Saturday, September 23, 2017
Friday, September 22, 2017
NATHAN HALE EXECUTED BY BRITISH
"I regret that I have but one life to give for my country."
From This Day In History:
A graduate of Yale University, Hale joined a Connecticut regiment in 1775 and served in the successful siege of British-occupied Boston. On September 10, 1776, he volunteered to cross behind British lines on Long Island to spy on the British in preparation for the Battle of Harlem Heights.
Disguised as a Dutch schoolmaster, the Yale-educated Hale slipped behind British lines on Long Island and successfully gathered information about British troop movements for the next several weeks. While Hale was behind enemy lines, the British invaded the island of Manhattan; they took control of the city on September 15, 1776. When the city was set on fire on September 20, British soldiers were told to look out for sympathizers to the Patriot cause. The following evening, September 21, Hale was captured while sailing Long Island Sound, trying to cross back into American-controlled territory. Although rumors surfaced that Hale was betrayed by his first cousin and British Loyalist Samuel Hale, the exact circumstances of Hale’s capture have never been discovered.
Hale was interrogated by British General William Howe and, when it was discovered that he was carrying incriminating documents, General Howe ordered his execution for spying, which was set for the following morning. After being led to the gallows, legend holds that the 21-year-old Hale said, “I only regret that I have but one life to give for my country.” There is no historical record to prove that Hale actually made this statement, but, if he did, he may have been inspired by these lines in English author Joseph Addison’s 1713 play Cato: “What a pity it is/That we can die but once to serve our country.”
Wikipedia
Lincoln Issues Emancipation Proclamation
Covers Slaves in Confederate States Only - Not Union States
On this day in 1862, President Abraham Lincoln used his executive war powers as justification for issuance of a preliminary Emancipation Proclamation effective only in the states of the Confederacy, and nowhere else in the United States. The proclamation set a date for the freedom of more than 3 million black slaves in the Confederacy and effectively recast the Civil War as a fight against slavery.
From This Day In History:
In July 1862, Lincoln informed his cabinet that he would issue an emancipation proclamation but that it would exempt the so-called border states, which had slaveholders but remained loyal to the Union. His cabinet persuaded him not to make the announcement until after a Union victory. Lincoln’s opportunity came following the Union win at the Battle of Antietam in September 1862. On September 22, the president announced that slaves in areas still in rebellion within 100 days would be free.
On January 1, 1863, Lincoln issued the final Emancipation Proclamation, which declared “that all persons held as slaves” within the rebel states “are, and henceforward shall be free.” The proclamation also called for the recruitment and establishment of black military units among the Union forces. An estimated 180,000 African Americans went on to serve in the army, while another 18,000 served in the navy.
After the Emancipation Proclamation, backing the Confederacy was seen as favoring slavery. It became impossible for anti-slavery nations such as Great Britain and France, who had been friendly to the Confederacy, to get involved on behalf of the South. The proclamation also unified and strengthened Lincoln’s party, the Republicans, helping them stay in power for the next two decades.
The proclamation was a presidential order and not a law passed by Congress, so Lincoln then pushed for an antislavery amendment to the U.S. Constitution to ensure its permanence. With the passage of the 13th Amendment in 1865, slavery was eliminated throughout America (although blacks would face another century of struggle before they truly began to gain equal rights).
Lincoln’s handwritten draft of the final Emancipation Proclamation was destroyed in the Chicago Fire of 1871. Today, the original official version of the document is housed in the National Archives in Washington, D.C.
Grant's Interest Rate Observer
Child's Play
An increasingly stark contrast in credit: capital flows forth like beer at a frat party, while large swaths of corporate debtors nevertheless struggle to ward off the economic grim reaper.
Proximate location of the gushing monetary spigots is the Old Continent. Data from the ECB via The Wall Street Journal show that European buying of non-European bonds reached €160.8 billion ($191.7 billion) in the May-July period, the most on record. It’s easy to understand their wandering eye: yields on the BofA ML Europe High Yield Index have recently dropped below those of the BofA ML U.S. Treasury Index.
Domestic borrowers are the beneficiary, and they are well aware of their strategic upper hand. That fact is underscored by a dispatch in Bloomberg yesterday noting the increasing irrelevance of historically standard lender safeguard clauses.
Protections have gotten so lax in the $1 trillion market for U.S. leveraged loans that if an offering comes with decent covenants, lenders take it as a sign that something’s wrong with the deal. ‘You have to think twice when you see a loan with a covenant these days’ says Thomas Majewski, managing partner and founder of Eagle Point Capital Management.
‘It’s basically the worst it’s ever been in terms of loan covenant protections,’ says Derek Gluckman, senior covenant officer at credit-rating firm Moody’s Investors Service.
Beyond demonstrating the leveraged loan market’s resemblance to a Giffen good (where demand rises as a product becomes more expensive), the piece goes on to detail creditors’ ready willingness to accept transparent accounting gimmicks. Note the example of private equity firm Hellman & Friedman’s $265 million loan offering to fund its buyout of audio-visual company SnapAV:
The new owner used an accounting method known as add-backs to reduce a measure of the company’s leverage, which makes it look more creditworthy. The add-backs, which take into account things like deferred revenues, boosted Ebitda by about a third to $50.1 million from $37.5 million. That reduced its leverage to 5.4 times from more than 7 times, according to loan documents sent to investors.
Still, SnapAV attracted enough willing lenders to sell the loans slightly cheaper than was initially discussed – with no financial maintenance covenants.
Ready access to capital is not enough for large swaths of the retail realm. A June research report from Moody’s noted that the number of retailers sporting distressed ratings of Caa (“judged to be of poor standing and are subject to very high credit risk”) or lower rose to 22 from 19 in February, higher than at any point in the great financial crisis and representing about 15% of the agency’s retail and apparel universe.
That number could grow further: Moody’s notes that seven additional B2/B3 rated issuers (“considered speculative and subject to high credit risk”) face an aggregate $1.1 billion in maturities on asset-backed loan and revolving credit facilities in 2018.
The contrasting duality of lending market euphoria and recession-levels of corporate duress is perhaps best illustrated by a bulletin yesterday from LCD News, titled: “Mattel Snags Looser Credit Covenants in the Wake of Toys ‘R’ Us Ch. 11.”
Mattel today disclosed amendments to its credit facility…providing for relief from its consolidated debt-to-consolidated EBITDA requirement for the fiscal third quarter of 2017, and an increase in the ratio threshold to 4.5x for the fiscal fourth quarter, from 3.75x previously.
In its most recent 10-K filing, Mattel noted that Toys ‘R’ Us was its second biggest customer after Wal-Mart, contributing about $600 million in revenues for 2016, about 11% of its top line. Mattel shares have been more than cut in half from their mid-2016 interim highs, and net debt of $2.37 billion as of June 30 compares to $690 million in trailing 12-month adjusted EBITDA, a leverage ratio of about 3.4 times. 2016 revenues of $5.45 billion represented the fourth straight year of contraction, down 16% from 2013’s $6.5 billion. 2016 free cash flow of $332 million is down more than 25% from the $446 million generated in 2013.
In choosing to adjust its borrowing terms, Mattel management provides a glimpse of its future: More leverage, weaker revenue, lower free cash flow. Creditors don’t seem to mind.
The Art of the Deal
Trump’s financial strategy persuades China to put screws to North Korea
Washington TimesThursday, September 21, 2017
Grant's Interest Rate Observer on the Downgrade of China's Sovereign Credit Rating
When you’re chewing on life’s gristle: don’t grumble, give a whistle!
Standard & Poor’s overnight downgrade of China’s sovereign credit rating (to A-plus from double-A-minus) hasn’t exactly fomented mass panic. A sampling of cheerful reactions:
“Largely a non-event from a market perspective. I don’t think it will have an adverse impact on the sovereign issue or on the future borrowing of corporates.” – Todd Schubert, head of fixed-income research at Bank of Singapore.
“Moody’s [which downgraded China to A1 from Aa3 on May 24] was the first mover and we all remember spreads squeezed back in. So S&P just played catch-up to Moody’s and we expect marginal impact on spreads.” – Antonio Cailao, director of Asian credit trading at ING Bank NV.
“S&P’s is more of a catch-up rating action. There should not be much impact on credit markets. A+ is still a solid investment grade rating. There is no material information in S&P’s release that the market was not already aware of.” – Neel Gopalakrishnan, senior credit strategist at DBS Group Holdings Ltd.
“The impact on Chinese asset prices will probably be on the upside. Large state-backed funds will probably buy rather than sell Chinese bonds and stocks.” – Ziyun Wang, a founding partner at DeepBlue Global Investment Ltd.
“The news could read positively in China. Domestic investors may expect the government to release supportive policies to ease any disruption.” – Qin Han, chief bond analyst at Guotai Junan Securities Co.
“Chinese fund managers are likely to sit tight on their positions. It would be a good opportunity to buy on the dip.” -- Qiu Zhicheng, strategist at ICBC International Research Ltd.
“Why S&P’s First China Downgrade Since 1999 Is Good News for Bulls” – Bloomberg Headline.
“Today’s downgrade means one fewer time in the future that China can be downgraded. Bullish!” – Grant’s Interest Rate Observer.
In fairness to the carefree cavalcade, recent sovereign downgrades have in fact marked favorable entry points. Moody’s May downgrade of China was followed by a 10% advance in the Shanghai Composite Index, steady action in the Chinese 10-year bond yield and, until recently, an appreciating renminbi/dollar exchange rate. Stateside, the 2011 S&P downgrade of U.S. sovereign debt hardly interrupted the downward march in Treasury yields, while the major equity indices rebounded from a short but steep correction to more than double in the interim six-plus years.
Back in the here and now, S&P’s rationale for the ratings move centered on China’s heavy and fast-growing debt load, with the agency writing that the downgrade, “reflects our assessment that a prolonged period of strong credit growth has increased China’s economic and financial risks.”
The report singles out mushrooming banking sector liabilities as a particular source of concern. Indeed, Chinese banking assets exceeded RMB 243 trillion ($36.9 trillion) at the end of the second quarter, up by more than 11% year-on-year and 300% above their levels at the time of the Lehman Brothers bankruptcy. That foots to about 311% of trailing four quarter economic output of RMB 78 trillion ($11.8 trillion).
National Review
Graham-Cassidy Is Better Than Just a Fix to Obamacare
Graham-Cassidy has merit because it holds out the prospect of reconstructing a properly competitive insurance market. It also represents a major improvement over the current structure of Medicaid. Its critics, including Senator Rand Paul, are wrong to argue that it leaves 90 percent of Obamacare intact — that may be true of its narrow fiscal impact, but it would sweep aside that legislation’s most dysfunctional incentives and lay the groundwork necessary for further incremental improvements.
National ReviewWednesday, September 20, 2017
Sharyl Attkisson, The Hill
It looks like Obama did spy on Trump, just as he apparently did to me
The HillTuesday, September 19, 2017
Rush Limbaugh: Obama's Wiretapping of Trump via Manafort Worse than Watergate. Trump Was Right and I Knew It!
Rush Limbaugh Today (Transcript)Newly-Elected President Garfield Dies From Attempted Assassination Wounds
Alexander Graham Bell Fails to Locate Second Bullet Near Spine
Was He Killed By His Doctors?
From This Day In History:
On this day in 1881, President James A. Garfield, who had been in office just under four months, succumbs to wounds inflicted by an assassin 80 days earlier, on July 2.
Garfield’s assassin was an attorney and political office-seeker named Charles Guiteau. Guiteau was a relative stranger to the president and his administration in an era when federal positions were doled out on a “who you know” basis. When his requests for an appointment were ignored, a furious Guiteau stalked the president, vowing revenge.
On the morning of July 2, 1881, Garfield headed for the Baltimore and Potomac Railroad station on his way to a short vacation. As he walked through the station toward the waiting train, Guiteau stepped behind the president and fired two shots. The first bullet grazed Garfield’s arm; the second lodged below his pancreas. Doctors made several unsuccessful attempts to remove the bullet while Garfield lay in his White House bedroom, awake and in pain. Alexander Graham Bell, who was one of Garfield’s physicians, tried to use an early version of a metal detector to find the second bullet, but failed.
Historical accounts vary as to the exact cause of Garfield’s death. Some believe that his physicians’ treatments—which included the administration of quinine, morphine, brandy and calomel and feeding him through the rectum–may have hastened his demise. Others insist Garfield died from an already advanced case of heart disease. By early September, Garfield, who was recuperating at a seaside retreat in New Jersey, appeared to be recovering. He died on September 19. Autopsy reports at the time said that pressure from his internal wound had created an aneurism, which was the likely cause of death.
Guiteau was deemed sane by a jury, convicted of murder and hanged on June 30, 1882. Garfield’s spine, which shows the hole created by the bullet, is kept as a historical artifact by the National Museum of Health and Medicine in Washington, D.C.
Althouse: Contrary to Elitists, Trump Has An Advanced Sense of Humor Like Professional Comedians
Link to full blog post below:The NYT writer (a former Obama speechwriter) talked about the "bipartisan Oval Office tradition" of "safe, well-placed quips that crowds are well primed to laugh at," which are the "presidential equivalent of dad jokes."Althouse Blog
Yeah, that's not what Trump does. He's not about warming us all up and signaling that he's a good guy (which, by the way, is something a complete villain would do!). He's actually into comedy and may even do comedy for the sake of comedy and not necessarily as a means to an end (though he seems to believe that he's lucky and things work out for him if he does it his way).
The NYT writer observed Trump's tendency not to laugh at humor. But many professional comedians keep a straight face. I see that as a more advanced level of comedian. Laughing at your own jokes is "dad joke" style, and laughing at other people's jokes is kind of beta. Why do people laugh at the jokes of others? Sometimes, because it's really that funny, you laugh the way you'd laugh if you were alone hearing the joke on the radio. But mostly you laugh at other people's jokes to ingratiate yourself and display that you're a nice person who cares about feelings.
And if you are like that, you're probably not a high-quality comedian yourself, though I'm sure in front of a well-primed audience, you could deliver a scripted dad joke.
Monday, September 18, 2017
Trump’s Trade Chief Calls China an Unprecedented Threat to World Trade
The top U.S. trade official on Monday said that China’s mercantilism poses an “unprecedented” threat to trade that the World Trade Organization is not equipped to handle.“The sheer scale of their coordinated efforts to develop their economy, to subsidize, to create national champions, to force technology transfer, and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented,” U.S. Trade Representative Robert Lighthizer said in a speech at the Center for Strategic and International Studies.
Sunday, September 17, 2017
President Lincoln Arrests And Jails Pro-Confedederate Maryland Legislators To Prevent Secession
On this day in 1861, President Abraham Lincoln had federal troops and Baltimore police officers arrest and jail the pro-Confederate members of the Maryland legislature to prevent them from voting for secession.
Wikipedia
40 years ago 9/19/77,
N.Y. Post
The Day That Destroyed The Working Class But Sowed The Seeds Of Trump
Black Monday In Steel Valley
N.Y. Post
Bring back The Gipper:
1969: Gov. Ronald Reagan Smashes Berkeley Protesters/Tells Off Professors
90 Second Video
Gee, you mean facts matter?
Althouse: NYT Publishes Eye-Popping Correction re Campus Sexual Assault Book Review
Althouse Blog
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