Josh Marshall takes a moment to reflect on the fact that President Trump gets a lot of money from Russia. Even if the explanation is completely innocent, it's still a pretty big deal:
Many people look at this arc of growing dependency on money from the former Soviet Union and look for that moment when Trump becomes so dependent on money from Russia that he's forced to cut a deal with Vladimir Putin; or perhaps his business partners catch him in a compromising situation and then he's owned by nefarious forces in Russia. I do not rule out the possibility that some less lurid version of one of these scenarios did happen. But what many of us see as the smoke, which must somewhere lead to fire, is actually the story itself. The smoke is the story! Or to put it differently, the deep business ties provide a compelling explanation and I think likely sufficient explanation of Trump's persistent coziness and affection with top figures in Russia and Russian geopolitical interests.
We can also see the impact of the Crimea crisis of 2014 - which is the fulcrum of so much of the Trump/Russia story. If Trump had been getting a substantial amount of his buyers and investors from Russia, the imposition of sanctions in 2014 created a major obstacle to his way of doing business. (The big dip in the global oil market likely had a similar impact.) Remember, what's bad for Trump is wrong. That's the rule of thumb. Not just bad for Trump but wrong, stupid, terrible. And it wasn't just bad for Trump, it was clearly a very bad development for many people in his business orbit. Bad for Trump, Bad! Bad for Trump's friends, Bad! Bad for Trump's friends who keep the money flowing, Especially Bad!
I don't deny that we may eventually find a needle in this haystack. There are parts of the story which remain difficult to piece together based on what I've called this "innocent explanation." There are so many sleazy characters, so many connections to figures in the Russian criminal underworld that I'm sure there are at least a few sub-needles there. But haystack itself is a very, very big story.
He's seriously the most corrupt person ever elected to that office, and I'm including the guys from the 1880s and Warren Harding.
Diners at Mar-al-Lago overheard the President talking with Japanese Prime Minister Shinzo Abe, the latest in a string of idiotic security breaches he's made all by himself:
As Mar-a-Lago's wealthy members looked on from their tables, and with a keyboard player crooning in the background, Trump and Abe's evening meal quickly morphed into a strategy session, the decision-making on full view to fellow diners, who described it in detail to CNN.
News of Pyongyang's launch had emerged an hour earlier, as Trump was preparing for dinner in his residence. Officials had concluded the Musudan-level missile flew 310 miles off North Korea's eastern coast before crashing into the Sea of Japan.
Oy.
Meanwhile, the Sears Death Watch continues:
[B]ecause Sears and its sister company Kmartare merely shells of their former selves after they destroyed so much value over the years for employees, customers, and investors, there may be a group of stakeholders secretly hoping the end comes soon: shopping malls.
While a Sears Holdings bankruptcy might lead malls to suddenly face the prospect of being flooded with zombie retail space, they would have the chance to redevelop the stores themselves and attract new tenants who would pay them, and not Seritage, significantly higher rents.
Of course, a Sears Holdings bankruptcy carries risks for them, too. As noted, many retailers are reducing their footprints, not expanding them, so filling up the space may not be so simple, and for malls not in desirable locations, Sears Holdings' demise could be catastrophic. Credit Suisse says some 184 malls can be classified as "least valuable property" -- meaning at risk of shutting down -- and, concernedly, Sears is the anchor store in 110 of them. A Sears Holdings bankruptcy and the wave of store closings that would follow could very well jeopardize their existence.
Again, oy.
Not exactly a slow news day:
- Former Alabama Senator Jeff Sessions won confirmation as Attorney General of the U.S. on a 52-47 party-line vote.
- Meanwhile, the Senate told Massachusetts Senator Elizabeth Warren to sit down and shut up, but "she persisted," thus beginning her 2020 presidential campaign.
- And though the event was almost 26 full hours ago, yesterday's appeals court hearing in California resulted in a Trump tweet being rebuked by the President's own nominee for the Supreme Court. (The BBC has a really good primer on the U.S. constitutional system of checks and balances, for those overseas.)
- Speaking of the president, it's becoming clear as day that his motivations are very simple, and amount to a total integration of his businesses with the office. Just like we told you.
- Also, we should expect more crises, real and imagined, to scare people into supporting his consolidation of power.
- Closer to home, the building I work in, Willis Tower, has secured a $1bn refinancing that will free up funds for a $500m upgrade. Too bad the company that built it will be dead within two years, according to the bond markets.
And finally, for those of you living in the new, evidence-free world of today, you'll be happy to know that all of these things may have come about because of the lunar eclipse and comet happening Friday night.
Via Crain's, Business Insider explains in detail how Eddie Lampert has structured his financial holdings so that he may benefit more from Sears' destruction than from its success:
For all the problems in Sears stores, Lampert has set up his various businesses in a way that means he has other ways to gain no matter what happens to the company.
ESL holds a majority share of Sears, and that stake has lost three-quarters of its value just in the past few years — more than $1.5 billion since early 2015 alone.
But Lampert, through ESL, has loaned Sears more than $1.12 billion and promised an additional $679 million over the past two years to help keep the company afloat. In return, Sears pays origination fees and interest directly to ESL, and, by extension, Lampert. A recent shareholder complaint claims that Lampert and ESL made at least $19 million in fees and interest payments from a $400 million loan in 2014.
Lampert and ESL could potentially seize stores and inventory if Sears can't pay its bills. That $400 million loan, for instance, is backed by collateral of 25 stores valued at $500 million total.
Even if the company went bankrupt, Lampert wouldn't walk away empty-handed, according to bankruptcy experts and former executives.
How on earth did Sears' board allow this to happen? Oh, right—Lampert owns 54% of the company, and so appoints the board.
There are shareholder lawsuits, of course, though it's doubtful they'll succeed. And so the murder continues.
You know, it's hard to feel sorry for anyone who invested in this charlatan's buildings, but still:
Two signs of a slowdown in Trump's signature building have emerged: a decline in sales of condos and a stack of unsold listings that is bigger than in competitive buildings.
At year-end, sales in the building were down from 2015, according to Gail Lissner, vice president of Appraisal Research Counselors, which tracks the downtown real estate market. There were 34 sales in the building in 2016, a drop of almost 40 percent from 2015's 56 sales, according to Lissner.
That's compared to an 11.3 percent increase in sales of all condos priced $650,000 and up, from 1,451 sales in 2015 to 1,616 sales in 2016, according to Midwest Real Estate Data. (Though many condos at Trump are priced in the multimillion-dollar range, the prices on currently listed condos start in the mid-$600,000s.)
The Trump building has the highest percentage of units on the resale market within a group of 10 downtown condo buildings all completed within several years of one another, according to a Crain's analysis.
Investors are out millions, and it seems directly attributable to Trump being Trump. Pity.
Now that Eddie Lampert has killed Sears almost with his bare hands, he's selling the best bits off. The Craftsman brand of tools is probably the most respected piece of the formerly-august company, so naturally it's the first to go:
Sears Holdings agreed to sell its Craftsman tool brand to Stanley Black & Decker for about $900 million, marking CEO Edward Lampert's third move in the past two weeks to prop up the beleaguered retailer with fresh sources of funding.
Under terms of the deal, Stanley will pay $525 million at closing and $250 million after three years, the companies said in a statement today. The buyer also will make annual payments on new Craftsman sales for 15 years. Separately, Sears announced plans to shutter 150 unprofitable stores in a bid to streamline the chain.
Craftsman has been part of Sears since 1927, when the retailer acquired the brand for $500. The tools debuted in the iconic Sears catalog two years later. By the 1940s, the brand benefited from a surge in power-tool sales. In 1981, President Jimmy Carter was given a Craftsman woodworking set as his farewell gift when he left the White House.
I really don't understand this guy. He's loaned Sears $500m of his own money. Is it ego? Incompetence? Or part of a master plan to make money by destroying Sears? We might never know.
The first brick-and-mortar Sears store, which closed this past fall, will become apartments and a giant liquor store by next year:
Chicago developer Springbank Capital Advisors has purchased the old Sears store in Ravenswood and plans to turn it into a $30 million apartment and retail complex, said David Trandel, chairman and chief executive of Springbank.
The building at 1900 W. Lawrence Avenue was closed last summer by Hoffman Estates-based Sears Holdings as the retail firm shuttered dozens of Sears and Kmart stores. The 40,434-square-foot store had been operated as a Sears store since November 1928.
The full development of apartments and retail will be 105,000 square feet. The $30 million in financing is provided by UC Funds of Boston, Trandel said. The developer plans to start removing asbestos this month, and begin construction in May with a summer 2018 completion.
Still, Eddie Lampert's murder of the Sears brand is criminal.
Two years after U.S. Cellular got absorbed by Sprint-NexTel, the Chicago White Sox have finally gotten around to renaming their ballpark. The winner? Guaranteed Rate, a low-cost mortgage lender. The change is effective November 1st.
I wonder what people will call it. "The Cell" is no more, "Comiskey" is long dead, and "Sox Park" isn't really the official name. Maybe people will call it "The G'Rate?" Nah.
The Tribune has some Twitter reactions up. My favorite: "Guaranteed Seats Park."
And hey, the Sox aren't the worst team in baseball right now (Atlanta Braves), nor are they the worst in the league (Minnesota Twins). But they're 60-65 and 12 games out of contention with only a couple dozen left to play, so the team will have plenty of time to change the marquee after the season ends October 1st.
The Justice Department announced today that it's ending private prisons because, it turns out, they suck:
In making the decision, Deputy Attorney General Sally Yates cited new findings by the Justice Department's inspector general, who concluded earlier this month that a pool of 14 privately contracted prisons reported more incidents of inmate contraband, higher rates of assaults and more uses of force than facilities run by the Federal Bureau of Prisons.
"They simply do not provide the same level of correctional services, programs and resources; they do not save substantially on costs; and ... they do not maintain the same level of safety and security," Yates wrote in a memo Thursday.
Marc Mauer, executive director of The Sentencing Project, nonetheless said the Justice Department announcement represented a "major milestone in the movement away from mass incarceration."
"It has been a stain on our democracy to permit profit-making entities to be handed the responsibility of making determinations of individual liberty," Mauer said in a prepared statement. "Today's action moves us closer to a moment when government can once again assume this important responsibility."
I'm with Mauer. There are some things from which taking profits is simply immoral, and housing prisoners is one. Just watch the last season of Orange is the New Black for an only-slightly-exaggerated view.
This is one of those ways that President Obama is leaving the campsite better than he found it. Good.
Amazon this month launched the first of what it plans to comprise a fleet of 40 cargo planes to support its Prime delivery service. From their blog:
Now, we see the same opportunity to innovate in transportation. I'm very excited to introduce Amazon One, a Boeing 767-300 that is our first ever Amazon branded plane which will serve customers by adding capacity to support one and two day package delivery in the US. Adding capacity for Prime members by developing a dedicated air cargo network ensures there is enough available capacity to provide customers with great selection, low prices and incredible shipping speeds for years to come. Over the next couple of years, we’ll roll out 40 planes just like this one.
Fortune spells out the effects on Amazon's business:
For Amazon, the main benefit of owning the shipping network could be significant for its bottom line amid soaring shipping costs. The company spent over $8.7 billion on shipping in 2014, up from $6.6 billion in 2013. Creating a logistics service could dramatically lower those costs.
Amazon will lease the airplanes from Atlas Air Cargo, potentially owning almost 20% of Atlas's fleet.
(Photo: Amazon)