Zero­Hedge News

• DoJ Argues Tik­Tok “A Mouth­piece Of The Com­mu­nist Party” As World Awaits Judge’s Rul­ing On White House Ban
  DoJ Argues Tik­Tok “A Mouth­piece Of The Com­mu­nist Party” As World Awaits Judge’s Rul­ing On White House Ban Tyler Dur­den Sun, 09/​27/​2020 — 19:34

  The day has finally arrived. Dur­ing a 90-​minute emer­gency hear­ing Sun­day morn­ing, lawyers from the DoJ faced off with the legal team from ByteDance in argu­ments before Judge Carl Nichols of the US Dis­trict Court for the Dis­trict of Colum­bia, who has said he release his deci­sion by late Sunday.

  That deci­sion comes in response to TikTok’s lat­est legal action — a request for an emer­gency injunc­tion — to try and cir­cum­vent a series of exec­u­tive orders signed by Pres­i­dent Trump that seek to com­pletely shut down the app by No. 12. If allowed to stand, Tik­Tok would be booted from Amer­i­can app stores, as of mid­night, with more restric­tions set to come into effect after the election.

  The pro­ceed­ings have been kept mostly under wraps, with a select group of reporters, mostly from var­i­ous wire ser­vices, allowed to report on the hear­ing. About an hour ago, a redacted brief filed by the gov­ern­ment out­lin­ing its argu­ment was finally released, after Bloomberg pub­lished a pre­view ear­lier today which revealed that the DoJ’s argu­ment cen­tered on an ear­lier rul­ing from a judge in PA.

  So far, this is the biggest hint that we’ve got­ten on the judge’s deci­sion, hint­ing that whether Tik­Tok has been accorded “due process” might be a key issue in the judge’s thinking.

  Judge says when he issues his deci­sion, he’ll pub­licly grant or deny an injunc­tion. But the con­tents of the *opin­ion* will be sealed til Tik­Tok and the US gov­ern­ment get back to him on what needs to be redacted.

  — Jo Ling Kent (@jolingkent) Sep­tem­ber 27, 2020

  And while a deci­sion might not arrive until late tonight, since the judge is requir­ing both sides to respond to his opin­ion before it’s unsealed.

  Too early to tell how the judge may decide, but he appeared to tip his hand slightly when press­ing DOJ to defend why the restric­tions gave Tik­Tok enough due process. It seems, he said, that: pic​.twit​ter​.com/​7​y​0​w​j​m​w​r​P​b

  — Brian Fung (@b_fung) Sep­tem­ber 27, 2020

  Axios’ edi­tor Dan Pri­mack believes the odds are that TikTok’s request will be granted, given the prece­dent from the WeChat rul­ing ear­lier this month.

  Tik­Tok rul­ing by EOD.
  
  Odds are com­pany gets TRO request approved. Becuz: Judge skep­ti­cal of gov “sta­tus quo” argu­ment on Thurs, WeChat quasi-​precedent, EO text and process was super sloppy & can grant TRO w/​out dis­put­ing nat sec argu­ment.
  
  But no sure bets in this bizarre thing.

  — Dan Pri­mack (@danprimack) Sep­tem­ber 27, 2020

  Here’s a redacted brief­ing out­lin­ing the rest of the government’s argu­ment, the most thor­ough expla­na­tion yet, which was appar­ently filed Fri­day night, but only released Sun­day after­noon. In its rul­ing, the DoJ accuses Tik­Tok of being a “mouth­piece of the Com­mu­nist Party” and alleges that the com­pany has an “infor­mal” rela­tion­ship with the state secu­rity appa­ra­tus due to Chi­nese laws com­pelling coop­er­a­tion by domes­tic companies.

  Doj s Mem­o­ran­dum in Oppo­si­tion to Tik­tok by Zero­hedge on Scribd

  Beijing-​controlled papers pub­lished a flurry of edi­to­ri­als oppos­ing the deal last week. ByteDance’s ven­ture investors, includ­ing Gen­eral Atlantic Part­ners and Sequoia Cap­i­tal, cre­ated the struc­ture that makes it look like Tik­Tok will largely be owned by US investors, though this fact has appar­ently been dis­puted as both Bei­jing and Wash­ing­ton want the other to come away with major­ity con­trol — one of the key stick­ing points in the talks, accord­ing to press reports. Accord­ing to the struc­ture, Ora­cle will man­age Tik­Tok in its cloud, a highly lucra­tive busi­ness, while ByteDance would retain con­trol of TikTok’s content-​recommendation algo­rithm, seen as its “secret sauce”. An IPO would then be planned for some time next year.

• Back­lash Builds After Biden Com­pares Trump To Nazi Pro­pa­gan­dist Goebbels
  Back­lash Builds After Biden Com­pares Trump To Nazi Pro­pa­gan­dist Goebbels Tyler Dur­den Sun, 09/​27/​2020 — 19:10

  Authored by Sara Carter via SaraACarter​.com,

  Demo­c­ra­tic can­di­date Joe Biden is get­ting a lot of heat for his out­ra­geous com­ments com­par­ing Pres­i­dent Don­ald Trump Sat­ur­day to Nazi pro­pa­gan­dist Joseph Goebbels.The back­lash against those com­ments has been fierce on Twit­ter, with many peo­ple ask­ing for an apol­ogy for the insult­ing and inac­cu­rate comment.

  Biden made the com­ments dur­ing an inter­view on MSNBC’s Stephanie Ruhle. She asked how he would han­dle and respond to Trump’s repeated claims that the Demo­c­ra­tic Party, along with Biden, were push­ing a Marx­ist, social­ist agenda.

  Trump is like “Goebbels,”said Biden.

  “You say the lie long enough, keep repeat­ing it, repeat­ing it, repeat­ing it, it becomes com­mon knowledge…I think peo­ple see very clearly the dif­fer­ence between me and Don­ald Trump.”

  “Trump is clear­ing protests in front of the White House that are peace­ful, you know, with the mil­i­tary,” Biden went on to say.

  “This guy is more Cas­tro than Churchill.”

  Adam Mil­stein, a well-​known and well respected Jew­ish phil­an­thropist, said in a Tweet, “Goebbels helped carry out the sys­tem­atic mur­der of more than six mil­lion Jew­ish people.”

  “This is unac­cept­able, offen­sive and demeans the mem­ory of the Holo­caust,” Mil­stein, who is also a friend of mine for full dis­clo­sure stated. “Biden must apologize!”

  The tragedy, in my opin­ion, is that many anti-​Trump Biden sup­port­ers also seem to be per­pet­u­at­ing these dan­ger­ous com­ments.More­over, there are also many anti­Se­mitic tweets on Twit­ter and the plat­form is doing lit­tle to stop that pro­pa­ganda. SAD!

  Biden should be ashamed of him­self and like Mil­stein has demanded, along with many oth­ers, he must apologize.

  .@JoeBiden liken @realDonaldTrump to Nazi pro­pa­gan­dist Joseph Goebbels. Goebbels helped carry out the sys­tem­atic mur­der of more than six mil­lion Jew­ish peo­ple. This is unac­cept­able, offen­sive and demeans the mem­ory of the Holo­caust. Biden must apol­o­gize! pic​.twit​ter​.com/​H​g​n​c​g​s​H​Q​b​e

  — Adam Mil­stein (@AdamMilstein) Sep­tem­ber 27, 2020

• NYT Pub­lishes 10,000 Word Sum­mary Of 20 Years Of Trump Tax Returns; Pres­i­dent Calls It “Totally Fake News“
  NYT Pub­lishes 10,000 Word Sum­mary Of 20 Years Of Trump Tax Returns; Pres­i­dent Calls It “Totally Fake News“ Tyler Dur­den Sun, 09/​27/​2020 — 18:41

  With the news and out­rage cycle in need of a fresh Trump reset now that the first pres­i­den­tial debate is just two days away, on Sun­day after­noon — almost exactly two years after the NYT first pub­lished a report alleg­ing how Trump “engaged in sus­pect tax schemes as he reaped riches from his father”, the NYT pub­lishedwhat to many anti-​Trumpers is the holy grail of Trump bomshells: a 10,000+ word sum­mary of more than two decades of Trump tax doc­u­ments which reveal that the pres­i­dent paid no income taxes for 10 of the 15 years before he was elected pres­i­dent, with his income tax pay­ments in 2016 and 2017 amount­ing to just $750. The rea­son, as was already largely known, Trump had gen­er­ated nearly $1 bil­lion in casino-​linked losses in the 1990s and onward (inci­den­tally, loss car­ry­fowards or NOLs are per­fectly accept­able and legal instru­ment which any­one can apply against future income) and which off­set much of the money that he made.

  The NYT also claims the doc­u­ments show Trump los­ing mil­lions of dol­lars from his golf courses, “vast write-​offs, an audit bat­tle and hun­dreds of mil­lions in debt com­ing due” and that Trump earned $73 mil­lion abroad.

  Com­bined, Trump ini­tially paid almost $95 mil­lion in fed­eral income taxes over the 18 years. He later man­aged to recoup most of that money, with inter­est, by apply­ing for and receiv­ing a $72.9 mil­lion tax refund, start­ing in 2010.

  “The Appren­tice,” along with the licens­ing and endorse­ment deals that flowed from his expand­ing celebrity, brought Mr. Trump a total of $427.4 mil­lion, The Times’s analy­sis of the records found. He invested much of that in a col­lec­tion of busi­nesses, mostly golf courses, that in the years since have steadily devoured cash — much as the money he secretly received from his father financed a spree of quixotic over­spend­ing that led to his col­lapse in the early 1990s.

  The NYT report focuses closely on the specifics of the $73 mil­lion refund:

  A large refund has been cru­cial to his tax avoidance.

  Mr. Trump did face large tax bills after the ini­tial suc­cess of “The Appren­tice” tele­vi­sion show, but he erased most of these tax pay­ments through a refund. Com­bined, Mr. Trump ini­tially paid almost $95 mil­lion in fed­eral income taxes over the 18 years. He later man­aged to recoup most of that money, with inter­est, by apply­ing for and receiv­ing a $72.9 mil­lion tax refund, start­ing in 2010. The refund reduced his total fed­eral income tax bill between 2000 and 2017 to an annual aver­age of $1.4 mil­lion. By com­par­i­son, the aver­age Amer­i­can in the top .001 per­cent of earn­ers paid about $25 mil­lion in fed­eral income taxes each year over the same span.

  The $72.9 mil­lion refund has since become the sub­ject of a long-​running bat­tle with the I.R.S.

  When apply­ing for the refund, he cited a giant finan­cial loss that may be related to the fail­ure of his Atlantic City casi­nos. Pub­licly, he also claimed that he had fully sur­ren­dered his stake in the casi­nos. But the real story may be dif­fer­ent from the one he told. Fed­eral law holds that investors can claim a total loss on an invest­ment, as Mr. Trump did, only if they receive noth­ing in return. Mr. Trump did appear to receive some­thing in return: 5 per­cent of the new casino com­pany that formed when he renounced his stake. In 2011, the I.R.S. began an audit review­ing the legit­i­macy of the refund. Almost a decade later, the case remains unre­solved, for unknown rea­sons, and could ulti­mately end up in fed­eral court, where it could become a mat­ter of pub­lic record.

  A visual sum­mary pre­pared by the NYTof Trump’s profit and losses is shown below:

  One argu­ment made by the NYT is that by the time Mr. Trump announced his can­di­dacy in 2015, “his rev­enue streams from “The Appren­tice” and licens­ing were dry­ing up”, his “pro­ceeds from fame con­tin­ued to tum­ble, falling below $10 mil­lion in 2017 and to $2.9 mil­lion in 2018″ and Trump “was in need of finan­cial rein­vig­o­ra­tion.” This is where the idea to run for pres­i­dent came form.

  The ques­tion then is, since there appears to be no dis­cov­ery of legal malfea­sance, did Trump’s busi­nesses ben­e­fit from the pres­i­dency which the NYT responds affir­ma­tively “in some respects” point­ing to the flood of new mem­bers in Mar a Lago “start­ing in 2015 allowed him to pocket mil­lions more dol­lars a year from the business.”

  And with­out a block­buster “gotcha” that would con­firm that Trump had vio­lated the law, the NYT sim­ply con­cludes by not­ing that “in the end the finan­cial pic­ture for Mr. Trump is fraught” and that “as he approaches one of the most con­se­quen­tial elec­tions in Amer­i­can his­tory — down in most polls, under I.R.S. audit and heav­ily in debt — his busi­nesses may not be well equipped to nav­i­gate what lies ahead.”

  While notable, and hardly unique to just the pres­i­dent, this is prob­a­bly not the damn­ing cli­max so many in the anti-​Trump field were expect­ing in the 4-​year-​long cru­sade to get Trump’s tax returns. Oh yes, and then there is the audit, the same audit Trump has said pre­vents him from pub­lish­ing his tax filings:

  Hang­ing over his head is the audit. Should the I.R.S. reverse the huge refund he received 10 years ago, Mr. Trump could be on the hook for more than $100 million.

  Since the ques­tion of where all this infor­ma­tion came from will likely be scru­ti­nized, the NYT noted that “all of the infor­ma­tion The Times obtained was pro­vided by sources with legal access to it” adding that “while most of the tax data has not pre­vi­ously been made pub­lic, The Times was able to ver­ify por­tions of it by com­par­ing it with pub­licly avail­able infor­ma­tion and con­fi­den­tial records pre­vi­ously obtained by The Times.”

  Those argu­ing that the report may paint a one-​sided pic­ture of Trump’s tax returns will be out of luck hop­ing that the NYT would pub­lish the source data:

  “We are not mak­ing [Trump’s tax] records them­selves pub­lic because we do not want to jeop­ar­dize our sources, who have taken enor­mous per­sonal risks to help inform the public.”

  The arti­cle also admits “the fil­ings will leave many ques­tions unan­swered, many ques­tion­ers unful­filled,” and also kills off the idea that Pres­i­dent Trump’s finances were some­how linked to Rus­sia. The piece reads: “Nor do [the tax returns] reveal any pre­vi­ously unre­ported con­nec­tions to Russia.”

  This must’ve been a real heart-​breaker for the NYT pic​.twit​ter​.com/​V​o​h​d​u​S​u​B​w​e

  — Michael Tracey (@mtracey) Sep­tem­ber 27, 2020

  Of course, to the rabid Russ­ian con­spir­acy the­o­rists, not even this admis­sion will suf­fice as Matt Taibbi put it succinctly:

  Here @davidfrum dou­bles down on his witch-​hunting pro­pa­ganda about Trump tax returns, clas­si­fy­ing those who advised cau­tion as “peo­ple who defended Trump.” We weren’t defend­ing Trump: we were defend­ing the basic press stan­dard of not mak­ing unsup­port­able pub­lic alle­ga­tions. https://t.co/YzY0F6zbot

  — Matt Taibbi (@mtaibbi) Sep­tem­ber 27, 2020

  For those pressed for time, here is a recap of the key rev­e­la­tions in the NYT arti­cle, which the NYT recapped in a sep­a­rate arti­cle:

  • Mr. Trump paid no fed­eral income taxes in 11 of 18 years that The Times exam­ined. In 2017, after he became pres­i­dent, his tax bill was only $750.
  • He has reduced his tax bill with ques­tion­able mea­sures, includ­ing a $72.9 mil­lion tax refund that is the sub­ject of an audit by the Inter­nal Rev­enue Service.
  • Many of his sig­na­ture busi­nesses, includ­ing his golf courses, report los­ing large amounts of money — losses that have helped him to lower his taxes.
  • The finan­cial pres­sure on him is increas­ing as hun­dreds of mil­lions of dol­lars in loans he per­son­ally guar­an­teed are soon com­ing due.
  • Even while declar­ing losses, he has man­aged to enjoy a lav­ish lifestyle by tak­ing tax deduc­tions on what most peo­ple would con­sider per­sonal expenses, includ­ing res­i­dences, air­craft and $70,000 in hair­styling for television.
  • Ivanka Trump, while work­ing as an employee of the Trump Orga­ni­za­tion, appears to have received “con­sult­ing fees” that also helped reduce the family’s tax bill.
  • As pres­i­dent, he has received more money from for­eign sources and U.S. inter­est groups than pre­vi­ously known. The records do not reveal any pre­vi­ously unre­ported con­nec­tions to Russia.

  While the media will be going through all of these rev­e­la­tions with a fine-​toothed comb, it’s also notable what the report fails to show: unless the NYT has saved the kicker for a sub­se­quent arti­cle, “there appears to be no wrong­do­ing, no Rus­sia ties, and noth­ing of sub­stance beyond what most cor­po­ra­tions do”, as the National Pulse’s Raheem Kas­sam writes.

  Also of note, the New York Times failed to include the details of the returns in its report­ing, admit­ting in its own arti­cle: “The Times declined to pro­vide the records, in order to pro­tect its sources.”

  When asked dur­ing a Sun­day news con­fer­ence about the NYT rev­e­la­tions, Trump called the cen­tral claim the NYT makes – that he only paid $750.00 in fed­eral income taxes – “fake news.”

  In a state­ment to The Times, Trump Orga­ni­za­tion lawyer Alan Garten said “most, if not all, of the facts appear to be inac­cu­rate” and report­edly took issue with the amount of taxes Trump has paid: “Over the past decade, Pres­i­dent Trump has paid tens of mil­lions of dol­lars in per­sonal taxes to the fed­eral gov­ern­ment, includ­ing pay­ing mil­lions in per­sonal taxes since announc­ing his can­di­dacy in 2015.”