07/18/17

Bill Clinton, Trumps and Renaissance Capital

By: Denise Simon | Founder’s Code

Primer: The 8th person at the Trump Jr. meeting was Ike Kaveladze. He currently serves as Vice President of the Crocus Group in Moscow. Mr. Balber, the lawyer for Kaveladze, said he revealed the identity of the eighth participant after receiving a call from a representative of special counsel Robert Mueller – the first indication that the Justice Department investigator is looking into the meeting. Previously, Federal investigators say Kaveladze immediately began laundering money for Russians.

Kaveladze was the president of International Business Creations, a Delaware corporation. Between 1991 and 2000, IBC and sister corporation Euro-American moved $1.4 billion from Eastern Europe through U.S. banks and back to Europe, the Government Accountability Office found in 2000.

But let’s go back to Bill and Hillary shall we? We may determine just why President Trump backed off his campaign pledge and decided not to prosecute Hillary

THE CLINTON FAMILY BUSINESS There may be no Clinton Foundation office in Moscow or St. Petersburg, but it is not for lack of trying. Bill Clinton received half a million dollars in 2010 for a speech he gave in Moscow, paid by a Russian firm, Renaissance Capital, that has ties to Russian intelligence. The Clinton Foundation took money from Russian officials and oligarchs, including Victor Kekselberg, a Putin confidant. The Foundation also received millions of dollars from Uranium One, which was sold to the Russian government in 2010, giving Russia control of 20% of the uranium deposits in the U.S. —  the sale required approval from Hillary Clinton’s State Department. What’s more, at least some of these donations weren’t disclosed. “Ian Telfer, the head of the Russian government’s uranium company, Uranium One, made four foreign donations totaling $2.35 million to the Clinton Foundation. Those contributions were not publicly disclosed by the Clintons, despite an agreement Mrs. Clinton had struck with the Obama White House to publicly identify all such donors,” the Times has reported.

Stephen Jennings is the co-founder and CEO of Renaissance Capital and in 2010 he resided over the launch of Tatu City, a planned community for 60,000 northeast of Nairobi.

Before that Vladimir Dzhabarov was a member of the FSB’s Department “K,” or its financial counter-intelligence division . From 2006-09, he was also the First Vice President at Renaissance Capital, a Moscow-based investment firm, which the 36 year-old Magnitsky claimed was involved in a six-long-year long conspiracy by an organized crime syndicate and Russian government officials to defraud the nation’s taxpayers. Renaissance Capital denies it had any part in any tax frauds; in 2009, the bank’s deputy chief executive Hans Jochum Horn told the New York Times that any illegal transactions involving Renaissance subsidiary companies took place after those companies had been sold off to new owners.

Magnitsky claimed in 2008 that criminals tied to Renaissance Capital, who were allegedly working in lockstep with tax and law enforcement agents, stole some $470 million by orchestrating illegal and complex tax refund schemes. As part of his sweeping investigation, Magnitsky claimed that in 2001-2002, Igor Sagiryan, the former president of Renaissance Capital, had supposedly commissioned named a fellow named Dmitry Klyuev to arrange a series of tax refunds through the corrupt Russian court system. This seconding of a known mobster to a seemingly legitimate financial institution was confirmed by Yuri Sagaidak, a former KGB general who was at the time the vice president of Renaissance Capital, in Russian court testimony.

The Klyuev Group, which U.S. Senator John McCain in 2012 urged President Obama to use an executive order to sanction wholesale as a “dangerous transnational criminal organization,”concocted its first nine-figure refund scheme in 2006, according to Magnitsky and others. The conspirators allegedly included the heads of Moscow Tax Offices 28 and 25, Olga Stepanova and Elena Khimina, respectively; Klyuev’s own attorney, Andrey Pavlov; and an Interior Ministry official, Major Pavel Karpov, who had previously investigated Klyuev for attempting to steal $1.6 billion worth of shares of a profitable Russian iron ore company. (Klyuev received a two-year suspended sentence in that case.)Read more here.

It has now emerged that the US Department of Justice has traced proceeds of the fraud to a bank account in Bournemouth held by Renaissance Capital Investment Management Ltd.

A chart produced by the US Department of Justice shows funds flowing through a series of foreign companies before being channelled into three main firms, including Prevezon, against which the DoJ is taking legal action to seize assets allegedly linked to the money, and the Bournemouth Renaissance account.

Renaissance Capital is a Moscow-based investment bank now controlled by billionaire oligarch Mikhail Prokhorov. Igor Sushchin, until recently the organisation’s head of IT security, was one of two FSB operatives accused by the FBI last month of hacking 500 million Yahoo email accounts. An indictment said it was “unknown” whether the firm “knew of his FSB affiliation”. Read more here for details and to help with the confusion.

*** In case you are wondering what Robert Mueller, the special investigator is looking at with this team, hold on this is going to get worse.

Magnitsky tracked money and found it all over the globe before he was murdered in a Russian prison, where the FSB arrested him for whistle-blowing.

According to records obtained by OCCRP, between Moscow and Geneva the money traveled all over the world in a veritable chain of shell companies set up by GT Group — a company that was connected to the sale of arms from N. Korea to Iran as well as laundering money for the Mexican Sinaloa Cartel.

The couple used the same Credit Suisse accounts to purchase two apartments valued at US$2 million each at Dubai’s Kempinksi resort for tax office deputies Elena Anisimova and Olga Tsareva. According to bank records, the apartments were purchased using the same bank account Stepanova used.

US$3 million arrived in the accounts on January 3, 2008 via Bristoll Export, a company which had been registered by GT Group in New Zealand. In February, companies incorporated in Cyprus, Moldova, and the United Kingdom sent US$9 million to the Credit Suisse accounts. See detailed information on one of the companies, NOMIREX, which processed US$8 million in its accounts while filing as “inactive” in a separate story.

In May and June 2008, the accounts held by Stepanov and Stepanova sent US$10 million to a shell company called Arivust holding. Records obtained by OCCRP show that through a series of agreements, Stepanov is named as the beneficial owner of the company.

The records also show that Stepanov is the beneficial owner of another company, Aikate Properties, which sent US$2 million to his Swiss account.
Hermitage acquired copies of the Credit Suisse transactions and used them to file a complaint with the bank and the Swiss federal attorney general this spring.

Stepanova remains employed by the Russian government. She resigned from the tax ministry but now works for a new defense agency established by Medvedev that oversees procurement and allocation of police and military equipment to the country’s law enforcement and military agencies.

So do Lieutenant Colonel Artyom Kuznetsov, whose assets were estimated at US$3 million although his official annual salary is about US$10,000; and Russian Interior Ministry Pavel Karpov, whose assets were estimated at US$1.5 million while his yearly pay was only US$10,000. Transparency International ranks Russia as the most corrupt large nation on earth, and the large country most likely to bribe abroad. They also estimate that bribery alone costs Russia US$300 billion annually, the total GDP of Denmark.  Bribery “is not even half of the problem,” according to a US House of Representatives Staffer who did not want to be identified because of his frequent work with Russian officials on policy issues including the Magnitsky case. Yep…more here.

Donald Trump Jr. had a meeting with 8 people in the room at Trump Tower in June of 2016. The meeting included Natalia Vesealnitskaya, who was hired by and worked closely with Petr Katsyv, who is/was the legal owner of Prevezon Holdings. The U.S. Justice Department for the Southern District of New York was prosecuting a money laundering case against Prevezon Holdings and it was settled too quickly directly after Jeff Sessions fired Phreet Bharara. Katsyv is also the vice president of Russian Railways, a state run rail operation run by Vladimir Yakunin and a close confidant of Vladimir Putin. Still confused and overwhelmed? Well, there is more here.

Sorry, there is yet another name, Sergei Roldugin. This particular Sergei is hardly a money launderer of the garden variety, in fact he is a cellist. But…he is at the center of a global scheme that moved $2.0 billion through Russian state banks, Swiss and Panamanian law firms all tied to Vladimir Putin via the investigation and release of the Panama Papers. Kinda wonder how a cellist is worth $100 million, right? Good question, but the money mess began at the Bank Rossiya, a top go-to bank for Putin and his inner circle. Oh yeah, Sergei Roldugin is the godfather to Putin’s oldest daughter, Maria.

In September of 2016, Roldugin announced before reporters at the Kremlin that Donald Trump will be the next U.S. president.

07/17/17

JP Morgan’s Dimon Perhaps Encapsulated Everything Wrong In The Economy…It Is Not Us But It Is Washington And The Financial Media

By: Kent Engelke | Capitol Securities

Earnings season commenced with the release from three of the country’s largest banks. The headlines suggested nominal disappointments. The comments, especially from JP Morgan’s Dimon, are suggesting frustration.

Generally speaking, bank loan portfolios are solid, thus suggesting ample flexibility to lend. Excess reserves are gargantuan and the interest rate environment is improving.

And then there is Washington where the frustration from the lack of regulatory and tax reform is palpable. Washington is more concerned about politics than the nation’s best interests.

I will argue that if Dodd Frank is repealed in the Senate, monetary velocity and growth will accelerate. All the necessary ingredients are present.

Frustration is also rising with the consumer. According to the University of Michigan Consumer Sentiment survey, 51% of the respondents stated an improvement in finances, the greatest share in 17 years.

However, the percentage of respondents believing there will be further improvement in finances fell to 33%, declining from 40% in June which was a decade high. In my view, there were two interesting components of this data point. Respondents who identified themselves as Republicans were the vast majority of the decline. Second, there was no change in attitudes of those identified as Democrats.

The frustration of society and business leaders alike towards Washington is intense.

How will this frustration continue to unfold?

In the immediacy, headlines will dictate market action given the massive influence of ETFs and technology based trading. As stated many times, this is not investing, but speculating that the current environment will last forever.

JP Morgan’s Dimon inferred such headline investing is very distracting and the financial media should instead focus on the stuff that is holding back and hurting the average American, using the example of the fixation of the bank’s last two weeks of fixed income trading of this meaningless myopicy.

But will the current environment last forever? As indicated, frustration levels are at levels not experienced in at least a generation, levels that historically are associated with tectonic societal change that will impact the economy and the markets.

What will happen his week? To write the obvious, the markets will perhaps be dictated by the immediate interpretation of second quarter earnings reports. The economic calendar is concentrated in various manufacturing indices and housing statistics.

Last night the foreign markets were mixed. London was up 0.58%, Paris was up 0.16% and Frankfurt was down 0.06%. China was down 1.43%, Japan was up 0.09% and Hang Sang was up 0.31%.

The Dow should open flat. The 10-year is up 4/32 to yield 3.31%.

07/15/17

Southern Poverty Law Center Belongs On Southern Poverty Law Center’s Hate List

By: Brian McNicoll | Accuracy in Media

Months from now, you’ll be reading a story about Jeff Sessions, and there will be a remark to the effect of “when he’s not off speaking to hate groups.”

And the phrase “speaking to hate groups” will have a hotlink on it. And that hotlink will take you to any number of stories that have appeared in the last day or so since Sessions gave a speech to a group known as the Alliance Defending Freedom.

The group was in the news recently because of its work in the case of Trinity Lutheran Church of Columbia v. Comer, in which the Court held the church did not lose its right to apply for a state grant to pay for an updated playground simply because it was a church.

Alliance Defending Freedom is representing Jack Phillips, the cake baker who declined to create a cake for a gay wedding and whose case the Supreme Court recently agreed to hear.

It pushed the case that forced public schools to provide equal access to after-school Bible clubs as to other organizations. And it convinced the Supreme Court to affirm an Arizona tuition tax credit program could be used for any schools parents choose, including those run by churches.

It got the court to affirm the rights of communities to restrict where sexually oriented businesses could locate. And it was the group behind the Supreme Court ruling upholding the ban on partial-birth abortions.

One can take issue with any or all these positions. But they are the positions of a Christian group, founded by preachers, that makes grants or provides pro bono attorneys to groups and individuals whose religious rights and rights to free association are threatened. They are not the positions of a hate group.

So how did this group end up in a thousand headlines proclaiming it a “hate group?” Because the Southern Poverty Law Center said so. And for the left and its handmaidens in the media, that’s all it takes.

A day before Sessions was to speak to an Alliance Defending Freedom meeting in California, the Southern Poverty Law Center put out a release that said “Attorney General Jeff Sessions reportedly will be delivering a speech to the anti-LGBT hate group Alliance Defending Freedom at 5:30 p.m. PDT today, July 11, at ADF’s Summit on Religious Liberty in California.”

Reported NBC: “Attorney General Sessions Criticized for Speaking to ‘Hate Group.’” At ABC, it read: “Jeff Sessions Addresses ‘Anti-LGBT Hate Group.’”

This is followed on the search engine listing by more than 20 radio station websites running stories they picked up from ABC, all headlined “Jeff Sessions Addresses ‘Anti-LGBT Hate Group.’”

It’s out there, and no amount of single quotes or taking it back or softening remarks will change it – Alliance Defending Freedom will always be thought of as a hate group by a fair percentage of the population that thinks about such matters at all.

But what about the hate of the group that made the list? How did it get the right to designate whose arguments are worthwhile and whose should be shunned?

The Southern Poverty Law Center was founded in part by Morris Dees, an Alabama lawyer who successfully prosecuted a variety of key civil rights cases.

Dees came up with the idea to use civil lawsuits to secure court judgments, then seize the assets of these organizations – money, land, buildings and other property – to satisfy the debts. He won a $7 million judgment for a woman in Alabama whose son was lynched, which forced the United Klans of America to sell its national headquarters and go bankrupt to pay the claim.

This whetted appetites for trying to drive political opponents out of business by tying them up in court defending frivolous lawsuits and led to laws in the District of Columbia and elsewhere to discourage such actions.

Dees went on to serve as national finance director for the presidential campaigns of George McGovern in 1972, Jimmy Carter in 1976 and Ted Kennedy, against Carter, in the 1980 Democratic primaries.

And it turns out he learned at the knee of some people who weren’t all that interested in tolerance themselves. Dees named Julian Bond to the SPLC board as one of his first acts after forming the organization. Bond was an associate of Herbert Marcuse, a German communist scholar who argued the left had to shut down the opposition’s First Amendment rights or its views would never be heard.

“Liberating tolerance, then, would mean intolerance against movements from the Right and toleration of movements from the Left,” Marcuse wrote. “Not ‘equal’ but more representation of the Left would be equalization of the prevailing inequality.”

That explains the ever-more-comprehensive net the organization casts for members of its hate lists. It’s far beyond the Klan and pronounced white supremacist groups to any groups it deems to “have beliefs or practices that attack or malign an entire class of people, typically for their immutable characteristics.”

As of 2015, the Southern Poverty Law Center had identified 892 active hate groups in the U.S., up from 784 the previous year. Of those, 190 were KKK groups, 94 were neo-Nazi groups, 85 were what it calls white nationalist groups, 95 were racist skinhead groups, 19 were “Christian-identity” groups, 35 were Confederate groups, 180 were black separatist groups and 184 were classified as “general hate groups.”

Alliance Defending Freedom falls into the final category, as do Campus Ministry USA, The Center for Family and Human Rights, Conservative Republicans of Texas and the Family Research Council.

“Founded by some 30 leaders of the Christian Right, the Alliance Defending Freedom is a legal advocacy and training group that specializes in supporting the recriminalization of homosexuality abroad, ending same-sex marriage, and generally making life as difficult as possible for LGBT communities in the U.S. and internationally,” the Southern Poverty Law Center website states.

If these are the rules, then both sides should play by them. If organizations that protect American values such as the Alliance Defending Freedom are hate groups, what about, say, Planned Parenthood? Does it not “have beliefs or practices that attack or malign an entire class of people, typically for their immutable characteristics?”

What about Emily’s List? It definitely attacks and maligns entire classes of people based on immutable characteristics. Or the Southern Poverty Law Center itself? It seems to malign people for the immutable characteristic of being a Christian every day.

Welcome to the “General Hate Groups” category, SPLC. You earned it.

07/14/17

Farrakhan’s Anarchist Angels

From: Patrick Kobler | NRATV

Loesch calls out the hypocrisy of the Women’s March organizer’s accusations considering Farrakhan, who Mallory calls “our brother, our leader, the honorable” and has selfies with, is an anti-Semite who thinks “Hitler was a very great man,” believes homosexuality should be punished by death, is a racist who regularly states things like “the white man is our mortal enemy,” and a violent xenophobe who sows religious fears with propaganda claims like, “God will destroy America by the hands of the Muslims.” “If you want to stop hate, start with Daddy Farrakhan. If you feel you’re “not safe,” go tell Daddy Farrakhan to tone down his divisive, racial rhetoric,” Loesch says. “Ladies, you have the power to end his hate-filled propaganda. Plan a march. I’ll be there.” Loesch then addresses the women directly: “Tamika, Linda, Carmen—I stand up to the violence of men like Farrakhan with the clenched fist of truth. You let a racist, anti-Semitic man use your womanhood to push his own, twisted vision for America. So tell me, who’s the real feminist?” She then ends by addressing their supporters: And to those who march with these fake feminists on behalf of women’s rights—you should probably ask them if they agree with Daddy Farrakhan’s belief that women should never give up their duties to cooking, cleaning and taking care of their husbands and kids for a career. As he put it, “Your professional lives can’t satisfy your soul like a good, loving man.”

————–

Transcript:

Women’s March organizers Tamika Mallory, Linda Sarsour and Carmen Perez have spent the past several weeks accusing me and the NRA of sexism, racism, homophobia and violence.

The leftist media has gleefully spread these lies, penning headlines each more sensational than the next. Bigots. Apocalyptic. Hate. Shame. Terrorists.

But here’s one story I have yet to see the media cover—the violent agenda of the MEN behind these Women’s March organizers. They include Islamic extremist Siraj Wahhaj, race-riot inciter Al Sharpton and this man.

Yep, that’s Louis Farrakhan. A religious terrorist whose highlight reel of bigoted beliefs includes, “Hitler was a very great man.”

This is the man behind the so-called peaceful, tolerant and non-violent Women’s March organizers. The Charlie to their anarchist angels. Father of the modern violent left. Or, Daddy Farrakhan.

Like the KKK, Farrakhan is an anti-Semite who incites hatred against Jewish people by spreading conspiracies. Like ISIS, he has preached that homosexuality is a crime that should be punished by death. Like a racist, he’s incited division with statements like, “The white man is our mortal enemy.” Like a xenophobe, he sows religious fears with propaganda claims like, “God will destroy America by the hands of the Muslims.”

Tamika, Linda, Carmen: How dare you accuse me of racism and sexism and homophobia and whatever other ism or obia you’ve invented to push your radical agenda. Or should I say Daddy Farrakhan’s radical agenda.

You don’t get to call me all those things when a man you look up to and call honorable and hold hands with and take selfies with represents the exact type of bigot you pretend to march against. If you want to stop hate, start with Daddy Farrakhan. If you feel you’re “not safe,” go tell Daddy Farrakhan to tone down his divisive, racial rhetoric.

Ladies, you have the power to end his hate-filled propaganda. Plan a march. I’ll be there.

Tamika, Linda, Carmen—I stand up to the violence of men like Farrakhan with the clenched fist of truth. You let a racist, anti-Semitic man use your womanhood to push his own, twisted vision for America. So tell me, who’s the real feminist?

And to those who march with these fake feminists on behalf of women’s rights—you should probably ask them if they agree with Daddy Farrakhan’s belief that women should never give up their duties to cooking, cleaning and taking care of their husbands and kids for a career. As he put it, “Your professional lives can’t satisfy your soul like a good, loving man.”

07/13/17

Yellen’s Testimony Was Largely Interpreted As More Dovish Than Expected

By: Kent Engelke | Capitol Securities

Equities rose as FRB Chair Yellen signaled the Federal Reserve won’t rush to tighten monetary policy as inflation remains persistently below target. The dollar fell and oil advanced on reports of a decline in stockpiles. Treasuries declined nominally in yield.

In my view, there were no major surprises in Yellen’s testimony and in some regards deflected budding Wall Street attention from the President back to the Federal Reserve.

Commenting about oil, inventories fell about 3 times greater than expected, the largest amount since September. Total inventories are now less than 500 million barrels for the first time in many months. At current draw downs of around 8 million barrels a week, inventories would be at the 400 million barrel five-year average in about 12 weeks. Inventories at the largest hub are at the lowest since November 2015.

Has oil finally bottomed? Only history can answer this question. Estimates for American production were lowered for the first time since January, the result of the lack of infrastructure spending. Because of the global $2 trillion cuts in capital spending since 2014, the oil giant Halliburton states the worst is over and expects an oil spike by 2020.

In years past, such data coupled with OPEC’s calling for an “extraordinary meeting” to be held on July 17 would increase inflationary expectations; expectations which the FRB Chief stated are still low.

I ask is the complacency about inflation and benign oil prices misplaced? The current oil implosion is the greatest in a generation, an implosion that in many regards is a contributory factor as to why the stated inflation rate has remained low and is expected to remain relatively benign for the intermediate future.

It is against this juncture, however, that explains why I think the phrase: “Many times the most obvious conclusions are those that ignored” is appropriate.

Interest rates are still around record low levels. Monetary velocity is still hovering around the lowest level since 1959, but could perhaps be on the verge of turning higher because of the House’s repeal of Dodd Frank. Oil infrastructure cuts are at all-time highs.

What are the odds economic activity will accelerate at a pace greater than expected, the result of rising monetary velocity, causing stronger demand for oil just as the full impact of the massive infrastructure cuts are felt? I place the odds around 60%. How will such an environment impact inflationary expectations?

I reiterate a comment I made several weeks ago. Will August 2017 be the inverse of August 2008 when the Federal Reserve radically changed direction?

Today, several large financials post profits. Generally speaking, the financials underperformed yesterday because of Yellen’s comments. How will such be interpreted?

Last night the foreign markets were up. London was up 0.07%, Paris was up 0.65% and Frankfurt was up 0.20%. China was up 0.64%, Japan was up 0.01% and Hang Sang was up 1.16%.

The Dow should open nominally higher on Yellen’s dovish testimony. The 10-year is unchanged at a 2.32% yield.

07/12/17

Will FRB Chair Yellen Echo Any Words Of Wisdom?

By: Kent Engelke | Capitol Securities

Markets surrendered gains and fell to a 0.5% loss following the tripling in volume of S & P 500 futures in 20 minutes after it was revealed that there were emails suggesting Russia backed Trump and was trying to damage Clinton. Approximately 30 minutes later, the averages were unchanged after the market concluded that the releases were nothing but noise.

Oil advanced following reports that American shale production will not be as great as previously expected given the collapse of infrastructure spending. Corporate approvals for new projects are at a 50-year low and existing oil fields are declining at a pace greater than expected.

This should not be a surprise given the $1 trillion dollar in infrastructure cuts since 2014, amounting to about 43% per annum from 2013 levels where large upstream production plans have all but been eliminated. Oil is a capital intensive industry.

Today, FRB Chair Janet Yellen testifies to Congress about the state of the economy and the direction of monetary policy. Will her statements also be regarded as “noise,” defined as nothing new will be offered?

Any time any Fed official speaks, can be of significance given their potential influence upon monetary policy and interest rates.

Last night, the foreign markets were mixed. London was up 0.88%, Paris was up 0.93% and Frankfurt was up 0.68%. China was down 0.17%, Japan was down 0.48% and Hang Sang was up 0.64%.

The Dow should open nominally higher as oil inventories were less than expected, but the direction can change radically if Yellen’s testimony is vastly different than expectations. The 10-year is up 2/32 to yield 2.35%.

07/12/17

Natalia Veselnitskaya, Prevezon, Brooklyn, NY and Money Laundering

By: Denise Simon | FoundersCode

Natalia Veselnitskaya had clients to defend in New York. Those clients were Denis Katsyv, Alexander Litvak, and Timofey Krit. Natalia had expensive choices in accommodations in New York where the U.S taxpayer paid the bill.

Prevezon Holdings was part of a money laundering prosecution case in Southern District of New York that for the most part was settled in May of 2017. Prevezon is/was owned by Denis Katsyv and has a principal by the name of Timofey Krit. The Prevezon office was located in Brooklyn, New York. The registered agent for Prevezon is Gabriella Volshteyn.

Gabriella Volshteyn is a founder and a managing attorney of Volshteyn & Associates. The lawfirm boasts the following on the website:

In our Real Estate practice, we have participated in over $1 billion of transactions in commercial and residential real estate involving both the US-based and international corporate entities and individuals.

In our Business and Contract Law practice, we have represented a full range of clients from individuals and small business owners to large multinational holding companies. We have drafted contracts ranging from simple corporate agreements to complex contractual agreements related to large-scale international events, such as Sochi Olympic Games.

In our Global Corporate and Tax practice, we have considerable expertise in structuring complex corporate, banking and investment accounts for foreign investors and the establishment of offshore trusts in tax-favored jurisdictions, such as the British Virgin Islands, the Cayman Islands, the Bahamas, the Netherlands, Antilles, the Channel Islands, Panama, Switzerland, Liechtenstein and Madeira.

Our Surrogacy Law practice is an area of passion for this firm as we have been fortunate to help many families from all over the world with bringing a child in their lives.  With the help of our firm, surrogacy has made the dream of having children possible for those who are infertile, unable to become pregnant, or unable to carry a child to term.

(of note, the countries listed above are those that are known to be quite common in use by front companies to hide money, evade taxes and park laundered funds)

*** While Donald Trump Jr. had a meeting on June 6, 2016 with Natalia Veselnitskaya, the meeting allegedly had several objectives including opposition intelligence on Hillary Clinton, getting waivers or removal of sanctions from the Magnitsky Act and later Russian adoption. Donald Jr. included Jared Kuschner and Paul Manafort in the meeting without vetting Natalia or on background the sanctions. Natalia also does have ties to former top members of GRU and FSB. As a normal practice, the Kremlin always dispatches operatives that are at least one layer removed from listed official positions of the Russian government.

A particular group of note for which Veselnitskaya was involved and is a large lobby operation in Washington DC is HRAGI, a front operation on human rights known as Human Rights Accountability Global Initiative Foundation. Those involved in the lobby operation on behalf of HRAGI and Prevezon include:

A. Rinat Akhmetshin – Russian national living in Washington D.C.
B. Robert Arakelian
C. Chris Cooper – CEO Potomac Square Group
D. Glenn Simpson – SNS Global and Fusion GPS
E. Mark Cymrot – Partner, Baker Hostetler
F. Ron Dellums – Former Democratic Congressman
G. Howard Schweitzer – Managing Partner of Cozen O’Connor Public Strategies

In more detail as published by Senator Grassley’s office:

The Russian Government also has a vested interested in ensuring that Prevezon Holdings Limited and its affiliated companies successfully defend asset forfeiture proceedings brought against them by the United States Government in New York, in which Prevezon is accused of laundering proceeds of the $230 million fraud.

Prevezon is owned by Denis Katsyv, the son of a Russian government official, Piotr Katsyv. Denis Katsyv currently has $7million frozen by the Swiss General Prosecutor, pursuant to a criminal investigation by the Swiss authorities into the laundering of proceeds from the $230 million fraud. More here.

***

Another issue is Jared Kushner.

HRAGI’s other clients include Vladimir Lelyukh, a top executive at Sberbank Capital, a subsidiary of the state-owned Russian bank involved in the real estate, energy, transportation, and automotive sectors. Sberbank Capital’s CEO, Ashot Khachaturyants, is a former senior official in Russia’s Federal Security Service (FSB) and its Ministry of Economic Development and Trade.

State-owned Russian financial institutions are common conduits for surreptitious intelligence work in the country. Jared Kushner, the president’s son-in-law and senior adviser, has faced scrutiny over a January meeting a top executive at another bank with ties to Russian intelligence, Moscow-based Vnesheconombank. For context and validation, go here.

Vnesheconombank was sanctioned by the U.S. Treasury in 2014 due to Russian annexation of Crimea and Ukraine.

Vnesheconombank also known as VEB bank has the following officers:

To be clear, VEB is not actually a bank at all. It’s not under the purview of Russia’s central bank, and — on its own website — says it does not compete with commercial credit institutions and participates only in those projects that cannot receive funding from private investors. Instead, VEB says its mission is “to enhance the competitiveness of the Russian economy, diversify it and stimulate investment activity.”

And Sergey Gorkov — the man Jared Kushner met in December — was handpicked to run it in 2016 by Putin himself. Gorkov is a graduate of Russia’s secret service academy, which produced a number of oligarchs who made fortunes during the chaos of post-Soviet Russia, including Putin himself. It is funded directly by Russia’s federal budget, which has sometimes meant operating in suboptimal financial conditions but also ties the bank directly to the country’s leadership. More here from BusinessInsider.

Two Senators signed a letter of inquiry regarding Sergey Gorkov and Jared Kushner illustrating concern of meeting omissions on the Kushner S-86 form and is asking the FBI for further details.

07/11/17

Identity erasure: Threat to Copts in Egypt

By: Ashraf Ramelah | Voice of the Copts

Throughout the modern history of Egypt, Copts have been pressured by the Islamic state to become Arab – to assume the Arab-Muslim identity.

Westerners dealing with global jihad can heed a warning through examination of the struggles of one of the longest surviving and largest remaining Christian minority populations in a jihadi nation. We see that Islam in the majority is never satisfied until the minority is subsumed entirely by its religious-political system, which includes the Arab/Muslim heritage.

Covert jihad quietly undercuts the values, principles and customs of non-Muslim cultures through the legislative process, justice system and sometimes brute force. This goes on in Egypt where discriminatory laws, customs and built-in biases deny equal access and block minorities from political power.

Recently, a bill was proposed in Congress to regulate the civil status of newborn babies by assigning strict guidelines to parents choosing a given name. Consistent with the 2014 Sharia-leaning constitution, the proposal is in line with a current law (Article of Law No. 143) enacted in 1994 and derived from Egypt’s now defunct 1971 constitution (Sadat’s era).

The former 1971 constitution mandates that “your given name at birth must not offend Allah and His Sharia.” Since the roots of Sharia are found in Saudi Arabia, the birthplace of Islam, Egyptian Muslims are proud to be Arab or proud to assume an Arab identity and heritage. So when it comes to Islamic methods of Islamizing the nation, Arabizing is an automatic component. This clause from the former constitution has been lying in wait for just the right moment to pounce onto the people.

It is not surprising then that the Egyptian Parliament which hasn’t quite gotten around to addressing any of the country’s major problems — poverty, inflation, illiteracy, unemployment, organ harvesting, domestic terrorism, and kidnapping/sex trafficking — would think it time to tackle the critical issue of naming newborns.

The bill was presented by MP Badeer Abd El Aziz to the House of Representatives Committee on Suggestions and Complaints proposing a law opposing parents who alienate their newborns by giving them foreign or phony names, i.e., names of non-Arab/Saudi Arabian origin. This indicates that a Christian name like George or Demiana or an Egyptian name like Ramses or Isis would be called into question and most likely rejected as illegal.

From the time of Arab-Muslim conquest and occupation, Egypt’s Copts have had to protect their religion and work to preserve a separate and distinct identity — a language, culture and ancestry rooted in Egypt’s ancient past. Egyptians are Copts when their ancestry can be traced back to ancient Egypt not to Saudi Arabia like the Muslim majority of Egypt, and their religion is Christian. Although industrious, entrepreneurial, hard-working and heavily-taxed members of society, the indigenous Copts are under threat of being swallowed up by the prevailing culture’s aims to absorb every single person under the umbrella of Arab-Muslim.

Throughout the modern history of Egypt, Copts have been pressured by the Islamic state to become Arab – to assume the Arab-Muslim identity. Blend in and take on the Muslim religion and culture. In many ways Copts have. Egypt’s inclination toward an Arab identity became obvious when Nasser renamed Egypt from Kingdom of Egypt to the Republic of Egypt and six years later changed it again to United Arab Republic. To outdo Nasser, Sadat then renamed the country Arab Republic of Egypt, which remains today.

The absurdity of the proposed law was reflected in the negative reaction of the exasperated Coptic Bishop Rafael (Secretary of the Holy Synod) commenting in social media, “I do not understand what foreign names mean. Is my name considered foreign? Are names like Mina Ahmose and Isis considered foreign? Will the priests be named Arab names such as Abu Ali and Abu Bakr?” The bill included a maximum penalty of 2,000 Egyptian pounds and maximum six months jail time for the offending parents.

Egyptian Copts find the whole matter repugnant and are forced to cope with another attempt to chip away at their identity, no matter how insistent El Aziz has been to the contrary. When challenged by both the church and fellow MP’s, El Aziz backed-peddled, stating that the law was meant for Muslims only. But how could it be? Laws and penalties in Egypt are not separated for different populations but apply to all citizens; the laws are based on Sharia law which infuses the French civil and criminal court systems adopted under French occupation. Article 2 of Egypt’s present 2014 constitution proves this with one clause, “Sharia is the main source of legislation.”

With this clause, the 2014 constitution paves the way for a total Islamic Sharia state no matter how hopeful the country is or ever was for democratic reforms after the uprising of June 30, 2013. El Aziz’s stated purpose is the return to Arabic-Islamic origins — an important Islamic-Sharia principle for Muslims – but it pertains to all citizens when Egypt’s current constitution ultimately justifies his goals.

The thin veneer of liberal democracy and human rights presented in Egypt is a modern-day “nuisance” hindering Islamization of the country. Why does this impediment exist? Egypt’s ruling class clings to this façade. After all, the world must never surmise Egypt’s deep desire to emulate Saudi Arabia!

Alas, the effort made by El Aziz was blatant and exposed the intentions of the Islamic majority to acquire gains for a Sharia eventuality. Because it lacked the subtlety necessary to hide behind, member support was not with him. The bill burned on a pyre. Rest assured, a Phoenix will rise up from its ashes when the country is focused on another terror attack — overt and covert jihad working in tandem.

Applying to Muslims in any geographical location on earth and carrying with it the intent to overturn legal systems, the Sharia is a growing body of laws composed of regulations derived from the Quran, Hadiths and Sera – the Islamic books – along with the edicts accumulated throughout the years (and years to come) in answers by imams to everyday questions from Muslims about very personal items, social manners and private matters. Penalties are included.

Essentially, these volumes amount to a tyrannical control system governing over the most trivial matters of life. For decades, Egypt has been advancing toward full-blown Sharia governance. Its hesitancy to clinch this achievement has more to do with geo-politics than the political will inside this Islamic state.

07/11/17

Will The Negative Correlation Between The NASDAQ And Dow Continue?

By: Kent Engelke | Capitol Securities

Is a great rotation at hand? Since the June 8 House repeal of Dodd Frank, a major rotation may be in its nascent stages. Yesterday, I commented about the volatility in the NASDAQ 100 since the repeal, the greatest volatility as compared to the market since 2002, commenting the average NASDAQ stock is down about 12% from its annual highs and 15% of its members are in a bear market—defined as a decline of more than 20% from its annual highs.

Yesterday’s WSJ expanded on this potential rotation. The Journal wrote the typical close relationship between the Dow Jones and the S & P 500 has broken down stating the 20-day correlation between these two major yardsticks fell to 0.47 or the lowest since 2003.

The Journal writes the major difference in composition between the Dow Jones and the S & P 500 is that the Dow is price weighted, meaning that companies with the highest stock prices carry the most sway. According to Dow Jones, Goldman trades around $225 share, representing its biggest holding. Industrial stocks account for one fifth of the Dow.

Contrasting the Dow Jones composition to that of the S & P 500, which ranks stock by market value, Apple is the largest company in the world and is the S & P 500’s biggest holding. Goldman is ranked 52nd according to the WSJ.

The Journal finally writes the 20-day correlation between the Dow and the tech heavy NASDAQ composite is a minus 0.45, the weakest since 2001. This means the two averages are moving in opposite directions. Over the past 15 years, these two benchmarks have a correlation of 0.83.

Many times I have commented about the unbalanced markets, the result of the massive proliferation of capitalization based ETFs and HFTs. I further postulated a disparity between the performance of “value stocks” and the largest momentum growth technology stock could develop, defined as value outperforming technology for the first time in many years.

Twenty days do not make a trend, but a major reason for the recent divergence between value and growth is surging financials, the result of the House’s repeal of Dodd Frank.

Financials account for the lowest percentage capitalization of the S & P 500 in at least 15 years. Oil is the lowest since 2000. Will the divergence continue?

I believe it will be dependent upon earnings. Some of the largest financials report profits this week.

Historically the outperformance of financials indicate an accelerating economy (A strong economy increases the likelihood of loan repayment). Is the recent bout of weakness in the Treasury market confirming the possible acceleration? One month ago, the 10-year was at its annual low yield of around 2.10% with many pontificating a “one handle” is all but a certainty. Today, the yield is about 2.40%.

The newswires are filled with stories about the death of macro investing, a strategy based upon a geopolitical and macroeconomic thesis, replaced by passive indexing and ETFs. This death process commenced about 12 years ago with the advent of ETFs, accelerated by the 2008-09 financial crisis, had a short reprieve from 2011-2013, but went into a spiral following the full implementation of Dodd Frank in September 2014.

Perhaps a Bloomberg graph illustrates the outsize impact that ETFs or capitalization weighted passive investment strategy has had upon assets in the market. In 2004, the amount was insignificant. Today there is over $3 trillion in ETFs.

Many years ago, the equivalent of the Warren Buffet of that era once commented when everyone is doing something, an end is near. Mr. Bessemer also stated passive investment outperformance does not last forever, for if it does, all would be very wealthy.

Last night the foreign markets were mixed. London was down 0.84%, Paris was down 0.24% and Frankfurt was up 0.10%. China was down 0.30%, Japan was up 0.57% and Hang Sang was up 1.48%.

The Dow should open nominally lower ahead of the commencement of second quarter earnings and Yellen’s congressional testimony about the economy later in the week. The 10-year is off 2/32 to yield 2.38%.

07/10/17

Jobs Growth Surprised On The Upside… Earnings Season Commences

By: Kent Engelke | Capitol Securities

Hiring picked up in June as payrolls increased about 25% more than expected. Moreover, job growth in both April and May was revised higher. The labor participation rate did increase 0.1%, thus suggesting workers are reentering the workforce, thus causing an insignificant increase in the unemployment rate and the more inclusive U-6 unemployment rate. Wage growth, however, was nominally lower than expected. However there is continued pressure at both ends of the proverbial spectrum.

Thirty-five years ago, economists were stymied about why large increases in wages were occurring even with double digit unemployment, a direct contradiction of the Phillips Curve. This theory states high unemployment will dictate low wage growth and vice versa.

Fast forward to today, according to the Phillips Curve, wages should be surging given the historically low unemployment rate.

I would argue the reason for lack of wages is the near 40-year low of the labor participation rate (LPR), which suggests a very large pool of potential workers. The LPR in the late 1970s was about 3% higher than today, albeit it was not at the levels achieved 15 years ago.

Writing rhetorically, perhaps we are experiencing the other end of the proverbial curve that should not occur, statistically low unemployment and inflation.

Commenting about the G-20 meeting, China is now the largest supporter of global trade. In my view, the reason for this stance is obvious. China is an export-dominated country defined as if exports slow, so does the Chinese economy. Countries that depend upon exports for growth and production are at an inherent disadvantage given that some of its economic sovereignty has been surrendered to the end user of its products.

This week is also the commencement of second quarter earnings season. Consensus is expecting a 7.4% increase over a year earlier. As noted earlier, there has been a dearth of profit warnings, thus resulting in the smallest decline in profit expectations since 2011.

How will the results be interpreted? According to Bloomberg, the swing in the NASDAQ has averaged almost 1% a day since June 9, pushing its 30-day volatility relative to the rest of the market, to the highest since 2002.

Bloomberg also writes the average stock in the NASDAQ 100 is down 12% from its 52-week high while 15% are in bear market territory, defined as a decline of 20% or more.

The NASDAQ 100 is composed of the largest companies in the NASDAQ and I believe this data is strong evidence of the myopicy of the markets.

This week’s economic calendar is focused upon inflation data, retail sales, trade and the Beige Book.

Last night the foreign markets were mixed. London was down 0.03%, Paris was up 0.20% and Frankfurt was up 0.39%. China was down 0.17%, Japan was up 0.76% and Hang Sang was up 0.63%.

The Dow should open flat. The 10-year is up 7/32, to yield 2.37%.