturally inclusive constitutional democracy directly representative of the majority of the American people.

Should Biden be re-elected this fall and without these necessary changes, then we will remain a hyperpartisan and polarized liberal democracy characterized by the old tyranny of a minority that most recently has been lawfully captured by a corrupt oligarchy courteous of Citizens United. On the other hand, should the former president and convicted felon armed with his puffed up criminal enterprise be returned to the White House, then we can expect efforts to establish a tyranny of an illiberal democracy at best or a tyranny of an authoritarian autocracy at worst. Either way, we are talking about the possibility of the United States becoming a criminal state not unlike Russia or Hungary notwithstanding America’s very large and robust political economy of capitalism.

The post Trump’s dark money gets darker: How campaign finance loopholes help his criminal cases appeared first on Salon.com.

Overwhelming scientific evidence suggests we are heading toward a future of more intensified extreme weather events like tropical storms, droughts, floods, wildfires and heat waves because of burning fossil fuels. Political figures and fossil fuel companies often take the spotlight for not doing enough to get us off this path. But O'Hanlon says there is another, often overlooked culprit behind these mechanisms: Wall Street.

"Banks continue to fund oil and gas development in the U.S. and around the world, even as it's crystal clear that these kind of projects are incompatible with a stable climate and a safe future," O'Hanlon, who works as Sunrise Movement's communications director, told Salon. "Essentially banks are betting against us stopping the climate crisis and our generation having a livable future."

Other activists who say Wall Street bears much of the burden for the current climate crisis argue that the finance industry threatens to accelerate our descent into an overheating world.

"It is certainly true that the banking and finance industry bear some of the blame for funding fossil fuel infrastructure," said Dr. Michael E. Mann, a professor of earth and environmental science at the University of Pennsylvania. "Some are now distancing themselves from fossil fuel investment, and they should get credit for that, while pressure needs to be placed on those that still fund new fossil fuel infrastructure, especially since we now know that stabilizing warming below catastrophic levels is incompatible with any additional fossil fuel infrastructure."

Adèle Shraiman understands the difficulty of opposing the fossil fuel industrial complex. She is the senior campaign strategist at the Sierra Club's Fossil-Free Finance campaign. The Sierra Club was founded in 1892 by conservationist John Muir and is one of the oldest and most successful environmentalist nonprofits in America. The organization has a long history of researching power structures that reinforce bad environmental practices, and Shraiman broke it down.

"Banks can play a key role in driving the climate crisis through their financing activities," Shraiman said. "Many of the world’s largest banks, including the top banks on Wall Street, lend billions of dollars to fossil fuel companies, enabling the buildout of the deadly and destructive industry that is most responsible for the greenhouse gas emissions causing climate change."

"The International Energy Agency, among numerous other globally recognized expert bodies, has repeatedly affirmed the need to end fossil fuel expansion in order to prevent catastrophic climate change," Shraiman continued. "Banks have a central role in reaching this goal by ending financing for companies expanding fossil fuel production and instead deploying financing toward renewable energy and other much-needed climate solutions." She recommended that consumers learn about their bank's own responsibility in climate change by visiting a website that exists for that purpose.

"The Banking on Climate Chaos report is the preeminent annual report tracking the fossil fuel financing of the world’s 60 largest banks, including financing for the most polluting sectors from coal mining to Arctic oil and gas," said Shraiman. "The most recent edition of the report found that in 2023 alone, these banks poured over $700 billion into fossil fuels."

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Salon reached out to six major American banks, including four — JPMorgan Chase, Citigroup Inc, Wells Fargo, and Bank of America — identified as being most responsible for causing climate change. Citigroup, Morgan Stanley and Goldman Sachs did not respond. Wells Fargo declined to comment, only sharing sources to its sustainability practices.

A spokesperson for J. P. Morgan said, “We provide financing across the energy sector: supporting energy security, helping clients accelerate their low carbon transitions and providing clean energy financing with a target of $1 trillion for climate action by the end of 2030."

And a spokesperson for Bank of America said, “We are supporting clients across the energy sector, to help drive the innovation taking place in both traditional energy and the clean energy sectors." After claiming that BloombergNEF shows their bank has "the highest clean energy supply financing ratio among U.S. peers," the spokesperson said the bank is "engaged with clients across the energy spectrum to help them with their energy transition goals.”

While these claims of eco-consciousness many seem sufficient, many activists and experts wrinkle their noses and characterize them as "greenwashing," a practice in which companies emphasize sustainable practices, but realistically it adds up to little more than marketing. It's not uncommon across industries, with everyone from chain restaurants to universities to even fossil fuel companies making "pledges" or highlighting recycling programs while doing little to nothing to stop emissions — far and away the main factor in global heating and climate change.

Dr. Richard Wolff, a University of Massachusetts Amherst professor of economics emeritus, told Salon that fossil fuel companies rely on bank loans to supplement their investments into risky projects, with producers similarly leveraging their capital by supplementing it with bank loans. Fossil fuel producers will also issue bonds that are then marketed by the banks for profit. These factors create a massive financial disincentive to actually solve our planetary crisis.

"Those banks seek safety of principle plus interest and are not interested in or wiling to forego either in the interest of dealing with the climate crisis," Wolff said. "If any bank did that it would suffer competitively because other banks did not follow suit. Since larger banks now compete globally, the problem is one of banks' general disinterest in anything that might damage their fossil fuel borrowers' capacities to service their loans, market their bond issues and so on. Now of course, if government were to tax banks' interest income from loans to fossil fuel producing borrowers, that would change the competitive equation. Banks might favor the tax exempt (because they are non-fossil fuel) borrowers much as banks now favor tax-exempt municipal borrowers."

Fortunately, ordinary citizens are not helpless in addressing this crisis. Dr. Peter Kalmus, a NASA climate scientist who emphasized to Salon he speaks only for himself, said that "these evil banks that are killing the planet are headquartered on Wall Street." As a result, various climate groups plan on organizing a campaign known as Summer of Heat to shed light on how these banks are providing fossil fuel companies with the financial lifeblood they need to continue overheating the planet. "The more people who join in the protests, the more we will get done! We're planning a protest party that should last for most of the summer."

Mann also said that, in general, stronger banking regulations are required.

"The federal reserve has a role in regulating climate exposure in investment practices," Mann said. "The current Fed chair Jerome Powell has commented on this recently."

"Banks need to understand, and appropriately manage, their material risks, including the financial risks of climate change," Powell wrote in October, but stopped short of telling banks whether or not financially backing oil companies is prudent. "It is not the Fed's role to tell banks which businesses they can and cannot lend to, and this guidance is not intended to do so."

Until banks start changing their tune, activists like O'Hanlon are going to criticize them as harshly as they criticize the other major players in the climate crisis.

"We are holding politicians and Big Oil accountable for the lives lost and homes destroyed by disasters," said O'Hanlon. "We want people around the country to understand that these are not natural disasters — they are climate disasters. And they are going to get worse if we don't take bold action. We want to send a message to politicians like Greg Abbott and Ron Desantis who are banning water breaks and the mere mention of climate change — if you continue to care more about pleasing your oil and gas donors than the lives of people in your state, you are gonna be out of a job." 

She urged the federal government to sue Big Oil and declare a climate emergency. Kalmus argued that, if these reforms are not implemented, something more radical may eventually come along.

"Short of a full revolution, the only thing that will get [fossil fuel companies] to stop are laws preventing the funding of new fossil fuel projects, or for these projects to no longer make financial sense," Kalmus said. "Protest, civil disobedience and even disruption of new fossil fuel infrastructure could make those projects harder to insure, more financially risky, and possibly lead to new laws that give preferential treatment to new solar and wind projects."

The post How Wall Street enables the fossil fuel companies cooking our planet appeared first on Salon.com.

The vanishing pachyderm in that metaphor is the question of what Donald Trump will do to American democracy if he again becomes president. It should be clear to everyone by now that he would like to govern as a fascist. If you’re a Wall Street strategist, however, you can’t mention his, uh, authoritarian tendencies, his attempted coup, his indictments or his encouragement of violence. Too many big-money clients, or potential clients, support Trump, so best not to go there. Your bosses would fire you if you did. 

So no one says a word. The silence is deafening. Strategists are happy to discuss Trump’s impact on trade and taxes, but not his potential effect on democracy. A Schwab strategy piece in March was headlined, “Don’t Bet Your Portfolio on Election Year Fears.” Ah, now I feel better. It’s all another sign, as Liz Cheney would say, that we may be “sleepwalking into dictatorship.”

I know: There’s something more than a little obscene in writing about the impact of Trump’s possible election victory on the stock market. There are more important things at stake here. 

Still, money matters. If Trump wins and people manage their money well through that disaster, we will have more left to fund the resistance. I’ve developed a strategy: Anticipating the possibility of a 50 percent stock market decline, I’ve been selling one percent of my stocks every week. I now have 21 percent in cash and, if the election remains a toss-up, I plan to have 50 percent in cash by Election Day. (All my selling is in retirement accounts and I’m earning 5 percent while I wait.)

Why should you care what I’m doing? I was a market-beating money manager for 15 years. Since retiring nine years ago, I’ve continued to beat the market. What I can’t do, however, is predict the economy or time the stock market. No one can do that.

So, I’m kind of an expert here — except that I’m not, since there is no historical record to analyze how American capitalism would fare under autocratic rule. Nonetheless, I have some guesses.

I’m trying hard not to base my investment decisions on my political passions. Historically, that’s a terrible idea. While the stock market has performed far better under Democratic presidents (even if you eliminate Herbert Hoover), it has also done fine under some Republicans — Dwight Eisenhower, Ronald Reagan and, yes, Trump. The market rises over time no matter who’s in charge. 

My financial worries about fascism are both general and specific. I fear that the warping or destruction of institutions (the actual, rather than fictional, “weaponization” of the Justice Department, the elimination or decimation of the FBI and other key government agencies) will startle slumbering domestic and international investors awake, causing them to reallocate assets to cheaper, and now perhaps safer, global markets. Imagine if the Trump administration, peeved that a major corporation refuses to pledge allegiance to the leader, enacts policies that slash the company’s profits. The company’s stock would crater, as would investor confidence. 

Then, with his known tendency for retribution, Trump targets another company, and then another. It’s easy to imagine him acting like Chinese President Xi Jinping, laying waste to the share price of any company that displeases him. (Xi single-handedly made the Chinese stock market into a global pariah, driving it down by 50 percent since May 2015, which ranks among  the worst-performing markets on the planet over that time.) Perhaps some foreign companies then complain about raised import duties, and they’ll be targeted as well. We might soon see a Night of the Long Knives, corporate-style.

Industrial policy could range from vengeful to capricious to corrupt. Some companies will run ad campaigns on Truth Social to get out of the corporate doghouse. That will be great for Trump’s bottom line, less so for America’s. 

Around the world, appalled observers may reconsider their next planned U.S. investment. How can they be sure it will work out? What unforeseen costs might there be? What if the president of the United States turns on them too?

I’m leaving out Trump’s terrifying trade policy declarations (the impact of a 60 percent tariff on Chinese goods, or more, could be dire for inflation and the global economy, and global trade wars tend not to comfort investors) and his general lack of competence in, well, everything. Granted, his desire to reduce corporate taxes further, from 21 to 15 percent, would likely buoy the market temporarily, although it would balloon the deficit.

Both the movement of money away from U.S. equities and the slowdown of direct investment in the U.S. economy could depress the stock market for years, even after Trump leaves office. If he leaves office, that is. 

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OK, but why not wait until after the election to start selling stocks? Because surprises happen. What if there is a hung jury in the New York hush money case, and it becomes clear that Jack Smith won’t have enough time to bring the Jan. 6 federal charges, let alone the Mar-a-Lago documents case? What if Joe Biden has a serious health setback? What if the economy tanks before November? All those things would be bullish for Trump — but what if investors decide that, despite what muzzled strategists aren’t saying, they really aren’t sanguine about the prospect of a second Trump administration?

Of course, Trump might win the election and things might work out OK anyway. (They did last time — I mean, at least for the stock market, if not for the human population.) His wished-for war on democracy could fizzle out. Then I’ll put my cash right back into the market. Be mindful of one important thing, however: The smart people who could have warned you about the risks ahead had a powerful economic incentive not to.

The post Could Donald Trump cause a market collapse? It might really happen appeared first on Salon.com.

As unanswered source calls mounted into the dozens, this is where my last-ditch effort to solve a missing supercomputer cold-case has taken me. Not stealth spelunking into a high-security lair with James-Bond aplomb, but packed into the back of a rickety Jeep-drawn tourist tram with about a dozen other visitors to the owner’s more well-known business — an underground amusement park known as the Mega Cavern.

The old quarry still contains tin-can rations from its days as a nuclear fallout bunker during the Cuban Missile Crisis, when the cavern had a 50,000-person capacity and a secret list of invitees that Colonel Sanders once boasted of being on. The cans are scattered about an ambulance from the Korean War (no one quite knows how it got there), along with fine bourbon and chocolate vaults, Hollywood film reels and industrial explosives that all enjoy the perpetual 58-degree climate. 

The calcium-dappled ceilings are lined with drone-racing tracks leftover from a 2017 Pentagon experiment, weaving through the blast-scarred rock face which glows neon green. Compressed remains of old cars and trash heaps have been lain smooth to make interior roadways. Families drive over them into a recurring summer maze of gigantic animatronic dinosaurs that roar into the vast dark of the tunnels, and into an annual labyrinth of psychedelic Christmas lights which goms up the neighborhood streets above with hours-long SUV traffic jams. Meanwhile, parent company Louisville Underground boasts year-round of having the world’s longest underground zipline (that incidentally killed one person, according to Jefferson County court records).

The whole thing is a Kentucky-fried fever dream inside a semi-hallucinatory roadside circus, brought to life by political strong-arming atop a post-industrial waste dump. But the real show goes on in the dark, where nameless companies churn a buzzy economy in the adjoining commercial spaces. Behind a gift shop strewn with old-timey mining decor, Louisville Underground’s fully-wired offices and storage docks are brimming with expensive vehicles, government records, document shredding services, and whatever else you might want to hide.

Maybe even a supercomputer.

The Mega Cavern's 17 miles of internal roadway allow vehicle access to temperature-controlled private storage units such as the one displayed above. (Photo by Rae Hodge)

A digital Fort Knox for cyber-9/11 

Bates Capitol Group was something of a McConnell alumni club back in the early aughts. The Republican senator’s former aides and even family members packed the lobbying firm’s bench, and the projects and petitions of its clients found easy purchase in the ears of Kentucky’s self-described Grim Reaper.

It was a time of tall cotton on Capitol Hill for lawmakers and nepo-lobbyists — and for journalists chasing paper trails between campaign cash and American power. If a senator was pushing a bill with budget earmarks to line his own pockets, the lobbying disclosure rules didn’t apply to his Congressional aides, nor those aides’ spouses. If you happened to be a chamber leader, it would have been an off-books gold rush.

By 2006, USA Today was calling out Congress for keeping it in the family; the paper counted 54 lobbyists who were relatives of members and aides, and found they’d helped write themselves $750 million worth of projects into their kinfolk’s appropriations bills. Without missing a beat, the Lexington Herald-Leader’s John Cheves dropped a bunker-busting report exposing the machinations of McConnell’s own family and friends at Bates Capitol.

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From 1999, it took E-Cavern president Mark Roy and executive James Philpolt three years of touring trade shows and lobbying Kentucky's Congressional delegation before the duo turned to lobbyist G. Hunter Bates — McConnell’s former chief legal counsel and chief of staff from 1997 to 2002. Shortly after a lawsuit ended Bates’ 2003 bid for lieutenant governor of Kentucky, the former McConnell staffer founded the firm and quickly became known as the man who could get things done in the Senate Minority Leader’s office.

The first archival snapshots for E-Cavern’s website show up in January 2002, with old versions suggesting that it and Louisville Underground were once synonymous.

E-Cavern was a prime client for Bates Capitol, arriving at the height of the data center construction boom in the US. And McConnell’s family and friends at the firm made bank. Holly Piper, wife of McConnell’s chief of staff Billy Piper, made $220,000 lobbying for E-Cavern in 2006 alone. McConnell’s spokesman at the time said his relationship to the Pipers had nothing to do with the senator’s decision to add $1.5 million in funding for E-Cavern to an appropriations bill. Bates himself also defended the deal.

"Working with members of Congress to achieve outcomes that are consistent with shared vision and values is not corrupt, but rather, is a critical part of the democratic process,” Bates said in 2006.

Within that deal, E-Cavern had a proposal: It would partner with the University of Kentucky (UK) and the University of Louisville to lease space from local owners — themselves, doing business as Louisville Underground, LLC — and allow the universities to conduct research into securing critical US infrastructure against a digital terrorist attack akin to a cyber-9/11.

High-profile shutdowns and hacks now plague the global digitally-driven economy and national infrastructure — annually causing billions of dollars of damage to public utilities, healthcare providers, education systems and state and local governments. E-Cavern’s setup would have been a strong foundation for long-term public research into preventing and protecting critical U.S. cybersecurity vulnerabilities and surveillance threats.

In the frenzied aftermath of then-recent terrorist attacks, officials were looking for a way to shore up defenses for the U.S. financial sector. A take-down of Wall Street systems was feared. And what better place to secure the nation's most valuable data than deep in the state where Fort Knox once held the nation's gold.

And that's exactly how McConnell pitched it.

“In a post September 11th world, it is critical that our financial institutions be secure,” McConnell said in a 2004 press release. “E-Cavern is ideally suited to protect critical data and communications facilities, and both the University of Louisville and the University of Kentucky have research expertise applicable to this field.”

Despite FEC records showing that the E-Cavern duo had never previously donated to McConnell, E-Cavern officials gave around $10,500 in cumulative campaign donations to McConnell-affiliated PACs and McConnell-supported Republicans from 2004 to 2006.

In 2007, Bates was the board of regents chair for Eastern Kentucky University. He was also a name highlighted alongside McConnell by the transparency watchdogs at Citizens for Responsibility and Ethics in Washington. The E-Cavern deal had landed McConnell a spot on the advocacy group’s list of the “22 most corrupt members of Congress.”

McConnell’s office didn’t respond to Salon’s request for comment.

By 2015, Bates Capitol would report charging E-Cavern about $460,000 in lobbying fees. But by 2008, E-Cavern would boast $4.8 million in federal funds, brought home across four years by McConnell and Bates.  

Ghost stories

For all its cultural and economic legacy as a place of extracted wealth, where captains of industry have bitten into the earth to carry off the riches of coal seams, Kentucky is also a state where things go to disappear. Bodies, money, records — with more than 765 miles of surveyed mile-plus cave passages, things go missing here all the time. And every so often, the hungry earth opens into a sinkhole, eating everything in sight and beckoning the unwary into a maze of shifting waters and wind tunnels.

There, gleaming gypsum flowers bloom from stone draperies laced with translucent cave pearls. The mineral cave decor — epsomite, mirabilite, sulfate — rusts into the ruddy orange of iron oxide, the deep black of manganese. Caves are as hypnotic as they are dangerous. The limestone belly of the state's under-bed has more mouths protruding from the topsoil than we’ve been able to count. And we’ve been counting them longer than we’ve been a state.

The karst lands are so embedded in our cultural sense of place, we’ve got our own map of chthonic legends. Explorers trapped in the howling dark or enslaved people escaping to freedom, secret weddings and occult rituals, stolen treasures and hungry monsters — the caves are settings that become amoral characters in our stories, guarding Kentucky from outsiders and the elements.

It's been said for generations that the outlaw Jesse James once woke up, pistols blazing, in a bedroom above Bardstown’s famed Talbot Tavern, firing a few bullets still lodged in the wall at one of its well-known ghosts before escaping arrest by slipping into a cave under the bar, emerging in the Lost River Cave, where Union soldiers and Confederate alike once made use of the tunnels.

In Louisville, Al Capone had a quick getaway into under-city caves through a secret door in the Seelbach Hotel. Rumor holds that the tunnels let him run prohibition-era liquor and dodge the feds. The whole joint is swarming with ghosts. And beneath Louisville’s former Lakeland Asylum for the Insane, a haunted cave system now blocked was a supposed escape route from the poorly-named facility.

From my seat in the rattling metal tram, I hear the Mega Cavern tour guide recount how political strong-arming ultimately won the cavern its commercial approval after a dramatic snowfall left workers homebound, shutting down United Parcel Service’s global hub. UPS employed about 50% of the city then. When it threatened to move, city officials panic-bought an unwieldy mountain of road salt with nowhere to store it.

It turned to Louisville Underground. The company had been angling for necessary city approval to expand commercial operations from a recycling heap to a business park. It cut the city a deal: The Mega Cavern would store the salt if the city would stamp the commercial paperwork. The salt is still down there today, along with more businesses than we know about.

In virtually limitless dark

With the Bates-McConnell success under their belt, E-Cavern plans rolled ahead. Design firm Arkatype laid out the 4,200-square-foot, high-density data center. In 2005, the Kentucky legislature dispersed $729,140 in treasury funds to UK for a 19-month cavern lease, with authorization recurring into 2009.

At $173.60 per square foot, the price raised eyebrows. Then-leasing agent for E-Cavern, Larry Williams, said the space needed costly improvements for the IBM equipment — like specially run internet lines. But by 2005, it was already hawking commercial leases, touting those specially run internet lines and its own power substation.

“E-Cavern provides the ideal space for businesses to locate their primary or backup data center with the security, reliability, performance and ease of use required in the 21st century. The site is able to withstand tornados, storms and even earthquakes,” the company said.

When the Department of the Interior charted E-Cavern’s property the company in 2006, it was "designing, building, and storing electronic data in a secure environment for the financial, government, business, and military sectors."

"The facility contained a state-of-the-art conference center, office space with full internet capability, and an underground cafe," per the U.S. Geological Survey report.

In 2012, sans universities, E-Cavern obtained non-expiring Defense Department authorization to contract with US and foreign governments. Roy dissolved E-Cavern in 2016, per Kentucky Secretary of State records, but the DOD authorization appears still active and E-Cavern is labeled a public-private company. If any government contracts exist beyond Louisville Underground’s current National Archives storage agreement, they’re nowhere near the surface.

Answers would be clearer if Mark Roy wanted to talk. He’s got a notary business I reached out to a few times, looking to confirm basic details and timelines. When I finally got an answer, he wouldn’t confirm whether the IBM tech was still in use, whether it was still underground, whether he was still involved in E-Cavern, or when (if?) the business shuttered.

Louisville Underground’s current co-owner, Jim Lowry, also declined to comment per the company’s press relations firm, Runswitch PR. The University of Kentucky’s School of Engineering did not respond to multiple requests for comment. Nor did IBM.

Visitors to the Mega Cavern are invited to drive their vehicles through a winding path of ornate holiday lighting displays, including this kaleidoscopic tunnel, during the park's of annual Lights Under Louisville event. (Photo by Rae Hodge)

An early grave for critical research 

It didn't take long for academic scrutiny to collapse the project’s initial wild-hair pitch of running 750 miles of cables under the Appalachian Mountains to Manhattan for near unimaginable amounts of New York Stock Exchange data. The idea even became an engineering lesson at Cornell University on the early difficulties of creating off-site storage for Wall Street’s data flood.

Other E-Cavern research came, though, on Smart City cybersecurity and public surveillance. As they’re often known to be, researchers at the University of Louisville’s School of Engineering were ahead of their time. Professor Adel Elmaghraby led some of the earliest work into what we know today as cyber-resilience.

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"We were talking about artificial intelligence way back then. We were talking about voice input-output," Elmaghraby said.

Research conducted under Elmaghraby — first published by the Army College of War in 2011 (and other government studies into 2017) — was a formative influence on military cybersecurity work.

"I don't think we had a fair chance to follow up, and the ideas were too novel,” he said of the cyber-resilience research. "We were maybe thinking too early, but we get hit by that a lot. And we're not bitter because we keep going and we keep generating new ideas.”

A public cyber-resilience research lab would come in handy today for a state struggling with outdated, underfunded IT infrastructure — particularly as the Biden Administration hastily recruits a cybersecurity corps for critical system resilience.

If only one could be found. 

A mysterious sinkhole

Louisville Underground co-owner Jim Lowry said that about 12 businesses occupied roughly 700,000 square feet of the cavern in 2015.

"Some of which I can tell you about, some of which don’t want to be known," Lowry told Louisville NPR affiliate station WFPL.

More interest in Lowry's business concerns came to light in 2019, when a sinkhole nearly the size of a football field opened up on the grounds of the Louisville Zoo just over the Mega Cavern. No animals or people were harmed, but the zoo’s costs ran into the millions as it closed for weeks of emergency work. 

Lowry sued in 2020, accusing the zoo of water drainage neglect, and claimed more than 100 million gallons had rushed underground. The county attorney defending the zoo shot back at Lowry, blaming excessive mining and his cavern expansion.

Small to moderate-sized sinkholes can and do happen in the city, but experts said sinkholes this big don’t just appear in Louisville. Kentucky Geological Survey Director Bill Haneberg, whose office mapped several in the area, told the Louisville Courier-Journal in 2020 he found the sheer size of the sinkhole unusual for the city. And that the local ground wasn’t meant for caverns this big. According to Mega Cavern, enough limestone was originally quarried out to rebuild all three pyramids of Giza.

The main cause of Louisville-area sinkholes is water drainage — a problem accelerated by too-rapid temperature changes and freeze-thaw cycles in the ground. 2019 kicked off with a surge of rainfall after the city saw nearly double its usual rainfall in 2018. 

“We definitely have a water issue,” Mega Cavern supervisor Alec Zaremba said in a 2015 interview. “We pump out about 50,000 gallons of water a day. We pump that back into those tributaries that they can either flow back down here or flow downstream and end up in the Ohio River.”

“It’s so wet down here in the summertime that we have to have fans on to blow air around, to keep air moving so that the cavern stays a little bit drier than it typically would,” he said.

If data centers occupy the caverns, any improper water management or heat discharge could quickly become an immediate risk to adjoined residential neighborhoods. Underground or above, most data center tech is aging poorly and needs constant heat-sinking with heavy water use. As climate change accelerates temperature extremes, data centers designed in the early aughts work harder to stay cool and thus generate more heat.

On the Mega Cavern tour, our guide lets us tram-riders know we’re now beneath the zoo’s wildcat and eagle exhibit, joking that any drips we feel from above may not be water.

She confirms there are now 78 businesses — compared to a dozen in 2015 — at the cavern’s address. That address is poised to expand as Louisville Underground has petitioned the city for another 1 million square feet.

What the earth keeps

The Talbot Tavern has since closed off its underworld entry, but Jesse James’ presence at his favorite haunt is still so routine only tourists seem shocked. And it’s still a rite of passage among Bardstown teens to see how far across the under-city you and your friends can get with your guttering Bic lighters and your courage.

This time of year, you can also book tours of the Seelbach’s haunted vaults, and hunt for Lakeland Asylum spirits. After weeks of calls, emails and shoe leather, the supercomputer is becoming a legend too.

There’s been no answer — not from from IBM, McConnell, Roy, Lowry, nor University of Kentucky — about what happened to the publicly funded tech lab under the zoo. If any of them respond, we’ll let you know. But for now, $4.5 million in federal supercomputing research power seems to have vanished into the cavern. Even Elmaghraby doesn't know for certain where all that equipment went.

"Regardless, they will be obsolete, you know. Technology becomes obsolete anyway. The value of the computers becomes zero after about five years anyway. So I'm not as worried about where the computer went," he said.

I passed the Bic test long ago and have gone soggy-sneakered into plenty of Kentucky’s dark. Down in the man-made Mega Cavern, the scariest things one risks encountering aren’t ghoulish haints but possible money laundering, government data lakes, and slow-rotting municipal infrastructure straining under rising commercial energy demands. But there’s a good chance we won’t find out exactly which are down here and which are just rumor.

Because that’s the thing about both Kentucky cave lore and the underbelly of American tech funding — the descent into darkness isn’t always followed by a re-emergence into disinfecting sunlight. Some things stay down here when they shouldn’t and become ghosts. Some treasures the earth keeps, and all we’re left with are the stories. 

The post What happened to the supercomputer under the zoo? appeared first on Salon.com.

Now the Federal Reserve, which is tasked with overseeing the country’s financial system, is trying to figure out just how vulnerable big banks are to this kind of upheaval. The Fed on Tuesday released new details about a climate risk analysis it is asking six major U.S. banks to conduct, offering a peek at the worst-case climate events that financial regulators are worrying about. 

Banks often use stress tests like these to assess risks in their portfolio, and since the financial crisis the Fed has required large banks to ensure that they can withstand sudden financial shocks, but this is the first time that the U.S. government has asked major banks to account for their exposure to climate change. The results of the so-called “pilot climate scenario analysis exercise” will offer new insight into whether these banks could survive major climate shocks, and could also help inform new regulations such as the ones that followed the 2008 financial crisis.

The banks that will participate are some of the largest and most diversified in the country: Bank of America, Citigroup, Wells Fargo, JPMorgan Chase, Goldman Sachs, and Morgan Stanley. This batch controls about half of the banking market in the United States as measured by total deposits, and also manages billions of dollars for investors and pensions. The Fed’s exercise asks these banks to consider two major types of climate danger: the “physical risk” of natural disasters and the “transition risk” of a movement away from fossil fuels.

In the first part of the exercise, banks will assess how their portfolios would fare if one or more major hurricanes struck the Northeast, a “region in which all participants have material commercial and residential real estate exposures.” The Fed wants banks to pay particular attention to their real estate portfolios: how many residential and commercial loans would fall through, and how much money would it cost the banks if that happened?

In the second, the Fed will look at how their investments and loans would perform during a rapid energy transition to net zero emissions by 2050. If the world’s nations did come together and decarbonize on that timeline, it’s likely that major oil companies and other carbon-intensive companies would see severe losses. Rating agencies like Standard & Poor’s might downgrade their credit, making it harder for them to borrow their way out of trouble, which in turn would cause losses for the banks that finance and insure them.

Many large financial institutions still provide large loans and underwriting services for fossil fuel producers. A new report from the advocacy group Reclaim Finance found that even banks that have signed a prominent global net-zero pledge have provided a combined $269 billion in financing for fossil-fuel companies over recent years. Five of the Fed’s six participating banks are named in the report as top fossil-fuel financiers — all except Goldman Sachs.

Yevgeny Shrago, policy director for the climate program at Public Citizen, the consumer advocacy group, said the Fed’s exercise is a welcome start, but it doesn’t go far enough. 

“It’s not even a fire drill,” Shrago told Grist. “It’s like looking at the map of a building and being like, do we have enough exits?” The exercise focuses on how climate change could affect banks’ balance sheets, Shrago said, but it doesn’t consider how losses at those banks could lead to broader financial turmoil for small banks, insurers, pensions, and ordinary people. 

The Federal Reserve is independent from the Biden administration, but the bank’s announcement comes on the heels of other regulatory actions. The Securities and Exchange Commission is in the middle of finalizing a rule that would require publicly-traded companies to disclose their greenhouse gas emissions, and the Treasury is seeking information from major insurers about how climate change could affect their business. 

The Federal Reserve has asked banks to submit their responses by the end of July, and plans to make the results of the study public later this year.

The post How vulnerable is Wall Street to climate change? The Fed wants to find out appeared first on Salon.com.

The initiative’s goal was to increase the number of financial institutions committed to net-zero principles — essentially a promise that the work done by these institutions (investing, lending money, managing major assets like pension funds) would not cause an overall increase in the world’s carbon emissions. During the conference, Carney announced that the coalition had grown to 450 firms responsible for $130 trillion in assets, a pot of wealth equivalent to more than five times the gross domestic product of the United States.

“You need things like GFANZ that are relentlessly, ruthlessly, absolutely focused on that transition to net-zero,” he told Bloomberg at the time.  

But just a year later, many Wall Street firms are backtracking. In September, the Financial Times reported that several banks, including Bank of America and JP Morgan, were concerned about accidentally running afoul of United Nations climate rules and being held legally liable for their commitments, leading them to consider pulling out of GFANZ. Blackrock and Vanguard, the world’s largest asset managers, then confirmed in October that their net zero commitments would not preclude them from investing in fossil fuels, despite concerns that new fossil fuel investment is incompatible with timely decarbonization. (Asset managers steward money on behalf of major investors like sovereign wealth funds, insurers, and pension funds.) And finally, earlier this week, Vanguard officially announced that it is resigning from the Net Zero Asset Managers initiative, a sector-specific alliance under the GFANZ umbrella. 

Initiatives like the Net Zero Asset Managers initiative “can advance constructive dialogue, but sometimes they can also result in confusion about the views of individual investment firms,” the company said in a statement, which appears to reference the backlash that Vanguard and other firms have received from Republican attorneys general for considering environmental concerns in some of the investments they offer.

In the last few years, as the global costs of climate change have become more apparent, pressure on companies to reduce carbon emissions and prioritize environmental initiatives has increased dramatically. Asset managers like Blackrock and Vanguard largely joined this call and were supportive of many shareholder-led climate proposals that resulted in the appointment of new directors at ExxonMobil, the adoption of emission reductions at companies like Chevron, and the reporting of risks from the energy transition to a company’s bottomline. 

But as climate-focused investment practices (such as screening out fossil fuel companies in certain boutique index funds) gained traction and companies joined GFANZ, questions mounted about whether Wall Street’s apparent climate-consciousness was actually moving the needle on net zero, if climate commitments would run afoul of firms’ fiduciary duties (by steering investors away from profitable-but-polluting investments), and if they would be able to abide by the United Nations’ climate targets. 

The discussion is complicated by the fact that many fossil fuel investments managed by Vanguard and other asset management firms are held in index funds that track the performance of the overall stock market — the kind that many American workers use to save for retirement, for example. These index funds invest in a broad range of companies regardless of those companies’ carbon emissions, and GFANZ didn’t change that — in part because changing the makeup of a fund would require the approval of investors and could result in legal challenges. As a result, Vanguard’s commitments apply primarily to a subset of funds that it actively manages to adhere to vaguely-defined environmental, social, and governance principles, or ESG. It offers these funds to investors who also support those principles and want to put their money behind them.

Vanguard appeared to underscore this distinction, however vaguely, in its decision to withdraw from GFANZ, stating that it wanted to “provide the clarity our investors desire about the role of index funds and about how we think about material risks, including climate-related risks — and to make clear that Vanguard speaks independently on matters of importance to our investors.” More than 80 percent of its clients’ assets are in index funds, it noted. 

Wall Street has also been facing pressure from Republican lawmakers and attorneys general, who have accused firms of “woke capitalism.” They’ve made sustainable investment practices a flash point, opening investigations into banks that have committed to net-zero and reportedly planning to hold hearings on the issue in the new Republican-majority House of Representatives that assumes office in January. Earlier this week, the Republican staff of the Senate Banking Committee released a report pillorying BlackRock, Vanguard, and another asset manager for using “shareholder voting power to advance a liberal political agenda.”

Last month, Republican attorneys general also filed a protest with the Federal Energy Regulatory Commission against Vanguard buying shares of U.S. utilities, arguing that the firm’s commitment to net-zero meant that it might push the utilities to move away from coal and natural gas, even if fossil fuel buildup would be better for investors than renewables. “This will undoubtedly affect the cost and reliability of energy supplies,” they said.  

Kirsten Snow Spalding, a vice president at the sustainability nonprofit Ceres, said in a statement that it is “unfortunate that political pressure is impacting this crucial economic imperative and attempting to block companies from effectively managing risks — a crucial part of their fiduciary duty.”

While financial institutions face political pressure to ditch climate-focused initiatives, they are also increasingly battling regulatory pressure to take the risks of climate change into account. The Securities and Exchange Commission, the watchdog federal agency meant to protect U.S. investors, has issued new climate risk disclosure rules for asset managers and is cracking down on firms that are inflating their climate bona fides. The Commission has a separate task force that identifies misconduct related to climate and ESG investments within its Division of Enforcement. Last month, the Commission targeted Goldman Sachs for failing to adequately evaluate ESG factors before including securities in ESG-branded funds. The firm paid $4 million in penalties to settle the case.

The post Wall Street’s biggest names are backing off their climate commitments appeared first on Salon.com.

In this modern rendition, Goliath was Wall Street hedge funds short sellers, while the underdog David was the retail investors seeking revenge on the aforementioned bullies. The tale’s conclusion ends on a triumphant note — or a tragic one, depending on how you choose to interpret it — with a short squeeze of the stock of GameStop, the once-failing video game and consumer electronics retailer.

The short squeeze — where investors bet against a particular stock that rapidly increases in price — was fueled by a Reddit forum called r/wallstreetbets. Collectively, the group used a series of app-based brokerage services, most commonly Robinhood, to purchase an influx of shares to cover for the nearly 140% of GameStop’s public float — the portion of outstanding stock that is available for trading by public investors — that had been sold short. Their initiatives were in full swing by August 2020 and later, reached its peak in January 2021 after countless business hot shots joined their efforts.

The rare occurrence, now known officially as the GameStop short squeeze, is narrated in Netflix’s latest docuseries, “Eat the Rich: The GameStop Saga.” Over the course of three episodes, the series spotlights a few Redditors who took part in the epic showdown along with hedge fund managers, finance experts and the journalists who covered the dramatic news.

Here are six of the wildest revelations from the recent series:

01

The controversial post that started it all

Alvan Chow from “Eat the Rich: The GameStop Saga.” (Netflix)

Alvan Chow, a retail investor and Redditor, prompted the GameStop short squeeze via his post on r/wallstreetbets. In the documentary, Chow said he first became interested in the GameStop drama after Ryan Cohen, the founder and CEO of the e-commerce company Chewy, invested in the dying brick-and-mortar store. Amid his research, Chow learned that GameStop’s stock price rose 30% but on a more shocking note, around 140% of Gamestop shares were short, thus leading to the conditions for a short squeeze.

 

For a better perspective on the percentage, Bob Sloan, founder of the New York City-based software company S3 Partners, said, “The way we calculate it, anything 7 to 10% is kinda normal. Things start ticking around 20%, it gets on the watch list. Thirty, 40 or 50, that’s very, very high.”

 

When the stock price begins to rise in such a manner, short sellers may buy back their shares to assuage their losses. However, that can also drive the stock price up even higher, which is basically a recipe for disaster.

 

“A true short squeeze is a rare event. There are probably a hundred predicted for every one that occurs,” said Chow. “There needs to be an unexpected positive event to start to drive the stock price higher. This could be a huge earning surprise or a takeover offer.”

 

On Reddit, Chow wrote, “Sup gamblers. Feel bad about missing the gain train on Tesla? Fear not, something much greater and stupider is here. We’re going to temporarily join forces with the Galactic Empire and hijack the Death Star. Our choice of weapon, GME.”

  
Many members of WallStreetBets disagreed with Chow. But a handful of individuals also supported his manifesto, especially after they came across a man named Keith Gill — also known as Roaring Kitty on YouTube and u/DeepFuckingValue on Reddit — whose online analyses of the GameStop stock played a large role in the short squeeze. 

02

The unexpected surge

Joe Fonicello from “Eat the Rich: The GameStop Saga.” (Netflix)

By the end of August 2020, Cohen purchased more than 6 million shares of GameStop. Three months later, he sent an open letter to the GameStop board, outlining a new vision for the company. And then, on January 8, 2021, he tweeted a series of cryptic memes that alluded to a future success with the company.

 

One meme simply said, “How you know it’s going to be a fun ride,” while another was a single photo of the now-defunct Blockbuster video store franchise. On Jan. 11, it was announced that Cohen would receive three seats on the GameStop board.

 

Cohen’s accomplishments along with GameStop’s imminent successes encouraged more Redditors, like retail investor Joe Fonicello, to buy more shares.

 

“I threw in the rest of my savings. I was like, ‘I’m in. The short squeeze is gonna happen.'”

 

Shortly afterward, the stock price of GameStop began increasing at a faster rate than ever seen before.

 

“We bought it about $8 a share, and now . . . we were in the 30s,” Fonicello added. “You had more and more people on WallStreetBets buying up shares of GameStop.”

 

Unbeknownst to many individuals outside of the group, the short squeeze had already begun at that point. Prior to Cohen’s acquisition of the board seats, GameStop’s stock traded around seven million shares a day, the series explained. Afterward, that number jumped to an astounding 144 million.

03

Andrew Left got left behind

Andrew Left from “Eat the Rich: The GameStop Saga.” (Netflix)

As the price of GameStop’s shares continued to rise, short sellers scrambled to prevent their anticipated losses in profits. Like clockwork, Citron Research, an online investment newsletter that provides stock market commentary, tweeted that the price of GameStop stocks would drop from $30 to $20 in no time.

 

“Gamestop $GME buyers at these levels are the suckers at the poker game,” the full tweet read. “Stock back to $20 fast.”

 

Andrew Left, an activist short seller, author and editor of Citron Research, had also shorted the stock and alleged that a short squeeze would not take place. Left was a “polarizing” figure within the WallStreetBets community — some individuals hailed him as a hero for exposing fraudulent companies while others called him a phony and awarded him the moniker “S**tron Research.”

 

“The irony of the whole GameStop story is I got caught on the side of what’s considered Wall Street, and historically, I’ve been the ‘anti’- Wall Street person,” Left said. “I put my money where my mouth is. So I was short GameStop and if I’m short GameStop, I’m gonna tell you the reasons why.”

 

He added, “Me personally who is short the stock, I have no problem selling the stock higher. You’re not going to change the underlying fundamentals of this company.”

 

But Left’s thesis stood no chance against the Internet, which was set on finalizing the short squeeze. A few retaliators even attacked Left’s personal life by hacking his social media accounts and using his name and photos to create a slew of fake Tinder profiles.

04

GameStop becomes (in)famous

Eat the Rich: The GameStop Saga (Netflix)

In addition to garnering attention on Reddit, the GameStop hoopla became popular on Instagram, YouTube and TikTok. Per Taylor Lorenz, The Washington Post’s technology and online culture reporter, the short squeeze was “completely driven by influencer culture.”

 

One such influencer was Matt Kohrs, a retail investor and YouTube “finfluencer” who gained millions of views after he posted livestreams on GameStop’s stock. The short squeeze also caught the attention of prominent figures in the business world, including Chamath Palihapitiya, the founder & CEO of Social Capital, who had a reputation of sticking up for retail investors.

 

“Tell me what to buy tomorrow and if you convince me I’ll throw a few 100k’s at it to start,” he tweeted on January 26, 2021. “Ride or die.”

 

Similarly, Bitcoin investor Cameron Winklevoss also tweeted, “Thinking about going long GameStop $GME. Thoughts?”

 

The hype was further fueled by Elon Musk, who took to Twitter to simply write, “Gamestonk!!” More people, primarily Musk’s fans and followers, began investing in GameStop’s stocks.

 

“I got involved in GameStop straight-up because of Elon, dude,” said Chris “Krispy” Ream in the documentary. “Elon posted ‘Gamestonk!!.’ I was reading all this stuff. I was like, ‘Well, Elon’s a genius. Gotta jump into this, right?'”

 

He continued, “My whole plan is to make a TikTok house. I just want to do TikToks all day in a big mansion with pretty girls. That’s it.”

 

Even the state of Alaska and The Church of Jesus Christ of Latter-day Saints invested in GameStop shares.

05

The devastating losses

Eat the Rich: The GameStop Saga (Netflix)

Hedge funds were hit hard by the short squeeze as many lost billions of dollars, per Sloan.

 

“We knew individual investors were trading more than ever, but I have never seen anything like this come together so quickly and lead to such an insane rise in a stock price,” recounted Gunjan Banerji, a reporter for The Wall Street Journal’s Money & Investing team.

 

According to the series, Gabriel Plotkin’s Melvin Capital Management, the hedge fund that originally shorted GameStop, lost $6.8 billion in just one month. In January 2021, other hedge funds began buying back the stock, which only pushed GameStop’s stock price up even further. By the end of the month, GameStop short sellers had lost nearly $20 billion.

 

“The sentiment was exactly one of revenge,” said Kohrs. “Not only did people make money on the ride up, but finally, we made hedge fund Wall Street pay.”

 

Derik, a retail investor, Redditor and rapper alongside Rachael, Mikey Guggenheim, added, “A lot of these people that bought GameStop stock, they watched their parents’ whole savings or retirement funds just go to nothing basically, ’cause of the subprime mortgages. So it’s like, getting back at the hedge funds.”

06

Robinhood’s shady deals

Gunjan Benerji from “Eat the Rich: The GameStop Saga.” (Netflix)

On Jan. 28, Robinhood prohibited users from purchasing GameStop shares, thus causing a frenzy. According to a 2021 CNBC report, following the controversial move, “shares of GameStop initially reversed their gains, sliding quickly into negative territory. The stock, which traded about $500 at one point in premarket trading, closed down 44%.”

 

Retail investors, politicians and finance experts accused Robinhood of market manipulation and claimed that the investing app was wrongfully making money off of people’s addiction to trading.

 

“They have designed their user interface in a way that taps into some of these psychological blind spots to make people trade more,” said Dr. Vicki Bogan, professor of economics at Cornell University. “The research indicates that even if you’re aware of a blind spot, it doesn’t necessarily eliminate its effect on your behavior.”

 

Per Scott Galloway, a podcast host and New York University professor, “Robinhood is similar to a lot of other big tech companies and that is it’s based on the attention economy. And that is the more it can get you to trade, the more time it can get you to spend on the app, the more money it makes.

 

“Robinhood’s incentives are not for you to learn, not for you to generate wealth, but for you to engage in a trading activity that historically has resulted in less wealth and less economic security, and that is day-trading.”

 

Many Redditors and conspiracy theorists on Twitter also speculated that Robinhood had made a shady deal with Citadel Securities, a market making firm that was Robinhood’s primary customer, and Melvin Capital Management. To add to the mess, Citadel LLC, which is the sister company of Citadel Securities, invested $2.75 billion into Melvin Capital in January 2021.

 

As a result, a slew of class action lawsuits were filed against Robinhood. But despite the allegations, executives for Robinhood denied claims that Citadel had pressured them into limiting the trading of GameStop. In June 2022, however, the House Committee investigating the GameStop debacle concluded that Robinhood and Citadel Securities were indeed in communication with each other.

 

“There is a power shift and I think it’s important to acknowledge that literally Tiktok and Twitter and Reddit, they’ve become forums for information and they clearly can move markets,” claimed Banerji.

“Eat the Rich: The GameStop Saga” is now available for streaming on Netflix. Watch the trailer below, via YouTube:

The post The 6 wildest GameStop short squeeze revelations from Netflix’s “Eat the Rich” documentary appeared first on Salon.com.

The Biden administration could bring down gas prices as much as 25% just by acknowledging the problem, a former Commodity Futures Trading Commission (CFTC) official said last week. Michael Greenberger, the CFTC’s former director of trading and markets, gave a virtual talk hosted by Americans for Financial Reform (AFR), during which other organizations indicated they’re launching new efforts to close the loophole.

During his remarks, Greenberger told participants that Sen. Maria Cantwell, D-Wash., was aware of the issue and interested in pursuing it. Another participant, former Commodity Markets Oversight Coalition Chair Jim Collura, told TYT that he briefed Rep. Paul Tonko, D-N.Y., after Greenberger’s talk and Tonko expected to raise the matter with House leadership. (Neither Cantwell’s nor Tonko’s offices responded to requests for comment.)

RELATED: Why Joe Biden is afraid to blame big business for inflation

Public Citizen’s Tyson Slocum has also voiced concerns about how the loophole is letting big financial firms overwhelm healthy price-setting with massive volumes of commodity-based swaps — essentially bets on commodity prices. The issue isn’t just gas and food; minerals and anything else traded on commodity exchanges are affected.

In healthy markets, buyers and sellers set prices by finding middle ground between them. One party wants low prices, the other wants high prices. But thanks to an obscure CFTC passage — Footnote 563, in regulatory guidance — buyers and sellers of oil and other commodities are outnumbered something like 10 to one by Wall Street traders, none of whom have a genuine buyer’s incentive to keep prices low, because few of them ever actually buy it; they mostly bet on it.

Because deregulated traders dramatically outnumber them, genuine buyers and sellers are virtually irrelevant now when it comes to setting prices. That, Greenberger says, is what’s causing Ukraine and other supply issues to create disproportionately large impacts on prices: Wall Street is amplifying spikes where a functioning futures market would cushion them.

The resulting, persistent inflation has dragged down the public economically and dragged down President Biden politically. On Sunday, for the first time ever, the national average for gas prices hit $5 a gallon. Biden’s polling, meanwhile, is carving out new lows.

As Axios noted, Biden’s policy responses so far “have failed to curb the upward climb of gas prices.” That’s because the Biden administration’s actions have mostly been responses to claims by the oil industry and its Republican allies that the issue is supply.

But that’s not the case, as Greenberger and others have been pointing out for months. If supply were the problem, prices would be easing.

The problem also isn’t corporate greed, as Democrats have suggested. Or, at least, it’s not the corporate greed Democrats have in mind.

In healthy markets, price gouging would inspire competitive undercutting. In theory, an opportunistic gas company could try to scoop up new customers by low-balling their price-gouging competitors. But even if some wholesalers did that — Russia, for instance — it wouldn’t move the market price, because gas company sales are a drop in the bucket compared to Wall Street’s bets.

As Greenberger said in his talk last week, oil companies may benefit from spiking prices, but they’re not the primary mover.

And Greenberger has more than a little experience with the issue. He played a similar role back in the aughts when gas topped $4 a gallon, pointing out a regulatory weakness called the “Enron loophole” that let Wall Street speculate on energy. In 2008, both presidential candidates, John McCain and Barack Obama pledged to close the Enron loophole. Prices came down.

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As Greenberger, who now runs the University of Maryland Center for Health and Homeland Security, documented in a 2018 research paper, it took a while for the Obama administration to catch on to the newest loophole: Footnote 563. By October 2016, however, the Obama CFTC had found the loophole and had begun the process to close it before it could trigger a global financial crisis. As TYT reported, Donald Trump’s deregulatory crusade led first to the delay of that fix and then to its death.

Today, Greenberger says, the Democratic-dominated CFTC could take quick action to revive that fix. But despite Obama’s experience — when Biden was at his side — and despite the intense political pressure to address inflation, there’s no evidence Biden knows about Wall Street’s role, let alone what to do about it.

In fact, on Monday, the Washington Post reported that Biden is privately both frustrated and skeptical about his own administration’s work. White House chief of staff Ron Klain, the Post reported, has directed agencies to identify price-cutting measures they can take. (The White House did not respond to TYT’s requests for comment last month or for this story.)

The irony is that, according to Greenberger, the Biden administration doesn’t have to do much more than say a few words in public to have a dramatic impact on gas and other prices. In his talk, Greenberger said, “If they just [say], ‘Hey, this is going on, this is bad, we’re gonna look at it,’ I think the price of oil would go down at least 10% upon that acknowledgement, maybe 25%.”

That’s because just the prospect of regulatory attention could spook the banks and other big financial firms that are betting on gas prices. (Greenberger cites Goldman Sachs, Citigroup, Bank of America and JPMorgan Chase; Slocum says private equity is also in the game.)

Until now, there’s been little evidence Congress sees the problem. Despite a long wait before the White House submitted its CFTC nominees, the Senate Agriculture Committee took additional months to vote on their confirmation. And even today, it’s not clear whether Biden’s new appointees at the CFTC have caught on, despite Klain’s request, and even though chair Rostin Behnam is a veteran of the past fights over Footnote 563.

As a member of the House Agriculture Committee, however, Khanna sits on the subcommittee that has CFTC oversight. And Khanna last week told TYT he’s backing Greenberger.

In a statement, Khanna said, “I’m concerned about the role Wall Street speculators are playing in driving the price of oil and food futures.”

And Khanna may not be alone. In an email, Collura wrote that, after the AFR call, he “had the opportunity to explain Footnote 563 to Congressman Paul Tonko.” Collura said that Tonko “was alarmed to say the least. … He promised to bring it to the attention of the Democratic leadership.” (Collura works for the New England Fuel Institute, which attended Greenberger’s talk, but was not speaking for the organization, which has taken no position on the issue.)

Khanna also endorsed Greenberger’s claim that deregulation of swaps is exacerbating inflation. As Khanna put it, “Lax regulation on swaps has been a windfall for banks and contributed to price spikes. I support reforms like the one proposed by the Obama administration in 2016 that would close this loophole.”

As Greenberger laid out in his 2018 paper, the International Swaps and Derivatives Association carved out the loophole for themselves as the CFTC was translating the Dodd-Frank Wall Street Reform law into rules and regulations. The upshot: Wall Street’s biggest banks were able to escape regulation of virtually all their swaps by executing them through affiliates that they claimed were overseas and claimed weren’t backed up by their parent firms. Neither of those claims was true, and in some cases the affiliates themselves barely existed beyond a piece of paper.

Greenberger’s short-term remedy is for the administration to address the problem publicly. The long-term fix is to re-regulate those swaps. A number of advocacy groups told TYT they’re now looking at that.

A spokesperson for Accountable.US told TYT that their organization “was present on the [AFR] call and our team is exploring the deregulation angle.”

Dr. Steven Suppan, senior policy analyst for the Institute for Agriculture and Trade Policy (IATP), also participated in last week’s call. In an email afterward, he echoed Greenberger’s diagnosis, calling TYT’s report on it, which was shared during the call, “a public service to connect current commodity price levels and volatility to the failed Trump cross-border swaps rule.”

Suppan’s email noted past IATP engagement on this issue. In 2020, for instance, the IATP wrote to the CFTC warning that rules were needed to prevent the rise of “a system that amplifies the price responses to … shocks.” The letter, Suppan wrote at the time, was in response to Trump’s CFTC proposing new policy that would (and later did) kill the 2016 proposed Obama-era rule.

AFR’s call with Greenberger was titled “Deregulation Driving Inflation.” According to the invitation, “too little attention has been paid to how the Trump administration enabled Wall Street manipulation of commodity prices.”

The Footnote 563 loophole, the invitation said, “allows big banks to dodge U.S. regulations, making it possible to manipulate prices in some of the most volatile sectors that help drive inflation. Professor Greenberger will walk us through how we got here, what it means for inflation, and what we can do to fix it.”

After the call, AFR senior policy analyst Andrew Park told TYT, “For all the finger-pointing about the causes of inflation, both the commodities and banking regulators should be looking into how closing this critical loophole for commodity swaps could stamp out this unproductive speculation across several critical commodities, that in turn, have raised the prices billions of people pay for fuel and food across the world.”

Read more on rising inflation and the Biden presidency:

• Behind the Joe Biden v. Jeff Bezos beef: What their inflation spat is really about
• Corporate profiteers blamed price increases on labor costs — then gave big raises to CEOs
• Stop blaming workers for inflation: Corporate greed is a much bigger factor

The post How Wall Street speculation is driving inflation — and how the Democrats can fix it appeared first on Salon.com.

Noting that a disproportionate number of those arrested for marijuana possession are poor people and people of color, Sanders (I-Vt.) wrote in an email to supporters that the Justice Department must “start prosecuting the crooks on Wall Street for laundering money from drug cartels, suspected terrorists, and corrupt foreign officials.”

Additionally, the Vermont senator called on Congress to finally legalize marijuana at the federal level, arguing it is an issue of both criminal and economic justice.

“When you fill out an application for a job, one of the first questions you are asked is whether or not you have a criminal record,” Sanders wrote. “It is extremely unfair for people to be denied jobs because they were once arrested for smoking marijuana. Enough is enough.”

Despite Senate Majority Leader Chuck Schumer’s (D-N.Y.) vow to prioritize the issue, he has yet to unveil a marijuana legalization bill in the upper chamber as he continues holding talks with members of both parties in an effort to secure the 60 votes needed for passage.

In April, the House approved legislation that would decriminalize marijuana nationwide and expunge federal cannabis convictions.

“We must reform our broken and racist criminal justice system, and one of the ways we can do that is by finally legalizing marijuana at the federal level,” Sanders wrote Friday, promoting a petition calling on Congress to pass a legalization measure.

“It starts with changing the Federal Controlled Substances Act which, if you can believe it, currently puts marijuana in the same category as heroin. That’s absurd and defies all scientific judgment,” Sanders added. “The good news is that in recent years, we have seen state after state decriminalize marijuana, and we have seen communities expunge the criminal records related to marijuana offenses.”

“What we are now seeing is a radical change of consciousness among the American people on this issue,” the senator continued. “So now is the time for Congress and the federal government to end the war on drugs and legalize marijuana nationwide.”

Legalize marijuana. Expunge past marijuana convictions. End the failed War on Drugs.

— Bernie Sanders (@BernieSanders) April 20, 2022

Recreational marijuana is currently legal in 19 U.S. states and the District of Columbia, and 37 states have legalized cannabis for medicinal purposes.

While marijuana arrests in the U.S. fell substantially in 2020 amid the coronavirus pandemic, there were still an estimated 350,150 arrests for marijuana-related offenses that year, the latest for which federal data is available. In 2019, U.S. police arrested 545,602 people for marijuana-related violations—and 92% of those arrests were for possession.

“We have a criminal justice system today that is not only broken—it is racist and it is unjust,” Sanders wrote in his message to supporters. “Many thousands of Americans, often Black and Brown, are sitting in jail today because of marijuana convictions or because they can’t afford bail. That injustice must end.”

Meanwhile, recent research shows that prosecutions of corporate and white-collar crime have plunged in recent years.

According to Syracuse University’s Transactional Records Access Clearinghouse, federal white-collar prosecutions were down 24.4% in Fiscal Year 2021 compared to five years earlier.

In late April, Public Citizen released an analysis showing that just 90 corporations either pleaded guilty or were found guilty of federal crimes last year—a record low.

“Allowing corporate crime to go unpursued and unpunished is not an option,” the group said. “Rampant corporate crime means Americans are at increased risk of being victimized by businesses putting the pursuit of profit above the law, and faith in the American justice system, which so often brings the harshest consequences down on the most powerless defendants, is undermined.”

The post Sanders says forget marijuana, go after Wall Street appeared first on Salon.com.

“To get his deal done, Mr. Trump ventured into an unregulated and sometimes shadowy corner of Wall Street, working with an unlikely cast of characters: (two) former ‘Apprentice’ contestants, a small Chinese investment firm and a little-known Miami banker named Patrick Orlando,” the New York Times reported Friday, adding that the deal allowed Trump to access $300 million in funding for Truth Social despite being shut out of the mainstream financial industry due to his history of bankruptcies and loan defaults.

“Mr. Orlando had been discussing a deal with Mr. Trump since at least March, according to people familiar with the talks and a confidential investor presentation reviewed by The New York Times,” the newspaper reports. “That was well before his SPAC, Digital World Acquisition, made its debut on the Nasdaq stock exchange last month. In doing so, Mr. Orlando’s SPAC may have skirted securities laws and stock exchange rules, lawyers said.”

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SPACs, or Special Purpose Acquisition Companies, aren’t supposed to have a merger planned at the time of their initial public stock offering, according to the Times.

“Lawyers and industry officials said that talks between Mr. Orlando and Mr. Trump or their associates consequently could draw scrutiny from the Securities and Exchange Commission,” according to the report. “Another issue is that Digital World’s securities filings repeatedly stated that the company and its executives had not engaged in any ‘substantive discussions, directly or indirectly,’ with a target company — even though Mr. Orlando had been in discussions with Mr. Trump. Given the politically fraught nature of a deal with Mr. Trump, securities lawyers said that Digital World’s lack of disclosure about those conversations could be considered an omission of ‘material information.'”

Read the full story.

More stories like this:

• Inside the “weird” world of DWAC, Trump’s already soaring social media SPAC
• Trump is starting his own social media platform called “TRUTH Social”
• Trump’s new social media platform will bar users from making ‘disparaging’ comments about it

The post Trump’s SPAC deal may have skirted securities law in “shadowy corner of Wall Street”: NYT appeared first on Salon.com.

Sinema’s refusal to endorse Biden’s Build Back Better plan over its $3.5 trillion price tag has emerged as a major obstacle to Biden’s agenda. Sinema, a former Green Party member who campaigned on lowering drug prices and previously called for big corporations and the rich to “pay their fair share,” has also balked at Democrats’ plan to lower prescription drug costs and increase taxes on the wealthy and large companies, amid a massive lobbying blitz by corporations and industry groups aiming to torpedo the bill.

Sinema’s former legislative director and senior policy adviser, Alyssa Marois, left her office to lobby on behalf of JPMorgan Chase, a gigantic investment bank and holding company with more than $3.6 trillion in assets, which according to the Financial Times is the world’s largest lender to the fossil fuel industry. The bank has donated $47,500 to Sinema’s campaign and related PACs, and has been one of the leading critics of Biden’s proposed corporate tax hike.

Marois was listed last year as vice president of federal government relations for the bank and the government relations manager for the company in its latest Federal Election Commission filing. A spokesperson for Chase said Marois left the job over the summer. The job involves developing “relationships with key policymakers,” coordinating with “industry trade associations to maximize effectiveness,” and building industry coalitions on “matters of shared interests.” The position is part of JP Morgan Chase’s Government Relations and Public Policy Group, which the bank says “directs our company’s political spending.”

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JPMorgan Chase has spent more than $1.3 million on lobbying on “corporate tax issues” and other matters between the first and second quarter this year, according to its lobbying disclosures.

Marois herself has actively lobbied on several issues where the banking industry is at odds with the Biden administration, according to the disclosures. Among other issues, she lobbied the Senate and House on financial issues related to bank structure, capital requirements, “examination and enforcement issues” and other bank regulation matters. During the past few months, the banking industry has escalated its fight against proposed regulations in the Build Back Better plan to increase IRS enforcement of wealthy tax cheats. Banks are pressuring lawmakers to drop a plan to require them to report transaction data to the IRS to help crack down on tax avoidance.

JPMorgan Chase was a major beneficiary of the Republican tax cuts signed by Donald Trump in 2017, which slashed the corporate tax rate by 40%. The bank saved $8.7 billion in 2018 and 2019 on its IRS bill, according to Bloomberg. Trump even urged a senior JPMorgan executive to “thank him” for the newfound profits during a meeting, the outlet reported.

Biden has proposed raising the corporate tax rate to 28%, well below the 35% it was before the Trump tax cuts. JPMorgan Chase CEO Jamie Dimon earlier this year called the proposed tax increase a “little crazy” and dismissed Biden’s plan to raise the top capital gains tax rate to nearly 40%. Dimon sits on the board of directors of the Business Roundtable, which includes the CEOs of some of the country’s largest companies and has vowed to wage a “significant, multifaceted campaign” to stop the proposed tax increases. The Business Roundtable has praised the Senate’s bipartisan infrastructure plan that Sinema helped negotiate but said it is “deeply concerned about potential tax increases on U.S. job creators” in the Build Back Better proposal.

Another longtime former Sinema aide, Kate Gonzales, earlier this year joined the high-end lobbying firm of Brownstein Hyatt Farber Schreck, which brags that its “political connections deliver results” and that former Capitol Hill staffers are among its principals. Gonzales is a member of the firm’s Energy, Environment, and Resources Strategies Group, where she “provides insight into Democratic priorities,” according to the company. “She is highly skilled at developing compelling messaging for moderate Democrats and Republicans,” her bio says. Biden’s spending proposal includes numerous measures aimed at tackling climate change and cracking down on energy firms.

Meanwhile, Sinema’s current chief of staff, Meg Joseph, used to be a lobbyist at Clark & Weinstock, which has represented Pfizer and other top pharmaceutical companies and trade groups that oppose Biden’s proposal to allow Medicare to negotiate the price of prescription drugs.

Pharmaceutical companies and medical firms have donated more than $750,000 to Sinema during her career, including more than $466,000 since she was elected in 2018.

Sinema has also received more than $920,000 from companies and industry groups leading the lobbying blitz against Biden’s proposal, according to an analysis from the progressive government watchdog group Accountable.US.

Sinema’s office said in a statement on Thursday that the senator has been clear for months that “she would not support a bill costing $3.5 trillion.”

“While we do not negotiate through the press — because Senator Sinema respects the integrity of those direct negotiations — she continues to engage directly in good-faith discussions with both President Biden and Senator [Chuck] Schumer to find common ground,” the statement said.

Sinema has stonewalled the media in recent weeks, saying little or nothing beyond bland press releases. But she has continued to raise money from business groups that oppose Biden’s bill. Accountable.US says campaign contributions from antagonistic corporate interests may explain why Sinema continues to oppose proposals that are overwhelmingly supported by voters both nationally and in Arizona.

Sinema’s opposition to Biden’s agenda drew a rebuke from the Arizona Democratic Party last week, which threatened to hold a vote of no confidence against her if she “continues to delay, disrupt, or votes to gut” Biden’s plan. Activists who helped elect her in 2018 as Arizona’s first Democratic senator in decade have launched a crowdfunding campaign to raise money for a potential primary challenger, as Salon first reported on Wednesday. At least two other groups have since launched similar efforts to fund a potential primary challenger as polls show Sinema’s favorability among Democratic voters lagging significantly behind fellow Sen. Mark Kelly, D-Ariz.

“With the Biden Build Back Better plan poised to give millions of struggling families a chance to get ahead, there’s too much at stake for this process to get mucked up and watered down with typical Washington revolving door corporate influence and money,” Kyle Herrig, president of Accountable.US, said in a statement to Salon. “We hope Senator Sinema is ultimately guided by the overwhelming public sentiment in favor of corporations paying their fair share and investments that will build an economy for all, not just billion-dollar businesses.”

The post Former senior aide to Kyrsten Sinema worked as top lobbyist for JPMorgan Chase, fighting tax hikes appeared first on Salon.com.

In stark contrast, moderate and centrist Democrats were quick to shift the blame to other branches of government rather than taking any action of their own.

House Speaker Nancy Pelosi has drawn criticism for her hands-off approach, especially after a Daily Poster report on her real estate ties. But her second in command, Majority Leader Steny Hoyer, D-Md., has potential conflicts of interest of his own with some of his past campaign donors.

Alongside Pelosi, Democratic leaders including Hoyer and three other Democratic leaders issued a statement calling for action but passed the buck to the White House and blamed the Supreme Court for inaction.

“Action is needed, and it must come from the Administration. That is why House leadership is calling on the Administration to immediately extend the moratorium,” the three leaders said in a release.

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The statement came despite a fairly explicit ruling from the Supreme Court that essentially said the opposite. The court ruled that any changes would need to come from Congress — not from the executive branch.

Ultimately, the Centers for Disease Control and Prevention extended the moratorium for most renters until early October. But despite growing concerns about COVID’s delta variant, protections for renters have still been eroded. The previous moratorium covered the entire country; this time it only covers parts of the country with substantial or high rates of community transmission.

Pelosi, Chuck Schumer and Hoyer’s response raises questions about why exactly these leaders would be so hands-off about extending the moratorium in practice, while saying something entirely different.

Hoyer’s financial interests stem from his previous campaigns and who donated to them. (He did not respond to TYT’s request for comment.)

In the 2020 election cycle, the Maryland congressman took money from several Wall Street firms that have been buying up single-family homes in the last year, ahead of the looming eviction crisis. The firms include Vanguard, Goldman Sachs, Carlyle Group and Invesco.

Hoyer took $5,000 from Vanguard’s PAC, The Vanguard Group Committee for Responsible Government, in the most recent election cycle.

Vanguard Group has index funds that account for almost 12% of all shares of American Homes 4 Rent. According to data compiled by the Private Equity & Corporate Landlord Tracker, American Homes 4 Rent filed more than 100 evictions this past year.

Despite the moratorium, many eviction cases are still in process. Princeton University’s Eviction Lab found that more than 6,000 evictions were filed last week alone. Despite the moratorium, evictions are continuing for a multitude of reasons, such as inconsistent enforcement, courts interpreting the ban differently and some landlords actively ignoring the rules in the hope their tenants won’t notice.

Carlyle Group has also been directly involved with evictions despite the moratorium. According to the tracker, the investment group opened 250 eviction cases in the past year. Hoyer took $2,000 from Carlyle’s PAC in December 2019.

Goldman Sachs is another institutional investor buying up rental properties. The firm is also investing in smaller funds, including Fundrise, which allows investors to make smaller bets on home prices. In the past, Fundrise primarily has invested in commercial real estate, but it’s now dabbling in the residential market, focusing on new homes. Goldman financed $300 million in credit for the fund.

Goldman Sachs has also invested in companies that help house-flippers, landlords and institutional investors find properties and turn them around quickly — a move that hurts those struggling to make ends meet in the process. (This is because when evictions start, the displaced will need to find new homes but are likely to be outbid by institutional investors who can make cash offers on the spot.)

In June of this year, Goldman Sachs invested $32 million in the software company Entera, which helps real estate developers, flippers and investors make instant decisions on bids for rental properties. According to Bloomberg, the software has been used to acquire more than $1 billion worth of property.

Goldman has helped create a situation that expedites finding a buyer amid a pending eviction and foreclosure. That means Goldman could effectively bar evictees from relocating.

And according to NBC News, that’s exactly what institutional investors are doing. “If you’re a first-time homebuyer and you’re depending on a mortgage that takes two months to close and you’re competing against someone who’s making a cash offer you’re at a disadvantage right off the bat,” Karan Kaul, senior research associate for the Housing Finance Policy Center at the Urban Institute, told NBC.

In April, Fundrise partnered with homebuilder D.R. Horton to buy an entire neighborhood worth of new homes in Conroe, Texas, north of Houston.

Hoyer took $5,000 from Goldman Sachs in 2020 and in every year since 2007, according to FEC receipts, through the Hoyer for Congress PAC. He collected an additional $5,000 through his other PAC, AmeriPAC.

He also took money from Invesco. In June, Bloomberg reported that the firm pledged to invest a staggering $5 billion in Myrd Management to buy 20,000 single-family homes over the next three years.

Hoyer took $2,500 from Invesco’s PAC via Hoyer for Congress in March. He also took a combined $5,000 in August 2020.

Last month, Hoyer said, “[T]here’s great concern about the welfare of both renters and landlords.” He said he expects the House to take up the issue again. “[W]e are going to make sure that: a) the money gets out the door to the landlords and renters … and that, particularly, landlords of small — two or three units — who are using that income to supplement their retirement, or perhaps that is their retirement, are not left at risk.”

Failure to block evictions, combined with Hoyer’s Wall Street money, could present an opportunity for progressive challenger Mckayla Wilkes. Wilkes ran against Hoyer in the last primary and lost. But she performed better than Hoyer’s previous primary rivals and took in $200,000 in donations only weeks before the vote.

According to the nonpartisan political news site Maryland Matters, when Wilkes unofficially announced her 2022 run in January, 400 volunteers signed up to help.

Wilkes says her grassroots campaign was hindered last year because of COVID. She told Maryland Matters, “COVID-19 had a lot to do with the halt in our operations — grassroots candidates depend on those one-on-one conversations with voters.”

The post Follow the money: Why House Democratic leader Steny Hoyer was so tepid on evictions appeared first on Salon.com.

I’m a scholar in corporate leadership and governance. While I can’t comment on the specifics of the case, I do know that private companies like the Trump Organization lack the safeguards of public corporations – like outside ownership and independent oversight.

Moreover, impulsive decision-making by an individual or small, isolated group of followers, without those safeguards, can and often will lead to disastrous results.

That appears to be what the ongoing criminal investigations into the Trump Organization show.

Public ownership

Several years ago, I explored the distinction between public and private companies in detail when the American Bar Association invited me to write about what young corporate lawyers needed to understand about how business works. Based on that research, I want to point to an important set of distinctions between public and private corporations, and what it all means for the Trump Organization.

Public corporations are those businesses that trade their stock on a public market, such as the New York Stock Exchange. They are regulated by the Security and Exchange Commission and affected by a number of important federal laws, most notably the Corporate Fraud Accountability Act, popularly known as Sarbanes-Oxley.

Private companies like the Trump Organization do not trade their stock publicly. Ownership is tightly held by a limited number of chosen investors. As such, they escape the scrutiny of these public overseers.

Outside oversight

The CEO of a public company is subject to an array of constraints and a varying but always substantial degree of oversight.

There are boards of directors, of course, that review all major strategic decisions. And there are separate committees that assess CEO performance and determine compensation, composed entirely of independent directors who don’t have any ongoing involvement in running the business.

In addition, public shareholders are entitled to vote directly on the compensation awarded to top executives. Whole categories of CEO decisions, including mergers and acquisitions, international expansions and changes in the corporation’s charter are subject to the opinion of shareholders and directors.

The composition of the board of directors is also regulated by law. Half of the directors must be independent of the company. And the board committees charged with conducting audits, hiring and firing the CEO and determining executive pay must be 100% independent. Company insiders and close family members may sit on public boards but are not counted as independent.

Full disclosure

The SEC requires the CEOs of public corporations to make full and public disclosures of their financial performance. Regular reports require disclosure of operating expenses, significant partnerships, liabilities, strategies, risks and plans.

Additionally, public companies must hire an independent auditing firm approved by the Public Company Accounting Oversight Board to conduct and verify the thoroughness and accuracy of those financial statements. Any fraudulent reporting can result in criminal charges against the CEO and chief financial officer.

These rules are all intended to safeguard the integrity of corporations, to help make them transparent to public investors and to guard against corruption. They are far from perfect, but they are helpful. And private corporations are not required to comply with any of them.

How “Trump Inc.” operated

Well-governed companies, such as Microsoft and PepsiCo, tend to outperform poorly governed ones, often dramatically. That’s largely due to all the factors noted above, including accountability.

Management at the Trump Organization, on the other hand, was accountable to no one, other than Trump himself. The executive team of the Trump Organization – a limited liability company that has owned and run hundreds of businesses involving real estate, hotels, golf courses and much else – is made up entirely of his children and people who are loyal to him. And his decision-making authority was unconstrained by any external oversight or internal constraints.

Decisions concerning what businesses to start or exit, how much money to borrow and at what interest rates, how to market products and services, and how to pay suppliers or treat customers were made centrally and not subject to review.

Trump, it should be noted, made one stab at a public company in the mid-1990s: Trump Hotels and Casino Resorts. That was an unmitigated disaster, leading to five separate declarations of bankruptcy starting in 2004, all during a period when other casino companies thrived.

As a private company, the Trump Organization was under no obligation to follow the guidelines of good governance. Because, in my view, it voluntarily decided to ignore such guidelines, the indictment may be only the first of many.

Bert Spector, Associate Professor of International Business and Strategy at the D’Amore-McKim School of Business, Northeastern University

This article is republished from The Conversation under a Creative Commons license.

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According to Americans for Financial Reform (AFR), which published the study Thursday, the historic sum was spent by Wall Street executives, employees, and trade groups, and included campaign contributions as well as lobbying expenses. 

The sector’s goal was to ensure lawmakers pass “policy that makes the already wealthy richer, and the rest of us poorer,” regardless of which party is in power. 

#WallStreet spent $2.9 BILLION to influence policy in Washington during the last election cycle

The goal: Policy that makes the already wealthy richer, and the rest of us poorer

New report from @RealBankReform
https://t.co/2oi84taIfn pic.twitter.com/WdH2ZMyShf

— AFR (@RealBankReform) April 15, 2021

The spending detailed in AFR’s report likely does not represent Wall Street’s total contributions, the organization noted, because $1.05 billion in dark money, with unknown original sources, was spent on the 2020 federal elections.

“Thus, total Wall Street spending [accounts] for,  at a minimum—because it is impossible to track dark money from the industry—one in seven dollars that financed the 2020 federal elections, the most expensive ever,” AFR reported. 

The financial sector spent the most money ever on political elections last year since 2016, when Wall Street poured $2 billion into campaigns and lobbying efforts. AFR executive director Lisa Donner noted that Wall Street is likely to continue breaking records in the coming years. 

“The enormous sums that Wall Street has at its disposal, combined with a broken campaign finance system, means there is little practical limit to the amount of money the financial services industry can inject into American debate on politics and policy,” Donner said in a statement.

The majority of the campaign contributions from Wall Street went to Democratic candidates, with Democrats taking 53% of the donations. More than $74 million was given to Biden’s campaign.

Newly elected Democratic Sens. Mark Kelly of Arizona and Jon Ossoff and Raphael Warnock of Georgia were among the senators who received a combined $300 million from Wall Street executives and employees. 

On Twitter, AFR said some of the biggest political spenders on Wall Street last year were Bloomberg LP, which poured $157.8 million into the elections; the National Association of Realtors, which spent more than $154 million; and Blackstone Group, which spent more than $49 million.

Amid the 💰$2.9bn💰 that #WallStreet dumped into American politics, there were some standouts in spending on campaigns and lobbying:

💲@Bloomberg $157M
💲@nardotrealtor $154M
💲Fahr LLC $70M
💲@Citadel $69M
💲@blackstone $49M

Read our latest report:
https://t.co/2oi84taIfn pic.twitter.com/HRc22wxaIN

— AFR (@RealBankReform) April 15, 2021

“Year in and year out, this torrent of money gives Wall Street an outsized role in how we are governed, while driving and protecting policies that help this industry’s super wealthy amass even greater fortunes at the expense of the rest of us,” said Donner.

The post Wall Street gave more money to 2020 campaigns than any election season in U.S. history appeared first on Salon.com.

President Joe Biden’s selection of the former secretary of state as the first-ever White House climate envoy was met with mixed reactions from advocates, with critics such as Food & Water Action executive director Wenonah Hauter calling Kerry “a long-time apologist for fossil fuel fracking and a reliable promoter of false climate solutions like market-based carbon-trading schemes.”

The sister organization Food & Water Watch signed on to the new letter. Other signatories included Amazon Watch, Center for Biological Diversity, Earthworks, Friends of the Earth U.S., Future Coalition, Greenpeace USA, Oil Change International, Public Citizen, Rainforest Action Network (RAN), SumOfUs, and several chapters of 350.org.

“Climate policy has so far been left to markets, and now we’re in a climate crisis,” saidMoira Birss, climate and finance director at Amazon Watch and steering committee member of the Stop The Money Pipeline coalition. “It’s time that the U.S. government take the reins back from Wall Street so we can assure the rapid, justice-centered decarbonization necessary for a livable planet.”

The letter (pdf)—sent just before the release of new data on deforestation that one expert warned “represents a crisis for climate stability and biodiversity conservation, as well as a humanitarian disaster and lost economic opportunity”—argues that demonstrating climate leadership on a global scale requires ending “financing of fossil fuels and deforestation around the world by U.S. firms and entities.”

“That is why we applauded President Biden’s executive order directing you and Treasury Secretary [Janet] Yellen to develop a U.S. climate finance plan, and why [we] were encouraged when you said this plan will include ‘ending international financing of fossil fuel projects with public money,'” the letter says. “However, in order to credibly take on this challenge, we must recognize that Wall Street is not yet an ally—as long as U.S. firms continue to pour more money into the drivers of climate change, they are actively undermining President Biden’s climate goals.”

NEW: A letter from 145 groups to @ClimateEnvoy warns Kerry that Wall St isn't a climate ally — it's a major obstacle driving the climate crisis w/ deadly funding of extractive industries.

We need serious climate regulation, not "partnership."

Read more: https://t.co/iarlIpzrue pic.twitter.com/Xrmkg8RZnx

— Collin Rees (@collinrees) March 31, 2021

The groups expressed disappointment that Mark Gallogly—a major Democratic donor who spent 16 years at Blackstone, the world’s biggest private equity firm and a notable investor in fossil fuels—joined Kerry’s international climate team, adding that “a climate action approach that seeks to partner with Wall Street without also holding it accountable is no longer credible in 2021.”

The letter encourages the Biden administration to embrace four key commitments that would address Wall Street’s financing of industries driving the climate emergency:

• Push U.S. and international financial institutions to commit to ending fossil fuel and forest-destroying financing and insurance beyond inadequate, pre-emptive commitments;
• Urge U.S. asset managers to divest from pure-play coal, oil, and gas, and adjust their corporate engagement to appropriately reflect climate risk;
• Advocate for coordinated, international financial regulation; and
• Engage regularly with climate advocates and the frontline communities most impacted by climate change.

“Wall Street amassed its riches by pouring money into fossil fuels, and they don’t want that gravy train to end,” said Doug Norlen, director of the Economic Policy Program at Friends of the Earth U.S. “It’s dangerous to suggest that the very institutions that financed and fueled the climate crisis should dictate our response to it. Climate Envoy Kerry must support the use of the levers of government to end U.S. and international institution support for fossil fuel and forest-destroying financing.”

The letter says that “until we can hold Wall Street firms to account, no amount of new green finance commitments can credibly undo the damage that their fossil fuel financing is doing to the climate, to U.S. climate leadership, and to our chances of meeting the goals of the Paris agreement.” The groups have requested a meeting with Kerry, who was involved with the crafting the 2015 climate deal.

NEW: 145 groups urge @ClimateEnvoy John Kerry to pursue government action to end the flow of finance to industries driving climate chaos — not enter a dangerous “partnership” w/ Wall Street & pretend financial firms will self-regulate.

Read the letter: https://t.co/QBvjEIojRX pic.twitter.com/WpbkRIUjIY

— Oil Change International (@PriceofOil) March 31, 2021

David Arkush, director of Public Citizen’s Climate Program, said that “Kerry’s recent statement that the government can’t do much more than help Wall Street fix the climate crisis is deeply troubling” because “Wall Street is almost completely on the wrong track, and we need financial regulators to help right the course.”

Public Citizen and Americans for Financial Reform Education Fund on Wednesday released the Climate Roadmap for U.S. Financial Regulation (pdf), which includes recommendations for personnel, staffing, and agency organization; supervision and prudential regulation; and capital markets regulation.

“Wall Street is gambling against our future and putting the health of our communities and economy at grave risk. Given the urgency of the climate crisis, we can’t afford continued inaction,” said Arkush. “Financial regulators already have an obligation to protect us from Wall Street’s risky bets and this roadmap is designed to help them act immediately, using all the tools currently at their disposal.”

“Financial regulation is a key piece of the whole-of-government approach necessary to tackling the climate crisis and realizing the level of economic transformation needed to avert disaster for people and for the planet,” said Alex Martin, senior policy analyst at Americans for Financial Reform Education Fund.

The new letter and roadmap follow a report released last week by RAN and other advocacy groups detailing how the world’s 60 largest banks have dumped more than $3.8 trillion into the fossil fuel industry since the Paris agreement was adopted in 2015—despite recent “splashy” net-zero commitments from major U.S. institutions.

Last year, Sen. Jeff Merkley (D-Ore.) introduced a pioneering pair of bills that would prevent banks and global financial institutions from pouring money into fossil fuels. As he said in October: “It’s time to prioritize the interests of the American people and the planet above the wishes of fossil fuel CEOs who want to hold our economy hostage.”

The post John Kerry urged to help end flow of finance from Wall Street to industries fueling climate crisis appeared first on Salon.com.

Predictably, the hope-peddlers, stenographers of current events, professional centrists and other obsolete voices among the American news media have been more than willing to oblige and circulate such fictions.

Here are some uncomfortable truths.

For all of the allure of liberal schadenfreude and President Biden’s popularity, Donald Trump and his followers have not been broken or otherwise defeated psychologically, emotionally or politically. If anything, he and they are becoming more bold, confident and sure of their long-term success.

Trump is behaving like a type of shadow president who believes he was never truly defeated by Biden and the Democrats. Trump will apparently speak at the CPAC political cosplay gathering next week, where he may announce himself as a kingmaker for the Republican Party, call out enemies who are to be purged for “disloyalty” and perhaps even announce that he will be starting a new political party for “real Americans” and “true patriots.”

There is no civil war within the Republican Party about the legacy of Trump’s presidency and the future of the “conservative” movement. Trump did not break the Republican Party or otherwise mold it into his vision. Instead, Trump gave the party, along with its voters and camp follower permission to be their true, ugly, dangerous, anti-democratic, white supremacist selves. It is no surprise then that Donald Trump remains extremely popular among Republican voters. His personal popularity, in fact, eclipses that of the Republican Party itself.

Public opinion polls and other research has repeatedly shown that Trump’s followers believe that he and they were betrayed by the “Deep State” or other such imaginary forces who “stole” the 2020 election from their Great Leader.

Law enforcement and other experts in terrorism and counterinsurgency have continued to warn that Trump’s insurrection and coup attack on the Capitol on Jan. 6 are just the beginning of a sustained period of right-wing terrorism and other political violence directed against Democrats, liberals, progressives, nonwhite people, Muslims, Jews and others deemed to be enemies of Trump and his movement.

What of Donald Trump’s finances? The apparent media consensus holds that Donald Trump is on the verge of imminent financial collapse. Hundreds of millions of dollars in loans are coming due over the course of the next few years and Trump now lacks the protection of the presidency, along with the ability to exploit public resources to personally enrich himself as well as his family and other allies. Trump is also facing serious criminal investigations related to his questionable business practices as well as other apparent crimes related to his insurrectionist plot.

But this consensus about Trump’s fading finances and wealth overlooks one important detail: He is a cult leader, and his followers are potentially an almost infinite source of funding.

William Cohan is a special correspondent for Vanity Fair. His writing has also been featured in The New York Times, The Financial Times, The Atlantic, Fortune and The Nation. Cohan is also the author of several bestselling books about finance and Wall Street, including “Money and Power: How Goldman Sachs Came to Rule the World” and “House of Cards: A Tale of Hubris and Wretched Excess on Wall Street.” His most recent book is “Why Wall Street Matters.”

In this wide-ranging conversation, Cohan explains how Donald Trump could potentially use his fanatical followers to make billions of dollars each year. He also details how the corruption of the Trump regime likely includes manipulation of the stock market and other financial crimes, which he believes the Biden administration and Congress should investigate.

Cohan also shares his thoughts on the present and future of the American economy in an age of pandemic, and what the wild speculation in such companies as GameStop and Bed Bath & Beyond really reveals about the stability of the stock market.

This conversation has been edited for length and clarity.

There is a desperate yearning for a return to “normal” following Trump’s presidency and the coronavirus disaster and all the personal and financial destruction it has caused. What will this new normal look like for small businesses, for example? I worry that many neighborhood businesses will be gone forever.

Big-name brand stores in the Soho neighborhood of Manhattan are struggling, while independent stores in Brooklyn are doing fine. Many small and medium-sized businesses have struggled greatly throughout this crisis. The Fed has helped in an extraordinary way those companies, generally big companies, that can access the capital markets. Those companies have refinanced debt and obtained more debt and equity financing. They have also been able to issue junk bonds and refinance their debt.

This represents about 1% of companies. And then there are the other 99% of businesses that are small and medium-sized businesses. If it weren’t for the PPP loans, many of those businesses would have closed down. There are other businesses, such as restaurants and other small and medium-sized businesses, which are just going to disappear. But on the other hand, I see anecdotal examples where new entrepreneurs are coming along, people willing to take risks. The economic disruptions in New York, for example have made a lot of retail space much more affordable than it has ever been in the last two decades or so. It is creative destruction. This is the nature of capitalism generally, and the pandemic has exacerbated those tendencies.

A hundred years ago there was the Spanish flu pandemic, and it was followed by the Roaring ’20s. The reason it was called the Roaring ’20s was because World War I had ended, and the pandemic had ended, people were ready to live again, and all that pent-up energy was released.

There probably will be a crash, given where the asset bubbles are already. High-yield bond markets are in a bubble. The stock market is at an all-time high and certainly looking pricey. Bitcoin is out of control. Tesla is out of control. We have these GameStop-like charades. And this all comes before we have another version of the Roaring ’20s. Ultimately, I think it is inevitable that a financial crisis is going to happen once every 10 to 15 years anyway.

In addition to the GameStop speculation, trading cards and other collectibles are now back in a huge way as well. I knew folks who opened baseball card, comic book and memorabilia stores in the 1980s and 1990s, and when that bubble burst, they lost everything. How do you explain the re-emergence of that market?

The truth is that each one of these narratives results from a different set of circumstances. What is driving Bitcoin is very different than the shenanigans that drove GameStop. But it all gets portrayed in the headlines in a very similar way. Now, both in my opinion represent a ridiculous level of speculation and gambling. They also both have this underpinning of wanting to “stick it to the man” and change the world.

With GameStop, that roller coaster has come and gone. Bitcoin is still going up. I think it’s another just way to gamble, whether you understand what’s going on or not. FOMO, or “fear of missing out,” was the driver behind GameStop. GameStop came and went before the SEC could get its mind around it — and there wasn’t even a head of the SEC because we were between administrations. There will be hearings and people will try to figure out how to prevent the GameStop insanity from taking place again. Such things have been going on for a long time. Flights of fancy are part of human nature — for example, tulip mania in the 17th century. What’s the difference between GameStop stock and Bitcoin and tulip bulbs? To me, there is no difference.

One of the arguments is that what’s happening now — with GameStop, for example — is all proof that Wall Street is a type of casino. Wall Street is corrupt. It can be rigged and played easily. 

There are some 3,500 publicly traded equities in the U.S. So, one or two or three become the fascination of speculators, for whatever reason. We all know that now the Redditors got ahold of GameStop and AMC and Bed Bath & Beyond and whatever else may be next. But by and large, the capital markets are one of our country’s greatest assets. They are certainly the envy of the world, whether Americans appreciate that or not. Has there always been speculation? Yes.

People love to gamble. People are at home. They don’t go to work. They’re working from home. They’re sitting around and they get bored. “Why not see if we can make some money sitting around and doing nothing by buying into the GameStop bonanza? If it works out, great. If it doesn’t, so what? I had some fun.” There would be no way, if a person did any analysis on the fundamentals of GameStop as a business, that they would ever buy it unless they perceived that there was an opportunity for a short squeeze — which there was. By and large it was the hedge funds that were shorting GameStop and they made the right call. Over time, chances are the GameStop stock will continue to go down because the fundamental underlying nature of the business is not very good.

“Casino capitalism” is a phrase that is commonly used by critics of today’s version of capitalism. What is that language and concept describing, accurately or not?

“Casino capitalism” is a nice alliterative phrase, but it is a complete oversimplification. There are five or 10 companies where people are speculating. Is there speculation in Bitcoin or in some commodities? Yes, there is a gambling element to some aspects of Wall Street. Did people 20 years ago bid up the price of GE stock to make it the most valuable company in the world? Yes. Is it now trading for a great deal less, a fraction of what it was then? Yes. But for the most part, the public markets and, to some extent, the private markets are the best judge of a company’s value.

The media consensus is that Donald Trump is facing imminent financial collapse. That claim is also part of a much broader narrative of wishful thinking that Trump has been vanquished and will disappear from American public life. What do we actually know about Trump’s money and financial prospects going forward? To my eyes he has many options available.

The fact of the matter is Trump is going to owe $400 million to Deutsche Bank in the next few years. In the past Trump has defaulted on loans left and right. This means Trump lost the assets associated with them. If Trump defaults on what he owes, it would mean that he’d lose a bunch of golf courses or perhaps even Trump Tower. I do not think that Trump is going to let it get to that, because it is obviously a terrible time to be trying to sell a Manhattan office tower. Chances are there will be time for the economy to improve before the money Trump owes will come due.

Two of his best assets are the minority stakes he owns in the Vornado office buildings, one in Manhattan and one in San Francisco. Steve Roth has tried to sell them and couldn’t do it because of the Trump stink. So now the thinking is that maybe he buys out Trump, which in turn would give Trump cash. Then those properties could be sold, now that Trump is no longer attached to them. Certainly, Donald Trump could sell Trump Tower or 40 Wall Street. Those are basically debt-free, valuable assets. Trump is trying to sell his Washington hotel, but there do not seem to be any takers at the moment. I believe at some point in the future there will be.

As I wrote in my recent Vanity Fair article, what I’ve been hearing from people on Wall Street is that Trump could just do the obvious. Look at what Trump did after the 2020 election. He raised something like $300 million from his followers. Trump could also start a Substack site and have somebody write it for him. He doesn’t even have to do it himself. He’s got 72 million followers, so let’s say 10 million of them agree to give him $100 a year. That is a billion dollars. And Trump could get that every year. He could easily begin to monetize these fanatical followers. That is the path of least resistance. And do not forget that Trump is a pretty lazy guy, so the Substack route makes sense.

Ivanka Trump and Jared Kushner, Trump’s daughter and son-in-law, made at least $600 million during Donald Trump’s presidency. This is a clear example of influence peddling and profiteering against the public interest. Is there any legal recourse to prevent this type of abuse in the future?

The whole Trump administration has been about abusing power, sucking up public money, and being confident that they will get away with it — and they have. I don’t even know what to say about Jared and Ivanka. They are so keen on self-aggrandizement that they’re completely divorced from reality. 

At Vanity Fair you have written extensively about the alleged insider trading at the Chicago Mercantile Exchange, as well as other questionable financial dealings connected to the Trump administration. Should Joe Biden and Congress investigate these matters?

Absolutely there should be investigations. The FTC should be looking into these questions. The suspicious timing of so many of the trades at the Chicago Mercantile Exchange is well-documented. To me, investigations would be a necessary corrective and an important step in restoring the integrity of the markets, which should also include GameStop and insider trading among congresspeople. There are lots of ways to go about this. It will be a breath of fresh air if Gary Gensler does it. We certainly knew that nobody in the Trump administration was going to undertake anything of the sort, because they are all grifters.

With the benefit of more information and hindsight, what do you think the American people and the world will discover about the Trump administration? What is the big story not yet revealed?

Getting to the bottom — not of Trump’s taxes — but of his balance sheet and financial projections. I have always wanted to see Trump’s audited financials. I want to know who has lent him money, how much, and what he owes. I want to see it on one page.

That would be the revelation. That’s when the American people and the world find out why Trump kowtowed to Putin and other dictators and oligarchs. Who has their hooks into Trump? Unlike every other president, Donald Trump did not put his assets into a blind trust. In keeping with his disruptive, chaotic approach to life, Trump ignored convention after convention and saw the presidency as the ultimate grift. Getting to the bottom of how much Donald Trump and his family stole from the American Treasury, and who around the world had their hooks into him and why, are the great unexplained mysteries of the Trump presidency.

The post Financial author William Cohan on how Trump can make billions — and save himself one more time appeared first on Salon.com.

For decades we have plowed trillions of dollars, much of it borrowed money, into our military and security state apparatus in order to fight wars abroad on two fronts.

Of course, who does the media seek out after thousands of marauding Trump white supremacists almost seize the U.S. Capitol to disrupt the Electoral College and the peaceful transition of power? The very bipartisan array of generals and intelligence experts who didn’t see it coming. Despite our armed vigilance against enemies abroad, we were easily upended from within by the lack of disposable masks or enough mutual regard for one another to embrace basic public health protocols so people we didn’t know, or even our own family members, might live.

Here in the Northeast, we get daily briefings from New York Gov. Andrew Cuomo and New Jersey Gov. Phil Murphy, but the awful truth is that we are in unchartered territory despite their certitude that “a return to pre-pandemic normal” lies just ahead, on the other side of the next mountain of death.

The media fixates on each iteration of in-person dining and the question of how long the bars could remain open for the Super Bowl. It rarely asks the tough questions, like how our states and our nation will handle the reality that several million of the Americans infected by a still-mutating virus will likely have long-term disabilities that require extensive care.

At the same time, millions of American families teeter on the edge of the economic abyss of eviction or foreclosure, having gone through whatever savings they had, while the millionaires in Washington posture for partisan advantage.

Not calculated in the aggregate data crunched by policymakers is the long-term impact on the future lifetime earnings for a generation of students cut off from in-person instruction during the pandemic. A Pew Research Center survey found that one in five households with homebound students told researchers it was “very or somewhat likely” that their children would not be unable to complete their schoolwork because they lacked a reliable internet connection.

Here in the New York and New Jersey region, a year into the pandemic, both Cuomo and Murphy have said repeatedly that the pandemic has been most devastating for low-income communities of color where the lack of access to health care means that chronic untreated diseases had established a foothold, decades before COVID came calling.

Across the country, public health experts have flagged the same connection between race, poverty and the prevalence of the highly contagious and deadly virus. As it turns out, this is the same demographic cohort that is the backbone of the essential workforce that has borne the brunt of the pandemic. Yet even now some members of Congress would deny them an increase from the current $7.25 an hour federal minimum wage.

Credit President Joe Biden with opting to go big as he finalizes his $1.9 trillion COVID relief package to try to contain this hydra-headed crisis.

Biden was “in the room” in 2009 when he and Barack Obama came into office amid the Wall Street meltdown that cost millions of Americans their jobs, life savings, retirement accounts and homes. The recovery plan they fashioned bailed out Wall Street and assured liquidity at the top — at the expense of too Main Streets and Martin Luther King Jr. Boulevards that never saw a recovery.

Far too many of our elected officials were caught by surprise by the recent images of thousands of cars lined up to get a bag of groceries during the pandemic.

As early as 2009, Dr. Stephanie Hoopes, the national director of the United Way’s ALICE project, had begun to document the prevalence of households in places like Morris County, New Jersey that struggled to make ends meet but were not on the radar — because they were not living below the actual poverty line, which failed to take into account the cost of essentials like child care or telecommunications.

This cohort was what United Way researchers would come to describe as “ALICE”: Asset limited, income constrained but employed.

“ALICE is your childcare worker, the cashier at your supermarket, the gas attendant, the salesperson at your big box store, your waitress, a home health aide, an office clerk,” describes the projects webpage. “ALICE cannot always pay the bills, has little or nothing in savings, and is forced to make tough choices such as deciding between quality childcare or paying the rent.”

By 2018, a decade after the Great Recession, 37 percent of New Jersey’s households were either living below poverty or struggling below the poverty line. Nationally, in that same year, the United Way reported that of the 121 million households in the U.S., 42 percent, or 51 million, “could not afford basic necessities of housing, childcare, food, transportation, health care, a smartphone plan, and taxes.” And that was before the pandemic.

Since 2018, millions of Americans have lost their jobs and millions more have battled a life-threatening disease whose potential long-term health consequences are still not fully understood.

“ALICE families increased during the Great Recession and never really recovered 10 years after, so I would expect that things are even worse with the coronavirus recession,” Hoopes said in a recent phone interview. “We are seeing an unequal impact of the recession on low-wage jobs, with women and minorities being hit harder than folks with a salary and higher wages.”

According to Hoopes, much of the ALICE cohort finds itself caught up as essential workers, who are forced to work overtime outside their homes, putting themselves and their families at greater risk of COVID infection.

“These are the same households that have fewer resources to rebound in terms of attending to their own health or of being able to be able to miss work if they have to quarantine, care for a sick family member or home-school children,” Hoopes said. “Then there’s the second category of ALICE workers, who are not essential workers who have lost their jobs or had their hours cut way back. Those folks are suffering in different ways and the crisis has escalated much more quickly for them.”

In their Feb. 5 joint press appearance, Cuomo and Murphy came out swinging at Washington, not on behalf of ALICE workers but over the $10,000 cap on the federal income tax deduction for local property and state taxes enacted as part of the Republicans’ $1.7 trillion 2017 tax cut, which proved to be a major windfall for the nation’s biggest corporations and wealthiest families.

With a tangible sense of grievance, both governors correctly observed that the cap had the result of transferring wealth from higher-taxed blue states to red states. They argued that this cap on property tax deductions was an extra penalty, on top of New York and New Jersey historically sending billions more to Washington than they get back in federal spending.

They argued that if the nation is to restore its pre-COVID economy, states like New York and New Jersey must be made whole on the SALT tax, and should get a cut of the $350 billion state aid that President Biden has proposed that reflects the proportionate impact of the pandemic.

But simply seeking to restore the pre-COVID economy cannot address the nexus of systemic racism and exploding wealth inequality that set the stage for the devastation of the pandemic. Both New York and New Jersey have their own ways of rigging the economy for the top one percent, who also, coincidentally or otherwise, are large campaign donors.

As Peter Woolley, the director of Fairleigh Dickinson University’s School of Public and Global Affairs, pointed out in a recent op-ed, this effort by Democrats like Cuomo and Murphy to reinstate the full property tax deduction for homeowners coincides with millions of Americans being “on the brink of eviction”:

That limit of $10,000 is relatively recent, a product of the faux Trumpian tax reform of 2017, the gift-of-the-century to America’s global corporate behemoths, Wall Street, and the upper-end of Main Street. But at that upper end of Main Street, where people own properties big enough to be taxed well over $10,000, there is apparently discontent — despite that they also had their top income tax rate reduced by four percentage points (to 35% from 39%).

The kind of structural change required to spark the broad-based economic expansion we need requires looking at the old arrangements and subsidies in light of current circumstances. For decades, even as productivity grew and technology proliferated, America’s working class couldn’t catch a break as student and medical debt exploded while wages declined or remained flat.

Should the fabulously house-rich be able to build ever larger castles that act as shelter not just for their family but for their income, while so many are homeless or living in unsafe conditions, where COVID and other diseases can run rampant, threatening not just families but entire communities?

Should New York State continue to let investors hold on to the 5 cents per $100 transaction that was first imposed by a Republican governor in 1905 and collected up until the 1980s, when a Democratic governor and New York mayor decided to let the investor class keep it?

New York Assemblyman Phil Steck, an upstate Democrat doesn’t think so. He has been leading the charge to stop letting the investor class keep the nickel.

“The tax is in sum and substance one quarter of one percent, it’s nothing,” Steck said in a phone interview. According to recent data he cited, it amounted to $1.6 billion in June of 2020 alone. “In the last 10 years, we have given up $138 billion,” he said. “It is the classic race to the bottom. The whole public sector has been starved. It all started with Reagan and the anti-tax thing and the idea that government is bloated. Yet huge private corporations have as much bureaucracy as government.”

My advocacy of Steck’s position recently earned me the disapproval of Errol Louis, a Daily News columnist and anchor for the cable news channel NY1, who suggested that pursuing that nickel was a fool’s errand in today’s world, where we need to do all we can to placate big wealth.

The fact that “the 1905 law remains on the books” has created “an artifact in everybody’s stock market paperwork,” Louis writes.

The tax is still calculated, but 100% of it gets returned. That makes it seem as if a mouth-watering treasure has been handed over to Wall Street players for the last 40 years. It’s a tempting target for activists, labor unions and cash-strapped state lawmakers.

A few weeks ago, for example, reporter Bob Hennelly of the Chief-Leader asked Gov. Cuomo about the tax at a news conference. “It’s generated, in the last 10 years, $138 billion, even as the state closed hospitals to communities of color,” Hennelly said, noting that “we’re shoveling out this hidden subsidy to Wall Street.”

Not so. Whatever the merits of not collecting the tax, the digital revolution has scrambled, and nearly obliterated, the remaining connections between Wall Street as a physical place and the multi-trillion-dollar financial transactions of the stock market, which take place on computers that can be sited anywhere in the world.

Louis observes that “most of the billion or so transactions processed by the New York Stock Exchange each day” actually take place across the Hudson River, on servers in Mahwah, New Jersey. “It isn’t clear whether New York has the legal authority to tax those transactions.”

The legal analysts I have consulted suggest that New York would prevail if it had the political will to press its case. But that, of course, would mean annoying some very deep pockets who’ve been running the table for a long time.

If Andrew Cuomo and the rest of the Empire State’s elected officials are too queasy to go after nickels from Wall Street, perhaps it’s time, as some in Congress believe, for a national stock transfer tax. Imagine just how many nickels we could have collected toward funding the Green New Deal from GameStop’s roller-coaster stock market ride.

The post Can we get back to “normal”? That would require addressing structural wealth inequality appeared first on Salon.com.

The restriction comes on the heels of a buying frenzy led by Redditors on the 4.6 million-strong subreddit, “r/WallStreetBets,” who rallied against Wall Street’s effort to drive the Gamestop’s share price down by short selling the stock. These online investors –– many of whom are retail investors using commission-free trading apps like Robinhood –– managed to catapult Gamestop’s stock price by 1,500%, confounding market analysts and enraging institutional investors who bet on the company’s downfall. 

However, on Thursday, in a move that seemed like a far cry from its mission of “financial democratization,” Robinhood announced that it would be restricting trading on GameStop, as well as a whole host of other companies whose stock has been shorted and subsequently short squeezed. Robinhood’s announcement comes after the Nasdaq’s CEO threatened to halt trading on Wednesday in the case of “increased social media chatter.”

Immediately following Robinhood’s trading freeze, Gamestop’s share price plummeted from $469 to $129 in one day, leaving many users feeling betrayed. Robinhood maintained in its press release that it imposed Thursday’s restrictions to protect and “help customers stay informed” amid the market volatility. However, the move seemed to do just the opposite by driving Gamestop’s stock price down, stripping users of their unrealized gains. 

Rep. Ro Khanna, D-CA, a lawmaker representing Silicon Valley, condemned Robinhood’s actions, calling for “more regulation and equality” between different classes of investors.

“While retail trading in some cases, like on Robinhood, blocked the purchasing of GameStop,” Khanna said, “hedge funds were still allowed to trade the stock.”

Khana continued, “Instead of investing in future technologies to help America win the 21st Century, Wall Street poured billions into shorting this stock to crush this company and put workers out of business.”

Rep. Alexandria Ocasio-Cortez, D-NY, called for a Congressional hearing to address Robinhood’s shady termination of what some have painted as a populist movement that has hit Wall Street where it hurts. 

Fully agree. 👇 https://t.co/rW38zfLYGh

— Ted Cruz (@tedcruz) January 28, 2021

Her swift call for congressional action was echoed by Republican Sen. Ted Cruz, R-Tx., a frequent Twitter troll of the New York congresswoman. Ocasio-Cortez, however, responded to Cruz’s post, “You almost had me murdered 3 weeks ago so you can sit this one out.”

I am happy to work with Republicans on this issue where there’s common ground, but you almost had me murdered 3 weeks ago so you can sit this one out.

Happy to work w/ almost any other GOP that aren’t trying to get me killed.

In the meantime if you want to help, you can resign. https://t.co/4mVREbaqqm

— Alexandria Ocasio-Cortez (@AOC) January 28, 2021

Fellow insurrectionist Sen. Marsha Blackburn, R-TN, tweeted, “Free the traders on @RobinhoodApp.”

While Sen. Elizabeth Warren, D-MA, a notorious critic of Wall Street’s avarice, wrote on Twitter, “It’s long past time for the SEC and other financial regulators to wake up and do their jobs,” adding, “With a new administration and Democrats running Congress, I intend to make sure they do.”

Promising a hearing, House Financial Services chair Rep. Maxine Waters, D-Calif., said in a statement: “We must deal with the hedge funds whose unethical conduct directly led to the recent market volatility and we must examine the market in general and how it has been manipulated by hedge funds and their financial partners to benefit themselves while others pay the price.”

Federal regulators, however, have been less forthcoming about this week’s market mania. The Securities and Exchange Commission said on Wednesday that it was “working with our fellow regulators to assess the situation.” 

Federal Reserve Chair Jerome Powell dismissed claims that the Central Bank is responsible for any asset price anomalies. Powell said in a press conference, “I think the connection between low interest rates and asset values is probably something that’s not as tight as people think because a lot of different factors are driving asset prices at any given time.”

According to White House Press Secretary Jen Psaki, Biden’s economic team is “monitoring” GameStop’s stock. She later told reporters that she has “no comment” on the matter. New York Attorney General Letticia James, however, said on Thursday: “We are aware of concerns raised regarding activity on the Robinhood app, including trading related to the GameStop stock. We are reviewing this matter.”

While mainstream news outlets and the Robinhood CEO himself have framed the chaos as a “David vs. Goliath” showdown, many industry goliaths such as Mark Cuban, Elon Musk, and Chamath Palihapitiya have curiously taken the side of the WallStreetBets investors –– or “degenerates,” as they like to call themselves. Notably, Mark Cuban is a well-known proponent of short selling, casting doubt over the approbation of the group.

It’s also unclear just what class of investor would have benefited most from a Reddit-led buy-up.

According to Reuters, BlackRock, one of the world’s largest asset firms, may have pulled in $2.4 billion from GameStop’s recent trading activity. GameStop’s biggest individual shareholder is Donald Foss, the billionaire inventor of subprime auto finance. 

With Robinhood’s users unable to trade any more shares of GameStop and the high finance establishment consoled, for the time being, it may now lie in large part with the federal government to decide who will gain the upper hand. It’s of little surprise, in that case, that some in financial media — incredibly influential amongst regulators and lawmakers alike —have already begun to point to this episode as a reason to pull back on any interventions meant to buoy the larger economy, like another round of coronavirus relief spending or continued lower interest rates. 

The post Robinhood received bipartisan rebuke from Congress for ending Gamestop sales. Why that’s concerning appeared first on Salon.com.

Griffin ranks among the richest people in America, and during the 2020 election cycle he spent at least $57 million to support conservative candidates, most of that on Republicans in tight U.S. Senate campaigns. He donated significant sums to support Sen. Susan Collins of Maine, Sen. Cory Gardner of Colorado, Sen. Martha McSally of Arizona and Michigan GOP candidate John James, among others. But his $2 million to GUV on Oct. 9 was one of his 10 largest contributions ever, and he had already given the Loeffler-centric PAC $1 million about five weeks earlier.

Most major Republican donors at that time were avoiding Loeffler’s race, a nonpartisan “jungle primary” in which she faced not just Democrats like the Rev. Raphael Warnock — her current opponent in the Jan. 5 Georgia runoff election — but also Rep. Doug Collins, a conservative Republican closely allied with President Trump. 

Furthermore, there was no indication that Loeffler needed the money. She is the richest member of Congress, with an estimated net worth of $800 million. After Kemp appointed her to the Senate last January to fill the seat left vacant by the retirement of Republican Sen. Johnny Isakson, she had promised to spend as much as $20 million funding her own campaign. She consistently told voters that her independent wealth conferred an advantage: She would not be bought by corporate interests.

Griffin’s donation to GUV on Oct. 9 also came one day after the Wall Street Journal reported that one of his companies, Citadel Securities — a separate entity from the Citadel hedge fund, which Griffin also runs — had reached an initial agreement to buy one of its competitors, a company called IMC, for a price “in the tens of millions of dollars.” 

Citadel Securities is one of the world’s leading “market makers” — meaning a company that quotes both a buy and a sell price for a trade, hoping to make a profit on the spread — and the proposed acquisition would make Citadel Securities the largest designated market maker, or DMM, on the New York Stock Exchange, with domain over trades for more than half of all securities listed on the exchange. 

But before that could happen, management at the world’s most famous stock exchange — a central institution in American capitalism since its founding in 1792 — had to approve the deal. That followed in due course, and according to a Citadel Securities press release, the acquisition of IMC was finalized on Nov. 18. 

As it happens, Kelly Loeffler’s husband, Jeffrey Sprecher, is chairman of the New York Stock Exchange — as well as founder and CEO of Intercontinental Exchange (ICE), the company that has owned the exchange since acquiring it in a $10.9 billion deal in 2013. Loeffler herself sits on a Senate committee that oversees Wall Street and the financial markets.

To be clear, there is no evidence of any illegality surrounding Griffin’s contributions to the Loeffler super PAC. As for the Citadel Securities/IMC deal, a spokesperson for ICE, Sprecher’s company, told Salon by email that NYSE approval “was a straightforward, staff-driven process that had zero involvement from Jeff.”

After considerable discussion off the record, Zia Ahmed, a spokesperson for Griffin, issued a statement placing Griffin’s donations to Loeffler in the larger context of his political giving in 2020: 

Ken supported several diverse and talented Republican candidates in highly-contested races for Senate this year, including Sens. Collins, [Joni] Ernst and McSally, as well as John James. Sen. Loeffler is a successful businesswoman and an exceptionally strong member of the Senate, and Ken supported both Sen. Loeffler and Sen. [David] Perdue in the general and runoff elections.

Still, the circumstances and timing of the Loeffler donations remain distinctive, and serve to illustrate the haze of money, power and influence that surround the newly-minted Georgia senator, who walked away from an immensely lucrative career as a top executive within her husband’s firm when she entered politics a little less than a year ago. Given Loeffler’s connections, as well as the government oversight she now exercises over those connections, almost every contact she has with her husband’s industry reverberates with potential conflicts of interest.

At the time of Griffin’s donations, this had been made clear in months of reporting about Loeffler’s wealth and corporate ties, as well as the widespread scrutiny she drew, along with several other senators, for a number of well-timed stock trades ahead of the coronavirus pandemic.

A Justice Department investigation later cleared Loeffler of criminal wrongdoing, but she and her husband liquidated all individual stocks — except for their shares of Sprecher’s firm, Intercontinental Exchange, the parent company of NYSE.

On Nov. 18, the same day that Citadel Securities formally announced its purchase of IMC, with the runoff campaign between Loeffler and Warnock underway, Griffin gave $5,600 to the Senate Georgia Battleground Fund, a PAC established to support both Loeffler and Perdue (who also faces a Jan. 5 runoff). That curious amount may reflect a misunderstanding: A PAC can accept much larger sums, but in this instance Griffin gave the maximum any individual could have donated directly to the two runoff candidates. 

The NYSE says that DMM firms like Citadel Securities are “the cornerstone of the NYSE market model.” DMMs analyze market data to match buyers with sellers, executing trades both manually and electronically in real time, sometimes in flashes of a second. Their matchmaking also helps limit volatility, such as during this year, which has proved a boom time for Citadel. In return, DMMs collect small fees on massive numbers of transactions, scrape potentially useful data and, to some degree, shape markets.

Citadel Securities, however, also excels in high-frequency trading, where nanoseconds can make a difference. The combination presents the firm with a virtually inimitable advantage that has vaulted it to the top of its industry.

Ben Edwards, a securities law expert and professor at University of Las Vegas Nevada School of Law, told Salon that Citadel’s purchase of IMC would give it a greater presence into the market, especially with the recent rise of app-based trading, an emergent focus for Citadel.

“As Citadel grows in size, its view of the market also expands — likely allowing Citadel to become even more efficient in market making and high-speed trading,” Edwards said. “As retail trading expands with apps like Robinhood, market makers should profit significantly by executing uninformed trades.”

Citadel Securities’ buyout of IMC was a consequential transaction, according to the Wall Street Journal. It reduced the number of DMM firms on the world’s most famous stock exchange from four to three, and gave Citadel oversight of daily transactions for more than 60% of NYSE listings, “potentially raising concerns that the DMM business is becoming overly concentrated,” the Journal reported.

That consolidation was unlikely to impact the real-time experience of regular investors, Edwards told Salon, but the NYSE might see it as beneficial synchronicity.

“The NYSE may actually welcome Citadel’s acquisition of a market maker because it aligns their interests to a greater degree,” he said. “Although Citadel and NYSE may not always agree, Citadel’s purchase of a NYSE market maker likely means that Citadel isn’t going to undermine the NYSE or try to shift order flow away from the NYSE. If they did, it would result in less business for their market-making subsidiary.”

Last year Citadel joined a number of other major firms — such as Merrill Lynch, JPMorgan, Fidelity Investments and Bank of America — in opening its own exchange, MEMX, that would compete with the NYSE directly.

“We will not fight it,” Sprecher said on a call with investors after the MEMX announcement, a notably different approach than his purported detachment from Citadel Securities’ bid for IMC. “We think it has spillover benefits for the New York Stock Exchange.” 

Sprecher and Griffin were the top two donors to Georgia United Victory, the pro-Loeffler PAC. The third-biggest donor gave $500,000. Again, Griffin was one of the biggest individual donors of the 2020 election cycle, ranking sixth out of all Americans, according to data compiled by OpenSecrets. Sprecher, too, has spent tens of millions of dollars, much of it on his wife’s campaign.

But it’s also true that before the Nov. 3 general election, GUV apparently received contributions from only a few donors. In the four months between the PAC’s July launch and Election Day, Griffin and Sprecher were among only 26 contributors. Griffin’s $3 million was exceeded only by Sprecher’s $10.5 million, with all other GUV donors chipping in a combined total of about $3 million.

Otherwise, as mentioned above, major Republican donors mostly stayed away from Loeffler during the “jungle primary.” That wasn’t true of Griffin: Two of his 10 largest donations went to Loeffler, with the rest going to national Republican-oriented committees and to a PAC supporting John James, the Republican candidate taking on Democratic Sen. Gary Peters in Michigan.

In the period before the Nov. 3 election, GUV entirely deployed its resources in going after Rep. Doug Collins, Loeffler’s principal Republican opponent, and did not spend a dime attacking Warnock or any other Democrat. From Election Day onward, GUV raised only about $2 million — and that came from 850 individual contributions, which together account for less than Griffin’s two contributions before the election.

Collins attacked Loeffler’s wealth and her stock trading scandal throughout the fall campaign. “Raising money — especially from small donors — is a great barometer of support and it is clear that Doug has a dedicated grassroots army marching with him,” Collins campaign spokesperson Dan McLagan told ABC News in July. “Kelly Loeffler is mainly supported by Kelly Loeffler, her super wealthy stock-exchange-owning husband and a bunch of lobbyists. She leads a very small and lonely parade.”

Collins, however, had also vigorously supported President Trump’s 2017 tax bill, which disproportionately benefited corporate and financial interests and multinational firms. Between 2014 and 2016, Collins voted against multiple efforts to close offshore tax loopholes like the ones Loeffler and Sprecher have so successfully marketed through Intercontinental Exchange.

In other words, there are no obvious political or ideological reasons why Ken Griffin would value Kelly Loeffler so much higher than Doug Collins, or why he was evidently so much more invested in her success than were other GOP mega-donors. As noted above, however, Loeffler sits on the Senate committee that conducts oversight of stock trading.

“It’s safe to assume that the donations are being made because Citadel stands to benefit by keeping her in office,” Edwards told Salon. “It may be as simple as desiring to keep Republican control over the Senate. If Sen. Sherrod Brown [a liberal Ohio Democrat] gained control of the Senate Banking Committee, it could create political risk and increased oversight for the industry. Griffin may also believe that she’s more likely to understand and support their industry than most because of her prior work and husband.”

Loeffler estimated wealth of $800 million makes her by far the richest member of the Senate, but that’s only 4% of Griffin’s Bloomberg-estimated net worth of $20 billion, which makes him one of the 50 richest people in the U.S.

For millions of Americans, 2020 has been a financial nightmare, but for Griffin — who last year bought the most expensive home in the country, a Manhattan penthouse — it has been a bonanza. The acceleration in stock transactions has made Citadel Securities one of the financial world’s biggest winners of 2020: The firm doubled its profits in the first half of the year as compared to 2019, increasing Griffin’s personal net worth by about a third, or $5 billion, according to Bloomberg.

“Sen. Loeffler’s close familial ties to market makers and the NYSE may make it less likely that she’d consider policy reforms which might benefit the public and hurt Griffin’s business,” Edwards said. “For example, a transaction-based tax would likely significantly shrink overall trading volume. That isn’t something I’d expect her, Griffin or the NYSE to support.”

While Griffin’s $3 million might seem like pocket change for someone with his immense wealth, it is not paltry to most Americans, or to most political campaigns. Loeffler’s campaign, for instance, raised $28 million in total, and only $3.8 million of that amount came from individual contributions. Another $23 million came from the candidate herself.

The Loeffler campaign did not reply to Salon’s request for comment. Citadel Securities eventually provided a comment from Griffin’s spokesperson, printed above in full.

The post This hedge-fund billionaire is a huge fan of Sen. Kelly Loeffler — but why? appeared first on Salon.com.

Richmond, whose appointment to head the White House Office of Public Engagement angered many progressives concerned about his ties to big oil and gas firms, vowed that the incoming Biden administration will be friendly to corporations and conservatives at the Wall Street Journal CEO Council.

Richmond said he hoped to be a “conduit straight into the White House for American corporations,” according to Bloomberg News, and vowed to have an “open-door policy” for corporate executives.

“For me, nobody’s going to persuade me that—somehow, someway—that CEOs in this country are bad people,” Richmond said. “CEOs in this country are creating jobs, they are supporting families, and they are doing all those things. And they deserve a seat at the table, and they will have a seat at the table.”

Richmond said that President-elect Joe Biden would make good on his campaign pledge to raise taxes on corporations and the rich to fund social programs but “didn’t want to stymie research and innovation,” according to the Wall Street Journal.

“It’s not punitive. We will just do those things we find that are absolutely necessary to do,” he said. “And if that means raising the corporate tax rate to achieve infrastructure investment, which is important to both business and to normal everyday citizens, I think that that may be some middle ground that everybody can support.”

Richmond also said that he would create a new position in his office to reach out to conservatives.

“Right now I’m trying to set up the office and I’m actually looking at establishing a position that reaches out to conservatives — because it’s about moving forward. We cannot stay where we are,” he said. “We’re not elected just to help Democrats or urban cities or minorities. We were elected to help this entire country and that means reaching out to conservatives, that means reaching out to rural areas, reaching out to people who didn’t vote for us.”

Richmond suggested that an infrastructure bill could bring the two parties together.

“The famous words are, ‘There’s no such thing as a Democratic bridge or a Republican bridge,'” he said, adding that he hopes Congress can introduce “a very quick infrastructure bill to put people to work rebuilding our crumbling infrastructure making the country greener and cleaner.”

Richmond’s remarks irked some on the left after Biden sought to build a coalition that includes progressives urging him to focus on struggling Americans rather than corporations.

The New Orleans Democrat, who will also serve as a senior adviser to the president and a co-chair for Biden’s inauguration, has been one of the biggest recipients of campaign contributions from oil and gas companies. Some constituents have accused him of ignoring the needs of his district, which is home to some of the most polluted parts of the country, and failing to push for stricter regulations. Richmond also joined Republicans to vote to increase fossil fuel exports and develop the Keystone pipeline while opposing Democratic legislation to limit fracking pollution.

The progressive Sunrise Movement called Richmond’s appointment a “betrayal” because he “cozied up to big oil and gas” and “stayed silent and ignored meeting with organizations in his own community while they suffered from toxic pollution and sea-level rise.”

A Biden transition team official told The Guardian that Richmond will be tasked with working “with a wide range of groups to make sure that the Biden-Harris administration has a direct dialogue with the American people” and that the Biden administration is committed to tackling the “climate crisis and fight for environmental justice.”

Richmond is one of several Biden appointees that has already caused friction with the left. Numerous top administration picks worked at WestExec Advisors, a secretive consulting firm staffed by numerous Obama administration alums that helps firms land Pentagon contracts, and as former lobbyists, like Steve Ricchetti, a longtime Democratic aide tapped to serve as a top adviser to Biden.

“If Joe Biden continues making corporate-friendly appointments to his White House, he will risk quickly fracturing the hard-earned goodwill his team built with progressives to defeat Donald Trump,” Alexandra Rojas, the executive director of the progressive group Justice Democrats, said last month. “A Biden administration dominated by corporate-friendly insiders like Steve Ricchetti and Cedric Richmond will not help the President-elect usher in the most progressive Democratic administration in generations.”

The post Top Biden adviser vows Wall Street CEOs and GOP will get a “conduit straight into the White House” appeared first on Salon.com.