Pass the Popcorn

I’ve always felt that the whole Russia hysteria is primarily about those who screwed the pooch in 2016 finding a scapegoat upon which they would attach the blame.

At best, the underlying criminal act is a violation of campaign finance law, and given the current dysfunctional nature of the Federal Elections Commission mitigates against even that.

That being said, in this sort of situation, it’s frequently not the crime, it’s the coverup, and when the FBI executes a predawn raid on one of the principals in the matter, it’s starting to get really interesting:

FBI agents raided the home in Alexandria, Va., of President Trump’s former campaign chairman, arriving in the pre-dawn hours late last month and seizing documents and other materials related to the special counsel investigation of Russian meddling in the 2016 election.

 The raid, which occurred without warning on July 26, signaled an aggressive new approach by special counsel Robert S. Mueller III and his team in dealing with a key figure in the Russia inquiry. Manafort has been under increasing pressure as the Mueller team looked into his personal finances and his professional career as a highly paid foreign political consultant.

 Using a search warrant, agents appeared the day Manafort was scheduled to testify before the Senate Judiciary Committee and a day after he met voluntarily with Senate Intelligence Committee staff members.

 The search warrant requested documents related to tax, banking and other matters. People familiar with the search said agents departed the Manafort residence with a trove of material, including binders prepared ahead of Manafort’s congressional testimony.

 Investigators in the Russia inquiry have previously sought documents with subpoenas, which are less intrusive and confrontational than a search warrant. With a warrant, agents can inspect a physical location and seize any useful information. To get a judge to sign off on a search warrant, prosecutors must show that there is probable cause that a crime has been committed

This must have rattled their cages.

Linkage

John Oliver describes the cluterf%$# that is the US Border Patrol:

    Looting 101

    Common across American business, but particularly cherished by the tech sector, is stock grants to senior management.

    It turns out that the primary reason for this is that it allows companies to ignore the cost of stratospheric pay levels and creating misleading metrics to justify bonuses:

    Investors liked what they saw in PayPal’s second-quarter financial results, reported by the digital and mobile payments giant on July 26. Revenues grew to $3.14 billion in the quarter that ended in June, an increase of 18 percent over the same period last year. Total payment volume of $106 billion was up 23 percent, year over year.

    Even better, PayPal’s favored earnings-per-share measure — which it does not calculate in accordance with generally accepted accounting principles, or GAAP — came in at 46 cents per share, 3 cents more than Wall Street analysts had expected. The company has trained investors to focus on this number, rather than on the less pretty GAAP-compliant numbers most companies are judged by. And focus they did.

    Exceeding analysts’ estimates — “beating the number,” in Wall Street parlance — is crucial for any corporate leader interested in keeping his or her stock price aloft. Even the smallest earnings miss can send shares tumbling.

    ………

    Naturally, many factors contributed to PayPal’s second-quarter earnings. But one element stands out: the amount the company dispensed to employees in the form of stock-based compensation.

    How could stock-based compensation — which is a company expense, after all — have helped PayPal’s performance in the quarter? Simple. The company does not consider stock awards a cost when calculating its favored earnings measure. So when PayPal doles out more stock compensation than it has done historically, all else being equal, its chosen non-GAAP income growth looks better.

    Accounting rules have required companies to include stock-based compensation as a cost of doing business for years. That’s as it should be: Stock awards have value, after all, or employees wouldn’t accept them as pay. And that value should be run through a company’s financial statements as an expense.

    ………

    Back in the 1990s, technology companies argued strenuously against having to run stock compensation costs through their profit-and-loss statements. Who can blame them for wanting to make an expense disappear?

    They lost that battle with the accounting rule makers. But then they took a new tack: Technology companies began providing alternative earnings calculations without such costs alongside results that were accounted for under GAAP, essentially offering two sets of numbers every quarter. The non-GAAP statements — called pro forma numbers or adjusted results — often exclude expenses like stock awards and acquisition costs. And the equity analysts who hold such sway on Wall Street seem to be fine with them.

    ………

    PayPal is by no means the only company that adds back the costs of stock-based compensation to its unconventional earnings calculations. Many technology companies do, contending, as PayPal does, that their own arithmetic “provides investors a consistent basis for assessing the company’s performance and helps to facilitate comparisons across different periods.”

    ………

    PayPal takes the opposite approach. [From companies like Google and Facebook] And look at what it does to its results.

    Under generally accepted accounting principles, PayPal reported operating income of $430 million in the second quarter of 2017. That was up almost 16 percent from the $371 million it produced in the same period last year.

    But under PayPal’s alternative accounting, its non-GAAP operating income was $659 million in the June quarter, an increase of almost 25 percent from 2016.

    So what’s to account for the added $230 million in operating income under PayPal’s preferred calculation? Most of it — $192 million — was stock-based compensation PayPal dispensed to employees in the June quarter and added back to its results as calculated under GAAP.

    That was a big jump — 57 percent — from the $122 million PayPal handed out during the second quarter of 2016. And back in 2015, PayPal reported just $89 million in stock awards.

    ………

    Craig Maurer is a partner at Autonomous, an independent investment research firm in New York. He follows payments companies and rates PayPal’s stock an underperformer.

    In a telephone interview, Mr. Maurer was critical of how the company accounts for stock-based pay. He said that as a percentage of PayPal’s non-GAAP operating income, stock-based compensation has risen to 29 percent this year from 17 percent in 2015.

    “They are literally taking a cost out of their income statement, moving it to a different line and backing it out of results,” Mr. Maurer said in an interview. “And you can see that it’s adding significantly to their ability to meet earnings expectations. If you backed out the difference between what we were expecting on stock-based comp in the quarter versus what they reported, it was 2 cents of earnings.”

    ………

    PayPal’s stock-based compensation practices have another noteworthy effect: They drive executive pay higher at the company. Here’s how.

    The company says it has three main metrics for calculating its managers’ performance pay each year. One of those measures, its proxy shows, is non-GAAP net income. So, as PayPal awards more and more stock to its executives and employees, non-GAAP net income shows better growth. And the greater that growth, the more incentive pay the company awards to its top executives.

    For PayPal insiders, at least, that’s one virtuous circle.

    While I have commented on a number of problems in the American economy, particularly excessive rent seeking through IP, it’s important to note that business practices that have the effect of allowing managers to loot their companies, and defraud investors are a problem as well.

    An Interesting Take on Pommes Frites

    Natalie came across a french fry recipe online.

    First, you pickle them in brine before you fry them up.

    After a week or so, open the jar and rinse the fries off and then pat dry.

    Fry up as you would normal fries, and add salt immediately after cooking is done, and put on paper towels to drain the oil.

    Some notes:

    • Rinse very thoroughly.
    • The fries turn brown much faster than regular fries, well before they are done.  I think that some of the starches are converted to simple  sugars.
    • They are a lot like salt and vinegar potato chips.

    I rather liked them.

    Elon Musk Naked

    No, no pictures, I am referring to the fact that the emperor may have no clothes, and Elon Musk, in particular his Tesla Motors project, seems to be increasingly unmoored from reality:

    If you’re a hedge fund analyst looking over a public company’s numbers and you see a troubling financial trend making itself evident in the data (like a company burning through cash while booking revenue for a product that is seems perhaps incapable of delivering in the volume promised in the timeframe laid out), you will feel the natural urge to short that company’s stock and wait quietly for the money and praise to roll in.

    But we want you to pause for a moment and look at the top of that file. Does it say “Tesla Motors, Inc. (TSLA)”?

    It does?

    Yeah, you’re going to want to rethink that short, homie, because you have not factored “Blind Elon-ic Faith” into your Alpha.

    But you wouldn’t be alone.

    Tesla reported yesterday, and from a purely logical perspective it was a mixed bag:

    Tesla’s reported a net loss of $336 million, or $2.04 per share, compared to a loss of $293 million, or $2.09 a share, a year ago.

     Excluding stock based compensation, Tesla lost $1.33 a share, which was narrower than expected, according to a consensus estimate from Thomson Reuters.

     Revenue climbed to $2.79 billion from $1.27 billion in the year-ago period, and outpacing Wall Street’s estimates of $2.51 billion.

    Yeah, we said “mixed”:

    Heading into the earnings report, analysts expressed concerns about whether Tesla would ramp up production of its Model 3, a more affordable electric car with a base cost of $35,000, quick enough. In the past, Tesla has struggled with production issues.

    Musk also said that he hasn’t ruled out dipping a toe back into the debt market.

    See, Tesla is currently promising that it can make 1,500 of these things in the entire third quarter of this year, but Elon is also telling anyone who will listen that he will be able to make 10,000 in a week by the end of 2018. That kind of ramp-up has led a lot of people in the asset management game to doubt Tesla’s long-term strength, what with logic dictating that cash will burn at the altar of Elon’s ambition, and that the fire might rage out of control while he’s busy glancing over at his rockets, his Hyperloop tunnels or putting the finishing touches on his dope-ass new solar roof. All those factors are causing David Einhorn and a legion of his fellow traders to go short on TSLA.

    Just to remind you, their plant used to be the joint Toyota-GM NUMMI plant, and the most cars that it ever produced under that management was 428,633 units in 2006, or less than 8,500 units a week, and Tesla is saying that it can ramp up from about 120 units a week to 10,000 units a week over the next 18 months.

    For his next trick, Elon Musk will appoint a horse to his board of directors.

    But the underlying story here is that Tesla releases profoundly mixed numbers, reveals that its production ramp up plans are unrealistic, and they get shorted by speculators.

    In response to an awful quarterly report, the stock goes up, and the speculators take it on the chin, because ……… Elon!

    This is what happens when you short a cult. At this point, R Kelly has nothing on Elon Musk. And the notion that a short squeeze might put a shudder in Tesla’s rise seems – like all other rational ideas that come in contact with Tesla – to be neutered by whatever Tesla investors think of Tesla.

     So, here’s our last word of caution to you hedgie analysts out there crunching numbers on TSLA: You’re wasting your time. Tesla isn’t about facts and figures, it’s about belief in the divinity of Elon f%$#ing Musk. You’ll never understand what is happening because the Kool-Aid is the stock and a lot of people can’t stop drinking it.

    (%$# mine)

    So, Tesla is facing a unionization effort from employees who say that their manufacturing facility is abusive and dangerous, and the corporate response has been (I am not kidding here) free frozen yogurt at their Freemont, CA plant.

    So now Tesla is warning its workforce, one that already has issues with excessive mandatory overtime ans safety issues that they will be facing, “Production Hell“.

    Honestly, I’m half expecting a strike in the next 18 months:

    When Tesla chief executive Elon Musk handed over the first 30 Model 3 sedans to reservation holders last Friday, he warned employees they’ll be in “production hell” for the next several months. It was a curious remark, as Tesla employees have been voicing concerns about workplace injuries since earlier this year. Employees reiterated those points in a letter to Tesla’s board Monday, and demanded answers to questions about pay transparency and safety.

    “We’re tired of suffering preventable injury after preventable injury,” said Michael Catura, a production associate at Tesla, in a statement. “It impacts morale, it slows down production and it’s of course traumatizing and financially difficult for the affected person. We want to know what the company’s plan is to address this problem, and to see whether or not any progress is being made.”

    The letter, signed by the Tesla Workers’ Organizing Committee, said it believes in Tesla’s mission to build a mass-market, emission-free electric vehicle. But the committee cites a number of ongoing issues, and it requests access to a safety plan and clarity on pay and non-retaliation agreements for employees trying to form a union. Earlier this month, a group of 10 factory employees presented a petition with questions about how workers are paid and how raises are distributed. BuzzFeed reported that about 400 employees had signed the petition.

    Welfare For Overprivileged Caucasians

    Here is a new phrase to me, “Rest and Vest”.

    It refers to a phenomenon where entitled dotcommers are allowed to do no works for months on end until their stock options vest.

    The sense of entitlement is really staggering:

    On a sunny summer morning, a Facebook engineer woke up to go to work but felt ill. She ran to her bathroom and threw up. “I thought I was getting sick,” the engineer recalled.

    It wasn’t a virus or food poisoning. She was having a bad reaction to her job.

    She was making $1 million a year, mostly in stock, and running a team of about three dozen people, she told Business Insider. And she had worked herself into a state of exhaustion in the three years since Facebook had acquired her previous company. The acquisition had been highly political, the integration wasn’t going well, and she had been killing herself to make it more successful and protect her people from losing their jobs over it.

    As tired as she was, she couldn’t just quit this job. She owed a big chunk of money in taxes thanks to that stock and needed her salary to pay those taxes.

    But after getting violently ill at the thought of going to work, she decided not to go in. Not that day. Not ever again. And she knew she wouldn’t get fired.

    Because not going to work was actually her manager’s idea.

    The previous day she had told him she would be leaving the company at the end of the year, six months away. She wanted to spend the rest of the year wrapping up her projects but not taking on any more, collecting on the stock that would vest by year end and making the money she needed to pay her taxes.

    “My manager and I had lots of conversations. I teetered on leaving so many times,” she said. “But this time was for real. I was going to see these projects to a healthy state and then I needed to go. I felt good about it. The next thing, he told me not to come in.”

    She panicked thinking he was firing her, but he explained she wasn’t being terminated at all. “Just don’t come to work,” he told her. “You’re burned out and need a break. Just don’t talk about it, and everyone will assume you’re on someone else’s team.”

    ………

    And that’s how this hardworking, conscientious engineer wound up joining the least secret secret club in the Valley, known as “rest and vest.”

    “Resting and vesting” is when an employee, typically an engineer, has an easy workload (if any job responsibilities at all) and hangs out on the company’s payroll collecting full pay and stock. Stock is often the bigger chunk of total compensation for a senior engineer than salary.

    Once she was in rest-and-vest mode, this engineer spent her time attending tech conferences, working on pet coding projects, networking with friends, and planning her next career move.

    She realized that her manager let her rest and vest to keep her quiet about the problems with that acquisition, so she had time to find her next thing. Had he terminated her immediately, she would have been incensed. “Everyone knew I had a big mouth and would speak out,” she said. “He figured, ‘Hey, it costs us next to nothing keep her happy for six months.'”

    This is nuts, and it is a sign of a bloated and dysfunctional industry.

    The reason that this effects the rest of us is that these excesses indicate a misallocation of resources, and as such they are not available to more useful purposes than sharing cat pictures.

    To paraphrase Ike, every redundant social media site that is made, every web 2.0 site that is launched, every IPO that is launched signifies, in the final sense, a theft from those who actually do useful work.

    What a Surprise………

    America’s state security apparatus is using the classification review process to suppress a book that details torture at Guantanamo Bay:

    A former NCIS investigator who worked at the wartime prison during the Bush administration has written a book, “Unjustifiable Means.” Now his civil liberties lawyers are asking a bipartisan group of senators for help getting the Pentagon to clear it for publication.

    Retired 27-year career federal worker Mark Fallon’s manuscript “has been held up for more than seven months in ‘pre-publication review,’ and we are increasingly concerned that some in the government are committed to suppressing Mr. Fallon’s account,” the lawyers write six senators. They include Republican John McCain, the former Vietnam War prisoner, and Democrat Dianne Feinstein, who chaired the Senate Intelligence Committee when it drew up the so-called Torture Report on the Bush administration’s secret CIA prison network.

    The lawyers’ letter describes what might be troubling Defense Department officials about the book:

    “ ‘Unjustifiable Means’ concerns the Bush administration’s policies authorizing the cruel treatment and torture of detainees. It is an insider’s account of the moral and strategic costs of those policies and the many ways that honorable Americans working in government protested and resisted them.”

    Between 2002 and 2004 Fallon was Special Agent in Charge of the Department of Defense’s Criminal Investigation Task Force, and was responsible for some interrogations and evaluating intelligence with an eye toward prosecution by military commission. He has been outspokenly critical of decision making during that period, telling the Miami Herald last year that some captives were brought to Guantánamo based on “the sketchiest bit of intelligence with nothing to corroborate.”

    The did the same thing with Valerie Plame’s book.

    This sh%$ is getting really old.

    Linkage

    Have some Simon’s cat:

    The Democratic Party Establishment in a Nut Shell

    The web publication Slate is fairly consistently center left.

    Of course, that won’t stop them from an aggressive campaign of union busting against their own employees, including firing organizers.

    This is the problem with Clinton/Obama liberalism:  they are all for progressive ideas, until those might slightly inconvenience them.

    They support the working man, but they want their cheap sh%$ from China, and they want “Undocumented Americans” treated fairly, but they don’t want to pay more to get their landscaping done, and they are horrified by price gouging by big Pharma and excesses of Wall Street, but they want the campaign donations.

    If you wonder why promises of economic justice by the mainstream Democratic party are not taken seriously by much of the electorate, this is it:

    Slate has been a solidly liberal voice online for the past two decades. So when its staff decided to form a union earlier this year, they didn’t expect a drawn-out labor fight. Yet Slate management has put up stiff resistance to the effort for months, using rhetoric that anyone familiar with attempts to weaken organized labor will recognize.

    The site’s management declined to voluntarily recognize a union in March, after more than 90 percent of editorial staff signed cards signaling their intent to join the Writers Guild of America-East. Higher-ups, including the site’s editor-in-chief and the company’s chairman, have since tried to dissuade them from unionizing at all, according to internal emails obtained by Splinter.

    Current and former employees, some of whom spoke on the condition of anonymity out of fear of retribution, said it’s left Slate organizers grappling with how aggressively they should force the issue in a newsroom known for technocratic liberalism. The question has become even more complicated as the publication has fashioned itself as a standard-bearer of the anti-Donald Trump resistance.

    ………

    Current and former staffers said that the top-down campaign against the union hasn’t been as cartoonish as what’s been seen at other media outlets, such as DNAinfo and Gothamist, where management essentially threatened to shutter the sites if they unionized. But the pushback has been consistent from the start.

    Soon after the vote to unionize in March, Editor in Chief Julia Turner led a non-compulsory staff meeting at which management outlined its anti-union position in full, according to both interviews with staffers and internal emails. Jacob Weisberg—former editor of the site, and currently both the chairman of the Slate Group and primary host of its popular Trumpcast podcast—has largely spearheaded the efforts through memos to staff filled with familiar anti-union talking points.

    ………

    Slate management has called for a second vote to be administered by the National Labor Relations Board, sowing trepidation among organizers who fear a time-intensive process in an agency increasingly stocked with Trump appointees. Union organizers counter-offered, calling for a second vote conducted by a private third party. So far, Slate brass haven’t budged.

    “We can only conclude that this is their time-consuming and demoralizing way of discouraging us from unionizing,” the Slate Organizing Committee said in a statement to Splinter. “We still feel strongly that we deserve a seat at the table to negotiate a contract that offers us more security in this volatile and uncertain industry.”

    ………

    Slate’s union drive began during the final stretch of the 2016 presidential campaign, when then-politics editor Tommy Craggs—a onetime executive editor of Gawker Media—began discussing the idea with colleagues in earnest. He told Splinter in an email that he approached Turner in October in order to avoid appearing overly hostile.

    ………

    “I really don’t know if the union drive would’ve been better off if I’d never said a word to her,” Craggs continued. “I do know that I never expected to hear the Slate [editor in chief] talking like a Heritage Foundation white paper.”

    ………

    Craggs was among five staffers, including another editor involved in the union drive, L.V. Anderson, let go from Slate in February. A company spokeswoman called all the job losses “layoffs” at the time, saying that they “were unrelated to any union activity.” But Craggs, pointing to the ongoing search for his replacement, disputes that characterization. “I don’t think I got fired for trying to unionize Slate,” he wrote. “I got fired because I’m the sort of person who would try to unionize Slate.”

    One of the Rules of Whacked Out Conspiracy Theorists

    No matter where they start, all end up blaming the Jews, case in point, Russia conspiracy nutjob Louise Mensch:

    You can say a lot of things about Louise Mensch, everyone’s favorite conspiracy theorist and unhinged internet troll, but you can’t accuse her of not knowing how to spin a good yarn. The author of novels like Venus Envy and A Kept Woman—the titles give you a pretty good idea of what’s inside—is a natural storyteller, a gift she’s been using lately on Twitter to convince her hundreds of thousands of followers that she is, as my friend Jamie Kirchick wrote, “perpetually on the cusp of exposing a massive conspiracy on the part of Russia, dating back decades, to make Donald Trump president of the United States.” Yesterday, Mensch introduced an unexpected plot twist to her Twitter potboiler: America wasn’t hacked by the Russians alone; the Jews helped.

    One Jew in particular: Bibi Netanyahu, dark lord and, apparently, apprentice to puppet-master Putin.

    Because the pleasure of indulging in lunacy lies in the minute details, here goes. The saga began last night, when Mike Cernovich, himself a fan of anti-Semitic conspiracy theories, tweeted to protest the firing of Derek Harvey, a National Security Council official sacked by National Security Advisor H.R. McMaster, suggesting that Harvey was let go because of his allegiance to Israel. Another Twitter user responded and accused Cernovich of being an agent of a Russian-sponsored coup d’etat. It was precisely the kind of language that summoned Mensch into the fray.

    “Love you sir” she tweeted back, with all the subtlety of an oversexed British boarding school adolescent. And then, having warmed up to her subject, she continued: Obama, she tweeted, was right to despise Netanyahu. Oh, and Netanyahu was colluding with Russia to help Trump take an ax to the beating heart of American democracy.

    ………

    What is Netanyahu, then? And where’s the proof of his subterfuge? What’s up with the RISSAD, which used to be called the Mossad but which Mensch has renamed Russian Israeli Trolls Loyal to Moscow Over Jerusalem, suggesting Israeli intelligence, too, is in Putin’s pocket? And why rehash, as Mensch did this morning, the ridiculous canard that Chabad is secretly a vessel for connecting the Kremlin and the Knesset?

    Anyone who had two brain cells to rub together knew that Mensch was an addled conspiracy theorist, but because it fit a narrative, she got an OP/ED in the New York Times.

    Even if Russia did everything that they have been accused of in exactly the manner accused, and the evidence is at best sparse, it is neither unusual nor unprecedented behavior.

    US interventions in foreign elections, including Yeltsin’s 1996 reelection in Russia was far more extensive, including tacit support of vote fraud, as was Winston Churchill’s intervention by his intelligence agencies in the 1940 US Presidential election.

    As I’ve said before, Donald Trump’s election was a perfect storm of many factors, but the entire, “A noun, a verb, and Vladimir Putin,” crap serves only to gloss over the very real institutional failures of the Democratic Party, and as such continues to set it up for electoral debacles.

    Not a Surprise

    Getting rid of Travis Kalanick may have been hard for Uber’s investors and board of directors. But replacing him could prove harder.

    As the company’s board inches ahead in its search for a new chief executive to run the embattled ride-hailing company, candidates are dropping out before they’ve even met with every board member. Kalanick himself is rumored to be angling for a return, and some investors question whether any candidate could fill its departed leader’s shoes.

    In other words, this is not a typical job opening.

    This is not a surprise.  The best parts of Uber are profoundly toxic, the worst parts are illegal, and Travis Kalanick is attempting to regain control of the company, which, considering that he may have control of a majority of voting shares, is likely to put off anyone who has any concern about their reputation.

    Any attempt to fix Uber will likely fail because, with Kalanick in the wings, the employees will likely slow-walk any attempted reforms, because they believe that they will be reversed.

    It’s a toxic mess, and the only person willing to step into it will have to either have nothing to lose, or have no f%$#s left to give.

    There aren’t a whole bunch of those in the C-suite.

    When Donald Trump is the Adult in the Room………

    Donald Trump has decided (IMNSHO correctly) that Afghanistan, aka, “The Graveyard of Empires,” but the very serious people in his security establishment want to continue doubling down on failure:

    President Donald Trump’s top national-security advisers are searching for a way to overcome the commander-in-chief’s reluctance to send thousands more troops to Afghanistan as divisions on the National Security Council complicate strategy for the 16-year-old war, officials said.

    The president’s reluctance to embrace an open-ended commitment has resurrected discussion of other options, including proposals to scale back the U.S. military presence in Afghanistan or to hire private contractors to play a bigger role. Top Trump administration officials met to discuss the options Thursday after Mr. Trump asked his team for alternatives, according to current and former Trump administration officials.

    The search for a strategy for Afghanistan comes amid upheaval at the NSC following the removal of three staff members by H.R. McMaster, the national security adviser. The three officials were hired by his predecessor, Mike Flynn, before he was forced to resign after 24 days in the post.

    ………

    Defense Secretary Jim Mattis had hoped to have a new Afghan strategy in place by mid-July, but White House talks bogged down as Mr. Trump challenged the need to send more U.S. forces into a fight with no clear plan for success, the officials said.

    At a meeting last month with his national security team, Mr. Trump questioned the leadership of Gen. John Nicholson, the Kabul-based commander of U.S.-led forces in Afghanistan, the officials said. The president’s criticism, reported first by MSNBC on Wednesday, drew a brusque response on Thursday from Sen. John McCain, (R., Ariz.).

    Trump is right, and the US foreign policy establishment, aka, “The Blob,” is wrong.

    This should be no surprise.  The Blob supported Libya, and supporting al Qaeda in Syria, and fomented a coup in the Ukraine, and they were all disasters.

    Rule 1 of foreign policy:  The Blob is always wrong.

    Rule 2 of foreign policy:  See rule 1.

    Live in Obedient Fear, Citizen!


    ………

    In February, San Antonio District Attorney Nico LaHood allegedly did just that. LaHood was prosecuting Miguel Martinez, who stood accused of shooting a graduate student named Laura Carter in the head during a drug deal gone bad. Martinez’s trial derailed soon after it began. On the second day, the government disclosed that its star witness, who was also a possible suspect in the killing, had once had a sexual encounter with a prosecutor in the DA’s office. The defense argued that the relationship gave the witness a motive to help the government and gave the government a reason not to investigate or charge the witness. The defense accused prosecutors of violating their constitutional duty by failing to disclose that information before trial. The defense lawyers asked for a mistrial and indicated they may ask the judge to bar further prosecution.

    According to defense pleadings, LaHood threatened to shut down the opposing counsels’ practice during a meeting in the judge’s chambers. He allegedly said he would “go to the media and do whatever it took” and that he did “not care what happened to him.” Their client would also be at risk, LaHood allegedly said, because he would be “better prepared for trial the next time” and he would “pick a better jury.” The defense lawyers, Christian Henricksen and Joe Gonzalez, asked for a mistrial. Trial Judge Lori Valenzuela granted their motion.
    In March, the defense moved to bar future prosecution. At a hearing the following month, LaHood denied under oath that he’d threatened the lawyers’ livelihoods. He claimed the defense’s allegations were false and accused the defense attorneys of acting in bad faith when they alleged prosecutorial misconduct.

    Valenzuela, who had observed the incident, then took the stand. (Valenzuela did not preside over this April hearing, as she was a witness to the events at issue.) She described how, without provocation, LaHood had threatened to make sure the defense lawyers never got appointed on another case, becoming so enraged that she feared “somebody would get hurt physically.” She explained that LaHood may have committed misdemeanor official oppression, a crime that occurs when an official uses his power to “mistreat” others or impede them in the exercise of their rights.

    Might have committed official oppression? Might have?

    Seriously?

    He did it in front of a judge who testified against him.

    He needs to be jailed and disbarred.

    Schadenfreude Overload

    New favorite German word: Backpfeifengesicht, a face that needs to be slapped.

    — Sarah Sh. (@psygh) July 11, 2017

    Martin Shkreli has been found guilty of fraud and faces up to 20 years in prison:

    Martin Shkreli, 34, has confidently courted controversy in recent years, bulldozing his way into Wall Street and the drug industry, raising the price of a lifesaving drug by 5,000 percent overnight, boasting that he would outwit prosecutors in his federal fraud case, and live-streaming and tweeting throughout his five-week trial.

    But on Friday, after five days of deliberations, jurors convicted him on three counts of fraud in federal court, and he now faces up to 20 years in prison on each of the first two counts, and up to five years on the final count.

    Mr. Shkreli looked shaken as the judge read the verdict. But not long after, he appeared outside of court and returned to form, saying that he was “delighted, in many ways,” with the verdict. “This was a witch hunt of epic proportions, and maybe they found one or two broomsticks,” he said.

    Later in the afternoon, he was live-streaming once more, sipping beer and joking about prison life from his Manhattan apartment.

    ………

    He never seemed to take his case seriously, meeting with federal authorities without a lawyer, making faces during testimony, calling the prosecution “junior varsity” and reading a book during final statements.

    Jurors convicted Mr. Shkreli of three of the eight counts: securities fraud in connection with his hedge fund MSMB Capital; securities fraud in connection with MSMB Healthcare; and conspiracy to commit securities fraud related to the Retrophin stock scheme, in which he tried to quietly control a huge portion of Retrophin stock.

    It would be nice if something like this happened to Lloyd Blankfein and Jamie Dimon, though.

    You shouldn’t have to be as Backpfeifengesicht as Shkreli in order to be prosecuted.

    Linkage

    Reader(s) of this blog may be aware of my fondness of the juxtaposition of engineering and history. Case in point, this military training film about mechanical ballistic computers from the early 1950s:

    A Big Deal, but Not a Huge Deal

    Robert Mueller has empaneled a grand jury as a part of his investigation of the Trump campaign.

    There have been a lot of people implying that an indictment is imminent, but it’s not.

    I would be surprised if to see any indictments before year’s end.

    What it does mean, however, is that Muller can now issue subpoenas to compel testimony and turn over evidence.

    It’s serious, but not, “Oh my God,” serious.

    Needless to say, for anyone contacted by Mueller’s team, it’s time to lawyer up.