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Obama Steps In To Defend Hillary: DOJ Fights To Block Clinton Deposition

28.05.2016 Tyler Durden 0

If there was any doubt, or suspense on which side of the Hillary email scandal the “impartial” Department of Justice stands, the suspense was lifted and all was revealed yesterday when as The Hill reported, the Obama administration stepped into the ongoing Judicial Watch lawsuit and is fighting to prevent former SecState Hillary Clinton from being deposed.

Late Thursday evening the Justice Department, under US attorney general Loretta Lynch, first appointed in 1999 by none other than Bill Clinton,  filed a court motion opposing the Clinton deposition request from conservative legal watchdog Judicial Watch, claiming that the organization was trying to dramatically expand the scope of the lawsuit.

 

As a reminder, as revealed last night, in the first deposition from the ongoing Judicial Watch lawsuit – which has obtained or seeks depositions from all SecState staffers close to Hillary – we learned thanks to State Department veteran Lewis Lukens, that not only did Hillary not know how to use a computer but that her email actually had no password protection.

It is these kinds of revelations that the Department of Justice, in its quest for “justice”, is seeking to prevent from seeing the light of day, only in the official filing the DOJ was a little more circumspect. Judicial Watch is “seeking instead to transform these proceedings into a wide-ranging inquiry into matters beyond the scope of the court’s order and unrelated to the FOIA request at issue in this case,” government lawyers wrote in their filing, referring to the Freedom of Information Act. The lawyers wrote that the request to interview Clinton “is wholly inappropriate” before depositions are finished in a separate case also concerning the email server.

In light of the recent report by the State Department Inspector General, with which Hillary also refused to cooperate, one could say it is entirely approprirate for her to be deposed.

As a reminder, the Judicial Watch FOIA case began as a way to seek documents about talking points related to the 2012 terror attack on U.S. facilities in Benghazi, Libya, but has since grown to encompass wider questions about Clinton’s use of a personal server while working as secretary of State. 

Last week, Judicial Watch asked the court to interview Clinton and five other current and former State Department officials about the server, after it received a judge’s permission to move ahead with the process. The case is the second in which Judicial Watch has been granted approval to depose witnesses to gather evidence about Clinton’s email setup. In the other case, interviews of current and former Clinton aides have already begun.

For now, Hillary is not scheduled to answer questions as part of that case, through a federal judge has warned that she could be called upon in the future. It is this potentially destructive deposition, that the DOJ is seeking to hide.

In the government’s filing late Thursday, the Justice Department said that Judicial Watch’s request is “overbroad and duplicative.” It claimed the group should complete the depositions in the other case first before demanding an interview of Clinton and the other officials.

In other words, the DOJ is stalling for time to prevent a Hillary deposition until some time in July by which point Clinton should at least wrapped up have the democratic nomination.

However, the department did say that it would not oppose a request to subpoena Jake Sullivan, a former senior State Department official and current top aide in Clinton’s presidential campaign, as long as questions were “on the limited topic” of officials using personal email accounts at the department.

Finally, the DOJ said it would be willing to provide an unnamed witness to provide answers on behalf of the State Department in response to narrow questions about the FOIA request at the heart of the case. In other words an untainted surrogate who would provide answers in lieu of Hillary.

That solution, government lawyers claimed, would “avoid the burden and expense” of going through a deposition process “that replicates activities already underway in another, overlapping case between the parties.”

Finally, tecall that in July 2015, the inspector general for the State Department announced that as a result of the classified emails found in Clinton’s personal server, that the inspectors general had sent a non-criminal “referral” to the Justice Department over the matter. As a result, US Attorney General Loretta Lynch and her department, would have to determine whether to open a criminal investigation into Clinton’s affairs.

As a further reminder, recall that before becoming attorney general, Lynch served as U.S. Attorney for the Eastern District of New York. It was her second time in the position, having been first appointed by President Bill Clinton in 1999

At the time, Lynch declined to say whether her connection to the Clintons creates a conflict of interest for her. We finally have the official answer.

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Goldman Sachs Is The Gift That Keeps On Giving… To The Clintons

28.05.2016 Tyler Durden 0

By now we all know that Goldman Sachs is the gift that keeps on giving to the Clintons. Whether it’s paying millions out for speeches, investing in family member’s failing hedge fund ventures, or donating hundreds of thousands to the Clinton Foundation, Goldman seems to be keeping a close relationship with the family.

What’s a more fun development to watch (other than to see Lloyd Blankfein lose money invested with a Clinton son-in-law) is how persistent The Intercept is being with Hillary about Goldman. Every chance it gets, The Intercept has a reporter asking Clinton about Goldman related items, and of course they never get an answer.

Earlier this year The Intercept caught up with Hillary and asked if the transcripts of the speeches given to Goldman would be released. Clinton’s response was just to laugh of course, because as we all know, those will never be released… on purpose anyway.

The Intercept: “Hi Secretary Clinton, will you release the transcript of your paid speeches to Goldman Sachs?”

Clinton: “Ha ha ha ha ha ha ha”

At a Clinton campaign rally in San Francisco last Thursday, The Intercept’s Lee Fang caught up with Clinton again and this time wanted to ask about Goldman CEO Lloyd Blankfein’s investment in her son-in-law Marc Mezvinsky’s hedge fund Eaglevale Partners.

The Intercept: “Hi Secretary Clinton, do you know how much money Lloyd Blankfein invested in your son-in-law’s hedge fund?

After being ignored multiple times, Clinton’s traveling press secretary Nick Merrill stepped to ask just what Fang was trying to find out more about.

Merrill: “Hey buddy how are you. What’s your name?”

The Intercept: “Lee Fang”

Merrill: “Hi I’m Nick, I’m her spokesperson. What are you trying to find out more about?”

The Intercept: I want to know how much money Lloyd Blankfein invested in Marc Mezvinsky’s hedge fund. Do you know how much money Nick?”

Merrill: “I don’t know has it been reported?”

The Intercept: “No it hasn’t. Could you find out the amount for me?”

Merrill: “I don’t know what the amount is. You wanna give me your contact information?”

The Intercept: “So you’re gonna get back to me?”

Merrill: “I’ll email you right now”

* * *

Of course Merrill never got back, but that’s to be expected as the entire campaign continues to dodge any questions around the matter. The enjoyment that can be gained from watching The Intercept dog Clinton for answers is priceless however, and it’s nice to see that Goldman is the gift that keeps on giving to Clinton, especially as an inconvenience on the campaign trail.

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The Next Big Crash Of The U.S. Economy Is Coming, Here’s Why

28.05.2016 SRSrocco 0

srsrocco

By the SRSrocco Report

Investors better be prepared as the next crash of the U.S. economy is coming.  This is not based on hype or speculation, rather due to the disintegration of the underlying fundamentals.  Matter-a-fact, the fundamentals are so completely AWFUL, that the next market crash will make 2008 look quite tame indeed.

To get the skinny on the lousy fundamental data, let’s first look at the Auto Industry.  The next series of charts come from the article, More Warnings–Unsustainable Auto Sales & Stock PE Ratios:

Auto Loans

Ever since the supposed economic turnaround, the amount of outstanding auto loans has increased dramatically from less that $700 billion in 2010 to over $1 trillion in the fourth quarter of 2015.  According to Wolf Richter, quoted in the article:

“Deep-subprime borrowers are high-risk. Typically they have credit scores below 550. To make it worth everyone’s while, they get stuffed into loans often with interest rates above 20%. To make payments even remotely possible at these rates, terms are often stretched to 84 months. Borrowers are typically upside down in their vehicle: the negative equity of their trade-in, along with title, taxes, and license fees, and a hefty dealer profit are rolled into the loan. When the lender repossesses the vehicle, losses add up in a hurry.

When I was younger, the longest automobile loan an individual could get was 48 months.  However, you were considered to be a REAL LOSER if you had to finance an automobile that long.  Now, 84 months is becoming the norm….LOL.

This is just one factor that shows just how weak the economy has become if Americans have to finance a car for seven years.

Here is another chart from the article linked above.  It shows just how inflated the S&P 500 index has become:

SP500

According to Michael Lebowitz of 720 Global Research (quoted in the article):

Since October 1, 2011, the S&P 500 has risen 82% on the heels of a 0.75% decline in earnings. The price to earnings ratio over that time period has risen 83%, with price gains contributing 99% to the increase. Prices have risen substantially, while earnings have actually fallen. The chart below highlights the growing gap between earnings and the S&P 500.”

As we can see from the chart, the S &P 500  and earnings have been surviving on HOT AIR, especially since the latter part of 2014.  When QE (money printing) and zero interest rates no longer provided enough bounce in the markets, the Fed, Central Banks and the Plunge Protection Team stepped in a BIG WAY to keep the markets from crashing.

So, not only do we have a highly over-leveraged automobile financed industry, the broader stock market valuations are in bubble territory.  Unfortunately, this is only part of the story.  If we look at the disintegrating U.S. Energy Industry, the situation is even more dire.

The Coming Collapse Of The U.S. Energy Industry

Today I did an interview with Money Metals Exchange.  I will be putting out the interview when it’s published.  However, I discussed this energy subject matter during the interview.  When I first started the interview, I said the precious metals community was guilty of propagating hype and short-term surging price moves that never came true.  Thus, we have frustrated a lot of precious metals investors because the COLLAPSE of the Dollar, DEFAULT of the COMEX or much HIGHER gold and silver prices have not yet occurred.

So, am I guilty myself by putting out a new a headline that reads, “The Coming Collapse of the U.S. Energy Industry?”  No…. here’s why.

The situation in the U.S. Energy Industry is so AWFUL, I wouldn’t be surprised to see half of the industry go bankrupt over the next few years.  Of course, the U.S. Government could step in and either bail out or nationalize the energy industry, but this wouldn’t stop the impending collapse.

Let’s take a look at this next chart.  The U.S. Energy Industry has added so much debt that it took nearly half of all its operating profits to just pay the interest on its debt in 2015:

Energy Sector Debt

While this was bad, it was even worse in the first quarter of 2016.  According to the article, Why Oil & Gas Companies Are Barely Scraping By, the U.S. Energy Sector paid 86% of its total profits just to service the interest on its debt.  Can you imagine that?

This chart from the article shows the huge change of interest payments on debt of the percentage of operating income in the U.S. Energy Sector:

Yahoo Finance Energy Debt

Since 2000, the U.S. Energy Sector was paying (on average) between 10-15% of its operating income to service its debt.  However, that changed significantly in 2014 as the price of oil plunged.  The reason this percentage jumped over 20% in 1998 was due to the price of oil falling below $15 compared to $22 in 1996.

So, why is the U.S. Energy Sector interest on the debt so much worse now with the price of oil more than double the 1998 price??  Again, the average annual price of oil in 1998 was $15 compared to $33 in Q1 2016.  Why did the U.S. Oil and Gas Industry have to pay 86% of its operating income to service its debt during the first quarter of 2016 on the back of a $33 oil compared to 25% on $15 oil in 1998?

BECAUSE…. The U.S. Oil & Gas Industry has gone into massive debt to bring on very expensive energy supplies.

Here is one more chart from the energy article linked above:

Energy Debt Maturity

This chart shows the U.S. Energy Sector maturing debt outstanding for each year.  According to the article:

While $5.1 billion of U.S. energy debt matures this year, $25.1 billion will mature in 2017. The number risies to $52.5 billion in 2020.

“There’s not a lot of this debt that comes due in 2016. But in 2017—that’s when the rubber will really hit the road. Now a lot of these companies are already looking to bankruptcy because people know that the bond position is untenable,” said Dicker.

As the article states, the outstanding U.S. energy debt that matures in 2017 ($25.1 billions) is five times what matures this year ($5.1 billion).  How can the U.S. Energy Industry pay back this debt when it can barely pay the interest on its debt currently?

And… to make matters even worse, U.S. oil production is falling rapidly:

US Oil Production

U.S. domestic oil production peaked at 9.6 million barrels per day (mbd) in June 2015 and is currently at 8.7 mbd.  This is nearly a 10% decline in U.S. oil production in less than a year.  Some may think this huge decline is due to lower oil prices.  That may be partly true, however U.S. oil production was going to decline even with higher oil prices.

Which means, the U.S. Energy Sector will be in even more trouble as oil production declines further as the amount of debt that matures continues to increase over the next several years.  This is extremely bad news for the U.S. economy as it will have to import more foreign oil to make up for declining domestic production.

Of course, this means the market will have to react by offering 96 and 108 month payment plans to keep the automobile financing bubble from popping.  Furthermore, I would imagine the Plunge Protection Team will work overtime just to keep the markets from imploding.

As the fundamentals of the market continue to deteriorate, the precious metals offer the only real safe haven.  As I mentioned in a previous article, Something Big Happened In The Gold Market, mainstream investors flocked into Gold ETF’s in record numbers during Q1 2016:

Global Gold ETF demand

Investors moved into Gold ETF’s in a big way during the first quarter of 2016 on a mere 2,000 point drop of the Dow Jones.  Why would investors move into Gold ETF in such a large degree as the market sustained a normal 15% correction??  Hell, in the first quarter of 2009, flows of gold into Gold ETF’s surged to a record 465 metric tons, but this was when the Dow Jones was crashing to its lows of 6,700.

I talk to several people in the industry, and the word out there is that mainstream investors are worried as hell about the markets.  I believe when the broader markets really start their NEXT BIG CRASH, investors will flow into gold and silver in record volume.

This is not a matter of “IF”, but “WHEN.”  However, if we go by the disintegration market fundamentals, that day will likely be sooner, rather than much later.

Lastly, if you haven’t checked out our new PRECIOUS METALS INVESTING page, I highly recommend you do.

Check back for new articles and updates at the SRSrocco Report.

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Gold Weekly Technical Outlook

28.05.2016 Oil N' Gold 0

Gold’s sharp fall from 1306.6 suggests that rebound from 1045.4 is completed and could have set the medium term range between 1045.4/1306. Firm break of 38.2% retracement of 1045.4 to 1306.0 at 1206.5 will confirm this case and would bring deeper fall …