Friday, October 13, 2017

U.S. consumer sentiment surged to a 13-year high

October 13,2017
one small voice

U.S. consumer sentiment surged to a 13-year high as Americans’ perceptions of the economy and their own finances rebounded following several major hurricanes, a University of Michigan survey showed Friday.

Highlights of Michigan Sentiment (October, preliminary)

-Sentiment index rose to 101.1 (est. 95), highest since Jan. 2004, from 95.1 in Sept.
-Current conditions gauge, which measures Americans’ perceptions of their finances, jumped to 116.4, highest since Nov. 2000, from 111.7
-Expectations measure increased to 91.3, highest since Jan. 2004, from 84.4

Thursday, September 14, 2017

Trump Prohibits Sale of Lattice Semiconductor Corporation to China Venture Capital Fund under the Defense Production Act of 1950

September 14,2017
one small voice

Washington DC, President Donald J. Trump issued an order prohibiting the acquisition of Lattice Semiconductor Corporation (Lattice) by, among others, China Venture Capital Fund Corporation Limited (CVCF). CVCF is a Chinese corporation owned by Chinese state-owned entities that manages industrial investments and venture capital.

The President made the decision to issue this order under section 721 of the Defense Production Act of 1950, as amended by the Foreign Investment and National Security Act of 2007. Under the Defense Production Act, the President is authorized to suspend or prohibit certain acquisitions that result in foreign control of a United States business if he concludes, among other things, that there is credible evidence that the foreign interest exercising control might take action that threatens to impair the national security of the United States. The President reached this decision upon consideration of the appropriate factors set forth in section 721 of the Defense Production Act and a review of a recommendation from the Committee on Foreign Investment in the United States. The national-security risk posed by the transaction relates to, among other things, the potential transfer of intellectual property to the foreign acquirer, the Chinese government’s role in supporting this transaction, the importance of semiconductor supply chain integrity to the United States Government, and the use of Lattice products by the United States Government.

Wednesday, August 30, 2017

US revised second-quarter GDP Jumps to 3.0% vs 2.7% rise expected

August 30,2017
the staff of the Ridgewood blog

Ridgewood NJ, the U.S. economy grew faster than initially thought in the second quarter, notching its quickest pace in more than two years.
The Economy also showed signs that the momentum was sustained at the start of the third quarter.
Gross domestic product (GDP) increased at a 3.0 percent annual rate in the April-June period, the Commerce Department said.

Thursday, August 17, 2017

Atlanta FED forecasts Surging GDP Growth

August 17,2017
only one small voice

Atlanta GA, the Atlanta FED's Latest forecast is for 3.8 percent GDP Growth . The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a "nowcast" of the official estimate prior to its release..

Latest forecast: 3.8 percent — August 16, 2017

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 3.8 percent on August 16, up from 3.7 percent on August 15. The forecast of third-quarter real residential investment growth increased from -0.5 percent to 3.7 percent after this morning's new residential construction report from the U.S. Census Bureau.

Thursday, August 10, 2017

House Financial Services Committee Calls on Agencies to Repudiate Obama's Operation Choke Point

one small voice

Washington, D.C. – House Financial Services Committee Chairman Jeb Hensarling (R-TX), House Judiciary Chairman Bob Goodlatte (R-Va.), Regulatory Reform, Commercial and Antitrust Law Subcommittee Chairman Tom Marino (R-Pa.), Financial Institutions and Consumer Credit Subcommittee Chairman Blaine Luetkemeyer (R-Mo.), and Courts, Intellectual Property & the Internet Subcommittee Chairman Darrell Issa (R-Ca.) sent a letter to Attorney General Jeff Sessions, Federal Reserve Board Chair Janet Yellen, and Acting Comptroller Keith Noreika regarding Operation Choke Point.

The Obama Administration initiated Operation Choke Point to discourage financial institutions from offering services to businesses that the Administration opposed—including, for example, firearms dealers. This letter requests that the DOJ, Federal Reserve Board, and the Comptroller of the Currency issue formal statements to repudiate Operation Choke Point.

The letter states, in part:

“[w]e request that your respective Departments and agencies issue clear and public formal policy statements repudiating Operation Choke Point and the abuses by financial regulators of the “reputation risk” guidance they developed and promulgated under Operation Choke Point’s auspices. Financial institutions should be given explicit assurance that they may serve these unfairly targeted industries just like any other legitimate businesses. Institutions should also be encouraged to restore long-standing relationships with lawful, targeted industries.”

The full text of today’s letter is available here and below.

August 10, 2017

The Honorable Jeff Sessions Attorney General U.S. Department of Justice Washington, D.C. 20530

The Honorable Janet Yellen
Federal Reserve Board of Governors

Mr. Keith Noreika Acting Comptroller Office of the Comptroller of the Currency

Dear Attorney General Sessions, Chair Yellen and Acting Comptroller Noreika:

Operation Choke Point was an Obama Administration initiative that destroyed legitimate businesses to which that Administration was ideologically opposed (e.g., firearms dealers) by intimidating financial institutions into denying banking services to those businesses. The damage from this initiative lingers, and [we] request that you take immediate corrective action.

Obama Administration attorneys first proposed Operation Choke Point (OCP) in November 2012. From February 2013 through August 2013, DOJ issued 60 administrative subpoenas to banks doing business with certain types of entities.[1] Affixed to some of these subpoenas, was a list from the Federal Deposit Insurance Corporation and the Comptroller of the Currency (COC) captioned “High Risk Merchants/Activities.” The list included legitimate industries like payday lenders and firearms dealers.[2]

The Administration anticipated that, as a result of these actions, banks would stop serving lawful businesses in the targeted categories. For example, with regard to payday lenders a 2013 internal DOJ memo read:

Although we recognize the possibility that banks may have therefore decided to stop doing business with legitimate lenders, we do not believe that such decisions should alter our investigative plans. Solving that problem – if it exists – should be left to legitimate lenders themselves who can, through their own dealings with banks, present sufficient information to the banks to convince them that their business model and lending operations are wholly legitimate.[3]

In the Obama Justice Department’s view, targeted industries were guilty until proven innocent, and that was fine in its view, because the presumption of guilt was rebuttable. This theory, which underlay Operation Choke Point, turned traditional law enforcement procedure on its head. Ordinarily speaking, law enforcement moves from the specific to the general. A bad actor is identified and then gradually the net widens to capture co-conspirators or a larger criminal enterprise. OCP started by presuming a whole industry guilty until individual merchants prove their innocence.

Oversight by [our] Committees concluded that DOJ exceeded its legal authority to run Operation Choke Point and that the program inflicted an unacceptable level of damage on legitimate business categories that the Administration nevertheless deemed objectionable.[4]

On June 22, 2017, the Judiciary Committee convened a roundtable discussion with victims of Operation Choke Point to discuss their experiences and the need for remedial action in the new Administration. It featured business owners from across the country representing industries including firearms dealers, payday lenders and amusement game owners. They all had similar stories of longstanding banking relationships suddenly terminated without any evidence of heightened risk or wrongdoing.

One of the participants—a veteran and a former law enforcement professional—described how the bank came to him and said that, the government “came in like a bunch of thugs” and pressured them to stop serving his small firearms business. Without access to banking services, his business faltered. He concluded, on the verge of tears, by stating that there was “no fix” for what happened to him. Another participant, a firearms manufacturer who had been in business over 40 years, described that he held accounts at over twenty financial institutions and within a short period of time all were terminated. Participants from other industries told of losing access to banking services as recently as April 2017. In short, the “de-risking” effects of Operation Choke Point continue to reverberate.

As highly regulated and risk-averse entities, banks may be hesitant to resume providing services to legitimate businesses unfairly targeted by Operation Choke Point absent explicit directives countermanding the Obama Administration’s previous guidance. We would also note that a number of the targeted industries, such as the firearms industry, are already heavily regulated by the federal government. In fact, firearms manufacturers and dealers cannot legally exist without permits granted by the federal government.

On January 28, 2015, following intense Congressional oversight, the FDIC took a positive step, announcing guidance encouraging banks to judge customer relationships on a case-by-case basis rather than “declining to provide banking services to entire categories of customers.”[5] However, while the FDIC rescinded its “High-Risk Merchant” list, it has never (a) rescinded its general guidance about reputation risks posed by bank customers, or (b) retracted its assertion that the industries it had listed are particularly high-risk. We are concerned and informed that banks have continued to refuse to serve law-abiding members of lawful industries on account of their purported poor reputations.

Accordingly, we request that your respective Departments and agencies issue clear and public formal policy statements repudiating Operation Choke Point and the abuses by financial regulators of the “reputation risk” guidance they developed and promulgated under Operation Chokepoint’s auspices. Financial institutions should be given explicit assurance that they may serve these unfairly targeted industries just like any other legitimate businesses. Institutions should also be encouraged to restore long-standing relationships with lawful, targeted industries. Finally, the regulatory agencies should be directed to implement procedures to insure that field-level examiners adhere to this policy, including, if appropriate, by barring the use of “moral suasion” to pressure banks not to serve certain categories of customers.

Because the injury from Operation Choke Point is ongoing, we request that you reply to us with a plan for remedial action by August 31, 2017.


Bob Goodlatte

Jeb Hensarling

Tom Marino

Blaine Luetkemeyer

Darrell Issa

[1] The FDIC’s Role in Operation Choke Point and Supervisory Approach to Institutions that Conducted Business with Merchants Associated with High-Risk Activities, Office of Inspector Gen. (Sep. 2015), [2] Federal Deposit Insurance Corporation’s Involvement in “Operation Choke Point.”Committee on Oversight and Government Reform 3 (Dec. 8, 2014), [3] Memorandum from Michael S. Blume, Director, Consumer Prot. Branch, to Stuart F. Delery, Assistant Attorney Gen., U.S. Dep’t of Justice (Sept. 9, 2013) [HOGR-3PP000335]. [4] See Staff of H.R. Comm. on the Judiciary, 113th Cong., Rep. on Operation Choke Point (Comm. Print 2014). [5] Fed. Deposit Insurance Corp., Division of Risk Management Supervision, Statement on Providing Banking Services,

Wednesday, August 09, 2017

A House committee prepares a contempt case against Richard Cordray

By James Freeman (WSJ) Aug. 4, 2017

Republican staff of the House Financial Services Committee have completed a legal analysis concluding there is sufficient basis for Congress to initiate contempt proceedings against Consumer Financial Protection Bureau Director Richard Cordray. The staff report, which may be released as soon as this afternoon, describes how Mr. Cordray has defied a committee subpoena for documents related to his effort to ban arbitration agreements.

The arbitration ban itself was a Beltway beauty, designed to benefit the trial lawyers lining up to fund an expected Cordray run for governor of Ohio. Getting rid of arbitration as a way to resolve disputes between financial consumers and service providers would allow more class-action lawsuits. A Journal editorial explained why the House voted last month to repeal the rule:

Mr. Cordray said the ban would protect consumers, but his own agency’s study suggests otherwise. Consumers who prevailed in arbitration recovered on average $5,389 while those who joined class actions received $32. Trial lawyers on average raked in $1 million.

Most claims can’t be litigated on a class basis—though trial attorneys try—and arbitration provides an affordable and expeditious alternative. Companies typically pick up most if not all of the filing, administrative and arbitrator costs. Consumers usually obtain relief within two months, while class actions typically take years to resolve.

Readers may also recall that Mr. Cordray’s bureau executed an appalling series of shakedowns against auto lenders, described in another editorial in 2015:

The regulators are simply guessing the race of borrowers based on their last names and addresses in the loan files and then claiming racism if the people they guessed were minorities seemed to be paying higher rates.

This was too much even for House Democrats like Rep. David Scott of Georgia who said the bureau’s work was based on “shamefully flawed” and “inaccurate” information. At a hearing Rep. Scott told Mr. Cordray, that “it was downright insulting to African Americans because you just assume their last name was Johnson or Williams or Robinson or maybe even Scott.” The Georgia Democrat added that “you directed an extraordinary and deceitful approach.”

Did Mr. Cordray’s bureau employ the same deceitful approach when it was crafting its lawyer-friendly arbitration rule? What’s clear is that for more than a year, the bureau has resisted turning over key documents sought by Chairman Jeb Hensarling’s House Financial Services Committee. Running a sort of bureaucratic version of the four-corners offense, the Cordray crowd has dragged its feet on responding and then periodically shared files that were incomplete, irrelevant or already available to the committee. What are they hiding?

As one of the most active creatures in Washington’s bureaucratic swamp, Mr. Cordray leads an outfit that has dropped broad civil investigative demands for documents on companies across the financial landscape. The bureau hardly seems to care if the firms are even within its jurisdiction. Now the Cordray gang doesn’t want to allow a congressional committee exercising its legitimate oversight powers to get a good look inside. Another classic Washington double standard.

While Barack Obama was president, regulators like Mr. Cordray could laugh at a contempt vote in Congress. But now the stakes are a little higher because the Trump Justice Department could choose to act. If the House cited Mr. Cordray for criminal contempt he could be staring at a misdemeanor charge with possible jail time. The House could instead choose to cite him merely for civil contempt, which would allow the House to sue him for the documents in federal court. House Financial Services is now in the process of taking depositions from several senior bureau officials.

Mr. Cordray has done his best to expand the Beltway swamp. Before he tries to do the same in Columbus, perhaps he will finally be held to account.