Tag Archives: Deutsche Bank

Will The Jury Listen To The Evidence?

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On Thursday, The Epoch Times posted an article about the ongoing trial of President Trump in New York. It seems that the evidence doesn’t fit the charges.

The article reports:

“Financial reporting misconduct is a very important part of any course that I teach,” said Mr. Bartov (Eli Bartov, professor of accounting at NYU’s Stern School of Business and an award-winning researcher,). Being able to detect financial fraud early can be rather profitable, he explained, such as the famous case of Enron.

…Though the judge allowed him to testify as an expert in financial accounting and credit analysis, it came after lengthy objection from the state attorneys, who argued the professor had expertise in valuing publicly traded companies, not Deutsche Bank’s decisions. Mr. Kise commented that the state attorneys have objected to this one witness more than any of the others, “which tells me they’re terrified of this witness.”

Mr. Bartov said that after reviewing the lawsuit against the Trump Organization, “the most important evidence is the credit reports of Deutsche Bank.”

Those reports, rather than the Trump statements of financial condition (SFoCs), “really tell you the whole story,” he explained. “You can spin it any way you want, but everything is there.”

Mr. Bartov, who teaches students how to do credit reports just like the Deutsche Bank credit report on Trump Organization, said the person who prepared this report may well have once been his student.

“I am not going to provide an independent valuation of these because it’s not necessary, not because I can’t do it,” he explained. “My main finding is there is no evidence whatsoever of any accounting fraud.”

“The SFoCs over the years were not materially mistaken,” Mr. Bartov said.

The statement prompted the judge to ask if he meant that the attorney general’s “complaint had no merit.”

“This is absolutely my opinion,” he said. “You read the complaint: the complaint has numerous allegations of valuations of GAAP [generally accepted accounting principles]. There is no specific reference to a provision of GAAP that was violated.”

Mr. Bartov concluded:

Mr. Bartov, who teaches students how to do credit reports just like the Deutsche Bank credit report on Trump Organization, said the person who prepared this report may well have once been his student.

“I am not going to provide an independent valuation of these because it’s not necessary, not because I can’t do it,” he explained. “My main finding is there is no evidence whatsoever of any accounting fraud.”

“The SFoCs over the years were not materially mistaken,” Mr. Bartov said.

The statement prompted the judge to ask if he meant that the attorney general’s “complaint had no merit.”

“This is absolutely my opinion,” he said. “You read the complaint: the complaint has numerous allegations of valuations of GAAP [generally accepted accounting principles]. There is no specific reference to a provision of GAAP that was violated.”

Is the jury listening? Will the mainstream media report this? The answers to those two questions will tell us (if we don’t know already) whether or not this is a witchhunt.

I Guess That Testimony Did Not Go As Planned

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On Friday, Breitbart posted an article about the ongoing trial of President Trump in New York. It is becoming apparent that President Trump is being tried for a crime where there was no victim.

The article reports:

A Deutsche Bank AG executive told a court in New York on Tuesday that it is not unusual for loan clients to overstate their net worth, and that the bank does its own due diligence in determining eligibility for loans.

Another executive testified that the bank had benefited from its business relationship with Trump and had wanted to continue that relationship — all of which runs against Attorney General Letitia James’s civil fraud case against Trump: there was no one harmed by alleged overestimates of his worth.

Trump faces the first case ever brought in New York in which a borrower is being sued for fraud when no one is claiming actual harm. The state is seeking a $250 million fine against Trump, and wants him to be forced to give up control of his businesses.

Judge Arthur Engoron, an elected Democrat, issued a summary judgment that Trump was liable before Trump was ever able to mount a defense. The current phase of the trial is simply about the penalty. But it is undermining the state’s basic allegations.

On December 1st, The Messenger reported:

The evidence shows that banks made money on these loans, which were paid off either early or on time. In fact, none of the banks complained about the Trump organization’s estimations, which were accompanied by a warning that the banks should not rely on those estimates.

Moreover, James is seeking to kill a corporation once viewed as iconic in New York, not just by denying the certificates for the Trumps to do business in the city but by imposing $250 million in penalties for money that no one actually lost.

That all became curiouser this week when two bankers were called by the defense. Rosemary Vrablic and David Williams worked on Deutsche Bank loans to the Trumps for years, and they testified that the banks made millions and viewed Trump as a much-sought-after “whale” client — what Vrablic described as a “very high net-worth individual.”

Williams testified that net worth is “subjective” in such documents as property valuations and are offered as mere “estimates.” It is not uncommon for a bank’s estimates to differ from a client’s.

If nothing else, this illustrates the absurdity of the case.

Something We Need To Pay Attention To

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On Monday CNBC posted an article about a recent statement put out by Deutsche Bank economists.

The article reports:

In a forecast that is well outside the consensus from policymakers and Wall Street, Deutsche issued a dire warning that focusing on stimulus while dismissing inflation fears will prove to be a mistake if not in the near term then in 2023 and beyond.

The analysis especially points the finger at the Federal Reserve and its new framework in which it will tolerate higher inflation for the sake of a full and inclusive recovery. The firm contends that the Fed’s intention not to tighten policy until inflation shows a sustained rise will have dire impacts.

“The consequence of delay will be greater disruption of economic and financial activity than would be otherwise be the case when the Fed does finally act,” Deutsche’s chief economist, David Folkerts-Landau, and others wrote. “In turn, this could create a significant recession and set off a chain of financial distress around the world, particularly in emerging markets.”

As part of its approach to inflation, the Fed won’t raise interest rates or curtail its asset purchase program until it sees “substantial further progress” toward its inclusive goals. Multiple central bank officials have said they are not near those objectives.

In the meantime, indicators such as the consumer price and personal consumption expenditures price indices are well above the Fed’s 2% inflation goal. Policymakers say the current rise in inflation is temporary and will abate once supply disruptions and base effects from the early months of the coronavirus pandemic crisis wear off.

The Deutsche team disagrees, saying that aggressive stimulus and fundamental economic changes will present inflation ahead that the Fed will be ill-prepared to address.

“It may take a year longer until 2023 but inflation will re-emerge. And while it is admirable that this patience is due to the fact that the Fed’s priorities are shifting towards social goals, neglecting inflation leaves global economies sitting on a time bomb,” Folkerts-Landau said. “The effects could be devastating, particularly for the most vulnerable in society.”

I realize that the Deutsche team’s conclusions may not be the majority opinion, but based on what I am currently seeing, I tend to think they are correct. Endless deficit spending has never led a nation into continued prosperity.

The Viciousness Of The Political Left

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The following meme has appeared on Facebook a number of times:

Unfortunately, this is becoming more obvious, even in the early days of the Biden administration. Aside from the attempt to limit the free speech of conservatives, the cancel culture is ramping up its attempts to limit President Trump’s ability to take part in the economy.

The Gateway Pundit reported the following today:

A Florida bank announced on Thursday that they have closed President Donald Trump’s bank accounts.

Trump’s money-market accounts at Banks United held between $5.1 million and $25.2 million, according to his financial disclosures.

…Additionally, Signature Bank in New York and Deutsche Bank have also said that they have cut ties with Trump and his businesses.

“Signature Bank notably took a strong stance against Trump and his allies in congress, calling for him to resign and saying they would not conduct business with lawmakers who had objected to certifying the presidential election,” The Hill reports. They added that “Deutsche Bank is currently seeking to resolve more than $300 million in loans, reportedly looking to offload the loans onto another lender due to the negative press their dealings with Trump has caused. Deutsche Bank’s relationship with the Trump Organization is under a civil investigation by New York attorney general Letitia James.”

After a while, you have to wonder what this vindictiveness is about. President Trump revived a struggling economy that helped everyone across the economic spectrum. What is the political left so afraid of? Why do they hate this man so much? Unfortunately many of our Congressmen have already said that they want investigations into Trump administration members and Trump supporters. This is not the way a republic is supposed to operate. We are beginning to strongly resemble a third-world country.

How Is This Not Harassment?

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Yesterday Politico posted an article about the Democrats in Congress’ ongoing quest for all of President Trump’s financial records. The article reports that President Donald Trump and his family are suing Deutsche Bank and Capital One to block subpoenas issued by House Democrats seeking Trump’s financial records. The President’s attorneys argued that the subpoenas serve “no legitimate or lawful purpose.” The scope of the subpoenas is ridiculous.

The article reports:

The committees, the Trumps’ lawyers said, have refused to provide copies of the subpoenas to the Trump family, and their scope was learned from Deustche Bank and Capital One. But according to the lawsuit, the committees are seeking “all banking and financial records not just concerning the individual plaintiffs, but also their own family members.”

“This means the subpoenas request documents about accounts of the plaintiffs’ children (and in some cases, grandchildren),” the lawyers said.

For most of the documents, the lawyers added, the committees are demanding records from the last 10 years but, for others, the request is “unbounded,” going back to the childhoods of individual Trumps.

“The House of Representatives is demanding, among other things, records of every single checking withdrawal, credit-card swipe, or debit-card purchase — no matter how trivial or small — made by each and every member of the Trump family,” they said.

We have people in Congress who are seeking the bank records of children and grandchildren. This is harassment.

The Trump Economy Continues To Make News

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Yesterday The Conservative Treehouse posted an article about the growth of the American economy under President Trump.

The article reports:

The Bureau of Labor Statistics has released some remarkable economic data today. There are more than seven million current job openings [See Here] and the year-over-year average wage gains are 3.3% [See Here]

I suggest you follow the link and read the entire article. It is a fairly detailed analysis of what has happened due to de-regulation and tax cuts.

The article concludes:

The investing class economy, ie. another name for a ‘service-driven economy’, has been the only source of historic reference for approximately three decades. These talking heads convinced themselves that a “service driven economy” was the ONLY economy ever possible for the U.S. in the future.

Back in January 2017 Deutsche Bank began thinking about it, applying new models, trying to conceptualize and quantify MAGAnomics, and trying to walk out the potential ramifications.  They began talking about Trump doubling the U.S. GDP growth rate when all U.S. investment groups couldn’t yet fathom the possibility.

It’s like waking up on Christmas morning every day to see the pontificating Fed struggling to quantify analysis of their surrounding reality based on flawed assumptions. They simply have no understanding of what happens within the new dimension.

Monetary policy, Fed control over the economy, is disconnected and will stay that way for approximately another 12-14 months, until Main Street regains full operational strength –and– economic parity is achieved.

As we have continued to share, CTH believes the paycheck-to-paycheck working middle-class are going to see a considerable rise in wages and standard of living.  How high can wages rise?… that depends on the pressure; and right now the pressure is massive.  I’m not going to dismiss the possibility we could see double digit increases in year-over-year wage growth in multiple economic sectors in several regions of the U.S.

Remember, as wages and benefits increase – millions of people are coming back into the labor market to take advantage of the income opportunities.  The statistics on the invisible workforce varies, but there are millions of people taking on new jobs in this economy and the participation rate is growing.

It is time that the average working American got a few economic breaks. President Trump is providing those breaks.

What Results Look Like

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During the final weeks of the mid-term election campaign, you will hear Democrats say, “The tax cuts were only for the rich–they didn’t help anyone else.” A misinformed friend of mine posted that on Facebook recently. So let’s look at the facts.

The Conservative Treehouse posted an article yesterday about the impact of the Trump Tax Cuts on average Americans.

The article quotes a Business Insider article that reports the following:

  • Walgreens Boots Alliance announced that it will make investments around $150 million to boost mainly its in-store wages in fiscal 2019 in the light of favorable tax reforms.
  • Walgreens CFO said Thursday that the increase in store wages was “in light of the favorable tax reforms in the US.”

…The pharmacy-chain owner Walgreens Boots Alliance announced Thursday that it will make investments of about $150 million to boost mainly its in-store wages in fiscal 2019 in wake of  President Donald Trump’s tax reforms.

The announcement marks a 50% increase in company’s investment towards wages which was announced in March. At the time, Walgreens said it would invest around $100 million per annum to increase wages beginning later this calendar year.

“We will be making select incremental investments of around $150 million in fiscal 2019, mainly in store wages, but also to fuel our new community health care initiatives, and you can view these in light of the favorable tax reforms in the US,” Walgreens CFO James Kehoe said Thursday, on the company’s fourth-quarter earnings call. 

The article at Business Insider explains how the tax cuts have impacted the average worker:

In December 2017,  the Trump administration slashed the federal corporate tax rate from 35% to 21% and allowed a one-time repatriation of overseas cash. The bill also allows companies to bring overseas profits back home to invest in domestic projects or repurchase of shares.

Kehoe said the investments will result in a headwind of approximately $0.12 a share, or two percentage points of earnings-per-share growth for the coming fiscal year. 

US retailers are scrambling to keep workers as they look for opportunities with higher pay and attractive benefits. The US unemployment rate fell to a 48-year low of 3.7% in September. According to the Bureau of Labour statistics, there were 757,000 retail-job openings across the United States in July, which is about 100,000 more than a year ago.

The surge in the number of retail jobs has allowed workers the opportunity to move around within the industry. As a result, companies are raising wages to try and retain workers. Earlier this month, Amazon hiked its minimum wage to $15 per hour, effective November 1. That followed wage hikes from places like Target and Costco. 

That is significant.

The Conservative Treehouse concludes:

Back in January 2017 Deutsche Bank began thinking about it, applying new models, trying to conceptualize and quantify MAGAnomics, and trying to walk out the potential ramifications.  They began talking about Trump doubling the U.S. GDP growth rate when all U.S. investment groups couldn’t yet fathom the possibility.

It’s like waking up on Christmas morning every day to see the pontificating Fed struggling to quantify analysis of their surrounding reality based on flawed assumptions. They simply have no understanding of what happens within the new dimension.

Monetary policy, Fed control over the economy, is disconnected and will stay that way for approximately another 12-14 months, until Main Street regains full operational strength –and– economic parity is achieved.

As we have continued to share, CTH believes the paycheck-to-paycheck working middle-class are going to see a considerable rise in wages and standard of living.  How high can wages rise?… that depends on the pressure; and right now the pressure is massive.  I’m not going to dismiss the possibility we could see double digit increases in year-over-year wage growth in multiple economic sectors in several regions of the U.S.

Remember, as wages and benefits increase – millions of people are coming back into the labor market to take advantage of the income opportunities.  The statistics on the invisible workforce varies, but there are millions of people taking on new jobs in this economy and the participation rate is growing.

Winnamins.  We’ll need lots of them…

Wow.

 

The Neighborhood Bully Meets His Match

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One of the unpleasant outcomes of the financial crisis of 2008 is the way the Obama Administration has treated many of the banks who wrote some of the bad mortgages. Never mind that many of the bad mortgages were required to be written because of government regulations regarding discrimination or that some of the leading Democrats in Congress were making sure that bad loans were continually being made, the Obama Administration is going to make the big banks pay for bad policy on the part of the government. Well, one bank has decided to stand up to the bully that the federal government has become.

The Wall Street Journal reported today that the Japanese bank Nomura is refusing to settle out of court in a case brought against them by the Federal Housing Finance Agency (FHFA).

The article reports:

The claim is that Fan and Fred—the government-created dominators of the mortgage market—were unwitting victims of the banks. To believe this fairy tale, you have to ignore the findings of a bipartisan congressional inquiry, as well as separate federal lawsuits in which the government is arguing that Fan and Fred did the misleading.

Yet regulators figured that the banks would probably cave to avoid unpleasant publicity and a juror pool angry about bank bailouts. And 17 banks did cave, paying the Beltway bandits nearly $18 billion to make these Little Orphan Fannie claims disappear. Firms like Bank of America , Deutsche Bank, Goldman Sachs and J.P. Morgan all wrote checks to buy peace with the politicos.

Nomura did not settle out of court and the trial is set for March 16. This is causing the government lawyers to lose no small amount of sleep.

The article reports:

In January the feds dropped their claims for damages. The government claims it can recover as much or more from the “equitable” claims, in which Nomura would merely be required to buy back the securities it sold to Fan and Fred. But Nomura says the damage claims were the most lucrative part of the case.

Why would the government want to limit its potential winnings shortly before the trial? Well, because abandoning damage claims lets the government avoid a jury trial. That means leaving it all to federal Judge Denise Cote, who is well known for tilting toward the government against business and has been siding with the feds in pre-trial rulings.

FHFA’s lawyer explained in a recent filing that a “bench trial clearly would conserve time and assets.” That may be true. But when the defendant is a large multinational bank and the government doesn’t want to face a jury in this era of public anger at big banks, that tells you how much confidence the feds have in their case.

This trial could be very interesting. Last fall, Nomura Bank offered evidence to show that Fannie Mae and Freddie Mac went shopping for sub-prime mortgages in order to align themselves with their political partners.

It would be nice to see this go before a jury that would get a chance to see the true facts of the case. The Obama Administration has engaged in shakedowns of anyone they think they can get money from or anyone they consider a political enemy. It would be nice to see that practice end.