Trump doubles down on Fed attacks, saying it’s ‘going loco’

Saying he’s “not happy” with the Fed, Trump told Fox News he could’t understand why it was continuing to tighten U.S. monetary policy. The Fed is going loco and there’s no reason for them to do it. Even as he expressed concerns about the Fed’s interest rate policy, Trump told reporters at the White House Tuesday that he had not spoken to Fed Chairman Jerome Powell about them. I think the Fed has gone crazy,” the president told reporters. The Fed has raised interest rates three times this year an


Saying he’s “not happy” with the Fed, Trump told Fox News he could’t understand why it was continuing to tighten U.S. monetary policy. The Fed is going loco and there’s no reason for them to do it. Even as he expressed concerns about the Fed’s interest rate policy, Trump told reporters at the White House Tuesday that he had not spoken to Fed Chairman Jerome Powell about them. I think the Fed has gone crazy,” the president told reporters. The Fed has raised interest rates three times this year an
Trump doubles down on Fed attacks, saying it’s ‘going loco’ Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: christina wilkie, everett rosenfeld, nicholas kamm, afp, getty images
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Trump doubles down on Fed attacks, saying it's 'going loco'

U.S. President Donald Trump continued his tirade against the Federal Reserve in a late Wednesday television appearance, laying into the central bank’s policy decisions and suggesting it is to blame for Wednesday’s sharp market decline.

Saying he’s “not happy” with the Fed, Trump told Fox News he could’t understand why it was continuing to tighten U.S. monetary policy. The president has previously expressed displeasure with the central bank, and that’s led some to fear the institution’s independence is at risk.

“The problem I have is with the Fed. The Fed is going wild. I mean, I don’t know what their problem is that they are raising interest rates and it’s ridiculous,” Trump said during a telephone interview with Fox host Shannon Bream. “The problem [causing the market drop] in my opinion is Treasury and the Fed. The Fed is going loco and there’s no reason for them to do it. I’m not happy about it.”

“Loco” means “crazy” in Spanish.

In recent months, U.S. officials have sought to emphasize that Trump would honor the Fed’s historic ability to make decisions independent of political interference. “We as an administration absolutely support the independence of the Fed,” Treasury Secretary Steven Mnuchin reportedly said in July.

As recently as Tuesday, Trump had signaled that he understood the importance of maintaining a firewall between the White House and the Fed. Even as he expressed concerns about the Fed’s interest rate policy, Trump told reporters at the White House Tuesday that he had not spoken to Fed Chairman Jerome Powell about them.

“I like to stay uninvolved with them. I have not spoken” to Powell all year, Trump said.

Trump’s attitude towards the Fed seemed to change Wednesday, however, as fears about rapidly rising rates helped cause the Dow Jones Industrial Average to drop more than 800 points by day’s end. The S&P 500 posted its worst day since February and clinched its first five-day losing streak since 2016.

Early on Wednesday afternoon, Trump knocked his central bank as he deplaned from Air Force One in Erie, Pennsylvania for a campaign rally. “I think the Fed is making a mistake. They are so tight. I think the Fed has gone crazy,” the president told reporters.

The Fed has raised interest rates three times this year and is largely expected to hike once more before year-end.

The most recent September rate hike drew criticism from Trump at the time, who said he was “worried about the fact that they seem to like raising interest rates, we can do other things with the money,” he said.

—CNBC’s Thomas Franck contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: christina wilkie, everett rosenfeld, nicholas kamm, afp, getty images
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Mohamed El-Erian: The US economy looks ‘good’ for the ‘next couple of years at least’

Mohamed El-Erian, chief economic advisor for Allianz, told CNBC on Tuesday that the U.S. economy is “in a good place in terms of growth, the U.S. economy is in a good place in terms of attracting capital.” For his part, El-Erian said the IMF “is too pessimistic” about the world’s largest economy. El-Erian said that any disturbances to U.S. economic growth were likely to come from beyond its borders. “We get to a recession if there are spillbacks from the rest of the world. I think the concern is


Mohamed El-Erian, chief economic advisor for Allianz, told CNBC on Tuesday that the U.S. economy is “in a good place in terms of growth, the U.S. economy is in a good place in terms of attracting capital.” For his part, El-Erian said the IMF “is too pessimistic” about the world’s largest economy. El-Erian said that any disturbances to U.S. economic growth were likely to come from beyond its borders. “We get to a recession if there are spillbacks from the rest of the world. I think the concern is
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Mohamed El-Erian: The US economy looks 'good' for the 'next couple of years at least'

The U.S. economy is poised for growth that’s better than the International Monetary Fund projects, and there’s nothing on the domestic front that could knock it into a recession, according to one of the world’s most closely followed economists.

Mohamed El-Erian, chief economic advisor for Allianz, told CNBC on Tuesday that the U.S. economy is “in a good place in terms of growth, the U.S. economy is in a good place in terms of attracting capital.”

That stood in some contrast to the IMF, which maintained its prediction of 2.9 percent growth for the U.S. this year, but reduced its 2019 American growth prediction from 2.7 percent to 2.5 percent in its World Economic Outlook published on Tuesday.

For his part, El-Erian said the IMF “is too pessimistic” about the world’s largest economy.

“We’ve got three drivers of domestic demand all hitting at the same time: government spending — which is going to get stronger not weaker — household spending, and business investment,” he told CNBC’s Nancy Hungerford at the Barclays Asia Forum in Singapore. “That takes the U.S. through the next couple of years at least, so it wouldn’t surprise me if we get 3 percent growth for this year and next year.”

El-Erian said that any disturbances to U.S. economic growth were likely to come from beyond its borders.

“We get to a recession if there are spillbacks from the rest of the world. The U.S. on its own need not have a recession,” he said.

“Yes, this has been a very long expansion, but it’s been a very slow expansion, so this is qualitatively different from what we’ve seen in the past. I think the concern is about the rest of the world,” the chief economic advisor added.


Company: cnbc, Activity: cnbc, Date: 2018-10-09  Authors: everett rosenfeld, david orrell
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Canada and US reach trade deal to replace NAFTA

The United States and Canada agreed to a deal to replace the North American Free Trade Agreement shortly before a midnight deadline. The deal will also modernize what was covered by NAFTA by adding provisions on digital trade and intellectual property, the administration official said. “The crucial test for a new NAFTA, or any new trade agreement, is whether it is enforceable, particularly with respect to promises to protect worker rights and the environment. Negotiators were racing to meet a U.


The United States and Canada agreed to a deal to replace the North American Free Trade Agreement shortly before a midnight deadline. The deal will also modernize what was covered by NAFTA by adding provisions on digital trade and intellectual property, the administration official said. “The crucial test for a new NAFTA, or any new trade agreement, is whether it is enforceable, particularly with respect to promises to protect worker rights and the environment. Negotiators were racing to meet a U.
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Canada and US reach trade deal to replace NAFTA

The United States and Canada agreed to a deal to replace the North American Free Trade Agreement shortly before a midnight deadline.

The 24-year-old NAFTA, which President Donald Trump railed against as a disaster, will be replaced by the USMCA — the United States-Mexico-Canada Agreement.

Trump tweeted his approval Monday morning for what he called a “wonderful” trilateral agreement.

In a joint statement, U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement “will strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”

The plan is for the leaders of the three North American countries to sign before the end of November, after which it would be submitted to Congress.

The negotiations between American and Canadian officials involved offering more market access to U.S. dairy farmers, as well as Canada agreeing to an arrangement effectively capping automobile exports to the United States.

A senior Trump administration official said the deal will “re-balance our trade relationship with Mexico and Canada,” highlighting new rules on the origin of autos, and market access to Canada’s dairy sector.

The deal will also modernize what was covered by NAFTA by adding provisions on digital trade and intellectual property, the administration official said.

A U.S. official also pointed to the prospect of enforcing the agreement, calling it “one of the most enforceable trade agreements we’ve ever had.”

“This is going to be real, and it’s going to change people’s lives, and it’s going to make the U.S. economy stronger and better,” the official said.

The trade pact will come up for review every six years, which will give the U.S. a “significant new form of leverage” to make sure the arrangement is to its liking, according to the senior American official.

“It’s a good day for Canada,” Prime Minister Justin Trudeau said.

“We celebrate a trilateral deal. The door closes on trade fragmentation in the region,” Jesus Seade, trade negotiator for Mexico’s incoming president, said via Twitter.

The issue of enforcement was front and center in a statement from Senate Finance Committee Ranking Member Sen. Ron Wyden, D-Ore.

“As I’ve said many times, NAFTA has long needed a serious overhaul,” he said. “The crucial test for a new NAFTA, or any new trade agreement, is whether it is enforceable, particularly with respect to promises to protect worker rights and the environment. Americans are sick of hearing speeches about the benefits of new trade agreements when the agreements in place aren’t even enforced and their opportunities don’t materialize.”

Negotiators were racing to meet a U.S.-imposed Sept. 30 deadline to reach an agreement with Canada as they tried to roll out a new North American trade pact.

Canada, America’s second-largest trading partner, was left out when the U.S. and Mexico reached a preliminary deal in late August to revamp NAFTA. Canada was expected to join the talks after that, and the two sides have sparred over dairy products.

Lighthizer said he was prepared to move ahead with just Mexico, but some in Congress, which has to approve a deal, were against leaving Canada behind.

Canadian Prime Minister Justin Trudeau had earlier told reporters in New York during U.N. week that they will keep working on a “broad range of alternatives.”

—CNBC’s Ylan Mui and Stephanie Dhue, The Associated Press and Reuters contributed to this report.


Company: cnbc, Activity: cnbc, Date: 2018-10-01  Authors: everett rosenfeld, joanna tan, liz moyer
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Former Obama administration official: Trump is addressing ‘longstanding’ trade issues

Many of the trade issues on which U.S. President Donald Trump is now focusing have been concerns for numerous White House administrations, according to Michael Froman, who served as U.S. Trade Representative under former President Barack Obama. Although he offered some advice for Trump’s team, he emphasized that the current administration is trying to tackle “longstanding trade issues.” Asked what advice he would offer to those currently engaged in the process of shaping global trade policy, Fro


Many of the trade issues on which U.S. President Donald Trump is now focusing have been concerns for numerous White House administrations, according to Michael Froman, who served as U.S. Trade Representative under former President Barack Obama. Although he offered some advice for Trump’s team, he emphasized that the current administration is trying to tackle “longstanding trade issues.” Asked what advice he would offer to those currently engaged in the process of shaping global trade policy, Fro
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Former Obama administration official: Trump is addressing 'longstanding' trade issues

Many of the trade issues on which U.S. President Donald Trump is now focusing have been concerns for numerous White House administrations, according to Michael Froman, who served as U.S. Trade Representative under former President Barack Obama.

Froman, now Mastercard’s vice chairman and president for strategic growth, discussed the current state of global trade with CNBC on Saturday at the annual Singapore Summit. Although he offered some advice for Trump’s team, he emphasized that the current administration is trying to tackle “longstanding trade issues.”

“Different administrations have had different approaches — I was part of another administration that had a somewhat different approach — but certainly some of the underlying concerns about subsidies, about [intellectual property] theft, about forced technology transfer, those are longstanding issues that a number of administrations have been concerned about,” he said.

On Trump’s tactics, Froman was diplomatic: “He certainly has a very distinct approach to trade, and it’s something that he’s had a longstanding view on, long before he ran for president,” he said. “I think the rest of the world is paying attention to that.”

Asked what advice he would offer to those currently engaged in the process of shaping global trade policy, Froman emphasized international collaboration and discussion.

“I think we are most influential vis-a-vis China when we are part of a broad-based coalition of other developed and developing countries, and I think the administration has started to reach out and work with the EU and Japan vis-a-vis China, and I think broadening that out to include other major emerging economies could be helpful as well,” he said.

He recommended that the U.S. engage in a “meaningful dialogue” with China that involves Washington having a “clear idea about what it is we want China to do, and make sure that we can put it forward in a way that the Chinese will see that it’s in their interest as well.”

The former Obama official also noted that his administration brought multiple World Trade Organization cases against China as part of its “carrot and stick approach.”

On the subject of the Trans-Pacific Partnership, the now-defunct 12-nation trade agreement he had helped shape, Froman said he was encouraged by the ongoing discussions around its U.S.-lacking successor.

“I think it’s good that the other 11 countries continue to pursue TPP, that there are other countries that want to join it,” he said.

Trump canceled U.S. involvement in the TPP when he entered the White House, but Froman told CNBC he sees the work that went into the original agreement as impacting current U.S. policy.

“A number of the issues that the administration has been engaging Mexico and Canada on in the renegotiating of NAFTA are also issues that we dealt with in TPP,” he said. “So whether or not (U.S. administrations) ever come back to TPP itself, I think a lot of the rules that we pursued there, that we negotiated there, will find their way into the global trading system in one form or another.”


Company: cnbc, Activity: cnbc, Date: 2018-09-17  Authors: everett rosenfeld, kevin lamarque
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Blackstone’s Tony James: I don’t see an economic downturn anywhere on the horizon

There’s nothing on the horizon that’s indicating the next financial crisis is going to happen anytime soon, according to Tony James, executive vice chairman at the Blackstone Group. “The last crisis was a terrible crisis, but it was both a financial crisis and an economic downturn. Right now, I don’t see any economic downturn on the horizon, so it will be a little while before I think you have that confluence of factors,” he said. On top of that, James said he does not see the same “kind of exce


There’s nothing on the horizon that’s indicating the next financial crisis is going to happen anytime soon, according to Tony James, executive vice chairman at the Blackstone Group. “The last crisis was a terrible crisis, but it was both a financial crisis and an economic downturn. Right now, I don’t see any economic downturn on the horizon, so it will be a little while before I think you have that confluence of factors,” he said. On top of that, James said he does not see the same “kind of exce
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Blackstone's Tony James: I don't see an economic downturn anywhere on the horizon

There’s nothing on the horizon that’s indicating the next financial crisis is going to happen anytime soon, according to Tony James, executive vice chairman at the Blackstone Group.

Roughly a decade after the last financial crisis roared across the global, the situation is “definitely safer” because banks are more sturdy, risk and compliance procedures are improved, regulators are more vigilant and businesses are less likely to be engaged in risky behavior, James said. In fact, there appears to be some time before a problem rears its head, he told CNBC on Saturday at the annual Singapore Summit.

“The last crisis was a terrible crisis, but it was both a financial crisis and an economic downturn. Right now, I don’t see any economic downturn on the horizon, so it will be a little while before I think you have that confluence of factors,” he said.

On top of that, James said he does not see the same “kind of excess and lack of risk systems, and the interconnectedness” that characterized the global financial crisis a decade ago.

Still, James — who reportedly has a net worth well above $1 billion — acknowledged that the nature of financial shocks means they are unpredictable, so it is hard to know when stresses building.

“That’s one of the thing that makes crises crises: They always surprise you somehow,” he said.

Many economists, analysts and executives have pointed to the ongoing U.S.-China trade war as a likely trigger for a global crisis, but James described himself as an “optimist” on that front.

“There are certainly rivalries between the countries, but I believe their mutuality of interest will, at the end of the day, mean they come to some kind of agreement,” he said.

Washington and Beijing have already applied tariffs to $50 billion of each other’s goods. The U.S. is also considering additional tariffs for which China has warned it would retaliate.


Company: cnbc, Activity: cnbc, Date: 2018-09-17  Authors: everett rosenfeld, adam jeffery
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Russia and China are looking at launching joint projects worth more than $100 billion

A group composed of Russian and Chinese businesses is considering 73 joint investment projects cumulatively worth more than $100 billion, according to a Tuesday statement. Cooperation between China and Russia is an issue of global importance as both nations try to achieve economic stability despite the pain of U.S. penalties — sanctions against Russia, and an escalating tariff war against China. The committee includes more than 150 representatives from “leading Russian and Chinese companies,” ac


A group composed of Russian and Chinese businesses is considering 73 joint investment projects cumulatively worth more than $100 billion, according to a Tuesday statement. Cooperation between China and Russia is an issue of global importance as both nations try to achieve economic stability despite the pain of U.S. penalties — sanctions against Russia, and an escalating tariff war against China. The committee includes more than 150 representatives from “leading Russian and Chinese companies,” ac
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Russia and China are looking at launching joint projects worth more than $100 billion

A group composed of Russian and Chinese businesses is considering 73 joint investment projects cumulatively worth more than $100 billion, according to a Tuesday statement.

Cooperation between China and Russia is an issue of global importance as both nations try to achieve economic stability despite the pain of U.S. penalties — sanctions against Russia, and an escalating tariff war against China. Beijing and Moscow have had a rocky relationship, but the two governments have publicly sought closer ties in recent years.

The group overseeing the potential billions in investment is the Russian-Chinese Business Advisory Committee, which held an annual meeting this week during the Eastern Economic Forum in Vladivostok, Russia.

The committee includes more than 150 representatives from “leading Russian and Chinese companies,” according to a statement from the Russia-China Investment Fund. The RCIF was established in 2012 by China’s state-owned China Investment Corporation and Russian sovereign wealth fund the Russian Direct Investment Fund.

The announcement said seven projects worth a total of $4.6 billion had already been implemented as a result of work by the China-Russia group.

“While strong economic growth in both countries will certainly produce many domestic opportunities for profitable investments, we believe particularly promising transactions will be found in bilateral deals that capitalize on the Russia-China relationship,” Kirill Dmitriev, CEO of the Russian sovereign wealth fund, said in a statement accompanying the announcement.


Company: cnbc, Activity: cnbc, Date: 2018-09-11  Authors: everett rosenfeld, mikhail svetlov, getty images
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A.I. could spur global growth as much as the steam engine did, study shows

Artificial intelligence could contribute an additional 1.2 percent to annual gross domestic product growth for at least the next decade, according to a simulation from McKinsey Global Institute. Beijing, in particular, has made AI part of its five-year plan that runs through 2020 and wants to become a leader in the technology by 2030, the McKinsey report pointed out. “Without AI, China might face a challenge to achieve its target growth rate,” Jeongmin Seong, one of the report’s authors and a se


Artificial intelligence could contribute an additional 1.2 percent to annual gross domestic product growth for at least the next decade, according to a simulation from McKinsey Global Institute. Beijing, in particular, has made AI part of its five-year plan that runs through 2020 and wants to become a leader in the technology by 2030, the McKinsey report pointed out. “Without AI, China might face a challenge to achieve its target growth rate,” Jeongmin Seong, one of the report’s authors and a se
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A.I. could spur global growth as much as the steam engine did, study shows

Artificial intelligence could contribute an additional 1.2 percent to annual gross domestic product growth for at least the next decade, according to a simulation from McKinsey Global Institute.

Overall, AI could deliver $13 trillion in additional global economic activity by 2030, putting its contributions to growth on par with the introduction of other transformative technologies such as the steam engine, McKinsey said in a report released Wednesday morning Hong Kong time.

The institute’s model expects about 70 percent of companies will adopt at least one form of AI by 2030, and that a significant portion of large firms will use a full range of the technology.

AI uses large data sets and algorithms to mimic human behavior. The world’s two largest economies, the U.S. and China, are both racing to invest heavily in the technology. Beijing, in particular, has made AI part of its five-year plan that runs through 2020 and wants to become a leader in the technology by 2030, the McKinsey report pointed out.

“Without AI, China might face a challenge to achieve its target growth rate,” Jeongmin Seong, one of the report’s authors and a senior fellow at McKinsey Global Institute in Shanghai, said in an interview with CNBC.

He noted that China’s labor productivity is below the global average, while the economy is transitioning to one reliant on consumption. Seong said he expects AI to have a significant impact in sales and marketing, which could boost consumer spending.

He also predicted AI will produce notable returns for supply chain and manufacturing businesses.

The McKinsey report laid out how AI will likely impact the economy through multiple channels, including helping or augmenting human labor, substituting it, expanding available products and services, increasing global data flows and creating wealth.

But the report noted the implementation of the technology will likely incur a range of corporate and societal restructuring costs, as well as disrupt employment, reducing consumption.

“The productivity enhancing, labor-saving technology is a challenging issue for all of the economies in the world,” Takashi Miwa, chief Japan economist at Nomura, said at a press briefing on Tuesday. Technologies such as AI will likely lead to greater income inequality, he said.

The McKinsey analysis found that countries that establish themselves as AI leaders — mostly developed economies— could capture 20 to 25 percent more in economic benefits compared to current levels. Emerging economies may only gain half of that, the report said.

“This inequality is not given,” Seong said. “The future is up to us to shape.”


Company: cnbc, Activity: cnbc, Date: 2018-09-05  Authors: evelyn cheng, everett rosenfeld
Keywords: news, cnbc, companies, ai, economies, technology, global, study, engine, 2030, report, steam, mckinsey, shows, likely, spur, growth, seong


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Former Trump lawyer Michael Cohen reportedly investigated for bank fraud exceeding $20 million

Michael Cohen, President Donald Trump’s former lawyer, is under investigation for bank and tax fraud, and investigators are looking at more than $20 million in loans to a taxi company he owns with his family, The New York Times reported on Sunday. Lanny Davis, a lawyer for Cohen, did not immediately respond to a CNBC request for comment about the report from the Times. A spokesperson for Davis told NBC News: “Lanny cannot comment on advice of counsel since there is an ongoing investigation.” The


Michael Cohen, President Donald Trump’s former lawyer, is under investigation for bank and tax fraud, and investigators are looking at more than $20 million in loans to a taxi company he owns with his family, The New York Times reported on Sunday. Lanny Davis, a lawyer for Cohen, did not immediately respond to a CNBC request for comment about the report from the Times. A spokesperson for Davis told NBC News: “Lanny cannot comment on advice of counsel since there is an ongoing investigation.” The
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Former Trump lawyer Michael Cohen reportedly investigated for bank fraud exceeding $20 million

Michael Cohen, President Donald Trump’s former lawyer, is under investigation for bank and tax fraud, and investigators are looking at more than $20 million in loans to a taxi company he owns with his family, The New York Times reported on Sunday.

The value of those scrutinized loans had not been previously reported.

The report, which cited multiple sources familiar with the matter, said authorities are additionally looking into whether the former fixer broke any laws by arranging financial deals with women claiming to have had affairs with Trump. The Times said two of its sources indicated that prosecutors could file charges by the end of August.

Lanny Davis, a lawyer for Cohen, did not immediately respond to a CNBC request for comment about the report from the Times. The newspaper said Cohen and his lawyers declined to comment for its article. A spokesperson for Davis told NBC News: “Lanny cannot comment on advice of counsel since there is an ongoing investigation.”

The bank fraud portion of the investigation centers on whether Cohen misrepresented the value of his holdings in order to secure loans from two New York lenders, Sterling National Bank and the Melrose Credit Union, the report said. The Times added that there’s no indication Cohen missed payments or caused losses to either financial institution, which, according to the paper, is usually part of a bank fraud charge.

Politics watchers are tracking Cohen’s case because he could potentially reach an agreement with prosecutors that would offer him leniency in exchange for his cooperating with Justice Department special counsel Robert Mueller’s probe into whether the Trump campaign was involved with Russian attempts to skew the 2016 U.S. presidential race.

For more on the investigation of Michael Cohen, see the full report from The New York Times.


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Pentagon says it’s postponing Trump’s military parade

The Department of Defense and its interagency partners had updated their prospective cost estimates for the parade, a U.S. defense official with firsthand knowledge of the assessment had told CNBC. The figure consisted of $50 million from the Pentagon and $42 million from interagency partners such as the Department of Homeland Security. An initial estimate last month pegged the prospective cost for the parade at $12 million. That $92 million cost estimate included security, transportation of par


The Department of Defense and its interagency partners had updated their prospective cost estimates for the parade, a U.S. defense official with firsthand knowledge of the assessment had told CNBC. The figure consisted of $50 million from the Pentagon and $42 million from interagency partners such as the Department of Homeland Security. An initial estimate last month pegged the prospective cost for the parade at $12 million. That $92 million cost estimate included security, transportation of par
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Pentagon says it's postponing Trump's military parade

The Department of Defense and its interagency partners had updated their prospective cost estimates for the parade, a U.S. defense official with firsthand knowledge of the assessment had told CNBC. The official spoke on the condition of anonymity.

The parade, originally slated for Nov. 10, had been estimated to cost $92 million, the official said. The figure consisted of $50 million from the Pentagon and $42 million from interagency partners such as the Department of Homeland Security. An initial estimate last month pegged the prospective cost for the parade at $12 million.

That $92 million cost estimate included security, transportation of parade assets, aircraft, as well as temporary duty for troops. The official also noted that, while the size and scope of the military parade can still shift, the plans included approximately eight tanks, as well as other armored vehicles, including Bradleys, Strykers and M113s.

Here’s the statement announcing the parade postponement from Defense Department Spokesman Col. Rob Manning:


Company: cnbc, Activity: cnbc, Date: 2018-08-17  Authors: everett rosenfeld, amanda macias
Keywords: news, cnbc, companies, official, defense, million, partners, military, pentagon, security, department, prospective, interagency, trumps, postponing, parade, cost


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Elon Musk says he’s working with Goldman Sachs and Silver Lake on taking Tesla private

CNBC reported last week that the Tesla board planned to meet with financial advisers this week to formalize a process to explore Musk’s proposal. On August 2nd, I notified the Tesla board that, in my personal capacity, I wanted to take Tesla private at $420 per share. Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. Following the August 7th announcement, I have continued to communicate with the Managing Director of


CNBC reported last week that the Tesla board planned to meet with financial advisers this week to formalize a process to explore Musk’s proposal. On August 2nd, I notified the Tesla board that, in my personal capacity, I wanted to take Tesla private at $420 per share. Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. Following the August 7th announcement, I have continued to communicate with the Managing Director of
Elon Musk says he’s working with Goldman Sachs and Silver Lake on taking Tesla private Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-08-14  Authors: everett rosenfeld, sara salinas
Keywords: news, cnbc, companies, silver, meeting, saudi, lake, hes, taking, sachs, board, discussions, private, going, tesla, goldman, shareholders, musk, working, investors, fund


Elon Musk says he's working with Goldman Sachs and Silver Lake on taking Tesla private

CNBC reported last week that the Tesla board planned to meet with financial advisers this week to formalize a process to explore Musk’s proposal. The board is also likely to ask Musk to recuse himself from the decision, people familiar with the discussions said.

The Tesla board had already met “several times” to discuss the possibility of going private, members of the board said last week, but Musk said Monday he felt it was necessary to inform all of Tesla’s shareholders.

“It wouldn’t be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time,” Musk wrote. “As a result, it was clear to me that the right thing to do was announce my intentions publicly.”

Here’s the full blog post from Musk:

As I announced last Tuesday, I’m considering taking Tesla private because I believe it could be good for our shareholders, enable Tesla to operate at its best, and advance our mission of accelerating the transition to sustainable energy. As I continue to consider this, I want to answer some of the questions that have been asked since last Tuesday.

What has happened so far?

On August 2nd, I notified the Tesla board that, in my personal capacity, I wanted to take Tesla private at $420 per share. This was a 20% premium over the ~$350 then current share price (which already reflected a ~16% increase in the price since just prior to announcing Q2 earnings on August 1st). My proposal was based on using a structure where any existing shareholder who wished to remain as a shareholder in a private Tesla could do so, with the $420 per share buyout used only for shareholders that preferred that option.

After an initial meeting of the board’s outside directors to discuss my proposal (I did not participate, nor did Kimbal), a full board meeting was held. During that meeting, I told the board about the funding discussions that had taken place (more on that below) and I explained why this could be in Tesla’s long-term interest.

At the end of that meeting, it was agreed that as a next step, I would reach out to some of Tesla’s largest shareholders. Our largest investors have been extremely supportive of Tesla over the years, and understanding whether they had the ability and desire to remain as shareholders in a private Tesla is of critical importance to me. They are the ones who believed in Tesla when no one else did and they are the ones who most believe in our future. I told the board that I would report back after I had these discussions.

Why did I make a public announcement?

The only way I could have meaningful discussions with our largest shareholders was to be completely forthcoming with them about my desire to take the company private. However, it wouldn’t be right to share information about going private with just our largest investors without sharing the same information with all investors at the same time. As a result, it was clear to me that the right thing to do was announce my intentions publicly. To be clear, when I made the public announcement, just as with this blog post and all other discussions I have had on this topic, I am speaking for myself as a potential bidder for Tesla.

Why did I say “funding secured”?

Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private. They first met with me at the beginning of 2017 to express this interest because of the important need to diversify away from oil. They then held several additional meetings with me over the next year to reiterate this interest and to try to move forward with a going private transaction. Obviously, the Saudi sovereign fund has more than enough capital needed to execute on such a transaction.

Recently, after the Saudi fund bought almost 5% of Tesla stock through the public markets, they reached out to ask for another meeting. That meeting took place on July 31st. During the meeting, the Managing Director of the fund expressed regret that I had not moved forward previously on a going private transaction with them, and he strongly expressed his support for funding a going private transaction for Tesla at this time. I understood from him that no other decision makers were needed and that they were eager to proceed.

I left the July 31st meeting with no question that a deal with the Saudi sovereign fund could be closed, and that it was just a matter of getting the process moving. This is why I referred to “funding secured” in the August 7th announcement.

Following the August 7th announcement, I have continued to communicate with the Managing Director of the Saudi fund. He has expressed support for proceeding subject to financial and other due diligence and their internal review process for obtaining approvals. He has also asked for additional details on how the company would be taken private, including any required percentages and any regulatory requirements.

Another critical point to emphasize is that before anyone is asked to decide on going private, full details of the plan will be provided, including the proposed nature and source of the funding to be used. However, it would be premature to do so now. I continue to have discussions with the Saudi fund, and I also am having discussions with a number of other investors, which is something that I always planned to do since I would like for Tesla to continue to have a broad investor base. It is appropriate to complete those discussions before presenting a detailed proposal to an independent board committee.

It is also worth clarifying that most of the capital required for going private would be funded by equity rather than debt, meaning that this would not be like a standard leveraged buyout structure commonly used when companies are taken private. I do not think it would be wise to burden Tesla with significantly increased debt.

Therefore, reports that more than $70B would be needed to take Tesla private dramatically overstate the actual capital raise needed. The $420 buyout price would only be used for Tesla shareholders who do not remain with our company if it is private. My best estimate right now is that approximately two-thirds of shares owned by all current investors would roll over into a private Tesla.

What are the next steps?

As mentioned earlier, I made the announcement last Tuesday because I felt it was the right and fair thing to do so that all investors had the same information at the same time. I will now continue to talk with investors, and I have engaged advisors to investigate a range of potential structures and options. Among other things, this will allow me to obtain a more precise understanding of how many of Tesla’s existing public shareholders would remain shareholders if we became private.

If and when a final proposal is presented, an appropriate evaluation process will be undertaken by a special committee of Tesla’s board, which I understand is already in the process of being set up, together with the legal counsel it has selected. If the board process results in an approved plan, any required regulatory approvals will need to be obtained and the plan will be presented to Tesla shareholders for a vote.


Company: cnbc, Activity: cnbc, Date: 2018-08-14  Authors: everett rosenfeld, sara salinas
Keywords: news, cnbc, companies, silver, meeting, saudi, lake, hes, taking, sachs, board, discussions, private, going, tesla, goldman, shareholders, musk, working, investors, fund


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